Assessment of Bank assistance in the Post-RAP Period: While Bank assistance during this period closely followed the RAP recommendations focusing on sustainability of irrigated agriculture and improving water delivery efficiency in SGW areas, the achievements were mixed, as explained below.
The OFWM investments were the most successful in terms of intended outcomes, including substantial "water savings", increases in cropping intensities and farm incomes (see excerpts from OED précis below). However, from an institutional development view point the achievements were modest. WUAs were generally non-sustainable mainly because they did not have a continuing responsibility for O&M of the system above the Mogha.
The 3rd On Farm Water Management (OFWM) project Implementation Completion Report (ICR) observed that " For long term sustainability of the irrigation system, participation of farmers in irrigation management is necessary. Their participation could be enhanced if the farmers' organisations have a continuous crucial role in O&M of the system.
They should be responsible for distribution of water and collection of revenue resulting from water charges. In Pakistan's irrigation system, this could be achieved by forming FOs at the secondary canal level ie distributaries/minors."
The drainage investments in SGW areas while solving local water logging problems, faced sustainability and environmental issues:
-- Firstly, besides off-farm drainage these investments also supported investments for on-farm drainage - primarily a private good - without requiring beneficiary contribution to capital cost. This gave the wrong signals to farmers that such investments would continue to be supported by the public sector. Furthermore, it down played the importance of improved water management to reduce the drainable surplus caused largely by over irrigation.
-- Secondly, except for limited investments in tile drainage, most subsurface drainage was based on large capacity tube wells.
This choice of technology while reducing the initial capital cost, resulted in several problems:
(i) farmers could not maintain the large capacity tubewells;
(ii) deeper groundwater being invariably more saline than shallower groundwater, environmentally safe disposal of drainage effluent became a problem;
(iii) local drainage disposal solutions received inadequate attention;
(iv) the focus on vertical drainage, discouraged the development of local private industry for tile drainage (PVC resin and pipes, and contractors specialising in laying horizontal pipe drainage) that has been successfully developed on a large scale in other countries, eg Egypt.
-- Thirdly, the projects involving surface drainage (eg LBOD Stage-1 Project) were not designed to handle storm water flooding nor was a system of flood management (flood warning or alarm system) made a part of the design. This deficiency has emerged as a major issue, particularly in the southern coastal district of Sindh (eg Badin) where recurring severe flooding has occurred on several occasions.
-- Fourthly, most provinces defaulted on covenants requiring increases in water charges. The resulting low recoveries were highly inadequate for O&M, and drainage infrastructure remained the most poorly maintained part of the irrigation and drainage system.
Privatisation of SCARPs in Punjab by replacing government owned and operated large tube wells with community owned and operated small capacity shallow tube wells was perhaps the most successful and path breaking investment supported by the Bank.
Firstly, it greatly reduced the O&M burden of the government thus substantially reducing the O&M cost and recovery gap. Secondly, it broke the myth that water logging and soil salinity cannot be controlled by private and community tubewells without compromising small farmers access to groundwater. Thirdly, it demonstrated that farmers can better meet their irrigation needs if they control the operation of tubewells.
The investments in system rehabilitation no doubt had short term benefits of reducing incidence of canal breaches and solving siltation and erosion in "problem" channels. However, due to the lack of essential institutional changes and adequate O&M, the situation reverted to the pre-rehabilitation situation within 3 to 5 years.
The rehabilitation investments primarily aimed at restoring the system to its original design without any element of modernisation to convert the system from a largely supply driven run-of-the river system to a more demand driven system intended for more modern agriculture. Additional control and flow measurement structures and an O&M regime commensurate with its requirements were not supported as part of these investments.
The latter would have essentially required a more fundamental institutional change with greater farmer participation and incentives as its center piece.
OED OBSERVATIONS: In 1992, OED carried out an ex-post evaluation of two OFWM and two ISRP projects. Excerpts from these evaluations are given below:
-- As approved, the four projects supported some of the most important priorities established in the RAP. But as implemented, they strayed from the program's agreed strategy: - They failed to give highest priority to improvements in saline groundwater areas. In these areas-which have no supplementary well water-the returns to controlling water tables and supplying more surface water are the highest. -They came to be dominated by quantitative targets for watercourse improvement, regardless of the likely effects on water supply, water logging, and salinity.
-- The water "saving" impact of the 9,860 watercourses improved under three of the four projects, plus that from canal lining under CWMP, totals about 2.0 million acre feet (MAF), or 2.3 billion cubic meters... Although this is only a little more than half the savings anticipated under RAP, it is nevertheless, more than a new surface storage dam at Kalabagh would provide (though that would have power benefits as well). This next proposed main storage site would provide an estimated 3.5 million acre feet at the mogha at a cost of $3.5 billion (in a 1985 estimate).
-- Canal rehabilitation and lining work in practice included significant capacity expansion contrary to the agreed program. This apparently occurred to allow the provinces to absorb additional water becoming available from Tarbela dam and to establish rights to that water before a formal allocation agreement took effect in 1991. In areas that could not safely absorb more water, the resulting increases in water logging and salinity have caused serious human and environmental problems.
-- Programme designers had envisaged a farm credit approach, arguing that farmers would find improvements in their watercourses profitable enough to repay loans. But, because of performance problems in the credit system, the improvements relied heavily on construction subsidies.
-- Vested interests and the perquisites of project activities distorted the incentives to participants, just as the efficient management of the system as a whole was undermined by political influence and rent seeking.
-- The bundling of assistance for the four provinces together in these four projects may have been administratively convenient, and clearly facilitates the Bank's wholesaling of development assistance, but is likely to have reduced the overall impact of the assistance.
-- Recent projects have had some worthwhile and widespread poverty alleviation impact, but have also provided at the same time, without any justification, large transfers of public funds to many of the rural elite. Differentiation would permit, among other things, a more efficient allocation of scarce resources, taking relative needs into account.
THE POST-INTER-PROVINCIAL WATER ACCORD PERIOD (1991-2005): The beginning of the 1990s was marked by the conclusion of a long overdue Water Accord for sharing the Indus waters amongst the four provinces in 1991.
A Water Sector Investment Planning Study (WSIPS) was also completed in 1990 to update the RAP recommendations and prioritise investments. The WSIPS emphasised the need for establishing a comprehensive and reliable Data Bank Network for water resources, agriculture, soils, etc to guide investment planning; revitalising institutional capacity in the provinces for investment planning; establishing a sector MIS; improving project approval and review processes; modernising procurement processes; strengthening the local construction and consulting industries; and a training program for institutionalising integrated comprehensive management of water resources.
However, by 1992 it had become clear that the RAP approach was not resolving the overriding problems of the irrigation system which remained in dire straits with problems similar to many other irrigation systems, including waterlogging and salinity, over-exploitation of fresh groundwater, low efficiency in delivery and use, inequitable distribution, unreliable delivery, and insufficient cost recovery system.
It was realised that the RAP approach was not addressing the real underlying causes of the problems Pakistan's irrigation system was facing but rather trying to deal with the symptoms. With this realisation, the Bank stopped new lending in the sector till a far reaching new strategy to address the real causes was agreed with the Government.
In 1994, the Bank completed a major sector study that resulted in the report entitled Pakistan-Irrigation and Drainage: Issues and Options. The key findings and recommendations of this report were:
-- In Pakistan, as in many other countries, government treats irrigation water as a public good, whereas it is a private tradable good, for which markets can operate. Lack of well defined individual property rights and the illegality of sales of surface water severely constrain informal irrigation water markets. Instead of rooting out the barriers to water markets, Government publicly administers irrigation water. Inefficient pricing of water, resource misallocation, rent seeking behaviour, and "illegal" trading is the result.
-- The Government had not even adequately met the requirements of an administered system. It had failed to make budgetary provisions for operations. Moreover, the public body responsible for irrigation maintenance was separate from (and had poor co-ordination with) the agency responsible for revenue collection. In the past, administrative discipline was adequate but it had gradually broken down and the cost of irrigation maintenance had vastly increased. Nor were there any measures available to restore discipline.
-- Economic efficiency in irrigation delivery and use cannot be achieved, because of lack of the right incentives.
-- Unlike on-farm drainage, off-farm drainage is a public good. Thus, off-farm drainage will have to be supplied by the Government. However, the underlying problem of inappropriate institutional framework will require reforms that will ensure autonomy, transparency, and accountability of present institutional set-up for drainage.
-- Any water service that is not a public good should be commercialised and later privatised.
-- Only with market-determined incentives for irrigation and on-farm drainage is a sustained improvement in performance possible. The government needs to remove barriers to a free market in water. Most important, the government will have to draw up enforceable property rights to water, without which any attempt to legalise and commercialise water markets would be futile. Property rights and legalised markets will make the opportunity cost of water transparent, leading to greater efficiency in use.
-- The long-term option for the government will be to define individual water property rights, which are necessary to ensure equity in distribution. This would address the problems of tail-enders (that is, those at the tail end of the system who receive little or no water), while relieving pressure on ground water resources.
-- As a first step toward individual water rights, Pakistan may like to aim for communal rights, which are legally and administratively easier to establish. User organisations can then translate these communal rights into enforceable individual rights of their members.
THE NATIONAL DRAINAGE PROGRAM (NDP) EXPERIENCE: While endorsing, in principle, the main elements of the above strategy, in 1995/96 GoP proposed its own model for implementing the reforms that envisaged replacing the provincial irrigation departments (PIDs) with a three-tier institutional set-up comprising autonomous Irrigation and Drainage Authorities at the provincial levels, Area Water Boards (AWB) at the main canal level and Farmer Organisations (FOs) at the distributary canal levels.
PIDAs were to be established in all provinces while one pilot AWBs was to be established in each province with FOs at the distributary canal level. Supporting legislations in the form of PIDA Ordinances were passed and later endorsed by the Provincial governments as PIDA Acts.
The emphasis was on organisations, not incentives and instruments, however. Water rights and entitlements that were advocated in the Bank's strategy paper were not on the immediate agenda. The Bank accepted the proposed model as a starting point for implementing the reforms as the center piece of the, misleadingly-named, NDP project assuming that a detailed strategy for implementing the reform model and dealing with difficult political and economic issues would be developed during the course of project implementation.
While a detailed evaluation of the NDP implementation experience is beyond the scope of this paper, suffice it to say that relative to its stated objectives and program targets, the implementation performance of NDP remained more or less unsatisfactory throughout and its outcomes have been modest. The main reasons for this unsatisfactory performance included, inter alia:
-- Overly complex and ambitious project design that failed to address the realities of political economy embedded in the profound changes the reforms sought;
-- Lack of ownership, particularly by the PIDs who saw the reforms as a threat to their existence and monopoly on water distribution, and offered immense resistance and inertia to the changes the reforms sought to bring;
-- Lack of champions both at the working level and at the political levels (except in Sindh, and very recently in Punjab following changes in leadership);
-- Focus on organisations not on instruments and incentives;
-- Lack of attention to sequencing, prioritisation and the "rules for reformers".
-- Lack of a detailed strategy for implementing the key elements of the reforms; the PIDA Acts envisaged a "stroke of the pen" conversion of PIDs into PIDAs but lacked important details for implementing the reform strategy. Furthermore, the Acts did not address the fundamental issues of legalising water markets, or clarifying communal and individual water rights.
-- The Bank's underlying assumption that transition plans, severance packages and change management arrangements would be defined and developed during implementation did not materialise due to constant distraction by other implementation issues and battles of turf and jurisdiction among the various participating agencies.
-- Similarly, the expectations that more transparent volumetric measurements, bulk water sales and water charges based on volume would be introduced during implementation also did not materialise as they received far lower priority than the easier to implement rehabilitation works.
-- From 1999 onwards, the prevailing drought and resulting water shortages dominated the water sector debate in Pakistan and the issues surrounding new storage proposals distracted Government's attention away from drainage and institutional reform issues.
In retrospect, a drainage project covering all the provinces and envisaging a major civil works component was not the right vehicle for implementing reforms that sought to focus on improving irrigation service delivery through participatory management, a system of property rights and incentives. A more focused irrigation project would probably have been a more appropriate vehicle.
Notwithstanding this overall unsatisfactory rating, the NDP did yield several positive outcomes. First, it helped to clear the backlog of deferred maintenance of the existing system (some parts of the irrigation and drainage system had virtually no maintenance for several years).
Second, although the institutional reforms component had a mixed performance, the need for the reforms has been endorsed at the highest levels of the GoP and Provinces, and Sindh made commendable progress.
Third, it was instrumental in the completion of key policy and sector studies that have paved the way for introduction of a National Water Policy and a drainage sector strategy for the country. Fourth, the project improved the knowledge base by providing funding for institutions and individual researchers and contributing international experience through study tours and use of international panels of experts.
Fifth, the project promoted farmer participation in the operation and maintenance of the irrigation system. Finally, the project provided a forum for the discussion of long term options for the sustainable development of the Indus River Basin, and as a consequence, has raised awareness of the importance of sound environmental planning and management.
(To be concluded)
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