Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 6842

PROJECT COMPLETION REPORT

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

June 24, 1987

General Agriculture II Div sionSouth Asia Projects Department

This document has a restricted dis1tibution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

ABBREVIATIONS AND ACRONYMS

ARDC - Agricultural Refinance and Development Corporation (now NABARD)CP - FAO/World Bank Cooperative ProgramOWPRS - Central Water and Power Research StationDACCF - Department of Agriculture, Cooperatives, Forest and FisheriesDPF - Department of Ports and FisheriesERR - Economic Rate of ReturnFPCS - Fishermen's Primary Cooperative SocietiesFTD - Fisheries Terminal DivisionsGFCCA - Gujarat Fisheries Central Cooperative AssociationGOG - Government of GujaratGOI - Government of IndiaIDA - International Development AssociationMFV - mechanized fishing vesselNABARD - National Bank for Agriculture and Rural Development (formerly ARDC)OBM - Outboard MotorPISFH - Pre-Investment Survey of Fishing HarborsSAR - Staff Appraisal Report of the World BankSCF - Standard Conversion Factor

FOR OFFICl"IAUS ONLYTHE WORLD BANK

Washington, D.C. 20433U.S.A.

OUke of Difeatqw.eftwaaOp&atvn. hatuatinn

June 24, 1987

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on India Gujarat FisheriesProiect (Loan 1394-INICredit 695-IN)

Attached1 for information, is a copy of a report entitled 'ProjectCompletion Report on India Gujarat Fisheries Project (Loan 1394-INlCredit 695-IN)" prepare' by an FAO/World Bank Coopcrative Programme. Further evaluation ofthis project by the Operations Evaluation Department has not been made.

Attachment

This document has a estricted distribution and may be used by neipients ony in the pefomanceof their official duties. Its contents may not otheroi be disclosed without World Oank autho oiL

FOR OMaL US ONLY

I1NDIA

GUJARAT FISHERIES PROJBCT(Loan 1394-IN/Credit 695-IN)

PROJECt COMPLETION RSPOR'T

Table of Contents

Page

PREFACE ..*e.e oO......@eO.................oeeE*O iii

BASIC DAtA SHEET ... e.,.........*s.o*.e.oa.eeooo**eeeeoo iv

EVALUATION SUMMARY *4.O**OO4.*O,..O4.,@.4,4Og.v4gOO****O V

.. INLROWCTION . . ....... * ... ................ 1

II. PRCJECT IDENTIFICATION, PRUPARXION AND APPRAISAL. ......... 2

Project Origin 2

Reconnaissance .................... 3............... 3Identification/Preparation 3Pre-appraisal/Appraisal ..... Oe .................... ......... 4Project Description 4

III. PROJECT IMPLEk1N'TATION ................... 5

Loan Negotiations and Effectiveness 5Project Changes after Appraisal 6Implementation Schedule ................ 0... 0 6Implementation of Harbour Improvement Component 7Implementatiou of Other Project Ccponents 9Consultants and Coutractors ... ,.......*...*, ...... ........... 12Project Cost ................ ........... *0000 .... ** ... ......... 12Project Financing and Loan/Credit Allocation ................. 13

IV. INSTITUTIONAL PERFORMANCE AND DEVLOMPNENT . ................... 13

Implementing Agencies ................. ......, Se...... 13

Gujarat Fisheries Central Cooperative Association ........... 14Fishermen's Primary Cooperative Societies .................... 16Fisheries Terminal Division .................................. 16

Accounting and Reporting ...................... ..00.0.0..000 17Compliance with Covenants .......... ............ 17

Thb document has a restricted distribution and may be used by recipients only in the performanceof their offcial duties Its contents may not otherwise be disclosed without World Bank authoriation.

-li-

V. PRW EC' IMPACT1 ............................... 18

Intended Impact 18Assessment of Actual Project Impact ............,.............. 18Fishermen's Income from Vessels ........................ ,..... 21Re-Estimated Economic Rates of Return .......................... 21

VI. BANK PERFORMANCE ...... ......................... 22

overall Performance 22Supervisi o n .......................................... 23

VII. CONCLUSIONS AND LESSONS LEARNED ....oo 0 0 000................ 000 000 23

TABLES

1. Comparison of Appraisal and Actual Costs2. Actual Expenditures on Harbour Improvement and Shore Facilities -

Veraval larbour3. Actual Expenditures on Harbour Improvement and Shore Facilities -

Mangrol Harbour4. Comparison of Appraised and Actual Improvements - Veraval5. Comparison of Appraised and Actual Improvements - Mangrol6. Physical Parameters of Principal Works7. Financing of Credit Components8. Schedule of Disbursements (Cumulative)9. Allocation of CreditiLoan Proceeds

10. Proposed and Present-Staffing of ElDs11. Quick Freezipg and Ice Making Facilities in Project Area12. Present Processing Units at Principal Forts13. GECCA - Comparative Balance Sheets14. GFCCA - Comparative Profit & Loss Accounts15. GFCCA - MFV Loans and Recovery Position as at 31 December 198516. FPCS in Project Villages17. Fishing Vessels in the Yroject Harbours18. Estimated Marine Fish Landings in Project Area (Centre Wise)19. Landing Prices of Important Fish at Veraval20. Escalation in Diesel & Lubricating Oil Prices21. Cash Flow Projection - 14.8m Trawler22. Cash Flow Projection - Canoe with Outboard Motor23. Cash Flow Projection - Outboard Motor (for Existing Canoe)24. Re-Estimated Economic Rate of Return - Veraval Harbour25. Re-Estimated Economic Rate of Return - Mangrol Harbour26. Re-Estimated ERR - Total Project

Chart Organizational Structure of GFCCA Ltd.

1. Important Fishing Centres in Gujarat2. Veraval Harbour3. Mangrol Harbour

Annex I - Comments from GOI

- iii -

PROJECT COMPLETION REPORT

INDIA GUJARAT FISHERIES PROJECT (LOAN 1394-IN/CREDIT 695-IN)

PREFACE

The following is a Project Completion Report (PCR) of the first WorldBank financed fisheries project in South Asia.

The Gujarat Fisheries Project (Loan 1394-IN/Credit 695-IN) wasappraised in May 1976 and was approved on March 31, 1977. The loan/credit wassigned on April 22, 1977 and amounted to US$14.0 million (loan) and US$4.0million (credit) as against an estimated overall project cost of US$38.0 millionequivalent (including duties and taxes) of which the foreign exchange componentwas put at US$11.5 million. The loan/credit became effective on July 19, 1977.The project was expected to be closed by June 30, 1983 but actually closed inMarch 1985. The Government of India (GOI) and the Go-rernment of Gujarat (GOG)were the ultimate recipients of the loan/credit. Final disbursement reached 91%of the total loan/credit amount.

The PCR was originally prepared by GOG based on a review of the ProjectAppraisal Report (No. 1326b-IN) dated March 16, 1977, the President's Report(No. P-1974-IN) dated March 16, 1977, and the Credit Agreement dated April 22,1977. At the request of IDA, and with GOI's concurrence, FAOICP subsequentlyprepared the attached PCR, incorporating analysis based on supervision reportsand other project files, as well as interviews with some members of theappraisal mission, supervising staff, and consultants. Key officials of GOI,GOG, NABARD (formerly ARDC), GFCCA, and DPF were also interviewed by the FAOICPPCR mission and provided useful information.

The draft report was sent to the Borrower for comments on March 5,1987. Comments received from GOI are attached to the PCR as Annex I and theircontent has been taken into consideration in the final preparation of thereport.

This report has not been subjected to audit by OED.

-iv-

haect Gometo R

Iaac Data am

Appafeai ~~~AOe.l asMM ftW= ~ ~ ~ ~ ~ bet cLT At.o sm;lotimm ~~~La lL

Total frojeat cost (028 mil) 28.0 34.9 92Credit XAoe (US$ millie.) 4.0 4.0 100Loft Ammt (US$ m ) 14*0 12.24 6IDate of Bard Approwal MWQb 31, 1977 Wat 321. 19??Date of Sffectivemou Jaus 19. 1977 J 19, 1977Data,e wLAcalmpopse CGeploted Jose 1986QOdr5 Date Juo 30. 1962 Ju 20, 1984Econoic Rate of Ratur 24.0 1U.0Inatitutioul Perfeanco tfetiheory Pergormae go"

STAFF IDIUTS (Staff vteha)MG uzi no mm ma ma Ml ma

prppraisal 5.0Appraisal 37.8 18.0legotia4d o 14.0Supweieoa 32.5 7. 6.3 11.9 3.1 14.3 8.9 2.9 8.1Other (HQ and M0O) 12.5 124 12.5 12.5 12.5 12.5 12.5 12.5 6.0 2.0 1.0

Total 42.8 48.0 20.0 18.8 24.4 17.6 26.8 21.4 16.4 6.0 10.1 1.0

CIILATZV3 DISWRSi m ma m ml in ma Ea

Appra:ta1 Zgatimto (?U8 dillift) 0.2 3.0 8.3 14.0 U.4 18.0 18.0 18.0Actual (tut8 dllion) - 1.1 8.6 10.1 12.0 13.9 13.9 16.42Actuals S of gatt, 0 37 4U 72 69 77 77 91Date of fitL Dibur_sestt MaW 10. 19

MISSION AADate NO. of Ibday Spe"Amaitiow ltftornme Tto Of

(A ) go tk leWo in feld RSwES53d I& MUt. J1 f, La kh Iob dRecosnaae N/w-DtY4 YAO/CP 4 120 3, D, azdsst./prep. Jol-Aug"5 110/Ct 6 189 D, D, 3Appraisal iW-JaM/76 IDA 7 189 Aost.0DI,*GlySaipeviaon 1 Jue/77 IDA 1 10 A I 1Supervision tI March/78 IDA 3 30 A. 8, 3 1 1 1ffSupervision in NoI/78 IDA 3 24 A* D 1 1Supos ision 1V July/79 IDA 3 326 s D, 1 1 ISuapeigoa V Feb/80 IDA 2 16 0, * 2 2 onsupervision VI Oct-lV/80 IDA 2 16 DI a 2 2 mlSupervidai VIZ July/61 IDA 2 28 9, 3 2 1 ofSupervision VIII feb/U2 1D 3 36 J, a 2 2 1Suptviaie IX Sept-Oct/UI ID 3 24 1. D.8 2 t 1Supervision Apr/83 lDa 2 12 DI B 3 1 wSupdevision SX Oct/83 tDA 2 12 Vs a 2 2 IICoITLotioo Mta/86 lAO/Ct 3 33 Be De. t

0U PRJCS DATA

sorroer Core mt of cdi./Gsvenset ef ;ujarfisea Year of Borrwer I Apri to 31 MraMNe of Orre Ap_ (Ma)

Carter lcae latet Awrisal tr Us81 s o 9.00

Zatorveng a"ra k'leraae m8 1t R e 8.201m9 181 a s 8.10

F110 US$l sR 7.901181 S$1 a 1 8.95

S2 U$1 a s 9.6512 US$1 a s 10.30FM 118 1 as t1.90F115 9S$1e1 t .201M US1a * M12.40

La TY. a - 3caamca. C Creitt. D - Porto Civil 3msLing 3 - fiodbd o*i - ii foa se apert. a - Shore FACiities Rtport. a - Lta Ofticerak 1 - ftobls rfeo or Mise Problem. 2 - adaerate Probim. 2 - Major preoblus

1 - Iptoprmw 2 - StAticlrys 3 - Deterioraingi I - Iin^m3ClI M - mAsiulj? S- Tehicalj P - folitteial 0 - Other

- v -

PROJECT COMPLETION REPORT

INDIA GUJARAT FISHERIES PROJECT (LOAN 1394-IN/CREDIT 695-IN)

EVALUATION SUMMARY

Introduction

1. The project was the first IDA-assisted fishery project in South Asia.It was to be the initial phase in a series of projects that would establish amodern fishing industry in India. During the decade preceding the project(1966-1975), marine catch and marine product exports increAed at an averageannual rate of about 82 and 132 respectively. This Wds brought about by a sub-stantial expansion of fishing vessels, which placed considerable strain onexisting infrastructure, particularly on harbor and on-shore facilities. TheGovernment of India (GOI), recognizing these constraints, commissioned the Swe-dish government to review all marine fishing harbors and facilities and to drawup plans for removing bottlenecks. GOI also placed high priority on developingthis subsector in its 5th Five-Year Development Plan.

Objectives

2. The main objectives of the project were to overcome over-crowding attwo existing fishing harbors and improve marketing channels and facilities bymodernizing and expanding the harbors and shore facilities on the Cujarat stateshoreline, the major northwest marine fishing ground of India. In add:tion, theproject was to finance motorized fishing vessels and the modernization of tradi-tional fishing craft, as well as to initiate a modest program aimed at improvingliving conditions in selected fishing villages. The major features of the proj-ect weres (a) improvement of two major fishing harbors in northwest India; (b)Improvement of shore facilities and services at these two harbors; (c) provisionof credit to entrepreneurs to establish fish processing, freezing and ice plantsat the two harbors; (d) construction and equipping of 270 14.8 m MFV and 'rovi-sion of canoes and outboard motors and their sale on credit and/or hirelpu 'haseto cooperatives and fishermen; (e) provision of two net making machines for thecooperative (GFCCA); (f) technical assistance for test fishing, marketing stud-ies, and project implementation. Total project costs were estimated at US$38.0million. The World Bank provided an IBRD loan of US$14.0 million and an IDAcredit of US$4.0 million. The balance of project costs was to be funded byGOI/GOG, ARDC, participating banks, anl borrowers.

Implementation

3. With the benefit of hindsight, the appraisal sought over-ambitioustargets. Project implementation was subj4act to delays, initially caused bychanges in harbor design. The resultant additional surveys and investigationsrequired, contractual disputes, and the effects of three hurricanes all delayed

- vi -

completion of the harbors to Junte 1986 (SAR's completion date was December1981). Because of delays in harbor construction, installation by public sectororganizations of many of the processing facilities was postponed and, even-tual-ly, dropped. These facilities, however, were subsequently established by theprivate sector in anticipation of the eventual completion of the harbor facili-ties. In addition, a cooperative sector enterprise - Gujarat Fisheries CentralCooperative Association (GFCCA) - with heavy commitments to the public sectorand which was an under-financed and weak organization, was to rapidly increaseits activities over a four to five year period and implement a number of compo-nents, e.g. provide mechanized fishing vessels (MFV), canoes, outboard motors(OBM), construct And operate net-making plants ard fish marketing facilities.This it failed to do. All of the IDA credit was disbursed, but US$1.58 millionof the IBRD loan was cancelled.

Results

4. Despite delays in implementation, IDA assistance under the project hasresulted in development of essential infrastructure required to support themarine fisheries subsector at a time when the need for such facilities was beingkeenly felt. As a result, the main constraints facing this subsector inGujarat, mainly excessive overcrowding at harbors and spoilage of fish, havebeen alleviated. The project has had a positive impact on fishery development.The main benefits weres (i) two harbors were developed; (ii) the MFV trawlerfleet doubled between 1976 and 1985; (iii) annual fish production increased from73,000 to 138,000 tons; and (iv) annual shrimp production increased by 4,100tons (earning about US$18 million in foreign exchange). Even though investmentin public sector fish processing facilities was reduced, the stimulus of theexpanded harbor facilities enabled t'ne private sector to develop processingcapacity beyond that estimated for the project. Moreover, incomes of tradi-tional fishermen increased as the actual cstch of MFV was 10 to 20X higher thanthat estimated at appraisal. Finally, the prices paid for marine fish haveshown an upward trend and are considerably above those prevailing at the time ofappraisal. The ERR for the project has been re-estimated at 16%, compared tothe SAR estimete of 242. Most components had a much higher FRR than anticipatedby the SAR. Despite higher ̂osts, poor performance by the cooperative sector inprovision of processing components, delays in construction and three successivehurricanes that destroyed expensive breakwaters and other harbor civil works, itcan be concluded that this project has created much needed infrastructurerequired by fishermen and private sector processors. It has removed congestionin Gujarat's fishing harbors, provided increased amounts of fresh fish, andstimulated the private sector to provide fishery products that earned signifi-cant foreign exchange.

Sustainability

5. The overall favorable impact of the project on development of privatesector fish processing capacity and on the quantity and quality of fish landedis the main indicator of a favorable degree of sustainability of projectbenefits.

- vii -

Findings and Lessons

6. Var..ous lessons can be learned from implementation of this project.The principal ones are:

(a) It is desirable to have investigation and design for major works com-pleted prior to loan negotiations. This is particularly importantwhere complex works such as breakwaters are involved. Where this isnot possible, the implementation schedule needs to provide adequatetime for such pre-construction Investigational activities.

(b) When significant design changes take place after appraisal, it isnecessary to ensure that provision of critically important equipment(in this case a floating crone) required for successful completion ofworks is ensured either by being available with the contractor, orprovision made for its early acquisition.

(c) Particular attention should be paid to the design of credit recoveryfrom beneficiaries when this is through an institution which dt%es notcontrol a large part of the marketed output and when the lending banksdo not have sufficient field offices and staff for loan recovery. 001has suggested that credit should be routed through the Stete FisheriesDirectorate where loan recoveries have been more successful.

(d) Due consideration should be given to fishermen's choico in the procure-ment of equipment (in this case OBMs) and in the design of equipment(fiberglas canoes), as their efficient use requires acceptability ofthe makelmodel.

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-INlCredit 695-IN)

PROJECT COMPLETION REPORT

I. INTRODUCTION

1.01 Since 1976, the development of fisheries has been given high priorityby the Government of India (GOI), with marine fish products being an impor-tant element in India's export trade. In addition, the sector providesimproved employment opportunities in the fishing districts, and augments theprotein content in the fishing fleet, with the number of mechanized fishingvessels (MFV) increasing from 3,000 to 11,000. At the same time, marinecatch and marine product exports increased at an average annual rate of about8% and 13% respectively. However, the principal constraints to furthergrowth were been to be the shortage of harbour and fish processing facilitieswhich had not developed in line with the MFV expansion. In recognition ofthis, various efforts were made by GOI as well as the state Government, toprepare investment proposals for deireloping such facilities in the coastalstates of India. At the same time, other studies (for example, the FAO/UNDPsponsored "Indian Ocean Fishery Commission") pointed out that while there waslimited basic catch and effort data available, the general resources werecapable of withstanding a considerably increased level of exploitation.

1.02 Based on the above, the Gujarat Fisheries Project, the subject ofthis completion report, was initiated as the first World Bank financed marinefisheries project in India. Gujarat state, with the longest coastline andthe largest continental shelf area, had a very active fishing population andcrowded facilities. The number of MFVs operating from Gujarat bases had goneup from 400 in 1965 to 1,300 in 1975. However, in spite of this growth andthe fact that the state commands nearly 25X of India's continental shelf, itaccounted for only around 12-15% of India's marine catch.

1.03 The project provided for the improvement of fishing harbours, shorefacilities and services at Mangro and Veraval, credit for fish net manufac-turing machines, as well as for establishing fish processing, freezing andice plants, and the construction of MFVs and their sale on credit to fisher-men. In addition, the project provided for assistance to traditional fisher-men by the provision, on credit, of fishing canoes and outboard motors (OBM),and improvement in the fish marketing system and infrastructure serving eightselected fishing villages. Finally, a technical assistance component fortest fishing, marketing studies, and project implementation was included.Over a five-year period (1977/78-81/82) the project was estimated to costUS$38 million (Rs 341.7 million). With the exception of the test fishingoperations (for which GOI was responsible), and the credit components (to be

-2-

financed through various participating banks), the implementation respon-sibility for all other components was with the Government of Cujarat (OG),under the Department of Ports and Fisheries (DPF), formerly the Department ofAgriculture, Cooperatives, Forest and Fisheries (DACFF), with the Commis-sioner of Fisheries as Project Coordinator.

1.04 A Project Completion Report was prepared by the Project Coordinatorin December 1984. That report, along with traditional information providedby the office of the Commissioner of Fisheries, and the SuperintendentEngineer responsible for supervising the harbour construction work, providethe basis for this PCR. In addition, this report is based on a review of theStaff Appraisal Report (SAR No. 1326b-IN); the Development Credit Agreementand the Loan Agreement both dated April 22, 1977; World Bank supervisionreports and project files; a field visit to the two harbour sites; and dis-cussions with project related staff at both Ahmedabad, and at the ports.Interviews were held with members of the appraisal mission, supervision staffand consultants and with key officials of GOI, COG, DPF, the GujaratFisheries Central Cooperative Association (GFCCA), and the National Bank forAgriculture and Rural Development (NABARD), formerly Agriculture RefinanceDevelopment Corporation (ARDC).

II. PROJECT IDENTIFICATICN, PREPARATION AND APPRAISAL

Project Origin

2.01 With the rapid growth in marine fishery activities in the late six-ties and early seventies, particularly by the relatively smaller traditionalcredit, and a general awareness that considerable marine resources wereavailable for exploitation even within the shallower parts of the continentalshelf, GOI was conscious of the need for further investment to promote thissubsector. Government efforts were complemented by multilateral andbilateral sources in carrying out investigations and surveys to ascertain theresource availability and the type and scale of investment required. On themarine resource side, the FAO/UNDP sponsored "Indian Ocean Fishery Commis-sion", submitted a 21 volume report in the early seventies summarizing avail-able knowledge on potential resources of the Indian Ocean. In addition, theUNDP-supported "Pre-Investment Survey of Fishing Harbours" (PISFH) project(1968-72) 1/ carried out investigations to identify potential harbour sitesfor the operation of fishing vessels drawing more than 1.2 meters. Effortswere already being made by GOI and state governments to promote the use ofmechanized fishing vessels, and the modernization of fishing craft and gear.

1/ Between 1974-76, the project was also supported by the Swedish Interna-tional Development Authority.

-3-

2.02 During this period mutual interest wao expressed by both GOI and theWorld Bank in initiating a marine fisheries project in India. In 1972 GOIsubmitted to the WB a report for a possible "tMysore Fisheries Project";however, at GOI's request, the project was not appraised and was later can-celled. In 1974, GOI submitted broad proposals for an integrated scheme forthe development of fishing harbours on both the east and west coast of thecountry. The WB, however, was not keen on a "harbours only" type of project.It was felt that the wider needs of the marine fisheries subsector needed tobe addressed by including components to finance fishing vessels, fishprocessing and cold storage facilities and marketing, in addition to harbourdevelopment, as wr).l as components targetted at small-scale traditionalfishermen. For the identification of such a project, the WB requested theFAO/WB Cooperative Programme (CP) to undertake a reconnaissance mission.

Reconnaissance

2.03 A four men CP reconnaissance mission visited India in Novem-ber/December 1974, to review marine fisheries development proposals preparedby GOI and various state governments. It was originally intended that themission would visit the states of Andhra Pradesh, Kerala and Tamil Nadu.However, at the request of GOI, the mission also covered Gujarat, Karnatakaand Maharashtra, for which development schemes had been proposed. Based onvarious factors, including the respective sizes of the continental shelf,estimates of unexploited waters, and stage of project preparation in thedifferent states, the mission recommended the inclusion of Andhra Pradesh,Gujarat, Maharashtra and Tamil Nadu in a first project. For the state ofGujarat, the proposals included the improvement/development of fishing har-bours, with allied shore facilities, at Veraval and Mangrol, site investiga-tion and additional studies for the Okha and Porbander ports, and the provi-sion of MFVs. The mission identified additional work which would be essen-tial to complete preparation.

Identification/Preparation

2.04 As a follow-up to the above, a CP Identification/Preparation missionvisited India in July/August 1975. On arrival, the mission found that theearlier mission's report had not been transmitted to the state governmentsand the data necessary to complete preparation, as identified in that report,had not been collected. After discussions with GOI, agreement was reached onthe inclusion of Andhra Pradesh, Gujarat and Kerala in a first phasefisheries development project.

2.05 The mission, on visiting fish landing centers, found that the rapidexpansion of MFVs had resulted in existing landing facilities becomingheavily congested, ice production insufficient, and consequently, wastageof landed catch was considerable. The primary objective of the project wastherefore viewed as being to improve fish quality and reduce waste, byproviding suitable facilities for handling the landed fish catch in the three

-4-

states. A total of seven locations were identified (three in Andhra Pradesh,and two each in Gujarat and Kerala) for improving/developing fishing har-bours. For Gujarat the components included the improvement of portfacilities at Veraval and Mangrol (including protected beaches for the land-ing of canoes), provision of shore facilities and services, ice plants, fishfreezing and storage plants, a.onstruction of 160 canoes with OBMs, and 12014.8 m MFVs. In addition, 1t was intended that the project would assist inthe improvement of existing vessel0 through the installation of ice boxes, orthe improvement of fish hold i-nsalation.

2.06 While the mission had carried out a more detailed identification ofproject components, preparation was still incomplete, and reservations aboutthe report, on this account, were expressed in the WB. Furthermore, it wasfelt that the proposed project did not include adequate support for artisanalfishermen. Finally, it was agreed in the WB that it would not be possible toappraise, at one time, seven sub-projects in three states and that in thefirst instance, the project should include only one state.

Pre-Appraisal/Appraisal

2.07 Based on discussion between GOI and the WB. the state of Gujarat wasselected for the first marine fisheries project, with the intention thatfollow-up projects would cover the other coastal states. In view of thereservations expressed earlier by the WB on the state of project preparation,a WB pre-appraisal mission visited India from May 5 to June 2, 1976. Themission was able to complete preparation and appraise the project. In addi-tion, it assisted NABARD to complete identification of a subproject fortraditional fishermen, and subsequently appraised it. An important issueidentified at the time of the mission's return from the field related to theexisting financing and organizational weaknesses of GFCCA, an institutionwhich was expected to play an important role in project implementation. Itwas agreed that acceptable proposals, together with an implementationschedule, for the rehabilitation of GFCCA should be a condition of nego-tiations.

Project Description

2.08 As designed at appraisal, the project included the following com-ponents:

(a) improvement of the fishing harbours at Mangrol and Veraval to permitmore MFVs to use these facilities and to provide better protectionagainst adverse weather; in addition, complementary shore facilitiesand services (such as auction halls, fish drying areas, gear sheds,electricity and water supply, fuel stations, etc.) at Mangrol andVeraval were to be provided to support both the existing fleet andits future expansion which was expected to occur as a consequenceof the project;

-5-

(b) provision of credit to entrepreneurs to establish fish processing,freezing and ice plants at the two harbours;

(c) construction and equipping of 270 14.8 m MFVs and their sale oncredit and/or hire purchase to cooperatives and fishermen.

(d) assistance to traditional fisheries by: (i) the provision, oncredit, of 350 9m fishing canoes equipped with outboard motor andgear, and an additional 1,050 outboard motor; (ii) improvement in theinfrastructure serving eight fishing villages; and (iii) improvementin the fish marketing system of these villages through the provisionof 4 trucks for use by GFCCA and the construction of a marketing shedat each village;

(e) provision of two fish net making machines for GFCCA; and

(f) technical assistance for: (i) test fishing operations off the coastsof Gujarat and Andhra Pradesh; (ii) fish marketing study; and (iii)consultants for project implementation (total of 50 man months, forharbour engineer, rock excavation specialist, fisheries resourcemanagement specialist, and management specialist).

2.09 With the exception of the test fishing operations for which GOI wasresponsible, the project was to be implemented by the Government of Gujarat(GOG) with refinance for credit operations, based on a previously preparedBanking Plan being provided by NABARD. A Project Supervision Committee wasto be established at state levelt which would be responsible for organizingthe execution of the project, by delegating responsibilities to appropriatestate agencies. Important agencies among the latter were the Gujarat PortsDirectorate (now Gujarat Maritime Board) which would provide the engineeringstaff to supervise harbour constructicn; and the GFCCA, whose functions wouldinclude the construction, along with other local builders, of the projectfinanced 14.8m MFVs, importing the OBMs, and assisting in obtaining a supplyof canoes for the traditional fishermen. GFCCA would also be a directbeneficiary as the net making machines would be used in its factory; il wouldalso be eligible for project loans for the construction and operation ofshore facilities, such as ice and freezing plants, as well as for the pur-chase of MFVs to be sold under hire/purchase agreements to fishermen.

III. PROJECT IMPLEMENTATION

Loan Negotiations and Effectiveness

3.01 The negotiations between GOI and the WB for the joint IDA credit/IBRDloan took place between February 7-18, 1977. The Bank's Board of Directorsapproved the proposed IDA credit of US$4 million and an IBRD loan of US$14

-6-

million on March 31, 1977. The credit/loan was signed on April 22, 1977 andbecame effective on July 19, 1977.

Project Changes after Appraisal

3.02 Various changes were made to the project after appraisal. Withregard to the harbour component, design changes became necessary, principallyto the proposed development at Veraval. Firstly, the layout of the Veravalharbour was changed, as there was rapid growth in the MFV fleet (30X increasebetween 1977-79). In addition, various other changes to the original designwere made on account of results obtained from additional survey and inves-tigation work (see section on harbours below) done after appraisal. Thewater supply to the harbours was expected, at appraisal, to be providedthrough the Municipal water supply system. However, this did not material-ize, and independent water schemes, dependent on more distant water sources,had to be formulated and implemented.

3.03 The component for providing credit to entrepreneurs to set up shorefacilities (fish processing, ice plants, etc.) was dropped during implementa-tion, as private processing capacity in the project area expanded veryrapidly soon after appraisal (see Table 11), and there was no demand forcredit for such purposes. The MFV component was scaled down to 168 units(SAR proposal was for 270), as the participating banks were reluctant toprovide credit to fishermen for such vessels, in view of their poorexperience in recovering past loans. The traditional fishermen componentprovided financing for 344 dug out log canoes and 6 experimental fiberglasscanoes. However, after appraisal, GOI imposed a ban on feliing of logs forcanoes; thereafter, efforts during implementation were directed at developinga suitable fiberglass canoe and popularizing it among the fishermen. Alsounder this component, the number of villages assisted was reduced to seven asdevelopment in one of the villages was supported by a separate GOI sponsoreddevelopment scheme. Finally, the services of the fisheries produce manage-ment specialist, as proposed in the SAR, have not been used.

Iplementation Schedule

3.04 At appraisal, construction of the Ver...'al harbour was expected to becompleted by June 1981, and of the Mangrol harbour by December 1980. Theimplementation of all project components was expected to be completed byDecember 1981, with a project closing date of June 30, 1983. In fact, theMangrol harbour was completed in early 1985, while a small amount of workis still outstanding in Veraval, with completion expected in June/July 1986.Because of delays in implementation, the project closing date was extendedto June 30, 1984, with disbursements closing on December 31, 1984.

-7-

Implementation of Harbor Improvement Component

3.05 The proposals for improving the Veraval and Mangrol harbours weremainly related to construction of breakwaters and quaysp excavation anddredging, and constructing necessary shore buildings. Other than the onshorebuildings and facilities, the principal works carried out under the projectinclude for Veraval the extension of existing breakwater (334 m), construc-tion of new breakwater (500 m), lending and bunkering quays (1,060 m), openberthing jetties (1,120 m), channel and basin excavation, and deepening ofthe fishing harbour area. For Mangrol the principal works carried outinclude the extension of breakwater (293 m), construction of a protection arm(185 m), groyne (75 m), quays (394 m), and basin excavation. For details ofSAR proposals and actual achievements, in physical terms, refer to tables 4to 6. Figures 1 and 2 show the layout of the completed harbours. As atMarch 1986 both harbours have been largely completed, and are operational.However, at Veraval some important dolosse armoring work still remains at thewestern breakwater head. This work is planned to be completed before themonsoon season, but successful completion depends on the availability of afloating crane which was expected to arrive in March/April 1986. At Mangrol,all the originally proposed works have been completed; however some improve-ments requested by the fishermen are to be carried out.

3.06 Construction Work. The implementation of civil works has not beensmooth. There have been changes in harbour layout and design during theimplementation period, which resulted in a significant increase in the scopeof work, as compared to what was envisaged at appraisal. In addition, theprogress of works was hampered by various other factors, which eventually ledto the delay in completing construction work on schedule. At appraisal itwas expected that tendering and appointment of contractors for the civilworks at the two harbours would be completed by November 1977; however, dueto various procedural delays, the contracts were awarded in October 1978, andwork began in January 1979. In addition, the contractor was faced with acuteshortages in cement and diesel, particularly in the early stages (therebyslowing down progress), the unexpected difficulty in obtaining stones for useas fill material for the breakwaters, as well as much higher escalation ofprices for essential commodities than provided for in the escalation clauseof the contract. Consequently, the contractor was faced with serious finan-cial difficulties thereby precluding the possibility of acceleratingimplementation. The dispute between the contractor and COG on price escala-tion was eventually submitted for arbitration in June 1981, and the award wasdeclared in favor of the contractor, in September 1982. The prolongedproceedings caused further delays in completing the works. In addition,three cyclones (two in the fair working season) struck the coast at Veraval,in October/November 1981 and 1982 and in June 1983, causing damage to theopen 2nd breakwaters and shore structures. The western breakwater in Veravalsuffered further damage during the monsoon of 1984 and 1985, indicating thatthe completed part was possibly not sufficiently protected by armoring blocksprior to the monsoon season. The breakwater construction at Veraval, which

-8-

is a major part of the civil works has also been affected by the absence ofsuitable equipment (floating crane) for adequate performance of armoringworks.

3.07 Implementation Problems. Apart from the reasons described aboveseveral technical factors have affected the work progress. At Mangrol unex-pected difficulties were faced with dewatering, within the coffer-dam area onaccount of the fissured nature of the rock bed. In addition, there wasunforeseen extensive rock excavation necessary in the harbour basin.

3.08 At Veraval modifications in the layout were made in 1979. Therevised layout included significant increase of length of landing and outfit-ting delays, as well as the repair berth. The location of the berthingjetties was changed to the opposite side of the harbour basin and the basinwas widened by 50 m which increased the excavation volume. The plannedslipway was changed to a straight quay, and it was decided to use a crane forlifting and placing the boats in the repair yard.

3.09 Continuous modifications have been made to the Veraval breakwaterdesign during the implementation period, based on additional investigationscarried ouc. First, hydrographic surveys done after appraisal showed deepercontours much closer to the shore along the western breakwater, and deeperdepths at the roundhead location. In addition, new data regarding waveheights and wave period had been collected. Based on these additional data,flume-studies were carried out at the Central Water and Pcwer Research Sta-tion (CWPRS), Pune, the results of which provided the basis for the modifica-tions made. The modifications increased the scope of work considerably forboth the breakwaters. For the western breakwater it was decided to use 10.5tons dolosse instead of 5 tons stones (as compared to original estimates)above low-water on the harbour side. It was also decided to raise the toplevel of the breakwater by 1.4 m, provide a crest-slab and a parapet wall. Asignificant widening of the berms was also introduced. The eastern break-water was modified similarly resulting in considerable increase of quantitiesand cost.

3.10 As suggested by the PISFH, further soil investigations were carriedout in order to decide final type and level of foundation for the quay.These findings necessitated modifications on the initial design of the quaywalls. The absence of continuous rocky stratum was also observed whichresulted in opening of a quarry for recovery of fill material. The overalleffect of these modifications, has been that a significantly higher volume ofwork has had to be carried out than originally envisaged (see Table 6).

3.11 For deepening of the harbour area and excavation of an entrancechannel, purchase of dredging machinery and equipment was provided for in theproject. Considerable delays were experienced in the acquisition of thedredging equipment as GOG proposed dredging to be carried out under contractin preference to acquiring new equipment for departmental operations under

-9-

the project. Consequently tenders were floated for both alternatives, i.e.acquisition of new equipment as well as contract dredging. Due to lack ofexperience and the complexities of assessing the two &lternatives, the wholeprocess took a long time. Eventually, it was decided to purchase (import) aheavy-duty cutter section dredger with accessories. After procedural for-malities, agreement for delivery was executed in April 1980. Shipping ofthe equipment and assembling of the components took another two years andtraining of operating personnel took about six months. Combined with thisdelay 'n acquiring the equipment, the need for dredging a larger area thanoriginally envisaged was found necessary in view of the increase in the sizeof the basin. The major work with rock and soft dredging was completed bythe end of 1984. Dredging is still going on for deepening of an area forfuture expansion.

3.12 Improvements of Shore Facilities and Services. The improvement ofshore facilities and services provided for under the project (other than thefish processing facilities) are mainly related to various buildings (auctionhalls, gear sheds, workshops, canteen, offices, etc.), electricity, drainage,water supply, and roads. Details of buildings and facilities proposed atappraisal, and actually implemented are shown in Table 4 for Veraval, andTable 5 for Mangrol. The auction hall at Veraval was changed to three halls(instead of one as proposed) though with a small reduction in floor area.Office buildings, canteens and gear sheds have been constructed mainly inaccordance with the original plans. At the time of appraisal, a scheme forwater supply to Veraval was underway, through the municipal water supplysystem, which was expected to provide water for the harbour. However, thisdid not materialize, which necessitated a water supply scheme exclusively forthe project. Wells at Hiram River approximately 18 km from the harbour areyielding adequate quantities of potable water for the port. The problemswith source of water resulted in both time and cost overrun. Water supplyfor Mangrol has been linked with a scheme for a fishing village without majorproblems. Roads and paved areas have been found necessary to construct to alarger extent than envisaged at appraisal. At Veraval road works are stillbeing executed with the aim of completing a ring road around the harbourarea; in addition some works have still to be completed with regard to, amongothers, the auction halls and drainage.

Implementation of Other Project Components

3.13 Mechanized Fishing Vessels. As opposed to the appraisal target of270 14.8m MFVs, a total of 137 14.8m MFVs were financed under the project.Three boat builders were involved in their construction - two governmentcompanies (including GFCCA), and one private boat building yard. Themodality of financing evolved was that GFCCA would be the primary borrower ofthe banks for all the MFVs allotted under the project, and they in turn wouldsupply them to the selected beneficiaries under hire/purchase terms. GFCCAwas responsible for the recovery of the loans, and its repayment to thebanks, for which they were allowed to retain half percent interest margin.

-10-

3.14 The loan recovery mechanism, however, did not work well (see para4.05), and the banks stopped financing MFVs at the end of 1980, as arrears ofrepayments started accumulating. In November 1980 the boat builders wereinformed not to start any new keels. In spite of numerous meetings betweenNABARD, the banks and GOG, the program could not be revived, and it wasdecided to stop implementation of the component with achievement at 137 MFVs.The annual achievements in physical and cost terms are shown in the tablebelow; credit disbursed by the different banks included under the bankingplan in the program is shown in Table 15.

Year No. of MFVs Total Total BankFinanced Cost Loans

------ Rs Million -----

1979/80 84 17.80 16.021980/81 45 11.82 9.961981/82 8 2.36 1.99

137 33.98 27.97

A major reason for slow loan recovery was the absence of a proper collectionsystem at field level by the banks.

3.15 Canoes. The project provided for 344 traditional dugout log canoes,and 6 fiberglass canoes to test the latter's suitability for Gujarat condi-tions. However, in view of the ban on using logs for canoes, GFCCA focussedits attention on the development of fiberglass canoes. Initially plank builtcanoes with fiberglass sheeting (two units), and a ferro-cement canoe weretried which did not meet with the approval of fishermen. Thereafter in early1980, GFCCA obtained a canoe design from an expatriate naval architect.Based on this, experimental prototype fiberglass canoes were constructed, andextensive trials were carried out. Fishermen, who were actively involved inthis exercise, suggested various modifications, which were incorporated.However, the design was eventually discarded in favor of another design basedon the characteristics of the traditional canoe which, after testing byfishermen in project area village (Sutrapada) and minor modifications, wasfound acceptable. This entire process considerably delayed the implementa-tion of this component. Further delays were experienced on account of thereluctance of banks to provide loans to fishermen. By December 1984 a totalof 40 canoes had been sold, of which 8 had been purchased by fishermen withtheir own finance, 3 under a Government sponsored credit scheme, and 29 withbank loans (see Table 7).

3.16 Outboard Motors. The project provided for the import of 1,400 OBMs.After international tendering and selection of the model/make of OBM by April1979, delays were experienced in obtaining an import license from GOI, which

was eventually issued in July 1980. A total of 428 OBMs (300 in April 1981,and 128 in September 1982) were imported by GFCCA, along with spare parts(20% of the OBM value). GFCCA experienced considerable difficulties inselling the motors, as complaints were expressed by the fishermen concerningtheir performance. Some spare parts are still in stock in March 1986. Ittook 13 months to sell the first batch of 300, and 14 months for the secondbatch of 128. While the motors, after the initial troubles, were apparentlyperforming fairly well, fishermen considered their reliability inferior toanother competitive make. Consequently, they were willing to pay a premiumto acquire the latter. In view of this, the further import of OBMs under theproject was discontinued.

3.17 Marketing and Other Infrastructure for Project Area Villages. Ofthe eight project area villages identified at appraisal, one (Madhwad) wasbrought under a separate GOI sponsored scheme for the development of minorharbours. For the remaining villages, seven working sheds for marketingpurposes, approach roads for five villages, a connecting road between Mangrolharbour and the coastal highway (17.4 km of total roads constructed, asagainst the SAR provision for 33.5 km), and water supply systems for fourvillages (SAR provision for five) were constructed. Finally, GFCCA availedfinance for three ;ransport trucks (SAR provision was for four trucks).

3.18 Net Making Machines. As provided for under the project, GFCCAacquired two fish net making machines, which were installed in their factoryin Ahmedabad in April 1981. Initially, operational problems were experiencedas the capacity of the factory's doubling machines, which are an integralpart in the net making process, was insufficient to provide the twine neces-sary to keep the two net making machines fully operational. With the neces-sary additional investment, the net making machines are now fully opera-tional, though utilization is extremely low (between 30X-40Z of capacity).

3.19 Test Fishing. The proposed test fishing surveys were aimed atresource data collection, as well as improving fishing methods on the con-tinental shelf off the states of Gujarat and Andhra Pradesh. Executed bythe GOI Exploratory Fishing Project (Bombay) between January 1979 and Septem-ber 1981, the ope-ations ended as being largely an exploratory survey, withdata being generated which can be useful for the purpose of stock assessment.Consequently, the implementation of the component did not meet the targetsset for it at appraisal. The principal conclusion from the survey resultswas that while demersal and pelagic resources exist in the deeper waters, anyjudgment on the financial feasibility of commercial exploitAtion of theseresources requires substantial additional information. Because of the highrisks involved, commercial activity in this area was not recommended; insteadit was felt that the Fisheries Department's efforts should be aimed atimproving and diversifying ongoing fishing operations, and the evaluation ofa new generatio.. of fuel efficient craft.

-12-

3.20 Marketing Study. The All-India Marine Fish Marketing study wascarried out between March 1979 and August 1981, and an eight volume reportwas produced. The study reviewed, among others, demand and supply of marinefish, its present marketing system, the availability ind need for infrastruc-tural facilities for marketing, and the economics of fish marketing. A totalof 84 cities and towns were included in the sample covering all the eightcoastal states of India, five non-coastal states (Uttar Pradesh, Rajasthan,Punjab, Nagaland and Meghalaya), and the Union Territories of Goa and Delhi.Among the principal findings were that there was inadequate supply to meetdemand, and consequently a need to exploit the deep sea fish resources; amove towards more deep sea fishing would require a considerable investment inworking capital and supporting infrastructure; present exploitation levelsshould be studied before further promotion of small MFVs; there was a need tobreak up the monopoly of fish traders and to regulate fish marketing at bothproducing and consuming centers; need for investment in retail fish marketinfrastructure; a need to review the role and performance of cooperatives andcorporations. Finally, the setting up of a National Fisheries Board wassuggested, to regulate and oversee the entire fisheries sector in thecountry.

Consultants and Contractors

3.21 Consultancy services were provided under the project for the purposeof harbour construction, and for setting up Fisheries Terminal Divisions(FTD) at Veraval and Mangrol. For the former, a harbour engineer and a rockdredging specialist were contracted for a total period of just over fourmonths during project implementation. The harbour engineer has assistedmainly in reviewing the design of the breakwater and the basic planning ofthe harbour works. He has paid regular visits to the sites from July 1978 toMay 1984 in order to review quality of work executed and advise on difficul-ties being faced. The rock dredging specialist has assisted mainly inevaluating the two alternatives for dredging - contract dredging or purchaseof dredging machinery. He also visited the manufacturer of the selecteddredging equipment to ascertain the suitability of this machinery. In addi-tion, a consulting firm from the UK was engaged for the purpose of FTD estab-lishment. A team of three has used up a total of nearly 17 man-monthsbetween 1983-85. Various reports have been produced, and GOG is presentlyacting on the recommendations made.

3.22 For the harbour constructior. works, tenders were invited globally forVeraval in December 1977, and locally 'or Mangrol in March 1978. For bothharbours, the same Indian contractor was awarded the contracts. As describedearlier several problems occurred during the construction period; somemeasures were taken up by the Government to assist the contractor. Thisincluded, for example, the provision of Government owned plant (such as extradump trucks) at favorable rates, to the contractor.

-13-

Project Cost

3.23 Table 1 shows a comparison between actual costs and estimatea made atappraisal for the different project components. On completion the projecthad cost Rs 325.5 million (US$34.9 million), which is 95Z of the SAR estimateof Rs 341.7 million (US$38 million). Excluding the estimated cost for theshore facilities component, which was not implemented, total actual cost inRupee terms represent nearly 105% of appraisal estimates.

3.24 There was considerable underachievement of the physical targets setat appraisal for the MFV, canoe and OBM components (51%, 8% and 31% of thetargets achieved respectively), with correspondingly lower actual costs.There was however, a cost overrun for the harbour component, with the cost ofworks at Veraval being 150% of appraisal estimates, and those at Mangrol112%. The increase is on account of both the larger scope of the workactually carried out at these harbours, and higher price escalation as com-pared to what was envisaged at appraisal (see Tables 4 to 6).

Project Financng and Loan/Credit Allocation

3.25 The Bank was expected to finance 47% of the total project cost withthe credit/loan of US$18 million, representing the foreign exchange com-ponent, and about 25% of local costs. In spite of the cancellation of thecredit component for processing plants and the considerable reduction in thefinancing provided against the MFV, canoe and OBN components, the eventualtotal disbursements of US$16.42 million covered approximately 47% of thetotal project cost. This is on account of the higher disbursement againstthe dredger and harbour civil works costs than originally envisaged. Thefinal disbursement was made in May 1985, and the undisbursed balance ofUS$1,580,493 against the loan was cancelled; the IDA credit was wholly dis-bursed. Loan disbursements were far behind the appraisal schedule, prin-cipally on account of delayed implementation (see Table 8).

3.26 Table 9 shows a comparison of the allocation of actual disbursementsbetween the different expenditure categories with the proposed allocation atappraisal. Disbursements under categories 1 (dredging equipment and spareparts) and 3 (civil works, materials and equipment for the harbours, andvillage approach roads and water supply) exceeded the original allocations by53% and 18% respectively, while only 29% of the original allocation wasdisbursed against consultants' services and 34% against loans by NABARD.With regard to the credit component, IDA/IBRD financing was only available tothe extent refinance was made available by NABARD on the request of theparticipating banks. Consequently, while 428 OBMs were procured under theproject, finance from IDA/IBRD covered only 60 units, as the rest were pur-chased for cash by the fishermen (see Table 7).

-14-

IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT

Implementing Agencies

4.01 As envisaged at appraisal, implementation of the project was coor-dinated by the office of the Commissioner of Fisheries (who was the ProjectCoordinator), under DPF. A Project Supervision Committee, under the chair-manship of the Secretary, DPF, was established, which met at regular threemonthly intervals. At GOI level, a Central Coordination Committee was set upto monitor the progress of this, and later also of the Andhra PradeshFisheries project (Credit 815-IN). Harbour construction by contractors wassupervised by a Superintending Engineer, with Executive, Deputy and JuniorEngineers under him, deputed from the Gujarat Maritime Board (earlier GujaratPorts Directorate) for the purpose of the project. The implementation ofworks, particularly for Veraval, have been beset with both technical andcontractual problems, as reviewed earlier, leading to considerable delays.In addressing the former and finding technical solutions, support was givento the harbour engineers by CWPRS in Pune, where all the harbour relatedmodel-testing was carried out. GFCCA was responsible for the physicalimplementation of the components related to MFVs, canoes, OBMs, and the netmaking machines. The credit for these components was disbursed by variousparticipating banks, based on banking plans prepared ty NABARD.

Gujarat Fisheries Central Cooperative Association

4.02 GFCCA was established in 1956 as an apex fishery cooperative institu-tion, registered under the Bombay State Cooperatives Act, 1925. It has amembership of 72 primary societies and over 1,600 individual fishermen. Theobjective of the Association is to develop the fishing industry of the state,and provide better equipment and machinery to fishermen, as well as a market-ing channel for their catch. At present, its principal activities includeprocurement and marketing of fresh fish (mainly freshwater fish), developmentof fresh water reservoirs, processing and export of marine products, manufac-ture and marketing of fishing nets and twine, construction and supply offishing vessels, and supply of diesel to fishing vessels. The overallmanagement of GFCCA is vested in a board consisting of 16 Directors, with theCommissioner of Fisheries as its Chairman. Its present organization struc-ture is shown in Chart 1.

4.03 At the time of appraisal the need for both organizational and finan-cial strengthening of GFCCA was recognized, and a program of rehabilitationhas already been prepared by a firm of private consultants. While noinstitutional strengthening proposals for GFCCA were included under theproject, assurances were obtained at negotiations that a program ofrehabilitation would be implemented. During 1977/78, in line with the con-sultants' report, senior staff were hired to fill the posts of Deputy GeneralManager (Finance), Senior Production Manager, Bombay plant, and a SeniorMarketing Manager, and an improved accounting system was introduced. In

-15-

addition, GFCCA phased out its old ice plants at 4angrol and Veravall soldboth its carrier launch and trawler and closed its canning plant.

4.04 While the operations of GFCCA returned a net profit in 1977/78 and1978/79, the financial situation of the Association has shown a decliningtrend thereafter up to 1982/83 (see Tables 13 and 14). Heavy losses wereincurred, particularly from the operations of the quick freezing plants atVeraval and Bombay. In addition, large investments in fixed assets did notgenerate a commensurate turnover; between 1977/78 and 1983/84, the value offixed assets went up by 200%, while sales revenue went up by only 26% (adecline in the fixed asset turnover ratio from nearly 10 to just about 4).For example, the freezing plant installed in Veraval, in 1980/81, had tremen-dous difficulties in procuring raw material (resulting in very low capacityutilization) in competition with the private processors. The latter had wellestablished fish collection systems, backed up by sufficient working capitalfor providing advances to fishermen. The net making plant at Ahmedabad had acapacity utilization of between 30-40% during this period. Finally, thecutback in the MFV componeist under the project adversely affected theviability of CFCCA's Boat Building Yard.

4.05 In addition, GFCCA experienced serious liquidity problems during theimplementation period. These were primarily on account of banks refusing toprovide further working capital loans to GFCCA, in view of the very poorrecovery performance on the MFV loans, and the corresponding increase in itsdebt-equity ratio. As the MFVs were sold to fishermen under a hire-purchasesystem, with ownership vested in GFCCA (until full payment is completed), theresponsibility for recovering the loans also fell on GFCCA. At the time ofappraisal, it was expected that with the strengthening of GFCCA's marketingoperations, recovery of loans would become easier. However, GFCCA was unableto enforce a commitment by fishermen to sell their catch to GFCCA. 1/ Fisher-men invariably get cash advances from private fish traders, to whom they selltheir catch. Consequently, recoveries from fishermen were very poor, and asat 12/31/85, total recoveries effected (Rs 4.32 million) represented only 12%of the amount due (Rs 35.09 million, including interest), as shown in Table15. In 1981/82, 5FCCA set up a loan recovery cell, with only a marginaleffect on recoveries.

4.06 The sale of MFVs was financed by loans from the participating banksto GFCCA. Poor recoveries of these loans have resulted in a build-up ofliabilities on the CFCCA balance sheet (see Table 13), and without a cor-responding increase in its capital base. 2/ have caused very high debt (long

1/ A Bank Supervision Mission in February 1982 roughly estimated that GFCCAwas capturing less than 1% of its entitled catch.

2/ Share capital was increased by Rs 1.2 million, with a contribution fromGOG in 1982/83, and a similar increase is expected in 1985/86.

ft

-16-

term)-equity (including reserves) ratios. As at 6/30/85, the latter was14:1, as compared to 4:1 as at 6/30/80 (as at 6/30/83) it went to its highestlevel at 59:1). 1/ As GFCCA was unable to even meet its loan interest com-mitments to the banks, the latter were reluctant to provide further loanfinance even for the Association's working capital requirements.

4.07 In recognition of the above situation, GOG appoint)d a Committee in1981/82 to work out a plan aimed at improving the performance of GFCCA.Among the principal recommendations of the report, submitted in July 1982,were: (a) strengthen GFCCA's capital base; (b) relieve GFCCA of the respon-sibility for MFV loan recovery; (c) provide a revolving fund for off-seasonadvances to fishermen. Various proposals have been submitted to Government,based on this report, and the decisions are awaited.

Fishermen's Primary Cooperative Societies

4.08 At appraisal, it was proposed that loans for the purchase of canoesand OBMs by fishermen would be processed through the Fishermen's PrimaryCooperative Societies (FPCS); in addition, the latter were expected to playan important role in fish marketing. With regard to the first, the role ofFPCS was negligible in view of the reduced scope of the component, as com-pared to what was proposed at appraisal. In connection with the latter,while there are 10 societies in the 8 project villages (see Table 16), only 2(with a total of only 98 canoes) are presently linked with GFCCA for fishmarketing (at Sutrapada and Dhamlej). Consequently, marketing interventionby GFCCA in the project fishing villages has been limited. However, topromote FPCS in the project villages, COG introduced a scheme whereby theservices of qualified and experienced personnel to work as secretary/managerwere provided at subsidized cost, for a period of three years. In addition,training is imparted at an institute managed by the Department of Coopera-tion, to nominees from FPCS.

Fisheries Terminal Division

4.09 As provided for at appraisal, FTDs were set up at both ports in 1978under the office of the Commissioner of Fisheries. During the period ofimplementation the units were essentially involved in monitoring and coor-dinating the progress of project works. A draft bill for setting up aFishery Terminals Authority, with all ports in the state under its purview,has been formulated and is presently being reviewed by GOG.

4.10 With the commissioning of the Mangvol harbour, the FTD there hasassumed its originally intended role; in Veraval, this is expected to occur

1/ Under the Cooperative Societies Act, the maximum debt-equity ratio per-miesible is 10:1.

-17-

by September 1986. The harbour facilities managed by the PTD include:berthing and landing facilities, auction halls, gear sheds, diesel and watersupply, ice crushing, canteen, parking and lighting facilities. Headed bythe Director, Fisheries Development Division, the present and proposed staff-ing of the two FTDs is shown in Table 10. At present some minor charges (onwater use, auction hall facilities, and vehicle entry) are being levied bythe FTD in Mangrol on some of the users. The consultants, provided for underthe project, have made recommendations in their report for imposing a broadrange of levies aimed at recovering FTD costs over a three-year period. Thereport is presently being reviewed by GOG, with some aspects already havingbeen implemented.

Accounting and Reporting

4.11 Separate accounts were maintained for the different major categoriesof project expenditures. As envisaged at appraisal, the usual Governmentcontrol and auditing procedures operated for expenditures incurred by GOI andGOG; this includes the accounts of GFCCA, all of which up to the latestcompleted financial year 1984/85 have been audited. The funds used by NABARDfor refinancing the credit components were subject to the audit requirementsset out under other IDA/Bank projects; no special arrangements were envisagedfor this project.

4.12 As required under the terms of the loan, a statistics cell was set upin the office of the Commissioner of Fisheries, headed by a senior statis-tician. Production surveys were conducted every fortnight at the fishingcenters, and annual reports (1978-79 to 83/84) submitted to the World Bank.A biennial census of fisthing crafts was carried out in 1977, 1979, 1981 and1983, and detailed reports produced. In addition, a base-line survey of fishprocessing and ancillary industries was conducted in 1977, a baselinesocio-economic survey of fishermen in 1978, and a survey of thecredit-recipients under the project is presently in progress.

Compliance with Covenants

4.13 In general, the covenants agreed with GOI, have been complied withsatisfactorily. However, GOI has yet to complete its review of cost recoveryof investments in fishing harbours. Such a review has been under considera-tion for several years.

V. PROJECT IMPACT

Intended Impact

5.01 At the time of appraisal, the expected benefits from the project wereassessed principally in terms of the incremental fish production from theproject financed fishing fleet, as well as the net value added and iceproduction from the proposed fish processing facilities. Based on this, the

-18-

annual incremental output of fish from project vessels was estimated at44,600 tons (including 3,j00 tons of shrimp). In addition, annual productionof ice from the plants at Veraval and Nangrol was expected to go up byapproximately 52,000 tons, while the incremental fish processing units wouldallow for 1,500 tons of shrimp and 2,000 tons of fish meal (equivalent to10,000 tons of raw material) to be processed annually. Based on theseprojected benefits, an economic rate of return (ERR) of 24Z was estimatedfor the project as a whole. In addition, ERR for individual project com-ponents were also estimated.

Assessment of Actual Project Impact

5.02 Considerable downward revisions have taken place in the number ofMFVs, canoes and OBMs actually financed urnder the project. In addition, thecomponent for establishing fish processing facilities was eliminated duringthe implementation of the project. As the project has been implemented, ithas become essentially an infrastructure based project, with 75% of actualtotal costs being for harbour improvement (as opposed to 50% at appraisal).Only 131 of actual costs are made up of expenditures on direct productioncomponents (MFVs, canoes, OBMs and net making plant) as opposed to 361estimated at appraisal. Consequently, the impact of the project must beassessed in terms of the effect of harbour construction on overall fisheryrelated activities in the area, in which there has been considerable expan-sion during the project period. This would include the development ofprivate sector fish processing capacity, the quantity and quality of fishlanded, and most important the level of utilization of the harbour facilitiescreated.

5.03 Harbor Utilization. At the time of appraisal, there was a fleet of95 MPVs operating out of Mangrol and about 400 NFVs out of Veraval (SAR paras3.03 and 4.04). At completion of project works, it was estimated thatMangrol would be able to handle 110 MFVs at a time (with a capacity to accom-modate 165 MFVs during emergencies), while Veraval would be able to handle700 MFVs. As shown in Table 17 an estimated 180 MFV trawlers are presentlyoperating out of Mangrol and 750 MFV trawlers out of Veraval. In addition,there are a few MFV gillnetters also operating out of these harbours, butfigures are not available. While the harbour at Mangrol hab been completedin all respects, and all facilities are being utilized, some minor works(other than completing the western breakwater) have still to be completed atVeraval, in connection with among others, the auction halls (which areexpected to be completed by the middle of 1986), and moving the bunkeringfacilities to the location of the jetties. A large number of fishermen(around 40%) are still landing their prime quality fish on the commercialharbour side (for the trash fish they use the new harbour), and consequentlythe jetties are not being fully utilized. This is partly on account of itsproximity to their houses. However, once the auction halls are completed andbecome operational, and the oil and water points are moved to the jetties,there will be a move away from the commercial harbour. At any rate, the

-19-

number of vessels operating out of these harbours is already greater thantheir original design capacity. In view of the expected further growth invessels number, an expansion in the capacity of both harbours is alreadybeing discussed by the Government.

5.04 Fishing Vessels and Fish Landings. The number of fishing veuselshas substantially increased in the project area during the period of projectimplementation. The period 1977-83, for which data is available from thecensus carried out under the project, shows a 25% increase in the totalnumber of vessels operating in the project area (see Table 17). There wasa more than 50% increase in the number of mechanized vessels (increase of320 MFVs, and 427 motorized canoes) during the same period. However, only arelatively small percent of this increase has been financed out of theproject. In addition to an increase in the number of fishing vessels, therehas also been an increase in the number of fishing days per vessels. Withthe protected harbour facilities available, boats are fishing during part ofthe monsoon season; this was not possible earlier, as boats were beachedduring this period. However, while detailed data are not available, discus-sions with fishermen indicate that catch per unit effort is beginning to showa declining trend. This has resulted in fishermen making longer trips fur-ther away from the port. At Nangrol, fishermen reported making trips to thefar north, close to the Indo-Pakistan border. This way, they are able tomaintain absolute catch levels.

5.05 Detailed data have been collected on fish landings in the projectarea, and this is summarized in Table 18. As can be seeng total landingshave fluctuated over the years, though there is an increasing trend. Totalfish landings in the project area have increased from 73,000 tons in 1977/78to nearly 138,000 tons in 1984/85. In particular, there has been a markedincrease in total landings during 1983-85. However, this does not representthe total catch of the fleet operating out of the fishing ports. This is onaccount of the fact that the fleet registered in Veraval and Mangrol operatesin the entire west and southwest coast of Gujarat, and their entire catch isnot always landed at these ports.

5.06 While data on average annual catch per vessel are not available, dataon fish landings for the different types of vessels have been collected.This is summarized below, in terms of maximum and minimum landings, for1981/82 and 1982/83.

1981/82 1982/83

Vessel Type Max. Min. Max. Min.------------- tons -------

14.8 m MFV 238 112 279 82Canoe with OBM 41 23 56 16Non-Powered Canoe 27 7 48 5

-20-

Given that the above figures are the extremes, and after discussions withfishermen, average catch per vessel has been conservatively estimated at 135tons (17% higher than SAR estimates) for MFV trawlers, 17 tons (6% higherthan SAR estimates) for canoes with OBM, and 12 tons (9% higher than SARestimates) for non-powered canoes. Based on this, annual incremental catchfrom the project supported vessels only (137 MFVs, 29 Canoes, and 428 OBMs)is estimated at around 21,000 tons (including 1,300 tons of shrimp).However, as mentioned earlier, these figures significantly underestimateproject impact on fish production. Between appraisal (1976) and now therehas been an increase of 435 MFV trawlers using the two harbours constructed.In addition to the other vessels (gillnetters and motorized canoes) alsooperating out of these harbours. Annual incremental production from the 435MFV trawlers is estimated at around 59,000 tons (including 4,100 tons ofshrimp).

5.07 Fish Processing Facilities. Proposals were included in the projectfor financing various types of fish processing units, none of which wereactually implemented. This was on account of the fact that the private fishprocessing industry developed considerable capacity of such units, soon afterthe project started, and there was no furtner demand for credit thereafter.The proposals at appraisal, and the actual capacity created outside theproject, are summarized in the table below (details are shown in Tables 11and 12):

Incremental CapacityIncremental Capacity (1976-85)Proposed at Appraisal Set up by Private Sector

Ice Plant 475 tpd 288 tpdIce Storage 1,000 tons 1,142 tonsFreezing Plant 28 tpd 181 tpdFreezing Storage 750 tons 2,635 tonsFishmeal Plant 75 tpd 60 tpd

(raw material) (raw material)

As can be seen, the incremental capacity set up independently of the projectsignificantly exceeds the appraisal proposals, with the exception of the iceand fishmeal plants. It would be fair to assume that much of this investmentwould not have taken place without the investment in the harbours, which waslargely responsible for the significant increase in fishing vessels.

Fishermen's Income from Vessels

5.09 Operating income and cash flow statements have been prepared for theinvestments in vessels financed under the project (14,8 m MFVs, canoes with

-21-

OBM, and OBM for an existing non-mechanized canoe). These are given inTables 21 to 23. Prices used in the analysis are the average of pricesobtained by fishermen in the last three years (1982/83-1984/85). As men-tioned earlier, the average annual catch of a MFV is estimated at 135 tons,while that of a canoe with OBM at 17 tons (12 tons for canoe without OBM).The results are summarized below:

14.8 m MFV Canoes with OBM OBM only

Item SAR Present SAR Present SAR Present

Net Operating Income 84 158 9 53 4 12Net Cash rlow 91 91 3 37 3 10FRR 53% 40% 30% 75% 55X 121%

As can be seen the net income and cash flow generated are much higher thanthose estimated at appraisal. This is on account of both a higher actualcatch per vessel than what was estimated at appraisal, as well as significantincrease in fish prices (Table 19). It is also clear that MFV owners shouldbe able to repay their loans from the income generated.

Re-estimated Economic Rates of Return

5.09 An economic re-evaluation has been undertaken of the two harbours, aswell as of the investments in the different types of fishing vessels. Theanalysis has been carried out in constant 1985/86 average prices, with pastexpenditures restated in 1985/86 price terms by using the wholesale priceindex (WPI). Phased investment costs, in financial terms, for the two har-bours are shown in Tables 2 and 3. After deducting estimated taxes, thecosts restated in 1985/86 prices have been converted to economic values byusing the standard conversion factor (SCP) of 0.80.

5.10 For the purposes of re-estimating the ERRs of the two harbours, thebenefits from MFVs only have been included. These have been estimated fromthe project financed MFVs (105 in Veraval and 32 at Mangrol); in addition, itis assumed the 50% of the increase in non-project financed vessels is theresult of the project investment in the harbours (106 MFVs included forVeraval, and 37 for Mangrol). It is believed that the latter assumption isconservative, as prior to the project investment the harbour capacity wasalready fully utilized, and a significant increase in vessels would not havebeen possible. It has been aE med that local financial prices for shrimpand higher category fish (Cl ana C2) reflect their economic value; lowercategory (C3 and C4) fish have been treated as non-traded goods. The catchfor years prior to 1985/86 has been valued at the then prevailing prices,restated in constant 1985/86 terms, by using the World Bank publishedmanufacturing unit value index for the former, and the WPI for the latter towhich the SCF of 0.80 was applied.

-22-

5.11 All investment costs related to the harbours and the cost of theincremental MFVs have been included in the analysis; in addition, a provisionhas been made for the replacement cost of MFV engines after a period of tenyears. Based on a period of analysis of 20 years, the ERR for the Veravalharbour has been re-estimated at 13% (appraisal estimate - 18%), and Mangrolat 20% (appraisal estimate - 16%). Details of the analysis are shown inTables 24 and 25 respectively. In reviewing these figures, it is necessaryto recognize that while there was a 50% cost overrun for Veraval, it was only12% for Mangrol. In addition, the actual average catch per vessel asobserved over the last few years was between 10-20% higher than thatestimated at appraisal. However, in many cases this has required longertrips and consequently higher operating costs for the MFVs. Finally, theprices of marine fish have shown an increasing trend, with weighted averageprices considerably higher than what they were at the time of appraisal.

5.12 The re-estimated ERRs for the MFVs (53%, as compared to SAR estimateof 48%), canoes (99%, SAR estimate was 31%), and the OBMs (over 60% asestimated in SAR), show that these investments are economically beneficial,as envisaged at appraisal. Finally, an ERR for the project as a whole hasalso been estimated by including the costs and benefits from the financing of428 OBMs and 29 canoes, and the investment costs for the permanent sheds,roads and the trucks. The costs of water supply for the villages, the netmaking machines for GFCCA, and the technical assistance costs related toexploratory fishing, the marketing study, and for the fisheries terminaldivision have been excluded from the analysis (as in SAR). Based on the costand benefit profiles shown on Table 26, an ERR of 16% has been re-estimated.This compares with the SAR estimate of 24%.

VI. BANK PERFORMANCE

Overall Performance

6.01 Despite delays in implementation, IDA/Bank assistance under theproject has resulted in the development of essential infrastructure to sup-port the marine fisheries sub-sector at a time when the need for suchfacilities was being keenly felt. However, with the benefit of hindsight, itis obvious that the scope of the project, as eventually designed atappraisal, was too ambitious. It was optimistic to expect that GFCCA, withidentified organizational and financial weaknesses, would be able to substan-tially increase its level of activities, and implement the various componentsfor which it had complete or partial responsibility (MFVs, canoes, OBMs, netmaking plants, and fish marketing), on the scale envisaged, over a four tofive year period. Appraisal expectations that GFCCA would increase its sharein fish marketing also did not materialise, leading to loan recoveryproblems. The traditional fishermen's component, while no doubt important,did not receive the attention it merited in a project dominated by essentialinfrastructure development. Consequently, the intended impact through the

-23-

improvement of fish marketing in the project villages did not materialise.Finally, while the complexities of constructing the marine works proposedwere recognised at appraisal, not enough time was provided in the implementa-tion schedule for additional survey work needed. In view of the significantchanges made in the design and scope of work (particularly at Veraval), andthe considerable survey and testing work that had to be undertaken duringimplementation, it is obvious that the appraisal of the project was prema-ture. Given the overall implementation experience of the project, theapproach adopted by the Bank towards a multi-component, broad based"integrated" project has not been proven to be justified.

Supervision

6.02 A total of 11 supervision missions were fielded by the Bank betweenJune 1977 and October 1983. The composition of the missions was technicallystrong, and there was good continuity of staff between missions. The latterwas particularly important, given the complexities and technical difficultiesexperienced during the implementation of the project. It resulted in con-structive dialogue and rapport between Bank staff and those of the implement-ing agencies. As a result of suggestions made by the Bank during supervi-sion, additional survey and model testing work was undertaken particularlywith regard to the harbour developments proposed for Veraval. In additionthe missions mode concerted efforts by discussions with the various agencies,as well as by making specific recommendations, to expedite the pace ofproject implementation. The frequency of supervision missions was adequate.However, given that the closing date of the project was extended by a year,and that there were various problems being faced, there should have beenfurther supervision of the project beyond October 1983.

VII. CONCLUSIONS AND LESSONS LEARNED

7.01 In assessing the overall contribution of the project, and for thepurpose of drawing conclusions from the experience gained during implementa-tion, the project must be viewed in two parts. Insofar as the investment infishing harbours and complementary shore facilities and services is con-cerned, the project has no doubt made a positive impact, and resulted in asignificant development of different facets of marine fisheries activities inthe project area. To a large extent, the near doubling of the MFV trawlerfleet, as has happened between 1976-1986, is the result of stimulationprovided by the investment in the harbours. In addition to increasing marinefish production, the investment has also stimulated overall economic activitywithin the project's area of influence, and led to significant increases inthe incomes of local fishermen.

7.02 However, the achievement of project targets for the other directproduction components was poor. The principal drawback was the inability ofthe existing institutions to handle the components which were large in rela-tion to their implementation capability, as well as to solve the problems

-24-

which emerged. The implementation of the MFV component faced serious dif-ficulties, with significant implications on the financial viability of GFCCA.At the same time however, an achievement of the project has been the successin designing a fiberglass canoe, which has now become popular with tradi-tional fishermen.

7.03 Various lessons can be learned from the implementation experience ofthis project. The principal ones are:

a) It is desirable to have adequate investigation and design for majorworks completed prior to loan negotiations. This is particularlyimportant where complex civil works such as breakwaters are involved.Where this is not possible, the implementation schedule needs toprovide adequate time for such pre-construction investigationalactivities.

b) When significant design changes take place after appraisal, it isnecessary to ensure that provision of critically important equipment(in this case a floating crane) required for successful completion of*orks is ensured either by being available with the contractor, orprovision made for its early acquisition.

c) The physical scale of components should be designed in a manner whichis not too ambitious in terms of the implementation capability of thedirectly involved institutions.

d) Particular attention should be paid to the design of credit recoveryfrom beneficiaries when this is through an institution which does notcontrol a large part of the market output and when the lending banksdo not have sufficient field ofices and staff for loan recovery. GOIhas suggested that credit should be routed through the StateFisheries Directorate where loan recoveries have been more success-ful.

e) Due consideration should be given to fishermen's choice in theprocurement of equipment (in this case OBMs), as their efficient userequires acceptability of the make/model.

f) It is desirable to involve beneficiaries in designing the equipmentwhich they are expected to use (as has happened in the case of thefiberglass canoes).

g) The local implementing agencies acknowledge the active support theyreceived from WB Supervision missions. This points to thedesirability of having continuity of a technically strong Bank super-vision team, as has occurred in this proiect.

INDIA

(Loan 1394- INCreslit 695-IN)

Comoarison of Aouralsal and Actual osts

AnarniLsal Eat1m a Ar%ua6 __ _a_ Actu I 4 *qt l.U!*5Itsv Units Rs'aoo -t/ &SS*Q0 I/ UfnIt s Rs'U usso0 aS QF/ Mnw R'flUs USs

Hiarbour ImprovementManlgrot 32.370 3.596 36.353 2t 3.765 112 111!,Veraval 138508 15 ,3 208,0VQ 2' 21i.iA 150 I38

*s!lb-Tatal 170.878 18.986 244.353 24.933 143 131

stvhe facilitiesMangrol 5.741 63tve aval )513 2848 2g4 .1- I I 1

Sub-oitaJ 31.376 3.466 294 36 t I

M4tiantised fSslling Vesselis 210 b6i.988 7.432 137 33.977 4.212 Sl SI 5 5

'saoittonal Fishermen Compooentreetoes. Sna. nets & e.;uipment 350 11.674 1.29t 29 1.843 165 8 16 *3OSMa 1.400 12.132 1.348 428 4.132 504 31 34 1?Permanent Sheds 6 583 65 7 633 73 88 109 112Roaas 33.5 km 3.982 442 17.4 kcm 2.531 293 52 64 66Water Supply 5 units t,687 410 4 units 2.905 337 8V 79 H11Trucks 4 use .7. 3 382 48 75 55 2

Sub-Total 32.754 3.639 12.426 1.420 38 39

ttet Making Machines 2 1.802 200 2 2.035 256 IUO 113 129

fechtulcal Asaista,ce 37.976 4.220 32,411 4,2UI a5 9!)

J.QEAL 341.f74 37.963 325,496 34.88fl 95 92

I/ Price contio9encies have been distrihuted among the component costs on an approxfmate basis. In ttce absetce of a detaiilld

annually phased project cost table in the SAP.

.I See tables 2 £ 3 tor details; the cost tor Veraval includes RslS million estimated for completing worhs.

3, 7he tot lo"tns rates at excthsge (Rs pee US$) have been used: 1978/79 - RsAS.2t; 1979/80 14613.08; 1980/8t - Pt7.8J;.

1901/82 - RsS.93; 1982/83 - Rs9.63; 1983/84 - RstO.31; 1984/85 - Rs11.89$ 1986/86 - Ps12.20.

_/ Cost of a study undeltaken by consultants far the GFCCA. I

JNOIA

GUJARAT-flSHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

Actual Expenditures on Harbour Imurovement and Shore Facilities - Veraval I Harbour(Rs '000)

t978/79 1979/80 1980/81 1981/82 1982/83 t883/84 1984/85 198518 6 Total

Bteakwater 352:6 1,722.5 4.399.8 4,024.2 6,366.3 8,352.9 9,185.1 2,355.6 36.559.0Landing Quay - 111.6 - 3,210.6 1,440.B 198.5 1,318.3 590.1 6,877.9Berthing Jetty - - - 523.9 1.7901 1,595.8 4J3.2 4.343.0Oredging of Harbour 2,174.7 5,292.3 5.957.1 1,005.6 10.685.3 3,366.3 2,609.4 147.8 31,238.5Cotferdam - - 204.0 - 510.0 - - 306.0 1,u20.0Repair facilities - Civil Works - - - - - 432.1 2,798.8 428.3 3,eb9.2

- Crane for Boats - - 3,295.9 - - - - - 3,z96.9 C.foebt Overbridge - - - 123.3 83.8 207.1Construction Plant 1.909.5 - - - 3.206.1 - - - 5.1156Dredging - Purchase of Equipment 9.9 3.7 21.833.3 3,986.5 - - - 25.833.4.

- Operating Cost - - 0.8 516.0 2,223.7 3.195.3 4,435.5 2.410.1 12.781.4Ruads and Pavements 191.1 29.1 13.9 10 ' 182.5 172.2 3,473.5 1.918,8 5.991.dAuctiotn Halls 534.7 97.7 - 339.8 3,391.5 1,137.7 5.501.4Management Building 278.6 35.8 3.6 26 ... 7.9 6.7 - - 354.2Canteen Building 143.1 0.9 - - - 3.6 - - 147.6Workshop - 121.7 - - - 87.5 130.7 16.7 356.6Gear Shed - 21.5 0.9 218.0 121.3 36.2 531.6 - 929.5Otfice Building -- - - - - 109.1 272.4 381.5Fenccing 104.3 139.0 0.4 _ 160.7 806.2 153.9 1,364.5Navigational Aids - 3.9 - - 87.1 18.0 3.9 112.9Water Ss,pply - 519.4 153.7 7.6 5.018.5 77.3 4.012.7 107.8 9.897.0Electrification - - - - - - i,749.2 865.4 2,614.6Drainage - - 12.1 30.9 - - 700.0 - 743.0wC EstablisStment 47.5 81.2 52.5 29.1 30.3 82.3 97.1 4.7 424.7Contingencies & Miscellaneous 515.1 296.5 600.3 375.9 553.3 1,564.6 966.5 312.1 5.184.3Cyclone Damage - - - 353.7 3.190.9 1,168.1 - - 4.712.7Difterential Cost on Materials 190.4 - - _ 245.5 3.788.9 5,912.7 1.224.0 11.961,5Price Escalation -2_4_2 734.5 1.661A.9 4.604.1 1.960.5 1,296. _ §20.4i

Sub-Total 6,947.2 8,656.3 37,401.4 15,451.7 38,910.4 26,870.7 45,261.1 "4.Z00.7 SUZ.699.5

Estimated Cost for Comtpletion 1'.. JIO.!,

NU01%e: Office of the Project Superintending Engineer.

1"DliGUJART EJ ftflJ"e XeRsPsJECT

(Loan 1394-IN/Credit 695-IN)

Actual Expenditures on Harbour lasurovenmost and Shore F cii1ties - Manq Hriour(Rs'000)

1978v72 l9t9SB0 980181 1981}82 9va/ma Hg83784 184/d5 t985186 lot1alIBeeakwetegs t,549.1 3,181.7 2,155.4 1.422.6 536.8 S84.5 2.922.0 336.3 12.69 .IH~,s1n Excavation 345.1 267.8 427.2 736.6 4.4t1.0 459.8 - 1.005.6 7.653.tQeays & Jett1es - 292.8 - - 494.8 592.9 - 345.9 1.7f 64%hore Works - 566.9 263.7 527.4 572.0 1.831.2 3.776.2 199.7 7,738 1Water Supply 9.6 - 506.9 282.1 23.8 59.1 14.3 - 895. Electrification - - - .5 17.5 65.9 492.0 - seu.'vigatial Ai#ds t- 4.7 - 3.3 14.0 32.0Cycvlone Oamages - - 5.1 77.7 46.4 34.5 - 163.1Miscellaneous Expenses 24.2 - - -- - - 24.2W.C. Contingencies 24.9 22.7 66.1 6.1 103.6 620.7 38.9 - 983.0iUfferential on Cost of Materials (223.5) 56.3 191.3 (300.3) 239.4 891.5 (22.9) 262.9 1.294.7Price Escalation - 85.2 249.1 Z95. .LAh06t.3 _J _ _4 2_fi _1I4

Total Cost 1,730.0 4,483.4 3.8S9.7 3.,80.7 7.552 6 f.30.3.4 7.26n.3 2.qNl.4 36.352.5

soufcet Office of tte Project Superi.itenaing Engineer.

I!

- 28 -TaLe 4

INDIA

UJARAT FISIERIES PROJECT(Loan 1394-IN/Credit 69S-IN)

Coarlson of Aoraised and Actual lwrovementsVeraval

Item Actual

Extension of Existing Breakwater 334 . 334 .Construction of Nw Breakwater 500. 500 DReclaation of Beach Area 7.5 ha 17.5 haConstruction of Landing & Bunkering Quays 535 . 1.060 aConstrutlion of Open Brthing Jetties 1,120 a 1,120 Deeping of Fishing Harbour Area 100,000 .3 135.000 .3Basin Excavation (Land) - M99,30 o3Excavation of a 45 u wide Entrance Channel Approx. I km Appx. 1 kmConstruction of Slipway with Cradle i ft. Replaced by CraeConstruction of New Paved Roads Y 1.9 kaConstruction of Ne Roads Without

Paving 1 2.6 kmAsphalt Paving of Existing Roads / 2.3 kmAuction ltl -Number I no. 3 Ns.

- Area 8,250 92 7,500 .2Trash-Fish Platform 2,500 .2Offices , 532 .2Conteen ad Shops y 355. 2Bear SheWs 2.250 m2 1,494 2ZWork Shops 1,250 .2 450 .2Auction Hall Office y 240 .Surfaced Areas:

Net Drying Area / 4,935 2Parking Area / 6,580 .2

Fecing 1/ 2.575. Navigation Aid 1/ 2 NosWater Supply 2.000 tons/day 2,270 tons/dayDrnage Adequate AdequateElectricity Supply 40 w 40 ewSite for Fuel Supply Adequate Adequate

a/ Physical targets not specified in SAR.

- 29 -

TabLe 5

[14DM

GUJART FISIIERIES PRECT(Loan 1394-IN/Credit 695-lM)

Coarison of oppratsd and- ual ISrovMeL& tsIbnqrol

item Tret Actual

Extension of Breakwater 250 a 293 uProtection Arm 19g 185 aroe 7n o

Resin Excavation 66000. 3Quays U5 3943Formtin of Protected Beah for Canoes yFomation of Lan Area for Fishing

Related Activities 2 ha vConstruction of Roads J 5.7 Contruction of Paved Aras 11,846 .2Auction hall 1,950 2 1.950 .2Offices y ' 398 2Canteen 1 296 2Bear Shed 200 .2 400 2Water Supply 245 tons/day VElectric Supply Adeqte AdequateDrainage Adeqate AdequateFish Drying Area y yWorkshop 240 2 OeletedSite for Fuel Adequate Adequate

/ Physical targets not specified In SAR./ Extent of wark carried out not known.

- 30 -

TR 'ir Tr r-o -AH I x 1 q ( I1I

LLX X ,_

Ao" __wwm -IL -g -W _-W-_

IsmLANKf

- 31 -

Table 6Page 1

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/credit 695-IN)

Physical Parameters of Principal Works

Phys1cal Contract Revised StatusC-im-ont- S v Duant ity uecemoer 1985

Veraval

Western Breakwater

stones 1-200 kg 201,000 tons 375,000 tons 448,365 tonsArmor Rocks0.2-2.6 T 88,000 tons 120,900 tons 202,080 tons

Dolosse 5 T 3,765 3,414 5,21012 T 1,240 3,964 4,222

Eastern Breakwater

Stones 1-200 kgfrom quarry: 17,200 tons 91,930 tons 154,109 tonsfrom excavation: 69,400 tons 20,758 tonsArmor Rocks0.2-2.5 T 49,100 tons 51,350 tons 81,980 tons

Dolosse 5 T 940 Nos 1,700 Nos 2,506 Nos12 T - 1,340 Nos 608 Nos

Concrete Grouting 850 m3 2,445 m3 DeletedCapping Slab & CrownWall - - 8,136 m3

(WBW + EBW)Excavation (land) 708,000 m3 900,000 m3 899,730 m3Dredging Rock 25,000 m3 25,000 m3 29,700 m'

Soft 110,000 m3 110,000 m3 91,100 m3Berthing Jetties 8,300 m3 8,619 m3 8,619 m3Quay Walls 15,440 m3 24,502 m3 23,616 m3

Source: Office of Projects Superintending Engineer.

- 32 -

Table 6Page 2

Physical Parameters of Principal Works

Physical Contract Revised StatusComponents uuantitt t December 1985

Mangrol

Western Breakwater

Stones 1-200 kg 107.250 tons 107,250 tons 113,593 tonsArmor Rocks0.5-2.5 T 66,200 tons 62,000 tons 46,668 tons

Dolosse 2 T 1,659 Nos 1,600 Nos 1,600 Nos5 T 1.400 Nos 1,575 Nos 1,575 Nos12 T 816 Nos 816 Nos 753 Nos

Rock Excavation(Basin and Land) 54,000 m3 55,175 m3 85,010 m3Block Work forCoffer-Dam 1,310 m3 1,310 m3 1,310 m3

Quays 360m 360 m 394 m

Eastern Breakwater

Stones 1-200 kg 55,760 tons 35,000 tons 40,800 tonsArmor Rocks0.5-2.5 T 28,000 tons 27,440 tons 12,238 tons

Dolosse 2 T 1,023 Nos 100 Nos 109 NosS T 450 Nos 450 Nos

Capping Slab &Crown Wall - 5,464 m3

- 33 -T Table 7

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-'N/Credit 695-IN)

Financinq of Credit Components

Item PrcJect Total Bank Loans NABARO RefinanceUnits tost No. Rs§'OO No. Rs'OOO

MFVs 137 33,977 137 27,967 137 22,325

OBMs 428 4,132 60 1/ 185 60 148

Canoes with OBMs 29 1,843 29 1,050 20 2/ 755

Net Making Machines 2 2,035 2 1,628 2 1,221

Trucks 3 382 3 260 3 208

1/ Only a small percentage (14%) of the OSMs procured under the projectwere purchased by fishermen on credit.

2/ Of the 29 canoes with OBMs for which loans were given by the hanks,refinance from NABARD was only sought for 20.

-34- TabLe 8

INDIA

GUJARAT FISMERIES PROJECT(Loan 1394-IN/Credit 695-IN)

SChedule of DiSbursementS (Cumulative) 1/

IERD Actual Disbursement asFiscal Year ADDraisal ActUal Percent of Appraisa1and QuarteQ Estimate Disbursement Estimates

.....(US$ Million).....

1978 (1) - -

(2) - _(3) -(4) 2 - _

1979 (1) 5 . _(2) 1.1 -

(3) 1.8 S 28(4) 3.0 1.1 37

1980 (1) 4.3 1.5 35(2). 5.5 1.6 29(3) 6.8 .3.0 44(4) 8.3 3.6 43

1981 (1) 9.8 4.0 41(2) 11.4 6.7 59(3) 13.0 7.S S8(4) 14.0 10.1 72

1982 (1) 15.0 10.4 69(2) 16.0 11.2 70(3) 17.1 11.3 66(4) 17.4 12.0 69

1983 (1) 17.7 12.3 69(2) 18.0 12.3 68(3) 18.0 13.2 73(4) 18.0 13.9 77

1984 (1) 18.0 13.9 77(2) 18.0 13.9 77(3) 18.0 13.9 77(4) 18.0 13.9 77

1985 (1) 18.0 15.4 86(2) 18.0 15.8 88(3) 18.0 16.1 89(4) 18.0 16.4 / 91

Date of last disbUrsements May 10, 1985.1/ Together for both the IDA Credit (US$4 million) and the WV Loan

(US$14.0 million).2/ The undisbursed balance of US$1.S8 million from the Loan was cancelled;

tao IDA Credit was disbursed n full.

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

Allocation of CrettlLoann Procees

Aonr&a4l- _ Actual Dibussement Actual itAllocation ID. Lo.j|t l.Jdaf% oLtal of Appraisal

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

(I) Dredging equipmetnt and spare parts 1,400 I.t 2,145.6 2,147.3 153 l

(2) Clvil woeks. mate-als and equipmentfor Parts Al)) and A(3) of the project 7.900 2.043.4 7.2S3.6 9,297.0 118 JJ

13) Consultants' services 800 42.5 132.9 17S.4 29

(4) Cost of marketing study and test fishingoperat I i.ns 3.400 1,260.9 1.92t.7 3.188,6 94

(S) Loans by AROC (now NASARO) as describedunder Schedule 3 ot the OCA 4.i00 e_ i .SI..59.7 1.61t.2 34

Tutus 18.000 4.000.0 12.489.5 16.419.5 91

Amount Casicel Ieti - I 580.5 I -Sao_1 ,

Original Credit/Loan Amount 4000fi-0 14iS00.D la-DJ.U

I1, No *eallocation of loasn proceeds was carried out.

I!4~~~~~~~~~~~~~~~~~~~~~

- 36 -TabLe 10

INDIA

GUJARAT FISHERIES PROJECT(Loan 1194-IN/Credit 695-IN)

Proposed and Present Staffing of FTOs

Veraval 1/ Mangrol 1/Staff Posts Total Posts Fresent Total Posts Present

Director 2/ 1 1 -Market Superintendent g/ 1 -- Dep. Mkt. Superindent 2 1 1 1Chief Accountant 1 1 1 1Registrar 1 - - -Berthing Master 3 1 1 1Stenographer 1 - - -Auctioneer 7 1 2 1Cleaning Foremen 3 1 1 1Storemen 1 1 1 1Security Staff 6 3 5 3Cleaning Staff 6 3 3 3Clerks 9 6 7 6Driver 2 - 1 -Peon 2 - 1 -

Total -49

t/ While the harbour at Mangrol has already been commissioned, Veraval isexpected to be officially commlssioned later this year.

2/ Responsible for both FTOs.

IERIA

GUJARAT FlSHERtES PROJECT(Loan 1394-ZN/Credit 695-IN)

Quick freezina and Ice Makin Facilities to PrgAect Area

Year Ice Making Lfe Sitoage Freeziona Plant Frozen St9t4eUni1t CajiaC Ity UjLti Cuacltt Uni t Capac,t1 Unit jCji I tv(No.) (t/day) (No.) (tons) (No.) lt/day) (No.1 (tons)

1976 19 186 9 780 3 42.0 3 750 W1977 24 263 12 1.047 7 94.5 7 1.500 "1978 26 304 16 1,862 9 110.0 9 1.7851979 30 389 la 1.512 tO 118.0 tO 1.9651980 32 434 19 1.762 it 134.0 12 2.7351981 34 464 21 1.922 14 166.5 . 34 3.1351982 35 4t4 21 1.922 IS 172.5 IS 3.2851983 35 474 21 1.922 15 172.5 15 3.2851984 35 474 21 1t922 Is 172.5 is 3.3851985 35 474 21 1.922 16 223.0 16 3.385

Sources Office of Project Coordinator.

.,IE.~1

-38-

Table 12

INOIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

Present Processing Units at Principal Ports

Item Veraval Man.rol Porbunder

No. Caacit LO. Capacity No. CapacitY

Ice Plant 22 329 tpd 7 81 tpd 22 272 tpdIce Cold Storage 16 1,640 tons 3 170 tons 10 350 tonsFreezing Plant 16 223 tpd - - 3 25 tpdFreezing Storage 16 3,385 tons - - 3 1,150 tonsCanning Plant 1 6tpd - - - -Fishmeal Plant 1 50 tpd l/ 1 60 tpd SJFish Pulveriser 12 102 tpd 3 25 tpd 2 40 tpd

]/ Raw material.

Source: Office of Project Coordinator.

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 60S-tN)

GFCCA - CoMnarative Balance Shoots(Rs'000)

As at the Year End 30 JunO __ _ _1985 1984 1983 1982 1961 1980 1979 3978

Fined Assets 1l.6d7 11.651 12.172 12.6e8 10.116 6.381 S.683 3.841Pre-Operation a Project E.p. 149 360 156 156 2.6SS 2.134 a81 islIvestments

25 25 24 12 12 12 12 ItICurrent Assets:

"hi- Purchase Debts (MeVa) . 44.957 41,284 38.642 36.637 31.604 18.945 -Others .69L5 t6.366 12.L82 _L6,344, 15.470 t7.643 16.073 _15.ub4Total Assets _t3L7Q3Q.M.2" h 63.7SLS _65.037 5LIfi4iQ _ -IIS LIg AA 18 3 Paid Up Share Capital 5,332 '.329 5.340 4.137 3.974 3.944 3.86t 3.97g

fet @,ves 6.026 5.638 4.907 4.904 4.846 4.844 4.504 4.039.e os Accumulated Losses sfl.7151 9.JlJJ1 t9..255J (4AI2a1 1.J.051± t219) . ' IS? 6.2

fifti_NIM11 4.642 )_a 1,5 992 4.21 7.?69 8U.50 8.542 _Q,6-45Secured Loans%Gover"ment Loans 38,708 317712 17.068 15.925 12.028 7,297 3.402 3,358ftom Bankst Term Loasu 3.019 4.602 4.891 5.897 5.173 3.385 1,476 -worMUin Capital l.S89 1.976 2.677 3.135 2.267 2.721 1.005Project MFV RelSted Loans 40.141 36.561 33.782 31.373 26.168 16.774 -Other Loans

-- _3_ 636 9 7 7 97Sub-Tutal _§3,457 60-851 -58.438 56.330 48.272 30.313 6 BtiO 4-lb!fCur rent LIahilities 5602 S.84g .4-34f 5.225 1,A1 z 6.293 L6.747 f.i.gfi_TQJIl CASILtal 8 LbiOiaLLtleA 7.31Q] f8A3 5AL.776 _8583 _S9_10 _45.m 1fl 22.149 18,93

Soutce: Aridited AcCounts of GFCCA

lbI,

GUJARAT FIS ES PROJECt(Loan 1394-14/Credit 695-IN)

GFCCA - Coomarative Profit & Lose Accounts

For the Year Endcin 30 Jusjj

lsR5 190i4 1903 19B2 l§81 1980 li92 1978....... .......................... ....................... (Rs'OOO0) ......... ........ ..........

Sales Revenue 55.421 47.165 40.794 23.253 27,968 36.841 40,499 37.465Less Cost of Sales 44,225 38.754 35,122 17,365 22.787 30.460 33,351 30.773 1

Gross Profit 11.196 9,411 5.672 5.888 5.181 6.381 7.148 6.692 o

Psoduction/rt-ading Expenses 6.121 5.523 6.916 6.693 5.059 6.211 6.250 5.409Sellitns Expenses 654 622 803 409 270 346 88 99Administration Expenses 1.695 1.524 1.527 2.429 1,165 1.8l8 1.534 1.028

Total Ooeratina Exoenses 8.470 7.669 9.246 9.531 6.494 8,511 7.872 6.536

Operatt.9 Pcutit/(Loas) 2.726 742 (3.514) (3.643) (1.313) (2.130) (724) 156Otler Income 1.360 1,320 1,353 1,892 1.627 2.069 1,150 706

Profit/(Loss) nefore Interest 4.086 2.062 (2.221) (1.751) 314 (61) 426 862

Interest on Loans 1,664 1.865 2.136 2.022 1 059 790 333 ?96

Profit/(Loss) after Interest I/ 2.422 197 (4.357) (3.773) (744) (851) 93 566

1I Appropriations and prior year adjustaents *ave not been shown lere.

S_urce GFCCA. I!. ,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c

LDtA

GUJARAT FISIERIES PROJECT(Loan 1394-IN/Credit 695-ZN)

GFCCA - MFV Loans and Recovet L pQsitioi as at 31 Decegbej 1985(Rs'000)

Nag_ of Bank No. ft aoats Loan PC incitla Interest Total Recoverles AerduettAdvanced "U P---t ~~~~~Effected Overdue

Bank of Baroda 45 8.196 5.278 7.846 13.124 3.506 11.618Batk of Itndia 45 9.077 5.08 6.730 11.811 1.460 10.351 1Dena Bank 20 4,119 2.451 2.954 5,405 551 4.854 F-'lInion Bank 19 4.585 1.911 2.035 3.946 716 3.230 1Unites Bank of Jndia 3 75t 338 46 87 720

mini. 132 11 26.728 15.059 20.034 35.093 4.320 30.773

i4biffcf: G FCCA.

J/ Of the 137 MFVs finanred under the project, loans for five were given directly to the fishermen by the Sank of India.without going through GFCCA.

cren

- 42 -

Table 16

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

fPCS in Project Villages

Village & FPCS Membership Share Cap1taland

Other Funds

langrol SaraMangrol Bara Matsypdyog 233 9.35Sahakari Mandli Ltd

Chorwad(i) Chorwad Shavani Lodhi 239 12.37

Sahakari Mandli Ltd

(ii) Chorwad Sagar Utpadak 123 6.55Sahakari Mandli Ltd,

HirakotSharat Matsyodyog 70 10.94Sahakari Mandli Ltd

SutrapadaSagar Matsyodyog 434 73.45Sahakari Mandli Ltd

Dhamlej(1) Chamlej Matsyodyog 380 177.86

Sahakari Mandli

(ii) Karimi Matsyodyog 137 11.20Sahakari Mandli

MuldwarakaMuldwaraka Macchimar 68 4.40Sahakari Mandli Ltd

MadhwadMacchimar Vividh-Karys kari 316 20.27Sahakari Mandli Ltd

KotdaKotda Matsyodyog Sahakarl 234 5.40Mandli Ltd

- 43 -

Table 17

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-IN)

Fishing Vessels In the Project Harbours

C e n s u s F a u r e s 1/1977 l979 198li3 1986 2X

Veraval 19K

.14.8m MFV Trawlers 413 542 581 626 75014.8m MfV Gillnetters 84 69 74 82 n.a.Motorised Canoes 162 132 223 277 n.a.Non-Powered Craft 53 40 23 11 n.a.

Total 712 783 901 996 nMa.

Manarol

14.8m MFV Trawlers 98 139 166 168 18014.8m MFV Gillnetters 4 - 7 13 n.a.Motorised Canoes 12 35 85 120 n.a.Non-Powered Craft 60 55 29 8 n.a.

Total 174 229 287 309 n.a.

Project Area Villages V14.8m MFV Trawlers 47 99 89 51 n.a.14.8m MFV G6ilnetters 39 28 48 65 n.a.Motorised Canoes 566 602 718 770 n.a.Non-Powered Craft 248 174 113 53 n.a.

Total 900 903 968 939 n.a.

TOTAL 1,786 1,915 2,156 2,244 n.a.

1/ Based on census taken before commencement of season.

j/ Estimated by local staff at time of visitAto project area.

3/ Villages of Mangrol 8ara, Chorwad, Hirakot, Sutrapada, Ohamlej,Muldwarka, Madhwad and Kotda.

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-I#4Credit 695-14)

Estimated Marine Fish tandinas In Protect Area tCentre Wise)

Fishina Landina 1977-7Q t9li-711 t979-B9 1980-8t ItkA98-22 IM82I02 .i2O iL4 .L 9hA-ACentre

.......................................... ( o l ).........................................................(tes ............... ..

Veraval 56.419 79.978 75.326 79.112 91.609 58.036 64.823 88.362Mangrol 6.572 5.829 11.033 7.852 9.081 11.160 21.762 21.094 1Mangrol - Sara 838 539 505 687 612 529 640 862 sChsorwad 1.122 1.200 1.387 1.077 1.006 518 419 741 4s"HIrakto I.065 1.026 679 680 8oB 813 791 698

Sotrapa-a 1.378 1.627 1.598 1.394 1.858 873 2.646 3.338Dhailej 1.114 453 3.362 8tt 851 1.034 2.711 1.390Muldwarka 1.982 1.439 1.177 t.S33 1.53 992 2.121 604Madhwad 1.537 3.204 2.848 4.202 1.955 3.693 17.179 9.288Kotda 1.007 3.149 1.962 t.S62 740 1.925 15.2b0 11.487

TotatJ 73-034 . 98.444 99.8t9 98.9tO 100.033 79.783 120 402 137.<J44

SoutMce: Oftice af Project Cooritantor.

-4

_a*o

0

- 45 -

Table 19

INDIA

BuJARaT FISHERIES PROJECT(Loan 1394-IN/Credit 695-1N)

Landinq Prices of Important Fish at Veraval(its per kg)

Nase of Fish 1978-79 1979-80 10-81 19813-8 1982-83 198344 1984-85

White Pomfret 6.70 9.95 10.50 14.55 19.05 20.15 18.77

Black Powfret 2.85 4.85 4.15 7.15 7.70 8.50 9.63

Jew Fish 2.65 4.10 3.95 4.65 s.85 6.65 6.18

ils& 4.55 4.75 5.05 6.15 6.70 6.80 8.08

Seer Fish 2.80 3.70 4.35 5.85 6.80 7.40 8.23

Silver Bar 1.35 2.30 2.30 2.50 2.90 4.30 3.3i

Shrimps 5.05 3.30 4.50 5.20 6.10 9.40 6.54

Prawn-Nediul 13.95 17.15 10.70 15.80 20.20 26.95 22.24

Prawn-Jiuwbo 44.85 40.15 27.75 42.25 56.65 64.50 63.67

Lobster 30.15 23.40 24.90 26.85 32.95 35.35 38.17

Source: Office of Project Coordinator.

-46-

Table 20

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-;N)

Escalation In Diesel & Lubricating Oil Prices 1/

Period Diesel Lubricating Oil

Price Index Price Index(Rs7/Lt-re) (Rs7/ Ltre)

From 03-01-1978 1.47 100 46.10 10003-01-1979 1.58 107 49.02 10608-17-1979 1.77 120 49.50 10709-11-1979 1.69 115 49.71 10806-08-1980 2.43 165 55.57 12107-15-1980 2.44 166 56.16 12212-01-1980 2.45 167 58.72 12701-13-1981 2.86 195 60.48 13102-16-1981 2.87 195 60.60 13104-01-1981 2.90 197 61.35 133

o 07-01-1981 3.24 220 62.18 13501-01-1982 3.28 223 63.00 137

U 09-01-1982 3.09 210 65.00 1410 02-15-1983 3.33 226 66.20 144

04-01-1983 3.37 229 67.10 1460 01-01-1984 3.40 231 68.52 149

12-01-1984 3.18 216 70.00 152Present 3.40 231 85.00 184

jj Prices ApplicablE to Fishermen.

Source: Office of Project Coordinator.

GOUABAT P1SkNE S P30JEC1(Loan 1394-tWICeOC*tt 095-lttl

CtAn 5Ilw Proactton - t5,* Tr..a.t-

Aversoc Catcth °f ftvc ha 9nue/Coata SAR

ltons)ftan.e- f roe catch

total zatc9?WasrShr- Jt 11 9t .4S 15.00 141.1S0fISh - C) 3b 4.OS I9.00 76.950- C2 99 *2.tS 7.00 0s,050_3 its 1 14.8S 4.00 59.400_ C4 S s _2394.5Q 0.t0 E8 150Total o009 135.00 .. 2 10Q 189.700

O.erat-o- cost.

6etS * lubricants (St ot f-t1 Costs$ 2It I7.430MaIntenance h- l tt en9tne 1J 20.eoo00Pishi1g sear uatntenonce & replace--nt Al 15.000Wae 3- I se *iPPe. 5 Cr0.,) jI ss.soaFood 3/ 11.000ICe 1J 23.900tn*.-ance a10.00

Port dues II t.760iscelletoo,us * ovgrheads * 00

lot&% 271-400 *04-200

QnoLLLna. lo.?Bm . ±a zi1

PreASnt Inuestednt Cost la/ *n.ogn 19jL1QQ

mt oan 320.000 1/ V68.0800Own fina.nce _Q_Q

Debt SUc.eIna *0,020 1t 35.700

^^epnas annuAt Not C--"t ego 90.990 4Y.90o

iftanctal *At& of aeturt I 9 39% 631

It S% CO 0562/kg. 5 tooster R*38als. 25S C2 as23/59. 6GS C3 *s7llg. with and swerage priel of PalS/kg. Prices used In theanalsla ar- the eveaoges of portees obtained in the last 3 ear-s 1982/*3-)94/0S.2t 34 trtPs a p-or with 205 fishing *&Vs. 13 hoursldOy. 12 *ItrosJbour. Ra3.40ISttre., It101t.0O - for bull. RD10.000 - for *engin.At 3 trawls **3.000 oecn. *00 a arP 11010tit.

I SI pp-n 11.sloomohotn. croew f.O009month. r * months.

It a tonu/tEIp. 17/te7tOn.3 for crew a"n tesesa*9/0 mOnths w RStSO/month. 4 months a Us40/month. 4.400 for crane. 1Dlot Present veraoge ilvastmnt cost.JJ/ at fon. at R2.5%. Aepayment hCs bOe4 estimated on0 the 0ASIS of' 9-Vear rtepayPnt perlod. after one poor's graco.la/ Estimated an total )nvestont. over C Poriod of tS years.

4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

MatstVSwRE'FOJ0GUJaA4A PlteSUIBSl PR0iVcT

(loan 1394-lteCrOdit 69S-1N

Cast Flow Protection - Cano- gotn Cutbes-s 8o5r

Averags Catch P-Ci.st.aSJ S , .. tCasts .5aBSR fEstisat

ntonlRevenue Irg Cateh

P,@hl C-I 20% 3.4 I2 40.800C-2 20% 3.4 6 20.400C-3 10% *.7 3 $.*00C-4 *.s I a.SO;

Total n O J4L . a ZS.000

Operating Costs.

Fuel & Lubr$cants Ji 7. v3aWelnt:nanco of east =l I 200Daintenanca a Rteplc*e.nt 34 Uotae Al 2.02O

Gear Maintenance A Rftepsca"Ot Al 4.000Wags St:oad t4 Cer-) Al 6.4S0

MIscelaneuS i 1.040

Total 2t 11S3 Q

Ocerat ota tnco"e S2_947 8 60o

Present Investment Cost ft Z0.000 3.L40D

! inancina-AT lOan S6.000 2' 2..300

SubsIdy 5.000 2.700O.n^ finance ?O A

0.0t Servicing 15.660 2t 6.200

averaee Annual Not Cash Flow 31.26* 2.400

FSnAnclal Rate of netu4 n LgI 75l 30%

LI 4 hours of operation per day. 215 days. 2.5 Ittres kIaros.nethour. Rs2.ZSttitres140 litre oal. RsIStlitre. 10 kg Srease. Rs*2Otlg.

Zt 3% of new boat value.at 25% oa capitat cost.&I 25% of capiiat cost.St No wages paid each cre. member shares tn the catch. &

'1 est**matd value for flsh taken hOn . *sl.SOtdar for each c,ew. 215 ads.. D

le 55 of op-rat tAg coat.at Present average Investment cost.It MT loan. at f2.5%. Repayment has been eat leate on the basis of a 5 yn cr reasyment oertod.Jj/ Estimat-d on totI invostment. ov-r a P-erod of t0 years.

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-1)

Cash Flow Protection - OutboaCd Mgtor (for existinY canoe)

Canoe Without 08WAverage Catch Price Rweven Canoes 1/ lnctm rt.aJ SAR

per Unit pr kg Coats with 0 SIncome fron 08W eate(tons) (Rs) (Rs) (Rs) (Rs) (Rs)

Revenue from catch

Fish - C1 20% 2.4 12 28.800 40.800- C2 20% 2.4 6 14.400 20,400- C3 10% 1.2 3 3.6uO 1..100- C4 50% 6.0 1 6 I000 8 500

Toltal 12.0 52.800 74,800 22.000 7.100

Ojeratitin costs

Fuel & lubricants - 7.t38Maintenance of boat 1.200 2/ 1.200Maintenance & replacement of motor - 2.025Gear aaintenance & replacement 4.000 2/ 4.000WagesFood 6,450 6/ 6.450Miscellaneous Sa_1-040

Total 12 230 21 853 9,623 2_900

gueratina Income 40,570 52L94Z t2 377 4.200

eresent InvestMent Cost I/ jg-

FlnancinqMT loan 7.000 4/ 4.600Subsidy - 400Own finance

10.,0,0 5.60p

Debt Servicina 1.900 4/ 1.900 8.Averaae Annual Net Cash Flow. 10t477 4.200

fj1naclal Rate of Return 5I 121% > S

j/ It is assumed that the catch of canoe with 0DM is 40% higher than the catch of canoe without (3M (see lable 22).2/ Assumptions are ide,s,t1cal to tiose made foe canoe with 08W (Table 22).2/ Present average Investment cost4/ MT loan. at 12.5%. Repayment has been estimated on the basis of a 5 year repayment period.

e 8stimated on total Investment, over a period oat years.

GUJARAT fIShERIES PROJECT(Loan 1394-lItCredit 695-IN)

Re-estimated Economic Rate of Return - Veraval Harbour ji

reaar No. of 14.8tr KFVs IncFetmental "arbour C£ait .at Operatit Incre"ntal et Incr.Total I/ Pro-ict MFVs used for CProdjuctbo Z/ bencfitsBasta 'Ji others It Analyst& lJ

...... ..... . (No. of units) ........... ...................... (.RsfnoOl ......................

1978179 413 - - 10,137 - - - (10.137)1979/S0 542 70 iS 8S 10,789 29.920 17,264 26.048 (31.925)1980/81 542 30 - 30 26.878 10.560 25.033 28.411 (34.060)1981/82 S8l 5 17 22 13.010 7,744 3I.S96 45.333 47.097)1982/83 581 - - - 36.590 - 31.024 S2.896 0l5.608)1983/84 626 - 22 .22 23.076 7.744 37.403 71.264 3.041 t1994/9S 626 - - - 36.290 - 37.807 6s.683 (8.414) °1985/S6 626 - - - 10,561 - 38.676 64.395 15.158 11986/87 750 - 62 62 12,240 21.824 53.214 B9.SUS 2.2271987/88-S8/89 750 - - - - - 53.428 89,505 36.0771989/90 750 - - - t2.750 53.428 89.505 23.327t990/91 750 - - - 4.500 53.428 89.505 31.5771991/92 * 750 - - - 3.300 53.428 89.545 32.1771992/93 750 - - - - 53.428 69,505 36.0711993/94 750 - - 3.300 53.428 89.505 32.1771994/S-96S9i 750 - - -- - S3.425 89.505 36.077*996197 750 - - - 9.300 53.428 89.505 26.7771997/98-98/99 750 - - - - 53.428 89.50S 36.077

Economic Rate of Return = 13%

I/ Analysis has been carried out In terms ot constant 1985/06 prices.V/ As per fis litsg vussel census. e*te ldble 17.

3J For purposes of ERR computatlus.. t,.,#tu1l a.^ *a.-# boon estiisat..d from project financed MFVs (105 for Veravali and 50% ofthe Incretse In non-project financedt vessels.4/ Financial cost converted to 1986/86 prices using wholesale price index. and expressed In economic terms by deductingtaxes. and using a SCF of 0.80.5/ Includes provision for replacement ot engines.61 Includes operating cost of vessels. and 0 & U costs for tite harbour.L/ Based on an average catch of 135 toous petr UFV (see tatble 21 for catch composition), & actual prices for the different 1years restated in constant 19865/86 terms. I!

CUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-1)

Re-Eatimated Economic Rate ot Return - Mannero Harbour j/

Veer No. of 14.8m UFV& tnco ZFV- Btbour Cosl of Q&Erjjj LQ£C Uet 1met STot.al 2V er.nject I/ SQ% of Others I/ Usedforlg. Anayss a / C9gsj 4 UfMsa1 CA" ni / Producign ZV flmWgfJl

* (s'oO0§.....................)...................

197f/79 9g _ 2.524 - - - (2.524)1979/SO 139 14 13 2? S.622 9.604 5.471 f.274 (12.323)1980/61 139 is - IS 4.069 S.280 9.009 10.376 (7.962)1901/82 166 3 12 Is 3.065 5.280 13.011 18.853 (2.503)1982/83 166 - - - 7.100 - 13.065 22.008 (4.613)1983164 166 - I 1 4.555 352 13.414 25.996 *.67o?t

1984/85 168 - - - 5.821 - 13.893 23.960 4.248 F'1985/88 160 - - - 2.386 - 13.943 23.490 7.1611906687 tso - It It - 3.672 13.985 27.94S 10.0881987/8S-808/9 t80 - - 13.986 27.945 13.9601989J90 180 - - - - 4.050 13.98S 27.945 9.9101990/91 180 - - - - 2.250 t3.965 27.945 11.7101991/92 t8o - - 2.250 13.985 27.945 11.7101992/93 t1oo - - - 13.986 27.945 13.9601993/94 o0o - - - - 150 13.985 27.94S 13.010'994/9S-9S/96 ISO - - - - - 13.985 27.945 13.960'996/97 to o - - - 1.6S0 13.98S 27.945 12.3101991/96-98/99 160 - - - - - 13.98S 27.945 139O00

Economic Rate of Return a 20%

I Analysts has been carried out in constant 1985/86 prices.1/ As per fishing vessel census. See table 1.

1/ For purposes of ERR Computation, benefits have boen estimated from project financed WFVs (32 fto Mangroll and SOI ofthe Increase- In non-prnject financed vessels.

4/ Financial cost converted to 1985/86 prices using wholesale prices index. and expressed In economic teors by deductingtaxes and using a SCF of 0.80.

il Includes provision for roplacement of engines.§/ Includes operating cost of vessels, and 0S costs for the harbour.JL Based on an average catch of 135 to su poe MFV (see table 21 for catch composition). Alt actual prices for the

the difforent years restated In constant 1985/66 toerms.

'I

- 52 -

Table 26

INDIA

GUJARAT FISHERIES PROJECT(Loan 1394-IN/Credit 695-7N)

Re-estimated ERR - Total ProJect 1/(Rsiono)

Year Investment Operatinm Incremental Net IncrementalCost Cost Production Benefits

1978/79 12,661 - - (12,661)1979/80 55,979 22,735 34,322 (44,392)1980/81 46,787 34,042 38,787 (42,042)1981/82 33,194 44,607 64,166 (13,635)1982/83 46,370 47,054 81,264 (12,160)1983/84 36,241 54,053 106,983 16,6891984/85 43,177 55,264 100,807 2,3661985/86 12,947 56,183 99,049 29,9191986/87 37,946 70,763 128,614 19,9051987/88 - 68,8t2 122,254 53,4421988/89 - 67,888 119,540 51,6521989/90 16,872 67,888 119,540 34,7801990/91 6,910 67,888 119,540 44,7421991/92 5,550 67,888 119,540 46,1021992/93 - 67,888 119,540 51,6521993/94 3,450 67,741 118,892 47,7011994/95-95/96 - 67,413 117,450 50,0371996/97 10,950 67,413 117,450 39,0871997/98-98/99 - 67,413 117,450 50,037

Economic Rate of Return a 16%

1/ Includes, in addition to the harbours and MFVs, the cost of 29 canoes,428 OBMs, trucks, roads and sheds; also provision for the replacementof MFV engines and canoe OBMs is included.

GUJARAT FlSH£.RiES PROJECT(Loan 1394-IN/Credit 695-IN)

Or!q'isationat Structure of GFCCA Ltd.

thairoan

F General janager

LGentra lIager Sy. Generat 'anager (Prod.) Cy. enera Manager , Senior ManagerFi.nc, | Senior mavager Nylon met Ptant resh Water fisheries Administration(Yeraval) *Veravat) (Ahmedabad) (Atwedabad) (Ahmedabad)

Accounts an oi Bn eorr ne ervta 1oae Asitn r in"

O"t Engine Fresb Fish Freezing [ ieset Ibthi F etait fish SeedB9uildingISatesIINW dj NW c upsOfc Shop$ farmsvard serviceAsecoverygPtant

mm=s v i, viC a

ISX BLN

I N D t A - GUARAT FISHERIES PROJECT

ILoan 1394- IN Cre4t 69-IN)

MAP OF IMPORTANT FISHING CENTRES IWGUJARAT

A ......

VIERAAL - a. -b 1OO

DUMA Wdw~~~~~. moleet

*fv*ftm0lV eistiudd dwnio

\ ~~~~~~~~~~~wI - @

MA RA V

,x,. >v ~~~~~~,Q U J~~ IA R - .__.|--ILLM:

VALSa

KOLAK

.4 A A 5 A A S E A U4RG

or 3. Dr t2 3r

00C406-20o?o *e " *o

i N D I A GUJARAT FISHERIES PROJECT

( Loan 1394-IN I Credit 69S-IN 3

MANGROL HARBOUR

S-AY-OUT MUMAISOf

I AUCTt@Z ,4ALL AND awltCS _ * p&RKI.J A1EUA-' > \

S WBATERt

S NET .IEP4OR .YARD.'

7 AP#4. OriIcLANtE/. C tr6

SPARKI#im.10 0A*: P&RtcsNlr REPAR YARD.0 Xdk

TItksuILRtmNs GAR StIIWS.It WaXER wn WOR".Is LAN DING Q~U&-f:14 BERTH4ING QUA'(*Is DREDGED BASIN.56 PRocT Gt%ot4 A-Rm57 WJS¶SR 7 aREAKW.K5&TER

i~~~~~~~~~~~~~~~~~~~~~t

0 so 100 150 \ < Cm~~~~~~~~~~~~~~~~~~~~~~~~-9: A* .&F -W I **&.6._

I N 0 I A - GUJARAT FISHEPRIES PROJECT(Loan 1394-IN I Credit 695-1N)

VERAVAL HARBOUR

f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ i} p > +D _ _. _ .

ab - A " Ysl M CO -

* 10 ste H°tE m SEPSC

O tOO 200 300

t~~~~~~~~~~~~~~~~~~~~~~~~~~5 _~wn *&a...... .n ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~I AI Ous

iqlLn SI

H~~~~~~A -J -Jr -J FI ii_ o s v i - - LLL I

_aa

;H) z>@pUty 5913hi1|oi0Ect eIRI) mat tW Annex I<wF< _ * *llt P~OIM a~ge 1

.9 | > J6~/¢' (w * q u vu~i1T)1~~~~~~~~~~~~m ^ t iW't too* t*OVSRMENT OF )NOAMINISTRY OF AGRICULTURE

(DIPARlINT O0 A6RCULTUaI COOPtQtATtN)KiIsbI bawi . Ro DtM.10Comments from 0O!

DoeaPleas@, refer to the copy of the Ifsle No, 4()/86-n3VIn

dated 9th Apil 9 endosed t Jointt 800etay shries IS thi4marin*r.pasring co-onto on the draft OjroJ e completion reporti esec ofV3 ?koelet" IZ t legi* Pi0j00 0 1Oseg

In fjam =6AMMPnassitdmt& Iun ihrisPo owe ha be ml for ath detale commts frm the totat

Goenmets, Vs av not yet ived ther eoaamta. Novewer, as faran a Us baet tr Id xlxda*y In r am OlllXo It Is ali"kM X oZX 8 =@ @w b ooem, tb *is stae e.tathe M orld Bank project pRowws". qitoe satisftorily hun USpirojt period with giventd oe

oedures a wer fto ll e bor BokWA% lde, Ite tokow f hLat tS crdit omIonent ae

pow show, the psical target I respect of m a niCe Si seenvisar to be acheved util1t red under the projectreh mao nu 50%. it VOrl Sonk Xfs agolUt t*ecomponent ws not utiSo&. Both the ftato oenrmto and this it=Ad conoerted efforts to Improve the credt utllti with respectto the lending progremsr neeting at the state level ad at rallevel ofte offiers of th c nationalised eaks wre conenedto laproe upo the banking authorities the "aessi*y of Isproving theleading peorane, o e bas eontnued with their stnd tat unloe'the rpamenat of a few loans santioned earlier Iproved, they were notin a position to tke up nw landings. this ale because thebanks did not havV'proper collection machinery at e fied level tromotivate the fiahermon In repament of loan.

8imutaneous li, tho State GWoemtet had their own lendingprograe for introduction of tho fishing vessels. Dring the aampeod h were sucoesful. both in lending a woll as manging therecoetries of loans m the beneficiaries. the Deparxment of Fisherieshad undertaken the pwogame of lending directly to the beneficiaries,not through nationalloed banks. te success of the Ple'teries DpartntVWa attributed to the deploymont of satisfactowy collection machineryat the field level.

In view of the above, it could be stated tba-t one of t;helessons learned from the World Bank projects wa that it would be notpracticable to entrust the lendg programe to the nationalised banksIn the cases of lending money to Sihermen for purchase of boats uhenthey lack In required motivating field personnel. Instead,a th credithas to be rooted directly through th S1tate Directorate of Fisherie,.

ye have no other oomments to make,Wifth

Yours sincerely,I S4t-

<, (-- -. ~ (LI, Irishauth

- 60 - Annex IPage 2

oia R of *onoxaer Boeon (n399paltn o °cn Ata° ffaif@3

FJIt. of 0 tane