Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 16200-MA

IMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT(Loan 2740-MA)

December 23, 1996

Agriculture and Environment Operations DivisionCountry Department IEast Asia and Pacific Region

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

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CURRENCY EQUIVALENTS

Currency Unit Malaysian Ringgit (RM)US$ 1.00 RM 2.48 (at appraisal in April/May 1985)

RM2.50 (at loan closing in June 1996)

WEIGHTS AND MEASURES

Metric System

FISCAL YEAR

January I to December 31

ABBREVIATIONS AND ACRONYMS

DID Department of Irrigation and DrainageDOA Department of Agricultureffb fresh fruit-bunch (oil palm)ha hectareICR Implementation Completion Reportmcm million cubic metersO&M Operation and MaintenancePMIJ Project Management UnitRISDA Rubber Industry Smallholders Development Authority

Vice President: Marianne Haug, Acting Vice President, EAPDirector: Javad Khalilzadeh-Shirazi, EAIDivision Chief: Jeffrey Gutman, EA I AETask Manager: Syed Husain, EAIAE

FOR OFFICIAL USE ONLY

INMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT(Loan 2740-MA)

CONTENTSPage No.

Preface. iEvaluation Summarya..

PART I: PROJECT IMPLEMENTATION ASSESSMENT ................................... 1

A. Statement/Evaluation of Objectives .................................................... IB. Achievement of Objectives ....................................................9C. Implementation Record And Major Factors Affecting The Project ........ 4........ __ ....4

Implementation Record .................................................... 4Major Factors Affecting the Project .................................................... 6

D. Sustainability .................................................... 7E. Bank Performance .................................................... 8F. Borrower Performance .................................................... 8G. Assessment of Outcome ................................................... 8H. Future Operation .................................................... 8I. Key Lessons Leamed ..................................................... 9

PART II: STATISTICAL TABLES .................................................... 1.1

Table 1: Summary of Assessments .................................................... 12Table 2: Related Bank Loans .................................................... 13Table 3: Project Timetable .................................................... 13Table 4: Loan Disbursements: Cumulative Estimated and Actual ............................ 14Table 5: Key Indicators for Project Implementation .................................................. 15Table 6: Key Indicators for Project Operation ................................................... 16Table 7: Studies Included in Project ................................................... 16Table 8A: Project Costs ................................................... 17Table 8B: Project Financing ................................................... 18Table 9: Economic Costs and Benefits ................................................... 18Table 10: Status of Legal Covenants ................................................... 19Table 11: Compliance with Operational Manual Statements ....................................... 20Table 12: Bank Resources: Staff Inputs ................................................... 20Table 13: Bank Resources: Missions ................................................... 21

APPENDICES

Appendix 1: Completion Mission's Aide-MemoireAppendix 2: Borrower's ICRAppendix 3: Economic Re-Evaluation

N,lap IBRD 18871R

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.

IMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT

(Loan 2740-MA)

PREFACE

This is the Implementation Completion Report (ICR) for the Second WesternJohor Agricultural Development Project in Malaysia, for which loan 2740-MA in theamount of US$55 million equivalent was approved on July 15, 1986 and made effectiveon September 16, 1986.

The loan was closed on June 30, 1996 after an 18-month extension from theoriginal closing date of December 31, 1994. There were cancellations of US$4 millionon January 25, 1993, US$1.62 million on September 22, 1994, and US$ 0.067 million onJanuary 10, 1996. The remaining loan amount of US$49.31 million was fully disbursed,and the last disbursement took place on September 6, 1996.

The ICR was prepared by Messrs. Syed Husain (Task Manager) and JagdishSrivastava (Consultant Engineer), Agriculture and Environment Operations Division(EA1AE), Country Department 1, East Asia and Pacific Region, and reviewed by Messrs.Jeffrey Gutman. Chief, EA1AE, and Walter Schwermer, Project Advisor, EAI. Theborrower provided comments that are included as Appendix 2 to the ICR.

Preparation of this ICR is based on the Bank's implementation completionmission in October/November 1996 and on material in the project file. The borrowercontributed to preparation of the ICR by offering views reflected in the mission's Aide-Memoire (Appendix 1), commenting on the draft ICR, and preparing it's own evaluationof the project's execution (Appendix 2).

IMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT(Loan 2740-MA)

EVALUATION SUMMARY

i. Introduction. In the mid-1980s, rural poverty incidence was still high inMalaysia at over 20%, with the rural areas accounting for two-thirds of the nation's poor.Government's policy emphasis was, therefore, on maximization of farm income ofsmallholders, and expansion of agricultural production. In Johor, which was the largestagricultural producer among Malaysia's states, the southwestern part was mostly flood-prone and poorly-drained. About 135,000 ha of this area was provided with flood controland drainage works under the Western Johor Agricultural Development Project (Loan973-MA), which was completed in 1984. This was followed by the Second WesternJohor Agricultural Development Project (Loan 2740-MA). The project area coveredabout 210,000 ha, of which some 97,000 ha was poorly drained and subject to regularflooding.

ii. Project Objectives. The main project objective was to control floods andimprove drainage to facilitate development of 85,000 ha. Of this, 14,500 ha of senilerubber on smallholdings was to be replanted with high-yielding rubber, oil palm(including 3,000 ha to be developed into 30 mini-estates), and diversified crops, duringthe project period under the ongoing replanting grant scheme of the Rubber IndustrySmallholders Development Authority (RISDA), and the remaining 70,000 ha was to bedeveloped after completion of project works. The project civil works were to includeconstruction of a storage dam (called Bekok dam); river improvement works;construction of a catchment separator bund and a small flood retarding embankment;construction of main and secondary drains; construction of new agricultural roads, andresurfacing of roads and maintenance tracks along existing secondary drains; replacementof eight bridges over the rivers to be widened; and flood protection for the town of ParitSulong. In addition, support was to be given to project management in the form ofengineering consulting services, equipment and vehicles, administration buildings, a soilslaboratory, and incremental project staff.

iii. Evaluation of Objectives. Project objectives were clear and realistic, importantfor the agricultural sector in Johor State, in particular, and Malaysia, in general, andconsistent with the Bank's country assistance strategy in the mid-1980s, whichemphasized raising of productivity on smallholder farms and rural poverty alleviation.Conceptually, the project was neither complex nor risky. However, appraisal

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expectations still turned out to be optimistic, and the project, when completed in 1998,would have spanned 12 years, due to delays caused by a variety of factors (para. iv).

iv. Implementation Experience. At appraisal, project completion was expected in1993, and the Bank loan closing date was December 31, 1994. When the loan closed onJune 30, 1996 after two extensions, works on drains and farm roads were still continuing.These works are expected to be completed by the end of 1998. The delay in projectimplementation was due to several factors, including inadequate counterpart funding inthe initial project years, major design changes for the bridges, a longer than anticipatedtime taken in completion of designs and award of contracts for drainage and farm roadworks, and some land acquisition problems. Although project implementation wasdelayed, the major civil works (Bekok dam, flood retarding embankment, catchmentseparator bund, improvement of rivers, and reconstruction/strengthening of the bridges onthese rivers) had been completed by the loan closing date. The completed project workshave been properly maintained and monitored. Land acquisition and compensation, andresettlement of 74 families displaced from the Bekok dam storage area, have beensatisfactory. The resettlers were provided alternative land and other facilities, andavailable evidence suggests that their current income and standard of living are betterthan before resettlement. However, the issuance of land titles to the resettlers, and theremaining payment to other land owners for acquired land, needs to be expedited. Asregards the agricultural component of the project, the replanting under grants by RISDAis almost the same as expected at appraisal.

v. Costs and Financing. At loan closing, project costs were estimated at US$107.6million equivalent, compared to US$148.3 million at appraisal. However, an additionalUS$22.2 million equivalent would be needed until project completion in 1998, bringingthe total project cost to US$129.8 million equivalent, or 88% of the appraisal estimate.The cost underrun is primarily due to significantly lower costs of Bekok dam, riverimprovement works, and land acquisition. The final loan amount of US$49.3 million(after cancellations on three occasions from the originally approved US$55.0 million)financed about 46% of the project cost at loan closing (38% of the estimated cost atcompletion in 1998), with the Government financing the rest.

vi. Results and Impact. The project objectives laid down at appraisal have beenmostly achieved. Of the 85,000 ha agricultural area expected at appraisal to eventuallybenefit from the project's flood control and drainage works, approximately half isestimated to be benefiting already by the end of 1996. These areas are also benefitingfrom construction of farm roads, which inter alia have substantially reduced transportcost of produce and inputs, and increased labor mobility to nearby towns (particularlyimproving opportunities for women to work on off-farm jobs, since transport to and fromhome is now provided by factories in nearby urban areas). Flood damage to property inthe project area and the human suffering and public costs due to evacuation of affectedpeople to the relief centers have been virtually eliminated.

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vii. Project sustainability is likely as the borrower has adequate technical andfinancial capacity to operate and maintain project civil works; and, on the agriculturalside, farmers are expected to have continued interest in growing oil palm, given itsrelatively low labor requirements and reasonably good price prospects. The overalloutcome of the project is satisfactory. The re-estimated net present value of the project ata discount rate of 10% is RM57.8 million, and the economic rate of return (ERR) 13%,compared to the appraisal estimate of 14%. The lower ERR at completion is mainly dueto lower projected world prices for palm oil.

viii. The performance of the Bank and the borrower from project identificationtlhrough supervision was largely satisfactory. The Bank insisted on thorough preparationol the project, learning from the experience of the Phase I project, and delayed appraisaluLntil preparation was complete. The borrower performed very well on procurement. Thestandard of construction, operation and maintenance (O&M) of the Bekok dam alsodeserves special commendation.

ix. Future Operations. The Project Management Unit (PMU) has already preparedan O&M plan for project civil works. The Department of Irrigation and Drainage of.lohor State (State DID) is expected to take over the O&M of project works from theFederal Government soon after completion in 1998. Based on the experience of O&Mfunding by the Federal Government and State DID for Phase I works, the estimatedamount of RM13.5 million per annum required for O&M of Phase II works is within thefinancing capability of the Government. However, consideration should be given toincreasing cost recovery from the farmers by raising the drainage charges, which haveremained at RM 1 5/ha/year since 1970, compared to the current maintenance cost of aboutRM37/ha/year.

x. Key Lessons Learned. The main lessons learned from project implementationexperience are the following: (a) action on land acquisition and detailed designs for civilworks prior to project commencement helps expeditious project implementation, as wasdemonstrated by the smooth and timely implementation of the Bekok dam constructionand river improvement works under the project; (b) in a rapidly industrializing economylike that of Malaysia, with growing labor shortages, attracting competent technical staff tothe public sector will be increasingly difficult, and, therefore, greater reliance should beplaced on the private sector for the O&M of project works; (c) to ensure long-termfinancial sustainability of O&M of project works, and to promote greater beneficiaryparticipation in O&M, cost recovery from beneficiaries should be increased through interalia appropriate adjustments in drainage charges; (d) the de-emphasis on theestablishment of new mini-estates (none was established under the project) was anappropriate response by RISDA to the many problems faced by existing mini-estates, andwas consistent with the Government policy to phase out direct involvement of the publicsector in agricultural production activities; and (e) peat soils should not be drained bydeep drains with large spacing; instead, shallow drains with less spacing and with waterlevel control should be used to keep the area drained without lowering the groundwaterlevel significantly.

I

IMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT

(Loan 2740-MA)

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. STATEMENT/EVALUATION OF OBJECTIVES

1. Introduction. In 1985, when the project was appraised, the agricultural sector was stillplaying an important role in the Malaysian economy, contributing about 23% of GDP, 40% oftotal merchandise exports, and 35% of total employment. However, the agricultural growth ratehad slowed down to 3.7% per annum (p.a.), compared to 7% p.a. in the 1960s and 1970s.Moreover, rural poverty incidence was still high at over 20%, with the rural areas accounting forabout two-thirds of the nation's poor. The Government, therefore, reviewed its sectoral objectivesand announced its National Agricultural Policy (NAP) in 1984. Maintaining the emphasis onpoverty alleviation, the NAP objectives were: (a) maximization of farm incomes to improve thequality of rural life and facilitate retention of productive labor in the sector; and (b) expansion ofproduction of traditional and new export and food crops to revitalize the agricultural sector.

2. At the time of project appraisal, Johor was the largest agricultural producer amongMalaysia's states. However, its rural incomes were about half of urban incomes, and the annualgrowth rate of its farm output was less than half of the national average. The southwestern part ofthe State, settled with smallholders, was mostly flood-prone and poorly drained. Infrastructuredevelopment of about 135,000 ha in this area was successfully completed in 1984 under theWestern Johor Agricultural Development Project (Loan 973-MA). This was followed by theSecond Western Johor Agricultural Development Project (Loan 2740-MA). The project areacovered about 210,000 ha. The average annual household income for rural families in the projectarea was RM356 per month, which was about equal to the official estimate of the rural povertyincome level.

3. Statement of Objectives. The main project objective was to control floods and improvedrainage to facilitate development of 85,000 ha in the project area. Of this, 14,500 ha of senilerubber on smallholdings was to be replanted with high-yielding rubber (3,000 ha), oil palm(10,000 ha, including 3,000 ha to be developed into 30 mini-estates), and diversified crops (1,500ha) during the project period under the ongoing replanting grant scheme of the Rubber IndustrySmallholders Development Authority (RISDA), and the remaining 70,000 ha (including 15,000ha of coconut to be intercropped with cocoa, coffee and fruits) was to be developed aftercompletion of project works, as part of the ongoing programs under several agencies. The projectcivil works were to include: (a) construction of a storage dam (called Bekok dam); (b) riverimprovement works, including river enlargement (79 km), river realignment (14 km), and newlevees along tidal reaches (55 km); (c) construction of a catchment separator bund (12 km), and aflood-retarding embankment; (d) construction of a main drainage system consisting of high level

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drains (146 km in non-flooded areas and 69 km in flooded areas) and associated structures; (e)replacement of eight existing bridges on the main rivers; (f) flood protection for the town of ParitSulong; and (g) development of three coastal blocks through construction of secondary drains (85km), new agricultural roads (112 km), and resurfacing of existing roads (920 km) andmaintenance tracks along existing secondary drains (350 km). In addition, support was to begiven to project management in the form of engineering consultancy services, equipment andvehicles, administration buildings, a soils laboratory, and incremental project staff.

4. Evaluation of Objectives. Project objectives were clear and realistic; important for theagricultural sector in Johor State, in particular, and Malaysia, in general; and consistent with theBank's country assistance strategy in the mid-1980s, which emphasised raising of productivity onsmallholder farms and rural poverty alleviation. Conceptually, the project was neither complexnor risky, and, considering that it was the second phase utilizing a project organization which hadalready evolved and the experience already gained during the first phase, it did not place anysignificantly heavy demands on the borrower's implementation capacity. The major project risks,viz., land acquisition delays and inadequate counterpart funding due to government budgetaryproblems, were correctly identified at appraisal. These risks were incorporated into project designby having a conservative pace of implementation over seven years, including a lead time of oneyear prior to commencement of works during which land acquisition and preparation of furtherdetailed designs would proceed. However, appraisal expectations still turned out to be optimistic,and the project, when completed in 1998, would have spanned 12 years, due to delays caused by avariety of factors (para. 19).

B. ACHIEVEMENT OF OBJECTIVES

5. Although project implementation was delayed, the major civil works (Bekok dam, floodretarding embankment, catchment separator bund, improvement of rivers, andreconstruction/strengthening of the bridges on these rivers) had been completed by the revisedloan closing date of June 30, 1996, and the project had substantially achieved its main physicalobjective of providing flood control and drainage. The following benefits have already occurred:(a) of the 85,000 ha agricultural area expected at appraisal to eventually benefit from project floodcontrol and drainage works, approximately half is estimated to be benefiting already by the end of1996, which includes areas replanted under RISDA grants, previously abandoned area broughtunder cultivation, areas heavily damaged in the past due to frequent floods now enjoyingsustained production, and areas enjoying increases in yields due to better drainage; (b) all theabove areas are benefiting from construction of farm roads, which inter alia have substantiallyreduced transport cost of produce and inputs, and increased labor mobility to nearby towns(particularly improving opportunities for women to work on off-farm jobs, since transport to andfrom home is now provided by factories in nearby urban areas); (c) the construction andstrengthening of bridges has led to an increase in the volume of traffic and savings in transportcosts; (d) increased pumping from the Bekok river has improved water supply to nearby towns;and (e) flood damage to property in the project area, and the human suffering and public costs dueto evacuation of affected people to the relief centers, have been virtually eliminated. The entire85,000 ha is expected to be relieved from internal flooding and to have good road access when thedrainage and farm road works are completed in 1998.

6. Poverty Alleviation Impact. To assess project impact, a rapid survey was undertaken bythe Project Management Unit (PMU) in October 1996 in five blocks representing different soiltypes and stages of development. Preliminary results of the survey indicate that flood occurrenceand duration were reduced, average farm incomes doubled, and total household incomesquadrupled after the project (details are in the borrower's ICR in Appendix 2). The average farmincome reported is RM4,330. This income is low, since oil palm, which is the predominant cropin the area, is mostly young in the five surveyed blocks benefiting from flood control. With a 2.5hla average farm size in the project area, the net farm income from mature oil palm would be aboutRM8,000-8,500 per annum or RM700 per month in current prices at the end of 1996. Since thesereturns are considerably higher than the official poverty threshold of about RM400 per family permonth, the project has had a significant poverty alleviation impact already. In contrast to farmincome, the average total household income reported in the survey is RMI 1.500 after the project,compared to RM2,1 00 before. A significant part of this increase is attributable to betteremployment opportunities for household members due to the improved roads system under thepro.ject.

7. Institutional Impact. Although not included in the original scope of project activities,the Bank and the borrower agreed to include the training of a few staff under the project. Thirteenstaff attended overseas short courses in water management. land drainage, and polderdevelopment, and seven staff made overseas training visits to drainage projects. Training courseswere also held locally, for which limited training equipment was procured.

°. Environmental Impact. The overall environmental impact of the project is assessed tobe positive. With the elimination of flooding, the farming families, who had left the area insearch of better livelihood, are returning to the area. Some environmental aspects deserve specialmention: (a) to reduce flooding, the project adopted the environmentally-friendly solution ofwidening and deepening the rivers, including proper disposal of the excavated material, instead ofthe unfriendly solution of constructing levees along the rivers: (b) the project contributed toenvironmental improvement by eliminating riverside swamps; (c) the negative implications of'Bekok reservoir construction were minimal, since mostly rubber and oil palm plantations weresubmerged. The reservoir water quality is being regularly monitored; and (d) a study of peat soilsbehaviour, not originally included in the project, was undertaken and provided useful guidelinesto the Government to enable it to formulate at a later date a policy for management of these soils.Plantation of rubber and oil palm on these soils, when provided necessary drainage for increasingyields, causes settlements of'these soils, as established by monitoring studies conducted under theproject. A specialized international institute known for its work on peat soils was contracted forthe interpretation and analysis of' tle monitoring data collected. The analysis of the data showedthat water level in the drains needed better control, to avoid settlement of' peat soils andconsequent desiccation. The study concluded that deep secondary drains with larger spacing hadinferior performance as they lowered the water table excessively near the drains, causingundesirable settlements. The study confirmed the importance of tertiary drains and of maintainingthe water level high enough in these drains by constructing check structures.

9. Resettlement. The land acquired for civil works did not llave any permanent residents. Inthe Bekok reservoir area, 90 squatter families were initially identified as engaged in agricultural

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operations. After a detailed review, it was found that only 74 families had to be resettled.Accordingly, facilities were created for access to the selected resettlement site and landdevelopment carried out by the concerned agencies, and the families shifted in time to permit thefilling of the reservoir in 1990. Each family was provided alternative land (3 acres or 1.2 ha),which is now mostly planted with rubber, since the resettlers had previous experience with thiscrop. The resettlers also received assistance from the Department of Health and Social Welfare inthe first three years, and extension services for rubber were and are provided by RISDA. A socio-economic survey carried out in 1994 by the Ministry of Agriculture showed that only two familieshad incomes less than RM 200 per month, and were thus in the hard-core poor category. Thesetwo families received assistance under the Government's Poverty Eradication Program. In late1996, only 52 families were still living in the resettlement site; the other 22 families lived innearby towns and came to the resettlement site to take care of their farms. Most of the rubbertrees are now under tapping, and this supplements the resettlers' income from work in theadjacent private estates (some resettlers also get income even now from their plantations in theBekok reservoir area). Available evidence suggests that the current income and standard of livingof the resettlers are better than before resettlement. However, due to cumbersome clearancesrequired, the process of providing land titles to these resettlers has not yet been completed,although initiated about four years ago. This process needs to be expedited.

C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT

Implementation Record

10. Civil Works Component. The commencement of civil works was generally delayed, andexecution took longer than envisaged, except in the case of the Bekok dam, as shown below:

Civil Works Start CompletionSAR Actual SAR Actual

Bekok Dam 02-87 07-87 01-90 11-90Flood Retarding Embankment n.s. 10-92 n.s. 05-95Catchment Separator Bund 07-89 09-92 12-90 09-94River Improvement Works 08-87 to 06-89 to 01-91 to 09-93 to

06-89 07-92 12-92 11-95Bridges 07-88 04-89 to 06-90 03-92 to

03-93 10-94Drains and Roads 01-88 to 01-91 to 12-89 to 02-93 to

01-91 12-95 12-93 05-98(n.s. = not specified)

11. The Bekok dam was constructed on a tributary of the Bekok river, where a reservoir ofsufficient capacity was created, and the main river diverted to it by constructing a 6.5 kin longfeeder channel. A panel of experts (POE) was engaged for review of the design consultants'

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recommendations, but due to delay in its appointment, the POE had its role limited to theimplementation period. As executed, the main dam has two sections, with a height of about 16 mand a total length of 3,900 m, and there are 1 1 saddle dams having a total length of 1,900 m.There were no major implementation problems. The dam is well maintained and is beingmonitored for safety. The performance of the dam is satisfactory. So far, the inflow floods havenot been large, the uncontrolled concrete spillway (20 m long) having run only twice, andemergency unlined spillway (250 m long) having not run at all. The twin radial gate-controlledoutlets have been used continuously to control the outflow from the reservoir. The dam has thedual purpose of holding the floods from the catchment and providing municipal water supply.The flood routing through the reservoir made allowance for about 24 mcm of capacity for watersupply up to the year 2010, and 51 mem thereafter. Although the gate-controlled pipe formunicipal water has not been used for delivering direct supply, about 21.5 mcm (57,000 cm/day)of water is being pumped from the Bekok river about 2 km downstream of the dam by the privatewater supply company.

12. The flood retarding embankment on Simpang Kiri river (maximum height of 2.7 m andlength of 1,120 m), the uncontrolled concrete overflow spillway (11 m long), the uncontrolledriver sluices, and the catchment separator bund between Simpang Kiri and Bekok rivers(maximum height of 3 m and length of 5,590 m) were satisfactorily completed, although withdelay, due to slower than expected completion of designs and inadequate counterpart funds.

13. The river improvement works were completed on Sembrong, Simpang Kanan, Bekok, andSimpang Kiri, by widening and deepening of the section and limited re-alignment. Duringdetailed review of implementation designs carried out by the supervision consultants, the leveesenvisaged at appraisal for confining flood water to the lower reaches of the rivers were mostlyreplaced by section widening and deepening. Construction started three years late due toinadequate counterpart funding and delays in finalization of designs and tender documents. Therewere also delays in land acquisition for river widening and disposal of excavated materials. Theriver improvements resulted in major relief to the town of Parit Sulong from flood damages. Theprotection works for this town envisaged at appraisal were, therefore, not implemented under theproject.

14. As regards replacement of eight bridges envisaged at appraisal for removing obstructionsto the passage of floods down the rivers, further examination by the supervision consultantsrevealed that nine bridges needed replacement with greater width to accommodate future traffic,while two others required strengthening to ensure that there was no obstruction to the river flow.The reconstruction/strengthening of the 11 bridges was completed with major delays, mainly dueto the increased work, problems created by the failure of two contractors, and delay in landacquisition. The cost of the work on the bridges increased substantially (para. 18), but theadditional investment was worthwhile.

15. The execution of the drainage works and farm roads was divided into 18 contractpackages. At loan closing in June 1996, the contracts for all the packages had been awarded, andworks had already been completed against four contracts, and were in an advanced stage (likelycompletion within 1996) against nine contracts. Of the remaining five contracts, works against

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two are scheduled to be completed by the end of 1997, and against the other three by the end of1998. The delay in the commencement of work was mainly due to the long time taken in thepreparation of designs. These designs were prepared by the Department of Irrigation andDrainage (DID), which had a shortage of engineers. The pace of implementation was affected bythe shortage of construction materials and transport vehicles, which was a national problem in thepast two years, due to the construction boom in the country. The program for the construction ofthe tertiary drains, which was to be implemented by the farmers themselves under guidance fromthe project, progressed well in the areas not having peat soils, but was slow in the area of peatsoils. In the latter area, construction of the tertiaries by the farmers will be supervised by the DIDto ensure proper control of the ground water level, as recommended by the study of the behaviorof peat soils in the area (para. 8).

16. Agricultural Component. The replanting of about 14,300 ha of old rubber under grantsby RISDA was almost the same as expected at appraisal (14,500 ha). About 9,200 ha wasreplanted with oil palm, 2,800 ha with high-yielding rubber, and 2,300 with other crops (mainlyfruits). In contrast to the appraisal expectation that 30 mini-estates for oil palm on 3,000 hawould be established under the project, none was established. This was due to the fact thatRISDA recognized many problems in the existing mini-estates and took an appropriate policydecision to de-emphasize establishment of new mini-estates.

17. Project Management Support Component. The buildings subcomponent was limited tothe construction of the Farmers' Development Center (FDC), the building for the project officehaving been completed prior to the effectiveness of the Bank loan. The FDC was at an advancedstage of construction by the end of 1996. The proposed laboratory for the Department ofAgriculture for monitoring acid sulphate soils was constructed, but funded from a source otherthan the Bank loan. The procurement of equipment and vehicles was limited to a few items (onefront end loader, one backhoe, six four-wheel drive vehicles, and a few office equipment).

18. Project Costs and Financing. At loan closing, project costs were estimated at US$107.6million equivalent, compared to US$148.3 million at appraisal. However, an additional US$22.2million equivalent would be needed until project completion in 1998, bringing the total projectcost to US$129.8 million equivalent, or 88% of the appraisal estimate. The cost underrun isprimarily due to significantly lower costs of Bekok dam (60% lower), river improvement works(25% lower), and land acquisition (30% lower), although cost of bridges increased 16 times, costof consultancies increased 2.5 times, and cost of drains and roads is expected to be 50% higher bycompletion in 1998. The final Bank loan amount of US$49.3 million (after cancellations on threeoccasions from the originally approved US$55.0 million) financed about 46% of the project costat loan closing (38% of the estimated cost at completion in 1998), with the Government financingthe rest.

Major Factors Affecting the Project

19. There were negative as well as positive factors affecting project implementation. Some ofthe negative factors were within the control of the borrower, and some were beyond its control.The main negative factors were: inadequate counterpart funding in the initial years due to thebudgetary problems of the Government; inadequate design capacity in DID leading to a

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significant delay in the implementation of drainage works and farm roads; poor performance ofsome contractors; and shortage of construction materials, equipment and labor due to theconstruction boom in the country. The main positive factors for project implementation were:advance action on land acquisition for Bekok dam (although there were some delays in landacquisition for other works); familiarity of the Project Management Unit (PMU) with the Bankprocurement procedures; and use of supervision consultants. Some of these factors are discussedfurther below.

20. Counterpart Funding. Counterpart funding was inadequate in the initial project years tomeet the full requirements for the works. Due to the Government's budgetary problems at thattime leading to insufficient provision for the project in the Fifth Malaysia Plan (1986-90), it waspossible to pursue only Bekok dam construction, and the river works had to be delayed.Continued budget stringency in the Sixth Malaysia Plan (1991-95) delayed the commencement ofworks for the drainage network and roads. The provision of RM91.8 million for the project in theSeventh Malaysia Plan (1996-2000) is sufficient for the completion of the remaining works.

21. Land Acquisition. Land acquisition needed for the execution of civil works was less thanthe appraisal estimate of 3,104 ha (dam 1,300 ha, river works 776 ha, and drains and roads 1,028ha). Actual acquisition through 1998 would be 2,781 ha, of which 1,728 ha for the dam andreservoir were acquired in 1987, 918 ha for the river works were acquired between 1987 and1990, and 135 ha are in the process of acquisition since 1990 for the drainage and roads network,the requirement for which is being minimized by aligning the drains in the reservations alreadyavailable, as far as possible. There were delays in land acquisition, mainly due to proceduralproblems. Compensation for land acquisition has been mostly completed.

22. Procurement. Procurement of civil works was carried out following internationalcompetitive bidding (ICB) procedure for three major contracts, and national competitive bidding(NCB) procedure for the rest of the contracts. Force account work was not carried out. Workscarried out under ICB contracts amounted to about 40% of the total cost of works. Familiarity ofthe PMU with the Bank's procurement guidelines greatly facilitated project implementation, andgood competition under both ICB and NCB was mainly responsible for the lower costs of Bekokdam and river works (60% and 25% lower, respectively, than the appraisal estimates). Thecontractors performed satisfactorily except in the case of two contracts for the bridge works andone contract for drainage works and farm roads, which had to be canceled and fresh contractsawarded.

23. Consultancies. The use of supervision consultants under the project resulted in goodquality control, efficient contract management, and effective monitoring of completed works. Thesupervision consultants also reviewed the detailed designs which had been made earlier, and quitea few changes for the better were carried out, specially for the river works and the bridges. Theperson-months of these consultants, therefore, increased considerably.

D. SUSTAINABILITY

24. Sustainability of project benefits is likely as the Government has adequate technical andfinancial capacity to operate and maintain project civil works; and, on the agricultural side,

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farmers are expected to have continued interest in growing oil palm, given its relatively low laborrequirements and reasonably good price prospects. However, sustainability would depend ongood operation and maintenance (O&M) of project facilities (see paras. 28-31 for a detaileddiscussion).

E. BANK PERFORMANCE

25. Bank performance was overall very satisfactory during the project cycle. To ensure properpreparation, the Bank suggested, and the borrower accepted, carrying out of a detailed feasibilitystudy to supplement the earlier study which was weak in many aspects. The revised studyadequately covered the technical, financial, economic, environmental, and social aspects, and itwas only then that the Bank appraised the project. During implementation, the Bank generallyprovided quick decisions on procurement matters, particularly those relating to selection ofconsultants and ICB tenders, and Bank supervision missions had the required expertise. TheBank also agreed to the borrower's request to finance the training of a few staff under the project,thus benefitting project implementation.

F. BORROWER PERFORMANCE

26. Overall performance of the borrower was also satisfactory, except for inadequatecounterpart funding in the initial years of the project. Project implementation was facilitated bythe familiarity of the PMU with works under Phase I. The major civil works comprising damconstruction and river improvements were ready for implementation, with the designs and tenderdocments almost complete, when the Bank loan became effective. However, there were delays incompleting the designs of the drains and roads, which were carried out by DID, even though itwas short of engineers. In hindsight, as pointed out in the borrower's ICR, it would have beenpreferable to have a single body design the whole system (flood mitigation as well as drainage) toensure integrated and timely implementation. The borrower performed satisfactorily in landacquisition and resettlement of the families displaced from the reservoir.

G. ASSESSMENT OF OUTCOME

27. The overall outcome of the project is satisfactory. Had the implementation period beenshorter, the outcome would have been rated highly satisfactory. The re-estimated net presentvalue of the project at a discount rate of 10% is RM57.8 million, and the economic rate of return(ERR) 13%, compared to the appraisal estimate of 14%. The lower ERR at completion is mainlydue to lower projected world prices for palm oil.

H. FUTURE OPERATION

28. The PMU has already prepared an O&M plan for project civil works (see Appendix 1,Attachment A). The Johor State DID is expected to take over the O&M of project works from thePMU (under the Federal Government) soon after completion in 1998. The Johor State DID is acompetent organization, and has good experience in O&M of similar works. At present, farmersare assisting the PMU by operating the gates on the secondary drains. All maintenance is doneunder small contracts with the village committees or contractors. Under the State DID, the systemis likely to continue. Based on the experience of O&M funding by the Federal Government and

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State DID for Phase I works, the estimated amount of RM13.5 million per annum required forO&M of Phase II works is within the financing capability of the Government. However.consideration should be given to increasing cost recovery from the farmers by raising drainagecharges, which have remained at RMI 5/ha/year since 1970, compared to the current maintenancecost of about RM37/ha/year. In addition, the cost of maintenance of farm roads is aboutRM40/ha/year.

29. The arrangements for maintaining and monitoring Bekok dam are good. These areexpected to continue under State DID after takeover. Sedimentation survey of the reservoir, whichhas not yet been carried out, is planned to be undertaken now and to be repeated every five years.The six-monthly monitoring of the widened and deepened rivers, stopped after the completion ofthe supervision consultancy, is planned to be done annually, or. if the regime is found stable,every three years. Monitoring of the impact of peat soils drainage is planned to continue untilproject completion.

30. For proper control of Bekok dam operation, the project should establish models for: (i) thecorrelation of the catchment rainfall with the reservoir inflow floods; and (ii) the water levels inthe rivers at the critical monitoring points for different floods passing down the dam and floodretarding embankment. Approval for appointment of consultants for the modelling mentionedabove is expected from the Government shortly. The modelling is necessary to anticipate thefloods at the Bekok dam and to inform the concerned persons if the rivers would flow at highlevels.

3511. The following indicators would be used by the PMU to regularly assess projectperformance and impact in the future: (a) the peak of the maximum flood received at Bekok damand the outflow peak for the same flood; (b) the area flooded for more than three dayscontinuously; (c) the quality of water in the Bekok dam; (d) the volume of water taken from theBekok river monthly for water supply; and (e) maintenance expenditure per ha/year for drainageworks and farm roads.

I. KEY LESSONS LEARNED

32. The main lessons learned from project implementation experience are the following:

(a) Action on land acquisition and detailed designs for civil works prior to projectcommencement helps expeditious project implementation, as was demonstrated bythe smooth and timely implementation of the Bekok dam construction and riverimprovement works under the project.

(b) In a rapidly industrializing economy like that of Malaysia, with growing laborshortages, attracting competent technical staff to the public sector will beincreasingly difficult, and, therefore, greater reliance should be placed on theprivate sector for the O&M of project works.

(c) To ensure long-term financial sustainability of O&M of project works, and topromote greater beneficiary participation in O&M, cost recovery from

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beneficiaries should be increased through inter alia appropriate adjustments indrainage charges.

(d) The de-emphasis on the establishment of new mini-estates (none was establishedunder the project, compared to the appraisal expectation of 30 mini-estates with anarea of 3,000 ha) was an appropriate response by RISDA to the many problemsfaced by existing mini-estates, and was consistent with the Government policy tophase out direct involvement of the public sector in agricultural productionactivities.

(e) Peat soils should not be drained by deep drains with large spacing; instead, shallowdrains with less spacing and with water level control should be used to keep thearea drained without lowering the groundwater level significantly.

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IMPLEMENTATION COMPLETION REPORT

MALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPENT PROJECT(Loan 2740-MA)

PART II: STATISTICAL TABLES

Table 1: Summary of AssessmentsTable 2: Related Bank LoansTable 3: Project TimetableTable 4: Loan Disbursements: Cumulative Estimated and ActualTable 5: Key Indicators for Project ImplementationTable 6: Key Indicators for Project OperationTable 7: Studies Included in ProjectTable 8A: Project CostsTable 88: Project FinancingTable 9: Economic Costs and BenefitsTable 10: Status of Legal CovenantsTable 11: Compliance with Operational Manual StatementsTable 12: Bank Resources: Staff InputsTable 13: Bank Resources: Missions

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TABLE 1: SUMMARY OF ASSESSMENTS

A. Achievement of Obiectives Substantal Nogltaibpicable(V) (1) (1) )

Macro Policies O 0 0 E3

Sector Policies 0 E 0 0

Financial Objectives O 0 0 0

Institutional Development 0 0 0 0

lIhysical Objectives 0 0 0 0

Poverty Reduction 0 El 0 0

Gender Issues 0 0 0 E3

Other Social Objectives 0 03 0 0

Environmental Objectives 0 0 0 0

Public Sector Management 0 0 0 0D

Private Sector Development 0 0 0 0

Other (specify) 0 0 OB 0

B. Proiect Sustainability Likelv Unlikely Uncertain(v') (i) (1)

0 0 0

C. Bank Performance satsfactory Satisfacr Deficeint

Identification 0 0 0

Preparation Assistance 0 0 0

Appraisal 03 0 0

Supervision 0 0 0

D. Borrower Performance satisfactory Satisfactor Defiient(1) (/) (1)

Preparation 0 0 0

Implementation 0 0 0

Covenant Compliance 0 0 0

Operation (if applicable) 0 0

Highly ffimbhiE. Assessment ol'Outcome satistactorv Satisfactorv Un.satisactQoly unsatisfactory

(Vi )) (V/) (V)

0 0 0 0

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TABLE 2: RELATED BANK LOANS

Year ofLoan Title Purpose Approval Status

Preceding oVerations

973-MA, West Johor Agricultural Protection of agricultural lands from 1973 Completed 1984Development Project flooding

1899-MA, Kelantal Lald Schemes New planting and replanting of 1980 CompletedRehabilitationi Project smailholder rubber, construction of

access and farm roads, and coconutintercropping with cocoa and coffee

2147-MA. Malacca Agricultural Construction and improvement of 1982 CompletedDevelopment Project irrigation and drainage works, and

development of smal holder rubberareas

Following operations

3139-MA, RISDA I Replanting of low-yielding rubber 1989 Completed3699-MA, RISDA 11 Replanting of low-yielding rubber 1994 On-goilig

TABLE 3: PROJECT TIMETABLE

Steps in Project Cycle Date Planned Date Actual/Latest Estimate

Identification 1973 1973Preparation Oct. 1983* Nov. 1984Appraisal Nov. 1983* Apr and Nov 1985Negotiations Jul. 1984* March 18, 1986Board presentationi Aug. 1984* Jul. 15, 1986Signing Aug. 1984- Jul. 30, 1986Effectiveness Oct.. 1984- Sep. 16, 1986Project completion Dec. 12, 1993+ Dec. 31, 1998Loan Closing Dec. 31, 1994+ Jun. 30, 1996

* As per monitoring table of 1982.- As expected from monitoring table, after Board presentation.+ As per SAR of June 1986.

TABLE 4: LOAN DISBURSEMENTS: CUMULATIVE ESTIMATED AND ACTUAL

(US$ Million)

FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97

Appraisal estimate 1.30 6.00 14.40 24.40 33.10 40.20 46.90 52.60 55.0042.90 46.98 49.38 49.31 49.31

Actual 0.02 2.25 4.80 9.30 13.37 22.99 30.37 38.11 42.83 47.83 49.31

Actual as % of estimate 1.5 37.5 33.3 38.1 40.4 57.2 70.8 81.1 86.7 97.4 100.0

Date of final disbursement September 6, 1996

The lower figure in the appraisal estimate represents the change due to cancellations of US$4.00 million on Jan. 5, 1993, US$1.62 millionon Sep.22, 1994, and US$0.067 million on Jan. 10, 1996.

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TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION

Estimated Actual QuantityDescription Quantity Unit At Loan At Project

(SAR) Closing Completion

(a) Works:Bekok dam 3.9 (main darn) km 3.46 3.46

1.9 (saddle dams) km 1.9 1.90River diversion channel to dam 6.5 km 6.4 6.40Flood retardation embankment/sluice n.g. km 1.12 1.12Simpang/Bekok catchment sep. bund 12 km 5.95 5.95River section improvement 79 km 107.00 107.00River re-alignment 14 km 11.20 11.20New levees in tidal reach 55 km 11.00 19.00Replacement of bridges 8 no. 9 replaced 9 replaced

2 strengthened 2 strengthenedFlood protection Parit Sulong town job n.r. n.r.Main drains improvement 215 km 64 203Secondary drains construction 85 km 628 804New roads and maintenance tracks 462 km 135 592Resurfacing existing roads 920 km 100 559

(b) Land acquisition 3,100 ha 2,512 2,781

(c) Resettlement of families 74 no. 74 74

(d) Agriculture development: /1Replacing l.y. rubber with oil palm 10.000 ha 9,200 9,200Developing mini estates in above 3,000 ha 0 0Replacing l.y. rubber with h.y. rubber 3,000 ha 2,800 2,800Replacing l.y. rubber by div. crops 1,500 ha 2,300 2,300

(e) Procurement of equipment and vehicles job job job

(f) Consultancy services78 Exp.mm 93.5 93.5432 Local mm 1700.5 1700.5

(g) Buildings:Project office I no. * *

Farmers' development center n.i. no. 1Lab. for acid sulfate soils I no. ©

].y. = low yield; h.y. = high yieldn.r. = not required n.g. = not given n.i. not included* = constructed before project started, under separate funding(3 = constructed by DOA under other funding/1 The actual figures for replanting are upto 1996. However, replantings since 1994 have been

funded under the Second RISDA project (Loan 3699-MA). The total replanting through 1993was about 11.000 ha.

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TABLE 6: KEY INDICATORS FOR PROJECT OPERATION

No specific indicators for project operation and maintenianice (O&M) were set at appraisal. However, DIDwas to remain responsible for (i) O&M and safety monitoring of the darn and other embankments, (ii) maintainiingthe carrying capacity of the rivers and notifying civic authorities the likely water levels in the rivers for differentoutflow from the dam, (iii) O&M of drainage chaninels (except tertiary drains constructed and maintainied by thefarimers) including control of ground water in peat areas, and (iv) maintaining the farn roads and drainagemailitenanice tracks. Johore State DID was to take over the responsibility, sooI1 after the completion of the works.TIhe State Department of Agriculture was to provide extension service in the entire improved area.

The works being in the finial stages of completion, the responsibility for O&M of works still rests with theproject. The State DID will take over sooIn after completion of all the works. So far the O&M is satisfactory. Adetailed program for operation, maintenance, and periodic inspectioni/surveys of the dams and embankments andrivers, including mathiematical models interrelating catchment rainfall witli runoff at the dam, and river levels fordifferent flood discharges, is under preparation. The State Department of Agriculture and RISDA are providingextensioii service in the project area.

TABLE 7: STUDIES INCLUDED IN PROJECT

Purpose as defined at appraisal Status Impact of study

Peat Soils Beliavior

The study was not identified at appraisal. Study completed. The lowering of water table in peatIt became necessary to analyze the peat soils Data collection soils has to be carefully controlled tosettlemenit observed with drainage, and to enable will continue till avoid settlement and oxidation.government to formulate a policy for management project completion Study will be used in formulation ofof these soils. government policy.

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TABLE 8A: PROJECT COSTS

Appraisal estimate ActualIteinl (US$M) (US$M) 1/

Local Foreign Local ForeignCosts Costs Total Costs Costs Total

Executive Agency DID

Civil works 33.10 45.15 78.25 26.12 32.43 58.55Bekok dam 8.45 12.49 20.94 3.18 4.70 7.88Catci. Sep. Bund and Flood Retard. Emb. 0.96 1.37 2.33 1.34 1.91 3.25Rivers Improvement 12.40 19.76 32.16 7.09 11.31 18.40Bridges 0.57 0.57 1.14 7.55 7.54 15.09Town flood protection 0.53 0.66 1.19 - - -Drains and roads 10.19 10.30 20.49 6.96 6.97 13.93

Buildings 0.88 0.38 1.26 0.47 0.20 0.67

Land acquisition 34.06 0.0 34.06 20.93 0.00 20.93Mainteniance during construction - - - 1.16 - 1.16

Equipment and velhicles 0.01 0.49 0.50 0.01 0.53 0.54Consultanit services 0.63 1.52 2.15 1.41 3.39 4.80Administration and Establishment 7.25 0.0 7.25 5.40 0.00 5.40Training - - - 0.03 0.36 0.39

Executive Agency RISDAAgricultural development 17.37 7.46 24.83 10.57 4.54 15.11

Total Project Costs 93.30 55.00 148.30 66.10 41.45 107.55

1/ Actual Costs are up to June 30, 1996.

Upto completion of project in 1998, additional costs are estimated as:US$M

Drains and roads 12.60Land Acquisition 2.80Administration 4.47Maintenance during construction _228

Total 22.15

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TABLE 8B: PROJECT FINANCING

Appraisal estimate Actual/Latest estimate (US$M)(US$M)

Local Foreign Local ForeignSource Costs Costs Total Costs Costs Total

IBRD 0.0 55.0 55.0 7.86 41.45 49.31GOM 93.3 0.0 93.3 58.24 0.0 58.24

Total 93.3 55.0 148.3 66.10 41.45 107.55

GOM will have to incur an additional expenditure of about US$22 million till completion ofthe project.

TABLE 9: ECONOMIC COSTS AND BENEFITS

Economic Rate of Return Estimated at Appraisal 14%Economic Rate of Return Estimated at Completion 13%Net Present Value Estimated at Completion at a

Discount Rate of 10% RM 57.8 million

(Details of economic analysis are at Appendix 3)

TABLE 10: STATUS OF LEGAL COVENANTS

Agreement Loan/Credit Text Covenant Status Original Revised Description of Covenant CommentsNumber Reference Classes(es) Fulfill Fulfill

Date Date

LOAN L27400 Sclhedule 5 (1) 10 C Government would acquire or Land acquisition has notmake available land and interest in been a significant problem.respect of land for projectpurposes.

Schedule 5 (2) 7 C Government would compensate Compensation given. Twodisplaced people in accordance hard core poor resettledwith prevailing regulations families are receiving

assistance under the PovertyEradication Program

Schedule5 (3) 9 C 12/31/86 By December 1986, the Panel of experts wasGovernment to appoint a panel of appointed and was effective.experts to review dam constructionquality, design revisions, andsafety programs

Schedule 5 (3) 10 C 12/31/86 By December 1986, the Consultants were employedGovernment to employ consultants and performed satisfactorily.to assist in supervision ofconstruction of Bekok Dam.

Status. C = Comnplied with Covenant ClassCD = Compliance after delayNC = Not complied with I. Accounts/AuditSOON = Compliance xpected in reasonably short time 2. Financial performance/generate revenue fromii beneficiariesCP = Complied with partially 3. Flow and utilization of Project fundsNYD = Not yet due 4. Counterpart funding

5. Management aspects of the Project or of its executing agency6. Environenit covenants7. Involuntary resettlement8. Indigenous people9. Monitoring. review and reporting10. Implementation11. Sectoral or cross-sectoral budgetary or other resource allocation12. Sectoral or cross-sectoral regulatory/institutional action13. Other

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TABLE 11: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS

No significanit lack of compliance with applicable Bank manual statements.

TABLE 12: BANK RESOURCES: STAFF INPUTS

Planned Revised Actual

Stage of project cycle Weeks US$ Weeks US$ Weeks US$

l Trough appraisal 54.8 139.9

Appraisal - Board 1.9 3.6

Supervisioni 82.4 248.7

Completion 1.3 3.8

TOTAL 140.4 396.0

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TABLE 13: BANK RESOURCES: MISSIONS

Number Days Performance RatingStatus of Project Month/ of in Field Specialized Implementation Development Type of Problems

Cycle Year Persons Skills Represented Status Status

Preparation 4/81 3 1/ Ec, En, AgPreparation 2/82 4 1/ E, En Lp, HY

Preparation 9/82 3 ' En, Lp, F

P'reparation 2, 3/83 1 Er,

Preparation 10, 11/83 1 J EnIPre-appraisal 11/84 3 27 E, En, S,Appraisal 3/85 4 18 E, En, Ag,Post-appraisal 9/85 1 5 EnIPost-appraisal 11/85 6 19 En E, A,, Fo, Lp, In

Supervision 10/86 3 5 E, E_1, I I AgSupervision 7/87 2 14 Ag E, I I DDeSupervision 11, 12/87 1 17 En 2 1 Ad, IF, DDeSupervision 4/89 3 7 2E, Ag 2 1 IF, DDe, DReSupervision 2-3/90 2 23 2En 2 1 DPr. DRe. IR, DDeSupervision 6/90 1 1 En 2 1 DPr. DDeSupervision 10/90 1 17 En 2 I DDeSupervision 9.10/91 2 11 En 'E, 2 I DDe, DPrSupervision 5.6/92 2 8 En, E,. 2 I DDe, IFSupervision 2/93 1 If En 2 1 DDe, IFSuipervision 9/93 1 13 En 1 I DDeSupervision 4/94 1 7 En I I DDe, DPrSupervision 11/94 2 6 En E, S S DDeSupervision 6.7/95 2 7 En.E, S S IRSupervision 5/96 2 5 En, E, S S IRICR 10/96 2 16 E, E, S S NA

Notation for Skills: E,= Economist, E.= Engineer, A. = Agronomist, Lp= Land Use Planner, Hy= Hydrologist,S,= Statistical Data Specialist, R. = Road Specialist, In= Industry Specialist, F. = Forestry Specialist.E= Estaurine Specialist

Notation for Problems: IF = Insufficient Funds, DDe = Delay in Design, DRe = Delay in Resettlement,Ad = Administrative Problems, Ag = Agricultural Constraints, DPr = Delay in Procurement,IR = Insufficient Construction Resources

rhe preparation work was carried out during missions for other tasks, each mission lasting for about three weeks,

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Appendix 1Page 1

MALAYSIASECOND WESTERN JOHOR ADP (LOAN 2740-MA)

WORLD BANK IMPLEMENTATION COMPLETION REPORT (ICR) MISSIONOCTOBER/NOVEMBER 1996

Aide-Memoire

1. A World Bank mission comprising Messrs S. Husain and J. Srivastava visited Malaysiafrom October 28, 1996 to November 9, 1996, to solicit the views of the Borrower and theimplementing agencies in respect of the implementation of the project, and to collect data for thepreparation of the ICR. The mission met Ir. Neo Tong Lee, Director General, and Ir. Dr. HiewKim Loi, Director of Drainage, Drainage and Irrigation Department (DID), and, during the visitto the project site from October 28 to November 2, 1996, met Mr. Mohamad Noh Samik,Director, West Johor Project, and other project and Rubber Industry Smallholders DevelopmentAuthority (RISDA) officials in Batu Pahat. The mission also met Mr. C. C. Chan, Director, JohorState DID, and Mr. Nik Mustapha, Deputy Director, RISDA Johor State Office. The missionvisited a few blocks in the project area where the drains and farm roads have been completed,and others where the works are in progress. The mission also had discussions on project impactwith groups of farmers and the head of the group of resettlers from the Bekok reservoir area.This Aide-memoire, discussed in the wrap-up meeting on November 8, 1996, chaired by Mr.Mohamad Noh Samik, Director, West Johor Project, and attended by Messrs. Abidin Arshad,Ministry of Agriculture; Nik Mustafa, RISDA, Johor State Office; Abu Talib Abu Bakar andZulkifli Ahmad, DID; and Lee Loke Chong and Zahari bin Shahid, West Johor Project,summarizes the mission's findings and agreements reached, and is subject to the confirmation ofthe Bank's senior management. The mission thanks the Project Management Unit (PMU), DIDand RISDA officials for the assistance rendered and the courtesies extended to the mission.

2. The Loan Agreement for US$55.0 million for the project was signed between theGovernment of Malaysia and the World Bank on July 30, 1986, and became effective onSeptember 16, 1986. The original closing date of the Loan was December 31, 1994. However,due to inadequate counterpart funding in the initial project years and delays in completion ofdesigns, project implementation was delayed, and the Loan closing date was extended (initiallyby one year and again by six months) to June 30, 1996, when the Loan was closed. Aftercancellations of US$4.0 million on January 25, 1993, US$1.62 million on September 22, 1994and US$0.067 million on January 10, 1996, the remaining Loan amount of US$49.3 million wasfully disbursed, with the last disbursement on September 6, 1996.

3. Discussions on preparation of the ICR for the project started in June/July 1995, and in itsAide-Memoire dated July 1, 1995, a Bank supervision mission provided guidance to the PMUfor the ICR preparation. It had been agreed then that the PMU, in collaboration with RISDA,will collect as much data as possible to quantitatively assess the agricultural and other socio-economic impact of the project, and, to assist the PMU in this effort, consultants will be hired.

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Appendix 1Page 2

Action on ICR preparation was postponed since the Loan closing date was extended to June 30,1996. Another Bank supervision mission in May 1996 stressed the need to initiate the ICRpreparation process, and provided further details in its Aide-Memoire dated May 25, 1996.However, since timely authorization for the appointment of consultants could not be obtainedfrom the Government, the PMU could not prepare and submit the draft ICR to the Bank by theagreed target date of September 30, 1996. The PMU has recently conducted a survey of 3,000farmer beneficiaries in five of the 15 blocks where drainage and road works have either beencompleted or are in progress. Based on the preliminary results of the survey, and the Bankmission's findings during visits to the project area and discussions with various stakeholders, afew observations and statements, which also reflect the views of the various stakeholders, onproject implementation and impact, and on arrangements for future operation and maintenance(O&M) are made in the following paragraphs.

4. Project Implementation. Although project implementation was delayed, the major civilworks (Bekok dam, Simpang Kiri flood retarding embankment, catchment separator bund,improvement of rivers, and reconstruction/strengthening of the bridges on these rivers) had beencompleted by the Loan closing date of June 30, 1996. Works on drains and farm roads had beenpartially completed, and were estimated to be already benefitting about 50% of the potential85,000 ha of the agricultural area. The delay in completion of drainage and farm road works wasdue not only to insufficient funding in the early years but also to a longer than anticipated timetaken in completion of designs and award of contracts. The balance of work on the drains andfarm roads, for which contracts are on-going, will be completed by the end of 1998. Thecompleted project works have been properly maintained and monitored, and will continue to bemaintained using project funds until the State DID takes over the O&M. The necessary processfor handing over the completed works to the State DID, and decision on the sharing of the O&Mcosts between the Federal Government and State DID are expected to be completed soon. Theland acquisition and resettlement of the displaced persons has been satisfactory. The remainingpayment for the acquired land and the issuance of land titles to the resettlers needs to beexpedited. As regards the agricultural component of the project, the replanting of about 14,300ha of old rubber, primarily by oil palm, under grants by RISDA from 1987 to 1996, was almostthe same as expected at appraisal (14,500 ha).

5. Investment Costs. It is worth noting that the cost of the Bekok dam is only about 40 percent, and that of the river works about 75 per cent, of the original estimates, resulting mainlyfrom good competition both under international competitive bidding (ICB) and nationalcompetitive bidding (NCB) for these works, and partly reflecting a possible over-estimation atappraisal. The cost of bridges has increased 16 times. The original provision for the bridges wasevidently based on insufficient study, and, moreover, the width of the bridges is now greater thanoriginally planned to accomodate anticipated increased traffic in future. Consultancies cost 2.5times the original estimate, mainly due to a substantial increase in design and constructionsupervision work. The cost of drains and farm roads, when completed, would be about 50 %

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Appendix 1Page 3

higher than the original estimates, due to higher density of the drains and roads in the finaldesigns.

6. Project Impact. As the drainage and farm road works are still in progress, and detailedsurveys on project impact so far have not been carried out (except for the rapid survey conductedby the PMU in October 1996), a precise quantitative assessment of project benefits can not bemade at this stage. However, based on the mission's discussions with the stakeholders andobservations of increased economic activities in the areas which have already benefited fromproject facilities, the overall outcome of the project is satisfactory. The project objectives laiddown at appraisal have been mostly achieved: (a) of the 85,000 ha agricultural area expected atappraisal to eventually benefit from the project flood control and drainage works, approximatelyhalf is estimated to be benefiting already by the second half of 1996, which includes areasreplanted under RISDA grants, previously abandoned areas brought under cultivation, areasheavily damaged in the past due to frequent floods now enjoying sustained production, and areasenjoying increases in yields due to better drainage; (b) all the above areas are benefiting fromconstruction of farm roads, which inter alia have substantially reduced transport cost of produceand inputs, and increased labor mobility to nearby towns, thus helping rapid industrialisation inJohor State; (c) the construction and strengthening of bridges has led to an increase in the volumeof traffic and savings in transport costs; (d) increased pumping from the Bekok river hasimproved water supply to nearby towns; and (e) flood damage to property in the project area andevacuation of affected people to the relief centers has been virtually eliminated. Some of theabove benefits will be quantified in the ICR for the estimation of the economic rate of return forthe project.

7. Future Operation and Maintenance (O&M). The PMU has prepared an O&M plan forthe civil works under the project, identifying the items of work required to be carried out foroperation, monitoring of safety and performance, and maintenance; the staff required for theseitems of work; and the funds needed for proper O&M (Attachment A). About RM 5 million willbe required annually for the staff and other administrative costs, and RM 8.5 million for actualmaintenance. The Johor State DID is expected to take over the O&M of project works soon aftercompletion in 1998 (para. 4). Based on the experience of O&M funding by the FederalGovernment and State DID for Phase I works, the estimated amount of RM 13.5 million perannum required for O&M of Phase II works is considered to be within the financing capability ofthe Government. However, consideration should be given to increasing cost recovery from thefarmers by raising the drainage charges, which have remained at RM 6/acre/year since 1970,compared to the current maintenance cost of about RM 15/acre/year.

8. For proper control of Bekok dam operation, the project should establish models for: (i)the correlation of the catchment rainfall with the reservoir inflow floods; and (ii) the water levelsin the rivers at the critical monitoring points for different floods passing down the dam and floodretarding basin. Approval for appointment of consultants for the above modelling is expected

- 26 -

Appendix 1Page 4

from the Government shortly. The modelling is necessary to anticipate the floods at the Bekokdam and to inform the concerned persons if the rivers would flow at high levels.

9. It was agreed that the following indicators would be used by the project staff to regularlyassess project performance and impact in the future: (a) the peak of the maximum flood receivedat the Bekok dam and the outflow peak for the same flood; (b) the area flooded for more thanthree days continuously; (c) the quality of water in the Bekok dam; (d) the volume of water takenfrom the Bekok river monthly for water supply; and (e) maintenance expenditure/ha/year fordrainage and farm road works.

10. Lessons Learned. The main lessons learned from project implementation experience arethe following:

(a) Action on land acquisition and detailed designs for civil works prior to projectcommencement helps expeditious project implementation, as was demonstrated by the smoothand timely implementation of the Bekok dam construction and river improvement works underthe project.

(b) Familiarity of the PMU with the Bank's procurement guidelines greatly facilitatedproject implementation, and good competition under both ICB and NCB was mainly responsiblefor the lower costs of Bekok dam and river works (60 and 25 per cent lower, respectively,compared to appraisal estimates).

(c) In a rapidly industrializing economy like that of Malaysia, with growing laborshortages, attracting competent technical staff to the public sector will be increasingly difficult,and, therefore, greater reliance should be placed on the private sector for the O&M of projectworks.

(d) To ensure long-term financial sustainability of O&M of project works, and to promotegreater beneficiary participation in O&M, cost recovery from beneficiaries should be increasedthrough inter alia appropriate adjustments in drainage charges.

(e) The de-emphasis on the establishment of new mini-estates (none was establishedunder the project, compared to the appraisal expectation of 30 mini-estates with an area of 3,000ha) was an appropriate response by RISDA to the many problems faced by existing mini-estates,and was consistent with the Government policy to phase out direct involvement of the publicsector in agricultural production activities.

(f) Peat soils should not be drained by deep drains with large spacing; instead, shallowdrains with less spacing and with water level control should be used to keep the area drainedwithout lowering the groundwater level significantly.

- 27 -

Appendix 1Page 5

11. It was agreed that the Government's contribution to the project ICR will be formallymade available to the Bank by November 30, 1996, so that it could still be included in the finalICR to be submitted to the Bank's Board of Directors by December 31, 1996.

Kuala Lumpur Syed Z. HusainNovember 9, 1996 The World Bank

Distribution

1 . Dato' Ahmad Zabri Ibrahim, Secretary General, Ministry of Agriculture (MOA)2. Ir. Neo Tong Lee, Director General, DID3. Mr. Shahabudin bin Shafie, Director General, RISDA4. Mr. Ahmad Rosli Johari, Secretary, Strategic and Macro Planning Division, MOA5. Mr. Cheah Kong Lee, Principal Assistant Secretary, Finance Division, The Treasury6. Ms. Nafsia Abu Bakar, Principal Assistant Director, Agriculture Section, EPU7. Mr. Mohamad Noh Samik, Director, Western Johor ADP8. Mr. Nik Mustafa, Deputy Director, RISDA Johor State Office9. Mr. Abidin Arshad, Resource and Institutional Development Division, MOA

- 28 - Attachment A

MALAYSIASECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT

DETAILED OPERATION AND MAINTENANCE PLAN

1. INTRODUCTION. The major engineering infrastructure constructed under theproject comprises the following:-

a. Flood Mitigation and River Improvement Worksi) Construction of Bekok Damii) Widening and deepening of 4 major rivers (1 18 km)iii) Construction of Catchment Separator Bund (5.59 km)iv) Construction of Flood Retarding Embankment (l.12 km)

b. Drainage Works and Farm Roadsi) Construction of main drains (203 km) and secondary drains (804 km)ii) Construction and improvement of farm roads (1151 km)iii) Construction of drainage control structures, culverts and tidal control

gates (196)iv) Construction of 9 main road bridges and 153 medium traffic bridges

2. OPERATION AND MAINTENANCE (O&M). The main objective of the SecondWestern Johor Agricultural Development Project was to provide integrated infrastructuraldevelopment as well as agricultural development with a view to improving agriculturalproductivity and socio-economic status of the farmers. In order to achieve this objective, allthe major infrastructures listed above and expected to be completed by 1998, need to beoperated and maintained at specific intervals. In particular, the Bekok Dam, the major riversystems, drains, farm roads and structures need proper maintenance in order to function. Thedetailed operation and maintenance plan as shown at Attachment A-1 and A-2 was preparedbased on the following norms and criteria:

a. Drain vegetation clearing by farmers' group 4 times a year;b. Desilting of drains and rivers every 3 years;c. Desilting of river by dredging every 5 years;d. River and drain reserve vegetation clearing twice a year;e. Resurfacing of farm roads every 3 years; andf. Filling and compaction of pot-holes periodically.

3. MANPOWER REQUIREMENT. The proposed organisational set-up to undertakefully the operation, monitoring and maintenance works after the completion of all civil worksin 1998 is shown in Attachment A-3. A total of 231 posts will be required (Attachment A-4)headed by a Senior Engineer J2. The organisational set-up will comprise four departments asfollows:

a. Administration and Financeb. Operation and Maintenance of Drains and Roadsc. O & M of Dam and Riversd. Technical Support

- 29 -

Each of the four departments will be headed by a Senior Officer. The Operation andMaintenance department for drains and roads will be headed by 2 engineers and 4 technicalassistants, the 0 & M department for dam and rivers will be headed by 1 Senior Engineer,and the Technical Support department will be headed by a Senior Technical Assistant. Ingeneral, the number of technicians required to carry out operation and maintenance work wasbased on similar norms established in Phase I area, i.e. 8,000 - 9,000 ha per technician, andeach engineer being responsible for supervision of all maintenance, operation and monitoringworks within a drainage area of 80,000 ha.

4. OPERATION AND MAINTENANCE COST. The annual recurrent cost foroperation and maintenance can be divided into supervision cost and maintenance ofinfrastructure which varies depending on the level or standard of maintenance required.Based on the norms established earlier, the annual 0 & M cost for the Second Western JohorAgricultural Development Project area is estimated as follows:-

Supervision Cost : RM 3,800,000Operating Cost RM 1,200,000Drains/Structure Maintenance : RM 5,000,000Farm Road Maintenance . RM 3.500.000

RM 13.500.000

SECONI) WESTERN JOJ101R AG RICUTIURAL I)EVELOPMENT PROJEC'TOPERATION AND) MONITORING PLAN

OPERATION MONITORING ESTIMATEDCIVIL WORKS SUPERVISION OPERATINGCOMPONENT DESCRIPTION OF WORKS METHOD/COST DESCRIPTION OF WORK METHOD/ COST COST (RM)

I DAM: I) Operate outiflow gates (2 Nos) 3 Techinician and I) Measure seepage flow (26 3 Techinician and 12 1 Engineer and 1,200,000.00- Bekok & and Comiipensation Water 12 Labourers Nos)and piezometers (29 Nos) Labourers I TechinicalSe imbrong Outlet (CWO) gates readi ng. Assistant

2) Recording Rainfall and 2) Inspect dam embankment (5.4Reservoir Level, Inflow & kin) or cracks/decfcts and toeOutiflov and anialysis areas for scepage.

3) Safety inispection of dam and Yearly in-house and 5spillway and analysis of data yearly by Dam

Monitoring Unit4) Ilydrographmic survey of Licensed Surveyor

reservoir

2. River S-stem o- Sg. Kiri River I) Record water levels daily/ 3 Technicians I) Measure discharge(5 stationi) 3 Technicians and I Senior- Sg. Kanan wveeklv (25 Nos) and 8 Labourers and wvater lcvels (16 stationi) 8 Labourers TechinicalRivcr 2) Inspect and clieck Telemetric at regular intervals Assistant- Scibronig River Stations (12 Nos). 2) Verify rating curves- Bekok River 3) Supply Information for Flood 3) Carry ont Monitorinig Survey Licensed Surveyor

Warning System (every 3 years)4) Operate Tidal Control Gates

daily to prevent floodingupstreamii (4 Nos)

3 DRAINS:- Secondary (215 I) Operate Drainage Controls Farmers to I ) Measure ground water table 3 Tecinicians and 8 2 Engineers andkim) (DC) (1'96 Nos) operate tinder and subsidenice (Peat Area) L-abourers 5 Senior- Tertiary (850 giiidaiice of (55 Nos) Technicianskimi) Techniicianis 2) Mcasure ground(l wvaler table

and hydraulic conduictivrity (47Nos)

3) Recording water levels indrain (21 Nos)

SECONI) WESTIERN .1011OR AGRICUIJLtURAL DEVELOPME.NT PROJIECTIMAINTENANCE PLAN

ANNUAL/PERIODIC MAINTENANCE UNIT COST x ESTIMATED SUPERVISIONCIVIL WORKS COMPONENT _ _ FREQUENCY/YEAR MAINTENANCE COST (RM)

DESCRIPTION OF WORK MET'HOD COST (RM)

DAM:

- Bekok I) Painting of Gates, Metal Railings and Control Rooml Quotation RM 80000/yr x 0.5 RM 400,000.00 3.800,000.00- Sembrouig 2) Grass cutinig on slopes, berms & eimibainkmienil (105 hi) Quotation RM 200/ha x 4

3 ) Remioval ol' Walcr tI Yci ithi & dlec)bris l'oin Resei c oi Quoltalion,4) Maintenance of slopes, beruis. drain and roads.

2 RI VERS:

- Spg. Kiri River 1) River Dredging (150.000n3 ) Tender & RM 5. 0/i 3 x 0.2 RM 1,300,000.00- Spg. KIaniani River 2) River Rakinig (118 kmi) Quotation RM 6,000/kin x I- Bekok River 3) River Excavation/Desilting (80 kin) RM 10,000 x 0(.3- Sembrong River 4) Clearing of bcriii vegetation (I 18 kin) RM 300/kin x I

3 DRAINS:

- Secondary 1) Drain vegetation clearing by JKKK (Farmier's Group) Quiotation RM 350.00/kin x 4 RM 3,100,000.00- Tertiary 2) Drain excavation or Desilting (1007 kin) RM 4000/km x 0.3- Stnictuires (196 Nos) 3) Drain Rerserve clearing (1009 kiii) RM 400/kin x I

4) Painting gates and repairs (349 Nos)

4. FARMROADS I) Filling of pot holes periodically (I 150 kin) Tender & RM 1,500.00 x I RM 3,500,000.002) Resurfacing of Farm Roads (I 150 kmi) Quoatation RM 6,500.00 x 0.3

5. BUILDING I) Periodic maintenance for 7 Nos FDC Quotation RM 150,000.00 x I RM 200,000.002) Provide services for garbage disposal and uipkeep of RM 50,000.00 x I

office and FDC ___

RN1 8,500,000.00

WFSTFRN_JOHOR INTEGRATFD AGRICULTURAL DEVELOPMENT PROJFCTORGANISATION CHART FOR OPFRATION AND MAINTENANCF WORKS LACTUALLY NEEDFD)

SENIOR fNGINEER J2…--------------------------------------------------------- SENIOR ENGINEER J2

OPFRATION I ADMINISTRATION & OPERATION I RIVER ENGINEERING & HYDROLOGY &UAINTENANCE FINANCE MAINTfNANCE DAM MONITORING TELEMETRIC SYSTEM

| ENGINEER J 3 l l | ENGINEER J3 | | ENGINEER J3

CLERK N1 | 7 TECH. ASSISTANT J4

NORTHEN ZONE TECHNICAL SUILDING & SOUTHERN RIVER ENGINEERING/ DAM &SERVICES/DRAUGHTING VEHICLES ZONE WATER MANAGEMENT FLOOD MONITORING

I TFCHASSISTANT J5 I TECHASSISTANT J4 5 CLERK N9 1TECHNICIAN J6 1TECH.ASSISTANT J5 1 TECHNICIAN JR 1 TECHASSISTANT J4 EXISTING2 TFCHNICIAN J6 2 TECHNICIAN J1 3 TYPIST Nil 4 TECHNICIAN J7 2 TECHNICIAN J6 2 TECHNICIAN J7 3 TECHNICIAN J7 POST11 TECHNICIAN J7 2 DRAUGHTMAN J7 2 OFFICE BOY NH3 I DRIVER RIO 9 TECHNICIAN J7 I DRIVER RIO I DRIVER RIO6 DRIVER RID 2 DRIVER RIO 1 DRIVER RIO 44 1MG Rul 5 DRIVER RIO 8 IMG Rll 121MG Rul49 IMG Rll 4 IMG Rl 411 IMG Rul

- 33 -

ATTACHMENT A - 4

SECOND WESTERN JOHORE AGRICULTURAL DEVELOPMLENT PROJECT

LIST OF POSTS REQUIRED FOR MAINTENANCE WORKS

POST NUMBERS REQUIRED

1. Senior Engineer 2

2. Engineer J3 3

3. Engineer J3 (Mechanical) 0

4. Senior Technical Assistant J4 2

5. Technical Assistant 2

6. Senior Technician J6 6

7. Technician J7 28

8. Clerk N7 (Finance) I

9. Clerk N7 (Service) 0

10. Clerk N9 4

11. Store Keeper N9 I

12. Draughtsrnan J7 2

13. Typist NII 3

14. Telephone Operator N 1I 0

15. Office Boy N13 2

16. Foreman R6 0

17. Driver R9 4

18. Driver RIO 17

19. Security Guard RI 1 30

20. Labourer (IMG)R 1 124

Total 231

- 35 -

Appendix 2

BORROWER'S ICR

Appendix 2

- 36 - Page I-of 8

SECOND WESTERN JOHORE AGRICULTURAL DEVELOPMENT PROJECTIMPLEMENTATION COMPLETION REPORT

Achievement of Objectives

Achievement of physical objectives comprising the civil works component, agriculturalcomponent and project implementation facilities component were satisfactory altlhoughimplernentation of civil works component was delayed during the initial start-up phaseof the project due to administrative and other reasons. All major civil works such as thieBekok Dam, River Channel Improvement. Flood Retarding Emba2nkment, Catchment

Separator Bund and 9 Nos Main Road Bridges with a total contract value of MR 143.2million have been completed except the 19 contract packages for drainage works. andfarm roads which is about 40% completed up to end of Jun 1996. It is anticipated thatall outstanding civil works will be completed by end 1998.

The delay in implementation of drainage works and farm roads is mainly due to the factthat the detailed design of these infrastructure which was carried out by DID engineersin-house has taken much longer time than anticipated due to shortage of engineers.

The delay is further compounded by the poor performance of some contractors as wellas other factors such as shortage of construction material and labour.

2. Implementation Record And Major Factors Affecting The Proiect

Under the Agricultural Drainage Works component, 18 packages were awarded.Cortstruction of these drainage works began since the year 1991 and are expected tobe completed by the year 1998,

Some of the mnaior factor affecting the implementation of the projects were as follows:

i) As the tme taken to process the acquired land were very long (six months to.three years) some of the land could not be In possession and this resulted insome deray of the project Implementation and even in some cases were shelvedoff.

ii) It was found that most of the initial planning and design undertaken by theconsultant had to be changed before awarding the contract A totally newplanning and design unit had to be formed in-house to study back the initialproposals by the consultants: in which most of the recommenaed planning anddesign had to be modified to suit the present site conditions. This Is due to itsincompleteness and were no longer practicable due to the changes anddevelopment that had taken place throughout the project area since Its initialtime of study.

iii) During the in-house planning and design stage, only skeletal and inexperiencedtechnical staff were employed hence delaying the Implementation of theaqricijltural drainaQe comoonents. -

Appendix 237 - Page 2of8

iv) During the period of construction, there were many Mega-project launched bythe Government such as the Putra Jaya New Township. construction of the newKuala Lumpur International Airport at Sepang, upgrading of Karak Highwayconnecting Kuala Lumpur to Pahagn and constructionof the Second Link tOSingapore. This had resulted in the shortages of manpower, earthworksmachinery and building materials specifically Portland cement. Hence aslowdown in the performance of some of the contractors.

v) The labour shoitage were further aggravated by a change in the.governmeiflpolicy to impose stricter rulings in acquiring foreign workers. For example, theimposition of higher levy.

vi) As the construction of farm roads forms a major part in the completion of mostof the packages, frequent rainfalls had hampered its construction hencedelaying the project.

3. Bank Performance

The loan 'agreement between the Government of Malaysia and The World Bank wassigned'on 30th. July, 1986. The initial loan amount was fifty-five million dollars(US' S 55,000,000) and this was subsequently revised to US $ 49.31 million. Theclosing date of the loan, originally scheduled on 31 December 1994, was extended until30 Jun 1996 due to delay in Implementation of drainage works and farm roads.

In general, Bank Performence has been highly satisfactory judging from variousaspects such as project identfication, appraised and supervision. Due to unforseencircumstances such as economic recession and lack of experienced engineers during.initial stage of the project, the project implementation ,period of 10 years to complete allphysidal works was inadequate. However the major components of the civil works suchdams river improvement works, main road bridges and a portion of the drainage worksand. farm roads had been completed by 31 December 1994. In particular, projectappraisal and supervision had been highly effective as there was hardly any costover-run and regular supervision mission had been carried out by officials of the WorksBank throughout the duration of the loan.

4. Borrower Performance

The.Western Johore Integrated Agricultural Development Project (IADP) Phase II wasscheduled to be completed over a period of 10 years from Jan, 1.986 to December1994. There was no delay in implementaion of flood control and river Improvementworlks except for the drainage works and fami roads which experienced some, delay atthe initial stage of the project. Detailed design for the dams and river works werecompleted in 1986 and construction works began in 1987. Construction of the majorcivil works comprising of the Bekok Dam, Sungai Simpang Kid and Sungai Simpang.Kanan River Works, Catchment Separator Bund etc. were completed on schedule.However, due to delay in implementation of detaNed design for drainage works andfarn roads, all the major civil works will only be completed by mid 1998,

Appendix 2-38 - Page 3 of 8

In general the performance of the Borrower can be described as satisfactory inpreparing, implementing and operating the project. The delay in, impfementation, of thedrainage works and farm roads was mainly due to shortage of funds and experiencedengineers to carry out detailed design in-house. Disbursement applications weresubmitted to the Worl Bank promptly after payment has been made to the contractors.At the end of the extended loan closing period, the load amount of US S 49.31 millionwas fully reimbursed by the Bank.

5 Future Operation

The future operation and maintenance of the Second Western Johore AgriculturalDevelopment Project has been studied in great detail by the DID. So far two papershave been prepared with regard to the above subject including a paper on thepossibility of privatising the Operation and Maintenance works to a privatisedlcorporatised body.

Under normal circumstances the State DID will take over the O & M of the infrastructureafter completion of the project. It is estimated that the 0 & M cost for Phase It amountsto RM 13.5 million comprising RM 5,0 million for staff and operating cost and RM 8.5million for maintenance of project infrastructure.

All the infrastructure constructed under the project, in particular the dam and major riversystems, as well as the drainage and farm road systems, require proper and adequateoperation and maintenance In order to obtain optimum benefits from the proposedagricultural development. The operation and maintenance of the Bekok Dam and themajor river system will be carried out in accordance with the Designer's OperationManual and the; DlD has also prepared a separate 0 & M Manual in Bahasa Malaysiafor the dam operator or technician. As for the agricultural drainage system, there aretwo miajor operational requirements, i.e. operation of the drainage control gates anduse of check structures to control ground water level in areas with peat and poLentialacid suplhate soils. The major maintenance work for the drainage system and farmroads include regular clearing and removal of weeds, vegetation as well as filling of potholes, grading and compaction of farm roads periodically.

6. Lesson Learned From The Implementation Of The Project

It is felt that the splitting of the design and construction of the flood mitigation worksand agricultural drainage works between the consultant and the department hasresulted in the late implementation of the agricultural drainage projects. As thecomplete design and construction of the agricultural drainage works were donein-house and at a latter period the flood mitigation works, the land acqulsition planwere submitted late. When the contracts were awarded, those areas that were to bealienated were still in the process of acquisition and as such the contractors could nothave qulck possession of site.

Appendix 239 'Page 4 of 8

It is preferable that the design of the whole system (Flood Mitigation and AgricuituralDrainage) be undertaken by a single body so as to have a more integrated and a wellplanned scheme.

For future undertaking of such projects, land acquisition should be planned and settledbefore the actual construction works begin.

Nevertheless, it is found that the in-house planning and design of the agriculturaldeainage components by the Department had provided good training ground for theDID staffs. This is due to the imvolvement of the DID staffs in the investigation.planning, design as well as construction and supervision of the works. In addition, thisinvolvement has enable them to understand the conceptual aspect of the project andhence helped them to tackle any problems that arise latter.

It is felt that the financial maintenance requirement of the project was not properlyspelled out during the project appraisal stage. This will create problems once the wholeproject is completed. For example:-

i) The agencies responsible for the maintenance works whether the Stateof Federal Government.

ii) types of maintenance works required

iii) sources of funds

During the planning and design stage of the agricultural drainage development, therewere not enough maintenance tracks being privided due to the existng famiroadsbeing built close to the drains without berms in between. There were also financiaJ andsocal constraints in acquiring the land due to the existence of numerous housessituated at the edges of the drain and the road reserves. Any maintenance works forthe drains will damage the farmroads and obstruct the smooth traffic flow. It istherefore recommended that adequate maintenance tracks for drain maintenance beprovided for similar project in future.

7 Assessment of Proiect Impact and Effect

A qulck survey was under taken to assess the impact and effect of. the project. Arandom survey was carried out In five areas representing different soil type. andstages of Development. The focus of the study is to Investigate and evalute theSocio-Economic impact of flood mitigation measures and farm road development.

The five different areas that were studied were as follows:

Appendix 2 :40 - 7age50o f t8

Table 1: Areas covered by study

Block Block Name Block Features No ofRespondent

1. Sri Dayung A newly developed areas 172provided with infrastructure foragriculture drainage and potential

and acid sulphate area.

A new area of clay soil suitableSri Medan for cultivation but has not been

provided with infrastructure..

2. Ayer Hitam Existing cultivated area on peat 35soil and have been improved withnew and upgraded infrastructure

3. Sri Gading An agricultural area on clay 726shallow peat soil but has not beenprovided with infrastructure.

4. Sungai Balang An existing agricultural area on 160coastal alluvial soil.

5 6. Tg. Semberong An existing agricultural area with 171clay soil.

With regard to the impact of flood mitigation efforts it was found to be positive asshown in the following tables.

Table 2: No. of Flood Occurances

No of flooding No of flooding Reduction in No, of % Reductionreported before reported after 1993 Flood Occurances of Flood

1992 Occurances

414 95 319 77

Appendix 2- 41 -Pae 6 o 8

Table 3: Duration of Flood_

Average No Of Days Of Flood % Reduction

Before Project After Project .-

Block 1 60 9 85.0

Block 2 6 1 83.3

L Block 3 26 13 50Block 4 88 2 97.8

Block 5 19 2 78.9

Table 4: Estimated Damages Coused By Flood (RM/Fam!IV/Occurance

Average (RM) Standard DeviationBlock 1 2919.00 J 2393.00

Slaok 2 _ _ -_

Block 3 1096 1299

Block 4 856 922

Block 5 608 1222 j

As se-er from the table there is significant reduction in the number of respondentsreporting flood occurance after the flood mitigation works has been put in place. Theduration of flood has also been greatly reduced.

The project has also make a significant impact on the income of farmers in the area.This can be seen from the subsequent tables.

Table 5: Average Farm Income (RMfYear)

Average Farm Income %

Before Project After Project Income Income

Block 1 2584 4894 2687 103.9

Block 2 2541 5787 [ 313 123,4Block 3 2642 5108 3274 123.9Block 4 1330 4158 2828 212.6

Block 5 1461 2196 . 732 50.13

Total: | 1972 4330 -- 2228 112

Appendix 2- 42 - Page 7 of 8

Tabie 6: No Of Res2ondent and Reported Increase In Farm Income.

% Increase in Farm Income Total .

At25% At 50% jAt75% At 160%

Block 1 70(85.4%) 6(7.3%) 2(2.4%) 4(4.9%) 82

Block 2 28(80.0%) 1(2.9%) . 6(17.1%) 35

Block 3 216(95.6%) 3(1.3%) 1(0.4%) 6(2.7%) 226

Block 4 135(84.4%) 4(2.5%) 2(1.3%) 19(11.9%) 160

Block 5 67(74.4%) 12(13.30%) 2(2.2%) 9(10%) 90

Total: [516(92.3%) 26(4.7%) 7(1.3%) 49(0.72% 553

' ( )%/

Table 7: Averaqe Total Household Income (RMIYear)

Average Total Household Income % Income

Before After Income

Biock 1 2584 11223 9250 358

Block 2 2541 13036 11774 463

Block 3 2642 13098 11909 450

Block 4 1330 10908 10303 775__

8lock 5 1461 9330 7585 519

Total: 2112 11519 9407 445{o l: ____-______ __ lX__ .-

Table 8: No Of Respondents and Reported Increase In Farm Income

% Increase in Total Household Income Total

At 25% At 50% At 75% At 100%

Block 1 43(52.4%) 1(1.2%) 38(46.3%) 82Block 2 16(45.7%) 1(2.9%) - 18(51.4%) 35Block 3 164(72.6%) 4(1.8%) 6(2.7%) 52(23%) 226Block 4 68(42.5%) 1(0.6%) 4(2.5%) 87(54.4%) 160Block 5 32(36.4%) -_ 56(63.6%) 88

Total: 323(54.6%) 7(1.2%) 10(1.7%) 1251(42.5%) 591

)OX,I _ .. _ ._.

Appendix 2- 43- Page 8 of 8

With respect to farm income there is a significant increase after thie project in all thrastudy areas. However the majority of respondent have an increase in farm income atless than 25%.

When total household income is taken into consideration, the project has contributecdsignificatly in increase in Income in all the study areas. More respondents (42,5'?O) arereporting more than 100% increase in total household income. This could be attributedto better employment opportunities among the household members in the rural! areaswith irnproved roads systems. Household members are able to commute to work andstill stay in the villages. This contribute to the significant increase in total housetioldincom6.

In conclusion the study has shown the project has had a significant impact on theSocio-Economic and well being of the farmers in the project area.

- 45 -Appendix 3Page I of 4

IMPLEMENTATION COMPLETION REPORTMALAYSIA

SECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT(Loan 2740-MA)

Economic Re-Evaluation

1. The gross project land area is 210,000 ha. At appraisal, the cultivated area was estimatedat 153,000 ha and the rest 57,000 ha consisted of swamps, urban areas, etc. About 42,000 ha inthe project area was flooded periodically for various depths and durations, and the rest sufferedfrom the internal drainage problem. About 85,000 ha was expected to eventually benefit as aresult of the drainage and flood control works under the project. Of this, 50,000 ha was tobenefit through replanting of old rubber, 20,000 ha through bringing into production of swampsand scrub lands with oil palm and diversified crops, and 15,000 ha under coconut throughintercropping with cocoa, coffee and fruits.

Economic Benefits

2. As at appraisal, the eventual benefited area under the project is still estimated to be85,000 ha. Although precise estimates are not available for land use in the project area in 1996,the following was estimated based on data in the feasibility report for the project and areacovered by the completed and ongoing drainage and farm road works under the project:

Estimated Project Area Land Use (1996)

HaUrban and associated areas 20,000Swamp / Scrub land which can not 16,000

be cultivated even after projectEstates 48,000Forest 11,000Unknown (no information was available 5,000

in the Feasibility Report because oflack of aerial photography)

Possible Hilly Areas (mostly under rubber) 25,000Smallholder areas with potential 85,000

project benefits

Total 210,000

3. The figures for urban and associated areas and possible hilly areas are rough estimates,while the other figures are based on the feasibility report. Moreover, some hilly areas may beunder estates, and some estate areas may also benefit from the project, although, as a matter ofpolicy, estate areas are generally excluded from the project works for drainage and farm roads.

- 46 -

Appendix 3Page 2 of 4

4. The 85,000 ha smallholder area to eventually benefit from the project includes about14,000 ha replanted under RISDA grants, and an estimated 5,000 ha previously abandoned areabrought under cultivation, 15,000 ha area heavily damaged in the past due to frequent floods andnow enjoying sustained production, and 51,000 ha enjoying increases in yields due to betterdrainage. The yearly phasing of benefited areas is shown below:

Phasing of Areas Benefiting Under the Project (ha)

A B C D Total1987 1,930 - - - 1,9301988 4,000 - - - 4,000

1989 5,700 - - - 5,700

1990 6,850 - - - 6,8501991 8,000 1,000 5,000 5,000 19,0001992 9,400 2,000 7,000 6,000 24,4001993 10,875 3,000 9,000 7,000 29,8751994 12,000 4,000 11,000 8,000 35,0001995 13,300 5,000 13,000 10,000 41,3001996 14,300 5,000 15,000 12,000 46,3001997 14,300 5,000 15,000 20,000 54,3001998 14,300 5,000 15,000 35,000 69,3001999- 14,300 5,000 15,000 51,000 85,3002016

A - Area replanted under RISDA grantsB - Previously abandoned area brought under cultivationC - Area heavily damaged in the past due to frequent floods and now

enjoying sustained productionD - Area enjoying increases in yields due to better drainage

5. Although replanting of old rubber under RISDA was financed under the project onlythrough 1993 (after 1993, the Second RISDA Project (Loan 3699-MA), which was a nationalproject, came on stream, and it was considered more convenient to include financing ofreplanting in West Johor Project area under that project), the replanted areas through 1996 havebeen included in the economic analysis. Of the 14,300 ha replanted through 1996, about 9,200ha was under oil palm, 2,800 ha under rubber, and 2,300 ha under other crops (mainly fruits).Since the replanting grant rates are the same for oil palm and most other diversified crops, andtogether these crops account for 80% of the replanted area, and since there are too manycommodities in the diversified crops category for which separate analyses would have beenunnecessarily cumbersome, costs and benefits of the entire 14,300 ha have been calculated for oilpalm only. This understates the economic rate of return (ERR), since the returns from fruits andother diversified crops are much higher than those from oil palm and rubber. The yield profilefor oil palm used is the same as at appraisal.

- 47 -

Appendix 3Page 3 of 4

6. For categories B and C (para. 3) also, costs and benefits have been calculated for oil palmonly, since the areas cultivated are overwhelmingly under oil palm. Although many areas incategory C were already under cultivation but suffered heavy damages, and, therefore, onlyincremental benefits and incremental harvesting costs should be included in the economicanalysis, a conservative approach was taken due to lack of precise data by treating these areas asnew areas with full investment and maintenance costs and benefits included in the economicanalysis. This approach understates the ERR to some extent.

7. For category D in para. 3, the entire area is assumed to be under oil palm and a 10%increase in yields is assumed, consistent with the estimate in the feasibility report for the project.Depending on the water quality, flooding with a duration of three to seven days will cause stressand even death to more susceptible crops like coffee and cocoa. Rubber is somewhat moretolerant and can stand inundation for up to a maximum of two weeks, while oil palm and coconutare able to withstand more prolonged flooding provided the spear is not submerged. The floodwater, apart from physically damaging the trees, also affects the productive capacity of the trees,arising from non-collection of latex and damage to fruits, pods, berries, etc. The assumed 10%increase in yields is equal to 2 tons of ffb/ha, since the oil palm in the area is mostly mature,yielding 18-20 tons of ffb/ha/year. The benefit was thus calculated on the basis of 2 tons offfb/ha. Moreover, a substantial reduction in transport cost of ffb has occurred due to roadconstruction in these areas (transport cost of ffb/ton ranges from RM15 for bad roads to RM10for good roads in the project area), and, therefore, a transport cost saving of RM5 per ton of ffb(with a yie]d of 20 tons of ffb/ha) was included as a benefit in the economic analysis.

8. As regards intercropping of coconut with cocoa, coffee and fruits (15,000 ha expected atappraisal), by mid-1996 only about 3,870 ha of cocoa and 2,510 ha of coffee had been planted.These benefits are minor and have not been included in the economic analysis.

9. Although benefits from pumping of water from the Bekok river for water supply couldnot be quantified, they are substantial. Therefore, as assumed at appraisal, 48% of the costs ofthe dam and appurtenances, and the same proportion of land acquisition and consultancy costsassociated with the dam, have been allocated to water supply and excluded from economic costs.

10. The replacement and strengthening of bridges, which now not only have increasedlengths required for the widened rivers but also wider roads to cater to expected increased traffic,has led to an increase in the volume of traffic and savings in transport costs. However, thesebenefits could also not be quantified. Therefore, only 20% of the cost of bridges, which can beascribed to flood protection, was included in the economic analysis.

11. Precise estimates for the pre-project flood damage to property, the cost of evacuation ofaffected people to the relief centers, and the cost of relief centers, were not available. Therefore,the appraisal estimate of RM2 million a year in 1985 constant terms (converted to RM3 million ayear in 1996 constant terms) was used in the economic benefit stream.

- 48 -Appendix 3Page 4 of 4

12. The economic farmgate prices for oil palm used in the analysis of benefits (in 1996constant terms) are based on actual prices from 1987 to 1996 in the project area, and projectedprices from 1997 onwards using the Bank's commodity price projections of August 1996.

Economic Costs

13. The actual and projected expenditure for the project from 1987 onwards in current pricesis shown in Table 1. These costs were converted to 1996 constant terms, and adjustments madeas mentioned in paras. 9 and 10, and taxes and duties (5% of civil works costs) excluded, toderive economic costs, which are shown in Table 2 along with economic benefits. The re-estimated net present value at a discount rate of 10% is RM57.8 million, and the economic rateof return 13%, compared to the appraisal estimate of 14%.

Appendix 3

Table 1

MALAYSIA

SECOND WES1 ERN JOIIOR AGRICULTUJRAL DEVELOPMIENT PROJECT

ACTUAL AND PROJECTED EXPENDITURE BY YEAR (RNI '000)

UP TO LOAN CLOSING ON JUNE 30, 1996 AFTER LOAN CLOSING

COST ITENI ~~~~~~~~ ~ ~~~~~~~~~~~~JAN I TO JULY I TOTOA1987 1988 1989 1990 1991 992 1993 1994 1995 JUN I TO TOTAL DEC 11 1 996 1997 1999 COST TILL 1999 2000 2001 2002

CO61IPLETIOJN

I CIVIL WORKS

BEKOK DAM 3,156 3,906 6,090 3,937 2,314 720 - 804 - - 20,927 20,927

FLOOD RETARDING EMB , - - - 747 2,231 1,174 548 4,700 4,700

CATCHMENT SEPARATOR BUND 714 2,035 909 3,658 3,658

RIVER WORKS - SEMBRONG 530 685 9S1 1,896 - 25 4,117 4,117

- BEKOK - 1,537 1,249 1,267 926 4,979 4979

- KANAN 8,500 4,437 8,642 2.476 24.055 24,055

- KIRI 2,795 4,502 4,723 2,013 423 958 15,414 15,414

BRIDGES 2,216 3,933 9,634 8,900 9,267 5,404 336 48 39,738 39,738

DRAINS AND ROADS 634 608 1,486 9,561 12,387 5.693 30,369 11,000 16,000 4,500 61,869

SUBTOTAL 3,156 3,906 11,101 12,902 26,490 20,657 27,229 22,553 14,222 5,741 147,957 11,000 16,000 4,500 179,457

2 BUILDINGS - - 457 27 - 567 631 1.682 1,682

3 LAND ACQUISITION 25,890 4,627 12,246 1,526 663 540 6,232 1,603 992 330 54,649 1,000 2,000 4,000 61,649

4 EQUIPMlENT AND VEHICLES 265 . 251 125 145 206 311 50 1,353 1,353

5 INCREMENTAL ADMINISTRATION

PNIU 200 400 610 644 780 762 728 390 390 200 5,104 400 750 750 7,004 700 700

DID 896 872 935 941 1.208 839 574 612 793 400 8,070 500 870 840 10,280 810 810 1,500 1,500

SUBTOTAL 1,096 1.272 1.545 I.SS 1,988 1.601 1302 1.002 I.IS3 600 13174 900 1.620 1.590 17.284 t 510 1.510 1.500 1.500

6 MAINTENANCE DURING . . . 285 482 465 1,135 943 646 3,956 700 2,000 3,000 9,656 4,000 5.010 8.509 8,500

CONSTRUCTION

7 AGRICUL1 URE DEVELOPMIENT a) 2.896 5,166 6,104 5,795 6,457 6.526 6.881 (6.570) (6,261) (5,590) 39,825 (3,450 (1,8511 39,825 (807) (190) (110) )35)

8 TRAINING .. - . 80 284 624 988 988

9 CONSULrANCIES . 944 1,142 1,654 1,660 2.318 1,855 1,736 1,068 198 12,575 12,575

1' TOTAL. COST 33,383 15,9105 32,138 3,71t3 37,668 32,7Z6 44,277 28.64 19,599 8,196 Z76,I89 13,600 Z .620 13,0 314.469 2,410 6,5 18.1808 10,00

a) ..g grIIn parenlhess are expenditures inanced unde the Second RISDA Project (Loan 3699-MA) hrouch 1996, and to he fnanced by the Government outside the Second Western J)h.r ProJct

f-rn 1997 on-ards The total of R1 39,825,000 cscludes these e.pendit.es in parentheses I.owvo, those eupendiurer are included in eeononic analysis

Appendix 3Table 2

MALAYSIASECOND WESTERN JOHOR AGRICULTURAL DEVELOPMENT PROJECT

ECONOMIC STREAMS(M$ MILLION)

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-2016

INCRENMEN I-AI : I S

FLOOD PROTECTION /a - - - - 30 3 0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3 0 3.0 3,0 3.0 30 3.0

AGII)CULTUJRE /b 5.4 5.8 4.7 3.5 4.8 8.9 12.2 26.0 42 4 44.5 49,2 59.0 68 1 72,2 76.3 78.4 77.7 75 0 71.7 60.0

AGRICLILI,tREl/c - - - - 2.2 26 28 50 67 6.1 8.8 14.7 20.4 19.0 18.4 179 173 168 16.3 16.3

SUI3TOTAL INCRENtENTAL EENEFITS 5.4 5.8 4.7 3.5 10.0 14.5 18 0 34,0 52.1 53 6 61.0 76.7 91.5 94.2 97.7 99.3 98 0 94 8 90.0 79.3

(In 1996 Constant Terms)

INCREMENTAL COS'I SINVESININ-I: INFRAS1RUC1I-JRE/d 22.7 7.8 18.6 14.2 24.3 18.4 30.4 22.4 17.5 19.3 18.8 9.9 - - - - - - - -

AGRICt)L-TURE/e 4.3 6.1 6.7 6.8 19.6 17.4 18.9 21.0 19.1 16.1 8.4 5.3 2.3 - - - - - - -

-rl(0IlRAl ION ANI) MAINIENANCIE:

INFRASTRUCtJCURE - - - - 0.3 0.6 0.6 1.2 1.0 1.3 2.0 3.0 5.5 6.5 100 100 100 10.0 10.0 10.0

AGIRICIJLTURI./f - - - - 1.5 3.0 43 5.2 104 136 17 2 19.7 23.0 24.8 24.3 23.8 23 1 22.1 21 5 16 0

SULBTOTAL INCRFIMENTAI, COS lS 27.0 13.9 25.3 21.0 45.7 39.4 54.2 49.8 48.0 50.3 46.4 37.9 30 8 31.3 34.3 33.8 33.1 32.1 31.5 26.0

(In 1996 Constant -crnis)

INCREMFNTrAL. NET BEN-FITS (21.6) (8.1) (20.6) (17.5) (35.7) (24.9) (36.2) (15.8) 4.1 3.3 14.6 38.8 60.7 62.9 63.4 65.5 64.9 62.7 58.5 53.3

INTERNAL RATFE OF RETUt RN - 13%

/a Urban damage avoided/b 34,300 ha (assumed to be new planting or replanting with oil palm) Includes benefits from sale of rubberwood in replanlings under RISDA grants.

Ic 51,000 ha (benefit assumed to accrue from increase in yields and reduction in transport cost of oil palm)

/d Infrastructure cost less estimated cost of waler supply and savings in transport costs due to construction and strengthening of bridges, and net of taxes and duties of 5%. Also includes costs of landacquisition, equipment and vehicles, buildings, incremental administration, training and consultancies.

/e 34,300 ha of new planting or replanling with oil palm

/f For 34,300 ha

MAP SECTION

IBRD 18871

MALAYSIA ERUS . THAILAND

SECOND WEST JOHOR AGRICULTURAL DEVELOPMENT PROJECT KEDAH,- - -

PENANG: , i

Proler Bo-ed-ry EXISTING BEFORE PROJECT PERAK

-Blok B-udories MALevees / M LS JLA

Land Above 1 5 reer Elevor-on Dom -nd Reser-e> \A

Area Flvvded 25 Ye-rs Rethv Perivd Roods " PAHIANG

SELANGORIArea Flooded Alter the Pro1evt WATER SUPPLY EXTRACTION POINTS /- iO@

* Evisting Before rIse,Prv1et vI/Rpur 'NEGRI\.

CIVIL WORKS COMPLETED UNDER PROJECT I Co-str-vred Drine9 Pr1evt Perivd

-- River Evrgemeet vnd ReagnmentELA

* *. Levees

- - - - MiM Dr-i-s lprovemeet / INDONESIA

.A~ . Cotchmeet Separator B3nd (Sumoterc) SINGAPORE

3 Drainage Ootlet S-t..ores

Ne-eBeRdge Works/Strengthening

LI- GeDm end Reserir

Flood Retarding Ei-borket Tv. r

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DECEMBER 199T

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