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The World Bank

Report No. 13952-IN

STAFF APPRAISAL REPORT

INDIA

HYDROLOGY PROJECT

JULY 14, 1995

South Asia Country Department IIAgriculture and Water Operations Division

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CURRENCY EOUIVALENTS(As of July 1994)

Currency Unit Indian Rupee (Rs)

US$ 1.00 Rs 32.0l/

INDIAN FISCAL YEAR

Government of India, States: April I - March 31

WEIGHTS AND MEASURES - METRIC SYSTEM 2/

1 Meter (m) 3.28 feet1 kilometer (km) 0.62 milesi hectare (ha) 2.47 acresI square kilometer (sq km) 100 ha or 0.39 square milesI million cubic meters (Mm3) 810 acre-feet (ac-ft)I million acre-feet 1235 Mm3I cubic foot per second (cfs or cusec) 0.028 Mm3 per second (cumec)

SEASONS

kharif Monsoon seasonrabi Dry/Winter season

A/ The US Dollar/Rupee exchange rate is subject to change. Conversions in thisreport have taken into account the projected exchange rate over the disbursementperiod.

2/ The Metric System has been used in most cases. However, India is still in theprocess of transition to the metric system; non-metric units are still widely used,and were also used in this report in which conversion to the metric system mayconfuse the reader.

ABBREVIATIONS. ACRONYMS AND INDIAN TERMINOLOGY

General

ADB - Asian Development BankAPR - Annual Project ReviewBCM - Billion Cubic MetersCAS - Country Assistance StrategyCGWB - Central Groundwater BoardCGWTRI - Central Groundwater Training and Research InstituteCPCB - Central Pollution Control BoardCWC - Central Water CommisionCWPRS - Central Water and Power Research StationDANIDA - Danish Aid OrganizationDEA - Department of Economic AffairsDGIS - Netherlands Organization for International CooperationDMG - Department of Mines and GeologyDOWR - Department of Water ResourcesFAO/CP - Food and Agliculutre Organization of the UN, RomeGOI - Government of IndiaGOO - Government of OrissaGOK - Government of KeralaGOMP - Government of Madhya PradseshGOAP - Government of Andra PradeshGOTN - Government of Tamil NaduGOM - Government of MaharashtraGOG - Government of GujaratHDUG - Hydrology Data Users GroupHDW - Hydrology Development WorkshopsHIDAP - Hydrology Institutional Development Action PlanHIDR - Hydrology Institutional Development ReviewHILTECH - High Level Committee on HydrologyH P - Hydrology ProjectHSC - Hydrology Standard CommitteeIDR - Institutional Development ReviewIMD - India Meteorological Department

MOWR - Ministry of Water ResourcesMOEF - Ministry of Enviomnent and ForestsMOST - Ministry of Sceince and TechnologyNHP - National Hydrology ProjectNCC - National Coordination CommitteeNGWDC - National Groundwater Data CenterNIC - National Informatics CenterNIGRT - National Institute for Groundwater Research and TrainingNICNET - NIC's Satellite-based Communication NetworkNIH - National Institute of HydrologyNLSC - National Level Steering CommitteeNSWDC - Natonal Surface Water Data CenterPCS - Project Coordination SecretaiiatO&M - Operation and MaintenanceODA - Overseas Development Administration (UK)OECF - Overseas Economic Cooperation Fund (Japan)PWD - Public Works DepartmentRDEC - Research and Development Evaluation Committee

R&D - Research and DevelopmentRGWDC - Regional Groundwater Data CenterRSWDC - Regional Surface Water Data CenterSDV - Supplementary Data Volume (Annexes)SID - SuLvey, Investigation and DesignSGO - State Groundwater OrganizationSOE - Statement of ExendituresSPCC - State Project Coordination CommitteeSWDC - State Water Data CenterWMO - World Metereological OrganizationWRD - Water Resources DepartmentI IND1P - Uinited Nations Development Program

Professional Designations.

AD - Assistant DirectorAE - Assistant EngineerARO - Assistant Research OfficerCE - Chief EngineerDG - Di-ector GeneralEE - Executive EngineerJE - Junior EngineerRO - Research Officer-SG - Supeiinteniding GeologistSRO - Senlior Research OfficerSE - Superintending Enginiee

Technical.

A( ;S - Automatic Climatic StationARCk - Autogr-aphic Rain Gauge\Wl R - Automnatic Water Level Recoride1- -C- - Electr o-colld(ucti vityDD)F - Depth-Dur-ati on-FrequencyF('S - Full (Class A) Climatic StationC\:G\ - GroundwaterG - River Gauging tRG) Site equipped with a staff gaugeGD - RG Site with 'C' and sedi:ment samplingIGi)SQ - RG Site with 'GDS' ani water quality samplingIDF - I n te nsity- DuL ation-Fi-equencyIS 13 - Indian Standciard BureauOW - OlIservation Wellpl'l - NieasuIe of water's alkalinity/acidityPC, [ isolial Corln pttelrRD - River DataRG - River GaugingW( - Watel Quality

INDIA

HYDROLOGY PROJECT


Table of ContentsPage No.

CREDIT AND PROJECT SUMMARY ............................................................. i

I. PROJECT AND SECTOR BACKGROUND .I

Introduction. IBackgr-ound. ............... .................... Surface Water and Groundwater Resour ces ...............................................Hydrology in India ............ .. ... 4Future Challenges in the Water ResouLces Subbsect. .

II. BANK INVOLVEMENT AND LESSONS LEARNED. 7

Bank Involvemenit in India's Water ResouLIceeS Secto. . . 7Issues and Lessons Learnt regarding Hydrology in Incia...

- Organization Issues .8- Development of Specialized Cadres for Suiface Water I lydr(ology . 9- Access to Data Bases .9- Quality of Basic Data. - Financial Constraints.9

Proposed Strategy and Rationale for Bank Involvement . . .I ()- Government Stategy. I()- Banik Strategy .I ()- Rationale for Bank Involvement .I I

III. THE PROJECT .............................. I..

A. Project Concept, Objectives and Scope . ................................ i- Project Concept ......................................................... I I- Project Objectives .......................................................... 1- Project Strategy ......................................................... 12- Project Scope ..................... .................................... 1 2

This report is based on the finidings of an Appraisal mission comprisinig of Messrs./Mmes.Cunningham (Task Manager), Barber, Fraquaharson, Grijsen, van Hoves, Dutt. Dass, and Abbi(Consultants) which visited India in September/October 1994 and was joined palt-time byMessrs./Ms. Matthews. Mei Xie and Robelus (IDA). The mission was also joined part-time by anODA (UK) team consisting of Messrs. Jackson and Robson (ODA), an(d Messrs. Hull andSunderland (consultants). The institutional and organizational aspects of the project were fuLtherelaborated in 1995 with assistance of specialists from DGIS (The Netherlands) anld ODA. Theproject preparation was also assisted by Messrs/Mmes. Oblitas, Fauss, J.R. Malhotra, A.Subramanian, Myint, EstoLlue and Abedin (Bank). and Kraatz and Hasan (FAO). The PeerReviewers of the project were Messrs./Mmes. Crooks, Robelus (environmental aspects):Frederiksen (iirigation); Matthews (informatics): Smith (general water resoulces) Ms. Mei Xie(hydrology) and Radha Singh (institutional aspects). Mr. Vergin, Director (SA2DR) anld Mr.Shawki Barghouti, Division Chief (SA2AW) have endoorsed the project.

Page No.

B. Detailed Features of the Project .................................... 14- Surface Water Hydrology ......................................... 14- Groundwater Hydrology ......................................... 17- Hydrometeorology ......................................... 19- Upgrading of Data Managemnent Facilities ...................................... . 20

General ......................................... 20Establishment of Data Banks ......................................... 20Hardware and Software for Data Centers ................................... 21Communication Networks for Data Transfer ............................... 21

- Research and Development Activities ......................................... 22- Institutional Support ......................................... 23

Training ......................................... 23- Consultancy Services ......................................... 23

C. Status of Preparation anid Implementation Schedule ..................... ................. 24

D. Environmental Aspects ................................................ 25

IV. PROJECT COSTS AND FINANCING ................................................ 25

Project Costs ......................................................... 25Project Financing ................................................ 26Procurement ................................................ 27Credit Allocation and Disbursements ................................................. 29Accounts and Audits ................................................ 29

V. ORGANIZATION. MANAGEMENT and IMPLEMENTATION ...................... 30

A. Process Approach ........................................................................ 30

BI. Implementation and Management Arrangements ..................... 31- Project agencies ........................................ 31- Project Implementation Arrangements ........................................ 32- Project Coordination ........................................ 32- Organizational Framework ............... ......................... 33- Hydrology Institutional Development Action Plan .............. ............. 34- Annual Hydrological Institutional Development Review .......... .......... 34- Linkages to Data Users ........................................ 34- Project Monitoring ........................................ 35- Annual Project Review ........................................ 35- Project Launch Mission ........................................ 35

VI. PROJECT JUSTIFICATION AND RISKS ................ ................... 36

Project Justification ................................... 36Risks ..................................................... 37

VII. AGREEMENTS AND RECOMMENDATIONS ................................... 38

TABLE IN THE MAIN TEXT

Table 4.1 Summary of Costs ................................... 26Table 4.2 Project Financing Plan ................................... 27Table 4.3 Procurement Plan .................................... 28

INDIA

HYDROLOGY PROJECT


(Annexes and Supplementary Data)

Table of Contents

ANNEXES

I. Main TablesTable 1. Existing and Improved Hydrometric Facilities ............................... ITable 2. Water Quality Testing Facilities . .............................................. 2Table 3. Project Cost Summary .................................................... 3Table 4. Implementation Schedule ..................................................... 4Table 5. Estimated Disbursement Schedule ........................ ................... 5Table 6. Proposed Allocation of Loan ................................................. 6

2. Detailed Cost Estimates .......................................................... .... 83 Improvements to Surface Water Observations Systems ............... .................. 194. Improvements to Groundwater Observations Systems ........... .. ................... 245 Surface and Groundwater Quality Monitoring ................ .. ........................ 296. Meteorological Activities .............................................................. 377. Data Management and Communication Systems ........................... I ........... 45

Appendix 1: Participation of Data Users ................ ....................... 528. Research and Development ............................................................ 579. Institutional Strengthening .............................................................. 63

Appendix 1: Project Coordination Arrangements ............ .................. 7410. Training .. 78I1. Consultant Services .8612 Project Supervision and Monitorable Indicators of Development Impact 9813a. E nvironmental Considerations .. 106]3b Procuremenit .......................................... ........................................ 10714. Selected Documents anid Data Available in the Project File . .111

CHARTS(a) Development Objective Indicator-s and Monitoring ..................................... 101(b) Overall Project Coordination .................... ...................................... 113(c) Project Organizationi Arrangemiients for CWC ..................... 114(d) Project Organ izationi Arrangements for CGWB .115(e) Organizationi ot Typical State (MP) .......... ............................................. 116

ANNEXES and SUPPL,EMENTARY DATA

15. Centr-al Water Commilissio. .11716. Cenitral G roLundwater Board Prograrm ................................................... 1301 7. National lIstitute ot Hydrology Progr-am ..................... 1521 S. Central Water and Power Research Station Progr-am I 58I '. Indian Meteorological Department .16120. Programs in Andra Padesh. .16621. Programs in GLjarat ..................... 18322. Programs in Kerala .19823. Progra m s in Madhya Pradesh ............................................................ 21124. Programns in Maharashtra .22725. Programs in Orissa .24326. Programs in Tamil Nadu .259

INDIA

HYDROLOGY PROJECT

Credit and Project Summarv

Borrower: India, acting by its President

Implementing Central Water Commission (CWC), Central Groundwater Board (CGWB),Agencies: Central Water and Power Research Station (CWPRS), and National Institute of

Hydrology (NIH) within the Ministry of Water Resources (MOWR); IndiaMeteorological Department (IMD) within the Ministiy of Science andTechnology); and the Governments of Andra Praldesh (GOAP). Gujarat (GOG).Kerala (GOK), Madhya Pradesh (GOMP), Maharashtra (GOM), Orissa (GOO),and Tamil Nadu (GOTN) through their agencies responsible fro surface waterand groundwater hydrology.

Amount: IDA Credit SDR 90.1 million (US$ 142.0 million equivalent)

Terms: Standard terms with a 35 years maturity

Re-lending Terms: From the GOI to the states, as part of the central assistance to the Statedevelopment on terms and conditions as applicable at that time.

Project Description: The Project would assist GOI and the seven participating states to developcomprehensive, easily accessed and user friendly data bases covering allaspects of the hydrological cycle, including suiface water and groundwaterin terms of quantity and quality and climatic measurements, particularly ofrainfall. The project supports the objectives of GOI's National Water Policyand the Bank's strategy for India's water sector and policy regarding waterresources management. Special attention would be paid to standardization ofcriteria, processes and procedures for measurement of hydrologicalparameters and for storage and retrieval of information so that data serieswould be compatible and the data bases would be interactive. The projectwould be structured as a six-year operation and include support of:upgrading and expanding the physical infrastructure for all aspects of thecollection, collation, processing and dissemination of hydrological andhydrometeorological data; provision of equipment and materials;institutional strengthening including technical assistance and training and;new buildings and incremental operating and maintenance costs.

Benefits and Risks: The project would generate substantial indirect benefits by assisting in thedevelopment of more reliable and spatially intensive data on the quantity andquality of water resources and making information available to legitimateusers from computerized data banks. The main project risks are generallyknown fiom the work undertaken for project preparation and appraisal. Theproject has been designed to address and minimize specific risks, asdescribed below. The institutional risks include the ability to achieve andmaintain organizational arrangements envisaged, adequate staffing andoperating budgetary resources. Actions proposed to address these risksinclude: (i) the six-year project period; (ii) improved inter-agencycoordination; and (iii) provision of technical assistance, training andinstitutional support. Technical risks are relatively small and relate mainly toquality control issues. All proposed technologies have been tested and usedoutside (and some inside) India and have proven effective. However, sornemay be novel to some agencies involved and may proceed more slowly than

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anticipated. This risk is contained by flexible process approach with annualreviews of work programs and by: (i) standardization of data collection,validation and storage; (ii) special attention to quality control and monitoringand evaluation of project impact: and (iii) ensuring that lessons learned andexperience gained are shared among hydrology data users and stakeholders.The environmental risks associated with the project are minimal. The overallenvironmental impact would be positive due to reliable data to improve allaspects of water resource development and management.

Estimated Costs: a!

Item Description Local Foreign Total % of----------US$ Million ---------- Base Cost

A. Hydrometry and Data Management(i) MOWR and its agencies 38.0 8.6 46.6 32(ii) India Metereological Department 1.3 0.4 1.7 1(iii) Project States 28.2 10.1 38.3 26

B . Institutional Strengthening(i) Consulting Services 3.3 4.6 7.9 5(ii) Training 5.5 0.4 5.9 4(iii) Research & Development Services 0.7 0.1 0.8 1(iv) Institutional Strengthening & O&M support 37.8 6.2 44.0 31

Base Cost 114.8 30.4 145.2 10(Physical Contingencies 9.7 2.0 11.6 8PriceContingencies b/ 4.1 1.5 5.6 4

Total Project Cost 128.5 33.9 162.4 112

Financing Plan:Local Foreign Total

-----------------($ million)-----------------

Government of India 20.4 0.0 20.4 11IDA 108.1 33.9 142.0 89Total 128.5 33.9 162.4 100

Disbursement:

Bank FY 1995 1996 1997 1998 1999 2000 2001------ U------------------------(US$ million)------------------------------------------

Annual - 5.7 15.6 27.0 34.1 34.0 25.6Cumulative - 5.7 21.3 48.3 82.4 116.4 142.0

Poverty Category: Not applicableEstimated Rate of Economic Return: Not applicable

a/ Including taxes and duties estimated at US$ 4.0 million equivalent; rounded to one decimal place.b/ Including allowance for changes in currency equivalent over the project period.

INDIA

HYDROLOGY PROJECT

I. SECTOR AND PROJECT BACKGROUND

Introduction

1.01 The development and efficient use of India's water resources for a wide range of purposesis critical to the country's economic well-being and to the overall welfare of its people. Meeting thefood demands of the very large and growing population has required the development ofessentially all the available land that is suitable for agricultural production and the commitment of avery large proportion of the available water resources to irrigation in order to increase croppingintensities and crop yields on the land. Meanwhile, there are growing and competing demands forwater resource development to provide supplies for municipalities and urban populations, ruralcommunities, industry and power generation. It is also recognized that sufficient water ofappropriate quality must be left in-stream during the low flow season to sustain wildlife and meetother environmental demands. And in some cases it is necessary to maintain river flows fornavigation. In contrast, there is need in many parts of India to develop flood control works toprotect populations and their property, which are increasingly forced to occupy flood-prone lands.

1.02 A reliable data base providing historical records for all aspects of the hydrological cycle isessential for planning and management of water resources development. This is particularlyimportant when the development of this unitary resource approaches its limits in any basin area andconflict and competition between users becomes a common occurrence. In this situation, ascientifically designed data base, with appropriate coverage of all important aspects of hydrology inspace and time, is required for analyses of potentials for new water resources developments, forlong-term planning and real-time management of the resources, and for preservation of theresources within the overall environment in both quantitative and qualitative terns.

1.03 The concerned agencies in the Government of India (GOI) and in the State Governments ofAndhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Kerala, Orissa and Tamil Nadu haverecognized the need: (a) to improve their hydrological data bases in terms of coverage andaccuracy; (b) to improve their capabilities for storage, retrieval and interpretation of data elementsthrough use of computers with appropriate peripherals and software; (c) to ensure rapid transfer ofdata between concerned agencies by connecting computerized data bases through satellite and landcommunication links; and (d) to enhance the publication and access of information to eligible usersin the public domain. The concerned agencies recognize that achievement of the above goals willneed improvement of institutional and staff capabilities at all levels through focused institutionalstrengthening and a large-scale trainini g exercise, and will need some organizational changes in theagencies. The proposed project is designed to assist in the achievement of the above objectives.

Background

1.04 The land surface of India, coveting about 3.3 M km2, may be subdivided into six majorphysiographic regions. The Himalayan ranges occupy large areas of the extreme northwest andnortheast of the country. The great Indo-Gangetic plain encompasses an area of about 650,000km2, which extends from the deserts of northern Rajasthan to the high rainfall area of WestBengal. The central highlands lie between the Indo-Gangetic plain and the peninsular plateaus.They include the divide between the northward-draininig tributaries of the Ganges river system andthe rivers which drain eastward to the Bay of Bengal or westward to the Arabian Sea. The plateausform the largest of the physiographic units. They are bounded on the west by the escarpments ofthe Western Ghats which rise fi-om a narrow coastal plain. The Eastem Ghats mark the easternedge of the plateaus with escarpments which overlook an alternation of deltas and coastal plains.The seven states which will participate in the project (para 1.03) form a contiguous block of

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country covering about 0.98 M km2 (about 30% of India's total area) which includes part of thecentral highlands region, the whole of the peninsula plateaus, the whole of the Western Ghats andthe whole of the Eastern Ghats.

1.05 India has a diversity of tropical and subtropical climates ranging from oceanic along thecoasts to continental in most of the land mass. Rainfall conditions range from arid to humid. Theincidence of rainfall is controlled mainly by the occurrence of the monsoons. The southwestmonsoon reaches the whole of India during June to September. The northeast monsoon passesover the southern end of the peninsula during October to December. Thus, the marked seasonalityof rainfall reflects the distribution and timing of the monsoons. The spatial variation in annualrainfall amounts in India is extremely wide, ranging from less than 100 mm in parts of theRajasthan desert to more than 4,000 mm in parts of the Western Ghats and in the extreme northeastof the country. A similar spatial variation in annual rainfall occurs within the area covered by theeight states participating in the project.

Surface Water and Groundwater Resources

1.06 Water Availability. A 1988 publication by the Central Water Commission (CWC) estimatesthat the average annual natural run-off available to India is about 1,880 billion cubic meters(BCM). Of this total, about 600 BCM (32%) is generated in the Brahmaputra and Barak (Meghna)basins and about 500 BCM (27%) in the Ganges basin, leaving only 780 BCM (41%) from theremaining basins of India, which cover 56% of the country's land surface. The average annualrun-off from the basins which cover the seven states participating in the project (excluding the run-off to the Ganges river from Madhya Pradesh) totals about 520 BCM or 28% of the run-offavailable to India.

1.07 The amounts of unit area run-off from the various basins of India vary widely, reflectingthe spatial distribution of annual rainfall intensity. As examples, the unit area run-off from thecatchment areas totaling about 60,000 km2 covering the Saurashtra peninsula in Gujarat is about35,000 m3/km2 (equivalent to a depth of 40 mm on the area), as compared to about 472,000m3/km2 on the Mahanadi basin of 141,600 km2 (equivalent to a depth of 470 mm on the area).The problems of the spatial diversity of surface water run-off in India are exacerbated by themarked seasonality of run-off reflecting the incidence of the monsoons. Most of the rivers carryabout 80% of their annual flows during the months of June to September when the southwestmonsoon crosses the entire country. Generally, the rivers carry 90% of their annual flows duringthe period June to November. Thus, there is a marked low flow season in December-May, and therivers draining the cenitr-al highland and plateau regions (which lack snow melt run-off) haveextremely low flows by the end of the dry season. The problem of the marked seasonality ofnatural river flows is compounded by wide inter-annual variation of run-off from any basinreflecting variation in annual rainifall amounts on the catchments. As an example, the 1948-79 dataseries of annual run-off from the Narmada basin provides a mean annual value of 45 BCM, but theextreme range in the series is 21-76 BCM -or 47% to 169% of the mean.

1 .08 The most recent estimate of the replenishable groundwater resources of India, excluding theresources of the Brahmaputra and Barak basins. is about 450 BCM/yr. Of this total, about 207BCM (45%) are estimated to occur in the seven states which will participate in the project. TheIndian practice is to allocate about 15% of the estimated resource to present and future communitywater supplies and industrial uses and regard the balance as utilizable groundwater for irrigation.However, this estimate is made without accounting for outflows from the groundwater systems tothe rivers and for groundwater consumed by natural wild vegetation. Most of these 'losses' are

3

essentially uncontrollable. Moreover, groundwater outflows to the rivers are the source ofessentially all the natural dry season flows of the river systems of India which do not have a snow-melt contribution.

1.09 It should be noted that the natural run-off estimates developed by CWC (para. 1.06) areinclusive of the groundwater outflows to the surface water systems. However, as noted above(para 1.08), the methodology used by the Central Ground Water Board (CGWB) and the stategroundwater organizations (SGO) for evaluating groundwater resources does not specifically takeaccount of this contribution to surface water when calculating groundwater availability. Thus,there is a definite problem that surface water and groundwater availability are not assessedconjunctively, and this results in double accounting and over-estimation of the total water resource.

1.10 Constitutional and Legal Aspects of Water Resources. Under the Indian Constitution,every State Government has power to legislate in respect of water, and can exercise this power forthe whole or any part of the state. The state's authority extends to all works for use and control ofwater within its jurisdiction. Thus, water and its development is primarily a state subject.

1.11 The Union has power under the Constitution to legislate through Parliament for theregulation and development of interstate rivers and river basins. Thus, the authority of the StateGovernment over water can be exercised within such limitation as may be imposed by law byParliament, but the Union cannot acquire the rights of user or of constructing water developmentworks within a state. Except with regard to a few specific projects (for example, the DamodarValley Development), Parliament has not considered it expedient to impose any general limitationson the development of interstate rivers and their basins.

1. 12 Parliament gave authority to Central Government under the River Boards Act of 1956 to setup a River Board for any interstate river, but the Boards are entirely advisory and cannot restrict orcontrol State Governments regarding water. The Constitution authorizes Parliament to provide forthe adjudication of any disputes between the riparian regarding use of water in an interstate river orbasin by law. Using this provision, Parliament passed the Interstate Water Disputes Act of 1956,which sets out the conditions under which a water dispute can arise, and authorizes CentralGovernment to refer any water dispute, which cannot be settled by interstate agreement, to a legaltribunal for adjudication. In this respect, any of the riparian states can also ask GOI to set up atribunal. The tribunal findings are regarded as final for the specified period of the award - typicallyabout 50 years.

1.13 Under the rights laid down by the Constitution, the power to legislate the control ofgroundwater development rests with the State Governments. The degree to which the states haveexercised this power to date has been minimal.

1.14 Water Sharing Arrangements between Riparian. Essentially all the important river basinsof India cover two or more states, and the Indus and the Ganges have basin areas which extendbeyond the boundaries of the Union. The major river basins of the states which will participate inthe project are listed below together with the proportions of their basins occurring in the riparianstates; none of those rivers are international rivers.

4

River Basin Area State c of State '. of State . of Srute % of State % of TotalBasin (kn 2) Basin Basin Basin Basin Basin (%)

Namiada 98800 MP 87.0 Gujarat 11.5 Mah 1.5 100Tapi 65150 Mah 79.0 MP 15.0 Gujarat 6.0 100Subemarekha 19300 Bihar 71.0 W. Beng18.0 Orissa 11.0 100Brah imni-Baitarani 41900 Orissa 67.0 Bihar 30.5 MP 2.5 100Mahanadi 141600 MP 53.0 Orissa 46.5 Bih/MahO.5 100Mahi-Sabamnati 56500 Gujarat 60.0 Rajastha 39.0 MP 1.0 100Godavari 312800 Mah 48.6 MP 20.7 AP 23.8 Orissa 5.5 Kamnat 1.4 100Krishna 258900 Kanat 43.8 Mah 26.8 AP 2-9.4 100Pennar 55200 AP 88.0 Kamat 12.0 100Cauverv 87900 TN 55.5 Kamat 41.2 Kerala 3.3 100

AP-Andhra Pradesh, Kanat-Kamataka. MP-Madhya Pradesh. Mah-Maharashtra, and TN-Tamil Nadu

1. 1 5 Within the project's participating states, parts of the surface water resources are sharedaccording to various agreements between the riparian or under tribunal awards. The Godavariwaters are shared by interstate agreement with a tribunal award permitting Andhra Pradesh to makea water transfer from the Godavari to the Krishna. The waters of the Narmada and Krishna areshared between the riparian according to tribunal awards (with an allocation to the non-riparian,Rajasthan, from the Narmada). In the cases of the Subernarekha, Tapi and Mahi, parts of thewaters are shared under interstate agreements. Developments on the Mahanadi, Brahmani andBaitarani have not as yet caused disputes or required interstate agreements. An interstate disputebetween Tamil Nadu, Karnataka and Kerala regarding the Cauvery waters remains unresolvedsince the previous agreement terminated in 1974 (the dispute is now under adjudication by aTribunal). All the tribunal awards are time-bound and may be subject to reassessment at aspecified future date. A weakness of all the agreements is that they generally allocate proportionsfrom an estimated dependable yield without specifying the timing when withdrawals may occur.None of the existing agreements make arrangements for sharing groundwater.

Hydrology in India

1. 16 General. Hydrology may be defined as the science that deals with the processes governingthe depletion and replenishment of the surface water and groundwater resources of the earth. Inthis respect, it may be regarded as a branch of physical geography. Engineering hydrologyincludes those segments of the very broad field of hydrology pertinent to the design and operationof engineered projects for the control and use of water.

1. 17 Hydrometry is the technology of water measurement, covering all aspects of watermovement within the hydrological cycle. Thus, sound hydrometry is basic to the science ofhydrology in that it provides the data which are essential for all hydrologic computations andquantifications. Essentially all the field work in hydrology is concerned with hydrometry. Amajor objective of the project will be to improve the performances of the concerned Indian Federaland State Government agencies in carrying out their hydrometric tasks in order to provide basicdata which are more reliable and have an appropriate spatial distribution. This will include waterclualitv monitoring for general and environmental purposes. The availability of such data willenhance the accuracy of the hydrological analyses which provide the information on which allwater planning and management decisions should be made and all water project design andoperation concepts should be based.

5

1. 18 Development of the Practice of Hvdrologv inJIndia. Development of surface waterresources has been led, since the 1 850s, by the need to create large public sector irrigation schemesto secure and increase food production to support the growing population. Until around the end ofthe 19th century, navigation--on rivers, irrigation canals and single purpose navigation canals--was an important water resource use, but this declined rapidly in the early 20th century. Planningand design of large river diversion structures, their appurtenant canal systems and any reservoirstorage created to support these facilities required detailed knowledge of the hydrologicalcharacteristics of the river on which they were placed. Thus, hydrological skills were developed instate irrigation departments or public works departments which had responsibility for irrigation.Hydrological skills are also required for the design of road and rail systems (particularly theirbridges), and for the design of hydro-electric schemes.

1. 19 Surface Water Hydrology. Surface water measurement networks were located originally forproject planning and design purposes, and measurements were often discontinued after the short-term purpose had been achieved. Some early networks were established on major rivers mainlyfor flood warning purposes, and often observed only the iiver stages. Historically, the networkswere not designed to evaluate the surface water resources of a river basin or sub-basin. While thewater resources were relatively undeveloped or uncommitted, the lack of total resource informationhad little consequence. But as levels of development of surface water resources have increased andconflicts between riparian states and users have emerged. the need for such information hasgrown. Unfortunately the development of the river gauging networks has not been planned, inmost cases, to meet basin water resource evaluation needs and/or to support basin water planningand management.

1.20 Apart from the relative sparsity of properly located river flow observation stations in manybasins, a fundamental weakness relates to the practice of hydrometry and the poor quality of thedata produced, particularly in state agencies. This can be related to many reasons--poorly chosenmeasuring site locations, poor hydrometric practices, inadequately maintained equipment, andpoorly motivated gauging and supervisory staff among others--but the result has been to place inquestion the validity of the hydrological analyses which used the data. And the sparsity of dataalone caused design decisions to be made for many projects on the basis of empirical formulaerelating rainfall (for which long records were available) to runoff.

1.21 Groundwater Hydrology. The development of skills in groundwater hydrology expandedrapidly after the creation of the CGWB in 1972 and the SGOs early in the 1970s. The central andstate agencies now have very extensive observationi networks for measuring water levelfluctuations and water quality. Though the periodicity of water level observation needsimprovement in most ot the networks, and pul-pose--bUilt obser-vation tubewells with water levelrecorders are required for key sites. a fundamenital weak-ness is apparent in how hydrological dataare analyzed to provide estimates of tCe resource available for development (para 1.08).

1.22 Water Quality. In the Indian peninsula, water pollution monitoring has so far only receivedlow-profile attention. and the interest in water qjuality has been concerned mainly with its use forirrigation and domestic water supplies. However, it is now widely recognized that rapidindustrialization and urbanization processes, as well as use of fertilizers and pesticides inagriculture, will contribute conisiderably to the deteriorationi of the quality of water resources. Themain government agencies involved in the project with an interest in water quality are CWC,CGWB and the State Irrigation or Water Resources Departments and State GroundwaterOrganizations in the participating states. The Pollution Control Boards (PCB) at central and statelevels are conceerned with particular aspects of water quality and with imposing the relatedregulations, but the PCBs are not project implementationi agencies.

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Future Challenges in the Water Resources Sector

1.23 Water Policy. Provision of domestic water supplies for urban and rural populations andassuring drinking water supplies for livestock are given first priority under the National WaterPolicy (MOWR, 1987). The document recognizes the water needs of irrigation, hydropower,thermal power, industry and navigation and identifies the need to maintain minimum flows onrivers for flushing pollutants, maintaining wildlife and other environmental reasons. The policygives irrigation second priority in allocation, but allows that this prioritization might be modifiedwith reference to area-specific considerations. As presently developed, the policy paper isessentially a guideline. There is a need to evolve more definite criteria for allocation of wateramongst different users within the framework of the National Water Policy. But proper applicationof such criteria in any specific situation would demand a sound understanding of the availablewater resources and their existing uses supported by reliable hydrological analyses based onsufficient and accurate data.

1.24 Water Resources Planning and Management. Effective planning and coordination of waterresources development are essential if India's water resources are to be efficiently managed. GOIsNational Water Policy (para. 1.23) provides a framework guideline for coordinating waterdevelopment for alternative uses and across state boundaries, and it emphasizes the need for riverbasin planning. A recent Bank policy paper on water resource management 1 emphasizes the needfor development of the resource in the context of a national water strategy which reflects a nation'ssocial, economic and environmental objectives. This paper, and the India Irrigation Sector Review(Report No. 9518-IN, December 1991), stressed the importance of the river basin as the primaryunit for planning and management of water resources and for making water allocations to meetmulti-purpose demands.

1.25 A major constraint to implementing such policies in India relates to the structure of theFederation and the status of water in the Constitution as a state subject (para. 1.10). Even if thisconstraint could be removed, other problems would remain relating to the limited and oftenunreliable water resource data and the absence of clearly defined mechanisms for sharing databetween states and between users within states. For essentially all river basins in India, datacollection facilities are inadequate for measuring stream flow, monitoring diversions and storage,and monitoring water quality and existing records provide an incomplete basis for planningdevelopment. Groundwater resource assessments are based on crude water balances which usespecified norms for balance components which have little relationship to site specific conditions.And, moreover, what data is available is not always published and often is not readily accessiblebetween the riparian states of a basin or even between departments and other agencies withinstates.

1.26 Environmental Issues. The Parliament of India has enacted two acts to control pollution ofwater bodies--the Water (Preservation and Control of Pollution) Act of 1974 amended 1988, andthe Environmental (Protection) Act of 1986. These acts provided for the creation of Central andState Pollution Control Boards. They set rules for pollution control and define standards foreffluent. Other environmental concerns relating to water, such as maintenance of minimum lowflows on rivers and the preservation of lakes, wetlands and deltas for the protection of wildlife andthe environment in general, are not clearly defined in law but are covered generally in the NationalWater Policy. However, application of such water environment-related laws and policies and theregulations and standards that relate to the laws requires an appropriately designed and operated

l Water Resource Management; The World Bank, Washington DC, 1993 (A World Bank Policy Paper).

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system for data collection, analysis and dissemination. Yet this is not the case in India, and theseactivities remain scattered and inadequate, and grossly under-funded.

II. BANK INVOLVEMENT AND LESSONS LEARNED

Bank Involvement in India's Water Resources Sector

2.()1 The Bank has supported a wide variety of projects involving development of waterresources in India since the beginning of its lending operations in the country in the 1950s. By theend of 1990, Bank funding had been provided to some 65 projects which had some aspect of waterresource development or control as their primary purpose. About 42 (65%) of the projects werefor ilTigation and 13 (20%) were community water supply and/or sanitation projects. In addition, anumber of urban and rural development projects have had significant water resources developmentcomponents within their broader programs.

2.02 A feature of many of the projects, particularly in the irrigation subsector, has been theinadequacy and inaccuracy of the hydrological analyses which formed the basis on which theprojects were planned, designed, constructed and subsequently operated. Such analytical failingsalmost all related to the inadequacies of the hydrological data available for computations. Despitethe known shortcomings of the hydrological analyses and their impact on the actual performancesof completed projects, the Bank has made only limited attempts through the lending program, toimprove the hydrometric networks and practice of hydrometry which provide the data on which allhydrological analyses are made. Though Bank funding has been commonly used for preparationof surface water development projects, the studies rarely emphasized collection of accuratehydrometric data for better evaluation of the availability of water resources. The Bank-supportedMadhya Pradesh Major Irrigation Project (Credit No. 1177-IN, 1982) included a clearly definedcomponent for expanding the networks of river gauging and climate observation stations at anestimated cost of US$ 8.8 M. But the outcome was less than satisfactory. Only 40% of theprogram was actually completed, mainly because the project authority was predominantlyconcemed with construction of irrigation works and the planned effort to improve the hydrometricnetwork was given low priority.

2.03 The Bank had an influence in causing most of the states of India to establish stategroundwater organizations (SGOs) with a mandate to evaluate the groundwater resources withintheir jurisdiction. The massive development of groundwater for irrigation by the private sector,which was initiated in the 1960s, was supported by the Bank through a series of state and nation-wide credit projects. And the scale of the development required the establishment of specializedgroundwater agencies in the states--a move which the Bank encouraged.

2.04 Bank involvement with hydrological thinking in India has been closely integrated with thedevelopment of GOI and state thinking, and has also been paralleled by major analysis andreflection by India itself. Of particular note is the GOI and state governments' think-piece on thesector termed the "High Level Technical Committee on Hydrology (HILTECH) report prepared in1985. This major exercise was steered by the National Institute of Hydrology (NIH) and MOWRand included a broad cross spectrum of Indian hydrologists and representatives of all nationalhydrology institutions and water agencies and state governments. The resultant analytical reportprovided a diagnostic of the prevailing situation and future needs and made recommendationsregarding the future development of the sector encompassing both institutional development needsand the technical requirements for a program to upgrade India's hydrological network and service.It also recommended assistance from the Bank in the proposed program. Overlapping with theHILTECH report preparation was preparation of GOI's "National Water Policy" (NWP) by

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MOWR in 1987. This provided an overall policy framework for the water sector and is animportant document in providing the policy framework from GOI's side within which HP has beenprepared. Substantial diSCuSSiOnl iS devoted in the NWP to water and basin planning and the needto upgrade hydrological data in order to achieve this. Reflection by the Bank has also beenintensive (paras 2.12 to 2.15). The broader policy context for thc water sector is addressed in suchpapers as the Bank's "Water Resources Management" policy paper issued in 1993, and, specific toIndia, the 1991 "India, Irrigation Sector Review". Both reports emphasized holistic multi-sectoralwater planning and allocation and the need for a strong hydrological data base for such work. Forthe hydrology sector itself, a special study - the "Hydrology Sector Review" was undertaken bythe Bank in collaboration with government in 1987. focussing on three state's (Andhra Pradesh,Maharashtra and Madhya Pradesh). A comprehensive report was issued in draft and provided animportant analytical understanding of the sector and its technical and institutional issues. setting thestage, along with the policy context documents mentioned above, for the later preparation phase ofthe proposed project.

Issues and Lessons Learned Regarding Hydrology in India

2.05 Organizational Issues. Because water resource development in India has been dominated bythe need to develop irrigation, the historical incentive to collect information on the availability ofwater resources has been in irrigation agencies of both Central and State Governments. As aresult, the core central agencies responsible for surface water and groundwater hydrology--CentralWater Commission (CWC) and Central Groundwater Board (CGWB) respectively--are placedwithin the Ministry of Water Resources (MOWR), which despite its name, remains dominated byinterests in irrigation activities and flood protection of agricultural lands. At state levels, surfacewater hydrology is carried out almost exclusively by Irrigation Departments (IDs) or Public WorksDepartments (PWDs) with a major involvement in irrigation (some of which -- for instance,Haryana, Tamil Nadu and Orissa -- have changed their names to Water Resources Departments(DOWRs) and are broadening their roles in the water sector). The SGOs, regardless of thedepartment in which they are located, always have a groundwater development function, withirrigation as the main user.

2.06 As noted (para 1.23). the National Water Policy recognizes the use and demands of waterfor a wide variety of purposes and prioritizes allocations in situations of resource shortage andconflict. But, in practice, allocations must be made on the basis of sound evaluations of the totalresource and the existing commitments which have established user rights on the resource. Suchhydirological evaluations can be made only by the use of appropriate data bases. In situations ofconflict or competition, the producers of the data base should be seen as unbiased. Developedcountries have generally resolved this problem by recognizing comprehensive data collection anddocumentation as an independent function in the water sector and by placing the responsibility witha non-user government agency. The India Meteorological Department (IMD) satisfies thisrequirement for hydrometeorological data, and may be seen to provide an unbiased informationservice to the public at large.

2.07 The time may not be right to separate the responsibility for provision of basic surface waterand grioundwater hydrological information from the user agencies where it now resides. But a firststep could be made in the states by creation of free-standing entities within the existing userdepartments to provide clearly-defined hydrological services to all users in government agenciesand the eligible users in the private sector. Madhya Pradesh and Tamil Nadu are taking this step bycreating hydrology directorates, with responsibility for surface water and groundwater quantity andquality, under a Chief Engineer reporting directly to the Engineer in Chief of their Departments ofWater Resources.

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2.08 Development of Specialized Cadres for Surface Water Hydrology. This problem refers tothe situation in the State Government organizations (essentially irrigation departments) wherehydrology is not treated as a "specialist" subject. Most hydrological units are staffed withgeneralists civil engineers who are not given specific training in the subject. Posting ofprofessional officers tend to be temporary, and they are then posted on to carry out other duties.Even when officers have received specialist training in hydrology, there is no certainty that theywill be used for this work. Since there are few specialists to set standards, the performanceexpected from supporting technical staff tends to be low, and these staff generally receiveinadequate formal or on-the-job training. The solution to this problem is evident--specialistprofessional staff should be recruited or existing staff should be given adequate training, and theseofficers should then be provided with a career structure and incentives so that they can be retainedwithin hydrology units. This will require creation of a surface water hydrology unit (or.preferably, a hydrology unit for both surface water and groundwater) which has a mandate andautonomy to develop a staff cadre as suggested.

2.09 Access to Data Bases. Given that water resources development is a state subject and that allthe important basins of India have two or more riparian states, it is not surprising that most statesdo not give easy access to the water resource information that they collect, and particularly tosurface water data. Processed stream flow data in the way of averages or statistical probabilities ofmonthly or annual flows may be available, but the raw data from which these were calculatedrarely can be obtained. And reliable information on diversions and storage is, in many cases,difficult to obtain. Moreover, because the responsibility for collection and storage of hydrologicaldata is vested at state levels with major user agencies responsible for irrigation development, thebasic data produced tends to be regarded as the property of the agency and the concept of providinga need-based hydrological service to other users has to be broadened. This is in conformity withthe National Water Policy which states that'the prime requisite for resource planning is a welldeveloped information system' and 'there should be fi-ee exchange of data among the variousagencies'.

2.1 0 Quality of the Basic Data. This concerns mainly the surface water data and that collected bythe state agencies. The methodologies employed for obtaining instantaneous river dischargemeasurements are not standardized, and when procedures are clearly specified they are not alwaysfollowed by the field units. Maintenance of current meters and ancillary equipment is poor, and thearrangements for calibration and overhaul of current meters and ancillaries are inadequate. Thesecircumstances inevitably result in poor quality data. The situation can be rectified by equippinggauging stations with appropriate instruments and ancillary equipment; making proper provisionfoI maintenance of the equipment; training staff to calTy out measurements according to clearlydefined procedures; and providinig an appropriate system of supervision by properly trained staffwho are also responsible for validating the measuremenlts and discharge computations.

2. 1 Financial Constraints. These constraints are felt mainly in inadequate capital investments inoffices and office equipment, laboratory buildings and equipment, and transport for field staff.Recurrent budgets are consumed mainly by personnel emoluments with limited funding forhydrological activities and effective maintenance of monitoring equipment. This is most evident insome state agencies, and particularly those involved in surface water hydrology. As the latterrarely have autonomy, their activities are usually the first to suffer when budgets are constrained.The solution lies with creating agencies that are mandated only for hydrological tasks and thenproviding them directly with budgets that are adequate for those tasks.

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Project Strategy and Rationale for Bank Involvement

2.12 Government Strategy. GOI regards the core elements of the proposed project as essentialinputs for implementing the National Water Policy. The policy states 'a standardized nationalinformation system (for water resources) should be established with a network of data banks anddata bases, integrating and strengthening the existing Central and State level agencies, andimproving the quality of data and the processing capabilities '. The longer term aim of GOI is toplan development of water resources on the basis of basin units, and the availability of reliable databases which are easily accessible to the planners and other concerned agencies is essential to properexecution of this task.

2.13 Bank Strategy. The Bank's policy paper "Water Resources Management" (1993), coveredall actions necessary to ensure the equitable, efficient and sustainable development of waterresources. From within this very broad coverage, the most important concepts that relate directlyto the objectives of the proposed project are that: water resources should be managed in the contextof a national water strategy which reflects a nation's social, economic and environmental objectivesand is based on an assessment of the country's water resources; and achievement of theseobjectives will require development of a comprehensive analytical framework for water resourcemanagement at the basin, region and national levels. The policy paper recognizes that inadequateand unreliable data may constitute a serious constraint to developing and implementing a country'swater resource strategy and to managing water effectively. The policy paper states:

'To meet these information needs, countries should: (a) define information requirements fornational water resources, taking particular account of the multiple demands for water; (b) reviewinstitutional arrangements linking the providers and users of data; (c) identify and implement newmechanisms for funding hydrological services, where such mechanisms are required to provideadequatefinancial resources; (d) select appropriate technologies for collecting data, particularlv dataon water quality and on groundwater, and for implementing user friendly data managementsystems; (e) establish national data banks for information on water resources; and (f) define thehuman resources needed for hydlrological information systems and provide education and trainingto ineet those needs'.

The major components of the proposed project are in accord with the Bank's requirements forimprovements to India's capabilities to collect, collate and disseminate information on surfacewater and groundwater hydrology and water quality. Similar recommendations were made in theIndia Irrigation Sector Review (1991) which explained that improved hydrological data wasessential for improved planning and design of water resource development on a multi sectoralbasis.

2.14 The Bank's policy paper indiL ates that Bank lending in the water resources sector will beseriously curtailed in countries where governments are not committed to implementation ofnecessary reforms to assure appropriate water resources management capability. It states:

Progress in implemeniting the priorities identified will be monitored through normal Bankinteractions with the country. If the absence of adequate progress on priority actions is judged toproduce serious misuse of resources and to hamper the viability of water-related investments, Banklending in this area will be limited to the provision of potable water to poor households and tooperations designed to conserve water and protect its quality without additionally drawing on acountry's water resourcesx.

11

Improving the quality and accessibility of hydrological data in India. as proposed under the project,would be one of several important priority actions that would have to be undertaken to improveIndia's water resource management capabilities in line with the Bank's policy requirements.

2.15 Rationale for Bank Involvement. As discussed above (paras 2.12-2.14), the project'sobjectives are in line with India's "National Water Policy" requirements, with the Bank's policy on"Water Resources Management". and with the strategy for India's water sector, developed withGovernment, in the "India Irrigation Sector Review". Previous experience indicates that anyattempt to improve the quality of hydrological data and its availability to users of the data as an add-on component of a construction-oriented project is not likely to be successful. A free-standingproject dedicated primarily to improvement of institutional aspects and staff skills in collection andmanagement of hydrological and meteorological data, and the systems by which the data is storedand made accessible to users is considered to have a high probability of success. The project'smain objectives are in line with the Bank's recent Country Assistance Strategy (CAS) (Report No.14509-IN, May 19, 1995 discussed on June 20. 1995) which supports the deployment of IDAresources in accelerating the development of human resources, and in supporting the sustainableuse of India's scarce water resources. India's interest in undertaking a hydrology project along thelines described in the report should be regarded as a 'window of opportunity' which should not bemissed.

III. THE PROJECT

A. Project Concept. Objectives and Scope

3.01 Project Concept. The project concept is to assist the Central Government and theparticipating State water resource agencies in the development of valid, comprehensive, interactive,easily accessed, and user friendly data bases covering all important aspects of the hydrological andmeteorological cycle, and to the strengthening of the capabilities of the institutions concerned. Thedata bases will therefore cover occurrences of both surface water and groundwater in terms ofquantity and quality, and hydrometeorological measurements. Provision of the data bases isregarded as a service to all legitimate entities involved in management and development of waterresources, and the range of information stored and its formatting and accessibility will be designedto meet the requirements of such users. The project would be supportive of GOI's stated objectivesunder the National Water Policy (para. 1.23), which has been endorsed by the States, of the Bank'sstrategy for India's water sector (expressed in the 1991 Irrigation Sector Review), and of theBank's general policy regarding water resources management and recent CAS published in 1995.

3.02 The responsibility for development and archiving of the data bases would reside withorganizations which are, to the extent practically possible, institutionally separated from useragencies. Special attention would be paid to standardization of criteria, processes and proceduresfor measurement of hydrological parameters and the arrangements made for storage and retrieval ofthis information so that data series of specific elements would be compatible.

3.03 Project Objectives. The main objectives of the project would be to improve the institutionaland organizational arrangements, technical capabilities and physical facilities available formeasurement, validation, collation, analysis, transfer and dissemination of hydrological,hydrometeorological and water quality data, and for basic water resource evaluations within theconcerned agencies at Central Government level and in the seven participating states. The nature ofthe project would demand significant technical assistance and training to support the improvementof institutional and technical capability objectives. The development of the data bases wouldsupport major aspects of India's National Water Policy, particularly with regard to water allocation

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and planning and management of water resources development at the national, state, basin andindividual project levels.

3.04 Project Strategy. The project would be structured as a six-year operation. The first yearwould cover mainly the elaboration and launching of the institutional strengthening program anddetailed preparation of work programs initiating training programs and procurement. In principle,most of the physical works and instrumentation for improving and expanding hydrological andhydrometeorological observation networks, water quality laboratories and provision of thecomputing facilities and communication systems for storage and transfer of data would be providedduring the first three years of the project. This would leave the last three years for testing the datacollection, storage and transfer systems in function and as a service to the various users of theinformation, and making necessary refinements to the system. However, it is recognized thatmany aspects of the project concept are complex and that implementation rates may differ inpractice, more than anticipated in some agencies. A 'Process Approach' (para. 5.01) will thereforebe applied to adequately address these considerations. This process approach provides thenecessary project implementation flexibility. Progress and proposed annual work programs wouldbe subject to an annual review process scheduled to fit with India's budgeting procedures (para5.21). Each annual review would be preceded by an Institutional Development Review of Statesand national level workshops to enable the necessary focus on institutional development and userneeds that are integral to the project. The review process would permit adjustments ofimplementation schedules to reflect user needs, institutional capabilities and actual progress madeby the concerned agencies, and would allow clients' feedback and lessons learned to beincorporated, as necessary, as the project proceeds.

3.05 Project Scope. The support that the project would provide to the concerned StateGovernment and Central agencies may be summarized as follows:

Project States

(a) Hydrometry and Data Management

upgrading and expanding the physical infrastructure for hydrometric activities related to thequantity and quality of surface water and groundwater resources and for monitoring ofhydrometeorological parameters through construction of observation site works andbuildings, and provisions of measuring instruments and equipment, and laboratoryfacilities;

- upgrading systems for collection, validation and processing of data on reservoir operationsand river diversions and return flows from surface water diversions and on groundwaterwithdrawals, through the provisions of buildings and measuring instruments andequipment;

- upgrading and standardization of data management facilities by establishment ofcomputerized data banks for the storage and retrieval, analysis and dissemination of datarelated to the quantity and quality of surface water and groundwater resources and formonitoring of hydrometeorological parameters, including provision of equipment andbuildings;

- provision of communication systems, including equipment and services to inter-connect theproject computerized data centers;

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provision and installation of instruments and equipment, and services to improve orestablish flood forecasting systems;

provision of instruments and equipment, and services for sediment surveys of reservoirs;and

carrying out of survey, investigation and design of hydrometric and hydrometeorologicalactivities.

(b) Institutional Strengthening

strengthening existing hydrological and hydrometeorological institutions in technical andmanagement areas through the provision of local training, incremental staffing and operationand maintenance, equipment and vehicles; and

provision of consultants' services, overseas training and study tours, and studies forinstitutional strengthening.

MOrR and MOWR Agencies

(a) Hydrometry and Data Management

upgrading and expanding the physical infrastructure for hydrometric activities related to thequantity and quality of surface water and groundwater resources and for monitoring ofhydrometeorological parameters through construction of observation site works andprovisions of measuring instruments and equipment, and laboratory facilities;

upgrading and standardization of data management facilities by establishment ofcomputerized data banks for the storage and retrieval, analysis and dissemination of datarelated to the quantity and quality of surface water and groundwater resources and formonitoring of hydrometeorological parameters, including provision of equipment andbuildings;

- provision of communication systems, including equipment and services to inter-connect theproject computerized data centers;

- carrying out of survey, investigation and design of hydrometric and hydrometeorologicalactivities;

- carrying out of research and development related to hydrometry, water qualitymeasurements and data processing; and

- upgrading calibration facilities through the provision of works, instruments, equipment andservices.


strengthening existing hydrological and hydrometeorological institutions in technical andmanagement areas through the provision of tiraining facilities, local training, incrementalstaffing and operation and maintenance, equipment and vehicles; and

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provision of infrastructural support for the National Water Academy of Pune, and theInstitute of Raipur; and

provision of consultants' services, overseas training and study tours, and studies forinstitutional strengthening.

IN41)

(a) Hydrometeorology and Data Management

upgrading and standardization of data management facilities by establishment of computerizeddata banks for the storage and retrieval, analysis and dissemination of data related to monitoringof hydrometeorological parameters, including provision of equipment and buildings;

provision of equipment and services to inter-connect the project computerized data centers;

canying out of survey, investigation and design of hydrometeorological activities;

upgrading calibration facilities through the provision of works, instruments, equipment andservices; and

carrying out of research and development related to hydrometeorological measurements and datamanagement.


- strengthening IMD's technical and management capabilities through the provision of trainingfacilities, local training, incremental staffing and operation and maintenance, equipment andvehicles to assist IMD in providing technical support to the Project states, MOWR, and MOWRagencies in (i) upgrading and expanding the physical infrastructure for monitoring of hydro-meteorological parameters; and (ii) strengthening related institutional arrangements; and

- provision of consultants' services, overseas training and study tours, and studies forinstitutional strengthening.

The project activities are summarized below (management features at Chapter V) and described inthematic Annexes 3 to 11 of this report and the detailed work programs and the related implementationschedules of the participating agencies are given in the Annexes.

B. Detailed Features of the Project

Surface Water Hydrology (US$ 31.3 million, 22.0 % of base cost)

3.06 Upgrading and Expansion of River Flow Observation Facilities (Annex 3). The CWCmaintains a nation-wide network for measuring river flow characteristics in all major basins. Stateagencies maintain networks on river systems which flow within their jurisdictions. Most stations arepermanently manned. At most regular gauging stations, measurements are made of the river stagelevel using a staff gauge and of the instantaneous discharge by current metering. Continuous recordsof river stage are collected at some stations using a water level recorder installed in a stilling well.Some observation sites are equipped to sample the stream flow for measurement of the suspendedsediment load and/or to determine the chemical quality of the water. Some state agencies maintainstations where only stage level is observed and discharge is computed from a rating curve.

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3.07 The project would upgrade and expand the river flow observation networks in the participatingstates. This would include improvements to the existing stations in the CWC and state agencynetworks by provision of additional, or replacement of existing, measuring equipment, and byexpansion of all the state agency networks by installation of new stations. To finalize the annual workprograms, provision is made for carrying out some additional survey, investigation and design of theexisting and new networks. The existing networks in the participating states comprise 235 stationsmaintained by CWC and some 787 stations under the concerned state agencies. The total number ofstations under state agencies would be increased to about 1096 under the project. Annex 1, Table 1shows a breakdown of the above totals by states, agencies and parameters observed for the existingand improved observation networks.

3.08 Every observation station has site specific characteristics relating to the river geometry, the rangeof flow conditions to be observed, and how measurements are made. Where available andappropriate, bridge sites are used for making measurements. At other locations, cableways with winchand cradle or boat are installed or powered boats are used independently on large rivers. Flow velocitymeasurements are typically made using standard cup-type current meters. Propeller-type currentmeters are required when velocities are very high. Pigmy-type current meters are used to measure lowvelocities where river depths are very shallow and observations can be made by wading. River depthmeasurements may be made by sounding rods or echo sounders, as appropriate. Punjab-typesamplers are most commonly used for taking samples for suspended sediment analyses. The types ofmeasuring instruments and other equipment for improvement and expansion of the CWC and stateagency river flow and sediment observation networks are shown with cost estimates in Annex 2. Table2, Part A, discussed in general in Annex 3 of this report, and for individual agencies in Annexes 15,and 20 to 26.

3.09 Improvements to Surface Water Laboratory Facilities (Annex 5). Four basic types of laboratoryfacilities are recognized: (a) Level I laboratories which are located at flow gauging sites wherechemical quality of the water is monitored and equipped to measure unstable parameters - EC, pH,total dissolved solids (TDS), dissolved oxygen (DO) and temperature (one laboratory may serve twoor three sites); (b) Level II laboratories are equipped to analyze water samples for some 29 basicparameters covering the main cations and anions and general water characteristics; (c) Level II+laboratories have capabilities for analyses of heavy metals and organic micro-pollutants in addition tothe basic parameters measured by Level II facilities; and (d) Level Ti laboratories with similar capacityto Level II+, but with more advanced and accurate equipment.

3.10 The CWC has established 131 river gauging stations in the project area where water quality ismonitored and, in principle, these sites should be equipped with Level I laboratory facilities. TheCommission has eleven Level II laboratories in the project area. These are located with divisionaloffices of which eight are under the jurisdiction of the South Central Region and three under theSouthern Region. The facility buildings are generally inadequate and most of the equipment hasexceeded its useful life. With the exception of Maharashtra, the state agencies concerned with riverflow hydrometry have made limited provisions for systematic collection of water quality data ordevelopment of their own laboratory facilities.

3.1 1 Provisions are made under the project to improve CWC's surface water quality monitoringcapability by providing equipment sets and building for 75 Level I laboratories, nine Level IIlaboratories, and one each of Level II+ and III laboratories. All the facilities will be replacement itemsfor existing facilities which are regarded as inadequate. The concerned agencies in the participatingstates would be provided with 78 Level I, eight Level II and one Level II+ laboratories, most of whichrequire new buildings. In addition, 11 Level II and two Level II+ laboratories will be shared withgroundwater organizations. The distribution of laboratories between the state agencies are shown by

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Annex 1, Table 2. Details of the equipment provisions for each type. of laboratory are given in Annex2, Table 2, Sheets 7-8. Analyses to be carried out by each type of laboratory are discussed in Annex5.

3.12 Monitoring of Reservoir Operations. Diversions and Return Flows. A surface water data basefor a river basin would be incomplete without information on storage, releases and diversions atreservoirs, on diversions from rivers at barrages, weirs and pumping stations, and on return flows ofused water to the river system. The operating agencies at reservoirs and river diversion structuresusually maintain fairly good records of water movements at their facilities. In this situation, the task ofthe agency concerned with surface water hydrology would be to devise and implement a process forcollecting (and validating) the data from the operating agencies. The information could then beincorporated in the project data bases.

3. 13 Estimation of return flows from irrigation diversions presents a complex problem. Waste waterreturns by way of natural and artificial drains can include both return flow and excess rainfall runoff.Effluent groundwater to the surface water system may include both natural groundwater outflows andreturn flows of used water by way of the groundwater system. In general, serious attempts have notbeen made in India to quantify return flows to river systems from irrigation diversions, whichconstitute by far the largest use of surface water.

3.14 Most of the participating states have made proposals for improving their monitoring systems forreservoir operations. These involve provision of instrumentation to provide more accurate informationon reservoir storage and on releases to the river and to canals. Several states have proposed pilotprojects to obtain estimates of return flows from surface water irrigation schemes. The proposalstypically entail stream gauging operations on key elements of the natural drainage system whichevacuates waste water from an irrigation command area. The studies are described for individual statesin Annexes 20 - 26. Provision is made under the project to support implementation of the aboveactivities, and developing the water balances by which return flows will be evaluated will be supportedas an R&D activity (Annex 8).

3. 15 Establishment of Flood Forecasting Systems. Flood forecasting is a specialized activity ofhydrological science in that it demands that rainfall, river flow and any existing reservoir performancedata be analyzed for a river basin or sub-basin on a real-time basis during a flood event. This requiressecure and often dedicated communication systems--radio or space satellite--for data transmission tothe flood forecasting center where computer models may be used to integrate and analyze incomingdata on a continuous basis through the event.

3.16 Provision of a real-time flood warning system in Orissa for the Brahmani river delta and foroperation of the Rengali reservoir would be supported under the project (Annex 26). In the first stage,the observation network would cover only the two thirds of the basin area located in Orissa, butprovision would be made for a future extension of the network into the upper basin in Bihar. Thetelemetry would communicate river flow measurements at selected stations in the basin in real-time to adata analysis center. And the project would support development of a flood forecasting model for theBrahmani river system. The project would also provide wireless communications equipment andnecessary buildings to enhance the flood forecasting capabilities of the surface water organizations inAndhra Pradesh, Kerala, Maharashtra and Tamil Nadu, and a consultancy input is provided for thedevelopment of a flood forecasting model for the Tambraparani river system in Tamil Nadu.

3.17 Reservoir Sedimentation Surveys This type of activity does not fall strictly within the broadobjectives of the project to develop hydrological data bases with the concerned agencies in the projectarea. Nevertheless, the need to undertake sedimentation surveys in reservoirs was given a high

17

priority by all but one (Madhya Pradesh) of the participatincg states. The project would thereforesupport such activities.

3.18 The proposed programs for reservoir sedimentation surveys vary in scale between states.Equipment items required include: motor powered boats with trailers and vehicles for road transport;electronic and standard surveying equipment; trisponder satellite positioning equipment; echosoundingequipment; sediment sampling and analysis sets; digital planinmeters; and walkie talkie communicationsets. Computers and ancillaries are provided for computationis and graphics A list of equipment forthis project component is given with detailed cost estimates in Annex 2, Table 1.

Groundwater Hydrology (US$ 29.8 million, 21.0 % of base cost)

3.19 Improvement and Expansion of Groundwater Observation Facilities (Annex 4). The CGWBhas established a nation-wide network at about 16,000 locations for observation of groundwater levelchanges and taking water quality samples, and about 8.700 of the monitoring sites are in theparticipating states. The SGOs of the participating states have developed their own groundwatermonitoring networks to provide some 19,475 observation sites. Thus, within the project area of about0.98 M km2 , groundwater level observations are being made at some 31,090 locations, giving anaverage network density of about 60 km2/site.

3.20 The observation points are predominantly hand dug, open wells which are not owned by themonitoring agencies--tubewells represent only about six percent of all observation points. Except for afew, relatively small areas, the networks are designed to monitor the phreatic aquifer systems whichprovide by far the greatest proportion of the groundwater used for irrigation. Water levels aremeasured manually, except for a few tubewell locations where autographic water level recorders havebeen installed. Throughout the CGWB network, water levels are measured during fixed ten-dayperiods in January, May, August and November. State agencies follow individual practices--TamilNadu makes monthly measurements; in Andhra Pradesh, observation intervals by department staffrange from twice yearly in most of the network to bimonthly or monthly in a few wells; Maharashtraand Madhya Pradesh make measurements four times a year; Gujarat mainly makes pre- and post-monsoon measurements; most of Orissa's network is measured only pre-monsoon; and Kerala'snetwork is measured only pre-monsoon. The CGWB and most state agencies sample their networksfor water quality immediately prior to the monsoon, but the Oiissa and Madhya Pradesh agencies haveyet to start systematic monitoring of water quality.

3.21 The use of privately owned, open wells for water level and water quality observations hasbecome an increasing problem. Some tend to go dry before the end of the dry season and others fallinto disrepair after being abandoned by their owners. Both situations can cause the loss of animportant observation site. The CGWB has had the intention to gradually replace open wellobservation sites by purpose-built observation tubewells, but has yet to make significant progress inthis respect. The Karnataka state agency is adopting this practice. The project provides forreplacement of key open well observation sites by purpose-built tubewells.

3.22 As noted (para 3.20), the existing networks were designed mainly for monitoring the shallowaquifers which support most of the irrigation development. This will remain a priority, and provisionis made under the project for strengthening these networks by providing additional or replacementobservation tubewells. However, deeper aquifers are being exploited increasingly for communitywater supplies, municipalities and irrigation. Sometimes this exploitation is in fragile situations withcomplex water quality relationships adjacent to the coast. In these circumstances, networks ofproperly designed observation tubewells are required to monitor piezometric relationships and changes

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in the deeper aquifers and/or water quality relationships. The pri-Ject provides for such networkimprovements.

3.23 The present practice of relying mainly on manual measurements of water levels can produce dataof questionable accuracy for a variety of reasons. Moreover. the intervals between measurements oflevels on the CGWB networks and many of the state agency networks (para 3.20) result, at best, in avery crude hydrograph and, at worst, in a poor indication of high or low water levels. The provisionof purpose-built observation wells in the CGWB and state agency networks makes installation ofautomatic water level recorders a practical proposition at appropriate observation sites wherereasonable security can be assured. Autographic recorders with a float and clock mechanism have longbeen manufactured in India, but such instruments have well known problems for use on tubewells.However. a battery powered, digital recorders with a hand-held electronic instrument for data transferto a computer are now being manufactured in India. As the probe of the digital instrument can beinserted in a smaller diameter observation well than that required to take the float of an autographicrecorder, this results in a comparative cost saving. Digital water level recorders would be provided toenhance the quality of the hydrometric data from selected sites in the CGWB and state agencynetworks.

3.24 The improved CGWB network in the project area would comprise about 8,800 observation sitesof which some 2,500 (28%) would be observation tubewells of which about 1,700 would be equippedwith digital water level recorders. State agency networks would comprise about 20,500 observationsites of which some 5,242 (26%) sites would be observation tubewells, and digital water levelrecorders would be installed at about 3,790 of the tubewell sites. To finalize the annual GW workprograms, provision is made for carrying out some additional survey, investigation and design of theexisting and new networks. Annex 1, Table 1 B, shows a breakdown of the above totals by state area,agency and type of observation site for the existing and improved groundwater monitoring networks.Cost estimates for tubewells and recorders to be provided for CGWB and the SGOs are discussed inAnnexes 16 and 20 to 26. Details of the monitoring facilities are discussed in Annex 4.

3.25 Field Measuring Equipment for Monitoring. All observers involved in maintaining thegroundwater monitoring networks must be equipped with field instruments such as water levelsounders (biaxial electric tapes), portable EC and pH meters and thermometers. These instrumentsshould be a personal issue. Provision is made under the project for supply of the instruments in therequired quantities for use by the regional office staff of CGWB and by the state agencies. Portablecompressors or portable generators with submersible pumps are also provided for obtainingunstagnated samples for water quality analyses from observation tubewells

3.26 Improvements to Groundwater Laboratory Facilities (Annex 5). The CGWB has establishedlaboratories at all 12 of its regional headquarters, with the facilities at Lucknow being designated thecentral laboratory of the organization under a Director. The central laboratory is intended to have fullLevel III capabilities to carry out analyses relating to heavy metal and micro-organic pollution. Theremaining eleven regional laboratories (of which seven are in the project area) are intended to haveLevel II capabilities. Much of the equipment in all the laboratories has low serviceability and haspassed its useful life. Moreover, some of the buildings in which the work is now carried out areinappropriate. The creation of a CGWB regional office at Madras with responsibility for operations inTamil Nadu (para 5.04) will require the establishment of a laboratory facility to serve this office. TheCGWB Training and Research Institute to be established at Raipur (para 3.45) will also require a LevelI11 laboratory to support both its training and research activities.

3.27 Provisions are made under the project to improve the laboratory facilities at the 12 existing

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regional headquarters of CGWB2 and for the establishment of a laboratory to serve a newly createdregional office at Madras. The central laboratory at Lucknow will be fully equipped up to Level IIIcapability, and thus able to undertake a wide range of pollution related analyses. Reflecting thegrowing need for water pollution investigations in all the regions, the remaining regional laboratorieswil each be provided with an atomic absorption spectrophotometer and gas chromatograph to enablesome anorganic and organic pollution analyses, in addition to the standard equipment required forLevel II laboratories to upgrade them to Level 11+. The quantities of equipment to be provided assumethat most existing equipments require replacement. Provision is also made for improvement to existinglaboratory buildings and provision of a new laboratory building in Madras.

3.28 The SGOs of the seven participating states have each established several laboratory facilities.The standards of these facilities vary widely. Only a few can presently function as Level II facilities,although that is their intended standard. Most of the equipment has exceeded its useful life, and manyof the buildings are unsuitable for laboratory work.

3.29 The project will upgrade 32 laboratories established by the SGOs of the participating states andprovide four additional facilities for Madhya Pradesh and two in Kerala. Under proposedreorganizations in Madhya Pradesh and Tamil Nadu to establish water resource departments, 12facilities (eight in Madhya Pradesh and four in Tamil Nadu) will be used to provide information on thequality of both surface water and groundwater. The remaining 26 laboratories will be used exclusivelyfor groundwater analyses. One laboratory in each state, located in the state capital, will be upgraded toLevel II+ category with equipment for pollution investigations. The remaining laboratories will beupgraded to Level II facilities. It has been assumed that most existing equipment requires replacement.Provision is also made for constructing 12 new laboratory buildings replacing 13 existing laboratorybuildings and for improvements to the remaining seven laboratory buildings. The distribution betweenagencies and states of the laboratories to be provided is shown in Table 2 of Annex 1. Details ofequipments to be provided and analyses to be carried out at each laboratory type are given in Annex 5.

Hydrometeorologv (US$ 4.2 million, 3.0 % of base cost)

3.3() The IMD, CWC and various state agencies (including all the state agencies involved in surfacewater hydrometry excepting Orissa) have established networks to measure rainfall. All rainfall stationsare equipped with standard rain gauges (SRG) and provide daily rainfall data. A relatively smallproportion (18%) of the rainfall stations are also equipped with] autographic rain gauges which provideinfoTmation on rainfall intensity and duration. The IMD maintains a network of climatological stationswhich are fully equipped to World Meteorological Organization (WMO) standards with eye-readingand autographic instruments for observation of all standard climatic parameters, including rainfall. Thestate agencies involved in surface water hydrometry in Maharashtra, Gujarat and Tamil Nadu have alsoestablished climatic station networks. In addition to observing rainfall, the stations are generallyequipped to measure parameters for calculation of evapotranspiration. However, equipmentprovisions are variable. Gujarat has installed five automatic weather recording stations equipped withrainfall, wind speed and direction, solar radiation, temperature, humidity and evaporation measuringsensors, and Orissa is in the process of procuring three such facilities for installation at remote sites.

3.31 Table I of Annex 6 lists the numbers and types of rainfall and climate observation stationsmaintained by the agencies in each participating state, and indicates the improvement to the networksproposed to be undertaken by the project. It should be noted that the improvements proposed relate tothe networks maintained by CWC and the state agencies responsible for surface water hydrometry.

2 The need for improvements to laboratories at the five facilities located outside the project area is as critical as that ofthe laboratories in CGWB Regional Offices located within the project area.

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The proposed improvements cover both the rain gauging and manned climate station networks, and inMaharashtra and Tamil Nadu include installation of automatic weather recording stations. The projectalso makes provision for repair/replacement of faulty equipment at existing observation sites. Becauseof the unknowns related to the existing hydrometeorological facilities not under IMD control, provisionis made for carrying out some additional survey, investigation and design of the existing network ofclimatological stations and rainfall gauges.

3.32 Upgrading of Calibration Facilities. The CWPRS and the IMD have facilities to test andcalibrate scientific instruments used for hydrometric and hydrometeorological measurements.Provision is made under the project to upgrade and improve these facilities to improve the quality ofthe work undertaken and to reflect the increased numbers of instruments which will have to be testingand calibrated on a routine basis.

Upgrading of Data Management Facilities (Annex 7) (US$ 18.8 million, 13.0 % of base cost)

3.33 General. This component would upgrade and improve data management systems employed bythe CWC, CGWB and the state agencies responsible for collection and storage of water quantity andquality data relating to surface water and groundwater resources and of rainfall and climatic data usingcomputerized systems. The IMD has a well established computerized system for handling the rainfalland climate data that it processes, but additional computing facilities will be provided for the nationaldata center at Pune and for the meteorological centers covering the participating states.

3.34 The CWC makes fairly extensive use of computers for storage and processing of thehydrometric data collected from its river gauging networks. Raw stream flow data are processed atdivisional offices on computers using software developed by CWC, and the processed data are thentransferred upwards on diskettes for storage on computers at the concerned regional offices and atCWC headquarters. The CGWB makes use of computers for storage and retrieval of raw groundwaterdata collected from its observation network in the regional and headquarters offices. The historical datais in the process of being computerized. In general, the state agencies responsible for surface waterhydrometry have made only Limited advances in using computers for data storage and processing. Incontrast, several of the SGOs of the participating states have stored their groundwater observationnetwork data on computers and have some programs for data processing. However, the data storageand retrieval systems that have been set up by the cenitral and state agencies are rarely compatible.

3.35 Establishment of Data Banks. The project plans to develop computerized data banks withinCWC, CGWB and the state agencies responsible lor surface water and groundwater hydrologyrespectively. Thus, each agenicy will have a data banking system for the data it collects. This placesresponsibility for verifying data and maintainiing the integrity of the information with the collectingagency. However, the agencies will use the same progr-ams for data storage. Communication linkages(satellite or land line) will be provided, as appropriate, so that data can be exchanged betweenconcer-ned agencies by electronic file transter. To this degree. the data bases would be semi-interactive.

3.36 Computerization) of the CWC data storage and processing system would start at the sub-divisional level which is where raw data first accumulates. The computer facility at the sub-divisionwill be used for storage of verified raw data of iiver flows and processing of this data. Copies of thisentire data base will be transferred by a dial-up NICNET linkage, or by diskette, to the controllingdivisional office for further verificationi. Copies of the processed data will then be transferred bydiskette or dial-up satellite commullication to the controllinig circle and regional offices. Each regionaloffice would create a data banking system cover-ing all surface water resources andhydrometeorological information collected by CWC units under its jurisdiction. Copies of regional

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office data bases would be transferred upwards to CWC headqualters by a satellite communication linkas part of the central surface water data bank.

3.37 The CGWB will establish computerized girotundwater data banks for storage and processing ofdata collected by each of the regional offices. In cases where the r eglonial office has a subordinate unitoffice, that office will be provided with computer facilities ftor storage and processing of all dataactually collected. Copies of this information will be transfelred into the regional offices' data banksby a dial-up NICNET linkage or by diskette. Copies of the data bases held in regionial office bankswill be transferred upwards to CGWB headquarters by a satellite communiication link to form thecentral groundwater data bank.

3.38 For the establishment of data banking systems for the surface water and groundwaterinformation collected by state agencies, entry of verified data into a computerized storage system willnormally be undertaken at divisional office level or equivalent. Copies of this information will then betransferred by a dial-up NICNET linkage or by diskette to the headquarters of the state agencies to beincorporated into the state water data banking system. The sul'iace water and groundwater data bankinesystems will be separate in all states even when the activities are canied out within a single HydrologyUnit, as in Madhya Pradesh and Tamil Nadu.

3.39 Hardware and Software for Data Centers. Similar computing facilities will be provided for thedata centers to be established in the headquarters of CWC and CGWB. The computer hardware willbe a network system based on a file server for data storage and retrieval connected to eight PCs andwith provision for connection to additional PCs. The system would run the specialized hydrology andwater quality data management programs selected for use in the water data centers and otherappropriate hydrology program and general purpose applications. Ancillary equipment would includemonitors, digitizers, scanners and plotters to assist in the production of maps - this is of particularimportance for the data center established at CGWB headquarters.

3.40 The computing facilities provided for the CGWB regional offices and the state centers forsuiface water and groundwater data will have similar capabilities. The computer hardware will also bea network system based on a file server connected to five PCs with provisions for connection ofadditional PCs. The system would run the specialized hydrology and water quality data managementprograms selected for use in the data centers and other hydrology program and general purposeapplications. Ancillary equipment to assist with map and graphics production would be provided forthe CGWB regional office and the state agency facilities. The CWC regional offices will be providedwith a pair of PCs plus ancillaries, such as plotter and printers, plus surface water and water qualitydata management programs and other specialized hydrology and general purpose software.

3.41 Divisional offices of the CWC and of the state organizations will enter verified data intocomputer systems for storage and tranisfer to data banks (paras 3.36-3.38). In CWC and in some stateagencies, there are intermediate command levels between the data collection units and the level at whichthe data banks are established. These need to have computerized filing systems for storage of datacollected within their jurisdiction. All data collecting and intermediate offices would be provided withtwo PCs of appropriate capacity, printers and data management software suitable to the function of theoffice. Where unit offices of CGWB regions exist, they will be provided with similar computingfacilities. Two PCs of appropriate capacity would be provided in all laboratories of Level II or LevelII+ (paras 3.09 and 3.22), together with a printer and software appropriate for use in water quality datamanagement. Level III laboratoijes will have enhanced computing and ancillary facilities.

3.42 Communication Networks for Data Transfer. Data transfer between central, regional and statewater data banks would be by satellite communication using India's NICNET system. Data transfer

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from computerized offices the data banking centers would also use the NICNET system with a backupusing diskettes (para 3.34).

3.43 The CWC headquarters in New Delhi, being the location of the central surface water data bank,will be provided with a NICNET ground station to provide communication links to its regional officesin Hyderabad and Coimbatore and to the surface water data banks with the concerned agencies of theparticipating states in Bhubaneswar, Hyderabad, Madras, Bangalore, Nasik, Trivandrum, Ahmedabadand Bhopal. All major cities in India now have a NICNET ground station. These stations will be usedfor linking the CWC regional office and state agency data banking systems to CWC's central system.The CWC regional offices and the state surface water data centers will be provided with modems anddedicated telephone lines to the NICNET ground stations. The CGWB headquarters at Faridabadwould be provided with a NICNET ground station to establish linkages with all of its regional officesand with the headquarters of the SGOs in the eight participating states. The CGWB regional office andthe SGO groundwater data centers would be linked to the local NICNET groundstation through amodem and dedicated land telephone line.

3.44 All data collection and processing offices below CWC and CGWB regional data centers andbelow state surface water and groundwater data centers would communicate with superior officesusing a dial-up modem connection to their local NICNET groundstation. If dial up access lines are notavailable or are of poor quality, data would be transferred by diskette.

Research and Development Activities (Annex 8) (US$ 1.1 million, 1.0 % of base cost)

3.45 The NIH is an apex agency of the Central Government funded through MOWR with a mandatethat places strong emphasis on hydrological research. The CWPRS has practical hydrological researchcapabilities and has particular expertise with respect to specialized instruments for surface waterhydrometry. The CWC and the state agencies responsible for surface water data collection undertakevery limited hydrology research that relates directly to project objectives. By contrast, the CGWB andsome of the SGOs of the participating states undertake groundwater research works, in addition totheir routine exploratory drilling, hydrogeological mapping and resource evaluation activities.Moreover, the CGWB is establishing a National Institute for Groundwater Research and Training(NIGRT) at Raipur., and funding to support this undertaking would be provided under the project.

3.46 The Hydrology Project (HP) would support demand driven applied research in all relevantaspects of surface water and groundwater hydrology and of water quality through funding specificallyidentified research studies which are approved by a Research and Development Evaluation Committee(RDEC) to be established under the project. The evaluation process is aimed at the applied researchactivities that may be undertaken by NIH, CWPRS, or any other qualified research agency, on behalfof the central and state surface water and groundwater organizations using funds provided by theproject.

3.47 As most of the applied research activities to be undertaken using project funds have yet to befully identified and approved by the RDEC, the funding for these activities is covered by a lump sumallocation of some Rs. 40.0 million (excluding physical and price contingencies) in the project budget.Some Rs. 5.0 and 15.0 million respectively support the NIH and CWPRS for their on-going R&Dprograms. The remaining Rs. 20.0 million will be placed in a project applied research fund to bedrawn on by qualified research agencies when a proposed study on behalf of a central or state agencyhas been approved by the evaluation committee and confirmed by the Bank. Some applied researchinputs to be undertaken by CGWB and the SGOs have been identified and their fundings are specifiedin the detailed cost estimates for the specific agencies.

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Institutional Support (Annex 9) (US$ 46.2 million, 31% of base cost)

3.48 The recipients of institutional support will be central and state surface water and groundwateragencies. Institutional capability needs to be strengthened for organization and management in generaland, in particular, for survey, investigation and design, and for the collection, validation, storage anddissemination of data (Annex 7). An incentive structure would be developed conducive to sustainableprofessional performance. Methods of supervision and quality control must be strengthened as well,to ensure data validity. Appropriate skills would have to be developed to operate the computing andlaboratory facilities provided by the project and to maintain the expanded hydrometric networks. Ahigh level of inter-agency coordination would be required for development of computerized data bankswhich are inter-active between data centers, and readily accessible by the concerned agencies and otherlegitimate users in the public and private sectors.

3.49 The project would finance institutional strengthening costs directly related to implementation andadministration of programs undertaken departmentally and through local consultants' services (forsome SID activities). For the first three years of the project period, almost all incremental operatingcosts relate to organizational strengthening, staffing and support for project implementation. It isanticipated that, from the fourth year of the project period, incremental operating costs would relatemainly to routine operation of the upgrading and expanded observation networks and data processingfacilities. The incremental O&M costs would be supported on a declining scale, including project staffand other inputs to support the new institutional initiatives to be undertaken under the project andtraining programs. To ensure sustainability of hydrological activities in the future after externalfinancing is withdrawn, Bank funding of O&M costs would be phased out during the project periodand substituted by government funding of O&M. An assurance was obtained from GOI and theparticipating states that they would provide in a timely manner all the funds needed for O&M of theproject. This funding would reflect the phasing-out of Bank funding and provide full O&M fundingonce Bank support is withdrawn. The O&M support would include provision of: office facilities,equipment and services; vehicles and their operational costs; consultancy services; and project-specificstaff training.

Training (Annex 10) (US$ 5.9 million,4.0 % of base cost).

3.50 The project would provide both formal training and on-the-job training, particularly for stateagencies. Though most of the training would be carried out by trained staff of the national and stateagencies. The NIH, CWPRS. IMD and the training consultants (para 3.51) would assist in runningcourses for training of trainers. The project would assist the CWC in the establishment of an academyfor teaching surface water hydrology which would become a source of training under the project forprofessionals involved in surface water hydrology and hydrometry. The project would also supportCGWB in the establishment of a groundwater research and training institute which is expected tobecome the main source of training for professional staff in hydrogeology. Sub-professional staffwould be given formal training in groundwater hydrology through courses which could be run usingthe facilities of the several Water and Land Management Institutes (WALMIs) in the project area.Specialized consultant services (para 3.51) would be directly employed on training-specificassignments. Provision is also made for training fellowships in foreign and Indian institutions,advaniced training in NIH, and for study tours in India and abroad.

Consultancy Services (Annex 11) (US$ 7.9 million, 5.4 % of base cost)

3.51 Consultancy services would be employed to assist the project implementation agencies atnational, regional and state levels. Local consultant services would be employed to assist in thesurvey, investigation and design of project works, facilities and services. In addition, the main

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consultants' services would consist of general technical assistance for project implementation, andspecific assistance in the project training activities (Annex I 1). The consultancy would be a jointteam of about 251 foreign consultant months and some 709 local consultant months of which about162 foreign and 596 local consultant months would be for general project assistance and 89 foreignand 1 13 local consultant months would be for training. The arrangements, specializations andscheduling for the consultancy are discussed in Annex 11. Further elaboration of international andnational consultancy details and adjustment as needed would be made during the "project launch"mission and in annual reviews. The main consultant teams would be based in New Delhi. Theywould be required to visit the participating states to support the local consultants posted in the capitalof each participating state to work with concerned state agencies and regional offices of the nationalagencies. An assurance was obtained from GOI that it would employ consultant services, not laterthan March 31, 1996 to assist with the implementation and supervision of the project, under termsof referenice satisfactory to IDA.

3.52 The main tasks of the general assistance consultanits would include: (a) general assistance tothe project coordination group and the national and state agencies involved, in both institutionaldevelopment and technical areas; (b) standardization of technical criteria and procedures relating toall aspects of hydrometry including water quality and suspended sediment; (c) review/preparation ofspecifications for specialized equipment items to be procured under the project; (d) selection ofhardware and software for data storage systems and other hydrological applications; (e) devisingmethods and criteria by which historical stream flow data may be adjusted and improved; (f) reviewof annual work programs; and (g) monitoring of project progress. The training consultants would beconcernied mainly with preparation of training course curricular, preparation of seminars andworkshops, provision of formal training of trainers from state agencies, and monitoring theeffectiveness of training activities. Local consultanits posted with the states would have similar dutiesto support the state surface water and groundwater agencies. Short-term foreign and localconstultants would be employed on special training and other technical assistance assignments.

C. Status ot Preparation and Implementation Schedule

3.53 Status of Preeparatiotn. T he project has been prepared by the central and state governmentagencies concernied, steered by MOWR, CWC and CGWB and with the assistance of the Bank,FAO/CP. the UK's Overseas Development Agency (ODA) and the Netherland's Directorate Generalfor Inter-national Cooperation (DGIS). An initial preparation report covering surface water andTrounJdwater proposals (including water quality) was submnittt-d by Government in July 1993. and anupdated proposal for groundwater was issued in October 1993. A revised proposal for groundwaterrelated activities by CGWB aund the SGOs was issued in July 1994. The IMD prepared its proposalin August 1994. Consultancy iniputs, financed by the Japanese General Trust Fund and the Dutchandi Danish TruLst Funids, were available from Octobei' 1993 thlough September 1994 to provide fortechnical review of the project proposals and to assist central and state agencies in finalizing theproject scope. Work programs for the first year of the project were reviewed during projectappraisal. Management and institutional arrangements were further reviewed subsequent to appraisalby the Bank, DGIS and ODA in consultationi with Government, and adjustments to reflect thisreview wvere also incorporated in the project design and its management features (Chapter V).

3.54 Implementation. The project implemeniting agencies are listed in Chapter 5 of this report,described further in Annex 9 andl detailed' in the respective Annexes. An assurance was obtainedfronm GOI and the participating states that they would implement the project in accordance withtechnical, finanicial, administrative, environmenital and hydrololgical practices, standards and criteriasatisfactor-y to IDA.

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3.55 The project investment program and implementation schedule are summarized in Annex l, Table4 and shown schematically in Annex 9, Figure 1. The annual investment schedule shown underTable4, Annex I would be subject to review during the annual project review process. Estimatedexpenditures and physical investments are shown by state and agency in Annex 1, Table 3. and byagency and component expressed as annual expenditures in Annex 2, Table 4. The estimatedexpenditures for each project agency by items in physical and financial terms are given in Table 1 ineach of the Annexes 15 to 26. These estimates are likely to vary by agency depending on theirimplementation progress and stage of achievement of their institutional development objectives. Themanagement process discussed in Chapter V provides the mechanism for steerage of the project andattainment of its institutional and physical development targets. The annual implementation review(para 5.22), and its supporting and preceding workshops and Institutional Development Reviewsallows the program planning process and implementation schedules for any agency to be updated andadjusted annually to reflect institutional and technical development progress in the previous year andadjustments to reflect the agencies water sector objectives and feed-back from state and centralauthorities and water sector stakeholder. An assurance was obtained from GOI and the participatingstates that they would: (i) undertake in collaboration with IDA, not later than October 31 of each year,starting October 31, 1996, an annual review of the project, and shall incorporate the findings of suchreview in work programs for the following year; and (ii) furnish to IDA for its review and comments,not later than December 31 of each year, starting December 31, 1996, work programs, cost estimates,and budget proposals for the project for the following fiscal year. Assurances were also obtainedfrom GOI and the participating states that they would make budgetary provisions sufficient toimplement the agreed work programs for the fiscal year FY 1995/96 and each subsequent fiscal yearthereafter until project completion.

D. Environmental Aspects

3.56 By improving hydrological data necessary for sound water planning, allocation and managementwhich is responsive to the country's physical, economic and environmental needs, the project wouldhave strongly beneficial impact on the sustainability of water resources development including itsenvironmental management. The negative environmental impacts of the project would be minimal,infrequent and temporary. The physical works are individually small and scattered, and do not causeany permanent disturbance. The construction of water gauging stations, observation wells,meteorological data collection sites, or buildings would constitute the maximum type of disturbanceenvisaged under the proposed project. In most locations, there would be some flexibility in the sitingof physical infrastructure to accommodate local needs. On the other hand, the beneficial effects ofhaving a reliable and accessible scientific data for future planning and management of surface andgroundwater resources will be substantial and far outweigh any such small and temporarydisturbances. Of special importance, the proposed strengthening of the water quality data base and theimportance given to water pollution would provide substantial environmental and social benefits to alarge array of development and preservation/conservation issues which at present cannot be effectivelyevaluated or managed because of the lack of reliable data.

IV. PROJECT COSTS AND FINANCING

Project Costs

4.01 Total project cost, including physical contingencies and expected price increases, is estimated atUS$ 162.4 million equivalent. The direct and indirect foreign exchange component is estimated atabout US$ 33.9 million, or about 21% of total costs. The cost estimates are based on July 1994 pricesand include local taxes and duties computed at about US$ 4.0 million. Cost estimates for works arederived from costs of activities recently completed by CWC, CGWB and state agencies, updated to

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reflect price increases. Cost estimates for equipment, materials and vehicles are based on recent pricequotations from suppliers, or prices of similar goods recently purchased, or being procured bv variousgovernment agencies. Consultant staff costs are based on experience with recent contracts forforeignand local consultant services in India. Physical contingencies to allow for possible quantity anddesign variations were applied at 10% of works, equipment and incremental operating costs, 5% fortraining activities and zero for consultancies and R&D activities. Price contingencies were applied tothe foreign exchange component at 1.5% in 1995, 1.8% in 1996, 2.6% in 1997 and 2.5% in 1998 andthereafter. For local costs, price contingencies were applied at 9% in 1995, 8.5% in 1996, and 8% in1997, 7% in 1998, and 6% in 1999 and thereafter. The cost estimates take into account the expectedchanges in the currency equivalent over the project period. Project cost estimates are summarized inTable 4.1 below and in Annex 1, Table 3 by States, agencies and components. The cost estimates arefurther detailed in Annex 2 and given by item for each participating agencies in the respected annexes.

Table 4.1 Suornn tsat. b/Item Description ary Local Foreign rowte FE T. ofl

(Rs. million) (USS Million) % Base Cost

A Civil WorksI SW Observation Sites 217.7 27.9 245.6 6.9 0.8 7.7 10 52 GWObservationTubewells 264.4 73.3 335.7 8.6 2.3 10.9 21 83 Buil&ngs 554.7 68.3 623.0 17.7 2.2 19.9 il 14

B Vebicles 124.2 53.2 177.4 4.0 1.7 5.7 30 4C Equipment and Materials

I SWNetworklEquipment 244.7 45.1 289.8 7.8 1.4 9.2 15 62 GW Network Equipment 146.0 27.4 173.4 4.6 0.9 5.4 16 43 HydromeL Network Equipment 57.7 10.2 67.9 1.8 0.4 2.2 18 24 Laboratory Equipment 63.2 12.3 75.5 2.0 0.4 2.4 16 25 Data ManagementHard/Software 317.2 230.6 547.8 10.1 7.3 17.4 42 126 Communication Equipment 22.3 22.2 44.5 0.7 0.7 1.4 50 17 Survey Equipment 39.3 19.3 58.6 1.3 0.6 1.9 32 18 Office&Training Equipment 60.7 10.7 71.4 1.9 0.3 2.2 15 29 R&D Equipment 5.6 4.2 9.8 0.2 0.1 0.3 43 0

e Consitant ServicesI Geneal Consultants 90.6 97.8 188.4 2.9 3.1 6.0 52 42 Training Consultants 11.6 48.5 60.1 0.4 1.5 1.9 81 1

F Research&Development(R&D) 24.0 2.0 26.0 0.7 0.1 0.8 # I* Training

I LocalTraining 171.8 0.0 171.8 5.5 0.0 5 0 42 Overseas Training 0.0 13.0 13.0 0.0 0.4 0.4 100 0

H Incremental Operting costsI Instituitional Support 321.1 17.5 338.6 10.2 0.6 10.8 6 72 Comsmunication Services 2.8 0.1 2.9 0.1 0.0 0.1 3 03 O&M support 864.9 172.1 1037.0 27.5 5.6 33.1 17 23

Total Baseline Costs 3604.5 953.7 4558.2 114.1 30.4 145.2 21 100

Physical Contingenies 303.8 62.0 365.8 9.7 2.0 11.6 17 8Price Contingencies 866.1 237.7 1103.8 4.1 1.5 5.61 27 4

Total Costs 4774.4 1253.4 6027.8 128.6 33.9 162.41 21 112Note: SW = urtacewater: GW = groundwater

a/ Including taxes and duties, estimated at USS 4.0 million equivalent. b/ rounded to one decimal place.

Project Financing

4.02 The proposed IDA Credit of US$ 142.0 million equivalent would finance about 90% of the totalproject costs net of taxes, or about 88% of total costs including taxes. It would finance 100% of directand indirect foreign exchange costs and about 84% of the local currency costs. GOI would finance the

27

remaining project costs of US$ 20.4 million from its development budget. The project financing planis summarized in Table 4.2 below.

Table 4.2 Project Financing Plan

Funding Source Local Cost Foreien Cost Total Cost Percentage--------------------US$ Million--------- - -

IDA 108.1 33.9 142.0 89GOI 20.4 au 11Totals 128.5 33.9 162.4 100

In this respect, prior to negotiations, GOI obtained an approval for the project of the ExpenditureFinance Committee (EFC) of the Ministry of Finance, and each of the participating seven statesconfirmed the financial clearance of their respective programs under the project. In addition, since thisis a project involving central agencies, GOI cabinet approval of the project would be obtained prior toBoard presentation.

Procurement (Annex 13b)

4.03 The procurement under the project would be undertaken by the implementing agencies atnational and provincial levels, as appropriate. To expedite procurement and promote thestandardization of specification, processes and procedures where possible, prior to negotiations, GOIwould cause CWC, CGWB and IMD to set up Project Procurement Committees satisfactory to IDAas detailed in Appendix 1 of Annex 13b. An assurance would be sought from GOI that it wouldmaintain the Project Procurement Committees with terms of reference and membership agreed withIDA.

4.04 The civil works (US$ 42.8 million), including construction of surface water observationstations. climate observation sites, observation tubewells and buildings, would be widely dispersedat many locations in the participating states. Works would therefore be procured by the concernedcentral and state agencies under LCB contracts acceptable to IDA up to an aggregate of US$ 28.5million and force account procedures acceptable to IDA would be used for contracts costing less thanUS$ 20,000 each, up to an aggregate of US$ 14.3 million.

4.05 Instrumentation and ancillary equipment and laboratory equipment (US$ 21.8 million) wouldbe procured partly following ICB procedures (US$ 13.9 million), and where available and readilyserviced locally and in contracts of less than US$ 200,000 equivalent, following LCB proceduresacceptable to IDA (US$ 4.7 million) and through local shopping procedures acceptable to IDA (US$3.2 million). Computers, ancillaries and software and communication equipment (US$ 21.6 million)would be procured partly following ICB procedures (US$ 17.0 million) and, where required, incontracts less than US$ 200,000 equivalent following LCB procedures acceptable to IDA (US$ 3.1million), with some propriety equipment and software directly purchased in accordance withprocedures acceptable to IDA up to an aggregate of US$ 1.5 million. Specialized survey equipment.office and training equipment and equipment of use in R&D studies (US$ 5.1 million) would berequired by scattered project offices in the States over the six year project period. The procurementwould therefore be, either by LCB contracts let by the concerned agencies (US$ 2.2 million), or localshopping procedures (US$ 2.9 million), acceptable to IDA. Vehicles (US$ 6.1 million) would berequired by each of the various implementing agencies and at various times during the life of theproject. The vehicles required for the first six months of the project (15% of total requirements)would be procured by the concerned agencies following local shopping procedures in packagesbelow US$ 50,000 equivalent, up to an aggregate of US$ 0.9 million. Subsequent procurement

28

would follow ICB procedures (US$ 2.5 million) and prudent shopping procedures acceptable toIDA, depending on the contract size, up to an aggregate of US$ 2.7 million.

4.06 Incremental Operating Costs (US$ 49.5 million) and training activities (US$ 6.4 million)would be provided using administrative procedures acceptable to IDA. Services related to researchand development (US$ 0.7 million) would be provided by the concerned agencies usingadministrative procedures acceptable to IDA. Consultancv services (US$ 8.4 million) would beprocured under "Guidelines for the Use of Consultants by World Bank Borrowers and the WorldBank as the Executing Agency".

4.07 The procurement arrangements are summarized in Table 4.3 below

Table 4.3: Procurement Plan alb/

Ref. Project Element ICB NCB Other c/ Total

- Works 28.5 14.3 42.822.8 11.6 34.4

2 Goods2.1 Vehicles 2.5 2.7 0.9 6.1

2.4 2.6 0.8 5.8

2.2 Equipment 30.9 10.0 7.6 48.529.2 9.4 Z7 45.7

3 Consultant Services

3.1 Policy Support 0.8 0.80.7 0.7

3.2 Implementation Support 3.4 3.43.3 3.3

3.3 Capacity Support 4.2 4.24.1 4.1

4 Training4.1 Local Training 5.8 5.8

5.7 5.74.2 Training, Study Tours 0.6 0.6

0.5 0.5

5 Research & Development 0.7 0.70.6 0.6

6 MiscellaneouFs6.1 Incremental St<ff & Operations c/ 22.8 22.8

18.9 18.96.2 Veh, Equip, Mat & Bldg. Mnt. 26.7 26.7

22.3 22.3Totals 33.4 41.2 K7.8 162.4

Bank Finzar-ieg <16 ?4.8 75.6 142.0Notes: (a) inclusive ot contingencies, taxes and duties; figures founded to one decimal point-

(b) italics indicate 13ank financing; (c) Including local & intemational shoppings, forceaccount, direct contracting, hiring of consultants, an(d "non-procurement' funded activities suchas salaries and overheads of incremental staff covered hy the project(c) including survey, investigation and design (estimated at 1 IS$ 4.0 nuillion).

4.08 Review of Contracts. All contracts for works or equipment estimated at US$ 200,000equivalent and above would be subject to the Bank's prior review. The first five contracts, both forworks and goods, irrespective of value, would be subject to prior IDA review. Contracts of lesservalue than US$ 200,000 would be reviewed by IDA on a post-award sample basis. Invitationdocuments, proposed awards and contracts for consultants' services valued at US$ 100,000 orabove for firms, or US$ 5.0(00 or above for individual consultants, would be reviewed by IDA.This would result in about 50% of the project procurement being subject to prior review. The nature

29

of the project, consisting of simple works and standard equipment, is such that a higher level of IDAreview would not have a significant impact on procurement quality.

Credit Allocation and Disbursements

4.09 Implementation Period. Disbursements under the Credit are expected to be completed byDecember 31, 2001. The disbursement profile for past investment projects in physical infrastructurefor water resources development in India has stretched over about eight years. However, theproposed project constitutes a six-year investment program to improve the capabilities ofhydrological agencies to collect, store and disseminate data and infoination. These activities are notexpected to be susceptible to the delays experienced in completing large physical infrastructureprojects. The schedule of disbursements is given in Annex 1, Table 5, and the detailedimplementation schedules of the project components indicate that this disbursement schedule isfeasible. The project completion date is September 30, 2001 and the closing date is March 31. 2(X)2.

4.1(0 Credit Allocation. The proposed allocation of the Credit and percentage of expenditures to befinanced are given in Annex 1, Table 6. Disbursements would be as follows: (a) 80% ofexpenditures on works; (b) 100% of foreign expenditures (CIF) for directly imported equipment,100% of local expenditures (ex-factory) for locally manufactured equipment, or 80% of locallyprocured goods; (c) 100% of expenditures for consultant services and training; and (d) forincremental operating costs at 90% until March 31, 1999, 75% until March 31, 2000, and 50%thereafter. With respect to item (d), almost all incremental operating costs until March 3 1, 1999relate to project implementation; thereafter the incremental costs relate mainly to operating andmaintaining completed systems.

4. 1 1 Disbursements. Expenditures on contracts for works, goods and equipment valued at lessthan US$ 200,000; for contracts for consultant firms and training services valued at less than US$100,000; for individual consultant services valued at less than US$ 50,000; for works executed byforce account; and for incremental operating costs would be disbursed against Statements ofExpenditures (SOEs). Disbursement for all other expenditures would be on the basis of fulldocumentation. Documentation for SOE expenditures would not be submitted to IDA for review, butwould be retained by the project implementation units and made available for inspection by IDAsupervision missions. Disbursements against SOEs are expected to amount to about US$ 80.0million equivalent, or some 56% of the Credit amount.

4.12 Retroactive Financing. To expedite the project start-up, IDA would finance retroactivelyproject expenditures incurred after March 31, 1995 to the date of Credit signing, up to a limit of SDR3.8 million (US$ 6.0 million equivalent), provided that procurement procedures acceptable to IDAwere followed. Expenditures in equipment, training and other preparatory activities and inci-mentaloperating costs would be eligible.

4.13 Special Account. To facilitate disbursements, a Special Account in US$ would be establishedin the Reserve Bank of India with an initial deposit of US$ 6.0 million (equivalent to about fourmonths of project expenditures). It would be used for all eligible payments made against alldisbursement categories. A monthly statement on the Special Account would be submitted to theBank by the MOF.

Accounts and Audits

4.14 For all Government agencies, each accounting section is headed by a qualified accountant whoreports monthly on budget and financial status. Therefore, the project would be subject to normal

30

Government accounting and audit procedures. The accounting procedures now in place are adequateto support SOE applications. Although annual audits are carried out in a timely manner, thefinalization is a lengthy process involving the presentation of the Statutory Audit Report to theLegislature. Therefore, it would be essential to have an independent auditor prepare an interimcertification of the annual financial statements. Such statements certified by the responsible StateAccountant General or his designee, supported by an itemized account, a summary of theexpenditures, plus the auditor's opinion and comments would be submitted to IDA as soon aspossible, but within nine months after the end of each fiscal year. An assurance was obtained fromGOI and the participating states that they would cause each project executing agency to: (i) maintainrecords and accounts adequate to reflect, in accordance with sound accounting practices, theoperations, resources and expenditures in respect of the Project; (ii) have the records and accountsfor each fiscal year audited, in accordance with appropriate auditing principles consistently applied,by independent auditors acceptable to IDA; (iii) furnish to IDA, as soon as available, but in any casenot later than nine months after the end of such year, a certified copy of the report of such audit bysaid auditors, or such scope and in such detail as IDA shall have reasonably requested; and (iv)furnish to IDA such other information concerning said records, accounts and financial statements andthe audit thereof as IDA shall from time to time reasonably request.

4.15 An assurance was obtained from GOI and the participating states that they would cause eachproject executing agency to: (i) keep all project related contract documents, documents related to theSOEs, and orders and receipts for at least one year after IDA has received the audit report for thefiscal year in which the last withdrawal from the loan account was made; (ii) maintain the SpecialAccount, including records and documentation of receipts and withdrawals, as deemed satisfactoryby IDA; (iii) complete annual consolidated financial statements of the project for independent auditwithin nine months of the close of each Government fiscal year; and (iv) undertake independentaudits of each year's consolidated project accounts, including the audits of SOEs and the SpecialAccount, and submit such audit reports to IDA within nine months of the close of each Governmentfiscal year.

V. ORGANIZATION. MANAGEMENT and IMPLEMENTATION

A. Process Approach

5.01 Given the complexity of institutional and management challenges, and the number of agenciesinvolved in the project, a flexible, responsive, approach would be appropriate. Projectimplementation and the interrelated strengthening of capabilities of each participating central and stateagency would be steered and managed through a "Process Approach"3. to project management. Theconcept of the approach is that, while the general objectives and direction of the project are defined,the specific work programs will need continuous monitoring, feedback from users and adaptations asexperience is gained. The project activities would be phased into manageable portions and a clear setof objectives for each year in light of overall objectives would be defined. By allowing changes inthe project process after each annual review and in the design of annual plans, a flexible strategy isenvisaged, responsive to technical and institutional development objectives, and user feedback.

5.02 The "process-approach" would ensure that participating institutions are fully involved in thepreparation of institutional strengthening programs and related annual project work programs. Theapproach would also ensure that staff of the agencies involved are encouraged to take responsibility

3 Elaboration of the project's organization and management features has been assisted by specialistsfrom DGIS (Netherlands) and ODA (UK).

31

for attitudinal changes and improvements in the performance of their organizations. Full participationof the staff will consequently contribute to the sustainability of the required institutional development.

5.03 The "process approach" is also characterized by built-in flexibility in project implementationand by the ability to learn and adjust through experience gained, progress made, and feed-back fromusers and stakeholder. Implementation of the project, including procurement and disbursement,would be planned and organized for the forthcoming year based on outcome of the feed-back on thepast year's experience, and tailored to each participating agencies' stage of institutional developmentand capability.

5.04 A flexible and process-oriented approach requires strong coordination of activities andmanagement of the project both at the Central and the State Government level. A strong steeringmechanism would be developed to enable the project to be well directed and controlled. The AnnualProject Review (APR) would provide an effective basis for an on-going dialogue between the Indianauthorities and the Bank about the physical and institutional progress made under the project and foradjustments in the work program as required (para 5.21).

5.05 The main elements of project management are, in summary:

(a) A "Hydrology Institutional Development Action Plan" (HIDAP) (para 5.15) would beprepared by each institution involved. The IDAP would be monitored through an annual"Hydrology Institutional Development Review" (HIDR) (para 5.16) focusing on themanagement, organizational, and institutional development aspects of the project to be carriedout by each state and central agency.

(b) Feedback on user orientation and satisfaction with hydrological information provision wouldbe obtained through establishment of Hydrology Data User Groups (HDUG) (para 5.17) atcentral and state levels with representation of all agencies which have a legitimate interest inthe output of the project. The conveners of the HDUGs would organize annualHydrology Development Workshops (HDW) (para 5.18).

(c) A National Coordination Committee (NCC) (para 5.10) would be maintained, including itsSecretariat which would be responsible for overall monitoring and evaluation.

(d) A State Project Coordinationi Committee (SPCC) would be maintained within eachparticipating state including a unit in each (para 5.11) responsible for monitoring andevaluation of the physical implementation and institutional development components of theproject.

(e) Annual Project Reviews (APR) (para 5.21) would be carried out by each participating stateand central agency using the HIDR's, hydrology workshop findings, and project monitoringinformation as key inputs. These key elements of the project management will be discussedand further detailed during the Project Launch Mission (para 5.23).

B. Implementation and Management Arrangements

Project Agencies

5.06 The project would be implemented by the concerned existing central and participating stateagencies. Project implementing agencies are the: Central Water Commission (CWC), CentralGroundwater Board (CGWB), Central Water and Water Research Station (CPWRS), and National

32

Institute of Hydrology (NIH) within the Ministry of Water Resources (MOWR); the IndiaMeteorological Department (IMD) within the Ministry of Science and Technology; and theGovernments of Andhra Pradesh (GOAP), Gujarat (GOG), Kerala (GOK), Madhya Pradesh(GOMP), Maharashtra (GOM), Orissa (GOO), and Tamil Nadu (GOTN) through their agenciesresponsible for surface water and groundwater hydrology. The existing and new organizationalarrangements of the participating agencies are described in Annex 9 and detailed in Annexes 15 to 26.GOI and each participating state would provide staffing, facilities, services and the other resourcesrequired to carry out the project in a manner satisfactory to the Association.

5.07 The work programs to be undertaken by each agency individually are clearly defined anddetailed in the respective annexes. In most respects, they are divided into activities in support ofsurface water hydrology and groundwater hydrology respectively. This reflects the fact that the mainimplementing agencies at the center--the CWC and CGWB--have mandates which define thisdivision, and most of the participating states have separate agencies responsible for surface water andgroundwater hydrology. The NIH would be responsible for some training activities and would beavailable for some of the R&D activities in the states (Annex 8). The CPWRS would provide advice,training and research on instrumentation and could also be selected to undertake other project R&Dactivities. The IMD would be responsible for survey, investigation and design, supervision andtraining for all aspects related to hydrometeorology.

5.08 Though the programs to be undertaken by each agency are individually defined, there isspatial overlap between some activities to be undertaken by the CWC and the state surface wateragencies and between the programs of the CGWB and the SGOs. This applies particularly to theupgrading and expansion of the stream flow measurement networks and the groundwater observationnetworlks respectively. Coordinated planning will be required to define the spatial disposition of thefacilities to be installed by individual agencies in order to avoid duplication and unnecessaryexpenditure. The CGWB Regional Office and the corresponding SGOs are well advanced indeveloping joint programs.

Project Implementation Arrangements

5.09 In each state, several central agencies and normally two participating state agencies will beinvolved in implementing the project, and similar and comnplementary programs will be implementedby central and state agencies in the same area. It has therefore been necessary to establishcoordinating committees at central and state levels to ass;st in management of the project. Thecommittees will be responsible, at their respective levels tor: (a) monitoring and evaluating the projectprogress and performance: (b) prepaiing consolidated annual progress reports for submission to theBank for review and comment; anid (c) collating anlual work programs developed by the projectcoordiniating committees of the participating agencies to be discussed and agreed with the Bank at theannual review of the project.

Project Coordination (Annex 9. Appendix I)

5. 1 () Central Coordination has been established. First, a National Level Steering Committee(NLSC). chaired by the Secretary, MOWR. with representations at secretary levels of allparticipating governments and central agencies has been formed in the MOWR. This Committeewould meet, as required, to resolve project policy and strategy and generic implementation issues.Second, under the Steering Committee, a National Coordination Committee (NCC) has been set up,chaired by the Member (RM). CWC. It would deal directly with the concerned central agencieswhich are within its jurisdictioln--CWC,CGWB,CWPRS and NIH--in matters relating to projectcoordination, and would act in an advisory capacity to the project coordinating committees at state

33

level. The IMD would be represented on the NCC and parLtcipate in technical and projectmanagement activities (para 3.40). The IMD would implement its program through its ownadministrative chain of authority. The CWC, CGWB, IMD and NIH will for-m project coordinatingcommittees within their agencies to manage their own specific programs. Third, the MOWR has putin place a Secretariat within the Ministry (under a Deputy Secretary) to assist the NCC in theundertaking of day-to-day management of the project. The Secretariat and other participatingagencies would also be assisted by consultants (para 3.51).

5.11 Project Coordinating Committees at State Level. In states where the surface water andgroundwater hydrology entities are placed within the jurisdiction of a single department--AndhraPradesh, Gujarat, Kerala, Madhya Pradesh and Tamil Nadu--the State Project CoordinationCommittees (SPCC) have been set up within, and report to, the Secretary of the controlling Irrigationor Water Resources Department. In states where the surface water and groundwater hydrologyentities are controlled by separate departments--Maharashtra, and Orissa--the state will decide how tocreate and where best to locate the coordination committee. An important function of the StateProject Coordination Committees will be liaison with the CWC authorities and CGWB regionaloffices that are implementing project activities within their state jurisdictions, and with NIH. CWPRSand IMD when their programs occur within state boundaries. An assurance was obtained from GOIand each participating state that they would maintain project coordination arrangements in a mannersatisfactory to the Association.

Organizational Framework

5. 12 The organizational and management challenges have been summarized in paras 2.05 to 2. 1 1.One of the important project concepts is that responsibility for basic data collection on surface waterand groundwater resources, establishment of national and state level data bases, and dissemination ofthis information to all legitimate user entities should, so far as is possible, be placed with agencies atcentral and state levels which do not have direct responsibilities for developing water resources. TheIMD fulfills these requirements perfectly as a central agency responsible for hydrometeorologicalinformation, and CWC and CGWB do not have direct physical development functions.

5.13 Major changes in organizational structures will not be necessary to achieve an acceptable levelof separation of responsibility for hydrological data collection, storage and dissemination, from theother responsibilities of the water user agencies. The two agencies with data base creation functionsat the center--the CWC for surface water and CGWB for groundwater---are non-user agenciesreporting to the MOWR. The SGOs of the participating states have the required level of autonomywithin their parent agencies to peiform their tasks with regard to groundwater data without excessiveexposure to outside pressures and bias. Some important organizational changes have been agreedwith state surface water hydrology units to achieve the necessary levels of independence. MadhyaPradesh has created a free-standing hydrology unit dealing with both groundwater and surface waterunder an independent CE in its DOWR. The reorganization by Tamil Nadu of its PWD under theTamil Nadu Water Resources Consolidation Project to form a DOWR will result in a similar free-standing unit under a CE with responsibility for surface water and groundwater hydrology. Thiscould be a model to follow in all states where groundwater and surface water evaluation entities arewithin a single agency. The organizations that will be in place to implement the state programs arediscussed in the state Annexes 20-26.

5.14 Although changes in the overall organizational structure of the agencies involved will not benecessary, there is substantial scope for institutional strengthening and development of their sub-entities implementing the HP. In particular, institutional capability needs to be strengthened for thecollection, analysis and dissemination of data, inter-agency coordination to ensure a broad use of

34

hydrological information, and the establishment of an effective working relation with stakeholderand users. Action plans will support the agencies involved in implementing the institutionaldevelopment in a structured and manageable way.

Hydrology Institutional Development Action Plan (HIDAP)

5. 15 An important element for sustainable and successful implementation and management of theproject will be the preparation of comprehensive action plans for each of the participating agencies.An Institutional Development Action Plan (HIDAP) will be based on the assessment of the capacities,potential and constraints of each agency with a view to identifying required resources, changes ofprocedures, or technical assistance which could usefully be introduced with support of the project tostrengthen institutional capabilities. The IDAP should present in summarized tabular form, indicatingthe problems identified, the corresponding objectives of the Hydrology Project, the measures to betak-en, the executing agencies concerned, an indicative timetable for the intended actions, the requiredbudget and need for technical assistance (i.e. training), and relevant performance indicators tofacilitate monitoring (in terms of outputs, key administrative steps or deadlines). The HIDAPs wouldbe submitted to the Project Coordinating Committees at central and state level for their scrutiny,possible amendment and approval. Details of the HIDAP would be reviewed and agreed at theProject Launch Mission.

Annual Hydrology Institutional Development Review (HIDR)

5.16. An annual Hydrology Institutional Development Review (HIDR) report would be preparedbased on results and recommendations of its preceding workshops and progress achieved inimplementation of IDAP separately by each central and state institutions involved in theimplementation of the Hydrology Project. The review would provide the mechanism for a specificfocus on the management, organizational and institutional development aspects of the project to beused for the annual project review purposes (before October). Details of the purpose and mechanismof HIDAP and the HIDR would be reviewed, further refined, and agreed during the Project LaunchMission.

Linkages to Data Users

5.17 There are several central agencies that use hydrological and climatic data and that are not underthe jurisdiction of MOWR. Similarly, many state agencies, other than those controlling the surfacewater and groundwater organizations, have use for the data produced. In addition, there areimportant non-government organizations which would have use for the data produced. Althoughthese agencies will be not directly involved in project implementation, they should be used in anadvisory capacity. Moreover, as the users of project data, they have a direct interest in this basicaspect of the project objectives. Thus, the MOWR and each of the participating states would set up aHydrology Data User Groups (HDUG), with representation of all the project implementing agenciesand any other agency which has a legitimate interest in the project's product (Annex 7, Appendix 1).This forum would be used to discuss interests of agencies and other users outside the jurisdiction ofMOWR and IMD, and its main task would be to agree on arrangements by which the requirements ofsuch interests could be met effectively by the project. Similar consultation will be organized throughstate level groups. In this respect, an assurance was obtained from the GOI and each participatingstate that, not later than December 31, 1995, they would cause each project agency to set up andthereafter maintain hydrology data user groups with membership and terms of reference agreed withthe Association.

35

5.18 The conveners of the HDUGs will organize Annual Workshops to obtain feedback from userson quality of service, type of demand, and satisfaction with existing arrangements. The HydrologyDevelopment Workshops (HDW) would be broad-based in representation, with particular focus onstakeholder and users and including the private sector, NGOs and academics, as well as usergovernment agencies. Details of this workshop will be reviewed, further refined, and agreed duringthe Project Launch Mission.

Project Monitoring

5.19 Monitoring in terms of both physical and institutional implementation, and systemperformance will be carried out by each participating agency. The overall monitoring of projectperfromance will be undertaken by the project coordination secretariats at the center and at statelevels. The NCC will have responsibility for compiling information received from the concernedcentral agencies and from the State project coordination committees in a form suitable for the annualproject review as well as management information useful to the implementing agencies. The CentralProject Coordination Secretariat would be manned with full time professional staff to design andmanage the monitoring systems, to guide and oversee the monitoring units at state level and preparethe consolidated progress report for the annual project review. Consultants will assist in the projectmnonitoring activities.

5.20 Semi-annual progress reports would be prepared for each participating state and for thecentral agencies involved in project implementations, collated by the NCC and submitted to the Bankfor review and comment. Each report would contain a brief description of the main events during thereporting period and would cover progress on: (a) physical aspects, based on procurement andconstruction plans; and (b) institutional aspects, based on the HIDAP mentioned above. In addition,a Project Implementation Review (in standard Bank format) would be submitted by GOI to the Bankno later than six months after project completion.

Annual Project Review

5.21 GOI and each participating state would carry out in collaboration with IDA, an annual reviewof the project, not later than October 31 each year (para. 3.55), starting October 31, 1996. Thefindings and recommendations of such review would be incorportated in the work programs of theproject agencies for the following fiscal year. The annual review arrangement would provideflexibility to amend central and state agency programs to reflect performance during the previousyear. and to incorporate into the programs any lessons learned in the course of the previous year.The National and State Project Coordination Committees would have responsibility for collecting andcollating the information presented foi review. The proposed work program for FY 1995/96 wasreviewed at appraisal and agreed at negotiations. The annual review process would be based oninformation collated from: (a) the Institutional Development Review; (b) findings from the HDUGworkshops; and (c) results of routine project monitoring.

5.22 The annual review of the third year of the project period would also serve as the project's mid-term review. Special attention would be given to recurring problems of implementation and to thenecessity of restructuring the project during mid-term as needed.

Project Launch Mission

5.23 A Project Launch/First Supervision mission including management and institutional as well astechnical specialists would be mounted within three months of Credit effectiveness to help the projectwith appropriate technical, management and institutional orientation. Particular focus would be

36

placed on assisting the project entities to further elaborate its process management arrangementsdescribed above and to review, revise as needed, and finalize consultant terms of reference.

VI. PROJECT JUSTIFICATION AND RISKS

Project Justification

6.01 Economic Justification. The project would generate substantial indirect benefits by improvingthe water resources and climatic data base of the participating states, and making data easily availableto legitimate users from computerized data banks. The project objectives are directly supportive ofstatements regarding water information systems in India's National Water Policy (paras. 1.23 and2.12), the Bank's recent water resources management policy statement (para. 2.13), and the IndiaIrrigation Sector Review (para. 2.13). In fact, reliable water data, with adequate coverage in content,time and space are the foundations on which all water resource planning, development andmanagement exercises must be based. Without substantial strengthening of the hydrological databases and making the data easily accessible to users, it is unlikely that the National Water Policy orthe Bank's Water Resources Policy can be successfully implemented in India.

6.02 Analytical Approach. Specific quantification of project benefits is not feasible because it isnot possible to estimate the value of India's existing hydrological data, or to quantify the marginalbenefit of any improvement to the hydrological data base resulting from project investments.Consequently. a conventional marginal economic analysis cannot be made for the project. Instead, a"risk assessment approach" has been adopted which calculates the value that a rational agent wouldpay to acquire a data base to make a sound and realistic development decision I At the margin, thepremise tested is that an agent would be indifferent between the marginal value of more informnationand the cost of acquiring it. The margin is taken as the estimated project costs in present value termsand then testing what indirect benefits or savings. also in present value terms, could result from amor-e informed decision-making process and would be needed to pay for the project cost.

6.()3 Indirect Benefits. Project justificationi depends on identifying and quantifying marginalreturns in indirect benefits (or savings in indirect costs) that would justify implementing andsustaining the improved data bases. In this respect, it is concluded that the economic and financialimpact of improved hydrological and hydrometeorological information can accrue in two classes ofdecision making in the public or private sectors: (a) investment decisions in which water resourcesavailability is a dominant determinant (i.e., irrigated agriculture, water supply and sanitation,industlial water use, etc.), and (b) operational decisions in existing enterprises in which water is anessential input to achieve predicted impact.

6.04 To pay entirely f(1r the project. the investment decisions in the public sector need save only0.6% of likely futuri-e investnmenlts in the sectors of irTigation, hydroelectricity power production,infrastructure such as bridges, water supply and sanitation, and many other areas affecting by riverlevels or flooding, etc. For example, the project costs would be paid for entirely through an annualsaving of only 1.3% of the likely investment expenditures in irrigation, flood control and waterconservation which could be achieved by, inter alia. reducing overdesign costs in critical investmentsin surface water structures such as dams, barrages. buunds. irrigation systems and command areas,major water supply. etc. In this respect, there are numerous examples in India and elsewhere of

The project econonfic justilication is 1baLsed on Lhe following detailed assessment: "NationalHydrology ProJect, An Econmic Appraisal", by London Economics, Consultants, October 1994(Commissioned by ODA, UK).

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discrete investments (many partly financed by multilateral and bilateral donors) that will not achievepredicted impact because water requirements have been either overestimated at the design stages orovercommitted due to subsequent development in the river basins concerned. Furthermore, withoutsound hydrological information, the consequences of having to make 'best guess' decisions onavailability, allocation and use of finite water resources is likely to become more damaging to theIndian economy as water becomes more scarce in many of the Indian river basins and the competitionbetween users increases.

6.05 The quantity and quality of water is a dominant determinant in enterprises generating some22% of the Indian economy (predominantly in agriculture, food, fishing and hydroelectricity powergeneration). If routine operational decisions in the public sector where water is a critical determinantimproved by only about 0.005% due to better quality of hydro-meteorological data, this would payentirely for the project. In fact, project costs would be paid for entirely through an increase of onlyone sixth of one percent (0.016%) of extra agricultural production in the eight participating states(which could be achieved through expansion of irrigated areas through water savings).

6.06 It is concluded that with very small improvements in the decision making processes related todevelopment of water resources and operation of existing development, the project investment toimprove and sustain hydrological data base is justified. The value of the extra and better dataobtained far outweighs the costs of the improved information base.

Risks

6.07 General and Institutional. A basic risk with a service project is that the service will not proveas useful as expected. For this project, there is a risk that user agencies will not use the improvedhydrological and climatic data, even when it is readily available. This risk will be naturallycontained and diminish over time by the increasing scarcity of water resources in India and thegrowing competition between users for these scarce resources. This situation will put increasinglystrong premiums on state governments and users to reap the benefits from better and more thoroughanalysis of water availability and water quality - which can only be done using an improvedhydrological and climate data base. In turn, GOI and donor agencies can be expected to increasinglyseek more resource information to evaluate development opportunities under conditions of increasingresource scarcity. As indicated in paras 6.04 to 6.06, only very small improvements resulting fromimproved water planning, allocation and management and investment decisions are required to justifythe investment under the Hydrology Project. Even substantial shortfall in the project's physical andinstitutional development objectives would likely still yield substantial benefits from whateverimprovements in the hydrological system that are achieved. Nevertheless, maximum achievementunder the project is desirable and is aimed for. Accordingly, to maximize the possibility to yield asfruitful an outcome as possible, and to help implement the project as near to its full potential aspossible and in a manner that will be sustainable after project completion, special managementfeatures have been built into the project emphasizing a focus on progressive institutionalstrengthening and continuous monitoring and feedback from stakeholder, and enabling adjustment ofthe work programs of each agency in line with lessons learned and feedback from users and policymakers. This is based on the "Process Approach" discussed at Chapter V, utilizing annualworkshops including stakeholder and policy makers, annual Institutional Development Reviews andaction plans feeding into preparation of each year's annual work program. This would be supportedby enhanced monitoring procedures and usage of development and impact indicators to provide focuson the ultimate usage of the improved hydrological service. This approach is also supported by thespecial inter-agency coordination arrangements provided for under the project, extensive consultancyand training in both technical and management areas funded under the project, and by othermanagement features and arrangements discussed in Chapter V.

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6.08 The technical risks are relatively small. All the proposed technologies have been tested andused outside India--and many within India--and proven effective. However, although the proposedtechnologies are generally accepted, they may be novel to some of the agencies and thus their uptakemay proceed slower than anticipated. This risk is also contained in the process approach whichenables a (rigorously managed and evaluated) flexible project planning with adjustable annual workprograms for agencies decided at annual review process (para. 5.2 1 ). The project would also containtechnical risks by: (a) screening through survey, investigation and detailed design; (b)standardization of data collection, validation and storage; (c) attention to quality control and tomonitoring and evaluation of all aspects of project performance; and (d) ensuring that lessons learnedare shared with all concerned agencies as soon as possible.

6.09 The environmental risks associated with implementing the project are minimal. The overallenvironmental impact of the project should be positive if the benefits of having reliable data for waterresources planning are taken into account.

VII. AGREEMENTS AND RECOMMENDATIONS

7.01 At negotiations, assurances were obtained from GOI and each of the participating states thatthey would:

(a) provide in a timely manner all the funds needed for O&M of the project (para 3.49);

(b) implement the project in accordance with technical, financial, administrative,environmental and hydrological practices, standards, and criteria satisfactory to IDA(para. 3.54);

(c) (i) undertake in collaboration with IDA, not later than October 31 of each year,starting October 31, 1996, an annual review of the project, and shall incorporate thefindings of such review in work programs for the following year; and (ii) furnish toIDA for its review and comments, not later than December 31 of each year, startingDecember 31, 1996, work programs, cost estimates, and budget proposals for theproject for the following fiscal year (para 3.55);

(d) make budgetary provisions sufficient to implement the agreed work programs for thefiscal year FY1995/96 and each subsequent fiscal year thereafter until projectcompletion (para 3.55);

(e) callse each project executing agency to: (i) have project accounts, including SpecialAccount, maintained and audited annually in accordance with sound accounting andauditing standards consistently applied by independent and qualified auditorsacceptable to IDA; and (ii) submit to IDA, no later than nine months after the close ofeach fiscal year, certified copies of the annual consolidated financial statements andSOEs together with the auditor's report (paras 4.14 and 4.15);

(f) maintain project coordination arrangements in a manner satisfactory to IDA(para 5. 11); and

(g) cause each project agency, not later than December 31, 1995, to set up, and thereaftermaintain, hydrology data user groups with membership and terms of reference agreedwith IDA (para 5.17).

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7.02 At negotiations, an assurance was also obtained from GOI that it would: employ consultantservices, not later than March 31, 1996 to assist with the implementation and supervision of theproject, under terms of reference satisfactory to IDA (para 3.51).

7.03 With the above assurances and understandings, the project would be suitable for an IDA creditof SDR90. 1 million (US$ 142.0 million equivalent) on standard terms with a 35-year maturity.

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