Document of The World Bank Report No: 29310 IMPLEMENTATION COMPLETION REPORT (PPFI-P9600 PPFI-Q0820 IDA-30530) ON A CREDIT IN THE AMOUNT OF SDR 28.8 MILLION (US$ 39.0 MILLION EQUIVALENT) TO INDIA FOR THE KERALA FORESTRY PROJECT June 2004 CURRENCY EQUIVALENTS (Exchange Rate Effective March 2004) Currency Unit = Indian Rupees (Rs.) Rs. 45.50 = US$ 1.00 US$ 1 = Rs. 45.50 FISCAL YEAR April 1 March 31 ABBREVIATIONS AND ACRONYMS ANR Assisted Natural Regeneration CAS Country Assistance Strategy DFEICs District Forest Extension and Information Centers EDCs Ecodevelopoment Committee FMIS Forest Management Information System GIS Geographic Information System GOI Government of India GOK Government of Kerala HRD Human Resource Development HRM Human Resource Management KFD Kerala Forestry Department KFDC Kerala Forest Development Corporation KFP Kerala Forestry Project KFRI Kerala Forestry Research Institute MTR Mid-Term Review NAP National Afforestation Plan NGO Non-Government Organization NTFP Non-Timber Forest Product PA Protected Area PAD Project Appraisal Document PDO Project Development Objective PFM Participatory Forest Management RDF Rehabilitation of Degraded Forests RRB Restoration of Reeds, Bamboos and Canes (Rattan) VSS Vana Samrakshana Samithi (Forest Protection Committee) Vice President: Praful C. Patel Country Director Michael F. Carter Sector Manager Adolfo Brizzi Task Team Leader/Task Manager: Irshad A. Khan INDIA KERALA FORESTRY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 12 6. Sustainability 13 7. Bank and Borrower Performance 14 8. Lessons Learned 16 9. Partner Comments 16 10. Additional Information 21 Annex 1. Key Performance Indicators/Log Frame Matrix 22 Annex 2. Project Costs and Financing 24 Annex 3. Economic Costs and Benefits 27 Annex 4. Bank Inputs 32 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 34 Annex 6. Ratings of Bank and Borrower Performance 35 Annex 7. List of Supporting Documents 36 Project ID: P049477 Project Name: KERALA FORESTRY Team Leader: Irshad A. Khan TL Unit: SASRD ICR Type: Core ICR Report Date: June 9, 2004 1. Project Data Name: KERALA FORESTRY L/C/TF Number: PPFI-P9600; PPFI-Q0820; IDA-30530 Country/Department: INDIA Region: South Asia Regional Office Sector/subsector: Forestry (74%); Central government administration (26%) Theme: Biodiversity (P); Environmental policies and institutions (P); Other environment and natural resources management (P) KEY DATES Original Revised/Actual PCD: Effective: 12/10/1998 12/10/1998 Appraisal: 09/01/1997 MTR: 12/31/2000 02/03/2001 Approval: 03/24/1998 Closing: 12/31/2002 12/31/2003 Borrower/Implementing Agency: Government of India/Government of Kerala/Kerala Forest Department Other Partners: STAFF Current At Appraisal Vice President: Praful C. Patel Mieko Nishimizu Country Director: Michael F. Carter Edwin R. Lim Sector Manager: Adolfo Brizzi Michael Baxter and Ridwan Ali Team Leader at ICR: Irshad A. Khan Chris Keil ICR Primary Author: Joseph G. Nagy (FAO/CP) 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project aims were to implement the Government's National Forest Policy of 1988 and the State Forestry Action Program of 1996. The development objective of the project (PDO) was to assist the GOK in arresting the retrograde trend in forest cover development and improving forest productivity in an environmentally and socially sustainable manner. In addition, the project aims were to improve the standard of living of rural poor in and around forest areas, the majority of whom belong to the poorest and weakest sections of society (including tribal people). The project objectives were to be achieved through (i) improving the forest policy framework and strengthening of institutions, (ii) increasing productivity of natural and plantation forests, and (iii) conserving biodiversity. The original project objectives were not revised. The project objective was clear and highly relevant to the overall development objectives of GOI and GOK and to their forestry policies and programs. The project objective is consistent with the Bank's overall country assistance strategy. The objectives were realistic but complex with respect to the range of policy and institutional improvements that were to be made. While the project components were limited to three, the number of project sub-components added to the complexity of the project., as did the geographic dispersion of project activities. Furthermore, there was recognition at appraisal that the key to achieving the objectives was through an attitudinal change within KFD, particularly with respect to participatory forest management. This also added to the complexity of the project and was demanding on the implementing agency. Despite the complexity, the implementing agency, through the Project Cell, demonstrated the capacity to satisfactorily implement the project which justified the `Low' Overall Risk Rating at appraisal. 3.2 Revised Objective: The original objectives remained the same throughout the project. 3.3 Original Components: The following components were designed to achieve the desired project objectives: (1) Sector Management Strengthening (US$ 7.8 million). Strengthening of sector management through: (a) strengthening policy reform, (b) institutional and human resource development; (c) introducing a Forest Management Information System; and (d) supporting project management at the Chief Conservator of Forests level. (2) Forest Management Strengthening (US$ 33.9 million). Strengthening of forest management through: (a) improving management of natural forests; (b) introducing participatory forest management of degraded natural forests; (c) improving management of industrial plantations; (d) introducing improved quality of planting stock and adapted research; (e) strengthening support for homestead forestry and associated activities; and (f) introducing an improved fire management system. (3) Biodiversity Conservation Strengthening (US$ 5.3 million). Strengthening of biodiversity conservation through: (a) establishing state-wide strategic approach to conservation; (b) strengthening sustainability of Protected Area (PA) system; (c) improving scientific knowledge and public support; and (d) expanding Village Ecodevelopment. 3.4 Revised Components: - 2 - During the February 2001 Mid-Term Review (MTR), several changes were made to each of the three components. l Sector Management Strengthening. Changes included additional vehicles, buildings, training and infrastructure facilities. l Forest Management Strengthening. The three sub-component pilot initiatives of (a) Primary Environmental Care, (b) Tree Management in Public Institutions, and (c) Establishment of Kalady Forestry Study Center were dropped. Implementation attempts were made but stakeholder participation and ownership was less than necessary for the success of the pilot projects. Other changes to the Forest Management component included (i) a 20% increase in targets for natural forest management treatments, (ii) a 35% increase in the targets for industrial plantations of teak and pulpwood, (iii) the introduction of a 20,000 ha area-based management system for natural forests, (iv) support extended to the Kerala Forest Development Corporation (KFDC) for raising 1,450 ha of pulpwood and 50 ha of teak through Participatory Forest Management (PFM) principles, (v) introduction of fire protection through people's participation to cover all divisions, (vi) PFM coverage expanded from 86 to 166 villages, (vii) DFEICs were to be expanded from 6 to 14, and (viii) the establishment of a Forest Seed Center at the Kerala Forestry Research center (KFRI). l Biodiversity Conservation Strengthening. The following changes were made (i) the Ecodevelopment program was expanded to cover Parambikulam Sanctuary, and (ii) a redesigning of landscape management activities to either drop or reduce the scope of various consultancies and rationalization of PAs, and (iii) introduction of the participatory conservation program in non-forest areas. 3.5 Quality at Entry: Satisfactory. Quality at Entry is rated Satisfactory based on: The project development objectives and design are well conceived. They are directly in line with the National Forest Policy of 1988, and the subsequent Kerala State Forest Policy of 1997, as well as supporting the Country Assistance Strategy (CAS) of 1998. As with the National Forest Policy, and based on past project experience, the design and objectives realized the need for a new and holistic approach to development of the forestry sector that recognized the nexus between the maintenance of environmental stability and ecological balance, biodiversity conservation, increasing forest cover, improving forest productivity, and improving the living standards of rural poor associated with the forests. The holistic approach was also highly appropriate for the forest conditions in Kerala, where natural forest has a high degree of biodiversity, often occurring on steep, hilly country with high rainfall and is under pressure from one of the highest rural population densities in India. It also recognized, based on lessons learnt from earlier projects, the importance of early action on policy and institutional improvements to underpin forest management and biodiversity conservation field operations. The project underwent a thorough preparation and appraisal which showed an understanding of the key issues and involved the KFD so that a sense of project ownership was engendered. The design considered the weaknesses within the KFD and made compensation for this through technical assistance and training. The design correctly identified a series of interventions to achieve the PDO, including improvements in forest technology, supported through applied research; involving local rural communities, including the more vulnerable groups, in a program of participatory forest management and ecodevelopment, recognizing that the accumulation of social capital was important to sustainability of the venture; and improving extension services and removing disincentives to promote forestry production by the private - 3 - sector outside the forests. At the same time it recognized the need to radically alter the mindset of KFD staff from regulatory to a partnership approach to forest management and conservation with local communities. It also recognized the importance of a more site specific bottom-up approach to forest management planning within KFD. Innovative landscape planning was undertaken to improve the management of biodiversity both inside and outside the protected areas. The Project preparation was undertaken by the Bank by hiring a consultancy firm. However, the consultant's preparation was without adequate interaction with KFD and had several unacceptable aspects. The project design included over-reliance on consultancies particularly in the initial stages of the project implementation which ill-considered given the limited capacity of the KFD to effectively manage such consultancies. On the other hand, management of industrial plantings could have been better rationalized to wood product market projections. There could also have been more emphasis on improving the management of plantations including better site to species matching for both teak and pulpwood species, and the management of sites under teak so as to maintain site quality. A more realistic assessment should have been made of the institutional requirements and manpower needs to manage biodiversity within the state, including the 78 percent that occurs outside of designated forest areas. There could also have been more thought given to the alleviation of conflicts arising from increased losses to forest dwellers from animal damage within PAs and adjoining areas. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Satisfactory. The project has achieved its objectives to the extent possible within its limited timeframe and considering both the extent of the forest resource in the state and the long-term nature of forest management and biodiversity conservation. It has provided a substantial institutional base and developed improved processes, systems and skills required for implementation of the new GOK forest sector policy and laid a framework for investments in the sector as was envisaged in the PAD as the first four-year stage of a ten-year investment program. But through GOK management, initiative and financial support it has already commenced such second stage investment. (a) Improving the forestry policy framework and strengthening institutions Highly Satisfactory. The project has made considerable progress towards improving the forestry policy framework and the strengthening of institutions. This objective has been achieved through (i) policy reform by adopting and implementing a sector wide strategic forestry plan that provides comprehensive policy guidelines for the forestry sector. Action plans for sector reform have been completed, and a series of Government orders and ordinances notifications issued, the most notable for a termination of the subsidy for industrial raw material over five years, legislation to facilitate the promotion of tree growing on private land, implementation of the state wide Biodiversity Strategy, and introduction of a participatory forest management system. The adoption of the forestry policy strategy will serve as a platform for guiding future sector policy reform; (ii) Revolving fund set up though the project intervention with contribution from teak and pulpwood harvest sale is providing financial resource for plantations and their maintenance. (iii) the adoption and implementation of the 2002 HRD plan and the ear-marking of annual KFD budget funds to carry out the plan. A large number of training programs, workshops and study tours were undertaken for both specialized training and for management and computer training. HRD training, workshops, and study tours were also made available for PFM participants and Farmers. This has substantially increased the human capital of the KFD as well as other stakeholders to undertake existing and proposed programs; - 4 - (iiiiv) the establishment of a Forest Management Information System (FMIS) and a FMIS cell which has resulted in the potential for much improved data compilation and management. The FMIS has improved accounting and budgeting through the introduction of the Financial Accounting System. A Geographic Information Systems (GIS) has also been introduced for data processing and packaging. Moreover the project supported technological improvement, computerized accounting and financial management system, site-specific planning for treating forest lands and raising plantations were mainstreamed into the working of the KFD. (b) Increasing the stocking and productivity of natural and plantation forest Satisfactory. The project has made significant progress towards arresting the retrograde trend in forest cover through the implementation of a series of treatment practices in natural forests. These were designed to assist the regeneration of these forests by promoting and protecting natural regeneration of desirable tree species, reeds, bamboos, canes, and non-timber forest products (NTFPs) from fire and biotic destruction, supported, where necessary by the planting and maintenance of such native species Initially, such treatments were undertaken on a scattered basis, but, following the mid-term review, and the recognition of the major importance of water conservation, a micro-watershed approach was taken, combining treatments for forests in different categories of degradation. Although it is too early to assess the full impact of the treatments on the forests, there is, nevertheless, clear evidence from sample plots showing a significant increase in regeneration. There has been at least a 50 percent increase in fresh and established seedlings and saplings in over 50 percent of the sites, while many sites showed an increase of over 100 percent even at this early stage. With the expected continued protection this regeneration will result in much improved high forest cover. Field studies show that soil conservation has markedly improved with some 200,000 cum of soil being retained through soil and water conservation works within the treated forests. There has been a dramatic reduction in the occurrences of fire in the forest since the introduction of participatory fire protection programs under the project, while those forest areas covered by participatory forest management programs show a considerable decrease in the number of offences related to illegal harvesting of forest products, including killing of wildlife. An encouraging aspect of such forest management is the planned expansion of the program by the KFD following the project. A solid technical basis has been provided through the project for sustainably improving productivity in forest plantations. This has involved the development and use of improved planting material, including establishing sources for improved genetic quality seed for teak and pulpwood species as well as establishing the capacity to provide clonal planting materials for pulpwood species. Nursery technology and management was upgraded with the introduction of root trainers and the construction of one central nursery for each circle. As a result of these improvements planting materials are of higher quality and vigor compared to prior to the project and field survival has improved from approximately 60 percent to over 90 percent with generally better growth in the early years. Although it is too early to predict accurately the impact on teak plantation development, nevertheless, the improved genetic quality of seed and survival plus early growth in some areas should give improved yields, and sample plot data does indicate an improvement inn site quality. On the other hand, growth in pulpwood plantations is showing definite and much improved yields over earlier plantations on the same site; average annual growth of approximately 22 cum/ha/year over a six-year rotation is predicted versus 4 cum/ha/year pre-project, resulting in potential yields of 130 cum/ha of pulpwood at six years versus previous yields averaging 30 cum/ha after eight years for the first rotation and subsequently decreasing. Total annual yield from the 6,540 ha of pulpwood plantations established under the project is projected to be 131,000 cum. In addition to the plantation development, improved tree cover and timber production has been promoted through an enhanced extension program and training supporting small-scale private forestry production, which - 5 - contributes some 50 percent of current industrial wood production. However, greater emphasis should have been given to this sub-component during implementation given the potential for future impact on wood production. The introduction of a participatory approach to forest protection and management has not only shown a positive contribution to improving forest cover and potential yield, but has already given indications of a sustained improvement in the livelihoods of the rural communities involved. The adoption of PFM was slow for the first three years of the project, but it eventually considerably exceeded the target number of Forest Protection Committees (Societies) or Vana Samrakshana Samithi (VSS), with a total of 36,500 families being involved, many of whom would be considered to be poor and marginal, including 10,000 families of tribal communities and 4,000 families of scheduled castes. PFM has provided additional income to these families through wage employment for forest management and protection, but, in many cases has also provided a basis for future income generation through forest-based activities and eco-tourism. There is also evidence that the establishment of the VSS has provided a sense of empowerment to the communities resulting in additional funding and the fostering numerous self-help groups. Women are major recipients of livelihood benefits. Although it is too early to assess the full impact and sustainability of the program, the initial indications from field visits, a formal evaluation and anecdotal evidence suggest that the PFM should, by and large, successfully protect and manage the forests as well as provide improved livelihoods to the communities involved. The continuity of the program under the National Afforestation Program, coupled with positive attitudinal changes amongst both communities and KFD towards participatory management of the forests, should help with sustainability of the program. The above developments in forest and plantation management are underpinned by positive institutional changes that have occurred through the project. These include the introduction of bottom-up, site specific planning that more realistically reflects particular site conditions and silvicultural requirements, the widespread acceptance by KFD staff of improved plantation nursery and silvicultural technology, an overall improvement in data compilation, management and distribution, improved communications, a widespread acceptance of the value of involving local communities in forest management, and the dissemination of applied research results. (c) Conserving Biodiversity Satisfactory. Despite initial difficulties, the project has made reasonable progress in implementation of the biodiversity conservation component. In particular, the development of a State wide strategic approach to conservation provides an excellent prioritization of conservation areas and actions and could serve as a valuable tool for future decision making in the state. All PAs within the state which constitutes 22% of vegetative cover have approved management plans which now provide the basis for the scientific management of these areas. . The protection and conservation of biodiversity with the participation of local people (through ecodevelopment) which to some extent has helped in controlling forest fires and forest offences has not benefited from the lessons and experiences of the very successful model that was piloted in Periyar Tiger Reserve under a separate project. The biodiversity assessment outside PA areas has also been made through consultancy studies. The review study of wetlands of the state is a pioneering activity that has helped identify 16 important wetland habitats e rich in biodiversity resources and 3 of them have already been identified as Ramsar sites which are internationally recognized habitats for the conservation of wild water birds. Likewise, rich mangrove forests have been notified under the Kerala Forest Act, 1961, to protect such areas legally. The pilot special area management plan developed for one wetland site provides an opportunity for its conservation through participation of community groups. Some sacred groves which are rich in biodiversity are now - 6 - being managed with the help of local people and NGOs where the KFD is coordinating the program for biodiversity conservation with various schemes such as bird watching, nature camps and other educational programs. Such awareness and educational programs will further strengthen KFDs initiatives on biodiversity conservation. District forest extension and information centers (DFEIC) are at present actively involved in biodiversity conservation and have trained over 1,000 participants in all Districts of the State. The pilot conservation and sustainable use of medicinal plants program has provided a valuable experiment in ensuring economic benefits to tribal groups in return for their conservation efforts. 4.2 Outputs by components: Satisfactory. The overall outputs rating is Satisfactory as both PAD and revised MTR target (outputs) have been achieved. (1) Sector Management Strengthening The outputs under this component are highly satisfactory and met both PAD and revised MTR targets. l Strengthening Policy Reform. Annex 1A of the PAD sets out a matrix of forest sector reforms to be undertaken through the project. These were further developed into a reform action plan through a consultancy study. A Vision Paper, prepared prior to negotiations, was adopted as GOK policy and strategy providing comprehensive policy guidelines. A study was conducted through a consultancy that reviewed the policies and institutional structures of KFD and the Kerala Forest Development Corporation (KFDC). Action plans were then prepared for sector reforms and most of the stated reforms have been completed. The key policy and institutional reforms enacted were (i) orders terminating subsidies on industrial raw materials over a five year period ­ subsidies have been decreased by 90% and all subsidies will be removed by October, 2004, (ii) liberalization of the regulatory framework through comprehensive legislation for promoting tree growing on private land and easing out regulations on felling and transport being promulgated, exempting 61 species from Timber Transit Rules, (iii) State wide Biodiversity Strategy and Wetlands Conservation Strategy and action plans developed and being implemented, (iv) Planning Wing under Chief Conservator of Forests (planning) established, (v) internalizing of site specific planning and micro-planning initiated to improve the planning process within KFD, (vi) a new FMIS was implemented, (vii) introduction of a new forest management system through a stakeholder (tribal and rural communities and KFD) participatory process that allows for Ecodevelopment, NTFP management, conservation, and special habitat management programs. l Institutional and Human Resource Development. An HRD plan was prepared in August, 2002 based on a training needs assessment consultancy report. The HRD plan has been implemented under a newly created post of CCF (HRD). HRD has been institutionalized by earmarking 2% of the annual KFD budget to HRD. A large number of training programs, workshops, and study tours have been conducted (see Annex 1). With the exception of international study tours, all programs have met their targets. More staff would have participated in international study tours but the project had difficulty obtaining authorization from GOK. In addition to management training for KFD, a large proportion of HRD resources went into specialized training for FMIS, PFMS, GIS, ecodevelopment, wildlife management, biodiversity conservation, extension, nursery, and soil and moisture conservation. Resources were also devoted to PFM (168 programs and 5,688 participants) and to training Farmers (124 programs and 10,044 participants). l Forest Management Information System. Although an FMIS manager was hired in the first year of - 7 - the project there was a serious delay in hiring consultants to develop the FMIS software, until early 2001. This has affected full testing and implementation of most of the 15 modules, though the Financial Accounting System has been adopted as the departmental accounting system with approval from the Accountant General. Data entry for five divisions is now being done for the plantation module and plans have been costed in the FY 2004-05 state plan budget for data entry in all divisions for the key modules. The FMIS together with the establishment of an FMIS cell and the mainstreaming of the technology within KFD provides the potential for much improved data compilation and management. KFD staff have been trained in computer literacy, the use of the FMIS and data entry as well as in trouble shooting for software and hardware. The system is now installed in computers in all divisions and some range offices, with all range offices being supplied with computers and all divisional offices connected to the internet, thus greatly facilitating the flow of information. Considerable work has also been done with Geographic Information Systems (GIS). All topo sheets covering forests in Kerala have been digitized giving 23 layers of information. GIS equipment and human resource capabilities within KFD have been strengthened to support a wide range of GIS activities supporting forest management and planning. l Supporting Project Management. A Project Cell with competent leadership and staff was formed and operated throughout the life of the project. The Project Cell effectively supported project implementation and adequately handled procurement, consultancy contracts, accounting, establishing the GIS and MIS systems, HRD, and monitoring. The Cell was instrumental in carrying out the institutional reforms. The Cell also had a good working relationship with KFD Units, GOK, GOI and the World Bank. (2) Forest Management Strengthening Satisfactory. The outputs under this component are satisfactory and in several instances have considerably exceeded both PAD and revised MTR targets. l Improved Management of Natural Forests. An initial set of guidelines were established for the various silvicultural treatments, and soil/moisture conservation works, but after four years of experience, lessons learnt were incorporated in a new set of more cost and silviculturally effective guidelines. Although the total area covered by the treatments was only 70,800 ha compared with a total of 191,000 ha of degraded forests and 365,000 ha of less disturbed forests, KFD has already planned and budgeted for expansion of the treatment practices beyond the project. (i) assisted Natural Regeneration (ANR). In forests with reasonable canopy cover, but uneven stocking of trees and insufficient natural regeneration a program of protection and natural regeneration promotion was undertaken over 22,890 ha as against a PAD target of 23,000 ha. Sample plots show a significant increase in regeneration and sapling growth. (ii) Regeneration of Degraded Forests (RDF1 and 2). In forests degraded through excess removal of trees and damage caused by fire and biotic influences as well as degraded plantations a more intensive rehabilitation program was undertaken in 14,520 ha against a target of 9,000 ha. The early results again show significant increases in regeneration together with improvements in soil and water conservation. (iii) Restoration of Reeds, Bamboos and Canes (Rattan) (RRB). In forests where poor management and overcutting has led to depletion of reeds, bamboos and canes, the project has undertaken a program of protection and planting to rehabilitate the resource over 7,200 ha, compared with a PAD target of 4,700 ha. Survival of planted stock averages 85 percent and incidence and growth of natural regeneration is satisfactory. (iv) Micro-Watershed-Based Management. Introduced at the MTR, this more holistic approach to managing forests on a watershed basis covered a gross area of 26,185 ha with a mixture of the above treatments and plantations over 10,086 ha against a MTR target of 20,000 ha and 10,000 ha - 8 - respectively. l Participatory Forest Management of Degraded Natural Forests. This component had a slow start (20 out of a project target of 86 communities operational at MTR), which was somewhat justified by the pilot nature of the sub-component, the importance of re-orienting and training KFD staff in PFM, and the need to develop appropriate participatory approaches where, unlike other states, many forest related communities do not have a heavy dependence on the forests for livelihoods. However, following this initial cautious start, the project eventually exceeded the PAD target during the one-year extension, having formed 356 VSS, of which 213 had prepared and were implementing microplans. The total area being managed and protected through project-initiated PFM is 151,090 ha, compared with a PAD target of 12,400 ha. There are 50 tribal/forest communities (PAD target 33) protecting and managing an area of 104,670 ha, and 163 fringe communities covering 46,400 ha. The former cover larger areas from where, in many cases, they have traditionally collected NTFPs. KFD has adopted an intelligent institutional approach to PFM that enables close support to individual VSS. Although the formation of VSS and the implementation of microplan activities is still very new and there are indications that full understanding of the PFM concept and the microplan is yet to be achieved amongst many VSS members, there have already been significant impacts observed, including greatly improved protection against fire and biotic influences, enhanced incomes through forest protection and management activities, and the development of forest-related income generating enterprises. l Improve Management of Industrial Plantations on Reserve Forest Land. The project has successfully established 2,330 ha of teak plantations, using improved planting stock, seeds of known genetic quality and improved silvicultural practices, against a PAD target of 1,800 ha. A total of 6,540 ha of pulpwood plantations using Eucalyptus species clonal material and root trainer seedlings of Acacia mangium and A. auriculiformis were also successfully established by KFD and KFDC with highly satisfactory survival rates and growth rates that substantially exceed previous pulpwood plantations. The PAD target was 3,700 ha. The greatly improved pulpwood growth rates mean that the rotation may be further reduced from six to five years or a commercial pulpwood thinning done, particularly in Acacia plantations after three years, adding to productivity. Productivity has also been improved in the teak plantations through the undertaking of project-funded silvicultural thinnings of 2,190 ha in the last year of the project. KFDC has established 19 plantation protection societies covering 1,620 ha of the pulpwood plantations established under the project following the MTR. This has financially benefited these rural communities through entry point and protection payments. However, sustainability of the program beyond the project funding will depend on alternative sources of funding or the willingness of society members to wait for the 10 percent of net profit after harvesting of the pulpwood. l Introducing Improved Quality Planting Stock and Adaptive Research. (i) Improved Planting Material. The KFD adopted, at an early stage, the concept of improving planting materials and nursery management through the introduction of root trainer technology and the production of clonal planting materials, as well as centralizing the nursery production. Five central high tech nurseries were constructed, which produced a total of 15.3 million seedlings for pulpwood and teak plantations. To ensure a high productivity through genetic control 288 ha of seed production areas, 5 ha of clonal seed orchards, and 12 ha of seedling seed orchards were established for plantation species together with 18 ha of clonal multiplication areas for clonal planting material. To further ensure the supply of good quality seed a Forest Seed Center was established jointly with KFD and KFRI. Although such a center should have been established early in the project, it only became operational in the extension year (2003) and is in the process of developing germination protocols and certification processes for the future supply of all seed for government and private plantings. (ii) Applied Research. In addition to - 9 - conducting research to determine optimum root-trainer technology and assisting with the adoption of clonal propagation of both pulpwood species and teak, KFRI completed 14 research projects related to project activities. Reports have been published, though the results have not been widely disseminated as yet. However, KFRI has set up an information network to disseminate all research findings. Included in the programs was a Wood Balance Study, containing useful information on demand and supply of wood products as of 2001. However, projections for such demand and supply for future planning would have been useful. An Outlook Study for the Forestry Sector is too narrowly focused on conservation, with little consideration for production forestry. A further 20 short-term projects on subjects related to the project have also been completed, including the development of volume and yield tables for Acacia pulpwood species. l Support for Homestead Forestry and Associated Activities. The project has established 14 District Forestry Extension and Information Centers (DFEICs) in each of the State's districts. The original target was for six. Prior to the project forestry extension was poorly implemented. Under the project an extension strategy has been developed for each district with KFD staff developing a much improved rapport with households and farmers. Printed and audio-visual publicity has been undertaken. Some 8,000 farmers including 3,600 women, have been trained in improved nursery practices and farm forestry. The DFEICs are now not only providing useful outreach and extension services to private smallholders, but also acting as a focal point and catalyst for a number of farm forestry and awareness programs outside reserve forests. Panchayat Forestry Committees have been set up with KFD assistance. Women, particularly from the poorer sections, have been specifically targeted through programs like Kudumbasree (Disadvantaged Women's Self Help Group). Numerous self-help groups have been formed in 207 out of 990 panchayats, and, following the establishment of 14 model nurseries, such groups have established, with limited project inputs, over 120 private nurseries with a production capacity of some 5,000 seedlings each. Some 7,000 farmers/homeowners have been trained. However, further improvements in extension are still needed. l Introduction of Improved Fire Management System. A state wide Fire Management Strategy was developed and adopted. It emphasized that fire management had to change from being reactive to preventative and that local people should not be regarded as offenders, but as stakeholders and necessary partners in fire management. The project then supported the development of Fire Management Plans in eight divisions most severely affected by fires versus five targeted in the PAD. Awareness campaigns were undertaken. But, probably the most effective fire protection and management strategy adopted during the project was the establishment of an innovative program organizing local communities into Fire Protection Committees. Paid for their services through the project, by 2002/03, 453 such committees provided a more cost effective protection for 115,000 ha of forests, with a greatly reduced incidence of fire than previous KFD programs. (3) Biodiversity Conservation Strengthening Satisfactory. The outputs under this component are satisfactory and met both PAD and revised MTR targets. l Establishing State-wide Strategic Approach to Conservation. Strategic plans for biodiversity conservation were made using a holistic approach. Biodiversity indicator values like species richness, endemism, unique ecosystem, density of threatened and endangered species were considered for habitat characterization and to establish species-habitat relationships. A biodiversity conservation strategy and action plan have also been completed. Nine landscape units have been identified to link PAs and special conservation areas outside PAs. Special focus has been given to wetlands and 16 wetland areas have - 10 - been identified in the state and comprehensive inventories made for the preparation of the wetland-management plan. Three of the wetlands in Kerala have also been given the "Ramsar" site status under the wetland conservation program of GOI. l Strengthening Sustainability of PA System. (a) Development of Management Plans: Under the project, all 13 PA management plans have been written and approved for implementation. For the first time, the plans were made through a consultative process which will have wider acceptability from all stakeholders. (b) Special Habitat Management: Under this program, several schemes were identified such as sea turtle conservation, and conservation of waterfowl habitats. Most of the schemes were implemented in partnership with NGOs and local people where KFD coordinated the program implementation and provided all facilities. In the past, KFD had a limited involvement in Special Habitat Management but through the project it has gained new experience working with the people. Likewise, conservation of sacred groves, the awareness program on biodiversity conservation and several schemes on participatory conservation programs have been implemented in partnership with local communities and NGOs. (c) Upgrading Infrastructure in PAs: The project supported PAs in terms of required buildings, vehicles, communication facilities, interpretative materials, camping gears, and audio-visual equipment which will help to greatly improve PA management as outlined in the management plans. The staff feels more encouraged and confident. l Improving Scientific Knowledge and Public Support. Through a consultancy, a good database on biodiversity issues has been completed and a benchmark study has been made on special conservation areas such as mangrove, wetlands, sacred groves and critical habitat of endangered species in managed forests. Effective awareness programs through interpretative centers, nature camps, and special workshops were conducted involving NGOs and local institutions like school and colleges. Several interpretative materials on biodiversity conservation have also been made. R&D institutions like Tropical Botanical Garden Research Institutes (TBGRI) and the Science and Technology and Environment Department gave technical and scientific advice based local knowledge on sustainable use of medicinal and aromatic plants. This synergy between the tribal and scientific communities has given a needed boost to improve the economic status of forest dwellers and for the sustainable use of forestry resources. The Project also supported sacred groves, which were maintained traditionally by the community or by joint family initiatives. These sacred groves were in various stages of degradation because of changes in land use and the break-up of the joint family system. The inventory of resources, protection, and management has been implemented in partnership with NGOs and local villagers. l Expanding Village Ecodevelopment. Forty-four Ecodevelopment Committees (EDCs) were formed as registered societies against the PAD target of 30 and MTR target of 38. An estimated 2585 families have benefited under the program through medicinal plant cultivation and processing, promoting handicrafts, eco-tourism, cloth making, rubber rolling, and notebook making. This has given them an alternative source of income and reduced their dependency on forest resources, although the sustainability needs to be ascertained. From the proceeds, most have repaid their credit loan and are sending their children to better schools, repaired their houses, and some have purchased TVs. Some EDCs have applied for credit from the Cooperative Bank. The Ecodevelopment initiative has been institutionalized through the EDCs and has helped forest protection in PAs by reducing fire damage and controlling animal and wood poaching. However, the negative impact on communities from wild animal encroachment (elephant, wild boar, deer and monkeys) due to the increase in EDC community agricultural production needs to be urgently addressed. KFD has implemented a consultancy study on socio-economic status and ecological dependencies of communities living in and around PAs. 4.3 Net Present Value/Economic rate of return: - 11 - The overall project economic rate of return (ERR) is estimated at 25% (NPV@12% = Rs. 2,580 million or US$ 57.3 million) compared to 12% (NPV@12% = Rs. 40 million or US$ 1 million) estimated at appraisal. This confirms the satisfactory economic performance of the project. The estimated ERR for NFM, PFM and Teak and Pulpwood sub-components is 19% (10%), 32% (13%), 34% (20%) and 35% (38%) respectively (appraisal figures in parentheses). The ICR ERRs are higher than at appraisal because (i) actual establishment costs/ha for planted or restored hectares were substantially below appraisal estimates, and (ii) in most cases, projected yields used in the ICR analysis are higher than the yields anticipated at appraisal. Including environmental benefits in the analysis in terms of carbon sequestration adds about 1% to the overall ICR ERR. The ERR is not sensitive to a decrease in product price or a decrease in NTFP and wood product yields. Both prices and yield would have to decrease by about 45% before the overall ERR switches to less than 12%. Further details are given in Annex 3. 4.4 Financial rate of return: Participatory Forest Management: The average net revenues from NTFPs and wood production have more than doubled (increased by Rs. 8,486/ha or US$ 189/ha) because of PFM. In addition, income has been increased through direct payment of wages for forestry work and protection and other income generating activities as prescribed by the VSS micro plans. It is estimated on average that the potential income for each PFM household has increased by Rs. 25,000 and is sufficient incentive for VSS participation in PFM. Plantations: Both teak and pulpwood plantations show a good financial rate of return and confirm the appraisal return estimates. The incremental net revenues generated from using new technologies from the project indicate a FRR of 36% for teak and a FRR of 46% for pulpwood. 4.5 Institutional development impact: Substantial. There has been a high degree of institutional development impact through the project, brought about by the improved focus on the management of human resources and needs related training particularly if one considers the deficiencies in KFD capacity prior to the project. In addition, the adoption of a bottom-up, site specific planning approach to forest management provides more realistic operational management, while the introduction of an FMIS and networked computer capability to range level enables much improved data management and communications. The project has also substantially improved the capacity of KFD to undertake and support participatory management and conservation of forests as well as to provide technical outreach to smallholder forestry production. There is also substantial institutional development of communities involved in the participatory management of forests and conservation of biodiversity, that has helped to improve community livelihoods and act as a catalyst for further community development. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The Government of Kerala faced a serious fiscal crisis during 2001-2003 which affected timely release of counterpart fund for implementing field project activities. This was beyond the control of the government or its implementing agency. However, the government and the implementing agency remained fully committed to the project objectives and made special provision for project funds. The delay caused due to completion of sector study by the consultant was also outside their control. - 12 - 5.2 Factors generally subject to government control: Delays in the release of counterpart funds due to chronic fiscal problems within the State adversely affected time-bound forestry field operations on several occasions, resulting in annual targets not being met or sub-standard planting taking place, that adversely affects future plantation yields. On the other hand, the commitment of the GOK to the project in particular and forestry sector development in Kerala in general as demonstrated in its readiness to adopt or revise policies and regulations that improved HRM, facilitated forest operations and provided incentives to small-scale private sector forestry greatly assisted in the satisfactory implementation of the project. In addition, the willingness of the GOK to include provision in the Tenth Five-Year Plan for continuity and expansion of the programs instigated under the project will help to ensure not only sustainability but mainstreaming of project achievements. The availability of funding under GOI sponsored National Afforestation Program will also assist with ensuring sustainability of PFM program. 5.3 Factors generally subject to implementing agency control: The maintenance of a project cell, fully and competently staffed from the start was a key factor for ensuring the satisfactory implementation of the project. At the same time the willingness of the KFD to adopt new and improved operational management and information systems as well as to readily recognize the importance of improving technology also played an important role in achieving and even exceeding the required impact. Technical and management initiatives taken by KFD officers have also helped to enhance the project outputs and outcomes. 5.4 Costs and financing: The Credit Effectiveness date of the KFP was December 10, 1998 and it was scheduled to close on December 31, 2002. The original four-year project was extended by one year to December 31, 2003. The total project cost including physical and price contingencies at appraisal was estimated at US$ 47 million (Rs. 1,824 million). IDA assistance was to be US$ 39 million (Rs. 1,520 million) amounting to 83% of total project costs. The GOK contribution was to be US$ 7.5 million (Rs. 290 million) amounting to 16%. Beneficiaries were to contribute the remaining US$ 0.5 million (Rs. 20 million) which represented about 1%. The total project cost at the closing of the project at 31 December, 2003 is estimated to be US$ 36.0 million and represents 76.6% of the estimated cost at appraisal. IDA assistance was US$ 29.3 million or 75% of the estimate at appraisal. The GOK contribution was US$ 6.7 million The reasons that final total project costs are lower than at appraisal are (i) favorable exchange rates, (ii) rationalization of (consultancies were dropped or reduced in scope), (iii) reduction in the costs of equipment ­ especially for computers, (iv) lower than anticipated field implementation costs, and (v) non-utilization of contingency provisions. In addition, HRD funds were not fully utilized, particularly for international training. 6. Sustainability 6.1 Rationale for sustainability rating: Likely. The project has laid a solid institutional platform for continuity of the forest management and biodiversity programs instigated during the project. Government commitment as shown in the widespread adoption of improved operational management norms, such as site specific planning and FMIS, supported by a need based training program, and the mainstreaming of project developed activities into the KFD's operational program beyond the project with funding being provided gives a confidence that project - 13 - generated achievements will be maintained. A series of Government Orders issued during the project provide a sound basis for sustaining many project achievements including the promotion of private forest production, maintaining financial support for HRD, the participatory management of forests, conservation of watershed forests and eco-development. The development of good working relations between KFD and other line organizations, NGOs and institutions will help maintain support for biodiversity and eco-development. The instigation of the revolving fund for continued plantation development and maintenance will help to ensure that not only will plantations developed under the project be maintained but that further plantation development will occur using the improved technology developed through the project. Forest management and protection techniques have been tested under the project and refined systems adopted for future forest rehabilitation and management programs being funded by state funds beyond the project. Although sustainability of the PFM and EDC program has yet to be proven, the indications are that such sustainability is likely given the changed attitude and application of the KFD staff and the acceptability of the concept among rural people, who seem to maintain a vested interest in protecting local forests although many are not heavily dependent on such forests for their livelihoods, while other more disadvantaged groups do have such a livelihood interest in future forest protection and management. The development of income generating schemes plus the application National Afforestation Plans (NAP) funds through the formation of Forest Development Agencies ensures financial sustainability for most such communities for the foreseeable future. 6.2 Transition arrangement to regular operations: Most of the project generated activities are being adopted into the regular operations of the KFD and incorporated into the Tenth Five-Year Plan with funding specified, including HRM, consolidation of FMIS, natural forest management, PFM, improving productivity of plantations, fire protection, strengthening the sustainability of PAs, and support to EDCs. Funding is also being provided in the approved planned budget for 2004/05 for these same activities. Work is currently underway to integrate all VSS into the NAP to ensure funding for participatory forest development and management continues. The positioning of key staff to FMIS and social forestry/extension will provide the necessary continuity to these programs. Many of the performance indicators used under the project will be maintained to monitor progress and sustainability of programs. 7. Bank and Borrower Performance Bank 7.1 Lending: Preparation and Appraisal. Satisfactory. The Bank's performance through project preparation and appraisal was generally satisfactory. It ensured that the project was consistent with the CAS, and the policy framework of GOI and GOK. It ensured that a project with highly relevant objectives and the necessary components was appraised, while taking into account the capacity of the implementing agency to undertake the project effectively. However, it failed to ensure that the consultants at preparation maintained sufficient liaison with GOK and KFD and adequately took into account the requirements of these agencies. Pre-appraisal and appraisal was satisfactory with key issues and risks identified and competent skill mix involved. Note was taken of lessons to be learnt from previous forestry projects in India, including those related to project management, early institutional and policy development and the need for improved technology. Although KFD formed part of the pre-appraisal and appraisal process, the Bank failed to fully communicate with the agency on several important issues, e.g. a unilaterally revised log frame prior to negotiations. - 14 - 7.2 Supervision: Satisfactory. Bank supervision was regular, though sometimes of short duration and included good skills mix with staff or consultant continuity. Technical inputs from the missions contributed significantly to effective implementation. Supervision missions recognised project constraints and issues and dealt with them effectively, including problems with counterpart funds and an excess of consultancies. They collaborated well with KFD on changes to project components and inputs, taking into account KFD suggestions, so as to optimise outcomes from investment. The MTR was timely and made sensible decisions on discontinuing several unworkable sub-components, without undue effect on achieving the project's objectives, while adjusting targets for other sub-components in light of the current capacity of the KFD to reach the new targets. Supervision reports accurately reported on implementation progress, constraints and key issues, while establishing sensible and agreed-to time-bound action plans to assist implementation and achieve PDOs. Regular Bank supervision, that provided the requisite technical support, particularly for forest management, plantation development, planting stock improvement, participatory forest management and biodiversity, helped to ensure sound implementation of the project. The Bank intervened from time to time with the Government of Kerala at high level which also assisted the implementing agency in overcoming delays in provision of counterpart funds. 7.3 Overall Bank performance: Satisfactory, consistent with the above-mentioned ratings and their rationale. Borrower 7.4 Preparation: Satisfactory. The borrower worked in close collaboration with the pre-appraisal and appraisal missions. Its foresight in recognising the need to adopt a different approach to forest protection and management by working with the forest related communities is to be complimented, particularly as senior staff recognised the difficulties in re-orienting the Department towards such a venture and the need for substantial retraining. It's recognition of the need to upgrade technology for plantation development was also farsighted. 7.5 Government implementation performance: Satisfactory. Overall GOK's commitment to the project was good and is reflected in the acceptance of the need to amend or write new policies and regulations to assist with project activities and achievement of objectives. In addition, the Government has demonstrated a keen interest to continue and mainstream project developed initiatives by increasing both the 2004/05 budget and the provisions under the Tenth Five-Year Plan to accommodate such initiatives. However, problems with the flow of counterpart funds did adversely affect the effective implementation of several field operations on occasions. 7.6 Implementing Agency: Satisfactory. KFD project related staff have proved to be highly motivated and shown considerable initiative in adopting an innovative approach to forest management and protection through the adoption of PFM as well as new, improved technology and management information systems. They were also pro-active in suggesting changes to improve project performance during implementation. Another positive - 15 - aspect was the maintenance of a fully staffed and competent project cell that had continuity of staff. These performances are particularly notable given the lack of institutional capacity prior to the project. 7.7 Overall Borrower performance: Satisfactory, consistent with the above ratings. 8. Lessons Learned l A project management cell with competent and long-term staff, as was the case with KFP, is a fundamental element in achieving successful outcomes for a project. l A holistic approach to forestry sector development that links various elements within the sector provides a realistic and effective approach to achieving development. l Site-specific, bottom up planning provides not only a more realistic approach to forest and plantation management, but also engenders a greater sense of involvement and responsibility amongst divisional and field staff. l A four years' project is too short a time frame for forestry. Though the project was appraised as two stage project for four and five years' period, only first stage was approved leaving a follow up operation unceratin as proved later. l Projects must be given sufficient time for completion, especially those in forestry that have well-known and inherent start-up problems. An extension of a year or two can make the difference between a successful and unsuccessful outcome for those projects that have started slow but gained momentum in the latter part of the project period. l Early and transparent agreements on policy reforms and the immediate establishment of institutional strengthening including HRD and Human Resource Management (HRM) are key to underpinning successful project implementation and sustainability. l Community participation, if established on a sustainable basis with adequate and equitably distributed benefits has proved to be a highly effective and efficient means of ensuring protection of natural forests from fire and biotic influences, and managing fragile ecosystems. l The establishment of well managed community institutions, such as VSS under KFP, creates empowerment for the community and develops self-help groups that can attract other development support from external partners. l The conflict between wildlife and farmers needs to be addressed. Effective conservation of wildlife increases destruction of crops and property in lands adjacent to PAs. l While initial progress has been made in promoting participatory approaches to biodiversity conservation, monitoring and sustainability should be given serious consideration in any similar future effort. 9. Partner Comments (a) Borrower/implementing agency: - 16 - 1. Comments from the Government of India/ Department of Economic Affairs/Ministry of Finance Arun Kumar Deputy Director (FB) Government of India (Bharat Sarkar) Ministry of Finance (Vitta Mantralaya) Department of Economic Affairs (Arthik Karya Vibhag New Delhi D.O.No.5/7/99-FB.VIII May 31, 2004 Dear Mr. Khan, Please refer to your letter dated 5th May, 2004 regarding Kerala Forestry Project (IDA Credit No. 3053-IN) - Draft ICR- Request for comments. This is to convey the concurrence with the draft ICR Report and no objection to the report being disclosed to the public. With regards, Your sincerely, sd/- (Arun Kumar) Shri Irshad Khan, Sr. Forestry Specialist, World Bank, 70, Lodi Estate, New Delhi 2. Comments from the Government of Kerala/Forest Department KERALA FORESTRY PROJECT COMMENTS ON THE DRAFT IMPLEMENTATION COMPLETION REPORT (ICR) We have gone through the draft report of the ICR Mission and generally agree with the findings of the team with some specific comments on certain points mentioned below. We would like to thank the members of the ICR review team for bringing out an excellent report on Project Implementation and providing independent and holistic views on important issues. We would like to assure all cooperation for bringing out the final ICR by providing with any additional information required in due course. Kerala Forestry Project was the first forestry project in the state which followed a sectoral approach and - 17 - proposed interventions with the big picture in mind. Though the overall objectives, per se, did not represent major changes from the avowed objectives of forest management in the state and in the national policies, the major departure in the project was in the treatment of the sector as a whole, instead of the sectarian approach practiced before the project. The underlying theme was not just the physical delivery of the desired goods and services envisaged in the project, but a process change for providing an enabling environment for the future development of the sector. The project facilitated in initiating and institutionalising a development process in the forestry sector of the state, through a set of well-thought out interventions designed to develop effective practices, systems, processes and approaches to sustainable manage the natural resources. The mainstreaming elements in the project were: (a) process change in management system based on decentralisation of decision-making, site-specific planning, improved technology and innovation; (b) change in the role of Kerala Forest Department (KFD) from a predominantly regulatory role to one of participation with tribals, rural communities and other stakeholders; (c) adoption of a changed approach to human resource management and information management and (d) fine-tuning the forest policy framework and strengthening institutions. Specifically, the objective of biodiversity conservation and arresting the retrograde trend in forest cover was addressed through site-specific interventions to assist natural regeneration, rehabilitation of degraded natural forests, participatory management of forests, fire protection and special habitat management. Increasing forest productivity was achieved through improved management practices for teak and pulpwood, enhancing the quality of planting stock, need-based research and upgrading the capabilities of the farmers in tree growing. Forest management through participation of rural communities ­ Participatory Forest Management (PFM) ­ was initiated as a pilot programme to explore the potential of PFM in different forestry and socio-economic contexts, develop appropriate approaches for PFM suited to Kerala and to help improve the standard of living of participating rural communities. People-PA interface issues were addressed through participatory management approaches to foster alternate livelihoods and sustainable resource use in and around Protected Areas. The Kerala Forestry Project was under implementation for a period of five years. Dealing with natural resources like forests, this is too short a period for evaluating the impact of the project in a realistic way. However, it is imperative to assess whether the project has moved the sector forward when considered against the broad objectives of the project and a process for change is put in place. In this respect, the Kerala Forestry Project contributed significantly to the development of the sector in the last five years. The ICR reveals that the outcome of objectives and outputs have been highly satisfactory. The achievement under each component has far exceeded the original targets laid down in the PAD. The productivity of the plantations raised under the project is manifold than the initial projections. The standard of living of the rural poor especially the tribal communities could be enhanced through a series of participatory programmes and establishment of a long-term institutional capability for enhancing the social capital. Programmes for conservation of biodiversity have been fully implemented as envisaged in the project. Specific comments l Management of Industrial Plantations: One of the comments made in the ICR was that the management of industrial plantations could have been better rationalised to wood product market projections and that emphasis could have been given for management of these plantations including better site/species matching teak and pulpwood species so as to maintain site quality. In this context, it may be noted that the Kerala Forest Department is only a marginal producer of timber and firewood in the state, the bulk contributed by the private sector. The influence of the forest production in the wood product market, consequently, is also not very substantial. The project mainly focussed on increasing the productivity of plantations by initiating a two-pronged approach of adopting improved technology - 18 - in raising plantations and ensuring the quality of planting materials. These approaches helped the KFD in achieving enhanced productivity much higher than expectations. The actual productivity for pulpwood plantation is assessed at six times more than that was assessed at the time of appraisal of the project. However, the comments of the mission are well taken and efforts will be put in by the KFD in rationalising management of industrial plantations so that it takes into account the market conditions. l Conservation of Biodiversity outside Protected Areas: The ICR team pointed out that more realistic assessment should have been made of the institutional requirements and manpower needs to manage biodiversity within the state including the 78% that occurs outside the designated PAs. It may be pointed out that the conservation priorities outside the PAs emerged from the consultancy study commissioned under the project, the findings of which was available only during 2002. Action has already been initiated to enhance biodiversity management based on the findings. The component for biodiversity conservation provided in the project was for mainly enhancing the infrastructure of the existing PAs and enhancing the capacity of KFD. However, specific initiatives like special habitat programme, participatory conservation programmes and education/interpretation programme were taken inside and outside PAs. The forest improvement works that have been taken up outside the forests also helped in improving the biodiversity outside the designated PAs. Further, two consultancies ­ Rationalisation of PA network and Landscape Planning for conservation - were commissioned by the department and are ongoing. Based on these studies, the department will be in a position to realistically assess the institutional and manpower requirements for better management of biodiversity in future. l Man-animal conflicts: One of the findings in the ICR that more thought could have been given to the alleviation of conflicts arising from increased losses to forest dwellers from animal damage within PAs and adjoining areas. In this regard, it may be noted that the schemes provided under the state plan and CSS provide funds for alleviating the conflicts arising out of man-animal conflicts. Further, the issue continues to attract serious consideration of the Forest Department and funds are being provided for compensating wildlife damages under the microplans for ecodevelopment of Protected Areas. It is also to be pointed out that, as advised by the members of the previous World Bank missions, more amount could not be provided in the microplans of various EDCs for the purpose under KFP. It is expected that such issues will be well taken care of in the coming years by the resources provided by the GOI to the EDCs and VSSs through FDAs. l Ecodevelopment: The ICR observed that the lessons and experiences gained from the successful model for the ecodevelopment of PTR could not be utilised while implementing ecodevelopment programme under the project especially for protection and conservation of biodiversity with people's participation. It may be noted that the ecodevelopment programme was initially expected to be undertaken on a pilot basis and hence initially the progress in this regard was slow and gathered momentum only at a later period. But efforts have been made to translate the success stories of PTR to the different parts of the state where Ecodevelopment programmes are being implemented. l Dissemination of results of research: The ICR pointed out that the reports of research studies published have not been widely disseminated. But it may be pointed out that all the research reports have been made available to the sub offices in CD-ROM and action has been taken to print sufficient copies of study reports and circulate to the field. l Flow of funds: Another observation made in the ICR was that the chronic fiscal problems within the state have adversely affected time bound forestry field operations on several occasions resulting in annual targets not being met or substandard planting taking place that adversely affected future plantation yields. While agreeing that the government had faced financial problems during the period, it is to be noted that the government has given top priority for releasing sufficient funds to the Forest Department in implementing Kerala Forestry Project and there has not been any delay in planting programmes or substandard planting. The fact that the productivity of plantations raised under the project is much higher than the expectations vindicates the above point. l Non utilisation of HRD funds: It has been pointed out that HRD funds were not fully utilised - 19 - particularly for international training. It may be pointed out in this regard that the targets on HRD components other than international training have far exceeded the original targets. But the international training could not be completed due to various reasons. l Principal performance Rating: In the draft ICR, the institutional development and impact of the project have been assigned the highest ratings. However, the rating given for outcome is only satisfactory. The outputs by components ­ strengthening sector management, strengthening forest management and strengthening biodiversity management - have also been found to be highly satisfactory by the ICR Mission. Achievement of objectives/outcome is dependent inextricably to the desired outputs by components. As pointed out by the ICR Mission and also as per the evaluation done by the KFD, an overall positive impact could be achieved in the sector through the project. The three development objectives ­ (i) arresting the retrograde trend in forest cover (ii) improving forest productivity (iii) improving the standard of living of forest dependent communities ­ have been fully realised. The forest cover improved through the substantial realisation of regeneration in all the treatment areas, productivity increased beyond expectations in the project and the standard of living of the forest communities improved considerably. The original physical targets have also been exceeded substantially with lesser costs. We, therefore feels that the outcome of the project has been very positive and highly satisfactory. In Para 7.6 (Implementing Agency) of the ICR, the performance of the implementing agency has been rated as highly satisfactory. The write-up way that followed also reflected the above rating. However, in Annex 6 of ICR, against the performance of the implementing agency, it is rated as satisfactory. This may be corrected. Concluding remarks: Kerala Forestry Project has been immensely instrumental in bringing about a sustainable developmental process in the forestry sector of the state. Even though the achievements have been impressive, there is a compelling need to consolidate and sustain the gains. The Government of Kerala and the Forest Department are committed on continuing this process by dovetailing project initiatives with sectoral programmes under National Five Year Plans and future projects. 3. Comments from the Government of India, Ministry of Environment and Forests F.No.: 12-1-1/199 - EAP Government of India Ministry of Environment and Forests 7th floor, Paryavaran Bhawan CGO Complex, Lodhi Road New Delhi 110003 Dated: 19th May, 2004 To Shri Irshad Khan Sr. Forestry Specialist The World Bank International Bank for Reconstruction and Development International Development Association New Delhi Office - 20 - 70 Lodi Estate New Delhi 110003 Subject: Kerala Forestry Project (Cr. No. 3053-IN) - Draft ICR - Request for comments Ref: Your D.O dated 5th May, 2004 addressed to DGF & SS Sir, We have reviewed the Draft Implementation Completion Report for the Kerala Forestry Project completed on 31st December, 2003 and we concur with the draft ICR Report. Further, there is no objection to disclose the finalized ICR to public. Thanking you, Yours faithfully, sd/- (S.K. Ramalinge Gowda) Inspector General of Forests (b) Cofinanciers: None (c) Other partners (NGOs/private sector): None 10. Additional Information - 21 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate Project Development Objective: Arrest the retrograde trend in forest cover development and improve productivity in areas of project interventions in Kerala in an environmentally and socially sustainable manner. In addition, the project aims were to improve the standard of living of rural poor in and around forest areas. 1. Forest cover stabilized in intervention - 31,500 ha natural forest treated. * - 55,000 ha natural forest treated. areas. - 200,000 m3 soil retained within treated forests. > 50% regeneration in 60% of treated sites. - PFM improved protection against fire and biotic interference. 2. Satisfactory stocking rates and good - MAI pulpwood of 13 m3/ha/year - Achieved MAI 22 m3/ha/year in pulpwood growth in intervention areas. - Pre-project planting material survival rate plantations. of 60%. - Planting material survival rates of 90%. 3. Improve standard of living of rural poor. - 33,932 families involved in PFM including 8,656 tribal and 3,790 scheduled caste families. - 60% increase in overall number of wage days for VSS members 100% increase for women. * Mid -Term Review Target Output Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate 1. Sector Management Strengthening: Strong Kerala Forest Department with improved administration and forest management process and structure within a framework of appropriate sector policies. (i) Policy Reforms Introduced (Policy Reforms Matrix in PAD) Forest Sector Management Study completed. Reform Action Plan prepared and implemented. Revolving Fund established. Policies affecting pricing and marketing introduced. (ii) Training Program Implemented 363 Courses, 117,398 person days of 471 Training courses, 245 Workshops, 48 training. Study Tours, 36,367 participants trained. (iii) Forest Management Information Completion of FMIS package Finance and Management Information System Designed and Operational System implemented. 15 FMIS modules developed. 23 basic GIS layers digitized. 2. Forest Management Strengthening: Technical, social and biological processes established to increase forest cover in target area. (i) Forest Productivity and Stocking Improve 23,000 ha of natural regeneration. Improved 22,890 ha of natural regeneration. Improved 9,000 ha degraded forests treated. 4,700 ha 14,520 ha degraded forests treated. 7,200 ha Bamboo and Reeds restored. 1,800 ha of Bamboo and Reeds restored. 2,330 ha of teak and 3,700 ha pulpwood plantation to be teak and 6,540 ha pulpwood plantation established. Micro-Watershed established. Micro-Watershed Based Management of 20,000 ha in total with Based Management of 26,185 ha in total with 10,000 ha treated.* 10,086 ha treated. Increase survival of planted stock. Planted stock survival rate of 85%. - 22 - (ii) Participatory Forest Management 86 communities operational. 12,400 ha under 356 communities established with 213 Introduced PFM. 33 Tribal/Forest communities to be communities implementing microplans. established 151,090 ha under PFM. 50 Tribal/Forest communities active. (iii) Improved Fire Management Development of Fire Management Plans in 5 Developed Fire Management Plans in 8 Introduced divisions. 30,040 ha under effective fire divisions. 115,000 ha under effective fire protection. protection. (iv) Improved Quality of Planting Stock Construction of 5 central high tech Constructed 6 central high tech nurseries. nurseries*. KFRI to complete 14 research KFRI completed 14 research programs/studies.* programs/studies. (v) Increased Support for Homestead Establish 6 District Forestry Extension and Established 14 District Forestry Extension Forestry Information Centers (DFEICs). and Information Centers (DFEICs) and model nurseries. Trained approximately 8,000 farmers, including 3,600 women in nursery management and farm forestry. 120 private nurseries established. 3. Biodiversity Conservation Strengthening: Foundation secured for sustainability of Protected Area System. (i) Establish State-Wide Strategic Implement State-Wide Strategic Approach to Bio-diversity conservation strategy and action Approach to Conservation and conservation. Implement special habitat plan completed and implemented. 13 PA Strengthen Sustainability of plans. management plans have been written and Protected Areas approved for implementation. 9 landscape plans identified. 16 wetland areas identified for wetland management. 3 wetland areas given "Ramsar" status. 42 special habitat management programs completed. 7 research projects complete, 6 interpretation (ii) Improved Support for Conservation Undertake 7 research programs, construct 7 centers completed, 473 awareness programs interpretation centers conducted Formed 44 EDCs. 44 microplans initiated. (iii) Ecodevelopment Pilot Successful Formation of 38 Ecodevelopment communities (EDCs) * 1End of project * Mid-Term Review Target. - 23 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million Strengthening Sector Management 6.20 6.60 106.45 Strengthen Forest Management 31.50 25.80 81.9 Strengthen Biodiversity Conservation 4.80 3.00 62.5 PPF Reimbursement 1.00 0.60 60 Total Baseline Cost 43.50 36.00 Physical Contingencies 1.20 Price Contingencies 2.30 Total Project Costs 47.00 36.00 Total Financing Required 47.00 36.00 Project Costs by Procurement Arrangements (Apraisal Estimate) (US$ million equivalent) Expenditure ICB Procurement Method 1 N.B.F Total Cost Category NCB Other 2 1. Works - 0.5 3.4 - 3.9 - (0.4) (2.8) - (3.2) 2. Goods 2.4 0.8 4.2 - 7.4 (1.9) (0.6) (3.4) - (5.9) 3. Vehicles - 0.3 1.0 - 1.3 - (0.2) (0.8) - (1.0) 4. - - - 5.4 5.4 Consultancies, - - - 5.4 (5.4) studies, Training & Tech Assistance 5. Participatory 2.8 2.8 Forest (2.4) (2.4) Management (civil works, forest operations, materials) 6. Forest - - 21.4 - 21.4 Operations - - (17.9) - (17.9) 7. - - 3.8 - 3.8 Recurrent/Proje - - (2.0) - (2.0) ct Supervision Costs 8.Project - - 1.0 - 1.0 Preparation - - (1.0) - (1.0) - 24 - Facility Total 2.4 1.6 37.6 5.4 47.0 (1.9) (1.2) (30.3) (5.4) (38.8) Note: Figures in parenthesis are the respective amounts financed by IDA Credit Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) Expenditure ICB Procurement Method 1 N.B.F Total Cost Category NCB Other 2 1. Works 0.9 3.0 3.9 (0.8) (2.6) (3.4) 2. Goods 0.6 2.9 3.5 (0.4) (2.4) (2.8) 3. Vehicles 1.2 1.2 (1.0) (1.0) 4. 2.5 2.5 Consultancies, (2.5) (2.5) studies, Training & Tech Assistance 5. Participatory 1.8 1.8 Forest (1.5) (1.5) Management (civil works, forest operations, materials) 6. Forest 20.5 20.5 Operations (16.7) (16.7) 7. 2.0 2.0 Recurrent/Proje (0.9) (0.9) ct Supervision Costs 8. Project 0.6 0.6 Preparation (0.5) (0.5) Facility Total 1.6 32.0 2.5 36.0 (1.2) (25.6) (2.5) (29.3) Note: Figures in parenthesis are the respective amounts financed by IDA Credit. 1/ Figures in parenthesis are the amounts to be financed by Bank loan. All costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) - 25 - Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. Sector Management 6.30 1.50 5.70 1.50 90.5 100.0 Strengthening Forest Management 28.20 5.70 21.00 4.70 74.5 82.5 Strengthening Biodiversity Conservation 4.50 0.80 2.60 0.50 57.8 62.5 TOTAL 39.00 8.00 29.30 6.70 75.1 83.8 Appraisal estimates include contingencies - 26 - Annex 3. Economic Costs and Benefits A. Introduction An economic and financial analysis was conducted of the updated quantifiable KFP costs and benefits. In keeping with the methodology at appraisal, the analysis included the following sub-components: (i) natural forest management (NFM), (ii) participatory forest management (PFM), and (iii) plantations (teak and pulpwood). The biodiversity conservation component and the research, forest management, and homestead forestry sub-components are excluded from the analysis, as at appraisal, because of the problems with quantifying benefits. Main Assumptions (All prices and coefficients used in the financial and economic analysis and the models can be seen in the supporting documents Working Paper 2, Financial and Economic Analysis). Prices. All values are expressed in 2003 prices. All traded commodities were valued at import parity prices and non-traded goods are based on domestic financial prices. Economic prices were derived from financial prices using the Standard Conversion Factor (SCF) for India of 0.9 with the exception of fertilizer and labor. A conversion factor of 1.33 was used for fertilizer to reflect the level of fertilizer subsidies. For labor, as in the appraisal working paper spreadsheets, a 0.72 conversion factor was used to reflect the level of underemployment of the unskilled labor used for forestry work. Model Coefficients. All input, labor, and yield coefficients were supplied by the KFP project management unit. For the analysis, yield coefficients for NTFPs, teak, and pulpwood are taken at 75% of their projected levels. In many instances, projected yield levels will be met but the 75% allows for yields to be conservative and also allows for wind, fire, erosion or disease disasters. Project Analysis Life. The project analysis is undertaken over 65 years and reflects the full teak rotation of 60 years plus a 5 year lag to represent the last planting that took place in year 6. However, the life of other sub-components are 30 years. This allows for 4 complete pulpwood rotations. An economic analysis beyond 30 years for these sub-components would increase the rate of return but in all likelihood not make littlea substantial difference because of discounting. Overhead Costs. In keeping with the methodology at appraisal, project overhead costs of 10% of activity costs for each sub-component are added to the sub-component incremental net benefit stream. Almost 85% of total project costs are accounted for in the analysis. Environmental Benefits. Benefits from carbon sequestration are calculated for the hectares under (i) natural forest management, and (ii) plantations. It is assumed, as at appraisal, that carbon sequestration starts in year 6 after planting or first year regeneration. It is assumed that one tonne of sequestered carbon has a value of US$ 10. It is further assumed that natural forest management will sequester 2 tonnes/ha/year and that plantations will sequester 4 tonnes/ha/year. Hectares Planted/Restored. Table 1 presents the hectares planted, restored or regenerated by the project by sub-component. Actual total hectares under the project are compared to the anticipated hectares at appraisal. Table 1. Hectares Planted, Restored and Regenerated Under KFP. - 27 - Project Year Total At Appraisal 1998 1999 2000 2001 2002 2003 - - - - - - 1999 2000 2001 2002 2003 2004 (Hecta res) 1. Natural Forest Management Assisted Natural2,542 6,622 7,355 3,157 3,214 0 22,89 23,000 Regeneration 0 Bamboo/Reeds Restoration 603 1,589 1,754 1,337 1,275 645 7,203 4,700 Natural Forest Management911 2,574 3,191 949 1,135 540 9,299 4,500 Natural Forest Management309 1,344 1,353 943 670 521 5,220 4,500 Total 44,61 36,700 2 2. Participatory Forest Mgmt. NTFP Sustainable 34,88 34,88 34,88 104,6 3,800 Management 6 6 6 70 Fringe Area Management 46,41 8,600 7 Total 151,0 12,400 90 3. Plantations Teak 137 202 358 430 598 608 2,333 1,800 Pulpwood 252 786 1,107 1,224 1,443 1,728 6,540 3,700 B. Economic Analysis Table 2 presents the ERR and NPV by sub-component and for the overall project. The overall ICR project ERR is 25% compared to 12% at appraisal. The ICR ERR is also higher for the natural forest management sub-component (19%) relative to appraisal (10%). The ICR ERR for PFM is 32% compared to 13% at appraisal. The teak ICR ERR is also higher than at appraisal while the ICR ERR for pulpwood is similar to that at appraisal. Including environmental benefits in the analysis in terms of carbon sequestration adds about 1% to the overall ICR ERR (the PAD does not present an overall project ERR inclusive of environmental benefits but rather calculates a break-even or minimum level of additional environmental benefits required to attain a 12% ERR for the NFM sub-component). The ICR ERRs are higher in general than at appraisal (with the exception of pulpwood) because (i) actual establishment costs/ha for planted or restored hectares were substantially below the appraisal estimate, and (ii) in most cases, the 75% of projected yields used in the ICR analysis are higher than the yields anticipated at appraisal. - 28 - The ICR NPVs are also much higher than at appraisal (although not strictly comparable because of the difference in the year prices are expressed in). The overall ICR NPV is estimated at Rs. 2,580 million (US$ 57.3 million). The higher ICR NPVs is also a reflection of lower actual establishment cost/ha and higher ICR yields but mainly reflects the higher number of hectares planted or regenerated under the project as compared to the anticipated number of hectares at appraisal, in particular, PFM (Table 1). Table 2. Summary of Project and Sub-Component ERR and NPV. Sub-Component Appraisal ICR ERR ERR NPV(12%) NPV(12%) (1997 Rs. million) (2003 Rs. million) 1. Natural Forest Management 10% -107 19% 550 Assisted Natural Regeneration (ANR) Bamboo/Reeds Restoration (BRR) Natural Forest Management (RDF-1) Natural Forest Management (RDF-2) 2. Participatory Forest Management (PFM) 1/ 13% 4 32% 1,733 3. Plantations Teak 20% 34 34% 41 Pulpwood 38% 108 35% 256 4. Overall Project 12% 39 25% 2,580 5. Overall Project with Environmental Benefits - 26% 2,756 2/ 1/ NTFP Sustainable Management. 2/ Benefits from carbon sequestration for Natural Forest Management and Plantation hectares. C. Sensitivity Analysis Product prices and yields are the two parameters that may vary in the future that would have an effect on the ERR (establishment and other project costs are now treated as sunk). Table 3 presents a summary of the sensitivity analysis. When product prices are decreased by 50%, only the pulpwood ERR is below 12%. The overall project ERR is 15%. When yields are decreased by 25%, only the NFM ERR is below 12%. When both product prices and yields are decreased by 25%, the NFM ERR is less than 12% as is the overall project ERR at 11%. In all three scenarios, the overall project with environmental benefits ERR is 12% or higher. It is likely that the ERR will remain above 12% for all sub-components and the overall - 29 - project. D. Financial Analysis A financial analysis was carried out at appraisal of (i) participatory forest management and (ii) plantations. (a) Participatory Forest Management The main issue is to identify if there are sufficient net benefits from PFM to act as an incentive for participation by a VSS and its members. The average net revenues from NTFPs and wood production prior to the project was Rs. 6,591 /ha (US$ 146/ha) compared with an average potential net revenue of Rs. 15,077 /ha (US$ 335/ha) with the project. (Numbers from the with and without project PFM financial models, Working Paper 2, Financial and Economic Analysis). The income/ha has thus more than doubled (Rs. 8,486/ha or US$ 189/ha). In addition, income has been increased through direct payment of wages for forestry work and protection and other income generating activities as prescribed by the VSS micro plans. It is estimated 33,992 households take part in PFM. Given the PFM area of 104,670 ha (Table 1), the average number of hectares per household is about 3 hectares. Thus, on average, the potential income for each household has been increased by Rs. 25,000. (b) Plantations. Teak. The additional flow of incremental net revenue generated from using new technologies returns an FRR of 36%. The overall returns to teak plantations show a 19% rate of return. This is in comparison to an 18% and 14% rate of return respectively at appraisal. Pulpwood. The additional flow of incremental net revenue generated from using new technologies returns an FRR of 46%. The overall returns to pulpwood plantations show a 31% rate of return. This is in comparison to a 42% return from incremental net revenue at appraisal. Table 3. Sensitivity of ERR to Changes in Product Prices and Yields. Sub-Component ERR ICR 50% 25% 25% Decrease in Decrease Decrease in Product in Yield Prices & Prices Yields 1. Natural Forest Management 19% 12% 9% 2/ 7% 3/ 2. Participatory Forest Management (PFM) 32% 19% 15% 13% 3. Plantations Teak 34% 14% 23% 14% Pulpwood 35% 10% 1/ 23% 13% - 30 - 4. Overall Project 25% 15% 13% 11% 5. Overall Project with Environmental Benefits 26% 16% 14% 12% ______________________________________________________________________________ 1/ Switching value of about 45% decrease in product prices. 2/ Switching value of about 20% decrease in yields 3/ Switching value of about 20% decrease in both prices and yields. - 31 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 1994 06/1996 9 MISSION LEADER (1); ECONOMIST (1); FORESTRY SPECIALIST (2); GENETICIST (1); ENV SPECIALIST (1); SOCIAL DEV SPECIALIST (1); INFORMATION TECHNOLOGY SPECIALIST (1); INSTITUTIONS & HUMAN RESOURCES DEV SPECIALIST (1) Appraisal/Negotiation 09/20/1997 11 MISSION LEADER (1); ECONOMIST (1); NRM SPECIALIST (1); FORESTRY SPECIALIST (1); SOCIAL FORESTRY SPECIALIST (1); GENETICIST (1); ENV SPECIALIST (1); INSTITUTIONS & HUMAN RESOURCE DEV SPECIALIST (1); INFORMATION MGMT SPECIALIST (1); FINANCIAL MGMT SPECIALIST (1); PROCUREMENT ENGINEER (1) 1/28/1998 4 TASK MANAGER (1); CO-TASK MANAGER (1); SENIOR DISBURSEMENT OFFICER (1); SENIOR COUNSEL (1) Supervision 01/25/1999 7 MISSION LEADER (1); S S SOCIAL FORESTERY (1); ENVIRON. (1); NAT. RES. (1); SOCIAL DEV. (1); PROCUREMENT (1); FOREST TECHNOLOGY (1) 06/17/1999 2 MISSION LEADER (1); NRM S S (1) - 32 - 12/17/1999 7 FORESTRY (1); NATURAL S S RES. (1); FORESTER (2); TEAM ASSISTANT (1); ENVIRONMENT. (1); FOREST TECHNOLOGY (1) 06/27/2000 2 FORESTRY (1); SOCIAL S S FORESTER (1) 06/23/2001 2 FORESTRY (1); NATURAL S S RES MGMT (1) 12/19/2001 5 MISSION LEADER (1); S S FORESTRY (1); BIO-DIVERSITY (1); SOCIAL DEVELOPMENT (1); FINANCIAL MANAGEMENT (1) 06/21/2002 4 MISSION LEADER (1); S S NATURAL RESOURCE MGMT. (1); MIS (1); INSTITUTIONS (1) 11/22/2002 2 TASK TEAM LEADER (1); S S FOREST MANAGEMENT (1) 06/13/2003 2 MISSION LEADER (1); S S FOREST MANAGEMENT 11/21/2003 8 MISSION LEADER S S (1);PROCUREMENT (2); ENVIRONMENTAL (1); PLANTATION TECHNOLOGY (1); ECONOMIST/PARTICIPATIO N (1); MIS/GIS (1); FINANCIAL MANAGEMENT(1) ICR 3 MISSION LEADER, ECONOMIST (1); FORESTRY EXPERT (1); BIODIVERSITY SPECIALIST (1) (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 32.5 77.8 Appraisal/Negotiation 37.2 88.4 Supervision 91.05 112.2 ICR 10.0 Total 170.5 - 33 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies H SU M N NA Sector Policies H SU M N NA Physical H SU M N NA Financial H SU M N NA Institutional Development H SU M N NA Environmental H SU M N NA Social Poverty Reduction H SU M N NA Gender H SU M N NA Other (Please specify) H SU M N NA Private sector development H SU M N NA Public sector management H SU M N NA Other (Please specify) H SU M N NA - 34 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating Lending HS S U HU Supervision HS S U HU Overall HS S U HU 6.2 Borrower performance Rating Preparation HS S U HU Government implementation performance HS S U HU Implementation agency performance HS S U HU Overall HS S U HU - 35 - Annex 7. List of Supporting Documents 1. Pre-Appraisal (07/12/1996) and Appraisal (10/17/1997) Aide Memoires. 2. Project Appraisal Document Report No. 17276-IN. 3. Kerala Forestry Project Supervision Reports, Aide Memoires, and Mid-Term Review Reports, 1998-2003. 4. Kerala Forestry Project Status Report, KFP Project Cell, October, 2003. 5. Improving Forest Management and Productivity, Working Paper 1, ICR Mission, March, 2004 (ICR Work Paper 1.doc). 6. Financial and Economic Analysis, Working Paper 2 , ICR Mission, March, 2004 (ICR Financial and Econ Analysis WP2.xls). 7. Project Implementation Plan, Kerala Forest Department, July, 1998. 8. Human Resources Development Plan, Kerala Forest Department, August, 2002. 9. Kerala Forestry project Evaluation Report, KFP Projecr Cell, January, 2004. 10. Kerala Forestry Project ­ Project Implementation Plan. 11. Kerala Forestry Project, Working Papar on Natural Forest Management and Treatment Practices for Forest Development, August, 1996. - 36 - - 37 -