Document of

The World Bank

FOR OFFICIAL USE ONLY

Repot No. 11870

PROJECT COMPLETION REPORT

EGYPT

IRRIGATION PUMPING STATIONS REHABILITATION PROJECT(LOAN 2270-EGT)

MAY 14, 1993

Agriculture Operations DivisionCountry Department IIMiddle East & North Africa Region

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

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CURRENCY EOUIVALENT(LE per US$)

GOE Fiscal Year Exchange Rate

1984-85 0.841985-86 0.841986-87 1.371987-88 1.541988-89 2.231989-90 2.561990-91 2.571991-92 3.301992-93 3.33

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

BCM Billion Cubic MeterERR Economic Rate of ReturnFAO/CP Food and Agriculture Organization/Cooperative ProgramFD Feddan (one fd equal to 1.037 acres)GDP Gross Domestic ProductICB International Competitive BiddingIDA International Development AssociationKwh Kilowatt hoursMALR Ministry of Agriculture and Land ReclamationMED Mechanical and Electric Department of MPWWRMPWWR Ministry of Public Works and Water ResourcesO&M Operation and MaintenanceUNDP United Nations Development Program

GOVERNMENT OF THE ARAB REPUBLIC OF EGYPTFISCAL YEAR

July 1 - June 30

FOR OFWCIAL USE ONLYTHE WORLD BANK

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

Office of Director-GeneralOperations Evaluation

May 14, 1993

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on EgyptIrrization Pumping Stations Rehabilitation Proiect (Ln. 2270-EGT)

Attached is the Project Completion Report on Egypt - Irrigation Pumping StationsRehabilitation Project (Ln. 2270-EGT) prepared by the Middle East and North AfricaRegional Office with Part II contributed by the Borrower.

The project was designed to replace, rehabilitate and repair irrigation and drainagepump stations, and to strengthen the operation and maintenance capabilities of theMinistry of Public Works and Water Resources. After early procurement and contractingdelays, the project was eventually satisfactorily completed over nine years compared withfive years originally planned. However, physical achievements were double those plannedbecause there were substantial dollar cost savings arising from exchange rate movementswhich the Bank agreed to use for further pump station investments. Institutionalobjectives were achieved with minor exceptions.

The PCR gives a comprehensive account of the project experience. This relativelysimple engineering project did not include any related policy conditionality which wouldhave made a satisfactory and sustainable project outstanding. No audit is planned.

Attachment

This document has a restricted distribution and may be used by recipients only In the performance of theirofficial duties. its contents may not otherwise be disclosed without World Bank authorization.

FOR OFFICIAL USE ONLY

PROJECT COMPLETION REPORT

EGYPT

IRRIGATION PUMPING STATIONS REHABILITATION PROJECT(Loan 2270-EGT)

Table of Contents

Page No.

PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . i

EVALUATION SUMMARY . . . . . . . . . . . . . . . . . . . . . iii-vi

PART I PROJECT REVIEW FROM BANK'S PERSPECTIVE . . . . . 1

Project Identity . . . . . . . . . . . . . . . . 1Background . . . . . . . . . . . . . . . . . . . 1Project Objectives and Description . . . . . . . 2Project Design and Organization . . . . . . . . . 3Project Implementation . . . . . . . . . . . . . 5Project Results . . . . . . . . . . . . . . . . . 8Project Sustainability . . . . . . . . . . . . . 9Bank Performance . . . . . . . . . . . . . . . . 10Borrower Performance . . . . . . . . . . . . . . 11Project Relationship . . . . . . . . . . . . . . 11Lessons Learned . . . . . . . . . . . . . . . . 11Project Documentation . . . . . . . . . . . . . . 12

PART II PROJECT REVIEW FROM BORROWER'S PERSPECTIVE. . . . 14

PART III SUMMARY STATISTICAL DATA . . . . . . . . . . . . 15

TabLe 1 Related Bank Loan and/or Credit . . . . . . . . . 15Table 2 Project Timetable . . . . . . . . . . . . . . . . 16Table 3 Cumulative Disbursement . . . . . . . . . . . . . 17Table 4 Project Implementation . . . . . . . . . . . . . 18Table 5 Project Cost and Financing . . . . . . . . . . . 19Table 6 Status of Covenant . . . . . . . . . . . . . . . 20Table 7 Use of Bank Resources . . . . . . . . . . . . . . 21Table 8 A. Stations' Specification and Type of Service. .

Received Under the Project . . . . . . . . 22B. Selected Station Power Consumption and Water .

Discharge Before and After the Project . 25C. Cropped Area, Production and Gross Economic

Revenue in Project Area . . . . . . . . . . 26D. Average Saving in Maintenance Cost for a . . .

Pumping Station . . . . . . . . . . . . . . 27E. Project Cost and Benefits. . . . . . . . . . . 28

MAP - IBRD No. 16122R

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

PROJECT COMPLETION REPORT

EGYPT

IRRIGATION PUMPING STATIONS REHABILITATION PROJECT

(Loan 2270-EGT)

PREFACE

1. This is the Project Completion Report (PCR) for the IrrigationPumping Stations Rehabilitation Project in Egypt, for which Loan 2270-EGT inthe amount of US$41.5 million was approved on April 26, 1983. The project'sscope was expanded more than three fold during Implementation, and the Loanwas closed on June 30,1992, two and half years behind schedule. Toaccommodate final disbursements, the loan accounts were kept open four monthsbeyond the closing date. The last disbursement was made on November 24, 1992and the undisbursed balance of $1.02 million (2.5% of the loan amount) wascancelled.

2. The PCR was prepared by the Agriculture Operations Division of theCountry Department II, Middle East and North Africa Region (Preface,Evaluation Summary, Part I and III)1/, and a draft copy of these two parts wassubmitted to the borrower. The borrower endorsed the report and conveyedtheir comments to the Bank (Part II). Preparation of the PCR is based on thefindings of a PCR mission and on the Staff Appraisal Report, the LoanAgreement, supervision reports, correspondence between the Bank and theBorrower, and internal Bank memoranda.

)/ The Task Manager for the report is Mr. Nejdet Al-Salihi, IrrigationEngineer, MN2AG. The report was prepared by Mr. Mohammad Usman,Consultant, MN2AG.

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PROJECT COMPLETION REPORT

EGYPT

IRRIGATION PUMPING STATIONS REHABILITATION PROJECT(Loan 2270-EGT)

EVALUATION SUMMARY

Introduction

1. Agriculture is important in Egypt's economy, providing about 20%of GDP and merchandise export, and employing 35% of the labor force.Limitation of water and arable land are the two major constraints affectingEgyptian agriculture. Cultivated land in Egypt is limited to only about 3% to4% of the total land area, and at 0.05 ha. Egypt has one of the lowest ratiosof land per capita in the world. The country is almost entirely dependent onirrigation and has no effective rainfall except in a narrow band along thenorthern coastal area. The construction of High Aswan Dam permitted theentire flow of the Nile to be captured, enabling Egyptian farmers to practicedouble or in some places triple cropping systems.

2. Despite the single source of water supply, the water managementand delivery system in Egypt is very complex. Endowed with a flat topographyand practicing an intensive irrigated agricultural system, Egyptians must pumpand lift water several times to make it accessible to farmers and, then lift,re-use and flush out the drained water. The Mechanical and ElectricDepartment (MED) of the Ministry of Public Works and Water resources managesand operates all 773 irrigation and drainage pumping stations in Egypt. TheIrrigation Pumping Station Rehabilitation Project, implemented by MED,represented the Bank's first involvement in rehabilitating the drainage andirrigation pumping stations. Most of the project's stations were very old,with an average life span of more than 30 years, and were operating underadverse conditions.

Obiective

3. The project aimed at appraisal to: (a) rehabilitate 30 irrigationand drainage pumping stations so that any harmful effect of failure on cropscould be avoided, and to reduce the operation and maintenance cost of thesestations; and (b) strengthen maintenance capabilities of the institutionresponsible for operating pumping stations in Egypt by establishing a modernpump maintenance system, a spare part inventory control system, and a costaccounting system.

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Implementation

4. Although a few impediments prolonged the project's implementationperiod, project implementation was successful and the implementation served asa learning experience both for the borrower and for the Bank. Initially, theborrower was hesitant to borrow on IBRD lending terms, which postponed theproject negotiation by nearly a year. Similarly, project closing lapsed twoand a half years from Its appraisal target of December 31, 1989. However,this time lapse was mainly due to three-fold expansion in the project scope,from rehabilitating 30 to 90 stations. To some extent, factors such asinflexible project design, over-estimation of equipment costs, the contractingpublic construction companies' financial and managerial problems, and theMED's (implementing agency) lack of civil work experience and lack ofknowledge of ICB procurement procedures also contributed to implementationdelays.

5. Several important decisions were made during project executionwhich improved the project's implementation. The "turnkey" contract system(where the principal contractor is either the equipment supplier or thecontractor of civil works) was adopted, which facilitated conformity betweenthe new civil structures and the pump's mechanical requirements. The Bankeased its insistence on submission of bids with an alternative designsolution, which accelerated the bid evaluation processes. Based on morereliable information on the stations' rehabilitation needs and on actualequipment price quotations received, project costs were recalculated in 1986which resulted in substantial savings in project cost. The project wasredesigned: its scope was expanded from rehabilitation of 30 stations to 90stations, and a new component "provision of weed screens and clearingmachines" was added under the project. These modifications expanded projectobjectives as the rehabilitation target set by appraisal was only a small partof rehabilitation needs of pumping stations in Egypt. The only issue whichremained unresolved was the MED's weak civil work capacity, which has beenaddressed by a follow-up project, the Pumping Stations Rehabilitation ProjectII (PSRP II).

Results

6. The project objectives were more than fully met, with some minorexceptions in institutional strengthening. Two new pumping stations wereconstructed, with work in progress on a third station, while appraisaltargeted only one station; 34 stations had equipment replaced against theappraisal target of 14; and 43 stations had repairs carried out against atarget of 15. In addition, the project established 2 central and 14 regionalworkshops, and 24 staff houses, and installed 85 submersible pumps in TahrirSouth and weed screens in 18 stations. Spare parts and equipment forreplacement of another 10 pumping stations were also delivered to theconstruction sites; the civil works and erection of equipment were indifferent stages of progress in these stations.

7. The borrower also established a Directorate General of TechnicalInspection (DGTI), and created a computerized Management Information System(MIS) with the project's support. DGTI and MIS have already made some

progress in developing systems for preventive maintenance, personnel, payroll,and equipment inventory. These initiatives were undertaken only recently, andit will take some time to establish a modern pumping repair and inventorysystem. The overall project's ERR is calculated to be 36% at project closing,compared with an estimated ERR of 44% at appraisal. The appraisal's ERR wasderived on the basis of claiming benefits from both replacement and repairworks. By comparison, the ERR calculated for PCR includes benefits derivedonly from station. which were replaced not from those which were repaired,because of difficulty in quantifying these benefits.

Sustainability

8. The water delivery and drainage costs have become priority issuesin recent years in the Bank's sectoral dialogue. This project reduced thestations' O&M costs by more than LE 8 million annually, as it replaced olddilapidated equipment with high maintenance cost and improved pumps'efficiency, resulting in lower maintenance and energy costs. As such, theproject enhanced sustainability of pumping operations and reduced thegovernment's budgetary burden.

9. The government, in collaboration with donors, is investigatingappropriate mechanism to pass water charges onto the beneficiaries. Studiesare underway to assess the optimal level of funds required to operate,maintain, and rehabilitate irrigation systems, and to evaluate the farmer'sability to pay for irrigation water. Based on the recommendations of thesetwo studies, a third study will establish the collection mechanism. Inaddition, as part of the cost recovery and cost reduction efforts, thegovernment handed over operation costs including repair and maintenanceresponsibility of 67 small booster pump stations to the farmers unions by theend of 1991, and another 56 stations had been scheduled to be handed over bythe end of 1992. Under the new arrangement, NED may assist the unions inrepair and maintenance work of these stations at cost price.

Lessons Learned

10* The appraisal allowed only five years for project implementation,which resulted in several extensions to the loan agreement. However, the slowpace of awarding contracts and implementation of civil works requiredallocation of longer implementation periods at the outset. Furthermore, theappraisal did not fully review the institutional limitations of MED in civilworks, which created continuous bottlenecks in project implementation.

11. The project design should have allowed a flexible approach forrehabilitation of these pumping stations, as their numbers were quite large,with varied repair needs during the project execution period. A programapproach with financing of a time slice of an ongoing program would have beenmore appropriate and would have provided the required flexibility.

12. The publicly-owned construction companies involved in projectcontracts encountered internal budgetary and managerial problems which delayedthe project civil work progress. While these coinpanies received contracts onthe basis of low unit price quotations, the shortage of working capital during

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construction periods became a major stumbling block to progress of works. Thepublic construction companies have acquired some autonomy for their operationsunder enterprise reform laws since 1991, and they have been transferred underthe control of a public Holding Company for public work. To mitigate cash-flow problem in the future, financial stability should be a condition forcontractors' prequalification, if the civil work contractor is the primecontractor. However, if the equipment contractor is the prime contractor,appropriate conditions should be included for the selection of sub-contractorsto ensure financial stability.

13. The appraisal estimated project equipment cost on the basis ofUnited States prices. However, it would have been more appropriate toestimate costs on the basis of European or Japanese equipment prices, as mostof the pumps were of European origin, or to use an average world market price(as under ICB contracting system) which would have also been more relevant.

VA

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PROJECT COMPLETION REPORT

EGYPT

IRRIGATION PUMPING STATIONS REHABILITATION PROJECT(Loan 2270-EGT)

PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE

Proiect Identity

Name :Irrigation Pumping Stations Rehabilitation ProjectLoan Number : 2270-EGTEYP Unit : MENA RegionCountry : EgyptSector : AgricultureSubsector Irrigation

Background

1.1 Agriculture is an important sector of the Egyptian economy,providing about 20% of GDP and merchandise exports, and employing 35% of thelabor force. Limitation of water and arable land are the two majorconstraints affecting Egyptian agriculture. Cultivated land in Egypt islimited to only about 3% to 4% of the total land area, and at 0.05 ha, Egypthas one of the lowest ratios of land per capita in the world. AgriculturalGDP fell from 3.5% in the 1970. to 2.5% in the 1980s. In the wake of aprogram of economic liberalization and social reform, the production of wheat,maize, beans, fruit and vegetables has increased significantly in recentyears. During the same period, the rate of population growth showed adeclining trend, and approached an estimated 2% in 1992. However, productionlevels for the most important commodities remain inadequate to meet nationaldemands.

1.2 Egypt's agricultural conditions are unique. The country has noeffective rainfall except in a narrow band along the northern coastal areas,and it is almost entirely dependent on irrigation. Consequently, agriculturaldevelopment is closely linked to the Nile River and it. management. Theconstruction of the High Aswan Dam permitted the entire flow of the Nile to becaptured, and the Egypt-Sudan water treaty allocated 55.5 billion cubic metersof water annually to Egypt. The Nile system, which extends 1200 km from Aswanto the Mediterranean Sea, consists of two storage dams at Aswan, seven majorbarrages, and about 31,000 km of canals. The Nile water is diverted to theseirrigation canals either through large regulating barrages or through pumping.

The canals deliver water into "meskas," which are channels serving 100 to 500fd. The delivery of water up to meskas level is the government'sresponsibility; thereafter, farmers take charge of delivery of water to theirfields.

1.3 Despite a single source of water supply, the water management anddelivery system in Egypt is very complex. Due to flat topography and doubleor even triple cropping systems, the water has to be pumped and lifted severaltimes without any break to satisfy the needs of its intensive agriculturalsystem. Similarly, rather expensive drainage facilities must be establishedand maintained to control ground water levels and salinity to preserve cropyields. As such, keeping these irrigation and drainage pumping facilities inoperation and maintaining their efficiency, which is focus of this project, isvital for Egyptian agriculture.

Proiect Obiectives and DescriRtion

1.4 Proiect Objectives: In pursuit of the government policies for theagricultural sector, the objectives of the Irrigation Pumping StationsRehabilitation Project at appraisal were: (a) to rehabilitate 30 irrigationand drainage pumping stations serving about 1,134,000 feddans, so that anyharmful effect of failure of crops could be avoided, and to reduce theoperation and maintenance cost of these stations; and (b) to strengthen themaintenance capabilities of the institution responsible for operating pumpingstations in Egypt by establishing a modern pump maintenance system, a sparepart inventory control system, and a cost accounting system. While thegeneral objectives of the project remained Intact, the project scope increasedduring implementation to rehabilitation of 90 pumping stations. Expansion ofthe rehabilitation effort was pursued because of considerable saving in costsof equipment procured under ICB procedures and the urgent need forrehabilitation and maintenance of additional stations which were notincorporated in appraisal due to financing constraint.

1.5 Proiect DescriDtion: The project as it was appraised consisted ofthe following components:

(a) Rehabilitation of 30 pumping stations and construction ofnew ones as follows:

(i) construction of a new pumping station at Bayara;(ii) replacement of pump units and other equipment in 14

other stations; and(iii) provision of spare parts for the rehabilitation of 15

additional stations.

(b) Provision of 3 central workshops and 15 regional workshopsand instruments for the establishment of 6 electricallaboratories to strengthen the repair facilities of MED andto insure appropriate maintenance of pump units;

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(C) Provision of spare parts in emergency cases for pumpingstations other than those to be rehabilitated under (a)above; vehicles, mobile cranes, forklifts; and a centralcontrol system for the 5 successive pumpingstation. of the Nasr Canal;

(d) Provision of staff houses for workshop technicians and pumpoperators; and

(e) Provision of technical assistance to design a pumpmaintenance system, to establish separate project accountsand a cost accounting system and to design and establish astore inventory control system.

1.6 Due to substantial cost saving and on the basis of a detailedassessment of individual station rehabilitation requirements, the followingexpansion and modifications were made to the scope of the project in February

1986:

(i) The scope of component (a) was expanded to rehabilitateabout 90 stations, including reconstruction of 5 stations,and replacement of circuit breakers for the Nasr CanalPumping Station; and

(ii) The project scope was further expanded to cover a newcomponent "provision of weed screens and clearing machines."

These modifications in the project components were made to further projectobjectives, since the rehabilitation target set by appraisal was only a small

part of the overall rehabilitation needs of the irrigation and drainage

pumping station in Egypt, and weed screen clearing machines at the pumping

stations help keep weeds out of the station to reduce wear and tear on pumps.

Proiect Desian and Oreanization

1.7 The project concept originated from the Irrigation Subsector

Review2, which recommended that first priority be given to the rehabilitation

of aging pumping stations to secure the continuation of proper operations and

to prevent production declines. Most of the stations were old with an average

life span ranging between 17 and 49 years, and they were operating with

substantial operating and maintenance costs under adverse conditions including

lack of spare parts, inappropriate maintenance systems, and excessive hours ofdaily operation. Due to both age and lack of adequate maintenance facilities,the reliability of these stations to deliver water according to schedule was

dropping at an accelerating rate. The project came at an opportune time torehabilitate the pumping stations and to strengthen the institution

2/ IBRD Report No. 3371-EGT, March 5,1981.

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maintenance capacity of MED for implementing an appropriate preventivemaintenance system.

1.8 The Mechanical and Electric Department (MED) of the Ministry ofPublic Works and Water Resources was responsible for implementation of theproject. MED manages and operates all irrigation and drainage pumpingstations in Egypt. Presently, it operates about 773 pumping stations,consisting of 675 irrigation stations and 98 drainage stations. In addition,MED manages an estimated 247 tubewells which are used for pumping groundwaterfrom wells. The Irrigation Pumping Stations Rehabilitation Project developedwith MED's participation from identification stage. As such, MED was familiarwith the project design and components.

1.9 Project preparation was carried out by a Bank/FAO-CP mission inJune, 1981. Subsequently, the Appraisal mission visited Egypt inSeptember/October, 1981. The appraisal mission endorsed most of therecommendations of the preparation mission, and with the MED's concurrence, itincorporated into the project provisions for strengthening MED's institutionalcapability to perform preventative maintenance.

1.10 The project represented the Bank's first involvement with the MEDas well as it is the first major repair operation for pumping stations inEgypt. As such, the project as designed at the appraisal had a fixed programfor the rehabilitation requirements, paid inadequate attention tostrengthening MED's civil work capacity, and was optimistic in the assessmentof time required to establish a modern maintenance and repair system. The SARapproached the pumping stations' rehabilitation needs in a static way,providing almost a firm program for rehabilitation of 30 pumping stations. Aprogram for pumping station rehabilitation could have been developed with thisproject picking up a time slice of the program. Soon, however, both the Bankand MED realized the changing needs of the irrigation and drainage pumpsduring the project's implementation period. Consequently, a flexible approachwas introduced, allowing stations to be reviewed and included in a phasedrehabilitation program.

1.11 The MED, while equipped with a cadre of experienced mechanical andelectrical engineers who successfully managed the pumping stations since 1920,lacked skilled manpower in civil works to ensure timely implementation of thiscomponent of the project. The appraisal mission realized this shortcoming andattempted to overcome it by making a covenant condition requiring MED toassign an adequate number of qualified civil engineers from MPW to superviseclvil work. Unfortunately, no permanent civil englneering administrationstructure within MED's administration system was created. The MED had to relyfor the civil work design and supervision on MPW staff or contractors. A. aresult, project implementation faced continued civil-work related problemswhich slowed implementation progress, particularly during the initial stagesof the project. However, under the Pumping Stations Rehabilitation Project II(PSRP II), a Directorate for Technical Inspection has been established andcivil works has been strengthened.

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1.12 Also, the project did not anticipate the complexity and timerequired for institutional strengthening; it was, therefore, anticipated thatby the end of the project's second year, a modern pumping repair andmaintenance, inventory control, and accounting system would be established.While gradual progress is being made to achieve these goal., additionalfollow-up under PSRP II is being pursued to establish a fully modern pumpingrehabilitation system in Egypt.

Project Implementation

1.13 Loan Effectiveness and Project Start-uot: Project appraisal wascompleted in 1982; however, the government turned down the Bank's March 1982invitation to negotiate. This was due to the Irrigation Ministry's hesitationto borrow at IBRD terms, as the project initially considered IDA financing,but during project processing, the decision was made to graduate Egypt fromIDA financing. Also, the Ministry did not succeed in its efforts to findalternative sources of soft funds. Pumps in Egypt were of diverse origins andtechnical specifications. Their rehabilitation necessitated purchase of partsfrom the original suppliers or manufacturers. As such, the project was notattractive for financing by bilateral donors. The Ministry, finally, agreedto the Bank's second invitation of negotiation, in March 15, 1983.

1.14 During the negotiation, the Government indicated that ifalternative financing were found in the next three months, an equivalentamount of the Bank Loan would be cancelled. However, alternative sources offinancing were not found, and the government complied with the condition ofeffectiveness with a delay of less than one month. That delay was due to theslow ratification process of the project's legal documents in the EgyptianPeople's Assembly. The project thus became effective in November 1983.

1.15 Implementation Schedule: Although the project's closing datelapsed two and a half years from its appraisal target of December 31, 1989,this was mainly due to a more than three fold expansion in project scope fromthat envisaged in the appraisal. In addition, other issues such as MED'sunfamiliarity with the Bank's procurement and reporting requirements,estimation of the project costs, and the issues stated in paras 1.10 to 1.12caused delays in the implementation, especially during the first two years ofthe project. However, MED and the Bank successfully resolved most of theseissues enabling the project to far surpass the stipulated physical targets.

1.16 ProcureMent: During the first two years of project implementation,the procurement was generally slow; in some cases, nearly a year was requiredto prepare procurement documents acceptable to the Bank. However, once theMED became familiar with Bank procurement guidelines, procurement progressedwithout much delay. The slow procurement progress was mainly due to thefollowing factors:

(a) Unfamiliarity of MED with the Bank'sinternational competitive bidding (ICB)

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requirements: MED's insistence that the bidbonds from foreign banks should be counter-guaranteed by an Egyptian bank, that all foreignbidders should have local agents, that Arabictext should prevail in settling anydisagreements, that contractors should favorEgyptians for employment. To mitigate theseissues, a consultant was hired who modified theMED procurement document and made it harmoniouswith the Bank procurement guidelines; and theMED staff were also provided with Bankprocurement procedures during their visit to theBank. These efforts gradually succeeded toameliorate the procurement difficulties.

(b) The confusion over the "turnkey" contract form in the Bank:While the staff appraisal report allowed the "turnkey"contract form (where the principle contractor is eitherthe equipment supplier or the contractor of civil works),the Regional Procurement Unit proposed that contract beseparated into two contracts: one for equipment and theother for civil works. However, based on the borrower'spreference and the Bank's prior commitments, the Bankfinally agreed with the turnkey contract form. The"turnkey" also eased the complication involved inestablishing conformity between the new civil structures forpump stations and the mechanical and electric requirementsof the stations.

(c) The use of a two-stage bidding system: With theintention of finding the most appropriate design, the staffappraisal report recommended that, for the construction ofthe new station at Bayara and the replacement of the pumpunits in other stations, a clause be included in the tenderdocuments that blds with alternative design solutions beaccepted and considered in the bid evaluation process.However, tenderers came up with too many alternativedesigns, in some cases up to 800, reviewing of which tookconsiderable time. Thus, the two-stage system wasdiscontinued by joint agreement, by the end of 1984.

(d) Lack of Local Funds: As civil work was financed entirelyfrom the government budget, during the project's first fewyears, lack of adequate local budgetary allocation delayedcivil work contracts (para 1.33).

1.17 Proiect Costs: The cost of the Irrigation Pumping StationRehabilitation at appraisal was estimated at US$68 million, composed of a loanof US$41 million to finance 100% of the project's foreign exchange costs, and

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a government contribution of about US$27 million to finance the localexpenditures. During implementation, however, MED and Bank concluded thatabout US$30.4 million from the loan component could be saved due to threeunforeseen developments: (a) reduced actual equipment prices, with anestimated savings of US$10.5 million. The SAR cost estimates were based on USsupplier prices, while actual contracts for supply of equipment, under ICSprocedures, were concluded with the European and Japanese suppliers, at aboutone-half of the price of US equipment (mainly due to the change in relativecurrency values); (b) the emergence of new developments in Bayara and AadessiaI and II pumping stations, with a resulting estimated savings of US$6.5million. At appraisal, one existing pumping station was expected to be takenout of service at Bayara station, as it was no longer possible to obtain newwindings for motors from the original supplier. However, this problem wassubsequently solved, and the station put back in operation with somerehabilitation works. Aadessia I and II pumping stations were deleted fromthe project due to severe settlement problems in the foundations whichrequired extensive investigation and redesigning; and (c) a lower inflationrate than that estimated in the SAR which resulted in savings of US$13.4million (the amount provided for contingencies' allowances in the SAR).

1.18 These savings made it possible to expand the project scope, asexplained in para 1.6. The final cost amounted to US$56.4 million as shown inTable 5A in Part III. While from the Bank loan US$1.02 million, remainedunutilized and was cancelled, a major factor for the divergence betweenappraisal and actual realized costs is explained by the exchange rate appliedto convert government contribution to US dollars. The LE depreciated againstUS dollar more than three fold since appraisal.

1.19 Disbursement: The estimated, revised and actual disbursements ofLoan 2270-EGT are provided in Table 3, Part III. Volume and pace ofdisbursement was much reduced due to the realization of substantial costunderrun for project components as originally designed, subsequent expansionof the project size, and delays in project implementation. The disbursementwas spread over nearly nine years, from the date of effectiveness, November1983, and continuing through November 1992. At the end of the project, abalance of US$1.02 million remained which was cancelled on November 24, 1992.

1.20 Loan Allocation: The original and revised allocation and actualdisbursements for Loan 2270-EGT are shown in Table 5B, Part III. The originalallocations to the category 2, machinery and equipment for workshops, andcategory 3, consultants were reduced; saving made under these categories plus"unallocated" loan amount were added to category 1, machinery and equipmentfor rehabilitation of pumping stations and provision of staff houses, in April30, 1989, based on the expenditure commitments made or expected at that time.

1.21 Regorting: The project's progress and auditing reports experienceddelays at the beginning of project implementation. To speed projectimplementation, the Bank requested a detailed implementation schedule, towhich MED complied, with some delays.

Proiect Results

1.22 Proiect Obiectives: The project's physical objective ofrehabilitating 30 pumping stations was more than fully met. With mome minorexceptions, the objective of institutional strengthening in pumping repair andmaintenance was also met. Two new pumping stations were constructed and workwas in progress on a third station, while appraisal targeted only one station;34 stations were replaced against the appraisal target of 14t and 43 stationswere repaired against a target of 15. Also, the spare parts and equipment forreplacement of another 10 pumping stations were delivered in the constructionsites, and on these stations, the civil work and erection of equipment were indifferent stages of progress (refer to Table BA, Part III for details). Also,spare parts were provided for 50 pumplng stations, for Tahrir South 85submersible pumps were supplied, and in 18 stations weed screens wereinstalled. In addition, 2 central and 14 regional workshops and 24 staffhouses were built under the project. Although appraisal includedrehabilitation of 6 electric laboratories under the project, this work couldnot get completed due to MED's reorganization programs. However, consultantassessed the rehabilitation needs of these laboratories and submitted theirdraft report; the work will be taken under PSRP II, the follow-up project.

1.23 In 3988, consultants reviewed pumping stations maintenanceprocedures, accounts, and store inventory control system. Based on thereview's recommendations, MED after some delays established a DirectorateGeneral of Technical Inspection with 10 engineers in 1991, and gradually beganto implement a preventive maintenance schedule for each station. With theBank's persistent efforts, MED established a computerized ManagementInformation System (MIS) 'in 1989. A panel of experts, financed by UNDP,assisted MED in choice of equipment and of technical support for MIS. HISwhich is considered a major breakthrough has been implementing a stationsoperating and maintenance system, a building and structure maintenance system,and a personnel and payroll system. As such, the project has achieved withsome minor exceptions, its institutional strengthening objective. However,due to delays in consultancy appointment and in actual implementation ofconsultant's advice, the institutional changes have only recently been made,and the project has not had adequate time to fully incorporate these newsystems into the MED's operations. The Pumping Stations RehabilitationProject II is closely pursuing these issues.

1.24 Proiect Impact: Maintaining the irrigation and drainage pumpingstations in operative and efficient condition is not only vital for theeconomy of the agriculture sector in Egypt, but also substantially reduces theO&M costs. The project assisted in accomplishing these goals through, (a)improvement in overall pumping efficiency; (b) reduction in maintenance costsaand (c) enhancement in reliability of pumping stations. The overallefficiency is the water output divided by the energy input and is the productof the efficiencies of transformer, motor, gearbox, and pump. These benefitswere considered for 47 stations which were replaced, with the assumption that

-9-

the replaced pumps would have 10 years service life3. Based on theseassumptions and based on the analysis of data assembled from 10 representativepumping stations, it was calculated that the project saves about 26 millionkwh of energy per year. Available data indicate that a 15% water deficit in acritical period would result in yield declines of 8%-23%(FAO), and thatinadequate drainage would reduce crop yields by 12%-16% (field trials inEgypt). Based on these reports and preliminary data provided by MEDconcerning this project, it is calculated that the project saves LE 4.1million annually in energy cost, and about LE 4.4 million annually inmaintenance expenditures through the project life, in constant 1992 prices.Also it is conservatively assumed that, in the situation of without project(without replacing these pumping stations), the net value of crop productionwould decline by 5% during the project life period. With these benefits, theERR for the project is calculated to be 36% compared to 44% calculated duringproject appraisal. Appraisal's ERR was derived on the basis of benefitresults obtained elsewhere, theoretical pump's energy consumption and claimingbenefits from both replacement and repair works; however, the ERR calculatedin here was based on both actual and empirical data, and benefits derived onlyfrom stations which were replaced not from those which were repaired becauseof difficulty in quantifying these benefits (refer to Table BE, Part III fordetails).

1.25 The ERR calculations do include costs for items for which benefitscould not be easily quantified such as: (a) repairs for 43 pumping stations,and (b) provision of spare parts for another 50 stations, and an additional 85small submersible and 149 lifting and boosting pumping units. In addition onthe benefit side, as a result of enhanced reliability of pumping stations,farmers would have incentives to reduce excessive water use. Furthermore,institutional improvements would strengthen technical operations of MED,benefitting all pumping stations in Egypt. If these difficult to quantifybenefits were included, the resultant ERR would be higher. The project hasalso contributed positively to the environment by: (a) maintaining the watertable at low levels, thus reducing water logging and salinization, andimproving health and environmental conditions for the farming community; (b)increasing pumping statLon safety by incorporating safety features in stationdesign; and (c) creating better living conditions through housing provided forpumping station staff.

Proiect Sustainabilitv

1.26 Cost recovery and sustainability of the irrigation and drainageproject has become a priority issue in the Bank's sectoral dialogue with theGovernment. This project reduces O&M costs, thus lessening the government'sbudgetary cost burden, especially that of the Ministry of Public Works andWater Resources. In addition, both through this project and through PSRP II,the MED's institutional capacity in civil work and in pump maintenance

,/ Appraisal claimed benefits from stations which received repair as well asthose which received replacement services.

- 10 -

operation has been strengthened. Consequently, MED has gradually beenadopting a preventive maintenance system which further improves the project'ssustainability.

1.27 The increased reliability of pumping stations will benefit about1.5 million farm families. Part of the project cost is indirectly recoveredthrough applying land taxes on holdings of larger than 3 fd. In addition,farmers were also taxed indirectly through low procurement prices; therefore,additional charges on farmers concerning irrigation and drainage was notestablished. However, since the adoption of a liberalized marketing system,the cost recovery of irrigation and drainage has received more attention.

1.28 Progress has already been made in estimating the cost recovery andwater charges. Recently, with the assistance of USAID, two studies werelaunched: one study calculated the level of optimal funds required to operate,maintain and rehabilitate the irrigation system; and a second study isevaluating the farmer's ability to pay for irrigation water. Based on therecommendations of these studies, a third study will be carried out toestablish the collection mechanism. In addition, as part of the cost recoveryand cost reduction efforts, the government handed over operation costsincluding repair and maintenance responsibility of 67 small booster pumpstations to the farmers unions by the end of 1991, and another 56 stations hadbeen scheduled to be handed over by the end of 1992. Under the newarrangement, MED may assist the unions in repair and maintenance work of thesestations at cost price.

Bank Performance

1.29 The Bank contributed to the success of the project through timelysupervision of the project, and by offering professional advice to MED. Theappraisal mission took a correct decision by including in the projectinstitutional strengthening components to enable MED to adopt an advancedmaintenance system. However, appraisal did not go far enough in identifyingMED's institutional weaknesses in its maintenance and in civil works. Projectpreparation should have preferably undertaken studies on preventivemaintenance, cost accounting and inventory control system; and an institutionspecialist should have participated in the appraisal to review these studiesand to provide appropriate recommendations in this regard. Also, as statedearlier, the appraisal team could have provided a flexible approach in thestation rehabilitation work, which caused considerable implementation problemslater on. However, these problems were corrected to a great extent by closeliaison and contact with MED during the project implementation period.

1.30 The Bank sent 16 supervision missions to the field at appropriateintervals, and kept close contact with the implementing agency. As such, theBank managed to play a constructive role in solving implementation problems,in adopting a program approach for the station rehabilitation, and infamiliarizing MED with the Bank procurement policies.

- 11 -

1.31 The Bank made the right choice in selecting irrigation pumpingstation rehabilitation as one of the priority lending activities inagriculture, and assisting Egypt to develop a sound repair and maintenancesystem as a prerequisite for sustaLnability of the country's irrigation anddrainage system.

Borrower Performance

1.32 After the initial delays in project start up, the implementationgradually improved as the MED gained experience with the IC8 tenderingprocedure and mobilized its resources to focus on project implementation. Itis commendable that the borrower was receptive to the supervision missions'technical advice and agreed to adopt a flexible approach in selecting pumpingstations for rehabilitation and repair. However, the pace of work sufferedfrom a shortage of local funds, and financial and management problems of someof the public construction companies which were involved in the project'scivil work.

1.33 MED's budgetary allocations like that of other institutions wasdetermined on the basis of its past expenditure trends. As such, MED couldnot raise adequate local funds to cover fully the project's local fundingrequirements for civil works. This problem was evident during the initialstages of project implementation, which resulted in delaying progress of civilworks.

Proiect Relationship

1.34 The Bank and the borrower maintained cordial and good workingrelationships throughout the project implementation. During the initialstages of project implementation, described in para 1.16, some controversyover procurement issues emerged. However, these issues were cleared in atimely fashion and the Borrower acknowledged the relevance of the Bank'scomments, suggestions, and implementation requests. The excellentrelationship resulted in an expanded project scope and an agreement toundertake a follow-on project.

Lessons Learned

1.35 The appraisal mission was over optimistic about the timeframerequired for project implementation. The time allotted for rehabilitationwork did not properly consider the slow contract awarding system and pace ofcivil construction work in Egypt. Also, establishing a modern repair andmaintenance system and creating institutional capacity to effectively dealwith the maintenance and inspection requires considerable time. A project ofthis nature should be provided an execution period of seven to eight years toaccomplish its objectives. Also studies related to institutional improvementshould be preferably completed in the early stages of the project to allowtime for execution of recommendations and possible modifications duringimplementations.

- 12 -

1.36 The project should have had a flexible approach for rehabilitationof the.e pumping stations, as their numbirs were quite large, with variedrepair needs during the project execution period. A program approach withfinancing of time slice of an ongoing program would have been more appropriateand provided the required flexibility. Under a flexible approach, projectimplementation could be categorized into two parts stations with availabledetailed rehabilitation spec.ifications and with urgent repair needs; andstation. which required additional information to identify their requirements.

1.37 Some of the publicly-owned construction companies whichparticipated in this project encountered budgetary and managerial problemsthat delayed the civil work programs. While theme companies receivedcontracts on the basis of low unit price quotations, a general shortage ofworking capital during construction period became a main stumbling block fortheir progress. Under the enterprise reform law of 1991, public constructioncompanies transferred under the control of a Public Holding Company for publicwork, and were put on a par with the private companies and freed to establishtheir own rates. Recently, during the Country Implementation Review, the Bankwas informed that the arrears to the Public Works Holding Company from MPWWRwould be cleared against the cross-arrears between the Minietry of Finance andthe Holding Company. Moreover, in order to prevent emergence of new arrears,new contracts wlll not be signed ln the future unless MPWWR has the fundingfor them in its annual budget. However, these reforms came too late tpinfluence project civil works. To mitigate contractors' future cash-flowproblems, the financlal cash flow capabillty of contractors should be verlfiedprior to prequalifying them for work, if the civil work contractor is theprime contractor. However, if the equipment contractor is the primecontractor, appropriate conditions should be stipulated for the approval ofthe sub-contractor to ensure financlal stabllity.

1.38 Project completion mission went through laborious work to assemblethe project cost and beneflt data and still relied on some empirical work doneelsewhere ln order to calculate project's ERR. Approprlate monltorlng andevaluatlon capacity should have been created in MED, during early projectimplementation stages, to enable it to assemble these data and to analyze theproject impacts.

1.39 The appraisal estimated the project equipment cost on the basis ofUnited States prices. However, it would have been more appropriate to basecost on European or Japanese equipment prices, as most of the pumps were ofEuropean and Japanese origln. Alternatively, cost estimate could use anaverage world market price as under ICB contracting system that would be moreappropriate than the appraieal approach.

Proiect Documentation

1.40 The appraisal report and credit documents were clear. However,due to realized savlngs in the project cost during project LmplementatLon, theproject scope expanded and Schedule 2 of the loan document was modified.Except for the lnstitutional component, the project was relatively simple

- 13 -

involving no complicated engineering design. MED maintained separate projectaccounts and dispatched quarterly project progress reports. However, due toweak coordination and communication between MED and contractors, an up-to-dateinformation on expenditures and the progress of project work war not providedin the progress reports, particularly during the early stages of the projectimplementation.

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PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

mistz 7 of Public liorksaad Water Resourcoe,

Eloctrical DeI

PAX TBUUSMY5SZVN COOVR ̀EEEMOEWICA.L & E2T1RIOA.L DZP1RTMM'T

FAX W. 20/2/204,270

DkT3i Decoxb. 3, 2.992

TO I Irs. Ngaze Okomtjo Iweela, Division Chief UN2 LG, tA)u*UA-3aAk, 1818 H St, X,W, WauhInstoa D.Q.20433 200RM NO, 9007.

iZzIV33 ?AX NO. i 202/,47 7/13746

PROu, 3ng. Tavadroa' Quirg~u± N±rXt Undersecretary of Statb,Head of M.B.D.

This is page I of 1 pages boing treassitted,

RLMEPONXl: 20392?7

SMT.: (Laan 22?0, X;G** Pumixg stations Rehapilitation Project X)

Dear 8irs 1

Refereace tO the above mention prodeet and the LX*.DIS

preparation of mecti4x II ot cozpletioz Report, we are eno1oami.o3.r couientt to the *4port ma4 whioh we hope can be used to coverpart II,

1- ravizg reviewed part I and part III.' of thc draft projectooulp.ltioe l.poxtq we aso iu asr&axeit vwth the tOlt, data anddetails included It these two partp wbt.oh hAve b.eez pr.pa.rdin coaperation be*t'ren Bask utaft ad .Eo.D, staft.

2- Wu .oofirx that tl* Easik's, supo2yiaimn zisaion over the longperaiod of the proQ.1et implauetation bAs consisted of staffot ahiah prof*Looail oalibor and they have contributedpositively in pro'ect pl*ez.ntitionl.,&nd tho pouit±-re

'vriations whish w6re introduced to iA4rease the betefits ottha projo'ca..

3- We value the olose coaper0tion PtsUblIshod betieen 1!.S,D. smdtho Wold BaXnk im Bsuccess-ill;' itxloexnting the roryix2or-tent fivet rehabilitatiqo prqjpGi (Li 2270 3.G.T.) and theconuixuation of thia closa adiooaperat±on in Lxple-aenting the follow OI ooondd Lo-a 31n " E;G.T.

W4 th kind Regards,Tours FaitfUfl.y,

Head of Mach. &leot. Dept.

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PART III. SJMMARY STATISTICAL DATA

TABLE 1. Related Bank Loans and/or Credit

Loan/credit Year ofNumber Title Aiproval Status

Cr. 181 Nile Delta Drainage I 1970 Closed

Cr. 393 Upper Egypt Drainage I 1973 Closed

Ln. 1276 Fruits and Vegetables 1976 Closed

Ln. 1235 & Cr. 637 Upper Egypt Drainage II 1976 Closed

Ln. 1439 & Cr. 719 Nile Delta Drainage II 1977 Closed

Cr. 833 Agricultural Dev. Proj. 1978 Closed

Cr. 988 First Agroindustries Proj. 1980 Closed

Cr. 1111 Fish Farming Dev. Proj. 1981 Closed

Cr. 116 Technical Assistance Proj. 1982 Closed

Ln. 2243 Second Agroindustries Proj. 1983 Closed

Ln. 3198 Irrig. Pump. Stn. Rehab. II 1983 On-going

Ln. 2561 Ag. Development II 1985 on-going

Ln. 2562 Drainage V Proj. 1985 On-going

Ln. 2732 Channel Maintenance Proj. 1986 On-going

Ln. 3071 Agric. Storage Proj. 1986 On-going

Ln. 3417 & Cr. 2313 National Drainage Proj. 1991 On-going

- 16 -

TABLE 2. Proiect Time Table

Date Date Date DateItem planned Revised Revised Actual

Identification 3/81Preparation 6/81Appraisal Mission 9/81 9/81Loan Negotiations 3/82 3/83 2/Board Approval 4/83Loan Signature 6/83Loan Effectiveness i 10/83 12/83 11/83Loan Closing Y 12/89 12/90 12/91 6/92Loan Completion 6/88 6/89 6/91 6/92

The government turned down the March 1982 negotiation request mainly dueto the Ministry of Irrigation's reluctance to borrow at IBRD terms aspreviously all the Bank financed projects under this ministry were onIDA terms.

if The Bank agreed to a 60-day extension in project effectiveness datewhich was anticipated to be required for the People's Assembly to reviewand approve the project.

The following factors justified the extensions of the Loan closing dates:expansion in Project scope due to substantial savings in project cost;trade disturbances in major equipment supplying countries (EasternEurope and the Balkans); delays in equipment delivery by manufactures;and delays in tender evaluation and awarding contracts.

- 17 -

TABLE 3. Cumulative Disbursement

Disbursement (in US$ Million)Loan 2270-EGT

IBRD Fiscal Year Estimated Revised Actual Actual i ofand Quarter Cumulative Cumulative Cumulative Estimated

1983/84 2 0.10 0.104 0.104 1003 1.38 0.104 0.104 74 2.76 0.184 0.184 6

1984/85 1 4.14 0.263 0.263 62 5.52 0.663 0.663 123 8.36 2.073 2.073 244 11.19 2.547 2.547 22

1985/86 1 14.03 3.754 3.754 262 16.86 4.394 4.394 263 19.88 4.40 5.000 1134 22.90 5.60 5.605 100

1986/87 1 25.92 8.07 8.118 1002 28.93 9.80 9.812 1003 31.39 10.60 10.688 1004 33.85 11.40 11.175 98

1987/88 1 36.31 12.20 12.152 992 38.76 13.00 13.310 1023 39.32 13.80 13.790 994 39.88 14.20 14.169 99

1988/89 1 40.44 16.70 14.996 892 41.50 19.20 16.353 853 - 21.70 19.182 884 - 22.80 22.768 99

1989/90 1 - 24.42 24.424 1002 - 25.12 25.124 1003 - 25.73 25.734 1004 - 26.24 26.242 100

1990/91 1 28.50 27.346 952 - 31.00 28.251 913 - 33.50 30.456 904 - 36.00 32.334 89

1991/92 1 - 38.50 34.082 882 - 40.50 35.238 873 - - 36.8404 - 37.193

1992/93 1 - - 39.2012 - 40.480

- 18 -

TABLE 4. Proiect ImDlementation

Key Indicators

AppraisalIndicators Estimate Revised Actual

Pumping Station 30 90 130New Pumping Unit 1 3 3Replacing of Pump Units 15 44 44Repair of Pump Units 15 43 43Provision of Spare Parts - 50Replacement of Circuit Breakers1

for Nasr Canal

Maintenance FacilitiesCentral Workshop 3 2

Regional Workshop 15 14Electric Laboratories 6 - 2Staff Houses 28 28Weed Screen and Clearing machine 0 18

Institutional ImprovementMaintenance Schedule DesignCost Accounting System DesignStore Inventory SystemEstablishing a Data Bank

Establishing A Central Control System

I/ Circuit breakers were installed on 13 pumps.

2/1 Consultants submitted their draft report of the study for assessing needsand rehabilitation of electrical workshops and laboratories, and therehabilitation work will be taken under PSRP II, the follow-up project.

- 19 -

TABLE 5. Prolect Cost and Financin.

A. Proiect Cost(in million USS)

Arorsisal Estimate ActualLocaL Foreign Total Local Foreign Total

Items Costs Costs Costs Costs Costs Costs

Pumping Station Rehab. 10.0 23.8 33.8 7.6 37.6 45.2Workshops 1.9 0.8 2.7 2.4 - 2.4Equipment and Vehicles - 2.0 2.0 - 0.9 0.9Control Syst. Nasr Canal 0.3 1.0 1.3 0.3 1.6 1.9Consultants - 0.4 0.4 0.2 0.3 0.5Contingencies 8.4 13.4 21.8Front-End Fee - 0.1 0.1 0.1 0.1Custom Duties 5.4 - 5.4

TOTAL 27.0 41.5 68.5 15.9 40.5 56.4

B. Loan Allocation(in milLion USS)

uatIory Ahoraimsat Revised Actual

1. Machinery and Equfpment for 32.600 38.496 39.174rehabilitation of pumping stationsand provfsion of staff houses

2. Machinery and Equipment for 3.910 2.600 .900Workshops

3. Consultants 0.475 0.300 0.301

4. Front End Fee 0.104 0.104 0.104

5. Unallocated 4.411 - -

Total 41.500 41.500 40.479

C. Financial Plan

ApporeaRt Actuat

(in mitlion LE) Cin miLlion USS) (in million LE) (in million USS)

Bank 34.1 41.5 90.5 40.5Goverfment 22.0 27.0 32.2 15.9Total 56.1 68.5 122.7 56.4

- 20 -

TA8LE 6. Status of Covenrmt

Brief Description SelectionOf Covenants Apptication Compliance Remarks

Assign not less than twelveelectrical engineers and adequate Exec'. 3.02 Yesnumber of technicians operatingthe Laboratories.

Establishing a unit (task force)within the MED to carry day today activities during project Exec. 3.03 Yesimplementation.

Employ consultants not Laterthan March 31, 1984, to assistMED in the Institutional impr- Exec. 3.04 Yesovement component of the Project.

InstalL not later than December31,1985, of the 11-KY transmis-ion lines for the supply of ele-ctric power to Faraskur and Exec. 3.05 YesGharak pumping Stations.

Design and implement maintenance Exec. 3.06(a)schedules by December 31, 1984. Yes

Establish and operate, no later,than March 31. 1985 a cost Exec. 3.06Cc) Yesaccounting and an inventorysystem.

Furnish to the Bank the pro- Exec. 3.08ject's quarterly progress tb, iii) Yesreports.

Furnish to the Bank a certifiedcopy of the audit report notLater than six months after the Othe2r 4.02b, ii)end of each year. Yes

Prepare, starting with the fiscalyear 1983/84, an annual monitor- Others 4.03 Yesing and evaluation report.

Ensure adequate budgetary alloc-ation for operation and mainten- Others 4.04ance of all MED pumping stations. Yes With some delays

Exec. Execution of Project Article III of Loan Agreement.

LI Other: Other Covenants, Article IV of Loan Agreement.

- 21 -

TABLE 7. Use of Bank Resources

Stage of Month/ No. of Days Specialization Perform. Types ofProlect CYCtO Year Persons in Fietd Reoresentedc Status Problem

Through Aroraisat

Identification 1/80 3 14 E,E, Ec

Preparation 5/81 1 14 Ec

Appraisal 8/81 4 28 E, E, EC

Sumervision

SAN 1. 11/83 2 6 E,E 1

SAN 2. 3/84 2 14 E,E 2 M, P

SAN 3. 7/84 1 3 E 2 D, L, F, M, P, lb

SAN 4. 11/84 1 3 E 2 D, M, P, lb

SAN 5. 10/85 1 1 E 2 D, L, F, M, P, lb

SAN 6. 2/86 1 3 E 1 M, Do

SAN" 7. 8/86 1 9 E I N, Do

SAN' 8. 11/87 2 21 E,E 2 N, Do

SAN 9. 4/88 1 3 E 2 Do

SAN 10. 10/88 1 4 E 2 Af

SAN" 11. 6/89 2 9 E,E 2 M, P

SANO 12. 9/89 3 28 E, If, Fa 2 M, P

SANM 13. 6/90 3 12 E, E, MI&E 2 M, P

SAN' 14. 9/90 1 12 Ec 2 Do, M, p

SANd 15. 4/91 1 12 E 2 Do, M, P

SANd 16. 11/91 1 11 E

3/ E: egineer; Ec: ecorwmist; Fa: financial analyst; MiE: monitorirg ard evaluation specialist; Op: snioroperation officer; and If: infomtion tec.

W2/ 1= problem-free; 2 u moderate problems; and 3 = major problems.

LI A: anticipated completion; D: disbursement; Do: development objectives; L: loan condition; Af:availability of funds; M: managerial; P: procurement; C: consultant; and R: reporting

S/ The nurmber of days recorded portrays the mission time spent on the field for supervision of otherprojects as well since it was a combined supervision mission.

I/The supervision was combined with the appraisal of Irrigation and Drainage Pumping Stations Project II.

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ARAB REPUBLIC OF EGYPTIRRIGATION PUMPING STATIONS REHABILITATION PROJECT

(Loan 2270 EGT)

(Table 8)

A. Stations' Specification and Type of Service Received Under the ProjectType Capac. Command

Gover- of CubicM/ Area Compi

Pumping Station norate Function Work Second (000 td) Status 1/

I. Lower Egypt1. El Hares Alexandria dr repl 24 65 compl

2. El Max Alexandria dr rep 62.5 300 compl

3. Halk El Gamal Alexandria dr rep 20 45 compl

4. El-Deshoudi Beheira dr repl 12 33 compl

5. El-Delengate , Beheira dr repl 10 70 compl

6. Truga Beheira dr repl 32 103 compl7. EDKU Beheira dr repl 10 30 Nov. 1992

8. Bouseli Beheira dr repl 30 50 Nov. 1992

9. Barseek Beheira dr rep 19.4 50 compl

10. Zarkon Beheira dr rep 15 35 compl

11. Borg Rashied Beheira dr rep 3.5 12 compl

12. El-Thawra I Beheira irr repl 12 103 Sept. 1992

13. EDKU Beheira irr repl 10 35 Sept. 1992

14. El Thawra 2 Beheira irr repl 15.8 30 Sept. 199215. ElThawara3 Beheira irr repl 1.3 10.6 compl

16. El Thawra 4 Beheira irr repl 11 8.5 compl17. El Nasr Beheira irr rep 104 300 compl

18. El-Atf' tadditional" Beheira irr repl 50 215 compl

19. El 3100 P.S. Beheira irr rep 16.4 25 compl20. El Moulk No. 1 Beheira irr rep 6.5 comp1

21. El. Moulk No. 2 Beheira irr rep 6.5 19 compl

22. El Moulk No. 3 Beheira irr rep 3.3 compl

23. Main El Atf. Baheira irr rep 90 215 compl

24. El Nezam Dakhaliya dr repl 10.5 50 compl

25. Irad Dakhaliya dr repl 24 57 comp1

26. Mataria Dakhaiiya dr repl 16 50 compl

27. El Balamoun Dakhaliya irr repl 12 40 compl

28. Bani Abeed Dakhaliya dr rep 20 53 compl

29. ElGenena Dakhaliya dr rep 15 24 compl

30. Drain 2 Sumer. P.S Damiet dr Const 20 63 compl

31. Faraskour Damiet dr repl 15 20 compl

32. Kafr Saad Damiet dr rep 24 70.6 compl

33. El Mandoura Damiet dr rep 22.5 68 compl

34. North Ismailia Ismalia dr const 18 8 na

35. El Mahssam Ismalia dr rep 14 33 compl

36. Drain 1 Kafr Sheik dr repl 10 52.4 compl

37. Drain 2 Kafr Sheik dr rep 22.5 75 Dec. 1992

38. Drain 3 Kafr Sheik dr repl 15.6 56 compl

-23-

39. Drain 4 Kafr sheik dr repl 30 66 compl40. Drain 7 Kafr Sheik dr repl 25 86 compl41. Drain 8 Kafr Sheik dr repl 37.5 68 compl42. Drain 11 Kafr Sheik dr repl 37.5 75 compl43. El Zeni Kafr Sheik dr rep 10 22 compl44. El Boroulos Kafr Sheik dr repl 6.3 15 compl45. Fouh Kafr Sheik dr repl 13.5 18.5 compl46. Bahr Tera Kafr Sheik dr rep 24 72 compl47. Hamoul Kafr Sheik dr rep 15 60 compl48. Hafeir Shehab Kafr Sheik dr repl 20 68.5 compl49. Belbeis(Upper) Qalubiya dr repl 7 9.4 compl50. Abo El-Menaga Qalubiya irr rep 34 68 compl51. Bahr. El Bakr. Sharkiya dr repl 4.2 65 compl52. Kassaby Sharkiya 'dr repl 22.5 60 compl53. Saft Sharkiya dr repl 37.5 174 compl54. Hanout Sharkiya dr rep 10 73.5 compl55. El Salehia Sharkiya irr rep 1.2 23 compl56. El Wadi Sharkiya irr rep 20 200 compl57. El Shabab Sherkiya irr rep 17 10 compl

UPPER EGYPT58. El Bayara Ill Aswan irr cons 6.8 10.6 Dec. 199259. El Khatara "FL" Aswan irr repl 3.2 1.5 compl60. Old Bayara Aswan lrr repl 4.5 10.2 compl61. Gazera Fures Aswan irr repl 1 0.2 compl62. Balana Aswan irr rep 20 3 compl63. Bayara II Aswan irr rep 14.7 39 compl64. El Tewassa Aswan irr rep 0.5 0.2 compl65. El Deka Aswan irr rep 2.7 1.5 compl66. El Selsela Aswan irr rep 17.1 28.7 compl67. El Nil Aswan irr rep 6 13 compl68. Korta Aswan irr rep 16.5 19.2 compl69. Radessia 1 Aswan irr rep 3.2 6.5 compl70. Radessia 2 Aswan lrr rep 3.1 6.4 compl71. Radessia 3 Aswan irr rep 0.6 1.5 compl72. Wady abadi 1 Aswan irr rep 3 6.5 compl73. WAdy Abadi 2 Aswan irr rep 2.1 4.5 compl74. Wady Abadi 3 Aswan irr rep 1 2.5 compl75. Wady abadi 4 Aswan irr rep 0.6 0.5 compl76. Bani Saleh Bani Soif irr repl 7 42 compl77. El Gharak I Fayum dr repl 3 4.2 compl78. El Gharak il Fayum dr repl 5.4 22.8 compl79. El Gharak Ill Fayum dr repl 6.3 16.3 compl80. El Tagen Fayum dr repl 4.8 6.8 compl81. El Sheik Fadle El-Minia irr repl 6.1 0.3 compl82. El Leithe Geza lrr repl 13.8 20.2 Oct. 199283. Korimate Geza irr repl 12 21.5 Oct. 199284. Bani Hemeil Sohag lrr repl 40 93 compl85. El Hebeil Qena irr repl 5.4 9 compl86. El Mahala Qena irr repl 5.1 9.5 compl

-24-

87. El Gherera Qena irr repl 11 19.5 compl-88. El Khiam Qena irr repl 22.5 3.7 compl- 89. El Derb Qena irr rep 22.5 27.8 na.90. El Namassa Qena irr rep 4 43.3 compl

Total 1,472.0 4,203.4Average 16.4 46.7

Source: Mechanical and Electric Department of the Ministry of Public Works and Water Resources.

1/ As the Table indicates, rehabilitation works were completed in 80 stations; the 10 remainingstations civil works and equipments and spare parts errection are in differrent stages ofprogress which are expected to be completed by the designated dates as indicated above.

ARAB REPUBLIC OF EGYPTIRRIGATION PUMPING STATION REHABILITATION PROJECT

(Loan 2270 EGT)

B. Selected Station Power ConsumDtion and Water Discharge Before and After the Proiect 1/

Before Rehabilitation After Rehabilitationdischarge Power cons. Command discharge Power cons. Command

in Consump. Area in Consump. AreaPumping Station ('000 m) ('000 kwh) ('000 fd) ('000 m) ('000 kwh) ('000 fd)

1. Main EIAtf 870401 7289.11 215.00 1098735 6952.80 215.002. Wady Abbady 1 70287 3491.52 6.50 78440 3008.70 6.503. Wady Abbady 2 53480 923.15 6.40 55230 920.05 6.404. El Gark 1 14490 270.21 4.20 15902 266.92 4.205. El Gark 2 32648 783.52 22.80 37277 762.63 22.806. El Ghark 3 37827 1308.46 16.30 39892 903.14 16.307. Edku 350957 3016.71 35.00 380348 3328.05 35.008. El Thawra 1 302540 2517.56 103.00 362926 2120.06 103.009. El Buroulos 60010 679.90 15.00 54267 631.44 15.00

10. El Balamoun 194320 1587.00 40.00 219399 1436.50 40.00

Total 1986960 21867.14 464.20 2342416 20330.29 464.20

Average per station 198696 2186.71 46.42 234242 2033.03 46.42Power Cons(kwh/1000 m) 11.01 8.68Average power saving per station with the project 2/ 545.97

11 The station selected for this analysis seems to properly represent the project's overall stationas their average command area of (46,420 fd) is in close proximity of the overall 90 station average (46,700 fd).

2/ It has been assumed that: (i) consumption of energy for the situation of without project would be the same as existed before pro-ject 11,010 kwh for discharge of 1,000 msq. of water), and for the situation of with project would be the same as existed for afterrehabilitation (8680 kwh of energy per 1,000 msq. of water); and (ii) in the situations of both with and without project waterdischarge would be 234.242 million msq. per pumping station.

C. Croooed Area. Production and Gross Economic Revenue in Proiect Area

Total TotalCropped Gross Net Net Rev. Net Rev.Area 1/ Rev. 2/ Cost Revenue With Proj Without Proj 3/

Crop (000 fd) (LE/fd) (IE/fd) (LE/fd) (LE mill) (LE mill)

Cotton 408.54 2730 1877 853 348.48 331.06Berseem (long) 711.65 1087 836 251 178.62 169.69Beseam (Short) 407.50 518 516 2 0.81 0.77Vegetable (Summer) 305.53 3644 1840 1804 551.18 523.63Vegetable (Winter) 205.65 2872 2253 619 127.30 120.94Cane (permanent) 13.48 2514 3150 -636 -8.57 -8.15Wheat 619.72 1691 1165 526 325.97 309.67Rice 414.41 2120 1970 150 62.16 59.05Maize 717.53 1538 1179 359 257.59 244.71Soyabeans 40.44 828 425 403 16.30 15.48

Total 3844.80 1859.86 1766.86

1/ Derived on the bases of: considering command areas of those pumping stations which were replaced under the project,assuming these areas to have a crop intensity of 180%, and assuming that the cropping patternin these areas remain the same as stated in Pumping Stations Rehabilitation Project II APR.

21 Revenues and costs are based on budget analysis prepared for the Egypt Agriculture Strategy report 1992.3/ Although appraisal assumed 5% saving in production losses on the basis of gross producition revenue, in here

a more conservative approach is taken, saving in production calculated on the basis of net farm revenue.

ARAB REPUBLIC OF EGYPTIRRIGATION PUMPING STATION REHABILITATION PROJECT

(Loan 2270 EGT)

D. Average saving in Maintenance Cost for a Pumping Station

Without Project With Project Saving

Water discharge in 1000 meter cube 234242 2/ 234242 1/ Power consumption in 1000 kwh 2579 2033 546O&M Cost LE/kwh in 1992 prices 1/ 0.043 0.008 0.035

Annual O&M Cost/station in LE 111553.30 17122.892 94430.414

1/ See Table 8B for details.2/ For calculation of energy consumption, it is was assumed that the water discharge level would be the

same as it was in the situation with the project.3/ Estimated on the bases of: (i) pump's annual operating time of 3,000 hours (derived on the basis of the data collected from

10 pumping stations); (ii) annual maintenance cost of US$0.009 and US$0.002 per kwh for the situation with andwithout project respectively in constant 1 981 prices (these figures derived from imperical results as presented in theappraisal report in constant USS 1 981; (iii) using United Value Manufacture Index for conversion of O&M cost fromfrom 1981 to 1992 values; and (iv) exchange rate US$1 - LE 3.31.

E. Proiect Cost and Benefits(LE mil)

Investment Cost Benefit in Nominal Value 1/ Total Benefit. NetInflation Nominal Constant Crop Saving Saving in constant Benefit

Year Index Value Value Pro. 21 Ener. 3/ Main. 4/ Value Stream 5/

1984 27 0.734 2.72 - - - - -31985 32 4.067 12.71 - - - - -131986 36 8.194 22.76 - - - -231987 42 7.092 16.89 - - - - -171988 52 11.177 21.49 - - - - -21

1966 60 27.161 45.27 35.6 1.6 1.7 64.8 201990 72 12.664 17.59 35.6 1.6 1.7 54.0 361991 87 26.613 30.59 39.6 1.7 1.9 49.6 191992 100 5.58 5.58 59.4 2.6 2.8 64.8 591993 - - - 75.2 3.3 3.6 82.1 82 1

1994 - - - 93.0 4.1 4.4 101.5 101 K)

1995 - - - 93.0 4.1 4.4 101.5 1011996 - - - 93.0 4.1 4.4 101.5 1011997 - - - 93.0 4.1 4.4 101.5 1011998 - - - 93.0 4.1 4.4 101.5 1011999 - - - 57.4 2.5 2.7 62.6 632000 - - - 51.4 2.3 2.4 56.1 562001 - - - 17.8 0.8 0.8 19.4 19

Economic Rate of Return 41 %36.03

11 Although rehabilitation work on some stations was completed before 1988, benefits were conservatively assumed to beginfrom that year onward.

2/ Calculated on the basis of data presented in Table 8C.3/ Calculated on the basis of realized energy saving as specified in Table 8B, and on the basis of economic price of

of LE 0.16/kwh.4/ Calculated on the basis of data presented in Table 8D.5/ Appraisal estimated ERR to be 44% (based on benefits results obtained elsewhere and theoretical pump's energy con-

sumption, and claiming benefits from both replacement and repair works); however, the ERR calculated abovewas based on actual and empirical data presented in Tables 8A through 8D, and claimed benefits only from47 pumping stations which were replaced under the project; OCC was 13.5%.

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