69025 SDN ESW Results Story July 2008 Iraq Water Country Assistance Strategy Iraq's water sector is in crisis, with severe effect on the incomes and health status of the Iraqi people. This ESW suggested that immediate improvement in rural service delivery, together with effective demand management, can provide early wins in Iraq, with potentially high economic and social benefits. Follow- up lending projects are helping achieve early results. Efforts to date have created about 176,000 man- days of local employment, improved about 70,000 irrigated hectares, and benefited 121,000 end users, mainly in the irrigation sector. 1. Challenge The Iraq Water Country Assistance Strategy (CAS) was undertaken in 2005-6 to address the The protracted crisis that began in the 1990s has water crisis. It is a cross-cutting ESW, covering affected the water supply, sanitation, and irrigation various water-related themes. The main sector in Iraq severely. Irrigated agriculture is the counterpart for the Water CAS has been the largest consumer of water, but water is used Ministry of Water Resources, but other ministries inefficiently. Irrigation infrastructure from pumping have also shared ownership, particularly the stations to canal networks has degraded from lack Ministry of Planning and International Cooperation of maintenance. About 40 percent of the and the Ministry of Public Works and traditionally irrigated area is out of production, and Municipalities. yields are at levels below those of the 1960s. Rural employment has plummeted and about 30 percent of farmers were already out of farming by 2002. 2. Findings and Dissemination Water planning and allocation decisions are The recommendations of the Water CAS focused managed from the center, with limited cooperation on two key aspects: immediate improvement in among the various delivery agencies and with service delivery to provide quick returns, and virtually no user involvement. Hydropower output policy and institutional reforms in the medium to had dropped in recent years and is often at 30-50 long term. percent of capacity. Water service in most cities is limited to few hours a day and is of poor quality. On the first point, the report stressed the need to The water supply system is inefficient, and losses target investments in rehabilitation and amount to two-thirds of the water treated and modernization that could bring rapid pumped. The high losses stem from aging and improvements in domestic water supply and deterioration of water facilities, lack of proper sanitation, irrigation, and hydropower for maintenance over the past decade and a half, and electricity. These investments would be contingent ongoing physical damage from the war. upon an assurance by the government to achieve tangible and immediate results in securing water the demand management strategy, the project and creating employment at the community level. seeks to improve the technical efficiency of the In the immediate emergency phase, the water conveyance and distribution system. government should consider two factors in prioritizing infrastructure rehabilitation: (a) cost- The Iraq Dokan and Derbandikhan Emergency effectiveness criteria, for example, cost per Hydropower Project ($40 million), approved in hectare of land irrigated or cost per unit volume December 2006, is intended to finance the urgent of water saved; and (b) future needs, that is, repair of two hydroelectric power stations to investments made today should not prejudice improve electricity supply. This is in line with the possible future decisions on supply or use. The strategy that emphasizes rapid rehabilitation of report also suggested using the crisis as an critical infrastructure to improve basic service opportunity for change by testing new institutional delivery. approaches for implementation. These include consulting local users on priority locations and The Iraq Second Emergency Water Supply Project preferred designs for rehabilitation in order to ($108 million), approved in March 2008, seeks to foster accountability, as well as employing labor- improve the quality and quantity of water supply intensive approaches where possible to generate in four selected governorates by rehabilitating local employment. For instance, the report urban water supply and distribution schemes. It recommended adopting small-scale civil work will also build the capacity of the Ministry of contracts with competitive bidding across the Municipalities and Public Works for project entire country to maximize the local labor content planning and implementation. The government of of each contract. Iraq, assisted by a Policy and Human Resources Development grant, is also preparing a national Second, the Water CAS emphasized the need water supply and sanitation sector study to serve for policy and institutional reforms geared to better as a basis for future sector reform. management of water resources. It recommended an integrated approach to balance supply and demand in the sector. On the supply side, measures to manage and augment water 4. Key Results resources were proposed for the medium to long term. On the demand side, the report called for The ESW is contributing to results in several immediate implementation of a coherent set of areas: pricing and nonpricing instruments, including improvements in the technical efficiency of the Adoption of the Water CAS. The Ministry of Water water system. Also recommended were Resources has adopted the Water CAS as a basis measures for capacity building through training for developing the country's water strategies and and reform of procurement procedures to operations. Phase II of the National Land and encourage competitiveness. Water Master Plan, supported by the U.S. Agency for International Development, also intends to At the request of the Iraqi government, the Water incorporate a range of policy, institutional, and CAS was translated into Arabic to facilitate its investment options recommended in the strategy. dissemination within Iraq. Tangible outcomes of the ECIRP in line with the policy directions of the Water CAS. As of mid- 2008, the ECIRP has improved about 70,000 3. Subsequent Role for the Bank hectares of irrigated area and benefited 121,000 end users, mainly in the irrigation sector. The In line with the recommendations of the Water project is financing 22 rehabilitation subprojects CAS, the Bank has been supporting the and 11 goods/equipment contracts across 13 of government of Iraq through a number of water- Iraq's 18 governorates. The unit cost for related operations. The Iraq Emergency rehabilitation of irrigated land is on average $500 Community Infrastructure Rehabilitation Project per hectare and is half the regional average. The (ECIRP, $20 million), approved in 2005, aims to labor-intensive civil works to restore and improve restore priority rural water supply, sanitation, the water supply and sanitation infrastructure have irrigation, and drainage infrastructure using labor- created about 176,000 man-days of local intensive, small-scale civil works programs employment. Spatially, these subprojects have through national and local contractors. As part of had reasonably equitable distribution across Iraq, 2 which is positive from a sociopolitical viewpoint. promote client ownership. At the base of the Procurement has been competitive, with an pyramid, a group of multidisciplinary national average of seven bidders per contract. The use consultants were engaged to approach the of local and national contractors has helped create respective Iraqi agencies for cross-cutting local employment and contributed to the baseline data. Each consultant covered a specific development of small and medium enterprises. topic such as institutions, natural resources, infrastructure restoration, or legislation, with some Scaling up from the ECIRP. Following the success overlap between them as a hedge against the of the ECIRP, the government of Iraq requested failure of any one consultant to deliver. At the assistance for scaling up the activities. Additional middle tier of the pyramid, two international financing of $26 million, provided through the Iraq consultants helped analyze and synthesize the Trust Fund in March 2008, will support deliverables of the national consultants, and at rehabilitation of the rural water infrastructure and the apex, the Task Team managed the entire create local employment. It is estimated that the process. This approach may be replicable for additional financing will enable the project to add other client countries experiencing or emerging at least 86,000 man-days of local employment, from conflict. improve an estimated 33,000 hectares of irrigated area, and benefit about 38,000 end users. It was useful to disseminate the deliverable, including the background reports, internally to other related sectors within the Bank's Middle East and North Africa Region. Useful inputs and 5. Lessons Learned perspectives were obtained from various sectors within the Bank, including Energy, Agriculture and The Iraq Water CAS and subsequent Bank Rural Development, Environment, and Social projects highlighted several aspects of project Development. implementation in conflict states. Even if a country is in crisis, the Bank can still deliver a diagnostic The Bank's supervision has been supported by a ESW with an acceptable level of client ownership. satellite imagery system that has provided some Since World Bank staff are not permitted to travel evidence of the project's impact. Satellite data are to Iraq, an unconventional "pyramid" approach particularly useful in evaluating activities in a was used to obtain credible information and conflict country where Bank staff cannot travel. Key Contact Ahmed Shawky, MNSSD, Task Manager, ESW "Iraq Water Country Assistance Strategy," ashawky@worldbank.org 3