RESTRICTED For official use only Not for publication UNN42 Vol. 5 REPORT' TO THE PRESIDENT OF ±rte. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AS ADMINISTRATOR OF THE INDUS BASIN DEVELOPMENT FUND STUDY OF THE WATER AND POWER RESOURCES OF WEST PAKISTAN VOLUME II Program for the Development of Irrigation and Agriculture Annex 4. 1 (Pages 89 - 200) and Annexes 6. 1 - 9. 1 Prepared by a Group of the World Bank Staff Headed by Dr. P. Lieftinck July 28, 1967 Program for the Development of Irrigation and Agriculture in lJest Pakistan T.bBLE OF CONTENTS 7Cont'd) ANNEXES 4.1 Report on Project Content of tJater Development Progracm for WtJest Pakistan: Page INTRODUCTION I. SURFACE WATER PROJECTS 1 A. Background 1 B. The Tarbela Project 2 1. Project Description 2 2. Tarbela Water Availability and Distribution 3 3. Cost Estimates and Expenditure Schedule 7 4. Project Evaluation 9 5. Conclusions 18 II. GROUNDWP,TER DEVELOPMENT PROJECTS 21 A. General Aspects of the Projects 21 1. Introduction 21 2. Project Preparation 21 3. Project Management 24 4. Recovery of Costs 25 5. General Lpproach and Design Criteria 25 6. Project Evaluation 29 7. Associated Agricultural Inputs 33 8. A'lternative Private Development 34 Page B. Review of IACA's Public Tubewell Project Proposals 37 1. The Shorkot-Kamalia Project 37 2. The Rohri North Project 51 3. The Panjnad-Pbbasia Project 65 4. The Dipalpur Above the B.S. Link Project 77 5. The Shujaabad Project 89 6. The Ravi Syphon - Dipalpur Link Project 101 7. The Fordwah Sadiqia Project 115 8. The Rohri South Project 127 9. The Bahawal Qaim Project 141 10. The Begari Sind Project 155 11. Dipalpur Below The B.S. Link Project 167 12. The Sukkur Right Bank Project 179 III. DRAINAGE PROJECTS A. Introduction 191 B. The Sukh Beas Drainage 191 1. Description of Project Area 191 2. Physical Works 192 3. Cost Estimates 195 4. Construction Phasing 196 5. Expenditure Schedule 196 6. Drainage Benefits 197 7. Project Evaluation 199 8. Conclusion 200 Map. 6.1 IACA Estimates of Area Covered by Fertilizer Applications 6.2 Prospects for Supply, Distribution and Use of Fertilizer in West Pakistan 6.3 The Program for Artificial Insemination in West Pakistan as Proposed by IACA 7.1 Indicative Estimate of Public Investment Expenditures for Water Development during Third and Fourth Plan Periods 8.1 Definition of Developmental Activities Employed in GPV Projections 8.2 IA.CA Projections of Growth of Agricultural Production 8.3 Bank Group's Projections of Growth of Agricultural Production 8.4 Assumptions Used in Estimating Gross Value Added 8.5 IACA's Derivation of Elasticity-Coefficients of Demand for Agricultural Products 9.1 Terms of Reference, Memoranda to Consultants and Guidelines for the Study ANNEX 4.1 Page 59 5. The Shujaabad Project (a) The Project 2.138 The project is located in the south western tip of the Bari Doab on the left bank of the Chenab river (see Map). It-Iis4gituated in'thehad1idrin,-fln- istrative district of the large urban center of Multan and comprises most of the existing non-perennial part of the Sidhnai Canal Command, together with an area at the tail of the Mailsi Canal Command and a further small area at the tail of the Lower Bari Doab Canal Command. It would provide additional irri- gation supplies and water table control for 379,000 acres CCA in the following canal commands: CCA Included Under the Project Canal Commands Total CCA CCA of the Project ---------- (Million Acres) --------- Sidhnai II 0.26 0.25 Mailsi below SM Link 0.68 0.10 Lower Bari Doab 1.57 0.03 TOTAL 2.51 0.38 Distribution of the groundwater quality in the project area is about as follows: Groundwater Quality Zones of the Project Groundwater Quality Project Area Zone Percent '000 Acres Less than 1,000 ppm TDS 80 303 1,000 to 3,000 ppm TL6 20 76 TOTAL 100 379 2.139 -Approxima-tely -280,000 acres (74-percent of the project area) has a water table which -is tn-feet or less from'grou-nd level of which about a third or 95,000 acres is effekvely waterlogged with a water table cdeptht.oi'Vfive feet or less. Althou=gh no specific-data for the project area are available, surveys of the Mu-1-ta san-d-'Shujaabad-divisions indicate the existence of extensive :a-reas 'ffeted-by sdil -salinity. Their extent would need ta be 1/ IACA Comprehensive= Report, Volum'e 12, Annexure 15B. ANNEX 4.1 Page 90 further determined in the course of project preparation. The high water table and soil salinity have retarded agricultural development in the project area, which is less developed than most other areas of the Bari Dbab. 2.140 Land tenure data are only available for the Multan District which covers part of the project area. The distribution of farm sizes and tenure- ship in this district is as follows: Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 acres 38 7 5 to 25 acres 51 53 Over 25 acres 11 40 Owner operated 32 29 Owner cum tenant 9 12 Tenant operated 59 59 The average farm size in the district is about 11 acres and thus somewhat larger than the average for the Punjab as a whole. 2.141 The project together with additional surface supplies, would increase the water availability in the project area from about 0.88 MAF presently to 1.80 MAF at full development. Of the increase of 0.92 MAF, about 0.18 MAF would be additional surface supplies introduced after pro- vision of tubewell drainage, and 0.74 MAF through additional groundwater exploitation. This increase in irrigation supplies would be sufficient to support a growth in cropped acreage from 360,000 acres (95 percent intensity) in 1965 to 564,ooo in 1985 (149 percent intensity). (b) Physical Works 2.142 The physical works of the project would consist of the installation of some 725 public tubewells and appurtenant works. Of these, 576 wells of four cusec capacity would be in the fresh groundwater zone of the project area (covering 303,000 acres or 80 percent of CCA); and 149 wells with an average capacity of 2.8 cusecs would be in the remaining area underlain by groundwater requiring mixing with surface water. Towards the center of the doab, but outside the project area, the deep groundwater becomes progressively more saline. However, as long as balanced recharge pumping from a depth of about ten feet would be practised IACA foresees no significant migration of saline groundwater into the project area and has, therefore, not provided for buffer wells or other protective measures. In a later stage of development, when the surface distribution system in the mixing and adjacent saline zones ANNEX 4.1 Page 91 would be remodelled to improve intensity further drainage in these zones would be required. This is not included in the project under review. Parts of the project area would benefit, as discussed in Chapter III, from the Sukh- Beas Drainage Scheme. (c) Construction Schedule 2.143 The installation of the public tubewells would extend over about four years in accordance with the following schedule: Preliminary Construction Schedule 1969/70 1970/71 1971/72 1972/73 ------------- (number of wells) ----------- Drilling and Construction 165 360 200 -- Electrification -- 165 360 200 lWells in Operation -- 165 525 725 2.144 Construction of the tubewell project would thus be completed at the middle of the Fourth Plan period. IACA's Report is a first attempt to formulate this project with regard to its technical, agricultural, financial and economic implications. As such it is in many respects based on general information applicable to larger areas rather than on specific investigations. Further detailed project preparation would have to be initiated in due course if the project eere to be implemented in accordance with the above schedule. (d) Cost Estimates and Expenditure Schedule 2.145 The total cost of the project is estimated by the Bank Group at about Rs. 128.5 million (uS$ 27.1 million equivalent). This would include the following: ANNEX 4.1 Page 92 Summary Cost Estimates Local Foreign Currency' Exchange Total …_-______-__(Rs M-Iill)------------ Project Preparation 2.5 2.2 4.7 Tubewells 16.0 23.1 39.1 Electrification 10.4 16.3 26.7 Other Civil W4orks 10.1 1.0 11.1 Subtotal 39.0 42.6 81.6 Overheads 13.0 4.0 17.0 Contingencies 9.9 8.9 18.8 Subtotal 22.9 12.9 35.8 Interest During Construction 11.1 - 11.1 TOTAL 73.0 55.5 128.5 Details of the cost estimates are given in Appendi4 l,.page 1. The for.eign exchange component of the project would be about 43 percent of total project costs or US$ 11.7 million equivalent. 2.146 Expenditures would be spread over approximately four years in accordance with the following schedule: Summary Expenditure Schedule Year 1 2 3 4 ------- (Rs. Mill)- Tubewells and associated works 21.8 38.3 23.0 1.2 Electrification - 10.1 21.8 12.3 TOTAL 21.8 48.4 44.8 13.5 A more detailed expenditure Schedule is given in Appendix 1, page 2. ANNEX 4.1 Page 93 (e) Recovery of Project Expenditures 2.147 On the basis of the above cost estimates a preliminary assessment has been made of the charges required to recover total project costs over the lifetime of the project. The average annual rate of recovery, including operation and maintenance expenditures, would have to be about Rs. 16.7 million as shown below: Annual Costs for Operation, Maintenance and Recovery of Capital Annual Costs (Rs MTll) Capital Costs 1/ (Annuity at 6% over 20 years for Rs. 84.3 million) 7.4 Annual Operation and Maintenance Costs 2 (including repairs, electricity and staff costs) 9.3 TOTAL 16.7 1/ Based on recovery of project investment including project preparation and interest during construction but without costs of electrification. 2/ Average annual costs based on weighted average over lifetime of the project. 2.148 This would be equivalent to about Rs. 44 per acre CCA or Rs. 30 per cropped acre at the stage of full development. Existing water rates average about Rs. 7 per cropped acre. Future water rates to recover total project costs including O&M and charges for surface supplies at existing levels would have to be in the neighborhood of Rs. 37 per cropped acre or about Rs. 55 per acre CCA. This would be about 12 percent of the expected net value of production in 1985. (f) The Irrigation Regime 2.149 The mean quantities of surface and groundwater which would be made available with the project and the comparison with the irrigation water availability likely to prevail if no further private tubewells are installed after the beginning of the project (in 1969) are sunmarized for 1975 and 1985 in the water budget attached as Appendix 2. No further invest- ment in private tubewells would be expected following implementation of the project. The total water availability at watercourse head, under the public project, would be about 1.80 MAF at the stage of full development. Of this 0.98 MAF would be provided by public tubewells and 0.82 MAF by canal supplies. Some 0.36 MAF of groundwater would substitute private exploitation, i.e. the ANNEX 4.1 Page 94 net increase of groundwater availability due to the project tkould be about 0.62 MAF 1/. Total surface water availability at watercourse heads would increase from 0.64 MAF to 0.82 or by 0.18 MAF. The lowering of the water table to an average depth of ten feet in the early stages of the project would require the permanent extraction of about 0.26 MAF of groundwzater before additional surface supplies could be admitted into the project area. For the project area as a whole, the water availability would be enhanced from 2.3 acre feet in 1965 to 4.7 acre feet per acre CCA in 1985. This would enable the average increase of cropping intensity from 95 percent in 1965 to 149 percent in 1985 at full delta. 2.150 As an alternative to the public tubewell project further irri- gation development could take place through the continued installation of private tubewells. The following table shows water availability and potential intensity growth as projected for these alternative forms of developmnent. Water Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 3,234 - 725 3,234 - 725 Surface Supplies (I4AF) 0.79 0.79 0.82 0.82 Annual Pumpage (MAF) 0.73 0.78 0.73 0.98 Total Annual WATatercourse Delivery (1MAF) 1.52 1.57 1.55 1.80 Cropping Intensity (percent) 126 133 126 149 Acres Cropped ('000) 478 505 478 564 Acre Feet/Acres Cropped 3.2 3.1 3.2 3.2 1/ Private tubewells of one cusec capacity. The table indicates that private groundwater development at the projected rate of installation would be capable of pumping nearly 75 percent of the annual recharge. This would appear to provide sufficient control of the water table to admit additional surface water into the area in conjunction with private development. Consequently, the combined water availability under the private alternative would support an intensity of 126 percent at full delta or only about 86,000 cropped acres less than under public develop- ment. 1/ See Appendix 2, fo6tnotes 2 and 3. AhTNEX 4.1 Page 95 (g) Agricultural Development 2.151 The cropping intensity for the project area in 1965 was estimated to be around 95 percent. The project area, at present, is less developed than most other areas of the Bari Doab. Agricultural development is mainly constrained by non-perennial and unreliable canal supplies, and also by the high water table in 74 percent of the project area. The project area forms part of the Punjab Cotton Belt and cotton is the predominant crop. Other kharif crops in addition to cotton are fodder, maize and coarse grains. Some coarse rice is grown mainly for reclamation purposes. Although the climate is suitable for cotton growing, yields are generally low because of the high water table. The main rabi crop is wheat which accounts for two-thirds of the rabi acreage. Apart from rabi fodder other crops have low intensity. Of the perennial crops sugarcane covers only a small area, espec- ially in the southern part of the project area. In the North, however, the urban demand of Multan has a significant impact on perennial acreage. IACA's estimates indicate that the 1965 value of crop production was of the order of Rs. 50 million and livestock production Rs. 24 million, giving a total GPV of Rs. 74 million. On average this would be about Rs. 195 per acre of CCA. 2.152 During the pre-project period agricultural development within the project would be expected to continue at the present trend. Between 1965 and 1969 total GPV is expected to grow to Rs. 88 million. The number of private tubewells according to IACA would increase from about 930 in 1965 to about 1,680 in 1969. With the start of the project, private tubewell development would fall off and public tubewells wnuld successively substitute existing private wells. The increased water availability under public tubewell development would support the following intensity growth: Growth of Cropped Acreage Under Public Development Intensity11 Cropped Acreage Year Percent ('000) 1/ 1965 95 360 1969 (start of project) 103 390 1975 133 505 1985 149 564 1990 149 564 1/ Perennials counted twice. As stated earlier, continued private groundwater development would support a cropping intensity of about 126 percent at full delta. 2.153 Assessments have been made by the Bank Group of the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water development. In accordance ANNEX 4.1 Page 96 with the cropping intensity, cropping patterns and yield growth projected for the respective cases (see Appendices 3 and 4 for'details)-the GPV and-the pro- duction increments would be expected to develop about as follows: Growth of GPV "Wlith" and "Without" Groundwater Development Incre- "Without" 'nJWith" mental Additional Groundwater the Project GPV Crops Livestock Total Crops Livestock Total Total -----------------(Rs Mill)------------------ 1965 50 24 74 50 24 74 - 1969 58 30 88 58 30 88 - 1975 75 38 113 102 44 146 33 1985 110 52 162 177 92 269 107 Over the life of the project the GPV would more than triple and the level of production would be 66 percent higher than that of the "without" case. The GPV per acre CCA would increase from Rs. 195 in 1965 to Rs. 710 in 1985 as compared to Rs. 427 per acre CCA in the "without" case. 2.154 To achieve the above projected growth of production appreciable increases in on-farm expenditures would be expected in both the "with" and "without" cases, and great efforts would have to be made to make avail- able the quantities of non-water inputs required to sustain such growth. Allowing for increased on-farm expenditure and associated current project costs as well as the allocation of benefits to additional surface water absorption the incremental net production value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, .pag&s-lafid 2. ANNEX 4.1 Page 97 Incremental Net Benefits Attributable to Public Groundwater Development 1/ 1975 1985 1990 ------ (Rs Mill) ----- NPV rrTJith" 99 173 203 NPV "tJithout" 76 104 119 Incremental NPV 23 69 83 Allocation to Surface Water 5 17 21 Allowance for Infrastructure and Services 1 2 2 Increase in O&M Expenditure 2 3 3 Total Associated Costs 8 22 26 Incremental Net Benefits Attributable to the Project 15 47 58 1/ For details see Appendices 4.'and 5;_pagesoidand 2. 2.155 A; comparison with the alternative of private tubewell development (see.Appendix 6, pag6sa2.-and 3) indicated 2thaf tdfte-edu&e- allowance for Iall costs, the incremental net benefits attainable from continued pi-vate tube- well development would be about the same as that of the public tubewell project up to 1975. For later reference years the private tubewell alterna- tive would appear capable of producing atleast 70 percent of the incremental net benefits attainable from the public tubewell project. Over the lifetime of a public project the present worth of incremental net benefits would com- pare as follows: Incremental net benefits - public development Rs. 259 million Incremental net benefits - private development Rs. 178 million If private investment in tubewells could be sufficiently stimulated to reach the ultimate ceiling of private installations of 3,790 1/ wells within a reasonable period of time this form of development would be expected to make a contribution to growth of agricultural production comparable to or exceeding that of a public project. (h) Farmer Incentives 2.156 The benefits obtainable under the project should provide consider- able incentives for farmers. Based on ten acres CCA, farm incomes would, on average, be expected to improve as follows: 1/ Estimated by IACA; VoIume 12, Annexure 15B, Shujaabad Tubewell Project,. page '40. 'I a %0: Average Changes in Farm Income per 10 Acres of CCA "tWithin" . the Project Area Under Alternative Forms of Development 1975 1985 1990 W/out Private Public W/out Private Public W/out Private Public Cropping Intensity (percent) 103 126 133 103 126 149 103 126 149 GPV (Rs.) 2,962 3,638 3,846 4,273 5,636 7,113 4,910 6,546 8,349 On-Farm Expenditure (Rs.) 948 1,163 1,231 1,539 2,029 2,561 1,768 2,356 3,oo6 Water Charges 1/ (Rs.) 296 536 534 296 536 545 296 536 545 Total Current Expenditures (Rs.) 1,244 1,699 1,765 1,835 2,565 3,106 2,064 2,892 3,551 Farm Income (Rs.) 1,718 1,939 2,081 2,438 3,071 4,007 2,846 3,654 4,798 1T/ Water charges for the "Without" case consist of: (i) Surface water charges at Rs..,7per acre cropped Rs. 72 (ii) O&M tubewells existing in 1972 Rs. 166 (iii) Amortization at six percent over ten years of existing wells Rs. 58 TOTAL Rs. 296 Water charges for private tubewell development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 88 (ii) O&M for private tubewells Rs. 333 (iii) Amortization at six percent over ten years for private wells Rs. 115 TOTAL Rs. 536 Water charges for full Public Tubewell Development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 104 (ii) O&M and amortization (six percent over 20 years) Rs. 441 TOTAL Rs. 545 ANNEX 4.1 Page 99 sJhile the results shown above are only averages for the project area, the table indicates that farm incomes would be expected to develop along similar lines, in earlier years, for the public and the private alternative of groundwater development, with public development yielding slightly higher farm incomes. In 1985 and thereafter, farm income under the public program vDuld be higher. Individual farmers with private tubewells at their disposal would be expected to achieve and exceed the average farm incomes projected under public development. However, unless private installations could be accelerated beyond the rate projected in this review average incomes would remain below those projected for public development. In absolute terms, under the public project, farm incomes would grow from Rs. 2,000 to nearly Rs. 4,800 per farm of ten acres CCA. This should be sufficiently attractive to enlist farmers' active cooperation under the project. (i) Project Evaluation 2.157 On the basis of the modifications made to the IACA evaluation procedures discussed in Chapter II, A above, the Bank Group has assessed the likely results of the public project as follows: Results of Project Evaluation - Public Project Incremental NPV (Rs Mill; Present worth at 8%o) 259 Benefit/Cost Ratio (at 8%) 4.0 Rate of Return: a) exclusive of potential private savings 19% b) inclusive of potential private savings 31% This compares to IACA's assessment -/ of incremental NPV before allocation of benefits to surface water of Rs. 593 million and a rate of return on incremental costs over the "without" case of 60 percent. The calculations pertaining to the Bank Group' s evaluation are given in Appendix 5. 2.158 The private alternative has also been evaluated by the Bank Group in accordance with the procedures discussed in Chapter II, A above. On the basis of this evaluation, continued private development would give a rate of return of 74 percent (because of considerably lower investment requirements) and the scale of incremental NPV attainable under the private alternative would be only 30 percent below that attainable under the public tubewell project. Details of the evaluation of the private alternative are given in Appendix 6, page 3. (j) Conclusion 2.159 Though only indicative in the absence of a detailed appraisal, the rate of return of 19 percent on total investments in the public tubewell project, after allowance for benefits attributable to increased surface 1 For details of IACA's evaluation see IACA Comprehensive Report, Volume 12, Annexure 15B, Chapter 4 (public project) and Appendix I (private alternative). ANN'EX 4.1 Page 100 supplies, appears satisfactory. The Bank Group has, therefore, tentatively included the Shujaabad project in the Action Program as scheduled. While private tubewell development would appear capable of achieving a higher rate of return as well as making a substantial contribution to agricultural production the high water table in three-quarters of the project area together with extensive soi2s salinity may require the more efficient drainage cap- ability of a public project. Prima facie, however, the Shujaabad project area would offer considerable opportunities for private development. Should reductions in public outlays for groundwater development become necessary towards the end of the Third Plan period this area could be left to private development. ileanmhile, project preparation, including monitoring of private tubewell development should be initiated in due course and the decision to implement a public project in this area should be reviewed on the basis of the findings of detailed studies as well as the availability of public resources. ANNEX 4.1 APPENDIX 1 INDUS SPECIAL STUDY Page 1 Public Tubewell Project - Shujaabad Revised Cost Estimate and Financial Requirements Local Currency Foreign Exchange Total (Rs.i.) (Rs.Mztll. (US$ Equiv.) ( (Rs.Mil.) (US$ EQuiv.) ProJect Preparation 2/ 2.5 2.2 0.46 4.7 0.99 Tubewell Project Tubewells 16.0 23.1 4.86 39.1 8.23 Appurtenant Structures 6.3 1.0 0.21 7.3 1.54 Watercourse ImprojrWnent 3/ 3.8 - - 3.8 0.80 Duties and Taxes 4 3.6 - - 3.6 0.76 Engineering and Administration / 3.0 2.4 0.50 5.4 1.14 Subtotal 32.7 26.5 5.58 59.2 12.46 Contingencies 6/ 6.5j- 5 1.11 U1.8 2.49 Total Tubewell Project 39.2 31.8 6.69 71.0 14.95 Electrification Transmission 1.8 2.9 0.61 4.7 0.99 Distribution 8.6 13.4 2.82 22.0 4.63 Duties and Taxes i 4.9 - - 4.9 1.03 Engineering and Administration i 1.5 1.6 0.33 3.1 0.65 Subtotal 16.8 17.9 3.76 34.7 7.30 Contingencies 6/ 3.4 3.6 o075 7.0 1.47 Total Electrification 20.2 21.5 4.51 41.7 8.77 Interest During Construction Tubevell Project 7/ 8.6 - - 8.6 1.81 Electrification 87 2.5 _ ! 2.5 0.52 Subtotal 11.1 - - 11.1 2.34 TOTAL FINANCIAL REQUIREMENTS 73.0 1.68 827.05 1/ Rate of exchange used 1:4.75. / Estimated at 5% direct costs before contingencies. Estimated at Rs. 10/acre CCA. F Estimated at-15% of direct costs before engineering and administration. Estimated at 10% of direct costs after duties and taxes. E Estimated at 20% of direct costs after duties and taxes and engineering and administration. 7/ Estimated at 6% per anlmn for two-year period for each individual phase of tubewell construction. 8/ Estimated at 6% per amniu for one year period. APPENDIX 1 Page 2 INDUS SPECIAL STUDY Pablic Tubewell Project - Shujaabad Estimated Expenditure Schedule Based on Bank Group Cost Estimates 1969/70 1970/71 1971/72 1972/73 TOTAL ------------------ (Rs. Million) --------------- Project Preparation 4.7 - - Tubewells, Structures and Watercourses L1.4 24.9 13.9 - 50.2 Duties and Taxes 0.8 1.8 1.0 - 3.6 Engineering 1.2 2.7 1.5 - 5.4 Contingencies 2.7 5.8 3.3 - 11.8 Subtotal 16.1 35.2 19.7 - 71.0 Interest during construction 1.0 3.1 3.3 Total Tubewell Project 17.1 38.3 23.0 Electrification - 6.1 13.2 7.4 26.7 Duties and Taxes 1.1 2.4 1.4 4.9 Engineering and Administration - 0.7 1.5 0.9 3.1 Contingencies 1.6 3.5 1.9 7.0 Subtotal 9.5 20.6 11.6 41.7 Interest during construction o 0.6 1.2 0.7 2.5 Total Electrification - 10.1 21.8 12.3 44.2 TOTAL FINANCIAL REXUIRENENTS 21.8 48.4 44.8 13.5 128.5 1/ Incurred prior to beginning of construction. INIDJS SPECIAL STUDY Public Tubewell Project - Shujaabad Comparative Summary Water Budget "With" the Project and "Without" Additional Tubevells 1965 1975 1985 Net Increase "With" fWithout" "With" "Without" "With" the Project the Additional the Additional Surface Ground- Existing Project Tubewells Project Tubewells Water water Total -____(MAF)- Surface Supplies: Total: o.64 0.79 o.64 0.82 o.64 0.18 - 0.18 ----------------------------------------------------------------------__-----__-------------------------------------- 1/ Thereof during October to May: 0.27 0.35 0.27 0.34 0.27 0.07 - 0.07 2/ 3/ 2/ Groundwater Supplies: 0.24 0.78 o.36- 0.98 0.36 - 0.62 0.62 Total Supplies: 0.88 1.57 1.00 1.80 1.00 0.18 0.62 O.80 V/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 1,680 private tubewells in operation by 1969 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.24 MAF) as well as those Of further increase in private groundwater extraction. R a_ PUBLIC TUBEWELL PROJECT: SHUJAABAD WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL 1 -WATER COURSE-4>j FIELD \TRANSPIRATION EVAPORATION | EVAPORATION I EVAPORATION 123 I 00 0=0 0 < WARAIN If ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 09 Wj 1 05 0.82 180 162 1.14 RIVER RECHARGE 1 RE- AII CHARGE IRRIGTION -RECHARGE de-RECHARGE PUMPING If <0.5M0-18 98 0.09 003 GROUND WATER RESERVOIR mm DRAI NAGE PUMPING (R) IBRD - 3331 m INDUS SPECIAL STUDY Public Tubewell. Project - Shujaabad Yield ProJections "With" the Project (Mwiuds per acre) IACA ProJections Bank Group Projections Present -1965 1969 1975 1985 2000 1969 1975 1985 2000 Kharif: Coarse Rice 14.0 14.3 18.0 30.0 -40.0 15.1 18.5 26.7 40.0 Cotton 8.0 8.5 12.0 18.5 24.0 8.6 10.5 15.3 24.0 Maize- 10.0 11.0 15.0 26.0 38.0 10.8 13.2 19.7 38.0 Fodder 200.0 220.0 290.0 430.0 550.0 216.4 263.5 378.8 550.0 Pulses 5.0 5.3 7.0 10.0 14.0 5.4 6.5 9.5 14.0 Jowar 6.o 6.4 8.5 - - 6.5 7.8 - - Rabi: Wheat 13.0 13.6 19.0 29.0 36.0 14.1 17.1 28.2 36.0 Fodder 1480.0 485.0 640.0 840.0 1000.0 519.4 632.4 882.0 1000.0 Oilseeds 6.0 6.1 7.5 12.5 17.0 6.5 7.8 11.3 17.0 Gram 7.0 7.2 9.0 14.0 18.0 7.6 9.2 13.1 18.0 Maize 13.0 15.0 15.0 26.0 38.0 - 13.2 19.7 38.0 Perennials: Sugarcane (our) 30.0 45.0 45.0 65.o 80.0 32.5 39.5 56.6 80.0 Fruit 80.0 80.0 60.0 130.0 170.0 86.6 120.0 130.0 170.0 Vegetables 140.0 140.0 170.0 200.0 250.0 151.5 170.0 200.0 250.0 CID 1 t APPENDIX 3 Page 2 INDUS SPECLAL STUD! Public Tubewell Project - Shujaabad Yield Projectiona "Without" Additional Tubewells (Maunds per Acre) Present IACA Projection Bank Group Projection 1965 1969 1975 1985 2000 1969 1975 1985 2000 Kharif: Coarse Rice 14.0 14.3 14.5 22.5 35.0 15.1 18.5 26.7 40.0 Cotton 8.0 8.5 9.1 13.0 16.0 8.6 10.5 15.3 24.0 Maize 10.0 11.0 12.5 14.5 18.0 10.8 12.2 14.9 20.0 Fodder 200.0 220.0 240.0 270.0 320.0 216.4 243.8 297.2 400.0 Pulses 5.0 5.3 5.6 7.0 9.0 5.4 6.1 7.4 10.0 Jowar 6.o 6.4 7.0 8.6 11.0 6.5 7.3 8.9 12.0 Rabi: Wheat 13.0 13.6 14.5 18.0 24.0 14.1 17.1 28.2 36.0 Fodder 480.0 485.0 490.0 600.0 750.0 519.4 585.1 713.3 960.0 Oilseeds 6.0 6.1 6.3 8.3 11.5 6.5 7.3 8.9 12.0 Gram 7.0 7.2 7.4 9.5 13.0 7.6 8.5 10.4 14.0 Maize 10.0 11.0 12.5 14.5 18.0 10.8 12.2 14.9 20.0 Perennials: Sugarcane (Our) 30.0 45.0 33.0 44.0 56.0 32.5 39.5 56.6 80.0 Fruit 80.0 60.01/ 85.0 105.0 130.0 86.6 120.0 130.0 170.0 Vegetables 140.0 170.0 150.0 170.0 200.0 151.5 170.0 200.0 250.0 1/ Yields based on increased acreage; not all of which win be bearing fruit. INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Revised Projection of Production "With" the Project 1975 1985 1992 Cropped Yields Production GPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 ads) (Es. mill) Kharif: Cotton 94,000 9.5 893.0 26.790 172,300 14.1 2,429.4 72.882 188,500 17.3 3,261.0 97.830 Maize lO,h00 12.7 132.1 2.hh4 31,300 18.7 585.3 10.828 31,300 26.0 813.8 15.055 Fodder 73,100 278.8 20,380.3 _ 83,500 h12.7 34,460.4 - 87,100 451.7 39,343.1 Pulses and Groundnuts 20,900 10.3 217.1 5.071 20,900 18.1 379.3 9.091 20,900 2h.2 499.5 12.110 Jowar/Bajia 26.100 7.6 198.4 2.182 - - - - - - Sub-total: 224,500 36.487 308,000 92.801 327,800 124.995 Rabi: Wheat 219,200 16.1 3,529.1 45.878 208,800 25.1 5,240.9 68.132 182,000 29.0 5,278.0 68.614 Fodder 52,200 570.2 29,764.4 - 62,600 844.o 52,834.4 - 66,200 867.9 57,455.0 - Oilseeds 26,100 8.2 214.0 5.029 31,300 12.2 381.9 8.975 31,300 11.2 44h.5 l0.446 Gram 15,700 10.8 169.6 2.417 15,700 16.0 251.2 3.580 15,700 16.9 265.3 3.780 Maize - - - - 10,400 18.7 194.5 3.598 12,600 26.0 327.6 6.061 Green Manure - ,800 - - - - Sub-total: 313,200 53.324 370,600 84.285 35o,80o 88.901 Perennial: Sugarcane (gur) 15,700 40.6 637.4 11.473 15,700 60.0 942.0 16.956 15,700 68.4 1,073.9 19.330 Fruit 7,800 96.8 755.0 8.305 15,700 130.0 2,0041.0 22.451 15,700 147.3 2,312.6 25.439 Vegetables 2,600 170.0 h42.0 4.862 10,400 200.0 2,080.0 22.880 10,400 222.0 2,308.8 25.397 Sub-total: 26,100 24.64O 41,800 62.287 41,800 70.166 GPV of Crops 114.451 239.373 284.062 Animal Husbandry Y/ 52.137 106.520 144.019 Total GPV 166.588 345.893 428.081 On-Farm Costs 2/ 53.308 124.521 154.109 Total NPV 113.280 221.372 273.972 1/ Based on IACA projection except for 1975. I/ 1975 - 32% of total GPV. 1985 - 36% of total GPV. 1992 - 36% of total GPV. INDS SPZIOAL STUD! Public Tubeiwell Pro1eet - Sujblaabad Revised Projection of Prodaucton "Without" the Project 1971 1975 1985 1990 Cropped Tield Production OPV Yie- d Production oPn Yield Production GPV Yield Production OF7 Acres (mds/aore) ('000 mds) (Ra. mill) (mda/aore) ('000 mdei) (Rs. mill) (mde/aore) ('000 mdt) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) mharifi Coarse Rioe 3, 800 15.8 60.0 630 18.5 70.3 608 26.7 101.5 878 30.5 115.9 1,002 Cotton 85,l3006 9.0 767.7 23,031 10.5 895.6 26,868 15.3 1,305.1 39,153 17.8 1,518.3 45,549 Kaise , 160 11.3 85.9 1,589 12.2 92.7 1,715 14.9 113.2 2,094 16.4 124.6 2,305 Fodder 5 225;'2 11,958.1 - 243.8 12,945.8. 297.2 15,781.3 - 328.0 17,416.8 - Pulses .5S'7,00 5'.6 31.9 670 6.1 34.8 731 7.4 42.2 886 8.2 46.7 981 Jow r/BDjra 0 1.,100d 6.'7 127.3 1.400 7.3 138.7 1.526 8.9 169.1 1.860 9.8 186.2 2.048 Subtotal i714$00, 27,320 31,448 44,871 51,885 Rabit Wheat 128,900 14.6 1,881.9 24,465 17.1 2,204.2 28,655 28.2 3,635.0 47,255 30.6 3,944.3 51,276 Fodder 52,700 540.5 28,484.4 585.1 30,834.8 - 713.3 37,590.9 - 787.2 41,485.4 - Oilseeds 5,700 6.7 38.2 898 7.3 41.6 978 8.9 50.7 1,191 9.8 55.9 1,314 Orem 5.700 7.9 45.0 641 8.5 48.4 690 10.4 59.3 845 11.5 65.6 935 Subtotal 193,000 26,004 30,323 49,291 53,525 Perennialel Sug roane 7,600 33.8 256.9 4,624 39.5 300.2 5,404 56.6 430.2 7,744 63.5 482.6 8,687 Fruit 3,000 92.5 277.5 3,052 120.0 360.0 3,960 130.0 390.0 4,290 142.1 426.3 4,689 Vegetablee 1.900 157.6 299.4 _293 170.0 323.0 3.5 200.0 380.0 4.180 215.1 408.7 4.496 Subtotal 25,000 10,969 12,917 16,214 17,872 OPn of Crops, 64,293 74,688 110,376 123,282 Animal Husbandry 32.700 37.600 51,600 62.800 TOTAL. On 96,993 112,288 161,976 186,082 On Pam costs 31.038 35,932 58.311 66.990 TOTAL NP 766 10366592 Based an IACA Projection. 13l971 - 32% of OPV. 1975 - 32% of OPV. 1985 - 36% of OPn. 1990 - 36% of OPT. IND'JS SPECIAL STUDY Public Tubewell Project - Shujaabad Calculation of Rate of Return Incremental Potential Attributable Rate of Return NPV NPV Cost of I/ NPV after Infra- Savings From Increment Capital Net Benefits Project Costs "With" "Without" Incremen- Additional Allocation to structure & 0 & M Attributable Private Tube- Including Costs of 3/ )h/ 31 / Year Project Project tal NPV Surface Water Surface Water Services 2/ Costs Increment wells P.P.S. Project at 187 at 28% at 18% at 287 ----------(Rs. million)---------- 1970 _- - - - 7.9 7.9 2.0 - 6.o 19.0 15.2 1971 65.96 65.96 - - - 2.30 -2.2 7.9 5.7 33.4 -1.6 3.3 27.0 19.5 1972 74l.6 68,1 6.2 6.2 0.2 7.40 -1.2 7.9 6.7 18.7 -0.7 3.0 12.6 8.4 1973 82.7 71.0 11.7 11.7 o.4 9.33 2.0 7.9 9.9 1.0 3.14 1974, 91.0 73.6 17.4 - 17.h o , 6 9.33 7.5 7.9 15,4 3.3 1 .0 1975 99.1 76.4 22.7 h.7 18.0 o.6 7.89 9.5 7.9 17.4 3.5 3.5 1976 106.9 78.5 28.4 6.6 21.8 0.8 8.03 13.0 7.9 20.9 h.1 3.2 1977 115.8 81.0 34.8 7.6 27.2 1.0 8.17 18.0 7.9 25.9 h.8 3.0 1978 122.8 83.5 39.3 9.2 30.1 1.0 8.32 20.8 7.9 28.7 h.7 2.6 1979 131.1 86.1 45.0 11.0 3iX.0 1.2 8.46 24.3 7.9 32.2 t.6 2.0 1980 138.4 88.8 t19.6 10.9 38.7 1.4 8.61 28.7 7.9 36.6 b.6 1.9 1981 144.8 91.6 53.2 11.9 4l.3 i.4 8.75 31.1 7.9 39.0 4.3 1.6 1982 15l.5 9b.4 57.1 13.1 U4.0 1.5 8.90 33.6 7.9 hl.5 3.9 1.3 1983 158.5 97.i4 61.1 14.3 46.8 1.6 9.05 36.2 7.9 44i.1 3.5 1.0 1984 165.9 loo.4x 65.5 15.7 49.8 1.7 9.20 38.9 7.9 46.8 3.2 0.8 1985 172.5 103.7 68.8 16.7 52.1 1.8 9.33 4,1.0 7.9 h8.9 2.9 0.7 1986 178.1 106.5 71.6 17.5 54.1 1.9 9.33 b2.9 7.9 50.8 2.5 0.5 1987 183.9 109.5 74.4 18.2 56.2 2.0 9.32 1,1,.9 7.9 52.8 2.2 0.4 1988 189.9 112.6 77.3 19.0 58.3 2.0 9.32 1,7.0 7.9 5h.9 2.0 0.3 1989 196.1 115.8 80.3 19.8 60.5 2.1 9.30 b9.1 7.9 57.0 1.8 0.3 2990 202.5 119.1 83.4 20.6 62.8 2.2 9.30 51.3 7.9 59.2 1.5 0.2 56.1 1,3.0 58.6 413.1 Rate of Return - 18% Rate of Return - 28% V/ Charged at average value per acre foot of total incremental water availability. Incremental Value/acre Foot Incremental Water of Incremental NPV Avallability Availability (Rs. mill) F (Rs. 1975 22.7 o.6 37.8 1980 IJ9.6 0.8 62.0 1985 68.8 0.8 86.o 1990 83.14 0.8 10h.3 Absorption of surface water based on IACA intensity projections beginning in 1975 at 0.125 MAF to 1990 at 0.198 MAF. 2/ Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includes: 1.85% of attributable increment for roads. x 1.65% of attributable increment for support-ng services. Charged on incremental NPV after allocation to surface water only. 3/ Excluding Potential Private Savings 14/ Including Potential Private Savings, INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Benefit: Cost Ratio Incremental NPV Project Costs In- After Allocation cluding O&M, Services, Discounted at 8% Year to Surface Water and Infrastructure Benefits Costs (----- (Rs.IMill.)---- 1/ 2/ 1/ 2/ 1970 20.0 12.1 - 18.5 11.2 1971 _ 35.6 27.7 - 30.5 23.7 1972 6.2 26.1 18.2 4.9 20.7 14.5 1973 11.7 9.7 1.8 8.6 7.1 1.3 1974 17.4 9.9 2.0 11.8 6.7 1.4 1975 18.0 8.5 0.6 11.3 5.4 0.4 1976 21.8 8.8 0.9 12.7 5.1 0.5 1977 27.2 9.2 1.3 14.7 5.0 0.7 1978 30.1 9.3 1.4 15.1 4.6 0.7 1979 34.0 9.7 1.8 15.7 4.5 0.8 1980 38.7 10.0 2.1 16.6 4.3 0.9 1981 41.3 10.2 2.3 16.4 4.0 0.9 1982 44.0 10.4 2.5 16.2 3.8 0.9 1983 46.8 10.7 2.8 15.9 3.6 1.0 1984 49.8 10.9 3.0 15.7 3.4 0.9 1985 52.1 11.) 3.2 15.2 3.2 0.9 1986 54.1 11.2 3.3 14.6 3.0 0.9 1987 56.2 11.3 3.4 14.1 2.8 0.9 1988 58.3 11.3 3.4 13.5 2.6 0.8 1989 60.5 11.4 3.5 13.0 2.4 0.8 1990 62.8 11.5 3.6 12.5 2.3 0.7 258.5 143.5 64.8 B/C ratio at 8% 1/ = 1.8 B/C ratio at 8% 2/ = 4.0 3 1/ Before deducting Potential Private Savings. 2/ After deducting Potential Private Savings. V 3/ If potential private savings are added to benefit stream rather than netted out from cost 1! stream, the Benefit/Cost ratio would be 2.3 as shown below: x Present worth of benefits: 259.0 Present worth of savings : 78.7 Total 337.7 B/C ratio 8 2.3 INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Private Alternative - Rate of Installation and Incremental Water Availability 21 Number of Increase in Private Incrementa1 Wells in,/ Wells during Project Replacement of Increnental Number Water Availability Year Operation- Period Additional Wells of Wells in Operation (KkW) (1965 930 (1966 1,116 20% (1967 1,339 (1968 1,607 (1969 1,928 321 321 0.07 (1970 2,102 17h 495 0.11 (1971 2,291 189 68h 0.15 9% (1972 2,497 206 890 0.20 (1973 2,722 225 1,115 0.25 (1974 2,967 245 1,360 0.31 (1975 3,234 267 1,627 0.37 1976 3,234 1,627 0.37 1977 3,234 1,627 0.37 1978 3,234 1,627 0.37 1979 3,234 321 1,627 0.37 1980 3,23h 174 1,627 0.37 1981 3,23h 189 1,627 0.37 1982 3,234 206 1,627 0.37 1983 3,234 225 1,627 0.37 1984 3,234 2h5 1,627 0.37 1985 3,23h 267 1,627 0.37 1986 3,23h _ 1,627 0.37 1987 3,234 1,627 0.37 1988 3,23h _ 1,627 0.37 1989 3,231 321 1,627 0.37 1990 3,234 174 1,627 0.37 1/ Rate of installation: 20% p.a. compound growth between 1965 and 1969. This rate of installation accepts the X 9% p.a. compound growth between 1969 and 1975. ceiling for coverage with private tube- F-i = wells stated in the IACA project report. x 0" 2/ Assumed rate of average utilization: 304 Each well would pump for about 2,630 hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Estimate of Incremental NPV of Private Tubewell Alternative Acreage Cropped Acreage Cropped Acreage Cropped Receiving APly tl. &tp nsion of Under "With" Under "Without" Overall NPV of Private NPV Increment WatbiLr Acreage] Crpped-2/ Condition Condition Intensity Alternative a "Without" NPV Year (!e0i0)l ('000,w) ('000) ('000) Acres (Rs. mill.) (Rs. mill.) (Rs. mill.) 1969 26.9i. 16.8 43.7 363.1 406.8 107 63.8 61.6 2.2 1970 ,421.-3+', 26.8 69.1 347.7 416.8 110 67.7 63.8 3.9 1971 57.'7 ' 36'.'1 93.8 332.3 426.1 112 71.5 66.0 5.5 1972 76.9 O8.1 125.0 313.1 438.1 116 76.4 68.4 8.0 1973 96.2 60.1 156.3 293.8 450.1 119 81.5 71.0 10.5 1974 119.2 74.5 193.7 270.8 464.5 123 87.4 73.6 13.8 1975 142.3 88.9 231.2 247.7 478.9 126 93.8 76.4 17.4 1976 142.3 88.9 231.2 247.7 478.9 126 97.3 78.5 18.8 1977 142.3 88.9 231.2 247.7 478.9 126 101.0 81.0 20.0 1978 142.3 88.9 231.2 247.7 478.9 126 104.9 83.5 21.4 1979 142.3 88.9 231.2 247.7 478.9 126 109.0 86.1 22.9 1980 142.3 88.9 231.2 247.7 478.9 126 113.2 88.8 24.4 1981 142.3 88.9 231.2 247.7 478.9 126 118.2 91.6 26.6 1982 142.3 88.9 231.2 247.7 478.9 126 122.1 94.4 27.7 1983 142.3 88.9 231.2 247.7 478.9 126 126.9 97.4 29.5 1984 142.3 88.9 231.2 247.7 478.9 126 131.8 100.4 31.4 1985 142.3 88.9 231.2 247.7 478.9 126 136.7 103.7 33.0 1986 142.3 88.9 231.2 247.7 478.9 126 140.8 106.5 34.3 1987 142.3 88.9 231.2 247.7 478.9 126 145.2 109.5 35.7 1988 142.3 88.9 231.2 247.7 478.9 126 149.6 112.6 37.0 1989 142.3 88.9 231.2 247.7 478.9 126 154.1 115.8 38.3 1990 142.3 88.9 231.2 247.7 478.9 126 158.8 119.1 39.7 I/ Based on existing water depth of 2.6 acre feet on historical intensity. 2/ EXpansion in addition to historical intensity of full delta (3.2 acre feet). 3/ Estimated by adding NPV/acre cropped jof acreage cropped, continuing with underwatering ("without" condition) to NPV/acre cropped of acreage cropped at full delta ("with" condition). (DI INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Rate of Return of Private Tubewell Alternative Benefit/Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capital Total Benefits Costs Benefits Costs Year NPV and Services !/ Costs Costs 3 Costs at 8% at 8% at 74% at 74% (RS. Mil. ) 1969 2.2 0.1 1.3 3.2 4.6 2.0 4.3 1.3 2.6 1970 3.9 0.1 1.9 1.7 3.7 3.3 3.2 1.3 1.3 1971 5.5 0.2 2.7 1.9 4.8 4.4 3.8 1.0 0.9 1972 8.0 0.3 3.5 2.1 5.9 5.9 4.3 0.9 o.6 1973 10.5 0.4 4.3 2.3 7.0 7.1 4.8 0.7 0.4 1974 13.8 0.5 5.3 2.5 8.3 8.7 5.2 0.5 0.3 1975 17.4 o.6 6.3 2.7 9.6 10.2 5.6 0.4 0.2 1976 18.8 0.7 6.3 - 7.0 10.2 3.8 0.2 0.1 1977 20.0 0.7 6.3 _ 7.0 10.1 3.5 0.1 _ 1978 21L4 0.7 6.3 - 7.0 9.9 3.2 0.1 _ 1979 22.9 0.8 6.3 3.2 10.3 9.8 4.4 0.1 _ 1980 24.4 0.9 6.3 1.7 8.9 9.7 3.5 - - 1981 26.6 0.9 6.3 1.9 9.1 9.8 3.3 - - 1982 27.7 1.0 6.3 2.1 9.4 9.4 3.2 - - 1983 29.5 1.0 6.3 2.3 9.6 9.3 3.0 - - 1984 31.4 1.1 6.3 2.5 9.9 9.2 2.9 - - 1985 33.0 1.2 6.3 2.7 10.2 8.9 2.8 - - 1986 34.3 1.2 6.3 - 7.5 8.6 1.9 - - 1987 35.7 1.2 6.3 - 7.5 8.3 1.7 - - 1988 37.0 1.3 6.3 - 7.6 7.9 1.6 - - 1989 38.3 1.3 6.3 3.2 10.8 7.6 2.1 - - 1990 39.7 1.4 6.3 1.7 9.4 7.3 1.7 _ - 177.6 73.8 6.6 6.4 B/C Ratio at 8%- 2.4 - 1/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. 2/ Based on average annual O&M costs per tubewell of Rs. 3,900 3/ Based on average cost per tubewellof Rs. 10,000 and assumed rc.te of installation. I I ANNEX 4.1 Page 101 6. The Ravi Syphon - Dipalpur Link Project (a) The Project 2.160 The project is located in the Bari Doab immediately south of Lahore (see Map)l,'.It-comprises the'Ravi Syphon Dipalpiur (RBD) Link command and covers a culturable commanded area (CCA) of 595,000 acres on the right bank of the link. The project would provide additional irriga- tion supplies and water table control for the CCA included which would lead to an increase in the annually cropped acreage from presently 672,000 acres to 893,000 acres in 1985. The project area is commandable by the Ravi Syphon Dipalpur Link canal. The canal is presently served from Madhopur Barrage on the Ravi River, and rabi waters will continue to be diverted to the project area until 1970. After 1970, all surface deliveries to the project area are scheduled to come from the Marala headworks on the Chenab River. Because of the replacement works presently under construction and the redistribution of river supplies the surface water availability to the project area is not expected to alter appreciably until Tarbela comes into operation. 2.161 The distribution of the groundwater quality in the project area is about as follows: Groundwater Quality Zones of the Project Groundwater Quality Project Area Zone Percent '000 Acres Less than 1,000 ppm TES 43 257 1,000 - 3,000 ppm TDS 45 265 More than 3,000 ppm TES 12 73 TOTAL 100 595 It should be noted that mixing would be required in 45 percent of the project area. The water ta,le is ten feet, or less, from ground level in 30 percent of the area (178,00Q'acr,es). 2.162 Land tenure,an1d farm size statistics are only available for the Lahore District. The distribution1of farm sizes and tenure in this district is as follows: ANNEX 4.1 Page 102 Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 acres 55 16 5 to 25 acres 41 66 Over 25 acres 4 18 Owner operated 35) Owner cum tenant 22) Tenant operated 43 55 The average farm size in the area is about seven acres which is smaller than average for the Punjab. Less than half the farms and the culturable area is owner-operated. Fragmentation of farms is fairly extensive. Private tubewell development has been very active in the area in the past few years. By 1965 about 1,200 private tubewells had been installed in the project area providing additional water to about 20 percent of the area. 2.163 The project proposal includes the installation of 780 public tube- wells, and the enlargement of canals serving the mixing zones. The project would increase the water availability in the project area from presently 1.04 MAF to 2.08 NAF at full development. Of the increase of 1.04 MAF about 0.34 IMtAF would be additional surface supplies and 0.70 MAF would be provided by public tubewells above existing private groundwater exploitation. Gross output of the public wells would be 0.98 MAF but this would be partially in substitution for private wells. The availability of total additional irri- gation supplies of 1.04 MAF would lead to an increase in annual cropped acreage from 672,000 acres in 1965 to 893,000 acres at full delta in 1985. (b) Physical W[orks 2.164 The physical works of the project would consist of the following: (i) installation of 780 public tubewells and appurtenant struc- tures. The tubewells -nuld be divided as follows: 440 wells with an average capacity of four cusecs would be in the fresh groundwater zone of the project area (covering 257,000 acres, or 43 percent of the CCA); 340 wells with an average capacity of 2.5 cusecs would be in the remaining area underlain by groundwater requiring mixing with surface water; ANNEX 4.1 Page 103 (ii) enlargement of those channels supplied from the RBD Link, which feed the zones where the quality of deep ground- water is greater than 1,000 ppm TDS. These zones cover 57 percent of the projec-t area but the actual remodelling would be more extensive in order to include all parts of the distribution system affected by enlargement. 1/ Iithout such enlargement the introduction of the additTional surface water required to achieve projected cropping intensity would not be possible. Drainage of saline zones included under the project L\ould become necessary as development proceeds and especially after completion of canal enlarge- ment. However, IACA does not foresee any drainage require- ment in these areas before 1975, and, therefore, no drainage works have been included in the project. The project area wvould, however, benefit from the implementation of the Sukh Beas Drainage Scheme. (See Chapter III). (c) Construction Schedule 2.165 The installation of the public tubewells would extend over approx- imately four years. On the assumption that the project would be brought into operation in accordance with IACA's basin-wide water development program, construction has been scheduled by IACA as follows: Preliminary Construction Schedule 1969/70 1970/71 1971/72 1972/73 --------------(Number of Wells)--------- Drilling and Construction 170 360 250 Electrification _ 170 360 250 Wells in Operation 170 530 780 In keeping with its assessment of the likely implementation capacity the Bank Group has in its Action Program delayed commencement of construction by one year. Construction would thus begin in the fiscal year 1970/71 and, generally following the above schedule, would be completed by 1973/74. Con- struction iould thus be completed by the end of the Fourth Plan period. Canal enlargement would be undertaken between 1970 and 1975, phased to distri- bute additional surface supplies at the time Tarbela water becomes available in the system. 1/ At a later-stae,- fter completion ofVthe project works, drainage will become necessay, according to IACA in some 40 percent of the area within the present project. ANNEX 4.1 Page 104 (d) Cost Estimates and Expenditure Schedule 2.166 The total cost of the project has been estimated by the Bank Group at about Rs. 209.6 million, equivalent to US$ 44.1 million. This would include the following: Summary Cost Estimates Local Foreign Currency Exchange Total -----(Rs. Mill)-------------- Project Preparation 4.6 3.0 7.6 Tubewells 20.3 29.8 50.1 Electrification 12.3 19.2 31.5 Canal Enlargement 29.4 4.4 33.8 Other Civil Wdorks 12.0 1.7 13.7 Subtotal 78.6 58.1 136.7 Overheads 17.7 5.1 22.8 Contingencies 18.3 12.0 30.3 Subtotal 36.0 17.1 53.1 Interest During Construction 19.8 - 19.8 TOTAL 134.4 75.2 209.6 Details of the cost estimates are given in Appendix 1, page 1. The foreign exchange component of the project would be about 36 percent of total project costs cr US$ 15.83 million equivalent. 2.167 Expenditures would be spread over approximately six years, with the greater portion being incurred in the first four. ANNEX 4.1 Page 105 Summary Expenditure Schedule Year 1 2 3 4 5 6 -- (Rs. Mill) ----------- Tubewells and Associated Wlorks 28.6 45.5 33.4 1.7 - - Electrification - 11.4 24.1 16.6 - - Canal Enlargement - 8.9 9.2 9.7 10.0 10.5 TOTAL 28.6 65.8 66.7 28.0 10.0 10.5 A more detailed expenditure schedule is given in Appendix j,ppage 2. (e) Recovery of Project Expenditures 2.168 On the basis of the above cost estimates a preliminary assessment has been made of the charges required to recover the total costs of this project over its lifetime. Including operation and maintenance expenditures the average annual rate of recovery would have to be about Rs. 22.8 million as shown below: Preliminary Assessment of Annual Costs for Operation and Maintenance and Recovery of Capital Annual Costs (Rs. Mill) Capital Costs l/ (Annuity at 6% over 20 years for Rs. 109.2 million) 9.5 Operation and Maintenance (Including costs, repairs, electricity and recovery of power investment) 10.0 Total Tubewell Costs 19.5 Recovery of Canal-W-Enl=argement Costs: Capital Costs (Anniity at 6% over 35 years for Rs. 48.3 mililion)- 3.3 TOTAL 22.8 1/ Based on recb-0f2,f-ihV6stmeht in tubewell project only, including project prep-aration- and interest during construction. ANNEX 4.1 Page 106 ' 2.169 Future water rates on water supplied from tubewells would have to be about Rs. 22 per cropped acre to recover total tubewell costs and O&M expenditures (Rs. 33 per acre CCA). Existing water rates on surface supplies average about Rs. 7 per cropped acre. Since the Ravi Syphon project includes canal enlargement, without which projected cropping intensities could not be achieved, an additional charge on surface water of about Rs. 4 per cropped acre would have to be levied in order to recover canal enlargement costs. Total water charges in the future, therefore, would have to be in the neigh- borhood of Rs. 33 per cropped acre or about Rs. 50 per acre CCA. This hDuld be about ten percent of the expected net value of production per cropped acre in 1985. (f) The Irrigation Regime 2.170 The mean quantities of surface and groundwater which would be made available at various stages of development with the project and the com- parison with the irrigation water availability likely to prevail if no further private tubewells were installed after 1967 are summarized in the water budget attached as Appendix 2. Groundwater exploitatibn by existing_private tubewells would be expected to discontinue following implementation of the project. The total water availability at watercourse heads under the public project would be about 2.08 MAF at the stage of full development. Of this 0.98 MAF would be provided by public tubewells and 1.10 MAF by canal supplies. Some 0.46 MAF of groundwater availability would substitute private exploita- tion, i.e. the net increase of groundwater availability due to the project would be 0.52 MAF. Surface water availability would increase from 0.76 MAF to 1.10 MAF or by 0.34 MAF. The lowering of the water table to an average depth of ten feet in the early stages of the project vDuld require the per- manent extraction of about 0.17 MAF of groundwater before additional surface supplies would be admitted into the project area. 2.171 As an alternative to the public tubewell project further irriga- tion development could take place through the continued installation of private tubewells in conjunction with canal enlargement. The following table shows water availability and potential intensity growth as projected for these alternative forms of groundwater development. ANNEX 4.1 Page 107 IJater Availability and Cropping Intensity 1975 and 1985 Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 4,352 780 4,352 1/ 780 Surface Supplies (MAF) 1.04 1.04 1.10 1.10 Annual Pumpage (MAF) 0.97 0.87 0.97 0.98 Total Annual WTatercourse Delivery (MAF) 2.01 1.91 2.07 2.08 Cropping Intensity (percent) 138 138 150 150 Acres Cropped ('000) 823 823 893 893 Acres Feet/Acres Cropped 2.4 2.3 2.3 2.3 1/ Private wells of one cusec capacity. This indicates that private groundwater development would be capable of pumping the estimated annual recharge. This would provide sufficient water table control, under both private and public tubewell development, for additional surface supplies to be admitted to the project area. Con- sequently, the combined water availability of irrigation water under private development at an earlier date may well induce farmers to a more rapid ex- pansion of cropped acreage than anticipated under the public project. (g) Agricultural Development 2.172 The project area at present, receives more regular supplies of surface water and thus has considerable advantage over the adjacent non- perennial Dipalpur commands. This advantage is particularly reflected in a higher rabi intensity and the total cropping intensity of 113 1/ percent in 1965 compares favorably with the overall average of 102 percent for the Bari Ioab. Agriculturally, it is the most advanced part of the Bari Doab. Further development of the area is mainly constrained by unreliable surface water supplies (particularly during the rabi season, which results in a considerable degree of underwatering) and a high water table of less than ten feet in 30 percent of the project area. The main kharif crops are rice, cotton, fodder and coarse grain. The main rabi crop is wheat, together with fodder (which is grown partially as a cash crop, sold in Lahore), oil seeds and gram. Yields are only slightly affected by waterlogging and salinity but average cotton and rice yields are still relatively low. The estimated value of crop production in 1965 was of the order of Rs. 94 million and live- stock production Rs. 57 million, giving a total GPV of Rs. 151 million (Rs. 254 per acre of CCA). l/ Counting perennial acreage twice, i.e. total acreage cropped is 672,000. Counting perennials only once the cropping intensity would be 102 percent. ANNEX 4.1 Page 105 2.173 During the period prior to the implementation of the project (1965 to 1969), the growth of agricultural production within the project area is expected to continue at the present trend. IACA projects an increase of private tubewell installation from about 1,185 in 1965, to about 2,185 in 1969. With the start of the project further private tubewell develop- ment would be expected to cease and 780 public wells would successively substitute the private wells in operation. At the same time the project would obviate the growth of private tubewell installations otherwise projected by IACA to reach about 3,440 in 1975 and 4,355 in 1985. 2.174 On the assumption that water availability would be enhanced as projected either under the public project or by means of private ground- water development, the cropping intensity for both forms of development would be expected to grow as follows: Growth of Cropped Acreage Cropped Acreage Year Intensity (%) ('000 acres) 1/ 1965 113 672 1969 (start of project) 118 703 1975 138 823 1985 150 893 1990 150 893 1/ Perennial crops counted twice. 2.175 For purposes of evaluation assessments have been made by the Bank Group of the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water develop- ment. In accordance with the cropping intensity, cropping patterns and yield growth projected for the respective cases (for details see Appendices 3 and 4) the GPV and the production increments would be expected to develop about as follows: ANNEX 4.1 Page 109 Growth of GPV 'lWith" and "Without" Groundwater Development Incre- "Without" "With" mental Additional Groundwater Groundwater Development GPV Crops Livestock Total Crops Livestock Total Total --------------------------- (Rs. Mill.) -------------------- 1965 94 57 151 -94 57 151 _ 1969 107 73 180 107 73 180 - 1975 135 90 225 161 99 250 35 1985 193 116 309 264 178 442 133 Over the life of the project the GPV would more than double under both forms of groundwater development, and the level of production would be about 40 percent higher than that of the "without" case. 1/ The GPV per acre CCA would increase from Rs. 254 (see para 2.172) to Rs. 742 as compared to Rs. 519 per acre CCA in the "without" case. 2.176 To achieve the above projected growth of production appreciable increases in on-farm expenditures would be expected, and great efforts would have to be made, to make available the quantities of non-water inputs required to sustain such growth. Allowing for the increased on-farm expenditures and associated current project costs as well as the allocation of benefits to additional surface water absorption the incremental net production value (NPV) for reference years would be expected to develop as follows: 1/ Detailed pro6jt-i`5ns='bf the GPV g-rowth at constant prices for the "with" and "without" cases are given in Appendix 4; pag&s-Idafid 2. ANNEX 4.1 Page 110 Incremental Net Benefits Attributable to Groundwater Development 1/ 1975 1985 1990 ------- (Rs. Mill.) --- NPV "with" 177 283 300 NPV "without" 153 197 229 Incremental NPV 2/ 24 86 71 Allocation to Surface Water - 4 16 24 Allowance for Infrastructure and Services 1 2 3 Increase in O&M Expenditures 1 2 2 Total Associated Costs 6 20 29 Incremental Net Benefits Attributable to Groundwater Development 18 66 42 1/ For details see Appendices 4-aOd 5, pages 1-and 2. 2/ This analysis does not include incremental benefits and costs due to canal enlargement. Canal enlargement benefits are sub-sunmed under the allocation of incremental benefits to additional surface water, (see Appendix 6, page.3). A comparison against the alternative private development (see Appendix 6, pages 2 and 3) indicates that, after due allowance for all costs, the incremental net benefits attainable from the public project would be only marginally greater than from continued private well installations. (h) Farmer Incentives 2.177 The benefits obtainable from further groundwater development should provide considerable incentives for the farmers. This is demonstrated in the following table which compares the growth of farm income under both forms of groundwater development (public and private) against that of no further water development. Based on ten acres CCA the farm income would be expected on average to improve as follows: AVERAGE CHANGES IN FARM IThC01E PER FARM OF 10 ACRES CCA WITHIN THE PROJECT AREA UNDER ALTERNATIVE FORMS OF DEVEI.OPNEMT 1975 1985 1990 Without Private Public Without Private Public Without Private Public Cropping Intensity (%) 118 138 138 118 150 150 118 150 150 Gross Production Value (Rs.) 3,781 4,370 4,370 5,193 7,430 7,430 6,017 8,705 8,705 On-Farm Expenditure (Rs.) 1,210 1,400 1,400 1,865 2,680 2,680 2,163 3,130 3,130 Water Charges (Rs.) 265 1/ 550 492 265 564 2/ 507 3/ 265 564 507 Total Current Expenditures (Rs.) 1,475 1,950 1,892 2,130 3,244 3,187 2,426 3,694 3,637 Farm Income (Rs.) 2,300 2,420 2,478 3,063 4186 4,243 3,589 5,011 5,068 1/ Water charges pertaining to the "without" additional tubewelTTcase consist of: (i) Surface water charge at Rs. 7 per acre cropped Rs. 83 (ii) O&M4 of tubewell existing in 1969 Rs. 135 (iii) Amortization at 6% over 10 years of existing wells Rs. 47 TOTAL Rs. 265 2/ Private development (1985 condition) (i) Surface water charge at Rs. 12 per acre cropped Rs. 180 (ii) O&14 for private wells Rs. 285 (iii) Amortization at 6% over 10 years of private wells Rs. 99 TOTAL Rs. 564 3/ Public development (1985 condition) (i) Surface Water charge at Rs. 12 per acre cropped Rs. 180 (ii) O&M and amortization at 6% over 20 years Rs. 327 X TOTAL Rs. 507 ANNEX 4.1 Page 112 The results given in the above table are averages over the whole project area only. It should be noted that development of private tubewells also assumes the introduction of relatively large amounts of additional surface water. This would not be possible unless existing canals are enlarged, as proposed in the public project. To the extent that such enlargement is not carried out, the water availability would not support the projected growth of cropping intensity and this, in turn, would have a strong detri- mental effect on farm income. In both cases, however, costs of enlargement are reflected in the water charges used. Furthermore, the table presents average figures for the whole project area. Farmers who possess private tubewells may very well exceed the average income but in areas where frag- mentation or groundwater quality provide less of an incentive for private development incomes may be much lower. The indications are, however, that both forms of groundwater development would enable attainment of similar levels of average farm incomes. (i) Project Evaluation 2.178 As discussed in Chapter II, A above the Bank Group's evaluation of projects is based on a somewhat different approach than that of IACA. The Bank Group has also divided its evaluation into two separate parts: an evaluation of the tubewell project alone, excluding canal enlargement costs and benefits and an evaluation including both costs and benefits resulting from canal enlargement. In the second analysis total additional surface availability 1/ (both rabi and kharif) was divided into two portions: the portion released Trom storage between October and May, and that portion of the increment introduced into the area during peak river and channel flows which could not be absorbed by the project area without canal enlarge- ment. The latter increment of surface supplies was multiplied by the average value per acre foot of incremental water to derive the incremental NPV attributable to canal enlargement (see Appendix 5, page 3). 2.179 The results of a public tubewell project excluding costs and benefits due to canal enlargement are assessed as follows: 1/ Benefits were calculated from 1973 --the first year after scheduled completion of canal enlargement. In 1975 additional surface water due to enlarged canals is estimated at 0.13 HAF. This would increase to 0.19 HAF in 1985 after which this quantity would remain constant to the end of the period. ANNEX 4.1 Page 113 Results of Project Evaluation Public Tubewell Project Only Incremental NPV (Rs. mill. present worth at 8%) 301 Benefit/Cost Ratio (at 8%) 4.4 Rate of Return: a) exclusive of potential private savings 17% b) inclusive of potential private savings 29% This compares to IACA's assessment 21 of incremental NPV before allocation of benefits to surface water and without canal enlargement of Rs. 592 million and a rate of return on incremental costs only of 80 percent. The calculations pertaining to the economic evaluation are given in Appendix 5. 2.180 The estimated rates of return to the public tubewell project after including Rs. 48.5 million capital costs for canal enlargement and the additional benefits resulting from additional surface water, does not change appreciably from those found in the partial analysis above. However, the inclusion of benefits due to canal enlargement does increase the net pro- duction value of the project, raising it from Rs. 301 million to Rs. 376 million or by 25 percent. IACA's estimated rate of return on the entire project was 48 percent, including estimated benefits from canal enlargement of Rs. 217 million. The private alternative, as evaluated by the Bank Group (see Appendix 6, page 3), including canal enlargement, would give a rate of return of 34 percent. The incremental production attainable with private development would be similar to that of the public project. (j) Conclusion 2.181 Continued private tubewell development in the Ravi Syphon area would allow farmers in the area to achieve a cropping intensity and general level of production similar to that projected for the public project. Ex- tensive private coverage already exists and all indications are that active private investment in tubewells will continue. Consideration should there- fore be given to the initial development of groundwater by the private sector and the reduction of the scope of this project to the canal enlargement element only. This form of development would allow savings to the public sector in the order of Rs. 161 million, while at the same time relaxing the strain on scarce implementation and management capacities available for the public tubewell program as a whole. A public tubewell project for this area has been tentatively included in the Bank Group's Action Program. However, careful monitoring of further private performance should be undertaken and if private progress would achieve the levels of installations projected in this review public development should be deferred. 1/See IACA Comprehensive Report, Volume?12, Annexure 15B, Ravi Syphon-Dipalpur Link Tubewell Project, Chapter 4, (public project)and Appendix 1 (private alternative). ANNEX 4.1 APPENDIX 1 INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon IEvised Cost Estimate and Financial Requirements Local Currency Foreign Exchage Total (sT. Mlll.) (Ra. M4lll) 7US$ Equiv.) (Rs. Mill.) (US$ Equiv.) PROJECT PREPARATION 2/ 4.6 3.0 0.38 7.6 1.60 TUBEWELL PROJECT Tubewells 20.3 29.8 6.27 50.1 10.55 Appurtenant Structures 6.1 1.7 0.36 7.8 1.64 Watercourse Improv,ments 3/ 5.9 - - 5.9 1.24 Duties and Taxes 4.8 - - 4.8 1.01 Engineering and Administration _/ 3.8 3.2 0.67 7.0 1.47 Sub-total 40.9 34.7 7.31 75.6 15.92 Contingencies 6/ 8.2 6.9 1.45 15.1 3.18 TOTAL TUBEWELL PROJECT 49.1 41.6 8.76 90.7 19.10 CANAL ENLARGEMENT Construction Costs 29.4 4.4 0.93 33.8 7.11 Custom Duties and Sales TAxes 1.5 - 1.5 0,32 Sub-total 30.9 4.4 0.93 35.3 7.43 Contingencies 6.1 .9 .19 7.0 1.48 TOTAL CANAL ENLARGEMENT 37.0 5.3 1.12 42.3 8.91 ELECTRIFICATION Transmission 2.3 3.5 0.74 5.8 1.22 Distribution 10.0 15.7 3.31 25.7 5.41 Duties and Taxes _/ 5.8 - - 5.8 1.22 Engineering and Administration i 1.8 1O9 0.40 3.7 0.78 Sub-total 19.9 21.1 4.45 41.o 8.63 Contingencies 6 )4.o 4.2 0.88 8.2 1.73 TOTAL ELECTRIFICATION 23.9 25.3 5.33 49e2 10.36 INTEREST DURING CONSTRUCTION Tubewell Project 7/ 10.9 - - 10.9 2.29 Electrification 8/ 2.9 _ _ 2.9 0.61 Canal Enjargement 6.o - _ 6.o 1.26 Sub-total 19.8 _ _ 19.8 4.16 TOTAL FINANCIAL 134.4 75.2 15.83 209.6 44.12 REUIREMENTS 1/ Rate of exchange used 1:4.75. 2/ Estimated at 5% direct costs before contingencies. 3/ Estimated at Rs. 10/acre CCA. Estimated at 15% of Foreign Exchange component of direct costs before engineering and administration. 5/ Estimated at 10% of direct costs after duties and taxes. &/ Estimated at 20% of direct costs after duties and taxes and engineering and administration. 7/ Estimated at 6% per annum for two-year period for each individual phase of tubewell construction. 8/ Estimated at 6% per annum for one year period. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Estimated Expenditure Schedule Based on Bank Group Cost Estimates 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 Total ------------------------------------- Rs. million )---------…----- …---_________ Project Preparation!/ 7.6 - - - - - 7.6 Tubewells, Structures and Watercourses 13.9 29.4 20.5 - - _ 63.8 Duties and Taxes 1.1 2.2 1.5 - - - 4.8 Engineering 1.5- 3.2 2.3 - - - 7.0 Contingencies 3.3 7.0 4.8 - - _ 15.1 Sub-total 4 o -Y 7 Interest during Construction 1.2 3.7 4.3 1.7 _ - 10.9 Total Tubewell Project 21.0 45.5 33.4 1.7 - o101.6 Canal Enlargement - 6.8 6.7 6.8 6.7 6.8 33.8 Custom Duties and Taxes - 0.3 0.3 0.3 0.3 0.3 1.5 Contingencies - 1.4 1.4 1.4 1.4 1.4 7.0 Sub-total - °7-5 7- °3 Interest during Construction - 0.4 0.8 1.2 1.6 2.0 6.o Total Canal Enlargement - 8.9 9.2 9.7 10.0 10.5 48.3 Electrification - 6.9 14.5 10.1 - - 31.5 Duties and Taxes - 1.3 2.7 1.8 - - 5.8 Engineering and Administration - 0.8 1.7 1.2 - - 3.7 Contingencies - 1.8 3.8 2.6 - - 8.2 Sub-total - 10.8 22.7 15.7 - - 49.2 Interest During Construction - o.6 1.4 0.9 - - 2.9 Total Electrification - 11.4 24.1 16.6 - - 52.1 Total Financial Requirements 28.6 65.8 66.8 28.0 10.1 10.5 209.6 8 I - - -rn - H 1/ Incurred prior to beginning of construction. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Comparative Summary Water Budget 'With" the Project and "Without" Additional Tubewells 1965 1975 1985 Net Increase "wItn,' witnout" 11W1tlh "Igitnout' 'With" the Project the Additional the Additional Surface Ground- Existing Project Tubewells Project Tubewells Water water Total Surface Supplies Total: 0.76 1.04 0.76 1.10 0.76 0.3h - 0.34 1/ Thereof during October to May- 0.hh 0.59 0.44 0.59 0.44 0.15 - 0.15 Groundwater Supplies 0.28 0.87 0.1462/ 0.982 - 0.46/ - 0.52 0.52 Total Supplies 1.04 1.91 1.22 2.08 1.22 0.34 0.52 0.86 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 2,185 private tubewells in operation by 1969 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.28 MAF) as well as those of further increase in private groundwater extraction. I PUBLIC TUBEWELL PROJECT: RAVI SYPHON WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL >1*-WATER COURSE-i-- FIELD TRANSPIRATION EVAPORATION I EVAPORATION I EVAPORATION 1 69 4, I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RAIN 0 38 LLU 136 110 2.08 138 131 > U S E RIVER RECHARGE RE- CHARGE IRGA AO RECHARGE 1 -RECHARGE AIN ol 1 IPUMPING 1 X 50 ~~~~265 21S O 84107 0 3e) 0.98 GROUND WATER RESERVOIR z x DRAINAGE PUMPING 0 (R) IBRD - 3327 D1 ANNEX 4.1 APPENDIX 3 INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Yield Projections "With" Additional Tubewells (Maunds per Acre) Present IACA Projection Bank Group Projection 965 1969 1975 1985 2000 1969 1975 1985 2000 Kharif Coarse Rice 17.0 18.6 25.0 38.0 50.0 18.4 22.9 32.7 50.0 Fine Rice - 16.6 22.5 32.0 42.5 16.6 20.6 29.3 42.5 Cotton 7.0 7.3 10.0 15.0 20.0 7.6 9.4 13.3 20.0 Maize 10.0 11.9 17.0 26.0 38.0 10.8 13.4 20.0 38.o Fodder 250.0 270.0 350.0 470.0 600.0 270.5 335.9 465.0 600.0 Pulses 5.5 5.9 7.5 lo.o 14.0 6.o 7.4 10.4 14.0 Jowar 6.o 6.4 - - - 6.5 - - - Rabi Wheat 12.0 13.1 19.0 27.5 34.o 13.0 16.1 24.8 34.0 Fodder 540.0 545.0 700.0 840.o 1000.0 584.3 725.4 961.4 1ooo.o Oilseeds 6.o 6.2 7.5 10.5 15.0 6.5 8.o 11.2 15.0 Gram 8.o 8.2 10.0 14.0 18.0 8.6 10.7 14.7 18.0 Maize 10.0 11.9 17.0 26.0 38.o 10.8 13.4 20.0 38.o Perennials Sugarcane(GUR) 30.0 31.8 44.0 62.0 76.0 32.5 40.3 56.3 76.o Fruit 80.0 85.0 100.0 130.0 170.0 86.6 107.5 145.7 170.0 Vegetables 140.0 145.0 170.0 200.0 250.0 151.5 188.0 247.8 250.0 APPENDIX 3 Page 2 INDJS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Yield Projections "Without" the Project (Maunds per acre) Present IACA Projection Bank Group Projection 1965 1969 1975 1985 2000 162 1975 1985 2000 Kharif Coarse Rice 17.0 18.6 19.0 28.8 40.0 18.4 22.9 32.7 50.0 Fine Rice - 16.6 17.0 25.2 34.0 16.6 20.6 29.1 42.5 Cotton 7.0 7.3 7.5 10.0 14.0 7.6 9.4 13.3 20.0 Maize 10.0 11.9 13.5 15.5 18.0 10.8 12.2 14.9 38.0 Fodder 250.0 270.0 290.0 320.0 375.0 250.5 304.7 371.5 600.0 Pulses 5.5 5.9 6.o 7.5 10.0 6.o 6.7 8.2 14.0 Jowar 6.o 6.4 6.3 8.o ll.o 6.5 7.3 8.9 - Rabi What 12.0 13.1 14.3 17.5 22.0 13.0 16.1 24.8 34.o Fodder 540.0 545.0 550.0 650.0 750.0 584.3 658.3 802*4 looo.o Oilseeds 6.o 6.2 6.4 8.o lo.o 6.5 7.3 8.9 15.0 Gram 8.o 8.2 8.4 11.2 14.0 8.6 9.7 11.9 18.0 Maize 10.0 11.9 13.5 15.5 18.0 6.o 12.2 14.9 38.o Perennials Sugarcane(GUR) 30.0 31.8 33.6 43.0 56.0 32.5 40.3 56.3 76.0 Fruit 80.0 85.o 90.0 105.0 130.0 86.6 107.5 145.7 170.0 Vegetables 140.0 145.0 150.0 170.0 200.0 151.5 188.0 247.8 250.0 I N D U S S P E C I A L S T U D Y Public Tubewell Project - Ravi Syphon Revised Projection of Production "WITH" The Project 1 9 7 5 1 9 8 5 1 9 9 0 Cropped Yields Production IPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (mds/acre) ('000 od.) (Re. mill) Acres (mds/acre) ('000 sde) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mill) KRARIF: Coarse Rice 11,800 22.9 270.2 2.337 11,800 32.7 385.9 3.338 11,800 h2.2 I98.0 bh308 Fine Rice 141,200 20.6 8h8.7 12.-33 59,500 29.1 1,731.h 25.365 77,hoo 36.5 2,825.1 hU1388 Cotton 85,200 s.h 800.9 24.027 95,200 13.3 1,266.2 37.986 107,100 17.0 1,820.7 5h.621 Maize 29,800 13.4 399.3 7.387 29,800 20.0 596.0 11.026 29,800 29.h 876.1 16.208 Fodder 106,700 335.9 35,8h0.5 - 113,100 W65.o 52,591.5 - 212,900 5h2.1 67,708.3 - Pulses 11,900 7.h 88.1 1.850 23,800 10.h 2.7.5 5.198 23,800 12.1L 295.1 6.197 Sub-Total 286,600 h8.03h 333,200 82.913 37h,800 122.722 RABI: Wheat 255,200 16.1 h,108.7 53.h13 220,100 2h.8 5,L58.5 70.960 166,600 27.6 h,598.2 59.777 Fodder 95,200 725.h 69,058.1 - 101,100 961.h 97,197.5 - 107,200 983.5 105,31.2 - Oilseeds 12,500 8.o 100.0 2.350 11,900 11.2 133.3 3.133 11,900 13.h 159.5 3.71.8 Gram 23,800 10.7 25L.7 3.629 23,800 lh.7 3h9.9 4,986 17,900 16.6 297.1 h.231, Maize 17,900 13.h 239.9 ,.138 23,800 20.0 h76.0 8.806 23,800 29.h 699.7 12.9hl1 Green Manure 23,800 - - h7,600 - - 59.500 - - Sub-Total h28,h00 63.830 h28,300 87.885 386,900 80.703 PERENNIAL: Sugarcane 4,4100 ho.3 1,789.3 32.207 hl,600 56.3 2,3h2.1 h2.158 35,700 67.A 2,406.2 103.312 Fruit 4,100 107.5 hho.8 4.8hs 11,900 Th5.7 1,733.8 19.072 17,900 159.7 2,858.6 20.900 Vegetables 5.800 188.0 1,o0o.4 11.994 11,900 21,7.8 2,9h8.8 32.L37 11,900 2h9.h 2,967.9 32.6h7 Sub-Total 108,600 b9 .50 130,800 93.667 131,000 96.859 GPV of Crops 160.931, 264.b65 300.200 Animal Husbandry lJ 99.h28 177.732 218.000 TOTAL aPV 260.342 hlj2.197 518.200 On-Farm Costs 2/ 83.309 159.191 186.ooo TOTAL NPV 177.033 283.006 300.2 1/ Based on IACA projections but reduced proportionately for 1975 and 1985 in keeping 2/ 1975 = 32% of GPV F:- with reduction of yield levels including those of fodder. - 1985 = 36% of GPV 1990 = 36% of GPV I I N D U S S P E C I A L S T U D Y Public Tubewell Project - Ravi Syphon Revised Projection of Production "l1ITHOUT" The Project 1 9 7 1 1 9 765 1 9 865 1 9 9 0 Cropped Yields Production r,pv Yields Production GPV Yields Production GPV Yields Production GPV Acres (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('O0 mds) (Rs. mill) KHARIF: Coarse Rice 13,200 18.8 2148.2 2.522 22.9 302.3 2.615 32.7 131.6 3.733 142.2 557.0 1l.818 Fine Rice 28,300 16.9 4178.3 8.131 20.6 583.0 8.51l 29.1 823.5 12.061h 36.5 1O33.0 15.133 Cotton 611,ooo 7.7 1192.8 11h.7811 9.1, 601.6 18.048 13.3 851.2 25.536 17.0 l,08e.o 32.611o Maize 26,500 11.0 291.5 5.393 12.2 323.3 6.081 111.9 39h.8 7.30h 16.1 14311.6 8.0140 Fodder 911,500 276.0 26,082.0 - 3011.7 28,7941.2 - 371.5 35,106.8 - 1410.0 38,715.0 - Pulses 7,200 6.1 143.9 0.922 6.7 118.2 1.012 8.2 59.0 1.239 9.0 6h.8 1.361 Jowar/Bajra 111,800 6.6 97.7 1.075 7.3 108.0 1.188 8.9 131.7 1.11149 9.8 lb65.o 1.595 Sub-Total 2118,500 32.827 37.865 51.325 63.587 RABI: Wheat 217,500 13.2 2,871.0 37.323 16.1 3,501.8 145.523 211.8 5,3911.0 70.122 27.6 6,003.o 78.039 Fodder 88,700 596.1 52,87L.1 - 658.3 58,391.2 - 802.1 71,172.9 - 885.6 78,552.7 - Oilseeds 13,100 6.6 86.5 2.033 7.3 95.6 2.217 8.9 116.6 2.714o 9.8 128.1 3.017 Gram 30,900 8.8 271.9 3.875 9.7 299.7 14.271 11.9 367.7 5.2110 13.1 10OL.8 5.768 Sub-Total 350,200 143.231 52.O11 78.102 86.821 PERENNIALS: Sugarcane 1,600 33.1 1,1176.3 26.573 h0.3 1,797.41 32.353 56.3 2,511.0 115.198 67. 3,006.o 51.108 Fruit 3,000 88.3 2611.9 2.9111 107.5 322.5 3.MU8 1115.7 1137.1 11.808 159.7 1179.1 5.270 vegetables 11,800 1511.5 7141.6 8.158 188.0 902.11 9.926 2147.8 1,189.1 13.083 2119.14 1,197.1 13.168 104,800 37.6145 146.827 63.089 72.5116 GPV of Crops 703,560 113.703 135.353 192.516 222.957 Animal Husbandry /78.800 89.700 115.700 13h.700 TOTAL GPV 192.503 225.053 308.216 357.657 On-Farm Costs Z/ 61.601 72.017 110.958 128.756 TOTAL NPV 130.902 153.036 197.258 228.901 1/ Based on IACA Projectlon. 2/ 1971 = 32% of rPV 1975 = 32% of aPV 1585 = 36% of GPV 1990 = 36% of SPV INDUS SPECIAL STLTDY Public Tubewell Project - Ravi Syphon Calculation of Rate of Return (Tubewells Only) Cost; of Increamental NPV O&M and Incremental Benefits R ATE O F R E T U R N NPV -With- NPV Withouta Incremental Additional After Allocation to Infrastructure Power Attributable Potential Including Potential Capital Costs Net Benefits Project Costs Year Project Project NPV Surface Water Surface Water and Service 2/ Costs Increment Private Savings Private Savings of Project at 17% 3/ at 29% 4/ at 17% 3/ at 29% 4/ -- (Rs. Million) -- --- -- - 1970 - - - _ _ - - 10.0 10.0 26.3 - 7.8 23.5 20.A 1971 130.9 130.9 - - - _ 2.3 - 2.3 10.0 7.7 39.6 - 1.7 l.6 32.6 23.9 1972 3,14.h 136.1 5.3 - 5.3 0.2 6.8 - 1.7 10.0 8.3 27.6 - 1.1 3.9 19.4 12.9 1973 152.8 ill.6 11.2 - 11.2 O.4 9.3 1.5 10.0 11.5 - 0.8 h.2 - - 1974 165.2 147.2 18.0 - 18.0 o.6 9.3 8.1 10.0 18.1 - 3.8 5.1 i _ 1975 177.0 153.0 24.0 3.8 20.2 0.7 8.5 11.0 10.0 21.0 - h.4 4.6 _ _ 1976 185.6 157.0 28.6 5.3 23.3 0.8 8.6 13.9 10.0 23.9 - 4.8 h.1 . _ 1977 194.5 6l1.1 33.4 6.5 26.9 0.9 9.4 16.6 10.0 26.6 - h.9 3.5 _ _ 1978 203.9 165.3 38.6 8.5 30.1 1.0 9.6 19.5 10.0 29.5 - 4.9 3.0 - - 1979 213.8 169.6 44.2 10.0 3L.2 1.2 9.6 23.L. 10.0 33.1, - 5.1 2.7 _ 1980 224.1 174.0 50.1 11.1 39.0 1.h 9.7 27.9 10.0 37.9 - 5.2 2.4 _ _ 1981 235.0 178.5 56.5 12.3 hb.2 1.6 9.7 32.9 10.0 U2.9 - 5.3 2.1 - - 1982 246.3 183.2 63.1 13.h 49.7 1.7 9.8 38.2 10.0 h8.2 - 5.2 1.8 - 1983 258.2 187.9 70.3 14.8 55.5 1.9 9.9 h3.7 10.0 53.7 - 5.2 1.6 - 1984 270.7 192.8 77.9 16.0 61.9 2.2 10.0 49.7 10.0 59.7 - 5.o 1.h - 1985 283.0 197.3 85.7 16.9 68.8 2.h 10.0 56.4 10.0 66.h - h.9 1.2 - - 1986 294.2 203.2 91.0 19.0 72.0 2.5 10.0 59.5 10.0 69.5 - L 4h 1.0 - _ 1987 305.6 209.3 96.3 20.2 76.1 2.7 10.0 63.h 10.0 73.4 - 4.1 0.8 - - 1988 317.6 215.5 102.1 21.4 80.7 2.8 10.0 67.9 10.0 77.9 - 3.7 o.6 - _ 1989 330.0 222.0 108.0 22.6 85.h 3.0 10.1 72.3 10.0 82.3 - 3.h o.5 - - 1990 343.4 228.9 114.5 2b.0 90.5 3.2 10.1 77.2 10.0 87.2 - 3.1 0.° - - 75.h 57.3 75.5 57.2 Rate of Return - 17% Rate of Return . - 29% y Charged at average value per acre foot of total incremental water availabilityl Incremental Value/Acre Foot Incremental Water of Incremental NP7 Availabii ~ A lability (Rs. Dill.) (MAF) (Rs.) 1975 24.0 o.69 31.8 1980 50.1 0.77 65.1 1985 85.7 o.86 99.6 1990 131.5 o.86 133.1 Absorption of surface water based on IACA intenaity projections beginning in 1975 at 0.108 MAF to 1990 at 0.180 MAF. ?/ Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includeas 1.85% of attributable increment for roads. 1.65% of attributable incremeit for supporting services. Charged on incremental NPV after allocation to surface water only. / Excluding Potential Private Savings. k Including Potential Private Savings. INDUS SPECIAL STUDY Pe 2 Puiblic Tubewell Project - Ravi Syphon Benefit: Cost Ratio (Tubewells only) Incremental NPV Project Costs Includ- Discounted at 8% after Allocation ing 0 & M, Services Year to Surface Water and Infrastructure Benefits Costs ----- (Rs. Mill.) --- Before After deduction deduction Before After of P.P.S. of P.P.S. deducting deducting P.P.S. P.P.S. 1970 26.3 16.3 _ 24.4 15.1 1971 - 41.9 31.9 - 35.9 27.3 1972 5.3 34.6 24.6 4.2 27.5 19.5 1973 11.2 9.7 - 0.3 8.2 7.1 - 0.2 1974 18.0 9.9 - 0.1 12.2 6.7 - 0.1 1975 20.2 9.2 - 0.8 12.7 5.8 - 0.5 1976 23.3 9.4 - 0.6 13.6 5.5 - 0.4 1977 26.9 10.3 0.3 14.5 5.6 0.2 1978 30.1 10.6 o.6 15.1 5.3 0.3 1979 34.2 10.8 0.8 15.8 5.0 0.4 1980 39.0 11.1 1.1 16.7 4.8 0.5 1981 44.2 11.3 1.3 17.6 4.5 0.5 1982 49.7 11.5 1.5 18.3 4.2 o.6 1983 55.5 11.8 1.8 18.9 4.o 0.6 1984 61.9 12.2 2.2 19.5 3.8 0.7 1985 68.8 12.4 2.4 20.1 3.6 0.7 1986 72.0 12.5 2.5 19.5 3.4 0.7 1987 76.1 12.7 2.7 19.0 3.2 0.7 1988 80.7 12.8 2.8 18.7 3.0 0.6 1989 85.4 13.1 3.1 18.3 2.8 0.7 1990 90.5 13.3 3.3 18.0 2.6 0,7 300.9 168.7 68.6 B/C Ratio at 8%/= 1.8 B/C Ratio at 8% ?/ 4:42' 1/ Including Potential Private Savings. 2/ Excluding Potential Private Savings. )/ If potential private savings are added to the benefit stream rather than netted out of the cost stream, the Benefit/Cost ratio would be 2.4; that is: Present worth of benefits = 300.9 Present worth of costs = 100.1 401.0 Benefit Cost Ratio 1401.0 = 2.4 168.7 INDSJ SPECIAL STUDY Public Tubewell Project - Ravi Syphon Benefit:Cost Ratio for Project Including Canal Enlargement --__-_____(Rs. millions)---------- Incremental Total Incremental NPV Canal Increased Infrastructure Project Costs Including 0MM Diicounted at 8% Rate of Return NP7 due to due to the Project After Enlargemsnt Costs due to Canal Services and Infrastructure I fts Costa Benefita Costs Year Canal Enlargement Allocation to Surface Water Costs Enlargement for Canal Enlargement Benefits Costs at 17% at 17%! at 25% at 25% I/ 7f1 1970 - - - 26.3 16.3 - 24.4 15.1 - 22.5 - 13.0 1971 - - 8.9 - 50.8 40.8 - 43.6 35.0 - 37.4 - 26.0 1972 - 5.3 9.3 - 43.9 33.9 4.2 34.8 26.9 3.3 27.3 2.7 17.2 1973 - 7..2 9.7 - 19.4 9.4 8.2 14.3 6.9 6.0 10.3 4.5 3.8 1974 - 18.0 10.1 - 20.0 10.0 12.3 13.6 6.8 8.2 9.1 5.8 3.2 1975 4.5 24.7 10.5 0.2 19.9 9.9 15.6 12.5 6.2 9.6 7.8 6.4 2.6 1976 5.6 28.9 0.2 9.6 (-) 0.4 16.9 5.6 (-) 0.2 9.6 3.2 6.0 (-) 0.1 1977 6.6 33.5 0.2 10.5 o.5 , 18.1 5.8 0.3 9.5 3.0 5.5 0.1 1978 7.8 37.9 0.3 10.9 0.9 19.0 5.5 o.5 9.2 2.6 5.0 0.1 1979 9.1 43.3 0.3 11.1 1.1 20.1 5.1 0.5 9.0 2.3 4.5 0.1 1980 10.4 49.4 0.4 11.5 1.5 21.2 4.9 0.6 8.8 2.0 4.1 0.1 1981 12.0 56.2 0.4 11.7 1.7 22.3 4.6 0.7 8.5 1.8 3.8 0.1 1982 13.6 63.3 o.5 12.0 2.0 23.3 4.4 0.7 8.2 1.6 3.4 0.1 1983 15.5 71.0 o.5 12.3 2.3 24.2 4.2 0.8 7.9 1.4 3.0 0.1 1984 17.3 79.2 o.6 12.8 2.8 25.0 4.0 0.9 7.5 1.2 2.7 0.1 1985 18.9 87.7 0.7 13.1 3.1 25.6 3.8 0.9 7.1 1.1 Z'. 0.1 1986 20.1 92.1 0.7 13.2 3.2 24.9 3.6 0.9 6.4 0.9 2.0 0.1 1987 21.3 97.4 0.7 13.4 3.4 24.4 3.1 0.9 5.7 0.8 1.7 0.1 1988 22.6 103.3 0.8 13.6 3.6 23.9 3.2 0.8 5.3 0.7 1.4 0.1 1989 23.9 109.3 0.8 13.9 3.9 23.5 3.0 0.8 4.7 0.6 1.2 -- 1990 25.3 115.8 0.9 14.2 4.2 23.0 2.8 0.8 4.3 0.5 1.0 -_ 375.7 206.9 106.8 138.8 138.0 67.1 67.0 1/ 1~~~~~~~~~/ B/C Ratio at 8% 3.5 Rate of Return- - 25% B/C Ratio at 8% - 1.83/ Rate of Return / . 17% 1/ Including Potential Private Savings. 7/ Excluding Potential Private Savings. 3/ If potential private savings are added to the benefit stream rather than netted out of the cost stream, the Benefit/Cost ratio would be 2.3; that is:u Present worth of benefits - 375.7 Present worth of savings - 100.1 475.8 Benefit Cost Ratio 475.8 " 2.3 205.,9 INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Incremental Wells in Wells During Project Replacement of Increnental Number Water Availability Year Operation l/ Period Additional VWells Of Wells in Operation (MAYF) 1965 1,185 1966 1,422 1967 1,706 1968 2,047 1969 2,456 409 409 0.09 1970 2,702 246 655 0.15 1971 2,972 270 925 0.21 1972 3,269 297 1,222 0.27 1973 3,596 327 1,549 0.35 1974 3,956 360 1,909 0.43 1975 4,352 396 2,305' 0.52 1976 4,352 2,305 0.52 1977 4,352 2,305 0.52 1978 4,352 2,305 0.52 1979 4 4,352 409 2,305 0.52 1980 4,352 246 2,305 0.52 1981 4,352 270 2,305 0.52 1982 4,352 297 2,305 0.52 1983 4,352 327 2,305 0.52 1984 4,352 360 2,305 0.52 1985 4,352 396 2,305 0.52 1986 4,352 2,305 0.52 1987 4,352 2,305 0.52 1988 4,352 2,305 0.52 1989 4,352 409 2,305 0.52 1990 4,352 246 2,305 0.52 (DI W 1/ Rate of installation: 20% p.a. compound growth between 1965 and 1969. This rate of installation accepts the FJ t 10% p.a. compound growth between 1969 and 1975. ceiling for coverage with private tube- wells stated in the IACA project report. 2/ Assumed rate of average utilization: 30% Each well would pump for about 2,630 hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Rate of Return of Private Tubewell Alternativel/ Benefit/Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capital Benefits Costs Benefits Costs at Year NPV and Servicesz/ Costs3/ Costsk/ Total Costs at 8% at 8% at 47.6% 47.6% --…-…----- … (Rs.~~~~~~~~~~Mill)…--- -…------- -- -- …-.- - --- ----- -- 1969 - 1.6 4.1 5.7 - 5.3 - 3.9 1970 - 2.6 2.5 5.1 - 4.4 - 2.3 1971 5.3 0.2 3.6 2.7 6.5 4.2 5.2 1.6 2.0 1972 11.2 o.4 4.8 3.0 8.2 8.2 6.0 2.4 1.7 1973 18.0 o.6 6.o 3.3 9.9 12.3 6.7 2.6 1.4 1974 20.2 0.7 7.4 3.6 11.7 12.7 7.4 2.0 1.1 1975 23.3 0.8 9.0 4.0 13.8 13.6 8.1 1.5 0.9 1976 26.9 0.9 9.0 - 9.9 14.5 5.3 1.2 O.4 1977 30.1 1.1 9.0 10.1 15.1 5.0 0.9 0.3 1978 34.2 1.2 9.0 - 10.2 15.8 4.7 0.7 0.2 1979 39.0 1.4 9.0 4.1 14.5 16.7 6.2 0.5 0.2 1980 44.2 1.5 9.0 2.5 13.0 17.6 5.2 o.4 0. 1981 49.7 1.7 9.0 2.7 13.4 18.3 4.9 0.3 O.i 1982 55.5 1.9 9.0 3.0 13.9 18.9 4.7 0.2 0.' 1983 61.9 2.2 9.0 3.3 14.5 19.5 4.6 0.2 0.0 1984 68.8 2.4 9.0 3.6 15.0 20.1 4.4 0.1 s.0 1985 72.0 2.5 9.0 4.0 15.5 19.5 4.2 0.1 0.0 1986 76.1 2.7 9.0 - 11.7 19.0 2.9 0.1 0.0 1987 80.7 2.8 9.0 11.8 18.7 2.7 0.0 0.0 1988 85.4 3.0 9.0 - 12.0 18.3 2.6 0.0 0.0 1989 90.5 3.2 9.0 4.1 16.3 18.0 3.2 0.0 0.0 1990 90.5 3.2 9.0 2.5 14.7 300.9 103.8 15.0 14.9 B/C Ratio at 8% -2.9 1/ Not including costs and benefits due to canal enlargement. 2/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. 3/ Based on an average annual O&M costs per tubewell of Rs. 3,900. r / Based on an average cost per tubewell of Rs. 10,000 at the assumed rate of installation. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Rate of Return of Private Tubewell Project (Including Costs and Benefits due to Canal Eilargement) --------(Rs. millions)-------- Incremental Total Incremental NPV Benefits Costs Rate of Return NPV due to After Allocation to Costs due to C4qal Total at at Benefits at Costs at Year Canal Enlargement Surface Water Enlargements Costs 8% 8% 34.2% 34.2% 1969 - 5.7 - 5.3 - 4.2 1970 - 5.1 - 4.4 - 2.8 1971 - 5.3 8.9 15.4 4.2 12.2 2.2 6.4 1972 - 11.2 903 17.5 8.2 12.9 3.5 5.4 1973 - 18.0 9.7 19.6 12.3 13.3 4.1 4.5 1974 - 20.2 10.1 21.8 12.7 13.7 3.5 3.7 1975 4.5 27.8 10.7 24.5 16.2 1h.3 3.5 3.1 1976 5.6 32.5 .2 10.1 17.6 5.4 3.1 1.0 1977 6.6 36.7 .2 10.3 18.4 5.2 2.6 0.7 1978 7.8 42.0 .3 10.5 19.5 4.8 2.2 0.6 1979 9.1 48.1 .3 14.8 20.6 6.3 1.9 o.6 1980 10.h 54.6 .4 13.4 21.7 5.4 1.6 O.b 1981 12.0 61.7 .4 13.8 22.7 5.1 1.3 0.3 1982 13.6 69.1 .5 14.4 23.5 4.9 1.1 0.2 1983 15.5 77.4 .5 15.0 24.4 4.8 0.9 0.2 1984 17.3 86.1 .6 15.6 25.1 4.6 0.8 0.1 1985 18,9 90.9 .7 16.2 24.6 4.4 o.6 0.1 1986 20.1 96.2 .7 12.4 24.1 3.1 0.5 0.1 1987 21.3 102.0 .7 12.5 23.6 2.9 0.4 0.0 1988 22.6 108.0 .8 12.8 23.2 2.8 0.3 °.0 1989 23.9 114.4 .8 17.1, 22.7 3.4 0.2 0.0 1990 25.3 115.8 .9 15.6 21.3 2.9 0.2 0.0 396.7 lb2.1 3___ 3___ Benefit Cost Ratio at 8% = 2.7 1/ Includes an additional infrastructure cost of 3.5 percent of incremental NPV due to canal enlargement. GQ iV CD ANNEX 4.1 Page 89 5. The Shujaabad Project - (a) The Project 2.138 The project is located in the south western tip of the Bari Doab on the left bank of the Chenab river (see Map). It is 'fituated in -thehadminii-fdn- istrative district of the large urban center of Multan and comprises most of the existing non-perennial part of the Sidhnai Canal Command, together with an area at the tail of the Mailsi Canal Command and a further small area at the tail of the Lower Bari Doab Canal Command. It would provide additional irri- gation supplies and water table control for 379,000 acres CCA in the following canal commands: CCA Included Under the Project Canal Commands Total CCA CCA of the Project ---------- (Million Acres) -------- Sidhnai II 0.26 0.25 Mailsi below SM Link 0.68 0.10 Lower Bari Doab 1.57 0.03 TOTAL 2.51 0.38 Distribution of the groundwater quality in the project area is about as follows: Groundwater Quality Zones of the Project Groundwater Quality Project Area Zone Percent '000 Acres Less than 1,000 ppm TDS 80 303 1,000 to 3,000 ppm TDB 20 76 TOTAL 100 379 2.139 Approximately 280,000 acres (74 percent of the project area) has a water table which is ten feet or less from ground level of which about a third or 95,000 acres is effectively waterlogged with a water-table2depthcof five feet or less. Although no specific data for the project area are available, surveys of the Multan and Shujaabad divisions indicate the existence of extensive rareas 'affectea by so1l s alinity. Their extent would need ta be 1/IATCA Comprehensive Report, Volume 12, Annexure 15B. ANNEx 4.1 Page 90 further determined in the course of project preparation. The high water table and soil salinity have retarded agricultural development in the project area, which is less developed than most other areas of the Bari Doab. 2.140 Land tenure data are only available for the Multan District which covers part of the project area. The distribution of farm sizes and tenure- ship in this district is as follows: Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 acres 38 7 5 to 25 acres 51 53 Over 25 acres 11 40 Owner operated 32 29 Owner cum tenant 9 12 Tenant operated 59 59 The average farm size in the district is about 11 acres and thus somewhat larger than the average for the Punjab as a whole. 2.141 The project together with additional surface supplies, would increase the water availability in the project area from about 0.88 MAF presently to 1.80 MAF at full development. Of the increase of 0.92 MAF, about 0.18 MAF would be additional surface supplies introduced after pro- vision of tubewell drainage, and 0.74 MAF through additional groundwater exploitation. This increase in irrigation supplies would be sufficient to support a growth in cropped acreage from 360,000 acres (95 percent intensity) in 1965 to 564,000 in 1985 (149 percent intensity). (b) Physical Works 2.142 The physical works of the project would consist of the installation of some 725 public tubewells and appurtenant works. Of these, 576 wells of four cusec capacity would be in the fresh groundwater zone of the project area (covering 303,000 acres or 80 percent of CCA); and 149 wells with an average capacity of 2.8 cusecs would be in the remaining area underlain by groundwater requiring mixing with surface water. Towards the center of the doab, but outside the project area, the deep groundwater becomes progressively more saline. However, as long as balanced recharge pumping from a depth of about ten feet would be practised IACA foresees no significant migration of saline groundwater into the project area and has, therefore, not provided for buffer wells or other protective measures. In a later stage of development, when the surface distribution system in the mixing and adjacent saline zones ANNEX 4.1 Page 91 would be remodelled to improve intensity further drainage in these zones would be required. This is not included in the project under review. Parts of the project area would benefit, as discussed in Chapter III, from the Sukh- Beas Drainage Scheme. (c) Construction Schedule 2.143 The installation of the public tubewells would extend over about four years in accordance with the following schedule: Preliminary Construction Schedule 1969/70 1970/71 1971/72 1972/73 ------------- (number of wells) --------- Drilling and Construction 165 360 200 -- Electrification -- 165 360 200 Wfells in Operation. 165 525 725 2.144 Construction of the tubewell project would thus be completed at the middle of the Fourth Plan period. IACA's Report is a first attempt to formulate this project with regard to its technical, agricultural, financial and economic implications. As such it is in many respects based on general information applicable to larger areas rather than on specific investigations. Further detailed project preparation would have to be initiated in due course if the project -ere to be implemented in accordance with the above schedule. (d) Cost Estimates and Expenditure Schedule 2.145 The total cost of the project is estimated by the Bank Group at about Rs. 128.5 million (US$ 27.1 million equivalent). This would include the following: ANNEX 4.1 Page 92 Summary Cost Estimates Local Foreign Currency Exchange Total ------_-_---(Rs Mill)------------ Project Preparation 2.5 2.2 4.7 Tubewells 16.0 23.1 39.1 Electrification 10.4 16.3 26.7 Other Civil WUorks 10.1 1.0 11.1 Subtotal 39.0 42.6 81.6 Overheads 13.0 4.0 17.0 Contingencies 9.9 8.9 18.8 Subtotal 22.9 12.9 35.8 Interest During Construction 11.1 - 11.1 TOTAL 73.0 55.5 128.5 Details of the cost estimates are given in Appendi 1, .p&ge 1. The foreign exchange component of the project would be about 43 percent of total project costs or US$ 11.7 million equivalent. 2.146 Expenditures would be spread over approximately four years in accordance with the following schedule: Summary Expenditure Schedule Year 1 2 3 4 -_---__ (Rs. Mill) --------- Tubewells and associated works 21.8 38.3 23.0 1.2 Electrification - 10.1 21.8 12.3 TOTAL 21.8 48.4 44.8 13.5 A more detailed expenditure Schedule is given in Appendix 1, page 2. ANNEX 4.1 Page 93 (e) Recovery of Project Expenditures 2.147 On the basis of the above cost estimates a preliminary assessment has been made of the charges required to recover total project costs over the lifetime of the project. The average annual rate of recovery, including operation and maintenance expenditures, would have to be about Rs. 16.7 million as sho-vm below: Annual Costs for Operation, Maintenance and Recovery of Capital Annual Costs (Rs Mill) Capital Costs I/ (Annuity at 6/0 over 20 years for Rs. 84.3 million) 7.14 Annual Operation and Maintenance Costs - (including repairs, electricity and staff costs) 9.3 TOTAL 16.7 1/ Based on recovery of project investment including project preparation and interest during construction but without costs of electrification. 2/ Average annual costs based on weighted average over lifetime of the project. 2.148 This would be equivalent to about Rs. 44 per acre CCA or Rs. 30 per cropped acre at the stage of full development. Existing water rates average about Rs. 7 per cropped acre. Future water rates to recover total project costs including O&M and charges for surface supplies at existing levels would have to be in the neighborhood of Rs. 37 per cropped acre or about Rs. 55 per acre CCA. This would be about 12 percent of the expected net value of production in 1985. (f) The Irrigation Regime 2.149 The mean quantities of surface and groundwater which would be made available with the project and the comparison with the irrigation water availability likely to prevail if no further private tubewells are installed after the beginning of the project (in 1969) are summarized for 1975 and 1985 in the water budget attached as Appendix 2. No further invest- ment in private tubewells would be expected following implementation of the project. The total water availability at watercourse head, under the public project, would be about 1.80 MAF at the stage of full development. Of this 0.98 MAF would be provided by public tubewells and 0.82 MAF by canal supplies. Some 0.36 MAF of groundwater would substitute private exploitation, i.e. the ANNEX 4.1 Page 94 net increase of groundwater availability due to the project eWuld be about 0.62 MAF 1/. Total surface water availability at watercourse heads would increase from 0.64 MAF to 0.82 or by 0.18 MAF. The lowering of the water table to an average depth of ten feet in the early stages of the project would require the permanent extraction of about 0.26 MAF of groundwTater before additional surface supplies could be admitted into the project area. For the project area as a whole, the water availability would be enhanced from 2.3 acre feet in 1965 to 4.7 acre feet per acre CCA in 1985. This would enable the average increase of cropping intensity from 95 percent in 1965 to 149 percent in 1985 at full delta. 2.150 As an alternative to the public tubewell project further irri- gation development could take place through the continued installation of private tubewells. The following table shows water availability and potential intensity growth as projected for these alternative forms of development. Water Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 3,234 725 3,234 - 725 Surface Supplies (IMAF) 0.79 0.79 0.82 0.82 Annual Pumpage (MAF) 0.73 0.78 0.73 0.98 Total Annual Watercourse Delivery (MAF) 1.52 1.57 1.55 1.80 Cropping Intensity (percent) 126 133 126 149 Acres Cropped ('000) 478 505 478 564 Acre Feet/Acres Cropped 3.2 3.1 3.2 3.2 1/ Private tubewells of one cusec capacity. The table indicates that private groundwater development at the projected rate of installation would be capable of pumping nearly 75 percent of the annual recharge. This would appear to provide sufficient control of the water table to admit additional surface water into the area in conjunction with private development. Consequently, the combined water availability under the private alternative would support an intensity of 126 percent at full delta or only about 86,000 cropped acres less than under public develop- ment. 1/ See Appendix 2, o6tnotes 2 and 3. AMINEX 4.1 Page 95 (g) Agricultural Development 2.151 The cropping intensity for the project area in 1965 was estimated to be around 95 percent. The project area, at present, is less developed than most other areas of the Bari Doab. Agricultural development is mainly constrained by non-perennial and unreliable canal supplies, and also by the high water table in 74 percent of the project area. The project area forms part of the Punjab Cotton Belt and cotton is the predominant crop. Other kharif crops in addition to cotton are fodder, maize and coarse grains. Some coarse rice is grown mainly for reclamation purposes. Although the climate is suitable for cotton growing, yields are generally low because of the high water table. The main rabi crop is wheat which accounts for two-thirds of the rabi acreage. Apart from rabi fodder other crops have low intensity. Of the perennial crops sugarcane covers only a small area, espec- ially in the southern part of the project area. In the North, however, the urban demand of Multan has a significant impact on perennial acreage. IACA's estimates indicate that the 1965 value of crop production was of the order of Rs. 50 million and livestock production Rs. 24 million, giving a total GPV of Rs. 74 million. On average this would be about Rs. 195 per acre of CCA. 2.152 During the pre-project period agricultural development within the project would be expected to continue at the present trend. Between 1965 and 1969 total GPV is expected to grow to Rs. 88 million. The number of private tubewells according to IACA would increase from about 930 in 1965 to about 1,680 in 1969. With the start of the project, private tubewell development vould fall off and public tubewells wvuld successively substitute existing private wells. The increased water availability under public tubewell development would support the following intensity growth: Growth of Cropped Acreage Under Public Development Intensity11 Cropped Acreage Year Percent ('ooo) 1 1965 95 360 1969 (start of project) 103 390 1975 133 505 1985 149 564 1990 149 564 1/ Perennials counted twice. As stated earlier, continued private groundwater development would support a cropping intensity of about 126 percent at full delta. 2.153 Assessments have been made by the Bank Group of the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water development. In accordance ANNEX 4.1 Page 96 with the cropping intensity, cropping patterns and yield growth projected for the respective cases (see Appendices 3 and 4 for details)-the GPV-and-the pro- duction increments would be expected to develop about as follows: Growth of GPV "Wiith" and "Without" Groundwater Development Incre- "Without" "With" mental Additional Groundwater the Project GPV Crops Livestock Total Crops Livestock Total Total ------------------(Rs Mill)------------------ 1965 50 24 74 50 24 74 - 1969 58 30 88 58 30 88 - 1975 75 38 113 102 44 1146 33 1985 110 52 162 177 92 269 107 Over the life of the project the GPV would more than triple and the level 1/ of production would be 66 percent higher than that of the "without" case. - The GPV per acre CCA would increase from Rs. 195 in 1965 to Rs. 710 in 1985 as compared to Rs. 427 per acre CCA in the "without" case. 2.154 To achieve the above projected growth of production appreciable increases in on-farm expenditures would be expected in both the "with" and "without" cases, and great efforts would have to be made to make avail- able the quantities of non-water inputs required to sustain such growth. Allowing for increased on-farm expenditure and associated current project costs as well as the allocation of benefits to additional surface water absorption the incremental net production value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, paggs-l1afid 2. ANNEX 4.1 Page 97 Incremental Net Benefits Attributable to Public Groundwater Development 1/ 1975 1985 1990 ------ (Rs Mill) ----- NPV "With" 99 173 203 NPV "llithout" 76 104 119 Incremental NPV 23 69 83 Allocation to Surface Water 5 17 21 Allowance for Infrastructure and Services 1 2 2 Increase in O&M Expenditure 2 3 3 Total Associated Costs 8 22 26 Incremental Net Benefits Attributable to the Project 15 47 58 1/ For details see Appendices 4h'and 5, -pag4s?ldafid 2. 2.155 A-comparison with the alternative of private tubewell development (see Appendix 6, pagesa2 'and 3) indicates _tha-f £ 2fte6cdue-allofiance fd'r all costs, the incremental net benefits attainable from continued piivate tube- well development would be about the same as that of the public tubewell project up to 1975. For later reference years the private tubewell alterna- tive would appear capable of producing atleast 70 percent of the incremental net benefits attainable from the public tubewell project. Over the lifetime of a public project the present worth of incremental net benefits would com- pare as follows: Incremental net benefits - public development Rs. 259 million Incremental net benefits - private development Rs. 178 million If private investment in tubewells could be sufficiently stimulated to reach the ultimate ceiling of private installations of 3,790 1/ wells within a reasonable period of time this form of development would be expected to make a contribution to growth of agricultural production comparable to or ex:ceeding that of a public project. (h) Farmer Incentives 2.156 The benefits obtainable under the project should provide consider- able incentives for farmers. Based on ten acres CCA, farm incomes would, on average, be expected to improve as follows: 1/ Estimated by IACA;VoI-ume 12, Annexure 15B, Shujaabad Tubewell Project, page 40. 'IO Average Changes in Farm Income per 10 Acres of CCA "fithin" I the Project Area Under Alternative Forms of Development 1975 1985 1990 W/out Private Public W/out Private Public W/out Private Public Cropping Intensity (percent) 103 126 133 103 126 149 103 126 149 GPV (Rs.) 2,962 3,638 3,846 4,273 5,636 7,113 4,910 6,546 8,349 On-Farm Expenditure (Rs.) 948 1,163 1,231 1,539 2,029 2,561 1,768 2,356 3,006 Water Charges 1/ (Rs.) 296 536 534 296 536 545 296 536 545 Total Current Expenditures (Rs.) 1,244 1,699 l,765 1,835 2,565 3,106 2,064 2,892 3,551 Farm Income (Rs.) 1,718 1,939 2,081 2 438 3,071 4,007 2,846 3 654 4,798 T7W ater carges for the "Without" case consist o6f:- (i) Surface water charges at Rs .7per acre cropped Rs,. 72 (ii) O&M tubewells existing in 15'72 Rs. 166 (iii) Amortization at six percent over ten years of existing wells Rs. 58 T'OTAL Rs. 296 Water charges for private tubewell development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 88 (ii) O&M for private tubewells Rs. 333 (iii) Amortization at six percent over ten years for private wells Rs. 115 TOTAL Rs. 536 Water charges for full Public Tubewell Development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 104 (ii) O&M and amortization (six percent over 20 years) Rs. 441 TOTAL Rs. 545 ANNEX 4.1 Page 99 WJhile the results shoim above are only averages for the project area, the table indicates that farm incomes would be expected to develop along similar lines, in earlier years, for the public and the private alternative of groundwater development, with public development yielding slightly higher farm incomes. In 1985 and thereafter, farm income under the public program aDuld be higher. Individual farmers with private tubewells at their disposal would be expected to achieve and exceed the average farm incomes projected under public development. However, unless private installations could be accelerated beyond the rate projected in this review average incomes would remain below those projected for public development. In absolute terms, under the public project, farm incomes would grow from Rs. 2,000 to nearly Rs. 4,800 per farm of ten acres CCA. This should be sufficiently attractive to enlist farmers, active cooperation under the project. (i) Project Evaluation 2.157 On the basis of the modifications made to the IACA evaluation procedures discussed in Chapter II, A above, the Bank Group has assessed the likely results of the public project as follows: Results of Project Evaluation - Public Project Incremental NPV (Rs Mill; Present worth at 8%) 259 Benefit/Cost Ratio (at 8%) 4.0 Rate of Return: a) exclusive of potential private savings 19% b) inclusive of potential private savings 31% This compares to L4CA's assessment -/ of incremental NPV before allocation of benefits to surface water of Rs. 593 million and a rate of return on incremental costs over the "without" case of 60 percent. The calculations pertaining to the Bank Group' s evaluation are given in Appendix 5. 2.158 The private alternative has also been evaluated by the Bank Group in accordance with the procedures discussed in Chapter II, A above. On the basis of this evaluation, continued private development would give a rate of return of 74 percent (because of considerably lower investment requirements) and the scale of incremental NPV attainable under the private alternative would be only 30 percent below that attainable under the public tubewell project. Details of the evaluation of the private alternative are given in Appendix 6, page 3. (j) Conclusion 2.159 Though only indicative in the absence of a detailed appraisal, the rate of return of 19 percent on total investments in the public tubewell project, after allowance for benefits attributable to increased surface l/ For details of IACA's evaluation see IACA Comprehensive Report, Volume 12, Annexure 15B, Chapter 4 (public project) and Appendix I (private alternative),. ANN]EX 4.1 Page 100 supplies, appears satisfactory. The Bank Group has, therefore, tentatively included the Shujaabad project in the Action Program as scheduled. WJhile private tubewell development would appear capable of achieving a higher rate of return as well as making a substantial contribution to agricultural production the high water table in three-quarters of the project area together with extensive soils salinity may require the more efficient drainage cap- ability of a public project. Prima facie, however, the Shujaabad project area would offer considerable opportunities for private development. Should reductions in public outlays for groundwater development become necessary towards the end of the Third Plan period this area could be left to private development. IIeanwhile, project preparation, including monitoring of private tubewell development should be initiated in due course and the decision to implement a public project in this area should be reviewed on the basis of the findings of detailed studies as well as the availability of public resources. ANNEX 4.1 APPENDIX 1 INDUS SPECIAL STUDY Page I Pablic Tubewell Project - Shujaabad Revised Cost Estimate and Financial Requirements Local Currency Foreign Exchan8e Total (Rs.Mill.) (Rs.M)Ll.1 (US$ Equiv.) _(Rs.MMl1.) (U5$ Equiv.) Project Preparation 2/ 2.5 2.2 o.46 4.7 0.99 Tubewell Project Tubewells 16.0 23.1 4.86 39.1 8.23 Appurtenant Structures 6.3 1.0 0,21 7.3 1.54 Watercourse Improyqent 3/ 3.8 - - 3.8 0.80 Duties and Taxes 4 3.6 - - 3.6 0.76 Engineering and Administration 5/ 3.0 2.4 0.50 5.4 1.14 Subtotal 32.7 26.5 5.58 59.2 12.46 Contingencies 6/6. 5.3 1.11 11.8 2.49 Total Tubewell Project 39.2 31.8 6.69 71.0 14.95 Electrification Transmission 1.8 2.9 0.61 4.7 0.99 Distribution 8.6 13.4 2.82 22.0 4.63 Duties and Taxes i4.9 - - 4.9 1.03 Engineering and Administration i 1.5 1.6 0.33 3.1 o.65 Subtotal 16.8 17.9 3.76 34.7 7.30 Contingencies 6/ 3.4 3.6 o.75 7.0 1.47 Total Electrification 20.2 21.5 4.51 41.7 8.77 Interest During ConstFuction Tubewell Project 7/ 8.6 - - 8.6 1.81 Electrification 87 2.5 - 2.5 0.52 Subtotal 11.1 - -1.1 2.34 TOTAL FINANCIAL RE4UIREHENTS 73.0 31.68 128.5 27.05 1/ Rate of exchange used 1s4.75. T/ Estimated at 5% direct costs before contingencies. F stimated at Rs. 10/acre CCA. vEstimated at 15% of direct costs before engineering and administration. 5/ Estimated at 10% of direct costs after duties and taxes. Estimated at 20% of direct costs after duties and taxes and engineering and adamdinstration. 21 Estimated at 6% per annum for two-year period for each individual phase of tubewell construction. _8/ Estimated at 6% per annum for one year period. APPENDIX 1 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Estimated Expenditure Schedule Based on Bank Group Cost Estimates 1969/70 1970/71 1971/72 1972/73 TOTAL ------------------ (Rs. Million) ---------------- Project Preparation 3/ 4.7 - _ Tubewells, Structures and Watercourses 11.4 24.9 13.9 - 50.2 Duties and Taxes 0.8 1.8 1.0 - 3.6 Engineering 1.2 2.7 1.5 - 5.4 Contingencies 2.7 5.8 3.3 - 11.8 Subtotal 16.1 35.2 19.7 - 71.0 Interest during construction 1.0 3.1 3.3 Total Tubewell Project 17.1 23.0 - Electrification - 6.1 13.2 7.4 26.7 Duties and Taxes - 1.1 2.4 1.4 4.9 Engineering and Administration - 0.7 1.5 0.9 3.1 Contingencies - 1.6 3.5 1.9 7.° Subtotal - 9.5 20.6 11.6 41.7 Interest during construction - 0.6 1.2 0.7 2.5 Total Electrification - 10.1 21.8 12.3 44.2 TOTAL FfIANCIAL R=UIRENENTS 21.8 48.4 44.8 13.5 128.5 1/ Incurred prior to beginning of construction. INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Comparative Summary Water Budget "With" the Project and "Without" Additional Tubevells 1965 1975 1985 Net IncreaBe "With" "Without" "Withn "Without" "With" the Project the Additional the Additional Surface Ground- Existing Project Tubevells Project Tubevells Water water Total -(NAF)- Surface Supplies: Total: o.64 0.79 o.64 0.82 o.64 0.18 - 0.18 ----------------------------------------------------------------------__-----__-------------------------------------- 1/ Thereof during October to Nay: 0.27 0.35 0.27 0.34 0.27 0.07 - 0.07 2/ 3/ 2/ Groundwater Supplies: 0.24 0.78 o.36- 0.98 0.36- - 0.62 0.62 Total %applies: 0.88 1.57 1.00 1.80 1.00 0.18 0.62 O.80 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 1,680 private tubewells in operation by 1969 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.24 MAF) as well as those of further increase in private groundwater extraction. PUBLIC TUBEWELL PROJECT: SHUJAABAD WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL 3-WATER COURSE ---- FIELD I ~~~~~~~~~~~~~~~~TRANSPIRATION EVAPORATION I EVAPORATION I EVAPORATION I 23 I ~~~~~~~~~~~~~~~~~~~RAIN if ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0.09 1 ( l C < C ~~~~~~~~~~~~~R O P° LJ 1 05 0,82 1 80 1.62 1.14 RIVER RECHARGE RE- IN CHARGE IRRIGATION RECHARGE RECHARGE PUMPING 0 I(.09 3 0.98 I~~~ GROUND WATER RESERVOIR > DRAINAGE PUMPING ,C (R)I BRD -3331 INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Yield Projections "With" the Project (Maands per acre) _IACA ProJections Bank Group Projections Present -1965 1969 1975 1985 2000 1969 1975 1985 2000 Kharif: Coarse Rice 14.0 14.3 18.0 30.0 -40.0 15.1 18.5 26.7 40.0 Cotton 8.0 8.5 12.0 18.5 24.0 8.6 10.5 15.3 24.0 Maize- 10.0 U.0 15.0 26.0 38.0 10.8 13.2 19.7 38.0 Fbdder 200.0 220.0 290.0 430.0 550.0 216.4 263.5 378.8 550.o Pulses 5.0 5.3 7.0 10.0 14.0 5.4 6.5 9.5 14.0 Jowar 6.0 6.4 8.5 - - 6.5 7.8 - - Rabi: Wheat 13.0 13.6 19.0 29.0 36.0 14.1 17.1 28.2 36.0 Fodder 480.0 485.0 640.0 840.0 1000.0 519.4 632.4 882.0 1000.0 Oilseeds 6.0 6.1 7.5 12.5 17.0 6.5 7.8 31.3 17.0 Gram 7.0 7.2 9.0 14.0 18.0 7.6 9.2 13.1 18.0 Maize 13.0 15.0 15.0 26.0 38.0 - 13.2 19.7 38.0 Perennials: Sugarcane (Gur) 30.0 45.0 45.0 65.0 80.0 32.5 39.5 56.6 80.0 Fruit 80.0 80.0 60.0 130.0 170.0 86.6 120.0 130.0 170.0 Vegetables 140.0 140.0 170.0 200.0 250.0 151.5 170.0 200.0 250.0 PII APPENDIX 3 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Yield Projections 'Without't Additional Tubewells (Miaunds per Acre) Present -IACA Projection Bank Group Projection 1965 1969 1975 1985 2000 1969 1975 1985 2000 Kharif: Coarse Rice 14.0 14.3 14.5 22.5 35.0 15.1 18.5 26.7 40.0 Cotton 8.0 8.5 9.1 13.0 16.0 8.6 10.5 15.3 24.0 Maize 10.0 11.0 12.5 14.5 18.0 10.8 12.2 14.9 20.0 Fodder 200.0 220.0 240.0 270.0 320.0 216.4 243.8 297.2 400.0 Pulses 5.0 5.3 5.6 7.0 9.0 5.4 6.1 7.4 10.0 Jowar 6.o 6.4 7.0 8.6 11.0 6.5 7.3 8.9 12.0 Rabi: Wheat 13.0 13.6 14.5 18.0 24.0 14.1 17.1 28.2 36.0 Fodder 480.0 485.0 490.0 600.0 750.0 519.4 585.1 713.3 960.0 Oilseeds 6.o 6.1 6.3 8.3 11.5 6.5 7.3 8.9 12.0 Gram 7.0 7.2 7.4 9.5 13.0 7.6 8.5 .10.4 1U.0 Maize 10.0 11.0 12.5 14.5 18.0 10.8 12.2 14.9 20.0 Perennials: Sugarcane (Our) 30.0 45.0 33.0 44.0 56.0 32.5 39.5 56.6 80.0 Fruit 80.0 60.01" 85.0 105.0 130.0 86.6 120.0 130.0 170.0 Vegetables 140.0 170.0 150.0 170.0 200.0 151.5 170.0 200.0 250.0 1/ Yields based on increased acreage; not all of which will be bearing fruit. INDUS SPECIAL STUDY Public Tubewell Prolect - Shufiaabad Revised ProJection of Production "With" the Project 1975 1985 1990 Cropped Yields Production GFV Cropped Yields Production GPV Cropped Yields Production OPV Acres (mds/acre) ('000 mdse) (Rs. mill) Acres (mds/acre) (1000 mds) (Rs. mill) Acres (mds/acre) ('OOO mds) (Rs. mill) Kharif: Coarse Rice 7,600 18.5 140.6 1,216 7,600 26.7 202.9 1.755 7,600 30.5 231.8 2.005 cotton 102,300 10.5 1,074.2 32.226 143,600 15.3 2,197.1 65,913 163,000 17.8 2,901.4 87.042 Maize 31,400 13.2 150.5 2.784 15,200 19.7 299.4 5.539 15,200 24.5 372.4 6.889 Fodder 68,200 263.5 17,970.7 - 72,000 378.8 27,273.6 - 72,000 429.0 30,888.o - Pulses 7,600 6.5 49.4 1,037 15,200 9.5 l14.4 3.032 19,000 10.8 205.2 4.309 Jowar/BaJra 8,300 7.8 64.7 0.712 - - - - - - - - Subtotal 205,400 37.975 253,600 76.239 276,800 100.245 Rabi: Wheat 159,200 17.1 2,722.3 35.390 126,200 28.2 3,558.8 46.264 109,900 30.6 3,362.9 43.718 Fodder 53,100 632.4 33,580.4 - 56,900 882.0 50,185.8 - 57,600 918.5 52,905.6 - Oilseeds 7,600 7.8 59.3 1.394 7,600 11.3 85.9 -2,019 7,600 12.9 98.0 2.303 Gram 7,600 9.2 69e9 0.996 7,600 13.1 99.6 1,419 3,800 14.6 55.5 o.791 Maize 8,000 13.2 105.6 1.954 15,200 19.7 299.4 5,539 15,200 24.5 372.4 6.889 Green Manure 22.700 - - 34,100 - - - 34,100 - - - Subtotal 258,200 39.734 247,600 55.241 228,200 53.701 Perennials Sugarcane (Our) 9,900 39.5 391.0 7.038 12,500 56.6 707.5 12,735 11,000 63.5 698.5 12.573 Fruit 7,600 120.0 912.0 10.032 11,400 130.0 1,482.0 16,302 11,400 142.1 1,619.9 17.819 Vegetables 3,800 170.0 646.o 7.106 7,600 200.0 1,520.0 16,720 7,600 215.1 1,634.8 17.983 Subtotal 42,600 24.176 63,000 45.757 60,000 48.375 GPV of Crops 101.885 177.237 202.321 Animsl Husbandry 143.900 92,312 11h.128 TOTAL GPV 145.785 269.579 316.hh9 On-Farm Costs 1 46.651 97.048 113.921 TOTAL NPV 917.531 202.528 B Eased on IACA projection but proportionate reduction in 1985 in keeping idth reduction of yield levels, including those of fodder. Z/ 1975 * 32% of aPV 1985 - 36% of apv 1990 - 36% of GPV NDMS SPR5IAL STMDY Public Tubevel t Propect - Shujasbad Reviaed Projection or Production "WithoutM the Project 1971 1975 1985 1990 Cropped t ield Production OPV Yield Production OGP Yield Production OP Yield Production OPV Acres (mds/acre) ('000 mde) (Ra. mill) (mde/acre) ('000 mde) (Rs. mill) (mde/acre) ('000 mds) (Ra. mill) (mds/acre) ('000 mda) (Rs. mill) Sharifi Coarae Rice 3,800 15.5 60.0 630 18.5 70.3 608 26.7 101.5 878 30.5 115.9 1,002 Cotton 85,300 9.0 767.7 23,031 10.5 895.6 26,868 15.3 1,305.1 39,153 17.8 1,518.3 45,549 Mise 7,600 11.3 85.9 1,589 12.2 92.7 1,715 14.9 113.2 2,094 16.4 124.6 2,305 Fodder 53,100 225.2 11,958.1 - 243.8 12,945.8 - 297.2 15,781.3 - 328.0 17,416.8 - Pulses 5,700 5.6 31.9 670 6.1 34.8 731 7.4 42.2 886 8.2 146.7 981 Jowar/Bajra 19.000 6.7 127.3 1.400 7.3 138.7 1,526 8.9 169.1 1.860 9.8 186.2 2.048 Subtotal 174,500 27,320 31,448 44,871 51,885 Wheat 128,900 14.6 1,881.9 24,465 17.1 2,204.2 28,655 28.2 3,635.0 47,255 30.6 3,944.3 51,276 Fodder 52,700 540.5 28,484.4 - 585.1 30,834.8 - 713.3 37,590.9 - 787.2 41,485.4 - Oilseeds 5,700 6.7 38.2 898 7.3 41.6 978 8.9 50.7 1,191 9.8 55.9 1,314 Oram 5.700 7.9 45.0 641 8.5 48.4 690 10.4 59.3 845 11.5 65.6 935 Subtotal 193,000 26,004 30,323 49,291 53,525 Perenniale, Sugaroen 7,600 33.8 256.9 4,624 39.5 300.2 5,404 56.6 430.2 7,744 63.5 482.6 8,687 Fruit 3,000 92.5 277.5 3,052 120.0 360.0 3,960 130.0 390.0 4,290 142.1 426.3 4,689 Vegetables 1.900 157.6 299.4 3,293 170.0 323.0 3 200.0 380.0 4.180 215.1 408.7 4.496 Subtotal 25,000 10,969 12,917 16,214 17,872 OPV of Crops 64,293 74,688 110,376 123,282 Animal Husbandry 32.700 37.600 51,600 62.800 TOTAL on 96,993 112,288 161,976 186,082 On Fum Cote 31.038 35.932 58.311 66,990 TOTAL NP657 76 103.665 119.092 l 1 a eecm IACA Projection. 1971 - 32% of OPW. 1975 - 32% of OP7. 1985 - 36% of OPn. 1990 - 36% of OPT. INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Calculation of Rate of Return Incremental Potential Attributable Rate of Return NPV NPV Cost of 1/ NPV after Infra- Savings From Increment Capital Net Benef-ts Project Costs "Witho 'Without' Incremen- Additional Allocation to structure & 0 & N I Attributable Private Tube- Including Costs of / 34/ 37s 4/ Year Project Project tal NPV Surface Water Surface Water Services 2/ Costs Increment wells P.P.S. Project at 18X at 283 at 181 at 283 ----------(Rs. million)---------- 1970 - - - = 7.9 7.9 20.0 - 6.0 19.0 15.2 1971 65.96 65.96 - - - - 2.30 -2.2 7.9 5.7 33.4 -1.6 3.3 27.0 19.5 1972 74.6 68.4 6.2 - 6.2 0.2 7.40 -1.2 7.9 6.7 18.7 -0.7 3.0 12.6 8.4 1973 82.7 71.0 11.7 - 11.7 0.4 9.33 2.0 7.9 9.9 1.0 3.4 1974 91.0 73.6 17.4 - 17.4 0.6 9.33 7.5 7.9 15.4 3.3 4.0 1975 99.1 76.4 22.7 4.7 18.0 0.6 7.89 9.5 7.9 17.4 3.5 3.5 1976 106.9 78.5 28.4 6.6 21.8 0.8 8.03 13. o 7.9 20.9 4.1 3.2 1977 115.8 81.0 34.8 7.6 27.2 1.0 8.17 18.0 7.9 25.9 4.8 3.0 1978 122.8 83.5 39.3 9.2 30.1 1.0 8.32 20.8 7.9 28.7 4.7 2.6 1979 131.1 86.1 45.0 11.0 3h.0 1.2 8.46 24.3 7.9 32.2 4.6 2.0 1980 138.4 88.8 49.6 10.9 38.7 1.4 8.61 28.7 7.9 36.6 4.6 1.9 1981 144.8 91.6 53.2 11.9 41.3 1.4 8.75 31.1 7.9 39.0 4.3 1.6 1982 151.5 94.4 57.1 13.1 44.0 1.5 8.90 33.6 7.9 41.5 3.9 1.3 1983 158.5 97.4 61.1 14.3 46.8 1.6 9.05 36.2 7.9 44.1 3.5 1.0 1984 165.9 100.4 65.5 15.7 49.8 1.7 9.20 38.9 7.9 46.8 3.2 0.8 1985 172.5 103.7 68.8 16.7 52.1 1.8 9.33 41.0 7.9 48.9 2.9 0.7 1986 178.1 106.5 71.6 17.5 54.1 1.9 9.33 42.9 7.9 5o.8 2.5 o.5 1987 183.9 109.5 74.4 18.2 56.2 2.0 9.32 U4.9 7.2 52.8 2.2 0.4 1988 189.9 112.6 77.3 19.0 58.3 2.0 9.32 47.0 7.9 54.9 2.0 0.3 1989 196.1 115.8 80.3 19.8 60.5 2.1 9.30 19.1 7.9 57.0 1.8 0.3 1990 202.5 119.1 83.4 20.6 62.8 2.2 9.30 51.3 7.9 59.2 1.5 0.2 56.1 h3.0 58.6 43.1 3/ _ _ _ Rate of Return - 18% 4/ Rate of Return 28% 1/ Charged at average value per acre foot of total incremental water availability. Increnental Value/acre Foot Incremental Water of Incremental NPV Availability Availability (Rs. mill) (MAF )Rs.) 1975 22.7 o.6 37.8 1980 49.6 0.8 62.0 1985 68.8 0.8 86.0 1990 83.4 0.8 104.3 Absorption of surface water based on IACA intensity projections beginning in 1975 at 0.125 MAF to 1990 at 0.198 MAF. 2/ Allowance for public expenditures on infrastructure and intensified technical and advascry services. The allowance includes: 1.85% of attributable increment for roads. 1 . 1.65% of attributable increment for supporting services. Charged on incremental NPV after allocation to surface water only. 3/ Excluding Potential Private Savings 4/ Including Potential Private Savings, INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Benefit: Cost Ratio Incremental NPV Project Costs In- After Allocation cluding O&M, Services, Discounted at 8% Year to Surface Water and Infrastructure Benefits Costs ------- (Rs. Mill.)---- 1/ 2/ 1/ 2/ 1970 20.0 12.1 18.5 11.2 1971 35.6 27.7 - 30.5 23.7 1972 6.2 26.1 18.2 h.9 20.7 14.5 1973 11.7 9.7 1.8 8.6 7.1 1.3 1974 17.4 9.9 2.0 11.8 6.7 1.4 1975 18.0 8.5 o.6 11.3 5.4 0.4 1976 21.8 8.8 0.9 12.7 5.1 0.5 1977 27.2 9.2 1.3 14.7 5.0 0.7 1978 30.1 9.3 1.4 15.1 4.6 0.7 1979 34.0 9.7 1.8 15.7 4.5 0.8 1980 38.7 10.0 2.1 16.6 4.3 0.9 1981 41.3 10.2 2.3 16.4 4.0 0.9 1982 44.0 10.4 2.5 16.2 3.8 0.9 1983 46.8 10.7 2.8 15.9 3.6 1.0 1984 49.8 10.9 3.0 15.7 3.4 0.9 1985 52.1 11.1 3.2 15.2 3.2 0.9 1986 54.1 11.2 3.3 14.6 3.0 0.9 1987 56.2 11.3 3.4 14.1 2.8 0.9 1988 58.3 11.3 3.4 13.5 2.6 0.8 1989 60.5 11.4 3.5 13.0 2.4 0.8 1990 62.8 11.5 3.6 12.5 2-3 0.7 258.5 142.5 64.8 B/C ratio at 8% 1/ = 1.8 B/C ratio at 8% 2/ =.4.0 31 1/ Before deducting Potential Private Savings. 2/ After deducting Potential Private Savings. 3/ If potential private savings are added to benefit stream rather than netted out from cost stream, the Benefit/Cost ratio would be 2.3 as shown below: Present worth of benefits: 259.0 Present worth of savings : 78.7 Total 337.7 B/C ratio = 2.3 INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Private Alternative - Rate of Installation and Incremental Water Availability 2/ Number of Increase in Private Incremental Wells ins Wells during Project Replacement of Incremental Number Water Availability Tear Operation- Period Additional Wells of Wells in Operation (MAF) (1965 930 (1966 1,116 20% (1967 1,339 (1968 1,607 (1969 1,928 321 321 0.07 (1970 2,102 17h h95 0.11 (1971 2,291 189 684 0.15 9% (1972 2,497 206 890 0.20 (1973 2,722 225 1,115 0.25 (1974 2,967 245 1,360 0.31 (1975 3,234 267 1,627 0.37 1976 3,234 1,627 0.37 1977 3,234 1,627 0.37 1978 3,234 1,627 0.37 1979 3,234 321 1,627 0.37 1980 3,234 174 1,627 0.37 1981 3,234 189 1,627 0.37 1982 3,234 206 1,627 0.37 1983 3,234 225 1,627 0.37 1984 3,234 245 1,627 0.37 1985 3,2314 267 1,627 0.37 1986 3,234 _ 1,627 0.37 1987 3,234_ 1,627 0.37 1988 3,234 _ 1,627 0.37 1989 3,234 321 1,627 0.37 1990 3,234 174 1,627 0.37 1/ Rate of installation: 20% p.a. compound growth between 1965 and 1969. This rate of installation accepts the i 9% p.a. compound growth between 1969 and 1975. ceiling for coverage with private tube- H e wells stated in the IACA project report. 4 2/ Assumed rate of average utilization: 304 Each well would pump for about 2,63D hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Estimate of Incremental NPV of Private Tubevell Alternative Acreage,CF,opped Acreage Cropped Acreage Cropped Receiving'SA1d It. Expansion of Under "With" Under "Without" Overall NPV of Private NPV Increment Wate/ @ Acreage Cropped_/ Condition Condition Intensity Alternative2/ "Without" NPV Year (C'0)", ('000) ('000) ('000) Acres (Rs. mill.) (Rs. mill.) (Rs. mill.) 1969 26'.,9 1"6.8 43.7 363.1 406.8 107 63.8 61.6 2.2 1970 L2.3 26.8 69.1 347.7 416.8 110 67.7 63.8 3.9 1971 57tk 7, 36.1 93.8 332.3 426.1 112 71.5 66.o 5.5 1972 76.9 48.1 125.0 313.1 438.1 116 76.4 68.4 8.0 1973 96.Z 60.1 156.3 293.8 450.1 119 81.5 71.0 10.5 1974 119.2 74.5 193.7 270.8 464.5 123 87.4 73.6 13.8 1975 142.3 88.9 231.2 247.7 478.9 126 93.8 76.4 17.4 1976 142.3 88.9 231.2 247.7 478.9 126 97.3 78.5 18.8 1977 142.3 88.9 231.2 247.7 478.9 126 101.0 81.0 20.0 1978 142.3 88.9 231.2 247.7 478.9 126 104.9 83.5 21.4 1979 142.3 88.9 231.2 247.7 478.9 126 109.0 86.1 22.9 1980 12.3, 88.9 231.2 247.7 478.9 126 113.2 88.8 24.4 1981 2.3 88.9 231.2 247.7 478.9 126 118.2 91.6 26.6 1982 142'.'3' 88.9 231.2 247.7 478.9 126 122.1 94.4 27.7 1983 142.3 88.9 231.2 247.7 478.9 126 126.9 97.4 29.5 1984 142.3 88.9 231.2 247.7 478.9 126 131.8 100.4 31.4 1985 142'.3 88.9 231.2 247.7 478.9 126 136.7 103.7 33.0 1986 142.3 88.9 231.2 247.7 478.9 126 140.8 106.5 34.3 1987 142.13 88.9 231.2 247.7 478.9 126 145.2 109.5 35.7 1988 142.3 88.9 231.2 247.7 478.9 126 149.6 112.6 37.0 1989 142.3 88.9 231.2 247.7 478.9 126 154.1 115.8 38.3 1990 142.3 88.9 231.2 247.7 478.9 126 158.8 119.1 39.7 1/ Based on existing water depth of 2.6 acre feet on historical intensity. 2/ kpansion in addition to historical intensity of full delta (3.2 acre feet). E/ Estimated by adding NPV/acre cropped,of acreage cropped, continuing with undervatering ("without" condition) to NPV/acre cropped of acreage cropped at full delta ("with" condition). rv t H. INDUS SPECIAL STUDY Public Tubewell Project - Shujaabad Rate of Return of Private Tubewell Alternative Benefit/Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capital Total Benefits Costs Benefits Costs Year NPV and Services y/ Costs v Costs 31 Costs at 8% at 8% at 74% at 74% (Rs. MilM.) 1969 2.2 0.1 1.3 3.2 4.6 2.0 4.3 1.3 2.6 1970 3.9 0.1 1.9 1.7 3.7 3.3 3.2 1.3 1.3 1971 5.5 0.2 2.7 1.9 4.8 4.4 3.8 1.0 0.9 1972 8.0 0.3 3.5 2.1 5.9 5.9 4.3 0.9 o.6 1973 10.5 0.4 4.3 2.3 7.0 7.1 4.8 0.7 0.4 1974 13.8 0.5 5.3 2.5 8.3 8.7 5.2 0.5 0.3 1975 17.4 o.6 6.3 2.7 9.6 10.2 5.6 0.4 0.2 1976 18.8 0.7 6.3 - 7.0 10.2 3.8 0.2 0.1 1977 20.0 0.7 6.3 - 7.0 10.1 3.5 0.1 - 1978 2L14 0.7 6.3 - 7.0 9.9 3.2 0.1 _ 1979 22.9 0.8 6.3 3.2 10.3 9.8 4.4 0.1 - 1980 24.4 0.9 6.3 1.7 8.9 9.7 3.5 - - 1981 26.6 0.9 6.3 1.9 9.1 9.8 3.3 - _ 1982 27.7 1.0 6.3 2.1 9.4 9.4 3.2 - _ 1983 29.5 1.0 6.3 2.3 9.6 9.3 3.0 - _ 1984 31.4 1.1 6.3 2.5 9.9 9.2 2.9 - - 1985 33.0 1.2 6.3 2.7 10.2 8.9 2.8 - - 1986 34.3 1.2 6.3 - 7.5 8.6 1.9 - - 1987 35.7 1.2 6.3 - 7.5 8.3 1.7 - - 1988 37.0 1.3 6.3 - 7.6 7.9 1.6 - - 1989 38.3 1.3 6.3 3.2 10.8 7.6 2.1 - - 1990 39.7 1.4 6.3 1.7 9.4 7.3 1.7 _ - 177.6 73.8 6.6 6.4 B/C Ratio at 8% 2.4 1/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. 2/ Based on average annual O&M costs per tubewell of Rs. 3,900 $/ Based on average costper tubewellof Rs. 10,000 and assumed rv.te of installation. c ANNEX 4.1 Page 101 6. The Ravi Syphon - Dipalpur Link Project (a) The Project 2.160 The project is located in the Bari Doab immediately south of Lahore (see Map).')It_comprises the Ravi Syphon Dipalpiur (RBD) Link command and covers a culturable commanded area (CCA) of 595,000 acres on the right bank of the link. The project would provide additional irriga- tion supplies and water table control for the CCA included which would lead to an increase in the annually cropped acreage from presently 672,000 acres to 893,000 acres in 1985. The project area is commandable by the Ravi Syphon Dipalpur Link canal. The canal is presently served from Madhopur Barrage on the Ravi River, and rabi waters will continue to be diverted to the project area until 1970. After 1970, all surface deliveries to the project area are scheduled to come from the Marala headworks on the Chenab River. Because of the replacement works presently under construction and the redistribution of river supplies the surface water availability to the project area is not expected to alter appreciably until Tarbela comes into operation. 2.161 The distribution of the groundwater quality in the project area is aboat as follows: Groundwater Quality Zones of the Project Groundwater Quality Project Area Zone Percent '000 Acres Less than 1,000 ppm TES 43 257 1,000 - 3,000 ppm TD6 45 265 More than 3,000 ppm TES 12 73 TOTAL 100 595 It should be noted that mixing would be required in 45 percent of the project area. The water table is ten feet, or less, from grcund level in 30 percent of the area (178,000 acres). 2.162 Land tenure and farm size statistics are only available for the Lahore District. The distribution of farm sizes and tenure in this district is as follows: ANNEX 4.1 Page 102 Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 acres 55 16 5 to 25 acres 41 66 Over 25 acres 4 18 Owner operated 35) Owner cum tenant 22) Tenant operated 43 55 The average farm size in the area is about seven acres which is smaller than average for the Punjab. Less than half the farms and the culturable area is owner-operated. Fragmentation of farms is fairly extensive. Private tubewell development has been very active in the area in the past few years. By 1965 about 1,200 private tubewells had been installed in the project area providing additional water to about 20 percent of the area. 2.163 The project proposal includes the installation of 780 public tube- wells, and the enlargement of canals serving the mixing zones. The project would increase the water availability in the project area from presently 1.04 MAF to 2.08 MAF at full development. Of the increase of 1.04 MAF about 0.34 MAF would be additional surface supplies and 0.70 MAF would be provided by public tubewells above existing private groundwater exploitation. Gross output of the public wells would be 0.98 MAF but this would be partially in substitution for private wells. The availability of total additional irri- gation supplies of 1.04 MAF would lead to an increase in annual cropped acreage from 672,000 acres in 1965 to 893,000 acres at full delta in 1985. (b) Physical Works 2.164 The physical works of the project would consist of the following: (i) installation of 780 public tubewells and appurtenant struc- tures. The tubewells would be divided as follows: 440 wells with an average capacity of four cusecs would be in the fresh groundwater zone of the project area (covering 257,000 acres, or 43 percent of the CCA); 340 wells with an average capacity of 2.5 cusecs would be in the remaining area underlain by grcundwater requiring mixing with surface water; ANNEX 4.1 Page 103 (ii) enlargement of those channels supplied from the RBD Link, which feed the zones where the quality of deep ground- water is greater than 1,000 ppm TDS. These zones cover 57 percent of the projec-t area but the actual remodelling would be more extensive in order to include all parts of the distribution system affected by enlargement. 1/ Without such enlargement the introduction of the additional surface water required to achieve projected cropping intensity would not be possible. Drainage of saline zones included under the project sould become necessary as development proceeds and especially after completion of canal enlarge- ment. However, IACA does not foresee any drainage require- ment in these areas before 1975, and, therefore, no drainage works have been included in the project. The project area would, however, benefit from the implementation of the Sukh Beas Drainage Scheme. (See Chapter III). (c) Construction Schedule 2.165 The installation of the public tubewells would extend over approx- imately four years. On the assumption that the project would be brought into operation in accordance with IACA's basin-wide water development program, construction has been scheduled by IACA as follows: Preliminary Construction Schedule 1969/70 1970/71 1971/72 1972/73 --------------(Number of iJells)----___ Drilling and Construction 170 360 250 Electrification 170 360 250 Wells in Operation 170 530 780 In keeping with its assessment of the likely implementation capacity the Bank Group has in its Action Program delayed commencement of construction by one year. Construction would thus begin in the fiscal year 1970/71 and, generally following the above schedule, would be completed by 1973/74. Con- struction tould thus be completed by the end of the Fourth Plan period. Canal enlargement would be undertaken between 1970 and 1975, phased to distri- bute additional surface supplies at the time Tarbela water becomes available in the system. 1/ At a later stage, after completion of the project works, drainage will become necessary, according to IACA in some 40 percent of the area within the present project. ANNEX 4.1 Page 104 (d) Cost Estimates and Expenditure Schedule 2.166 The total cost of the project has been estimated by the Bank Group at about Rs. 209.6 million, equivalent to US$ 44.1 million. This would include the following: Summary Cost Estimates Local Foreign Currency Exchange Total -----------------(Rs. Mill)-------------- Project Preparation 4.6 3.0 7.6 Tubewells 20.3 29.8 50.1 Electrification 12.3 19.2 31.5 Canal Enlargement 29.4 4.4 33.8 Other Civil Works 12.0 1.7 13.7 Subtotal 78.6 58.1 136.7 Overheads 17.7 5.1 22.8 Contingencies 18.3 12.0 30.3 Subtotal 36.0 17.1 53.1 Interest During Construction 19.8 - 19.8 TOTAL 134.4 75.2 209.6 Details of the cost estimates are given in Appendix 1, page 1. The foreign exchange component of the project would be about 36 percent of total project costs cr US$ 15.83 million eqtivalent. 2.167 Expenditures would be spread over approximately six years, with the greater portion being incurred in the first four. ANNEX 4.1 Page 105 Summary Expenditure Schedule Year 1 2 3 4 5 6 -_----_ (Rs. Mill) ----------- Tubewells and Associated Wiorks 28.6 45.5 33.4 1.7 - - Electrification - 11.4 24.1 16.6 - - Canal Enlargement - 8.9 9.2 9.7 10.0 10.5 TOTAL 28.6 65.8 66.7 28.0 10.0 10.5 A more detailed expenditure schedule is given in Appendix },Lpage 2. (e) Recovery of Project Expenditures 2.168 On the basis of the above cost estimates a preliminary assessment has been made of the charges required to recover the total costs of this project over its lifetime. Including operation and maintenance expenditures the average annual rate of recovery would have to be about Rs. 22.8 million as shown below: Preliminary Assessment of Annual Costs for Operation and Maintenance and Recovery of Capital Annual Costs (Rs. Mill) Capital Costs 1/ (Annuity at 6% over 20 years for Rs. 109.2 million) 9.5 Operation and Maintenance (Including costs, repairs, electricity and recovery of power investment) 10.0 Total Tubewell Costs 19.5 Recovery of Canal Enlargement Costs: Capital Costs (Annuity at 6% over 35 years for Rs. 48.3 million) 3.3 TOTAL 22.8 T-Based on recovery of investment in tubewell project only, including project preparation and interest during construction. ANNEX 4.1 Page 106 2.169 Future water rates on water supplied from tubewells would have to be about Rs. 22 per cropped acre to recover total tubewell costs and O&M expenditures (Rs. 33 per acre CCA). Existing water rates on surface supplies average about Rs. 7 per cropped acre. Since the Ravi Syphon project includes canal enlargement, without which projected cropping intensities could not be achieved, an additional charge on surface water of about Rs. 4 per cropped acre would have to be levied in order to recover canal enlargement costs. Total water charges in the future, therefore, would have to be in the neigh- borhood of Rs. 33 per cropped acre or about Rs. 50 per acre CCA. This TDuld be about ten percent of the expected net value of production per cropped acre in 1985. (f) The Irrigation Regime 2.170 The mean quantities of surface and groundwater which would be made available at various stages of development with the project and the com- parison with the irrigation water availability likely to prevail if no further private tubewells were installed after 1967 are summarized in the water budget attached as Appendix 2. Groundwater exploitatibn by existing-private tubewells would be expected to discontinue following implementation of the project. The total water availability at watercourse heads under the public project would be about 2.08 MAF at the stage of full development. Of this 0.98 MAF would be provided by public tubewells and 1.10 MAF by canal supplies. Some 0.46 MAF of groundwater availability would substitute private exploita- tion, i.e. the net increase of groundwater availability due to the project would be 0.52 MAF. Surface water availability would increase from 0.76 MAF to 1.10 MAF or by 0.34 MAF. The lowering of the water table to an average depth of ten feet in the early stages of the project ADuld require the per- manent extraction of about 0.17 MAF of groundwater before additional surface supplies would be admitted into the project area. 2.171 As an alternative to the public tubewell project further irriga- tion development could take place through the continued installation of private tubewells in conjunction with canal enlargement. The following table shows water availability and potential intensity growth as projected for these alternative forms of groundwater development. ANNEX 4_ Page 107 Water Availability and Cropping Intensity 1975 and 1985 Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 4,352 -/ 780 4,352 1/ 780 Surface Supplies (MAF) 1.04 1.04 1.10 1.10 Annual Pumpage (MAF) 0.97 0.87 0.97 0.98 Total Annual WJatercourse Delivery (MAF) 2.01 1.91 2.07 2.08 Cropping Intensity (percent) 138 138 150 150 Acres Cropped ('000) 823 823 893 893 Acres Feet/Acres Cropped 2.4 2.3 2.3 2.3 1/ Private wells of one cusec capacity. This indicates that private groundwater development would be capable of pumping the estimated annual recharge. This would provide sufficient water table control, under both private and public tubewell development, for additional surface supplies to be admitted to the project area. Con- sequently, the combined water availability of irrigation water under private development at an earlier date may well induce farmers to a more rapid ex- pansion of cropped acreage than anticipated under the public project. (g) Agricultural Development 2.172 The project area at present, receives more regular supplies of surface water and thus has considerable advantage over the adjacent non- perennial Dipalpur commands. This advantage is particularly reflected in a higher rabi intensity and the total cropping intensity of 113 1/ percent in 1965 compares favorably with the overall average of 102 percent for the Bari Doab. Agriculturally, it is the most advanced part of the Bari Doab. Further development of the area is mainly constrained by unreliable surface water supplies (particularly during the rabi season, which results in a considerable degree of underwatering) and a high water table of less than ten feet in 30 percent of the project area. The main kharif crops are rice, cotton, fodder and coarse grain. The main rabi crop is wheat, together with fodder (which is grown partially as a cash crop, sold in Lahore), oil seeds and gram. Yields are only slightly affected by waterlogging and salinity but average cotton and rice yields are still relatively low. The estimated value of crop production in 1965 was of the order of Rs. 94 million and live- stock production Rs. 57 million, giving a total GPV of Rs. 151 million (Rs. 254 per acre of CCA). 1/ Counting perennial acreage twice, i.e. total acreage cropped is 672,000. Counting perennials only once the cropping intensity would be 102 percent. ANNEX 4.1 Page 108 2.173 During the period prior to the implementation of the project (1965 to 1969), the growth of agricultural production within the project area is expected to continue at the present trend. IACA projects an increase of private tubewell installation from about 1,185 in 1965, to about 2,185 in 1969. With the start of the project further private tubewell develop- ment would be expected to cease and 780 public wells would successively substitute the private wells in operation. At the same time the project would obviate the growth of private tubewell installations otherwise projected by IACA to reach about 3,440 in 1975 and 4,355 in 1985. 2.174 On the assumption that water availability would be enhanced as projected either under the public project or by means of private ground- water development, the cropping intensity for both forms of development would be expected to grow as follows: Growth of Cropped Acreage Cropped Acreage Year Intensity (%) ('000 acres) 1/ 1965 113 672 1969 (start of project) 118 703 1975 138 823 1985 150 893 1990 150 893 :7-Perennial crops counted twice. 2.175 For purposes of evaluation assessments have been made by the Bank Group of the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water develop- ment. In accordance with the crcpping intensity, cropping patterns and yield growth projected for the respective cases (for details see Appendices 3 and 4) the GPV and the production increments would be expected to develop about as follows: ANNEX 4.1 Page 109 Growth of GPV 'With" and "Without" Groundwater Development Incre- 'Without" "With" mental Additional Groundwater Groundwater Development GPV Crops Livestock Total Crops Livestock Total Tot --------------------------- (Rs. Mill.) -------------------- 1965 94 57 151 -94 57 151 - 1969 107 73 180 107 73 180 - 1975 135 90 225 161 99 250 35 1985 193 116 309 264 178 442 133 Over the life of the project the GPV would more than double under both forms of groundwater development, and the level of production would be about 40 percent higher than that of the "without" case. 1/ The GPV per acre CCA would increase from Rs. 254 (see para 2.172) to Rs. 742 as compared to Rs. 519 per acre CCA in the "without" case. 2.176 To achieve the above projected growth of production appreciable increases in on-farm expenditures would be expected, and great efforts would have to be made, to make available the quantities of non-water inputs required to sustain such growth. Allowing for the increased on-farm expenditures and associated current project costs as well as the allocation of benefits to additional surface water absorption the incremental net production value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, pages7idafid 2. ANNEX 4.1 Page 110 Incremental Net Benefits Attributable to Groundwater Development l/ 1975 1985 1990 --- (Rs. Mill.) ---____ NPV "with" 177 283 300 NPV "without" 153 197 229 Incremental NPV 2/ 24 86 71 Allocation to Surface Water - 4 16 24 Allowance for Infrastructure and Services 1 2 3 Increase in O&M Expenditures 1 2 2 Total Associated Costs 6 20 29 Incremental Net Benefits Attributable to Groundwater Development 18 66 42 1/ For details see Appendices 4-ad 5, pages 1-and 2. 2/ This analysis does not include incremental benefits and costs due to canal enlargement. Canal enlargement benefits are sub-summed under the allocation of incremental benefits to additional surface -water, (see Appendix 6, page.3). A comparison against the alternative private development (see Appendix 6, pages 2 and 3) indicates that, after due allowance for all costs, the incremental net benefits attainable from the public project would be only marginally greater than from continued private well installations. (h) Farmer Incentives 2.177 The benefits obtainable from further groundwater development should provide considerable incentives for the farmers. This is demonstrated in the following table which compares the growth of farm income under both forms of groundwater development (public and private) against that of no further water development. Based on ten acres CCA the farm income would be expected on average to improve as follows: AVERAGE CHANGES IN FARM INCOME PER FARM OF 10 ACRES CCA WITHIN THE PROJECT AREA UNDER ALTERNATIVE FORMS OF DEVEIDPMENT 1975 1985 1990 Without Private Public Without Private Public Without Private Public Cropping Intensity (%) 118 138 138 118 150 150 118 150 150 Gross Production Value ('Rs.) 3,781 4,370 4,370 5,193 7,430 7,430 6,017 8,705 8,705 On-Farm Expenditure (Rs.) 1,210 1,400 1,400 1,865 2,680 2,680 2,163 3,130 3,130 Water Charges (Rs.) 265 1/ 550 492 265 564 2/ 507 3/ 265 564 507 Total Current. Expenditures (Rs.) 1,475 1,950 1,892 2,130 3,244 3,187 2,426 3,694 3,637 Farm Income (Rs.) 2,300 2,420 2,478 3,063 4,186 4,243 3,589 5,011 5,o68 1/ Water charges pertaining to the "without" additional tubewell cse consist of: (i) Surface water charge at Rs. 7 per acre cropped Rs. 83 (ii) 0&34 of tubewell existing in 1969 Rs. 135 (iii) Amortization at 6% over 10 years of existing wells Rs. 47 TOTAL Rs. 265 2/ Private development (1985 condition) (i) Surface water charge at Rs. 12 per acre cropped Rs. 180 (ii) O&M for private wells Rs. 285 (iii) Amortization at 6% over 10 years of private wells Rs. 99 TOTAL Rs. 564 3/ Public development (1985 condition) (i) Surface Water charge at Rs. 12 per acre cropped Rs. 180 (ii) O&M and amortization at 6% over 20 years Rs. 327 a TOTAL Rs. 507 t ANNEX 4.1 Page 112 The results given in the above table are averages over the whole project area only. It should be noted that development of private tubewells also assumes the introduction of relatively large amounts of additional surface water. This would not be possible unless existing canals are enlarged, as proposed in the public project. To the extent that such enlargement is not carried out, the water availability would not support the projected growth of cropping intensity and this, in turn, would have a strong detri- mental effect on farm income. In both cases, however, costs of enlargement are reflected in the water charges used. Furthermore, the table presents average figures for the whole project area. Farmers who possess private tubewells may very well exceed the average income but in areas where frag- mentation or groundwater quality provide less of an incentive for private development incomes may be much lower. The indications are, however, that both forms of groundwater development would enable attainment of similar levels of average farm incomes. (i) Project Evaluation 2.178 As discussed in Chapter II, A above the Bank Group's evaluation of projects is based on a somewhat different approach than that of IACA. The Bank Group has also divided its evaluation into two separate parts: an evaluation of the tubewell project alone, excluding canal enlargement costs and benefits and an evaluation including both costs and benefits resulting from canal enlargement. In the second analysis total additional surface availability 1/ (both rabi and kharif) was divided into two portions: the portion released from storage between October and May, and that portion of the increment introduced into the area during peak river and channel flows which could not be absorbed by the project area without canal enlarge- ment. The latter increment of surface supplies was multiplied by the average value per acre foot of incremental water to derive the incremental NPV attributable to canal enlargement (see Appendix 5, page 3). 2.179 The results of a public tubewell project excluding costs and benefits due to canal enlargement are assessed as follows: 1/_Benefits were calculated from 1975 - the first year after scheduled completion of canal enlargement. In 1975 additional surface water due to enlarged canals is estimated at 0.13 MAF. This would increase to 0.19 MAF in 1985 after which this quantity would remain constant to the end of the period. ANNEX 4.1 Page 113 Results of Project Evaluation Public Tubewell Project Only Incremental NPV (Rs. mill. present worth at 8%) 301 Benefit/Cost Ratio (at 8%) 4.4 Rate of Return: a) exclusive of potential private savings 17% b) inclusive of potential private savings 29% This compares to IACA's assessment 1/ of incremental NPV before allocation of benefits to surface water and without canal enlargement of Rs. 592 million and a rate of return on incremental costs only of 80 percent. The calculations pertaining to the economic evaluation are given in Append1s 5. 2.180 The estimated rates of return to the public tubewell project after including Rs. 48.5 million capital costs for canal enlargement and the additional benefits resulting from additional surface water, does not change appreciably from those found in the partial analysis above. However, the inclusion of benefits due to canal enlargement does increase the net pro- duction value of the project, raising it from Rs. 301 million to Rs. 376 million or by 25 percent. IACA's estimated rate of return on the entire project was 48 percent, including estimated benefits from canal enlargement of Rs. 217 million. The private alternative, as evaluated by the Bank Group (see Appendix 6, page 3), including canal enlargement, would give a rate of return of 34 percent. The incremental production attainable with private development would be similar to that of the public project. (j) Conclusion 2.181 Continued private tubewell development in the Ravi Syphon area would allow farmers in the area to achieve a cropping intensity and general level of production similar to that projected for the public project. Ex- tensive private coverage already exists and all indications are that active private investment in tubeiells will continue. Consideration should there- fore be given to the initial development of groundwater by the private sector and the reduction of the -scope of this project to the canal enlargement element only. This-form of development would allow savings to the public sector in the order of Rs. 161 million, while at the same time relaxing the strain on scarce implementation and management capacities available for the public tubewell program as a whole. A public tubewell project for this area has been tentatively included in the Bank Group's Action Program. However, careful monitoring iWATER COURSE-4->< FIELD I I / \ TRANSPIRATION EVAPORATION I EVAPORATION EVAPORATION I 69 RAIN q_~~~~~~~~~~~~~~~~~~i ~~~~~~~~~~0.38 z ~ ~~~~~~~~~~~~~~~~~~ P ROlP LUJ 136 1.10 2.08 138 1.31 > USE RIVER RECHARGE RE- CHARGE IRRIGATION RECHARGE * RECHARGE I PUMPING 0.90 0.1~~~~~~~~~~09 GROUND WATER RESERVOIR > DRAINAGE 0,S PUMPING X (R) IBRD -3327 mI' ANNEX 4.1 APPENDIX 3 Page 1. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Yield Projections "With" Additional Tubewells (Maunds per Acre) Present IACA Projection Bank Group Projection 1995 1969 1975 1985 2000 1969 1975 1985 2000 Kharif Coarse Rice 17.0 18.6 25.0 38.0 50.0 18.4 22.9 32.7 50.0 Fine Rice - 16.6 22.5 32.0 42.5 16.6 20.6 29.3 42.5 Cotton 7.0 7.3 10.0 15.0 20.0 7.6 9.4 13.3 20.0 Maize 10.0 11.9 17.0 26.0 38.o 10.8 13.4 20.0 38.0 Fodder 250.0 270.0 350.0 470.0 600.0 270.5 335.9 465.o 600.0 Pulses 5.5 5.9 7.5 lo.o 14.0 6.o 7.4 10.4 14.0 Jowar 6.o 6.4 - - - 6.5 - - - Rabi Wheat 12.0 13.1 19.0 27.5 34.o 13.0 16.1 24.8 34.o Fodder 540.0 545.0 700.0 84o.o 1000.0 584.3 725.4 961.4 1ooo.o Oilseeds 6.o 6.2 7.5 10.5 15.0 6.5 8.0 11.2 15.0 Gram 8.0 8.2 10.0 14.0 18.0 8.6 10.7 14.7 18.0 Maize 10.0 11.9 17.0 26.0 38.o 10.8 13.4 20.0 38.o Perennials Sugarcane(GUR) 30.0 31.8 44.o 62.0 76.0 32.5 40.3 56.3 76.o Fruit 80.0 85.0 100.0 130.0 170.0 86.6 107.5 145.7 170.0 Vegetables 140.0 145.0 170.0 200.0 250.0 151.5 188.0 247.8 250.0 APPENDIX 3 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Yield Projections "Without" the Project (Maunds per acre) Present IACA Projection Bank Group Projection 1965 1969 1975 1955 2000 1969 1975 1985 2000 Kharif Coarse Rice 17.0 18.6 19.0 28.8 40.0 18.4 22.9 32.7 50.0 Fine Rice - 16.6 17.0 25.2 34.o 16.6 20.6 29.1 42.5 Cotton 7.0 7.3 7.5 lo.o 14.0 7.6 9.4 13.3 20.0 Maize 10.0 11.9 13.5 15.5 18.0 10.8 12.2 14.9 38.0 Fodder 250.0 270.0 290.0 320.0 375.0 250.5 304.7 371.5 600.0 Pulses 5.5 5.9 6.o 7.5 10.0 6.o 6.7 8.2 14.0 Jowar 6.o 6.4 6.3 8.0 11.0 6.5 7.3 8.9 - Rabi What 12.0 13.1 14.3 17.5 22.0 13.0 16.1 24.8 34.o Fodder 540.0 545.0 550.0 650.0 750.0 584.3 658.3 802.4 ooo0.o Oilseeds 6.o 6.2 6.4 8.o 1o.o 6.5 7.3 8.9 15.0 Gram 8.o 8.2 8.4 11.2 14.0 8.6 9.7 11.9 18.0 Maize 10.0 11.9 13.5 15.5 18.0 6.o 12.2 14.9 38.o Perennials Sugarcane(GUR) 30.0 31.8 33.6 43.0 56.0 32.5 40.3 56.3 76.o Fruit 80.0 85.o 90.0 105.0 130.0 86.6 107.5 145.7 170.0 Vegetables 140.0 145.0 150.0 170.0 200.0 151.5 188.0 247.8 250.0 I I N D U S S P E C I A L S T U D Y Public Tubewell Project - Ravi Syphon - Revised Projection of Production 'WITH" The Project 1 9 75 1 985 1 99 0 Cropped Yields Production GPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (sids/acre) ('000 meds) (Rs. mill) Acres (mds/acre) (000 mds) (Rs. mill) Acres (mds/acre) (000 mds) (Rs. mill) K:ARIF2 Coarse Rice 11,800 22.9 270.2 2.337 11,800 32.7 385.9 3.338 11,800 42.2 498.0 4.308 Fine Rice 41,200 20.6 8h6.7 12.4±33 59,500 29.1 1,731.4 25.365 77,C00 36.5 2,825.1 41.388 Cotton 85,200 9.4 800.9 24.027 95,200 13.3 1,266.2 37.986 107,100 17.0 1,820.7 51.621 Maize 29,800 13.4 399.3 7.387 29,800 20.0 596.0 11.026 29,800 29.1, 876.1 16.208 Fodder 106,700 335.9 35,840.5 - 113,100 465.o 52,591.5 - 124,900 542.1 67,708.3 - Pulses 11,900 7.1 88.1 1.850 23,800 10.4 247.5 5.198 23.800 12.4 295.1 6.197 Sub-Total 286,600 48.034 333,200 82.913 374,800 122.722 RABI: Wheat 255,200 16.1 4,108.7 53.413 220,100 211.8 5,458.5 70.960 166,600 27.6 1,598.2 59.777 Fodder 95,200 725.1 69,058.1 - 101,100 961.4 97,197.5 - 107,200 983.5 105,4±31.2 - Oilseeds 12,500 8.0 100.0 2.350 11,900 11.2 133.3 3.133 11,900 13.1 159.5 3.748 Grams 23,800 10.7 2511.7 3.629 23,800 111.7 3M9.9 4,986 17,900 16.6 297.1 11.231 Maize 17,900 13.1 239.9 h.138 23,800 20.0 1176.0 8.806 23,800 29.4 699.7 12.914 Green Manure 23,800 - - - 47.600 - - - 59.500 - - Sub-Total 428,o00 63.830 428,300 87.885 386,goo 80.703 PERENNIAL: Sugarcane 44,400 40.3 1,789.3 32.207 11,600 56.3 2,31±2.1 h12.158 35,700 67.1 2,406.2 43.312 Fruit 4,100 107.5 110.8 O.849 11,900 145.7 1,733.8 19.072 17,900 159.7 2,858.6 20.900 Vegetables 5.800 188.0 1,090.4 11.994 11,900 217.8 2,9L8.8 32.137 11,900 2A9.4 2,967.9 32.617 Sub-Total 108,600 h9- 50 130,800 93.667 131,000 96.859 GPV of Crops 160.91h 264.465 300.200 Animal Husbandry 99.428 177.732 218.000 TOTAL GPV 260.31±2 442.197 518.200 On-Farm Costs 2/ 83.309 159.191 186.ooo TOTAL NPV 177.033 283.oo6 300.2 1/ Based on IACA projections but reduced proportionately for 1975 and 1985 in keeping 2/ 1975 = 32% of GPV 1 F with reduction of yield levels including those of fodder. 1985 - 36% of GPV 1990 = 36% of GPV I N D U S S P E C I A L S T U D Y Public Tubewell Project - Ravi Syphon Revised Projection of Production '"tITHOUT" The Project 1971 1975 1985 1990 Cropped Yields Production GPV Yields Production GPV Yields Production GPV Yields Production GPV Acres (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) KHARIF: Coarse Rice 13,200 18.8 21h8.2 2.522 22.9 302.3 2.615 32.7 1L31.6 3.733 L2.2 557.0 L.818 Fine Rice 28,300 16.9 h78.3 8.131 20.6 583.0 8.51L1 29.1 823.5 12.061 36.5 1'033.0 15.133 Cotton 6h,oo0 7.7 h92.8 lh.78L, 9.1h 601.6 18.0M 8 13.3 851.2 25.536 17.0 1,08e.0 32.61±0 Maize 26,500 11.0 291.5 5.393 12.2 323.3 6.081 l1h.9 39M.8 7.30h 16. OM31±.6 8.oho Fodder 9h,500 276.0 26,082.0 - 30h.7 28,79h.2 - 371.5 35,106.8 - 110.0 38,7O5.0 Pulses 7,200 6.1 L3.9 o.922 6.7 h8.2 1.012 8.2 59.0 1.239 9.0 6h.8 1.361 Jowar/Bajra lh,800 6.6 97.7 1.075 7.3 108.0 1.188 8.9 131.7 1.1l19 9.8 l±5.0 1.595 Sub-Total 248,500 32.827 37.185 51.325 63.587 RABI: Wheat 217,500 13.2 2,871.0 37.323 16.1 3,501.8 1±5.523 21±.8 5,39h.0 70.122 27.6 6,003.0 78.039 Fodder 88,700 596.1 52,871.1 - 658.3 58,391.2 - 802.1 71,172.9 - 885.6 78,552.7 - Oilseeds 13,100 6.6 86.5 2.033 7.3 95.6 2.217 8.9 116.6 2.71±0 9.8 128.1, 3.017 Gram 30.900 8.8 271.9 3.875 9.7 299.7 1h.271 11.9 367.7 5.2ho 13.1 WMol.8 5.768 Sub-Total 350,200 13.231 52.0hl 78.102 86.82h PERENNIALS: Sugarcane h1,600 33.1 1,176.3 26.573 1O.3 1,797.h 32.353 56.3 2,511.0 15.198 67.h 3,006.0 5M.1o8 Fruit 3,000 88.3 26h.9 2.91h 107.5 322.5 3.51±8 lh5.7 1±37.1 1M.8M8 159.7 h79.1 5.270 Vegetables h,800 15L.5 741.6 8.158 188.o 902.1± 9.926 217.8 1,189.1 13.083 2L9.1± 1,197.1 13.168 lOh,800 37.6h5 h5.827 63.089 72.546 GPV of Crops 703,500 113.703 135.353 192.516 222.957 Animal Husbandry i/ 78.800 89.700 115.700 13L.700 TOTAL GPV 192.503 225.053 308.216 357.657 On-Farm Costs a 61.601 72.017 110.958 128.756 TOTAL NPV 130.902 153.036 197.258 228.901 1/ Based on IACA Projection. 2/ 1971 = 32% of GPV i 1970 = 32% of GPV 1585 = 36% of GPV 1990 = 36% of GPV INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Calculation of Rate of Return (Tubewells Only) Costa' of Incremental NPV O&M4 and Incremental Benefits R A T E O F R E T U R N NPV MWth- NPV -Without- Incremental Additional After Allocation to Infrastructure Power Attributable Potential Including Potential Capital Costs Net Benefits Project Costs Year Project Project NPV Surface Water Surface Water and Service 2/ Costa Increment Private Savings Private Savings of Prolect at 17% 3/ at 29% hi at 17% 3/ at 29% 4/ --------------- -- (Re. Million) 1970 _- - - - 10.0 10.0 26.3 - 7.8 23.5 20.A 1 1971 130.9 130.9 - _- - 2.3 - 2.3 10.0 7.7 39.6 - 1.7 h.6 32.6 23.9 1972 111.4 136.1 5.3 - 5.3 0.2 6.8 - 1.7 10.0 8.3 27.6 - 1.1 3.9 19.h 12.9 1973 152.8 1al.6 11.2 - 11.2 0.4 9.3 1.5 10.0 11.S - 0.8 h.2 _ - 197T 165.2 1h7.2 18.0 - 18.0 o.6 9.3 8.1 10.0 18.1 - 3.8 5.1 _ _ 1975 177.0 153.0 2b.0 3.8 20.2 0.7 8.5 11.0 10.0 21.0 - h.lh L.6 _ _ 1976 185.6 157.0 28.6 5.3 23.3 0.8 8.6 13.9 10.0 23.9 - Ij.8 M1 _ _ 1977 19h.5 161.1 33.4 6.5 26.9 0.9 9.h 16.6 10.0 26.6 - 4.9 3.5 - _ 1978 203.9 165.3 38.6 8.5 30.1 1.0 9.6 19.5 10.0 29.5 - h.9 3.0 - - 1979 213.8 169.6 44.2 10.0 314.2 1.2 9.6 23.L 10.0 33.h - 5.1 2.7 - - 1980 224.1 1714.0 50.1 11.1 39.0 1.Ii 9.7 27.9 10.0 37.9 - 5.2 2.h - - 1981 235.0 178.5 56.5 12.3 4h.2 1.6 9.7 32.9 10.0 b2.9 - 5.3 2.1 - - 1982 2h6.3 183.2 63.1 13.4 h9.7 1.7 9.8 38.2 10.0 h8.2 - 5.2 1.8 - - 1983 258.2 187.9 70.3 14.8 55.5 1.9 9.9 13.7 10.0 53.7 - 5.2 1.6 - - 1981 270.7 192.8 77.9 16.0 61.9 2.2 10.0 h9.7 10.0 59.7 - 5.O l.h - - 1985 283.0 197.3 85.7 16.9 68.8 2.4 10.0 56.4 10.0 66.4 - h.9 1.2 - - 1986 294.2 203.2 91.0 19.0 72.0 2.5 10.0 59.5 10.0 69.5 - h.4 1.0 - - 1987 305.6 209.3 96.3 20.2 76.1 2.7 10.0 63.h 10.0 73.h - L1a 0.8 _ - 1988 317.6 215.5 102.1 21.4 80.7 2.8 10.0 67.9 10.0 77.9 - 3.7 o.6 - - 1989 330.0 222.0 108.0 22.6 85.4 3.0 10.1 72.3 10.0 82.3 - 3.4 0.5 - - 1990 3143.4 228.9 111..5 2h.0 90.5 3.2 10.1 77.2 10.0 87.2 - 3.1 O.h - _ 75.4 57.3 75.5 57.2 Rate of Return 2" - 17% Rate of Return - 29% y Charged at average value per acre foot of total incremental water availabilitys Incremental Value/Acre Foot Incremental Water of Incremental NPV Availabilit Availabil ity_ (RW. El= (.) (NPF) (Rs.) 1975 21c.0 o.69 31h.8 1980 50.1 0.77 65.1 1985 85.7 o.86 99.6 1990 131J.5 0.86 133.1 Absorption of surface water based on IACA intensity projections beginning in 1975 at 0.108 MAP to 1990 at 0.180 MAF. Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includeas 1.85% of attributable increment for roads. 1.65% of attributable increment for supporting services. I r Charged on incremental NPV after allocation to surface water only. | Excluding Potential Private Savinga. i/ Including Potential Private Savings. INDUS SPECIAL STUDY Page 2 Public Tubewell Project - Ravi Syphon Benefit: Cost Ratio (Tubewells only) Incremental NPV Project Costs Includ- Discounted at 8% after Allocation ing 0 & M, Services Year to Surface Water and Infrastructure Benefits Costs ----- (Rs. Mill.) --- Before After deduction deduction Before After of P.P.S. of P.P.S. deducting deducting P.P.S. P.P.S. 1970 26.3 16.3 _ 24.4 15.1 1971 - 41.9 31.9 - 35.9 27.3 1972 5.3 34.6 24.6 4.2 27.5 19.5 1973 11.2 9.7 - 0.3 8.2 7.1 - 0.2 1974 18.0 9.9 - 0.1 12.2 6.7 - 0.1 1975 20.2 9.2 - 0.8 12.7 5.8 - 0.5 1976 23.3 9.4 - o.6 13.6 5.5 - 0.4 1977 26.9 10.3 0.3 14.5 5.6 0.2 1978 30.1 10.6 o.6 15.1 5.3 0.3 1979 34.2 10.8 0.8 15.8 5.0 0.4 1980 39.0 11.1 1.1 16.7 4.8 0.5 1981 44.2 11.3 1.3 17.6 4.5 0.5 1982 49.7 11.5 1.5 18.3 4.2 o.6 1983 55.5 11.8 1.8 18.9 4.0 0.6 1984 61.9 12.2 2.2 19.5 3.8 0.7 1985 68.8 12.4 2.4 20.1 3.6 0.7 1986 72.0 12.5 2,5 19.5 3.4 0.7 1987 76.1 12.7 2.7 19.0 3.2 0.7 1988 80.7 12.8 2.8 18.7 3.0 0.6 1989 85.4 13.1 3.1 18.3 2.8 007 1990 90.5 13.3 3.3 18.0 2.6 007 300.9 168.7 68.6 B/C Ratio at 8% 1 8 B/C Ratio at 8% 2/ = 4 / 1/ Including Potential Private Savings. 2/ Excluding Potential Private Savings. 3/ If potential private savings are added to the benefit stream rather than netted out of the cost stream, the Benefit/Cost ratio would be 2.4; that is: Present worth of benefits = 300.9 Present worth of costs = 100.1 401.0 Benefit Cost Ratio 4167 = 2.4 168.7 I INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Benefit:Cost Ratio for Project Including Canal Enlargement …_________(Rs. millions)---------- Incremental Total Incremental NPV Canal Increased Infrastructure Project Costs Including OGM Discounted at 8% Rate of Return NPV due to due to the Project After Enlargement Costs due to Canal Services and Infrastructure Bo afits Costs Benefits Costs Year Canal Enlargement Allocation to Surface Water Costs Enla rgement for Canal Enlargemet Benefits Costs at 17% at 17% - at 25. at 25% - 1970 - - - - 26.3 16.3 - 24b. 15.1 - 22.5 - 13.0 1971 - - 8.9 - 5o.8 40.8 - 43.6 35.0 - 37.4 - 26.0 1972 - 5.3 9.3 - 43.9 33.9 4.2 3h.8 26.9 3.3 27.3 2.7 17.2 1973 - 11.2 9.7 - 19.4 9.4 8.2 14.3 6.9 6.o 10.3 4.5 3.8 1974 - 18.0 10.1 - 20.0 10.0 12.3 13.6 6.8 8.2 9.1 5.8 3.2 1975 4.5 24.7 10.5 0.2 19.9 9.9 15.6 12.5 6.2 9.6 7.8 6.4 2.6 1976 5.6 28.9 0.2 9.6 (-) 0.4 16.9 5.6 (-3 0.2 9.6 3.2 6.0 (-3 0.1 1977 6.6 33.5 0.2 10.5 0.5 18.1 5.8 0.3 9.5 3.0 5.5 0.1 1978 7.8 37.9 0.3 10.9 0.9 19.0 5.5 0.5 9.2 2.6 5.0 0.1 1979 9.1 43.3 0.3 11.1 1.1 20.1 5.1 0.5 9.0 2.3 4.5 0.1 1980 10.4 49.4 0.4 11.5 1.5 21.2 4.9 0.6 8.8 2.0 4.1 0.1 1981 12.0 56.2 0.4 11.7 1.7 22.3 4.6 0.7 8.5 1.8 3.8 0.1 1982 13.6 63.3 0.5 12.0 2.0 23.3 4.4 0.7 8.2 1.6 3.4 0.1 1983 15.5 71.0 o.5 12.3 2.3 24.2 4.2 0.8 7.9 1.4 3.0 0.1 1984 17.3 79.2 o.6 12.8 2.8 25.0 4.0 0.9 7.5 1.2 2.7 0.1 1985 18.9 87.7 0.7 13.1 3.1 25.6 3.8 0.9 7.1 1.1 2.4 0.1 1986 20.1 92.1 0.7 13.2 3.2 24.9 3.6 0.9 6.4 0.9 2.0 0.1 1987 21.3 97.4 0.7 13.4 3.4 24.4 3.4 0.9 5.7 0.8 1.7 0.1 1988 22.6 103.3 0.8 13.6 3.6 23.9 3.2 0.8 5.3 0.7 1.4 0.1 1989 23.9 109.3 0.8 13.9 3.9 23.5 3.0 0.8 4.7 o.6 1.2 -- 1990 25.3 115.8 0.9 124.2 4.2 23.0 2.8 0.8 4.3 o.5 1.0 375.7 206.9 106.8 138.8 138.0 67.1 67.0 B/C Ratio at 8% 2/' 3.5 Rate of Return - 25% B/C Ratio at 8% - - 1.83/ Rate of Return - - 17% I/ Including Potential Private Savings. a/ Excluding Potential Private Savings. 3/ If potential private savings are added to the benefit stream rather than netted out of the cost stream, the Benefit/Cost ratio would be 2.3; that is: Present worth of benefits - 375.7 Present worth of savings - 100.1 475.8 Bemefit Cost Ratio 475.8 . 2.3 20S.9 INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Incremental Wells in Wells During Project Replacement of Incremental Number Water Availability .Year Operation / Period Additional Wells Of WJells in Operation (MAF) 1965 1,185 1966 1,422 1967 1,706 1968 2.,0h7 1969 2,456 409 409 0.09 1970 2,702 246 655 0.15 1971 2,972 270 925 0.21 1972 3,269 297 1,222 0.27 1973 3,596 327 1,549 0.35 1974 3,956 360 1,909 0.43 1975 4,352 396 2,305 0.52 1976 4,352 2,305 0.52 1977 4,352 2,305 0.52 1978 4,352 2,305 0.52 1979 - 4,352 409 2,305 0.52 1980 4,352 246 2,305 0.52 1981 4,352 270 2,305 0.52 1982 4,352 297 2,305 0.52 1983 4,352 327 2,305 0.52 1984 4,352 360 2,305 0.52 1985 4,352 396 2,305 0.52 1986 4,352 2,305 0.52 1987 4,352 2,305 0.52 1988 4,352 2,305 0.52 1989 4,352 409 2,305 0.52 1990 4,352 246 2,305 0.52 CD 1/ Rate of installation: 20% p.a. compound growth between 1965 and 1969. This rate of installation accepts the 10% p.a. compound growth between 1969 and 1975. ceiling for coverage with private tube- H wells stated in the IACA project report. 2/ Assumed rate of average utilization: 30% Each well would pump for about 2,630 hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Rate of Return of Private Tubewell Alternativel/ Benefit/Cost Ratio Rate of Return ,Incremental Infrastructure 0 & M Capita,l Benefits Costs Benefits Costs at Year NPV and Services2/ Costs3/ Costs4/ Total Costs at 8% at 8% at 47.6% 47.6% - ……… (Rs.Mil) ………---------- - ------ ---------- --------------------- - ---------------------- 1969 - 1.6 4.1 5.7 5.3 3.9 1970 - - 2.6 2.5 5.1 - 4.4 - 2.3 1971 5.3 0.2 3.6 2.7 6.5 4.2 5.2 1.6 2.0 1972 11.2 0.4 4.8 3.0 8.2 8.2 6.0 2.4 1.7 1973 18.0 0.6 6.o 3.3 9.9 12.3 6.7 2.6 1.4 1974 20.2 0.7 7.4 3.6 11.7 12.7 7.4 2.0 1.1 1975 23.3 0.8 9.0 4.0 13.8 13.6 8.1 1.5 0.9 1976 26.9 0.9 9.0 - 9.9 14.5 5.3 1.2 0.4 1977 30.1 1.1 9.0 - 10.1 15.1 5.0 0.9 0.3 1978 34.2 1.2 9.0 - 10.2 15.8 4.7 0.7 0.2 1979 39.0 1.4 9.0 4.1 14.5 16.7 6.2 0.5 0.2 1980 44.2 1.5 9.0 2.5 13.0 17.6 5.2 0.4 0.1 1981 49.7 1.7 9.0 2.7 13.4 18.3 4.9 0.3 O.i 1982 55.5 1.9 9.0 3.0 13.9 18.9 4.7 0.2 O.1 1983 61.9 2.2 9.0 3.3 14.5 19.5 4.6 0.2 0.0 1984 68.8 2.4 9.0 3.6 15.0 20.1 4.4 0.1 0.0 1985 72.0 2.5 9.0 4.0 15.5 19.5 4.2 0.1 0.0 1986 76.1 2.7 9.0 - 11.7 -19.0 2.9 0.1 0.0 1987 80.7 2.8 9.0 - 11.8 18.7 2.7 0.0 0.0 1988 85.4 3.0 9.0 - 12.0 18.3 2.6 0.0 0.0 1989 90.5 3.2 9.0 4.1 16.3 18.0 3.2 0.0 0.0 1990 90.5 3.2 9.0 2.5 14.7 - - 300.9 103.8 15.0 14.9 B/C Ratio at 8% = 2.9 1/ Not including costs and benefits due to canal enlargement. 2/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. S '/ Based on an average annual O&M costs per tubewell of Rs. 3,900. / Based on an average cost per tubewell of Rs. 10,000 at the assumed rate of installation. INDUS SPECIAL STUDY Public Tubewell Project - Ravi Syphon Rate of Return of Private Tubewell Project (Including Costs and Benefits due to Canal Enlargement) --------(Rs. millions)-------- Incremental Total Incremental NPV Benefits Costs Rate of Return NPV due to After Allocation to Costs due to C4al Total at at Benefits at Costs at Year Canal Enlargement Surface Water Enlargement!r Costs 8% 8% 3k2% 342% 1969 - 5.7 - 5.3 - 4.2 1970 - - 5.1 - 4.4 - 2.8 1971 - 5.3 8.9 15.4 4.2 12.2 2.2 6.4 1972 - 11.2 9.3 17.5 8.2 12.9 3.5 5.4 1973 - 18.0 9.7 19.6 12.3 13.3 4.1 4.5 1974 - 20.2 10.1 21.8 12.7 13.7 3.5 3.7 1975 4.5 27.8 10.7 2h.5 16.2 ]1 .3 3.5 3.1 1976 5.6 32.5 .2 10.1 17.6 5.4 3.1 1.0 1977 6.6 36.7 .2 10.3 18.4 5.2 2.6 0.7 1978 7.8 42.0 .3 10.5 19.5 4.8 2.2 0.6 1979 9.1 48.1 .3 14.8 20.6 6.3 1.9 o.6 1980 10.4 54.6 .4 13.4 21.7 5.4 1.6 O.b 1981 12.0 61.7 .14 13.8 22.7 5.1 1.3 0.3 1982 13.6 69.1 .5 14.4 23.5 4.9 1.1 0.2 1983 15.5 77.4 .5 15.0 2L.4 L4.8 0.9 0.2 1984 17.3 86.1 .6 15.6 25.1 4.6 0.8 0.1 1985 1899 90.9 .7 16.2 24.6 4.4 0.6 0.1 1986 20.1 96.2 .7 12.4 24.1 3.1 0.5 0.1 1987 21.3 102.0 .7 12.5 23.6 2.9 O.4 0.0 1988 22.6 108.0 .8 12.8 23.2 2.8 0.3 0.0 1989 23.9 114.4 .8 17.1. 22.7 3.4 0.2 0.0 1990 25.3 115.8 .9 15.6 21.3 2.9 0.2 0.0 386.6 lih2.l __ 37_ Benefit Cost Ratio at 8% = 2.7 1/ Includes an additional infrastructure cost of 3.5 percent of incremental NPV due to canal enlargement. ON ANNEX 4.1 Page 141. 1/ 9. The Bahawal Qaim Project (a) The Project 2.232 The project area lies in the Province of West Pakistan about 250 miles southwest of Lahore (see Map), and is situated in the admini- strative district of Bahawalpur. The project would provide additional irrigation supplies and water table control for 522,000 acres CCA along the left bank of the Sutlej River. The table below shows, in terms of canal commands, the CCA included under the project: CCA Included Under the Project Canal Command Total CCA CCA of the Project C- -(million acres)---------- Qaim 0.04 0.04 Bahawal Above MB Link 0.05 0.05 Bahawal Below MB Link: Perennial part 0.28 0.17 Non-perennial part 0.32 0.26 TOTAL 0.69 0.52 The distribution of the groundwater quality is as follows: Groundwater Quality Zones of the Project Project Area Groundwater Quality Zone Percent '000 acres Less than 1,000 ppm TDS 64 335 1,000 to 3,000 ppm TDS 36 187 TOTAL 100 522 2.233 Groundwrater in most of the area (93 percent) lies at depths greater than ten feet from the surface, but the drainage effects of the tubewells would be required in a few relatively shallow areas close to the source of recharge, i.e. the rivers and canals. Moderate or severe salinity appears to affect only about nine percent of the CCA, and therefore no significant part of the water budget is allocated to I/ IACA Comprehensive Report, Volume 14, Annexure 15D. ANNEX 4.1 Pagei142 meet reclamation requirements. 'rater table control, provided by project tubewells in the shallow groundwater area, and full delta cropping should eliminate the existing salinity and prevent its future recurrence. The project area has a lower standard of agriculture than that existing in the Bari Doab. This is mainly due to the fact thatt-the Bahawal canal receives unreliable.flows from the Sutlej River which results in the cultivation of crops that are drought-tolerant and a3low cropping intensity. 2.234h Land. t,eiure data are only available for the Bahawalpur Dibtrict, por,ion of the project area. The distribution of farm sizeq and land tenure in this.district is as follows: Farm Size and Land Tenure Situation Percent Percent of' Farm Size of Farms Farm-.Area, Less than 5 acres 47 10 5 to 25 acres 44 56 Over,25 acres 9 314 Owner operated, 45 5o- Owner cum tenant 14 _ Tenant operated 41 50Q The average farm size in the District is abp#;nine acres, and,thu-s somewhat,smaller,than that for the Punjab as-a,whole., 2.235- The project would increase the water zvailability in the project area from about.1.08 MAF presently to 2.35 MAF>at full:develop-- ment. Of the increase of 1.27 MAF, about 0.22 MAF would.be-from additional surface supplies, and 1.05 MAF would.,be additional grouq4d- water provided,by public tubewells above existing pri.vate groundwater- exploitation. This increase in,irrigation supplies would be,sufficient to.support a growth in,cropped acreage from 496,400 acres (95;percent intensity 2' at start of,the project) to 762,000 in 1985 (146 percent in .Pn,sity)_.: 2.236 In contrast, howeve,r.,, to,most of the other.proj,ect proposals, IACA anticipates that,the Bahawal-Qaim project area would neatabsrb'- additional surface, wa,ter.during,the storage release period of October-, to May once the public,tubewells,were installed. In fact, there would be, a .slight,decrease in surface.wat,r deliveries during,the storage reeabe,`period once groundwater supplies from tubewells became avail-- abl,e.,,- flcause so much of the project area has a deep groundwat,er 1/ Perennials counted twice. ' ANNEX 4.1 - ~~'cg, ~Page :g73 table, the availability of Tarbela storage releases in the system after 1974 would enable perennial surface supplies to be introduced in place of the non-perennial supplies currently received by most of the area. These would be greater than the surface water supplies projected under the public tubewell project, and thus implies that the installation of public tubewells would result in a net saving of surface water in this area. (b) Physical lWorks 2.237 The physical works of the project would consist of the instal- lation of some 924 public tubewells and appurtenant works. Of these, 618 wells of four cusec capacity would be in the fresh groundwater zone of the project area (64 percent of the CCA, or 335,000 acres), and 306 wells of 2.7 cusec capacity in the zone underlain by groundwater (76,000 acres CCA) requiring mixing with surface water. 2.238 Necessary channels to watercourses and stilling and mixing chambers would have to be constructed for each of the tubewells. Because the project envisages the conveyance of quantities of water much larger than presently supplied through tubewells and canal out- lets to the field, it would be necessary to improve existing water- courses. Therefore, the Bank Group considers it prudent to make provision for such improvements, and has added a token amount of Rs. 10 per acre CCA to its revised cost estimates. (c) Construction Schedule 2.239 The installation of the public tubewells would extend over four years in accordance with the following schedule: Preliminary Construction Schedule 1971/72 1972/73 1973/74 1974/75 --------------(No. of Wells)--------------- Drilling of Wells and Construction of Structures 210 360 354 Electrification - 210 360 354 Wells in Operatim6n- 210 570 924 ANNEX 4.1 Page 144 Construction of the tubewell part of the project would thus be completed at the end of the Fourth Plan period. IACA's Report is a first attempt to formulate this project and examine its technical, agricultural, financial, and economic implications. As such, it is in many respects based on general information applicable to larger areas, rather than on specific investigations at the project site. IACA proposed that a detailed application of their proposals be examined prior to 1970. All the relevant information should be collected and processed by that time, and the decision to install public tubewells should then be made. (d) Cost Estimates and Expenditure Schedule 2.240 The total cost of the project is estimated by the Bank Group at about Rs. 162.6 million (US$ 34.2 million equivalent). This would include the following: Summary Cost Estimates Local Foreign Currency Exchange Total ----(Rs. mill)--------- Project Preparation 3.1 2.8 5.9 Tubewells 20.5 29.0 49.5 Electrification 13.0 20.4 33.4 Other Civil W4orks 12.4 2.0 l1.h Subtotal 49.0 54.2 103.2 Overheads 16.5 5.1 21.6 Contingencies 12.5 11.3 23.8 Subtotal 29.0 16.4 45. Interest during construction 14.0 - 14.0 TOTAL 92.0 70.6 162.6 Details of the cost estimates are given in Appendix 1, page 1. The foreign exchange component of the project would be about 43 percent of total project costs, or about US$ 15 million equivalent. AIINEX 4 .1 Page 145 2.241 Expenditures would be spread over approximately four years in accordance with the following schedule: 1/ Summary Expenditure Schedule - Year: 1 2 3 4 -------(Rs. mill)-------- Tubewells and Associated Works 27.7 38.7 38.9 2.1 Electrification - 12.6 21.5 21.1 TOTAL 27.7 51.3 60.4 23.2 1/ For details see Appendix 1, page 2. (e) Recovery of Project Expenditures 2.242 On the basis of the above cost estimates, a preliminary assessment has been made of the charges required to recover total project costs over the lifetime of the project. Including operation and maintenance expenditures, the average annual rate of recovery would have to be about Rs. 21.3 million as shown below: Annual Costs for Operation, Main- tenance and Recovery of Capital Annual Costs (Rs. mill) Capital costs - (annuity at 6% over 20 years for Rs. 107.4 million) 9.4 Annual staff and maintenance costs 2/ (including repairs, electricity and recovery of power investment) 11.9 TOTAL 21.3 1/ Based on recovery of project investment including project prepara- tion and interest during construction but without costs of electri- fication. 2/ Average annual costs based on weighted average over lifetime of the project. ANNEX 4.1 Page 146 2.243 This would be equivalent to about Rs. 41 per acre CCA, or Rs. 28 per cropped acre at the stage of full development. Existing water rates average about Rs. 7 per cropped acre. Future water rates to recover total project costs, including O&M, plus existing charges for surface supplies would have to be in the neighborhood of Rs. 35 per cropped acre, or about Rs. 51 per acre CCA. This would be about 13 percent of the expected net value of production in 1985. (f) The Irrigation Regime 2.244 The mean quantities of surface and groundwater which would be made available with the project, and the comparison with the irriga- tion water availability likely to prevail if no further private tubewells are installed after the beginning of the project (in 1971), are sum- marized for 1975 and 1985 in the water budget attached as Appendix 2. Groundwater exploitation by existing private tubewells would be expected to discontinue following implementation of the project. The total water availability at watercourse head under the public project would be'about 2.35 MAF at the stage of full development. Of this, 1.22 MAF would be provided by public tubewells and 1.13 MAF by canal supplies. Some 0.16 MAF of groundwater would substitute for previous private exploitation, i.e. the net increase of groundwater availability due to the project would be about 1.06 MAF. Total surface water availability at watercourse head would increase from 0.91 MAF at present to 1.13 MAF by 1985, or a gain of 0.22 MAF. 2.245 Although the groundwater level over much of the project area is deeper than ten feet from the surface, some reduction in the ground- water level would be required in areas close to the source of recharge. This would involve the permanent extraction of about 0.03 MAF of usable groundwater from the aquifer in the small area with the high water table, and during this operation the net supplies of surface water would be reduced relative to historic deliveries in order to preclude recharge at that time. This accounts for the decrease in surface water use shown in the water budget for 1975 as compared to the present use (1965). After the groundwater table has been reduced to a satisfactory average level, surface water supplies would be increased. Because the water table is generally deeper than ten feet, IACA anticipates that even without a public tubewell project there could be a substantial increase in the use of surface water supplies in the future. Assuming that more surface water is available once Tarbela storage is intro- duced after 1974, surface water use in the project area could increase from the current 0.91 MAF (1965) to 1.54 MAF by 1985, or a gain of 0.63 MAF. This would represent a greater use of surface water than would take place if the public tubewell project is installed, and introduction of this larger volume of surface water into the project area would diminish the need for irrigation supplies from private ANNEX 4.1 Page 147 tubewells. A public tubewell project would therefore result in surface water savings because the availability of reliable supplies from ground- water would make it unnecessary to rely on the surface water which would otherwise be available and could be absorbed in the project area. 2.246 Some of the area is underlain by groundwater which requires mixing with good quality surface water, and IACA anticipates that some operational problems may arise in the Ahmadpur Branch because the mixing requirements during the rabi season could be smaller than the minimum needed to operate the canal. Alternatives suggested include: (a) in- creased tubewell capacity in the fresh groundwater area, which is then linked to the mixing zone to provide water for mixing, or (b) increased rabi season canal deliveries for mixing, offset by decreased kharif season deliveries to reduce the danger of waterlogging. Both of these would involve additional cost, but IACA did not have enough data to determine the extent of the problem and therefore could not estimate the amount of additional cost which would be incurred. The project report recommends thatthis operational aspect be studied more exten- sively in the project preparation phase. 2.247 For the project area as a whole, the water availability under the public program would be enhanced from 2.1 acre-feet per acre CCA in 1965 to 4.5 acre-feet per acre CCA in 1985. This would enable cropping intensity to increase from 85 percent in 1965 to 146 percent in 1985 at full delta (i.e., as a weighted average for the project area). 2.248 As an alternative to the public tubewell project, further irrigation development could take place through the continued in- stallation of private tubewells. The following table shows water availability and potential intensity growth as projected for these alternative forms of development. lWater Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 1,850 ./ 924 2,550 -1 924 Surface supplies (MAF) 1.36 0.82 1.54 1.13 Annual pumpage (MAF) 0.42 0.90 0.57 1.22 Total annual watercourse delivery (N4AF) 1.78 1.72 2.13 2.35 Cropping intensity (percent) 104 113 125 146 Acres cropped ('000) 545 590 656 762 Acre-feet/acres cropped 3.3 _/ 2.7 3.2 3.1 1/ Private tubewells of one cusec capacity. 2/ The figure here is relatively high and results from a cropping pattern which is more kharif oriented. ANNEX 4.1 Page 148 The table indicates that private groundwater development would not be capable of pumping more than 46 percent of the annual recharge. The water table is, however, more than ten feet below ground level in about 93 percent of the project area. The area therefore seems generally suited to the introduction of additional water supplies when they become available. The combined water availability under the private alterna- tive would support an intensity of 125 percent at full delta, or only about 106,000 cropped acres less than the public program. (g) Agricultural Development 2.249 The cropping intensity for the project area in 1965 was estimated to be around 85 percent. Present levels of agricultural development and productivity are low due to unreliable water supplies and other factors cited earlier. Poor standards of farming also con- strain production relative to what could be achieved in the area. 2.250 The main kharif crops are jovwar, bajra, and fodder, followed by cotton. Cotton acreage is relatively small considering that the area is situated in the cotton belt of the Punjab. Wheat is the major rabi crop. The proportion of cropped acreage devoted to the perennial crops of sugarcane, fruit, and vegetables is around 11 percent which is about the average for West Pakistan as a whole. IACA estimates indi- cate that the 1965 value of crop production was to the order of Rs. 59 million and livestock production Rs. 22 million, giving a total Gross Production Value (GPV) of Rs. 81 million. This would be an average of about Rs. 155 per acre CCA. 2.251 During the pre-project period agricultural development within the project would be expected to continue at the present trend. IACA estimates that the number of private tubewells would increase from about h45 in 1965 to about 1,200 in 1971. With the start of the pro- ject, further private tubewell development would stop and public tubewells wculd suaccessively substitute for existing private.wells. The increased water availability under public tubewell development would support the following intensity growth: Growth of Cropped Acreage Under Public Development - Year Intensity Percent Cropped Acreage ('000) 1965 85 442 1969 (start of project) 95 496 1975 113 590 1985 146 762 1990 146 762 1/ Perennials counted twice. ANNEX 4.i Page 149 As stated earlier, continued private groundwater development would support a cropping intensity of about 125 percent at full delta. 2.252 Assessments have been made by the Bank Group of the growth of agricultural production in the project area "with" public ground- water development as well as "without" additional groundwater develop- ment. In accordance with the cropping intensity, cropping patterns and yield growth projected for the respective cases (see Appendices 3 and h for details) the expected incremental GPV resulting from the project would be about as follows: Growth of GPV "WA1ith" and "Without" Groundwater Development "Without" Incremental Additional Groundwater "With" the Project GPV Year Crops Livestock Total Crops Livestock Total Total ______________________ '(Rs. million)- ------_____________ 1965 59 22 81 59 22 81 - 1975 99 50 149 115 52 167 18 1985 191 89 280 239 107 3h6 66 Over the life of the project the GPV would more than quadruple, and the level production would be 23 percent higher than in the "without" case. The GPV per acre CCA would increase from Rs. 155 in 1965 to Rs. 662 in 1985, as compared to Rs. 536 per acre CCA in the "without" case. 2.253 As set forth in the Bank Group's Report, Volume II, Chapter VI, input levels are expected to rise substantially throughout W4est Pakistan, and appreciable increases in on-farm expenditures would thus be expected in both the "with" and "without" cases. To achieve the above projected growth of production, great efforts would have to be made to make available the quantities of non-water inputs required to sustain such growth. Allowing for increased on-farm expenditure and associated current project costs as well as adding an allocation of benefits resulting from surface water savings, the incremental Net Production Value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, pages 1 and 2. ANNEX 4.1l Page 150 Incremental Net Benefits Attributable to Public Groundwater Development 1/ 1975 1985 1990 -(Rs. mill)---------- NPV "With" 113 221 274 NPV "Wlithout" 101 169 222 Incremental NPV 12 52 52 Savings allowance for surface water + 25 + 33 + 33 Allowance for infrastructure - 1 - 3 - 3 and services Increase in O&M expenditure - 4 - 7 - 7 Total associated costs + 20 + 23 + 23 Incremental net benefits attributable to the project 32 75 75 1/ For details see Appendices 4 and 5, pages l and 2. 2.254 The substitution of groundwater would lead to savings in the use of surface water for the public development program relative to both the private tubewell alternative and the "without" additional tubewell condition. This is based on the assumption that surface water which would be absorbed into the area in the "without" condi- tion could, under the groundwater development program, be made avail- able for use elsewhere in the system. 2.255 The incremental benefits attributable to the public tube- well project are much higher than the other alternatives. This is largely because of the benefits attributed to savings in surface water which have been credited to the public tubewell project. How- ever, if the saving in surface absorption is not taken into considera- tion, then the difference in additional production obtained under the public tubewell program becomes very insignificant relative to the private alternative. (See Appendix 6, pages 2 and 3). (h) Farmer Incentives 2.256 The benefits obtainable under the project should provide considerable incentives for farmers. Based on ten acres CCA, farm incomes would be expected, on the average, to improve as follows: Average Changes in Farm Income Per 10 Acres of CCA Within the ProJect Area under Alternative Forms of Development 1975 1985 1992 Without Private Public Without Private Public Without Private Public Cropping intensity (%) 96 10429 113 112 1252/ 146 112 1252/ 146 GPV (Bs.) 2,849 3,065- 3,191 .366 6 626 6,659 7318 8,201 On-farm expenditure 912 9773/ 1,021 2,123 2,050/ 2'38 -2,397 262/ 2,952 Water charges 1/ 183 259 487 183 340 510 183 340 510 Total current expenditure 109,513024/29 2,30 2,3 9 F4/ To2,5 Farm income J73E 1 TJ63 3,299 3797 X7,353 1,,739 1/ Water charges for the "Without" case consists of: (i) Surface Water charges at Rs. 7/acres cropped Rs. 67 (ii) O&M of Tubewells existing in 1969 Rs. 86 (iii) Amortization at 6% over 10 years of existing wells Rs. 30 Total: Rs. 183 Water charges for full Private Tubewell Development consists of: (i) Surface water charges at Rs. 7/acre cropped Rs. 88 (ii) O&M for Private Tubewells Rs. 187 (iii) Amortization at 6% over 10 years of private wells Rs. 65 Total: Rs. 340 Water charges for full Public Tubewell Development (1985) consists of: (i) Surface water charges at Rs. 7/acre cropped Rs. 102 (ii) O&M and Amortization at 6% over 20 years Rs. W8 Total: Rs. 510 2/ The GPV for the private tubewell alternative excludes benefits accruing from savings of Surface Water. If included, then the figures are Rs. 3,773, Rs. 6,666 and Rs.B,314 for the three years under reference. 3/ Excludes benefits accruing from savings of surface water. If included, then the on-farm expenditure for the three reference years are Rs. 1,206, Rs. 2,395 and Rs. 2,989. 4/ Excludes benefits accruing from savings of surface water. If included, these figures would be Rs. 1,531, Rs. 2,735 and Rs. 3,329 for the reference years. ANNEX 4.1 Page 152T The above table indicates that farm income can be expected to develop along approximately similar lines for both the public and the private tubewell alternative of groundwater development with private develop- ment yielding slightly higher farm incomes in earlier years. In 1985 and thereafter, farm income under the public program would be higher. The results shown in the above table are only an average for the pro- ject area. Individual farmers with private tubewells at their disposal would be expected to achieve and exceed the average farm incomes pro- jected under public development. In absolute terms, under the public project farm incomes would grow from Rs. 1,683 to Rs. 4,739 per farm of ten acres CCA. This should be sufficiently attractive to enlist farmers' active cooperation under the project. (i) Project Evaluation 2.257 The Bank Group's evaluation of the project is, as discussed in Chapter II A, based on a somewhat different approach than that of IACA, although a similar conclusion has been reached. The evaluation results of the Bank Group and IACA are not strictly comparable because IACA has related total incremental production to incremental costs only. The Bank Group has based its evaluation on attributable in- crements (after crediting the project with benefits arising from a saving in surface water), and total project costs. On the basis of the modifications made to the IACA evaluation procedures discussed in Chapter II A above, the Bank Group has assessed the likely results of the project as follows: Results of Project Evaluation - Public Project Incremental NPV (present worth at 8%) - Rs. 430 million Benefit/Cost Ratio (at 8%) 3.7 to 1 Rate of Return: (a) exclusive of potential private savings 26% (b) inclusive of potential private savings 34% 1/ Including surface water savings estimated at Rs. 204 million. This compares to IACA's assessment / of incremental NPV (before credit- ing the project with benefits from surface water) at Rs. 519 million, and a rate of return on incremental costs over the "without" case of 33 percent. The calculations pertaining to the Bank Group's evaluation are given in Appendix 5. 1/ For details of IACA's evaluation see IACA Comprehensive Report, Volume 14, Annexure 15D, Chapter IV (public project) and Appendix 1 (private alternative). ANNEX 4.1 Page 153 2.258 The private alternative has also been evaluated by the Bank Group in accordance with the procedures discussed in Chapter II A above. On the basis of this evaluation, continued private development would give a rate of return of 74 percent (because of considerably lower investment requirements). The relatively higher Bank Group estimates of incremental NPV, or benefits estimated for the public project, reflects the crediting of surface water saving to the project. In terms of overall production (excluding surface water savings), private tubewell develop- ment giving an incremental NPV (present worth at 8%) of Rs. 117 million is a practical alternative. (j) Conclusion 2.259 The Bank Group's review and project evaluation for the public tubewell project and the alternative of continued private tubewell development is based on the revised assumptions mentioned earlier in Part II A. Despite-the differences in assumptions, IACA and the Bank Group have reached similar conclusions with respect to the economic evaluation of 'The'groundwater-developmernt project. The rates of return resulting from both sets of estimates (33 percent and 34 percent re- spectively) indicate that the public tubewell project would be an economically justified investment of resources. However, the Bank Group's examination of the alternative'of continued private tubewell development'indicates that the,NPV would increase'rapidly (owing to the introd6ction of''substantial additional surface water since water- logging, is not a constraint on development in the project area) whereas,costs would not rise as sharply as under the public project. This'resul't,s in a higher rate of return'to the economy of 74 percent (B,ank Group) relative to the 34 percent return to the economy in the "with" Kkublic tubewell project case (where the savings in surface wa,r are t&ken as a benefit attributable to the project).' 2.2?60 The.project would be completed under the proposed schedule ar--a'tiime where the overall availability of surface water due to the avaii,abilities'tfrom river flows and Tarbela would not bea. definite co3nstraint for the development of other' areas. The s'ubstitution effects.,of the public project would thus be ove'rstated in accordance with the timing proposed. The Banfk Group ther6fore concludes'that this' project should be given a "deferred" priority in tYe,`contpx't' of a Basin-wide,development program. ANNEX 4.1 APPENDIX 1 INDUS SPECIAL STUDY Page 1 Public Tubewell Project - Bahawal Qaim Revised Cost Estimate and Financial Requirements Local Currency Foreign Exchange 1/ Total (Rs. mill) (Rs. mill) (US$ Equiv-.) (Rs. mill) (US$ Eauiv.) - PROJECT PREPARATION / .1 2.8 0.59 5.9 1.24 TUBEWELL PROJECT Tubewell 20.5 29.0 6.11 49.5 10.42 Appurtenant Structures 7.2 2.0 0.42 9.2 l.9gl Watercourse Improv§ments 3/ .2 - - 2 1.09 Duties and Taxes 4.7 - - 4.7 0.99 Engineering and Admin. 5/ 3.8 3.1 0.65 6.9 1.45 Subtotal 41.4 34.1 7.18 75.5 15.89 Contingencies 68.3 6.8 1.43 15.1 3.18 ,TOTAL TUBEWELL PROJECT 49.7 40.9 8.61 90.6 19.07 ELECTRIFICATION Transmission 2.3 3.7 0.78 6.0 1.26 Distribution 4 10.7 16.7 3.51 27.4 5.77 Duties and Taxes - 5 6.1 - - 6.1 1.28 Engineering and Admin. - 1.9 2.0 0.042 3.9 0.82 Subtotal 21.0 22.4 4.71 43.4 9.14 Contingencies 4.2 4.5 0.95 8.7 1.83 TOTAL ELECTRIFICATION 25.2 26.9 5.66 52.1 10.97 INTEREST DURING CONSTRUCTION Tubewell Project 7/ 10.9 - - 10.9 2.29 Electrification 8/ 3.1 _ - 3.1 o.65 Subtotal 14.0 - - 14.0 2.94 TOTAL FINANCIAL REQUIREMENTS 92.0 70.6 14.86 162.6 34.23 1/ Rate of exchange: US$ 1.00 = Rs. 4.75. 2/ Estimated at 5 percent of direct costs before contingencies. 7/ Estimated at Rs. 10 per acre of CCA. T/ Estimated at 15 percent of foreign exchange component of direct costs before engineering and admin{istration. 5/ Estimated at 10 percent of-=direct costs after duties and taxes. 6/ Estimated at 20 percent of direct costs after duties and taxes and engineering and administration. 7/ Estimated at 6 percent per annum for two-year period for each phase of tubewell construction. 8/ Estimated at 6 percent per annum for one-year period. APPENDIX 1 INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Estimated Expenditure Schedule 1971/72 1972/73 1973/74 1974/75 Total ---------------- (Rs.mill)---------- Project Preparation -/ 5.9 - - - 5.9 Tubewell, Structures, and Watercourses 14.5 24.9 24.5 - 63.9 Duties and Taxes 1.1 1.8 1.8 - 4.7 Engineering 1.6 2.7 2.6 - 6.9 Contingencies 3.4 5.9 5.8 - 15.1 Subtotal 20.6 35.3 34.7 - 90.6 Interest during Construction 1.2 3.4 4t.2 2.1 10.9 Total Tubewell Project 21.8 38.7 38.9 2.1 101.5 Electrification - 7.6 13.0 12.8 33.4 Duties and Taxes - 1.4 2.4 2.3 6.1 Engineering - 0.9 1.5 1.5 3.9 Contingencies - 2.0 3.4 3.3 8.7 Subtotal - 11.9 20.3 19.9 52.1 Interest during Construction - 0.7 1.2 1.2 3.1 Total Electrification - 12.6 21.5 21.1 55.2 Total Financial Requirements 27.7 51.3 60.4 23.2 162.6 l/ Ineurred prior to start of construction. I INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Comparative Summary Water Budget 'With" the Project and "Without" Additional Tubewells Net Increase 1965 1975 1985 "With" the Project "With" "Without" "With" "tithout" the Additional the Additional Surface Ground- Existing Project Tubewells Project Tubewells Water water Total Surface Supplies: Total 0.91 0.82 1.35 1.13 1.54 -0.41 - -0.41 Thereof during October to N4ay: 1/ 0.45 0.30 0.73 0.42 0.85 -0.43 - -0.43 Groundwater Supplies: 0.17 0.90 0.11 1.22 3/ 0.16 2/ - 1.o6 1.06 Total Supplies: 1.08 1.72 1.46 2.35 1.70 -0.41 1.06 0.65 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 1,200 private tubewells in operation by 1971 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.28 MAF) as well °i3 as those of further increase in private groundwater extraction. 14" I PUBLIC TUBEWELL PROJECT: BAHAWAL QAIM WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL > < WATER COURSE->+-< FIELD X \TRANSPIRATION EVAPORATION I EVAPORATION i EVAPORATION 1.57 1 0 10 0 0 C 0 LG J ;RAIN 1' I 009~~~~~~~~~~~~~~C LU 1.55 1.13 236 2.11 1.48 RIVER RECHARGE RE- CHARGE I ORECHARGE IRECHARGE I N PUMPING 3~~~~~~~~~~~~~~~~~~~~~~~~~~~R IBR -32 04 123~~~~1 GROUND WATER RESERVOIR oVZ DRAINAGE PUM PING (R) IBRD -3321 mC INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Yield Projections 'TWith" and "Without"l the Project (mounds per acre) Present IACA Projections Bank Group Projections 1965 1971 1975 1985 2000 197. 1975 1985 2000 Kharif: Coarse rice 14.0 15.5 n.a. n.a. n.a. 15.8 n.a. n.a. n.a. Cotton 7.5 9.0 11.5 17.0 22.0 8.4 9.5 14.1 22.0 Maize 10.0 13.0 15.0 26.0 38.0 11.3 12.7 18.7 38.0 Fodder 220.0 255.0 290.0 390.0 500.0 247.8 278.8 412.7 500.0 Pulses and groundnuts Y1 5.0 6.2 11.0 20.0 31.0 / 5.6 10.24 18.2 31.0 Jowar/bajia 6.o 7.8 9.0 n.a. n.a. 6.8 7.6 n.a. n.a. Rabi: Wheat 12.0 15.6 19.5 27.5 34.0 13.5 16.1 25.1 34.0 Fodder 450.0 500.0 600.0 760.0 900.0 506.8 570.2 844.o 900.0 Oilseeds 6.5 7.7 8.5 12.5 17.0 7.3 8.2 12.2 17.0 Gram 8.5 9.4 10.0 14.0 18.0 9.6 10.8 16.0 18.0 Maize n.a. n.a. n.a. 26.0 38.0 n.a. n.a. 18.7 38.0 Pulses 5.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Perennials: Sugarcane (gur) 32.0 42.0 50.0 65.o 80.0 36.0 40.6 60.0 80.0 Fruit 80.0 86.0 60.0 130.0 170.0 86.0 96.8 130.0 170.0 Vegetables 140.0 158.0 170.0 200.0 250.0 158.0 170.0 200.0 250.0 1/ Pulses shown for Kharif include groundnuts at the following ratios: 1965 1971 1975 1985 2000 Pulses to groundnuts ratio: 1: T 2: Ti 1 Groundnut yields: - - 18.3 29.6 40.0 2/ This yields for "with" case, 27.0 "without" case. INIIUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim RevLsed Projection of Production 'With" the Project 1975 1985 1992 Cropped Yields Production GPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mill) Kharif: Cotton 94,000 9.5 893.0 26.790 172,300 14.1 2,429.4 72.882 188,500 17.3 3,261.0 97.830 Maize 10,400 12.7 132.1 2.444 31,300 18.7 585.3 10.828 31,300 26.0 813.8 15.055 Fodder 73,100 278.8 20,380.3 - 83,500 412.7 34,460.4 - 87,100 451.7 39,343.1 - Pulses and Groundnuts 20,900 10.3 217.1 5.071 20,900 18.1 379.3 9.091 20,900 2h.2 499.5 12.110 Jowar/Bajia 26,100 7.6 198.4 2.182 - - - - - - -- Sub-total: 221,500 36.487 308,o0o 92.801 327,800 124.995 Rabi: Wheat 219,200 16.1 3,529.1 45.878 208,800 25.1 5,240.9 68.132 182,000 29.0 5,278.0 68.614 Fodder 52,200 570.2 29,764.4 - 62,600 844.0 52,834.4 - 66,200 867.9 57,455.0 - Oilseeds 26,100 8.2 214.0 5.029 31,300 12.2 381.9 8.975 31,300 14.2 414.5 10.4116 Gram 15,700 10.8 169.6 2.417 15,700 16.0 251.2 3.580 15,700 16.9 265.3 3.780 Maize - - - - 10,400 18.7 194.5 3.598 12,600 26.0 327.6 6.061 Green Manure - - - - 41,800 - - - 4- -- Sub-total: 313,200 53.324 370,600 84.285 350,800 88.901 Perennial: Sugarcane (gur) 15,700 40.6 637.4 11.473 15,700 60.0 942.0 16.956 15,700 68.4 1,073.9 19.330 Fruit 7,800 96.8 755.0 8.305 15,700 130.0 2,041.0 22.451 15,700 147.3 2,312.6 25.439 Vegetables 2,600 170.0 442.0 4.862 10,400 200.0 2,080.0 22.880 10,400 222.0 2,308.8 25.397 Sub-total: 26,100 24.640 41,800 62.287 41,800 70.166 GPV of Crops ll.451 239.373 284.062 Animal Husbandry Y/ 52.137 106.520 14h.019 Total GPV 166.588 345.893 428.081 On-Farm Costs 2/ 53.308 124.521 154.109 Total NPV 113.280 221.372 273.972 V/ Based on IACA projection except for 1975. 7/ 1975 - 32% of total GPV. 1985 - 36% of total GPv. 1992 = 36% of total GPV. HDg =DUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Revised Projection of Production "Without"' the Project 1973 1975 1985 1992 Cropcped 193yiel Producti GPV Cropped Yields Production rol Production GPV Cropped Yields Production GPV Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mill) Acres (mds/acre) ('000 mds) (Rs. mall) Acres (rods/acre) ('000 mds)(Rs. mill) Kharif: Coarse rice 2,600 16.4 42.6 0.400 Cotton 54,800 8.8 482.2 14.466 90,300 9.5 857.8 25.734 1h6,200 1h.1 2,061.h 61.842 146,200 17.3 2,529.3 75.879 Maize 10,400 11.7 121.7 2.251 10,400 12.7 132.1 2.44h 31,300 18.7 585.3 10.828 31 300 26.0 813.8 15.055 Fodder 62,600 257.8 16,138.3 - 62,600 278.8 17,452.9 - 67,900 412.7 28,022.3 - 67,900 451.7 30,670.4 - Pulses and groundnuts 28,700 5.9 169.3 3.555 20,900 10.3 217.1 5.071 20,900 18.1 379.3 9.091 20,900 21.8 h55.6 10.918 Jowar/bajia 5°'°°° 7.0 350.0 3.850 26,1i0 7.6 198.4 2.182 _ - - - - - - - Sub-total: 209,100 24.522 210,300 35.431 266,300 81.761 266,300 101.852 Rabi: Wheat 172,300 14.1 2,429.4 31.582 177,500 16.1 2,857.8 37.151 177,500 25.1 4,455.2 57.918 177,500 29.0 5,147.5 66.918 Fodder 28,200 527.2 14,867.0 - 34,100 570.2 19,W43.8 - 47,000 844.o 39,668.0 - 47,000 867.9 40,791.3 - Oilseeds 20,900 7.6 158.8 3.732 20,900 8.2 171.4 4.028 20,900 12.2 255.0 5.992 20,900 14.2 296.8 6.975 Gram and pulses 15,700 10.0 157.0 2.237 15,700 10.8 169.6 2.417 10,400 16.0 166.4 2.371 10,400 16.9 175.8 2.505 Sub-total: 237,100 37.551 248,200 43.596 255,800 66.281 255,800 76,398 Perennial: Sugarcane 18,800 37.5 705.0 12.690 13,100 40.6 531.9 9.574 15,700 60.0 942.0 16.956 15,700 68.4 1,073.9 19,330 Fruit 4,200 91.2 383.0 4.213 6,300 96.8 609.8 6.708 10,1400 130.0 1,352.0 114.872 10,1400 1117.3 1,531.9 16,851 Vegetables 2.100 163.7 343.8 3.782 2,100 170.0 357.0 3.927 5,200 200.0 1,040.0 11.440 5,200 222.0 1,154.4 12,698 Sub-total: 25,100 20.685 21,500 20.209 31.300 43.268 31.300 48.879 GPV of Crops 82.758 99.236 191.310 227.129- Animal Husbandry Y 45.200 49.500 88.800 120.500 Total GPV 127.958 148.736 280.110 347.629 On-Farm Costs h 40.947 47.596 110.8140 125.146 Total NPV 87.011 101.140 169.270 222.483 1/ Based on IACA Projection. / 1973 - 32% of total GPV. 1975 - 32% of total GOV. 1985 - 36% of total OPV. 1992 - 36% of total GPV. INDUS5 SPECIAL STUDY Public Tubewell Project -- Bahawal Qaim Calculation of Rate of Return CostY/or Incremental NPV OhM and Incremental Benefits R A T E 0 F R E T U R N NPV "With"l NPV "Without" Incremental Additional After Allocation to Infrastructure Power Attributable Potential Including Potential Capital Costs Net Benefits Project Costs Year Project Project NPV Surface Water Surface Water and Services 2/ Costa Increment 3/ Private Savings Private Savings of Project4/ at 26% 3/ at 34% 4/ at 26% 3/ at 34% 4/ - -------------------------------- (Re. million) ------------------------------------- 1971 - - - - - - - - 5.7 5.7 25.4 - 4.3 20.1 19.0 1972 84.9 84.9 - - - - - - 5s7 5.7 33.5 - 3.2 21.0 18.7 1973 93.4 87.0 6.4 - 1.6 8.o 0.3 2.9 4.8 5.7 10.5 32.9 2.4 4.4 16.3 13.8 1974 102.9 93.8 9.1 - 4.0 13.1 0.5 7.8 4.8 5.7 10.5 - 1.9 3.3 - - 1975 113.3 101.1 12.2 -24.8 37.0 1.3 9.2 26.5 5.7 32.2 - 8.2 7.5 - - 1976 126.6 114.6 12.0 -23.5 35.5 1.2 9.5 24.8 5.7 30.5 - 6.1 5.3 - - 1977 137.1 126.2 10.9 -24.0 34.9 1.2 9.8 23.9 5.7 29.6 - 4.6 3.9 - - 1978 146.8 131.4 15.4 -27.7 43.1 1.5 10.0 31.6 5.7 37.3 - 4.9 3.7 - - 1979 156.7 136.3 20.4 -28.4 48.8 1.7 10.3 36.8 5.7 42.5 - 4.5 3.1 - - 1980 167.2 11za.4 25.8 -28.8 54.6 1.9 10.6 42.1 5.7 47.8 - 4.0 2.6 - - 1981 178.0 146.6 31.4 -30.1 61.5 2.2 10.8 48.5 5.7 54.2 - 3.7 2.2 - - 1982 188.6 152.0 36.6 -30.3 66.9 2.3 11.0 53.6 5.7 59.3 - 3.2 1.8 - - 1983 199.6 157.6 42.0 -31.0 73.0 2.6 11.1 59.3 5.7 65.0 - 2.8 1.5 - - 1984 210.6 163.4 47.2 -31.7 78.9 2.8 11.3 64.8 5.7 70.5 - 2.4 1.2 - - 1985 221.4 169.3 52.1 -32.9 85.0 3.0 11.5 70.5 5.7 76.2 - 2.1 1.0 - - 1986 228.3 176.1 52.2 -32.9 85.1 3.0 11.6 70.5 5.7 76.2 - 1.7 0.7 - - 1987 235.4 183.1 52.3 -33.0 85.3 3.0 n1.6 70.7 5.7 76.4 - 1.3 0.5 - - 1988 242.8 190.4 52.4 -33.0 85.4 3.0 11.7 70.7 5.7 76.4 - 1.0 0.4 - - 1989 250.4 198.1 52.3 -33.0 85.3 3.0 11.7 70.6 5.7 76.3 - o.8 0.3 - - 1990 258.2 206.0 52.2 -32.9 85.1 3.0 11.8 70.3 5.7 76.0 - 0.6 0.3 - - 1991 266.3 214.2 52.1 -32.8 84.9 3.0 11.8 70.1 5.7 75.8 - 0.5 0.2 - - 1992 274.0 222.5 51.5 -32.5 84.0 2.9 11.9 69.2 5.7 74.9 - 0.4 0.1 -7_ Sate of Return 26% 91.8 57.2 51.5 57.4 51.5 Rate of Return _/ - 34% 1/ Savings of surface water in "With" case over "Odithout" case credited at an average value per acre foot of total incremental water availability. Incremental Value/Acre Foot Incremental Water of Incremental NPV Availability Availability (Rs. Mill.) (MAF) (R.) 1975 12.2 0.26 46.9 1980 25.8 0.42 61.4 r- 1985 52.1 0.65 80.2 1990 52.2 0.65 80.3 2/ Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includes: 1.85% of attributable increment for roads. 1.65% of attributable increment for supporting services. Charged on incremental NPV after allocation to surface water only. 3/ Excluding Potential Private Savings. 4/ Including Potential Private Savings. APPENDIX 5 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Benefit: Cost Ratio Incremental NPV Project Costs In- Discounted at 8% After Allocation cluding 0&iM, Services, Year to Surface Water and Infrastructure Benefits Costs 1/ 2/ 1/ 2T 1971 _ 25.4 19.7 - 23.5 18.2 1972 - 33.5 27.8 - 28.7 23.8 1973 8.0 36.1 30.4 6.4 28.7 24.1 1974 13.1 8.3 2.6 9.6 6.1 1.9 1975 37.0 10.5 4.8 25.2 7.2 3.3 1976 35.5 10.7 5.0 22.4 6.7 3.2 1977 34.9 11.0 5.3 20.3 6.4 3.1 1978 43.1 11.5 5.8 23.3 6.2 3.1 1979 48.8 12.0 6.3 24.4 6.0 3.2 1980 54.6 12.5 6.8 25.3 5.8 3.] 1981 61.5 13.0 7.3 26.4 5.6 3.1 1982 66.9 13.3 7.6 26.6 5.3 3.0 1983 73.0 13.7 8.0 26.9 5.0 2.9 1984 78.9 14.1 8.4 26.8 4.3 2.9 1985 85.0 14.5 8.8 26.8 4.6 2.8 1986 85.1 14.6 8.9 24.8 4.3 2.6 1987 85.3 14.6 8.9 23.0 3.9 2.h 1988 85.4 14.7 9.0 21.4 3.7 2.2 1989 85.3 14.7 9.0 19.8 3.4 2.1 1990 85.1 14.8 9.1 18.3 3.2 2.0 1991 84.9 14.8 9.1 16.9 2.9 1.8 1992 84.0 14.8 9.1 15.5 2.7 1.7 h30.1 174.2 116.5 B/C Ratio 1/ at 8% = 2.5 B/C Ratio 2/ at 8% = 3.7 - 1/ Before deducting Potential Private Savings. 2/ After deducting Potential Private Savings. 7/ If potential private savings are added to the benefit stream rather than netted out from the cost stream, the Benefit Cost Ratio would be 2.8, as shown below: Present Worth of Benefits: 430.1 Present Worth of Savings: 57.0 Total 487.1 B/C Ratio: 487.1 = 2.8 l77-.2 INDUS SPECIAL STUDY Pablic Tubewell Project - Bahawal Qaim Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Replacements of Incremental Incremental Wells in Wells During Additional Number of Wells Water Availability 2/ Year Operation Project Period Wells in Operation (NAF) 1965 445 1966 585 1967 725 1968 865 1969 1,005 1970 1,150 1971 1,290 140 140 0.03 1972 1,1430 140 280 0.06 1973 1,570 140 420 0.09 1974 1,710 140 560 0.13 1975 1,850 1140 700 0.16 1976 1,990 140 840 0.19 1977 2,130 140 980 0.22 1978 2,270 140 1,120 0.25 1979 2,1410 140 1,260 0.28 1980 2,550 1140 1,1400 0.32 1981 2J550 140 1J,400 0.32 1982 2,550 140 1J,400 0.32 1983 2,550 140 1J,400 0.32 1984 2,550 140 1,1400 0.32 1985 2,550 140 1J400 0.32 1986 2,500 140 1,400 0.32 1987 2,500 140 1J,400 0.32 1988 2,500 1140 1J400 0.32 1989 2,500 140 1*400 0.32 1990 2,500 140 1,1400 0.32 1991 2,500 10 1,1400 0,32 1992 2,500 140 1,1400 0.32 1/ This rate of installation accepts the ceiling for coverage with private tubewells stated in the IACA project report. / Assumed rate of average utilization: 30% Each well would pump for about 2,630 hours and produce about 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Estimte of Incremental NPV of Private Tubewell Alternative Acreage Cropped Expansion of Acreage Cropped Acreage Cropped Overall Intensity NPV of Private NPV Incremental Receiving Add'\. Acreage Cropped Under "With" Under "Without" Alternative "Without" NPV Year Water (1000) ('000) Condition ('000) Condition (tOOO) Acres % (Rs. mill.) (Rs. mill.) (Rs. mill.) 1971 14.0 7.9 21.9 482.4 504.3 96 84.9 84.9 - 1972 28.0 15.9 43.9 468.4 512.3 98 87.6 84.9 2.7 1973 42.0 23.8 65.8 456.1 521.9 99 91.4 87.0 4.0 1974 56.0 35.2 91.2 443.8 535.0 102 100.2 93.8 6.4 1975 70.0 43.1 113.1 431.5 544.6 104 108.7 101.1 7.6 1976 84.0 43.3 127.3 464.1 591.4 I13 122.5 114.6 7.9 1977 98.0 48.8 146.8 484.0 630.8 120 135.5 126.2 9.3 1978 112.0 55.4 167.4 472.7 640.1 122 142.7 131.4 11.3 1979 126.0 61.9 187.9 458.7 646.6 123 149.5 136.3 13.2 1980 140.0 71.6 211.6 444.7 656.3 125 157.5 141.4 16.1 1981 140.0 71.6 211.6 444.7 656.3 125 163.7 146.6 17.1 1982 140.0 71.6 211.6 444.7 656.3 125 170.0 152.0 18.0 1983 140.0 71.6 211.6 444.7 656.3 125 176.6 157.6 19.0 1984 140.0 71.6 211.6 444.7 656.3 125 183.4 163.4 20.0 1985 140.0 71.6 211.6 444.7 656.3 125 190.3 169.3 21.0 1986 140.0 71.6 211.6 444.7 656.3 125 197.3 176.1 21.2 1987 140.0 71.6 211.6 444.7 656.3 125 204.7 183.1 21.6 1988 140.0 71.6 211.6 444.7 656.3 125 212.2 190.4 21.8 1989 140.0 71.6 211.6 444.7 656.3 125 220.1 198.1 22.0 1990 140.0 71.6 211.6 444.7 656.3 125 228.4 206.0 22.4 1991 140.0 71.6 211.6 444.7 656.3 125 236.8 214.2 22.6 1992 140.0 71.6 211.6 - 444.7 656.3 125 245.2 222.5 22.7 1/ Based on existing water depth of 2.45 acre feet on historical intensity. Assumes each incremental well will increase irrigation to full delta on 100 acre. * INDUS SPECIAL STUDY Public Tubewell Project - Bahawal Qaim Rate of Return of Private Tubewell Alternative Benefit/Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capital Total Benefits Costs Benefits Cost at Year NFV and Services 1/ Costs 2/ Costs 2/ Costs at 8% at 8% at 74% 74% --------------Rs. mifll------------- 1971 - - 0.5 1.4 1.9 - 1.8 - 1.1 1972 2.7 0.1 1.1 1.4 2.6 2.3 2.2 0.9 0.9 1973 4.0 0.1 1.6 1.4 3.1 3.2 2.5 0.8 o.6 1974 6.4 0.1 2.2 1.4 3.7 4.7 2.7 0.7 0.4 1975 7.6 0.2 2.7 1.4 4.3 5.2 2.9 0.5 0.3 1976 7.9 0.2 3.3 1.4 4.9 5.0 3.1 0.3 0.2 1977 9.3 0.3 3.8 1.4 5.5 5.4 3.2 0.2 0.1 1978 11.3 0.3 4.4 1.4 6.1 6.1 3.3 0.1 0.1 1979 13.2 0.4 4.9 1.4 6.7 6.6 3.4 0.1 _ 1980 16.1 0.5 5.5 1.4 7.4 7.5 3.4 0.1 1981 17.1 0.5 5.5 1.4 7.4 7.3 3.2 _ 1982 18.0 0.5 5.5 1.4 7.4 7.1 2.9 - - 1983 19.0 o06 5.5 1.4 7.5 7.0 2,8 1984 20.0 0.6 5.5 1.4 7.5 6.8 2,6 1985 21.0 o.6 5.5 1.4 7.5 6.6 2.4 1986 21.2 o.6 5.5 1.4 7.5 6.2 2.2 1987 21.6 0.7 5.5 1.4 7.6 5.8 2.1 _ _ 1988 21.8 0.7 5.5 1.4 7.6 5.5 1.9 - _ 1989 22.0 0.7 5.5 1.4 7.6 5.1 1.8 - 1990 22.4 0.7 5.5 1.4 7.6 4.8 1.6 _ 1991 22,6 0.7 5.5 1.4 7.6 4.5 i.5 - 1992 22.7 0.7 5.5 1.4 7.6 4.2 1i4 = B/C ratio at 8% 2.1 Rate of Return 74% ow . 1/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. A a/ Based on an average O&M cost of Rs. 3,900 per tubewell. V/ Based on an average cost of tubewell of Rs. 10,000 and assumed rate of installation. (See Annex VIII, page 1) a, ANNEX 4.1 Page 155 10. The Begari Sind Project (a) The Project 2.261 The project area is located on the Right Bank of the Indus River between the Sukkur and the Gudu Barrages (see Map). It is bounded on the southeast by the River Indus, on the northeast by the Desert Canal Command, and elsewhere by the remainder of the Begari Sind Command where the ground- water contains more than 1,200 ppm TDS. 2.262 The project would provide additional irrigation supplies, especially in rabi, and water table control for 349,000 acres CCA as recommended by the Lower Indus Project (LIP). 2.263 The whole project area has groundwater containing less than 1,200 ppm TDS that can be applied directly to crops, and groundwater at depths of up to 300 feet is usable for irrigation over the whole project area, but about 90 percent of the project area (314,000 acres CCA) has a groundwater table which is ten feet or less from the surface. According to LIP, approx- imately 55 percent of the land area is currently cultivated, although affected by salinity to a degree sufficient to lower crop yields. The remaining 45 percent of the area is severely affected by salinity and currently unused. Development of the cultivable area therefore presents a major reclamation problem. 2.264 Land tenure data are available for the Gudu Right Bank Command which covers the project area. The distributions of farm sizes and land tenure in this command area are as follows: Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 Acres 15 4 5 to 25 Acres 67 48 Over 25 Acres 18 48 Owner Operated 14 29 Owner Cum Tenant 3 5 Tenant Operated 83 66 U Data on proportion of area cultivated by owners or tenants were not available for the project area directly. Data were used from the Jacobabad District, within which the project lies. / IACA Comprehensive Report, Volume 20, Annexure 15J. ANNEX 4.1 Page 15- 2.265 The project would increase the water availability in the project area from 0.67 MAF in 1965 to about 1.53 NAF at full development. This increase in irrigation supplies would be sufficient to support a growth in cropped acreage from 277,000 acres (80 percent intensity 1/ in 1965) to 471,000 acres in 1985 (135 percent intensity). (b) Physical W4orks 2.266 The physical works of the project would consist of the install- ation of some 880 public tubewells and appurtenant works. All 880 tube- wells would have an average capacity of three cusecs. This results from the whole project area having groundwater (containing less than 1,200 ppm TD6) which can be applied directly to crops. The project area is also separated from the saline groundwater area by a zone having a groundwater quality between 1,200 and 2,000 ppm TD6. IACA considers there is little danger of migration from the saline groundwater area, and has therefore not provided for buffer wells or other protective measures. (c) Construction Schedule 2.267 The installation of the public tubewells would extend over four years in accordance with the following schedule: Preliminary Construction Schedule 1971/72 1972/73 1973/74 1974/75 --------- (Number of Wells) --------- Drilling of Wells and Construction of Structures 180 360 340 Electrification - 180 360 340 Wells in Operation - 180 540 880 2.268 Construction and electrification of the tubewell part of the pro- ject would thus be completed by the end of the Fourth Plan period. LIP 2/ has, after detailed investigations, given this project a high priority. These investigations should make it possible to begin construction on schedule, since little additional investigation would be necessary. 1/ Perennials counted twice. _/ Lower Indus Project. ANNEX 4.1 Pa- ge-1-57- (d) Cost Estimates and Expenditure Schedule 2.269 The total cost of the project is estimated by the Bank Group at about Rs. 137.8 million (USs 29.01 million equivalent). This would include the following: Summary Cost Estimates Local Foreign Currency Exchange Total - (Rs. Mill) -- Project Preparation 2.6 2.4 5-° Tubewells 17.5 24.7 42.2 Electrification 10.9 17.0 27.9 Other Civil [^Jorks 10.3 2.0 12.3 Subtotal 41.3 46.1 87.4 Overheads 14.0 4.4 18.4 Contingencies 10.6 9.6 20.2 Subtotal 24.6 14.0 38.6 Interest During Construction 11.8 - 11.8 TOTAL 77.7 60.1 137.8 2.270 Details of the cost estimates are given in Appendix 1, page 1. The foreign exchange component of the project would be about 43 percent of total project costs, or about US$ 13 million equivalent. 2.271 Expenditures would be spread over approximately four years in accordance with the following schedule: Summary Expenditure Schedule Based on IACA's Proposed Construction Schedule 1971/72 1972/73 1973/74 1974/75 -_______-__- (Rs. Mill) ------------- Tubewells and Associated WAJorks 21.7 34.4 33.6 1.8 Electrification - 9.4 19.0 17.9 TOTAL 21.7 43.8 52.6 19.7 A more detailed expenditure schedule,is given in Appendix 1, page 2. ANNEX 4.1 Page 158 (e) Recovery of Project Expenditures 2.272 On the basis of the above cost estimates, a preliminary assess- ment has been made of the charges required to recover total project costs over the lifetime of the project. Including operation and maintenance expenditures, the average annual rate of recovery would have to be about Rs. 15.5 million, as shown below: Annual Costs for Operation, Maintenance and Recovery of Capital Annual Costs (Rs. Mill) Capital Costs 1/ (Annuity at 6% over 20 years for Rs. 91.5 million) 8.0 Annual Staff and Maintenance Costs 2/ (Including repairs, electricity and recovery of power investment) 7.5 TOTAL 15.5 1/ Based on recovery of project investment including project preparation and interest during construction, but without costs of electrification. 2/ Average annual costs based on weighted average over lifetime of the project. 2.273 This iould be equivalent to about Rs. 44 per acre CCA, or Rs. 30 per cropped acre at the stage of full development. Existing water rates average about Rs. 7 per cropped acre. Future water rates to recover total project costs, including O&M plus surface water charges at existing levels would have to be in the neighborhood of Rs. 37 per cropped acre, or about Rs. 54 per acre CCA. This would be about 20 percent of the expected net value of production in 1985. (f) The Irrigation Regime 2.274 The mean quantities of surface and groundwater which would be made available with the project, and comparison with the irrigation water avail- ability likely to prevail if no further private tubewells are installed after the beginning of the project (in 1969), are surmarized for 1975 and 1985 in the water budget attached as Appendix 2. -Groundwater exploitation by exist- ing private tubewells vould be expected to discontinue following implementa- tion of the project. The total water availability at watercourse head under the public project would be about 1.53 MAF at the stage of full development. Of this, 0.72 MAF would be provided by public tubewells and 0.81 MAF by canal supplies. Some 0.05 NAF of groundwater would substitute for private exploita- tion expected by 1975 "without" additional water development, i.e. the ANNEX 4.1 Page 159 net increase of groundwater availability due to the project would be about 0.67 MAF. Total surface water availability at watercourse heads would increase under both the "with" and "without" case. The total surface supply of 0.81 MAF in 1985 would be 0.02 MAF greater than the surface supplies of that year under the "without" case. For the project area as a whole, the water availability would be enhanced from 1.9 acre feet per acre CCA in 1965 to 4.4 acre feet per acre CCA in 1985. This would permit an increase of cropping intensity from 80 percent in 1965 to 135 percent in 1985, at full delta. The agricultural mawdmum intensity of 150 percent can be attained, but agricultural constraints would prevent this maximum from being reached until after 1990. 2.275 As an alternative to the public tubewell project, further irriga- tion development could take place through the continued installation of private tubewells. The following table shows water availability and potential intensity growth as projected for these alternative forms of development. Water Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of Wells 559 1/ 880 1,124 - 880 Surface Supplies (MAF) 0.79 0.62 0.79 0.81 Annual Pumpage (MAF) 0.13 0.63 0.25 0.72 Total Annual Watercourse Delivery (MAF) 0.92 1.25 1.04 1.53 Cropping Intensity (percent) 89 105 95 135 Acres Cropped ('000) 311 366 332 471 Acre Feet/Acres Cropped 3.0 3.4 3.1 3.2 / Private tubewells of' one cusec capacity. 2.276 The table indicates that private groundwater development is incapable of pumping more than 35 percent of the annual recharge, and therefore, unable to provide sufficient control of the water table. Con- sequently, the combined water availability under the private alternative would support an intensity of only 95 percent at full delta, or about 139,000 cropped acres less than under public development. ANNEX 4.1 Page 160 (g) Agricultural Development 2.277 The cropping intensity for the project area in 1965 was estimated to be around 80 percent. The level of agricultural productivity in the pro- ject area is, at present, low. Of the 32 percent in rabi, main crops mature on res_dual soil moisture (the so called dubari or second crop), thus emphasizing the constraint of non-perennial water supply. Development is constrained by the high water table, non-perennial and unreliable canal supplies, and fairly widespread salinity. Thus while there is currently very little under-irrigation in kharif, the absence of rabi irrigation supplies means that all rabi crops are grown as non-irrigated dubari crops on the residual moisture in the soil from the rice crop. The project pro- poses to gradually replace the dubari crops with irrigated crops, and the acreage of cotton is expected to increase at the expense of rice after the depth of the water table has been lowered. Although climatie conditions in the project area favor cotton cultivation, rice acreage is about three times that of the cotton acreage because of factors already mentioned. The conver- sion, under the public project, to a perennial supply would also enable a rapid growth of rabi intensity. The main kharif crops are now rice, fodder, cotton and coarse grain. The main rabi crop is wheat, gram and fodder. Owing to the lack of reliable rabi irrigation supplies, the proportion of perennial crops - sugarcane, fruit and vegetables - is relatively low. 2.278 IACA's estimates indicate that the 1965 value of crop production was of the order of Rs. 35 million, and the value of livestock production was Rs. 11 million, giving a total Gross Production Value of Rs. 46 million. This would be an average of about Rs. 132 per acre of CCA. 2.279 During the pre-project period agricultural development within the project is expected to continue at the present trend. IACA estimates the number of private tubewells would increase from 90 in 1965 to about 290 in 1971. After the start of the project, further private tubewell development would stop, and public tubewells would gradually substitute for existing private wells. The increased water availability under public tubewell development would support the following intensity growth: Growth of Cropped Acreage Under Public Development / Intensity Cropped Acreage Year Percent ('000) 1965 80 277 1971 (start of project) 85 296 1975 105 366 1985 135 471 1990 150 523 I/ Perennials counted twice. ANNEX 4.1 Page 161 As stated earlier, continued private groundwater development would support a cropping intensity of about 95 percent at full delta. 2.280 The Bank Group has assessed the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water development. In accordance with the cropping intensity, cropping patterns and yield growth projected for the respective cases (see Ap- pendices3 and 4 for details) the GPV and the production increments would be expected to develop as follows: Growth of GPV "lWith" and "Without" Groundwater Development Incre- "Without" "With" mental Additional Groundwater the Project GPV Year Crops Livestock Total Crops Livestock Total Total ----------------------------(Rs. Mill)------------------- 1965 35 11 46 35 11 46 _ 1971 40 16 56 40 16 56 - 1975 43 19 62 50 21 71 9 1985 64 26 90 97 49 146 56 The GPV would triple over the life of the project, and the level of produc- tion would be 62 percent greater than in the "without" case 1/. The GPV per acre CCA would increase from Rs. 132 in 1965 to Rs. 418 in 1985, as compared to Rs. 258 per acre CCA in the "without" case. 2.261 As set forth in the Bank Groupts Report Volume II, Chapter VI, input levels are expected to rise substantially throughout West Pakistan, and thus appreciable increases in on-farm expenditures would be expected in both the "with" and "without" cases. To achieve the above projected growth of production, great efforts would have to be made to make available the quantities of non-water inputs required to sustain such growth. Allowing for increased on-farm expenditure and associated current project costs, as well as deducting an allocation of benefits resulting from additional surface water absorption, the incremental net production value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, pages 1lafid 2. ANNEX 4.1 Page 162 Incremental Net Benefits Attributable to Public Groundwater evelopment 1/ 1975 1985 1992 -(Rs. Mill) --- NPV 'Nith" 48 94 143 NPV "W1Sithout" 42 57 73 Incremental NPV 6 27 70 Allocation to Surface Water - 1 6 Allowance for infrastructure and Services - 1 2 Increase in O&M Expenditure 6 6 7 Total Associated Costs 6 8 15 Incremental Net Benefits Attributable to the Project (incremental NPV less total associated costs) - 19 55 1/ For details, see Appendices 4 and 5, pages 1 and 2. 2.282 In the Begari Sind region, private tubewell development has been relatively slow in the past, and a comparison with the alternative of private tubeve 11 development indicates that, after due allowance for all costs, the total discounted incremental net benefits attainable from the public tubewell project would be higher than those from continued private well installation. (See Appendix 6, pages 2 and 3). (h) Farmer Incentives 2.283 The benefits obtainable under the project should provide consider- able incentives for farmers. Based on ten acres CCA, average farm incomes would be expected to improve as follows: Average Changes in Farm Income per 10 Acres of CCA Within the Project Area Under Alternative Forms of Development 1975 1985 1992 W15/out Private Public W/out Private Public W/out Private Public Cropping Intensity (percent) 85 89 105 85 95 135 85 95 150 GPV (Rs.) 1,773 1,937 2,017 2,559 2,903 4,196 3,260 3,805 6,397 On-Farm Expenditure (Rs.) 567 587 646 921 1,046 1,511 1,174 1,370 2,303 Water Charges 1/ (Rs.) 94 146 561 94 237 539 94 237 549 Total Current Expenditure (Rs.) 661 733 1,207 1,015 1,283 2,50 1,268 2,852 Farm Income (Rs.) 1,112 1,104 810 1,544 1,620 2,146 1,992 2,198 3,545 V/ Water charges for the tWithout" case consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 60 (ii) O&M tubewells existing in 1970 (224 wells) Rs. 25 (iii) Amortization at 6 percent over ten years over existing wells Rs. 9 TOTAL Rs. 94 Water charges in 1985 for full private tubewell development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 67 (ii) O&M for private tubewells Rs. 126 (iii) Amortization at six percent over ten years for private wells Rs. 44 TOTAL Rs. 237 Water charges for full public tubewells development consist in 1985 of the following: (i) Surface water charges at Rs. 7 per acre cropped Rs. 95 (ii) O&M and amortization at six percent over 20 years Rs. 444 TOTAL Rs. 539 ANNEX 4.1 Page 16) 2.284 These results are averages only for the project area as a whole. Individual farmers with private tubewells at their disposal may achieve, or exceed, the average farm incomes projected under public development. However, private development has been less active in this area, and because it would offer more limited coverage, less efficient distribution of groundwater, and would not control the groundwater table sufficiently to permit increased sur- face supplies, the private alternative is not likely to increase total farm income throughout the project area to the degree attainable under the public tubewell project. In absolute terms, average farmers' income with the public project would be expected to grow from about Rs. 800 per farm of ten acres CCA in 1975 to about Rs. 3,500 in 1992. This should be sufficiently attractive to enlist farmers' active cooperation under the project. (i) Project Evaluation 2.285 On the basis of modifications, made in the IACA evaluation pro- cedures, as discussed in Chapter II A above, the Bank Group has assessed the likely results of the project as follows: Results of Project Evaluation - Public Project Incremental NPV (Present worth at 8%) Rs. 180 million Benefit/Cost Ratio (at 8%) 1.6 to 1 Rate of Return a) exclusive of potential private savings 13% b) inclusive of potential private savings 14% This compares to IACA's assessment - of incremental NPV, before allocation of benefits to surface water, of Rs. 424 million, and a rate of return of 33 percent on incremental costs. The calculations pertaining to the Bank Group's evaluation are given in Appendix 5. 2.286 The private alternative as evaluated by the Bank Group, which excludes the provision of additional surface water, would give a rate of return of 21 percent. The total discounted incremental NPV attainable under the private alternative would be less than one-quarter of that attainable under the public tubewell project. Details of the evaluation of the private alternative are given in Appendix 6, pages 1 to 3. (j) Conclusion 2.287 Though only indicative, the rate of return on total investments in the public tubewell project of 13 percent, after deducting an allowance for benefits attributable to increased surface supplies, would appear I/ For details of IACA's evaluation, see IACA Comprehensive Report, Volume 20, Annexure 15J, Chapter 4 (public project) and Appendix 1 (private alternative). ANNEX 4.1 Page 165 satisfactory. The alternative of continued private tubewell development would appear capable of achieving a slightly higher rate of return on invest- ment than is likely to be attained under the public tubeiell project. However, public development would make a substantially greater contribution to total agricultural production than is presently feasible in the Begari Sind area under continued private tubewell development. Private development also appears incapable of providing the important element of effective water table control, which is essential for the introduction of required additional surface water supplies. The Bank Group has therefore included the Begari Sind project in the Action Program as scheduled. Project prepara- tion should be continued to ensure that the project is ready for implementation by 1972. ANNEX 4.1 INDUS SPECIAL STUDY APPENDIX 1 Public Tubewell Project - Begari Sind Page 1 Revised Cost Estimate and Financial Requirements Local Currency Foreign Exchange 1/ Total (Rs. Mill) (Rs. Mill) (US$ Equiv) - (Rs. MillTT)US$ Equiv) PROJECT PREPARATION 2.6 2.4 0.51 5.0 1.05 Tubewell Project: Tubewells 17.5 24.7 5.20 42.2 8.88 Appurtenant Structures 3/ 6.8 2.0 0.42 8.8 1.85 Wfatercourse Improvement - 3.5 - - 3.5 0.74 Duties and Taxes 4/ 4.0 - - 4.0 0.84 Engineering and A&xinistration5/ 3.2 2.7 0.57 5.9 1.24 Subtotal 35.0 29.4 6.19 64.4 13.56 Contingencies 7.0 5.9 1.24 12.9 2.71 Total Tubewell Project 42.0 35.3 7.43 77-3 16.27 ELECTRIFICATION Distribution 9.1 114.2 2.98 23.3 14.91 Transmission 1.8 2.8 0.59 14.6 0.97 Daties and Taxes 1? 5.1 - - 5.1 1.07 Engineering and Administration5/ 1.7 1.7 o.36 3.4 0.72 Subtotal 17.7 18.7 3.93 36.4 7.67 Contingencies 3.6 3.7 0.78 7.3 1.54 Total Electrification 21.3 22.4 4.71 43.7 9.20 INTEREST DURING OJNSTRUCTIDN Tubewell Project 7/ 9.2 - - 9.2 1.94 Electrification 8 2.6 - - 2.6 55 Subtotal 11.8 - - 11.8 2.49 Total Financial Requirements 77.7 60.1 12.65 137.8 29.01 I/ Rate of exchange used 1 : 4.75 7/ Estimated at 5 percent direct costs before contingencies. 3/ Estimated at Rs. 10/acre OCA. El Estimated at 15 percent of Foreign Exchange component of direct costs before engineering and administration. 5/ Estimated at 10 percent of direct costs after duties and taxes. 6/ Estimated at 20 percent of direct costs after duties and taxes and engineering and administration. 7/ Estimated at 6 percent per annum for two year period for each individual phase of tubewell construction. 8/ Estimated at 6 percent per annum for one year period. APPENDIX 1 INDUS SPECIAL STUDY Page 2 Public Tubewell Project - Begar Sind Estimated Expenditure Schedule Based on Bank Group Cost Estimates 1971/72 1972/73 1973/74 1974/75 TOTAL -__________________- (Rs Million) ------------------ Project Preparation / 5.0 - - 5-0 Tubewells, Structures and Watercourses 11.1 22.3 21.1 - 54.5 D4ties and Taxes 0.9 1.6 1.5 - 4.0 Engineering 1.2 2.4 2.3 - 5.9 Contingencies 2.6 5.3 5.0 - 12.9 Subtotal 15.8 31.6 29.9 - 77.3 Interest Diring Construction 0.9 2.8 3.7 1.8 9.2 Total Tubewell Project 16.7 34.4 33.6 1.8 86.5 Electrification - 5.7 11.4 10.8 27.9 Duties and Taxes - 1.0 2.1 2.0 5.1 Engineering and Administration - 0.7 1.4 1.3 3.4 Contingencies - 1.5 3.0 2.8 7.3 Subtotal - 8.9 17.9 16.9 43.7 Interest During Construction - 0.5 1.1 1.0 2.6 Total Electrification - 9.4 19.0 17.9 46.3 TOTAL FINANCIAL REQUIREMENTS 21.7 43.8 52.6 19.7 137.8 7/ Incurred prior to beginning of construction. INDUS SPECIAL STUDY Public Tubewell Project - Begari Sind Comparative Summary Water Budget "With" the Project and "Without" Additional Tubewells Net Increase 1965 1975 1985 "With" the Project "With" "Without" "Wfith" "Without" the Additional the Additional Surface GroUnd Existing' Project Tubewells Project Tubewells Water water Total ----------------------(MAF)-------- - ------------------ Surface Supplies: Total: 0.65 0.62 0.79 0.81 0.79 0.02 - 0.02 …-- - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - -- - - - - - - - - - - -------------… Thereof during October to May:- 0.03 - 0.01: 0.o6 0.o4 0.02 - 0.02 …__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2/ 3/ Groundwater Supplies: 0.02 o.63 0.05 0.72 0.05 - 0.67 0.67 Total Supplies: 0.67 1.25 0.84 1.53 0.8L, 0.02 0.67 0.69 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 290 private tubewells in operation by 1971 and an average utilization rate of about 27 per cert per annum. 3/ This would include substitution for existing privatc groundwater exploitation as well as those of further increase in private groundwater extraction. PUBLIC TUBEWELL PROJECT: BEGARI SIND WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL >1-WATER COURSE-->,Er- FIELD TRANSPIRATION EVARATIOI E Vi APORATION EVAPORATION 1.09 RAIN I I 0 L < 0 02 1~~~~~~~~ 002~~~~~~~~~~ , , ~~~~~~~~~CROP L 1.16 093 1 70 1.52 1.07 , | C \ ~~~~~~~~USE J RIVER RECHARGE IRE- _ - i N ACHARGE IRRIGATION AWRECHARGE deRECHARGE A PUMPING X\0.177\ )~~.18 7407 .0' 0. t30/do 0 77 GROUND WATER RESERVOIR -u z DRAINAGE X PUMPING lR)IBRD -3322 ) INDUS SPECIAT. STUDY Public Tubewell Project - Begari Sind Yield Projections "With" the Project (Maunds per Acre) Present IACA Projections Bank Group Projections 1965 1971 1975 1985 2000 1971 1975 1985 2000 Kharif: coarse rice 16.0 19.0 23.0 34.0 50.0 18.0 20.2 29.9 50.0 cotton 4.0 4.5 7.0 13.5 20.0 4.5 5.1 7.5 18.0 maize 5.0 5.5 9.0 20.0 34.0 5.6 6.4 9.4 22.5 fodder 150.0 165.0 230.0 360.0 500.0 168.9 190.2 281.4 500.0 pulses 6.o 6.5 7.5 9.0 13.0 6.7 7.6 11.2 13.0 oil seeds 7.0 7.5 na. na. na. 7.9 na. na. na. Rabi: wheat 7.0 8.0 1)4.0 24.0 34.0 7.9 8.9 16.6 34.0 fodder 50.0 60.0 400.0 650.0 900.0 56.3 400.0 650.0 900.0 oil seeds 4.0 4.5 6.5 10.0 15.0 4.5 5.1 7.5 15.0 gram 6.o 6.5 8.0 11.5 16.5 6.7 7.6 11.2 16.5 pulses 6.o 6.5 7.5 na. na. 6.7 7.6 na. na. Perennials: sugarcane (gur) 25.0 27.0 33.0 50.0 80.0 28.1 31.7 46.9 80.0 fruit 50.0 54.0 65.0 110.0 160.0 54.0 65.0 110.0 160.0 vegetables 90.0 97.0 120.0 160.0 220.0 97.0 120.0 160.0 220.0 INDUS SPECIAL STUDY Public Tubewell Project - Begari Sind Yield Projections "1"Without" Additional Tubewells (Maunds ner Acre) Present IACA Projections Bank Group Projections 1965 1971 1975 1985 2000 1971 1975 1985 2000 Kharif: coarse rice 16.0 19.0 20.0 24.0 35.0 18.0 20.2 29.9 50.0 cotton 4.0 4.5 5.5 8.o 12.0 4.5 5.1 7.5 18.0 maize 5.0 5.5 6.o 10.0 20.0 5.6 6.1 7.4 10.0 fodder 150.0 165.0 180.0 240.0 300.0 168.9 182.8 222.9 300.0 pulses 6.o 6.5 7.0 7.5 10.0 6.7 7.3 8.9 12.0 oilseeds 7.0 7.5 7.5 10.0 12.0 7.9 8.5 10.4 14.0 Rabi: wheat 7.0 8.0 8.5 15.0 20.0 7.9 8.9 16.6 34.0 fodder 50.0 60.0 60.0 75.0 100.0 56.3 60.9 74.3 100.0 oilseeds 4.0 4.5 5.0 7.0 10.0 4.5 4.9 5.9 8.0 gram 6.o 6.5 7.0 8.0 11.0 6.7 7-3 8.9 12.0 pulses 6.o 6.5 7.0 8.0 11.0 6.7 7.3 8.9 12.0 Perennials: sugarcane (gur) 25.0 27.0 29.0 35.0 50.0 28.1 31.7 46.9 80.0 fruit 50.0 54.0 57.0 75.0 100.0 54.0 65.0 110.0 160.0 vegetables 90.0 97.0 104.0 120.0 150.0 97.0 120.0 160.0 220.0 1t INDUS SPECIAL STUDY Public Tubewell Project - Begarn Sind Revised Projection of Production "Wi1th" the Project 1975 1985 1992 Cropped Yields Production GPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (mds per acre) ('000 mds) (Rs. mill) Acres (mds per acre) ('000 mds) (Rs. msll) Acres (mds per acre) ('000 mds) (Rs. mill) Kharif: Coarse rice 94,200 20.2 1,902.8 16.459 62,800 29.9 1,877.7 16.242 34,900 38.0 1,326.2 11.472 Cotton 31,400 5.1 160.1 4.803 62,800 7.5 L71.0 14.130 10h,700 11.3 1,183.1 35.493 Maize 10,500 6.4 67.2 1.243 17,hOO 9.4 163.6 3.027 17,4OO 14.1 245.3 4.538 Fodder 15,700 190.2 2,986.1 - 34,900 281.4 9,820.9 - 48,900 364.2 17,809.4 - Pulses 5,200 7.6 39.5 0.830 7,000 11.2 78.4 1.646 10,500 12.0 126.0 2.646 Oilseeds - - - - - - - - - - - - Sub-total: 157,000 23.335 184,900 35.045 216,400 54.149 Rabi: Wheat 111,700 8.9 994.1 12.923 146,600 16.6 2,433.6 31.637 146,600 23.2 3,401.1 44.214 Fodder 27,900 63.4 1,768.9 - 34,900 93.8 3,273.6 - 38,400 - - Oilseeds 14,000 5.1 71.4 1.678 17,400 7.5 130.5 3.067 20,900 10.4 217.4 5.109 Gram 31,400 7.6 238.6 3.400 20,900 11.2 234.1 3.336 14,000 13.4 187.6 2.673 Pulses 3,500 7.6 26.6 0.559 - - - - - - - Green Manure - - - - 24,00 - - - 34,900 - - Sub-total: 188,500 18.560 244,200 38.040 254,800 51.996 Perennial: Sugar 3,100 31.7 98.3 1.769 8,700 46.9 M08.C 7.344 10,500 60.2 632.1 11.378 Fruit 5,900 65.0 383.5 h.218 8,700 110.0 957.0 10.527 10,400 130.8 1,360.3 14.963 Vegetables 1,400 120.0 168.0 1.848 3,500 160.0 560.0 6.160 5,200 185.7 965.6 10.622 Sub-tctal: 10,400 7.835 20,900 24.031 26,100 36.963 Total GPV Crops 49.730 97.116 143.108 Animal Husbandry 1' 20.673 49.335 80.140 Total GPV 70.403 146.451 223.2h8 On-farm Costs 2/ 22.529 52.722 80.369 Total NPV 47.874 93.729 142.879 1/ Based on IACA projection except for 1975. 2/ 1975 = 32% of total GPV ± or 1985 - 36% of total GPV 1992 = 36% of total GPV. INDUS SPECIAL STUDY Public Tubewell Project - Begarn Sind Revised Projection of Production "Without" the Project 1973 1975 1985 1992 Cropped Yields Production GPV Yields Production GPV Yields Production GPV Yields Production GPV Acres (mds/acre) (000r mds) (Rs. mill) (mds/acre) ('OOO mds) (Rs mill) (mds/acre) ('000 mds) (Rs. mill) (mds/acre) ('000 mds) (Rs. mill) Eharif. Coarse rice 97,700 18.7 1,827.C 17.174 20.2 1,973.5 17.071 29.9 2,921.2 25.268 38.0 3,712.6 32.11h Cotton 31,[Oo 4.7 147.6 h.428 5.1 160.1 4.803 7.5 235.5 7.065 11.3 354.8 10.644 Maize 8,700 5.9 51.3 .949 6.1 53.1 .982 7.4 6)4.4 1.191 8.5 74.0 1.369 Fodder 17,500 175.8 3,076.5 - 182.8 3,199.0 - 222.9 3,900.8 - 256.0 4,480.o - Pulses 1,700 7.0 11.9 .250 7.3 12.4 .260 8.9 15.1 .317 10.2 17.3 .363 Oilseeds 3,500 8.2 28.7 .674 8.5 29.8 .700 l0.4 36.4 .855 11.9 4l.6 .978 Sub-total: 160,500 23.J75 23.816 34.696 45.h68 Rabi: Wheat )45,4L00 8.2 372.3 4.8h0 8.9 404.1 5.253 16.6 753.6 9.797 23.2 1,053.3 13.693 Fodder 13,900 58.6 811,.5 - 60.9 8h6.5 - 7)4.3 1,032.8 - 85.3 1,185.7 - Oilseeds 10,500 4.7 49h. 1.161 I4.9 S1.), 1.208 5.9 62.0 1.457 6.8 71.4 1.678 Gram 3),900 7.0 2)44.3 3.h81 7.3 25) 8 3.631 8.9 310.6 h.426 10.2 356.0 5.073 Pulses lh,OOO 7.0 98.0 2.058 7.3 102.2 2.146 8.9 1214.6 2.617 10.2 WA2.8 2.999 Sub-total: 118,700 11.5ho 12.238 18.297 23.hh3 Perennial: Sugar 1,700 29.3 49.8 .896 31.7 53.9 970 46.9 79.7 1.435 60.2 102.3 1.841 Fruit 5,200 58.6 30)4.7 3.352 65.o 338.0 3.718 110.0 572.0 6.292 130.8 680.2 7.482 Vegetables 1,700 105.5 179.4 1.973 120.0 204.0 2.244 160.0 272.0 2.992 185.7 315.7 3.h73 Sub-total: 8,600 6.221 6.932 10.719 12.796 Total GPV Crops 4l.236 b2.986 63.712 81.707 Total GPV Animal Husbandry 1/ 17.400 18.900 25.600 32.100 Total GPV 58.636 61.886 89.312 113.807 On-Farm Costs 2/ 18.764 19.808 32.152 h0.971 Total NPV 39.B72 42.082 57.160 72.836 1/ Based on IACA projection. / 1973 = 32% of total GPV. 1975 = 32% of total GPV. 1985 = 36% of total GPV. 1992 = 36% of total GPV. INDUS SPECIAL STUDY Public Thbewell Project - Begari Sind Calculation of Rate of Return 0 & N Incremental Incremental NPV and Potential Benefits in- R A T E 0 F R E T U R N NPV "With* NPV 'Without" Incremental Costl/of Add 1 After Allocation Infrastructure Power Attributable Private cluding Potential Capital Costs Net Benefits Project Costs Year Project- Project NPV Surface Water to Surface Water and Services 2/ Costs Increment Savings PrIvate Savings of Project at 1S3% at 3J% at !iat14S% _ _ --- (Re. mllon) __-- - -- - - _ 1971 - - - - - - 4 14 19.9 - 1.2 17.6 17.4 1972 39.5 39.5 - - - - - - 14 14 30.0 - 1.1 23.6 23.0 1973 41.5 39.9 1.6 - 1.6 o.06 1.50 0.04 1.4 14 28.4 - 0.9 19.8 19.0 1974 44.2 41.o 3.2 - 3.2 0.11 4.52 -1.4 1.4 - -0.9 0.0 1975 47.9 42.1 5.8 - 5.8 0.20 6.52 -0.9 1.4 o.s - 0.5 0.3 1976 52.3 43d4 8.9 - 8.9 0.31 6.60 2.0 1.4 3.4 1.0 1.5 1977 56.o 44.e8 11.2 - 11.2 0.39 6.68 4.1 1. S-5 1.8 2.2 1978 59.8 46.2 13.6 - 13.6 0.48 6.76 6.4 1.4 7.8 2.4 2.7 1979 63.9 47.6 16.3 - 16.3 0.57 6.84 8.9 1.4 10.3 3.0 3.1 1980 68.3 49.1 19.2 - 19.2 0.67 6.93 n.6 1.4 13.0 3.5 3.4 1981 72.6 50.6 22.0 - 22.0 0.77 7.01 14.2 1.4 15.6 3.8 3.6 1982 77.6 52.2 25.4 - 25.b 0.89 7.09 17.4 1.4 18.8 4.1 3.8 1983 82.4 53.8 28.6 - 28.6 l.Oo 7.17 20.4 1.4 21.8 4.3 3.8 1984 87.8 55.5 32.3 - 32.3 1.13 7.25 23.9 14 25.3 4.4 3.9 1985 93.7 57.2 36.5 .8 35.7 1.25 7.34 27.1 14 28.5 4.5 3.8 1986 100.1 59.2 40.9 1.5 39.4 1.38 7.36 30.7 1.4 32.1 4b5 3.8 1987 106.8 61.3 45.5 2.2 43.3 1.52 7.38 34.4 1.4 35.8 4.4 3.7 1988 113.9 63.4 50.5 2.8 47.7 1.67 7d41 38.6 1.4 40.0 4.4 3.6 1989 121.5 65.6 55.9 3d4 52-5 1.84 7-43 43.2 1.4 44.6 4.4 3.5 1990 129.3 67.9 61.4 4.4 57.0 2.00 7d45 47.6 1.4 49.o 4.3 3.2 1991 136.5 70.3 66.2 5-5 60.7 2.12 7.47 51.1 1.4 52.5 4.1 3.2 1992 142.9 72.8 70.1 6.3 63.8 2.23 7.50 54.1 1.4 55.5 3.8 2.9 _ 61.2 59.4 61.0 59.4 Rate of Return 3/ 13S Rate of Return 4/ = 14% 1/ Charged at average value per acre foot of total incremental water availability: Increnental Value/Acre Foot Increentl Water of Incremental NPV Availability Availability (its. mill.) (MAY) (R3.) 1985 36.5 0.691 52.8 1990 61.4 0.845 72.7 1992 70.1 0.862 81.3 2/ Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includes: 1.85% of attributable increment for roads. 1.65% of attributable increment for supporting services. Charged on incremental NPV after allocation to surface water only. 1, Ib Excluding Potential Private Savings. 4/Including Potential Private Savings. APPENDIX 5 INDIJS SPECIAL STUDY Page 2 Public Tubewell Project - Begari Sind Benefit: Cost Ratio Incremental NPV Project Costs, In- Discounted at 8 % After Allocation cluding 0 & M, Services Year to Surface Water and Infrastructure Benefits Costs ----------------------------TRs. mill)-------------------------------------- 1/ 2/ 1/ 2/ 1971 -- 19.9 16-.5 (-1.4) -- 19.4 17.1 1972 _- 30.0 28.6 -- 25.7 24.5 1973 1.6 30.0 28.6 1.3 23.8 22.7 1974 3.2 4.6 3.2 2.4 3.4 2.4 1975 5.8 6.7 5.3 3.9 4.6 3.6 1976 8.9 6.9 5.5 5.6 4.3 3.5 1977 11.2 7.1 5.7 6.5 4.1 3i3 1978 13.6 7.2 5.8 7.3 3.9 3.1 1979 16.3 7.4 6.o 8.2 3.7 3.0 1980 19.2 7.6 6.2 8.9 3.5 2.9 1981 22.0 7.8 6.4 9.4 3.3 2.7 1982 25.4 8.o 6.6 10.1 3.2 2.6 1983 28.6 8.2 6.8 10.5 3.0 2.5 1984 32.3 8.4 7.0 11.0 2.9 2.4 1985 35.7 8.6 7.2 11.2 2.7 2.3 1986 39.4 8.7 7.3 11.5 2.5 2.1 1987 43.3 8.9 7.5 11.7 2.4 2.0 1988 47.7 9.1 7.7 11.9 2.3 1.9 1989 52.5 9.3 7.9 12.2 2.2 1.8 1990 57.0 9.5 8.1 12.3 2.0 1.7 1991 60.7 9.6 8.2 12.1 1.9 1.6 1992 63.8 9.7 8.3 11.7 1.8 1.5 179.7 125.6 111.4 B/C Ratio Al at 8% = 1.4 B/C Ratio 2/ at 8% = 1.6 31 1/ Before deduction of Potential Private Savings 2/ After deduction of Potential Private Savings 3/ If potential private savings are added to the benefit stream rather than netted out from the cost stream, the Benefit/Cost ratio would be 1.5, as shown below: Present worth of Benefits = 179.7 Present worth of Savings = 14.2 TOTAL = 193.9 B/C ratio 193.9 = 1.5 I DqDUS SPECIAL STUDY Public Tubewell Project - Begari Sind Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Replacements of Incremental Incremental Wells in Wells During Additional Number of Wells Water Availability 2 Year Operation Project Period Wells in Operation (MAF) 1965 90 1966 108 1967 130 1968 156 1969 187 1970 224 1971 269 45.0 45 0.01 1972 323 54.0 99 0.02 1973 388 65.0 164 0.04 1974 466 78.0 242 0.05 1975 559 93.0 335 0.08 1976 643 84.0 419 0.09 1977 739 96.0 515 0.12 1978 850 111.0 626 0.14 1979 978 128.0 754 0.17 1980 1,124 146.0 900 0.20 1981 1,124 45 goo 0.20 1982 1,124 54 goo 0.20 1983 1,124 65 900 0.20 1984 1,124 78 900 0.20 1985 1,124 93 900 0.20 1986 1,124 84 90C 0.20 1987 1,124 96 900 0.20 1988 1,124 *11 900 0.20 1989 1,124 128 900 0.20 1990 1,124 146 9Qo 0.20 1991 1,124 45 900 0.20 1992 1,124 54 900 0.20 C _,~~~~~~~~~~~~ H 1/ Rate of Installation: 20% p.a. compound growth between 1965 and 1975. This rate of installation accepts the 15% p.a. compound growth between 1975 and 1980. ceiling for coverage with private tube- 2/ Assumed rate of average utilization: 30% wells stated in the IACA project report. Each well would pump for about 2,630 hours and produce about 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Begari Sind Estimate of Incremental NPV of Private Alternative Acreage Cropped Expansion of Acreage Cropped Acreage Cropped Overall Intensity NPV of Private NPV Incremental Receiving Addt\. Acreage Cropped Under "With" Under 'Without" Alternative nWithout" NPV Year Water (000) 1, ('000) Condition ('000) Condition ('000) Acres % (Rs. mill. ) (Rs. mill.) (Rs. mill.) 1971 4 5 1.6 6.1 291.9 298.0 85 39.3 39.1 0.2 1972 9-9 2.9 12.8 286.5 299.3 86 39.9 39.5 0.4 1973 16.4 7.6 24.o 280.0 304.0 87 40.9 39-9 1.0 1974 24.2 8.3 32.5 272.2 304.7 87 42.0 41.0 1.0 1975 33.5 15.0 48.5 262.9 311.4 89 43.6 42.1 1.5 1976 41.9 15.5 57.4 254.5 311.9 89 45.1 43-4 1.7 1977 51.5 22.1 73.6 244.9 318.5 91 47.5 44.8 2.7 1978 62.6 25.0 87.6 233.8 321.4 92 49.4 46.2 3.2 1979 75.4 30.5 105.9 221.0 326.9 94 51.9 47.6 4-3 1980 90.0 35.5 125.5 206.4 331.9 95 54.4 49.1 5.3 1981 90.0 35.5 125.5 206.4 331-9 95 56.4 50.6 5.8 1982 90.0 35.5 125.5 206.4 331.9 95 58.4 52.2 6.2 1983 90.0 35.5 125.5 206.4 331.9 95 60.4 53.8 6.6 1984 90.0 35.5 125.5 206.4 331.9 95 62.6 55.5 7.1 1985 90.0 35.5 125.5 206.4 331.9 95 64.8 57.2 7.6 1986 90.0 -35.5 125.5 206.4 331-9 95 67.3 59.2 8.1 1987 90.0 35.5 125.5 206.4 331.9 95 70.0 61.3 8.7 1988 90.0 35.5 125.5 206.4 331.9 95 72.8 63.4 9.4 1989 90.0 35.5 125.5 206.4 331.9 95 75.6 65.6 10.0 1990 90.0 35.5 125.5 206.4 331.9 95 78.6 67.9 10.7 1991 90.0 35.5 125.5 206.4 331.9 95 81.8 70.3 32.21 1992 90.0 35.5 125.5 206.4 331.9 95 85.8 72.8 12.2 1/ Based on existing water depth of 2.5 acre feet on historical intensity. Assumes each incremental well will increase irrigation to full delta on 100 acre. INDUS SPECIAL STUDY Public Tubewell Project - Begari Sind Rate of Return of Private Tubewell Alternative Benefit/Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capita Total Benefits Costs Benefits at Costs of Year NPV & Services 1/ Costs 2/ Costs Costs at 8% at 8% 20.8% 20.8% --------------------------__------- Rs. Mill. ----------------------------------------- 1971 0.2 - 0.1 0.5 0.6 0.2 o.6 0.2 0.5 1972 0.4 - 0.h 0.5 0.9 0.3 0.8 0.3 o.6 1973 1.0 - o.6 0.7 1.3 0.8 1.0 0.6 0.7 1974 1.0 - 0.9 0.8 1.7 0.7 1.3 0.5 0.8 1975 1.5 0.1 1.3 0.9 2.3 1.0 1.6 0.6 0.9 1976 1.7 0.1 1.6 0.8 2.5 1.1 1.6 0.5 0.8 1977 2.7 0.1 2.0 1.0 3.1 1.6 1.8 0.7 0.8 1978 3.2 0.1 2.4 1.1 3.6 1.7 1.9 0.7 0.8 1979 4.3 0.2 2.9 1.3 4.4 2.2 2.2 0.8 0.8 1980 5.3 0.2 3.5 1.5 5.2 2.5 2.4 0.8 0.8 1981 5.8 0.2 3.5 0.5 4.2 2.5 1.8 0.7 0.5 1982 6.2 0.2 3.5 0.5 4.2 2.5 1.7 0.6 0.4 1983 6.6 0.2 3.5 0.7 4.4 2.4 1.6 0.6 0.4 1984 7.1 0.3 3.5 0.8 4.6 2.4 1.6 0.5 0.3 1985 7.6 0.3 3.5 0.9 4.7 2.4 1.5 0.4 0.3 1986 8.1 0.3 3.5 0.8 4.6 2.4 1.3 0.4 0.2 1987 8.7 0.3 3.5 1.0 4.8 2.4 1.3 0.4 0.2 1988 9.4 0.3 3.5 1.1 4.9 2.4 1.2 0.3 0.2 1989 10.0 0.4 3.5 1.3 5.2 2.3 1.2 0.3 0.1 1990 10.7 0.4 3.5 1.5 5.4 2.3 1.2 0.2 0.1 1991 11.5 0.4 3.5 0.5 4.4 2.3 0'9 0.2 0.1 1992 12.2 0.4 3.5 0.5 h44 2.2 0.8 0.2 0.1 40.5 31.2 10.5 10.5 B/C Ratio at 8% = 1.3 Rate of Return = 21% 1/ Based on a charge of 3.5% of incremental NPV as under public tubewell program. 2/ Based on average annual 0 & M costs per tubewell of Rs. 3,900. 3/ Based on average cost of tubewell of Rs. 10,000 ani assumred rate of installation (see Annex VIII page 1). ANNEX 4.1 Page 167 11. Dipalpur Below The B.S. Link (a) The Project 2.288 The public tubewell project would consist of providing additional irrigation supplies and water table control for 611,000 acres of commanded culturable area (CCA) below the Balloki-Suleimanke (B.S.) Link along the right bank of the Sutlej River (see 1Nap). The area is situated in-the.- administrative district of Montgomery and comprises the whole of Dipalpur Canal Command below the B.S. Link. It is commandable by the Dipalpur Canal on the Sutlej River. This canal, being above the network of link canals to be completed in the Punjab as part of the replacement works of the Indus Waters Treaty (1960), would not be'directly affected by diversionsttozanddfrom these links. However, after the implementation of the Treaty (1970) the proposed area would receive all its surface supplies from the Marala head- works on the Chenab River. The disused bed of the Old Beas River traverses the northern half of the project area. The distribution of the groundwater quality is as follows: Groundwater Quality Zones of the Project Groundwater Quality Project Area Zone Percent '000 Acres Iless than 1,000 ppm TDS 59 362 1,000 - 3,000 ppm TDS 41 2h9 TOTAL 100 611 2.289 About 28 percent of the project area (171,000 acres CCA) has groundwater table within ten feet of ground level and 25 percent of this area is assumed to be effectively waterlogged. IACA considers that the soils within the project area are generally suitable for irrigated agriculture. However, as a result of under-irrigation and the high water table, there are localized areas of severe salinity, the extent of which would need to be determined in the course of project preparation. 2.290 Available statistics on farm size relate to the Tehsil Dipalpur (Montgomery District), in which the greater part of the project area is situated. The following table relates to that tehsil: ANNEX 4.1 Page 168 Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 Acres 46 7 5 to 25 Acres 42 45 Over 25 Acres 12 48 Owner Operated 24 44 Owner Cum Tenant 13 Tenant Operated 63 56 1/ Included under owners and tenants. The average farm size in the project area is about 12 acres, and is thus larger than the average for the Punjab as a whole. IACA observes that frag- mentation of farms affects some 70 percent of the farming in the aiea. Only about 12 percent of the total farms are above 25 acres in size. About one-fourth of the farms and approximately one-half the farm area are owner- occupied. The relatively low standards of farming are largely due to the non-perennial surface water supply, high water table, and the sizeable number of large farms having a high percentage of land as culturable waste. A con- siderable growth of private tubeEell installation (1,470 wells installed by 1965) has nevertheless taken place in recent years. 2.291 The project would increase water availability in the area from 1.09 MAF existing in 1965 to 2.38 MAF at full development. This increase in irrigation supplies -knuld be sufficient to support a growth in cropped acre- age from 623,000 acres l/ (102 percent intensity) in 1969 to 917,000 acres (150 percent) in 1985. (b) Physical Works 2.292 The physical works of the project would consist of the installation of some 850 public tubewells and appurtenant works. Out of this total, 473 wells of four cusec average capacity would be in the fresh groundwater zones of the project area (59 percent, or 362,000 acres CCA), and 377 wells of three cusec average capacity would be in the zone underlain by groundwater requiring micing with surface water (41 percent, or 249,000 acres CCA). 1/ Perennials counted twice. If perennial acreage were counted only once, cropping intensity would be 97.7 percent. ANNEX 4.1 PaTge 169 2.293 In its Bari Doab Regional Development Report, IACA has proposed the canalization of the old bed of the Beas River in order to provide the much needed surface drainage to benefit this and other projects. It is pro- posed that the Sukh Beas Drainage Project, as it would be known, be completed by 1972. The Bank Group has excluded both estimated costs of the Sukh Beas project and projected benefits from the present analysis. An analysis of the Sukh Beas project is given later in this volume. (c) Construction Schedule 2.294 The installation of the public tubewells vould extend over approxi- mately five years. On the assumption tha-t the project i%ould be brought into operation in accordance with the Basin-wide water development program, construction should proceed according to the following scheduld:- Preliminary Construction Schedule As Proposed by IACA 1970/71 1971/72 1972/73 1973/74 1974/75 -To-------- nNo. of lWells) --------------- Drilling and Construction 90 360 360 40 - Electrification _ 90 360 360 O40 Wells in Operation 90 450 810 850 IACA's Report is a first attempt to formulate this project wjith regard to its technical, agricultural, financial and economic implications. As such, it is in many respects based on general information applicable to larger areas rather than on specific investigations. Further detailed project preparation would have to be initiated in due course if the project were to be implemented as scheduled above. (d) Cost Estimates and E;penditure Schedule 2.295 The Bank Group has estimated the total financial requirements of the project, at present prices, at about Rs. 153.6 million, equivalent to US$ 32.3 million. This would include the followzing: ANNEX 4.1 Page 170 Summary Cost Estimates Local Foreign Currency Exchange Total …-----…- (Rs. Mill) ------____ Project Preparation 3.0 2.6 5.6 Tubewells 18.9 27.3 46.2 Electrification 12.3 18.6 30.9 Other Civil Wlorks 13.1 2.0 15.1 Subtotal 47.3 50.5 97.8 Overheads 15.4 4.8 20.2 Contingencies 11.9 10.5 22.4 Subtotal 27.3 15.3 42.6 Interest During Construction 13.2 - 13.2 TOTAL 87.8 65.8 153.6 Details of the cost estimates are given in Appendix 1, page 1 - The foreign exchange component of the project would be about 43 percent of total project costs, or about US$ 13.9 million equivalent. 2.296 Expenditures would be spread over approximately five years, in accordance with the following schedule: Summary Expenditure Schedule (Based on IACA's Proposed Construction Schedule) 1970/71 1971/72 1972/73 1973/74 1974/75 Tubewells and Associated lWorks 15.4 39.6 41.0 6.4 0.2 Electrification - 5.4 21.6 21.5 2.5 TOTAL 15.4 45.0 62.6 27.9 2.7 A more detailed expenditure schedule is given in Appendix 1, _page 2. (e) Recovery of Project Expenditures 2.297 On the basis of the above cost estimates, a preliminary assessment has been made of the charges required to recover over its lifetime the total costs of this project,ihcluding operation and maintenance expenditures. The average annual rate of recovery under these conditions would be about Rs. 18.9 million, as shown below: ANNEX 4.1 Page 171l Annual Costs for Operation, Maintenance and Recovery of Capital Annual Costs (Rs. Mill) Capital Costs - (Annuity at 6% over 20 years for Rs. 102.6 million) 2/ 8.9 Operation and Maintenance - (Including staff costs, repairs, electricity and recovery of power investment) 10.0 TOTAL 18.9 17Based on recovery of proj investment, including project preparation and interest during construction, but -:'ithout costs of electrification. 2/ Average annual costs, based on weighted average over lifetime of the project. 2.298 This would be equivalent to about Rs. 31 per acre CCA or Rs. 21 per cropped acre at the stage of full development. Existing water rates average about Rs. 7 per cropped acre. Future water rates to recover total project costs and O&M plus existing water charges, would have to be in the neighborhood of Rs. 28 per cropped acre or about Rs. 42 per acre CCA. This would be about nine percent of the expected net value of production per cropped acre in 1985. (f) The Irrigation Regime 2.299 The mean quantities of surface and groundwater, which wlould be made available with the public project, and the comparison with the irriga- tion water availability likely to prevail if no further private tubewells were installed after 1969, are summarized in the water budget attached as Appendix 2. lWith-the project, the total water-aiiaildbility at-watercourse head would be about 2.38 MAF at the stage of full development. Of this, 1.01 MAF would be provided by public tubewells and 1.37 MAF by canal sup- plies. Some 0.61 MAF of groundwater would substitute for previous private exploitation, i.e. the net increase of groundwater availability due to the project would be about 0.40 MAF. Total surface water availability at water- course heads would increase from 0.71 MAF in 1965 to 1.37 MAF at full development, or by 0.66 MAF. The total quantity of water to be pumped to lower the water table to an average depth of ten feet wvould be about 0.20 MAF. No additional surface supplies would be admitted into the project area until the water table had been permanently lowered. ANNEX 4.1 Page 172 2.300 For the project area as a whole, the water availability per acre CCA would be enhanced from 2.65 acre feet in 1965 to 3.9 acre feet in 1985. This would support the projected increase of cropping intensity from 83 per- cent in 1965 to 150 percent in 19859, while simultaneously eliminating under- irrigation on the existing cropped acreage. 2.301 One alternative to the public tubewell project uould be further irrigation development through the continued installation of private tube- wells over the entire project area. The following table shows water avail- ability and potential intensity growth as projected for alternative forms of groundwiater development: Water Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of WUells 5,130 1/ 850 5,130 1/ 850 Surface Supplies (MAF) 1.06 1.06 1.37 1.37 Annual Pumpage (MAF) 0.89 0.89 1.02 1.01 Total Annual Watercourse Delivery (MAF) 1.95 1.95 2.39 2.38 Cropping Intensity (percent) 124 124 150 150 Acres Cropped ('000) 758 758 917 917 Acre Feet/Acres Cropped 2.6 2.6 2.6 2.6 1/ Private wells of one cusec capacity. 2.302 Provided private investment in tubewells would be forthcoming as shown above, it is evident that either private or public tubewell develop- ment aould be capable of pumping annual recharge. Both forms of development would appear capable of providing water table control and water supplies suf- ficient to eliminate under-irrigation and increase cropping intensities to about 150 percent. 2.303 It should be noted that there exists a sizeable area (approxi- mately 40 percent of the project) that would be waterlogged and require continuous mixing with surface water. Therefore, although the table above assumes that the overall pumping by the private-tubewell alternative would be adequate for taking care of recharge, there would still exist the tech- nical problem of regulating effectively the mixing required within the project. This suggests that the private tubewell alternative might not be suited for the entire project area. ANNEX 4.1 Page 173 (g) Agricultural Development 2.304 The project area is one of the few backward areas of the Bari Doab, although less so than the adjacent Dipalpur Above B.S. Link Canal Command where soil salinity is more of a problem. 2.305 The cropping intensity for the project area was estimated to be about 83 percent in 1965, compared with an average for the whole of the Bari Doab of 102 percent. The main kharif crops are rice, cotton, fodder and coarse grain. The main rabi crop is wheat, together with fodder and maize. The proportion of perennial crops - sugarcane, fruit and vegetables - is relatively low1 because of unreliable rabi irrigation supplies. The value of crop production in 1965 was estimated at Rs. 74 million, and livestock production was estimated at Rs. 42 million, giving a total Gross Production Value (GPV) of Rs. llo million (Rs. 190 per acre CCA). The total annual GPV is expected to grow to Rs. 167 million by 1970. 2.306 Considerable progress has been made in the past with the installa- tion of private tubewells. The total number installed was estimated at 1,470 in 1965, or an average of about one well per 400 acres. IACA estimates the number of private tubewells would be about 2,900 in 1970, but if a public project is implemented, further private tubewell development would stop and public wells would gradually substitute for existing private wells. The increased surface water availabilty of Tarbela supplies in the system plus public tubewell development should support the following intensity growth: Growth of Cropped Acreage Year Intensity (percent) Cropped Acreage - ('000 Acres) 1965 83 506 1970 (start of project) 102 623 1975 (project completed) 124 758 1985 150 917 1991 150 917 1/ Perennial crops counted twice. 2.307 For purposes of evaluation, the Bank Group has assessed the growth of agricultural production in the project area "with" public groundwater as well as "without" additional water development. In accordance with the cropping intensity, cropping patterns and yield growth projected for the respective cases (for details see Appendices 3 and 4), the incremental GPV would be expected to develop about as follows: ANNEX 4.1 Page 174 Growth of GPV "IWTith" and "Wlithout" Groundwater Development '"ithout"f Incremental Additional Groundwater 'With" the Project GPV Year Crops Livestock Total Crops Livestock Total Total ----------------------- (Rs. Mill.) --------------------------- 1965 74 42 116 74 42 116 _ 1970 104 63 167 104 63 167 - 1975 125 76 201 153 76 229 28 1985 181 92 273 284 168 452 179 2.308 On this basis the GPV of the project area would more than triple and the level of production would be about 65 percent higher than that of the "without" case. 1/ The GPV per acre CCA would increase from Rs. 190 (see para 2.305) to about Rs. 740 as compared to Rs. 447 per acre CCA in the "without" case. As set forth in the Bank Group's Report, Volume II, Chapter VI, non-water input levels are expected to rise substantially through- out lWest Pakistan and thus appreciable increases in on-farm expenditures would be expected in both the "with" and "without" cases. To achieve the above projected growth of production great efforts would have to be made to make available the quantities of non-water inputs required to sustain such growth. Allowing for the increased on-farm expenditures and associated cur- rent project costs, as well as deducting an allocation of benefits resulting from additional surface water absorption and drainage, 2/ the incremental Net Production Value (NPV) for reference years is expected to develop as follows over the lifetime of the project: 1/ See Appendix 4, pages 1 and 2 for detailed projectionsuof GPV,growth. 2/ A separate assessment has been made of the effects on future production if the Sukh Beas Drainage Scheme would not be implemented. Since no costs for the drainage project have been included under the tubewell project, the differential production increment has been deducted from the benefits attributable to groundwater development. ANNEX 4.1 Page 175 Incremental Net Benefits Attributable to Public Groundwater Development 17 1975 1985 1991 ----(Rs. Mill) ----- NPV 'qTith" 152 279 331 NPV "Without" 131 169 197 Incremental NPV 21 110 134_ Allocation to Surface Water 10 73 88 Allowance for Infrastructure and Services - 2 2 Increase in O&M Expenditures - 3 2 2 2 2/ Total Associated Costs 7 73 88 Incremental Net Benefits Attributable to the Project (Incremental NPV less total associated costs) 14 37 46 1/ r'or details see AppendicbsL4 and 5, pages l'an-d 2. z/ It should be noted that incremental O&M expenditures in the public tube- well project are negative, i.e. operation and maintenance costs of public tubewells are less than those that would be necessary to maintain the private wells in operation at the beginning of public tubewell construction. A comparison between the public project and the alternative private develop- ment (see Appendix 5§;-pageP2 and Appendix-6, pages 2 and 3) indicates that, after due allowance for all costs, the discounted benefits attainable from the public project in 1991 would be about the same as those from continued private well installations. (h) Farmer Incentives 2.309 The benefits obtainable under the project should provide considerable incentives for the farmers. Based on ten acres CCA, the average farm income would be expected to improve as follows: Comparison of Changes in Farm Income per Farm of 10 Acres OCA Under Alternative Forms of Development 1975 1985 1990 W/out Private Public W/out Private Public W7out Private Public Cropping Intensity (percent) 102 124 124 102 150 150 102 150 150 - GPV (Rs.) 2,144 2,488 2,488 2,766 4,566 4,566 3,224 5,417 5,417 On-Farm Expenditures (Rs.) 1,015 1,146 1,146 1,571 2,570 2,570 1,817 3,044 3,044 Water Charges V (Rs.) 333 528 396 333 546 414 333 546 h414 Total Current Expenditures (Rs.) 1,348 1,674 1,542 1,904 3,116 2,984 2,150 3,590 3,458 Farm Income (Rs.) 796 814 946 862 1,450 582 1,074 1,827 1,959 I/ Water charges pertaining to the 'Without" Additiona17Tuewell cases consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 71 (ii) O&M tubewells existing in 1972 Rs. 195 (iii) Amortization(6 percent over 10 years)of existing wells Rs. 67 TOTAL Rs. 333 Water charges for private tubewell development in 1985 consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 105 (ii) O&M for Private Tubewells Rs. 327 (iii) Amortization at 6 percent over 10 years of private wells Rs. 114 TOTAL Rs. 546 Water charges for public tubewell development consist in 1985 of the following: (i) Surface water charges at Rs. 7 per acre cropped Rs. 105 (ii) O&M and amortization (6 percent over 20 years) Rs. 309 TOT1L Rs. 414 ANNEX 4.1 Page 177 The results given in the above table are average expectations for the project area as a whole, but individual farmers with private tubewells at their dis- posal would be expected to achieve above average farm incomes because they would have flexibility of operation. In absolute terms, farmers' income with the public project would grow on average from about Rs. 950 per farm of ten acres CCA in 1975 to more than 1,900 in 1990. It should also be noted that substantial private development already exists in the area, and is projected to continue at a high rate. (i) Project Evaluation 2.310 On the basis of the modifications made to the IACA evaluation pro- cedures discussed in Chapter II A above, the Bank Group has assessed the likely results of the project as follows: Results of Project Evaluation Incremental NPV - (present worth at 8%) Rs. 192 million Benefit/Cost Ratio (at 8%) 45.0 to 1 Rate of Return: a) exclusive of potential private savings 12% b) inclusive of potential private savings 36% 1/ After allocation of benefits to additional surface water and the provision of drainage. This compares with IACA's assessment 1/ of incremental NPV (before allo- cation of benefits to surface water and drainage) of 982 million, and a rate of return on incremental costs only of 47 percent. The calculations pertaining to the Bank Group's evaluation are given in Appendix 5. 2.311 The private alternative has also been evaluated by the Bank Group in accordance with the procedures discussed in Chapter II A above. On this basis, and allowing for the provision of additionalPsurface water, because of sufficient drainage effects, continued private development Tould give a rate of return of 49 percent. This reflects the considerably lower invest- ment requirements under the private alternative. The total discounted incre- mental NPV attainable under the private alternative would be equal to that attainable under the public project. This form of development would allow savings relative to the outlays projected for public development of the entire project area to approximately Rs. 154 million. Details of the evaluation of the private alternative are given in Appendix 6, pages 1 and 2. 1/ For details of IACA's evaluation, see IACA Comprehensive Report, Volume 16, Annexure 15A, Chapter 4 (public project) and Appendix 1 (private alternative). ANNEX 4.1 Page 170 (i) Conclusion 2.312 In the absence of a detailed appraisal, the preceding analysis should be considered as indicative only. The estimated rate of return of 36 percent on total investment in the public project after deducting the benefits attributable to increased surface supplies and drainage, would support the inclusion of this project in the Action Program. On the other hand, continued private development by 1970 as projected by IACA would be about 2,400 pumps, or enough to cover the portion of the total project area underlain with fresh groundwater (less than 1,000 ppm TDS). This projection rests on the observations that extensive private coverage already exists, and active private investment in tubewells is likely to continue. The pre- sumption therefore follows that such investment is an economic use of the private resources of the farmers. Cropping intensity and the general level of production in the area of private development would be similar to that projected for the public project. A public tubewell project has been tentatively included in the Bank Group's Action Program. However, a more limited objective for public development appears feasible and should be given careful consideration in the course of project preparation. Careful monitoring of further private performance should be undertaken to determine whether private progress achieves the levels of installation and coverage projected in this review. Detailed project preparation for public develop- ment should be carried out with the objective of providing the decision basis for the scope of public development and continued private well in- stallations in portions of the project area. ANNEX 4.1 INDUS SPECIAL STUDY APPENDIX 1 Public Tubewell Project - Dipalpur Below B.S. Link *g 1 Revised Cost Estimate and Financial Requirements Local Currency Foreign Exchange Total (Rs.Mill.) (Rs.Mill.) (US$ Equiv.)2/ (Rs.Mill.) (US$ Equyv.) Project Preparation 2/ 3 2.6 0.55 5.6 1.18 Tubewell Project Tubewells 18.9 27.3 5.75 46.2 9.73 Appurtenant Structures 7.0 2.0 0.42 9.0 1.89 Watercourse Improyepent 2. 6.1 - - 6.1 1.28 Duties and Taxes -w 4.4 - - 4.4 0.93 Engineering and Administration 6 2.9 o.61 6.5 1.37 Subtotal 40.0 32.2 6.78 72.2 15.20 Contingencies 6./ 8.0 6.4 1.35 14.4 3.03 Total Tubewell Project 48.0 38.6 8.13 86.6 18.23 Electrification Distribution 2.2 3.4 0.72 5.6 1.18 Transmission 10.1 15.2 3.20 25.3 5.33 Duties and Taxes 4/ 5.6 - - 5.6 1.18 Engineering and Administration 5/ 1.8 1.9 0.40 3.7 0.78 Subtotal 19.7 20.5 4.32 40.2 8.47 Contingencies 6/ 3.9 4.1 0.86 8.0 1.68 Total Electrification 23.6 24.6 5.18 48.2 10.15 Interest During Constuction Tubewell Project 7/ 10.4 - - 10.4 2.19 Electrification 87 2.8 - 2.8 0.59 Subtotal ITW _ _ 13.2 2.78 TOTAL FINANCIAL REQUIREMENTS 87.8 65.8 13.86- 153.6 32.33 1/ Rate of exchanged used 1:4.75 2/ Estimated at 5 percent direct costs before contingencies. Estimated at Rs. 10/acre CCA. Estimated at 15 percent of Foreign Exchange component of direct costs before engineering and administration. 5/ Estimated at 10 percent of direct costs after duties and taxes. &/ Estimated at 20 percent of direct costs after duties and taxes and engineering and administration. , Estimated at 6 percent per annum for two-year period for each individual phase of tubewell construction. 8/ Estimated at 6 percent per annum for one-year period. APPENDIX 1 Pagie2 INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur Below the B.S. Link Based on Bank Group Cost Estimates 1970/71 1971/72 7/7 1974/75 TOTAL ------------------- Rs. Mi . --------- Project Preparation 5.6 - 5.6 Tubewells, Structures and Watercourses 6.5 26.0 26.0 2.8 - 61.3 Duties and Taxes 0.5 1.9 1.8 0.2 - 4.4 Engineering 0.7 2.8 2.7 0.3 - 6.5 Contingencies 1.5 6.1 6.1 0.7 - 14..4 Subtotal 9.2 36.8 36.6 4.0 - 86.6 Interest During Construction o.6 2.8 4.4 2.4 0.2 10.4 Total Tubewell Project 9.8 39.6 41.0 6.4 0.2 97.0 Electrifioation - 3.3 13.1 13.0 1.5 30.9 Duties and Taxes - 0.6 2.3 2.4 0.3 5.6 Engineering and Administration - 0.4 1.6 1.5 0.2 3.7 Contingencies 0.8 3.4 3.4 0.4 8.0 Subtotal - 5.1 20.4 20.3 2.4 48.2 Interest During Construction - .3 1.2 1.2 0.1 2.8 Total Electrification - 5.4 21.6 21.5 2.5 51.0 TOTAL FINANCIAL REQUIREMENTS 15.4 45.0 62.6 27.9 2.7 153.6 1/ Incurred prior to beginning of construction. INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur below the B.S. Link Comparative Summary Water Budget "With" the Project and "Without" Additional Tubewells 1965 1975 1985 Net Increase "With the Project "With" "Without" "With" "Wlithout" the Additional the Additional Surface Ground- Existing Project Tubewells Project Tubewells Water water Total Surface Supplies:_________------------__------------------(MAF) -------------------------------------- Surface Supplies:-(A- Total: 0.71 1.06 0.71 1.37 0.71 0.66 - 0.66 ________ -- __________________________________--___________________________________________________ --__________________ Thereof during October to May:-/ 0.12 0.47 0.12 0.69 0.12 0.57 - 0.57 Groundw.ater Supplies: 0.38 0.89 0.61 ' 1.013/ 0.61 2 - 0.40 0.40 Total Supplies: 1.09 1.95 1.32 2.38 1.32 0.66 0.40 1.06 _ = ,,-. 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 2,900 private tubewells in operation by 1970 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.38 MAF) as well as those of further increase in private groundwater extraction. Ir PUBLIC TUBEWELL PROJECT: DIPALPUR BELOW B.S. LINK WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) CANAL >1 WATER COURSE-+-< FIELD TRANSPIRATION EVAPORATION I EVAPORATION I EVAPORATION 1 80 RAIN '1~ - 029 R O P 2 .j I 72 1 37 2.38 2.14 151 RIVER RECHARGE 0 RE- IN CHARGE IRRIGATION RECHARGE RECHARGE PUMPING .1 .29 04~~~~~~~~~01 1.01 GROUND WATER RESERVOIR O -u z m M z x DRAINAGE2 PUMPING (R) IBRD - 3324 m ANNEX 4.1 APPENDIX 3 Page 1 INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur Below B.S. Link Yield Projections "With" the Project (Maunds per acre) Present IACA P r o J e c t i o n Bank Group Projection 1965 1970L9 IL7 1905 2000 1970 1975 194$F 2000 Kharif: Fine Rice 16.0 16.6 21.5 30.0 40.0 17.7 20.7 30.0 40.0 Coarse Rice 18.0 19.0 25.0 38.0 50.0 19.9 23.3 34.0 50.0 Cotton 8.0 8.8 12.0 17.0 22.0 8.8 10.3 15.1 220.0 Maize 13.0 13.8 17.0 26.0 38.0 14.3 16.8 24.5 38.0 Fodder 220.0 235.0 320.0 430.0 550.0 242.9 284.4 412.6 550.0 Pulses 6.o 6.3 7.5 10.0 14.0 6.6 7.8 11.2 14.0 Others 6.o - - - - - - - - Jowar 7.0 - - - - - - - - Rabi: Wheat 13.0 14.3 20.0 28.5 35.0 14.3 16.8 26.7 35.0 Fodder 540.0 550.0 700.0 840.0 1000.0 596.2 698.1 993.8 1000.0 Oilseeds 6.5 6.7 8.0 12.0 16.0 7.2 8.4 12.2 16.0 Gram 8.5 8.6 10.0 14.0 18.0 9.4 11.0 15.8 18.0 Pulses 6.0 - - - - - - - - Others 6.o - - - - - - - - Maize 13.0 13.8 17.0 26.0 38.0 14.3 16.8 24.5 38.0 Perennials: Sugarcane (Gur) 33.0 36.0 50.0 65.0 80.0 36.4 42.6 61.8 80.0 Fruit 80.0 75.0 60.0 130.0 170.0 88.3 102.0 130.0 170.0 Vegetables 140.0 145.0 170.0 200.0 250.0 145.0 170.0 200.0 250.0 APPENDIX 3 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur below the B.S. Link Yield Projections "Without" Additional Tubewells (Maunds per Acre) Present IACA Projection Bank Group Projection 1965 1970 1975 1985 2000 1970 1975 1985 2000 Kharif: Fine Rice 16.0 16.6 18.0 21.0 32.0 17.7 20.7 30.0 40.0 Coarse Rice 18.0 19.0 20.0 27.0 40.0 19.9 23.3 34.0 50.0 Cotton 8.0 8.8 9.4 11.0 14.5 8.8 9.7 11.9 16.0 Maize 13.0 13.8 14.0 15.5 18.0 14.3 15.8 19.3 26.0 Fodder 220.0 235.0 250.0 260.0 320.0 242.9 268.2 326.9 4404.o Pulses 6.o 6.3 6.5 7.2 9.0 6.6 7.3 8.9 12.0 Other 6.0 - - - - - - - - Jowar/Bajra 7.0 - - - - - - - - Rabi: Wheat 13.0 14.3 15.3 17.0 23.0 14.3 16.8 26.8 35.0 Fodder 540.0 550.0 560.0 650.0 750.0 596.2 658.3 802.4 1080.0 Oilseeds 6.5 6.7 6.9 8.5 11.0 7.2 7.9 9.7 13.0 Gram 8.5 8.6 8.8 11.5 14.0 9.4 10.4 12.6 17.0 Maize 13.0 13.8 14.7 17.5 21.0 14.3 15.8 19.3 26.0 Pulses 6.0 - - - - - - - - Other 6.0 - - - - - - - - Perennials: Sugarcane (Gur) 33.0 36.0 39.0 46.0 56.0 36.4 42.6 61.8 80.0 Fruit 80.0 75.01/ 85.0 105.0 130.0 88.3 102.0 130.0 170.0 Vegetables 140.0 145.0 150.0 170.0 200.0 154.6 170.0 200.0 250.0 1/ Yields take account of increased acreage, not all of which will be bearing-fruit. z; I N D U S S P E C I A L S T U D Y Public Tubewell Project - Dipalpur Below B.S. Link Revised Projection of Production "WITH' the Project 1975 1985 1991 Cropped Yields Production GPV Cropped Yields Production GPV Cropped Yields Production GPV Acres (mds/acre) ('000 mds) (Rs mill) Acres (Mds/acre) (tOO mds) (Rs mill) Acres (mds/acre) (t000 mds) (Rs sall) KHARIF Coarse Rice 18,300 23.3 426.4 3.688 12,200 34.0 414.8 3.588 12,200 39.6 483.1 4.179 Fine Rice 30,100 20.7 623.1 9.128 48,900 30.0 1,1467.0 21.192 48,900 33.6 1,643.0 24.070 Cotton 111,000 10.3 1,143.3 34.299 146,600 15.1 2,213.7 66.411 183,300 17.5 3,207.8 96.234 Maize 18,300 16.8 307.4 5.687 24,400 24.5 597.8 11.059 30,600 29.2 893.5 16.530 Fodder 97,800 284.4 27,814.3 - 110,000 412.6 45,386.o - 122,200 462.8 56,554.2 - Pulses 12 200 7.8 95.2 1.999 211o400 11.2 273.3 5.739 24 400 12.2 297.7 6.252 Sub-Total 5 3 6 6 , 5 0 0 1077.24605 RABI Wheat 244,400 16.8 4,1C5.9 53.377 244,400 26.7 6,525.5 84.832 189,400 29.7 5,625.2 73.128 Fodder 79,400 698.1 55,429.1 - 91,700 993.8 91,131.5 - 97,800 996.2 97,428.4 - Oilseeds 18,300 8.4 153.7 3.612 18,300 12.2 223.3 5.248 18,300 13.6 248.9 5.849 Gram 30,500 11.0 335.5 4.781 24,400 15.8 385.5 5.493 12,200 16.7 203.7 2.903 Maize 6,100 16.8 102.5 1.896 18,300 24.5 448.4 8.295 18,300 29.2 534-4 9.886 Green Manure 24 400 .- - 55,000 - - - 61 100 - Sub-Total b03:100 63.66 452,100 103.7db 97 91.766 Perennial Sugar Cane 21,400 42.6 911.6 16.409 24,400 61.8 1,507.9 27.142 18,300 68.5 1,253.6 22.565 Fruit 5,900 102.0 601.8 6.620 12,200 130.0 1,586.0 17.446 18,300 168.8 3,089.0 33.979 Vegetables 6 100 170.0 1,037.0 11.1407 12 200 200.0 2,440.o 26.8ho 12 200 218.6 2,666.9 29.336 Sub-Total 99L,o 34-43° W'7,3 71e =4 57 GPV of Crops 152.903 283.585 324.911 Animal HusbendryY 75.500 168.400 210.900 Total GPV 229.403 451.985 535.811 On-Farm Costs2 72.769 162.714 192.892 Total NPV 156.6314 289.271 342.919 1/ Based on IACA projectLon but reduced proportionately for 1975 and 1985 in keeping with reduction of yield levels, includLng those of fodder. 2/ 1975 - 32% of GPV 1985 - 36% of GPV 1991 - 36% of GOV I N D U S S P E C I A L S T U D Y Public Tubewell Project - Dipalpur Below B.S. Link Revised Projection of Production 'tWITHOUT" the Project 1973 1975 1985 1991 Cropped Yields Production GPV Yields Production GPV Yields Production GPV Yields Production GPV Acres (mds/acre) (1000 mds) (Rs.nill) (mds/acre) (1000 mds) (Rs.iill) (mds/acre) (1000 mds) (Rs.mell) (eds/acre) ('000 mds) (Rs.rrll) KHARIF Coarse Rice 18,300 20.7 378.8 3.977 23.3 426.14 3.688 314.0 622.2 5.382 39.6 7214.7 6.269 Fine Rice 27,500 18.1, 506.0 8.602 20.7 569.2 8.339 30.0 825.0 12.086 33.6 9214.0 13.537 Cotton 91,700 9.2 81,3.6 25.308 10.3 9U, .5 28.335 15.1 1,381t.7 141.5151 17.5 1,604.8 148.1,4 Maize 15,200 ]1.9 226.5 h.190 15.8 2h0.2 1L,.LL 19.3 293-1, 5.428 21.7 329.8 6.101 Fodder 85,500 252.8 21,611i.4, - 268.2 22,931.1 - 326.9 27,950.0 - 368.1 31,1072.6 - Pculses 8 600 6.9 59.3 1.2145 7.3 62.8 1.319 8.9 76.5 1.606 10.0 86.0 1.806 Sub-Total m916,oO cb6.125. 8 5 7 RABI Wheat 206,700 ]i4.9 3,050.0 39.650 16.8 3,139.0 L,1..707 26.7 5,1,65.5 71.052 29.7 6,079.6 79.035 Fodder 73,300 620.5 45,182.6 - 658.3 1h8,253.1, - 802.1 58,815.9 - 903.1, 66,219.2 - Oilseeds l1,ooo 7.5 105.0 2.A68 7.9 110.6 2.599 9.7 135.8 3.191 10.9 152.6 3.586 Gram 28,700 9.8 281.3 h.008 10.14 298.5 1h.254, 12.6 361.6 5.1 3 11h.2 1,07.5 5.807 Maize 3 100 1h.9 146.2 .855 1,5.8 19.0 .906 19.3 59.8 1.106 21.7 67.3 1.2145 Sub-Total 325,BM 7F.9g1 52.46 o9.673 PERENNIAL Sugar Cane 18,300 37.9 693.6 12.1,85 142.6 779.6 1Il.033 61.8 1,130.9 20.356 68.5 1,253.6 22.565 Fruit 3,700 9IJ.5 3149.6 3.84,6 102.0 377.1, .1-51 130.0 4,81.0 5.291 168.8 624.6 6.871 Vegetables 1h,200 160.9 675.8 7.1431 170.0 71J.0 7.851, 200.0 810o.o 9.21tO 218.6 918.1 10.099 Sub-Total 5. 2.765 26.0 31180 39.535 GPV of Crops t114.068 1214.629 181.132 205.065 68.1 / 75.5 92.2 113.0 Total GPV 182.168 200.129 273.632 318.065 On-Farm Costs&Y 58.2914 64,.011 98.508 114,.503 Total NPV 123.871, 136.088 175.121, 203.562 1/ Based on IACA projection. '/ 1973 - 32% of GPV 1! 1975 - 32% of GPr7 V4 1985 - 36% of GPV 1991 - 36% of GPV INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur - Below B.S. Link Calculation of Rate of Return Attributable Increment I1 Including NPV Cost of- Incremental NPV Potential Potential Capital Rate of Return NPV "WITH, "WITROUT" Incremental Additional after Allocation Infrastructure 0 & M Attributable Private Private Costs Net Benefits Project costs Year the Project- the Project NPV / Surface Water to Surface Water and Services8/ Costs Increment_/ Savings Savings of Project at 12% 3/ at 36% hi at 12% / at 36% vi (Rs.mi1lon ) 1971 - - - - - - - - 14.9 14.9 14.3 - 10.9 12.8 10.5 1972 123.9 123.9 - - - 0.97 -1.0 14.9 13.9 34.9 -0.8 7.5 28.0 18.8 1973 127.8 127.8 - - - 5.o5 - 5.1 14.9 9.8 34.8 -3.7 3.9 25.0 13.8 1974 138.4 131.8 6.6 - 6.6 0.2 8.33 -1.9 14.9 13.0 3.8 -1.2 3.8 2.4 1.1 1975 149.2 136.1 13.1 7.2 5.9 0.2 8.74 - 3.0 14.9 11.9 - 1.7 2.5 1976 164.7 139.6 25.1 13.7 11.4 0.4 8.94 2.1 14.9 17.0 1.1 2.7 1977 178.7 143.2 35.5 19.5 16.0 o.6 8.94 6.5 14.9 21.4 3.0 2.5 1978 193.6 146.8 46.8 25.8 21.0 0.7 9.14 11.2 14.9 26.1 4.6 2.2 1979 206.6 150.6 56.0 31.6 24.4 0.9 9.24 14.3 14.9 29.2 5.3 1.8 1980 220.4 154.5 65.9 38.0 27.9 1.0 9.34 17.6 14.9 32.5 5.8 1.5 1981 233.5 158.4 75.1 44.4 30.7 1.1 9.34 20.3 14.9 35.2 6.o 1.2 1982 245.7 162.5 83.2 50.1 33.1 1.2 9.34 22.6 14.9 37.5 6.o 0.9 1983 256.7 166.6 90.1 55.1 35.o 1.2 9.44 24.4 14.9 39.3 5.8 0.7 1984 268.3 170.9 97.4 59.6 37.8 1.3 9.64 26.9 14.9 41.8 5.7 o.6 1985 279.2 175.1 104.1 63.9 40.2 1.4 9.64 29.2 14.9 44.1 5.6 0.4 1986 287.2 179.6 107.6 66.1 41.5 1.5 9.64 30.4 14.9 45.3 5.2 0.3 1987 295.4 184.2 1i..2 68.3 42.9 1.5 9.84 31.6 14.9 46.5 4.8 0.2 1988 303.9 188.9 115.0 70.6 44.4 1.6 9.84 33.0 14.9 47.9 4.5 0.2 1989 312.7 193.8 118.9 72.5 46.4 1.6 9.84 35.0 14.9 49.9 4.3 0.1 1990 321.6 198.7 122.9 75.5 47.4 1.7 9.84 35.9 14.9 50.8 3.9 0.1 1991 330.9 203.6 127.3 78.2 49.1 1.7 9.84 37.6 14.9 52.5 3.7 0.1 67.8 44.3 68.2 44.3 Rate of Ret,n2/ . 12% Rate of Returnm_/ - 36% 1/ Charged at average value per acre foot of total incremental water availability: Incremental Value/acre foot Incremental Water of Incremental NPV Availability Ava*ilaity (Rs.d . )--1 (MAF) (R.) 1975 13.1 0.63 20.8 1980 65.9 1.01 65.2 1985 104.1 1.06 98.2 1991 127.3 1.06 120.1 Absorption of surface water based on IACA intensity projecticms beginning in 1975 at 0.345 MAy to 1991 at 0.667 MAF. 2/ Allowance for public expenditures on infrastructure and intensified technical and advisory services. The allowance includes: 1.85% of attributable increment for roads. IDa 1.65% of attributable increment for supporting services. Charged on incremental NPV after allocation to surface water only. 3/ Excluding Potential Private Savings. 4/ Including Potential Private Savings. 5/ NPV reduced by 3.5% to take account of increases resulting frr improvements in drainage. INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur Below the B.S. Link Benefit: Cost Ratio Incremental NPV Project Costs In- After Allocation cluding 0&M, Services, Discounted at 8% Year to Surface Water and Infrastructure Benefits Costs (Rs. Mil.)-_____ 1/ 2/ 1/ 2/ 1971 14.3 - o.6 _ 13.2 - 0.5 1972 35.9 21.0 - 30.8 18.0 1973 39.9 25.0 - 31.7 19.9 1974 6.6 12.3 - 2.6 4.9 9.0 - 1.9 1975 5.9 8.9 - 6.0 4.0 6.1 - 4.1 1976 11.4 9.3 - 5.6 7.2 5.9 - 3.5 1977 16.0 9.5 - 5.4 9.3 5.5 - 3.2 1978 21.0 9.8 - 5.1 11.3 5.3 - 2.8 1979 24.4 10.1 - 4.8 12.2 5.1 - 2.4 1980 27.9 10.3 - 4.6 12.9 4.8 - 2.1 1981 30.7 10.4 - 4.5 13.2 4.5 - 1.9 1982 33.1 10.5 - 4.4 13.1 4.2 - 1.7 1983 35.0 10.6 - 4.3 12.9 3.9 - 1.6 1984 37.8 10.9 - 4.0 12.9 3.7 - 1.4 1985 40.2 11.0 - 3.9 12.7 3.5 - 1.2 1986 41.5 11.1 - 3.8 12.1 3.2 - 1.1 1987 42.9 11.3 - 3.6 11.6 3.1 - 1.0 1988 44.4 11.4 - 3.5 11.1 2.9 - 0.9 1989 46.4 11.4 - 3.5 10.8 2.6 - o.8 1990 47.4 11.5 - 3.4 10.2 2.5 - 0.7 1991 49.1 11.5 - 3.4 9.8 2.3 - 0.7 192.1 153.8 4.4 B/C ratio at 8% 1/ = 1.3 B/C ratio at 8% 2/ = 45.0 _/ 1/ Before deduction of Potential Private Savings 2/ After deduction of Potential Private Savings 3/ If potential private savings are added to benefit stream rather than netted out from cost stream, the Benefit/Cost ratio would be 2.2; that is, Present worth of benefits: 192.1 341.7 Present worth of savings : 149.6 B/C ratio 153.8= 2.2 Total 3214.7 INDUS SPECIAL STUDY Public Tubewell ProJect - Dipalpur Below the B.S. Link Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Incremental Wells in Wells during Project Replacement of Incremental Number of Water Availability Year Operation / Period Additional Wells Wells in Operation (MAF) 1965 11, 70 1966 :1,7,614, 1967 2,117 1968 2,i54P 1969 3,,048 1970 3,658 610 610 0.14 1971 3,914 256 866 0.19 1972 4,188 27h 1,140 0.26 1973 4,481 293 1,1433 0.32 1974 4,795 3114 1,747 0.39' 1975 5,130 335 2,082 0.47 1276 5,130 - 2,082 0.47 1977 5,130 2,082 0.47 1978 5,130 2,082 0.47 1979 5,130 2,082 0.47 1980 5,130 610 2,082 0.47 1981 5,130 256 2,082 0.47 1982 5,130 274 2,082 0.47 1983 5,130 293 2,082 0.47 1984 5,130 314 2,082 0.47 1985 5,130 335 2,082 0.47 1986 5,130 - 2,082 0.47 1987 5,130 - 2,082 0.47 1988 5,130 - 2,082 0.47 1989 5,130 - 2,082 0.47 1990 5,130 610 2,082 0.147 1991 5,130 256 2,082 0o47 1/ Rate of installation: 20% p.a. compound growth between 15965 and 1970. This rate of installation accepts the 7% p.a. compound growth between 1970 and 1975. ceiling for coverage with private tube- r wells stated in the IACA project report. H 2/ Assume rate of average utilization: 30% Each well would pump for about 2,630 hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Project - Dipalpur Below the B.S. Link Rate of Return of Private Tubewen Alternative Incremental NPV Infra- Benefit Cost Ratio Rate of Return After Allocation structure 0 & M2 Capit Total Costs Benefits Costs at Benefits Year to Surface ,,Water & Serv,i,ces- Costs- Costs- Costs at 8% at 8% 25.4% at 25.4% ------- (Rs. Mill.T ---- 1970 - 2.4 6.1 8.5 7.8 _ 6.8 - 1971 - 3.4 2.6 6.o 5.1 _ 3.8 1972 4- - .4 2.7 7.3 5.8 - 3.7 - 1973 6t 0.2 5.6 2.9 8.7 6.4 4.9 3.5 2.7 1974 5.9 0.2 6.8 3.1 10.1 6.9 4.0 3.3 1.9 1975 n.4 0.4 8.1 3.3 11.8 7.4 7.2 3.0 2.9 1976 16.0 o.6 8.1 - -8.7 5.1 9.3 1.8 3.3 1977 21.0 0.7 8.1 - 8.8 4.8 11.3 1.4 3.4 1978 24.4 0.9 8.1 - 9.0 4.5 12.2 1.2 3.2 1979 27.9 1.0 8.1 - 9.1 4.2 12.9 0.9 2.9 1980 30.7 1.1 8.1 6.1 15.3 6.6 13.2 1.3 2.5 1981 33.1 1.2 8.1 2.6 11.9 4.7 13.1 0.8 2.2 1982 35.0 1.2 8.1 2.7 12.0 4.4 12.9 o.6 1.8 1983 37.8 1.3 8.1 2.9 12.3 4.2 12.9 0.5 1.6 1984 40.2 1.4 8.1 3.1 12.6 4.0 12.7 0.4 1.3 1985 41.5 1.5 8.1 3.3 12.9 3.8 12.1 0.3 1.1 1986 42.9 1.5 8.1 - 9.6 2.6 11.6 0.2 0.9 1987 44.4 1.6 8.1 - 9.7 2.4 11.' 0.2 0.8 1988 46.4 1.6 8.1 - 9.7 2.2 10.8 0.1 o.6 1989 47.4 1.7 8.1 - 9.8 2.1 10.2 0.1 0.5 1990 49.1 1.7 8.1 6.1 15.9 3.2 9.8 0.1 0.4 98.2 192.1 B/C Ratio at 8% = 2.0 / Based on a charge of 3.5% of incremental NPV as under public tubewell program. Based on average annual O&M costs per tubewell of Rs. 3,900. 3/ Based on average cost per tubewell of Rs. 10,000 and assumed rate of installation. (See Annex 8, page 1) ANNEX 4.1 Page 179 12. The Sukkur Right Bank Project - (a) The Project 2.313 The project area comprises those parts of the Northwest (155,000 acres) and Dadu North (118sCOO acres) Canal Comunands underlain by groundwater con_- taining less thar.-2,000 ppm TDS (see Map). The project wculd provide additional irrigation supplies and water table control for 273,000 acres CCA lying along the right bank of the Indus River. Most of the project area (85 percent) is served by the Northwest and Dadu Canals, which provide perennial surface water supplies from the Sukkur Barrage on the Indus. The remaining 15 percent of the area receives non-perennial supplies from the Rice Canal, also served by the Sukkur Barrage, and from the Begari Sind Canal served by the Gudu Barrage. The channels served by Rice and Begari Sind Canals will, in the future, be brought into the Northwest Canal system. Indus flows are allocated according to the Sind-Punjab Draft Agreement which gives high priority to withdrawals at Sukkur. The distribution of the groundwater quality is as follows: Groundwater Quality Zones of the Project Groundwater Quality Zone Project Area Percent '000 Acres Less than 1,000 ppm TDS 59 160 1,000 to 2,000 ppm TDS 41 113 TOTAL 100 273 Approximately 264,810 acres (or 97 percent of the project area) has a water table less than ten feet from the surface. All the presently cultivated land is classed as moderately affected by salinity, and salt content of the soil is high. Twenty-one percent of the area has been abandoned, either as a result of rising water tables or excessive salinity, and 14 percent has never been cultivated (classed as being severely affected by salinity). These conditions, which eliminate 36 percent of the project area, have retarded agricultural development within the area. 2.314 Land tenure data available for the Northwest, Rice and Dadu Canal area shows the distribution of farm size and land tenure to be as follows: 1/ IACA Comprehensive Report, Volume 20, Annexure 15J. ANNEX 4.1 P-age 1X5- Farm Size and Land Tenure Situation Percent Percent of Farm Size of Farms Farm Area Less than 5 Acres 40 10 5 to 25 Acres 53 53 Over 25 Acres 7 37 Owner Operated 19 21 Owner Cum Tenant 11 21 Tenant Operated 70 58 2.315 The project would increase the water availability in the area from 0.95 MAF in 1965 to 1.32 IAF at full development in 1985. The increase in irrigation supplies of 0.37 NA-F would be sufficient to support a growth in cropped acreage from the present level of 304,000 acres (111 percent intensity 1/) to 410,000 cropped acres in 1985 (150 percent intensity). (b) Physical Works 2.316 The physical works of the project would consist of the installa- tion of some 820 public tubewiells and appurtenant works. Of these, 480 wells of three cusec capacity would be in the fresh groundwater zone of the project area (59 percent, or 160,000 acres CCA) and 340 wells of two cusec capacity in the zone underlain by groundwater (41 percent, or 113,000 acres CCA) requiring mixing with surface_ water (1,000 - 2,000 ppm TDI). 2.317 Necessary channels to watercourses, stilling and mixing chambers wiould have to be constructed for each of the tubewells. The conveyance of quantities of water under the project so much larger than presently supplied by tubew-ells and through canal outlets to the field, would require the improvement of existing watercourses. The Bank Group therefore considers it prudent to make provision for such improvements, and has added a token amount of Rs. 10 per acre CCA to its revised cost estimates. (c) Construction Schedule 2.318 The installation of the public tubewells would extend over four years in accordance with the following schedule: 7_ Perennials counted twice. ANNEX 4.1 Page 182 Details of the cost estimates are given in Appendix 1, page 1. The foreign exchange component of the project would be about 43 percent of total project costs, or about US$ 11.1 million equivalent. 2.320 Expenditures would be spread over approximately four years in accordance with the following schedule: Summary Expenditure Schedule Based on IACA's Proposed Construction Schedule -____-_-___ (Rs. Mill) ------------------- 1973/74 1974/75 1975/76 1976/77 Tubewells and Associated Works 20.5 33.2 27.0 1.4 Electrification - 8.7 17.2 13.6 TOTAL 20.5 41.9 44.2 15.0 A more detailed expenditure schedule is given in Appendix 1, page 2. (e) Recovery of Project Expenditures 2.321 On the basis of the above cost estimates, a preliminary assessment has been made of the charges required to recover total project costs over the lifetime of the project. Including operation and maintenance expenditures, the average annual rate of recovery would have to be about Rs. 14.0 million as shown below: Annual Costs for Operation, Maintenance and Recovery of Capital Annual Costs (Rs. Mill) Capital Costs -/ (Annuity at 6% over 20 years for Rs. 82.1 million) 7.2 Annual Staff and Maintenance Costs 2 (Including repairs, electricity and recovery of power investment) 6.8 TOTAL 14.0 1/ Based on recovery of project investment including project preparation and interest during construction but without costs of electrification. 2/ Average annual costs based on weighted average over lifetime of the project. ANNEX 4.1 Page 181 Preliminary Construction Schedule as Proposed'by IACA 1973/74 1974/75 1975/76 1976/7 --------- (Number of Wells) -------- Drilling of WpJells and Construction of Structures 180 360 280 - Electrification 180 360 280 Wells in Operation 180 540 820 Construction of the tubewell part of the project would thus be completed early in the Fifth Plan period. LIP 1/ has carried out detailed investiga- tions in the project area, and has given this project area a high priority. LIP has also proposed that construction of the tubewell project begin in 1973 and, on the basis of their stuides, it should be possible to begin construction by that date since little additional investigation would be necessary. (d) Cost Estimates and E2Lpenditure Schedule 2.319 The total cost of the project has been estimated by the Bank Group at about Rs. 121.6 million (US$ 25.6 million equivalent). This would include the following: Summary Cost Estimates Local Foreign Currency Exchange Total ----------- (Rs. Mill) -------- Project Preparation 2.3 2.1 4.4 Tubewells 16.1 21.9 38.0 Electrification 9.3 14.5 23.8 Other Civil Works 8.9 2.0 10.9 Subtotal 36.6 40.5 77.1 Overheads 12.3 3.8 16.1 Contingencies 9.3 8.5 17.8 Subtotal 21.6 12.3 33.9 Interest During Construction 10.6 - 10.6 TOTAL 68.8 52.8 121.6 1/ Lower Indus Project ANNEX 4.1 Page 183 This would be equivalent to about Rs. 51 per acre CCA, or Rs. 34 per cropped acre at the stage of full development. Existing water rates average about Rs. 8 per cropped acre. Future water rates to recover total project costs, including O&M and plus existing charges for surface supplies, vnuld have to be of the order of Rs. 42 per cropped acre, or approximately Rs. 62 per acre CCA. This would be about one-quarter of the expected net value of production in 1985. (f) The Irrigation Regime 2.322 The mean quantities of surface and groundwater which would be made available with the project, and the comparison with the irrigation water likely to become available if no further private tubewells are installed after the beginning of the project (in 1973), are summarized for 1975 and 1985 in the water budget attached as Appendix 2. Groundwater exploitation by existing private tubewells is expected to discontinue once the project is implemented. The total water availability at watercourse head under the public project would be about 1.32 MAF at the stage of full development. Of this, 0.72 MAF would be provided by public tubewells and 0.60 MAF by canal supplies. Because some 0.04 MAF of groundwater would substitute for private exploitation expected by 1975 "without" additional water development, the net increase of groundwater availability due to the project would be about 0.68 MAF. Total surface water for irrigation would, however, be reduced from 0.94 MAF to 0.60 MAF. The total amount of water available for irrigation would thus be increased by about 0.34 1MAF. 2.323 For the project area as a whole, the water availability would be enhanced from 3.5 acre feet per acre CCA in 1965 to 4.8 acre feet per acre CCA in 1985. This would enable an increase of cropping intensity from 111 percent in 1965 to 150 percent in 1985 at full delta (i.e., as a weighted average for the project area). 2.324 As an alternative to the public tubewell project, further irriga- tion development could take place through the continued installation of private tubewells. The following table shows water availability and potential intensity growth as projected for these alternative forms of development: ANNEX 4.1 Page 18TF Water Availability and Cropping Intensity (1975 and 1985) Under Alternative Forms of Groundwater Development 1975 1985 Private Public Private Public Number of' Wells 430 540 993 - 820 Surface Supplies (MAF) 0.94 0.50 0.94 o.60 Annual Pumpage (MAF) 0.10 0.64 0.22 0.72 Total Annual Watercourse Delivery (rMAF) 1.04 1.14 1.16 1.32 Cropping Intensity (percent) 116 118 130 150 Acres Cropped (1000) 317 321 355 410 Acre Feet/Acres Cropped 3.3 3.6 3.3 3.2 I7-Private wells of one cusec capacity. The table indicates that private groundwater development would not be capable of pumping more than a third of the annual recharge, and would therefore be unable to provide sufficient control of the water table. Consequently, water availability under the private alternative would support an intensity of only 130 percent at full delta, or about 55,000 cropped acres less than under public development. (g) Agricultural Development 2.325 The cropping intensity for the project area in 1965 was estimated to be around 111 percent. The project area has, at present, a low level of development and is severely affected by salinity and a high groundwater table affecting nearly the whole of the project. 2.326 Although climatic conditions in the area favor cotton as a kharif crop, it is not grown because of the groundwater table conditions, and rice is the dominant kharif crop in the project area. The standard of rice hus- bandry is relatively good, and much care taken over its cultivation. The major problem is the yield variation arising out of the difficulty of trans- planting at the optimum period. The main rabi crops are wheat, fodder and grain. Irrigated crops are grown on land not used for rice, with wheat as the principal crop. Vegetables and fodder (berseem) are also raised on irrigated land. A leguminous second, or dubari, crop is grown without irri- gation on land that had been used for rice. This develops on the moisture ANNEX 4.1 Page 185 remaining in the soil after the rice crop, and such cropping assists in lowering the water table. Small acreages of fruit and sugarcane are grown as perennial crops, but these are not an important part of the cropping pattern. 2.327 The basis for the public tubewell projection has been the gradual replacement of rice by cotton and an increase in wheat acreage. Cotton, intro- duced at the start of the project, would be progressively increased until by 1994 the cotton acreage is expected to exceed that of rice by at least 75 percent. W11heat acreage would increase immediately after the tubewells begin operation, and would ultimately be approximately equal to the total cotton and rice acreage. An increase is projected for the perennial crops of fruit, vegetables and sugarcane, taking into account the growing demand for these crops in the Province and the existing marketing system. IACA's estimates indicate that the 1965 value of crop production was of the order of Rs. 35 million, andthe value of livestock production was Rs. 18 million, giving a total Gross Production Value (GPV) of Rs. 53 million. This would average about Rs. 194 per acre of CCA. Between 1965 and 1971 total GPV is expected to grow to PRs. 68 million. 2.328 During the pre-project period agricultural development within the project would be expected to continue at the present trend. The number of private tubewiells, according to IACA, would increase from 40 in 1965 to about 310 in 1973. Further private tubewell development would cease after the start of the project, and public tubewells would gradually substitute for existing private wells. The increased water availability under public tubewell development would support the following intensity growth: Growth of Cropped Acreage Under Public Development l/ Intensity Cropped Acreage Year Percent ('000) 1965 111 304 1973 (start of project) 113 308 1975 118 321 1985 150 410 1994 150 410 1/ Perennials counted twice. As stated earlier, continued private groundwater development would support a cropping intensity of only 130 percent at full delta. ANNEX 4.1 Page 186 2.329 The Bank Group has made an assessment of the growth of agricultural production in the project area "with" public groundwater development as well as "without" additional water development. In accordance with the cropping intensity, cropping patterns and yield growth projected for the respective cases (see Appendices 3 -and 4,for details), the total incremental GPV would be expected to develop as follows: Growth of GPV "With" and "Without" Groundwater Development "IrWithout" Incremental Additional Groundwater "With" the Project GPV Year Crops Livestock Total Crops Livestock Total Total -_-_-_--------------- (Rs. Mill.)--- -------------------- 1965 35 18 53 35 18 53 -- 1973 41 27 68 41 27 68 -- 1975 39 28 67 40 28 68 1 1985 59 39 98 79 39 118 20 The GPV "with" the project would nearly double over the life of the project, and the level of production ,ould be 21 percent greater than in the "without" case. 1/ The GPV per acre CCA would increase from Rs. 194 in 1965 to Rs. 432 in 1985, as compared to Rs. 360 per acre CCA in the "without" case. 2.330 As set forth in the Bank Group's Report, Volume II, Chapter VI, input levels are expected to rise substantially throughout West Pakistan, and thus appreciable increases in on-farm expenditures would be expected in both the "with" and "without" cases. To achieve the above projected growth of production, great efforts would have to be made to make available the quantities of non-water inputs required to sustain such growth. Allowing for increased on-farm expenditure and associated current project costs, as well as adding the benefits due to savings in surface water use, the incre- mental Net Production Value (NPV) for reference years would be expected to develop as follows: 1/ Detailed projections of the GPV growth at constant prices for the "with" and "without" cases are given in Appendix 4, pages 1 and 2. ANNEX 4.1 Page 187 Incremental Net Benefits Attributable to Public Groundwater Development 1/ 1975 1985 1994 ---- (R7s-7Mill) --- NPV "With" 46 75 119 NPV "Without" 45 63 88 Incremental NPV 1 12 31 Allowance for Savings of Surface Water - 13 31 Total Incremental NPV and Savings 1 25 62 Allowance for Infrastructure and Services - 1 2 Increase in O&M Expenditure 1 6 6 Total Associated Costs 1 -7 -8 Incremental Net Benefits Attributable to the Project (total incremental NPV and Savings less total associated costs) Nil 18 54 1/ For details see Appendix 4h;pdges l-and 2. A comparis6n with the alternative of private tubewell development (see Appendix 6, pages 2-and 3) indicates that, afterAdu&-allowance for all costs, the total discounted incremental net benefits attainable from the public tubewell project would be nearly four times greater than from continued private well installation. (h) Farmer Incentives 2.331 The benefits obtainable under the project should provide con- siderable incentives for the farmers. Based on ten acres CCA, an average farm income would be expected to improve as follows: Average Changes in Farm Income per 10 Acres CCA Within the Project Area Under Alternative Forms of Developmnt 1975 1985 1994 W/out Private Public W7out Private Pabllc W/out Private Public Cropping Intensity (percent) 113 116 118 113 130 150 113 130 150 GPV (Rs.) 2,450 2,520 2,490 3,590 4,007 4,320 5,050 5,850 6,800 On-Farm Expenditure (Rs.) 780 800 800 1,290 1,440 1,550 1,820 2,110 2,450 Water Charges 1" (Rs.) 127 272 596 127 280 618 127 280 618 Total Current Expenditure (Rs.) 907 1,072 1,396 1,417 1,722 2,168 1,947 2,390 3,068 Farm Income (Rs.) 1,543 1,448 1,094 2,173 2,285 2,152 3,103 3460 3732 1/ Water charges for the "Without" case consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 79 (ii) O&M of tubewells existing in 1973 Rs. 36 (iii) Amortization at 6 percent over ten years of existing wells Rs. 12 TOTAL Rs. 127 Water charges for full private tubeweIl development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 90 (ii) O&M for private tubewells Rs. 141 (iii) Amortization at 6 percent over ten years of private tubewells Rs. 49 TOTAL Rs. 280 Water charges at full public tubewell development consist of: (i) Surface water charges at Rs. 7 per acre cropped Rs. 105 (ii) OM and amortization at 6 percent over 20 years Rs. 513 TOTAL Rs. 618 ANNEX 4.1 Page 189 2.332 It should be noted that the results shown in the above table are only averages for the project area. Individual farmers with private tube- wells at their disposal would be expected to achieve, or exceed, the average farm incomes per acre CCA projected under public development. However, the private alternative is not likely to increase average farm incomes through- out the project area as much as appears attainable under the public project because private installation would give more limited coverage, less efficient distribution of groundwater, and less groundwater table control. The table also indicates a need for promotional water charges in the early years of the public project in order to avoid excessive repayment charges over the relatively brief period between first availability of water and completion of the project. With this qualification, it appears that economic incen- tives would be present to encourage farmers to use additional water effec- tively, and apply higher levels of non-water inputs. In absolute terms, average farmers' income with the public project would grow from appro:ximately Rs. 1,000 per farm of ten acres CCA in 1975 to nearly Rs. 3,700 in 1994. This should be sufficiently attractive to enlist farmers' active cooperation under the project. (i) Project Evaluation 2.333 The Bank Group's evaluation of the projects is, as discussed in Chapter II A, based on a somewhat different approach than that of IACA. The evaluation results of the Bank Group and IACA are not strictly comparable because IACA has related total incremental production to incremental costs only. The Bank Group has made its evaluation by relating attributable incre- ments, after adding benefits resulting from decreased use of surface supplies, to total project costs. On the basis of these modifications in the IACA evaluation procedures, the Bank Group has assessed the likely results of the project as follows: Results of Project Evaluation - Public Project Incremental NPV (present worth at 8%) Rs. 178 million Benefit/Cost Ratio (at 8%) 1.8 to 1 Rate of Return: a) exclusive of potential private savings 14.3% b) inclusive of potential private savings 16.1% The IACA assessment 1/ of incremental NPV, before allocation of benefits to surface water, was Rs. 309 million, with a rate of return of 29 percent on 1/ For details of IACA's evaluation, see IACA Comprehensive Report, Volume 20, Annexure 15J, Chapter 4 (public project) and Appendix 1 (private alternative). MlNNEA 4 .1 Page 190 incremental costs over the "without" case only. The calculations pertaining to the Bank Group's evaluation are given in Appendix 5. 2.334 The private alternative has also been evaluated by the Bank Group in accordance with the procedures discussed in Chapter II A, and continued private development would give a rate of return of 76 percent because of the considerably lower investment requirements involved. However, the total incremental NPV attainable under the private alterrative would be less -than n one-third of that attainable under the public tubewell project. Details of the evaluation of the private alternative are given in Appendix 6, page 3. (j) Conclusion 2.335 UIhile these results can only be indicative in the absence of a detailed appraisal, the rate of return of 14 percent on total investment in the public project (after allowance for benefits attributable to savings of surface supplies) would appear satisfactory. Private development would appear capable of achieving a higher rate of return on investment than is likely to be attained with the public project. However, public development would make a substantially greater contribution to total agricultural pro- duction than private development. Furthermore, private tubewell development as discussed would be incapable of controlling effectively the depth of the water table. 2.336 Because of the overriding need to accelerate growth of agricultural production in -,,est Pakistan as rapidly as possible, the Bank Group concludes that this area should be developed by means of a public tubewell project. Since project preparation is already well advanced, it should be possible to start construction by 1973. Steps, hoi%ever, should be taken to reformulate and prepare the project for implementation on the basis of the detailed studies, investigations and designs already available. ANNEX 4.1 APPENDIX 1 INDUS SPECIAL STUDY Page 1 Public Tubewell Project - Sukkur Right Bank Revised Cost Estimates and Financial Requirements Local Currency Foreian Exchange 1/ Total (Rs. Mill) (Rs. Mill) (US$ Equiv)- (Rs. MilT7US$ Equiv) PROJECT PREPARATION 2/ 2.3 2.1 0.44 4.4 0.93 Tubewell Project: Tubewells 16.1 21.9 4.61 38.0 8.00 Appurtenant Structures 6.2 2.0 0.42 8.2 1.72 Watercourse Improvement 3/ 2.7 - - 2.7 0.57 Duties and Taxes 4k .3.6 - - 3.6 0.76 Engineering and Administration-/ 2.9 2.4 0.51 5.3 1.12 Subtotal 6 31.5 26.3 5.54 57.8 12.17 Contingencies -/ 6.3 5.3 1.12 11.6 2.44 Total Tubewell Project 37.8 31.6 6.66 69.4 14.61 ELECTRIFICATION Distribution 7.7 12.1 2.54 19.8 4.17 Transmission 1.6 2.4 0.50 4.0 0.84 Duties and Taxes 4 4.4 - - 4.4 0.93 Engineering & Administration 5/ 1.4 1.4 0.29 2.8 0.59 Subtotal 15.1 15.9 3.33 31.0 6.53 Contingencies 6/ 3.0 3.2 0.67 6.2 1.30 Total Electrification 18.1 19.1 4.00 37.2 7.83 INTEREST DURING CONSTRUCTION Tubewell Project 7/ 8.3 - - 8.3 1.75 Electrification 87 2.3 - - 2.3 0.48 Subtotal 10.6 - - 10.6 2.23 Total Financial Requirements 68.8 52.8 11.12 121.6 25.60 1/ Rate of exchange used 1 : 4.75. 2/ Estimated at 5 percent direct costs before contingencies. 5/ Estimated at Rs. 10/acre CCA. / Estimated at 15 percent of Foreign Exchange component of direct costs before engineering and administration. 5/ Estimated at 10 percent of direct costs after duties and taxes. '/ Estimated at 20 percent of direct costs after duties and taxes and engineering and administration. 7/ Estimated at 6 percent per annum for two year period for each individual phase of tubewell construction. 8/ Estimated at 6 percent per annum for one year period. APPENDIX 1 Page 2 INDUS SPECIAL STUDY Public Tubewell Project - Sukkur Right Bank Based on Bank Group Cost Estimates 1973/74 1974/75 1975/76 1976/77 TOTAL -------------------(Rs. Million)--------------------- Project Preparation 4.4 - - - 4.4 Tubewells, Structures and Watercourses 10.7 21.5 16.7 - 48.9 Duties and Taxes 0.8 1.6 1.2 - 3.6 Engineering 1.2 2.3 1.8 - 5.3 Contingencies 2.5 5.1 4.0 - 11.6 Subtotal 15.2 30.5 23.7 - 69.4 Interest During Construction 0.9 2.7 3.3 1*4 8.3 Total Tubewell Project 16.1 33.2 27.0 1.4 77.7 Electrification - 5.2 1o.4 8.2 23.8 Duties and Taxes - 1.0 1.9 1.5 4.4 Engineering and Administration - 0.6 1.2 1.0 2.8 Contingencies - 1.4 2.7 2.1 6.2 Subtotal - 8.2 16.2 12.8 37.2 Interest During Construction - 0.5 1.0 0.8 2.3 Total Electrification - 8.7 17.2 13.6 39.5 TOTAL FINANCIAL REQUIREMENTS 20.5 41.9 44.2 15.0 121.6 1/ Incurred prior to beginning of construction. INDUS SPECIAL STUDY Public Tubewell Project - Sukkur Right Bank Comparative Summary Water Budget "With" the Project and "Without" Additional Tubewells Net Increase 1965 1975 1985 "With" the Project "With"i "Lfithout" "t "With" "iout"l the Additional the Additional Surface Ground- Existing Project Tubewells Project Tubewells Water water Total ------ (MA?) - Surface Supplies: Total 0.94 0.50 0.94 o.60 0.94 -0.34 - -0.34 Thereof during October to May: 1/ 0,30 0.12 0.30 0.17 0.30 -0.13 -0.13 …-- -…------------------------------------------------------- -------------------------------------------------- ------ Groundwater Supplies: 0.01 o.64 0.04 0.72 3/ 0.04 2/ o 0.68 o068 Total Supplies: 0.95 1.14 0o.98 1.32 0.98 -0.34 0.68 0.34 1/ Release period during which reservoirs would be operated for irrigation requirements. 2/ Based on IACA's figures of 310 private tubewells in operation by 1973 and an average utilization rate of about 27 percent per annum. 3/ This would include substitution for existing private groundwater exploitation (0.01 MAF) as well as RII those of further increase in private groundwater extraction. PUBLIC TUBEWELL PROJECT: SUKKUR RIGHT BANK WATER BALANCE AT ULTIMATE DEVELOPMENT (ALL FIGURES IN MAF) < CANAL ><-WATER COURSE-+erennials: Sugarcane (gur) 1,100 20.7 22.77 0.41o 30.6 33.66 0.606 49.8 54.78 0.986 Fruit 2,700 60.91/ 153.10 1.684 110.0 297.00 3.267 137.h 370.98 4.081 Vegetables 1,100 120.0 132.00 1.452 160.0 176.00 1.936 193.7 213.07 2.344 Sub-total: 4,900 3.5446 5.809 7.411 ,PV of Crops 39.071 58.864 83.625 3PV of Annimal Husbandry 2 27.623, 39.100 54.300 rotal GPV 66.694 97.964 137.925 On-Farm Costs 3/ 21.3442 35.267 49.653 Total NPV 45.352 62.697 88.272 V/ Applies only to fruit-bearing acreage. 2/ Based on TACA Projection. 3/ 1975 = 32% of total GPV. J 1985 = 36% of total GPV. 1994 = 36% of total GPV. I INDUS SPECIAL STUDY Public Tubewaf PnAs - ukkur Righet Bank Calculation of Rate of Return Cost 1/ of Incremental NPV 0 A: M and Incremental Benefits Rate of Return NP7 "WITH" NPV "WITHOUT" Incremental Additional After Allocation Infrastruoctre Power Attributable Potential including Potential Capital Coste Net Benefits Project Costa Year The Project the Project NPV Surface Water to Surface Water and Services 2/ Costs Ircrement Private Savings Private Savings of ProJect at 14.3% 3/ at 16.1% 4/ at 14.3% 3/ at 16.1S _______________________(Ra.------ n)------------------------- 1973 - ------ -1.5 i.5 188 - 1.3 16.4. 16.2 19741 45.1 h.5l - - - - 1.5 1.5 28.9 - 1.1 22.1 21.42 1975 46.1 45.4 0.7 -o.6 1.3 0.04 1.53 -0.3 1.5 1.2 22.5 -0.2 0.7 15.1 14.4 1976 48.9 46.9 2.0 -3.0 5.O 0.15 4.53 0.3 1.5 1.8 0.2 1.0 1977 51.7 48.4 3.3 -6.4 9.7 0.34 6.50 2.9 1.5 4.4 1.5 2.1 1978 54.4 50.0 4.4 -7.6 12.0 0.42 6.54 5.0 1.5 6.5 2.2 2.7 1979 57.3 51.6 5.7 -8.5 14.2 0.50 6.56 7.1 1.5 8.6 2.8 3.0 1980 60.2 53.3 6.9 -9.4 16.3 0.57 6.59 9.1 1.5 10.6 3.1 3.2 1981 63.1 55.O 8.1 -10.2 18.3 o.64 6.61 11.0 1.5 12.5 3.3 3.3 1982 66.1 56.8 9.3 -10.8 20.1 0.70 6.66 12.7 1.5 11M.2 3.3 3.2 1983 69.2 58.6 10.6 -11.4 22.0 0.77 6.70 16.5 1.5 16.0 3-3 3.1 1984 72.5 60.5 12.0 -12.5 24.5 0.86 6.72 16.9 1.5 18.h 3'4 3.1 1985 75.5 62.7 12.8 -12.9 25.7 0.90 6.76 18.0 1.5 39.5 3.2 2.8 1986 79.4 65.1 16.3 -14.4 28.7 1.200 6.76 20.9 1.5 224. 3.2 2.8 1987 83.4 67.6 15.8 -15.9 31.7 1.11 6.76 23.8 1.5 25.3 3.2 2.7 1988 87.7 70.3 17.4 -17.5 34.9 1.22 6.76 26.9 1.5 28.14 3.2 2.6 1989 92.2 73.0 19.2 -19.3 38.5 1.35 6.76 30.4 1.5 31.9 3.1 2.5 1990 96.9 75.8 21.1 -21.2 42.3 1.48 6.75 34.1 1.5 35.6 3.1 2.4 1991 101.9 78.8 23.1 -23.2 46.3 1.62 6.75 37.9 1.5 39.1 3.0 2.3 1992 107.1 81.8 25.3 -25.4 50.7 1.77 6.75 42.2 1.5 43.7 2.9 2.2 1993 112.6 85.o 27.6 -27.7 55.3 1.94 6.75 46.6 1.5 48.1 2.8 2.1 1991 118.8 88.3 30.5 -30.7 61.2 2.14 6.74 52.3 1.5 53.8 2.8 2.0 Rate of Return _/ .13% 53.4 52.2 53.6 52.0 Rate of Return 4/ .16,1% = = 17 Gsargen a. acerage va-ue per acre loot ol otral lscren.al water availability Incremental Value/Acre Foot Incregental Water of Incremental NPV Availabilit Avallabiflty (Rs. el) (1AF) (Rs.) 1980 6.9 .27 25.3 1985 12.8 .34 37.9 1992 25.3 .34 74.8 Savings in surface water due to project based on IACA intensity projection beginning in 1975 at 0.16 MAF to 0.31 in 1983. 2/ Allowance for public expenditures on infrastructure and intensified techical and advisory services. The allowance includes: 1.85% of attributable increment for reads. 1.65% of attributable iscrement for supporting services. Charged on incremental NPV after allocation to surface water only. 3/ Excluding Potential Private Savings. 4/ Including Potential Private Savings. .1JJLVO OrZA.4LAL Q±UJJ Public Tubewell Project - Sukkur Right Bank Benefit:Cost Ratio Incremental NPV Project Costs Including Discounted at 8% After Allocation 0 & M, Services and Year to Surface Water Infrastructure Benefits Costs 1/ 2/ P.W. Factor 8% 1/ 2/ ------------------------------------(Rs. mill).---------------------------------.-_-_________________ 1973, - 18.8 17.3 .926 _ 17.4 16.0 l9,7,i - 28.9 27.4 .857 - 24.8 23.5 19,,7,5,ffi,,, 1.3 24.1 22.6 .794 1.0 19.1 17.9 l9r,7t6,I 5.0 4.7 3.2 .735 3.7 3.5 2.4 19 7,7; 9.7 6.8 5.3 .681 6.6 4.6 3.6 1978 12.0 7.0 5.5 .630 7.6 4.4 3.5 1979 14.2 7.1 5.6 .584 8.3 4.1 3.3 1980 16.3 7.2 5.7 .541 8.8 3.9 3.1 1981 18.3 7.3 5.8 .500 9.2 3.7 2.9 1982 20.1 7.4 5.9 .463 9.3 3.h 2.7 1983 22.0 7.5 6.0 .429 9.4 3.2 2.6 198' 24.5 7.6 6.1 .397 9.7 3.0 2.4 1985 25.7 7.7 6.2 .368 9.5 2.8 2.3 1986 28.7 7.8 6.3 .341 9.8 2.7 2.1 1987 31.7 7.9 6.4 .315 10.0 2.5 2.0 1988 34.9 8.o 6.5 .292 10.2 2.3 1.9 1989 38.5 8.1 6.6. .270 l0.h 2.2 1.8 1990 42.3 8.2 6.7 .250 10.6 2.1 1.7 1991 46.3. 8.4 6.9 .232 10.7 1.9 1.6 1992 50.7 8.5 7.0 .215 10.9 1.8 1.5 1993 55.3 8.7 7.2 .199 11.0 1.7 1.4 1994 61.2 8.9 7.h .184 11.3 1.6 1.4 B/C Ratio 1/ at 8% = 1.5 17Bi.0 =-O 101.6 B/C Ratio 2/ at 8% = 1.8 3/ 1/ Before deduction of Potential Private Savings. m ,> 2/ After deduction of Potential Private Savings. 3/ If potential private savings are added to benefit stream rather than netted out from cost stream, the ¶ Benefit/Cost ratio would be 1.6 as shown below: Present Worth of Benefits: 178.0 Present Worth of Savings: 15.2 Total: 193.2 i _ L 2 f |P - . . - 1 s 01 0 X . INDUS SPECIAL STUDY Public Tubewell Prqject - Dipalpur Below the B.S. Link Private Alternative - Rate of Installation and Incremental Water Availability Number of Increase in Private Incremental 2/ Wells in Wells during Project Replacement of Incremental Number of Water Availability Year Operation 1/ Period Additional Wells Wells in Operation (MAF) 1965 1,470 1966 1,764 1967 2,117 1968 2,540 1969 3,048 1970 3,658 610 610 0.14 1971 3,914 256 866 0.19 1972 4,188 274 1,140 0.26 1973 4,481 293 1,433 0.32 1974 4,795 314 1,747 0.39' 1975 5,13o 335 2,082 0.47 1976 5,130 - 2,082 0.47 1977 5,130 2,082 0.47 1978 5,130 2,082 o.47 1979 5,130 2,082 0.47 1980 5,130 610 2,082 0.47 1981 5,130 256 2,082 0.47 1982 5,130 274 2,082 0.47 1983 5,130 293 2,082 0.47 1984 5,130 314 2,082 0.47 1985 5,130 335 2,082 0.47 1986 5,130 - 2,082 o.47 1987 5,130 2,082 0.47 1988 5,130 2,082 0.47 1989 5,130 - 2,082 0.47 1990 5,130 610 2,082 0147 1991 5,130 256 2,082 0.47 2/ Rate of installation: 20% p.a. compound growth between 1Y6, and 1970. This rate of installation accepts the 7% p.a. compound growth between 1970 and 1975. ceiling for coverage with private tube- wells stated in the IACA project report. 2/ Assume rate of average utilization: 30% Each well would pump for about 2,630 hours and produce 225 acre feet per annum. INDUS SPECIAL STUDY Public Tubewell Projec', - Sukkur Right Bank Estimate of Incremental NPV of Ptivate Tubewell Alternatite Acreage Cropped Expansion of Acreage Cropped Acreage Cropped Overall Intensity NPV of Private NPV Incremental Receiving Add'}. Acreage Cr oped Under "With" Under "Without" Alternative "Without" NPV ,ar Water ('000) (1000) VP Condition ('000) Condition ('000) Acres % (Rs. mill.) 3/ (Rs. mill.) (Rs. mill.) M73 7-5 5.2 12.7 301.0 313.7 11, 45,5 4R.8 0.7 ?74 12.4 7.2 19.6 296.1 315.7 115 46.2 45.1 1.1 ?75 18.0 9.4 27.4 290.5 317-9 116 46.7 45-4 1.3 ?76 24.5 14-3 38.8 284.0 322.8 118 48.8 46.9 1.9 977 31-9 17.8 49.7 276.6 326.3 120 50.9 48.4 2.5 }78 40.4 22.9 63.3 268.1 331-4 121 53.2 50.0 3.2 ?79 50.2 27.9 78.1 258.3 336.4 123 55.6 51.6 4.0 ?80 51.4 30.8 82.2 257.1 339-3 124 57-8 53-3 4-5 ?81 74-3 47.0 121.3 234.2 355.5 130 62.0 55-0 7.0 }82 74.3 47.0 121.3 234.2 355.5 130 63-9 56.8 7.1 ?83 74.3 47-0 121.3 234.2 355-5 130 65.8 58.6 7.2 ?84 74-3 47-0 121.3 234.2 355-5 130 67.8 60.5 7.3 ?85 74.3 47-0 121.3 234.2 355-5 130 70.0 62.7 7.3 M86 74.3 47.0 121.3 234.2 355-5 130 72.9 65-1 7.8 ?87 74.3 47-0 121.3 234.2 355-5 130 76.1 67.6 8.5 M88 74.3 47-0 121.3 234.2 355.5 130 79.4 70-3 9.1 ?89 74-3 47-0 121.3 234.2 355.5 130 82.7 73.0 9.7 ?90 74.3 47-0 121-3 234.2 355-5 130 86.3 75-8 10.5 ?91 74.3 47-0 121.3 234.2 355.5 130 90.0 78.8 11.2 ?92 74.3 47-0 121.3 234.2 355.5 130 93.8 81.8 12.0 293 74.3 47.0 121-3 234.2 355-5 130 97.8 85-0 12.8 ?94 74.3 47.0 121-3 234.2 355.5 130 102.2 88.3 13-9 I Based on existing water depth of 3.1 acre feet on historical intensity. / Expansion in addition to historical intensity of full delta. / Estimated by adding NPV/acre cropped of acreage cropped, continuing with underwatering ("without" condition) to NPV/acre cropped of acreage cropped at full delta ("with" condition). INDUS SPECIAL STUDY Public Tubewell Project - Sukkur Right Bank Rate of Return of Private Tubewell Alternative Benefit Cost Ratio Rate of Return Incremental Infrastructure 0 & M Capital Total Benefits Costs Benefits Coats Year NPV & Services 1/ Costs Y/ Costs Y Costs at 8% at 8% at 76% at 76% --------------- Rs. Mille - --------------------- 1973 0.7 - 03 0,7 1.0 o06 0.Q 0.4 0o6 1974 1.1 - 0.5 0,5 1.0 0,9 0.9 0.4 0.3 1975 1.3 - 0,7 0o6 1.3 10 1.0 0.2 0,2 1976 1.9 0.1 1.0 07 1.8 1.4 1.3 0,2 0,2 1977 2.5 01 1.2 0.7 2.0 1.7 1.4 0.1 01 1978 3.2 0.1 1.6 0.9 2.6 2.0 1,6 0.1 01 1979 4.0 0.1 2.0 1.0 3.1 2,3 1.8 01 0.1 1980 4,5 0.2 2.0 1.1 303 2,4 1.8 - - 1981 7.0 0,2 2,9 1,3 4.4 3.5 2.2 - - 1982 7.1 0,2 2.9 - 3.1 3.3 1.4 - - 1983 7.2 0,3 2.9 0.7 3.9 3.1 1.7 - - 1984 7.3 0,3 2,9 0°5 3.7 2.9 1.5 - - 1985 7.3 0.3 2.9 0.6 3.8 2.7 1.4 - - 1986 7.8 0.3 2,9 0.7 3°9 2.7 1,3 - - 1987 8.5 03 2.9 0.7 3.9 2,7 1,3 - - 1988 9.1 0.3 2.9 0.9 4.1 2.7 1.2 - - 1989 9.7 0,3 2.9 1,0 4.2 2.6 1.1 - - 1990 10.5 0,4 2.9 1.1 414 2,6 1.1 - - 1991 112 014 2.9 1.3 4.6 2.6 1,1 - - 1992 12.0 0o4 2.9 - 3.3 2,6 0.7 - - 1993 12.8 0,4 2.9 0.7 4.0 2,5 0,8 - - 1994 13.9 0,5 2.9 0.5 3,9 2.6 0.7 - - 51.5 28.2 1.5 1,6 B/C Ratio at 8% 1.8 8 I/ Based on a charge of 3.5% of incremental NPV as under public tubewell program, 2/ Based on average annual 0&14 costs per tubewell of Rs. 3,900 (see Annex 8, page 4). 3/ Based on average cost of tubewell of Rs. 10,000 and assumed rate of installation (see Annex 8, page 1). ANN 1X 4.1I Page 191 III. DRAINAGE PROJECTS A. Introduction 3.01 Drainage requirements resulting from rising water tables in usable groundwater zones are, in general, met by priorities for tube- well development. IACA also investigated the requirements for surface run-off drainage and saline effluent disposal and established the need for such drainage only in the north of the Punjab and south of the Sind. Although endorsing the priority for drainage disposal works in the former Sind, as determined by LIP, no evaluation or project has been formulated by IACA. The proposals for the Sind involves major outfall drains with prolonged construction periods for which further project preparation is required and partially under way. 3.02 IACA has prepared a project report / for a surface run-off drainage scheme based on its evaluation and reformulation of the Irrigation Department's (West Pakistan) proposals submitted to the 2/ Planning Commission. This is referred to as the "Enlarged Project - for the Sukh Beas Surface Run-off Drainage Scheme" which IACA has included in its program for 1965-1975. The Bank Group's review and evaluation of this project is presented in the next section. B. The Sukh Beas Drainage 1. Description of Project Area 3.03 The Sukh Beas Nallah Project area is located in the middle and along the whole length of the Bari Doab, (whose boundaries are formed by the Ravi and Chenab rivers on the northwest and west, and by the Sutlej river on the southeast). The course of the proposed drain runs 4h0 miles (measured directly without meandering, it is only 250 miles) from Kasur in Lahore District to the Chenab River near Jalapur Pirwala in Multan District. The catchment area is about 5,180 square miles bordering on the Dipalpur, Pakpattan and Mailsi canals on the east and the lower Bari Doab on the west. 1/ IACA's Comprehensive Report, Volume 12A, Annexure 15 B "Sukh Beas Nallah Drainage Project". 2/ Three alternative project proposals for the excavation and channelling of the Sukh Beas Nallah over part or the whole of its length have been submitted by the WJest Pakistan Irrigation Depart- ment to the Planning Commission. The "enlarged project" is based on IACA's review of these proposals which it has adjusted to improve efficiency. ANNEX 4.1 Page 192 3.04 The purpose of the Sukh Beas Drainage Scheme would be to provide relief for 2,170,000 acres CCA of seasonally waterlogged lands and to prevent further increase in waterlogging caused by surface run- off in the summer in the upper and central parts of the Bari Doab. IACA, in its report, states that the groundwater projects in the upper parts of this region pre-suppose adequate storm drainage facilities and that these would be adversely affected if drainage were not provided. The drainage project would thus permit the full utilization of land during the summer months and enable projected yield increases within the project area which at present suffers ponding from storm run-off and overland flow. 3.05 The table below shows the areas which would benefit from the project: Areas Affected by Sukh Beas Drainage CCA Percent of Affected CCA Canal Command (Million Acres) CCA Affected (Million Acres) Ravi-Syphon Dipalpur Link 0.594 35 0.210 Dipalpur Above B.S. Link 0.372 80 0.300 Dipalpur Below B.S. Link 0.611 100 0.611 Pakpattan Above S.M. Link 0.607 30 0.180 Lower Bari Doab 1.575 55 0.870 TOTAL 3.759 2.171 Existing surface drainage systems in the project area flow into the Sukh Beas Nallah. Several recently constructed drains in the Lahore and Montgomery districts have their outfalls on the Sukh Beas, but as the Nallah is not continuous and has no definite outfall, severe ponding is liable to occur. The Nallah affords a measure of protection to some areas in the upper parts of the catchment but throughout much of the catchment there is no effective drainage system. 2. Physical Works 3.06 Three alternative project proposals (referred to as Alterna- tives I, II and III) for the excavation and channelling of the Sukh Beas Nallah over part or the whole of its length have been submitted by the West Pakistan Irrigation Department to the Planning Commission. ANNEX 4.1 Page 193 The design discharges are the same in each alternative and the main variations are in alignment and side slopes. All three alternatives include remodelling of existing and provision for new bridges and crossings. Because of realignment it would be possible to reduce the total length of the drain to about 320 miles. 3.07 IACA examined the three alternatives and came to the con- clusion that none of these schemes would be extensive enough to provide adequate storm drainage throughout the project area. IACA also con- cluded that, with the exception of Alternative I, the cost estimates for the other alternative proposals are too low for the work proposed. IACA has, therefore, proposed an "enlarged project" which incorporates the Irrigation Department's Alternative I but extends the project to provide adequate drainage throughout the whole catchment of the Sukh -Beas Nallah. These adjustments principally consist of additions to Alternative I and include the following: (i) Enlarging design capacity of the main drainage channel by abou-t 50 percent over the first 100 miles, and reducing capacity by seven percent over the remaining 220 miles. (ii) Provision for induced seepage to the groundwater aquifer in the lower reaches of the drain. (iii) Extension of remodelling of branch drains, which would require the enlarged capacity of the main drains (see (i) above). (iv) Inclusion of steep side slopes to the drain as against those proposed by the Irrigation Department in Alterna- tives II and III 1/ in order to reduce maintenance requirements. 3.08 A brief summa.ry of the main features of each of the alterna- tive proposals follows: 1/ IACA concluded that surface run-off would undoubtedly bring silt into the system, and this would affect the operation of the channel unless routine maintenance is carried out. ANNEX 4.1 Page 194 Main Features of Alternative Sukh Beas Drainage Proposals Irrigation Department "Enlarged Alternative Alternative Alternative Project" IACA I II III Alternative Design Discharge Capacity: at head 426 cusecs 462 cusecs 462 cusecs 462 cusecs at tail 2424 cusecs 2h24 cusecs 2424 cusecs 2263 cusecs Length of canalized alignment 327 miles 327 miles 448 miles 327 miles Alignment to be shortened Original As under by excavation of by-passes alignment Alternative across necks of sharp to be I but with bends, and with 6-miles adopted and extension outfall reach. excavated and remodel- to Lacey ling of station, branch drains. with 6-mile outfall reach. Side slopes 1:1 1:3 1:3 1:1 Field drains connected to the Departmental System would be expected to be constructed by farmers themselves. IACA has suggested that these drains should be dug between squares (25 blocks), two feet wide and two feet deep. 3.09 In IACA's opinion the Irrigation Department's proposals would effectively assist in the disposal of storm run-off from the vicinity of the Sukh Beas Nallah, but it would do little to alleviate the wide- spread inundation occurring in areas beyond the immediate environment of the Nallah because the branch drainage systems in the upper part of the catchment are of inadequate capacity, and the average spacing of the drains is generally excessive for proper functioning of the systems. Local pounding of run-off would be reduced by the construction of addi- tional inlets and subsidiary drains and enlargement of branch drains in much of the area. This would require increasing the capacity of the main drain, particularly in the upper reaches of the Nallah, which consequently requires extending the project. AMNEX 4.1 _~ _ Pag-e 19-5 3. Cost Estimates 3.10 The estimated capital cost, for the alternatives proposed by the Irrigation Department ranges from Rs. 37.2 million for Alternative III to Rs. 64 million for Alternative I. With the adjustments to Alternative I proposed by IACA, total cost estimated would increase to Rs. 142 million (US$ equivalent of 29.9 million), with a foreign ex- change component of US$ 2.3 million (eight percent of total cost) for earth moving equipment. The annual cost for administration, operation and maintenance are estimated in the Government Alternative I as Rs. 1.08 million. This amounts to Rs. 3,360 per mile for the canalized Sukh Beas which IACA considers adequate. IACA estimates that the annual maintenance cost for the branch drains would be Rs. 500 per square mile or, over 2,300 square miles, Rs. 1.15 million. The total annual cost for operation and maintenance is therefore estimated at Rs. 2.23 million. 3.11 IACA's estimates of the initial capital cost for the alterna- tive proposals are as follows: Summary of Cost Estimates IACA "Enlarged Alternative Alternative Alternative Project" 1/ I II III ----------------(Rs. mill- -------------------- Preliminary Costs and Land Acquisition 5.5 5.5 2.9 0.1 Structure and Buildings 11.7 11.7 8.7 6.2 Earthwork 35.1 35.1 27.2 25.1 Others Including Con- tingency 11.6 11.6 7.9 5.8 Enlargement of Sukh Beas Nallah 20.0 Extension and Remodel- ling of Branch Drains 58.0 TOTAL 141.9 63.9 46.7 37.2 1/ The first four rows relate to the cost for the Irrigation Department's Alternative I. Additional cost of the increase in capacity of the main drain and for remodelling of the Branch Drains are shown in the last two columns. ANNEX 4.1 FPageI:69 3.12 As shown above, IACA estimated that the additional cost of the proposed increase in capacity of the main drain over and above that for the Irrigation Department's Alternative I would be Rs. 20 million and additional cost of Rs. 58 million for extension and remodelling of branch drains, which would form a necessary part of the enlarged pro- ject, would bring total capital cost of the project to approximately Rs. 142 million. Farmers' expenditure for construction of field drains has been assessed by IACA at Rs. 13 million. -The total project costs would then be about Rs. 155 million before interest during construction. 3.13 Allowing for contingencies of the same rate as under Alterna- tive I and also including interest during construction total financial requirements for the Enlarged Project would be about Rs. 190.6 million. If interest during construction is added to the West Pakistan Irriga- tion Departmentts Alternative I, the total financial requirement would rise from Rs. 64 million to Rs. 72.6 million. 4. Construction Phasing 3.1h The Bank Group has retained IACAts proposed construction schedule. Construction would begin without delay and extend over a total period of nine years (including farmers' field drains). Drain- age facilities would be provided first to the most northerly canal commands of the doab since the first public tubewells would be ex- pected to start operation in the area by 1971 or, alternatively, active private tubewell development would be supported by the pro- ject facilities. IACA has estimated that the "Enlarged Project'" would take seven years to construct (excluding farmers' field drains); the Irrigation Department's Alternative I would be completed in five years. 5. Expenditure Schedule 3.15 The phasing of the investment expenditures would be about as follows: ANNEX 4.1 Expenditure Schedule Page 197 (Rs. Million 1965/ 1966/ 1967/ 1968/ 1969/ 1970/ 1971/ 1972/ 1973/ 1966 1967 1968 1969 1970 1971 1972 1973 1974 Total Public Expendi- tures 2 10 20 20 30 30 30 - - 142 Farmers' Zxpendi- tures - - - - - 2 2 _ 5 13 TOTAL 2 10 20 20 30 32 32 4 5 155 For details of the Expenditure Schedule and its comparison against Alternative I, see Appendix 1. The public expenditures would be mainly incurred on the Irrigation Department farm account since it is proposed that the construction would be carried out departmentally. 6. Drainage Benefits 3.16 The main benefit from the Drainage Project would be the reduc- tion in the damage to agricultural production caused by floods. Benefit obtained through reduction of other harmful effects of flooding (e.g. dislocation of transportation, etc.) have not been evaluated although they would be substantial. 3.17 IACA has calculated the agricultural benefits by comparing the flood damage which would occur with surface run-off drainage against the damage likely to occur without such provision. The com- parison has b en made on the basis of the reduction in average annual crop damage _ attributable to each project, expressed as a percentage of the net production value obtainable from affected (summer) crops in the project area. On this basis, IACA has estimated the average annual damage for the different proposals to be as follows: 1/ The average annual crop damage was obtained on the basis of frequency- analysis of 48 hours point rainfalls in the catchment area, as well as observations of run-off behavior. (See IACA Comprehensive Report Volume 6.). ANNEX 4.1 Page 198 Estimated Average Annual Damage Annual Damage As Reduction in Percent of Net Annual Damage Production Value as Percent of (NPV) of Summer Crops (NPV) of Summer Crops Enlarged Project 1/ 3 7 Irrigation Department Proposals - 8 2 No Additional Drainage or "W'ithout Project" 10 0 1/ Large amount of damage occurs because only a limited area along a narrow strip adjacent to the Sukh Beas Nallah benefits from the project proposal; large areas of the catchment would remain in- adequately drained. The small difference of reduction in annual damage between the Irriga- tion Department's Alternative and the "WT^ithout Project" case is due to the fact that the Departmentts alternative consists of the main drain only without a system of branch drains and therefore serves only a narrow strip in the center of the catchment area. 3.18 The full benefits from the enlarged project would, because of the extended period of construction, be realized only at the end of the eight years. In the case of the Irrigation Department's alterna- tive, it would be realized at the end of the fifth year. IACA has pro-rated the growth of the ultimately obtainable benefits for the different proposals as follows: Growth of Benefits Percent of Attainable Benefits Year Enlarged Project Alternative I 1965/66 0 0 1966/67 0 0 1967/68 0 25 1968/69 0 50 1969/70 25 75 1970/71 50 100 1971/72 75 100 1972/73 100 100 ANNEX 4.1 Page 199 3.19 The crops benefiting from the drainage system would be the kharif and perennial crops since the heavy rainstorms in the project area are confined to the monsoon months. IACA has assumed that the total net cro- duction value from these summer crops would approximate half the annual NPV of all crops and animal husbandry. IACA's estimate of the net pro- duction value for summer crops and animal husbandry for areas benefiting from the project in reference years is as follows: IACA Estimate of Total Net Production Value Affected by Drainage System 1965 1975 1985 2000 - --------(.mill)- Crops 134 199 322 370 Livestock (incl. fodder) 94 162 225 257 TOTAL 228 361 547 625 (For details see Appendix 2) The Bank Group has, in accordance with its discussion on Project Evalua- tion, Chapter II, Part A of this volume, reviewed and analyzed IACA's estimate of NPV in the area affected by the Sukh Beas Nallah Drainage Project. For the Ravi Syphon, Dipalpur Above and Dipalpur Below the B.S. Link areas it has used the NPV obtained in its evaluation of the public tubewell project. For the Pakpattan and Lower Bari Doab (areas outside the public tubewell project) the NPV per acre is based on an average NPV for the Lower Bari Doab - particularly the NPV related to the Shujaabad Project. Its results are virtually identical with those of IACA as shown in Appendix 2, page 2. 7. Project Evaluation 3.20 The agricultural benefits attributable to the drainage scheme have been assessed on the basis of the projected growth of NPV affected (para 3.19) by applying the percentage reductions in drainage estimated for alternative designs as shown in the table in para 3.17. Using the Bank Group's estimates and the rate of growth of obtainable benefits as shown in para 3.18, the rate of return of the "Enlarged Project" would be about 13 percent. Alternative I as proposed by the Irrigation Department, would yield a rate of return of eight percent. For details, see Appendix 3, pages 1 and 2. ANNEX 4.1 Page 200 8. Conclusion 3.21 On the basis of the foregoing review, the Bank Group concludes that the "Enlarged Project" including branch drains would be superior to the Irrigation Department's Alternative I. The proposed drainage project would serve an area where existing levels of agricultural pro- duction are amongst the highest for WJest Pakistan. The drainage project would support active private tubewell development as well as public tubewell projects proposed for the later part of the period 1965-1975. To the extent that the reduction in prolonged flooding of large agri- cultural areas would reduce the recharge to the groundwater aquifer, the project would also contribute to the control of the water table in large parts of the Bari Doab. Though it is extremely difficult to assess drainage benefits with any accuracy, the Bank Group is satis- fied that the estimated rate of return of 13 percent, based on the projection procedures discussed, represents a fair assessment of the benefit potential of this project. The Bank Group concluded that the "Enlarged Sukh Beas Nallah Drainage Project" is of high priority and has included the scheme in its Action Program as proposed. INDUS SPECIAL STUDY SUKH BEAS DRAINAGE PROJECT Expenditure Schedule 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 TOTAL ------------------------------------(Rs. Million)------------------------------__ lternative I Construction Costs 3.8 10.0 10.0 10.0 20.0 - - - - 53.8 Contingency 0.7 2.0 2.0 2.0 4.0 - - - _ 10.7 Subtotal 4.5 12.0 12.0 12.0 24.0 - - - - 64.5 Interest During Construction 0.3 1.0 1.7 2.2 2.9 - - - - 8.1 Total Financial Requirements 4.8 13.0 13.7 14.2 26.9 - - 72.6 ACA Enlarged Project Construction Costs (Public Expenditure) 1.8 9.2 18.4 18.4 27.6 27.6 27.6 - - 130.6 Farmer's Expenditure - - - - - 2.0 2.0 4.0 5.0 13.0 Contingency (20%) 0.4 1.8 3.7 3.7 5.5 5.9 0,4 0.8 1.0 23.2 Subtotal 2.2 11.0 22.1 22.1 33.1 35.5 30.0 h.8 6.0 166.8 Interest During Construction 0.1 0.8 2.1 3.3 4.6 5.4 4.2 2.6 0.7 23.8 Total Financial Requirements 2.3 11.8 24.2 25.4 37.7 40.9 34.2 7.4 6.7 190.6 -~~ = __ 1I 1 INDUS SPECIAL STUDY IACA's Estimate of NPV in Area Affected By Sukh Beas Nallah Drainage Project (Million Rupees) 1965 1975 1985 2000 NPV Crops NPV Crops NPV Crops NPV Crops Percent of NPV in Area NPV in Area NPV in Area NPV in Area Canal Command CCA Affected Crops Affected Crops Affected brops Affected Crops Affected Ravi-Syphon) 35 70 25 127 4 179 60 189 66 Dipalpur ) Dipalpur above BS Link 80 26 21 70 56 114 91 129 103 Dipalpur below BS Link 100 53 53 119 119 186 186 205 205 Pakpattan above SM Link 1 30 92 28 101 30 178 53 218 65 Lower Bari Doab 55 256 141 269 148 463 254 548 301 Annual Total (crops) 268 397 644 740 Allowance for Animal Husbandry 17 188 325 450 514 Annual Total of Crops and Animal Husbandry 456 722 1,094 l,254 NPV of Affected Crops; (50% of Annual Total for Affected Areas) 228 361 547 627 'I :c- 1/ Calculated on the regional relationship between crops and animal husbandry. H MI. I INDUS SPECIAL STUDY Bank Group's Estimate of NPV in Area Affected by Sukh Beas Nallah Drainage Project (Million Rupees) 1965 1975 1985 2000 Percent of NPV Crops NPV Crops NPV Crops NPV Crops CCA NPV in Area NPV in Area NPV in Area NPV in Area Canal Command Affected Crops Affected Crops Affected Crops Affected Crops Affected RTi-SyphoIn 35 70 25 109 38 169 59 189 66 Dipalpur Dipalpur Above B.S. Link 80 26 21 58 6 90 72 129 103 Dipalpur Below B.S. Link 100 53 53 10 10 182 182 205 205 Pakpattan Above S.M. Link L 1 30 92 28 110 33 181 5 218 65 Lower Bari Doab 55 256 1L1 287 158 469 258 548 301 Annual total (crops) 268 379 625 740 Allowance f2r animal husbandry - 188 294 434 51h Annual total of crops and animal husbandry h56 673 1,059 1,254 NPV of affected crops; (50 percent of annual total for affected areas) 228 336 530 627 U) e 1/ Calculated on the regional relationship between crops and animal husbandry. ANON 000gAaA AAtAAAS8  A AAASS;8 A 8 4.0 '0(0 N N 0 N N 0 0 N N 0 N N N N N N N N N N N 0 0 0 N 0 0 0 3 K if -"- - - V NOON N&.4'03HN§ A8A8 S 00 00000 NAIN 0000 N 0 N 0 N H .4 N N N N N 0' '000 .4'SNON .4 N N 0 0 0 N 0 'FI OHAAOON 3 Nj.4NN.4 0.40 0000.40 NOON 8N%N.4 N NoN 0 N NONONNO..40 N N N N 0 N N N N N N N N N N 0 0 0 N N N N N N N 0 H it ANNONN -4 NO' O5N ON NN.4.4 NO O.4N.440 .0 0. 88880,AC.4 N 0 .4 H N NN - N NON -480 N 8'o6 OONN 3 0 N N N N N N .4 N N N N N N N N N N N 0 N N N N 0000 .40 .40000NN 01b51'oor,ocoooo N N .4 N 0 NOON N N 0 H N N ..4 0 N 0.404. 0 H N 0 N N N rI'NONOONI-NN 0 0004.4. HOON .0 NOONHOON 0 NO.0 #0t- .4 N .4 0 N rI0N0C N .4 N N H IA N 00 - N .4 .4 N N0.4NOON.4 N NOON 5 5 5 5 0 .4 00 N N 00 0 .4.4NNNNNNN.4.4.4.4 H N N N N N 0 N N N 0 N 0000 N 0.10 AAA SNN8'0'0A ONOOONNO'NflNNN'0 0 8  88 ON 04000 ONNONNON 000000 N NN.4 N N N N NO N 2ii  0 0 N N ON N N ON NOONO.4.4NNNNNNNNH.4.4H.4.4 0 N 0 N 0 8 00.4 NO.400 N N N N 0 NO N N00000N N NON0NNN N .4 N (ONONNNOOON N N N N 0 N N O .4NNNNNNNNNO Si00000004 .4 I 0ONNN)CgA8 8  . N NO NO  NO N 8 NOON NON 00 Si '0 N H A N N .0 0 N 0 N 'N N 0 N .4 .4 N N .4.4 NO IA NONHNN 01.4400.400.4.4.45.4 ASo A A A 5522855 H N N 0-A 8 N N N 0 N N 0 0 N N N N 0 N N N N N N N 0 N N N N N N 0 N H N NO  NO.4 a N N '00:0 N NO N N .40 0 0000 .N 0N00O5ONNNNNNN00NNNNNNNNNNNNNNNNNNN 1 NNNNNNNNNONNNNNNONNNNONNNNONN000 a S NH H.40 N N N 8! NON 00 0N.4NN N  ON N 000.4 01  N OH N NOON ON N N H N NOON ON N RN NN A 85880 3 0* ONOON 5588 N NNNN NON 0.1 N N N N N N N N NNN N N N N N N N N N N 8 .4.4.4 HH..HH.4 Rate of Return .d Be-fit/Cost Ratio of P.opreed Irrigation [Mpnrt ets Alterntive I for Sokb Ben Drainage Schem C SITS5 B E NBF I TS BEE C6TRTO RATE OF RET1MN Sooe BPS in Preet Wort of Onto Present Worth of Berfite Bie-fite Coats Berfits Coot. Terr Offeted ren Ceostractino Costs 0 & M Total Costs at_ tta S tanbs foet Ljc t 1i t 0 t23 rE EW Tl 19$5 228 4.5 - 4.5 b.o18 3.913 5 - 0.100 0.000 0.100 4 167 0.000 4 .2 1.966 237 12.0 - 12.0 9.566 9.074 -- 0.101 0. OD0 0.000 i0 288 0.000 10 063 1967 246 12.0 1.1 U3 1 9.324 8.613 25 1.2 0 854 0.789 0.953 10.399 0. 922 lo.0o6o 1968 256 12.0 1.1 13 1. 8.325 7 490 50 2 5 1 589 I.h29 1.B38 9.629 1.758 9.213 1969 266 24.o 1.1 25.1 ill 242 1.2.479 75 3 9 2.233 1 939 2.654 17.083 2 512 16.164 1970 276 1.1 1 1 09557 0 476 100 5.5 2.766 2 .378 3.466 0.693 3 244 o.649 1971 287 1.1 1 1 0 498 o.414 5.7 2 578 2.1.43 3.326 0 642 3.078 o.594 1972 298 1.1. 1.1 0. 414 0 361 6.0 .2 1.961 3.242 0. 594 2 967 0.544 1973 310 1.1 1.1 0.397 I 313 5 1. sUn" 1.-7-62 3. 102 … tIol1 2 0W .490 1974 322 1.1 1.1 0 354 0.272 6.4 2.o6i 1.5a2 2.964 0 510 2.654 0. 456 1.975 336 1.1 1.1 0.316 0 236 6.7 1 926 1. 440 2 .874 0.472 2.545 o.41 1976 352 1.1 1.1 0.282 0 206 7 0 1 797 1.308 2.780 0.437 2.435 0.383 1.977 368 1.1 1.1 0.252 0.179 2.4 1 696 1.203 2.721 0.40o4 2.357 0 350 1978 385 1.1 1 1 0.225 0 155 7.7 1.576 1.088 2.622 0.375 2.246 0.321 1979 403 1.1 1.1 0.201 0 US5 8.1 1.40o 0.9895 2.553 0 347 2.1.63 0.294 1960 422 1.1 1 1 0.179 o.n18 8.4 1.370 0.898 2.452 0.321 2.055 0.269 1961 442 1.1 1.1 o. i6o 0 102 8 8 1.282 o.818 2.378 0.297 1.971 0.246 1962 463 1.1 1 1 0.143 0109 9 3 1.209 0 751 2 .327 0 275 1.908 0.226 1983 485 1.1 11 10128 0077 9 7 1 126 0 682 2 248 0 255 1.822 0.207 1984 508 1.1 1 1 0.1o4 5 067 11 2 1.057 0 623 2 188 0.236 1.754 0 189 1985 530 1.1 1.1 0.102 0 058 10 6 0 981 0 563 2 106 0 219 1.670 0 173 1986 536 1.1 1.1 0.091 00o51 10 7 0.884 0.494 1.968 0 202 1.543 0 159 19B7 542 1.1 1 1 0.081 0.044 10 8 0 797 0 434 1.839 2.187 1.427 0.145 1988 548 1.1 1 1 0 072 0.038 10.9 0 718 0.381 1.719 0.173 1.319 0 133 1989 554 1.1 1 1 o.o65 0 033 11 0 0 647 0.334 1 606 'O.161 1.219 0.127 1990 560 1.1 1.1 0 o58 0 029 11 2 0.583 0.293 1.501 0 149 1.126 0. 112 1991 566 1.1 I11 0.052 0 025 123 0.525 0 257 1 402 1 138 1040o 0 102 1997 572 1.1 1 0 o.046 0.102 11.4 0 47 0.226 1 310 0.128 0.961 0.0o94 1993 578 1 1 1.1 o.ohi 0 019 11.5 0.426 0 196 1.224 0.fl8 o.888 0.066 1994 584 1.1 1.1 0 037 0.017 11.7 o.j384 0 174 l1.3 0 109 0.820 0.078 1995 590 1.1 1.1 0.033 0.014 11 8 0346 0.152 1 067 0 101 0.758 01072 1996 596 1.1 1.1 0 029 0013 11.9 0314 0 135 1 005 00o94 0 706 0.0o66 1997 603 1.1 I 1 0 026 0011 12.1 0283 0 118 0 939 0 007 0 652 o.0o6o 1998 6ii 1.1 1 1 0 023 0009 1232 0255 0104h 0.877 Oo08o 0 602 00o55 1999 6i8 1.1 1.1 0 021 ooo08 123 02 0 091 00818 0074 0.5 0 051 2000 627 1 1 1 1 0 019 0 007 12 5 0 206 0.080 0 764 00o67 0 513 01o46 Tot,l 50 523 45 167 39 311 27 804 67. 975 60 062 96 997 56.8i8 B finft/Cnt Ratio § 89 1 13 1 ANNEX 6.1 IACA Estimates of Area Covered by Fertilizer Applications A. AREA COVERED BY FERTILIZERS AT RE'ERENCE YEARS (percentage of cropped acreage) Fine Sugar- Kharif Rabi WJheat Cotton Rice Cane Fodder Fodder N P205 N P205 N P205 N P205 N P205 N P205 Punjab 1965 15 -- 30 -- 20 -- -- -- -- 1975 50 50 60 30 50 30 70 30 20 -- -- 20 1985 70 70 80 60 70 50 80 60 50 30 30 40 2000 85 85 90 90 90 90 90 90 75 75 75 75 Sind 1965 10 -- 13 -- -6 - 45 __ -- _ - - 1975 25 25 40 20 50 15 20 -- -- -- 1985 70 70 70 40 75 40 40 30 20 30 2000 85 85 90 90 -- -- 90 90 70 70 75 75 Outside 1965 -- -= -- _- __ Areas 1975 15 -- 5 __ 1985 25 15 -_ = -_ 10 5 10 2000 40 25 -_ __ __ __ -- -- 15 10 -_ 20 B. FERTILIZER APPLICATIONS PER CROPPED ACRE 1/ AT REFERENCE YEARS (pounds of nutrients) Fine Sugar- Kharif Rabi 1Jheat Cotton Rice Cane Fodder Fodder N P205 N P205 N P205 N P205 N P205 N P205 Punjab 1965 30 30 50 -- 45 30 75 -- 50 100 1975 50 30 40 30 30 30 60 30 60 -- -- 50 1985 75 50 50 40 50 40 75 35 75 20 20 75 2000 90 60 60 50 70 50 100 40 90 30 20 100 Sind 1965 30 -- 50 -- 30 30 75 -- 50 --le 1975 50 25 4o 20 60 20 60 -- -- -- 1985 75 40 50 35 75 30 75 20 20 75 2000 90 60 60 50 __ -- 100 40 90 30 20 100 Outside 1965 -- -_ Areas 1975 25 -- __ - __ - -_ 10 -- _ 1985 40 25 -- __ __ __ = 15 5 25 2000 50 30 -- -- -- -- -- -- 25 10 -- 4o -L/ Cropped acreage actually receiving fertilizers. ANNEX 6.2 Page 1 PROSPECTS FOR SUPPLY, DISTRIBUTION 1/ AND USE OF FERTILIZER IN WEST PAKISTAN - The use of chemical fertilizers in West Pakistan seems more firmly established than in East Pakistan, and the task of winning acceptance by farmers is not a source of major concern at the present time. The major obstacles to substantial increases in offtake appear to lie within the distribution system. Existing Offtake It is difficult to obtain an accurate picture of past fertilizer offtake for West Pakistan. Distribution has been dispersed under different agencies, and consistent aggregate estimates are not available. Three sets of offtalce figures are presented in Table 1 - one by the Planning Commission, one by AID, and one by an independent source (for the two years of 1963/64 and 1964/65). The Planning Commission estimates show a continuous increase in offtake throughout the Second Plan period, reaching a total of 97,000 tons of N during 1964/65. The AID estimates show a reduction in sales in 1962/63, following a decrease in the subsidy rate to 25 percent. This fall in offtake wss reported in discussion with Government officials in W1est Pakistan, but is not reflected in the official estimates. The AID estimate for 1964/65 is also below the Planning Commi6ision figure. The independent estimate resulted from attempts to adjust the offtake figures to correspond with reports of fertilizer shortages in 1964. It is based on the assumption that the Rural Supply Cooperative Corporation (RSCC) inventory records for 1963/64 showed larger stocks than were actually on hand, and this may have been because fertilizers had been actually released to fariners but were reported as still in stock. The adjustment therefore, increases the estimated offtake for 1963/64, and correspondingly decreases the estimated offtake for 1964/65. There was agreement among all agencies concerned, including AID, that fertilizers are currently in short supply, and that more could be sold at the prevailing price than were available. There were frequent reports of black market prices for fertilizer, but the prices actually paid could not be verified. It therefore seems plausible that increased quantities would be purchased at present prices, but the quantities required to clear the market at present prices are not knoin. Moreover, there are no data which can be used to make such an estimate. Production and Imports Production facilities are currently operating at three locations: Daudkhel (ammonium sulphate); Multan (calcium ammonium nitrate and urea); and Lyallpur (super phosphate). Total capacity is 64,420 tons of N and 3,060 tons of P20. Actual production in any one year since 1960/61 has not exceeded 45,000 tcns of N. 1/ Based onTthe prospects for fertilizer production, distribution and use recently assessed by an IBRD mission. (Feb/March 1966). ANNEX 6.2 Page 2 Offtake began to exceed domestic production in 1963/64, but imports were not increased until stocks had been depleted. The shortage which occurred at the end of the Second Plan period reflected the failure to increase imports during 1964/65 (when they actually declined). Actual offtake in 1965/66, according to data presented by the Planning and Develop- ment Department was at the level of total supplies including 45,450 tons of N imports, or about equal to that for 1964/65. Figures for the production, import, and total supply of fertilizers in West Pakistan are shown in Table 2. Estimated Offtake for Third Plan Period There are several estimates of the volumes which might be absorbed by 1969/70, and these are shown in Table 3 on page 17. The estimate given in the Third Plan documents by the Planning Commission is the most conservative and reflects an earlier stage of thinking about fertilizer requirements than is true for the other estimates. The estimates of Drs. Nagelstein and Vermaat are apparently based on optimum application of fertilizers to all crops in areas where fertilizers have been shown (through fertilizer trials) to yield economic returns. As nearly as can be determined, these optimum applications were reduced by one-half and given as the minimum requirements for 1969/70, but details of the estimation method used were not given in Dr. Nagelstein's report. If this analysis of the estimate is correct, it represents a measure of the theoretical potential for fertilizer use, rather than a considered estimate of probable offtake. The Planning and Development Department estimates (Government of West Pakistan) represent a revision of earlier thinking. The Department now wants to raise Third Plan foodgrain targets to a level of self-suf- ficiency by the end of the Third Plan period. -It assumes this can be done by the addition of 130,000 tons of nutrients to the fertilizer targets for 1969/70, and expects 70 percent of this addition would go on foodgrains. These estimates also call for more balanced use of fertilizers than in the past. The other estimate shown was prepared by Esso Standard Eastern in assessing the market for its proposed urea plant at Mari. No estimate was made for potassic fertilizers, but those for'N and P205 are-remarkably close to the new estimates prepared by the Planning Department. The Esso estimate is based on a division-by-division estimate of the acreage expected to be using fertilizer by 1969/70, and the quantities which would be applied per acre for different crops. Production Plans The Government of West Pakistan now plans on an increase in nitrogen producing capacity to 560,900 tons of N. This represents an increase of 496,480 tons of N over present capacity, or 670 percent. In terms of actual fertilizers, it is an increase of 1,618 tons of nitrogenous fertilizers of the following kinds: urea, ammonium sulphate, and calcium ammonium nitrate. There are also plans to produce an additional 69,000 tons ANNEX 6.2 Page 3 of P205, the nutrient equivalent of 182,000 tons of phosphatic fertilizer. The planned capacity, and the stage of approval as of March 1966 for each proposed plan, are shown in Table 4 on page 18. It -is difficult to forecast how much of the proposed capacity now at the stage of "Finance Sanctioned" would actually become available during the Third Plan period. DistribAtion System The distribution system has undergone changes over the past two years. The ADC was responsible for all fertilizer distribution up to 1964. From that date to mid-1965, the distribution was divided between the ADC, West Pakistan Industrial Development Corporation (PIDC) and the RSCC. The PIDC and ADC together distributed 75 percent of all domestic production and 75 percent of all imports through private dealers, with PIDC retaining the larger share of domestic production. The remaining 25 percent of domestic production and imports was distributed through cooperatives by the RSCC. Since July 1965, the RSCC has been distributing 75 percent of the total available supply of fertilizers Through its cooperatives. The ADC is allocated 25 percent for clistribution in its project areas and for use in the promotion of improved seed in all parts of West Pakistan. This latest change appears to be a temiporary arrangement to curtail some of the existing black market in fertilizers. The Government felt that private dealers were taking advantages of the shortage in supplies, and that cooperatives would ration the limited supplies more equitably among members and other farmers without charging black market prices. Since rumors of black market prices still persist, it appears that the Government's objective has not yet been fully achieved. The present reliance on the RSCC is not likely to be a permanent arrangement, although it would probably be retained until there are sufficient supplies to remove shortages. Government intends to remove the shortages as quickly as possible, after which consideration should again be given to using private dealers as retail agents. One element of private sales activity would become active when the Esso urea plant at Mari begins production In 1968. Esso would depend on its own distribution and sales organization to sell the output df the plant, and would support this sales effort by a techniaal service group of agronomists who would work with farmers to determine properi fertilizer requirements in individual areas. The Government has not permitted Esso to market imported fertilizers, but it can sell directly the quantities produced at its Mari plant. Esso does not intend to provide any credit for fertilizer purchases, but salesmen are supposed to assist farmers in obtaining credit through normal channels. Although the RSCC would bear the major burden of distribution for the near future, it is not well-equipped for this task. It did not have an accurate present stock position of its cooperative outlets, and its reporting and checking procedures have been poor. It had no storage ANNEX 6.2 Page 4 facilities of its own, and did not seem concerned about storage needs. The cooperatives are financially weak, but must pay in advance for fertilizers they receive from RSCC. This may require new loans to cooperatives from sources other than the RSCC. The number of cooperative sales outlets has been inadequate to cover the total market area in the past, but since July there have been no other sources from which farmers can buy (outside of ADC project areas). While the RSCC has a workable distribution plan, the organization has not had the staff or the support necessary to fulfill the function it has agreed to carry out. Storage Facilities As noted above, the RSCC does not have any storage facilities of its own, but is planning to rent godown space in market towns when the need arises. As a general rule, such space is poor in quality and smaIl in size. For the remainder of storage needs, the RSCC has to rely on godowns of the cooperatives. About 2,500 such godowns are scheduled for construction during the Third Plan period, with capacities ranging from 50 to 175 tons. Assuming an average capacity of 100 tons, this would give a total of 250,000 tons of local storage space, plus whatever storage the RSCC is able to rent in different market centers. Using the West Pakistan Planning and Development Department esti- mates of offtake by 1969/70 (e.g. 280,000 tons of N; 85,000 tons of P20s; and 15,000 tons of K 0), the actual volume of fertilizers handled could be upwards of one million tons. Transpor-tation problems are likely to become acute anr there would be need to accumulate stocks at the local level in anticipation of seasonal peak periods. The storage problem would require further careful study, but it seems probable that the anticipated storage facilities would not be adequate to ensure availability of fertilizers to farmers in time for their peak requirements. Credit Facilities Fertilizer sales to farmers are presently in cash, and lack of credit does not seem to be a major factor deterring fertilizer use in West Pakistan at the present time. As long as there are shortages of supply at the official price, additional credit for fertilizer purchases would contribute nothing. In this respect, the situation is quite unlike that in East Pakistan. Fertilizer credit has been issued through the coopera- tives in the past. Cooperatives may grant credit to farmers up to amounts determined either by the share holdings of the borrower, or some multiple of the land revenue he pays. Cooperatives in turn borrow from the Cooperative Banks. Although the RSCC fertilizer distribution plan stipulates that all fertilizer sales would be for cash, the cooperative credit opportunities are available for other agricultural inputs. Cooperative service societies still have a sizeable debt of about Rs. 50 million outstanding from earlier periods when fertilizer was distributed through them for credit. ANNEX 6.2 Page 5 Transport Transport may be a bottleneck to distribution for the next two or three years. The capacity of the railroad to move bulk commodities from Karachi port is now about 150,000 tons per month, or 1.8 million tons per year. Assuming that wheat imports during 1966/67 are as large as anticipated, e.g., 1 to 1.5 million tons, and that one-fifth of wheat imports remain in Karachi, there would be a demand on the railroads of 800 thousand to 1.2 million tons per year. Imports of fertilizers are estimated to be 153,820 tons of N in 1966/67, but the volume in terms of tons of actual fertilizers would depend on the kinds imported. Assuming that they would be two-thirds in urea and one-third in anmonium sulphate, the tonnage of actual fertilizers to be moved would be about 500,000 tons. With maximum estimates of wheat imports, the combined transportation requirements of wheat and fertilizers would use nearly all the available railroad capacity from the port. With smaller wheat imports, or larger proportions of urea, the pressure on the railroads would be somewhat less. There are problems of timing, however -- wheat and fertilizer imports would probably not arrive in an even flow, and there may be difficulties in moving fertilizers to up-country points in time for seasonal peak requirements. If wheat imports gradually decline from the levels estimated for 1966/67, and as domestic production of fertilizers increases (starting in 1968 with the Esso plant), the transport situation may ease. Although the present situation is one of shortage, in which there are more customers than can be supplied, this would not necessarily continue to be true in the future. Using the RSCC as the major distribution agency may be workable under the conditions which exist now, but the long run would require distribution through an agency established and equipped to carry out a strong fertilizer promotion campaign. The use of private dealers could expand the number of retail outlets so that all farmers may acquire fertilizers easily, and on time. Cooperatives could continue to serve as fertilizer sales points in the future, but sole reliance on them unduly restricts tlae potential market coverage. A mixture of private dealers and cooperative sales outlets seems preferable. Planning should therefore take into consideration the development of a distribution system which includes private dealers for some part of total retail sales, and also establish a wholesale agency which could acquire personnel with sales promotion, movement and storage, and technical competence and experience to carry out an effective fertilizer program. In this connection, the plans being prepared by Esso for its sales and distribution system should be studied carefully as a possible model for adoption. There is need to study the storage requirements more carefully than has been done thus far. The ADC registered complaints against private dealers, during the period when they were being used for retail sales, particularly that dealers would not lift adequate stocks in advance of peak demand periods. Consideration should also be given to a series of discounts ANNEX 6.2 Page 6 based on willingness to take stocks off-season and in large quantities. This might encourage private dealers to acquire their owm storage facilities, and shift some of the burden of storage to the private sector. Loans for con- struction of fertilizer storage by dealers should also be studied. The heavy emphasis on nitrogenous fertilizers in West Pakistan has led to an imbalance in the use of different plant nutrients. The N/P ratio in 1964 was 33:1 using the "independent" estimate of N given in Table 1. On the basis of Planning Commis8ion estimates, it would be even lower. No potassic fertilizers have been used at all. The Government does not feel there has been adequate oroof of potash response, and is hesitant to recommend it to farmers. The FAO Soil Fertility Investigations do indicate a need for potash, however, and in much larger proportion than is now being projected for the Third Plan. The implication would be that the projected offtake of nitrogen cannot be sustained indefinitely without greater efforts to promote the use of phosphatic, and perhaps potassic fertilizers. This would be taken into account indrawing up import needs and plans for construction of domestic production capacity. While the Government has reduced the subsidy level from 50 percent to about 30 percent of cost, there is some indication that it would reserve decision on further reductions in the fertilizer subsidy until there has been an opportunity to test the market under the conditions of increased supplies which are expected during 1966/67. This seems to be a wise approach because it is difficult to judge, under present conditions, how much excess demand there actually is at current subsidized prices. Since a larger offtake would result in larger subsidy costs to Government at present rates, there would undoubtedly be pressures to reduce the subsidy rate. Before acceding to such pressure, however, there should be a careful study of the pattern of market growth to determine whether subsidized prices are still needed as an incentive to encourage farmers to use fertilizers. Estimates of Future Offtake Using the independent estimate of nitrogen offtake in 1964/65 shown in Table 1, the rate of growth for the five-year period was 27 percent. On the basis of Planning Commission estimates, this rate would be higher. There is also the fact that shortages occurred during 1964/65, when offtake would have been higher had supplies been available, which would again imply a somewhat higher rate. Still, assuming a rate of 27 percent per annum, the estimated offtake would be 275,200 tons of N by 1969/70. If the further assumption is made that the NPK ratio would be improved to 6:2:1 by 1969/70, offtake would also include 82,600 tons of P205 and 41,300 tons of K20. This estimate is very close to the estimates for N and P205 pro- vided by the Government of Wiest Palcistan and Esso and shown in Table 3. Since these were made by independent procedures, the tendency for all three estimates to cluster around the figure of 275,OOO tons of N and 85,ooo tons of P205 argues in favor of acceptance of these quantities as realistic projections of future offtake. If one further takes into account the fact ANNEX 6.2 Page 7 that strong efforts are being made to introduce Mexican wheat into West Pakistan, and that this requires large applications of nitrogen to give significant yield improvements over local varieties, -continuation of the high annual rate of increase seems quite plausible. This estimate would also appear to justify half of the proposed nitrogen production capacity (Table 4) by 1970, or at least the inclusion of the capacity represented by the Daudkhel plant from among those which have been sanctioned. It should be noted that an offtake of 275,000 tons of N, 85,o0o tons of P205, and say 40,000 tons of K20, will require a very efficient distribution, handling and storage organization. The magnitude of the problem will depend on the kinds of fertilizer used. Excluding the quantities produced and distributed by Esso, the total quantities of fertili- zers to be handled by the Government would range from about 800,000 tons to slightly over one million tons. The smaller figure assumes additional nitrogen would be produced or imported in the form of urea; the larger assumes the additional nitrogen would be available as ammonium sulphate. For the period beyond 1969/70, it seems probable that the annual rate of growth in demand would decline somewhat. The most promising market areas would be the irrigated acreage in the Province, and fertilizer use on this acreage should be fairly widespread by the Fourth Plan period. Further expansion in demand would therefore come largely from farmers who are already using some fertilizer (buit are beginning to use larger quantities per acre than in the past), and from higher cropping intensities. Demand from farmers using fertilizers for the first time should be less of a factor in the future total demand for iertilizers. The stimulus coming from initial adoption of the new Mexican wheat varieties would also be less, although gradual increases should continue as farmers move toward application at the optimum rates for the new varieties. The estimates ior 1974/75 are therefore based on the following assumptions: (a) The culturable irrigated acreage in West Pakistan would be about 29 million acres in 1974/75, and the average intensity of cultivation would be about 107 percent. The total ir- rigated acreage cropped would thus be about 37 million acres. (b) Farmers would be applying an average of about 35 pounds of nitrogen per acre on 31 million acres, or a total of 470,000 tons of N. (c) It is assumed that there would be continuing efforts to improve the balance in fertilizer application, and that by 1974-75 the NP ratio would be 2 to 1. The estimated demand for phosphatic fertilizer would then be 235,000 tons of P20g. ANNEX 6.2 Page 5 The estimated annual increase in requirements, and comparison against estimated growth of local production capacity, is given in Table 6. Demand for fertilizers should continue to grow after 1974/75 as cropping intensities increase toward an ultimate level of about 135 percent, and as the average application per acre rises toward the optimum levels for the different crops grown. However, total offtake would be expected to grow at substantially reduced rates. Table 1 PAST AND PRESENT FERTILIZER OFFTAKE IN WEST PAKISTAN Planning Independent Year Commission AID Estimate (in tons of Nitrogen) 1960/61 31,100 31,706 1961/62 37,200 41,003 1962/63 42,900 33,066 - 1/ 1963/64 62,400 1/ 67,913 76,100 - 1964/65 97,000 - 77,917 2/ 83,300 2/ 1/ Estimated. Table 2 WEST PAKISTAN Past and Present Supplies Total Year Production Imports Supply (in tons of Nitrogen) 1960/61 10,917 36,467 47,384 1961/62 13,112 51,335 64,447 1962/63 40,790 10,084 50,874 1963/64 43,757 10,084 53,841 1964/65 44,206 1/ 3,199 1/ 47,405 1965/66 45,000 - 459440 90,440 - 1/ Estimates. ANNEX 6.2 Page 9 Table 3 WEST PAKISTAN\ Estimated Fertilizer Requirements by 1969/70 N (K20 (in tons of nutrients) I. Third Plan Program 198,000 37,000 15,000 II. Planning Department W.P. 280,000 85,00O 15,000 III. Esso Standard Eastern 270,462 869830 - IV. Nagelstein/Vermaat 1/ 340,000 210,000 110,000 1/ Estimate represents about half the expert's assessment of crop requirements. ANNEX 6.2 Page 10 Table 4 WEST PAKISTAN Production, Existing and Proposed Type of Capacity in Capacity in Nutrients Location Fertilizer Fertilizers N P205 ------------ in tons ------------ Existing Daudkhel Amm. Sulph. 50,000 l0,500 Multan Ca. Amm. Nitr. 103,000 26,780 Multan Urea 59,000 27,140 - Lyallpur Super Phosph. 18,000 - 3,060 Subtotal 230,000 64,420 3,060 Construction Approved Daudkhel Amm. Sulph. 40,000 8,400 _ Multan Ca. Am. Nitr. 60,000 15,600 - Multan Urea 15,000 6,900 - Lyallpur Super Phosph. 32,000 - 5,44o Esso Urea 173,000 79,580 - Subtotal 320,000 110,480 5,440 Finance Sanctioned Kandhkot Urea 500,000 230,000 - Karachi TSP 150,000 - 69,000 Daudkhel Amm. Sulph. 600,000 156,000 - Subtotal 1,250,000 386,ooo 69,ooo TOTAL 1,800,000 560,900 77,500 Source: Planning and Development Department - Government of West Pakistan, Marc 1966. ANNEX 6.2 Page 11 Table 5 PROJECTED FERTILIZER PRODUCTION AND DEMAND (in '000 tons of nutrient) Surplus (+) Year Estimated Demand Production or Deficit (_) N P205 N P2-5 N P205 1965/66 106 8 64 3 (-) 42 (-) 5 1966/67 134 14 64 3 (-) 70 (_) 11 1967/68 171 26 80 9 (-) 91 (-) 17 1968/69 217 47 135 78 (-) 82 (+) 31 1969/70 275 85 175 78 (-)100 (-) 7 1970/71 306 105 353 78 (+) 47 (-) 27 1971/72 341 130 531 78 (+)190 (-) 52 1972/73 379 155 531 78 (+)152 (-) 77 1973/74 422 195 531 78 (+)1o9 (-)117 1974/75 470 235 531 78 (+) 61 (-)157 I ANNEX 6.3 Page 1 Extracts from the Program for Artificial Insemination in West Pakistan Proposed by IACA 1. General Pakistan's agriculture is based on bullock power. According to the 1960 census, some seven million bullocks and 2.5 million other wwrk animals (equines, buffaloes, camels) provide the bulk of the draft requirements. There, figures indicate that the Pakistani farmer depends heavily on draft-type bovines, bred from draft-type cows. Such cows are generally speaking poor milk producers (since no selection was exercised for this quality). The water buffalo provides the bulk of West Pakistants milk supply. According to the same census, there were four million cows and five million water buffaloes whose milk production on average was about twice that of the draft cows. Although current yields are better, the buffalo-cow is not a very efficient convertor of roughage into milk because of higher requirements for body maintenance and the secretion of milk high in fat content. Moreover, the ultimate potential of milk production of buffaloes is not as high as that of dairy-type zebus such as Sahiwal and Red Sindi. Both these breeds are available in West Pakistan. With increasing mechanization the need of draft stock will decline while Pakistan will have to safeguard its growing demand of milk for human comsumption. Therefore, the future policy should aim at gradually replacing both draft and buffalo stock by improved dairy stock. Sahiwal and Red Sindi would be the breeds of choice as both are adapted to climatic and other conditions in Pakistan - the Sahiwal in the Punjab (Montgomery) and Red Sindi in the South - and their potential for milk production has long been known. 2. Breeding of Sahiwal and Red Sindi Cattle Since there is no herd registration book for these breeds of cattle, there is no reliable estimate of the numbers which are available in West Pakistan. Furthermore, there is a wide variability within the population and the qiustion of classifying any individual as Sahiwal or Red Sindi is more of acacdemic than of practical importance. What does matter is that pure bred Sahiwal and Red Sindi stock are being bred on Government Livestock Farms at Bahaduranagar and Malir respectively. It can therefore be safely assumed that present numbers of certified stock are too small to provide Pakistan in the near future with enough high grade stock by direct breeding methods. In view of the shortness of time, the most effective way to achieve results is by using artificial insemination (A.I.) on a large scale, making use of draft type and milk animals as dams. ANINEX 6.3 Page 2 3. Improvement by Up-grading By using successive female offspring, always crossed to a male of the desired breed, it is possible to create a desirable herd. With four such "back-crosses", the final offspring will have a 31/32 pro- portion of the breed and, for all practical purposes, can be classified as pure bred. With zebu cattle this can be achieved in a period of some 13 to 15 years. By starting in 1965 from any draft type cow, and conse- quently grading up, the offspring would be "pure bred" by 1980. To guarantee quality stock it is imperative to use only semen of the .best bulls available, and by practising artificial insemination, the widest possible coverage is assured. 4. A.I. Organization The A.I. Scheme in Pakistan was initiated at the College of Animal Husbandry in Lahore. In 1963 the A.I. section was transferred to the Directorate of Livestock Farms. According to the 1962-1963 Annual Report of the Directorate, 924 animals (564 buffaloes and 360 cows) have been inseminated. The total in the 1963-1964 Report increased to 1,125 animals. It was anticipated that about 5,000 inseminations could be expected in the 1964-1965 period. Semen has been shipped to other centres in the Basin. It is of utmost importance to develop this young organization into a country-wide service. 5. Area to be Serviced Ultimately, over 30 million acres would be irrigated in the Indus Basin, and this represents some 51,000 square miles or 132,000 km2. Outside the Indus Basin some 11,000,000 acres of barani and sailaba land would be cultivated. Consequently, livestock (cattle) would be concentrated in an area of around 40 million acres. The A.I. organization should (eventually) cover this area. Density of Livestock. According to the 1960 census the density of livestock (cattle and buffaloes) in West Pakistan was as follows: (S.M. Ishaq, Livestock Production in West Pakistan Bulletin No. 3, 1964, Directorate of Livestock Farms). ANNEX 6.3 Page 3 Density per square mile Trotal area in square Cattle Buffaloes Work Division miles Animals Peshawar 28,153 20 15 22 D.I. Khan 11,130 25 5 19 Rawalpindi 11,206 102 67 101 Sargodha 17,095 82 105 88 Lahore 8,907 49 177 112 Multan 24,826 60 58 75 Bahawalpur 17,508 26 33 56 Khairpur 20,293 34 38 40 Hyderabad 36,821 2h 16 20 Total/average Indus Plains 175,939 + 50 + 60 + 60 Quetta 53,115 4 - 4 Kalat 72,944 1 - 3 Total/average 126,059 + 3 + 3.5 Karachi 8,405 15 1 7 According to these data most of the cattle are concentrated in the Indus Basin with an average density of 50 heads of cattle, 60 buffaloes and 60 work animals per topographical square mile. Bearing in mind that less than one-third of this area is under irrigation and allowing for followers and bulls, the density of adult female cows and buffaloes per irrigated square mile can be estimated at some 80 and 90 head respectively. With increasing mechanization and decrealsing numbers of draft animals the density of female stock would increase accordingly. 6. Development of A.I. Service Recognizing the necessity to increase Pakistan's milk herd rapidly and considering the area to be served and the expected density per surface unit, a proposal for possible development of A.I. would be as follows: It is assumed that about 12 million milk animals would be needed by the year 2000 to meet demands. Further, the period to get a basin-wide organization "off the ground" will occupy some ten years. Rapid expansion would thus only be feasible after 1975, depending on improved communications (telephone, road network), which are the most important requisites for the ANNEX 6.3 Page 4~ proper functioning of the artificial insemination program on the scale required 1965-1975 : building up period; After 1975: rapid expansion (communications). The ultimate magnitude of the organization depends, of course, on the goals set. This program is aiming at a level of one million inseminations by 1985 and five million inseminations by 2000. The number of inseminations performed annually by each operator would increase as communications improve. It is assumed that the efficiency of inseminators would be as follows: 1965 No rural telephone (or radio) network, few and bad roads: 250 inseminations/inseminator/year 1975 improved communications: 1,000 1 It ,, 1985 if if 2,000 It 2000 I if 3,000 if if It (including inseminations performed by relief personnel). Course of A.I. Program and Number of Inseminators Required Number of Inseminations Inseminations per Inseminators Year x 1000 Inseminator Required 1965 5 250 20 1975 50 1,000 50 1985 1,000 2,000 500 2000 5,000 3,000 1,700 Assuming a team of two inseminators (later three inseminatcrs in areas with very dense cattle populations) operating from an A.I. centre and considering the area to be served ultimately the number of A.I. centres to be established would be: Number of A.I. Centres Operating Year 1965 10 1975 25 1985 250 2000 500 ANNEX 6.3 Page 5 Number of A.I. Centres to be Established Period Total Per Year 1965 - 1975 15 1.5 1975 - 1985 225 22.5 1985 - 2000 250 17.0 On an average it is assumed that the inseminators would operate in an irrigated area within a radius of ten km from the centre. This area covers 121 sq. miles (314 km2, 77,440 acres, 31,340 ha.). At present the average cattle population on 121 (irrigated) square miles would amount to some 9,000-10,000 adult-female cattle and some 10,000-11,000 adult buffaloes (the latter gradually to be replaced by dairy cows). Allowing for future increase in female stock as a result of mechanized farming, an area of 121 square miles can be considered to be of adequate size to accommodate two or even three inseminators. Area Covered by A.I. Centres Year Area in square miles Area in acres x 1000 1965, 1,210 744 1975 3,025 1,936 1985 30,250 19,360 2000 60,500 38,720 From these figures it can be concluded that by 2000 the total cultivated area would be covered, allowing for facilities in Karachi, Quetta and Kalat Divi- sions. To 'ensure proper supply, coordination and supervision, it is supposed that one in every ten A.I. centres will act as Head Centre, supervising an area of 1,210 square miles (774,400 acres, 313,400 ha.). Again, each hundredth centre, commanding an area of 12,100 square miles (radius about 125 miles, 7,744,000 acres, 3,134,000 ha.) as Regional Centre is assumed to supply, coordinate and supervise its area. Finally, Headquarters at Lahore would supervise and coordinate the Regional Centres. Structure of the A.I. Organization Headquarters Regional Head A.I. Total Year (Lahore) Centres Centres Centres Centres 1965 1 - 9 10 1975 1 - 3 21 25 1985 1 3 25 221 250 2000 1 5 50 444 500 ANNEX 6.3 Page76 Staff and Personnel (a) Technical. The whole organization should be responsible to the Director of Livestock Farms and daily supervision should be executed by a Director of A.I. stationed at Headquarters in Lahore. The Regional Centres are to be supervised by Regional A.I. Officers with a M.Sc. degree. The Head Centres should be supervised by A.I. Officers with a B.Sc. degree or comparab2 qualifications. The A.I. Centres finally would be supervised by Head Insemi- nators. Other graduate staff would be needed at Lahore Headquarters to conduc research etc. Some three to four veterinary surgeons/biologists would be need assisted by laboratory personnel. (b) Administrative. For the purpose of record keeping and accounti the organization would have to depend on clerical staff. It is proposed to employ one clerk per A.I. Centre, two clerks per Head Centre, three clerks per Regional Centre and five clerks at Headquarters. (c) Training and in-service training. To train and instruct the inseminators two to four instructors are supposed to be on duty at Lahore Headquarters. (d) Labor and drivers. The labor requirement is closely related tc the number of bulls kept by the organization. Drivers would be needed according to the vehicle-fleet of the organization. Staff Requirements A.I. Organization Technical - University Graduates Headquarters Lahore Regional Centres Head Centres Year (M.Sc.) (M.Sc.) (B.Sc.) To 1965 1 + 3 - 1975 1 + 3 _ 3 1985 1 + 4 3 25 3 2000 1 + 4 5 50 6 Inseminator - Requirements Year 1965 20 1975 50 1985 500 2000 1,700 ANNEX 6.3 Page 7 Administrative Personnel (clerks and head clerks) Requirement Headquarters. Regional Head A.I. Year Lahore Centres Centres Centres Total 1965 3 _ 9 12 1975 3 - 6 21 30 1985 5 9 50 221 285 2000 5 15 100 444 564 Labor and Drivers' Requirements (approx.) Year Labor Drivers . . 1965 10 1 - . . s 1975 20 3 1985 40 30 . 2000 250 60 Equipment In all probability both "normal" and deep-frozen semen would be used during the coming decades. Deep-frozen semen requires freezing cabinets cooling to - 800C. (electric, solid C02, fluid nitrogen, etc.) and would only be handled at Lahore and Regional Centres. Head Centres and A.I. Centres will generally use "normal" semen, stored in refrigerators (electric or kerosine). Refrigeration Equipment Semen Banks Refrigerators Year (deep-frozen) (electric or kerosine) 1965 - 10 1975 1 25 1985 4 250 2000 6 500 Other A.I. Equipment Artificial vaginas, collectors, glass-work, pipettes, syringes, sterilizing cabinets, microscopes, chemicals, diluters, thermos flasks, transport boxes, inseminators'bags, aprons, gloves, cleaning equipment, administration material, etc. ANNEX 6.3 Page8 Transport Semen would be transported by air, road and rail. It is supposed that inseminators would use light motorbicycles. Head Centres and Regional Centres would operate one and two four-wheel drive vehicles respectively. Personnel Transport Requirements Year Vehicles Motorcycles 1965 1 20 1975 3 45 1985 30 500 2000 60 1,700 Buildings and Accommodation Accommodation of the A.I. Centres is not governed by rigid rules. Inseminators may operate from veterinary hospitals, Union Council buildings or any other Government premises. Basically only one room would be needed. The same holds true for Head Centres, except that a minimum of two rooms would be needed. Regional Centres, however, would have to be established, but can be adjacent to other official buildings. The Lahore Centre would need expansi( Headquarters, Regional Centres and some Head Centres would accommodate A.I. bulls (buUl pens, stables, etc.). A.I. Buildings (stables) Investment in stables estimated at Rs. 2,000/bull. A.I. bulls to be stationed at Lahore, Multan, Khairpur, Hyderabad, Karachi, Peshawar, Quetta and other locations as deemed necessary. Decentralization of bulls would cut down on semen transport costs (two to three times per week in case of "normal semen") and bulls should be demonstrated to farmers in their areas. A.I. Bulls The number of bulls needed is open to discussion. It would techni- cally be feasible to use a minimum of top quality bulls but such a policy would result in a narrow breeding basis. The following number of insemi- nations per bull per year may be expected. Inseminations per Bull per Year Year Number 1965 1,500 1975 2,000 1985 3,000 2000 5,000 ANNEX 6.3 Page 9 A.I. Bull (Sahiwal and Red Sindi) Requirement Year Inseminations x 1000 No. A.I. Bulls (approx.) 1965 5 5 1975 50 25 1985 1,000 350 2000 5,000 1,000 Initially all bulls would be supplied by the Government Livestock Farms. In future the purchase of bulls from private breeders may be possible. 7. Impact of A.I. on the milk herd As it is unlikely, and also undesirable, to render A.I. compulsory it is not possible to define the impact of A.I. with any degree of accuracy. Eventually the farmer is the decisive factor. By using A.I. any farmer can raise milk production and in some 15 years can own "pure bred" cattle, even starting from scrub animals. It is to be anticipated that a growing number of farmers will abide by A.I., but others would fail to keep in step and return to their old habits. Also it is not to be expected that any organized Herd Book organi- zation would emerge in Pakistan in the very near future. Therefore, it would not be possible to keep trace of all animals born from A.I. As a consequence it would be safe to assume that during the following decades more and more "grade animals" would participate in the production of milk for West Pakistan's human population. These "grade" cows (particularly the first cross) would on the average possess a greater milk production potential than their dams. However, it is only with better management, feeding and sanitation that higher yields would also be realized. A calculation of' A.I. calves born is presented below. It is assumed that 1.8 inseminations would be needed for every calf born and that female/ male calf ratio would be 1:1. No. of A.I.-Calves Born (approx.) Year Total Calves Born Heifer Calves Born 1965/66 2,778 1,389 1975/76 27,778 13,889 1985/86 555,555 277,778 2000/01 2,777,778 1,388,889 ANNEX 6.3 Page 10 8. Financial It is not possible, within the limits of this study, to present a detailed outline concerning the investments required to launch the A.I.- organization along the proposed levels of input. Important items, such as buildings and accommodations cannot be defined in this stage, as no strict rules can be applied. Cost-estimates, based on current levels of salaries, wages and costs, concerning the exploitation of the A.I.-organization in the year 2000 are set out below: Estimates Exploitation Costs A.I.-Organization (2000) Salaries and Wages Rs. x 1000 Inseminators @ Rs. 2000 1,700 3,400 Graduate staff @ Rs. 6000 60 360 Clerks @ Rs. 2000 564 1,128 Instructors and Others 42 Drivers @ Rs. 2000 60 120 Laborers @ Rs. 1000 250 250 Total Rs. 5,300 Transport Rs. x 1000 Motorbikes depr. 2 year-s incl. exploitation and spares @ Rs. 600/bike/year 1,700 1,020 Vehicles @ 15000 kin/year @ Rs. 1/km (all in) 60 9oo Air freight, railroad 50 Total Rs. 1,970 Exploitation Centres Rs. x 1000 A.I.-equipment, electricity, Kerosine etc. A.I.-centres @ Rs. 1000(444) 444 Head-centres @ Rs. 10000(50) 500 Regional centres @ Rs.25000(5) 125 Headquarters Lahore (1) 130 Total Rs. 1,199 ANNEX 6.3 Page 11 Rs. x 1000 Purchase A.I. bulls and upkeep @ Rs. 5000/bull (useful 'life 5 years) 200 1,000 Upkeep Rs. 1500/bull/year 1,000 1.500 Total Rs. 2,500 Overhead administration 405% of total salaries 2,120 Upkeep and maintenance buildings/stables 750 Miscellaneous 1,161 Grand total Rs. 15,000 According to these estimates the exploitation costs of the organization will amount to Rs. 15 million in the year 2000. Revenues. Having his cattle served always involves costs to the farmer. (Upkeep of bull, service fee etc.). Therefore it is realistic to assume that the Pakistani farmer would have to pay for A.I.-services rendered. (Presently A.I. is performed free of charges in West Pakistan). The normal procedure is -to charge the farmer for every first insemination and perform a second and third insemination of the same animal that has not taken, within a certain limit of time, free of charge. However, as both the Sahiwal and Red Sindi are uniformly colored animals and as it would not be possible to keep trace of individuals, it is proposed to charge per insemination performed. The fee to be paid is, again, open to discussion but it should be borne in mind that the farmer, by means of the A.I. organization, is in a position to improve his stock con- siderably, warranting reasonable financial sacrifices on his part. Chargeable Inseminations and Exploitation Costs of A.I. Organization Year Inseminations x 1000 Exploitation Costs x Rs. 1000 2000 5,000 15,000 To meet exploitation costs in 2000 the insemination fee would amount to Rs. three per insemination. By charging Rs. five - which is a very reasonable fee in our opinion - total revenues would amount to Rs. 25 million in 2000, leading to a balance of Rs. ten million respectively. ANNEX 6.3 Page 12 Year Exploitation Costs Revenue Balance (Rs. 1( 2000 15,000 25,000 10,000 9. Conclusions and Remarks (a) Recognizing the need to build up the milk herd of West Pakistan (Sahiwal, Red Sindi) in a relatively short span of time, the develop- ment of a country-wide Artificial Insemination Organization is of paramount importance. (b) At present the basis of such organization is operating in West Pakistan, under the Directorate of Livestock Farms. (c) A preliminary attempt to envisage the A.I. organization has been made in this study. Goals have been set at a level of five million inseminations in the year 2000. (d) From the figures presented it can be concluded that neither manpower, availability of bulls, transport facilities nor invest- ments, can be considered as constraints. Financially the organi- zation can ultimately be made self-supporting or a paying pro- position by adjusting the insemination fee between reasonable and realistic margins. (e) The early selection of A.I. bulls and increasing their numbers is of utmost importance. (f) It should be pointed out that constraints may be expected in the sphere of communications (rural telephone connections, roads) and the individual attitude of farmers (superstition, religious objections against A.I., ignorance, etc.) (g) In our opinion the ultimate success or failure of A.I. in Pakistan would depend on communications. The scheme calls for some 4,000 rural telephone connections within the Indus Basin. It should be also borne in mind that both mechanization and pest control are equally dependent on good rural communications. (h) The organization described pertains to the propagation of Sahiwal and Red Sindi. The same organization is, of course, capable of also inseminating buffaloes and draft cattle as practiced at present. (i) The organization is strictly a technical organization and should be operated as such. Any activities aiming at extension to farmers, breeding associations, milk control associations, etc. should be executed by other bodies (extension service, Rural Councils, etc.) Indicative Estimate of Public Investment Expenditures 1, 7.1 for Water Development during Third and Fourth Plan Periods - (1965/66 to 1974/75) Irrigation Tubewells Surfacs Small Flood Tile Investi- Not On-Outng New Drainagse Canals Schmnes Pritection Drainage gations Allocated Total rd Plan Allocatinns: --------------------(Rs. million)------------------ baj Doab 251 7 258 echna Doab 222 52 51 1 16 342 ari Doab 47 111 7 23 188 utlej Left Bank 88 2 1 91 ower Indus 160 61 183 141 37 11 593 hal and Indus Right Bank 147 5 1 20 3 3 179 eshawar Vale and Swat 2 4 36 5 1 48 utside Areas 11 6 337 3 9 366 Subtotal 780 73 -177 3i76 4 39 7i 2 ,065 ms not Allocated by Regions: rrigation -Txen a24 - -- lood Protection 25 nvestigations 170 .1scellaneous (WAPDA) 25 Subtotal 1,790 1,790 rd Plan: TOTAL 780 264 363 173 376 49 39 21 1,790 3,855 .rth Plan Allocations: haj Doab 32 32 echna Dfab 105 66 64 6 241 lari Dsab 345 72 42 23 482 utlej Left Bank 303 63 366 owsr Indus 454 315 138 161 40 1,098 hal and Indus Right Bank 66 43 5 114 'eshawar Vale and Swat 4 2 6 utside Areas 92 92 Subtotal 105 1,234 fl2 ams not Allocated by gegions: :rrigation - Tarbela 2,789 lood Protection 75 5/ hvestigations 200 liscellaneous (WAPDA) 30 Subtotal 3,09 3,o94 Lrth Plan: TOTAL 105 1,234 516 258 94 184 40 3,094 5,525 HND TOTAL THIRD AND FOURTH PLAN 885 1 498 879 431 470 49 223 61 4 884 9,380 Based on proposed Action Program inclusive af major dam construction and other continuing investment activities as identified in IACA's regional investment programs; figures rounded and net interest durmng construction. Exclusive of power transmission and distribution; on average about Rs. 120,000/well. Inclusive of Chasma Rs. 105 million (raising plus additional cost of land) and general irrigation works Rs. 51 million. The allocation shown is inclusLve of power facilities as contained in the financial estimates given in Volume III of the Bank Group's report. Pinvisional figure based on Third Plan level of expenditures; to be reviewed in accordance with program of Flood Contrl Commission. ANNEX 7.1 IACA Proposals for Allocation of Public Investments in Water Development Page 2 for Third and Fourth Five-Year Plan (exclusive of Indus Treaty Works and MaJor Dam Construction) Tubewells Irrigation On-17 Surface Small Flood Tile Investi- Not j2Ang New Drainage Canals Schemes Protection Drainage gations Allocated Total Plan Allocations: Doab 233 7 240 a Doab 266 30 51 1 16 364 Doab 52 ll 7 23 193 :j Left Bank 62 2 1 65 r Indus 39 192 183 laL 37 11 603 and Indus Right Bank 175 5 1 20 3 3 207 iwar Vale and Swat 2 4 36 5 1 48 Lde Areas 11 6 337 3 9 366 Sub-total: 713 352 363 173 376 49 39 21 2,086 3 not allocated by 3gions: rrigation 51 Lood Protection 25 ivestigations 178 Lscellaneous (WAPDA) 25 Sub-total: 279 279 I Plan: TOTAL 713 352 363 173 376 49 39 21 279 2,365 Plan Allocationst Doab 32 32 ia Doab 78 107 614 6 255 Doab 372 72 42 23 509 :j Left Bank 3714 63 437 Indus 313 305 138 161 40 957 and Indus Right Bank 66 43 5 114 rwar Vale and Swat 4 2 6 Lde Areas 92 92 Sub-total: 78 1,232 516 258 94 184 40 2,402 3 not allocated by :gions: ivestigations 200 200 th Plant TOTAL 78 1,232 516 258 914 184 40 200 2,602 [OTAL THIRD AND FOURTH PLAN 791 1,584: 879 431 470 49 223 61 479 4,967 enditures of on-going tubewell projects reflect phasing under original IACA program. ANNEX 8.1 Page 1 Definition of Developrmcntal Activities Eztployedim GPV Projections The major assumptions adopted by the Bank Group ,in its projections of future agricultural production have been summarized in the text of Chapter VIII. This Annex provides further details on certain of these assumptions in order to indicate more precisely the manner in which the assumptions were applied. On-Going Pro,ject Areas. The Bank Group has adopted the following estimates of acreage included in the On-Going Project areas: SCARP I 1.080 million acres SCARP II 1.551 SCARP III 0.934 SCARP IV 1.660 Subtotal SCARP I to IV .225 Khairpur (excluding saline areas) 0.300 Total On-Going Project Areas 5.525 million acres Deferred Project Areas. In estimating production from the Deferred Project Areas located within the canal commanded areas of the Basin, the Bank Group has found it useful to relate the projections to two categories of water availability up to 1975: (a) areas to be covered by private tubewells, and (b) the remainder of the canal commanded area. Further, because some of the expected private tubewell development in the Basin would take place within the IACA Project areas and the On-Going Project areas, such private wells would need to be excluded from -the total number of private tubewells in crder to derive the number operating under category (a) above. The numbers of private tubewells estimated to be in operation in Deferred Project areas are therefore as follows: Pr2jections of Private Tubewell Installation 1965 1975 (in thousand wells) Total Private Tubewells in Canal Commanded Areas 29.0 38.5 Less: On-Going Project Areas 7.8 - IACA Project Areas 5.6 1.0 Deferred Projec-b Areas Tubewells 6- 37.5 Private Tubewell Contribution. The contribution of private wells in the On-Going Project areas and IACA Project areas is accounted for in the pro- duction estimates for these areas. The following assumptions were made for the Deferred Project areas in the Basin. The Bank Group has assumed that during the period 1965-75 each private tubewell there would command about 100 acres CCA at a cropping intensity of 125 percent, though with some degree of underwater- ing. The estimated 15.6 thousand private wells in the Deferred Project areas ANNEX 8.1 Page 2 would thus represent a CCA of 1.56 million acres, or a cropped acreage of 1.95 million acres in 1965. Since the full extent of the Deferred Project areas is 18.35 million acres CCA, the remainder is therefore 16.79 million acres CCA (18.35 million less 1.56 million acres). This remainder, which includes some of the best irrigated areas, was given practically no increase in cropping intensity (e.g., 96.0 percent), or a cropped acreage of 16.2 million acres. The Bank Group has assumed that a gradual change would take place in private tubewell operation between 1965 and 1975. For one thing, the number of private wells in the Deferred Project areas would increase from 15.6 thousand to 37.5 thousand over this period. Secondly, with rising yields (due to improvements in farming practice and increased inputs) there would be less incentive to underirrigate, and the CCA per tubewell would gradually drop to 80 acres. Thirdly, the cropping intensity would rise to 1h0 percent by 1975. The 37.5 thousand private tubewells expected by 1975 would thus command a CCA of 3.0 million acres and a cropped area of 4.2 million acres. The remainder of 15.35 million acres CCA (18.35 million less 3.0 million acres) was given a modest increase in cropping intensity to 105 percent by 1975, or a cropped acreage of 16.19 million acres. After 1975, the contribution of private tubewells is assumed to be replaced by further public groundwater development and by additional surface water, and an average intensity of 130 percent would be attained for all the Deferred Project areas by 1985. From 1985 to 2000 this intensity would gradually rise to a maximum of 150 percent. The growth rate applied to the Deferred Project areas after 1975 was similar to tblab used for tihe areas with projects because water availability by that time would be comparable in all commanded parts of the Basin. Outside Areas. This area consists of lands within the Indus Basin, but not commanded by the canal system as well as cultivated lands outside the Basin which may partially benefit from small irrigation schemes. Considerable private tubewell development is also expected to take place in the outside areas increasing from an estimated 5,000 wells in 1965 to 25,000 wells by 1985. The acreage estimate used in the following tables is also assumed to represent the vast marginal grazing areas for which no reliable data. are available. IACA Projections Of Growth Of Agricultural Production Production as Total GPV in Rupees Billions; Cropped Acreage in Millions;. Yield as GPV Per Acre in Rupees 1965 1975 1985 2000 CCA Crop- GPV Crop- GPV -rop- GPV Crop- GPV Millions ped per Total ped per Total ped per Total ped per Total of Acres Acres Acre GPV Acres Acre GPV Acres Acre GPV Acres Acre GPV On-Going Project Areas 4.86 4.49 6.07 7.15 7.18 261 346 510 740 1.17 2.10 3.65 5.31 IACA Project 5.65 Areas 5.25 6.89 8.40 8.42 229 348 518 762 1.20 2.4o 4.35 6.40 Deferred 18.92 Project Areas 16.61 20.27 22.57 28.54 236 304 485 707 4.40 6.09 10.95 20.18 Totals for 29.43 Basin 28.35 33.23 38.12 44.14 (Commanded) 239 319 497 722 6.77 10.59 18.95 31.89- Outside Areas - (Un-Commanded) 12.37 12.96 13.76 14.45 156 214 304 493 1.93 2.77 4.19 7.15 Totals for - West 40.72 46.19 51.88 58.99 Pakistan 213 289 446 666 8.70 13.36 23.14 39.04 I-J 1965-1975 1975-1985 1985-2000 1965-2000 Crop- Crop- Crop- Crop- ped Total ped Total ped Total ped Total Acres Yield GPV Acres Yield GPV Acres Yield GPV Acres Yield GPV On-Going 3.0 1.6 0 1.4 Project Areas 2.8 64.0 2.5 3.0 6.0 5.7 2.5 4.14 IACA Project 2.8 2.0 0 1.14 Areas 14.14 4.1 2.6 3.5 7.2 6.1 2.6 4.9 Deferred 0.9 1.0 1.6 1.3 Project Areas 2.6 34.8 6o 2.5 4.2 31 Totals for 1.6 1.14 0.9 1.3 Basin 2.9 14.5 2.5 3.2 (Commanded) 4.6 6.o 3.5 4.5 Outside Areas 0.5 o.6 0.3 0.4 (Un-Commanded) 3.2 37 .5 4.23.3 3.6 3.48 Totals for 1.3 1.2 0.9 1.0 West 3.1 14.14 2.7 3.3 Pakistan 4.3 5.6 3.5 4.3 The increase in livestock production attributed to the Outside areas makes a major contribution to the growth of GPV. The relative contributions are: Crops 2.3 2.1 1.5 2.0 Livestock 5.1 5.4 4.6 5.0 Bank Group's Projections of Growth of Agricultural Production Cropped Acreage and Yield Per Acre Production as Total GPV in Rupees Billions; Cropped Acreage in Millions; Yield as GPV Per Acre in Rupees 1965 1975 1985 2000 CCA Crop- GPV Crop- GPV Crop- GPV Crop- GPV Millions ped per Total ped per Total ped per Total ped per Total of Acres Acres Acre GPV Acres Acre GPV Acres Acre GPV Acres Acre GPV On-Going 5.53 Project Areas 5.03 7.51 8.29 8.29 261 375 551 760 1.30 2.82 4.57 6.30 IACA Project 5.76 Areas 5.27 _ 6.89 8.40 8.42 227 299 469 760 1.19 2.06 3.94 6.40 Deferred 18.35 Project Areas 18.05 20.39 23.85 27.53 236 330 469 760 4.27 6.74 11.19 20.92 Totals for 29.64 Basin 28.35 34.79 40.54 44.24 (Commanded) 239 334 486 760 6.77 11.62 19.70 33.62 Outside Areas - (Un-Commanded) 12.37 13.05 13.76 14.45 156 216 305 493 1.93 2.81 4.19 7.15 Totals for - West 40.72 47.84 54.30 58.68 Pakistan 214 302 440 695 8.70 14.43 23.90 4°-77 Compound Annual Growth From Bank Group's Projections 1965-1975 1975-1985 1985-2000 1965-2000 CD Crop- Crop- Crop. Crop-. ped Total ped Total ped Total ped Total Acrea Yield GPV Acres Yield GPV Acres Yield GPV Acres Yield GPV On-Going 4.1 1.0 0 1.4 Project Areas 3.7 4.0 2.2 3.1 8.0 5.0 2.2 4.6 IACA Project 2.7 2.0 0 1.4 Areas 2.8 4.6 3.3 3.5 5.6 6.7 3.3 4.9 Deferred 1.3 1.6 0.9 1.2 Project Areas 3.4 3.5 3.3 3.4 4.7 5.2 4.2 4.7 Totals for 2.1 1.5 o.6 1.3 Basin 3.4 3.9 3.0 3.4 (Commanded) 5.5 5.4 3.6 4.7 Outside Areas o.6 o.6 0.3 0.4 (Un_Commanded) 3.3 3.5 3.2 3.4 399 4.1 3.6 3.8 Totals for 1.6 1.3 0.5 1.0 West 3.5 3.9 3.0 3.4 Pakistan 5*2 5.2 3.6 4.5 ANNEX 8.4 Page 1 Assumptions Used in Estimating Gross Value Added The Bank Group has attempted to follow official National Accounts procedures in preparing projections of gross value added by the agricultural sector. It has therefore been necessary to modify the methodology and assumptions used by IACA in certain respects because of the nature of the " data. The major changes include the following: (i) An upward price adjustment because official 1959/60 prices are 5.0 percent above IACA prices. (ii) The non-agricultural -sector costs subtracted from the gross production value are estimates which relate to the input assumptions adopted by the Bank Group in making its projections, rather than the cost allowances used in official estimates of gross value added or the IACA estimates. (iii) An allowance of four percent of the gross value added by crops is provided to account for non-reporting areas, and this is the same allowance made in official estimates of gross value added. This allowance has been omitted in the IACA projections. (iv) Gross value added by forestry and fishing have been omitted because the Bank Group has no data available to it on which to base projections of future growth. The latter point is self-explanatory, but the other changes warrant further discussion. The IACA farm-gate prices differ from the official 1959/60 prices in important respects. Some are lower and some are higher, but the net effect is to give a lower GPV for 1965 with IACA prices than with official prices. This may be seen in the following table, where the IACA benchmark production estimates for 1965 have been valued at both IACA prices and offi- cial prices. Since official prices give an average value per ton which is 5.0 percent higher than the average value per ton with IACA prices, the Bank Group has adjusted its projections of GPV upward by this percentage. This adjustment eliminates differences between Bank Group and official projections resulting from the use of different price assumptions. Comparison of IACA and Gov't Prices Using IACA Estimates of 1965 Production of Major Crops IACA IACA IACA CDt Production IACA Stated Implicit3, Gov't Gov't4, X Estimates GPV Price- Price - Price GPV - Crop ('000 Long Tons) (Rs. mill) (per Long Ton) (per Long Ton) (per Long Ton) (Rs. mill) Rice 1,196 1/ 589 517 492 545 652 Wheat 4,586 1,635 354 357 410 1,880 Barley - - - - 300 - Jowar 5 669 205 299 306 358 5 240 Bajra Maize 825 251 299 304 362 299 Gram 700 277 388 396 391 274 Sugarcane 14.,715 721 50 49 51 750 Rape & Mustard 360 233 626 647 629 226 Sesame Cotton 359 880 2,450 2,451 1,971 708 Tobacco 13 28 2,722 2,154 2,537 33 Total: 23,423 4,819 5,062 Average price: Rs. 205.7 per Long Ton Rs. 216.1 per Long Ton 1/ Estimated clean rice equivalent. 2/ Lint cotton equivalent. 3/ Derived from total GPV and production estimates. G/ Gov't prices and IACA quantities. 5/ Weighted average price. ANNEX 8.4 Page 3 The Bank Group's estimates of the costs of inputs received from other sectors are based on IACA data primarily, with the exception of the cost of fertilizer and implements. The IACA estimate of the 1965 water charges for historic surface supplies has been retained (in absolute terms) through the year 2000. These appear unduly low in comparison with the estimates of 0 & M costs of all future facilities (including storage and canal remodelling), but this would remain true if no change in historic water charges were made. The estimated cost of fertilizer has been based on Bank Group projections of fertilizer application, but valued at the prices payable by farmers net of Government subsidy. The subsidy rate has been assumed to be 30 percent of the total cost of fertilizer. Although the subsidy may be discontinued in future years, expansion of domestic fertilizer manufacturing capacity and reduced costs of procurement should reduce the costs of fertilizer. The net-of-subsidy assumption thus envi- sages an upper limit to the price farmers would pay for fertilizer which may approximate the full cost of fertilizer as domestic supplies increase. The 0 & M cost of implements has been set at 60 percent of the estimated cost of mechanization (including the purchase of spare parts) in the reference years 1975, 1985, and 2000. The allowance for "miscellaneous" costs rises in future years to cover the probability that farmers would become more dependent on other sectors for inputs such as processed feed for livestock, transportation, building materials, and the like. The itemized costs for all categories are shown in the following table for the different reference years. Bank Group Cost Estimates (Rs. million) 1965 1975 1985 2000 Current Costs of Additional Water 1/ 100 400 600 800 Historic Water Charges 131 131 131 131 Seed 261 367 636 763 2/ Fertilizer 84 650 1,060 2,051 Plant Protection , 65 206 726 Implements 382' 78-4 234 5/ 468 6/ Miscellaneous 87 216 538 1,325 Subtotal for Crops: 701 1,907 3,405 6,264 Veterinary Care - 67 347 780 TOTAL COSTS 701 1,974 3,752 7,044 1/ Based on 0 & M costs of future facilities providing increases in irrigation supplies. 2/ 20 percent increase over 1985 costs to allow for better quality seed. 3/ 6,000 tractors x Rs. 25,000. I4/ .60 x Rs. 130 mill. 5/ .60 x Rs. 390 mill. E/ .60 x Rs. 780 mill. ANNEX 8.4 page 7- Official estimates of gross value added make allowance for the fact that crop statistics provided by the Government of West Pakistan do not cover certain non-reporting areas. The four percent allowance made by the Central Statistical Office to compensate for this under-coverage is somewhat arbitrary, but the Bank Group has followed the same procedure in order to reduce this source of discrepancy between its projections and official estimates. These adjustments to the Bank Group's projections of GPV give estimates of the gross value added in the reference years, as illustrated in the following table. Bank Group Projections of Gross Value Added by West Pakistan Agricultural Sector, Excluding Forestry and Fishery Crops: 1965 1975 1985 2000 - ----- (Rs. mill.T)- - - - GPV Crops 5,366 8,798 14,110 21,396 Plus: Price Adjustment (5.0%) 268 440 706 1,070 5,634 9,238 14,816 22,466 Less Crop Costs 701 1,907 3,405 6,264 Plus: Allowance (4%) for 4,933 7,331 11,411 16,202 Non-reporting areas 197 293 456 648 Gross Value Added Crops 5,130 7,624 11,867 16,850 Livestock: GPV Livestock 3,327 5,614 9,786 19,373 Less: Livestock Costs - 67 347 780 Gross Value Added Livestock 3,327 5,547 9,439 18,593 Total Gross Value Added: Crops and Livestock 8,457 13,171 21,306 35,443 Average Annual Growth Rate 4.5% 4.9% 3.5% These estimates of gross value added are not strictly comparable to the official estimates because Forestry and Fishery have been omitted, but it is more comparable than the IACA estimates. The average allowance of five percent for price adjustment may either overstate or understate the difference due to prices alone, depending on the particular combination of crops assumed to be produced in any reference year beyond 1965, but it does eliminate some discrepancy due to the use of different price bases. The Bank Group estimates also include an allowance for non-reporting areas. ANNEX 8.4 Page 5 The estimates of gross value added by livestock in 2000 are apparently higher than the gross value added by crops, but this is mainly due to the inability to allocate costs more precisely. An important part of the "miscellaneous" costs would undoubtedly be incurred for livestock, and therefore the relative contribution to gross value added by crops should be about the same as in the estimates of gross production value. ANNEX 8.5 Page 1 IACA's Derivation of Elasticity-Coefficients of Demand for Agricultural Products As a base for deriving elasticity-coefficients of demand for agricultural products, IACA used income elasticity-coefficients estimated by FAO for all Pakistan. 1/ To the extent that these coefficients were not directly representative of future demand elasticity for West Pakistan, IACA made a number of adjustments. The more important of these include: (i) The demand elasticity for cereals is projected to fall very sharply by 1985 to a point which indicates little further increases in per capita consumption of cereals beyond that date. (ii) The elasticity of demand for sugar has been projected at levels below those generally assumed for developing countries experiencing increases in income. This results from IACA's findings that sugar consLumption is already higher in West Pakistan than in other countries at a comparable stage of development. Sugar consumption is therefore not expected to rise as rapidly in the future in West Pakistan. (iii) Similar reasoning has been followed in the case of milk and milk products. Present consumption is again high, in comparative terms, so the coefficients of demand elasticity have been adjusted downward for future years. In contrast to this, the coefficients for meat are somewhat higher because meat should become a more important source of protein and fats. This may imply a more drastic change in dietary habits and preference than is likely to occur. Allowing for the above adjustments, IACA projected a set of demand elasticity coefficients which are compared against FAO's income elasticity coefficients in the following table: I/ IACA Comprehensive Report, Volume 2-B, Annexure 2. Page 2 Elasticity Coefficients of Demand for Agricultural Products IACA 1975 1985 "High" ItLow"I "High" "Low"' FAO 1/ 1965 Growth Growth Growth Growth Cereals 0.50 0.55 0.25 0.35 0.05 0.05 Sugar and Gur 1.30 0.70 0.50 0.50 0.40 0.45 Pulses 0.30 0.30 0.30 0.30 0.30 0.30 Potatoes - 0.50 0.50 0.50 0.50 0.50 Fruit and Vegetables 0.90 1.00 0.90 0.90 0.70 0.80 Fats and Oils 1.40 1.30 1.00 1.10 0.80 0.90 Milk and Milk Products 1.70 1.00 0.50 0.70 0.30 0.40 Meat 1.60 1.50 1.30 1.40 1.20 1.25 Eggs 2.20 2.00 1.70 1.90 1.50 1.60 Fish 1.50 1.40 1.10 1.20 0.90 1.00 Cotton 1.00 1.00 0.90 0.95 0.70 0.80 1/ Refers to all Pakistan. Source: IACA Comprehensive Report, Volume 2-B, page 17. The estimates of per capita consumption in future years are only moderately influenced by rather sizeable changes in the base year coefficientt of elasticity. For example, a change of plus or minus ten percent in the elasticity coefficient for cereals in the year 1965 would result in a change of about plus or minus one percent in the 1975 per capita consumption figure. A change of plus or minus 15 percent in the elasticity coefficient for 1975 would result in a change in per capita consumption of plus or minus two percent in 1985. This point is further demonstrated in the following illu- stration: The IACA projections of per capita demand have been based on the following relationship: A - 1 = 2.3026 eO. log X YO ~~~~~Xo Where Y, = per capita consumption in future reference year YO = per capita consumption in base reference year eo = coefficient of demand elasticity in base reference year X1 = per capita GPP (expenditure) in future reference year Xo = per capita GPP (expenditure) in base reference year ANNEX 8.5 Page 3 To illustrate the effect of changes in demand coefficients, assume that the base year and future year estimates for a given commodity are: Y = 125 kg. X0 = Rs. 400 Xi = Rs. 465 e = 0.55 per capita consumption in the future reference year would then be: Y- 1 = (2.3026) (0.55) log 465 125 _05 or Y= (125) (1.08282) = 135 kg. If only the e is changed, by a decrease of about nine percent from 0.55 to 0.50, the resulting change in per capita consumption would be: Y- 1 = (2.3026) (0.50) log 465 125 h00 or Y = (125) (1.07530) 134 kg. Similarly, an increase in eO of nine percent from 0.55 to 0.60 would be: Y _ 1 = (2.3026) (0.60) log 465 1-5 400 or Y= (125) (1.09035) = 136 kg. The changes in per capita consulEption resulting from these adjustments in the coeffic:ients are less than one percent. This level of relationship would vary with the size of the coefficients and the per capita expenditures concerned, but in general there should be only moderate changes in consumption as a result of fairly sizeable adjustments in a coefficient. I Annex 9.1 Page 1 INDUS SPECIAL STUDY TERMS OF REFERENCE IRRIGATION AND AGRICULTURE June 5, 1964 1. The objectives of that part of the Study devoted to the develop- ment of the land and water resources of West Pakistan, are governed by the summary of the terms of reference as set out in Annex 'Al of the Memor- andum of Understanding between the President of the Bank and the President of Pakistan, dated November 14, 1963. 2. In accordance with the above memorandum, the objectives of the irrigation and agriculture studies shall be as follows: (a) The study should consist of a survey of the land and water resources of West Pakistan, primarily but not exclusively related to the potential for agriculture and of the proposals for their development, in order to provide the Government of Pakistan with a basis for development planning in this field. It would be sufficiently detailed to assist the Government of Pakistan in formulating a sound program for the systematic exploitation of these resources, taking into consideration the growing needs of the economy. (b) The study should, in particular, serve to identify those projects which are! consistent with sound agricultural development objec.- tives, which are adaptable to a co-ordinated program for West Pakistan, and which are economically viable and feasible for executiorn during the two Five-Year Plan periods (1965-70 and 1970-75), and serve as a useful guide to further developments beyond 1975. Feasible projects should be ranked in order of priority and those of high priority should be studied in suffi- cient detail to determine the costs and benefits associated with the efficient application and utilization of water. (c) The first objective of the study should be to complete a report covering the use and benefits of water stored at Tarbela or selected alternatives on Indus River. 3. The present assignment will be in two parts. (a) The first, the Tarbela Investigation, referred to in 2(c) above, will cover a preliminary assessment of the agricultural use and ANNE, 9.1 Page 2 benefits of the water stored by the Tarbela Project (of various heights), and of the water available from selected alternative schemes on the Indus River. In evaluating these benefits, account will be taken of such off-channel storages as the Bank Group considers appropriate. A final draft report on the Tarbela Investigation is to be completed by November 15, 1964. (b) The second part will cover the studies outlined in 2(a) and 2(b) above, and a Comprehensive Report shall be completed by March 31, 1966. The Comprehensive Report shall take into con- sideration any decisions taken with respect to the Tarbela Report and will review all the possible uses of water from the various storage and groundwater projects on the basis of the latest information. 4. Scope of the Assignment The work to be undertaken by the Irrigation and Agriculture Con- sultants will be guided by the Bank Group and the Co-ordinating Committee, and will be limited to what is necessary for the preparation of the required reports for the Bank Study, and will: (i) Review the current status of irrigation and of agriculture; (ii) Review and discuss with the appropriate Pakistan Authorities, all the data, information and esumptions leading to conclusions of importance to the Study; (iii) W4here appropriate recommend the undertaking of additional studies or investigations and the manner in which they should be accomplished; (iv) Undertake directly studies and investigations -- as far as prac- ticable in the time available -- to fill in any gaps in the information required to make sound.judgments on general planning and project identification and evaluation; (v) Recommend, and upon instruction from the Bank Group, evaluate those projects which are agreed upon between the Government of Pakistan and the Bank to be undertaken in the period 1965-75. In the above, priority shall be given to those studies which are associated with the Tarbela Project. 5. In the specific fields mentioned below, the task to be performed by the consultants should aim at providing the information and making the recommendations required by the Bank Study and should include: Annex 9.1 Page 3 (a) Meteorology, Surface and Groundwater Hydrology Review the hydro-meteorological data in relation to floods, surface drainage, groundwater movements, river re-charges and regeneration, evaporation rates affecting canal and reservoir losses; temperature, humidity, precipitation and other data in connection with crop water requirements. Review the overall availability and seasonal distribution of surface water; review the availability of groundwater in qualitative and quantitative terms; examine the feasibility within the irri- gation system of proposed alternative patterns of water use. Determine the advantages that can be derived from new water conservation measures and development of groundwater in rela- tion to crop and leaching needs, maintaining salt balance and prevention of damage in the system. Assess the problems of flood control within the Indus Basin, and the effects of the works under consideration. Review flood hydrology in relation to design of dams and barrages; incidence and extent of inundation likely to occur to cultivable land. Review the data on silt and siltation in relation to water storage works and canals. (b) Irrigation and Drainage Engineering Review the current operation of the system; undertake field studies of the present operation of the distributaries, branch canals and watercourses in the northern area, and derive similar data from the work at present being undertaken in the southern area. Review existing data and initiate where necessary new studies of conveyance losses. Recommend improvements in methods of operation or construction. Determine benefits to be derived by new measures. Examine the economic balance between main stem and selected tributary storage and integra- tion of system and groundwiater resources. Assess the engineering feasibility and costs of meeting new demands arising from addi- tional surface water and proposed alternative patterns of water use, and of exploibation of groundwater, including design of tubewells, and consequential canal remodelling. Assess the effects of lowering the groundwater. Review the existing data on water- logging and drainage schemes. Determine optimum development of tubewell and other forms of drainage. Study problems related to drainage effluent disposal and water re-use. Review the organization of operation and maintenance of works, estimate cost of operating and maintaining new works, and in general terms, existing works. Annex 9.1 Page 4 (c) Land Make comparative studies of land-use in the selected sample areas in the north, using the Colombo Plan (1952-53) photo- graphy and the new photography commissioned this year, in order to show so far as is possible the changes in land-use over the ten-year period, with special reference to land which has gone out of cultivation, land which has been reclaimed, new land developed, and changes in cropping intensity. Study in detail soil work carried out or being undertaken in both north and south, with a view to presenting these data in such a way that comparative assessments of soil quality can be made between regions or project areas. As far as practicable, assist in the establishment of criteria for an eventual standard system of land classification for the Indus Plains, according to development potential. Study, in co-operation with W.A.S.I.D., the processes of soil reclamation on SCARP I and develop liaison with the similar work being done in the south by the Lower Indus Project Consultants. (d) Agriculture Review the current status of agriculture including, in parti- cular, detailed studies of selected watercourses in the north, based on the above-mentioned sample areas. Study present water distribution from watercourse outlet to farm fields in order to determine how the present system operates. Develop base data on the farming environment and practices in order to identify the factors which control or affect production, to specify means for improving the present situation, and to provide data for better economic evaluation of projects and agricultural development generally. (e) Agricultural Planning Review, comment and to the extent practicable submit propo- sals for modifications and additions to the existing plans and proposed development projects from the point of view of their adequacy to meet the long range needs of the growing population and the expanding economy in the light of required and projected available real economic resources. Assess the extent to which the proposed targets might be reached during the next two Five-Year Plan periods a&dibeyond, takitg into consideration all relevant factors and conditions on which the results of the development efforts will depend. Comment on these factors and conditions and submit recommendations for their improvement as required and practicable. Annex 9.1 Pa-ge 5 In this connection study the relationship between specific agricultural investient decisions and agricultural produc- tion, employment, national inccme generations, and other relevant factors. Make projections of the complementary services to be provided in respect of training of manpower, improvement of farming practices, seed and fertilizer pro- vision and distrioution, pest control, credit, marketing, research, extension and other services, and their cost. Comment on the manner and terms on which these services are now being provided, and make suggestions for improvement. Consider, also, and make any practicable recommendations on the system of land tenure, taxation and water charges, generally or in relation to specific projects. (f) Projects Taking into consideration the above and other relevant factors, review the specific projects which have reached the stage of detailed formulation. Recoiminend modifications where appropriate. The foregoing reviews and proposals should be directed towards the selection, evaluation and determination of priorities to be established in agreement between the Bank and the Government of Pakistan for the specific projects referred to in paragraph 2(b). 6. Data to be Furnished to Others To enable the Consultants for Power and for Dam Sites to complete their work on Tarbela, within the given time limits, the Consultants for Irrigation and Agriculture will endeavor to provide them with: (i) By June 15, 1964, the preliminary pattern of water releases for irrigation from Tarbela reservoir, to be used for the study. (ii) By June 15, 1964, to provide the preliminary pattern of water- flow through the canal hydro-electric projects, as well as the water release patterns which can be assumed for the other hydro- electric projects that will be in operation by 1975. (iii) By August 1, 1964, to up-date inflow hydrographs, water release patterns, and design flood inflow hydrograph to be used for this study. (iv) By August 1, 1964, to provide final silt flow data including correlation with rates of water flow and similar data for the purposes of making sedimentation studies, density current studies, and similit ttuidies. Annex 9.1 Page 6 7. To enable the Consultants for Power and for Dam Sites to complete their work on the Comprehensive Report, the Consultants for Irrigation and Agriculture will endeavor to provide them with: (i) Up-to-date estimates of the pattern of releases of water from various projects as available progressively between August 1, 1964, and August 1, 1965. (ii) Data concerning hydro power potential of all such dam and reservoir sites selected for investigation by the Dam Site Advisory Committee. (iii) Inflow hydrology, including silt flow, progressively between August 1, 1964, and August 1, 1965. (iv) By May 15, 1965, the rate of growth of stored water requirements. MEMORANDIDM TO CONSULTANTS IRRIGATION AND AGRICULTURE SECTION June 6, 1964 This memorandum outlines the position and sets out some of the basic principles and procedures to be followed in carrying out the Irrigation and Agriculture section of the Study. 1. For the Study to be successfully completed in the limited time available, it would be essential to have the active co-operation of everyone working in this field (WAPDAAMAPDA Consultants/Government Departments/Bank/ Bank's Consultants). Such co-operation could only be effectively achieved if those concerned had a clear understanding of the purpose and methods to be employed in each phase of the Study, were kept fully informed and given a chance to contribute as appropriate. 2. From every point of view it is desirable to avoid duplication and overlapping and to this end the Study should, as far as practicable, utilize all relevant past investigations and co-ordinate its efforts with those organizations or groups currently undertaking work in related fields, (e.g. Huntings, Tipton & Kalmbach, Harza, WASID, FAO, etc.) 3. Ihilstagreeing on the desirability of a high degree of cooperation and taking full advantage of work already undertaken or to be undertaken by other agencies it must be recognized that the Study is the responsibility of the Bank and must be objective. To achieve this objectivity the Bank and its Consultants must critically review all the information and studies or reports available and agree on the basis for any new work to be undertaken in connection with the Study. They must be satisfied regarding the reliability of the data, the methods and procedures employed and on the general acceptability of aDny information, results or reports to be used. Annex 9.1 Page 7 4. Based on the foregoing understandings, the Bank's direct investiga- tional activities should be directed towards filling in any gaps in the total information available to enable sound judgment and well supported conclusions to be reached. 5.- Investigations appropriate to the first (Tarbela) and second objectives of the Bank's Study would proceed simultaneously, but would be arranged so that priority wqould be given to those investigations necessary to provide information -required for a judgment on Tarbela. TARBELA INVESTIGATION 6. Following discussions in Rawalpindi in February 1964 the Government of Pakistan has undertaken to inform the Bank of their proposed Tarbela water use pattern and to supply the other information requested in the paper "Matters for Discussion on Water Development in Agriculture" (Appendix 1). They have agreed to supply the information required in paragraphs 1 to 3(d) inclusive of Appendix-l by May 31, 1964, and the remaining information as soon as practicable thereafter. To this end, WAPDA is making the necessary studies of the operation of the system with and without Tarbela. This will involve a study of the operation of the system as it is expected to be by 1975 assuming a reasonable development of tubewells and water to be developed from other sources. For the purpose of the Study the system would be operated on various basic assumptions (a) without storage at Tarbela and (b) with storage of various sizes at Tarbela. The objective of the Study being to determine where, at what season and the manner in which the additional water made available from Tarbela could be used to best advantage, subject to physical limitations and without violating any known obligation. 7. Simultaneously with 5 above, and as expeditiously as possible, the Bank's Consultants would set up the ten sample areas in the Northern Zone required for the overall study (see paragraph 21 below) and begin at once to make detailed water course and individual farm studies and sample farm surveys. The aim should be to gain as much information as possible from the 1964 kharif and rabi seasons. 8. The information emerging from the above sample area studies together with some supplementary field work and other information available from local investigations and developed by Huntings and Macdonalds (LIP) in the Southern region from their study of some 60 sample areas should go a long way towards providing the information required (land potential, cropping patterns, crop- ping intensities, yield expectations, farm budgets, associated costs, etc.) on which to base a reasonably well supported appraisal of the agricultural benefits and costs. Any additional field work required would be undertaken as a priority assignment by the Bank's Consultants. The Agricultural benefits and costs should be assessed on the assumption of: Annex 9.1 Page 8 (a) additional Tarbela water only and at corresponding yield levels; (b) moderate and high levels of supporting agricultural inputs with yields, costs and timing appropriate to each. In every case, the assumptions made should be reasonable and within the bounds of practical application. Some additional studies to determine realistic canal losses and costs of canal re-modeling, drainage, etc. would have to be undertaken. 9. The agricultural benefits arrived at on the basis of the above information would be used by the Bank in its determination of the economic return on the investment required in Tarbela and associated works and services required to utilize the additional water effectively. 10.- The Bank has undertaken to use its best endeavors to complete a report covering the technical feasibility, construction costs and economic return of a dam on the Indus at Tarbela by the end of 1964. To this end the contributing reports from Consultants on the Tarbela phase of the Study are required by mid-November 1964. COMPREHENSIVE STUDY 11. The main irrigation and agriculture study must be conducted on a basin wide basis and many aspects can only be considered in this way. However, because of the way in which things have developed, there are practical reasons, for making a division into two main regions in the approach to the field work: (a) the Northern Zone (Punjab) which contains a gross commanded area of some 22.3 million acres, a commanded culturable area of 19.5 million acres and about 16 million acres of land which was irrigated in 1960/61, (8 million each in kharif and rabi respectively); (b) the Southern Zone (Sind, South of the Gudu barrage), which contains a gross commanded area of 14.5 million acres, a commanded culturable area of 13.3 million acres and about 7.6 million acres of land which was irrigated in 1960/61 (4 million acres in kharif and 3.6 million acres in rabi). 12. As a broad generalization, the Northern Zone is more highly developed, the soil, natural rainfall and evapo-transpiration conditions are more favor- able, exploitation of groundwater is more feasible and hence drainage is cheaper. Much more investigational work has been done on soils, geology, groundwater, engineering and general agricultural research and experimentation. Annex 9.1 Page 9 In the Southern Zone the problems of development are likely to be more difficult and costly and until recent years (starting in 1959 and intensified in 1962 onwards) very little investigational work had been done. 13. In 1959 Hunting Technical Services Ltd. in association with Sir Murdoch Macdonald & Partners entered into a contract with WAPDA to carry out investiga- tions and project formulation in certain areas in the Sind. In 1962 the con- tract was extended to embrace the whole of the Lower Sind, i.e. Lower Indus Project (LIP) and the contract now amounts to a Regional Survey of the Lower Sind. The LIP team are due to submit a comprehensive regional report including some project identification and project preparation by the end of 1965. 14. Despite the less favorable starting position, due to the more comprehensive cover of the investigations now being undertaken in the Sind, it seems reasonable to assume that the amount of supplementary work required to provide the information needed for the Bank's purposes in the Southern Zone will be relatively small. It is however, important that a satisfactory relationship be established between the LIP program of work in the South and the needs of the Bank's Study. This can be achieved if (as shown in the diagram in paragraph 26), it is accepted that the LIP program is adjusted in accor- dance with the guidance and to meet the needs of the Irrigation and Agriculture Co-ordinating Committee provided such adjustments do not interfere unduly with the program and scope of work of the LIP as planned by WAPDA. 15. Assuming the LIP work in the Southern Zone will substantially meet the Bank's requirements and that the time schedule for the Study can be adjusted as suggested in paragraph 27 below, the position regarding the Southern Zore appears to be reasonably satisfactory. 16. In the Northern Zone, Tipton & Kalmbach have a contract with WAPDA dated May 9, 1962 similar to that of the LIP in the South. Up to date they have been very active in preparing large scale projects based on tubewells and groundwater development and have done a vast amount of work in this direction. They have not however, carried out any comprehensive regional planning to provide a proper frame for project planning or carried out any field work on the agricultural aspects of regional or project planning. Also, they have not the experience or staff to conduct sound agricultural surveys and investigations in the time available. 17. The Water and Soils Investigation Division of WAPDA (WIASID) has been active in the Northern Zone and has carried out soils surveys and studies of the geology and surface and groundwater hydrology over most of the area. Tipton & Kalmbach have worked closely with and relied on basic information supplied by WASID for their detailed engineering studies, project preparation and area development proposals. Annex 9.1 Page 10 18. Harza as WAPDA's general consultants have exercised influence over the general direction of the activities of tWAPDA's two principal area consul- tants (LIP and Tipton & Kalmbach) and have the responsibility for preparing long term development plans. It is desirable that the results of their past and continuing work be used in the Bank's Study to the maximum extent possible. 19. The position in the North therefore appears to be that Tipton & Kalmbach have done and are well equipped to undertake further engineering studies. WASID has done a great deal of work on geology, soils and groundwater hydrology and is well equipped to conduct any further studies required in this field. The main gap is land use and agricultural studies. 20. To meet this situation the Bank would enter into a contract with a firm of Agricultural Consultants to undertake the missing land use and agri- cultural investigations on similar lines to those employed in the South. This, together with the work done and to be done (subject to the proviso set out in paragraph 3), by Tipton & Kalmbach and WJASID could put the Northern Zone into the same position as the Southern Zone by the end of 1965. 21. To do this effectively it would be necessary to establish satis- factory operating and co-ordinating arrangements at the working level (see paragraph 22), and for the Agricultural Consultants to begin their investiga- tional work at once. It is suggested the Agricultural Consultants should immediately begin on the selection and detailed investigations in the 10 sample areas (5,000 square miles), provisionally agreed upon and build up their investigating staff as quickly as possible. It should be noted that the actual field work to be done will be much less than in the South because of the almost complete soil survey already carried out by WASID and the smaller number of sample areas. The latter is feasible because of the experiences gained in the South, some of which will be applicable to the North, and the greater amount of existing information. ORGANIZATION 22. To bring together and integrate such ccnplex and diverse interests and activities will be a difficult task and must deptiid heavily on the goodwill of all concerned. However, some formalized organization will be necessary. A form of organization as indicated below and illustrated diagrammatically in paragraph 26 might be appropriate. Basically, any matters of policy so far as the Bank Study is concerned must be determined by the Baik Group operating under Dr. Lieftinck. This group will have the advantage of the guidance of its consultants and is in a position to call upon the services of any Pakistan Government Department or Agency or outside specialist or organization to assist it in its determinations (e.g. Revelle, Bureau of Reclamation, etc.). The problem dealt with here -- within this understanding -- is to establish working arrangements to obtain the co-ordination and results desired. Annex 9.1 Page 11 ' 23. It is suggested that within the Irrigation and Agriculture sector of the Study a small Irrigation and Agriculture Co-ordinating Committee should be established. This Committee might be made up of a Bank Chairman and one Representative of the Government of Pakistan with Consultants and other Specialists attending in an advisory capacity as necessary. The Co-ordinating Committee would only meet as required; there would be no voting, and conclu- sions and recommendations would only be reached on the basis of agreement between the two members. It would keep the general progress of the Irrigation and Agriculture study under review and attempt to agree on recommendations to the Bank Group and the Pakistan Authorities with respect to practical problems which might arise in the implementation of the policy decisions of the Bank Group and the co-operation to be provided by the Pakistan Authorities. A principal objective of the Co-ordinating Committee would be to establish the fullest possible co-operation between the Bank and the Government of Pakistan and its agencies in the execution of the Study and to seek to resolve any problems which may arise. The Co-ordinating Committee tvuld have no direct executive authority, its agreed conclusions and recommendations would be conveyed to the appropriate authority, e.g. Bank or Government Department or Agency for consideration and for implementation through the normal channels. 24. Below the Co-ordinating Committee would be a Study Liaison Group which would meet more frequently, and, at the technical level would provide a forum for the exchange of views and experience in both directions. Its regular composition wou:Ld be two representatives of the Bank's Consultants (convenors) and two representatives from IWJAPDA or West Pakistan Government Departments with other consultants or specialists attending as required. It would have no executive resppnsibility. 25. As mentioned in paragraph 11 and subsequent paragraphs much of the field work would be organized on a regional basis. In the Northern Zone the principal units would be Tipton & Kalmbach, IWASID and the Bank consultants field parties. In the Southern Zone a high degree of reliance would be placed on the work of the Lower Indus Project Team. 26. The diagrammatic repr,esentation of the organization would be: Annex 9.1 Page 12 Bank Group Government of Pakistan Organization for Irrigation and Agriculture Section Irrigation and Agriculture Co-ordinating Committee _____ _(Bank Chairman and one Pakistan Government) _____ ( Representative ) Study Liaison Group _____ (Bank's Consultants and WAPDA's Consultants) ----- ( or Specialist Representatives ) Bank's Consultants WAPDA & Govt. Depts. (GibbS Hunting & ILACO) ----------------------------- (Harza) _~~~~ I Souther Zone ------------------------- LIP Team Northern Zone ----------------T-& If W4ASID 27. Assuming that, with the necessary modifications in the light of experience, the above proposals work out satisfactorily, the field work should be completed by the end of 1965 and a comprehensive report with firm proposals for development during the next two five-year plan periods and, providing a basis for development in the following periods, should be completed in the early months of 1966. Appendix 1 MATTERS FOR DI'SCUSSION ON WATER DEVEIOPMENT FOR AGRICULTURE 1. To make reasonable estimates of the benefits and costs involved in the development for agriculture of the water resources of West Pakistan it is necessary to investigate all aspects of water utilization for this purpose. 2. As a first step in the implementation of this overall Study the Mission and the Consultants should undertake discussions with Government authorities on the proposed use patterns of the additional water which would be made available from Tarbela. 3. The proposals should indicate in respect of each gross allocation: (a) the canal command and land area to which it would be applied; (b) the approximate quantity of water to be made available on the land) (c) the periods at which it would be made available; (d) the purpose for which it would be made available; (e) the benefits in the form of increased production that could reasonably be anticipated (i) as the result of additional water only; and (ii) with a reasonable level of application of supporting inputs (fertilizer, seed, plant protection, agricultural credit, good husbandry, etc.). 4. An estimate of the additional investment that would be involved in carrying out the proposals outlined above for the use of Tarbela water. This should include in respect of each allocation: (a) the cost of canal remodelling and subsidiary works; (b) the cost of any additional drainage required; (c) any supplementary investment involved subdivided into public and private (i) for the application of additional water only; (ii) for other infrastructure; and (iii) a reasonable level of application of supporting inputs (fertilizer, seed, plant protection, agricultural credit, good husbandry, etc.). 5. An estimate of the increased annual operation and maintenance costs. Annex 9.1 Page 13 INDUS SPECIAL STUDY MEMORANDUM TO CONSULTANTS ANALYSIS OF DEVELOPMENT AREAS June 19, 1964 This memorandum is intended as something of a check list and guide to indicate the main headings and the type of information to be gathered under each, in respect of development project areas. The headings employed will not meet all circumstances and all the information indicated will not be appropriate in every case. To the extent practicable however, it will be useful to standardize the approach and to ensure the systematic collection of the relevant data. 1. Each area selected will be treated as a potential development project, and the consultants will make a feasibility study of each develop- ment project. 2. In addition to a general description of the project area (location, boundaries and general character) the study will include an assessment of the agricultural, engineering, organizational and managerial, financial and economic aspects of the project. These aspects will include -- but will not necessarily be limited to -- the following main features. 3. Land Classification - All land in the proposed project area, irri- gated or potentially irrigable (e.g. commanded by water supplies) must be studied in sufficient detail to allow the main positive and limiting factors to be analyzed and assessed. Maps of present land-use should be presented at a scale not smaller than 1/50,000, and where possible land classification maps at a similar scale, using the USBR system with standards modified in keeping with physical and economic conditions in West Pakistan, should be prepared. The study should clearly indicate the potential for irrigation development and identify any limitations associated with soil conditions. 4. Groundwater and Salinity Survey - In sufficient detail to determine the availability and quality of groundwater supply, and to identify areas affected or threatened by waterlogging and/or salinity. The study should determine the scope for groundwater exploitation and/or identify the problems and limitations imposed by waterlogging or salinity. 5. Present Status of Agriculture - Conduct sample surveys as necessary to provide reasonably reliable data concerning the existing agriculture of the area including: (a) land tenure status, including any existing water rights; farm size (farm owvnership and operating pattern)) Annex 9.1 Page 14 (b) characteristics and number of population, including number of farm operators and hired farm workers; (c) prevailing farm practices; (d) land-use, including rotation systems and cropping pattern; (e) area under various crops and pastures or fallow and land not used; (f) area irrigated, irrigation practices and water usage; (g) average crop yields and volume of agricultural production (including livestock production); (h) volume of production marketed; (i) current prices at farm level for products; (j) cost of farm production; and (k) gross and net value of farm production. 6. Future Status of Agriculture - An assessment of the expected status of agriculture following development of the project. This will include the future cropping pattern, crop yields, farm prices for products, gross value of agricultural production, costs of farm production and net value of farm pro- duction. In arriving at the above estimates, the consultants will consider the relative economics of land-use alternatives, alternative cropping patterns and farm management practices; the steps and motivation necessary to bring about any practicable improvement in farming practices, on-farm improvements and the availability of farm labor and equipment. They will also estimate the phasing of the attainment of the level of production estimated. 7. Irrigation, Drainage and Infrastructures - A survey of the existing diversion, conveyance and irrigation and drainage systems and the roads or other essential facilities serving the area. Preliminary plans and specifi- cations for a new system to meet the reeds of the production proposals. This will entail a study of the hydrology, including water quality, sedimentation and flood occurrence. A comparison of water requirements for the project and the dependable water supply available, taking into consideration the future cropping pattern, rainfall and likely irrigation efficiencies. The frequency and duration of any shortage will be indicated. In planning the new irrigation system, the consultants will consider the need for and practicability of any consolidation of holdings or other changes in land tenure. Annex 9.1 Page 15 8. Execution of the W4orks - Organizational arrangements for execution of the worysiTconstruction schedule for the project by major items, and a cost estimate showing foreign currency and local currency costs. 9. Operation and Maintenance - Plans, including organization and staffing, for operation, maintenance and general management of the project. Training plans for personnel to provide technical assistance in water dis- tribution, as well as for operation and maintenance. Draft regulations for operation and maintenance giving consideration to existing laws, traditions and customs. Estimate of annual cost of operation and maintenance. 10. Research and Extension Services - Review of existing agricultural research and extension services and detailed proposals for their expansion and improvement to the extent practicable. This would include organization, staffing, staff training and special field trial and extension programs, such as water management at farm level, mechanized farming, improved seed, fertilizer usage, etc. 11. Agricultural Credit - Examination of present farm credit facilities and practices, obtaining data as necessary from a sample survey of the area. This will include the amount, purpose, terms and conditions and sources of credit at present received by farmers. An assessment of the credit needs of farmers under the project and proposals for any changes necessary in present facilities to meet these needs. 12. Marketing - A review of the existing marketing system (including any local processing3-for major crops. Proposals for the correction of any deficiencies which would have to be overcome for the effective marketing of products from the project. A review of future price prospects at farm level for major cash crops. 13. Recovery from Beneficiaries - Review of present water charges and related taxes or levies paid by irrigation farmers in cash, kind or labor; the laws, traditions andcustoms under which these charges are levied, and recommendations for future permanent arrangements. The consultants will also make an estimate of the farmers' capacity for payment of operation and main- tenance and capital charges. 14. Economic Benefits - An analysis of the economic justification of the project, showing the benefits deriving to the national economy and to the farmers. 15. Project Formulation - On the basis of the information provided by the foregoing studies, preparation of a definitive project report in a form suitable for decision on financing. Annex 9.1 Page1 16. Priority Ranking of Agricultural Development Projects - As project studies are completed they should be ranked in order of priority on the basis of economic return. The priority ranking may vary depending upon the source of the supply of water. In respect of each project a calculation should be made showing the benefit in terms of net value of farm production per acre foot of water at the source for each alternative source of supply. GUIDELINES FOR COMPREHENSIVE STUDY OF IRRIGATION AND AGRICULTURE IN WEST PAKISTAN March 26, 1965 Objectives 1. The Terms of Reference which are attached require the Irrigation and Agriculture Consultants to conduct a study of the land and water resources of West Pakistan as related primarily but not exclusively to their potential for agricultural development. The study would have the objectives of (a) pro- viding a basis for development planning, (b) evaluating projects which have been prepared and agreed upon with the Government of Pakistan and (c) identi- fying and formulating investment opportunities, which are consistent with sound agricultural development objectives, economically viable, and feasible for execution during the two Five Year Plan periods 1965/70 and 1970/75. 2. For the plan periods thereafter but not beyond 1985, the study would provide guidance on the level and the composition of investment outlays for water resource and agricultural development and their possible project content including identification by type of facility, geographic location, scale of operation and general nature and composition of output. The existing Terms of Reference for the Irrigation and Agriculture Consultants are considered adequate to cover all aspects included in the comprehensive pahse of the Study. Present Position 3. Since the completion of the Tarbela investigations (November 15, 1964) the consultants have given full attention to the comprehensive phase of the study. The main objective of the work so far has been to assess the status and pattern of irrigated agriculture in the Indus Basin and to determine regional development potentials. Studies of water availabilities with several varia- tions have been initiated and are well under way for all canal commands. The possibilities for mining of groundwater are being studied. Procedures for project evaluation are being developed. For these purposes the consultants have been engaged upon a general comprehensive review of the main factors that govern irrigated crop production including land, population, giound and surface waters and crop yields. Water course studies commenced in September 1964 and are progressing. Annex 9.1 Page 17 4. A first list of projects including those suitable for detailed evaluation has been drawn up which is now ready for discussion between the Bank Group and Pakistan Authorities. This list of projects will be extended as the possibility to do so occurs during the course of the study. Assumptions and Limitations 5. In projecting future water development the consultants would have to make certain assumptions, the more important of which are: (a) completion of Tarbela dam with a starting date for irrigation water releases of October 1973 or 1974; (b) completion of the works included in the Indus Basin Project by the presently scheduled dates. 6. The scope of the comprehensive study would be limited: (a) geographically, to West Pakistan, with particular emphasis on the Indus Basin; (b) functionally, to the efficient use of water for agricultural production including the removal of agricultural and other constraints hampering such use; and (c) in time, -to the successive two Five-Year Plans 1965/70, and 1970/75 in reasonable detail and to providing guidance on the level and the composition of investments and their project content thereafter but not beyond 1985 except for projections of agricu:Ltural production. Guidelines for Consultants 7. Guidelines and memoranda issued by the Bank Group during the first phase of the Indus Special Study would remain effective until or unless the Bank Group notifies the consultants otherwise. By the first of May, a draft report would be prepared by the consultants covering agricultural production targets for 1975, 1985 and 2000 for West Pakistan, which are intended to serve as a working guide. These targets should be consistent with the overall economic development plans for Pakistan as expressed in the successive Five Year Plans and in perspective planning documents. The Bank Group, after discussion with the Pakistan Authorities, may wish to give further guidance. These targets would become a significant guiding element with regard to the eventual recommendations for investment programs and associated inputs. 8. The Consultants would be expected to arrive at conclusions with regard to the most economic sequence of water resource development. They would also be expected to indicate the nature, scope and timing of further studies and surveys required. Annex 9.1 Page 1_ Summary Program 9. On the basis of the work program agreed between the consultants and the Bank Group including proposals for the continued studies of hydrology, water distribution, groundwater development, drainage problems, soil surveys and soil reclamation, and agricultural and economic aspects the consultants would continue their investigations along the following lines: (a) Present Status of Agriculture in West Pakistan This would consist of an assessment of the present status of agriculture indicating its contribution to GNP, present pro- duction of main commodities and the governing policies, physical conditions, supply of production aids and marketing of agri- cultural products, and institutional and structural aspects. (b) Production Targets for Agriculture The consultants would establish production targets for 1975, 1985 and 2000 based on effective demand and taking into account the need for diversification of agriculture to ensure stability of prices. Targets would be broken down between food and raw materials for home consumption and export. They should be consistent with the overall economic development plans for Pakistan. (c) Survey of Water Development Potential Land This would include the general review of land use, farming systems, and their production potentials. Areas with high development potentials would be clearly identified. Water This would deal with the surface water availability, the development potential of the irrigation system (without disturbing the known obligations and historic supplies), groundwater resource potential, both mining and annual recharge pumping, the possibilities for integration of surface and groundwater, the public and private efforts for groundwater development, their phasing, and the system operation and maintenance aspects including the question of water rates. Human Resources This would be a brief general discussion including density, skills, customs and traditions of the population and any differences that may exist. This problem would be looked at from the point of view of its relationship to agricultural development. Annex 9.1 Page 19 (d) Area Development Potentials The Selection of Areas with Favorable Development Opportunities for Irrigated Agriculture Criteria for the selection of areas would be established and employed to determine those areas with favorable opportunities for development. The areas selected would be listed in order of their development potential and the reasons for the rankipg would be fully excplained. This would involve an analysis of each area along the following lines: (i) Land, Soils, Climate. (ii) Water Availability. (iii) Agriculture. (iv) Development Constraints. Identification of Constraints Constraints would be identified on a general and area basis and the significance of their removal for further development would be assessed. Where appropriate the removal of constraints would form the basis for investment opportunities. (e) Project Formulation and Investment Programs Evaluation Procedures, Techniques and Criteria These would be determined in accordance with I/A 2 and would take into consideration comparative cost or "Least Costs", farmer incentives, quantitative contributions towards production targets, value contribution in terms of gross and net value of production, rate of return or other relevant criteria applic- able to the various types of projects. Project Formulation Projects would be formulated on the basis of investment oppor- tunities as indicated above. The formulation would embrace not only the construction aspects but also the efficient utilization of the resources available. Project Evaluation Projects previously prepared or formulated during the period of the study would be evaluated in varying degrees of detail according to the time available. Projects selected for detailed Annex 9.1 Page 20 evaluation in agreement with the Government of Pakistan/West Pakistan, would be presented in a separate report including the following points: (i) Project Description. (ii) Technical Feasibility. (iii) Cost Estimates. (iv) Financial Feasibility. (v) Administration, Operation and Management. (vi) Economic Evaluation. (f) Integration of Project Development Projects would be integrated into development programs as appropriate. The sequence of project development, the related implementation capacities, services, etc. required would be assessed. Capital projects would be listed separately in investment programs in accordance with the above development programs. They would in turn be integrated into an investment program and compared with the investment targets of successive Five- Year Plans. Production Response The production response would be aggregated in a similar manner to investments. Total production response would be compared against the production targets. The contribution of the agricultural sector to GNP would be determined and com- pared against targets. Any deviations would be fully explained. The supply and demand situation for agricultural products at the various time horizons wmuld be discussed. Associated Inputs The supporting manpower requirements such as administration, management, technical, vocational skills, etc. would be assessed. Capital investments and recurrent expenditures other than those included above would be scheduled. Reporting and Review 10. In view of the complex nature of these studies it will be necessary to receive regular progress reports from the consultants and to review the course of the studies at frequent intervals. STUDY OF THE WATER AND POWER RESOURCES KABUL OF WEST PAKISTAN COMPREHENSIVE REPORT PROGRAM 1965 TO 1975 PROJECT AREAS ____ FProject areas ',,0G,H A On-going tubewell p rogram .+ ,i * EHWX94 Sukh.Beas drainage scheme 9,.- (one of influence) QUETTA K.h.t Boundary of canal commanded area P ojoct boandary of proposed AtcO SCARP V PROJECT o....... International boundary KSl.t Jammu and Kasnair boundary RAWALPINDI -- - -- .Approximate ceasefire line S,b. DI KH RORRI SOUTHSSHJAtAEAD / t / / / A J D 0 4 eS,AR \~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IC K" )3 R HYDERARAD %~ , \ t 4'''t _ *,tA9 t^8~~~~~ D S ** s + s- s w o so oo~~~~~~~~~~~~~~~C5010 I so JULY 19L7 .I I 9IBRD-1945R