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The World Bank

FOR OFFICIAL USE ONLY

FILE C0PYReport No. 1911-PH

PHILIPPINES

MAGAT RIVER MULTIPURPOSE PROJECT: STAGE II

STAFF APPRAISAL REPORT

April 28, 1978

Projects DepartmentEast Asia and Pacific Regional Office

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 EQUIVALENTS

US$ 1.00 Pesos (P) 7.40P 1.00 US$0.135

WEIGHTS AND MEASURES

1 hectare (ha) = 2.47 acres1 kilometer (km) = 0.62 miles1 square kilometer (sq km) = 0.386 square miles1 meter (m) = 39.37 inches1 square meter (sq m) = 10.76 square feet1 cubic meter (cu m) = 35.31 cubic feet1 million cubic meters (MCM) 810.7 acre feet1 millimeter (mm) = 0.039 inches1 kilogram (kg) = 2.2 poundsI cavan (paddy) = 50 kg

20 cavans = 1 metric ton1 megawatt (MW) = 1,000 (kW) Kilowatts1 gigawatt hour (GWh) = 1 million kilowatt hours (kWh)1 kilo"volt (kV) = 1,000 volts (V)1 megavolt amp (MVA) = 1,000 Kilovolt amp

ABBREVIATIONS

ADB - Asian Development BankAMIADP - Angat Magat Integrated Agricultural Development ProjectEl. - Elevation above sea levelFSL - Full supply levelMARIS - Magat River Irrigation SystemMCM - Million cubic meters of waterMECO - Manila Electric CompanyMRMP - Magat River Multipurpose ProjectNBC - NIA Board of ConsultantsNEA - National Electrification AdministrationNIA - National Irrigation AdministrationNPC - National Power CorporationPDR - Project Design ReportRRD - Resettlement and Reservoir DivisionSIFRIS - Siffu River Irrigation SystemSPO - Special Projects OrganizationUPRP - Upper Pampanga River ProjectUSBR - United States Bureau of Reclamation

GOVERNMENT OF THE PHILIPPINES

Fiscal Year

January 1-December 31

FOR OFFICIAL USE ONLY

PHILIPPINES



TABLE OF CONTENTS

Page No.

1. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Agricultural Sector. . . . . .1. . . . . 1The Power Sector . . . . . . . . . . . . . . . . . . . . . . 3Project Formulation . . . . . . . . . . . . . .. . . 7

2. THE PROJECT AREA . . . . . . . . . . . . . . . . . . . . . . . 9

General . . . . . . . . . . . . . . . 9

Climate . . . . . . . . . . . . . . . . . . . . . . . . . . 9Hydrology . . . . . . .. .. . . . . .. .. 11Sedimentation . . . . . . . . . . . . .. . . . . . 11Geology ... . . . . . . . . . . . . . . 12Seismicity ......................... 12Irrigation Facilities . . . . . . . . . . . . . 13Population, Farm Size and Land Tenure . . . . . . . . . . . 13Reservoir Area . . . . . . . . . . . . . . . . . . . . . . . 13Transportation . . . . . . . . . . . . . . . . . . . . . . . 14Transmission Facilities ... . . . . . 14

3. THE PROJECT . . . . . . . . . . . . . . . . . . .. . . 15

Project Works . . . .. . . . . . . . . . . . . 15Engineering and Construction.. . . . . . 16Reservoir Resettlement . . . . . . . . . . . . . . . . . . . 21Cost Estimates . . . . . . . . . . . . . . . . . . . . . . 22Financing . . . . . . . . . . . . . . . . . . . . . . . . . 23Procurement . . .. . . . . . . . . . . . . 26Disbursements . . . . . . . . . . . . . . . . . . . . . . . 27Accounts and Audit . . . . . . . . . . .......... 27Environmental Effects . . . . .... ....... . . . 28

4. ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . . 29

The National Irrigation Administration . . . . . . . . . . . 29National Power Corporation . . . . . . .. 29Project Management .. .. . . . . . . . . . . . 30Consulting Services . . . . . . . . . . . . . . . . . . . . 31Safety of Dam . . . . . . . . . . . . . . . . . . . . . . . 31Cost Recovery .. 32

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.

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Page No.

5. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . . 33

6. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . . . 41

ANNEXES

1. Project Features, Detailed Cost Estimates, Equipment List, Price 42Increases, Expenditures, Disbursements and Allocation of LoanProceeds.

2. Farm Labor Costs, Input Prices, Rice Prices, Farm Budgets, and 54Systems Development Program:Luzon Grid.

3. Schedule of Early Events. 59

4. Related Documents and Data Available in the Project File. 60

LIST OF TABLES IN THE MAIN TEXT

Table No.

2.1 Summary of Climatological Data 103.1 Project Cost Fstimate (Package 2) 243.2 Estimated Total Cost Stage II Development 255.1 Rice and Fertilizer Prices 345.2 Farm Incomes 355.3 Irrigation - Net Value of Production 365.4 Economic Costs and Benefits 385.5 Sensitivity Analysis 385.6 Least Cost Analysis of Stage II Investment 40

LIST OF FIGURES

Figure 1.1 - Stage II Development Implementation Schedule 61Figure 3.1 - Philipines: Magat Dam Project Layout 62Figure 3.2 - Philippines: Magat Dam - Sections through Dam and Spillway 63Figure 3.3 - Stage II - Package 2 - Magat Dam Construction Schedule 64Figure 4.1 - NIA Organization for Special Projects 65Figure 4.2 - Proposed Organization for Project Construction 66

LIST OF M1APS

IBRD 13283 - Magat River Multipurpose ProjectIBRD 3562R4 - Luzon Grid Power Plant and 230 kV Transmission System

PHILIPPINES



1. BACKGROUND

General

1.01 The Government of the Philippines has requested Bank assistance infinancing the second stage of development of the Magat River MultipurposeProject in Northern Luzon. The first stage of development consists of theprovision of water distribution systems to irrigate a total of 75,000 ha ofrice in the wet season and 29,000 ha in the dry season. The Asian Develop-ment Bank (ADB) extended a loan in 1973 to assist in the rehabilitation of40,000 ha of existing irrigation systems under provision of the Angat-MagatIntegrated Agricultural Development Project (AMIADP). The Bank providedfinancial assistance for the development of irrigation facilities in theremaining 35,000 ha of Stage I land in 1975 (Loan 1154-PH). The loan alsoprovided for engineering studies to review and update the technical andeconomic feasibility of implementing the second stage of development of theMagat river consisting of the provision of reservoir storage for year roundirrigation and for power generation.

1.02 A feasibility study for second stage development of the Magat riverwas prepared under the provisions of Loan 1154-PH by the National IrrigationAdministration with assistance of the associated consulting firms EngineeringConsultants Inc. of Denver, Colorado; Shawinigan Engineering Co. Ltd. ofMontreal, Canada; Engineering and Development Corporation of the Philippinesand DCCD Engineering Corporation of Manila. This report is based on thatstudy and the findings of a Bank appraisal mission which visited the Philippinesin October-November 1977, composed of Messrs. E. G. Giglioli, R. R. Mortonand E. von Loehneysen; Messrs. R. L. P. Harris, V. Talvadkar and J. Cavallottialso assisted with the report.

The Agricultural Sector

1.03 Agriculture is the predominant sector in the Philippine economy,accounting for about one third of net domestic product, over one half of totalemployment, and nearly three quarters of export earnings. Over 70% of the9 million ha of land under cultivation is used for the production of cereals,of which rice and corn are the most important. The remaining land is taken upby the major export crops: sugar, coconuts, abaca, pineapples, and tobacco.

1.04 The performance of the agricultural sector will be crucial in deter-mining whether the Philippines can increase incomes both rapidly and equitably.At present, the domestic market for industrial products is limited by relativelylow rural incomes. Although in recent years there has been a substantial changein the terms of trade in favor of agriculture, the problems of poverty and income

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distribution continue to be particularly acute in rural areas; of the15 million people in the lowest 40% of the income scale, 12 millionlive in rural areas. The Government is aware of these problems and hasinitiated a number of programs designed to assist the rural poor.

1.05 A major Government objective is to increase rice and corn produc-tion as a means of raising the incomes of small farmers and of attainingnational self-sufficiency in food grains. After experiencing substantialdeficits in the early 1970s, rice production grew by 5% p.a. during cropyears 1974-77 and the Philippines was able to provide for consumption solelyfrom domestic production during the crop years 1975-77. The good performancein the past three years has been due mainly to an increase in yields broughtabout by favorable weather, expansion of the irrigation systems and anincrease in the area planted. With the continued growth of population andincomes, the demand for rice will rise by 3.5% annually. If rice productionis to increase at a rate sufficient to maintain self-sufficiency on a sustainedbasis, further expansion of the irrigated area will be necessary. At present,only 0.9 million ha, or 28% of the 3.2 million ha devoted to rice production,are irrigated.

1.06 The Government recognizes that in order to increase production inboth irrigated and nonirrigated areas substantial improvements in the qualityof supporting services will be necessary. In 1973, the Government instituteda national program for supervised credit for rice production, Masagana 99,which greatly increased the provision of production credit, mainly to smallerfarmers. However, the levels of arrears under the program have been very highin the last several years and as a result the coverage of the program hasdeclined sharply. The Government is aware of this problem and the TechnicalBoard for Agricultural Credit is undertaking a study of the causes of thehigh arrears under Loan 1399-PH which will be discussed with Bank staff inearly 1978 with a view to reaching agreement on the steps necessary to reducearrears and maintain the flow of production credit.

1.07 The Government is also considering the steps necessary to bringabout needed improvements in the national extension service. A Bank technicalassistance mission visited the Philippines in April 1977 and a report has beengiven to the Government which suggests a number of organizational improvementsand better logistical support in the form of training, vehicles and otherfacilities. Missions were in the field in February-March of 1978 to appraisea national extension project for possible Bank financing and to help theGovernment prepare a comprehensive program for strengthening support services(provision of credit, extension, fertilizer, seeds, and crop protection).

1.08 Since 1969 the Bank Group has financed nine irrigation projectsdesigned to increase rice production in the country. These projects - threein Central Luzon, two in the Cagayan Valley of Northern Luzon, one on MindoroIsland, one in the Visayas and two for smaller systems throughout Northern

Luzon, the Visayas and Mindanao /1 - have set the pattern for the type ofirrigation rehabilitation, new construction, and operations needed forincreasing rice production. The projects are providing improved irrigationand drainage facilities, better road systems for efficiency of operations andmaintenance and for the marketing of farm products, stronger supportingservices to assist farmers in adopting the new irrigation techniques neededto increase production, and technical assistance and training to help theNational Irrigation Administration (NIA) expand and improve its irrigationprogram. These projects would bring about substantial increases in riceproduction on about 370,000 ha and would benefit nearly 190,000 farmerfamilies, most of whom are smallholders.

1.09 Work on the first Bank-assisted project, the Upper Pampanga RiverProject (Loan 637-PH) is substantially completed. Progress on all the irriga-tion projects has been generally satisfactory and the NIA has proved itselfto be a well managed and technically competent organization. The total costof the first two projects was about 70% over appraisal estimates in the caseof the Pampanga project (Loan 637-PH) and 55% in the case of the Aurora-Penaranda Irrigation Project (Loan 984-PH and Credit 472-PH) largely as aresult of rapid inflation following the oil price increase in 1973. However,as a result of considerable increases in the projected world market price ofrice and earlier than anticipated irrigation benefits the rates of return onboth projects have not changed significantly.

The Power Sector

1.10 The three major regions of the Philippines are in differentstages of power development. Most of past power development has taken placeon the island of Luzon, where about half of the population live and mostindustrialization has occurred. Some grid development has also taken placeon the main southern island of Mindanao, particularly in the northern partwhere the availability of easily developed low cost hydropower has attractedsubstantial industrial investment. In the Visayas, which comprise all othermajor islands located in the central part of the Philippine Archipelago,grids are only now beginning to be constructed.

1.11 Historically, ownership of the power sector has been fragmented.The largest utility in the country has been the privately-owned Manila Elec-tric Company (MECO) which holds the franchise for the greater Manila area.The National Power Corporation (NPC), which is the second largest utility and

/1 The Upper Pampanga River Irrigation Project (Loan 637-PH), Aurora-Penaranda Irrigation Project (Loan 984-PH, Credit 472-PH), Tarlac Irri-gation Systems Improvement Project (Loan 1080-PH), Mindoro Rural Develop-ment Project (Loan 1102-PH), Magat River Multipurpose Project Stage I(Loan 1154-PH), Chico River Irrigation Project Stage I (Loan 1227-PH),Jalaur Irrigation Project (Loan 1367-PH), National Irrigation SystemsImprovement Project I (Loan 1414-PH) and National Irrigation SystemsImprovement Project II (Loan 1526-PH).

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totally Government-owned, generates and sells power in bulk to other utilitiesand large industrial consumers. In addition, there are a number of smallutilities in the country, operating largely in isolation. In 1970, therewere 336 privately-owned and 122 publicly-owned utilities, most of which werevery small and were located in urban areas. Since then a number have beentaken over by rural cooperatives and some have ceased operating. As ofAugust 1977, about 85 utilities and 73 cooperatives were actually supplyingconsumers. Fragmented ownership has made integrated development of thesector slow and difficult. To overcome the problem, the Government hastaken steps to consolidate ownership of the sector. In 1972 NPC was maderesponsible for constructing all future generation facilities and estab-lishing island grids. The Government is in the process of purchasing most ofMECO's generating plants, which will be operated by NPC in the future. Whenthis process is completed, MECO will become primarily a power distributor.The Government has also established the National Electrification Administra-tion (NEA) with responsibility for integrating small utilities and extendingpower service to rural areas. Both NPC and NEA are now responsible to theDepartment of Energy.

1.12 The electrification of the country has been progressing steadily.The per capita consumption of electricity in 1976 was estimated at 300 kWh,compared with 490 kWh in Korea, 184 kWh in Thailand and 120 kWh in India.Over 30% of the population is currently served with electricity comparedwith 23% in 1970. Although regional imbalances presently exist, with 46%of the households electrified in Luzon compared with 15% in Mindanao and13% in the Visayas, NEA's rural electrification program is expected toimprove the situation. The total electricity supply in 1976 was estimatedat about 13.9 billion kWh; 50% was provided by MECO, 23% by NPC, 20% by self-generating industries, and 7% by small utilities. On the consumption side,industrial consumers represented about 55%; residential consumers, 20%; andcommercial, agricultural and other users, 25%.

1.13 The Government is committed to a policy of rapid industrializationwhich is central to its objectives of fostering growth, employment and exports.It is also committed to a policy of dispersing industrial growth from thealready congested Manila Metropolitan Area to other regions of the country.In order to meet these objectives and to realize the planned annual growthin Gross National Product of 7% during the next 10 years, it is estimated thatelectricity consumption in the Visayas and in Mindanao will need to grow atannual rates of about 16% and 13%, respectively, compared with about 10% inLuzon. This would result in an overall annual growth in consumption of 11.3%.Because NPC is the institution primarily responsible for power generation, ithas a critical role to play in helping the Philippines realize its economicobjectives.

1.14 About 80% of the power generation in the Philippines is currentlydependent on imported oil and the remaining 20% on hydro resources. TheGovernment has decided to diversify energy resources by developing indigenoushydro and geothermal power and by introducing nuclear energy. The construc-tion of the first geothermal power plant is underway in southern Luzon, whileexplorations for more geothermal energy are being undertaken in several partsof the country and have already shown promising results. Investigations

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are also progressing at several potential hydropower sites in addition toMagat. In addition, NPC has also started construction of its first nuclearpower plant with financing from the United States Export-Import Bank andcommercial banks.

1.15 The sector investment program required to meet the expected demandincrease is huge. It will almost triple the country's generating capacity byexpanding it from about 3,540 MW in 1976 to about 8,500 MW in 1985. Emphasiswill be placed on the development of non-oil sources of generation. If imple-mented as planned, the program would reduce oil-fired generating capacity from81% of the total in 1974 to 53% in 1985; hydropower would correspondinglyincrease from 19 to 31%; and geothermal and nuclear power would share theremaining 16%. Although the objective of diversifying energy sources isreasonable, the program is ambitious and involves certain risks. Financialconstraints may hinder the timely development of capital-intensive hydropowerprojects and technical problems may arise in developing nuclear and geothermalsources of energy. The program therefore needs continuous review and, ifdifficulties do arise, it is possible that additional oil-fired thermalplants will be needed.

1.16 The rapid expansion in generating capacity will need to be accom-panied by a vigorous program of extending the transmission network. In 1976,NPC had a total of 3,600 km of transmission lines and about 1,200 MVA ofsubstation capacity to supply utility and non-utility consumers. About3,300 km of the transmission network are located in Luzon, 200 km in Mindanaoand 100 km in the Visayas. The grid system has been concentrated in theCentral Luzon area, and the population in northern and southern Luzon andlarge parts of Mindanao and the Visayas either has no access to electricityor has to rely on unreliable and costly generation by small local utilities.NEA is vigorously promoting the rural electrification program throughout thecountry. The Bank Group has been assisting the generation and transmissionexpansion under the Loans for the Fifth, Sixth and Seventh Power projects(Loan No. 809-PH and Credit No. 296-PH, and Loans No. 1034-PH and 1460-PH),by financing about 2,460 km of transmission lines and 1,425 MVA of substationfacilities in Luzon. The Overseas Economic Cooperation Fund of Japan hasprovided funds for the first stage of grid expansion in the Cagayan Valley innorthern Luzon. NPC is also expanding the grids in Mindanao and the Visayaswith assistance from the Asian Development Bank and Banque de Paris et desPays-Bas.

1.17 Although NPC was originally chartered to develop hydropower re-sources in the country, its role and responsibilities have been dramaticallyexpanded in the past few years following the Government's decision to makeit the prime force in the development of power generation from all sources.This change in policy was so fundamental that NPC has not yet beenable to adjust fully to the new situation. NPC has constructed five hydro-power stations and one thermal power station in its 40-year history, but itwill need to construct and operate about 75 large power projects in the next15 years. To carry out a program of the required magnitude successfully,NPC will need to greatly improve its capacity to construct and operate a muchlarger, more modern, and more complex power system. In particular, NPC needs

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to improve its capacity for system planning and financial management andcontrol, to streamline and improve its internal organization, and to developeffective training programs for its personnel. The Government recognizes thedifficult situation NPC faces and has taken a number of steps to improve itsimplementation capability and to enable the staff to cope with the largedevelopment program. An acceptable financial manager has been appointed,salary scales and merit systems have been improved to make NPC more competi-tive with private industry and specialized engineers have been recruited fromother government agencies for the newly organized nuclear and geothermalunits.

1.18 Since 1957 the Bank Group has made eight loans and one IDA creditto NPC, NEA and the Government for eight projects in the power sector./1 Fourprojects have been fully completed. The Fifth Power Project included asecond thermal unit at Bataan and transmission facilities in Luzon. Due toinitial delays in the delivery of transformers and poor weather and soilconditions which affected the implementation of the transmission component,disbursements are somewhat behind schedule. However, the loan is expected tobe fully disbursed before the closing date which has been postponed from June30, 1976 to June 30, 1978. The Sixth Power Project includes the constructionof the 100 MW Pantabangan hydropower plant and expansion of transmissionsystems in Luzon. The construction of the generating plant was completed inApril 1977 and the plant has since been operating at full capacity. Work ontransmission lines has been slow and completion will be delayed by one year.The loan for the Seventh Power Project which includes 1,360 km of transmissionlines only became effective in January 1978. While some progress has beenmade in the context of past loans to improve NPC's institutional capacity itsresponsibilities are expected to grow rapidly in the years ahead and strongefforts will be necessary to build up NPC's capability further so that it caneffectively implement a much larger power program. The Rural ElectrificationProject, which includes a two-year slice of the 1978-80 rural electrificationprogram, was considered by the Executive Directors in April 1978.

1.19 The project performance audit report on the Fourth Power Projectsuggested that the Bank should agree with NPC on procedures for annual reviewand revision of tariffs and specific targets for transmission expansion. Italso suggested that the Bank should assist in the development of managementtraining programs. These comments have been taken into account in the designof subsequent projects. The report also recommended greater use of localmanagement consultants to assist NPC. This suggestion was carefully consi-dered at the time of appraisal of the Seventh Power Project, but in view ofNPC's very rapidly growing responsibilities in the power sector and thetechnical requirements of managing a much larger program, it was decided that

/L The First Power Project (Binga) (Loan 183-PH); Second Power Project(Angat) (Loan 297-PH); Third Power Project (Maria Christina) (Loan325-PH); Fourth Power Project (Bataan No. 1) (Loan 491-PH); Fifth PowerProject (Bataan No. 2 - Transmission) (Loan 809-PH, Credit 296-PH);Sixth Power Project (Pantabangan) (Loan 1034-PH); Seventh Power Project(Transmission) (Loan 1460-PH); and Rural Electrification Project(Loan __-PH).

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the need for technical assistance could only be provided by consultants froman experienced operating utility of a size equivalent to NPC which hasconfronted problems similar to those which will be faced in the power sectorin the Philippines in the coming years. The project provides for training,management improvement and tariff studies.

1.20 An in-depth analysis of NPC's financial poL ition was conductedduring the appraisal of the Seventh Power Project /1 in early 1976. It wasbased on an expansion program which included commissioning of the Tabu andSan Roque hydroelectric dams in 1983, while acknowledging that these wouldprobably be replaced by Magat. Tabu and San Roque, designed to provide atotal of 340 MW installed capacity and 1,260 GWh energy, were estimated tocost US$800 million including price contingencies. Magat has an installedcapacity of 360 MW and 1,200 GWh energy at an overall cost of US$495 million.In comparison, Magat would, therefore, cost NPC considerably less, even if thetotal cost of the dam was charged to NPC (para. 4.09). This would mean animprovement in NPC's financial position as compared to the projections in theSeventh Power Project appraisal report.

1.21 Under previous Loan Agreements, NPC is required to earn a rate ofreturn of 8% on its revalued net fixed assets in operation. Failure toachieve the projected energy sales and higher than expected cost inflationhave combined to prevent NPC from attaining this rate of return; in 1977, NPCis estimated to have earned a rate of return of approximately 5%; about thefigure forecast during the Seventh Power Project appraisal and accepted by theBank for Loan 1460-PH. However, a major tariff increase has now been intro-duced in Mindanao and further increases in the Visayas and Luzon are underconsideration, which should enable NPC to increase its rate of return in 1978and thereafter.

Project Formulation

1.22 Cagayan Basin. The Cagayan river basin in Northern Luzon isone of the largest of the nine major basins in the Philippines. It coverssome 28,000 sq km and encompasses parts of eight provinces. The Magatriver, lying in the southwestern portion of the basin, is the largesttributary in the Cagayan basin river system. It is about 150 km long andjoins the Cagayan river in Isabela province. At the site of the proposed damthe average annual stream flow of the Magat river for the period 1948 to 1972was 6,698 MCM, ranging from a minimum of 3,931 MCM to a maximum of 12,528 MCM.

1.23 Land is one of the major resources of the basin. Of the total areaof 2.8 million ha about 1.0 million ha are cultivated, of which 40% is inIsabela, 30% in Cagayan and the balance equally divided between Nueva Viscayaand Mountain provinces. The Cagayan basin is an exporter of rice to Manila andSouthern Luzon. The main problem of agriculture is the lack of dependablewater for year round irrigation. Rainfall is usually sufficient to supportwet season cropping but is not only erratic as to time and place of occurence,but also is deficient in the dry season. In the rainfed areas cropping

/1 The Seventh Power Project in the Philippines, Staff Project ReportNo. 1552-PH, May 27, 1977.

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is limited to the wet season and the land is unproductive during the drymonths. Even on the irrigation systems in the basin only about 30 to40% of the land is irrigated during the dry season. A 1966 report on theland and water resources of the basin, prepared by a survey team of the USBureau of Reclamation (USBR), concluded that the Magat subbasin appeared tohave good potential for water resource exploitation and should be givenpriority for development.

1.24 Magat River Development. In 1973 the National Irrigation Adminis-tration (NIA) with USBR assistance completed a feasibility study of theMagat river project. The study concluded that development of a multipurposeproject on the river was technically feasible and economically viable. Theproject was envisaged to provide storage by building a high dam on the riverto allow year round irrigation of 104,000 ha and installation of a hydro-electric plant with a 300 MW capacity. Because of the physical size, largeestimated cost and long construction period NIA divided implementation ofthe project into two stages. Stage I consists of the rehabilitation and up-grading of the existing Magat River Irrigation System (MARIS) and Siffu RiverIrrigation System (SIFRIS) and construction of new facilities for a total of75,000 ha that can be served by run of river diversion in the wet season.The Asian Development Bank (ADB) is assisting NIA to rehabilitate 40,000 haof Stage I under the Angat-Magat Integrated Agricultural Development Project(AMIADP). The remaining 35,000 ha of Stage I are being developed with Bankassistance under Loan 1154-PH. The loan became effective in November 1975,and by the end of 1977 all design work was completed and constructioncontracts were awarded for the majority of works. Provision was also madeunder the loan for engineering studies (Part A) to evaluate the economicfeasibility of Stage II development and, if justified, to prepare (Part B)final designs, specifications and bid documents for construction of the damand appurtenant works. Part A of the study, completed in September 1976,confirmed the technical feasibility and economic viability of Stage IIdevelopment, which was redefined to include construction of the storage damand of additional irrigation facilities to increase the service area to102,000 ha, together with construction of a power station with an installedcapacity of 360 MW and the provision of generating and transmission equipment.

1.25 Stage II Development. In view of the large size of the development,the high cost, the lumpiness of the investment and the tight, 6-1/2 year con-struction schedule, the Government agreed in 1976 to a breakdown of Stage IIdevelopment into the following sequence of manageable packages (Figure 1.1):

(a) Package I - consisting of preconstruction works (access roads,permanent camp, etc.), dam foundation grouting, drainage gallerytunneling and the river diversion tunnels, together with consultingservices associated with these activities. NIA began work on thisPackage in 1976 with Government funding and is in the processof awarding a contract for construction of the tunnels to aPhilippines firm. Implementation is expected to take 3-1/2 years(1976-79).

(b) Package II - consisting of all civil works for the main dam, andappurtenant structures, reservoir resettlement, installed mechanical

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equipment and consulting services. This Package is the subject ofthe present report and the proposed Bank loan. Implementation isexpected to take 4-1/2 years (1978-1982).

(c) Package III - consisting of the civil works for the power component,,together with the supply and installation of penstocks, turbines,generators, electrical and mechanical equipment and transmissionlines. Foreign funding assistance would be required and implementa-tion is expected to take four years (1979-82).

(d) Package IV,- consisting of construction of the Baligatan diversiondam and the civil works for irrigation development of 27,000 ha ofcurrently rainfed land. Foreign financial assistance would besought-and implementation is expected to take four years (1979-82).

2. TIIE PROJECT AREA

General

2.01 The Magat river rises in the Cordillera Central mountains andjoins the Cagayan near Gamu in Isabela province in Northern Luzon. Thewatershed and reservoir areas upstream of the proposed dam are in therelatively mountainous terrain, while the irrigation service area is inthe broad Cagayan valley. The service area, about 350 km northeast ofManila, is almost entirely in Isabela province, with small portions inthe adjoining Quirino province. The proposed reservoir area would bemainly in Isabela and Ifugao provinces, with the head of the reservoirin Nueva Viscaya. (Map No. 13283).

2.02 The Magat dam would be built at a point some 6 km upstream ofthe existing MARIS diversion dam near the village of Planas across the gorgewhere the river emerges from the foothills into the plains. The servicearea is located on alluvial terraces in the flood plains of the Cagayanand Miagat rivers and tributary streams. It is bounded on the north bythe Mallig river, on the east by the Cagayan river and on the south andwest by the foothills of the Caraballo mountains and the Cordillera Centralrespectively. The slope of the land is from west to northeast. The landis generally level, although some of the older terraces along the westernedge of the service area have eroded significantly and show rolling topo-graphy. Drainage problems exist because of high rainfall intensities andflat relief. Low areas along the main rivers are subject to short periodsof inundation from backwaters from overflowing streams, however water velo-cities are low and cause little damage to structures or land. Soils arepredominantly dark grey or brown clays or clay loams, with angular blockystructures, medium to fine textures, slightly acidic reactions and slowinternal drainage. The soils are well suited to rice which has been ex-tensively grown in the area for many years without problems.

Climate

2.03 The climate in the project area is tropical and monsoonal.Warm temperatures throughout the year, with minimum change from month-to-month, allow a 12-month growing season with irrigation. Mean monthlytemperatures in the project service area range from 23.3 degrees centigrade

Table 2.1: SUMMARY OF CLIMATOLOGICAL DATA

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total

Ilagan. IsabelaRainfall /aAverage (mm) 65 41 44 63 123 160 184 191 222 309 356 188 1,946Maximum (mm) 262 157 147 218 350 359 493 790 486 922 916 504Minimum (mm) 3 0 0 0 8 34 21 41 55 58 52 43No. of rainy days /b 11 7 .6 6 10 11 13 13 14 16 17 15 139 0

Tuguegarao, CagavanRelative humidity (%) /c 80 76 72 68 69 75 77 79 81 81 84 84Temperature /dMean (OC) 23.8 24.7 26.6 27.7 29.3 29.1 28.5 28.1 27.7 27.3 25.4 24.1Mean maximum (OC) 29.1 31.1 33.2 35.6 36.4 35.6 34.7 33.1 33.5 31.8 29.9 28.8Mean minimum (OC) 19.4 19.7 21.0 22.9 23.8 24.2 23.7 23.0 23.6 22.7 21.8 20.5

Evaporation (mm) /e 138 152 198 222 221 188 174 168 164 162 133 133 2,053Prevailing wind direction /f NNW NW N N S S S S NNW N NNW NWind velocity (km/hr) 4 3 3 3 3 3 3 3 3 4 3 4No. of typhoons /g

(Cagayan and Ilocos) 0 0 0 2 2 5 14 13 18 10 11 3 78

/a Period of observation 1926-1975./b Period of observation 1940-1965./c Period of observation 1949-1974./d Period of observation 1903-1939, 1947-1975/e Period of observation 1957-1973./f Period of observation 1958-1970./g Period of observation 1948-1972.

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in January to 29.3 degrees centigrade in May. The hottest months areApril, May and June and the coldest months are December and January. About75% of the average annual rainfall of 1,900 mm falls in the six-month periodof July through December with the heaviest precipitation in November andthe least rainfall in February. However, in the catchment area of theproposed dam some 77% of the average annual rainfall of about 2,140 mm occursfrom May through October. The occurrence of typhoons is also centeredwithin the July-December period with the highest frequency of occurrencein September. An average of about three typhoons per year have passedthrough the Cagayan basin since 1948. No typhoon has been recorded for themonths January through March. The rainfall, together with river flows in thewet season, is generally adequate for a single rice crop. Dry-season cropping,however, entails considerably more risk and irrigation is essential for anassured crop.

Hydrology

2.04 The drainage area of the Magat river basin at the proposed damsiteis 4,143 sq km. Rainfall and stream flow records in the drainage area andadjoining catchments are extensive and the hydrologic data derived are ofhigh quality. Monthly streamflow records were made for the 25 year periodfrom 1948 to 1972 and average monthly flows ranged from about 240 MCM inFebruary and March to about 970 MCM in September and October. The minimumrecorded monthly flow was 37.4 MCM in March 1967, and the maximum 2,785.2 MCMin October 1971. Annual totals varied from a minimum of 3,931 MCM in 1959 toa maximum of 12,528 MCM in 1971, with an average of 6,698 MCM. Peak floodflows ranged from 1,700 cu m/sec for the period January through March,4,050 cu m/sec in April, 6,080 cu m/sec for May through August, to an esti-mated 20,000 cu m/sec in October 1971. A peak discharge of 3,900 cu m/sechas a 50% chance of occurring in any year. A maximum probable peak inflow of34,543 cu m/sec has been used for spillway and dam safety design purposes(para 3.13).

Sedimentation

2.05 The watershed terrain above the proposed Magat dam site is mostlyrugged grassland with scattered forests at higher elevations. The potentialfor erosion in the watershed is great due to the steep slopes and highrainfalls. However, the ground and canopy cover is adequate and currentsediment yields are moderate. A sediment discharge rating curve for theriver was derived from measurements of suspended sediment load at variouslocations and from computations of the bed load and the bed material load insuspension. It is estimated that sand and gravel comprise 51% of the averageannual sediment load upstream of the damsite, while 37% is silt and 12%clay. The computed sediment load between 1971 and 1976 averaged 8.5 millionton/year and the projected rate of sedimentation in the reservoir is anestimated 5.5 million cu meters/year. Most of the sediment deposition wouldoccur at elevations below the minimum supply level, although live storage inthe proposed reservoir would decrease from 933 MCM to 832 MCM over a 50 yearperiod. The sediment level at the face of the dam is not expected to reachthe invert of the outlet works for at least 100 years. These projectionsassume no increase in erosion in the watershed and, while there is evidenceof deteriorating conditions caused by man and by severe typhoons, the Govern-ment with Bank assistance is carrying out erosion control studies to ensure

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controlled watershed management practices in the future. These could resultin a decrease in sedimentation and larger annual water yields than assumed inthe projects' reservoir operation studies (para. 3.10).

Geology

2.06 The geology of the Philippines is dominated by the Philippine Rift,a regional fault zone that cuts northwestwards through the archipelago fromthe southeast corner of Mindanao to the northwest corner of Luzon. Thisstructure is a major branch of the deep-seated crustal fault system thatseparates the western edge of the Pacific Plate from the Austral-AsianPlates. The fault system is the principal focus for major earthquakes in thearea. Midway across Luzon a major fault system branches from the Rift andsplits into a number of regional faults that encompass the mountain ranges ofNorthern Luzon. The Cagayan basin is bounded by two of these upliftedmountain blocks, the Cordillera Central range to the west and the SierraMadre range to the east. As the mountain blocks were formed in differentgeological ages and have different rock compositions, the project area isunderlain by a complex array of metamorphic, igneous and sedimentary rocks.The proposed dam site is located at the transition zone of these rock for-mations close to faults which form the eastern edge of the Cordillera rangeand is consequently affected by major geologic structural action. Thebedrock at the site is composed predominantly of massive volcanic tuffs andagglomerates intercalated with basalt flows. The foundation characteristicsof the unweathered portion of this sequence of volcanic rocks range from goodto excellent. The principal exceptions occur where the rocks are cut byfaults, two of which have been identified near the proposed project structures.The significant fault, designated the Magat fault, was largely covered byweathered rocks and soils and was only discovered after extensive siteexploration exposed bedrock. It is located about 500 m downstream of theproposed dam, where it crosses the river parallel to the dam axis and has atotal width ranging from 150 to 200 m. Its shear zones consist of intenselysheared and brecciated rocks and vary in thickness from 20 cm to 40 m. Twoother major faults have been identified downstream of the proposed dam site,the significant one being the Santiago fault which runs northward along theeastern side of the Cordillera range about 10 km from the site and alongwhich seismic action is believed to occur. The Magat fault is probably amember of this fault system.

Seismicity

2.07 The international file of seismic events for Northern Luzon(January 1976) shows that in the past 79 years at least 146 seismic eventslarger than Richter Magnitude 5 have occurred within 320 km of Magat dam,although the actual number is probably greater because of inadequate report-ing and loss of data. Most of the events were in the ocean immediatelyoffshore of the Pacific coastal areas of Northern Luzon, however some 30appear to have had a location along an inferred northerly extension of theSantiago fault. The Magat fault also gives evidence of ground displacementdue to seismic activity. While these earthquakes have undoubtedly transmittedground motions to the dam site, no evidence of very recent seismic movementhas been observed along any of the major geological structures identified atthe site. The faults at the dam site are assessed to be more than 100,000years old and recurrence of movement is thought to be unlikely.

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Irrigation Facilities

2.08 About 50,000 ha of land in the project area fall within the ex-isting MARIS and SIFRIS systems operated by NIA. The two national systemswere completed in the 1960s. Although designed to serve an area of 50,000 ha,the two systems only irrigate 40,000 ha because of a lack of terminal facili-ties. The existing systems are being rehabilitated, upgraded and expanded toa total of 75,000 ha under Stage I of the Magat project with ADB and Bankassistance. Construction work on Stage I is expected to be completed by1980, except for modifications of the MARIS diversion dam which will befinished in June 1982 to fit in with the closure of the proposed Magat dam.

2.09 The final phase of irrigation development in the Magat servicearea would amount to some 27,000 ha and would be dependent on constructionof the Magat dam. About half of the area would be along the southeasternedge of the Stage I area and would obtain water from the proposed Magatreservoir through Baligatan creek, without passing through the power stationturbines. Only about 5,700 ha of land are currently served by crude comm-unal and private irrigation facilities, while the remainder is cultivatedunder rainfed conditions.

Population, Farm Size and Land Tenure

2.10 Total population in the 102,000 ha service area of the proposeddam is estimated at about 282,000 people. The rural population of the Stage Iproject area consists of about 24,000 farm families and some 9,000 otherfamilies occupied principally or entirely in agricultural production, whilein the Stage II area there are 8,000 farm families and about 4,400 other ruralfamilies. The average size of farm in the service area is 3.2 ha and thereis little divergence from the mean in the more densely populated andbetter developed Stage I area. In the more backward and largely rainfedStage II area, farm size distribution is more skewed, with 10% of the farmscovering 35% of the area. After completion of the land transfer processinitiated under the Government's program of agrarian reform some 21,500owner operators, the equivalent of 67% of the farmers, would cultivate74,000 ha or 73% of the project area. The remaining 10,500 farmers wouldbe leaseholders.

Reservoir Area

2.11 The proposed dam would create a reservoir with a surface area of45 sq km at full supply level of 193 m. At minimum supply level the watersurface elevation would be 160 m and the surface area 15 sq km. The reservoirwould be situated along a 30 km stretch of the Magat river where it passesthrough hilly terrain. Most of the area flooded would be restricted torelatively narrow river bottoms. However, the downstream section of thereservoir would flood to a width of about 4 km. The reservoir would be ofthis shape when full or nearly so, a condition which would exist for about60% of the time.

2.12 Present land use in the area that would be affected by the reservoiris as follows:

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Ranches 1,965 haRice land 1,335 "

Corn land 75 "

Fishponds 5 "

Residential 70 "

Total 3,450 "

The remaining 1,050 ha in the reservoir area are taken up by rivers, creeksand scattered patches of cogon grassland. The dam would submerge sevensmall barrios in Ifugao province, one small barrio in Nueva Viscaya provinceand two barrios in Isabela province, one of which would be the relativelylarge barrio of Planas. A total of 300 families, or 1,500 people, would beaffected by the reservoir and would need to be resettled under the project(para. 3.19).

Transportation

2.13 The Philippine-Japan Friendship Highway connecting Manila with theport of Aparri on the Babuyan channel, passes through Santiago and thesoutheastern part of the project area. The highway is concrete surfaced,but is susceptible to damage from washouts and landslides due to heavyrainfall during typhoons. The 20 km gravel surfaced road between Santiagoand the MARIS diversion dam is in poor condition and would require upgradingand sustained maintenance to permit unimpeded construction of the Magat dam.NIA has built an all-weather, gravel road up the right side of the Magatriver from the MARIS diversion dam for a distance of 10 km to the proposeddam site. The service area is well provided with national, provincial andlocal access roads. The network of local access and service roads is beingupgraded and expanded by NIA under Stage I of the project, while threeprovincial roads are being improved under the Chico River Irrigation Project(Loan 1227-PH). Daily commercial air service to Manila is available at theCauayan airport about 35 km northeast of the dam site. In addition NIA hasbuilt an airstrip with a 1,200 m long paved runway adjacent to the MARISdiversion dam.

Transmission Facilities

2.14 The National Power Corporation's (NPC) development plans forextension of the Central Luzon grid call for the construction of a doublecircuit 230 kV transmission line from Ambuklao to Santiago, and a singlecircuit 230 kV line from Santiago to Tuguegarao. At present NPC is construct-ing a double circuit 230 kV line with only one circuit strung between Ambuklao,Santiago and Tuguegarao, due for completion in 1979 with assistance from theOverseas Economic Cooperation Fund of Japan. The second circuit betweenSantiago and Ambuklao would be strung simultaneously with installation of thefour generating units in the proposed Magat power station. By 1982 therewould be two 230 kV circuits from Santiago via Ambuklao and Binga to SanManuel from which point south there would be three circuits. This transmissionrepresents the system into which Magat would be feeding and over which Magatenergy would be delivered to load areas primarily to the south. The otheraddition required by the Magat plant would be a 14 km 230 kV double circuittransmission line from Magat to Santiago plus the switchyard facilities atboth stations (Map No. 3562R4).

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3. THE PROJECT

3.01 The project proposed for Bank financing (Package II) would include:

(a) construction of the main dam across the Magat river consisting of

a concrete spillway, a power intake section and adjoining rockfill

embankment sections;

(b) construction of the rockfill Baligatan dike running from the right

abutment of the main dam to the left abutment of the Baligatan

creek dam;

(c) construction of the rockfill Baligatan creek dam, together with an

outlet conduit and control works;

(d) resettlement within the service area of the dam of about 500 families

affected by construction of the dam; and

(e) provision of consulting services to assist NIA and NPC in design and

construction supervision.

3.02 The Magat dam and Baligatan dike would provide 933 MCM of live

reservoir storage for downstream year round irrigation of 89,700 ha of land

via the existing MIARIS diversion dam and for power generation. The Baligatan

creek dam would control additional water releases from the reservoir for year

round irrigation of 12,300 ha of currently rainfed land via the planned

Baligatan diversion dam.

Project Works

3.03 Main Dam and Spillway. The main dam would be 1,800 m long, made up

of a concrete chute spillway and power intake section 450 m long, a left

abutment rockfill embankment section 350 m long and a river closure and right

abutment rockfill embankment section 1,000 m long. Mtaximum height of the

spillway section would be 60 m and of the embankment section 114 m. Design

of the main dam has evolved after two years of intensive site investigations

and takes full account of the usual problems inherent in large dam construc-

tion, as well as the particularly complex problems of geology, seismicity and

hydrology found in north-eastern Luzon. Conservative design criteria have

been adopted for the embankment sections, with heavy outer shells of random

fill and rock surrounding a sloping impervious core. The proposed slope of

the upstream face would be 2.65:1 and 2.0:1 for the downstream face. About

25% of the 12 million cubic meters of embankment materials is expected to

come from required excavation and the balance from a quarry on the left bank

of the river, borrow pits and the river bed. The proposed zoning of the fill

is relatively complex, but it is designed to provide a structure capable of

withstanding heavy seismic shaking and minor displacements. It also provides

for optimum utilization of materials from excavation and from readily avail-

able borrow areas.

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3.04 The spillway and power intake structure would be a concrete-gravitysection situated on the left bank of the river. The location was determinedby site geology and economic consideration of alternative dam designs. Thespillway would have seven 16.5 m wide and 13.5 m high radial crest gates forflood water discharge and two 6.0 m wide and 12.5 m high low level orificegates for irrigation or emergency draw-down water releases. Spillway dischargewould be into a 450 m long reinforced concrete open chute with terminalflip-buckets and plunge pool. Detailed hydraulic model and simulationstudies of the spillway outlet structures are in progress to ensure optimumenergy dissipation. Recent experiences at the Tarbela dam in Pakistan arebeing given full consideration in development of the design.

3.05 The power intake structure would provide six gated conduits toconnect with 5.5 m diameter steel penstocks to be constructed as part of theproposed power development. Trashracks, closure gates 5.0 m high and 6.0 mwide, and two emergency bulkhead gates would be installed. Only over-burdenexcavation for the penstock and powerhouse foundations would be included inthe dam contract. As the interface between the concrete intake structure andthe right embankment dam is over 60 m high, the possibilities of embankmentcracking and hydraulic fracturing of the fill at the interface have beenrecognized and an appropriate embankment "wrap-around" concrete designdeveloped. The lower interface between the spillway and the left abutmentembankment would be constructed similarly.

3.06 Baligatan Dike and Baligatan Creek Dam. The Baligatan dike wouldbe 1,450 m long and would have a maximum height of 35 m, but would only beabout 20 m high for most of its length, with a volume of fill of about1.9 million cu m. Construction of the dike would utilize material fromrequired excavations in the external shells and transition zones. As theshell materials would not have as high a strength as the river gravels orrock fill to be used in the two dams, the slopes would be flattened to 2.75:1on the upstream side and 2.50:1 on the downstream side. The Baligatan creekdam would be 700 m long with a maximum height of 50 m and a volume of fillof about 1.1 million cu m. The dam would have a slope of 2.65:1 on theupstream side and 2.0:1 on the downstream side, the same section as the maindam.

Engineering and Construction

3.07 Engineering Studies. The 1973 NIA/USBR Feasibility Study (para. 1.23)proposed a composite concrete/rockfill dam with a central gated overflowspillway. This concept was the starting point for detailed studies carriedout under Stage I of the project with Bank assistance (Loan 1154-PH). Part Aof these studies covered engineering and economic investigations to confirmthe technical feasibility of the project and assess its economic justification.The consultants engaged by NIA for the studies commenced work in late 1975and completed a Project Design Report (PDR) in September 1976.

3.08 The consultants reviewed and modified the 1973 design reportproposals in the light of additional site investigations and studied alterna-tive design concepts. Two layouts, the original composite dam proposaland the embankment dam now proposed, were identified for detailed study of

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technical quality, implementation time and construction cost. The Baligatandike and Baligatan creek dam and outlet works, would be common to bothschemes, the required volumes of concrete and fill and the length of construc-tion time would constitute the main differences. While the composite schemewith a concrete gravity spillway centrally located in the river valley wouldhave hydraulic advantages over the proposed embankment scheme with a chutespillway, the latter was selected for the following considerations:

(a) the base (June 1978) cost of the embankment scheme is estimatedto be US$38 million less than the cost of the composite scheme;

(b) an accelerated construction schedule would be practical for theembankment scheme, leading to completion by December 1982 insteadof late 1984 as envisaged at Stage I appraisal;

(c) the composite scheme would require at least two years longer todesign and construct, resulting in a delay in project benefits;

(d) foundation conditions favor an embankment scheme in view of possibleregional seismic activity; the composite design would require 90 mhigh interfaces between concrete and fill which would be verysuscepible to any ground movement; and

(e) the composite scheme, with a concrete gravity section 650 m long anda maxium height of 114 m, would need an additional 2 million cu m ofconcrete and potential constraints in cement delivery to site wouldbe a major risk factor in construction scheduling.

3.09 Project Design. Following completion of Part A of the studies, NIAwith Bank approval authorized the consultants to proceed with Part B, thefinalization of designs and preparation of contract documents. NIA alsoappointed a specialist international Board of Consultants (NBC) to assist inreview and approval of consultants' designs. The designs now proposed forconstruction are therefore based on very extensive and detailed engineeringplanning and analysis, reviewed and approved by a panel of specialist consult-ants. The key factors governing the adopted project design features were:reservoir operation studies, site geology and seismology, design flood andriver diversion during construction.

3.10 Reservoir Operation Studies. Reservoir operation studies were per-formed to determine (i) the optimum size of the reservoir, power plant, andirrigation area to be served, (ii) the extent of irrigation water shortagesand (iii) power and energy generation. Simulated reservoir operations for a15-year period were performed for over 20 different combinations of reservoirsizes, irrigation areas, and power plant capacities. The results of thesestudies, which balanced projected irrigation and power benefits againstprojected costs, indicated that (i) reservoir size up to a full supply levelof 193 m would be justified, (ii) installation of four 90 MW generating unitswould be justified initially, with provision of space for possible laterinstallation of two additional 90 MW units a matter of long range policy,(iii) development of an additional irrigation area up to 27,000 ha would be

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justified, (iv) irrigation water shortages once every five years on averagecould be expected, but would be nominal and overall would be in the range of3% only. The installation of 360 MW generating capacity would result in anaverage annual energy production of 1,200 GWh and provide additional firmcapacity for the Luzon grid varying between 172 and 360 MW. An assurance wasobtained that the Government would satisfy the Bank of the economic andtechnical justification of any increase in installed generating capacityabove 360 MW. The optimum reservoir operation simulation was based on thefollowing design parameters:

(a) reservoir full supply level at elevation 193 m;

(b) reservoir minimum supply level at elevation 160 m;

(c) effective live storage of 832 MCM, allowing for 50 years ofsedimentation;

(d) irrigation diversion requirements for a total area of 102,000 ha;

(e) an installed generating capacity of 360 MW rated at full supplylevel with a net head of 87 m;

(f) a minimum capacity of 172 MW at minimum supply level with a nethead of 54 m;

(g) a priority rule that when irrigation water shortages occur theyare first allocated to the Baligatan diversion dam since thesereleases do not produce energy generation; and

(h) a reservoir rule curve with controlled releases to hold thereservoir at or below elevation 185 m in June and July and eleva-tion 190 m in August and September.

On these assumptions annual average water use would be as follows:

Percentage ofVolume (MCM) Annual Inflow

Evaporation loss 37 0.5Reservoir spill 415 5.9Irrigation only (Baligatan) 285 4.1Irrigation and power (Magat) 1,682 24.1Power only 4,562 65.4

Total 6,981 100.0

3.11 Geology and Seismicity. The complex geological and seismic char-acteristics of the area (para. 2.06 and 2.07) necessitated unusually exten-sive site exploration. Over 3,800 ha of geological mapping, 18,300 m ofexploratory drilling, 13,400 m of excavated surface trenches and 360 m ofexploratory tunneling were carried out. Findings have been under continuous

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review by the project consultants supported by specialists in the fields of

geology, geotechnology and seismology. The foundation rock at the site is

relatively weak with the numerous shear zones and faults and deep weathering

responsible for large variations in its bearing capacity. Exposure of the

major Magat fault during site exploration (para. 2.05) and extensive study of

its implications by the project consultants and the NBC led to revision of

the layout of dam structures adopted on completion of Part A of the consultants'

studies. The original layout located the diversion tunnels, the spillway and

the powerhouse on the right bank of the river. The spillway crest section

was founded on excellent agglomerate bedrock, but the proposed spillway chute

would have crossed the Magat fault zone for a distance of 200 to 500 m

downstream of the crest. While the in situ rock within the fault zone was

found to have enough bearing strength to provide an acceptable foundation for

the spillway, the NBC recommended development of alternative layouts because

of the possibility of seismic related movement in the intensely sheared rock

and because of the negligible resistance of the material to erosion by

surface water. Consideration was given to either shortening the spillway

chute or lengthening it to bridge the fault zone, however both layouts

significantly increased the probability of major erosion at the spillway plunge

pool. The NBC recommended relocation of the spillway. Intensive additional

exploration was carried out on the left bank of the river and rock conditions

were found to be generally favorable. A thrust fault, named the Korokan

fault, was exposed but the NBC considered it to be much less significant than

the Magat fault and stated that present day earthquake induced displacement

was not a probability. However, as a precaution, as few concrete structures

as possible would be founded on the trace of the Korokan fault. As a result

of the additional geological information the axis of the main dam was re-

aligned and the spillway and powerhouse were relocated on the left bank of

the river. The proposed project layout takes full account of the extensive

data now available. The concrete structures, the powerhouse and the outfall

of the chute spillway would be sited clear of all major shear zones and

faults, the spillway plunge pool being located in sound rock just upstream of

the Magat fault. Provision has been made in the bid documents and cost

estimates for concrete lining of the plunge pool (Figures 3.1 and 3.2).

3.12 Design parameters for the dam take full account of potential loads

due to seismic activity and possible small ground movement. Parameters are

based on estimates of the effects of earthquake occurrence along a nearby

(10 km) relatively small active fault (6.0 on Richter scale) and along a

major, but more distant (40 km) active fault (8.0 on Richter scale). The

latter is the controlling design earthquake and a maximum ground acceleration

of 0.4 g has been adopted for basic design. Final designs will be checked by

sophisticated dynamic loading analyses techniques. Instrumentation is being

installed in the vicinity of the site for long-term study of seismic activity

and correlation with data from the normal large dam instrumentation that

would be installed during construction.

3.13 Design Floods. A high standard of safety has been adopted in

selecting design flood values. Detailed analyses of streamflow and rainfall

data from the Cagayan and adjoining basins were made and regional and river

peak discharge, frequency and drainage area relationships derived. The

average annual peak discharge at the dam site is 4,500 cu m/sec. Peak flood

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discharges for 100-year, 1,000-year, 10,000-year frequencies are about13,900, 21,500 and 30,600 cu m/sec respectively. The reservoir inflow designflood hydrograph was derived by estimating maximum storm rainfall over theMagat watershed and basin lag time. Design storm values were based onmaximum point rainfall records at Baguio, located close to the Magat basinand having the highest recorded rainfall in the Philippines. An inflowdesign peak flow of 34,453 cu m/sec and a ten day volume of 8,420 MCM wasused in flood routing for the proposed spillway configuration.

3.14 Proposed full supply level (FSL) for the reservoir is elevation193 m with the spillway crest elevation 174 m. Design flood routing assumeda full reservoir when flood inflow commences with subsequent gate openingsmaintaining the FSL until all gates are fully raised. Spillway discharge atthis stage would be about 22,000 cu m/sec. As flood inflow continues withuncontrolled spillway discharge the maximum reservoir level would reachelevation 196.3 m with a peak spillway discharge of about 31,000 cu m/sec.Proposed dam crest level is elevation 199 m to allow freeboard for waveaction. Hydraulic model studies for the proposed spillway chute are inprogress to assist in design of the chute and flip buckets for flood dis-charges.

3.15 River Diversion During Construction. Due to the magnitude offloods and the restricted space in the valley at the proposed damsite,diversion of the Magat river during dam construction has a significantinfluence on design layout and construction scheduling. The 25-year returnperiod seasonal flows used in developing the diversion scheme are 9,500cu m/sec annual, 6,120 cu m/sec May through August, and 1,750 cu m/secJanuary through April. With adoption of an embankment dam, provision of diver-sions tunnels around the dam site is essential. However, conventional tunnelsof the capacity required for full river control would not be economicallypractical and construction planning has been based on use of two 12 m diameterconcrete lined tunnels with a maximum discharge capacity of 5,400 cu m/secplus cofferdam overspill in the early stages of construction. To allow forthis, excavation of riverbed to foundation rock and replacement by concreteis scheduled following completion of tunnels and cofferdams. Subsequentwet-season overspill would be carried by the excavated spillway channel andby the spillway structure during construction. To minimize erosion damagecofferdam protection would include heavy riprap on the crest and armoring ofthe downstream toe. The proposed diversion scheme will require precisescheduling of excavation, cofferdam and embankment fill and concrete placementtogether with availability of the diversion tunnels on schedule, necessitatinga high level of contracting capability and construction supervision.

3.16 Construction Schedule. NIA has an ongoing program of force accountfoundation grouting along the alignment of the Baligatan dike and is currentlyfinalizing negotiations with a contractor for construction of the diversiontunnels. These works are included in the ongoing Package I of the Magat deve-lopment being financed entirely from Government sources (para. 1.24). NIAproposes to award the Magat dam contract by June 15, 1978 (para. 3.25). Con-struction of the main dam, Baligatan dike and Baligatan creek dam would form

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part of a single contract. The contractor would also be responsible forinstallation of the spillway, power intake and Baligatan creek gates whichwould be supplied under a separately financed contract (para. 3.23).

3.17 Construction of the dam is scheduled over four construction seasonswith completion by December 1982. The staging of construction to safely passthe large wet season river flows and timely completion of the diversiontunnels would be critical factors in meeting the planned timetable. Availa-bility of materials on the site, particularly cement, will be of paramountimportance. The average concrete placement over a 32 month period betweenMay 1979 and December 1981 is estimated at 31,000 cu meters per month, with apeak rate of 1,500 cu meters per day. The average daily cement requirementwould be about 250 tons with a peak demand of 350 tons. There are no cementfactories in the Cagayan valley and all cement would have to be delivered tosite from Central Luzon factories by road haulage over the Philippine - JapanFriendship Highway. This would impose a considerable risk factor in view ofthe susceptibility of the highway to damage during heavy rainfall (para.2.13). To minimize the risk the dam contractor would be required to ensureprovision of cement storage facilities near the site. A storage capacity of10,000 tons would be needed. The excavation and embankment fill requirementswould also be demanding, with a peak material movement of 900,000 cu metersper month. The planned construction schedule is shown in Figure 3.1 anddetailed construction quantities are given in Annex 1.

Reservoir Resettlement

3.18 NIA has created within the Magat River Multipurpose Project (MRMP)organization a Resettlement and Reservoir Division (RRD) with responsibilityfor resettling the families affected by the reservoir in three resettlementsites. The San Marcos site is situated in the Stage I service area and theSan Miguel and San Antonio sites are in the proposed Stage II area. Allresettlement sites would be provided with year round irrigation. NIA wouldpurchase the land and provide each family from the reservoir area with a 3 hafarm plot, the limit for irrigated holdings under agrarian reform legislation,together with a 600 sq m house plot in a newly established barrio site. Asthe total buy-out of owner-operators and the ejection of tenant farmers onrice and corn lands is forbidden, some 200 existing owner operators andtenant farmers in the resettlement areas would also be provided with a 3 hafarm plot and a house plot. NIA would pay compensation for land, houses,fruit and shade trees and all improvements to land submerged by the dam.

3.19 Some 500 families, 300 from the reservoir and 200 from the resettle-ment area, would be involved in the program. Each family would be providedwith an NIA-built house and each of the three new barrio sites would havewater, electricity, a school, church and community center built as part ofthe project. The resettled families would have to repay for their new homesand land in 15 equal annual installments at an interest rate of 6% per annum,in the same way as land reform beneficiaries. Provision would be made underthe project for financial assistance to the resettled families in the way ofcrop production inputs and subsistence until they have harvested the first

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crop in their new areas. A Resettlement Committee has been established,consisting of all concerned central and provincial government agencies, themayors of the affected municipalities and the barrio captains from the reservoirarea communities. The Committee is responsible for reviewing all plans andproposals for the reservoir area to ensure that resettlement takes placesmoothly and with the minimum amount of dislocation. An assurance wasobtained that NIA would keep the Bank informed of the arrangements to be madefor resettlement of the affected population and that the Bank would have anopportunity to comment before they were implemented.

Cost Estimates

3.20 The total project cost is estimated at US$346.0 million, of whichUS$178.0 million or 51% is foreign exchange. The direct foreign exchangerequirement is estimated at US$146.0 million and the indirect foreign exchangeat US$30.0 million. Construction costs are based on a detailed contractor-type estimate assuming a bid from a joint venture company consisting of onelocal and one foreign contracting firm. Unit prices are based on equipmentuse (purchase, operation and depreciation), labor, materials and contractors'overhead and profit in accordance with the anticipated construction schedule.Prices include about 6% for taxes and are based on costs for similar works inthe Philippines in January 1977, and suppliers estimates for materials andequipment in April 1977. NIA's costs for construction supervision andadministration are included under engineering./I The base cost estimate isexpressed in June 1978 prices, and was obtained by increasing January 1977civil works estimates by 14% and April 1977 equipment estimates by 9% toallow for inflation. A physical contingency factor based on the degree ofinvestigations completed to date was applied. A factor of 7% was used forthe spillway gates and 9% for civil works and reservoir clearing and resettle-ment. Costs due to expected price increases over the implementation periodamount to about 16% of base cost plus physical contingencies and assume thefollowing annual rates of price inflation for local and foreign costs:

Annual Inflation Rate (%)1978 1979 1980-82

Civil works and services 8 7.5 7Equipment 7 6.5 6

3.21 Details of project cost estimates are presented in Table 3.1 andsummarized below, while the overall estimated costs of Stage II developmentof the MRIT are given in Table 3.2.

/1 Up to January 1978, NIA was exempt from the payment of duty on equipment,whether imported for its own use or on behalf of a contractor. TheDepartment of Finance has terminated NIA's exemption and instructed theagency to make budgetary provisions for duties. The mechanics of imple-mentation are not clear and are currently under discussion, as theGovernment is the sole source of NIA's funds. In view of the uncer-tainty, the estimated duties on equipment of about US$4.0 million havenot been included in the project costs.

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Local Foreign Total Local Foreign Total Foreignexchange

---- (P million) --- -- (US$ million) -- (%)

Reservoir clearance andresettlement 52.5 1.5 54.0 7.1 0.2 7.3 3

Civil works 787.4 907.2 1,694.6 106.4 122.6 229.0 53Gate supply - 97.7 97.7 - 1 13.2 100

Consulting services 12.6 38.5 51.1 1.7 - 6- , 75Engineering, supervisionand administration 145.0 3.0 148.0 19.6 0.4 20.0 2

Base cost estimate 997.5 1,047.9 2.045.4 134.8 141.6 276.4 51Physical contin-gencies 76.2 88.8 165.0 10.3 12.0 22.3 54

Expected priceincreases 169.5 180.5 350.0 22.9 24.4 47.3 52

Total project cost 1,243.2 1,317.2 2,560.4 168.0 178.0 346.0 51

Financing

3.22 The total estimated cost of development of the Magat river includingthe dam, hydro-electric works and irrigation facilities is estimated atUS$556.0 million, with a foreign exchange cost of US$286.0 million. Thesummarized costs and proposed sources of foreign financial assistance for thefour packages into which the Magat development has been subdivided are asfollows:

CostsLocal Foreign Total

Package --- (US$ million) --- Sources of foreign assistance

I. (Diversion works) 44.2 15.8 60.0 None

II. (Main dam) 168.0 178.0 346.0 Current Bank loan andsupplier credit

III. (Power) 20.5 68.5 89.0 Supplier credit

IV. (Irrigation) 37.3 23.7 61.0 Bank

Total 270.0 286.0 556.0

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Table 3.1: PROJECT COST ESTIMATE (Package II)

ForeignLocal Foreign Total Local Foreign Total exchange----- (Pesos million) ----- ------- (US$ million) ----- (%)

Reservoir Clearance and Resettlement 52.5 1.5 54.0 7.1 0.2 7.3 3

Civil WorksMobilization, temporary works 83.6 45.1 128.7 11.3 6.1 17.4 35Diversion works 14.1 20.7 34.8 1.9 2.8 4.7 60

Embankments:Main dam 165.0 307.1 472.1 22.3 41.5 63.8 65Baligatan dike 40.0 73.2 113.2 5.4 9.9 15.3 65Baligatan creek dam 22.2 41.4 63.6 3.0 5.6 8.6 65

Concrete structures:Excavation 80.6 149.5 230.1 10.9 20.2 31.1 65Concrete works 374.5 259.8 634.3 50.6 35.1 85.7 41

Gate installation 7.4 10.4 17.8 1.0 1.4 2.4 60

Subtotal 787.4 907.2 1,694.6 106.4 122.6 229.0 53

Gate Supply - 97.7 97.7 - 13.2 13.2 100

Consulting Services 12.6 38.5 51.1 1.7 5.2 6.9 75

Engineering. Supervision and 145.0 3.0 148.0 19.6 0.4 20.0 2Administration

Base Cost Estimate 997.5 1,047.9 2,045.4 134.8 141.6 276.4 51

Physical Contingencies 76.2 88.8 165.0 10.3 12.0 22.3 54

Expected Price Increases 169.5 180.5 350.0 22.9 24.4 47.3 52

Total project cost 1.243.2 1,317.2 2,560.4 168.0 178.0 346.0 51

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Table 3.2: ESTIMATED TOTAL COST STAGE II DEVELOPMENT

Foreign

Local Foreign Total Local Foreign Total exchange- --- (Pesos million) ----- ------- (US$ million) ----- (%)

Package I: Preconstruction Activities, Force Account Grouting. Drainage Gallery,Diversion Tunnels

Site preparation 70.3 3.7 74.0 9.5 0.5 10.0 5

Damsite grouting 30.3 13.3 43.6 4.1 1.8 5.9 30

Drainage gallery 7.4 7.4 14.8 1.0 1.0 2.0 50

Diversion tunnels 148.0 57.0 205.0 20.0 7.7 27.7 28

Communication system 1.5 12.6 14.1 0.2 1.7 1.9 90

Consulting services 2.9 8.9 11.8 0.4 1.2 1.6 75

Engineering, supervision, andadministration 29.6 - 29.6 4.0 - 4.0 -

Base cost estimate 290.0 102.9 392.9 39.2 13.9 53.1 26

Physical contingencies 22.9 9.6 32.5 3.1 1.3 4.4 30

Expected price increases 14.1 4.4 18.5 1.9 0.6 2.5 24

Total cost 327.0 116.9 443.9 44.2 15.8 60.0 26

Package II: Magat Dam. Spillwav. Power Intake; Resettlement /a

Total cost 1,243.2 1,317.2 2,560.4 168.0 178.0 346.0 51

Package III: Powerhouse, Generating Units (360 MW). Transmission

Powerhouse civil works 65.1 96.9 162.0 8.8 13.1 21.9 60

Generating units 7.4 222.0 229.4 1.0 30.0 31.0 97

Mechanical/electrical equipment 3.7 37.0 40.7 0.5 5.0 5.5 90

Transmission facilities 10.4 25.1 35.5 1.4 3.4 4.8 70





Total cost 151.7 506.8 658.5 20.5 68.5 89.0 77

Package IV: Irrigation

Baligatan diversion dam 6.7 7.4 14.1 0.9 1.0 1.9 53

Irrigation works 159.1 114.7 273.8 21.5 15.5 37.0 42





Total cost 276.0 175.4 451.4 37.3 23.7 61.0 39

Total Stage II cost 1,997.9 2,116.3 4,114.2 270.0 286.0 556.0 51

/a For details see Table 3.1.

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Force account work on Package I, consisting of foundation grouting andtunneling of a drainage gallery along the damsite axis, has already startedand NIA has awarded a US$27.0 million contract for the river diversiontunnels (para. 3.16). The works in Package I are an essential prerequisitefor construction of the Magat dam under the project proposed for Bank assis-tance. Construction of the dam would not be justified unless the power andirrigation phases of the development are implemented in a timely manner so asto be ready for operation by January 1, 1983, assurances to this effect wereobtained from the Government. The National Power Corporation (NPC) wouldundertake the construction of the power component (Package III) by callingfor international bids on a turnkey basis. The Government has alreadyreceived a number of offers of financial assistance for the power component.NPC proposes to call for bids for the component by mid-1978 and to proceedwith award of the contract by the end of the year. Assurances were obtainedthat any contractual and financial arrangements proposed to the Governmentand/or NPC for the power component would be subject to review by the Bankprior to conclusion of such agreements.

3.23 The proposed Bank loan for Package II of US$150 million wouldfinance 84% of the foreign exchange cost of the project and would cover43% of total project costs. The Government would provide the remainingP 1,450 million (US$196.0 million) from annual budget appropriations. Ofthis amount about P 207.2 million (US$28.0 million) is foreign exchange. NIAintends to procure the supply of the spillway, power intake and Baligatancreek gates (US$16.0 million) by supplier financing. With assistance of theconsultants, NIA has prequalified potential suppliers and expects to call forbids for the supply of the gates by the middle of 1978 and to proceed withaward of the contract by the end of the year. While the provision of thegates would not be included in the Bank financed project, they are essentialfor the functioning of the dam and assurances were obtained that NIA wouldmake arrangements satisfactory to the Bank with a qualified supplier fortheir timely provision. To ensure a timely and continuous flow of funds,assurances were obtained that the Government would cause NIA to set up aspecial fund to service the project which would be replenished by theGovernment at monthly intervals to a level equivalent to the estimatedrequirement for the next two months. Establishment of the fund would be acondition of effectiveness of the loan.

Procurement

3.24 Materials testing equipment and vehicles, costing about US$0.4 mil-lion, would be procured after international bidding in accordance with BankGroup Guidelines. A preference limited to 15% of the c.i.f. price ofimported goods, or the custom duty, whichever is lower, would be extended tolocal manufacturers in the evaluation of bids. Local shopping is appropriatefor off-the-shelf items costing less than US$10,000 each because the advan-tages of international competitive bidding would be clearly outweighed by theadministrative costs involved. The total cost of such items would not exceedUS$300,000. Bank staff have reviewed the local procedures and they areacceptable. There is adequate competition and foreign firms can participate.A list of equipment requirements is given in Annex 1.

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3.25 Civil works on the Magat dam and appurtenant structures (US$229.0 mil-

lion) were widely advertised internationally and prequalification of prospectivebidders has been completed according to Bank Group Guidelines. Prequalifi-cation forms were issued in June 1977 to 47 interested companies and jointventures (24 foreign and 23 local) and submissions were received in September

1977 from 16 firms. Following technical and financial evaluation, ninecompanies were prequalified. Bidding documents were issued to the nine

prospective bidders in January 1978 and bids are due on April 27, 1978. Workassociated with clearing of the reservoir and resettlement of the affectedpopulation (US$2.4 million) would be carried out mainly by local contractors.Bank staff have reviewed the local procedures for competitive bidding and

they are acceptable. There is potentially adequate competition and foreignfirms can participate.

Disbursements

3.26 Disbursements would be made at the rate of 100% of the foreign

exchange cost of directly imported equipment, and 100% of the ex-factoryprice of locally manufactured equipment and 65% for imported equipment

procured locally. Disbursements for civil works would be 40% of certifiedmonthly progress payments or expenditures. Disbursement for force account

works would be made against certificates of expenditure, the documentationfor which would not be submitted to the Bank for review, but would be retained

by the borrower and made available for inspection by the Bank's supervisionmissions. For civil works contractors' mobilization and equipment, disburse-ments would be at the rate of 100% of foreign exchan&e cqp)t.

-=liat RU)bEDFi7~IsSEYE~fitrXiKUf;e of t e><rat of100% of toaIto

3.27 Disbursement of the Bank loan would be against import documentation,

contracts and certified records of payment or expenditure. It is expectedthat disbursements would be completed by December 31, 1983, approximately one

year after the end of construction. In consultation with the Bank, savingsunder the project would be used to cover remaining foreign exchange costs of

the project. An estimated schedule of expenditures, a semi-annual disburse-ment schedule and a proposed allocation of loan proceeds are given in Annex 1.

Accounts and Audit

3.28 The NIA is a Government agency and its accounts are auditedannually by the Governments' Commission on Audit. Assurances were obtainedthat NIA would maintain separate accounts for the project and that afteraudit by the Commission on Audit, the project accounts, together with theauditor's comments and opinion on the certification of expenditure for force

account work, would be sent to the Bank within six months of the close ofeach financial year.

Environmental Effects

3.29 Construction of the dam would have a significant impact on the

downstream hydrology of the river. The short (6 km) stretch down to theMARIS diversion dam would become a reregulating reservoir with wide surface

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fluctuations. Flows below the diversion dam would be noticeably altered,particularly during the dry season, because of irrigation abstractions. Asthe reservoir is lowered every year the shoreline is expected to shiftlaterally by as much as 3 km in the vicinity of Planas. Such widely fluctuat-ing reservoir levels would preclude the development of vegetation below thefull supply level and would lead to the creation of mud flats. As the riverenters the reservoir there would be a decrease in the flow velocity, followedby deposition of the larger particles of sediment to form a delta in theupper reaches of the reservoir, with a consequent raising of the river bedand water surfaces in the river reach immediately above the reservoir.Studies indicate that flooding of additional areas upstream of the reservoirmight occur at some point in the future as a result of back water and aggrada-tion caused by the reservoir. It was agreed at negotiations that NIA wouldinclude observations on riverbed aggradation as part of a wider reservoirsedimentation monitoring program, in order to allow adequate lead time forremedial measures. Construction of the dam and formation of the reservoirwould have no effects on existing health conditions in the area or on fisheries.

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4. ORGANIZATION AND MANAGEMENT

The National Irrigation Administration

4.01 NIA was created in 1964 and given responsibilities for developing,operating and maintaining all national irrigation systems in the Philippines.The Government finances NIA through the sale of bonds or from appropriations.A board of directors is responsible for the agency and the Administrator, whois appointed by the President of the Philippines, handles management. NIAhas recently been reorganized to better deal with the requirements of theGovernment's policy of irrigation development. The integration of the majorforeign-assisted projects under a Special Projects Organization (SPO) headedby an Assistant Administrator was one of the first results of the reorgani-zation (Figure 4.1). The SPO is currently responsible for twelve majorprojects and has built-up a structure and staff which, with specialistconsultant input where necessary, is competent to implement large-scaleprojects and manage the operations and maintenance of irrigation works. ThePresidential Decree authorizing construction of MRMP designated NIA as thelead agency and directed other agencies, that might be involved in theimplementation and operation of the project other than its irrigationphase, to cooperate with NIA as necessary. In view of the planned powergeneration component (Package III) of the project, the other principal agencyis the National Power Corporation (NPC).

National Power Corporation

4.02 NPC, originally a public utility responsible for hydroelectricpower generation, is a stock corporation fully owned by the Government. In1972 a Presidential Decree made NPC responsible for the construction ofnational power grids, the development of all future generation supplying thegrids and, ultimately for owning and operating all generating facilities.Its corporate powers are vested in a Board of seven members including theGeneral Manager who is Vice-Chairman. The Secretary of the Department ofEnergy, established in October 1977 to formulate policies and programs andcoordinate all activities connected with electric power, is chairman of theNPC Board. Power generation for the Luzon grid in 1976 was 9,350 GWh with apeak of about 1,600 MW. The average annual rate of growth is forecast atabout 10% with energy demand of 17,780 GWh and capacity demand of 3,220 MW by1983. The current Luzon system development program (Annex 2) plans to meetthe load growth by construction of 457 MW thermal power, 300 MW pumpedstorage hydro, 364 MW (7 x 52 MW units) geothermal power and the assumedavailability of 360 MW hydro power from Magat by 1983. A 620 MW nuclearplant is currently under construction and is expected to be in full commissionin 1984. An ongoing review of the NPC generation expansion program for theLuzon mainland by international consultants (Lahmayer International, Germany)has estimated the power demand growth rate at 11.5% through the 1977-85period. Their forecast is based on a correlation between economic andpopulation growth but is believed to be an over-estimate of potential demand.However, the probability of delays in NPC commissioning the geothermal powerunits and the load growth rate currently assumed, makes the availability ofpower from Magat in 1983 a vital component in the power development programin order to avoid power shortages since the reserve of the interconnectedsystem would only be 13.5% without the Magat power component.

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Project Management

4.03 NIA. Responsibility for implementing Stage I of the MRMP (Loan1154-PH) was placed under the SP0. A Project Manager was appointed, with anAssistant Project Manager directly in charge of three construction divisions,dealing respectively with the ADB-assisted rehabilitation of MARlS and theBank-assisted MARIS extension and SIFRIS rehabilitation and expansion. TheMRMP Project Manager subsequently assumed overall responsibility for theconstruction of the nearby Chico River Irrigation Project (Loan 1227-PH) andfor the Cagayan Integrated Area Development Project, with day to day respon-sibility for MRMP in the hands of an Assistant Project Manager. The MRMPProject Manager has thus become Regional Manager for SPO projects in theCagayan Valley. In view of the scope and engineering complexity of the Magatdam construction, NIA, after consultation with the Bank, has transferred tothe MRMP senior engineering staff with expertise acquired on the recentlycompleted Pantabangan dam (Loan 637-PH). Management of construction of theMagat dam would be the responsibility of the senior staff engineer from thisgroup who has been designated Project Manager, MRMP Dam. He liaises with theRegional Project Manager on overall MRMP policy, but has full powers in allmatters concerning the dam and has direct access to the SPO Assistant Adminis-trator and the Administrator (Figure 4.2). Assurances were obtained that NIAwould periodically review with the Bank the effectiveness of the proposedproject management organization.

4.04 Under a ruling of the Water Resources Council, the competentauthority in the Philippines, the reservoir would be operated primarily forirrigation with a firm energy rule of 25 MW continuous monthly power produc-tion (para. 3.10). Consequently, NIA would be responsible for operation ofthe dam. After completion of construction of the dam it would become anintegral part of the MRMP for operation and maintenance purposes. A DamDivision would be established which would be responsible for O&M of the maindam and would absorb the smaller existing unit looking after operation andmaintenance of the MARIS diversion dam and main canal.

4.05 NPC. Responsibility for construction of the planned power component(Package III) lies with NPC. As design of the power component is fixed bythe dam, spillway and power intake physical layout, the critical factors willbe scheduling of contract awards, equipment delivery and installation andcommissioning of the generating units and transmission lines. A jointNIA/NPC Technical Committee has been established to coordinate implementationof the dam and power facility. No problems are anticipated, subject toavailability of financing. An assurance was obtained that the Governmentwould cause NPC to establish an effective staff organization to implement thepower component in consultation with the Bank, and that it would periodicallyreview the effectiveness of the organization with the Bank.

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Consulting Services

4.06 While NIA has acquired valuable experience of large dam construc-tion on the Pantabangan dam, the particular design and construction problemsassociated with the proposed Magat dam are sufficiently complex to warrantsubstantial consultant assistance to NIA. The project would provide for con-sultant services to cover the expected period of construction from July 1978to December 1982. NIA proposes to use the same joint venture of expatriateand local consulting firms that has been involved in the pre-constructionphase of the project. Negotiations for provision of consulting serviceshave been completed. It is estimated that about 1,130 man-months of consul-tant services would be required. The expatriate firms would provide 540 man-months at an average cost of US$7,900/man-month, exclusive of transportation,equipment and price escalation. The local associates would provide 590 man-months at an average cost of US$2,500/man-month. The provision for consul-tants also covers the requirements of the power component (Package III),as it would be impractical to make separate arrangements. Direct NIA coun-terpart and support services to the consultants would total some 1,640 man-months. The consultant contract would provide for special on-the-jobtraining, together with 90-day periods of overseas training in Canada and theU.S.A. for 14 of NIA's engineers. NIA has engaged consultants satisfactoryto the Bank under terms of reference and conditions approved by the Bank toassist in final design and supervision of construction.

4.07 The NIA Board of Consultants (NBC), an international specialisttechnical review panel established in May 1977 in accordance with Bankrequirements, has met four times during the preconstruction phase of theproject, and has made most valuable contributions. The project would providefor continuance of the NBC during the construction phase. The NBC is expectedto meet at least twice a year and more frequently, if necessary. The Boardcurrently consists of a geological/geotechnical specialist, a dam hydraulicsspecialist and an experienced dam design and construction engineer. Composi-tion of the Board would be subject to addition and/or amendment by NIA asparticular areas requiring attention develop. An assurance was obtainedthat NIA would maintain the Board of Consultants for the duration of construc-tion of the dam and that NBC would be consulted prior to implementation ofall significant changes in the design and construction plans for Magat dam asdetailed in the contract drawings and specifications.

Safety of Dam

4.08 An assurance was obtained that NIA would make arrangements to havea suitable maintenance and inspection program for the dam and to advise theBank in writing not later than December 31, 1981 as to how it proposes tomeet this obligation. The NIA proposal would include a description andscheduling of the maintenance program and inspections to be made, thedesignation of the experts, if any, to be employed, and, if applicable, acopy of their terms of reference. The Bank would have an opportunity tocomment on the proposals before they were adopted.

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Cost Recovery

4.09 The cost recovery index was examined for the combination of MRMPStages I and II since part of the irrigation benefits of Stage II accrue toareas under Stage I. Based on financial projections of NPC,/1 it would haveto sell energy in 1983 at US$0.0317 kWh (mid '78 price level) to obtain an 8%rate of return on revalued net fixed assets. At this tariff level, NPC couldcarry on its account the cost of the power house, power equipment, and about73% of the cost of the dam and still obtain an 8% rate of return on itsassets./2 Allocation of assets between NIA and NPC would not be made atpresent; however, an assurance was obtained from the Government that, withinthree years of loan signature, a proposal for allocation of the costs of thedam between the two agencies would be presented to the Bank for review. Inview of NPC's need for funds, and in order to maintain its creditworthiness,it would be desirable that the cost of Magat dam allocated to power would beassumed by the Government in the form of equity contributions to NPC.However, a final decision on the issue would be taken by the Government aspart of the cost allocation determination. Since the project would provide amore reliable supply of water than other Bank-assisted irrigation projectsand since the average farm size in the project area is somewhat larger, anincrease in the water charges is justified. Based on the capacity of thefarmers to pay, an increase equivalent to 1 cavan of paddy/ha in each seasonover the present charges on Bank-assisted projects of 3.5 cavans/ha in thewet season and 4.4 cavans/ha in the dry season would be appropriate. Anassurance was obtained from the Government that, within a period of fiveyears after full development, water charges would be gradually increased tothese levels and that NIA and the Bank would review annually the adequacy andcollection rate of water charges. Based on the above water charges and powertariff levels, the overall cost recovery index at discount rates of 8%, 10%,and 12%, is 62%, 47%, and 37% respectively. Assuming that the powerhouse,power equipment and 73% of the dam were allocated to NPC, the cost recoveryindex of the irrigation component would be 17% at a discount rate of 10%.

/1 The Seventh Power Project in the Philippines, Staff Project ReportNo. 1552-PH, May 27, 1977.

/2 Assuming a 5% transmission loss, an incremental investment ofUS$38.0 million in transmission facilities, and an annual incrementalO&M of US$0.4 million for these transmission facilities.

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5. BENEFITS, JUSTIFICATION AND RISKS

5.01 The second stage of development of the Magat River MultipurposeProject would consist of construction of the Magat dam, establishment of agenerating station with a 360 MW installed capacity and new irrigationfacilities for an additional 27,000 ha of rainfed land. The proposed Bankloan would assist in financing construction of the dam. The Governmentplans to obtain supplier credit for the power component of the Stage IIdevelopment and intends to approach the Bank for assistance with the irri-gation component. While Stage II development of MRMP has been subdividedinto a number of convenient packages for implementation and financing, forpurposes of economic evaluation the development is indivisible. For example,the investment in the dam cannot be justified without assuming furtherinvestments in irrigation and power and the resulting benefits. The Stage IIdevelopment is therefore evaluated as a single entity. The following analysiswill show that the investment in Stage II development has an acceptableoverall economic rate of return. It will also show that this investment isthe least cost method of meeting the proposed irrigation and power objectives.

5.02 Foreign Exchange. The numeraire used for this analysis is presentreal income at constant prices, measured in terms of foreign exchange andexpressed in U.S. dollars. All local costs and benefits denominated in pesoshave been multiplied by the standard conversion factor (SCF) of 0.9 anddivided by the official exchange rate of P 7.40 = US$1.00 to convert them tothe numeraire.

5.03 Investment Costs. The total shadow-priced capital cost of theStage II investment, expressed in mid-1978 prices, is US$443.5 million. Thistotal cost includes US$52.9 million for the diversion works, US$273.6 millionfor the dam, US$70.9 million for the power related civil works and equipment,and US$46.1 million for the irrigation works. All capital costs includephysical contingencies but exclude costs due to expected price increases aswell as duties and taxes on imported equipment. The annual operation andmaintenance costs, estimated at US$2.8 million, consist of US$0.76 millionfor the irrigation at US$28/ha, US$0.54 million for the dam and US$1.5 millionfor the power facilites based on the PDR.

5.04 Irrigation Benefits. Completion of Stage II MRMP development wouldprovide an additional 27,000 ha of rice land with year round irrigation. Atpresent, in the wet season a rainfed rice crop is grown on 21,200 ha of thisland, while 5,800 ha are irrigated by small run-of-river and pump irrigationsystems. In the dry season only 2,100 ha are cropped to irrigated rice.Construction of the Magat dam would also provide irrigation water to afurther 46,000 ha in the dry season. This area, equipped with irrigationfacilities under Stage I of MRMP, presently remains uncultivated in the dryseason due to lack of water. On completion of Stage II development, approxi-mately 8,000 farm families and 4,400 landless laborers' families wouldbenefit from increased production and additional employment within theStage II area, together with about 15,000 farm families and 5,500 landlessfamilies in the Stage I area. The incremental annual demand for farm laborwould be of about 7.2 million man-days equivalent to some 36,000 full timejobs.

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5.05 Present paddy yields in the project area are 1.5 ton/ha for rainfedrice, 2.0 ton/ha for wet season irrigated rice, and 2.1 ton/ha for dry-seasonirrigated rice. Without the project, paddy yields are expected to increaseto 1.8 ton/ha, 2.5 ton/ha and 2.6 ton/ha respectively. With the project,these yields are expected to increase to 4.0 ton/ha for wet season irrigatedrice and 4.2 ton/ha for dry season irrigated rice. Present cropping intensityis 107% which is expected to remain unchanged without the project. With theproject, cropping intensity is expected to reach 200%. Paddy production atfull Stage II development would increase by about 356,500 tons annuallyresulting in a yearly import saving of about US$69.0 million. After deductingthe cost of imported fertilizer and chemicals, the net foreign exchangesaving would amount to about US$62.0 million.

5.06 Since the Cagayan valley is a rice surplus area, the incrementalrice production from MRMP is expected to be sold for consumption in Manila.According to the Bank's commodity price forecasts, the world market price ofThai 25-35% broken rice is expected to rise (in constant 1978 prices) fromUS$230/ton f.o.b. Bangkok in 1978 to US$290/ton in 1985. These prices wereused to estimate present and future farm-gate prices for the economic analysisand for estimating farm incomes. A summary of economic and financial farm-gate prices for rice and fertilizers is shown in Table 5.1. Detailed calcu-lations of prices, production costs, labor demand, and farm budgets are shownin Annex 2.

Table 5.1. RICE AND FERTILIZER PRICES(P/ton)

1978 1985Farm-gate Prices Economic Financial Economic Financial

Rice 1,225 1,100 1,535 1,375Nitrogen /a 3,900 4,700 4,900 4,500Phosphoric acid /a 3,100 4,600 4,200 3,800

/a Fertilizer prices expressed per ton nutrient, based on urea andtriple-superphosphate, respectively.

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Table 5.2. FARM INCOMES

Present Farm family income /a Per capita income

Tenure status Present Future Present Future P-esent Future___ (P) …__--- ---- (US$) (USs$) …---

Owner operator Rainfed 4,745 21,730 640 2,935 105 475Irrigated 6,220 21,730 840 2,935 135 475

Leaseholder Rainfed 3,650 14,000 495 1,890 80 305Irrigated 4,275 14,000 580 1,890 95 305

/a Includes off-farm income.

5.07 Farm incomes, calculated for the average farm size of 3.0 ha andfor two different types of tenure are summarized in Table 5.2. The present per

capita incomes for the 3.0 ha farm model ranging from US$80 for a leaseholderto US$135 for an owner operator are below the estimated per capita absolute

poverty level of US$193 (at 1978 prices), and vary from 16% to 27% of the

estimated 1978 per capita GNP of US$507 for the Philippines. With theproject, the per capita incomes of these farms would increase to about US$475for an owner operator and US$305 for a leaseholder. Thus, average incomes in

the project area would rise above the 1978 poverty income level by the timeof full development, and would range between 41% and 64% of the 1987 projectedper capita GNP of US$745. The comparison indicates that the project wouldincrease incomes in the project area considerably and would help narrow theincome gap between the project area and other parts of the country, and

between urban and rural areas.

5.08 As a result of Stage II development, the demand for labor wouldincrease from 2.77 million man-days annually without the project to 10.0 mil-lion man-days with the project. In order to value the incremental cost oflabor, shadow wage rates were calculated by examining the impact of Stage Iand Stage II development together on the total project area. This analysisshowed that the shadow wage rate would be P 2.67/man-day without the projectand P 3.06/man-day with the project, resulting in an incremental labor costof P 23.2 million due to the project (Annex 2). Using the above assumptions,the incremental benefits due to irrigation would amount to US$47.4 millionannually at full development, as shown in Table 5.3.

5.09 Power Benefits. With an installed capacity of 360 MW, the projectwould generate about 1,200 GWh annually. In quantifying power benefits,ideally both the capacity and energy contribution would have to be giveneconomic values. As a simplification, these benefits have been expressedin terms of the price per kWh consumers would be willing to pay for theenergy. Since it was not possible to measure willingness to pay directly,the retail tariff was taken as a minimum measure of the consumers' willing-ness to pay ignoring consumers' surplus and the possibility that the marketclearing rate might be higher than the actual tariff. In Luzon, the retail

Table 5.3: IRRIGATION - NET VALUE OF PRODUCTION

Gross value Net value Net value ofPaddy Farm-gate of Production of production in

Area yield price production costs production project area(ha) (ton/ha) (P/ton) …___________ …P/ha ---- …-------- (P million)

Wet season _Irrigated rice W 5,800 2.5 1,535 3,840 645 3,195 18.5

W 27,000 4.0 1,535 6,140 1,465 4,675 126.2

Rainfed rice W 21,200 1.8 1,535 2,765 435 2,330 49.4W - - _

Dry season _Irrigated rice W 2,100 2.6 1,535 3,990 770 3,220 6.8

W 73,000 4.2 1,535 6,445 1,495 4,950 361.4

Total W 29,100W 100,000

W W(P million)

Total net value of productionbefore costing labor 74.7 487.6

Less imputed labor cost 7.4 30.6Total net value of production 67.3 457.0Net incremental value of productionat full project development 389.7

W - Future without projectW = Future with project

- 37 -

prices charged by cooperatives, some of whom buy power from NPC, range from

P 0.24/kWh to P 0.94/kWh, averaging around P 0.33 per kWh./1 Retail tariffs

charged by cooperatives /2 which buy cheap power from the NPC grid are

generally lower than the retail tariffs charged by cooperatives which generate

their own powe-. Based on these data, electricity consumers are willing to

pay at least P 0.33/kWh for energy. At P 0.33/kWh, the value of MRMP's

output, after accounting for a 9% loss due to transmission and distribution,

would be US$43.8 million.

5.10 Since MRMP's energy output has been valued at the retail level, an

incremental investment of about US$60.0 million, for transmission and

distribution facilities, was deducted from this value. The annual cost of

operation and maintenance of the transmission and distribution facilities has

been estimated at US$1.35 million. /3

5.11 Development Period. According to the Stage II implementation

schedule, all works would be completed by December 31, 1982. The already

developed 46,000 ha Stage I area is assumed to reach full development three

years after completion of the dam. Farmers on the 27,000 ha of newly irrigated

land are assumed to begin growing their crops under improved conditions from

1983 onward and to achieve the projected full development yield levels over

five years in equal installments by 1987. The power benefits are assumed to

accrue the year after completion of construction of the dam.

5.12 Economic Rate of Return. Using the foregoing assumptions and

discounting investment costs and irrigation and power benefits over a 50

year evaluation period, the economic rate of return of the project is 12%

(Table 5.4). At a discount rate of 10%, the estimated opportunity cost of

capital in the Philippines, the net present value of the project in 1978 is

US$109.0 million.

/1 Staff Appraisal Report, Rural Electrification Project, Philippines, # 1848-PH,

December 29, 1977.

/2 Since updated information on retail tariffs charged by small utilities is

unavailable, only retail tariffs charged by cooperatives have been

considered.

/3 The incremental transmission investment required is the cost of the second

circuit between Santiago and Ambuklao and related substations totalling

US$11.0 million. The cost of the 14 km transmission line from Magat to

Santiago is included in the Magat power component (Package III) cost

estimates. The incremental distribution investment has been estimated at

US$49.0 million. The annual cost of operation and maintenance of the

transmission facilities was estimated at 1.0% of capital cost, and for

the distribution facilities at USiO.11/kWh supplied at the retail level.

- 38 -

Table 5.4: ECONOMIC COSTS AND BENEFITS(US$ million)

Costs BenefitsMRMP Stage II Irrigation Power

Year Capital O&M Retail Value Less T&D InvestmentCapital O&M

1 2.72 9.03 60.44 99.15 102.86 99.17 55.1 (30.0)8 15.3 1.3 12.7 (30.0)9 2.8 25.4 43.8 (1.35)10 2.8 38.1 43.8 (1.35)11 2.8 42.6 43.8 (1.35)12-50 2.8 47.4 43.8 (1.35)

Economic Rate of Return = 12%

Table 5.5: SENSITIVITY ANALYSIS

Alternative Rates of return (%)

Base line 1220% increase in total construction costs 10One-year delay in dam construction 11Two-year delay in reaching full benefits due to atwo-year dam construction delay and a 20% increase incosts of dam and diversion works (Packages I and II) 9

Two-year delay in implementation of power component 11Two-year delay in implementation of irrigation component 1120% increase in world market price of rice 1320% decrease in projected rice yields 11Energy valued at P 0.24/kWh 10Energy valued at P 0.94/kWh 1940% increase in estimated incremental transmissionand distribution costs 11

- 39 -

Sensitivity of the rate of return was tested to cost overruns, delays inimplementation of the power and irrigation components, delay in both irri-gation and power benefits as a result of delays in dam construction accom-panied by a 20% increase in costs, variations in the price and yields ofrice, variations in the estimated willingness to pay for energy and anincrease in incremental energy transmission and distribution costs (Table5.5). The rate of return was most sensitive to a combination of cost over-runs and delays in benefits.

5.13 Least Cost Analysis. To see whether the Stage II investment isthe least costly way of providing the expected irrigation and power benefits,it has been compared to alternative irrigation and power projects. Theonly feasible method of obtaining equivalent irrigation benefits wouldconsist of the present Stage II investment minus the power generation faci-lities. There would be no change in the main dam height or in the appurte-nant works, other than the absence of the power intake facilities. Thisalternative would have a capital cost of US$372.6 million and an annualoperation and maintenance cost of US$1.3 million. Because the long-rangedevelopment program beyond about 1987 is not yet well defined, the comparisonof alternative power developments to meet energy requirements in the Luzongrid in 1983 has been confined to comparing the power output of Magat with athermal alternative. There are no other indigenous substitutes as none ofthe potential hydroplants, presently in the feasibility stage, could come onthe line before 1985. To maintain in the system the same reliability as isthe case with Magat, a thermal plant with an installed capacity of 300 MWwould be required. Studies indicate that the best solution would comprise acombination of a 100 MW steam power plant supported by a 200 MW gas turbineplant using the gas turbines to cover peaking operation with a 5% plantfactor. The capital cost for the steam plant, with an economic life of25 years, has been estimated at US$450/kW and for the gas turbine plant, witha life of 15 years, at US$250/kW. Since the alternative thermal plants wouldbe built near Manila, the associated incremental transmission investmentwould be negligible. Annual operating costs for these plants have beenestimated at US$29.2 million which include fuel costs for generating1,200 GWh at an average cost of P 0.18/kWh. For the analysis, capital costshave been shadow-priced for a foreign exchange content of 75% for the steamplant and 85% for the gas turbine. Comparison of the Stage II investment tothese alternative series of investments (Table 5.6) shows that the netpresent value of the MRMP investment is lower for all discount rates below43%, which is the equalizing discount rate. At a discount rate of 10%, theestimated opportunity cost of capital in the Philippines, the net presentvalue of the Stage II investment in 1978 is lower than that of the alternativeby US$181 million.

- 40 -

Table 5.6: LEAST COST ANALYSIS OF STAGE II INVESTMENT

MRMP Stage II Development Costs Alternative Project CostsStage II Transmission Irrigation Power

Year Capital O&M Capital O&M Capital O&M Capital O&M---------------------------- US$ million --------------------------

1 (1976) 2.7 2.32 9.0 8.43 60.4 58.64 99.1 89.55 102.8 85.8 10.96 99.1 73.6 10.97 55.1 5.5 42.3 35.58 15.3 1.3 5.5 12.1 1.3 35.59-21 2.8 0.11 1.3 29.6

22-23 2.8 0.11 1.3 24.6 29.624-29 2.8 0.11 1.3 29.630-33 2.8 0.11 1.3 10.9 29.634-36 2.8 0.11 1.3 29.637-38 2.8 0.11 1.3 24.6 29.639-50 2.8 0.11 1.3 29.6

Equalizing Discount Rate = 43%

Present Value of Costs in 1978 (US$ million)

Discount Rate (Z) MRMP Stage II Alternative Project

6 440 79110 397 57812 381 51715 360 452

5.14 Risks. NIA has successfully completed the construction of a largemultipurpose dam at Pantabangan in Central Luzon (Loan 637-PH) and all theexperienced senior personnel from that job are now assigned to the proposedMagat dam (para. 4.03). In addition, despite the fact that a remarkableamount of exploratory work has already been carried out at the site (para.3.11), adequate provision has been made in the estimates for unexpectedcontingencies. Thus, while no major problems are anticipated in constructionof the Magat dam and appurtenant works, a delay in completion of the diversiontunnels or the occurrence of abnormally high wet-season floods at the earlystages of dam construction would constitute the principal risk factor. Suchevents could result in the loss of one construction season.

- 41 -

6. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During negotiations agreement with the Government was reached on

the following principal points:

(a) it would satisfy the Bank of the economic and technical justi-fication of any increase in installed generating capacity above360 MW (para. 3.10);

(b) NIA would keep the Bank informed of the arrangements to be madefor resettlement of the affected population and the Bank wouldhave an opportunity to comment before they were implemented(para. 3.19);

(c) it would undertake to construct the power and irrigation phasesof Stage II development in a timely manner so as to be ready foroperation by January 1, 1983 (para 3.22);

(d) any contractual and financial arrangements proposed forimplementation of the power component of Stage II developmentwould be subject to review by the Bank prior to conclusion ofsuch agreements (para. 3.22);

(e) NIA would make arrangements satisfactory to the Bank with

a qualified supplier for the timely provision of the spillway,power intake and Baligatan creek gates (para 3.23);

(f) it would submit for review by the Bank within three years of loansignature a plan for allocation of costs of the dam between NIA andNPC (para. 4.09); and

(g) NIA would gradually raise the water rates payable by the benefi-ciaries in the service area by the equivalent of 1 cavan of paddy/hain each crop season above the 3.5 and 4.4 cavans/ha levels pre-vailing in Stage I of the project. The incremental rate wouldbegin to be applied five years after completion of Stage II andwould be fully applied over five years (para. 4.09);

6.02 A condition of effectiveness of the loan would be that NIA wouldestablish a special fund to service the project which would be replenished bythe Government at monthly intervals to a level equivalent to the estimatedrequirement for the next two months (para 3.23).

6.03 The proposed project would be suitable for a Bank loan ofUS$150.0 million for a period of 20 years including 5 years of grace. Theborrower would be the Republic of the Philippines.

- 42 - ANNEX 1

Table 1Page 1

PHILIPPINES


Project Features

1. Magat Dam (3,950 m long)

Main fill dam - 1,350 m long, maximum height 114 m, volume 12.0 mil-lion cu m.

Concrete section - 450 m long (wing dams, power inlets and spillway)Baligatan Dike - 1,450 m long, maximum height 35 m, volume 1.9 mil-

lion cu m.Baligatan Creek Dam - 700 m long, maximum height 50 m, volume 1.1 mil-

lion cu m.Dam crest level - 200 mFull supply reservoir level - 193 mMinimum supply level - 160 mNormal maximum flood level - 196.3

Spillways

a. Overflow

Type-gated, open chute with flip bucketsOverall dimensions - 155 m wide, 400 m longCrest elevation - 174 mGates - 7 radial crest gates 16.5 m wide by 19.5 m highSpillway chute length 300 mChute divided by training walls into three bays - 42 m, 67.5 m and46 m wide - for overflow spill, with fourth bay for orifice discharge

Discharge capacity - 31,600 cu m/sec

b. Orifice

Two low-level outlets to spillway chuteCapacity - 475 cu m/secIntake elevation - 150 m at center lineOutlet releases controlled by 6.0 m wide by 12.5 m high radial

orifice gates with discharge into 21 m wide bay in spillway chute

- 43 - ANNEX 1Table 1Page 2

c. Baligatan Creek Dam outlet - 3.0 m diameter gated concrete conduit

Power Intakes

84 m long concrete gravity section adjacent to spillway with sixintake openings

Control structure extends from invert El. 145 m to FSL 193 mEquipment features include steel trashracks, six 5.0 m wide by6.0 m high fixed wheel gates with hydraulic hoists, one 5.0 m wideby 7.13 m high bulkhead gate with gantry crane

Penstocks - 5.5 m diameter

Reservoir

Extends from Magat Dam 29.5 km river upstream to a point 14 km downstreamof Bagabag.

Gross Livestorage storage

Elevation Area volume volume(m) (sq m) (MCM) (MCM)

Maximum flood level 196.3 49.0 1,400 1,083Full supply level (FSL) 193.0 45.0 1,250 933 /aMinimum supply level

(MSL) 160.0 15.5 317 -

/a Reduces to 886 MCM after 25 years and 832 MCM after 50 years due tosedimentation.

2. Power Facilities (Package III)

Installation - four 90 MW units with provision for future installationof two 90 MW units.

PowerhouseType - surface with unit bay spacing of 16 mMassive concrete bulkhead walls at elevation 109.5 m protect againstfloods.

8 power plant transformers at rear of powerhouse. Serviced by 200 tonoverhead traveling crane.

TurbinesVertical shaft Francis typeSynchronous speed - 189.5 rpmThroat diameter - 3.5 mCenterline setting - 98 m (3 m below expected minimum tailwater)

- 44 - ANNEX 1Table 1Page 3

Efficiencies

Net head Power Discharge Efficiency(m) (hp) (cu m/sec) (X)

87 (maximum) 125,000 119.4 91.0 (fullgate)87 106,500 98.5 94.0 (best)78 (best efficiency) 107,000 112.7 92.0 (fullgate)78 95,000 97.4 94.5 (best)54 (minimum) 60,000 93.3 90.0 (both)

GeneratorsUmbrella type, 100 MVA, 13.8 kV, 60 Hz, 0.9 lagging factorRating - 125,000 hp at full head (matches full turbine output)Connected to main step-up transformers via 5,000 amp isolated phasebus duct

Transmission

230 kV double circuit line from Magat to Santiago (14 km) plusswitchyard facilities at both stations

3. Irrigation Works (Package IV)

Baligatan Diversion Dam - 275 m long earthfill dam with 23 m bridgedconcrete overflow center structure, maximum height 16 m.

Main canals and pumping plants:

NetLength irrigable area(km) (ha)

Oscariz Canal 5 1,300South High Canal 57 11,600Extension of Cagayan East Canal 22 5,200Extension of Luna Canal 16 3,000Extension of Siffu East Canal

(two relift pumping plants onextended Siffu East Canal) 31 6,600

Total 131 27,000

ANNEX 1Table 1Page 4

Irrigation service design criteria:

20 m of canals and laterals or sublaterals per ha of service area60 m of main and supplementary farm ditches per ha of service area20 m of project drains per ha of service area40 m of farm drains per ha of service areaOne turnout for each 10 ha of service area20 m of all-weather gravel roads per ha of service areaVehicle crossings - one vehicle equipment crossing for every 200-300 mof canal or lateral/sublateral in residential areas and every400-500 m in nonresidential areas

ANNEX 1- 46 - Table 2

Page 1

PHILIPPINES


Magat Dam Contract: Cost Estimate /a

UnitItem Description Unit Quantity price Amountno. (us$) (US$'000)

1.0 General1.1 Mobilization and demobilization L.S. 2,4001.2 Temporary facilities L.S. 7,4001.3 Construction power L.S. 3,8001.4 Construction roads and maintenance km 55 62,000 3,4001.5 Land transportation for supply contracts t 3,370 119 400

Subtotal 17,400

2.0 Diversion Works2.10 Furnish and install cut-offs L.S. 5002.20 Stage 1 - cofferdams - excavation and fill cu m 427,000 4.45 1,9002.30 Stage 2 - remove cofferdams and blanket

dam fill cu m 167,000 4.20 7002.40 Stage 3 - Restore and dewater cu m 33,300 6.00 2002.50 Stage 4 - restore and remove cu m 66,000 7.50 5002.51 Stage 4 - place and grout tunnel plug cu m 6,700 6.00 502.52 Stage 4 - cement supply t 2,200 100 2002.53 Baligatan creek diversion cu m 55,000 5.50 3002.60 Miscellaneous L.S. 350

Subtotal 4,700

3.0 Embankment - Main Dam3.1 Foundation works:3.10 Stripping cu m 1,220,000 2.60 3,1503.11 Core trench excavation cu m 180,000 7.00 1,2503.12 Surface cleanup sq m 62,500 1.60 1003.13 Foundation treatment - core cu m 18,400 57 1,0503.14 Miscellaneous L.S. 9503.2 Fill works:3.21 Impervious core cu m 2,239,000 4.45 9,9503.22 River sand and gravel cu m 3,509,000 7.75 27,2003.23 Rockfill - inner zones cu m 4,708,000 2.55 12,0003.24 Rockfill - outer zones cu m 1,228,000 5.30 6,5003.25 Rip rap cu m 216,000 6.25 1,3503.26 Instrumentation L.S. 300

Subtotal 63,800

ANNEX I

- 47- Table 2Page 2

UnitItem Description Unit Quantity price Amountno. (US$) (US$'000)

4.0 Embankment - Baligatan Dyke4.1 Foundation works:4.10 Stripping cu m 935,000 2.55 2,4004.11 Core trench excavation cu m 29,000 8.60 2504.12 Foundation treatment L.S. 3004.13 Miscellaneous L.S. 1004.2 Fill works:4.21 Impervious core cu m 358,000 4.75 1,7004.22 River sand and gravel cu m 613,000 9.50 5,8004.23 Rockfill cu m 1,075,000 3.35 3,6004.24 Rip rap cu m 140,000 7.50 1,0504.25 Instrumentation L.S. 100

Subtotal 15.300

5.0 Embankment - Baligatan Creek Dam5.1 Foundation works:5.10 Stripping cu m 330,000 2.6 8505.11 Core trench excavation cu m 10,000 10 1005.12 Foundation treatment L.S. 2005.13 Miscellaneous L.S. 505.2 Fill works:5.21 Impervious core cu m 223,000 5.15 1,1505.22 River sand and gravel cu m 395,000 10.0 3,9505.23 Rockfill cu m 444,000 4.15 1,8505.24 Rip rap cu m 49,000 8.15 4005.25 Instrumentation L.S. 50

Subtotal 8,600

6.0 Concrete Structures - Spillway and Intakes6.1 Foundation works:6.10 Overburden excavation cu m 2,746,000 2.60 7,1506.11 Rock excavation - mass cu m 4,726,000 4.20 19,8506.12 Rock excavation - structural cu m 180,000 10 1,8006.13 Slope protection sq m 36,000 21 7506.14 Foundation cleanup and grouting sq m 94,000 8.0 7506.15 Drainage and seepage control lin m 76,500 9.15 7006.16 Baligatan outlet excavation cu m 18,500 5.40 100

Subtotal 31,100

- 48 -ANNEX 1Table 2Page 3

UnitItem Description Unit Quantity price Amount

no. (US$) (US$'000)

6.2 Concrete:6.21 Spillway - gate structure cu m 295,000 38.50 11,3506.22 - chute cu m 201,000 35.50 7,1506.23 - plunge pool cu m 240,000 35.80 8,6006.24 - wraparound wall cu m 82,000 36.50 3,0006.25 Power intake - gate structure cu m 155,000 39.00 6,0506.26 - wraparound wall cu m 275,000 33.50 9,2006,27 Baligatan outlet works cu m 3,000 200 6006.28 Cement supply t 300,000 100 30,0006.29 Reinforcing steel kg 12,000,000 0.80 9,6006.30 Miscellaneous L.S. 150

Subtotal 85,700

7.0 Equipment7.10 Gate installation t 3,350 567 1,9007.20 Supply and install penstock liners t 400 1,250 500

Subtotal 2,400

Total 229,000

/a Estimate is summary of detailed "contractor type" estimate prepared by ESED.Similar work items are combined and unit prices averaged from total item costamounts and quantities. Amounts are rounded to nearest $50,000.

- 49 - ANNEX 1Table 3

PHILIPPINES


Equipment List

CostsItem Quantity Unit Total

-- US$'000 --

Passenger bus 1 30 30

Minibus 2 15 30

Laboratory testing equipment /a L.S. 340

Total 400

/a Itemized list to be reviewed by the Bank.

- 50 - ANNEX 1

Table 4

PHILIPPINES


Expected Price Increase Estimate

Calendar Year1978 1979 1980 1981 1982 1983 Total

… ------ ------- ------- US$ '000…

1. Civil Works /a 31,300 73,000 69,100 63,200 33,700 13,800 284,100Annual inflation rate (%) 8.0 7.5 7.0 7.0 7.0Expected price increase 600 5,800 11,100 15,200 11,100 1,700 45,500

2. Equipment 1,700 4,400 4,500 2,600 1,400 14,600Annual inflation rate (x) 7.0 6.5 6.0 6.0 6.0Expected price increase - 300 600 500 400 1,800

Total without priceincreases 33,000 77,400 73,600 65,800 35,100 13,800 298,700

Expected price increases 600 6,100 11,700 15,700 11,500 1,700 47,300

Total with price increases 33,600 83,500 85,300 81,500 46,600 15,500 346,000

/a Includes consulting services.

- 51 - ANNEX ITable 5

PHILIPPINES


Estimated Schedule of Expenditures

TotalItem cost FY79 FY80 FY81 FY82 FY83

------------------ US$'000 -------__________

Reservoir clearing & resettlement 8,000 3,000 2,000 1,800 1,000 200

Civil works:Mobilization, temporaryfacilities, demobilization 19,000 7,650 5,400 1,900 2,050 2,000

Diversion works 5,100 1,500 1,800 1,000 350 450

Embankments 95,600 22,000 21,400 21,300 19,150 11,750

Spillway & power intakes 129,900 27,550 36,800 35,200 22,650 7,700

Subtotal 249,600 58,700 65,400 59,400 44,200 21,900

Spillway & intake gates 14,200 3,300 4,450 3,750 2,000 700

Consulting services 6,900 2,100 1,500 1,400 1,200 700

Vehicles & equipment 400 400 - - - -

Supervision & administration 19,600 6,150 4,850 3,200 2,850 2,550

Subtotal 298,700 73,650 78,200 69,550 51,250 26,050

Expected price increases 47,300 4,000 9,450 14,500 12,850 6,500

Total proiect cost 346,000 77,650 87,650 84,050 64,100 32,550

-52 - ANNEX 1Table 6

PHILIPPINES


Estimated Schedule of Disbursements

IBRD fiscal year Accumulated disbursementsand semester ---(US$ million equiv.)--

FY791st 18.02nd 34.4

FY80Ist 65.22nd 81.5

FY81Ist 94.82nd 109.1

FY821st 121.02nd 132.9

FY831st 138.72nd 145.0

FY841st 150.0

ANNEX 1_ 53 Table 7

PHILIPPINES

MIAGAT RIVER MULTIPURPOSE PROJECT: STAGE II

Proposed Allocation of Proceeds of Loan

Category Costs ProposedTotal Foreign loan------ (US$ million) ------

I. Civil WorksReservoir & resettlement 7.3 0.2Dam & appurtenant works 229.0 122.6 131.5 *Expected price increases 40.5 20.7

Subtotal 276.8 143.5

* Of which (a) US$38.0 million for mobilization and contractor's equip-ment and (b) US$93.5 million for other civil works. Disbursements for(a) will be 100% of foreign exchange and (b) 40% of total expenditure.

II. Equipment and SuppliesVehicles and equipment /a 0.3 0.3 0.4Expected price increases 0.1 0.1

Subtotal 0.4 0.4

Disbursement will be 100% of foreign expenditure for directly importedequipment, 100% of expenditure (ex-factory) for locally manufacturedequipment and 65% of total expenditure for imported equipment procuredlocally.

III. Technical AssistanceConsulting services 6.9 5.2 8.1Expected price increases 1.2 0.9

Subtotal 8.1 6.1

Disbursement will be 100% of total expenditure.

IV. UnallocatedPhysical contingencies 22.3 12.0 10.0(Administration & engineering) (22.4) -

(Spillway gates) /b (16.0) (16.0)

Total 346.0 -178.0

/a See Annex 1, Table 3.

/b Consisting of: base cost of gates, US$13.2 million; physical contingencies,US$1.0 million; price escalation, US$1.8 million. This item is being obtainedby NIA through supplier finance.

PHILIPPINES


Economic Cost of Farm Labor /a /b

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total

Labor requirement W 1.63 0.82 0.41 2.55 2.96 1.22 1.94 1.84 1.33 2.35 2.14 1.22 20.41(million man-days) /b W 0.94 0.94 0.73 0.24 0.22 - 0.78 1.57 1.59 1.35 1.66 1.78 11.8

Marginal opportunity W 3.63 2.82 2.41 5.65 6.88 3.22 3.94 3.84 3.33 5.05 4.42 3.22 1cost (P--/man-day) W 2.94 2.94 2.73 2.24 2.22 - 2.78 3.57 3.59 3.35 3.66 3.78 L

Average economic cost W 2.82 2.41 2.20 3.39 3.79 2.61 2.97 2.92 2.66 3.23 3.08 2.61 3.06of farm labor W 2.47 2.47 2.37 2.12 2.11 - 2.39 2.79 2.80 2.68 2.83 2.89 2.67(P--/man-day)

/a W = Future with project.W = Future without project.

/b The average economic cost of labor has been calculated on the basis of full development of Stages I and II.

o-zB


PHILIPPINES


Rice Crop Production Costs: Physical Inputs and Unit Prices /a

Physical inputsWet season Dry season Unit prices /b

Present Unit Rainfed Irrigated Irrigated Unit Price

Cultivationmechanical (% area) 15 25 25 P/ha 265 (265)manual (% area) 85 75 75 P/ha 120 (120)

Seed transplanted (kg/ha) 55 55 55 P/kg 1.4 (1.3)Fertilizer N (nutrient 15 20 25 P/kg 3.9 (4.7)

P kg/ha) 5 5 10 P/kg 3.1 (4.6)Threshing

mechanical /c (X pro- 15 30 45 - -

manual duction) 85 70 55 - -

Future without projectCultivation

mechanical (% area) 15 30 30 P/ha 265 (265)manual (% area) 85 70 70 P/ha 120 (120)

Seed transplanted (kg/ha) 55 55 55 P/kg 1.4 (1.3)Fertilizer N (nutrient 15 30 35 P/kg 4.9 (4.5)

P kg/ha) 5 5 10 P/kg 4.2 (3.8)Threshing

mechanical (% pro- 15 40 60 - -

manual duction) 85 60 40 - -

Future with projectCultivationmechanical (% area) 90 90 P/ha 265 (265)manual (% area) 10 10 P/ha 120 (120)

Seed transplanted (kg/ha) 50 50 P/kg 1.8 (1.6)Fertilizer N (nutrient 60 60 P/kg 4.9 (4.5)

P kg/ha) 30 30 P/kg 4.2 (3.8)Threshingmechanical (7 pro- 90 90 - -

manual duction) 10 10 - -

/a Agrochemical costs have been provided as a lump sum.

/b Figures in parenthesis are financial unit prices.

/c Cost of mechanical threshing is estimated to be 7% of yield.


PHILIPPINES


Rice Price Structure 1978 and 1985 /a

1978 P ton US$/ton

Export price of Thai, 25-35% brokens, f.o.b. Bangkok 1,890 230Ocean freight & insurance to Manila 140 17Import price, c.i.f. Manila 2,030 247Port handling charges 60 7Less average cost of transportation Isabela to Manila -130 -16Rice price, ex-mill project area 1,960 238Paddy equivalent price (63% recovery) 1,235 150Less average cost of transport farm to mill - 10 - IFarm-gate paddy price 1,225 149(Financial farm-gate price) /b (1,100)

1985 P ton US$/ton

Export price of Thai, 25-35% brokens, f.o.b. Bangkok 2,385 290Ocean freight & insurance to Manila 140 17Import price, c.i.f. Manila 2,525 307Port handling charges 60 7Less average cost of transportation mill to Manila -130 -16Rice price, ex-mill project area 2,455 299Paddy equivalent price (63% recovery) 1,545 188Less average cost of transport farm to mill - 10 - 1Farm-gate paddy price 1,535 187(Financial farm-gate price) /c (1,375)

/a P/ton and US$/ton values at constant mid-1978 prices. Peso shadow pricedat exchange rate of US$1.00 = P 8.22. P/ton figures rounded to nearest5 pesos.

/b 1978 financial price is actual.

/c 1985 financial price is calculated by using the official exchange rate ofUS$1.00 = P 7.4.

57- ANNEX 2Table 4

PHILIPPINES


Farm Budgets (3.0 ha Farm)

PRESENT FUTURE WITH PROJECTRainfed Irrigated Irrigated

Farm type: /a A B A B

Arable area of farm (ha) 3.0 3.0 3.0 3.0Transplanted rice (ha) 3.0 3.9 6.0 6.0Cropping intensity (%) 100 130 200 200Total paddy production (ton) 4.5 7.89 24.6 24.6

Gross value ofproduction (P) 4,950 8,680 33,825 33,825

Production costs, excludinglabor (P) 1,170 1,970 9,345 9,345

Cost of hired labor /b 35 715 1,210 1,210Net value of production

before water charges (P) 3,745 5,995 23,270 23,270Water charges (P) /c 0 475 1,980 1,980Net value of production (P) 3,745 5,520 21,290 21,290

(a) Owner-OperatorNet crop income (P) 3,745 5,520 21,290 21,290

(b) Amortizing OwnerAnnual payment for

land (F) /d 1,275 2,235 1,275 2,235Net crop income (P) 2,470 3,285 20,015 19,055

(c) LeaseholderAnnual payment for

land (P) le 1,095 1,945 7,730 7,730Net crop income (P) 2,650 3,575 13,560 13,560

/a Farm types: A = presently rainfed; B = presently irrigated.

/b Based on a maximum of 40 days/month and a total of 480 man-days/year of family labor; hired labor pricesat a wage of P 7.0/man-day.

/c Based on present charges of P 110/ha (2 cavans/ha) in the wet season and P 160/ha (3 cavans/ha) in thedry season and on future with project charges of P300/ha (4.5 cavans/ha) in the wet season and P360/ha(5.4 cavans/ha) in the dry season.

/d Based on amortizing owner with annual payments over 15 years at 6' of unpaid balance; based on price ofland at 2.5 times present gross value of production.

/e Based on 25% of gross value of production minus seed, harvesting and threshing costs.

PHILIPPINES


National Power Corporation - System Development Program - Luzon Grid

Actual F O R E C A S T1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

I. System RequirementsGeneration (GWh) 9,353 10,415 11,440 12,621 13,782 14,964 16,310 17,779 19,276 20,795Peak demand (MW) 1,591 1,774 1,972 2,153 2,420 2,669 2,955 3,221 3,478 3,709

II. System CapabilityAvailable energy (GWh) 10,565 11,399 13,194 15,794 16,514 16,839 19,189 22,394 22,520 24,259Dependable capacity (MW) 1,915 2,195 2,250 2,660 2,715 3,046 3,549 4,018 3,893 4,233Reserve (MW) 424 421 278 507 295 377 594 797 415 524

III. Tentative GeneratingExpansion ProgramExisting hydro (MW) 435 435 535 535 535 535 847 847 1,207 1,207 1Existing thermal (MW) 1,730 1,730 1,880 1,935 2,355 2,410 2,410 3,195 3,250 3,125 nNew facilities (MW) Bataan (S) Tiwi 1-(G) Malaya 2(S) Mak-Ban Kalayaan Tiwi 3-4 Mak-Ban Retire Abulog 1-4 00

150 MW 55 MW 310 HW (G) (P) 300 MW (G) 11OMW 4(G) Rockwell (H) 200 MWPantabangan (H) Tiwi 2(G) 55 MW Masiway (H) Mak-Ban 3 55 MW 5(S) Tiwi 5(G)1&2-100 MW 55 MW 12 MW 55 MW Magat 1-4 (-125 MW) 55 MW

Mak-Banl(G) PNPP1 (N) (H)360 MW Mak-Ban 555 MW 620 MW (G) 55 MW

Rated capacity (MW) 2,165 2,415 2,470 2,890 2,945 3,257 4,042 4,457 4,332 4,642Dependable capacity (MW) 1,915 2,195 2,250 2,660 2,715 3,046 3,549 4,018 3,893 4,233Hydro energy (GWh) 1,787 1,909 1,909 1,909 2,234 2,234 3,022 3,225 4,013Thermal energy (GWh) 9,612 11,105 13,165 13,165 13,165 13,165 13,165 12,885 12,885Geothermal energy (GWh) - 180 720 1,440 1,440 2,160 2,880 2,880 3,600Nuclear energy (GWh) - - - - - 1,630 3,327 3,530 3,761

Total available energy (GWh) 11,399 13,194 15,794 16,514 16,839 19,189 22,394 22,520 24,259

Notes: Type of generation shown in parentheses means:(11) Hydro(S) Steam(G) Geothermal -3(P) Pumped storage hydro 1 2(N) Nuclear (D

ANNEX 3

PHILIPPINES


Schedule of Early Events

Activity Target date

Magat Dam - Civil WorksReceipt of bids April 27, 1978Contract award June 15, 1978Notice to proceed July 1, 1978Complete Magat river bridge (Loan 1154-PH) July 1978Commence excavation October 1978Commence embankment fill January 1979Complee cofferdam cut-off walls May 1979Commence concreting (intake structure) May 1979Complete excavation for penstocks and powerhouse September 1979Complete diversion tunnels (Package I) October 1979Install and test tunnel gates December 1979Construct river closure dykes December 1979Divert Magat river through tunnels January 1980

Magat Dam - Gate SupplyContract award (for delivery October 1980) December 1978

PowerhouseContract award for supply of generating equipment December 1978Contract award for civil works June 1979

Irrigation FacilitiesContract awards January 1979

- 60 - ANNEX 4

PHILIPPINES


Related Documents and Data Available in the Project File

A. General reports and studies on the agriculture and power sectors.

Al World Bank, "The Philippines Priorities and Prospects for Development,Basic Economic Report," Report No. 1095a-PH, May 5, 1976.

A2 World Bank, "Agricultural Sector Survey," Philippines, 4 volumes.Report No. 39a-PH, May 2, 1973.

B. General reports and studies relating to the project.

BI USBR/USAID, "A Report on the Cagayan River Basin," December, 1966.

B2 NIA/USBR, "Magat River Project Feasibility Report," 5 volumes, June 1973.

B3 World Bank, "Appraisal of the Magat River Multipurpose Project: Stage I"Report No. 727a-PH, June 5, 1975.

B4 NIA/ESED, "Magat River Multipurpose Project Stage II, Project DesignReport," 4 volumes, September, 1976.

B5 ESED, "Magat River Multipurpose Project NBC-ERB Project Review, June 14-18,1977."

B6-9 NIA/NBC, "Review of Proposed Magat and Baligatan Dams," Report No. 1,March 30, 1977; Report No. 2, June 18, 1977; Report No. 3,September 9, 1977; Report No. 4, October 25, 1977.

B1O NIA/ESED, "Magat River Multipurpose Project, Project Summary CostEstimate for Project Layout A," October 31, 1977.

Bll NIA, Memo No. 77-7424 of December 8, 1977, "Redesignation of Personnelfor MRMP Project."

B12 World Bank, "Staff Appraisal Report - Seventh Power Project in thePhilippines" - Report No. 1552-PH, May 27, 1977.

B13 World Bank "Staff Appraisal Report - Rural Electrification Project" -

Report No. 1848-PH, December 29, 1977.

PHILIPPINESMAGAT RIVER MULTIPURPOSE PROJECT: STAGE 1I, DEVELOPMENT

IMPLEMENTATION SCHEDULE

Year ~1977 1978 1979 18 9118WORK ITEM Year2 3 4 1 2 4 1 2 3 4

Package 1 - PreparatorySite InvestigationAccess Roads-NIA CampFoundation Grouting umuuDiversion Tunnels*

Package 2 - Dam ~~~~~~~~~~~~~Start Diversion Begin StorageRiver Diversionr 11111Excavation-Embankments Fill

________

Concrete Structures--Gates (intake & spillway) * iuumSuppIy less u..umummumlol NRelocation-

Package 3 - PowerPowerhouse nit onli-Penstocks IluI 1 2 3 4Generating Equipment muuUIIILpyIIUIIEIITransformers, SwitchgearI Transmission Line *I*11mmu***11

Package 4 - IrrigationIBaligatan Diversion Dam *1Irrigation Facilities * n u logom m.

Wet Wet Wet WetSeason Season Season Season

*-Major contract awvard dates.

World Bank - 18512

- 62 - Figure 3.1

PHILIPPINES: MAGAT DAM -PROJECT LAYOUT

I , Z 3 4 5 ~~~~~~~N,I 6ov

- --- --- -- -

NOTE:

4 I [ .OLD 2 3 4 5 | .0LD _ _~~~~~~~~~~~~~~~- I -

I \~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~N~~~~~~~7- 4

p + >-F ~~~~~~~~~~~~~j-~~~~ - ~~~~~~-i-- 1~~~~~~~v~~~~~~~~~~~~~~KP -s

* 9. *Q. - he

4f + 7 K V C'__ __ _

44~~~~~~~~~~~~~~~~~~~~~~~~~~4

RR ~ - + F

4V~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

PHILIPPINES: MAGAT DAM-SECTIONS THROUGH DAM AND SPILLWAY

LEFT INTERFADC STRUCTURE SfLLWAT STWUCTWImE POWER INTAKES __ 4IET INTERFACE STRN'CTURE

O- AE SPILLWAU_ ORIFICER UNTWY CRDNE -

- 7 RAA.GTES INOT SHOWN) MMR DO PILEL-00 1e500 ;E.IRRO\

------------ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~-- --- ~

- ------------ END E CONCRETE0ElitlE AG ESNDT SHOWNI 12 LEL140

=ERTUSGEND DCChU PRAWOATEID .SUIDE ' EL 13D0OD

E SWID3E9R3CK )A t -DNATRA CRANE

CL 19300D FSL-4

,

EL- p 00E --- T EXTR 7NmACREST ------- INEIR UIM Al

ELFST 60i0 0 1 -- '-__,_ kHID"T"KCbOR D ORIN LOHlNOLINE LEFT SIDE ELEVATION_s EL 16DOQ~L'I LSL- , \

1~~ MO--_RNAL GROL-N D LINE RIGHT SIDE ELEVATION

aL 45E -r - -- -- -- -- -- -

-- FLIP RUCOET

-- NE GALLEg -DARNAE HOIES~

DA`4ffIE0UI TAIN UX U W-*ATER EL ZOO 0_

DIRVNAGE GALLERYSECTKP4 TMR SPILLWAY

RAIN EMBANNMNTDA. AVIS

I EL 79 V CAMBER

MINI UM ALLOWABLE

HO - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ZONE MR

'oc~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 0

Rl,NDWTHDOBALIEAT FLUITS OF ZONE4OUNDATI EoTFD ACtE>AtC^ - AS OF EROD,E,E D-M. AILLOWABLE

MNSL DAO EL IN) E 4ZONE M9

-UHISINAL GROLEN0 SURFAC-E E VOOCR,,MSE ROU

MOON ISO 0*6 IISTCH3HHIL BAS

EMBANKMENT DAM

PHILIPPINESMAGAT RIVER MULTIPURPOSE PROJECT: STAGE II, PACKAGE 2

MAGAT DAM CONSTRUCTION SCHEDULE

Year 1978 1979 1980 1981 1982 1983WOR K IT EM Quarter 71-2374 ------- IW I LI- --- ]IWI

Bidding, Evaluation,Contract award

Mobilization. Roads. Camp ~~~~~~~~Start Dieersion Begin Storage

River Diversion I**h lIIlIh *EIhIIE E II I

Main DamExcavationFoundation Preparation

Fill (1 1,900,000Ocu.m)

Baligatan Dyke

ExcavationFoundation PreparationFill (2,188,000 cu.m)

Baligatan Creek DamExcavation-Foundation Preparation -0Fill (1,111,000 cu.m)Outlet Structure -Concrete

- Gates-

SpillwayExcavatio nFoundation PreparationConcrete (560,0O0Ocu.m) 11111 ntlGates InstallllSppyIIlIhIlhhIhh

Power IntakesIExcavationFoundation PreParation Concrete (430,000 cu in) IinstallGates lIIhIlISupply Illh

Penstockt and Powerhouse (Main

works by others - Package 3)Excavation (first stage only)I

Relocation

VVorld Bunk -1851 1

- 65 -Figure 4. 1

PHI LIPPINESMAGAT RIVER MULTIPURPOSE PROJECT: STAGE II DEVELOPMENT

NIA ORGANIZATION FOR SPECIAL PROJECTS

NIA Board

Administrator

Assistant AdministratorSpecial Projects

CENTRAL OFFICE STAFF

Engineering Department Agriculture Department

and Design ~~~~~~Water Management# Planning and Design l -| and Land Use

I l Farmers AssistanceConstruction Management j and Training

Evaluation andOperation and Maintenance Statistics

Equipment Business Management

l Central Luzon Projects Iriato Proec

Angat - Magat Integrated Chico RiverAgricultural Devt. Project MuIrrigation Project

(AMIADP) (CR IP)

Davao Del Norte Philippines Rural

* ~~~~~~~~~~~~~~~~Integrated Irrigation Project _ _Development Project

(DNIIP) (PRDP)

Laguna De Bay Pulangui River

Development Project _ _Irrigation Project

I LBDP) (PR IP)

| Cagayan Integrated Magat River

Area Development Project _ _Multipurpose Project

(CIADP) (MRP

1 Include IJoper Pampanga, Aurora - Penaranda and Tarlac Projects

World Bank - 18509

PHILIPPINESMAGAT RIVER MULTIPURPOSE PROJECT: STAGE 11, PACKAGE 2

PROPOSED ORGANIZATION FOR PROJECT CONSTRUCTION

| Admnitrator

Assistant AdministratorSpecial Projects

| Joint NlA/NPC _ _ _ NIA Board of

| Technical Committee -r - - Conltants

| Regional Projects o _ | Poect Ma.ae Ma.ager!J Magat Dam

A~~ _L

- - -| I Asst. Project Manager IEngineeingCRIP CIADP | MRMP - Stage I Consultants

F maris Danm | Irrigation Development Chief EngmneerMaL s Dam _ _ _ _Divisions DaDivisivisDamoivisons-

Const ructionEgnern eo.W MaterialsqW,nn ContractsSuperviin EgneigGetcncttstn qimn Administration

Embankment SpillwayDiversion Tunnels Dm n naeDarns ad Intakes

I/ Magat River Multipurpose Project (MRMP)

Chico River Irrigation Project (CRIP)

Cagayan Integrated Area DevelopmentProject (CIADP)

World Bank -18510

526' Srcb,ay Clk,-e 12 i

t1 i.OOO \;/t7<j4 -/ > (-0/2

is N' c t S r _ Ab. >5•

-i1PHI L4 tvgPo ESjara--a) t ~ -. i

° \ 0 , ; AERA - 2 4 3,654 o | !1

I pprpaptnd lvrPrlet 18rAL// k t' ,m / C& c t~ aIIP&S t 111 Auol Ieaar JfOnMteO 0rI 19 DAM NOREi Nt'2( !v10f> ;g7 Xr5 hf

Aceteon L igN~

,0~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0I6' Urdereta v " 0' '~~~~~~~ 1v IRR(GATN

17

AN 1HISPHILIPPINES

V na~e LUZON ISLAND ~/Bre Ar! 1 ABR

A ~ '?2IOCS NORTEG

t0 ~ ~~ [0(0 tIc ' f>8 °IVA k__roposmGancnos

- 0 X X ST A UNION arK 3 S MOUNTAIN PROVINCE o6 BENGJET

cols,KALINS,A APAYSO

19 CAGAYANOISABELA Q

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I3e, ATAAN ro a Mercedes

6i . Ceatapl .0 I gsn PAMr'AIsA d o ms an d IrETUppe P-nepentg PRive Pro- ve 7 PANGAI INAN

Lo.n 637-PHI It TADLAC ~2A.ror. P-ns i '- P t CAMrALES

ILoan CR 94!I2Prri'fTr,Lto 5rgt stem Improvemen-- 20 DATANOAS

Peoit...Lot OBOP-I 21 CAVITEWZ Chi-o Dom Ire1gardlo Peoso- 22 LOGUNA ~ 0

lted 27 0PHi 2 1122cgehn .mirton opanoe 24 OUEZON

-It---- Notional n phecysioc ,t3.

Pror ceanoro bofucb ndarea D,0

Rvrbasi Enoedories

TN. r>5fl oI~~~~~DA AN, A A35423oA

E½SEAON VERS? MGTRIE MLIUROEPRJC

Noo Al~~~~~~~~~~~~~~~/ ()-- oln hgrey

~~~~~~~3,fl ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~te OG

MAGAT RisERs ondLTIPURDPdaSERJC

rare mep tea bssap,epamUbPras ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Prpoedman onl

roe aaeeoieaeavs of me aeaOaiOaa -~ ~ ~ ~ ~~~~~~~~~~~~v d~-M1 taeI iprveen ae

rinenepaarrarsasorieie erect/rea/ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ IStgeI-Aexenio cre

The veeeamirreriaaavaedaadrhe 0 2 4~~~~~~~~~~~ Stge 6 npoeet ire12

va tar are/n airrIo a'O aDsFfun Lo.o(nP, 15L4o-rPH

Wooer Boat and ire annioaeaa. mm 66 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ StgeItprpoedExenio aea

rvdlrmsoiaaiAe re0 a,ercsoa an ,x. 0 2~~~~~~~~~~i Posed 6am an eerr

aevesmUonpanOantndnnaemevm - . . - *~~~~~~~~~~~~~~~~~~~~~~~esttemniWIE

orvoreeilanvs aneova Soon/came <n'\efl U -2~~~~~~~~~~R,er an eistng am

IBRD 3562R4MAACH 1978

r200

35buyan Channel UZON

_f W g~~~~~~~~~~~~~~~~~~~R EA P MAiPnSouth Chi i

A ~~~~~~~~~~~~~~~~~sea

XOLoag r: f VI4

SOUTH CHINA SE S 0

f y e C o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~INDAI'A180 S JSA

Vigano 0 Bangued Tuguegarao L|Ie,s Sea

1240RV +6 abuk g)<14

4 /t/~~~lL U Z N llNagan

\ ZflA~~~~ontoc PalananO|

PHILIPPINE SEA

/f Lagawe ° DAp> NJ

San Fernantdo/

t t~~~BECK75MW A aombong J>

1 ?' Casiguran PHILIPPINES

LUZON GRID160 §Ling NMAN POWER PLANT AND 160

100 mw ATBGN230.kv TRANSMISSION SYSTEMTRANSMISSIONi+STA.CRUZ / ,\MAIWA Y ; POIER PLANTS SUBSTATIONS LINES

G, A t i * *- EXISTING NPC,_) \ \ OTa Sanatuan ( 2 ~ EXISTING MECO

vo \ VOA ^ 2 l CABANATUAN aK AON-GOING IBRD PROJECT

Iba\ - \ ON.GOiNG OTHER PROJECT

7th lBRD) POE PRJETA \ \ ,tsw \ 9 * (Loan 1EBfPN)

.\ Angeleso \, - - -… - FUTUREMAGAT\ MEXICO,f= I \ ,-v REQUIREMENTS

21Z MW ~ ~ ~ ~ ~ ~ 4 0 2, 40O I 00OLOW PANG PALAY KILOMETERS

eA M wL\AL AA

No. 2 16 BINAN YA \61 > L D

14O~~~~~~~~agya 0 MAK-BAN } 4-140

N: 2n t \_ 9 9 N AGA ; 1

\ MINDORO g AW<, (<

1210° 27>> 14