Docstoc

29257-CAM-PCR

Document Sample
29257-CAM-PCR Powered By Docstoc
					Completion Report




Project Number: 29257-01
Loan Number: 1753-CAM(SF)
December 2009




Cambodia: Stung Chinit Irrigation and Rural
Infrastructure Project
                                 CURRENCY EQUIVALENTS

                          Currency Unit       –      riel (KR)

                                   At Appraisal            At Project Completion
                                   23 May 2000             30 June 2008
                 KR1.00      =     $0.000259               $0.000244
                  $1.00      =     KR3,856                 KR4,096

                                       ABBREVIATIONS

      ADB           –      Asian Development Bank
      AFD           –      Agence Française de Développement
      FWUC          –      farmer water user community
      GRET          –      Groupe de Recherche et d’Echanges Technologiques
      IRC           –      Interministerial Resettlement Committee
      ISF           –      irrigation service fee
      LBAT          –      labor-based appropriate technology
      MOWRAM        –      Ministry of Water Resources and Meteorology
      MRD           –      Ministry of Rural Development
      O&M           –      operation and maintenance
      PCR           –      project completion report
      PIU           –      project implementation unit
      PMO           –      project management office
      PDWRAM        –      Provincial Department of Water Resources and Meteorology
      SCIC          –      Stung Chinit irrigation committee
      SDR           –      special drawing right
      SMEC                 SMEC Joint Venture
      TA            –      technical assistance
      WUC           –      water user community
      WUG           –      water user group

                                             NOTE

                                 In this report, "$" refers to US dollars.




Vice-President       C. Lawrence Greenwood, Jr., Operations 2
Director General     A. Thapan, Southeast Asia Department (SERD)
Country Director     P. Kamayana, Cambodia Resident Mission (CARM), SERD

Team leader          P. Long, Project Implementation Officer, CARM, SERD
Team members         S. San, Assistant Project Analyst, CARM, SERD

In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
                                     CONTENTS
                                                                       Page

BASIC DATA                                                                i
MAP                                                                      vi
I.   PROJECT DESCRIPTION                                                 1
II.  EVALUATION OF DESIGN AND IMPLEMENTATION                             3

       A.    Relevance of Design and Formulation                         3
       B.    Project Outputs                                             4
       C.    Project Costs                                               5
       D.    Disbursements                                               5
       E.    Project Schedule                                            6
       F.    Implementation Arrangements                                 6
       G.    Conditions and Covenants                                    6
       H.    Consultant Recruitment and Procurement                      7
       I.    Performance of Consultants, Contractors, and Suppliers      7
       J.    Performance of the Borrower and the Executing Agency        7
       K.    Performance of the Asian Development Bank                   8

III.   EVALUATION OF PERFORMANCE                                          8

       A.    Relevance                                                    8
       B.    Effectiveness in Achieving Outcome                          11
       C.    Efficiency in Achieving Outcome and Outputs                 11
       D.    Preliminary Assessment of Sustainability                    12
       E.    Impact                                                      13

IV.    OVERALL ASSESSMENT AND RECOMMENDATIONS                            13

       A.    Overall Assessment                                          13
       B.    Lessons                                                     14
       C.    Recommendations                                             15

APPENDIXES

       1.    Project Framework (Original)                                17
       2.    Summary of Project Physical Outputs                         25
       3.    Summary of Vehicle and Equipment Purchases                  28
       4.    Overview of Project Implementation Arrangements             29
       5.    Status of Compliance with Loan Covenants                    33
       6.    Summary of Resettlement Issues                              36
       7.    Summary of Irrigation Infrastructure Design Chronology:     39
       8.    Review of Project Economic Analyses                         46
       9.    Sustainability Assessment                                   52
                                       BASIC DATA

A.   Loan Identification
     1.    Country                          Cambodia
     2.    Loan Number                      1753–CAM(SF)
     3.    Project Title                    Stung Chinit Irrigation and Rural Infrastructure
     4.    Borrower                         Kingdom of Cambodia
     5.    Executing Agencies               Ministry of Water Resources and Meteorology
                                            and Ministry of Rural Development
     6.    Amount of Loan                   SDR12,183,000 ($16,000,000)
     7.    Net Loan Amount                  SDR10,211,223 ($14,738,557)
     8.    Project Completion Report Number PCR: CAM 1150

B.   Loan Data
     1.    Appraisal
           – Date Started                       2 May 2000
           – Date Completed                     23 May 2000

     2.    Loan Negotiations
           – Date Started                       2 August 2000
           – Date Completed                     3 August 2000

     3.    Date of Board Approval               5 September 2000

     4.    Date of Loan Agreement               12 October 2000

     5.    Date of Loan Effectiveness
           – In Loan Agreement                  10 January 2001
           – Actual                             28 February 2001
           – Number of Extensions               1

     6.    Closing Date
           – In Loan Agreement                  30 June 2007
           – Actual                             4 December 2008
           – Number of Extensions               1

     7.    Terms of Loan
           – Interest Rate                      1.0% during grace period and 1.5%
                                                thereafter
           – Maturity (number of years)         32
           – Grace Period (number of years)     8

     8.    Terms of Relending (if any)          Not applicable

     9.    Disbursements
           a.        Dates
                Initial Disbursement     Final Disbursement        Time Interval
                     23 April 2001        4 December 2008            92 months
                  Effective Date        Original Closing Date      Time Interval
                 28 February 2001           30 June 2007            76 months
    ii


                     b.       Amount (SDR million)

                                                         Last      Net
                                            Original   Revised Amount       Amount                   Undisbursed
    Category                              Allocationa Allocation Available Disbursed                  Balanceb
    01 Civil works, part A                  3.60             4.43        4.43         4.06              0.37
    02 Maintenance, part A                  0.05             0.06        0.06         0.00              0.06
    03 Vehicle and equipment, part A        0.25             0.25        0.25         0.21              0.04
    04 Consulting service, part A           1.72             2.75        2.75         3.52             (0.78)
    05 Training, part A                     0.14             0.14        0.14         0.00              0.14
    06 Incremental admin, part A            0.64             0.64        0.64         0.62              0.02
    07 Civil works, part B                  1.69             0.86        0.86         0.70              0.16
    08 Maintenance, part B                  0.19             0.10        0.10         0.04              0.06
    09 Vehicle and equipment, part B        0.18             0.19        0.19         0.20             (0.01)
    10 Consulting services, part B          0.36             0.36        0.36         0.25              0.11
    11 Training, part B                     0.02             0.02        0.02         0.00              0.02
    12 Incremental admin, part B            0.40             0.40        0.40         0.29              0.11
    13 Interest charge                      0.69             0.69        0.69         0.31              0.38
    14 Unallocated                          2.26             1.30        1.30         0.00              1.30
            Total (SDR million)            12.18            12.18       12.18        10.21              1.97
           Total ($ million equivalent)    16.00            16.81       17.66        14.74              2.92
a
  The difference between the original amount and the revised total amount is due to the exchange rate variation
   between SDR and the US dollar.
b
  The undisbursed loan amount of SDR1.97 million (equivalent $2.92 million) was canceled on 4 December 2008.

             10.     Local Costs (Financed)
                     - Amount ($ million):        14.26
                     - Percent of Local Costs:    55
                     - Percent of Total Cost: (%) 100

    C.       Project Data

             1.      Project Cost ($ million)


    Cost                           Appraisal Estimate               Actual

    Foreign Exchange Cost                  9.60                      11.23
    Local Currency Cost                   14.30                      14.36
            Total                         23.90                      25.59

             2.      Financing Plan ($ million)
                                                                                                       Actual
    Cost                                          Foreign     Local          Total      Foreign         Local      Total

    Implementation Costs
      Asian Development Bank financed               7.70       7.40          15.10            9.77       4.51      14.28
      Government of Cambodia financed                          4.80           4.80                       8.15       8.15
      Agence Française de Développement             1.00       1.70           2.70            1.00       1.70       2.70
      financed
      Beneficiary financed                                     0.40           0.40                                  0.00
            Subtotal                                8.70      14.30          23.00           10.76      14.36      25.13
                                                                                                                 iii



    Interest during Construction Costs
      Asian Development Bank financed                 0.90                          0.90       0.46                     0.46
      Government of Cambodia financed                                               0.00                                0.00
      Beneficiary financeda                                                         0.00                                0.00
            Subtotal                                  0.90           0.00           0.90       0.46      0.00           0.46
                     Total                            9.60          14.30          23.90      11.23     14.36          25.59
    a. AFD provided parallel grant co-financing of €3.25 million equivalent to about $2.7 million based on exchange
    rate in 2001.
    Note: Numbers may not sum precisely because of rounding.

            3.         Cost Breakdown by Project Component ($ million)
                                                              Appraisal Estimate                        Actual
     Component                                          Foreign         Local        Total    Foreign   Local          Total
     A.   Base Cost
          1. Irrigated agriculture development
             (part A)
           a. Farmer community organization                  0.80           1.60     2.40
                 and extension
           b. Irrigation infrastructure                      4.60           5.40    10.00
           c.    System management                           0.60           0.40     1.00
                 01A     Civil works                                                            3.23     2.82          6.05
                 02A     Maintenance                                                            0.00     0.00          0.00
                 03A     Vehicle and equipment                                                  0.25     0.02          0.27
                 04A     Consulting service                                                     5.01     0.05          5.06
                 05A     Training                                                               0.00     0.00          0.00
                 06A     Incremental administration                                             0.26     0.60          0.87
          2. Rural infrastructure (part B)                   1.50           3.40      4.90
                 01B     Civil works                                                            0.24     0.71          0.95
                 02B     Maintenance                                                            0.03     0.03          0.06
                 03B     Vehicle and equipment                                                  0.26     0.01          0.26
                 04B     Consulting service                                                     0.35     0.00          0.35
                 05B     Training                                                               0.00     0.00          0.01
                 06B     Incremental Administration                                             0.13     0.27          0.39
                         Subtotal (A):                       7.50       10.80        18.30      9.76     4.51      14.27
     B.   Contingencies
          1. Physical contingenciesa                         0.50           0.90      1.40                             0.00
          2. Price contingenciesb                            0.70           2.60      3.30                             0.00
                08     Unallocated                                                                                     0.00
                       Subtotal (B):                         1.20           3.50      4.70      0.00      0.00         0.00


     C.   Interest Charges                                   0.90           0.00       0.90     0.46                    0.46
                07     Interest Charge
                              Total c                        9.60       14.30d      23.90      10.23      4.51          14.74
a
  Physical contingencies are based on 10% of base costs.
b
  Price contingencies are based on average annual escalation of 2.4% for foreign exchange and 6% for local currency
  costs.
c
  Numbers may not sum precisely because of rounding.
d
  Local currency figures include taxes and duties of about $2.9 million equivalent.
iv


         4.        Project Schedule

  Item                                                             Appraisal Estimate                     Actual
  Construction supervision (part A)
     Contract date                                                    2001                         7 September 2001
     Completion                                                       30 June 2007                 30 June 2008

  Construction supervision (part B)
     Contract date                                                    2001                         2 May 2002
     Completion                                                                                    30 June 2006

  Civil works components
  a) Irrigation and drainage infrastructure (part A)
        Prequalification and tendering                                2001                         December 2003
        Date of award                                                                              6 September 2004
        Mobilization                                                                               October 2004
        Start of construction                                         July 2004                    15 October 2004
        Completion of construction                                                                 30 June 2008

  b) Rural road maintenance (part B)
      Prequalification and tendering
      Date of award                                                   Mid-2001                     31 August 2002
      Start of construction                                                                        31 August 2002
      Completion of construction                                                                   30 April 2006

  Other milestones:
         1.   4 February 2004: Approval for minor change of project scope
         2.   9 July 2007: Approval of first extension of loan closing date from 30 June 2007 to 30 June 2008
         3.   4 December 2008: Approval of cancellation of SDR1,971,777.17 (equivalent to $2,924,914.54)
         4.   4 December 2008: Closing of loan accounts.

5.       Project Performance Report Ratings
                                                                                  Ratings
                                                              Development                    Implementation
Implementation Period                                          Objectives                       Progress
From 28 Feb 2001 to 31 Dec 2001                                Satisfactory            Satisfactory
From 1 Jan 2002 to 31 Dec 2002                                 Satisfactory            Satisfactory
From 1 Jan 2003 to 31 Dec 2003                                 Satisfactory            Partly satisfactory
From 1 Jan 2004 to 31 Dec 2004                                 Satisfactory            Satisfactory
From 1 Jan 2005 to 31 Dec 2005                                 Satisfactory            Satisfactory
From 1 Jan 2006 to 31 Dec 2006                                 Satisfactory            Satisfactory
From 1 Jan 2007 to 28 Feb 2007                                 Satisfactory            Satisfactory
From 1 Jan 2008 to 30 Jun 2008                                 Satisfactory            Satisfactory



D.       Data on Asian Development Bank Missions
                                                                          No. of    No. of   Specialization
Name of Mission a                           Date                         Persons Person-Days of Members b
Fact-finding mission (for loan)        7–25 February 2000                     6                        d, a, m, e, 2c
Fact-finding mission (for              12–14 March 2000                       2             3          d, c
preparation of resettlement plan)
Appraisal mission                      2–23 May 2000                          4             22         a, d, j, k
Review 1                               17–20 October 2000                     1              4         a
Review 2                               19–23 March 2001                       1              5         a
Review 3                               2–10 December 2001                     1              6         f
Review 4                               10–14 December 2001                    2             12         a, f
                                                                                                                          v


    Review 5                               2–10 December 2002                      1               9           a
    Review 6                               24–27 March 2004                        1               4           a
    Review 7                               24 February–4 March 2004                1               9           a, g
    ADB special mission 8                  24 March–4 April 2004                   2              12           d, l
    Review 9                               11–21 May 2004                          1              11           a
    Review 10 a                            24 June 2004                            2               3           a, g
    Review 11 a                            6–17 June 2005                          3               5           a, g, c
    Review 12 a                            24 February–3 March 2006                2               7           a, g
    Review 13 a                            26–29 September 2006                    3               5           a, g, f
    Review 14                              9–12 May 2007                           2               8           a, g
    Review 15                              9–10 October 2007                       1               4           a
    Review 16 a                            8–9 April 2008                          2               4           a, g
    Project completion review c            31 August–19 September                  2              20           c, g
                                           2009
a
    Fielded concurrently with other missions.
b
    a – project implementation specialist and engineer, b – financial analyst, c – consultant, d – economist,
    e – environment specialist, f – assistant project analyst, g – operations and implementation officer, h – transport
    specialist, i – senior operations assistant, j – counsel, k – programs officer, l – principal project specialist, m – social
    development specialist, n - social development officer.
                                                                                                                                           103o00'E                                            LAO 107o00'E
                                                                                                                                                THAILAND                               PEOPLE'S DEMOCRATIC
                                                                                                                                                                                            REPUBLIC

                                                                                                                                                 ODDAR MEANCHEY
                                                                                                                                o                                                                                      o
                                       CAMBODIA                                                                               14 00'N
                                                                                                                                           BANTEAY                        PREAH
                                                                                                                                                                                                        RATANAKIRI   14 00'N

                                                                                                                                          MEANCHEY SIEM REAP              VIHEAR        STUNG TRENG
       STUNG CHINIT IRRIGATION AND
     RURAL INFRASTRUCTURE PROJECT                                                                                                       PAILIN        Tonle
                                                                                                                                           BATTAMBANG Sap
                                      (as completed)                                                                                                                       KAMPONG
                                                                                                                                                                             THOM           KRATIE      MONDULKIRI

                                                                                                                                                      PURSAT                       Project Area
                                                                                                                                                               KAMPONG
                                                                                                                                                               CHHNANG             KAMPONG
                                                                                                                                                                                     CHAM
                                                                                                                                                                      PHNOM PENH
                                                                                                                                                               KAMPONG        PREY
Santuk Krao                                                                                                                                                      SPEU  KANDAL VENG SVAY                  VIET NAM
                                                                                                                                                  KOH KONG
                                                                                                                                o
                                                                                                                                                                                   RIENG                               o
                                                                                                                              11 00'N                                                                                11 00'N
   Sala Santuk                                                                                             t
                                                                                                        en
                                                                                                   km                                                          KAMPOT TAKEO
                                                                                                ban
                                                                                           Em                                           PREAH SIHANOUK          KEP
                                                                                  o   od                                                                                                    Mekong R.
                                                                         North Fl                                               Gulf of Thailand
                                                                                                                                           103o00'E                                                      107o00'E

                                                                                                                    nk ment
                                                           g Krasa
                                                                   ng                                          Emba
                                                  Stung Tan                                         Flood
                                                                                        South
                                                                   Srae Ta Kao                                                  Dang Kdar
   Tang Krasang
       Veang Tboung                               Boeng Lvea                                en                   t
                                                                             Storage
                   Prasat                                                               nkm
                                                                              Area Emba
                                                                                     d
                                                        Khvaek                      F   loo
                                                                                rth
                                                                              No
                             it                                    Khvaek Open
                          in      Kang Meas
                       Ch                                          Space Market
                  ng
              Stu                                                                             South Flood Embankment
                                                           Kampong Thmor
                       Tnaot Chum                               Khley                                     Chaeung Daeung
                                                                                                                                        KAMPONG THOM
                                   Kampong Thmor
                                                                 Ta Phouk
                                      Trapeang Svay
        Samraong                                                                                         Krava Market

                                                      Kampaeuy
                                                                                                                               Krava                                                   N
                                                                                                                     Ponley
                                                                         Chaeung Daeung

                        Doun Paen                                                                                                                                     0       2         4         6        8

                   Trapeang Chhuok                                                                                                                                                 Kilometers
                                                      Boeung Market


                                                        Doun Tom                       Sralau Toung


                  Baray Market                  Chhuk Khsach
                   Au Soursdey                           Chan Lhang
                                                                                                                                                                          Veal Spor




                                                                                                                                                           National Capital
                                                                               KAMPONG CHAM                                                                Provincial Town
                                                                                                                                                           Other Town/Village
                                                                                                                                                           Rural Market Subproject
                                                                                                                                                           Rural Road Subproject
                                                                                                                                                           National Highway
                                                                                                                                                           National Road
                                                                                                                                                           Provincial Road
                                                                                                                                                           Access Road
                                                                                                                                                           Main Canal
                                                                                                                                                           Secondary Canal
                                                                                                                                                           Secondary Drain
                                                                                                                                                           River
                                                                        Au Rumchek
                           Tradakpong                                                                                                                      Provincial Boundary
                                                       Taing Kok
                                                                                                                                                           International Boundary
                                                                                                                                          Boundaries are not necessarily authoritative.
                                                       Sou Young
                                     Katay


                                                                                                                                                                                                               09-4437 HR
                                    I.       PROJECT DESCRIPTION

1.     The Stung Chinit Irrigation and Rural Infrastructure Project was approved on
5 September 2000 for SDR12,183,000 ($16 million equivalent) and declared effective on
28 February 2001.1 Agence Française de Développement (AFD) approved parallel grant
cofinancing of €3.25 million equivalent to $2.7 million (about 16% of the total project cost2).

2.       The rationale for the project derived from a focus on poverty reduction in populous
rural areas, where the mainstay of economic activity was agriculture (constrained by lack of
irrigation, poor roads and market facilities, and limited technology—mainly resulting from the
deterioration of existing irrigation infrastructure). More reliable wet season water flow would
reduce investment risk by avoiding periodic droughts and would (with improved varieties)
allow a second rice crop based on supplementary irrigation. Dry season irrigation would
allow both high-yielding rice varieties and crop diversification. Improved roads would reduce
input supplies and market access costs, and upgraded markets would reduce spoilage and
transaction costs.

3.      The project goal was to reduce poverty through sustained socioeconomic growth in
an area of Kampong Thom Province that is dominated by rural subsistence or semi-
subsistence farming dependent on one low-yielding, rain-fed rice crop per year. Its purpose
was to increase income and improve the quality of life in the province through provision of
sustainable irrigation, agricultural extension, and rural infrastructure (such as roads and
markets) in and around the project area. The project has two parts: part A—irrigated
agriculture development (components 1–3), and part B—rural infrastructure (component 4).

4.      AFD resources were used for component 1 (and some for 3), including for the
consultants Groupe de Recherche et d’Echanges Technologiques (GRET) and Centre
d’Etude et de Développement Agricole Cambodgien. The AFD grant was extended by 1 year
after project closing to support the FWUC and the Chinit Reservoir Irrigation Committee
throughout the next dry season; this support was vital given the construction delays.3

A.        Part A

5.      Component 1: Farmer community organization and extension services. The
component aimed to ensure that water provision resulted in sustainable increases in
agricultural productivity benefiting local farmers. It involved investments in human resources,
community organization and training, and applied research and extension.
          (i)      Output 1: Land ownership survey and titling. This output aimed to help
                   farmers obtain legal title to their lands using maps and ground surveys.
                   Orthophotomaps4 were to be used for the detailed design of water offtakes
                   from the secondary canals and for the formation of water user groups.
          (ii)     Output 2: Water user groups. This output aimed to mobilize, form, and train
                   water user groups, which were to elect members to farmers water user
                   communities (FWUCs) for secondary canals. The water user groups and
                   FWUCs were to be focal points for participation in system design and
                   operation and maintenance (O&M), and for training in water management.
          (iii)    Output 3: Agriculture extension services and research. This output aimed
                   to provide extension services, including farmer field schools and
                   demonstrations on integrated pest management, improved rice seed and rice

1
    ADB. 2000. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the
    Kingdom of Cambodia for the Stung Chinit Irrigation and Rural Infrastructure Project. Manila (Loan 1753-CAM).
2
    AFD financing originally covered component 1 and water quality monitoring and fisheries work in component 3.
3
    It also documented the overall project experience in a post project or capitalization phase.
4
    Orthophotomapping is used to rectify aerial photography by removing distortions caused by terrain relief.
2


                   farming techniques, crop diversification, land leveling, animal husbandry, and
                   post harvest practices. Capacities of provincial departments to provide
                   extension services were to be strengthened.

6.       Component 2: Irrigation infrastructure. The component provided irrigation,
drainage, and associated infrastructure and services for 7,000 hectares (ha). It was to
(i) repair the main diversion weirs on the Stung Chinit and its tributary, the Stung Tang
Krasang; (ii) repair flood bunds, construct new bunds on the eastern side of the main canal,
and provide drainage structures to protect low-lying agricultural areas between the two
rivers; (iii) introduce a fish pass to allow annual fish migrations; (iv) remodel and repair the
main and secondary canals and regulators, along with roughly 60 kilometers (km) of
embankment service roads; (v) provide assistance to farmers constructing tertiary and
quaternary (on-farm) canals; (vi) establish hydrometeorology stations in the Stung Chinit
catchment area; and (vii) provide field offices and equipment.

7.      Component 3: Irrigation system management. This was to establish the Stung
Chinit irrigation committee, which was to be responsible for overall management of the
system, and to develop a system for farmer-managed O&M and cost recovery through water
user groups and FWUCs. The capacity of the committee and Ministry of Water Resources
and Meteorology (MOWRAM) staff was to be developed in all technical and administrative
aspects of system management.

B.        Part B

8.      Component 4: Rural infrastructure. The component aimed to improve about
150 km of rural roads in and around the project area to reduce the cost of transporting inputs
and harvested crops in anticipation of increased volumes of both resulting from greater
agricultural production. Six local markets that lacked permanent roofing, drainage, access to
clean water, truck-loading facilities, and sanitation facilities were also to be upgraded.

9.     MOWRAM was the executing agency for part A and the Ministry of Rural
Development (MRD) the executing agency for part B. Interministerial coordination was
provided through a project steering committee chaired by the Ministry of Economy and
Finance, comprising the national project directors from MOWRAM and MRD, and
representatives of various other agencies and ministries.5

10.      On 19 December 2003, a major change of project scope was approved, within the
original loan amount and with the goal and purpose of the project unchanged. This reflected
a change in the orientation of the investment to irrigation reconstruction rather than
rehabilitation. The revised design configuration was to provide primary, secondary, tertiary,
and quaternary infrastructure for irrigation, drainage, and rural access in a priority area of
about 2,960 ha (Appendix 1 contains original and revised project frameworks). The
increased irrigation infrastructure cost estimates required (i) the transfer of $1.47 million from
part B to part A ($1.18 million was from loan proceeds and $0.29 million from the borrower)
and (ii) a commitment by the Government of Cambodia for an additional $3 million.




5
    These are the Provincial Department of Agriculture, Forestry, and Fisheries; the Cambodia Agriculture
    Research and Development Institute; and the Department of Cadastre and Geography of the Ministry of Land
    Management, Urban Planning, and Construction.
                                                                                                          3


                    II.     EVALUATION OF DESIGN AND IMPLEMENTATION

A.         Relevance of Design and Formulation

11.       The 1995 ADB country operational strategy6 recognized that agricultural and rural
development were key to pro-poor sustainable economic growth in Cambodia. Key areas
identified for improving agricultural productivity include (i) providing and properly maintaining
critical infrastructure for irrigation, drainage, and rural transport; (ii) strengthening agricultural
research and extension; (iii) promoting private sector participation in input supply, product
processing, and marketing; and (iv) providing effective rural financial services. The
government’s First Five-Year Socioeconomic Development Plan7 for 1996–2000 and the
Strategic Plan for 1997–2001 laid a foundation for poverty reduction and economic recovery
focusing on rural development. Key socioeconomic development plan strategies directly
relevant to the project include (i) the achievement of poverty reduction and broad
participation in the development process by focusing on rural development; (ii) substantial
investment to upgrade physical infrastructure, particularly rural roads; (iii) development of the
productive base of the rural economy by raising rice yields for food security and eventually
for export; and (iv) enhanced income opportunities for farm households by diversifying crops.
Increasing liberalization of agriculture markets, ongoing formulation of a water law, and
development of institutional arrangements and procedures to progressively transfer O&M
responsibilities for irrigation systems from the government to farmer water user groups
(based on full participation and ownership principles) provided an appropriate sector policy
context for the project. Notable features of project design are the use of labor-based
appropriate technology in construction methods and the expectation that the government
would view the project experience as a pilot for future irrigation policy reform. The project
design (particularly support to water user groups) benefited from ADB’s own evaluation of
irrigation projects,8 which stressed the importance of technical and managerial training.

12.      The high relevance regarding consistency with national development objectives, ADB
strategy, and subsector experience was not matched by the soundness of project design,9
which was characterized by its disjointed and inadequate nature. Investigations under the
first technical assistance (TA) project were interrupted by the deteriorating security
situation.10 It originally suggested that a large-scale irrigation development without a dam
was not viable (which would have been environmentally unacceptable). A second TA project
recommended a reduced scale of irrigation development and added a component for rural
roads and market infrastructure. Partly because of only limited on-the-ground investigations
(and also because of a strong domestic imperative to restore a nationally important11
irrigation scheme) both studies failed to fully appreciate (i) the dilapidated state of existing
irrigation infrastructure, (ii) the sandy nature of many local soils,12 and (iii) the social
complexities of heterogeneous farming operations. There was also something of a technical
disconnection between parts A and B of the project, in that the envisaged generic road and
market improvements did not link very closely to the intended agricultural production
interventions; the nature of the proposed implementation arrangements tended to reinforce

6
     ADB. 1995. Country Operational Strategy Study for the Kingdom of Cambodia: Developing the Capacity for
     Reconstruction and Development. Manila.
7
     Royal Government of Cambodia. 1997. First five year Socioeconomic Development Plan 1996-2000. Phnom
     Penh. This included a sector development policy statement by the Ministry of Agriculture and Forestry.
8
     ADB. 1995. Sector Synthesis of Post evaluation Findings in the Irrigation and Rural Development Sector.
     Manila.
9
     ADB. 1996. Technical Assistance to the Kingdom of Cambodia for the Stung Chinit Water Resource
     Development Project. Manila (TA 2592–CAM); Small-scale technical assistance to the Kingdom of Cambodia
     for the Study for Stung Chinit Water Resources Development (TA 3275–CAM) in ADB. 1999. Monthly Report
     on Small-Scale Technical Assistance Projects Not Exceeding $150,000 Per Project. Manila.
10
     During appraisal in 1997, Cambodia was still in a post conflict situation after 30 years of civil war.
11
     Originally the scheme was constructed by forced labor under the Khmer Rouge regime.
12
     They are characterized by low organic content, low cationic exchange capacity, and high permeability.
4


this dislocation. The change of scope enhanced project relevance in some respects, but the
revised canal- and drain-intensive scheme still did not fit well with prevailing socioeconomic
and agro-ecological conditions. Collectively, these design failings almost entirely explain
project performance.

B.         Project Outputs

           1.       Farmer Community Organization and Extension Services

13..   Land titling was achieved for 2,399 ha, covering 6,138 titles (the project’s physical
outputs are shown in Appendix 2). Farmers received organizational and leadership training,
as well as technical training in accounting and computing skills, to support the FWUC—
made up of farmer representatives covering 25 villages.13 MOWRAM staff provided water
management training courses, extension capacity was developed, and a tertiary
demonstration block was established with a range of rice-based and dry season crop trials.

           2.       Irrigation Infrastructure

14.     The completed irrigation infrastructure covered (i) remodeling and repair of the main
canal from the northern limit of the irrigated area (south of the Stung Tang Krasang) to the
control structure south of the Stung Chinit, including construction of the Stung Chinit spillway
and riparian outlet, and a fish pass to allow annual fish migration; (ii) construction of flood
embankments to the north and south of the Stung Chinit to protect low-lying settled and
cultivated areas; (iii) construction of drainage for protected areas south of the Stung Chinit;
(iv) construction of secondary irrigation and drainage infrastructure, together with associated
embankment service roads and crossing points, in the irrigated area between the Stung
Tang Krasang and the Stung Chinit; and (v) construction of tertiary irrigation and drainage
infrastructure north of the Stung Chinit. Additional works (e.g., control structures, improved
fish passes, box and pipe culverts) were approved under two contracts to improve hydraulic
performance and minimize negative drainage impacts. The project included work to remove
unexploded ordnance (e.g., to remove mines and grenades from the reservoir).

           3.       Irrigation System Management

15.     A system is in place whereby MOWRAM retains responsibility for main canal and
reservoir structures, the FWUC manages secondary and tertiary canals, and farmers are
responsible for quaternary canal management (although using simpler systems of canals
and bunds than originally intended). The original design intentions to have all farmers
supplied individually through a dense network of tertiary and quaternary earth canals resting
on the natural level of the field simply proved too costly in terms of O&M, given the greater
than expected topographic variability and sandy soil. The FWUC also represents farmer
interests at the Chinit Reservoir Irrigation Committee14—established (instead of the expected
Stung Chinit Irrigation Committee) and designed to promote an increased focus on reservoir
and primary and secondary structure (as opposed to a wider river basin remit) management,
and without such an extensive system management authority as originally envisaged.

           4.       Rural Infrastructure

16.     The project improved 84.7 km of road (including seven bridges and 105 culverts) in
10 subprojects to all-weather standard with a 5-meter-wide laterite-paved surface; completed
three rural market subprojects; and constructed an office, workshop, and store at Kampong


13
     Because farmers were found to have multiple plots and undertake many activities other than farming, the only
     feasible arrangements for community organization and meetings were on a village-by-village basis.
14
     Established by Municipal Deyka 117, dated 28 November 2007.
                                                                                             5


Thom. Routine road maintenance was undertaken (2004–2006) for 175 km of roads.
Construction and maintenance generated 450,000 workdays of employment.

17.     The major difference between appraisal and completion outputs is due to the
project’s change of scope: the irrigation command area decreased by over half (from about
7,000 ha to 2,960 ha), the length of rural roads was approximately halved, and expected
market upgrades decreased from six to four (of which three were completed).15 The scale
and distribution of project economic benefits were significantly affected by these changes,
mainly through a drop in anticipated cropping, fishery, and vehicle operating cost benefits.

18.     Eventual farmer community organization was village based, rather than spatially
arranged, and the absence of quaternary canals reflects the farmers’ choice to have the
scheme operate relatively extensively as opposed to though individual water delivery to each
plot. While an irrigation management system was in place at project closing, its quality (in
terms of comprehensiveness, stability, and sustainability) suffered consequentially from
delays in civil works construction (by reducing the time available to establish a system
involving farmers and government agencies on a fully operating irrigation scheme), and still
awaits formalization via binding agreement between MOWRAM and the FWUC.

C.         Project Costs

19.     The total cost of the project at appraisal was estimated at $23.8 million. ADB was to
provide a loan of $16 million equivalent (SDR12,183,000). Actual project costs were
$26 million; this difference mainly reflects the increased government commitment of
$3 million following the change of scope. The main shift in cost distribution was to irrigation
infrastructure (under part A) and away from roads and markets construction (under part B).
Foreign exchange costs were higher than expected at appraisal, and local currency costs
lower. SDR appreciation increased the dollar value of the original allocation. The
undisbursed amount of SDR1.97 million ($2.92 million) was canceled in 2008. Appendix 3
summarizes vehicle and equipment purchases by component.

D.         Disbursements

20.   Overall fiduciary management was effective and processes in support of project
implementation went relatively smoothly.

21.       The first disbursement was in April 2001 (2 months after the loan became effective)
and the last in June 2007. The disbursement schedule was affected by the need to revise
the project scope, and disbursements prior to this were relatively slow. By February 2004
(i.e., after 3 years of loan effectiveness), 26% of the loan had been disbursed; by September
2006, disbursement stood at 61% and by the original closing date of the loan (December
2008) it was just under 90%. Disbursement performance was sometimes affected by slow
submission of commitment letters and withdrawal applications by contractors, and by slow
executing agency review of draft local competitive bidding documents.

22.      MOWRAM and MRD operated imprest accounts in accordance with Ministry of
Economy and Finance financial regulations, and ADB’s Loan Disbursement Handbook16 and
guidelines on imprest funds and statement of expenditure procedures.17 Relatively large
initial advances to executing agency imprest accounts and prompt processing of withdrawal
applications thereafter facilitated project operations on the ground. The executing agencies
effectively managed the flow of funds to the project implementation units.

15
     Disagreements between MRD and MOWRAM delayed procurement at one site.
16
     ADB. 2006. Loan Disbursement Handbook. Manila.
17
     Statement of expenditure procedures were allowed for contracts of less than $50,000.
6



E.     Project Schedule

23.     The project schedule was severely affected by the need to change the project scope.
The change resulted in an 18-month hiatus in physical activities from late 2002 (once the
dilapidated state of existing infrastructure and the implications of sandy soil were identified)
until early 2004, when the change in scope was specified (on the basis of detailed technical,
social, and economic investigations) and preferred options agreed. The project was
extended by 1 year (to June 2008) to allow for completion of physical works and to support
capacity building of the FWUC and MOWRAM. Savings from the AFD grant in mid-2007
allowed AFD support to continue to mid-2008.

F.     Implementation Arrangements

24.     The proposed implementation arrangements were broadly appropriate for achieving
the project purpose and delivering outputs, in that they envisaged national coordination
(through the national steering committee), management through ministries (central project
management offices), and implementation at the project sites (through MOWRAM and MRD
project implementation units and involvement of other agencies). Similarly, for the irrigation
scheme itself, the organization of block-based water user groups and their composition into
water user community interface networks with MOWRAM (provincial and national) and other
provincial and district authorities via an irrigation committee to operate the irrigation system
made sense for operations.

25.     However, in practice (i) operation and cultural divergences between the "hardware"
and "software" aspects of irrigation system construction and management (which were the
responsibilities of different development partners and groups of consultants) and
coordination platforms established (e.g., the technical coordination committee) to resolve this
were only partly successful; (ii) MOWRAM was reluctant to delegate as much technical
authority to the Provincial Department of Water Resources and Meteorology as was
expected at appraisal, and (iii) implementation coordination between parts A and B was not
as effective as anticipated (the MOWRAM project management office appointed a
coordination officer to address this). Most importantly, the effort and complexities involved in
organizing farmers into a body (the FWUC) to "assume overall scheme management
responsibility" at project closing was underestimated, and the technical and institutional
aspects of farmers’ interaction with state agencies for system management did not evolve as
anticipated. In sum, establishing appropriate functional implementation arrangements around
the revised scope and realities of farmer situations proved a major challenge for the project.
Appendix 4 summarizes the project organization and system management arrangements.

G.     Conditions and Covenants

26.     Appendix 5 summarizes the extent of compliance with loan covenants. Compliance
with the environmental covenant involved mainly water quality and fisheries monitoring; this
was undertaken satisfactorily. The land survey was completed later than intended.
Resettlement covenants were also complied with, although the scale and complexity of
resettlement issues during implementation rendered their original specification somewhat
simplistic. The establishment of an irrigation system management committee was later than
intended, and the provincial coordination committee did not function entirely as planned with
regard to the frequency of meetings or their ability to meaningfully coordinate technical work
plans. In all these respects, the covenant specification at appraisal and compliance during
implementation were generally acceptable, although the detailed content of several
covenants were simply overtaken by later events. This is particularly true with regard to
covenants related to infrastructure O&M; both the domestic policy references and the
                                                                                                             7


anticipated ADB project-specific practices18 were evolving; as a result covenant compliance
under the project (e.g., regarding formulation of O&M plans, regularizing the use of village
labor) was only partial, although not necessarily inappropriate.

H.         Consultant Recruitment and Procurement

27.      The project was implemented with assistance from three groups of consultants. The
French nongovernment organization, GRET, provided assistance for component 1 and some
activities under component 3; a joint venture between Lahmeyer International and SMEC
Joint Venture (SMEC) implemented components 2 and 3; and SMEC implemented
component 4. Recruitment was carried out without any difficulties. GRET fielded its
consultants for part A during 2001, a few months later than the Lahmeyer–SMEC
consultants, which meant that the information campaign and farmer feedback on initial
engineering proposals were delayed. Part B consultants were fielded in 2002; overall
contracted inputs were reduced with the change of scope and then later (in 2005) those of
the deputy team leader were extended. Signing of their first contract variation was delayed
somewhat. A total of 114 person-months of international and 418 person-months of national
consultants were used; the final cost was $5.41 million.

28.     Contractors, retained through the use of international competitive bidding, undertook
major civil works (i.e., river closure, spillway construction, remodeling main canal) and
control of canal works as envisaged at appraisal. Local competitive bidding was used for
secondary and tertiary irrigation works, and for market and road construction. Skilled and
unskilled labor was employed using force account to supplement these activities. In both
parts A and B, the use of labor-based appropriate technology in large volume proved,
intermittently, more problematic to arrange than envisaged at appraisal.

I.         Performance of Consultants, Contractors, and Suppliers

29.    Consultants generally performed well, and showed considerable flexibility in
operation and organization as the project scope and implementation schedule underwent
major changes. The engineering quality of completed major civil works is excellent.

30.      Quality issues relate to local contractor performance for both parts A and B; the
expected specifications for rural roads subprojects were not always attained and also in
relation to environmental considerations (e.g., the location and condition of borrow pits for
road subbase material). Early ADB missions identified problems in supervision and quality
control, contractor understanding, and contractor management; practice was later improved.
Lack of field coordination between MOWRAM and MRD resulted in detrimental interactions
between rural road and irrigation infrastructure construction work (e.g., in one instance soil
for the road subbase was excavated from places where raised irrigation tertiary irrigation
canals were planned). Within part A, consultants providing the physical infrastructure and
those supporting farmers’ organization had frequent major differences of views; the
preparation of joint terms of reference and overlapping scheduling of individual consultant
inputs only partly addressed the underlying tensions between different perspectives and
priorities.

J.         Performance of the Borrower and the Executing Agency

31.     The performance of the borrower and the executing agencies was satisfactory; the
government and the executing agencies (especially MOWRAM) remained committed to the
project's purpose throughout implementation.

18
     ADB. 1995. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the
     Kingdom of Cambodia for the Rural Infrastructure Improvement Project. Manila (Loan 1385-CAM[SF]).
8


32.     National institutional capacity was broadly as estimated at appraisal, although
MOWRAM struggled to comply with the demands of ADB safeguards policies and the
conditions of the resettlement plans so as not to delay approval of physical works. The scale
and scope of resettlement issues was not foreseen. MRD commitment to higher project
objectives was somewhat less obvious—the planning and construction of some rural roads
were outside (or only marginally linked to) the project area.19 Central and provincial
MOWRAM and MRD staff were allocated quickly to project operations, and financial and
contracting processes in-country were generally timely, although with some delays in
disbursement and in consultant contracting at the start of the project. The project did not
incorporate any large-scale capacity building.

K.         Performance of the Asian Development Bank

33.        Overall, ADB’s performance was satisfactory, although with some important caveats.

34.      ADB was responsive to borrower and executing agency needs relating to project
initiation and supporting the change of scope in 2003.20 It provided relatively intense
supervision and technical support thereafter, and also with extending the loan period.
Combining the project supervision with that for the Northwest Irrigation Sector Project21and
review of irrigated agriculture issues more generally allowed the policy context of the project
to be dealt with more intensely and increased overall project relevance.

35.     Where ADB performance was less than satisfactory is (firstly) with regard to project
monitoring. Specifically, ADB failed to ensure MOWRAM and MRD submitted adequate
project completion reports for parts A and B, and (more generally) staff did not appear to
have any impetus to pursue formal benefit monitoring and evaluation processes. At the time
of loan closing and project completion report preparation, no systematic or rigorous impact
assessment material was on file. Hard and soft copy document storage of the project’s
history at the Cambodia Resident Mission was not very systematic, and throughout the
whole project period consultants’ and executing agencies’ monthly and quarterly reports
generally provide descriptive discussions rather than consolidated up-to-date output
information. ADB performance also appears to have been inconsistent regarding managing
the complexities of resettlement issues. Missions between 2004 and 2006 in particular
seemed to lack consistency of approach and message regarding the preparation of a
stage 2 resettlement plan, or an addendum to the original resettlement plan, and in defining
the detail required in either. ADB had more general tension with MOWRAM (and its own
consultants) over the abandonment of a more "iterative" approach to resettlement planning,
which was understood to have been incorporated within the original resettlement plan.

                              III.     EVALUATION OF PERFORMANCE
A.         Relevance
36.        The project is rated partly relevant.

37.   In terms of the project’s fit with the government and ADB sector planning—both
before and after the project—its relevance in 2001 was relatively clear: it fit within broad
government rural development sector objectives and with later, more specific, irrigation and
water subsector policy objectives (e.g., regarding irrigation transfer, implementation of the
Law on Water Resources Management, 2007).



19
     The subsequent MRD proposal for joint physical planning with MOWRAM was welcome, if belated.
20
     Although processing the change in scope required about 6 months after the special administration mission.
21
     ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the
     Kingdom of Cambodia for the Northwest Irrigation Sector Project. Manila.
                                                                                                                     9


38.     During implementation, this somewhat generalized relevance was enhanced—as
evidenced by the fact that the National Strategic Development Plan 2006–2010 (which is the
overarching framework for reducing poverty through economic growth) is based on the
government's Rectangular Strategy platform, in which a key pillar is enhancing productivity
of the agriculture sector; integral to improving agricultural productivity is the need to manage
and develop Cambodia’s water resources. Thus, the National Water Resources Policy of
2004 (i.e., about midway through project implementation) called for effective, sustainable,
wise, and equitable use of water resources, and the Law on Water Resources Management,
subsequently reaffirmed this policy and adopted more of an integrated water resources
management and development approach. More specifically, the government's present water
resources development priorities include (i) rehabilitating and reconstructing the existing
irrigation and drainage systems (of which Stung Chinit is a major one); (ii) strengthening and
expanding FWUCs by boosting membership and participation of women (i.e., as in
component 1 of the project); (iii) developing and applying measures on flood and drought
mitigation and management (this is also perhaps where Stung Chinit’s usefulness in the
future may increase); (iv) promoting private sector investment in irrigation, drainage, and
other aspects of agricultural water management; and (v) promoting appropriate and effective
river basin management and water allocation systems. The current government's Strategy
for Agriculture and Water22 envisages extensive investment in irrigation management as well
as institution-building to improve scheme management (in partnership with stakeholders).

39.     Regarding the evolution of ADB sector objectives as discussed and negotiated with
the government,23 current (2008–2010) country strategy and program outcomes include both
higher irrigation-based production and productivity, and reduced losses from floods and
droughts. Sector outputs to support such outcomes include supporting agriculture sector
reform and improved extension, and direct support for irrigation development.24 Thus the
underlying rationale for irrigation investment—of some type—remains strong. ADB has
sharpened its focus to move away from large direct investments in irrigation schemes,25 not
just in terms of the various Tonle Sap-related initiatives, but also (i) adopting integrated
basin-oriented approaches to irrigation design, and encouragement of water-using farming
communities to sustainably manage small- and medium-sized irrigation schemes; and (ii) a
more general orientation to sectorwide policy reforms and institutional performance
enhancement (to improve service delivery).26 The reason for this latter emphasis derives
from the fact that for much of the project implementation period, the irrigation subsector’s
legal, institutional, and regulatory framework remained in a state of transition, being
governed largely by Circular No. 1 issued by the Prime Minister and Prakas 306 (both of
1999),27 and awaiting promulgation of the Law on Water Resources Management. As a
result, the exact status, rights, and responsibilities of entities in the subsector (and especially
of the FWUC) remained uncertain. The project design anticipated that the project would
serve as a pilot to help refine, revise, and establish a comprehensive legal and policy
environment for water. However, implementation as designed became increasingly
frustrated by the very absence of such a framework;28 as such, its relevance (e.g., being an
investment project rather than a sector development initiative) tended to decrease over time.

22
     Ministry of Agriculture, Forestry and Fisheries and Ministry of Water Resources and Meteorology. 2007.
     Strategy for Agriculture and Water 2006–2010. Phnom Penh.
23
     ADB. 2008. Country Operations Business Plan: Cambodia, 2008–2010. Manila.
24
     Including a milestone in the country strategy and program results framework that 35,000 ha of irrigation will be
     rehabilitated.
25
     ADB. 2005. Country Strategy and Program: Cambodia, 2005–2009. Manila.
26
     Expected to be part of the forthcoming Water Resources Management Sector Development Loan (2010).
27
     Circular on the Implementation Policy for Sustainable Irrigation System. This outlined the institutional
     arrangements and procedures to progressively transfer O&M responsibilities for irrigation systems from the
     government to farmer water user groups (i.e., irrigation management transfer).
28
     ADB missions recommended MOWRAM incorporate in subdecrees:(i) the conditions of membership to a
     FWUC; (ii) the operations link between the land title delivery policy and the irrigation service fee recovery
     system; (iii) the type and amount of involvement of local authorities; (iv) the system of sanctions to be enforced
10



40.      More directly in terms of project-specific relevance, the choice of investment modality
(i.e., an investment project in a specific geographic area) was probably appropriate at the
time, given this particular scheme’s national importance and the expressed willingness of the
government to treat it as a pilot for subsequent irrigation and water interventions. The logic
for its location near to Phnom Penh (and thus domestic markets) as well of it initially being
import-substituting (Cambodia was still importing rice in 1999) and then later more export-
oriented was sound. The absence of rigorous agriculture sector analysis may be to some
extent understood in the Cambodian post conflict context. Institutional considerations for the
executing agencies were sufficient. The partnership with AFD was a complementary one,
and successfully leveraged both financial and intellectual capital for the project.

41.     However, the work used to justify the project investment was not satisfactory, nor was
it based on sound problem-oriented analysis. The underlying technical basis (e.g., for
physical works rehabilitation potential status, soil characteristics) of the original system
design was woefully inadequate. Understanding (at appraisal and at the later change of
scope) of social issues surrounding farming operations, livelihood interests, and farmer
spatial organization, as well as the wider political economy of the water sector was
insufficient. Evidence of the involvement of stakeholders in project design is limited. In
addition, parts A and B of the project lacked economic and operations integration.29
Available decision-support tools for risk and distributional analyses that might have identified
key sources of uncertainty and concern (about both the proposed project design and the
later change of scope) were not employed. An in-depth review of the original design issues,
the attempt to address them by the change of scope, and the causes and consequences of
this situation (including a summary of lessons) is contained in Appendix 7.

42.    The 2009 sector assistance program evaluation30 makes similar points, and
concludes that while the case for investment in Cambodian irrigation-based agriculture may
be strong, the flat topography and prevailing soil characteristics tend to limit water
investments in complex lowland agriculture to smaller-scale and technically specific
interventions; this might be true, but was not widely known when the project was designed.
43.    One final point concerning the relevance of the project is to note that this may
increase in the future: (i) as the effects of climate change become more apparent, the
capacity to simply store water for agriculture will become more useful, and; (ii) as the
pressure to intensify agriculture increases, the role of sufficient water availability in
supporting both wet season rice yields and dry season diversification may also increase.

44.     Regarding the definition of the objectives hierarchy, the project framework
(i) contained means–ends statements (i.e., " … achieved through … ") rather than situation
or condition statements for both the goal and purpose; (ii) stated conditions that should have
been accommodated within project design as assumptions or risks (e.g., regarding
government implementation capacity); and (iii) the lack of specificity in means of verification
perhaps also contributed to the absence of information upon which to assess project impact


     in case of unpaid irrigation service fees; (v) the participation of FWUCs in higher bodies for Integrated Water
     Resource Management; and (vi) the involvement of FWUCs in agricultural development. To ensure
     sustainability of irrigation management transfer, missions recommended MOWRAM review and incorporate in
     subdecrees: (i) the different types and magnitude of transfer (partial to total); (ii) the stages and procedures for
     a gradual transfer; (iii) the rules and principles for assessing and computing the O&M costs of irrigation
     schemes; and (iv) the different contractual modalities for the transfer of the O&M, as well as the financial
     commitments necessary to ensure the sustainability of the physical investments.
29
     These issues of relevance arising from project design and formulation would later impact severely on (i) the
     implementation schedule; (ii) the extent of outputs delivery; (iii) the effectiveness of outcome achievement, and
     (iv) the efficiency of outputs and outcome achievement.
30
     ADB. 2009. Sector Assistance Program Evaluation: Agriculture and Rural Development Sector in Cambodia.
     Manila.
                                                                                                            11


(i.e., because individual studies and surveys were not specified in time-bound terms, they
were not undertaken with any urgency).31

B.         Effectiveness in Achieving Outcome

45.       The project is rated less effective in achieving its outcome. (A methodological
difficulty makes proper assessment of the extent of achievement of project outcome
difficult,32 given that achievement was defined as provision of both systems and services
(e.g., sustainable irrigation, agriculture extension, rural infrastructure) and simultaneously
consequential and dependent livelihood changes.)33

46.     For system and service provision, the project’s effectiveness vis-à-vis appraisal was
necessarily compromised by the reduction in its scale—aggregate delivery of irrigation
command area, rural roads, and markets was about half or less of what was expected at
design. Compared with the change of scope targets, however, full effectiveness was
achieved (irrigation system) or exceeded (rural roads), and a shortfall was experienced only
for rural markets (three markets instead of four)—although delivery of the irrigation physical
works was significantly later than expected. The eventual irrigation system delivery was
somewhat different in quality (regarding its relatively extensive management regimes and
absence of quaternary canals) to what was envisaged at change of scope. Farmer O&M of
the secondary canals and drains is still not assured. Average rice yields are presently below
those expected at project closing, but the trend is going up and may likely be achieved in
another year or two. Significant dry season cropped areas are not yet in evidence, but may
emerge in the future. Local transport costs have been reduced, although the distribution of
benefits (producer and/or consumer surplus) from this is unclear. Side effects of project
implementation may also include positive upstream impacts (reservoir water is extracted for
areas not originally defined as within the project site).

47.     In terms of quality of life and income-based measures, the survey does not provide
any evidence that some of farmers’ major livelihood dimensions (financial and physical
assets) have improved; this is broadly confirmed by visual observation and farmer interviews
on the irrigation scheme. At present separating project-induced effects from wider
macroeconomic trends is not possible, especially given that only 1 year has elapsed since
scheme completion and irrigation system management is still evolving. Future expectations
of project effects among local farmers seem to be high, and qualitative survey evidence
suggests the lowest quartile of households may be benefiting most at present.

C.         Efficiency in Achieving Outcome and Outputs

48.        The project is rated less efficient for achievement of outcome and outputs.

49.     No formal evidence is available to undertake a re-estimation of the project’s financial
and economic returns. Detailed discussion of project economic analyses, impacts, and
benefits is in Appendix 8. While the expected economic return was not likely achieved (given
that the scale of outputs was less than envisaged at appraisal, yet project costs increased),
(i) average rice yield productivity achievements are likely to be what was expected, given
that some farmers have already exceeded these expectations (and are producing more than
3 tons/ha); and (ii) the command area shortfall has to some extent been offset by the
doubling of the financial and economic price of rice during project implementation. The net
value of additional rice production may now be around $0.75 million a year. Many local
transport costs have more than halved (and transport services have increased greatly), and
31
     The baseline survey was undertaken in 2005 (i.e., 4 years into implementation).
32
     In the project framework, the terminology for this level of achievement was "purpose."
33
     A more rigorous formulation of outcome would have been in terms of sustainable irrigation-based production
     and marketing systems, with increased farmer incomes and poverty reduction defined at the level of impact.
12


the increase in market trading and market opening periods suggests real efficiency gains
have been obtained. The substantial changes in land values attest to greater overall local
agriculture productivity. The large fisheries element of the revised (at change of scope)
economic internal rate of return calculation is currently much more difficult to estimate; some
observers cite major benefits from reservoir-based fishing, but in an area so inundated with
water for so much of the year fisheries capture from other (and existing) sources is difficult to
separate from reservoir sources.

50.     No reason is apparent to consider that project outputs and outcomes could have
been achieved at significantly lower cost. The delivered irrigation infrastructure was
necessary to achieve the kind of water management required to stabilize and increase rice
yields and facilitate dry season cropping. A significant large-scale impact on farmers’
livelihoods in the project area could not have been achieved without introducing a regime of
improved water management. Although the per hectare development cost is relatively high
(at about $3,300 per ha, based on irrigation civil works costs of some $10 million and a
present command area of 3,000 ha), now that this is achieved major efficiency gains are
potentially available by (i) supplementing water management with improved inputs and credit
supply (e.g., to promote activities such as pig raising); and (ii) expanding irrigation command
area (e.g., to the south) at low marginal canal cost, given the reservoir capacity.

51.    Civil works construction was of excellent quality and competitively procured.
Consultant costs were perhaps less than usual due to the significant use of nongovernment
organizations.

D.     Preliminary Assessment of Sustainability

52.    Project sustainability is rated likely sustainable.

53.     Although the other measures of performance are not overwhelmingly positive at
present, features of the project as it now exists make its sustainability quite likely. Among the
factors affecting the likelihood of project sustainability are the following (Appendix 9):

       (i)     MOWRAM, MRD, and provincial institutions view the project as a significant
               success, in terms not just of reconstructing a functioning irrigation scheme to
               meet intense local expectations, but also, for example, in terms of lessons on
               community organization, participatory system management, and resettlement.
               A large amount of domestic political and technical capital has been invested
               in the project to date, and the executing agencies are unlikely to allow this to
               deteriorate.
       (ii)    The latent potential to relatively cheaply expand irrigated areas around the
               project is a prime incentive to maintain the current investment, and currently
               planned investments by the government’s own resources, as well as
               emerging possibilities for other development partner involvement indicate that
               this is fully realized.
       (iii)   Relatively high commodity (especially rice) prices and the global
               intensification of agricultural activities generally (as food demand increases)
               will likely keep agriculture operations relatively attractive, and Cambodia is
               developing export-oriented food production policies (e.g., the Strategy for
               Agriculture and Water 2006–2010), which will facilitate such outcomes.
       (iv)    Future climate change impacts may result in more droughts and greater
               rainfall volume; whatever the actual climate outcomes, wherewithal to better
               manage water availability will encourage continuing scheme usage.
       (v)     Policy affecting issues such as water resources and irrigation management
               transfer is still uncertain, but over time should become more settled. To the
               extent that the government is able to formalize irrigation-related policy, this
                                                                                                                   13


                     will allow the project system management arrangements (especially regarding
                     O&M—the single most important determinant of sustainability) to become
                     clearer and more stable. Sector work undertaken by ADB (e.g., the
                     preparation of the Water Resources Sector Development loan) will support
                     this. While the project FWUC situation looks relatively fragile (in terms of its
                     present and project-limited financial autonomy, and given the short period of
                     its operations), its general orientation is in line with evolving government
                     policy, accords with the experience of other FWUCs in Cambodia, and—as
                     agriculture incomes rise—the scope for increased irrigation service fee
                     collection (and thus self-financing) may also rise.
E.         Impact

54.     Socioeconomic impacts. These include crop and income impacts, as well as
increased social mobilization among farmers (in the form of participation in village-based
water institutions through, for example, meetings and elections, and also in leadership
training), as well as greater technical awareness (on water management and agronomic
practices). Positive human resource impacts on the farming community as a whole are
substantial.

55.    Institutional impacts. The impacts on the executing agencies are significant. As
well as dealing with relatively new technical aspects of irrigation development (e.g.,
community mobilization and representation, participatory management, resettlement,
environment), significantly greater coordination and cooperation between ministries (both the
executing agencies and the Ministry of Agriculture, Forestry, and Fisheries and its
departments, e.g., of fisheries and of extension, as well as the Inter-Ministerial Resettlement
Committee) was required than would otherwise have been the case.34

56.     Policy and program development impacts. The project experience was viewed as
a pilot from the start by the government/MOWRAM, and although substantiating and
documenting causal relationships is impossible, its experience has likely fed into recent
commitments, for example, to establish a national irrigation maintenance fund,35 and into
wider aspects of participatory irrigation management (e.g., as contained in subdecrees
regulating the FWUC). For both ADB and the government, the project formulation and
change of scope experiences provided the foundation for later Tonle Sap investments.

57.     Environmental impacts. Improved water management has reduced the need for
pesticide use. Fish stocks should increase, and the fish pass structure should mean that
migrations are unlikely to be impeded at the spillway. Unexploded ordnance clearance at the
reservoir and construction sites had positive environmental impacts.

                    IV.      OVERALL ASSESSMENT AND RECOMMENDATIONS

A.         Overall Assessment

58.   Overall, the project is rated36 partly successful. The basis for rating is a weighted
average of the four criteria (relevance, effectiveness, efficiency, and sustainability).

59.     The genesis of the project was an attempt to improve rural livelihoods in a very poor
area of Cambodia on the apparent basis of an opportunity to rehabilitate existing irrigation
infrastructure at relatively low cost. Initial preparatory work cast doubt on the investment’s
fundamental viability, but political will for irrigation investment was strong. This was manifest

34
     This is particularly relevant, given intense political competition among Cambodian ministries in the early 2000s.
35
     Reported to be $1 million for 2009 and double this for 2010.
36
     ADB. 2006. Guidelines for Preparing Performance Evaluation Reports for Public Sector Operations. Manila.
14


in a letter from the Cambodian Prime Minister to the ADB President. The second round of
project design was conducted in an unstable, post conflict environment; topographic, soil,
and social circumstances at the project site were not investigated as fully as would have
been desirable. Data problems were compounded by a lack of rigor in economic analysis,
and the later inclusion of a rural infrastructure component to increase project scale and raise
overall viability made only marginal technical sense. Early implementation experience
revealed that major civil works needed to be reconstructed rather than rehabilitated; the
fundamental choice to be made then was to abandon the project or to redesign it within the
existing loan amount around a (much-reduced) core command area but with features such
that its experience would benefit subsequent irrigation investments. ADB approved a scope
change along these lines; higher objectives were unchanged. There was political pressure to
maintain the investment at this decision point, as elections were being held at about the
same time within Cambodia, and local commitments to irrigation development had been
made.

60.     The project’s implementation evidenced significant discontinuity between the
software of community institutional development and irrigation scheme management and
hardware provision, and also between the irrigation and rural infrastructure investments.
Following the change of scope, project implementation was relatively smooth,37 although
farmers had had only very limited experience with operating the scheme at the time of
project completion. Key features of the project as delivered, which differ from expectations,
include village-based (rather than block-based) arrangements for the FWUC and the
absence of quaternary canals on individual plots.38

61.     The results of the investment include (i) a major learning experience for executing
agencies, (ii) increased individual and collective technical and management capacity of
farmers, (iii) incremental outputs of rice (and some dry season crops, plus fish), and
(iv) improved incomes and livelihood assets. Perhaps most significant of all is the fact that
the high-quality civil works and the large reservoir capacity mean that the irrigation command
area can now be increased by several times at low marginal cost. The future task for
MOWRAM is to turn what has so far been a pilot project into an irrigation and water
resources demonstration.39

B.         Lessons

62.     The technical and economic implications of investing in irrigation at Stung Chinit were
not fully appreciated by either the Cambodian agencies or ADB. ADB’s TA-based project
preparation and loan processing cycle simply could not handle the complexities and
uncertainties of this situation; either (i) a more intensive design phase was required before
loan approval and ADB management should have insisted on this; and/or (ii) project
implementation should have originally been designed to be more flexible (and local
expectations managed accordingly).

63.      The fundamental lesson from the project is that a trade-off exists between eventual
project success based on a robust technical and economic design and the (essentially
political) gains from processing an investment approval primarily to suit a domestically driven
agenda. Proceeding with the project may well have gained ADB credibility in the water
resources sector in Cambodia at the time, but it led to significant implementation and
administration problems in subsequent years. In short, ADB may be criticized for aspects of

37
     The scale and scope of resettlement issues later became problematic.
38
     These proved unpopular with farmers due to on-plot land loss and poor water retention in areas of permeable
     soils, and results in a more communal and extensive water management regime than originally intended.
39
     For example, by ensuring adequate O&M on existing works, encouraging development partner or private
     sector investment into nearby areas, and facilitating (with the Ministry of Agriculture, Forestry, and Fisheries)
     credit and other input supplies.
                                                                                               15


the design process (at all stages), but also given credit for willingness to engage with
irrigation issues in a difficult political economy environment (as well as for continuing with the
project once its problems had emerged).

C.         Recommendations

           1.      Project Related

64.              Achieving full economic benefits from the project requires that the irrigation
physical infrastructure be maintained and that farmer institutions are able to play as large a
part as possible in scheme management. Future investments in water resources should
specifically include measures to promote adequate O&M of irrigation schemes and formalize
the regulatory and policy environment of irrigation management transfer generally;
continuing such support to Stung Chinit may constitute a possible future subproject
investment. (As MOWRAM is keen to develop irrigable areas adjacent to the project,
technical support to help this objective be achieved in a sustainable and equitable fashion
should also be included). These measures would help ensure that elements of success
under the project are not lost.

65.      An appropriate time for a performance evaluation report will be 2013, i.e., 5 years
after civil works completion and when cropping patterns have stabilized.

           2.      General

66.     Improving water management is fundamental to enhancing rural livelihoods in
Cambodia, and has a clear fit with ADB and government sector strategies. However, large-
scale irrigation schemes, mainly because of the prevailing flat topography and poor soils, are
technically challenging to undertake. They are similarly demanding because of the intensity
of software support needed for community mobilization at scale. The project design failed to
adequately address these issues, and its implementation and impact suffered
consequentially. But this does not mean that all investments in the sector need suffer the
same fate. Future ADB irrigation interventions could be improved in two major ways: (i) by
focusing on smaller-scale innovations that are capable of wide replication (e.g., the
enhancement of traditional flood and drainage management regimes, and improved dry
season water storage in areas with potential for high-value crops), and (ii) by building on the
benefits of improved physical infrastructure through linked interventions to provide credit and
agriculture technology for new and non-rice activities. Together, this implies more targeted
interventions, based on locally articulated needs.

67.     The project demonstrates the necessity to incorporate the broader social
circumstances at all stages of irrigation design and implementation to integrate (and
synergize) hardware and software components. It also highlights the amount of support this
may require. The chances of such integration being achieved will be increased if consultants
from different organizations with widely varying perspectives on project priorities and
objectives are not engaged for the implementation of individual components.

68.     Without rigorous formulation of objectives in project frameworks, meaningfully
measuring achievements is difficult, and without specification of clear performance targets
monitoring and evaluation tends to slip. Guidance40 for design and monitoring framework
preparation should fully used. Quarterly and annual reporting (and including the executing
agencies’ project completion reports) by project component should indicate delivery of
outputs to date in relation to targets in the project framework; they should not be qualitative
narratives of recent events.

40
     ADB. 2006. Guidelines for Preparing a Design and Monitoring Framework. Manila.
16



69.     Economic analysis should be wider in its remit than simply cost–benefit analysis; it
should especially be used to investigate alternatives rather than justify one proposed
design.41 The analysis of risk and uncertainty is particularly recommended when the
information design base is limited. The composition of project components should
demonstrate some technical integration and bring economic additionality to the entire
investment, rather than be simply added on to increase scale or apparent viability.

70.     Typical project preparatory TA resources need to reflect the project area realities. If
project design is not considered to be robust (at appraisal), then consideration should be
given to building in decision points at key stages of the project such that investment can be
curtailed.




41
     ADB. 2003. Key Areas of Economic Analysis. Manila.
                                                                                                                                                       Appendix 1   17


                                                             PROJECT FRAMEWORK (Original)


        Design Summary                           Verifiable Indicators                      Means of Verification                       Assumptions/Risks
Goals

Reduce poverty through                 •   Increased farmer incomes and              •   Benefit        monitoring       and    •   There are no major problems
sustained socioeconomic growth             economic activity in Baray and                evaluation      (BME)       surveys,       due to natural disasters.
in Kampong Thom Province                   Santuk districts                              project completion report (PCR)
                                                                                     •   BME surveys, progress reports;         •   Target beneficiaries will not be
                                       •   Increased wet season paddy                    agronomic observation; local               alienated from their land.
                                           production, established dry season            district-level agricultural
                                           paddy production, established                 statistics, PCR
                                           diversified dry season crops              •   BME surveys, PCR                       •   Implementation capacity of the
                                       •   Reduced production, transport, and                                                       government is adequate.
                                           marketing costs
Purpose

Increased incomes and improved         •   Farmer incomes increased by 10-           •   Progress reports, review               •   Price of rice and inputs and other
quality of life in Kampong Thom            40% by 2007 depending on access               missions, BME surveys                      variables remain within ranges
Province through provision of              to dry season water.                                                                     used in economic and financial
sustainable irrigation, agricultural
                                       •   Wet season paddy yields increased                                                        analyses.
extension, and rural infrastructure
                                           from 1.3 to 3.0 tons per hectare (t/ha)                                              •    Stream flow discharges and
(roads and markets)
                                           by 2007; dry season paddy                                                                rainfall are sufficient for
                                           production developed over 1,500 ha                                                       command area.
                                           by end 2003; diversified dry season
                                           crops developed over at least 500 ha
                                           mid-2005.
                                       •   Farmer operation and maintenance                                                     •    Farmers show willingness and
                                           (O&M) of secondary canals and                                                            capacity for system
                                           drains                                                                                   management.
                                       •   Average farm-to-market transport                                                     •   Government policies on O&M
                                           costs are reduced by 40% by 2004.                                                        are implemented.
18       Appendix 1



Design Summary                        Verifiable Indicators                       Means of Verification                     Assumptions/Risks
Outputs

Farmers organized and trained

•    Landownership survey and         •   Public awareness campaign on land       •   Progress reports, review              •   Survey and titling can be
     titling completed                    rights completed by June 2001;              missions                                  completed before land alienation
                                          landownership survey completed by       •   BME surveys                               occurs.
                                          end-2001; undisputed title
                                          applications documented and
•    Water user groups (WUGs)             submitted by June 2002
     and water user communities       •   About 140 WUGs (each with 50+                                                     •   Farmers are enthusiastic for
     (WUCs) organized, trained,           farmers) and 20 WUCs comprising                                                       collective action; leadership of
     and granted legal status             WUG elected representatives                                                           WUGs and WUCs is strong.
                                          established and trained by end-2002;
•    Agriculture extension services       WUC’s O&M fund established by end
     delivered                            2003                                                                              •   Coordination between agriculture
                                      •   About 20 commune/village-level                                                        and irrigation activities is
                                          extension agents trained by June                                                      adequate. Adoption of improved
                                          2002; extension materials and farmer                                                  agricultural practices is timely.
•    Irrigation infrastructure            field schools provided throughout the
     developed with input from            project period                                                                    •   Full consultations are possible
     farmers                          •   66% of farmers sign off on designs      •   Progress reports, review                  within the design period.
                                          for secondary canals and drains,            missions
                                          offtakes.                                                                         •    Engineering quality control will
                                      •   Irrigation and drainage facilities      •    Civil works contract requirement         be adequate.
                                                                                      to use local labor in project area,
                                          covering 2,000 ha operating by end-                                               •    WUGs are able to agree on
                                          2003, remaining 5,000 ha by                 or WUGs contracted directly
                                                                                                                                tertiary distribution system and
                                          September 2005                                                                        cooperative work arrangements.
                                      •   Tertiary canals and drains
                                          constructed by farmers with technical
                                          assistance from the project
                                                                                                                                              Appendix 1     19



Design Summary                       Verifiable Indicators                      Means of Verification                 Assumptions/Risks

Irrigation system management in      •   Stung Chinit Irrigation Committee      •   Progress reports; review          •   Government is willing to share
place and functioning                    (SCIC) established and functioning         missions                              management responsibility with
                                         by end-2002                            •   BME surveys                           farmers.
                                     •   WUCs trained to manage secondary                                             •   WUGs and WUCs are able to
                                         canal headworks and organize                                                     raise sufficient resources,
                                         maintenance by WUGs by mid-2003                                                  including labor, for regular O&M.
                                     •   20 Provincial Department of Water                                            •   There is retention of trained
                                         Resources and Meteorology                                                        counterpart staff; transfer of
                                         (PDWRAM) and 5 Ministry of Water                                                 knowledge from consultants is
                                         Resources and Meteorology                                                        adequate.
                                         (MOWRAM) technicians and
                                         engineers trained by end-2002
Rural infrastructure developed       •   150 km of rural roads upgraded and     •   Progress reports, review          •   Supply of local labor willing to
using labor-based methods                six rural markets improved and run         missions, PCR/project                 participate is adequate.
                                         by market user committees                  performance audit report (PPAR)
                                     •   400,000 person-days of employment      •   BME survey/PCR/PPAR
                                         generated
Activities/Inputs

Organization and training of         $2.8 million                               •   Progress reports, review          •   Consultants are procured and
farmers, land titling, agriculture    • 22 person-months of international           missions                              fielded on time.
extension                                and 156 of domestic consultants
                                         comprising irrigation institutional
                                         specialists and agronomists
                                      • Local nongovernment organizations
                                         (NGOs) for mobilization and training
20      Appendix 1



          Design Summary                                        Inputs                               Means of Verification          Risks/Assumptions

Development of irrigation                $12.6 million                                                                          •   Consultants are
infrastructure                             • Predesign surveys and investigations of             •   Progress reports, review       procured and fielded on
   • Organize project                          structures                                            missions                       time.
       implementation unit (PIU) at        • 60 person-months of international and 186 of                                       •   Counterpart staff and
       PDWRAM                                  domestic consultants, comprising engineers for                                       budget are adequate.
   • Recruit consultants                       hydrological modeling, irrigation, and drainage
   • Make surveys, investigations,             design, structural design, contracting, and
       and detailed design                     supervision; fisheries specialist, project
                                               accountants
   • Rehabilitate irrigation and
       drainage structures                 • Office space, support staff, equipment,
                                               vehicles

Development of system management         $1.2 million
institutions and capacity                  • 17 person-months of international and 16 of
                                                                                                 •   Progress reports, review   •   Consultants are
   • Establish Stung Chinit irrigation         domestic consultants for system water
                                                                                                     missions
                                               management and on-farm water management                                              procured and fielded on
       committee (SCIC) with full-time
                                                                                                                                    time.
       engineering staff; train farmer     • SCIC headquarters and meeting halls for
       members                                 WUCs                                                                             •   Counterpart staff and
                                                                                                                                    budget are adequate.
   • Develop and implement O&M             • Training of SCIC members, O&M manuals
       plans for WUCs and WUGs             • Vehicles
   • Test and implement O&M fund
Development of rural infrastructure      $6.3 million
  • Organize PIU at Provincial             • 15 person-months of international and 60 of         •   Progress reports, review
                                                                                                                                •   Consultants are
     Department of Rural                       domestic consultants comprising a roads               missions
                                                                                                                                    procured and fielded on
     Development (PDRD)                        engineer, rural infrastructure engineer, and                                         time.
  • Improve 150 km of roads                    social organizer
                                                                                                                                •   Counterpart staff and
  • Re habilitate 6 markets                • Office space, support staff, equipment,                                                budget are adequate.
                                               vehicles
                                                                                                                                              Appendix 1   21


                                          REVISED PROJECT FRAMEWORK (At Change of Scope in 2003)

Design Summary                                                  Targets                              Means of Verification        Assumptions & Risks
Goal
Reduce poverty through sustained          • Increased farmer incomes and economic activity        • Benefit monitoring and
socioeconomic growth in Kampong             in Santuk district, with some flood irrigation          evaluation (BME) surveys,
Thom Province                               benefits during the wet season in Baray district        project performance audit
                                                                                                    report
                                          • Increased wet season rice production, established
                                            dry season rice production, established diversified   • Progress reports;
                                            dry season crops                                        agronomic observation;
                                                                                                    local district-level
                                          • Reduced production, transport, and marketing            agricultural statistics
                                            costs
Purpose
Increased incomes and improved            • Farmer incomes increased by 10–40% by 2013            • Progress reports, review    • Prices of rice and other
quality of life in Kampong Thom             depending on access to dry season water                 missions, BME surveys         variables remain within
Province through provision of                                                                                                     the ranges used in the
                                          • Wet season rice yields increased from 1.3 to 3.5
sustainable irrigation and agricultural                                                           • PCR                           economic and financial
extension in a priority area of 2,960       tons per hectare (t/ha) by 2013; dry season rice                                      analyses
ha, and rural infrastructure (roads and     production developed over 1,350 ha by the end of
markets)                                    2008; diversified dry season crops developed                                        • Stream flow discharges
                                            over at least 500 hectares (ha) from middle of                                        and rainfall are sufficient
                                            2009                                                                                  for command area
                                          • Operation and maintenance (O&M) of secondary                                        • Farmers show
                                            canals and drains by farmers                                                          willingness and capacity
                                                                                                                                  for system management
                                          • Average farm-to-market transport costs are
                                            reduced by 30% by 2007                                                              • Government policies on
                                                                                                                                  O&M are implemented
Components/Outputs
1. Farmers Organized and Trained
• Landownership survey and titling        • Public awareness campaign on land rights              • Progress reports, review    • Survey and titling can be
  completed                                 completed by June 2003; landownership survey            missions                      completed before land
                                            completed by end-2002; undisputed title                                               alienation occurs
                                            applications documented and submitted by June
                                            2004                                                  • BME surveys
22     Appendix 1



Design Summary                                            Targets                               Means of Verification         Assumptions & Risks
• Water users’ groups (WUGs) and    • About 60 WUGs (each with 50+ farmers) and 5                                           • Farmers are enthusiastic
  water users’ communities (WUCs)     WUCs comprising WUG-elected representatives                                             for collective action;
  organized, trained, and granted     established and trained by the end of 2003;                                             leadership of WUGs and
  legal status                        WUC’s O&M fund established by the end of 2004                                           WUCs is strong
• Agriculture extension services    • About 8 commune-village-level extension agents                                        • Coordination between
  delivered                           trained by the end of 2002; extension materials                                         agriculture and irrigation
                                      and farmer field schools provided throughout the                                        activities is adequate;
                                      project period                                                                          adoption of improved
                                                                                                                              agricultural practices is
                                                                                                                              timely
2. Irrigation Infrastructure        • 66% of farmers sign off on designs for secondary       • Progress reports, review     • Full consultations are
   Developed with Inputs from         canals, drains, and offtakes                             missions                       possible within the
   Farmers                                                                                                                    design period
                                    • Irrigation and drainage facilities covering 2,960 ha   • Civil works contract
                                      operating by the middle of 2006                          requirement to use local     • Engineering quality
                                                                                               labor in the project area,     control is adequate
                                    • Tertiary canals and drains constructed by farmers        or WUGs contracted
                                      with technical assistance from the project               directly                     • WUGs are able to agree
                                                                                                                              on tertiary distribution
                                    • Up to 600,000 person-days per year (part from                                           system and cooperative
                                      family labor) generated in incremental farm                                             work arrangements
                                      employment, and about 100,000 person-days of
                                      incremental employment in the construction of
                                      tertiary and quaternary infrastructure
3. Irrigation System Management     • Stung Chinit Irrigation Committee (SCIC)               • Progress reports; review     • Government is willing to
   Functioning                        established and functioning by the end of 2005           missions                       share management
                                                                                                                              responsibility with
                                    • WUCs trained to manage secondary canal                 • BME surveys                    farmers
                                      headworks and organize maintenance by WUGs
                                                                                                                            • WUGs and WUCs are
                                      by middle of 2006
                                                                                                                              able to raise sufficient
                                                                                                                              resources, including
                                    • 20 technicians and engineers of the Provincial
                                                                                                                              labor, for regular O&M
                                      Department of Water Resources and Meteorology
                                      and 5 technicians and engineers of the Ministry of                                    • There is retention of
                                      Water Resources and Meteorology trained by                                              trained counterpart staff;
                                      middle of 2006                                                                          transfer of knowledge
                                                                                                                                              Appendix 1     23


Design Summary                                                   Targets                             Means of Verification       Assumptions & Risks
                                                                                                                                 from consultants is
                                                                                                                                 adequate
4. Rural Infrastructure Developed        • 80 kilometers (km) of rural roads outside the          • Progress reports, review   • Supply of local labor
  Using Labor-Based Methods                priority area upgraded and four rural markets            missions                     willing to participate is
                                           improved and run by market user committees by                                         adequate
                                           the end of 2006                                        • BME surveys
                                         • 42,000 person-days of employment in road
                                           construction outside the priority area generated
                                           by the end of 2007
Activities                               Inputs
1. Organization and Training of          $2.8 million
   Farmers, Land Titling,                • 22 person-months of international and 156              • Progress reports, review   • Consultants are engaged
   Agriculture Extension                    person-months of domestic consultants                   missions                     and fielded on time
                                            comprising irrigation institutional specialists and
                                            agronomists
                                         • Local nongovernment organizations for
                                           mobilization and training
2. Development of Irrigation             $16 million
   Infrastructure
• Organize the project                   • Predesign surveys and investigations of                • Progress reports, review   • Consultants are engaged
   implementation unit (PIU) in the         structures                                              missions                     and fielded on time
   Provincial Department of Water        • 80 person-months of international and 316
   Resources and Meteorology                person-months of domestic consultants,                                             • Counterpart staff and
• Recruit consultants                       comprising engineers for hydrological modeling,                                      budget are adequate
• Make surveys, investigations, and         irrigation, and drainage design, structural design,
   detailed design                          contracting, and supervision; fisheries specialist;
• Rehabilitate irrigation and drainage      and project accountants
   structures                            • Office space, support staff, equipment, vehicles
3. Development of System                 $1.2 million
   Management Institutions and
   Capacity
                                         • 17 person-months of international and 16 person-       • Progress reports, review   • Consultants are engaged
• Establish the SCIC with full-time        months of domestic consultants for system water          missions                     and fielded on time
  engineering staff; train farmer          management and on-farm water management
24     Appendix 1



Design Summary                                             Targets                           Means of Verification       Assumptions & Risks
  members                              • SCIC headquarters and meeting halls for WUCs                                  • Counterpart staff and
• Develop and implement O&M            • Training of SCIC members, O&M manuals                                           budget are adequate
  plans for WUCs and WUGs              • Vehicles
• Test and implement O&M fund

4. Development of Rural                $4.8 million
Infrastructure
                                       • 15 person-months of international and 60 person- • Progress reports, review   • Consultants are engaged
• Organize the PIU in the Provincial
                                         months of domestic consultants comprising a roads     missions                  and fielded on time
  Department of Rural Development
                                         engineer, rural infrastructure engineer, and social
• Improve 80 kilometers (km) of          organizer (these staff will simultaneously be partly                          • Counterpart staff and
  roads                                  engaged on irrigation infrastructure construction                               budget are adequate
                                         under a portion of part B funds transferred to part A
• Rehabilitate 4 markets
                                       • Office space, support staff, equipment, vehicles
                                                                                           Appendix 2   25


                         SUMMARY OF PROJECT PHYSICAL OUTPUTS


         Table A2.1: Irrigation Infrastructure: Summary Scope of Construction Works
    1.    FLOOD EMBANKMENT

              -   Constructed Stung Chinit Flood Embankment in total length        14,448 m
              -   Constructed Spillway Structure in length 750m                     1 place
              -   Constructed Riparian Structure in length 120m                     1 place
              -   Constructed Fish pass Structure in length 120m                    1 place
              -   Constructed North Headwork Structure                              1 place
              -   Constructed South Headwork Structure                              1 place
              -   Constructed Outlet Structures on flood Embankment                 6 places
              -   Constructed Drainage Canal in length 1,953m
              -   Constructed South Cross-Drainage Structure                        1 place
              -   Constructed Drainage Canal Headwork                               1 place

    2.    MAIN CANAL

              -   Constructed of North Main canal earthworks in length              9,742 m
              -   Constructed Box-culvert crossing Kvek Road                        1 place
              -   Constructed Box-culvert crossing main canal at SD4                1 place
              -   Constructed Cross-Drainage D2 structure                           1 place
              -   Constructed of Head Regulator Structures                          5 places
              -   Repaired of existing structures on main canal                     3 places

    3.    SECONDARY CANAL

              -   Constructed of Secondary canals irrigation in total length      20,150 m
              -   Constructed of Tail Escape Structures end of Secondary canals   5 places
              -   Constructed of Open Flumes on Secondary canal                   49 places
              -   Constructed of Emergency Spillway on Secondary Canals           5 places
              -   Constructed of Oxcart Crossing on Secondary Canals              11 places
              -   Constructed of Box-Culvert on Secondary Canals                  3 places
              -   Constructed of Check Drop Structures on Secondary Canals         9 places

    4.    SECONDARY DRAIN

              -   Constructed of Secondary drains in total length                 25,461 m
              -   Constructed of Oxcart Crossing on Secondary Drains              19 places
              -   Constructed Box-culvert on Secondary Drains                     7 places
              -   Constructed of Drain inlet Protection on Secondary Drain        44 places

    5.    TERTIARY CANAL

              -   Constructed of Tertiary Canal in total length                    37,926 m
              -   Constructed of Tail Escape Structures end of Tertiary Canals     39 places
              -   Constructed of Oxcart Crossing on Tertiary Canals               13 places
              -   Constructed of PVC pipe Ø 100 Connected from TCs To QCs         1,928 m

    6.    TERTIARY DRAIN

              -   Constructed of Tertiary Drain in total length                   43,120 m
              -   Constructed of Check structures on Tertiary Drains              55 places
              -   Constructed of Oxcart Crossing on Tertiary Drains               2 places
              -   Constructed of Concrete pipe culvert Ø 300 Connected
              -   from QDs to TDs                                                 898 m

Source: Ministry of Water Resources and Meteorology (14 September 2009).
TC=Tertiary Canal, QC = Quaternary Canal, Quaternary Drain, TD = Tertiary Drain
26     Appendix 2



Figure A2: Irrigation Scheme as Constructed




           STUNG CHINIT PROJECT LAYOUT




                                                                                                                                                                            D1=3691m
                 0.0              0.5      1.0   2.0

                                           km




                                                                                                                                                                            D2=7330m
                                                                                                                                                                                          KVAK BOX CULVERT
                                           S3




                                                                                           D3




                                                                                                                                                                                 D3=6752m
                om
              Th
                        ng




                                                                                                                                                  AD
                      po




                                                                                                                                                RO
                    om
                  oK




                                                                                                                                          SS
                6t




                                                                                                                                        CE
                                      No




                                                                                                                                      AC
                                   ad
                                 Ro
                              al
                           ion




                                                                                           S4
                          t
                        Na




                                                                                                                                                                               D4=5826m




                                                                                      S5                                                           S5
                                                                                 S5
                                                       BOX CULVERT CROSSING NR




                                                                                                REV      DATE                     DESCRIPTION                  DRWN CHKD APPR

                                                                                                                          MINISTRY OF WATER RESOURCES
                                                                                                                               AND METEOROLOGY

                                                                                                            STUNG CHINIT IRRIGATION
                                                                                                                      AND
                                                                                                         RURAL INFRASTRUCTURE PROJECT
                                                                                                                          Project Layout(North part)

                                                                                                CONSULTANTS             NAME        SIGNATURE    APPROVAL       SIGNATURE              DATE
                                                                                                DESIGNED
                                                                                                DRAWN                 T.Eth
                                                                                                                                                MOWRAM
                                                                                                CHECKED
                                                                                                APPROVED              M.CHEGWIN                 SCALES :         AS SHOWN
                                                                                                                                                CONTRACT NO.
                                                                                                 LAHMEYER INTERNATIONAL
                                                                                                                                                DRAWING NO.      OOA-LOC 04 B
                                                                                                 SMEC INTERNATIONAL
                                                                                                                                                CALC.SET NO.
                                                                                                 SMEC CAMBODIA
                                                                                                                                                DATE :           05.08.03




Source: Ministry of Water Resources and Meteorology.
                                                                                                Appendix 2   27



                                Table A2.2: Rural Road Subprojects

Sub-                                                                          Structure
project                                                        Work       Bridge Culvert       Length
No.             Road           District      Commune          method                            (km)
RB01       Krava–              Baray         Krava            Force          2        17        18.0
           Veal Spor                                          account
RS01       Kvek–               Santuk        Kraya            Force          1        17        15.5
           Dang Kdar                                          account
RB02       Taing Kok–          Baray         Sou              LBAT           1        21        12.3
           Au Rumchek                        Young            contract
RB03       Sou Young–          Baray         Sou              LBAT                     8        8.6
           Tradakpong-                       Young            contract
           Pongro-Katay
RS03       Santuk Krao–        Santuk        Kakaoh           LBAT                     3        2.7
           Sala Santuk                                        contract
RB06       Trapeang            Baray         Boeng            LBAT                     2        1.3
           Chhuok–                                            contract
           Doun Paen
RB04       Au Soursdey–        Baray         Chhuk            LBAT           1                  4.4
           Chan Lhang                        Khsach           contract
RS04       Kang Sav–           Santuk        Khley            Force                    4        2.8
           Khley                                              account
RB05       Trapeang            Baray         Ballang          LBAT                    14        9.0
           Svay–Tnaot                                         contract
           Chum
RS02       Prasat–             Santuk        Prasat           LBAT           2        19        10.1
           Srae Ta Kao                                        contract
                                                               Total         7        105       84.7
RB = Road in Baray district, RS = Road in Santuk district, LBAT = Labor-Based Appropriate Technology
Source: Ministry of Rural Development

                               Table A2.3: Rural Market Subprojects

Subproject No.       Market Name          District     Commune                   Description
MK01                Baray               Baray          Baray             Standard design for local
                                                                         market developed under RIIP
MK02                Kvek                Santuk         Hvek              Standard design for local
                                                                         market developed under RIIP
MK03                Krava               Baray          Krava             Open space market
MK = Market, RIIP = Rural Infrastructure Improvement Project
Source: Ministry of Rural Development.
28         Appendix 2



                     SUMMARY OF VEHICLE AND EQUIPMENT PURCHASES1

                                   Table A3.1: Components 2 and 3
                                                                       Purchased
No.            Description                                      Quantity   Total Price ($)
1              Civil works (office buildings)                      4          152,617.08
2              Vehicles                                            4           83,500.00
3              Motorcycles                                         5           18,500.00
4              Heavy equipment                                     5           72,863.00
5              Information technology                             76           85,287.00
                   − Computers                                    13           54,470.00
                   − Sharp copier SF-2540                          1            8,694.00
                   − Sharp plain paper fax FO-885                  1              290.00
                   − HP Design Jet 800PS                           1            9,957.00
                   − CD-R/Rewritable                               5            5,050.00
                   − Printers                                      5            2,960.00
                   − Radio communications                          6              820.00
                   − UPSs                                         13            1,876.00
                   − Other IT items                               31            1,170.00
6              Office furniture                                   80            7,708.00
                   − Cupboard, blackboard, cabinet drawers        25            2,590.00
                   − Map cabinet                                   2              400.00
                   − Meeting tables                                3              350.00
                   − Office chairs                                21              668.00
                   − Office desk                                  29            3,700.00
               Total                                                          420,475.08
Source: Ministry of Water Resources and Meteorology.

                                         Table A3.2: Component 4
                                                                        Purchased
    No.                       Description                    Quantity       Total Price ($)
           1    Vehicles                                        2                 37,000.00
           2    Trucks                                          4                 67,738.00
           3    Rollers                                         9                124,950.00
           4    Plat compactors                                 2                  3,990.00
           5    Water tanks                                     3                  4,200.00
           6    Water pump                                      3                237,878.00
           7    Motorcycles                                     8                  9,200.00
           8    Desktop computers                               4                  7,120.00
           9    Printers                                        3                  7,900.00
          10    Chairs SG 138                                  16                    864.00
          11    Chairs OCM-600                                 40                  1,200.00
          12    Table AVT2412                                   2                    390.00
          13    Chairs LC32c                                   12                    240.00
          14    Table DK 2648 and DK 3060                       9                    950.00
          15    Cupboard 304                                    5                    695.00
          16    Filings                                         3                    351.00
          17    Air conditioners                                5                  2,662.00
          18    Fax machine                                     1                    255.00
          19    CD-RW drive                                     1                    290.00
          20    Camera                                          1                    450.00
          21    Radio communication (ICOM 2001 Japan)           3                    786.00
                Total                                                            509,109.00
Source: Ministry of Rural Development.




1
    Component 1 was financed by Agence Française de Développement.
                                                                                            Appendix 4 29


                  OVERVIEW OF PROJECT IMPLEMENTATION ARRANGEMENTS


1.      The project design and change of scope envisaged a relatively straightforward
approach to institutional arrangements: national coordination (through the national steering
committee), ministry management (central project management), and implementation at the
site (through project implementation units of the Ministry of Water Resources and
Meteorology [MOWRAM] and Ministry of Rural Development, and involvement of other
agencies).

2.       For the irrigation scheme, the organization of block-based water user groups and
their composition into water user communities interfacing with MOWRAM (provincial and
national) and other provincial and district authorities via an irrigation committee to operate
the irrigation system made sense for operations.

3.    The intended implementation arrangements are summarized in Figures A4.1 and
A4.2.

A.        Major Institutional Features of Project Implementation

4.        In practice, however, during implementation:

          (i)      an operation and cultural divergence developed between the "hardware" and
                   "software" aspects of irrigation system construction and management (which
                   were the respective responsibilities of different development partners and
                   groups of consultants) and coordination platforms established (e.g., the
                   technical coordination committee)1 to resolve this were only partly successful
                   (as was the ability of the provincial coordination committee to manage the
                   technical and administrative aspects of implementation to the original extent
                   envisaged);
          (ii)     MOWRAM was somewhat reluctant to delegate as much technical authority
                   to the Provincial Department of Water Resources and Meteorology as was
                   originally expected at appraisal; and
          (iii)    a shortfall in implementation coordination between parts A and B was
                   addressed by the appointment of a coordination officer to the MOWRAM
                   project management office.

5.       Most importantly, however, (i) the effort and complexities involved in organizing
farmers into a body (the farmer water user community [FWUC]) to "assume overall scheme
management responsibility" at project closing was underestimated; and (ii) the technical and
institutional aspects of farmers’ interaction with state agencies for system management did
not evolve as anticipated.

6.     In sum, establishing appropriate functional implementation arrangements around the
revised scope and realities of farmer situations and the national institutional landscape
proved a major challenge for the project.




1
    This was essentially an unenvisaged attempt to integrate and reconcile for MOWRAM absorption the various
    streams of technical information and opinion generated by implementing consultants under components 1–3
    and the tertiary units under the project implementation unit.
30      Appendix 4

                                                         Figure A4.1: Project Organization and Coordination

                                                                                                                                                                    National
          MOWRAM                MEF                                                           Interministry             MAFF                    MRD
                                                                                                                                                                    Steering
        Undersecretary         (Chair)              CDC                MLMUC                  Resettlement          Undersecretary         Undersecretary of
                                                                                                                                                                    Committee
           of State                                                                            Committee               of State                 State




                                                                              Technical                                 Technical
                                                                               support                                   support

Executing          Project                                                                                                                      Project
Agencies      Management Office                                                                                                            Management Office
(imprest
accounts)                                       ADF-and ADB-
                 MOWRAM                                                                                                                           MRD
                                                   finance
                                                 consultants




                    PDWRAM                                                                                                                                         Project
                                          Office of          Stung Chinit                                     Stung Chinit           PDAFF           PDRD
Project               Project                                                            Provincial                                                                Coordination
                                            the                Irrigation                                     Resettlement.         Office of        Project
Implementation    Implementation                                                        Department                                                                 Committee
                                          Governor           Committee                                         Committee            Extension      Implementa
                       Unit                                                                 of
                                                              Represent                                        Represent.                              tion
                                                                                           MLM,                                                       Unit
                                                                                       Cadastre and
                                                                                        Geography



Project
Components/                 Irrigation                       System                             Farmer                   Benefit Monitoring                  Rural
Activities               Infrastructure                    Management                      Organization / Ext.            and Evaluation                 Infrastructure


                                   ---------------------------Part A-----------------------------------                                                        Part B

ADB = Asian Development Bank, AFD = Agence Française de Développment, CDC = Council for the Development, MAFF = Ministry of Agriculture, Forestry and Fisheries,
MEF = Ministry of Economy and Finance, MLMUC = Ministry of Land Management, Urban Planning and Construction, MOWRAM = Ministry of Water Resources and
Meteorology, MRD = Ministry of Rural Development, PDAFF = Provincial Department of Agriculture, Forestry and Fisheries, PDRD = Provincial Department of Rural
Development, PDWRAM = Provincial Department of Water Resources and Meteorology.
Source: Ministry of Water Resources and Meteorology.
                                                                                                                                                   Appendix 4   31

                                                         Figure 4.2: System Management Arrangement

                 Water                 Water               Water                 Water                Water   • Operation of canal offtakes
50-hectare       User                  User                User                  User                 User    • Water management and dispute
blocks           Group                 Group               Group                 Group                Group     resolution for 50 ha blocks
                                                                                                              • Maintenance of tertiary canals and
                                                                                                                drainage, and field-to-field irrigation
                        Elected                                                 Elected                       • Collection of fees (in cash or in kind)
                    representatives                                         representatives



                                                                                                              • Operation of secondary canal head
Secondary                 Water User                                          Water User                        works, canal dispute resolution
canals                   Communities                                         Communities                      • Organization and management of
                                                                                                                maintenance of secondary canals
                                                                                                              • Management of water user fees
                                                                                                              • Representation on the Stung Chinit
                                                                                                                Irrigation Committee
                                                         Elected
                                                     representatives


                                                    Stung Chinit                                              • Overall scheme management
Overall                                        Irrigation Committee                                           • Through MOWRAM technical staff,
scheme                                         Chaired by WUC Rep.                                              operation of main canal weirs and
management                                      Majority membership                                             control structures
                                                     from WUCs                                                • Operation and maintenance
                                                                                                                manuals, scheduling
                                Technical training                                                            • Set water user fees
                                                                       Members



              Implementation            MOWRAM and PDWRAM                   District and provincial           • Technical support
                consultants             technical staff and project               authorities
                                                managers


MOWRAM = Ministry of Water Resources and Meteorology, PDWRAM = Provincial Department of Water Resources and Meteorology, WUC = water user community, WUG =
water user group.
Source: Ministry of Water Resources and Meteorology.
32     Appendix 4



7.      Three factors made the organization of farmers into a body to assume partial system
management responsibilities more difficult than originally anticipated: (i) the multiple
agricultural and nonagricultural activities of many farmers, which meant that many
individuals had other demands on their time such that willingness and ability to participate in
village and farmer meetings (and to be involved in any eventual farmer organization) was
reduced; (ii) because hydraulic scheme boundaries, administrative boundaries, and farmers’
plot distributions do not necessarily coincide, any single irrigation block (bounded by
secondary and tertiary canals) does not exhibit enough social cohesion upon which to build
sustainable irrigation management capacity, and (iii) because many farmers have plots
scattered across several blocks means that an individual would be required to attend several
block-based meetings.

8.      These problems could have been overcome to some extent by designing tertiary
canals to follow village boundaries, but in general the original approach to block-based
farmer organization was essentially inappropriate. The eventual FWUC organization is
village-based for its composition and representation.

9.      The FWUC is now a "professionalized stakeholder," comprising a director, irrigation
operator leader and agents (16), plus a scheme maintenance leader and agents (8, plus a
village facilitator, accountant, and irrigation service fee collection team—usually village
leaders. Farmers elect their village representatives and the five members of the FWUC
committee. FWUC staff have received training in leadership facilitation and organization (via
Groupe de Recherche et d’Echanges Technologiques (GRET) and Centre d'Etude et de
Développement Agricole Cambodgien CEDAC), as well as accounting and computing, in
addition to water management (from PDWRAM staff). The effort required for creating and
strengthening the FWUC in fact came to occupy most of the software side of project
implementation (especially as the arrangements for wider system management remained
constrained by the wider legal and policy environment).

10.    The evolution of the project FWUC was a tortuous process throughout project
implementation, as regards the definition of its functions, responsibilities, composition, and
organization. FWUC status was legally recognized in 2006.

11.      As regards the second point, the irrigation scheme management system integrated
farmer and state responsibilities on agreed technical and administrative principles, the
original intention was that a system would be established in line with Circular No. 1 of 1999
on the implementation policy for sustainable irrigation schemes. While this provided general
principles for irrigation management transfer, it did not fully facilitate operating practice.
Increasing participatory aspects of irrigation management transfer did not prove easy for the
project given the fairly conservative interpretations of the circular by the Participatory
Irrigation Management Department in MOWRAM.

12.      At project closing in mid-2008, a fully defined shared management system for the
irrigation scheme was still not in place. The letter of agreement was signed in October 2009
(under the auspices of the Chinit Reservoir Irrigation Committee; it will be recognized under
a MOWRAM subdecree) that defines (i) the respective responsibilities of the FWUC and
MOWRAM regarding management of operation and maintenance across the range of
scheme infrastructures; (ii) ownership of property; (iii) funding estimates of and financial
responsibilities for O&M; and (iv) monitoring and dispute resolution procedures. The letter of
agreement is for a transitional period of 3 years during which the FWUC is expected to
increase irrigation service fees and/or raise funds from external sources (i.e., MOWRAM,
Provincial Department of Water Resources and Meteorology, development partners) to meet
its operation and maintenance obligations (A more complete discussion of the implications of
this for sustainability is contained in Appendix 9).
                                                                                                            Appendix 5 33



                                STATUS OF COMPLIANCE WITH LOAN COVENANTS

Project-Specific         Date            Date         Delays      Status of                            Rating
  Covenants              Due           Complied        (mo.)    Compliance                           (HS,S,PS,U)
Environmental                                                  Not Yet Due
   1. Loan Agreement (LA), Schedule 6, Para 8. The Borrower will ensure that all environmental mitigation measures set out in the
   summary initial environmental examination report are incorporated in the project designs and are implemented.

                                                            Complied With                S
Social
   1. LA, Sch. 6, Para 9(a). Resettlement. The Borrower will ensure that all people affected by the Project are compensated in a
   timely manner in accordance with ADB’s Handbook on Resettlement and compensation measures set out in the resettlement plan.
   Upon completion of the detailed design of the irrigation infrastructure works, but prior to the start of any construction of such
   works, the Interministerial Resettlement Committee (IRC) will submit to ADB for approval an updated resettlement plan.
                                                               Complied With                S
   2. LA, Sch. 6, Para (b). The IRC will be responsible for coordinating the implementation of the Resettlement Plan at the national
   level. The Stung Chinit Resettlement Subcommittee (SCRS) will be responsible for implementing the resettlement plan under
   supervision of the IRC.
                                                                Complied With             S

   3. LA, Sch. 6, Para 9(c). The IRC through MOWRAM will keep ADB informed of the progress of implementation of the
   resettlement plan through quarterly progress reports and through a report to be submitted immediately following completion of
   implementation of the Resettlement Plan and six months thereafter.

                                                               Complied With                S

   4. LA, Sched. 6, Para 10: Land Titling. The Department of Cadastre and Geography under the Ministry of Land Management,
   Urban Planning, and Construction will be responsible for implementing part A (i) of the Project. The Borrower will ensure that the
   Department of Cadastre and Geography will (i) by January 2002, have completed a survey of ownership of all land in the project
   area, and prepared and publicly posted cadastral index maps in all villages in the project area; and (ii) by June 2002, have
   completed the technical inspection of all undisputed parcels for the adjudication record.

                                                             Complied With Late             S

   5. LA, Sch. 6, Para 11. The project implementation unit (PIU) for part A will design the secondary canals and offtakes and tertiary
   block boundaries in consultation with the farmers affected by such design. The overall design of the irrigation structure will be
   completed only after at least two thirds of the farmers along each secondary canal have approved the designs for the secondary
   canals, offtakes, and tertiary block boundaries.

                                                            Complied With                   HS

   6. LA, Sch. 6, Para 12. The Borrower will ensure that public markets under part B are constructed only on existing market sites or
   public land that is not occupied or used otherwise by private persons. In selecting roads and markets for upgrading under part B,
   MRD will give strong preference to the views of target beneficiaries through surveys and meetings at the village, commune, and
   district level.
                                                             Complied With                 S

    7. LA, Sch. 6, Para 17. Before implementation of any market upgrading activities, a market committee for the market concerned
    will be established and market user fees to be charged shall be determined. The composition of the market committee, its terms
    of office, and the market user fees will be subject to approval by the Provincial Rural Development Committee. The market
    committees will be responsible for O&M of the market facilities. The market user fees will be sufficient to cover regular O&M and a
    fund for further maintenance and improvement of the market.

                                                          Partly Complied With          S



   Financial Covenants
       1. LA, Sch. 6, Para 15. MOWRAM and MRD will ensure that annual maintenance plans are prepared for rural roads and the
       main irrigation canal and control structures on the basis of physical measurements of needs and agreed-upon maintenance
       standards. The Borrower will allocate sufficient budget to cover O&M costs.

                                                    Complied With           S
  34       Appendix 5



2. LA, Sch. 6, Para 16. For the irrigation system, the Borrower will ensure that O&M is carried out in accordance with the
principles of its Implementation Policy for Sustainable Irrigation Systems. For rural roads, the Borrower will apply the system
and financing arrangements for routine and periodic maintenance of rural roads to be developed under the ADB-financed
Rural Infrastructure Improvement Project.
                                                Partly Complied With        S
3. LA, Art., IV, Sect. 4.06(b). The Borrower will maintain, or cause to be maintained, separate accounts for the Project and
have them and related financial statements audited annually. The Borrower will furnish to ADB not later than 12 months after
the end of each related fiscal year (FY), certified copies of such audited accounts and financial statements and the report of
the auditors relating thereto.
                                           Complied With                HS

Others
1. Established, Staffed, and Operating PMU/PIU part A: LA, Sch. 6, para. 1. National Level. MOWRAM will ensure that
throughout project implementation the project management office (PMO) for part A will be headed by a national project
director at the level of undersecretary of state and include a full-time manager at the level of director.

                                                    Complied With                HS

2. Fielding of Consultants: L.A., Art. IV, Sect. 4.03(a): The Borrower will cause competent and qualified consultants and
contractors, acceptable to ADB, to be employed.
                                                     Complied With             HS

3. LA, Sch.6, Para 2. Provincial Level. MOWRAM will ensure that throughout project implementation the PIU for part A will
be headed by the provincial director of water resources and meteorology as project manager and include a deputy project
manager and an adequate number of suitably qualified staff on a full-time basis.

                                                     Complied With              HS

4. LA, Sch. 6, Para 3. Prior to 30 June 2002, MOWRAM will establish the Stung Chinit Irrigation Committee (SCIC), which
will be responsible for managing the Stung Chinit irrigation system. By 30 June 2003, MOWRAM will have completed
construction of a headquarters building for the SCIC.

                                                     Complied With Late          PS

5. Part B. LA, Sch. 6, Para 4. National Level. MRD will ensure that the PMO established for the Project will continue to
function throughout project implementation as the PMO for part B, under the direction of a national project director at the
level of undersecretary and with a full-time national project manager and including additional staff as needed.

                                                      Complied With             S

6. LA, Sch. 6, Para 5. Provincial Level. MRD will ensure that throughout project implementation the PIU for part B will be
headed by the provincial director of the Department of Rural Development as project manager and will include a full-time
deputy project manager and an adequate number of suitably qualified staff. MRD will provide three road construction
teams comprising a technical adviser, provincial engineer, site engineer, and three supervisors to support the PIU.

                                                     Complied With              S

7. LA, Sch. 6, Para. 6. National Level. Within 30 days of the effective date, the Borrower will have established a project
steering committee (PSC) and appointed a representative from the Ministry of Economy and Finance (MEF) as
chairperson, and National Project Directors from MOWRAM and MRD and representatives of the Ministry of Agriculture,
Forestry, and Fisheries (MAFF); the Ministry of Land Management, Urban Planning, and Construction; the Cambodia
Development Council; and the chairman of the IRC as members. The PSC will meet at least semiannually, with the project
managers present, and will be responsible for overall coordination of project implementation among the project executing
agencies and dispute resolution.

                                                     Complied With              S

8. LA, Sch. 6, Para. 7. Provincial Level. Within 30 days of the effective date, the Borrower will establish a Project
Coordination Committee. The committee will meet at least quarterly and will be responsible for coordinating
implementation activities and adjusting work programs as needed.

                                                     Partly Complied With       PS

9. LA, Art. IV, Sect. 4.07(b): The Borrower will furnish, or cause to be furnished, to ADB quarterly reports on the carrying
out of the Project and on the operation and management of project facilities.
                                                                                                              Appendix 5 35



                                                            Complied With              HS

     10. LA, Art. IV, Sect. 4.07(c). Promptly after physical completion of the Project, but not later than 3 months thereafter, the
     Borrower will prepare and furnish to ADB a report on the execution and initial operation of the Project.

                                                           Partly Complied With         PS

     11. LA, Sch. 6, Para. 13. Except as the Borrower and ADB may otherwise agree, the following criteria will apply in the
     selection of subprojects under part B: (i) the estimated subproject cost will be less than the equivalent of $450,000 (in
     2000 prices), and (ii) the expected implementation period for each subproject will not be more than 2 years.

                                                           Complied With               HS

     12. LA, Sch. 6, Para. 14. MRD will submit all subprojects proposals to ADB for approval prior to their implementation, until
     the Borrower and ADB have agreed that MRD will be responsible for final approval of subprojects. If, exceptionally, a
     subproject is estimated to cost more than the equivalent of $450,000 (in 2000 prices), this subproject will continue to be
     subject to approval by ADB prior to implementation.

                                                          Complied With                S

                                                          Overall Rating               S


(–) = no rating available. FY = fiscal year, HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
36     Appendix 6



                          SUMMARY OF RESETTLEMENT ISSUES


1.      Three stand-alone but closely linked resettlement plans were prepared for the project;
the first (resettlement plan phase 1) for the irrigation and drainage canal infrastructure; the
second (resettlement plan phase 2) for the reservoir area; and the third (resettlement plan
phase 3) for the Ochork Tributary area.

2.       The plans identify a total of 3,685 affected households: 1,778 under resettlement plan
phase 1; 1,103 under resettlement plan phase 2; and 804 under resettlement plan phase 3.
During the course of the implementation of each plan, additional households came forward with
claims for damage to crops and farmland due to flooding during the rainy seasons in 2006 and
2007, which were claimed to have been caused by the construction of various components of
the irrigation system.

3.      Overall, the need to change the project scope led to the creation of an increasingly
complex and contentious resettlement situation that ADB and local institutions struggled to fully
deal with throughout project implementation.

A.     Project Design Resettlement Expectations

4.      At project preparation, preliminary canal design work indicated that about 110 hectares
(ha) of government-owned land used for recession rice would be inundated once the weirs were
repaired, and the size of the inundation zone would be expected to decline steadily from the end
of the rainy season through the dry season, allowing some households to continue recession
rice agriculture, but delayed by 1–2 months. The primary users of the land came from a nearby
village of 73 households. Although no settlements were to be flooded and no physical relocation
of households was required, people then currently using land that would become permanently
inundated would receive compensation (in the form of alternate land for agriculture).

5.      The impacts from canal rehabilitation were originally expected to be minor because the
rights-of-way were already established, except for 22 households located on the eastern bank of
the main canal, near the Stung Chinit weir (these households were to be relocated to an area
near the Stung Chinit river to preserve their primary economic activity of bamboo collection
upstream). Rural roads were to use the existing alignments, and markets were to be built on
existing market land or unoccupied public land donated by the district or commune authorities;
they were not expected to have adverse resettlement impacts.

B.     Change of Scope Resettlement Implications

6.      At the change of scope, based on the preferred design option, the total number of
households affected (in the priority area) was provisionally calculated at 1,778. This significant
change in number was explained by (i) the need to reconstruct, not repair, existing irrigation and
drainage infrastructure; (ii) confirmation by the Ministry of Water Resources and Meteorology
(MOWRAM) and the Interministerial Resettlement Committee that the Land Law of 30 August
2001 established a legal requirement, not recognized at loan appraisal, to compensate for land
lost to secondary canals and drains; (iii) more accurate topographical studies and
orthophotomapping than were available at loan appraisal; and (iv) inclusion of affected peoples
in the impact area of flood embankments and drains required by the Stung Chinit reservoir.
                                                                                 Appendix 6     37


7.      Of these affected people, about three-quarters were to suffer only marginal land loss or
some loss of seasonal land use that could be overcome by changed land and water use. The
project was not expected to cause major displacement of people or houses. A total of 39 houses
and 28 trading stalls would be displaced on the main canal, and 16 houses would be displaced
by the reservoir, all of which were to be relocated close by.

8.       By September 2007, an additional 373 households (under resettlement plan phase 1)
claimed that their crops and farmland were affected by the project; by October of the following
year, 352 of these additional affected households had been compensated (21 others were
confirmed to have no valid claim for losses). In addition, 33 landless affected households were
living along the canal embankments and needed to be relocated; a relocation site was provided
in Kvek village. (Subsequently, 1 of the 33 relocated households was found to be still living at
the site, the others had left and apparently sold their allocated home plots to village residents.)

C.     Experience after Implementation of the Change of Scope

9.      During implementation, all affected persons were compensated promptly for loss, with
the exception of 383 who were severely affected by unexpected flooding during the 2006
season and waited a year for compensation. Some residents of Snao and Kley villages
experienced flooding due to poor drainage and waited a long time for compensation of poultry
and garden loss. More significantly, the construction of the reservoir necessitated revision (in
the form of an addendum) to the approved resettlement plan, and this included more than 1,100
affected persons, of which 777 were severely affected through loss of 10% or more of their
productive assets. (By September 2007, an additional 316 affected households under
resettlement plan phase 2 were also identified). Compensation payments were completed by
May 2008.

10.     In Kampong Sdach village, about 13 households were seasonally inundated and
arranging compensation proved problematic as some households did not wish to relocate away
from the water’s edge. A relocation site was prepared located about 1 km from the existing
location of the 13 affected households, and the affected households accepted compensation at
replacement cost for their houses. By the end of 2008, however, only three affected households
had moved to the relocation site; the 10 others wanted to keep both their present location and
their replacement plots in the relocation site. The 10 households are reportedly engaged in the
trade of illegally cut logs and use the creek to transport the logs. In addition, another 300 or so
households were unexpectedly affected by the 2007 flooding. Further problems arose with the
flooding of the Ochork tributary, and resulted in about 650 households losing permanent use of
some agriculture land.

11.    As well as these changes due to the direct, if unexpected, project impacts, issues
surrounded the compensation for different types of canals (land loss to secondary canals and
drains was expected to be compensated, but land loss to tertiary and quaternary canals would
not be—this seemed unfair to some farmers). Issues of compensation in the form of land were
complicated by (i) increasing purchase of land by local (and not so local) speculators; (ii) by the
inherent limitation of suitable paddy land; and (iii) by farmers’ fundamental distrust of the
administration and dispute resolution system in the event of conflict. These factors collectively
tended to make farmers prefer cash compensation where possible.

12.    As the whole resettlement situation became increasingly complex during 2005–2006, a
change of staff within ADB and confusion between ADB and MOWRAM (who had their own in-
house international consultant) developed about what would be required in terms of content and
38     Appendix 6



detail for revisions to the resettlement plan, and also a divergence of opinion about what the
actual project impacts had been at Kampong Svay. MOWRAM regards this period as one of
discontinuity and poor institutional memory on the part of ADB, and especially unfortunate in
resulting in the discarding of detailed information compiled by MOWRAM for a draft addendum
(which ADB had initially requested) in favor of preparation of a phase 2 resettlement plan.

D.     Summary

13.     While the project (at ADB headquarters, at the Cambodia Resident Mission, within the
MOWRAM resettlement unit) has generated an enormous amount of material covering
resettlement planning, personal memories of institutional and staff may conflict and be
incomplete. Some points emerging from the project experience include the following:

       (i)     The original design of the project without significant social development
               involvement led to a fundamental lack of appreciation of the likely complexities of
               resettlement planning vis-à-vis land availability, the need to fend off land
               speculation, compensation for different canal types, and farmers’ preferences for
               cash (against ADB’s standard policy of preference for alternative land).
       (ii)    The 2003 change of scope necessarily expanded the scale of resettlement; about
               $3.26 million was eventually spent on resettlement.
       (iii)   The early expectations of MOWRAM were that an essentially evolving or iterative
               approach would be used for resettlement planning, rather than a need to prepare
               new resettlement plans as ADB later required—this caused significant friction
               between MOWRAM and several resettlement missions conducted by ADB. What
               resulted from this was a perception within MOWRAM (and its own international
               consultants) that ADB resettlement supervision is "spotty" and infrequent, and is
               poorly resourced, overly formulaic, and time-driven, as well as hierarchical and
               authoritarian.
       (iv)    Both continuity of personnel (desirable) and clarity of process (essential) are
               required for good project administration, and in these conditions it is arguable
               whether either were in place on the part of ADB.
       (v)     Notwithstanding these issues, the implementation experience of the project did
               articulate a major formal resettlement procedure in Cambodia.
                                                                                                      Appendix 7   39


           SUMMARY OF IRRIGATION INFRASTRUCTURE DESIGN CHRONOLOGY:
                   CAUSES, CONSEQUENCES, AND IMPLICATIONS

1.       The development of the irrigation infrastructure for the Stung Chinit Irrigation and Rural
Infrastructure Project is best divided in three epochs. The first is from 1996 to 2000, a period of
early technical assessments and high expectations, where the "unknowns" had not been
identified. The second is from 2001 to 2003, a period of project mobilization and discovery,
where the unknowns were discovered and articulated, and a change of scope was required to
address the realities of the operating environment. The third and final is from 2003 to the
present day, when an options strategy was formulated, a course of action decided upon, and an
irrigation system constructed which is operating today (albeit at a reduced command area) with
the potential for future expansion.1

A.       1996–2000: The Project Formulation

2.     Initially a project preparatory technical assistance (TA) study was prepared for Stung
Chinit Water Resources Development, and approved in June 1996.2 The project as requested
by the government was for a new upstream reservoir on the Stung Chinit River to provide wet
and dry season irrigation supply for 12,000 hectares (ha).

3.       At the time, the Asian Development Bank (ADB) was concerned about environmental
impacts (especially of a dam in neighboring uplands) and local capacity to implement the
upstream reservoir project. ADB proposed a less ambitious option, involving rehabilitation of an
existing irrigation system using weirs across the Stung Chinit and Stung Tang Krasang to
manage run-of-river flows to irrigate 12,000 ha in the wet season and 2,000 ha in the dry
season.3 The quality of the feasibility study report prepared under the TA was rated poor, partly
because the TA was interrupted in 1997 due to a deterioration in security.4 The deterioration in
security made it impossible to inspect the site and, as a consequence, the condition of the
irrigation structures was unable to be determined. 5

4.     A follow-up small-scale TA was initiated in 1999 at the government's request to reassess
the proposed project.6 The TA recommended a downstream weir with a reduced irrigation
command area of supplemental wet season irrigation for 7,000 ha and dry season irrigation for
2,000 ha. Engineers determined this area was more appropriately matched to potential storage
volumes.

5.     The decision to scale the project down—from 12,000 ha with an upstream reservoir to
7,000 ha with weir and spillway—was an improvement. However, the findings from this TA

1
   This report focuses primarily on the irrigation infrastructure impacts on decision making. Clearly other factors are
   influencing technical decisions to proceed, most importantly the political economy of the time.
2
   ADB. 1996. Technical Assistance to the Kingdom of Cambodia for the Stung Chinit Water Resource Development
   Project. Manila (TA 2592-CAM). The original study aimed to assess a project proposal prepared by the
   Government of Japan as early as the 1960s.
3
   The existing irrigation system on the Stung Chinit was established in the Khmer Rouge era with the weir structures
   still standing. Between 1978 and 1989 the system was operating; however, in 1989 a large flood breached the
   earth dike and the system fell into disrepair.
4
   The deterioration in security made inspection of the site impossible and, as a consequence, the condition of the
   irrigation structures could not be assessed.
5
  Stung Chinit Irrigation and Rural Infrastructure Project, Change in Project Scope Report, 2003.
6
   Small-scale technical assistance to the Kingdom of Cambodia for the Study for Stung Chinit Water Resources
   Development (TA 3275-CAM) in ADB. 1999. Monthly Report on Small-Scale Technical Assistance Projects Not
   Exceeding $150,000 Per Project. Manila.
40        Appendix 7



ultimately laid down a critically flawed foundation for the project, which was to have long-lasting
ramifications affecting implementation and impact.

6.      Although unknown at the time,7 two critical factors caused a number of oversights. The
first was that the small-scale TA failed to accurately identify the reality that much of the irrigation
infrastructure was in fact far beyond repair, and would require complete reconstruction. The
second oversight was that the irrigation design was based on what was later to be determined
as flawed topographic analysis. This had a cumulative impact of dramatically altering the costs
associated with reservoir construction and, accordingly, the economic feasibility of the project.
The flooding of the Stung Chinit River upstream from the weir site was also grossly
underestimated, and resulted in far greater resettlement than originally anticipated.

7.      The consultants and ADB had some apparent differences in interpreting the available
evidence, for example, the consultants stated in their report that the weir gates and control and
diversion structures are no longer functioning, and some canals are filled with sediment or have
eroded banks, leaving many areas unsuitable for crops even in the wet season and entirely
barren during the dry season.

8.      However, by the time the report and recommendation of the President was prepared
(2000), the view was more that the basic layout of the scheme is sound, the weir
superstructures are intact, and many of the canals require only moderate earthwork. The
situation presents an opportunity to restore irrigation at less cost than to establish a new
system.

8.     The loan for the project became effective in February 2001 and the project was divided
into four components, of which component 2 was classified as irrigation infrastructure,
comprising (i) repairing the main diversion weirs on the Stung Chinit river and its tributary the
Stung Tang Krasang; (ii) repairing flood bunds, constructing new bunds on the eastern side of
the main canal, and providing drainage structures to protect low-lying agricultural areas between
the two rivers; (iii) constructing a fish pass and riparian flow structures to allow annual fish
migrations; and (iv) remodeling and repairing the main and secondary canals and regulators,
along with roughly 60 kilometers of embankment service roads. The base cost for component 2
was estimated to be $5.98 million.

B.        2001–2003: The Initial Implementation Period

11.    Implementation of the project commenced in September 2001 with the mobilization of
the Lahmeyer International and SMEC Joint Venture consultants.

12.     In the progress report of September 2002 (i.e., well into the detailed design phase), the
situation had changed radically:
          … on the basis of recent geotechnical and field investigations, that the structural
          damage to the weirs at Stung Chinit and Stung Tang Krasang is so extensive that
          demolition or abandonment of the existing structures, and their replacement by a
          combination of “spillweir” and riparian outlet at each river, are recommended as being
          more economical than repairing the original structures and supplementing them with


7
    Possibility the project preparatory TA consultants did not fully appreciate the level of understanding of the ground
    issues by local agencies at the time. .
                                                                                                           Appendix 7   41


         flood spillways. The Stung Tang Krasang weir shows similar signs of structural
         inadequacy8.

13.     The same report also contains a description of the hydraulic model studies of flood flows
through the existing and proposed new diversion structures at Stung Chinit and Stung Tang
Krasang; in short, the model was found to have been completely recalibrated and rerun once
the ground elevations taken from the orthophotomapping were found to be incorrect in many
locations.

C.       2003 Onward: Change of Scope, and Construction of Physical Works

14.     In December 2002, a process of seeking alternative options was initiated, with
consultants advised to explore only those elements of the original project that could be
implemented within the existing original loan amount. The project implementation options report
was prepared in early 2003.9 It explored a series of 13 alternative options (Table A8). To
maintain costs within the original loan amount, a modular approach to project implementation
was recommended. By late 2003, the preferred project implementation arrangement was to
construct the core infrastructure on the Stung Chinit reservoir10 and in a priority area to the
north11 using only currently available funding, and to expand the scheme later.12

15.      The irrigation command area under this scope change declined significantly. The new
configuration was to provide primary, secondary, tertiary, and quaternary13 infrastructure for
irrigation and drainage, in a priority area west of the northern main canal of about 2,960 ha
(compared with 7,000 ha envisaged at loan appraisal) and about 1,800 ha during the dry
season (compared with 2,000 ha envisaged originally). While the command area and
infrastructure requirements decreased significantly, cost implications as a result of the scope
change were unfavorable. The original component 2 base cost estimates increased from
5.9 million to 8.4 million.14

16.     ADB approved the major change of scope in December 2003; nearly 2 years had
passed since the unknowns became known. The major impacts of this outcome were the
following:
        (i)  Component 2 (irrigation infrastructure) was significantly delayed,15 while the
             progress of component 1 (farmer community organization and extension

8
  MOWRAM. 2002. Stung Chinit irrigation and Rural Infrastructure Project: Loan 1753 (SF). Monthly progress report,
   page 10. Phnom Penh
9
   In late 2002 a series of recommendations were made; several focused on the need to undertake extensive soil
   tests to ascertain the long-term agricultural potential of the project area soils and their suitability for construction.
   The issue of soil quality became especially relevant after the change of scope in late 2003.
10
   With a reservoir upper storage level of 252.00 meters, the reservoir was expected to hold 3.56 gigaliters.
11
   The southern irrigation command area and control structures across the Stung Tang Krasang were to be held over
   for potential phase 2 developments. The irrigation off-take structure at the reservoir to the south of the Stung Chinit
   was to be constructed in preparation for a potential phase 2 expansion into the southern command area (potential
   area: 4,000 ha).
12
   As and when funding might become available.
13
   Quaternary canals were only constructed in the trial area of the irrigation system. The initial design was to
   construct regimented consistent quaternary canals for ease of management, however land titling issues and loss of
   irrigation area greatly impacted their adoption. Presently farmers are designing quaternary canals within their own
   irrigation bays on an ad hoc basis.
14
   These cost changes were borne by a reallocation of funds within the project (reducing the scope of rural
   infrastructure investments) and the contribution of $3 million from MOWRAM.
15
   The initial plan. which the other components were using, was to deliver water to farmers by late 2004. This was
   now delayed to mid-2006 due to the change in scope.
42         Appendix 7



                     services) was hampered by the absence of irrigation infrastructure to perform
                     trials.
           (ii)      An experimental irrigation plot (about 50 ha) was established adjacent to the
                     northwestern end of the main canal and water was pumped from the nearby
                     original Stung Tang Krasang infrastructure. At this time the issue of soil quality
                     analysis was raised again, as sandy soils with high permeability rates were
                     present in the reduced command area.16 This represented a significant setback
                     for the potential of dry season rice production in the northern command area.17
           (iii)     A new resettlement plan had to be developed (as a result of the new dam level),
                     which significantly delayed progress.

17.    The construction of infrastructure on the Stung Chinit reservoir then continued, including
the construction of primary, secondary, and tertiary canals and associated drainage.

D.         2008 and Onward: Project Completion

18.      Many minor construction modifications were required post-2003 and a 1-year extension
on the completion date was necessitated (to June 2008). A description of the completed
irrigation infrastructure (based on data provided by MOWRAM and maintenance and completion
reports drafted by Lahmeyer–SMEC) is as follows: The irrigation scheme at this primary stage
comprises a reservoir with 750 m spillway (height 252.00) with an upper storage level volume at
this height of 3.56 gigaliters. A 120 m fish ladder plus 120 m riparian flow structure are present
adjacent to the northern end of the spillway. Head-works are in place to regulate water to the
North and for future canal expansion to the south of the Stung Chinit. Head-works also exist at
the O Chok reservoir to regulate water for future expansion in this area. Six outlet structures
have been constructed in the reservoir embankments allowing lands to be irrigated adjacent to
the reservoir.18 The main canal, some 9 km in length, is best described hydraulically as a series
of three smaller reservoirs divided in sections by a culvert and a siphon. The rate of irrigation
water distribution is determined by the water level of the reservoir via gate regulation influencing
the standing water level of the three sections of the main canal. Maintaining a constant height of
water in the main canal maintains consistent flow rates through the 5 secondary canals and 38
km of tertiary canals into 47 tertiary blocks with a total command area of 2,214 ha19 in the wet
season. The system has been designed so no gate management is required after the secondary
gate and water is distributed evenly across the command area by proportional flow.20 Drainage
is provided by means of 5 secondary and 49 tertiary drains with a combined length of
approximately 70 km.

16
     This is a setback for the production of dry season irrigation as high percolation rates make maintaining appropriate
     irrigation water levels within a specific plot almost impossible. The farmer water user community (FWUC) stated
     during field interviews for the project completion report preparation that 30% of the northern command area
     comprises sandy higher percolation soils. The 2008 completion report by Lahmeyer–SMEC states that while soils
     of higher permeability exist, the general clay content is sufficient for rice cultivation if managed appropriately. The
     system is designed to deliver 117 millimeters per week to the field at full supply discharge, which is more than
     adequate if water is not wasted.
17
     Other crops could potentially be produced on these soil types such as peanuts and vegetables.
18
     The consultant was unable to gain access to these sites to confirm status during the field visit (September 2009).
19
     This figure is from the 2007 Lahmeyer–SMEC Irrigation System Management document and differs from the more
     usually quoted figure of 3,000 ha. In its project completion report, MOWRAM states that 1,973 ha are irrigated off
     the main northern canal, although the area collected under an irrigation service fee by the Stung Chinit FWUC in
     2008 was 2,398 ha. The original command area serviced at the change of scope was to be 2,960 ha. Overall, the
     size of the dry and wet season planted areas at the completion of the project cannot be stated with a high degree
     of certainty.
20
     While this makes water management simpler for primary and secondary canal management, it requires greater
     coordination at field level to ensure correct flow rates are maintained 24 hours per day.
                                                                                                          Appendix 7   43



19.      A positive consequence of the change of scope and modular approach within the
irrigation infrastructure component is the potential for cost-effective expansion, since the sunken
costs were already absorbed by the successful completion of the reservoir and associated
offtake structures. The 2007 Irrigation System Management Report produced by Lahmeyer–
SMEC states that the recently constructed infrastructure offers the potential for extending the
irrigation command area without major additional infrastructure costs. A further 11,000 ha has
been identified for potential expansion, comprising the Southern Irrigation Area, 7,000 ha; the
Banteum Reach Village, 700 ha; areas with recession cropping in the reservoir, 550 ha;21 areas
adjacent to the Chinit reservoir, 1,000 ha; the O’chok area, 750 ha; and the Lok Tah and Kai
Tah reservoirs command area, 1,000 ha.

E.         Summary

20.        The main points emerging from this history of the project’s evolution are as follows:
           (i)   The decision not to proceed with an upstream reservoir for irrigating some
                 12,000 ha in the Stung Chinit catchment appears to have been appropriate.
           (ii)  Unfortunately the irrigation design relating to a storage weir across the Stung
                 Chinit and Stung Trang Kasang—with an associated command area of
                 7,000 ha—was overly ambitious and flawed from the commencement of the
                 project, due largely to inaccurate data sets and analyses, combined with the
                 inability to assess the condition of the structures requiring rehabilitation. This led
                 to serious ramifications on the project’s cost structure, the extent and complexity
                 of the resettlement plan, and the length of time required to reassess operating
                 conditions and to devise a change of scope for the construction of the new
                 irrigation infrastructure.
           (iii) Further, the absence of sufficient analysis of the soil structure for agricultural
                 suitability (despite this being advised in 2003) did even more to set back and
                 undermine confidence in the project’s management.22
           (iv)  The decision to modulate development at the time of the scope change was a
                 positive approach to a difficult (if somewhat self-inflicted) predicament. The time
                 taken to devise and approve the change of scope had a negative effect on the
                 other project components, not only delaying overall progress but undermining
                 confidence in the project (within ADB and MOWRAM).
           (v)   While the project appeared to have great irrigation potential 12 years ago, and
                 the engineering standard of the current development is high, only a small degree
                 of that potential23 has so far been realized.
           (vi)  The current condition of existing irrigation infrastructure must be maintained to a
                 sufficient standard to realize the system’s expansion potential.24




21
     During field interviews, people stated that currently no recession rice was being produced in the reservoir. This was
     not verified by site inspection.
22
     While the soil issue is important it is manageable in the future with appropriate agricultural practices and cropping;
     however, these are more complex, foreign, and take time to learn.
23
     Other benefits include fish production and rural infrastructure improvement; however, this paper relates only to
     irrigation potential.
24
     A proposal for urgent maintenance was drafted in mid-2008. During the project completion review site visit of
     September 2009 no maintenance actions were noted. This would also bring overall average development costs
     down.
44       Appendix 7
                                                             Table A7: Change of Scope Options

                                                                Dry           Dry           Dry
                                                             season        season        season       Potential
                             Base               Benefits    irrigation    irrigation    irrigation     total dry
                             Costs                wet          from          from          from         season          IRR
                               ($       Area    season       inflows       storage       storage      irrigation    Irrigation
Option Description           million)   (ha)      (ha)          (ha)        TK (ha)      CH (ha)          (ha)       only (%)      Advantages           Disadvantages
0 Original design and         6.0        7,00       7,000         2,000             0             0         2,000      15.0
   original cost estimate                   0
   from ADB RRP
   August 2000
1 Stung TK + MCN only         5.5       2,96       2,960          200              0             0           200                 Early generation    CH flows not
   with TK @min height                     0                                                                                     of irrigation       mobilized and no
   (no CH embs)                                                                                                                  benefits            benefits South of
                                                                                                                                                     Stung Chinit
2    Stung TK + MCN only      5.7       2,96       2,960          200            480             0           680                 Early generation    CH flows not
     with TK storage (no                   0                                                                                     of irrigation       mobilized and no
     CH embs)                                                                                                                    benefits and        benefits South of
                                                                                                                                 improved benefits   Stung Chinit
3    Stung CH + MCN           7.5       2,96       2,960        1,800              0             0         1,800                 CH flows            Later start to
     only @ min height (no                 0                                                                                     mobilized           irrigation and no
     TK embs)                                                                                                                                        benefits South of
                                                                                                                                                     Stung Chinit
4    Stung CH + MCN           7.7       2,96       2,960        1,800              0           588         2,388                 CH flows            Later start to
     only with storage (no                 0                                                                                     mobilized and       irrigation and no
     TK embs)                                                                                                                    improved benefits   benefits South of
                                                                                                                                                     Stung Chinit
5    Stung TK + CH +          9.0       2,96       2,960        2,000              0             0         2,000       6.1       In line with        No benefits South of
     MCN only embs @                       0                                                                                     staged planning     Stung Chinit
     min height
6    Stung TK + CH +          9.5       2,96       2,960        2,000            480           588         3,067                 Significant         High storage not fully
     MCN only embs with                    0                                                                                     increase in         usable until later
     storage                                                                                                                     benefits over       stage of project
                                                                                                                                 option 5            realized
7    Omission of SC7 and     11.9       4,95       4,953        2,000              0             0         2,000                 Some benefits       Full benefits south of
     SC8; TK & CH embs                     3                                                                                     south of Stung      Stung Chinit not
     @ min ht.                                                                                                                   Chinit              realized
8    Omission of SC7 and     12.4       4,95       4,953        2,000            480           588         3,067       8.6       Mobilization of     Full benefits south of
     SC8; TK & CH embs                     3                                                                                     active water        Stung Chinit not
     with storage                                                                                                                storage             realized
9    Stung CH only +         13.7       7,38       7,381        1,800              0             0         1,800                 CH flows            Later start to
     MCN & MCS (no TK                      1                                                                                     mobilized and       irrigation and TK
     embs) @ min height                                                                                                          benefits South of   flows not mobilized
                                                                                                                                 Stung Chinit
                                                                                                                          Appendix 7    45


10   Stung CH only +            14.0   7,38       7,381   1,800     0   588   2,388          CH flows and        Later start to
     MCN & MCS (no TK                     1                                                  active storage      irrigation and TK
     embs) with storage                                                                      mobilized           flows not mobilized
11   Full infrastructure @      14.4   7,38       7,381   2,000    0     0    2,000    9.1   Original planning   Low IRR from
 a   min height 2,000 ha                  1                                                                      increase costs
     tertiary infrastructure
11   Full infrastructure @      15.2   7,38       7,381   2,000    0     0    2,000    8.6   Original plus       Further reduction in
 b   min height 7,000 ha                  1                                                  tertiary works      IRR
     tertiary infrastructure
12   Full infrastructure with   15.7   7,38       7,381   2,000   480   588   3,067   11.0   Significant         Higher costs
     storage                              1                                                  increase in
                                                                                             benefits over
                                                                                             option 11
Source: Ministry of Water Resources and Meteorology.
46        Appendix 8



                         REVIEW OF PROJECT ECONOMIC ANALYSES

A.        Economic Analysis at Project Design

1.      Project design was undertaken in two stages: (i) in the 1996 technical assistance
(TA) for Stung Chinit Water Resource Development Project, and (ii) the 1999 small-scale TA
for the Study for Stung Chinit Water Resources Development.1

2.     The economic analysis under the first TA was cursory (as was the whole design
basis at that stage). Internal Asian Development Bank (ADB) review concluded that (i) the
economic pricing was largely incorrect; (ii) estimates of likely farm and crop financial and
economic budgets were entirely from secondary sources; (iii) projections of benefits from fish
ponds were overstated; (iii) numerous arithmetic and computational errors were overlooked;
and thus (iv) the economic analysis as a whole was flawed, incomplete, and inadequate.

3.     However, this stage of economic analysis did highlight two important points: (i) the
associated rapid socioeconomic appraisal of the stung chinit basin paper did document the
range of nonfarm activities that predominated in the proposed project area (and which then
seemed to get overlooked in subsequent project design), and (ii) it concluded that a large-
scale irrigation project rehabilitating existing infrastructure was not viable without the
construction of a dam in surrounding hills. Such a dam was unacceptable for environmental
reasons and also because the area was still controlled by the Khmer Rouge.

4.       The subsequent 1999 small-scale TA report is the basis of the eventual project
viability estimate and is reflected in the economic analysis. Some main features of this stage
of the economic analysis are as follows:

          (i)     The economic analysis was restricted to a cost–benefit analysis, and wider
                  aspects (e.g., of economic rationale, alternatives analysis, sustainability of
                  impact) were not covered.
          (ii)    Incremental rice production was the biggest source of benefits, with modest
                  amounts of dry season cropping and only some small fisheries impacts (about
                  5% of total benefits).
          (iii)   The economic pricing was done properly, with rice economic valuation based
                  on a weighted import and export parity price basis (which was reasonable at
                  that time—given that Cambodia was importing food).
          (iv)    The project now included a rural infrastructure component (i.e., part B); the
                  estimated economic internal rate of return of this component (32.4%) was
                  more than double that of the irrigation scheme alone (15%).
          (v)     Perhaps more importantly, the economic analysis of the project as designed
                  failed to provide any real technical or economic rationale for the inclusion of
                  this rural infrastructure component, other than in a very general way of
                  providing links from the irrigation scheme to local markets. The clear (if crude)
                  implication is that part B of the project was grafted on to the former irrigation
                  scheme design simply to raise the overall estimate of project viability above
                  the 12% threshold and to increase the size of the eventual investment project.
          (vi)    The estimation of benefits for the rural infrastructure component included not
                  only vehicle operating cost savings but also an estimated impact on
                  agriculture producer surplus. The description of such benefits does not accord
                  with what is usually measured formally as producer surplus (which is the
1
    ADB. 1996. Technical Assistance to the Kingdom of Cambodia for the Stung Chinit Water Resource
    Development Project. Manila (TA 2592–CAM); Small-scale technical assistance to the Kingdom of Cambodia
    for the Study for Stung Chinit Water Resources Development (TA 3275–CAM) in ADB. 1999. Monthly Report
    on Small-Scale Technical Assistance Projects Not Exceeding $150,000 Per Project. Manila.
                                                                                              Appendix 8   47


                   difference between the price some producers actually do sell at compared
                   with a market clearing price), and whether or not project farmers get such
                   benefits depends upon the competitiveness of input and output markets
                   (including local transport services). In other words, the methodology was not
                   entirely appropriate, and really tried to describe dynamic impacts that might
                   result from lower vehicle operating costs in the longer term in the area around
                   the irrigation itself.2
          (vii)    Yet more serious is the omission of any significant analysis of risk and
                   uncertainty in conditions where it must have been quite obvious how modest
                   the overall information base was, and how much was not known about the
                   project’s operating environment. Simple increases or decreases in aggregate
                   benefit and cost flows (plus implementation delays) were all that were
                   investigated through sensitivity testing, even though (for example) risk
                   modeling software was available and being used in other sectors (e.g.,
                   power) in ADB at the time.

6.    In sum, the economic analysis was used almost entirely as a way of justifying the
proposed project rather than as an investigative and design tool.

B.        Economic Analysis at Change of Scope

7.      At the change of scope in 2003, the revised economic analysis centered on the
preferred design option of reservoir construction, main canal reconstruction, and canal
network installation, on the basis of with- and without-sunk costs situation (the sunk costs
being those already incurred by implementing the project to that point).

8.    Some of the main analytical features of what was an extensive and comprehensive
approach include the following:

          (i)      The economic pricing assumptions were repeated, although rice was now
                   valued on an export parity pricing basis (and thus its economic value was
                   lower than at appraisal).
          (ii)     The reservoir construction created an estimated stream of fisheries benefits—
                   at almost half the scale of those from incremental rice production.
          (iii)    Economic losses due to resettlement and/or land loss were identified.
          (iv)     The agriculture producer surplus methodology was repeated for rural road
                   benefits.
          (v)      A number of nonquantified benefits were described but not calculated (e.g.,
                   improved access), although some double counting (e.g., health benefits from
                   increased fish consumption) are mentioned, but would already have been
                   included in the economic valuation of the fish prices reflecting consumers’
                   rational awareness of all benefits.
          (vi)     Benefits from time savings and reduced spoilage at markets were now
                   included in part B benefits (they had not earlier been calculated).
          (vii)    Poverty impact was estimated, although it is not clear if this is the standard
                   poverty impact ratio as usually estimated for ADB projects.
          (viii)   The analysis of unknown outcomes was again restricted to very simplified
                   sensitivity testing (including calculating switching values for a few variables),
                   despite the fact that the seriousness of the lack of real knowledge about
                   conditions in the project area must have become quite obvious, and tools for



2
    It may have been reasonable to qualitatively describe such expected impacts, but to also calculate them in
    relation to a without-project scenario in circumstance when project implementation would be illogical.
48        Appendix 8



                   risk analysis were being routinely and formally recommended for use within
                   ADB.3

9.     Of these features of economic analysis, the one that is perhaps most glaring is that
the analysis of risk was not undertaken at all. A few specific uncertain states and outcomes
may have been described through sensitivity testing, but a more probability-based analysis
centering on a few key variables’ distributions (e.g., scale of scheme development, wet and
dry season mixtures and yields, price of rice, and O&M costs) could have provided
considerable insight into the real sources of concern about the project.

C.        Economic Viability at Project Completion

10.      Ideally, estimation of economic viability at project completion would be based on data
and findings from impact evaluation surveys directly linked to project interventions and
effects.

11.    In fact, partly because the project framework was so weak, the means of verification
for impact indicator measurement were extremely loosely specified (i.e., progress reports,
review missions, benefit monitoring and evaluation surveys repeated for outputs, purpose,
and goals), and at the time of preparing the project completion report (September 2009) no
rigorous or systematic-collected impact data exists upon which to reestimate project viability.

12.     To assess the effectiveness of outcome achievement and the efficiency of
achievement of outputs and outcome, the following types of data would be needed:
(i) agronomic and yield data from crop-cutting on a stratified (e.g., location, crop, variety,
season) sample of irrigation blocks; (ii) crop budget and farm income calculations, based on
yields data, cropping patterns, and any project-induced changes thereof; (iii) income and
expenditure data (again, stratified by location, family poverty status, and household
characteristics); (iv) vehicle operating costs (by type of vehicle) and passenger time savings;
and (v) market wastage and spoilage estimation from traders, wholesalers, and processors.
In addition to quantitative estimates of direct project impact, this would need to be compared
with nonproject (i.e., control group) populations and against the context of other influences
and factors that may have contributed to observed outcomes (e.g., other projects in the area,
government sector policies, more general macroeconomic conditions affecting employment,
incomes, inflation).

13.     A comprehensive impact analysis of the project on the basis of such information and
including a reestimation of the project’s economic internal rate of return is still possible—and
is especially relevant given the delay in physical works construction (being completed only in
2008) and the small number of seasons so far for joint farmer and agency cooperation to
embed itself into stable scheme management. An appropriate time for such work (e.g., in a
performance evaluation report) would be 5 years after completion of construction, i.e., in
2013. Given that the project has proved so different in implementation to what was originally
expected at appraisal (already a decade or more prior to the project completion report), any
estimation of economic viability and explanation of reasons for such is likely to be most
welcome.

14.     Given that the kind of formally derived, quantitative information as just described is
not available, a qualitative assessment of the situation vis-à-vis scale of economic impacts at
project completion suggests the following:

          (i)      Available information from several sources on wet season rice yields
                   suggests a significant productivity and aggregate production impact already.

3
    For example ADB. 2002. Handbook for Integrating Risk Analysis in the Economic Analysis of Projects. Manila.
                                                                                              Appendix 8   49


                  Small-scale, informally sampled crop-cutting exercises in 2007 and 2008 wet
                  seasons organized by Groupe de Recherche et d’Echanges Technologiques
                  (GRET) and the farmer water user community (FWUC) suggest that average
                  yields across the scheme may have risen to some 2.2–2.3 tons of paddy per
                  ha, up from 0.8–1.0 tons prior to the scheme construction. Triangulating this
                  estimate via on-site discussions with individual farmers and FWUC
                  representatives (including some based on traditional tang4 estimates of
                  output) confirm the scale of this increase, i.e., of about 30%–40% increase in
                  average productivity. Yields of around 3 tons/ha are now not uncommon
                  (especially in the more intensively transplanted regimes on the south of the
                  scheme—around SC4 and SC5), although in the sandy areas (to the north—
                  SC1 and SC2, where more broadcasting of seed occurs) 1.3 tons/ha is also
                  found. A slight increase of about 5% in overall average yield was estimated
                  between 2007 and 2008 wet seasons, and the FWUC reports less wet season
                  rice yield variability across plots and farms and over time than previously.

          (ii)    The implication of this kind of average area increase is that something over
                  2,000 ha5 of wet season rice are now each producing about 1.3–1.5 extra
                  tons of paddy than before the scheme construction. This probably represents
                  about 2,000 tons of milled rice (based on a milling percentage of 65%). With
                  the current (late 2009) financial price of milled Thai 5% broken rice FOB (free
                  on board) Bangkok being around $500 per ton, an economic price of rice for
                  Cambodia based on quality adjusted export parity and calculated at the
                  project site value (i.e., net of transport costs to Sisowath Quay and Bangkok)
                  is around $450 per ton. This implies annual gross benefits from wet season
                  rice cropping from the project at around $0.9 million a year. As the
                  incremental expenses on fertilizer (DAP-16-20-0) are typically only modest
                  (and labor requirements—especially for weeding—are probably reduced, the
                  annual net economic benefit flow may therefore be around $0.75 million.
                  Given that average yields are expected to increase significantly in the future,
                  this benefits stream should change commensurately, although it will of course
                  be affected by world price developments.6

          (iii)   Supplementary information from surveys7 suggests that livelihood impacts
                  include physical and financial asset bases, food security, and expectations
                  about the future. These benefits are recorded to be highest among poorer
                  families in villages around the irrigation scheme, i.e., those families most
                  dependent upon agriculture as compared with those with significant
                  nonfarming interests. The survey also suggests great willingness for further
                  agriculture-based livelihood improvements given that food security is now
                  assured, based on activities such as vegetables and pig-raising. (This may be
                  especially true for farmers on the sandier northern soils and for those families
                  with fewer nonfarm opportunities.) The survey data suggest that the biggest
                  income impacts have been on the lives of the poorest quartile, and that nearly
                  all respondents were more optimistic about the future than before the
                  scheme’s construction. Visual evidence of increased building in the scheme
                  vicinity and of more motorcycle ownership abounds, although some of this is
                  of course related to more generalized macroeconomic improvements.


4
     A Khmer measure, 1 tang equals 24 kilograms
5
    Some small areas on the scheme remain unplanted and one village only recently joined the scheme.
6
    Since the project was appraised, the real price of rice has more than trebled (2008) and is now more than
    double what was anticipated at the change of scope analysis.
7
    Centre d'Etude et de Développemetn Agricole Cambodgien (CEDAC). 2007. Toward Livelihood
    Improvement—A Project Impact Evaluation Report. Phnom Penh.
50        Appendix 8



          (iv)     Since the project was implemented the value of land on the scheme has
                   increased significantly; land which used to sell for $150–$200 per ha in the
                   late 1990s was selling for almost 10 times this figure at the height of the
                   recent boom in 2007. Realizable land values are probably best estimated at
                   several times prescheme value, and at least some part of this is due to
                   agriculture productivity increase and production potential.

          (v)      Little evidence can be found that that scale of fisheries benefits approaches
                   what was estimated at change of scope. Some fishing is ongoing from the
                   reservoir, but as nearby rivers are canals are also a source of abundant fish-
                   based protein, no formal or informal evidence for identifiable incremental
                   harvest and/or production from the project investment exists, although there
                   may be an as yet unidentified stock impact.


          (vi)     No formal evidence for vehicle operating costs is available, but local transport
                   fares over project roads have decreased substantially. For example, transport
                   to local markets (e.g., in Kampong Thmor) over 20 km, which used to cost KR
                   9,000 per person now costs around KR 2,000. Journeys that used to only be
                   taken by motorbike are now covered by small taxis and tuk-tuks, and traffic
                   volume on some project roads (e.g., Kvek to Dong Kola) is estimated by the
                   Provincial Department of Rural Development to have increased tenfold. (In
                   areas linked to new rubber development, nearby traffic volume has doubled
                   since 2003.)

          (vii)    No evidence is available regarding market losses and spoilage avoided, but
                   market fee revenues are rising, and the numbers of sellers and periods of
                   activity have both increased at the new market sites (covered and
                   uncovered), indicating an increase in overall economic activity and
                   fundamental viability and likely sustainability.


          (viii)   Intangible benefits are evident in terms of capacity development (e.g., of the
                   FWUC), almost certainly health benefits have resulted from the reduction in
                   pesticide use, general access to social (health and education) services in the
                   area has improved, and forward and backward agriculture linkages have been
                   strengthened as marketed volumes have increased.

          (ix)     A major latent benefit of the scheme construction so far is that its expansion
                   (at least a further 11,000 ha—based on the current reservoir capacity) to (for
                   example) the south—and as was originally intended at appraisal—can now be
                   achieved at low marginal cost. There is scope for private (foreign, if
                   necessary) investment to utilize the presently unused reservoir capacity and
                   pay a fee to the state for such service, thereby potentially capturing a benefit
                   flow for current scheme operating support.8

D.        Summary Analysis Findings

15.    The main conclusions from this review of the project’s economic analysis are
therefore as follows:


8
    Indeed, some draining of the reservoir is already reported to areas other than those covered by project; if so,
    this represents a stream of benefits occurring to nonproject sites and should be investigated during a
    performance evaluation report exercise.
                                                                          Appendix 8   51


(i)     Economic analysis was taken to be cost–benefit estimation alone, and
        neglected wider economic considerations.
(ii)    The emphasis of the economics work was primarily on justifying particular
        investment proposals rather than using analytic tools for in-depth investigation
        and formulation of alternatives.
(iii)   Much more use could have been made of risk analysis tools in a project
        preparation and implementation situation that was particularly prone to lack of
        robust information.
(iv)    Reestimation of the project’s impact and viability is still possible, provided a
        range of data is collected in a timely and methodological fashion after the
        project evaluation report stage.
(v)     Relatively informal evidence suggests that economic benefits from rice
        production are already substantial, and the 40% command area decline (vis-
        à-vis appraisal) has been partly offset by the real economic rice price increase
        in recent years. Benefits from fisheries may have been overestimated, and a
        large range of nonquantifiable benefits which the investment has clearly
        delivered.
(vi)    The economics of the investment under the project would change significantly
        if the scheme were to be expanded on the basis of the newly provided
        reservoir capacity (i.e., its embedded sunk costs mean that the costs of extra
        canals will be relatively minor).
52     Appendix 9



                             SUSTAINABILITY ASSESSMENT

1.      The eventual economic viability of the project is a function of its relatively long-term
sustainability. This is particularly so because its development cost per hectare of irrigation
area commanded has been much higher than expected at appraisal (and thus at completion
the investment looks inefficient), yet a clear benefit stream is identifiable from several
sources and this has the capacity to increase significantly in future, but only if certain
conditions are met. The conditions determining sustainability can be divided into those that
are within the control of project management to affect and those that are not.

A.      Nonproject Circumstances Affecting Sustainability

4.     Some of the issues surrounding conditions affecting project sustainability that are
outside the scope of project management include the following:

       (i)     Commodity price developments—the extent to which the scale of economic
               benefits (and financial returns to farmers) are maintained—will depend
               significantly on commodity price (and especially rice price) developments.
               These are unpredictable and variable; since the project was first considered
               the real price of rice rose almost fourfold and then fell back to about double its
               appraisal price. Current projections are for real prices to fall somewhat in
               coming years, but given the present extent of international interest in
               developing national and private supplies from specific sites this could change.
       (ii)    The competition from nonagriculture activities (e.g., construction, trading, and
               transportation) will determine how many farmers will devote time and
               resources to rice-based and other farming activities. The economic benefits
               stream could well diminish if broader economic opportunities intrude upon
               agriculture’s relative attractiveness.
       (iii)   The benefits stream will be sensitive to climate impacts, and specifically to
               changes in climate patterns. It may be expected that in conditions of both
               increasing drought and increasing floods, which may be anticipated in future
               years, improved water management (i.e., storage and drainage) will be
               beneficial to productivity and production.
       (iv)    The wider macro sector (i.e., agriculture) and subsector (i.e., water resources
               and irrigation) policy environment will also affect how easy it is for farmers to
               make and retain profits from agriculture activities, to gain access to credit,
               and for irrigation management transfer to be possible and facilitated.
               Obviously, the legislation and policies surrounding water resources (e.g., the
               Law on Water Resources Management, 2007) and irrigation (e.g., Circular
               No. 1 of 1999) will create or impede conditions for more participatory
               management and irrigation management transfer.

B.     Project Circumstances Affecting Sustainability

5.     The circumstances within the control of project management that affect sustainability
are of most concern for future decision-making. Benefit sustainability depends in the first
instance upon maintaining the investment in the physical infrastructure of the project.

6.      Regarding the physical infrastructure itself, the key structures requiring inspection
and maintenance (both annual and routine) are (i) the integrity of the reservoir embankments
(particularly the high erosion zones adjacent to control structures); (ii) the degree of rock
protection on the weir spillway and the embankment integrity; and (iii) high erosion zones
adjacent to control structures on the main northern canal, particularly around the secondary
offtake gates and siphon. A detailed operation and maintenance (O&M) manual was
prepared by Lahmeyer International– SMEC Joint Venture (SMEC).
                                                                                   Appendix 9   53



7.    Implementing an O&M plan for the irrigation scheme requires (i) clear delineation of
responsibilities between the managing partners (i.e., state agencies and farmer
communities); (ii) each partner to have the technical capability to undertake the assigned
responsibilities; and (iii) each partner to have sufficient financial resources to allocate to
O&M.

8.      For the definition and delineation of respective O&M responsibilities, the letter of
agreement between Kampong Thom Provincial Department of Water Resources and
Meteorology (PDWRAM) and farmer water user community (FWUC) comprehensively
defines the management tasks by partner and type of infrastructure (i.e., headworks,
reservoir, gates, access roads, and various types of canals and drains). The definition of
responsibilities along these lines has taken the whole period of project implementation to
finalize—mainly because of the limited time since physical works completion and the need to
adequately strengthen the FWUC for water management operation. Now the second aspect
of O&M responsibility definition (i.e., the technical capacity to actually undertake assigned
tasks) has been achieved.

9.      Where problems regarding project sustainability arise is with respect to the financial
aspects of O&M. On the part of state agencies (i.e., MOWRAM, PDWRAM) the question is
not of resources but rather of the actual commitment of adequate resources to project O&M
needs on a regular basis. Experience in Cambodia (and elsewhere in the region) suggests
that the culture of O&M is not fully institutionalized, and that routine maintenance is
especially neglected, resulting in greater (and less economic) periodic maintenance
investments and (more usually) even greater costs incurred in rehabilitation and
reconstruction. For the FWUC the issues are more complex, as the amount of resources
raised from irrigation service fees (ISF) do not fully cover O&M obligations and a shortfall
must be met from external sources (i.e., state agencies, development partners).

10.     Currently, the broad features of the financial dimensions of O&M (as embodied in the
current letter of agreement) for the project seem to be as follows:

       (i)     PDWRAM O&M responsibility costs are estimated at about $183,000 per year,
               those of the FWUC at $87,500 per year;
       (ii)    the FWUC operating costs are presently about $28,100 a year;
       (iii)   ISF revenues are about $10,000 a year at present, and are projected to rise to
               about treble this by 2013–2014;
       (iv)    ISF rates are about KR20,000 per ha at present (about $5 per ha), and will rise to
               about $15 per ha in 2013–2014;
       (v)     ISF collection rates are high in terms of farmers making payments (over 90%)
               and total amounts paid (over 85%); therefore
       (vi)    the FWUC inevitably faces a large financial shortfall in future years, as the
               revenues from ISF paid by the project farmers will only just about cover FWUC’s
               operating costs and not the real costs of physical O&M of irrigation structures.

11.     Determining how this situation will play out in coming years is not possible as (i) the
policy environment is evolving; (ii) farmers’ willingness to pay higher ISF may increase with
several years of success; and (iii) profitable cropping, and commitments from other
development partner and interested parties may be forthcoming. That the situation is
particularly fluid is partly due to the project implementation delays, which meant that the time
before project closing for the embedding of irrigation system management was very limited.
MOWRAM and PDWRAM support for the FWUC will effectively be a matter of policy choice;
however, what is now needed as a matter of some urgency to ensure project sustainability
and maintenance of benefits streams is clarity surrounding O&M financial arrangements.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:11/15/2011
language:English
pages:62