nepal: community irrigation project · irrigation systems, of which 50% are estimated to be in need...

Project Number: TA 7229-NEP June 2010

Nepal: Community Irrigation Project Project Preparatory Technical Assistance

Main Report

Technical Assistance Consultant‘s Report

Prepared by

Finnish Consulting Group

Helsinki, Finland

in association with ANZDEC, ERMC & RITI

For Ministry of Local Development/DoLIDAR

Participating District Development Committees This consultant‘s report does not necessarily reflect the views of ADB or the Government concerned, and

ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project‘s design.

ADB TA-7229 NEP Community Irrigation Project Nepal Final Report:

i

Currency Equivalents

Currency Unit = Nepali Rupee = NRs. $1=NRs 73

{Rates at 15

th March 2010}

Fiscal Year

16th. July - 15th July

Measures and Equivalents

Distance 1 inch = 2.54cm = 254mm

1 foot (ft) = 30.4878 cm = 0.304878 metre (m) 1 m = 3.2808 feet (ft)

1 mile = 1.609 km 1 km = 0.6214 miles

Area

1 acre = 4048.6 m2 = 0.40486 hectare (ha) 2.470 acres = 1 ha

100 ha = 1 km2

1 ha=29.530 katha=590.61 Dhur =1.48 Bigha 1 katha=20 Dhur=0.05 Bigha=0.0339 ha

1 Ropani=(74x74) ft2 = 5476 ft2 =508.50 m2

Volumes 1 cubic foot (ft3) = 0.0283 cubic metre (m3)

1m3 = 35.315 ft3

1 acre inch = 102.794 m3 1 acre foot (AFT) = 1234 m3

1 million acre feet (MAF) = 1.234 billion cubic metres (Bm3)

Flows 1ft3 per second (cusec) = 28.34 litre per second (l/s) = 0.028 m3 per second (m3/s)

1 cusec/acre = 70 l/s per ha 1 l/s & ha = 8.64 mm/day

Weights

1 pound (lb) = 0.454 kg 1000kg = 1 metric ton

1 long ton = 1.0160 metric ton 1 short ton = 0.9072 metric ton

1 Mund = 37.324 kg 1 Dharni=2.393 kg


ii

Acronyms and Abbreviations

ADB Asian Development Bank

APP Agricultural Perspective Plan

CBO Community Based Organization

CIDA Canadian International Development Agency

CIP Community Irrigation Project

DADO District Agriculture Development Office ( and Officer)

DAG Disadvantaged Groups

DDC District Development Committee

DDF District Development Fund

DDR Due Diligence Report

DFID Department for International Development UK

DOI Department of Irrigation

DOLIDAR Department of Local Infrastructure Development and Agricultural Roads

DTO District Technical Office ( and Officer)

DWG Decentralization Working Group

EA Executing Agency

EIRR Economic Internal Rate of Return

EU European Union

FAC Feasibility Approval Committee

FMIS Farmer Managed Irrigation System(s)

FTC Field Team Coordinator

GBO Groundwater Branch Office (Officer)

GON Government of Nepal

IDD/IDSD Irrigation Development Division/ Irrigation Development Subdivision

IFAD International Fund for Agricultural Development

ILO International Labor Organization

IP Indigenous People

ISP Irrigation Subproject

LDO Local Development Officer

LIPD Local Infrastructure Development Policy 2004

LSGA Local Self Governance Act 1999

MFI Microfinance Institution

MLD Ministry of Local Development

MOAC Ministry of Agriculture and Cooperatives

MOI Ministry of Irrigation

MOU Memorandum of Understanding

NAVIN National Association of VDCs in Nepal

NCB National Competitive Bidding

NEA National Electricity Authority

NEFIN National Federation of Indigenous Nationalities

NFIWUAN National Federation of Irrigation Water Users Association Nepal

NGO Non-Governmental Organization

OPEC Organization of Petroleum Exporting Countries

O&M Operations and Maintenance

PAM Project Administration Manual

PCU Project Coordination Unit


iii

PIC Project Implementation Consultants

PICC Project Implementation Coordination Committee (District Level)

PPTA Project Preparatory Technical Assistance

PSC Project Steering Committee

QBS Quality Based Selection

QCBS Quality and Cost Based Selection

RMDC Rural Microfinance Development Center

RID Regional Irrigation Directorate (DOI)

SDC Swiss Development Cooperation

SCF Standard Conversion Factor

SWRF Shadow Wage Rate Factor

TST Technical Support Team

TWG Technical Working Group on Small FMIS Design

USAID United States Agency for International Development

VBFT Village Based Field Team

VBT Village Based Technician

VDC Village Development Committee

WUA Water Users Association

Glossary of Local Terms Ikhtiari Financial Authorization Ilaka Sub District

ADB TA-7229 NEP Community Irrigation Project Final Report: Contents

iv

Contents I. THE PROPOSAL 1 II. THE PROJECT 1

A. Rationale 1 B. Impact and Outcome 3 C. Outputs 3 D. Investment and Financing Plans 7 E. Implementation Arrangements 8

III. DUE DILIGENCE 12 A. Technical 12 B. Economic and Financial 12 C. Governance 12 D. Poverty and Social 12 E. Safeguards 13 F. Risks and Mitigating Measures 13

IV. ASSURANCES 14 APPENDICES 1. Design and Monitoring Framework 15 2. Summary Sector Assessment 19 3. Subsector Institutional Assessments 24 4. Project Administration Manual (Elements) 31 5. Development Coordination 47 6. Economic and Financial Analysis 49 7. Summary Poverty Reduction and Social Strategy 55 8. Gender Action Plan 58 9. Consultation & Participation Plan 60 10. Draft Environmental Assessment and Review Framework 65 11. Resettlement Framework 75 12. Indigenous Peoples Planning Framework 76 13. Capacity Development Plan 82 14. Subproject Selection Criteria and Implementation Process 86 APPENDICES In separate volumes

A. Small Irrigation Infrastructure B. Sustainable Agriculture Livelihoods C. Groundwater D. Micro Irrigation E. Micro Credit F. Economic Assessment G. Poverty and Social Assessment H. Environment Assessment I. Project Costs J. Financial Management Assessment K. Majhkot Subproject L. Buddhi Subproject M. Patana Subproject

ADB TA-7229 NEP Community Irrigation Project Final Report: Contents

v

N. Technical Drawings Majkot Subproject O. Technical Drawings Buddhi Subproject P. Technical Drawings Patana Subproject

ADB TA-7229 NEP Community Irrigation Project Nepal Final Report: Main Report

1

I. THE PROPOSAL

1. This Draft Final Report is based on the work of a team of consultants engaged through ADB TA-7229 NEP: Community Irrigation Project. The team of 15 national and international consultants worked intermittently from August to April 2010 to develop a project as proposed in this report.

II. THE PROJECT

A. Rationale

2. Food security in Nepal, is alarmingly low with 49% of children under 5 years old stunted, 25 % severely stunted, 13 % wasted and 3% severely wasted. Malnutrition is a problem.1 Small and marginal farmers cannot achieve the productivity potential of their agricultural livelihoods since they have no access or unreliable access to irrigation water and improved agricultural technology. The great majority of small farmers who do not have irrigation are the disadvantaged dalit, IP and Muslim populations who live and cultivate rainfed land in peripheral water scarce areas; steep slopes away from fertile and water rich valleys in the hills, and on the fringes of irrigation systems in the plains 3. The disadvantaged mostly live in food deficient conditions and malnutrition and high instances of stunting prevail amongst them. Low value livestock over grazes the natural forage. Children are put to work and stay away from school, and women and the youth are socially vulnerable. Scarcity of labor because of out migration for work is a factor that leads to neglect of irrigation infrastructure and keeps from cultivation for income. 4. Several small farmer managed irrigation systems, established decades ago through self help and cooperation, nurtured by their remoteness and kept operational because agriculture was the only possible source of livelihood for most, are now often in disrepair. This can in great measure be attributed to changing socio economic conditions, out- migration for employment, and eroded social cohesion. Water diversion or acquisition from surface streams, and conveyance through precipitous terrain requires frequent collective labor which is not always available any more. The performance of these systems suffers due to deferred maintenance and there is a need to modernize and make them less labor intensive to match with current socio economic conditions or to rehabilitate them when damaged due to natural disaster such as floods or landslides. 5. While Nepal has had public programs to support farmer managed irrigation systems, during the last ten years these have only been for surface systems larger than 25 ha in the hills and 200 ha in terai. While in conformance with the Local Self Governance Act and the government‘s decentralization policy it is no longer the mandate of DOI to manage small irrigation development (defined in the Irrigation Policy as less than 25 ha in the hills and 200 ha in tarai), the decentralized local bodies –District Development Committees (DDC) - do not yet have the necessary technical or financial resources for small irrigation development. Since DOI is the usual executing/implementing agency for ADB and World Bank in the irrigation sector, ongoing projects do not include small irrigation2.. 6. Agriculture in Nepal depends largely on the monsoon rains which occur from June to September, when 75% of annual rain falls. Regulated and controlled irrigation is critical to

1 National Demographic Health Survey, 2006 and Agriculture and Natural Resources Sector in Nepal Sector

Assistance Program Evaluation ADB, June 2009 2 The exceptions are a few non conventional irrigation technology interventions to which the irrigation policy along

with tube wells does not apply the small project rubric.


2

improved agriculture and agricultural productivity, particularly in the long dry season, but also during dry spells in the wet season that can reduce crop yields. 7. The total land area of Nepal is 14.7 million ha of which some 2.64 million ha are under cultivation. Irrigable land covers about 1.8 million ha, of which 1.4 million ha lies in the Terai. The remaining 0.4 million ha is in the river valleys, upland tars, and terraces in the hills and mountains. Approximately 1.1 million ha of the potentially irrigable area has irrigation infrastructure, divided between 0.9 million hectares of surface schemes, 0.2 million hectares with groundwater systems and about 13,000 ha of non-conventional irrigation. Of the command areas with infrastructure, typically 70% is actually irrigated. Only 38% of irrigated land has a year round water supply. About 75% of irrigated areas are under farmer managed irrigation systems, of which 50% are estimated to be in need of rehabilitation and upgrading, and the remaining 25% are agency managed3. 8. Irrigation is a key factor for improving agricultural production in Nepal, to increase the production of staples to meet the growing gap between production and the needs of the expanding population and for diversification and intensification of agriculture to help increase on-farm incomes and reduce rural poverty. Irrigation therefore has a key role to play in Nepal‘s poverty reduction strategy. For individuals and households, access to irrigation reduces the severity of rural poverty by i) increasing food production, ii) increasing on-farm employment, and iii) increasing incomes. Recent evaluations of irrigation and agriculture sector projects in Nepal by the ADB and the World Bank have found that irrigation projects have a higher success rate than straight agriculture or livestock projects and that irrigation projects were more likely to be sustainable because of the profits generated for beneficiaries. Furthermore, small scale farmers were generally willing to contribute, either in cash or kind, to both capital and O&M costs for irrigation, also because of the income generated by these projects4. 9. The objective of the project is to enhance farm incomes and reduce poverty through the development or improvement of small scale irrigation systems in selected terai and hill districts, with a focus on locations where the poor and disadvantaged social groups are a high proportion of the population and will particularly benefit from project interventions. Even though the project interventions will be limited to command areas of up to 25 ha. in the hills and 200 ha. in the terai, the cost involved may be as high as $1000 per ha. for schemes in the terai (and occasionally more) and up to $1500 per ha. for some more complex hill projects. The targeted communities are generally not able to provide resources on this scale for the improvement of their irrigation systems and these improvements are generally not likely to take place without external assistance. Public sector investment is therefore required, although in accordance with government policy, beneficiaries are required to contribute an amount generally equivalent to about 3 to 15% of the capital cost, with specific contributions for headworks, main canal, branch canals, and tertiary canals based on the average landholding size of the users. 10. Providing reliable year round irrigation can have a significant impact on the potential production of farm households. The yields of crops that are frequently grown without irrigation, such as wheat, oilseeds and pulses, usually respond very positively to irrigation at critical periods during the growth cycle, and during the monsoon season supplementary irrigation eliminates stress to plants during dry spells and increases yields. Improved and reliable irrigation leads to increased production. For low income households, increased production increases household food security and may increase cash incomes through the

3 Nepal National Committee of International Commission on Irrigation and Drainage, 2007

4 Sector Assistance Program Evaluation for the Agriculture and Natural Resources Sector in Nepal, Independent

Evaluation Department Asian Development Bank, June 2009; and Project Performance Assessment Report,Nepal Irrigation Sector Project, Independent Evaluation Group, World Bank June 2008.


3

sale of small quantities of crops grown specifically to meet market demand. The production increases alone are sufficient to justify the cost of the proposed investments in irrigation infrastructure although other, more general, social and economic benefits will also accrue to direct beneficiaries and to the populations living in the subproject areas. 11. The proposed project supports national priorities of improved governance and service delivery, inclusive development and targeted programs, fits in well within ADBs country partnership strategy and is consistent with other development partners in terms of poverty reduction, social inclusion, and governance objectives.

B. Impact and Outcome

12. The impact of the Community Irrigation Project will contribute to the increase in the food security and agricultural income of rural poor and disadvantaged groups in Nepal. CIP will contribute to Nepal's goal of increasing agriculture GDP per capita and the area under irrigation. 13. The outcome of the Community Irrigation Project in the project districts will be that irrigation infrastructure is maintained and improved agricultural skills are practiced by poor and disadvantaged farmers to enhance their agricultural livelihoods. With increased availability and efficient utilization of irrigation water, acquired irrigated agricultural skills, and access to required production inputs, food security in participating irrigation communities will rise by at least 15% by 2018, and crop yields will increase by at least 15% in subprojects within five years of construction. Through social mobilization and covenants made at the time of subproject selection WUAs will institute a non recurrent maintenance fund within 12 months of the construction, and collect and deposit between 2 to 5% of the capital cost of the ISP in a local MFI, a practice which the WUA are expected to continue.

C. Outputs

1. Small Irrigation Infrastructure

a. Rehabilitation of farmer managed gravity schemes

14. Rehabilitation and upgrading of existing schemes will be limited to improving the most critical structures and canal reaches and, in cases where water and suitable land is available, extending the system. 15. The main request of farmers‘ is often for the replacement of a temporary intake structures with permanent headworks, as frequent repairs and replacement of temporary brushwood or boulder weirs takes a good deal of time and energy. However, flash floods are common, sometimes moving large quantities of material and, in the hills, boulders, timber etc. Any structure in the river bed will be liable to damage. Generally a concrete or cement masonry rigid control structure will be avoided. Semi-permanent gabion weirs are more suitable as they have some flexibility and are easier to repair. Continued use of temporary structures will be preferable for difficult intake sites on steep rivers in the hills. 16. . Other works that will be considered include river bank and intake protection, escape structures, sediment traps, new canals and extensions to old canals, lining canals or piping water through areas of permeable soils or landslides zones, cross drainage works, drop structures, division structures and outlets. New canals will have an idle length of no more than 2km in difficult hill and mountain terrain where rock outcrops and cross drainage increase the expense of construction, and 4km where construction is relatively easy, which will mainly be in the terai.


4

b. Pond/tank systems in the hills and mountains

17. In the hills and mountains, piped reticulation systems and storage tanks for irrigation will be provided under CIP where a small stream or spring exists with a suitable command area of 10 ha or more within 3 km (idle length of pipeline). Smaller command areas will be considered provided they are farmed by more than 25 households. These schemes are only likely to be viable where farmer are interested in growing off-season vegetables. A minimum flow of 0.3 l/s/ha should be available for at least 8 month a year. At a minimum, storage tanks will be designed to store the scheme design flow over a 12 hour period. Farmers must be prepared to share the available water equally between all households with land in the command area at times of lowest flow.

c. Pumped irrigation Schemes

18. . In areas where electricity is available, river levels do not fluctuate excessively and total lifts are less than 40m, pumping from rivers is likely to be feasible. These schemes will only be developed where there is good community cohesion and will be no more than 100 ha in size, since running costs are high, farmer cooperation is essential and conveyance losses must be kept to a minimum (meaning that canals should be fairly short). Rather than providing one large pump, 2 or 3 smaller pumps will be provided so that if one goes wrong there is a spare. 19. The use of diesel pump sets is unlikely to be cost effective except for areas with very low lifts.

d. Shallow tubewells

20. .Much of the terai and some parts of the Siwalik valley region are underlain by deep or shallow aquifers that can be exploited for irrigation. Properly designed shallow tubewells to depths of about 40m or less, yield about 10-15 l/sec with modest drawdowns. Under CIP, it is proposed that the command area per well will be 4 ha, with one electric pump set per well. Water will be distributed to farms by means of flexible pipes to avoid the need for canals. CIP will fund the electricity connection and the tubewell, while the beneficiaries‘ contribution will be the electric motor and pump and the pump house. Because of the cost of establishing a connection to the electricity grid, STW clusters of less than 40 ha will not be considered if a new grid connection is required.

2. Sustainable Agricultural Livelihoods

a. Strengthened WUAs

21. Farmer managed irrigation systems in the hills are old, and so are a few in terai. They emerged through the initiative of irrigation communities with hard work often facing great odds. Irrespective of the current condition and performance of these small systems attributable to broader socio economic conditions, these traditional irrigation communities are still represented by a management body of all stakeholder subgroups. These informal groups, often also formalized are already sustainable and subproject proposals will build upon these groups, whose objectives are congruent with the project and will do so in a way that is sensitive to the members ownership of the group and, thus, avoid imposition of top down structures and obligations. In the past projects working with farmer managed systems have imposed farmers associations in disregard to what exists and these have not sustained and disrupted social assets of communities. Proposals to formalize these groups will be made as a means to better cope with socio economic changes, for the less labor intensive operations of the infrastructure and interaction with other agencies that can provide support. Proposals will also be made to meaningfully include women and other disadvantaged


5

groups. WUAs will need to be created anew for new schemes and may be significantly reconstituted and re-registered in others. Mechanisms will be collaboratively developed with the WUA to ensure the annual collection of a contribution to a non-recurrent maintenance fund; at least 5% of external material costs of the project financed civil works. Such a fund will serve as reserve for replacement of structures, equipment and pipes when needed.

b. Improved access to inputs, production skills and marketing

22. Individual support activities for each subproject will be prioritized and decided upon according to specific farmers needs. Agriculture support in the Project will primarily focus on training provided on demand, i.e. targeting the specific problems the beneficiaries face, and will have to be timely, i.e. when farmers encounter problems and need the advice. All training shall be practical (i.e. in the field), with demonstrations and farmer-led experimentation. Training of Trainers, Farmer Field Schools and short duration training modules will be used. 23. Since the multipurpose Village Based Field Teams (VBFT) that the Project proposes for support of the irrigation communities will generally not consist of agricultural specialists with higher education, they will need to be trained as trainers. Their training will be carried out at district level (either at district headquarters or in a particular scheme), covering the specific training topics farmers' groups in the different schemes within the district have ranked highest in priority. Resource persons for training of trainers may include CIP Irrigation Agronomists and/or external experts (from GOs such as DADOs, research, NGOs or other projects).

c. On farm Water Management and Micro Irrigation

24. On-farm water management training for efficient and productive use of irrigation water will be to support the use of scarce water most productively and allow benefitting more farmers or irrigating larger areas with the available water. Training in on-farm water management will include the use as appropriate of simple hose pipes or drip and sprinkler systems.

d. Micro credit

25. The project will help provide access to micro credit to small farmers, including women, for seasonal production inputs, and for capital costs of pumps, pipes and drip kits or sprinklers where beneficiaries will be required to contribute these but do not have their own resources. This will be done by supporting a segment of the training effort of a collaborating apex micro finance organization, RMDC, to build capacity of the apex organization‘s partner MFIs in the project districts. The project will not provide whole sale funds or a credit line to the apex organization for retailing to its partner MFIs. WUAs will open accounts to deposit non recurrent maintenance fund collections in partner MFIs. The project will match the first year‘s maintenance collection through a grant to the WUA which will also be deposited in the WUA account at the MFI. These WUA savings will accrue interest. This will establish a contact between the project beneficiaries as a potential new business line and a MFI. Individuals will have to qualify eligibility criteria to get loans.

e. Supplementary Support for Disadvantaged Groups

26. . Recognizing the special needs of disadvantaged groups (DAG) the project proposes supplementary training and support. These groups mostly consist of disadvantaged groups like Dalits, Indigenous People, female headed households, but will also include others regardless of their gender, ethnicity or religion, e.g. remote communities, project affected people, disaster and conflict affected. For the disadvantaged the project will


6

supplement its training and capacity building with: i) coaching for effective participation; and ii) linkages to third party programs that may be relevant to their needs.

3. Project Management and Implementation Support

a. Capacity building of the Executing Agency

27. Technical Working Group on Small Farmer Managed Irrigation Systems Design (TWG) will be formed to meet at least twice a year and review and add knowledge including for policy management on the issues of small irrigation development and design. TWG will comprise Department of Irrigation (DOI) and DoLIDAR engineers and design engineers from private engineering firms working in farmer managed irrigation system design. TWG will be chaired by the Deputy Director General Planning and Design Division of the Department of Irrigation and co-chaired by the Deputy Director General, Other Infrastructure DoLIDAR. In addition DoLIDAR will organize annual national level workshops on the subject. 28. Project Management and Project Performance Measurement and Project Benefit Monitoring and Evaluation functions in the Executing Agency will be strengthened for implementation, quality assurance and process monitoring of time bound decentralized public programs of infrastructure development. Executing Agency skills will be enhanced in contract management and in managing the performance of service providers. A Project Management and a Monitoring consultant will work closely with the Project Director to manage project implementation in the twelve project districts and monitor the pace and quality of the implementation process, establish a baseline and assess benefits and impacts.

b. Capacity Building of District Staff

29. District Technical Offices will be strengthened in small irrigation design review and construction supervision through incremental technical staff, an irrigation engineer and an overseer. District Technical Office Irrigation Engineers (District Irrigation Engineers) will be provided orientation training on appropriate small irrigation infrastructure design. Inclusion of respective DOI Irrigation Development Division or Sub-division in the Feasibility Approval Committee will provide the District Irrigation Engineers with the learning benefit of a peer review of the infrastructure design that they will supervise. Similarly the involvement, of respective Ground Water Branch Offices, as public engineers, in the execution of shallow tube well subprojects, will enhance the oversight skills of the District Technical Offices (DTOs) in ground water development and accompanying cluster electrification. This involvement of DOI units in aspects of project implementation will also provide the DTO a professional institutional linkage to the Regional Irrigation Directorates. 30. District Agriculture Development Officers of participating districts will receive specially designed training on ―Working in Partnership‖ at the Nepal Administrative Staff College.

c. Capacity building of Local Body Councils

31. DDC and VDC Councils in participating districts will be mentored in planning exercises by national and local civil society organizations, working within the framework of joint venture national project implementation consultants, to transparently target public resources and benefits at poor, vulnerable and disadvantaged groups.

d. Village Based Support Services

32. Starting from the selection of the ISP, its prefeasibility reconnaissance, feasibility and detailed design, and construction, to a two year period after construction, the following range


7

of institutional, technical and sustainable agricultural livelihoods services provided to small irrigation communities through dedicated mentoring and technical support teams (paragraphs 47, 48 and 49 below). 33. Infrastructural services will include i) preparing feasibilities and detailed designs in close consultation with irrigation farmers, ii) work scheduling and technical guidance during civil works executed by WUAs and iii) submission of running bills after completion of stages of construction to the Public Engineer. 34. . Institutional services will include i) supporting irrigation communities to transform existing functioning community organization, for compatible interaction with public programs, into formal WUA entities that are genuine and do not violate the functionality of the informal process; ii) supporting the WUA to institute, over and above the regular labour contributions for the O&M, an annual water user charge which is allowed to accumulate as savings in a local micro finance institution for future infrastructure rehabilitation. 35. Sustainable agricultural livelihoods support will include i) Farmer Field Schools for high value and staple crops, short –term training in irrigation agronomy skills and linkages to inputs and markets; ii) training targeted at women and disadvantaged groups including employable skill development in masonry and gabion tying; and iii) access to microfinance for production and equipment loans.

D. Investment and Financing Plans

36. The project is estimated to cost $34.9 million. The investment plan is summarized in Table 1.

Table 1: Project Investment Plan ($ million)

Item Amounta

A. Base Costb

1. Small Irrigation Infrastructure 20.60 2. Sustainable Agricultural Livelihoods 1.97 3. Project Management and Implementation Support 9.18 Subtotal (A) 31.75 B. Contingencies

c 3.09

C. Financing Charges During Implementation 0.00 Total (A+B+C) 34.84 a Includes taxes and duties of $4.41 million to be financed from government resources.

b In first quarter 2010 prices.

c Physical contingencies computed at 10% for civil works, project equipment and office support costs and 5% for

office equipment; and 0% for all other expenditure categories. Price contingencies computed at 1.5% on foreign exchange costs up to project start, then at 0.7% for the first year, 0% for the second year and 0.5% for subsequent years, and 8% on local currency costs up to project start, then at 6.5% for the first year, 5.5% for the second year and 5% for subsequent years; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

37. The government has requested a grant not exceeding $26.4 million from ADB‘s Special Funds resources to help finance the project.


8

Table 2: Financing Plan

Source Amount ($ million)

Share of Total (%)

Asian Development Bank 26.40 75.8% Beneficiaries 1.84 5.3% Government 6.60 18.9%

Total 34.84 100.00

E. Implementation Arrangements

38. Department of Local Infrastructure and Rural Roads (DOLIDAR) will be the Executing Agency for the Project. District Development Committees (DDCs) will be the implementing agencies and WUAs implementation partners. 39. . DOLIDAR will have overall responsibility for: (i) project management and implementation; (ii) reporting on both physical and financial progress; (iii) compliance with safe guard requirements; and (vi) coordination with project implementation District Development Committees.

1. Project Coordination Uffice

40. .DOLIDAR will establish a Project Coordination Unit in Kathmandu (PCU). The PCU will (i) prepare an overall implementation plan and annual project budget; (ii) coordinate with other departments and units as necessary; (iii) guide feasibility and technical studies and endorse reports including safeguard documents; (iv) ensure that selected ISPs are consistent with selection criteria in Appendix 14 (v) monitor and guide all planning and implementation activities project progress; (vi) monitor project progress and evaluate project benefits and social and environmental impacts; (vii) arrange necessary trainings for DTOs, other project engineers, and DADOs; (viii) manage procurement, consulting/NGO services and grant disbursement (ix) maintain financial accounts; and (x) prepare periodic implementation progress and financial reports. 41. The PCU will be headed by a Project Director appointed by DOLIDAR and acceptable to ADB. The Project Director will not be of a rank less than a Class 1 Gazetted officer. In addition to the Project Director, the EA will post a Deputy Project Director and 4 technical and support staff in the PCU.

a. PCU Support Unit

42. A national Project Management Specialist, reporting to the Project Director, will lead a project management support team in a PCU Support Unit consisting of: a Project Benefit Monitoring and Evaluation Specialist, a Social Development Specialist; a Senior Irrigation Engineer, a Senior Agriculturist, and on an intermittent basis financial, procurement and environment specialist services.

2. District

43. Local Development Officers (LDOs) will have overall responsibility for project implementation in their respective districts, including safeguards compliance. The project capital costs will be channeled through respective District Development Funds (DDF). Determination of project areas within the district with concentrations of poor and disadvantaged people will be the responsibility of the DDC. VDCs of target areas will be responsible to endorse schemes meeting project selection presented in public meetings with representation from all wards.


9

44. Civil works will be executed by the Public Engineer: the District Technical Office Chief assisted by an irrigation engineer (District Irrigation Engineer) funded from the GON contribution to the project. The DTO Accounts Officer, will supervise maintenance of Project accounts including district operational overheads and capital costs for civil works. 45. The Public Engineer will (i) review design; (ii) verify quantities and cost; (iii) check construction quality; (iv) take measurements and release payments to WUAs or a contractor if schemes exceed NRs 6 million, the GON ceiling for WUA execution, and also if a scheme exceeds the technical competence of the WUA.: 46. The District Agriculture Development Office will support the LDO in (i) monitoring the irrigated agriculture program and (ii) keeping liaison between the WUAs/ irrigation communities and the government/local bodies. The District Development Officer (DADO), will be assisted by an Agriculture Officer delegated by DADO to perform this function.

a. Village Based Field Teams

47. Irrigation communities and their WUAs will be mentored and supported in both infrastructure and agriculture development from subproject identification till two years after construction – during the feasibility, detailed design, construction and post construction process - by Village Based Field Teams (VBFTs) drawn from local NGO sub-contractors of the project implementation consultant‘s joint venture. Each VBFT will comprise 3 village based technicians (VBTs), two generalists, proficient in the language of the area and in social mobilization techniques, and a sub-overseer. At least one VBT in each VBFT will be a woman.

b. Technical Support Teams

48. Professional services in irrigation agronomy, hydro-geology, and feasibility and engineering design will be provided to WUAs and the irrigation community by project Technical Support Teams (TSTs) in close collaboration with respective VBFTs. These teams will be staffed with design engineers, hydro-geologists and irrigation agronomists and cover more than one district and respond flexibly to wherever project priorities will be. The senior irrigation engineer and a senior agriculture specialist will be responsible for training, thematic leadership and quality supervision.

c. Field Team Coordinator

49. In participating districts the LDOs and DTOs will be supported in implementation management by a Field Team Coordinator (FTC) to whom the VBFTs will report. Whilst reporting work plans and progress to the LDO through the DTO, the FTC will report directly to the Project Management Specialist at the PCU Support Unit, and coordinate all project activities, including scheduling the inputs of the TST in the district. Besides managing the VBFTs in the district the FTC will be responsible to (i) mentor local bodies for poverty targeted area and scheme selection, (ii) ensure quality of the social mobilization process, and participatory aspects of the detailed design; (iii) ensure WUAs are provided adequate support by the VBFT during construction activities; (iv) coordinate the delivery of irrigated agriculture capacity building training and support to irrigation communities in market and input access and (v) maintain close coordination with the DTO/District Irrigation Engineer, DADO and the GBO, on shallow tube well ISPs.

d. Feasibility Approval Committee

50. Each project district will constitute a District Feasibility Approval Committee (FAC). The LDO, on behalf of the District Council, and the DTO as public engineer will be essential


10

members. In the case of shallow tube well cluster schemes the Ground Water Branch Office Chief (GBOC) will be the public engineer. The feasibility will be prepared by the TSTs on behalf of the WUA and the VDC and submitted by the WUA to FAC. FAC will review the study and, if in order, approve it only after the Public Engineer has verified the design, quantities, and estimates in the field. Other members will include the District Agriculture Development Officer (DADO) and the respective Divisional or Sub-Divisional Engineer of the Department of Irrigation (DOI), so that the technical design can benefit from DOI review

e. Project Implementation Coordination Committee

51. Each project District will also constitute a Project Implementation Coordination Committee (PICC). The LDO will chair the committee. Members will include (i) the DTO; (ii) the GBO, for ground water subprojects in Tarai; (iii) an Agriculture Officer deputed by DADO; (iv) District Representative of the National Association of VDCs in Nepal (NAVIN); (v) District Representative of the National Federation of Irrigation Water Users Association Nepal (NFWUAN); (vi) District Representative of Nepal Federation of Indigenous Nationalities (NEFIN); and (vii) the project FTC. The District Irrigation Engineer will be the member secretary, and the FTC‗s will provide the secretariat.

f. Project Steering Committee

52. A Project Steering Committee (PSC) will be established under the chairmanship of the Secretary Ministry of Local Government, GON. Membership will include representatives of National Planning Commission and Ministry of Finance and Joint Secretaries from the ministries of local government, irrigation, and agriculture as well as the Director Generals of the departments of irrigation, agriculture and DOLIDAR. The Project Director will be the member secretary, and the PCU will act as secretariat. The PSC will meet whenever issues requiring resolution are submitted for consideration, but at least every six months to provide policy guidance and review project performance. 53. The implementation arrangements are summarized in Table 3 and described in detail in the PAM.


11

Table 3: Implementation Arrangements

Aspects Arrangements

Implementation period 16 July 2011 to 15 July 2018

Estimated project completion date

15 July 2018

Project management

(i) Oversight body Project Steering Committee Secretary Ministry of Local Government (chair) Joint Secretary National Planning Commission, Under-secretary Ministry of Finance, Joint Secretaries Ministries of Local government, Irrigation, and Agriculture and Director Generals Departments of Irrigation, Agriculture and DOLIDAR and Project Director CIP (members)

(ii) Executing agency Ministry of Local Development/DOLIDAR

(iii) Key implementing agencies

District Development Committees

(iv) Project implementation unit Kathmandu, 6 staff

Procurement National competitive bidding

unspecified goods and services

between $0.1 and $10 million

National competitive bidding

unspecified civil works contracts beyond the capacity of User Groups

NCB threshold up to $10 million

Shopping unspecified for goods and services

each not more than $30,000

Consulting services QCBS full technical proposal

Joint venture with NGO(s) and engineering firm(s) preferably a single contract for( i) project management and implementation and (ii) District and Community level Technical Support; otherwise 1 contract for task (i) and 2 for task (ii)

$8.55 million

Procurement Specialist Individual Consultant

15 person months (including 9 for recruitment of project implementation consultants

$100,000

Retroactive financing and/or advance contracting

Contract for the Procurement Specialist recruitment process of national project implementation consultants solicitation of EOI and RFP calling for a joint venture of NGOs and engineering firms

Disbursementa Type Minimum Ceiling

Source PPTA

54. The estimated cost for consulting services shown above includes $2.93 million provisional sum for surveyors, technicians, social mobilizers for whom a level of effort was estimated for cost purposes and subcontract services required but not included in the person months of consulting services which refer only to professional person months of input.


12

Project Civil works of small irrigation schemes up NR 6 million will mostly be taken up for construction by the communities themselves, unless the works are beyond their technical and/or labour capacity.

III. DUE DILIGENCE

A. Technical

55. Provision of inappropriate, complex structures requiring expensive materials can have severe implications for sustainability as repair may be beyond the means of the community. Even if well designed, these structures may fail due to poor construction quality, landslides, earth tremors or unusual floods. In contrast, structures built from local materials, although they may regularly suffer damage and require significant labor inputs for maintenance, can generally be repaired by communities themselves. The relative merits and ease of maintenance of structures, ‗modern‘ or ‗traditional‘, will be assessed on a case-by-case basis. For example, should a small reinforced concrete aqueduct requiring skilled labor be built to carry a canal over a drainage channel, or is a masonry flume that can be built by farmers more appropriate? The answer will depend, amongst other things, on the span, foundation conditions and construction skills available locally. A site specific analysis, taking the broader issues into account will be required in small scale irrigation design, but there are risks whichever choices are made.

B. Economic and Financial

56. The economic and financial analyses focused on the economic feasibility of the three sample subprojects. Quantified benefits were assessed by comparing present crop production with the production expected after the introduction of new or improved and more reliable irrigation water supply. The EIRRs estimated for the three subprojects are 23.5% for Majhkot, 21.6% for Buddhi and 25.4% for Patana. All are robust to significant changes in key cost and benefit variables. 57. The project will benefit up to 25,000 farm households at least 60% of whom will have landholdings of less than 1 ha. on the terai or 0.5 ha. in the hills and for whom the project will generate incremental on-farm annual income up to 150% of present incomes. The profitability of improved irrigated crop production will enhance farmers‘ ability to provide the resources needed to ensure the long term operation, maintenance and sustainability of the systems.

C. Governance

58.The proposal supports local governance, financial and administrative decentralization and adequate oversight of public development expenditure by i) transferring project‘s capital investment funds for infrastructure to the District; ii) enhancing transparency and accountability of public service delivery of small irrigation development by identification of subprojects in DDC identified Ilaka through VDC public meetings with citizen ward groups and irrigation communities; iii) ensuring quality and reducing pilferage in civil works through project engineers for the sole purpose of supporting the DTO‘s public engineer function: for field verification of quantities and costs prior to approval and the subsequent financial management and supervision of construction; iv) encouraging the WUA to financial discipline, responsibility, transparency and accountability through a final public audit involving the WUA members and other stake holders.

D. Poverty and Social

59. . Poor and disadvantaged groups include disadvantaged groups like women, Dalits, Muslims, and indigenous people, landless and marginal farmers, project affected persons,


13

women and female headed households, poor migrant households, remote communities and system tail enders. Benefits for them will include decreased O&M cost, and higher food production and income, proportional to their land size, skills and access. Cash crop cultivation benefits likely to accrue from pond irrigation and shallow tubewell for marginal land holders can be up to $200 per year and lift some groups out of poverty. Demand for labour in the area is expected to increase. 60. Impacts for women will depend completely on the household and subgroup they belong to. Their benefits will generally be slightly less than those for the males of their households because of an insubordinate position and lack of access. But women may benefit considerably if they have not participated in decision making, committees, capacity building, and skill training before. Female-headed households and migrant household women might not participate and benefit if they cannot manage the labour required in intensified agriculture. 61. There are financial risks for poor households‘ participating in commercial agriculture; increasing their dependence on irrigation system managers, traders, markets, financial institutions and outsiders in general. Proposals for training and support for women and the disadvantaged will help address these issues.

E. Safeguards

62. Based on the due diligence exercised during the PPTA through observations and consultations with beneficiaries and other stake holders during field visits to the 3 subprojects and reviews of proposed civil works the impacts on the environment are insignificant. The project will not select subprojects in National Parks and buffer zones. Each subproject will require a Due Diligence Report (DDR) after being screened against the standard Environment Assessment Checklist. The project will also not select subprojects needing involuntary resettlement and only work where community members will become primary beneficiaries of enhanced irrigation facility by contributing land for the project by contributing land for the project. However, each subproject will require a resettlement safeguard DDR, verifying and including documentation to the effect that the land was voluntarily donated without any pressure; and that no vulnerable household has donated more than 5% of their land holding, in which case livelihood restitution measures by the WUA will need to be specified in a resettlement plan. Project impacts on indigenous people will be positive or neutral, and in all aspects very similar to those of other disadvantaged groups, with whom they share most social exclusion and poverty concerns and issues, which are adequately dealt with in the proposed gender equity and social inclusion strategy. The project will not operate in forest areas of the highly marginal or endangered jungle dwelling indigenous people like Raji or Raute. Each subproject will be screened against the standard IP checklist. During project preparation information disclosure and consultations on environment, resettlement and the IP were held with the core subproject communities and in district and national stakeholder workshops.

F. Risks and Mitigating Measures

63. The project has no substantial risks, besides the political un-certainty and security risks that Nepal faces. The project is anticipated to see completion and beneficiary irrigation communities as implementing partners are not expected to let a broader societal conflict impact their collective productive endeavour. Once constructed, these productive infrastructures will last their 20 year economic life. The major issue is the long term sustainability of a one- time public investment made to a productive infrastructure of one community and not the other. This requires commitment from the recipient community to save regularly a portion of the benefits they will derive towards a fund that can be used in case this infrastructure is damaged or has to be replaced.


14

64. These risks and mitigating measures are summarized in Table 4

Table 4: Summary of Risks and Mitigating Measures

Risks Mitigating Measures

Failing political will to collect non recurrent maintenance funds.

Commitment through MOU between GON and the districts for the DDC to:

Bind WUAs to an annual charge collection as a condition for subproject funding.

establish monitoring mechanisms, and involve the VDC, ward citizen groups, and NIFUWAN to publically report WUA performance in this regard

Renewed infrastructure improvement by other projects and government programs

GON and districts undertake to channel any budgetary allocations to small irrigation through CIP.

Unfair and unethical procurement practices, pilferage of infrastructure capital funds, particularly through bogus user group contracts and acceptance of poor quality construction.

All implementation support services will be procured through one contract with a joint venture of national NGOs and engineering firms. Relieving the Public Engineer/ DTO of all other project related tasks, to be totally responsible and accountable for construction and associated safeguards.

IV. ASSURANCES

65. The government and the Ministry of Local Development have assured ADB that implementation of the project shall conform to all applicable ADB policies including those concerning anticorruption measures, safeguards, gender, procurement, consulting services, and disbursement as described in detail in the PAM and loan documents.

ADB TA-7229 NEP Community Irrigation Project Final Report: Core Appendices

Appendix 1: Design and Monitoring Framework

15

DESIGN AND MONITORING FRAMEWORK

Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting Mechanisms

Assumptions and Risks

a

Impact Assumptions Agricultural income of rural poor and socially excluded groups is increased

Agriculture GDP per capita increased by xx% by 2018

National and District Statistics

Continued government priority and appropriation toward agricultural sector

Risks Out migration of labor from rural areas to cities and international employment markets may lead to an acute shortage of farm labor

Area under year round irrigation increased from current 41% to xx% in 2018

ADB and development partner reports

Outcome Assumptions Poor, women, and other disadvantaged farmers in target communities intensify and diversity their agricultural practices toward higher value crops

Crop yields increase by at least 15% within five years of subproject construction

Completion Reports

Risks

Winter vegetable production increases by 8%

Project Performance Monitoring and Evaluation (PPM&E) quarterly reports

Improved irrigation coverage of at least 4,000 ha in the hills and mountains, and 11,300 ha in terai

Outputs Assumptions 1. Water users associations (WUAs) efficiently manage improved irrigation infrastructure

WUAs in subprojects (with at least one-third female and proportional representation of disadvantaged groups in membership and leadership) demonstrate their ability to plan, implement, and operate and maintain irrigation infrastructure

Project surveys

Risks

Construction costs increase disproportionately to agricultural market prices

Politicians discourage farmers from collecting maintenance funds

Donors and government functionaries may offer renewed infrastructure improvement assistance to project beneficiaries and undermine the self-sufficiency objective of the Project.

WUAs prepare and implement plans for equitable and efficient water distribution

At least 65% of WUAs continue to collect 2-5% of construction cost annually for major repairs

PPM&E Reports



16




a

2. Participating farmers apply improved agriculture practices and have access to micro-finance

75% of surveyed farmers achieve their targets in cropping intensity and yields

PPM&E Reports

Project survey

MFI survey and reports

Risks

Shortage of family farm labor due to out- migration affects agricultural productivity or ability of farmers to participate in programs

At least 50% of farmers (of which at least 50% are women) access loans from MFIs

3. Government

capacity to plan and coordinate small-scale irrigation projects is enhanced

District and village leaders select subprojects on schedule and in accordance with Project criteria

District Project Progress Reports

Risks

DDC elections will not be held and the all-party consensus mechanism becomes dysfunctional, leading to indecision

Public engineers (at least 3 women) in 12 districts approve appropriate designs for small irrigation infrastructure and effectively supervise construction

District-level Government officials involved in CIP meet monthly to coordinate subproject activities

The national-level Technical Advisory Group for Small Irrigation Development meets at least twice a year and finalizes Government policies and approaches for small irrigation development

PPM&E Reports



17




a

Subproject communities have access to dedicated village based institutional, technical and agricultural support for 2 years after scheme selection

Activities with Milestones Inputs

Output 1. Water users associations (WUAs) efficiently manage improved irrigation infrastructure

1.1 Irrigation infrastructure improvement

Batch 1 Subprojects

1.1.1 Selection by villages and reconnaissance (January –February 2012) 1.1.2 Feasibility studies/detailed design, WUA agreement, and tendering

(March 2012 to August 2012) 1.1.3 Construction (November 2012 to mid -April 2013)

Batch 2 Subprojects 1.1.4 Selection by villages and reconnaissance (January –February 2013) 1.1.5 Feasibility studies/detailed design, WUA agreement, and tendering

(March 2013 to August 2013) 1.1.6 Construction (November 2013 to mid April 2014)

Batch 3 Subprojects 1.1.7 Selection by villages and reconnaissance (January – February 2014) 1.1.8 Feasibility studies/detailed design, WUA agreement, and tendering

(March 2014 to August 2014) 1.1.9 Construction (November 2014 to mid April 2015)

Batch 4 Subprojects 1.1.10 Selection by villages and reconnaissance (January –February 2015) 1.1.11 Feasibility studies/detailed design, WUA agreement, and tendering

( March 2015 to August 2015) 1.1.12 Construction (November 2015 to mid April 2016) 1.2 Capacity building of WUAs in construction supervision (October 2012 –

February 2016) 1.3 Capacity building of WUAs to maintain irrigation infrastructure and

manage equitable water distribution and preparation of O&M and water management plans (March 2013 – January 2017)

1.4 Training support and associated field demonstrations to farmers in micro-irrigation application techniques to optimize productivity of water ( June 2012 – March 2017)

Output 2. Participating farmers apply improved agriculture practices and have access to micro-finance 2.1 Short-duration courses and associated field demonstrations to impart

irrigated crop husbandry skills to farmers (March 2013 – July 2017) 2.2.Establishment of Farmer Field Schools on each subproject operating for

1 year on production packages for cereal and high value crops (2012 – 2017)

2.3 Training of Trainers (district Level) for cereal crop seed selection; vegetable seedling production; nursery management; off season vegetable production; soil management; weed and pest control (2012-

ADB: $26.4M

Government $6.6M

Beneficiaries: $4.0M



18




a

2013) 2.4 Capacity building of local MFIs to service farmers with input loans.

January 2012 – December 2015 2.5 Provision of matching grants to WUAs who deposit within first year after

subproject construction, annual collections of non-recurrent maintenance funds in accounts at local MFI. April 2013 – February 2017

Output 3: Government capacity to plan and coordinate small-scale irrigation projects is enhanced

Project Implementation Capacity 3.1 Appoint a Project Director (by mid August 2010) 3.2 Recruit an individual procurement consultant as advance action (by

September 2010) 3.3 Recruitment of Project Implementation Consultants (PIC) Consortium

(national NGOs and domestic engineering firms Joint Venture) by June 2011

3.4 Project starts (July 16, 2011) 3.5 Appointment of District Irrigation Engineers in District Technical Offices

(by Mid September 2011) 3.6 Mobilization of PIC District Field Teams Coordinators (October 2011) 3.7 Mobilization of PIC Village Based Field Teams (October 2011) 3.8 Mobilization of PIC Field Support Teams for engineering design,

agronomy and hydro-geology (November 2011) 3.9 Project benefit monitoring and evaluation data collection and reports-

including social and environmental safeguards (February 2011 – July 2017)

Institutional Support 3.10 Orientation and refresher training for DTO and PIC engineers on

appropriate small irrigation infrastructure design. (January 2012 and December 2013)

3.11 Training for District Agriculture Development Officers on ―Working in Partnership‖ (February 2012 and December 2013)

3.12 District rapid assessments for irrigation potential in areas categorized as disadvantaged .( November 2011)

3.13 Mentoring of District Development Council to reach consensus on targeted project implementation areas (December 2011)

3.14 Project information dissemination in targeted implementation area wards (every December 2011 to 2014)

3.15 Mentoring of village leaders and ward citizen groups to nominate subprojects that meet selection criteria (January – February 2012 to 2015)

3.16 Mentoring and support – institutional, technical and agricultural -- of WUAs (January 2012 to July 2017)


Appendix 2: Summary Sector Assessment

19

Appendix 2 Summary Sector Assessment (Small irrigation)

1. Sector Performance, Problems and Opportunities

1. Agriculture in Nepal depends largely on the monsoon rains which occur from June to September, when 75% of annual rain falls. Regulated and controlled irrigation is critical to improved agriculture and agricultural productivity, particularly in the long dry season, but also during dry spells in the wet season that can reduce crop yields.

2. The total land area of Nepal is 14.7 million ha of which some 2.64 million ha are under cultivation. Irrigable land covers about 1.8 million ha, of which 1.4 million ha lies in the Terai. The remaining 0.4 million ha is in the river valleys, upland tars, and terraces in the hills and mountains. Approximately 1.1 million ha of the potentially irrigable area has irrigation infrastructure, divided between 0.9 million hectares of surface schemes, 0.2 million hectares with groundwater systems. Of the command areas with infrastructure, typically 70% is actually irrigated. Only 38% of irrigated land has a year round water supply. About 75% of irrigated areas are under farmer managed irrigation systems, of which 50% are estimated to be in need of rehabilitation and upgrading, and the remaining 25% are agency managed.

3. Small and medium-sized irrigation subsector accounts for the bulk of Nepal‘s irrigation infrastructure and serves the poorest communities. Irrigation therefore has a key role to play in Nepal‘s poverty reduction strategy. For individuals and households, access to irrigation reduces the severity of rural poverty by i) increasing food production and food security, ii) increasing on-farm employment, and iii) increasing incomes. Sub sector challenges regarding poverty include: (i) limited access of poor and marginal farmers to irrigation, (ii) lack of access to timely credit and other facilities (iii) limited income and assets to invest in irrigation.

4. The agricultural sector is the most important in the economy since it still provides employment for the majority of the population and some 80% of the population lives in rural areas. Increasing activity in the agriculture sector, which very largely means expanding the areas under reliable year round irrigation, has the potential to increase rural employment and incomes. Nevertheless, in many areas labour migration is now an important source of household income and may in some cases act as a disincentive to the improvement or diversification of on-farm production by i) providing greater income than is possible from small and very small farms, and ii) reducing labour available to farm households. On the other hand, growing demand from towns and cities has promoted an increase in more commercial farming of products such as vegetables in various seasons, horticulture, dairy and other livestock products.

5. To successfully improve the access of poor farmers to irrigation systems, many challenges must be overcome including institutional weaknesses and limited availability of technical skills in the districts, the limited ability of poor farmers to contribute to costs, the isolation of many communities leading to poor access to inputs and markets, and the constraints of the environment which include limited water resources (particularly on higher slopes where poorer farmers often live), floods, landslides and increasingly unreliable rainfall with more intense storms and longer dry spells, even during the monsoon.



20

6. Typically, new and rehabilitated schemes have only led to small productivity improvements and have had a modest impact on cropping intensity and diversification towards higher-value crops. Often operation and maintenance of systems is poor, particularly for new schemes. It is widely recognized that in order to derive the full benefit from irrigation investments, good design and construction quality must be combined with post construction support to WUAs and farmers for O&M, integrating improved agricultural and water management practices.

7. Even under irrigated conditions considerable yield gaps are still prevalent. Constraints to higher productivity are manifold: poor soil nutrient management; use of low yield old local crop varieties; inadequate seed selection practices; limited technical skills in crop-specific husbandry practices and limited access to public extension services. Where access to irrigation water is available, poor on-farm water management practices often yield low water productivity, and water losses greatly confine the potentially irrigable areas. As a rule agronomic practices have to be adapted under (improved) irrigation to fully exploit the benefits of improved water availability and to make most productive use of the additional water. Generally, (in particular poor and women) farmers require support in terms of training/capacity development or access to inputs/credits to implement required changes in production practices.

8. Agriculture is the only sector in Nepal that can currently increase incomes and produce a large number of jobs in rural areas; about 80% of the population's economic activities are directly dependent on the agricultural sector. Therefore, agriculture has been given priority in Nepal's poverty reduction strategy which recognizes that agricultural growth is essential for attaining broad-based growth and improving the livelihoods of a majority of Nepal's population. For improving agricultural production in Nepal, irrigation is a key factor. Irrigation allows for reducing production risks, for increasing yields of staples and cash crops, and for diversification and intensification. Once irrigation is available, farmers are generally less reluctant to invest in improved production practices (and required inputs) since the climatic risk of crop failure due to water deficiency is reduced/alleviated. Thus, irrigation can contribute to increased food security/stability and to the generation of additional income from agricultural production, hereby reducing poverty and improving livelihoods particularly for the poorest segments of Nepal's population.

2. Government’s Sector Strategy

9. The government‘s sector strategy comprises of a range of plans covering the entire gamut of agricultural and rural development issues under its 20 year Agricultural Perspective Plan (APP). The Ninth Plan viewed development in terms of economic liberalization, increased investment, and poverty reduction. The Tenth Plan identified the main challenge as the need to break out of the vicious poverty cycle. APP thus puts emphasis on the following five aspects: (i) controlled year-round irrigation; (ii) easing fertilizer supply; (iii) expanded provisions of modern inputs and need-based research and extension; (iv) linking potential production pockets with markets through rural agricultural roads; and (v) expansion of rural electrification.

10. Thus, an integrated approach combining irrigation development with agricultural support and market development as foreseen in the APP strategy is key for successful investments targeting improved agricultural production in view of attaining increased food security and alleviating poverty in Nepal. Since a single agency is hardly able to



21

offer the whole range of services required by farmers, the Nepal Agricultural Extension Strategy 2007 foresees that public sector extension services will work hand in hand with the private sector, NGOs and CBOs.

11. Providing reliable year round irrigation can have a significant impact on the potential production of farm households. The yields of crops that are frequently grown without irrigation, such as wheat, oilseeds and pulses, usually respond very positively to irrigation at critical periods during the growth cycle, and during the monsoon season supplementary irrigation eliminates stress to plants during dry spells and increases yields. Improved and reliable irrigation leads to increased production. For low income households, increased production increases household food security and may increase cash incomes through the sale of small quantities of crops grown specifically to meet market demand. The production increases alone are sufficient to justify the cost of the proposed investments in irrigation infrastructure although other, more general, social and economic benefits will also accrue to direct beneficiaries and to the populations living in the subproject areas.

12. Nepal has an Irrigation Policy approved by the Cabinet of His Majesty‘s Government in 2003. The objectives of the policy are broadly i) to aim for year round irrigation, ii) develop institutional capability of water users for sustainable management of existing systems, and iii) to enhance the knowledge, skill and institutional capability of technical human resources, WUAs and NGOs to work for irrigation development. A liability and responsibility section of the policy clearly states that the development of major, large and medium projects shall be the responsibility of the Department of Irrigation. It is in the same section that reference is made to the ―decentralization doctrine‖ according to which the development of small projects shall be managed by water users associations and local bodies. ―Small project/system‖ in the definitions preamble of the policy, is described as less than 25 hectare in the hills and less than 200 hectares in the tarai and inner tarai5. Local body is specified as Village Development Committee/ Metropolitan / District Development Committee. Contrary to its policy no concrete measures were taken by the Department of Irrigation in the past decade to collaborate with local bodies so that they could undertake small-scale irrigation development. As a consequence small scale irrigation, on which a large number of Nepali‘s subsist, has received minimal public support.

13. The Local Infrastructure Development Policy 2004 (LIDP) visualizes capacity for the local bodies, primarily the district, in 7 infrastructural areas, including irrigation. Till local district services and the district‘s own ―Technical Sections‖ visualized in the local self Governance Act are not actualized, the District Technical Officers (DTO) on deputation from the Ministry of Local Development/Department of Local Infrastructure and Rural Roads (DoLIDAR) will work in the sector related sections. At district level, the institutional capacity to ensure satisfactory irrigation project planning and development is weak. District level officials including the DTOs have little experience in irrigation development. Small irrigation schemes and structures are not necessarily easier to design and implement than larger ones. Considerable support will be needed at district levels to provide and improve the institutional capacity and skills needed for the successful development of irrigation systems and improved agricultural productivity.

5 The Department of Irrigation does not, however, absolve itself from implementing and operating ground

water and non conventional irrigation schemes of less than 25 ha.



22

3. ADB Sector Experience and Assistance Program

14. Nepal‘s principal international partners for irrigation development have been the ADB and the World Bank. The ADB has approved nine credits totalling $160 million and the World Bank, since 1970s 13 credits totalling $355 million for irrigation specific projects. In addition they have also provided credit for small-scale irrigation as components of integrated rural development projects. Other international agencies, including IFAD, EU, ILO and UNDP supplemented these efforts. Main bilateral agencies include the Kuwait Fund, CIDA, Japan, USAID and several European countries. Ongoing projects are ADB‘s Community Managed Irrigated Agriculture Sector Project and the World Banks Integrated Water Resource Management Project.

15. In summary the lessons learned are that meaningful participation requires substantial capacity building; integrating agriculture and water management interventions increases benefits; sustainability of O&M of irrigation schemes depends crucially upon associated financial arrangements. A more comprehensive approach is required to maximize benefits from improved agricultural water management. Water is only on input among many; institution development and capacity building are equally important as are agricultural inputs and marketing. Non-governmental organizations are generally better at working with farmers to increase the productivity of small-scale farmer managed irrigation systems. Unlike large scale public systems, in small scale schemes farmers proved willing to contribute as needed in cash or kind for both capital expenditure and for group-managed operations and management. Institutional risks to the development effectiveness of small-scale farmer-managed schemes are modest. However, physical risks are high - mainly from landslides, earth quakes and floods.

16. ADB will continue to assist GON in improving the policy and institutional framework in the irrigation sub sector, while providing vital infrastructure to develop and rehabilitate irrigation schemes and strengthen core institutions. Irrigation projects will (i) empower line agencies to play a facilitative role, (ii) incorporate participatory subproject planning to empower water users associations and communities, (iii) provide complementary support for agricultural extension, (iv) plan for effective ad sustainable on-farm water management and operation and maintenance. The services of the private sector and NGOs will continue to be harnessed as appropriate to strengthen water users associations and prove agricultural livelihood development services.

17. ADB will support three irrigation projects that will help GON reach its target of expanding irrigable area. The Community Managed Irrigated Agriculture Sector Project, which is being implemented, supports the development and rehabilitation of medium sized, farmer managed surface water irrigation systems. The Community Irrigation Project will support the development of small surface irrigation water systems and ground water through shallow tube wells in poor communities. This project will foster the devolution of the management of small irrigation systems form the central Government to local bodies in line with the countries decentralization policies. Building on the experience of the Irrigation Management Transfer Project completed in 2004 and the ongoing Community Managed Irrigated Agriculture Sector Project, ADB will work with GON to prepare another irrigation project that covers the rehabilitation and management transfer of medium sized irrigation schemes.


Appendix 3: Subsector Institutional Assessment

23

Problem Tree Analysis

Small and marginal farmers cannot achieve potential productivity in agricultural livelihood

Unreliable or no access to irrigation water and improved

agricultural techniques

Deferred maintenance and/or damaged irrigation

infrastructure

No cash resources to build new or damaged irrigation

infrastructure

Inadequate access to agricultural productivity

knowledge, skills and inputs

Eroded social

cohesion

Natural Disaster

Out -migration of labour

No collective savings

No public programs for

small irrigation

Inadequate sources for production

loans

Agencies not structured to

work with poor, marginal and

remote farmers

Department of Irrigation Policy restrictions

Local Bodies do not have financial and technical resources for small irrigation

development

Food deficit for people and livestock

Low income

Low value livestock Malnutrition

Adverse impact of over-grazing

Child labour

Low affordability of goods and services

Social vulnerability

Out migration

Decreased availability of farm

labour

Neglected irrigation

infrastructure

Low value crops

No access to

education

Unreliable or no

irrigation



24


A. Introduction

1. This assessment and emerging recommendations are based on deliberations and discussion amongst key stake holders of decentralization of small scale irrigation in Nepal. The decentralization working group for small- scale irrigation (DWG), constituted by the Department of Irrigation (DOI) under the Community Irrigation Project has worked since August 2009 to seek consensus for the right mix of institutional arrangements by deliberating on the tasks and process necessary to support Nepal‘s small scale farmer managed irrigation systems improve, expand and sustain as livelihood systems. The DWG and meetings of the PPTA have been an occasion to draw the attention of several ministries and departments and civil society organizations to engage in seeking an appropriate implementation modality for the development of small scale irrigation in Nepal. These have included the Ministry of Irrigation, the National Planning Commission, the Ministry of Finance, the Ministry of Agriculture, the Ministry of Local Development, the Department of Irrigation, the Department of Local Infrastructure Development and Agricultural Roads, the Department of Agriculture, the Association of District Development Committees of Nepal (ADDCN), and the National Association of Village Development Committees in Nepal (NAVIN).

2. DWG in its discussions has highlighted the skill mix and organizational requirements to achieve; (i) demand driven and transparent scheme selection (ii) the types of surveys, analysis, technical design and participation necessary for feasibility studies and the levels of approval; (iii) the realization of an implementation process that beneficially involves the WUA in the execution of works and material procurement, ensures quality and enables timely fund releases to the WUA and simultaneously ensures government overview of the quality of civil works funded thorough public money; and (iv) support to the WUA and irrigation community to increase agricultural productivity and sustained maintenance of irrigation infrastructure.

B. Scheme Selection

1. Targeted Poverty Focus

3. There is consensus that a publically financed small irrigation development program should focus on poor communities. Poor communities and disadvantaged groups (DAG) are often not in a position to improve, repair or extend their existing irrigation system and are unable on their own to tap any water sources that may be available in the vicinity and could feasibly convert their rain-fed farming to irrigated land.

4. Historical tendencies amongst stakeholders to exclude the poor and disadvantaged -Dalits, IP and religious minorities - need to be overcome through safeguards built into scheme selection and planning.

5. While selecting districts for project implementation, poverty indicators such as the Human Development Index should be used. For scheme selection small land-holdings, marginal land, and presence of disadvantaged ethnic, caste and religious groups are often adequate indicators for poverty. Prevalence of stunting, as a sign of depravation, and degree of food security, can supplement these indicators for a more targeted approach to poverty reduction. The DDCs will agree on poverty and disadvantaged areas, ilaka, in which the project should operate.

2. Decentralized, Transparent and Participatory Process

6. The selection of schemes for financing must be transparent, fair, participatory and in accordance with the selection criteria. The need for the scheme must be clearly conceived by the beneficiaries and they must be in a position to articulate what impact it will have if implemented. Safeguards will be devised to circumvent ―elite capture‖, political patronage,



25

and any chances that propped up ―false‖ communities are used as fronts for construction contracts to benefit particular individuals or groups.

7. The planning, decision making and resource allocation process will be the prerogative of the DDCs and VDCs. Formal and informal Water Users Associations (WUAs) will submit expressions of interest on behalf of their respective irrigation communities to the VDC, in public meetings organized by the project.

3. Local Approval of Feasibility Studies

8. The feasibility approval process has to be located within participating local bodies and not within the central executing agency.

C. Appropriate Organizational Requirements and Arrangements

9. The process highlighted above will require appropriate organizational arrangements and skills, particularly in targeted poverty interventions, consensual decision making in local bodies, participative scheme identification, close and steady interaction with irrigation communities, which are not readily available within government departments. The government departments do not have the human resources to practically undertake these intensive and interactive processes. These tasks will have to be farmed out to special purpose organization put together for the Project through NGOs and consulting services. However, governmental ownership, stewardship, responsibility, and overview will be required for all activities.

1. Devolution and Decentralization of Planning and Resource Allocation

10. Funds for a decentralized program of small scale farmer managed irrigation (FMIS) development are appropriately channeled through the District Development Fund (DDF) mechanism. A plausible approach would be a performance based funding system set up through a memorandum of understanding between the Project and the District.

11. Planning, resource allocation, and decision making for small scheme selection will be decentralized and devolved to the District, Village and WUA or irrigation community level. CIP will follow a three -stage poverty targeted, decentralized and participatory selection process.

12. Participating Districts will need to be identified on the basis of poverty and a low Human Development Index (HDI) score, to achieve a mix between mountain, hill and tarai districts, preferably in a cluster for ease of implementation. While selecting Districts overlap with other small irrigation programs will be avoided. DDCs of participating Districts are logical first level forums to accept a national level project and endorse the operational modality. In the absence of councils the ―all party mechanism‖ will serve as a surrogate. With appropriate support and facilitation the DDCs are expected to transparently identify VDC clusters, Ilaka or sub districts, that match poverty related selection criteria such as low HDI scores, and appear on the Disadvantaged Groups (DAG) map of the District but also have small-scale irrigation and agriculture development potential. Irrigation potential will be assessed through a rapid assessment of land and water resources.

13. Within VDCs, representation from all 9 wards can be arranged. DDC will disseminate prior information on targeted small scale irrigation development in the settlements of selected VDCs. With facilitation and support, community proposals that match selection criteria can be identified and preliminarily selected by the broader village community through consensus.

14. In the scheme selection approach proposed above, conditional subproject approval is inherent since the two local government forums DDC and VDC have both, deliberated, directed and endorsed the selection. However, unless the technical feasibility, which comprises the material and labour quantities and cost estimates for the physical



26

infrastructure, is not verified and approved by a Public Engineer i.e. a gazetted government engineer, public money cannot be spent.

2. Centrality of the Public Engineer

15. Construction will be carried out by the WUA coordinated by project field teams, social mobilizers and technical staff. Top supervision will be provided by a Public Engineer who will verify accuracy, quality and quantity of work through measurements on site. The Public Engineer will regulate the mobilization advance; and payment of running bills to the WUA, through DDF, on the basis of measured work completed. Finally the Public Engineer will issue a Completion Certificate to the WUA. Just as a project cannot be allocated money until the technical feasibility, which comprises the material and labour quantities and cost estimates for the physical infrastructure, is verified and approved by a Public Engineer i.e. a gazetted government engineer, public money cannot be paid for work completed until the quality and quantity is verified by a Public engineer.

3. Project Implementing Agency

The implementing agencies for the project will be the Districts, supported by service providers financed by the Project and not any central line agency working within or with the District. Irrigation Communities through their WUA will be implementation partners of the Project.

Figure 1: Devolution and Decentralization of Planning, & Resource Allocation

16. A catalyst will be required to mentor all local government tiers – the DDC, the VDC and finally the community on social and institutional aspects. This task will be appropriately handled by local NGOs working with a rigorous and tightly controlled approach as subcontractors of a joint venture of national NGOs and engineering firms recruited centrally as project implementation consultants under one contract for all the districts of the project.

17. Project implementation consultants will support the Central Project Coordination Unit located within the Executing Agency and ensure uniform quality of the required processes in the Districts and in subprojects.

18. The ultimate responsibility for the Project in the District will lie with the DDC.

4. Integrated One-window Support to Irrigation Communities

19. It seems appropriate that only one party remains the constant factor for interaction and coordination with the irrigation communities and the project and continue from the initial contact during identification and selection into the feasibility, implementation and post-

District Development

Fund

District Development Committee

Social & Institutional

Mentor/ NGO

Village Development Committee

WUA/Irrigation Community



27

implementation phases. In small-scale FMIS development all four phases require close consultation and collaboration with the community.

20. The required technical people will need to work closely with social mobilizers and may be difficult to coordinate if independent. Interaction with irrigation communities in the districts has to be through field teams comprising community mobilizers and sub engineers, guided and supported by irrigation engineers and irrigated agriculture specialists.

D. Policy Reviews

1. Irrigation Policy

21. Nepal has an Irrigation Policy approved by the Cabinet of His Majesty‘s Government in 2003. The objectives of the policy are broadly i) to aim for year round irrigation, ii) develop institutional capability of water users for sustainable management of existing systems, and iii) to enhance the knowledge, skill and institutional capability of technical human resources, WUAs and NGOs to work for irrigation development.

22. A liability and responsibility section of the policy clearly states that the development of major, large and medium projects shall be the responsibility of the Department of Irrigation. It is in the same section that reference is made to the ―decentralization doctrine‖ according to which the development of small projects shall be managed by water users associations and local bodies. The section further elaborates that training programs shall be conducted, presumably as part of the policy by the Department of Irrigation, to upgrade the capacity of local bodies for the development of the irrigation sector.

23. ―Small project/system‖ in the definitions preamble of the policy, is described as less than 25 hectare in the hills and less than 200 hectares in the tarai and inner tarai6. Local body is specified as Village Development Committee/ Metropolitan / District Development Committee.

24. In this vein the policy purports to strengthen the capability of local bodies and users associations for effective participation in planning, construction and management of medium and small irrigation. Interestingly the policy actively seeks involvement of non-governmental organization in the development of new technology in such projects.

25. There are no references to other Ministries or government agencies in the policy to which irrigation related functions are to be devolved. Local bodies it appears are seen as ―autonomous‖. The only references to other agencies are those that enhance the process of irrigation development such as coordinating with the Water and Energy Commission to develop and manage those water reservoirs which are overwhelmingly for irrigation. Similarly, information for irrigation development is to be leveraged from Department of Hydrology and Metrology. An exception to this is the Agriculture Department to which irrigation offices at all levels are to be ―functionally tied up‖ and urged to affiliate with Agriculture programs implemented in command areas with year round irrigation. The linkage with the agriculture department remains characteristically distant despite this prescription.

26. Though in keeping with its policy, no concrete measures have been taken by the Department of Irrigation so far to collaborate with local bodies so that they can undertake small-scale irrigation development. As a consequence small scale irrigation, on which a large number of Nepali‘s subsist, has received minimal public support.

6 The Department of Irrigation does not, however, absolve itself from implementing and operating ground water

and non conventional irrigation schemes of less than 25 ha.



28

2. Local Infrastructure Development Policy

27. The Local Infrastructure Development Policy 2004 (LIDP) has been occasioned, according to the preamble of the policy, since ―some of the existing sector policies and strategies have not been able to cover programs relating to local infrastructure development to be operated thorough the local bodies.‖ From this it seems that if the sectors had devolved their powers, of scheme identification, operations and maintenance program definition and resource allocation to the local bodies, a local infrastructure policy may not have been necessary.

28. The subsidiarity principal is relevant to local infrastructure for planning, resource allocation, decentralized decision- making and certainly for operations and maintenance (for which sector agencies receive public allocations that may go unspent). However, subsidiarity is immaterial for technical design, engineering services and construction supervision. If central sector line agencies can be made to provide services as required by local bodies, it is possible for local bodies to operate with minimal technical capacity- just enough to provide a source for technical review, quality control, informed decision making and perform the public engineering function.

29. LIPD visualizes capacity for the local bodies, primarily the district, in 7 infrastructural areas. Till local district services visualized in the local self Governance Act are not actualized, the District Technical Officers (DTO) on deputation from the Ministry of Local Development/Department of Local Infrastructure and Rural Roads (DoLIDAR) will work in the sector related sections. ―The DTO shall be removed as and when the Technical Section is formed‖.7

30. LIPD provides the local bodies the option of receiving technical services for carrying out local infrastructure from external sources as well: external from DTOs now, and external from the districts own Technical Sections once these are established.

E. Technical Capacity for Irrigation Development in the Districts

31. While it did not take long for both DOI and DOLIDAR to quickly agree that they did not readily have the types of human resources needed for social mobilization and mentoring over relatively long periods with small farmer communities and local bodies for participatory decision and interactive scheme designs, they were both sure in their Public Engineer role. Discussions in the DWG explored four possibilities to address the technical capacity issue for implementing small irrigation development in the Districts. Technical capacity is primarily defined here, as the availability of qualified staff to fulfill the functions of the Public Engineer as described above.

Option 1

32. The first option is to designate the District Technical Offices as the Public Engineer for CIP. These are currently staffed by engineers (DTOs) provided by DoLIDAR.

33. As civil engineers, DTOs are technically capable to work in irrigation but do not have irrigation experience. Neither do they have access to institutional technical guidance specific to irrigation. Their parent department DoLIDAR has primarily accumulated experience in rural roads and other infrastructure. Being responsible for several activities in the districts, the DTOs cannot readily take on additional work even when, as is being proposed for CIP, design and support for civil work construction and on- sight guidance and supervision will be provided by a consultant/NGO.

34. To be able to assume the responsibility of the Public Engineer for this Project the District Technical Offices need additional human resources to review and verify the

7 LIDP makes specific mention of a review of the organization and further operations of the DoLIDAR once

infrastructure is taken over by the local bodies themselves.



29

proposed design, assess estimated quantities and costs, supervise construction, measure quantity and quality, and accordingly release payments.

35. There are suggestions that DOI provide the needed staff on deputation. DOI may have qualified and experienced staff but is reluctant to depute its staff to work under the supervision of the DTO, who is from a different central line agency. DOI has its own line of reporting, which both the staff and the institution find unnecessary to abandon.

Option 2

36. The second option is to use Project funds to recruit engineers from the market to work under the DTO. Proponents of sustainability will expect the District to regularize these positions as part of their own structure once the project is over. However, it appears doubtful that the Districts will put up their own resources after the Project to retain these positions. Similarly, it is doubtful that they will receive central government grants for this purpose.

37. Whether or not the positions get retained post-project, this option appears most efficient and effective from the perspective of Project implementation. It will put dedicated human resources at the disposal of the District to meet the project‘s infrastructural objectives. It will also pragmatically supplement the prevailing functioning modality for providing technical (public engineering) services in the District through the DTO

Option 3

38. A third option is to encourage DOI to accept the task of Public Engineer and execute CIP through the IDDs/IDSDs working within their own line hierarchy. The Divisional or Sub-divisional officer will receive financial authorizations (ikhtiari) from the District (not the DTO) for individual schemes selected and approved by the District, and submit accounts to the District for internal audit.

39. The advantage of this arrangement will be the utilization of existing sector specific capacity available within the public sector.

40. In this arrangement the inherent risk is that IDD/IDSD may give a higher priority to projects and activities that are on DOI‘s annual program or to programs for which the DOI is the Executing Agency. This risk can be mitigated if DOI is also the Executing Agency of the Project.

41. While this option can lead to small irrigation development in the districts within the framework of a project, it will not contribute to install permanent irrigation sector or integrated water resources management capacity within the district.

Option 4

42. A fourth option, if DOI is to accept the task of Public Engineer for small irrigation, will be to establish a central pool for small irrigation from which required human resources can be posted to work with the District.

43. For this option to materialize during CIP, DOI would need to be the executing agency of the Project.

44. It is clear that the Irrigation Policy, 2003, places the responsibility of small scale irrigation development on water user associations and local bodies. The Policy further elaborates that measures will be undertaken by the Department of Irrigation, to upgrade the capacity of local bodies for the development of the irrigation sector. The Department of Irrigation does not, however, absolve itself from implementing and operating ground water and non conventional irrigation schemes of less than 25 ha.

45. The Local Infrastructure Development Policy, 2004 (LIDP), drafted with reference to the Local Self Governance Act 1999 (LSGA) expects DoLIDAR to provide District Technical Officers



30

for supporting Districts in 7 specified infrastructure areas, but does not categorize the provision of these services as DoLIDAR‘s exclusive ―jurisdiction‖. Other agencies are not excluded from supporting the local bodies in this regard. (see below)

46. LIPD, and the LSGA on which it is based, provides local bodies the option of receiving technical services (including public engineering services) for carrying out local infrastructure from external sources as well.

47. The LSGA specifies the Ministry of Local Development as the conduit through which local bodies will communicate with the Government of Nepal but explicitly states that local bodies may have direct contact with the other Ministries for budgets and programs (LSGA Section 240).

48. The LSGA specifies that local bodies will receive block grants from MLD without specification. Grants that local bodies might receive from sector ministries will be conditional for specified programs, which though sector funded, will be adopted as local body programs. The LSGA also makes sector ministries liable to provide local bodies the required technical capacity support to implement these programs (LSGA Section 243).

49. The availability of a central pool of public irrigation engineers for service in the districts will not only provide capacity for small irrigation development within the framework of Projects like CIP, it can also lead to the installation of permanent irrigation sector or integrated water resources management capacity within the district.

F. Conclusion on Public Engineer

50. Reviewing all four options lead the DWG to the following conclusion.

51. Option 1 which proposes the DTO as the Public Engineer for small irrigation without providing the District Technical Office with additional sector specific resources and expertise is difficult to exercise because of the broad scope of work and volume of duties that the DTO must perform.

52. Option 3 which proposes IDD/IDSD as the Public Engineer is not readily realizable since DOI is not mandated to implement small irrigation projects in adherence to the existing Irrigation Policy. This was further reinforced when, after internal deliberations in DOI, funds earmarked for small irrigation by GON in the current financial year were transferred to DoLIDAR. Option 4 which proposes a central pool of Irrigation Engineers to serve in the Districts during CIP is not plausible for the same reasons.

53. While DTOs and DoLIDAR are considered transient arrangements by the LIDP for providing technical resources to the local bodies till such time that Districts have their own technical staff and sections, they are in the interim the only decentralized operating arrangement available. Using the DTO as Public Engineer, multi lateral and bilateral infrastructure projects that have taken a decentralized approach, including several ADB projects, have increasingly worked with DoLIDAR as the Executing Agency.

54. In the context of the Community Irrigation Project, Option 2 which proposes the District Technical Office as the Public Engineer with technical support and sector expertise provided by an irrigation engineer (individual consultant) funded by the Project promises to be a reliable and effective option.

ADB TA-7229 NEP Community Irrigation Project

Final Report: Core Appendices

31

3. PROJECT ADMINISTRATION MANUAL (ELEMENTS)


Appendix 4. Project Administration Manual (Elements)

32

II B. Overall Project Implementation Plan

(1/2)

Tasks

1.1

1.1.1

1.1.2

1.1.3

1.1.4

1.1.5

1.1.6

1.1.7

1.1.8

1.1.9

1.1.10

1.1.11

1.1.12

1.2

1.3

1.4

2.1

2.2

2.3

2.4

2.5

1

Feasibility studies /detailed design, WUA agreement and tendering (Mar-Aug 2012)

Selection by villages and reconnaissance (Jan-Feb 2012)

Output 2. Participating farmers apply improved agriculture practices and have access

to micro finance


Batch 4 Subprojects : January 2015- April 2016

Construction (Nov 2013 to mid-April 2014)

Selection by villages and reconnaissance ( Jan-Feb 2014)

Construction (Nov 2014 to mid- April 2015)

Feasibility studies /detailed design, WUA agreement and tendering (Mar- Aug 2014)

Batch 3 Subprojects : January 2014- April 2015



Establishment of Farmer Field Schools on each Subproject on cereal and high value

crops

Provision of matching grants to WUAs who deposit their first annual non-recurrent

maintenance fund contribution in their account at a local MFI

Training of Trainers (district level) for cereal crop seed selection; vegetable seedling

production; nursery management; off season vegetable production; soil management;

weed and pest control (2012 -2013)

Short duration courses and demonstrations on irrigated crop husbandry practices

Capacity Building of local MFIs to service farmers with input loans. January 2012-

December 2015

Feasibility studies /detailed design, WUA agreement and tendering (Mar-April 2015)

Capacity Building of WUAs in construction supervision (Oct 2012 - Feb 2016)

Feasibility studies /detailed design, WUA agreement and tendering (Mar-Aug 2013)

2014 2017

Batch 2 Subprojects : January 2013 -April 2014

6

Output 1. WUAs efficiently manage improved irrigation infrastructure .

A. DMF

2012

Batch 1 Subprojects : January 2012 -April 2013


Irrigation Infrastructure Improvement

2016

4 7

2015

5

20112010

2

2013

3

Capacity Building of WUAs to maintain irrigation infrastructure and manage equitable

water distribution and preparation of O&M and water management plans

Training and associated field demonstrations to farmers in micro irrigation application

techniques


Appendix 4. Project Administration Manual (Elements)

33

(2/2)

Tasks

3.10

3.11

3.12

3.13

3.14

3.15

3.16

1

2

3

4

5

6

7

8

9

10

Mentoring of village leaders and ward citizen groups to nominate subprojects that

meet selection criteria (January -February 2012 to 2015)

Recruitment of Individual Procurement Consultant - advance action (Sep 2010 )

Mentoring and support- institutional, technical and agricultural - of WUAs (January

2012 to July 2017)

Project Effectiveness (March 1, 2011)

Project Start (July 16, 2011)

Mobilization of PIC Village Based Field Teams (October 2011)

B. Management Activities

Project information dissemination in targeted implementation area wards (annually -

December 2011- 2014)

Output 3. Government capacity to plan and coordinate small-scale irrigation projects is

enhanced

District Rapid Assessments for irrigation potential in areas (ilakas) categorized as

disadvantaged (November 2011)

Mentoring of District Development Council to reach consensus on targeted project

implementation areas (December 2011)

Orientation and refresher training for DTO and PIC engineers on appropriate small

irrigation infrastructure design (January 2012 and December 2013)

Training for District Agriculture Development Officers on Working in Partnership (

February 2012 and December 2013)

Recruitment of Project Implementation Consultants Consortium (PIC) (by June 2011)

2010 2011 2012 2013

Appointment of Project Director (by mid August 2010)

Appointment of District Irrigation Engineers at DTOs (by mid September 2011)

Mobilization of PIC District Field Team Coordinators (October 2011)

Mobilization of PIC Technical Support Teams (November 2011)

Project Benefit Monitoring & Evaluation data collection and reports(Feb 2011- Jul

2017)

2014 2015 2016 2017

5 6 71 2 3 4

PAM- III C. PROJECT ORGANIZATION STRUCTURE ADB TA-7229 NEP Community Irrigation Project

Final Report: Core Appendices

34

Technical Support Teams

PCU Support Unit

Project Management Specialist/Team Leader

PBM&E Specialist

Social Development Specialist

Senior Irrigation Engineer

Senior Agriculture Specialist

Design Engineers

Hydro-geologists

Irrigation Agronomists

Surveyors

Ministry of Local Development DoLIDAR

Project Coordination Unit

Project Director DISTRICT DEVELOPMENT

COMMITTEE

Local Development Officer (LDO)

District Technical

Office

District Irrigation Engineer

Field Teams

Coordinator (FTC)

Village Based Field Team

2 x Village Based Technicians (VBT) 1 x Sub-overseer 1 x Sub -overseer

Irrigation Schemes (ISPs)/WUAs

District Agriculture

Development Office

Authorization to

Groundwater Branch Office for STW ISPs wat

Irrigation Section

Project Steering

Committee

Microfinance Institutions

supported by RMDC

Feasibility Approval

Committee (District)

Project Implementation

Coordination Committee


Appendix 4: Project Administration Manual (Elements)

35

PAM IV –A. Cost Estimates by Expenditure Category

Item

(NRs. million)

($ million)

Foreign Local Total Foreign Local Total % of Total Base Cost

Taxes and

Duties Exchange Currency Cost Exchange Currency Cost

A. Investment Costs

1 Civil Works 867.2 289.1 1,156.3 11.9 4.0 15.8 49.9% 2.1

2 Mechanical & Electrical Equipment 116.1 215.6 331.6 1.6 3.0 4.5 14.3% 0.8

3 Office Equipment 2.4 4.4 6.8 0.0 0.1 0.1 0.3% 0.0

4 Vehicles 1.1 0.9 2.0 0.0 0.0 0.0 0.1% 0.0

5 Training 186.9 - 186.9 2.6 - 2.6 8.1% 0.3

6 Monitoring & Evaluation 4.0 - 4.0 0.1 - 0.1 0.2% 0.0

7 Consultants/NGOs/ Engineering Surveys 500.2 - 500.2 6.9 - 6.9 21.6% 0.9

8 Project Staff 45.7 - 45.7 0.6 - 0.6 2.0% 0.0

9 Office & Support Costs 59.0 25.3 84.3 0.8 0.3 1.2 3.6% 0.2

Subtotal (A) 1,782.6 535.2 2,317.9 24.4 7.3 31.8 100.0% 4.4

Total Base Cost 1,782.6 535.2 2,317.9 24.4 7.3 31.8 100.0% 4.4

C. Contingencies

1 Physical 104.3 53.2 157.6 1.4 0.7 2.2 6.8% 2 Price 510.6 160.5 671.1 0.7 0.2 0.9 3.0%

Subtotal (C) 2,397.5 749.0 3,146.5 26.6 8.3 34.8 109.8%

D. Financing Charges During Implementation 1 Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.0%

2 Commitment Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.0%

Subtotal (D) 0.00 0.00 0.00 0.00 0.00 0.00 0.0%

Total Project Cost (A+B+C+D) 2,397.5 749.0 3,146.5 26.6 8.3 34.8 109.8% 4.4



36

PAM- IV – C. Detailed Cost Estimates by Financier

($ million)

The Government Asian Development

Bank Beneficiaries

Amount

% of Cost

Category Amount

% of Cost

Category Amount

% of Cost

Category

Total Cost

Item A. Investment Costs

1 Civil Works 3.25 19.9%

11.41 69.9%

1.65 10.1%

16.32

2 Mechanical & Electrical Equipment 1.05 22.4%

3.63 77.6%

-

4.68

3 Office Equipment 0.02 17.8%

0.08 82.2%

-

0.09

4 Vehicles 0.01 35.0%

0.02 65.0%

-

0.03

5 Training 0.34 13.0%

2.29 87.0%

-

2.63

6 Monitoring & Evaluation 0.01 13.0%

0.05 87.0%

-

0.06

7 Consultants/NGO‘s/Engineering Surveys 0.92 13.0%

6.13 87.0%

-

7.04

8 Project Staff 0.64 100.0%

- -

-

0.64

9 Office & Support Costs 0.20 17.2%

0.99 82.8%

-

1.19

Subtotal (A) 6.44 19.7%

24.54 75.1%

1.71 5.2%

32.69

B. Recurrent Costs

Subtotal (B) 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00

Total Base Cost 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00

C. Contingencies 0.16 7.4% 1.87 86.6% 0.13 6.0% 2.16

D. Financing Charges During Implementation 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00

Total Project Cost (A+B+C+D) 6.60 18.9% 26.40 75.8% 1.84 5.3% 34.85

% Total Project Cost

18.9%

75.8%

5.3%

100%



37

A. PAM-IV- D. Detailed Cost Estimates by Outputs/Components

Item

($ million)

Total Cost

Small Irrigation Infrastructure

Sustainable Agricultural Livelihoods

Project Management and Implementation

Support

Amount

% of Cost Category Amount

% of Cost

Category Amount

% of Cost

Category

A. Investment Costs a

1 Civil Works

15.84 15.84 100.0% - 0.0% - 0.0%

2 Mechanical & Electrical Equipment 4.54 4.54 100.0% - - - 3 Office Equipment 0.09 - 0.0% - - 0.09 100.0%

4 Vehicles 0.03 - - - - 0.03 100.0%

5 Training 2.56 0.22 8.4% 1.97 77.0% 0.37 14.5%

6 Monitoring & Evaluation 0.05 - - - - 0.05 100.0%

7 Consultants/NGOs/ Engineering surveys 6.85 - - - - 6.85 100.0%

8 Project Staff 0.63 - - - - 0.63 100.0%

9 Office & Support Costs 1.15 - - - - 1.15 100.0%

Subtotal (A) 31.75 20.60 64.9% 1.97 6.2% 9.18 28.9%

B. Recurrent Costs

Subtotal (B) 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0%

Total Base Cost 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0%

C. Contingencies

1 Physical b 2.16 2.04 94.4% - - 0.12 5.6%

2 Price c 0.94 0.63 66.9% 0.05 5.6% 0.26 27.5%

Subtotal (C) 3.10 2.67 86.1% 0.05 1.6% 0.38 12.3%

D. Financing Charges During Implementatione

1 Interest During Implementation 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0%

2 Commitment Charges 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0%

Subtotal (D) 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0%

Total Project Cost (A+B+C+D) 34.85 23.26 66.8% 2.02 5.8% 9.56 27.4%



38

a In first quarter 2010 prices.

b

Physical contingencies computed at 10% for civil works, project equipment and office support costs and 5% for office equipment; and 0% for all other expenditure categories.

c Price contingencies computed at 1.5% on foreign exchange costs up to project start, then at 0.7% for the first year, 0% for the second year and 0.5% for subsequent years, and 8% on local currency costs up to project start, then at 6.5% for the first year, 5.5% for the second year and 5% for subsequent years; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.



39

B. PAM- IV-E. Detailed Costs Estimates by Year

($ million)

Total Costb Item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

A. Investment Costs

1 Civil Works 15.84 0.25 3.90 3.90 3.90 3.90 -

2 Mechanical & Electrical Equipment 4.54 0.01 1.13 1.13 1.13 1.13 -

3 Office Equipment 0.09 0.09 - - - - -

4 Vehicles 0.03 0.03 - - - - -

5 Training 2.56 0.41 0.60 0.63 0.41 0.36 0.14

6 Monitoring & Evaluation 0.05 - 0.01 0.01 0.01 0.01 -

7 Consultants/NGOs/ Engineering Surveys 6.85 0.72 1.39 1.39 1.39 1.33 0.65

8 Project Staff 0.63 0.04 0.14 0.14 0.14 0.14 0.01

9 Office & Support Costs 1.15 0.13 0.23 0.23 0.23 0.23 0.13

Total BASELINE COSTS 31.75 1.67 7.40 7.43 7.21 7.10 0.93

Subtotal (A) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Base Cost 0.00 0.00 0.00 0.00 0.00 0.00 0.00

C. Contingencies 3.10 0.07 0.70 0.72 0.76 0.79 0.05

D. Financing Charges During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Project Cost (A+B+C+D) 34.85 1.7 8.1 8.2 8.0 7.9 1.0

% Total Project Cost 100% 4.9% 23.2% 23.5% 23.0% 22.7% 2.9%



PAM-IV G Fund Flow Diagram

40

ADB (1)

Project coordination unit (PCU)

(2) Imprest Account (USD) NRB

FCGO (ii)

MOF (A) (i)

MoLD (B)

DDC (DDF) (E) (v)

WUA (viii)

Replenishment

DoLIDAR (C)

Beneficiaries' Contribution

DTCO (iii)

GON Central Account (NRs) NRB (3)

DTO- operating account (F) (vii)

PCU (D) (iv)

Budget Authority (A-F) Fund flow (i-viii) Replenishment (1-2) Reimbursement (2-3) Reporting

Reporting

Fund Flow Withdrawal Application request

Eligible expenditure transfer from

Imprest account for reimbursement

DADO -operating

account (F1) (vi)

ADB TA-7229 NEP Community Irrigation Project Nepal Draft Final Report: Core Appendices


41

PAM-VI- C. Procurement Plan Procurement under the project will be carried out following ADB‘s Procurement Guidelines 2007, as amended from time to time. The NCB procedures will be conducted in accordance with the Local Bodies Financial Administration Regulations 2007, subject to the clarification of the rules that have been agreed upon with ADB for the purpose of ADB‘s Procurement Guidelines.

A. Civil Works and Goods

Most civil works under CIP will be awarded to WUAs through agreement between the DTO and WUA and not be tendered. Any civil works costing more than US$82,191, the threshold for community procurement of civil works in Nepal will be awarded following national competitive bidding (NCB) procedures acceptable to ADB, as they consist of small value works scattered in different districts and as national contracting capacity to successfully undertake such works exists. All tendered works contracts will be handled by DTOs of respective Districts; except those relating to ground water schemes which will be dealt by the respective GBOC. PCU and ADB will review at least the first three contracts awarded beyond the financial threshold for community contracts or technical capacity of the WUA, and the first three contracts for STW boring and electrification agreements with NEA in each participating district.

B. Goods

Equipment and materials less than US$30,000 will be procured through the shopping mode.

C. Consulting Services

Consulting services are required to assist the GON implement the Community Irrigation Project by setting up and staffing (i) a Project Coordination Unit Support Unit, with project management and social and environmental skills, in DOLIDAR; (ii) Technical Support Teams with engineering design and irrigated agronomy expertise providing field level services; and (iii) Village Based Field Teams and Field Team Coordination Offices in the implementing Districts focusing on social mobilization, institutional, technical and agricultural capacity building of poor and disadvantaged small irrigation farmers, and the capacity of local bodies to target the poor. Outline terms of reference are given in PAM VI D below. To ensure close coordination and integration at the irrigation community level between engineering, social mobilization, and agriculture support, consultant services are proposed as one package to be recruited through a joint venture of qualified and experienced national NGOs and national engineering firms selected on the basis of QCBS. This will require a full technical proposal and prior ADB review. Person months of consulting services refer only to professional person months of input. Estimated cost includes a US$ 2.93 million provisional sum for surveyors, technicians, social mobilizers for whom a level of effort was estimated for cost purposes and subcontract services required but not included in the person months of consulting services. Project Coordination Unit Support Unit: The project will provide 168 months of consultants for the PCU Support Unit: 66 person months Project Management Specialist/ Team Leader; 33 months Project Benefit & Monitoring Specialist; 42 person months Social Development Specialist; 12 months Environment Specialist and 15 months Procurement Specialist.

Technical Support Teams: The project will require 792 months of national consultants for Technical Support Teams in engineering design and irrigation agronomy. These will comprise



42

Senior Irrigation Engineer (116 months); Design Engineers (376 months): Hydro-geologists (94 months); Senior Agricultural Specialist (53 months); and Irrigation Agronomists (153 months).

Village Based Field Teams and Field Team Coordination Offices: 12 national consultants, (one for 60 months, in each implementation district, a total of 720 months) will support project coordination and capacity building of local bodies and WUAs at the district level.



43

PROCUREMENT PLAN

A. Project Information

Country Project name Amount in us$ Executing agency

Nepal Federal Democratic Republic of Nepal Community irrigation project Grant: $26.4 million; Ministry of Local government through Department of Local Infrastructure and Rural Roads(DoLIDAR)

B. Procurement Thresholds, Goods and Related Services, Works and Supply and Installation

Procurement Method To Be Used for Contract Valued at

International Competitive Bidding (ICB), goods and services civil works National Competitive Bidding (NCB) goods and services civil works Shopping for goods Shopping for works Community Participation

More than $500,000 More than $1,000,000 Equivalent to $500,000 or less Equivalent to $1,000,000 or less Equivalent to $30,000 or less Equivalent to $100,000 or less Equivalent to NRs 6,000,000

C. Procurement Thresholds, Consultant Services

Procurement Method To Be Used For Contract Valued At

Quality- and Cost-Based Selection (QCBS)

Any amount

D. List Of Contract Packages in Excess of $100,000, Goods, Works, and Consulting Services

Ref Contract Description Estimated Cost

Procurement Method

Expected Date of

Advertisement

Prior review

y/n Comments

1 Consulting services for Project Management and Implementation

$8.55 million

*

QCBS/QBS Full technical proposal

To be posted in ADBBO (October 2010)

Y Joint venture with NGO(s) and engineering firm(s) preferably a single contract

for( i) project management and implementation and (ii) District and Community level Technical Support; otherwise 1 contract for task (i) and 2 for task (ii)

E. Goods and works contracts < $1 Million and Consulting Services Contracts < $100,000

2 Civil Works Contract to WUAs

TBD CP through WUAs

TBD N Multiple

3 Small-scale Civil Works TBD NCB/Shopping TBD N Multiple 4 Materials for Civil Works TBD NCB/Shopping TBD N Multiple 5 Procurement of Office

Equipment TBD NCB/Shopping TBD N Multiple Goods

contracts

Procurement of Office Supply

TBD NCB/Shopping TBD N Multiple Goods contract



44

Contract for advance action Procurement Specialist

less than $100,000

Individual Consultant Selection

October 2010 retro-financing N

Required for Project implementation

consultant recruitment process

* Estimated cost includes US$ 2.93 million provisional sum for surveyors, technicians, social mobilizers for whom a

level of effort was estimated for cost purposes and subcontract services required but not included in the person months of consulting services which refer only to professional person months of input PAM VI D. Consultant’s Terms of Reference Outline Terms of Reference (for key personnel)

Project Management Specialist/Team Leader

i) Assist PCU in the day-to-day management of the project by developing implementation approaches, procedures, and guidelines for key Project activities ii) Assist PCU to coordinate with participating Districts the implementation of infrastructure construction batches, including detail design approvals, mobilization advances to WUA and the tendering for civil works contractors on schedule. (iii) Assist PCU in preparing the detailed Project implementation schedule, work plan, and various Project management systems and procedures, annual evaluation of accomplishment vis-à-vis work plans, and annual revised work plans; (iv) Coordinate the infrastructural, agricultural and social institutional activities of project and the work of the senior irrigation engineer, the senior agriculture specialist and the Field Teams Coordinators (FTCs) in the Districts and prepare annual plans. (vi) Direct, supervise, and monitor the activities of the project team including NGO subcontractors for VBFT in the Districts. Project Benefit Monitoring & Evaluation Specialist

(i) Review Monitoring and Evaluation Program (M&E) procedures and systems from previous donor- aided projects to ascertain the strengths and weaknesses of those systems. (ii) Develop an appropriate M&E strategy and plan, including input, progress, output and impact indicators and prepare a computerised M&E system within the PCU. (iii) Develop an appropriate mechanism and procedures for monitoring and evaluation of all field activities and preparation of indicators for assessment of performance; (iv) After the design is implemented and data collection is initiated, make regular visits to all levels of the Project to discuss the M&E procedures with project staff and consultants. (v) Assess the quality and completeness of data being gathered, and meet with stakeholders, including water-users and communities, to discuss the need for M&E and how the community, water users and farmers benefit by helping to collect and report this information. (vi) Prepare terms of reference for the baseline, midterm, and final Impact Evaluation Surveys and Reports. (vii) Work closely with the Project Director and quickly respond to the EAs information needs.

Social Development Specialist (i) Take the lead on the gender and social development elements of the project, and social safeguards; (ii) Assist the district selection review and finalization process (iii) coordinate and



45

support the mobilization of 12 district teams through orientation, training workshops, and information material production (iv) monitor the project VDC/Ilaka selection and planning process, propose amendments if necessary, and support the process in 12 districts through backstopping (v) monitor the subproject selection process and support the process in 12 districts through backstopping and monitoring

Senior Irrigation Engineer / Training

(i) Oversee the Technical Support Team and coordinate all engineering aspects of irrigation development under CIP; (ii) ensure appropriate design and construction standards are met; (iii) identify training needs, prepare a training plan and organizing training courses and workshops for all project personnel; (iv) Provide technical advice and review designs and costs, ensuring maximum cost-effectiveness for all works

Senior Agriculture Specialist/Agriculture Training Coordinator

(i) Responsible for planning and coordination, monitoring and supervision of agricultural activities of CIP; (ii) provide technical guidance and capacity building of CIP team; ( iii) establish and strengthen linkages with related organizations;(iv) responsible for allocation of resources and approval of contracts with external resource persons and organizations.

Design Engineers

(i) Responsible for overseeing the technical aspects of irrigation scheme identification, selection, feasibility studies, design and construction; (ii) Oversee site surveys of selected irrigation schemes; (iii) , Prepare detailed designs and costs. Ensure that farmers understand the final designs and agree with them.

Irrigation Agronomists (i) Work in two districts to guide and supervise agricultural support activities in the field; (ii) assist District Field Teams Coordinators in coordinating field activities; (iii) play key role in reconnaissance, feasibility assessments (cropping patterns, water requirements) and planning of agricultural support activities for individual schemes and at district level; (iv) liaises with DADO and agriculturally active NGOs at district level;(v) resource person for trainings (mainly ToTs); (vi) facilitate linkages of farmers with traders, market centers and other value chain actors; (vii) analysis and evaluation of monitoring results.

Field Team Coordinator

(i) Mentor local bodies for poverty targeted area and scheme selection; (ii) ensure quality of the social mobilization process, and participatory aspects of the detailed design; (iii) ensure WUAs are provided adequate support by the VBFT during construction activities; (iv) coordinate the delivery of irrigated agriculture capacity building training and support to irrigation communities in market and input access; establish and strengthen linkages with related organizations at district level and (v) maintain close coordination with the DTO/CIP Engineer, DADO and the GBO, on shallow tubewell ISPs.

ADB TA-7229 NEP Community Irrigation Project Nepal Final Report: Core Appendices

Appendix 5: Development Coordination

46

APPENDIX 5: DEVELOPMENT COORDINATION A. Major Development Partners: Strategic Foci and Key Activities 1. ADB has been one of the main development partners for the agriculture and natural resources sector in Nepal. The recent major external assistance projects for the sector, especially for the irrigation subsector, are summarized in the following table.

Major Development Partners

Sectors and Themes

Development Partner Project Name Duration

Amount (mil USD)

AN (I&D) ADB Emergency Flood Damage Rehabilitation Project

2009-(2012) 26*

AN (I&D) ADB Second Irrigation Sector Project 1996-2003 25

AN (I&D) ADB / CIDA Community Ground Water Irrigation Sector Project

1999-2007 10.2 + 3.4*

AN (I&D) ADB / OPEC Fund

Community Managed Irrigated Agriculture Sector Project

2006-(2012) 20 + 7

AN World Bank Integrated Water Resources Management Project

2007-(2013) 6.5 *

AN (I&D) World Bank Nepal Irrigation Sector Project 1997-2004 103

AN (I&D) SDC / DFID Local Infrastructure for Livelihood Improvement Project

2006-2009 CHF 1.7*

AN (I&D) European Union

Irrigation Development Program 1997-2005 9.4 *

*

Grant. AN = Agriculture and Natural Resources, ADB = Asian Development Bank, CIDA = Canadian International Development Agency, DFID = Department for International Development of the United Kingdom, I&D = irrigation and drainage, SDC = Swiss Agency for Development and Cooperation, Source: PPTA Report, CPS, and other documents

B. Institutional Arrangements and Processes for Development Coordination

2. Donors meet regularly at the Nepal Donors' Group, thematic donor subgroups and working groups to exchange views on key policy issues, review best practices, share lessons learned, and coordinate ongoing and future programs. Such coordination has contributed to exploring complementarities, avoiding duplicates, and then to more effective external assistance. ADB, the Department for International Development of the United Kingdom (DFID), and the World Bank, the three biggest development partners by the size of their portfolios, undertook joint stakeholder consultations in 2008-2009 in preparation of their respective country strategies. The synchronized preparation of new strategies of ADB, DFID, and the World Bank allowed close and effective coordination. ADB will continue to coordinate closely with its development partners in annual country programming. 3. Sustainable food security is one of ADB's focal areas in the agriculture and natural resources sector, and the Country Strategy Partnership (CSP) regards irrigation as one of the strategic activities. Among bi-lateral and multi-lateral aid agencies, the World Bank and SDC include irrigation in their strategies or major activities. EU, World Food Programme, DFID, and


Appendix 5: Development Coordination

47

USAID support food security and agriculture projects or programs as one of their strategic interventions. C. Achievements and Issues 4. Small- to medium-scale irrigation projects have widely been introduced in rural areas of Nepal, which have contributed to the improvement of agricultural productivities and income through irrigation in these areas. Foreign assistance has been a key driver of this improvement. 5. In the course of the project design, ADB has directly partnered with SDC through PPTA co-financing, and the Project design has benefited from SDC's experience and lessons learned in their projects, such as the Local Infrastructure for Livelihood Improvement Project which is currently under phase two of implementation. ADB meets regularly with the World Bank to share experiences and avoid duplication, and agree on areas of joint policy dialogue with the Government. D. Summary and Recommendations 6. Nepal has a strong mechanism in place for coordination among development partners. Partnership with SDC and the World Bank on irrigation, and with other development partners working in the agriculture and natural resources sector, will continue through regular meetings, policy dialogue, and participation in stakeholder workshops for respective projects and programs.


Appendix 6: Economic and Financial Analysis

48

6. ECONOMIC AND FINANCIAL ANALYSIS

A. Objective

1. The economic and financial analyses were carried out for three sample subprojects which will be the first to be implemented under the Community Irrigation Project. The analyses focused on the economic feasibility of the individual subprojects. The benefits of the subprojects are principally the gains in agricultural outputs that will occur with the introduction of new or more reliable irrigation. The investment and on-going maintenance costs of the subprojects are weighed against these benefits. The three subprojects are typical in many respects and provide a good indication for the feasibility of subprojects to be included as the project is implemented.

B. Approach and Major Assumptions

2. To assess the expected quantifiable benefits of the subprojects, with and without scenarios were compared. The without project situations were assumed to be a continuation of the present production situation in each subproject command area. With project situations are based on an assessment in each case of the likely impact of improved and reliable irrigation on farmers‘ cropping decisions and production achievements. All subprojects are assumed to have an economic life of 15 years. Quantified production benefits begin to accrue in the year following subproject construction and are assumed to build up gradually over at least 6 years. Investment costs are based on the designs for proposed interventions at each site. The analysis uses the world price numeraire, a standard conversion factor of 0.91 and a shadow wage rate factor of 0.85.8 Economic indicators were estimated in the first instance without overhead costs (for project management, technical assistance, training and institutional strengthening). Overhead costs were assigned on a pro-rata basis to the subprojects and the economic indicators re-estimated as part of the sensitivity and risk analysis.

C. Estimated Benefits

3. Quantified Benefits. Benefits accrue from the increased crop production generated by the introduction of new or improved and more reliable irrigation to farms within each subproject command area. Gains occur in two ways. Firstly, yield increases are achieved when farmers are able to irrigate crops that were rainfed without the project or that were only partially (and unreliably) irrigated. Second, the cropping intensity increases because land that was not regularly cultivated is brought under cultivation in both seasons. For the economic analysis, crop budgets were prepared based on information on current yields and inputs provided by farmers, supplemented with crop production data for each district compiled by the Department of Agriculture (DOA). Data from other similar projects was also referred to. Inputs for with project crop budgets were based on current good practice in the respective districts and in similar areas and taking account of recommended inputs for various crops. The assessment of expected with project yields has been guided by the achievements of current good practice as well as published DOA information on attainable yields in each district, but with a few exceptions with project yields have been restricted to not more 20% above present yields. Cropping patterns are based on field observations and farmer information for the present situation. Future cropping patterns have been designed taking into account the likely impact of access to reliable irrigation, market situations and, particularly for labour intensive crops such, an

8 Some recent projects in Nepal have used SWRF as low as 0.70. The ―true‖ SWRF certainly varies in Nepal

across regions and sectors. For this analysis , a conservative estimate has been selected for the SWRF to ensure that this factor is not artificially inflating the EIRR and NPV estimates for the subprojects.



49

assessment of the areas likely to be manageable for households using their own labour. Future cropping patterns have been estimated conservatively in order not to exaggerate crop benefits.

4. The project will increase production of cereals as well as of vegetables and other cash crops. For many poor households increased cereal production will reduce household deficits and increase food security. For poor, marginal households in the sample subprojects, projected increases in cereal production are 38 kg per household per year in Majhkot, 380 kg in Buddhi and 200 kg in Patana. On a wider district, regional or national level increases in food grain production serve to reduce overall food deficits and substitute for imports. Nationally, increases in production are not keeping up with the demand of the growing population and the tendency to deficit is aggravated in years when the weather conditions are unfavourable. In 2006/07 there was an overall national food grain deficit of 260,000 tons according to data from the Ministry of Agriculture and Co-operatives (MOAC). After the poor monsoon in 2009, a significant grain deficit is expected for the 2009/10 year which may reach 400,000 tons, according to recent information from WFP.9 Any increases in cereal production arising from project implementation will help to address the overall national food deficit and will substitute for imports. Demand for vegetables is also rising with population and incomes and increased production also substitute for on-going imports from India. Apart from the market in Nepal, there is a small but growing market in north India for off-season vegetables produced in the hill districts where there is a climatic advantage for this production.

5. Non-Quantified Benefits. A number of benefits of the project which cannot be quantified can be identified. In some subprojects there will be direct environmental benefits such as the reducing of pressure on forest areas when the demand for small logs and other material for temporary off-takes and other structures is eliminated through the construction of gabion or other permanent structures. Increasing the productivity of existing cultivated areas may also reduce the pressure to convert existing forested or natural areas into fields. Higher cropping intensities and more intensive production will benefit some landless and other households in and near subproject sites by increasing the demand for labour from households with larger farms who are unable to meet increased labour requirements from their own resources. Increased production surpluses, especially the production of cash crops, will benefit local markets and trade in subproject areas.

D. Assessment of Financial Impacts

6. The financial impact of the three subprojects on farm household income is summarised in Table 1, based on changes generated by the crop budgets and farm models. Incremental income accrues gradually over 6 to 8 years. Smaller farms have relatively greater increases in income than larger farms since they are expected to produce a higher proportion of labour intensive, more profitable crops in their cropping pattern.

7. The impact on poverty is positive. An average marginal farm household in the Buddhi subproject can expect an income from on-farm production of NRs.25,370 ($347) per year, almost 150% above the present level, at full development of subproject production. In the Patana subproject, where marginal farm households are 69% of all households, average on-farm income for marginal farms will increase to NRs.47,170 ($646) per year, a 1240% increase over the present level. Households often also have non-farm sources of income and, in

9 Crop Situation Update, Issue 10, February 2010, World Food Programme & Ministry of Agriculture and Co-

operatives.



50

particular, labour migration to other areas in Nepal, to India and further afield can be a much more significant source of income than on-farm crop production.

Table 2: Estimated Incremental Income for Subproject Households

Subproject Farm % HH Average Area (ha)

Present Income (NRs)

Incremental Income

NRs %

Majhkot all farms 100 0.167 8,260 9,372 113%

Buddhi medium & small 29 1.290 33,690 24,380 72%

marginal 81 0.343 10,180 15,190 149%

Patana large & medium 11 4.447 138,720 74,521 54%

small & marginal 89 0.878 21,078 26,100 124%

STW cluster all farms 100 0.250 7,474 10,891 146%

E. Project Costs

8. The capital and ongoing costs of the subprojects are summarized in the table. Annual O&M costs have been estimated at 5% of initial capital costs.

Table 3: Subproject Costs

Subproject Total Cost ($) Cost per ha. ($)

Majhkot 22,830 1,427

Buddhi 96,095 1,501

Patana 131,918 767

STW cluster 45,620 1,140

Note: 1) The cost for STW clusters includes the cost of connection to the national grid of $23,300 per cluster.

F. Assessment of Economic Impacts

9. The EIRRs and sensitivity results for the three subprojects are given in Table 1. The EIRRs for the Majhkot, Buddhi and Patana subprojects are 23.5%, 21.6% and 27.7%, respectively. For the STW clusters, the estimated EIRR is 31.0%. These results have been estimated based on direct subproject construction costs and the benefits summarised in the preceding sections. No project management or other overhead costs have been included. The sensitivity results show that the EIRRs are robust to changes in the main cost and benefit variables, as indicated by the switching values. If capital cost over-runs of 20% are combined with falls in subproject benefits 20% below those estimated over the life of the subprojects, the Majhkot, Patana and the STWs projects would still have satisfactory EIRRs. In the case of Buddhi, the EIRR would fall below 12%, but for both these conditions to occur together is unlikely.

10. If project overhead costs, including subproject design and supervision, project management and agricultural and other training for beneficiaries are included the EIRRs are reduced. These activities account for 33% of total project costs, or 50% of infrastructure costs. If these costs are included in the subproject costs on a pro rata basis, the EIRRs for the three



51

subprojects are 18.7%, 15.3% and 21.5%, respectively – still well above the 12% discount rate and confirming the general robustness of the economic results for the subprojects.

G. Impacts on Poverty

11. For each subproject, project benefits were distributed to the economy (government), farm households and labour and the relevant proportions accruing to the poor were estimated for each category. For the economy, the proportion applied is the national average poverty level of 25% reported in the most recent Millenium Development Goals report of January 2010 while for farm households and labour the district proportions of those below the poverty line of 51% for Pyuthan and 40% for Kapilvastu are used.10 The poverty impact ratios for the three subprojects are 31% for Majhkot, 29% for Buddhi and 26% for Patana.

Table 4: EIRR & Sensitivity Results

EIRR (%)

NPV (NRs.’000)

Switching Value (%)

Majhkot Subproject

Base case 23.5% 1,351

Capital costs +20% 19.9% 1,028 +83.7%

-20% 28.2% 1,673

All benefits +20% 27.3% 1,944 -45.6%

-20% 19.1% 759

Costs +20%; benefits -20% 15.7% 436

With pro-rata overheads +50% 18.7% 887

Project life, 10 years 18.8% 537

Buddhi Subproject

Base case 21.6% 5,891

Capital costs +20% 16.9% 4,551 +48.0%

-20% 28.1% 7,231

All benefits +20% 26.9% 8,410 -32.7%

-20% 15.9% 3,373

Costs +20%; benefits -20% 11.7% -109

With pro-rata overheads +50% 15.3% 1,284

Project life, 10 years 17.3% 1,244

Patana Subproject

Base case 27.7% 8,684

Capital costs +20% 22.9% 6,840 +93.7%

-20% 34.2% 10,528

All benefits +20% 32.1% 11,771 -56.2%

1010

These proportions are from Small Area Poverty Estimates 2006, World Food Programme & Central Bureau of Statistics, Kathmandu.



52

EIRR (%)

NPV (NRs.’000)

Switching Value (%)

-20% 22.8% 5,598

Costs +20%; benefits -20% 18.4% 3,754



STW Cluster

Base case 31.0% 3,571

Capital costs +20% 26.0% 3,035 +133%

-20% 38.2% 4,108

All benefits +20% 39.4% 5,245 -42.6%

-20% 22.5% 1,898

Costs +20%; benefits -20% 18.6% 1,361



H. Feasibility Conditions for Subprojects

18. For assessing the economic feasibility of future subprojects included under the Project, it would be useful to have a simple, cost effective test to replace a full cost benefit analysis.

19. The subprojects assessed in detail for preparation of the project have EIRRs between 21% and 26%. These estimates are based on yield increases generally not exceeding 20%, except where there is a change from rainfed to irrigated production, and increases in cropping intensity between 12% and 16%. Costs per ha for the subprojects are NRs.104,000 ($1,425) for Majhkot in the hills and NRs.56,000 ($767) and NRs.109,600 ($1,500) for the two terai subprojects.

20. In preparing with project cropping patterns usually small increases in the areas of cash crops grown are assumed. For the terai subprojects, present areas of rainfed crops will also change to irrigated crops after project implementation. In the case of the terai sample subprojects these changes and the increased yields that come from irrigation are sufficient to ensure subproject viability without any change in the basic cropping pattern. Since conditions are likely to be substantially similar at most other terai locations:

subprojects with costs per ha below $1,000 and which involve changing at least 25% of the command area from rainfed to irrigated production and where the increase in cropping intensity can reasonably be expected to be at least 10% are highly likely to be economically viable;

subprojects that involve the conversion of the whole command area from rainfed to irrigated and have costs up to $1,500 per ha. are likely to be economically viable without any change in cropping pattern, but are highly likely to be viable where any increase in cropping intensity greater than 10% can reasonably be expected.

adding relatively high profitably potatoes and vegetables to the cropping patterns increases the likelihood of economic viability.



53

21. Subprojects with costs above $1,500 per ha, which could only be considered for new schemes that will result in 100% of the command area being converted from rainfed to irrigated cultivation, and where there are good reasons to expect the cropping intensity to increase by more than 15% and preferably by about 20%, will most probably be viable. In practice, an actual increase of 20% may be difficult to achieve in many contexts.

22. Shallow tube well schemes on the terai fall under the same parameters as surface water schemes. Most STW schemes will involve the conversion of the 100% of command area from rainfed to irrigated and as the estimated cost for a 40ha STW cluster varies between NRs.84,000 ($1150) per ha. when a new connection to the electricity grid is required and NRs.41,000 ($562) per ha. when electricity is available in the area and a new grid connection is not required, these schemes are always highly likely to be economically viable.

23. In the hills, small subprojects depend more for viability on the production of higher value cash crops than is the case on the terai. In some hill subprojects, limited availability of water in the dry season may place constraints on production options. It makes sense that these small irrigations systems in the hills, which are relatively expensive to implement, will require a reasonably proportion of high value production for economic justification.

24. Small hill subprojects can support costs up to $1500 per ha provided they involve an increase in irrigated area in the dry season and a shift in cropping pattern towards more vegetables, potatoes or other high value cash crops, which should probably be grown on a total of at least 25% of the command area during the course of the year (i.e. if the cropping intensity is 200%, vegetables account for one eighth of the total). Cropping intensity should increase by at least 10%. Costs of up to $2,000 per ha may be acceptable where market conditions can reasonably be expected to support up to 50% of the command area being planted to high value cash crops in each year.

25. The conclusions of this review are summarised in the table, which can be used as a guideline for determining probable viability of subprojects.

Table 5: Cost per Hectare Guidelines

Location NRs./ha $/ha. Change in Cropping Intensity

Vegetables as % command

area 1)

Comments

Terai <55,000 <$750 >10% - 10% increase in irrigated area

Terai <73,000 <1,000 > 10% - 25% increase in area irrigated

Terai <110,000 < 1,500 >10% - Up to all CA rainfed to irrigated

Terai - STW <84,000 <1150 none - Assume all rainfed to irrigated

Hills <110,000 <1,500 >10% >= 25% Increase in high value crop production needed

Hills 110,000 – 145,000

1,500 – 2,000 >15% up to 50% Increase in high value crop production needed

Note: 1) Vegetables and other higher value crops


Appendix 7: Summary Poverty Reduction and Social Strategy

54

7. SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY

Country/Project Title: Nepal, Community Irrigation Project (CIP)

Lending/ Financing Modality:

Grant Department/ Division:

South Asia Department Agriculture, Natural Resources and Social Services Division

I. POVERTY ANALYSIS AND STRATEGY

A. Link to the National Poverty Reduction Strategy and Country Partnership Strategy

CIP will directly contribute to increasing agricultural productivity and production, as improved access to year-round irrigation will enable crop diversification and increased cropping intensity. The project therefore contributes directly to the following the Country Partnership Strategy (CPS) outcomes: (i) Increased agricultural income and employment opportunities with emphasis on poor and disadvantaged groups; (ii) Diversified and commercialized agricultural production; (iii) Improved access to agricultural inputs; and (iv) Social, political and economic empowerment of women and other socially excluded groups.

The project directly supports the government‘s poverty reduction strategy as outlined in the Tenth Plan, Three-Year Interim Plan and the budget for FY 2010 in the following ways: to improve the living standards of the poor, disadvantaged and socially excluded sections of the population through: (i) Employment-oriented and broad based high economic growth (CIP: irrigated high value cropping), (ii) Improved governance and service delivery systems (CIP: linking irrigation sector to DDC), (iii) Inclusive social development (CIP: gender action plan and inclusive C&P plan), and d) Inclusive development and targeted programs (CIP: targeting poor, women and socially excluded communities with irrigation

B. Poverty Analysis Targeting Classification: _TI-H

Key Issues: Farmers with marginal land holdings of less than 0.5ha or with less than 1ha in poor areas are targeted

as beneficiaries under the Project. Farmers with larger landholdings have received benefits from other government supported projects, but farmers with small land holdings have not been supported with irrigation projects. The project will cover all ecological zones, terai, hill and mountain. The targeting criteria of land size and poverty incidence

correspond to areas with relatively greater numbers of marginalized and poor farmers from disadvantaged caste and ethnic groups and women farmers.

The project increases access to irrigation water for extremely and moderately poor farmer households. To enhance its impacts the project will work in poor Ilakas (subdistricts) of 12 poor districts. Further the project will provide extra

assistance to the poorest and socially marginalised irrigation users to increase their level of participation and benefit. However, because irrigation benefits are directly linked to land size and because poor system users can not be separated from the main community, the whole community benefits and the poorest community sections will get a relatively small share of actual benefits. Similarly, the poor landless in target communities will only benefit in an indirect manner.

The main beneficiaries will be marginal farmers (<1ha) who constitute the majority of farmers in Nepal. A shift to irrigated agriculture and vegetable farming, notably through piped irrigation and shallow tubewells will lift most of them above the poverty line. The project will also contribute to the MDGs directly (food security/MDG1) and indirectly (MDGs 2-7) through increased incomes and food.

Poverty incidence has decreased in the last decade from 42% in 1996 to 31% in 2004 mainly due to increased remittances, greater connectivity and urbanization (NLSS II, 2003/2004). The poverty has reduced to 24% in 2009 (Draft MDG Progress Report 2010). Lack of land, water and road access remain key causes of poverty, but a key issue is highlighted by poverty trends during this same period: disparities have remained equal or have even grown between rural and urban areas (35% vs. 10%), between the central and mid-/far-western areas (27-29% vs. 41-49%), and between dominant caste groups (14-18%) and socially excluded dalits (46%), indigenous people (35-44%) and Muslims (41%). Nepal‘s GINI coefficient increased from 34% in 1996 to 41% in 2004. Both Government of Nepal and ADB‘s strategies emphasize therefore social inclusion and targeting poor areas as key to poverty reduction.

Design Features: The subproject selection process is key to poverty reduction impacts. Irrigation programs normally

cover administrative regions or ecological zones, regardless of poverty, and within districts, subprojects are selected on basis of an open application process in which most often larger, more accessible schemes are selected benefiting better-off population groups that often have had previous access to external assistance. CIP therefore proposes to target and cluster poor areas to increase the chances of reaching the poor and to enable the levels of interaction that poor communities often require for project success. The project has selected 12 of the 35 poorest districts of Nepal, suitably clustered for optimal efficiency. Within these districts, the poorest Ilakas will be selected on the basis of available data and district level consultation. The project will initiate in each VDC of these Ilakas a poverty-and-irrigation assessment-based planning process that includes poor and disadvantaged groups from each ward of the VDC. The identification of irrigation schemes with highest poverty reduction impacts by people themselves will probably lead to higher numbers of piped irrigation schemes and shallow tubewells as these are often the only



55

opportunities in dry and therefore poor areas. Moreover, both piped irrigation and tubewell schemes can be designed for equitable water distribution (rotation on basis of HH instead of land size). As disadvantaged groups like women, dalits, indigenous people, Muslims and other minorities face obstacles in participating and benefiting on an equal footing with dominant groups, the project will support them through organisation, training and coaching to participate in a meaningful way in decision making processes, canal branch water user groups and Water Users Associations (WUAs), as well as in agricultural and capacity building activities and facilitating access to micro finance for savings and loans to enhance agricultural livelihoods.

Economic analyses for CIP project preparatory technical assistance pilot subprojects estimate that the project will increase incomes by roughly $100-300 for small and marginal farmers, i.e. those 85-95% of households which have less than 2.5ha. These figures match benefit figures for micro-irrigation programs (Jobs in Agriculture, IDE 2010). Benefits for medium and large farmers will be $300-800.

II. SOCIAL ANALYSIS AND STRATEGY

A. Findings of Social Analysis

Key Issues: The project targets primarily marginal farmers (<1ha) who will form at least 60% of all beneficiaries. Proportions of disadvantaged groups will be higher than the averages for each concerned project district. Moderately

and less poor, medium and large system users will probably constitute between 5 and 20%. The poor primary target group faces considerable obstacles to participation and benefit in the form of resource poverty, remoteness, social exclusion, domination by large and medium farmers, lack of education, exposure and access to services and markets, and consequently low absorption capacities regarding new development opportunities. Most of these obstacles count in equal measure for women. To make their participation effective and beneficial, the target group requires extra capacity building prior to participation in trainings, WUAs and decision making processes. For more equitable benefit distribution, the poorest groups will require technologies and trainings tailored to their constraints to maximize benefits to levels comparable to the less poor in the system.

B. Consultation and Participation

CIP is a community led project with each community nominating themselves for inclusion and forming an inclusive organisation to drive each sub-project. To ensure involvement of all village stakeholders, including disadvantaged groups, a VDC-level planning exercise is undertaken in which subprojects for the poorest wards are selected based on the developed criteria. Field workers will consult the community as a whole, assess which stakeholder subgroups have such different interests and disadvantages (e.g. tail enders, dalits, women, branch canal users). These subgroups will be separately consulted on benefits, participation, design and livelihoods needs, constraints and opportunities at different stages of project implementation. The preliminary design of system and accompanying activities, resulting from consultation processes, will be discussed with the whole community. The consultation and participation plan and gender action plan indicate how disadvantaged groups will be supported to participate in planning, implementation, training and agricultural improvement activities.

2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring?

Information sharing Consultation Collaborative decision making Empowerment

3. Was a C&P plan prepared? Yes No

The objective of C&P plan is to enhance local ownership and inclusion of all the stakeholders in participation and benefit sharing. The plan includes participatory methods in all decisions to be made at different stages of project implementation such as selection of Ilakas and subprojects, system design, O&M, financial contributions, mode and

management of construction, participation in WUAs and representation of disadvantaged in WUA and WUGs by all stakeholders. The weaker stakeholders will be provided special coaching and measures taken for their participation. The activities of C&P plan are integrated in overall community mobilization and work plan of the sub projects. The C&P plan also includes workshops and functional relationships with GOs, NGOs and CSOs.

C. Gender and Development

Key Issues: Key gender issues are under-representation of women in decision making on systems that impact their

lives and livelihoods, potential increase of workloads in connection with agricultural intensification, and feminization of agriculture due to male labour migration. Constraints to equitable participation include high workloads, gender discrimination, lack of education and awareness, and consequently low absorption capacities regarding new development opportunities. Additionally the traditional role of women in irrigation systems (particularly in heavy physical works and day and night activities in the field) in many cultures will take time to change, and women‘s weaker position at community level also leaves them as less influential members in WUA decision making.

Key Actions: Measures included in the design to promote gender equality and women‘s empowerment—access to

and use of relevant services, resources, assets, or opportunities and participation in decision-making process:

Gender plan Other actions/measures No action/measure

The gender action plan has been made an integral part of the project design and is covenanted. It includes (i) gender sensitive and inclusive procedures and provisions within WUAs, WUGs ; (ii) consultation of women and consequent incorporation of women‘s needs in the system design and other project activities through implementation of C&P plan; (iii) proportionate representation of women in decision making bodies and processes, trainings and project activities; (iv) extra capacity building prior to participation in trainings, WUAs and decision making processes; (v) equal payment to and voluntary contributions by women for labour; (vi) gender, caste and ethnicity disaggregated monitoring and Management Information System (MIS); (vii) sub project specific Gender Action Plan (GAP) operationalization; and (viii) MFI schemes for women to provide access to loans and savings schemes to improve



56

agricultural livelihoods. The GAP further provides targets for female project staff in both community/field team and irrigation engineer roles. One Social Development Specialist (SDS) will be hired by PCU for 48 months of the total project period. Field Coordinators with gender and social development expertise will be placed in each project district that will be supported by a team of village based social mobilisers cum technicians. Adequate budget has been allocated for regular staffing and also for additional technical input if needed during project implementation. The project Benefit Monitoring and Evaluation (BME) system will analyze gender disaggregated data and undertake periodic gender analysis of subprojects. Implementation team includes a nominated pool of high level experts to be utilized according to project need and implementation progress – one of whom must be a gender specialist with relevant sectoral experience. Monitorable indicators:

At least 33% women beneficiary participation from diverse caste and ethnic groups in all major consultations

WUA executive committees have at least 33% women and all elected female WUA officers are trained

WUA Constitutions prepared provide for 33% female representation, and guidelines for meaningful participation

At least 50% of total trained farmers are women

Female farmer groups formed, and female farmers experience a 15% increase in crop yields over 5 years

75% of female project stakeholders join the microfinance program, and 70% of female MFI members use micro finance to enhance agricultural livelihood

Gender and Social Inclusion Unit of Department of Local Infrastructure Development and Agricultural Roads (DOLIDAR) provided gender inputs to district technical office (DTOs) and coordinated with PCU SDS

1 gender-trained and experienced SDS based in PCU to lead on all social safeguards and development issues

12 gender trained Field Team Coordinator (FTCs) based at District level to lead Village based field team (VBFT) on all social safeguards and development issues

At least one of the 3-person VBFT is a local woman

Project collects all data disaggregated by sex, caste and ethnicity and reports reflect this

DTO irrigation engineers are new district level positions under this project. DOLIDAR will hire 3 female engineers (12 positions).

Gender specialist with relevant sectoral experience included in the consultant's pool of on-call experts III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS

Issue Significant/Limited/ No Impact

Strategy to Address Issue Plan or Other Measures Included in Design

Involuntary Resettlement

No impact Due diligence reports will verify voluntary donation. Should a RP be triggered, the sub project will be dropped.

Full Plan Short Plan Resettlement

Framework No Action

Indigenous Peoples

No impact Project will work in areas where IPs predominate. No project impacts are negative and will be the same as for other project stakeholders.

Plan Other Action Indigenous Peoples

Framework No Action

Labor

Employment opps. Labor retrenchment Core labor standards

No impact Implementation through WUA with labor by community members. Equal wages for women and men implemented

Plan Other Action No Action

Affordability Limited Poor and disadvantaged households‘ contribution (cash and labor) will be made through consensus building.

Action No Action

Other Risks & Vulnerabilities

Others (conflict, political instability)

Limited Nepal has a history of conflict. This will be addressed through the peace filter.

Plan Other Action No Action

IV. MONITORING AND EVALUATION

Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No

Project includes a comprehensive Benefit Monitoring & Evaluation system with corresponding MIS & responsible staff.

http://www.adb.org/Resettlement/category.asp

http://www.adb.org/Resettlement/category.asp

http://www.adb.org/IndigenousPeoples/IP-Screening-Categorization/default.asp


Appendix 8: Gender Action Plan

57

8. GENDER ACTION PLAN (GAP)

Activity/Measure Targets/Performance

Indicators Data Source/

Reporting Mechanisms

Responsibility

Output 1: Water User Associations (WUAs) Efficiently Manage Improved Irrigation Infrastructure

Socio-economic survey of each subproject area includes variables such as income level, education, land ownership, economic activity, household heads etc disaggregated by gender

All subproject data is gender disaggregated

Survey Reports Subproject Feasibility Reports

Benefit Monitoring and Evaluation Specialist (BMES) will develop all surveys with input from the Social Development Specialist (SDS) in the PCU. Village based field team (VBFT) will implement.

Project Consultation and Participation Plan prepared and disseminated to Districts to enhance participation of women at all project stages

At least 33% women beneficiary participation proportionately from diverse caste and ethnic groups in all major consultations

Periodic Benefit Monitoring and Evaluation (BME) reviews in sample subprojects

Field Team Coordinator (FTC) and VBFT

WUAs formed and registered with women participation

WUA executive committees have at least 33% women

Feasibility Study Reports and VBFT Progress Reports

FTC and VBFT

WUA technical and leadership training conducted for WUA officers

All elected female WUA officers are trained

BME reviews SDS/FTC

WUA Constitution prepared

WUA Constitutions prepared provide for 33% female representation, and guidelines for meaningful participation

WUA Constitutions SDS/FTC

Output 2: Farmers Apply Improved Agricultural Practices and have Access to Microfinance

Farmer field school and short agriculture skills training conducted with reference to women's existing skill level and constraints on time

At least 50% of total trained farmers are women Female farmer groups formed

BME reviews Project quarterly reports

Technical Support Team in consultation with SDS for design of gender enhancement measures

Microfinance program introduced to subproject areas to enhance agricultural livelihoods

75% of female project stakeholders join the microfinance program

Rural Microfinance Development Center (RMDC) Reports

PCU/SDS to coordinate and support microfinance institutions to provide services in subproject areas as a key implementing partner

Micro-finance schemes operational and providing production and equipment loans & savings plans

70% of female MFI members use micro finance to enhance agricultural livelihood

RMDC Reports VBFTs to coordinate and support MFI activities

Female farmers improve 15% increase in crop Random sampling VBFTs/PCU BMES


Appendix 8: Gender Action Plan

58

Activity/Measure

Targets/Performance Indicators

Data Source/ Reporting

Mechanisms

Responsibility

crop intensity and crop yield

yields over 5 years

Output 3. Government Capacity to Plan and Coordinate Small Scale Irrigation Projects is Enhanced

This Gender Action Plan (GAP) to be disseminated to sub project level through effective mainstreaming of GAP activities

Effective implementation of all GAP activities in each sub-project

BME reviews PCU/District technical office (DTO)/Technical Support Team

Active coordination and support to Department of Local Infrastructure Development and Agricultural Roads' (DOLIDAR) Gender and Social Inclusion Unit

Gender and Social Inclusion Unit provided gender inputs to DTOs and coordinated with PCU SDS

Quarterly project reports

DOLIDAR and PCU with SDS taking the lead

Social Development Specialist hired

1 gender-trained and experienced SDS based in PCU to lead on all social safeguards and development issues

PCU structure includes SDS with terms of reference (ToR) specifically referring to GAP implementation.

PCU

Field Team Coordinators skilled in gender and other social development/safeguards hired

12 gender trained and experienced FTCs based at District level to lead VBFT on all social safeguards and development issues

FTC ToR specifically referring to GAP implementation.

PCU

Women from ethnic and caste groups reflecting stakeholder profile are recruited to the VBFT

At least one of the 3-person VBFT is a local woman

BME review PCU

BME Management Information System (MIS) established in PCU

Project collects all data disaggregated by sex, caste and ethnicity and reports reflect this

MIS Disaggregated data available for analysis

PCU particularly M&E specialist

Improve DOLIDAR's gender balance and provide good technical role models to women in project areas

DTO irrigation engineers are new district level positions under this project. DOLIDAR will hire 3 female engineers (12 positions).

DTO staffing DOLIDAR

Specific and high level technical assistance on how to enhance gender outcomes in small irrigation projects is available on call

Gender specialist with relevant sectoral experience included in the consultant's pool of on-call experts

BME reports reflect increased ownership on implementation of GAP and inclusive provisions

PCU

BME=Benefit Monitoring and Evaluation; BMES= Benefit Monitoring and Evaluation Specialist; DOLIDAR= Department of Local Infrastructure Development and Agricultural Roads; DTO=district technical office; FTC=Field Team Coordinator; GAP=Gender Action Plan; MFI=Microfinance Institution MIS=Management Information System; PCU= Project Coordination Unit RMDC= Rural Microfinance Development Center; SDS= Social Development Specialist; TOR= terms of reference; VBFT= Village based field team; WUA=water users association


Appendix 9: Consultation and Participation Plan

59

9 CONSULTATION & PARTICIPATION PLAN A. Objectives and Principles

1. The participation strategy elaborates how the project will ensure meaningful participation of all stakeholders in project planning, implementation and operation and maintenance. 2. The participation strategy has the following objectives:

a. Ensure local ownership; b. Ensure inclusion of all types of user stakeholder groups in participation

processes and benefit distribution; and c. Ensure dissemination of results, lessons learned to the wider community,

including interested government, NGOs and civil society organizations.

3. The main principle of effective participation is that those who will be responsible for a specific aspect after the project is completed will also be responsible for that aspect during implementation. This ensures that the project will be designed and implemented as per the needs, capacities and constraints of those responsible. It also ensures that those ultimately responsible are assisted to develop the required capacity for effective management and implementation. It implicitly means that outsiders who implement one aspect during the subproject will be accountable to those ultimately responsible rather than to their own superiors. 4. In most cases the end-owners are not equipped to operate and maintain all parts of the new facilities from the beginning and the participation process will have to take care of capacity building and ensure a gradual shift of ownership from CIP to the users. B. The Scope of Consultation and Participation

5. Besides the participation in activities like training and construction, participation and consultation in decision making concerns the following type of decisions and choices:

a. Selection of Ilakas by district level stakeholders; b. Selection of subprojects by VDC level stakeholders; c. Decisions on the system design; d. Decisions on the O&M system, level of financial contributions; e. Decisions on mode and management of construction; f. Decisions on participation in the WUA, WUG; g. Decisions on representation from disadvantaged subgroups and WUGs to

the WUA and WUGs, trainings; and h. Meaningful participation in all meetings, groups and activities referred to

above.

C. Stakeholders

6. Beneficiary stakeholders to be consulted and to participate include both mainstream beneficiaries and also potentially disadvantaged groups (further elaborated in PPTA Final Report, Appendix G chapter D: Social Issues and Stakeholder Groups). Table 1 presents stakeholder categories as drawn from the project preparation socio-economic analysis.



60

Table 6: Stakeholder Categories and those who May Require Additional Participation Support

Caste/Ethnicity/Religion May require participation

support

Brahmin-Chhetri

Advantaged IP (Newar, Thakali)

Terai Middle Caste

Hill Dalit X

Terai Dalit X

Disadvantaged IP (Sherpa, Rai, Gurung, Magar)

X

Marginalized IP(Tamang, Kumal, Tharu) X

Endangered and highly marginalized IP (Majhi, Rajbanshi)

X

Religious Minorities (Muslims) X

Geography

Main beneficiary village(s)

Remote villages ( >1hr walk to road) X

Neighbouring potentially affected villages

Tail enders X

Economic Status

Main stream beneficiary population

Ultra-Poor (below poverty line) X

Households with <6m food security

Landless system users X

Marginal (0.01 - 0.5ha) X

Ex- Bonded Labour (Kamaiya) X

Project Affected X

Gender

Women X

Female headed household X

Seasonally/de facto female-headed hh X

D. Lessons Learned

7. Lessons learned from other projects are:

a. Owner-is-actor. The owner-is-actor principle is not followed and agency-hired contractor-built subprojects are handed over to unprepared communities. Under CIP the users under coordination from the WUA are, as per the owner-is-actor principle, responsible for both construction, O&M, gender equity and social inclusion, livelihoods enhancement for the ultrapoor, and resettlement . In CIP the community will make all the decisions regarding O&M, construction and design, but will need ample guidance from the projects staff. At the end of the subproject the users should be able to take most of such decisions without project support. b. Time pressure and construction focus. Sufficient time needs to be allocated for each step in the process Time shortage and construction time pressure force projects to short-cut participation processes. Proper participation requires time,



61

and the four month PPTA pilot project planning process was a point in case. In CIP, the demand for high numbers of subprojects resulting from a large budget, the spreading of the project area over many districts and regions, and the focus on limiting the non-construction costs will mean that time shortage and low levels of interaction between users and project staff will remain obstacles to meaningful participation. c. Skills and technology. Approaches and technology are used that users cannot replicate or replace due to high cost or lack of skills. In CIP, the WUA and branch WUGs have no experience or expertise in ensuring quality implementation of the subprojects various components. Its focus will moreover be on the most important component system construction. Support for specific groups that are not part of the leadership, like the poor, women or project-affected, might further be seen as an complex extra burden. Therefore CIP will have to provide adequate guidance and support to allow WUAs and WUGs to grow in their roles. d. Resource Mobilization. Whether for irrigation or other infrastructure, O&M arrangements and maintenance funds for agency-supported infrastructure are rarely successful in Nepal, whether it is the responsibility of users or an agency. Users once assisted by an agency, will always go back to agencies for major repairs or rehabilitation and often manage support. In CIP the users will be asked to show their organisational and resource mobilization skills by an upfront money deposit after signing the agreement. e. Gender. Gender discrimination and social exclusion are social and cultural phenomena that will not change overnight or due to one project. Participation of disadvantaged groups, including women, is often done as a token gesture without any meaningful participation and better benefit distribution as a result. Communities need extensive guidance and support to see the positive aspects and impacts from inclusion. The project has developed a gender action plan to ensure equitable participation and distribution of project benefits by gender. f. Other projects. Practices in other programs will influence attitudes of users towards project aid, participation, inclusion and O&M. A project that demands much less or much more contribution from the users than others in the past or in the neighbourhood will influence those projects in a negative way or be influenced by them. CIP will coordinate with other projects in the districts to coordinate approaches and make participation related policies uniform, and to create synergies.

E. Steps to Ensure Meaningful Participation

8. Based on the socio-economic analysis and the lessons learned, certain groups are relatively disadvantaged when it comes to meaningful project participation. The steps that outline the (support to) participation of stakeholders during planning, implementation and operation and the special measures taken to ensure beneficiary ownership, are integrated in the subproject planning, implementation and operation process, and in the safeguards policies and plans.11 Please consult these documents in conjunction with this plan. 9. The following table summarizes which category stakeholder will be involved in which activity or decision making stage.

11

Indigenous Peoples Framework, Resettlement Framework, Gender Action Plan.



62

Decisions & Action ISP Main users

ISP DAG

ISP Women

VDC leaders

VDC Ward

& DAG Reps

Dt leaders

Dt officials

Dt DAG Reps

Dt CSO

a. Selection of Ilakas by district level stakeholders

Ѵ Ѵ Ѵ Ѵ Ѵ

b. Selection of subprojects by VDC level stakeholders

Ѵ Ѵ

c. Decisions on the system design

Ѵ Ѵ Ѵ

d. Decisions on the O&M system, level of financial contributions

Ѵ Ѵ Ѵ

e. Decisions on mode and management of construction

Ѵ Ѵ Ѵ

f. Decisions on participation in the WUA, WUG

Ѵ Ѵ Ѵ

g. Decisions on representation from disadvantaged subgroups and WUGs to the WUA and WUGs, training

Ѵ Ѵ Ѵ

h. Construction Ѵ Ѵ Ѵ

i. Operation & maintenance

Ѵ Ѵ Ѵ

j. Agriculture and livelihoods training

Ѵ Ѵ Ѵ

k. WUA/WUG capacity building

Ѵ Ѵ Ѵ

l. Monitoring Ѵ Ѵ Ѵ Ѵ Ѵ Ѵ Ѵ Ѵ Ѵ

m. Annual VDC review meeting

Ѵ Ѵ Ѵ Ѵ Ѵ

n. Annual district review/plan

Ѵ Ѵ Ѵ Ѵ Ѵ Ѵ

10. The socio-economic survey of each sub-project will flag those requiring support to enhance their meaningful participation in the activities described above. These groups will receive targeted coaching or preparation by the field teams hired under the implementation project. The PCU Social Development Specialist will analyze each sub-project based on its socio-economic profile and suggest targets for participation assistance. S/he will also provide training support to the field teams in this respect. Data on participation assistance to relatively disadvantaged groups will be collected.

F. Information Dissemination

11. The processes and results of this project will be of interest not only to project stakeholders, but also other government and non-government organizations, as well as some civil society organizations. Many of these organizations have been consulted and



63

given inputs to the project design process. In order to ensure the project may learn from other relevant activities and vice versa, the Benefit Monitoring and Evaluation Specialist will invite such GOs, NGOs and CBOs to periodic workshops to discuss project results, and in particular periodic specialized studies on such topics as gender, poverty impact or other case studies generated through the BME process.


Appendix 10: Environmental Assessment and Review Framework

64

10. DRAFT ENVIRONMENTAL ASSESSMENT AND REVIEW FRAMEWORK (EARF) A. INTRODUCTION

1. The majority of the small or marginal farmers cannot achieve the productivity potential of their agriculture livelihood since they lack reliable irrigation water and improved agriculture technology. Irrigation has a key role to play in Nepal's poverty reduction strategy. For individuals and households, access to irrigation reduces the rural poverty by (i) increasing food production, (ii) increasing on-farm employment, and (iii) increasing income.

2. The Government of Nepal (GoN) has requested the Asian Development Bank (ADB) to provide grant support for the Community Irrigation Project (CIP), with an objective to enhance farm income and reduce poverty through the development or improvement of small scale irrigation systems12 in selected terai and hill districts. Districts will be selection for participation based on a high proportion of poor and disadvantaged social groups as well as irrigation potential.

3. The project preparation technical assistance (PPTA) study for the Project carried out a feasibility study of three sample small irrigation subprojects: two in the terai and one in the hills. The Initial Environmental Examination of these three subprojects was carried out following the requirements of the ADB's Safeguard Policy Statement, 2009; and GoN's environmental protection act, 1997 and environmental protection rules, 1997 (amendment 2007). Based on the findings from the IEE, and experience with other irrigation projects in Nepal, this Environmental Assessment and Review Framework (EARF) has been prepared to guide the environmental due diligence on subprojects during CIP implementation. District Development Committees (DDCs) and their District Technical Offices (DTOs) are responsible for overseeing the planning of subprojects (feasibility and detailed design), approving designs, and supervising construction and implementation. It is anticipated that most construction works would be performed by the beneficiaries, water users associations (WUAs). Private contractors may be engaged through national competitive bidding if WUAs are deemed incapable of managing some or all of the necessary works. The DTOs will be supported by consultant/NGO, who will be responsible for completing feasibility studies and detailed designs. The DTOs, with consultant/NGO support, will be responsible for environmental due diligence, and completion and approval of any environmental assessment documentation required under this framework.

4. In the absence of a policy in consistent with the ADB's policy on environment, this framework and environmental management procedural guidelines shall apply to all subprojects under the grant for the Community Irrigation Project (the Project) so as to ensure that the environmental issues are appropriately addressed and mitigated to acceptable levels. They are intended to provide for effective integration of environmental assessment and environmental management planning into the subproject preparation process, in accordance with the laws of Nepal, and conform to the requirements of the ADB. B. ASSESSMENT OF LEGAL FRAMEWORK AND INSTITUTIONAL CAPACITY

5. Requirements of the Country Safeguard System: The Schedule 1 of the GoN‘s Environmental Protection Rule, 1997 (amendment 2007) (EPR) stipulates that an IEE is necessary for a new irrigation systems covering more than 200 – 2000 hectares in the Terai; 25 - 200 hectares in the hills; and 25 – 200 hectares in the sloping terraces and mountainous regions. IEE is exempted for rehabilitation of irrigation systems unless construction of new headwork and changes in main canal is required.

6. ADB's Environmental Safeguard Requirements: ADB has classified projects under four categories depending on the category of its most environmentally sensitive component, including direct, indirect, cumulative and induced impacts in the project's area of influence.

12

Project intervention will be limited to command areas of up to 25 ha. in the hills and 200 ha. in the terai



65

The categories are (i) Category A- require Environmental Impact Assessment (EIA) study; (ii) Category B- requires Initial Environmental Examination (IEE) study; Category C- have minimal or no adverse environmental impact and thus does not require environmental assessment, although environmental implications need to be reviewed. Environmental Due Diligence will be adequate for such projects; Category F: if project involves investment of ADB funds to or through a financial intermediary.

7. The two key parties involved in the environmental assessment of the subprojects under the CIP are the respective DDCs and DTOs of the selected Project districts (the Proponents) and the Ministry of Local Development (MOLD). MOLD through its Department of Local Infrastructure and Agricultural Roads (DoLIDAR) is the Executing Agency (EA) of the CIP. Responsibilities for preparation of IEEs / DDRs and obtaining approvals rests with the project proponent (the DDCs), and review of the report and giving approval for IEE report rests with the MOLD. Approval for DDRs from the MOLD is not a legal requirement.

8. District Development Committees are comparatively weak in conducting environmental assessment, and implementing, monitoring and reporting of the environmental management plan (EMP). An Environmental and Social Unit has been established recently in each of the DDCs of the country under the on-going ADB and multi-donor agencies financed Local Governance and Capacity Development Program (LGCDP). Staffing and training of the Unit is being conducted under the program. With external expert support and coordination with programs under the LGCDP, the DDCs are expected to be able to conduct the IEE or DDR of the subprojects, and monitoring and reporting EMP implementation.

C. ENVIRONMENTAL CRITERIA FOR SUBPROJECT SELECTION

9. The following environmental criteria for subproject selection will apply during the implementation of the Project: (i) the subproject must have reliable water availability for the proposed investment; (ii) the subproject must have no unresolved conflicts regarding water rights among neighboring communities; (iii) the subproject must have no negative impact on downstream users of the same source or ecosystem; (iv) subproject should avoid areas prone to frequent land slides or riverbank erosion that require high O&M costs; (v) the subproject area must have soils suitable to irrigation and will not lead to drainage congestion, salinity intrusion, and soil erosion caused by irrigation; (vi) the command area of the subproject must not exceed 200 ha in the terai, 25 ha in the hills and mountains; (vii) the subproject will cause no direct or indirect threat to ecologically sensitive areas such as national parks, wildlife sanctuaries or wetlands, conservation areas of the international significance, or areas of high historical, archeological, cultural or aesthetic value; (viii) the subproject must not require involuntary resettlement; and (ix) the subproject must not have any major negative environmental impacts that require environment assessment impact study.

10. These selection criteria will ensure that subprojects selected under the Project will not have significant adverse environmental impacts. In other words, there will be no Category A subprojects. In addition, several other potential environmental impacts that are usually faced in irrigation projects, such as potential upstream-downstream water use conflicts

D. PROJECT ACTIVITIES AND THE ANTICIPATED ENVIRONMENTAL IMPACTS

11. Project Activities: The Project focuses on small farmer-managed irrigation systems in the hills, mountains, and terai plains. Schemes will be selected based on farmer demand, and most are expected to be for rehabilitation (and possible extension) of existing systems,



66

or installation of new shallow tube wells. Relatively few new systems are anticipated, and these will be primarily in the hills and mountains.13

a. In the hill and mountains, the irrigation systems have small command areas: less than 25ha with surface springs or small rivers as source. These systems will have canals or reticulated pipe conveyance and distribution systems with small storage tanks. For some systems, pumps will be installed to lift the water to the command area. Micro-irrigation (such as drip and sprinkler systems) for on-farm water delivery will be adopted for selected subprojects.

b. In the terai, there will be both surface and groundwater irrigation systems of less than 200 ha. Water will be diverted and distributed from rivers through weirs or pumps by canals. Through rehabilitation and upgrading, water will be used more efficiently, allowing some expansion of command areas where suitable land is available. Groundwater resources will be accessed through installation of shallow tubewells (STWs) with a maximum command area of 4 ha, with flexible hoses and ditches for the distribution of water.

12. All civil works under the Project will be small-scale. Generally a concrete or cement masonry rigid control structure (intake) will be avoided. Semi-permanent gabion weirs are more suitable as they have some flexibility and are easier to repair by farmers themselves. Temporary structures will be preferable for difficult intake sites on steep rivers in the hills. Other works that will be considered include river bank and intake protection, escape structures, sediment traps, lining of canals, covered canal sections or pipes where the canal passes through areas of permeable soils or landslides zones, cross drainage works, drop structures, division structures, and outlets. STWs with a depth of generally less than 30 m, a diameter of 10 cm, and a small capacity pump (between 10 l/sec to 15 l/sec) will be installed using proven local technology.

13. The rehabilitation and upgrading of existing surface systems will improve the efficiency of the systems‘ conveyance and distribution and generally not entail an increase in diversion capacity. Some rehabilitation and upgrading components will have positive environmental impact. Replacement of temporary brush weirs by semi-permanent weirs will avoid the need to cut trees for the rebuilding of the weirs that are washed away or damaged during floods every year. Slope stabilization measures will be undertaken where canals pass through deep cuts with unstable slopes. Additional cross drainage capacity will reduce flooding in command areas. Micro-irrigation will conserve water and prevent soil loss on non-terraced agriculture land. STW clusters will be installed in areas with favorable groundwater conditions. Groundwater assessments indicate that resources are abundant and approximately 54% of annual recharge is presently used.

14. The irrigation infrastructure will be supplemented by other agriculture development and income generation support that will further assist in sustainable environment in the project area.

15. Anticipated Environmental Impacts: The checklist of likely environmental impacts from the implementation of the subprojects under the CIP are compared with those of typical irrigation projects in Nepal, demonstrating that the negative impacts of the CIP subprojects will be minimal. See the following table 1.

Table 1. Potential environmental impacts: comparison of typical irrigation projects and CIP

Potential Impacts of Typical Irrigation Projects

Implications for CIP

Realization of Enhancement Potential

13

No new surface schemes are foreseen under CIP in the terai as most of the agricultural land with surface irrigation potential has already been developed.



67

Community water supply in command area Aquaculture in command area

Not part of project scope Not part of project scope

Problems related to Project Design Potential catchment erosion upstream of

intakes

Landslides along irrigation system Impediments to movements of wildlife, livestock

and people

Over-pumping of groundwater Inadequacy of drainage planning

Drainage and flooding problems

Passageways

Scouring hazards

Not foreseen – schemes will be selected with

stable catchment areas Not likely - most surface irrigation subprojects

will include rehabilitation and upgrading of existing canals and where necessary slope stabilization works will be undertaken

Not likely – subprojects cover small command areas and where necessary crossing structures will be provided

Not likely – STW schemes will be located in areas with favorable groundwater conditions; only low capacity pumps will be installed

Not likely – subprojects are small-scale and communities will participate in the planning and design process

Not likely – subprojects are small-scale and where necessary cross-drainage structures will be provided

Not likely – subprojects are small and where necessary passage structures will be provided

Not likely – canal discharges are small and designs will be checked by professional engineers

Problems Related to Construction Stage Landslide and erosion control Work safety and accidents Disturbance to wildlife Protection of existing trees Storage and disposal of construction material

Minimal impact as construction works are mostly simple and small-scale; the contract documents will have appropriate clauses to mitigate these small impacts, and Government staff and consultants will supervise construction

Problems Resulting from Projects Operations Water-borne diseases Downstream water quality impacts due to

increased use of pesticides and fertilizers Impacts on water use for domestic

consumption or aquaculture.

Minimal impact – any storage ponds built will

be small Minimal – the agriculture support program will

train farmers in the appropriate use of pesticides and IPM; the majority of the farmers will be poor and as such may not use pesticides; the use of organic fertilizers will be promoted

Not likely – the subprojects will be designed with full participation by the beneficiaries and their priorities will be reflected in the design

16. The matrix table on type of scheme, subset of potential impacts and mitigation measures with recommendation for subproject categorization (and corresponding requirement for preparation of initial environmental examination, IEE, or environmental due diligence, EDD, report) is presented in following table 2.

Table 2. Type of scheme, impacts, mitigation measures and required environmental assessment

Type of scheme Potential impact Mitigation measures Type of assessment required



68

Type of scheme Potential impact Mitigation measures Type of assessment required

Surface scheme in hills and mountains (10-25 ha)

Landslide along canal alignment, erosion, spoil and construction material storage, cutting of trees.

Bio-engineering, managed spoil and construction materials, spread excess top soil on field, compensatory plantation.

Minimal impact – schemes will be category C EDD report required

Surface schemes in Terai (< 200 ha)

Bank cutting, flood and drainage problem, spoil and construction material storage.

Bank protection, adequate drainage structures, managed spoil and construction material, spread excess top soil on field.

Minimal impact - Schemes will be category C; EDD report required

Groundwater in terai with STW clusters; no project financing for installation of STWs

Potential arsenic contamination

Area will be tested for arsenic

Scheme will be category C; EDD report required

Micro irrigation systems

No impacts envisaged

Not needed Scheme will be category C; EDD report required

E. ENVIRONMENTAL ASSESSMENT OF THE PILOT SUBPROJECTS

17. The environmental assessment report of the pilot subprojects is presented in Annex 1 of Supplementary Appendix H/1 Volume 2 of this report. F. RATIONALE FOR ENVIRONMENTAL CATEGORY OF SUBPROJECTS

18. The findings of the environmental assessment indicate that the proposed activities under the subprojects appear to have insignificant impacts on the environment and vice versa.

a. GON‘s Environmental Assessment Requirement

19. IEE is necessary only for new irrigation schemes covering more than 200 – 2000 hectares in the Terai; 25 - 200 hectares in the hills and in the sloping terraces and mountainous regions. One of the main criteria for selecting the subprojects in CIP will be the small irrigation schemes irrigating less than 25ha in the hills and 200ha in the Terai. These criteria render it free from the legal obligation of carrying out an Initial Environmental Examination (IEE). Thus requirements of GoN will not apply in the Project.

b. ADB‘s Environmental Categorization

20. The Rapid Environmental Assessments (REAs) carried out for the pilot subprojects have indicated that they are unlikely to have any significant adverse environmental impacts in the subproject area. On the contrary, the positive impacts of the subprojects due to saving of trees required seasonally to divert water by constructing semi-permanent intake structures; stabilization of slopes; prevention of seepage and under scouring by canals; improvement of structures like cross drainages, canal crossing structures and strengthening the overall environmental sustainability of the subproject area will outweigh any minimal adverse impacts due to the subproject implementation.



69

21. The para 50 (iii) of the ADB‘s Safeguard Policy Statement, 2009 quotes that "a proposed project is classified as category C if it is likely to have minimal or no adverse environmental impacts. No environmental assessment is required although environmental implications need to be reviewed". However, there will be new surface water schemes, particularly in terai that which may require IEE study. In this regard, the CIP as a whole is classified as environment 'Category B', with most subprojects being classified as Category C. Environmental Due Diligence (EDD) reports shall be prepared for Category C subprojects, and Initial Environmental Examination (IEE) prepared for Category B subprojects. G. ENVIRONMENTAL ASSESSMENT PROCEDURE

22. The environmental assessment procedure for the subprojects shall follow the followings:

a. Environmental Screening

23. The environmental screening of the subprojects shall be done by using the Rapid Environmental Assessment (REA) checklist (The REA checklist is included as Annex 2 of Supplementary Appendix H Volume 2 of this report). The REA checklist shall be filled during the joint walkthrough survey of the proposed subproject. The findings of the environmental screening will conclude if an IEE is required or a brief environmental statement in the form of Due Diligence Report (DDR) will be adequate for the subproject.

b. Process for Environmental Due Diligence (EDD) report

24. The EDD report will be a brief environmental statement of the subproject with only significant impacts, if any. The report shall be prepared by adopting following procedure:

Collection of information: Coordination shall be maintained with the social and technical team for collection of field information, where documenting site-specific and significant environmental concerns will be documented. If required, information from related stakeholders will also be collected (community forest user groups, upstream / downstream water users groups etc.).

Preparation of EDD report: The information on physical, biological and socio-economic and cultural environment of the subproject area will be compiled in coordination with the technical and social team. The EDD report shall be prepared with REA checklist added with any site-specific and significant environmental impacts. The proposed template for the EDD report is presented in the following table 3:

Table 3. Proposed template of EDD report

1. Introduction

(brief on the subproject)

2. Existing Environmental

(a table of salient feature covering physical, biological and socio-economic environment)

3. Areas of major concern and mitigation measure

(REA checklist followed by a list of significant and site-specific environmental impacts, if any, and the proposed mitigation measures for them. Example of significant impacts could be: erosion, & landslide directly affecting the irrigation intake and canal system; downhill erosion due to spillover effects; scour; drainage and flooding; cutting of trees and disturbance to wildlife; air, noise and water pollution during construction; storage and disposal of construction material; work safety).

4. Conclusion



70

c. Process to prepare Initial Environmental Examination (IEE)

25. There could be few subprojects classified Category B, for which IEE report will be prepared. The IEE process involves following:

a. Scoping: The IEE scoping is a planning exercise to determine the requirements for the IEE study. Scoping lists the likely environmental impacts, methodology of assessment, extent of the impacts, examine mitigation options, and the IEE study schedule. It also identified if additional experts in certain areas are particularly required for the study (geologist, fisheries expert, bio-engineer etc.).

b. Assessment Methods: An outline of the activities for conducting IEE study are presented below:14

(i) Desk Study: Review of information such as maps, reports, and EARF for

the Project. Checklist for collecting site information is also finalized. (ii) Consultations: Villagers and local stakeholders (community forest users

groups, U/S or D/S water users) can be consulted by means of Focus Group Discussions (FGD). If required, discussion with concerned government offices (soil and watershed conservation; forest; water supply) will also be undertaken.

(iii) Field Assessment: Assessment of the potential and significant environmental concerns shall be shall be conducted to collect data and analyze any potential impacts.

(iv) Sampling and Testing: Special tests may be necessary in certain cases where water pollution issues need to be investigated (some schemes may be close to factories that pollute the source river).

(v) Consideration of Alternatives: The environmental implications of different alternatives will be briefly assessed, particularly focusing on labor-intensive methods, source of construction materials, schedule of construction and type of scheme.

(vi) Identification of Environmental Impacts and Mitigation Measures: The impacts will be identified in terms of their significance, extent, reversibility, and duration. Table 4 below provides a non-exhaustive list of environmental impacts that are likely to be encountered in the types of subprojects under CIP and their mitigation measures.

Table 4. Potential impact and their mitigation measures

Potential Effect Mitigation Measure(s) Agencies responsible for planning and monitoring

Environmental impacts related to project location

Inadequate and inequitable water distribution

Training and support to WUAs in coordination of water use and practice of rotational water intake.

DDC in support by TSTs / CPMO

Erosion and landslides; scouring

Use of low cost bio-engineering techniques. TSTs in design; WUA/Contractor in implementation and DTO in monitoring.

Temporary increases in silt runoff/induced erosion

Erosion control by use of bioengineering; careful deposition of spoil and construction material.

TSTs in design; WUA/Contractor in implementation and DTO in monitoring.

14

The activities may be conducted during the feasibility field assessment.



71

Potential Effect Mitigation Measure(s) Agencies responsible for planning and monitoring

Temporary closure of irrigation systems

Consultation with beneficiaries WUA/Contractor in implementation and DTO in monitoring.

Use of diversion methods (pipe, canal) DTO supported by TSTs

Dust generation Expected to be minimal. WUA/Contractor in implementation and DTO in monitoring.

Noise generation Expected to be minimal. WUA/Contractor in implementation and DTO in monitoring.

Soil and water contamination due to increased use of agrochemicals including fertilizer and pesticides

Agriculture extension to include (i) optimumuse of mineral fertilizers, (ii) promotion of integrated pest management, (iii) emphatic discouragement of the use of persistent pesticides

DADO in implementation and monitoring.

Protection of flora and fauna

Compensatory plantation; restrict harassing or killing of wildlife.


Standing water and vector nuisance

Promotion of improved O&M of the schemes by WUAs


Awareness raising on hazards posed by standing water , provision for adequate drainage in the scheme design.

DTO in support by VBFTs

(vii) Design of Environmental Monitoring Plan: The IEE shall prepare EMP

where monitoring requirements for potential environmental impacts are identified, mitigation measures prepared, method of mitigation measure developed, indicators prepared, frequency of undertaking monitoring activity decided, and cost and responsible agency for undertaking the monitoring and implementing identified. Only significant impacts shall be addressed.

(viii) IEE Reporting: IEE report shall be prepared in brief following the

template presented in table 5.

Table 5 Outline of IEE report

I. Executive Summary

II. Project Description (with salient feature)

III. Description of Environment

Physical environment

Biological environment

Socio-economic and cultural environment

IV. Screening of Potential Environmental Impacts

V. Potential Environmental Impacts and Mitigation Measures

Beneficial impacts

Adverse impacts

VI. Analysis of Alternatives

VII. Institutional Arrangements

VIII. Environmental Management Plan



72

IX. Public Consultation and Disclosure

X. Findings and Recommendations

XI. Conclusion

H. CONSULTATION, INFORMATION DISCLOSURE, AND GRIEVANCE REDRESS

MECHANISM

26. A Grievance Redress Committee (GRC) will be set up for B Category subprojects to address all concerns and grievances of the local communities and affected parties. The GRC will comprise of representatives from local authorities, affected parties, and well-reputed persons from health, education sectors, as mutually agreed with the local authorities and APs. This committee will address the Project related grievances of the affected parties and will provide them a public forum to raise their concern or objections. The chief of the Environmental and Social Unit of DDC will represent IA in the GRC. The EA will be responsible to disseminate information about the functional norms of the GRC. The committee will meet as and when required.

27. The approach adopted for the Project ensures that all subprojects are community driven ensuring a very high level of public awareness and involvement at each stage. Procedures for public consultation and disclosure will be incorporated in subproject implementation guidelines prepared for the Project. The main elements incorporated into the process of the Project include (i) understanding the project during the planning phase, (ii) physical and financial contributions during the contribution phase, and (iii) taking ownership for operation, maintenance and management of the irrigation systems after construction.

28. Steps involved in public participation are (i) initial confirmation of genuine sub-project demand, (ii) participatory, comprehensive and accurate sub-project preparation, (iii) strong WUA organization, (iv) committed participation of the WUA in sub-project implementation, and (v) effective and transparent communication between supporting agencies and WUAs. I. INSTITUTIONAL ARRANGEMENT AND RESPONSIBILITIES

29. At the DOLIDAR at central level, a project coordination unit (PCU) will be set up with a full time Project Director. The Project Director will be responsible for overall environmental management, under technical support and guidance from PCU Support Unit (PSU). The Technical Support Team (TST) will conduct the environmental screening and preparation of IEE or DDR, as required. At the district level, the environmental desk of the DDCs shall be responsible for ensuring environmental compliance in the subprojects with periodic monitoring. The implementation of the EMP during sub-project works will be the responsibility of the WUA / Contractor, and monitored by the WUA construction monitoring committee supported by the Village Based Field Team (VBFTs). Specific institutional responsibilities and authorities during the sub-project implementation cycle are stipulated as below in table 6.



73

Table 6. Institutional responsibilities for environment management Subproject

Stage Responsible Organization Responsibilities

Overall Project Management Support Team

Support capacity development of environmental planning, monitoring, and management. Overall review and monitoring of environmental management activities of the project.

Environment Section, MoLD Guidance for environmental planning, periodic monitoring.

Environmental and Social Unit, DDC

Periodic environmental monitoring and evaluation; recommend corrective measures if any.

Screening DTO supported by Technical Support Team (TST)

Screen the subproject requests in light of environmental and social criteria.

Planning DTO supported by Technical Support Team and Field Team Coordinator (FTC)

Prepare IEE or EDD as required, minimize avoidable losses, incorporate mitigation measures, and prepare EMP.

DoLIDAR/PCU Endorse IEE report. Obtain approval from ADB. No approval is required for EDD reports.

Detailed Design

DTO supported by TSTs Integrate environment issues of IEE/EDD reports in design.

Construction WUA / Contractor Implement required environmental measures.

WUA and Environmental and Social Unit of DDC supported by VBFT

Supervise implementation of environmental measures.

Agriculture and social

support

DADO Implement specific environmental mitigation measures incorporated in the agriculture and social development programs.

J. MONITORING AND REPORTING

30. During the subproject Implementation, the DDC supported by the WUAs and TSTs/VBFTs will regularly monitor and document the status of environmental management in the sub-projects as per the requirements of the EARF, covering (i) compliance with environmental screening; (ii) compliance in the design with requirements in IEE / Environmental Due Diligence report; and (iii) compliance with the environmental management during construction. The significant issues, if any, will be solved at local level and included in the regular project progress report. K. STAFFING REQUIREMENTS AND BUDGET

31. DDCs staff will team-up with environment specialist of TSTs to undertake (i) environmental screening at sub-project identification stage; (ii) preparation of IEE / DDR at sub-project appraisal stage; and (iii) monitoring of mitigation measures and reporting during sub-project implementation stage. Environmental monitoring and mitigation will be undertaken by the WUAs / Contractors under monitoring of DDC in line with the responsibility matrix shown in Table 4 and 5. All staffing levels and costs shall be incorporated into plans for implementation arrangements and the project budget.


Appendix 11: Resettlement Framework

74

11. RESETTLEMENT FRAMEWORK 1. Project Objective and Type of Activity. The proposed Community Irrigation Project (CIP) aims to enhance farm incomes and reduce poverty through the development or improvement of small scale irrigation systems and complementary agriculture enhancement in poor areas of 12 Terai and hill districts. 2. Scale of activity and benefit. The project is estimated to support 300 or more subprojects (maximum 25ha in the hills and 200ha in the Terai) covering approximately 4,000ha in the hills and 11,300ha in the Terai benefiting at least 20,000 households. Schemes will include (i) rehabilitation of gravity schemes; (ii) pond/tank systems; (iii) pumped irrigation schemes; and (iv) shallow tubewells. Infrastructure will be built by users themselves wherever possible, and mostly on land already used for irrigation infrastructure or construction underground. 3. Scope. This framework covers small, community-led projects with no resettlement and where all land acquisition is voluntary. The selection criteria for a sub-project is that irrigation improvement is desired by a community whose members would voluntarily donate small parcels of their land for the irrigation enhancement, and by contributing land for the project they become primary beneficiaries of enhanced irrigation facility. 4. Safeguards. This Resettlement Framework has been prepared to ensure the sub-project selection criteria have been met, and to clearly identify the triggers, if any, for more comprehensive safeguards (i.e. a resettlement plan). A Due Diligence Report (DDR) will be the primary document to assess the social safeguards status of a proposed sub-project. A DDR would be required for each sub-project that requires new land, and the DDR of the sub-project will outline whether project selection criteria have been met, and will incorporate at a minimum the following:

(i) Verification and documentation that land required for the project is given voluntarily;

(ii) Verification that nobody will be impoverished by the land donation (more than 5% of total land holding donated will trigger livelihood restitution measures to be specified in a resettlement plan);

(iii) Verification that land donation will not displace tenants or bonded labour, if any, from the land;

(iv) Meaningful consultation has been conducted in good faith with all affected persons. Documented verification of the agreement of affected persons to the sub-project. Separate discussions to be held with women and minority groups as required to facilitate meaningful participation;

(v) Assurance that a community mechanism for sub-project implementation is operational and has a fair system of grievance redressal, as well as a system for project monitoring and reporting; and

(vi) Gender disaggregated socio-economic data for the sub-project area has been collected including at a minimum household size, caste/ethnicity, location within the area, land holding size, land type, crop yield per ha other important sources of income (maximum 2 pages and around 4 tables of data).

5. Due Diligence Report (DDR). Each DDR need not be more than four pages with supporting documents (verification records, socio-economic survey) as appendices. 6. Resettlement Plan. If any of the resettlement-related project criteria are not met the sub-project will be dropped. For this reason a Resettlement Plan will never be necessary under the CIP.


Appendix 12: Indigenous Peoples Planning Framework

75

12. INDIGENOUS PEOPLES PLANNING FRAMEWORK A. The Program, Background and Context

1. The Program

1. The Community Irrigation Project (the Project) aims to benefit small scale irrigation

sub-projects targeted to marginal and poor farmers having less than 0.5 to 1 hectare land

holdings. It will ensure proportionate participation and benefit for women and socially

excluded caste and ethnic groups. The project will form and strengthen the water users

associations (WUAs), facilitate micro credit schemes for poor farmers, and provide

agricultural extension with market linkages. The project will have components for irrigation

construction, agricultural services, capacity building that can address the issues of poor and

vulnerable groups. The potential irrigation schemes for this project include (i) rehabilitation

and upgrading of traditional surface irrigation and development and upgrading of irrigation

schemes incorporating water storage where water supplies are limited, (ii) developing lift

irrigation schemes on rivers, (iii) providing groundwater irrigation systems in the Terai, and

(iv) promoting non-conventional micro-scale irrigation for high value crops in areas short of

water. The project will be implemented by a decentralized structure under DDCs with a

management structure that includes district and central government line agencies, NGOs

and the private sector.

2. This Indigenous Peoples Framework (IPF) provides policy, strategy, process and

procedures to understand project impacts on IPs and prepare relevant strategies in full

compliance with Government of Nepal (Government) and ADB Safeguard Policies for the

implementation of sub-projects. Moreover, it ensures that there are no adverse effects on

IPs, that interventions are designed with greatest possible reduction of poverty among IPs

and that the concerns of IPs are integrated in each cycle of the project.

2. Indigenous Peoples/Ethnic Minorities (IP/EM) in Nepal

Table 1: Poverty Incidence by Caste and Ethnicity in Nepal

3. Nepal‘s complex social structure

makes it challenging to define IPs in Nepal. Nepal is a multi-ethnic, multi-lingual, multi-

religious and, multi-cultural country, dominated by Hindu caste groups (Brahmin-Chhetri).



76

The 2001 census has identified 100 different social groups in the country with over 92

languages and a mix of Hindu, Buddhist, Kirat, Animism, Christian and Muslim religions. The

2001 Census reports 8.4 million populations of 43 ethnic nationalities. The IPs are known as

adivasi or IP in the Nepalese context. Some of the key characteristics of IPs are defined as:

distinct collective identity; own language, religion, tradition, and culture; own traditional

relatively egalitarian social structure; traditional homeland and geographical area; written or

oral history that traces their line of descent back to the occupants of territories before they

were integrated in to Nepal within the present Nepali frontiers.

4. Based on these characteristics, the National Foundation of Indigenous Nationalities

(NFDIN), a Government founded institution, has recognized 59 different nationalities as

indigenous peoples/ethnic groups of Nepal who comprise about 37.2% of the country's

population of over 25 million. The majority of these indigenous peoples are socially,

economically, politically and educationally marginalized. The Human Development Index

shows considerable disparities among various nationalities/ethnicities and castes and

communities, which in some cases are still widening as can be seen in Table 1 above (CBS

National Living Standard Survey data comparing 1995/96 with 2003/04).

5. Indigenous people in Nepal are a very heterogeneous group and in the context of this

project and framework it is important to distinguish the vulnerable and poor IP from the

others. The NFDIN-affiliated National Federation of Indigenous Nationalities (NEFIN) has

classified IP into five different categories based on socio economic variables that include

literacy, housing, occupation, language, area of residence and population size. This is given

in the following table (Table 2). The project has followed this categorization, distinguishing

between impacts on the different categories of IPs. The sub-project selection criteria for CIP

screens out areas where impacts would be felt by IPs in the Endangered category.

Table 2: Indigenous People and their Level of Marginalization

Region Endangered Highly Marginalized

Marginalized Disadvantaged Advantaged

Mountain --

Shiyar, Shingsawa (Lhomi), Thudam

Bhote, Dolpo, Larke, Lhopa, Mugali, Topkegola, Walung

Bara Gaunle, Byansi (Sauka), Chhairotan, Marphali Thakali, Sherpa, Tangbe, Tingaule Thakali

Thakali

Hill Bankariya, Hayu, Kusbadiya, Kusunda, Lepcha, Surel

Baramu, Thami (Thangmi), Chepang

Bhujel, Dura, Pahari, Phree, Sunuwar, Tamang

Chhantyal, Gurung(Tamu), Jirel, Limbu (Yakthung), Magar, Rai, Yakkha, Hyolmo

Newar

Inner Terai

Raji, Raute Bote, Danuwar, Majhi

Darai, Kumal -------- -------

Terai Kisan, Meche (Bodo)

Dhanuk(Rajbansi), Jhangad, Santhal(Satar)

Dhimal, Gangai, Rajbanshi, Tajpuriya, Tharu

--------- --------

Total Number

10 12 20 15 2

(Source: NEFIN)

6. Advantaged IP, i.e. the Newar (5.5%) and Thakali (0.1%), have sizeable trade

communities and presence in the towns resulting in economic clout and integration in the

power structures of the country. Their status, interests and issues, notably those of the

Newar, are often quite similar to those of the dominant Hindu castes. No special

assessments or measures are required for this category.



77

7. Disadvantaged IP include major ethnic groups like the Magar (7.1%), Rai (2.8%),

Gurung (2.4%), Limbu (1.6%) and Sherpa (0.7%). Most of these hill and mountain groups

tended to have in the distant past animal husbandry-based livelihoods, but over the

centuries crop farming has become more important. They gradually integrated with the

Hindu caste outsiders that entered the hills often with support of kings and armies and

became the dominant community in their areas. At present most are marginal farmers with

low socio-economic status, and low levels of literacy and access to services and

opportunities. Some groups have raised their social or economic status through tourism

(Sherpa), service in foreign armies (Magar, Rai, Gurung, Limbu) and migration. In mixed

societies their participation in organizations and decision making structures tends to be low.

The project will address barriers to participation through a Consultation and Participation

(C&P) plan.

8. Marginalized IP include two major ethnic groups, the Tamang (5.6%) in the hills and

the Tharu (6.8%) in the Terai, and several minor groups. Compared to the disadvantaged

group category, these groups did not have opportunities like service in foreign armies and

other services, while the minor groups are extra disadvantaged because of their small

numbers and subsequent under-representation in decision making and sharing of

development benefits. Their literacy and other social development indicators are generally

low, and even today many in these groups are in subservient relationships with their

dominant patron neighbors, who through their linkages to rulers, economic status and higher

education levels, dominate these groups. Many Tharu, who lived in bonded labour on land

they previously owned, have been freed, and now live as freed Kamaiya on small plots of

government-donated or illegally occupied land in town neighborhoods and forests and

depend on the available on farm and off farm labour. The project will address any barriers to

participation through a Consultation and Participation (C&P) plan.

9. Highly marginalized and endangered IP concerns groups that are either very small in

size (e.g. Lepcha and Meche) or are small in size and live far away from any town and did

not integrate with the larger society through e.g. schooling and service (e.g. Raute,

Chepang). All these groups have problems in maintaining their language and their cultural

identity as they are too few in numbers or have to give up essential elements of their lives in

order to benefit from educational, health and development services. More than 90 % of the

population of this group live in rural areas and their economy is based on agriculture or in the

case of Rautes on hunting and gathering. The sub-project selection criteria will screen out

subprojects in areas where endangered IPs live. Participation barriers of highly marginalized

IPs will be addressed through the Consultation and Participation (C&P) plan.

3. Relevant Legal Framework 10. The legal framework for this Indigenous Peoples Framework is based on the Interim

Constitution of Nepal, the Three Year Interim Plan (2007-2010), sections of the NFDIN Act

2002, National Human Rights Action Plan 2005, Environmental Act 1997, Forest Act 1993

and Community Forestry Guideline; and the ADB Indigenous People's Policy (1998) and

ADB Safeguards Policy Statement (2009).

4. Key Positive and Negative Project Impacts on IP

11. Impacts on IPs, whether positive or negative, are generally not different from those

on others with the same socio-economic status and land size, like Dalits or poor Chhetris,

because most IPs do not have different types of livelihoods from those other groups. This



78

has been verified by preparation of the first three sample sub-projects in Patana, Budhi and

Majkot, which had respectively 69%, 24% and 79% disadvantaged groups including Dalits

and IPs. Inclusion of IPs in the sub-projects is expected to be high, as the project targets

geographically marginal rural areas where IPs dominate in terms of community population.

The sub-projects are also community-driven, that is, a sub-project will not be prepared

unless it has been requested by the community, and it meets screening criteria which

includes a requirement that the community is able to form a community mechanism for sub-

project implementation which has a fair system of grievance redressal, as well as a system

for project monitoring and reporting (CIP Resettlement Framework).

12. The project will improve for all beneficiaries, including IPs, the access to irrigation,

increase yields and agricultural productivity, and improve food security, incomes and

livelihoods.

13. IPs are not expected to be affected seriously or at all by the project whether it is

through loss of livelihoods, displacement or impacts on their social and cultural identity. The

feasibility study raised the following impacts that might be IP specific, which were addressed

through changes to project design or introduction of relevant safeguards:

(i) Traditional rights to water sources. Rights are generally not formalized, but

villages normally recognize traditionally held water rights by the various

communities in their area. It is however possible that seemingly underused water

sources are tapped for a subproject on which unknowingly downstream IP

communities depend. Once a subproject is built, the beneficiaries, if from a more

dominant caste or ethnic group will probably be able to impose their new rights on

the downstream IP communities. Sub-project selection criteria screens out any

water resources which are the subject of an on-going dispute, and assures no

negative downstream impacts.

(ii) Traditional rights to land and forest resources. Especially vulnerable IP like

Raute or Chepang depend for livelihoods on forests. An irrigation canal might cross

those forests thereby increasing access and competition for forest produce from

other groups or it might enable other groups to convert forest land to irrigated land.

Selection criteria screens out such sub-projects on environmental grounds.

(iii) Benefit gap. Compared to dominant caste groups, IPs generally have less

land, are poorer, less aware and educated and have less access to services and

opportunities. As a result IPs will be less able to benefit from any development

intervention than the advantaged groups. This issue is basically a socio-economic

issue that will be dealt with in the C&P plan.

14. All these concerns are very similar to those of non-indigenous vulnerable groups,

notably Dalits, other ultra poor and to less extent women. As such the ensuing project is

therefore not expected to impact indigenous peoples differently than those other vulnerable

groups, and issues of gender, land acquisition and participation can be dealt with under the

project Gender, RF and C&P plans. Each subproject will be screened against the sub-project

selection criteria once it is nominated by the beneficiaries themselves. This process ensures

that no IP plans or specific actions will be required for any sub-project.

5. Objectives of the Indigenous Peoples Framework



79

15. The IPF is prepared to guide the preparation of sub-projects under the Project to

ensure equitable distribution of project benefits for and promote development of the IP/EM

along with other disadvantaged groups. The IPF is developed based on GoN national

policies/strategies as well as ADB‘s Indigenous Peoples Policy, and utilizing the findings of

the project feasibility study (PPTA). The principal objectives of the IPF are to:

(i) Ensure the participation of the affected IPs in the entire process of preparation, implementation, and monitoring of project activities; (ii) Ensure that project benefits will accrue to IPs, and any adverse impact will be mitigated; (iii) Define the institutional arrangement for screening, planning and implementation of the IP framework for sub-projects; and (iv) Outline the monitoring and evaluation process.

B. Strategy for IP/EM Participation and Realization of Benefits

1. Enhancing Participation

16. Once a community has proposed themselves for a CIP subproject, the Field Team

Coordinator and Village-Based Field Team (along with technical specialists related to

irrigation and agriculture) will visit the community and collect, along with technical data, basic

socio-economic data of the potential project beneficiaries. During this process they will flag

any households who may find it more difficult to meaningfully participate relative to local

elites. The project Consultation and Participation Plan outlines additional activities for these

households, who may be IPs, including coaching and social preparation, to enhance

participation.

2. Screening for Negative Impacts and Ensuring Benefits

17. During project reconnaissance by the VBFT and the FTC, initial screening against

the sub-project criteria will be undertaken. The sub-project screening criteria have been

designed to screen out any potential sub-project with potential for IP issues, as discussed in

Section 4 above.

3. Institutional Arrangement

18. Ultimately IP issues and activities, along with other project safeguards which are

inter-related, including capacity building to enhance outcomes for IPs, will be the

responsibility of the Social Development Specialist in the Project Coordination Unit under the

DOLIDAR Executing Agency. The SDS will plan for and train district level implementation

staff (FTCs) in implementation modalities, provide the necessary checklists and design

participation measures. VBFTs will undertake sub-project screening under the management

of FTCs. IP participation enhancement activities will be carried out by VBFTs.

4. Monitoring and Evaluation

19. The SDS will work together with the PCU Benefit Monitoring and Evaluation (BME)

Specialist to design the M&E tools and programme in order to capture project impacts on all

categories of stakeholders. The results of BME reviews will be captured in quarterly reports

as well as specialized BME reports. The BME process will take in consultations with other

relevant organizations as well as feedback from stakeholders themselves, such as general

bodies at district, VDC and subproject level indigenous people issues: e.g. WUA, CBOs,



80

NGOs, VDCs, NEFIN's district representatives and District Coordination Committee of

Indigenous People at DDCs. VDC and subproject data will be complemented by secondary

sources such as VDC profiles and CBS data for the project areas. For specialized BME

studies, the Indigenous People Empowerment Project Report, District Development Profile,

VDC and Ward level information will be consulted, and meetings will be held with leaders

and NGOs/CBOs representing causes of IPs to assess issues, impacts and options.


Appendix 13: Capacity Development Plan

81

13. CAPACITY DEVELOPMENT PLAN

A. Introduction

1. DOLIDAR is implementing an institutional strengthening action plan through assistance of ADB and the World Bank. The CIP capacity development plan is in support of the action plan and will build capacity of (i) local bodies to transparently target project benefits to disadvantaged groups according to sub project selection criteria; (ii) WUAs and individual irrigation farmers to sustainably maintain their irrigation systems and adopt improved irrigated agronomy practices and; (iii) district engineers and agriculture managers to develop small irrigation and sustain infrastructure and agricultural productivity. In the process, the capacity of the executing agency will be built to participate in small irrigation development at the national level and to implement time bound decentralized public development programs in small irrigation.

2. The project implementation arrangements and process have a pronounced mentoring perspective on all levels. In addition the project will provide (i) agriculture trainings and associated demonstrations; (ii) trainings for district engineers and agriculture staff; (iii) WUA and social development trainings and (iv) training for participating microfinance institutions. Project orientation and planning workshops will also be conducted. Follow-up activities (such as clarifying specific issues, answering questions, solving problems showing up during implementation, and assessment of the quality of the training as perceived by the beneficiaries) will be an integral part of any training provided.

B. Agriculture Trainings and Associated Demonstrations

3. Training will be provided on demand, i.e. targeting the specific problems the beneficiaries face, and will have to be provided timely, i.e. when farmers encounter problems and need the advice. All training shall be practical (i.e. in the field), including demonstrations and farmer-led experimentation, or visits to other relevant schemes or farmers. 2

4. Short-duration farmer field training. Groups of 20-25 farmers within a subproject scheme are trained in specific subjects. Demand for training (subjects and number of farmers interested) is discussed upon selection of the subproject, and a respective training plan is elaborated. Trainings are conducted in the field and may include demonstrations, experimentation, and visits to relevant farmers or sites. Trainings during the "implementation phase" (during construction of the irrigation infrastructure) will normally be of the short-duration type. Short-duration farmer field training will usually be carried out as two half-day trainings (since -particularly women- farmers generally cannot devote an entire day to training), whereby flexibility should allow accommodating shorter (half-day or dinner cum training) or longer (up to two days) trainings as well. Short-duration trainings will be complemented by follow-up through the Field Teams and/or longer-term training activities such as Farmer Field Schools.

5. Topics for short-duration trainings may include: Production and use of organic fertilizers; Community-based seed production; On-farm water management (e.g. micro irrigation); Variety and seed selection; Planting time and planting arrangements (including intercropping etc.); Vegetable nursery management; Crop rotations for soil fertility and pest/disease management; Record keeping; Negotiation and bargaining skills; Quality standards and food safety, grading and packing, safe transport; Value adding at community level.

6. Longer-duration training throughout crop growing cycle. Farmer Field Schools (FFS) are particularly suited for capacity building in crop-specific husbandry practices, e.g. for newly introduced crops such as vegetables. FFS take place over the entire growing cycle



82

of a specific crop whereby a group of farmers regularly meets (together with a facilitator) and learns from observations in the field where usually two ways of cropping are compared. FFS don't necessarily have to be restricted to one aspect such as IPM (integrated pest management) but can rather embrace whole-crop management (including e.g. on-farm water management) in order to increase efficiency. FFS are particularly suited when new crops are introduced in farming systems, or for crops where farmers regularly face problems. The FFS approach forms part of the agricultural extension strategy under Nepal's national development plan for 2003-2007 (MoAC 2007). Longer-duration training has not necessarily to be in the strict form of FFS but may be implemented as a continuous training/follow-up over a growing period.

7. Training of trainers (ToT). Since CIP Field Teams will generally not consist of agricultural specialists with higher education, training for Field Team members will be required for sound support to farmers. ToTs will be carried out at district level (either at district headquarters or in a particular scheme), covering the specific training topics farmers' groups in the different schemes within the district have ranked highest in priority. Thus, the number of ToTs will usually be somewhat higher than the trainings carried out in a specific scheme, and will include at least one training on social mobilization and facilitation approaches and tools. Since Field Team members will often have to travel considerable distances to the location where a ToT takes place, ToTs will generally last for three to five days. Resource persons for ToTs may include CIP Irrigation Agronomists and/or external experts (from GOs such as DADOs, research, NGOs or other projects) as required/appropriate. Adapted training material/handouts will be provided for Field Team members as well as for farmers.

8. Although CIP support will primarily target selected subproject schemes, extension and agricultural support activities should aim at reaching as many farmers as possible. Decentralized extension approaches through NGOs and/or leader farmers (farmer-to-farmer extension) have proven successful in expanding the reach of the resource-poor governmental extension system). Realizing that no single agency is able to offer the whole range of services required by farmers, the Nepal Agricultural Extension Strategy 2007 foresees that public sector extension services will work hand in hand with the private sector, NGOs and CBOs. The CIP will therefore invite selected staff of NGOs and/or GOs (e.g. DADOs) and experienced leader farmers to the ToTs of Field Teams in view of making CIP ToTs more effective by reaching beyond its target schemes.

C. WUA Development Trainings

9. Long term mentoring by Village Based Field Team: WUAs and irrigation communities will need support i) to transform existing functioning community organization, for compatible interaction with public programs, into formal WUA entities that are genuine and do not violate the functionality of the informal process; ii) to institute, over and above the regular labor contributions for the O&M, an annual water user charge which is allowed to accumulate as savings in a local micro finance institution for future infrastructure rehabilitation; iii) during civil works execution technical guidance on work scheduling and submission of running bills after completion of stages of construction to the Public Engineer.

10. Management Training: In addition to the long term mentoring by Village Based Field Teams (VBFT), during feasibility detailed design, construction and post construction the WUAs will be provided management trainings through the National Federation of Irrigation Water Users Association, Nepal (NFIWUAN). NIFIWUAN is providing similar training for other projects.

11. A two-day training module will be used by NFIWUAN to include i) drafting of the constitution, registration, and record keeping; ii) internal resource mobilization and fund



83

raising and iii) share system development, dispute resolution and the public auditing process. Training will be organized at respective project district headquarters in four batches, corresponding to the sub project construction batches. Three members from each WUA, of whom at least one will be a woman, will participate. Office holding members of respective NFIWUAN district chapters, and VBFTs will also participate.

12. Construction skills training in gabion tying and masonry and other techniques to handle concrete, if feasible, will be imparted to WUA members. These skills will not only contribute to the sustainability of the irrigation infrastructure of sub projects but also enhance the employability and income generation potential of the trainees.

D. Supplementary Training Support for Disadvantaged Groups

13. The project targets primarily marginal and small farmers (<1ha in terai and 0.5ha in the hills) who will form at least 60% of all beneficiaries. Proportions of socially excluded groups will be higher than the averages for each concerned project district. The poor primary target group faces considerable obstacles to participation and benefit in the form of resource poverty, remoteness, social exclusion, domination by large and medium farmers, lack of education, exposure and access to services and markets, and consequently low absorption capacities regarding new development opportunities. Most of these obstacles count in equal measure for women. To make their participation effective and beneficial, the target group requires extra capacity building prior to participation in trainings, WUAs and decision making processes. For more equitable benefit distribution, the poorest groups will require technologies and trainings tailored to their constraints to maximize benefits to levels comparable to the less poor in the system. For them the project will supplement its training and capacity building with: i) coaching for effective participation; and ii) linkages to third party programs that may be relevant to their needs.

E. District Engineers and Agriculture Staff Training

14. District Irrigation Engineers to be posted under the project in the Irrigation and other Infrastructure section of the DTO and field design engineers from the Technical Support Team will receive training and refresher courses in small irrigation infrastructure design and O&M at a local training institution.

15. District Agriculture Development Officers (DADOs) are increasingly finding the need to build partnerships with the private sector, non government organizations, and related projects to further the agriculture development goals of their respective districts and meet the needs of farmers. DADOs of participating Districts will participate in a specially designed management course at a local training institution on ― Working in Partnership for Agriculture Development‖.

F. Microfinance Support Training

16. The project will support capacity enhancement of Microfinance Institutions (MFIs), where competent MFIs are not currently active in its selected project areas. Focus will be on local cooperatives. The training will be conducted through Rural Microfinance Development Center (RMDC) implementation partners for provision of micro finance to the project‘s beneficiary farmers. Recently RMDC has initiated promotional activities for the expansion of microfinance program in hills and remote areas. Need assessment will be done before finalizing any training. The selection criteria and management of training will be performed by RMDC so that after training participating MFIs within project districts become eligible for loans from RMDC.

17. Training Plan: The capacity building of MFI will start with the selection of MFIs. The



84

second step will be residential learning visits to successful MFIs. At the end of the first year, training on microfinance management will be organized in three groups separately i) Loan officers ii) Branch managers and iii) Board of directors. In the second year, training for account management and portfolio management will be organized. In the third year, training on financial management and business plan will be organized. Group leader‘s workshop will be organized in second quarter of the fourth year. From the fourth year onwards supervision, monitoring and necessary refresher training will be organized by apex wholesale lending organization on its own cost.

G. Strengthening Targeted Poverty Planning and Transparent Scheme Selection Capacity

18. Project orientation and planning workshops will be held in participating districts. An information dissemination plan on CIP objectives, approach, process, selection criteria and scope will be developed and require materials designed and produced for dissemination to potential beneficiaries. District stakeholders meetings will serve as a start-up and planning meetings. Project teams will visit each ward in the selected target areas and disseminate information and announce the schedule of subproject selection meetings at the VDC. VDC level workshops/ planning meetings will be conducted with representation from wards and citizens groups to arrive at shortlists for prefeasibility reconnaissance.

H. DOLIDAR Capacity Building for Small Irrigation Development

66. Skill up-gradation training for all DTO overseers and sub-overseers in the participating districts will be conducted under CIP to enhance capacity in rural infrastructure quality monitoring and assurance and engineering risk mitigation for natural disaster. These trainings will be offered in the district headquarters.

67. Study tours to observe decentralized implementation of small irrigation programs in other countries in the region will be arranged for two batches of 12 DOLIDAR Engineers.


Appendix 14: Subproject Selection Criteria and Implementation Process

85

14. SUBPROJECT SELECTION AND IMPLEMENTATION PROCESS

A. Selection Criteria

1. A subproject to be eligible for project funding in pre selected poor VDCs and Ilakas of participating districts will have to be less than 25 ha but more than 5ha in the hills and less than 200 ha but more than 40 ha in tarai. Subprojects in the hills with less than 5 ha will only be eligible if they have at least 25 households farming.

2. The subproject will not be located in a national park or buffer zone, or in the habitat of the threatened Raute and Raji IP; nor will it work where any involuntary resettlement is required or where rights to the water source are under dispute in any way.

3. 60% of the households owning land in the command area must own less than 0.5 ha in the hills and less than 1 ha in tarai. If there are any households that own more than 2.5 ha in the case of the hills or 5 ha in the case of terai, for the subproject to be eligible, these holdings should not exceed more than 25% of the command area.

4. Basic technical and economic feasibility conditions specified in relevant supplementary appendices will also need to be met.

B. Beneficiary Cost Share Arrangements

5. In addition the farmers must agree to share at least 7% of the total cost of the scheme in labor, cash, or kind, in accordance with the proposed cost share arrangement given in Table 1 below. This is relatively low in comparison to other programs but the farmers must in consideration of this low up-front contribution agree to annually collect a non- recurrent maintenance fee from the users, which will not be less than 5% of the total value of the external materials used in the system. This money will be saved in the WUAs own account for when replacement or rehabilitation becomes necessary over time or when there is damage due to flooding, earthquakes and landslides. In the first year this collection is made the project will match it 100% with an equivalent deposit in the WUA account.

6. The Irrigation Policy specifies beneficiary contributions ranging between 3% and 15% for various disaggregated elements of an irrigation system. However, beneficiaries with less than 0.5 ha only contribute, according to the policy, 10% to the tertiary canals and are not liable to contribute to the diversion weir, the main canal or the branch canal. Beneficiaries with less than 1 ha only contribute 5% to the branch canal and 10% to the tertiary canal. For small systems that concern CIP this turns out to be a very nominal portion of the projects total cost – less than 2% in the sample subprojects and does not meet the policy requirement of a cost share of at ―least 3% by the beneficiaries‖. Donor funded projects as the Swiss Local Infrastructure and Livelihoods Improvement Project requires a 15 % contribution. This is considered high by communities. Keeping in view both the poverty target of the project and to ensure a demand driven approach has led to the proposal of a 7% beneficiary contribution.

7. In case of shallow tube wells, where it is proposed the project will pay for the electrification costs it is also proposed that the beneficiaries will contribute 15% of the cost of boring and the pipe but will arrange the pump sets themselves. (See Table 1 below). The government of Nepal‘s policy on tube wells is that the entire cost will be borne by the farmers. However, in practice the drilling and pipes of shallow tube wells are being paid for in ongoing schemes. Senior planning and finance officials are vocal on the need to support small and poor farmers. Electrification is also being paid for but that is not considered a part of the tube well. Pumps sets continue to be financed by the beneficiaries themselves.



86

8. In order to control the quality of the drilling and pipe installation in shallow tube wells, the desire to help small and poor farmers notwithstanding, it is proposed that the project fund these but to ensure ownership require a 15% cost share from the beneficiaries.

9. The irrigation community will also be required to deposit an upfront NRs.140 per ha commitment fee in the DTO, before the feasibility and detail design can begin. Current practice of the Department of Irrigation is to take NRs 40 for a local fractional unit (bigha) of a hectare, which equals NRs 70 per ha. The proposal to double this is to establish a genuine demand.

Table 1 Beneficiary Cost Share S.N. Types of Schemes Beneficiary Contribution

1. Surface Irrigation Canal Section

Diversion Structure, Main Canal, Branch Canals ( at least 7% of total cost in Labor, Cash or Kind) Micro-irrigation field application equipment including in- field hose pipes, if any (100%)

2. Surface Water pond/Pipes System

Diversion Structure, Distribution Tank with main and lateral pipes and riser outlets (at least 7% of total cost in Labor, Cash or Kind) If micro-irrigation field application equipment is needed to convey water to fields, the cost of in-field hose pipes would be included as beneficiary contribution (toward the minimum 7%). Otherwise, farmer contribution for field application equipment is 100%.

3. Shallow Tube well Drilling well with pipes (15%)

Flexible hose pipes (100%)

Pump set with motor and internal wiring (100%)

Transmission line from Grids (0%)

C. Implementation Process

10. Although the construction is the central event, the sub project implementation process integrates i) scheme identification, ii) feasibility study and design, and iii) construction of infrastructure as an incremental process, to improve the irrigated agricultural enterprise of the beneficiaries consolidated during iv) a post construction phase. At the center of this process is the DDC supported by the DTO and the District Irrigation Engineer posted by DoLIDAR in each participating district. They will be supported by the Village Based Field Team (VBFT) which serves as a mentor for the WUA and a continuing interface between the irrigation community and the Project. The VBFT, comprising two local social mobilizer/technicians (at least one is a woman) and a sub overseer, is supported by the Technical Support Team (TST) with specialization in engineering design, irrigation agronomy and hydrogeology where it concerns groundwater. Subproject identification and implementation process is as follows in each district and will be coordinated by a Field Team Coordinator, proposed to have a degree in agriculture economics or management:

1. DDC Area Selection

11. Project districts will deliberate and decide in a full session of the DDC Council the 4 most poor and disadvantaged Ilaka or sub districts. Each district has disadvantaged group mappings which highlight the areas where the poor and the disadvantaged, the dalit, IP and muslims live. These will be supplemented by the project with Stunting and Income Poverty Incidence prevalence maps that are helpful in highlighting intra district differences. The TSTs will assist the DDCs in their decision-making by providing information on surface and groundwater irrigation development potential. For each district, the TSTs will collate any available information on surface water irrigation development or rehabilitation potential such as irrigation inventories, previous demands for small-scale irrigation schemes, and water use master plans. They will also prepare maps on groundwater development potential (aquifer formation and depth, water level contour, yield potential, and groundwater balance), areas of high arsenic contamination, and the existing electrification grid. The Council will rank the



87

identified 4 Ilaka according to poverty, which will determine the order of priority for the Project.

2. VDC Subproject Selection

12. The Project will focus its attention on the VDCs of the selected Ilaka. VDC council meetings will be scheduled with representation from all nine wards. The VBFT will disseminate information on the project and its selection criteria within all wards of the VDC and invite ward citizen -groups and irrigation communities to come with proposals for irrigation development to the scheduled VDC meeting. The VDC council meeting sessions on CIP will culminate in the endorsement by the VDC of a list of proposed irrigation subprojects (ISPs) that prima facia meet the projects selection criteria.

3. Prefeasibility Reconnaissance

13. A reconnaissance will be carried out in the proposed ISPs by the VBFT and the FTC, TST Design Engineer and Irrigation Agronomist and the District Irrigation Engineer representing the DTO. The focus of the reconnaissance will be a confirmation of the stated water source and land, and the genuineness of the proposal. The chances of the proposal not being genuine will be low, considering the proposals have been deliberated in a public meeting in competition with others. Additionally it will be necessary to assess the presence of an effective and functioning community organization, formal or informal, that will be responsible for the ISP as an indicator of sustainability. The absence of any major conflict within the community and any disputes relating to the water source with other communities will need to be confirmed. Selection criteria- land holding sizes, participation of the disadvantaged groups and number of households etc, will also be confirmed. The willingness to collect an annual contribution in addition to their regular maintenance to save for a non recurring maintenance fund for emergency repairs and future rehabilitation will also be assessed. If evidence of the above is not forthcoming at this stage the proposal will be dropped. If the project appears viable the WUA will be asked to deposit a nominal processing fee in the DTO account which will be refunded in case the project falls out for any reason.

4. Feasibility, Detail Design and WUA Agreement

14. Upon receiving proof of the deposit of a refundable processing fee in the DTO account by the WUA the Project team will initiate the detailed feasibility and design on the basis of a preliminary agreement with the WUA. While gathering base line socio-economic and agricultural data during this phase, site specific programming for the agricultural support component and gender and social inclusion activities will also begin in parallel. Due diligence will be exercised at this point verify and document that land required for the project is given voluntarily and to identify whether any volunteers of land have lost more than 5% of their land, in which case livelihood restitution measures will have to be specified in a resettlement plan. It will also need to be confirmed that no tenants or bonded labor have been displaced. The feasibility and detailed design will not last longer than six months (March to August) overlapping with the low water availability dry season and culminating with the monsoons. The detailed design will be characterised by a per hectare budgetary ceiling which is also the threshold of economic viability. Farmers in close collaboration with the design team will prioritize the structures to be rehabilitated.

15. A feasibility study and subproject implementation plan will be produced which includes the proposed infrastructure design, disaggregated socio-economic data, current and proposed cropping patterns and proposed agricultural enhancement activities, proposed social empowerment activities, microfinance activities, results of resettlement due diligence (if required), and a cost estimate.



88

16. For surface water schemes, the District Irrigation Engineer will consult with the WUA regarding its desire to perform construction works (procurement rules enable works up to the value of NRs 6 million to be executed by the user community itself), and assess the capacity of the WUA to perform all or part of the construction based on the complexity of the works. This assessment will be included in the feasibility report 15. The infrastructure improvement plan for shallow tubewell (STW) schemes would simply include the location of the STWs, feasible options for STW development, and plans for connectivity to the electrical grid, if any.

17. The feasibility and detailed design will be submitted to the District Feasibility Approval Committee (FAC) for approval. If the ISP is not feasible the commitment money will be released.

18. WUA Agreement. WUAs not formally registered will register under the Water Resources Act in the District. The registered WUA will sign an agreement with the DTO accepting essential conditions that relate to the provision of the required beneficiary share according to the CIP requirements, infrastructural sustainability, social and environmental due diligence, and integrity and anti corruption measures. The District Irrigation Engineer will facilitate agreement with the WUA for construction and divide the cost estimate and bill of quantities into works that will be performed by the WUA (both through voluntary contribution and payment for services), materials that will be procured or collected by both the WUA and/or DTO, and works to be performed by a private contractor through national competitive bidding (if any). The DTO will procure materials and prepare tender documents and manage the bidding process, where necessary.

19. Tender and Award. Where the WUA undertakes the works, a Memorandum of Agreement between the DTO and WUA will specify the scope, starting date, date of completion, payment terms, progress and quality review procedures, defect liability period and the responsibilities of the WUA and the DTO, including review, inspection, auditing, and payment procedure

20. For selected STW subprojects, the DDC will transfer funds from the DDF through an authorization (ikhtiari) to the relevant Ground Water Branch Office (GWBO). The Project TST and VBFT will conduct the feasibility and design of the scheme. GWBO will float tenders for i) electrification to and within the cluster, and ii) boring and pipe installation, through NCB or shopping. The WUA, supported by the VBFT and the TST hydro-geologist will participate in the tender award, in the inspection of materials, monitoring of the electrification and boring works, and signing of completion certificates.

5. Civil Works Implementation

21. Construction and allied activities will begin with the approval of the detailed design. The WUAs will receive written confirmation of this approval.

22. The WUA will form a special committee to monitor the construction works even if the WUA is executing the construction, in which case there will also be a construction management committee responsible for executing the works.

a. Construction Capacity Building

23. VBFT will provide guidance and highlight the factors that will have to be addressed by the WUA to meet the terms of the agreement and pass the quality scrutiny. VBFT will help the WUA build skills such as maintaining records and support documents, quality

15

If the civil works are above NRs 6 million the WUA may select defined portions of the works to execute itself up to the value of NRs 6 million and the remaining portion will be contracted out. However, this may be done only if it does not lead to the fragmentation of structures and the DTO considers it to be technically possible.



89

controls aspects such cement, gravel, sand ratios; properties of quality reinforcement and principals of rcc/pcc curing and gabion works.

b. Mobilization Advance

24. The WUA will be entitled to receive an advance to mobilize the works, as per government rules. This will be deposited in the WUA Account operated jointly by the WUA chairperson and other office bearers of the WUA. All withdrawals from this account by the will be supported by a note detailing the expenses for which the amounts are needed, supported if necessary by quotations, details of labour quantities, names of petty contractors etc. who need to be paid and subsequently payment vouchers supported by invoices and receipts. This will be part of the auditable record of the WUA.

c. Alignment and Pace of Work

25. It will be the responsibility of the District Irrigation Engineer as the Public Engineer‘s delegated specialist to provide the alignment on the ground for the civil works in stages and volumes that can be covered by the advance. The VBFT will actively assist both the WUA and the District Irrigation Engineer in this task.

d. Stage wise Progress and Running Bills

26. On completion of a work stage the VBFT will assist the WUA to prepare a running bill for submission to the DTO. The quality and quantity in the running bill will be verified by the District Irrigation Engineer and payment will be released offsetting the previous advance. A new advance will be released for the next work stage, and so on till completion of works. .

e. Public Audit

27. The WUA will present its accounts and details of the works accomplished in a transparent manner to the general body and other interested stakeholders in a public forum for which facilitation will be provided by the FTC. A clear statement of all receipts, all expenses, and savings will be made publically. The participants will be able to review books of accounts, measurement books, invoices for material purchases, labour used, and details of

28. contributions made by individual beneficiaries. .

f. Completion

29. Joint inspection by the WUA and the DTO of the entire works will be a condition for the payment of the final bill. Payment will be released on certification of satisfactory completion. This will only be issued after any identified defects and shortcomings have been rectified.

6. Irrigated Agriculture Development

a. Operation and Maintenance (O&M) and Water Management

30. 68. O&M Planning. For surface water schemes, the WUA, assisted by the District Irrigation Engineer, VBFT, and TST, will develop rules and regulations for O&M. The O&M plan will comprise operational aspects (corresponding to flow levels in different cropping seasons), a maintenance plan, and resources required and their mobilization.

31. 69. Water Management. The objectives of water management are to (i) equitably and adequately distribute water, (ii) increase water use efficiency, (iii) improve access from head to tail, and (iv) help the WUA to frame rules and regulations in a participatory manner for water allocation and distribution. The VBFTs will assist WUAs in on-farm water



90

management. Where appropriate, demonstrations in micro-irrigation application technologies (through manual flexible hoses, drip, or sprinklers) will be provided in subproject areas, and CIP will facilitate installation of micro-irrigation equipment, as requested by households within the subproject command area.

b. Agricultural Enhancement

32. Planning. Agricultural activities will be conducted throughout the subproject implementation cycle. At the feasibility stage, the VBFT (supported by the TST and the District Agriculture Office and its Agricultural Service Centers) will assess the present situation and determine farmer expectations. They will also compare proposed cropping patterns with food security requirements and market potential. The result will be a calculation of crop water requirements, and adjustments to proposed cropping patterns and yield expectations as necessary. The VBFT will summarize the findings and proposed requirements for agricultural support in the feasibility report. This will be reviewed by the District Agriculture Officer when the feasibility report is submitted to the FAC.16

33. Agricultural Support. Appropriate agricultural extension activities will be conducted in each subproject area based on the needs of the WUA. Extension activities will be managed and delivered in subproject areas by the VBFT and TST, with engagement of Department of Agriculture staff as resource persons and experts for training events. Women and DAG groups will be formed to address their specific agricultural needs. Training of trainers programs will be provided in such topics as input supply, crop variety and seed selection, soil preparation and fertility management, and on-farm water management. Other specific training programs may be conducted in crop husbandry (including pest and disease management), seed production and multiplication, and marketing.

16

The agricultural plans of the subprojects will be reflected in the district agricultural plan and monitored through the district annual progress report.


91

Sub project Identification, Selection and Implementation Process

DDC Area Selection DDC Council identifies with consensus the 4 most poor and disadvantaged Ilaka in the District for the Project to operate in

VDC Subproject Selection VDC Council with representation of all nine wards holds public meetings with ward citizen groups and irrigation community representatives to receive and endorse ISP proposals that prima facia meet Project selection criteria.

Feasibility and Detailed Design TST and VBFT collaborate with WUA to conduct a feasibility study and prepare a detailed design, exercising environmental and social safeguard due diligence.

Prefeasibility Reconnaissance Project Field Team confirms the existence of a perennial water source; existing cultivation; propensity to establish equitable water distribution; potential to work together; willingness to pay an upfront commitment fee and contribute yearly to a non-recurrent maintenance fund.

Civil Works Implementation Following FAC approval WUA starts construction under supervision of DTO as Public Engineer and support from VBFT Conversely a contractor under supervision of the DTO and the WUA supported by the VBFT

Irrigated Agriculture Development Institutional, technical and on

farm water management /agricultural capacity building,

(including gender and social inclusion specific support) of ISP

community/WUA, initiated at prefeasibility reconnaissance,

continues for at least two years after civil works completion

nepal: community irrigation project · irrigation systems, of which 50% are estimated to be in need...

Documents