Public Disclosure Authorized

Document of

The World Bank FOR OFFICIAL USE ONLY /

-Y V

'

A/ -)

Public Disclosure Authorized

ReportNo. 6813-IND

STAFF APPRAISAL REPORT

Public Disclosure Authorized

INDONESIA IRRIGATIONSUBSECTORPROJECT

Public Disclosure Authorized

October 15, 1987

Asi;a Regional

Office

This document has a resicted distibution and may be used by redpients onlyInthe perfonnance of their officialduties. Its contents way notothewise be disclosed without WorldBankauthoriatin.

CURRENCYEQUIVALENT (As of September1987) CurrencyUnit US$ 1.00 Rp 1 million

Rupiah (Rp) Rp 1,650 =

US$606.06

!NDONESIANFISCAL YEAR April 1 - March 31

WEIGHTSAND MEASURES

I

millimeter(mm)

1 meter (m)

1 kilometer(km) 1 squarekilometer(km2) 1 hectare (ha) 1 cubic meter (m 3 )

1 million cubicmeters (MCM) 1 liter (1) = 1.06 quarts 1 liter/second(1/sec) 1 kilogram (kg) 1 metric ton (ton)

-

-

-

0.039 inches 39.37 inches

0.62 miles 0.386 squaremiles 2.47 acres 35.31 cubic feet

-

811 acre-feet 0.264 ga lons (US) 0.035 fti per second

-

2.2 pounds 2,205 pounds

-

FOR OMCIL USEONLY

ABBREVIATIONS, ACRONYM3AND INDONESIANTERMINOLOGY ADB APBN BAPPEDA BAPPENAS BDP

-

Asian DevelopmentBank CentralGovernmentBudget ProvincialDevelopmentPlanningAgency NationalDevelopmentPlanningAgency Bidank Diklat Pengairan(in DCGRD - Representative office of Pusdiklat) BIE - Bachelor of Engineering BIPOWERED BandungInternational ProfessionalTrainingProgramfor Water ResourcesDevelopment BPKP Financialand DevelopmentSupervisoryBoard CABANGDINAS - IrrigationSection DAAD Directorateof AgricultureArea Development(in DCFCA) DGFCA DirectorateGeneralof Food Crops Agriculture DGWRD DirectorateGene-alof Water ResourcesDevelopment(in MPW) DIK Daftar IsianKegiatan (routinebudgetallocation) DIP Daftar Islan Pr" .k (development budgetallocatitn) DIPERTA ProvincialAgriculturalService DOI-I&II Directoratesof IrrigationI and II (in DGWRD) DOR - Directorateof Rivers (in DGWRD) DOS - Directorateof Swamps (in DGWRD) DPP - Directorateof Planningand Programming(in DGWRD) DPU - ProvincialPublicWorks GOI - Governmentof Indonesia INPRES - Revenuesharinggrant programsfrom GOI to provincial, districtand villageauthorities IPEDA - Iuran PembangunanDaerah - Land Tax ISF - IrrigationServiceFee Juru - IrrigationOverseer Kabupaten - Administrative District MOA - Ministryof Agriculture MHA - Ministryof Home Affairs MPW - Ministryof PublicWorks O&M - Operationand Maintenance OECF - OverseasEconomicCooperationFund (Japan) Palawija - Secondaryfood crops (grownmainly in dry season) Pengamat - Irrigationinspector,head of subsection(RantingDinas) PBB - Propertyand BuildingTax P2AT - Sub-directorate (withinDOI-II)responsiblefor groundwater development PPL - Villagelevel agriculturalextensionworker PPM - Mid-levelagriculturalextensionworker PPS - Subjectmatter specialist PRIS - ProvincialIrrigationService Pusdiklat - Educationand TrainingDivision(in MPW) Repelita - NationalFive-YearDevelopmentPlan (RepelitaIV, 1984-89) Seksi - IrrigationSectionOffice STM - Technical& High Schoollevel staff Ulu-Ulu - Irrigationwater master Wilayah - Irrigation DistrictOffice WUA - Water Users' Association Thisdocumenthas a restricteddistributionand maybe usedby recipientsonlyin the performance of theirofficialduties.Its contentsmaynot otherwisebe disclosedwithoutWorldBankauthorization.

INDONESIA IRRIGATIONSUBSECTORPROJECT STAFF APPRAISAL REPORT

Table of Contents Page No. LOAN AND PROJECT SUMMARY..................

vi

I. PROJECT AND SECTOR BACKGROUND.................... A.

B.

Project Background.c The Agriculture Sec Background.s c k Objectives.............. -

. ......

gr.... .........

k

ou

1

**,.... nt.........

2 2

........

2

r ou

,.....e......................

C. The Irrigation Subsectorb

s o......o.........o...or.. e ct..o g a t i

Irri

-

Surface

-

Srunwamp.,...........,.

-

Small River

9

.

o

3 o

n

4

uths

O&MPractices ............. Staffing and Staff Tra

Fa

l i

i n

t i

i

e n

s g

E. O&M Fundingand Cost Recovery.........................o.. -

5 5 6 7

p

ii

3 3

*...............

D. Institutional Frameworkand SupportingServicesv...ces 0 .09 . - Irrigation Services for O&. - Water Users'Associationso.......................... .O -

1

2

or

Performance .......................

M

..

. nd.... . ...

t g

...

8 8 9

O&M Funding............................... 99

.99r

Cost R er Irrigation Service Fee Land Tax

9

10

10 11

F. IrrigationDevelopmentStrategy,Issuesand Investment -

e 111 SubsectorIssuesandStrategy........................... 11

-

Investment P

Programs ................................

rag

99999

r

a

m

.

G. Bank Role and SubsectorLendingStrategy.r.ateg...*.,..... - Seneral -

Experienceunder PreviousProjectso.... 04.... 9 *....... 9

12

15 ~~~~~~~~~~~ 15

This reportis based on the findingsof an appraisalmissionto Indonesiain February/March 1987 comprisingMessrs.A. Zulfiqar,E. Kramer,Ho Eisa, M. Mian, P. Sun, and Ms. S. Ganguly(Bank)and E. Greenshields, G. Cazaux and W. David (Consultants).Mr. T. Bertrand(Bank)participated part time.

-

ii

-

Page No. 16

II. THE PROJECT ........................

A. Rationalefor Banklnvolvement............................. 16 17 B. ProjectObjectivesand Description ......................... C.

-

Project Objectives. ...

-

ProjectDescriptions c

**..*.*o***

r

i

*

p

Detailed Features ..... ....... .. Special Maintenance.................*

-

,

....................

17

ti.....o............on..... o.... 17 18 18

..... e **c*4G*oci..

-

SurfaceIrrigation Systems...........................O18

-

Swamp

-

Small River Mouthse..............e....,.....o........ 19

Sys

t

m

e

s

19 20

Efficient O&M ...............

-

D.

E. F.

-

SurfaceIrrigation Systems...e....c......c......... 20 20 .... e.a.a.. e.e.c ....e.........a....... c c CC....., Swamp Systems Completionof Ongoing Projects......................o.. 21

-

Pilot Groundwater Development............cc.c.e.c.e.c.. Turnover of Small Irrigation Systems,,,#o,.os........ ........ Irrigation Service Fee....................... B Land Valuetion and Strengthening of P8 InstitutionalStrengthening and Training...............

23 24 26 27 28

-

TechnicalAssistanceand Studies...

30

c33 Cost Estimates* .... s c. sc. c e..... o..... Financing..c e ece c.c cc. Schedule......... cc. Preparation Status and Implementation

Go Procurement H. Is J.

Disbursement..... EnvironmentalEffects Role of Women...e

III. PROJECT IMPLEMENTATION..... A.

IV.

42

Organization and Management.cc.cc.c....cc..e..o.ceccc.c..c - National Level Organization and Management..........

42 42

-

44

Provincialand Field Level Organizationand Management..

........ * ccc...... cc ...... B. O&M Funding ............... ....... c.. C. Accounts and Audits.ceccee .......... e.c.e...... *...... c c.. c.....e......c... e e oee D. Monitoringand Evaluation.

45 45 46

CROPPING PATTERNS, YIELDS AND PRODUCTIONODUCTI.O.....e.cce.

47

A. B. V.

34 35 36 40 41 42

Present Yields,

47 and Future CroppingPat terrn...o............... Productionand Markets...rk................ets.... 48

PRICES, FARMINCOMESAND COST RECOVERY........... A.

c....

Prices

49

49

49 B. Farm Incomesand Payment Capacityp... C. Cost Recoveryand Operationsand MaintenanceFunding.......O 50 D.

Cost Recovery Indices.....ecc.

e

c.....

51

..

-

lli

-

Page No. AND RISKS VI. BENEFITS,ECONOMICJUSTIFICATION

........ sesse........

52

52 A. Benefitsand Beneficiaries.................................

B. C.

Economic Analysis5..................... .. ........... Risks and Uncertainties..e........... ... * . . ...

53

*6e****.

....

.... ...

RECOMMENDATION................... ,.. VII. AGREEMENTSREACHEDAND

54

56

TABLES IN TEXT 1.1 1.2 1.3

SubsectorInjestmentin Relationto O&M Expenditures.... GOI's Commitmentsfor ExternallyFinancedProjects...... Ongoing (PartiallyExternallyFinanced)Projects........

13 14 14

2.1 2.2

Turnoverof Small IrrigationSy s t e m of Irrigation Pilot Areas for the Introduction Service Fee9,o ...........

25

2.3

Project Cost Sumayr

2.4 2.5

ProjectFinancingPlan...... . .

2.6 5.1

Procurement Plan... Disbursement Schedulec

.

s

26 y

e

.......... *

34 ...

35 39

hd..... ...

o.........

l l..e

e.o....

5.2

Net Farm Incomes . Cost Recovery Ind

6.1 6.2

Summaryof Major Benefitsand Beneficiaries.......... EconomicRate of Return and SensitivityAnalysis........

.............

,

..

40 50 52

53 55

J-X****---**¢*

ANNEXES Annex 1: Annex 2: Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7:

Teble 8: 'table 9:

GOI's Policy Statem- and Action Plan Cost Estimatesand Implementation Schedules ProjectCost Summary(By ExpenditureCategories) COI's FinancingPlan (by fiscal year) Irrigation-Implementation Schedule Swamps- Implementation Schedule Schedulefor HandingOver SwampsProjectsto ProvincialOrganizations SelectedOngoing Projects GroundwaterComponent - East Java and Sulawesi - Implementation Schedule GroundwaterComponent - Lombok - Implementation Schedule Land Reclassification, Valuationand Strengthening of IPEDA/PBB ...

Directorate - Implementation Schedule

Table 10: Table 11: Table 12: Table 13:

A Pilot Scheme of Mapping- Implementation Schedule OngoingLand Reclassification Program Ten-YearLand Reclassification Program Introductionof IrrigationServiceFee - Implementation Schedule

Annex 3: Table 1: Table 2:

Institutional Developmentand Training ProposedApproachto O&M Procedures Trainingand RelatedActivities

Annex 4: Table 1: Table 2:

ConsultancyServices ConsultancyServicesfor ProjectImplementation ConsultancyServicesfor Institutional Development

Annex5 Table 1: Table2: Table 3: Table4: Table 5: Table6: Table 7:

O&M Funding CentralGovernmentFundingof O&M (1979/80- 1987/88) Fundingof O&M in SelectedProvinces(1986/87) Fundingof O&M in Rest of the Provinces(1986/87) IncrementalFundingRequirementsfor EfficientO&M - Irrigation IncrementalFundingRequirementsfor EfficientO&M - Swamps Projectionof Rural PBB ProjectedSourcesuf IncrementalFinancingfor EfficientO&M

Annex6 Table 1:

InvestmentExpenditures Realizationof PhysicalTargets- Actual and Projectedfor RepelitaIV Actual and PlannedInvestmentExpenditures CentralGovernmentInvestment(DIP)Expenditures- 1984/851988/89 Allocationsof Loans and Disbursementsup to January 1, 1987 Bank-financed Projects Allocationsof Loans and Disbursements- ADB-FinancedProjects Allocationsof Loans and Disbursements- OECF-Financed Projects EstimatedGOI Fundingof ForeignFinancedProjects

Table 2: Table 3s Table 4: Table 5: Table 6: Table 7:

Annex 7: Table 1: Table 2: Table 3:

CroppingPatterns,Yieldsand Production Yields - PresentSituationand Future with Project Crop Areas - Present Situationand Futurewith Project IncrementalCrop Productionat Full Development

Annex 8: Table 1: Table 2: Table 3: Table 4:

RepaymentCapacityof Water Users Java Farm Models - Using Actual FarmgatePrices OutsideJa-a Models - Using Actual FarmgatePrices Java Farm Models - Using GovernmentSupportLevel Prices OutsideJava Farm Models- Using GovernmentSupportLevel Prices

Annex 9: Table 1: Table 2:

EconomicAnalysis Derivationof EconomicPrices Financialand EconomicPrices

Annex 10:

SelectedDocumentsand Data Availablein Files

CHARTS: 1. Organizational Arrangementsfor ProjectImplementation 2. Organizational Arrangementsfor the Implementation of TrainingActivities 3. Approachto Strengthening IrrigationManagementat the Tertiaryand QuarternaryLevels 4. Organizational Setup for the Pilot Scheme for Irrigatiorv ServiceFee MIAP --BRD 20240

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vi

-

INDONESIA IRRIGATIONSUBSECTORPROJECT Loen and Projec:t Suumary Borrower:

Republicof Indonesia

Amount:

US$234millionequivalent.

Terms:

Repayablein 20 y'ears, including5 years of grace,at the standardvariableinterestrate.

Project Description:

The projectwould be the first phase of a long-termprogram aimedat supportingthe Governmentof Indonesia's(GOI) effortsto: (a) improveoperationsand maintenance(O&M) to sustainthe effectiveness of all irrigationsystems,through adequatelevels of funding,and strengtheving of instituEions and procedureefor O&M planningand implementation; (b) introducedirect cost recoveryfrom irrigationbeneficiaries and increaselocal revenue generationto reduce the burdenof O&M expenditureson centraland provincialbudgets;and (c) rationalizeexisting and programed investmentsin the subsector. Predicatedupon, and within the frameworkof, an agreed medium-termPolicyStatementand an Action Plan of specific measuresto be takenover the three year project implementation period,the projectwould consistof the following: (a) specialmaintenanceworks (i.e.deferred maintenanceand minor systemsupgrading)on about 400,000ha of irrigatedland, about 106,000ha of reclaimedswamp land, and five river mouths,so that these can sustainefficient O&M in future. Detailedpreparationand designwork would be underzakenfor about 200,000ha of irrigatedareas and 55,500ha of swampsrequiringspecialmaintenanceto be coveredin the first year of a follow-upproject; (b) systematicintroductionof efficientO&M on about 700,000ha of irrigatedland and 87,000ha of swamp land; (c) completionof about 40 priority,GOI-fundedon-going projects,selectedon the basis of agreed technicaland economiccriteria;(d) pilot groundwaterdevelopmentthrough construction of some 900 tubewellsfor small farmers in primarilyrainfedareas; (e) supportfor policy reformsand institutional strengthening and training,including privatization

of small public irrigation systems, a pilot

schemefor introductionof direct irrigationservicefees, improvinglocal reveruegenerationvia land reclassification and valuation,O&M manpowerplanningand development,and strengthening of the central,provincialand districtlevel responsiblefor irrigationO&M, and of water institutions

-

vii

-

users' associations; and (f) technicalassistanceand study,investment studies(institutional strengthening strategystudy, and environmentalimpactstudies)in support of the above components. An efficientoperationof the existingcapitalstock (in irrigationinfrastructure), expeditingthe completionof priorityongoing projects,strikingan appropriatebalance betweenexpenditureson new investmentsand O&M of the existinginvestments,and reducingthe dependenceon central governmentbudgets for O&M fundingvia improvedcost recoveryand local revenuegeneration,would all contribute towardssustaineddevelopmentof the irrigationsubsector. Risks:

The principalrisks are that: (a) the implementation of the policy framework,and measuresin the ActionPlan in support thereof,may be prolongedor deferred,despiteGOI's commitmentas reflectedin the PolicyStatementand Action Plan; (b) implementation of physicalworks may be delayed; and (c) the level of fundingallocatedfor efficientO&M may be inadequateor the funds providedmay be inefficiently utilized. These risks are expectedto be minimizedby the proposedlong-termprogramapproach,the provisionfor substantialtechnicalassistance,and by the stepsalready taken by the Governmentto appointkey consultantsand to have the salientorganizational arrangements for project implementation in place.

-

viii

-

EstimatedCosts:

Local Foreign Total ---- US$ million-----

SpecialMaintenance Incremental O&M RecurrentO&M /a OngoingGOI-fundedProjects GroundwaterDevelopment Institutional Development Turnoverof Small Systems,Irrigation

45.2 9.5 44.1 60.9 6.6 6.9

27.7 6.1 34.9 42.5 6.0 12.4

72.9 15.6 79.0 103.4 12.6 19.3

6.2

3.0

9.2

179.4

132.6

312.0

15.6 16.1

12.4 3.0

28.0 19.1

211.1

148.0

359.1

109.7

-

109.7

94.4 6.4 0.3 0.3

139.6 5.4 2.7 0.3

234.0 11.8 3.0 0.6

211.1

148.0

359.1

Service Fee - Pilot Schemes, Land

Reclassification and Valuation Base Cost lb PhysicalContingencies PriceContingencies Total ProjectCosts Financing Plan:

GOI Bank Governmentof Netherlands Governmentof Italy Ford Foundation Total Disbursements: Bank FY

1988

1989

1990

1991

Annual Cumulative

30.0 30.0

80.0 110.0

80.0 190.0

44.0 234.0

Rate of Return: 21% t:E':

IBRD No. 20240

/a

Presentlevel of O&M expenditures.

/b

Includingtaxes amountingto about US$18.5millionequivalent.

INDONESIA IRRIGATIONSUBSECTORPROJECT STAFF APPRAISALREPORT I.

PROSECTANDSECTORBACKGROUND A.

Project

Background

1.1 The large expansion of irrigation infrastructute in Indonesia over the last two decadeshas been impressive and has made a major contribution to bringingthe economyto self-sufficiency in rice. However,this successful expansionwas not accompaniedby a country-wide effort to maintainand operate efficientlymuch of the 4.8 millionha of the irrigationsystems. Consequently many systemsare poorlymaintained. Unlessthere is a radical shift of nationalfocus towardsoperationsand maintenance(O&M),a massive and much more costlyexpenditure,in both financialand economicterms,on rehabilitation in the neAt 10-15 years,would become inevitable.The recognitionof the importanceof O&M, comingat the same time as Indonesiais reachingthe thresholdof rice self-sufficiency and facingsevereresource constraints, is leading to a sharp redirection of GOI's priorities away from

expansionand modernizationof specificirrigationsystems,towards efficientlyoperatingand maintainingexistingsystemsand the completionof only priorityongoingprojects. Recognizingthat this shift in focus is criticalto optimizingthe returnsfrom investmentsin irrigationand preventinga declinein agriculturalyields from currentlevels,GOI has enunciatedand evolvednew policiesand concertedmedium-termactionson subsector-wide O&M funding,institutional strengthening and cost recovery. 1.2 The proposedprojectwould be the firstphase of a programaimed at supportingthese policyand institutional reformsas well as appropriate levelsof O&M expendituresand developmentof new sourcesof financingfrom provincialauthoritiesand beneficiaries.The projectwas identifiedby a Bank missionduringdiscussionswith the Governmentin February/March 1986, and preparedby the DirectorateGeneralof Water ResourcesDevelopment(DGWRD) in the Ministryof PublicWorks (MPW)with the assistanceof consultants financedunder IrrigationXIV (Loan 1811-IND). Concurrently, a draft SubsectorPolicyStatementand detailedAction Plan to providethe underpinnings for ihe program,were preparedby a workinggroup including representatives from BAPPENAS,the Ministriesof Finance(MOF),Home Affairs (MHA) and Agriculture(MOA),and DGWRD. Followingpreparation mi. ,ionsthat visitedIndoneaiaduringJune throughNovember1986 and an appraisalmission in February/March 1987, broad agreementwas reachedwith Governmenton the overallprojectconceptand scope,as well as on the draft SubsectorPolicy Statementand ActionPlan coveringrelatedpolicy issuesin the irrigation subsector. Followingtechnicaldiscussionsheld in JakartaduringJune/July 1987,negotiations were held in Washington,D.C., during September1987. The Governmentdelegationwas led by Mr. Soebandi,the DirectorGeneralof Water ResourcesDevelopment.

-2-

B. The AgricultureSector Background 1.3 Agricultuveremainsa key sectorof the Indonesianeconomy, contributing about one-fourthof GDP and providingemploymentto 55% of the labor force. The sectorhas an importantrole in non-oilmerchandisetrade, with major agriculturalexportsaccountingfor 33% of the value of non-oil exports,and food for 7% of imports. Of the country'scroppedarea of 24 millionha, about 8 millionha are under perennialcrops, 9 million ha are in drylandfarms,and 7 millionha in wetlandssuitablefor rice cultivation. Rice occupiesabout 38% (9 millionha) of the total croppedarea, corn 13% (3 millionha), cassava7% (1.6millionha), and soybean3% (0.8 million ha). Food crops accountfor 63% of agricultural GDP, with rice alone accountingfor a 30% share in 1985. Areas well endowedwith rainfalland irrigationfacilitiesusuallygrow two to three crops a year: rice followed by soybeanor corn in the secondand thirdcultivationcycles. Farm holdings are predominantly small--34%of all householdlots are less than 0.25 ha, and about 29% are between0.25 and 0.5 ha. It is estimatedthat 44% of the rural populationlives below the absolutepovertyincomelevel of US$106 per capita. Objectives

1.4 The Government's major objectivesfor the agriculturesectorduring RepelicaIV are to: (a) increaseproductionto meet domesticrequirementsfor food while meetingthe needs of industryand expandingagriculturalexports; (b) increasefarmers'incomesand generateemployment;(c) promotea more balanceddistribution of economicopportunities, regionaldevelopmentand land settlementthroughtransmigration; and (d) contributeto the health and better nutritionalstatusof the population. Performance growthhas averagedabout 4% p.a. and Since 1969,agricultural 1.5 outpacedpopulationgrowth by a significant margin. Rice output,which has grown a,:5% p.a. since 1969 (6.3%p.a. since 1975),has made a solid contributionto the sector'simpressiveperformance.The dramaticincreasein rice productionfrom 17.4 milliontons in 1979/80to about 26.6 milliontons in 1985 essentiallytransformedthe countryfrom one of the world's largest importersof rice (about2.6 million tons in 1979/80)to one with surplusesin 1985/86. Other food crops (particularly corn)and cash crops (suchas rubber, palm oil, coconutsand spices)have also shown impressivegrowthand added to the significantgains registeredin ruralwelfarein the past severalyears. This performanceis the resultof sustainedGovernmentsupportto the agriculture(especiallyrice) sectorthroughheavy investmentsin rural infrastructure, particularlyirrigationsystems,researchand extension,and input subsidiescombinedwith technological breakthroughs achievedin high yieldingrice varieties(HYVs). The past performanceof the sectorcannot, however,be sustainedif operationsand maintenanceof the large irrigation infrastructure continuesto be neglected. In the future,a growth in rice output of about 2.5-3%p.a. will have to be maintainedto meet domestic

- 3demand. The strategicimperativeis to reducecosts and increaseefficiency of Governmentinterventions to encourageefficientrice production,and to fully exploitthe potentialfor agricultural diversification by (i) addressing technicalproblemsin field crops throughresearchand extension; (ii) encouragingadequateinput suppliesand relatedservicessuch as credit and marketing;and (iii) improvingthe planningand implementation of Lree crops programs. C. The IrrigationSubsector SurfaceIrrigation 1.6 The total irrigatedarea in Indonesiaof 4.8 millionha includes2.6 millionha of technicalirrigatedarea, 1.3 millionha of semi-technical irrigatedarea, and 0.9 millionha of simpleirrigatedarea. The technical areas have permanentcanals7controlstructuresand measuringdevices,and all the water allocationand distribution up to the tertiaryhead is controlledby the Government. The semi-technical areas have permanentcanalsbut few controland measuringstructures.The source,and sometimesthe primary canal, is controlledby the Governmentbut distribution is left to the farmers. The simpleor non-technical areas generallyhave few permanent intakesor distributionstructures, and water is used by farmerswithoutany controlby the Government. Nearly 19% of the irrigatedarea is coveredby systemssmallerthan 500 ha in size and most of these systemsare either semitechnicalor simpleirrigationsystems. As enunciatedin the Policy Statement (Annex1), the Governmentpolicyis to efficientlyoperateand maintain technicalsystemslarger than 500 ha, and to privatize(i.e. turn over to water users' associations) smallersystems,which are generallysemi-technical or simple. The growth rate in irrigatedarea harvestedhas been 1.6% p.a. between1969 and 1985 (0.5% p.a. on Java, and 3.8% p.a. on outer islandswhere it startedfrom a low base). Virtuallyall this growthis attributableto increasein technicalirrigationsvstems,which grew at 2.5% p.a., largelydue to the rehabilitation and upgradingof existingsemi-technical systems. Over .he firet three Repelitas,rehabilitation and floodcontrol/conservation each accountedfor about 27-28%of totalGovernmentinvestmentin the subsector. The expansionof the irrigationnetworkaccountedfor the largestshareof investmentin the subsector(35%),and this share increasedfrom 22% in RepelitaI to 39% in RepelitaIII (1979/80to 1984/85). However,the maintetnance of the existingcapitalstock in irrigationnetwnrkwas increasingly neglecteddue to an inadequateallocationof funds for O&M, and an ineffective utilizationof the limitedavailablefunds (para.1.24). As a result,a largenumber of weirs and intakesrequirestructuralrepairs,many gates need replacement, and most canals sufferfrom excessivesilt deposition and loss of capacity. Besidescontributing to significant reductionin the efficiencyof the irrigationsystems,a continuation of this stateof affairs could lead to substantialdegradationof the capitalstock in irrigation facilities,and an enormousexpensein rehabilitating it in future. Swamps

1.7 Indonesiahas an estimated35 millionha of inlandand coastal swamps,mostlywith medium to heavy texturedclay and siltyclay soils

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ovetlaid with surface peat. About 5.5 million ha of coastal swamps have been identified as havuingagricultural potential (1.4 million ha in Sumatra, 1.4 million ha in Kalimantan, and 2.7 million ha in Irian Jaya), but conservation of primary forests and land rights are likely to constrain the area that can be developed. About 600,000 ha have been reclaimed through Government sponsored schemes during the period 1969/70 to 1985/86, involving construction of several thousand kilometers of large irrigation and primary drainage canals and a multiple length of smaller drains. The potential for agricultural development is affected by the relatively low first phase investments in basic infrastructure,and considerable improvementsin controlling drainage and on-farm water management are possible. About 80% of these reclaimed areas are dependent on tidal effects for flood irrigation and drainage of land along major rivers. Almost all schemes are classed as nontechnical, with no water control structures and only very limited monitoring of water levels. As in the case of surface irrigation systems, the maintenance of the main drainage systems in reclaimed swamps was to be done through the Provincial Public Works, and farm.ers,through the establishmentof water users' groups, were to operate and maintain tertiary systems. In practice, however, not much is done, because the responsibilityfor O&M of main and secondary systems has not yet been formally transferred from DGWRD to the provincial authorities. Furthermore, prior to 1984, swamp schemes received no regular allocations for maintenance funds, and as a result now suffer from reduced canal sections, silted beds, unstable banks, and broken and settled flood bunds. Where control structures have been built, many have settled and cracked, and these are in urgent need of repairs. If further deterioration is allowed, rehabilitation would prove very costly. Groundwater 1.8 Public sector groundwater activities have been concentrated in East Java. Up to about a decade ago, there was little private participationexcept through hand-dug and manually operated wells and minor developments on the sugar estates. In the mid-1970s, the private sector in East Java developed a technology for construction of low-cost shallow tubewells in the shallow water table areas of flurio-volcanicaquifer systems, but this technology has not yet been exported to any of the other islands. A subdirectoratewithin DGWRD retains O&M responsibility for groundwater facilities for at least two years after commissioning of a public system. During this period, a weter users' group is set up within the tubewell command area, and training is 2rovided to the participants to operate the facility. Subsequently,part of the responsibilitiesfor the salary of the operator, payment for fuel, minor maintenance of the canal system, arrangement for water del.iveriesto individual farmers, and recovery of O&M costs are handed over to the water us* 's group. DGWRD retains responsibility for fuel supply and delivery, for maj maintenance (particularlyof pump units), and for replacement of wells and pump units. This turnover of part of the responsibilitiesto the water users' groups has been generally functioning satisfactorily. Small River Mouths 1.9 There are about 170 major river basins and about 228 sub-basins in Indonesia, over 90% of which are on the islands of Sumatra, Java, Kalimantan

- 5and Sulawesi. High populationpressureon agriculturalland and rapid deforestation have led to soil erosion,sedimentation and floodpeaks in the river enUironment. Most of the 90 or so smallerriversin the northernpart of Java and the easternand westernseab_ardsof Sumatraare also affectedby pronouncedlittoraldrift and barrierbeach formationin the dry season,when compensationflows are inadequateto keep the mouthsopen. The consequent floodingof low-lyingagriculturallands causesmajor delays in plantingdates and lower yields,and also seriouslyinterfereswith the navigationof fishing vesselsservingpoor isolatedcommunities.The economiclossesresultingfrom periodicfloodingof both agriculturaland other landsare signicicant. Raisingof river banks and installation of flood controlgateshave been tried in some of these areas,while in othersa minimumof dredgingor other repairs are carriedout by local irrigationofficialsto preventflooddamage or to keep lines of communication open. However,the recurrentchokingof river mouths continuesto be a problem. D. Institutional Frameworkand SupportingServices IrrigationServicesfor O&M 1.10 The MPW, MOA and MBA are involvedin providingirrigationand relatedservicesincludingtechnicalguidanceto farmerson water use, planningof croppingsystemsin irrigatedareas,timelyinjectionof inputs, and assistancein the organizationof wate, users'groups. Within the ProvincialPublicWorks (DPU),the ProvincialIrrigationService(PRIS)is responsiblefor operatingand maintainingthe public irrigationsystems. The chief of the PRIS is administratively responsibleto the ProvincialGovernor throughthe Chief of DPU, but for all technicaland personnelmatters,the PRIS chief comes under the jurisdiction of DGWRD. Each PRIS,at its provincialheadquarters,includessectionsfor planningand design,irrigation construction, riversand swamps,operationand maintenance, and logistics. The O&M sectionis involvedin preparingoperationplansand guidelinesand O&M budgets,and in ensuringadequateO&M in the province. While several recent Bank-assisted projectshave focussedon buildingup the capacityof PRIS in designand constructionsupervision of small systemsand to improve O&M performance, more institutional strengthening is needed to enablebetter planning,organization, budgetingand controlof O&M activities. 1.11 The O&M for the main irrigationsystemis carriedout mostly by the irrigationsection(cabangdinas)and subsection(rai.ingdinas)staff. A sectionusuallycoversfrom 20,000 to 40,000ha. Each sectionconsistsof about 5 subsections, which are headed by inspectors(pengemats).A subsection officecoversan area of 4,000-6,000ha, and has about 6 irrigationoverseers (jurus). As the junior-most member of the PRIS field staff,the juru is responsiblefor about 1,000ha, setting6 or more gates,recordinghydrologic and croppingpatterndata, arrangingthe emergencymaintenanceof main and secondarycanalswithinhis jurisdiction, and persuadingfarmersthroughi their villageheadmenand irrigationwater master (ulu-ulu)to maintaintertiaryand quaternarycanals,and to agree on plantingdates for rationalwater distribution and management. Each juru is assistedby gate-keepersand a few laborers. The sectionand subsectionstaffare required,as part of the guidelinesfor operation,to estimatecrop areas,stagesof crop growth,crop

water requirements, field applicationand conveyancelosses,and water inflows and outflowsin offtakesand structuresthat usuallyhave adjustablegates. These activitiesrequirehigher technicalcapabilities and numbersof staff than are usuallyavailableat present. 1.12 The ProvinciaiAgriculturalService(DIPERTA)has six subservices, includingagriculturalarea development.This subservicehas a water managementsectionwhich deals primarilywith irrigationsystemdevelopment, on-farmwater management,and water users'associations(WUAs). At the districtand subdistrictlevels,the agriculturalservicesare organizedinto fewer subservices, and water managementis placedunder the plant protection subservice.At the agriculturalservicelevel, thereare water management (Tata Guna Air) staff,whose dutiesincludethe provisionof on-farmwater managementguidanceto WUAs, help in establishing WUAs, and trainingof field extensionworkers(PPL) in on-farmwater management. As in the case of the PRIS, the main weaknessof the watermanagementunitsat the provincial, districtand subdistrictlevelsis the lack of staffboth in numbersand in technicalcapabilities. 1.13 The MHA throughthe variouslevelsof administrative servicesand the agricultural developmentcommitteesis supposedto coordinateirrigation water distribution(throughthe variousIrrigationCommitteesat the Provincialand Kabupatenlevels)and the formationof viableWUAs. Since the IrrigationCommittees(comprising representatives from the PublicWorks, provincial/local, governments, and agriculturalservices)do not have any controlover funds or a workingsecretariat, coordination is generallyweak and most IrrigationCommitteesare virtuallyinactive. While their main task is to determinecroppingplans, in practice,this generallygets decidedby the Governorby officialdecree. Water Users'Associations 1.14 Experiencein Indonesiahas pointedto the need to consultfarmers duringthe design phase of irrigationsystemsand, particularly for tertiary networks,to ensurethat they understandand agreewith the purposeand procedures, and afterwardsoperateand maintainthem properly. Recognizing the importanceof efficientwater managementat the farm level,GOI in 1975 decreedthe establishment of WaAs at the villagelevel. The Presidential Instruction No. 2 in 1984 set out the organizational structureof the WUAs. WUA managementconsistsof a Chairman,DeputyChairman,Secretary,Treasurer and IrrigationWater Master (Ulu-Ulu). Committeemembersare electedby WUA memberswho own or rent irrigatedpaddywithin the tertiaryunit. A typical WUA would operatean area of about 70-100ha, and have a membershipof 100-200 farmers. The membersare dividedinto farm groupsby sub-tertiary and quarternaryblocks. Most of the WUAs have been established along administrative boundaries. As tertiaryboundariesdo not necessarilycoincide with villageboundaries,this has often led to inadequatecoverageby WUAs of tertiarysystems. The task of reorganizing WUAs alonghydrologicboundaries is beingundertakenin some areas. 1.15 As a matterof policy,a WUA shouldbe operationalin each tertiary system. In practice,however,only about 15% of the existingWUAs are active,

- 720% semi-active, and the rest are inactive. TVi lack or inactivityof WUAs may be due to poor tertiarysystemdevelopment.About 35% of the number of tertiariesin the areas identifiedfor specialmaintenance have yet to be developed. While the developmentof tertiarysystemsis the responsibility of the farmersand local committees,the MPW is supposedto providetechnical assistanceand in some cases constructthe tertiaries. 1.16 RecentGovernmentpoliciesto supportO&M and cost recovery stipulatethat WUAs shouldbe given responsibilities for O&M, subjectto constraintsimposedby systems'technicalcharacteristics and administrative boundaries. These policiesimply that in additionto the WUAs' primary responsibility of takingcare of O&M of tertiarysystems,farmerbeneficiaries throughtheir WUAs sharethe costsand responsibilities for O&M of the main systems,and that simpleand smallersystemsbe turnedover to WUAs for O&M. The effectiveimplementation of these policiescalls for the executionof a soundpolicyfor developingWUAs, increasedfarmers'participation in the decision-making processinvolvingdesign,specialmaintenanceand O&M resource allocation,effectivecoordination mechanismsamongWUAs and field staff of concernedagencies,as well as strengthening of O&M field staffand Irrigation Committees,and these would be supportedby the proposedproject. O&M Practices 1.17 Some of the minor maintenanceneeds can be met by regularweeding or grass cutting,greasingor lubrication, and some removalof sedimentupstream of measuringstructures. Other maintenancework involvesrepairof major bank failures,removalof accumulation of sedimentin largecanalsand in beds and sand trapswhich are not easilyremovedby flushing,and reconstruction of civilworks and equipmentdamagedby chemicalaction,volcanicor seismic activity,and major floods. This categoryof works needs systematicsurveys, investigations, planningand design beforereconstruction can be implemented, and is consideredas heavy maintenance. When some deterioration has occurred and repairsare requiredto bring systemsup to full effectiveness, a special maintenanceprogramis requiredbeforean efficientmaintenanceprogramcan be implemented. 1.18 There are widelydifferingO&M practicesamongand within provinces, rcflectingdifferencesin pressureon availablewater supplies, infrastructure, staffinglevelsand quality,and facilities.While individual schemesvary widely in physicalconditionand operationalcapability,most weirs and intakesrequirestructuralrepairs,many gatesneed replacement, most canalssufferfrom excessivesilt depositionand loss of capacity,and tertiarysystemsare generallyinadequateto achievethe full benefitsof irrigation. Some areas have no O&M manualsand no discernibleguidelinesor understanding of water management. At the most basic *vel,there is no measurementof dischargesin riversor canals,collectin of rainfallor crop data, or attemptto match tertiaryunit water supply crop water requirements.There is need to standardize at least ta collectionand water schedulingpracticesamong provincesfor efficient0. and equitablewater distribution.Additionaltrainingof sectionO&M ant design staff is also needed to improvetheir appreciation and capabilitytor tertiarynetwork designand water managementat subsectionand juru level.

-8Staffingand Facilities 1.19 Most PRIS headquartersappearto be overstaffedcompared to the estimatedrequirements, though some have less than the requiredengineer-le;el seniorstaff. On the otherhand, there is inadequacyof staffmembersand quality,particularly at the districtand lower levels. Additionalpengamats and *urus,who play a crucialrole in the case of O&M activities,are needed. A programof constructionof pengamatofficeswas implementedin the 1970s,and a large numberof juru and gate operatorhousinghas been constructedin many provinces. There are, however,stillmany shortcomings with respectto housingfor field level staffand also facilitiessuch as gate shelters,storageareas for stoplogs,and handlinggear. Lack of transport for irrigationstaff is also a seriousimpedimentto the introduction of efficientO&M procedures. Jurus use bicyclesas theirday-to-daymode of transportation and pengamatsare generallyprovidedwith motorcycles,but their staffusuallylack any form of transportto carry out regularchecking of systemmaps and inventoriesfor operationand maintenance.These problems are even more severeat sectionlevel. There is also a need for more radio and telecommunication equipmentto speed up efficientoperationand reduce damageto canalsand structuresduring floods. StaffTraining 1.20 Trainingfor all PublicWorks staff is coordinated by PUSDIKLAT (Centerfor Trainingand Education)withinMPW. In DGWRD,the BDP is the representative officeof the PUSDIKLAT. The BDP is responsiblefor coordinating the trainingof kanwil (regionalofficeof MPW) and PRIS staff. The BDP is also supposedto coordinatethe trainingof water user groups and farmers,throughother directorates.Recentlyconcludedand on-goingtraining programshave includedtrainingof middlelevel and lower level officialsfrom the MPW, MOA and MHA, as well as key membersof WUAs and selectedkey farmers, and have compriseddegreeand non-degreeprograms,shorttrainingcouirses, and in-serviceand on-the-jobprojectspecifictraining. The Bank-financed IrrigationXVI Project (Loan2118-IND)assistedwith the establishment in 1983 of a water users trainingprojectto improvethe tertiaryand quaternarylevel of management. Other projects(includingIrrigationXVII - Ln. 2119-INDand SecondProvincialIrrigation- Ln. 2375-IND)have providedtrainingfor main systemsO&M. However,some of the constraints which persistare: (a) lack of follow-uptrainingand feedbackon the impactof training;(b) inadequate emphasison the detailsof trainingmodules(e.g. farmers'trainingmodules includetoo many topics,rangingfrom soil erosionand environmental aspects to post-harvest technology); and (c) lack of focus in trainingco facilitate properorganization and strengthening of waterusers'associations. In additionto addressingthese constraints, programsneed to be implementedto providetrainingin basic O&M procedures(Annex3, Table 1) along the lines of a programcurrentlyunder way in East Java, with emphasison mobile teams of trainersrather than on bringingthe traineesto a centraltraininglocation.

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E. O&M Fundingand Cost Recovery O&M Funding 1.21 The sectionheads of the ProvincialPublicWorks (DPU)within each of the provincesprepareannuallya budgetrequestfor O&M by January 1 for the followingfiscalyear beginningApril 1. The estimatedbudgetaryrequirements are basedupon the sectionengineer'ssurveyof the conditionof all irrigationworks and his judgementof what he considersis needed for adequate O&M of the irrigationsystemswithinhis section. The total of all O&M budget requestsfor the province,along with the budgetrequestsfor about 18 public sectors,are reviewedby provincialofficials. In practice,the O&M allocationto each sectionis decidedby the ProvincialDevelopmentPlanning Agency (BAPPEDAS)in each provincelargelyon the basis of funds available, rather than on estimatedreluirements. 1.22 Two major channelsfor GOI fundingof irrigationO&M are: (i) INPRES-APBDfunds,which are allocatedfrom CentralGovernmentthroughthe MHA to the ProvincialCovernorrs, who decideon the allocationsfor O&M; (ii) DIP-APBN,which are for similarpurposesas INPRES-APBDfunds, i.e., officerunningcosts, transportcosts,materialcosts,and annual maintenance work, but are allocatedfrom CentralGovernmentfunds,earmarkedfor the MPW, to the districtor sectionoffices. Provincialgovernmentsalso allocate their own funds (DIK) to cover the routinesalariesof province-based civil servants(para.1.24). DirectDIP-APBNfundingfor O&M of irrigationsystems was introducedin 1984/85for some projectswhich had undergone rehabilitation,As a result,the development budget,which shouldnormallybe for financinginvestmentexpenditures, also providesfinancingfor recurrent expendituressuch as O&M. Thus the major issuesto be addressedin funding mechanismsare concernedwith simplifying and rationalizing the O&M programmingand budgetingprocedures, wherebyneeds-basedallocationsfor O&M can be made and the differentchannelsof fundingrationalized. 1.23 Since 1976, the levelof fundingfor O&M (from CentralGovernment) has increasedin nominalterms from an averageof about Rp 2,000/hato abouc Rp 9,000/hain 1985/86,equivalentto a real increaseof about 20% duringthis period. The peak level of supportfor O&M was in 1985/86,when Rp 46.4 billion (APBD-Rp32.4 billionand APBN-Rp14 billion)was providedfor O&M. This was followedby a curtailmentof O&M fundingto Rp 39.9 billion (APBD-Rp31.8 billionand APBN-Rp8.1 billion)in 1986/87,due to severebudgetary constraints(Annex5, Table 1). The averageof APBD and APBN fundingin 1986/87for the provincesselectedfor efficientO&M (Annex5, Table 2) under the proposedprojectwas only about Rp 10,000/ha,and the level of allocation varied considerably among the provinces. For example,Yogyakartawas allocatedan averageof Rp 13,338/ha,while South Sumatrawas allocatedonly Rp 5,848/ha. These wide differencesreflectthe availability of resourcesand varyingprovincialprioritiesratherthan the actualrequirementsfor efficientO&M. 1.24 Anothersourceof fundingfor O&M is DIK, whichare allocationsby provincialgovernmentsfrom theirown fundspurelyto cover the routine salariesof province-based civil servants. However,the preciseamount of DIK

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used fur O&14 is not clear. Based on data gathered from a few provinces, it is estimated that an average of about Rp 3,700/ha is used for O&M (Annex 5, Table 2). Thus, the overall level of funding from all three sources in the selected provinces was about Rp 13,000/ha in 1986/87 which was less than half the estimated expenditure of Rp 25,000-30,000/harequired for efficient O&M. This estimate of the expenditure level required for efficient O&M is based on studies by Gadjah Mada University (1980), West Cirebon study (1983), and estimates made under the Bank-financedEast Java Irrigation Project (1986). These studies also indicate that between 45 and 50% of O&M funds should be used for construction, compared to only about 25% of actual O&M expenditures being presently used for constructionwork. Most available O&M funds are used to cover administrative expenses, which is not an effective utilization of these funds. Cost Recovety 1.25 Irrigation Service Fee. Farmers are responsible for the O&M of only the tertiary systems, and they contribute to O&M in part through their own work and mostly through payment in kind. To date, cost recovery for main and secondary systems has been through the system of land tax (para. 1.27). With a tight budgetary situation, which makes it difficult even to maintain the present level of Central Government budgetary support for O&M, and a growing awareness and need for O&M funding, attention is increasingly being given to the introduction of an irrigation service fee. Such a fee would offer many advantages. It can be geared to the actual financial requirements for O&M in specific irrigation systems and be implemented in such a way that there is a direct connection between payment of the fee and the provision of the O&M service. Indonesian farmers seem willing to pay increased fees if the benefits of the work being finai.cedare clearly visible to them. The establishmentof such fees would further be an important factor in encouraging farmers to get more involved in the O&M process for their systems. In future, water users might be willing to take much greater responsibility for their systems if this would allow them to avoid externally imposed service fees in favor of inte.~nalfees levied by WUAs to finance operations decided on by the WUAs themselves. 1.26 There have already been some initiatives towards collecting irrigation service fees. In South Sulawesi province, a fee has been collected in the Sadang irrigation area (25,000 ha) for tha last five years. Recently, the provincial government in S-ath Sulawesi has formulated an ordinance to introduce the fee on a province-widebasis. A small fee (about Rp 1,000/ha/year)has been collected, together with other village taxes and contributions,in the Simulungan irrigation system in North Sumatra. A fee has also been collected in Bali. However, these limited initiatives do not provide an adequate basis for an immediate launching of a nationwide system of irrigation service fees. The concept, whether it should be a per hectare charge or explicit water charges on bulk sales to water users, the farmers' payment capacity to determine the appropriate level of fee, and the organizationalarrangements needed for collection of the fee, all would be worked out and implemented on a pilot scale under the proposed project.

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1.27 Land Tax. In the past, GOI has not pursued a policy of having an irrigation service fee, because of its (a) reluctance to tax overtly a rural sector considered (particularlyin the 1970s) to be extremely poor, i.e. a reluctance to go beyond the taxation already implicit in the low administered rice price during that period; and (b) sensitivity to certain traditional sentiments that water provided by nature should be free. Cost recovery from the farmers has been through the land tax (IPEDA), which is assessed on the basis of land classification. Its structure and categories have disitinguished between farmers in irrigated and non-irrigated areas, and hence between beneficiariesand non-beneficiariesof irrigation services. However, the IPEDA revenues have not matched O&M costs because of low land valuations, low tax rates, and imperfect collection rates. Moreover, the IPEDA is a major revenue source for local governments and is used to fund many local activities. Therefore, only a small portion of it was, in any event, to be used for O&M of irrigation facilities. The Bank through its various lending operations to the irrigation subsector has supported an improvement in cost recovery through reclassificationof irrigated lands to reflect their higher potential productivity. An allocation of the additional amounts collected for O&M of the irrigation systems was first made under the Bank-financed West Tarum Canal Improvement Project (Ln. 2560-IND). 1.28 ln 1986, GOI introduceda tax for land and buildings, the PBB (based on the actual market value of land), which replaced the IPEDA (based on the productivity of land), and also the wealth tax and the urban household tax. At present, the rural PBB is estimated to be about Rp 60 billion, of which less than 15% is allocated towards O&M. The objectives of the tax reform are to strengthen the revenue base of the provincial and local governments and to improve the overall equity of property taxation. To implement this tax reform, land reclassificationand valuation are needed, and the tax collection mechanisms have to be in place and strengthened. The proposed project would support these, whereby the incremental revenues from the increased valuation of land would help reduce the dependence of the provincial and local governments on financial transfers from the central government, and contribute towards generation of local revenues which are at least somewhat related to the magnitude of the O&M responsibilitiesof the provincial and local governments. However, the PBB would not be a fee for specific services rendered, and it would continue to be regarded as a general source of revenue of local governments for development purposes, but not as a routine O&M fund. F.

Irrigation Development Strategy, Issues and Investment Programs

Subsector Issues and Strategy 1.29 In the last couple of years, Government has been taking steps towards scaling back major expansions in the irrigation subsector, directing increased resourcea towards O&M, and expediting the completion of priority and viable ongoing project3. The Bank and Asian Development Bank (ADB) have also been restructuringtheir ongoing projects to protect activities of highest priority. These are steps in the right direction which should help Covernment cope with the budgetary crisis. However, a sustained development of the irrigation subsector requires a medium-term strategy which will entail

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addressingsome of the underlyingissuesin the sector. First, there is need for an in-depthreviewof the technicaland economicviabilityof all existing and proposedirrigationinvestmentprograms. The purposeof this reviewwould be to restructure and rationalize projects as necessary, establish priorities for irrigation investment, and finalize preparation of a realiotic subsector strategy for Repelita V (1988/89-1993/94),taking into account the likely

availability of funds from differentsources,as well as implementation capacity. While there seems littleprospectof major increasein rice productionon the 1.2 millionha of recentlyrehabilitated large systemson Java, four potentialsourcesof growthin the medium to long term could be: (a) technicalsystemson Java not yet rehabilitated and upgraded;(b) existing semi-technicaland simple systems on Java; (c) existing systems

on the Outer

Islands,includingupgradingand furtherdevelopmentof irrigationcommand areas,and reclaimedswamps;and (d) possiblenew systemson the Outer Islands (prospectsfor which are mixed). Second,as indicatedearlier in paras. 1.18-1,20and 1.24,widespreaddeficienciesin systemoperationand maintenance(O&M)are major constraintsto irrigationdevelopment. This issue is relatedto inadequateO&M fundinglevelsand to the capacityof the irrigationservicesto use efficiently the funds provided. Most availableO&M fundsare used now to cover administrative expenses,with only a quarterof actualexpendituresbeingused for constructionwork. Increasedbudget allocationsthus need to be accompaniedby progressivesystem-by-system formulation of detailedO&M work plans,trainingof irrigationstaff,and regularsupervision and controlof administrative costs. Third, as pointed out in paras. 1.15 and 1.25-1.28,inactiveand weak WUAs which are unable to assun.e responsibility for O&M, inadequatecost recoveryand low levelsof localrevenuegenerationfor financingO&M are constraintsthat have become more importantwith the rapiddeterioration in GOI's financialsituation. Fourth,the water balancein Java,with competingdemandsfrom agricultural, municipaland industrialusers,is becomingcritical,which highlightsthe need for increasedemphasison multi-purpone managementof water resources, increasedirrigationefficiencies, And appropriateallocationof supplies. InvestmentPrograms 1.30 The ongoing public sectorinvestmentin irrigationincludesnew irrigation works,rehabilitation of old projects,groundwaterdevelopmentto facilitatecrop diversification and to provideruraldomesticwater supplies, and river control works to providewater suppliesfor irrigationand municipal uses and for flood controland hydropowergeneration. Public investmentalso includesrehabilitation and reclamation of swamps(tidaland non-tidal),and planning,trainingand researchfor all subsectoractivities. The indicative investmentprogramunder RepelitaIV (1984/85to 1988/89)was to 'indertake rehabilitation of old irrigationsystemscommandinga total area of 360,000ha, undertakenew irrigationconstruction to providewater to 600,000ha, carry out new construction and rehabilitation works on swampsbenefitting460,000 ha, and a programof floodprotectionand conservation on 500,000ha. These programtargetshave turnedout to be ambitious. On the basis of works completedthus far and the currentcutbacksin the programdue to budgetary constraints, it appearsthatonly 40% of the targetfor rehabilitation, 30% of new irrigationdevelopment, 25% of swampdevelopmentand about 50% of the floodprotectionand conservationtargetswill be achievedby the end of the

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plan period(Annex6, Table 1). The financialperformancehas more or less paralleledthe physicalperformance(Annex6, Table 2). For all subsectors, the anticipated shortfallin investmentexpenditures from that originally plannedfor RepelitaIV will be about Rp 4,200 billionor 67%. The shortfall in GOI expenditures will be 77%, while the shortfallin expendituresfinanced by externalloanswill be much less at 43%. In other words, the Government has not been able to keep up with its plannedshare of financingof the irrigationsubsectorinvestmentprogram. 1.31 In view of its budgetaryconstraints, the Goverriment has not only been unableto maintainits plannedsharingof the cost of projectsbeing financedin part by externalborrowing,but has also not been able to finance on an adequatebasis the expandingO&M requirements.OEM expendituresare only about one-thirdto one-halfof those required. Nevertheless,the Governmenthas been takingsignificantstepstowardsallocatingan increasing share of its limitedavailableresourcesin the subsectorfor O&M and (until 1986/87)providingincreasingallocationsfor O&M, as shown below: Table 1.1: SUBSECTORINVESTMENTIN RELATIONTO O&M EXPENDITURES (Rp billion)

Year 1984/85 1985/86 1986/87

Investment Index 644.7 584.5 386.1

100 91 60

APBD 30.7 32.4 31.8

0&M Expenditures APBN Total Index 13.4 14.0 8.1

44.1 46.4 39.9

100 105 90

3&M as percentof Investment 6.8 7.9 10.3

1.32 While the need for increasedfundingfor O&M is fully recognized, the Covernment,nevertheless, has continuedto make furthercommitmentsfor externallyfinancedprojects. Since the beginningof RepelitaIV (1984/85), the Governmenthas commenced21 new projects,partiallyfunded by its three major lenders(WorldBank,ADB and OverseasEconomicCooperationFund (OECF)) for a total of US$936million,which carry a GOI financialcommitment equivalentto US$506million. The breakdownof these commitmentsby major lendingagenciesis shownin the followingtable:

- 14 Table 1.2: 0O0'sCOMMITMENTSFOR EXTERNALLYFINANCEDPROJECTS (commencing1984/85)

LendingAgency

World Bank Other major external financiers Total

No. of Projects

Loan Local funds amounts t lquirements - (US$ million)

5

475

293

16

461

213

21

936

506

1.33 A list of all ongoingexternallyfinancedprojectsis given in Annex 6, Tables4-7. As will be noted, sevenof these projectswere to have been completedin 1985 and 1986. The total loan amount on these seven projectswas US$345.7million,of which US$248.3millionhad been spent up to January1, 1987,leavinga balanceof US$97.4million (28Z of the original loan amount). A summaryof all ongoingexternalloans is given below: Table 1.3. ONGOING (PARTIALLYEXTERNALLYFINANCED)PROJECTS

LendingAgency No. of projects

World Bank Othermajor external financiers Total

Total loan amounts

Spent to 1/1/87 (US$ million)

Balance of loans …

12

1,025.4

432.4

593.0

37

1,156.2

289.3

866.9

49

2,181.6

721.7

1,459.9

1.34 An examinationof investmentexpenditures realizedand budgetedfor RepelitaIV clearlyillustrates the growingmagnitudeof the Government's problemin meetingits commitmentsfor the financingof irrigationdevelopment (see Annex 6, Table 2 for breakdownof expenditureby major categoryof investment).As a result,the Governmenthas reducedits total irrigation developmentprogram,reliedmore heavilyon foreignborrowings,and drasticallyreducedthe numberof projectsunder executionwith solelyGOI financing. In 1985/86,DGWRDwas implementing 202 projects. This number was reducedto 177 in 1986/87,and furtherreducedto 130 in 1987/88. However, under the proposedproject,only about 40 priorityon-goingprojectswould be

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completed, and the others would be further reviewed by GOI to evaluate the.1 technical and economic viability. Most of the projects removed from the program have been placed on a 'hold' basis, with continuing expenditures onl. the for personnel. In short, GOI hat begun to cake steps toWards puttinig subsector on a sounder footing. This is evident from ils: irrigationl (a) reorientationof priorities away from large-scale new investmerltsitn irrigatiotitowards increased expenditures on O&M; (b) focus on the completioll of technically and economically viable ongoing projects; and (c) rephasin,-am, restructuringof ongoing projects (including partially externally-financed projects) to protect high priority activities whilr accommodating reduced budgetary resources over the medium term.

C. Bank Role and SubsectorLendiu_StrateS General 1.35 The irrigation subsector has received a major part of Bank lending for Indonesian agriculture over the past two decades, and the Bank has been the largest external financier of Indonesia's irrigation program, providing a total of some $1.5 billion for 23 projects since 1968. The Asian Developmenw Bank, Japan, Netherlands, USA, UK and EEC have been other importantL doniors. The earliest Bank-assistedprojects were designed to repair major systems to increase rice output quickly. The Bank's strategy in Repelita IV, however, was redirected to emphasize institution-building,with lending being focused on: new irrigation projects outside Java; flood control and drainage works; groundwater development in areas with limited dry season water supplies; and investments for multi-stage swamp reclamation and development in support of COI's transmigrationprogram. The most recent projects include measures te strengthen planning, programmiag, budgeting and management information systems, and to build up the capacity of provincial irrigation services in design and construction supervision of small systems and to improve O&M performance. A further redirection of the Bank's role is required to support ,OI'sefforts to concentrate its resources on completing high-priority and viable on-going projects and undertaking only selecti.e new investments, to make adequate provision for operation and maintenance throughout the subsector, to promote farmers' participationin rehabilitation and O&M of small systems, and to reduce GOI's fiscal burden through appropriate cost recovery measures. A project-by-projectapproach by the Bank on these issues is no longer considered adequate, and it is time to address policy issues systematicallyon a subsector-widebasis, complemented by specific involverfrexit in projects as warranted. Experience Under Previous Projects 1.36 The first 11 Bank-assistedirrigation projects have been completed. Project Performance Audit Reports (PPARs) have been issued for six of them, and a follow-up Impact Evaluation Report on the first project (Cr. J27IND, Report No. 4575) was released in July 1983. improvements to irrigation water supplies and drainage introduced through the projects had a substantial positive impact on paddy technoLogy, cropping intensities and yields, and thereby favorably affected incomes of the vast majority of farmers within the

- 16 -

irrigationcommand areas. The projects have been economically viable, with ERRs at completion ranging from 11% to 37%. There were some implementation delays and cost overruns, caused by protracted procurement procedures, delays in channellingof local funds, higher than expected inflation, design deficiencies,and poor contractor performance. More recently, the delayed approval and reduced size of budgets have further contributed to project implementationdelays and slow disbursement of Bank loans. The earlier performanceaudits highlighted the need to improve O&M services, provide technical and administrative support to water users' associations, and promote efficient water use. In the past, the Bank-financed irrigation projects have supported cost recovery through collertion of adjusted land tax based on the increased productivity of all irrigated land served by the systems rehabilitatedand constructed under these projects. Actual cost recovery through land tax has not satisfied the intentions of the various covenants insofer as the amounts collected have continued to fall short of O&M costs, and only a small fraction of these amounts has actually been allocated to f½nance irrigation-relatedC " activities. The most recent audits have emphasized the need for more -ction on the cost recovery front (particularly through direct charges) and betLer analysis of the viability of investments and farmers' ability to pay, both of which have been affected by falling world market prices for rice. These problems are recognized in the strategy adopted for Bank assistance and have been addressed in the planning and design of the proposed project.

11. THE PROJECT

A.

Rationale for Bank Involvement

2.1 The Bank, through ongoing projects and a continuing dialogue with the Government in the subsector, has been playing a key role in supporting decentralizationof responsibilitiesto provincial irrigation services, and in resolving difficult institutional issues such as water management; project preparation, implementationand O&M capabilities;and funding at provincial levels. The subsector approach proposed under the project, supported by GOI's enunciation of policies aimed at improving O&M of irrigation systems, reducing the burden of O&M expenditures on the Central Government, and consolidating investments in the subsector would reinforce and provide a much-deferred and criticallyneeded national approach to O&Mo This would help widen the development impact of the Bank's assistance by reinforcing the shift in responsibilityfor O&M funding and implementationfrom central to provincial authoritiesand to ultimate beneficiaries, further strengthen the institutions responsible for irrigation policy and resource allocation, prevent deteriorationof the substantial irrigation infrastructure,increase the productivityof completed investments, and help develop a future investment strategy in the subsector. In view of its past and ongoing involvement in the subsector and GOI's readiness now to tackle significant subsector issues, the Bank is well placed to help GOT implement relevant subsector policy and institutionaladjustments.

- 17 B. ProjectObjectivesand Description Objectives 2.2 The projectwould be the f rst phase of a programaimed at supportingthe six basic goals outlinedin GOI's Statementon Irrigation SubsectorPolicy (Annex 1) which are to: (a) ensure adequateand timely fundingfor efficientO&M, with expendituresin line with actualneeds of each irrigationsystem;(b) simplifyO&M programming, monitoringand budget planning;(c) introducedirect cost recoveryfor O&M expendituresfrom irrigationbeneficiaries; (d) increaselocal revenuegenerationthroughland reclassification, valuation,and trainingof assessors;(e) support institutional development,particularly by strengtheningprovincialirrigation agencies,WUAs and farmers'groupsto enablea greatertransferof responsibility for O&M of main and secondarysystemsto provincialauthorities and of smallersystemsto WUAs; and (f) formulatea realisticirrigation investmentstrategyfor RepelitaV. Detailedpolicieshave been formulated for each of these goals, and a monitorableAction Plan (Annex 1) designedto implementthe steps necessaryto achievethem. The Action Plan would set in motiona processof improvementin the areas of O&M funding,rationalization of budgeting/programming proceduresand investmentstrategy,cost recovery, and institutional strengthening, which once institutedwould involvepolicy decisionsand commitmentsthat are unlikelyto be reversed. 2.3 The projecthas high priorityin GOI's developmentplans and is in line with the Bank's strategyfor assistingagriculturaldevelopmentin Indonesia.

ProjectDescription 2.4 The project,to be implementedover the 3-yearperiod from October 1987 to September1990,would consistof the followingcomponents: (a) The implementation of specialmaintenanceworks, comprisingdeferred maintenanceand minor systemsupgrading,on about 400,000ha of irrigatedland and about 106,000ha of reclaimedswamp land, where O&M has been so badly neglectedthat this must be done as a step prior to intzoducingefficientO&M on these areas. About five river mouthswould also be includedfor specialmaintenance,on a pilot basis. Detailedpreparation and designwork would be carriedout for about 200,000ha of irrigatedareas and 55,500ha of swamps requiringspecialmaintenanceto be covered in the first year of a subsequentproject; (b) Systematicintroductionof efficientO&M on about 7009000 ha of irrigatedland, and 87,000ha of swamp land; (c) Completionof about 40 high-prio'ty ongoingprojectsselectedon the basis of agreed technicala economiccriteria;

- 18

-

(d) Pilotgroundwaterdevelopmentthroughconstructionof some 900 tubewellsfor small farmersin primarilyrainfedareas; (e) Supportfor COI's policy reformsin the subsector,including privatization of smallpublic irrigationsystems,a pilot schemefor introduction of directirrigationservicefees,and augmentingthe provincial/local revenuesin lieu of continuedcentralgovernment subsidies

via land reclassification and valuation needed for large-

scale introduction of the new propertytax (PBB) in rural areas; (f) Supportfor institutional strengthening and training,includingO&M manpowerplanningand developmenttstrengthening of the central, provincialand districtlevel institutions responsiblefor irrigationO&M, and of water users' associations; and (g) Technicalassistanceand studiesin supportof the above components. The underpinningfor the proposedprojectis providedby an agreed: Xi) SubsectorPolicyStatement(Annex1) definingGOT's new policy objectives and approaches;and (ii) ActionPlan (Annex 1) of measuresto be taken during the projectperiodto initiatelonger-termreformsa1idimprovementsin support of the policyobjectives. Some of the key actions to be taken over the threeyear period are: (a) the presentlevel of nation-wideirrigationO&M financing would be at leastmaintainedin real termsduring the projectperiod,and incrementalfinancingfor O&M (of at least US$1.6 millionequivalent,as includedin GOI's financingplan) would be providedby GOI (para.3.14); (c) small systemsof less than 150 ha in size, coveringan area of 20,400ha would be privatized(turnedover to WUAs) over the three-yearperiod,at least two systemsof about 500 ha size would be turned over, and a nationwide programpreparedby September30, 1990 for turnoverof systemslarger than 150 ha (paras.2.19 and 2.20); (c) collectionof irrigationservicefee in the pilot areas (a total of 125,000ha) would commencein December31, 1988, and agreedadministrative and judicialarrangements(as found to be workablein pilot areas)wo-.d be establishedby January 31, 1990, for its extensionto other areas (para.2.22);(d) budgetaryproceduresand accountswould be simplifiedby June 30, 1988, and new systemsand proceduresfor O&M programmingand budgetplanningimplementedfrom FY89/90onwards(para. 3.13); and (e) investmentsin the irrigationsubsectorwould be rationalizedand a strategyfor RepelitaV prepared(para.2.11). GOI has recentlyissued the SubsectorPolicyStatementand ActionPlan, approvedby all the concerned ministries(Agriculture, Finance,Home Affairs,Public Works and BAPPENAS). The projectwould be implemented in accordancewith this PolicyStatmentand the ActionPlan reviewedand agreedwith the Bank (Para 7.1 (a)). C. DetailedFeatures SpecialMaintenance 2.5 SurfaceIrrigationSystems. The projectwould carry out special maintenanceworks on selectedsurfaceirrigationsystemsto bring these systemsup to the technicalstandardsfor which an efficientmaintenance programcan be designedand implemented.This would includecompletionof the systemmaps of irrigationcanals,updatingof the structures'inventories, eliminationor regularization of any water outletnot borne on the original

-

19 -

inventory,repairingwater controlstructuresand their regulatingmechanisms, and improvingstructuressuch as bridges,cross drainsand silt control facilitieswhich need repairs. It would also involvefunctionalimprovements such as dischargemeasuringstructureswhere requiredfor improvingwater distributioncontroland efficiency,and repairingcanal prismsand embankmentsto ensure smoothflow and adequatefree boards. The projectwould also providehousingfor operationalstaff and transportfor section offices. Criteriafor selectionof schemes includedfor specialmaintenance and tertiarydevelopmentstatus,and have been based on size,rehabilitation technical of mappingand records. In general,rehabilitated availability systemslargerthan 500 ha, which have deteriorateddue to lack of maintenance,would be includedunder specialmaintenance. About 400,000ha of irrigationsystemsin the nine provincesof West and South Sumatra,Lampung, West, Centraland East Java, Yogyakarta,South Sulawesiand West Nusa Tenggara would be coveredunder the project,with a phasingof 75,000ha in Year 1 (October1, 1987 - September30, 1988) 175,000ha in Year 2 (October1, 1988 September30, 1989)and 150,000ha in Year 3 (October1, 1989 - September30, 1990). The projectwouldalao providetechnicalassistanceto support implementation of this component(para.2.12). Saamp Systems, The projectwould assist in carryingout special 2.6 maintenanceworks on selectedswamp schemes. These works would include desiltingof drainagecanals,flood protection additionalcanal structures, and constructionof additionalflushingcanals works,access improvement, where necessaryfor reclaimingacidic soils. Since the normaldevelopmentof swamp areas involvesa gradualprocessof improvementand upgradingover the years,the specialmaintenanceprogramwould be tailoredto each schemeand involveboth maintenanceand upgradingactivities. The projectwould ensure that there is a systematicplanningat each stage so that the organization, methodsand expenditures on O&M are geared to meeting the performance standardsspecifiedfor the systemsas they are developed. The schemes proposedfor inclusionin the projectwould be in the five provincesof West, Northand South Sumatra,Lampung,and South Kalimantan,which includesome of the earliestreclaimedareas. About 21,800ha in Year 1, 43,800ha in Year 2, and 39,950ha in Year 3 would be broughtunder specialmaintenance. studieswould be carriedout to establishthe technicaland Feasibility economicviabil-tyof constructing a 40 km long flushingcanal in South the water controland agriculturalpotentialof the Kalimantanto inrprove Belawang,Seluangand Muhur schemes. The projectwould also providetechnical assistancein supportof this component(para.2.13). 2.7 SmallRiver Mouths. The projectwould test alternativeand effectivemeasuresto replacethe traditionaldredgingmethodsused to control siltationand littoraldrift,which choke and obstructnavigationof small fishingvesselsand cause floodingof agriculturallands and coastal technical settlements near rivermouths. To explorethe most cost-effective solution,five river mouths in North and West Sumatra,West, Centraland East Java would be includedon a pilot basis under the projectfor protectionby trainingwalls. Studieshave been made during the project experimental preparation stage to evaluatethe chokingprocessfrom littoraldrift. The designof the trainingwalls and the ancillaryworks includingguide banks and the knowledgegained from these approachchannelswould incorporate

- 20 -

on the performanceof trainingwalls and observations.Furtherobservations the ancillaryworks in the preventionof chokingriver mouths would be continuedfor about two years after constructionof the proposedworks. This would help gauge their effectiveness beforetheir applicationto other sites in futureprogrdms. EfficientO&M 2.8 SurfaceIrrigationSystems. The objectivesof specialmaintenance of efficientO&M. Generalproceduresfor facilitate t,ieintroduction are to efficientO&M have alreadybeen developedfor a number of systems in Indonesia,but theirapplicationis hamperedby lack of up-to-dateinventories and continuing and specificO&M guidelines,system shortcomings, organizational and fundingconstraints. The projectwould addressthese constraintssystematically on 200,000ha of irrigationsystemsin Year 1, 400,000ha in Year 2 and 700,000ha in Year 3. The areas coveredunder specialmaintenanceeach year under the projectwould be includedunder efficientO&M in the subsequentyear. Also, some areas currentlybeing under ongoingBank and ADB-financedprojectswould be included rehabilitated in the secondand thirdyears. The physicalrepairand maintenancework to be regularlycarriedout by provincialauthoritiesunder efficientO&M would includeweed clearancefrom canal prisms and embankments,trimmingovergrown canalberms, repairingpotholesin canal roads,damagesto masonry structures and leakag.'s throughcanalbanks, lubricationand repairingof regulation gates,and paintingof steelwork. Repair work of periodicnature would includesilt clearanceof canals,regradingof canal profiles,and repairsto canal surfaceroads damagedby heavy rains and regularheavy traffic. Laboratoryand field equipmentfor provincialirrigationoffices,for testing appropriateness of construction materialsand standardswould be provided under the project. The efficientO&M proceduresto be followedare outlined in Annex 3, Table 1. These procedureswould be supportedby ensuringadequacy of staffresponsiblefor O&M at sectionand subsectionlevels,clear definitionof their dutiesand responsibilities, and their trainingin maintenance work identification, water scheduling,dischargemeasurements,and data collectionand reporting. 2.9 Swamp Systems. About 9,000 ha of swamps in South Sumatra in Year 1, another33,200ha in South Sumatraand Lampungin Year 2, and an additional 44,600ha in South Sumatra,Lampung,South Kalimantan,North and West Sumatra in Year 3 (a cumulativearea of 86,800ha) would be coveredby efficientO&M under the project. These areas includethe Karang Agung I scheme (9,000ha) in the first year of the project,the constructionof which is currentlybeing completedwith Bank assistance(Ln. 1958-IND),and also the completedunits of KarangAguwg II scheme(Ln. 1431-IND),i.e. about 5,000 ha in the secondyear and another5,000 ha in the third year of the project. About 6,500 ha in Barambaiand RantauRassuwould be reviewedby DGWRD to confirmthat these schemes,which are currentlybeing upgraded,are suitablefor introductionof efficientO&M. If found suitable,thesecould be includedunder a possible futureBank operation. Immediately after the completionof special handed over to the provincial schemes would be formally maintenance, the authoritiesfor the introduction of efficientO&M. A schedulefor handing over the projectsto the provincialauthoritiesis includedin Annex 2,

- 21 -

Table 5. The provincial authorities would be assisted by DCWRD during a 1-2 year transition period in organizing the technical aspects and establishing a sound institutional framework for O&M. DCWRD would also review the existing categorizationof the drainage canals in each scheme, on the basis of which a more uniform nomenclature would be applied to all the existing and new swamp schemes. 2.10 The O&M requirements for swamp systems include monitoring, evaluation, data collection and analysis, and regular or periodic maintenance of infrastructure for drainage, flood protection, irrigation and water conservation,control of soil conditions through water management, and on-farm water management. As in the case of surface irrigation systems, technical assistance and advisory services (paras. 2.12 and 2.13) would be provided under the project to DGWRD and provincial authorities for planning and construction of special maintenance works and for Lhe introduction of efficient O&M on swamps. These services would be integrated with the ongoing program in South Sumatra, which the Bank is supporting under the Swamps II Project (Ln. 2431-IND) and for which consultants have been hired to define O&M requirements, specifications,organizational arrangements, procedures, plans of operation, and O&M budgets. The consultants to be employed under the proposed project would build on the work undertaken under the Swamps II project to ensure that uniform O&M strategies would be developed for all swamps projects. Completion of Ongoing Projects 2.11 The proposed project would support the completion of only priority on-going projects which are viable and have so far been wholly funded by GOI but are now held up for lack of funds. These projects would be selected from a list of more than 100 ongoing projects and would have high priority in a resource-constrainedsituation. The selection criteria for these projects have included the status of project completion (at least 30%), adequate water availability and quality, minimal land clearing required, contribution to transmigrationand settlement plans, adequacy of planning and design, length of construction period, and technical and economic feasibility. Of the 16 projects selected for implementation commencing in Year 1, 12 are irrigation projects, 3 are rivers projects, and I swamps project. Details of these projects are included in Annex 2, Table 6. Another 20-25 ongoing projects would be selected for completion in the second year of the project. Some ongoing projects have been under implementation since 1976, while others have been started only in Repelita IV. Construction on most of these projects has proceeded on a piecemeal basis, using annual budget allocations. Headworks have usually been completed and since many of the ongoing proiects have already incurred substantial costs, there can be tremendous economic benefits in completing them with a relatively small incremental investment, provided they are technically sound. The selected projects are mostly run-of-river schemes with a weir for headworks and conventional canal systems. In some of the schemes, the weirs need substaitial closure embankments to encompass flat overflow areas before the water can be headed up for irrigation. In all cases, it is necessary to review the planning and design of the schemes, including drawings, bills of quantities and engineering estimates, before continuing with construction, This could lead to some revisions or additions

- 22 -

in some cases becauseof changes in conceptto suit revisedwater availability or requirements.Detailedpreparatorywork, includingreviewof engineering, planningand design,and preparationof tenderdocumentsand revisedcost estimates,have been completedfor the 16 projectsto be undertakenin the first year of implementation.Upon completionof the on-goingprojects,DGWRD staff presentlyassignedto these projectswould be transferredto PRIS to strengthenthe provincialengineeringservices. The existingproject selectioncriteriawould be reviewedand improvedupon, and an assessmentmase of all the existingand proposedinvestmentprojectsin the irrigation subsector,as a part of the InvestmentStrategystudy, to be carriedout under the project(para.2.35 (b)). Duringthe implementation of this study, the Bank would reviewand commenton the acceptability of the criteriaand the investmentstrategy. It has been agreed that GOI would submit to the Bank in a timely manner, its annual investment program for the FY88/89,FY89/90 and FY90/91.

2.12 Consultancyservicesin supportof the above components(special anaintenance, efficientO&M, and completionof ongoingprojects)would be providedunder the projectto upgradeand strengthenprovincialcapabilities .n: (a) preparation of sample designs,guidelinesand criteriafor special uaintenance and efficientO&M; (b) prequalification, selectionand supervision of localsubconsultants who will be assignedto prepareother special maintenancesurveysand designs,after the sampledesignshave been prepared by the consultants; and (c) supervisionof construction. To assist in implementing the specialmaintenanceand efficient3&M program for the irrigationsystemsin nine provinces,Jatiluhurauthorityand districtof Jogyakarta, one internationally recruitedand two local consultants,would be attachedwith each of them. Their specializations would be in construction and operationof canal irrigationand drainage,with a good knowledgeof soil engineering, materialsspecifications, concreteand masonry structures, qualitycontrolmeasures,laboratoryfield tests and contractadministration. In addition,a team of four internationally recruitedand eight local consultants would assist the provincesin reviewingdesigns producedby the subconsultants for specialmaintenanceand upgradingthe capabilityof provincialstaff in water distributionand regulation. A total of 324 manmonthsof internationally recruitedconsultancy(11 experts)and 756 manmonthsof local consultancy(26 experts)would thus be providedfor the above purposes. In addition,for the small rivermouths works, the project would provide21 manmonthsof internationally recruitedconsultants(2 experts with knowledgeof rivermorphologyparticularlyin estuaryareas, and specialization in river trainingwork) and 72 manmonths(5 experts)of local consultancyservices. For the completionof ongoing projects(irrigationand rivers),the projectwould provide312 manmonthsof internationally recruited (15 experts)and 875 manmonths(35 experts)of local consultancyservices. These would includeexpertisein planning,designand construction.An additional48 manmonthsof internationally recruitedconsultancy(2 experts) and 48 manrmonths of local consultancywould also be providedfor the training of designstaff in the provincesof South Sulawesiand Lampung. 2.13 Servicesof local and internationally recruitedconsultantswith experiencein planning,design, construction, managementand implementation of swamp schemeswould be providedto assistDGWRD and the provincialagencies.

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The consultants'inputswill be requiredfor: (a) the completionof ongoing recruitedexpertsand 51 manmonths projects(54 manmonthsof 2 internationally of 2 local experts);and (b) specialmaintenanceand efficientO&M (47 recruitedexpertsand 165 manmonthsof 7 local manmonthsof 2 internationally would be appointedno later than January 31, experts). All the consultants 1988. Pilot GroundwaterDevelopment The project would providefunds for civil works, equipmentand 2.14 relatedfacilitiesto carry out pilot groundwaterdevelopment,includingthe constructionof: (a) 80 tubewellirrigationsystemsin the tail end of the SampeanBaru surfacewater commandarea in East Java, servingareas of about 25 ha each; (b) 500 shallow,hand drilledtubewellirrigationfacilitiesin the Madiun - Magaatan - Ponorogo area of East Java, with each tubewell serving

an area of about 3 ha of land owned by small farmers;(c) 100 shallowtubewell irrigationsystemsin Nganjuk-Pace,Sidayuand Palangareas of East Java designedto serve commandareas of about 8 ha each; (d) 40 tubewellirrigation systemsin the easternpart of Lombok servingcommandareas of about 7-10 ha each; (e) 100 tubewellirrigationsystemsin easternand northernareas of Lombokservingcommandareas of about 10-14ha each; and (f) 45 tubewell irrigationsystemsin CentralSulawesi(Paluarea - 20) and South Sulawesi (Kalaraarea - 20; Maros north area - 5) serving command areas of about 6 ha each. The projectwould financethe first three year slice of a 5-year programfor East Java and Sulawesi,and a three year slice of a 4-year program for groundwaterdevelopmentin Lombok, 2.15 To assistwith the preparationof the groundwatersubcomponentin East Java and Sulawesi,DGWRD has engagedconsultantsrequiredfor surveyand designwork during1987, under the existingconsultantcontractunder Loan 2119-IND,and would recruitqualifiedconsultantsfor a pericdof about of the two years startingin early 1988 to assistwith the implementation groundwater component. The consultants' input for

implementation,

with

specialization in groundwaterhydrology,drilling,engineering,water managementand irrigationagronomv,is estimatedto amount to about 35 (5 recruitedand local experts)and 120 manmonths(6 experts)of internationally inputsrespectively(Annex4, Table 1). The groundwatersubcomponentin Lombokwould also requiretechnicalassistance,particularlyfor pipe distributionsystemdesign,tenderdocumentpreparationand bid evaluation, for water managementand irrigation drilling,and most importantly, agronomy. For this purpose,the projectwould provide100 manmonthsof internationally recruited(9 experts)and 130 manmonthsof local (7 experts) services(Annex4, Table 1). Their expertisewould be in the consultancy drilling,agronomy,rural areas of irrigationengineering,geohydrology, and agriculturaleconomics. These serviceswould be spreadover development, about 30 months. The foreignconsultancywould be financedby Governmentof DGWRD would Italy. To assistwith the preparationof the Lombok subcomponent, engageconsultantsto be financedfrom Loan 2119-IND. Aerial photomappingof about 31,000ha and orthophotomappingcoveringabout 2,650ha would be carriedout during 1987,with fundingfrom Loan 2119-IND.

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2.16 Prior to startingany implementation activities,DGWRD staff, assistedby agricultural extensionservicestaff and villageleaders,would meet with potentialbeneficiaries, who would need to agree to form a water users'associationfor the O&M of the tubewellsystem to be constructedunder the project. After the tubewellsystemsare put in place, DGWRD would test run all installations and establishtask forces to provideadvice and guidance to the water users'associationson efficientO&M of the tubewellsystem. At the same time, the agriculturalextensionservicewould establishspecial unitsat all kabupatenofficeswhere groundwaterschemesare being constructed, to adviseand guide farmerson what crops to grow, the applicationof rotationalirrigation,and on water managementpractices. Fundingfor this as well as strengthening of agriculturalsupportservicesfor irrigatedagriculturein the tubewellareas in Lombokwould be providedunder the ongoingBank-financed Nusa TenggaraAgriculturalSupportServicesProject (Loan2638-IND)and for the other tubewellareas under the National Agricultural ExtensionIII Project (Loan2748-IND). This would includethe cost for establishingdemonstration plots for irrigatedagriculture. With the exceptionof the tubewellschemesto be constructedin SampeanBaru and Lombok,WUAs would assume fulL responsibility for O&M upon completionof the tubewellschemeinstallation and testingby DGWRD. Completedinstallations would be turned over to the WUAs. For the SampeanBaru and Lombolk wells, DGWRD would contributein the first two years to the operationand mainterance of the installations, in accordancewith proceduresestablishedfor similar facilities under Loan 2119-IND. It is expectedthat for the necessaryrepair of relativelysimplepumps,motorsand distributionsystems,WUAs would be able to call upon privateentrepreneurs, suppliersand contractors,who are increasingly operatingin rural areas. Turnoverof Small IrrigationSystems 2.17 The proposedprojectwould supportthe turnover(or privatization) of small irrigationsystemsto WUAs. The Governmenthas developeda total of 6,731 irrigationsystems,which have an averagesize of about 700 ha each. The numberof systemsunder 500 ha in size is 4,717 and these cover about 19% of the totaldesign irrigablearea but only about 6% of the area under technicallevelof development. Most of the small irrigationsystems (less than 500 ha) are either semi-technical or simpleirrigationsystems. It is generallybelievedthat the farmersthroughtheirWUAs are capableof managing thesesmalland simple irrigationsystemsif the WUAs are active and if the conditions of the systemsare upgraded. The WUAs would also need to be strengthened througha processof organizational developmentand providedon a continuing basis with technicalguidance(para.2.32). As the systemsare upgradedand WUAs strengthened, the major criteriafor selectingsystemsto be turnedover to farmerswould be their size, technicalcomplexity,and institutional capacityof theirWUAs. At present,WUAs are mostly organized on a tertiaryblock basis,which has an averagesize of about 150 ha. There is no federationof WUAs above the tertiarylevel. However,with the provisionof institutional supportto develop system-widef!JAsthat encompass the village associations, even the systems

of up to 500 ha or larger could be

turnedover to WUAs. While the Ministryof PublicWorks could continueto provideconstructionservicesor technicaladvice and the GOI could continue to support,guide and regulatesuch largerassociations,therewould be much

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25 -

greaterscope for local controland much greaterrelianceon locallygenerated O&M resources. 2.18 The projectwould supporta series of activitiesto be carriedout to hand over small systemsto WUAs. These would include: (a) an inventory and selectionof small systemsless than 150 ha in size and having perennial water supplies;(b) selectionand trainingof WUA staff to implementthe turnoverprogram;(c) designingand implementingspecialmaintenanceworks on selectedsystems;(d) institutional strengthening of WUAs and specialized trainingin O&M and handingover; and (e) routinemonitoring. The project would financeabout 60 manmonthsof localO&M engineeringexpertiseto assist with engineeringelementsof the turnoverprogram,the costs of conducting surveysand inventoriesof WUAs, and specialmaintenanceworks, if any. The Ford Foundationwould providefunds for a consultingteam with specializations in communityorganization/institutional developmentand knowledgeof farmers' approachesto irrigationmanagementin small irrigationschemes. These funds (para.2.37)would cover the costs of about 60 man-monthsof local consultancy at the center,about 180 man-monthsof local consultancyin the provinces,and 24 man-monthsof an international institutional advisor. The consultants would assist DGWRD and PRIS with the implementation of the turnoverprogram for small irrigationsystems. 2.19 The followingare the annual target for the turnoverof systems less than 150 ha each, and the projectwould supportturnoverof these systems on about 20,400ha in three years. Table 2.1: TURNOVEROF SMALL IRRIGATIONSYSTEMS Project Year /a

Provinces

1987/88 1988/89 1989/90 1990/91 1991/92 1992/93

2 4 10 17 25 27

2 6 16 -

-

-

Total

/a

Number of Districts

Systems

Areas (ha)

12 48 140 604 750 750

1,200 4,800 14,400 44,909 60,000 60,000

2,304

185,309

October 1 - September 30.

Duringthe projectyear 1987/88,the two provincesselectedfor the turnover of small systemsare West Java and West Sumatra,where a largerproportionof the irrigationsystemsare less than 150 ha in size. 2e20 The pilot areas for the introduction of irrigationservicefee (para.2.21),where WUAs would be establishedat the system/district level,

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would also serve as pilot areas for turningover larger systems. Based on the experienceof these pilot areas (20,400ha), and a turnoverof two systemsof about 500 ha each to WUAs, a nation-wideprogramwould be preparedby COI by September 30, 1990 for turning over

Ir.iritiouL

systems larger than 150 ha.

ServiceFee

2.21 The proposedprojectwould supportthe introduction of irrigation servicefee in selectedpilot areas, and lay the basis for its nationwide extension. The fee can be geared to the actual financialrequirementsfor O&M in specificirrigationsystemsand be implementedin such a way that there is a directconnectionbetweenpaymentof the fee and the provisionof the O&M service. In view of an inadequateexperiencewith the variationsneeded,if any, across regions,in the concept,collectionmechanismsand institutional arrangementsfor an irrigationservicefee, a pilot approachto its introduction is proposedunder this project. Such a pilot approachwould focuson: (a) the farmers'paymentcapacityin order to determinethe appropriatelevelsof the fee; (b) the variationsin the applicationof the fee, rangingfrom a per hectarecharge to explicitwater chargeson bulk sales to water users in differentparts of the system;and (c) the organizational arrangementsneeded for the collectionof the fee. The pilot approachwould also lay the basis for institutionalizing the paymentfor servicesdelivered, and the retentionof the revenuesfrom this fee within the section/kabupaten for O&Mpurposes. The criteriafor the selectionof the pilot areas have been: (a) tne areas are scheduledfor efficientO&M and cover at leastone irrigationsectionor system;(b) the chief of the district(Bupati),who will be the key person in the pilot operation,is supportiveof the ISF concept; and (c) conditionsof the irrigationservicesand WUAs are generally representative of a largerarea of the region. The followingareas would be includedfor the introduction of ISF: Table 2.2: PILOT AREAS FOR THE INTRODUCTION OF IRRIGATIONSERVICEFEE Province

Pilot areas

East Java CentralJava West Java South Sulawesi

PekalenSampeyan Wonogiri/Sukoharjo/Sr&gen Subang SidenrengRappang

Total

Size (ha) 25,000 25,000 25,000 50,000 125,000

In addition,the Simulunganirrigationsystem in North Sumatrais also recommendedfor a similarpilot operation,which would be a componentof a proposed

ADB-assisted

project.

2.22 The proposedprojectwould financethe servicesof consultants (includingper diems and costs of travel)and equipmentand materials. A

- 27 -

consultantteam at the centrallevel (43 manmonthsof internationally recruitedconsultancy,i.e., 2 specialists with expertisein the fieldsof institutior. building,public finance,and 'raining,and 34 man-monthsof local consultancy,i.e., 2 expertswith experiencein technical,social,legal and financialaspects)and a team in each pilot area (comprising a total of 26 manmonthsof internationally recruitedconsultancyand 124 manmonthsof local consultancy, with same expertiseas the team at the centrallevel)would work with the districtlevel irrigationcommitteeto implementthe introductionof irrigationservicefee. The implementation of the stepsneeded for the introductionof the irrigationservicefee (includingformulationof implementation plans,and monitoringand evaluation)would proceedalong the scheduleoutlinedin Annex 2, Table 13. The collectionof ISF in the pilot areas (125,000ha) would commenceby December31, 1988 and the administrative and judicialarrangements(as found to be workable in pilot areas)would be establishedby January31, 1990 for its extensionto other areas. Land Valuationand Strengthening of PBB 2.23 The projectwould supportthe introduction of the new PBB system,l/ which would includethe following: (a) implementingthe new land reclassification and valuationsystemrecentlyadoptedby GOI, based on the marketvalue of the land; (b) an inventoryof land holdirigs based on aerial photography;(c) installinga computerized managementinformationsystem to help improvetax administration; (d) developingan efficientand effectivetax managementand collectionsystem;and (e) strengthening of the Directorateof IPEDA/PBBand its regionaloffices. 2.24 The reclassification and assessmentof land holdingswould entail the productionof rectifiedphotosand maps at suitablescales,identification of propertyboundariesand land holders,valuation,establishment of PBB tax classification, and developmentof effectiveproceduresenablingtax collection. The areas to be coveredwould overlapwith the areas receiving speciaimaintenanceand efficientO&M under the project. The projectwould financethe costs of surveyand mapping,and all the trainingand consultancy per diems and fees. About 40 manmonthsof internationally recruited consultancy(3 expertsin survey/mapping, land classification/valuation and institutional development/training) and 120 manmonthsof local consultancy services(3 expertswith similarexpertiseas the internationally recruited consultants, and a data processingspecialist)would be needed to implement the componentsof land valuationand strengthening of PBB. During the first year of the project,a pilot schemeof surveyand mappingfor land reclassification and registration would be established(on an area of 5,000 ha) to develop simplifiedproceduresfor mappingwhich would use all the existingreliabledata. Considerabletime and cost savingscould be obtained if the existingirrigationphotomapsand IPEDA maps are found reliable,and

1/

The recentlyapprovedUrban SectorLoan (Ln 2816-IND)would support technicalassistance,training,and propertyvaluationsfor the urban PBB improvementprogram,providingthe complementarity needed for Lhe improvementof both urban and rural PBB.

- 28 schedule this would be verifiedin the pilot scheme. The implementation 1988 period)for this pilot scheme is (coveringthe October 1987-January includedin Annex 2, Table 10. About 100,000ha in Year 2 and about 300,000 under the in Year 3 would be coveredfor land reclassification/valuation project. These targetsare additionalto the ongoing land reclassification programbeing supportedby Bank- and ADB-assistedprojects. The IPEDA/PBBdirectorateand its regionalofficeswould require 2.25 additionalstaff,comprisingat least six geodeticengineersand two geographersin 1987 and anotherfive geodeticengineersin 1988. A number of techniciansand surveyorsalso need to upgrade their skills(para.2.31). As development,there is also a need to review the existing part of institutional organizational structureof the IPEDA/PBBdirectorateand its regional offices,includingits key functions,staffinglevels,informationflows, and specialization requirements.The Bank-supported Urban Sector Loan (Ln 2816-IND)would assistwith the preparationand implementation of action plans needed to strengthenthe organizationsinvolvedin land valuationand tax collection. Under the proposedproject,two tax advisorsfor rural PBB would be appointedby April 30, 1988 to help improvetax administration throughcomputerization and betterprocedures. Institutional Strengthening and Training ManpowerDevelopmentfor Systems0&M. To strengthenO&M 2.26 capabilities, the staffing(pengamats,jurusand water regulationpersonnel) in districtand lower level units in the districtswould be increasedto meet as assessedby DGWRD and PRIS. The swamp areas to be the requirements, coveredby efficient0&M under the projectare also estimatedto requireabout 30 incremental pengamatsand about 90 jurus. Adequateprovisionswould be made for fulfillingthe additionalstaffingrequirements(ActionPlan: Annex 1). Detailsof the trainingprogramswere reviewedat a?praisaland are 2.27 given in Annex 3, Table 2. Assuranceswere obtainedat negotiationsthat the trainingprogramswould be carriedout in accordancewith the timetableand terms of referencesatisfactoryto the Bank (para.7.1 (b)). The proposed projectwould financetrainers'fees and per diems, classroomrental, furnitureand equipment,suppliesand materials,local travel, salariesof supportstaff,and consultancyfees (paras.2.32 and 2.33). About 3,000 middle and lower lower levelO&M staff in irrigatedand swampareas would undergotrainingin basicO&M dutiesand practicalskills. These would includemaintenance of basic irrigationrecords,principlesof water control and operation,dischargemeasurement,maintenancerequirementsand the estimationof associatedcosts. Some 110 trainersin both irrigatedand swamp areas would also be trainedin O&M procedures. About 420 technicalhigh schoollevel staff (usuallypengamats)would be trainedin O&M coursesoffered at the PUSDIKLATregionaltrainingcenters. In addition,some 275 BIE level engineerswould undergospecializedtrainingcoursesin O&M. The subdirectorate of DOI-IIresponsiblefoi the groundwatercomponent,together with staff of the agriculturalextensionservice,would developtraining programsfor WUA leadersand pump operators. The trainingwould focus on the operationand maintenanceof pumps, enginesand PVC pipe distributionsystems,

- 29 -

efficientuse of pumpedwater, rotationalirrigation,crop selectionand water managementpractices. Trainingpracticesand materialsdevelopedon groundwaterprojectselsewherein Indonesiawould be utilizedto the extent possible. It was agreed that the Governmentwould arrangefor alternative financingto providefor a study tour to areas outside Indonesiawhere the exploitationof low-lifttubewellsfor irrigationdevelopmentby smallholders takes place extensively,using shallowgroundwaterresources,and where modern publictubewellsysce.ms with loopedpipe distributionand automatedpumping systemshave been introduced. Staff of BAPPENAS,DGWRD and Provincial IrrigationServiceswould participatein the study tour to benefitfrom recent innovationsin tubewelltechnology. 2.28 Sincemost provinceslack senior-level staff,and a seksihead shouldbe at least of Bachelorof Engineering(BIE) level,some 72 PRIS staff would undertakethe diploma/degree orientedBIPOWEREDtrainingin Bandung. In addition,about 26 senior level staffwould undergoMaster'sdegree level overseastrainingcourses. These trainingcourseswould includevarious specializations such as water resourcesengineering, managementand hydraulic engineering. The representative office (withinDGWRD) of the Educationand Trainingdivision(BDP)would also establish,by February29, 1988,a data bank for the effectivedissemination of trainingneeds of PRIS. 2.29 Strengthening of WUAs and IrrigationCommittees. Chart 3 presents the IrrigationCommitteesat the scheme for developingWUAs and strengthening the provincialand lower levelsunder the project. The institutional would includethe aspectsof organization/coordination, strengthening regulation/administration, budgetingand financing,and other supporting elementsneeded by the institutionsinvolvedin irrigationmanagement. At the districtand lower levels,the priorityactivitieswould be the collectionof benchmarkinformation on WUAs and the settingup of WUA Action Groups,which would serve as catalystsof WUA developmert. These Action Groupswould draw theirmembershipfrom the more senior level staffof the districtunits of PublicWorks,Agricultureand Home Affairs. Dependingon the size of the irrigablearea in each district,one to four actiongroupswould be establishedin each district. A quick inventoryof WUAs to establish, benchmarkinformation on activitystatus,organizational boundaries,awareness of duties and responsibilities and developmental problemsand constraints, would be carriedout by the districtand subdistricts.affof PublicWorks, Agricultureand Home Affairs. The projectwould financethe costs of conductingsurveys,includingtravel, salaries,suppliesand materials. The ActionGroupswould be establishedby January31, 1988 and the inventoryof at least 10 WUAs would be completedby April 30, 1988. By September30, 1990,at least 20 new WUAs would be establishedand 200 existingWUAs strengthened. 2.30 About 200 Action Group memberswould undergoa 2-monthtrainingon communityorganization under the project. To reach the large number of target WUAs, the Directorateof AgricultureArea Development(DAAD)in cooperation with Action Groups,Home Affairsand DOI-IIwould also train some 1,020 seksi, subsectionand villagelevel staff of the departmentsof Agricultureand Home Affairson WUA organization and development. The targetparticipantswould includePPLs or extensionworkerswho will devote30-50%of their time to WUA development.The projectwould also providefunds and technicalassistance

- 30 (para.2.32) to train 1,500 middle level provincialand districtstaff,4,040 subdistrict and villagelevel staff,360 instructorsand 8,800 WUA members and key farmers. In addition,there would be a follow-uptrainingfor about 6,700 WUA members. 2.31 Duringthe 3-year projectimplementation, about 175 staffwould be trainedin the fieldsof cartography,specializedsurveyingland valuation, tax managementand administration, mapping,and in evaluation/assessment criteriafor PBB. The projectwo'ld also provideabout 10 man-monthsof overseastrainingfor PBB staff,includingshort-term(3-6 month) scholarships to overseasuniversities/technical institutes. 2.32

A totalof 90 and 192 manmonthsof internationally recruitedand

local consultancy services

respectively, comprising 5 internationally

recruitedand 9 localO&M expertsand trainingspecialists, would be provided to DOI-I for on-the-jobtrainingof staff for main systemsO&M. Another 27 manmonthsof internationally recruitedand 30 of local consultancy (1 internationally recruitedand 1 local trainingspecialist)would be providedto Directorateof Swamps (DOS) for on-the-jobtrainingof staff in O&M in swamp areas. The projectwould provide 126 manmonthsof internationally recruitedand 210 manmonthsof local consultancyto DOI-II for coordinatingtrainingand organizingworkshopsfor provincialstaff and WUAs, in the fieldsof tertiarysystemsO&M and on-farmwater management. Their expertisewould be in the fieldsof O&M and on-farmwater management (3 internationally recruitedand 5 local experts),training(1 internationally recruitedand 1 localexpert),and audio-visualmaterialproduction (1 internationally recruitedand 1 local). This would be complementedby 90 manmonthsof internationally recruitedand 300 manmonthsof localconsultancy servicesto DAAD,mostly in the fields of communityorganizationand rural institutional development(3 internationally recruitedand 10 local experts). 2.33 Under the project,BDP would be strengthenedin order to improveits capabilitiesto coordinate,monitor,evaluate,as well as plan and conduct short trainingcourses,help analyzetrainingneeds,manage trainingprograms and disseminateessentialtrainingmaterialsand information.The BDP and PersonnelDivisionwould be providedwith 114 manmonthsof internationally recruitedand 180 manmonthsof localconsultancy(4 internationally recruited and 6 local experts)with expertisein the fields of training--nagement, monitoringand evaluation(M&E)and manpowerplanning. Another 12 manmonths of internationally recruitedconsultancy(M&E experts)would be providedto the Directorateof Planningand Programmingfor monitoringand evaluating physicalprogressof the project. Funds to cover operatingcosts, consultancy costs (42 manmonthsof local M&E expertiseand 24 manmonthsof local MIS expertise)and the purchaseof additionalmicro computersto meet the monitoringand evaluation(M&E)and managementinformationsystems (MIS)needs for O&M at the PRIS levelwould be providedunder the project. TechnicalAssistanceand Studies 2.34 The projectwould providetechnicalassistanceamountingto $45 million (as indicatedearlierin paras. 2.12, 2.13, 2.15, 2.18, 2.22,

- 31 2.24, 2.32, 2.33) for planning,programming, designsand specifications, institutionalstrengthening, turnover of small irrigatiOn systems, introduction of irrigation service fee and land reclassification/valuation,

The estimatedcost of $45 millionfor technicalassistanceincludes contingencies of about $5 million,internationally recruitedconsultancyof about $19 million (of which $4 millionwould be be grant-financed), and local consultancyof about $21 million. Of the local consultancycosts of $21 million,about $10-12millionis the estimatedcost for local subcontractsfor detaileddesigns. This large technicalassistanceis neededbeca,ise the projectis spreadover 16 provinces,involvesthe departmentsof PublicWorks (includinga number of directorates within DGWRD),Agriculture,Home Affairs, BAPPENASand Finance,not only at the centraland PRIS level,but also at the districtand section/subsection level,and entailsapart from physical implementation of the project,institutional strengthening, particularlyat lower levels,variousstudies,and initiationof severalpolicies. The terms of referencefor all the consultantsand the invitationdocumentshave been finalized,and assurancesobtainedthat the eonsultantswould be selectedby January31, 1988 (para.7.1(c)). The selectionof consultantswould be in accordancewith Bank guidelines. Detailsof the consultancyservices(about 1,671manmonthsof internationally recruitedconsultancyand 3,944manmonths of localconsultancyservices),which are the minimumneeded to implementall the componentsof the project,are containedin Annex 4, Tables 1 and 2. The consultancyserviceswould be providedat three levels. At the central level, there would be technicalassistanceto the ProjectCoordinating wit Nithin DGWRD)and to the inter-agency coordination group (para.3.8). Advisoryteams would also assist the PRIS and the districtsor sectionsin the technical aspectsof implementation, the introduction of efficientO&M procedures,and in the preparationof annualbudgetsneeded for efficientO&M. Some of the consultancyinputs,particularly for the provincialdesignunits, studies, policy initiatives,introduction of efficientO&M procedures,and some elementsof institutional strengthening/training would no longerbe required during the subsequentBank operationsin the irrigationsubsector. It was agreedduringnegotiations, that any subsequentoperationof a similarnature would requiresmallerscale of technicalassistancethan envisagedunder this project. 2.35

Studies (a) Institutional Strengthening Study. In view of the changingnature and directionof irrigationexpendituresincreasingly towardsO&M, a reviewand reassessment of the roles of the variousorganizations involvedin planning,organizing, directingand controllingO&M activities,is needed. In the case of provincialirrigation authorities,this impliesa greaterautonomyin planning,budgeting and upgradingof their staffand facilities. In the case of DGWRD, its envisagedrole couldbe more of a plannerof new systems development. This changingrole, in turn,could requirea reorganization within DGWRDentailinga shiftof manpowerand other resourcesto PRIS, more DGWRDattentionto the developmentof policiesand proceduresto be adoptedat the provinciallevel rsther than a centralcontrolof O&M activities, as well as greaterrole in monitoringPRISo In view of the interlocking technical,managerial,

- 32 -

administrative, institutional and financialissuesthat would have a bearingon such an alignmentof institutional responsibilities, a study to define the necessarychangesand adjustmentswould be initiated. The studywould requirethe servicesof 4 internationally recruitedconsultants(6 manmonthseach) with expertisein the areas of irrigation,institutional development, managementsystemsand financialsystems,and 3 local consultants (22 manmonths)with expertisein institutional development, managementsystemsand legal aspects. The studywould be completed by September30, 1988, and upon taking the Bank'scommentsinto account,the recommendations of the study would be implemented commencingJanuary 1989 (ActionPlan: Annex 1). (b) InvestmentStrategyStudy. An indepthreview is needed to develop and improveupon the existingcriteriafor projectselectionand to assess

the viability of all existing and proposed irrigation

investmentprograms,and prioritizethese investments, with a view to droppingthe non-viableinvestmentsand restructuring projectsto protecthigh-priority activitieswhile accommodatingreduced budgetaryresources. The purposeof the investmentexpenditures reviewwould be to rationalizethe existingportfolioof projects being implementedand to formulatean appropriatedevelopment strategyand investmentprogramsfor RepelitaV. A studywould need to be made of both the physicaland expenditurestatusof each ongoingproject. Only a project-by-project assessmentcan help determinethe projectswhich should be given priorityin the allocationof funds at sufficientlevelsto maintainefficient implementation schedules. The studywould providethe basis for making the right choiceson continuingor discontinuing ongoing projects,the adding of new projectsto the portfolio,and maintainingthe proper balancebetweeninvestmentand recurrentO&M expenditures.The study would requirethe servicesof 3 internationally recruitedconsultants(18 manmonths),with expertise in fiscaleconomics/public financeand engineering,and 6 local consultants(36 manmonths),with expertisein generaleconomicsand irrigationbackground. This studywould be completedby July 31, 1988, to enable an input into the RepelitaV strategyand investment programs(ActionPlan: Annex 1). (c) Environmental ImpactStudies. To addressenvironmental concernsof the project,particularly for ongoingprojects,five environmental studieswould be includedunder the project. These studieswould mainly focus on the impactof irrigationon the population,health, malariacontrolprograms,and introductionof safeguardsto protect irrigationand groundwatersupplyfrom contamination.Previous environmentalstudiescommissionedby DGWRDwere satisfactorily carriedout by local universitieswith minimal assistancefrom international consultants. The selectionand number of consultants would be in accordancewith issuesto be studiedunder each selected ongoingproject. The studiesare estimatedto requirethe services of one internationally recruitedconsultant(6 manmonths)and about six localconsultants(82 manmonths)with expertisein the areas of

- 33 irrigation, sea water encroachment(in groundwaterareas),malaria control,use of agrochemicals, pollutioncontroland ecology. DWWRD would informthe Bank by January31, 1988 about the selectedongoing projectsfor which the environmental studieswould be undertaken. Assuranceswere obtainedduring negotiations that these studies would be completedby March 31, 1990 (para.7.1(d)). D. Cost Estimates 2.36 Total cost of the project,includingphysicalcontingencies and expectedprice increases,is estimatedat about Rp 592.4billion (US$359.1million),with a foreignexchangecomponentof US$ 148 million,or 41%. The cost estimateis basedon September1987 pricesand includestaxes and dutiescomputedat Rp 30.6 billion (US$18.5million). Civil works estimatesare derivedfrom costsof projectsalreadyunder execution,as well as detailedestimatesfor 13 sampleareas in six provinces. The averagecost of civil works for 16 ongoingprojectsalreadyselected(the constructionof which will commencein Year 1) has been used as a basis for estimatingthe costs of additionalongoingprojectsto be selectedin the secondyear of the project. Equipmentand vehiclecost estimatesare based on price quotations from suppliers,cross-checked with the pricesof comparableunits recently purchasedor curr..Atly being procuredby variousagencies. Foreign consultants'averagebase costs have been estimatedat US$12,000per manmonth, includingprofessional fees, overheads,traveland overseasallowances. Local consultants'costs have been taken at US$2,500per manmonth. These costs are based on experiencewith recentconsultancycontractsin Indonesia. Physical contingencies (to allow for possibledesignvariations)have been assessedat 15% of the cos. of civil works, 10 of the cost of equipmentand vehiclestand 5% of the cost of consultancyservices. Price contingencyestimatesassume increasesin local currencycosts of 10% in 1987, 5% in 1988,and 3.5% per annum thereafter(basedon expecteddomesticinflation), and in foreign exchangecosts of 3% in 1987,and 1% per annum thereafter. Projectcost estimatesare summarizedin Table 2.3 below and detailedin Annex 2, Table 1.

- 34 -

Table 2.3: PROJECTCOST SUMMARY Local Foreign Total Foreignas Local Foreign Total ---(Rupiah billion)--- ----(US$'million)---- X of total SpecialMaintenance IncrementalOperations and Maintenance RecurrentOperationsand Maintenance/a OngoingProjects GroundwaterDevelopment Institutional Development Turnoverof Small Systems Introduction of Irriga-

74.5

45.7

120.2

45.2

27.7

72.9

38

15.7

10.0

25.7

9.5

6.1

15.6

39

72.8 100.4 10.8 11.4 3.5

57.6 70.2 9.9 20.4 1.1

130.4 170.6 20.7 31.8 4.6

44.1 60.9 6.6 6.9 2,1

34.9 42.5 6.0 12.4 0.7

79.0 103.4 12.6 19.3 2.8

44 41 48 64 24

3.0

1.6

4.6

1.8

1.0

2.8

36

3.9

2.2

6.1

2.3

1.3

3.6

36

296.0

218.7

514.7

179.4 132.6

312.0

43

25.7 26.6

20.5 4.9

46.2 31.5

12.4 3.0

28.0 19.1

44 16

348.3

244.1

592.4

211.1 148.0

359.1

41

tion Service Fee - Pilot

Schemes and Land Reclassification Valuation Total BaselineCosts /b PhysicalContingencies Price Contingencies Total ProjectCosts /a

Th

15.6 16.1

Presentlevels of O&M expenditures. Includestaxes and duties amountingto US$18.5millionequivalent.

L.

Financing

2.37 The proposedBank loan of US$234millionwould finance94% of the foreignexchangecosts and 45% of the local currencycosts of the project. This represents69% of total projectcosts,exclusiveof taxes (US$ 18.5 million). Provisionfor retroactivefinancingof US$5 million has been includedto cover eligibleexpendituresunder the 1987/88budget starting from September1, 1987. This would enable the projectmomentumgained during the preparationperiod to be maintained. The Governmentsof Italy and the Netherlands,and the Ford Foundationare expectedto provide$15.4 million, bringingtotal externalfinancingto $249.4million,or 69% of total costs, covering100% of foreignexchangecosts (US$ 148 million)and 48% of local costs. The Governmentof Italy is expectedto provideabout $1.6 million for equipmentand $1.4 million for technicalassistancefor the Lombok groundwater component,and the Governmentof Netherlandsis expectedto provideabout $2 strengthening study, millionfor training,$0.4 million for the institutional and $9.4 millionof joint financingwith the Bank for civil works to be undertakenfor specialmaintenanceand efficientO&M. The Ford Foundation would provideabout $0.6 millionfor consultantteams needed to assistwith

- 35 the implementation of the turnoverof small irrigationsystems. GOI would financethe remainingprojectcost of $109.7millionfrom its development budget (or a net contributionof $91.2 millionafter taxes and duties). This contribution would requireGOI to maintainthe presentlevel of O&M expendituresin real terms,amountingto $83.2millionover the three year projectperiod. The Bank would financepart of incremental O&M costs for each area comingon streamunder the projecton a decliningbasis. Over the largershareof project implementation period,GOI would meet a progressively incrementalO&M expendituresin projectareas, increasingfrom about 10% in ?rojectYear 2 to 17% in Year 3. This contributionof GOI would amount to $1.6 millionover the threeyears. Costsof land acquisition(aboutUS$6 million)and a part of the costs of the investmentstrategystudy (US$0.4 million)would also be financedby GOI. The financingplan for the project, includingspecificexpendituresto be financedby GOI, was agreed during negotiations.The projectfinancingplan is set out in Table 2.4 below,and the phasingof GOI contributions(by GOI fiscal year) is containedin Annex 2, Table 2. Table 2.4: PROJECTFINANCINGPLAN (US$ m.llion)

Fundingsource Bank Governmentof Netherlands Governmentof Italy GOI Ford Foundation Total

Ia

Foreign

Total Project cost

94.4

139.6

234.0

65.2 /a

6.4 0.3 109.7 0.3

5.4 2.7 0.3

11.8 3.0 109.7 0.6

3.3 0.8 30.5 0.2

211.1

148.0

359.1

100.0

Local

Percent

69% of projectcosts,excludingtaxes. Schedule F. PreparationStatusand Implementation

Irrigation 2.38 Sampledesignsfor specialmaintenanceof irrigationsystemsserving 50,000ha are completed. This work was begun in September1986 by DGWRD, assistedby the consultants(MacDonalds/Indah Kary-)responsiblefor project preparation. It includedupdatingof systemsmaps, reviewingspecial and preparingdetaileddesignsfor special maintenancerequirements maintenancework on 50,000ha. Contractsfor preparingdetaileddesignsfor 75,000ha to be coveredin Year 1 have also been made by GOI with local cunsultingfirms. These detaileddesignshave been substantially completed. Designs for 175,000ha to be covered in the sEcondyear is nearing

- 36 -

completion. March 1988, and for the remaining150,000ha by March 1989. Technicaland economicviabilityof sixteenon-goingprojectsto be implementedin Year 1 has been evaluated,and contractsfor additionalsurvey and designwork requiredfor completingthese on-goingprojectshave been signed. The remainingdesignwork of theseprojectsis nearingcompletion. Designsfor small river mouths were completedin August 1987. The implementation schedule(includingnecessaryprocurementactions)for irrigationworks is includedin Annex 2, Table 3. Swamps 2.39 Preparatorydesignsare in progressfor specialmaintenance constructionin the first year of the project. Designsfor special maintenanceof the drainagecanalsserving43,400 ha are completed,for another38,800ha would be completedby March 1988,and for the balanceof 23,350ha by December1988. Detaileddesignsfor the completionof an ongoing project(Mesujischemes)were preparedby the TechnicalInstitutein Bandung, and reviewedby consultantsengagedunder the Bank-supported Swamps I Project (Ln. 1958-IND). Most of the excavationworks for drainagecanals on about 12,400ha in Mesuji schemeshave been completed. The designsfor remaining 7,600 ha would be completedby March 31, 1988. The detaileddesignsfor the secondongoingprojectto be implementedin Year 3 would be completedby March 1989. Groundwater Development 2.40 Field surveys(topographyand soils)for 480 ha in Madiun are substantially completed,and for 500 ha in SampeanBaru would be completedby February1988. Detaileddesignsfor 270 ha in Sulawesiare nearing completion, and for 740 ha in Madiunand SampeanBaru would be completedby March 1988. Surveyson the remainingarea in Madiun and SampeanBaru (1,920ha), and detaileddesignson about 1,600ha in SampeanBaru, would be completedby December1988. Designsfor 560 ha in Madiun would be completed by March 1989. Constructionof tubewellirrigationsystemswould commencein 1988. During 1984-86,the Governmentof Italy providedDGWRD with consultancy servicesfor groundwaterinvestigation in Lombok. In additionto carryingout surveysand feasibilitystudies,the consultants(ElectroConsult)trained DGWRD personnelin drilling,logisticsupport,hydrogeology, irrigation design,and agroeconomic data collection, as well as conductingshort training courses. The constructionof tubewellsin Lombokwould commencein 1988,with the exceptionof 4 wells which have alreadybeen drilledand are ready to be equippedand put in operation. The phasingof the construction of the tubewellirrigationsystemsis containedin Annex 2, Tables 7 and 8. G. Procurement CivilWorks 2.41 Civilworks for specialmaintenanceand completionof ongoing projectsare estimatedto cost about US$148million. Of these,works costing about US$89 millionwould be small in scal^,dispersedover 16 provinces,and requireclose interactionwith iillagersboth as beneficiaries and as laborers. They are thus unlikelyto attractforeigncompetition, and would be

-

37 -

largelytenderedon the basis of competitivebiddingadvertisedlocallyin accordancewith GOI proceduresacceptableto the Bank. Civilworks packages competitive largerthan US$3 million would be procuredthroughinternational bidding (ICB). Such packagesare not expectedto exceed six in number,and to total about US$30 million in value. Thesewould includeabout six ongoing GOI-fundedprojects(includingtwo in the first year of the project: Sanrego and Tulan Mas). Efficientmaintenanceworks ($13.1million),a part of the works ($28.9million)and other maintenanceworks specialmaint 7ance ($25 million)- would be largelycarriedout under force accountby the PRIS. This would be the most economicaland efficientmethod in Indonesiafor works that cannot be fullydefinedin advanceand for activitiesthat civil, to be carriedout with least disruptionto ongoingoperations. Civil need US$2.5million works for the groundwatercomponentcostingapproximately equivalentwould be procuredthroughLCB using GOI proceduresacceptableto with DGWRD the Bank. Well drillingwould be undertakenby local contractors, providingdrillingrigs, well materials,and skilledsupervisorystaff. The foreigncontractorswould not be interestedin such drillingwork, in view of the small size of contracts. Furthermore,equipmentcurrentlylyingidle with DGWRD would be utilizedfor drilling. Equipmentand Materials Equipmentand materialstotallingUS$15.3million,including 2.42 procurementof vehicles($800,000)would be bulkedto the extent possibleinto lots for procurementunder ICB proceduresin accordancewith Bank guidelines would be alloweda for procurement. In bid comparison,localmanufacturers 15% margin of preferenceor the applicablecustomsduty, whicheveris lower. Equipmentwhich cannotbe suitablybulkedand other packagesof small items costingless than US$200,000equivalenteach, up to a total limit of US$5 million,may be procuredby DCWRD'sDirectorateof LogisticsthroughGOI procurementproceduresacceptableto the Bank. Procurementof materialsand equipment($6.5million)for groundwatertubewellsystemswould be divided into two packages. The first package,which is to be procuredduringthe first projectyear, would providematerialsand equipmentfor the schemesto be installedunder this project. The secondpackagewould providefor materialsand equipmentto be installedunder a possiblefutureproject. Procurementand Bank financingof the secondpackage(valuedat about $2.5 million),which would be carriedout during the third year of the project, would be subjectto satisfactoryprogresson arrangementsmade by GOI to would be provided. This would be a ensure that financingfor installation conditionof loan disbursements(para.7.2(a)),againstthe secondpackageof materialsand equipmentfor groundwatertubewellsystems.

2/

would be for civil About 30% of the presentlevel of O&M expenditures salaries. worksp and the balance for O&M staff

- 38 -

CotsultancyServices 2.43 The consultancyservices($45million),with the exceptionof those needed for detaileddesignsof specialmaintenanceworks and ongoingprojects, and thosegrant-financed by cofinanciers, would be procuredinternationally, in accordancewith Bank guidelines. GOI envisagesuse of jointventures between foreignand local firms for this purposeunder arrangements acceptable to the Bank. The detaileddesignsof specialmaintenanceworks and ongoing projectswould be carriedout throughlocal .ubcontracts under the supervision of the consultantsrecruitedinternationally.The consultancyserviceswould be packagedfor procurementas follows: (a) one pac4.age for specialand efficientO&M on irrigatedareas and relatedtrainingin all provinces;(b) one packagefor ongoingirrigationprojects;(c) one packagefor ongoing swamps projects,and specialand efficientO&M on swamps,includingtraining; (d) one packagefor smallriver mouths and ongoingriver projects;(e) a packagefor each study;and (f) two packagesfor trainingof water users'and one packagefor trainingof provincialdesignunits. Reviewof Procurement 2.44 ICB procedureswould be used for civil works contractsexceedingthe value of US$3.0 million,and for equipmentand suppliescontractsexceeding the value of US$200,000. Civil works and equipmentwould be procuredby the responsibleimplementing agency,using contractdocumentsacceptableto the Bank. An independentbut internalcontrolof all procurementis made by the DGWRD Secretariat,and largercontracts(Rp 500 millionand above)would be clearedby the State SecretariatProcurementControlUnit (SEKNEG). It is estimatedthat about 50 civil works contracts,in additionto five consultancy packages,would be reviewedby SEKNEG. These procurementcontrolsappear to be working satisfactorily.For civil works contracts,the Bank would review prior to tenderingand award about 40 contracts($85 million),each over US$1.5million,coveringin aggregateabout 50% of the valueof civil works. The remainingcivil works contractswould be reviewedby the Bank on a postaward samplebasis. Equipmentcontractsto be procuredthroughICB ($15.3million)would be reviewedby the Bank prior to tenderingand award; small equipmentcontractsnot exceeding$200,000(withan aggregatevalue of $5 million)for local procurementwould not be reviewedby the Bank becauseof their simplenature and small value. All consultantinvitationdocuments, proposedawards,and contractswould be reviewedby the Bank. Procurement arrangements are summarizedin Table 2.5 below.

- 39 Table 2.5: PROCUREMENTPLAN

ICB

Civil Works - SpecialMaintenance -

OngoingProjects

-

Groundwater

-

30.0 (30.0)

Procurementmethod LCB Other - (US$ million)…

28.9 (24.5) 60.5 (60.5)

28.9 /a

N.A. /b

-

57.8

-

(48.4) 90.5 (90.5)

(23.9)

2.5

-

2.5

-

(2.5) 13.1 (11.5)

58.2

83.2

-

(2.5) -

EfficientO&M

-

RecurrentO&M /c

Equipment& supplies

13.1 /a (11.5) 25.0 /a (0) 15.3 (15.3)

(18.7) 45.2 (42.8)

45.2 (42.8) 22.0 (19.6) 6.0 (0) 18.5 (0)

Land Acquisition Taxes and Duties 45.3 (45.3)

96.9 (90.9)

(0) 20.3

Training,mapping and surveysincluding materialsand travel

Total

(0)

5.0 (3.4)

Consultants

Total cost

112.2 (78.2)

104.7 (19.6)

22.0 (19.6) 6.0 (0) 18.5 (0) 359.1 (234.0)

Note: Figuresincludecontingencies; figuresin parenthesesrepresentBank loan. /a

No competitivebiddingis involvedfor the civil works, since thesemight be carried out on force accountbasis.

/b

Not applicable,becauseno procurementis involvedfor the itemslisted in this column.

/c

Presentlevel of O&M expenditures.About 30% (US$25million)would be for civil works,and the balancefor O&M staff salaries.

-

40 -

H. Disbursements 2.45

The Bank loan would be disbursedas follows: (a) About $11.5 million to be disbursedagainstincremental(efficient) on civil works,would be on a decliningscaleas O&M expenditures follows: 91% of total expenditures on civil works in projectyear 1 ($2 million),80% in year 2 ($4 million),and 73% in year 3 ($5.5 million); (b) 911 of total expenditureson all other civil works (exceptcovered under (a)), (US$125.8million); (c) 1001 of foreignexpendituresfor directlyimportedequipment,95% of local expenditures(ex-factoryprices)for locallymanufactured equipment,and 65% of locallyprocuredoff-the-shelf items (US$17.3million); (d) 100% of expenditureson consultantservices(US$40.7million); (e)

100% of expenditures on training, mapping, surveys, including

materialsand travel (US$18.7million);and (f) Unallocated(US$20million). 2.46 Disbursements would be made againstcontracts,exceptfor works executedon force accountbasis, smallcivil works contractsvaluedat less than US$300,000,and the cost of training,which would be disbursedagainst statementsof expenditure(SOEs). In the case of efficientO&M, Bank loan disbursementswould be for civil works,materialsand equipment. Documentationfor SOE expenditureswould not be submittedfor review,but units,and made availablefor would be retainedby the project implementation inspectionby the Bank during the course of projectsupervision.Total disbursementsagainstSOE would amount to about US$55 million,or 24% of the Bank loan amount. While the disbursementprofilefor past investmentprojects in the irrigation subsector in Indonesia has stretched over about 10 years,

it

is not applicableto the proposedproject,which constitutesa 3-year time is estimatedas slice of an investmentprogram. The scheduleof disbursements follows: Table 2.6: DISBURSEMENTSCHEDULE Bank FY

FY88

Annual Cumulative

30.0 30.0

FY90 FY89 US$ million-80.0 110.0

80.0 190e0

FY91

44.0 234.0

- 41 -

The detailedimplementation schedules(Annex2) indicatethat this disbursementscheduleis feasible. The targetareas to be coveredunder specialmaintenance,efficientO&M, and ongoingprojectsare feasiblewithin the 3-year time sliceoperation. In the case of the groundwatercomponent, the projectwould financethe first 3-year sliceof a 4-5 year program. The targetsof (a) 125,000ha for introductionof irrigationservicefee; (b) turnoverof systems(less than 150 ha in size) covering20,400ha; (c) the preparationof plans for extensionof irrigationservicefee to other areas, and for turnoverof largersystems;(d) land reclassificaton/valuation of about 400,000ha; (e) completionof variousstudies;and (f) institutional strengthening/training, are feasible. Action Plan (Annex1) outlinesthese targets. Loan closingis expectedby March 31, 1991. 2.47 In order to avoid requiringGOI to pre-financeexpenditures reimbursableby the Bank and to simplifyand expeditedisbursement administration, GOI would establisha SpecialAccountin Bank Indonesiato be maintainedby DG Budgetand implementnew proceduresfor fasterprocessingof disbursementsand withdrawals.The SpecialAccountwould be used for all local currencypaymentsmade againstall disbursementcategories. However,the contractsprocuredunder ICB would be paid at the option of GOI, eitherfrom the SpecialAccountor by normal disbursementprocedures(directpayments, reimbursements and specialcommitment). The Bank would make an initial depositequivalentto an estimatedfour months'disbursement(US$10million) into the SpecialAccount. The Accountwould be replenishedeverymonth or when paymentsreach one-halfof the initialdeposit. A. monthlystatementon the SpecialAccountwould be submittedby DG Budget to the Bank. I. Environmental Effects 2.48 Irrigatedpaddy is ecologicallythe most stableand non-erosiveform of land use in Indonesia,and the projectwould have a very positive environmentalimpact throughits supportfor improvedresourceuse and productivity. In new irrigatedareas,particularlyoutsideJava, farmers' increasedincomesfrom irrigatedcrops would help reducethe pressureon land, allowingIndonesiato preservemore of its rain forests. In addition,aquifer levels in areas under the groundwatercomponentwould continueto be closely monitoredto ensure that groundwaterresourcesare not over-exploited in any tubewellarea. Since the ongoingprojectsare relativelysmall in size (averageof 2,000 ha) and includeareas,part of which is irrigatedand the remainingis rainfed,no issues relatedto land clearingand resettlement of populationwould be encountered. The implementation of the projectwould not involvean increasein the use of agrochemicals, and the Governmenthas taken steps to promotethe integratedpest managementapproachand to allow only soft or degradablepesticidesinto the country. GOI environmental policy stipulatesthat environmental impactstudiesshouldbe undertakenfor projects where environmental aspectsneed to be assessed(para.2.35(c)). Assurances were obtainedat negotiationsthat publichealth authorities, with the cooperationof each ProvincialIrrigationService,would take appropriate measuresfor malaria control(para. 7.1(e))as the irrigationand cropping patternsintensify,since some of the vectorsare presentand there is some

- 42 incidenceof malaria in the projectareas. GOI's ongoingmalariacontrol and chemical programwould followan approachwhich integratesnonchemical and health impactsof chemicaluse. methods,and minimizesthe environmental J. Role of Women The role of women is importantin irrigatedagriculture, 2.49 crop harvestingand drying operations. particularlyin rice transplanting, is also undertakenby women. The household use Water collectionfor household uses of irrigationwater would be taken intoaccount,particularlyin componentof the project. In the case of both the designingthe groundwater of the WUAs, an turnoverof small schemesto WUAs, and the strengthening of women would be supported. Similarly,the training activeparticipation componentof the projectwould focus on upgradingthe skillsof women, particularlyin the O&M proceduresand guidelines. Data collectionand analysisfor the purposesof monitoringand evaluationwould focus on disaggregated(by gender)breakdownof employmentbenefitsthat are generated would includedifferentemploymentoptions by the project. This information of for men and women,wage ratesand trainingrequirements.The participation evaluated. and be monitored also would women in WUAs and in trainingprograms III. PROJECTIMPLEMENTATION A. Organizationand Management NationalLevelOrganizationand Management and each PRIS would be responsible DGWRD,throughits Directorates 3.1 ai.dreviewof project for projectimplementation.Overallcoordination Unit, under the would be providedby a ProjectCoordinating implementation AssistantDirectorGeneral,DGWRD,who would be designatedProject recruitedconsultantswith and assistedby three internationally Coordinator, and one respectively, and budgeting, planning and experiencein O&M, design, consultantwould have a local local consultant. Each international counterpartfrom DGWRD'sstaff. This group would adviseand assistDCWRD in O&M procedures,reviewof onoverallplanningand programming,standardizing of the work of selecEionand supervision going projects,and prequalification, Its documents. tender and the designs prepare who will local sub-contractors would includesupervisionof projectimplementation, overallresponsibilities actions. and monitoringof all procurement The main executingbodies withinDGWRDwould be DOI-I,DOI-II,DOS, 3.2 Directorateof Rivers (DOR)and BDP. The designatedstafffrom each of the Unit, to would meet regularlywith the ProjectCoordinating Directorates and the informthe Unit of the progressmade in projectimplementation, problemsif any that need to be resolved. Such meetingswould also bring needed betweenthe variousDirectorates.DOI-I would about the coordination supportto the PRIS for the providetechnicalguidanceand administrative

- 43

-

implementation of specialmaintenanceand efficientO&M of irrigationareas. It would also be responsiblefor the completionof ongoingprojects,and togetherwith PRIS implementon-the-jobtrainingof main systemsO&M staff. 3.3 DOI-I1throughits subdirectorate of groundwaterdevelopmentwould implementthe groundwatercomponent. The East Java and Sulawesig;.undwater componentwould be implementedthroughthe subdirectorate's existingoffices at Surabaya,Madiun,Kederi,Jember,SampeanBaru, Ujung,Pandangand Palu. The East Java groundwaterprojectoffice in Surabayawouldhave overall managementresponsibilities.The Lombokgroundwatercomponentwould be implementedthroughsubdirectorate's existingoffice in Mataram,which was establishedduringthe investigatio.' phaseof the project. DOI-IIwould also be responsiblefor the trainingon tertiarysystemsO&M and on-farmwater managementfor the middleand lower leveladministrative officials,staffof agriculturaland irrigationservices,and membersof the Irrigation Committees,as well as the key membersof WUAs. It would closelycoordinate these activitieswith the Directorateof Food CropsAgriculture(DGFCA). 3.4 DOS would have the overallresponsibility for implementing the swampscomponent(ongoingprojectsand specialmaintenanceworks) of the project,includingon-the-jobtrainingof middle and lower level swampsO&'i staff. However,the provincialorganizations would assumefull responsibility for efficientO&M of infrastructure, i.e. drainagecanals,embankments,dikes, roads,water controlstructures,bridgesand jetties. The organizational structurefor O&M would be on a districtbasis,with centralized management and administration at the provinciallevel. Similarly,DOR would have overall responsibility for implementing all river-related componentsof the project. 3.5 BDP would coordinatethe planningof all trainingactivitiescarried out by DGWRD. Chart 2 presentsthe organizational arrangements for the implementation of trainingactivitiesunder the project. BDP would also monitorand evaluateall trainingprograms,conductshorttrainingcoursesfor the provincialO&M staff,and administerthe in-countryand overseasdegreeorientedtrainingprograms. BDP would establisha data bank of the needs, availability, and completionof trainingprogramsfor PRIS. It would also liaisewith DAAD and the Directorateof IPEDA/PBBin mattersinvolving programmingof trainingactivitiesand jointuse of facilitiesfor training, such as the agriculturaltrainingcenters,rural extensioncenters,and PUSDIKLATregionaltrainingcenters. 3.6 MOAp throughDAAD, would be the executingagencyfor trainingthe actiongroupsand the middle and lower level staffon WUA organizationand development.It would also coordinatethe surveys,and conductan inventory and evaluationof WUAs. It would, in coordination with MHA, have overall responsibility for organizing,reorganizing and developingWUAs. 3.7 The DirectorateGeneralof Taxation,throughits Directorateof PropertyTax (IPEDA/PBB), within the MOF would be responsiblefor the mapping, reclassification and reassessmentactivitiesrelatedto PBB, includingthe trainingof personnel. While the reclassification would be carriedout by the IPEDA/PBBDirectoratepersonnel(from the regionalinspectionoffices),the inventoryof land holdingsand land holderswould be carriedout through

- 44 contractwork by mappingcontractors. CurrentPBB staff are handlingsimilar activitiesfor the ongoingBank-financed KedungOmbo Dam, West Tarum Canal, and Centraland West Java IrrigationProjects. At the nationallevel,a coordinationcommitteeestablishedunder the Centraland West Java Irrigation Project(Ln 2649-IND)would also be responsiblefor the coordination of all PBB-relatedactivitiesunder the project. The committeeis chairedby the Directorof IPEDA/PBBwith membersrepresenting DOI-I and DOI-IIof DGWRD, and DGFCA. 3.8 The BAPPENASwould coordinatemonitoringand reportingprogresson the Policy Statementand Action Plan throughthe coordination at the directorateor equivalentlevel of DGWRD,DGFCA, Directorateof IPEDA/PBB, DirectorateGeneralof PublicAffairsof Ministryof Home Affair.,and other relevantagencieswhen required. This inter-agency group,which has already been established,in additionto providingoverallpolicyguidanceand coordination would also be respcnsiblefor the supervisionof the investment strategystudyand the institutional strengthening study (para.2.35). This group would meet at least once in every threemonths to evaluatethe progress, and resolveproblemsif any. Provincialand Field Level Organization and Management 3.9 Chart 1 presentsthe proposedorganizational chart for the project componentswhich would be integratedinto the activitiesof the provincial organizations.For each province,the PRIS would establisha project managementand implementation unit. The unit would have the PRIS chiefas the projectmanager,and its own supportstaff. 3.10 At the provinciallevel,the BAPPEDASwould coordinateproject implementation monitoringand progress,throughcoordination of PRIS, DIPERTA and field inspectionofficesof IPEDA. This provinciallevelgroup would receivetechnicalguidancefrom the inter-agency group at the nationallevel, as well as from the consultantsof the agenciesconcerned. 3.11 At the districtlevel,the coordination and overseeingof project implementation would be throughthe districtIrrigationCommittee,which is representedby cabangdinas irrigation,kabupatenagriculturalserviceand other relatedservices,and headedby Bupati. The Bupati,as chairmanof this committee,would get technicalguidancefrom the provinciallevel project implementation units,and the districtservicesof the concernedagencies. Under the guidanceof the districtlevelIrrigationCommittee,a project implementation unit would be establishedin each of the pilotareas for irrigationservicefee. This unit would be assistedby consultants, who would carry out socio-economic surveys,formulateimplementation plans, analyze results,and make recommendations on ISF. In addition,a WUA at the district level would be createdin the pilot areas to assist in the assessmentand collectionof ISF, and system-wide O&M planningand implementation. 3.12 Assuranceswere obtainedduringnegotiationsthat the above organizational arrangementsfor projectimplementation at nationaland provinciallevelswould be maintainedand strengthened(para.7.1 (f)). These and the districtlevel organizational arrangements would be in place to facilitatetimelyprojectimplementation.

- 45 -

B. O&M Funding 3.13 Under the project,the budget for efficientO&M would be built up every year on the basis of agreedguidelinesand actualneeds as determined sectionby sectionof the provincialirrigationdepartment. The budgetsfor efficientO&M would be developedon the basis of actualneeds at each cabang dinas level. The budgetaryproceduresand accountsof O&M would be simplified no later than June 30, 1988,with the aim of: (a) rationalizing different channelsof funding;(b) conformingto needs-basedallocations; and (c) expeditingreleases. This new systemof proceduresfor O&M programming and budget planningwould be implemented from FY1989/90onwards. The consultantteams attachedto the PRIS and the districtsor sectionswould assist in the preparationof annualbudgetsneededfor efficientO&M, and the O&M/planningand budgetingexpertsattachedto the ProjectCoordinating Unit (withinDGWRD)would assistwith settingup new proceduresfor O&M programming and budget planning. 3414 Annex 5, Tables4, 5 and 7 illustratehow Bank fundingfor incrementalO&M expenditureswould be phasedout, with GOI being expectedto increaseits contributions correspondingly.These projections asqume that GOI would introducedirect cost recoveryfrom beneficiaries to enablethe Governmentto introduceand sustainefficientO&M on the entirepublicsector irrigationnetwork. As a conditionof continuedloan disbursements, GOI would make annual budgetaryallocations(for fiscalyears 1987/88,1988/89,1989/90 and 1990/91),which at leastmaintainthe fiscalyear 1986/87level of total country-wideirrigationO&M financingunder the CentralGovernmentbudget (APBNand APBD) in real terms,furnishevidencethat satisfactory actual expendituresfor country-wide O&M were made during the previousfiscalyear, and providea progressively larger shareof incremental financingfor efficient O&M (in each of the fiscalyears 1988/89,1989/90and 1990/91) (para.7.2(b)). GOI has alreadyfurnishedthe Bank with evidencethat the 1987/88budgetmaintainsthe 1986/87budgetlevel for O&M in real terms for the entire irrigatedarea in Indonesia. C. Accountsand Audits 3.15 Detailedaccountsand recordswould be kept by DGWRD, the PBB Directorateand each ProvincialIrrigationServicefor each budget item by budgetyear. Each accountingsectionis headedby a certifiedpublic accountantwho reportsmonthlyon budgetand financialstatus. Internalaudit sectionsare responsiblefor visitingprojectsites quarterlyand examining local accountingrecords. Accountingprocedurescurrentlyin use are adequate to supportSOE applications.Final accounts,includingbalancesheetsand consolidated receiptsand expenditurestatements, are preparedat year end to meet Bank requirements.Projectaccountsare subjectto two audits: (a) by the InspectorGeneral of the concernedministry;and (b) by the Financialand DevelopmentSupervisoryBoard (BPKP). The work of both auditorshas been found to be generallysatisfactory on Bank-assisted irrigationprojects. Adequateand separateaccountswould be maintainedfor the project;all project-related contracts,documentsrelatedto statementsof expenditure, and ordersand receiptswould be kept for at 'east one year after the Bank has

- 46 receivedthe audit report for the fiscalyear in which the last withdrawal auditsof each year's from the SpecialAccountwas made; and independent accounts,incl.dingaudits of SOEs,would be submittedto the Bank within nine months of the close of each GOI fiscalyear. D. Monitoringand Evaluation The followingagencieswould be responsiblefor monitoringand 3.16 evaluation: physicaland financialprogress(LevelA of M&E) would be to the DirectorGeneralof DGWRD. INTAL coordinatedby INTAL,the Secretariat to all PRIS concerned. The does this by sendingstandardquestionnaires completethe forms with the would concerned officials project provincialor impacts,crop incomesand margins, help o: their consultants.Socio-economic crop productionand supportservicesand water managementpractices(LevelsB C, D and E) would be monitoredby DGWRD'sDirectorateof Planningand Programming,based on methodsand criteriapreviouslyagreedwith the Bank. The M&E of water managementpracticeswould,however,be modifiedto include of and field staffunderstanding criteriasuch as water use efficiencies normalO&M procedures,such as operationof gates,estimationof inflowsand water charges,and maintenanceof canal specifications.The physicalimpacts of the projecton O&M, such as percentageof the water demandthat was met, (in cash or and farmers'contributions fluctuationsin water use efficiencies criteria The be monitored. also would management labor)to tertiarysystems systems for e aluatingthesephysicalor real impactson the O&M of sample among concernedagencies,PRIS staff and would be developedin consultation consultants. the M&E capabilityof There is a continuingprogramof strengthening 3.17 systems the DPP. Most of its staffhave been trainedand M&E implementation developed. The concernedPRIS staffwould obtaintechnicalguidancefrom DPP the M&E activities. and the consultants(para.2.33) in implementing within component,a sub-directorate In the case of the groundwater 3.18 the existing DGWRD (P2AT),with assistancefrom DPP in DGWRD,would expand monitoringand evaluation(M&E)activitieswith the objectiveof carryingout baselinestudiesin each groupof typicaltubewellsystemsto enableproject impactto be evaluated. This work would be undertakenin stages. First,an initialbaselinestudyof the presentsituationwould be made for selected sampleareas to be developedfor each type of technologyundir the project. Second,the same areas would then be monitoredon a regularand routinebasis by the M&E staff. The data wouldbe collectedon geologicalsurveyand pump followedby data collectionon water quality costs,as wells are constructed, becomeoperational.Finally,3-5 rears systems and well performanceonce the of the sampletubewellsystems,the initialbaseline after the installation surveywould be repeatedto evaluatethe impact. The data resultingfrom phase of the surveyscarriedout during the investigation agro-socio-economic Lombok subprojectwould be used as benchmarksfor assessingthe impactof the , project. Training. To overcomethe presentconstraintof lack of follow-up 3.19 trainingand an evaluationof the impactof training,BDP would evaluatethe trainingprograms. The evaluationof O&M trainingwould entailassessmentsof

- 47 the individualor collectiveimpactson the efficiencyof irrigationO&M in selectedsamplesystems,as well as feedbackfrom interviewsand questionnaires. The BDP would coordinateits M&E activitiescloselywith the DPP. The implementation of the trainingin M&E would be done by BDP in coordination with other directorates and PRIS concerned. 3.20 The M&E reportswould be submittedto the Bank by December31, 1988, December31, 1989, and December31, 1990,and a ProjectCompletionReport submittedno later than September30, 1991. These reportswould focus on: (a) physicaland financialsummaryindicatorsmeasuringperformanceagainst agreed targets,includingexpenditures on efficientmaintenance,and operating and water managementstandards;(b) impactupon projectbeneficiaries through indicatorssuch as croppingintensity,crop yieldsand net farm income;and (c) impactof trainingprovidedunder the project,includingtrainingfor the strengthening of WUAs. ManagementInformationSystem (MIS) 3.21 The requirements for improvingthe existingMIS are mostly covered by ongoingforeignassistedprojects. For DGWRD,funds amountingto about US$1 millionhave been earmarkedfor che acquisition of a centralcomputer, softwareand operatingcosts under the ongoingBank-assisted IrrigationXVI Project. These fundswould enableINTAL to installat least two on-line terminalsin all the DGWRD Directorates.The improvedMIS would assist in meetingthe word processingrequirements of DGWRD,monitoringof physicaland financialprogressof ongoingprojects,data bankingon manpowerdevelopment and trainingneeds, inventories of irrigationsystemsand facilities,and planningand programmingof DGWRD projects. 3.22 DOI-I at presenthas considerable computational facilities. It is currentlycomputerizing irrigationsysteminventoriesfor the entire country. Micro-computers would be providedunder the projectto meet the monitoringand evaluationand managementinformationsystems'needs for O&M at the PRIS level (para.2.33). 3.23 The improvedM&E and MIS systemswould be implementedby PRUS, assistedby DGWRD, from December31, 1989onward. IV. CROPPINGPATTERNS,YIELDSAND PRODUCTION A. Presentand FutureCroppingPatterns 4.1 Annex 7, Table 1 presentsyieldsfor major crops in the project areas. Total crop areas,crop intensities, yieldsand productionfor the present(withoutproject)and the future (withproject)situationshave been estimatedfor the differentprojectcomponents(Annex7, Table 2). Future croppingpatternswith the projectfor surfaceirrigationand swamps (which are alreadyirrigatedand only need mainter.ance) wouldnot change,and croppingintensitywouldremainat 175% and 150%, respectively.For ongoing projects,the croppingpatternwould includeincreasedsecondaryfoods crops,

- 48 -

and croppingintensitywould increasefrom the present125% to 175% at full development.The croppingintensityin the futurefor groundwaterareas would on the averageincreasefrom about 120% to 285%. These increasedcropping intensities would be possiblebecauseof increasedextensionefforts,better use of inputs,improvedculturalpractices,and availablility of irrigation water for growingcrops,mainly secondaryfood cropsduring the dry season. Some farmersalso tend to grow a secondrice crop dependingon water availabilityand market conditions.With GOI's thrusttowardcrop diversification, farmersare expectedto respondto market signalsand produce more horticultural and secondaryfood crops. B, Yields,Productionand Markets 4.2

Crop productionintensification methodswith the use of HYVs and

fertilizer inputs

are

well established in the project area, and farm surveys

indicatethat improvedtechnologyhas been adoptedon more than 90% of the area plantedwith rice in Java. The present1985 averageyield of irrigated HYV rice in Indonesiais 4 t/ha (dry unhuskedrice),while the averageyield for the projectarea is 4.5 t/ha for irrigatedareas in Java, 3.7 t/ha in the Outer Islandsand 2.5 t/ha for rainfedrice. The projectwould increasethe averageyields of irrigatedHYV rice to 5 t/ha at full development, which has been achievedunder similarirrigatedconditionsin the country. The yields of palawijacrops under irrigatedconditions(using ,roundwater) would increasesignificantly by full development:ground-iuts from 0.8 to 1.5 t/ha, maize from 1,2 to 3.3 t/ha,and soybeanfrom 0.8 to 1.2 t/ha. Similarly, under swampsand surfaceirrigation,yieldsof soybeanswould increasefrom 0.8 t/ha to 1 and 1.2 t/ha respectively, while maize yieldswould increase from 1.4 t/ha to 2 and 3 t/ha, respectively.Such yield increasesare feasiblein view of improvedO&M whichwould ensuremore adequateavailability of water and a more efficientapplicationof farm inputs. The main benefitof the groundwater component(in Madiun area)would be the inclusionof a second rice crop by some farmersand the increasein secondaryfood crops as a direct resultof increaseddry seasonwater supplies. Progressivefarmersare also expectedto grow some horticultural crops (e.g.,citrus,onions,garlic and potato),where marketsare available. Yield improvements for rice and palawijacrops occur becauseof the interaction of severalfactorssuch as betterextension,improvedseeds,and the provisionof a reliableand timely supplyof adequateirrigationwater. The latteris criticalbecause it reducesthe risk of crop failuressand inducesthe farmerto apply esential inputs. Seeds,fertilizerand pesticidesare readilyavailablein the project areas,and no supplyconstraintis expectedunder the project. Activities under the ongoingBank-assisted NationalAgricultural ExtensionII and III and Seeds II Projects(Cr.996, Ln. 2748 and Ln. 2066-IND)withinthe project area would providethe necessarylinkages. 4.3 The estimatedannual incrementalproductiongeneratedby the project at full developmentis given in para. 6.1. Detailsare given in Annex 7, Table 3. About 90% of the marketablesurplusof rice in the projectarea is sold by farmersas paddy to privatetradersor millers. The numerousprivate tradersoperatingin villagesin the area providecompetition and offer servicessuch as collectionand drying of produce. Millingcapacityis expectedto be adequatefor incrementalrice productionunder the project.

- 49 Marketingof palawijacrops is handledalmostentirelyby privatetraders,and well established marketingchannelsexist,especiallyfor soybean,maize and groundnuts. Sale prices for seed cottonare fixed by PTP XXVII which collects all produceand extendscreditto the farmers. V. PRICES,FARM INCOMESAND RECOVERYOF PROJECTCOSTS A. Prices 5.1 Economicprices for major agriculturalinputsand outputsare presentedin Annex 9, Table 1. Farm inputsand outputshave been valued in constant1987 prices. For the economicanalysis,with the exceptionof some construction costs and all laborand internaltransportation costs (where conversionfactorshave been used),all inputsand outputsare priced as tradablesbased on their borderequivalentvalues,with adjustmentfor quality differentials and transportation as appropriate.Economicpricesfor paddy, maize, groundnut,soyabeans,urea and triplesuperphosphate are based on the Bank'sCommoditiesand ExportProjectionsDivisionforecastsmade in January1987. Financialanalysishas been done for the groundwatercomponentof the project. The financialratesof returnfor the three groundwatermodels are: Lombok 18Z. Madiun and Surabaya15%, and SampeanBaru 11%. Financial pricesfor all commodities(Annex9, Table 2) are basedon the farm surveys conductedby the M&E unit within DGWRD,and have been adjustedas necessaryto the farmgatepricesobservedduringappraisal. B. Farm Incomesand PaymentCapacity 5.2 Farm incomesin the irrigatedareas,where paddy is the dominant crop,often plantedin two seasonsand sometimeseven the third season,are largelydeterminedby the farmgatepriceof rice relativeto input costs. In 1986/87when productionof rice exceededdomesticdemand,the Government enforcedsupportpricesrigorouslyby assigninggreaterweightageto the impurityand moisturecontent,which allowedfarmgateprices to fall below the supportlevel. 5.3 The paymentcapacityof irrigationbeneficiaries has been testedby the preparationof farm models representative of conditionswithin Java and outsideJava for 3 size groups(Annex8, Tables1 and 2). Farm holdingsof 1 ha, 0.5 ha and 0.33 ha were testedin Java,and holdingsof 1.5 ha, 1.0 ha and 0.5 ha outsideJava. The farm costsand returnswere estimatedat current farmgatepricesfor these farm size holdings. In Java, the 1 ha size farm wouldproduceenoughincometo providefor the family'slivingcosts and have sufficientsavingsto pay additionalO&M costs. The same situationexists outsideJava. Farmerswith less than 1 ha earningextra income from off-farm work wouldhave sufficientincometo maintaina minimumstandardof living and have savingsto cover an irrigationservicefee. In the farm models, the minimumlivingcost assumedfor a farm familyis Rp 50,000per month, or Rp 600,000per year.

-

50 -

5.4 Anotherset of farm models was preparedto show the effect on net incomes,if farmerswere to receivepricesat governmentsupportlevels (Annex8, Tables3 and 4). If farmerscould be guaranteedthe full government supportlevelof prices,their net farm incomeswould be improvedas follows: Table 5.1: NET FARM INCOMES (Rp '000) Price Basis 1 ha Livingcosts and other obligatoryoutgoings Net farm incomeat current farmgateprices Net savings Net farm incomeat government supportprices Net savings

0.33 ha

751

686

664

985 234

526 -160

369 -295

1,561 810

814 128

559 -105

1.5 ha Livingcosts and other obligatoryoutgoings Net farm incomeat current farmgateprices Net savings Net farm incomeat government supportprices Net savings

Farmsby Size in Java 0.5 ha

Farms by Size OutsideJava 1 ha 0.5 ha

815

748

685

1,371 556

914 166

487 -198

1,622 807

1,081 333

571 -114

5.5 As can be seen from the above,farmerswith less than 1 ha would acquirepaymentcapacityby workingoff-farmto help defraytheir minimum livingcosts. If farmgaterice pricescouldbe raisedto the governmentprice supportlevels,it would enable the farmerwith a 0.5 ha holding in Java to meet minimumlivingcostsand taxes and otherobligatoryexpensesand have a slightsurplusof earningsto pay irrigationservicefees. The farmerwith 0.33 ha farm in Java and 0.5 ha farm outsideJava would,with government supportprices,be able to maintainminimumlivingstandardsand have a surplusto pay for O&M costs if his farm incomeis supplemented with off-farm earnings(Annex8, Tables3 and 4). C. Cost Recoveryand Operationsand MaintenanceFunding 5.6 The Government'sobjectiveis to completelyeliminatecentral governmentsubsidiesfor O&M withina 15-yearperiod. To do this, the governmentshouldrecoverall the O&M coststhrougha water user's fee.

- 51 However, to assess

possible future sources of funding and in view of the

overallpaymentcapacityof farmerswhich is still to be assessedin each of the pilot areas for irrigationservicefee, the potentialPBB revenuehas been includedin the projections. 5.7 Actualdetailson levelsof irrigationservicefees and mechanisms for collectionwould be workedout in the pilot areas. The projectionson possiblefundingsources(Annex5, Table 7) are based on rough assumptionsto arriveat some broad indicativeapportionment of O&M costs to the provincial governmentsand the beneficiaries.These projectionsare in constant1987 prices.

5.8 At the start,the Governmentis facedwith O&M on 4.8 millionha of irrigatedlandsand 600,000ha of reclaimedswamp lands. This area would be graduallyreducedby the turnoverof the smallerirrigationsystemsto water it is assumedthat 900,000ha would users' associations.In the projections, be turnedover to WUAs by the end of the 12th year. By the 15th year, the proposedirrigationservicefee (evenbasedon conservativeestimates)could producean annual revenueof Rp 45 billion. The underlyingassumptionis that only as areas are broughtunder efficientO&M, would they be consideredfor levyingirrigationservicefee. 5.9 The projectedphasing-outof APBD and APBN subsidiesand the combinedincreasedfundingof O&M from PBB and an irrigationservicefee is given in Annex 5, Table 7. As will be noted,it is expectedthat only DIK fundingwould continuefor salariesand relatedcost of personnelengagedin O&M operationsin the amountof Rp 5 to 6 billion,and the APBD and APBN subsidieswould be reducedto zero by the 15th year. Additionalfundingfrom the irrigationservicefee (Rp 45 billion)and possiblyfrom PBB (Rp 40 billion)at 1987 constantpricescould be in the order of Rp 85 billionper year, coveringalmost the entire fundingrequirements for efficientO&M on all the irrigatedareas by the 15th year. D. Cost RecoveryIndices 5.10 Cost recoveryindiceshave been adaptedto the objectivesof the irrigationsubsectorproject,which are primarilyto improvethe present inadequatestandardsof O&M to efficientlevels,and to recoverthese O&M costs for the main and secondarysystemsfrom the ultimatebeneficiariesvia the indicesare estimatedto show the irrigationservicefee. Consequently, the extentto which an irrigationservicefee limitedto only Rp 10,000 per ha would recoverthe efficientO&M costs,and an index showingthe extent to which this minimumservicefee plus any reasonableallocationof PBB for O&M expenditures would recoverthe cost of efficientO&M and the investmentcost of specialmaintenance. The relevantdata are given below.

-

52

-

Table 5.2: COST RECOVERYINDICES Based on Discountedper ha Values (10X) over ProjectLife (Rp '000 per ha) For EfficientO&M Projectcosts for efficientO&M Projectcharges Servicefees PBB shareallocation Total Directcost recoveryindex (X)

93.88 65.41 29.57 94.98 101

For SpecialMaintenanceand EfficientO&M Costs for specialmaintenanceand efficientO&M Projectcharges Servicefee PBB shareallocation Total Directcost recoveryindex (M)

219.34 65.41 29.57 94.98 43

5.11 As will be noted, the limitedirrigationservicefee alone would recover70% of the cost of efficientO&M. The servicefee and the projected shareof PBB would recover101% of the cost of efficientO&M and 43% of projectexpenditures for specialmaintenanceand efficientO&M. Over time, as the appropriatelevelsof irrigationservicefee are determined,and the institutional mechanismsfor its collectiondeveloped,nearly 100% of O&M costs couldbe recoveredby irrigationservicefee. VI. BENEFITS,ECONOMICJUSTIFICATION AND RISKS A. Benefitsand Beneficiaries 6.1 The proposedprojectcomplements previousBank supportto water resourcesdevelopmentin severalprovinces. Investmentsaimed at expediting the completionof high priorityongoingprojectsand improvingthe efficiency of O&M of existingfacilitieswould have high economicreturns,given that a considerable part of the investmentcost has alreadybeen sunk. In addition, policyreformsintroducedunder the project,includingimprovedO&M funding and cost recoveryfrom beneficiaries, strengthening of provincialirrigation services,improvingtheir coordination with agricultural and local government services,and development of staff skills,shouldlead to betterresource mobilization and utilization, improvedefficiencyin selection,designand

- 53 construction of irrigationsystems,and improvedoperationand maintenanceto the farm level. Major quantifiable benefitsand beneficiaries are summarized in Table 6.1 below. At full developmentan incrementalquantityof about 650,000tons of paddy,about 140,000tons of maize, 100,000tons of soyabeans, 20,000tons of groundnutsand 385 tons of cottonwould be producedannually. About 1.6 millionruralfamilieswould benefitdirectlyfrom the project, abouthalf of whom have currentincomesbelow the absolutepovertyline, and an equi ')lent of 0.5 millionfull-timefarm jobs would be createdas a result of crop intensification. Table 6.1: SUMMARYOF MAJOR BENEFITSAND BENEFICIARIES Benefits/Beneficiaries

Incremental production(in tons)

Production(in tons) Paddy Maize Soyabeans Croundnuts Cotton

653,068 143,595 106,331 21,189 387

Numberof Farms in ProjectArea

1,582,000

Employment(millionman-days)

135

B. EconomicAnalysis Benefitand Cost Streams 6.2 Economicevaluationof the projecthas been carriedout using both internalEconomicRate of Returnand Net PresentValue (NPV) estimations. The derivationof economicprices is containedin Annex 9, Table 1. Analysesof a typicalongoingproject,and of the economiceffectsof specialmaintenance and efficientO&M for irrigationand swamps(in Java and outsideJavaessentially using differenteconomicprice of labor),and of the groundwater componenthave been made. Economicanalysisof the effectsof improvementof smallriver mouths,to be carriedout on a pilot basis,has not been made becauseof insufficient data particularly on the quantification of benefits. Agricultural benefitsresultingfrom specialmaintenanceand improvedOEM have been evaluatedon a per hectarebasis,taking into account increasedrice yieldsand intensitiesand/ora preventionof decline in yields (with improved waterdistribution).Benefitsfrom the institutional strengthening component includingtechnicalassistancewere not quantifieddirectly,but would accrue to the project. Hence the cost of this componenthas been includedin the totaleconomiccost of the project. Costs quantifiedincludeall capitaland operatingcosts, excludingprice contingencies and transferpaymentssuch as taxesand subsidies,but includingphysicalcontingencies.

- 54 -

6.3 A sensitivity analysishas also been undertakento test the effects of the declinein benefits,higher investmentcosts and delays in implementation.This analysishas been done for individualprojectcomponents and for the total project. 6.4 ERR and NPV for the projectcomponentsand the total project, includingthe switchingvalueson costs and benefits,are presentedin Table 6.2. The aggregateERR for the project,estimatedat 21%, is robust. The projectis relativelyinsensitiveto cost overrunsand to reducedbenefits from both lowerproductionand rice prices. A 20% reductionin the benefits would lower the ERR from 21% to 18%, and 40% cost overrunon all project componentswould lower the ERR to 17%. The project is sensitiveto delays in implementation:a two year de'ay in the projectbenefitswould reduce the ERR to 17%. 6.5 Switchingvalueswere calculatedfor key parametersand indicate that a decreasein benefitsby 56%, and increasein investmentcosts by 177%, would reducethe ERR to 10% i.e. equal to the opportunitycost of capital. Basedon two test cases,it is estimatedthat (a) if the projectedrice price duringthe 1990-2000periodwere to declineby 20%, the ERR would fall by four percentagepoints,and (b) if the recurrentO&M costs, in the case of ongoing projects,were reducedby 50%, with a corresponding reductionin economic life, the ERR would fall from 23% to 19%, and this combinedwith a two-year delay in implementation would result in an ERR of 14%. Risks

and Uncertainties

6.6 As discussedabove, the projectis not excessivelysensitiveto change in the main variablesand its overallrisk level is acceptable. Severalelementscould,however,contributeto a lower than expectedERR for the project. Among them, two can be controlledby the GOI and provincial irrigationservices: the timelinessof construction, and adequateO&M funding. The risk of inadequateO&M fundinghas been graduallyreducedin the last threeBank irrigationloans to Indonesia(Lns.2543, 2560-INDand 2649-IND) by financingthe mappingand reclassification of the projectareas in order to increasethe PBB collection,and by obtainingGOI agreementto allocatea shareof the incremental PBB revenuesto the 0&M of main and secondary canals.

While

the proposed project continues to support a detailed program

for land reclassification and valuationin the projectareas to generate additionalrevenuesat the local level,it also requiresthe introductionof an irrigationservicefee, which would contributetowardsO&M costs,and a turnoverof small systemsto WUAs whichwould also entailhanding over of O&M responsibility to WUAs. Moreover,the GOI's PolicyStatementand Action Plan aimed at addressingthe O&M problemof the existinginfrastructure, for the firsttime on a country-wide basis, shouldhelp minimizethe risks of inadequatefundingfor O&M. 6.7 Delays in puttingin place the organizational arrangementsfor the project,inadequatestaffingand delaysin the award of consultantcontracts, and therebydelays in training,constituteadditionalrisks. These risks are expectedto be minimizedby the stepsalreadytaken by the Governmentto appointkey consultantsand to have the salientorganizational arrangements

- 55 -

Table 6.2: ECONOMICRATE OF RETURN (ERR) AND SENSITIVITYANALYSIS

Component

Switching ERR values /c Investment BeneBene- Investment Lag costs fits /b Base NPV /a costs (Rp bin) case -10% -20% +20% +40% 2 years fits

Irrigation Specialmaintenanceand efficientO&M /d Java Outside Java

285 85

31 26

29 24

27 22

28 23

26 21

23 20

-74 -66

498 333

Swamps Specialmaintenanceand efficientO&M /e

19

20

19

17

18

17

16

-52

180

TypicalCngoingProject

83

23

21

19

20

18

17

-58

168

4 2 3

23 18 22

21 17 20

18 15 17

20 16 19

17 14 16

16 14 16

-43 -40 -44

124 93 110

481 407

27 21

25 20

23 18

24 19

22 17

20 17

-67 -56

310 177

Groundwater Lombok Madiun,Surabaya SampeanBaru Overall Project Case A Case B /f

Based on opportunitycost of capital of 10%. costs. Benefitsminus operating/production 7e Percentagechangewhich reducesthe NPV to zero. 7T ERR for efficientO&M alone (i.e.,withoutspecialmaintenance)is 117% in Java and 90% off-Java. /e Assumingshadowwage rate of Rp 965/day in Java. ERR, if shadowwage rate is assumedto be Rp 2,000/day(off-Java),is 13%. Since the labor is expectedto migrate from Java to outer islands,the ERR of 20% (as shown in the table) is includedin the estimationof overallprojectERR. /f Includescosts of institutionalstrengtheningand technicalassistance. /a 7b

-

56 -

for projectimplementation in place. More generallyon the policy front, in light of GOI's record in responsibleeconomicmanagementand demonstrated willingnessto carry out difficultreforms,the PolicyStatementassociated with the projectis a sound basis to believe that GOI is fully committedto carryingout the necessarysteps to bring about the desiredchangesin the subsector. However,there is stilla risk that implementation of some of the short-termmeasuresincorporatedin the Action Plan may be prolongedby the difficulties of policy and institutional changewhich involveseveral differentGOI ministriesand organizations.The provisionfor substantial technicalassistance,and the proposedlong-termprogramapproach,in view of the projectbeing a 3-yeartime slice operation,shouldincreasethe chances of successin implementingthese reformsover a number of years. VII, AGREEMENTSREACHEDAND RECOMMENDATION 7.1

Assuranceswere obtainedat negotiationsfrom 00I that: (a) the projectwould be implementedin accordancewith the Policy Statementand the Action Plan reviewedand agreedwith the Bank (para 2.4); (b) trainingprogramswould be carriedout in accordancewith the timetableand terms of referencesatisfactoryto the Bank (para. 2e27); (c) consultantswould be selectedby January31, 1988 (para.

2.34);

(d) the environmentalimpact studieswould be completedby March 31, 1990 (para.2.35(c)); (e) appropriatemeasuresfor malaria controlwould be taken and these measureswould take environmental and health aspectsinto consideration(para.2.48);and (f) organizational arrangementsfor projectimplementation at national and provinciallevelswould be maintainedand strengthened (para.3.12). 7J2 As conditionsof loan disbursement, GOI would take the following actions: (a) make arrangementsto ensure the availabilityof financingfor installation of the secondpackageof materialsand equipmentfor groundwatertubewellsystemsto be procuredin the third year of the project(para.2.42);and (b) make annualbudgetaryallocations(for fiscalyears 1987/88, 1988/89,1989/90and 1990/91)which at least maintainthe 1986/87 level of total country-wideirrigationO&M financingunder APBN and APBD in real terms,furnishevidencethat satisfactory actual

-

57 -

expenditures for country-wide O&M were made duringthe previous fiscalyear,and providea progressively largershare of incremental financingfor efficientO&M in each of the fiscalyears 1988/89, 1989/90and 1990/91(para.3.14). 7.3 With the aboveagreementsand assurances,the projectwould be suitablefor a Bank loan of $234 millionwith a 20 year maturityat the standardvariablerate, includinga grace periodof 5 years. The Borrower would be the Republicof Indonesia.

- 58 -

AnnexI Page 1 of 12

GOVERNMENTOF INDONESIA STATEMENTOF POLICIESFOR IRRIGATIONOPERATIONAND MAINTENANCE I.

BACKGROUND 1.

Rice is the staplediet of the Indonesianpopulation,and a large proportionof the country'sproductionof rice comes from irrigated sawahareas. With a populationgrowth rate of 2% per annum and increasingper capita incomes,the demandfor rice as a primaryfood crop is expectedto rise in the future.

2.

Concertedeffortshave been made on a continuousbasis from the beginningof the first five year plan (PelitaI) to meet the increasing nationalrequirements of food. Since 1985, these effortshave rice. decreased the dependency on food crop imports, especially The nation's production of rice comes from 5 million hectares of irrigatedfields,which grow two crops per year on average,and from 2 millionhectaresof rainfedland, on which rice is generallyplanted once each year. The increasein productionhas been achievedas a resultof investments in agriculturesuch as the adoptionof modernvarieties;use of fertilizers; weed and pest control;adoptionof appropriatecropping calendars;and investmentsin irrigationsuch as rehabilitation of existingirrigationsystemsand constructionof new schemes.

3.

Water resourcesdevelopmentby the Governmentespeciallyin the field and rehabilitation, within the of irrigation,both new construction contextof increasingfood production,has alreadybeen carriedout with satisfactoryresults. Such investments have primarilybeen rupiah budgetand foreignassistance. financedfrom the Government's The completionof construction is followedby the next stage of managementand care of the irrigationsystemsthroughwhat is commonly known as operationand maintenance(O&M). Operation

consistsof activitiesto optimizethe utilizationof the irrigationinfrastructure.

Maintenance

consistsof activitiesto care for the infratructure, so that it can functionas designed,therebysustaining the effectiveness of the irrigationsystems.

Both activitiesshouldbe carriedout continuously, and supportedby an adequatebudget,skilledpersonnel,appropriateproceduresfor planning and implementation and properfacilitiesfor their efficient as well as to aim for increasedqualityof intensified implementation, agriculturalfood production.

- 59 -

AnnexI Page 2 of 12

IrrigationdevelopmentduringPelitasI to IV concentrated on rehabilitation (repairsand improvements) of existingsystemsand constructionof new schemes. During this latterpart of Pelita IV and approachingthe beginningof RepelitaV, the time has come to give greateremphasisto O&M activities. 4.

Accordingto Water Law No. 11/1974,Section12 and Government Regulation(PP) No. 23/1982,Section35, para. (2), the budget for O&M of irrigationnetworksand relatedstructuresand facilitiesshouldbe borne by the ProvincialGovernment. These laws also set out the intentionof asking beneficiaryfarmersto participatein O&M for main systemsand have overallresponsibility for tertiarysystems. Recognizingthat ProvincialGovernmentswere still unable to provide the requiredbudget for O&M, the CentralGovernmenthas, since the fiscalyear 1974/75providedsubsidiesfor irrigationO&M through INPRESDATI I (APBD);since 1984/85such subsidieshave been increased throughproject fundingfor O&M (APBN). Maintenanceof O&M budget levelsin the last two years, despitemajor cuts in total investment expenditures,reflectsthe Government'snew policyapproachand recogn:.tion of the importanceof O&M, and its commitmentto increased expenditureson efficientand adequatelevelsof O&M in the future. Nevertheless,the averageallocationper annum is well below actual requirements. The inadequateO&M Budget,personnel,equipmentand facilitieswill of the conditionof the irrigationsystems lead to rapid deterioration and affect theirperformancethus reducingfood production,especially rice, and this is of increasingconcern to the Government.

5.

The problemwhich is now encounteredis how to providean adequateO&M budget in accordancewith actual needs of each irrigationsystem;this will necessitatean increasein the budget to be providedfor O&M. It is necessaryto mobilizenew sourcesother than the presentCentral Governmentallocation,in the effortsto increasethe O&M budgetand eventuallyto reducedependenceupon CentralGovernmentbudgetary support,namely: 5.1 From Land and BuildingTax (PBB) This may not be a dependablesource,becausethe revenuesfrom PBB are requiredfor regionaland local development,especiallyin Daerah TingkatII (levelof Kabupaten). of irrigationdevelopmentin the form of an 5.2 From the beneficiaries "IrrigationServiceFee," which shouldbe relatedto the quality of serviceprovided. The impositionof such a fee is in keeping with Water Law No. 11/1974,Section12 and GovernmentRegulation No. 23/1982,Section35, para. (3). This is a more appropriate and dependablesource since it will be collectedsolely for meeting the O&M budget.

-60-

6.

Annex 1 Page 3 of 12

Besidesmobilizingthe sourcesmentionedin Section5 above,especially for smallersystemswith an area of less than 500 ha, the responsibility for O&M will be entrustedto the Water User's Association. This is possible,becausethere are alreadya large numberof such schemesmanagedby the villagers,designatedas villageirrigationor communalirrigationsystems(INPRES1/1969). In this way, the responsibility assumedby the beneficiaries can be furtherdeveloped, while reducingthe number of schemesmanagedby the Governmentand more attentioncan be paid to large and medium scale systemswhich cannot be managedby the beneficiaries.

7.

The Governmenthas formulateda set of policieswhich addresssix fundamentalissues relatedto the financingof O&M and other expenditurein the irrigationsubsector,under the followingtopics: 1. 2. 3.. 4. 5. 6.

B.

Fundingof Operationand Maintenance Cost Recovery IrrigationServiceFee Development Institutional Programmingand Budgetingfor O&M of InvestmentExpenditures Rationalization

STATEMENT OF POLICIES Policy

1: Fundingof Operationand Maintenance After completingirrigationsystems,Governmentrecognizesthat in order to realizethe full potentialof irrigationsystemsand to maximizethe contributionof existinginvestmentsto agricultural productiongoals, futurepolicy shouldensureexpenditureon O&M that should be appliedin line with the actual needs of irrigationsystems. Objectives: 1,1 To provide adequate and timely funding of O&M on all government

controlledschemesthroughoutIndonesiaat a levelsufficientto of efficientoperation ensure efficientO&M, and the introduction and maintenanceon the entirePublic Works irrigationsystem within about 15 years. In order to accomplishthis, the Central Governmentwill initiatea gradual increasein O&M fundingthrough more allocationfrom the INPRESand DGWRD developmentbudget. This increasein fundingis requiredduring the early years but will declineas ProvincialGovernmentrevenuesand irrigation servicefees assumea larger percentageof the total O&M costs. 1.2 To establishan agreedmechanismfor ensuringthat Provincial Governmentstake a graduallyincreasingfinancialresponsibility for the 0&M budgetof main irrigationsystemsfrom their own revenuese

1.3 To ensurethat adequate fundingis appliedin line with the actual needs of the systemsin areas which have alreadybeen upgradedand

- 61 -

Annex 1 Page 4 of 12

efficientO&M has been introduced,an increaseof the present levelsof O&M fundingwould be required. Also, that funds currentlyexpendedon areas on which efficientO&M has not been introducedwill have their presentallocationsat leastmaintained in real terms. 1.4 To give Water Users Association(WUAs)maximumresponsibilities for O&M, subjectto the constraintsimposedby their institutional size and capacitiesand the technicalcharacteristics, boundariesin which irrigationsystemsare located. administrative 1.5 Withinabout 15 years, to graduallyturn over the Government irrigationsystemsof less than 500 ha each to the WUAs. As a first step, over the period of RepelitaV, most of the Government irrigationsystemsless than 150 ha in size would be turnedover to WUAs. This figure is in line with the size of tertiaryunits which,accordingto GovernmentRegulationNo. 23/1982,is now of the WUAs. legallythe responsibility Policy 2: Cost Recoveryfor IrrigationO&M will eventuallyfinance The Governmentpolicy is that the beneficiaries O&M costs of main irrigationsystems. Objectives: 2.1 To implementa cost recoverysystem whichwill eventuallyfinance all costs of efficientO&M of irrigationsystemsthroughincreased contributions from irrigationbeneficiaries. 2.2 To improveindirectcost recoveryand increaselocal government revenuegenerationand their capacityfor O&M funding,througha long-termprogramto raisePBB revenueson irrigatedareas in all provinces. 2.3 To expeditethe conversionof the Land Tax (IPEDA)systemto the of the and reassessment new PBB system throughreclassification marketvalue of irrigatedproperties,and to ensure that the system is implementedeffectivelyand yields the expected revenues. Policy 3: IrrigationServiceFees In order to directlyrecoverthe O&M costs from irrigation beneficiaries in relationto the benefitsthey receivefrom a regular and assuredsupplyof water, Governmentwill extend the collectionof in other areas after the irrigationservicefees from the beneficiaries Pilot Schemeperiod. SincePBB may not be a dependablesource,the of direct cost recoverysystem,which eventually implementation financesall costs of efficientO&M of irrigationsystems,shouldapply irrigationservicefee. These fees are expectedto graduallyreduce the need for Governmentfundingsubsidiesand become the main source of efficientO&M budgetfor main irrigationsystems.

62 -

Annex 1 Page 5 of 12

Objectives: 3.1 Startingfrom fiscalyear 1988/1989,to introducean irrigation servicefee (ISF) relatedto croppingpatterns/systems in several selectedpilot schemeareas being taken up for efficientO&M. The implementation of the pilot schemewill also enablethe establishment and refinementof the necessaryadministrative and as institutional aspects, collection judicialarrangements as well mechanismand level of fees to be collected. 3.2 Based on the resultsof the pilot scheme,to graduallyextend ISF to all provincesfor irrigationsystemswhere efficientO&M has alreadybeen introduced. Policy 4: Institutional Development Governmentrecognizesthe criticalimportanceof effectivelycarrying out irrigationO&M, and will implementeffectivemeasuresand reforms at all levels. This will be done to to strengthenO&M institutions createadequateinstitutional capacityfor improvingthe performanceof and efficientutilizationof the existingirrigationinfrastructure increasedO&M allocations,in order to continueto provideadequate irrigationserviceand reliablewater suppliesto farmers. Objectives: 4.1 To strengthenand where necessaryto restructurethe set-upof ProvincialIrrigationServices(PRIS) organizational dealingwith O&M of irrigationsystems,down to RantingDinas for uniformity,efficiencyand effectiveness. dealing 4.2 To clarifythe roles and responsibilities of institutions with O&M by the end of fiscalyear 1988/89. This would include of roles of DGWRD and PRIS in planning, the redefinition organization, directingand controlling O&M activities,and structureand staffingneeds at definingthe organizational variouslevels. 4.3 To design and implementa manpowerdevelopmentand training programfor provincialO&M staffand otheragencies'staff at O&M policiesand programs. various levelsinvolvedin implementing It is anticipatedthat this activitywill be implementedby the end of fiscalyear 1989/90. 4.4 To strengthenthe functionof PRIS with regard to the management of O&Mthrough improved personnel management, and the development management information systems(MIS) and monitoring of appropriate and evaluation(M&E) systems. 4.5 To furtherdevelopand executean integratedpolicyfor the functioningand strengthening of WUAs followingguidelines of Irrigation establishedin INPRESNo. 2/1984,and functioning Committeesin line with PP. No. 23/1982.

63 ~

-63-

Annex 1 Page 6 of 12

Policy 5: Budgetingand Programmingfor O&M Governmentwill simplifyand rationalizethe presentbudgetmechanisms for O&M fundingby reducingthe number of fundingchannelsand improvingO&M budget planningadministration. Objectives: 5.1 To introduceimprovedsystemsand proceduresfor O&M programming, monitoringand budgetplanning,by simplifyingthe presentsystem of allocationsthroughboth INPRESDATI I and DGWRD development budget,changingto a needs-basedsystemof allocationof O&M funds. 5.2 To establishsound criteriaand proceduresfor allocationand monitoringof funds to meet the actualneeds for O&M of each irrigationsystem,startingat each RantingDinas level. Policy 6: Rationalization of InvestmentExpenditures Governmentwill rationalizeexpenditureprogramsin the irrigation subsector,and formulateand implementa more realisticirrigation investmentstrategyfor RepelitaV0 Objectives: 6.1 To improveproject selectioncriteriato be used and reviewthe technicaland economicviability,in the assessmentof the total existingand proposedirrigationinvestmentprograms,with a view to rationalizeinvestments. 6.2 To improvethe formulationof prioritiesfor irrigation investmentsand finalizepreparationof a more realisticirrigation subsectorstrategyand investmentprogramfor RepelitaV by the end of fiscal year 1988/89,takinginto account the likely availabilityof funds from differentsourcesas well as implementation capacity.

FTot

Metton P0*

?iletabatc go. t.

Policy

Policy

title

ftudtas of Operotton 4 etoteconre

atre

(a) Tutu.t oItcy to 404u*t* fouwinS etficient at" tn the aetutl ."d4 tttlatipo system

.dlmt entire tor lIne dith Of

re= obj]cttis

l.ttio

tt) Roaot that tha ftwling tot Ol0 on all tooertmn t cootrolted atch.ms to at a sftfictent 11,t tin ttne glth act,-I otnds tor affictent0*9

(I)

(it)

Prtoposed

By

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Say stap.

(t00

tep..n. Prowioions ed* for 0O* fou4tolg on *onal budgpta

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Ptcpst tOtt Coouotiog

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ttpt. mu NW

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are. of lose tbe. tS0 hb, *ntd cYt,t. oath a setovce *atr of less thae 100 ha. bIplxnt

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8tt/l9

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No. of WA'a

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lgo. of sotoia Cttedni

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(Itt)

(tv)

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d. tu ovetr of smil yastam 1aa than (up to) ISO ho coq,lct*d

Wu mu A

tutnt

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WV WA mu

P?I. end sonttor tioplegest aton

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Syatem and ctrvte *tes tranctfterd. Lar a*uoctations of WJ. astabitschd

otltor cod evaloats to all Ptlot $cheas pooitda haes tot tvo.tet of tttigtiton S" taS, 1atgar than 150 ha

WV MA tA

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RaCOmnodtioto tor nationwide toplamotettio

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2.

oltto title

Policy

Cost i cotrty gor 1trrtptien fAN

areas

Idt-tere

(a) oeflestcetote Wil1 *osntocl ly fince alt coots of OmAof Metn ave Lrttgatloneysot

(4)

objOedtoc

Etutblish tedrct C_t ccosctt) y Olsten to o tftn'eA tohr rearems nld SetSeartCtc broqb fros_ ot Crr4sd areas

(it) inpedit. coerseeon of IptiA to the sn sI a7stes

chraon

Action

my

propMd

WbY OtY

(002 IT)

tidIcetors

Critctortns

(U) iorov provincial tteteo g*oteetthrough Coetvtborednl trw bettonerteto s

te lop tMA Wt

eltd rvnue.aA

-

gvenasse

(ii feecbop a pilot se) (1,000 ha) of SUreY

NOT

prodection And solacgcine ot

03154

A report indicattag the C1opitti(Cd proc*dnce of

roist-

0.1 gepii

registration

sifiteeto Modteeseseme of irrigated areas (ii)

fo

ld

and

tiproe revene Oetfos moce of no ttro*th VcllSttctotto snd rAe _esomot ot Ott eto" to irripted todoests

NMt

tows tee eddttttrtion through comPotertcti od better

lot

ftAigt eed IteP_not for trdntog Program S) Stftt aemtors nd tschotccaee Select four Ptlot in Soth flesi jays far destigocr

(dam-

aootm

itficetton Of Plaot, hounMsrtee aed Crete VApptng, Teclassttteatin Vd ftesse._nt of ahout 400nn ha of trr4tgted csre

57/84 tt9/vO

Aseae_nnct emomlted, ceed, and revenue Increaees telh veer

Appoint too tee advisors en reral no

04/P8

Adrsors

1W?

training of at Icett t71 s*end techotiient

8t/89 p9/90

tNober of trdned * esors god tecticitens , tnech vesr

MA, NIV MA.

Agree in Onecipet to ibe tetrsdoctton of

DOe

Alinist obtet1d

03/AS

A"oointant

n

aret"

by 14s9I90 (tti)

appointed

PttoceuSOs (tv)

1.

strsttoon fees

cr c

Direcs t -o*oso fre tirnigticn btsroochtretstton

ot _A eoete ohetefiiartee otP sevic

fees 'Ohich gredoclit reduce the need for jie'eraet funding Subeidies sod fisello .iii becoy the mi. sonrce of tffittentinK boet

Irrcictton

(t)

t_trodors cc icrigatioo serICc fe for fAN foadieg to selected

erec being upgraded for efficiIent A&I, ted soslosto the rueslie

(t)

cres sod

riet

Agrosmdt

co IS? en a voehil for fending eff icisni fAN.

t trodetotis of irniget too serci cc fees en e total of St leest il.lOhe

tor st.

Prepere

105 cod

oppott t0a&,l-

Statoe"

otf teolteste

tents to intdy jsSie cOd SoSist to the iptemstettiq of ItS WV.

SA op

eiV d dretn c cropped -.-o in dif_lret estem

/SR

to

on chtt; e And IAtectoe sting autherity with collection ogete of the

loocel govefeses

crop Oatld

and Oetm

ippleetten. plans.trein teilect perand

topiseinretion. socitocing and

12/3A oeasrde

Collecion of then.. pilot are"e

Prepare plan for seteoeia, of foo to other

01/Nf0

Agreed &edeisstrettve And Judiciel sOreogeemai for extenson to other creast

is

.. IIo.

Poltey

TitIe

Polity

at"

bdt-terst

(it)

~

~

.............

objoettrvo

Aettin

Grodoult .tt0td thb Irrigation s*""ic too to Irtrigted or.. *od to *al provines., sod cos..qontlW

.

-4 .

.

PoptOud

.. by

(0) I plemt wnsion starting ho. MO/M on * csn,trpvtd. bWit by 1996/92?

UV tops

MA.4 lUl 10. Mr

loasttotinnul Oowls.enc

(a)

Strengthentnin 04 1n0itttion. at all 10e1t. to toProve usage ot irrtigtton *tnrt#traCtor* od ofltint nttibsttnn Of 0414 alitattoOs

()

Tt.tobW (GOt t't)

montlotonto

indtettor.

1t2/00 onvorde

Act"

t9s9/9t

Coiloctios

oteod on noItonoide

1t996191

Cotletttn

tpepare TO nd appoint Consultints. Coniult "I"A OSIlAR sd MA duting study. C0 etod stadv

Ol/8R

G.nSntt.nt

10/89

Recomtondattons agreed otlitrte. coocerned

sIeect Art. tot atboslon I^lw

r,'.dn

nt

tsa

selected

t c%arms

ot

Collection

irrigation

CortrO Ia*nd rovlOtail Govetrmnt funding fr irrigott io 0414

4.

. . ...

service foo f kn.hom fictorie.

DeCtin responsibtilttts of inoitutoton dealing tith Otih btwonn DOM 4odPMl (and tbair lnak sIth 9RA &nd MA)

(t)

(it)

Carry nor ao ta ttutioal. trengtbhniog stUd to terift Vtl.. md responitblity of Institutions daltnog w11tth OM41 4ndto T*Vtow and spetity otaffloag nd*l4 at 6ll lena).

VWl

Implemaet _ndactions

WV, lOla MtEOW

re,-

by

kgroa_nt lotordopt.

12/09

of thartos

ppointed

0

Itnstruettonn

nev

org.ntsottion*

Intordopt.

FtDA l550 tins Uli)

1tt*nnthbn orgasinotionol setup at Pits at Il levels d4sulig with 040 of trrtqitton totem

(t)

(it)

Vo6rmato Lional tO4uir.nts

Dise.. Ih.-I

nw- tp,

no. orgt otop to

t

at Prointnlol and obtain *P-

'MA

0vt0 vOltlng organizattonal setop

02/R9

AArod torwl,tio

PC

Rearting Pronteetil

08/90

Nt PITS .t.blitswd

organisatton (P 0A)

plote

tt8ttAII 5(A

PPk, FL

rroval tro& Provinctil tLOiOl.turs

.th

Ltgislatours

(tit)

Besns

Ond tuplotnt a onvomer d.veloornt Vnd tratiIng progrst for 06t taift at o*11 (steln

(t)

on

*n04 Isue tnstruet

(tit)

e-

in.tr

ton.

Fulfill dditional staftgng retqntesntos at distritt and lowerlhql units (tecludino Pete nts and Juro.)

wrPv, KRA ban, mop

Frond1 *dditiontl ntting r*q4ir.nsntn tofr Iprovad PRtS portorso-ot tor otficiat A606. teIlodin reallocation of otaff tot DCv11 to PR15 "a me .s.r

W0/89 6 R9/90

Staff

Carr" ut a srt.v _r_rows dealomant noodo for 01 at PUS lbol

NhW

Prop.? tOR eonsulttets

11/5t

TOM eo"PIetnd

2/SS

Consultanto

Wa/88

fpleantation progrs.

nn

for

to

&11 Consul-

Appoint tsots

to

propirt msndation

appointed

rtet

Ag4red rtacasodat 10 ntordint Sotegrated mnnpoetr dtv loppenc

Of traintgs

by

AgeU IOtI of 12

Vaiiiii

- t

TI(:,*ball, go.

Polit Trile

Policy aras

kdtui-tiar

Artloa

objectives (it)

prooed

taff cepabillOas.S ttie of MIS In piantog s4d Impleetntton ot 05ft, vlth training of at lest 3,000 iddle Rnd lfsoe-le"l field staff. and S00 Staff (at le"at 110 trlnera, 225 all ieav1 e.andeer, and 6' onglnsore) degree-level Trvining by 19g4/90. 420 techitof snother cal high *chool lewl nd Staff (Ipngasats) 1,02n sctlmo, ubse.e tion and villag. level stall, Traains of 1,300 staff (roup Al,

Bp MOU, fA IDA

saystops

IOOl TV

Ifonltorlng

indicatore

04/O0

Areed

ttatning

curriculs

1988/8§1949/t0

wubar

of atolt

triosd

06/4/

Purchase of required eqotpnt

0/SO9

!bnshr

Prare TOR for con nltaot

Rose

Agrood tOR

Appoint ronsultants to nalyne & provara r comondat tu.ne

06/8§

Pinn report recoond.tion.

TIptseat sn personnel nnogeanot systet

03/v0 oneurds

Corner planing .stabitshad lot PitS 0414 sttff

Prpare TnORfor consulttnt

Done

hgread TOP

Appoint consultrats to "aoIva 4 prepare rvco=undettone

0/S8

nPol report and reco_, aec ptad by sndations mad PRUS 0050

lepleont 1IS syatens gli and

12/89 oaerds

Taproved3I6Send '64 PMIS level.

Prepare trainRSocurrtcula teplsesut, monttor and *valuste trltnint

4,000n(roup 0), 8.600 (Group C) and 360 tn*truct"rs. (itt)

of *udiostrengthenintl visual program to support staff tratniag

NtW

Procursesnt of additt. 1 qui*.tf *,t autarial *od

Oupplias Tr4itnini staff (tv)

unwnatWoVs personoal t_Sont and introdura soproprst0 K6( snd RAE systoan at PRIS

it)

lov-lop psrsonnel wAnagasest eyetwn to aupport 04K * provesot

D005D rPS

(it) Carry ot survey on 1HiS Of aod 49t noeds for 046m POs at PalS leval

of AV

of trained

stdfl

and agreed by O1

at

-8

No.

PolLty Titte

$

-

of

Itastabaf a litcy erye

l1d1u

ttre

objectives

Atto

(itl)

proposed

or

Lvaluaete ietlop led Perforwaca of et leat 10 eistting Alls

tey stes

1WV, KR3A tatbitoh dnA fetlon grouPs cod erterIa for ev*lugtion

Strengthen Irrigation Comttees (fasl nd toter-agency coorditstien at arO toiat,l YAbopateo *nd taeCtafn levels through appropritst tratnoto progro

11W, '0l1 ItA

ottofvtg

oditeatore

01/8S1

Ogred

0418

Nuaber of VUlAn*valtad

eteoitoh corktea group to reet_ qatotIna WPY?trattotg program

17)16

Avreed curricula *od coordtiation _echantams

fDplnusot agreed trdnattg Program tn at least 10 pro-

198lO/t9 109/v00

Ober trtnod tn varous ajbuoates *nd Kacceatan

12/87

AIreed

1901t4 19S9/90

Iaber of VlAs estabtlshed aod h bara tratiad

06nd1

Arted

Carrr (tv)

(Cot FT)t

tot

rtItert

votcec for 20n ct ton,GrUo ecebeo cod_n 0,000 SIPA vesbert. fetchlioh Hisblq toordtost ton (t)

Str egthon at lacit 200 edttot Iin WAod ctabilsh nw SPA. as ro`cdir4d. with a sot_ of 20

1W, m1m

tlOA totohItch corkIng grrup to prepare tratotIg ond axtenet"n prolr*s taplawct, mtittr aod

recomodstoade

prograoc tigettcg ".

D.i

Progr.ammigfor 04

(a) ttaltttcatita

aleltioat

rod rattoo-

of oarebejee

t)

tor MIt 0N fotlo, uaFlttgtrogrn_ prasrcing aod budgat pinoS

totroadkcton

of

proeed eyctasscod

ia-

(t)

vroeadurcfr roerfor fil 0C-ounts programig,a wattorton cnd budget plensing, chonsing to a tawdehoSed *yete of atlocattoas

(it)

(tt)

tbtbih dac ted ontort od procedures for olorattoon attitattton cod onttorttg oet tufds to "St ectI Made for 041 of trrtgetton actns

(t)

Prepare atwltfted

hod-

IAPPVIAr

atobti,tJop r,-

gattng arreoamwnotancd WA1,1109 to group cod

recoamewlcttoas

of 0411, alfed at rattionalizng ditferest channels of tbodtice etaditaog ratisoo of funds. and contorato to Mde*bsed altorttoo

IIW

prepare rocea tndcttone

islpecent ne $yetee 6ad procedures for 066 pregrsavtog and btdget planitoo

SdPTIIiJ MA, Ml' 417

Prepare bkdget for 4bt bated on no *tapitied procedures

1980/90 opuar4e

ippitcatton procedures

Cooplete t.wotory of ttrigstton yttow for ofttktiot Nrt on at leost 2S0.000 he by atd-19°2 and a forther 406,0o ha by aid-lP910

0n/87 to 09/89

d4red

Cloaetftcetton of Ogg ced., bnoed or direct OAN cnd overhead cato, or ath ttrtiatton ,"tal

DOW

mpg

of sodfted

"od tIveotory

I

yf of

_~~~~~~~~~~~~~~~~~~~~~~nT . _

no.

Poltr*

Politcy fit.

Nadiw-tots

Are&

(ill)

6.

RAt0o04i1attoo IOottweu0nt oxpenditoreo

of

of (a) Ibttoonlt.attoo progra and 6oPodttare tmplemenoation of a Mor tn"o twnt r91i6tlth stratogy for RIoeptta V

ProineLal btit,t for

romponstwome* 001

(6) Xmrov, prTarlct .010tetov ction citteria of iothe ttbiltty and vestdent prograe As project rottonlitsm "eoomary

(ta)

(6ff)

action

obje0tts

pteoced

of $v,op* prol(0) I0bnr Otte bo4ed oert to atbortttts pro,'tiotal

(t)

Carry nat SO tovaotoeot t,otw 0nd *xeondtturo stody. ahith atroteoi tclu40 a 4#tw1Ie4 il1 00terrayvto of And COtnail .0.o6t.d fundod prolects (both OSo0inS 0a proposed)

ltabish bLvestnot prlorIttes and implemnt a Mor re.Istic strategy And iovet_nt V for lpepit. progra

cod strategy (2) ptparb *t tasst ptogro. by oga the .nd ot

tIprove the priority rIterit AM cod ranking t" ri plementatton erhedule* for oo-goto* projectt

(t)

ReVI.. of lo,oot.et ado fo orotgolag *n4 priorttv *tche. ronking for copletlo,

b

(Got t)

nines

MonitortingI

tAdte*to

4alyo.

cost for etrottore rteuired 064 nd prepa r budget roqst aetordtwly

01/0I onMwrda

Seeardod

rateplount c4mm_ndd am costs for each

1980/49 onamrd

Provist" t,o ctAr

pr

%wado4werto be for I ceplated od projto for eonced anothsr proj0eto

191URI/I

Ibudt And wtoft tron pro%lnoneO (for projoect honded over)

SAP.la

Appotnt cn00tont0 wtth Agreed tOb

01/6t

CowOultanto

Couplte oto4

071811

a4re0d

ProotF And tevs,teat attety for topeItto prepared

Mrw

the

SAutfs km. "WA

n lot. rero* anodntSons for And atote*e l"oettot 0r101tr

lOeA/S

ApfOtq tWv

lhvata of socl. *conodc And tecetmttl ot vrlbtitty high o*1torty 0on-SOhn

12114

sheh,

12

__1 _ _ 1.

. . _ . _ . ..-_ .._8

..

_ .

nl&N tost .0 a bdot*, st.rtM*t/Is*tto tt At marh "thmt askot lasat

of 0o0t

tfn0 oee2ed 0)1 .fftelont

0*1o0nt0d

raCoV*Io

List of priority eoaplat*d

tt-oo

V

proacts

INDONESIA IRRIGATION Project Cost Summary

Local

Investment Costs

Civil works Equipment and supplies

Subtotal consultants Training Studies and surveys Administration Vehicles Land acquisition

Total Investment Costs Recurrent

Total

Total Recurrent Costs Total Baseline Costs Physical contingencies Price contingencies Total Project Costs

Local

US$ million TotaI Foreign

% foreign exchange

% total base costs

143,733.7 107,427.1 251,160.8 27,748.0 14,591.7 13,156.4

87.1 8.8

65.1 8.0

152.2 16.8

43 47

49 5

4,386.7 30,238.5

28,939.7 3,172.3

33,326.4 33,410.8

2.7 18.3

17.5 1.9

20.2 20.2

87 9

6 6

34,625.2

32,112.0

66,737.2

21.0

19.5

40.4

48

13

5,118.6 808.1 14,487.3 713.0 9,054.0

6,242.6 1,171.8 419.5 647.8

11,361.2 1,979.9 14,906.8 1,360.8 9,054.0

3.1 0.5 8.8 0.4 5.5

3.8 0.7 0.3

6.9 1.2 9.0 0.8 5.5

55 59 3 48

2 0 3 0 2

161,177.1 384,308.8

135.2

97.7

232.9

42

75

223,131.6

-

Costs

Establishment costs

Categories)

(by Expenditure

Rp million Foreign

Consultants

Foreign Local

SUBSECTOR PROJECT

0.4 -

-

72,811.8

57,587.5

130,399.3

44.1

34.9

79.0

44

25

72,811.8

57,587.5 130,399.3

44.1

34.9

79.0

44

25

295,943.4 218,764.6 514,708.0 179.4

132.6

311.9

43

100

15.6 16.1

12.4 3.0

28.0 19.1

44 16

9 6

348,267.1 244,199.0 592,466.1 211.1

148.0

359.1

41

115

25,728.3 26,595.4

20,489.5 4,944.9

46,217.8 31,540.3

- 71 ANNEX 2

Table 2

INDONESIA IRRIGATION SUBSECTORPROJECT

GOI's Financing Plan (by Fiscal Year)

(US$ million)

Expenditure items

1987/88

1988/89

1989/90

1990/91

Total

RecurrentO&M /a

13.5

27.3

28.1

14.3

83.2

Incremental O&M

-

0.3

0.6

0.7

1.6

Land acquisition

0.6

2.0

2.4

1.0

6.0

Taxes and duties

1.4

5.4

7.9

3.8

18.5

Strategy) /b

0.2

0.2

-

-

Total

15.7

35.2

39.0

19.8

Study (Investment

0.4 109.7

/a 1986/87levelsof country-wideirrigationO&M expenditures to be maintainedin real terms. Figuresfor 1987/88and 1990/91given here are for needed in these 6 monthseach. Minimum recurrentO&M budgetallocations years would be $26.4millionand $30.0 million,respectively. /b About US$400,000is expectedto be utilizedfrom a USAID grant for financing the local costs for carryingout this study.

INDONESIA Irrigation Subsector Project Ilplementation Schedule Irrigation

ONDJFtANJJAS

Year3

Year2

Year1 /2

il 1586ie7 JFNAMJJAS

iorks

ONDJFMAWJJ

AS

ONDJFAhJJ

(ha) Maintenance Special

75,000 175,000 .......

= -…2.=2=.

150,000 ---- --------

O&f(ha) Efficient

200,000 400,000 700,000 SmallRiverMouths(No.)

..

'5) (No.) Projects On-going

. --------…-…_… (22)

Design

Prccuresent Implesentation

.....

Activities /1 Preparation 1988) /2 Project Year1 (October1987- Septeeber

AS

I1DONESIA Irrigation Subsector Project Implementation Schedule Irrigation Works Executing Agency PRIS

PRIS

Activity

Design Starting Completion Date Date

Procurement Contract Invitation Award

Implementation Start

Completion

Special Maintenance 75,000 ha

03/01/87

08/31/87

09/01/87

12/30/87

01115/88

06/31/88

175,000 ha

11/01/87

03/31/88

04/01/88

06115/88

07/01/88

03/31/89

150,000 ha

10/15/88

03/31/89

04/01/89

06/15/89

07/01/89

03/31/90

10/15/67

03/31/88

04/01/88

03/31/89

04/01/89

03/31/90

Efficient Operation and Maintenance 200,000 ha 400,000 ha 700,000 ha

Being mostly repair work very little design work will be involved which will be handled by PRIS staff.

Work will be done either on force account basis or under petty local contracts procured as and when required.

DOR

Small river mouths

06/01/87

08/31/87

09/01/87

12/30/87

04/01/88

03/31/90

PRIS and DOR

On-going projects 1st package of sixteen projects -V

03/15/87

08/15/87

09/01/87

12/01/87

12/15/87

06/30/89

PRIS and

On-going projects

12/01/87

04/30/88

05/15/88

08/30/88

09/30/88

08/30/90,

DOR

2nd package of

twenty two projects.

1/

Two ongoing projects requiring ICB would have contracts awarded by July 1, 1988, and works completed by June 30, 1990.

"

0 X m

03

-

74 -

ANNEX 2 Table 4

INDONESIA IRRIGATION SUBSECTOR PROJECT

Swamps: ImplementationSchedule (gross areas in ha)

Province

Scheme

Year 1

Year 2

Year 3

Total

Completion of Ongoing Projects Lampung

North Sumatra

Mesuji Telang Bawang T Mesuji Telang Bawang II Mesuji Telang Bawang IV Sei Kualsa Total

6,000 3,800

3,800 8,200

6,000 6,400 7,600 8,200

9,800

12,000

28,200

6,400

6,400

Special Maintenance Lampung South Sumatra

South Kalimantan

North Sumatra

West Sumatra

Efficient O&M South Sumatra

Lampung

South Kalimantan North Sumatra West Sumatra

Rawa Sragi Delta Saleh Delta Upang Sugihan Kiri Seluang Balawang Muhuc Tabungan Puntik Terentang Puntik Denela Benar SeKalugah Percut Sei Tuan Bandar Khalipah Scanggang Pulai Kampai Lumang Lasi Silaut Anai

15,000 6,800

11,800 !0,000 16,000 3,500 5,700 F.C. 5,200

2,600 3,200 2,900 3,400

2,100 300 650 550 850 4,500 500 5,000 _

Total

21,800

43,800

Karang Agung I Karang Agung II Delta Saleh Delta Upang Rawa Sragi Mesuji-TB I Mesuji-TB IT Seluang Balawang Percut Lasi Silaut

9,000

Total

9,000

33,200

Cumulative

9,000

4'.,200 86,800

5,000 6,800

15,000 18,600 10,000 16,000 3,500 5,700 2,600 5,200 3,200 2,900 3,400 2,100 300 650 550 850 4,500 500 5,000

39,950 105,550

3,500 5,700 2,100 500 5,000

9,000 10,000 18,600 5,000 15,000 6,000 6,400 3,500 5,700 2,100 500 5,000

44,600

86,800

5,000 11,800 5,000

15,000 6,000 6,400

- 75 -

ANNEX 2 Table 5

INDONESIA IRRIGATION SUBSECTOR PROJECT

Schedule for Handing Over Swamps Projects to Provincial Organizations

Province

Lampung

South Sumatra

South

Kalimantan

North Sumatra West Sumatra

H85 ST PS -

Project

Rawa Sragi Mesuji TB II Mesuji TB I Karang Agung I Karang Agung II Delta Saleh Delta Upang Seluang Belawang Percut Lasi Silaut

Year 1

Year 2

Year 3

H85 -…PS ST --------------------PS ---------------------PS ST --------------------PS ST -----------ST -------------------… ST -----------ST -----… ---ST -----------ST -----------ST -----------ST ------------

Handed over to Province in 1985 Start transition period Permanent Status. Budget and staff fron Province.

INDONESIA IRRIGATION SUBSECTOR PROJECT Selected Ongoing Projects for First-Year Impleimentation

Province

Project

Civil works sunk cost

Incremental civil works

Total cost

(Rp mln, Vehicle and equip.

Costs constant 1996) Land Adminpuristrachase tion

Agency

Present irrigated area (ha)

Future irrigated area (ha)

2,641 1,909 1,002

2,785 1,909 1,002

144 0 0

1,219 2,227 1,305

3,020 4,497 1,479

4,239 6,724 2,784

127 182 85

72 383 479

95 139 74

0

1,398

1,398

39,840

3,168

43,008

40

1,674

285

Incremental irr4gated area (ha)

Aceh

Alue Ubai Irienggading Pandrah

DOI 1 DOI I DOI 1

North Sumatra

Wampu Rivez R /a

DOR

Bengkulu

Air Musi Kejalo

DOI 1

236

1,180

944

2,346

3,488

5,834

58

0

28

South Sumatra

Air Gegas I

DOI 1

587

2,670

2,083

9,100

2,147

11,247

97

0

63

Lampung

Tulong Mas Way Curup I Mesuji I, II & IIIA /b

DOT 1 DOI 1 DOS

0 1,420 12,400

3,200 2,220 20,000

3,200 800 7,600

2,068 3,241 3,055

9,041 695 6,911

11,109 3,936 9,966

235 20 20

392 0 0

195 35 44

West Kalimantan

Sanggau Ledo

DOI 1

0

555

555

1,573

605

2,178

76

8

51

South Splawesi

Sanrego Pamukulu

DOI 1 DOT 1

0 3,000

6,394 4,400

6,394 1,400

14,530 8,800

9,015 1,423

23,545 10,223

412 60

484 28

380 83

Central Sulawesi

Parigi Poso (part)

DOI 2

1,122

3,398

2,276

0

5,898

5,898

240

156

240

North Sulawesi

Marissa

DOT 1

1,200

2,576

1,376

2,655

1,902

4,557

88

22

50

West Java

Cesanggarung R /a

DOR

6,040

10,608

4,568

10,350

3,138

13,488

24

288

204

East Java

Gondang R /a

DOR

3,678

4,325

647

25,353

1,617

26,970

64

0

32

/a 71

River projects. Swamps projects.

INDONESIA IRRIGATIONSUBSECTOR PROJECT GroundwaterComponent - East Java and SulawesJ ImplementationSchedule

Description Sampean Baru Tubewell systems (25 ha/18-23 hp) East Java tntermediateTechnology (8 ha/5-7 hp) Hand drilled systems (3 ha/3.5 hp)

Quantity (no.)

80

Area (ha)

2,000

100

Year 3 No./Rp M

20

30

1,500

5

1'

150

10

13.8 4.570 --

--- 1st

1,680

399 150

210

222 15

138

20

30

300

Year 5 No./Rv M

1,680

798

105

74

20

60

150

Year 4 No./Rp M

3,360

399

105 120

40

30

150

Total No./Rp M

1,680

399

14.8

725

t

1,680

0.7

25

'

20

Poo

500

South Sulawesi IntermediateTechnology (6 ha/5-7 hp)

Preparationactivities.

Y(sr No.-P

13.3

20

/a

Year 1/a

84.0

Central Sulawesi (Palu) IntermediateTecinology (6 ha/5-7 bp)

Total

Unit cost (Rp M)

80 /

1,848

INDONESIA IRRIGATION SUBSECTOR PROJECT

Groundwater Component - Lombok Implementation Schedule

Quantity (no.)

Description

Intermediate Technology Without sump (12 1/s, 5 hp) 7 ha

cost (Rp M)

Area (ha)

Year I/a No.tRp M

Year 2 No./Rp M

Year 3 No./RV M

Total No./Rp M

Year 4 No./Rp M

Year 5 No./Rp K

15

16.8

105

5

84.0

5

84.0

10

168.0

5

84.0

15

252.0

25

22.8

250

7

159.6

9

205.2

16

364.8

9

2^5.2

25

570.0

Turbine Pump Systems 15 1/s, 10 ho, 10 ha 20 l/s, 15 hp, 14 ha Pilot schemes /b

50 50' 4

38.9 45.5 29.7

S00 700 60

15 15

583.5 682.5

20 20

778.0

35 35 4

1,361.5 1,592.5 118.8

15 15

583.5 682.5

50 50 4

1,945.0 2,275.0 118.8

Well Drilling (1OZ failures)

14

15.8

4

632

5

79.0

9

142.2

5

79.0

14

221.2

1,615 4 118.8 46 1,572.8 39 2,056.2

- 79 -

ANNEX 2 Table 9

INDONESIA IRRIGATIONSUBSECTORPROJECT Land Reclassification, Valuationand Strengthening of Directorateof IPEDA Implementation Schedule FY

Consultants

Year 1 I II III IV

Year 2 I II III IV

Year 3 I II III IV

-----------------------

Aerialphotos Pilot scneme ----------------------------------------

Mapping Developmentof reclassification+ revaluation

-

system

Reclassification Training Institution Strengthening Plan Implementation of InstitutionalStrengthening Plan

---------------------------------------------------------------------

-------------------------------

ANNEX 2 Table 10

- 80 -

INDONESIA IRRIGATION SUBSECTOR PR.OECT

A Pilot Scheme of Mapping for Land Reclassification (5,000 ha) Implementation Schedule

Months

October 1987

Activities

November

December

Production of line-map Production of village map

Enlargementof photos Enlargement Updating Production

of photomaps

village

map

of rincikan

maps

Field measurements of parcels and plots Identificationof plots & owners boituLdaries Report

__

_______

January 1988

81

ANNEX 2 Table 11

INDONESIA IRRIGATION SUBSECTOR PROJECT

Ongoing Land Reclassification Program (-000 ha)

Area (ha)

FY 0 1986/87

FY 1 1987/88

WTC I /a

233.500

WTC II /a

266,500

KDO /b C&W /c ADB /d

FY 2 1988/89

FY 3 1989/90

FY 4 1990/91

103,000 699,000 (8 packages) 80,000

/a The first and second mapping contract under the West Tarum Canal Improvement Project (Ln 2560-IND). /b The Kedung Ombo M. Dam and Irrigation Project (Ln 2543-IND). /c The Central & West Java

Provincial Irrigation Project (Ln 2649-IND).

/d The third irrigation package financed by the Asian Development Bank.

INDONESIA IRRIGATION SUBSECTOR PROJECT

Ten-Year Land Reclassification Program (area in '000 ha)

W. Java Jatiluhur C. Java Yogyakarta E. Java N. Sumatra W. Sumatra S. Sumatra Lampung S. Sulawesi NIB New projects Total Cumulative area

Note:

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 100 0 0 0 0 0 0 0

0 0 0 0 179 37 15 15 15 15 20 0

20 20 20 10 214 57 35 31 35 32 55 0

35 30 80 28 279 69 43 31 70 32 103 50

100 70 220 28 344 69 43 31 ,0 32 103 100

232 131 305 33 454 79 53 36 75 42 108 140

287 166 338 48 509 104 81 55 85 62 113 160

342 201 381 67 564 129 109 55 95 82 123 180

397 236 436 67 626 154 137 55 105 102 133 200

0

100

296

529

850

1,210

1,68b

2,008

2,328

2,648

0

100

396

925

1,775

2,985

4,673

6,681

9,009

11,657

n

In Year 1, a pilot area of about 5,000 ha will be established to assess the current mapping procedures and to develop a simplified procedure for mapping.

s

- 83 -

ANNEX 2 Table 13

INDONESIA IRRIGATION SUBSECTOR PROJECT

Introduction of Irrigation Service Fee (ISF) Implementation Schedule

Recruitment of consultants

01/31/88

Establishmentof provincial- and district-level implementationunits

12/31/87

Completion of village socioeconomicprofile survey

}

Formulation of implementationplan for ISF

}

Review of implementationplans and legal implications

}

Selection and training of personnel

}

Extension work

}

ISF collection Monitoring and avaluation Final report including the plan for extension of ISF to other areas

07/31/88

12/88 onwards 12/88-11/89

01/90

- 84

-

ANNEX 3 Table 1 PROPOSEDAPPROACHTO O&K PROCEDURES

Selectareas suitabl for directO&

Selectareasrequiring specialmaintenance

t

Carry out survey,design until and construction, areas readyfor efficient 06K

Analyzeat sectionand subsectionlevel: - staffinglevelsand structure - staffdutiesand responsibilities - staffeducationand trainingbackground * existingO&H facilities * existingO&N procedures - scheduling - data collection * reportingperiods for systemcontrol - divisionof responsibilities - maintenancework identification reportingand repair - existingand historiclevelsof O&N funding Identifysuitablepersonnelto be trainedas trainers.

of efficientO&H proto facilitatethe introduction Make recommendations may be requiredare: cedures. Areas where changes/adjustments - Staffing- levels,structure,dutiesand responsibilities - O&K procedures * O&H budgetallocations

and preparematerialand equipment Implementagreedchanges/adjustments efficientO&M procedures. for introducing Preparetrainingprogramdetailsand material.

efficientO&0 Train selectedstaff as trainersto assist in introducing procedures.

06M staffwith Introduceefficient06M proceduresin order to familiarize (if any). changes/amendments Commencetrainingprogramin sectionoffice followedby each subsectioni4 turn.

of efficientO0m proceduresand trainingprogram. Monitorintroduction

Evaluateimplementation of efficientO&K procedures.Make considered changes/a.endments if required. ReinforceOK proceduresby additional training. Evaluatetrainingprogram,make changes/amendments as required. Repeat traininglf requiredin selectedlocations.

INDONESIA IRRIGATION SUBSECTOR PROJECT

Training and Related Activities

Brief description

Type of training

Overall coordination in planning

Target participants

Location

Lead implementing agency

-

-

BDP

DOI-I, DOt-II, DAAD, DOS

-

-

BDP

DOI-I, DOI-II, INTAL DAAD, DOS, DOR, Division of Personnel I

-

-

BDP

PRIS, DOI-I,

programmingand training modules preparation Data banking services for timely and effective disseminationof training material and information;coordination, monitoring and evaluation of training activittes and analysis of traiuing needs

Monitoring and evaluation of DSWRD training activities including individual and collectiveimpacts of training

DOI-II, DOS

Manpower planning to identify training needs for PRIS staff Short-Term BDP Courses (a) O&M for Ir and BE level engineers one month duration,25 participants per batch, regularly offered Diklat course

Cooperating agencies

-

Formal lectures with field practice

150

-

Division of Per- BDP, DOI-I, sonnel, DGWRD DOI-IT, PRIS

PUSDIKLAT BDP RTCs

PRIS, DOI-I, DOI-IT

Brief description Short-Term BDP Courses (cont-d) (b) O&M for STM (TechnicalHigh School) level staff, one month duration, 25 participantsper batch, regularly offered Diklat course intended for middle and lower levels main systems O&M staff

Type of training

Target participants

Location

Lead implementing agency

Cooperating agencies

Formal lectures with field demonstrations

425

PUSDIKLAT BDP RTCs

PRIS, DOI-I, DOI-II

(c) O&M for Swamp Irrigation,for Ir and BE level staff, one month duration with 25 participantsper batch, regularly offered Diklat course

Formal lectureswith field practice

100

PUSDIKLAT BDP RTCs

DOS, PRIS

(d) GroundwaterPlanning, Constrlctionand O&M for Ir and BE level staff, one month duration, 25 participantsper batch, regularlyoffered Diklat course

Formal lectures with field demonstration

25

DIKLAT RTCs

BDP

DOI-II, PRIS

Formal diploma or degree course works

72

Bandung

BDP

PRIS, DOI-I, DOI-II, DOS, DOR

Di loma or Degree-OrientedCourses Ta) Bipowered (in-country),diploma oriented course started with Dutch government assistance and pattern after the 11 month Diploma Training Courses offered by the Institute of Hydraulic Engineering, Delft. Specializationsare in the fields of irrigationand drainage, development of swamps and coastal areas and rivers and river structures

I'4I

0 VW

I

Brief descript'in Course (cont-d) Diploma or Degree-Oriented (b) overseas training ror MSc level degrees for Ir and BE level staff, examples are the Master of EngineeringCourses for 17 to 21 months at the Roorkee and Anna Universitiesin India.

Type of training

Formal degree course works

Main System O&M Staff Training for Surface IrrigationAreas Lectures and in(a) In-servicetraining for section and lower field practice and level main systems O&M staff. Initial demonstration training of 6-day duration (broken by two-day rotations) and with follow-up on-the-jobtraining of similar duration

Location

Lead implementingagency

Cooperating agencies

Overseas

BDP

DOI-I, DOI-II, DOS, DOR, PRIS

3,050 for initial & 4,310 for follow-up training

On-thejob

DOI-I

PRIS, DOI-II, DOS, DOR

100

PRIS, Jakarta

DOI-I

PRIS, DOI-TI

Target participants

26

(b) Trainers for in-service training. Senior level O&M staff of the PRIS and DOI-I. One to two months duration

Lectures and infield practice and demonstration

(c) Workshop for middle-levelprovincial,district staff (Group A)

Workshop

1,500

Province, DOI II District

DOI I, DAAD, MOH, PRIS, DIPERTA, local government

(d) Training for lower-levelstaff at subdistrict and village level (Group B)

Lectures, field demonstration,discussion

4,040

Subdistrict, Village

DOI TI

DOI T, PRIS, DIPERTA, local government

(e) Training instructors(Group I)

Lectures, discussion

Province

DOI II

DOI I, PRIS, DIPERTA, local government

360

A!! O

"

0

Brief description

Type of training

-

Main System O&M Staff Training for Surface IrrigationAreas (cont'd) (f) WUA members training, intended for WUA key 30? lecture; 30% members and jurus. The training will be audiovisualpresenfor about 15 days (broken down with 2-3 day tation; 40% field rotations). The focus will be mainly on demonstrationand constraints to tertiary systems O&M; inter- discussion actions among design philosophy,main system operation and tertiary O&M; water use and distribution,simplificationof tertiary systems, operation including gates and other control structures,duties and responsibilitiesof WUA in irrigation O&M; OEM practicesand cropping systems interactions, canal maintenance and integrated approach to WUA formationand functioning; so-calledGrour C training. (g) Follow-up of WUA members training for about the same duration

Production of AudiovisualMaterials Production of audiovisualmaterials relevant to main and tertiary systems O&M for training purposes and general public information

Mainly on-the-job. Include field demonstration,audiovisual presentation and discussions.

Target participants

Location

Lead implementing agency

Cooperating agencies

8,810

SubdisDOI-II tricts and farmers fields

DAAD, District and subdistrict authorities, DOI-I, DOR

6,710

RECs and farmers fields

DOI-II

DAAD, District and subdistrict officials, DOI-1, DOS

PPAV

DOI-II, DAAD, DOI-I, PRIS

a

9

Target

Brief description

Type of training

participants

Lead

Location

_

impletentinj agency

Main System O&M Middle and Lower Level Main System

Cooperating agencies DOI-I, DAAD, DOI-II, PRIS

(a) O&M for middle and lower levels staff in irrigated swamp areas. Initial 10-12 day training broken down into 3 to 4 day duration intervals

On-the-job

152

Job sites DOS

DOI I, DAAD PRIS, DOI-11

(b) Follow-up training at yearly

On-the-job

242

Job sites DOS

DOI-I, DAAD, PRIS, DOI-II

Lectures, audiovisual and field visits

10

Provinces, DOS Jakarta

DOI-I, DAAD, @ PRIS, DOI--II

(a) Training of Action Group on WUA Organizationand Development for 2 months

Lectures for 4 weeki. 3 weeks for field practice and 1-2 weeks for wrap-up and evaluation

201

Agric. DAAD training centers, job sites

Local governmental institutions, DOI-II, DOI-I, DOS

(b) Training of section, subsection and village staff for WUA organization, reorganizationand strengtheningfor one month

Lectures and field practice with 2-3 days wrav-up session

1,020

Agric. DAAD training centers, job sites

Local governmental institution, DOI-It, DOI-I, DOS

Training of IPEDA Field Staff. Four month training consisting of 3 modules each on ground survey, use of aerial photos and data processing

Lectures and exercises. Training for 4 months for the regional and field office staff. Formal co.

Regional field offices Jakarta

BDP

intervals

(c) Trainers Training for 6-week duration Training of Community Or;anizers

360

Directorateof IPEDA

D z

9

.

w

INDONESIA IRRIGATION SUBSECTOR PROJECT

Consultancy Services for Project Implementation (Man-months)

Foreign consultants Year 1 Year 2 Year 3 Total Special maintenance and efficient OEM for irrigated areas Special maintenance and efficient O&M for swamps Ongoing projects (supervision of detailed design) Core design units (South Sulawesi and Lampuutg) Ongoing projects (construction supervision) Irrigation Swamps Rivers Small river mouths Identification, study and design Construction supervision Efficient O&M Groundwater development East Java Lombok Turnover of small systems Central level Regional level Land reclassification and valuation Irrigation service fee Central level Regional level

84 12 6

150 17 24

90 18 11 18

324 47 10 48

63 12 18

130 24 36

40 18 15

233 54 61 9 12 -

Local consultants Year 1 Year 2 Year 3 Total

153 48 6

324 66 24

279 51 35 18

756 165 35 48

331 24 92

262 18 40

690 51 150

30 -

12

18 12

18 30 24

97 9 t-8

12 -

-

9 -

5 15

15 45

15 40

35 100

20 5

50 65

50 100

120 130

6 10

12 20

6 10

24 40

13 36 24

23 116 48

11 102 48

47 254 120

11 12

22 14

10 -

43 26

6 34

18 58

10 32

34 124

-

- 91 -

ANNEX4 Table 2

INDONESIA IRRIGATION SUB'vCTOR PROJECT Consultancy

Personnel Division management expert and evaluation expert expert planning expert

Directorate

of Irrigation

O&M experts specialist Directorate

1 1 1 1

(2 coordination

and Programming

PBMRexpert of

tAricultural

Organization

Review/Strategy

Environmental

1 3 1 1

for main systents

Total

6 18 6 6

12 36 12 12

12 o6 .2 12

30 90 30 30

54

108

30

192

0&M)

90

and workshop for Provincial

9 Staff

and W;A Training)

36

36

90

5

30

60

60

150

1

6

12

8

26

1

6

12

12

30

1

6

4

-

10

1

6

12

12

30

Coordination 6

in Swamp Areas 12

9

27

1

6

12

12

30

6

-

12

7

42

-

-

42

PSME and PCR 6

(DAAD), Ministry

of 4griculture

for WUAOrganization

2 1 -

12 6 -

24 12 -

24 12 -

60 30 -

5 3 2

30 18 12

1 1 1 1

-

-

-

6 6 6 6 -

-

1 1 -

-

6 6 6 6 -

3

18

-

-

-

-

-

1

6

3

and Screngtbening 60 36 24

60 36 24

150 90 60

-

-

-

-

-

-

_

6 6

1

6 6 10

-

-

10

18

-

-

-

-

-

-

-

6

36

-

-

36

-

-

6

6

32

38

12

82

-

-

-

-

2

12

12

-

24

24

36

10

90

1

8

12

10

30

-

-

Study

Study

Coordiration

18

48

Study

with irrigation background

Management Information General

30 30 24 30

Year 1

18

Area Development

Irrigation and drainage engineer Institutional developmeat expert Management systems analyst Financial systems analyst Legal, water resources legislation

Economists Economists drainage

No.

Local Total man-months Year 2 Year 3

3

1

Community organization expert On-farm water manageaent expert Training specialist

Investment

training

1

of Planning

Institutional

Total

12 12 6 12

of staff

24

Training

specialist

Directorate

traintng

5

of Swamps for On-the-Job

Directorate

12 12 12 12

Development

and training

O&Mand on-farm with management soecialist Training speciallst Audio-visual material production expert

Training

6 6 6 6

(1 for on-the-job

of Irrigation

Directorate

for Institutional

Foreign Total man-months Year 1 Year 2 Year 3

No. Diklat and Training Monitoring Traintag Manpower

Services

System

and

- 92 -

ANNEX 5 Table 1

INDONESIA IRRIGATIONSUBSECTORPROJECT CentralGovernmentFundingof O&M (Currentterms) Fiscal year

APBD

APBN Total --- Rp mln --------

Area (ha)

Ave./ha

(Rp)

1979/80

13,267

0

13,267

4,474,706

2,965

1980/81

19,971

0

19,971

4,541,186

4,398

1981/82

26,009

0

26,009

4,574,776

5,635

1982/83

31,235

0

31,235

4,573,577

6,829

1983/84

32,895

0

32,895

4,637,625

7,093

1984/85

30,732

13,438

44,170

5,202,842

8,490

1985/86

32,424

13,999

44,423

5,184,025

8,955

1986/87

31,846

8,131

39,977

4,799,333

8,330

1987/88/a

31,846

11,700

43,546

4,859,333

8,961

/a IncludesadditionalAPBN allocationof Rp 4.5 billionapprovedby BAPPENAS on March 18, 1987. Source: DGWRD,March 1987.

INDONESIA IRRIGATION SUBSECTOR PROJECT

Funding of O&M in the Selected Provinces, 1986/87

From APBD Ha Rp mln

From APBN Ha Rp mln

Ha

APBD4-APBN Rp mln

Rp/ha

Estimated DIK Rpiha Rp mln

Total all sources Rp/ha Rp mln

Jawa Barat + Jatiluhur

897,125

15,628

0

0

897,125

15,628

17,423

3,200

2,871

10,757

18,499

Jawa Tengah

491,773

3,776

265,136

2,197

756,909

5,973

7,891

3,760

2,846

11,651

8,819

65,377

872

0

0

65,377

872

13,338

10,250

670

23,588

1,542

Jawa Timur

681,965

4,500

286,282

2,732

968,247

7,232

7,469

6,080

5,887

13,549

13,119

Sumatera Utara

263,846

2,450

0

0

263,846

2,450

9,286

1,820

480

11,106

2,930

Sumatera Barat

217,443

1,400

0

0

217,443

1,400

6,438

1,140

248

7,678

1,648

Sumatera Selatan

338,331

1,697

67,993

679

406,324

2,376

5,848

1,090

443

6,937

2,819

Lampung

106,868

1,312

44,809

448

151,677

1,760

11,604

2,390

363

13,997

2,123

Sulavesi Selatan

150,046

1,750

72,911

704

222,957

2,454

11,007

4,550

1,014

15,557

3,468

Nusa Tenggara Barat

141,901

1,415

0

0

141,901

1,415

9,972

1,290

183

11,262

1,598

3,354,675

34,800

737,131

4,091,806

41,560

10,157

3,667

15,005

13,824

56,565

D.I. Yogyakarta

Total

62760

.~~~~~~~~~~~~~~~H

- 94 -

ANNEX5 Table 3

INDONESIA IRRIGATIONSUBSECTORPROJECT Fundingof O&M in the Rest of the Provinces,1986/87

Provinces Riau

Area for O&M 124,379

Jambi D.I. Aceh

52,610 154,233

APBD+APBN Rp per Total ha Rp bln

Estimated DIK Rp per Total ha Rp bln

APBD+APBN+DIK Rp per Total ha Rp bln

1.29

2,390

0.30

12,762

1.59

14,406 0.76

1,625

0.09

16,031

0.84

1.02

3,390

0.52

10,003

1.54

13,365 0.27

1,625

'.03

14,990

0.30

10,372

6,613

D.K.I.Jakarta

20,202

KalimantanBarat

88,217

9,071

0.80

1,625

0.14

10,696

0.94

KalimantanTengah

115,223

6,418

0.74

2,390

0.28

8,080

1.01

KalimantanSelatan

188,472

3,429

0.65

2,390

0.45

5,819

1.10

KalimantanTimur

57,015

7,080

0.40

1,625

0.09

8,705

0.50

SulawesiUtara

51,827

13,506 0.70

1,625

0.08

15,131

0.78

SulawesiTengah

45,949

15,692 0.72

1,625

0.07

17,317

0.80

SulawesiTenggara

24,859

10,057 0.25

1,625

0.04

11,682

0.29

Bali

59,922

17,523

1.05

1,615

0.10

19,138

1.15

?IusaTenggaraTimur

31,430

15,224 0.48

1,625

0.05

16,849

0.53

Maluku

11,633

15,473 0.18

1,625

0.02

17,098

0.20

0.06

1,625

0.01

10,416

0.07

23,844 0.05

1,625

0.00

25,469

0.05

2,204

2.28

11,303

11.70

IrianJaya

6,825

Timor Timur

2,097

Total

11034,893

8,791

9,099

9.42

Note: DIK contributionassessedat about 70% of PRIS routinebudget in selected provinces. DIK in these provincesbased on averagesestablishedfor selected provinces.

ISDON1ESIA

IRRIGATION SV85ECTOR PROJECT Increunt-1

Slice Batk

World Bank Slice Year 1 2 3 4 5 6 7 8 9 10 it 12

1

Bank 2 Bank 3 aank 4

Area of eff. O0t to be funded by antk on a declining basis Area of eaf. O&4 to be assumed by OI on a ohased btais Bank funding 001

funding

/a

Increenotal

Note:

required required

/a /a

funding

1987188

1988/89

1989/90

199n/91

199l192 1992193

200,000

160,000 200.000

120.000 160.000 300.00()

8O,O0 120,000 240.000 300,000

40.r00 80,000 180.000 240,000 300,000

20n.000 0

is based

1993/94

1994/95

1995/96

1997/98

1996197

19q8/99

n 60,000 90,000 280,0700 240,000 350.00

60,nno 90.0on 180,000 280.000 350,000

0 60,noo 90,000 21(,000 280,O0 400.00(0

0 60,000 0 140.no0 7n,non 210,00 -140.000 1420,000 240,q00( 400,000 320.noo 400.000

0 70,000 160).000 240,00t, 32n.000 400.000

740,G00

840.0no

880,000

920,000

960,000

1,040,000

1.130,000

1,177n(nOO 1,190,000

40,000

1;0,000

260,000

460,000

720,000

1,030,000

1.340,000

1.660,000

t,970,00n

2.330,000

4.320

6.960

8,880

10,080

10,560

11,040

11.520

12,480

13.560

14,040

14.280

1,440

3.120

5.520

8,640

12,360

16,080

19,920

23,64(

27,960

32.520

fifth year

and 02 the

sixth

on on average be 1002 the year.

480

of Rp 12,000 ftrst

2(10(1/01 20nl/02

2002/03

Total

0

580.000

2,400

1999/on

0 40,000 120.000 180,000 240,000 300.000

360,000

0

Funding by the Bank would phased to 02 in the fifth

Yundinz Reul.rernti for Effticent 04M - rrrig-ton (area in ha and funding in Rp aillton)

2,710.000

0 80,000 160.000 240,000 320.000 800,000 3,100.000

9.600 37,200

0 80.000 160 C000 240D000 429O.00 3,420,000

0 0

240,n00 3.60.00oo

5,760 41,04n

0 80 000 160.000

0 3.°00.000

3,00O,000 3,900,000

0

2,880 43,920

200.000 200,000 300,Oo0 300.000 300,noo 300.000 350.000 350,000 400,000 600.000 400,000 400.000

46,600

per ha.

Year. 802 the

second,

602 the

third.

402 the

fnurth,

202 the

Year,

except

that

tn the

fourth

Bank slice,

the funding

would

be

1k

INDONESIA

IRRIGATIONSUBSECTORPROJECT IncrementalFunding Requirementsfor Efficient O&M (area tn ha and funding In Rp million) World Bank Slic. Slice Year

1987188

I 2 3 4 5 6 7 8 9 10 11 12

Bank I Bank 2 Bank 3 Bank 4

9,>00

Baok on

a -.

D01funding /a Note:

3,600 15,000 44,800 50.000

1991/92 1,800 10,000 33,600 40,000 50.000

1992/93 1993(94 0 5,000 22,400 30,000 40.000 50.000

81,400

113,400

135,400

147.400

0

7.son

8,600

26,600

S4,600

108

386.4

976.*

1,360.8

/s

0

93.6

1i3.2

319.2

funding

is based on an average

required

1994195

0 11.200 13,000 30.000 40,000 55.000

0 10.000 15,000 30.000 44.000 60,000

1995196

0 10.000 15,000 33,000 48,000 60.000

1996197

0 10,000 22,00o 36,000 48,000 60,0G0

1997/98

0 11,000 24,000 36,000 48,000 60,000

1998199

0 12.000 24.000 36,000 48,00. 65,000

1999100

0 12.000 24,000 36.000 5z.Oo

151,200 159,000

166,000

176,000

179.000

185,000

124,000

92.600

141,800

196,000

249,000

299,000

356,000

415,000

4715.000

1,624.8

1,768.8

1,814.4

1,908

1,992

2,112

2,148

2,220

1,488

655.2

1,111.2

1,725.6

2,352

2,988

3,588

4,272

4,980

5,712

2000101

2001/02

2002/03

Total

0 12.000 24,000 39,000

0 12,000 26,000

0 0

75,000

38,000

0

9.000 25,000 56,000 50,000 50,000 50.000 55.000 60,000 40,000 60,000 65,000 65.000

basai

required

Incremental

5,400 20,000 56,0M

1990/91

32,200

l.ining

Area of eff. 06M to be assumed by GOT on a phaaed basas Bank funding

7,200 25,000

1989/90

9.000

Area of off. '1%&to be funded by

1988/89

Svamps

/a

of Rp 12.000

Funding by the BLnk would be 1002 the first year, 80t funding would be pbased to 02 In the fifth year.

525,000 900 6,300

56..000 456 6,744

600,000

600,000 0

7,200

per ha. the second,

401 the

third, 402 the

fourth,

202 the fifth

year and 02 the saxth

year,

extept

that

in the fourtb

Bank slice,

the

-97-

ANNEX 5 Table 6

INDONESIA IRRIGATIONSUBSECTORPROJECT Projectionof Rural PBB and ProposedAllocationfor IrrigationO&M (Rp billion)

Fiscal year 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

PBB tax Collection Taxable assessed efficiency rates 75.0 78.8 82.7 86.8 91.2 95.' 100.5 105.5 110.8 116.3 122.2 128.3 134.7 141.4 148.5 155.9 163.7 171.9 180.5

80 81 82 83 84 85 87 89 90 90 90 90 91 92 93 94 95 96 97

20 20 20 20 25 25 25 30 30 30 30 30 35 35 35 35 35 40 40

Total PBB revenue 60.0 63.8 67.3 72.1 95.7 101.7 109.3 140.9 149.6 157.1 164.9 173.2 214.5 227.7 241.7 256.5 272.2 330.1 350.2

Proposedallocationof PBB to 06M /a Ootion 1 Option 2 Option 3 0.0 5.2 5.5 5.8 7.8 8.2 8.9 11.4 12.1 12.7 13.4 14.0 17.4 18.4 19.6 20.8 22.0 26.7 28.4

0.0 8.4 8.9 9.4 12.5 13.3 14.3 18.5 19.6 20.6 21.6 22.7 28.1 29.8 31.7 33.6 35.7 43.2 45.9

0.0 9.3 9.9 10.5 14.0 14.8 15.9 20.5 21.8 22.9 24.0 25.2 31.3 33.2 35.2 37.4 39.7 48.1 51.1

/a PBB is now dividedas follows: 10% to centralgovernment 16.2% to the provincialgovernments 64.8% to localgovernments 9% to collectors Option 1: 50% of the provincialshare of rural PBB would be allocatedto 06M (8.1%). Option 2: 50% of the centraland provincialgovernment'sshare of rural PBB would be allocatedto O&M (13.1). Option 3: 50% )f the provincialand 10% of the districtgovernment'sshare of rural PBB wouldbe allocatedto 06M (14.58%). Note: Projectionis based on increasein assessmentof 5% per year and collection efficienciesand taxablerates as shown in the table.

INDONESIA IRRIGATION

Projected

SUBSECTOR PROJECT

Sources of Incremental financing for Efficient 061 (Rp million)

Projected sources of funds

Fiscal year

1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/2000 2000/01 2001/02 2002/03

/a

7T 7d

Areas to be Total design irr. & swamp turned over to WUAs areas /a -- - -_-_--

5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000 5,400,000

0 7,000 14,000 44,000 60,000 60,000 65,000 70,000 75,000 80,000 80,000 80,000 85,000 90,000 90,000 90.000

Remaining areas for eff. O&M (ha)

Phasing of efficient O&M …

Remaining under other 06M

5,400,000 5,393,000 5,379,000 5,335,000_ 5,275,000 5,215,000 5,150,000 5,0o0,000 5,005,000 4,925,000 4,845,000 4,765,000 4,680,000 4,590,000 4,500,000 4,500,000

209,000 434,000 790,000 1,140,000 1,490,000 2,245,000 2,655,000 3,115,000 3,575,000 4,035,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000

5,191,000 4,959,000 4,589,000 4,i95,000 3,785,000 2,970,000 2,495,000 1,965,00 1,430,000 890,000 345,000 265,000 180,000 90,000 0 0

Funds required for all Additional To maintional for tain preO&M sent 0EM lb

43,546 43,489 43,376 43,021 42,538 42,054 41,530 40,965 40,360 39,715 39,070 38,425 37,740 37,014 36,288 36,288

2,508 5,208 9,480 13,680 17,880 26,940 31,860 37,380 42,900 48,420 54,000 54,000 54,000 54,000 54,000 54,000

O&M

Total

46,054 48,697 52,856 56,701 60,418 68,994 73,390 78,345 83,260 88,135 93,070 92,425 91,740 91,014 90,288 90,288

World Bank Ic Irrigation Swamp areas areas Total

APBD + APBN + DIK

PBB /d

Service fee le

108 386 977 1,361 1,625 1,769 1,814 1,908 1,992 2,112 2,148 ),2.0 1,488 900 456 0

34,246 34,091 34,419 31,460 30,313 35,855 31,236 30,817 29,988 28,563 26,882 15,425 12,752 7,554 4,552 5,588

9,300 9,900 10,500 14,000 14,800 15,900 20,500 21,800 22,900 24,000 25,200 31,300 33,200 35,200 37,400 39,700

0 0 0 1,000 3,600 6,400 8,800 12,300 15,900 19,900 24,800 29,200 34,700 41,600 45,000 45,000

2,400 4,320 6,960 8,880 10,080 10,560 11,040 11,520 12,480 13,560 14,040 14,280 9,600 5,760 2,880 0

Present design area of 4,800,000 ha in Public Works irrigation and 600,000 ha of reclaimed swamp areas. Budgeted APBD and APBN for 1987/88 of Rp 43.546 billion. Based on World Bank initially assumtng full financing of efficient 06M and then Phasing down. E sharing Based on IPEDA-s most conservative estimate of increase in PEB rural collections and Option 3 of cost

for

2,508 4,706 7,937 10,241 11,705 12,329 12,854 13,428 14,472 15,672 16,188 16,500 11,088 6,660 3,336 0

Total

46,054 48,097 52,256 53,201 59,618 59.384 68,790 77,045 82,160 87,035 91,870 86,325 89,840 89,014 88,088 87,988

O&M.

We Assumes that after a three-year pilot introduction of water service fees, such fees wtll be assessed in step with the completion of efficient 06M. Also assumed that Rp 2,500/ha would be levied in the first year of collection, Rp 5,000/ha in the second year, Rp 7,500/ha in the third vear and Rp 10,000/ha in the fourth year. /f Remaining subsidy for O&M would be only that by DIK, subsidies from AP80 and APBN would no longer be required.

1ui

INDONESIA IRRIGATION SUBSECTOR PROJECT Realization of Physical Targets

Program

Repelita IV target

Realized 1984/85 & 1985/86

-

Actual and Projected for Repelita IV (ha)

Projected for: 1986/87 1987/88 1988/89

Total

Shortall of target ha %

Rehabilitation of irrigation project

360.0

72.6

24.7

34.4

20.0

151.7

208.3

57.86

New irrigation construction

600.0

92.1

43.7

40.1

22.0

197.9

402.1

67.02

Swamps new construction and rehabilitation

460.0

93.9

4.8

16.6

5.0

120.3

339.7

73.85

Flood control & other conservation 500.0 works

115.7

34.1

72.2

34.0

256.0

244.0

48.80

Source:

BINA of DGWRD.

- 100 -

ANNEX 6 Table

INDONESIA IRRIGATION SUBSECTOR PROJECT

Actual and PlannedInvestmentExpendituresfor the Remainder of Repelita

IV

(Rp billion)

Repelita IV plan

Shortfall Amount

%

239.1 311.4

717.5 -3.0

75.0 -1.0

69.4

550.5

714.5

56.5

46.2 188,2

69.6 91.4

398.8 568.8

1,862.9 470.9

82.4 54.1

190.7

234.4

161.0

967.6

2,163.8

69.1

22.3 5.2

7.9 8.5

6.5 17.2

8.0 4.8

68.4 46.8

157.5 -1.2

69.7 -2.6

34.8

27.5

16.4

23.7

12.8

115.2

156.3

57.6

92.0 71.6

98.4 46.8

46.2 48.0

33.6 129.6

42.1 53.0

312.3 349.0

680.3 324.0

68.5 48.1

1665.6

163.6

145.2

94.2

163.2

95.1

661.3

All Subsectors GOI External loan

4,436.8 1,851.1

247.7 258.1

361.7 195.3

154.3 209.4

101.5 386.3

153.4 180.1

1,018.6 1,229.2

3,418.2 791.9

77.0 42.8

Total

6,287.9

505.8

557.0

363.7

487.8

333.5

2,247.8

4,218.1

67.0

Program

Rehabilitation GOI External loan Subtotal New Construction GOI External loan Subtotal Swampa GOT External loan Subtotal Rivers GOI Externl

loan

Subtotal

/a

198 7 /88/a

1984/85

1985/86

1986/87

956.6 308.4

81,6 95.7

77.5 71.7

31.1 39.8

15.2 68.5

33.7 35.7

1,265.0

177.3

149.2

70.9

83.7

2,261.7 869.7

50.4 90.8

163.5 76.8

69.1 121.6

3,131.4

141.2

240.3

225.9 45.6

23.7 11.1

271.5

992.6 673.0

1988/89

Total 1984/89

1,004.3 60.3

Additional budget allocations for investment of Rp 59.5 billion approved March 18, 1987 distributed to subsectors on same proportionate basis as Bina planned for the initially proposed allocation of Rp 42 billion.

Source:

Bina, DGWRD.

2

- 101 -

AN!EX 6 Table 3

lNDONESIA IRRIGATIONSU8SECTOR PROJECT

Central Governmant (DIP) Investment Exw nditures Actual Expenditures 1984/85 and 1985/86. Estimate for 1986/87 and Proposed for 1988/89

GO0

Irrigatton Small + medium Large Ground water Rehabilitation O04 /a Subtotal Rivers River improvement Flood control Subtotal Swamps Tidal Inland

51.9 92.1 6.4 81.6 13.4

1984/85 External loan Total

22.2 64.8 3.8 95.7 0.0

74.1 156.9 10.2 177.3 13.4

GOt

66.1 90.9 6.5 77.5 14.0

1985/86 External loan Total

24.9 91.0 50.1 141.0 8.3 1.8 71.7 149.2 0.0 14.0

GOI

21.8 44.1 3.2 31.1 8.1

1986/87 External loan Total

21.9 94.1 5.6 39.8 0.0

GOI

1987/88 External loan Total

46.7 138.2 8.8 70.9 8.1

5.8 44.4 50.2 37.3 140.6 177.9 3.1 3.2 6.3 15.2 68.5 83.7 11.7 0.0 11.7

GOI

19.5 46.6 3.5 33.7 8.2

1988/89 External loan Total

24.6 64.3 2.5 35.7 0.0

44.1 110.9 6.0 69.4 8.2

245.4

186.5

431.9

255.0

148.5

403.5

108.3

161.4

272.7

73.1

256.7

329.8

111.5

127.1

238.6

27.2 64.8

42.1 29.5

69.3 94.4

16.1 82.3

2.3 44.5

18.4 126.8

15.4 30.8

8.0 40.0

23.4 69.8

2.4 31.2

11.4 118.2

13.8 149.4

23.9 18.2

20.3 32.7

44.2 50.9

92.0

71,6

163.7

98.4

46.8

145.2

46.2

48.0

93.2

33.6

129.6

163.2

42.1

53.0

95.1

12.4 .11.3

4.4 6.7

16.8 18.0

11.7 10.6

1.1 4.1

12.8 14.7

3.5 4.4

4.5 4.0

8.0 8.4

3.1 3.4

9.8 7.7

12.9 10.8

3.4 4.6

4.5 0.3

7.9 4.9

23.7

11.1

34.8

22.3

5.2

27.5

7.9

8.5

16.4

6.5

17.2

23.7

8.0

4.8

12.8

Planning

5.1

11.8

16.9

6.3

8.6

14.9

1.7

8.3

10.0

1.1

1.0

2.1

1.6

6.0

7.6

Training

1.6

1.6

3.2

1.5

0.0

1.5

0.5

1.4

1.9

0.3

0.n

0.3

0.6

0.0

0.6

Research

4.4

3.2

7.6

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Subtotal

Total

/a

372.2

285.8 658.1

383.5

209.1 592.6

DIP only.

Note: Tertiary developmaentinclude in Small + Medium and Large. Source: UWna, D¢WRD, March 1987.

164.6 227.6

394.2 114.6

404.5 519.1

163.8

190.9

354.7

INDONESIA IRRIGATION

Allocations

SUBSECTOR

PROJECT

of Loans and Disbursement

to January

1, 1987

IBRD Financed Projects (US$000)

Credit/ Loan No.

Cr. 995 1578 1645 1811 1958 2118 2119 2375 2431 2543 2560 2649

Project

Irrigation XV Irrigation X Irrigation XII Irrigation XIV Swamp Reclamation I Irrigation XVI Irrigation XVII Provincial Irrigation II Swamp Reclamation Project II Kedung Ombo Dam West Tarum Canal Central and West Java Prov. Irrig. Total

Starting date

Mar Jun May Apr Mar Apr Apr Nov Sep Jun Jun Mar

80 78 79 80 81 82 82 84 84 85 85 86

Closing date

Jan Dec Mar Jan Dec Dec Mar Dec Jun Dec Dec Dec

87 86 86 87 87 87 88 87 91 91 91 92

Allocated

Spent to 01/01/87

45,000 140,000 77,000 116,000 22,000 37,000 70,000 89,000 64,000 156,000 43,400 166,000

43,880 141,000 77,000 117,900 17,500 37,000 70,000 88,274 35,000 145,600 43,400 166,000

32,374 97,004 66,507 97,545 12,287 25,643 35,548 52,620 5,934 6,718 184 0

1,025,400

982,554

Loan amount

-

-

432,364

Balance of Loan Allocated

11,506 43,996 10,493 20,355 5,213 11,357 34,452 35,654 29,066 138,882 43,216 166,00 550,190

-

12,626 42,996 10,493 18,455 9,713 11,357 34,452 36,380 58,066 149,282 43,216 166,000 593,036

.

INDONESIA IRRIGATION

Allocations

SUBSECTOR

PROJECT

of Loans and Disbursement

to January

1, 1987

ADB Financed Projects (US$'000)

Credit/ Loan No.

Cr. 399 434 475 479 480 518 522 581 582 627 638 639 685 769 725 799

Project

Wawotobi Sungai Brantas Teluk Lada Citanduy Jambu Aye Lagkahan Irigasi Kedu Selatan Irigasi Bali (EEC) Waru-Turi (1645-IND) P.I. Baro Raya Batang Ilung Simalungan Lombok Sumbawa Jambu Aye Langkahan P2AT Central Java T.A. Program Loan Irrigation Pack* e III Total

Starting date

Dec Dec Nov Nov Nov Jul Jan Dec Oct May Aug Aug Jul Jan Dec Dec

78 79 80 80 80 81 82 82 82 83 83 83 84 86 84 86

Closing date

End End Mar Dec Feb Jun Jun Dec Dec Dec Jul Jun Jul Jun Jun Mar

87 86 88 87 87 88 88 88 86 90 91 87 91 91 90 93

Balance Allocated

of Loan

Allocated

Spent to 01/01/87

34,300 39,000 35,000 55,200 5,700 87,700 33,600 77,000 4,500 52,000 85,000 3,450 68,000 12,200 25,000 120,700

21,026 39,000 24,209 55,200 3,190 78,250 33,600 77,000 4,500 52,000 85,000 3,450 68,000 12,200

14,858 35,538 18,886 33,763 2,079 51,969 12,334 14,059 1,628 2,229 19,774 2,151 3,045 0

6,168 3,462 5,323 21,437 1,111 26,281 21,266 62,941 2,872 49,7i1 65,226 1,299 64,955 12,200 0 0

19,442 3,462 16,114 21,437 3,621 35,731 21,266 62,941 2,872 49,771 65,226 1,299 64,955 12,200 25,000 120,700

738.350

556,625

212,313

344.312

526.037

Loan amount

INDONESIA IRRIGATION SUBSECTOR PROJECT Allocations of Loans and Disbursement to January 1, 1987 OECF Financed Projects (US 'OO0) Credit/ Loan No.

Cr. 194 219 236 240 247 260 263 264 265 273 274 278 279 281 283 284 285 292 300 302 308

Project

Wonogiri Way Rarem Abung (639-IND/CIDA) Sungai Ular Upper Solo Madiun Langkene Komering Ulu Gunung Semeru Jakarta Flood Protection Sungal Kru3ng Aceh Jakarta Flood Protection Sungai Krueng Aceh Riam Kanan Sungai Jeneberang Bila Sungai Jeneberang Irigasi Madiun (1811-IND) Sungai Brantas (434-IND) Padang Flood Control Upper Solo Improvement Merapi Surabaya River Total

Starting date

Feb May May Dec Dec Dec Oct Oct Oct Jun Jun Jun Jun Jun Feb Feb Feb Feb Dec Dec Dec

79 80 81 82 85 83 83 83 83 84 84 84 84 84 85 85 85 85 85 85 85

Closing date

Aug May May Sep Apr Sep Oct Oct Oct Jun Jun Jun Jun Jun Feb Feb Feb Feb End End End

86 85 88 86 87 88 88 88 88 89 90 90 89 89 91 90 91 91 90 90 90

Loan amount

Spent to

Balance of Allocated Loan

Allocated

01/01/87

40,033 41,850 33,252 3,288 1,307 4,820 11,471 21,548 19,032 23,587 36,573 35,278 3,587 2,247 22,890 27,234 25,532 2,460 20,635 20,313 20,900

36,200 41,850 35,400 3,288 1,307 4,820 12,200 22,930 21,256 23,587 38,400 33,096 3,512 2,247 22,890 27,234 25,532 2,460 20,695 20,313 2,499

8,592 35,410 21,069 2,642 1,013 3,175 1,014 - 1,987 1,258 0 0 53 819 0 0 0 0 0 0 0 0

27,608 6,440 14,331 646 294 1,645 11,186 20,943 18,998 23,587 38,400 33,043 2,693 2,247 22,890 27,234 25,532 2,460 20,695 20,313 2,499

31,441 6,440 12,183 646 294 1,645 10,457 19,561 17,774 23,587 36,573 35,225 2,768 2,247 22,890 27,234 25,532 2,460 20,635 20,313 20,900

417,837

400,716

77,032

323,684

340,805

4

-105 -

ANNEX 6 Table 7 Page 1 of 2

INDONESIA IRRIGATIONSUBSECTORPROJECT EstimatedGOI Fundingof ForeignFinancedProjects (US$1000) % of

Credit/ Loan No.

No. of projects

Loan amount

project cost

GOI funding

Total

OngoingWorld Bank FinancedProjects 995 1578 1645 1811 1958 2118 2119 2375 2431 2543 2560 2649 Subtotal

3 1 1 9 1 5 3 14 3 2 2

45,000 140,000 77,000 116,000 22,000 37,000 70,000 89,000 64,000 156,000 43,400 166,000

45

1,025,400

1

69.0 66.8 65.4 72.0 50.0 52.0 70.0 61.0 60.6 66.0 59.6 66.21

20,217 69,581 40,737 45,111 22,000 34,154 30,000 56,902 41,611 80,364 29,419 84,755

65,217 209,581 117,737 161,111 44,000 71,154 100,000 145,902 105,611 236,364 72,819 250,755

554,850

1,580,250

24,838 28,241 25,345 39,972 4,128 63,507 24,331 55,759 3,259 37,655 2,498 61,552 3,050 6,250 30,175

59,138 67,241 60,345 95,172 9,828 151,207 57,931 132,759 7,759 89,655 5,948 146,552 15,250 31,250 150,875

410,559

1,080,909

OngoingADB FinancedProjects 389 434 475 479 480 518 522 581 582 627 639 685 769/729 725 799 Subtotal

1 1 1 2 1 2 1 2 1 3 2 1 1 2 ?

34,300 39,000 35,000, 55,200 5,700 87,700 33,600 77,000 4,500 52,000 3,450 85,000 12,200 25,000 120,700 670,350

58.0 58.0 58.0 58.0 58.0 58.0 58.0 58.0 58.0 58.0 58.0 58.0 80.0 80.0 80.0

-

106

-

ANNEX 6 Table 7 Page 2 of 2

OngoingOECF-Financed Projects % of

Credit/ Loan No.

No. of projects

194 219 236 240 247 260 263 264 265 273 274 278 279 281 283 284 285 292 300 301 302 308

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

40,033 41,850 33,252 3,288 1,307 4,820 11,471 21,548 19,032 23,587 36,573 35,278 3,587 2,247 22,890 27,234 25,532 2,460 20,635 45,821 20,313 20,900

22

Subtotal Total

Loan amount

project Cvit

GOI funding

70.0 82.2 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0. 70.0 70.0 70.0 70.0 70.0 70.0 70.0

17,157 9,062 14,251 1,409 560 2,066 4,916 9,235 8,157 10,109 15,674 15,119 1,537 963 9,810 11,672 10,942 1,054 8,844 19,638 8,706 8,957

57,190 50,912 47,503 4,697 1,867 6,886 16,387 30,783 27,189 33,696 52,247 50,397 5,124 3,210 32,700 38,906 36,474 3,514 29,479 65,459 29,019 29,857

463,658

189,837

653,495

2,159,408

1,155,247

3,314,655

Total

INDONESIA IRRIGATION SUBSECTOR PROJECT

Yields - Present Situation and Future with Project (T/ha)

Surface irrigation /a Future /b Present Increwith situamental project tion

Crop

Present situation

Swamps /a Future /b Increwith mental project

Present situation

Groundwater Future /b Increwith mental project

Paddy 2.0

4.5 4.0 2.5

5.0 4.5 4.5

0.5 0.5 2.0

2.5 -

2.5

Maize

1.4

3.0

1.6

1.4

2.0

0.6

1.2

3.3

1.1

Soybeans

0.8

1.2

0.4

0.8

1.0

0.2

0.8

1.2

0.4

Groundnuts

0.8

1.0

0.2

0.8

1.0

0.2

0.8

1.5

0.7

-

-

-

-

-

-

0.5

1.5

1.0

HYV (Java) HYV (outside Java) Rainfed (outside Java)

_otton

/a

Includes special maintenance, efficient O&M and ongoing projects.

/b

With-project yields are based on efficient levels of operation and maintenance of systems.

-

-

-

-

5.0 -

3.0 -

-

-

1F'

- 108 -

ANE

7

Table 2

INDONESIA IRRIGATIONSUBSECTORPROJECT Crop Areas- Present

Situation and Future with Prolct (ha)

Crop

SurfaceirrigationOngoingprojects/a Swamps /b Present Future Present Future Present Future situa- with situa- with situawith tion project tion project tion project

Paddy

875,000 875,000

Maize Soybeans Groundnuts Cotton TotalCroppedArea TotalCommandArea Crop intensity(X)

70,000

70,000

Groundwater/c Present Future situa- with tion project

175,000 106,000 106,000

1,044

1,740

70,000

3,500

14,000

10,600

10,600

1,804

3,212

210,000 210,000

10,500

42,000

31,800

31,800

696

3,273

3,500

14,000

10,600

10,600

348

2,165

552

442

70,000 -

70,000 -

1,225.0001,225000 700.000 700.000 175

175

-

-

-

-

87,500 245.000 159.000 159.000

4,444

10.832

70.000

3j795

3.795

117

285

125

140,000 106,000 106.000 175

150

150

/a For ongoingprojects,crop intensitywill increasefrom 125X to 1752 due to increaseIn irrigated area. Therefore,yieldswill increasedue to: (l) incrementalincreasein yieldson presentlycropped area duringthe wet season;and (il) iacreasein irrigablearea particularly duringthe dry season. Area under16 selectedongoi'gprojectsis assumedto be doubledwhen another20 projectswill be selectedin the secondyvoar.AlthoughirrigationInfrastructure is at differentstagesof construction, a reliablesupplyof irrgationwater ts not available. Rence,presentsituationassumesall areasare under rainfedcondition. /b Presentand futurecroppedareas are the same under surfaceIrrigationand swampsas no additionalirrigableareaswill result from special maintenance or efficient 0&M. It is also assumedthat presentand futurecrop intensities under surfaceirrigationand swampsare 175Z and that yieldswill increasedue to availability of trainedextensionstaff,assuranceof wateravailability, and use of recommended inputsand culturalpractices. It is furtherassumedthat one crop of paddywill be grownin the wet season. In the dry season,in additionto plantinga secondrice crop on 251 of the area,the following cropswill be plantedin the followingpercentages:(i) maize 102; (ii) soybeans302; and (iii)groundnuts 102. With increaseddemandfor legumesand GOI emphasison crop diversification, no futher increasein paddyarea duringdry seasonis assumed. However,some farmersin some areas tend to plant paddywheneverwater supplyis assured. In swamps,only one peddy crop is plantedIn the wet season. tc Cottonarea usinggroundwaterit Lombe will decreasegraduallyas farmerswill shiftto more renumerative cropswith groundwaterdevelopment.Less perishablefruitsand vegetables(citrus,onions,garlic and potatoes) will be cropped depending on market conditionsand farmers'experience.The extension serviceshouldcarryout trialsand demonstrations of horticultural cropsin contactfarmers'fieldsand organizesLpplyof fruit seedlingsand vegetableseeds. Cottonwill remainas a rainfedcrop tn the wet season.

ANNEX7

- 109 -

Table 3

INDONESIA IRRIGATION SUBSECTOR PROJECT

Incremental Crop Production - At Full Development (tons)

Surface irrigation

Ongoing projects

Swamps

Groundwater

Paddy

437,500

210,000

-

5,568

653,068

Maize

112,000

16,800

6,360

8,435

143,595

Soybeans

84,000

12,600

6,360

3,371

106,331

Groundnuts

14,000

2,100

2,120

2,969

21,189

387

387

Crop

Cotton

-

-

-

Total

ANX I

- 110 -

Table1I

INDONESIA IRRIGATION SUBSECTORPROJECT Analysisof RepaymentCapacityof WaterUsers (Javafarm modelsusing 1986/87actualfarmgateprices)

Return/ha (Rp '000)

Return/ha Returnper Crop farm farm intensity (Rp '000) (Rp '000)

Fart size (ha)

Returnper farm (Rp '000)

1.00

0.50

Returnper farm (Rp '000)

0.33

Wet Season Rice

401.90

1.00

401.90

401.90

200.95

132.63

Dry Season Rice Maize Sovabeans Groundnuts

384.42 411.75 560.60 520.00

I.n0

0.30 0.1S 0.05

384.42 123.53 84.09 26.00

384.42 123.53 84.09 26.00

192.21 61.76 42.05 13.00

126.86 40.76 27.75 8.58

2,278.67

2.50

1,019.Q4

1,019.94

509.97

336.58

35.00 0.00

17.50 33.50

11.67 44.30

984.94 0.00

525.97 240.00

369.21 360.00

984.94

765.97

729.21

600.00 15.00 100.00 20.00 10.00 6.00

600.00 7.50 50.00 20.00 5.00 3.00

600.00 5.00 33.33 20.00 3.33 2.00

751.00

685.50

663.67

233.93

80.47

65.55

Total Miscellaneous costs Additionalfamilylaborallowance Farm income Off-farmincome/ Total FamilyI eome EstimatedOutgoings Livingcosts Ipeda/PBB National rent House tax Religious contributions WaterUsersAssociation(50 kg) TotalOutgoing. Possiblesavings/repayment capacity

/a Assumesthat a farm family with I ha will not work nff farm;a farm familywith 0.5 ha will have on average I memberworkingfull time off farm;and farm familywith 0.33 ha will have 1.5 membersworkingoff farm at wages of Rp 20,000per month.

- 111 -

ANNEX8 Table 2

INDONESIA IRRIGATIONSUBSECTORPROJECT of WaterUsers Analysisof Repavr-sit'Capacity (OutsideJava farm model usingactual 1986/87 farmgateprices)

Return/ha (Rp 000)

Return/ha Returnper farm farm Crop intensity (Rp '000) (Rp 000)

1.50

Farmsize(ha)

Returnper farm (Rp 000)

1.00

Returnper farm (Rp 000)

0.50

Wet Season

Rice

566.2n

1.00

566.20

849.30

566.20

283.10

Dry Season Rice Maize Soyabeans Groundnuts

481.20 284.30 302.40 337.80

0.50 0.30 0.15 0.05

240.60 85.29 45.36 16.89

360.90 127.94 68.04 25.34

240.60 85.29 45.36 16.89

120.30 42.65 22.68 8.45

Total

1,971.90

2.00

954.34

1,431.51

954.34

477.17

Miscellaneous costs Additionalfamilylaborallowance Farm income Off-farmincome/a Total Income PossibleOutgoings Living costs Ipeda/PBB Nationalrent Housetax Religiouscontributions WaterUsersAssociation(50 kg) TotalOutgoings capacity Possiblesavings/repayment

60.00 0.00 1,371.51 0.00 1,371.51

4n.00 0.00 914.34 120.00 1,034.34

20.00 30.00 487.17 24n.00 727.17

600.00 22.50 150.00 20.00 10.00 12.75

600.00 15.00 100.00 20.00 5.no 8.50

600.00 7.50 50.00 20.00 3.33 4.25

815.25

748.50

685.08

556.26

285.84

42.09

/a Assumesthat a farm familywith 1.5 ha will not work off farm;a farm familywith I ha will have a member workingoff farm half time:and a farm familywith 0.5 ha will have a memberworkingoff farm full time at wages of Rp 20,000 per month.

INDONESIA IRRIGATION SUBSECTOR PROJECT Analysis of Repayment Capacity of Water Users (Java tarm models using government support-level.prices)

Return/ha (Rp -000)

Crop intensity

Return/ha farm (RP '000)

Farm size (ha)

Return per farm (Rp '000)

Return per farm (RP '000)

Return per farm (Rp -000)

1.00

0.50

0.33

Wet Season RIce

729.90

1.00

729.90

729.90

364.95

240.87

Drv Season KLce Maize Soyabeans Groundnuts

642.50 413.30 560.11 305.50

1.00 0.30 0.15 0.05

642.50 123.99 84.02 15.28

642.50 123.99 84.02 15.28

321.25 62.00 42.01 7.64

212.03 40.92 27.73 5.04

2,651.31

2.50

1,595.68

1,595.68

797.84

526.57

35.00 0.00

17.50 33.50

11.67 44.30

1,560.68

813.84 240.00

559.21 240.00

1,560.68

1,053.84

799.21

600.00 15.00 100.00 20.00 10.00 6.00

600.00 7.50 50.00 20.00 5.00 3.00

600.00 5.00 33.33 20.00 3.33 2.00

751.00

685.50

663.67

809.68

368.34

135.54

Total 1iscellaneouugcosts Additional family labor allowance Farm income Off-farm income Total Income Possible Outgo_ng&s LI lng costs Ipeda National rent House tax Religious contributions Water Users Association (50 kg) Total Outgoings Savings

INDONESIA IRRIGATION SUBSECTORPROJECT of Repament Capacity of Water Users Analyi (Outside Java tarm models using government support level prices)

Return/ha (Rp '000)

Crop intensity

Return/ha farm (Rp '000)

Farm size (ha) Wet Season U~lErce Season xice Maize Soyabeans Groundnuts

Return per farm (Rp -000)

Return per farm (Rp '000)

Return per farm (Rp '0Q0)

1.50

1.00

0.50

664.80

1.00

664.80

997.20

664.80

332.40

664.80 312.43 144.86 169.25

0.50 0.30 0.15 0.05

332.40 93.73 21.73 8.46

498.60 140.59 32.59 12.69

332.40 93.73 21.73 8.46

li-,.20 46.86 10.86 4.23

1,956.13

2.00

1,121.12

1,681.68

1,121.12

560.56

60.00 0.00

40.00 0.00

20.00 30.00

1,621.68

1,081.12 3.00

570.56 240.00

621.68

1,081.12

810.56

750.00 22.50 150.00 20.00 10.00 12.75

750.00 15.00 100.00 20.00 5.00 8.50

750.00 7.50 50.00 20.00 3.33 4.25

965.25

898.50

835.08

656.43

182.67

-24.52

DU

Total Miscellaneous costs Additional family labor allowance Farm iie:ome Off-farm income Total Family Income Possible Outgoings

Lisvng costs Ipeda Natior.alrent House tax Religious contributions Water Users Association (50 kg) Total Outgoings Savings

INDONESIA IRRIGATION SUBSECTOR PROJECT

Derivation of Economic Prices (Constant 1987 prices)

Items

Rice Thai 5% brokens, FOB Bangkok Quality adjustment

$/tonne 10%

210 189

249 224

255 230

260 234

Rp/kg 5% + +

30 219 361 18 5

30 254 419 21 5

30 260 428 21 5

30 264 436 22 5

-

3 10

3 10

3 10

3 10

371 241

432 281

442 287

450 293

10 12

10 12

10 12

10 12

Rp/kg Rp/kg

219 184

259 220

265 226

271 232

$/tonne

72

112

114

118

20

20

20

20

Freight + insurance CIF/FOB price Port handling, storage, losses Transport port to wholesaler

+

Transport mill to wholesaler Traders margins

Ex-mill price Conversion to paddy

65%

Milling cost Transport farm to mill

Economic farm gate price Average import/export Maize 'OB US Gulf Port $/tonne Quality adjustment Freight + insurance

Import Parity 1987 1990 1995 2000

Unit

-

Export Parity 1987 1990 1995 2000

-

210 179 295 0 0 0 15 5

249 212 350 0 0 0 18 5

-

3 10

3 10

3 10

262 170

314 204

322 209

10 12

10 12

10 12

148

182

187

192

72 11

112 17

114 17

118 18

15% Rp/kg

5%

65% -

$/tonne 15%

255 260 217 221 358 365 0 0 0 0 0 0 18 18 5 5 3 10

329 214 10 12

0 & Ol

Items

Maize (cont-d) CIF Indonesia Port handling, storage, losses

$/tonne Rp/kg +

92 152 8

+ -

5 10 12

Transport to wholesaler Traders margin Transport farm to wholesaler

Economic farm gate price Average import/export Soya Beans CIF Rotterdam Freight + insurance CIF Indonesia

Import Parity 1987 1990 1995 2000

Unit

Rp/kg Rp/kg

$/tonne

132 218 11 5

134 221 11 5

10 12

10 12

5 10 12

143 106

212 168

215 172

222 178

233 35 268 442 22 5

246 35 281 464 23 S

240 35 275 454 23 5

138 228 11

Port handling, storage, losses Transport to wholesaler

+ +

200 35 235 388 19 5

Traders margin

-

10

10

10

10

Transport farm to wholesaler

-

12

12

12

12

+ $/tonne Rp/kg

Economic farm gate price

Rp/kg

390

447

470

460

Groundnuts Groundnuts oil price Ratio Indonesian Import/groundnuts oil price

$/tonne

560

652

720

636

403 665

469 774

518 855

458 756

Export Parity 1987 1990 1995 2000

$/tonne Rp/kg -

61 101 5

-

5 10 12

10 12

5 10 12

69

125

128

95 157

5 5

97 160 5

100 165 5 5 10 12

133

> £

0.72

(1982-84)

CIF Indonesia shelled groundnuts

$/tonne Rp/kg

0

Items

Groundauts (cont'd) Port handling, storage, losses Transport to wholesaler Traders margins Transport farm to wholesaler Economic farm gate price Urea (46% N) FOB Europe Freight & insurance Ex faztory Palembang, Indonesia

Import Parity 1987 1990 1995 2000

Unit

5%

+ + -

Rp/kg

33 5 10 12

39 5 10 12

43 5 10 12

38 5 10 12

681

796

881

777

$/tonne

$Itonne +

$/tonne Rp/kg

$/tonne Rp/kg + + +

Transtportto wholesaler Storage and wholesalers' margin Transport to farm Economic farm gate price Triple Super Phosphate (TSP, 46% P205) FOB Florida Freight + insurance CIF Indonesia

Rp/kg

$/tonne $/tonne Rp/kg + + +

Transport to wholesaler Storage and wholesalers' margin Transport to farm Economic farm gate price

Export Parity 1987 1990 1995 2000

Rp/kg

118 55 173 285 20 15 10

149 55 204 337 20 15 10

175 55 230 380 20 15 10

185 55 240 396 20 15 10

330

382

425

441

115 15 130 215 20 15 10

214 15 229 378 20 15 10

200 15 215 355 20 15 10

215 15 230 380 20 15 10

260

423

400

425

0h

- 117-

ANNEX 9 Table 2

INDONESIA IRRIGATIONSUBSECTORPROJECT Financialand EconomicPrices (Rp/kg)

Financial prices 1987

Economicprices 1987 1995/a

Outputs Paddy

150

184

226

Maize (shelled)

130

106

172

Soybeans

525

390

470

Groundnuts(shelled)

750

681

881

Cotton

400

598

973

350

230

283

Maize /b

250

133

215

Soybeans

750

488

588

1,000

851

1,101

125

125

125

Urea

125

260

400

TSP

125

330

425

Pesticides(liter)

2,500

10,000

Labor (man-days): Java

1,500

965

965

2,800

2,000

2,000

Inputs Seeds: Paddy

Groundnuts Cotton

Off-Java

10,000

/a In constant1987 prices. b Seedsof improvedHYV, e.g., Arjuna,may cost up to Rp 750/kgand hybrids up to Rp 19500/kg.

-

118 ANNE

10

Page 1 of 1 INDONESIA IRRIGATIONSUBSECTORPROJECT SelectedDocumentsand Data Availablein ProjectFile BackgroundReports 1.

ProjectPreparaLionReports,DGWRD assistedby Sir M. MacDonaldand

Partnersand P.T. Indah Karya,August 1986 and January 1987. 2.

PreparatoryDesigns: ReviewReports for the ongoingprojects,DGWRD

assistedby Sir M. MacDonaldand Partnersand P.T. Indah Karya, February1987. 3.

PreparatoryDesigns: Draft ProvincialSummaries,DGWRD assistedby

Sir M. MacDonaldand Partnersand P.T. IndahKarya, March 1987. 4.

LombokIsland: GroundwaterInvestigation, DGWRD assistec, by ELC -

Electroconsult, October 1986. 5.

Institutional Strengthening Study in Water Managementat Tertiary

Systemand in IrrigationO&M at Main System,DGWRD assistedby DHV and PT Deserco,June 1986. Staff WorkingPapers 1.

Cost Tables

2.

TablesRelatedto Financialand EconomicAnalysis

3.

Chartsof variousorganizations

Chart 1

I

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- - - - -- - 15~~~~~~~~~~~~~L

---

INDONESIA PROJECT SUBSECTOR IRRIGATION Organizational Arrangements for the Implementation of Training Activities

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