Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 2481-BD

FILE COPY

BANGLADESH

STAFF APPRAISAL REPORT

LOW LIFT PUMP PROJECT

February 20, 1980

South Asia Projects DepartmentAgriculture Division B

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

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CIJRRENCY EQUIVALENT

The Bangladesh Taka is officially valued at 33 to the PoundSterling. The Pound now floats relative to the US Dollar and consequently,the Taka to US Dollar rate is subject to change. The rate below has beenused throughout this report except where otherwise stated.

US$ = Tk 15.5Tk 1 = US$0.065Tk 1 million = US$64,516

WEIGHTS AND MEASURES

1 acre (ac) = 0.405 hectares1 foot (ft) = 30.5 centimeters1 maund (md) = 37.3 kilogramsI metric ton (ton) = 26.8 maunds1 cubic foot per second (cusec) 0.0283 cubic meters per secondI imperial gallon = 4.545 liters1 barrel (bbl) = 159.0 liters

FISCAL YEAR (FY)

July 1 - June 30

FOR OFFICIAL USE ONLY

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

a-d animal dayADB Asian Development BankBARI Bangladesh Agricultural Research InstituteBADC Bangladesh Agricultural Development CorporationB. Aman Broadcast Aman paddyBDP Bangladesh Diesel PlantBKB Bangladesh Krishi BankBMTF Bangladesh Machine Tools FactoryCB Commercial Bank(s)DAC District Approval CommitteeDOAEM Directorate of Agriculture (Extension and Management)DTW Deep tubewellGDP Gross Domestic ProductGOB Government of BangladeshHP horsepowerHTW Hand tubewellHYV High-yielding varietyICB International Competitive BiddingILO International Labor OrganizationIP Irrigation ProjectIRDP Integrated Rural Development ProgramKSS Village Cooperative Society (Krishi Samabaya Samity)LLP Low Lift PumpMA Ministry of Agriculturemrd mandayMLG&RD Ministry of Land Administration, Local Government,

Rural Development, and CooperativesM&E Monitoring and EvaluationM&P BADC Mechanization and Pump DivisionOCC Opportunity Cost of CapitalO&M Operation and MaintenanceP Present CasePV Present ValueSTW Shallow tubewellSV Switching ValueTAC Thana Approval CommitteeT. Aman Transplanted Aman paddyTCCA Thana Central Cooperative AssociationTIP Thana Irrigation ProgramTORs Terms of ReferenceTTDC Thana Training and Development CenterT&D Taxes and DutiesT&V Training and Visit extension systemUNDP United Nations Development ProgramW With Project Case

W Without Project CaseWD Wheel driveWDB Bangladesh Water Development Board

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

BANGLADESH

LOW LIFT PUMP PROJECT

TABLE OF CONTENTS

Page No.

I. THE SECTOR .............................................. 1

A. Background......................................... IA. Background.1

B. The Agricultural Sector. 1Performance and Near-Term Prospects. 2

Constraints and Potential. 3Policies and Issues. 4

C. IDA Operations in Agricultural Sector. 5

II. THE LOW LIFT PUMP PROGRAM .. 6

A. General ........... ................................. 6B. Pump Requirements. 7

C. Procedures. 9D. Problems of the Low Lift Pump Program .... .......... 10E. Local Manufacture of Diesel Pumping Units .......... 11

III. THE PROJECT AREA ........................................ 11

Location and Area .................................. 11Climate ............................................ 12Topography and Soils ............................... 12Farm Size, Land Tenure, and Population .... ......... 12Agricultural Practices ............................. 13SurfacelWater Resources ........................... 14Low Lift Pump Irrigation ........................... 14Agricultural Supporting Services ................... 16

IV. THE PROJECT ............................................. 17

A. Objectives ......................................... 17B. Project Components ................................. 18C. Detailed Features .................................. 19

Procurement of 3,000 two-cusec LLPs .... .......... 19Procurement of 5,500 one-cusec LLPs .............. 19Procurement of Ancillary Fittings and Spares ..... 20Rebuilding of 5,000 Unserviceable LLPs .... ....... 20Construction and Equipment of BADC Workshops

and Pump Storage Facilities .................... 20

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TABLE OF CONTENTS (cont'd)

Page No.

Procurement of Spare Parts for Existing LLPsin the Project Area ............................ 21

Procurement of Diesel Fuel for Project LLPs ...... 22Provision of Transport for BADC Field Operations . 22Provision of Training Facilities and Training .... 22Water Availability Survey ........................ 23Monitoring and Evaluation ........................ 24Initiation of Credit Sales Program .... ........... 24Review of Institutional Requirements of the MinorIrrigation Sector .............................. 24

D. Implementation Schedule ............................ 25E. Cost Estimates and Financial Arrangement .... ....... 25

Financing ........................................ 29Procurement ...................................... 29Disbursement ..................................... 31Accounts and Audit ............................... 33Environmental Impact ............................. 33

V. ORGANIZATION AND MANAGEMENT ............................. 33

A. Project Organization ............................... 33BADC ............................................. 33

Project Management .................................. 34IRDP ............................................ 35

B. LLP Sales and Rentals .............................. 35Approval of LLP Schemes by the TIP .... ........... 36LLP Rental Rates ................................. 36LLP Purchase Prices .............................. 37Financial Ability of Farmers to PurchasePumps and Pay Higher Rental Rates .... .......... 37

Credit Arrangements .............................. 38Pump Maintenance Procedures ...................... 38

VI. PRODUCTION, PRICES, FARM INCOMES AND COST RECOVERY ...... 39

Cropping Patterns ................................ 39Yields and Production ............................ 41Marketing ........................................ 42Prices ............................................ 43Farm Incomes ..................................... 43Impact on Government Budget ...................... 44

VII. BENEFITS, JUSTIFICATION AND RISKS ....................... 45

Employment Opportunities ......................... 46Economic Analysis ................................ 46Project Beneficiaries and Distributive Impact .... 48Project Risk ..................................... 48

VIII. RECOMMENDATIONS ......................................... 50

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ANNEX A - The Low Lift Pump Program

Table 1 - Fielding of Low Lift Pumps by BADC (FY61-FY79)2 - Costs of Operation of Rented One- and Two-Cusec Pumps3 - Project Pumps, Cusecs, Area Irrigated, and Incremental Production

ANNEX B - The Project Area

Table 1 - Climate Data2 - Size Distribution of Farms3 - Surface Water Balance Sheet--Main River System--Inflows

and Use4 - BADC Fieldings of Low Lift Pumps by District FY74-FY78

ANNEX C - Policy Statement

ANNEX D - The Project

Table 1 - Estimated Total Cost of Project Pumpsets2 - Estimated Cost of New Pumpsets3 - Cost Estimate for the Rehabilitation of 5,000 Pumps4 - Total Cost LLP Rehabilitation Program5 - Estimated Building Costs for Workshop-Stores6 - Thana Workshop Equipment7 - Details of Proposed Thana Workshop Tools8 - Zonal Workshop Equipment9 - Incremental Requirement for Each Regional Workshop-cum-

Diesel Training Center10 - Toolbox for Pumpset Mechanics11 - Estimated Costs of Workshop Equipment, Tools, TooTboxes,

and Spares12 - Tranport Requirement for Project Field Operation13 - Estimated Costs of Transport Vehicles14 - Estimated Costs of Training Component15 - Annual Cost for Local Staff at Regional Training Center16 - Estimated Costs for Water Availability Survey Component

ANNEX E - Estimated Schedule of IDA Disbursements

ANNEX F - Production, Prices, Farm Incomes and Cost Recovery

Table 1 - Project Acreage, Production and Labor Requirements2a - Cropping Patterns--Currently Irrigated Farms2b - Cropping Patterns--Newly Irrigated Area3 - Monthly Labor Requirements for Various Crops4 - Crop Input Requirements5 - Farm Budget Estimates6 - Farm Income Estimates7 - Sensitivity Tests on Irrigation Rent and Net Farm Income

Figure 1 - Estimated Relationship Between Level of Subsidy under SalesProgram and Level of Derived Aggregated Secondary Benefits

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ANNEX G - Benefits, Justification, and Risks

Table 1 - Prices for Financial and Economic Analysis2 - Prices for Internationally Traded Commodities for Economic Analysis3 - Economic Cash Flow

4 - Economic Analysis: Relative Importance of Individual Cost andBenefit Streams and Switching Values (SV) of Cost and BenefitStreams

Figure 1 - Present Values of Base Case Total Incremental Costs andBenefits at Various Discount Rates

2 - Locus of Base Case Switching Values for Total Cost Overrunand Benefit Shortfall

3 - Present Values of Disaster Case Total Incremental Costsand Benefits at Various Discount Rates

4 - Locus of Disaster Case Switching Values for Total CostOverrun and Benefit Shortfall

ANNEX H - Evaluation of Economic and Social Impact: Draft Terms of Reference

Appendix 1 - Social Structure of Irrigation Groups: Variables

BANGLADESH

LOW LIFT PUMP PROJECT

I. THE SECTOR

A. Background

1.01 Bangladesh, with a population of about 86 M and a cultivable areaof only some 22.5 M ac, of which one third is normally flooded annually,presents a critical and complex development problem. The population is poor(per capita income about US$90), overcrowded (1,550 per sq mi and growing at2.7% per year), short-lived (life expectancy at birth is well under 50 years),in many cases unemployed (perhaps 25-30%), and largely illiterate (about 75%).Foodgrain imports of about 1.5 M tons, or about 10% of total requirements,are necessary in a "normal" year to maintain per capita consumption levels.Drought, untimely rains, excessive floods and cyclones periodically bringdisaster; frequently, adverse weather conditions, such as a dry periodin the fall of 1978 (para 1.07), result in a sharp increase in the needfor foodgrain imports.

1.02 Government gives priority to agricultural and rural developmentas the means to benefit the largest number of people. The major objectiveis to attain self-sufficiency in foodgrain production in the shortest possibletime and to increase substantially jute production for export. Specifically,Government aims at increasing the production of foodgrain by 4% to 5% a yearwhich would provide about 18 M tons 1/ by 1984/85. This objective points tothe need to generate without delay a series of quick-yielding, labor-intensiveand low cost projects. The project appraised in this report would have thesecharacteristics.

B. The Agricultural Sector

1.03 Agriculture dominates the Bangladesh economy accounting for 55% ofGDP, 75% of all employment and, directly or indirectly, over 80% of thecountry's exports. About 70% of the agricultural GDP is derived from cropsand the rest from forestry, fisheries and livestock in roughly equal propor-tions. Bangladesh has a gross area of 35 M ac of which about 22.5 M ac areunder cultivation at a cropping intensity averaging 135% in recent years.Rice, by far the most important crop, accounts for about 80% of the croppedarea; jute, the pr ncipal export, for 6%, and a variety of other crops suchas wheat, pulses, oilseeds, sugarcane, and vegetables, for the remaining 14%.

1/ The foodgrain requirement is based upon an IBRD-forecasted population ofabout 100 M by 1984/85 and a GOB-estimated per capita daily allowanceof 15.5 oz/person.

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Agricultural productivity in Bangladesh is among the lowest in the world; theaverage rice yield of about 0.5 ton per ac is barely half of the average forAsia as a whole.

1.04 The mnajor objectives of the Government's agricultural developmentefforts are to achieve food self-sufficiency, create employment for the ruralpoor in order to improve incomes and nutritional standards, and to increaseexport earnings. The Government's strategy for the sector emphasizesstrengthening of rural institutions, improvement of farm input supplies,better utilization of existing irrigation facilities, and further expansionof irrigation facilities through low cost, short gestation, minor irrigationschemes.

Performance and Near-Term Prospects

1.05 During the 1960s, agricultural production grew at an annual rateof 2.5% and foodgrain production at an annual rate of 2.4%. However, bothlagged behind the population growth rate of about 2.8%. As a result, food-grain imports increased from less than 0.6 M tons in FY61 to over 1.5 M tonsin FY70. Due to adverse weather conditions as well as disruptions causedby the war of liberation, production during the early 1970s remained belowFY70 levels, necessitating imports averaging 1.8 M tons per year and account-ing for about one-quarter of the total import bill. In FY78, due to favorableweather conditions, a more effective procurement effort, and the sharplyincreased supplies of fertilizers and other agricultural inputs, foodgrainproduction reached a record 13.1 M tons, some 10% above the 1970 level.Nevertheless, the production fell short of the requirements by 1.6 milliontons.

1.06 Jute production also declined significantly,during the early 1970sand, despite a reversal of the declining trend, the FY79 production (6.5 Mbales) remained below the pre-independence FY70 level by about 9% (see para1.08). The production of a number of minor crops (such as sugarcane, pulses,oilseeds and potatoes) has also remained depressed. Wheat production has,however, more than tripled since FY70.

1.07 Due to acute diesel shortages and unfavorable weather, three poorcrops in a row - the 1978/79 aman and boro and the 1979/80 aus crops - haveresulted in an estimated 7% decline (12.7 million tons in 1979 versus 13.1tons in 1978) in domestic food production in calendar year 1979. Combinedwith a slippage in food aid arrivals, this led to a drop in per capita foodavailability and soaring rice prices. In addition, low domestic foodgrainprocurement, combined with high offtakes under the ration system, led todeclining public food stocks. In contrast to the targeted level of one mil-lion tons, stocks fell to the dangerously low level of-209,000 tons at theend of June 1979. The situation improved somewhat by the import of about280,000 tons of foodgrains between July and December 1979. However, the cur-rent aman crop was not much better than last year's and only 150,000 tonswere procured for food distribution. GOB and WFP have determined that afurther 1.25 million tons of foodgrain imports would be needed by June 1980.

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1.08 The limited data on unemployment and rural poverty in Bangladeshindicate that the progress in these areas has also been unsatisfactory. Arecent survey indicates that the distribution of land ownership in ruralBangladesh is highly skewed and is deteriorating. Landlessness is spreadingand the fragmentation of holdings is reducing more and more farms to below-subsistence size. It is estimated that 50% of rural households are landlessand that only 25% of all rural households now own more than 2 acres, theminimum holding size necessary to provide subsistence income. However, eventhe larger landowners (over 8 acres) would be considered small and poor incountries other than Bangladesh.

Constraints and Potential

1.09 Agricultural development in Bangladesh is constrained by scarcityof cultivable land, limited potential on part of the cultivated land, climatichazards, lack of irrigation facilities, and deficient transportation formoving farm inputs and produce. The major constraint is the heavy pressure ofpopulation on land. Most land holdings in Bangladesh are small and fragmented--a typical holding being about 2 acres split into six plots. This constitutesan obstacle to efficient farm management and makes the organization of coopera-tive irrigation systems difficult. An additional constraint is the agricul-tural tenancy arrangements, under which about 30% of Bangladesh farmersoperate. Because of the customary rental arrangements, the tenant is normallyexpected to provide all of the inputs, but receives only about half of thecrop and has no right of occupancy. Under such an arrangement there isreduced incentive to develop land for irrigation or to adopt improved farmingpractices.

1.10 A number of organizational deficiencies have also adversely affectedgrowth. Generally, farmers in Bangladesh are receptive to proven innovations.Their efforts, however, have been handicapped by the inadequate and unreliabledistribution system for farm inputs, such as HYV seeds, fertilizers and pesti-cides, and by the absence of an effective extension system. Adequate market-ing, processing and storage facilities, as well as rational and efficientcredit policy, have also been lacking. The inability of the various existingagencies and departments to fulfill these key functions is due to weaknessesin planning as well as in implementation. Agricultural planning has generallybeen based on an extremely poor data base, inadequate analysis, and verylittle feedback from operating departments, resulting in unrealistic targets,inflexible and uncoordinated programs, and unexpected bottlenecks duringimplementation. On the implementation side, the weaknesses include excessivecentralization of decision-making, overly cumbersome administrative procedures,inadequately trained manpower, unattractive staff salaries and benefits, andpoorly defined work responsibilities.

1.11 The above constraints can be over-emphasized. Bangladesh has largeareas of highly fertile deltaic soils, a climate suitable for year-roundcropping, and abundant groundwater resources for dry season irrigation. Also,the development of high yielding varieties (HYVs) of rice and wheat, suitablefor cultivation in large areas of Bangladesh even under rainfed conditions,

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has opened up the prospect of substantial increases in production that can bebrought about quickly and inexpensively. The Government has made importantprogress in promoting improved farming technologies--during 1970-78 irrigatedareas increased by 1.2 M ac, fertilizer consumption increased from some280,000 tons to 715,000 tons and high yielding varieties spread from about1.0 M ac to 3.0 M ac. The potential for continued growth remains considerable.

1.12 Further growth in agricultural productivity is a prerequisite formeeting many of the country's other major economic objectives, ranging fromfood self-sufficiency to equitable income distribution and from increaseddomestic resource mobilization to sustained overall growth. The Government'sstated objective is to achieve food self-sufficiency by FY85. At an averageper capita consumption of 15.5 ounces of grain per day, this would requireproduction of nearly 18 M tons by that time. This implies a sustainedannual growth rate of nearly 5% over the record FY78 crop level. This is anambitious target and would be difficult to achieve, particularly in view ofthe likely setbacks during FY79.

Policies and Issues

1.13 The cornerstones of an effective policy for raising agriculturalproduction are: (i) adequate and timely supplies of modern agriculturalinputs and their efficient application; and (ii) attractive input/outputprice relationships for farmers. Given the extent and nature of farm levelconstraints, a longer-term drive to increase farm production will have tocombine efforts to achieve significant progress on a number of fronts includ-ing irrigation, fertilizers, HYV seeds, pesticides, credit and extension.

1.14 Irrigation brings high pay-offs in increased productivity. Theexpansion of irrigated acreage beyond the present 2.9 million ac would resultin direct increases in average cropping intensity, as more acreage would besuitable for an additional crop in the dry season. An expansion of up to atotal of 5.5 million acres is considered to be technically feasible by 1985.Even with the present low crop yields, this would result in about 2.1 milliontons of additional foodgrain output per year. To accomplish this goal, quick-yielding schemes with relatively low capital requirements per acre should havepriority. 1/ Further gains could be made by improving the present low utili-zation of existing irrigation capacity and raising the actual irrigatedacreage to levels approaching the potential command area. This would requireimproved provision of maintenance services, spare parts and fuel for existingpumps by involving the private sector as well as by strengthening irrigationcooperatives.

1.15 If the announced goal of national foodgrain self-sufficiency is tobe met by 1985, rough calculations indicate that between 1.5 and 2.0 milliontons of fertilizer (depending on the incremental yield assumptions) and 4.8 M

1/ Several such schemes have been identified in a recent joint GOB/IBRDreview of the Bangladesh Water Development Board and include subprojectssupported by the First Five Year Plan.

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acres of irrigated land and expansion of HYVs to about 8.0 M acres would berequired. As these inputs are divisible and replicable, the Government wouldbe assured of high returns of its investment in these two areas regardless ofthe actual size of the budgetary allocation to them in any particular year.Finally, greater supply of these inputs will facilitate considerably greaterutilization by the smaller farmers than has been possible in the presentlimited supply situation in which the larger landowners tend to obtain adisproportionate share of the available quantities.

1.16 A substantially expanded program of supplying these inputs wouldnot be feasible on budgetary grounds if the present levels of input subsidiesremain in effect. Neither can their retention be defended in terms of equityconsiderations as the main beneficiaries are not always the smaller farmers.If, as expected, the subsidies are to be gradually phased out in the contextof a program of increased supply, care will have to be taken to maintainincentive relationships between input and output prices through effectiveoutput price support measures.

1.17 At Government's request IDA is working with various GOB agenciesto help prepare a Medium-Term Agricultural Production Plan which would addressa number of the above issues. During the Plan preparation special attentionwill be paid to: achieving the quickest feasible reduction in subsidies toimprove GOB's financial position; the procurement system; marketing and incen-tive prices for foodgrains and other important crops; adequate and timelysupply of fertilizer, diesel fuel, seeds and pesticides; improved supply ofinstitutional credit; better utilization of existing irrigation systems andequipment, expanding investments in low capital intensive irrigation, drainageand flood control works; development of location specific HYVs adapted to thecropping seasons and hydrologic conditions of Bangladesh; strengthening ofextension and supportive applied research; intensified and expanded in-servicetraining; and improved project planning and implementation. To provide ade-quate and timely feedback on sectoral performance and particularly as regardsproduction, farmgate prices and inputs use, the Plan would include establish-ment of monitoring and evaluation cells within appropriate agencies of theGovernment.

C. IDA Operations in the Agricultural Sector

1.18 In addition to assisting in preparation of the Medium Term Agri-cultural Production Plan, IDA is involved in a major program of financingagricultural and rural development. To date IDA has financed 14 projectsin the agricultural sector. Six involve irrigation and the remaining eightthe development of agricultural extension services, agricultural research,jute cultivation, the seeds industry, inland fisheries, grain storage, an areabased rural development program, and drainage and flood control. Of projectsin the irrigation sector, the Chandpur II Irrigation Project (Credit 340-BD,

1972, US$13.0 M), provides flood protection for about 140,000 ac and irriga-tion for about 75,000 ac; the Northwest Tubewells Project (Credit 341-BD,1972, US$14.0 M), irrigation from groundwater for about 180,000 ac; the

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Barisal Irrigation Project (Credit 542-BD 1975, US$27.0 M), irrigation forabout 140,000 ac by low-lift pumping, the Karnafuli Irrigation Project (Credit605-BD, 1976, US$21.0 M), irrigation, flood control-and drainage to 46,000 ac;the Shallow Tubewells Project (Credit 724-BD, 1977, US$16.0 M), irrigationfrom groundwater for about 150,000 ac; and the Muhuri Irrigation Project(Credit 725-BD, 1977, US$21.0 M) provides irrigation to about 35,000 ac andimproved drainage on about 50,000 ac. The implementation of these six proj-ects has involved substantial delays. There have been common difficultiesin hiring of consultants; appointment of project staff; timely release ofbudgetary allocations; approval of contracts, coordination among implementingagencies; and procurement. The Government has taken a number of steps toremedy the most serious bottlenecks, and both IDA and Government have givenincreased emphasis to reguLar monitoring and supervision in order to identifyand resolve potential problems at the earliest possible stage. In addition,IDA is assisting Government: in strengthening key agricultural ministries andagencies, e.g. the Water Development Board (WDB) (see Chapter V) and theBangladesh Agricultural Development Corporation (BADC), through detailedstudies of their organizations and operating procedures. These steps haveproduced improvements in the rate of project implementation and furtherimprovements are expected.

II. THE LOW LIFT PUMP PROGRAM

A. General

2.01 For centuries, Bangladesh farmers have used bucket-lift methods forirrigating a dry-season Boro crop (January to May) on lands near low-lyingponds and perennial streams. However, it was not until the establishment ofthe Water Development Board (WDB) in 1959 and the Bangladesh AgriculturalDevelopment Corporation (BADC) in 1961 that a major impetus was given to thedevelopment of water resources. Currently, irrigation is available for about2.6 M acres: 1.2 M acres by low lift pumps (LLPs), 0.2 M acres by groundwaterfrom tubewells, 0.2 M acres by gravity supply, and about 1.0 M acres bytraditional methods.

2.02 BADC owns almost all the low lift pumps in Bangladesh, which itrents to farmer groups during the Boro season, achieving a fielding of around36,000 in four of the last five years (36,731 in 1977/78). About 80% of thesepumpsets 1/ are 16-18 HP engines directly coupled to centrifugal pumps de-signed to produce a flow of 2 cusecs from a 40 foot pumping head. The other20% are 8-10 HP engines designed to produce 1 cusec from the same head.

1/ Although the word "pump" is commonly used to describe a pumpset (engineand pumps), where necessary the word pumpset is used to avoid ambiguity.

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2.03 About 1.4 M farmers, comprising 12% of rural households, now uselow-lift pumps regularly, each irrigating an average of one acre. Rice isthe main crop irrigated, with many farmers replacing a risky rainfed Aus crop,grown at the very beginning of the monsoon season when rainfall is erratic,by an irrigated Boro crop in the dry season. Others use irrigation to grow aBoro crop in the dry season in lowlands where the depth of flooding precludesa monsoon crop or where only a risky broadcast Aman crcp can be grown.

2.04 Pump groups usually rent the same pump each year and have a semi-permanent command area. They irrigate about 35 acres per two-cusec LLP, wellshort of the potential of the pumps they are operating. The main reasonsappear to be difficulties of management and water distribution problems, andrisk avoidance, i.e. limiting the risk of crop damage should the pump breakdown. The group pays BADC Tk 1,000/year for a two-cusez pump--Tk 600 rental,Tk 300 for a maintenance service and Tk 100 deposit. The pump is obtainedfrom one of BADC's 1,049 distribution points in January and returned afterthe Boro season. The group is responsible for its own organization and pumpfuelling.

2.05 Since 1977 pump groups and individuals have had the opportunityto purchase pumps. Only 61 have been sold, about a quarter of which togroups. This performance contrasts with strong sales of shallow tubewellpumping sets. The reasons for these small sales' numbers appear to befarmers' distrust of the used pumps offered by BADC for sale, problems inobtaining spare parts for which BADC has an import monopoly, high sellingprices compared with current rental charges and the cheapness of BADC'srepair service for its rental pumps.

2.06 WDB has a number of major irrigation schemes in which LLPs are used.The most important are the IDA-assisted, Chandpur, Barisal, Muhuri and Kar-nafuli Projects which, in addition to civil works, and the supply of pumps,involve strengthening of government services and assistance to irrigationfarmers. Typically these projects consist of (a) empoldering an area andinstalling primary pumping systems to control water levels, and (b) rentingLLPs to farmer groups for field irrigation from the controlled surface waterbodies. The schemes are largely independent of the BADC program.

B. Pump Requirements

Current Stock and Pump Life

2.07 In January 1979, BADC's stock of pumps was classified as service-able (working) - 41,720; unserviceable (economically repairable) - 5,550 andcondemned - 7,550; total 54,820. Because of the need to maintain standbystocks to cover breakdowns as well as logistic problems, only about 90% ofthe serviceable stock can be fielded during the irrigation season.

2.08 Most pumps were purchased in the late 1960s - early 1970s. Manyhave been poorly maintained, subjected to poor quality fuel and oil,

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maltreated during operations and often stored in the open without fuel andoil tank caps during the wet season. Others have been damaged by seriousmishandling or discarded because of a continuing lack of spare parts. Thishas resulted in 5-7% of stoDck becoming unserviceable or condemned annuallyin recent years. It is estimated that in the future, without further invest-ment, this rate would increase to 8-9%. It is estimated also that, becauseof the above factors, maximum engine life is mostly around 6,000 hourswhereas a pump working under good conditions (pump-house, clean fuel, propermaintenance, long hours, etc.) should have a life of about 10,000 hours.

2.09 Projections of the BADC pump stock for January 1984 show the stockof serviceable pumps would fall to around 29,000 as many existing pumps becomecondemned or unserviceable. This calculation assumes that before 1984 otherproposed projects financed among others by Kuwait Fund, ADB, Swiss Aid,British Aid would provide ]3ADC with 5,860 new pumps and have 3,000 old pumpsrepaired.

2.10 This decline in the number of serviceable pumps is expected becauseBADC has shown that it is unable to carry out the preventive and remedialmaintenance necessary to maintain all of its pumps in reliable, running con-dition. Although many staff are listed as mechanics, lack of training andfacilities, coupled with procedural problems in obtaining spare parts andhigh staff turnover has limited the Corporation's ability to cope with allits repair and maintenance tasks. GOB recognizes these limitations andproposes to tap the private sector for handling a greater share of theoperation and maintenance task.

2.11 The 1984 need for serviceable pumps is estimated at 44,500 of which90% or 40,500 would be fie:Lded. Assuming that current hydrological data arecomplete any increase in fielding above 40,500 would require major civil worksto take water out of the main rivers to the agricultural land not adjacent tothem (para 2.06). Demand is expected to increase due to increased food andfiber requirements, the continuing profitability of irrigation (para 6.10),and the continuing resuscitation of small waterways and channels such as underthe proposed Small Scale Drainage and Flood Control Project and Bangladesh'sFood for Work Program.

2.12 The projected national shortfall between supply and demand of LLPsin 1984 is therefore estimated at 15,000 pumps, of which the shortfall in theproject area is estimated at 8,000. The project appraised in this reportwould provide 8,500 new LLI's for the project area thus meeting project areademand and allowing the rebuilding of 5,000 unserviceable LLPs to be usedoutside the project area.

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C. Procedures

2.13 Farmers wanting to hire a BADC LLP form a group under the leadershipof a manager, generally a progressive farmer in the area. Pump rental appli-cations are usually submitted in the August preceding the Boro season, butclosing dates are flexible. Each application includes the names and signaturesof all proposed participants, estimated area to be irrigated, a map showing theproposed pumping site, and location and plot numbers of those to be irrigated.In accordance with the Thana Irrigation Program (TIP), the manager obtains theapproving signature of the Union Parishad Chairman, and the application isforwarded to the Thana Irrigation Team (TIT). 1/ TIT prepares a technicalfeasibility report for submission to the Thana Approval Committee (TAC). 2/TIT verifies that a minimum of 22.5 ac per cusec will be irrigated and that,on the basis of crude hydrological data and recent experience, sufficient waterwill be available at the proposed site. TAC considers the TIT report and as-certains past performance, prior adherence to BADC rental rules, and extent ofarrears in short-term credit of the group. A scheme is provisionally approved,if technical evaluation proves favorable, subject to repayment of at least 80%of outstanding short-term loans. TAC recommendations are forwarded to theDistrict Approval Committee (DAC) 3/ which chooses the eventual recipients ofpumps in consonance with district-specific targets established according topast fielding results, BADC serviceable stocks, and GOB plan targets.

2.16 The pump group is generally dependent on the entrepreneurial skillsand influence of the pump group manager to organize the group, process itsapplication, arrange transportation of the pump and supplies, hire and super-vise a pump operator, and provide credit to group members for these and otherexpenses until the end of the Boro season. Pump groups and command areasvary in size, depending on the size of the pump employed, but seem to averageabout 20 ac per cusec (ranging from 3 to 42). Annex A, Table 2 shows theestimated present financial costs of operation of rented one- and two-cusecpumps including allowances for managerial input, payments borne by themanager, time-value of costs prepaid, and risk.

1/ Composition of Thana Irrigation Team: Unit Officer, BADC, Thana ExtensionOfficer, Overseer, Thana Irrigation Scheme, IRDP; Section Officer DTW(BADC); Thana Cooperative Officer.

2/ Composition of Thana Approval Committee: Circle Officer, Development;Unit Officer, BADC; Thana Extension Officer; Thana Cooperative Officer;Section Officer, DTW (BADC); Thana Fisheries Officer; Thana ProjectOfficer, IRDP; Section Officer, Power Development Board.

3/ Composition of District Approval Committee: Deputy Commissioner orAdditional Deputy Commissioner, Development; Executive Engineer (BADC);District Agricultural Officer; Assistant Registrar of CoopertativeSocieties; Project Director, IRDP; Assistant Director of Rural Develop-ment; Subdivision Officer (Home Ministry); Executive Engineer (WDB);Executive Engineer (Power Development Board); Executive Engineer (RuralWorks).

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2.17 When the pump is released from BADC stores, the group must pay the

following fixed charges:

Capacity of LLP Charge (Tk) Per Boro Season

(cusec) Rental Repair Deposit

1 diesel 350 225 100

2 -do- 600 300 1003 -do- 800 375 100

4 -do- 1,200 525 100

2 electric 600 300 100

For maintenance, BADC emplcys mechanics each of whom is expected to service

15 pumps during weekly visits to pump sites throughout the pumping period.

Spares and standby pumps are kept at unit or subunit distribution points.

During the off-season, mechanics clean pumps and replace worn out parts,

while major repairs are performed at zonal and regional workshops.

2.18 At the end of the season the BADC unit officer, in collaborationwith the responsible mechanic, prepares a completion report for each pumpscheme under his jurisdiction. This report covers such items as actual area

serviced by the LLP, number of participants, crops grown, fertilizer applied,

yields obtained, and fuel consumed.

D. Problems of the Low Lift Pump Program

2.19 While the LLP program meets a critical need by assuring an annual

production of an estimated 1.7 M tons of food grains; it has many deficien-

cies. Government is aware that changes are necessary in the organization,

management and policies of the program and intends to make these. Many of the

changes needed would be accomplished in the project proposed in this report.

2.20 The three principal concerns of Goverrment are that:

- LLP life is too short (about 60% of potential) due

mainly to poor maintenance;

- current pricing arrangements under the program recover

only a fraction of Government's costs (about 20% of the

costs of each LLP and its repair) with the consequence

that the subsidy involved is very burdensome; and

- organizational arrangements of, and support for, farmer

groups need to be improved to ensure a fair share of

program benefits for smaller farmers and tenants.

Other concerns relate to the need to improve the overall institutional arrange-

ments for support of minor irrigation development, both low-lift pumping from

surface water sources and tubewells, and to develop the local manufacture of

diesel engines and other pumping equipment.

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2.21 To tackle the three principal problems, Government intends to in-

crease rental charges (Annex C, para 7); to sell new one-cusec LLPs to farmersand farmer groups (para 4.07); to involve the private sector in the import,distribution, sale and repair of LLPs (para 4.36); and to switch to smaller

and more efficient LLPs (para 4.06). On the issue of the organization andsupport for farmer groups, a review of current arrangements and an assessmentof needed changes would be carried out under the monitoring and evaluationprogram (para 4.25). In addition, useful information should emerge from apilot program seeking to improve irrigation group efficiency and beingfinanced under the Northwest Tubewells and Extension and Research Projects

(Cr. 341-BD, Cr. 729-BD). Finally, it is proposed that the Government andAssociation undertake a joint review of the basic institutional requirementsof the minor irrigation sector (para 4.27). The issue of the local manufac-ture of diesel engines and pumping units is discussed in para 2.22.

E. Local Manufacture of Diesel Pumping Units

2.22 Currently all diesel engines for LLPs and other pumping purposesare imported, although one manufacturer, the Government majority controlledBangladesh Diesel Plant (BDP), has been assembling imported West German dieselkits since 1970 and will begin manufacture at end of 1979 of units with about73% of value added locally. BDP has plans to produce 8,000 units in 1980 and20,000 in 1981. Additionally, two local firms have, from time to time, manu-factured pumps. Government is anxious that the dependence of its foodgrainproduction on imported engines, pumps and spares should be diminished. It isalso keen to use the market offered by the agriculture sector for engineer-ing products--primarily pumping equipment--as the basis for the developmentof a domestic engineering industry. Indications are 4that the market fordiesel engined pumpsets, both new and replacement units, could be 25,000-35,000 units annually by the mid-1980s.

III. THE PROJECT AREA

Location and Area

3.01 The project area comprises the five districts of Comilla, Noakhali,Chittagong, Barisal and Patuakhali, including the ten thanas in the ChittagongHill Tracts where LLPs are used, and excluding the 13 thanas containing theChandpur, Muhuri, Karnafuli and Barisal Irrigation Projects (IPs). Comilla,Noakhali, and Chittagong, contiguous districts in the southeast, are well con-nected with Dacca by railways, roads and waterways. Barisal and Patuakhali,contiguous districts in the south, are more remote; one road and waterwayprovides access from Dacca and small water routes are used for internaltransport (Map 14185). The area of the five districts totals 7.3 M ac(Comilla, 1.7; Noakhali, 1.2; Chittagong, 1.7; Barisal, 1.7; and Patuakhali,

1.0 M ac), representing 21% of the total area of Bangladesh. About 4.7 M ac

are cultivated of which about 0.9 M ac are irrigated (0.5 M ac by LLPs and

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0.4 M ac mostly by traditional methods). The area irrigated by LLPs repre-sents about 10% of the net cultivated area which is higher than the nationalaverage of 7%. Moreover, the 1972 Land and Water Resource Sector Study 1/indicated that the project area, particularly Barisal and Patuakhali Districts,has potential for additional LLP fieldings. This potential has yet to befully realized. Hence, these districts have been selected for the project.

Climate

3.02 The project area has three main seasons: (a) monsoon from June toOctober, during which about 80% of annual rainfall is recorded; (b) dry seasonfrom November to February, which has scarce rainfall and lowest temperaturesand humidities; and (c) pre-monsoon season from March to May which has thehighest temperatures and- evaporation rates with occasional heavy thunderstorms.Annual rainfall varies from 90 in (Barisal) to 110 in (Chittagong). Cyclones,originating in the Bay of Bengal in April-May and September-November, period-ically cause severe damage to the coastal area.

3.03 Mean monthly temperatures rise steadily from 70 F in February to850F in April, remain fairly steady around 90 F from May to October, and thenfall to a low of about 60 F in December to January. Mean relative humidityis high throughout the year--ranging from about 60% in February to 90% duringthe rainy season (Annex B, Table 1). Evaporation ranges from 3 inches inJanuary to 6 inches in May.

Topography and Soils

3.04 The project area consists principally of level flood plains on themature delta (Barisal and Patuakhali), active delta (Comilla and Noakhali),and coastal plains (Chittagong). A small area in the Chittagong hill tractsis characterized by a succession of hills and valleys. Most of the soilsare flood plain soils, fine to medium in texture and generally suited forpaddy cultivation. With the exception of the hill tracts, the area is subjectto seasonal flooding, mostly by rain water during the monsoon season; thearea, however, requires irrigation during the dry season.

Farm Size, Land Tenure and Population

3.05 The 1960 Census of Agriculture reported that the project area hadan average farm size ranging from 1.61 ac in Comilla to 3.29 ac in Barisal,compared with the national average of 3.12 ac. The project districts had atotal of 1.7 million farms with an average farm size of 2.20 ac (Annex B,Table 2). At the time of the 1960 Census, about 70% of the farms in thefive districts were small (2.5 ac or less), 25% medium (2.5 to 7.5 ac), 5%large (7.5 ac and over). Small farms accounted for 28.5% of total net culti-vated area; medium farms, 43.5%; and large farms, 28%. Unfortunately, noreliable, comprehensive information is available on changes in size distribu-tion since 1960. However, there has been a relatively large increase in thenumber of rural households compared with the increase in the cultivated area

1/ Bangladesh: Land and Water Resource Sector Study Vol. VII Chapter IV.IBRD Report No. PS13 December 1, 1971.

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during the last 18 years. From this and local enquiries, it is estimated thatthe current average farm size in project districts is 20% to 25% smaller thanin 1960. The Summary Report of the 1977 Land Occupancy Survey of Rural Bangla-desh indicates that nationwide, owner-cultivators comprise 23% of all ruralhouseholds, owner-managers 38%, owner-cum-tenants 32%, and tenants 7%. Whileno project area specific data are available regarding land tenure patterns,sharecropping and land rental appear prevalent in southern Barisal and PatuakhaliDistricts where ownership of large farms by absentee landlords is pronounced.

3.06 The 1960 Census of Agriculture also found that farms were heavilyfragmented; but not all fragmentation is disadvantageous or involuntary.Given the unpredictability of rainfall and flooding patterns, cultivation ofvarious plots at scattered locations and at different elevations permitsreduction of risk of total crop failure and flexibility in cropping patterns,and labor requirements.

3.07 Population. The rural population density in the project area ishigh, averaging 2,400/sq mi of net cultivated area and ranging from 1,675/sqmi in Patuakhali to 3,170 in Chittagong Districts (about 3-5 people/ac ofnet cultivated area). There is an abundance of agricultural labor duringmost of the year, but localized, periodic shortages at times arise during peakperiods of agricultural activity, e.g. Aus and Boro harvest with Aman trans-plantation.

Agricultural Practices

3.08 Cropping patterns vary with micro-climate, land elevation, andannual flooding patterns. Paddy occupies 86% of cropped area in the fivedistricts; jute, 2%; and other crops including wheat, pulses, oil seeds,spices, and vegetables, 12%. The overall cropping intensity averages 149%,ranging from 124% in Patuakhali District to 159% in Comilla.

3.09 There are three paddy crops: Aus, Aman, and Boro. Aus, a cropwith a short growth period, is usually broadcast with the pre-monsoon rainsin March/April and harvested in July/August. Aman is either broadcast (B.Aman) or transplanted (T. Aman) depending on flood depths and water avail-ability. B. Aman, a floating rice with a 220-250 day growth period, is sownabout the same time as Aus and harvested in November/December. T. Aman, witha 150-day growth period, is sown in June/July, transplanted a month later,and harvested in November/December. Boro, cultivated with irrigation (mostlyby LLPs), is sown in December/January, transplanted one month later, andharvested in May/June.

3.10 Of the three rice crops, Aman is the most important since it accountsfor 54% of the crop acreage (T. Aman 42% and B. Aman 12%) and commands highermarket prices because of its finer quality and preferred varieties. Because ofuncertain rains, disease, limited fertilizer use, and high degree of lodging,yields of local Aus and B. Aman are low compared with HYV Boro and T. Aman.Without reliable supplementary irrigation to overcome drought during floweringand ripening stages, farmers are reluctant to invest heavily in fertilizer andpesticides for T. Aman, either local varieties or HYV. Similarly, lack ofproper flood control and drainage hampers expansion of dwarf HYV Aman. TheBoro crop, however, encounters fewer natural hazards but depends on reliable

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water supply. Accordinglyr, where fresh water is available during the dryseason, HYV varieties (e.g. IR-8), highly responsive to fertilizer, are grownas a Boro crop. HYV Boro currently yields an average 35-40 md of paddy per acbut is capable of much higher productivity with recommended fertilizer levels.The most common cropping pattern in the project area is T. Aman followed byHYV Boro, where irrigation is available, or by some rainfed Aus, if not.Because of time constraint:, farmers can grow at most two paddy crops per year,T. Aman and Boro or Aus and T. Aman. If B. Aman is grown, only one paddy cropis generally possible. Dry season pulse and oilseed crops are also grown forhome consumption after T. Aman with residual soil moisture. B. Aman and juteare important only in Comilla District and to a limited extent in Noakhaliand Barisal Districts. Generally, these crops neither require irrigation norfollow irrigated Boro.

Surface Water Resources

3.11 There are two main surface water sources for dry season irrigation:(a) the main Ganges-Brahmaputra-Meghna river system, and (b) ponds and otherstreams. These other streams are the principal water source for the Chittagongand eastern Noakhali Districts, while the rest of the project area lies on themain river system. The interface of saline and fresh water moves northwardfrom the Bay of Bengal to the periphery of the project area during the dryseason (map 14184). However, in the peripheral area, farmers pump sweetwater above the salt water wedge and during high tides.

3.12 An estimated water balance sheet of the main river system for thepresent (1978), medium-term (1984), and long-run (2000) is presented in AnnexB, Table 3. Against total. in-flows of 222,000 cusecs during the low-flowmonth of March, estimated withdrawals in both India and Bangladesh would totalonly 53,400 cusecs in 1978 and 58,600 by 1984. This indicates that during theproject's life, this project and others due to be implemented would havenegligible effect on the flow in the main river system. To prevent localizedoverexploitaiton of surface water resources by LLPs, TIP has been and wouldcontinue controlling the number and capacity of LLPs fielded and pumpinglocations on the various branches of the river system (see paras 4.23-4.24).

Low-Lift Pump Irrigation

3.13 Introduction of small pumping units has been the key factor inexpanding dry season irrigation of Boro from 1 million ac nationwide in FY61to about 2.7 million ac in FY78 (para 2.01), with resultant production of Bororice increasing from 0.145 M tons in FY61 to 2.24 M tons in FY78. The Borocrop currently accounts for about 17% of total rice production compared with5% in FY61. About 1.4 million ac are irrigated by LLPs, most of which aresupplied under BADC's LLP rental program; about 0.5 million ac of these arelocated in the project area.

3.14 BADC Facilities. BADC operates an LLP rental service in 82 ofthe 86 thanas in the project area from 82 thana (unit) and 239 sub-unitdistribution points. During the 1977-78 season, 14,850 pumps were rented(3,410 in Comilla; 1,190, Noakhali; 3,610, Chittagong, 4,550, Barisal; and2,090, Patuakhali District:s (Annex B, Table 4)) involving the participationof about 400,000 farmers.

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3.15 Most of BADC's distribution points are rented facilities; these aredeteriorated and lack sufficient space and equipment for pump repair. Newer

workshops have been constructed in 50 of the 82 units, but these also lack

equipment and tools. BADC is currently establishing six zonal workshops andtwo regional workshops to handle major repair work in project districts.While some heavy workshop equipment is being installed, basic engine testingand repair equipment is insufficient. BADC's transport in the project areais also limited (about 40% was operational in 1978). Inadequacy of service-

able transport constrains movement of supervisory staff and mechanics, andinhibits their effectiveness in gathering data for pump allocations, transfer-ring pumps and spares, and servicing fielded LLPs (see paras 4.12-4.15).

3.16 BADC Organization and Staffing. Six executive engineers (regionallevel) of the BADC Mechanization and Pump Division (M&P) in the project arearun the LLP program. Except in Barisal, the BADC region corresponds directlyto district boundaries; Barisal District, however, is divided into two regions--

Barisal and Bhola Island. There are two superintending engineers (SE) respons-ible for the project area: (a) the first at Comilla is responsible for

Chittagong Circle (project area regions of Chittagong, Noakhali and Comilla,plus Sylhet); and (b) the second at Barisal is responsible for Barisal Circle

(project regions of Barisal, Bhola and Patuakhali, plus Khulna and Jessore).The six regions in the project area are divided into 21 zones at which assis-tant engineers are posted. Within the zones are 82 units (thanas) in whichunit officers are in charge. In units where the number of pumps exceeds 200or in remote areas, subunits have been established. BADC engineers areprincipal members of TIP committees at both the thana and district levels.

3.17 Almost all pump maintenance and repair is currently done at-siteor at distribution points. However, it is evident from the large number ofunserviceable and condemned pumps that BADC's maintenance and repair servicehas been inadequate for the following reasons:

(a) mechanics are poorly trained and are handicapped by lackof transport facilities and proper tools.

(b) spares are often not available;

(c) thana facilities lack support from zonal and regionalworkshops; and

(d) staff lacks incentives and proper supervision.

3.18 Spare Parts and Fuel. Spares are centrally procured and distri-buted against indents submitted by field staff. The general lack of spares

at distribution points results from both limited resources and poor inventorymanagement. These problems are aggravated by the stock of many makes of enginesand pumps at each distribution point. Considerably more resources are cur-rently being allocated for spares through bilateral aid, and with assistancefrom UNDP/ ILO, standard inventory management procedures are being introduced.The latter effort will be strengthened by consultants to be financed underthe IDA Technical Assistance Credit.

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3.19 The majority of diesel fuel for pumpsets is supplied by BADC. Fuelshortages have been frequent, causing interruptions to pumping and subsequentyield loss. The risk of fuel shortage is one of the factors causing farmersto cover sub-optimal areas with their pumpsets.

3.20 Training. Under the UNDP/ILO Project, BADC has begun effective in-service training for project area mechanics at Chittagong and Barisal. Since1977, BADC has run two-week courses for pump group managers and operators atthana headquarters involving training for about 1,700 participants annually.Instructors in these sessions are skilled foremen or head mechanics.

Agricultural Supporting Services

3.21 Ministry of Agriculture (MA) is responsible for agricultural researchand extension, and through BADC, for procurement and distribution of agricul-tural inputs. The Ministry of Land Administration, Local Government, RuralDevelopment and Cooperatives (MLG & RD) oversees the Integrated Rural Devel-opment Program (IRDP), cooperatives, and TIP. IRDP at present covers about60% of the thanas in the project area.

3.22 Fertilizer Supply. Over half the national fertilizer supply hasbeen imported in recent years. Although demand for fertilizer has growndramatically over the past 15 years (from 50,000 tons in FY63 to over700,000 tons in FY78), present use remains significantly below recommendedlevels. The project area accounts for about 32% of this total demand. BADCdistributes all fertilizer to thanas where it is retailed by private dealersat fixed subsidized prices. To remedy supply deficiencies and to stimulatelocal manufacture, GOB has taken action to recondition existing plants andto construct a new plant at Ashuganj (Credit 527-BD). Additionally, to helpsatisfy FY80 fertilizer requirements, IDA has approved a US$25 M FertilizerImport Program Credit, and the EC has granted a US$25 M Special Action Credit.The problem of inadequate storage is acute but is being addressed through anational program to construct 120,000 tons of storage (50,000 tons throughUSAID).

3.23 Plant Protection. BADC procures pesticides, and the Plant Protec-tion Division of the Directorate of Agriculture (Extension and Management)(DOAEM) handles storage, distribution, and application recommendations.Before 1974, pesticides were supplied free which resulted in wasteful andinefficient use. Since then, a 50% subsidy reduction has curtailed somewastage, but farmers' knowledge about types, dosages, and use of pesticidesremains inadequate. Application of pesticides is not yet extensive, andtherefore supplies received through bilateral aid are considered adequate tomeet current and near-term demand.

3.24 Agricultural Research. The Bangladesh Agricultural ResearchCouncil has responsibility for research coordination. The Bangladesh RiceResearch Institute, in cooperation with the International Rice ResearchInstitute in the Philippines, conducts research on paddy improvement andproduction techniques and provides training for extension staff and subject

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matter specialists. 1/ The Bangladesh Agricultural Research Institute (BARI)

specializes in other crops such as wheat, pulses, and oilseeds.

3.25 Agricultural Extension Services. DOAEM, the principal agency deal-ing with agricultural extension, fields about 750 extension agents within theproject area or on average one agent per 2,200 farmers. Through the years,

the extension service has proven ineffective because:

(a) its programs have been obsolete and diffuse;

(b) technical advice given often lags behind research findings;

(c) staff is handicapped by poor training, transport, housing,

and instruction materials; and

(d) extension workers are frequently diverted to non-agriculturalwork (e.g. census and statistical reporting).

GOB has recently taken steps to strengthen its extension program. Amongthese are progressive in-service training for extension officers and intro-duction of the "Training and Visit" (T&V) system. GOB intends to replicate

countrywide the T&V system started under the Extension and AgriculturalResearch Project (EARP)

3.26 Agricultural Credit. Since 1971, GOB has attempted to expand agri-cultural credit; however, institutional credit remains unavailable to the vast

majority of farmers. About 85% of agricultural credit is currently obtainedfrom non-institutional sources (money lenders, traders, friends, and relatives). 2/

The remaining 15% flows from agricultural credit banks (BKB, Bangladesh JatiyaSambaya Bank, and the six other nationalized commercial banks). To encourage

credit use, in 1977 GOB authorized a special credit of Tk 1,000 million forfarmers cultivating three ac or less at 12% interest. Additionally, under the

Second Technical Assistance Credit (Cr. 622-BD), IDA is financing a study to

review the agricultural credit subsector and recommend reforms.

IV. THE PROJECT

A. Objectives

4.01 The principal objective of the project would be to ensure that suf-ficient numbers of low-lift pumping units (LLPs), together with appropriate

1/ It has four substations for rice research, one of which is located atComilla.

2/ Source: Bangladesh Bank, Agricultural Credit Study Project, Phase II

Report, Nathan and Associates, March 1978.

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spares and supporting services, would be available to farmers and groups of

farmers to exploit the surl-ace water resources of the project area. By the

end of 1983, an estimated 1.9,000 LLPs are projected as being needed in the

project area excluding those required for existing or planned major irrigation

schemes. To ensure availability of the 19,000 units the project would finance

procurement of 8,500 new LLPs, the balance would be LLPs owned by BADC and

expected to be serviceable at that time. The project would also finance the

rebuilding of 5,000 existing but unserviceable LLPs that would be replaced by

the new units. These rebuilt LLPs would be deployed by BADC outside the

project area thereby meetirng in part the needs for LLPs of other areas of the

country.

4.02 By its actions the project would assure the continued provision of

suitable pumping capability to 10,000 existing farmers groups; permit the

establishment and equipping of an additional 3,500 farmers groups; and pro-

vide improved arrangements for the support and servicing of these groups.

4.03 Other important project objectives would be the introduction of

smaller capacity and more efficient LLPs, the introduction of a sales and

credit scheme for LLPs and, for the first time, the involvement of the

private sector in the distribution, sales and servicing of LLPs.

4.04 As the project would involve changes in existing policies that would

be both of a sectoral and project nature, a draft policy statement for the minor

irrigation sector has been prepared by Government and agreed with IDA at nego-

tiations (see Annex C).

B. Project Components

4.05 The project would involve:

(a) procurement of 3,000 two-cusec LLPs; each comprising a

10-12 hp diesel engine attached to a centrifugal or mixed

flow pump designecd to deliver a 2-cusec flow against a

total head of 30 ft;

(b) procurement of 5,5,00 one-cusec (nominal) LLPs; each com-

prising a 6-8 hp dliesel engine attached to a centrifugal

or mixed flow pump designed to deliver a 1.3 cusec flow

against a total head of 30 ft;

(c) procurement of spare parts and ancillary fittings for the

8,500 new LLPs, and spare parts needed to rebuild 5,000

existing but unserviceable LLPs;

(d) rebuilding 5,000 e!xisting but unserviceable LLPs;

(e) construction and equipment of new BADC workshops and pumpstorage facilities;

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(f) procurement of spare parts needed for existing LLPs in theproject area;

(g) supply of incremental diesel fuel for project LLPs;

(g) provision of transport for BADC field operations;

(i) provision of training facilities and training for BADCand private sector pump mechanics and for pump operatorsand pump group managers;

(j) implementation of water availability surveys and themonitoring and evaluation of the project;

(k) initiation of a program of credit sales for LLPs involvingboth BADC and the private sector; and

(1) review of the basic institutional requirements of the entireminor irrigation sector.

The project would be carried out over the four years 1980 through 1983. Theprincipal Government agency involved would be BADC, see Chapter V.

C. Detailed Features

Procurement of 3,000 two-cusec LLPs

4.06 The 3,000 two-cusec LLPs would be required to replace 1,790 condemnedtwo-cusec units and to replace 1,210 unserviceable but repairable units. Thenew units would be rented out to farmers' groups in the Comilla, Noakhali andChittagong Districts where most units operate at a total dynamic head of 28ft. Existing two-cusec units are designed to pump against a 40 ft head andthus are over-powered and wasteful of fuel. The new units would be designedto pump against a 30 ft head and their 10-12 hp diesel engines would be lowerpowered than the 16-18 diesels now employed. Engines would be manual start-ing, four stroke, and with forced oil lubrication for all bearings and jointswith splash lubrication of piston pins. Pumps would be of mixed flow or cen-trifugal design and would be flexibly coupled to the engines. The LLP unitwould be designed for outdoor operation and mounted on a sturdy trolley. Theaverage cost of a basic two-cusec LLP is estimated at US$1,700 includingduties and taxes.

Procurement of 5,500 one-cusec LLPs

4.07 Unserviceable two-cusec LLPs would be replaced by 3,787 new one-cusec LLPs and the remaining 1,713 of the 5,500 new one-cusec units wouldbe provided to new pump groups. All 5,500 LLPs would be sold to individualfarmers or farmer groups, see Chapter V. The one-cusec LLPs would be soldmostly in the Barisal and Paluakhali districts where the area irrigated byexisting LLPs exceeds 25 acres in only 10% of cases and where the average

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total dynamic pumping head is only 19 ft. The existing two-cusec units are

grossly overpowered for such duties. Since some of the one-cusec pumpsets

would be used where the puLmping head is greater than 19 ft and to provide

flexibility for use with longer delivery pipes, the units would be designed

for a total dynamic head of 30 ft using 6-8 hp engines. The general specifi-

cations for the one-cusec unit, except for power, would be as for the two-

cusec units described in para 4.06. The average cost of a basic one-cusecLLP is estimated at US$800 including duties and taxes.

Procurement of Ancillary 'ittings and Spares

4.08 Each LLP would be procured with a standard set of spares. Ancillaryfittings would be procured separately for each LLP comprising 30 ft totallength of suction pipes and 4 ft of delivery pipe, a foot-valve, bends, and

fittings. Annex D, Tables 1 and 2 detail cost estimates for new LLPs proposed.

Including taxes and duties the costs are estimated at: Fittings, two-cusec

US$260; one-cusec US$220; standard set of spares two-cusec US$460; one-cusecUS$240. Spares would also be procured to permit the rebuilding of 5,000unserviceable two-cusec LLPs.

Rebuilding of 5,000 Unserviceable LLPs

4.09 The project would include rebuilding of an estimated 5,000 unservice-able, but economically repairable two-cusec LLPs. Once rebuilt, these LLPs

would be deployed elsewhere outside the project area according to BADCrequirements. It is estimated that 3,200 would replace unserviceable and

condemned LLP while the remaining 1,800 would be provided to new rentalgroups. Annex D, Tables 3 and 4 present cost estimates of the rebuilding

program. Rebuilding costs, including taxes and duties on spares, would total

an estimated Tk 6,389 (US$412) per two-cusec pump, equalling about 24% the

cost of a new two-cusec LLP in 1979 prices (Annex D, Tables 2 and 3). As aresult, BADC would derive an expected four years additional life from this

equipment, 57% of the anticipated life of a new pump.

Construction and Equipment of BADC Workshops and Pump Storage Facilities

4.10 Currently there are 82 thana-level (unit) and 239 sub-unit distri-bution centers in the project area from which BADC LLPs are released to

approved farmer groups and at which pumps are serviced and stored during theoff-season. Even though these facilities are intended to provide the firstline of defense for maintenance, only 50 thana-level outlets have separate

workshop facilities. Hence, they lack the equipment and tools needed for

satisfactory work. Most sub-unit distribution points are small, rented

godowns lacking adequate space for indoor pump storage and servicing. Conse-

quently, pumps are usually scattered outside and exposed to rain, sun, and

dust.

4.11 To strengthen BADC's servicing capacity, the project would include

construction of 50 additicinal thana-level and sub-unit storage and workshop

facilities. Reflecting pump requirements, the approximate distribution ofthese new structures would be: Barisal (14), Patukhali (6), Bhola (8),

Chittagong (10), Noakhali (3) and Comilla (9). Each building would be about

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25 x 80 ft with concrete flooring, corrugated iron roofing and siding inthe storage area, and concrete roofing and brick walls in the workshop andoffice section. An estimated one acre of land would be required at eachsite. Annex D, Table 5 provides cost estimates of workshop buildings includ-ing land acquisition. Each unit is expected to cost about US$26,000 forbuilding and US$4,000 for land acquisition.

4.12 Country-wide, BADC currently operates 1,049 pump distribution points(350 thana-level and 699 sub-unit level) at which minor repairs and routineservicing are performed. In the project area an estimated 100 thana work-shops lack the necessary tools and equipment for proper servicing and repairs.Without improvement project investments in LLPs would be jeopardized, conse-quently these deficiencies would be rectified through the provision of toolsand equipment listed in Annex D, Tables 6 and 7 and involving a cost of aboutUS$18,000 per workshop.

4.13 BADC is establishing six zonal units in the project area for engineand pump overhauls. No zonal workshop is yet in operation; five are underconstruction (Comilla, Brahaman baria, Barisal, Bhola and Patuakhali) and oneremains in the planning stage (Dohazari). These zonal facilities are expectedto be completed by the end of 1979. Insufficient provision has been made byBADC for testing equipment for fuel injection systems and hand tools. Thesewould be provided through the project as specified in Annex D, Table 8 at anestimated cost of US$46,000 per zonal workshop.

4.14 To rebuild engines and manufacture some spares, BADC is setting upregional workshops. At present, such regional units are in operation only atChittagong and Dacca. Incremental equipment needs for these facilities aresimilar to those for zonal workshops with the addition of valve seat refacersand other rebuilding equipment. Under the project, the Dacca, Chittagong,and Barisal regional workshops would be equipped as outlined in Annex D,Table 9 at a cost per workshop of an estimated US$74,000.

4.15 Mechanics posted at thana-level and sub-unit distribution pointscurrently lack basic tools to perform proper servicing of LLPs at-site androutine maintenance at station. This is a major factor in current pooroperating efficiency and premature unserviceability/condemnation of BADCLLPs. To remedy this problem, field mechanics in the project area would besupplied with a total of 1,000 toolboxes, each containing both metric andBritish sizes. Proposed toolbox contents and costs are presented in Annex D,Table 10. A unit cost of US$200 is estimated.

Procurement of Spare Parts for Existing LLPs in the Project Area

4.16 To improve availability of spares in the project area, an estimateof spares needed during the project period has been made and funds for thispurpose provided under the project. Costs of spares average US$80 for each ofthe 16,400 existing serviceable LLPs in the project area. Annex D, Table 11summarizes estimates for workshop equipment, tool, toolboxes, and spares.

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Procurement of Diesel FueL for Project LLPs

4.17 To ensure that project pumpsets would not be stopped through fuel

shortages, the project would meet the diesel fuel requirement for 13,500 new

and rebuilt one and two cusec LLPs during the four-year implementation period.BADC would purchase dieseL oil from the Bangladesh Petroleum Corporation for

distribution to farmers. An assurance was obtained that GOB would make diesel

fuel available for project pumps over the four-year development period. It is

estimated that 190,000 bbl costing about US$8.5 M (@ US$33.60/bbl) would berequired for all project Ipumps.

Provision of Transport for BADC Field Operations

4.18 BADC transport in the project area consists of 50 units, only 22

of which are operating (8 inspection vehicles, 7 trucks and 7 tank trucks).This is inadequate, and BADC staff are forced to resort to public transport,often not easily available. As a result, farmer groups are often left totheir own devices, and BA)C's effectiveness is limited. Under a recentlyapproved financial grant from Switzerland, BADC mechanics nationwide will be

supplied with 3,500 bicycles to improve mobility for at-site maintenance 1/.While these should alleviate transport difficulties for mechanics, supervising

officers would still face constraints. For officers posted at thana-level andsubunit distribution poinlts the project would include 249 small motorcycles(90 cc) to be sold to staff on a "hire purchase" basis. Responsibility formaintenance would rest with the owners who would receive monthly transportallowances sufficient to cover these expenses. In thanas where water trans-port is more convenient, lnits and sub-units would receive small outboardmotorboats. Several inspection vehicles (pickups, station wagon, inboardmotorboat, outboard motorboats) would be provided additionally for engineer-ing and controller staff. To improve routine operation and servicing further,

the project would include 15 trucks, 10 tank lorries, a tugboat, two barges,

and spares. A detailed list of vehicles required and prospective recipientsis provided in Annex D, Table 12. Annex D, Table 13 gives cost estimatesfor vehicular needs.

Provision of Training Facilities and Training

4.19 While all BADC lprofessional staff are required to have appropriatequalifications from recognized technical and vocational institutes their

training often is limited in practical application. To correct these weak-nesses, BADC, with external assistance, has begun an in-service training pro-gram nationwide. Despite a number of problems the UNDP/ILO Bangladesh Pumps

Training and Maintenance Program, initiated in 1975, has proven quite success-ful. The Program includes LLP and tubewell engine repair and maintenancecourses for BADC mechanic;s taught by four expatriate diesel trainingspecialists with counterpart staff of four BADC regional workshops. However,training centers currently in operation have virtually no teaching aids or

1/ Agreement between the Government of the Swiss Confederation and theGovernment of the People's Republic of Bangladesh, signed September 14,1978 under UNDP/ILO Project.

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equipment/tools; and although attached to BADC workshops, programs have littlecontact with workshop operations. Furthermore, living quarters and classroomsare inadequate.

4.20 The UNDP/ILO Program is scheduled for completion in FY80. The pro-ject would continue the mechanics' training program and expand it. Trainingcenters at Chittagong, Barisal, and Dacca would be upgraded to process about4,000 mechanics over the four-year project implementation period. Each centerwould be provided with classrooms, training workshops, dormitory capacity for60 trainees, teaching aids, and vehicles. Each training site would be staffedwith local personnel and an expatriate diesel training specialist while anexpatriate mechanical engineer would serve all three centers. Trainees wouldreceive a Tk 10 per diem allowance during each 90-day session. The contractfor the expatriate specialists, totalling 150 man-months and costing an esti-mated US$9,000 per man-month, would include training of local counterpartsto take over full responsibility to continue the program after the expatriateservices have ended. During the transitional period of transfering the salesprogram to privated dealers, special arrangements would be made to permitprivate mechanics to receive training at the centers.

4.21 BADC is also currently offering mechanical training to pump groupmanagers and operators during the off-season. The syllabus covers basicdiesel engine operation and maintenance. Courses, lasting 10-13 days, aretaught by skilled BADC foremen or head mechanics. The program attempts totrain 6,000 pump group representatives per year at thana-level workshops andadjoining Thana Training and Development Centers (TTDC). A Tk 10 per diemis also provided to these trainees.

4.22 The project would expand the manager-operator training program toreach an additional 15,000 participants over the implementation period.One-month courses would be offered from July to September with about 20students per batch. Equipment supplied to thana-level workshops would beutilized for such classes. Annex D, Table 14 summarizes the total costs ofthe project's training component: civil works, equipment, vehicles, andtechnical assistance. Submission by BADC of a work program for the trainingcomponent, providing details of civil works, vehicles and equipment procure-ment, and technical assistance, would be a condition of credit effectiveness.

Water Availability Survey

4.23 In many areas, expansion of LLP fielding is curtailed by limitedwater resources. Based on crude hydrological data and rough estimates, LLPfieldings nationwide can increase by no more than about 9% above FY78 levels(36,700 pumps) without investment in civil works to enable multi-level pump-ing such as under the Chandpur project, see para 1.18. _If Bangladesh is torealize incremental LLP irrigation, a more systematic, comprehensive database must be established and geographical areas delineated where pumping maybe expanded and where already exploited water resources may be tapped moreefficiently.

4.24 Recently, BADC formed a Survey and Investigation Division at Daccato collect such data and estimate the maximum potential for LLP fieldings.

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Although the Division has been staffed, it currently has no transport and thislimits its ability to undertake field investivations. The Division's work isof great importance because it was established to act as the central supportunit for BADC participaticon on TIP committees approving LLP allocations. Theproject would strengthen the Division by provision of consultarts, transportand equipment. During the! first project year, all information available onwater resources and use would be collated and analyzed to determine data defi-

ciencies. Hydrological irnvestigations then would be made as required to esti-mate pump fielding potential. These estimates would be updated annually toreflect changing water source conditions and any incremental civil works. Theconsultants, two water resources engineers and a legal specialist costing anestimated US$360,000, would assist the division in the planning of the surveyincluding the preparation of duty descriptions for officers and preparation ofstandard procedures for BADC field staff in determining the limit of fieldingto optimize water use in the region. Annex D, Table 16 presents cost estimatesof consultancy services, vehicles, and equipment for BADC's Survey and Investi-gation Division. BADC has agreed with IDA on the Terms of Reference for thethree consultants.

Monitoring and Evaluation 1/

4.25 Under the project a monitoring and evaluation (M&E) unit would beestablished within BADC to monitor the project's progress including evalua-tion of its economic and social impact. This unit would be under the super-vision of the Project Dire!ctor. An amount of US$150,000 would be providedthrough the project for the M&E unit's activities. Its tasks could be per-formed by unit personnel, or by a contracted independent development insti-tute or private consulting; firm (or individual) as considered appropriateby the Project Director.

Initiation of Credit Sales Program

4.26 BADC would be responsible fcr initiating the sales program of onecusec pumpsets to individual farmers or farmer groups, on a cash or creditbasis. In the first year of project implementation, BADC would procure 1,500one-cusec units (para 4.36) for the sales program. The units would be pur-chased by farmers with cash or credit. The selling price would be not lessthan 60% of the capital ccst of the pumpset (net of taxes and duties) whichwould average about US$530 per set (i.e. equivalent to a subsidy of 40% ofthe capital costs). In the second year of project implementation the salesof pumps would be through private dealers who would be licensed to importLLPs. Details of the sales program are given in Chapter V and procurementdiscussed in para 4.36.

Review of Institutional Requirements of the Minor Irrigation Sector

4.27 BADC has the prime responsibility for the development of the minorirrigation sector - basically through sponsoring and providing technical

1/ Draft Terms of Reference are presented in Annex I.

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support for tubewell and low lift pumping. However, as discussed in para5.01, BADC has many and varied responsibilities which are rapidly expandingand creating heavy pressures on the Corporation's management. The growth ofBADC activities has tended to outrun its administrative capability and Gov-ernment has ,s;ked IDA to finance, under the Third Technical Assistance Credit,872-BD, consultants to help BADC improve the management and financial controlof its irrigation activities. IDA has agreed in principle to this and BADCis seeking consultants. In addition, a thorough review of the basic institu-tional requirements of the minor irrigation sector is required to ensure thatconstraints in this area should not prevent the large and rapid expansion ofminor irrigation needed to meet Government's food production objectives. Itis proposed that GOB and IDA jointly undertake such a review patterned on therecent, successful joint review of the Bangladesh Water Development Board.It would be a condition of credit effectiveness that terms of reference anda work program for the review, satisfactory to IDA, had been approved by GOB.Should the need for additional investigation become apparent through thereview, further studies could be carried out using committed technical assis-tance funding.

D. Implementation Schedule

4.28 Project implementation would require an estimated four years (July1980 to June 1984). Detailed designs, layouts, and tender document prepara-tion for workshops and training centers would be completed in the first yearand construction would begin in the second. Acquisition of workshop equipmentand tools would be phased with the workshop construction program. Most landvehicles would be obtained by the end of the second year and most boats by theend of the third. Expatriate consultants would be hired soon after implementa-tion begins to avoid discontinuity with ongoing training programs (para 4.19).The water availability survey (paras 4.23 and 4.24) would be started in thefirst project year during which existing data would be systematically organizedand reviewed. The monitoring study (para 4.25), expected to continue through-out project implementation, would also begin in the first project year duringwhich baseline information would be collected (Annex H).

4.29 A total of 4,500 LLPs (3,000 2-cusec and 1,500 1-cusec) and allof the diesel fuel would be purchased immediately following IDA's approvalof the credit. Procurement of the remaining new pumps and spares would bephased over the four years as required to reflect fielding needs. The LLPsales program would begin in the first project year initially under theauspices of BADC and later (second project year) through private dealers.An implementation schedule was agreed during negotiations.

E. Cost Estimates and Financial Arrangement

Project Costs

4.30 Total project costs are estimated at US$48.0 M equivalent, includingabout US$7.1 M of import duties and taxes. The foreign exchange component is

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estimated at US$30.3 M or about 63% of the project cost. Cost estimates arebased on January 1980 unit prices. The major elements in project costs arepumpsets (US$14.4 M); incremental diesel fuel requirements (US$9.2 M),machinery, equipment, and tools (US$3.7 M); civil works (US$2.2 M), vehiclesand office equipment (US$2.3 M); rehabilitation of 5,000 old pumps (US$1.8 M);spares for existing pumps (US$1.2 M); and training, studies and advisoryservices (US$2.8 M), tota:Lling to a base project cost of US$37.8 M. Theadvisory services would include provision of two water resources engineersand a legal specialist to assist the Water Availability Survey. The consul-tant services are estimated to require 36 man-months at a total cost of aboutUS$360,000. The average man-month cost (based on the individual's fees, inter-national travel and local allowances) is expected to be about US$9,000 whichalso includes provision for the cost of vehicles, local travel and some otherminor items. Addition of physical contingencies of about US$2.3 M and pricecontingencies 1/ of US$7.9 M gives a total project cost of US$480.0 M. Esti-mated project costs are summarized in the table below:

1/ Calculated assuming the following annual rates:

Item Annual Inflation Rate (%) 1980-83

Foreign Cost 6%Local Cost 10%

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Cost Estimate

% ofTotal

Local Foreign Total Local Foreign Total Cost---(Taka Million)-- ---(US$ Million)---

(a) Land Acquisition 2.5 - 2.5 0.2 - 0.2 1

(b) Pumpsets, complete withtrolleys, pipes, fittingand spares 74.7 148.8 223.5 4.8 9.6 14.4 30

(c) Rebuilding of 5,000pumps and spares 23.2 24.1 47.3 1.5 1.5 3 6

(d) Diesel fuel 18.6 124.0 142.6 1.2 8.0 9.2 19

(e) Civil works for Thanaworkshops and trainingfacilities 24.6 9.4 34.0 1.6 0.6 2.2 5

(f) Machinery, equipment,tools for workshops,hand tools for mechanicsand spares 19.6 37.7 57.3 1.3 2.4 3.7 8

(g) Transport vehicles forBADC field operation,water availabilitysurvey, training pro-gram, and officeequipment (for trainingand water availabilitysurvey) 18.8 17.5 36.3 1.2 1.1 2.3 5

(h) Training, studies andadvisory services(Training specialists,water availabilitysurvey specialists,training of pump mech-anics and operators,and monitoring 18.0 26.5 44.5 1.1 1.7 2.8 6

Base Cost 200.0 388.0 588.0 12.9 24.9 37.8 80

Physical Contingencies 9.1 26.8 35.9 0.6 1.7 2.3 5Price Contingencies 65.3 56.8 122.1 4.2 3.7 7.9 15Total Project Cost 274.4 471.6 746.0 17.7 30.3 48.0 100

Ia The cost estimates include taxes and duties. Small discrepancies are dueto rounding.

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Estimated Schedule of Expenditures

Total Cost 1980/81 1981/82 1982/83 1983/84…------------ Taka Million---------------- -

(a) Land AcquisitionBase Cost 2.5 1.0 1.3 0.2 -

Physical contingencies 0.3 0.1 0.2 - -

Price contingencies 0.7 0.2 0.4 0.1 -

Sub-total 3.5 1.3 1.9 0.3 -

(b) PumpsetsBase cost 219.8 11.0 88.0 87.9 32.9Physical contingencies 17.3 0.9 6.9 6.9 2.6Price contingencies 60 0 1.3 18.5 26.8 13.4

Sub-total 297.1 13.2 113.4 121.6 48.9(c) Rebuilding of 5,000 pumps and spares

Base cost 47.3 6.2 19.3 17.4 4.4Physical contingencies 5.0 0.7 2.0 1.8 0.5Price contingencies 13.4 0.9 4.5 5.9 2.1

Sub-total 65.7 7.8 25.8 25.1 7.0(d) Diesel Fuel

Base Cost 142.6 142.6Physical contingencies - -Price contingencies - -

Sub-total 142.6 142.6(e) Civil Works

Base cost 34.0 5.0 12.7 12.8 3.5Physical contingencies 5.0 0.7 1.9 1.9 0.5Price contingencies 11.3 0.8 3.5 5.1 1.9

Sub-total 50.3 6.5 18.1 T9.8 5.9(f) Machinery, Equipment and Tools

Base cost 57.3 2.9 25.8 25.8 2.8Physical contingencies 3.9 0.2 1.7 1.8 0.2Price contingencies 14.6 0.4 5.3 7.8 1.6

Sub-total 75.8 3.5 32.8 35.4 4.1(g) Transport Vehicles &

Office EquipmentBase cost 36.6 1.8 17.7 14.1 3.0Physical contingencies 1.1 0.1 0.5 0.4 0.1Price contingencies 9.9 0.2 3.8 4.6 1.3

Sub-total 47.3 2.1 21.7 19.1 4.4(h) Training, Studies and

Advisory ServicesBase cost 44.5 7.8 12.4 12.3 12.0Physical contingencies 3.3 0.6 0.9 0.9 0.9Price contingencies 12.2 0.8 2.5 3.9 5.0

Sub-total 60.0 9.2 15.8 17.1 17.9

Total 746.0 336.1 146.6 166 2 97.1

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Financing

4.31 The proposed IDA Credit of US$37.0 M proposed (covering 90% of thetotal project costs, excluding taxes and duties) would finance 100% of foreignexchange costs, and about 63% of local costs net of taxes and duties. GOBwould finance the balance of project costs of US$11.0 M equivalent (Tk 170.5M) including taxes and duties, through annual budget appropriations made toBADC, MA and Ministry of Finance as grants. As discussed in Chapter V BADCoperates basically as a Government department with its expenditures far exceed-ing revenues. To ensure prompt provision of budgetary funds and hiring of therequired additional project staff, approval of the Project Proforma 1/by GOBwould be a condition of credit effectiveness.

4.32 Provision would be made for retroactive financing of purchases up toUS$7 M equivalent. This would cover IDA's share of the cost of the 3,000 two-cusec and 1,500 one-cusec pumpsets, and their spaces and fittings, for whichprocurement procedures are well advanced and for which payments may have tobe made ahead of Credit signing.

Procurement

4.33. Civil Works (US$3.3 M). 2/ Project works (workshops, classrooms/dormitories) would not be suitable for international competitive bidding (ICB)because they would include relatively small, simple structures widely distri-buted throughout the project area. Therefore, works would be carried outunder contracts let following local competitive bidding procedures satisfac-tory to IDA.

4.34 Machinery, Workshop Equipment, Tools, Vehicles and Spare Partsfor Annual Repairs and Rehabilitation of Unserviceable Pumps (US$7.9 M) 3/.These items would be procured through International Competitive Bidding TICB)in conformity with Bank Group Guidelines. A preference limited to 15% of cifprice or the prevailing customs duty, whichever is lower, would be extendedto local manufacturers in bid evaluation. Small off-the-shelf items costingless than US$50,000 for each contract, which are either urgently needed ornot suitable for ICB, would be purchased through normal GOB procedures, whichare satisfactory to IDA. Such purchase would be limited to a total ofUS$500,000.

4.35 Pumpsets and Accompanying Spares (US$16.8 M) 3/. Three thousand(3,000) two-cusec pumps with spares would be procured for BADC's rental schemesto replace pumps which will become unserviceable and condemned during the pro-ject implementation period. BADC's 1978 pump stock comprises 5 makes of about

1/ An internal GOB document, the approval of which is a prerequisite forrelease of funds and authorization to hire staff.

2/ The amount includes land acquisition and physical and price contingencies.

3/ The amount includes physical and price contingencies but excludes taxesand duties.

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40,000 serviceable and unserviceable (but repairable) two-cusec pumps exclud-ing electric units. In view of the large number of existing pumps and therelatively small number to be procured under the project, BADC, in the interestof standardization, would procure the 3,000 new units from suppliers of itsexisting LLPs on the basis of competitive quotations. To expedite procurementBADC had, at the time of negotiations (January 1980): (i) prepared a detailedproposal for the procurement of these 3,000 LLPs together with a justificationacceptable to IDA, (ii) obtained firm quotations from the selected supplierstogether with evidence that the quotations were in line with competitive quo-tations made recently by the suppliers to other customers, and (iii) drawn upa draft contract satisfactory to IDA.

4.36 Procurement of the 5,500 one-cusec pumps for the sales program wouldbe on the basis of farmer's choice and be executed in two stages as follows:

Stage I. BADC would procure the first 1,500 pumpsets for sale tofarmers to establish the basis for farmer's choice when sales arehanded over to the private sector and in agreement with IDA, BADC/GOB had selected 4 malkes of one-cusec pumpsets which are suitablefor use in the project aea. The selection was based on experience,including text trials, obtained in Bangladesh with various makesof equipment as well as on offers made in the course of recentbidding exercises carried out by BADC. The sets selected meetgeneral specifications agreed with IDA and are from manufacturerswhose equipment has been used on a reasonably extensive scale inBangladesh or in countries with similar climatic and operatingconditions. The selected LLPs would provide a range adequate topermit farmers to make a choice between relatively cheap andheavy unsophisticated equipment used extensively in other coun-tries in South Asia and the more expensive, sophisticated andlighter, equipment that has been produced in the industrializedcountries in recent years. BADC has tended to favor the latterequipment trading off the higher initial cost against expectedlonger life and ease of handling. It is believed that manyfarmers would prefer the initially cheaper equipment that lendsitself to maintenance by relatively unskilled mechanics and forwhich many spare parts can be fabricated locally. The selectedsuppliers/manufacturers have signified that they are preparedto mount a sales familiarization campaign for their product inthe project area, and to develop a sales and service network inthe project area. Firm quotations which are satisfactory to IDAhas been obtained from the selected suppliers and a draft hasbeen prepared which is satisfactory to IDA.

Stage II. The selected private sector dealers for pumps ofapproved makes would be licensed to import and sell the remaining4,000 pumpsets required for the project. NADC would plan detailedarrangements for Stage II in collaboration with potential dealers,and in consultation with IDA. Guidelines for the Stage II arrange-ments were agreed during negotiations. Key features are:

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(i) New manufacturers/dealers wishing to participate underStage II would be permitted to do so if GOB is satisfiedthat it is necessary, e.g. to replace a selected dealeror to permit participation by a new dealer offering anattractive proposal. They would be required to meet theconditions applicable under Stage I;

(ii) Stage II procurement would take place in several tranches.For each tranche approved dealers would provide to BADC adetailed breakdown of the price at which they proposed toretail pumpsets. "Quotas" under each tranche would eitherbe proportionate to each dealer's sales under the precedinground of sales or the dealer's demand, whichever was less.Price and quota proposals would be forwarded to IDA forapproval. Subsequent to IDA approval, BADC would approvethe issue of import licenses;

(iii) Sales would only be made to individuals or groups havingsecured approval of their proposed irrigation scheme throughthe Thana Irrigation Program (TIP). Dealers would berequired to sell only against presentation of the approvalletter issued through the TIP. Dealers would retain twocopies of the letter which they would return to BADC andthe Unit Officer BADC for record. A dealer's continuedparticipation in the program would be contingent on theirsatisfactory performance in this regard. This would ensurethat project pumpsets go to the intended beneficiaries.

4.37 Diesel. The Bangladesh Petroleum Corporation (BPC) has sole res-ponsibility for the importation of refined petroleum products and would procurediesel for supply to BADC. In the present state of the oil market, and inview of the limited volume of diesel to be financed under the proposed credit,procurement under ICB would not be practicable. Procurement would thereforebe by negotiated contract, which would be cleared with IDA before signing.To simplify procurement, and to obtain the maximum possible amount of dieselunder the Credit, procurement would be in one tranche early in the project.However, GOB has given an assurance that the diesel requirement of projectpumpsets would be met through the four-year implementation period.

4.38 Documents for tenders for goods or works with over US$50,000 wouldbe submited for ex-ante review, for smaller tenders documents would be sub-mitted for ex-post review. Proposals for the 3,000 two-cusec and first 1,500one-cusec pumpsets have already been approved by IDA (para 4.34). Line andquota proposals for the procurement of the remaining one-cusec pumpsets byprivate dealers would be submitted to IDA for approval (para 4.35).

Disbursement

4.39 The proposed credit would be allocated as follows:

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Amount of theCredit Allocated in % of Expenditures

Category Dollar Equivalent to be FinancedUS$ M

1. Equipment, vehiclesand materials 22.0

(a) directly 100% of foreignimported expenditures

(b) locally manu- 100% of localfactured expenditures

(ex-factory)(c) other local 70% of local

procurement expenditures

2. Civil works and materials 2.7 90% of expenditures

3. Diesel fuel for Project 8 100% of foreignpumps expenditures

4. Training, Studies and 2.8 100% of expendi-Technical Assistance tures

5. Unallocated 1.5

TOTAL 37.0

4.40 It is expected that disbursements would be completed by December 31,1984, approximately six months after the end of project implementation. Dis-bursements for all purchases and contract payments would be against full docu-mentation. This would apply to pumpset procurement by private dealers whowould arrange letters of credit at a bank selected by GOB. The letters ofcredit would be covered by IDA's "qualified agreement to reimburse" proceduresand disbursement would be against normal documentation. Annex F presents anestimated semi-annual disbursement schedule.

Accounts and Audit

4.41. Assurances have been obtained from GOB that:

(a) A separate account would be kept for all expenditures madeunder the project and that this account would identifyindividual categories under the expenditure items shownin the detailed cost estimates in Annex E;

(b) The account would be audited annually; and

(c) GOB would annually send to IDA copies of audit reportswithin six months of the end of each fiscal year.

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Environmental Impact

4.42 The project is expected to have no deleterious effects on theenvironment. In fact, the proposed water availability survey would assistin water use management by providing a systematic basis for annually deter-mining optimal pump fieldings. This exercise would examine surface waterexploitation for irrigation in relation to other uses and factors includingfisheries, navigation, and seasonal salinity intrusion.

V. ORGANIZATION AND MANAGEMENT

A. Project Organization

BADC

5.01 Primary responsibility for carrying out the project would rest withthe Bangladesh Agricultural Development Corporation (BADC). BADC is a semi-autonomous organization under the Ministry of Agriculture, established in1961. Its purpose when created was to develop agriculture by supplying neces-sary inputs such as fertilizer, seeds, low lift pumps and tubewells. It hassince grown into an organization employing about 22,000 employees, with anannual budget of US$144 M. It administers Government subsidies and its annualdeficit is covered by the national budget. This system of budgeting has meantthat although it is a corporation enjoying autonomy in staffing, financing andoperating policies, it has tended to function as a Government department. BADCis responsible for three IDA financed projects viz: Shallow Tubewells Project(Credit 724-BD); Northwest Tubewells Project (Credit 341-BD); and CerealSeeds Project (Credit 410-BD). Its effectiveness in managing these projectshas been mixed. In the case of the seeds project implementation is 3-4 yearsbehind schedule but, performance is now adequate; in that of Northwest Tube-wells, maintenance was fair but impaired by procurement difficulties earlyin the life of the project and on inability to provide support to pump groupsformed around the deep tubewells financed under the project. Performance inconnection with the Shallow Tubewells Project again has been less than satis-factory because of delays in procurement. For the latter reason rather spe-cialized procurement arrangements have been designed for this LLP project.

5.02 The BADC is organized into five Directorates each headed by a MemberDirector. The Directorate of Irrigation is responsible for: deployment andmaintenance of LLPs; supervising the installation of both deep (DTWs) andshallow tubewells (STWs); some tubewell operation and maintenance; and forthe operation and maintenance of rental farm tractors 1/. The Directorateis divided into three Divisions: Mechanization and Pumps (M&P), DTWs, andSTWs. Each has its own complement of staff, often down to the sub-thana level,operating independently, though in some areas DTWs and STWs are under oneexecutive head. The M&P Division has a total staff of about 6,000.

1/ 158 fielded in 1976-77.

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5.03 BADC Organization and Staffing in the Project Area. The operationsof the M&P Division in the project area are run by the six executive engineerslocated at regional level. In all districts, except Barisal, the BADC regioncorresponds directly to the district boundaries; Barisal District is dividedinto two regions--Barisal and Bhola.

5.04 The executive engineers report to the Chief Engineer M&P at head-quarters through a superintending engineer, but are answerable directly toheadquarters. There are two superintending engineers responsible for theproject area: one at Comilla is responsible for Chittagong Circle, comprisingthe project area regions of Chittagong, Noakhali and Comilla, plus Sylhet;one at Khulna is responsible for Barisal Circle, comprising the project arearegions of Barisal, Bhola end Patuakhali, plus Khulna and Jessore.

5.05 The six regions in the project area are divided into 21 zones forwhich assistant engineers aLre responsible. Within the zones are 82 units(equivalent to thanas) for which unit officers located at thana headquartersare responsible. These unit headquarters are distribution points for pumpsand have maintenance facilities and staff. Where the number of pumps exceeds200, or the areas are remote, sub-units have been established headed by sub-unit officers responsible to the unit officer (para 3.16). Including thestaff associated with the zonal workshops, the total M&P staff in the projectarea is 1,308. These are the staff working in the five districts outsidethe Bank-assisted irrigation projects.

5.06 The tubewell divisions function independently of the M&P Division.They have a different geographic spread and have different boundaries fortheir organizational units. An executive engineer at Chittagong is respon-sible for Chittagong and Noakhali Districts, one at Comilla handles Comillaand Sylhet Districts, and another at Faridpur has Faridpur and BarisalDistricts. They have 111 staff, complementary to the M&P Division.

Project Management

5.07 A Project Director, of equivalent rank to a deputy chief engineer/superintending engineer, has been appointed and would be responsible for thefinancial and technical aspects of the project, reporting through the ChiefEngineer (Mechanical and Pumps) to the Chairman, BADC. He would be supportedby a project unit comprising 15 professional accounting and engineering staffto keep project accounts and be responsible for coordinating implementation.The unit would employ BADC headquarters services, such as the procurementsection, for specialist activities. The Project Director would be responsiblefor all BADC irrigation engineering activities and staff in the project area,both LLP and shallow tubewells, as well as for BADC workshops in the area.He would also supervise the M&E unit to be established under the project.BADC has sufficient numbers of suitably experienced staff in the project areafor field operations and, if necessary, would be able to draft in personnelfrom other areas.

5.08 Under the project, improvements would be made in the staffing ofBADC's zonal workshops--not least to ensure the success of the LLP rebuildingprogram. This would mean more the rationalization of use of existing BADC

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staff than of employing additional personnel, see para 5.07. Under the proj-ect, staffing of each of the five zonal workshops would be as follows:

1 Assistant Mechanical Engineer,4 unit officers,32 mechanics,16 ancillary staff, and8 storekeepers

IRDP

5.09 IRDP, an agency of the Ministry of Land Administration, Local Govern-

ment, Rural Development and Cooperatives (MLG & RD) is responsible for promot-ing and supporting cooperatives. The level of IRDP involvement in rural areasdepends upon whether the thana concerned is an IRDP thana or not. About 250,or 60%, of all thanas in Bangladesh are IRDP thanas and about 50 of the 86 inthe project area. In IRDP thanas a Thana Apex Cooperative Society (TCCA) isestablished that acts as a union for its member primary societies, the KSS,and for which it provides credit (through linkage with the nationalized com-

mercial banks), marketing and input supply services. TCCA receives technicaland financial aid from IRDP. In non-IRDP thanas, cooperatives exists, but aresupported in a much less intensive way by the Cooperative Department of MLG &RD. It is Government's current intention that ultimately the TCCA/KSS systemshould become the standard for the whole country. In IRDP thanas pump groupscan be either TCCA/KSS or TIP/KSS. The TIP/KSS is registered with the thanacooperative officer solely for the season for which the pump is allocated tothe group. On the other hand, the TCCA/KSS is a permanent farmers' coopera-tive that, in practice, is usually engaged in activities in addition to therental of pumps. As most KSS are organized on a village basis they may havewithin them two or more pump groups. TIP/KSS are formed in non-IRDP thanas;there, the role of the TCCA/KSS is undertaken, albeit rather ineffectively,by village multi-purpose cooperative societies that are linked through 62central cooperative banks to the national cooperative bank, SBJB.

5.10 No immediate changes are foreseen for the IRDP and MLG & RD coopera-tive organizations as a consequence of the project. Similarly, no changes areproposed in pump group organization. However, with the proposed change toLLP sales, the adequacy of the present systems of pump group support needsexamination, not least to determine their ability to protect the interestsof smaller farmers and tenants and to provide credit for those groups thatneed it. The adequacy of present arrangements would be examined under thestudies described in paras 4.24 and 4.27-4.28; and needed changes discussedwith the Government at the conclusion of the studies.

B. LLP Sales and Rentals

5.11 For the reasons discussed in para 2.21, Government would sell theone-cusec LLPs procured under the project to individuals and groups preparedto purchase them. The sales scheme would be operated in parallel with therental of both two-cusec LLPs, including those procured under the project,

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and the one-cusec LLPs now in BADC stock. At the same time rents would be

adjusted upwards, see para 5.14. BADC would be responsible directly for

selling the 1,500 new one-cusec LLPs that would be imported under Stage I

of project LLP procurement. For Stage II, involving 4,000 one-cusec LLPs,

sales would be undertaken by private sector dealers. Two cusec pumps wouldnot be sold since Government fears that without the control that BADC could

enforce as owners of these units, their sale might lead to the establishmentof "water-lords". However, the situation would be kept under careful reviewand a change of policy cannot be excluded particularly if the monitoring and

evaluation study indicates that such adverse developments on any significantscale are improbable. One-cusec pumps now in stock also would not be sold

because their mechanical condition could result in maintenance problems fortheir owners.

Approval of LLP Schemes by the TIP

5.12 Pumpsets would only be rented or sold to groups or individualswhose schemes had been approved under existing TIP procedures. Priority forrental or sale would go first to existing groups, secondly to new groupsand last to individuals. Scheme approvals would stipulate the pumping site,

the maximum area to be irrigated and, in the case of individuals, the maximumarea farmed by the individual that may be irrigated. To provide a sound basisfor approving schemes for incremental pumps, all existing information onwater sources and pump groups would be assembled and evaluated in projectyear 1. The need for legislation to strengthen GOB's ability to manage the

water resource would be examined in the water availability survey (para 4.23et seq).

LLP Rental Rates

5.13 The LLP program involves substantial subsidies to the agriculturesector. First, the rental rate is inadequate to amortize the capital costof LLPs and fittings--it covers about only 15% of the initial cost net ofduties and taxes and financial charges. Second, repair charges meet onlyabout 51% of spares' costs, net of duties and taxes, and none of BADC'soverhead. The real cost of the subsidy is thus in the area of Tk 210 M

annually (US$13.6 M equivalent). Government recovers some of this subsidy,about Tk 19.1 M annually, from taxes and duties levied on diesel and lubricat-ing oils used by LLPs, about 16% and 20% of the final prices of the two items

respectively.

5.14 Toward a long-term goal of total elimination of subsidies, rentalrates would be doubled under the project: from Tk 600 to Tk 1,200 annuallyfor two-cusec LLPs, and from Tk 350 to Tk 700 for one-cusec units. Thesemeasures would increase the level of recovery of the initial cost of an LLPincluding fittings (typically US$1,780 for a two-cusec unit and US$890 for aone-cusec unit) from about 15% to about 29%. The doubling would be carriedout on a gradual basis to minimize any adverse impact on productivity. TheGovernment has prepared a program, acceptable to IDA, for doubling rentalrates by September 30, 1981 and an assurance was obtained that it wouldbe implemented.

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LLP Purchase Prices

5.15 The average one-cusec LLP including fittings is expected to costabout Tk 15,228 ex-BADC store in the project area. The price is made up aTk 12,510 cif price, Tk 1,467 representing the 15% custom duty on foreigncost, and Tk 1,251 (10% of cif cost) to cover internal transport, handlingand overhead. To make a sales program viable, some subsidy on pump saleswould be required to allow the sales program to compete with ongoing sub-sidized rentals. Annuities and repair costs under pump purchase arrange-ments would not need to equal rental and repair charges under the BADCrental program since additional benefits are derived from pump ownership.Some of these benefits include risk avoidance, elimination of annual pumptransport costs from the BADC distribution unit to the pumping site, use ofpump/engine for other agricultural and for non-agricultural purposes, avoid-ance of extra-legal payments incurred under the rental program, and LLPsalvage value. Examination of the question of appropriate subsidy level forLLP purchase has been carried out by (a) quantifying those costs incurredwith pump ownership (downpayment, annuities, full repair charges 1/ inclu-sive of taxes and duties) and those saved with avoidance of rental (rentalcharge, repair charge to BADC, pump transport costs), and (b) determiningthe level of annualized, aggregated, secondary benefits that would equate thepresent values of cost and benefit streams (discount rate used: 12% p.a.),assuming various subsidy levels. Costs and benefits common to the rental andpurchase cases were not included. Results of this analysis are graphed inAnnex F, Figure 1.

5.16 Taking account of all the above factors, the sales program wouldbe started with a 40% subsidy on the tax and duty free price of the LLP, i.e.,the typical one-cusec LLP costing Tk 13,700 delivered would be sold for a cashprice of Tk 8,200. Under such a sales system effective cost recovery wouldexceed 60% if adjustments are made for revenues stemming from the consumptionof fuel and lubricants. If these are taken into account cost recovery risesto 74% and to 80% when adjusted for duties and taxes levied on LLP spares.This compares with the maximum calculated recovery on rentals that is esti-mated, with the doubling of rental rates, to be 37.5%. Sales prices would bereviewed each July (at the end of each Boro season) and such desirable adjust-ments in the sales price as may be agreed with IDA would be introduced. Asthe thrust of Government policy is to help small farmers and the developmentof cooperatives and group activity, particular attention would be paid to thelevel of purchases made by individuals, and generally the more wealthy membersof rural society. The program, and particularly sales to individuals andsubsidy levels, would be reviewed annually with IDA beginning January 1,1981. Assurances covering these issues were obtained during negotiations.

Financial Ability of Farmers to Purchase Pumps and Pay Jiigher Rental Rates

5.17 The farm income benefits of using LLPs are described in para 6.10.The analysis indicates the proposed doubled rental rates can be borne. In

1/ Owners would be free to utilize BADC or private facilities and wouldpay full cost of such repairs, para 5.21.

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a typical pump group the additional cost would be about Tk 17.5 (US$1.13)

per acre irrigated, whereas the incremental net farm income obtained from

irrigating an acre is estimated at Tk 610 (US$39.4). Assuming that the same

typical pump group purchased its one-cusec LLP using credit on standard

terms, see para 5.18, the annual cost per acre additional to current rental

rates would be Tk 100. It is believed that the benefits of irrigation are

such that farm incomes under the doubled rental rate would remain adequate

to ensure the participation of the bulk of project farmers in the LLP rental

program. It is expected also that the income generated by using purchased

LLPs would more than compensate for the increased annual cost inherent in

purchasing an LLP.

Credit Arrangements

5.18 A program of medium-term credit would be established through the

nationalized commercial banks (CBs) and the Cooperative Banking System for

the purchase of LLPs by creditworthy farmers and farmer groups. This program

would make available credit on the following terms: For TCCA/KSS: (a) a

downpayment of 10%; (b) repayment by ten half-yearly installments at 13%

interest and with a six-month grace period; and (c) collateral to include the

pumpsets and a land with joint and several liability. For other cooperative

societies, groups and individuals: (a) a downpayment of 20%; (b) repayment

by ten half-yearly installments at 12% interest and with a six-month grace

period; and (c) collateral requirement for the pumpsets and may include land

security. The terms favor the TCCA/KSS. Their higher interest rate is in

line with present practice and reflects the services provided to members.

An assurance covering these features of the credit program was obtained during

negotiations.

Pump Maintenance Procedures

5.19 The field staff of the M&P and tubewell divisions of BADC would be

amalgamated under the project. The project would therefore be responsible

for the maintenance of both pumps and tubewells.

5.20 BADC would continue to be responsible for maintenance and repair

of rented LLPs. Under the sales program, spare parts would be sold by BADC

at cost to pump purchasers. Pump owners would be free to choose maintenance

services of their choice, either BADC's or private facilities. Until the

private sector was able tc provide an adequate spares supply, BADC would

operate as wholesalers for spare parts.

5.21 BADC would run down the number of its regularly employed field

mechanics consistent with the development of private ownership and sales and

spares activities. Mechanics released are expected to move into the private

sector in a manner similar to that in which 36,000 pump drivers (technical

operators) left BADC service two years ago. From about Year 3 of the project,

the private sector is expected to have taken over much of the maintenance and

repair (M&R) activities in Comilla, Noakhali, and Chittagong Districts. In

Barisal and Patuakhali Districts, however, problems of remoteness and diffi-

cult transport would probably mean that BADC would have to remain responsible

for (M&R) services for a longer transitional period.

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5.22 During the four years of the project, BADC workshops includingthose financed under the project are expected to be fully utilized. Beyondthat time the situation is less clear and will depend upon the level of salesof LLPs and degree of participation by the private sector in LLP sales dis-tribution and repairs. It is assumed that if workshops become underutilizedBADC would sell or lease them to the private sector.

VI. PRODUCTION, PRICES, FARM INCOMES AND COST RECOVERY

Cropping Patterns

6.01 Introduction. Through the project, 8,500 new LLPs would be providedand 5,000 unserviceable units would be rebuilt. Of the total 13,500 projectLLPs, about 9,990 would replace existing pumpsets that are expected to becomeunserviceable and to be condemned; these would have a total capacity of16,200 cusecs. The balance of 3,510 LLPs would permit new irrigation; theseunits would have a total capacity of 5,300 cusecs. As a result, assuming 20 acper cusec, an estimated 323,900 ac would be affected by the replacement pro-gram and 106,000 new ac would be irrigated through new installations (seeAnnex A, Table 3).

6.02 Replacement Program. Farms affected by the replacement programcomprise a total net cultivated area of 637,000 ac of which about 324,000 acare currently irrigated with LLPs. A total cropped area of 1,147,000 ac atpresent yields a cropping intensity of 180% (Aus 10%, T. Aman 100%, Boro 50%and other crops mainly pulses and oilseeds 20%). Without pumps, there wouldbe no irrigation, and cultivation of HYV Boro would not be possible. Instead,farmers would have to revert partially to low yielding, rainfed Aus. Thiswould reduce the intensity of land use to about 150% (Aus 30%, T. Aman 100%and other crops 20%) as summarized in Table 6.2. There probably would be aslight substitution of HYV T. Aman for local T. Aman, but this would not alterthe overall cropping intensity, as shown in the following table. The WithProject Case in Table 6.2 would be achieved in 1984 after completion of projectimplementation (see Annex G, Table 3).

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Table 6.2 Present and Future CroppingPatterns (Replacement Program)

Area ('000 ac)

P W W

1. Paddy

Aus 61 194 61

T. Aman (local) 590 548 548

T. Aman (HYV) 47 89 89

Boro (HYV) 324 - 324

Subtotal 1,022 831 1,022

2. Other Crops

Pulses 61 61 61oilseeds 64 64 64

Subtotal 125 125 125

Total Cropped Area 1,147 956 1,147

Net Cultivated Area 637 637 637

Cropping Intensity % 180 150 180

6.03 Newly Irrigated Farms. Farms with newly irrigated land would

cover a total net cultivated area of 208,000 ac. With a total cropped area

of 313,000 ac, present cropping intensity is 150% (Aus 30%, T. Aman 100%, and

other crops 20%). Through the project, about 106,000 ac would be irrigated

with new and rebuilt LLPs and sown to HYV Boro. This would increase thecropping intensity to 1802 (Aus 10%, T. Aman 100%, Boro 50% and other crops

20%) as shown in Table 6.3:

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Table 6.3: Present and Future Cropping Patterns(Farms to be newly irrigated)

Area ('000 ac)

P w

1. Paddy

Aus 64 64 20T. Aman (local) 193 179 179T. Aman (HYV) 15 29 29Boro (HYV) - - 106

Subtotal 272 272 334

2. Other Crops

Pulses 20 20 20Oilseeds 21 21 21

Subtotal 41 41 41

Total Cropped Area 313 313 375Net Cultivated Area 208 208 208Cropping Intensity % 150 150 180

Yields and Production

6.04 Estimated present crop yields in the project area are presented inTable 6.4.

Table 6.4: Present Crop Yields

mds/ac Equivalent tons/ac

Paddy

Aus 14 0.52T. Aman (local) 16 0.60T. Aman (HYV) 30 1.12Boro (HYV) 37 1.38

Other Crops

Pulses 6 0.22

Oilseeds 7 0.26

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6.05 Estimated present and future production levels based on the crop-ping patterns above and present yields are summarized in Table 6.5. The With-Project Case is reached in 1984 after completion of project implementation.

Table 6.5: Present and Future Production Levels('000 tons)

Replacement NewlyProgram Irrigated Area Total

P W W P W w p w w

1. Paddy

Aus 32 101 32 33 33 10 65 134 42T. Aman (local) 396 368 368 130 121 121 526 489 489T. Aman (HYV) 52 99 99 17 32 32 69 131 131Boro HYV 447 - 447 - - 146 447 - 593

Subtotal 927 568 946 180 186 309 1,107 754 1,255

2. Other Crops

Pulses 16 16 16 5 5 5 21 21 21Oilseeds 14 14 14 5 5 5 19 19 19

Subtotal 30 30 30 10 10 10 40 40 40

6.06 Present paddy production totals 1,107,000 tons, and without theproject this would be reduced to 754,000 tons. The project would not onlysafeguard the present Borc production level but would also enable productionof an additional 146,000 tons of Boro, thereby increasing the paddy outputfrom 754,000 without the project to 1,255,000 tons with the project, givingan incremental project-related production of 501,000 tons.

Marketing

6.07 The marketing system in Bangladesh is largely traditional. Mostgrowers dispose of portions of their crop before or immediately upon harvestbecause of (a) need for cash; (b) inability to hold grain in storage;(c) crop loan obligations; and (d) tenancy crop division arrangements. Suchfarmers often have to buy grain later at higher prices for family consumption.However, only 2-3 million tons of foodgrain, about 20-25% of national produc-tion, actually enter commercial markets, and private traders handle about80% of such trade. Traders buy grain principally at primary daily and localweekly markets. Farmer cooperatives have been officially encouraged to marketpaddy and engage in rice milling, but so far, such efforts have not been suc-cessful. Government foodgrain procurement in the past has often been resentedby farmers when procurement prices have been below the free market level. Torationalize the system, Government policy was re-oriented after FY75 toemphasize (a) incentive pricing, (b) management of supply and distribution topromote food price stability, and (c) food subsidy reduction. However, only

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585 procurement centers operate nationwide, and farmers often have to sell tomiddlemen at lower prices to acquire needed cash or to avoid time-consumingtransactions at distant and congested procurement centers. In absolute terms,Government procurement has remained small, averaging about 3% of nationalproduction. Through the FY77 season, GOB procured only Aman paddy and rice,but in FY78 it began to purchase Aus and Boro paddy and rice at base supportprices the same as for Aman. Since FY79 foodgrain production was below levelsrecorded in FY78. The Aman crop currently provides about 80% of domesticprocurement, Aus 10%, Boro 6%, and other grains 4%. Although procurementcenters operate in every district, greatest success has come from surplusdistricts--Dinajpur, Rangpur, Bogra, Rajshahi, Patuakhali, Mymensingh, andSylhet.

Prices

6.08 GOB provides guaranteed support prices for paddy and wheat, thecurrent procurement price for each being Tk 105 per md with an additionalTk 5 per md to cover transport to procurement centers. Because of weaknessesin the official procurement machinery, paddy farmgate prices have demonstratedvolatility and at times have dipped below procurement prices. Current pro-curement prices are considered reasonable and if enforced effectively, provideadequate incentives to cultivators. These prices, however, must be reviewedcontinually to ensure adequate incentives in light of rising input pricesand GOB's strategy to stimulate agricultural productivity. Paddy prices usedin financial analyses represent FY79 average prices derived from projectarea-specific and crop-specific farmgate data. These prices conform reasonablywith national averages and official prices when adjusted for quality differ-entials. Production of other crops such as pulses and oilseeds is small andmostly for home consumption. Because of the residual nature of the market,pulse and oilseed farmgate prices have oscillated considerably. The financialprices for pulses and oilseeds employed in the following analysis representfour-year national annual averages (see Annex G, Table 1).

6.09 Fertilizer and pesticide prices used, except for urea, are subsi-dized levels current at the time of appraisal (December, 1978). The ureaprice approximates the black market rate. Prices for other inputs such asanimal and human labor are based on prevailing project area-specific prices.To isolate the project impact from changes in nominal prices of inputs andoutputs, a single set of prices, expressed in constant FY79 terms, has beenused to estimate present, with, and without project returns (Annex F, Tables 5and 6).

Farm Incomes

6.10 The impact of the project on farm income was analyzed for threedifferent farm models: 1 ac, 3 ac, and 7 ac of which portions would be irri-gated through the LLP programs. Because of data scarcity on non-farm andother agricultural income, only crop production activities have been con-sidered. Size-specific cropping patterns have been incorporated, but forinput requirements and yields obtained, constant returns to scale have beenassumed. Net farm income levels, therefore, are a function of respectivecropping intensity, extent of cultivation of each crop, and on-farm labor

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self-sufficiency. A relatively minor difference was the assumption that thesmall farmer would have to resort to non-institutional sources for creditneeds (see Annex F, Table ; 6/). Hired labor requirements have been estimatedassuming peak monthly family labor availability of 40 man-days. Estimated netincome, therLfore, includes remuneration to family input of labor and manage-ment. 1/ The following summarizes farm income from Annex F, Table 6 and alsoprovides information concerning the percent of farms and cultivated area inthe five project districts represented by the three model farms.

Net Farm Estimates

One Three SevenAcre Farm Acre Farm Acre Farm

Number of Farms Represented (%) /a 68.3 25.8 5.9Cultivated Area Represented (%) /a 28.5 43.5 28.0

Projected Net Farm Incomae (Tk) on thosefarms not in LLP program or losingaccess to serviceable LLPs 1,222 2,859 3,832

Project Net Farm Income (Tk) on farmsin LLP program with doubled rentalcharges 1,830 4,723 6,523

Incremental Income (Tk) 608 1,864 2,691

/a See Annex B, Table 2.

Impact on Government Budget:

6.11 With initiation of an LLP sales progam and a higher rental ratestructure, GOB's subsidy of the LLP subsector should decline substantially.Specifically, GOB would have to purchase and service fewer pumpsets, andrevenues would increase from higher rental charges and higher cost recoveryfrom pump sales and spares. To illustrate the impact of these structuraladjustments introduced under the project, the following two tables attemptto set out in general terms, first, the levels of GOB receipts and expendi-tures that could be expected for the 13,500 project pumps were the existingregime of rentals and rates maintained over the project life, and second,those anticipated with higher rental rates and LLP sales. As may be observed,the net deficit estimated lor project-associated LLPs would drop by aboutTk 141.9 M. GOB revenues over the project term would increase by Tk 32.0 M,and expenditures would decline by Tk 109.9 M.

1/ No estimates of farm income were made for the Present Cases since farmincome under Present Case A (land currently under irrigation) wouldapproximate that under the With Project Case, and that under PresentCase B (land currently without irrigation) would be similar to incomeunder the Without Pro-ject Case.

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Existing LLP Rental System and Rates(M Tk)

Expenditures Receipts

New LLP Purchases (8,500) 158.7 Rental Charges (13,500) 38.1Purchase of Spares 24.7 Repair Charges (13,500) 21.0LLP Rebuilding (5,000) 27.0 Fuel Taxes 36.3Overheads 143.1 95.4

353.5

Net Deficit: 258.1

LLP Sales and Doubling Rental Rates

Expenditures Receipts

New LLP Purchases (4,500) 103.7 Rental Charges (8,000) 49.2Purchases of Spares 16.7 Repair Charges (8,000) 12.8LLP Rebuilding (5,000) 27.0 Fuel Taxes 42.5Overheads 74.2 Payments for SparesSubsidy on Privately Purchased from BADC 3.0Sold LLPs (4,000) 22.0 Taxes on Spares (4,000) 7.5

243.6 Principal Payments forPurchased LLPs (1,500) 12.4

Net Deficit: 116.2 127.4

VII. BENEFITS, JUSTIFICATION AND RISKS

7.01 The project's principal benefit would be the maintenance of produc-tion levels on farms served by the 9,990 LLPs that would be replaced under theproject and the increase in foodgrain production that would be generated forfarms to which irrigation would be introduced by installing 3,510 LLPs for thefirst time. As discussed in Chapter VI, net production that would be foregoneby 1984 (the end of the project development period) were the 9,990 LLPs notreplaced would amount to 378,000 tons of paddy, and the net incremental pro-duction obtained through the 3,510 units would be 123,000 tons of paddy.Based on a projected rice import price (in 1979 US$) of about US$295 per ton(see Annex G, Table 2), the annual gross foreign exchange value of the produc-tion of 378,000 tons of paddy protected is estimated at US$72.5 M and the FEvalue of the incremental production stemming from new and rebuilt LLPs,US$23.7 M. Net of foreign exchange costs for imported recurrent inputs, for-eign exchange savings would reach about US$78 million. The foreign exchangebenefits of the project are considered conservative since incremental pro-duction from pump use in other than the Boro season has been excluded. 1/

1/ Farmers can use pumpset to drain fields (Aus) and to irrigate duringend-season droughts (Aman).

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Employment Opportunities

7.02 The project would generate incremental annual employment of 7.1 M

man-days in on-farm work at full development, and protect against the loss of

21.6 M man-days. (Annex F, Table 1). About 26% of this employment would

represent hired labor. Through secondary effects, the project would enable

off-season use of privately owned engines/pumps in agricultural and non-

agricultural activities (e.g., rice milling, transportation) with additional

labor needs. Private ownership would likewise give impetus to development of

a small-scale pump servicing industry within the rural sector, heretofore

curtailed by public ownership and servicing. All this would tend to relieve

prevailing unemployment and underemployment.

Economic Analysis

7.03 The Bangladesh economy would realize an economic rate of return from

total project investment inclusive of physical contingencies of over 100%. A

sensitivity test for the case of a simultaneous occurrence of a cost overrunof 25% and 25% shortfall in net benefits shows that the rate of return would

still exceed 40%. The economic analysis employs the following basic assumptions:

(a) Project Life. Project implementation would span a four-

year period. New rented pumps would have an expected lifeof seven years; rebuilt rented pumps, four years; and

purchased pumps, ten years. The project life would, there-fore, be fourteen years, i.e. the four-year implementation

period plus the 10-year life of LLPs sold in the fourthyear.

(b) Prices. For internationally traded goods, farmgate prices

employed were derived from projected 1990 world market

prices expressed in 1979 currency values. Appropriateadjustments were made for freight, handling, and qualitydifferentials. For other agricultural produce, prices

are based on the historical ratio between prices andpaddy prices. For non-tradeable services such as han-dling, processing, and transportation, a standard con-version factor cf 0.75 was applied to reflect the pre-vailing regime of taxes and quotas. To adjust for

seasonal unemployment/underemployment and peak period

labor shortages, farm labor requirements were valued at

seasonally adjusted economic wages ranging from 50-123%of the annual average market rate (see Annex G, Tables 1

and 2).

(c) Benefits. Projected crop benefits were estimated assuming

average conditions in the project area. Economic benefits(and costs) associated with the 5,000 rebuilt two-cusecpumpsets are based on avoidance of costs (and benefits)of new units. Although additional benefits would arisethrough increased use of privately owned pumps, in both

agricultural and non-agricultural pursuits, only incremen-

tal benefits from Boro cultivation were considered. In

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terms of pump use efficiency, an average of 20 ac wereassumed irrigated per cusec. Foodgrain benefits represented99.3% of the present value (PV) of the Base Case incrementalproject benefit total. The remainder included unexpiredeconomic lives and salvage values of investments. Salvagevalues for tools, equipment, and vehicles were calculatedat 10% of original value. Unexpired economic lives werecomputed using straight-line depreciation (see Annex G,Table 3).

(d) Crop Production Costs. Per ac input requirements assumedare provided in Annex E, Tables 3 and 4. Crop productioncosts equalled 72.8% of PV of total incremental projectcosts (see Annex G, Tables 3 and 4).

(e) Investment and O&M Costs. All investment costs exceptprice contingencies, land acquisition cost, and taxesand duties were included in the economic analysis. Landacquired for workshops was valued at agricultural produc-tion foregone. Direct O&M costs included fuel, pumptransport, management input, and other costs directlyrelated to LLP irrigation. Indirect O&M costs comprisedof incremental BADC overheads. Net investment costs repre-sented 15.1% of PV of total costs; direct O&M, 11.1%; in-direct O&M, 0.6%; and land value, 0.1% (see Annex G, Tables3 and 4).

(f) Administrative Costs. Administrative expenses (BADC, IRDP,and CBs) to execute the pump sales program were assumedequal to about 2% of the capital cost of sord units. Thisminor cost equalled 0.3% of PV of total costs (see Annex G,Tables 3 and 4).

(g) Phasing of Benefits/Costs. To reflect realistically theincurrence of economic costs and generation of benefits,both have been phased on a quarterly basis over the projectlife. 1/ Further assumptions regarding implementation arespecified in Annex G, Table 3.

7.04 The principal reasons for the high viability are:

(a) Avoidance of civil works. Unlike tubewells, LLPs requireno time-consuming, costly drilling and pipe installation.

1/ When phased in the traditional, 12-month format (assuming simultaneous,end-of-period cost and benefit generation), the economic rate of return(ERR) to project investments was 36% higher than that derived withquarterly phasing. This is to be expected in projects with capitalcosts low relative to recurrent costs (see W. Schaefer-Kehnert, ThePhasing of Inflow and Outflow in Farm Cash Flow Projections, EDICourse Notes CN-8, June 1978 and Annex 6, Table 4).

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(b) Fast implementation with no learnin period. The projectwould be implemented in four years and would reach peakproduction in five. Bangladeshi farmers understand wellthe use and efficacy of LLP irrigation, and the bulk ofproject LLPs wouLd be replacements. Pumps/spares wereassumed to be procured and rebuilt one year prior tofielding.

(c) High sunk costs for 5,000 rebuilt LLPs. 1/

(d) Addition of a full HYV crop in production cycle. Provisionof irrigation permits growers to substitute an HYV Boropaddy crop for a large portion of higher risk, lower yield-ing Aus (see Annex D, Table 1).

Project Beneficiaries and Distributive Impact

7.05 About 324,000 rural households 2/ would have their existing accessto irrigation facilities assured through project investments, and a further106,000 households would be provided with such access for the first timeenabling increases in their family incomes of 50% or more. Initiation ofprivate pump ownership would probably allow intensification of use of LLPsand their engines thereby generating incremental output and stimulating addi-tional employment. Private pump ownership is also expected to give impetusto small-scale, village-based servicing industry enabling better LLP mainte-nance and producing beneficial effects for users of other small-scale capitalequipment (sprayers, tillers, STWs, HTWs, etc.). These secondary benefits,however, have not been included in the economic analysis of the project.

7.06 The poverty target group in Bangladesh comprises that segment of thepopulation in the lower 40' per capita GNP percentile. According to recentestimates (1973-77), individuals in the absolute poverty group (rural areas)earn less than US$90 per annum. About 50% of the rural poor are classifiedas landless or near landless with the balance operating sub-subsistence hold-ings. While some tenants and sharecroppers are expected to participate inpump groups under the project, the bulk of project beneficiaries areanticipated to be landowning farmers. Nevertheless, about 30-40% of projectbeneficiaries would fall within the poverty target group.

Project Risk

7.07 There are few risks attached to investing in replacement and addi-tional LLPs. This is indicated by the results of the analysis described inearlier paragraphs and confirmed by the sensitivity analysis below and, veryimportantly, by farmer demand for LLPs. This situation is not surprising since

1/ When these sunk costs (unexpired income lives) were included as a sen-sitivity test, the Base Case net PV dropped by 3%. The Base Case ERRdeclined by 18% but still remained above 100%.

2/ Assuming an average of one irrigated acre per household.

- 49 -

dry season (Boro) irrigation in Bangladesh permits an additional crop in acountry where land pressure is extremely high, foodgrain shortages are apermanent fear, and where labor is in over-supply and consequently cheap.Nevertheless, farmers are conscious of cash costs and past experience tendsto indicate that quite small adverse changes in prices (e.g., in the paddyprocurement price) can have a depressive effect on the number of LLPs utilizedin the affected season. This occurred in FY77 when the numbers of pumpsfielded dropped to 28,360 from 36,380 in FY76. Consequently, it is importantthat GOB maintain its incentives at suitable levels--a situation that appearsto exist at the present time.

7.08 The major innovation in the project is the proposal to sell LLPsto farmer groups and individuals. While it is believed that this developmentwill be welcomed by the farming community, the proposed sales of 5,500 unitsmust be considered as a pilot operation the outcome of which cannot be pre-dicted with certainty. Should the sales program prove unsuccessful or proceedmore slowly than anticipated, it may be necessary to field some of these unitson a rental basis. Such a decision would be made only in the event that awell designed and managed sales program had been implemented and had failed.

7.09 Sensitivity tests were made to assess the impact of variations inincremental cost and benefit streams on the project's viability. Switchingvalues (SV) 1/ for individual and total cost and benefits streams are pro-vided in Annex G, Table 4. While an opportunity cost of capital (OCC) of12% has been assumed throughout the analysis, SVs were also calculated atlower and higher discount rates (10-16% p.a.). A plot of PVs for total costand benefit streams against various discount rates is presented in Annex G,Figure 1. In addition, a locus of all possible SVs for aggregate costs andbenefits 2/ is provided in Figure 2. A rectangle has been inserted into thelocus to demarcate the most conservative combinations of cost overruns andbenefit shortfalls considered possible in the project. The SVs demonstrate,and the figures illustrate, the large amount of shock the project can bearand still retain economic viability. Assuming that each combination of costoverrun and benefit shortfall within the rectangle has an equal likelihood ofoccurring, the probability of project non-viability is about 11%. However,since extreme cases of cost overruns and benefit shortfalls are considerablyless likely, the actual probability of non-viability would be much less.

7.10 To demonstrate this resilience, the Base Case was altered to in-corporate a disaster every four years beginning with the first cropping year.It was assumed that the disaster (cyclones, floods, hail, etc.) always strikesimmediately after the Boro harvest so that while crop benefits are zero, allcosts are still incurred. The SVs, PV plot, and SV locus are presented inAnnex G, Table 4, Figure 3, and Figure 4 respectively. Since this test wasequivalent to a 20% shortfall in benefits (see Figure 2), the project remainedhighly attractive and able to absorb further negative impact.

1/ Switching value is the percentage change which reduces the net PV to zeroat a specified discount rate, e.g., the opportunity cost of capital.

2/ OCC = 12% p.a.

- 50 -

VIII. RECOMMENDATIONS

8.01 The following major assurances were obtained:

(a) GOB would make diesel fuel available for project pumpsetsover the four-year development period (para 4.37);

(b) GOB would double LLP rental sales by September 30, 1981according to a program acceptable to IDA (para 5.14);

(c) GOB, together with IDA, would review the results of thesales program and subsidy levels semi-annually beginningJanuary 1, 1981 (para 5.16); and

(d) GOB would, by June 30, 1980, in consultation with IDA,formulate and establish a program for sales of LLP inconformity with guidelines agreed with IDA (para 5.16).

8.02 Conditions of credit effectiveness would be that:

(a) a work program for the training aspects of the projectproviding details of civil works, technical assistanceand vehicle and equipment procurement, satisfactory toIDA, had been approved by GOB (para 4.22);

(b) the terms of reference and a work program for the reviewof the institutional requirements of the minor irrigationsector, satisfact:ory to IDA, had been approved by GOB(para 4.27); and

(c) the project proforma had been approved by GOB (para 4.31).

8.03 With the above assurances, the proposed project would be suitablefor an IDA credit of US$37 M on standard IDA terms. The borrower would bethe Government of Bangladesh.

ANNEX ATable 1

BANGLADESH

LOW LIFT PUMP PROJECT

Fielding of Low Lift Pumps by BADC (FY61-FY79)

Average Area Irrigated Total AreaNumber of Pumps Cusec per Cusec Irrigated

Years (FY) in Operation per pump (Acres) (Acres)

1961 1,267 n.a. n.a. 64,528

1962 1,555 n.a. n.a. 73,922

1963 2,024 1.70 38.5 .133,043

1964 2,477 1.85 34.1 156,751

1965 2,239 1.95 30.0 132,262

1966 3,420 2.05 24.6 173,512

1967 3,990 2.14 26.4 225,105

1968 6,558 2.08 23.3 317,903

1969 10,852 1.89 20.7 430,052

19,70 17,846 1.84 19.6 642,752

191l 24,483 1.85 18.3 889,800

1972 24,243 1.84 19.4 883,941

1973 32,917 1.84 20.3 1,218,766

1974 35,343 1.84 20.1 1,330,810

1975 35,534 1.86 20.0 1,300,507

1976 36,382 n.a. n.a. 1,313,576

1977 28,361 1.86 20.9 1,101,210

1978 36,730 1.87 20.2 1,391,669

Source: Bangladesh Agricultural Development Corporation.

51

ANNEX ATable 2

BANGLADESH

LOW-LIFT PULMS PROJECT

Costs of Operation of Rented One- and Two-Cusec Pumps

(in Taka)

One-Cusec Pump Two-Cusec Pump

Rent 350 600Repair Charge 225 300Pump Transport 300 300

Subtotal 875 1,200

Pump Operator (4 months) 1,600 1,600Diesel (4 barrels) 1,760 (6 barrels) 2,640Diesel Transport 100 150Oil (10 gallons) 460 (12 gallons) 552Contingency (10%) 392 494

Subtotal 4,312 5,436

Total 5,187 6,636

Per Acre Cost (+ 20 ac) 259 (- 40 ac) 166Management Expenses 1/ 50 38

309 204

1/ Mission estimates to include managerial input, extra-legal payments toobtain inputs and services, and time value of costs prepai4, risk.

52

LOW LIFT PUMP PROJECT

Project Pumps, Cusecs, Area Irrigated, and Incremental Production

Type of Number Number Area Net Cultiva- Total Net Paddy

Project Pump CIa~ssficat±on pump of pumps of Cusecs irrigated 1/ ted Area 2/ Cropped ProductionArea (W) 3/ (W-W) 4/

'000 ac '000 ac '000 ac 000 tons

A. Rep1"cerment Program1. ;eo pulilps replacing unservi- 1-cusec 3,787 3,787 75.7 149.0 268.3 88.3

ceables in. project area 2-cusec 1,213 2,426 48.5 95.4 171.8 56.5

2. New pumps replacing condemned

un_ts in Droject area 2-cusec 1,787 3,574 71.5 140.6 253.1 83.4

3. Rebuilt pus.ps replacirgunserviceables/condemned units

outside project area 2-cusec 3,205 6,410 128.2 252.2 454.1 149.5

Subtotal 9,992 16,197 323.9 637.2 1,147.3 377.7

B. New Pump Fieldings1. New pumps in project area 1-cusec 1,713 1,713 34.3 67.4 121.3 39.9

2. Rgebuilt pur.ps out-side project area 2-cusec 1.795 3,590 71.8 141.2 254.2 83.7

Subtatal 3,508 5,303 106.1 208.6 375.5 123.6

Total 13,500 21,500 430.0 845.8 1,522.8 501.3

1/ at 20 ac per cusec 0

2/ Boro covers on average 51% of net cultivated area on project farms mx

3/ in With Project Case, cropping intensity of 180% assurad

'~/ Yie ~ds per acr,e: (a) Bor,a: 1.,38 tons; (b) Aus: 0.'_ tors. Azan p:oduction remains the same,W to *W. For each acre of

Ba-o g:own, fu.rmers forego .41 ac Aus; therefore for each ton boro paddy produced, farmers forego .155 tons Aus paddy.

IA)W 1.1 F PiNIP PRo iE ICT

Clii,. ctic Data

It ers Jail t'eH Ms crli, Ap 1 ay IuIs J3aly KMuust 'Spi Oct NoV Dee 'Total

Rainfall (ill)

Comilla 2/ 0.J 0.7 2.8 4.3 10.9 20.5 21.8 16.8 11.8 8.5 1.9 0.3 100.6

Noakhali 3/ 0.4 1.0 2.6 7.2 11.8 20.5 22.4 21.3 14.0 7.7 1.8 0.3 111.0

Chlttagong 3/ 0.4 0.8 2.2 4.5 10.4 22.3 25.4 22.7 12.6 8.7 1.5 0.6 112.1

Barisal 3/ 0.6 0.6 1.5 3.3 7.6 16.9 17.0 16.8 11.7 8.5 1.2 0.2 86.0

TemperatLre ('°) 4/Maxiwum

Comlilla 88 94 100 100 100 100 96 99 97 98 92 90

Noaktrali 90 100 96 100 101 96 97 93 99 98 91 89

('hittagong 89 91 96 96 98 94 99 92 94 95 92 88

Barisal 87 93 102 106 101 104 99 99 94 93 99 89

ComnilIa 40 46 50 65 65 70 71 71 71 68 44 48

Noakiali 48 47 50 64 65 64 71 70 70 68 57 50

Ch it tagolig 57 48 58 63 65 70 73 71 72 69 57 50

l1arisal 45 46 55 60 65 70 65 72 62 65 54 47

Me an

CouijI la 64 70 75 82 82 85 83 85 84 83 68' 69

Hoakilahi 69 73 73 82 83 88 84 81 84 83 74 69

Clrittagong 73 69 77 79 82 82 86 81 83 82 74 69

Barisal 66 69 /8 83 83 87 82 85 78 79 76 68

llurid ity (7.)

Colil ila 71 72 75 78 81 85 87 85 83 82 78 79

Noakhali 79 77 76 79 82 87 88 89 88 86 81 82

Chittagong 67 65 67 72 76 84 85 85 84 81 72 71

Barisal 1/ 76 74 74 74 74 83 87 85 83 79 75 78

1/ Applicable to Pat,takhali districL which was formerly a part of Barisal district.,

2/ 10 year average - 1965-1974.3/ 20 year average.

_/ 10 year average - 1965-1974.

-n SOURCE: Metrological Departme-nt, Governu.lent .f Biangladesh.

ANNEX BTable 2

BAN4GLADESH

LOW LIFT PUMIP PROJECT

Size Distribution of Farms

Comilla Noakhali Chittagong Barisa-1 / Bangladesh

Size Intervals (ac) District District District District Total

Number of Farms

0.00 - 0.50 23 24 28 14 13

0.51 - 1.00 20 21 13 11 11

1.01 - 2.50 33 31 28 27 28

2.51 - 5.00 17 15 .19 26 26

5.01 - 7.50 4 5 6 11 11

7.51 - 12.50 2 3 4 7 7

12.51 - 25.00 1 1 2 3 3

25.01 - plus - -TOTAL 100 100 100 100 100

Number

Total ('000) 592.8 324.7 265.6 507.7 6,139.0

Cultivated Area(Z)

0.00 - 0.50 3 3 2 1 1

0.51 - 1.00 7 7 3 2 2

1.01 - 2.50 30 24 20 12 13

2.51 - 5.00 32 26 29 25 27

5.01 - 7.50 14 14 16 18 20

7.51 - 12.50 10 12 14 19 19

12.51 - 25.00 4 10 10 16 14

25.01 - plus - 4 6 7 4

TOTAL 100 100 100 100 100

Area

Total area ('000) 955.6 578.7 537.8 1,672.7 19,138.1

Average Farm Size (ac) 1.61 1.78 2.02 3.29 3.12

Source: Agricultural Census 1960.

i/Includes Patuakhali district which was formerly a part of Barisal District.

55

ANNEX BTabIe 3

BANGLADESH

LOW LIFT PUMP PROJECT

SURFACE WATER BALANCE SHEET

Main River System - Inflows and Use

----------- Year -----------1/ 1978 1984 2000

A. Inflows into Bangladesh - Lower Quartile in March-

Brahmaputra river system 136,000Ganges river system 68,000Meghna river system 18,000

Total 222,000 Cusec

B. Withdrawals

(i) In Bangladesh

Low Lift pumps 2/ 14,000 16,000 22,000Low lift pumps with major works 3/ - 3,000 3,000 +Gravity systems (WDB) 2,000 2,000 2,000 +Tubewells 400 600 600 +Traditional irrigation methods 4/ 7,000 7.000

Subtotal 23,400 28,600 34,600

(ii) In India (estimates)5/

Farakka barrage diversions 30,000 30,000 30,000

Irrigation expansion- Ganges plain 30,000- Brahmaputra plain 20,000

Subtotal 30,000 30,000 80,000

Total Withdrawals 53,400 58,600 114,600

C. Inflow Remaining (%)6/ 168,600 163,400 107,400(76%) (74%) (48%)

1/ Mean from records up to 1970. From World Bank's Land and Water Resources SectorStudy Volume VII Water Section IV B. 1978 1984 2000

2/ Expected number of pumps t:o be fielded 37,731 40,000 42,000Number of these on the major river system 29,000 31,000 33,000Abstraction rate (cusec) 58,000 62,000 66,000Estimated average length of pumping day (hrs) 6 6 8Average abstraction rate over a 24 hour period 14,000 16,000 22,000

3/ Chandpur Irrigation Project 1,200 cusecBarisal Irrigation Project: 1,800 cusec

3,000 cusec

4/ Yission estimate - Imillion acres under iltivation bv traditional methods 50% fromrain river system. Required 7,000 cusec assuming at 2L hour irrigation day.

5/ 1972 estimates from World Bank's Land and Water Resources Sector Study, Volume "ITWater, Section VII D.

6/ A minimum of 40% is required for fisheries and navigation.

56

ANNEX BTable 4

BANGLADESH

LOW LIFT PUMP PROJECT

BADC Fielding5of Low Lift Pumps by District FY74-FT78

FY74 -M5, FY76 FY77 FY78

Eastern Region

Chittagong 2,712 3,162 3,263 3,108 3,611Chittagong hill tracts 318 333 303 259 281Noakhali 1,055 1,146 1,183 1,068 1,187Comilla 3,322 3,577 3,348 3,151 3,407Sylhet 3,516 3,858 3,583 3,490 3,790

Subtotal 10,923 12,076 11,680 11,076 12,279

Central Region

Mymensingh 5,293 5,661 1,830 1,201 1,584Kishorganj ' 3,860 3,600 3,973Tangail 913 980 853 651 922Dacca 3,330 3,770 3,658 2,944 3,347

Subtotal 9,336 10,341 10,201 8,396 9,826

South West Region

Faridpur 1,441 1,660 1,485 946 1,598Barisal 5,209 3,772 4,489 2,162 4,554Patuakhali 1,959 1,163 2,134 1,005 2,094Khulna 1,362 986 946 653 1,007Jessore 581 588 536 485 695Kustia 260 339 371 450 524

Subtotal 10,812 8,508 9,961 5,701 10,472

North West Region

Pabna 729 857 831 571 664Rajshahi 1,487 1,558 1,543 1,341 1,618Bogra 692 837 835 549 680Rangpur 832 937 950 504 868Pinajpur 332 420 381 223 324

Subtotal 4,072 4,609 4,540 3,188 4,154

TOTAL 35,343 35,534 36,382 28,361 36,731

Source: BADC

57

ANNEX CPage 1

BANGLADESH

LOW LIFT PUMP PROJECT

POLICY STATEMENT

1. The Government of Bangladesh has from time to time reviewed itspolicies with respect to the irrigation sector and institutional supporttherefor. The objective is to derive full benefits from current and futureinvestments in the sector through optimization of both area coverage and

cropping patterns. Simultaneously, emphasis has been laid on giving maximumaccess for small farmers and sharecroppers to the benefits of irrigation.

2. Investment in irrigation presently covers the following:

(a) Hand pumps, irrigating one third (paddy) to half of anacre (wheat), are meant for farmers with very smallholdings and low capital base.

(b) Shallow tubewells are attractive to farmers with aboveaverage or large holdings, who own them individually orin the same family. Under these circumstances, theremay also be sale of water to other farmers in the vicinity.Ownership of shallow tubewells by cooperatives of smallfarmers is also being encouraged through preferentialsales (10% down payment for cooperative as against 20%for individuals) and credit support.

(c) Low lift pumps and deep tubewells with much largercoverage are meant to benefit farmers of all categorieswithin respective command areas. Under Bangladesh landholding patterns, medium or even large land holders seldomown all their larnds in one compact block. Therefore, ifthe command area is optimized, all classes of farmersshould benefit.

(d) Medium and large irrigation like the Ganges-KobadakProject, Chandpur Irrigation Project or Barisal IrrigationProject obviously cover all farmers in the project area.

3. Hand pumps and shallow tubewells are already privately owned. Thelong term GOB objective is that low-lift pumps and deep tubewells will beowned, operated and maintained by farmers' groups. The benefits expectedfrom this transfer are:

58

ANNEX CPage 2

(a) the pumping sets will be better maintained than atpresent and more efficiently used;

(b) with control over the equipment, farmers will have ahigher degree of confidence in switching over toirrigated agriculture;

(c) the present budgetary burden on the Government will begradually eliminated releasing funds for investmentin other areas.

In the absence of large compact land-holdings except in few acres of thecountry, individual ownership of low-lift pumps and deep tubewells may gene-rate "Water-lordism" and aggravate social inequity. Ever, now there are com-plaints of group managers charging exhorbitant rates from small farmers thoughthe equipment is rented to the group as a whole at a subsidized rate. Withindividual ownership, rates of such charges to small farmers are likely toincrease. Therefore, though individual ownership of LLP sets and deep tube-wells will not be denied, emphasis will be laid on group ownership.

4. Full realization of this objective has to go along with the follow-ing developments:

(a) training of pump drivers and managers enabling them toundertake servicing and small repairs;

(b) creation of private sector capability, at least at thanalevel, to undertake repairs and overhaul. This willinclude setting up of small private workshops withgovernment assistance and training of mechanics andskilled workers to be employed in these workshops.Another requirement will be the growth of small agro-based industries where pipes, fittings and ordinaryspare parts will be manufactured at regional level;

(c) standardized domestic manufacture of irrigation equip-ment within the country to enable sale under a freemarket system and ensuring free availability of replace-ments and spare parts.

(d) Allowing sale of imported spare parts through privatedealers;

(e) organization of current irrigation groups into functioningcooperatives so that irrigation acreage is optimized andthese cooperatives are able to invest in these equipments.

5. Some actions have already been initiated by the government in thisdirection. 15,000 pump drivers and managers of groups have been trained in the

59

ANNEX CPage 3

last two years in minor repair and maintenance. This program will be con-tinued. In addition, private mechanics will be trained during the currentseason under this program. Low lift pumps were offered for sale to farmers'cooperatives three years back. Since the response was not good, sale hasbeen opened to individuals also since 1977. 61 low-lift pumps have beensold. Recently deep tubewells have also been offered on sale at 50% sub-sidized price (Tk 75,000 in total, Tk 25,000 down payment and the rest ininstalments over 5 years). The first tubewell has been sold to a cooperativein Comilla. Applications have been received from Mymensingh and Dacca. Set-ting is being implemented under the IDA Shallow Tubewells. Project coveringthe northern districts. BADC has prepared a plan for setting up of suchworkshops in other areas of the country. Bank financing has been made avail-able for all these activities.

6. During the transition period, BADC which now handles many of thesetasks, would have to play a role in encouraging and assisting the privatesector in setting up the alternative services. The eventual goal, however,would be to leave BADC with functions such as mechanics training, groundwaterand surface water surveys, and supporting services for individual farmers andfarmers' groups including assistance in water management and command areadevelopment. Without detracting from this goal, however, it should be notedthat if it is impossible to establish private sector activities in some areas,BADC may have to retain some residual maintenance and supply services in thoseareas. We expect this transitional period to extend over three to five years.

7. We recognize that with efficient use, participating farmers willhave financial benefits ad,equate to enable them to pay for the full costs ofthe LLP program. We have already indicated to you our proposals for initialincreases in the current rental rates and charges, which will culminate ina doubling of these fees over the next three years. We have also indicatedto you our marketing stratesgy for LLP sales under the project at a pricewhich implies a small subsidy of 30 percent (15 percent net of taxes andduties). It is our long-term policy to eliminate altogether financial subsidyelements for both rentals and spares, that is to achieve full cost recovery,by the end of our Second Five Year Plan (fiscal year 1984/85). The onlyexception to this policy would be if direct public intervention or subsidieswere required to ensure equitable access by small farmers to the benefitsof irrigation.

8. An integral part of our policy is to encourage the domestic manu-facture of pump and engines and eventually to standarize on domesticallymanufactured equipment. We believe the establishment of a small number ofmanufactures will, inter aLia, save foreign exchange, provide increasedemployment, thus facilitate repairs and spare parts supply, and provide ameasure of competition and farmer's choice.

60

ANNEX CPage 4

9. In mid-sixties, the Thana Irrigation Programme was launched for

organizing farmers' cooperatives around potential irrigation sources and

issue of low lift pumps and deep tubewells was restricted to such groupsonly. It is acknowledged that the desired objectives of optimization of

coverage and access of small farmers and share-croppers to benefits ofirrigation through this system has not been fully realized. We recognize

the present deficiencies of IRDP in organizing tubewell and pump groups into

efficiently managed cooperatives. The Government however, has undertaken

a number of studies for reorganization of IRDP, particularly with respectto decentralization of authority to TCCAs. In as much as IRDP today is

not fully able to organize all the tubewell groups, the Ministry of Agri-

culture and Forests/BADC has played a role in helping informal associationsof farmers to get together to obtain optimum benefits from tubewell command

areas. Nevertheless, the organization of farmers into cooperative and meetingtheir credit requirements, is clearly the responsibility of IRDP.

10. Not enough attention was given to development of optimal cropping

systems and efficient water use technology in LLP and DTW areas. An 'ActionProgramme' has been started since 1977-78 season under which combined teams

of thana-level Extension/BADC and IRDP/Cooperative Officers are working onexpansion of cooperative groups, cropping pattern and water distributivesystems around specified low-lift pumps, deep-tubewells and shallow tubewells.

This effort will be intensified.

61

ANNEX DTable 1

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Total Cost- of Project Pumpsets

Item Local Foreign Total

---------- Tk'000 -------------

a. Pumpsets -

3,000 two-cusec 3/ 5,100 59,550 64,650

5,500 one-cusec 3/ 9,350 44,110 53,460

b. Pipes and Fittings 2/

3,000 sets for two-cusec pumpsets 3,090 7,770 10,860

5,500 sets for one-cusec pumpsets 5,665 9,680 15,345

C. Spares 4/ 4,641 24,222 28,863

d. Contingencies 10% of (a + b + c) 2,785 14,533 17,318

e. Taxes and duties -/ 29,308 - 29,308

f. Transport, handling and overhead -6 17,597 3,519 21,116

Total 77,536 163,384 240,920

1/ Exclusive of Price Contingencies

2/ Annex E, Table 2 for details of pumpset cost.

3/ With coupling and trolley

4/ 20% of foreign cost of- a+b.

5/ 15% of foreign costs of pumpsets; 35% of foreign cost of spares.

6/ 10% of subtotal (a + b + c + d).

62

ANNEX DTable 2

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Cost of New Pumpsets

Type A 10-12HP Engine Type B: 6-8 HP Engine,2 cusec Pump 1.3 cusec pump

Local Foreign Total Local Foreign TotalCost Cost Cost Cost Cost Cost

…--------------------Taka----------------------A. CIF Equivalent Price

Diesel engine - 17,500 17,500 - 6,200 6,200

Pump with coupling 1,280 1,820 3,100 1,280 1,290 2,570

Pump Trolley 420 530 950 420 530 950

Pipes and fitting 1,030 2,590 3,620 1,030 1,760 2,790

Sub-total 2,730 22,440 25,170 2,730 9,780 12,510

B. Taxes and Duties

15% Customs duty onForeign Cost 3,366 - 3,366 1,467 - 1,467

Sub-total 3,366 - 3,366 1,467 - 1,467

C. Transport, Handling andOverhead

10% of total cif cost 2,097 420 2,517 1,042 209 1,251

Total Cost 8193 22,860 5,239 9,989 15,228

63

ANNEX DTable'3

BANGLADESH

LOW LIFT PUMP PROJECT

Cost Estimate for the Rebuilding of 5,000 Pumps

A. Cost of Parts per Engine Unit Costc if

Parts Required Quantity Chittagong 1/ Total Cost(Tk) (Tk)

1. Big end bearing 2 32.11 64.22

2. Main center bearings 3 37.76 113.27

3. Thrust washer 3 17.99 53.97

4. Fuel pump 1 1,267.27 1,267.27

5. Fuel filter 1 31.95 31.95

6. Lube oil filter 1 68.25 68.25

7. Gasket kit 1 14.12 14.12

8. Nozzle 2 84.63 169.26

9. Injector 1 379.18 379.18

10. Piston w/ rings 2 46.63 93.26

11. Cylinder liners 2 72.29 144.57

12. Miscellaneous Lump Sum 80.68

Total Tk 2,480.00(US$160)

B. Total foreign cost for 5,000 Engines Tk 12.4 M

Basis: A sample survey of Deutz F2L-812 engines was taken to estimate costof repairs to bring the engine back to operational order. The partsrequired are expected to be about the same for almost all of the enginesnow classed in the unserviceable category.

1/ Rates were supplied by BADC from recent orders in June 1978.

64

ANNEX DTable 4

BANGLADESH

LOW LIFT PUMP PROJECT

Total Cost-/ LLP Rebuilding Program

Item Local Roreign Total

a. Parts ----------- ___Tk'000---------------

(1) Spares 1,240 12,400 13,640

(2) Physical contingencies 2/ 186 1,860 2,046

(3) Taxes and duties 3/ 4,991 - 4,991

(4) Transport, handling and overhead 4/ 1,968 388 2,356

Sub-total 8,385 14,648 23,033

b. Mechanics Labor and Administration

(1) Labor, administration 5/ 7,750 - 7,750

(2) Physical contingencies 6/ 1,162 - 1,162

Sub-total 8,912 - 8,912

Total 17,297 14,648 31,945

1/ Excluding Price Contingencies

2/ 15% of Spares costs

3/ 35% of foreign cost

4/ 15% of a (1) + (2)

5/ Tk 1,550 per LLP

6/ 15% of b (1)

65

ANNEX DTable 5

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Building Costs for Workshop-Stores

Local Foreign Total-------------Tk'noo .--------------

a. Land acquisition 2/ 2,500 - 2,500

Physical Contingencies 3/ 300 - 300

Sub-total 2,800 - 2,800

b. Civil works

(1) Buildings - 50 Units 4/ 9,800 4,200 14,000

(2) Physical Contingencies 5/ 2,000 800 2,800

(3) Engineering and Administration 6/ 3,400 - 3,400

Sub-total 15,200 5,000 20,200

Total 18,000 5,000 23,000

1/ Exclusive of Price Contingencies

2/ One ac per facility

3/ 12% of land acquisition costs

4/ 2000 sq. ft. per structure @ Tk 140/sq.ft.

5/ 20% of b (1)

6/ 20% of b (1 + 2).

66

ANNEX DTable 6

BANGLADESH

LOW LIFT PUMP PROJECT

Thana Workshop Equipment

Unit Cost CifItem Quantity Chittagong Total Cost

(Tk '000) (Tk '000)

1. Bench vice, 4" jaw opening 2 2.0 4.0

2. Bench grinder, 10" dia. electric 1 7.7 7.7

3. Bench drill, 1/16" to 1/2", electric 1 14.0 14.0

4. Nozzle cleaning kit 1 6.2 6.2

5. Lathe, 4" height of center, about 4' bed 1 52.0 52.0

6. Transformer welding set, 300 amp 1 50.0 50.0

7. Steam cleaner, electric 1 6.2 6.2

8. Light chain hoist., 3 t. 1 3.1 3.1

9. Grease gun, hand type 10 0.8 8.0

10. Workshop tools (Annex C, Table 7) 2 sets 27.9 55.8

11. Generator, 5 kW 1 50.0 50.0

12. Miscellaneous items Lump sum 15.0

Total (per thana Workshop) 272.0

(US$ 17,548)

67

ANNEX DBANGLADESH Table 7

Page 1LOW LIFT PUMP PROJECT

Details of Proposed Thana Workshop ToolB

TOOL CHEST CONTIIC=NG:

Quantity

A. British Standard ToolB (Using A/F Sizes)

1. 3/8" Souare drive, box sockets, 3/16 " to 7/8" with all 1 sethandles, ratchet, extensions, spijners and ratchet headtorque wrench handle, click type, from 15 lb-ft to 100 lb-ft

2. Y4" Square drive, box sockets, 2BA, 3/16" to 3/8" with all 1 sethandles, ratchet, extensions, spinners etc.

3. Y2" Square drive, 3/16" to 7/8", complete with all handles, 1 setratchet, extensions etc.

4. Short handle combination wrench,3/16" to 7/16" 1 set

5. Long handle combination wrench, ~116" to Y2" 1 set

6. Open end wrenches, 316" x Y4" to 11/16"I x 7 set

B. Metric Standard Tools

1. Box sockets, 6-22 mm, complete with all types of handles, 1 setextensions and spinners, and torque handle, click type150 kg-cm to 1,0O0 kg--cm

2. Y4" Square drive box sockets, 4-14 mm complete with all types 1 setof handles, extensions, spinners and ratchet head torquehandle, 30 kg-cm to 2C0 kg-cm

3. Long handle, combination wrenches, 10-32 mm 1 set

4. Y2" Sqaare drive, box socket, 10-32 mm complete with all handles,extensions, spinners and ratchet head torque handle, 5 kg-cm to30 kg-cm

C. Other liscellaneous Tools

1. Hammer, 1 lb plastic tip 14 oz ball peen 1

if 12 oz ball peen 1

2. Hacksaw frame with 12 blades 1

3. 16" Pry bar 1

4. W4ire brush 2

5. Plier, 7Y2" gripping 1" 5" gripping 1i 7" needle nose 1

68

ANNEX DTable 7Page 2

6. Screwdriver set (Std.) 7 pieces 1 set

7. Screwdriver set (Phillips) 4 pieces 1 set

8. Punch and chisel set with chisel gauge 1 set9. 12' White tape in retractable unbreakable case 1

10. Steel -rule, 6" length marked in inches and mm 2

11. Tube cutting and flaring set in box 1 set

12. Heavy duty soldering iron, 300 W, 220 V ' 1

13. Adjustable wrenches, black finish, 3,4 " x 13/4" 2

14. Metric tap and die sets 1 set

15. British tap and die sets 1 set

16. File set, mill, 6", 8", 10", 12", 14" and 16" lengths 1 set

17. Half round file set, 6", 8", 10" and 12" lengths 1 set

18. Round file set, 6", 8", 10" and 12" lengths 1 set

19. Pipe wrenches for 1", 2", 3" and 6" 4

20. Ectra heavy duty puller for two or three jaw use with all 1 setnecessary accessories to handle gears and pulleys to 20"dia. and a reach of 20"

21. Puller, 3 jaw type with 14" reach and 15" spread complete 1 setwith all accessories

22. Bearing puller set, complete with collets, pressure screw, 1 setyoke bridge, expanding rods and all accessories for bearings5/16" through 1Y8" and 1" through 13/4 "

23. Puller, 3 jaw type with 9Y2" reach and 13" spread completewith all, accessories

24. "L" shaped metric hex head wrenches, 2 mm to 19 mm in kit bag 2 sets

D. Gauges and Testers

1. IMetric feeler gauge, 20 blades, 0.05 to 1.00 mm 10

2. British feeler gauge, 25 blades, 0.0015" to 0.025" 10

3. Compression gauge set measuring 0-250 psi and in metric 1 set0-12 kg/cm 2 with flexible adapter and other short adapters

E. Estimated cost per thana workshop (cif Chittagong) - Tk 27,900 (US$1,800).

69

ANNEX D

Table 8

BANGLADESH Page 1

LOW LIFT PUMP PROJECT

Zonal Workshop Equipment

I. HAND TOOLS

A. Metric Tool set

comprising the fcollowing:

1. ¼" Drive socket

2. 3/8" Drive socket

3. ½" Drive socket

4. Punch & chisel set

5. Combination WTench set

6. Phillips screwdriver set

7. Standard screwdriver set

8. Boxsocket wrench set (long)

9. Boxsocket wrench set (short)

10. 7½" Gripping plier

11. 5" Gripping plier

12. 7¼" Diagnal cutter

13. 7" Needle nose plier

14. 7-3/4" Battery plier

15. 16" Pry bar

16. Wire brush

17. 1 lb plastic tip hammer

18. 4 oz Ball peen hammer

19. 12 oz Ball peen hammer

20. Cotter pin pu:Ller

70

ANNEX DTable 8Page 2

Zonal Workshop Equipment

2.1. Carbon scraper

22. Spark plug gauge

23. Feeler gauge

24. Ignition point file

25. Hacksaw frame with blades

26. Spark plug flexsocket

27. Screw starter

28. Spark test screwdriver

Special Metric Tools Quantity

1. 1" sq drive, standard length sockets, impact type,6 point ranging from 19 mm to 75 mm complete withhandles, extensions and ratchet .. .. 1 set

2. Standard open end 6 x 7 mm to 30 x 32 mm I set

3. Pipe wrench, 1" capacity 1

4. Pipe wrench, 3" capacity 1

5. Pipe wrench, 5" capacity 1

6. Tube cutting and double flaring tool set 1 set

7. Small diameter tube bender 1

8. Tap and die set 1 set

9. Medium duty combination puller set complete 1 set

10. 20-ton Heavy duty bar type puller set complete with20-ton hydraulic jack, adaptors etc. 1 set

11. 'L' shaped wrenches 2 mm to 19 mm in kit bag I set

B. British standard tools (Using A/F sizes) 1 set

1. ¼" Drive socket, 12 point, standard

2. ¼" Drive socket, 6 point, deep71

ANNEX D

Table 8Page 3

Zonal Workshop Equipment

3. 3/8" Drive socket, 12 point, standard

4. ½" Drive socket, 12 point, standard

5. Punch and chisel set

6. Combination wrench set

7. Phillips screwdriver set

8. Standard screwdr:Lver set

9. Boxsocket wrench set (long)

10. Boxsocket wrench set (short)

11. 7½" Gripping plier

12. 5" Gripping plier

13. 7k" Diagenal cutter

14. 7" Needle nose plier

15. 7-3/4" Battery plier

16. 16" Pry bar

17. Wire brush

18. 1 lb Plastic tip hammer

19. 4 oz Ball peen hammer

20. 12 oz Ball peen hammer

21. Cotter pin puller

22. Carbon scraper

23. Spark plug gauge

24. Feeler gauge

25. Ignition point fi:Le

26. Hacksaw frame with blades

27. Spark plug flexsocket

28. Screw starter

29. Spark test screwdriver

72

ANNEX DTable 8Page 4

Zonal Workshop Equipment

C. British special tools (Using A/F sizes)

1. 1" sq Drive, standard length, block impact type,6 point ranging from 3/4" to 3-5/8" complete withhandles, extensions and ratchet 1 set

2. Standard open end ¼" x 5/16" to 1-7/16" x 1-5/8" 1 set

3. Pipe wrench, 1" capacity 1

4. Pipe wrench, 3" capacity 1

5. Pipe wrench, 5" capacity 1

S. Tube cutting and double flaring tool set I set

7. Small diameter tube bender 1

8. Tap and die set 1

9. 'L' shaped wrenches 0.028" to 3/4" 1 set

10. Torque meter in English and metric, 3/8" sq driver150 lb-in/175 kg-cm 2

11. Torque meter in English/metric, ½" sq drive,175 lb-ft/25 kg-m 2

12. Torque meter in English/metric, 3/4" sq drive,360 lb-ft/50 kg-m 2

13. Micrometer sets, 0"-1", 1"-2", 2"-3", 3"-4" 1 set

14. Rod design inside measuring micrometer 1½"-8" range 1 set

15. AVO meter with all accessories 1 set

16. Compression gauges set 1 set

D. Miscellaneous Items Lump sum Tk 2,325/set

Cost per set = Tk 40,300 (US$2,600)

Total cost per workshop (2 sets) = Tk 80,600 (US$5,200).

73

ANNEX DTable 8Page 5

Zonal Workshop Equipment

II. WORKSHOP Equipment Unit CostCif

Item Quantity Chittagong Total Cost

1. Bench type wet valve refacers complete (Tk '000) (Tk '000)with accessories 1 46.50 46.5

2. Valve seat grinders and cutters,complete with accessories 1 19.38 19.4

3. Diesel fuel pump test bench 1/ 1 147.25 147.3

4. Pump test stand 1/ 1 62.00 62.0

5. Injector test bench 1/ 1 38.75 38.8

6. Nozzle analyzer 1/ 1 24.80 24.8

7. Nozzle test master 1/ 1 12.40 12.4

8. Injector reconditioning machine 1/ 1 37.20 37.2

9. Nozzle multi-cleaner 1/ 1 12.40 12.4

10. Nozzle inspection viewer 1/ 1 6.20 6.2

11. Nozzle cleaning kit 1/ 1 6.20 6.2

12. Diesel engine exhaust analyzer 1/ 1 21.70 21.7

13. Engine spot check kit 1/ 1 9.30 9.3

14. Fuel feed pump tester kit 1/ 1 4.65 4.7

15. Pneumatic governor tester 1/ 1 4.65 4.7

16. Steam cleaner, with electric motor 1 7.75 7.8

17. Transformer welding set with accessories 1 77.50 77.5

18. Gas welding set complete with gas cylinders 1 set 12.40 12.4

19. Miscellaneous items Lump Sum 50.0

Total 601.3

(US$38,794)

1/ Hartridge type or equivalent.

74

ANNEX DTable 9

BANGLADESH

LOW LIFT PUMP PROJECT

Incremental Requirement for Each RegionalWorkshop-cum-Diesel Training Center

Unit CostCif

Item Quantity Chittagong Total Cost(Tk '000) (Tk '000)

1. Diesel fuel pump test bench 1/ 2 147.25 294.5

2. Pump test stand 1/ 2 62.00 124.0

3. Injector test bench 1/ 2 38.75 77.5

4. Nozzle analyzer 1/ 2 24.80 49.6

5. Nozzle test master 1/ 2 12.40 24.8

6. Injector reconditioning machine 1/ 2 37.20 74.4

7. Nozzle reconditioner 1/ 2 18.60 37.2

8. Nozzle multicleaner 1/ 2 12.40 24.8

9. Nozzle inspection viewer 1/ 2 6.20 12.4

10. Nozzle cleaning kit 1/ 3 6.20 18.6

11. Diesel engine exhaust analyzer 1/ 1 21.70 21.7

12. Engine spot check kit 1/ 3 9.30 27.9

13. Fuel feed pump tester kit 1/ 3 4.65 14.0

14. Pneumatic governor tester 1/ 2 4.65 9.3

15. Miscellaneous testing gauges and meters lot 99.20 99.2

16. Steam cleaner, with electric motor 1 7.75 7.8

17. Assorted tools 2/ 3 sets 40.30 120.9

18. Miscellaneous Lump Sum 50.0

Total 1,088.6

(US$ 70,230)

1/ Hartridge type or equivalent.

2/ Same set of tools outlined in Annex C Table 8.

ANNEX DTable 10

BANGLADESH

LOW LIFT PUMP PROJECT

Coolbox-/ for Pumpset Mechanics

Fundamental too:Ls which each field mechanic should have comprise:

3/8" square drive consisting of:

Ratchet 1

Speeder 1

Breaker bar 1

3" Extension 1

6" Extension 1

12" Extension 1

Universal joint 1

Hexagonal sockets - (A/F sizes) - 4BA through 9/16" - BSW - 12 pieces

- 8 mm through 26 mm - metric - 17 pieces

Combination wrench (A/F sizes) - 3/16" through 7/16" - BSW - 7 pieces

- 10 mm through 32 mm - 19 pieces.

Screwdriver set - 5 pieces (including 2 Phillips)

Gripping plier - 1 piece

Diagonal cut:ter - 1 piece

Needle nose plier - 1 piece

8 oz Ball peen hammer - 1 piece

16 oz Ball peen hammer - 1 piece

16 oz Plasti.c tip hammer - 1 piece

16" Pry bar - lpiece

Punch & chisel - 1 set

Feeler gauge - 1 piece, 6" adjustable wrench - 1 piece

1/ Steel Chest.Estimated cost per set (elf Chittagong) * Tk 3,100 (US$200)

76

ANNEX DTable 11

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Costs -/ of Workshop Equipment, Tools, Toolboxes, and Spares

Item Local Foreign Total

a. Equipment and Tools -------------Taka '000-----------

(1) Thana workshops (100) 1,360 27,200 28,560

(2) Zonal workshops (5) 171 3,411 3,582

(3) Regional workshops (3) 163 3,266 3,429

(4) Toolboxes for mechanics (1,000) 155 3,100 3,255

(5) Physical contingencies 2/ 185 3,698 3,883

(6) Taxes and duties 3/ 14,236 - 14,236

(7) Transport, handling and overhead 4/ 3,559 712 4,271

Sub-total 19,829 41,387 61,216

b. Spares for Annual Repairs

(1) Spare parts 1,100 10,990 12,090

(2) Physical contingencies 5/ 170 1,643 1,813

(3) Taxes and duties 3/ 4,418 - 4,418

(4) Transport, handling and overhead 6/ 1,752 341 2,093

Sub-total 7,440 12,974 20,414

Total 27,269 54,361 81,630

1/ Excluding Price Contingencies

2/ 10% of a (1+2+3+4)

3/ 35% of foreign costs

4/ 10% of total cost net of taxes and duties

5/ 15% of b (1)

6/ 15% of total cost net of taxes and duties. 77

BANCLADESH

LOW LIFT PUMP PROJECT

Transport Requirement for Project Field Operation

Qty. Station inspection Pick-up Truck Tank lorry Motorcycle Inspectioni boat Tug boat Dumb barge

wagon vehicle 5-6 Ton 2,000 IG 90 cc 28' 14' 25-ton

4 WD 4 WD

1. Project Director I 1 - 1 - - - I - - -

2. Executive Enigineer 8 _ 8 - 15 10 - _ - 1 2

3. Asst. Engineer 29 - 4 10 - - - - 15 - -

4. Unit and Subunit Officer 285 - - - - - 249 - 34 - -

5. Controller of Accounts I - 1 - - - - - - - -

6. Asst. Controller Accounts 6 - - - - - 6 - - - -

TOTAL REQUIlREMENTS I 13 11 15 10 255 1 49 1 2

Existing (-) - 8 - 7 7 - - - - -

Net Requirement 1 5 11 8 3 255 1 49 1 2

CT

ANNEX DTable 13

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Cost I/ of Transport Vehicles

Quan-tity Unit Cost Local Foreign Total

(US $) -------- ---Taka '000---------

a. Station wagon (4WD) 8,000 - 124 124

b. Inspection Vehicle (4 WD) 5 7,000 - 542 542

c. Small Pick-up 11 4,500 - 775 775

d. Truck (5-6 tons) 8 12,000 - 1,488 1,488

e. Tank lorry (2,000 imp. gal.) 3 13,000 - 605 605

f. Motorcycle (90 cc)! 255 750 - 2,960 2,960

g. Inspection boat (28 ft, inboardengine 1 56,000 - 868 868

h. Speedboat (14 ft, 25 hp outboardengine 49 3,500 - 2,666 2,666

i. Tugboat 1 80,000 - 1,240 1,240

J. Dumb barge (25-ton) 2 30,000 - 930 930

k. spares 2/ - - - 2,899 2,899

1. Physical Contingencies 3/ - 760 760

Subtotal - 15,857 15,857

Taxes and Duties 4/ 14,322 - 14,322

Transport, handling and overheads 5/ 1,442 3,372 1,814

Sub-total 15,764 372 16,136

Total 15,764 16,229 31,993

1/ Excluding Price Contingencies2/ 20% of foreign costs3/ 5% of foreign costs4/ 133% for land vehicles; for boats; and 35% for spares.5/ 11% of total costs before taxes and duties.

79

ANNEX DTable 14Page 1

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Costs 1/ of Training Component

Item Local Foreign Total-- Tk'O00…--------______

a. Buildings

(1) Civil Works - Classroom,and Workshop 2/ 1,085 465 1,550

(2) Civil Works - Dormitory 3/ 1,845 790 2,635

(3) Sanitary and eletrical fittings, furniture 4/ 403 279 682

(4) Tables and workbenches 5/ 93 - 93

Subtotal 3,426 1,534 4,960

(5) Physical Contingencies 6/ 512 *232 744

(6) Engineering and Administration 7/ 388 186 574

Subtotal 9S0 418 1,318

Total (one center). 4,326 1,952 6,278

Total (three centers) 12,978 5,856 18,834

b. Teaching Aids

(1) Slide projector, 16 mm projector,

miscellaneous materials 16.0 46.0 62.0

(2) Physical Contingencies 8E/ 3.1 9.3 12.4

Total (one center) 19.1 55.3 74.4

Total (three centers) 57.3 165.9 223.2

Footnotes on p.. 3

80

ANNEX DTable 14Page 2

Item Local Foreign Total

-______ 0OOQ_________________

c. Vehicles

(1) Inspection Vehicles 4WD (2/center) - 217.0 217.e

(2) Pick-up 4WD (1/center) - 124.0 124.0

(3) Motorcycle 90cc (4/center) - 46.0 46.0

(4) Bicycles (2/center) 1.5 1.5 3.0

(5) Spares 9/ - 77.5 77.5

Subtotal 1.5 466.0 467.5

(6) Physical Contingencies 10/ - 46.5 46.5

(7) Taxes and Duties 11/ 596.8 - 596.8

(8) Transport, handling, overheads 12/ 41.8 9.3 51.1

Subtotal 638.6 55.8 694.4

Total (one center) 640.1 521.8 1,161.9

Total (three centers) 1,920.3 1,565.4 3,485.7

d. Staff and Allowances

(1) Diesel Engine Specialists (3 x 42 manmonths) 13/ 1,757.7 17,577.0 19,334.7

(2) Mechanical Engineer (2 x 12 manmonths) 13/ 334.8 3,348.0 3,682.8

(3) Local Staff 4,267.9 - 4,267.9

(4) Allowances for mechanic-trainees 14/ 4,017.6 - 4,017.6

(5) Allowances for mgr/operator-trainees 15/ 4,687.2 - 4,687.2

Subtotal 15,065.2 20,925.0 35,990.2

(6) Physical Contingencies 16/ 636.0 2,092.5 2,728.5

Total (Three Centers) 15,701.2 23,017.5 38,718.7

Training Grand Total 30,656.8 30,604.8 61,261.6

Footnotes on page 3.81

ANNEX DTsible 14Page 3

1/ Net of Price Contingencies

2/ Groundfloor, concrete flooring, 10,000 sq. ft. @ Tk 155/sq. ft.

3/ Upper floor of classroom-workshop facility. Reinforced concrete structures withconcrete flooring and roofing @ Ik 264/sq ft

4/ for 60 trainees @ Tk 11,470/trainees

5/ for 60 trainees @ Tk 1,550/trainees

6/ 15% of Building Subtotal

7/ 10% of Building Subtotal and Physical Contingencies

8/ 20% of b (1)

9/ 20% of c (1+2+3+4)

10/ 10% of c (1+2+3+4+5)

11/ 133% for vehicles; 35% for bicycles and spares

12/ 10% of Vehicles Subtotal and Physical Contingencies

13/ at US$9,000/manmonth

14/ 4,320 trainees

15/ 15,120 trainees

16/ 10% of d (1+2+3)

82

ANNEX DTable 15

BANGLADESH

LOW LITT PUMP PROJECT

Annual Cost for Local Staff at Regional Training Center

Taka

1. Executive Engineer, 1 at Taka 2, 276/mo. x 12 months 27,312

2. Assistant Engineer, 4 at Tk 1,716/mo. x 12 months 82,368

3. Unit Officer, 4 at Tk 955/mo. x 12 months 45,840

4. Office Superintendent, 1 at Tk 955/mo. x 12 months 11,460

5. Upper Div. Assistant, 2 at Tk 955/mo. x 12 months 22,920

6. Lower Div. Assistant/Typist, 4 at Tk 663/mo. x 12 months 31,824

7. Draftman, 1 at Tk 663/mo. x 12 months 7,956

8. Vehicle Driver, 5 at Tk 663/mo. x 12 months 39,780

9. Peon, 8 at Tk 350/mo. x 12 months 33,600

10. Watchman, 2 at Tk 663/mo. x 12 months 15,912

Total 273,584

Allowances and overhead 82,075

Sub-total (per center) 1,067,000

83

ANNEX DTable 16

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Costs 1/ of Water Availability Survey Component

Item Local Foreign Total____________ Tk'00… _____

a. Technical Assistance

Land and Water Resource Engineers (Consultants) 2/ 596.0 5,022.0 5,518.0

Legal (Consultant) 4 manmonths 3/ 62.0 558.0 620.0

Physical Contingencies 4/ 55.8 558.0 613.8

Subtotal 613.8 6,138.0 6,751.8

b. Transport Vehicles

Field vehicles - 4WD (3) - 325.5 325.5

Speed boat with 25 HP outboard motor (2) - 108.5 108.5

Spares 5/ - 93.0 93.0

Physical Contingencies 6/ - 46.5 46.5

Taxes and duties 7/ 604.5 - 604.5

Transport, handling & overhead 8/ 46.5 - 46.5

Subtotal 651.0 573.5 1,224.5

c. Office Equipment 232.5 77.5 310.0

Physical tontingencies 9/ 46.5 15.5 62.0

Taxes and duties 10/ 31.0 - 31.0

Subtotal 310.0 93.0 403.0

TOTAL 1,574.8 6,804.5 8,379.3

1/ Exclusive of Price Contingencies2/ 36 man-months @ US$9,000/man-month (foreign cost)3/ 4 man-months @ US$9,000/man-month (foreign cost)4/ 10% of total consultancy costs6/ 20% of total vehicle costs7/ 133% for land vehicles, 70% for boats, 35% for spares8/ 10% of total net of taxes and duties9/ 20% of office equipment cost10/ 35% of foreign cost of equipment

84

ANNEX ETable 1

BANGLADESH

LOW LIFT PUMP PROJECT

Estimated Schedule of IDA Disbursements

AccumulatedDisbursements Disbursements

-------------- Us$-

July-December 1980 12.0 12.0January - June 1981 4.0 16.0

July - December 1981 3.5 19.5January - June 1982 3.5 23.0

July - December 1982 3.5 26.5January - June 1983 3.5 30.6

July - December 1983 3.0 33.0January - June 1984 2.0 35.0

July - December 1984 2.0 37.0

85

BANGLADlESH

Low Lift Pump Project

Prolect Acreage.Production,and Labor Requirements

Presently Irrigated Area Newly Irrigated Area Total Total

P W W P W W P W W N-P W-P W-W

Net (ultivated area ('000 ac) 637.2 637.2 637.2 208.6 208.6 208.6 845.8 845.8 845.8 - - -

Cropped area ('000 ac)

PaddyAu s 61.2 194.0 61.2 63.5 63.5 20.0 124.7 257.5 81.2 132.8 -43.5 -176.3Vr hatan(local) 590.3 548.6 548.6 193.3 179.6 179.6 783.6 728.2 728.2 -55.4 -55.4 -

I .snan(iIYV) 46.8 88.6 88.6 15.3 29.0 29.0 62.1 117.6 117.6 55.5 55. -

Boro 323.9 - 323.9 - 106.1 323.9 - 430.0 -323.9 106.1 430.0

Paddy Sob-total 1,022.2 831.2 1,022.3 272.1 272.1 334.7 1,294.3 1,103.3 1,357.0 -191.0 62.7 253.7

Other CropsPulses 61.2 61.2 61.2 20.0 20.0 20.0 81.2 81.2 81.2 - - -

Oilseeds 63.7 63.7 63.7 20.9 20,9 20 84.6 84.6 84.6

Other Crop Subtotal 124.9 124.9 124.9 40.9 40.9 40.9 165.8 165.8 165.8

Total All Crops 1,147.1 956.1 1,147.2 313 .0 313.0 375.6 1,460.1 1.269.1 1,522.8 -191.0 62.7 253.7

Overall Croppioig Iltensity 1.80 1.50 1.80 1.50 1.50 1.80 1.73 1.50 1.80

Crop Production ('000 tons)

PaddyAus 32.0 101.3 32.0 33.0 33.2 10.4 65.0 134.5 42.4 69.5 -22.6 -92.1

T.Atan(local) 396.3 368.3 368.3 129.8 120.6 120.6 526.1 488.9 488.9 -37.2 -37.2 -

T.Aman(HYV) 52.4 99.1 99.1 17.1 32.5 32.5 69.5 131.6 131.6 62.1 62.1 -

boro 447.0 - 447.0 - - 146.4 447.0 - 593.4 -447.0 146.4 593.4

Paddy Sub-total 927.7 568.7 946.4 179.9 186.3 309.9 1,107.6 755. 1,256.3 -352.6 148.7 501.3

itil. r ( -Pulseu 16.0 16.0 16.0 5.2 5.2 5.2 21.2 21.2 21:2 - -

Oil.eeds 14.2 14.2 14.2 4.7 4.7 4.7 18.9 18.9 18.9 - _ _

Other Cro,p Sub-total 30.2 30.2 30.2 9.9 9.9 9.9 40.1 40.1 40.1 - - -

Total All Crops 957.9 598.9 976.6 189.8 196.2 319.8 1,147.7 795.1 1,296.4 -352.6 148.7 501.3

L.bor K,qeiren,ent (million mandays)

Family 52.5 37.0 52.9 12.7 12.1 17.3 65.2 49.1 70.2 -16.1 5.0 21.1Hiir,L-In 27.1 21.3 27.0 e .3 7.. .9 33.4 28.3 35.9 - 5.1 2.5 7.6Iota I Pe<quitOlSOLv 79.6 58.3 79.9 19.0 19.1 26.2 98.6 77.4 106.1 -21.2 7.5 28.7

0"

ANNEX F

Table 2a

BANGLADESH

LOW LIFT PUMP PROJECT

Cropping Patterns -- Cutrently Irrigated Farms 1/

1 Acre Farm 3 Acre Farm 7 Acre Farm

Cropped Area (in acres) P W W P W W P W W

Paddy

Aus 0.1 0.4 0.1 0.3 0.9 0.3 0.6 1.5 0.6

T. Aman (Local) 0.9 0.8 0.8 2.8 2.6 2.6 6.6 6.4 6.4

T. Aman (HYV) 0.1 0.2 0.2 0.2 0.4 0.4 0.4 0.6 0.6

Boro (HYV) 0.6 - 0.6 1.5 - 1.5 3.0 - 3.0

Pulses 0.1 0.1 0.1 0.30 0.30 0.30 0.6 0.6 0.6

Oilseeds 0.1 0.1 0.1 0.30 0.30 0.30 0.7 0.7 0.7

Total Cropped Area 1.90 1.6 1.90 5.4 4.5 5.4 11.9 9.8 11.9

Net cultivated area 1.00 1.0 1.00 3.0 3.0 3.0 7.0 7.0 7.0-

Cropping Intensity % 190 160 190 180 150 180 170 140 170

1/ P = Present

W = Future without ProjectW = Future with Project.

87

ANNEX FTable 2b

BANGLADESH

LOW LIFT PUMP PROJECT

Cropping Pa:terns -- Newly Irrigated Area 1!

1 Acre Farm 3 Acre Farm 7 Acre Farm

Cropped Area (in acres) P' W W P W W P W W

Paddy

Aus 0.4 0.4 0.1 0.9 0.9 0.3 1.5 1.5 0.6T. Aman (Local) 0.9 0.8 0.8 2.8 2.6 2.6 6.6 6.4 6.4T. Aman (HYV) 0.1 0.2 0.2 0.2 0.4 0.4 0.4 0.6 0.6Boro (HYV) - - 0.6 - - 1.5 - - 3.0

Pulses 0.1 0.1 0.1 0.3 0.3 0.3 0.6 0.6 0.6Oilseeds 0.1 0.1 0.1 0.3 0.3 0.3 0.7 0.7 0.7

Total Cropped Area 1.6 1.6 1.9 4.5 4.5 5.4 9.8 9.8 11.9Net cultivated area 1.0 1.0 1.0 3.0 3.0 3.0 7.0 7.0 7.0Cropping Intensity % 160 160 190 150 150 180 140 140 170

1/ P = Present

W = Future without ProjectW = Future with Project

88

BANGLADESH

LOW LIFT PUMP PROJECT

Monthly Labor Requirements for Various Crops(man-days/ac)

Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. Total

1. Aus P 0 0 7 13 2 2 12 9 0 0 0 0 45

W 0 0 7 13 2 2 12 9 0 0 0 0 45

w 0 0 7 13 2 2 12 9 0 0 0 0 45

2. T.Aman (Local) P 0 0 0 0 0 7 14 20 3 3 15 8 70

W 0 0 0 0 0 7 14 20 3 3 15 8 70

w 0 0 0 0 0 7 14 20 3 3 15 8 70

3. T. Aman (HYV) P 0 00 0 0 0 7 15 21 4 4 16 10 77

W 0 0 0 0 0 7 15 21 4 4 16 10 77

W 0 0 0 0 0 7 15 21 4 4 16 10 77

4. Boro (HYV) P 12 29 4 4 12 20 0 0 0 0 0 4 85

v 12 29 4 4 12 20 0 0 0 0 0 4 85

W 12 29 4 4 12 20 0 0 0 0 0 4 85

5. Pulses P 3 2 20 0 0 0 0 0 0 0 3 7 35

W 3 22 20 0 0 0 0 0 0 0 3 7 35

W 3 2 20 0 0 0 0 0 0 0 3 7 35

6. Oilseeds P 3 2 20 0 0 0 0 0 0 0 3 7 35

W 3 2 20 0 0 0 0 0 0 0 3 7 35

W 3 2 20 0 0 0 0 0 0 0 0 7 35

Xq c

m e4

(IX

co0o

bANGLADESII

LOW LIFT PUMP PROJECT

Crop Input Requirements

Atis T. Amani (Local) T. Aman (HYV) _ Boro (UYV) Pulses Oilseeds

P W W P _ W P w w P w w P w w P w u

Fertilizer and Pestices

Urea (467. N) (mds/ac) 0.1 0.1 0.1 0.3 0.3 0.3 1.0 1.0 1.0 1.8 1.8 1.8 - - - _ _ _

TSP (467. P265) (mds/ac) - - - 0.1 0.1 0.1 0.5 0.5 0.5 0.8 0.8 0.8 - - - - - -

MP (60°Z K) (mds/ac) - - - - - - 0.2 0.2 0.2 0.3 0.3 0.3 - - - _ _ _

Plant Protection (Tk/ac) - - - 10 10 10 10 10 10 20 20 20 - - - - - -

Annual Family and Hired Labor

Preparation (m-d/ac) 18 18 18 22 22 22 22 22 22 22 22 22 10 10 10 10 10 10

Planting and Nursery (lu-d/ac) 2 2 2 i8 i8 i 8 18 i 8 18 20 20 20 2 2 2 2 2 2

Crop Management (m-d/ac) 6 6 6 10 10 10 12 12 12 14 14 14 5 5 5 5 5 5

Harvesting and Threshing (m-d/ac) 19 19 19 20 20 20 25 25 25 29 29 29 18 18 18 18 18 18

Subtotal (m-d/ac) 45 45 45 70 70 70 77 77 77 85 85 85 35 35 35 35 35 35

other Inpujts

Animal Power (a-d/ac) 15 15 15 17 17 17 17 17 17 17 1/ 17 8 8 8 8 8 8

Seed (m-d/ac) 1.0 1.0 1.0 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.2 0.2 0.2

Miscellaneouis (Tk/ac) ---------------------------------- - - - -- _-- 10% of costs --------- ------------------

0

BANC.LAUESH

LOW LIFI PUMP PROJECr

( in Taka )Farm Budget Esrimates

One Acre Fanm Three Acre Farm Seven Acre "arm

/2 /3 P-Case A P-Case d W-Cases A&B W-Cases A6B P-Case A P-Case B U-Cases A6& W-Cares A6B P-Case A P-Case B 1i-Cases A6B W-Cases AB

9ross Valuc of Productioi t

A.s 108 431 431 108 323 970 970 323 647 1,617 1,617 647

'r. AMan - lucal 1,328 1,328 1,181 1,181 4,133 4,133 3,838 3,838 9,742 9,742 9,446 9.446

T. Aman IIYV 246 246 492 492 492 492 984 984 984 984 1,476 1.476

Boro 1,665 - - 1,665 4,162 - - 4,162 8,325 - - 8,325

Pulses 46 46 46 46 136 136 136 136 273 273 273 273

jilseeds 129 129 129 129 387 387 387 387 903 903 903 903

Total 3,522 2,180 2,279 3,621 9,633 6,118 6,315 9,830 20,874 13,519 13,715 21,070

CerLai"ty Eq.uialept of GVP /4 2,901 1,744 1,823 2,980 7,914 4,894 5,052 8,072 17,115 10,815 10,972 17.272

C.st of fanm inpucs

Hired-in labor - - - - 583 528 539 583 4,411 3,267 3,278 4,411

hBlloCk labor 454 369 369 454 1,287 1,040 1,040 1,287 2,841 2,278 2,278 2,841

Seed 78 72 74 79 217 191 194 220 472 397 400 475

Plaut Protection 22 10 10 22 60 30 30 60 130 70 70 130

Fertil izerllrea 146 41 48 153 215 113 127 229 460 253 267 474

rsP 34 8 10 36 87 21 26 91 180 47 52 184

MP 9 1 2 10 22 2 4 24 44 4 5 46

Fertilizer sub-total 189 50 60 199 324 136 157 344 684 304 324 706

?lcSellaneous/5 74 50 51 75 247 179 196 249 854 632 635 856

Shlort-'iTnn, Credit /6 96 32 37 100 53 35 37 55 229 154 155 230

Cost of Production Sub-total/7 913 583 601 929 2,771 2.139 2,193 2,798 9,621 7,102 7,140 9,649

Cost of Family Labor /8 1,465 1,053 1,060 1,473 3,531 2,475 2,475 3,542 4,609 3,399 3,399 4,631

managmenLt Fee /9L 137 87 90 139 416 321 329 420 1,443 1,065 1.071 1.447

Cost of Production Total 2,515 1,723 1,751 2,541 6,718 4,935 4.997 6,760 15,673 11,566 11,610 15,727

I.plicit kent 386 21 72 439 1,196 - 41 55 1,312 1,442 -751 - 638 1,545

lCLigati.. Rent (W-1W) 367 1,257 Z,183

(1,545)110

(rritgation Rent per Acre Boro) (612) (838) (728)

(515)/10

Current Estreated Water Charges /11 210 525 1,050.

Balanlce of Irrigation Rent 157 232 1,133

(Per acre Boro) (262) (488) (378)

(165)/10

/I P = Frcsesn, w - Without Project; W= With Project.

j2 I.dn pr-ce-tly under irrigation.

/3 I.nd pre-ently without irrigation./4 Certainty Eq.ivalenLta (CE) of .85 for Boro and .80 for other crops.

/5 101° ot preceding *osts.

6 ive-.month bor-owcigs to cover 50% of hired i,, labor costs, 100% of plant protection costs, 1007, of fertilizer costs, and 257. of seed costs.

A-u-pLion -ade that one-acre farmer uses lon-inscitutional credit at 1007 p. a, interest, and others use institucional credit at EgMOP rate of 17.5% p..F

-IE.tudes fanily labor costs and water charge.

/1 Ac an smput.rd ccci of Tk Il/day; based on a monthly peak family labor availability of 40 san-days. .4

9 1'1;. of C-Lb ot Plr.d-xt-o Snb.bral.

F_ tl igic.cs urgati-e W implicit rent.7!T For 0.6 aC born on 1 ac farn; 1.5 ac itor. - 3 at farm; and 3 at Boro o- 7 ac farm.

BANGLADESH

LOW LIFT PUMP PROJECT

Farm Income Estimates

One Acre Farm Three Acre Farm Seven Acre Farm

1 2 3 W 1 2 3 W 1 2 3

Certainiry Equivalent of Gross Value of Production /a 1,823 2,980 2,980 2,980 5,052 8,072 8,072 8,072 10,972 17,272 17,272 17,272

Fanrm Costsa. Production Costs 601 929 929 929 2,193 2,798 2,798 2,798 7,140 9,649 9,649 9,649

b. Water charge /a - 210 221 270 - 525 551 675 1,050 1,100 1.550

Total farm costs 601 1,139 I1,1 5 1i 199A 1,323 3,349 3, 6 i3 7.140 10.699 10,749 10,999

Net Farm Incone 1,222 1,841 1,830 1,781 2,859 4,749 4,723 4,599 3,823 6,573 6,523 6,273

Net Farm Income per Cultivated Acre 1,222 1,841 1,830 1,781 953 1,583 1,574 1,533 547 939 932 896

1 2 3 -

Inicreim.ental Net Farm Income (W , W , W, - W) - 619 608 559 - 1,890 1,864 1,743 - 2,741 2,691 2,441

Incremental Net Farm Income per Cultivated Acre - 619 608 559 - 630 621 580 - 392 384 349

w1 Future with Project: existing rental rates.

W2 = Future with Project: doubied rental rates.

W3 = Future with Project: sales program

/a = Reference Annex Tables 5 and 7.

m.D

BANClADESli

LOW LIFT FIiP PROJECT

Sensitivity Tests on Irrigation Rent and Net Fare. Income(in Taira)

Balance of Irrigation Rent Net Farm Incone (W) IncremenLal Net Farm IncomeSenisitivicy per Acre of Borog/ per Cultivated Acre!' per Cultivated Acre2/

One Acre Farm Three Acre Far. Seven Acre Farm One Acre Fare Three Acre Far, Seven Acre Farm One Acre Farm Three Acre Farm Seven Acre Farm

Bdse 262 488 378 1,841 1,5B3 939 619 630 392(165)1I/

1. Doubling of Vlump Rental Rate3/ 244 470 (S) 1,830 1,574 932 608 621 385

2. Dushliag of lPump Rent7,1 Rateand Repair Charge- 233 459 349 1,824 1,569 927 602 616 380

(136)3. Full Capital Cost Recovery (Rencal),-!

Existing Repair Charge 160 386 276 1,780 1,532 895 558 579 348(63)

4. Full Capital Cost Recopvry (Rental),and Full Repair Charge6 141 367 257 1,769 1,523 887 547 570 340

(44)5. Full Capital Cost Recovery (Rental),

Full Repair Charge. Full Indirect0&611 Charge?/ 58 284 (..q4 1.719 1.481 852 497 528 305

6. Full Capital Cost Recovery (Rental)with puapset T&D, Full Repair ChargewiLI Spares TD, Full Indirect O0M 8/ 38 264 154 1,706 1,471 843 484 518 296

(-59)7 Aninuity under l-cusec Pump Sales Program

i,,cludi,,g 40% Subsidy, Full Repair Chargewith Taxes and Duties on Spares 9/ 162 388 278 1,781 1,533 896 559 580 349

( 65)8. Annuity under 1-cusec Pump Sales Program

including no Subsidy, Full RepairCharge 10/ 102 328 218 1,745 1.503 870 523 550 323

(5)9. Annuity under I-cusec Pump Sales Program

Including Pumpset T&D and no Subsidy,Full Repair Charge 11/ 91 317 207 1,738 1,497 866 S16 544 319

(-6)

1, Reference Annex G, Table 5.2/ Reference Annex C, Table 6.3/ Assuming 20 acres irrigated per cusec, doubling of rencal rate implies an additional TK 17.5 per ac for tie one cusec pump case and TK 15 for th two cusec pnup case. In the

calculation, the higher increment was utilized.4/ Assuming 20 acres irrigated per cusec, doubling of rental rate and of repair charge implies and additional TK 28.8 per acre for the one cusec pump case and TK 22.5 for the two

cusec pump case. In the calculAtion, the one cusec increment was utilized.5/ Assuminig pumpset life of 7 years, trolley life of 12 years, and pipe and fittings life of 10 years, scrap value 10%, interest 12% p.a. full cost recovery implies a rental charge

ot TK 2,396 or on additional Tr. 102.30 per as for one cusec pump case.O/ Asumin.g sparescost of rk 444 p.a. (net of caxes and duties) and labor repair charges of TK 150 p.a. for one cusec pump. Since repair charge of TIK 22S levied on farm group,

inplicit subsidy of about TK 369 results. On a per acre basis, incremental costs, if this subsidy eiiainated, work out to TK18.45. Thus, incremental costs for thissensivity sutamnarize to: TR 102.30 (capital cost) + TK 18.45 (repair cost) - 120.75.

71 Reference: lBRD, Bangladesh, Irrigation Water Charges. Discussion Paper, March 6, 1978, Annex 4, Table 2. Indirect OEM costs adjusted for labor cost inclusion Is 6/.Therefore on a per pump basis, indirect OM costs work out to TK 1,650, or TK 82.50 per ac. Pull incremental charges sum as follows TK 120.75(6/) + 82,50 = TK 203.55per ac of boro irrigated. It1

8/ Inclusion of taxes and duties on pumpset implies full recovery rental charge of TK 2,650, or incremental charge of TK115 per irrigated ac. Full repair charges with taxes and hXduties on, spares gives an incrensental charge of TK 26.25 per irrigated ac. Indirect OEM as per 7/. Total incremental rental costs sum to TK 224 per irrigated ac.

9/ Assuming 20% downpayment and financing of balance on following terns: 13% p.a. interest, S-year repayment, one payment p.a. Annuity, asuming 40% subsidy on the tax and dutyfree price, cusses to TK 1,816 implying an incremental TK 1,466 (TK 1,816-350) on capital costs. Regarding repair charge, inclusion of taxes and duties on spares yields a perirrigated as increme.ntal sost L TK 26.25 and total increment of TK 525. Ineram.ntal casts sum to TK 99.55 per -c irrigated ((1,466

5 25)- 20).

10/ Sal,e temns as in 8/. Annuity, with no subsidy on tax and duty free price, comes to Tk 3,027 implying an incremental TK 2,677 (TI 3,037 - 350) on capital costs. RegardingrePair ch.rgr sce 8/. Incremental costs sum to TI 160.55 per as irrigated ((TIh 2,67/ F 525) t 20).

II/ Ss-te clt sn as 9/. Incremental costs sum to TK 171 per irrigated acre with inclusion of pumpset TED.

'C

ANNEX FFigure 1

BANGLADESHLOW LIFT PUMP PROJECT

Estimated Relationship Between Level of Subsidy under Sales Programand Level of Derived Aggregated Secondary Benefits

Taka 1900

1800

1700

1600

1400

1300

1200

1100

Aggregated

Secondary 1000Benefits -

Annualized

900

300 \ s :

600 ~ ~ ~ ~ ~ ~~~0 Soo - ~ ~ ~ a

400 -

700-

600 -

600 \

400

0 I I I I I I t ! 10 20 30 40 50 60 70 80 90 100

Percent SuDsidy on Tax-Free PriceOne-Cusec Pumpset

World Bank - 2005094

ANNEX GTable 1

BANGLADESH

LOW LIFT PUMP PROJECT

Prices for Financial and Economic Analyses

Financial Price- Economic Price-/

Crop (Tk/md)

PaddyAman 82 138Aus 77 133Boro 753/ 1304/Oilseeds 215:-/ 371-Pulses 65- 112-

Fertilizer (Tk/md)

Urea 100-/ 137TSP 55 154mlP 45 96

Other Inputs

HYV Paddy Seeds (Tk/md)6-/ 120 150Animal Labor (Tk/pair/day) 147/ 158/Farm Labor (Tk/man-day) 11-' 5.5-13.5-

1/ Derived from 1978-79 Crop Season data unless otherwise specified.2/ Derived from projected 1990 world market prices in constant 1979

dollars. See Annex A, Table 3 for details of derivation.Reference: IBRD EPD/CE, Commodity Price Forecasts - Mid-YearUpdating, October 5, 1978.

3/ 1974/75-1977/78, national annual average farmgate prices for Mustardand Khesari Pulse respectively. In view of large oscillation throughtime, these prices considered satisfactory, representative prices.

4/ Non-traded commodities assumed to increase by same percentage as paddyprices. Levels of oilseed and pulse production assumed same in bothW and W Project Cases. These prices, therefore, used only in opportunitycost of land for 50 ac on which new BADC workshops to be constructedunder project.

5/ Current black market rate and likely official price as of 1979-80 season.6/ For local varieties same as crop prices.7/ Project area-specific average; see 1/8/ Tk 5.5 during slack months of January, March, April, May, September, and

October. Tk 9.5 during moderately busy month of December.Tk 13.5 during peak months of February, June, July, August,and November.

95

ANNEX GTable 2

BANGLADESH

LOW LIFT PUMP PROJECT

Prices of Internationally Traded Commodities for Economic Analysis

CommodityItem Rice Urea TSP MP

1. Projected 1990 World KMrketPrice (US$/ton) 1/2/ 453 217 182 91

2. Adjustments for Quality 10Differentials (x) 65-702 100 100 100

3. Projected Price Adjusted forQuality (US$/ton) 294-317 217 182 91

4. Shipping Costs to Chit:tagong 4/(US$/ton) 25 10- 30 30

5. CIF/FOB Chittagong Price(US$/ton) 319-34 227 212 121

6. Handling and Transport CostBetween Port and Wholesale 5/Markec/Main Godowne (US$/ton)- 40 -20 20 20

7. Price Ex-Godowns (US$/ton) 359-382 207 232 141

8. Processing, Handling andTransport Costs Between theWholesale Market/Godown andFarmgate (US$/ton)5/ -15 30 35 25

9. Farmgate Price (US$/ton) 344-367 237 267 166

10. Processing Ratio C%) 65 100 100 100

11. Farmgate Price Adjusted forProcessing Losses (US$/ton) 224-239 237 267 166

12. Tk/md-/ 130-1382./ 137 154 96

1/ Source: IBRD EPD/CE. Commodity Price Forecasts - Mid-Year Updating,October 5, 1978, Projected 1990 world market prices inconstant 1979 dollars.

2/ Pricing Basis: Rice: Thai, milled 5% broken, FOB BangkokUrea: Bagged, FOB EuropeTSP : Bulk, FOB US GulfMP : Bulk, FOB Vancouver

3/ For 25-35% broken. Larger discount for Boro and Aus crops which are ofpoorer quality than the Aman crop.

4/ Assuming Bangladesh would be an exporter and because of proximity tomarkets in South Asia would command a price advantage over Europeansuppliers.

5/ Assuming a SCF of 0.75 for non-traded goods and services.6/ Rounded.7/ Boro: Tk 130; Aus; Tk 133; Aman: Tk 138.

96

BANGLADESH

LtW LIFT PUil' PROJECT

Eoonrmnic C4Yh rlo F 1/

Cale--dar Year: 1980 1281 I8 1983 1984 1985 1986 198/ 1988 1989 1990 1991 1992 1993

Project tear: ~~~~~~(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

-------- (thousand taka) ------------------.-------- ___--______________________-________________-__

locremrental Pro ject Ben efits; 3/ 4/

crop Output - 46.345 417,335 788,370 927,590 806,761 525,742 244,722 217,621 305,217 392,492 421,529 244,077 66,625

Salvage Value & Unexpired Econonic life

of Inves.tent, - - - 1.185 17.228 2,471 _JfLU (762) (8871 ,A -L 3.641 .A.D 55. s

'lotl Incremental Project Benefits - 46.299 417,335 788,370 928,775 823,989 528,213 244,535 216,859 304,330 427,294 425,172 248,077 72,121

increme,ital Project Costs:-/ 4/

Investment Costs;New Puisps.ta 8,723 69,787 69,787 26.170 - - - - - - - - -

LLP Rebuilding PrcSram (14,480) (33,788) (33,739) (14,864) - - - - - - - _ _

Civil Works 5,304 13,532 13,532 3,717

Equipm,ent and 'ools 3,347 30,122 30,122 30,122 - - - - - 6/ _

Vehicles 1,451 14,334 11,402 2,428 - - - - 649-/

'iechnical Assistance 9 203 12,476 12,476 12.069 - - - - _ _ _ _ _

1,,vests.leet Cost Sob-total Tt3548 106,464 103,580 59.642 -649

crop Prod.ctio, Costs- - 17,059 153,715 290,488 341,785 297,263 195.247 .9.0,172 80,188 112,403 144.898 155,207 89.935 24,549

Direct (WI Costs (Irrigation)7

/ - 2,565 21,900 41,371 48,678 43,586 31,742 19,898 18,755 22,440 26,126 26,872 15,560 4,247

i.dirt,L- WM Costs (Irrigation) 8/ 255 2,295 4,335 5,100 3,827 865 (2,096) (2.382) (1,460) (539) - - -

Administrative Costs/ - 99 876 1,525 1,539 1,174 766 336 74 - -

l.regorse Net llenefits frorr land Under

Bluildings (5S0 IO/ 75 151 151 151 1)1 151 151 151 151 151 151 151 151 1,026

n1.cre.eoLl.I Project Costs 13,623 126,593 282,517 397,512 397,253 346,001 228,771 108,461 97,435 133,534 170.636 182,230 105,646 29,822

Net IncremntOLal Project Benefits (13,623) (80,293) 134,818 390,858 531,522 477,988 299,442 136,074 119,424 170,796 256,658 242,942 142,978 42,662

FO'.LnoteL on foliowing page

U0

ANNEX GTable 3Page 2

2/ (a) This economic cost flow presented in traditional, 12-month format and istherefore considered notional. Economic analysis of the Project actuallyperformed with a quarterly breakdown of costs and benefits. See W. Schaefer-Kehnert, The Phasing cf Inflow and Outflow in Farm Cash Flow Projections, EDICourse Notes CN-8, June 1978. (b) Costs and benefits related to the 5,000rehabilitated pumps are net of those costs and benefits associated withalternative new pumpsets (see 4/).

3/ See Annex E, Table 1 and supporting crop production tables for technicaldetails about inputs and outputs. See Annex H, Table 1 for economic prices ofinputs and outputs.

4/ Pumpsets assumed procured/rehabilitated one year prior to distribution for use.All project pumps fielded by year 5. Area serviced per cusec assumed 20 ac.Expected lives of pumps under various categories: (a) rehabilitated pumps -4 years; (b) new BADC pumps for rental program - 7 years; and (c) privately-owned pumps - 10 years.

5/ Salvage value assumed 10% of purchase price net of taxes and duties. Unexpiredeconomic lives calculaited on basis of straight-line depreciation. For rehabili-tated pumps, salvage values and unexpired lives considered only for spare partsacquired under Project. Buildings assuned to have economic life of 20 yearswith zero salvage value.

6/ Represents 10% reinvesl:ment in BADC vehicles having 5 years economic lifein order to service groups renting the few remaining serviceable Project pumps.

7/ Includes rental pump transportation, salary of pump operator, diesel andoil, diesel transport, 10% contingency, managerial expenses, and mechanicservices for privately-owned pumps. Charges total Tk 6,430 per 2-cusec pump(rented) and Tk 4,890 per 1-cusec pump (privately-owned).

8/ Includes BADC salaries, maintenance allowance on BADC structures, fuel forBADC vehicles and miscellaneous expenses. Charges total Tk 1,700 per 2-cusecpump (rented).

9/ For IRDP and commercial banks involved in pump sales program. Charges assumedequal to 5.5% of loans outstanding.

1O/ Fifty acres of land assumed removed from agricultural production to build 50workshops. Land costed in analysis at net agricultural benefits foregoneusing the With Project One Acre Farm Model as basis of calculation. Chargeestimated at Tk 3,024 per ac.

98

ANllLY GTable 4

BANGLADESH

LOW LIFT PUMP PROJECT

Economic Analysis:Relative Importance of Individual Cost and Benefit Streams

and Switching Values (SV)t/ of Cost and Benefit Streams

Percent of Total PresentValue of Benefit/

Cost Stream SV 2/ SV 2/3/ SV 2J SV(12% p.a.)213/ (10% p.&.). (12% psa.)-- (14% p.a )- (16% p.a.)2/

____________- _____.__----- percent -…-------.-.-------- .----------

4/t. Base Case-

A. Incremental Project BenefitsCrop Output 99.3 -52.6 -51.6 -50.7 -49.8Salvage Value and Unexpired

Economic Life 0.7 */Total Incremental Project Benefits 100.0 -52.2 -51.2 -50.3 -49.5

B. Incremental Project CostsInvestment Costs 131, E65 8 695. 1 643.5 597.3Crop Costs Excluding Labor

and Irrigation 31 .9 340.2 328.8 319.5 30';.5Crop Labor Costs 4G.9 264.4 256.3 249.7 24 .3Direct O&M Costs (Irrigation) 11.1 962.5 912.8 926.1 909.2Indirect 01 Costs (Irrigation) 0.6 *5/ *5/ *5/ *5/Administrative Costs 0.3 *5/ *5/ *3/ *k/Land Cost 0.1 *5/ *5/ *3/ *3/

Total Incremental Project Costs 100.0 109.5 104..9 10l. . O0

II. Four-Year Disaster Cycle Case-

A. Incremental Project BenefitsCrop Output 99"1 -40.6 -39.4 -38.4 -X ..Salvage Value and Unexpired

Economic Life 05*Total Incremental Project Benefits 100.0 -40 2 -39 0 -3S.1 -31

B. Incremental Project CostsInvestment Costs 13.5 471.1 424.4 390.6 36 ..3Crop Costs Excluding Labor

and Irrigation 31.9 209.3 200.1 193 .9 187 .3Crop Labor Costs 40.9 162.6 156,5 151.6 146..Direct O&M Costs (Irrigation) 11.1 59241 575.7 562,1 5B4_4.Indirect 06M Costs (Irrigation) 0.6 *5/ *5/ *5/ *5/Administrative Costs 0.3 *5/ *S/ *3/ *5/Land Cost 0.1 *5/ *5/ *3/ *5/

Total Incremental Project Costs 100.0 40.4 39.5 38.8 38.0

1/ Switching Value (SV) is the percentage change which reduces the net present value to zero at a specifieddiscount rate, e.g. the opportunity cost of capital.

2/ Economic analysis done on quarterly basis with the following quarterly rates of discount (in percent):

Quarterly Rete Equivalent Annual Rate

(a) 2.314 10.0(b) 2.874 12.0(c) 3.330 14.0(d) 3.780 16.0

3/ Assumed Opportunity Cost of Capital.4/ Reference Annex H Table 3.S/ Greater than 1100% : Costs(+),Benefits(-).6/ Assumes post-harvest destruction of incremental Soro crop every fourth year beginning with first cropping

year under Project. Project Year 2.

99

BRNGLRDESHLON L.IFT PUMP PROJECT Figure I

Present Values of Base Case Total Incremental Costsand Benefits at Various Discount Rates

30 .0 -ElOS

UJ 25 .0

20.0

LU15.0 _<CD

nr xlo -Z5.0LU

u)

2 4 6 8 10 12 14 16 18 20 22 24 26

DISCOUNT RRTE

LEGEND2- Z.87% - OPPORTUNITY COST OF CRPITRL

-_______________ - TOTRL INCREMENTRL PROJECT BENEFITS- -_____________ - =TOTRL INCREMENTRL PROJECT COSTS

1/ See Table Z 2/

100

BRNGLRDESH ANNEX G

LOW LIFT PUMP PROJECT Figure2

Locus of Base Case Switching Values for TotalCost Overrun and Benefit Shortfall-/

no_

u\

m 80

= 60_\

40

z 20LU_\

a-,0b ii 1 1 i 1 i 1 11 1 1 1I 11 11 1 1 I 1I II II I I III I I 1I I I I I I

0 5 10 15 20 25 30 35 40 45 50

PERCENTRGE SHORTFRLL IN BENEFITS

LEGEND= MRXI1MUM ,SSUMED FRLL IN BENEFITS IS 50 .0%- = MRXIMUM qSSUMED RISE IN COSTS IS 25.07

BENEFIT SWITCHING POINT IS 51.2%COST SWITCHING POINT IS 104.97.

1/ Based on Discount Rate of 1.2% p.a.

101

BRNGLHDESHLOW LIFT PUMP PROJECT AigrNeX3

Present Values of Disaster Case / Total IncrementalCosts and Benefits at Various Discount Rates

25 .0-

o~ 20 .0

1 15.0CC

-10.0 4 6 8 10 12 14 16 18 20

I SCOUNT RRTE

LEGEND__ - -2.87% - OPPORTUNITY COST OF CRPITRL

-___-- = INCR. S WI 4 YR DISRSTER CYCLE

-______________ - =CTOTRL INCREMENTRL PROJECT COSTS

1/ See para 7.07

I/ See Table 4 2/

102

BRNGLRDESH ANNEX G

LOW LIFT PUMP PROJECT Figure 4

Locus of Disaster Case Switching Values for TotalCost Overrun and Benefit Shortfalli/

60_C-_

:z 50 _

:z40\

>30

Lu0 20

zUJ 10

0 3 5 8 10 13 15 18 20 23 25 28 30 33 35 38 40

PERCENTRGE SHORTFRLL IN BENEFITS

LEGEND

BENEFIT SWITCHING POINT IS 39.1%COST SWITCHING POINT IS 64.1%

I/ Based on Discount Rate of 12% p.a.

103

ANNEX H

Page 1

BANGLADESH

LOW LIFT PUMP PROJECT

EVALUATION OF ECONOMIC AND SOCIAL IMPACT

Draft Terms of Reference

Objectives

1. Progress of the rental and sales program, would have to be monitored

carefully and the social and economic impact evaluated. Therefore, evaluationwould be carried out with the following objectives:

(a) to collect information on the present social structure 1/ ofpump rental groups, their composition, and water chargecollection procedures;

(b) to gather information on the present water charge structure,

rate level, timing of payments, rate differentials withinand between groups, and collection method(s) (e.g., in-kind,in-cash, labor);

(c) to monitor rates charged group participants when new rentaland sales programs start and compare these with those de-manded under the older rental regime;

(d) to monitor and evaluate the implications of the sales programon equity among managers, landowners, sharecroppers, and landrenters;

(e) to gather information on cropping patterns, input use, wateruse efficiency, crop production, man-days of family and hiredlabor and animal--days use for different farm operations;

(f) to study the use of LLPs for other purposes after the irrigationseason;

(g) to analyze the extent and nature of secondary effects,e.g., employment generated with intensification of pumpsuse, creation of village-level servicing industry, dis-placement from land; and

1/ Appendix 1 contains arL outline of variables to study.

104

ANNEX HPage 2

(h) to recommend to Government whether to continue with bothprograms unchanged or to institute modifications, includ-ing the option to discontinue pump sales/rentals.

Scope

2. The evaluation study would be concentrated in the five projectdistricts of Comilla, Noakhali, Chittagong, Barisal, and Patuakhali wherenew project pumps would be fielded. It would be carried out during andafter the Boro crop seasons over the FY80-84 period. During the first year,baseline information would be collected from a representative sample of oldrate regime rental groups. These and thereafter an additional representativesample of ownership groups and rental groups with higher rental charges wouldbe monitored. Given the confidential nature of required information, it willbe necessary to do some in-depth case studies of farm family budgets and ofgroup aggregates.

Detailed Description

3. To assess the effects of the project on equity, the existing orpre-project situation has to be known. Therefore, during the first yearbaseline study, the following information is needed:

(a) Composition of pump rental groups (registered and unregis-tered groups) in terms of number of farmers; percent oflandowners, sharecroppers and land renters; sizes of hold-ings, and farm incomes as compared to total family income.

(b) Ages of these groups; variation in composition, reasons whycertain individuals jointed or dropped out.

(c) Characteristics of pump group managers (farm size, age,income and its sources, education, community status).

(d) Water charge structure:

(i) payments made and time invested by pump managerbefore and throughout the irrigation period,details of costs, risks, and responsibilitiesborne by the manager;

(ii) payments made by group members, in-cash (amounts),labor, or in-kind during the season. If group memberspay the manager in labor, the prevailing wage rateduring that day and the possible effect of not beingable to work on one's own fields would be recorded.If payments are in-kind, the approximate value wouldbe recorded (e.g., part of the harvest).

(e) Decision-making procedures within the group.

105

ANNEX HPage 3

4. The effects of the two changes introduced through the project (salesand higher rental rates) would be monitored.

(a) To understand the effects of higher rental charges, datawould be collected on:

(i) stability of group composition;

(ii) changes in rates charged to group members;

(iii) impact of higher charges on farm profits (inconjunctionl with changes in prices of peddy andother inputs) and family income; and

(iv) analysis ofE who benefits and who losses.

(b) To assess the ef-fects of introduction of the sales program,the following information would be collected:

(i) progress of sales and prices of different pumptypes;

(ii) number of former rental groups that decide to buypumps;

(iii) reasons for purchase rather than rental;

(iv) method(s) of collection and sharing costs of down-payment and annuities among group members;

(v) ownership structure (e.g., genuine group ownership,individual ownership under guise of group ownership,variations);

(vi) types and distribution of off-season benefits frompump/engine use;

(vii) private sector involvement -- characteristics of pumpdealers, services provided, charges demanded; develop-ment of servicing industry in rural communities.

5. To assess the efiEects of sales program and rental rate increaseon water-use efficiency, following data would be collected:

(a) irrigated area per pump (in ac per cusec of pump capacity);

(b) cropping pattern;

(c) amount of water actually pumped per season per ac;

106

ANNEX HPage 4

(d) estimated crop-water requirement per ac for the season;

(e) irrigation efficiency; and

(f) water losses identification.

Execution

6. The evaluation study would be undertaken by the Project Monitoring

and Evaluation unit assisted by consultants, nationally recruited. The con-

sultants should have previous experience in applied social studies in ruralBangladesh, preferably in the project area. They would employ graduatestudea,Ls and interviewers to carry out the in-depth participant-observationand interviewing phases of the study. These students and interviewers wouldreceive training in objective and procedures of the study and in region-

specific characteristics such as dialects, technical terms, and volumetricmeasures. Interim progress reports would be produced annually; beginningwith the FY82 season.

Costs

7. The total budget for the evaluation study would be US$150,000equivalent. This would include professional fees, payments for interviewers,transport, and other miscellaneous costs. Detailed proposals for the study

and budgets would have to be submitted by prospective consultants.

Samples

8. Baseline data should be collected from at least 375 groups, a 2.5%sample of all existing groups in the project area (15,000). The sampleshould be divided among the five districts in proportion to the total numberof groups in each district, but with a minimum of 30 group observations perdistrict.

9. In-depth data should be gathered on 35-50 groups, using localinterviewers to construct farm budgets. Adequate representation of small vs.large and landowners vs. landless should be included in the budget study.At least 30 case studies should be prepared for each major category of farmsize and tenure pattern.

10. In the monitoring phase, data should be collected from rentalgroups continuing to rent, rental groups deciding to buy, and newly formedrental and ownership groups. The 35-50 groups studied in detail during thebaseline -hase would most likely become purchasers or continued renters andtherefore would provide adequate representative samples in these categories

for the monitoring phase. An additional sample would have to be selectedto study newly formed buying and renting groups (at least 85 should be sur-veyed of each type, while 8-15 should be studied in-depth).

107

ANNEX HPage 5

Summary of Project Pump Groups

Expected Group Composition by 1984

OutsideTotal Project Area Project Area /a

Groups Farmers Groups Farmers Groups Farmers

Existing rental group: 9,992 400,000 6,787 197,740 3,205 128,200- becoming buyer groups 3,787 75,740 3,787 75,740- continuing as rental

groups 6,205 248,200 3,000 120,000 3,205 128,200

New groups 3,508 106,060- buyer group 1,713 34,260 1,713 34,260- rental group 1,795 71,800 1,795 71,800

/a Rehabilitated pumps rented to existing and newly formed groups; thesepumps would be distributed outside the project area to the rest of thecountry to replace condemned pumps. These groups would be excluded fromthe evaluation study.

108

ANNEX HAppendix 1

Social Structure of Irrigation Groups: Variables

1. Pump rental and ownership groups form to provide members with irri-gation facilities for dry season cropping. To study the social structure ofirrigation groups, information should be gathered on how the following fourfunctions of any irrigation system are organized:

(a) construction of canals and other system works;

(b) water allocation among members and plots;

(c) system maintenance; and

(d) conflict management (intra- and inter-group).

2. To accomplish these functions, each group organizes itself withcarefully defined roles and rules for its members. The manager performsfunctions in the group, rules are established to allocate water to group par-ticipants, penalties and rules delineate consequences when a member fails topay the manager (e.g. loss of land).

3. In addition to intra-group roles and rules, the group,, and espe-cially the manager, has modi operandi determining the group's relationshipwith the outside world, e.g. neighboring group, BADC, banks and extensionagents.

109

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