Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 9022
PROJECT COMPLETION REPORT
NEPAL
MAHAKALI IRRIGATION PROJECT (STAGE I)
(CREDIT 1055-NEP)
SEPTEMBER 28, 1990
iculture Operations Division
ntry Department I
a Regional Office
it has a restricted distribution and may be used by recipients only In the performance of
duties. Its contents may not otherwise be disclosed without World Bank authorization.



CURRENCY EQUIVALENTS
1 Nepalese Rupee (NRs) - US$0.04
NRs 28.0               - U$$1.00
NRs 100                - US$3.57
WEIGHTS AND MEASURES EQUIJALENTS
1 m      - meter (3.28 feet)
1 m3/sec  - cubic meter (35.3 cubic ft) per second
1 km     = kilometer (0.62 mile)
1 ha     = hectare (2.47 acres)
1 liter   - 61.02 cubic inches
M           million
1 ton    = 2,205 pounds (lbs)
ABBREVIATIONS AND ACRONYMS
CFRID   - Committee for Forest, Resettlement and Irrigation
Development in Kanchanpur District
DCA     - Development Credit Agreement
DIHM    - Department of Irrigation, Hydrology and Meteorology
(renamed the Department of Irrigation 12/87)
DOA     - Department of Agriculture
DOI     - Department of Irrigation
EC&D    - Engineering Construction an: Design
ERR     - Economic Rate of Return
HMGN    - His Majesty's Government of Nepal
ICB     - International Competitive Bidding
IDA     - International Development Association
LCB     - Local Competitive Bidding
LRD     - Land Revenue Department
MIDB    - Mahakali Irrigation Development Board
MIP      - Mahakali Irrigation Project (Stage I)
PCR     - Project Completion Report
RWS      - Rotational Water Supply
SAR     - Staff Appraisal Report
UNDP    - United Nations Development Program
WUG      - Water Users' Group
FISCAL YEAR
July 16 - Jutly 15



FOR OFFICIAL USK ONLY
THE WORLD BANK
Washington. D.C. 20433
U.S.A.
Office of D4tarvCmffatal
Op.atmu  tvahatKm
September 28, 1990
MMORAIDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT
SUBJECT: Project Completion Report on Nepal Mahakali
Irrigation Proiect (Stage I1) (Credit 1055-NEP)
Attached, for information, is a copy of a report entitled
"Project Completion Report on Nepal - Mahakali Irrigation Project (Stage I)
(Credit 1055-NEP)" prepared by the Asia Regional Office with Part II of the
report contributed by the Borrower. No audit of this project has been made
by the Operations Evaluation Department at this time.
Attachment
This document has a restricted distribution and may be used by recipients only in the performance
of their official duties. Its content may not otherwise be disclosed without World Bank authorization.



FOR OFFICIAL USE ONLY
NEPAL
MAHAYALI IRRIGATION PROJECT (STAGE I)
(CREDIT 1055-NEP)
PROJECT COMPLETION REPORT
Table of Contents
Page
No.
Preface .          ................................................................                       i
Evaluation  Summary .....................................................    iii
PART I.    PROJECT REVIEW FROM IDA'S PERSPECTIVE  ........................                                1
Project Identity                      ..1........................ 
Background ........                                                                                I
Project Objectives and Descriptio                                  ..                            2
Objectives ..................................................                            2
Description ...........................                                                  2
Project Implementation    ....................................                                   3
General               ....................................                               3
Revision               ....................................                              3
Construction              ....................................                           3
Procurement              ....................................                            3
Agricultural Extension and Training  .....                .......... .                   4
Fellowships ...........................                                                  4
Reporting ......... ...............                                                      4
Institutional Performance ........................                                               4
Coordination:  Land Clearing and Settlement  ................ .                          4
Project Management                            .. .......   5
Water Management .........................                                               5
Water Users'  Groups  (WUGs)  ................................ .                         5
Cost Recovery ...........................                                                6
Project Results               .......................................                            6
Agricultural  Production  ................................... .                          6
Employment and Farm Incomes  ............................... .                           6
Economic Rate of Return  ................................... .                           7
Project Sustainability .........................                                                 7
Bank Performance .........................                                               7
Borrower's Performance  .................................... .                           8
Project Relationship  ...................................... .                           8
Consulting Services  ...................................... .                            8
Project Documentation and Data ..... ..............                                      9
PART II.   PROJECT REVIEW FROM BORROWER'S PERSPECTIVE  ...................                              10
Evaluation of Performance  .................               ..        ....................      10
Bank's Performance ............................                                                10
Borrower's  Own Performance  ..................................... .                           10
Lessons Learned ............................                                                   10
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.



PART III. SUMMARY OF STATISTICAL DATA
Table lt Related IDA Credits ........ .  ..............................   12
Table 2:  Project Timetable ......... ................................   13
Table 3: Cumulative Disbursements .13
Table 4: Physical Achievements .14
Table 5: Project Cost and Financing .14
Project Costs .14
Project Financing .15
Table 6: Project Results .15
Direct Benefits .15
Economic Cost and Benefit Streams .16
Studies .16
Table 7:  Compliance with Credit Covenants .17
Table 8:  Staff Input ..................... . ..................   17
Table 9: Mission Data .18
Table 10: Reassessment .19
Table 11: Physical Works, by Block .19
Table 12: Pilot Scheme Buildings .19
Table 13: Water User Group Formation .20
Table 14: Cost Recovery Performance .20
Table 15: Incremental Crop Production .21
Table 16: Cropping Patterns and Yields ...............................   21
Table 17: Incremental Benefits to Farm Families .22
Table 18: Incremental Agricultural Employment .22
Map IBRD 14899R



- i -
NEPAL
MAHAKALI IRRIGATInN PROJECT - STAGE I
(CREDIT 1055-NEP)
PROJECT COMPLETION REPORT
PREFACE
This is a Project Completion Report (PCR) for the Mahakali Irrigation
Project, Stage I (Cr. 1055-NEP) in Nepal for which a Credit of US$16.0 million
was extended to His Majesty's Government of Nepal (HMGN) in September 1980. The
Credit was closed December 31, 1988.  The undisbursed balance of the Credit,
US$27,042.98, was cancelled on July 17, 1989.
Information sources used for the PCR include the Staff Appraisal
Report (SAR), Development Credit Agreement (DCA), Supervision Reports,
correspondence with the Borrower, Quarterly Project Progress Reports as submitted
by the Borrower, and internal Bank memoranda on project issues as contained in
relevant Bank files. Parts I and III of this PCR had been sent to the Berrower
for their review and comments. IDA received their comments in January 1990 and
incorporated them in the PCR. The Borrower contributed Part II of the report.
The PCR was prepared by the Agriculture Division, Asia Technical Department.
A specific field trip in connection with the PCR was not made.



- iii -
NEPAL
MAHAKALI IRRIGATION PROJECT (STAGE I)
(CREDIT 1055-NEP)
PROJECT COMPLETION REPORT
EVALUATTON SUMMARY
i.         Objectives.  The Mahakali Irrigation Project (Stage I) was to improve
and extend an existing irrigation system on the far western Terai.   The
objectives of the project were to: (a) improve the reliability of water
deliveries, in the quantities required, to farmers within the existing system
(3,400 ha); (b) extend irrigation facilities to an additional 3,200 ha; (c)
improve communications and operating efficiency by providing all-weather roads;
and (d) accelerate agricultural development and thus increase farm incomes. The
project was designed to: (a) improve and extend irrigation and drainage works;
(b) construct access roads, model farm and necessary buildings; (c) strengthen
agricultural extension activities; and (d) provide fellowships for Nepali
students to study engineering and agriculture.
ii.        Imr]ementation.  Initially, project implementation lagged far behind
schedule. There were changes in project scope and delays in procurement of a
main civil works contractor. By January 1984, the project was two years behind
schedule.  In late 1984, the project was reassessed and the project areai was
reduced from 6,600 to 4,600 ha (Table 10) without reducing the estimated project
costs. The area reduction resulted from: (a) a 1981 Government ban on forest
clearing and (b) errors in the maps used at appraisal.   The ban on forest
clearing precluded clearing of over-mature trees, brush and stumps from about
900 ha.   The mapping error resulted in an additional 1,100 ha reduction in
project area.   The fellowship component was removed from the project ,t
reassessment. HMGN had resisted the use of credit proceeds for training, and
difficulties had been encountered in placing students in appropriate
institutions.   Through a grant to HMGN, UNDP assumed responsibility for a
fellowship program in engineering and agriculture.
iii.       After a civil works contract was signed in late 1984, implementation
proceeded rapidly, and civil works were completed by June 30, 1987. Because of
the delay in award of contract, however, the project closing date was extended
twice. It was further extended through December 31, 1988, to allow formation
of a Water User Group (WUG) in the command area, and to provide continuity of
agricultural extension activity until the November 1988 effective date of Cr.
1924-NEP (for the follow-on Stage II project).
iv.        The project was unable to achieve physical targets set at appraisal,
but all revised targets were fully met (Table 4), and the civil works constructed
are of internationally acceptable quality. The pilot farm has accomplished much
in the areas of agricultural training and cropping trials (para. 13).   The
Project Organization performed well and developed strong institutional capacities
under Stage I (para. 18). A most noteworthy characteristic of this project is
the level of cost recovery achieved.   Water charge collection rates in the



- iv -
Mahakali Irrigation Project command area are the highest of any HMGN-managed
irrigation system (para. 23).
v.         Results.   The primary results of this project are: (i) increased
water management efficiency; (ii) increased cropping intensities; (iii) increased
crop yields; and (iv) increases in incomes as well as in training and employment
opportunities. Installation of water flow control structures and organization
of WUGs have resulted in increased water management efficiency (paras. 20-21).
vi.        Average cropping intensities in the command area increased by 40% and
average yield of improved paddy and wheat rose 48% and 64%, respectively, between
1983 and 1989 (Table 15).   Programs designed to train farmers in optimal
cultivation practices were instituted under Stage I. and contributed to the
large increases in agricultural production. Farm incomes rose by a minimum of
100%, (Table 6(a)).  Agricultural employment in the project area rose by 76%
(Table 18). Both of these increases are higher than was projected at appraisal.
The appraisal estimate of the economic rate of return (ERR) was 14%; the estimate
at the time of reassessing the project was 17%. The present estimate of the ERR
is 20%, which is particularly impressive in light of the substantial reduction
in project scope.
vii.       Sustainability. The achievements of this project have had substantial
positive impact on agricultural development in the project area. Two factors
will contribute significantly to continuing the project's objectives after
closing: (a) the institutional development that occurred during implementation
(which is continuing under Stage II); and (b) the high rate of water charge
collection efficiency.
viii.      Findings and Lessons.  The project achieved its goals even though the
physical targets were revised during project implementation due to changes in
both the scope of the project (para. 10) and the procurement mode for the main
civil works  contract  (para.  12).    The weaknesses  idencified  in project
implementation were: (a) lack of structured incentives for farmers to be more
involved in the project cycle from an early stage; for example, formation of
effective WUGs and construction of field channels by farmer groups were less
effective before a timely and reliable water supply was provided (para. 22); and
(b) inadequate project preparation as evidenced by the mapping error (para. 10)
and lack of a realistic assessment of the relative feasibility of Local
Competitive Bidding (LCB) and International Competitive Bidding (ICB) civil
works contracts (para. 12). The lessons derived from this experience have been
incorporated in the formulation of the follow-on project.



NEPAL
MAHAKALI IRRIGATION PROJECT (STAGE I)
PROJECT COMPLETION REPORT
PART I.   PROJECT REVIEW FROM IDA'S PERSPECTIVE
Proiect Identity
Name                : Mahakali Irrigation Project (Stage I)
Credit No.          : Cr. 1055-NEP
RVP Unit            : Asia Region
Country             : Nepal
Sector              : Agriculture (Subsector, Irrigation)
Background
1.         At the time of project appraisal in 1979/80, farm production and
related activities comprised more than 60% of Nepal's GDP. The sector engaged
almost 90% of the labor force and provided more than 80% of all exports. Of the
24,500 sq km (17% total land area) available for cultivation, at most 15% was
irrigated. About 90% of the cropped area was sown with foodgrains, which then
largely determined agricultural growth. Duri.ng the period 1970/71 to 1977/78,
the trend in production of major foodgrains, except wheat, was rather disap-
pointing. Production grew at about 1.1% annually due to expansions in acreage,
while yields, except for wheat, fell at a rate of about 0.8% per year. Cash
crops, however, fared much better partially due to favorable prices.  Production
growth in cash crops, too, was derived from expanded cultivation and not from
increasing yields.
2.          In the late 1970s, HMGN strategy was to develop the Terai for
generation of domestic and exportable foodgrain surpluses as a resource for
further development. Since possibilities for area expansion are limited in the
Terai, emphasis was given to increasing yields, mainly by expansion and upgrading
of existing irrigation infrastructure and inputs. Initial results from the first
IDA-assisted irrigation project in Nepal - Narayani Zone Irrigation Project
(Stage I) (Cr. 373-NEP) - indicated that substantial yield improvements could
be expected from improved irrigation water supply combined with increased
agricultural inputs and effective extension services.  HMGN's strategy stressed
diversification into cash crops whose performance had been promising and whose
marketing prospects were good.
3.         The Bank Group's strategy in Nepal placed major emphasis upon the
directly-productive sectors (particularly agriculture) and the development of
complementary infrastructure. Since IDA's first involvement with irrigation in
Nepal in 1973, there has been continuing IDA assistance to the irrigation
s^ubsector in Nepal (See Part III, 1). The main objective of Bank involvement
in irrigation in the Terai was to improve the reliability of water distribution
to the farm through both technical improvements and more effective organization
of water users.
4.         Improvement of the existing Mahakali irrigation system in the Far
Western Region of Nepal was initiated by HMGN in the early 1970s. In 1976, the
Mahakali Irrigation Project (MIP) was identified by IDA and in 1978, its
preparation for IDA finance was undertaken by an international consulting firm.



At appraisal in January 1980, the system had three major problems: (a) there was
severe siltation; (b) the number of tertiary outlets and the length of tertiary
canals were insufficient for proper water d'istribution; and (c) field chalnnls
serving individual farms were lacking.
5.         The SAR estimated total project costs for system improvement and
extension at US$19.5 M.  Negotiations were held in Washington, D.C. on May 20-
23, 1980.   An .DA Credit (1055-NEP) in the amount of US$16.0 M (15.1 M SDR
equivalent) was approved by the Board on June 9, 1980.   The DCA was signed
September 29, 1980, with an effective date of December 30, 1980. The project
had a five-year implementation period, with a completion date of June 30, 1985.
Project Objectives and Description
6.        Objectives.  The objectives of the project were to: (a) improve the
reliabif.ty of water deliveries to farmers within the 3,400 ha existing system;
(b) excend irrigation facilities to an additional 3,200 ha; (c) improve
communications and operating efficiency by provic.ing all-weather roads; and (d)
accelerate  agricultural  development  and  thus  increase  farm  incomes.   To
accelerate agricultural development,  the project was also designed to:  (a)
improve water control through installation of additional control structures, and
through the extension of the distribution system to outlets serving 7-8 ha
parcels of land; (b) intensify agricultucal extension and training; and (c)
develop technical staff by providing fellowships for Nepali students.
7.         Description.  Nine project components were specified in the SAR: (a)
improvements to the existing irrigation and drainage system on about 3,400 ha;
(b) extension of irrigation and drainage systems by 3,200 ha to 6,600 ha,
including about 30 km of new distributaries and 115 km of tertiary canals; (c)
construction of an interconnected network of all-weather public roads (about 40
km) and canal service roads (about 65 km); (d) construction of buildings for
engineering and agricultural activities and staff quarters; (e) strengthening
agricultural extension, research and training activities, including construction
of a pilot demonstration farm-cum-training center; (f) procurement of materials,
equipment and vehicles for construction, survey and laboratory activities and
project operation and maintenance; (g) provision of technical services, including
foreign and local consultants for project implementation and aerial photography
and mapping; (h) fellowships for Nepali students to study civil and mechanical
engineering and agriculture; and (i) undertaking agricultural development
activities in the Bhairawa-Lumbini Groundwater Project (Cr. 654-N'P).
8.         Consistent with the development plan for Kanchanpur District, nmGN
assumed responsibility for two activities integral to the MIP. First, the Timber
Corporation of Nepal, by authority of the Forest Products Development Board, was
to complete clearing work on about 2,200 ha of over-mature trees, brush and tree
stumps from within the project area. Second, in order to unite two sections of
the Suklaphanta Wildlife Reserve and reduce river bank erosion, HMGN planned to
move farm families living along the Mahakali and Chaudar Rivers to the project
area. Responsibility for moving the farmers rested with the Resettlement
Department of the Ministry of Forests. Both activities were to be coordinated
through the Committee for Forests, Resettlement and Irrigation Development in
Kanchanpur District.



Proiect Implementation
9.         General.  The Credit became effective February 27, 1981. Initially,
project implementation lagged behind schedule. This was mainly due to changes
in project scope and delays in procurement of the main civil works.   Actual
project area available for development was lower than estimated at appraisal for
two reasons.   First, a 1981 Government ban on all forest clearing precluded
clearing the wildlife reserve area originally included in the project. Second,
the maps used at appraisal proved to be inaccurate when checked against fully-
controlled project mapping completed in 1982.  By Janu<y 1984, the project was
two years behind schedule; the contract for civil works construction had yet to
be finalized, and disbursements were low: only 10% of the Credit had been
disbursed, as compared with an appraisal estimate of 70%. After the signing of
a civil works contract in September 1984, however, implementation proceeded
rapidly.   Following reassessment (para. 10), and with two extensions of the
closing date, civil works were completed by June 30, 1987, si.x months ahead of
the agreed contract schedule.   A third extension through December 31, 1988
allowed: (a) completion of WUG formation in the Stage I area; (b) continuity of
agricultural extension activities through the model farm and training programs;
and (c) finalization of preparation and design work for Stage II (Cr. 1924-NEP,
which became effective 11/18/88). The project was conmpleted without cost overrun
because: (a) the ci'il works contract was let at 78% of the engineer's estimate;
and (b) funds initially allocated to fellowships were re-allocated to the civil
works category.
10.        Revision.  In light of implementation delays and reductions in scope,
the project was reassessed in February 1984. Reassessment was carried out to
revise the project scope, and to determine the economic viability of a reduced-
scope project. The forest clearing ban and mapping error resulted in reduction
of overall project area by about 2,000 ha net (900 and 1,100 ha, respectively).
The amcnded physical targets reflected the 30% reduction in overall project area
(Table 10). Work on improvement to the main canal including the construction
of sediment ejectors, was dropped because the original design capacity was
adequate to del.Jver the required water to the Stage I area.  It was determired
that the project was still viable (estimated ERR of 17%), and an amendment to
the DCA revising physical targets was issued by IDA in October 1984.   The
amendment was formally agreed to by HMGN in November 1985.
11.        Construction.  Although the project was unable to meet the initial
physical targets set at appraisal, all revised targets were fully met. Both the
area of extension and the number of pilot scheme buildings constructed exceeded
targets (Table 11).
12.        Procurement.   Initially, there was some difficulty in securing a
contractor for main project works. It was agreed at appraisal that LCB would
be utilized for the civil works contract.   However, there were no suitable
responses to the LCB tender and it became clear that local contractors possessed-
neither the expertise nor the experience. In mid-1982, a decision was made to
use ICB. Contractor performance was satisfat-tory, and works were constructed
to internationally acceptable quality. All pilot facilities were constructed
by local contractors with satisfactory results.
13.        Agricultural Extension and Training. Agricultural extension activities
under the MIP have been important to project success. This component was thus



expanded and strengthened under the follow-on projtct (Cr. 1924-NEP). The pilot
farm was established in 1982, but only became fully operable in mid-1986. At
IDA urging, a full-time agricultural consultant was hired in May 1986 to guide
trai-aing and cropping trials.  Performance of the pilot scheme is noteworthy.
Cropping intensity in the 13.2 ha farm is very high (225%) and yields of major
crops exceeded appraisal estimate. A vetiver grass nursery was started in the
command area in 1988 to aid soil and moisture conservation work. Between June
1986 and March 1989, training sessions totalling 224 course-days11, with a total
attendance of 1,848a', were held at the pilot farm.
14.        Many farmers in the project area had inadequate knowledge of water
manag, .ent and irrigated farming practices.   Work on the pilot farms and
dissemination of the results were thus important factors in improving farming
practices  in the commend area.   Courses  in vegetable growing techniques,
important because of HMGN's emphasis on diversification into cash crops,
gene-ated an unanticipated level of interest, especially by women.  While women
constituted only 8% of total participants in training sessions not related to
vegetable-growing, they comprised 94% of the participants in vegetable-growing
courses,
15.        Fellowships.   A major constraint to implementation of irrigation
projects in Nepal has been the shortage of well-trained technical personnel.
Fellowships were thus an important part of the project.  1V4GN agreed during
credit negotiations to implement a fellowship program. IHowever, shortly after
the credit effectiveness, 1'4CGN established a policy of not using Credit proceeds
for training, and was reluctant to start the program. The Bank emphasized the
importance of the fellowship component, but attempts to arrange for the requisite
number of university placements were not successful. In 1983, through a grcnt
to HMGN, UNDP assumed responsibility for a fellowship p.ogram in engineering and
agricultural sciences. At project closing, UNDP had funded 47 engineering and
agricultural fellowships for Nepali students.
16.        Reporting.  As with other projects in Nepal, the performance of HMGN
in fulfill'ng the IDA audit and accounting requirements was weak.   The Bank
repeatedly stressed the importance of timely reporring, but the required
submission of reports within six months after the end of the fiscal year did not
prove to be possible. The DCA was revised in 1988 to extend the submission of
accounts and audits to 12 months after the end of each fiscal year, while still
requiring unaudited accounts to be submitted within six months of the fiscal
year end.
Institutional Performance
17.        Coordination:  Land Clearing and Settlement.    Land clearing and
settlement functions proved to be problematic throughout the project period.
The Committee for Forests, Resettlement, and Irrigation Development (CFRID) in
Kanchanpur District did not function and was replaced by a higher committee from
the Land Settloment Department in December 1985. In spite of this, both tree
1/ Length of duration ranges from one to thirty days.
VI Includes farmers (men and women), lead farmers, WUG leaders, and
field extension workers.



- 5 -
clearing and final settlement proceeded slower than anticipated, and clearing
was not completed until 1988.  The Timber Corporation of Nepal did not have
sufficient capacity for the task, and brush and stump removal was slow throughout
project implementation. Settlement and assignment of land titles was delayed.
At project closing in December 1988, title to 980 ha of land still remained to
be assigned although tLe entire command area has been cultivated by settlers.
This affected the level of water charge collections (para. 23).
18.        Proiect Management.   Overall,  the project organization performed
successfully.   The Engineering Construction and Design (EC&D) unit, although
not part of project organization at the appraisal stage, functioned particularly
well.  The unit was formed during civil works design review and cc.struction
processes.   Project engineers received on-the-job training by working with
supervising engineers from the project consultant. The EC&D unit developed into
one of the strongest components in project management.
19.        Water  Management.    The  project  contributed  to  improved water
management in the commaatd area.  New and improved physical works constructed
under the project, and standardized operation and maintenance procedures both
played a role. The two most significant elements, however, were:
(a) implementation of Rotational Water Supply (RWS) in blocks III and IV; and
(b) formation of WUGs throughout the command area.
20.        In 1985, the Bank advocated a redesign of the water distribution
system in MIP to allow the use of RWS. The recommendation was based on review
of a wide range of irrigation experience in both India and Nepal, and the results
of a system design study conducted in India by a Bank consultant. That review
prompted a decision to adopt a structured, gateless fixed supply system, which
incorporates elements of the warabandi system which has operated successfully
in Northwest India.   The cost of these improvements was relatively small
(US$200/ha) but the improvements in manageability of the system and the
reliability of water supply were spectacular. With RWS design, chaks were to
be between 20 and 30 ha, as opposed to the 40 ha approximation determined at
appraisal. Blocke I and II will be converted to the RWS system as part of the
Stage II works.
21.        Water Users'  Groups  (WUGs).    WUGs  play  an  important  role  in
dissemination of appropriate farming techniques, as well as canal maintenance
and other water management issues. Without effective and functional WUGs, the
RW'S system will not be able to achieve design efficiency.  The project had a
target of forming 915 WUGs; 802 WUGs, or 88%, were achieved by project closing
(Annex A, III). The shortfall is mainly due to delays in land settlement and
title assignment (para. 17).
22.        During appraisal it was agreed that water would only be regularly
available to a tertiary unit after: (a) the WUG had been formed for the unit;
(b) field channels had been constructed; and (c) satisfactory distribution
routines had been established.   Implementation proved this condition to be
inappropriate, as it is difficult to form WUGs prior to the availability of
reliable water deliveries at the farm level.  Once water was available on a



-e -
reliable basis, however, WUGs become important narticipants in the irrigation
system. MIP Stage II has taken account of this._'
23.        Cost Recovery.  The DCA required HMGN to recover from beneficiaries:
(a) the full cost of operation and maintenance; and (b) in progressive steps over
a reasonable period of time, the investment cost of the project. At appraisal,
annual charges were levied on each crop sown (NRs 60/crop/ha). In 1986, this
system was changed to a flat rate (NRs 100/ha/year).  The rate was insufficient
to allow recovery of maintenance costs. At IDA urging, it was raised to NRs
200/ha/year for 1987 collections, which is still insufficient to cover operation
and maintenance cost.   Actual irrigation operation and maintenance cost was
estimated at NRs 280 per ha per year.
24.        Water charge collection efficiency for the MIP is the highest of all
HMGN-managed surface irrigation projects. For fiscal year 1987/88, a collection
rate of 78Z was realized (Table 14). This performance is particularly impressive
given the fact that cost recovery under the project was impeded by: (a) the rate
of settlement and land title assignment; and (b) weak linkages in the
assessment/collection system.  Measures were taken to correct both problems.
Supervision missions emphasized the importance of timely settlement and title
assignment. By project closing all land was settled, although land titling in
approximately 30? of project area land was outstanding. As collection procedures
are based on lists of currently registered land owners, untitled and newly
settled lands are not captured in the water charge process.
Project Results
25.        There are four primary results  from the project:  (a)  increased
cropping intensities; (b) increased yields; (c) increases in incomes as well as
in training and employment opportunities; and (d) increased water management
efficiency. Increased efficiency of water management will be important over the
long run, as efficient uw - of water resources is crucial to HMGN's policy of
agricultural intensifica on.
26.        Agricultural Production.  An agricultural impact study carried out
in 1989 revealed that production in the project area was 89? higher than SAR
projections  of production without the project  (Table 15).   Both cropping
intensity and average crop yields rose in the project area. Average cropping
intensity increased by 40Z, and average yields of padly (improved), wheat and
oilseeds rose by 48?, 64? and 402, respectively (Table 16).  These increases
are attributable inter alia to successful implementation of the farmer training
program at the pilot farm assisted by the agricultural consultant on irrigated
farming and on-farm water management (paras. 13, 14 and 19). Estimates of future
production in the project area (C992/93) are based on yield levels already
obtained by many ordinary farmers in the project area.
27.        Employment and Farm Incomes.  The project created construction and
agricultural  employment.    Short-term employment  of  1,050  laborers  during
construction generated current benefits, but the agricultural employment will
have longer-term impacts.  The agricultural labor requirement in the command
3/For example, intensive training will be focused on WUG leaders who
will teach/demonstrate water management techniques to other farmers
in their respective groups.



area in 1988/89 was 76Z, or 322,100 man-days higher than in 1982/83 (Table 18).
The most recent estimate of farm family on-farm incomes is US$130 per year for
small farms, and an average of US$192 for all three farm sizes (Table 6). This
represents a 10OZ and 192Z increase, respectively, over incomes estimated at
appraisal. The average increment to net benefits is currently estimated to be
NRs 591 per family member per annum (Table 17).
28.        Economic Rate of Return (ERR) .  The appraisal estimate of the ERR
from this project was 142, assuming five years for command area build-up, and
seven years for yield build-up. Although initially there were concerns that a
reduced-scope project would not be economically viable, the 1984 revised estimate
was a 17X ERR, or 13Z assuming ten years (instead of five) for command area
build-up, and seven years (instead of five) for yield build-up. The project ERR
at PCR preparation time was estimated to be 20X, higher than projected under the
most optimistic scenario at reassessment (Table 6(b)). This rate of return is
particularly impressive in light of the reduced project scope, and is largely
attributable to the high levels of incremental agricultural production achieved
in the project area. The increase in crop production is mainly attributable to
a reliable irrigation water supply. This created confidence and motivation for
farmers to participate in farmer training conducted at the pilot farm, and to
follow guidance provided by extension workers. The project management throughout
the project period, conscientiously supported all aspects of agricultural
activities.
Project Sustainability
29.        The  project  had a  significant  positive  impact  on  agricultural
development and farm incomes. The institutional strengthening that took place
during implementation (paras. 13 and 18), particularly the establishment of
effective WUGs, facilitated sustained project operations under public sector
management with increased users involvement. Strengthening bo.h the pilot farm
and the Project Authority under the Stage II project will ensure that local
institutions are in place to maintain the original project momentum. The high
level of water charge collection efficiency (para. 24) should also aid the Stage
II project.
Bank Performance
30.        HMGN started preparing the project as early as 1977, with technical
assistance  from expatriate consultants.   The project was not prepared in
sufficient detail, which resulted in implementation delays (paras. 9-10). The
SAR identified the key project components required to overcome deficiencies in
the existing systems and confirmed the need for the installation of sufficient
control structures to ensure efficient water delivery. The SAR also outlined
a well-balanced development plan for overcoming constraints that could otherwise
impede  improvement of the agricultural performance.   Eighteen supervision
missions visited the project at an average interval of six months. Consistent
Bank staff attention to the proiect was apparent in the supervision reports, and
in the recommendations contained therein. Bank staff concentrated not only on
assuring compliance with Credit covenants, but also on ensuring the quality of
project implementation. The latter is evidenced in recommendations such as a
shift to RWS and preparation of a crop manual for the command area.   The
following lessons may be learned from the project:



- 8 -
(a)    Appropriate farmer motivation and incentives are crucial to project
success. Formation of WUGs is not possible until reliable delivery
of irrigation water has occurred. It is important to form effective
WUGs in time for farmers to be involved in planning and design at the
tertiary level.  This early involvement results in a greater sense
of ownership, and a higher level of participation by farmers.
(b)    The  following  weaknesses  encountered  under  the  project:  (i)
deficiencies in project preparation as evidenced by the mapping error,
which resulted in project revision (para. 10); (ii) overoptimistic
implementation plan which resulted in extension of the closing date
by three years; (iii) inadequate assessment of the relative
feasibility of LCB and ICB civil works contracts (para. 12).  The
latter two can, however, be related to the short experience, at
appraisal time, with implementation of large civil works in Nepal.
Borrower's Performance
31.        Except for the initial delays due to changes in the project scope and
the mode of procurement for the main civil works contract, the project authority
has been successful in implementing the project works.  Table 7 contains the
review of performance of the Borrower.  Except for delays in submitting audited
accounts and audited reports, the Borrower's compliance with the Credit covenants
was  satisfactory.   During project preparation and appraisal,  the project
authority provided all the support needed. After project revisions in late 1984,
project organization was considerably strengthened.  The revised organization
played a major role in assuring the project's successful implementation of the
project.
Project Relationships
32.        Bank relationships with HMGN,  local government and the Project
Authority have been good.
Consulting Services
33.        The  project  consultants  employed  by  the  Mahakali  Irrigation
Development Board (MIDB) provided in-service training, advice and guidance to
project engineering staff in all cycles of the project implementation, as well
as preparation  of bid documents  and evaluation.    Their performance was
exceptionally good, particularly for engineering supervision, developing an
irrigation system operation manual for the command area, publishing a crop manual
for the farmers, and guiding the field staff in conducting the impact study of
the project.   It is noteworthy that the consultants have maintained a good
working relationship with the Project Authority and project management, and also
worked closely with the beneficiaries. The stu.ccess of the project implementation
could not have been attained without the quality of consultant inputs that were
provided during the project.



- 9.-
Project Documentation and Data
34.        Although there were some weaknesses  in preparation  (para.  30),
preparation and appraisal concentrated on the appropriate issues.   The SAR
provided a useful framework for the Project Authority to implement the project,
and for Bank review of project progress. As stated earlier, the submission of
the project accounts and audits within six months after the end of each fiscal
year (para. 16), and the formation of WUGs and construction of field channels
prior to release of irrigation water (para. 30a) stipulated in the DCA were
actually difficult for HMGN to comply with. The data relevant to the preparation
of the PCR were readily available.



- 10 -
PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE
Evaluation of Performance
Bank's Performance
35.        Consistent IDA attention to the project contributed to its success.
While the supervision mission persoiinel were highly qualified in their respective
disciplines, absence of an agriculturalist on early missions was not optimum from
a project perspective. Despite initial delays in implementing civil works, the
project area already under cultivation could well have benefited from
agricultural expertise. This was rectified in later IDA missions, after 1984.
The project appreciated the prompt response and quick action of IDA in helping
solve problems encountered during the implementation, and providing suggestions
for improvement of the system. Without this level of support the project would
not have been able to achieve its revised targets.
Borrower's Own Performance
36.        Overall performance of institutions participating in the project was
satisfactory. During project implementation, the project organization developed
into a strong and competent institution.  Coordination of project management
with other institutions was good. To achieve the revised targets, project staff,
consultant and main contractor coordinated their efforts t) work as a single
team. This enabled the civil works to be completed six months ahead of schedule,
to international quality standards. To achieve the level of collection of water
tax, the project staff have coordinated their efforts with the Land Revenue
Department (LRD), and have convinced farmers to pay the charges. A major factor
in convincing the farmers has been the reliable supply of irrigation water. The
agricultural impact to date has been ahead of the targets, as detailed in the
Agricultural Impact Study Report.   This is due to the level of agricultural
training, extension and demonstrations at the pilot farm. Production of vetiver
grass is underway, as suggested by IDA: vetiver will help in developing low cost,
appropriate protection for drains and canal embankments.
Lessons Learned
37.        In Nepal, any sizeable construction contract should be let under ICB
procedures to ensure quality, price and timely completion. However, to assist
the development of the local contracting industry, maximum use of local firms
as sub-contractors should be encouraged so that local contractors will be able
to rapidly gain the necessary experience.
38.        Participation of the farmers to the extent possible in the planning,
design and implementation of the project is vital to the achievement of the
objectives. In Stage I, farmer participation was initially minimal, and certain
problems arose, which would not have arisen if farmers had actively been involved
at all stages. Farmer participation in planning, design and implementation is
an integral part of Stage II.
39.         Reporting requirements should be reasonable within the domestic
administrative context; requirements which conflict with local practices and
timetables should be avoided if possible. Agreement to unrealistic covenants



- 11. -
in the DCA for the submission of project accounts and audits to IDA can distract
supervision and project management attention from more urgent issues directly
related to project implementation.



- 1.2 -
PART III. SUMMARY OF STATISTICAL DATA
Table 1: Related IDA Credits
Credit Number/         Year of    Purpose of
Project Title          Approval   Project                               Status
373-NEP                  1973     To complete and upgrade 28,700 ha  Completed. Followed by
Birganj Irrigation                 of the Nepal Eastern Canal           Stage II
(Narayani Zone)                   command area and to provide
tubewells north of the canal
617-NEP                  1976      One component provided for           Completed
First Rural                        improvements to small-scale
Development                        irrigation schemes in the Hills
654-NEP                  1976      Development of 64 public tube-      Completed.  Followed by
Bhairawa-Lumbini                  well systems and strengthening of  Stage II
Stage I                            agricultural support services
in the western Terai
812-NEP                  1978      Improvement of Chatra Canal          Completed. Followed by
Sunsari-Morang                    command area, including drainage,   Stage II
Stage I                            river training and sediment
control works (12,000 ha)
856-NEP                  1978      Follow-on to Birganj Project,        Completed. Followedby
Narayani Stage II                  completed deferred work              Stage III
939-NEP                  1979      Included a component for             Completed
Second Rural                       improving hill irrigation in
Development                        the Mahakali Zone
1101-NEP                 1981      Improvement of small farmer          In progress.  To be
Hill Food                          managed schemes totalling            completed in 1990
Production                        about 3,000 ha
1316-NEP                 1983     Completion of Stage I works           Nearing completion. To
Bhairawa-Lumbini                   and introduction of improved         be followed by
Stage II                           designs for construction of          Stage III
38 new tubewell systems
1715-NEP                 1986     Rehabilitation of early blocks        In progress.  To be
Narayani Stage III                 for improved (i) water management  completed in 1994
capacity and (ii) dry season
agricultural production



- 13 -
Credit Number/       Year of      Purpose of
Project Title        Approval    Project                               Status
1727-NEP                1986      Includes construction of 32 and    In progress.  To be
Third Rural                       rehabilitation of 18 existing        completed in 1993
Development                       schemes in the Hills
1814-NEP                1987      Follow-on to Stage I, continuing   In progress.  Will be
Sunsari-Morang                    work on 23,000 ha                    completed in 1994
Stage II
1924-NEP                1988      Follow-on to Mahakali I, to          In progress.  To be
Mahakali Stage II                 extend command area                  completed in 1995.
Table 2: Project Timetable
Date            Date             Date
Item                           Planned         Revised          Actual
Identification (Executive
Project Summary)             02/75                            02/75
Preparation                    03/77                            03/77-11/78
Appraisal Mission              01/80                            01/08-28/80
Credit Negotiations            05/80                            05/20-23/80
Board Approval                 06/09/80                         06/09/80
Credit Signature               09/29/80                         09/29/80
Credit Effectiveness           12/31/80        03/31/81         02/27/81
Credit Closing                 12/31/85        12/31/88         12/31/88
Credit Completion              06/30/86        06/30/89         06/30/89
Table 3: Cumulative Disbursements
FY81  FY82  FY83  FY84  FY85  FY86  FY87  FY88  FY89
Appraisal Estimate (US$M)        0.3   3.8   7.7  11.1  14.6  16.0    -       -     -
Actual (US$ M)                   0.1   0.5   1.2   1.7   3.2   5.2  11.5  13.7  16.0
Actual as % of SAR estimate       33    13    16    15    22    33    72    86   100



- 14 -
Table 4: Physical Achievements
Item             Appraisal   Revised       Actual    Achievement  as % of
Target      Target      Achieved   Appraisal   Revised
IMPROVEMENTS TO EXISTING SYSTEM:
delivery (ha)    3,400.0   2,700.0       2,700.0            79        100
canals (km)
tertiary            -        35.8         35.8            -         100
distributary        -        37.0         37.0            -         100
drainage         200.0      219.0        219.0          110         100
EXTENSION OF SYSTEM:
delivery (ha)    3,200.0   1,900.0       2,100.0            66        ill
canals (km)
tertiary         115.0      170.0        170.0          148         100
distributary       30.0      14.6         14.6           49         100
ROADS:
public (km)          40.0      15.0         15.0            38        100
service (km)         65.0      56.0         56.0           86         100
Table 5: Proiect Costs and Financing
(a) Proiect Costs
(US$ thousand)
ADpraisal Estimate       Revised Estimate          Actual
Category           Local  Foreign Total   Local  Foreign Total         Total
Civil Works
Vehicles &
Equipment       5,421  4,003   9,424   2,662  7,832  10,494            12,872
Project
Administration  1,136    159   1,295       720    180      900             68
Technical
Services           300  1,218   1,518      865  1,635   2,500           3,033
Fellowships           50    934     984        0      0        0              0
Contingencies    3.140  3.140   6.280        893  2.085   2.978                0
TOTAL         10,047  9,454  19,501   5,140 11,732  16,872            15,973
Total Disbursement  15,973
Credit Amount        16,000
Amount Cancelled         27



- 15 -
(b) Project Financing
(US$ million)
Source                       Agreement                Actual           Actual as %
of Agreement
IDA Expenditure
Categories                    16.0                   16.0                100
Domestic                         3.5                    3.4                 97
TOTAL                         19.5                   19.4               99.5
Table 6: Project Results
(a) Direct Benefits
Benefit           Actual
Estimated at      Benefit
Item                                              Appraisal          Achieved
Farm families to benefit:                         2,600-2,800          3,100 -/
Changes in irrigated area:
(a) improvement to existing system               3,400 ha            2,700 ha
(b) increase in command area                    +3,200 ha           +2,100 ha
Increase in production:
(a) foodgrains                                  +120%               +181%
(+7,500 tons)       (+10,040 tons)
(b) all crops                                   +173%               +167%
Incremental farm and self employment:             +53%                +76%
Average increase in per capita income:
Est. from US$65 to US$118 per year              +82%
Achieved from US$65 to:
US$ 130 per year for small farms                                  +100%
US$ 190 per year average all farm sizes                           +192%
a/ Agricultural impact study (1989) reveals that there are more smaller farm
size than assumed in SAR.



(b) Economic Cost nd  anoM tit 5tt*fh
(NRa 000)
mItts                    YOAR 2248  2""6 6   164   6146to 266   161641  in?"  166666  I"M66   m0o2 l wa` I 1maa*  ISt4
wit PP*JGCt 64.f012            MM   Ism o 17426   2146sU   44"6    460t6   4522   u7u   70154  62  228' 284672
*1  s P*j0ct Woltsa           37182  M19    M278   2181   1Lon   1782    2i786   I6S   21021  21324  26128  2136
t._tt~.2.1 AfficwIt'wa 6*1f82 s .1026  .446    14  162   2tM    "Its2  216t0  Into  46027  60901  16021  208S64
RTs
Cael"I £.Peaditre             N00?   7066  41666  26U   646    63144  46i22               0         0     0
96688.0.d ON Cesat               0      0      0      0      0       a      0   2600    Ma0  1600   10    I100
1..si 6...0l Cos"             606    l0s   4166   66    NM         4    46M    16o    6 wo 1600 m10   1600  1600
2NMIDTA NU tElCUC _SflTn     .6106  -1616  -41YI9 -47446  -4144   -4492  .27821  *1lo 0 t412   68402  021  101764
66321                    038  66I    26666   2666   2616  2666 2TT000  80000   202022
628A P,.Joa gaO I%            1426   144144   468122  24600  l266   1s26   268666  I2620
VI,.t Prtjw% 0Its.              6446  N0W    81846   $16   a2ll"   82.1674   St"?   8ld?
2.o,in.tal Agrl.tiI2.,.I Sa@fsol  z1162S6  11#214  11463   1213?4  2161602 01 ism2?  2S   IO8
C.PitaI o*aaditgro               0       0      0       0      0      0       0      0
gt"imd 066 Cat                2O00   1660     2 12600    10    t60    i600   26wlo    2600
1.1.1 eca..iIM CSa   r         1600   1600  1100   2600   1600   1260    2600   1600
wEtAI. IE tCUtC 6owm21        11002  21112   11UU7  22186  227002  226761  2166   2261
EconoMc Rate of Return: 20.192
Underlying Ass=umtions:
1.   The benefit period of  the project  extends  from  1989/90  to 2011/12.
2    All cost  streams have been expressed in 1989 constant prices.
3.   Actual capital costs incurred from 1982/83-1988/89, adjusted to 1989 constant
prices, are the basis for the capital cost stream.
4.   Without  the  project,   cropping  patterns  and  agricultural  production  are
assumed to remain conscant at 1982/83 levels, because (a) farmers in the
project area consist mainly of tharu caste who are only moderately open to
change; (b) most project areas had deeply rooted tree stumps; and (c) the
area is most backward and isolated that hardly any changes could be expected
without the p.oject.
5. Benefits and operating costs are constant after the year 2000.
(c) Studies
Title                        Purpose  as Defined at Appraisal                         Status
Agricultural  and            To provide  a reliable benchmark
Economic                     for future developments  in the                          Submitted
Evaluation  (#1)             project  area  (SAR paragraph  5.13)                     12/83
Agricultural  and            To provide  initial  information on
Economic                     project  impact,  including approxi-                     Submitted
Evaluation  (#2)             mate number  of  farmers provided                        05/89
with improved or first irrigation



- 17 -
Table 7: ComRliance with Credit Covenants
Section     Description of Covenant                        Status/Comment
3.02        Recruit an engineering firm and an             In compliance.
agricultural consultant to assist in
project implementation.
3.03        Appoint project staff in accordance with       In compliance.
a staffing plan azceptable to IDA.
3.04        Carry out a training program for               Deleted, UNDP
engineering and agricultural students.         assumed training.
3.05        Coordinate land clearing and settlement,       In compliance.
complete land clearing.
3.07        Carry out two project evaluation studies       In compliance.
and submit PCR within six months after
final disbursement.
4.01        Maintain separate project accounts, audit    In compliance.
same annually and furnish audit reports not  (See Section I,
later than six months after the end of ea,.h  para. 4.08)
fiscal year.
4.02        Establish and collect water charges to         In compliance.
cover 06M costs and recover, in progressive
steps, the investment cost of the project.
Charges to be reviewed and adjusted at
regular intervals.
4.03        Prepare and furnish O&M manuals for            In compliance.
irrigation and drainage systems.
6.01        Establish a project board and appoint          In compliance.
a Project Manager, senior roads engineer
and Agricultural Development Officer.
Table 8: Staff tnrut (Staff Weeks)
rash       FY78 FY78 FY79 FY30 FY81 FY62 FY83 FY84 FY86 FY36 FY87 FY8S  FY89 FY90 Totel
Prl vppraTi I 7.3  1.9  1.3 21.8                                                   32.3
kpprviseb                 70.5                                                      70.5
F4.gotVatIft               4.9                                                       4.9
sup.rVislon                 .9  4.0  6.2  8.2  12.7 10.0 14.8 12.6 8.8  6.8         85.0
ther-.      .6  1.0    .6 5.2    2          2    .1  .0  .6               .3  .3   9.1
TOTAL      7.8  2.9   '; 1.03.3  4.2  6.2  8.4  12.8  10.1 1S55  12.6 8.8  7.1   .3  201.8
RUN DATE: 04/23/90



- ln -
Table 9: Mission Data
Date      Number of  Man-days  Specializations  Overall
Mission     (mo/yr)      persons  in field   represented _a/  status  /
AppraisAI         01/80     5         55.0       2E,C,A,F        N/A
Supervision 1    11/80      1         0.5           E            N/A
Supervision 2    03/81      2         4.0         C,E              2
Supervision 3    06/81      1         3.0           E              2
Supervision 4    12/81      1         1.0           E              2
Supervision 5    06/82      2          3.0         2E              3
Supervision 6    11/82      4         16.0       E,C,L,J           2
Supervision 7    06/83      i          3.0          E              3
Reassessment      02/84     3         15.0        2E,A           N/A
Supervision 8    03/84      3        18.0         2E,A             3
Supervision 9    11/84      2        12.0          E,A             2
Supervision 10   07/85      1          3.0          E              1
Supervision 11   12/85      3         9.0         E,2A             2
Supervision 12   05/86      2         8.0          E,A             2
Supervision 13   01/87      4        20.0         2E,2A            1
Supervision 14   05/87      1         4.0           A              1
Supervision 15   10/87      1         5.0           A              1
Supervision 16   02/88      1        10.0           A              1
Supervision 17   11/88      1         5.0           A              1
Supervision 18   04/89      1         5.0           A              1
/a  A - Agriculturalist; C - Economist; E - Engineer; L - Loan Officer
J - Legal Specialist; and F - Forestry Specialist.
LW  1 - Problem free or minor problems; 2 - Moderate Problers;
3 - Major Problems.



- 19 -
Table 10: Reassecsment
Original    Revision/a
Item              (09/29/80)  (11/18/85)   Reduct  n
A) Improvements
(ha served)          3,400       2,700          21
B) Extension
(ha served)         3.200        1.900          41
Net Project Area           6,600        4,600         30
C)  Roads (km)
Public                  40          15          63
Service                 65          56          14
/a  Reassessment actually took place in February, 1984.  Changes in scope
were proposed by the Bank in October, 1984, but were not officially
accepted by HMGN until November, 1985.
Table 11: Physical Works by Block
Revised     Area     Achieved
Block     Target    Developed  as % of
Number     (ha)        (ha)      Target
I       1,337      1,525       114
II         695         695      100
III       1,500       1,501      100
IV       1,068      1,079       101
TOTAL     4,600       4,800      104
Table 12: Pilot Scheme Buildings
Unit           Unit        Percent
Specified at    Actually    Target
Building          Appraisal    Constructed   Achieved
Office                1             1            100
Classroom             1             2            200
Housing               3             4            133
Quarters for
Trainees              1             2            200
Storage               1             1            100
Warehouse
(1,000 mt)            1             1            100
Threshing
Floor                 1             1            100



- 20 -
Table 13: Water User GrouR Formation
Achievement
as % of
Block   Initial  RevisedL/  Actual Achievement   Initial Revised
No.     Target   Target    May 87 Oct 87 Feb 88  Target  Target
I         221      225      196    210    210        93      95
II        110      130       61    125    130       100    lib
III       232     336       131    202    238        71    103
IV        234     224        28    130    224       100      96
TOTAL     797      915      416    667    802        88    101
Table 14: Cost Recovery Performance
Collections
Year      Assessment       Rate        Area      Collections    as % of
(NRs)                   Assessed        NRs        Assessment
1984/85     113,159    NRs6O/ha/crop    -          111,345          98
1985/86     113,150    NRs6O/ha/crop    -          110,172          97
1986/87     256,728    NRslOO/ha       2,720       112,607          44
1987/88     544,512    NRs200/ha       2,720       425,673          78
1988/89     735,998    NRs200/ha       3,680       Collection
in Progress
/a Revised May, 1987.
Lb 1,120 ha of newly settled command area is not included.
Source: Mahakali Irrigation Project.



- 21. -
Table 15: Incremental Crop Production
('000 tons)
Actual            Percent
SAR Estimate              Achievement 4/       Change
Actual                      Incre-            Incre-  1979/ FWOP-
Crop     1978/79  FWOP 1/   FWP 2    ment    WP I/    ment   1989  Actual
Paddy      3.75    5.00   10.51    5.51    10.55    5.55        181   111
Wheat      0.80    1.10    3.30    2.20       4.49    3.39      461   308
Maize      1.00    1.60    2.80    1.20       0.55   -1.05      -45   -66
Pulses     0.30    0.50    1.00    0.40       0.33   -0.17       10   -34
Oilseeds   0.30    0.50    1.00    0.50       0.48   -0.02       60    -4
TOTAL    6.15    8.70   18.61    9.81    16.40    7.70        167    89
1J Future without project
2. Future with project
2/ With project
4. Source: Agricultural Impact Study (1989)
Table 16: CroRpina Patterns and Yields
Actual and PCR Estimate c/
At Appraisal    Appraisal    Actual WP    Est. FWP   Percent Change
(1980/81)     Est. of FWP   (1988/89)    (1992/93)   (1981-1989)
Crop   AreaLa Yielda   Area  Yield  Area  Yield  Area  Yield  Area  Yield
Paddy
Local      65      1.2      19   1.9       9   2.1      -     ^     -86    75
Improved    3      2.1      37   3.3      73   3.1     81   3.5   2333    48
Maize        19      1.2      21   2.0      14   1.1       6   2.0    -26    -8
Cotton        -       -       10   1.1      -     -        5   1.7     -      -
Soybean      -        -        3   1.0      -         -    -    -      -      -
Groundnut    -        -        4   1.4      -     -        3   1.8      -     -
Wheat        16      1.1      24   2.1      55   1.8      59   2.6    244    64
Oilseeds     15      0.5      23   0.6      18   0.7      17   1.2     20    40
Pulses       12      0.6      21   0.7      12   0.7      11   1.0      0    17
Potatoes      -       -       -      -       1   8.0       1  20.0      -     -
Vegetable      1     7.0       3  11.0       1   6.3       2  22.0       0   -10
Sugarcane    -        -       -      -       1  30.0       2    -      -      -
Gram-                 -      -          -         -        8   1.0      -     -
OVERALL
CROPPING
INTENSITY    131%           165%          184%          195%          40%
/a Area measured in percent area cropped.
a   Yield measured in tons per hectare.
/c Source: Agricultural Impact Study (1989) and Supervision Report (12/22/88).



- 22 -
Table 17: Incremental Benefits to Farm Families 1/
(NRs thousand)
Small Farm             Medium Farm
Net Benefit      FWOP  88/89 Increment    FWOP  88/89 Increment
Per Family        6.1   9.6      3.5        15.4  25.0       9.6
Per Hectare       5.8   9.1      3.3         4.8   7.8       3.0
Per Family
Member          0.8   1.2      0.4         1.3   2.0       0.7
Table 17 (Continued)
Large Farm                 Overall
Net Benefit      FWOP  88/89 Increment    FWOP  88/89 Increment
Per Family       32.2  51.4    19.2          7.3  12.3       5.0
Per Hectare       4.5   7.1      2.6         5.1   8.5       3.4
Per Family
Member          2.0   3.2      1.2         0.9   1.5       0.6
/1   Farm sizes are defined as follows:  small - less than 2.37 ha; medium -2.58 to 5.10;
and large - above 5.10 ha.  Average household sizes are 7.7, 12.2 and 16.2 members,
respectively.
Table 18: Incremental Agricultural EmDlovment
1982/83                    1988/89          Change   Incremental Labor
Reguired Labor:        Required Labor:        in        Required for
Crop      Area/a  mandays/a  total   Area  mandays  total  Area    Total    Crops
(mandays)
Paddy     2,268   104   235,872   3,569   128   456,832   1,301    220,960
Wheat      1,260    65    81,900   2,451    80   196,080   1,191    114,180
Maize        792    60    47,520       602    65    39,130    (190)    (8,390)
Oilseed      720    45    32,400       731    50    36,550        11       4,150
Pulses       792    35    27,720       473    40    18,920    (319)    (8,800)
TOTAL   5,832           425,412   7,826           747,512   1,994    322,100
Percent increase
from 1982/83 level:   76
/a Hectares devoted to crop.
/h Mandays per hectare.
Source: Agricultural Impact Study (1989).



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