Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

We are largely in agreement with your ICR findings:

Despite the undisputed achievements made in terms of an improved equitable water distribution to the mesqas in conjunction with notably increased water productivity and very significant improvements made in the management of irrigation and drainage participation (WUAs), the overall project success was nevertheless constrained by:

A) The failure to deliver electrical power to all individual MESQA pumping stations within the implementation period, which hampered full development of operational WUA and limited mobilization of operation cost saving potentials.

B) The project cost was higher than expected. Assessment of overall readiness and preparedness to execute this complex project was possibly too optimistic, leading to longer project execution durations, additional cost, and resulting in lower than expected ERR.

C) The positive effects of the continuous flow concept did not materialize. Indeed, despite its pivotal role, at the heart of the IIP’s and the IIIMP’s concept, continuous flow was never implemented and is not being implemented. Any pilots in this direction have only been misleading for farmers, as they were actually providing continuous flow, without any limitation of water volume. Moreover, the MWRI is, at policy level and publicly in relation to farmers, still pretending to be pursuing continuous flow, implementing such misleading pilots. What is pending is the MWRI abandonment of continuous flow, at policy level and clearly communicated to farmers.

D) IWMD. The introduction of IWMD has not been consequently implemented. Partly such introduction is not properly functional due to lack of staff and budget, partly it is even being reversed.

From: NDC (Netherlands Development Corporation)

General

The Dutch contribution toward the IIIMP was in the order of EUR20 million, divided into three components. One components was to provide TA to the MWRI for mainly institutional aspects such as the establishments of water boards, and so on to prepare the ground for the infrastructural improvements which would be brought about by the World Bank loan upon loan effectiveness. This component started prior to loan effectiveness and continued well into loan effectiveness. This TA component established procedures to expand participatory water management into, among others, the commander areas of Mahmoudia and Meit Yazid (IIIMP project area). It also introduced and institutionalized training of the MWRI staff (IASs) to ensure continuity of training at all levels well after this component was completed. Under this component, a number of important tests and experiments were performed relating to volumetric distribution in canals as opposed to level distribution under continuous flow.

The other two components provided under Dutch development cooperation were both financial assistance toward the IIIMP to help the MWRI to continue to provide training, and so on and carry out the skills acquired under the TA program after that was completed. This component helped establish and operationalize water boards/WUAs, branch, and DWBs, and so on. It was complementary to the loan and was to be used for all activities which the loan could not be used for under Egyptian regulations (such as procurement of TA and consultancy services). The MWRI was reluctant to purchase expatriate consultancy services mainly due to the red tape involved in the process; however, national consultants were recruited when necessary under this component.

The third component, also financial assistance, was used to finance the feasibility study mentioned in the ICR which was subsequently used as the basis for the Integrated Sanitation and Sewerage Infrastructure Project cofunded by the World Bank and KfW, and so on. I feel this should somehow be included in the ICR report for completeness. It also tends to set the framework in general and provides answers where questions could be asked especially those pertaining to continuity and sustainability.

• 
  The cost of irrigation has been reduced from EGP300 to what amount? From my personal experience, since the price of diesel fuel has been increased, the difference between the two means of pumping has widened even further in favor of electricity being the cheaper.
  
• 
  Farmers take over with diesel units. How is this in proportion to environmental sustainability? How many farmers are taking over with diesels? Are other solutions possible? How does this impact the remarks on mitigating climate risks?
  
• 
  What kind of training is needed? Can there be some more detail in the areas that still have to be covered?
  

• 
  Contrary to indication in this paragraph, women were very much targeted under the TA component of the IIIMP. Provisions are in place to ensure that a certain number of women are elected members of water boards, WUAs, and so on. The IIIMP collected and reported on gender segregated data in all soft aspects of the project. It is probably correct that not many landowners in these command areas are women; nevertheless, it is a fact that women are also very much involved in water management. Kindly amend the said paragraph accordingly.
  

• 
  Is moderately satisfactory not a bit too modest? Satisfactory (as in between ‘moderately satisfactory’ and ‘high’) seems to be more in place.
  

Annex 9. List of Supporting Documents

• 
  Loan Agreement (Loan number 7291 EGT). Integrated Irrigation Improvement and Management Project, May 12, 2005
  
• 
  Project Appraisal Document. Integrated Irrigation Improvement and Management Project, April 7, 2005
  
• 
  Supervision Missions’ Aide Memoires from 2005 to 2016
  
• 
  Midterm Review Report. Integrated Irrigation Improvement and Management Project, May 2012
  
• 
  Restructuring Paper IIIMP, October 2012.
  
• 
  Restructuring Paper IIIMP, March 2014.
  
• 
  Restructuring Paper IIIMP, December 2015.
  
• 
  World Bank Group Country Assistance Strategy for the Arab Republic of Egypt for the Period FY06–FY09 IBRD and IFC, May 20, 2005, Middle East and North Africa Region
  
• 
  World Bank Group Country Partnership Framework for the Arab Republic of Egypt for the period FY 2015–2019, November 2015
  
• 
  Integrated Water Resources Management Plan, MWRI, June 2005
  
• 
  Irrigation Improvement Project, ICR, June 2007
  
• 
  Arab Republic of Egypt, Sustainable Agricultural Development Strategy Towards 2030, Cairo, 2009
  

MAP

1^ The list of key indicators was elaborated in annex 3 of the PAD, however, mainly at the component level. Many of the broad concepts in page 3 of the PAD, such as ‘systems efficiencies’, had not been elaborated in annex 3. Consequently, when it came to identifying the original key indicators, particularly in creating the Results Framework, the ICR was guided more by the 2014 Restructuring Paper which had just four PDO indicators, one of which (value of land) was dropped at that stage. In addition, when the 2014 Restructuring Paper had introduced an indicator as a PDO indicator and the PAD had included that indicator but not as a PDO indicator, the ICR included them in the Results Framework as if they had been PDO indicators all along.

2^ The units of measurement for two indicators were also changed. The unit for water productivity indicator was changed from m³/ha crop cycle to water productivity increase (in percentage) for main crops, because the new unit reflected better the PDO objective of ‘efficiency of irrigated agriculture water use’, for example, when higher value/higher water use crops were introduced by the farmer. For the same reason, the unit to measure equity within a mesqa was changed from ‘difference between land productivity (T/ha) between head- and tail-end farmers’ to ‘ratio of water availability measured at head and tail end’.

3^ Once it was realized that electrification was going to be slow, because it was within the purview of institutions other than the MWRI, beneficiaries were willing to accept, as an interim measure, diesel units which decreased operational costs for the beneficiaries to some extent. This improved the number of fully operational WUAs but it still fell short of the target.

4^ Continuous flow means a variable but nonstop supply of water to the heads of the branch canals. In contrast to rotational flow, the same amount of water that is normally provided during the ‘ON’ period of the rotation is provided, but spread out over the full period. Consequently, daily discharges under continuous flow are smaller than those during ‘ON’ periods of a rotation. However, when the project applied continuous flow on a number of branch canals, it found that changing from rotational flow to continuous flow did not have a significant effect on water productivity. In addition, a key requisite for continuous flow in the branch canals is the ability to measure and regulate flows into the branch canals. The regulation of flows into branch canals, particularly during periods of low flow or high demand, has to be equitable and transparent to the farmers. Such a limitation made continuous flow infeasible for many branch canals.

5^ A site-specific Environmental and Social Impact Assessment/ESMP was prepared for the larger siphon with risk of old siphon failing, and it was agreed that the ESMP would be generalized to other siphons.

6^ Samples from the Mahmoudia canal sediments were analyzed to determine the safe method of handling/disposal.

7^ In agricultural land drainage, the purpose of water table control is to establish a depth of the water table that no longer interferes negatively with the necessary farm operations and crop yields. However, shallow water tables can increase the risk of flooding and affect the quality of drinking water with health consequences for the communities. The African Development Bank (AfDB) recently announced a grant agreement to complement the World Bank’s support to the National Drainage Programme, which aims at optimizing the benefits of irrigation by draining excess irrigation water from agricultural land to reduce waterlogging and consequent soil salinity, in addition to making more land available for cultivation. This is expected to result in higher crop yields in the target areas, higher farm incomes, and increased food security and poverty reduction in general.

8^ ‘Efficiency’ in the PDO goes beyond the inputs and outputs and carries a sense of being able to accomplish something (for example, equitable distribution of water at the mesqa level) with the least waste of time and effort.

9^ In constant 2016 U.S. dollar, about 51 percent of the project expenditures had been incurred before 2013.

10^ The increased value of land and rental costs in improved areas is due to the higher expected NPV of benefits derived from the project investments. It was not quantified in the economic and financial analyses because it would mean double counting the same project benefits.

11^ Couple of key differences in assumption also arose during project implementation regarding the benefit from water savings. Water savings which were assumed as a benefit at appraisal were not included for the ICR because water lost to drains or groundwater aquifers and ‘saved’ in improved buried mesqa and marwa areas was (and is) anyway reused downstream by other farms to a large extent. Essentially, it can be argued that water is not really ‘saved’. That is the reason why in the economic analysis, no value was assigned to the water ‘saved’. Similarly, achieving ‘continuous flow’ (see footnote 2 to see what it implied) could even have a negative NPV, because it incurred considerable costs, including monitoring costs by the farmer, but it did not produce perceivable benefits in that mesqa, in terms of yield and without the water savings for the whole system. Definitely, the farmers at any particular mesqa had no incentive to incur the cost of monitoring and coordinating.

12^See Discounting Costs and Benefits in Economic Analysis of World Bank Projects, OPSPQ. May 9, 2016. “Where no country-specific growth projections are available, we suggest using 3% as a rough estimate for expected long-term growth rate in developing countries. Given reasonable parameters for the other parameters for the other variables in the standard Ramsey formula linking discount rates to growth rates, this yields a discount rate of 6%.” Note prepared by Marianne Fay (GGSVP) et al., February 18, 2016.

13^ Similar arrangements exist for subsurface drainage works.

14^ See paragraph 60.

15^ Water lost to drains or groundwater aquifers and ‘saved’ in improved buried mesqa and marwa areas was (and is) anyway reused downstream by other farms to a large extent, so it can be argued that water is not really ’saved’. That is the reason why in the economic analysis in the ICR, no value was assigned to the water ‘saved’. 

16^ Proposed new designs had significant reduction in material and backfilling costs. Old designs consider up to four times the needed capacity of pumps and pipes.

17^ Based on the residual imputation approach which approximates the marginal value of product of water, by subtracting all costs of production except water from the total value of output, its economic value was derived. Water used in the without-project situation in the project areas (3.7 billion m³) produces a net benefit of LE 1.7 billon (about US$290 million), about LE 0.46 per m³.

18^ Achieving ‘continuous flow’ (see footnote 2 to see what the term implied) could even have a negative NPV, because it incurred considerable costs, including monitoring costs by the farmer, but it did not produce perceivable benefits in that mesqa, in terms of yield and without the water savings for the whole system.

19^ The original planned coverage had to be revised because of the diminished value of expenditures in 2004 real U.S. dollar terms.

20^The GOE has been cutting back fuel subsidies, and hence the diesel oil price has increased now to LE 1.80 per liter. In real terms, however, it has only increased by 20 percent since 2004. Electricity generation is favorably affected by the larger natural gas reserves, which will maintain electric power generation (by gas turbines) at a reasonable cost. Farmers purchase electricity at the concessional rate of LE 0.27 per kWh, whereas commercial tariff is LE 60 per kWh. In real terms, the electricity tariff for agriculture has not increased since 2004. However, because one of the major sources of benefits from the IIIMP improvements are derived from reduced irrigation costs (by switching diesel to electricity pumping), a sensitivity analysis was done and presented in this assessment report, using the U.S. costs for these to sources of energy, given that there is no reliable estimation of their economic costs and CFs in Egypt’s changing environment.

21^ http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG?page=2.

22^ See Discounting Costs and Benefits in Economic Analysis of World Bank Projects, OPSPQ. May 9, 2016. “Where no country-specific growth projections are available, we suggest using 3% as a rough estimate for expected long-term growth rate in developing countries. Given reasonable parameters for the other parameters for the other variables in the standard Ramsey formula linking discount rates to growth rates, this yields a discount rate of 6%.” Note prepared by Marianne Fay (GGSVP) et al., February 18, 2016.

23^ Diesel and electricity in the United States average 63 U.S. cents per liter and 12 U.S. cents per kWh, respectively. Converting these values into Egyptian pounds, the CFs become 3.08 (diesel) and 3.08 (electricity).

24^ Since the late 1980s, the GOE has provided financial and technical support for the adoption of mesqa improvements (including single-point pumping to each mesqa and the improved mesqa itself), coupled with the development of WUAs to manage water distribution and maintenance. The package is usually well received by farmers because it reduces pumping costs and water distribution inequalities and gives farmers greater control over water management, resulting in increased productivity and enabling shifts to higher-value crops. The package also includes mesqa improvement cost-sharing mechanisms between the GOE and the beneficiaries. For pumps, pump houses, and auxiliary equipment, farmers pay the cost of the improvements in installments over a three-year period, without interest. For mesqa, marwa, and drainage improvements, farmers pay the cost of the improvements in installments over a 20-year period, without interest. In both cases, payments include 10 percent to cover the MWRI’s administrative expenses.

25^ Similar arrangements exist for subsurface drainage works implemented by the EPADP.

 

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