Document of The World Bank FOR OFFICIAL USE ONLY Report No: 77375-AF RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ON-FARM WATER MANAGEMENT (OFWM) PROJECT ARTF GRANT TO THE ISLAMIC REPUBLIC OF AFGHANISTAN April 2013 SASDA VPU This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS ARTF Afghanistan Reconstruction Trust Fund CBA Cost Benefit Analysis DO Development Objective EA Environmental Assessment EIRP Emergency Irrigation Rehabilitation Project DAIL Department of Agriculture, Irrigation and Livestock IAMWARM Irrigated Agriculture Modernization and Water-Bodies Restoration and Management Project IDS Irrigation Demonstration Site IP Implementation Progress IRDP Irrigation Restoration and Development Project ISCT Implementation Support Consultants Team ITB Invitation to Bid MAIL Ministry of Agriculture, Irrigation and Livestock MTR Mid-Term Review O&M Operations and Maintenance OFWMP On-Farm Water Management Project PAD Project Appraisal Document PCPL Precast Parabolic Lining PDO Project Development Objective PIP Project Implementation Plan PIU Project Implementation Unit PMIS Project Management Information System Regional Vice President: Isabel Guerrero Country Director: Robert Saum Sector Manager: Simeon Ehui Task Team Leader: Johannes Georges Pius Jansen 2 RESTRUCTURING DATA SHEET 1. Basic Information Project ID & Name P120398: On-Farm Water Management Project (OFWM) Country Afghanistan Task Team Leader Johannes Georges Pius Jansen Sector Manager/Director Simeon Ehui Country Director Robert Saum Original ARTF Approval Date 01/18/2011 Original Closing Date: 06/30/2014 Current Closing Date 06/30/2014 Proposed Closing Date [if applicable] EA Category B-Partial Assessment Revised EA Category B-Partial Assessment EA Completion Date 11/11/10 Revised EA Completion Date 2. Revised Financing Plan (US$ million) Source Original Revised BORR 0.00 0.00 COMM 0.00 0.00 ARTF 41.00 25.00 Total 41.00 25.00 3. Borrower Organization Department Location The Islamic Republic of Afghanistan Afghanistan 4. Implementing Agency Organization Department Location Irrigation Directorate, Ministry of Irrigation Directorate Afghanistan Agriculture, Irrigation and Livestock (MAIL) 5. Disbursement Estimates (US$ million) Actual amount disbursed as of 12/31/2012 US$ 6.10 million Fiscal Year Annual Cumulative 2012 0.00 4.00 2013 9.00 13.00 2014 12.00 25.00 Total 25.00 3 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured project trigger any new safeguard policies? If yes, please select from the N checklist below and update ISDS accordingly before submitting the package. Safeguard Policy Last Rating Proposed Environmental Assessment (OD 4.01) X X Natural Habitats (OP 4.04) Forestry (OP 4.36) Pest Management (OP 4.09) X X Physical Cultural Resources (OP 4.11) Indigenous Peoples (OD 4.20) Involuntary Resettlement (OP 4.12) Safety of Dams (OP 4.37) Projects in International Waters (OP 7.50) X X Projects in Disputed Areas (OP 7.60) 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The Project Development Objective (PDO) is to improve agricultural productivity in project areas by enhancing the efficiency of water used. 4 AFGHANISTAN ON-FARM WATER MANAGEMENT (OFWM) PROJECT Page Contents A. SUMMARY ................................................................................................................ 6 B. PROJECT STATUS.................................................................................................... 6 C. PROPOSED CHANGES ............................................................................................ 8 D. APPRAISAL SUMMARY ....................................................................................... 12 ANNEX 1 RESULTS FRAMEWORK AND MONITORING ........................................ 17 5 AFGHANISTAN: ON FARM WATER MANAGEMENT PROJECT RESTRUCTURING PAPER A. SUMMARY This restructuring paper seeks the approval of the Afghanistan Country Director and the Administrator of the Afghanistan Reconstruction Trust Fund to introduce the following proposed changes to the On-Farm Water Management Project. The overall implementation of the project has been delayed significantly resulting in extremely poor utilization of Grant funds. In order to improve the disbursement profile and to bring the project to a satisfactory closure by its current Grant closing date of June 30 2014, the Mid-Term Review Mission carried out in February 2013 has recommended restructuring of the project to scale down the activities with a cancellation of US$ 16 million from the original Grant amount of US$ 41 million. After consultation with the Recipient, it was decided that the $16 million would no longer be required for the Project as the activities originally envisaged under the Project would not be finalized before Closing Date. Accordingly, this proposed restructuring involves the scaling down of the size of the physical infrastructure investments to a level that can be reasonably expected to be completed by the Grant closing date. The revised target for command area serviced by on-farm infrastructure modernization would be 10,000 ha as opposed to the original target of 52,500 ha. In addition, as recommended by the MTR mission, the Grant Agreement would be modified to include the construction of five office buildings for the Ministry of Agriculture, Irrigation and Livestock (MAIL) to accommodate the Irrigation Directorate and on-farm water management staff at the five regional centers of Kabul, Herat, Mazar-e-Sharif, Baghlan and Jalalabad. B. PROJECT STATUS The On-Farm Water Management Project (OFWMP) is currently a problem project with both DO and IP rating of Moderately Unsatisfactory. Overall implementation of the project has been significantly delayed in the almost two years following the ARTF Management approval in January2011. The primary reason for this is the extraordinary delay in getting the Implementation Support Consultants Team on board. It took nearly a year to get these consultants mobilized and operational whereas they were supposed to have been in place right at the start of the project. In addition to this delay, the presence of an incompetent project director compounded to the poor performance and extremely slow disbursement. Now a more competent project director and the full ISCT are in place and the project is beginning to move. Overall, the project staff in the core team as well as in the regions has now gained reasonable experience in carrying out specific fundamental activities, i.e. scheme diagnosis, technical surveys, design preparation, cost estimation, and preparation of bid documents. There has been significant improvement in the quality of diagnostic reports. Likewise, quality as well as pace of conducting technical surveys and preparation of scheme designs has improved. However, as noted by the MTR mission, there is no way of achieving the original physical investment targets by the Grant closing date or by even a reasonable extension of the Grant closing date (see A2 6 below). This restructuring is being carried out to establish reasonable physical targets with corresponding reduction in the Grant amount, as discussed during the MTR. The project has three main components: (A) on-farm water management in five project areas (Kabul region, Baghlan region, Balkh region, Herat region and Nangarhar region) covering approximately 50,000 ha; (B) institutional strengthening and capacity building of MAIL; and (C) project management, coordination and monitoring & evaluation. Component A has three sub-components: A1: Establishment and Strengthening of Irrigation Associations: Out of 175 associations to be established and registered legally within the framework of the 2009 Afghan Water Law, 170 associations have been established and registered. However, none of the activities associated with training these IAs and strengthening them to carry out their responsibilities has been initiated. Given that the Irrigation Associations have been established, further support to this component would be continued under the proposed restructuring. A2: Improvement of on-farm physical irrigation infrastructure (tertiary networks): In June 2012, the Bank team assessing the poor performance of this component worked out a revised schedule for implementation of physical infrastructure component. This schedule was referred to as the “relaxed fit” and required until end 2015 to complete this component. However, the MTR mission found that there was substantial slip in meeting even this “relaxed fit” and recommended the restructuring of the project. Even though 97 schemes are reported to have been technically surveyed only 41 schemes have been designed and approved so far against a “relaxed fit” target of 65 schemes as at end- January 2013. The command areas associated with these schemes are far below the estimated values used in the original project – only about 7,000 ha have been designed so far as against a target value of about 12,000 ha. In addition, the “relaxed fit” targets for (i) bid documents prepared and cleared; (ii) ITB and bid docs received; (iii) bids evaluated and cleared; (iv) contracts awarded; (v) construction on-going; and (vi) construction completed have been missed by large margins (see table below). Table – Targets versus Achievements as of end January 2013 Item “Relaxed Fit” Target Values until Achievements until end January end January 2013 2013 Bid Documents Prepared and 55 41 Cleared ITB and bids received 45 27 Bids evaluated and cleared 35 18 Contracts awarded 30 18 Construction Supervision-Ongoing 25 2 schemes Construction completed 10 2 Command area covered (ha) in About 3000 About 360 completed schemes In the two schemes where on-farm works have been completed, farmers were very appreciative of the improvements brought by the intervention in terms of improved 7 reliability and efficiency of water delivery. Nevertheless, further improvements can be made, e.g. installation of check structures in the main channel for which farmers are currently reluctant despite motivation by project staff. A3: Demonstration and dissemination of improved water saving techniques: Dissemination of water savings techniques and technologies through establishment of 25 Irrigation Demonstration Sites (IDS) within command areas of project schemes is one of the key project components. During the MTR, it was noted with concern that this is still a weak activity, which needs to be planned properly and undertaken effectively during the remaining project period. One satisfactory aspect noted by the mission was that laser land leveling demonstrations have attracted a lot of attention from farmers. Given the importance of demonstration of improved water saving techniques in achieving the development objective, further support would be provided during the proposed restructured project. B: Institutional strengthening and capacity building of MAIL: Limited numbers of MAIL and OFWM project staff have been trained at the Water Management Training Institute (WMTI) in Lahore. However this training has not yet produced any tangible improvements in the skills of the MAIL, DAIL and OFWM staff. Another batch of trainees has started training in Lahore in April and the Institute has been requested to provide focused training at this time. In general there has been total lack of coordination and consultation between the OFWM project management and the Irrigation Directorate of MAIL. However, given the importance of capacity building, this component will be supported in the restructured project. C: Project management, coordination and monitoring & evaluation: With the appointment of the new project director in July 2012, project management has improved. Substantial progress has been made in establishing the PMIS. A good system for tracking physical progress of works has been developed. Further work is required to convert this to a web-based system and to include all indicators as per the final baseline survey questionnaire of the M&E work. Based on this encouraging sign, further support would be provided in the restructured project for this component. C. PROPOSED CHANGES The project development objective (PDO) is to improve agricultural productivity in project areas by enhancing the efficiency of water used. The PDO is not changed in this restructuring.  Results/indicators The Results framework and monitoring indicators have been modified to reflect more accurately the measurement of project progress and achievement of project objectives. The revised indicators are provided in Annex 1. In summary, indicators have been introduced to measure the adequacy of training imparted to IAs, command area benefitting from physical infrastructure improvement, adaptation of technology demonstrated through the project, and the impact of the capacity building initiatives on the skills enhancement and performance of MAIL, DAIL and OFWMP staff. 8  Components Component A1 is maintained as in the original emergency project paper. The project management would be advised to prepare a work plan for the remainder of the project to effectively train the IAs in their duties. Component A2 would be substantially downsized to have a realistic target of infrastructure modernization and associated benefitting command area. US$ 16 million would be cancelled and the target command area would be reduced from the original 52,500 ha to 10,000 ha. The associated number of schemes is estimated to be approximately 50 and the improvements to the tertiary physical infrastructure would be completed by the current Grant closing date of June 30, 2014. The scheme selection criteria are slightly modified to allow schemes whose headworks and primary and secondary canals are in good operating condition as certified by the OFWM Project Director - whether they have been rehabilitated under the Bank-financed Emergency Irrigation Rehabilitation Project (EIRP) or not. The original emergency project paper allowed only those schemes which had been modernized under the former EIRP. In addition, the schemes need not be equally distributed among the five regions as proposed in the original project paper. The emergency paper had also recommended the precast parabolic concrete lining as a preferred lining method. This is now modified to allow other materials and forms of lining appropriate for the specific scheme and which could be completed in a short period of time by local contractors. Component A3 remains unchanged except to incorporate the MTR mission recommendations which are summarized below. The MTR mission suggested to the project management to develop a comprehensive time-bound site-specific, crop-specific irrigation demonstration plans for each region keeping in view that: (i) IDSs should be established only in the schemes to be taken up for rehabilitation in the remainder of the project period. (ii) The focus should be on representative crops of the area and the specific interventions demonstrated should be site-specific – e.g. drip and sprinkler where orchards are the major activity, land leveling and furrows in areas where cereal crops are a major activity, etc. (iii) The type of activity to be demonstrated should be replicable in the vicinity. (iv) DAIL staff should be fully involved in all irrigation demonstration activities. (v) There should be a small sign-board at each IDS indicating brief details of the technology being demonstrated to inform other farmers in the scheme. (vi) Selection of farms and farmers whose land would be used for IDS should follow the norms specified in the emergency paper as well as the Project Implementation Plan (PIP). (vii) The plot sizes should be large enough to correctly identify the benefits. Doing a laser land leveling demonstration in one or two jeribs (jerib = 0.2 ha) of land, for instance, is not the best method. Plot sizes up to 5 jeribs (1 ha) should be considered. 9 These changes would allow the project to pilot the physical infrastructure modernization and on-farm irrigation demonstrations efficiently and fully utilize the remaining funds allocated for this component. Component B is modified to include the construction of five office buildings – one each in Kabul, Herat, Mazar-e-Sharif, Baghlan and Jalalabad – to accommodate the Irrigation Directorate staff in the DAILs and the OFWM staff in the project Area Teams. Training of Kabul-based Irrigation Directorate staff as well as relevant DAIL staff is to be strengthened. Training at the WMTI in Lahore (Pakistan) and Roorkee Institute in India has been completed. A team of agronomists visited the Bank-financed IAMWARM project in Tamil Nadu, India to learn the SRI method of rice cultivation. These exposure visits as well as attendance at short courses in the region would be a focus under this component during the remainder of the project period. The buildings would be constructed utilizing the savings under this component and there would be no cancellation under this component. The bid documents for the buildings have already been approved by the Bank and bids have been called for. Work on these buildings is expected to start in June 2013 in order to be completed before June 2014. Component C remains unchanged.  Financing o Project Costs Project Costs (US$ million) Components/Activities Current1 Proposed Component A: On Farm Water Management 25.2 9.2 Component B: MAIL institutional strengthening and 4.1 4.1 capacity building Component C: Project management, monitoring and 6.2 6.2 evaluation Physical and Price Contingencies 5.5 5.5 Total Cost 41.0 25.0 Requested ARTF Financing 41.0 25.0 Total Funding 41.0 25.0 o Financing Plan In the emergency project paper, a small amount of community contribution was included. However, most of the community contribution is in kind and hence this element is now deleted in the financing plan with all funds coming from the ARTF. The financing plan has been revised in the data sheet. 1 If the project has had a previous restructuring, the current should reflect the latest approved costs. 10 Details of changes in financing plan after restructuring Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised Goods Goods 2.5 2.5 6.1 10.0 Works Works 20.2 6.6 49.3 26.4 Consultants’ Consultants’ 12.5 10.1 30.5 40.0 Services Services Training Training 2.3 2.3 5.6 9.2 Incremental Incremental 3.5 3.5 8.5 14.0 Operating Operating Costs Costs Total 41.0 25.0 100% 100% Summary of financing plan after restructuring Percentage of Amount of the Grant Expenditures to be Category Allocated (expressed in Financed USD) (inclusive of Taxes) (1) Goods and consultants’ services for the Project (except for Parts A.2 and A.3); Training 19,000,000 100% and Incremental Operating Costs under the Project (2) Goods, works and consultants’ services for 6,000,000 100% Part A.2 and A.3 of the Project. Subtotal Cancelled as of May 6, 2013 16,000,000 TOTAL AMOUNT 25,000,000 o Cancellations US$ 16 million will be canceled from the Grant resulting in a revised Grant amount of US$ 25 million. The entire cancellation will be from Component A2. The financial allocations for all the other components remain unchanged. The cancellation is initiated by the Bank but after consultation with the Recipient. As indicated previously, with the scaling down of the Project, these funds are no longer required.  Procurement The potential for delays in bidding and contract award processes affecting the ability of the project to meet the proposed reduced targets remains significant. Background checks as well as verification of documents and bank guarantees submitted by contractors need to be expedited. The MTR mission has recommended that the project management should consider alternate arrangements for execution of civil works such as community contracting where feasible. 11 D. APPRAISAL SUMMARY  Economic and financial analysis: Cost-Benefit Analysis of the Project after restructuring A revised cost-benefit analysis (CBA) was conducted for the restructured project. The restructuring consists of a scaling down of Component A2 to 10,000 ha while basically leaving Components B and C unchanged. As in the original CBA, the calculations were performed on a per hectare (ha) basis at two levels, i.e. farmer level and project level. Regarding benefits, only the expected crop yield increase was taken into account, i.e. even though the project is expected to also lead to increases in area irrigated and (in some areas) may even lead to an increase in the number of cropping seasons, these additional benefits are difficult to quantify at this point in time and are therefore left out. Given that wheat is the dominant crop in Afghanistan, the revised CBA was carried out taking wheat as an example. Secondary statistics suggest an average baseline (without project) yield of 2.5 metric tons (MT) per ha. In conducting our CBA we used a conservative 15% yield increase as a result of the project’s activities – even though information regarding the effect of investments in irrigation from other projects (e.g. EIRP, IRDP) as well as interviews with farmers point towards yield increases in the order of 25% or larger. A price of $0.35/kg was used which reflects the average farm gate price of wheat in Afghanistan over the past 12 months. The CBA takes into account only the first ten years of cash flows, i.e. any positive cash flow occurring after year 10 is ignored in the analysis, thus making the resulting returns an even more conservative estimate of what actually could be achieved. In both the CBA at farmer’s level and CBA at project level it is assumed that in the absence of the project, investment costs would amount to 10% of the total investment cost with the project. Regarding costs and consistent with the figures used in the original CBA carried out during project appraisal, an average per ha investment cost of $325 was used for civil works (all in year 1 of the cash flow analysis). This is the major portion of Component A2 of the project (water management infrastructure). For the farm level CBA the following additional cost items were taken into account: (i) costs of Component A1 (establishing and strengthening of Irrigation Associations (IAs) budgeted at U$ 1,445,500; (ii) costs of Component A3 (irrigation demonstration sites (IDS) budgeted at U$ 867,500; and (iii) O&M costs incurred by farmers. Consistent with the figures used in the original CBA, a cost of $2.58/ha/year was included for O&M with the project and $5.38/ha/year without the project. It is important to note that even though significantly fewer schemes than the original 175 will be completed by the closing date of the project, IAs were established and registered, and continue to receive training in all 175 schemes. Similarly, IDS will be established to the extent originally planned in the project (25 in total). However and as of March 1, 2013 (following the month of the MTR), 20 months had elapsed in the project which therefore had 16 months left until closure on June 30, 2014. Therefore, the costs incurred for Components A1 and A3 during the first 20 months can be considered as sunk costs. As a result only 44% (16/36) of the total costs for (i) and (ii) above were taken into 12 account in the revised CBA. In this way capacity building cost at the farmer level work out to US$ 103/ha based on 10,000 ha of irrigation improvement works. The project level CBA has all of the cost items that were included for the farm level analysis (i.e. (i)-(iii) above), plus the following: (iv) the non-physical works portion of Component A2 that supports the implementation of physical works in the field budgeted at $5,241,500; (v) cost of Component B1 (institutional strengthening of MAIL) budgeted at U$ 1,500,000; (vi) costs of component B2 (training of project, MAIL and DAIL staff)budgeted at U$ 1,518,225; (vii) costs of component C (Project management, coordination, monitoring & evaluation) budgeted at U$ 7,114,700. Cost items (iv)-(vii) above will remain unchanged under the restructured project. That is, the institutional part of Component A2 is lumpy and to a certain extent is independent of the number of hectares to be rehabilitated under the project. Institutional strengthening (cost item (v) above) and capacity building (cost item (vi) above) will continue in the restructured project as planned for the original project. Finally, since both the PIU and Area Teams will continue as planned and M&E activities are under way, cost item (vii) will also remain intact. However and based on the same sunk cost argument used for cost items (i)-(iii), the costs associated with items (iv)-(vii) were also reduced by 56% in the revised CBA. This way and again based on 10,000 ha of rehabilitation of irrigated areas, the costs of investments in capacity building at the project level work out to be US$ 134/ha whereas project management costs are US$ 549/ha. Based on the above, the restructured project continues to generate a healthy return at the farmer level (IRR of 77%) whereas the return at the project level also substantially exceeds the opportunity cost of capital (IRR of 18% vs. discount rate of 12%). The corresponding net present values (using a discount rate of 12% which being on the high side adds to the conservatism of the CBA) would be $637/ha and $160/ha. Remember that all of this is based on otherwise conservative assumptions regarding the expected benefits of the project, i.e. a conservative yield increase of 15% and no expansion of irrigated area or number of cropping seasons. Sensitivity analysis Just as in the original CBA, a number of sensitivity analyses were carried out around the base values for yield increase, wheat price and costs of rehabilitation works. If an increase in wheat yield of 25% (instead of 15%) would be achieved (based on previous experiences of other projects this seems quite feasible) then the IRR would jump to 222% for the farm level (table A1) and 40% for the project level (table A2). The corresponding NPVs would be $1156/ha and $679/ha for the farm and project level, respectively. In the (highly unlikely) scenario of no wheat yield increases, the IRR at the farm level would be zero while the project level IRR would turn negative (-11%). On the other hand, even if the cost of rehabilitation works would be 25% higher than projected, the financial returns to the project would remain attractive, i.e. the IRR would be 59% at the farm level (table A1) and 16% at the project level (table A2), with corresponding NPVs of $613/ha and $135/ha, respectively. Similar sensitivity analyses were carried out for variations in the farm gate price of wheat; the important message here is that even if the wheat price would fall 20% below 13 its current level (a highly unlikely scenario given the current state of national and international grain markets), the project would still generate IRRs that exceed the discount rate. In general the project’s financial returns are much more sensitive with respect to wheat yield than to either wheat price or investment cost (see figures A1 and A2). A “pessimistic” scenario was also analyzed in which the per ha investment cost for infrastructure works is 20% higher than the base value, the farm gate price of wheat is 20% below its base value, and the increase wheat yield is limited to 10%. In that case the IRRs at farmer and project levels decrease to respectively 30% and 5% with corresponding NPVs of $254/ha and -$224/ha. Whereas such a “pessimistic” scenario is highly unlikely to happen, the farmer level IRR and NPV remain acceptable - even if the project as a whole no longer provides an attractive return. In conclusion, even under a set of rather conservative assumptions regarding expected benefits, the restructured project which will rehabilitate 10,000 ha of irrigated land continues to yield attractive returns which are also quite robust with respect to possible adverse deviations from the base values regarding wheat yield, wheat price and the cost of rehabilitation of irrigation infrastructure. Table A1: Expected IRR at farmer level under different assumptions regarding investment costs and wheat price and yield IRR Farme r le ve l IRR Deviation Wheat Wheat from base Price Yield Investment 25% 112% 222% 59% 20% 104% 128% 62% 15% 97% 77% 65% 10% 90% 45% 69% 5% 83% 22% 73% 0% 77% 0% 77% -5% 72% 82% -10% 66% 89% -15% 61% 96% -20% 57% 105% -25% 52% 116% 14 Figure A1: Expected farm level IRR (vertical axis) under different assumptions regarding deviations from baseline values for investment costs and wheat yield and price (horizontal axis) 250% IRR at Farmer level 200% 150% 100% 50% 0% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -50% Wheat Price Investment Wheat Yield Table A2: Expected IRR at project level under different assumptions regarding investment costs and wheat price and yield IRR Proje ct le ve l IRR Deviation Wheat Wheat Capacity from base Price Yield Investment Building Management 25% 25% 40% 16% 17% 14% 20% 24% 28% 17% 17% 15% 15% 22% 18% 17% 17% 16% 10% 21% 8% 17% 17% 16% 5% 19% -1% 17% 18% 17% 0% 18% -11% 18% 18% 18% -5% 16% 18% 18% 19% -10% 15% 18% 18% 19% -15% 14% 19% 18% 20% -20% 12% 19% 18% 21% -25% 11% 19% 19% 22% 15 Figure A2 Expected project level IRR (vertical axis) under different assumptions regarding deviations from baseline values for investment costs and wheat yield and price (horizontal axis) 45% IRR at Project level 40% 35% 30% 25% 20% 15% 10% 5% 0% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% Wheat Price Investment Wheat Yield Capacity Building Management  Technical: The scheme selection criteria have been modified to include those schemes whose primary and secondary canals are in good operating condition whether they have been improved by the former Bank-financed Emergency Irrigation Rehabilitation Project or not. In addition based on the experience gained in the limited progress made in physical infrastructure improvement, it has been decided to proceed with all lining options relevant to the local conditions and not insisting on the PCPL segments.  Social: No Change  Environment: No Change  Exceptions to Bank Policy: No Change  Risk: No Change 16 ANNEX 1 Results Framework and Monitoring I. Results Framework Table A1.1 Outcomes and Indicators PDO Project Outcome Indicators Use of Project Outcome Indicators Improved agricultural productivity  Land productivity of  To assess if project has in project areas by enhancing the wheat and other crops in achieved its development efficiency of water used project areas objectives  Water productivity of  Improve management of wheat in project areas project activities  Irrigated area increase due  To assist designing future to project interventions interventions Intermediate Outcomes Intermediate Outcome Use of Intermediate Outcome Indicators Monitoring Component A: On Farm Water Management Irrigation Associations (IAs)  Number of IAs formed  To improve O&M by water established and strengthened  Training sessions users provided to each IA including contents of such sessions Improved on-farm physical  Length of watercourses  To verify adequacy of irrigation infrastructure rehabilitated rehabilitation works resulting in improved water flow to  Associated command area farmers’ fields covered  To continue improving rehabilitation designs based  Conveyance efficiency % on experience in already (a measure of water loss) completed schemes  Conveyance duration  Time to divert water to farmers field Irrigation demonstration sites  Number of irrigation  To verify relevance of established to disseminate water demonstration sites irrigation and agronomy PDO Project Outcome Indicators Use of Project Outcome Indicators saving measures  Number and type of technologies demonstrated water-saving measures demonstrated at each site  Number of farmers participating in demonstrations  Number of farmers adopting the demonstrated measures Component B: MAIL Institutional Strengthening and Capacity Building MAIL strengthened to implement  Number of MAIL, DAIL  To track progress in capacity OFWM works and OFWMP persons building in MAIL regarding trained on OFWM OFWM principles and designs  To verify quality and  Proportion of rehabilitated relevance of rehabilitation schemes obtaining at least works “satisfactory” rating from irrigation water users II. Arrangements for Results Monitoring The framework for project monitoring, learning, and evaluation (M&E) is designed to facilitate: (a) a results-based management approach that is informed by feedback from timely monitoring of project activities, processes, outputs, and outcome indicators; (b) continued capacity building and learning through a mix of formal trainings and participatory processes such as joint assessments between the Project Area Teams, Irrigation Associations, and third-party supervising agency; and (c) impact assessment, which primarily involves measuring the impact of the project on a clearly defined set of outcome indicators and good survey data. Institutional Arrangements The PIU has overall responsibility for assessing the project’s performance in achieving the PDO and intermediate outcome indicators. The PIU is also responsible for further developing and maintaining the already developed Project Management Information System (PMIS). The PMIS that is in place provides a platform for entering data on all monitoring and evaluation aspects of the project, including physical progress, project outputs, financial disbursements, and procurement data. The PMIS will need to be made 18 accessible to designated officials in the Irrigation Department and GDP to enable these supervising units directly obtain monitoring reports. The PIU has engaged an external M&E agency who is primarily be responsible to collect data for assessing the impact of the project on selected outcome indicators. Towards this effort, the M&E agency has developed a sound survey strategy and sampling methodology that forms the foundation for impact assessment. Two surveys will be conducted by the M&E agency; (i) baseline survey to capture the indicators before project implementation in both target and control schemes, and (ii) impact assessment survey at completion of the project. The surveys are conducted on a consistent sample of households. The PIU has also assumed responsibility for internal monitoring to track physical progress of project processes and outputs. To ensure effective performance of this function, the unit is adequately staffed with a senior M&E expert and supporting staff to help in the following: (i) designing data collection forms to record various project processes e.g. election of IAs officials, irrigation roster in each scheme, approval of designs for irrigation physical infrastructure, completion of works; (ii) entering data collected using such formats; (iii) preparing monitoring reports; (iv) supporting the M&E agency in survey work; and (iv) documentation. The M&E staff in the PIU in the Kabul head office, in close cooperation with the Area Teams, is functioning adequately ensuring that: (a) in each monitoring phase, the data collection formats and surveys capture relevant aspects of the project, including project processes and physical outputs; (b) data is collected in a timely manner and properly entered in the systems; and (c) reports of appropriate contents and quality are generated in a timely manner. Data Validation and Entry The PIU has developed a process that ensures that data collected through the project is entered into the PMIS. The responsibility for data quality lays with respective data collection units, including the external M&E agency, but PIU will provide oversight during the entire data collection exercise, including visiting the project area to undertake field-level verification of data already collected. In particular, the external M&E agency is responsible for designing a series of codes or processes for conducting checks on formats/questionnaires during data collection and cleaning the data after entry. After all checks have been conducted, the data are transferred to the PMIS. Capacity Building and Learning The external M&E agency provides support to all implementing agencies during internal monitoring processes, especially designing data collection formats and the actual process of gathering data on activities and physical outputs. 19 The PIU coordinates training on use of PMIS to key project staff, the Irrigation department,and implementing agencies. The training includes generating standard reports from the system. In addition, the PIU will coordinate seminars to disseminate monitoring and evaluation results and project learning notes. Data Analysis and Reporting of Results Monitoring and Evaluation The PMIS already in place includes a reporting function to generate simple, informative, and user-friendly reports. The following reports form the backbone of results monitoring: (i) basic scheme level monthly reports on the status of implementation activities, findings of participatory monitoring processes, and progress on capacity building activities; (ii) bi- annual consolidated reports; (iii) baseline report, (iv) mid-term review; and (v) final impact assessment report at project completion. The key characteristics common to monthly, bi-annual, and mid-term review reports are: (i) they describe the status of the project in terms of implementation activities and progress towards achieving the expected outputs and outcomes, (ii) they identify the factors which delay implementation activities or prevent the achievement of outputs and outcomes, and (iii) they identify corrective actions and summarize lessons learnt. Table A1.2 below describes the various arrangements for results monitoring in greater detail. 20 Table A.1.2Arrangements for Results Monitoring Target Values (%) Data Collection and Reporting Project outcome indicators Baseline YR 1 YR 2 YR 3 Frequency and Data Collection Responsibility for Data Reports Instruments Collection  Increase in land productivity Baseline, MTR Baseline and M&E agency and PIU of wheat2 (kgs/ha) in project 2.5 - 10% 15% and ICR reports end-of-project areas survey  Increase of water productivity Baseline, MTR Baseline and M&E agency and PIU of wheat3 (kgs/cubic metre) in and ICR reports end-of-project project areas 0.625 - 10% 15% survey -  Increased irrigated area (ha) Baseline, MTR Baseline and M&E agency and PIU due to project interventions 0 - 5% 10% and ICR reports end-of-project survey Intermediate outcome indicators Baseline YR 1 YR 2 YR 3 Frequency and Data Collection Responsibility for Data Reports Instruments Collection Component A: Sub-component A1: Establishment and Strengthening of Irrigation Associations (IA)  Number of IAs formed and 0 50 100 175 Monthly M&E field visits PIU M&E staff registered using forms PIU M&E staff  Number of training sessions 2 To be done for other crops as well 3 To be done for other crops as well Target Values (%) Data Collection and Reporting Project outcome indicators Baseline YR 1 YR 2 YR 3 Frequency and Data Collection Responsibility for Data Reports Instruments Collection provided to each IA each year 0 1 1 1 M&E field visits including contents of such using forms sessions Sub-component A2: Improvement of on-farm physical irrigation infrastructure 0 0 3000 10000 Baseline and Baseline and M&E agency and PIU  Associated command area ICR reports end-of-project covered (cumulative) survey  Conveyance efficiency % 40% - 60% 60% Baseline and Baseline and M&E agency and PIU (litres/second at the tail end ICR reports end-of-project field divided by litres/second survey upstream where works begin)4  Decrease in conveyance 0% - 40% 40% Baseline and Baseline and M&E agency and PIU duration5 (%) ICR reports end-of-project survey  Decrease in time to divert 0% - 70% 70% Baseline and Baseline and M&E agency and PIU water to farmer’s field (%) ICR reports end-of project survey Sub-component A3: Dissemination of improved water saving measures through 4 Get a measure in three points (head, middle, and tail) for every scheme just before works begin and end-of-project survey – coordinates of measurement locations for each scheme must be recorded 5 Every farmer in the sample will be asked (during baseline and end-of-project surveys) for the time it takes for water to reach his farm once it is connected for his turn. 22 Target Values (%) Data Collection and Reporting Project outcome indicators Baseline YR 1 YR 2 YR 3 Frequency and Data Collection Responsibility for Data Reports Instruments Collection irrigation demonstration sites 0 1 9 15 Monthly M&E field visits PIU M&E staff  Number of irrigation using forms demonstration sites 0 3 30 75 Monthly M&E field visits PIU M&E staff  Number and type of water- using forms saving measures demonstrated  Number of farmers 0 100 400 1000 Monthly M&E field visits PIU M&E staff participating in demonstrations using forms  Number of farmers adopting 0 10 40 100 Monthly M&E field visits PIU M&E staff the demonstrated measures using forms Component B: MAIL Institutional Strengthening and Capacity Building  Number of MAIL, DAIL and 0 30 50 95 Quarterly M&E records PIU M&E staff OFWMP persons trained at various institutions  Proportion of rehabilitated 0 50% 60% 70% Monthly (MTR M&E field visits PIU M&E staff (incl.. schemes obtaining at least and ICR using forms; M&E agency) “satisfactory” rating from reports) (MTR and end- irrigation water users of project survey) 23