Document of The World Bank Report No: ICR2589 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-47820) ON A LOAN IN THE AMOUNT OF US$120 MILLION TO THE ISLAMIC REPUBLIC OF IRAN FOR THE ALBORZ INTEGRATED LAND AND WATER MANAGEMENT PROJECT April 25, 2013 Sustainable Development Department Middle East and North Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2012) Currency Unit = Iranian Rials (IRR) IRR10,000= US$ 0.82 US$ 1 = IRR 12,181 FISCAL YEAR March 20 – March 21 ABBREVIATIONS AND ACRONYMS AILWMP Alborz Integrated Land and Water Management project ASC Agriculture Service Centers BWC Basin Water Council BWF Basin Water Fund BWSC Basin Water and Soil Committee CAS Country Assistance Strategy CLO Central Liaison Office CWRAS Country Water Resources Assistance Strategy DOE Department of Environment EC Executive Committee EIA Environmental Impact Assessment EPAP Emergency Preparedness Action Plan (dam safety) ERR Economic Internal Rate of Return ESMP Environmental and Social Management Plan FM Financial Management FMR Financial Monitoring Report FRWO Forest, Rangeland and Watershed Organization FYDP Five-Year Development Plan GOI Government of Iran HY High Yield ICR Implementation Completion and Results Report IIP Irrigation Improvement Project IPM Integrated Pest Management IWREMC Integrated Water Resources and Environmental Management Consultancy IWRM Integrated Water Resources Management MCC Main Conveyance Canal MDOE Mazandaran Department of Environment M&E Monitoring and Evaluation MFRWD Mazandaran Forestry, Rangeland and Watershed Department MRWC Mazandaran Regional Water Company MTR Mid-term Review MJAO Mazandaran Jihad and Agriculture Organization MENA Middle East and North Africa Region MOE Ministry of Energy MOEF Ministry of Economic Affairs and Finance MOJA Ministry of Jihad and Agriculture MPO Management and Planning Organization NPV Net Present Value OMC Operation and Maintenance Company O&M Operation and Maintenance PAD Project Appraisal Document PDO Project Development Objective PIM Participatory Irrigation Management PIU Project implementation Unit PMSC Project Management Support Consultancy POE Panel of Experts RP Resettlement Plan RPF Resettlement Policy framework RWCs Regional Water Companies SA Social Assessment SC Steering Committee SIL Sector Investment Loan TA Technical Assistance WBI World Bank Institute WRM Water Resources Management WUAs Water Users Associations Vice President: Inger Anderson Country Director: Ferid Belhaj Sector Manager: Steven N. Schonberger Project Team Leader: Abdulhamid Azad ICR Team Leader: Abdulhamid Azad ISLAMIC REPUBLIC OF IRAN ALBORZ INTEGRATED LAND AND WATER MANAGEMENT PROJECT CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 4 3. Assessment of Outcomes .......................................................................................... 12 4. Assessment of Risk to Development Outcome......................................................... 18 5. Assessment of Bank and Borrower Performance ..................................................... 18 6. Lessons Learned ....................................................................................................... 21 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 22 Annex 1. Project Costs and Financing .......................................................................... 23 Annex 2. Outputs by Component ................................................................................. 24 Annex 3. Economic and Financial Analysis ................................................................. 28 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 33 Annex 5. Beneficiary Survey Results ........................................................................... 35 Annex 6. Stakeholder Workshop Report and Results................................................... 36 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 37 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 53 Annex 9. List of Supporting Documents ...................................................................... 54 Attachments: Alborz Integrated Land and Water Management Project - Photos MAPS IBRD 33254 and 33339 A. Basic Information IRAN - Alborz Iran, Islamic Republic Integrated Land and Country: Project Name: of Water Management Project Project ID: P071170 L/C/TF Number(s): IBRD-47820 ICR Date: 04/25/2013 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: SIL Borrower: IRAN Original Total USD 120.00M Disbursed Amount: USD 63.92M Commitment: Revised Amount: USD 120.00M Environmental Category: A Implementing Agencies: Ministry of Jihad and Agriculture (MOJA) and Mazandaran Regional Water Company (MRWC) Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 10/09/2003 Effectiveness: 02/17/2006 02/17/2006 Appraisal: 10/26/2004 Restructuring(s): Approval: 05/26/2005 Mid-term Review: 04/18/2010 Closing: 10/31/2012 10/31/2012 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Unsatisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Unsatisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Agricultural extension and research 3 3 Central government administration 3 3 Forestry 2 2 General agriculture, fishing and forestry sector 2 2 Irrigation and drainage 90 90 Theme Code (as % of total Bank financing) Land administration and management 13 13 Participation and civic engagement 25 25 Rural policies and institutions 13 13 Rural services and infrastructure 25 25 Water resource management 24 24 E. Bank Staff Positions At ICR At Approval Vice President: Inger Andersen Christiaan J. Poortman Country Director: Ferid Belhaj Joseph P. Saba Sector Manager: Steven N. Schonberger Narasimham Vijay Jagannathan Project Team Leader: Abdulhamid Azad Satoru Ueda ICR Team Leader: Abdulhamid Azad ICR Primary Author: Joseph G. Nagy ii F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project would assist the Islamic Republic of Iran in piloting basin-wide integrated water resources management (IWRM) in Mazandaran Province so that lessons learned can be replicated in the rest of the country. The project's development objective was to demonstrate the benefits of the IWRM at the river basin level by: (a) sustainably increasing agricultural productivity through the improved irrigation and drainage system and participatory management mechanism; (b) reducing soil erosion and sediments yields into the Alborz Dam, which was currently under construction using the Islamic Republic of Iran's funds, through the improved upper watershed management; and (c) protecting the water environment downstream of the Babol River and other water bodies through improved hydrological/water quality monitoring reservoir operation, and pest management. Revised Project Development Objectives (as approved by original approving authority) No Revision. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : Improved water quality downstream of the Babol River Value quantitative or 5 >5 5 to 6 Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 2 : Rate of reduced soil erosion and sediment yields flowing into the Alborz Dam Value quantitative or 0 15 15 Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments Soil loss by erosion is probably in the range of only one third of what was (incl. % estimated in the Project Appraisal Document (PAD). achievement) Indicator 3 : Increased agricultural productivity and income through double cropping intensity Value quantitative or 20 34 30 Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % iii achievement) Indicator 4 : Water users provided with new/improved irrigatiion and drainage services Value quantitative or 0 77,000 30,000 Qualitative) Date achieved 09/30/2002 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 5 : Female water users provided with irrigation and drainage services Value quantitative or 0 No target set 1,540 Qualitative) Date achieved 10/31/2012 10/31/2012 10/31/2012 Comments (incl. % Estimated 2% of all water users. achievement) Indicator 6 : Operational water user associations created and/or strengthened Value quantitative or 0 10 19 Qualitative) Date achieved 10/31/2012 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 7 : Area provided with irrigation and drainage services (total) Value quantitative or 0 52,000 20,000 Qualitative) Date achieved 10/31/2012 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 8 : Area provided with irrigation and drainage (new) Value quantitative or 0 19,000 4,000 Qualitative) Date achieved 10/31/2012 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 9 : Area provided with irrigation and drainage services (improved) Value quantitative or 0 33,000 16,000 Qualitative) Date achieved 10/31/2012 10/31/2012 10/31/2012 Comments (incl. % iv achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Number of competent operational staff and consultants Value (quantitative 9 25 50 or Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 2 : Increased number of hydrological and water quality monitoring stations Value (quantitative 6 10 10 or Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 3 : Established and functional Basin Water Council Value (quantitative 0 1 1 or Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 4 : Area covered by rehabilitated or new irrigation and drainage Value (quantitative 0 52,000 20,000 or Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) Indicator 5 : Area where watershed management plans are implemented Value (quantitative 0 51,500 20,000 or Qualitative) Date achieved 09/30/2004 10/31/2012 10/31/2012 Comments (incl. % achievement) v G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) Moderately 1 09/27/2005 Moderately Satisfactory 0.00 Unsatisfactory 2 12/22/2005 Moderately Satisfactory Moderately Satisfactory 0.00 Moderately 3 05/01/2006 Moderately Satisfactory 3.73 Unsatisfactory Moderately 4 08/02/2006 Moderately Satisfactory 3.75 Unsatisfactory Moderately 5 12/27/2006 Moderately Satisfactory 6.20 Unsatisfactory 6 03/28/2007 Satisfactory Moderately Satisfactory 6.20 7 12/04/2007 Satisfactory Moderately Satisfactory 9.38 8 02/07/2008 Satisfactory Moderately Satisfactory 12.09 9 08/06/2008 Satisfactory Moderately Satisfactory 15.93 10 03/20/2009 Satisfactory Moderately Satisfactory 20.97 11 12/30/2009 Moderately Satisfactory Moderately Satisfactory 26.14 12 06/29/2010 Moderately Satisfactory Moderately Satisfactory 35.23 Moderately Moderately 13 07/05/2011 43.58 Unsatisfactory Unsatisfactory 14 07/04/2012 Unsatisfactory Unsatisfactory 55.37 H. Restructuring (if any) Not Applicable I. Disbursement Profile vi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. The project was approved in 2005 at a time when Iran was at a crossroads regarding its management of water resources. The country had invested heavily in hydraulic infrastructure, consisting of over 100 dams with an estimated storage volume of over 30 billion m3, and complementary water distribution systems for both irrigation and drinking water supplies in urban areas. On the institutional front, management of resources was decentralized through autonomous Regional Water Companies, which were responsible for irrigation infrastructure. 2. The country was facing water management challenges on several fronts. These included rapid aquifer depletion, water quality deterioration and service gaps in meeting the demands of rapidly growing urban settlements. These problems were further compounded by water logging and salinization caused by poor drainage, and periodic flooding in estuarine areas caused by ineffective management of riverine water flows. 3. Many dams had been built without complementary investments in water distribution networks to farmers’ fields resulting in sub-optimal utilization of the highly capital intensive investments in the dams. In many cases, arrangements for operation and maintenance (O&M) were inadequate. Furthermore, in the absence of agricultural reforms, farmers had not been diversifying to water-conserving high value crops. Agricultural productivity was much lower than in comparable MNA countries in terms of yield/ha and per unit of water utilized. Rationale for Bank assistance 4. In 2003, the Bank approved a Water Resources Sector Strategy which advocated managing water resources by adopting the following three principles: (1) the ecological principle that land and water in a river basin need to be managed holistically to protect the environment; (2) the institutional principle that integrated water resource management (IWRM) is best carried out when managed at the lowest appropriate level with the participation of all stakeholders; and (3) the financial principle that water is a scarce resource and needs to be managed as an economic good through the design of appropriate incentives that improve allocation and enhance quality. 5. In many ways, the difficulties experienced with past investments in Iran arose because the institutional and financial designs of projects did not follow the above principles of IWRM. For instance, irrigation water pricing did not generate incentives for resources conservation. Water allocations between the Operation Maintenance Companies (OMCs) and urban water utilities did not meet any “market� test. Enforcement of pollution standards was virtually non-existent, and the GOI’s capacity to protect upper watersheds from unsustainable exploitation by herders and loggers was weak. There was tremendous scope for improving water use productivity in agriculture 1 through pricing and institutional reforms. Unless such measures were taken, unsustainable water use could seriously constrain Iran’s competitiveness in the global economy and slow future growth. 6. To address these problems it was agreed that a holistic approach to IWRM was required – a strategy in which the Bank had wide experience – together with implementing specific programs to validate key aspects of design. Through a process of testing innovative project designs, learning about what works and what doesn’t in the Iranian context, GOI could enhance management of water resources in a sustainable manner. 7. The Government’s request for Bank assistance through the project therefore, came not only as a follow-up to the Irrigation Improvement Project (IIP), but also with the idea of transferring global knowledge and experience in sustainable Water Resources Management (WRM) to Iran. The use of a Sector Investment Loan (SIL) instrument allowed the applicability of global best practices to the Iranian context to be validated sufficiently before any country-wide scaling-up. The project design also recognized the need for initiating a process of knowledge sharing and peer learning between the Bank and GOI project teams and phasing so that key technical assistance (TA), ensuring user participation, took place before the start of construction. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 8. The project's development objective was to demonstrate the benefits of integrated water resources management (IWRM) at the river basin level by: (a) sustainably increasing agricultural productivity through the improved irrigation and drainage system and participatory management mechanism; (b) reducing soil erosion and sediment yield into the Alborz Dam, on the Babol River, through improved upper watershed management; and (c) protecting the water environment downstream of the Babol River and other water bodies through improved hydrological/water quality monitoring reservoir operation, and pest management. 9. The key outcome indicators of the project were: (a) increased agricultural productivity (US$/ha), (b) reduced soil erosion and sediment yields flowing into the Alborz Dam (m3/year) and (c) improved water environment downstream of the Babol River (m3/s) and other water bodies. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 10. The PDO has not been revised. 1.4 Main Beneficiaries 11. The primary beneficiaries of the project are farmers in traditional irrigation and rainfed areas. The introduction of a modern surface irrigation system (area of 16,573 ha) 2 will benefit 33,000 farmers. The improvement of deteriorated traditional irrigation infrastructure and on-farm improvements, resulting in a more reliable, efficient, and equitable water distribution system in the existing irrigation area (area of 36,178 ha) will benefit a further 44,000 farmers. Farmers will also experience increased production from improvements in irrigation and drainage that will enable crop diversification into secondary crops in the fall and winter seasons when heavy rain can cause flooding. In addition, foresters and herders in the upper watershed, fishermen using abbandans (water reservoirs) and the 973,000 basin population will benefit from the environmental and integrated watershed resource management programs. 12. The two implementing organizations and their staff, Mazandaran Jihad and Agriculture Organization (MJAO), responsible for on-farm tertiary and quaternary irrigation, drainage and agricultural extension, and MRWC, responsible for weir and trunk irrigation networks are also beneficiaries. The project gave both agencies various training opportunities as well as working experience in best irrigation management and agricultural practices that they can use in the future. Skilled and unskilled labor employed during the construction and operation and maintenance period also benefited. 1.5 Original Components (as approved) 13. The project consisted of the following five components: Component 1: Upper Watershed, Forestry and Rangeland Management (Base Cost - US$13.2million): This included: (i) TA for preparing an upper watershed master plan and capacity building for community management organizations; (ii) forest and rangeland rehabilitation and management, including nursery construction and regeneration of natural/artificial stands (51,500 ha); and (iii) soil and water protection measures, such as gabion check structures and other vegetative measures, over the upper watershed area. The aim is to establish effective soil and water protection through sustainable, participatory community-based forest and rangeland management, including establishment of cooperatives in the upper watershed. Component 2: Irrigation and Drainage Management (Base Cost - US$128.7 million): This included: (i) rehabilitation and construction of irrigation and drainage systems covering a total area of about 52,000 ha, comprising 33,000 ha of traditional irrigation areas, and 19,000 ha of new irrigation areas previously rainfed, with supplementary irrigation by groundwater; (ii) capacity building and TA for establishment of WUAs to manage secondary networks and cost recovery of O&M expenditures, and (iii) agricultural extension and research for farmers in improved water management, crop diversification and productivity The aim is to enhance irrigation water use efficiency and agricultural production/income through rehabilitation and modernization of the irrigation/drainage systems, together with improved O&M, diffusion of participatory water management, and training and support for agricultural extension/research. Component 3: Integrated Water Resource Management (IWRM) (Base Cost - US$4.9 million): This included: (i) TA to establish a Basin Water Council (BWC); (ii) a Basin Water Fund (BWF) to provide assistance for community-based activities for water and 3 natural resources conservation, and (iii) the establishment of a support system that enables the BWC to discharge its mandate by involving stakeholders in sharing information on environmental impacts, benefits of the project, and promoting water conservation in the basin. Component 4: Environmental Management (Base Cost-US$7.6 million): This included the following elements as identified in the Environmental and Social Management Plan (ESMP): (i) water quality monitoring in rivers, aquifers and abbandans (water reservoir), (ii) river ecology monitoring and mitigation measures; (iii) forest monitoring and management; (iv) an integrated pest management plan; (v) resettlement instruments; (vi) a dam safety plan; (vii) cultural property; and (viii) public participation and awareness raising. These were to be addressed in the form of TA for special studies, provision of monitoring equipment and capacity building training for GoI staff and users, as well as prioritized mitigation measures. Component 5: Project Implementation and Coordination Support (Base Cost - US$3.9 million): This component supported project implementation and coordination nationally and at basin level. It also provided institutional support to the Ministry of Jihad and Agriculture (MOJA) and the Mazandaran Regional Water Company (MRWC) including strategic sectoral and feasibility studies for future projects. 1.6 Revised Components 14. No revision. 1.7 Other significant changes 15. No significant changes. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Soundness of the Background Analysis: 16. Project design incorporated many lessons learned from the Irrigation Improvement Project (IIP) which closed in 2002. The IIP highlighted the need to: (i) establish proper institutional coordination involving management at the lowest appropriate level; (ii) strengthen implementing agency procurement capabilities to enhance project implementation; (iii) foster beneficiary participation through WUAs at an early stage; and (iv) embrace the IWRM approach to address interconnected water issues in the same basin. 17. In addition, various alternative project approaches were studied and analyzed including: (i) an irrigation and drainage project alone (without integrated water resources management); (ii) technical assistance (TA) alone (no lending for infrastructure); and (iii) rehabilitation of the existing irrigated area alone. These were rejected based on lessons 4 learned from the IIP project, the increased benefits that arise from combining infrastructure investments and complimentary TA, and the opportunity to increase farmer incomes in rainfed areas as well as mitigating over-extraction of groundwater by a reliable surface irrigation system in the new areas. 18. Project design: The overall project design was appropriate. However, more attention should have been paid to the problems encountered with land acquisition, which became a major issue and delayed project implementation. Land acquisition issues should have been identified as a risk with corresponding mitigation measures. Also the use of preliminary engineering designs (instead of detailed designs) along with outdated irrigation cost feasibility studies, resulted in initial low cost estimates. After revision, there was a substantial cost increase for civil works. 19. Government commitment/Stakeholder involvement: The commitment of the GOI was strong throughout project preparation, appraisal, implementation and operation. Stakeholders (GOI departments and agencies, farmers/herders and foresters) were involved in project preparation and design through participatory processes from the outset. 20. Risk assessment: The overall risk of attaining the project development objectives and the risk to attaining component results was rated as “High� in the Project Appraisal Document (PAD) and the ICR team agrees with this assessment. The PAD had identified several potential risks and identified corresponding mitigation measures agreed to by the GOI. At project close, many of the identified risks had materialized. The table below presents the risks and mitigation measures identified in the PAD along with an assessment of the risks by the ICR team. Risk PAD Mitigation Measures Planned at Appraisal ICR Assessment of Risks Risk Rating To Project M The GOI has demonstrated strong interest and commitment by This risk factor was correctly Development applying for the PPF, which is being used to build project identified and appropriately Objective implementation capacity. It has also signaled commitment to rated. The commitment of the improved water management through this project as well as the GOI continued to be strong 1. Continued Urban Water Supply and Sanitation Project. The CWRAS has commitment also been widely discussed by stakeholders in Iran through its during project preparation, of the GOI to key ministries including MOEF, the MPO, MOJA, and MOE. appraisal, implementation and the project There is a consensus that the proposed project will serve as a operation. The risk remains M pilot demonstrating the benefits of the IWRM approach on a until the project is completed basin scale. 2. Inadequate H 1) There is long experience in the project area with traditional This risk factor was correctly institutional irrigation water management structures such as that of the identified and appropriately capacity mirabs and ab-dars. rated. The mitigation measures development 2) During the first year of project implementation, management planned at appraisal came into in WUAs to contracts between the OMCs and WUAs will be developed and play. This risk is now M guarantee made effective before branch canal network construction Component 2 dealt with this in sustainable commences. A draft management framework for WUAs has detail. Also in the first three O&M of been included in the Operations Manual. years the project had a very irrigation 3) The project will provide substantial support (through the large capacity building infrastructure, Irrigation and Drainage Management Support Consultancy) for programme on participatory to be effective stakeholders’ consultation, social awareness raising irrigation management; studies constructed and training activities, as well as community consultations and workshops and study tours under the before the signing of management contracts with WUA staff. inside Iran and overseas 5 project The project will also facilitate the process for legally sanctioning WUA establishment and operation. 3. Lack of L 1) The BWC will be established by a decree from the The risk now remains low and legal status of Mazandaran Governor as a legal entity. This procedure is was correct. The decree was BWC and straightforward and entails no complex issues. issued in the first two years of BWF 2) Detailed TORs for the BWC and BWF included in the the project. Operations Manual ensure stakeholders’ participation and inter- governmental agency coordination. 4. Inadequate H 1) The project will provide opportunities to learn from good This risk factor was correctly development practices in other countries. Key CLO and PIU staff have identified and appropriately of a fully conducted one study tour in Morocco and propose to visit rated. The risk remains high. functioning Turkey, utilizing PPF funds. BWSC is functioning under the BWC 2) Technical assistance from the integrated water resources and planning deputy of the environment management consultancy will be provided for Mazandaran governor. The establishment and operation of the BWC. TA will also ensure Basin Water and Soil basin-wide stakeholders’ participation. Detailed TORs are Committee (BWSC) was included in the Operations Manual. operationalized through the 3) A simplified financial procedure has been agreed to support establishment of its secretariat community- based land and water activities under the BWF. To in September 2006 with trained ensure the sustainability of the fund a separate account will be staff. The information base, opened in a commercial bank to receive the beneficiary water balance, and watershed repayment portion of the fund. master plan are in place Overall Risk High High Rating H = High: M = Moderate; L = Low 2.2 Implementation 21. The project was approved in May 2005 but became effective eight months after Board approval. The project closed with a total disbursement of US$61.57 million or 51.3% of the total loan amount of US$120 million External Factors 22. The main external factors responsible for slow project implementation were:  Imposition of international sanctions over 2007 to 2012 period caused delays in disbursements and implementation. Initially Project Special Accounts (PSA) denominated in US dollars had to be converted to Euros. Subsequently, delays were incurred in the transfers of funds as intermediary banks refused to make transactions to banks in Iran. These delays and uncertainties impacted the pace of implementation of the works as contractors were hesitant to accelerate their activities under such uncertain conditions.  In connection with the UN sanctions the selection of equipment to be purchased by the project contributed to delays from the very beginning. Specifications had to be reviewed against the list of prohibited items and entities identified by the relevant UN Resolutions.  Travel restrictions to Iran by Bank staff were put in place in June 2009. A World Bank Supervision/Mid-Term Review mission did take place in April/May 2010 when 6 restrictions were lifted. Travel restrictions were again applied and consequently there were no Bank supervision missions between June 2011 and the closing date of October 2012.  Because of underestimation of project costs at appraisal, and increased costs due to land acquisition, the project faced a shortfall in project financing. Factors Subject to Government and Implementing Agencies Control 23. There were local and counterpart budget constraints and some delays in payments to contractors and suppliers. In particular, budget constraints delayed land acquisition resulting in delays in the construction of critical components such as the construction of some canals. There were also delays in preparing final irrigation engineering designs and preparation of technical specifications and tender documents which in turn delayed procurement. Visa issues delayed the startup of the Project Management Support Consultancy (PMSC). 24. The Basin Water and Soil Committee (BWSC), established to oversee the IWRM in the basin was slow to fulfill its mandate and thus impeded the implementation of IWRM project initiatives. The structure of the BWSC was unwieldy with a 36 member Coordination Committee and a Secretariat that needed strengthening. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E Design 25. The project M&E system was designed to monitor and evaluate the three main PDO outcome indicators. The three main PDO indicators included: (i) improved river maintenance flow (m3/s) and water quality of the Babol river; (ii) the rate of soil erosion and sediment flowing into the Alborz dam, and (iii) increased agricultural productivity (kg/ha and US$/ha). The project M&E system was also designed to monitor and evaluate the results indicators for each component as presented in section F (b) of the ICR Data Information Sheet. 26. Data collection, analysis, and reporting were through annual and semi- annual reports as well as periodic evaluations by external consultants and Bank supervision missions. A key element of the M&E system design was to ensure adequate feedback from the BWC to the Central Liaison Office (CLO) and the Bank supervision team. The M&E system was also made responsible for collection of procurement and contract management data and information. 27. The CLO was responsible for coordinating all M&E activities of the PIUs and WUAs and preparing reports assisted by consultants. Consultants were to train CLO staff in data processing, storage and analysis, using standardized methodologies and reporting formats. Consultants were to strengthen the capacity of the staff of the PIUs, WUAs and other stakeholders to monitor and evaluate project impacts in terms of productivity, sustainability and stakeholder satisfaction. The BWC was responsible for sharing project information and data at the basin level. 7 M&E Implementation 28. No specialized M&E Unit was established in CLO or in the two PIUs and only after the mid-term review was adequate staff and time dedicated to M&E. The project provided training and attempted to install an MIS system but was not fully successful in getting the MIS system to properly function with an adequate data base although more emphasis was given to this task and M&E in general in the last two years leading up to the close of the project. In particular, MOJA, with consultant training and assistance, produced an effective functioning M&E system by the close of the project. The project did implement an M&E framework for the oversight procedure of safeguard policies and introduced logical framework analysis. However, given difficult country conditions and an initial period of non-familiarity with Bank procedures and guidelines, most time was spent on procurement and financial management issues rather than M&E. M&E Utilization 29. The M&E system improved baseline data and provided values for outcome and impact indicators and for producing progress reports. An achievement was the building of a project website in both Farsi and English. 30. The CLO did maintain data on procurement and contract management and was able to monitor the progress of project component implementation through the M&E system. At the close of the project, the M&E system could have been operating at a more acceptable level with the capability of being sustained through to project completion by the GOI and beyond. However, because of transfer of funds issues, no M&E reports have been finalized for several months leading up to the close of the project. Furthermore, identifying final outcomes and impacts are problematic due to the incomplete status at loan closure. 2.4 Safeguard and Fiduciary Compliance 31. Safeguard: Project preparation and review triggered seven safeguards: environmental assessment, pest management, cultural property, involuntary resettlement, forests, safety of dams, and projects on international waterways. A detailed Environment and Social Management Plan (ESMP) is in place that focuses on the development of effective M&E plans for implementation of all seven environmental and social safeguards. At the close of the project, overall safeguard compliance was rated as “Satisfactory�. To address multiple safeguard issues, the project team started assessment and review of the possible major impacts in 2002. The environmental assessment prepared for the Alborz Dam (not part of the project) was reviewed and site visits conducted in the project area. During project preparation, the project prepared an Environment Impact Assessment (EIA), a Social Assessment (SA), an Integrated Pest Management Plan (IPM), conducted a compliance review of involuntary resettlement obtaining clearance from the Environmentally and Socially Sustainable Development Network (ESDQC), a dam safety report by a Panel of Experts, and notified riparian countries on international waterways (the Caspian Sea) of the proposed project on behalf of GOI. The project was classified as Category “A�. 8 32. The study area of the Environmental and Social Assessment (ESA) included the Alborz Dam, the upper watershed and the downstream irrigation areas. Throughout project preparation, consultations were held with line ministries, concerned provincial departments, water companies, local communities, NGOs, and the public. There was a combination of public consultations and interviews with farmers and other residents, and meetings with technical specialists in the government agencies. Environmental assessment 33. As part of the ESMP, several environmental assessment and monitoring activities were set in motion. A water quality monitoring plan was prepared and implemented on the Babol River and selected water reservoirs. A river ecology monitoring plan was prepared by international consultants and implemented by an NGO. Plans include the monitoring of bird, fish and plant species in the Babol River and 12 abbandans (reservoirs). Pest management 34. A Pest Management Plan (PMP) was developed as part of ESMP to: (i) reduce chemical control; (ii) expand non-chemical control; (iii) promote Integrated Pest Management (IPM); and (iv) phase out hazardous pesticides. A monitoring plan of the PMP was also approved and implemented. Farmer Field School (FFS) pilot studies in several villages for citrus and rice crops were successfully completed. The IPM program also set up a health monitoring program and data base for farm workers, prepared specifications for detection lab equipment, and analysis of water quality data. Cultural property 35. Various precautions were taken to avoid any adverse impact on cultural heritage and historical monuments in and around the dam area. The Mazandaran Provincial Authorities provided assurances that both Shrines and cemeteries were documented and treated with respect. A survey and mapping of physical cultural property was made of the entire dam area. Several excavations were undertaken and some of the excavated findings are on display in Sari and Babol museums. Involuntary resettlement 36. Main Canal: As indicated by several supervision missions as well as semi-annual resettlement monitoring reports, the implementation of the RAP has been successfully completed. Compensation was paid for land acquisition and one-time payments were made to five persons belonging to vulnerable groups. Major efforts were made to strengthen public awareness through a number of outreach activities. The Land Acquisition and Resettlement Committee (LARC) held two meetings in each affected village where complaints were heard and addressed, and community workers visited the affected villages at least four times and held a number of meetings with project affected people individually and collectively at the village mosque. Leaflets and brochures were widely distributed and question and answer sessions were organized. Since serious grievances were avoided, this process could be completed. At the end of the process, the 9 grievance committee a carried out a review and confirmed that all project affected people were compensated in accordance with the RAP for the main canal area. The resettlement process for the main canal area can be considered a good practice example. Forests 37. A Master Plan was prepared along with a forest and rangeland monitoring plan. Potential impacts on the environment from forest management activities were identified. Activities included rehabilitation of existing forest roads, soil erosion, and forest cooperative activities. Safety of dams 38. Several studies related to dam safety were prepared. Studies included a re- evaluation of potential magnitudes and ground motions caused by active tectonic features / faults, a dynamic analysis of the embankment body stability, and deformation analysis. Various other dam safety and related studies have been completed including, Fault rupture study, Seismic studies, Alborz dam construction quality review, a safety survey for three dams, a review of the Alborz dam O&M plan and O&M manual, Hydrometric data collection for PMP/PMF studies and PMP and PMF evaluations, and a dam break analysis. An Emergency Preparedness Action Plan relating to dam safety was also commissioned and observed no particular anomalies on the dam body or inside the inspection gallery. Monitoring and recording by dam safety instruments has been carried out with no particular indication of anomalies. Considering the dam’s good external condition, monitoring records and additional study results on hydrology and seismology, the dam is considered to be safe. Nevertheless, a set of recommendations has been provided to the Mazandaran Regional Water Company (MRWC) and the consulting engineer with a view to further enhancing the safety of the dam (see paragraph 46 below). Fiduciary Compliance 39. Financial management has been satisfactory. Initial delays in issuing financial management reports were addressed by installing an accounting software that was customized and configured for the project. An accountant provided hands-on training to the PIU Financial Officers. Each financial officer posted data on commitments, disbursements, projections and overall financial status and generated quarterly reports for project management reviews and decision making. 40. The Bank’s advice on strengthening financial management was followed. After installation of the new software and training, financial management aspects continued to meet the requirements of the project satisfactorily. The Financial Officer in each PIU followed due diligence procedures and maintained good relations with the Financial Controller in the Management and Planning Organization. 41. Both implementing agencies submitted audit reports and audited financial statements in accordance with the legal agreement. Audits included project and entity 10 audits that were received by the Bank and the audit findings were in general all acceptable to the Bank with minor qualifications that were addressed by the PIUs. Procurement 42. Based on the Bank’s ex-post procurement review, the procurement process followed by the Government was satisfactory, albeit initially quite slow, and the procurement risk for the project was rated as moderate. Filing was available and well kept; time allowed for submission of bids was generally sufficient and bids were being opened in public at the stipulated time immediately after bid submission. Minutes of bid openings and records of bid security were maintained. 43. In connection with UN sanctions, technical specifications had to be reviewed against the list of prohibited items identified by the relevant U.N. Security Council Resolutions. All procured goods were in compliance. 44. The Bank addressed issues of procurement by emphasizing the need to establish competent technical staff in PIUs. The CLO arranged extensive training and hired a consultant expert on Bank procurement procedures to assist in the preparation of bidding documents. 2.5 Post-completion Operation/Next Phase 45. The project will require a minimum of three years beyond project close to complete. With the completion of the Alborz dam and the impounding of the reservoir, the project is highly relevant to the GOI and the government has taken the necessary steps to see the project through to completion. The GOI has committed the funds for the completion of the project and project implementation is on-going. The MRWC/MOJA will need to pay particular attention to ensure that all the civil works are completed as early as possible. All the obligations related to signed contracts as well as the required funds to complete unfinished civil works contracts will be financed by the Government. The GOI has put in place an Action Plan (see Annex 7) with a time schedule for performing various civil works activities by MRWC along with the required budget. Recommendations for Dam Safety 46. To further enhance Alborz dam safety: (i) Almost two years have passed since the reservoir was fully impounded in April 2011, but the settlement of the embankment body has not been fully completed. The current level of monitoring should be continued for three more years until the dam is fully settled and stabilized. Seismic activities and potential landslides should be carefully monitored. (ii) The Panel of Experts should meet to conclude reservoir impoundment results based on monitoring data records. 11 (iii) An O&M Manual should be prepared and reviewed by the POE. The operation section of the Manual should stipulate the recently agreed revised operational rules. The dam safety inspection procedures should be elaborated in the Manual. The Emergency Preparedness Action Plan (EPAP) should also be upgraded and finalized. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 47. Considering the continued contribution of agriculture to the country's economy, to employment, and to reduction in rural poverty, the project’s objectives were and still are highly relevant. Establishing the pilot basin-wide IWRM with efficient irrigation infrastructure in Mazandarn Province in order to replicate lessons learned for the remainder of the country are relevant objectives and in line with the Government’s current aim to improve the quality of life for its citizens. Moreover the project’s PDOs of sustainably improving agricultural productivity, reducing soil erosion and dam sediment yields, and protecting the water environment in the Babol and other water bodies still remain highly relevant for Iran’s continued economic and social development. 3.2 Achievement of Project Development Objectives Rating: Unsatisfactory 48. The project was not fully successful in achieving its main development objective. The main, secondary and tertiary irrigation and drainage canals are under construction and not fully operational. As such some critical targets of the PDOs indicators were not been fully met at the time of project closing. Nevertheless, the project has a number of achievements to its credit as outlined below and in Annex 2. The project constraints during implementation outlined in Section 2 above resulted in generally mixed progress toward achieving the project objectives. 49. The project's development objective was to demonstrate the benefits of the IWRM at the river basin level by: (a) Sustainably increasing agricultural productivity through the improved irrigation and drainage system and participatory management mechanism (increase in agricultural productivity kg/ha or income US$/ha). 50. Because of the delays in fund transfer from the loan the progress of five large irrigation and drainage contracts ranged at project closing from 16% to 52%. There was slow progress in agricultural extension and research activities to support farmers for improved water management and crop diversification because of civil works delays. 51. Irrigation water productivity was improved by activities primarily relating to component 2. This included construction of Raees Kola and Ganj Afrouz diversion dams and the main conveyer canal that originates at Ganjafrouz diversion weir with a maximum capacity of 23 M3/sand after about 18.5 km (completed) reaches the 12 bifurcation point of C24 and C25 canals. The C24 and C25 canals are about 22.4 and 23.6 km respectively and irrigate the development area as well as a part of the improvement area located between Talar and Siahroud rivers. This major contract is under construction and only 30% completed by project closing. 52. Other activities were the construction of the Halidasht pumping station (completed), dredging of abbandans (water reservoirs), rehabilitation and improvement of water resources and lining of canals. Establishment of WUAs to manage tertiary networks and agriculture extension and research support to farmers were also included under this component to increase productivity. 53. About 20,000 ha (38% of PAD target) under the project was irrigated at project close benefiting about 30,000 farmers including 1,540 female beneficiaries (40% of PAD target). The breakdown of the 20,000 ha is 4,000 ha for new irrigation areas (21% of PAD target), and 16,000 for improved irrigation areas (48% of PAD target). The 34% double cropping intensity target for increases in agricultural productivity and incomes for the 20,000 ha has been very nearly met and is at 30% and is likely to remain at this percentage at project completion. The main crops irrigated are rice, wheat and citrus. The increase in yields at project close of about 10% to 15% for traditional area crops and about 15% to 20% for development area crops, along with more efficient crop input use, has led to an increase in farmer incomes. For example, by using conservative yield estimates, in traditional areas, incomes from rice increased by 15% and incomes from citrus increased by 10%. Progress has also been made in terms of de-silting water reservoirs, increasing local water storage facilities, and increasing fishing operations. 54. Nineteen operational water user associations (WUAs) were created against a PAD target of ten. (b) Reducing soil erosion and sediments yields flowing into the Alborz Dam to increase life of the dam through improved upper watershed management (reduced cubic meter/year soil erosion and sediment yields into the dam). 55. The watershed area comprises just over 45,000 ha of forested slope in various degrees of vigor and about 5,000 ha of rangeland also of varying degrees of productivity. There is a population of about 17,000 living in villages and scattered households within the watershed project area. 56. An upper watershed master plan was completed. The master plant provided the strategies to implement a number of activities for achieving the above PDO. Project activities included: construction of water and soil erosion structures, such as gabion check dams and biological protection measures; rehabilitation of forest roads; restoration of alpine rangelands through seeding; closures and participatory grazing control regimes; improving forest productivity through replanting and subsequent protection of cutover areas and degraded stands, facilitating forest management improvements through the adoption of a community forestry approach and new silvicultural and timber management and marketing; ensuring increased responsibility and involvement of local communities in the planning and management of natural resources in the upper watershed through government dialogue on decentralization. 13 57. The watershed management plan was implemented in over 20,000 hectares (about 40% of the 51,500 ha target). The share of forestry areas managed by functional forestry cooperatives or similar entities is at 37% against a target of 100%. Implementation has been slower than expected in particular in the areas of socio-economic and participatory forest management issues. 58. The original baseline soil loss erosion amount identified in the PAD was found to be over-estimated by about two-thirds. At project close, soil erosion and sediments flowing into the Alborz dam were estimated to have decreased to 73% of the yields estimated at appraisal thus achieving the target. (c) Protecting the water environment downstream of the Babol River and other water bodies through improved hydrological/water quality monitoring reservoir operation (improved cubic meter/s river maintenance flow cubic meter/s). 59. A water quality monitoring plan was prepared and implemented in the Babol River system and for several selected water reservoirs. The six existing hydrological and water quality monitoring stations were improved and four new stations were added. All data is fed into a common database and monitoring results are shared among various agencies. The information is primarily used to maintain and improve the river maintenance flow and quality of water in the downstream portion of the Babol river system in order to maintain sufficient dissolved oxygen for fish, especially in peak irrigation periods. The monitoring also identifies the levels of various minerals in the water. 60. As a result of the water quality monitoring, river flows have been increased and are now estimated at 1 m3 /sec which is adequate in terms of environmental considerations. The target for dissolved oxygen (DO) in rivers and water bodies was set at the baseline figure of 5 mg/l. The monitoring of DO mg/l at project close indicated a figure of slightly greater than 5 mg/l thus meeting/exceeding the target. 3.3 Efficiency 61. An economic analysis of the project was undertaken using a standard cost-benefit analysis relating project costs to incremental project benefits to estimate an internal rate of return (details in Annex 3). The methodology closely follows the rate of return methodology used at appraisal and at the mid-term review. The economic analysis undertaken for the project takes into consideration that the project will be completed by 2016. The analysis includes the total project costs during this period as well as the incremental benefits from agricultural production that will accrue from the completed project. The incremental benefits are in the form of increased crop net returns arising from: (i) higher crop yields, and (ii) higher cropping intensity from the project irrigation area that covers about 52,750 ha, of which 36,178 ha are traditional irrigation areas (improvement area) and 16,573 ha are new irrigation areas (development area). The incremental benefits come mainly from more and timely use of irrigation water. The 14 incremental crop yields and cropping intensity also resulted from: (i) support for the WUAs, and (ii) support from agricultural support services. 62. The economic rate of return (ERR) relates the cost of a project to the net benefits of the project over time. In this case, the costs of the project increased beyond the anticipated costs of both the PAD and Mid-term economic analyses. If the net benefits remained relatively the same in all three analyses, the rate of return (ERR) of the ICR economic analysis would undoubtedly have decreased. However, the overall net benefits of the ICR economic analysis were greater than the anticipated net benefits of the PAD and Mid-term economic analyses. The higher net benefits arose because of a correction in agricultural product prices that took place around the Mid-term review and continued into the period when the ICR analysis was undertaken. Agricultural product prices (rice, wheat, fruits, and vegetables) increased, almost doubling, whereas agricultural input prices (fertilizer and other inputs) increased at a lower rate thereby significantly increasing the ICR economic net benefits relative to the net benefits of the PAD and mid- term review. Differences in the exchange rate, the anticipated with-project cropping patterns, the number of new and rehabilitated hectares assumed in the irrigation scheme, and other minor changes among the three economic analyses also account for differences in the net benefits and ERR, but in the ICR analysis, the major difference was the increase in agricultural commodity prices that gave rise to increased net benefits. 63. The table below presents the estimated financial and economic rate of return for the base case scenarios of the present ICR analysis and compares the returns with those estimated at appraisal and at the mid-term review. Financial and Economic Rates of Return and NPVs Base Case Scenarios ICR Appraisal 2/ Mid-Term Review 3/ Financial Analysis FRR 19.4% 16.2% 17.5% NPV@10% 1/ US$140 mil. US$38 mil. US$73 mil. Economic Analysis ERR 16.6% 17.4% 13.9% NPV@10% 1/ US$93 mil. US$57.8 mil. US$30 mil. 1/ Present value of Net Incremental Benefits in 2012 constant US$. 2/ Project Appraisal Document 3/Mid-Term Review Report, Volume 2, June, 2010, Central Liaison Office, (Euroconsult-Mott MacDonald). 64. The project is justified based on the overall economic rate of return (ERR) of 16.6% and a NPV of US$ 93 million. The project was thus a worthwhile undertaking and a good investment for the people of Iran. Furthermore, other benefits, namely the increase in urban water supply in the improvement area, the reduced pumping from the aquifers, the reduction in soil loss in the upper watershed, the effects of reduced siltation in the reservoir, the improved stability of natural stands and the enhanced ecosystem are 15 difficult to quantify in physical and economic terms and hence are excluded from the cost-benefit analysis but remain very substantial project benefits. 3.4 Justification of Overall Outcome Rating Rating: Unsatisfactory 65. The project was consistent with the priorities of the government and the CAS. The project objectives and design remain highly relevant. The financial and economic rate of return (efficiency), based on the premise that the project will be completed by the GOI, is acceptable. However, the overall outcome rating is unsatisfactory because significant aspects of the project were not completed by project close. Slow implementation was due to an initial delay of about 15 months, resulting from land acquisition issues and the need to prepare final engineering designs, as well as subsequent delays in fund transfers from the loan due to the lack of available banking channels. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 66. The project supported the government’s program for rural women through the extension program and the Rural Women’s Office in Mazandaran. The program recruited women extension officers in twelve ASCs, along with transport and office support. The extension officers carried out workshops, training and farm field school training for a network of ‘Key’ women farmers to act as village level facilitators, passing on information to other women on technical issues such as irrigation and IPM. At ICR there were 1,540 new female water users provided with new irrigation and drainage services. 67. Farmers at the tail-end of irrigation systems often have unreliable water and are generally much poorer. The project formed WUAs and agreed procedures to regulate water use that will ensure future equitable water availability for all farmers. (b) Institutional Change/Strengthening 68. The project strengthened water institutions at central and provincial levels by a large domestic and overseas training programs, covering IWRM, Basin water council functions, participatory irrigation, procurement and financial management of irrigation technology, institutions and management. The training introduced modernized irrigation concepts, service-oriented management, and dissemination of advanced technologies. For the first time, a detailed master plan was developed for the watershed. 69. The dam safety and other safeguard policies achieved substantial success in enhancing institutional development not only for the Alborz dam but for other dams in the Mazandarn province. Institutional achievements under the project also included the establishment of Water Users Associations and a Basin Water Council. 16 70. A number of national engineering firms who undertook the initial project engineering designs were strengthened by working closely with international engineering consultants throughout the design and re-design phase. These national engineering firms were involved in irrigation design throughout Iran and their experience working with international companies would impact their long-term capacity. Employment was generated for 600 persons months during project implementation of the environmental component and staff were trained in all aspects. 71. Several training courses were held by international project consultants. A summary of selected implemented courses is presented below: 1- Implemented Training Courses by Forest and Rangeland Management Consultant: About 170 person-day training courses were held. In these courses, the Master Plan and other related subjects on forest and rangeland management were presented for the specialists and managers of MNRD, MDOE, MOJA. 2- Implemented Training Courses by Irrigation and Drainage Management Consultant: About 10504 person-day training courses have been held at various levels including farmers, specialists and managers of related organizations with the subjects on WUAs, participatory development, extension activities. 3- Implemented Training Courses by Integrated Water Resource and Environmental Management Consultant: About 1000 person-day training courses were held at various levels including farmers, orchardists, specialists of related organizations with the subject of related tasks of water resources and environmental management. In addition, an international study visit to Malaysia on water resources and environmental management. 4- Implemented Training Courses by Project Management Supporting Consultant: Various workshops with the subjects of project management, monitoring and evaluation and MIS were held at CLO and PIUs for related specialists. 5- In addition to the above, about 1600 person-day training courses were held under the contract with various training institutes for specialists of MJAO PIU, MRWC PIU, MNRD, MDOE, MOJA, CLO, WUA’s members, farmers and orchardists. 6 - Water User Association Study Visits to China were held in July 2010 for the MJOA group and in July 2009 for the MRWC group. (c) Other Unintended Outcomes and Impacts (positive or negative) 72. There were considerable cost savings from re-working the original irrigation designs and undertaking the following:  Changing the Main Drain type from concrete canal-drain to earth canal-drain.  About 10 km reduction in the Main Drain. 17  About 9 km reduction in C24 length and about 4.8 km increase in new C25 as well as increase in its size.  Eliminating a service road in the tertiary system with significant land acquisition reduction costs.  Reviewing the design criteria of the improvement area and applying less costly rehabilitation designs. 73. In addition, the project fostered better contract management, procurement, introduction of a water balance information base, GIS, modeling of environmental flows, and watershed development for IWRM. Also a number of procurement specialists became international staff and are now working for international organizations. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 74. Not applicable. 4. Assessment of Risk to Development Outcome Rating: Substantial 75. The risk level is substantial and depends on the government’s priorities for allocating the necessary resources and its implementation initiative for the timely completion of the project works. See Government ICR, Annex 7. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 76. The Bank’s performance during identification, preparation and appraisal of the project was moderately satisfactory. Identification and preparation included consultations with line ministries, concerned provincial departments, local communities, NGOs, and the public. There was a combination of public consultations and interviews with farmers and other stakeholders and meetings with technical specialists in government agencies. The design of the project incorporated lessons learned from the previous IIP project. Safeguards were properly incorporated into the project. The project was consistent with both GOI and World Bank objectives and priorities in the sector at that time. Throughout preparation and appraisal, the Bank maintained a good working relationship with the Borrower. 77. The design of the project was moderately satisfactory, but more attention should have been given to two major problems encountered during implementation: (i) land acquisition problems, and (ii) the problems associated with the lack of updated final irrigation and drainage infrastructure designs with up-dated costs. While most of the risk 18 factors were identified and mitigation measures adopted, some of the potential risks (Section 2.1) were not properly identified and addressed. (b) Quality of Supervision Rating: Moderately Satisfactory 78. The Bank planned and carried out two supervision missions a year during the first half of project implementation. Due to civil unrest travel restrictions were put in place in June 2009. Subsequent to that, regular supervision missions were not undertaken. Over the same period, continuous delays in the transfer of funds added a high degree of uncertainty and thereby complicated procurement and contract management. Nonetheless, over this period, the Bank kept in close contact with the project through phone calls and e-mails and provided expert advice regarding procurement and financial management matters and also monitored overall compliance of safeguard issues. The Bank provided projections for the budget shortfalls and facilitated the prioritization of procurement packages with the government. The task team encouraged the Government to carry out a revision of the procurement plans reflecting prioritizing of sub-projects to be completed with existing Bank funds and/or seek counterpart funds from the Government. A mid- term review was carried out in May 2010. 79. Project restructuring would have been a reasonable course to take but would have been very difficult because of the overall uncertainties caused by the delayed and intermittent payments. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 80. Delays in the transfer of funds (from the loan) and associated uncertainties impacted the pace of implementation of the civil works as contractors were hesitant to accelerate their activities under such uncertain conditions. Thus, it was not feasible for the project objectives to be fully completed within the original time frame. A project extension was not considered because of the difficulties involved in transferring funds from the loan to Iran. Supervision missions routinely identified the problems and sought solutions but the Bank was constrained in its ability to agree to remedial actions with the client due to the impacts of the sanctions environment. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory 81. A strong impetus to both preparation and implementation was provided by the commitment of the central and provincial governments, which not only provided counterpart funding and staffing but actively coordinated project preparation and implementation. A National Steering Committee (SC) was established to oversee project implementation and coordination between the various institutions. The SC is chaired by 19 the Vice Minister of the Ministry of Economic Affairs and Finance (MOEAF) and included the Vice Ministers of MOJA and the Ministry of Energy (MOE), the General Director for Water Resources from Management and Planning Organization (MPO) and General Director of Central Bank of Iran. The government committed funds prior to project closing (an MoU of US$50 million in Iranian Rials) in order to compensate for the delays in loan disbursements. The Government also committed the funds to continue with the implementation of ongoing packages for the execution of the project after project closing. There could have been more attention paid to land acquisition problems that were experienced by the implementing agency and the speeding up of designs/bidding documents. Another difficulty was the slow issuing of visas to international consultants and the problem of not paying consultants on time. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory 82. MRWC, MOJA and the CLOs commitment to the project was high during the project. The CLO, MOJA and MRWC managed to award and supervise the implementation of over 100 contracts and successfully coordinated logistical challenges during the construction works. Staff allocations to the CLO were adequate. MRWC managed the contractors and suppliers in difficult circumstances in that they were not paid on time. 83. The reasons for a moderately satisfactory rating are:  Frequent changes of project directors at the Central Liaison Office (CLO) and Project Implementation Unit (PIU) of MJAO that adversely affected the implementation progress. However, the project steering committee resolved several institutional issues, such as problems of coordination and communication between CLO, PIUs and consultants.  Inadequate planning for land acquisition and delays in payment of consultants’ invoices and delays in visa authorization for international consultants.  Slow progress with survey, design, preparation and approval of bidding documents in the first two years of the project. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 84. The rating of moderately satisfactory reflects the Government’s performance and the low PIU ratings above that, although not entirely to blame, attributed to delays in project implementation. The limitations on the Bank’s ability to increase implementation support impacted Government’s ability to improve performance. 20 6. Lessons Learned 85. Integrated Water Resources Management effectiveness: IWRM is an effective way to promote coordination between the many and diverse Government ministries and institutions involved in watershed management, irrigation and drainage, agriculture and forestry, and municipal water supply within a basin. The setting up of an effective IWRM organization requires dedicated, educated and experienced staff within the concerned Government ministries and institutions that needs to be motivated to cooperate and fulfill IWRM objectives. This requires substantial project support for capacity building and also requires a high level of government commitment and leadership. 86. Land acquisition: It is imperative to fully identify land acquisition requirements before commencement of project implementation and to complete land acquisition as soon as possible after the start of the project to avoid implementation delays. 87. Detailed civil works design readiness: It is imperative that irrigation and drainage projects have up-to-date detailed civil works designs with up-to-date project design cost estimates before loan effectiveness so that tendering can start as soon as loan effectiveness is declared to avoid cost increases for civil works. 88. M&E design, implementation and capacity building: A strong central M&E system within the lead implementation agency should be standard in large projects with multiple agencies involved so that problems are detected early and signaled to the Bank and to the Government. Capacity building through adequate training of both staff and senior management at the outset, so that the relevance and importance of M&E to project implementation is understood, is key to M&E success. 89. Contribution of financial and economic analysis: Financial and economic analysis, aside from the rate of return number itself, provides valuable information in the form of various indicators (yield, income) that can be tracked from appraisal through to project closing and that show how the main beneficiaries (farmers) take part and benefit from the project. Throughout the project, there are continuous changes in prices and costs relating to both agriculture and the project itself. It is therefore important, as done in this project, to undertake financial and economic analysis at various intervals throughout the duration of the project. The economic rate of return has shown in this project that the investment, despite all the implementation problems, has been a good investment for the Government and the people. 90. Early beneficiary participation in water management issues: Beneficiary participation, based on a preliminary agreement with the water users at the early stages of project's implementation, would have allowed faster implementation of the irrigation works especially those related to the tertiary networks. Direct involvement of the beneficiaries in planning and implementation of O&M systems, even at a later stage, creates a sense of ownership among farmers, which is instrumental in achieving sustainable water management. 21 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 91. The PIUs in MOJA and MRWC and the Central Liaison Office reviewed a draft copy of the ICR and provided comments which were incorporated into the final version of the ICR. The Government’s own ICR which documents the implementation experience and lessons learned is presented in Annex 7. (b) Cofinanciers 92. Not applicable. (c) Other partners and stakeholders 93. Not applicable. 22 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ Million equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (US$ millions) Appraisal (US$ millions) 1. Upper Watershed, Forestry and 13.2 7 53.% Rangeland Management 2. Irrigation and Drainage 128.7 73.74 57.3% Management 3. Integrated Water Resources 4.9 0.26 5.3% Management 4. Environmental Management 7.6 7.74 102.5% 5. Project Implementation and 3.9 12.79 327% Institutional Support Total Baseline Cost 158.3 101.53 64.1% Physical Contingencies 14 0 0 Price Contingencies 25.9 0 0 Total Project Costs 198.3 101.53 51.2% Front-end fee PPF 0.6 0 Funding of Project Preparation 1.4 0 0 Advance Total Financing Required 200.3 101.53 51.2% (b) Financing Appraisal Actual/Latest Type of Co- Percentage of Source of Funds Estimate Estimate financing Appraisal (US$ millions) (US$ millions) Borrower 80.3 39.97 49.8% Local Communities 0 0 0 International Bank for Reconstruction 120.3 61.57 51.3% and Development Cancelled amount: US$ 58.43 million 23 Annex 2. Outputs by Component Component/Output Planned Status at Project Closing Component 1: Upper Watershed, Forestry and Rangeland Management 1. Share of forestry areas managed 100% 37% by functional forestry cooperatives or similar entities 2. Improved watershed 51,500 ha 20,000 ha management area Component 2: Irrigation and Drainage Management 1. Modernized irrigation and 52,000 ha 20,000 ha drainage systems in coverage areas 2. Share of irrigated systems 100% 70% managed by operational WUAs below primary canals 3. Cost recovery of O&M 100% 70% Component 3: Integrated Water Resources Management 1. Established and Functional BWC 1 Established and Functioning 2. Implementation of BWF by US$ 3 million Not implemented community Groups disbursed 3.Improved water quality downstream 5 Greater than 5 of the Babol River (DO/mg/l) Component 4: Environmental Management 1. Improved hydrological and 10 The six original stations were water quality monitoring Stations improved and four new stations added Component 5: Project Implementation and Coordination Support 1. Enhanced capacity of CLO and 25 additional 50 additional technical staff. PIUs Technical staff 24 Cost US$ mil. Project Outcome Contribution PDOs Components Weight Over to PDO Appraisal Actual Rating Value Actual Value Reducing soil erosion and sediments yields flowing into the 1. Upper MU 3 7% 0.2 Watershed, Alborz Dam to increase life of Forestry and 13.2 7.00 Rangeland the dam through Management improved upper watershed management. Sustainably increasing agricultural productivity U 2 73% 1.46 through the 2. Irrigation and improved Drainage 128.7 73.74 irrigation and Management drainage system and participatory management mechanism 3. Integrated MU 3 0.3% 0.9 Water Resources 4.9 0.26 Management Protecting the water environment downstream of the Babol River MS 4 8% 0.32 and other water 4. Environmental bodies through Management 7.6 7.74 improved hydrological /water quality monitoring reservoir operation. 5. Project Implementation and Institutional 3.9 12.79 MS 4 12.5% 0.5 Support Total Baseline Cost 158.3 101.53 Note 1: Satisfactory (S)=5; Moderately Satisfactory (MS)=4; Moderately Unsatisfactory (MU)=3; Unsatisfactory (U)=2. Completed works and services 1. Preparing Master Plan for Upper Watershed Resource Management; 2. Assist in establishing Rangeland and Rural Women Cooperatives; 3. Creating Basin Coordination Council for identification and introduction of Sub- projects which will be financed by BWF; 4. Grass Planting, Fencing and Seedling of Rangeland, Maintenance of Forest Roads, Structural Soil Conservation Measure, Rehabilitation of degraded forests, Construction of access road, Improvement of Eco Tourism Places, Rangeland protection measures, Maintenance and Completion of Access on Forest Road, Land Slide stabilizing and construction of retaining wall; 25 5. Establishing 19 Water User Associations (WUAs); 6. Preparing agreement on Irrigation Management Transfer (IMT) to engage WUAs to implement O&M Irrigation and Drainage networks; 7. Recruiting 12 women agricultural extension officers; 8. Land consolidation (1068 hectares); 9. Rehabilitation and improvement of water courses (300 km); 10. Dredging of 11 abbandans (228 hectares); 11. Canal lining in Qaemshahr, Babol, Jouybar (45 km); 12. Construction of two pumping stations services in abbandans; 13. Construction of lateral canals in Talar right bank; 14. Canal lining (45 km); 15. Establishing BWSC; 16. Establishing MIS/GIS center; 17. Monitoring and rehabilitation of forest and wildlife; 18. Monitoring of water quality; 19. Implementing Integrated Pest Management Plan; 20. Creating Panel of Expert (POE) for dam safety; 21. Implementing resettlement action plans; 22. Construction of Ganj afrooz diversion dam and its main canal (3/7 Km) 23. Construction of second phase of main canal (8/9 km); 24. Construction of third phase of main canal (6 km); 25. Construction of Raees kola diversion dam & Raees kola canal (6/895 km) and Halidasht canals (1/35 km); 26. Construction of Halidasht pumping station services and its canal (4/3 km); 27. Upper watershed activities (15000 m3 ); 28. Maintenance and completion of forest access roads (50 km); 29. Rehabilitation of forest roads (13 km); 30. Rehabilitation of rangeland in upper watershed (240 ha); and 31. Rehabilitation of degraded forests (200 ha); The project progress by categories: 1. The project included the four following categories: Civil works 2. The estimated cost for this category in the Project Appraisal Document is US$82.49 million. Actual disbursement plans show that about US$7.59 million in MOJA and US$34.18 million in MRWC was disbursed. Also, US$9.36 million in MOJA and US$14.84 million in MRWC have been disbursed from the Government of Iran fund. Goods 3. The estimated cost for this category in the Project Appraisal Document is US$ 4.367 million. The actual disbursement plan shows that about US$ 0.74 million in MOJA and US$ 0.72 million in MRWC has been disbursed. Also, US$ 0.93 million in 26 MOJA and US$ 0.16 million in MRWC has been disbursed from the Government of Iran fund. All of the above mentioned costs have been disbursed under the actual contracts. Services 4. The estimated cost for services in the Project Appraisal Document is US$ 14.71 million. Actual disbursement plans show that about US$ 11.38 million in MOJA and US$ 5.78 million in MRWC was disbursed. Also, US$ 7.75 million in MOJA and US$ 1.55 million in MRWC was disbursed from the Government of Iran fund. Training 5. Capacity building is an important component in AILWMP for two main reasons: a) Capacity building supports the implementation of the project, which in several aspects is innovative in nature. This requires new skills, new ways of working and new institutional and technical arrangements. Under the Alborz project several new organizations are developed: the Basin Soil and Water Management Committee, Basin Water Fund, WUAs and Watershed Cooperatives. Capacity building supports the introduction of these new approaches and the development of the new organizations; and b) A systematic and well-structured capacity building effort serves to document the different methodologies and plans which are prepared and implemented in AILWMP. It also helps to introduce lessons learned from the Alborz Land and Water Management Project in the rest of the country. 6. In this regard, training budget has been incorporated in the consulting services contracts; in addition to the estimated budget of training course, workshop and study tours i.e. approximately US$2.5 million. 7. During of project implementation, about 2230 person-day training courses were held by international consultancies for farmers, orchardists, specialists and managers. 27 Annex 3. Economic and Financial Analysis 1. An economic and financial analysis was undertaken of the ILWMP project. Although the project was to be implemented and completed over a 7 year period (2006- 2012), the project was not complete at the time of the project closing date of October 31, 2012. Civil works and other project activities not completed at the close of the project in 2012 will be funded and completed by the GOI over the 2013 to 2015 period with a cost estimate of US$120 million. The economic and financial analysis undertaken for the project takes into consideration that the project will be completed over the 2006 to 2015 year period and includes all the project costs during this period as well as the benefits that will accrue from the completed project in 2015. It is not feasible to estimate the rate of return for the 2006 to 2012 period – that is the period with World Bank involvement. This is because only a portion of the irrigation system was rehabilitated and developed at project close. The incremental benefits accruing to the project are not at a sufficiently high level relative to the project costs at project close to provide a positive rate of return from the economic and financial analysis. Methodology and main assumptions 2. The methodology is a standard cost-benefit analysis relating project costs to incremental project benefits to estimate an internal rate of return and closely follows the methodology undertaken at appraisal and at the mid-term review. The project implementation period is 2006 to 2015 and the analysis is undertaken over a thirty year time span. The prevailing exchange rate at December, 2012 of US$1 = 12,181 Rials was used. All costs and benefits for the analysis are expressed in constant 2012 values. 3. The financial and economic analysis focuses on the incremental benefits from crop production that arise from project irrigation and drainage improvements and project support to WUAs and agricultural support services including pest management plans. Other benefits, namely the increase in urban water supply in the improvement area, the reduced pumping from the aquifers, the reduction in soil loss in the Upper Watershed, the effects of reduced siltation in the reservoir, the improved stability of natural stands and the enhanced ecosystem are difficult to quantify in physical and economic terms and hence are excluded from the cost-benefit analysis. Nevertheless, these benefits should be considered, in addition to the calculated economic return of the project, as substantial benefits of the project. Project costs and assumptions 4. The analysis includes total yearly project costs from 2006 to the assumed completion date of 2015. Total project costs are included for all the project components as all components directly or indirectly contribute to increased agriculture productivity. However, the irrigation and drainage management component alone, the main contributor to increased agricultural productivity, comprises about 75% to 80% of total project costs. The cost of the Alborz dam is not included in the analysis as it was financed by GOI and is considered as sunk costs. The yearly project costs used in the analysis are presented in Table 1. 28 5. To complete the project, it is estimated by the GOI that the costs will be US$120 million assumed to be spread out almost evenly over the 2013 to 2015 period (see Annex 7, Action Plan). For the analysis, all yearly project costs are increased by 20% to represent GOI and other funding not represented by the actual project costs. Table 1- Total Project Costs by Year (US$ Million) 2006 2007 2008 2009 2010 2011 2012 Total Project Costs 1/ 6.99 8.39 9.22 8.13 27.71 20.41 20.69 101.534 US$/Rial 2/ 9,171 9,282 9,450 9,871 10,260 10,622 12,181 CPI 3/ 111.9 131.2 164.7 186.9 205.9 284.4 306.5 1/ Supplied by CLO, includes actual World Bank disbursements plus GOI direct funding. 2/ Average US$/Rial exchange rate from CBI report (www.cbi.ir). 3/ Consumer Price Index, World Bank Development Indicators. 2005 = 100. 2012 estimated. 4/ In addition to complete the project additional investment over the three year period 2013 to 2015 Incremental crop benefits and assumptions 6. The incremental benefits are in the form of the increased crop net returns arising from: (i) higher crop yields, and (ii) higher cropping intensity from the project irrigation area covering about 52,750 ha, of which 36,178 ha are traditional irrigation areas (Improvement Area) and 16,573 ha are new irrigation areas (Development Area). The incremental benefits come mainly from more and timely use of irrigation water. The incremental crop yields and cropping intensity also result from: (i) support for the WUAs, and (ii) support from agricultural support services. 7. Crop budgets were constructed to identify the change in net income between the with-out project situation and the project situation for both financial prices and economic values. The budgets incorporate the with-out project yields and the with project yields and the change in inputs used under the two scenarios. 8. The crop budgets include water charges and a one-time farmer irrigation subscription fee to be paid over a ten year period. Costs for land leveling and crop loss due to land leveling are added to overall project costs as are O&M costs for the irrigation system. 9. With-out project and with project crop yield increases were mainly taken from the mid-term review report which represents the latest comprehensive study of with-out project and with-project crop yields. The yield increases used in the present analysis are modest and taken from the lower range of possible yields suggested. For example, rice yield increases are 10% on the traditional irrigated area and 15% for the developed area. With-project citrus production increases are 15% on the traditional irrigated area and 20% for the developed area. Rice plus citrus represents just over 70% of all cropped land. 29 10. The input and product farm gate financial prices used are from a 2012 CLO survey. The financial prices from CLO were decreased by 10% to better reflect farm gate prices. Conversion factors reflecting prevailing subsidies and other distortions in the domestic and foreign exchange markets were used, where warranted, to convert financial input and product prices into economic values. Conversion factors for rice (0.7), fertilizer (1.8), pesticides (1.8), and patty rice and wheat seed (1.6) were used based on GOI information. For other inputs and products, economic values were assumed to equal financial prices. 11. The analysis is run using with-out project (actual) cropping patterns and with project (anticipated) cropping patterns. With project cropping patterns are expected to shift to planting more rice and citrus and more high-value crops. The overall cropping intensity is expected to increase from 120% to 130%. Results 1. Benefits, Costs and Rate of Return 12. Table 2 presents the financial and economic rate of return for the base case of the present analysis for the ICR and compares the returns with those estimated at appraisal and at the mid-term review. For the ICR base case, the overall financial rate of return is 19.4% with a NPV of US$ 140 million. The overall economic rate of return is 16.6% with a NPV of US$ 93 million. Given this rate of return and NPV, the project is viable and thus was a worthwhile undertaking and a good investment for the people of Iran. The results, not surprisingly, are fairly close among the three analyses as they all used the same methodology and similar (updated) data sources. Total project costs also did not appreciably vary among the three analyses thus adding to similar results. Changes in increased product prices likely account for the more robust return of the ICR analysis versus the mid-term review analysis. Table 2 - Financial and Economic Rates of Return and NPVs Base Case Scenarios ICR Appraisal 2/ Mid-Term Review 3/ Financial Analysis FRR 19.4% 16.2% 17.5% NPV@10% 1/ US$ 140 mil. US$ 38 mil. US$ 73 mil. Economic Analysis ERR 16.6% 17.4% 13.9% NPV@10% 1/ US$ 93 mil. US$ 57.8 mil. US$ 30 mil. 1/ Present value of Net Incremental Benefits in 2012 constant US$. 2/ ILWMP Appraisal Document. 3/ Review Preparation Report, Volume 2, June, 2010, Central Liaison Office, AILWMP (Mott MacDonald). 2. Sensitivity and Switching Value Analysis 13. Changes in key output and product prices would have the most effect on the rates of return. The most dominant crops in terms of hectares planted are rice and citrus. One of the most dominant inputs is fertilizer especially when its price volatility is taken into 30 consideration. Output price declines in the remaining crops would have to be dramatic before there would be a significant decrease in the FRR or ERR and NPVs because of their smaller contribution to overall incremental benefits. 14. Table 3 presents the product and input price sensitivity and switching value analysis by varying the prices of rice, citrus, and fertilizer. It would take a decrease of between 20% to 25% in dominant crop prices (rice, citrus), all other prices constant, before the ERR would be negative. The FRR however, remains positive with a 25% decrease. The switching value, where the ERR is 10% with a NPV = 0, is thus somewhere between a decrease of 20% and 25% meaning that the project would not be economically viable at these prices. 15. The ERR decreases by only 0.8% from a doubling of fertilizer prices. A simultaneous decrease in dominant crop prices by 15% and a doubling of fertilizer prices decreases the ERR from 16.6% to 10.6% leaving the project viable. Thus, the results are not overly sensitive to the above changes in prices. While the above decreases in rice and citrus prices and the doubling of fertilizer could come about simultaneously, it would only be for a short period – the sensitivity analysis assumes that the changes in prices would be over the 30 year analysis period. Table 3 - Product and Input Price Sensitivity and Switching Value Analysis _____________________________________________________________________________ % Change Financial Returns Economic Returns in Price ______________________________ ____________________________ FRR % NPV@ 10% ERR % NPV@ 10% (US$ mil.) (US$ mil.) _______________________________________________________________________ Base Case 19.4% 140.0 16.6% 93.0 1. Decease in Product Prices a/ 1a. 10% 17.9% 114 15.0% 69 1b. 15% 17.0% 101 12.1% 1c. 20% 16.2% 88 10.7% 9 1d. 25% 15.4% 75 <10.0% Neg. 2. Increase in Fertilizer Prices 2a. 50% 19.0% 130 15.3% 74 2b. 100% 18.6% 126 13.4% 46 3. Simultaneous Change in Product and Fertilizer Prices 1b and 2a 16.8% 96 10.6% 8 ________________________________________________________________________ a/ Products include rice and citrus which represent just over 70% of all cropped land. 16. The with project yield assumption for the analysis were modest and set at the lower bound of the estimate. When with project yields are increased to mid-range yield 31 estimates, the overall financial rate of return is 22.3% with a NPV of US$189 million and the overall economic rate of return is 18.8% with a NPV of US$128 million. Beneficiaries Incomes and Capacity to Pay 17. Incremental net income from the project in both the traditional and new irrigation areas is sufficiently robust to support the full recovery of O&M costs, water subscription fees while substantially increasing net incomes of the beneficiaries. For example, after covering the above costs, in traditional areas, net incomes from rice increased by 15% and incomes from citrus increased by more than 10%. In the Development area, net incomes from rice increased by 20% and incomes from citrus increased by 16%. These figures are arrived at with very modest crop yield increments and modest product prices and would represent a lower bound estimate. When mid-range with project yields are used in the analysis, in traditional areas, net incomes from rice increased by just under 20% and incomes from citrus increased by more than 15%. In the Development area, net incomes from rice increased by more than 25% and incomes from citrus increased by about 22%. 32 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Sr. Financial Management Nezam Motabar MNAOS Specialist Magalie Pradel Language Program Assistant MNSSD Allan Rotman Lead Procurement Specialist AFTPW Helen Z. Shahriari Sr. Social Scientist AFTCS Sector Manager, Rural Shobha Shetty SASDL Development Satoru Ueda Lead Water Resources Specialist AFTN3 TTL Supervision/ICR Abdulhamid Azad Sr. Irrigation Engineer MNSWA TTL Maya Boulos Boulos Financial Specialist MENA Robert Bou Jaoude Program Coordinator SACPK Hyacinth D. Brown Division Manager CTRLA Sepehr Fotovat Ahmadi Senior Procurement Specialist MNAPC Niels B. Holm-Nielsen Senior Disaster Risk Management LCSDU Knut Opsal Sr. Social Scientist EASER Magalie Pradel Language Program Assistant MNSSD Zakia Chummun Language Program Assistant MNSSD Dilip Kumar Prusty Chinari Finance Analyst CTRLN Kanta K. Rigaud Lead Environment Specialist CPF Klas Sander Natural Resources Economist CPF Helen Z. Shahriari Sr. Social Scientist AFTCS Satoru Ueda Lead Water Resources Specialist AFTN3 TTL Velayutham Vijayaverl Senior Procurement Specialist MNAPC Nejdet N. Al-Salihi Consultant MNSSD Ehsan Mahmoudkalayeh Consultant MENA Mei Xie Sr. Water Resources Specialist WBICC (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ Thousands (including No. of staff weeks travel and consultant costs) Lending FY01 11.18 FY02 32.21 FY03 228.72 FY04 466.64 33 FY05 254.73 FY06 74.19 FY07 0.00 FY08 0.00 Total: 1067.67 Supervision/ICR FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 13.12 FY06 267.84 FY07 193.35 FY08 181.37 Total: 655.68 34 Annex 5. Beneficiary Survey Results Not Applicable. 35 Annex 6. Stakeholder Workshop Report and Results Not Applicable. 36 Annex 7. Summary of Borrower's ICR and Comments 1. Introduction 1.1 Project Description 1. The Alborz Integrated Land and Water Management Project is the first of its kind in Iran to introduce an integrated river basin management approach and enable land and water resources to be managed in a sustainable manner. The Alborz Dam is constructed on the Babol River and is located just downstream of the confluence of the tributaries Azar, Karsang and Esklim. The main purpose of the Alborz Dam is to provide a reliable supply of water for irrigation of the agricultural plains between the Alborz Mountains and the Caspian Sea in Mazandaran Province. The construction of the dam commenced in 1999 with funding from the GOI. While the Alborz Dam is exclusively funded and constructed by the GOI, the GOI has received a loan in amount of 120 million US$ from the World Bank to support the construction of an irrigation and drainage network to be irrigated by the dam in Mazandaran. The GOI agreed to integrate this irrigation and drainage network into a comprehensive project introducing integrated watershed planning management in Iran. The project initially was to be implemented in seven years (June 2005 – October 2012). 1.2 Project Development objectives 2. Development objectives of the project are to demonstrate the benefits of Integrated Water Resource Management at the river basin level by: (a) sustainably increasing agricultural productivity through the improved irrigation and drainage system and participatory management mechanism; (b) reducing soil erosion and sediment yields into the Alborz Dam on the Babol River through improved upper watershed management; and (c) protecting the water environment downstream of the Babol River through improved water quality monitoring, reservoir operation and pest management in the project area. 1.3 Project Description: 3. The detail description and components of the project are as follow: 1.3.1 Upper Watershed, Forestry and Rangeland Management (Base Cost- S$13.2 million): 4. According to the loan agreement and the project documents the main objective of the Component was to reduce soil erosion and sediment yields in the reservoir. Erosion was to be checked by a combination of vegetative measures (forest and rangeland management, stand regeneration, rotational grazing etc.) and engineering structures such as gabions, check dams and other retention structures, accompanied by training and capacity-building measures. 37 5. A Master Plan was produced by the Upper Watershed Resources Management Services contract. The Master Plan provided the strategies and approaches to implement a number of development activities in accordance with the objectives of the UWRMS component. According to the implementation of Master Plan, a consultant for preparation details of watershed management activities was selected based on the TOR which was approved by World Bank in August 2010. 6. Grass planting, fencing and seedling of rangeland, maintenance of forest roads, structural soil conservation measurements, rehabilitation of degraded forests, construction of access road, improvement of eco-tourism places, rangeland protection measures, maintenance and completion of access on forest roads, land slide stabilizing and construction of retaining walls were the most important activates undertaken by the various contractors for reducing soil erosion and sediment yields. 7. The latest status of the Component shows that Watershed Management Plan was implemented in 20000 hectares and 37% of forestry area was managed by operational forestry cooperatives or similar entities. Total physical progress of this component is estimated at 80 percent and about USD $7 million has been disbursed. 1.3.2 Irrigation and Drainage Management (Base Cost- US$128.73 million): 8. The objective of the project's irrigation and drainage management component is to increase agricultural production and incomes in the areas of intervention by (a) rehabilitating and expanding irrigation and drainage systems to improve irrigation water use efficiency and productivity; (b) instituting participatory irrigation management (PIM) and sustainable operation and maintenance (O&M) through relevant institutional developments and training; and (c) implementing irrigated agriculture extension and improvement programs. a) Irrigation/ Drainage System Rehabilitation and Development: 9. Land acquisition, construction of traditional irrigation and drainage systems on the Talat River, construction of Raees Kola and Ganj Afrouz diversion dams and canals and drains, construction of Halidasht pumping station, dredging of abbandans, rehabilitation and improvement of water resources and canal lining were the most important activities implemented in order to improve irrigation water use efficiency and productivity. b) Institutional Development for Participatory Irrigation Management (PIM): 10. The Participatory Agricultural Development Plan aims at improving agriculture practices and intensifying agricultural production and crop yields through the Participatory Irrigation Management (PIM) system. In accordance with latest modifications in hydro-boundaries of the project, 19 WUAs have been established. This compares to 10 as anticipated in PAD. Of the 19 established, 6 WUAs are located in the development area and 13 WUAs are located in improvement area. An Irrigation Management Transfer (IMT) agreement for a further 5 WUAs has been signed. The 38 concept of IMT has already been finalized and approved and signed by MRWC, MJAO, BWSC and WUAs. BWSC is responsible for oversight supervision, monitoring and evaluation and dispute resolution regarding IMT. The IMT agreement will provide the groundwork for the water distribution contract. This agreement was finalized along with a water distribution contract that included a cost recovery percentage that was agreed upon during a meeting between, MJAO, MRWC and both PIUs in February 2012. c) Agricultural Extension service Support: 11. A series of training courses were conducted on agricultural extension (PRA and PTD). In order to develop rural women activities (it was mentioned in PAD), 12 women extension facilitators were recruited starting June 2010. After a 28 day capacity building and empowerment training program, they conducted rural women extension facilitators programs in 5 pilot villages where the on-farm development plan of participatory technology was implemented. One of the main results and positive effects of Women Extension Facilitators activities in Jihad Agricultural Centers was raising their self- confidence and self-esteem and also identifying disseminators, assistants and local women leaders in villages. Other achievements of the program were: - Conducting initial studies and better perceiving current status of Women Extension Facilitators and also collecting basic data to enhance their income and livelihood; - Wide and continuous communication with local leaders to prepare them mentally and strengthen the spirit of partnership among them; - Selecting pilot villages to implement Rural Women Extension Facilitators Development Plan; - Holding meetings in villages for need assessment and finding issues as well as prioritizing their challenges; - Conducting extension training courses; - Cooperation with township extension office and related Jihad Agriculture Centers to hold F.F.S training programs and also plan of acceleration of transferring findings especially on various productions of the region; - Collaboration on procedures of conducting PTD programs in the pilot villages; - Preparing extension training programs to hold them in the villages where located in the project area; - Providing various training notifications, brochure and publications for the promotion of rural women’s scientific knowledge. 12. The estimated total physical progress of the Irrigation and Drainage Component is 55 percent and US$73.74 million has been disbursed. 1.3.3 Integrated Water Resources Management (Base Cost- US$4.9 million): 13. The objective of this component was to facilitate coordination and planning across the entire basin and further develop the tools that all the organizations require to achieve a higher level of integrated basin planning and management. In particular, the needs are: (a) enhanced partnership among all stakeholders; (b) sound knowledge of the basin's resources (data /information, systems, and models) for informed decision-making 39 and optimized water distribution; and (c) enhanced community-driven activities for water and natural resources management in the basin. 14. To achieve the objectives of this component, a Basin Water and Soil Committee (BWSC) was set up under the decree of the Governor of Mazandaran Province on September 2006. The main purpose of establishment of a BWSC was to coordinate the activities of executing agencies and stakeholders, including reviewing current and emerging issues of land and water resources management; proposing policies, strategies and action plans; monitoring the state of water and other natural resources; disseminating information to executing agencies and stakeholders; and supporting community - driven pilot activities for land and water conservation through the creation of a BWF. The creation of the BWF was the other responsibility of BWSC along with the preparation of the manual for operationalization of the BWF and legalization bill. The Bank No- objection on the manual for implementing BWF was not issued, and so, the project couldn’t disburse the estimated amount (USD$ 2.5 million) of this activity. 15. The other achievements of this component were: a) preparing preliminary water allocation levels for WUAs, b) preparing the operational model of the reservoir, and c) a study on the water price of different sources for WUAs. Total physical progress of this component is 75 percent and US$$0.26 million has been disbursed. 1.3.4 Environmental Management (Base Cost- US$7.59 million): 16. The Environmental Management Component was structured based on World Bank Safeguards policies in order to ensure the sustainability of positive environmental impacts and also mitigation of negative impacts of the Alborz Dam and irrigation and drainage network development project which encompass the following: 1. A reliable irrigation water supply for increased agricultural production; 2. Impacts on the flow regime of the Babol River; 3. Impacts on soil, groundwater and surface water quality from intensified irrigated agricultural production; 4. Forest and rangeland management improvement in the upper watershed; and 5. Socio-economic impacts, including resettlement and land acquisition. 17. Although, The AILWMP was classified as a category A project under OP 4.01, an Environmental Assessment (EA) and an Environmental and Social Management Plan (ESMP) that describes measures to mitigate negative project impacts and environmental monitoring arrangements were required. As part of the preparation of the AILWMP, the GOI decided to conduct environmental studies with an Environmental Impact Assessment (EIA) of the Alborz Dam, including the irrigation and drainage network. The EIA was prepared in 1997 by Mahab Ghods Consulting Engineers of Iran and approved by the Department of Environment (DOE) in 2003. In 2004, a complement survey of the EIA with a Supplementary Environmental and Social Assessment (ESA) was presented. The supplementary ESA was also consistent with the recommendations of the Country Water Resources Management Strategy (CWRAS) prepared by the World Bank. 40 18. The ESMP constitutes one of the five components of the AILWMP and includes a detailed list of mitigation activities. The AILWMP triggers seven World Bank environmental and social safeguard policies, based on these safeguards eight subcomponents were structured. Total physical progress of the Environmental Management Component is 85 percent and US$ 7.74 million has been disbursed. 19. The detailed description of sub-components and achievements are presented in table the table below: DESCRIPTION OF ENVIRONMENTAL MANAGEMENT COMPONENT Sub-Component Description Achievement The upper-watershed component of the AILWMP entails forest Preparing Master Plan and Forest and Rangeland management and conservation activities where potential impacts on Monitoring Plan are two important achievement of this Forests and Rangeland the environment have been identified. As a response to WB safeguard component. Monitoring of mitigation measures resulting Management policy on forests (OP 4.36) the ESMP suggested a number of from forest management activities is ongoing. This (OP 4.36) mitigation measures, mainly related to monitoring of impacts and monitoring is about the monitoring and evaluation of capacity building. outcomes and impacts of rehabilitationforest roads, soil erosion, and forest cooperatives activities. In response to the World Bank safeguard policy on Environmental Water Quality Monitoring Plan was prepared in response Assessment (O.P.4.01), a water quality monitoring plan is required at to WB safeguard Policy. This plan is implementing by AILWMP. Water quality monitoring was undertaken by several related organization at Babol River and four selected Ab- Water Quality organizations, and project assists these organizations to improve inter- bandans. In order to improving capacity of local Monitoring agency cooperation and share monitoring results. Within this task all specialists, several training courses were held by (O.P.4.01) collected data will be fed into a common database and necessary International Consultancies. equipment and trainings will be secured to ensure proper completion Laboratory Equipment were procured for using new of the activity. techniques of monitoring. The Babol River is one of nine major rivers in Iran draining into the River Ecology Monitoring plan including the plans for Caspian Sea. Thus river ecology monitoring and mitigation activities monitoring Bird, Fish and Plant Species at Babol River Ecological studies in are included in The ESMP as response to the WB Safeguard policies and 12 sensitive ab-bandans was prepared by international rivers and ab-bandans on Projects of International Waterways (OP 7.50 & OP 4.01).Also, the consultancy and is ongoing by related local organizations. including migratory Ab-bandans have been identified as important resting areas for a Capacity building of these organizations is doing while fish and birds number of bird species, therefore monitoring bird species and impacts the plan is implementing. (OP 7.50& OP 4.01). of the AILWMP on the ecology of the Ab-bandans has been included as part of the ESMP. The establishment of a Basin Water Fund (BWF) is proposed as part Environmental Guidelines Manual for Submission and of component 3 of the AILWMP to provide opportunities for Selection of Sub-Projects in Compliance with Safeguard Environmental stakeholders and community groups to undertake water and natural Policies was prepared. Assessment Screening resource management projects. This Basin Water Fund will be of Subprojects managed by the Basin Water Council (BWC). In compliance with the Financed by the Basin Environmental Assessment safeguard policy (OP.4.01), the ESMP has Water Fund recommended that the screening procedure and selection criteria of (OP.4.01) projects submitted to the BWC comprise environmental considerations. In compliance with the World Bank Safeguard policy on Pest Upgrading Pest Management Plan was completed and Management (OP 4.09) and the recent policy change in Iran with Pilot studies were conducted in different villages. Farmer respect to pest management that requires efforts to: (i) reduce chemical Field School (FFS) for citrus crop has been successfully control; (ii) expand non- chemical control; (iii) promote Integrated completed. And Integrated Pest Management (IPM) is Pest Management Pest Management: and (iv) phase out hazardous pesticides, a Pest under on going by related organization. (OP.4.09) Management Plan (PMP) was developed as part of ESMP. The baseline and impact assessment sections in the Environmental and Social Assessment Report clearly reveal a need to reduce the use of pesticides and agrochemicals to avoid additional negative impacts from the expansion of irrigated agriculture as foreseen in AILWMP. In compliance with the World Bank safeguard policy (OP 4.37) a set Majority ranges of study have been completed and related of recommendations has been included in the ESMP to ensure reports have been prepared including: 1) reservoir slope environmental and social viability of the Alborz dam. stability analysis 2) seismic studies 3) Alborz quality construction review 4) safety survey for three dams 5) Dam Safety hydrometric data collection for PMP and PMF 5) PMP (OP4.37) evaluation 6) PMF evaluation 7) model for dam break analyses and 8) dam break analysis incorporated in the EPAP. 41 DESCRIPTION OF ENVIRONMENTAL MANAGEMENT COMPONENT Sub-Component Description Achievement Land acquisition and resettlement issues under the AILWMP are Resettlement activities in Dam area and Main Canals have Involuntary divided into three resettlement mechanisms based on the foreseen been completed and Resettlement Action Plan has been Resettlement activities and stakeholders impacted. These have been developed prepared by International Consultancy. (OP 4.12) based on the World Bank Safeguard policy on Involuntary Resettlement (OP 4.12). In line with the WB safeguard policy (O.P.4.11) all precautions were Initial rapid survey and mapping of physical cultural Protection of Physical taken to avoid any impacts and destruction of cultural heritage and property in the dam area and properly excavations has Cultural Property historical monuments and the Mazandaran Provincial Authorities been completed and some of these findings are on display (OP.4.11) provided written assurances that Shrines and cemeteries were avoided in Sari and Babol museums. with maximum consideration. 1.3.5 Project Implementation and coordination Support (Base cost- US$3.91 million): 20. This component provided support for project implementation and coordination at the national and basin level. The Component also provided institutional support for the Ministry of Jihad and Agriculture (MOJA) and the Mazandaran Regional Water Company (MRWC), including strategic sectoral and feasibility studies for future projects. The overall objectives of this component were: a) provide technical support for CLO and PIUs; b) provide training for all staff at CLO, PIUs, and all other parties of the project and; c) provide office building, furniture, and equipment. 2. Project cost and financing plan 21. Total project cost was estimated at about US$ 200 million, with US$120 million in foreign exchange. The proposed Bank loan of US$120 million financed about 60 percent of the project cost, and would meet nearly all the foreign exchange component requirements. The rest of the cost (US$ 80 million) was being financed by the borrower. The civil works portion amounted to about 68.74 percent of the cost. The actual project disbursement plan shows that 51.3 percent of the US$120 million has been disbursed. 34.8 percentages is related to the Civil Works portion. 3. The project categories: 22. The project included the four following categories: 3.1 Civil works 23. The estimated cost for this category in the Project Appraisal Document is US$82.49 million. Actual disbursement plans show that about US$7.59 million in MOJA and US$34.18 million in MRWC was disbursed. Also, US$9.36 million in MOJA and US$14.84 million in MRWC have been disbursed from the Government of Iran fund. 24. All of above mentioned costs were disbursed under the actual contracts which are mentioned in the tables below: 42 3.1.1 Upper Watershed, Forest and Rangeland Management 25. The latest status of civil works signed contracts in order to implement the Upper Watershed and Forest and Rangeland activities are described in the table below: Physical Financial Description Contract Package Number Progress(%) Progress(%) Grass Planting, Fencing and Seedling of Rangeland UWFM/W1 (Lot1) 100 100 Grass Planting, Fencing and Seedling of Rangeland UWFM/W1 (Lot2) 100 100 Maintenance of Water Sources and Structures UWFM/W2 (Lot1) 100 100 Maintenance of Water Sources and Structures UWFM/W2 (Lot2) 100 100 Maintenance of Forest Roads (10 km Karsangrud) UWFM/W5 (Lot1) 100 100 Maintenance of Forest Roads (20 km Karsangrud) UWFM/W5 (Lot2) 100 100 Maintenance of Forest Roads (4 km Babolrud) UWFM/W5 (Lot3) 100 100 Forest Roads Gates (3 Gates) UWFM/W7-AD1 100 100 Buildings for Integrated Natural Resources Management (for MNRD, Cooperatives and UWFM/W8 87 86 MDOE ) Structural Soil Conservation Measures (Esklim rood) UWFM/W9 (Lot 1) 100 Structural Soil Conservation Measures (Babolak) UWFM/W9 (Lot 2) 100 100 Land Slide stabilizing and construction of retaining wall in Lafourak-Darzanoun forest road UWFM/W10 100 98 and rehabilitation of the second 10 Km Structural soil conservation measures (Babolakroud) UWFM/W11/12 15 14 Structural soil conservation measures UWFM/W12/11 87 87 Rehabilitation of degraded forests in Karsang Roud Zone UWFM/W29 100 93 Rehabilitation of degraded forests UWFM/W30 95 94 Maintenance and Competition of Ghozak Roudbar Access on Forest Road UWFM/W31/44 55 55 Construction of 2.7 km of access road UWFM/W38 100 100 Construction of 6.9 km of Forest access road and Bridges (Karsangrud) UWFM/W40 71 71 Construction of 3 km of access road (Babolrud) UWFM/W41 95 100 Rehabilitation of forest road UWFM/W44 Rangeland protection measures (100 ha) UWFM/W45 100 97 3.1.2 Irrigation and Drainage Management Physical Financial Description Contract Package Number Progress(%) Progress(%) Babol Right Bank Traditional I&D System (B1) IDM/W101 40.69 48.95 Talar Left Bank Traditional I&D System (B2) IDM/W102 14.51 17.60 Talar Right Bank Traditional I&D System (B3) IDM/W103 9.49 10.18 Main Conveyance Canal III IDM/W201 100 100 Raeiskola System Weir, Canals and Drains IDM/W202 100 100 Halidasht Pumping Station Systems IDM/W203 100 100 Main New Canals and Drain System (C24,C25 & MD2) IDM/W204 22.77 20.82 Talar Right Bank New I&D Prim. & Sec. Systems IDM/W205 47.51 53.65 Talar Right Bank I&D Tertiary Systems (Upper and Lower) IDM/W301 38 49 Land Consolidation in Qaemshahr IDM/W402b (Lot 2) 100 100 Land Consolidation in Babol IDM/W402b (Lot 3) 100 95 Land Consolidation in Babolsar IDM/W402b (Lot 4) 100 100 Dredging of Abbandans including: Siahkola Mahaleh and Kapourchal IDM/W402b (Lot 6) 100 100 Dredging of Abbandans including: Ziarkola and Douk IDM/W402b (Lot 7) 100 100 Dredging of Abbandans including: Tanbala and Astarabad Mahaleh IDM/W402b (Lot 8) 100 100 Dredging of Abbandans including: Aznova and Khordsar IDM/W402b (Lot 9) 100 100 Dredging of Kaleh Bon Abbandan IDM/W402b (Lot 10) 100 100 Land Consolidation in Savadkouh (Dehkalan) IDM/W402b (Lot 11) 100 100 Construction of Central WUAs Office IDM/W404 100 100 Rehabilitation and Improvement of Water Recourses (Darikande Pumping Station) IDM/W406 (Lot 1) 100 100 Rehabilitation and Improvement of Water Recourses (Bagher Tange Dredging of Ab Bandan) IDM/W406 (Lot 2) 100 82 Rehabilitation and Improvement of Water Recourses (Kalleh Bast Rehabilitation of Canals) IDM/W406 (Lot 3) 100 69 Rehabilitation and Improvement of Water Recourses (Mouzi Galleh Dredging of Ab Bandan) IDM/W406 (Lot 4) 100 100 Office & Store Buildings for 5 Selected WUA Centers IDM/W501 26 67 Canal lining in 4 cities(Qaemshahr) IDM/W502 Lot 2 81 76 Canal lining in 4 cities(Joybar) IDM/W502 Lot 5 46 90 Canal lining in 4 cities(Babol) IDM/W502 Lot 6 41 75 43 Greenhouse including heating/cooling equipment for plant disease assessment IDM/W601 100 100 3.2. Goods 26. The estimated cost for this category in the Project Appraisal Document is US$4.367 million. The actual disbursement plan shows that about US$0.74 million in MOJA and US$0.72 million in MRWC has been disbursed. Also, US$0.93 million in MOJA and US$0.16 million in MRWC has been disbursed from the Government of Iran fund. All of the above mentioned costs have been disbursed under the actual contracts which are mentioned in the tables below. Financial Description Contract Package Number Agency Progress(%) Computers, Software, Printers (4) Computers (6), 2 B&W and 1 color Printer) UWFM/G1 MOJA 100 Calipers, Compass, Altimeters UWFM/G2 MOJA 100 Fire Control Equipment UWFM/G3 MOJA 100 Chain Saws (12) UWFM/G4 MOJA 100 4WD pickup (3) UWFM/G5 (Lot 1) MOJA 100 Sedans cars (4) UWFM/G5 (Lot 2) MOJA 100 Loader/Backhoe (1) UWFM/G6 MOJA 100 Backpack sprayer (15) UWFM/G7 (Lot 1) MOJA 100 Water tanks (2) UWFM/G7 (Lot 2) MOJA 100 Watching and wireless telecommunication towers (2) UWFM/G7 (Lot 3) MOJA 100 Laboratory Equipment for Agricultural Research Laboratories IDM/G5 MOJA 100 Equipment for research Training Centers (in 4 Packages) – Specifications are ready IDM/G7 MOJA 100 Field Equipment IDM/G8 MOJA 100 Audiovisual for extension centers (Video camera, Digital photo camera, Color TV) IDM/G17 (Lot 1) MOJA 100 Audiovisual for extension centers (Video projection, Screen, Visualizer) IDM/G17 (Lot 2) MOJA 100 Communication (computer, printer, fax etc.) for extension centers IDM/G18 MOJA 100 MIS/GIS Center HW and SW for BWSC-MOJA IWRM/G5 Lot1 MOJA 100 MIS/GIS Center HW and SW for BWSC-MRWC IWRM/G5 Lot2 MRWC 100 Laboratory Equipment (Base Parameter testers) EM/G6 (Lot 1) MRWC 100 Laboratory Equipment (Laboratory Ware) EM/G6 (Lot 2) MRWC 100 Laboratory Equipment (Advanced Equipment) EM/G6 (Lot 4) MRWC 100 Laboratory Equipment (Common Lab Equipment) EM/G6 (Lot 5) MRWC 100 Laboratory Equipment (Samplers) EM/G6 (Lot 6) MRWC 100 Computer hardware & accessories for Central Control Unit (for MDOE) EM/G8 MOJA 100 Laboratory Equipment (for MDOE) + Portable field measurement instrument (for MDOE) EM/G9 MOJA 100 Procurement of GPS EM/G10 MOJA 100 Equipment (Camera, Trap camera, binocular) EM/G11 MOJA 100 Vehicles for CLO (2 Station Wagons 4 WD) under PPF Financing PICS/G1 MOJA 100 Office Equipment for CLO (3 laptops) PICS/G2 (Lot 1) MOJA 100 Office Equipment for CLO (Computer, Printer, Laptop) PICS/G2 (Lot 2) MOJA 100 Vehicles for MOJA PIU (2 Station Wagons 4 WD) under PPF Financing PICS/G3 MOJA 100 Office Equipment for MOJA PIU and I&D Consultants (Computer Equipment) PICS/G4 (Lot 1) MOJA 100 Office Equipment for MOJA PIU and I&D Consultants (Audio Visual Equipment) PICS/G4 (Lot 2) MOJA 100 Office Equipment for MRWC (10 computers, 1 copier, 3 color printer, 2 black printer, 1 PICS/G6 (Lot 1) MRWC 100 digital handy cam and 4 scanners) Equipment for Training PICS/G6 (Lot 2) MRWC 100 Office Equipment for Rehabilitation of Committee/Meeting Rooms PICS/G6 (Lot 3) MRWC 100 Equipment like computers, printers, copiers, mobile phones etc PICS/G7 MRWC 100 GPS, Total Stations PICS/G8 MRWC 100 Equipping the PIU MOJA PICS/G9 MOJA 100 Reversible heating and cooling system for conference MGRWC rooms & MGRWC PIU PICS/G11 MRWC 100 office including installation costs Communication equipment for CLO PICS/G13 Lot1 MOJA 100 Office furniture for CLO PICS/G13 Lot2 MOJA 100 44 3.3. Services 27. The estimated cost for services in the Project Appraisal Document is US$14.71 million. Actual disbursement plans show that about US$11.38 million in MOJA and US$5.78 million in MRWC was disbursed. Also, US$7.75 million in MOJA and US$1.55 million in MRWC was disbursed from the Government of Iran fund. 28. All of the above mentioned costs were disbursed under the actual contracts which are presented below. Description Contract Package Number Consultancy Upper Watershed of Resources Management UWFM/CS1 DFS Deutsche Forestservice Gmbh Toseeh va ehyay manabee,payadari Consultant for Detail Design (Babol Roud and Babolak) UWFM/CS2-Lot 1 Tabieat va Manabe SNC-Lavalin&Hydrosult&Petro Peyman Irrigation and Drainage Management Consultancy IDM/CS1 Pars Women Extension Research Experts (12 experts) IDM/CS2 National Engineering Services Integrated Water Resources and Environment Management IWRM&EM/CS1 Pakistan(NESPAK) Iran Center for Management Studies Consultant for BWSC and BWF IWRM/CS2 (ICMS) Environmental Studies EM/CS2 Mahab Ghodss Mott Mac Donald Euro consult & Project Management Support Consultancy PICS/CS1 Yekom International Procurement Advisor 2 PICS/CS2 (Lot 1) Harbaksh Sethi International Procurement Advisor 1 PICS/CS2 (Lot 2) Harbaksh Sethi 3.4. Training 29. Capacity building is an important component in AILWMP for two main reasons: a) Capacity building supports the implementation of the project, which in several aspects is innovative in nature. This requires new skills, new ways of working and new institutional and technical arrangements. Under the Alborz project several new organizations are developed: the Basin Soil and Water Management Committee, Basin Water Fund, WUAs and Watershed Cooperatives. Capacity building supports the introduction of these new approaches and the development of the new organizations; and b) A systematic and well-structured capacity building effort serves to document the different methodologies and plans which are prepared and implemented in AILWMP. It also helps to introduce lessons learned from the Alborz Land and Water Management Project in the rest of the country. 30. In this regard, training budget has been incorporated in the consulting services contracts; in addition to the estimated budget of training course, workshop and study tours i.e. approximately US$2.5 million. 45 31. During of project implementation, about 2230 person-day training courses were held by international consultancies for farmers, orchardists, specialists and managers. Subject matters included forest rangeland management, WUAs, participatory management, environmental issues and water resources management, monitoring and evaluation and project management. In addition, an international study visit of Malaysia on water resources and environmental management was held by NESPAK on January 2010. 32. Based on the training need assessment of the project, a comprehensive training plan was prepared and US$0.63 million (US$0.40 million from the loan and US$0.23 Million from the Government of Iran fund) was disbursed for 1600 person - day training courses for specialists of MJAO, PIU, MRWC, PIU, MNRD, MDOE, MOJA, CLO, WUA’s members, farmers and orchardists. A Water User Association Study Visit to China was held in July 2009 for the MRWC group and in July 2010 for MOJA group. 4. Summary of Completed Work Preparing Master Plan for Upper Watershed Resource Management; Assist in establishing Rangeland and Rural Women Cooperatives; Creating Basin Coordination Council for identification and introduction of Sub- projects which will be financed by BWF; Grass Planting, Fencing and Seedling of Rangeland, Maintenance of Forest Roads, Structural Soil Conservation Measure, Rehabilitation of degraded forests, Construction of access road, Improvement of Eco Tourism Places, Rangeland protection measures, Maintenance and Completion of Access on Forest Road, Land Slide stabilizing and construction of retaining wall; Establishing 19 Water User Associations (WUAs); Preparing agreement on Irrigation Management Transfer (IMT) to engage WUAs to implement O&M Irrigation and Drainage networks; Recruiting 12 women agricultural extension officers; Land consolidation (1068 hectares); Rehabilitation and improvement of water courses (300 km); Dredging of 11 abbandans (228 hectares); Canal lining in Qaemshahr, Babol, Jouybar (45 km); Construction of two pumping stations services in abbandans; Construction of lateral canals in Talar right bank; Canal lining (45 km); Establishing BWSC; Establishing MIS/GIS center; Monitoring and rehabilitation of forest and wildlife; Monitoring of water quality; Implementing Integrated Pest Management Plan; Creating Panel of Expert (POE) for dam safety; Implementing resettlement action plans; Construction of Ganj afrooz diversion dam and its main canal (3/7 Km) Construction of second phase of main canal (8/9 km); Construction of third phase of main canal (6 km); 46 Construction of Raees kola diversion dam & Raees kola canal (6/895 km) and Halidasht canals (1/35 km); Construction of Halidasht pumping station services and its canal (4/3 km); Upper watershed activities (15000 m3); Maintenance and completion of forest access roads (50 km); Rehabiliationof forest roads (13 km); Rehabilitation of rangeland in upper watershed (240 ha); Rehabilitation of degraded forests (200 ha); 5. Performance indicators 33. The key outcome indicators of the project and current situation are as follows: (a) Increased agricultural productivity (US$/ha), 34. As against the appraisal with-out project estimates of gross revenue per ha of US$1,442 and US$1,523 respectively for traditional and development areas, the with project estimated gross revenue per ha has increased by 15% to 20% for the traditional area and over 25% for the development area over the with-out project estimates depending on the mix of crops a farmers chooses. (b) Reduced soil erosion and sediment yields flowing into the Alborz Dam (m3 /s) and other water bodies. 35. Based on the investigations undertaken within the scope of Upper Watershed Master Plan (UWMP) preparation, the sediment yields are 73% of the yields estimated at Appraisal. The estimated sediment yields presented in the PAD are 412,000 m3 /year for 51,700 ha and it was reduced to 298,700 m3 /year for 51,700 ha at the end of the project. (c) Improvement of river maintenance flow (m3 /s) and water quality on downstream portion of the Babol River during the peak irrigation period 36. The minimum flow in Babol River is estimated at 1.5 m3 /sec which is considered adequate in terms of environmental considerations. 37. The Intermediate Results Indicators for each project component are as follows: Upper Watershed Management Component (a) The area implementing watershed management plans (ha); 38. Watershed management plans implemented at 20,000 ha by the two existing forest cooperatives; (b) Share of forestry areas managed by operational forestry cooperatives or similar entities (%) 47 39. 37% of areas managed by operational forestry cooperatives. Irrigation and Drainage Management Component (a) Area covered by rehabilitated or new irrigation and drainage systems (ha); 40. At project end in 2015, there will be an estimated 36,178 ha of improved irrigation and drainage land rehabilitated and an estimated 16,573 ha of new developed irrigated and drainage land. At project close, there were 16,000 ha of improved land rehabilitated and 4,000 ha of new irrigation land developed. (b) The area benefiting from the improved irrigation and drainage system and managed by functioning WUAs (ha) and O&M costs recovery ration (%); 41. The actual share of area managed by WUAs is about 70%. Integrated Water Resources Management Component (a) A functioning Basin Water Council (BWC) that will take appropriate action for basin-wide management of water resources with stakeholder involvement; 42. Several meetings were held by BWC to discuss and provide guidance on all issues concerning policy and strategy for Basin Management, overseeing the BWF, WUAs functions and establishing a Basin database. (b) Amount of Basin Water Fund used in response to community groups for funding proposals 43. BWF was not activated. Environmental Management Component (a) The establishment of fully functional hydrological and water quality monitoring stations which provide data that can be used for effective WRM. 44. Twenty water quality monitoring stations, 12 discharge gauge stations, and 3 min. flow monitoring station have been installed. (b) Unified annual basin-wide water monitoring report and database 45. Both water quality and quantity monitoring are being carried out. The water quality samples are tested at the CSERI laboratory. Project Implementation Support Component Number of component operational staff and consultants 48 46. Twenty-three specialists have been employed by PIUs and CLO. 6. Lessons Learned 6-1. Achievements  Proper institutional coordination: The Alborz project was implemented by Project Implementation Units in MOJA and MRWC. PIU MOJA was responsible for on-farm, tertiary and quaternary irrigation, drainage and agricultural extension as well as forestry and rangeland management. MRWC PIU was responsible for the diversion weir and trunk irrigation networks from main to the secondary canal system. The Central liaison Office (CLO) was established as a focal point to ensure effective implementation and enhance coordination between the two PIUs and the World Bank. Creating these organizations had a great positive impact on project implementation.  Establishing BWSC for the sustainability of the project: The BWSC was created in order to enhance coordination between the MJAO, MRWC, MDOE and all other stakeholders including upper watershed foresters, herders, and downstream irrigation-farmers, and also to sustain the Project and its achievements.  Creating WUAs to share irrigation systems management between the stakeholders: The Alborz project supported decision-making on Integrated Water Resources Management at the lowest levels by including users through farm-level WUAs. In this regard, 19 WUAs were established in which 6 WUAs located in development area and 13 WUAs located in improvement area.  Considering Environmental issues: The Alborz project triggered seven World Bank Safeguard Policies and facilitated solutions to basin-level water allocation and water quality problems and mitigated the potential negative effects of the Alborz Dam and protected the water environment of the downstream portion of the Babol River and other water bodies.  Strengthening of the Procurement Unit: Procurement capacity of CLO was strengthened at the beginning of project implementation and it greatly facilitated project procurement implementation. National procurement specialists were able to successfully manage and coordinate procurement units in both PIUs. In light of above, several one/ day workshops as well as a five day workshop on Procurement and Financial Management Procedures was held by CLO procurement specialists. It was the first time in the history of the project that workshops were held fully relying on national capacities. 6-2 Challenges 49  Delay in effectiveness of the loan (6 months)  Weakness of Project International Consultancies: Multiple difficulties were created at the beginning of project implementation because of existing weaknesses with international consultancy arrangements. The Project Management Support Consultancy (PMSC) couldn’t play an effective role in creating effective coordination between organizations and other consultancies. Changing various International Team Leaders and weaknesses of Technical Specialists (such as Training and environment specialists) had negative effects on PMSC’s operational performance. Quality of services and deliverables of the consultant were repetitively and constantly criticized by CLO, PIUs as well as the World Bank due to frequent changes of team leaders and specialists. This issue was communicated to the consultant several times however no remedial actions were observed. Continued downward quality of services of the consultant in addition to persistence and critiques of project stakeholders, obliged Yekom Consulting Engineers to partially terminate its cooperation with the joint venture and the project.  Sanctions: About 2 years delay in transferring money and disbursing the loan were caused because of sanctions.  Delay in opening Special Bank Accounts  Time consumed in order to move special account from the commercial banks which were on the sanction list to commercial banks that were acceptable to the World Bank.  Lack of Coordination between the two PIUs: Implementing of integrated projects requires close coordination between various organizations. Lack of coordination between the two PIUs was one of the most important obstacles in project implementation.  Discrepancies between WB guidelines and local laws: Differences between WB guidelines and local laws have given rise to many questions asked by Financial Controller.  Delay in issue of PAR code: The PAR Code was a limitation for timely payment of contractors/consultants invoices, especially when Iranian holidays do not coincide with those in other parts of the world.  Delay in obtaining World Bank No-objection: Inadequate technical information prepared by international consultants was the main reason for delay in obtaining World Bank No-objection. 50  Lack of proper balance between disbursing amount from the loan and Government funding Changing various managers in PIU MOJA 6-3 Suggestions:  Emergency Fund: The borrower should foresee emergency funds for critical situations such as those experienced over the last 2 years of project implementation.  Problems of Transferring Money: The current problems for transferring money to the project demonstrate that the World Bank should find a safe and infallible way to transfer funds to the projects.  Establishing World Bank Office in Borrower Country: Establishment of a local WB office in Tehran would have beeen of great help in the project procurement process.  Preparing bidding documents before the effectiveness of the loan: To ensure the best progress rate in the project, the borrower should prepare the bidding documents for selection of consultants and contractors before the effectiveness of the loan. 7-1 Action Plan: 47. As AILWMP loan agreement has ended and payments through the World Bank loan no longer applicable, project executing agencies in both MRWC and Jihad-e- Agriculture intend to make payments through local funds. In this regard, the time schedule for performing activities by MRWC are as follows: Progress till now Date of Required Activities Budget (%) Completion (US$ Million) Network Rehabilitation System- Pakage W101- Babolrood Right Bank 48 % Mar 2014 1.05 Network Rehabilitation System- Package W102 20% Mar 2014 4.00 Network Rehabilitation System- Package W103- Talar right bank 16% Mar 2014 3.80 Mar Package W204 for MD2-C24 and C25 30% 8.40 2015 Mar Package W205 for a new system of Talarright bank 52% 3.80 2014 Total 21.05 48. Moreover, packages W206 for a new system of Siyahrood left bank have not been entered into bid due to a shortage of local and loan funds and it is anticipated that this package will be entered for bid in 2013 with US$ 45 million and be completed by Sept. 2014. The time schedule for MJAO activities are as follows: 51 Progress till Date of Required Activities Budget now (%) Completion (US$ Million) Packages W44 and W31 related to completion and rehabilitation of 12 km of 80 % May 2013 0.057 forest access road and 4.3 km of Ghozak-Roodbar road. Packages W301 related to construction tertiary drainage and the canal system- 40% September 2013 4.7 Talar right bank Packages W502- lot 5,2,6 related to the lining of irrigation canals for villages 74% May 2013 0.30 Ghaemshahr, Babol and Jooybar Consultant for detail Design (UWFMCS2 (lot1) 50% June 2013 0.15 Total 5.2 49. Moreover, packages W302, W303A, W303B, W304B related to the construction of secondary system at lower watershed lands which have been deleted from the project procurement plan due to lack of sufficient funds, will be entered into bid with a budget of US$52 million by MRWC for completing the construction of the main canals and will be finished within the next two years. 50. It should be noted that if the required budget will be provided on time by the government in agreements of future years, all the packages will be completed within the next three years. 52 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Not applicable. 53 Annex 9. List of Supporting Documents  Project Appraisal Document (Report Number 30233-IR). Alborz Integrated Land and Water Management Project (February 11, 2005).  Loan Agreement - Loan number 4782-IRN – June 27, 2005.  Supervision Missions’ Aide Memoires from 2003 to 2010.  Implementation Status Reports 1 to 14.  Mid Term Review Report, April/May 2010.  Review Preparation Report, Volumes 1, 2 & 3, June, 2010, Central Liaison Office, AILWMP (Mott MacDonald).  Summary of the PMSC Input, December, 2012, Mott MacDonald. 54 IRAN ALBORZ INTEGRATED LAND AND WATER MANAGEMENT PROJECT Alborz Dam core rock fill dam with 78 m in height, 838 m in crest length, 150 million Morning glory spillway m3 (mcm) in reservoir capacity (out of which 122 mcm for live storage). The purpose of This type of spillway is basically a giant cement funnel. Rather than the dam is irrigation (54,000 ha), drinking water supply, hydropower (10 MW), spilling over the dam, high waters spill into the funnel. environmental in-stream flow, and flood control Morning glory spillways are also known as bell-mouth spillways. Reiskola weir. Main irrigation conveyor canal – completed 18.6 km, capacity 24 m3/s - benefits 77,000 farmers 55 Halidasht irrigation pumping station. Completed in 2012. Total capacity 630 liters per second Pumps: centrifugal volute casing type; capacity each 210 liters per secod; head 52 meters 56 Watershed management Gabian wall for erosion control. Creation of protected area against grazing by sheep. Forest road rehabilitated. Small check dam for soil and water erosion control. 57 Watershed management component Contract number WFM/W5 (Lot3) Contract number UWFM/ Rehabilitated forest road. Protected area. Contract number UWFM/W2 (Lot2) Check dam for erosion control. Drinking water for sheep and goats (grazing allowed in this area).. 58 Water Users Associations 59 Tertiary canals under construction Contract number IDM/W502(Lot2) Contract number IDM/W502 (Lot6) Contract number IDM/W406 (Lot 1) Small reservoir. 60 Machinery / Water Users Association Contract number IDM/G14 Lot 2&4 Contract number IDM/G14 Lot 2&4 Machinery for operation and maintenance (2012). Machinery for operation and maintenance (2012). Water users association building (2011). Entrance water users association building (2011). 61 Water Users Associations 62 Sea PROJECT AREA BOUNDARY ISLAMIC REPUBLIC OF IRAN ALBORZ INTEGRATED LAND AND ia n ver Casp SUB PROJECT BOUNDARIES Ri WATER MANAGEMENT PROJECT S i ah NEW CANALS: BANK FINANCED MAIN CANALS Larim BANK FINANCED PRIMARY CANALS Mahdudehshahr GOVERNMENT FINANCED MAIN CANAL NEW DAMS/WEIRS: Babolsar BANK FINANCED DIVERSION WEIR Mian Dashe Rubber Weir GOVERNMENT FINANCED EXISTING WEIR GOVERNMENT FINANCED DIVERSION WEIR Bahnamir (UNDER CONSTRUCTION) GOVERNMENT FINANCED EXISTING STORAGE DAM V ICE ROAD GAS PIP ELINE SER GOVERNMENT FINANCED STORAGE DAM (UNDER CONSTRUCTION) River Joybar NEW DRAINS: T ala r BANK FINANCED MAIN DRAIN BANK FINANCED PRIMARY DRAINS BANK FINANCED SECONDARY DRAINS BANK FINANCED PIPELINE Kiakola GOVERNMENT FINANCED DIVERSION TUNNEL FUTURE RESERVOIR CANAL SYSTEMS (BANK FINANCED REHABILITATION) BANK FINANCED PUMP STATIONS Babol MONITORING WELLS GAUGING STATIONS i ver OTHER MONITORING POINTS h R EXISTING TRADITIONAL IRRIGATION AREAS Si a er Ba Riv NEW IRRIGATION AREAS bo lR sh iv e OFF STREAM STORAGE PONDS Pipeline Kho r Ghaemshar (BANK FINANCED REHABILITATION) Me BUILT-UP AREAS talo ASPHALT ROADS n River NON ASPHALT ROADS RAILROADS Ghaemshahr Shiadeh IRRIGATION AND DRAINAGE MANAGEMENT COMPONENT Dam DEVELOPMENT AREA SCHEMATIC Siahro Ganj-afrooz Pipeline ud Riv Diversion Weir Helidasht Toji R iver TLB3 TRB3 er Berenjestonak Dam er Talar River Riv Mian Dasht Weir SLB2 Shilga ad Saj BRB3 Reiskola Diversion Weir Marzl Kal Reiskola Klorl Kala Siah Darka BRB2 TRB2 B abo TLB2 Drazkola l Ri ve r Talar Riv SLB1 ISLAMIC TRB1 REP. OF IRAN Sonbol er Babol Rive Roud r M I D D L E L A N D TLB1 Ganj-afrooz BRB IRRIGATION AND Diversion Weir DRAINAGE SUB AREAS Babolak r Alborz Reservoir ive BRB1 Diversion Weir R MAJOR URBAN AREAS d Dam Site d ru 0 5 Saj o Reiskola Diversion Weir KILOMETERS Water AR Az ME AZERBAIJAN Transmission TURKEY N 50 55 60 UZBEKISTAN R. ar R Karsang R. Tunnel im v er IA i TURKMENISTAN l Caspian Aska Sea - MAZANDARAN - - - Sari PROVINCE Babol, Talas, and Siah TEHRAN Rivers Watershed IRAQ For detail, For detail, 35 U P P E R L A N D see Main see IBRD 33339 Map, right ISLAMIC AFGHANISTAN REPUBLIC OF IRAN 30 30 0 1 2 3 4 5 KUWAIT PAKISTAN KILOMETERS Persian BAHRAIN SEPTEMBER 2004 SAUDI Gulf IBRD 33254 ARABIA 25 This map was produced by the Map Design Unit of The World Bank. 25 QATAR The boundaries, colors, denominations and any other information Gulf of Oman shown on this map do not imply, on the part of The World Bank Arabian Group, any judgment on the legal status of any territory, or any 45 50 UNITED ARAB OMAN 60 Sea endorsement or acceptance of such boundaries. EMIRATES 52°30' 52°45' 53°00' 53°15' N ek ISLAMIC REPUBLIC OF IRAN Sea ian a R ALBORZ INTEGRATED LAND AND Casp iver ISLAMIC WATER MANAGEMENT PROJECT REP. OF IRAN 36°45' BABOL, TALAR, AND 36°45' SIAH RIVERS WATERSHED Siahr Babolsar ood River Tajan Feraidoonkenar r o od Astanehsar Neka Azizak T ala r R v er L a ks haro i Amir-Kola Da od rab Sari k ol a Siah Riv e r rood Roud Babol k o la Asbo od ikro Bar 36°30' 36°30' rood ro n ho K Ghaemshahr er Kola Ro u d ari Ri v Roud Siah K Ba b ol r ve i h R Rive r M e t a lon R i v e r o od Salardare r d Saja T oj i R i v er d u T ajo n Boz Ro Ri v e r River ood mr Nola ha Roshanab Riv Lac k River Tazeh Alborz Reservoir R oud er Dam Site 36°15' 36°15' drud Riv e r Shi Sajo rin r Riv e ro A za od rR Askalim iv e r R Kar s ive r Ka Babolak River ang slia n RIver R v er i r ive kR Ala River ral er Cha Riv r dba ou R sh 36°00' S he 36°00' 0 2 4 6 8 10 KILOMETERS 52°30' 52°45' AR ME AZERBAIJAN 50° 55° 60° UZBEKISTAN TURKEY N IA Caspian TURKMENISTAN Sea - MAZANDARAN - - - Sari PROVINCE Babol, Talar, and Siah Rivers Watershed TEHRAN 35° IRAQ For detail, For detail, see Main Map 35°45' 35°45' see IBRD 33254 ISLAMIC AFGHANISTAN PROJECT AREA BOUNDARY REPUBLIC OF BABOL, TALAR, AND SIAH RIVERS WATERSHED IRAN GOVERNMENT FINANCED STORAGE DAM 30° 30° (UNDER CONSTRUCTION) KUWAIT FUTURE RESERVOIR PAKISTAN RIVERS Persian BUILT-UP AREAS BAHRAIN This map was produced by the Map Design Unit of The World Bank. SAUDI MAIN ROADS SEPTEMBER 2004 Gulf The boundaries, colors, denominations and any other information IBRD 33339 shown on this map do not imply, on the part of The World Bank ARABIA 25° 25° QATAR Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Gulf of Oman Arabian UNITED ARAB Sea 53°00' 53°15' 45° 50° EMIRATES OMAN 60°