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The World BankFOR OFCIL USE ONY

Report No. 6398

PROJECT COMPLETION REPORT

PAKISTAN

TARBELA DAM PROJECT

(LOAN 548-PAK, AND CREDITS 581- AND 771-PAK)

September 15, 1986

Operations Evaluation Department

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

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ABBREVIATIONS

DOM - Duloy/O'Mara StudyERR - Economic Rate of ReturnFGW - Fresh GroundwaterGOP - Government of PakistanIBDF - Indus Basin Develooment FundIDA - International Development AssociationO&M - Operation and MaintenanceOED - Operations Evaluation DepartmentPCR - Project Completion ReportPPAM - Project Performance Audit MemorandumPPAR - Project Performance Audit ReportSAR - Staff Appraisal ReportSGW - Saline GroundwaterTDF - Tarbela Development FundTW - Public TubewellUNDP - United Nations Development ProgrammeWAPDA - Water and Power Development Authority

TERMS OF MEASUREMENT

kv - kilovolt: 1,000 voltskw - kilowatt: 1,000 wattskwh - kilowatt hour: urnit of work or energy equal to

that expended by one kilowatt in one hourMAF - million acre feetMw - megawatt: 1,000,000 watts

uF%ffA ~N5lI 0 JI

THM WORLD BANKWashington, D.C. 20433

USA.

Office of D,wto.GaswaIopsratwme EvaiuatiaA

September 15, 1986

MEM4ORANDIUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Performance Audit Report on Pakistan Tarbela DamProject (Loan 548-PAK and Credits 581- and 771-PAK)

Attached, for information, is a copy of a report entitled"'Project Performance Audit Report on Pakistan Tarbela Dam Project(Loan 548-PAK and Credits 581- and 771-PAK)" prepared by theOperations Evaluation Department.

Attachment

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

FOR OMCIL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

PAKISTAN

TARBELA DAM PROJECT(LOAN 548-PAK, AND CREDITS 581- AND 771-PAX)

TABLE OF CONTENTS

Page No.

Preface .......................................**..*******..**....* iBasic Data Sheet ................. . ........................... iiiEvaluation Summary .... ...................................... ....... iv

PROJECT PERFORMANCE AUDIT MEMORANDUM

1. SUMMARY .. oo........... ,,............. 1

Formulation and Design .... ................................ 1Implementation ................ *.*.*S...***************** 3Impact *.000000000000000000000000000000000000000000000000.. 5

II. MAIN ISSUES ................. 7

A. Economic Evaluation *0e0@0**0e*.........*......... 7B. Irrigation Water Allocation ........................... 12C. Water Resource Planning ............................... 13D. Cofinancing Through Development Funds .... is 15E. Priorities in Project Emergencies ..................... 16

Appendix: Borrowet Comments *4 .............................. 0000 000 17


I* Introduction ........., .................................. 23II. Background 0000. .......................... * 26III. Project Formulation ................................. 30IV. Principal Project Features ................................ 32V. Project Administration and Management ..................... 33VI. Project Implementation .................................... 38VII. Remedial/Repair Program ........................... 42VIII. Future Work ................. 4.........., 45IX. Operating Performance ........................... 48X. Financial Performance *.................................. 50XI. Institutional Performance and Development ................. 51XII. Economic Re-evaluation .....o...... ....................... 53XIII. Bank Performance ............. ............ ..............* 57X'V. Conclusions .......................................... 59

Annexes .... , , , . .............................. 63

Map IBRD No. 3891(PCR)

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


PAKIS'iAN

TARBELA DAM PROJECT(LOAN 548-PAK, AND CREDITS 581- AND 771-PAK)

PREFACE

This is a performance audit of the Tarbela Dam Project in Pakistan,for which one Bank loan and two IDA credits were approved as follows: Loan548-PAK in 1968 for US$25.0 million equivalent as an initial contribution tothe Tarbela Development Fund (TDF); Credit 581-PAK in 1975 for US$8.0 millionequivalent as a contribution to the TDF Supplemental Agreement; and Credit771-PAK in 1978 for US$35.0 million equivalent as a contribution to the TDFSecond Supplemental Agreement. The audit covers not only the foregoing loanand credits buz also the EEC Special Action Credit 51-PAK in 1980 for US$9.0million equivalent in support cf the general purposes of the TDF, and allother project financing. The Bank loan and credits were fully disbursed bySeptember 1981, at which time other monies from bilateral contributors andPakistan still remained in the TDF.

The audit has a number of special features. First, it covers aseries of lending operations, beginning 18 years ago, for an extremely largecivil engineering project whose completion was substantially delayed by majormishaps. Second, OED decided at an early stage in its review not to commenton, or evaluate, the technical engineering aspects of these mishaps. It hadlong been felt that OED could not add materially to the lessons learnt fromthose problems, and this was an important considaration when the time camefor audit. Instead, it was decided to focus attention on other aspects ofthe investments, particularly their economic rationale. Third, the auditreviews the events during the 30 years of Bank involvement in the Indus Basinand Tarbela Dam projects. During the last 15 years of the period the spot-light has been on Tarbela, and although these years are covered in greaterdetail, much is necessarily presented briefly. There are no staff appraisalreports to which one can refer for earlier analyses and views, nor are thereprevious completion reports covering the Bank's loan and credits; conse-quently, the format and content of this report are somewhat different fromthe standard PPAR.

The audit report comprises: an audit memorandum (PPAM), preparedby the Operations Evaluation Department, and a Project Completion Report(PCR) prepared by the South Asia Projects Department. The latter's discus-sions with Pakistan's Water and Power Development Authority (WAPDA) on

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preparation of a draft PCR were initiated during a mission in May 1982. InDecember 1982, WAPDA furnished a partial draft of the PCR. Remaining por-tions were furnished at the end of June 1983. Using the WAPDA material andother material in Bank files, a Bank draft was completed in mid-August 1983and furnished to WAPDA staff and to the Bank consultants on the Tarbela DamProject, and their technical review was requested. WAPDA's and the consult-ants' comments were considered in the preparation of the PCR which was com-pleted in April 1984. In addition to these sources, the PPAR is based on areview of the relevant President's Reports and Loan and Project Agree-mentsl/, the Administrator's Reports and related documents, and correspon-dence with the Borrower and internal Bank memoranda on project issues as con-tained in relevant Bank files. Bank staff associated with the project havealso been interviewed.

An OED mission visited Pakistan in November/December 1984. It helddiscussions with WAPDA, the Ministry of Water and Power, the Ministry ofPlanning and Development, and the Bank's consultant for the project (SirAlexander Gibb and Partners). It also visited the project site on the IndusRiver. The information obtained during the mission was used to test thenon-engineering conclusions of the PCK and to elaborate on a number of issuesin the audit memorandum. The technical, engineering features of the TarbelaDam and its remedial/repair program have been reported in many documents,particularly in the half-yearly Administrator's Reports, the Special Reportsof the Administrator (see Annex 7 to the PC,(, items 8, 14, 15, and 21) and inthe Bank consultants' report of June 1980 (see PCR, Annex 7, item 23). Alist of principal references and publications is given in PCR Annex 7. Inaddition, the technical problems of the project are reviewed in the PCR(paras. 7.03-7.04 and 14.13-14.14).

Ignoring the technical issues, on which it takes no position, theaudit finds the PCR comprehensive and generally accurate with respect to theproject's principal achievements. Part II of the audit memorandum commentson the PCR's evaluation of power and agricultural benefits, but the audit'ssuggested changes offset one another. The main issues discussed in the auditmemorandum have been selected because of their relevance to the evaluationand financing of large civil works and to the handling of emergency situa-tions that threaten the integrity of such works.

The draft report was sent to the Borrower on April 9, 1986 forcomments. Comments received from WAPDA are attached as an appendix to tilePPAM.

The valuable assistance provided by Government staff, and by theother individuals interviewed is gratefully acknowledged.

1/ These were as follows: for Loan 548-PAK, the President's Report No.P-616 of June 18, 1968 and Loan Agreement of July 10, 1968; for Credit581-PAK, the President's Report No. P-1674-PAK of July 10, 1975 andDevelopment Credit Agreement of August 15, 1975; for Credit 771-PAK, thePresident's Report No. P-2228-PAK of February 15, 1978 and DevelopmentCredit Agreement of March 10, 1976.

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PAKISTAN

TARBELA DAM PROJECT(LOAN 548-PAlt CREDITS 581- AND 771-PAK)/a

BASIC DATA SHEET

KEY PROJECT DATAInitial Actual or Actual as S ofEstimate Estimated Actual Initial Estimate

Basic Project Cost (US$ million) /b 828.0 954.0 115Total Project Cost (US$ millior.) 7; 828.0 1,497.0 181Date Physical Components Completed 04/76 1984 /d 200

Proportior. then comapleted (2) - 100Portion of Time Overrun (2) - 100Economic Performance (ERR 2) 9-13 12.5 96-139Institutional Performance - SatisfactoryFinancial Performance SatifactoryDate Board Approval Lr.. 548-PAK (US$25 million) 06/19/68 Effective 08/02/68Date Board Approval Cr. 581-PAK (US$8 million) 07/2/75 Effective 08/15/75Date Board Approval Cr. 771-PAK (USS35 million) 02/28/78 Effective 02/28/78Date Board Approval EEC SA Cr. 51-PAK (US$9 million)02/23/RO) /e Effective 06/02/80

CUMULATIVE DISBURSEMENTSFY69 FY70 FY71 FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82

Initial estimate (USS in)Actual (USS million)Actual as X of Appraisal estimateDates of Final Disbursement: Ln. 548-PAK 11/16/76; Cr. 581-PAR 01/13/76; Cr. 771-PAK 09/09/81.

STAFF INPUTS /f

FY68-72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85

Negotiations n.a. 7.2Preparation n.a. 0.2Supervision n.a. 3.4 35.6 20.2 36.1 37.3 54.0 88.7 14.2 31.6 40.1 25.2 33.1

MISSION DATA

Month/ No. of Staffdays Specializarions Performance Types ofMission Year Persons in Field Represented /a Rsting /h Trend /i Problems /

Supervision 1 08/80 1 10 e 2 1 T,FSupervision It 12/80 1 25 e 2 1 T,FSupervision III 03/81 1 17 e 2 1 T,FSupervisior. IV 07/81 2 16 e.n 2 1 T,FSupervision V 09/81 1 16 e 2 1 T,FSupervision VI 06/82 1 20 eSupervision VIl 09/82 1 12 2 1 T,FSupervision VIII 01/83 1 21 e 2 1 T,FSupervision IX 06/83 2 27 e,n 2 1 T,FSupervision X 09/83 1 21 2 1 T,FSupervision XI 01/84 1 14 e 2 I T,FSupervision XII 09/84 1 9 e 2 1 TJFSupervision XIII 12/84 1 16 e 2 1 T,FSupervision XIV 05/85 1 10 eSupervision XV 10/85 1 12 e 2 1 T,F

SUBTOTAL 246

OTHER PROJECT DATA

Borrower Islamic Republic of PakistanExecuting Agency WAPDAFiscal Year July I to June 30

Name of Currency (abbreviation) Rupee (Rs)Currency Exchange Rates:

Appraisal Year Average US$1.00 - Rs 4.76Completicn Year Average US$1.00 - Rs 12.00

/a Bank acts as Administrator of Tarbela Development Fund which includes not only these loans and credits,but also contributions from several bilateral contributors 'Tarbela Development Fund Agreement(1968) and from Pakistan.

/b Does not include costs of remedial/repair program.7; Includes costs of remedial/repair program.7; Final completion was delayed by repair of a series of damaging events (see Chapter VII, PCR)7T US$7.06 million equivalent disbursed. Difference due to fluctuations in values of the several

currencies./f Source, Planning and Budgetting Department - in staff weeks

e - engineer, n - loan officer.7i 1 - Problem-free or Minor Problems; 2 - Moderate Problems and 3 - Major Problema.7W I - Improving; 2 - Stationary; 3 - Deteriorating.TI T - Technical; F - Financial.

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PAKISTAN


EVALUATION SUMMARY

Introduction

Tarbela Dam, the largest fill-type dam in the world, is the keyfeature, and the last to be constructed, of the Indus Basin Project. TheBank assisted in mobilizing funds and served as Administrator of both theIndus Basin Development Fund (IBDF) (1960-67) and the Tarbela DevelopmentFund (TDF) (1968-present), managing the disbursement of over US$2.3 billionequivalent. As Administrator of the IBDF and TDF, the Bank represented theinternational community of lenders and donors who participated. The need togive prudent management to these funds, together with the large contributionsby Pakistan, for a construction program of unprecedented magnitude and com-plicated by the Tarbela remedial/repair program resulted in very broad anddeep involvement by the Bank, beyond fund management into project management,administration, technical analysis and technical decisions.

Objectives

The main objectives of the Tarbela Dam Project were to provide reg-ulated water supplies for irrigation use, provide substantial supplies ofhydroelectric power, and give a measure of flood control by storing snowmeltand monsoon flows of the Indus River. All of these were to be accomplishedby constructing the Tarbela Dam and related hydroelectric civil works. Powergeneration equipment was to be procured and irstalled using non-TDF finance.

Implementation Experience

Construction of the principal elements of the Tarbela Dam Projectbegan in 1968 and proceeded on schedule. Construction was under a singlecivil works contract which required the contractor to complete all construc-tion including the powerhouse building. Filling of the reservoir commencedin 1974. In August 1974, a series of problems developed, beginning withsevere damage to Tunnels 1 and 2, which set in motion a remedial/repair pro-gram that extended over the next ten years, ending in 1984. Some part ofthis program fitted within the original project concept, which allowed forsome investments to be delayed until experience was gained from early opera-tion of the project, but the major part of it was unexpected. For a periodduring 1974/75, the project was threatened with even more serious damages,the aversion of which was a major accomplishment. The total cost of theproject, including the remedial works, rose from US$828 million to US$1.497billion.

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Sustainability

All phases of the remedial/repair program were completed in 1984.Future activities can be coitsidered to be routine operation and maintenance.Because o? the unprecedented size of many of the project facilities, the O&Mprogram will be very large dnd is the key to the long-term performance andsafety of the project. Close attention, regular inspection, adequate finan-cial resources and national recognition of the critical nature of Tarbelawill clearly be required. GOP/WAPDA were slow in developing this program,but it is coming together. The program ought to be sufficient to sustain thephysical outputs that have been forecast in the PCR. Furthermore, the addi-tional waters diverted for surface irrigation should also help to sustain oraccelerate groundwater irrigation in the Indus Basin through recharge ofaquifers. This latter benefit, being additional to irrigation benefitscounted in the PCR, should offset any decline in power benefits signalled bythe current drop in energy prices.

Findings and Lessons

Despite the long period and great demands of the remedial/repairprogram, the profile of project benefits was delayed by only one year and thefirst decade of Tarbela's hydro-power output enjoyed unexpectedly high energyprices, with the result that the project's economic rate of return is estima-ted in the PCR at 12.5%. This is within the limits of the pre-project esti-mate (1967) that "...a reasonable conservative range of rate of return wouldbe about 9-13 percent." This finding is indeed remarkable in view of themany problems of implementation, but the audit believes it is a reasonableone. Power benefits, previously expected to amount to one-quarter of thetotal benefits, have risen to nearly one-half, principally through theincreases ncted in the value of energy, and currently contribute about 30% ofthe nation's electricity output. The agricultural benefits could have beenmeasured quite differently, according to other analyses in the Bank, but thelikely direction of corrections in this case would favor a higher, not alower return. Nevertheless, the possibility that these benefits could besignificantly greater than revealed in the PCR deserves attention (PPAM,paras. 25-36), particularly for future appraisals of similar projects.

Modelling studies of the Indus Basin carried out within the Bankre-confirm widely shared vie-s that certain changes in surface waterallocation policy in Pakistan--regarding the disposition of incrementalirrigation water supplies--could increase the irrigation benefits ofTarbela. Principally, these changes would require agreement among theProvincial and Federal Governments that greater proportions of such suppliesbe directed towards areas overlying saline groundwater. This strategy,coupled with necessary investments in drainage, could give rise toconsiderably higher, Basin-wide gains in production and employment. Thebenefits to be derived from breaking the deadlock of competing interests inwater allocation would rival the benefits of further major engineeringinvestments in developing water supplies (PCR, para. 11.04 and PPAM, paras.37-39), if these two courses were considered as alternatives. Naturally, thetwo courses would also be highly complementary.

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The original feasibility analysis for Tarbela was part of a broadsector planning study undertaken by Bank staff and consultants to identifyinvestment priorities in the water and power systems. Unfortunately, thedevelopment of the institutional capacity to conduct research and training inPakistan on water resource engineering and management has not been an impor-tant area of Bank concern (PPAM, paras. 40-41).

The TDF, into which all financial resources were placed to form asingle fund with the Bank as Administrator, was clearly a useful device.This fund and the earlier Indus Fund offer a successful model of how tocofinance giant civil works, and such funds deserve to be employed again ifsimilar circumstances arise. Although the Bank carried out its variousresponsibilities as Administrator rather well, its arrangements internallyfor project supervision evolved somewhat haphazardly. The final arrangement,introduced since 1980, of having a single responsible project officer whoprepared regular supervision reports internally, as in any other project, wasclearly the preferable one. The responsibilities of such an officer needcareful consideration when outside firms are hired to do most of thesupervision work on behalf of the Bank as Administrator, as was the case withTarbela (PPAM, paras. 42-46).

The most critical element favoring the project's success, however,particularly the success of the remedial/repair program, was the cooperationand support of all parties involved: the international donor community, alllevels of the Government of Pakistan (GOP) and the involved agencies of GOP,the contractor, the project consultant, the other consultant and advisorygroups, and the Bank. The behavior of these parties on the occasion of theincidents that threatened the project in 1974 offers an exemplary model forhow to deal 'ith emergency situations for large civil works. But the tonefor the joint response was set by GOP. Its consistent commitment to savingthe project was the key to the success achieved (PCR, paras. 11.02 and 14.23,and PPAM, para. 47).

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PROJECT PERFORMANCE AUDIT MEMORANDUM

PAKISTAN


I. SUMMARY

Formulation and Design

1. Background. The partition of the Indian subcontinent in 1947resulted in the border between India and Pakistan being drawn across theIndus river system. Pakistan became the downstream riparian on all the trib-utaries, and the division of the waters became a major internationaldispute. However, in 1952, both countries accepted offers by the Bank toassist in finding a settlement, and in 1954, the Bank put forward proposalsfor a settlement that had the following principal features. The waters ofthe three Western rivers, the Indus, the Jhelum and the Chenab, were to beallocated to Pakistan, and the waters of the three Eastern rivers, the Ravi,the Beas and the Sutlej, to India. The areas in Pakistan, hitherto fed bythe Eastern rivers, would in future be fed by water to be transferred fromthe Western rivers by means of a system of replacement works.

2. In September 1960, India and Pakistan signed the Indus WatersTreaty, in which it was agreed that India would have the sole use of thewaters of the Eastern rivers and would make a contribution to the cost of thereplacement works, while Pakistan would have the use of the waters of theWestern rivers.

3. This solution of the dispute became feasible as the result of thewillingness of a number of countries and the Bank to provide substantialfinancial assistance to supplement India's payment due under the terms of theIndus Waters Treaty. Accordingly, the Indus Basin Development Fund Agree-ment, 1960, was executed simultaneously with the signing of the Indus WatersTreaty. This Agreement established the IBDF (or Indus Fund), wich commit-ments from Australia, Canada, Germany, New Zealand, Pakistaa, the UnitedKingdom, the United States, and the Bank to contribute in grants ana loans(including 62,060,000 to be provided by India under the Indus WatersTreaty), the equivalent at that time of US$895 million. The Bank's contribu-tion was a loan of US$90 million, and it agreed to act as Administrator.

4. The system of works originally consisted of the construction of twolarge dams, one on the Jhelum River (Mangla) and another on the Indus River(Tarbela), about 400 miles of new link canals, three major and two minor bar-rages, the remodelling of three existing link canals, and a program of tube-wells and drainage. At that time the total cost of the system was estimatedat US$848 million equivalent.

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5. However, it soon became apparent the funds committed would beinsufficient. After discussions among the Bank, the contributing governmentsand Pakistan, a compromise was reached on a new financing plan for a reducedsystem of works in which Mangla Dam, the barrages and the link canals wouldbe given priority and the tubewells and drainage works would be omitted; anyfunds remaining in the Indus Fund would be made available to Pakistan tofinance the Tarbela Dam on the Indus or another water development project, tobe agreed by the Bank and Pakistan after a study of the water and powersector in the then West Pakistan.

6. A new financing plan involving an additional US$315 million inforeign exchange from the contributors was arranged to finance the entiresystem of vrorks provided for in the 1960 Agreement. For its part, Pakistanagreed to provide all future rupee requirements of the Indus Fund. Asbefore, the financing plan provided that any foreign exchange balance wouldbe available for the Tarbela Dam Project, or some other water developmentproject. These arrangements were embodied in the Indus Basin DevelopmentFund (Supplemental) Agreement, 1964.

7. The study provided for in the Supplemental Agreement 1964 was car-ried out by several firms of consulting engineers and a group of Bank staffdirected by a then Executive Director of the Bank, Mr. Pieter Lieftinck1/.The study, issued in 1967, endorsed the high priority given to the TarbelaDam Project by Pakistan and confirmed that the project was not only techni-cally feasible but also economically justified either singly or as part of acomprehensive development program.

8. Tarbela Development Fund Agreement. Discussions subsequently tookplace to consider how the balance of the funds for Tarbela might be providedto supplement the sum likely to be available for transfer from the IndusFund, then estimated at US$324 million. In March 1968, agreement was reachedin principle on the terms of the Tarbela Development Fund Agreement. InApril 1968, tthe Executive Directors approved a resolution authorizing thesignature on behalf of the Bank of the Tarbela Development Fund Agreementwhereby, inter alia, the Bank would become Administrator of the TDF and wouldmake a loan of US$25 million. In May 1968, this agreement had been signed byall the parties and had come into force. In July 1968 the Executive Direc-tors approved the loan of US$25 million (Loan 548-PAK). The other partiesagreed to provide US$149 million equivalent. Pakistan agreed to provide tothe TDF all rupees required to meet local currency costs.

9. Tarbela Project. The Tarbela Dam was designed as an earth androckfill dam across the Indus River, about 40 miles northwest oi Islamabad.The dam, 470 feet high and about 9,000 feet long at its crest, was to beflanked by two auxiliary dams on the left bank. The dams were designed toimpound 11.1 million acre feet (MAF) of water which would provide initially9.3 MAF of live storage. Two spillways were provided at the left abutment,with a capacity sufficient to handle over twice the largest flood on record.

1/ Study of the Water and Power Resources of West Pakistan, prepared by agroup of World Bank staff headed by P. Lieftinck, 3 volumes, July 28,1967.

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10. Four tunnels, each 45 feet in diameter at the upstream end, were tobe cut in the right abutment to divert the flow of the river during construc-tion. Three of these tunnels were intended to serve as power intakes, eachto serve four generating units. The fourth tunnel was to serve as a per-manent irrigation outlet. The Tarbela power plant was to have 12 generatingunits of 175 megawatts (Mw) each, a total of 2,100 Mw. These units andrelated equipment were to be financed separately by Pakistan, with assistancefrom Japan. Five-hundred-kv and 220-kv transmission lines required totransmit the power generated at Tarbela to the main load centers were subse-quently financed with assistance by Canada and China respectively. As adeparture from the original design, Pakistan added at its own cost twotunnels as au'ditional irrigation outlets, one stub tunnel (not yet completed)in the right bank and one tunnel with complete outlet works in the leftbank. Considerable technical details of the design elements are given in thePCR.

11. At the time of the establishment of the TDF the project was estima-ted to cost US$827.5 million equivalent, including US$492 million in foreignexchange. Its ERR was estimated to lie in the range 9-13%.

Implementation

12. After some initial difficulties, the major civil engineering workswere constructed on schedule and by the middle of August 1974 the mainembankment dam had been completed. Progress on the construction of thepowerhouse and installation of the generating plant, to be commissioned fromabout the end of 1975, was also generally on schedule. The impounding of thereservoir began in July 1974. Owing to the complex geological nature of thefoundations, it had been decided to test fill the reservoir slowly and, inorder to facilitate emergency "dumping" of the reservoir, should this provenecessary, the inlet gates to Tunnels 1 and 2, originally intended to operateonly as closure gates, were modified so that they could be both opened andclosed under hydraulic head. Shortly after the filling began, it was discov-ered that the center gate of Tunnel 2 could not be fully closed. Then someof the steel liner plates were ripped off one of the outlet passages ofTunnel 3, whereupon, as a precautionary measure, all the outlet gates toTunnels 3 and 4 were closed, and the reservoir began to fill at an increasingrate. The next incident was a loud noise in the inlet area of Tunnel 2 fol-lowing which water flowed at full bore through the tunnel accompanied bydebris. The decision was then taken to dump the reservoir by opening all thegates of the other tunnels. As the water level was drawn down it wasrevealed that the main damage consisted of the collapse of a section of Tun-nel 2 in the inlet area and the cave-in of the abutment above the area ofcollapse. There was considerable cavitation damage in Tunnels 1 and 2 and,as mentioned above, the liner plates in Tunnel 3 outlet had been ripped off.A number of sink holes were found in the upstream blanket. Seepage throughthe relief wells at the toe of the dam and through the right abutment wasmore than had been expected. Damage of a less serious nature was caused bythe turbulent flows of water in the outlet area downstream of the dam.

13. When the accident occurred the GOP gave instructions that firstpriority should be given to res zoring the works in time for the next fillingof the reservoir and appointed a Cabinet Committee on Tarbela to monitor

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progress and resolve difficulties. The Bank arranged for one of its VicePresidents to lead the work of the Bank, in its capacity as Administrator ofthe Indus and Tarbela Development Funds, in the measures necessary to restorethe situation following the mishaps during the first filling of the reser-voir. He visited Pakistan in October and December 1974 and in February 1975to discuss the required program of remedial measures and to review actionrequired on potential problems. After each of these missions, SpecialReports by the Administrator were sent to the parties of the Indus Fund andTarbela Development Fund Agreements and oral reports were made to the Execu-tive Directors. As soon as the nature and extent of the damage were known, aprogram of repair works was started and the project engineers alo0 prepared aprogram of additional works designed to increase the safety of the projectduring the next filling. Good progress was made with implementing these pro-grams, and all the work which had to be carried out before the reservoiragain began to fill in June 1975 was finished in time. At that point, itappeared that some additional remedial works costing US$62.2 million were allthat remained to be completed. Hitherto, it had been possible to meet thecosts of repair and remedial works from resources remaining in the TDF, pend-ing the completion of final project works; these resources now had to bereplaced to permit final completion of the project.

14. The 1975 revised estimate of the total cost of the project, includ-ing the cost of the aforementioned repairs and additional works, was US$1.02billion, of which US$568 million was foreign exchange. The amount availablein the TDF, including the balance of the Indus Fund, was expected to fallshort of this foreign exchange requirement by around US$50 million, althoughthere was considerable uncertainty as to the precise deficit amount.

15. As soon as a reasonably firm cost estimate was available, the Bank,in its capacity as Administrator of the Indus and Tarbela Development Funds,approached the countries which had previously contributed to these funds. Asa result of this approach, five countries, namely, Australia, Germany, Italy,the United Kingdom and the United States, indicated that they were preparedto make special (additional) contributions, and IDA contributed a credit ofUS$8.0 million (Credit 581-PAK). The Federal Republic of Germany and Canadaprovided assistance under special arrangements. In this manner, the TDF wassupplemented in 1975 with US$44.6 million equivalent, and Pakistan faced theadditional rupee costs and the obligation still (under the 1968 Agreement) toprovide any additional funds to complete the project.

16. Unfortunately, new difficulties came to light shortly after theproject facilities were brought into operation in mid-1975, and these werefollowed by further incidents in 1976 and 1977. These mainly concerned dam-ages to No. 3 stilling basin, sink holes in the upstream face of the mainembankment dam, erosion of the service spillway plunge pool, and a threat tothe foundation of the service spillway flip bucket.

17. By 1978, the total cost of the project had been revised upwards toUS$1.274 billion, requiring further replenishment of TDF. The additionalforeign exchange required was estimated at around US$150 million and theadditional rupee costs at over Rs 1 billion. This led to the (SecondSupplemental) Agreement, 1978, under which further contributions to TDF

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amounting to US$79 million were received from Canada, the Federal Republic ofGermany, Italy, the United Kingdom, and IDA (US$35 million, Credit 771-PAK).In addition, the EEC provided US$14 million, Kuwait US$18 million, SaudiArabia US$60 tillion, and Abu Dhabi US$25 million.

18. From an operational point of view the project was substantiallycompleted by 1978. Irrigation water had been available for some time, andpower generation had begun in May 1977. Yet the completion date kept slip-ping. The auxiliary spillway plunge pool had also experienced erosion, whic'.required work until June 1982, and remedial/repair expenditures on bothplunge pools alone are estimated to have reached approximately US$200 million(PCR, para. 7.03).

19. Total project costs at completion are estimated at US$1.497billion, or 181% of the original estimate. The cost overrun of US$669million arose largely from the need for a remedial/repair program followingthe damages that began in 1974. The proximate causes of the main damages arediscussed in the PCR: material failure of the floor slab of stilling basinNo. 3; loss of bearing rails belonging to the upstream control gates ofTunnels 1 and 2 because fixing bolts had not been tack welded; andunanticipated, uneven and early erosion of the plunge pools' sides andoutlets (para. 7.04). The PCR's account of the primary lessons learned canbe summarized as follows: "the problems for the most part were exceptionaland unforeseeable at the then existing level of knowledge and experi3nce"(para. 7.04) and "in retrospect, the full, potentially damaging, effect ofthe large quantities and high velocities of water on structures on suchcomplex and adverse geology had not been fully appreciated" (para. 14.14).As explained in the Preface, the audit has not attempted to examine theseissues.

Impact

20. The two primary indicators of project impact cited in the PCR arewater released from Tarbela reservoir for irrigation and electric power gene-rated. Over the period 1975/76 to 1982/83, the average quantity of waterreleased annually for irrigation was 9.01 MAF. The gross value of agricul-tural production estimated to have resulted therefrom was Rs 1.732 billionper annum at border prices. Over the period 1976/77 to 1982/83, the averagequantity of power generated annually was 3.1 billion kwh; with the additionof units 5-8 in 1982/83, output in that year reached 5.2 billion kwh, valuedat Rs 6.9 billion at border prices (PCi, para. 9.02, and Annex 6, Table 4).Ten power units had been installed by 1985, when electricity output reached7.9 billion kwh. The PCK estimates the overall ERR at 12.5%.

21. Unfortunately, the method of relating Tarbela's impact to the easilyidentified water releases from, and power generated at, Tarbela is not neces-sarily as straightforward as it might appear, particularly in the case ofagricultural impact, because of physical externalities and the integration ofTarbela operations with those of other Indus Basin water storage and diver-sion operations. This difficulty is explored below in Part II in the courseof reviewing the whole issue of economic evaluation. The same difficulty

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affects also the gauging of impact sustainability, as it is possible that theabove-mentioned benefits are not consistent with groundwater aquifer equili-brium. Notwithstanding this possibility and the expected effects of reser-voir siltation on reducing water releases over time (PCR, para. 8.08), thequestion of impact sustainability hinges principally on maintenance. The PCRgives good reasons for expecting that Tarbela maintenance should sustainproject benefits satisfactorily (PCR, paras. 9.04-9.08).

22. One of the negative byproducts of the huge remedial/repair program,of immediate consequence for project impact, has been the diversion of fundsfrom other programs, particularly from downstream and basin-wide investmentsin irrigation and drainage works as well as from water management, extension,and other agricultural services (PCR, para. 2.07).

23. The direct impact of Tarbela on emerging drainage problems in theIndus Basin has been difficult to assess . Even before Tarbela the greatlyincreased continuous use of Indus water for irrigation (from storage ordirect river diversions) for over a century (up to about 1960) had signifi-cantly altered the hydrological balance of the Basin. Seepage losses fromirrigation canals, distributaries, minors, and watercourses and deep percola-tions from the irrigated lands had resulted in a gradual upward movement ofthe groundwater table, bringing with it critical problems of waterlogging andsalinity over a vast area. Waterlogging is widespread throughout Punjab andSind provinces, where most of the country's food and fiber crops are pro-duced. In the early 1900s, the watertable was generally more than 15 meters(m) below the surface throughout the Indus Plain. However, by 1978 (when theIndus Basin Salinity Survey was completed), the watertable in 22% of theIndus Basin was within 1.8 m of the surface, and in an additional 30% within3 m. A comprehensive survey conducted in 1961 estimated that about 40,000 baof land were being lost annually to agricultural production due to waterlogg-ing and/or salinity. Although these estimates have not been updated, avail-able information suggests that land abandonment in severely waterlogged areasis continuing. Operation of the Tarbela reservoir is believed to havefurther aggravated these conditions. Nevertheless, certain studies discussedbelow (para. 28) estimate that Tarbela's net impact on groundwater levels hasbeen favorable because it has also helped to replenish groundwater depletedby extens've private tubewell development.

24. In the early 1960s, to relieve Pakistan's waterlogging and salinityproblems, GOP initiated a series of salinity control and reclamation projects(SCARP) with public tubewell (TW) installation for drainage and supplementalirrigation in usable fresh groundwater (FGW) areas. By 1984, about 12,000such TWs had been installed, with approximately 90% of them in Punjab, andmost of the remainder in Sind. 'The SCARP experience has demonstrated thatTWs provide significant drainage relief when properly designed and effi-ciently operated. However, because of management and financing problemsassociated with TW operations, along with the rapid growth of private tube-well investment in these FGW areas, GOP and Bank policy now call for privatedevelopment only in these areas. Most of these problems were anticipated inthe Lieftinck Report, which recognized that many complementary investments in

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drainage and other activities would be required to effectively utilizeTarbela's storage waters. Currently, the principal need is to address thedrainage problem in saline groundwater (SGW) areas. The Bank is assistingPakistan in implementing several drainage and tubewell projects to alleviatethe waterlogging and salinity problem. These projects include: Khairpur(Cr. 678-PAK); SCARP VI (Cr. 754-PAK); SCARP Mardan (Cr. 877-PAK); FourthDrainage (Cr. 1375-PAK); and the Left Bank Outfall Drain (LBOD) (Cr.1532-PAK).

II. MAIN ISSUES

A. Economic Evaluation

25. The PCR's economic evaluation of Tarbela gives a favorable reesti-mated ERA of 12.5%. It attributes approximately three quarters of projectbenefits to power and the remainder to agriculture, which is the reverse ofthe proportions between power and agricultural benefits as estimated exante. The principal reason for this reversal in benefit proportions was theunexpectedly high energy (oil) prices enjoyed by the project during its firstdecade of operation. Since preparation of the PCR, however, energy priceshave fallen, and power output beyond the first decade of the project's lifehas diminished in value relative to the estimate made in the PCR. Yet themore problematic aspect of the economic evaluation lies not with power butwith the agricultural side of Tarbela. Other work (involving the Indus BasinModel) carried out in the Bank on developing a more comprehensive conceptualframework for evaluating water resource investments - in particular,Tarbela's irrigation benefits - claims a sipnificantly greater agriculturalbenefit than that identified in the PCR.L/ Because the likely neededadjustments to power and agricultural benefits largely offset one another,the audit does not see cause to revise the project ERR.

26. Power. The PCR's pricing of hydroelectric power benefits, as withother benefits and costs, was based on the Bank's commodity price forecastsof July 1982. The recent sharp downward trend in oil prices leaves such anevaluation somewhat exposed; the Bank's April 1986 forecast of future petro-leum prices is about 60% lower than that made in July 1982. But even withthis drastic revision and an updating of actual prices between 1983 and 1986,the project ERR would drop only to 10.2%, indicating that such changes stillleave the project economically viable. It also confirms the PCR's judgmentsabout the relative insensitivity of project ERR to such price risks (PCR,para. 12.06).3/ Furthermore, the risk that the PCR has overstated power

2/ John H. Duloy and Gerald T. O'Mara, "Issues of Efficiency andInterdependence in Water Resource Investments: Lessons from the IndusBasin of Pakistan", World Bank Staff Working Papers, Number 665,September 1983.

3/ This result also confirms, incidently, that the economic viability ofthe Tarbela project was preserved, in the face of large cost overruns,largely by the unexpectedly high energy prices ruling during the firstdecade of its operation.

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unit values it offset to some extent by its having understated the likelyquantities of power output. For the PCR chose not to take into account thenet benefits of power developments subsequent to Unit 10 on Tunnel No. 2:namely, power Units 11, 12, 13 and 14 proposed for installation on TunnelNo. 3 beginning in 1989, and the further power units under study for instal-lation on Tunnel No. 4. These additions would raise the rated capacity ofpower installations from the 1,750 Mv covered by the PCR to over 2,800 Mw inthe first instance, and possibly to beyond 3,800 Mw. The audit is reluctantto explore the impact of these additions--especially the later ones--in anydetail, because it does not have the necessary information. Some roughcalculations suggest, however, that these late additions to power outputwould not have any substantial impact on the overall project ERR.

27. Note in passing that the PCR and PPAM use a least cost alternative(economic) approach to valuing electric power, rather than a revenue(financial) approach; both methodologies have been used on Bank power pro-jects. The least cost alternative approach is defensible if there is anadequate, sustained market demand for the product produced, a requirementwhich is amply m,ht in the case of Tarbela's power. But there are alsopragmatic reasons for using this approach exclusively for Tarbela. First,the comparison and aggregation of power and irrigation benefits demandreasonably conformable measures of them, preferably economic ones. Second,the TDF financed neither power generation equipment nor irrigation canalworks, and the various loan and credit agreements contain no specificcovenants on cost recovery; in consequence, the PCR provides no informationon Tarbela-generated financial revenues from either power or irrigation.

28. Irrigation. Beginninig in 1975, the Bank became involved in manag-ing a UNDP-funded study of water resource planning for the Indus Basin. Aspart of this effort, WAPDA collected basic data from 2,000 farms over theperiod 1976/77 and provided and analyzed hydrologic and other physicalresource data on irrigation operations in the basin. A resulting publicationby Duloy and O'Mara, which examines the conjunctive uses of surface andground waters for irrigation, concludes that

rigorous appraisal of water resource investments with significantenvironmental impact should be done with reference to cases forwhich the environmental impact has been taken into account. Forthe example of Tarbela Dam, neglect of environmental impacts, whichare favorable, leads to an understatement of incremental benefitsby 38 percent at domestic prices and 59 percent at economicprices. 4/

This observation is extremely relevant because the PCR has evaluated theagricultural impact of Tarbela as if there are no important environmentalimpacts (externalities) to be considered.

4/ Duloy and O'Mara, op cit, p.vi.

29. Instead, the PCR identifies a discrete part of the IndusBasin-that pertaining to 10 Tarbela command canals5/--as being the onlypart of the basin subject to Tarbela influence or of relevance for theevaluation. It first establishes a statistical relationship betweenhistorical rabi6/ cropped area in this part of the basin and historicalquantities of canal and (separately) tubewell water delivered therein forirrigation. It then uses the estimated parameter associated with canal waterto predict what cropped area changes would likely be associated with theirrigation water releases from Tarbela. It derives the incremental benefitsof this predicted change in area cropped by applying a particular(bullock-based) technology for producing crops (using wheat as a proxy forall crops). This analysis conforms with most bank attempts to evaluate majorwater resource developments, insofar as it does not attempt to deal withexternalities.7/

30. In contrast, the analysis by Duloy and O'Mara (hereinafter DOM),which insists on accommodating Tarbela's "environmental impact", attempts toevaluate the impact of Tarbela on the behavior and management of irrigationwater resources in the whole basin and hence on agricultural activitiesbasin-wide. Hence, DOM argue that:

(a) water releases at Tarbela for irrigation have an influence on waterreleases or diversions for irrigation at other structural controlpoints in the basin, not only during rabi, but during other seasonsas well;

(b) groundwater use, both within the gravity command of Tarbela andthroughout the rest of the basin, is heavily influenced by releasingsurface water into hundreds of miles of leaky canals and by percola-tion from other watercourses and irrigated fields, giving rise toother benefits and costs.

In addition, DOM argue that:

(c) the evaluation of the contribution of any structural control pointmust account for whether or not the groundwater resources are beingmanaged in hydrologic balance; and

5/ To forestall any belated confusion as to the scope of the Tarbelaproject, recall that it comprised only the dam and immediately adjacentworks. It did not extend to any investments in canal distributionsystems. The 10 so-called Tarbela command canals were already inexistence.

6/ A term for the winter growing reason: October 15 to April 15.

7/ The Region has essentially confirmed this observation by pointing outthat it consulted closely with the Bank's Operational Policy Staff inthe course of determining the PCR's method of valuing Tarbela'sagricutural benefits.

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(d) the evaluation should attribute to Tarbela any rents to other long-term investments, e.g., in tractor technology, that are stimulatedby the increased availability of canal and ground water.

Taking account of these four arguments demands much more information, ofcourse, than is required by the PCR's evaluation, and the adequacy of suchinformation has been a point of much dispute for critics of the DOManalysis. Nevertheless, the audit believes that these arguments offersignificant improvements to the conceptual framework of evaluation. There isalso the promise of other improvements. For example, the DOM analysisexamines the likely effects on the Tarbela evaluation of introducingradically different policies regarding distribution of incremental suppliesof surface water within the Indus Basin (discussed below in paras. 37-39).But the four arguments (a) through (d) are certainly relevant to anevaluation of Tarbela under management policies pursued so far. Somecomparison between the PCR and DOM estimates ought then to be instructive.Because the DOM analyses do not handle project public costs and consequentlydo not give rise to internal rates of return, the direct comparison has to belimited to estimated incremental irrigation benefits of Tarbela, withfarmgate prices at domestic prices but with evaluation at border prices.

31. After growing rapidly between 1976 and 1979, the PCR's estimates ofagricultural value-added during the 18-year period 1980-1997 stabilize in therange Rs 1.484 billion to Rs 1.921 billion measured in mid-FY83 currencyvalues; their average over this 18-year period is Rs 1.701 billion. Afterpeaking in 1995-97, the estimates decline under the lagged influence ofdeclining irrigation releases caused by siltation of the Tarbela reservoir.In comparison, the DOM estimate of long-run value-added, allowing for theeffect of complementary farm investments (but not the imposition of ground-water balance), is Rs 1.577 billion annually.8/ The DOM estimate withgroundwater balance imposed is much higher--Rs 3.828 billion--indicating thatthe effect of Tarbela on the Basin aquifer has been stabilizing.

32. Because a groundwater balance of some kind is inevitable in thelong run, the audit favors the higher value-added estimate of DOM, which is2.25 times the average estimate (for 1980-97) quoted for the PCR. Were thePCR estimates of agricultural value added for the entire project period (PCRAnnex 6, Table 4 - agricultural production less agricultural costs) increasedby such a factor of 2.25 and power benefits adjusted only for the lowerenergy prices noted in para. 26, the project ERR would be 12.6%, and theratio of power benefits to agricultural benefits would be about 1:1.1.

8/ This figure is based on the entry Rs 885.8 million, for the differenceD-C in Table 11 of Duloy and O'Mara, op. cit., which is measured in 1977rupees. The Rs 885.8 million has been re-expressed above in mid-FY83rupees. For those who are unfamiliar with the term "groundwaterbalance," it reans that the groundwater resource experiences no netadditions or withdrawals on average....in short, that the level of watertable is stabilized.

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33. Comments from the Regional staff of the Bank indicate that they donot share this willingness to defer fully to the DOM estimates. Althoughthey have since made considerable efforts to adopt the DOM model to assist insome of their recent operational work, they still have many seriousreservations about its utility, unless the model and its assumptions areadapted (further) for project area specifiL conditions. They areparticularly concerned about lack of information on groundwater rechargerates with and without Tarbela, and the many specific assumptions and datainput needed to reliably support the DOM computer analysis. They point outthat others in the Bank also shared their reservations about DOM's originalmodel.9/

34. The Borrower's comments in the Appendix include a number of otherobservations on project benefits: the possibilities that a more mechanizedfarm technology (than that posited in the PCR) would be more appropriate,that the PCR's wheat yields and wheat prices have been underestimated, andthat fisheries benefits ought to be added. The DOM analysis already incorpo-rates the benefits of complementary farm investments in mechanization. Ithas not been possible for the audit to adjust the (DOM) findings for anyrecent developments in wheat yields or prices. Regarding wheat yields, how-ever, the Borrower is placing too much emphasis on the wheat yields of whatappear to be progressive farmers who make up only a small proportion of wheatgrowers. Regarding wheat prices, the PCR assumed import-parity pricesthrough 1984-85 and a linear transition to export-parity prices through1990. The Borrower has suggested the use of import-parity prices through1990. The audit believes the PCR assumptions to be a more accurate reflec-tion of trends in Pakistan's wheat production. Fishery benefits, believed tobe relatively small, have not been quantified.

35. Summing up. Two points arise out of the foregoing comments.First, the PCR evaluation has likely underestimated the agricultural benefitsof Tarbela and likely overestimated its power benefits, but with littleeffect on its ERR estimate. Consequently, the audit accepts the PCR's 12.5%ERR estimate as a fairly safe one.

36. Second, and more important, the PCR evaluation reflects a decidedlydifferent level of effort for an ex post economic analysis compared with whatwould be expected for an ex ante analysis. While such a state of affairs isa common, acceptable economy for most projects, a more symmetrical level ofeffort ought to be justified, as a matter of policy, for giant projects. Athorough ex post economic evaluation of projects like Tarbela ought to beseen as a necessary companion to the feasibility study of any subsequentgiant project in the same basin in which the Bank has an interest, such as,for instance, Kalabagh Dam. Such an evaluation would provide, in a low risksetting, a detailed appreciation of the issues to be addressed, as well asthe appropriate framework for evaluating minor projects in the same basin.

9/ The Region notes that some of its main concerns with the operationalusefulness of the DOM model are outlined in a memo from the agriculturalDivision concerned to Duloy, dated 12/2/82. It notes further that OEDraised similar concerns in a Study Audit Memorandum, dated 6/5/85,addressed to the Bank's Research Administrator, Economics and ResearchStaff.

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Actually, South Asia Projects Department has worked closely with Duloy andO'Mara and is currently making a major effort to modify the DOM model forapplication in some of its operational work, such as evaluating the agricul-tural impact of Kalabagh. The Region did not use the model in the TarbelaPCR because of its reservations noted previously in para. 33, and because ofthe timing of the two analyses. At the time of preparing the PCR, the Regionfelt that the DOM was still too much in the developmental stage. Neverthe-less, one should not be too surprised at finding analytical shortcuts in PCRevaluations, given the Bank's staff and other resource constraints forexecuting PCRs. The Bank should reexamine its expectations for completionreports in the case of major, strategic projects, as a matter of policy.

B. Irrigation Water Allocation

37. A major constraint on Tarbela's agricultural impact has been theadministered nature of Indus Basin surface water allocations among Pakistan'sProvinces, the uncertainty as to "final" allocations of additions to thisresource, and the uncertainties this has generated in the minds of ProvincialGovernments and farmers for their irrigation investment decisions. This hasbeen a long standing problem for Pakistan, as are similar aspects of waterallocation for virtually all countries. The issue is that agriculturalbenefits of Tarbela could be increased considerably if water supplies thatare surplus to historical water rights could be allocated according toregional market demand (given enabling drainage investments in saline ground-water areas), rather than according to statute. Attention to this policyaspect of water development impact in Pakistan is of much more consequencethan recognizing only the size of project impact under existing constraints.

38. Currently, under post-Tarbela conditions, only limited gains inproduction are possible from increasing canal water deliveries to salinegroundwater (SGW) areas in the Indus Basin because of the need of these areasfor large investments in drainage. Given this drainage, farmers in SGW areascan generally make better use of additional water than can farmers in freshgroundwater areas. One factor contributing to high productivity in the SGWareas of Sind Province, for instance, is their comparative advantage in riceproduction. The DOM analyses estimate that giving greater favor to SGW areasin water allocation could increase agricultural value added in the Basin(relative to actual post-Tarbela conditions) by some 17% to 20%, and increaseemployment by some 14. to 16%.10/

39. It is particularly important for the Bank, or external agenciesgenerally, to address such sensitive issues as this one on water allocation,whenever such agencies have the confidence of Government. Internal agenciesneed policy guidance even to begin the analysis. Hence, it was highlycommendable of the UNDP and the Bank to participate with WAPDA in carrying

10/ Gerald T. O'Mara and John R. Liloy, "Modelling Efficient WaterAllocation in a Conjunctive Use Regime: The Indus Basin of Pakistan,"Water Resources Research, Vol. 20, No. 11, November 1984. Note that theBorrower has listed a number of reservations about this aspect of theDOM analyses (Appendix, para. 5).

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out the kind of study which gave rise to the DOM and like analyses dealingwith Tarbela's impact on agriculture. Its results, notwithstanding theircontroversial nature, are suggestive that changes in water allocation policywould be highly complementary with further engineering investments in irriga-tion water supply. Devising desirable policy changes that are politicallyacceptable is a notable challenge. The invention of such options deserves atleast as much feasibility study as post-Tarbela investments in developmenthardware.1 !/

C. Water Resource Planning

40. The water allocation problem just reviewed is part of the widerproblem of water development planning that was addressed in the Lieftinckstudy (PPAM para. 7). That study was undertaken to identify investmentpriorities among the various components of the water and power system.Recognizing the high degree of interdependence among the differentdevelopment and investment decisions, the study attempted carefully toexamine all aspects of agriculture, including ground and surface water, andthe energy sector. It was concerned about waterlogging and salinity, theneed to integrate ground and surface water development, and the need tointegrate the planning and operation of hydro- and other power development.Although the study put forth the construction of Tarbela as the centerpieceof its proposed program, emphasizing that its completion by 1975/76 wascrucial to the overall program, there was equal zoncern for the program'sother pieces. Taken together, they represented a major exercise in sectorplanning.

41. The following assessment of this overall planning effort has beentaken from OED's recent broad review of the Bank's relationship with Pakistanover the period 1960 to 1984, which offers additional, wider insights intothe Tarbela experience. While the planning effort receives high praise as"state of the art", detailed and innovative, the assessment is not too san-guine about the outcome of such efforts when they are dominated by externalteams, as was the case with this study:

"Participation by the Bank in the Indus Basin Development Project,and in subsequent support for water resource development--includingirrigation, drainage and salinity control--has been fundamental tothe relatively good performance of Pakistan agriculture."

"But neither the engineering success nor the economic performanceof Tarbela represent a strong vote of confidence in the waterresource planning process. The project was plagued by unantici-pated engineering problems and large cost overruns. The acceptablerate of return achieved by the project, in spite of these deficien-cies, appears to be more a reflection of the unanticipated in-creases in energy prices during the 1970s than a testimony to the

11/ The Region comments that it has used various forums of high leveldiscussion in the past to induce GOP to address this issue, and that itintends to continue its efforts.

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skill or precision of the planning process. In retrospect, it isclear that the political commitments made in connection with set-tlement of the Indus Basin disputes between India and Pakistan havetended to dominate engineering and economic considerations."

"The Indus Basin is one nf the world's great centers of irrigatedagriculture. The realizatio.: of its production potential has, how-ever, been inhibited by the difficulty of arriving at a technicaland institutionally viable system for controlling waterlogging andsalinity. Much effort has been spent over the past several decadesby the Government, the U.S. assistance agency, and the World Bankto find acceptable methods for dealing with these problems. Aftertwo decades of controversy and delay, and many studies, there nowappears to be substantial agreement between the Government and theBank on a strategy covering areas that are not saline: publictubewells would be gradually phased out and replaced by privatelymanaged tubewells, plus there would be a program of improved canaldesign and more efficient on-farm water management. It appears,however, that no long-run program has yet been agreed on for areaswith saline water. Nor is it clear that effective arrangementshave been developed to replace the public management of the largetubewells by private management. As a general conclusion, verylarge investment will be required over the next two decades tomaintain or er-iance agricultural productivity in the Indus Basin.Unfortunately, the development of the institutional capacity toconduct research and training in Pakistan on water resourceengineering and management has not been an important area of Bankconcern. As a result, it is not at all clear that the viableinstitutional innovations necessary to organize and manage "thegreater Indus Valley water machine" have yet been designed, letalone implemented."

"The Bank's effectiveness..., depends on the nature of thecountry's problems. The Bank can mobilize funds and it canorganize excellent technical studies, and it can, on the basis ofstudies or experience, provide sound advice on a range of sub-jects. When its rational economic approach is relevant, the Bankcan make a strong contribution. When problems are more involved inlocal, social, and political factors, the Bank's contribution maybe less relevant and helpful. The fact that its presence in thecountry is limited, that missions are brief and busy, and thatstaff is frequently rotated, all tend to make strong involvement inthe local environment difficult. This in turn tends to keep Bankadvice at the level of principle and technique, in the commonlanguage of the international technician. While this approach hasits advantage in keeping the Bank at arm's length, so to speak,where staff may be able to develop a more detached view, it may bea bar to the kind of deeper understanding which may be necessary

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for effective assistance in some types of institutionaldevelopment."12/

D. Cofinancing Through Development Funds

42. A large number of countries or entities joined Pakistan in contrib-uting resources to TDF so that the Baak as Administrator could more easilysupervise efficient procurement and facilitate disbursement on behalf of theproject. The TDF, and the IBDF before it, have provided ample evidence ofthe efficacy of creating special development funds to finance giant civilworks projects. The related arrangement--having the Bank serve as Admini-strator of such a fund--deserves to be reviewed by Bank's management if it isto be used again, to ensure that the Bank's accountability for supervision isclearly defined and seen to be at least commensurate with the accountabilityestablished for other Bazk-financed projects.

43. A surprise to the audit was finding that formal supervision reportswith a format comparable to those produced for other projeets in the Bankdate only from August 29, 1980. Consequently, it is not readily discerniblehow the lines of responsibility for Tarbela were drawn beyond South AsiaRegion over the years, i.e. how the Bank shared its accountability inter-nally, especially in the period when there was no emergency. Prior to August1980, the only reports of Bank supervision missions following the 1974 firstfilling of the dam were those of the Bank as Administrator and those producedin the form of Back-to-office reports not widely circulated. Except for theSpecial Reports by the Administrator issued between October 1974 and March1976 following high-level Bank missions, the Administrator's reports weregenerally drafted by the Bank's consultants (Gibb) and finalized by Bankstaff. The fact that these latter reports did not serve as an adequate sub-stitute for a full Bank supervision report is reflected in the emergence offormal supervision reports in 1980 alongside the Administrator's reports.

44. Delegation of a large part of the Administrator's project super-vision responsibility for Tarbela to an engineering consultant and to a firmof chartered accountants made sense, given the size of the task, and theintensive technical supervision which they provided has been highlyregarded. This still left some role for Bank staff, which grew enormouslyduring the early phase of remedial/repair, and it is this role and how itmight be organized under similar but more normal circumstances in the futurethat deserves examination.

45. The audit believes that the Bank would have mdnaged its responsi-bilities more consistently had it tried in other respects to treat Tarbelalike any other project within the Bank from the beginning, and designated aproject officer who prepared regular internal reports which were subject tothe same review as other supervision reports. Granted that such reports

12/ World Bank in Pakistan: Review of a Relationship 1960-84, OED ReportNo. 6804, Volume 1 dated January 27, 1986. The paragraphs excerptedare, in sequence, Nos. 2.42, 2.44, 2.45 on irrigation, and No. 2.78 onenergy.

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would have been different--the Administrator's Reports prepared by the con-sultant covered much of the ground already, and had to be addressed to allmembers of TDF--but at least such internal supervision reports could havefocussed on the kinds of issues brought to the Bank by the consultant fordecision. It seems to have been essential for the Bank to have at least onetechnical staff member to react with its consultant on a full-time basis. Inthe absence of the kind of structured information provided by the Bank'snormal supervision process for most of the project's life, it has been diffi-cult for the audit to determine how Bank staff shared accountability for theBank's responsibilities as Fund Administrator.

46. Note again that this "issue" arises from the unique character ofthe Bank's supervision arrangements up to 1980. The PCR compliments theBank's performance (paras. 13.01-13.04), especially its role during the earlyphase of remedial/repair (when many outstanding Bank staff were conscript¢8to work on Tarbela), and the audit has found no evidence that would disputethese compliments. But there is clearly a procedural lesson here for theBank in case it again acts as Administrator of a special fund.

E. Priorities in Project Emergencies

47. What stands out above all else in the Tarbela saga is the way theresponsible parties extricated the project from the threat of even more seri-ous damages than it sustained in the 1974 tunnel collapse and in subsequentdifficulties. The PCR notes that

(a) the Borrower (GOP), which implemented the project through WAPDA,gave the project high priority (PCR, para. 11.02); and

(b) it was clearly important that when the great emergency of the tun-nel failure occurred in 1974, attention was forussed on repairrather than on assessing blame (PCR, para. 13.04).

The disciplined behavior observed by GOP in establishing the right climatewithin which the other parties could respond to this emergency was by far themost significant contribution toward getting the priorities right. GOPquickly established a special Cabinet Committee to provide institutional sup-port and quick decisions at the highest level, but it also sustained the pri-orities in favor of repair and completion over a long period. A measure ofthe strain imposed on GOP following the emergency can be gauged from the factthat local currency expenditures on the proiect from 1975 until 1982 totalledUS$269 million equivalent, compared with US$384 million equivalent beforehand(PCR, para. 10.06). The project was also continuing to absorb after 1974 asignificant share of available foreign aid and goodwill. Much of these post-1974 expenditures was unexpected, and many other government activities had tobe sacrificed for a whole decade to bring the project to completion. Thisdisciplined commitment to the project, together with the priorities forrepair rather than blame, must rank as an outstanding political and technicalachievement and a model for how borrowers and financiers should respond toemergency situations in large civil works.

- 17 -U.P.M

Water And Power Development Authority

Teephosol_ 212825 Dams & Coord. Dltision

T&g,mui WAPDA LAHORE 511-VAPDA House

Lahore

___ _30/_30_5_ D$ June lb, 1986

Mr Otto MaissActing DirectorOperations Evaluation Department1818 H Street, N.W.Washington, D.C. 20433U.S.A.

Project Performance Audit Report-fki*'tan: Far ea Dam Poje00(LoanAi4S . and Credits 581- and771-PAIKL -

I am directed to refer to your letter dated

April 9, 1986 on the subject matter and to enclose a

oopy of WAPDA Comments on the draft of Project Per-

formance Audit Memorandum for your further appropriate

action.

General ManagerDams and Coordination

Encls-as above

cc: Ministry of Water & Power, Government ofPakistan, Islamabad w/en¢l

Attention: Mr Navaid All NasriJoint Secretary (W)with reference to TelexMessage No.UA-8(257)/86dated June 3, 1986 N

I

bG~~~L

Nl "S

X~~~~~~ IT

1,,I

- 19 - ,Appendix

COMMENTS ON PROJECT PERFORMANCE AUDIT REPORT PAKISTANTARBELA DAM PROJECT (LOAN 548 & CREDIT 581 & 771 PAK)

.The PCR economic evaluation of Tarbela Dam gives Economic

'Rate of Return (ERR) of 12.5%. The study has attributed 75%

Benefits to power and remaining to water as a result of crop

production. As pointed out in the project performance audit

report the rate of return can be improved by increasing the

incremental benefits by 59% due to environmental impact. Furthecrmc,e.

we have some observations which, if adopted,,could further improve

*tJ,e internal economic rate of return (IERR).

i. CROP YIELDS

* .The ultimate yields of wheat have been projected at 3 tons

per hectare in 1994-95. A recent short survey undertaken by (P&I)

WApda in Sahiwal and Faisalabad districts has revealed that progre-

ssive farmers are achieving yields in the range of 3 to 4 tons per

li,ctare, which indicates that the projected yield of 3 tons per

hectare is on the lower side in view of multiplier impact of

improve,1 technological pattern by majority of farmers.

2. ECONOMIC PRICE OF WHEAT

The economic price of wheat is based on the assumption that

wheat would be a net export commodity from 1984 onward. Ilowever,

Pakistan has not yet emerged as a net exporter of wheat. We view

that Pakistan would not be able to become a net exporter of wheat

till 1990, considering population growth rate of more than 3% and

immense need of buffer stocks from security point of view. It -is apprc-

prtate therefore tocompute economic prices of wheat on the basis of

import commodity upto 1990. Import parity price for 1982-83

according to our calculations was in the range of Rs.2700/Ton.

We therefore, feel that the prices of wheat may be adjusted upward

accordingly which will also lead to greater value of production

and consequently IERR.

- 20 -Appendix

3. INPUT AND OUTPUT RELATIONSHIP

The analysis by PCR has been based on Bullock Technology.

We agree with the co-offlotents used In the analysis, however,

the techrology1has changed. A recent survey by f&I shows that

ioo farmers are using threshers. Use of Tractor is now

prevAillng In preparatory tillage almost all over in Fresh ground-

water areas, whil, nearly.50% farmers are using tractor in saline

.ar,as for Land preparation. Thus the adoption of improved

toehnology may also result in higher returns.

4.. FISHERIES DEVELOPMENI

. . The benefits from fisheries development in the dam lake have

not been Included In the benefit stream. A realistic estimate of

benefits should be included.RUVISED ESTIMATE OF IERR

5.v The report under review has pointed out by referring to the

DOM'analysis 7that given the drainage, and preference to SGW areas

in water allocation, the value added in the basin could increase

by some 17 to 20% and employment by some i4 to 16%.' However,

the assumptions and input data on which this observation is based

are not given In thexr paper. In order to make meaningful comments

on this statement, a copy of the print out of the Model along with

input data and assumption is needed. There are, however, some

general observations in favour of FGW areas viz-a-viz SGW areas

and are detailed as under :-

a/ It is generally observed that in certain areas ofsaline water zone, the Drainage costs are exorbitantlyhigh and it is considered economically unviable tomake any investments in such areas. Therefore, thequestion of water allocation to such areas ismeaningless.

1/ Gerald T.O'Mara and John H. Duloy, NModelling Efficientwaler Allocation in a Conjunctive Use Regime: The IndusBasin of Pakistan", Water Resources Research, Vol.20 No.11,November, 1984.

-21 - Apendix

b/ Pumping of water In fresh groundwater areas willnecessitate the reeharge of such areas by supplyingadditional canal water.

c/ Comparative advar.tage in the production of rice inSGW area has been argued in the report. It way bepointed- out that most of the SGW areas are suitablefor production of coarse rice, whose comparativeprice is very low.

d/ In saline groundwater areas the cropping pattern aregenerally of specilic nature, i.e. only -hose cropssuitable for saline zone can be grown whereas In FGWareas, we have the option of determining the optimalcropping pattern based on comparative advantage ofvarious competing crops under domestic as well asinternational prices.

e/ Drainage is a cost in the production prooess. In FGWareas, we incur cost on physical inputs only forcrop production whereas in SGW areas drainage shouldbe considered as additional cost and therefore thenet proritability per cropped acre wi1l naturallybe much lower in SGW as compared to PGW areas.

G1,NERAL COM1X:E'rS6 ". 'rhe DOM Report assumes that tractor technology would be

stimulated by the increased availability of canal and groundwater.

This should not be considered as an entirely dependent benefit

because tractor technology would have developed as a part of

global progress even without getting stimulation from increased

availability of canal water.

7. Para 32 of Project Performance Audit Memorandum (Page 19)

refers to irrigation water allocation among Pakistan's l'rovinws.

It is coiisidered that the excerpt from the paragraph reproduced

below be suitably modified to omit reference to phrases such as

"politicized n.ature" and "lack of decision on final allocation" :-

"A major constraint on Tarbela's agriculture impacthas been the thoroughly politicized nature of IndusBasin surface water allocations among Pakistan'sProvinces, the lack of decisions still on "final"allocations of additions to this resource , and theuncertainties this has generated in the minds ofProvincial Governments and farmers for their irriga-tion investment decisions. "

- 22 - Appendix

8, Similarly, In para 34 reference to *politically" deadlocked

*issues as this one on water allocation" may be omitted.* * ; ROJECT cOMM}T-UllN . r * OR

Last Para of Chapter VII of Project Completion Report mentions

about the damage caused by dislodging of concrete block from central

dividing wall of stilling basin of Tunnel No. 3. Damaged basin floor

was reDaired by O&M Crews in Jan. 1985 using "Hydrocrete", an under-

water concrete product. Later towards the end of i985, the

stilling basin was inspected in the dry when dowatering was

possible after construction of a downstream cofferdam in connection

Wlth Powerhouse uk;xtension Project and the underwater repairs were

found in sound condition.

10. Para 8.07(C) of P.C.R refers to strengthening of hoist towers

for outlet gates of Tunnels 3,4 and 5 as set forth in TAMS report

of May 1982. It may be noted that strengthening of hoist tower

for Tunnel 4 outlet gate only is envisaged at present. Tunnel 5

* hoist 'towers are conventional reinforced concrete structures with

intermediate piers already provided. Work on construction of power

units No. 11 to 14 on Tunnel No. 3 is schleduled to commence in

the fall of 1986 and would be completed by 1990. Strengthening of

hoist towers on Tunnel 3 is, therefore, not considered essential

for the short intervening period.

.11. All in all, we agree 'with the finding of PCR. However,

updating the information base regarding crop yields, economic

prices of wheat and inclusion of fisheries benefits in the stream

.of benefits as well as environmental impact will further enhance

the economic benefits & IERR estimated at 12.5% in the PCR.

- 23 -

CONFIDENTIAL

PAKISTAN

TARBELA DAM PROJECT


April 1984

Irrigation I DivisionSouth Asia Projects Department

( -"I ,

-3 ~ ~ ~ ~ fi 1

hef' >,fo ,vk/A /_

- 25 -

PAKISTAN

TARBELA DAI PROJECT


CHAPTER I. INTRODUCTION

1.01 The Indus and Its tributaries have sustained civilizations for 4,500years, remaining as vital to present day Pakistan as they were to ilarappa andMoenjadaro four millenia ago. Since rainfall is low and variable over mostof the country, irrigatikn is a necessity for a viable agriculture. Of atotal cultivated area of about 20 M ha (25% of the land area), some 12 M haare serviced by canal irrigation, 4.5 M ha by small streams, springs, wellsand seasonal flooding, and only 3.5 M ha are cultivated under often veryuncertain barani (rainfed) conditions. Indicative of its importance, it isestimated that irrigated agriculture accounts for more than 90% of valueadded in the sector (equivalent to almost 30% of GDP), supports directly orindirectly perhaps 60-70% of the population, and contributes to almost twothirds of total exports.

1.02 Virtually the entire canal irrigated system derives its supplies fromthe Indus and its tributaries, and the canals, dams and barrages constructedsince 1859 represent the largest contiguous and interdependent irrigationsystem in the world. Besides the rivers, this system currently comprises twomajor storage dams, nineteen barrages-cum-headworks, twelve major link canalsto transfer water between rivers, forty three canal commands and about 89,000water courses. The combined length of the canal system is about 58,500 km(36,350 miles), of the water courses and farm channels about 1.6 M km (1.0 Mmiles) and of the surface drain system about 14,400 km (8,950 miles). Inaddition to the canal system, many public and smaller private tubewells, bothwithin and outside the canal commanded areas, help control water levels andprovide additional irrigation supplies based on the vast aquifer which under-lies the Indus plain.

1.03 Access to the waters of the Indus system is therefore of crucialnational importance. While over 90% of the fertile Indus plain lies withinPakistan, its share of the combined catchment area of 950,000 sq km (367,000,sq miles) is only 60%, with the headwaters of all the major rivers risingbeyond Pakistan's borders. Furthermore, given the low rainfall levels, themajor part of the system's mean annual run-off (81 BCM or 66 MAF at Tarbela)is derived from the mountains to the north and west (the Himalayas, theParrios and the Hindukush) which lie primarily in India, Tibet, Kashmir andAfghanistan.

- 26 -

CHAPTER II. BACKGROUND

2.01 Partition of the Indian Sub-Continent in 1947 divided the thenunified irrigation system, leaving the headwaters of the Punjab tributariesin India. As a result, extensive areas of irrigated land in Pakistan, espe-cially in the water short Sutlej commands, were placed at risk. That thedanger was real was demonstrated as early as April 1948 when India tookinitial steps to divert the waters of the three eastern-most tributaries,the Sutlej, the Beas and the Ravi.

2.02 The Indus Water Treaty. The Indian action created a crisis betweenthe two nations threatening to add a perennial bone of contention to theiralready troubled relations. That this was averted owed much to the influenceof the World Bank and its role in facilitating the negotiations which led upto the 1960 Indus Water Treaty. The two countries accepted the Bank's offerto help with the dispute in 1952. In 1954, tentative proposals were made forthe division of the waters and the firm of Tippets-AbbettMcCarthy-Stratton(TAKS) was retained to provide technical assistance and to carry outhydrologic studies of the proposed plan. These studies established the basicadequacy of the plan, examined a number of possible alternatives and demon-strated the need for reservoir capacity to store surplus waters of the west-ern rivers for timely release and conveyance to irrigated areas in Pakistan.

2.03 In the spring of 1959 an agreement in principle was reached on(i) the basic division of the Indus waters, (ii) the general features of theworks to be constructed in Pakistan to implement the division and (iii) theamount India would contribute toward the cost. Following this agreement, ittook about a year and a half of further discussions to agree on the detailsof the Treaty and especially on the provisions for the transition period,i.e., the ten-year period (or longer) during which the works involved wouldbe under construction. Immediately following the "agreement in principle",Pakistan established an Indus Basin Advisory Board (IBAB) with a view toaccelerating the initiation of the works proposed for Pakistan, once theforthcoming treaty became a reality. Concurrently with the negotiations theBank had canvassed a group of friendly nations, the Pakistan Consortium, forfunds to cover the major portion of the "Settlement Plan", the scheme ofworks to be built in Pakistan.

2.04 The treaty was signed on September 19, 1960, with the World Bank asignatory for certain specified purposes. Briefly, the treaty allotted toIndia the waters of the three eastern rivers of the Punjab (the Ravi, theBeas and the Sutlej, with a total annual mean flow of 40.7 BCM (33 1IAF)),leaving to Pakistan the waters of the three western rivers (the Indus, theJhelum and the Chenab). Under a concurrent agreement, the Indus BasinDevelopment Fund Agreement, provision was made for two major storageprojects, one on the Jhelum (Mangla) and one on the Indus (Tarbela), as wellas for a huge system of barrages and canals to divert and conduct waters fromthe western rivers to irrigate land which had traditionally been suppliedfFom the eastern rivers (the so-called replacement works). The Bank wasappointed Administrator of the IBDF and the Water and Power DevelopmentAuthority (WAPDA) was appointed executive agency of the Government ofPakistan (GOP).

- 27 -

2.05 The Replacement Works. The total resources of IBDF initiallyamounted to US$894 M (US$632 M in foreign currency), but this was increasedto US$1,209 M(US$946 M in foreign currency) under an April 1964 SupplementalAgreement. Pakistan accepted responsibility for meeting from its own resour-ces all further rupee requirements. It was also agreed that the augmentedresources would be applied first to meet the costs of the works excludingTarbela, and in the early 1960s, WAPDA, assisted by international consultantsand contractors, initiated construction of the following works:

(a) Mangla Dam on the Jhelum River to conserve surplus water fromthe summer monsoon periods;

(b) Six barrages to make diversions from the main rivers; and

(c) Eight link can.1s to convey water generally eastward from thewestern rivers.

2.06 With minor exceptions, these replacement works were completed by 1970on schedule and represented one of the largest, most complex and most suc-cessful programs of construction ever attempted anywhere. Nevertheless, asimplied by the term 'replacement', these works contributed little that wasadditional to Pakistan's agriculture (although additional power generatingcapacity was provided at Mangla). It had always been understood that inreturn for renouncing all claims to the eastern rivers, and in addition tothe replacement works, Pakistan would also be assisted in a significant wayto add to its agricultural capacity. Originally, the treaty had provided forconstruction of a main stream dam on the Indus at Tarbela, and it was there-fore agreed that, provided the project proved technically and economicallyviable, the Tarbela site would be developed fully rather than partially aswould have been required to meet only replacement needs. It was furtheragreed that any resources remaining in the IBDF after completion of theoriginal replacement works would be allocated to Tarbela.

2.07 Effect on Other Programs. The immense effort represented by the IBDPand Tarbela programs inevitably absorbed the major proportion of external aidas well as significant amounts of domestic resources. It also tended todivert attention away from downstream problems associated with the operationof Pakistan's enormous network of irrigation facilities. Generally, originaldesign criteria of the canal system evolved to fit availability of watersupplies in the rivers, to meet the objective of bringing to maturity thelargest possible area of crops with the minimum consumption of water, and tooperate at a low cost and with a limited number of technical staff. Theseresulted in low cropping intensities and low yields. While these irrigationschemes were historically very successful in generating agriculturalsurpluses at a time of low population densities and few technologicaldemands, they have been less well adapted to the requirements of modernagriculture. In an attempt to meet rising demands, flows in excess ofdesigned capacities are now being carried in many canals, placing greatstress on the system and increasing significantly the risk of failure. Addi-tionally, the huge size of the system makes large continuing maintenancedemands and mitigates against close control and scheduling of water supplies.

- 28 -

Furthermore, the system was largely developed without provision of complemen-tary drainage facilities. Although over the years a fairly large network ofsurface drains has been constructed, these were often based on limited tech-nical criteria and data. As a result of inadequate drainage, over time thewatertable underlying the Indus plain has risen, leading to serious problemsof waterlogging and soil salinity in certain areas.

2.08 The SCARP Program. With expected completion of IBDP and Tarbela

works in the mid-1970s, GOP shifted emphasis to resolving these waterloggingand salinity problems, launching in 1973 an accelerated program of waterlog-ging and salinity control (SCARP Program) with construction activities againentrusted to WAPDA. Previously, however, waterlogging and salinity had notbeen entirely neglected; the first integrated project to provide a comprehen-sive system of surface and tubewell drainage in an area of the Punjab, SCARPI, dated back to the 1950s. Planning studies undertaken in the 1960s rein-forced this approach, identified additional areas suitable for SCARPprojects, proposed a major system of surface drains to dispose of salineeffluent, and emphasized irrigation benefits that could be obtained fromcanal remodelling and from SCARP tubewells in fresh groundwater areas.Remedial measures provided under SCARPs attempt to lower groundwater levelsthrough tubewell pumping and, to a limited extent, through tile drainage.Pumping from fresh water aquifers likewise provides an additional source ofirrigation water and enables leaching of salts from saline soils. Under theSCARPs, WAPDA to date has installed about 12,000 public tubewells, andindividual farmers have installed over 180,000 tubewells all of which con-tribute in varying degrees to water supplies and to watertable control.

2.09 The SCARP Program, however, has not been without its problems. Itscomprehensive approach to area development and emphasis on constructionthrough WAPDA have, as in the case of the IBDP/Tarbela works, tended uninten-tionally to divert attention away from water management, on-farm development,and related issues. Financial and other constraints have slowed implementa-tion, and establishment of large public sector tubewell fields have placed anon-going financial burden on operating agencies (provincial IrrigationDepartments) and have seriously restricted funds available for normal main-tenance of the surface distribution and drainage system. In addition, thisprogram has had technical and operational problems. Tubewell (TW) life hasbeen less than planned (10-15 years instead of the assumed 30-40 years) and

because of plugging of screens and gravel packs, the capacity of most TWsdecreases about 5 percent annually. Watertables have been lowered andirrigation supplies supplemented, but efficient management of publictubewells generally has proved elusive. Furthermore, the addition of Tarbelawater, while significantly increasing dry season cropping, has also tended toaggravate waterlogging problems in certain areas 1/ and brought into focus

concerns about overall efficiencies in the use of irrigation supplies. Theseconcerns were heightened further by the demonstration under a USAID-funded

1/ Soil salinity survey completed by WAPDA in 1980 indicated that about 35%of the Indus Plain has a watertable at less than 10 feet below groundsurface.

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research project that water losses in the system, especially at the water-course level, were significantly higher than had been previously assumed. 1/

2.10 Revised Action Program. Increasingly during the 1970s, therefore, itbecame recognized that a more direct approach to the problems of management,maintenance, ane. efficiency in the operation of Pakistan's irrigation systemwas required, and further, that such an approach would need to be moreclosely attuned to the immediate constraints on agricultural production thanin the past. To help evolve necessary policies and programs to implementsuch a strategy, a UNDP-financed and World Bank-executed study was mounted toprepare a Revised Action Program (RAP) for irrigated agriculture. Whilerecognizing that programs to increase availability of water and other inputswill continue to be important, RAP recommended in 1979 that greater prioritybe given to complementary measures designed to ensure their efficient use, inparticular through farm-level programs and mobilization of private initiativeand capital. Recognition was given to the capacity of the farmer to respondto appropriate incentives as well as to the need to generate additionalresources in both the public and private sectors to relieve acute resourceconstraints facing Pakistan. In light of these considerations, RAP recom-mended: (a) investment policies that emphasized qu;ok returns and thatcomplemented existing facilities rather than expansion of irrigated area(rehabilitation, on-farm and watercourse improvements, essential drainage,and agricultural support services); (b) management policies that transferredrelevant activities to the private sector (e.g., tubewell development infresh groundwater areas) and that strengthened GOP operating agencies; and(c) pricing policies that recognized continuing resource constraints and theneed to provide appropriate efficiency signals to the private sector.

2.11 RAP recommendations in large measure have been accepted by GOP. Aprogram of watercourse improvements is underway and one for rehabilitatingthe irrigation system is being activated. 2/ Other proposed projects result-ing from the RAP recommendations currently7under preparation include: aprivate tubewell and rural electrification project designed to promoteprivate groundwater development; a SCARP transition program to transfergroundwater management in selected fresh water SCARP areas from public toprivate sector; and a command area water management program emphasizingimproved management of existing systems, together with complementary physicalimprovements. 3/

2.12 Summary. The successful implementation of Indus Basin worksfacilitated division of Indus waters, and Tarbela, despite technical

1/ Seepage and operational losses measured under operating conditions werefound to be 40-60 percent (ANNEX 7, item 22).

2/ On-farm Water Management Project (Cr. 1163-PAK) and Irrigation SystemsRehabilitation Project (Cr. 1239-PAK).

3/ Project preparation is being financed under the UNDP Umbrella(PAK/78/044), with the Bank as Executing Agency.

- 30 -

problems, has greatly added to dependable irrigation supplies and powergenerating capacity. The Tarbela Power Plant constitutes about 30 percent ofthe nation's electric generating capacity and the power production has beenimmediately absorbed as units came on line. In water management the situa-tion is constantly improving. Much work at all levels has greatly increasedthe awareness and definition of major problems. Proper policies have beenadopted and complimentary programs are now in place.

CHAITER III. PROJECT FORMULATION

3.01 GOP established the Dam Investigation Circle in 1953 to carry outfeasibility studies of possible dam sites on the Indus, Jhelum and Chenab,and as early as 1954 their consultants (Tipton and Hill, Inc.) had submitteda report declaring feasible construction of a dam at Tarbela to impound 5.2BCM (4.2 MAF) of live storage. The Tarbela Dam Organization (TDO) under thesponsorship of WAPDA was established in 1959 and WAPDA's general consultants(Harza Engineering Company International) conducted preliminary investigationof three possible dam locations in the Tarbela region. In February 1960,TAMS was appointed Project Consultant to the TDO and entrusted with siteinvestigations, project planning, preparation of detailed designs and con-tract documents, and supervision of project construction once a decision toproceed had been made. In line with the decision to develop the site fully,TAIS submitted a Project Planning Report in January 1964 recommending con-Struction of an earth dam 14b m (485 ft) high to create a reservoir of 13.7BCM (11.8 MAF) gross storage capacity, the size of dam and reservoir thatwere eventually constructed.

3.02 From the outset and to this day, Tarbela has required a sustainedinternational funding effort. The other Indus works (para 2.05) had consumedthe bulk of the original and supplemental Indus Basin Funds leaving an insuf-ficient balance available for construction of a dam on the Indus. Theestimated balance remaining in the Indus Fund after financing Mangla Dam andthe barrages and link canals was US$324 M, about two-thirds of the thenestimated total funds reqvired for Tarbela.

3.03 In view of the shortage of funds remaining for Tarbela, thefeasibility and costs of Tarbela were reviewed. It was not until February1965, after an independent study by a group of consulting engineering firmsreatained by the World Bank - Sir Alexander Gibb & Partners, Hunting TechnicalServices, Ltd., Charles T. Main and Stone & Webster - had confirmed thetechnical feasibility and economic soundness of Tarbela, that work on theproject again began to move ahead. The final report of the World Bank cover-ing the independent studies was completed in 1967 (see ANNEX 7, item 4). Itconsidered the entire water and power resources of West Pakistan and recon-firmed the necessity for Tarbela in the overall development program. Itrecommended construction of Tarbela Dam in a single stage of optimum heightplus a powerhouse having an ultimate installed capacity of 2,100 MW.

3.04 In November 1966, the Bank presented to the Pakistan Consortium theestimated financial requirements for Tarbela together with the expectedsurplus available from the Indus Basin Development Fund and asked that member

- 31 -

countries offer loans to cover the shortfall in foreign exchange. Nego-tiations culminated in the Consortium meeting held at Paris in March 1968where members and the Bank agreed to make additional grants and loans tocover fully the financing of the project. Following the pattern of replace-ment works, the Tarbela Development Fund (TDF) was established in 1968 withforeign exchange contributions amounting to US$149 M from Canada, France,Italy, United Kingdom and the United States; US$25 M in a Bank loan(548-PAK); and an estimated surplus of US$318 M from IBDF, making US$492 M inall to meet an estimated foreign currency requirement of US$484 M. As in thecase of the Indus Basin Development Fund (para 2.04), the Bank was appointedAdministrator of TDF. Pakistan agreed to meet all rupee costs. With financ-ing arrangements completed, the Tarbela Development Fund Agreement was signedon May 2, 1968, and the US$623 M Tarbela Contract (US$360 M in foreignexchange), the then largest contract in the history of civil engineeringconstruction, was awarded after international competitive bidding (ICB). OnNovember 4, 1968, the President of Pakistan officiated at the groundbreakingceremony for Tarbela.

3.05 As a consequence of damage to certain facilities of the TarbelaProject during the first reservoir filling in the summer of 1974 (para 7.01),additional finance was required to meet the cost of repairs and additionalworks considered necessary for project completion. Under the TarbelaDevelopment Fund (Supplemental) Agreement 1975, US$37 M was contributed bythe United States, United Kingdom, Italy, Australia and IDA (US$8 M)(581-PAK). In addition, Canada agreed to make available on an untied basisthe balance of approximately US$3 M outstanding from its original tied con-tribution to the Fund. These special contributions were to be disbursedagainst specified works as had been determined by the Administrator. Thecost of the repairs and additional works not so determined have been met fromthe general resources of TDF.

3.06 After completion of the original repairs and remedial works, furtheradverse developments gave rise to the need for additional works. Theavailable foreign exchange resources of TDF were insufficient to meetthe estimated costs of these further works. Accordingly, the (SecondSupplemental) Agreement 1978 was drawn up to help meet the remaining cost ofcompleting the project. Under this (Second Supplemental) Agreement, con-tributions amounting to US$79 M were to be received from Canada, Germany,Italy, United Kingdom, and IDA (US$35 M)(771-PAK). In addition, the EuropeanEconomic Community (EEC) provided US$14 M equivalent in two credits: Kuwaitprovided US$18 M, Saudi Arabia US$60 M and Abu Dhabi US$25 M. As discussedin para 8.04 additional funds have been provided for operation and main-tenance (O&M) purposes.

3.07 Pakistan has financed all rupee costs of TDF, including the Sup-plementary Agreements of 1975 and 1978, the entire costs of Tunnel 5, thepower plant units and equipment and the primary transmission lines, equiv-alent to more than US$1,275 M including duties and taxes of about US$340 M(Chapter X and ANNEX 4 for financing details).

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CHAPTER IV. PRINCIPAL PROJECT FEATURES

4.01 Tarbela Dam is a remarkable engineering achievement in many respects.It is the largest (in volume) embankment-type dam in the world; fifty percentlarger than the next largest. The dam stands on such a great depth (600feet-160 m) of highly pervious alluvium that a conventional vertical cut-offwall was impractical and use was made of an upstream "blanket" to reduceunderflow seepage. Tarbela is more than twice as high as the next largestembankment dam employing an upstream blanket and was the first to be con-structed on foundations with such extensive associations of openwork gravels(gravels without sands fully filling the voids). The tunnels are very largeand the steel tunnel liners were the largest ever made. The stilling basinsat the tunnel outlets are unique energy dissipators for low-level tunneloutlets, with hydraulic forces more than twice that of the next comparablestructure. The tunnel outlet gates were the largest ever made for use atsuch high head. The spillways are some of the largest ever constructed, andin contrast with others, those at Tarbela must be used at high discharges forthree months of every year.

4.02. The principal elements of the Tarbela Project (see Map) are:

(a) The main dam, an earth and rock-fill embankment-type, across theIndus River Valley;

(b) On the left bank -

(i) two auxiliary earth and rock-fill embankment-type damsto close two saddles in the left reservoir rim and at theupstream end of a side valley,

(ii) two spillways discharging into plunge pools in the sidevalley with a natural rock weir in the side valleymaintaining water levels in the spillway plunge pools,and

(iii) a tunnel (Tunnel No. 5) discharging into the side valleyfor irrigation releases;

(c) On the right bank -

(i) a group of four tunnels (Tunnels 1-4) through the rightabutment to provide for (1) river diversion during thelast phase of construction of the main dam, (2) irrigationreleases and (3) releases for power production,

(ii) a powerplant and switchyard, and

(d) The impounded reservoir.

4.03 Construction of the foregoing facilities began in mid-1968 andproceeded on schedule; filling of the reservoir commenced with the impounding

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of the snow-melt and monsoon river flows of 1974. In August 1974, a seriesof difficulties developed which set in motion a repair/remedial program whichextended over a 10-year period (see Chapter VII).

4.04 Construction was under a single civil works contract which requiredthe contractor to complete all construction including the powerhouse build-ing. The gates, power units, switch gear, cables, etc., were manufacturedunder separate contracts managed by WAPDA but the civil works contractor wasrequired to collect these items at point of manufacture, ship to site andcomplete installation.

4.05 Additional details on the construction program and schedule are givenin Chapter VI and physical descriptions of the Tarbela facilities are givenin ANNEX 1. Details of Tarbela Project statistics and comparisons with otherprojects are given in ANNEX 2. Details of project financing are given inChapter X and in greater detail in ANNEX 4.

CHAPTER V. PROJECT ADMINISTRATION AND MA4AGENENT

5.01 A number of agencies have been involved and have played significantroles in the work on the Tarbela Project. They are shown on Plate 1 whichalso shows the general relationships.

5.02 The Contributors. Foreign currency capital resources were con-tributed to IBDF and to TDF by 10 nations, the EEC and through 6 loans orcredits.l/ Throughout the long period of the Bank's administration of thesefunds, the response, assistance and cooperation of the contributors wasoutstanding. Money was always available when it was needed, first throughthe Pakistan Consortium and the Bank's efforts and later from Middle Eastcountries under bilateral agreements negotiated by GOP when the earliersources were drying up. Particularly helpful was the willingness of theearly contributor community to place the money at the disposal of the Bank tomanage as a common pool. The resulting flexibility in management of TDF wasparticularly needed and useful during the periods of emergency and during theremedial/repair program. The contributions from the Abu Dhabi, Kuwait andSaudi loans, which came later, were received on a reimbursement basis, fol-lowing initial disbursements from the TDF, in addition to the Banks normal

1/ The IBDF received contributions from Australia, Canada, the FederalRepublic of Germany, India, New Zealand, Pakistan, the United Kingdom and theUSA plus an IBRD loan (266-PAK) and an IDA credit (60-PAK). Direct contribu-tions to TDF were from Australia, Canada, France, the Federal Republic ofGermany, Italy, Pakistan, the United Kingdom, the USA and the EuropeanEconomic Community, and from an EEC Special Action Credit (51-PAK), an IBRDloan (548-PAK) and two IDA credits (581-PAK and 771-PAK). The contributionsto the project from the Middle East funds (Abu Dhabi, Kuwait and SaudiArabia) were not made in advance of disbursement except for some directpayments for one contract not administered by TDF.

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role of disbursing the rupee components of financing. This procedure did notprovide the same flexibility and involved cousiderably more work, time andattention, particularly by GOP, WAPDA and Gibb. A lesson learned is that forsuch a large project, with numerous contributors, a common pool of fundsresults in more flexible fund management to the advantage of the project.

5.03 WAPDA. The Indus and Tarbela Fund Agreements provided that theGovernment of Pakistan (GOP) appoint an agency to carry out the obligationsof the agreements. The appointed agency was the Water and Power DevelopmentAuthority (WAPDA). WAPDA is a semi-autonomous agency of GOP. Its functionis the development of major water resources, and the gene.ation, transmissionand distribution of power. Management of WAPDA is by a governing body con-sisting of the Chairman and three Members representing the three major divi-sions: the Water Wing, the Power Wing and Finance. WAPDA exercised itsresponsibility and authority through its main office in Lahore and through asubstantial staff at the project site and was involved with not only all ofthe work on the project facilities but also was responsible for land acquisi-tion and resettlement.

5.04 Project Consultant. The Project Consultant for the Tarbela Projectwas Tippetts-Abbett-McCarthy-Stratton (TAMS) of New York, N.Y., USA. TANSwas the "Engineer" as defined in the Contract for the construction of theTarbela Project. TANIS was responsible for all engineering and constructionand contract administration at Tarbela and for assistance during the firstyears of operation. Both the New York office and a site office were heavilyinvolved in the work. TAMS field organization at the peak included 65expatriates. TAMS also had a large Pakistani staff at site, 1,600 at peak,as well as Pakistani engineers seconded to the New York office. In addition,TANS employed a number of distinguished engineers and scientists, withWAPDA's concurrence, as special consultants. The Special Consultants, asthey became known, were mainly concerned with matters of principle ratherthan of design detail. They individually and collectively advised on mattersof geology, soils, hydraulics, models, seismicity, drainage, rock mechanics,grouting, concrete and sedimentation.

5.05 General Consultant. Harza Engineering Company International wasGeneral Consultant to WAPDA on all Indus Basin Project work and also reviewedTarbela work. Harza's General Consultant responsibilities were carried outby a site representative at Tarbela, an office in Lahore and the main officein Chicago, Illinois, USA.

5.06 Contractor. The civil engineering contractor, Tarbela Joint Venture(TJV), was a consortium of heavy civil engineering contractors sponsored byImpresit-Girola-Lodigiani (IMPREGILO) S.p.A., of Milan, Italy. Other membersof the consortium included Costruzioni Generali Farsura "Cogefar" S.p.A.,Milan; Impresa Astaldi Estero S.p.A., Rome; Compagnie de Constructions Inter-nationales (CCI), Paris; Compagnie Francaise d'Entreprises (CFE), Paris; andSociete de Construction de Batignolles, Paris. In March 1969, five Germanand two Swiss contractors joined the consortium: iochtief AG, Essen; PhilippHolzmann AG, Frankfurt; Strabag Bau AG, Cologne; Ed Zueblin AG, Duisberg;C. Baresel AG, Stuttgart; Conrad Zschokke AG, Geneva; and Losinger AG, Berne.In September 1977 the consortium was renamed Indus River Contractors (IRC)for executing the new contracts and "Cogefar" was replaced by "Impresa Angelo

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Farsura." At the peak of work the Contractor had about 16,000 employees,including large management and office staffs, a number of subcontractors,construction equipment valued at over US$100 million, extensive shops andvast inventories of materials and spare parts. Large colony complexes onboth banks of the river included all necessary community facilities andservices.

5.07 The World Bank. As pointed out previously, the Bank has participatedcontinuously since the early 1950s in all phases of the Indus Basin andTarbela Projects. The Bank played particularly important roles in settlementof the water dispute between Pakistan and India which resulted in the IndusWater Treaty and the construction of works under the Indus Basin DevelopmentFund Agreement, as Administrator of both the IBDF and the TDF, and in reviewof technical studies and the construction program. A number of senior Bankofficials as well as members of project and program staffs and staff of Legaland Controller's departments have been involved.

5.08 Under the Agreements of 1968, 1975, 1978 and 1980 1/ the Bank acts asAdministrator for the Project and disburses all funds contributed. In itscapacity as Administrator of TDF, the Bank receives the contributions fromthe parties, including the transfer from IBDF, holds the assets of the Fundin trust, and disburses the resources of the Fund to meet expenditures of theProject. The Bank, as Administrator, is also responsible for the generalsupervision of the Project on behalf of the parties to the Agreements, andprovides technical assistance as needed. The Bank provides contributors andother interested parties with semi-annual progress reports and also preparesquarterly financial statements.

5.09 As Administrator of IBDF and TDF, the Bank represented the interna-tional community of lenders and donors. The need to give prudent managementto these funds, together with the large contributions by Pakistan, for aconstruction program of unprecedented magnitude complicated by the Tarbelaremedial/repair program resulted in very broad and deep involvement by theBank; beyond fund management into project management, administration, techni-cal analysis and technical decisions. The Bank was greatly assisted in thiswork by Sir Alexander Gibb & Partners.

5.10 World Bank Consultants. Sir Alexander Gibb & Partners, Reading(formerly London), England, have been consultants to the Bank since 1960,first in the work under the IBDF and later under TDF. Gibb reviewed engineer-ing proposals, plans and designs, contractual and financial aspects, attendedmeetings, witnessed model tests and observed construction quality andprogress. Following the onset of problems in 1974 (para 7.01), Gibb's termsof reference were broadened to play a more direct part in the development ofdesign changes for the remedial work. In 1979, Gibb's role was expanded

1/ Loan 548-PAK (1966), Credit 581-PAK (1975), Credit 711-PAK (1978) andEEC Special Action Credit 51-PAK (1980).

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again to include review and monitoring of the program of operation and main-tenance (O&M). Gibb also was responsible to the Bank for financial manage-ment and fund administration by monitoring construction quantities, certify-ing payments, keeping TDF and non-TDF expenditures separated, reviewing andpreparing cost estimates and forecasting fund status including status offunds from contributing countries. In this work Gibb had a Lahore office forwork related to IBDF with site observers for each main contract and later aTarbela site office.

5.11 Coopers and Lybrand, Chartered Accountants of London were retainedby the Bank to audit the accounts of the general and project consultants.

5.12 Interaction Among the Parties. General relations among the partiesare shown on Plate 1. WAPDA was the agent representing the owner, GOP.Harza functioned as General Consultant to WAPDA. TAMS was Project Consultantresponsible for project design, technical studies and supervision of con-struction. TJV (later IRC) was the main contractor. The World Bank wasAdministrator of TDF with Gibb as consultants for independent technicalreview and payment certification and Coopers-Lybrand as consultants for auditof consultants' accounts. By any measure the organizational arrangement wassuccessful. Probably the primary evidence of this is that the partiesresponded fully, in an organized manner, to the emergencies which began in1974. On the other hand the arrangements were not trouble-free. Forexample, the number of organizations with interests, responsibilities, viewsand competence in technical areas sometimes complicated and even delayeddecision on complex technical issues. The final result, however, probablywas better decisions. The potential for difficulties in this area wasreduced considerably by arrangements that had been agreed earlier as dis-cussed in the following paragraphs.

5.13 Decision-making and Control. The procedures for decision making,control and fund management at Tarbela were laid down in 1960 by the Bank asAdministrator of the IBDF (and later of the TDF) and agreed witb WAPDA.These procedures provided for review of all documents, drawings and varia-tions by WAPDA, harza and Gibb before commitments were made.

5.14 Various levels of decision-making were developed which enabled lesserdecisions or variations to be agreed on site to save time. For larger itemsAppropriation Requests had to be submitted to review and approval beforevariation orders could be issued to the Contractor.

5.15 When problems arose during first filling of the reservoir in 1974,emergency procedures for technical control and decision making had to bequickly developed to respond to the new situation. The key to success incontrolling the situation and in overcoming the technical problems was asystem of implementation meetings of all parties, including the Contractor,with only decisions for action being recorded. In this way technical solu-tions could be agreed upon in full knowledge of all available facts andcapabilities. During this period of 'crisis management' there was a fargreater involvement of the Bank and its consultants in finding technicalsolutions to problems as they arose.

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5.16 These special procedures introduced the risk of diffusing the ProjectConsultant:s' responsibilities and as soon as possible procedures for techni-cal control and decision making reverted to the former format.

5.17 The development of technically satisfactory solutions to the unprece-dented problems encountered at Tarbela, and their prompt implementation inthe limited time available before succeeding flood seasons, has been a majorachievement of all parties concerned.

5.18 Throughout the project construction and rehabilitation, financialcontrol and fund management was linked closely to technical control. Annualcapital cost estimates and half-yearly forecasts of disbursements wereprepared by Gibb. In addition, WAPDA had their own financial control systemincluding Government Audit.

5.19 During the period of initial repairs in 1974/75 the limited timeavailable between flood seasons to carry out repairs and additional works andthe changed nature of the work made it impractical to use existing ratesunder the contract. The work had to be carried out on a cost plus basis,since it was being both designed and constructed under an accelerated programwhich left little time for advance planning. Orders for materials forexample had to be placed on the basis of certain assumptions which could onlybe confirmed when the damage had been fully assessed and the remedial workdecided upon.

5.20 The return to normal procedures was progressive: the 1977/78 workswere carried out under contract at rates which were negotiated as the workprogressed; the 1979/80 works were carried out under a similar contract butwith rates negotiated in advance; and the conversion of stilling basin 4 totwin flip-buckets was put out to international tender after full review ofdesign and documents, and prequalification of tenderers.

5.21 Insurance. Insurance against loss or damage with respect to theTarbela construction project was taken out under the conventional CAR (Con-tractors All Risks) policy prescribed by the Federation International desIngenieurs - Conseils (FIDIC) Conditions of Contract (International). Thepolicy was subject to a ceiling of US$100 million in indemnity for any oneevent, which was the maximum obtainable in the market a, that time. Premiumspaid amounted to approximately US$17 million. Several small claims were metby the insurers in the course of construction.

5.22 Following the incidents at Tarbela in 1974 and 1975, claims totallingUS$49.9 million equivalent were lodged against the insurers. The insurersrejected these claims on the contention that the loss was caused by defectivedesign and/or non-fortuitous events. The delay in the settlemeat of theclaim faced Pakistan with severe problems particularly since it was clearthat considerable additional funds were needed immediately for repairs.Arbitration proceedings were instituted by the owner and each party retainedcounsel in London. Discussions were held and eventually the insurers offeredUS$16 million in final settlement of the claims. This offer was accepted bythe owner in light of advice that litigation would be protracted and expen-sive, and its outcome uncertain.

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5.23 The experience at Tarbela set in motion a review of the adequacy ofthe traditional insurance regime for major civil works. The details of thisreview and its present status are described in ANNEX 3.

5.24 Training. TAMS' contract with WAPDA provided for a design office inPakistan and for secondment from WAPDA of all TAMS local staff. These arran-gements worked well, and the engineering profession in Pakistan has greatlybenefitted. In addition, the construction work force mobilized by IRC wasrecruited in Pakistan, given necessary training and worked under IRC super-visors. In this manner a vast number of Pakistanis developed skills whichenabled them to move to other jobs, both in Pakistan and world-wide.

CHAPTER VI. PROJECT IMPLEMENTATION

6.01 The Tarbela Dam Project was constructed under a single major con-tract. One nominated subcontractor and numerous other subcontractors wereemployed for specialized work.

6.02 Prime Contract. The prime contract for the construction of the CivilEngineering Works of the Tarbela Dam Project was a unit price contract incor-porating conditions common to the contracts for the various components of theIBP; these conditions, in turn were based on the widely-accepted 1st editionof the FIDIC form. The prime contract comprised the construction, completionand initial maintenance of the whole of the works, including the powerhousebuilding, and provision of all labour, materials and construction plant. Thegates, power units, switchgear, cables, etc., were manufactured underseparate contracts managed by WAPDA but the civil works contractor wasrequired to collect these items at point of manufacture, ship to site andcomplete irstallation.

6.03 Pregualification, Tendering and Award. Following pre-qualificationstudy, tender documents for the Tarbela prime contract were issued to fourconsortia of contractors with sponsoring firms as follows:

(a) Guy F. Atkinson Co.,(b) Hochtief AG, and(c) Impregilo S.p.A.(d) Morrison-Knudsen International Co., Inc.,

6.04 In late April 1967 a pre-bidding site conference was held at Tarbela.Tenders were opened at Lahore on November 30, 1967. Contract award was madeto Tarbela Joint Venture (TJV) (the consortium sponsored by Impregilo) on May14, 1968.

6.05 Nominated Subcontract. The work of fabricating and installing thesteel liners in the four main tunnels, and the bifurcations, penstocks,manifold and branch pipes external to the tunnels, was of immense scope andcomplexity. The timely and satisfactory completion of this work was criticalto the progress of tunnel construction and completion of the project.Separate tenders were invited for this work for eventual designation of the

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successful tenderer as a nominated subcontractor to the prime contractor.On July 1, 1969 the subcontract was awarded to Chicago Bridge & Iron Co.$(C.B.I.). Later, under a separate agreement, C.B.I. furnished and installedthe steel liners for the Left Bank Irrigation Tunnel (Tunnel No. 5).

6.06 Subcontracts. TJV made extensive use of subcontractors to carry outmuch of the specialty work, notably the installation of permanent mechanicaland electrical equipment,cutting and bending of reinforcing steel andfabrication of structural steel, drilling and grouting, painting, and theconstruction of auxiliary features such as offices, shops, housing for laborand staff, and community facilities.

6.07 Supply Contracts. The various items of mechanical and electricalequipment such as gates, cranes, pumps, motors, generators, switchgear, etc.,were purchased under a series of 24 major supply contracts and 16 smallercontracts.

6.08 Diversion and Construction Sequence. Construction of the Projectfell into three stages, related to care of the river (see Map): Stage-i,with the river flowing in its natural channels and work proceeding on theright bank; Stage II, with the river flowing in a diversion channel on theright bank and the work spread to both sides of the river; and Stage III,with the river diverted through the right bank main tunnels and work con-centrated on the closure section of the main dam and on the powerhouse andthe switchyard.

6.09 In Stage I, the objective was construction of the right bank diver-sion channel and buttress dam and a start on the tunnels and main dam. Thematerials excavated were used in part in the construction of a portion ofthe main dam.

6.10 In Stage II, the river was confined to the Diversion Channel. RightBank work on Tunnels 3 and 4 was completed; work on Tunnels 1 and 2 wascompleted for diversion of the River. On the left bank, construction of thetwo Auxiliary Dams was completed and the two spillway structures were -essen-tially completed, except for installation of the crest gates. Across thevalley floor, the main embankment dam was completed to within a few feet ofthe crest elevation, except for the gap through which the diversion channelflowed. The blanket was completed.

6.11 The Buttress Dam gates were closed on September 29, 1973, slightlyahead of schedule, and final diversion through the tunnels was achieved. InStage III, with the river flowing through the tunnels, the remaining sectionof the main embankment dam - the closure gap - was completed. Work continuedon the left and right banks to complete other as-yet-incomplete features.It was expected that at the end of Stage III, October 1974, the main damwould be essentially complete, the reservoir filled to approximately spillwaycrest level, and the reservoir discharging through Tunnels 3 and 4 and pos-sibly over the crest of one of the two spillways.

6.12 During the course of project construction, openwork (boulder gravellacking in fine particles) was encountered in the foundation of the main damand this led to a decision by all concerned that initial filling of the

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reservoir would be controlled and gradual to permit close observation of thedam foundations and upstream blanket at progressive reservoir levels (the"observational method"); a maximum level of El.1520 (463 m) was planned forthe first filling. Stage III, however, did not develop as planned. Con-struction of the closure section progressed ahead of schedule but, with apartially filled reservoir, severe difficulties developed (para 7.01) withtunnels 1 and 2 in August 1974 when the reservoir level was at 1465 feet andit became necessary to empty the reservoir. This and events that were tofollow had far reaching consequences for Pakistan and for TDF.

6.13 Technical Advances. Tarbela tender documents and drawings wereprepared during the period 1965/67. Progress in engineering involves advanc-ing from known positions and in a number of areas Tarbela requirements andfeatures were beyond the state of the art. Comparisons of Tarbela featureswith other projects are given in ANNEX 2. Following are some of the mostsignificant contributions of Tarbela to engineering knowledge, design andconstruction:

(a) Rollcrete. in repair of damages to Tunnel No. 2, in the work oflining the plunge pools of the Service and Auxiliary spillwaysand in the conversion of Tunnel No. 4 outlet from a stillingbasin to twin flip buckets very large quantities of rollcretewere used; used on a much larger scale than anywhere heretofore.kollcrete is a form of concrete with less than one-half theamount of cement as is used in regular concrete and withaggregate sizes up to 10 inches, produced in very largequantities (at Tarbela at a maximum rate of 18,000 m3/day(24,000 cu yds)) and transported, placed and compacted withregular earth-handling equipment, i.e., large dumper trucks,bulldozers and vibratory rollers. The experience at Tarbelademonstrated the usefulness of roll-crete as a structuralmaterial where large volumes must be placed quickly and wherethere are low requirements for uniform strength, impermeability,resistance to high velocity flows and weather.

(b) Large Capacity Gates and Stilling Basins for Low Level Outlets.The outlet gates on Tunnels 3 and 4 must be capable of releasingvarying quantities of water as irrigation requirements changeand as reservoir levels fluctuate. To do this with the largedischarges required and when the pressure head on the gates couldbe as high as 132 m (433 ft), required outlet control structures,i.e., steel transitions from tunnels to twin, radial outlet gatesand stainless steel lined gate chambers, with dimensions beyondanything ever constructed. The entire massive structures wereheavily reinforced, prestressed and anchored. The design,fabrication, installation and final fitting all involved conceptsand techniques never before accomplished on such a large scale.

(c) Steel-Fiber Concrete. Final repairs to the stilling basin ofTunnel No. 3 carried out in 1976/77 included placement of a20-in thick final surface of steel-fiber concrete to providegreater resistance to cavitation and abrasion. This large useof steel-fiber concrete appears to have given full protection

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against the very large forces; seven operation seasons have passedand inspections reveal negligible erosion of the protected floorof the chute and basin.

(d) Extensive Upstream Blanket. Of large embankment dams employingan upstream blanket to reduce reservoir seepage, Tarbela has noclose competitor, either in extent of the blanket or in height ofdam utilizing a blanket. Performance of the blanket has been asexpected; underseepage has consistently reduced as each seasonpasses and further, performance of the blanket has been enhancedby consolidation of the blanket and by the deposition each yearof a deepening layer of sediment. Finding of the sinkholes ondraining the reservoir in Aug./Sept. 1974 and their successfultreatment have added a valuable page to engineering knowledgeand experience.

(e) Analysis and Treatment of Blanket Sinkholes. The presence ofsinkholes in the upstream blanket was observed in 1974 afteremergency emptying of the reservoir. While the blanket wasexposed they were filled with blanket material and the thicknessof the blanket was increased. In the years since there has beena continuing program of underwater surveys (para 6.13 (f))to monitor previous sinkhole locations and to locate and fillnew ones by dumping filter material from barges. Consensus isthat sinkholes are initially cracks developing frou differentialsettlement and begin at the bottom when the fines from the blanketmaterial washes into open layers in the foundation. The treatmenthas been effective and the performance of the blanket continues toimprove (para 6.13 (d)). No published experience of sinkholes inblankets existed in 1974 but subsequent enquiries revealed thatsinkholes had occurred in the upstream .lanket of Arrow Dam inCanada. Primarily based on the Tarbela experience it is nowrecognized that sinkholes must be anticipated where blankets reston gravel and sand alluvial foundations and differential settle-ment can occur.

(f) Side-Scan Sonar and Sonic Profiling. On the basis of knowledgeof experience in North Sea oil exploration, side-scan sonarequipment and sonic profiling equipment were used for the loca-tion and study of sinkholes. This unique application has beensuccessful from the beginning. This equipment, together withradio navigation equipment to locate sinkholes and the bargesto dump the blanket material, although initially under thecontrol of the main contractor, are now all operated by Pakistanipersonnel.

(g) Other Areas of Technical Advances. In addition to the areas men-tioned above, theri were otifer technical areas where the expe-rience at Tarbela added to engineering knowledge and experience,e.g., a great variety and a great number of monitoring instrumentswere installed in Tarbela facilities, some of which, such as thedouble fluid settlement ievice were new, and all of which gavedata on instrument performance and instrument comparison; new

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knowledge was gained in instrument and cable installation;important experience was gained in manufacture of the corematerial which instead of the conventional homogeneous materialwas a mechanical blend of dissimilar materials; and considerableknowledge has been gained on the effects of small surfaceirregularities in causing cavitation damage under high velocityflows.

CHAPTER VII. REMEDIAL/REPAIR PROGRAM

7.01 As mentioned previously, construction of the project proceeded asplanned with closure of the main embankment made on schedule; storage of theflows of the Indus began. On August 21, 1974, when the reservoir level hadreached about elevation 447 m (1,465 ft) (maximum storage elevation is 472 m(1,550 ft)), the first of the following series of damages and problemsoccurred: 1/

August 1974 - loss of liner plates and damage to lining of outlet chamberof Tunnel No. 3 caused by a faulty weld. The damage wasrepaired by filling with concrete, adding anchors to theliner plates and applying a hardened surface.

- severe damage to Tunnels 1 and 2. This disastrous eventinvolved partial damage to Tunnel No. 1 and the totalcollapse of portions of Tunnel No. 2. The failure wasprobably caused by unsymmetrical and partial opening andclosing of upstream control gates which combined with lossof bearing rails where fixing bolts had not been tackwelded caused jamming of the gates. An heroic and massiveeffort by all parties, particularly by the Contractor,completed repairs in time to safely store the late Springand Summer runoff of 1975.

- discovery of sinkholes in the upstream blanket. When thereservoir was emptied following the damage to Tunnels 1 and2, a large number (426) of sinkholes were found in the mainblanket. Some new ones have appeared most years since andthe cumulative total found is now 500 (July 1983). Thesinkholes were probably caused by movement of the blanketmaterial into open layers of the alluvial foundation (para6.13(e)). They have been successfully treated by dumpingof filter material onto the sinkholes. This program ofdumping from barges will undoubtedly continue-for a numberof years.

1/ The sequence of events, the damages and problems, the probable causesand the repair programs are discussed in detail in Gibb's report of June1980 (see ANNEX 7, item 23).

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August 1975 - failure of floor slab of Tunnel No. 3 stilling basin.This major failure occurred under conditions of high headdischarge with the stilling basin floor already severelyeroded by the circulation of boulders in the basin as aresult of the unsymmetrical operation of the outlet gatesto draw down the reservoir in 1974. The weakened floorfailed and the foundation rock eroded to a depth of over70 ft and the massive wall between basins 3 and 4 wasundermined. The floor and wall were rebuilt.

April 1976 - further erosion damage of No. 3 stilling basin. Largeslabs of concrete were swept out from the basin floor byhigh velocity flows. The cause was judged to lie the veryhigh hydraulic uplift forces trapped by respositionedwater-stops combined with the large fluctuations in thewater surface. This time extensive repairs were madetogether with new techniques of anchors, an extensivesub-floor drainage system, facilities to introduce air intothe water jet and placement of a thick floor of steel-fibreconcrete. Some minor cavitation damage has occurred in thewalls but repair could be called routine. However, WAPDAcontinued ta be uneasy about the realiability of thestilling basins and the difficulties of their inspectionand maintenance and favored the modification of Tunnel No.4 outlet from a stilling basin to two twin flip buckets. Atwo-year program of modification begun in April 1981 withIRC as the contractor, was completed in June 1983.

September 1976 - discovery of sinkholes in the upstream face of the mainembankment dam. Five sinkholes were discovered. Theprincipal sinkhole was investigated by a shaft and byborings. It was concluded that small areas of thefoundation had settled allowing prisms of the embankmentto settle. It was agreed no danger existed and that notreatment was necessary. A similar sinkhole was foundin March 1984.

August 1977 - rapid erosion of right side of Service Spillway plunge pooland movement of foundation of flip bucket. Circulatingcurrents initially set in motion by uneven erosion of theplunge pool sides and outlet, caused erosion and threatenedthe foundations of the service spillway flip bucket.Beginning in October 1977, there were major and expandingwork programs during each of the following three workseasons. (A work season begins in October and ends inearly June). Each season's program was worked out on thebasis of the spillway performance during the high summerflows and on the basis of testing of models. The finalresult, completed in June 1980, is massive and deepconcrete-faced rollcrete beneath the bucket and on theright side cutting off the embayment, combined with rockreinforced by post tensioned anchors protected by concretefacing on the left side and at lower levels on all three

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sides. This work is of such magnitude that there is acomplete absence of previous experience. In addition, muchof the steep hillside above the right side of the pool wasremoved. A generally similar scenario took place at theAuxiliary Spillway but after an initial remedial program tocontrol erosion on the left side of the pool, a decisionwas taken to line the pool before further developmentfor2ed the need to take protective action. The finaldesign, based on model tests, was for a concrete facedrollcrete lining beneath the bucket and to both sides ofthe plunge pool. The work at the auxiliary spillway wascompleted in June 1982.

September 1977 - discovery of a sinkhole in the upstream face of AuxiliaryDam No. 1. As previously mentioned, sinkholes werediscovered in the upstream blanket after the first fillingin 1974. Two years later, sinkholes appeared in AuxiliaryDam No. 1. To investigate, a shaft following the sinkholezone, was excavated to bottom of the core. A shaft onthe downstream side and extending to a deeper level alsowas excavated and twice reopened. Even with theseinvestigations and related tests, there was no positiveidentification of the initial cause of the sinkhole.However, there is a growing opinion that seepage alongtrenches and risers carrying instrumentation lines was afactor. Piezometer readings showed adverse changes aboutthe time of discovery of the sinkhole, but there has beenno significant further deterioration. There has been noincrease in drainage flows through the dam. There isgeneral consensus that there has been a downstreammigration of fines at the sinkhole section. Carefulreservoir filling and observation of instruments, togetherwith some grouting treatment from the downstream shaft,give the general feeling that the situation has stabilizedbut monitoring will continue.

Since 1974 - substantial seepage flows carrying dissolved minerals fromthe right abutment drainage galleries. Flow and waterquality measurements, review of pre-construction geologicinformation and geotechnical review by special consultantshas resulted in programs to extend the grout curtains andconstruct two lower galleries for additional drillingexploration and grouting. Further treatment steps hasinvolved regrouting from the drainage galleries and bargedumping of silt on, and sealing of, the submerged abutmentand nullah adjacent to the dam. This work will probablycontinue for several more years.

Since 1974 - moderate seepage flows from the left abutment drainagegalleries. The left rim of the reservoir from the main damupstream to above Auxiliary Dam No. 1 is a thin ridge andshows evidence of leakage at the dam and beneath theAuxiliary Spillway. The rock is blocky with thin soft

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seams between the blocks and because the formation is thin,the possible seepage paths are short. There is agreementthat a grouting program is called for, probably for anumber of years, and the program is underway with a majorcontract completed in 1983. A complementary program ofbarge dumping of silt is also underway.

January 1982 - moderate landslide of the right abutment outfall area abovethe stilling basins. This was caused by slow softening ofthe graphitic schist by groundwater accompanied by creep inthe rock above, which resulted in a slope failure. Repairwas done by cutting back the elope, providing increaseddrainage and replacing slope protection.

March 1984 - loss of large concrete block from downstream end of centerdividing wall of stilling basin of Tunnel No. 3 doing somedamage to basin wall and floor and probably caused by verylarge pulsating hydraulic forces near face of hydraulicjump. At time of writing of this report several repairtechniques were being considered. Repairs probably will bemade by WAPDA O&M forces.

7.02 The remedial/repair work resulting from the foregoing damages andand problems was carried out over a period of ten work seasons involvinglarge requirements for mobilization, critical work schedules and additionalfunds. Nearly all of the repair/remedial work was done by IRC. During thisperiod there was a constant flow of communications among the offices of theinvolved parties. Several times each year, and always in November after theannual filling of the reservoir, large meetings were held at site whereoperating experience, instrumentation results, technical problems, modelstudies, design changes and construction programs and program revisions werereviewed. Major decisions were made at these meetings which governed thework programs until the next meeting.

7.03 Total cost of the remedial/repair program at June 1983 was estimatedto be about US$475 M with about US$35 M remaining to be spent, for a totalcost of about US$510 M. Part of this cost was for repair of damages but apart should be considered to be delayed capital expenditure. This is thesituation in the case of the lining of the spillway plunge pools which inretrospect was clearly necessary. This cost was roughly US$100 M for eachplunge pool. Part of the cost also was in the nature of preventive main-tenance. Response by all parties to the emergencies was outstanding and theremedial/repair work, together with all facilities of the project, appears tobe nearly complete and sound but a high level of future care is essential.

7.04 The Tarbela remedial/repair program has received much attention, notonly in national and international press but also in technical journals.There has been much analysis, discussion and speculation as to the causes ofthe problems at Tarbela. Although for some problems there appear to bespecific causes, for the most part more general and over-riding circumstanceswere controlling. In addition, the problems for the most part were excep-tional and unforseeable at the then existing level of knowledge andexperience. In general summary the main points aze:

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(a) The damages to the floor slab of stilling basin No. 3 wereprobably due to material failure and inadequate allowance forthe cavitation potential of the very high discharge velocitiesassociated with the need for very large energy dissipation whichrequired structures of unprecedented size.

(b) The damages to Tunnels 1 and 2 probably resulted from the loss ofgate rails due to fixing bolts not be'ing secured by tack weldingor other means. This led to the jamming and subsequentunsymmetrical operation of the gates.

(c) The sinkholes in the upstream blanket now appear to be aphenomenon that should have been anticipated considering thephysical characteristics of the blanket and the alluvialfoundation and were not a particularly critical problem.

(d) The need to strengthen and line the plunge pools of thespillways resulted from the very large hydraulic forces and theunanticipated, uneven and early erosion of the plunge pools' sidesand outlets.

Primary lessons learned are:

(a) Where forces and the resulting sizes of structures are unpre-cedented, conservative approaches should be taken involvingconsideration of all possible optional designs fully supportedby model tests with adequate time allowed to determine the bestsolution.

(b) Even with the very large and extensive geological explorationand testing program the prototype experience showed Tarbela'sgeologic environment to be more unfavorable than expected.

(c) There is still much to be learned about the effects of very highvelocity water flows in causing cavitation, erosion, upliftpressures, pressure fluctuations and other dynamic forces. AtTarbela these affects were sometimes under estimated both onstructures and on the complex and adverse site geology.

7.05 Although Tarbela required important repair and remedial work, it has

continued to provide substantial and uninterrupted planned benefits to thenation's economy each year from water supply, production of electric powerand a measure of flood management.

CHAPTER VIII. FUTURE WORK

8.01 The program of construction of the Tarbela Dam Project which beganin 1968, extended through completion of initial facilities and included theremedial/repair program, will be completed in 1984. Initial operation andmaintenance (O&M) activities began in 1975. The transition from construction

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to O&M will be completed in 1984 when WAPDA staff will assume full respon-sibility for all work at the project. In addition to the future tasks ofO&M, it appears that there may be some additional construction works to becarried out.

8.02 O&M Program. Tarbela is one of a new generation of water conserva-

tion projects which has had to be designed and leveloped for geologicalconditions which would previously have been considered to be unsuitable forlarge scale dam construction. Further, the physical size of many of the

facilities was beyond any experience. Consequently, the normal provisionsfor maintenance at Tarbela will always contain an element of development

which may vary widely from year to year. The key to the long-term safety ofTarbela lies in the hands of the O&M organization. The immediate objectiveat Tarbela, therefore, is to leave the project and project O&M organizationin a strong and competent condition for the tasks ahead.

8.03 The O&M program of Tarbela Dam Project is very large. The develop-

ment of this program, with its requirements for skilled personnel, proper

equipment, adequate workshops and supplies and adequate and available financ-ing, has been beset by a number of problems, the most significant of which

are:

(a) The repair and remedial program which began in 1974 and will

continue into 1984 has taken time, attention and resources whichnormally would have been devoted to the development of the OMprogram.

(b) The provisions governing expenditures of the TDF did not includeresources for capital investments in an O& program and thus ithas been necessary to raise additional capital funds.

(c) The planned smooth traneition from construction to O&M was upsetin every area by the long remedial/repair program. For example,WAPDA's plan has always been to purchase, renovate and occupyoffices, workshops and warehouses used by the Contractor duringthe construction period originally anticipated to end in1975/76. However, due to continued work load it was not until1982 that the Contractor was able to release a significant numberof buildings. Consequently, during the years of work on theremedial/repair program, WAPDA 0O& forces have used temporaryand generally inadequate facilities. Only now are adequate

facilities being prepared.

(d) The lower total remuneration of the civil O&M staff by comparison

with others at site and other factors has made it difficult torecruit and retain staff.

(e) Inadequate funding of foreign exchange has handicapped provisionof O&M plant, equipment, spare parts and supplies.

(f) There is no precedent or experience in Pakistan for such a largeneed and application of resources and for such broad infrastruc-tural support for project maintenance.

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(g) The sheer size and complexity of the facilities and the unexpectedproblems that have been encountered make clear that the programof maintenance will be larger than previously envisioned.Safety must remain the key concern.

8.04 As noted in paras 8.03 (b) and 8.03 (e), funding for O&M has been aproblem. To provide a portion of the initial inventory of 0&14 equipment,workshops, workshop equipment, supplies, tools, training and technical assis-tance, about US$35.4 M in foreign exchange for O&M purposes has been madeavailable from various sources; in January 1980 US$3.2 M was provided frominsurance recoveries, in March 1980, US$6.5 M was provided from the EECSpecial Action Credit (51-PAK) and US$1.5 M was available from the loan fromAbu Dhabi. In addition, in April 1983, an agreement was signed wherebyUS$10.2 M was provided by the Bank under Loan Agreement 2247-PAK. Also, inJune 1983, US$14.0 M equivalent was made available by UK through the UKOverseas Development Administration.

8.05 Increased management attention, significantly increased budgets byGOP of local currency beginning in FY82 and of foreign exchange beginning inFY83, and additional foreign exchange specifically for O&M (para 8.04) haveimproved the situation considerably, however, strong attention and adequatefinancial resources will need to be continually directed to the 0&1H program.

8.06 A valuable lesson learned at Tarbela is that on large projects, opera-tion and maintenance should be considered at very early stages. Experts inO&1I should participate in design review and design decisions. Preparation ofoperation and maintenance manuals should be a part of final design. Costestimates and capital funding should include plant and equipment needed forO&M. Assignment of key O&M staff should be made early enough to permitproject familiarization, preparation of O&M programs, selecting and trainingof staff and building apprentice and training programs.

8.07 Possible Future Capital Works. TAMS' report of May 1982 (see ANNEX7, item 25) summarized work since the first reservoir filling and set forthviews on possible future capital works for which additional funds will berequired. The substance of the TAMS report will be refined and modified byfurther studies with portions eventually to become WAPDA programs in themid-to-late 1980's. Briefly, the TAMS report outlines possible significantfuture capital construction work in the following areas:

(a) extending the protection of the plunge pool of the Service Spillway,

(b) strengthening the piers of the Service Spillway headworks,

(c) strengthening the hoist towers for the outlet gates of Tunnels 3,4 and 5, and

(d) construction of an underwater dike upstream of the right abutmenttunnel inlets or other means to restrain the sediment delta in theevent of an earthquake of sufficient magnitude to trigger underwaterslides which might choke the tunnels (para 8.08).

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8.08 Studies of Reservoir Sedimentation. The Indus River carries largequantities of sediment. The problem of loss8 of reservoir storage volume asthe sediment is deposited in Tarbela Reservoir has been studied for manyyears. Early studies indicated that Tarbela Reservoir would be filled withdeposited sediments in about 50 years. Initial storing of water was duringthe summer of 1974; 1983 was the tenth year of storlng water. During each ofthese years sediment has been deposited both on the reservoir floor as a thinlayer of very fine sediments (which has improved the performance of theupstream blanket) and at the upstream end of the reservoir where coarsersediments are forming a delta which has been advancing slowly downstream.The accumulation and movement of these delta deposits is being monitored bysurveys which have been made eacn year since 1979. Analysis of these dataindicate:

(a) annual accumulation (1974-83) of 100-140,000 acre-feet of sedi-ments moving downstream as a wedge (at this rate of siltation asomewhat longer reservoir life is suggested);

(b) the wedge will reach the dam in about 1995 but probably notbefore that date; and

(c) the top slope of the wedge will be about 2.5 ft/mile, and thedepth of the sediments at the dam will be about 200 feet.

If this is the situation that develops, two courses of action should beconsidered:

(a) some means to prevent the sediment wedge from closing the diver-sion tunnels, such as an underwater dam may be necessary; and

(b) some means to scour sediments from the reservoir, e.g. if mini-mum reservoir levels which would expose the stop of the sedimentwedge were held for a period of about a month each year, theriver flows during this period may scour a portion of the pre-vious year's sediment deposits from the reservoir, thus prolong-ing the life of the reservoir.

As a result of the data analysis and discussion, an investigation and a studyprogram is now in progress. This program includes:

(a) measurements of river sediment concentration and gradation tomore accurately characterize the deposition regimen and scourpotential;

(b) exploration and testing of delta sediments to determineliquidification potential; and

(c) further studies of the mechanisms of and potential for tunnelclogging and methods for tunnel clearing.

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ChAPTER IX. OPERATING PERFORIJANCE

9.01 Tarbela Dam Project has made all planned water deliveries since 1975and all planned production of hydroelectric power since 1976 in spite of thegreat activity and demands of the remedial/repair program.

9.02 Total annual quantities of water released from Tarbela Reservoir forirrigation use and total annual quantities of electric power generated areshown in the following tabulation:

Year Water Released Electric PowerJuly-June for Irrigation Generated

(MKWH)

1975/76 3.33 -1976/77 9.07 138.31977/78 10.00 3,367.21978/79 8.71 3,726.01979/80 9.91 4,123.01980/81 10.63 4,128.81981/82 11.33 4,200.51982/83 9.12 5,228.2 /a

TOTALS 72.10 24,912.0AVERAGES 9.01 3,114.0

/a Increase from previous years reflects addition of units5-8 during the year.

9.03 WAPDA is in the process of assuming full responsibility for the-&M program at Tarbela Dam Project. As noted in para 8.01, initial O&Mactivities began in 1975. It also was noted in para 8.03 that certainproblems had adversely affected the development of the O&M program. Para8.04 noted that supplemental foreign exchange resources had been made avail-able to develop a strong O&M capability. Close attention, strong management,adequate financial resources, strict adherence to tight schedules andnational recognition of the unique and critical nature of Tarbela willclearly be required to develop and carry out the necessarily strong O&Mprogram.

9.04 Development of O&M Program. The O&M program for Tarbela has been thesubject of continuing dialogue be-tween WAPDA and the Bank with the objectiveof developing a fully comprehensive scheme. The first separate budget forthese activities was made in 1976. The O&M organization has progressivelyhad an expanded role, taking over responsibility and control of civil, elec-trical and mechanical facilities upon completion by the construction contrac-tors. Planning and implementation of the O&M program is the responsibilityof WAPDA. TAMS has developed the necessary monitoring organization, com-pleted detailed drawings, gathered manufacturers instructions, and is cur-rently preparing operation and maintenance manuals for WAPDA O&M staff. Gibbhas been continuously reviewing the evolving O&M program.

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9.05 In addition to these ongoing long-term activities, there have alsobeen five specific reviews of the 0&M program. First, Gibb submitted areport in early 1978, generally setting forth the required scope of the O&Mprogram and progress to that time. They have since reported at regularintervals on the progress being made by WAPDA. Second, Harza, in 1978reviewed tool, equipment, and spare parts requirements for O&M. Third, in1979 a consultant to the Bank assessed and reported on the status of O&Mwork, WAPDA's preparedness for greater responsibility, and areas where theprogram was lagging. Fourth, in 1980, Impregilo reviewed needs for heavyequipment, workshops, and stores for O&M activities. Fifth, in 1982, aconsultant to the Bank reviewed the O&H programs related to themechanical/electrical facilities.

9.06 The Tarbela Dam Project Office is headed by a General Manager andProject Director who reports to Member Water at WAPDA headquarters in Lahore.The General Manager and Project Director is responsible for all civilfacilities including the repair/remedial program. The Tarbela Power Plant isheaded by a Chief Engineer and Project Director who reports to the GeneralManager, Generation at WAPDA headquarters in Lahore. The Chief Engineer andProject Director is responsible for the powerhouse 0&M and additions togeneration facilities. He also is responsible for 0OM of the spillway andtunnel gates. This division between water and power interests at all levelsin WAPDA has been a concern to the Bank since it could lead to lack of coor-dination and duplication of resources. The matter is under consideration byChairman, WAPDA.

9.07 The remaining work of the remedial/repair program will be completed

by early 1984. IRC, the contractor, has already begun to demobilize and willhave closed up workshops and removed most equipment by mid 1984. WAPDA willthen carry full responsibility for the O&M program with its own resources.

9.08 Progress of WAPDA as at August 1983 in the several areas of takingover full responsibility for project O&M is as follows:

(a) Staffing. There are about 1,100 sanctioned positions in theO&M organization. A number of these positions are as yetunfilled and as pointed out previously (para 8.03(d)) low staffsalaries and other factors have made it difficult to recruit andretain staff. This problem has been discussed with WAPDA manytimes and the Bank has suggested that WAPDA review the situationas a matter of urgency.

(b) Shop Facilities. All shops will be completed by early 1984.

(c) Equipment, Spare Parts and Supplies. Most of the initialinventory of equipment, spare part and supplies is at site.Funds are available (para 8.04) for additional equipment tocomplete the initial inventory and to purchase additionalequipment or to add new types of equipment if the need develops.

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ChAPTER X. FINANCIAL PERFORMANCE

10.01 As previously pointed out, the Settlement Plan formed the basis ofthe Indus Water Treaty and the Indus Basin Development Fund Agreement. Thetotal resources of the IBDF amounted to US$894 M (US$632 M in foreign cur-rency). By the time contracts had been awarded for the first phase of theworks the estimated total costs, excluding Tarbela, had risen to nearlyUS$700 N (over US$450 M in foreign currency).

10.02 In April 1964 a Supplemental Agreement increased the total resourcesof IBDF to US$1,209 M (US$946 M in foreign currency). By March 1968 allreplacement works east of the Jhelum had been completed and it could be seenthat sufficient funds were in hand to complete the replacement works witha surplus remaining which could be used for Tarbela. These remaining funds,together with other contributions went into the TDF. The TDF Agreement wassigned May 2, 1968.

10.03 As a consequence of the damages in 1974, additional finance in theamount of US$37 M was provided in 1975. A second supplemental agreement in1978 provided an additional US$79 M.

10.04 An additional US$ 32 M was made available by the EEC, an EEC SpecialAction Credit and from insurance recoveries. Further GOP arranged for con-tributions totalling US$ 102 M. However, as these contribution were not tobe made direct to TDF it was necessary to provide the finance to bridge thetime between the disbursements being made from TDF until reimbursements werereceived from the separate funding agencies. Although this bridging financeresulted in additional costs to the Administrator, these were accepted in theinterest of satisfactory and timely completion of the project.

10.05 In addition, Pakistan has made very large contributions of localcurrency to both IBDF and TDF as well as financing the entire costs of TunnelNo. 5, the power plant and the primary transmission lines.

10.06 The following table details TDF disbursements for each calendar yearin millions of US$ equivalents as at December 31, 1982:

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Disbursed Reimbursed Net ForeignLocal Foreign Foreign Currency

Year Currency Curreny Currency Disbursed

1968 10,400 12,988 - 12,9881969 97,300 82,312 - 82,3121970 62,750 77,150 - 77,1501971 88,899 133,782 - 133,7821972 60,256 75,077 - 75,0771973 29,489 25,076 - 25,0761974 35,684 40,563 - 40,5631975 35,291 59,854 - 59,8541976 23,146 32,323 - 32,3231977 11,958 19,414 - 19,4141978 24,159 22,629 - 22,6291979 42,309 26,257 - 26,2571980 50,347 42,975 8,863 34,1121981 56,468 45,382 16,238 29,1441982 25,188 28,755 28,919 ( 0.164)Totals 653,644 724,537 54,020 670,517

10.07 The total amount of both foreign and local currency flowing firstthrough IBDF and then through TDF was about US$2,300 M. Of this amount aboutUS$1,400 M went to Tarbela.

10.08 The Bank has been Administrator of both funds through this longperiod and played an important role in fund mobilization. In the managementof IBDF and TDF the Bank wqas greatly assisted by Sir Alexander Gibb & Part-ners (para 5.07).

10.09 By any measure, this cooperative international financial effort hasbeen successful and a credit to the international community, GOP, WAPDA andthe Bank.

10.10 Details of the financial program are presented in ANNEX 4.

CHAPTER XI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT

11.01 Considering the physical, financial and management magnitude andcomplexity of the project, the unexpected ocurrences, the many years involvedand the present successful near completion of the project, no strongcriticisms can be leveled at any of the parties or of the cooperative andcoordinating arrangements that were followed. Rather, the world's largestdam, the product of their work and cooperation, without precedent in manydimensions, on a huge river and in a poor geologic environment, is productivebeyond expectation, a tribute to international cooperation, and a monument ofwhich Pakistan and its people are proud.

11.02 The Borrower, the Government of Pakistan, implemented the Projectthrough WAPDA. Reflecting the fact that Tarbela Dam was Pakistan's largestcivil works investment, GOP and WAPDA gave, and continued to give, theproject high priority. The several Chairmen, WAPDA, have given the project

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their personal attention as have high officials in the concerned ministries.It is also clear that WAPDA has assigned some of its beat personnel to theproject. The project management is of high quality although in some areasadditional experienced supervisors and managers are needed at middle andhigher management levels.

11.03 There is a pervasive problem relating to staffing of the O&Morganization; that of recruiting and retaining good and experienced people(paras 8.03(d) and 9.08(a)). An inconsistency in the levels of allowancesas between different disciplines coupled with the demand in the Middle Eastfor skilled workers at high rates of pay have combined to disrupt efforts tocreate a strong, capable and permanent work force at Tarbela. GOP/WAPDA needto reassess existing policies so sufficient inducement is given by way ofadequate and equitable remuneration and career and promotion prospects toensure that experienced staff are available at all levels, reflecting theunique and critical national importance of the project.

11.04 Integration of Tarbela Into National Water System. The LieftinckReport (see ANNEX 7, item 4) pointed to the need for coupling of waverdevelopment with agricultural development if the full benefits of waterdevelopment were to be realized. Efforts to accomplish thir with respect toTarbela have fallen short in a number of areas: no reviseet allocation (amongprovinces) has so far been made of the new yield from Tarbela and improvementis needed in integrating these new water supplies with othler supplies forbest use. Complimentary programs for rehabilitating, modernizing and expand-ing the existing irrigation systems and modernizing agricclture by wider useof technical inputs, programs of rehabilitation of irrigation systems,improving water regulation practices and on-farm water management, reducingsubsidies, increasing water charges, providing drainage and water qualitymanagement and strengthening infrastructural support for agriculture, are inplace and although some are moving slowly there is constant improvement.

11.05 Need to Strengthen O&M Capability and Funding Performance. As pre-viously pointed out (paras 8.02-8.04) development of the 0&M program has beenslow and is behind schedule. Although additional attention and funds (para8.04) have been directed to this program, much remains to be done to assurethe long-term safety of the project. In addition to properly trained andmotivated personnel, adequate and fully equipped workshop facilities, readilyavailable equipment, supplies, technical support and adequate funds, thereneeds to be an increased recognition in all agencies of the government thatTarbela's care through proper maintenance, particularly the required funding,must have a national priority. In the future, when requests for funds forTarbela O&M will have to compete with requests of all other programs, it willbe especially important that GOP recognize the critical nature and importanceof Tarbela.

11.06 Covenants and Status of Compliance. A number of covenants have beenincluded in the the Tarbela loans and credit. All covenants have been com-plied with although the Bank has pointed out that WAPDA's difficulty anddelay in filling sanctioned positions in the O&M organization could affectWAPDA's ability to meet covenants which state 'The Borrower shall cause thedam and other facilities included in the project -- (to be)-- operated and

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maintained in accordance with sound irrigation and electric utility prac-tices." 1/ (see ANNEX 5 for covenants and status of compliance).

CHAPTER XII. ECONOMIC RE-EVALUATION

Overview

12.01 Overview. Hydroelectric projects,2/ dam/barrage and link canalfacilities 31 on the Indus and its tributaiies figure prominently in theeconomy of Pakistan. Of the estimated potential 10,000 MW that could beeconomically generated in hydro-electricity, about 35% has been harnessed todate. Such facilities account for over half of Pakistan's current powergeneration capacity (hydro-electric and thermal). With doubling of Tarbelapower to 1,400 MW in 1982 on completion of a second power plant, its economiccontribution was enhanced further, and plans are in place for development toover 3,000 MW.

12.02 In terms of irrigation benefits, the main purpose of the reservoirat Tarbela, as well as those at Mangla and Chashma is to store water in thesummer flood season, when river discharges are greatly in excess of irriga-tion requirements, for use in the rabi (winter) season, when the main foodcrops are grown but natural river flows are low and variable. In addition,such facilities enable regulation of river discharges and a matching of canaldeliveries to rather inflexible time patterns of crop water requirements in away not possible formerly. Thus, the reservoirs, Tarbela in particular, haveenabled significant expansion of rabi cropped area and, by providing regu-lated water supplies have also made the use of yield-augmenting inputs, suchas improved seeds and fertilizers, as well as improved on-farm irrigationpractices technically justified and financially rewarding to farmers.

12.03 Tarbela, providing an estimated 12.3 BCM of average annual irriga-tion irrigation releases, services a system of canal commands of about 8.8 Mha CCA, about 44% of the nation's cultivated area and 53% of its irrigatedarea. By 1979-80 rabi cropped area within the system had expanded to 4.0 Mha, yielding a 25% increase over the 1970/71-1974/75 average pre-Tarbela areaof 3.2 N ha. About 75% of this increment was attributable to increased rabiwater availabilities made possible by Tarbela investments; the balance in

1/ Essentially this same covenant is included in Loan Agreement 548-PAK(Section 5.01(b)), Credit Agreement 581-PAK (Section 3.02), Credit Agree-ment 771-PAK (Section 3.02(a)) and Special Action Project Agreement51-PAK (EEC) (Section 3.02(a)).

2/ In addition to Tarbela, other large hydroelectric projects are Mangla onthe Jhelum River (800 MW) and Warsak on the Kabul River (240 MW).

3/ Nineteen major barrages-cum-headworks divert water from the main riversfor irrigation use and twelve major link canals transfer water betweenrivers

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large measure was due to increased exploitation of usable groundwater resour-ces. By 1980, about 80% of the incremental rabi area within the Tarbelacanal command system was planted to wheat, producing about 800,000 tons ofincremental grain, or about 22% of the national increase (3.6 M tons) overpre-Tarbela levels (7.2 M tons). 1/ This incremental wheat production fromadditional Tarbela-related irrigated area exceeds the 75% reduction in wheatimports since the mid-1970s of about 750,000 tons. At present, incrementalrabi irrigation supplies from Tarbela are estimated to provide about Rs 1,500M p.a. in net agricultural production benefits (expressed in mid-FY83 con-stant economic prices) from resulting incremental rabi cropped area.

12.04 Economic Analysis of the Tarbela Project. In recognition of theimportance of Tarbela investments to the Pakistan economy, this report recon-firms the economic viability of the total Tarbela complex, including recentlyapproved additions to maintenance capital plant. Concerning Tarbela'seconomic impact, a 1967 Bank-sponsored feasibility study stated:

"The Tarbela Dam is such a strategic element in the integratedprograms proposed that it is extremely difficult to quantify thecontribution which it makes itself to increased production. Never-theless the Bank Group tried to measure this contribution and itbelieves that, to the extent it is measurable, a reasonable conserva-tive range for the rate of return would be about 9-13 percent."

Since this feasibility study and start of implementation, project costs haveincreased significantly, due primarily to the remedial/repair program (para7.01 et seq). There have also been delays in downstream investments inirrigation and drainage works as well as continuing inadequacies in watermanagement, extension, and other agricultural services -- points that wereaddressed under the recent Revised Action Programme (para 2.10). On theother hand, new high yielding crop varieties which benefit relatively morefrom irrigation have become available, and economic value of agriculturalproduction and electrical energy attributable to the Tarbela Project haveincreased sharply thereby mitigating the impact of higher project costs.Likewise, the economic impact of Tarbela was strengthened by the expeditiouscompletion of initial works, and although the operational filling of thereservoir was delayed one year until the summer of 1975, the reservoir hasproduced each year its full yield of regulated irrigationi water suppliesdespite ongoing remedial/repair work. Further, the initial power plant beganproduction on schedule in FY76 and has continued operation without interrupt-ion. Based on re-analysis, considering all incremental capital and recurrentcosts, incurred and projected, and estimated agricultural and power benefitsvalued at border prices, the Pakistan economy is realizing an economic rateof return on Tarbela investments of about 12.5%. Based on quantified

1/ The balance of incremental wheat production has been attributable toother new irrigated area resulting from greater exploitation of usablegroundwater (both public and private tubewells), and from higher produc-tion on traditional area with more regulated water supplies (surface andgroundwater) and higher fertilizer use. The economic analysis of theTarbela Project described herein excludes Tarbela's contribution toincreased productivity on traditional rabi cropped area.

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benefits discussed below, relative agricultural and power contributions tothe present worth (PWOR) 1/ of total estimated benefits are 27% and 73%,respectively (see ANNEX 6, Table 5). 2/ 3/

12.05 The economic real flow for the project is provided in ANNEX 7,Table 4, with a full referencing of underlying assumptions. The following,however, outline the principal assumptions of the economic analysis:

(a) Project Life. The project has been assumed to have a life of50 years 4/ from the start of construction in FY68 (see ANNEX 6,Table 3). Irrigation and power production both began in FY76.

(b) Agricultural Benefits. As indicated in paras 12.02-12.03 aprincipal benefit derived from incremental Tarbela irrigationwater availabilities has been the expansion of rabi croppedarea, 70-80% of which has been planted to wheat, the staplefoodgrain of Pakistan. By means of regression analysis, therelationship between water supplies--both surface andgroundwater--and rabi cropped area was estimated using data fromthe ten Tarbela canal command groups covering the pre- andpost-Tarbela period of 1970/71-1979/80. Because data weresufficiently detailed and to reflect better the importance oftimeliness of water availabilities to farmers' decision-making,surface water deliveries during the critical land preparationmonths of October and November were used in the analysis (seeANNEX 6, Table 3). As a result, these two water variables(surface and groundwater) explained 85% of the variation in rabicropped area over the period analyzed. With high statisticalsignificance, elasticities between surface water deliveries(October-November) and rabi cropped area and between tubewellpumpage and rabi cropped area were estimated at 75% and 23%,respectively. Using the estimated relationship between surfacewater supplies and rabi cropped area, incremental area withTarbela supplies was calculated from predicted values. Sincerabi wheat accounted for the major portion of total incrementalarea within the Tarbela canal command system during thepost-Tarbela period, irrigated rabi wheat was used as the repre-sentative crop in estimating total net benefits from the

1/ Streams discounted at 10% p.a, the assumed Opportunity Cost of Capital(OCC) in Pakistan.

2/ Assuming development of Tarbela hydroelectric potential through Unit 12,or upto 2,100 MW, by 1980, the Lieftinck Report predicted that power andagriculture would represent 25% and 75%, respectively, of total Tarbelabenefits. As explained in para 12.06 (c), the current analysis studiedpower development only through Unit 10 (FY86).

3/ Based on incremental agricultural production before adjustment forincremental crop production costs.

4/ Para 8.08.

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incremental cropped area attributable to Tarbela releases. Basedon historical yield records from the Tarbela canal commandsystem, incremental production and net benefits were estimatedfor past years and for the remaining project life. See ANNEX 6,Table 2 for wheat input/output assumptions.

(c) Power Benefits. Power benefits from Tarbela hydroelectric unitswere measured in terms of the savings in investment, O&M, andfuel costs for alternative thermal facilities that would benecessary to provide an equivalent input to the national grid,based on past and projected monthly demand. Necessary thermalcapacity required to provide the same energy generation asTarbela on an annual basis was examined. The analysis includespower development at Tarbela through Unit 10, scheduled forcommissioning in 1985, or up to 1,750 MW. Capacity expansionhas not been included beyond this current program since no workschedules or detailed feasibility studies have been prepared orwhich to base estimates. Estimation of thermal alternativecapital costs has been based on a World Bank estimate of US$800per kW in mid-1980 prices, or about US$870 per kW in mid-FY83prices. Because Tarbela facilities produce chiefly baseloadpower, the thermal alternative has been considered to be aseries of steam plants fueled by residual oil. It was estimatedthat alternative residual oil requirements would grow from about0.03 M tons in FY77, at the start of Tarbela power generation,to 2.3 M tons in FY88 at full development to Unit 10. Fuelneeds were based on an assumed output of 4,000 kWh per ton offuel (see ANNEX 6, Table 4).

(d) Prices. For internationally traded commodities, economic pricesat farmgate level were derived from past and projected(1975-1995) world market prices expressed in December 1982currency values. Appropriate adjustments were made for freight,handling, and quality differentials. Local costs and domesti-cally-priced benefits were adjusted to border basis throughapplication of appropriate conversion factors, the principal onebeing a Standard Conversion Factor (SCF) of 0.9. Year-specificprices have been used for inputs and outputs over the FY76-95period, after which prices were assumed to remain unchanged inreal terms. Regarding residual oil pricing, an import equiv-alent has been assumed since quantities required to supplyalternative thermal plants (para 12.05(c)) would far exceedrecent levels of residual oil exports, averaging 0.6 M tons overthe FY77-81 period, 1/ and those likely in future. Input andoutput prices used in the economic analysis are summarized inANNEX 6, Table '.

(e) Tarbela Costs. All incremental costs of the Tarbela Projecthave been incorporated into the analysis, including those

1/ Over this five-year period, a maximum was reached in FY80 with 880,000tons.

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associated with construction (initial works as well asremedial/repair activities), power installations through Unit10, resettlement of affected persons and utilities, Tunnel No.5, O&H plant, transmission lines, and recurrent expenditures ofTarbela's Water and Power Wings.

12.06 Risks. Based on the above economic analysis of the Tarbela complex,the following section considers some of the possible risks associated withthe Tarbela Project. Problems encountered since water was first impounded atTarbela in 1974 have been substantial (para 7.01 et seq). Prompt action hasbeen taken to deal with these, and measures to safeguard the Project havebeen given highest priority by GOP. Work programs to repair and strengthenstructures have been formulated with the advice of international experts, andhave been based upon results of model tests. These work programs have beencarried out by the Contractor effectively and on schedule within difficulttime constraints imposed by seasonal river conditions. however, given theunprecedented size and complexity of the Tarbela Project, the possibilitycannot be ruled out that further technical problems may arise in the future.Based on sensitivity test results presented in ANNEX 6, Table 5, however, theTarbela Project's economic viability displays considerable robustness to costincreases or benefit shortfalls. Actual costs and benefits over the FY68-83period are known, implying that significantly higher cost overruns/benefitshortfalls must occur in the future to yield the same overall sensitivityresults. To minimize risk, the Tarbela Project is being monitored con-tinuously with the assistance of an elaborate system of surveying and record-ing equipment. Also, GOP has agreed to establish adequate O&M arrangementsfor Tarbela and to arrange regular dam inspections. It is hoped, therefore,that with measures already taken or planned, including investments under theReservoir Maintenance Facilities Project (Loan 2247-PAK), future problemswill be relatively routine and manageable. In addition, institution buildingin terms of technical assistance and training carried out and continuedefiectively will reinforce and enhance the utilization of O&M capital plant.In addition to the immediate task of ensuring that the Project is completedand functions satisfactorily, intensive efforts will be required to reap thefull benefit of the additional irrigation water from the Project. This willrequire, inter alia, complementary downstream investments, strengthening ofagricultural extension services, provisions of inputs, improvement of watermanagement and appropriate government pricing policies. These requirementsare being addressed by other projects assisted by the Bank as well as in thecontext of the on-going Structural Adjustment Loan and Credit.

CHAPTER XIII. BANK PERFORMANCE

13.01 As previously mentioned, the Bank has had three primarily roles overthe long period of involvement (1953-present) in the Tarbela Project. Theseprimary roles involved (1) settlement of water-related issues betweenPakistan and India, (2) mobilizing and administering funds, and (3) review oftechnical aspects and the construction program.

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13.02 A number of senior Bank officials have been involved as well asmembers of project and program staffs and staff of Legal and Loan depart-ments. In addition, the Bank employed two firms, Sir Alexander Gibb & Part-ners, consulting engineers, and Coopers & Lybrand, chartered accountants,as described in paras 5.09-5.10.

13.03 Although there were difficult times and serious problems, the overallpicture and the result are clearly a great success. Through all of thevarious phases and incidences the Bank performed well and in particulardemonstrated the flexibility to adjust quickly to changes and emergencies.

13.04 Some of the particularly successful steps taken by the Bank were:

(a) The system of contractor prequalification which was institutedby the Bank in 1960 at the commencement of Indus Basin Projectand which is now a standard for major construction almostworld-wide, and where Tarbela Joint Venture was the selectedcontractor, was important to the successful completion of Tar-bela Dam and the remedial/repair program.

(b) Procedures for financial control and fund administration evolvedby the Bank for Indus Basin Project, where some Bank respon-sibilities were assumed by Gibb, worked well at Tarbela.

(c) The remarkable success of the Indus Basin Project generated themomentum and technical base for a smooth progression by the Bankto fund mobilization and administration, technical review andproject supervision for the subsequent work at Tarbela. Thiscontinuous and broad involvement by Bank staff was particularlyuseful when the emergency occurred in 1974 and in the subsequentyears of the remedial/repair program. The Bank's policy andsystem of delegation also worked smoothly where much of the workon the project was dealt with at lower levels in the Bank withtop management personnel being directly involved only at criti-cal phases.

(d) In retrospect, it was clearly important that when the greatemergency of the tunnel failure occurred in 1974 (para 7.01)(1) attention was focused on repair rather than on assessingblame and (2) the coordination meetings of all parties involvedin the repairs were directed at agreeing on action points and asa result served the invaluable purpose of keeping attentionfocused on the repair work so it was done expeditiously.

(e) Employment of an engineering consultant (Gibb) served manyadvantageous purposes. It provided close independent technicalreview, monitoring of details of contract and fund administra-tion, full-time on-site representation, provided communicationchannels, assured complete records and in particular digestedthe enumerable details to direct the Bank's activities to thesignificant and policy issues. The close working relationshipbetween Gibb and Bank staff enabled the Bank to exerciseinfluence on administration of the project without interferencewith the normal relationships of owner-consultant-contractor in

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terms of international civil engineering contract procedure. Itis clear that Gibb's work and performance was indispensable tothe Bank's success as Administrator of TDF.

(f) Full-time assignment of a Bank headquarters project staff personduring the remedial/repair period was advantageous by giving asingle focus in the Bank, improving Bank coordination, givingquick Bank analysis and response to emergencies and avoidingdivided responsibility and part-time participation in this verysignificant and complex project.

CHAPTER XIV. CONCLUSIONS

14.01 The entire Indus Basin Project stands as a monument to internationalcooperative effort, in a large part guided by the Bank.

14.02 The immense system of replacement works consisting of Mangla Dam, sixbarrages and eight link canals was constructed during the period 1961-68;completion in March 1968 was two years ahead of the Treaty deadline. Thecost was US$1,086 M. No other project of such size and complexity had beenconstructed in such record time.

14.03 Tarbela Dam, the last and largest structure of all was begun in 1968and also stayed on schedule. Bringing it into operation was delayed by oneyear, from 1974 to 1975, by the unexpected and large damages on initialfilling of the reservoir (para 7.01). But the continued internationalcooperative effort, focused by all parties on the changed situation, enabledthe work of repair and completion to continue without delay and withoutinterrupting the operation of the Tarbela facilities to produce new watersupplies and electric power.

14.04 The project has been as productive as envisioned and has achieved itsobjectives of water storage and power generation and its economic rate ofreturn is at least equal to the feasibility study estimate (para 12.04).

14.05 The advantage of experienced (pre-qualified) contractors, selected byinternational tendering, with access to the best new equipment on the worldmarket and with inducement of a well planned bonus scheme has been clearlydemonstrated at Tarbela.

14.06 The response, assistance and cooperation of the donor community wassuperb. Particularly helpful was their willingness to place the money at thedisposal of the Bank as a common pool. The resulting flexibility in manage-ment of TDF was needed and useful during the periods of emergency and duringthe remedial/repair program. A lesson learned is that for such a largeproject, with numerous donors, a common pool of funds results in moreflexible fund management to the advantages of the project (para 5.02).

14.07 Management of "tied" funds required additional work and control butno other significant problems were created. In future projects where tiedfunds are managed, contract documents should contain reference to this type

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of funding and the extra documentation required to be provided by the Con-tractor (ANNEX 4, p.1).

14.08 The organizational arrangements which included agreements ondecision-making, control and Fund management (paras 5.13 et seq.) worked wellat Tarbela.

14.09 The group of project consultants (bott firms and individuals) shouldbe closely integrated with the engineering of the project and should havecapability to handle all aspects of the project. To assure this the terms ofreference and the working arrangements should be reviewed regularly to takeaccount of changing circumstances and changing needs.

14.10 The Bank was greatly assisted as Administrator of IBDF and TDF by SirAlexander Gibb & Partners and employment of a similar consultant with similarroles should be considered in the future for large projects where the Bankhas major involvement.

14.11 The importance of the continuity and availability of experienced longservice staff to bridge betweerk and relate past circumstances, decisions andactions to current problems, cannot be over-emphasized in the case of largeprojects where planning, design, construction and bringing into operationextend over a long period.

14.12 The experience of the accidents at Tarbela in 1974 raised significantquestions concerning traditional insurance concepts and practices for majorcivil works. These questions were considered at a special seminar sponsoredby FIDIC in June 1978. Keypointh which emerged (ANNEX 3) were: the tradi-tional CAR policy may not adequately protect large and complex projects;other insurance options may be available; non-insurance is an option thatshould be considered; and, retaining specialized and independent insuranceconsultants should be considered. A subsequent "Status Reportw issued inDecember 1981 by the FIDIC Project Insurance Steering Committee recommended,inter-alia: that prior to finalization of tender documents, project ownersappoint duly qualified risk management advisers whose fees would be financedfrom project-related loans; that proviso be inserted in the FIDIC ContractConditions giving the owner the option of effecting a project insuranceprogram; that changes be made in the language qualifying excepted risk con-cerning design; and that there is a need for a broader and more flexibleapproach in the future especially with regard to design cover.

14.13 The problems at Tarbela can now be seen to have been for the mostpart exceptional and unforeseeable at the then existing levels of knowledgeand experience.

14.14 The restrospect, the full, potentially damaging, effect of the largequantities and high velocities of water on structures on such complex andadverse geology had not been fully appreciated.

14.15 The ad hoc procedures set up to meet the emergency situation workedwell and enabled the project to come into operation with the minimum ofdelay. In dealing with emergencies, un-minuted coordination meetings of allparties, with only action points being recorded, served a valuable purpose ingetting remedial work done expeditiously (para 5.15).

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14.16 There should have been more planning and provision for O&M, including

funds for O&M facilities, equipment, spare parts and supplies, together withpreparation for O&M including staffing and training (para 8.06).

14.17 GOP/WAPDA need to reassess existing policies so sufficient inducementis given by way of adequate and equitable remuneration and career promotiou

prospects to ensure that experienced staff are continuously available at alllevels, reflecting the unique and critical importance of the project (para11.03).

14.18 The key to the long-term safety of Tarbela lies in the hands of theO&M organization. Close attention, regular inspections, strong management,adequate financial resources and national recognition of the unique andcritical nature of Tarbela will clearly be required to develop and carry outthe necessarily strong O&M program (para 9.03).

14.19 Recently completed studies indicate the possible need for some addi-tional future capital works in the mid to late 1980s. These include addi-

tional protection of the plunge pool of the Service Spillway, strengtheningof piers and hoist towers, means to restrain or manage the sediment delta in

the event of an earthquake and contingency plans to unclog tunnels shouldthey be blocked by a sediment slide (para 8.07).

14.20 Tarbela has made significant contributions to engineering knowledge,design and construction. Some of the most significant (para 6.13) relate tothe use of rollcrete, the design and construction of large capacity gates andstilling basins for low level outlets, the use of steel-fiber concrete, thedesign, construction, monitoring and performance of soil blankets to controlreservoir seepage and detection and the treatment of sinkholes.

14.21 Tarbela Dam Project has made all planned water deliveries since 1975and all planned production of electric power since 1976 in spite of the greatactivity and demands of the remedial/repair program (para 9.01).

14.22 The new water supplies made available by Tarbela have not yet beenfully Integrated into the nation's water system. Further, complementaryprograms for increasing agricultural production have moved slowly (para11.04).

14.23 If a Tarbela-like emergency situation should occur in the future,consideration should be given to the four following essential activities:

(a) quick decisive response to save the project;

(b) quick mobilization of funds;

(c) full and cooperative use of all technical expertise; and

(d) fully adequate and continuously available staff to assure thatdesign modifications, model testing and comparison of alterna-tive solutions, stays well ahead of the construction program.It is important that the replaced or revised facilities are the

proper ones and although project safety is the over-riding

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consideration, the need to find the economic solution is impor-tant. The proper and economic solution can only be found byanalyzing all alternatives.

- 65 - ANNEX I

Page 1

PAISTAN

TARBELA DAN PROJECT COMPLETION REPORT

Description of Major Project Facilities

Main Embankment Dam and Blanket. The main embankment dam has amaximum height of 143 m (470 ft) and a crest length of 2,740 m (9,000 ft).The dam has a sloping impervious core supported by well graded granularshells. The core is a blend of angular cobble gravel and silt. Integralwith the dam, as an extension of the impervious core, is an upstream blanketcovering nearly 500 ha (1,235 ac) of the reservoir floor. The blanketprovides under-seepage control for the foundation of the dam which is com-posed of deep alluvial deposits of cobble gravel and sand up to 210 a(700 ft) deep. The upstream shells are of granular material andfree-draining for stabilization of the upstream slope on reservoir drawdown.The upstream slope is protected against wave action by riprap. Downstreamzones intercept drainage and seepage and support the core. The downstreamslope is protected against rain water erosion by a layer of stable andfree-draining material.

Auxiliary Dam No. 1. This dam closes a saddle in the left reservoirrim where a secondary channel in a natural side valley, the Dal Darra chan-nel, circles the left abutment of the main dam. The dam is similar incross-section to the main dam with a sloping core and an upstream blanket.

Auxiliary Dam No. 2. This relatively small dam closes a low saddlebetween the Auxiliary and Service Spillways. Its cross-section is similarto the main dam except it has a steeper core in contact with the rock founda-tion, with no upstream blanket.

Tunnels. The project includes five tunnels, four through the rightabutment and one through the left reservoir rim between the two spillways.The four half-mile long right bank tunnels, each 13.7 m (45 ft) in diameter,follow gently curved alignments through the rock of the right abutment. Atabout mid-length the tunnels have service and bulkhead gates which operate ingate shafts extending up to a gate operation structure located well above themaximum reservoir level. Tunnel No. 1 is connected to the first-stage power-house with generating units 1 to 4. Tunnel No. 2 is connected to theextended powerhouse with units 5 to 8. Units 9 and 10, in a further exten-sion of the powerhouse, also will receive water from Tunnel No. 2 on comple-tion of construction in 1985. Tunnels 3 and 4 are presently used for therelease of irrigation water but may eventually be developed for power. Theleft bank tunnel, also 13.7 m in diameter, was constructed on the initiativeof GOP/WAPDA to augment irrigation release capacity in the May-July period

- 66 -ANNEX 1Page 2

when the reservoir is at low level. It has provided invaluable operationalflexibility. It was separately funded by GOP, engineered by TAMS and NESPAKand constructed by a Pakistani based consortium including TJV.

Spillways. The Service and Auxiliary Spillways are located along theleft rim of the reservoir and discharge into plunge pools and thence into theside valley which returns to the Indus River downstream of the main dam. Thespillways have conventional overflow crests controlled by radial 6ate3. TheService Spillway has seven gates and a discharge capacity of 17,400 m /sec(615,000 cfs) at full pool level The Auxiliary Spillway has nine gates anda discharge capacity of 22,500 a /sec (795,000 cfs) at full pool level.

Reservoir. The reservoir impounded by Tarbela Dam, has, at fullstorage level, a volume of 11.1 M acre-feet (13.7 BCM), a length of about 50miles (80 km) and a water surface area of over 100 sq mi (25,900 ha). Itsmaximum depth is more than 450 feet (137 m).

Power Plant. The power installation includes a powerhouse with eightturbine generator units each with 175 KW nominal rated capacity. Two addi-tional units of the same capacity will begin operation in 1985 to give atotal capacity of 1,750 MW. Present plans are to increase the total capacityto over 2,800 MW with a powerhouse on Tunnel No. 3. Studies also have beenmade suggesting that additional capacity of about 1,000 MW could be gained bya powerhouse on Tunnel No. 4. A switchyard is located on a filled areaalongside the tailrace, opposite the powerhouse. The powerplant, switchyardand transmission facilities were financed with separate funds rot involvingthe World Bank and under separate contracts. Tarbela Power Plant with itspresent eight units represents about 30 percent of the nations total electricproduction capacity and about 40% of WAPDA's capacity.

ANNEX 2- 67 - Page 1

PAKISTAN

TARBELA DAM PROJECT COMPLETION REPORT

Tarbela Project Statistics and International Comparisons

PROJECT STATISTICS

Location Northwest of Rawalpindi 40 air miles

Construction PeriodBeginning of Construction November 1968Stage I, River in Natural bed 2-1/2 yearsStage II, River in Excavated Channel 3 yearsStage III, River Diverted throughTunnels 1 year

Complete Initial Power Installation 1-1/2 yearsTotal 8 years

ReservoirRetention Level (Maximum Storage) 472.44 m 1,550 feet SPD 1/Drawdown LevelDesign (Dead Storage Level) 396.24 m 1,300 feet SPDAssumed for Turbine Operation

(Minimum Power Level) 405.99 m 1,332 feet SPDStorage Volume:At Elevation 1,550 feet (472.42 m) 13.7 BCM 11.1 MAFAt Elevation 1,332 feet (405.97 m) 3.1 BCM 2.5 MAFAt Elevation 1,300 feet (396.22 m) 2.2 BCM 1.8 MAF

leAngth of Reservoir 80.0 km 50 milesMaximum Width of Reservoir(Excluding Siran Arm) 4.8 km 3 miles

Maximum Depth 137.0 + m 450 + feet

Main DanType - Earth and rockfill withimpervious cores; foundationseepage control by upstreamimpervious blanket and downstreamrelief wells.

1/ Standard Pakistan Datum (based on mean sea level at Karachi).

-68- ANNEX 2

Page 2

Crest Elevation 477.01 m 1,565 feet SPDCrest Length 2,743 m 9,000 feetMaximum Height 143 m 470 feetSide Slopes

Upstream 1 in 2.65 -Downstream 1 in 2.0 -

Volume, Including Blanket 126 mcm 165 million cu ydsLength of Blanket 2,147 m 7,700 feetBlanket ThicknessAt Dam 14 m 45 feetUpstream End 3 m 10 feet

Auxiliary Dam No. 1Type - Earth and rockfill foundedon alluvium with sloping imperviouscore and blanket extending tobedrock.Crest Elevation 477.01 m 1,565 feet SPDCrest Length 713 m 2,340 feetMaximum Height 105 m 345 feetSide SlopesUpstream 1 in 2.65 -Downstream 1 in 2.0 -

Volume 15 mcm 20 million cu yds

Auxiliary Dam No. 2Type - Earth and rockfill foundedon rock with impervious core tobedrock.Crest Elevation 477.01 m 1,565 feet SPDCrest Length 262 m 860 feetMaximum Height 68.58 m 225 feetVolume 1.5 mcm 2 million cu yds

Spillways (Two)Type - Gated channels formingService and Auxiliary spillwaysexcavated in the rock on theleft bank, concrete-lined fromtheir crests to flip-buckets,lined plunge pools with outfallchannel to the river.

Crest level 454.76 m 1,492 feet SPDGates

Service Spillway (7) 15.24 x 17.68 m 50 x 58 ftAuxiliary Spillay (9) 15.24 x 17.68 m 50 x 58 ft

Discharge Capacity at Elevation1550 feet (472.42 m)Service Spillway 18,400 cumecs 650,000 cusecsAuxiliary Spillway 23,800 cumecs 840,000 cusecs

- 69 - ANNEX 2Page 3

Design FloodMaximum Inflow 60,237 cumecs 2,127,000 cusecsMaximum OutflowAt Elevation 1,500 feet (472.42 m) 42,200 cumecs 1,490,000 cusec8At Elevation 1*556*8 feet (474.49 m) 47,295 cumecs 1,670,000 cusecs

Maximum Floods of Record at AttockAugust 27-30, 1929 (Gauged) 24,780 cumecs 875,000 cusecs1841 - Greatest Known (Estimated) 56,640 cumecs 2,000,000 cusecs

Outlet WorkFour concrete-lined tunnels, each 45feet (13.7 m) diameter up to gatestructures, 2,400 to 2,700 feet (730to 820 m) long. Service gates - two13.5 feet x 45 feet (4.1 x 13.7 m)fixed-wheel gates in each tunnel plustwo bulkhead gates of same sizeupstream of service gates. Tunnels 1,2 and 3 steel-lined downstream of gatestructure, 43.5 feet (13*3 m) diameter.Tunnel 4, steel-lined downstream of gatestructure, 36 feet (11 m) diameter.Tunnel 4 controlled for irrigationreleases by two 16 feet wide x 24 feet(4.9 x 7.3 m) high radial gates atdownstream end. Tunnel 3 similarlycontrolled.Intake Sill LevelsTunnels 1 and 2 373.38 m 1,225 feet SPDTunnels 3 and 4 353.57 m 1,160 feet SPD

Estimated Discharge Capacity ofTunnel 4At Elevation 1,300 feet 1,770 cumecs 62,500 cusecsAt Elevation 1,332 feet 1,883 cumecs 66,500 cusecs

Estimated Discharge Capacity of eachof Three Power Tunnels (Controlledby Four Turbine-bypass Valve Units)At Elevation 1,300 feet 493 cumecs 17,400 cusecsAt Elevation 1,332 feet 538 cumecs 19,000 cusecs

Release Capability Present Development,one Irrigation Tunnel plus 10 Turbine-bypass Valve UnitsAt Elevation 1,300 feet 3,002 cumecs 106,000 cusecsAt Elevation 1,332 feet 3,285 cumecs 116,000 cusecsAt Elevation 1,492 feet 4,361 cumecs 154,000 cusecs

- 70 - ANNEX 2

Page 4

Additional Left Bank Irrigation TunnelSimilar to Tunnel 4 with SupplementaryDischarge Capacity at 1,500 feet SPD(457.18 m) 2,282 cumecs 80,580 cusecs

Power PlantPresent Installation - 8 turbinegenerator units, 4 each on tunnels1 and 2. Two additional units onTunnel 2 to be completed in 1985.Turbines - Francis type, 239,000 HPat 136.4 rev/min at 378 feet (115 m)net design head.Generators - Rated 175 MW but capableof 15 percent continuous over loadMaximum Normal Tailwater Elevation 339.83 m 1,115 feet SPDMinimum Tailwater Elevation (1 Unit) 335.26 m 1,110 feet SPDMaximum Net Head 133.19 m 437 feetMinimum Net Head 55.77 m 183 feet

INTERNATIONAL COMPARISONS 1/

1. Tarbela is the world's largest volume dam:

(a) Tarbela (1975) 122 mcm (186 million cu yds)(b) Fort Peck (USA) (1940) 96 mcm (126 million cu yds)(c) Oahe (USA) (1960) 70 mcm ( 92 million cu yds)(d) Mangla (Pakistan) (1967) 66 mcm ( 86 million cu yds)(e) Gardiner (Canada) (1968) 65 mcm ( 86 million cu yds)(f) Afslvitdijk (Netherlands) (1932) 63 mcm ( 84 million cu yds)(g) Oroville (USA) (1968) 60 mcm ( 78 million cu yds)

2. Tarbela is the world's seventh highest embankment dam.

Rogunsky (USSR) under construction 325 m (1,066 feet) for 1985Nurek (USSR) under constrution 317 m (1,040 feet) completion(a) Chiooasen (Mexico) (1977) 240 m ( 776 feet)(b) Oroville (USA) (1968) 235 m ( 770 feet)(c) Bennett (Canada) (1967) 183 m ( 600 feet)(d) Trinity (USA) (1962) 164 m ( 537 feet)(e) Gespatch (Austria) (1965) 153 m ( 500 feet)(f) Infiernillo (Mexico) (1967) 140 m ( 492 feet)(g) Tarbela (1976) 143 m ( 470 feet)

1/ As of 1980.

- 71 - ANNEX 2

Page 5

3. Of the w:rld's largest embankment dams, Tarbela has the largest spillwaycapacity.

(a) Tarbela (1976) 42,200 m3/s (1,490,000 cusecs)(b) Mangla (Pakistau) (1967) 31,000 m3/s (1,100,000 cusecs)(c) Oahe (USA) (1960) 24,200 m 3/s ( 850,000 cusecs)(d) Garrison (USA) (1956) 23,400 m /s ( 840,000 cusecs)(e) Fort Randall(USA) (1956) 17,560 m 3/s ( 630,000 cuseCs)(f) High Aswai (Egypt) with 37,000

million m of floodcontrol capacity) 2,300 m Is ( 81,200 cusecs)

4. Of large embankment dams employing an upstream blanket, Tarbela is nearlytwo and a half ti.mes as high as the next largest, and three times as high asthe next largest when designed. High Aswan is not strictly comparable (60 mdeep grout curtain and blanket within the dam), nor are Arrow and Fort Randallwhich are constructed over openwork gravels.

(a) Tarbela (1976) 143 m (470 ft) 2,200 m (7,200 ft) blanket(b) Arrow (Canada) (1967) 58 m (190 ff) 915 m (3,000 ft) blanket(c) Fort Randal (USA) (1956) 49 m (160 ft) 760 m (2,500 ft) blanket(d) High Aswan (Egypt) (1970) 111 m (364 ft) 210 m ( 690 ft) blanket

5. The plunge pool energy dissipation, even for the only part flowsobtaining, is believed to be the greatest in the world for man-made plungepools.

TarbelaService Spillway at 294,000 cusecs, 11 million H1 1/Auxiliary Spillway at 240,000 cusecs, 9 million HP 1/cf. Kariba (Rhodesia) at 213,000 cusecs, 7.2 million HP.

6. The tunnels are uncommonly large in section and excavated volume.

Tarbela4 Tunnels 13.7 m (45 ft) diameter u/s, 730 and 820 m

(2,400 and 2,700 ft) long. (17.4 m (57 ft)excavated bore)

Excavation 820,000 m 3 (1,090,000 cu yds)Concrete 390,000 m (520,000 cu yds)Steel Ribs and Lining 20,000 tons

1/ The design calls for dissipation of 24 and 32 million HP for shortperiods at full discharge in the event of a 'design flood'.

- 72 -ANNEX 2Page 6

cf. Mangla:5 Tunnels 9, 9.4 and 7.9 m (30, 31 and 26 ft) diam.

475 m (1,560 ft) long

Excavation 225,000 m 3 (300,000 cu yds)Concrete 111,000 m3 (148,000 cu yds)Steel Lining 13,000 tons

7. The 13.3 m (43.5 ft) diameter steel tunnel liners were the largest evermade as were the radial irrigation outlet gates 7.3 m high x 4.9 m wide(24 x 16 ft) acting under 132 m (433 ft) head.

8. The stilling basins for tunnel outlets at Tarbela are unique energy dissi-pators for low-level outlets. Basins of comparable intensity of energy dLssi-pation had previously only been employed at the foot of spillways in largedams:

(a) Tarbela (470 ft) (low level outlets, T3 and T4) (1976)95,000 cusecs (Q max) 791 cusecs/ft (q) 120 ft wide.

(b) Dworshak (717 ft) (for outlets and spillway at foot of dam)(1974) (USA) 45,000 cusecs (Q max) 351 cusecs/ft (q)114 ft wide. 190,000 cusecs maximum, but hydraulicpump washes out at 45,000 cusecs.

(c) Bhakra (742 ft) (on spillway at foot of dam) (1963) (India)290,000 cusecs (Q max) 1,115 cusecs/ft (q) 260 ft wide.

(d) Rihand (305 ft) (on spillway at foot of dam) (1962) (India)455,000 cusecs (Q max) 685 cusecs/ft (q) 664 ft wide.

(e) Folsom (341 ft) (on spillway at foot of dam) (1956) (USA)250,000 cusecs (Q max), 1,033 cusecs/ft (q) 242 ft wide.

9. Tarbela was constructed (1968-75) under the largest civil engineeringcontract ever awarded. Many aspects of the project were on, or beyond, theboundaries of then present experience which sometimes required untriedtechniques in solving the problems associated with some features.

- 73- ANNEX3

Page 1

PAKISTAN


Review by FIDIC of Traditional Insurance Coverage

Because of the size and complexity of the project and the problemsthat arose following the 1974 damages, the Tarbela insurance experienceinduced a critical review of the adequacy of the traditional insurance regimefor major civil works. In this connection, FIDIC sponsored a special seminaron insurance fo- major civil works in June 1978, in which representatives ofthe insurance, consulting and contracting industries as well as of owners andinternational agencies participated. The main areas of concern on thegeneral subject of insuring dam risks can be summarized as follows:

- exposure of owners to risks excluded from insurance policies andrisks falling between policies, and especially the problem ofestablishing fortuity and the exclusion of design error;

- uncertainty of cover resulting from difficulty in interpretationof insurance policies;

- costs of effecting numerous insurance policies on any oneproject; and

- delays in settlement of claims, and the cost of recovery ofdisputed claims,

The standard CAR (Contractors All Risks) insurance policy containscertain exclusions; in particular, it does not provide protection againstdesign risks, on the reasoning that defective design is the responsibility ofthe design engineer and not of the contractor. Thus, to avoid liabilityunder such a policy it is sufficient for the insurer to demonstrate that thedesign was unsuitable; however, in order for the owner to hold the designengineer liable it would be necessary to prove that the design was not merelydefective but also negligent. Furthermore, even if the design engineer couldbe held liable, he would generally not have the resources, and could notobtain insurance protection to the extent required, to indemnify an owneragainst substantial loss in a large and costly project.

Several speakers at the FIDIC seminar questioned whether CAR coveragewas suitable for large scale dam projects, while others stressed that theinternational market may have inherent limitations in providing comprehensivecoverage for large scale civil works projects at reasonable prices and thatthe present FIDIC standard Condition of Contract have served the civil works

- 74 -ANNEX 3Page 2

indistry, as well as owners, relatively well for over a quarter century.Still others advocated Owner Procured Insurance (OPI) as a means of premiumsavirgs, minimizing conflicts of interest, and even extending the horizons ofthe traditional CAR cover to include design errors.

It should be noted that the Bank itself does not insist on its bor-rowers obtaining CAR or any other specific type of insurance. However, FIDICStandard Conditions of Contract (International) for Works of Civil Engineer-ing Construction, including the latest edition (March 1977) (which is fre-quently used by Bank borrowers), does require that the contractor place suchinsurance.

The points which emerged from the professioral debate which ensuedfrom the Tarbela experience were:

(a) large and complex projects, particularly those on th.i frontiersof technology, may not be adequately protected by the traditionalCAR policy;

(b) as a result of advances in the market since the Tarbela insurancewas placed, OPI and other insurance options may become availableas alternatives to the traditional CAR Policy;

(c) the decision to insure should not be taken for granted. Non-insurance is an option to be considered on the basis of carefulassessment of the risks and the willingness and/or ability ofthe owners to carry such risks, and the willingness of thefinancial backers to finance projects in these conditions; and

(d) prospective owners of large scale high-risk, civil works projectsmay consider retaining specialized and independent insuranceconsultants to participate in the analysis of project risks,to advise about the potentials and limitations of availableinsurance options, and, if required by the owner, to assistin preparing an insurance package.

In December 1981 the FIDIC Project Insurance Steering Committeeissued a "Status Report". The report deals with projects in thich the civilengineering contract accounts for the major part of the total costs. Theconclusions of the Committee were:

Quote:

1. The Committee is concerned at the wide range of situations inwhich one or more of the parties in a civil engineering projectmay not be adequately protected for their respective responsibili-ties or liabilities by insurance. Some of these situations havedeveloped in the past and have led to disputes and to financialembarassment. On future projects, these situations are likelyto have even more serious consequences. There is an urgent needfor reducing the areas of insurance shortfall.


2. To ensure better appreciation of and provision for the risksassociated with the construction of major (and/or complex) civilengiaeering projects, the Committee recommends:

- that prior to finalization of Tender Documents, Owners ofsuch projects appoint fully qualified Risk Management Advisers.

- that Lending Institutions allow fees payable to RiskManagement Advisers for initial and ongoing services to befinanced from project-related loans.

- that a proviso be inserted in the FIDIC Contract Conditionswhich gives the Owner the option of effecting a projectinsurance program.

- that consideration be given to omitting the word "solely"from the excepted risk concerning dLsign. Although itcould not be claimed that this would remove all contention,it should reduce the possibility. In doing so, however,one would reduce the responsibility of the Contractor andincrease the exposure to the Owner. This underlines theneed for broader provision of cover, particularly for theOwner's design exposure. At the same time, Contractors'contractual liability for damage to works will then moreclosely equate with the Contract Works insurance coverthat they are able to purchase.

3. The Committee recognize that the insurance industry hastraditionally given a constructive response to requests forextended or new forms of coverage whenever there was areasonable expectation that sufficient demand for suchcovers would develop over time at adequate premium levels.

It is recommended that all parties concerned and in particularRisk Management Advisers and Insurance Brokers impress uponthe insurance market the need for a broader and more flexibleapproach in the future especially with regard to design cover.

4. The Committee considers that the timely appointment of RiskManagement Advisers for a growing number of civil engineeringprojecte will ensure that the insurance needs of all interestedparties will be properly appraised at an early date and will bepresented to Insurers in such a manner as to enable Insurers tomeet these needs.

End of Quote.


PAKISTAN


Tarbela Financial Program

Following the completion of the report justifying a dam on the IndusRiver at Tarbela (ANNEX 7, item 4), the Bank agreed in accordance wit1l theterms of the 1964 Supplemental Agreement that the balance from IBDF estimatedat US$318 million, would be available for the construction of Tarbela Dam.There then remained the problem of whether sufficient external contributionswould be forthcoming to complete the financing plan for the Tarbela Projectestimated to cost US$827.5 million in total of which US$492 million was therequired foreign currency.

Discussions with members of the Pakistan consortium indicated thatsome US$99 million equivalent could be provided within their aid programs forPakistan, but this amount together with IBDF balance was not sufficient tocover the estimated foreign exchange requirement.

The US Government through Export-Import Bank and the Bank thenoffered to provide financing on normal terms to Pakistan in the amount ofUS$75 million to complete the financing plan. However, this was to beresidual financing which would be cancelled or refunded if not needed.

The Tarbela Development Fund Agreement 1968 was formulated on thisfinancing plan. The Agreement provided that the IBDF balance would be theprimary source of funds for the Project and would be treated as the basicworking capital of the Fund. The contributions from Canada, France, Italyand the United Kingdom were initially for expenditure within each countryonly (tied), I/ and amounted to an aggregate of US$99 million equivalent andwould be available as a second source of funds. The US contribution of US$50miilion (for purchases in the United States) and the Bank contribution ofUS$25 million equivalent would provide the third source of financing to theextent that the other two sources were insufficient. All rupee expenditureswould be met by contributions from Pakistan.

1/ Management of "tied" funds required additional work and control but noother significant problems were created. In future projects where tiedfunds are managed, contract documents should contain reference to thistype of funding and the extra documentation required to be provided bythe Contractor in a similar manner to the "Special Plant" requirementsset out in the basic Tarbela construction contract documents (Contract651). If details of documentation required are not known, then a generalreference would suffice so the Contractor is aware that he has an obliga-tion to provide the necessary additional paperwork in order to obtainrelease of the tied monies.


The Project financing plan excluded costs of land acquisition andresettlement and the purchase of the power equipment.

The successful bid for construction of the civil engineering worksawarded to Tarbela Joint Venture (para 6.03) contained a foreign currencyrequirement equivalent to US$360 million. Although this amount was wellbelow the total of contributions offered to TDF, together with the IBDFbalance, the total costs of the Project to be met from TDF required to takeaccount of the foreign currency portion of other costs namely:

(a) Preliminary works not previously paid for from the IBDF priorto the signing of the Tarbela Agreement on May 2, 1968.

(b) Other construction costs, including the cost of those supplycontracts reimbursable from the TDF, bonus which might be earnedby the main contractor and allowance for any contingencieswhich might occur during the construction period.

(c) Engineering and site costs, covering WAPDA's costs and the costsof WAPDA's Project Consultants (TAMS) and also their GeneralConsultants (Harza).

(d) Miscellaneous off site costs, and the cost of IBRD's supervisionof the project, including the Administrator's technical andfinancial consultants.

As stated above, the March 1968 financing plan estimated the totalcost of Tarbela at US$827.5 milllon including a foreign currency element ofUS$492 million. However, these figures included an allowance for preliminaryworks, the cost of part of which was to be met by GOP for rupee expendituresand from IBDF for the foreign currency. This latter amounted to US$8 mil-lion. The project cost estimate was subject to revision following a reviewby the Administrator's Consultants at the beginning of each year. Theestimate of January 1974, prior to the first filling of the reservoir and theresultant extensive remedial works, increased the total cost to US$954 mil-lion, of which US$523.3 million was the foreign exchange content. Thisamounted to an increase in total of US$51.5 million, of which US$39.3 millionwas in foreign currency. Breaking the cost down under the headings above,a comparison of the allowances under the original financing plan and theJanuary 1974 estimate are as follows:

ANNEX 4- 78- Page 3

March 1968 January 1974Financing Plan EstimateTotal FC Total FC

(a) Preliminary Works 32.0 12.0 17.4 1.7(b) Construction Costs, etc. 751.2 455.0 855.7 478.5(c) Engineering & Site Costs 40.3 22.0 74.1 40.1(d) Misc. Off Site Costs, WAPDA

H.Q. Costs & IBRD Supervision 4.0 3.0 6.8 3.0827 C & 492. 1r

(e) Deduct Preliminary Works PaidLC by WAPDA & FC from IBDFprior to May 2, 1968 24.0 8.0 -

803.5 484.0 95WZ0 T2Y5.

At this time (January 1974) the balance of foreign currency estimatedas being available for transfer from IBDF, US$318 million had risen by US$24million to US$342 million. This increase together with income on investmentsof US$7 million and the increase in the dollar equivalent valuation of thecontribution from Canada, France, Italy and the United Kingdom brought thetotal foreign exchange resources of TDF to US$526 million. However. thisfigure assumed that all the tied bilateral aid would be used and at the timethis seemed unlikely. The effect of fluctuating exchange rates of the for-eign currency contributions to the US dollar had increased the original US$equivalent value of these contributions by US$3 million. This figure allowedfor agreement by France to increasing their contribution to the originaldollar equivalent value following the re-evaluation of the French Franc in1970. On the basis of the conditions applying to the usage of tied aid itwas estimated that the total resources would be reduced by US$3 million, thusthe total foreign currency funds available were US$523 million.

It appeared, therefore, that the financial resources were adequate tomeet the estimated cost of completing the Project. However the damage to theoutlets and collapse of tunnel 2 in August 1974 required urgent remedialmeasures to render the Project safe before the next flood season. Thisrequirement led to re-assessment of the financial needs to complete theProject and although the full extent of damage could not be assessed untildrawdown had been completed, preliminary estimates made it clear that con-siderable additional finance would be required. Insurance claims had beeninitiated (para 5.21), but it was appreciated the negotiations could beprotracted and the immediate problem was to ensare that sufficient untiednon-rupee resources were available to carry out the necessary repairs. Con-sequently, the contributing Governments were advised of the situation andnegotiations led to the Tarbela Development Fund (Supplementary) Agreement of1975 being signed on August 15, 1975. Under this Agreement, special con-tributions were made by Australia (US$1.3 million), Germany (US$6.0 million),Italy (US$7.2 million), UK (US$4.9 million), US (US$10.0 million) and an IDACredit (US$8.0 million) making a total contribution of US$37.4 million.These contributions were made for the purpose of meeting the costs of therepair and additional remedial works as determined by the Administrator underClause 1.07 of the Supplemental Agreement to ensure the prompt and safecompletion of the Dam. The increased contribution to meet local currencycosts was met by the GOP. The initial estimates of the cost of the work of

- 79 ANNEX 4Page 4

restoration and additional works ranged from US$60 million to US$80 million.The total costs of the first stage of repair and additional works amountedto US$70 million of which US$56 million was the foreign currency content.However, only part of these costs were covered by the special contributionswhich are estimated to cost US$45 million in total, of which US$36 millionwas the estimated foreign currency disbursement. The balance of the repairand additional work costs have been met from the general resources of TDF.

On completion of these repair and additional works, further problemsarose in the stilling basins and in the plunge pools of the spillways, oncemore requiring additional funds which resulted in the second SupplementalAgreement of 1978. Under this Agreement additional contributions were forthe purpose of helping to meet, to the extent necessary, the remaining costof completing the Project. In addition, Pakistan expected to obtain a con-tribution from Germany and had obtained assurances of assistance from othercountries. Negotiations on the Insurance Claim had been continuing and finalsettlement was agreed in the amount of US$16 million. Section 1.08(a) of theSupplemental Agreement 1975 required Pakistan to return to TDF any amountsrecovered from the Insurers on account of the expenditures incurred. Theamount received was to be credited to each contributor pro-rata to its con-tribution. However, as part of the Insurance Claim was for repair works notincluded under the determination made by the Administrator and therefore paidfor from the general resources of the Fund, only US$13.45 million was avail-able for return. The allocation to each contributor was:

US$ Millions

Australia 0.362Germany 1.720IDA 2.308Italy 2.077Pakistan 2.673United States 2.883United Kingdom 1.427

Total Adjusted Insurance Recovery 13.450

The 1975 Agreement made provision for alternative options for dealingwith any monies recovered by Pakistan from a number of sources, includinginsurance, but it was clear that the foreign currency resources of TDF wouldbe insufficient to met the cost of the further works, and discussions wereheld with the contributors as to the disposition of each country's share ofthe insurance recovery. The GOP requested that the insurance recoveries werecredited to the Fund. The United States and Australia required their shareto be repaid but Australia made arrangements for a separate contribution toTDF of an equivalent amount. The other contributors agreed to allow theirshare of the recovery to be returned to TDF towards financing cost of theremaining works. Pakistan's share of $2.67 million plus $0.5 million of theinsurance recovery of US$2.55 million payable to TDF were allocated forpurchase of urgently needed operation and maintenance equipment.

As mentioned above, the contributions from the Saudi, Kuwait and partof the Abu Dhabi Funds are being received into TDF on a reimbursement basisand not as direct contributions. This raised certain complications and


reqaired procedures to be greed with each fund. For the spillway remedialworks, contracts were already in existence prior to the new loans beingsigned and a portion of the non-rupee financing was still coming from TDF.For these works, once the contracts and existing variation orders had beenaccepted as being within the list of good, the reimbursements followed satis-factorily. However, for the conversion of stilling basin No. 4 (Tunnel 4outlet works), for which the non-rupee finance was to come entirely from theSaudi and Kuwait funds, the procedures have been less straight forward.Discussions between the officials of the Saudi fund and the Pakistani delega-tion early in 1980 had clarified that direct payments from this fund to thecoLtractor could not be made in less than 45 days from receipt of theapplication for payment. This time was well in excess of the contractuallimit of 30 days from receipt of the engineer's certificate set out in thecontract for the Tunnel 4 outlet works, Such delays in payment besides thecontractual implications, could have had an adverse effect on the executionof the works. WAPDA, therefore, requested and the Administrator agreed that,in the interests of the project and on the understanding that the Governmentof Pakistan would meet any shortfall in non-rupee financing, bridging financefor this contract could be provided up to a maximum of US$ 7 M. This limitwas computed from the assumed cash-flow, based on the estimated payments tothe contractor, allowing three months between the date of disbursement fromTDF to the date of receipt of reimbursement from SDF.

Generally, the procedures have worked satisfactorily but there havebeen problems resulting in delays in receipt of reimbursements exceeding thethree months anticipated. Some delays have occured due to late submission ofapplications but the main problem has arisen from insufficient or late infor-mation being provided by WAPDA to show the changes to the original approvedcontract for approval by the funding agency prior to the expenditures beingmade. As such informationL must originate from the project consultantsthrcugh the authority responsible to government for liaising with the fundingagency, it is essential that the actions to be carried out by the projectconsultant to satisfy the funding agency must clearly be set down. Theseshould include the necessity of the timely submission of information neces-sary to ensure approval of payments that the engineer proposes to certify tothe contractor, thus, ensuring that the funding agency approves in advance(i.e. by pre-audit) all payments to be made before the application for reim-bursement and therefore avoiding the delays that have occured due to amountsbeing included in applications for which approval has not been obtained. Itmust be recognized that there are considerable administrative costs in apply-ing and accounting for the reimbursements, over and above the originalfinancing cost of such a loan, i.e., loss of interest. In addition, it isinevitable in financing of this sort that there will be a loss of value dueto inflation and currency exchange fluctuations in the present climate ofinternational financing.

In addition, a contribution from the European Economic Community wasarranged with a further Special Action Credit from the same source followinglater. The total contribution received under the second Supplemental Agree-ment, the EEC, the EEC Special Action Credit and the insurance recoveryincluding the interest on the insurance monies invested while a decision wasbeing made on the disposition of the insurance monies amounted to US$111million. The further resources arranged by GOP from Kuwait, Saudi Arabia and

ANNEX 4

- 81 - Page 6

Abu Dhabi Funds for Development amounted to US$102 million. However, thecontributions from the Kuwait and Saudi Funds are not being made to TDF inadvance of disbursements, but have been dealt with on a reimbursement basis,payments first being made from TDF to the Contractor with reimbursementfollowing in due course on application from WAPDA. Part of the contributionfrom the Abu Dhabi Fund is being received in the same way and part is beingpaid direct for works not being administered through TDF.

One of the major further costs incurred was the change of StillingBasin 4 to a twin flip bucket design. The construction was completed in June1983. The foreign currency costs are being met, 83% from the Saudi Fund and17% from the Kuwait Fund. The balance of the contributions from Kuwait andSaudi funds have been allocated to remedial work at the Spillway plungepools. The contribution from Abu Dhabi was allocated US$6.5 million toSpillway Works and the remainder to Geotechnical Works. Each of the othertwo funds (Kuwait and Saudi) included an un-allocated contingency amount,the final disposition of which has yet to be determined. Discussions arecontinuing with WAPDA in order to make the best use of any uncommittedamounts in each of these three funds.

An additional contribution of US$ 3 million was called from theGovernment of Pakistan in October 1981 under Section 1.04 of the TDF (SecondSupplemental Agreement 1978) and received in January 1982 to meet the tem-porary shortfall in foreign currency until such time as the Abu Dhabi loanbecame effective. The total contributions received under the Second Sup-plemental Agreement, insurance recovery and the contributions from the EECincluding the Special Action Credit in US$ equivalents are as follows:

Second InsuranceSupplemental Recovery & EEC

& EEC Special Action Credit

Australia 363,008Canada 8,783,707EEC 6,825,492EEC Special Action Credit 7,059,617Germany Through Pakistan 10,207,153*IDA Credit 37,688,012*Italy 9,420,375*Pakistan (Incl. Insurance Recovery) 3,000,000 2,673,000TDF Insurance Recovery - 2,960,304*UK 21,697,008 -

97,984,755 12,692,931

* Includes Insurance Recovery ana Interest as additional contribution.

Attached (Table 1) is a statement of Estimated Resources and Costs ofthe Project as at June 30, 1983. The estimated cost of the works is based onthe latest Capital Cost Estimate, which in summarized form is attached(Table 2).


For the purpose of comparison, the estimated foreign exchange resour-ces and costs as at December 1977 and June 1983 are shown (Table 3). SinceDecember 1977 there has been a net reduction of US$7 million in the estimatedcost of the original original works, initial repairs and additional works.The remedial works to the spillways are estimated to cost US$55 million morethan the earlier estimate and the conversion of Stilling Basin 4 to twin flipbuckets US$14 million extra. The allowance for possible future GeotechniallWorks in the abutments of the dam are now estimated to cost US$24 million,together with a further allowance of US$4 million for possible additionalworks for direct disbursement from the Abu Dhabi Fund. These works have notyet been defined by WAPDA.

The changes in the estimates and other financing adjustments wouldhave increased the December 1977 shortfall to $144 million in foreign cur-rency resources to US$228 million. To meet this shortfall, total additionalforeign funds of this equivalent amount have been arranged or have becomeAvailable. The figure of US$228 million is comprised of the following con-tributions and changes in other resources:

EquivalentUS$ Million

(a) Abu Dhabi 25.0Australia 0.4Canada 8.8European Economic Community 6.8EEC Special Action Credit 7.1Germany 1.2Kuwait 18.1IDA 37.7Italy 9.4Pakistan 3.0Saudi Arabia 58.6Insurance Recoveries including interestattributable to Pakistan and TDF 5.6

Sub-total 212.4

(b) In addition, the accumulated income (earnings oninvestments) is now estimated at US$24.3 anincrease over the earlier estimates of:- 16.3

(c) The balance of the Indus Basin DevelopmentFund has been adjusted upwards by: 2.0

Sub-total 230.7

(d) The net change as a result of currencyappreciations and depreciations on cashand investments is: -2.7

Total 228.0

ANNEX 4Page 8

The estimated values of the Kuwait and Saudi fund loans shown above

have been re-assessed on the basis of the reimbursements received. Continu-

ing fluctuations in exchange rates could result in final values varying fromthose shown.

As shown by Table 1, overall the present resources appear to besufficient to meet the latest estimated requirements provided the contribu-

tions from the Middle East countries can be fully utilized. However, unlesschanges are made to the present allocations within the List of Goods for eachof the three Middle East contributions, there will be a shortfall of theorder of US$ 4 million in the non-rupee resources required to meet the latestestimates.

ANNEX 4-84- Table 1

DITZPKATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENTADINIMSTRATOR FOR THE TARBELA DEVELOPMENT FUND

ZSTMMTED RESOURCES AND COST OF THE PROJECTJUNE 30, 1983

USS Millionsbbreiqn

Total Currency Rupees- ~~~12 I/

Indus Basin Development f~md Balance 354 352 2Contribution to Tarbela Development Fund;

ForeignTotal Currency Rupees

a) Untied 98 98

b) Tied 76 76 -

a) Government of Pakistan 461 461

4) Special Contributionsunder Supplemental 46 37 9Agreement (1975)

) e Supplemental Coit- 3ments 1978 and EEC 323 100- 223

V} insurance Recoveries 6 6 ! -

9) ECC Special Action 7 7 -Credit - 017 324 693

137-1 676 695

Add Accumulated Income 24 24 _Adjustments for currencyfluctuations on cash andinvestment -6 -2 -4

Other Contributions 108 102 6

EstLmated Total Resources 1497 0oo 697

Cost of the Project ( june 1983) Estimate 1171 - 531 640

Cost of Repairs and Additional Works ( June 1983) 86 56 30

Interest paid on special plant advance and delayin repayment of total special plant advance (7) (7) _

Increase or (reduction) in cost of the Project asa result of changes in exchange rates (209) 6 (215)

* Further modifications to Stillinq Basins andRemedial Works to Spillways 410 186 224

Allowance for further works in abutments ofcbankment Dams, etc. 46 28 18

1497 800 697Estimates Shortfall/ (Surplus) -

Balanoe remaining on closure of the Indus Basin Development Fund on December 31, 1977.Excludes.US$ 8 million, being payments up to May 2, 1969 for Tarbela preliminaryWorks which were met from the Indus Basin Development Fund.Includes insurance recoveries attributable to Germany, IDA, Italy and UK, whichWere allocated to the TDF as an additional contribution under the TDF (SecondSupplemental) Agreement, 1978. Also includes US$ 3 million contribution fro0Government of Pakistan.includes Pakistan's share of insurance recoveries and portion allocated fordirect return to TDF.Foreign currency contributions from Kuwait. Saudi and Abu Dhabi Funds. Localcurrency contributions are the rup"e payments made direct by WAPDA and notthDough the TDF.

TARDStA DANl PiOJU?

SUMUUW OF REVISED CAPITAL COST ESSIME - JUNE 30. 1983

Local Currency - Rsa. Foreign currncy - $ S

Section of Works Construction CD L ST Works Engineering Total Cstructlon Engiering Total Routded TotalWorks inc. inc. LC PC TotalCD&ST monc. FC

Original Works 1260 1533 2793 254 3047 463.7 58.4 522.1 522O&M 3 3 7.8 1.4 9.2 9

($640.5) 531.3 531 1,171.8Repairs 52 - 52 14 66 19.5 2.5 22.0 22

($ 13.9) 35.9Additional Work 55 - 55 20 75 28.1 5.6 33.7 34

($ 15.7) 49.4

Sub Total Original 1367 1533 2900 291 3191 519.1 67.9 587.0 587Works a O&M ($670.1) 1,257.1

Spillway Remedial 1303 367 1670 60 1730 130.0 8.3 138.3 138Works ($174.8)S4 Outlet Works 329 131 460 25 485 39.0 8.5 47.5 48

(5 49.0)Geotechnical Works etc. 64 16 80 38 118 7.0 9.4 16.4 16

(5 11.9)Dzilling & Grouting 36 31 67 - 67 7.3 - 7.3 8Works (5 5.8)Further Works and Geo-technical Equipment - - - 4.2 - 4.2 4(for direct disburse-ment by WAPDA (IC) anetAbu Dhabi Fund (PC))

Sub Total New Works 1732 545 2277 123 2400 187.5 26.2 213.7 214 455.2($241.5)

Total All Works 3099 2078 S177 414 5591 706.6 94.1 800.7 801($911.6) 1,712.3

Intereut on Sp.Plant -6.7 -6.7 -7 -6.7Bank Exchange Differ-ence

1.0 1.011.700.9 94.1 795.0 795

Exchange RateLosses (S4215.0) 5.0 - 5.0 5 -210.0 ; X

S696.6 705.9 94.1 800.0 8o0 1,496.6

:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

- 86 - ANNEX 4Table 3

PAKISTAN


Foreign Exchange Resources andEstimated Foreign Exchange Costs

December June1977 1983

-----(US$ Million)----

A. Foreign Exchange Resources(Received or Arranged)

IBDF Balance 1/ 350 352Contribution tfo TDF 2/

(a) Untied 98 98(b) Tied 76 76(c) 1975 Supplemental 37 37(d) 1978/79 Supplemental - 100(e) Insurance Recoveries - 6(f) EEC Special Action Credit - 7

Other Contributions - 102Adjustments for CurrencyAppreciations and Depreciations 3 (2)

Accumulated Income 8 24

Total 572 800

B. Estimate Foreign Exchange Costs

Original Works (1968-1976) 3/ 523 531Initial Repairs and Additional Works 71 56(1974-1978)

Remedial Works to Spillways (1977-1982) 83 138Further Modifications to Stilling Basins

(1981-1983) 34 48Possible Future works (1981-1984) - 28Other 5 (1)

Total 716 800

Estimated Shortfall/(Surplus) 144

1/ Indus Basin Development Fund.2/ Tarbela Development Fund.31 Dates in parenthesis indicate periods during which principal

expenditures were, or are expected to be, incurred.

- 87 -

ANNEX 5Page 1

PAKISTAN

TARBELA DAM PROJECT COMPLET.ION REPORT

Covenants and Status Compliance

A number of covenants are included in the documents of the severalloans and credits. The most significant covenants and the status of com-pliance is as follows:

One covenant is included in Loan Agreement (Tarbela Project (548-PAK)as follows:

"Section 5.01(b). The Borrower shall cause the dam and otherfacilities included in the project and the electrical power gener-ating equipment associated therewith operated and maintained inaccordance with sound irrigation and elec ric utility practices." 1/

This covenant is being complied with although the resources of the Contractorstill provide significant back-up for WAPDA's O&M activities. The Bank haspointed out (see ANNEX 4) that WAPDA's difficulty and delay in filling sanc-tioned positions in the 0&M organization could affect WAPDA's ability to meetthis covenant. As WAPDA O&M forces assume the full work load in 1984 and asincreased local currency and foreign currency are made available, complianceshould be strengthened.

Three covenants are included in Development Credit Agreement (TarbelaProject, Second Supplemental (771-PAR)) as follows:

"Section 3.02(b). Without limiting the generality ofparagraph7R) above, the Borrower shall, under arrangements satisfac-tory to the Association, cause the dam and appurtenant structuresincluded in the project to be periodically inspected by qualified andexperienced engineers in accordance with sound engineering practicein order to determine whether there are any deficiencies in the

1/ This covenant is repeated in essentially the same language in Section3.02 Development Credit Agreement (581-PAK), in Section 3.02(a), Develop-ment Credit Agreement (Tarbela Project-Second Supplemental 771-PAK)), inSection 3.02(a), Special Action Project Agreement (51-PAK (EEC)) and inSection 3.02(b), Loan Agreement 2247-PAK.

-88 - ANNEX 5-88- Page 2

condition of such structures, or in the quality or adequacy of main-tenance or methods of ope ation of the same, which may endanger theirsafety." 1/

This covenant has been complied with at one level in that WAPDA haveorganized and staffed a Dam Safety Organization within W7APDA. This is hope-fully an interim arrangement until legislation is enacted creating a separateand independent organization. Several levels of inspection will be necessarybut since construction work is still in progress, no firm inspection programhas been adopted. With funds available under Loan 2247-PAK, it is tenta-tively planned that a fir*st detailed inspection with internationally recog-nized team members will be conducted in 1984/85 with a second such inspectionin 1987.

"Section 3.02(c). The Borrower shall, by December 31, 1978furnish to the Association for its review and comments, a detailedprogram of measures needed to meet the requirements of paragraphs (a)and (b) and a realistic time schedule for its implementation andshall promptly after receiving the Association's comments, implementa program of such measures satisfactory to the Association, inaccordance with a time schedule acceptable to the Association."

WAPDA presented a program in 1979 which, with updating and revisions, is thebasis for work in progress. The program is updated approximately every sixmonths. The most recent program was presented in January 1983. As notedpreviously, programs and schedules for inspections are not yet set.

"Section 3.04(a). Prompdly upon completion of the FinalReport under the United Nations Development Programme (UNDP) Projectdescribed in UNDP Project Document (PAK/74/404/A/01/42) as amended,the Borrower shall exchange views with the Asso- ciation on theAction Program of the Borrower, based on the findings of such Report,and on th specific programs included therein designed to ensure themost economic and efficient use of water relases from the Project andshall thereafter use its best efforts to carry out such programs withdue diligence and efficiency in accordance with a time schedulemutually acceptable to the Borrower and the Association.

Compliance with this covenant is reflected in the fact that the Government isrethinking its strategies for the water sector in the light of the RevisedAction Program Report (April 1979). Major new initiatives are proposed inpart supported by the Bank for improvising the efficiency of water use in theIndus system. Related Bank projects include those for the rehabilitation ofthe irrigation systems, for on-farm water management, priority drainage andarea development programs.

a/ This covenant is repeated in Secton 3.02(b), Special Action ProjectAgreement (51-PAK (EEC)) and in Section 3.02(b) Loan Agreement(2247-PAK).

- 89 - ANNEX 5

Page 3

One covenant is a'so included in Special Action Project Agreement(il-PAK (EEC)) as followsr

"Section 2.06. Except as the Administrator may otherwiseagree, WAPDA shall present to the Association for its review by March31 of each year a detailed annual program reflecting budget proposalsand proposed expetiditures for operation and maintenance of theproject during the subsequent fiscal year, including capital expendi-tures for permanent operation and maintenance facilities." 1/

This covenant has been complied with.

a/ This covenant is repeated in Section 2.07, Project Agreement 2247-PAK),except that the date for presentation of the budget to the Bank is setahead to February 1, beginning in 1984.

ANNEX 6- 90 - Table 1

PAKISTAN


Prices Used For Economic Analysis 9/(In Constant Mid-FY83 Currency Units)

Unit 1975-76 1979-80 1982-83 1989-90 1994-95

Agiculture

i.: at Grain 1/2/ Rs/ton 3,255 2,503 2,320 2,031 2,019Wheat Straw 3/ Rs/ton 148 148 148 148 148

Human Labor 3/ Rs/manday 13.5 15.4 17.2 19.4 20.3Bullock Labor 3/4/ Rs/pairday 16.8 19.8 21.1 23.6 25.7Wheat Seed 5/ Rs/kg 3.42 2.63 2.44 2.13 2.12

Fertilizer 6/

N 1/7/ Rs/kg 7.65 6.81 6.34 8.74 9.24P T/8/ Rs/kg 7.57 5.90 5.77 6.96 7.08

Power

Residual Oil 1/ 9/ 10/ Rs/ton 1,551 2,231 2,736 3,143 3,478

1/ Economic prices of internationally traded commodities based on Bankcommodity price forecasts of July 1982.

2/ Import-based price assumed through 1984-85. Over next five-year period,linear transition made to export-based price.

3/ Local prices converted into border rupees.4/ Excludes driver.5/ 5Z premium assumed above wheat grain price.6/ On kg of nutrient basis.7/ Based on Urea with 46% analysis.81 Based on TSP wth 46% analysis.9/ Details of calculations of farmgate/thermal plant site prices available

in Project File.10/ C.i.f. Karachi price adjusted for internal transport and handling to

Lahore, the assumed load center for a thermal alternative to Tarbela.

91 ANNEX 6Table 2

PAKISTAN


Irrigated Rabi Wheat Input/Output Assumptions(Per Hectare Basis)

Unit 1975-76 1979-80 1982-83 1989-90 1994-95

Outputs

Grain 1/ kg 1,526 1,720 1,924 2,500 3,000Straw 2/ kg 1,663 1,875 2,097 2,725 3,270

Inputs

Human Labor 3/4/ mandays 45.5 45.3 44.9 45.0 46.0Bullock Labor pairdays 15.0 15.2 15.4 16.0 16.5Seed kg 92.0 92.0 92.0 92.0 92.0

Fertilizer 5/N kg 55 60 65 30 100P kg 15 18 21 30 40

i/ 1975/76-1979/80 actual Punjab-Sind/Baluchistan weighted average yieldsfrom within Tarbela canal commands. Weighted averaging based en CCA'sin Punjab and Sind/Baluchistan within the Tarbela canal command system.Source: WAPDA, Tarbela Dam Project Post-Project Monitoring Irrigation andAgricultural Data, Lahore, June 1979.

2/ Straw yield assumed at 109% of grain yield. Source: Agricultural CreditDivision, Muslim Commercial Bank Ltd, Crops of Pakistan, Karachi, 1980,p. 186.

3/ Reductions in human labor requirements represent net result of reducedweeding labor requirements with increased shade effect with higher yieldsand increased labor requirements for winnowing and threshing activities.

4/ Includes bullock drivers.5/ On nutrient basis.

-92- ANNEX 6

Table 3

PAKIStA

TARSUA DAN PWt COWPLON tEPOtS

Ltrbel:t tocrmetl teriation Water opoi.and a nAcremntal tMU Crooned Ara

1970-71/ 1981-821974-75 thr

Vot Avsra 1/ 1975-76 1976-77 1977-8 1978-79 179-0 1980-81 1996-97 198-9 2008-09 2016-17

Oct/Nom 14ua_ at Tarbl*e m W A 3.644 3.975 5.78 7.649 6.656 6.642 6.666 6.680 6.416 *.09 4.045

Oct/Nov Reissma at Canal Nled 3/ NA 3.097 3.379 4.920 6.502 5.658 5.646 5.6 6 5.678 5.454 4.334 3.438tecapef 41 NAP 0 387 0.225 0."I 0 373 3.311 0 102 0.3 2 0.*83 0 4" O. 3t 0.292

Not AVSiLilttles 1t§- VW- KW12 6.1' M V5 M r. 3s f0 TO T.T

Incremental Net Avallabilities MA 0.244 1.019 3.217 1.437 2.634 2.44 2.285 2.080 1.056 0.236

Predicted Pabi Cropped Afre to ToutTarbela Caal Comend System witb soasurfac Water Supplea (Pre-Tarbela)ad with ncrnutst let Aftlabilitlefrm Tarbls_171 *000 ae 6,058.0 6,196.2 6,628.0 7,806.2 6,857.4 7,500.0 7,399.3 7,314.7 7,205.1 6,648.8 6,191.7

(61853.2)Neitmted Increm,tal fabi CroppneAre from Tarbela Net tncremetalAvallbIstia's (A) eo ac 138.2 570.0 1,748.2 799.6 1,442.0 1,341.3 1,256.7 1,147.1 590.8 133.7

795.2) !

Total lPabi Cropped Are withtin trbelrCanal Co_ned Sate. 8/ 'C000 a 7,957.0 9,142.7 9,198.2 9,282.3 9,418.6 9,819.2 - - - - -

Total Incremental Rabt Croppe Awithti Tarbala Canal ComandSyate (8) '000 at 1,185.7 1,241.2 1,3#5.3 1,461.6 1,862.2 - - - - -

(A) / (U) I 11.7 45.9 131.9 54.7 77.4 - - - - -

(60.0)

Total abt ir -t Area withitn trbalaCanal Co_mmnd Spate. 8/ e000 SC 4,653.1 5,20t.1 5,357.6 5,559.4 5,935.2 6,164.2 - - - - -

Total Incrmental tbi lit Area witb-in Tarbela Cnal Cond System (C) o000 at 54U.0 704.5 906.3 1,282.1 1,511.1 - - - - -

(C) / (a) 2 46.2 56.8 68.4 87.7 - 81.1 - - - - -

I/ Pre-Tarbela 5-eaor perid.it Baed on sonthil river flow (1970-71/1974-75) and mn monthly outtfio from Terbels NtasrveSr (1973-76/190-81). 1981-82/19%-97 level repreets

1976-77/1930w-1 (five-per) averap. Threafter, aedimentation to ssumed to redue active by 8.0 N, or by 88.92, oSer a 45-per period. 4Armitrlinear reduetion, thia wuld yield .132 MU of reduced Octor/November relaeeh p... subsequent to 1996-97.

3/ Based oan VAfA 1atiite of 152 reduction from sourca-epeciftcally, 102 In river and 52 tn link crnala).T/ BSed on apporttoned apeg a e low loti Srtrap. 1970-71/1940-t1 historical date from Water t reu c anmt Directorate. VAIA, Indue atnIrristint SYStem Abtract of Onerattona Data fo 1960-61 to 19RO-SI tahore, November 1981. as e in poat-1980-S1 period calclated at T.5 ofOctober/NoeMber Ueleare at Canl Rad baed on long-ter (1970-711980-81) average.

St lncrmata over pre-Tarbala 1970-71/1945-75 average net avatlabtltte of 2.910 W.It loed an wnltipla regrteloo-eatimsted eleticity uesig 1970-71/1978-79 data from the 10 Tarbel Cna d Canls. The followin relattoa htp

we eattimtedt

lnt.7.161756 + 0.744294 loXl + 0.2343422 1n12(0.04492) (0.03594)

Aare X - Total tebi Area ('0oO ac)II - Total October/llev.ber Canal Witdrawal (W?)t2 - Total tRbt Private and Public Tubevlls Pumpap (MAP)

Adjusted R2 - 85,42.*** found sigificant at 995 confidence level.

It Excludes estimted effect of tube_ll puapage.i Ristortcal date supplied by WApDA.'/ Area used in *eonamic analysti consistent witb 1976-77. 1978-Rl average.

TADUIIL DAN P103J! COPLS(IO UPOII?T!rkisa Pmfttc-Ecmb al hanw

tin .s. . .li_ _)

1Wy i99 16 1im0 1n 197 1973 1974 1M 176 197 98 1m 1990 181 12 313 1994 9 3 15 1B 1 1 3990 g1

NMI .2/

LnwL rm - - - - - - - - m 93 1152 133M 267 23 24 22 254 2 27m 2717 27VS 2796 2797 2M

1I1E CWh.LC S 1 - - - - - -262 2192 m2 49 - - m 76 259 2521 592 206 667 PO 154m m 1 OI 4/ - - - - - - - - 104 104 104 t4 104 104 22? 2D 227 227 25 259 9 259 29 259IEIM IL 8A91UNS At - 57 set 1 190'4 24 290 4774 6135 6135 61 AM52 7247 7446 7m 9066

R UITOT - - - - - - 2192 229 20 163 17 334 5 7521 44 6 7125 761 75 72 914 Oe G

TOTAL - - - - - - 655 2192 2501 305e 2935 3212 02 913 10010 962n 9115 9956 104 040 10725 1OM 11229

i69C1lia .COSI cx / -- -- - - - 96 535 469 50 3024 9U5 93 943 990 103910P 109 @3 1123 116 119 1243

IllESTENT COSTS 4J

UEST IMn 9n m1 1t1 lo 220 206 37 312 14 132 90 a s 37 7 47 58 2a 37 - - - - -NSRItTI 6 26 7 4S 45 529 07 27 13 1642 1041 79m 747 654 949 94 *U 1910 454 193 112

PDIER INSTUlTIO - - - 42 1 403 22 234 193 4 353 63 636 19 482 1245 3 22 - - - - -llMIEllo.5 - - - - 56 166 404 64 317 54 13 , 5 0 - - - - -UAIWSNISSIONUIEI - - - - - 6 1e 103 790 60 2 55 30 7 5 52 624 546 217 21 - - - -

0IUI Km ts9 - - - - - - - - - - - - - - 4 3 5 39 39 39

SU3Olt. 644 2870 4936 5481 5324 3355 3034 3013 2516 19 1117 1157 164 160 1745 15 2445 1467 653 24 5 n 3 3

ImET CSTS

VATElt 9 - - - - - - - - 16 72 52 19 122 6 100 120 193 214 23 261 259 259 259 9oERU via 71 - - - - - - - - - - 51 51 1 51 9 101t lt 10 115 11s5 its 1 it1

ITOtA - - - - - - - - 1 7 n 103 244 In 336 13 22 294 314 3 37 374 374 4 374

T1lEtA 913aT 64 2970 4936 51 5324 3355 03U4 t13 2531 156 1220 1402 1921- 176 198 311 273 1791 1011 400 30 413 413 413

MAL 654 2970 4936 59 5m1 3155 3034 3013 2 220 169 102 2M5 27 297 275 37 2919 2073 1494 IS3 1576 11 167 b IW

ET IKi *I1N -654 -2670 -4036 -41 -5324 -3355 -2379 -931 -46 841 It" 1309 3182 562 79 6613 53 7 9376 6 7 9148 9? X*10

'53513

UIU. DAN PRWOE cUWLitO am

tublo P*C--e wAe b1 ne

(is h. Kil1sX

A3 M2 92 1941917 1199 20 6 22 W f24 206 60 27 29 N20 31l 213 211 21 213 2914 15 2S 17

amm~~~~~ .

1Ga13L W U8JIIF=/ 0 Mt 3u 31,69 = n ml O t Z 231 5 a 1t11 4 2 tW t U 143 2 mU In M 6 Su 23

mr 11i ca m 2 2 - in 1 21 at - n 6 221 a 11 ts1EW . 41 Z 2 2 2 * 25 9 5 5 2 ZW 9 2 9

FM 3I11L . 1 Gm 9 m US 963 1A6 111091 972 81 Om 9 1157 11102 "A 1a %6 9651 915 o6 Om g1 1n 888

JOI. t116 115 I2 13 11 16 1454 13113 1201 11434 1121 11915 178 133 11275 075 110 1095 1026 M 93 99 94 t9 9

JORMUM Cl 12M1 19 13 1465 UP 10 1221 15 am i03 74 912 84 7 M 73 661. 59 4 470 467 32 2 214 164

mSIIREI c ,

G1LIh31tt - - - - - . - - . - - . _ _ _ . - _ _ - . _ _ _

alllltiUl- - - - - - - - - ' ' ' ' - ' ' ' - - ' ' - ' -

FE 11tMl6JS t Z i - - - - - - - - - - - - - - . . . - - _ _ _ _-.IUEb.S _ _, , ,___ _,, _,_

IRMIIISSIU0 LIE - - - - - - -_ _ _ . . . _ _ _ _ _ -_ _ -

8O1BURM, 39 3 39 3 n n J9 9 D9 3J n 3 J9 3 t9l3 3 3 9 3 3 39 39 39 3 n

mi a mi

611139 23 75 23 23 23 23 23 23 23 23 23 25 23 23 2 2 5t 23 23 2 23 25t3 f 259 3 2NER IIS/ ' 311 111 11IU I 1 115 l as 115 115 IU 3IU 11315 1 3 15 It 5 11 5 tU tU 15 115 IUI 135 tt5 115 115 1t5

sSUhoIN. n4 374 37 374 374 pA 374 374 3t4 3t4 37 374 37 D4 3t4 D74 D74 3 3t4 3t4 374 374 374 37…~~~~~~

tMiaA 50310l6. 4Ul 413 413 413 41 413 4U3 *13 43 413 4333 1 413 413 413 413 413 413 413 413 413 413 413 41

tON 1694 tm3 177 3681 1712 1696 1675 117 1533 145 1337 33 126 129 113t 1074 3010 94 88 2 71 69 627 563

m i- 61111 9791 102 107 108 109 1096 1243 120 1651 998 919 301 1231 126 *101 67 101 96 34 92 05 86 01 7

KKItLENM~~~~~~~~~~~~~~~~~~~~~~

FM inimLAIM~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -

~ 95 - ANNEX 6Table 4Page 3

PAKISTAN

TARBELA DAM PROJECT COMPLETI0N REPORT

Tarbela Project -- Economic Real Flow: Footnotes

1/ Pakistan fiscal year, i.e. 1968=FY68=July 1, 1967-June 30, 1963.

2/ Cost/benefit streams expressed in constant December 1982 (mid-FY83)currency values.

3/ Ref. ANNEX 6, Tables 1-3. Represents gross agricultural production usingirrigated Rabi wheat as the representative crop. Quantified agriculturalbenefits include only those calculated based on estimated incrementalRabi cropped area attributable to incremental Tarbela irrigation waterreleases. Excluded is Tarbela's contribution to increased productivityon traditional (pre-Tarbela) Rabi cropped area.

4/ Based on report prepared for project economic appraisal by Sir AlexanderGibb & Partners entitled Evaluation of the Tarbela Project.

5/ Ref. ANNEX 6, Tables 1-3.

6/ O&M plant investments shown here include those for the ReservoirMaintenance Facility Project (and a subsequent sinking fund US$3.0 Mp.a. to replace exhausted capital facilities). Previous O&M plantcosts included Water Wing O&M costs.

7/ Includes O&M costs of incremental transmission lines.

ANNEX 6- 96 - Table 5

PAKISTAN

TARBELA DAM PROJECT COMPLETION REPOR.

Tarbela: Relative Importance of Project Cost andBenefit Streams with Switching Values

Percent of Total SwitchingPWOR of Benefit Value 2/or Cost Stream 1/ (10% p.a.)

I. Benefits

A. Agricultural Benefits 26.9 -87.8B. Power (T'hermal Alternative)

1. Capital Costs 13.4 -175.82. Thermal O&M 2.4 -995.83. Saved Residual Oil 57.3 -41.2

Subtotal 73.1 -32.3

Total (%) 100.0 -23.6(Rs M) (35,588.4)

II. Costs

A. Agricultural Costs 14.0 220.6B. Tarbela Facilities

1. Investment Costsa. Resettlement 5.0 618.3b. Construction 64.0 48.3c. Power Installations 6.3 490.5d. Tunnel No. 5 2.7 1,114.1e. Transmission Lines 3.7 844.5f. O&M Plant 0.4 8,254.2

Subtotal 82.1 37.7

2. Recurrent Costsa. Water Wing 2.7 1,141.9b. Power Wing 1.2 2,649.9

Subtotal 3.9 798.0

Tarbela Total 86.0 36.0

Total (%) 100.0 30.9(Rs M) (27,180.5)

1/ Streams discounted at 10% p.a., the assumed OCC for Pakistan.2/ Switching value is the percentage change in the specified stream

that reduces the Net Present Worth (NPW) to zero at the specifieddiscount rate.


PAKISTAN

TARBELA DAM PROJECT COMPLETION REPOR`

List of References

1. Indus Basin Development Fund Agreement. 1960

2. Indus Basin Development Fund (Supplemental Agreement). 1964

3. Report on a dam on the Indus at Tarbela. World Bank Group. 1965(Headed by Lieftinck, P.).

4. Study of the Water and Power Resources of West Pakistan (4 Volumes). 1967World Bank Group (Headed by Lieftinck, P.).

5. The challenge of the Indus and a Nation's Determination to Succeed. 1968Kirmani, S.S.

6. Water and Power Resources of West Pakistan (3 Volumes). 1968Johns Hopkins Press. Lieftinck, P., et al.

7. Tarbela Development Fund Agreement. 1968

8. Report by the Administrator to the Parties to the Indus Basin 1971Development Fund and Tarbela Development Fund Agreements.World Bank.

9. Tarbela Dam Construction Reaches Half-way Mark. Water Power and 1972Dam Construction, September and October 1972, pp. 317-322, 355-365.Lovell, L.A., et al.

10. Tarbela Dam Project, West Pakistan (ASCE). Journ. ASCE, Volume 98 1972(P02), October 1972 pp. 221-245.Binger, W. V.

11. Tarbela Dam Project, West Pakistan (BNCOLD). Joint Meeting of 1972BNCOLD and Brit. Geot. Soc. February 7, 1972.Binger, W. V.

12. Some Construction Aspects of Tarbela. Journ. ASCE, Volume 100 1974(C03), September 1974, pp. 247-254. Thompson M. H.

13. Tarbela Development Fund (Supplemental) Agreement. 1975


14. Pakistan: A Review of the Indus Basin Project, 1960-1975. 1976World Bank.

15. Final Report by the Administrator to the Parties to the Indus 1977Basin Development Fund Agreements of 1960 and 1964.World Bank.

16. Tarbela Development Fund (Second Supplemental) Agreement 1978

17. Tarbela Plan, Problems and Success. Water Power and Dam 1978Construction, July 1978, pp. 29-34. Binger, W. V.

18. Using Tarbela to Revolutionize Water Management and Agricultural 1978Development in Pakistan. WAPDA. Kirmani, S. S.

19. Draft Revised Action Program for Irrigated Agriculture in Pakistan 1979(4 Volumes). WAPDA.

20. Fourth Nabor Carillo Lecture - Foundation Design of the Tarbela Dam. 1979Lowe III, J.

21. Report for Contributors on Settlement of Insurance Claims for 1979Damage Arising at the Project. World Bank.

22. Evaluation of On-Farm Water Management Research Project, Colorado 1979State University, under AID contracts. D.F. Peterson, J.L. Walkerand E. W. Coward

23. The Tarbela Experience. Sir Alexander Gibb & Partners. 1980

24. Engineering Flexibility. The Tarbela Dam Project. National 1982Development, April 1982, pp. 54-58. Lowe III, J.

25. Status of Project. TAMS. 1982

99 ~~~~~~PLATE I

I .~~~~~~~~~ IGOVERNMENT OF PAKIlSTAN -TRt DfEVtttDttUtT fD _

, , . ~~~ OtOIb IBANKt

SIR ̂INDER C>OPERS aGIN IIPARN LYPm

WATER AND POWER

I l ~~~~OEaVELOPMFENT A_TMORITYf

HARZA ENGINEERING CO0 SPELCIAL

IT ~~~~~~~~~~~~CONSULTATS

TIPPEtTS - A 8 ETT-MCXeCARTH Y-STR ATTOll|

AGENCIES

CIVIL vWOR'S CONTRACTORt SUPPLY CONiTRACtORS

TARaE!A JOINTVENTURE | MtECHANICtAL AtO _ _INDUS RIVER CDNTRACTORS I ELI!C HICAL tOUtPtItEttT

biOrAHATED SO ;-CoNTRACToIR OT;tERTUllbEL LtfRERS II PtNS?OCP.CHICAGO BRIDGE G IRON CO SUB-CONTRACTORS

TARBELA DAM PROJECT -ORGANISATION

bEIAtl - ACE - COYNEt Er 8ELltRI (MAC) we- rd alld by WAPOA fro.

OnoLrd6 197%l to m.d vlrii a_dil odv oft lollilt " Sfmo 3 I 4

STAGE m PROJEC1PA K I STA N

TARBELA DAM PROJECTSTAGES OF CONSTRUCTION

This mop hos been prepored for the 6*_ 6.4 , '

Project Completion Report of the jU5S.RKer\Tarbela Dam Project. The mop is 36 A

based on World Bank 7866, / fIAM . '\February, 1973; amendments o q AFGHANISTAN .lm

project and a project location inset I j aao /hove been incorporated in this map. ///

c:' <) DIVERSION ANDrNsmaphs p db he bakenk etafexcftsivethy tor ieconvenience of 28"> 28 POWER INTAKES

the readers nd is excjel,* for the huera use of The Word Bank anthe hte,natjnal 7 .IFinance Corporaton. The denonlinatuns usendan te boaIs shown on fthis mp do not r1irnp4, on fhe pail of The WOd Bank and he internationalFInance Coporation, any judgment INDIA IRRIGATIONon fte Ieal status of any temntory or any endorsent or acceptance of such boundanes INTAKES

.24' Afabion *.~)24-Sea 1 GANDAP TUNNEL

_._______________________________________________________________________ 644 72' 76 IRRIGATIONTUNNELS

STAGE I STAGE II ._- -POWER TUNNELS

BUTTRESS IPRVIOUS BLNE8..12.?<I)1

OUTLET CHANNEL

IBRD 3891 (PCR)

PROJECT PLAN I --- ----- MAY 1983IMPE U lIMPERVIOUS BLANKET EXTENSION

-J/ A 2/0

MPERIOUSBLAN EFT $ANK,,,yrii ~~~~~~~~~~ ~TUNNEL

BUTTR ES$ DAM

SWTHYR //g/ : /, a

a t -- --POW R OU E - /< N

R OUTLETS M DAM

-1/1/

g j2 / 13000 2 0 00 3000

r J~~~