tajikistan: agriculture rehabilitation project

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EvaluationIndependent

PerformanceEvaluation Report

Tajikistan: Agriculture

Rehabilitation Project


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Reference Number: PPE: TAJ 2014-13Project Number: 32494Loan Number: 1980Independent Evaluation: PE-773

Performance Evaluation Report

November 2014

Tajikistan: Agriculture Rehabilitation Project

This document is being disclosed to the public in accordance with the Asian Development BanksPublicCommunications Policy 2011.


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NOTES

(i) In this report, $ refers to US dollars. (ii) For an explanation of rating descriptions used in ADB evaluation

reports, see ADB. 2006. Guidelines for Preparing PerformanceEvaluation Reports for Public Sector Operations. Manila.

Director General V. Thomas, Independent Evaluation Department (IED)

Director B. Finlayson, Independent Evaluation Division 2, IED

Team leader S. Palle Venkata, Evaluation Specialist, IED

Team members M.J. Dimayuga, Senior Evaluation Officer, IEDE. Li-Mancenido, Associate Evaluation Analyst, IEDM. Fortu, Senior Evaluation Assistant, IED

C. Regodon, Administrative Assistant, IED

The guidelines formally adopted by the Independent Evaluation Department onavoiding conflict of interest in its independent evaluations were observed in thepreparation of this report. To the knowledge of the management of the IndependentEvaluation Department, there were no conflicts of interest of the persons preparing,reviewing, or approving this report.

In preparing any evaluation report, or by making any designation of or reference to aparticular territory or geographic area in this document, the Independent EvaluationDepartment does not intend to make any judgments as to the legal or other status ofany territory or area.


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Contents

Acknowledgements v

Basic Data vii

Executive Summary ix

Chapter 1: Introduction 1

A. Project Description and Expected Results 1B. Evaluation Purpose and Process 2

Chapter 2: Design and Implementation 4

A. Formulation 4B. Rationale 4

C. Cost, Financing, and Executing Arrangements 5D. Procurement, Construction, and Scheduling 5

E. Design Changes 6F. Outputs 6G. Consultants 9H. Loan Covenants 9I. Policy Framework 9

Chapter 3: Performance Assessment 12

A. Overall Assessment 12B. Relevance 12C. Effectiveness 13D. Efficiency 14E. Sustainability 14

Chapter 4: Other Assessment 16

A. Impact 16B. Asian Development Bank Performance 17C. Borrower and Executing Agency Performance 17D. Technical Assistance 17

Chapter 5: Issues Lessons and Follow-Up Actions 19

A. Issues 19B. Lessons 19C. Follow-Up Actions 20

Appendixes

1. Evaluation Methodology 222. Project Costs and Contract Awards 23

3. Project Framework and Achievements 244. Rehabilitation of Irrigation and Drainage Systems 285. Water Supply 306. Status of Compliance With Loan Covenants 317. Socioeconomic and Environment Indicators 418. Economic Analysis 43


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Acknowledgements

This performance evaluation report for the Agriculture Rehabilitation Project inTajikistan was prepared by a team led by Srinivasan Palle Venkata, Evaluation Specialist,Independent Evaluation Department (IED), under the supervision of Bob Finlayson,Director, Division 2, IED, and guidance of Vinod Thomas, Director General, IED.

The report was prepared with support from Ma. Juana Dimayuga, Elizabeth Li-Mancenido, Myrna Fortu, and Charina Regodon. Clarence Dingcong, consultant,assisted with the analysis and the preparation of the report. Peer reviewers AndrewBrubaker, Toshiyuki Yokota, and Karl Hughes provided valuable comments tostrengthen the report. The team is grateful to Asian Development Bank staff andGovernment of Tajikistan officials for their assistance and participation in the interviews.

IED retains full responsibility for this report.


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Basic Data

Loan 1980-Tajikistan: Agriculture Rehabilitation Project

Item Appraisal Estimate

( million)

Actual

( million)

Total project cost 43.75 49.97Foreign exchange cost 24.43 34.50ADB loan amount/utilization 35.00 40.10

Mission Key Dates

Loan negotiations 1113 November 2002Board approval 18 December 2002Loan signing 2 May 2003Loan effectiveness 14 August 2003First disbursement 22 October 2003

Loan closing 20 October 2010

Borrower Republic of TajikistanExecuting Agency Ministry of Water Resources and Land Reclamation

Mission Data

Type of Mission Number of Missions Number of Person-Days

Consultation 1 4Appraisal waivedInception mission 1 52Loan review 5 152Project completion 2 24Independent evaluation 1 6

Project Performance Report Ratings

Implementation Period

Development

Objectives

Implementation

Progress

921 April 2003 Satisfactory Satisfactory22 April 200323 June 2003 Satisfactory Satisfactory24 June 200321 December 2004 Satisfactory Satisfactory22 December 200424 August 2005 Satisfactory Satisfactory25 August 200530 November 2007 Satisfactory Satisfactory1 December 200731 January 2008 Satisfactory Satisfactory1 February 200821 December 2008 Satisfactory Highly satisfactory22 December 200830 April 2009 Satisfactory Highly satisfactory1 May 200930 September 2009 Satisfactory Highly satisfactoryADB = Asian Development Bank.Source: Asian Development Bank database.


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Executive Summary

On 18 December 2002, the Asian Development Bank (ADB) approved a loan of$35 million from its Special Fund resources to the Government of Tajikistan for theAgriculture Rehabilitation Project. The projects objectives were (i) to reduce povertyand improve living conditions of farming communities in the project area, and (ii) toinstitute measures to sustain the benefits of improvements under the project. Theseobjectives were to be achieved through (i) enhanced crop yields brought about byimproved irrigation and drainage as a result of infrastructure improvements; (ii)improved access to potable water, which improves health conditions; (iii) capacitybuilding of water usersassociations (WUAs) and water sanitation councils (WSCs); and(iv) transfer of management of the irrigation, drainage, and potable water systems tothe beneficiaries after they are adequately trained to manage them.

The project had four components:(i) agricultural support services for dehkan farms (privately managedfarms) in the form of farm demonstrations on soil fertility and crophusbandry, promotion of improved seeds, and establishment of farmmachinery units (FMUs);

(ii) rehabilitation of irrigation and drainage systems covering about 85,000hectares (ha), and related institutional support;

(iii) improvement of potable water supply (PWS) systems within designatedareas, to serve 87,000 beneficiaries who did not have a safe source ofwater; and

(iv) project management, monitoring, and evaluation.

A.

Project Outputs

Agricultural support for dehkan farms. During project implementation, eightdemonstration farms of 10 ha each were established for soil and seed improvementand crop husbandry trials. The demonstration farms and training provided to farmershelped increase farm productivity, and increased the knowledge of farmers onimproved farm technologies, diversified cropping, and better use of land. However, theenvisaged continued provision of farm demonstrations after project completion wasnot realized. The assistance provided to dehkan farms was limited to the duration ofthe project and no mechanism was put in place to ensure sustainability beyond the lifeof the project. The demonstration farms and support services to dehkan farms ceasedafter the project was completed.

As envisaged at appraisal, three FMUs were established. Subsidiary loanagreements of $1 million each were made with the Ministry of Finance (MOF) to eachof the three FMUs. Initially, the demand for machinery services from dehkanfarms wasadequate for FMUs to repay their loans on time. However, the increased availability ofleased agricultural farm equipment and machinery to farmers decreased the demandfor FMU services. Farmers began to have the option to lease more modern, mobile, andrelatively cheaper equipment. Over time, FMUs were not able to generate sufficientrevenues to recover costs, resulting in failure to pay their loans on time. The FMUs,


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Executive Summary xi

B. Performance Assessment

The project is rated successful overall. The objectives of improving livingconditions in project areas and instituting measures such as WUAs and WSCs to sustainthe benefits derived from the project were largely met. The project contributed to anincrease in incomes, reduced waterborne diseases, and provided greater access to safe

drinking water.

The project was rated relevant. At appraisal, the project was relevant to thestated objectives of the government and ADB, namely poverty reduction in the projectareas. It addressed the needs of rehabilitating the irrigation systems and restructuringagriculture through privatization. The construction of PWS systems addressed the needfor increasing access to safe drinking water, reducing waterborne diseases, andimproving living conditions in the project areas. The project design was adequate inaddressing the key constraints of defective irrigation, poor water resource management,limited agricultural support services, and lack of access to potable water in the projectareas. The financing instrumentcomprising a loan from ADB Special Fund resourcesand a technical assistance (TA) grant to support the resolution of accumulated farmdebtwas appropriate.

The project was rated effective in achieving the expected outcomes. Itimproved the living conditions of farming communities in the project area andimplemented measures to sustain the project benefits. Average monthly nominal wagesin the project area steadily increased from TJS32 in 2003 to TJS195 in 2009. Therehabilitation of irrigation and drainage systems increased yields of cotton by about34% and wheat yields by 31%. Real farm income increased by 44% for cotton and 41%for wheat. The improvement in PWS significantly reduced the incidence of waterbornediseases. Between 2004 and 2009, reported cases of malaria fell by 96%, acuteintestinal disease by 78%, typhoid fever by 55%, and hepatitis by 15%. As of the end ofDecember 2012, safe drinking water was made available to 198,600 people,substantially higher than the 87,000 target set at appraisal.

WUAs and WSCs were established as envisaged. Prior to the project the areahad no WUAs and WSCs. The creation of these institutions empowered the beneficiarycommunities to manage irrigation and potable water supplies, organize waterdistribution, and arrange operation and maintenance (O&M) of their systems. Theseinstitutions have remained operational and continued to collect fees from members forO&M. This is likely to sustain the benefits of the rehabilitated irrigation and potablewater systems.

The introduction of FMUs has been effective in encouraging the use of farmmachinery, by stimulating market entry and reducing the costs of leased farmequipment. This resulted in a decline in demand for the services of FMUs. Thedemonstration farms were beneficial to dehkan farms but no mechanism was put in

place to sustain these benefits beyond the life of the project. Sustaining the servicesprovided by the demonstration farms to dehkan farms would have entailed additionaloperation and management costs.

The project was rated efficient in terms of the benefits achieved relative to thecosts incurred. The economic internal rate of return (EIRR) was calculated at 18%,indicating efficient use of resources in achieving the outcome. The positive net presentvalue at a discount rate of 12% indicates economic viability. This re-estimated EIRR ismuch lower than the EIRR of 22.9% estimated at appraisal and is also lower than the


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xii Tajikistan: Agriculture Rehabilitation Project

EIRR calculated by the project completion report (19%). It should be noted, however,

that the re-estimated EIRR included the economic value of PWS benefits, which was notthe case at appraisal. If the benefits are limited only to irrigation, the re-estimated EIRR

drops to 15.84%; however, this would still mean the project is efficient.

In terms of efficiency of process, the project is rated less than efficient.

Deployment of staff for the PMO and PIUs was delayed, which in turn delayed therecruitment of implementation consultants for civil works. Consequently, theimplementation of the civil works was delayed by about 2 years. The delay in

implementation start-up also had an effect on the other components. The work onagricultural support for dehkanfarms was 12 months behind schedule, while delays in

the construction of water supply systems ranged from 15 to 30 months.

The project outcomes are less than likely sustainable. Proper maintenance hasbeen carried out by the MWRLR on project infrastructure in primary and secondarysystems. However, the capacity of WUAs for effective O&M of tertiary systems has beenconstrained by the insufficiency of fees collected from dehkan farms to cover costs ofmaintenance, and the lack of adequate equipment and machinery. As a result, WUAsgenerally have been unable to properly maintain tertiary systems. The sustainability of

the demonstration farms is unlikely as many of these farms have been distributed bythe government to the rural population and no longer provide services to dehkan farms.

Further, support for the management, operation, and maintenance of these farms wasnot continued after project completion.

The project had a significant socioeconomic impact.The expected impact of theproject was poverty reduction in the project areas, from 88% at project appraisal to43% at project completion. The incidence of povertyusing the national poverty line

fell from 88% at appraisal (2002) to an average of 41% in 2008 for the five projectdistricts, indicating that the expected impact on poverty was realized. At the nationallevel, the poverty headcount ratio fell from 72.4% in 2003 to 47.2 in 2009. Outcomescould not be monitored beyond the project duration as the M&E system establishedwithin the MWRLR was discontinued after the PMO was closed. The institutional impactof the project was significant. The project facilitated the creation of WUAs and WSCs,which were nonexistent in the irrigation schemes prior to rehabilitation. Theinstitutional capacity of the MWRLR was strengthened through: support for nationaland local networks for the establishment and expansion of WUAs, training on waterresource management, and provision of equipment and vehicles. The project had no

adverse effects on the environment.

C Issues

The capacity of WUAs to properly maintain and operate tertiary systems islimited by the water user fees collected from dehkan farms. O&M of the irrigationsystems by the WUAs and expansion on a sustainable basis, is only possible if sufficient

revenues are generated to fully cover the cost of equipment, machinery, andmanpower. Although cotton farming is economically profitable, given the high worldprice of cotton, financial viability becomes an issue as the farm gate price of cotton

tends to be low. Levying of export taxes by the government and lack of competitiondue to market distortions, such as local government control on the movement ofcotton, tends to decrease the prices received by farmers, affecting their profits. This inturn affects the farmers ability to pay user charges for water. Institutional reforms arealso needed to strengthen the WUAs capacity to allocate water more efficiently andcollect user charges more effectively.


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Executive Summary xiii

The FMUs are unlikely to be sustainable as their profitability has declined due tothe increased availability of modern machinery and equipment through lease. As aresult, their ability to repay their loans to the MOF on time is doubtful.

D. Lessons and Follow-Up Actions

The lessons identified are as follows:

(i) If mechanisms were incorporated in the project design for sustainingfarm demonstration units beyond the project life, agricultural extensionservices could have been provided to dehkan farms on an ongoingbasis;

(ii) Measures for achieving full cost recovery in a phased manner shouldhave been identified early in the implementation process so thatsustainable O&M of tertiary systems by the WUAs was possible;

(iii) Establishing a permanent M&E system within the MWRLR and not justfor the implementation period could have provided project-specificdata for evaluating long-term outcomes.

The follow-up actions to consider are:

(i) monitor closely cost-recovery measures for sustainable O&M of tertiarysystems, and also the MWRLRs maintenance of primary and secondarysystems;

(ii) discuss with the MOF options to privatize the FMUs, since they haveserved their purpose of introducing agricultural mechanization tofarmers and catalyzing a lease market for machinery.


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CHAPTER 1

Introduction

A Project Description and Expected Results

1. On 18 December 2002, the Asian Development Bank (ADB) approved a loan of$35 million from its Special Fund resources to the Government of Tajikistan for theAgriculture Rehabilitation Project.1The project was expected to reduce poverty in fourproject area districts. The expected outcomes were (i) improvement in living conditionsof farming communities in the project area, and (ii) instituted measures to sustain thebenefits of improvements made under the project. These were to be achieved through(i) enhanced crop yields brought about by improved irrigation and drainage as a resultof infrastructure improvements; (ii) access to improved potable water, which willreduce efforts in fetching water and improve health conditions; (iii) capacity building ofwater resources institutions, and organization and training of water usersassociations(WUAs) and water sanitation councils (WSCs); and (iv) transfer of management of theirrigation, drainage, and potable water systems to the beneficiaries after they areadequately trained to manage them.

2. The project area comprised three major irrigation systems:

(i) Khojabakirgan irrigation system in B Gafurov and J Rasulov districts ofSughd region;

(ii) Vakhsh irrigation system in Bokhtar, Vakhsh, and Kolkhozabad districtsof Kurgan-Tyube Zone in Khatlon region;

(iii)

Kyzylsu-Yakhsu irrigation system in Vose District of Kulyab region.

3. The project had four components:

(i) agricultural support for dehkan 2 farms that included farmdemonstrations on soil fertility and crop husbandry, promotion ofimproved seeds, and establishment of farm machinery units (FMUs);

(ii) rehabilitation of irrigation and drainage systems covering about 85,000ha, and related institutional support;

(iii) improvement of potable water supply (PWS) systems within designatedareas to serve 87,000 beneficiaries who did not have a safe source ofwater; and

(iv) project management, monitoring, and evaluation.

1 ADB. 2002. Report and Recommendation of the President to the Board of Directors: Proposed Loan andTechnical Assistance Grant to Tajikistan for the Agriculture Rehabilitation Project.Manila.

2 Dehkan farms are privately managed farms, either individually or cooperatively, on state-owned landallocated to them by state authorities. Following the breakup of the Soviet Union, most of the collectivefarms in Tajikistan were converted to dehkan farms. The other types of farms in Tajikistan are enterprisefarms resulting from the privatization of specialized state farms, and household/kitchen plots.


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2 Tajikistan: Agriculture Rehabilitation Project

B. Evaluation Purpose and Process

4. The purpose of the project performance evaluation was to:

(i) assess the projects relevance, effectiveness, and efficiency in achievingits objectives and outputs, sustainability of outcomes, and impact;

(ii) assess the performance of ADB, the executing agency, andimplementing agencies; and

(iii) identify key lessons for future ADB operations in the agriculture sector.

5. The project performance evaluation report (PPER) was based on a review ofproject documents and related material; discussions with ADB staff and with keyinformants during the independent evaluation mission (IEM); and data and informationprovided by the executing and implementing agencies.3Benefits to households wereassessed based on information obtained from focus group discussions (FGDs) withproject beneficiaries and data gathered from farms. Details on the methodology usedfor this evaluation are presented in Appendix 1. The PPER will feed into a biggerevaluation study, the country assistance program evaluation for Tajikistan in 2014.

6. The project completion report (PCR) was prepared in December 2010.4Overall,it rated the project successful. The project loan was rated relevant to the needs ofrestructuring agriculture through farm privatization and irrigation rehabilitation in thecontext of government and ADB poverty-reduction strategies. It was rated effective inachieving the expected outcomes of (i) improving living conditions in project areafarming communities and (ii) instituting measures to sustain the benefits fromimprovements implemented under the project. The project was rated efficient by thePCR. The economic internal rate of return (EIRR) was estimated at 19%, indicating thatthe project was highly efficient and economically viable when assessed against anassumed opportunity cost of capital of 12%. However, the process was rated lessefficient as delays in mobilizing consultants resulted in an almost 2-year delay in thephysical implementation of the project. Lastly, the PCR rated the project less likely

sustainable. While the Ministry of Water Resources and Land Reclamation (MWRLR)carried out maintenance on project infrastructure in primary and secondary systems,tertiary systems that were the responsibility of WUAs had little or no maintenance, dueto a shortfall in the levy paid by farmers.5Further, the demonstration farms were ratedless likely sustainable because farmers were less likely to pay to attend field days afterproject completion.6 The PCR did not rate the impact of the project, but nonethelessassessed it as having a notable impact on living standards in the project areas.

7. The PCR validation report (PVR) conducted by the Independent EvaluationDepartment in October 2011 concurred with the PCRs successful, relevant, efficient,and less likely sustainableratings of the project.7The PVR rated the project relevantinthat it addressed poverty in the poorest part of the country and was consistent withgovernment and ADB objectives. The project was rated effective in that the physical

3 The independent evaluation mission was fielded to Tajikistan on 2227 April 2013.4 ADB. 2010. Completion Report: Agriculture Rehabilitation Project in Tajikistan. Manila.5 Primary irrigation systems comprise the main or primary canal that taps water from a source such as lake

or reservoir. Secondary structures are smaller canals that branch out from the main canal to distributewater to the tertiary canals, which are even smaller. It is the tertiary canals that irrigate the farmers fields.

6 Farmers operating the demonstration farms received support under the project and provided advice, but itwas expected that the effort and costs of providing this service would eventually deter farmers fromcontinuing to provide it for free.

7 Independent Evaluation Department. 2011. Validation Report: Agriculture Rehabilitation Project inTajikistan. Manila: ADB.


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Introduction 3

targets were met for rehabilitation of irrigation and drainage infrastructure, expansionof the command area, and improvements to water supply systems. The PVR rated theproject efficient although it noted a methodological error in the recalculation of theEIRR in the PCR.8The magnitude of benefits from the water supply component was notquantified, which would likely have resulted in a high EIRR. The sustainability of theproject was rated less likely in view of the failure of WUAs to properly maintain the

rehabilitated infrastructure, and the fact that farmers were unlikely assume the costs ofoperating the demonstration farms for free. The PVR rated the impact of the projectsubstantial.

8 The PCR EIRR calculation was based on crop production only. No separate EIRR calculation was done for

the potable water supply component, which resulted in significant economic benefits. Further, the PCRstated that the numeraire was the domestic price and a standard conversion factor was used for shadowpricing. The PVR pointed out that this was incorrect because traded goods should be adjusted by theshadow exchange rate factor when domestic price is the numeraire.


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CHAPTER 2

Design and Implementation

A.

Formulation

8. At the time of appraisal in November 2002, the project was consistent with thegovernments rural development strategy that focused on (i) continuing the farmreorganization program, (ii) improving the efficiency of irrigation water use, (iii)developing a rural credit system, (iv) rehabilitating key irrigation facilities, and (v)implementing a poverty reduction program with a substantial agricultural component.The interim operational strategy for Tajikistan approved by ADB in 1998 wasformulated prior to the Poverty Reduction Strategy of 2002, and thus did not have anexplicit poverty focus. Nonetheless, the interim strategy for Tajikistan included

agriculture as one of the key sectors for support.

9. The project was formulated by a technical assistance (TA) project carried out inFebruaryJuly 2001.9The TA was built on the previously completed Agriculture SectorAssessment Project.10The formulation of the project addressed a key constraint toagricultural production by rehabilitating defective irrigation facilities. The other keyconstraints identified were poor water resource management, limited agriculturalsupport services and lack of access to potable water in many rural communities.

B. Rationale

10. At the time the project was formulated, agriculture in Tajikistan contributed

about 20% of gross domestic product and provided a livelihood for 52% of theworkforce (footnote 1). About 73% of the population lived in rural areas. Agriculturalproduction depended on irrigation, without which the land had little productionpotential. Extensive irrigation systems, mostly built during the former Soviet era,covered nearly half of the countrys relatively flat land. The irrigation and associateddrainage systems rapidly deteriorated due to poor management during the civil war,and the lack of maintenance. Improving the performance of irrigated agriculturerequired rehabilitating irrigation and drainage systems and implementing moreefficient water management. Accumulated debts were widespread across farms due topoor loan administration and a drop in the world price of cotton fiber. Widespreadpoverty, inefficiency of traditional farm structures, and weak fiscal capacity slowed theprogress of agricultural reforms. The reform process needed to be expanded anddeepened to restore farmers incentives, enhance the productivity and profitability of

agriculture, and improve the living conditions of the rural population.

11. In this context, the project aimed to support the Government of Tajikistan inthe rehabilitation of selected irrigation and draining facilities, provision of associatedfarm production support services, and construction of rural water supply in the maincotton production regions of Khatlon and Sughd. In parallel with these, the project

9 ADB. 2000. Technical Assistance to Tajikistan for Agriculture Rehabilitation Project. Manila.10ADB. 1999. Technical Assistance to Tajikistan for Agriculture Sector Assessment Project. Manila.

Improving the

performance of

irrigated

agriculture

required

rehabilitating

irrigation and

drainage

systems and

implementing

more efficient

water

management

The project

aimed to

support the

Government of

Tajikistan in the

rehabilitation of

selected

irrigation and

draining

facilities


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Design and Implementation 5

aimed to accelerate the agricultural reform process by building the capacity of publicsector agencies and farmers organizations.

C.

Cost, Financing, and Executing Arrangements

12. The project cost was estimated at $43.75 million, comprising $24.43 million in

foreign exchange costs and $19.32 million in local currency costs (Appendix 2, TableA2.1). It was to be financed by an ADB Special Fund loan of $35 million, governmentfunds of $7 million, and contributions from beneficiaries of $1.75 million. The actualproject cost was $49.97 million, comprising foreign exchange costs of $34.50 million,and local currency costs of $15.47 million. ADB financed $40.10 million, 11 thegovernment $8.11 million, and the beneficiaries $1.76, mainly in the form of laborduring construction and rehabilitation works. The emergency assistance to rehabilitatethe Dehkanabad canal and reconstruct the embankment on the Pyanj River amountedto $7.94 million. Technical assistance of $960,000 was approved to provide advisorysupport to the project, of which $918,941 (96%) was utilized.

13. The implementation arrangements as proposed at appraisal were followed. TheMWRLR was the executing agency, responsible for the overall management andimplementation of the project. The Agriculture Academy of Sciences was responsiblefor implementing the subcomponent on farm demonstrations and promotion ofimproved seeds. A high-level project steering committee was established andfunctioned during project implementation to facilitate interministerial coordination andto provide oversight and guidance on implementation. A project management office(PMO) was established within the MWRLR to manage project activities on a daily basis,and to liaise with ADB and the coordinating bodies. Three project implementation units(PIUs), one in each project area, were set up for project implementation andmaintaining liaison with the PMO, local administration, and beneficiary organizations.

D. Procurement, Construction, and Scheduling

14. ADB Procurement Guidelines (2013, as amended from time to time) werefollowed in the procurement of goods and services. In total, 155 contracts wereawarded amounting to $48.29 million (Appendix 2, Table A2.2). Of these, 78 civilworks contracts worth $35.90 were awarded. Only one was awarded throughinternational competitive bidding procedures, while the remaining 77 civil workscontracts were awarded through national competitive bidding. Agricultural equipmentcosting $2.90 million was procured for use by the FMUs through internationalcompetitive bidding and shopping. Equipment, machinery and vehicles amounting to$5.8 million were procured by direct purchase, shopping, and limited internationalbidding. Contracts for consulting services amounted to $2.55 million. Internationalcompetitive bidding was used to contract international consultants.

15. The schedule for project implementation was for 6 years, 20032009. Loaneffectiveness was slightly delayed to 14 August 2003 from the expected date of 31 July2003, due to the time involved in obtaining the borrowers legal opinion. Deploymentof staff was delayed for the PMO and PIU, which began to function fully only in mid-December 2003. This delayed consultant recruitment, which in turn delayed theimplementation of civil works. Specifically, the rehabilitation of the Vakhsh irrigationscheme was delayed by 21 months, while for the Khojabakirgan scheme it was delayed

11The increase in the dollar-denominated loans was due to the decline in the dollar special drawing rightrate.


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by 12 months. The rehabilitation of the Kyzylsu-Yakhsu scheme was on schedule, as itwas not due until the third quarter of 2005.

16. These delays caused further delays in the implementation of other components.The implementation of agricultural support for dehkan farms was 12 months behindschedule. As regards the component on improving PWS, the delays in constructing

water supply systems ranged from 15 to 30 months. To compensate for the start-updelays, a revised implementation schedule was approved by ADB. Closing of the loanwas scheduled for 30 September 2009, but a grace period of 3 months was allowed toensure payments for expenditures incurred prior to the closing date.

E.

Design Changes

17. On 15 February 2006, a major change in scope was approved by ADB toreallocate loan proceeds to fund the emergency rehabilitation of the Dehkanabad canalin the Chubek irrigation system that was damaged by severe flooding in KhamadoniDistrict. The flooding damaged about 600 homes, of which 148 were completelydestroyed, and 16,000 people were evacuated. The supply of drinking water to thepopulation was also interrupted. Specifically, the change in project scope included (i)rehabilitation of 10.4 kilometers (km) of the Dehkanabad canal and (ii) strengtheningof 4.4 km of flood embankment along the Pyanj River.

F.

Outputs

18. The outputs of the four project components are discussed below. Appendix 3presents the project framework and achievements.

1. Agricultural Support for

Dehkan

Farms

19. The component on agricultural support for dehkan farms was envisaged topromote improved farm technologies, establish demonstration farms, and to set up

three FMUs. The Agricultural Academy of Sciences was the implementing agency forthe subcomponents on farm demonstrations and promotion of improved seeds. Duringproject implementation, eight demonstration farms of 10 ha each were established forsoil and seed improvement and crop husbandry trials.12Training was provided to 960farmers on seeds selection, crop diversification, use of fertilizers, and on-farm watermanagement. The demonstration farms and training provided to farmers helpedincreased farm productivity, and increased farmers knowledge on improved farmtechnologies, diversified cropping, and better use of land. It was envisaged that theactivities of the demonstration subprogram would continue after project completion.However, this was not realized. The assistance provided to dehkanfarms was limited tothe duration of the project and no mechanism was set in place to ensure sustainabilitybeyond the life of the project. The demonstration farms and support services to dehkanfarms ceased to operate after the project was completed. Most of the demonstrationfarms were later distributed to the population by the government.13

20. As envisaged at appraisal, three FMUs were established. Subsidiary loanagreements of $1.0 million each were made with the Ministry of Finance (MOF) to eachof the three FMUs, one in each project system. These FMUs were to provide farm

12Three in Khojabakirgan, three in Vakhsh, and two in Kyzylsu-Yakhsu.13For example, a 439-ha demonstration farm in Vakhsh visited by the independent evaluation mission was

distributed to individual and family dehkanfarms after completion of the project.

Training was

provided to 960

farmers on seeds

selection, crop

diversification,

use of fertilizers,

and on-farm

water

management

The assistance

provided to

dehkan farms

was limited to

the duration of

the project and

no mechanism

was set in place

to ensure

sustainability

beyond the life

of the project


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machinery services to dehkan farmscollecting service charges determined on acommercial basis, and were to become eligible for privatization once their loans fromthe MOF had been repaid. Initially, the demand for services was adequate for FMUs torepay their loans on time. However, the increased availability of leased agricultural farmequipment and machinery reduced the demand for FMU services. Farmers began tohave the option to use more modern, mobile, and relatively cheaper equipment

through lease agreements. Over time, FMUs were not able to generate sufficientrevenues to recover costs, resulting in failure to pay their loans on time.14

2. Rehabilitation of Irrigation and Drainage Systems

21. The project fully rehabilitated the irrigation and drainage facilities of threemajor systems comprising: (i) Khojabakirgan irrigation system in B Gafurov and JRasulov districts of Sughd region, (ii) Vakhsh irrigation system in Bokhtar, Vakhsh, andKolkhozabad districts of Kurgan-Tyube Zone in Khatlon region, (iii) the Kyzylsu-Yakhsuirrigation system in Vose district of Kulyab region. The construction and rehabilitationundertaken by the project met the target of providing a steady supply of irrigationwater to 85,000 ha of land. As of the end of December 2012, the area covered by thethree rehabilitated irrigation systems had increased to 93,000 ha (Appendix 4, Table

A4.1).

22. In terms of outreach, the target of 471,000 beneficiaries reached by theimproved irrigation and drainage system was met, as project areas were rehabilitatedas expected at appraisal. As of the end of December 2012, the number of beneficiariescovered by the rehabilitated infrastructure had increased to 521,000 (Appendix 4, TableA4.1).

23. Following the rehabilitation of irrigation infrastructure, the average yields ofcotton increased from about 1.9 tons/ha to 2.7 ton/ha, exceeding the targets of 2.22.4tons/ha set at appraisal.15However, total production of cotton in project areas declinedand was not at the level expected at appraisal (Appendix 4, Figure A4.1). In theKhojabakirgan scheme total production fell from 52,800 tons in 2003 to 31,057 tons in2011 (Appendix 4, Table 4.2). In Vakhsh, total production decreased from 69,681 tonsin 2003 to 52,528 tons in 2011. In the Kyzylsu-Yakhsu scheme, total production alsodeclined from 25,556 tons in 2003 to 19,323 tons in 2011. The general decline inproduction of cotton was mainly due to the reduction in area planted with cotton, asfarmers diversified to more profitable crops. The governments policy of allowingfarmers freedom in crop selection encouraged this diversification (paras. 3435). In20032008, there was an increasing trend in the production of crops other than cotton,such as wheat, cereals, vegetables, fruits, potatoes, melons and gourds in the fiveproject districts (Appendix 4, Figures A4.1A4.2). Nonetheless, cotton and wheatcontinue to dominate the cropping pattern. In 2003, when the project started, the twocrops together accounted for 93% of the area cultivated, and in 2008 accounted for89%.16

24. The rehabilitation of the Dehkanabad canal and strengthening of theembankment along the Pyanj River was an emergency response to severe flooding in

14Repayment of loans was agreed over a 20-year period, to be made in semi-annual payments. As of April2013, Khojabakirgan FMU made its last payment in September 2008, Vakhsh FMU in August 2010, andKyzylsu-Yakhsu FMU in December 2011.

15Based on data derived from focus group discussions with farmers representing the three irrigation systems,and from the MWRLR.

16Based on data derived from the government completion report, 2009.

Following the

rehabilitation

of irrigation

infrastructure,

the average

yields of cotton

increased from

about 1.9

tons/ha to 2.7

ton/ha,

exceeding the

targets of 2.2

2.4 tons/ha set

at appraisal


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Khamadoni District and was not included as a component at appraisal. The physicaltargets for this assistance were met, in rehabilitating 10.4 km of the Dehkanabad canaland strengthening 4.4 km of flood embankment.

25. The project envisaged the establishment of 30 WUAs in six districts. Duringimplementation, it was agreed with ADB that 20 WUAsrather than the 30 originally

agreedwould be established in five districts, to better reflect hydrological factorssuch as the borders of irrigation and command areas, and the boundaries ofadministrative units. These WUAs covered 327 dehkan farms totaling 42,620 ha and304,700 farm household beneficiaries.17The WUA boards and staff were trained inWUA establishment, operation, financial management, and collection of fees. About27% of the combined board membership of these WUAs was made up of women. Asof the end of December 2012, the number of WUAs in project areas rose to 36 onaccount of the governments continued efforts to transfer management of irrigationand drainage systems to beneficiaries. To support operation and maintenance (O&M) ofirrigation and drainage systems, WUAs collect fees from members based on the volumeof water used, which includes a markup over the rate charged by the MWRLR to WUAs.On top of this, WUAs also charge a flat fee per hectare cultivated by farmer members.

26. To build institutional capacity in water management, 15 water resourcemanagement agencies within the MWRLR were supported with equipment andvehicles.18Yearly training was also conducted during 2005-2008 on the promotion ofwater resources management, to build the capacity of these agencies.

3. Improvement of Water Supply Systems

27. The project aimed to improve PWS systems within the command areas of thedesignated irrigation systems, to serve 87,000 beneficiaries who did not have a safesource of water. The proposed works included the installation of 225 pumps for liftinggroundwater in Vakhsh District. However, due to the high mineral content found in80% of the groundwater, it was decided to rehabilitate the main water pipeline inVakhsh, which used to supply water to most areas of southwest Vakhsh but had falleninto disrepair due to lack of maintenance. This extended the area supplied with potablewater and increased the number of beneficiaries in Vakhsh District to 23,630 peoplefrom the target of 9,200 people.

28. The water supply infrastructure constructed in selected communities of fivedistricts expanded the area covered by the water supply distribution network increasingthe number of beneficiaries. At project completion, the estimated number of peoplereached by improved water supplies was 180,546, of which more than 66,000 werewomen. The number of beneficiaries is more than twice the appraisal estimate of87,000 (Appendix 5, Table A5.1). Seven WSCs were established to manage and operatethe delivery of potable water to these beneficiaries. The project provided furthersupport to sanitary and epidemiological stations of the Ministry of Health in the five

project districts through building refurbishment and provision of office and laboratoryequipment.

17Household members engaged in farming are considered members of their WUA. WUAs cover only areaswhere farms have been privatized.

18Support for equipment included measurement devices, communication facilities, electrical equipment, andcomputers.

The number of

WUAs in

project areas

rose to 36 on

account of the

governments

continued

efforts to

transfer

management

of irrigation

and drainage

systems to

beneficiaries

The water

supply

infrastructure

constructed in

selected

communities

of five districts

expanded the

area covered

by the water

supply

distribution

network


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4. Project Management, Monitoring, and Evaluation

29. As envisaged in the project design, the PMO and three PIUsone in each of thethree project areaswere established on 13 May 2003. A high-level project steeringcommittee chaired by the first deputy Prime Minister was established and functioned inproviding policy guidance and facilitating interministerial coordination during

implementation. The PMO was led by a project director and the PIUs by deputy projectdirectors.

30. A monitoring and evaluation (M&E) unit was established within the PMO tomonitor the environmental and social impact of the project. This monitoring programwas developed for the project implementation period and was not continued afterproject completion.

G.

Consultants

31. ADB Guidelines on the Use of Consultants (2013, as amended from time totime) were used in the selection of consultants. A $2.5-million consulting servicescontract, including input of 87 international person-months and 1,862 national person-months was awarded to Louis Berger Group (LBG) in June 2004. The consultants beganto perform their duties in July 2004.

32. In accordance with their contract, in September 2004, LBG subcontracted thedesign institute of Tojikgiprovodkhoz to conduct field surveys; prepare designs,drawings, and bills of quantities; and estimate the costs for the irrigation and drainagerehabilitation works. The institute provided experienced staff and adequate fieldequipment to carry out the tasks. As a result, consultants were not needed for thiswork and therefore the national consultant inputs were reduced by 154 person-months.To support the emergency flood rehabilitation works on the Dehkanabad canal 6.65international person-months and 66.00 national person-months of consulting serviceswere added. At the completion of the contract, 84.80 international person-months and

1,804.35 national person-months of consulting services had been utilized. Theconsultants demonstrated flexibility in adjusting the structure of consultancy inputs tothe needs of the project and delivered satisfactory outputs. On the whole, theperformance of the consultants was satisfactory.

H.

Loan Covenants

33. The covenants were relevant and were complied with except for one that isongoing (Appendix 6). The ongoing covenant pertains to developing a program for therecovery of O&M costs of the irrigation and drainage systems on a phased basis over 10years. The MWRLR sources funds for the O&M of primary and secondary systems fromwater charges and annual budgetary allocations. Without the budgetary allocations,the water charges are not sufficient to fully recover the cost of O&M. Likewise, WUAsrely on the markup over the rate charged by the MWRLR and on the flat fee chargedper hectare cultivated by members. These have been inadequate to fully recover thecost of O&M.

I. Policy Framework

34. The project was formulated within the context of the governments reforminitiative to transform the agriculture sector into a competitive market-led economy.

The

consultants

demonstrated

flexibility in

adjusting the

structure of

consultancy

inputs to the

needs of the

project and

delivered

satisfactory

outputs


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work is ongoing, based on the action plan for IWRM that was formulated for 2011 2016.22

22European Union Water Initiative. 2012. Roadmap of the National Policy Dialogue on Integrated WaterResources Management in the Republic of Tajikistan. Dushanbe.


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CHAPTER 3

Performance Assessment

A.

Overall Assessment

39. Overall the project is rated successful (Table 1). It is rated relevant, effective,efficient, and less than likely sustainable. The objectives of improving living conditionsin project areas and instituting measures to sustain the benefits derived from theproject were largely met. The project contributed to increasing incomes, reducedwaterborne diseases, and provided greater access to safe drinking water. Further, theproject facilitated the creation of beneficiary-managed WUAs and WSCs, which werenonexistent prior to rehabilitation. The institutional capacity of the MWRLR wasstrengthened through support for national and local networks for the establishment

and expansion of WUAs, training on water resource management, and provision ofequipment. The institutional structures established by the project will help sustain thebenefits realized during implementation. However, the revenues collected by WUAsfrom members have not been adequate to fully cover the cost of O&M of tertiarysystems.

Table 1: Overall Performance Assessment

Criterion Weight (%) Assessment Rating Value Weighted RatingRelevance 25 Relevant 2 0.50Effectiveness 25 Effective 2 0.50Efficiency 25 Efficient 2 0.50Sustainability 25 Less than likely 1 0.25Overall Rating

a Successful 1.75

a

Highly successful > 2.7; Successful 2.7 and >1.6; Partly successful 1.6 and >0.8; Unsuccessful 0.8.Source: Independent Evaluation Department.

B.

Relevance

40. At appraisal, the project was relevant to the stated poverty reduction goal inthe project areas and to the objectives of the government and ADB. Duringimplementation it remained consistent with the poverty reduction strategies of thegovernment and ADB. It continued to be relevant at completion in terms of addressingthe critical constraints to agricultural production and restructuring agriculture throughprivatization. By rehabilitating the irrigation and drainage systems, establishing newbeneficiary-led water user organizations, and strengthening the capacity of waterinstitutions, the project helped increase farm productivity and diversification in

agriculture, contributing to improvement in farm household incomes. The constructionof PWS systems was relevant to the need for safe drinking water, reducing waterbornediseases, and improving living conditions in the project areas. The institutionalarrangement of letting WUAs manage tertiary irrigation and drainage systems wasappropriate in view of the governments policy of supporting private sector-ledagricultural growth and development. However, given the complicated processinvolved in the implementation of water sector reforms, it was unrealistic to expectWUAs to handle O&M of all the projects irrigation and drainage facilities within thelimited time frame of the project (footnote 1, para. 34).

Overall the

project is

rated

successful

It was

unrealistic to

expect WUAs

to handle

O M of all

the projects

irrigation

and drainage

facilities

within the

limited time

frame


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Performance Assessment 13

41. The project design was adequate in addressing the key constraints of defective

irrigation, poor water resource management, limited agricultural support services, andlack of access to potable water in the project areas. The financing instrument,

comprising a loan from ADB Special Fund resources and a TA grant to support theresolution of accumulated farm debt, was appropriate. This evaluation rates the projectrelevant based on its significance to achieving the stated goal of reducing poverty in

the project area on a sustainable basis.

C Effectiveness

42. The expected outcomes of the project were (i) improvement in the livingconditions of farming communities in the project area, and (ii) institutionalization ofmeasures to sustain the benefits derived from the project (Appendix 3). The project wasrated effectivein achieving these expected outcomes.

43. The rehabilitation of irrigation and drainage systems increased the yield ofcotton by about 34% and wheat by about 31% (Appendix 8, para. 7). Real farm income

increased by 44% per hectare of cotton and 41% per hectare of wheat (Appendix 8,paras. 910). During implementation, the average monthly nominal wages of thepopulation in the project area steadily increased from TJS32 in 2003 to TJS195 in 2009(Appendix 7, Figure A7). In 2011, average wages in the project area rose further toTJS282. The improvement in PWS significantly reduced the incidence of waterbornediseases. From 2004 to 2009, reported cases of malaria fell by 96% (from 642 to 22),

acute intestinal disease by 78% (from 16,271 to 3,593), typhoid fever by 55% (from152 to 59) and hepatitis by 15% (from 1,366 to 1,166) (Appendix 5, Table A5.2). By the

end of 2008, safe drinking water was made available to 180,546 people, substantiallyhigher than the target of 87,000 set at appraisal; this number further increased to198,600 by the end of 2012. The project helped improve living conditions in the projectareas by contributing to an increase in incomes, significantly reducing waterbornediseases, and providing greater access to improved PWS.

44. The envisaged establishment of WUAs and WSCs was realized. Prior to theproject there were no WUAs and WSCs in the project areas. The creation of these

institutions empowered the beneficiary communities to manage irrigation and potablewater supplies, organize water distribution, and arrange O&M of their systems. Theseinstitutions have remained operational and continue to collect fees from members forO&M. Further, the projects establishment of national and local WUA support unitswithin the MWRLR will expand the network of WUAs in other areas in line with thegovernments reform process of reorganizing and privatizing farms.

45. While measures were instituted to sustain the benefits of the rehabilitated

irrigation and potable water systems, this has not been the case for agriculturalsupport through demonstration farms. The demonstration farms were beneficial todehkan farms but no mechanism was put in place to sustain the benefits beyond the

life of the project. Sustaining the services provided by the demonstration farms todehkan farms would have entailed additional operation and management costs. Themechanization process is likely to be sustained due to the entry into the market of farmequipment and machinery that can be leased by farmers at lesser cost, even thoughthis has led to reduced demand for the services of FMUs over time.

The project

design was

adequate in

addressing

the key

constraints of

defective

irrigation

The

rehabilitation

of irrigation

and drainage

systems

increased the

yield of cotton

by about 34

and wheat by

about 31


26/61


27/61

Performance Assessment 15

help achieve sustainability of operations, as it will involve application of IWRMprinciples and asset management transfer from local government and the MWRLR tothe WUAs. However, the realization of the full benefits to WUAs will take time, as theprocess of reforms is long and complicated.

50. The demonstration farms subprogram was introduced to newly organized

dehkanfarms to promote technologies that could dramatically increase productivity. Itwas envisaged that the activities of these demonstration farms would continue afterproject completion. The sustainability of the demonstrations farms is unlikely as manyof these farms have been distributed by the government to the rural population and nolonger provide services to dehkan farms. Further, support for the management,operation, and maintenance of these farms was not continued after project completion.The sustainability of FMUs is rated less than likely, as profitability declined and theFMUs have not been able to repay their loans with the MOF on time. In view of this,the FMUs may not be eligible for privatization within the period set in the subsidiaryloan agreement with MOF. The mechanization process may, however, be sustained dueto the increased availability of farm equipment and machinery on lease.


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CHAPTER 4

Other Assessments

A.

Impact

51. Socioeconomic impact. The project had a significant socioeconomic impact.Theexpected impact of the project was poverty reduction in the project areas from 88% atappraisal (2002) to 43% at project completion (2008). The poverty headcount ratiousing the national poverty linefell from 88% at appraisal to an average of 41% in2008 for the five project districts, indicating that the expected impact on poverty wasrealized (Appendix 7, Table A7.1). The fall in poverty incidence in the five project areaswas greater than that observed at the national level. At the national level, the povertyheadcount ratio fell from 72.4% in 2003 to 47.2% in 2009. Farmers reported in the

FGDs conducted by the IEM that the majority (60%) of them had experienced anaverage increase in farm incomes of more than 50% (Appendix 7, Table A7.2). Farmersattributed this increase mainly to the rehabilitated irrigation and drainage system anduse of farm machinery. Health conditions improved as indicated by the significantreduction in waterborne diseases (para. 43); and savings in medical expenses weregenerated by beneficiaries of the project due to the improved PWS system (Appendix 8,para. 14). Further, farmers reported in the FGDs that time spent in fetching watersignificantly decreased from an average of 2.5 hours per day before rehabilitation ofthe water system to 0.4 hours per day after rehabilitation, benefiting women andresulting in time savings of 113 hours a year per household (Appendix 8, para. 15).Further, by the end of 2012, 198,600 people in project areas had benefited from accessto safe drinking water.

52. The emergency assistance provided by the project for the rehabilitation of theembankment of the Pyanj River and the Dehkanabad canal had significant benefits forthe population affected by the severe flooding in Khamadoni District in June 2005. Theassistance, which was not foreseen at appraisal, gave protection to 50,900 ha,including 23,000 ha of the Chubek irrigation system that was cut off from the irrigationsupply. In addition, houses and other infrastructure were protected.

53. Institutional impact. The institutional impact of the project was significant.Theproject facilitated the creation of WUAs and WSCs. WUAs have been given theresponsibility to manage the irrigation and drainage system in their areas and to collectfees to finance these operations. The institutional capacity of the MWRLR wasstrengthened through support for national and local networks for the establishment

and expansion of WUAs, training on water resource management, and provision ofequipment and vehicles. Beneficiary-led WSCs were established to manage the PWSsystems. These WSCs have been able to fund their operations from fees collected forwater services. To complement the improvement in PWS, the project provided supportto local health-monitoring stations of the Ministry of Health in the form of laboratoryequipment and building refurbishment. The strengthening of water managementinstitutions will enhance the governments efforts in farm restructuring andprivatization and establish a strong foundation for the expansion of beneficiary-ledmanagement of agricultural infrastructure.

The

strengthening

of water

management

institutions will

enhance the

governments

efforts in farm

restructuring

and

privatization


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Other Assessments 17

54. Environmental impact. The project had no significant adverse effect on theenvironment. During the 20032008 implementation period, agricultural land inproject areas classified by the Ministry of Irrigation and Water Resources as goodincreased by 12,806 ha or 16%, and as satisfactory increased by 3,041 ha or 10%(Table A7.3). Agricultural lands classified as unsatisfactory declined by 7,349 ha or58%. Land area with critical levels of groundwater salinity decreased by 47% and that

with soil salinity decreased by 26%. The rehabilitation of the Dehkanabad canal and thereconstruction of the Pyanj River embankment provided protection from severeflooding that could damage rural infrastructure and the environment. On the whole,the project had a significantpositive impact on the environment.

B.

Asian Development Bank Performance

55. The performance of ADB was satisfactory. ADB adequately supervised theproject, with 9 missions fielded in December 2002October 2009. On 1 September2005, project administration was transferred to the Tajikistan Resident Mission. Thisfacilitated closer supervision of the project and coordination with the PMO. ADB wasresponsive to the requests of the PMO and provided assistance whenever necessary,particularly in documentation and administration. ADBs response to the governmentsrequest for emergency assistance following the flooding of the Pyanj River was timelyand appropriate. ADB took into account the lessons learned from previous projects,particularly the need to address defective irrigation facilities that posed a significantconstraint to agricultural production.

C. Borrower and Executing Agency Performance

56. The performance of the borrower was satisfactory. The borrower satisfactorilycomplied with the loan covenants and provided the required counterpart funds. Thehigh-level project steering committee formed for the project met regularly andprovided oversight and guidance on implementation. From February 2008 toSeptember 2009, the ADB project performance reports rated the performance of the

project as highly satisfactory. The MWRLR effectively managed a large number of civilworks contracts, including contracts related to the emergency assistance for therehabilitation of the Dehkanabad canal and reconstruction of the Pyanj Riverembankment. The MWRLR ensured that physical targets for reconstruction andrehabilitation were met. The performance of the MWRLR as executing agency wassatisfactory.

D. Technical Assistance

57. A $960,000 advisory technical assistance grant24 was approved to assist thegovernment in (i) resolving accumulated farm debts; and (ii) promoting, implementing,and monitoring policy reforms, particularly in agricultural marketing and water

resources management. The TA was signed on 7 March 2003 and was completed on 30September 2006. It used 26 international and 39 national person-months ofconsultancy inputs. Of the $960,000 approved for the TA, $918,942 (96%) was used. Inthe process of implementation, it became apparent that the main issue was the risingdebt of cotton-producing farms, which was estimated at $240 million in January 2004.Hence, the TA eventually focused mainly on the cotton debt issue.

24ADB. 2002. Technical Assistance to the Republic of Tajikistan for Farm-Debt Strategy and Policy Reforms.Manila.

On the

whole, the

project had a

significant

positive

impact on

the

environment


30/61


58. The findings of the TA became the basis for the strategic agenda of ADB forTajikistans agriculture sector. The TA report was effective in drawing the attention ofgovernment to the gravity of the farm debt problem, which undermined theperformance of the agriculture sector. Through ADBs follow -up effort, the governmentformulated a Comprehensive Farm Debt Strategy, and a high-level governmentinstitution, the Independent Commission, served as the focal point on cotton farm debt.

The forums initiated by the TA were instrumental in facilitating the internationalcommunity to come up with a consensus on a comprehensive farm debt resolution,and in providing effective donor coordination, with ADB taking the lead role. Lastly, theTA served as valuable input to the preparation of the Sustainable Cotton SubsectorProject approved on 3 November 2006, without project preparatory TA.25

59. The TA was highly successful. The TA report has become a highly significantanalytical piece in understanding the farm debt problem confronting the Tajik cottonsector. A milestone TA outcome was the approval of Resolution 111 or plan ofmeasures for farm debt resolution in March 2007 (para. 35). This road map, which setsout the short- and medium-term policy and institutional reforms required forsustainable farm debt resolution and for the development of profitable farms, was aconcerted effort of both the donor community and government.

25ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan andAsian Development Fund Grant to the Republic of Tajikistan for the Sustainable Cotton Subsector Project.Manila.


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CHAPTER 5

Issues, Lessons and Follow-

Up Actions

A.

Issues

60. The MWRLR has been able to properly maintain project infrastructure inprimary and secondary systems using funds from water charges and budgetaryallocations. However, WUAs capacity to properly maintain and operate the tertiarysystems has been constrained by the insufficiency of fees collected from dehkanfarms.Without sufficient revenues to fully cover the costs of O&M, the maintenance of these

systems is jeopardized. Moreover, since the dilapidated and inefficient irrigationinfrastructure inherited from the soviet era was rehabilitated, as opposed to newlyconstructed, the O&M costs are likely to be higher. Funds are needed for adequateequipment, machinery, and manpower to enable WUAs to effectively carry out O&M ofirrigation systems and expansion on a sustainable basis.

61. Although cotton farming is economically profitable given the high world priceof cotton, financial viability becomes an issue as the farm gate price of cotton tends tobe low. Levying of export taxes by the government and lack of competition due tomarket distortionssuch as local government control on the movement of cottontends to decrease the prices received by farmers, affecting their profits. This in turnaffects the farmers ability to pay user charges for water.

62. Apart from insufficient revenues, the inability of WUAs to generate sufficientresources may also be partly attributed to their institutional readiness to assumegreater responsibilities for O&M, considering that they were created only duringimplementation of the project. Revenue collection will improve if the WUAs are betterequipped to exercise their authority, and allocate water more efficiently. The ongoingwater sector reforms include institutional reforms that would strengthen the capacityof WUAs, but the process is long and complicated.

63. FMUs established in 2004 were envisaged to provide farm machinery services todehkan farms on a commercial basis. They continued to operate after projectcompletion but with declining profitability. The demand for their services decreaseddue to increased availability at lower costs of modern machinery and equipment

through lease. As a result, FMUs have not been able to repay their loans with the MOFon time. With the decreased demand for their services, the sustainability of FMUoperations is in question.

B.

Lessons

64. Mechanisms for sustaining support services for dehkan farms should have beenincorporated in the project design.Agricultural support provided to dehkanfarms waslimited to the duration of the project. No mechanisms were put in place to ensure

WU s

capacity to

properly

maintain and

operate the

tertiary

systems has

been

constrained by

the

insufficiency

of fees

collected from

dehkan farms

Revenue

collection will

improve if the

WUAs are

better

equipped to

exercise their

authority, and

allocate water

more

efficiently


32/61


sustainability of benefits beyond the projects life. The activities of demonstrationsfarms were very helpful to dehkan farms in increasing productivity, but these werestopped after project completion. Further, most of these demonstration farms weredistributed to individual and family dehkan farms after completion of the project.Agricultural extension services are in the nature of merit goods, with positiveexternalities to the society. Hence mechanisms should have been established for the

provision of these services on an ongoing basis to ensure sustainability of productivitygains.

65. The phasing of cost recovery and measures to ensure sustainable operation andmaintenanceof tertiary systems should have been identified at the outset. Transferringmanagement of tertiary irrigation and drainage systems to beneficiaries as a means forparticipatory water management was appropriate and in line with IWRM principles.However, the phasing of cost recovery and measures needed for WUAs to becomesustainable should have been made clear at the outset. Measures for achieving full costrecovery should have been identified early in the implementation process.

66. A monitoring and evaluation system needs to be permanently establishedwithin the Ministry of Water Resources and Land Reclamation.

While it was established

as part of project management, M&E was discontinued after the PMO closed. Hence,project specific data cannot be provided for evaluating long-term outcomes, impact,and poverty reduction.

67. The project completion report had earlier identified the following lessons. Byengaging local expertise in place of international and national consultants, toundertake the survey and design of works, the government can benefit from reducedcosts, faster implementation, and continued access to project-relevant expertise.Establishing the WUAs in advance would help them participate in the design ofirrigation and drainage schemes and ensure ownership.

C.

Follow-Up Actions

68. Operation and maintenance of project infrastructure. The MWRLR should takemeasures to support WUAs in the O&M of irrigation systems until they are able to fullyrecover costs from water fees. Clear measures and mechanisms need to be establishedfor sustainable O&M of project infrastructure managed by WUAs. Gradual or phasedincreases in fees charged to members over a specific period of time may be consideredto help achieve sustainable O&M. ADB needs to closely monitor both cost recoverymeasures for sustainable O&M of tertiary systems, and also MWRLR maintenance ofprimary and secondary systems. Given the extent of deterioration in the irrigationinfrastructure, new construction should be considered in place of rehabilitation andrepair.

69. Farm machinery unit operations. ADB and the MOF need to discuss

privatization or other measures that will ensure the competitiveness and profitability ofFMUs.

The MWRLR

should take

measures to

support

WUAs in the

O M of

irrigation

systems until

they are able

to fully

recover costs

from water

fees


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Appendixes


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APPENDIX 1: EVALUATION METHODOLOGY

1. The methodology used for the project performance evaluation involved(i) interviews with key informants from government agencies, during the independent evaluationmission (IEM); (ii) discussions with staff in the Asian Development Bank Tajikistan Resident Mission; (iii)review of project documents and related materials; (iv) analysis of data provided by executing andimplementing agencies and from official sources; (v) conduct of focus groups discussions (FGDs) withfarmers; and (vi) re-estimation of the economic internal rate of return (EIRR).

2. The IEM was fielded to Tajikistan on 2227 April 2013. It met officials from various agenciesincluding the Ministry of Water Resources and Land Reclamation (MWRLR); the Ministry of Agriculture;the Agriculture Academy of Sciences; the Ministry of Finance; Madad; local water management officesof the MWRLR in Vakhsh and Bokhtar districts; the water users association and water sanitationcouncil in Bokhtar; the farm machinery unit in Bokhtar; the Farming Science Institute; and the WorldBank. The IEM conducted field visits in selected project areas particularly in the districts of Bokhtar andVakhsh. It also visited selected dehkan farms and the Vakhsh and Kyzylsu-Yakhsu irrigation systems.

3. FGDs were conducted with beneficiaries in districts representing the three irrigation systems toassess the benefits of the project to households and to gather data on crop budgets for re-estimationof the EIRR. An FGD tool was used to gather the information needed. Table A1 shows the FGDsconducted for the performance evaluation report.

Table A1: Focus Group Discussions

Irrigation System/District Number of FGDsNumber of

ParticipantsKhojabakirgan systemB. Gafurov District 2 12Kyzylsu-Yakhsu systemVose District 2 15Vakhsh systemBokhtar District 1 7Vakhsh District 1 6

Total 6 40FGD = focus group discussion.Source: Independent Evaluation Department.

4. The EIRR was re-estimated as part of the independent evaluation process. The details on themethodology and assumptions used for calculating the EIRR are presented in Appendix 8.


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APPENDIX 2: PROJECT COSTS AND CONTRACT AWARDS

Table A2.1: Project Costs

($000)

Category

Appraisal Estimate Actual

Foreign Local Total Foreign Local Total

1. Civil works 12,313 11,545 23,858 22,557 13,923 36,4792. Equipment and vehicles

a. Equipment, machinery, and goods 5,165 1,486 6,651 5,351 293 5,644b. Vehicles 296 52 348 320 7 327

3. Consulting services 1,695 805 2,500 2,370 214 2,5834. Traininga 0 0 0 0 0 05. Credit line to farm machinery units 0 0 0 2,901 7 2,9076. Project management 228 934 1,162 252 1,025 1,2777. Interest charges 1,377 0 1,377 755 0 7558. Unallocated 3,356 4,498 7,854 0 0 0

Total project cost

a

24,429 19,321 43,750 34,504 15,468 49,972

a The marked difference seen between actual total project costs and those estimated at appraisal is because of the exchangerate depreciation between the United States dollar and special drawing rights.Sources: Asian Development Bank (ADB) Loan Financial Information System; government project completion report; and ADB

project completion report.

Table A2.2: Contract Amounts by Type

Category Number of Contracts Amount ($)Civil works 78 35,900,055Equipment and machinery 19 5,425,671Vehicles 8 327,394Consulting services 4 2,553,014Training 0 0Credit line to farm machinery units 5 2,900,529Project management 41 1,187,463

Total 155 48,294,126

Source: ADB. 2010. Completion Report: Agriculture Rehabilitation Project in Tajikistan.Manila.


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APPENDIX 3: PROJECT FRAMEWORK AND ACHIEVEMENTS

Design Summary

Target Specified

at Appraisal

a Actual Achievement

b PPER Update

c

Goal

Reduce poverty in theproject area on asustainable basis

Poverty incidence inproject areas reducedfrom 88% to 43%

Poverty incidence in fourproject districts rangingfrom 37% to 41%, and is45% in the fifth

In 2008, average povertyincidence in five projectdistricts was 41%, lowerthan the national povertyincidence of 48%

Purpose

Improve the livingconditions of project areafarming communities

Institute measures tosustain the benefits

derived fromimprovementsimplemented under theproject

Farm incomes increasedon 85,000 hectares (ha),directly benefiting about471,000 people

Access to improvedpotable water provided

for 87,000 people living inrural areas

Incidence of waterbornediseases reduced inproject areas

Management of irrigationsystems transferred to 30water usersassociations(WUAs)

Capacity of Ministry ofWater Resources and LandReclamation (MWRLR)strengthened

Farm incomes increasedon 84,600 ha; number ofbeneficiaries as expectedat appraisald

Improved water supplyprovided to 180,546

people

Incidence of four keydiseases reduced bybetween 28% (hepatitis)and 83% (malaria)

20 WUAs established andresponsible for tertiaryirrigation systems onfarms

15 MWRLR agencies andthe monitoring functionof the Ministry of Healthin project areasstrengthened

Farm incomes increasedon 93,000 ha, benefitting516,100 people as of end-December 2012

Safe drinking watersupplied to 198,600people as of end-

December 2012

Reported cases of malariareduced by 96%, acuteintestinal disease by 78%,typhoid by 55%, andhepatitis by 15%

36 WUAs established as ofend-December 2012

National and local WUAsupport units withinMWRLR established

Outputs

1. Agricultural support

services for

dehkan

farms

Promotion of improvedtechnologies including soilsurvey and testing, seedmultiplication,demonstration farms, and

farm machinery services

Eight demonstration farmsof 10 ha established: threein Khojabakirgan, three inVakhsh, and two inKyzylsu-Yakhsu.

Training provided to 960farmers

All farms were providingdemonstration services atthe time of projectcompletion review.Three farm machineryunits (FMUs) established

Training stopped afterproject completion

Most of thedemonstration farms were

distributed to thepopulation and no longerprovide services to dehkanfarms

FMUs continue to provideservices, although facingdeclining profitability anddifficulty repaying loans toMinistry of Finance


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Project Framework and Achievements 25

Design Summary

Target Specified

at Appraisal


b PPER Update

c

and providing a range of30 agricultural operationson a commercial,profitable basis to about150 project area farms

However, they succeededin encouraging machineryuse by farmers and indeveloping a private rentalmarket for farm machinery

and equipment

2. Rehabilitation of

irrigation and drainage

(I&D) systems and

institutional support

2a. Inter-farm I&Drehabilitation(i) Khojabakirgan I&D improved on over

36,000 ha with 193,500beneficiaries

Cotton yield improved

from 1.5 tons/ha to 2.4tons/ha

Annual cotton outputincreased from 27,750tons to 54,000 tons

I&D improved on 36,000ha; beneficiaries as atappraisal

Cotton yield range in 2010

2.02.5 tons/ha

Cotton production 24,500tons in 2008

I&D improved on 38,000ha with 204,100beneficiaries in 2012

Average cotton yieldrange 3.03.5 tons/ha

with projecte

Annual average cottonproduction of 37,210 tonsin 20032011

(ii) Vakhsh I&D improved on over36,000 ha with 200,000beneficiaries

Cotton yield improvedfrom 1.6 tons/ha to 2.4

tons/ha

Annual cotton outputincreased from 31,840tons to 55,800 tons

35,600 ha (actualcommand area)rehabilitated; beneficiariesas at appraisal

Cotton yield in 2010 2.02.5 tons/ha

Cotton production 44,450tons in 2008


Average cotton yieldrange of 3.03.2 tons/hawith projecte

Annual average cottonproduction of 51,129 tonsin 20032011

(iii) Kyzylsu-Yakhsu I&D improved on over13,000 ha with 78,000beneficiaries

Cotton yield improvedfrom 1.3 tons/ha to 2.2tons/ha

Annual cotton output

increased from 7,319 tonsto 22,102 tons

I&D improved on 13,000ha; beneficiaries as atappraisal

Cotton yield in 2010 2.02.5 tons/ha

Cotton production 23,000

tons in 2008


Average cotton yield of3.0 tons/ha with projecte

Annual average cottonproduction of 19,323 in

20032011

2b. Support to waterresource managementagencies

Capacity building inMWRLR

MWRLR responsibilities atdistrict level reoriented

15 water resourcemanagement agenciessupported with vehicles,other equipment, andtraining

2c. Organization andtraining of WUAs

WUA support unitsestablished and training oftrainers conducted

WUA support unitsestablished in five projectarea districts; 20 (rather

36 WUAs established


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26 Appendix 3

Design Summary

Target Specified

at Appraisal


b PPER Update

c

WUA support unitsestablished in six districtsand 30 WUAs formed

than 30) WUAsestablished in 5 (ratherthan 6) districts to betterreflect physical andadministrative boundaries;

WUAs cover 427 dehkanfarms totaling 42,620 haand 304,700 farmhousehold beneficiaries;WUA boards and stafftrained in operationmanagement, finance, etc.

3. Improvement of

potable water supply

systems

3a. Improvement ofpotable waterphysicalinfrastructure

Potable water supplysystem serving 87,000beneficiaries improved

Education, training, and

social marketing of healthbenefits provided

Organizational structuresinstitutionalized indistricts and villages

Potable water provision to180,546 people managedthrough water andsanitation councils

Sanitary andepidemiological stationsof Ministry of Health infive districts supportedwith buildingrefurbishment and theprovision of office andlaboratory equipment

Water sanitation councilscontinue to manage andprovide safe drinkingwater to the population inproject areas

3b. Promotion andestablishment of waterand sanitation councils

Water and sanitationcouncils established

4. Project management,

monitoring, and

evaluation

Project managementoffice and project

implementation unit stafftrained

Project implemented asper schedule

Performance and financialreports submitted on time

Monitoring and evaluationsystems in place andworking effectively

Project managementoffice and implementation

units established beforeloan effectiveness in 2004;technical andadministrative staff inplace throughout projectperiod

Staff recruited usingcompetitive, transparentprocedures and trained inproject management andADB procedures

Progress reports and

annual audit reportssubmitted regularly and,except for the 2006annual audit, on time

Monitoring and evaluationunit established in 2005with two specialists;baseline and regularsocioeconomic and

Project managementoffice closed after project

completion

Maintenance andoperation of monitoringand evaluation systemstopped after projectcompletion


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Project Framework and Achievements 27

Design Summary

Target Specified

at Appraisal


b PPER Update

c

environmental profiles ofproject areas submitted

ADB = Asian Development Bank, PPER = project performance evaluation report.a Appendix 1 of ADB. 2002. Report and Recommendation of the President to the Board of Directors: Proposed Loan and

Technical Assistance Grant to Tajikistan for the Agriculture Rehabilitation Project. Manila.b

By the time of the project completion review mission.c By the time of the independent project performance evaluation mission.d Since the project areas were rehabilitated as expected at appraisal, the number of beneficiaries has remained unchanged, other

than by natural population increase.e Data derived from focus group discussions with farmers.Sources: ADB project completion report; government completion report; focus group discussions organized by the Independent

Evaluation Department.


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APPENDIX 4: REHABILITATION OF IRRIGATION AND DRAINAGE SYSTEMS

Table A4.1: Area Rehabilitated and Number of Beneficiaries

Irrigation System

Area Rehabilitated (ha) Number of Beneficiaries

Target

Project

Completion

As of End-

September

2009

End-

December

2012 Target

Project

Completion

As of End-

September

2009

As of End-

December

2012

Khojabakirgan 36,000 36,000 38,000 193,500 193,500 204,100Vakhsh 36,000 35,600 40,000 200,000 200,000 222,000Kyzylsu-Yakhsu 13,000 13,000 15,000 78,000 78,000 90,000Total 85,000 84,600 93,000 471,500 471,500 516,100

ha = hectare.Sources: Asian Development Bank project completion report; Ministry of Water Resources and Land Reclamation.

Figure A4.1: Production of Cotton and Wheat in Five Project Districts

(2003

2010)

Source: Statistical Agency, Republic of Tajikistan.

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

2003 2004 2005 2006 2007 2008 2009 2010

Year

T

a

P

o

o

o

Cotton Wheat


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Rehabilitation of Irrigation and Drainage Systems 29

Table A4.2: Cotton Production (tons)

Irrigation

System/District 2003 2004 2005 2006 2007 2008 2009 2010 2011

KhojabakirganB. Gafurov 27,794 29,076 26,670 21,022 19,502 14,780 13,574 16,063 18,264J. Rasulov 25,006 20,560 26,105 17,077 17,230 9,705 10,112 9,556 12,793

Subtotal 52,800 49,636 52,775 38,099 36,732 24,485 23,686 25,619 31,057

VakhshBokhtar 33,650 35,868 25,875 31,516 32,076 24,447 24,801 24,331 29,520

Vakhsh 36,031 25,906 22,280 18,533 19,763 20,000 16,002 16,551 23,008Subtotal 69,681 61,774 48,155 50,049 51,839 44,447 40,803 40,882 52,528

Kyzylsu-YakhsuVose 25,556 26,128 17,807 15,002 16,434 23,005 17,471 17,600 19,323

Total 270,518 248,948 219,667 191,298 193,576 160,869 146,449 150,602 186,493


Figure A4.2: Production of Selected Crops in Five Project Districts

(20032008)


0

25000

50000

75000

100000

125000

150000

175000

2003 2004 2005 2006 2007 2008

Year

TotalProduction

(inTons)

tajikistan: agriculture rehabilitation project

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