asian development bank - adb.org · currency unit $1 .00 rp 1.00 at pcr september 1994 rp 2,150...

IN

INDONESIA

March 1995

PCR:INO 17094

ASIAN DEVELOPMENT BANK

PROJECT COMPLETION REPORT

OF ThE

THIRD IRRIGATION PACKAGE PROJECT(Loan No.799-INO)

Currency Unit

$1 .00Rp 1.00

At PCRSeptember 1994

Rp 2,150$0.000465

BA P P E DA

BMEDGFCADGFCHDGWRDDO-IPEDADPUPDUTEAEIRRICBLCBO&MPBBPCMPCRPRASTAWUA

CURRENCY EQUIVALENTS

Currency Unit - Rupiah (Rp)

At AppraisalOctober 1986

Rp 1,631$0000613

The exchange rate of the Rupiah is allowed to float under the management ofBank Indonesia. In this Report, a rate of $1 .00 = Rp 2,150 has been used.

ABBREVIATIONS

(i)(ii)

- Badan Perencanaan Pembangunan Daerah(Provincial Level Development Planning Agency)

- Benefit Monitoring and Evaluation- Directorate General of Food Crops Agriculture- Directorate General of Food Crops and Horticulture- Directorate General of Water Resources Development- Direktorat luran Pembangunan Daerah (Directorate of Land Tax)- Dinas Pekerjaan Umum Propinsi (Provincial Public Works Services)- Demonstration Unit at Tertiary Level- Executing Agencies- Economic Internal Rate of Return- International Competitive Bidding- Local Competitive Bidding- Operation and Maintenance- Pajak Bumi dan Bangunan (Land and Building Tax)- Project Completion Mission- Project Completion Report- Provincial Agriculture Service- Technical Assistance- Water Users' Association

NOTES

The Fiscal Year (FY) of the Government ends on 31 March.In this Report, "$" refers to US dollars.

PCR: INO 334

PROJECT COMPLETION REPORT

OF THE

THIRD IRRIGATION PACKAGE PROJECT(LOAN NO. 799-INO)

IN

INDONESIA

March 1995

Note: This Report was prepared by a Bank Mission from the Indonesia ResidentMission in August 1994. The Mission comprised An Nhon Nguyen (SeniorProject Economist/Mission Chief), LB. Sondjaja (Project Officer) and JanSonneveld (Staff Consultant/Irrigation Engineer).

TABLE OF CONTENTS

Page

MAPS

(ii)BASIC DATA

(vi)

I. PROJECT DESCRIPTION

1

EVALUATION OF IMPLEMENTATION

A. Project Components 2B. Implementation Arrangements 3C. Project Costs and Financing 5D. Project Implementation Schedule 6E. Engagement of Consultants and Procurement 6

of Goods and ServicesF. Performance of Consultants and Contractors 8G. Conditions and Covenants 9H. Disbursements 10I. Environmental Impact 10J. Project Benefits 10K Performance of the Borrower and 13

Executing AgenciesL. Performanceof the Bank 14

III. CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions 14B. Recommendations 14

APPENDIXES 17

1000E

INDONESIATHIRD IRRIGATION PACKAGE PROJECT

PROJECT LOCATION MAP

SULAWESI

Band.Ac.lr BARO RAYA SCHEM

0 • - - - (19.120 he.)

M.d.n o

00-

Pad.0

SUMATRA

PaP.nang 0

—

— _.) •?._. •_.J

Panitanak0

- KALIMANTAN

Banlarmaaón0

Manado0

JAKABTA Uung Pandang e -

tr

JAVA -0 100 200 400 90 - Bang - o - -- r1 S.mar.ng -- -- -_ - -

Kilometers- h!- Surabaya

____________________ J 0Yogyakaita - - BAU

LEGEND:SOUThLAICBOKSCHEMEI/ - - LORES - - -

o Town (4960 he.) '7 bmnpa.ar jJ SUM&itWA

() National Capital - - - - - - -

nationat Boundary MAMAK SCHEME -oundaries not necessarily authoritative) (5,160 he.) - -

(iii) Map 2

(iv) Map3

(v) Map4

04 October 198606 October 1986

20 November 1986

08 December 1986

(vi)

BASIC DATA

A. Loan Identification

1. Country2. Loan Number3. Project Title4. Borrower5. Executing Agencies

6. Amount of LoanActual

B. Loan Data

1. Appraisal- Date Started- Date Completed

2. Loan Negotiations- Date Started- Date Completed

3. Date of Board Approval

4. Date of Loan Agreement

5. Date of Loan Effectiveness- In Loan Agreement- Actual- Number of Extensions

6. Closing Date- In Loan Agreement- Revised- Actual- Number of Extensions

7. Terms of Loan• Interest Rate- Maturity (years)- Grace Period (years)

Indonesia799-INOThird lmgation PackageRepublic of IndonesiaDirectorate General of Water Resources

DevelopmentDirectorate General of Food Crops and

HorticultureDirectorate of Land and Building Tax (PBB)'$120.7 million$120.4 million

17 June 198617 July 1986

08 March 198724 February 1987None

31 March 199331 March 199412 August 19941

Variable266

aFormerly Directorate General of Food Crops Agriculture.

bFormerly Directorate of Land Tax (luran Pernbangunan Daerah).

(vii)

8. Disbursements

a) Dates

Initial Disbursement Final Disbursement

Time Interval01 March 1987a l2Augustl994

89 months

Effective Date Original Closing Date

Time Interval24 February 1987 31 March 1993

72 months

b) Amount ($)

LastOriginal Revised

Net Amount UndisbursedCategory' Allocation Allocation

Disbursed Balance

O1AO1B02A02B02C03A03 B03C04A04 B05A05 B05C05 D05 E05 F05G05 H05105J05K06070809Total

28,560,000124,000

1,041,000393,000

10,0003,804,000

804,00067,000

120,000558,000

4,584,00032,503,000

361,0001072,0003,300,000

657,00067,00080,00020,000

438,000518,000

5,700,0003,000,000

25,700,0007,219,000

120,700,000

40,084,591290,568689,482423,016

04,600,366

764,00059,500

113,725422,319

1,532,14428,824,079

340,9861,037,0064,815,294

717,89164,40380,00020,000

499,808331,822

5,700,0003,000,000

25,700,000589,000

120,700,000

42,411,646286,083501,106357,355

04,646,988

724,87247,921

113,725419,142

1,307,10729,997,702

335,836874,885

4,033,289700,04264,40496,41311,885

454,256329,326

4,915,5913,000,000

24,739,4030

120,368,978

-2,327,0554,485

188,37665,661

0-46,62239,12811,579

03,177

225,037-1,173,623

5,150162,121782,005

17,849-1

-16,4138,115

45,5522,496

784,4090

960,597589,000331,022

The date of disbursement for refinancing TA Loans. The first disbursement for actual Project activities was on11 March 1988.

(viii)

9. Local Costs

- Amount ($'OOO)- Percentage of Local Costs- Percentage of Total Cost

C. Project Data

Bank Loan Borrower

38,205 36,544

51% 49%

24% 23%

Appraisal

Estimate Actual1. Project Cost ($'OOO)

a. Foreign Exchange Cost

77,100

82,164b. Local Cost

71,700

74.749c. Total Cost

148,800

156,913

2. Financing Plan ($'OOO)

(i) Implementation Costs

a. Borrowerb. Bankc. Total

(ii) IDC Costs:

Appraisal Estimate

Foreign Local Total

0 28,100 28,10051,400 43,600 95,00051,400 71,700 123,100

25,700

Actual

Foreign Local Total

0 36,544 36,54457,425 38,205 95.63057,425 74,749 132,174

24,739

3. Cost Breakdown by Project Component ($'OOO)

Appraisal Estimate

ActualForeign Local Total

Foreign Local Total

Irrigation/DrainageAgricultural SupportLand ReassessmentTaxesIDCRefin. of TA LoansTotal

40,303 56,232 96,535

1,659 4,308 5,967

738 660 1,398

0 10,500 10,500

25,700 0 25,700

8,700 0 8,70077,100 71,700 148,800

47,560 60,899

1,482 3,179

467 4370 10,234

24,739 0

7,916 082,164 74,749

108,4594,661

90410,23424,739

7,916156,913

AppraisalEstimate

January 1988January 1988January 1988

October 1987

May 1989

Actual

October 1988August 1988August 1988

April 1989

September 1988

AppraisalEstimate

June 1986March 1986June 1986

Actual

June 1986March 1986June 1986

April 1988

January 1988

July 1992

July 1994September 1991 November 1992October 1991

March 1992

August 1992

July 1994October 1991

November 1992November 1991

March 1992

(ix)

4. Project Schedule

a. Date of Fielding of Consultants- Irrigation/Drainage Component

Baro RayaSouth LakbokMamak

- Agricultural Support ComponentAll sites

- Land Reassessment ComponentAll sites

b. Completion of Engineering Designs- Baro Raya- South Lakbok b

- Mamak

c. Civil Works Contract- Date of First Award- Completion of Work

Baro RayaSouth LakbokMamak

d. Start of Operations- Baro Raya- South Lakbok- Mamak

a Financed by the Banks TA Loan No. 582-INO.b Undertaken by local consutting firms under Government financing.C

Financed by the Banks TA Loan No. 639-INO.

(x)

D. Data on Bank Missions

Name ofEach Mission Date

Loan Inception 07 Oct to22 Oct 1987

Loan Review 22 Aug to14 Sep 1988



Loan Review 08 Jul to29 Jul 1991

Special Loan 21 Jan toReview 24 Jan 1992

Loan Review 10 Sep to25 Sep 1992

Loan Review 28 Sep to05 Oct 1993

PCR 04 Aug to11 Aug 199403 Sep to07 Sep 1994

No. of No. of SpecializationPersons Person of Members

-days

2 26 Sr. Project Economist,Project Engineer

2 30 Sr. Project Economist,Project Engineer

2 34 Sr. Project Economist, StaffConsultant (Imgation Engineer)

2 34 Sr. Project Economist, StaffConsultant (lmgation Engineer)

3 57 Sr. Project Economist, StaffConsultant (IrrigationEngineer), Technical Assistant

2 8 Sr. Project Economist,Technical Assistant

2 32 Sr. Project Economist,Project Officer

2 16 Sr. Project Economist,Project Officer

3 21 Sr. Project Economist, Staff

3 12 Consultant/IrrigationEngineer, Project Officer

Total 270

I. PROJECT DESCRIPTION

Objectives, Rationale, and Scope

1. The main economic objective of the Project was to increase farm productivitythrough crop intensification and diversification and thereby increase farm incomes andemployment opportunities. The living standard was expected to improve through the provisionof basic infrastructure such as roads and flood mitigation works. The Project was in line with theGovernment's focus to reduce rice imports and to broaden the farming systems to includesecondary food crops, create rural employment, and enhance balanced regional development.

2. The Project consists of three main schemes with a total service area of about28,740 hectares (ha): Baro Raya (18,000 ha) in Daerah Istimewa (Special Area) Aceh Province;South Lakbok (4,970 ha) in West Java Province; and Mamak (5,770 ha) in West Nusa TenggaraProvince. The Project included four major components.

(i) Irrigation/Drainage and Related Works. This component formed Part A of theProject and was executed by the Directorate General of Water ResourcesDevelopment (DGWRD). Part A covered three subprojects: Baro Raya, SouthLakbok, and Mamak. In the Baro Raya subproject, with a total service area ofabout 19,000 ha1 (see also para. 34), a new weir, the Tiro Weir, was to be built,and the Reubee Weir was to be rehabilitated. The Project was also to rehabilitateand construct about 14 kilometers (km) of main canals, 206 km of secondaryirrigation canals, and about 137 km of main and secondary drainage canals. In theSouth Lakbok subproject, with a total service area of 4,970 ha, frequent floodingwas to be significantly reduced with the provision of 37 km of drainage canals andstructures; in addition a feeder canal and off-take structures were to be built to takewater from the Citanduy River. In the Mamak subproject, with a total service area5,770 ha, a center-cored rockfill-type dam, 41.5 meters (m) high, andappurtenances were to be built across the Mamak River. Main and secondarycanals were also to be rehabilitated or constructed.

(ii) Agricultural Support Services and Facilities. This component was executed bythe Directorate General of Food Crops and Agriculture (DGFCA) and aimed atstrengthening agricultural support services by establishing five tertiary-leveldemonstration units, two each in Baro Raya and Mamak and one in South Lakbok.The main purposes of these units were to (a) demonstrate irrigated farmingpractices; (b) train Project staff, local officials, and farmers; (c) produce qualityseeds for major crops; and (d) conduct adaptive research and field trials. Thiscomponent was also to provide local training for service staff and key farmers aswell as overseas training for Project-related and district officers.

(iii) Mapping and Land Reassessment. This component was to be executed by theDirectorate of Land Tax (DO-IPEDA), and was to reassess and reclassify land in theProject area in order to increase land tax revenue to the level of Operation andMaintenance (O&M) costs. The component was to be carried out by localconsultants.

Appraisal estimate was 18,000 ha (see para. 34).

(iv) Consulting Services. Consultants were to be recruited to assist DGWRD (983person-months) for design and construction supervision work, DGFCA (167person-months) to strengthen agricultural support services, and DO-IPEDA (30person-months) for land re-assessment.

II. EVALUATION OF IMPLEMENTATION

A. Project Components

1. Irrigation/Drainage and Related Civil Works

3. Most of the structures envisaged at appraisal were constructed in the threesubproject areas with some minor deviations in quantities. The major structures include dams,weirs, main and secondary irrigation canals, main and secondary drainage canals, roads,bridges, and demonstration units. A comparison between the major features as planned atappraisal and those actually constructed is presented in Appendix 1.

a. Headworks, Dams, and Reservoirs

4. In Baro Raya, two weirs - Tiro and Reubee - were constructed. The latter wasoriginally planned to be rehabilitated but it was decided to construct a new weir instead 1 ; bothweirs ase in excellent condition. In South Lakbok, a barrage (Manganti) and a weir (Bantarloa)were rehabilitated. Both are functioning satisfactorily. In the Mamak subproject, the Mamak damand reservoir were constructed. The reservoir capacity is 30 million cubic meters. Improvementsinclude the main dam, which is 41 .5 meters (m) high, three saddle dams, a spillway, a riveroutlet, and a hydropower plant of 500 kilovolt-ampere (KVA) capacity. The dam and appurtenantstructures are in good condition. Downstream from the storage reservoir, the Mamak weir wasrehabilitated and the Kakiang weir constructed. Both weirs are in generally good condition butleakage at the downstream wingwalls of the Kakiang weir is considerable. Poor constructionquality is evidenced by inadequate compaction of backfill materials and ineffectiveness of thedrainage envelope. The seepage should be continuously monitored and remedial action takenif deemed necessary by the subproject office.

b. Canals and Other Structures

5. A total of 379 km of main and secondary irrigation canals were constructed underthe Project, compared to 347 km estimated at appraisal. The 10 per cent increase wasnecessitated by redesigning to suit site condition. The major increase is in Baro Raya andMamak, where the total canal length was 238 km and 87 km, respectively, as against the 220km and 74 km estimated at appraisal.

2. Agricultural Support Services and Facilities (Part B)

6. The Executing Agency (EA) forthis component was the Directorate General of Food

The reason for constructing a new Ruebee Weir, instead of rehabilitating the existing structure, was that thecrest of the weir was to be raised, requiring a firm foundation that could not be ensured at the old location;the weir was constructed about 50 m upstream of the old weir.

3

Crops and Horticulture (DGFCH). 1 The five demonstration units (two in Baro Raya, two inMamak, and one in South Lakbok) were constructed as envisaged. The total number of farmersreceiving training was 1,050 against the target of 1,400 in Baro Raya, 960 against 950 in SouthLakbok, and 825 against 700 in Mamak. The number of Project staff who undertook local trainingincluded 44 from Baro Raya, 60 from South Lakbok, and 69 from Mamak. For overseas training,only 12 selected staff were trained for a period of 3 months each or 36 person-months againstthe target of 70 person-months because of a shortage of loan funds.

7. In Mamak, 530 ha of grassland was converted into farm-land, against the target of640 ha. There was no credit arrangement as planned and the agricultural development isexpected to be slow. The development of fish ponds on 250 ha in Mamak could not becompleted as envisaged at appraisal: 100 ha has been developed but the remaining 150 ha canbe best used as grazing land since the soil is sandy and thus extremely difficult to develop intofish ponds.

3. Mapping and Land Reassessment

8. This component was successfully carried out by the Directorate of Land andBuilding Tax (PBB). The land mapping and reassessment of land covered 40,000 ha in BaroRaya, 25,000 ha in South Lakbok, and 15,000 ha in Mamak as envisaged during appraisal. Theexercise has considerably increased tax collection in all three subproject areas. After the landreclassification (1987/88), the tax collection increased by 107 per cent in Baro Raya, 238 per centin South Lakbok, and 46 per cent in Mamak.

4. Consulting Services

9. The consultants were recruited according to the Bank's Guidelines on the Use ofConsultants. In total, 1,321 person-months (383 international and 938 local) were recruitedagainst an estimated 1,180 person-months (390 international and 790 local). The increase wasdue mainly to the delayed completion of civil works in Baro Raya. The performance of theconsultants is assessed in paras. 28 and 29.

B. Implementation Arrangements

1. Project Management and Coordination

10. The EAs were: (i) DGWRD under the Ministry of Public Works, for theirrigation/drainage and related works; (ii) DGFCH under the Ministry of Agriculture, regarding theagricultural support services and facilities; and (iii) PBB within the Directorate General of Taxationunder the Ministry of Finance for the mapping and land reassessment activities. Within DGWRD,the Directorate of Irrigation-Il 2 was responsible for implementing the Baro Raya and Mamaksubprojects, and the Directorate of Rivers for the South Lakbok subproject. DGWRD establishedProject offices in Sigh for the Baro Raya subproject and in Sumbawa Besar for the Mamaksubproject, while the Project office of Citanduy River Basin Development was used for the SouthLakbok subproject. DGFCH, through its Directorate of Land Development and Rehabilitation,coordinated the Project activities, which were mostly delegated to the Provincial Agriculture

Formerly Directorate General of Food Crops Agriculture.The Directorate of Irrigation-I (Dot-I) prior to 1993.

4

Service (PRAS). A Project management unit was established at the provincial level. At the Projectlevel, a field management team headed by a field manager was formed to conduct day-to-dayactivities of each subproject. PBB implemented the mapping and land reassessment directly fromits central office in Jakarta, but it appointed one staff member of the provincial office to superviseimplementation at each subproject. The coordination of those activities was to be carried out bythe District Chief (Bupati) at the Project level, by the Chief of Badan Perencanaan PembangunanDaerah (BAPPEDA) at the provincial level, and by DGWRD at the National level. However, onlyminimal coordination actually occurred. Coordination meetings took place only when a BankMission was reviewing the Project. The lack of coordination led to several problems duringimplementation, for example: (I) DGFCH's design of land development in Mamak covered someareas outside the Project; this mistake was identified by the Bank Review Mission in 1991, andthe design was then revised accordingly; and (ii) DGFCH's establishment of tertiarydemonstration units was delayed because DGWRD did not give priority to construct the neededtertiary systems.

2. Operation and Maintenance

11. The O&M of the main irrigation systems (dam, weirs, main canals, and secondarycanals) was to be carried out by DGWRD for two years after physical completion of the Projectand continued by Provincial Irrigation Services thereafter, while the O&M of the tertiary systemswould be the responsibility of the farmers through the Water Users' Associations (WUAs). In theSouth Lakbok and Mamak subprojects, O&M units within the Project offices were established,and staff from these units will be transferred to the District Irrigation Services when the Projectis officially transferred to the Provincial Irrigation Services. 1 In South Lakbok, the O&M has beenwell implemented, but in Mamak although the organization was established, O&M activities werelimited by insufficient funds. In Baro Raya the O&M organization has not been established; theirrigation facilities are being operated by Project staff on an ad-hoc basis, and no O&M budgetwas provided for the current year except for O&M of Tiro Weir; 2 however, the O&M works couldnot be carried out because staff were not available.

3. Water Users' Associations

12. The WUAs were formed according to procedures detailed in the Appraisal Report.At the time of Project Completion Report (PCR), 420 WUAs were officially established at allsubprojects: 274 at Baro Raya, 71 at South Lakbok, and 75 at Mamak. In South Lakbok, theWUAs have been quite active in the O&M of tertiary systems, but those in Mamak and Baro Rayahave been less active. The activities of the WUAs largely depend on the guidance received fromthe extension workers and local authorities, which was lacking in Mamak and Baro Raya.

4. Irrigation Committee

13. The irrigation committee was established at each subproject and chaired by theDistrict Chief (Bupati). The members of the committees included the District Irrigation Service,District Agriculture Service, farmers' representatives, and other local authorities. Each committeeis to meet at least once a year to determine the cropping pattern, and to provide guidance toProvincial Water Resources Services, PRAS, and WUAs on matters relating to irrigation for the

Now Provincial Water Resources Services.

Maintenance works include general cleaning, proper functioning of gates and sediment flushing.

5

next planting season. In all subprojects, the cropping pattern was not strictly followed by thefarmers. In Mamak and Baro Raya, farmers with land close to the headworks could grow threerice crops yearly while those at the tail ends could not. In this regard, extension workers shouldbe more active guiding the farmers on the cropping pattern so as to obtain optimum benefit ofthe Project.

C. Project Costs and Financing

1. Project Costs

14. At appraisal, the total cost of the Project was estimated at $148.8 million, includinginterest during construction, taxes, and refinancing of two earlier technical assistance (TA)loans. 1 The actual expenditures for the Project by the end of August 1994 in current pricesamounted to $155.3 million; the Government is expected to spend about $1.6 million more tocomplete the last 2-km section of drainage canal in Baro Raya and excavation at the Keumalaheadworks also in Baro Raya. Upon completion of these activities, which is expected by the endof FY 1994/95,2 the total Project cost will be $156.9 million. The actual Project cost will then be5 per cent higher than the appraisal estimate, with the actual foreign exchange cost being 7 percent and local cost 4 per cent above the appraisal estimate. A comparison of the Project costsas appraised and as actually incurred is presented in Appendix 2 and summarized in Table 1.

Table 1: Summary of Project Costs($ '000)

Overrun/Item Appraisal_Estimate _______ Actual ________ (Underrun)

_________________________ Foreign Local Total Foreign Local Total (%)

Baro Raya Subproject 18,350 34,606 52,956 25,337 40,160 65,497 24South Lakbok Subproject 7,530 10,869 18,399 7,253 10,287 17,540 (5)Mamak Subproject 16,820 15,735 32,545 16,918 12,837 29,656 (9)Taxes 0 10,500 10,500 0 10,234 10,234 (3)Interest During Construction 25,700 0 25,700 24739 0 24,739 (4)Refinancing of TA Loans 8,700 0 8,700 7,916 0 7,916 (9)

Total 77,100 71,700 148,800 82,164 74,749 156,913 5

Source: Tab'e I of Appendix 2

In Baro Raya subproject, a large cost overrun occurred, amounting to about $12.5 million or 24per cent above appraisal estimate. This cost overrun was mainly due to poor original design bythe consultants, which necessitated redesigning and additional works resulting in long delaysand extensive contract variations during construction.

15. The Bank loan of $120.7 million, representing 81 per cent of the total cost, wasprovided to finance the entire foreign exchange cost ($77.1 million) and part of the local costs($43.6 million). The Government was to finance the remaining local cost of $28.1 million. Actualdisbursements from the Bank loan amounted to $120.4 million, while the Government has spent

TA Loans No. 582-INO and No. 639-INO.Government budget has been approved.

6

$34.9 million, and will spend $1.6 million in FY 1994/95. Overall, the Bank met 77 per cent of thetotal cost and the Government 23 per cent (see Appendix 3). The Government share of the totalcost was higher than expected because it had to bear part of the cost overrun in the Baro Rayasubproject.

0. Project Implementation Schedule

16. It was envisaged at appraisal that overall Project implementation would requireabout six years, from 1987 to 1993. Detailed engineering design of the Project was completedin 1986 prior to the appraisal;' accordingly, the preparation for tendering the civil works shouldhave been commenced immediately thereafter. In Mamak and South Lakbok, the services of civilworks contractors were procured relatively on time and they completed the works within theimplementation schedule as appraised. However, in Baro Raya, the detailed engineering designrequired extensive revisions which were done by the consultant, whose recruitment was delayedby one year. This delayed the procurement of services of civil works contractors by more thanone year (see Appendix 4). During construction, additional design modifications were requiredto suit field conditions, which further delayed the completion of the Project. Other problemscontributing to the delay in Baro Raya were (i) unsatisfactory performance of some of thecontractors, (ii) land acquisition problems, and (iii) poor supervision of ongoing works. The totaldelay was two years. The six years' implementation period envisioned during appraisal shouldhave been adequate, as reflected in South Lakbok and Mamak. The delay in Baro Raya resultedfrom the less-than-satisfactory performance of the consultants and the Project management.Furthermore, the contractors selected did not perform satisfactorily even though they had beenprequalified.

E. Engagement of Consultants and Procurement of Goods and Services

1. Consulting Services

17. The Project Consultants were recruited in accordance with the Bank's Guidelineson the Use of Consultants. Five groups of consulting firms, consisting of associations of foreignand local firms, were engaged under the Project. Three groups were engaged by DGWRD forconstruction supervision, one group for each subproject. One group was recruited by DGFCHfor strengthening the agricultural support services, and the other worked for PBB for supervisingmapping and land reclassification. Table 2 summarizes the consulting services for the Project.In Baro Raya, the consultant's contract was extended following the extension of the various civilworks contracts. In Mamak, in addition to the supervision consultants, DGWRD recruited twointernational experts (totaling three person-months) to ensure the quality of the design andconstruction of the dam and the safety of the dam and reservoir. The recruitment wasrecommended by the Bank.

Detailed design for Baro Raya was carried out under Loan No. 582-INO: Tulungagung II and Baro RayaIrrigation, for $4.350 million, approved on 14 September 1962; and that for Mamak was conducted underLoan No. 639-INO: West Nusa Tenggara Irrigation Study, for $3450 million, approved on 22 September 1963.The detailed design for South Lakbok was undertaken by local consulting firms under Government financing.

7

Table 2: Summary of Consulting Services

Number of Person-months

Component Subproject Appraisal_Estimate _____ Actual

Int'l Local Total Int'l Local Total

Irrigation/drainage Baro Raya 113 338 451 127 463 590South Lakbok 56 72 128 54 51 105Mamak 148 256 404 129 271 400

Agricultural support All subprojects 67 100 167 67 124 191Land reassessment All subprojects 6 24 30 6 29 35

Total 390 790 1180 383 938 1321

Note : Intl = internationalSource : Consultants contracts.

2. Civil Works

18. Under the irrigation/drainage component, the packaging of civil works contractsdiffered among the subprojects. In Baro Raya, the civil works were divided into eight largepackages. Two of these packages were tendered following international competitive bidding(ICB) in accordance with the Bank's Guidelines for Procurement and awarded to localcontractors; the remaining six packages were tendered under local competitive bidding (LCB)procedures. Each contract package covered the construction of main and/or secondary irrigationcanals, drainage canals, tertiary canals, and related structures. The lOB contract packages alsocovered the construction of weirs (Tiro and Reubee). In South Lakbok, civil works were dividedinto 28 relatively small packages. The main systems (main and secondary irrigation canals),drainage canals, river levees, roads, and related structures were divided into 12 major packages;tertiary systems were split into 14 small packages; and the remaining two packages covered theconstruction of buildings (houses for O&M). All contracts were awarded under LCB proceduresas envisaged at appraisal. In Mamak, the civil works were grouped into 14 packages. Twopackages dealt with the preparation works, i.e., construction of field offices-cum-housing andaccess roads; one big package was for construction of Mamak dam; four packages coveredconstruction of main and secondary canals and related structures; five packages were forconstruction of tertiary systems; and the remaining two packages dealt with the minor finishingworks of the dam such as landscaping and the pontoon jetty. The package for constructingMamak dam was awarded to an international contractor under ICB procedures, while theremaining 13 packages were awarded using LOB procedures. Under the agricultural supportcomponent, the civil works contracts were small, consisting of field offices, laboratory buildings,staff houses, and other facilities within the demonstration units' compounds.

3. Equipment

19. The equipment procured under the irrigation/drainage component included (i)hydrological and meteorological equipment, (ii) telecommunication equipment for flood warningsystems, and (iii) O&M equipment. All items were procured through international shoppingprocedures. Equipment for the agricultural support component consisted of (i) farmingequipment, (ii) laboratory equipment, (iii) furniture, and (iv) farm supplies and implements. The

8

first two were procured under International Shopping (IS) procedures, furniture was acquiredthrough LCB, and farm supplies and implements were purchased directly.

4. Training

20. Underthe agriculture support component, overseas training for 12 DGFCH officialswas awarded to Asian Institute of Technology Bangkok after comparison with several overseasuniversities. Field-level training for officials and farmers was conducted in several groups at eachsubproject by the nearby qualified universities, research agencies, or training institutions on thebasis of direct appointment. At the request of DGFCH, the Bank approved direct appointmentprocedures as the institutions were well qualified and a limited number of them were availablenearby the Project sites.

5. Land Reassessment Works

21. Land reassessment activities (including aerial photography, land classification,listing of land ownership, and cadastral mapping) were awarded to three local contractors, onefor each subproject, under LCB procedures as envisaged at appraisal.

F. Performance of Consultants and Contractors

1. Consultants

22. Under the DGWRD component, three groups of consulting firms were recruited,one for each subproject. While the consultants for South Lakbok and Mamak performed well,those for Baro Raya did not. The detailed design of the Baro Raya subproject was modifiedextensively by the consultant during the construction stage because (i) the design, which wasdone by the same consultant, was based on inaccurate topographical mapping; and (ii) DGWRDfrequently requested during the construction modifications necessitated because of the poordesign.

23. The international consultants working under the DGFCH component performedsatisfactorily, but the local consultants could have performed better. A large number of the localconsultants did not work full time for the Project and did not submit their reports after completingtheir assignments until the Bank insisted that they do so. Consulting firm recruited under PBBcomponent also did not perform well. Its supervision of the land reassessment work was noteffective, as the consultants did not recognize that the landholding maps for South Lakbok wereinaccurate.

2. Contractors

a. DGWRD Components

i. Baro Raya Subproject

24. All of the contractors engaged under the Baro Raya subproject were delayedabout two years in completing the work by one or a combination of the following factors: (i) poorperformance of the contractors, (ii) frequent design changes by the consultant and the EA, and(iii) delayed land acquisition. One of the contractors was judged incapable of carrying out the

required works because of financial problems (despite having been prequalified) and wasterminated. One contractor also faced serious financial problems and had to subcontract partof the works to another contractor.

25. The quality of the weirs (Tiro and Reubee) and irrigation structures is generallygood, but the quality of the canals varies depending on the contractors. The canals in the Tirosystem appear to be good, but those in the Baro Right and Reubee systems are not; the poorestquality is observed in the Baro Left system. The quality of the drainage canals is marginal toacceptable.

ii. South Lakbok

26. The performance of the contractors in South Lakbok subproject was generallygood. Most of the contractors completed the works on schedule, except that the tertiary canalswere delayed slightly. The construction quality of irrigation and drainage canals, and relatedstructures is good. Instead of engaging a few large contractors, the management of SouthLakbok subproject employed 28 contractors on a sequential basis, which was easy to supervise,and if anything went wrong with one contractor, the impact would not be great.

iii. Mamak

27. The international contractor did an excellent job constructing Mamak Dam. Thework was completed eight months ahead of schedule and the construction quality is good. Othercontractors in charge of the irrigation facilities were slightly delayed in completing their work. Thequality of structures is good but that of the canals is marginal. The tertiary system developmentwas delayed more than a year, which delayed the accrual of benefits. The appraisal expectationof tertiary development might have been overly optimistic.

b. DGFCH Component

28. Contractors engaged under the DGFCH component were small contractors,constructing mainly office buildings and houses. Their performance was generally satisfactory.

c. PBB Component

29. Under this component, the contractors were engaged for reassessing land byaerial photography and preparing landholding maps. The contractors for Baro Raya and Mamakperformed well, those for South Lakbok did not: PBB staff found their landholding maps to beinaccurate, and the contractor failed to make necessary corrections. The maps were correctedby PBB staff, and the contractor was not fully paid.

G. Conditions and Covenants

30. The Loan Agreement was signed on 8 December 1986 and became effective on24 February 1987. The Borrower did not have difficulty complying with the conditions of loaneffectiveness. The Government has complied with most of the covenants, but the following areasneed to be improved: (i) engagement of competent consultants and contractors, (ii) coordinationof Project-related activities at the central level as well as at the Project level, (iii) submission ofaudited financial reports, (iv) provision of O&M funds for two years after the completion of the

10

Project, (v) recovery of the O&M cost of irrigation, and (vi) benefit monitoring. The status of theGovernment's compliance with various loan covenants is given in Appendix 5.

H. Disbursements

31. Actual disbursements were made during 7.5 years (March 1987 to August 1994),compared with the 6 years envisaged at appraisal. The longer disbursement period was causedby the delay in physical completion of the Project rather than by contractual or loanadministration constraints. Because of the cost overrun in Baro Raya, the Government had toprovide additional funds. It requested reallocation of loan proceeds among categones, and thischanged the Bank financing percentage for civil works in Baro Raya from 95 per cent to 66 percent. The Bank approved the request in May 1993. The total amount disbursed ($120.4 million)was 99.8 per cent of the loan amount estimated at appraisal ($120.7 million). The unused loanbalance of about $0.3 million was canceled when the loan was closed in August 1994. Thedetails concerning disbursement of the loan proceeds can be found in Appendix 6.

I. Environmental Impact

32. The Project has had a positive impact on the environment by eliminating floodingin many parts of the Project area, particularly in South Lakbok where drainage was provided to950 ha of flooded land. As envisaged at appraisal, with the improved availability of water and theelimination of flooded areas, the Project is improving the living conditions of the people in theProject area. The improvement of a portion of the tail end drainage in the Baro Raya subprojecthas brought about significant improvement in the habitat downstream of the Sigh River close toSigh City. With the Government budget already provided for the remaining 2 km, the tail enddrainage canal is expected to be rehabilitated and widened to increase the capacity of the maindrainage canal. This will drain the remaining flooded area (about 200 ha) upstream. The problemof periodic flooding during the wet season has been substantially reduced and the incidence ofwaterborne disease minimized. The environmental impact of the Mamak Darn was not assessedduring project formulation. In 1991 with Government financing, local consultants did anenvironmental evaluation study of the Mamak Dam and the downstream irrigation facilities. Theconsultants found that no major adverse environmental impacts would be expected from theconstruction of the dam and implementation of the Project. A minor impact is the reducedgrazing land for livestock because part of the area was inundated to form the reservoir. Howeverthis is compensated for by the production of paddy straw, which can be used to feed theanimals.

J. Project Benefits

1. Benefit Monitoring and Evaluation

33. According to the Loan Agreement, the EA was required to conduct benchmarksurveys for each subproject six months after the loan effectivity date and seasonal benefitmonitoring reviews for five years beginning with the initial delivery of irrigation services to theProject area. Those activities were to be carried out by the Project staff, and continued by PRASuntil the Project reached full development. However, benchmark surveys were actually conductedby the consultants specifically recruited for this purpose, instead of by the Project staff, and wasdone in 1989, almost two years after the loan effectivity date. Therefore, the result of thesesurveys did not accurately reflect the situation before the Project. At Project completion, the EA

11

again recruited consultants to conduct the benefit monitoring reviews covering five croppingseasons in 1991 and 1992. The reports produced by the consultants were of little use inmonitoring Project benefits. Data in the reports reflected the present situation; no comments weremade as to whether current agriculture production reflected the expected benefits nor were anyremedial measures required identified. No system has been established to continually monitorProject benefits. The data currently available with PRAS concerns production and cropped areasfor various crops on a subdistrict basis. Because several subdistricts are partially included in theProject areas, it is not possible to determine Project benefits accurately.

2. Crop Production

34. At the time of the Project Completion Mission (PCM), the total cropped area wasestimated at 50,000 ha. With the improvement of the O&M activities, and wider adoption of thenew cropping patterns by farmers, it is expected that at full development in 1998 (see Appendix7), the total cropped area will be about 61,170 ha with a cropping intensity of 209 per cent,compared with the cropped area of 33,930 ha and cropping intensity of 116 per cent without theProject. Table 3 compares cropped areas estimated at appraisal and by the PCM. The differencebetween the cropped area estimated at appraisal and that estimated by the PCM was due mainlyto the inclusion of about 1,000 ha of land that was thought to be required for canal, drainage,and road rights-of-way at the time of appraisal. The PCM found that this requirement had beenoverestimated, as many primary and secondary canals already existed and only neededrehabilitation. The detailed comparison between cropped areas and cropping intensities atappraisal and PCR is presented in Appendix 7. Crop yields vary among the subprojectsdepending on the agricultural development stage. In Baro Raya, the basic irrigation structuresalready existed and farmers were familiar with irrigated agriculture; therefore, at PCR time, theaverage paddy yield had already reached 4.7 metric tons (t)Iha; data from the District AgriculturalService showed even higher yields for paddy (over 6 t/ha). The yield of paddy in South Lakbokwas estimated at 4.0 t/ha during preparation of the PCR, and that in Mamak at 3.5 t/ha.Statistics provided by the District Agricultural Services and the Mission's estimates followingfarmer interviews showed that, at full development, the paddy yields are expected to reach 6.2t/ha at Baro Raya and South Lakbok and 5.6 t/ha at Mamak in the wet season. The overallproduction of paddy for the whole Project at full development is estimated at 250,000 t with theProject, and 130,000 t without it, giving an incremental production of 120,000 t of paddy asagainst the 94,680 t estimated at appraisal.

Table 3: Projected Cropped Areas in Future With and Without Project

Appraisal_______________PCR

Subproject Cropped Areas Cropping Intensity Cropped Areas Cropping Intensity(ha) (%) (ha) ________(%)

F. W/O F.W. F. W/O F.W. F. W/O F.W. F. W/O F.W.

Baro Raya 21,650 36,000 114 200 21,770 38,240 114 200

South Lakbok 6,080 10,320 124 208 6,080 10,800 124 218

Mamak 6,310 12,130 118 210 6,080 12,130 117 234

Total 34,040 58,450 116 203 33,930 61,170 116 209

Note: F. W/O future without Project situation; F.W. = future with Project situationSources: Project offices and Mission estimates.

12

3. Farm Income and Employment

35. On the basis of average farm sizes in the three subprojects as estimated atappraisal and information collected by the PCM, net farm incomes were computed andcompared with those estimated at appraisal. Detailed farm budgets are presented in Appendix8 and summarized in Table 4. At full development, as a result of increased crop production, theinduced annual employment opportunities are estimated at around 12,200 person-years in BaroRaya compared with 10,600 person-years envisaged at appraisal; 4,000 person-years in SouthLakbok against 4,100 person-years estimated at appraisal; and 4,700 person-years in Mamakagainst the appraisal estimate of 4,600 person-years. The total incremental employmentgenerated is estimated at about 20,900 person-years per annum, which is comparable to theappraisal estimate of 19,300 person-years, taking into account the larger service area in BaroRaya estimated by the PCM (see para. 34). Table 4 shows that incremental net farm incomesin 1994 constant prices computed by the PCM are slightly higher than those estimated by theAppraisal Mission. The increase in income between the with and without Project situations issmaller in Baro Raya than in the other two subprojects; this is consistent with the PCM'sobservation that paddy yield was high in the Baro Raya area even before the Project started.

Table 4: Farm Income(R p '000)

___________________________________ Baro Raya South Lakbok Mamak

1. Farm Size (ha) 0.78 0.50 1.0

2. Income at full development

a. Appraisal estimates (Rp '000)Without Project 413 193 200With Project 1,001 627 1,179Incremental Income

1986 Prices 588 434 9791994 Prices 1,101 813 1,833

b. PCM' Estimates (Rp '000)Without Project 886 392 493With Project 2,003 1 ,451 2,578Incremental Income

1994 prices 1,117 1,059 2,084

Source: Project offices and Mission estimates.

4. Economic Analysis

36. At the time of the PCR, considerable benefits had been achieved. However, theMission observed that agricultural development was rather slow with respect to provision ofextension services and improving access to agricultural credit. In the Mamak area, the adoptionof the extensive cultivation will require a longer time to attain full development than had beenexpected. Based on data collected by the PCM, economic analyses were carried out for eachsubproject and for the overall Project (Appendix 7). The economic internal rate of return (EIRR)

13

of the entire Project is estimated at 9.4 per cent compared with 15.6 per cent at appraisal. TheEIRRs for each subproject were estimated as: 9.2 per cent for Baro Raya, 13.3 per cent for SouthLakbok, and 6.5 per cent for Mamak, compared with the appraisal estimates of 18.4 per cent,15.1 per cent, and 11.8 per cent, respectively. The main reasons for the low EIRR of the BaroRaya subproject were (I) long delays in subproject implementation (about 2 years); (ii) a largecost overrun (about 24 per cent of original estimate); and (iii) high paddy yield in the TMfuturewithout Projecr situation because farmers had been using irrigation even before the Project. Inthe Mamak subproject, the reasons for the low EIRR included (i) delayed development of tertiarycanals, which delayed the accrual of benefits for about two years; (ii) the low level of extensionwork promotion, which extended the long benefit build-up period to seven years; and (iii) thevery high investment cost of $5,725 per ha (in current terms) compared with $3,426/ha for BaroRaya and $3,536/ha for South Lakbok.1

K. Performance of the Borrower and Executing Agencies

1. Irrigation/Drainage and Related Works

37. During implementation, DGWRD had assigned as many as 220 technical andsupport staff to the Project, including 110 in Baro Raya, 50 in South Lakbok, and 60 in Mamak.In South Lakbok, the Project Team performed very well under the guidance of a very seniorDGWRD official, the General Manager of Citanduy River Basin Development Project. In Mamak,the Project team performed reasonably well. In Baro Raya, however, the Project Managementwas somewhat weak, particularly in (I) selection of competent contractors, (ii) field supervisionand monitoring of civil works, and (iii) providing adequate supervision and guidance to theconsultants. At the central level, DGWRD as the main EA, did not coordinate with other agenciesas expected. The coordination among agencies was later conducted by Bappenas (NationalDevelopment Planning Agency). Overall, DGWRD's performance as an EA was generallysatisfactory.

2. Agricultural Support Services

38. DGFCH delegated the authority to implement the Project to PRAS in eachprovince. PRAS then established a field management team to carry out daily activities at fieldlevel. While the field management team at each subproject was satisfactory, DGFCH failed toeffectively monitor the activities and provide necessary guidance to PRAS. This failure wasreflected in its inability to react to the delays in procuring laboratory equipment and establishingthe demonstration units. Further, DGFCH was unable to plan in advance the proper functioningof the demonstration units upon Project completion. Therefore, the performance of DGFCH wasless than satisfactory.

3. Mapping and Land Reassessment

39. PBB implemented the mapping and land reassessment in all subprojects one yearahead of schedule and with acceptable quality. It rectified the inaccuracies of landholding mapsin South Lakbok. Therefore, the performance of PBB was satisfactory.

The average investment cost of the Second Irrigation Package Project (Loan No. 627-INO, for $58.21 million,approved on 19 May 1983) was $3,537/ha in current terms.

14

L Performance of the Bank

40." The Project was appraised based on the detailed engineering design financed byBank TA loans for Baro Raya and Mamak, and by the Government for South Lakbok. In BaroRaya, the design was not detailed enough for implementation, requiring numerous revisions andmodifications. Very limited time was available during fact-finding and appraisal. The Bank failedto identify this problem, as it was not possible to adequately verify topographic mappingaccuracy in view of the varied topography of the Project area. The Bank monitored Projectimplementation through periodic review missions and progress reports submitted by the EAs.The Bank dispatched seven review missions totaling 211 person-days, which generally had apositive impact on Project implementation. During these missions, problems such as poorconstruction quality, slow work progress, and cost overruns were addressed and brought to theattention of higher authorities of the Government. The potential cost overrun in Baro Raya wasfirst identified by the Bank in 1990, and the Bank recommended that DGWRD simplify the designto minimize the cost. However, because of DGWRD's continued insistence on maintaining themore elaborate design, the Bank consented. Had the Bank insisted on simplification, the costoverrun could have been reduced. The Bank acted promptly to reallocate loan proceeds, extendloan closing dates, process bid evaluation reports and contracts, and process withdrawalapplications. The staff of the Indonesia Resident Mission, delegated to administer the Project,provided continuing dialogue between the EAs and the Bank on problems requiring immediateattention. As a result of the Bank's readiness to respond to various requests from the EAs,serious implementation problems were avoided. On this basis, the Bank's performance may beconsidered generally satisfactory.

Ill. CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions

41. Even though Project completion was delayed, the objectives of the Project havebeen met in all three subprojects; cropped areas and yields of major crops have increased, ashave associate economic activities. The EIRR of the entire Project is estimated at 9.4 per centcompared to 15.6 per cent expected at appraisal. The high cost of investment in the Mamaksubproject and the frequent changes in Project design in the Baro Raya subproject, resulting ina cost overrun, a long implementation delay, and a long build-up period for benefits were themain cause of the low EIRR. However, the farm income is expected to be satisfactory and evenhigher than appraisal estimates for each subproject area. The target levels of agriculturalproduction are expected to be reached. On the whole, the results of the Project can beconsidered generally satisfactory.

B.. Recommendations

1. Project-Related

a. Land Acquisition

42. It is important to assure that all the land needed is acquired before a contract isawarded. The Bank and the Government should closely monitor the progress of land acquisitionand administrative actions taken in a timely manner to avoid unnecessary delays.

15

b. Project Management

43. Bank review missions should regularly evaluate the quality of Project management,and, if the missions find Project management to be weak, the issue should be immediatelydiscussed with the Government so that joint action can be taken to avoid problems such as thatoccurred in Baro Raya.

c. Supervision of Consultants

44. The EA should strictly supervise the consultants, from the detailed engineeringdesign stage, and assess the quality of the designs thoroughly (see para. 22). Over design andprovision of overly sophisticated and costly structures should be minimized to avoid costoverruns.

d. O&M Organization

45, In ongoing and future irrigation projects, more attention should be paid to theorganization of project O&M works. Staff assignments should be made well before projectcompletion. In addition, adequate budget must be allocated in a consistent manner to ensuresustainability and proper functioning of project facilities. To this end, the Bank should activelyfollow up the implementation of the time-bound Action Plan on the O&M Policy Statement of theGovernment, as incorporated in the Second Integrated Irrigation Project.1

e. Water Users' Associations

46. For the WUAs to be more effective in the development and maintenance of thetertiary canal systems, potential members of WUAs should be actively involved during theplanning, design, and implementation stages of the Project.

f. Follow-up Actions

47. The rehabilitation of the tail end drainage in Baro Raya should be completed withinFY 1994/95 to avoid loss of benefits due to flooding. Adequate funds, estimated at about $1.6million have been allocated for the rehabilitation. The funds should be released in a timelymanner for efficient implementation. The Government should prepare a precise plan includingstaffing and funding to enable the proper functioning of the laboratories at the demonstration unitin each subproject; otherwise the equipment will deteriorate.

g. Benefit Monitoring and Evaluation

48. Because the EA needs to enhance its skills in benefit monitoring and evaluation(BME), all DGWRD staff directly involved in BME, especially staff at project level, should receiveappropriate training. BME is not a priority of many EAs on Bank-financed projects. DGWRDcarried out the task reluctantly, and probably only because the pertinent tasks were covenanted.In the case of Loan No. 952(SF)/953-lNO2, for instance, there is a special budget category forBME, but it is not being effectively used and the EA is asking to use the BME allocation for civil

Loan No. 1296-INO, for $100.00 miHion, approved on 20 January 1994.Nusa Tenggara Agricultural Development, for $119.00 million, approved on 7 February 1989.

16

works. Recently, the Bank tried unsuccessfully to organize a workshop on BME, but EAs did notshow interest and an adequate number of participants were not identified. The PCM thereforerecOmmends that the Bank's BME practices be reviewed thoroughly to determine how theyshould be best formulated and implemented.

h. Project Performance Audit Report

49. The Project performance audit report should be undertaken in late 1997, when thefull Project benefits are expected to be achieved.

2. General

50. The main recommendation concerns the timing of accrual of benefits. In allsubprojects, the Appraisal Mission assumed that benefits would start to accrue even before thecompletion of the head works. In Mamak, the dam was not to be completed until 1991 accordingto the implementation schedule, but benefits were assumed to accrue from 1989; similarobservations apply to the other two subprojects. If more realistic assumptions had been usedin the economic analysis, lower EIRRs would have been projected at appraisal for all the threesubprojects.

17

No.

1

2

3

4

5

6

7

8

LIST OF APPENDIXES

Status of Main Project Components

Project Cost in Current Prices

Actual Financing of the Project

Implementation Schedule

Status of Compliance with Loan Covenants

Annual Disbursement of Loan Proceeds by Category

Economic Analysis

Farm Budgets

Page

18

21

25

26

29

36

37

49

18

Appendix 1Page 1

STATUS OF MAIN PROJECT COMPONENTS

Table 1: Baro Raya

Components As Appraised Actual

Part A:Service Area 18,000 ha 19,120 ha

Tiro 6,000 ha 6,330 haBaro Kanan 8,320 ha 8,920 haBaro Kin 2,900 ha 3,030 haReubee 780 ha 840 ha

Tiro Weir (No.) 1 1Reubee Weir (No.) 1 1Main Canal 14 km 22 kmSecondary Canal 206 km 216 kmRelated Canal Structures (No.) 510 1,110Tertiary Units (No.) n.s. 276Main & Secondary Drains 147 km 169 kmRoad Improvement 102 km 102 km

Part B:Demonstration Units 2 2Overseas Training 30 12No. of Farmers Trained 1,400 1,050No. of Staff Trained fl.S. 36Formation of WUA's 280 274

Part C:Mapping and Land Reassessment 40,000 ha 40,000 ha

n.s. = not specified; WUA = Water Users' Association.Source: Appraisal Report and Project offices.

(Reference in text: page 2, para. 3)

19

Appendix 1Page 2

Table 2: South Lakbok

Components As Appraised Actual Remarks

Part A:Service Area 4,970 ha 4,960 ha * * Of thelmgable Area 4,020 ha 4,130 ha service area ofDrained 950 ha 830 ha * 4,960 ha,Feeder Canal (Manganti) 3.4 km 3.6 km 4,130 ha isMain Canal 24 km 27 km irngable,Secondary Canal 29 km 27 km leaving theRelated Canal Structures (No.) 270 268 remaining 830Tertiary Units (No.) n.s. 72 ha which isMain & Secondary Drains 37 km 38 km not irngableFlood Protection Dikes 5.3 km 6.7 km but providedRoad Improvement 43 km 52 km with drainage

facilities only.Part B: Out of the 830Demonstration Units 1 1 ha un-irrigable,Overseas Training 20 MM 12 MM 90 ha remainsNo. of Farmers Trained 950 960 flooded andNo. of Staff Trained n.s. 60 740 ha rainfed.Formation of WUAs 70 71

Part C:Mapping and Land Reassessement 25,000 ha 25,000 ha


20

ApDendix 1Page 3

Table 3: Mamak

Components As Appraised Actual Remarks

Part A:Service Area 5,770 ha 5,180 ha

Upper Area (Mamak) 4,100 ha 3,900 haLower Area (Kakiang) 1,670 ha 1,280 ha

Dam 41.5 m/30 Mn M3 41.5 m/30 Mn M3Mamak Weir (No.) 1 1Kakiang Weir (No.) 1 1Main Canal 32 km 11 kmSecondary Canal 42 km 76 kmRelated Canal Structures (No.) n.s. 451Tertiary Units (No.) n.s. 133Main & Secondary Drains n.s. 17.1 kmRoads 23 km 22 km

Part B:Demonstration Units 2 2Overseas Training 20 MM 12 MMNo. of Farmers Trained 700 825No. of Staft Trained n.s. 69Formation of WUA's 75 75No. of Farmers Relocated 56 70No. of Farmers Resettled None 250Conversion of Grassland into 640 ha 530 ha * * 110 ha

Farm Land developedDevelopment of Fish Ponds 250 ha 100 ha by farmers

at their ownPart C: expenses.Mapping and Land 15,000 ha 15,000 ha

Reassessment


A. IRRIGATiON I DRAINAGEa. Land acquisitionb. Civil Worksc. Equipmentd. Consulting Servicese. Administration

Subtotal

B. AGRI. SUPPORT SERVICEa. Land acquisitionb. Demonstration unitsc. Land developmentd. Equipment, implementse. Trainingf. Consulting Servicesg. Administration

Subtotal

C. LAND REASSESSMENTa. Mappingb. Equipmentc. Consulting Servicesd. Administration

Subtotal

TOTAL

D. Taxes

E. Interest During Construction

TOTAL PROJECT COS

F. Refinancing of TA Loansa. Outstanding Balanceb. Interest

GRAND TOTAL

I(0

CD

(11

-o

p-&

0

90

90

0

9

9

0

150

361

511

286

344

630

136

0

209

209

0

152

152

0

435

1,882

2,317

357

1,287

1,644

(76)147

438

585

114

453

567

(33)

927

442

1,369

725

700

1,425

(202)

0

886

886

0

233

233

0

1,659

4.308

5,967

1,482

3,179

4.661

(iT?)

PROJECT COST IN CURRENT PRICESTable 1: Overall Project

APPRAISAL ACTUAL OVERRUN I (UNDERRUN)FX - LC TOTAL FX LC TOTAL FX LC TOTAL

o 6,090 6,090 0 9,124 9,124 0 3,034 3,034

34,525 41,151 75,676 42,412 45,340 87,752 7,887 4,189 12,076

1,195 896 2,091 501 0 501 (694) (896) (1,590)

4,583 3,300 7,883 4,647 4,033 8,680 64 733 797

0 4,795 4,795 0 2,401 2,401 0 (2,394) (2,394)

40,303 56,232 96,535 47,560 60,899 108.459 7257 4667 11,924

(18ff

8,113

(81)(17)(57)

(595)15

258(653)

(1,129)

(81)119(57)

(672)(18)56

(653)(1,306)

6501178

0738

42,700

0

25,700

68,400

518 1,167

0 11

68 146

75 75

660 1,398

61,200 103,900

10,500 10,500

0 25,700

71,700 140,100

4190

480

467

49,509

0

3290

6443

437

64,515

10,234

7480

11243

904

114,023

10,234

24,739

148,997

(230)(11)(30)

0(271)

6,809

0

(961)

5,848

(188)0

(3)(32)

(223)

3,315

(266)

0

3,049

(419)(11)(33)(32)

(494)

10,124

(266)

(961)

8,897

24,739 0

74,248 74,749

5,700 0 5,700 4,916 0 4,916 (784) 0

3,000 0 3,000 3,000 0 3,000 0 0

77,100 71.700 148,800 82.164 74,749 156,913 5,064 3,049

FX = Foreign Exchange; LC = Local Currency; TA = Technical AssistanceSource: Project Files

LC Total

1,651 1,851

5,680 13,368

(337) (773)

522 547

(1,271) (1,271)

6,446 13.722

(49) (49)(2) 58

0 0

(415) (433)

(43) (53)

76 (93)

(328) (328)

(761) (898)

(98) (220)

0 (5)

(13) (36)

(18) (18)

(128) (279)

5.557 12.546

07,687

(436)250

7,276

060

0(17)(10)

(169)0

(137)

(122)(5)

(24)0

(150)

6,989-UI>

(DD

x.

Table 2: Baro Raya Project Cost In Current Prices(Excluding Taxes and IDC)

APPRAISAL ACTUALFX LC Total FX LC Total

A. IRRIGATION / DRAINAGEa. Land acquisition 0 4,612 4,612 0 6463 6,463b. Civil Works 15,164 23,276 38,442 22851 28,958 51810c. Equipment 436 337 773 0 0 0d. Consulting Services 1,687 1,619 3,306 1,712 2,141 3853e. Administration 0 2,574 2,574 0 1,303 1,303

Subtotal 17.287 32,420 49,707 24,563 38,866 63,429

B. AGRI. SUPPORT SERVICEa. Land acquisition 0 49 49 0 0 0b. Demonstration units 58 140 198 118 138 256c. Land development 0 0 0 0 0 0d. Equipment, implements 176 895 1071 159 479 638e. Training 48 208 256 38 165 203f. Consulting Services 411 157 568 242 233 475g. Administration 0 406 406 0 78 78

Subtotal 693 1,855 2,548 556 1,094 1,650

C. LAND REASSESSMENTa. Mapping 325 257 581 203 159 362b. Equipment 5 0 5 0 0 0c. Consulting Services 40 34 74 16 21 37d. Administration 0 38 38 0 20 20

Subtotal 369 329 698 219 201 419

TOTAL 18,349 34,604 52,953 25,338 40,161 65.499

FX: Foreign Exchange; LC = Local Currency; TA = Technical AssistanceSource: Project Files

1,5276,618

0370488

9.304

993

034515223375

907

510

218

80

10.290

1,82712,255

3441,146

48816,061

9166

0406190475

751.321

1160

378

161

17,543

697(410)(355)(142)(442)(651)

(12)560

(46)(4)

68(145)(84)

(119)(2)10(8)

(119)

(854)___ -Dl>

Ca

xr%)

N)C')

0(81)(26)(72)

0(178)

040

0(26)(28)(21)

0(34)

(66)(2)

0(67)

(280)

697(329)(329)

(70)(442)(472)

(12)160

(21)2488

(145)(50)

(53)09

(8)(52)

(574)

Table 3: South Lakbok Project Cost In Current Prices(Excluding Taxes and IDC)

APPRAISAL ACTUAL

OVERRUNFX IC Total FX LC To

A. IRRIGA11ON I DRAINAGEa. Land acquisition

0

1,130

1,130

0b. Civil Works

5,718

6947

12,665

5637c. Equipment

370

329

699

344d. Consulting Services

848

440

1,288

776e. Administration

0

930

930

0Subtotal

6.936

9.776

16,712

6.758

B. AGRI. SUPPORT SERVICEa. Land acquisition

0

21

21

0b. Demonstration units

33

77

110

73c. Land development

0

0

0

0d. Equipment, implements

87

366

453

61e. Training

66

128

194

38f. Consulting Services

262

145

407

242g. Administration

0

220

220

0Subtotal

448

956

1,405

414

C. LAND REASSESSMENTa. Mapping 131 104 234 65b. Equipment 2 0 2 0c. Consulting Services 15 13 28 16d. Administration 0 15 15 0

Subtotal 148 132 280 81

TOTAL 7,532 10864 18.397 7,253

FX = Foreign Exchange; LC = Local Currency; TA = Technical AssistanceSource: Project Files

LC Total

0 486 486

280 (1,162) (882)

(232) (230) (462)

111 281 392

0 (681) (681)

159 (1,307) (1,148)

0 (20) (20)

36 (31) 5

0 (57) (57)

(35) (159) (193)

5 34 39

(12) 94 81

0 (180) (180)(6) (319) (325)

(43) (38) (60)

(3) 0 (3)(7) 1 (7)

0 (6) (6)

(53) (43) (96)

99 (1,668) (1569)u1>

c1g(D(D

xrs.

Table 4: Mamak Project Cost In Current Prices(Excluding Taxes and IDC)

APPRAISAL ACTUALFX LC Total FX LC Total

A. IRRIGA11ON I DRAINAGEa. Land acquisition 0 348 348 0 834 834b. CMI Works 13,643 10,926 24,569 13923 9,764 23687C. Equipment 389 230 619 157 0 157d. Consulting Services 2,048 1,241 3,289 2,159 1,522 3,681e. Administration 0 1,291 1,291 0 610 610

Subtotal 16,080 14,036 30.116 16,239 12,729 28,968

B. AGRI. SUPPORT SERVICEa. Land acquisition 0 20 20 0 0 0b. Demonstration units 59 144 203 95 113 208c. Land development 0 209 209 0 152 152d. Equipment, implements 172 621 793 137 463 600e. Training 33 102 135 38 136 174f. Consulting Services 254 140 394 242 233 475g. Administration 0 260 260 0 80 80

Subtotal 518 1,496 2,014 512 1,178 1,690

C. LAND REASSESSMENTa. Mapping 194 157 351 152 119 271b. Equipment 3 0 3 0 0 0c. Consulting Services 23 21 44 16 21 37d. Administration 0 21 21 0 15 15

Subtotal 221 199 420 168 156 324

TOTAL 16819 15,731 32,550 16,918 14,063 30,981

FX = Foreign Exchange; LC Local Currency; TA = Technical AssistanceSource : Project Files

25

ApDendix 3

ACTUAL FINANCING OF THE PROJECT($'OOO)

Fiscal Year

Bank

Government

Total

1986/87

1987/88

1988/89

1989/90

1990/91

1991/92

1992/93

1993/94

1994/95

Total

3,545

2,431

8,607

14,058

17,700

27,249

20,111

16,042

10,626

120,369

0

1,455

2,300

3,542

4,869

6,790

7,697

5,397

4,494

36,544

3,545

3,886

10,907

17,600

22,569

34,039

27,808

21,439

15,120

156,913

Per cent

77

23

100


26

Appendix 4IMPLEMENTATION SCHEDULE Page 1

Figure 1: Baro Raya Sub project

DG Directorate GeneralAppraisal Actual

(Reference in text: page 6, para. 16

27

Appendix 4Page 2

Figure 2: South Lakbok Subproject

Caiendar Year 1987 1988 1969 1990 I 1991 1992 I 1993 I 1994

Fiscal Year 1987/88 1968/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95

DGWRD Component

1. Preparatory Works _____a. Land Acquisiton

b. Field Oflices _______

c. Equipment Procurement

2. IrrigatIon/Drainagea. Manganti Feeder Canal

.

b. Main & Sec. Canals JjJjJj• -

c. Tertiary Developments

d. Main & Sec. Drains

•

e. Ciseel River Levees

.

1. Roads & Bridges JLt•

S. Consulting Services . ......... ..

DGFCA Component

1. Preparatory Worksa. Land Acquisition

b. Equipment Procurement

2. DemonstratIon Units

S. Operation of Demo Units ....

4. Consulting Services j. . .

DG Tax Component

1. Land Reassessment ..

2. Technical Services ..

DG = Directorate GeneralAppraisal - Actual

28

Appendix 4Page 3

Figure 3: Mamak Subproject

Cat,ndarY..r 1987 1985 I 1050 1990 I 1991 1992 I 1Q93 1994

Flscaj Yew 1987f88 1985j89 198'9O 1094191 1991192 1902193 1993/94 l9905

DGWRD Component

I - Preparatory Wodrsa, Land Acqulsiton

b. Field Offices

C. Equipment Procurement

2. t4n,.k Dama. River Diversion

b. Cofferdam/MaIn Dam! ______Saddle Dams

0. Spillway

d. Site Prep/Hydromechanic/Suilding/Elaclrlcal

3. lrdgatoThaInag.a. Weirs

b. Main & Sec. Canals .. ..

c. Tertiary Developments

d. Drainage :4-

a. Roads .. .

V. Facilities for Fishery 0ev.

4. ConsultIng Services .... ... ________

DGFCA Component

I. Pr.pavatory.Worksa. Land Acquisition

b Equipment Procurement '...

2. Devnonsfratlon Units

3. OperatIon at Demo Units:•.'.••...••,. .:.*.

4. Land Development .•.:.

5. ConsultIng Services

DG Tax Component

1. land Reassessment

2. TechnIcal Services ..:

PG DIrectorate General( Appraisal Actual

Partly complied with, despadherence to procedures fctendering civil works anrecruitment of consultantDirectorate General of WatResources Develop mer(DGWRD) ended uwith some undeperforming contractors anconsultants.

Complied with; howevEin Baro Raya, the detailedesign required extensivmodifications.

Complied with.

•1.

2.

Apiendix 5Page 1

STATUS OF COMPLIANCE WITH LOAN COVENANTS(as of August 1994)

Loan Covenant Status of Compliance

AHocation of Funds, etc

The Borrower shall make available, promptly as needed, the funds, Partly complied with, tfacilities, services, land, and other resources required, in fund for O&M of the Projeaddition to the proceeds of the Loan, for carrying out the Project was not sufficient.and for the operation and maintenance (O&M) of the Project facilities(Article IV, Sec. 4.02).

Provisions of Consultants and Contractors

In carrying out the Project, the Borrower will employ competent andqualified consultants and contractors acceptable to the Borrower andthe Bank, to an extent and upon terms and conditions satisfactory tothe Borrower and the Bank [Article IV, Sec. 4.03. (a)].

The Borrower will ensure that the Project is carried out in accordancewith plans, design standards, specifications, work schedules, andconstruction methods acceptable to the Borrower and the bank. TheBorrower will furnish to the Bank, promptly after their preparation,such plans, design standards, specifications and work schedules, and anymaterial modifications subsequently made therein, in such detail as theshall reasonably request [Article IV, Sec. 4.03 (b)J.

Project Accounts and Audited Financial Statements

The Borrower will maintain records and accounts adequate to identify thegoods and services and other items of expenditure financed out of theproceeds of the loan. [Article IV, Sec. 4.06 (a)].

The Borrower will require DGWRD, Directorate General of Food Cropsand Horticulture (DGFCH), and Land and Building Tax (PBB) to (i) maintainseparate accounts for their parts of the Project; (ii) have such accountsand related financial statements audited annualy, in accordance with soundauditing standards, by auditors acceptable to the Bank; (iii) furnish to theBank, as soon as available but in any event not later than nine monthsafter the end of each related fiscal year, certified copies of such auditedaccounts and financial statements and the report of the auditors relatingthereto, all in the English language; and (iv) furnish to the Bank otherinformation concerning such accounts and financial statements and theaudit thereof as the Bank shall from time to time reasonably request[Article IV, Sec. 4.06 (b)].

(Reference in text: page 10, para. 3

Partly complied wiftaudited reports submitteby DGWRD and DGFCIwith delay. PBB did ncsubmit the audited repoldespite repeated reminders

Partly complied with;quarterly and annualreports were prepared bythe consultants, not by theExecuting Agencies.

Partly complied with; theProject Completion Reportsprepared by DGWRD andDGFCH were notsufficiently comprehensive.

30

Appendix 5Page 2


4.

5.

6.

Project Report and Monitonng

The Borrower will cause each Project Executing Agency to furnishthe Bank quarterly reports on the Project and on O&M of the Projectfacilities [Article IV, Sec. 4.07 (b)].

Project Completion Report

Promptly after physical completion of the Project, but not later than threemonths thereafter, the Borrower will furnish to the Bank a report on theexecution and initial operation of the Project, inculding its cost, theperformance by the Borrower of its obligations under the LoanAgreement and the accomplishment of the purposes of the loan[Article IV, Sec. 4.07 (C)].

Execution of Project and Operation of Project Facilities (Schedule 6)

a. Implementation and Coordination

i. Project Implementation

DGWRD will execute Part A of the Project. Within DGWRD, the Complied with.Directorate of Irrigation-i will implement Project activities relating tothe Baro Raya and Mamak schemes, and the Directorate of Rivers willexecute Project activities relating to the South Lakbok scheme.

Complied with.DGFCH, under the Ministry of Agriculture, will implement Part B ofthe Project, and PBB will implement Part C.

DGWRD will in consultation with the Bank, appoint three full-timeManagers: one each for the Baro Raya scheme, South Lakbokscheme,and Mamak scheme, by 31 January 1987. Each ProjectManager will be directly responsible for day-to-day implementationactivities. DGWRD will strengthen the existing Project offices for theBaro Raya scheme in Sigh, for the South Lakbok scheme in Banjar,and for the Mamak scheme in Mataram, and establish field officesfor each schemes for the purpose of Project implementation.

Complied with.

DGFCH will, by 30 September 1987, appoint three full-time Field Complied with.Managers, one to be based at each Project Office, and willstrengthen the existing provincial and district level offices in theProject area.

PBB will have its Regional Inspection Offices carry out the field Complied with.work for implementing Part C of the Project.

31

Appendix 5Page 3

Loan Covenant Status of Camp han

ii. Project Coordination

(a) At the National LevelDGWRD will coordinate all Project-related activities at the nationallevel with the other agencies involved in the implementation to theProject.

(b) At the Provincial LevelThe Borrower will establish two Provincial Level CoordinationCommittees by 31 March 1987, one in Aceh for the BaroRaya scheme, and one in West Nusa Tenggara for the Maniakscheme. For the South Lakbok scheme, the existingCitanduy River Basin Coordination Committee will remainfunctional. Each Committee will be chaired by the Chief ofProvincial Planning Agency of the relevant Province,and will include as members the respective Project Managersand the heads of concerned provincial agencies. The Committees shallbe responsible for coordinating all Project-related matters at theProvincial level.

(C) At the District LevelAt the district level, the existing District Irrigation Committee,chaired by the District Chief (Bupati) will have overallresponsibility for coordination of Project activities in his district,and will undertake day-to-day coordination of Project-relatedmatters including organizing beneficiary farmers into water users'associations ('NUAs), and for land acquisition and compensationmatters.

b. Operation and Maintenance

i. Main Irrigation and Drainage Systems

During the construction stage, the DGWRD Project offices in theProject area will be responsible for O&M of the main irrigathnsystems, flood control works, and transport facilities relevant to theProject. Upon physical completion of the Project and for an initialperiod of not less than two years thereafter, the DGWRD ProjectOffices will continue to be responsible for the O&M thereof. Prior toand during this period, the O&M capabilities of the Provinical PublicWorks Departments (DPUPs) will be strengthened. Thereafter, theO&M of these facilities will be under full responsibility of the DPUPsconcerned.

Partly complied wicoordination was doneBappenas,only dunBank's review of the Proj

Partly complied wicoordination meetinwere held by Bappeda aduring the Bank's revieof the Project.

Partly complied wicoordination was doneBupati on an ad-hoc ba$

Partly complied with; 1O&M funds allocatedthe Project wassufficient.

Partly complied with; onlylimited guidance has beenprovided to the farmers.

Partly complied with; limitedfunds have been provided formaintenance after Projectcompletion.

Being complied with; inSouth Lakbok, landreassessment will be doneonly in 1995; in Baro Raya,due to delay in Projectcompletion, reassessmentis not yet scheduled for.The Government is nowintroducing the collectionof irrigation service fees(1SF) in several pilotlocations with Bank'sassistance under otherongoing Loans.Nation -wide applicationawaits the evaluation ofthe pilot Projects.

32

Appendix 5Page 4


ii. On-Farm Facilities and Associated Infrastructure

The tertiary system and associated farm-level facilities, includingfarm ditches and farm drains, will be operated and maintainedby beneficiary farmers, who will be organized for this purpose intoWUAs. DGWRD, together with DGFCH, will provide continuingwater management extension and guidance to farmers. In thisconnection, the concerned DPUPs will also work closely with theWUAs concerned.

Demonstration units, including offices and appurtenant facilities tobe constructed by DGFCH under the Project will bemaintained by DGFCH.

iii. Irrigation Cost Recovery and Funding.

Pursuant to the Borrower's obligations under Section 4.02 of theLoan Agreement, the Borrower will assure adequate funding isavailable for the smooth and efficient O&M of the Project facilities. TheBorrower will

(I) by 30 June 1991, complete reassessment of land values in theareas benefited by irrigation systems constructed under theProject, by using the results of the survey and mapping to becarried out under Part C of the Project;

(ii) based on such reassessed land values, establish, maintain andcollect charges on agricultural land (or on the users of suchland) serviced by the irrigation and drainage networks to beconstructed under the Project at levels required to cover fullO&M costs of the Project facilities, beginning twoyears after completion of the tertiary networks for such land;

(iii)allocate and release an appropriate portion of the chargesto ensure the proper O&M of the Project facilities; and

(iv) in the event and to the extent that the funds available from thecollection of charges are insufficient to cover the expendituresrequired for O&M of the Project facilities, provide suchexpenditure promptly as needed.

c. Other Matters

i. Land Acquisition

The Borrower will acquire, prior to the scheduled commencement ofthe civil works under the Project, all lands and rights in land neededfor the implementation of the Project or operation of its facilities.

Complied with; howeverland acquisition at severallocations in Baro Raya wasdelayed.

(I)

(ii)

(iii)

(iv)

(v)

(vi)

33

Appendix 5Page 5


ii. Tertiary Development

For tertiary development under the Project, DGWRD will (i) provide Complied with.engineering services, (ii) construct tertiary canals, and (iii) ensurecompletion of the remaining works below the level of the tertiarycanals through the beneficiary farmers.

iii. Water Users' Association

Complied with; howeveformation of WUAs tooplace during thconstruction stage.

The Borrower will establish WUAs to construct tertiary systemsconstruction, improved water management, and sustained O&Mthereof. The WUAs will be centered on individual or groups oftertiary canals to be constructed, and in view of the need forfarmers' involvement during tertiary development, WUAs will beformed before construction In this regard, DGWRD in cooperationwith DGFCH and local authorities concerned will:

identify probable WUA members based on provisional fieldlayout of tertiary facilities;explain to the concerned farmers the objectives of the Projectand need for the formation of WUAs;Convene meetings for the election o group leaders and theexecutive body of each WUA;finalize layout of tertiary and on-farrr irrigation and drainagefacilities;provide technical guidance and training to WUAs on on-farmsystems O&M, and farm level water management, amongothers; andmonitor WUA activities annually.

By 31 March of each year during the Project implementation period, Complied with; however ththe Borrower will furnish to the Bank for review: (i) detailed information was providearrangements for WUAs formation to be implemented in the to the Bank only during tbfollowing fiscal year, and (ii) actual progress accomplished during Bank's review of ttithe previous fiscal year with respect to the formation of WUAs. Project.

To facilitate formation of WUAs and the carrying out of the activities, Complied with.DGWRD will directly engage and assign to Baro Raya, SouthLakbok, and Marnak, an adequate number of WUA organizers.Consultants will be engaged to assist WUA organizers in carryingout their functions.

iv. Demonstration Units

Complied with; howevestablishment of one DUin Baro Raya was delayeuntil 1991.

DGFCH will establish five demonstration units (OUTs) under Part Bof the Project, two each in Baro Raya and Maniak, and one inSouth Lakbok. DUTs will be mainly for the purpose of:(i) demonstrating irrigated farming practices;(ii) serving as a field training ground for Project staff, local officials

and farmers; and,

34

Appendix 5Page 6


(iii) production of quality seeds of rice and secondary crops.The specific location of each OUT will be determined by DGFCA bythe end of 1987 and all DUTs will be established by the end of1988.

v. Land Development

The land development activities under Part B of the Project willbe undertaken by the farmers. DGFCH will provide technicalservices (investigation and survey) as necessary. Arrangements forcredit to be made available to farmers for carrying out landdevelopment work will be finalized by DGFCH with the Bank ofIndonesia and Bank Rakyat Indonesia by the end of 1990, so thatland development activities can be completed in accordance withthe implementation schedule. The Bank will be kept informed ofarrangements made for the provision of such credit.

vi. Agricultural Extension Services

DGFCH will take appropriate steps on a timely basis to strengthenthe agricultural extension staff and facilities in the Project area.DGFCH will, in particular:(i) field additional extension workers,(ii) provide an additional Rural Extension Center and field 2

extension supervisors in South Lakbok, and(iii) upgrade the existing Rural Extension Centers in the Project

area up to national standards.

vii. Training

DGFCH will prepare a program for local and overseas training ofselected Project staff under Part B of the Project, with the assistanceof consultants to be engaged under the Project. Overseas training,will be carried out in institutions in the Bank's member countries.The program, which will include the criteria for the selection ofcandidates, the courses to be followed, and the institutes at whichthe training is to be undertaken will be submitted to the Bank for itsconcurrence by 30 June 1987.

viii. Resttlement

No longer applicable;Government policy on landdevelopment changed fromcredit scheme to directfinancing by theGovernment.

Complied with.

Complied with.

The Borrower will, by 31 December 1987, through concerned Complied with.agencies and local authorities, finalize (I) the levels ofcompensation for loss of land and property for about 56 farmhouseholds that will be displaced and directly affected by theMamak scheme, and (ii) the necessary steps for relocating thesefarm households.

35

Appendix 5Page 7


ix. Watershed Management

The Borrower will take appropriate steps for introducing proper Complied with.watershed management of the catchment area for the Mamakscheme and submit a detailed program for watershed managementto the Bank by 31 December 1987.

x. Project Benefit Monitoring and Evaluation (PBME)

Partly complied witbenchmark surveys arbenefit monitoring revievupon completion of ttProject were undertakenconsultants hirespecifically for thpurpose.

Each of the Project Offices for the Baro Raya scheme, SouthLakbok scheme and Mamak scheme, through their ProjectMonitoring Evaluation Units will, in accordance with arrangementsagreed upon with the Bank (I) complete benchmark surveys for theirschemes within six months after the effective date; and (ii)conduct seasonal Project benefit monitoring reviews for five yearsbeginning with the initial delivery of irrigation services to theProject area. Subsequent to the closing date for withdrawals fromthe loan account, provincial irrigation and agricultrual serviceswill conduct benefit monitoring reviews until the Project reaches fulldevelopment, which is expected to be by the end of 1995.

xi. Allocation of the Borrower's Resources

The Borrower will make available on a timely basis, all resources Complied with.(including staff) necessary to implement the Project as scheduled.In particular, all local currency funds required for the Project willbe budgeted and released to the Project on a timely basis.

xii. Farm Input Subsidies

The Borrower and the Bank will jointly review periodically the effects Complied with.of farm input subsidies and price movements of farm inputs, interaiia, on crop outputs, to ensure further reduction in subsidieswithout impairing the growth of the crop subsector.

xiii. Complementary Programs

The Borrower will take steps necessary to ensure that Complied with.activities under its ongoing programs and projects, which have adirect relevance to the Project, are implemented on a timely basisand in coordination with related Project activities.

3,545,107

0

0

0

0

0

0

0

0

0

0

3,545,107

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

3,545,107

2,111,178

304455

0

0

0

0

0

0

0

0

0

973,897

833,824

0

0

0

324050

0

0

0

0

0

0

0

0

0

2,431.238

1,307,101

29,697.7172

333,630

574685

4.050.269

700.042

04.404

96.413

11.885

0

x

0)

ANNUAL DISBURSEMENT OF LOAN PROCEEDS BY CATEGORY

GRIGNAL REVISED r ieoi FY l9678 FY 19eeo FY 1989190 FY 1990191 FY 1901192 A' 193 FY 1903194 FY 1904195 TOTAL

82103832

42.411.646

283,083

501.106

357,355

0

4,648,986

724,872

47,991

I 13,725

419,142

4,915.591

3.000.000

FOREIGN EXCHANGE 77,100,030 82,436,507

O1A CML V43RKS (A) 28,580,000 40,064.691

O1B CMLRKS(B) 124,000 29G568

02A EGUUhENT& MATERIAL (A) 1,041,003 689.482

0 EOU1ENT& MATERIAL (B) 393,000 423,018

02C EQ4WIENT& MATERIAL (C) 10,030 0

03A CONSULTING SERVICES (A) 3,804,003 4,600,388

038 CONSULTING SERVICES (B) 804,000 764,000

CD 03C CONSULTING SERVICES (C) 87,030 59,500

04A TRAJNING(B) 12G000 113,725

5 048 MAPPING & lAND REASSESS. 553,000 423,319-..CD 06 REFINANCING OF TA LOANS 5,703,003 5,703,003

07 REFIN. OF INT. ON TA LOANS 3,003,000 3,003,003-a

08 CC 25700,030 25700,030

CD 09 UNALLOCATED 7,219,003 589,000-L

9 LOCAL CUF*€NCY 43,500.030 36,383M3

05A PREP. V43RKS & TEAT. CANAL 4,584,003 1,569,144

(B 058 CIVIL WORKS - OTI*RS (A) 32,503,030 28,824,079

OSC CML RKS (B) 361,000 344988

050 SUFFLES & MATERIALS (B) 1,072,003 1,037006

05E CONSULTING SERVICES (A) 3,303,003 4,615,294

05F CONSULTING SERVICES (B) 657,000 717,891

05G CONSULTING SERVICES (C) 67,030 54,403

OSH BENCHMARK SURVEYS 8NS) 80,030 80.030

051 TECH. SERV. FOR LAND 0EV. 20,030 20,030

OSJ TRAINING (B) 43&000 499,808

05K MAPPING & LAND REASSESS. 513,000 331,822

TOTAL 124700.000 124700,000

5,256,144 8,527.183 11,838,819 16,727,069

2,131 .S56 5.403.241 7,645,390 11.319,386

0 42,138 133,453 8.722

0 26,697 65,431 341,178

0 0 32700 123,525

0 0 0 0

1,227,286 894140 773,086 803,861

0 283,286 131,234 201,985

24,191 23.730 0 0

0 113,725 0 0

171,581 174856 60,782 15,693

303,157 0 90,430 0

1,398.371 767,805 0 0

0 1,001,365 2,738,821 3,913,379

0 0 0 0

3,351.183 5.550,169 6,011,487 10,820,880

113,682 17,833 53,347 793,020

2,167,415 4.587,956 4,867,456 8,402,297

0 49,487 153,488 7,891

107,138 0 38,072 323,334

769,650 481,603 649,077 693,465

0 193,511 153,429 94,981

42,247 22,157 0 0

16,218 18,194 0 0

0 0 0 11,885

0 22705 43,698 169,496

134,813 134,244 47,758 12,511

8,607,307 14,067.345 17700706 27.248.819

14,242,848

7,047,850

37,914

45,610

01,482

0

670.715

44,066

0

0

0

0

0

5.736,221

0

5,867,850

324,425

4,487,906

44,507

107.940

759,068

137,936

0

0

0

5.747

0

20,110,376

12,823.387 7,641,369

4,831.888 3,169,1(2

20,073 46,783

0 0

0 137,146

0 0

373,244 103,652

0 62,311

0 0

0 0

0 0

0 0

0 0

7,293.284 4,067.369

0 0

3.516.869 3,056,031

0 0

2,638,153 2,535,469

23,565 5.4,918

103,330 194071

497,107 181,259

09,111 45,092

0 0

62,031 0

0 0

137,535 75,385

0 0

16.043,129 10,098,380

37

ADpendix 7

ECONOMIC ANALYSIS Page 1

A. Achievement of Benefits

1. The infrastructure provided by the Project is expected to help increase theagricultural production significantly in the three subproject areas. At the time of the ProjectCompletion Review (PCR), the Mission estimated that the cropping intensities had increasedconsiderably from 114 per cent before the Project to 152 per cent in Baro Raya, from 124 percent to 207 per cent in South Lakbok, and from 118 per cent to 206 per cent in Mamak. Thisrepresents an increase in cropping intensity from 116 to 171 per cent for the entire Project. Atfull development the cropping intensity is expected to be 200, 218, and 234 per cent for BaroRaya, South Lakbok, and Mamak subprojects, respectively. The overall cropping intensity willbe about 209 per cent, compared with the 203 per cent envisaged at appraisal. The croppedareas of major crops are presented in Table 1.

2. With respect to crop yields, significant discrepancy exists between the yieldsestimated at appraisal and those estimated at PCR time, particularly for the Baro Rayasubproject. The data in the feasibility study and those provided to the Mission indicated thatpaddy yields in the Baro Raya subproject area were high at appraisal, because irrigatedcultivation was being practiced intensively. The yields of major crops in the three subprojectareas as estimated by the Mission are presented in Table 2.

B. Economic Analysis

3. The economic analysis was carried out for each of the three subprojects and theentire Project. The major assumptions underlying the analysis include the following:

1. Project Costs

4. The economic costs consisted of the actual cost of civil works, land development,equipment, materials and supplies, consulting services, and administration. The costs ofmapping and land assessment, refinancing the technical assistance for Baro Raya and Mamak,and the mini-hydropower in Mamak were excluded from the cost stream. The cost of Operationand Maintenance was included at about Rp 35,000 per hectare. All costs are expressed inconstant 1994 dollar terms. The current values of foreign exchange cost were converted todollars at the prevailing exchange rates at the time when expenditures occurred; the conversionto the 1994 constant values was carried out by using the G5-MUV Index'. The current valuesof local costs were converted to the 1994 constant valued using the annual consumer priceindex for Indonesia. The current exchange rate used was Rp 2,150 per dollar. Financialcosts were converted to economic costs using the group conversion factor of 0.9. Taxes andland acquisition cost representing transfer payments were excluded.

World Bank Commodity Prices and Price Projections, August 1994.


38

Arendix 7Page 2

2. Commodity Prices

5. The economic prices of major agricultural inputs and outputs were derived fromthe World Bank's Commodity Prices and Price Projections (August 1994); prices from 1987 to1993 were derived from actual international prices, those from 1994 to 2005 and subsequentyears were derived from projected prices with interpolation when data were not available. Laborcost was estimated at about Ap 2,500 per day with a shadow wage rate of 0.7. The derivationof economic prices is given in Tables 3 to 9. During the past few years, Indonesia did not importlarge quantities of rice; in fact, in 1993/94 no rice was imported. In the future, Indonesia maybecome a net rice exporter. For this reason, the average price between import and exportparities was used.

3. Project Benefits

6 Only direct, quantifiable benefits attributable to the development of irrigationfacilities were considered. The direct benefits were derived from the increment between theproduction under "future with" and "future without" Project situations. Farm budgets of typicalfarms in each subproject area at full development were also developed and compared with thoseestablished at appraisal; these are presented in Appendix 8.

4. Economic Internal Rates of Return (EIRR)

7. The EIRRs for each of the three subprojects and for the overall Project arepresented in Table 10. The EIRR for the whole Project is estimated at about 9.4 per centcompared to the appraisal estimate of 15.6 per cent. The EIRRs are estimated at 9.2 per centfor Baro Raya, 13.3 per cent for South Lakbok, and 6.5 per cent for Mamak. The decline in theEIRRs was attributed to the delayed implementation by about two years, except for the SouthLakbok subproject. In addition, there was a heavy cost overrun of about 24 per cent over theoriginal cost estimate of the Baro Raya subproject. Besides, based on the status of developmentand the current O&M organization, six years will be needed for the Baro Raya and South Lakboksubprojects to reach full development, and seven years for the Mamak subproject. Anotherfactor accounting for the low EIRR in the Mamak subproject was its high cost of investment; incurrent terms the investment cost in Mamak was estimated at $5,725/ha while it was $3,426/hafor Baro Raya and $3,536/ha for South Lakbok; the average cost for the Second IrrigationPackage (Loan No. 627-INO) was $3,537/ha also in current terms.

5,200230

1,260

1,970

3,47012.130

5,180

1,290

2,330

27,220860

10,2400

10,1602,1007,870

28,430740

11,6400

11,3001,9107,150

61,170209

39

Appendix 7

Table 1: Cropped Areas of Major Crops Page 3

Present Future without Project Future with Project

AR PCR AR PCR AR PCR

BARO RAYA (ha)Paddy WS-Ir 19,000 19,120 19,000 19,120 18,000Paddy WS-rfPaddy DS1 800 7,650 800 800 5,400PaddyDS2 960Soybean 980 570 980 980 7,200Groundnuts 620 190 620 620 1,800Mungbean 250 570 250 250 600

Total 21,650 29,060 21,650 21,770

CJ.(%) 114 152 114 114

SOUTH LAKBOK (ha)

19,120

5,740

7,6501,910

Paddy WS-lr 350 4,130 350 350 4,020 4,130Paddy WS-rI 2,980 740 2,980 2,980 630 740Paddy DS1 2,250 4,910 2,250 2,250 3,580 4,610Paddy DS2 300Soybean 340 100 340 340 990 1,320Groundnuts 70 70 70 300Mungbean 90 90 90 800Total 6,080 10,180 6,080 6,080 10,320 10,800

C.I.(%) 124 205 124 124 208 218

MAMAK (ha)Paddy WS-lr 1,000 4,870 1,000 1,000Paddy WS-rf 3,305 310 3,305 3,075Paddy DS1 50 2,070 50 50Paddy DS2 520Soybean 1,810GroundnutsMungbean 1,955 1,090 1,955 1,955Total 6,310 10,670 6,310 6,080

C.l.(%) 118 206 118 117

TOTAL (ha)Paddy WS-lr 20,350 28,120 20,350 20,470Paddy WS-rt 6,285 1,140 6,285 6,055Paddy DS1 3,100 14,630 3,100 3,100Paddy DS2 0 1,780 0 0Soybean 1,320 2,480 1,320 1,320Groundnuts 690 190 690 690Mungbean 2,295 1,660 2,295 2,295 _____Total 34,040 50,000 34,040 33,930 _____

C.l.(%) 116 171 116 116

WS-Ir. = Wet Season, Irrigated; WS-rf = Wet Season, Rainfed;DS1 = First Dry Season (ApnI to July); DS2 = Second Dry Season (July to October)C.l. = Cropping Intensity.

Note: Service area of Baro Raya = 19,120 ha; South Lakbok = 4,960 ha;and Mamak = 5,180 ha.

Sources : Project office and Mission estimates.

Appendix 7Page 4

Table 2: Crop Yields(t/ha)

Preeent Future without Project Future with ProjectSubproject

_______________ AR PCR AR PCR AR PCR

Baro RayaPaddy WS 3.4 4.7 3.50 5.0 5.0 6.2Paddy Os 3.4 4.8 3.50 5.2 5.0 6.3Soybean 0.6 0.9 0.64 0.9 1.5 1.5Groundnuts 0.7 0.8 0.75 0.8 1.5 1.5Mungbean 0.5 0.6 0.55 0.6 1.0 1.0

South LakbokPaddy WS - ir 2.9 4.0 3.00 3.5 5.0 6.2

- rf 2.9 3.0 3.00 3.2 3.5 4.0Paddy DS 2.0 4.1 2.20 3.6 5.0 6.3Soybean 0,6 0.7 0.70 0.9 1.6 1,5Groundnuts 0,6 0.7 0.70 0.8 1.5 1.5Mungbean 0.5 0.6 0.55 0.6 0.9 1.0C.'.

MamakPaddy WS - ir 2.4 3.5 2.50 3.0 4.8 5.6

- rf 1.5 2.5 1.60 2.5 --- 3.5Paddy OS 2.4 3.6 2.50 3.1 5.0 5.7Soybean - --- --- --- 1.5 1.4Mungbean 0.3 0.6 0.33 --- 1.0 0.9TotalC. I.

Note: WS = Wet Season; DS = Dry Season; ir. = irrigated; rf = rainfed.AR = Appraisal Report; PCR = Project Completion Report.

The table shows that, in Baro Raya paddy would increase from 5.0 t/ha under without projectsituation to 6.2 t/ha under with Project situation, while the Appraisal Mission's estimates werefrom 3.5 t/hà.to 5 t/ha, i.e. an increase of 1.5 t/as compared to the increase of 1.2 tlha estimatedby Mission. In South Lakbok and Mamak, where irrigated cultivation had not been practicedearlier, the increase in crop yields was expected to be greater than in Baro Raya; paddy yieldwas expected to increase from 3.5 t/ha to 6.2 t/ha in South Lakbok and from 3.0 t/ha to 5.6 t/hain Mamak during wet season.

Table 3: Economic Price Of Paddy For Baro Raya(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 20002005-2017

1. Import ParityThai rice, 5% broken, FOB Bangkok ($Imt)Quality adjustment (less 10%)Freight and Insurance to MedanCIF Price Medan

Equivalent CIF Price Medan (Rp,kg)Port handling , storage (5%)Transport cost to MedanTransport cost from Project area to MedanWholesale price In Project areaPaddy price equivalent (65%)Milling, local Vansport and marketing costEconomic farmgate price

2. Export pantyThai rice, 5% broken, FOB Bangkok ($/mt)Price dcount for Indonesian rice (less 20%)FOB price

Equivalent FOB price (Rp/Kg)Port handling. storage losses (5%)Transport from port to wholesalerTransport from mill to wholesalerPrice of rice ex-m411Paddy price equivalent (65% recovery rate)Milling, local ansport and marketing costEconomic farmgate price

3. Average Import/ExportEconomic larmgate price of paddy (Rp/kg)

326

285

270

380

338

301

286

283

33

29

27

38

34

30

29

28

40

40

40

40

40

40

40

40

333

297

283

382

344

311

298

295

716

638

608

821

741

669

640

633

36

32

30

41

37

33

32

32

2

2

2

2

2

2

2

2

50

50

50

50

50

50

50

50

704

622

591

814

730

654

624

617

458

404

384

529

474

425

405

401

30

30

30

30

30

30

30

30 -

428

374

354

499

444

395

375

371

326

285

270

380

338

301

286

283

65

57

54

76

68

60

57

57

261

228

216

304

271

241

229

226

560

491

464

654

582

518

492

487

28

25

23

33

29

26

25

24

2

2

2

2

2

2

2

2

50

50

50

50

50

50

50

50

480

414

389

569

501

440

416

410

312

269

253

370

325

286

270

267

30

30

30

30

30

30

30

30

282

239

223

340

295

256

240

237

(1g355

307

288

420

370

326

308

304 •0.x

1%)

3263340

333

716362

5070445830

428

2832840

295

63332

250

61740130

371

2862940

298

64032

250

624405

30375

3013040

311

669332

5065442530

395

3383440

344

74137

250

730474

30444

3803840

382

82141

250

81452930

499

2702740

283

608302

50591384

30354

2852940

297

63832

250

622404

30374

326

285

270

380

338

301

286

283

65

57

54

76

68

60

57

57

261

228

216

304

271

241

229

226

560

491

464

654

582

518

492

48728

25

23

33

29

26

25

242

2

2

2

2

2

2

2

50

50

50

50

50

50

50

50

480

414

389

569

501

440

416

410

312

269

253

370

325

286

270

267

30

30

30

30

30

30

30

30

282

239

223

340

295

256

240

237

-UI>

355

307

288

420

370

326

308

304(Dø

a-x-.4

Table 4: Economic Price Of Paddy For South Lakbok(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 20002005-2016

1. Import ParityThai rice, 5% broken, FOB Bangkok (mt)Quality adjustment (less 10%)Freight and Insurance to JakartaCIF Price Jakarta

Equivalent CIF Price Jakarta (Rp,4cg)Port handling , storage (5%)Transport cost to JakartaTransport cost from Project area to JakartaWholesale price in Project areaPaddy price equivalent (65%)Milling, local Uansport and marketing costEconomic farmgate price

2. Export pantyThai rice, 5% broken, FOB Bangkok ($/mt)Price discount for Indonesian rice (less 20%)FOB price

Equivalent FOB price (Rp/Kg)Port handling, storage losses (5%)Transport from port to wholesalerTransport from mill to wholesalerPrice of rice ex-millPaddy price equivalent (65% recovery rate)Milling, local banspofl and marketing costEconomic farmgate price

3. Average Import/ExportEconomic farmgate price of paddy (Rpflg)

3263343

336

723362

6070145530

425

3013043

314

67534

260

65142330

393

3803843

385

82841

260

81152730

497

2702743

286

615312

6058838230

352

2852943

300

645322

60619402

30372

3383443

347

747372

60726472

30442

2832843

298

640322

6061439930

369

2862943

301

646322

6062040330

373

326

285

270

380

338

301

286

283

65

57

54

76

68

60

57

57

261

228

216

304

271

241

229

226

560

491

464

654

582

518

492

487

28

25

23

33

29

26

25

24

2

2

2

2

2

2

2

2

60

60

60

60

60

60

60

60

470

404

379

559

491

430

406

400

306

263

246

363

319

280

264

260

30

30

30

30

30

30

30

30

276

233

216

333

289

250

234

230

-UI>

351

284

415

366

321

303

300 CDmm

x—1

Table 5: Economic Price Of Paddy For Mamak(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 20002005-2017

1. Import ParityThai rice, 5% broken, FOB Bangkok ($/mt)Quality adjustment (loss 10%)Freight and Insurance to SurabayaCIF Price Surabaya

Equivalent CIF Price Surab'a (Rp/kg)Port handling storage (5%)Transport cost to SurabayaTransport cost from Project area to SurabayaWholesale price in Project areaPaddy price equivalent (65%)Milling, local transport and marketing costEconomic farmgate price

2. Export pailtyThai rice, 5% broken, FOB Bangkok ($Imt)Price dcount foi Indonesian rice (less 20%)FOB price

Equivalent FOB price (Rp/Kg)Port handling, storage losses (5%)Transport from port to wholesalerTransport from mill to wholesalerPrice of rice ex—mdlPaddy price equivalent (65% recovery rate)Milling, local transport and marketing costEconomic farmgate price

3. Average Import/ExportEconomic farmgate price of paddy (Rpjkg)

Table 6: Economic Prices Of Soybeans And Ground nuts(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 20002005-2017

Soybean - Import ParityCiFRotterdam 249

235

255

263

246

237

246

262Shipping and Insurance Preference Sumatra 10

10

10

10

10

10

10

10CIF Price Sumatra 239

225

245

253

236

227

236

252

Equivalent CIF Price Sumatra (Rpikg)

514

483

527

544

508

488

507

542Port handlmg storage (5%)

26

24

26

27

25

24

25

27Transport to wholesaler 2

2

2

2

2

2

2

2Transport from farm to wholesaler 50

50

50

50

50

50

50

50Economic farmgate price 491

459

505

523

485

465

484

521

ounnuts - Import ParityCIF Rotterdam 927

607

739

990

833

669

622

474Cost preference for Asia 10

10

10

10

10

10

10

10CIF Indonesia Port

917

597

729

980

823

659

612

464Shelled nu @ 63%

578

376

459

617

519

415

386

293Equivalent CIF Price (Rpikg)

1242

808

987

1327

1115

893

829

629Port handling storage (5%)

62

40

49

66

56

45

41

31Transport to wholesaler 2

2

2

2

2

2

2

2Transport from farm to wholesaler 50

50

50

50

50

50

50

50Economic farmgate price 1257

800

989

1346

1123

890

823

613

1l>

x-.4

Table 7: Economic Prices Of Fertilizers For Barn Raya(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 2000 2005-2017

1. UreaFOB Europe ($t)Price Differential: Asia (less 10%)FOB ex-factory Palembang

Equivalent FOB ex-factory Palembang (Rp/kg)Transport to wholesalerWholesale price in Project areaStorage and wholesalers' chargesTransport to farmEconomic farmgate price of urea

2. Triple SuperphosphateFOB, US Gulf ($frnt)Freight and InsuranceCIF Indonesia

CIF Indonesia equivalent (A p/kg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to farmEconomic farmgate price of TSP

3. Potasskgri ChlorideFOB Vancover ($/mt)Freight and insuranceCIF Indonesia

CIF Indonesia equivalent (Rplkg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to farm

178

139

107

134

137

142

153

149

18

14

11

13

14

14

15

15

161

125

96

121

124

128

137

134

345

269

207

259

266

276

295

288

5

5

5

5

5

5

5

5

350

274

212

264

271

281

300

293

15

15

15

15

15

15

15

15

50

50

50

50

50

50

50

50

415

339

277

329

336

346

365

358

138

120

112

132

132

133

140

136

45

45

45

45

45

45

45

45

183

165

157

177

177

178

185

181

393

355

338

381

381

383

399

390

15

15

15

15

15

15

15

15

408

370

353

396

396

398

414

405

50

50

50

50

50

50

50

50

458

420

403

446

446

448

464

455

113

111

107

105

106

107

114

109

45

45

45

45

45

45

45

45

158

156

152

150

151

152

159

154-UI>

340

336

327

323

324

327

341

331

15

15

15

15

15

15

15

15 CD CD

355

351

342

338

339

342

356

346

50

50

50

50

50

50

50

50 5•

Economic farmgate price of KCI-.4

405

401

392

388

389

392

406

396

14915

134

2885

2931550

358

13645

181

39015

40550

455

10945

154

33115

34650 caft,

00

178

139

107

134

137

142

153

18

14

11

13

14

14

15

161

125

96

121

124

128

137

345

269

207

259

266

276

295

5

5

5

5

5

5

5

350

274

212

264

271

281

300

15

15

15

15

15

15

15

50

50

50

50

50

50

50

415

339

277

329

336

346

365

138

120

112

132

132

133

14045

45

45

45

45

45

45183

165

157

177

177

178

185

393

355

338

381

381

383

39915

15

15

15

15

15

15408

370

353

396

396

398

41450

50

50

50

50

50

50458

420

403

446

446

448

464

113

111

107

105

106

107

11445

45

45

45

45

45

45158

156

152

150

151

152

159

340

336

327

323

324

327

34115

15

15

15

15

15

15355

351

342

338

339

342

35650

50

50

50

50

50

50

Table 8: Economic Pnces Of Fertilizers For South Lakbok(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 20002005-2017

1. UreaFOB Europe ($frnt)Price Differential: Asia (less 10%)FOB ox-factory Palembang

Equivalent FOB ox-factory Palembang (Rp,kg)Transport to wholesalerWholesale price In Project areaStorage and wholesalers' chargesTransport to farmEconomic farmgate price of urea

2.TrIple SuperphosphateFOB, US Gulf ($/mt)Freight and InsuranceCIF Indonesia

CIF Indonesia equivalent (Rplkg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to farmEconomic farmgate price of TSP

3. Potassium ChlorideFOB Vancover ($/mt)FreIght and insuranceCIF Indonesia

CIF Indonesia equivalent (Rplkg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to farm

405

401

392

388

389

392

406Economic farmgate price of KCI 3960

Table 9: Economic PrIces Of Fertilizers For Mamak(in 1994 constant prices)

1991 1992 1993 1994 1995 1996 2000 2005-2017

1 UreaFOB Europe ($/mt)Price Differential: Asia (less 10%)FOB ex-factory Palembang

Equivalent FOB ex-factory Palembang (Hp/kg)Transport to wholesalerWholesale price in Prolect areaStorage and wholesalers' chargesTransport to farmEconomic farmgate price of urea

2.Triple SuperphosphateFOB, US Gulf ($/mt)Freight and InsuranceCIF Indonesia

CIF Indonesia equivalent (Rp/kg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to famaEconomic tarmgate price of TSP

3. PotassIum ChlorideFOB Vancover ($/mt)Freight and InsuranceCIF Indonesia

CIF Indonesia equivalent (Hp/kg)Port handling and transport to wholesalerWholesale priceHandling and transport cost to farm

Economic farmgate price of KCI

178

139

107

134

137

142

153

149

18

14

11

13

14

14

15

15

161

125

96

121

124

128

137

134

345

269

207

259

266

276

295

288

5

5

5

5

5

5

5

5

350

274

212

264

271

281

300

293

15

15

15

15

15

15

15

15

60

60

60

60

60

60

60

60

425

349

287

339

346

356

375

368

138

120

112

132

132

133

140

136 -4

45

45

45

45

45

45

45

45

183

165

157

177

177

178

185

181

393

355

338

381

381

383

399

390

15

15

15

15

15

15

15

15

408

370

353

396

396

398

414

405

60

60

60

60

60

60

60

60

468

430

413

456

456

458

474

465

113

111

107

105

106

107

114

109

45

45

45

45

45

45

45

45

158

156

152

150

151

152

159

154

340

336

327

323

324

327

341

331

15

15

15

15

15

15

15

15

355

351

342

338

339

342

356

346

60

60

60

60

60

60

60

60fr,(DD

415

411

402

398

399

402

416

406x-4

-1485-9300

-18674-18934-29997-19586-11298-3908

881312234182891828617956178781763917801175641752717489175301756917569175501755017550175691758017550175501755917550

-55-2727-6904-0553

-11462-2199-1183

193873

1324227844584398433943314322431343044295429542954295429542054295429542954295429542954295

68185844928

13922350453444744415440743984389438043714.37143714371437143714371437143714371437143714371

2581035222463029132

12825100991888418384181051808818028179911795417917179861798617986179801798617986179861708617986179801798617986

-125-1056-4202-5324

-16203-16819-10884-6618

42475848909489548827889988778857863088228606865186518651865186518651885186518651865186518651

142884

196252268280280280280280280280280280280280280280280280280280280280280

4381092304844436100936092349107897989578937891989028886893189318931893189318931893189318931803189318931

258529947

270037635134498948064803471147034893468346724660468446844684468446844684468446844884468446844684

-1284-5517-5567-4057-2333-520

75025173693506249184825473246404631462248114601458948134613461348134.6134613461348134613481348134613

55272769049553

114622263 41341 8428 23

5368727676767676767676767676767676767676767676

14659300

166741893430252 420548 2513465 5710140 160

318392410427427427427427427427427427427427427427427427427427427427427

12845517556740572587 41042 7

178 21130 54

6971717171717171717171717171717171717171717171

1087 1251088 10561089 42021990 53241991 162081992 172431993 119481994 958219951096109710981999200020012002200320042005200620072008200920102011201220132014201520162017

Table 10: Economic Project Cost, Incremental Benefits AndEconomic Internal Rates Of Return

($'OOO)

Bo Raya Soih Lakbok Marnak ToIInvsstm.M a.ndi Cash n.st Cash Inv.shns* asivgi Cash ksbn.st sn Cash

Cost O&M B.ndI FI Cost O&M 8.ndI FI Cost O&M B.ndl Flow Cost 0&M Bundi Flow

9.2

13.3 cI•0

x—1

300

300300

300300

300300

3001000

10001000

10001125

1125

1170

1451

0

0

51

443

0

0

36

468

20

117

7

1751291

1284

2654

368

401

0

0

15

120

0

0

8

76

5

19

2

35290

398

650

10011875

886

2003

1117

49

Appendix 8Page 1

FARM BUDGETSTable 1: Baro Raya

At Appraisal At PCR

Future Future Future Future

without with without withProject Project Project Project

1. Farm Size (ha) 0.78 0.78 0.78 0.78

2. Cropped AreaPaddy WS-Ir 0.78 0.78

Paddy WS-rf 0.00 0.00

Paddy DS1 0.03 0.23

Paddy DS2 0.00 0.00Soybean 0.04 0.31

Groundnuts 0.03 0.08

Mungbean 0.01 0.16Total 0.91 1.60 0.89 1,56

C.L(%) 114 200 114 200

3. Yields (mt/ha)Paddy WS-Ir 5.0 6.20

Paddy WS-rt

Paddy OS1 5.2 6.30

Paddy DS2 5.2 6.30

Soybean 0.9 1.50

Groundnuts 0.8 1.50

Mungbean 0.6 1.00

4. Prices (Rp/kg)Paddy WS-lrPaddy WS-rfPaddy DS1Paddy DS2SoybeanGroundnutsMungbean

5. Production Value (Rp'OOO)Paddy WS-IrPaddy WS-rfPaddy DS1Paddy 0S2SoybeanGxoundnutsMungbean

Total

578

6. Production Costs (Rp000)Paddy WS-lrPaddy WS-rtPaddy DS1Paddy DS2SoybeanGroundnutsMungbean

Total

165

7. Net Farm Income (Rp'OOO)1986 Prices

4131994 Prices

773

8. Incremental Net Farm Income (Rp'OOO)1986 Prices 5881994 Prices 1101


50

Apøendix 8

Table 2: South Lakbok Page 2

At Appraisal At PCR


without with without with

Project Project Project Project

1. Farm Size (ha) 0.5 0.5 0.5 0.52. Cropped AreaPaddy WS-lr 0.04 0.42Paddy WS-rt 0.30 0.07Paddy DS1 0.23 0.46Paddy DS2 0.00 0.00Soybean 0.03 0.13Groundnuts 0.01 0.00Mungbean 0.01 0.00

Total 0.62 1.04 0.62 1.09C.I.(%) 124 208 124 218

3. Yields (mt/ha)Paddy WS-Ir

3.5

6.2Paddy WS-rt

3.2

4.0Paddy DS1

3.6

6.3Paddy DS2

3.6

6.3Soybean

0.9

1.5Grou ndnuts

0.8

1.5Mungbean

0.6

1.0

4. Prices (Rp/kg)Paddy WS- Ir

300

300Paddy WS-rf

300

300Paddy DS1

300

300Paddy DS2

300

300Soybean

1000

1000Groundnuts

1000

1000Mungbean

1125

1125

5. Production Value (Rp000)Paddy WS- Ir

37

774Paddy WS-rf

291

90Paddy DS1

247

878Paddy DS2

0

0Soybean

31

200Groundnuts

6

0Mungbean

6

0Total

286

812

619

1942

6. Production Costs (Rp'OOO)Paddy WS-lr

14

205Paddy WS-rf

111

28Paddy DS1

92

229Paddy DS2

0

0Soybean

6

29Groundnuts

0Mungbean

2

0Total

93

185

227

491

7. Net Farm Income (Rp'OOO)1986 Prices

193

6271994 Prices

361

1174

392

1451

8. Incremental Net Farm Income (Rp000)1986 Prices 4341994 Prices 813

1059

51

Appendix 8

Table 3: Mamak Page 3

At Apprassal At PCR


without with without with

Project Project Project Project

1. Farm Size (ha) 1.0 1.0 1.0 1.02. Cropped AreaPaddy WS-lr 0.19 1.00Paddy WS-rf 0.57 0.00Paddy DS1 0.01 0.25Paddy 0S2 0.00 0.00Soybean 0.00 0.45Groundnuts 0.00 0.00Mungbean 0.37 0.64

Total 1.18 2.10 1.14 2.34C.l.(%) 118 210 114 234

3. YIelds (mt/ha)Paddy WS-Ir 3.0 5.6Paddy WS-rf 2.5 3.5Paddy DSI 3.1 5.7Paddy DS2 3.1 5.7Soybean 0.9 1.4Groundnuts 0.0 0.0Mungbean 0.5 0.9

4. Prices (Rp/kg)Paddy WS- Ir 300

300

Paddy WS-rf

300

300Paddy DS1

300

300Paddy DS2

300

300Soybean 1000

1000

Groundnuts 1000

1000

Mungbean 1125

1125

5. Production Value (Rp'OOO)Paddy WS-Ir 168

1680

Paddy WS-rt

431

0Paddy OS1

9

426Paddy DS2

0

0Soybean 0

630

Groundnuts 0

0

Mungbean 206

651

Total

329

1482

814

3386

6. Production Costs (Rp'OOO)Paddy WS-lr 69

460

Paddy WS-rf

177

0Paddy DS1

3

114Paddy DS2

0

0Soybean 0

96

Groundnuts 0

0

Mungbean 71

139

Total

129

303

320

809

7. Net Farm Income (Rp000)1986 Prices 200

11791994 Prices 375

2208

493

2578

8. Incremental Net Farm Income (Rp'OOO)1986 Prices 9791994 Prices 1833

2084

asian development bank - adb.org · currency unit $1 .00 rp 1.00 at pcr september 1994 rp 2,150...

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