Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 21798

IMPLEMENTATION COMPLETION REPORT(IDA-24390)

ON A

CREDIT

IN THE AMOUNT OF SDR 80.7 MILLION (US$ 117.0 MILLION EQUIVALENT)

TO INDIA

FOR THE

BIHAR PLATEAU DEVELOPMENT PROJECT

January 31, 2001

Rural Development Sector UnitSouth Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 1992)

Currency Unit = Rupees (Rs)Rs. 26 = US$ 1.00

US$ 1.00 = Rs. 44.00Completion Year (June 2000)

FISCAL YEARApril 1- March 31

ABBREVIATIONS AND ACRONYMSBAU Birsa Agricultural universityBPDP Bihar Plateau Development ProjectCAS Country Assistance StrategyCCA Culturable command areaDOA Department of AgricultureERR Economic Rate of ReturnFAO/CP FAO/World Bank Cooperative ProgramFD Forest DepartmentGOB Government of BiharGOI Government of IndiaICB International Competitive BiddingMID Minor Irrigation DepartmentMTR Mid-Term ReviewNCB National Competitive BiddingNGO Non-government organizationNPK Nitrogen, Phosphorus and Potash FertilizerNPV Net Present ValueO&M Operation and MaintenancePHED Public Health Engineering DepartmentRCD Road Construction DepartmentRDC Regional Development CommissionerREO Rural Engineering OrganizationSAR Staff Appraisal ReportSCD Soil Conservation DepartmentSDR Special Drawing RightsTSP Tribal Sub-PlanWATSAN Water and sanitation associationsWHT Water harvesting tanksWUA Water users associations

Vice President: Mieko NishimizuCountry Manager/Director: Edwin R. Lirn

Sector Manager/Director: Ridwan AliTask Team Leader/Task Manager: Harideep Singh

FOR OFFICIAL USE ONLY

IMPLEMENTATION COMPLETION REPORT

INDIABIHAR PLATEAU DEVELOPMENT PROJECT

(Credit No. 2439-IN)

CONTENTS

Page No.1. Project Data l2. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 14. Achievement of Objective and Outputs 45. Major Factors Affecting Implementation and Outcome 106. Sustainability 117. Bank and Borrower Performance 138. Lessons Leamed 169. Partner Comments 1610. Additional Information 17Annex 1. Key Performance Indicators/Log Frame Matrix 18Annex 2. Project Costs and Financing 20Annex 3. Economic Costs and Benefits 22Annex 4. Bank Inputs 23Annex 5. Ratings for Achievement of Objectives/Outputs of Components 25Annex 6. Ratings of Bank and Borrower Performance 26Annex 7. List of Supporting Documents 27

Annex 8. Borrower Evaluation of the Project (unedited) 28

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not be otherwise disclosed withoutWorld Bank authorization.

IMPLEMENTATION COMPLETION REPORT

INDIABIHAR PLATEAU DEVELOPMENT PROJECT

(Credit No. 2439-TN)

Preface

This is the Core Accountability Implementation Completion Report (CAI) for the Bihar PlateauDevelopment Project in India, for which Credit 2439-IN in the amount of SDR 80.7 million (US$117.0million equivalent) was approved on November 19, 1992, and made effective on March 16, 1993. TheCredit closed on June 30, 2000, two years later than planned at appraisal. The final disbursement wasmade on January 18, 2001. Disbursement totaled to SDR 67.9 million (84% of the Credit), and SDR 12.8million is to be canceled.

The ICR was prepared jointly by Harideep Singh (SASRD) and John Weatherhogg (FAO/WorldBank Cooperative Program), and peer-reviewed by Syed Husain (EASRD) and Christine Cornelius(AFTR1). No comments were received from the Borrower on the ICR prepared by the Bank staff thoughGovernment of Bihar's views on the draft ICR were received from time to time and have been reflected inthe final ICR. The Borrower contributed to the ICR by preparing an Evaluation Report of the Projectwhich is attached as Annex 8. The June 15-22, 2000 ICR Mission Aide Memoire and the Financial andEconomic Analysis for the ICR are available in the project files.

Project ID: P010408 Project Name: BIHAR PLATEAU

Team Leader: Harideep Singh TL Unit: SASRD

ICR Type: Core ICR Report Date: January 31, 2001

1. Project Data

Name. BIHAR PLATEAU LIC/TE Number: IDA-24390Country/Department. INDIA Region: South Asia Regional

OfficeSector/subsector: Al - Irrigation & Drainage; AR - Research; TR -

Rural Roads; WR - Rural Water Supply & Sanitation

KEY DATESOriginal Revised/Actual

PCD: Effective: 03/16/93 03/16/93Appraisal: 05/01/92 MTR: 12/01/95 02/02/96Approval: 11/19/92 Closing: 06/30/98 06/30/2000

Borrower/lImplementing Agency: India/Govemment of Bihar, through the Regional Development CommissionerOther Partners:

STAFF Current At AppraisalVice President. Mieko Nishimizu Joseph WoodCountry Manager: Edwin Lim Heinz VerginSector Manager: Ridwan Ali Shawki BarghoutiTeam Leader at ICR: Harideep Singh Gallus M. MukamiICR Primary Author: Harideep Singh (Bank) and John

Weatherhogg (FAO/CP staff)

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=HighlyUnlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)

Outcome: S

Sustainability: L

Institutional Development Impact: SU

Bank Performance: S

Borrower Performance: S

QAG (if available) ICRQuality at Entry: U

Project at Risk at Any Time: Yes

3. Assessment of Development Objective and Design, and of Quality at Entry

3.1 Original Objective:

3.1.1 The overall objective of the project was to increase rural income and alleviate poverty of the tribalpeople in the underdeveloped southern plateau of Bihar state, which was linked to five development

objectives: (i) increase agricultural production; (ii) improve market access: (iii) introduce a participatoryand integrated approach to planning; (iv) improve access to potable water; and (v) strengthen the TribalArea Development administration model. These objectives were to be achieved through:

* making investments in infrastructure to facilitate delivery of agricultural services for increasingproduction and improving access to markets;

* strengthening planning, coordination and monitoring by the local administration;* expanding beneficiary involvement in project activities; and* promoting environmentally sustainable activities.

3.1.2 The project's development objectives and direction of assistance to the poor tribal population ofBihar matched Government of India (GOI) and Government of Bihar (GOB) priorities. Project scope wasquite ambitious covering an area of some 23,000 sq. kms. in 67 administrative blocks, including 7,370villages and a population of about 3.7 million of which over 80% belonged to scheduled tribes and castes.In line with both Government and World Bank development strategy the project placed emphasis onsustainable agriculture, water and rural development as key components for poverty alleviation. In thisrespect the project is also fully consistent with the 1997 Country Assistance Strategy (CAS). Bihar is oneof the poorest states in India with less than adequate project management capacity as demonstrated byprevious and other on-going Bank-assisted projects. Acceptable implementation performance has alwaysbeen a key challenge. This project was therefore ambitious in its expectation of satisfactoryimplementation but relatively modest in its scope.

3.2 Revised Objective:

3.2.1 Project objectives remained unchanged at the Mid-Term Review (MTR), although there was someadjustment in the size of the components.

3.3 Original Components:

3.3.1 The project consisted of five components, namely:* agricultural development (applied agricultural research and extension, improved crop varieties

and animal species, watershed development);* minor irrigation and drainage (lift and gravity schemes, including some smaller microlift

schemes);* rural roads (including bridges);* drinking water; and* project implementation support, including institutional strengthening of the Minor Irrigation

Department (for irrigation) and the Rural Engineering Organization (for roads).

3.3.2 The Agricultural Development component was small, accounting for less than 6% of project costand focused on funding the Birsa Agricultural University (BAU) to: test and improve crop varieties andanimal breeds; support adaptive research through on-farm trials, demonstrations and training; testimproved seed of rice, sorghum and millet; and pilot soil and water conservation in selected catchments.

3.3.3 The Minor Irrigation and Drainage component amounted to almost one third of project cost, andincluded: rehabilitation of about 5,000 ha of existing gravity schemes and construction of 7,000 ha of newschemes; rehabilitation of 2,500 ha of lift irrigation schemes and 500 ha of new schemes; construction ofabout 1,500 ha of small gravity schemes of sizes less than 30 ha each; construction of about 4,000 dugwells, each irrigating about one ha; and construction of about 690 water harvesting tanks (WHT) servingan area of some 3,500 ha. The total irrigated area to be rehabilitated or newly created by the project was

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estimated at about 24,000 ha. The component also included funds for constructing and equipping a designoffice and materials testing laboratory, providing equipment, transport, technical assistance, training andmeeting incremental operating costs.

3.3.4 The Rural Roads was the largest component, accounting for about half of project cost. It consistedof upgrading about 1,200 km of intermediate roads, tracks and bridges. Funds were included for roadmaintenance during the project period, consultant services for road survey, design, preparation of civilworks contracts and supervision of construction, equipment and vehicles for survey, materials testing andquality control, construction of an office, laboratory and workshop, and staff training.

3.3.5 The Drinking Water component at about 12% of project cost financed boring 13,060 wells andinstalling a hand-pump on each, providing equipment and chemicals to improve an existing water qualitytesting laboratory, transport, pump spare parts, formation of water user groups, and mechanics training.

3.3.6 The Project Implementation component provided about 1.5% of project cost to strengthen theRegional Development Commissioner's (RDC) office, including training and recruiting additional staff,providing vehicles and equipment, meeting operating costs, funding supporting activities bynon-government organizations (NGOs) and additional innovative schemes to be developed duringimplementation, preparing a training program for project staff, developing a monitoring and evaluationsystem and carrying out a baseline social survey. At the State-level the project financed vehicles, officeequipment and operating costs for the Development Commissioner's office in Patna, and provided funds toconduct studies intended to develop innovative activities in the project area.

3.3.7 Project design reflected the GOI and GOB policies, the Bank's development strategy, and was wellrelated to the achievement of project objectives. It also incorporated lessons learned from previous IDAassisted projects. The main problems of earlier projects listed in the SAR included delays in projectmobilization and procurement, poor quality design and construction, and inadequate maintenance of roadsand other infrastructure, institutional weakness, inadequate financial support by the State Government, andlimited beneficiary participation. These were also listed as risks for the project. To mnitigate these risks, theproject was designed (a) to be managed with reduced government involvement through extensiveparticipation of local communities (in planning of project investments, sharing a portion of the initialinvestment cost, and assuming full operating and maintenance responsibility following asset handover tothe user groups formed during project implementation); (b) to use extensive NGO support in irrigation anddrinking water components; and (c) to overcome departrnental weaknesses through use of technical designand contract supervision consultants in irrigation and rural roads components which would improvepreparation, implementation and supervision of these components, and also build capacity in thesedepartments to undertake future programs more effectively. These measures were to be furthersupplemented by thorough project preparation, emphasis on staff training, and a strong monitoring andevaluation system.

3.3.8 The Bank did not include in its preparation and appraisal missions a financial analyst or aprocurement specialist to undertake an in-depth reviews of the implementing agency's capacity (as is nowrequired). Consequently, project design was relatively weak in these areas. This weakness was furtherexacerbated by a failure to include a financial analyst on supervision missions during the first two years ofthe project. In particular, the project design (a) did not suggest a workable arrangement for adequate andtimely release of funds for project activities. Setting up a Steering Committee under the chairmanship ofthe Development Commissioner with participation from Planning and Finance Secretaries was not a veryeffective mechanism to ensure funds flow to the project; and (b) required the Project Director's position tobe filled by an officer higher in level only to the line department heads. The project should have required

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the incumbent to be sufficiently senior to the Deputy Commissioners too, who had the responsibility forcoordinating project activities at the district level. These two inadequacies resulted in slower than expectedproject implementation.

3.3.9 With the exception of the above two areas, the overall project design was responsive to thepotential risks identified from previous IDA assisted projects, and is rated as satisfactory.

3.4 Revised Components:

3.4.1 A number of changes were made to project components at the time of MTR, though the mainstructure of the project remained the same. The main changes were to:

* increase the size of the rural roads component. The road length rose marginally from 1200 kmto 1290 km, but the number of bridges expanded from 65 to 230 and total bridge length from4,780 m to 10,280 m since a number of missing link bridges were identified for inclusion.

* reduce the size of the agricultural development component by dropping eight of the twelvecatchment areas selected for soil and water conservation.

* focus mainly on rehabilitation of existing defunct schemes (with almost no irrigation) and dropdevelopment of new irrigation schemes.

* increase Birsa Agriculture University (BAU) involvement in the project by includingsub-components for tissue culture and mushroom spawn production (including construction ofa very fine Biotechnology Center on the BAU campus), floriculture, expansion of breeder seedproduction, and soil micro-nutrient analysis.

3.5 Quality at Entry:

3.5.1 Apart from the weaknesses noted earlier in terms of financial management and procurementassessments, and requiring the Project Director to be at a sufficiently senior level in the hierarchy, a keyrisk identified at design stage related to weak management of government departments and inadequateparticipation by beneficiary groups. The proposed risk mitigation approach required (a) thoroughpreparation of the first year schemes (using extemal consultants) to mitigate delays in start-up; (b)formation of, and fiull participation by, user groups in the irrigation and drinking water components for firstyear schemes; (c) appointment of technical and supervision consultants in the roads and irrigationcomponents before commencement of project implementation; and (d) identification of NGOs, assessmentof their capabilities, willingness of GOB to use these agencies, and formal NGO contracting for first yearschemes. These actions should have been completed before project effectiveness but not being required,took over two years to be completed during implementation, resulting in delayed start-up. Thus, while theproject was designed to respond to this key risk, its readiness for implementation was weak. Quality atentry is, therefore, rated as unsatisfactory.

3.5.2 No Quality Assurance Group (QAG) review of Quality at Entry (QAE) was carried out.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:

4.1.1 Overall Outcome. The project was reasonably successful in achieving its objectives. However,completion of the project required two years extension of the original Credit closing date and most of theproject's construction activities were completed in the last two and a half years of implementation. ByMarch 1997, four years after credit effectiveness, disbursement was only 17%, compared to the appraisal

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target of 72%. Due to delays in hiring consultants, late and inadequate budget releases, and failure to fillessential project staff positions, the project was rated a "problem project" during May-November 1997.Major effort by project management and Bank supervision teams since 1997 led to the achievement of mostproject outputs by the revised June 30, 2000 Credit closing date.

4.1.2 The overall development objective of increasing beneficiary incomes has been achieved. Farmincome is expected to increase by over 100% over pre-project level at full development. Per hectare retumsare expected to increase from US$108 (without project) to US$390-435 at full development. In terms ofreturns per labor day, income would increase from US$2.0 to US$3.5 for gravity and to US$3.3 for liftschemes. The achievement of the five specific development objectives noted in paragraph 1, and linked toproject components, is discussed below.

4.1.3 Increase agricultural production. Data collected by the project staff on benefits from minorirrigation indicate that, with assured irrigation water, farmers are interested in adopting improvedtechnology. The main changes in schemes already handed over to water users associations have beenincreased use of improved seeds and fertilizers, and increased cropping intensity, particularly in the Rabi(winter) and Garma (summer) season, including increased production of vegetables and other cash crops.The area under irrigation would increase by 36,600 ha. In the sample of some 30 irrigation schemes,cropping intensity has increased to 137% with project compared with 105% without project, with anexpectation of further increase over the next 2-3 seasons. Most of the increased gross cropped area hasbeen devoted to production of vegetables, potatoes, mustard, and wheat. While area under paddy andpigeon pea increased too, its share in the gross cropped area declined in relative terms. Crop yields haveimproved overall by about 20-35% but the most significant increases are seen in vegetables and paddy.Thus, despite an increase in overall gross cropped area and paddy yields, increase in production ofvegetables and wheat have overshadowed paddy production compared with appraisal estimates.

4.1.4 Improve market access. Development of the rural roads has improved farmers access to markets,particularly for sale of the increased production of perishable commodities such as vegetables, fruit andflowers. It has also improved accessibility for large areas of the Chotanagpur Plateau and the SanthalParganas, making it much easier for farmers to get agricultural inputs and extension advice, apart fromother social services.

4.1.5 Introduce a participatory and integrated approach to planning. The objective at appraisal of heavyreliance on devolved planning and implementation by communities has not been fully realized, althoughsome progress has been made towards achieving this aim. The main problems appear to have been the longestablished and recognized responsibility for the line departments to implement programs, a bias towardkeeping government funds for govenmment agency operation, a cautious attitude by GOB towards workingwith NGOs, especially since this also involved financing, and the poorly developed community institutionsin the tribal areas.

4.1.6 Improve access to potable water. This development objective has been fully realized - the target setat appraisal of supplying drinking water to a rural population of about 2 million has been realized.Additionally, there are reports of a sharp fall in the incidence of water-borne diseases in the areas whereproject-assisted hand pumps have become operational.

4.1.7 Strengthen the Tribal Area Development administration model. Increased devolution of decisionmaking and institutional strengthening including increased staff and training was expected to result in astronger administration for the tribal areas. The project has been successful in strengthening the office ofthe RDC, and implementation of the project has also left the Regional Engineering Organization (REO), the

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Minor Irrigation Department (MID) and the Public Health Engineering Department (PHED) stronger andmore competent than at project commencement.

4.2 Outputs by components:

4.2.1 Output indicators are presented in Annex 1, linked to project components and developmentobjectives. Appraisal or MTR estimates, compared with actual achievements, or estimates based onproject monitoring data and implementation experience, indicate that the project outputs met MTRestimates for all components, except rural roads (with a 90% achievement).

4.2.2 Agricultural Development. The main physical achievements of the component have been thesuccess of the BAU in (a) developing improved strains of cross-bred pigs and goats which are popular withfarmers, (b) establishing the six seed processing facilities with the arrangement for them to be run byfarmer cooperatives, with a combined capacity of around 3.5 ton/hour of paddy seed (or about 6 ton/hourof wheat seed), and (c) developing soil and water conservation works. For the latter it was originallyintended for 12 watersheds to be treated, two by the Soil Conservation Division of the Department ofAgriculture (DOA) and 10 by the district administrations. By MTR, the sub-component was well below itsoriginal target and little had been done by the districts. In view of the fact that there was already a majorwatershed management project being implemented in the plateau area at the same time, it was decided toreduce the target to four watersheds, all to be implemented by the Department of Soil Conservation. Thesefour watersheds cover an area of about 2,000 ha and activities have included crop demonstration, involving2,200 families, agro-forestry and dryland horticulture, including distribution of 66,000 plants, vegetativehedges on about 300 ha, check dams, silt detention dams and bio-mass management.

4.2.3 The seed sub-component has successfully established an integrated seed production system withBAU providing breeder seed, DOA using this to produce foundation seed, and contract farmers multiplyingthis to produce seed suitable for subsequent certification and sale. Technical plant operating andmanagement assistance is provided by the Bihar State Seed Corporation. Despite interruption of theprogram due to lack of a Director of Agriculture in 1998-99, some 216 tons of foundation seed have beenproduced in the latest kharif season. Pilot scale activities in floriculture and fruit tree planting have beenthe responsibility of the Department of Horticulture, and have been satisfactory in providing plantingmaterial and training to farmers, many of whom are women. With project finance, BAU has constructed aBiotechnology Center with laboratories equipped for tissue culture and mushroom spawn production. TheUniversity is also successfully developing floriculture activities. Overall the training programs in thecomponent have included 19,540 farmers in all 67 blocks, training for 1,248 field and extension staff atBAU, and training of 73 DOA staff at institutions outside Bihar.

4.2.4 Minor Irrigation and Drainage. Although project implementation has been much slower thananticipated at appraisal with over 70% of the gravity and lift schemes being completed only in 1999/2000,the overall physical targets have been achieved and the appraisal target of creating 24,000 hectares ofculturable command area (CCA) has been exceeded. Comparison of achievement and target for the variousschemes is as set out in the table on the following page.

4.2.5 The PIU estimates culturable command area (CCA) of 36,000 ha by July/August 2000. At presentsome 20,000 ha are actually under irrigation, and a further 10,000 ha are reported to be ready to be usedfor irrigated agriculture. No details are available for schemes under implementation by the districtadministrations. Cropping intensity of 137% on a sample of about 30 commissioned schemes comparedwith an SAR target expectation of about 130%. Some further expansion in cropping intensity can beexpected, particularly in the lift irrigation schemes where a profitable summer (Garma) crop can be grown.

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Considerable cropping pattern diversification is taking place with more HYV paddy and maize, potato, andvegetables (latter, particularly in the Garma season). Water Users' Associations (WUAs) have been formedin all the 424 schemes where works have been undertaken. Of the 417 gravity and lift schemes completed,about 292 schemes have so far been handed over to the WUAs for O&M responsibility. Of the 116 liftirrigation schemes handed over to the WUAs, many are already meeting their own fuel costs, but have yetto commence providing for maintenance in a formal and systematic way. Performance in sharing of cost ofrehabilitation has not been encouraging. At appraisal it was expected that beneficiaries would contributeabout 20% of the cost; this is however restricted to 2-5%, either as labor or cash. Beneficiaries of all 424WUAs have been trained, and about 100 WUAs have had a second round of training.

Planned ax Achi'evement as on Achie\ement at fullNMTR June 30. 2000 d.evelopmen'

/a (December31,

Number of SchemesRehabilitation of gravity schemes 245 240 245Rehabilitation of lift schemes 179 177 179Sub-Total 424 417 424Dugwells 4,564 3,521 /b 4,564 /bWater Harvesting Tanks (WHTs) 612 487 /b 612 /bOther schemes 315 181 /b 315 /b

/a SAR provided 15,000 hectares of CCA for lift and gravity schemes (without number of schemes),4,000 hectares (4000 schemes) for dugwells, 3,500 hectares for WHTs (690 schemes), and 1,500hectares for other schemes (without any indication of the number of schemes)/b For these schemes, the June 30, 2000 target achievement information is based on reports whichare at least 12 months old. Actual achievement is estimated to be close to 90% of the target, with fullachievement expected by December 31, 2000

4.2.6 Rural Roads. The scope of the component eventually attempted (excluding work not started due tolack of either land/forest clearance, design or funds), covered 1069 km of roads and 177 bridges andcauseways with a total length of 9,310 meters. Achievement at credit closing was about 95% for roads and88% for bridges, as shown in the following table.

Packages Road i Bndges Causeav ay-(kms ) Numbers ' lerers

A. Appraisal target 1,200 4,780B. Revised target at Mid-term 73 1,290 230 10,280ReviewC. Work awarded 66 1,183 218 9,750D. Work not started in 66 packages 31 440E. Packages frustrated due to 7 114 10 340insurgencyF. Work effectively taken up 59 1,069 177 9,310G. Work completed by June 30, 53 1,005 168 8,2132000H. Achievement as on June 30, 2000 90 94 95 88of work taken up (% of G over F)

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I. Work to spill over and expected to 6 64 9 (eight bridges 527be completed by January 31, 2001 and a causeway)

4.2.7 Drinking Water. The appraisal target of 13,060 pumps was raised at MTR to 15,542 tocompensate for failed borings. A total of 13,336 wells have been commissioned, indicating a reasonableand acceptable failure rate of not striking water of around 14%. Capacity building of user-based Waterand Sanitation Committees (WATSANs), and training of caretakers and mechanics has been taken up withthe assistance of some 20 NGOs with good results. A total number of 13,114 samples from commissionedwater sources were tested for potability. Only 358 samples were found to be unsuitable for drinking as perISI standard. It was also reported by the project authority (based on an assessment study of 15 hospitalsand Primary Health Centers) that there has been sharp fall in water borne diseases in the areas whereproject-assisted hand pumps have become operational. About 11,800 schemes have been handed over to theWATSAN committees by credit closing, and the balance of around 1,900 hand pumps are expected to behanded over by December 31, 2000. Many of these committees have already taken up maintenance of thefacility handed over to them, and have even started accumulating funds for future repairs. An impressive17,560 caretakers and 4,824 mechanics have been trained, and equipped with toolkits, to facilitatemaintenance of these facilities in the post-handover stage.

4.2.8 Project Implementation. Physical targets were small, and achievements were limited to provision ofvehicles and equipment to the Development Comnnissioner's office in Patna, the RDC's office in Ranchi,undertaking a staff training program and recruiting the services of NGOs. The component only partiallyachieved its objectives, since the budget for provision of management training was not drawn, and until thelast year no funds were provided to NGOs.

4.3 Net Present Value/Economic rate of return:

4.3.1 The overall impact of the project has been re-evaluated, and the economic rate of return (ERR)re-estimated using the latest information on prices, actual project costs, physical achievements, agricultureproductivity, and other accrued benefits. Detailed information on these analyses and assumptions areprovided in the Report on Financial and Economic Analysis (document in project files). Two scenarioshave been assumed in the re-estimnation of the ERR. Scenario 1 follows the SAR's approach, and includesonly the Minor Irrigation and the Rural Roads components. Scenario 2 includes Scenario 1, and theDrinking Water component as well as the link bridges sub-component.

4.3.2 The ERR of Scenario 1 was estimated at 27%, which can be compared favorably with 17% ofSAR's estimate. The increase of the overall ERR for scenario I is attributed mainly to the improvement inthe Minor Irrigation component with its ERR increasing from 13% (SAR) to 29% (ICR). Major factorscontributing to this higher ERR of the Minor Irrigation component are: (a) lower cost of investment as theproject focused only on rehabilitation of existing schemes; (b) larger irrigated area achieved; and (c) higherproportion of vegetable production in the farmning system. When the Drinking Water component as well asthe missing link bridges sub-component are added, the overall ERR drops to 24% (scenario 2). Comparisonof ERRs estimated at appraisal and ICR for all major components as well as the whole project issummarized in the table below:

SAR ICR

Minor Irrigation 13 29

Rural Roads 21 23

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Watershed treatment 13

Drinking water 1j 7

Missing link bridges 1_6

Whole Project (scenario 1) 1 7 27

Whole Project (scenario 2) l_ 24

4.4 Financial rate of return:

4.4.1 The project has provided good opportunities for wage employment to the rural communities in twoways: (a) direct employment of rural labor during implementation of the project; and (b) increased laborrequirement through irrigation and improved farming. During implementation of the project, it is estimatedthat about 19 million person-days were employed for the Rural Roads component alone. As for agriculturallabor required for irrigation and improved farming, it is estimated that the increase would be gradual andthat an increment of about 2.3 million person-days would be generated per annum at full development.

4.4.2 Farm income would be improved due to: increase in cropping intensities, increase in crop yields,and change in cropping patterns toward higher values crops represented by vegetable. It is estimated thatthe income before labor would increase from about Rs.5, 1 00 per hectare to about Rs. 1 8,000-20,000 perhectare at full development (Report on Financial and Economic Analysis - document in project files). Interms of returns per labor day, it would rise from Rs.88 to Rs. 159 for gravity and to Rs. 151 for liftirrigation. In addition to the positive impact on farmers in irrigated areas, there are also positive financialimpacts on farmers in general due to improved seeds and agriculture extension work.

4.5 Institutional development impact:

4.5.1 The funding provided by the project and the experience of project implementation havestrengthened the RDC's office and have increased the competence of the line agencies, in particular REO,MID and PHED. Technical assistance provided by the expert consultants financed by the project hasresulted in a good transfer of skills in contracting and tendering procedures, infrastructure design,construction and supervision. Some progress has also been made in strengthening community organizationsin the predominantly tribal areas. Formation of user groups for the drinking water component in some caseshas resulted in the groups maturing into self-help and savings groups with a much broader focus than merewell and pump maintenance. Maintenance of these schemes is ensured through more than 22,000technically trained caretakers and mechanics. Formation of water user associations (WUA) on minorirrigation schemes started late. Although some assistance in formation and training of WUA was provideby the consultants, there was a delay in recruitment of the supporting NGOs. Support is now beingprovided by three NGOs which have been contracted to continue their activities until end-March 200 1.Positive results are already visible in many schemes where WUAs have transfonned into effectiveinstitutions. These achievements, and the partial success the project has had in institutionalizing theparticipatory and integrated approach to planning, indicate substantial institutional development impact.

4.6 Environmental Impact:

4.6.1 The main environmental benefit has been the provision of safe drinking water to a rural populationof around 2 million, with subsequent very significant reduction in health problems. Risks of increasedincidence of malaria as a result of increased irrigation, and creation of borrow pits for road constructionidentified at appraisal, do not appear have materialized to any significant extent. Continued attention will

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be required with the drinking water component to ensure that the waste water is safely disposed of and doesnot provide a breeding ground for mosquitoes. Some felling of forest trees was reported in the MTR reportprepared by consultants (Report on Mid-Term Review of Bihar Plateau Development Project, AgriculturalFinance Corporation Ltd., December 1995) to accommodate road widening in forest areas, but this seemsto have only occurred in very isolated instances. The effect of the much reduced soil and water conservationsub-component has been positive in reducing erosion, moderating runoff and increasing water retention,and hence in enhancing the productive ability of the rainfed areas. An environmental report by consultantsin 1997 (Bihar Plateau Development Project Rural Roads Component: Environmental Review, ScottWilson Resource Consultants, October 1997) gave the project a positive environmental rating. The overallenvironmental impact of the project is positive, but rated as modest.

4.7 Other Outputts:

4.7.1 The project was successful in encouraging GOB to develop a Roads Maintenance Policy.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:

5.1.1 The problem of insurgency constrained project implementation in a number of areas, in somecases, leading to abandonment of road construction, and in many other cases considerably slowing theprogress. Four General Elections and two State Elections also disrupted project implementation. Steadydevaluation of the Rupee against the US$ (the Rupee devalued from Rs.26 per US$ at appraisal to Rs.44per US$ at ICR) made it possible to undertake a much larger rural road construction program withoutmajor funding difficulties.

5.2 Factors generally subject to government control:

5.2.1 Project implementation was seriously constrained by inadequate and late release of budget byGOB. Slowness in filling essential staff positions, over-frequent transfer of staff (In Chapter IV of theSAR, Agreements and Recommendations, para. 4.1 (b) it is mentioned that the Government would alsominimize staff transfers, although this did not subsequently appear as a covenant in the Credit or ProjectAgreements, or in the President's Report) and long delays in recruiting consultants and NGOs were alsoinstrumental in slowing project implementation. The main responsibility for implementation fell on theProject Director (PD) who was generally appointed at a grade equivalent to, or lower than, a DistrictCollector (DC), and was therefore able to obtain limited cooperation from the district administrations. Landacquisition for rural road improvement from private landowners and the Forest Department (FD) was veryslow. In the case of FD, by credit closing no agreement had been reached and consequently those sectionsof roads in forest areas, totaling some 65 km, spread over 18 blocks, as well as one bridge, have remaineduntouched, with consequent reduction in value of the whole road connection. The degree of managerial andfinancial autonomy of the RDC anticipated at project preparation and appraisal was never achieved, andflow of funds was a continuous problem (including difficulties due to lack of check drawing authority - inREO the Project Divisional Executive Engineer only had such authority from March 1995, more than twoyears after project start-up; also failure to fill senior posts had a simnilar effect, as for example when therewas no Director of Agriculture in 1998-99, which dislocated the seed production program). Timeliness offund release was also unhelpful, since budget was generally released only in July or August whereasconstruction work needed to be undertaken in April to June, before the onset of the monsoon.

5.3 Factors generally subject to implementing agency control:

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5.3.1 Lack of staff familiarity with IDA procedures for procurement and reimbursement slowed projectimplementation. Project management arrangements did not work as well as planned. As mentioned above,for most of the implementation period the seniority of the PD was inadequate to ensure full collaboration ofthe district administrations. From the line departments' viewpoint, the PD/PIU seemed to have too muchexecutive power, rather than mere coordination of activities and tended to assume responsibilities the linedepartments regarded as their own. Despite the original idea for the project to have its own independentmanagement, no separate Chief Engineer was appointed for the large road component, following thedecision of appointing external agencies for design and supervision. This responsibility was taken by theChief Engineer, REO, who also remained responsible for all other REO operations in south Bihar and wastherefore not able to give his full attention to project implementation. Project management throughoutimplementation followed a traditional pattern with little devolution of responsibility to districtadministrations or to community groups. Where devolution to districts was tried, as with the soil and waterconservation proposals, very little progress was made. Exceptions to this general pattern have been thesuccessful formation of drinking water operation and maintenance groups, and more recently, the formationof WUAs to operate and manage the minor irrigation schemes.

5.4 Costs andfinancing:

5.4.1 At appraisal, total costs for the project were estimated at US$132.2 million. This was to befinanced by contributions of US$15.2 million (equivalent) from GOB/ beneficiaries, and a Credit of SDR80.7 million (equivalent to US$117.0 million) from IDA. Preliminary estimates place the project cost asUS$121.4 million. GOB/beneficiary and IDA shares are reduced to US$14.7 million and US$106.7million respectively.

5.4.2 An important aspect to note is that despite the lower project cost in US$ terms, actual amount inlocal currency has increased from Rs.3,895 million at appraisal to about Rs.4,722 million. Most of theincrease was for rural roads (up from Rs.1,910 million to Rs.2,888 million) due partly to the increase in thephysical target at MTR and partly to cost escalation. Slight increase was also experienced for drinkingwater (up from Rs.422 million to Rs.537 million) due to the increase in the drilling targets resulting fromunsuccessful bores. Minor irrigation costs actually reduced from Rs.1,302 million to Rs.1,137 million duelargely to the early dropping of the development of new schemes, and focusing more on rehabilitatingexisting schemes at lower cost.

5.4.3 Of the Credit of SDR 80.7 million, actual disbursement totaled to SDR 67.9 million (84% of theCredit); undisbursed balance of SDR 12.8 million is due to be canceled. The Credit, equivalent of US$117.0 million at appraisal, is equivalent to US$109.2 million (sum of the disbursement of US$92.7 millionover the project period and the undisbursed balance of US$16.5 million at closing) due to the strengtheningof the US$ vis-a-vis the SDR. Due to expenditure (mainly on rural roads) being incurred post-Creditclosing, and also some expenditures remaining unclaimed due to some unresolved issues, disbursementtotaled to US$92.7 million against IDA share of US$106.7 million. These contractual obligations will nowhave to be financed out of GOB's internal resources, effectively increasing GOB/beneficiary share inproject costs from US$14.7 million to US$28.7 million.

6. Sustainability

6.1 Rationalefor sustainability rating:

6.1.1 Sustainability of the project components depends on the effectiveness of the arrangements made fortheir future operation and management. For the agriculture component (3% of project cost), arrangements

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have been made for the six seed processing units to be operated in future by farmer cooperatives, withtechnical assistance provided by the Bihar State Seed Corporation. Three of the six plants are alreadyfunctional with these arrangements which appear to be adequate. The animal breeding activities of BAUhave already produced improved breeds of pigs and goats which are proving popular with farmers. BAUhave successfully developed a second line of breeders competent to multiply the improved breeds forsubsequent sale to farmers on a commercial basis. The soil conservation component focuses on increasingwater retention on rainfed areas and conversion of gulleys into paddy land by provision of smallcheckdams/gully plugs. These activities are reported to be popular with farmers. The sustainability of thiscomponent is therefore rated as likely.

6.1.2 The minor irrigation component (25% of project cost) includes handover of the facilitiesrehabilitated to WUAs. As on October 31, 2000, about 75% of the schemes were transferred to farmersgroups; the process of handing over for the remaining schemes was expected to be completed by December31, 2000. Farmers in a large number of these schemes are already meeting the operating cost, althoughprovision for maintenance and replacement is not yet being made. A majority of the WUAs were registeredin 1997-98, and support was required to turn the existing groups of beneficiaries into proper WIUAinstitutions to operate and maintain the schemes, and to be fully self-financing. This was of particularimportance for the lift irrigation schemes. GOB formally recruited three NGOs in March 2000 (althoughthese agencies had commenced work earlier in January 2000) to provide further support to the WUAs onsome 308 prioritized schemes. Positive impacts of the NGO involvement were witnessed during the June2000 field visits, and further confirmed during October discussions with the project and departmental staff.With the underlying financial viability of these schemes, the active NGO involvement, which has beenarranged to continue providing support to user groups and to mobilize savings for maintenance for a 15month period, up to end-March 2001, and the encouraging initial evidence of functioning WlUAs comparedwith the situation in the earlier years, the likelihood of successful group operation with NGO assistance isstrong. Sustainability is therefore rated as likely.

6.1.3 For the rural roads component (60% of project cost), about half the investment cost of thecomponent is in bridges which are virtually maintenance free. The roads portion of the component willneed regular maintenance and repair if they are to continue in existence. These roads are of low-cost,low-traffic volume specification with the option of future upgrading to black-top standard. Funds allocatedfor maintenance by the project could not be used, particularly since with the approaching closing of thecredit all attention was directed at construction activities. GOB policy is that all roads of more than 20 kmlength and connected to main roads should be transferred to the Road Construction Department (RCD) formaintenance. At the insistence of the project, GOB has also adopted a Roads Maintenance Policy forimplementation. Project constructed hard crust murrum roads require application of murrum blindageevery year and the renewal of the top wearing course every three years. Cost of such maintenance isrelatively low of the order of Rs. 10,000 per km per year and renewal costing Rs.50,000 per km every threeyears. Total annual cost of road maintenance would be of the order of Rs. 15 million. One possibilitywould be for the work to be financed under the governnent's Employment Assurance Schemes (EAS) at thedistrict level, which requires about 30% of the budget to be devoted to maintenance of assets. The annualbudget in the 10 project districts (in which project roads are situated) for such schemes is about Rs. 1billion, Additional funds are also available from RCD and REO. GOB now needs to clearly spell out amechanism to put the institutional arrangement, the Roads Maintenance Policy, and the fund sourcestogether to evolve a Roads Maintenance Plan. At the ICR mission's final meeting the RDC indicated thatfunds for adequate road maintenance were available and that keeping the project-constructed rural roads ina good state would not be a problem for the state government. Though there is a risk that adequate fundsmay not get allocated for roads maintenance, the huge social and economic benefit accruing from thiscomponent, the intermediate nature of these roads, the relatively small amount required for their

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maintenance, and the assurances on the availability of funds at the district level give a sufficient level ofcomfort on their regular maintenance. Creation of a separate maintenance fund with regular transfer offunds would have been a more satisfactory arrangement. However, the move towards defining andprioritizing the rural roads maintenance needs under the Policy and the Plan, and identifying and settingaside the required funds at the district level for this purpose suggests a step in the right direction. Thecomponent's sustainability is therefore rated as likely.

6.1.4 The drinking water schemes (12% of project cost) are rated fully sustainable. The hand-pumpsused are relatively maintenance-free (even for those installed in 1995, no significant repairs have beennecessary), the Water and Sanitation Associations (WATSANs), mostly with women members, havealready started collecting funds for maintenance of the facility, and are in some cases, also beginning tomature into small credit self help groups. The maintenance requirement will be met by the cadre of trainedcaretakers and mechanics with the required toolkits.

6.1.5 The proiect implementation component allows for the termination of the PIU after completion ofthe implementation phase and handover of operation and management of the various components to theresponsible government agencies and associations of beneficiaries. Project management, procurement, andmonitoring and evaluation skills imparted to the project staff will be retained and be available for useelsewhere in the government after the PIU is disbanded.

6.1.6 On the basis of the above analysis, the agriculture and the drinking water components (15% ofproject cost) are clearly sustainable. There could be some element of uncertainty in the minor irrigationcomponent (25% of project cost) but given the basic financial viability of these schemes, and the alreadywitnessed positive outcome of the NGO involvemnent, there is good reason to believe that this componentwould be sustainable with group effort. Maintenance of rural roads could have been a matter of concembut on a balanced consideration of the share of virtually maintenance-free bridges (30% of project cost), thesocial and economic benefit accruing from this component, the intermediate nature of these roads, themodest amount required for their maintenance, and the assurances on the availability of funds at the districtlevel, the risks and uncertainties associated with this component do not appear to be high. The project'soverall sustainability is therefore rated as "Likely".

6.2 Transition arrangement to regular operations:

6.2.1 The PIU is in the process of handing over the various components to the responsible governmentagencies or to beneficiary user groups. No formal project operation plan (POP) has been prepared but thePIU will continue to monitor the performance up to March 2001, based on indicators provided in theMonitoring & Evaluation Report prepared by the Agricultural Finance Consultants.

7. Bank and Borrower Performance

Bank7.1 Lending:

7.1.1 The project was identified with assistance of an FAO/CP mission in late 1990. FAO/CP alsoassisted in project preparation in June/July 1991. As set out in the preparation report (Report No. 100/91CP-IND 86, of 14 August 1991, India: Bihar Plateau Project, Interim Preparation Mission Main Reportand Annexes 1-8), the project was to include block development (block planning, adaptive research andtrials, extension and training, and NGO activities), hydro-power, irrigation, rural roads, credit, and projectmanagement. At appraisal, in May/June 1992, the main changes were to cut out the hydro-power and creditcomponents, introduce the drinking water component and increase the proportion of total project funding to

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be spent on rural roads. The proportion of funding for agricultural development remained small due largelyto the capital intensive nature of the rural roads, irrigation and drinking water components.

7.1.2 Although the problems with earlier IDA assisted projects and the correctly identified risks of weakmanagement of government departments and poor budgetary support were known at appraisal, it wasplanned to be minimized by the project being designed to be managed with minimal governmentinvolvement. This appears to have pre-supposed that there were already active social groups that would bestrong enough to take on the task of project implementation, while in fact, the community groups andNGOs were weak and poorly developed. Moreover the tradition, fully understood and widely accepted asthe normal situation, was that implementation of development projects was the responsibility of thegovernment line departments and agencies. Further, the Bank did not include a financial analyst orprocurement specialist in the appraisal mission which resulted in a deficient project accounting andauditing, and financial reporting system. There were also significant delays in seeking reimbursement fromthe Bank. Other mitigatory measures mentioned in the SAR were the advanced state of preparation of theproject, the scheduling of a mid-term review and an extensive monitoring and feedback system built into theproject. The preparation report made it clear that considerable further work was required to adequatelyprepare the project in this area, but the monitoring and feedback system was never well developed.

7.1.3 While much of the project design placed the project at risk to suffer the same problems as earlierIDA projects in Bihar, it did well to include technical assistance to be provided through consultants fordesign and supervision of construction of rural roads. Arrangements for project staffing and coordination ofgovernment agencies were also not well set up. Project implementation depended heavily on the ProjectDirector (PD), who though in rank higher than heads of departments was either at the same, or lower, levelthan the District Collectors (DCs), and therefore not best equipped to ensure good support for the projectfrom the district administrations. Similarly, the State Steering Committee and the Project ExecutiveCommittee only included representatives from those departments and agencies included in projectimplementation. Membership should have been widened to also include departments and agencies affectedby the project, in particular the Forest Department (FD). Very slow startup and weak borrowercommitment also suggest that the Bank could have done more to establish project readiness. Bankperformance in lending is therefore rated Unsatisfactory.

7.2 Supervision:

7.2.1 No provision was made for a project start-up workshop, although the initial supervision missionhad orientation and subsequent meetings with GOB covering provision of adequate budget support,delegation of full administrative and financial powers to the RDC, assignment of staff, and recruitment ofconsultants. Supervision missions in the early years of the project were sensitive and sympathetic to projectmanagement's difficulties, but could perhaps have been more forceful in encouraging GOB to take the stepsnecessary for project implementation, including provision of check drawing authority to appropriate seniorproject staff, timely recruitment of consultants and NGOs, and desisting from the disruptive transfer ofproject staff. The arrangement for a MTR report to be prepared by independent consultants financed bythe project was a good and helpful idea. IDA was sensitive and correct in agreeing the two one yearextensions of the credit closing date. This allowed the project to be brought to a reasonably orderly closingwith the bulk of the works completed and most of the original targets achieved. Project supervisionmissions were regular and appropriately staffed (except during the first four years of implementation whenno financial analyst was included in the mission; this was rectified from 1997 onwards), reportedimplementation progress adequately, and were realistic in their review ratings. An important contributionby the review missions was to create an awareness in the project irnplementing agency about the focus onachievement of development objectives and sustainability. Supervision mission members had a very

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positive impact in provision of technical guidance and assisting in good collaboration between GOB,project management and the technical implementing agencies. Overall, supervision performance is ratedSatisfactory.

7.3 Overall Bank performance:

7.3.1 The design deficiencies noted earlier and the over-patient approach of early supervision have beenovercome by appropriate action at MTR and subsequent aggressive supervision. The project has also beenable to achieve its main development objectives. The Banks overall performance can be assessed assatisfactory.

Borrower7.4 Preparation:

7.4.1 Judging from the Interim Preparation Mission report, GOB was less than fully active andcommitted in project preparation. GOB made no formal comments on the Identification Mission report andfew of the background studies requested by the Identification Mission were satisfactorily completed.Greater involvement of GOB staff in project preparation, particularly in design of project implementation,staffing, flow of funds and coordination arrangements could have resulted in a better and more appropriateproject design. Survey information and data provided to the roads and bridges design engineer were of poorquality and unreliable, and were a major reason for the subsequent difficulties and frequent need forredesign. Borrower performance in preparation is therefore rated unsatisfactory.

7.5 Government implementation performance:

7.5.1 GOB performance in project implementation suffered from regularly late and inadequate release ofbudget in earlier years of the project, late recruitment of consultants (at startup) and NGOs, delays infilling project staff posts and over-frequent staff transfers. Despite these serious shortcomings, it has to berecognized that with the two year extension of the credit closing date the project has more or less reachedits original development and physical objectives. This was possible due to significantly improvedcommitment from the government during the last three years of the project, including making substantialfund allotments for the project activities, placing the Additional Regional Development Commissioner asthe head of the PIU, and regular follow-up at the Development Commissioner level. Governmentperformance in project implementation is therefore rated as satisfactory.

7.6 Implementing Agency:

7.6.1 The implementing agencies were largely at the mercy of the State Government in regard to projectfinances and all important decisions regarding project implementation - including recruitment ofconsultants and NGOs. At appraisal it was planned that REO should second some of its staff to work withthe supervising engineering consultants, but this never happened. A chance for valuable direct transfer ofknowledge and increased competence of staff was therefore lost. Delays in effective project start-upresulted in much of the construction being compressed into the later part of the implementation period,including the two year credit extension. As a result it was not always possible to adhere to adequate qualitystandards of construction, as is evident from inspection of some of the minor irrigation schemes. Despitethese odds, it is to the credit of the implementing agencies that by the end of the extended implementationperiod, more or less all the physical works planned had been built. This was possible due to closemonitoring by the PIU staff, effectively functioning divisions in the roads, irrigation and drinking waterdepartments, good support from, and interaction with, the technical consultants, a considerably high level

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of commitment from the agriculture university, and good support from the contractor community. Theperformance of the implementing agencies is therefore rated as satisfactory.

7.7 Overall Borrower performance:

7.7.1 Based on the assessments presented above, the overall borrower performance is considered assatisfactory.

8. Lessons Learned

8.1.1 Based on the review of the project implementation experience, the list of lessons learned are asfollows:

* Readiness for implementation is crucial to completion of the project on schedule andachievement of its development objectives. Aspects such as preparation of sub-projects forinitial year implementation, appointment of consultants, assessment of NGO capacity and theirformal contracting, dissemination of project information, and voluntary formation of usergroups (at least from first year sub-projects) should precede credit/loan effectiveness, wherepossible.

* Infrastructure projects such as for the provision of drinking water to families, which have ahigh priority for local communities are ideal for encouraging responsibility for user groupoperation and upkeep. Such group formation often develops beyond purely O&M concems toembrace self-help or other much wider objectives.

* Where projects leave choice of individual items to be financed to be made duringimplementation (as in the case of roads packages) there needs to be a very careful system forscreening their suitability and ranking them so that they can be fully justified as priority needs.

* Particularly in the case of projects that are innovative in their organization/institutionalarrangements great care is required: (a) in the membership of project coordinating committees,(b) project staffing structure, and (c) flow of funds, in order to enable smooth and successfulimplementation.

* Close involvement of beneficiaries from project design through implementation is required foreasy implementation and improved sustainability.

* Close attention to development of sound plans for O&M from preparation onwards isnecessary in order to have confidence in subsequent project sustainability.

* Project staff should receive more substantial training in contract management, ICB and WBprocurement procedures at or before project commencement if a project is to make a good startand delays in implementation are to be minimized.

* Adequate attention and funding has to be given for monitoring and evaluation if projectmanagement is to have good information for project operation.

* As soon as minor irrigation schemes are ready to start operation, the govermnent supportservices to farmers should intensify their efforts so that full advantage can be taken from theimproved water availability.

* Appraisal and supervision missions should pay due attention to the Bank's fiduciaryrequirements and include a financial management specialist and procurement specialist at thetime of appraisal and periodically during supervision.

9. Partner Comments

(a) Borrower/implementing agency:

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GOB has been involved in the ICR review exercise. Their comments, received from time to time, wereconsidered for incorporation in the ICR. No comments have been received from the Government ofIndia on the ICR. The Borrower's evaluation is attached as Annex 8 to the ICR. This evaluation wasprovided to the ICR mission of June 15-22, 2000 as a draft. The Bank was informed subsequently toconsider this as GOB's final submission.

(b) Cofinanciers:

There were no co-financiers.

(c) Other partners (NGOs/private sector):

10. Additional Information

The June 15-22, 2000 ICR Mission Aide Memoire and the Report on Financial and Economic Analysis(with the attachments) are available on project files.

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Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome/Impact Indicators

Indicator Appraisal Actual/Latest EsdmateEstiuste

1. Increased agricultural production- Increased cropping intensity (%) 130 137- Increased cultivable command area (CCA) 24,000 36,600

(ha)- Increased crop production tons: 19,000 12,700

- Paddy 14,000 22,300- Wheat 2,800 1,300- Maize 56,000 137,000- Vegetables

2. Improved market access/employment- Improved market access Not specified Quantified PIU data on number of villagers

benefited of 4.2 million includes villagesbenefited by several road packages.

- Increased employment at full development 2.25 2.3(million man days)

3. Introduction of community participation- Water users' associations (WUAs) Not specified WUAs were formed for all 424 schemes; of the

417 gravity & lift schemes, 292 have been tumedover to WUAs for O&M.

- Water and sanitation associations Not specified 11,800 drinking water schemes handed over to(WATSAN) WATSANs by credit closing and balance of

around 1,900 expected by end December 2000;17,560 caretakers and 4,824 mechanics trained.

4. Improved access to potable water- Rural population per well/pump (No.) 1.50 1.50- Rural population expected to benefit 2.0 2.2

(million)

5. Strengthen tribal area development Not specified As a result of the project, administration has beenadministration model significantly strengthened particularly the

implementing agencies (Rural EngineeringOrganization, Minor Irrigation Department andPublic Health Engineering Department) workingin tribal areas.

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Output Indicators:

Indicator Appraisal (MITR Estimate) Actuall(Latest Estimate)

1. Agricultural Development Component- Seed processing facility capacity (tonlhour for Not specified 3.5

paddy seed)- Production of foundation seed (1999/2000 kharif Not specified 216

seasons (tons))- Training:

- Farmers (No.) Not specified 19,540- Field staff (No.) Not specified 1,248- Training of extension staff outside Bihar Not specified 73

(No.)

2. Minor Irrigation Component- Rehabilitation of gravity schemes (No.) 12,000 hectares (245 nos.) 240 (245)- Rehabilitation of lift irrigation schemes (No.) 3,000 hectares (179 nos.) 177 (179)

Sub-Total (No.) 15,000 hectares (424 nos.) 417 (424) a/- Dugwells (No.) 4,000 hectares/4,000 nos. (4,564 nos.) 3,521 b/- WHT (No.) 3,500 hectares/690 nos. (612 nos.) 487 b/- Other schemes (No.) 1,500 hectares (315 nos.) 181 b/- Culturable command area (ha) 24,000 (36,600) c/ 36,600

3. Rural Roads Component- Length of rural roads (kin) 1,200 (1,290) 1,005 (1,069)- Length of bridges (meters) 4,780 (10,280) 8,213 (9,310)

Of which:- Missing link bridges (meters) 5,500 4,980

4. Drinking Water Component- Wells sunk and fitted with handpumps 13,060 (15,092 to be drilled) 15,542 drilled; 13,336

successful bores

a/ Remaining seven schemes are expected to be completed by November 30, 2000b/ Latest estimate not availablec/ At appraisal, 24,000 hectares CCA was targeted

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Annex 2. Project Costs and Financing

Project Costs by Components (in US$ million equivalent) Annex 2a

Projecl Component %pprai%al F.stimate l ActualiLatest Estimate l Percentage of_______________________ ________ ___E __. . / A ppraisal

Agriculture Development 6.10 3.60 59

Minor Irrigation 35.40 29.94 85

Rural Roads 54.70 72.01 131

Drinking Water 13.20 14.97 114

Project Implementation 1.70 0.82 48

Total Base Cost 111.10 121.40 109

Physical Contingencies 10.90 0.00 0

Price Contingencies 10.20 0.00 0

Total Project Cost 132.20 121.40 92

1/Using year-by-year exchange rates: 27.06 (92/93); 30.71 (93/94); 31.64(94/95); 33.18 (95/96); 35.65 (96/97);37.55 (97/98); 41.71 (98/99); 43.18 (99/00); and 44.00 (4-6/00).

Project Costs by Procurement Arrangements (in US$ million equivalent) 11 Annex 2b

E%penditure Categories I Procurement %lethod Procurement MfethodApp raisal Estimate _ Actual/Latest Estimaic

. . . . _ _ ICB NCB Other NBF Total ICB NCB Other NBF Total1. Civil works - 96.00 5.00 101.00 - 102.92 3.00 - 105.92

2. Watershed treatment and - - 1.60 1.60 - - 0.18 - 0.18

agricultural materials _ _

3. Machinery equipment, 3.10 - 0.20 3.30 1.30 - 1.20 - 2.50

materials and vehicles4. TA, Studies, NGOs and - 22.20 22.20 - 11.80 - 11.80

training _ .5. Incremental operating - - 4.10 4.10 - 1.00 - 1.00

costsTotal 3.10 96.00 33.10 132.20 1.30 102.92 17.18 - 121.40

1/ Note: NBF = Not Bank Financed (includes elements provided under parallel co-financing procedures, consultants undertrust funds, any reserved procurement and any other miscellaneous items). The procurement arrangements for items listedunder "Other" and details of the items listed as NBF need to be explained in footnote to the table.

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Project Financing by Component (in US$ million equivalent) Annex 2c

Component %ppraisal Estilate Actual/Latest Estimate Percenrage of AppraisalBank Go%ernment Co- Bank Go%ernment Co- Bank i Go%ernmen Cc-

I __________ ______ _ ________ j- _ Elnancier _ financier t financier

Agriculture 4.8 1.3 3.0 0.b 63 46 -

developmentMinor irrigation 32.0 3.4 26.8 3.1 84 91 _

Rural roads 50.1 4.6 49.0 23.0 98 500 -

Drinking water 11.7 1.5 13.2 1.8 . 112 120 -

Project 1.5 0.2 0.7 0.2 - 41 100 -

implementation _

Total Base Cost 100.1 11.0 92.7 28.7 - 93 260Physical 8.5 2.4 0.0 0.0 - - -

contingenciesPrice contingencies 8.4 1.8 . 0.0 0.0 - - -

Total Project Cost 117.0 15.2 92.7 28.7 - 79 189

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Annex 3: Economic Costs and Benefits

Cost Benefit Analysis(Indicate currency, units and base year) I/

____________________ _ lPresent Value of Flowsl___________________________ l Economic Analysis Financial Analysis

Appraisal Latest Estimates Appraisal Latest_ Estimates

Area under irrigation (ha) 24,000 36,600Cropping intensities (%) 130 137 130 137Rural roads (km) 1,200 1005Watershed treatrnent (ha) 10,000 negligibleDrinking water (No.) 13,000 13,336Missing link bridges (m) n.a. 4,980Incremental labour from irrigation 2.25 2.30 2.25 2.30

(mandays - million/year)Increase in farm income (%) 70 more than 100ERR/minor irrigation (%) 1 3 29ERR/rural roads (%) 2 1 23ERR/watershed (%) 13 n.a.ERR/drinking water (%) n.a. 17

ERRlmissing link bridges (%) n.a. 16ERR whole project/ scenario I (%) 17 27

ERR whole project/ scenario 2 (%) 24

1/ Calculated in June 2000 constant price.

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Annex 4. Bank Inputs

(a) Missions:iStage of Project Cycle No of Persons and Specialty Performance Rating

- J c.g. 2 Economists. I FMS. eic. _ Implementation DevelopmentMIonih, Year o(unt Spcciallt Progress O Objectivc

Identification/PreparationDecember 1990 1 Economist

I Agriculturist1 Livestock specialist

June/July 1991 2 EconomistI Roads EngineerI Water EngineerI Credit & Cooperative SpecialistI Agriculture Extension SpecialistI Social Anthropologist

Appraisal/NegotiationMay 1992 2 Economist

2 Agriculturist2 Roads EngineerI Irrigation Engineer2 Social Development

October 1992 Negotiations

SupervisionAugust 1993 4 Agriculturist (1), Road S S

Engineer (1), DrinkingWater Specialist (1),Procurement Specialist (1)

February 1994 5 Agriculturist (1), Road Engineer S S(1), Drinking Water Specialist(1), Minor Irrigation Specialist(1), Procurement Specialist (1)

August 1994 4 Agriculturist (1), Road Engineer S S(1), Irrigation/Drinking WaterSpecialist (1), ProcurementSpecialist (1)

February 1995 6 Agriculturist (2), Drinking S SWater Specialist (1), Irrigation/Drinking Water Specialist (1),Procurement Specialist (1),Financial Analyst (1)

July 1995 4 Economist (1), Agriculturist (1), S SIrrigation Engineer (1),Procurement Specialist (1)

November 1995 3 Economist (2), Agriculturist (1) S SFebruary 1996 3 Economist (1), Agriculturist (1), S S

Roads Engineer (I)June 1996 3 Economist (1), Agriculturist (1), S S

Roads Engineer (1)

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April/May 1997 5 Financial Analyst (1), U UAgriculturist (1), RoadsEngineer (1), Irrigation Engineer(1), Procurement Specialist (1)

November 1997 4 Financial Analyst (1), S SAgriculturist (1), RoadsEngineer (1), Irrigation Engineer

(1)November 1998 5 Financial Analyst (1), S S

Agriculturist (1), RoadsEngineer (I), Irrigation Engineer(I), Social DevelopmentSpecialist (1)

February 1999 4 Financial Analyst (1), Roads S SEngineer (1), Irrigation Engineer(1), Watershed ManagementSpecialist (1)

November 1999 6 Financial Analyst (1), S SAgriculturist (l), RoadsEngineer (1), Irrigation Engineer(1), Social DevelopmentSpecialist ((1), ProcurementSpecialist (1)

February 2000 4 Financial Analyst (1), S SAgriculturist (1), RoadsEngineer (I), Irrigation Engineer(1).

ICRJune 2000 5 Financial Analyst (1), S S

Economist (2), RoadsEngineer (1), Irrigation/Drinking Water Specialist(1) (Including FAO/CPteamof 4 persons for the ICR)

(b) Staff:

Stagc of Project Cycle Actual/Latest EstimateNo. Staff weeks USS (,000)

Identification/Preparation 102.5 25.4Appraisal/Negotiation 215.7 93.8Supervision 139.86 202.6ICR 11 35Total 469.06 356.8

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Annex 5. Ratings for Achievement of Objectives/Outputs of Components

(H=High, SU=Substantial, M=Modest, N=Neg]igib]e, NA=Not Applicable)

RatingO Macro policies O H OSUOM O N * NAO Sector Policies O H OSUOM O N O NAO Physical O H *SUOM O N O NAO Financial O H *SUOM O N O NAEl Institutional Development 0 H 0 SU 0 M 0 N 0 NAEl Environmental O H OSU*M O N O NA

SocialM Poverty Reduction O H *SUOM O N O NAF Gender O H OSU*M O N O NALI Other (Please specify) O H OSUOM O N * NA

El Private sector development O H O SU O M O N * NAEl Public sector management 0 H O SU O M 0 N * NAEl Other (Pleasespecify) OH OSUOM ON * NA

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Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating

E Lending OHS Os *U OHU[Z Supervision OHS OS OU OHUN Overall OHS OS O U O HU

6.2 Borrower performance Rating

* Preparation OHS OS * U O HU* Government implementation performance O HS O s 0 U 0 HU* Implementation agency performance O HS O S 0 U 0 HU* Overall OHS OS O u O HU

Government Implementation Performance was "U" in the pre-MTR period.

Implementing Agency perforTnance was "U" in the pre-MTR period.

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Annex 7. List of Supporting Documents

Two supporting documents have been placed in the project files:

ICR Mission Aide Memoire - June 15-22, 2000Report of the Financial and Economic Analysis

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Annex 8. Borrower Evaluation of the Project (unedited)

BORROWER'S EVALUATION REPORTINDIA

BIHAR PLATEAU DEVELOPMENT PROJECT(IDA CREDIT 2439-IN)

A. Statement/Evaluation of Objectives

1. Country and Sector Context: Major objective of assistance of World Bank in a particular region isto encourage economic growth and alleviate poverty in the context of macro-economic framework. Animportant element of this objective is to develop and promote sustainable program specially in the domainof agriculture and bring the people above poverty line in the tribal dominated backward area of the PlateauRegion of South Bihar.

2. Project Objectives: As per SAR the main objective of the Project was to " increase rural incomesand alleviate poverty of tribal people in the underdeveloped southem plateau of the Bihar State."

3. This was sought to be achieved through:* making investments in critical areas of infrastructure for improved delivery of agricultural

services for increasing production and easing marketing problems,* strenghtening the planning, coordination and monitoring of the local administration,* significantly expanding the involvement of beneficiaries and introducing an integrated

approach to planning and implementation of multi-sectoral activities, and* promoting environmentally sustainable activities.

.

4. More specifically the project provided for construction of 1200km of roads and 4780 m(laterincreased to 9091 m) of bridges for providing easy access to markets for agricultural produce and alsofacilitating access to agricultural inputs besides proving links to institutions like schools, hospitals etc. Itsought to create irrigation for 24000 ha of additional Culturable Conunand area. It also provided assistancefor large scale development and propagation of improved variety of seeds in cereals and vegetables to boostagricultural production, and also for development and multiplication of improved livestock like pigs, goatsand poultry. It sought to improve the health of the population by provision of safe drinking water byproviding a handpump for every 150 population. Specifically,1 3060 handpumps were envisaged to bedrilled. An emphasis was put on developing the capability of beneficiaries to enable them to manage theassets and thus ensure sustainability. In addition the project included service support( houses, offices,vehicles, information systems etc.) and providing institutional support to the BAU. The mid term reviewmade some adjustments to the physical targets but did not change the overall basic design.

5. Evaluation of Objectives - Context and Complexity: The Project Area of 67 blocks was chosenspecifically for it's high composition of tribal and Scheduled caste population (above 80%) which werepredominantly poor( 60 % were living below the poverty line) and constituted the potential beneficiaries.Thus, by providing a multi pronged strategy to improve the productivity of the beneficiaries andemphasizing the capacity building of both, the beneficiaries and institutions for ensuring greatersustainability, the Project was conceived well. Sectors with direct impact on productivity like agriculture,however, could have been given more emphasis. It is felt that the synergy effect could have been muchmore had there been greater direct emphasis on shifting of cropping pattem and multiplication of improvedlivestock and also on investments in post production infrastructure. Due to the comprehensive, integrated

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nature of the project design, the project was complex, with investments in four different sectors andinvolvement of seven different executing agencies, working over a large geographical spread. The projectobjectives were realistic and were within the capacity of the implementing agencies.

B. Achievement of Objectives

6. Minor irrigation sector: The project exceeded the appraisal estimates. Whereas the SAR envisagedcreation of Culturable Command Area of 24000 ha, a command area of 20000 ha has already beenachieved and by the time of closure of the project the total command area created shall be 30600 ha whichis 150% of appraisal estimates. The capability of the beneficiaries has also been strengthened by creationof water user associations (WUA).

7. Preliminary training of these WUAs has been given by the Department. Comprehensive training of308 WUAs for a one year period through reputed NGOs has been taken up . This shall instill a sense ofcommunity ownership among the WUAs and shall enable them to manage the assets created moreeffectively.

8. The cropping intensity of command area created has been found to be around 137%. As against anERR (Economic rate of return) of 13% envisaged in the SAR the actual ERR of this component comes to24%.

9. Drinking water component: The project exceeded appraisal estimates. As against provision of13060 DTWs(Drilled tube wells) which was increased by 2032 in the Mid Term Review, a total of 15542DTWs were drilled out of which 13336 have been successful. A failure rate of 14.2 % in the projectcompares very favorably with failure rate of tube wells drilled by the Department from other GOI funds.

10. Capacity building of beneficiaries groups in shape of Water and Sanitation Committees(WATSANs) has proceeded satisfactorily. Targets relating to formation of Water and SanitationCommittees (WATSANs), training of Caretakers and Mechanics and conducting of chemical andbacteriological tests of water samples have been achieved. Program of distribution of toolkits to caretakersand mechanics is well on course to achieve full distribution by June 30, 2000.

11. Department's capability of chemical and bacteriological testing of water samples has beenaugmented by setting up of new laboratories in Dumka and strengthening of laboratories at Hatia,Jamshedpur, Sahebganj & Daltanganj. Biggest impact of this program can be seen in form of drasticreduction in water borne disease in the villages where drilled Tube Wells have been taken up.

12. Road Component: The Project achieved appraisal estimates and also the amendments made duringthe Mid Term Review to a substantial extent. As per SAR 1200 Km of hard Crust Murrum Roads and4780 mtrs. of bridges were to be taken up. The Mid Term Review suggested taking up of missing linkbridges to improve connectivity. Thus a total of 1069.4 Km. of road and 9554 mtrs. of bridges were takenup. As against this 970 Km. of roads and 8083.66 mtrs. of bridges have been completed so far. The trafficintensity on the constructed bridges and roads suggests that the assumptions made in this regard in the SARhave held true.

13. The project has succeeded in Institutional Strengthening of the Rural Engineering Organization.The Engineers assisted with the project but the first hand experience of the latest technology in high wayengineering and project management.

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14. Agricultural Component: The project exceeded appraisal estimate in almost all thesub-components of this sector. Crop improvement program: The Project's intervention in form of provisionof High Yielding variety of seeds, crop demonstrations, training of farmers and popularizing of improvedagricultural practices through fairs and exhibitions led to a decisive increase in cropping intensity, increasein area under High Yield Variety (HYV) crops and significantly increase a consumption of fertilizer by thefarmers. While the cropping intensity in the Project area increased from 106% in 1992-93 to 118.5% in99-2000, the increase in area under HYV of Paddy increased by 16% and in Maize by 49% respectively.The consumption of Nitrogenous fertilizers increased by 67% and of Phosphatic fertilizers by 22%.

15. Livestock improvement program. The pilot project of introduction and multiplication of improvevarieties of Pigs and Goats was also completed satisfactorily and exceeded appraisal estimates. 104 secondlayer of breeders were developed incase of pigs and 16 second layer of breeders developed in goats.

16. Fruit cultivation: More than 5.5 lakh fruit plants of fruits like Mango, Lichi Papaya, Guava etcwere distributed. Good response was received from farmers for raising orchards of mixed fruit plants withinter cropping of vegetable.

17. Floriculture: For the first time floriculture was introduced among the farmers in one of the blocks(Namkum in Ranchi). Farmers in around five villages in this block successfully market the flowersproduced.

18. Watershed Development: Work could be successfully carried out in seven of the twelve watershedstaken up but desired standard of execution could not be achieved.

19. Institutional development: Research stations and farms of the Birsa Agricultural University hasbeen improved considerably. The BAU now has the capacity to produce 600 quintals of breeder seedsannually. A state of art Biotechnology center has been established at the BAU. The Indian Council ofAgricultural Research (ICAR) has started a course in M. Sc.(Biotechnology) at BAU recognizing thecapacity built at the University. Infrastructure of the seed multiplication farmns of the Department ofAgriculture and Horticulture has also been augmented.

C. Social Impact

20. The project made significant progress in ensuring people's participation in the developmentprocess and encouraging them to operate and maintain assets created for their benefit. The WATSANCommittees are effectively managing the handpumps handed over to them. The Water User Associations(WUAs) are also taking up managing of the Minor irrigation schemes though it may be said thatstrengthening of the WUAs may need their training and constant monitoring by the Department over alonger period of time.

D. Major Factors Affecting the Project

21. Factors subject to State Government control included delays in providing for allotment to theproject in each tinancial year. In each of the years except 2000-2001 fund to the project was providedduring the month of August, September . This way the peak working period from April to June, that is, theperiod before the monsoon could not be utilized properly. The State Government did not vest the RegionalDevelopment Conmmissioner, the Chief Executive Officer of the project with full financial powers asenvisaged in the SAR. The SAR also envisaged that no officer in the Project be transferred without the

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concurrence of the RDC. This was not done. Thus the Project saw a tenure of six Project Directors, sevenChief Engineers of REO and almost the same number of Chief Engineers of Minor Irrigation. The questionof the competent authority for giving administrative approval in packages which have gone beyond 15% ofthe agreemental value has not been resolved for a long period. This adversely affected the packages whichhave gone beyond 15% of the agreemental value. At times, for example in the year 1999-2000, the fullallotment as per the action plan cleared by the Steering Committee, was not provided which adverselyaffected progress.

22. Factors not nzenerally subject to State Government control: Many of the packages, specially thosein the Road Sector were affected by the Extremist problem which could not be fully sorted out in spite ofaction taken by Government for providing security. The Project period witnessed six Elections, four for theLok Sabha and two for the Assembly. During each elections Project staff was drafted for election duty andvehicles seized thus adversely affecting the work.

23. Factors generally subiect to control of Implernenting Agency: Due to the multiplicity of agenciesexecuting various components of the project equal attention could not be paid to work by each of theagencies. This can be held true in case of work taken up in the watershed program which left scope forimprovement. Cost and Schedule changes(Actual versus Appraisal): Total Project costs shall equalUS$127 million compared to appraisal estimate of US$132 million. The actual costs in the Rural Roadscomponent and Drinking water component exceeded the appraisal estimates primarily because of increasein the scope of work in these two sectors as per the recommendations of the Mid Term Review. Physicaland price contingencies were within the appraisal estimates. The period of the Project was extended twiceby one year each. This was necessitated as desired progress could not be made in the initial few years.

E. Sustainability

24. The sustainability of the activities in most of the sectors is quite high. The WATSAN Committeeshave already taken up the maintenance of handpumps handed over to them. After an initial training by theDepartment, training of WUAs of a majority of schemes have been taken up. This shall enable them toeffectively maintain and operate the minor irrigation schemes. The Department would however associateitself with this capacity building process for a longer period of time. The crop production program shall besustained through profits generated by the seed processing plants. The Department of Agriculture hasalready agreed to this. Profits of the seed processing plants shall be used to finance the BAU to producebreeder seeds and the Department of Agriculture to produce foundation. The BAU has developed secondlayer of breeders in pigs and goats. Large stocks of both pigs and goats have been created by BAU at itsfarms to sustain the activity. The ICAR has already recognized the biotechnology center as a center forlearning and has started a course in M.Sc. Biotechnology. This center shall be able to continue its activitieswith support of ICAR. Rural road maintenance policy has been framed by the GOB for maintenance of theroads constructed under the Project. The REO shall takeover the roads and shall be responsible for it'smaintenance as per the policy. The Policy also envisages gradual upgradation of these roads to bituminousroads. Availability of funds for this purpose shall be crucial for implementing the maintenance policy.

F. World Bank Performance

25. Identification and preparation: Satisfactory. The objectives of the Project fitted well with theconcerns of GOB to alleviate poverty among the weakest sections of population. The Project selected thoseblocks specifically which had a high percentage (80%) of tribal and Scheduled Caste population. Moreemphasis could however been given to direct investment in production processes than on creation ofinfrastructure. Thus, though the project had an integrated structure the "synergy effect" is somehow

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missing which could have been more visible had there been direct investment in production processes at ahigher scale.

26. Appraisal: Satisfactory. Generally the technical and financial aspects of the design were adequate.A greater study of organizational structures of various Departments in GOB could have helped to improvethe structure of implementing agencies. For example, a separate CE for the BPDP divisions of the REOwould have enabled the CE to devote his full attention on BPDP work which the present CE cannot do ashe is the head of regular REO divisions too. Fund to all other agencies in the agricultural sector is routedthrough the Director, Agriculture which could have been avoided. Greater emphasis could have beenplaced on first enhancing the Implementation capacity of the Department of Soil Conservation beforestarting the actual work in the Watershed prograrn.

27. Supervision: Satisfactory. However, the point of capacity building of WUAs could have beenemphasized to a greater extent when the schemes were in the initial stages of execution. A sense ofownership of the assets created in that case could have been higher. Time period needed to implement therecommendations of the Mid Term Review could have been assessed more realistically. This would haveavoided the sense of uncertainty which accompanied two successive extensions. More guidance could havebeen provided regarding testing processes of such large number of pumpsets procured in the Minorirrigation sector.

28. Deviation from World Bank Policies and Procedures: There have been no significant deviationsfrom Bank policies and procedures.

G. Borrower Performance

29. Implementation: Satisfactory. However, more continuity in senior management positions andallocation of a full time team of staff dedicated to project coordination would have improved projectperformance and demonstrated more ownership. The constitution of the Steering Committee at the Statelevel could have included a representative from the Forest Department to help expedite the Forest clearancerequired in road sector. Emphasis on training of officers in the World Bank procedures specially in thebeginning of the Project could have helped in expediting work in the initial years.

30. Compliance with legal covenants: Except the fact that there is lack of clarity of the full financialpowers of the RDC though during negotiations it was agreed that full financial powers shall be delegated tothe RDC, there has been full compliance with the legal covenants.

H. Assessment Of Outcome

31. The overall outcome of the Project is satisfactory with most of the appraisal targets having beenexceeded or substantially achieved. There is high likelihood of the activities taken up being sustained.

I. Plan for Future Operation

32. Future Performance Indicators: Activities of the WATSAN Committees shall have to be monitoredby the Department over a period of time. The training of WUAs shall have to continue till at least March2001. Data regarding change in cropping intensity in the Minor Irrigation sector and traffic intensity in theroad sector shall have to be monitored to assess if the assumptions made in this regard in calculating ERRhold true or not. This shall be helpful in future projects.

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33. Recommended follow-up: This Project has created a capability which can give very high returnswith an incremental investment in productive activities in agriculture and though an investment in postproduction infrastructure . Besides the above, experience gained and lessons learnt in this Project can beutilized effectively in any future Projects. A future Project could also tackle outstanding issues of thisProject thus increasing the likelihood of sustainability of this Project even more.

J. Key Lessons Learned

* Comprehensive training of staff in any project involving new procedures shall greatly help insmooth execution and prevent procedural delays.

* Suitable institutional arrangements like creation of a corpus fund etc. must be ensured whichwould allow uninterrupted flow of funds to the project in the period of April to July of eachfinancial year.

* All points regarding exact financial powers of each authority in various organizations must beexplicitly laid down before taking up of such projects.

* Beneficiary groups need to be involved right from the stage of formulation of scheme for themto develop a sense of ownership and responsibility of irrigation schemes.

* Land Acquisitions and Forest clearance required in any scheme must be completed before anyproject is started.

* Project design and implementation should focus more explicitly on measures to ensuresustainability. In fact, for each activity measures to ensure sustainability should be part ofdesign of the activity itself.

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