W AT E R G LO B A L P R A C T I C E Governance in Irrigation and Drainage Appendix 2 Case Descriptions UNDERS TA N D I N G D E F I NI NG MA NA GING MO VIN G TO SE RVI C E PERFORMANCE P ERSP EC TIV ES ACTIO N About the Water Global Practice Launched in 2014, the World Bank Group’s Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank’s global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter at @WorldBankWater. About GWSP This publication received the support of the Global Water Security & Sanitation Partnership (GWSP). GWSP is a multidonor trust fund administered by the World Bank’s Water Global Practice and supported by Australia’s Department of Foreign Affairs and Trade, Austria’s Federal Ministry of Finance, the Bill & Melinda Gates Foundation, Denmark’s Ministry of Foreign Affairs, the Netherlands’ Ministry of Foreign Affairs, the Swedish International Development Cooperation Agency, Switzerland’s State Secretariat for Economic Affairs, the Swiss Agency for Development and Cooperation, and the U.S. Agency for International Development. Please visit us at www.worldbank.org/gwsp or follow us on Twitter at @TheGwsp. Governance in Irrigation and Drainage Appendix 2 Case Descriptions © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Please cite the work as follows: World Bank. 2021. “Governance in Irrigation and Drainage Appendix 2: Case Descriptions.” World Bank, Washington, DC. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover design: Ryan Clennan, Owen Design Co. Cover photos (left to right): John Wambugu/USAID, Ben Barber/USAID, Jacob Burke, Alfredo Carrasco/World Bank. Contents Acknowledgments viii Case Descriptions 1 Summary of the Case Studies 3 Peru: A Complete Transfer of Irrigation Management to Water User Associations Case 1.  7 Scheme Overview 7 Problems in Public Agency Management 8 IMT of the Complete System in 1993 8 New Problems and How They Were Overcome 11 Suggestions for Further Improvement 11 Reference 11 Mexico: The Role of Aquifer Management Councils in the Sustainable Case 2.  Use of Groundwater 12 Groundwater Management 12 Groundwater Use in Guanajuato, Mexico 12 Aquifer Management Councils (COTAS) 13 Reduction of Consultative Organizations 13 Development of the COTAS 13 Limited Results in Reducing Groundwater Depletion 14 Future of COTAS 15 Reference 15 Tunisia: A National Irrigation Operator in the Form of an SOE Case 3.  16 Sector Overview 16 Lack of Reliability in Service Delivery 17 Institutional Failure 17 Institutional Reform Options 19 Institutional Model for Greater Accountability, Greater Reliability of Services 20 Summary of Key Functions from Six Perspectives 21 References 23  orocco: A Classic PPP in the El Guerdaine Irrigation Scheme Case 4. M 24 Scheme Overview 24 Key Problems and Challenges 24 Approach and Solutions 25 Governance in Irrigation and Drainage Appendix 2 iii Transformation Strategy in Detail 26 Summary of Key Functions from Six Perspectives 29 Summary of Key Learnings from El Guerdane 30 Notes 32 References 32  angladesh: Decentralization Leads to Operational Success Case 5. B 33 A Robust Policy Environment 33 A Novel Institutional Setup 34 Beneficiary Participation 35 Farmer Cooperatives: More than Water Management 36 References 38 Case 6. India: Championing Change with Leadership 39 Madhya Pradesh’s Irrigation Turnover 39 Sector Overview 40 Problems in Service Delivery 40 Organizational Resources and Governance Challenges 41 Strategies for Improvement 41 Change in Irrigation Service Delivery 42 Summary of Key Functions from Six Perspectives 43 References 44  akistan: Lessons from Comprehensive National-Level Irrigation Case 7. P and Drainage Reforms 46 Agriculture: A Lifeline 46 Neglected Drainage: A Curse to Sustainable Irrigation 47 From Irrigation Developer to Irrigation and Drainage Service Provider 47 Too Much Too Soon: Ambitious Reforms 48 Learning from a Painful Process 49 References 50 ndia: Policy Actions Avert a Groundwater Crisis Case 8. I 51 Setting the Scene 51 Supporting Demand Management 52 Actions Taken 53 Direct Benefits to Replace Subsidies 53 Solving a Complex Challenge 54 Is Demand Management a Realistic Approach? 54 References 55 iv Governance in Irrigation and Drainage Appendix 2  ali: Office du Niger Agency: Transfer of Land and Water Functions to Case 9. M Semi-Autonomous Agency 56 Incremental Reforms and Drivers of Change 57 Tripartite Zonal Performance Contracts and the Missing Link at Village-Tertiary Level 57 Stakeholder Roles and Responsibilities in I&D Management 58 Institutional Design in Context of Case Analysis Framework 59 References 59  ozambique: IMT and Contract Farming in the Chókwè Irrigation System Case 10. M 60 Overview 60 Low Utilization and Productivity 61 Irrigation Management Transfer and Contract Farming 62 Roles and Responsibilities in I&D Management from Five Perspectives 64 Reference 64  igeria: IMT and PIM in the Kano Irrigation Scheme Case 11. N 65 Scheme Overview 65 Key Problems and Challenges 66 Approach and Solutions 67 Transformation Strategy 68 Attitudinal Change through Consultation and Information Exchange 69 Building on Existing Institutional Arrangements 70 Changing the Dual Agro-Water Mandate to an Irrigation Water Services Mandate 71 Redefinition of Key Roles: Legal Reform and Institutional Bricolage 72 Engineering Redesign in Support of Organizational Functions 73 Summary of Key Functions from Six Perspectives 73 Summary of Key Learnings 77 Case 12. Spain: Modernization of an Ancient Flood System— New Governance Challenges 79 System Overview 79 The Jucar River Basin and Irrigation Modernization Plans 81 Execution of the Modernization Plan 82 Environmental Effects of Water Saving 82 Socialeconomic Effects of Modernization for Users 83 Suggestion for Improvement 83 References 83 Governance in Irrigation and Drainage Appendix 2 v  rance: Evolution of Regional (Water) Development Companies Case 13. F 84 Scheme Overview 84 Key Problems and Challenges 84 Approach and Solutions 85 Transformation Strategy 86 Summary of Key Functions from Six Perspectives 87 Summary of Key Learnings from SARs Case 88 Reference 89 Figures A2.1 Organizational Chart of WUAs and Regional and National Government Offices in Chancay-Lambayeque 10 A2.2 Cyclical Impact of Unreliable Irrigation Services in Tunisia 18 A2.3 Institutional Model in Tunisia, 2018 19 A2.4 New Institutional Model in Tunisia 21 A2.5 Theory of Change for Agriculture Intensification in Tunisia 22 A2.6 Share of Agriculture and Allied Activities Growth Rate in Indian States, in 2004–05 Prices 40 A2.7 Share of IPU against IPC in Irrigation System Utilization, Madhya Pradesh, 2009–16 43 A2.8 Postreform Accountability Relations in Context of Tripartite Performance Contracts, Mali 58 A2.9 Cropped Areas in Chókwè Irrigation System, 2004–10 Seasons 63 A2.10 Institutional Arrangement for WUA 70 A2.11 Organizational Mandates 71 A2.12 Revised Institutional Arrangements for WUAs and Irrigation Scheme Regulations 72 A2.13 Scheme Organizational Levels 73 A2.14 Functions of the Different Stakeholders 74 A2.15 Shareholders of the Société d’Aménagement Régional 85 A2.16 Sources of Revenue for Water Sales 87 Maps A2.1 Case Study Locations 1 A2.2 Chancay-Lambayeque Irrigation System 7 A2.3 Guanajuato, Mexico 12 A2.4 Irrigation and Drainage Schemes in Tunisia 16 A2.5 El Guerdaine 24 A2.6 Bangladesh 33 A2.7 Rivers and River Basins in Madhya Pradesh 39 A2.8 Pakistan 46 A2.9 Surface Water Map of Punjab State, India 51 A2.10 Office du Niger Agency, Mali 56 A2.11 Tiga Dam and Kano River Scheme, Nigeria 65 A2.12 Regional Development Companies with Public and Private Shareholders as Water Service Providers 84 vi Governance in Irrigation and Drainage Appendix 2 Photos A2.1 WUA Meetings 9 A2.2 Export Farming in Guanajuato 14 A2.3 Groundwater Well with Electric Pump 14 A2.4 Drip Irrigation in Siliana Region, Tunisia 17 A2.5 Images from the Asian Development Bank–Financed PSSWRSP 34 A2.6 Tube Well Irrigation in Punjab 52 A2.7 Farmer in Punjab 54 A2.8 Contour Bunds Constructed with Highly Sophisticated Laser-Level Machinery 62 A2.9 Harvesting the Field of an AP with a Combine Harvester 63 A2.10 Kano River Irrigation Scheme (KRIP) 67 A2.11 Beneficiaries of the Kano River Irrigation Scheme 68 A2.12 Acequia Real del Júcar 80 A2.13 SAR Managed Irrigation Schemes 85 Tables A2.1 List of Case Studies 2 A2.2 Institutional Options in Tunisia 20 A2.3 CAPEX of PPP Design in Renewal Fund, El Guerdane Project 29 A2.4 OPEX of PPP Design in Renewal Fund, El Guerdane Project 29 Governance in Irrigation and Drainage Appendix 2 vii Acknowledgments This work was led by Pieter Waalewijn (Global Lead for Water in Agriculture) and Remi Trier (Co-Global Lead for Water in Agriculture) of the World Bank. The authoring team comprised a group of independent consultants: Jonathan Denison (Lead Consultant), Yasmin Siddiqi, Jeroen Vos, and Eeman Amjad; and Pieter Waalewijn, Remi Trier, and Mik Schulte from the World Bank. viii Governance in Irrigation and Drainage Appendix 2 Case Descriptions Insight and Inspiration behind the Case Narratives Case studies from different regions of the world are described in appendix 2. These were selected for their diversity in type of governance arrangement, geographical location, and system characteristics. They cover a wide range of the governance spectrum that the resource book users are expected to encounter. While they number only 13, they provide a reasonably wide sketch of world diversity, though should not be viewed as a complete set of options. Each case includes a description of the project context, challenges, and innovations. The transformative actions and interventions are explained, and the roles and responsibilities of each of the relevant actors (and their perspectives) are discussed. The set of cases highlights both positive and negative outcomes. Together, these provide a practical overview of irrigation and drainage (I&D) institutional problems and some of the possible solutions that have been formulated. The cases cover small and large schemes, community-managed and private-sector operated, state- initiated, and farmer-led irrigation development. Cases involving irrigation management transfers (IMTs) and water user organizations (WUOs) are also described. The regional spread is illustrated in map A2.1, and the list of cases with key characteristics is presented in table A2.1. MAP A2.1 Case Study Locations France Spain Tunisia Morocco India Mexico Mali Pakistan Nigeria Bangladesh Peru Mozambique PROJECT COUNTRIES IBRD 45291 | JANUARY 2021 Governance in Irrigation and Drainage Appendix 2 1 TABLE A2.1 List of Case Studies   Region Country Case Title Highlight 1 LAC Peru Irrigation Management Transfer (IMT)—A IMT of the whole large-scale irrigation system, Complete Transfer Process to WUOs including dams, bulk and distribution systems to water user organizations (WUOs). 2 LAC Mexico Groundwater User Associations—Limited by the Collective management arrangements with a Scope of Allocated Functions consultative rather than functional mandate. 3 MENA Tunisia State-Owned Enterprise (SOE)—A National A financially autonomous, customer-oriented Irrigation Operator parastatal functioning as operator. 4 MENA Morocco A Classic PPP at Guerdaine Irrigation Scheme The evolution of one of the world’s first public-private partnerships (PPPs) on a large- scale irrigation scheme. 5 SA Bangladesh Decentralization Leads to Operational Success A comprehensive participatory process supported by a detailed water policy framework. 6 SA India Championing Change with Leadership Reform on large-scale gravity irrigation schemes is possible when there is strong and dynamic leadership. 7 SA Pakistan Lessons from Comprehensive National-Level An evolutionary process overcomes challenges Irrigation and Drainage Reforms on the long, slow road to comprehensive institutional reform. 8 SA India Policy Actions Avert a Groundwater Crisis A successful learning process that focussed on energy and policy rather than a water-centered initiative. 9 SSA Mali Office du Niger: Transfer of Land and Water Semi-privatized operations, management, and Functions to Semi-Autonomous Agency maintenance (OMM) can transform irrigation services and production. 10 SSA Mozambique IMT and Contract Farming at the Chókwè Irrigation and drainage (I&D) agency and water Irrigation System user association (WUA) comanaging water with an outgrower link to a rice mill. 11 SSA Nigeria Irrigation Management Transfer (IMT) and A transformative participative planning process Participatory Irrigation Management (PIM) on that led to a restructured water management the Kano Irrigation Scheme arrangement. 12 OECD Spain Modernization of an Ancient Flood System— Technical conversion from canal to drip New Governance Challenges irrigation brought new governance challenges and unintended outcomes. 13 OECD France Evolution of the French Regional (Water) Regional development companies with public Development Companies (SARS) and private shareholders as water service providers. Note: EAP = East Asia and Pacific; ECA = Eastern Europe and Central Asia; LAC = Latin America and Caribbean; MENA = Middle East and North Africa; OECD = Organisation for Economic Co-Operation and Development; SA = South Asia; SSA = Sub-Saharan Africa. 2 Governance in Irrigation and Drainage Appendix 2 Summary of the Case Studies Case 1 Peru: A complete transfer of irrigation management to water user organizations While an irrigation management transfer (IMT) is often executed half-heartedly, with only the manage- ment of tertiary blocks being handed over to water user organizations (WUOs), this was not so in the Peru case. In 1993 the Government of Peru decided to turn over the complete management of the large- scale irrigation systems in the North Coast desert to WUOs. This included the operation and mainte- nance (O&M) of the reservoirs and main canals and drains. It also included the budgeting and recovery of the fees. This IMT process was largely successful despite the many smallholders, deficient infrastruc- ture, on-demand scheduling, and low level of training of the operators. The success can be explained by the high level of accountability of the elected board members of the WUO, the long history of irrigation in the area, and the extreme dependency of the farmers on irrigation water. Case 2 Mexico: The role of aquifer management councils in the sustainable use of groundwater In Mexico, aquifer management councils (COTAS) have been established in the State of Guanajuato since 1998. Guanajuato faces severe overexploitation of groundwater. Originally, the idea behind the COTAS was that the users would regulate their water use among themselves (as all would benefit when the race to the bottom of the aquifer stopped). The government shared data on concessions and wells, and monitoring by the 20 aquifer monitoring committees discovered many illegal wells. However, in the 2004 National Regulation, the COTAS became consultative associations only, with the task of advising the government’s National Water Commission (CONAGUA). The COTAS cannot decide on groundwater extraction concessions, nor monitor the compliance to existing concessions. While there has been a clear step forward in participatory governance, the limitations in relation to concessions have left the COTAS ineffective in curbing the overexploitation of the aquifers. Case 3 Tunisia: A national irrigation operator in the form of an SOE Tunisia’s irrigated agriculture subsector is performing below its potential output, despite the invest- ment in modernizing the country’s irrigation infrastructure. The decentralized institutional model for service delivery has contributed to this problem by creating confusing and overlapping functional roles between the public agencies (CRDAs) and the local farmer groups (GRDAs). This led to a lack of control and accountability between the various service providers and the users or clients, resulting in poor cost recovery and unreliable service delivery. As a result, in 2018 the World Bank and the Government of Tunisia initiated the Irrigated Agriculture Intensification Project, which will create a single service pro- vider in the form of a state-owned enterprise (SOE) that will be autonomous, financially self-sustain- able, and client-oriented. The direct relationship between the service provider and the client will help Governance in Irrigation and Drainage Appendix 2 3 create greater accountability and, consequently, reliable service delivery. The institutional moderniza- tion in the project is complemented by activities related to targeted rehabilitation, ensuring O&M cost recovery through increased tariffs, and assisting the farmers in enhancing agricultural value.  Case 4 Morocco: A classic PPP in the El Guerdaine Irrigation Scheme The Guerdaine project, one of the first public-private partnership (PPP) transactions in large-scale irri- gation worldwide, was signed in 2005. It is an important case given the scale and success in turning around the overexploitation of groundwater resources. The process of project generation is particularly interesting and evolved through different options starting with classical public irrigation development and management, then the establishment and inclusion of water user associations (WUAs), and finally the effective solution under a PPP design. The PPP design addressed (a) the division of risks between the private investment and operating company, the public entity, and the farmers; and (b) the setting up of a maintenance fund, leading to successful water service provision to farmers using both groundwater on their farms and surface water supplied by the PPP operator. Case 5 Bangladesh: Decentralization leads to operational success The case study highlights how a decentralized organizational strategy for the Irrigation and Drainage (I&D) agency was effective in achieving service delivery. The strategy included comprehensive policy changes and participatory governance processes. Bangladesh has an exemplary sequence of successful small-scale water resources management projects. These are premised on close ties between benefi- ciary communities—registered as cooperatives—and a comprehensive participatory process that is part of a detailed water policy framework, and a decentralized local government engineering department. This case shows how a learning organization approach can achieve success through evolutionary improvements developed from the observation of lessons learned, and highlights the enabling factors that contributed to success. Case 6 India: Championing change with leadership India’s second-largest state, Madhya Pradesh, has demonstrated how incremental institutional reform in large-scale gravity irrigation schemes is possible when there is strong and dynamic leadership. To combat corruption and turn around agricultural performance, the chief minister of Madhya Pradesh recruited an upright and energetic officer as the principal secretary for Water Resources, and to run the Irrigation Department. A more results-oriented modern management approach was implemented. This included close communication, reforming canal management protocol, revising human resource prac- tices to motivate staff, and adopting modern technology for improving monitoring performance. The results were significant. Canal-irrigated areas expanded from less than 1 million hectares in 2010 to 2.39 million hectares by 2015. The combination of a champion focused on delivering results and strong sup- port from the political leadership were pivotal in the irrigation turnaround that made headlines all over India. 4 Governance in Irrigation and Drainage Appendix 2 Case 7 Pakistan: Lessons from comprehensive national-level irrigation and drainage reforms Ambitious goals can overstretch institutions and lead to less-than-satisfactory outcomes, but there can also be longer-term benefits. Pakistan was one of the first countries in Asia to take on a major irrigation reform process at the national level. Though the National Drainage Program did not achieve all of the intended objectives, the case study highlights how we can tailor solutions to complex challenges more effectively. It shows why locally generated ideas and close consultation are essential to tackle reform, and that small, steady steps are often the best way forward. Pitfalls and successes in the evolutionary reform processes are highlighted, lending optimism to practitioners embarking on the long road to com- prehensive institutional reform. Case 8 India: Policy actions avert a groundwater crisis Improving governance in groundwater use is often tackled with a conventional approach. In India, power subsidies drive over abstraction from aquifers, and have a major fiscal impact on the exchequer. The case shows how a rigorous solution of demand management can be employed by tackling the chal- lenge through the energy and financial sectors. The case study describes the policy actions taken and progress to date of an Asian Development Bank initiative. The study highlights energy and water links, and demonstrates that not all solutions to irrigation management need to be approached from the water sector. It also shows how policy changes can catalyze demand management actions. Case 9 Mali: Office du Niger Agency: Transfer of land and water functions to a semi-autonomous agency The Office du Niger irrigation scheme was constructed from 1978 and covers 100,000 hectares. Crop production and irrigation was originally managed by the state. From 1992 the land tenure was made more secure. Water management, O&M, land leases, and fee collections were managed by an opera- tional parastatal, and crop choice was liberalized. This caused an expansion of the irrigated area from 60,000 hectares to 80,000 hectares. The farmers of the 200 villages elect three delegates each. These delegates elect zonal representatives and a representative for the general board of the irrigation system. Price regulation was achieved through a tripartite review every two years, including the farmer organi- zation, the Office du Niger administration, and the government. The case shows how semi-privatized operations, management, and maintenance (OMM), compulsory fee payments for access to land and water as a joint fee, and an entrepreneurial private sector that responds to agricultural supply and mar- keting needs can transform irrigation services and production. Case 10 Mozambique: IMT and contract farming in the Chókwè Irrigation System Developed in the 1950s for settlers (after independence in 1977), the Chókwè Irrigation System was made a state-operated irrigation system. In 1997 the system was transferred to a parastatal organization, and water management at the secondary canal level and below was transferred to WUOs. The 26,000 Governance in Irrigation and Drainage Appendix 2 5 hectares of land equipped for irrigation are not fully used. Rice production increased when contract farming was introduced. Case 11 Nigera: IMT and PIM in the Kano Irrigation Scheme The Kano case highlights a participative and transformative planning process that led to a jointly formu- lated and completely restructured water management arrangement and a major shift in functional roles of all key players. While the construction aspect of the modernization was still being implemented at the time of writing this report (2018), the attitudinal change, participative redesign, and legal transfor- mations reported here were established, and contributed to the reform of the irrigation sector at national level. Case 12 Spain: Modernization of an ancient flood system—new governance challenges The Acequia Real de Jucar is an example of a centuries-old irrigation system managed by a WUO. Its construction began in the 13th century. The system has some 20,000 hectares of irrigated land and about 29,400 farmers. Pressure over water in the Jucar watershed has made the government reduce the yearly water allocation to the system. In return, the government has granted subsidies for installing a piped distribution system so the farmers can install drip irrigation. Preliminary studies show that the water saved by reducing the concession of the irrigation system equals the reduction of the drainage water that now flows into the Albufera Lake and wetlands, confirming Perry’s basin view of efficiency. Thus, no net water savings are made from a basin perspective, but due to difficulties with the technol- ogy shift, farmers have lost control over their irrigation practices. Case 13 France: Evolution of regional (water) development companies The current institutional setups of France’s regional development companies (SARs), operators with private and public shareholders, are quite unique worldwide, and are the fruit of a long historical pro- cess that may resonate to many large-scale irrigation (LSI) public service providers. Created as classic public companies for development and management of LSI schemes in the 1950s, the SARs faced several crises that obliged them to reinvent the model toward a more customer-oriented and privately managed service provision, without losing the perspectives of long-term public asset management. 6 Governance in Irrigation and Drainage Appendix 2 Peru: A Complete Transfer of Irrigation Case 1.  Management to Water User Associations MAP A2.2 Chancay-Lambayeque Irrigation System Water Management Arrangement •• Irrigation Management Transfer (IMT) of complete system •• Water user associations (WUAs) at three levels •• Apex IMT has company for operation and maintenance of the main system •• Ministry of Agriculture determines water use rights •• On-demand scheduling Farmer Profiles •• Average plot size: 5 hectares (ha) •• Size range: 0.1 ha to 300 ha •• No. of farmers: 28,600 •• 5% registered female farmers •• Business and cash income orientation Scheme Overview The Chancay-Lambayeque irrigation system is ancient: its main canal was first constructed about 1,000 years ago. The scheme is situated in the extremely arid coastal zone on the North Coast of Peru, with no effective rainfall in normal years. Only during El Niño years does rainfall occur. The water comes from rivers of unpredictable regime that run from the Andean Mountains (see map A2.2). The irrigated area is about 119,000 hectares. In 2018 approximately 28,600 users had water rights; this ownership pattern has evolved since the land reforms of 1969. At the time of research, three sugarcane enterprises had large estates in the head of the system. The rest of the users were smallholders with an average of 5 hectares each. Governance in Irrigation and Drainage Appendix 2 7 Groundwater not used. No groundwater is used in the Water Infrastructure system due to the salinity of the groundwater, and because the small net returns to staple crops such as •• Irrigation system more than 1,000 years old rice do not support pumping costs. Deep percolation •• 119,000 ha from canals and fields contribute to waterlogging. •• Tinajones Reservoir Area- and crop-based allocations. Water is allocated accord- •• 13 secondary canal WUAs ing to water rights tied to landholding. The maximum amount of water allocated is based on the type of crop authorized by the Ministry of Agriculture (farmers can request a change in crop each year, but normally only to a Value Chains less water-consuming crop). •• Rice On-demand system. Water distribution is on-demand and •• Sugarcane scheduled according to advance payment of water turns. •• Maize and beans The Tinajones Reservoir, built in 1968, has a capacity •• Export fruit and vegetables of  about 300 million cubic meters, which is about To urban and distant markets one-third  of the yearly water use. In case of water scarcity, quotas apply and are proportional for larger ­ water users. Open canals with manual gates. Water is conveyed in open, mainly unlined canals and regulated with manually operated vertical sliding gates. Discharges are measured only at the entrance of the secondary canals. Drainage. In the 1970s, a drainage system was constructed to prevent waterlogging and salinization. Return flows outside the system are rarely used due to the proximity of the irrigation system to the ocean (into which the main drains discharge directly). Problems in Public Agency Management From 1969 to 1993, the Ministry of Agriculture managed the system with many deficiencies in operation and maintenance (O&M) and very low fee (and cost) recovery. During the 1980s, the collective farms (ex-haciendas) were sold to the cooperative holders. IMT of the Complete System in 1993 In 1993 the government implemented a sweeping irrigation management transfer (IMT) program. The water user associations (WUAs) at the secondary canal level became the concession holders and manag- ers of the system. Every two years all registered water users elect the board of the secondary canal WUAs. 8 Governance in Irrigation and Drainage Appendix 2 Role of the WUAs PHOTO A2.1 WUA Meetings The boards of these WUAs plan and execute the O&M, hire technical and administrative personnel, and recover fees (photo A2.1). They discuss the annual budget (and  corresponding fees) and the budget spending with the water users. They collect the on-demand fees (paid one day in advance of a water turn). At the tertiary block level, WUAs are organized more informally: they have an elected board, and might hire an operator (repar- tidor) of the gates inside the tertiary canal system. The chairpersons of the 13 WUAs at the secondary canal level elect the board of the main system, the Apex WUA (Junta de Usuarios). The 13 WUA chairmen are also the board members of the company COPEMA, which manages the main system (reservoir and main canal). COPEMA oversees the daily operation of the reservoir, main intake work, and main canal, and distributes the irrigation water to the secondary canals. It also operates and maintains the heavy machinery used for canal and drain maintenance. From 1993 to 2007, the Apex WUA was successful in pro- viding good O&M service, raising the irrigation service fee (ISF) from US$3.50 to US$10.00 per 1,000 cubic meters. The fee recovery was sufficient to cover O&M cost. Figure A2.1 ­outlines the organizational chart of the WUAs, as well as the regional and national government agencies. Line agency The only functions remaining for the former irrigation line agency, the local water authority (ALA), are grant- ing water use rights to individual farmers, deciding which crops are allowed to grow, establishing the yearly allocation of water (together with the WUAs in the Water Allocation Committee), and resolving conflicts that can- not be resolved by the WUAs. Regional government The government agency Proyecto Especial Olmos Tinajones (PEOT) acts as regulator and monitors the functioning of the WUA. It can modify or end the transfer © J. Vos. Used with the permission of J. Vos. Further concession. permission required for reuse Governance in Irrigation and Drainage Appendix 2 9 Performance of the water delivery is high. Most water is delivered at plot level according to the complicated on-de- Key to the success of the WUAs mand schedule. This high level of performance is possible are the long discussions of elected boards with their constituencies on for three main reasons: high levels of accountability of irrigation management and budgeting WUAs toward the water users and social control among the issues during the general assembly water users (who make sure they get the volume of water meetings. they paid for); high skills of the operators; and the complete dependency of agriculture on irrigation. Paddy yields are high, from 5 to 10 tonnes per hectare. The well-functioning Chancay-Lambayeque irrigation system is also highly related to its long history; many rules (such as the two different types of water rights: permanent and surplus water only) have been in place since Incan rule. In addition, the social relationships (patronage) between the chairmen of the WUA boards and the water users have a long history. Water users are very knowledgeable about their irrigation system and its management. An unusual driver of delivery performance. Interestingly, the operators manage to sell and deliver extra “illegal” water turns as well. They do so by distributing water put into the system as compensation for FIGURE A2.1 Organizational Chart of WUAs and Regional and National Government Offices in Chancay-Lambayeque National level Autoridad nacional de agua (ANA) government (ministry of agriculture) Autoridad administrative de agua (AAA) river basin authority Local-level PEOT government (regulator) Authority local de agua (ALA) Water agencies (local irrigation office of the ministry allocation of agriculture) committee Personal of the apex Canal WUA Main Apex WUA Board of • Irrigation engineer system COPEMA board of COPEMA • Legal advisor staff apex Canal • Administrative staff WUA General assembly of Personal of the Canal WUA Secondary water users at level Board of secondary • Irrigation engineer canal of the secondary Canal WUA • Operators canal WUA. • Administrative staff General assembly Tertiary of water users at Board of tertiary block level of tertiary block Canal WUA Moght hire: Repartidor block Source: Vos 2002. Note: WUA = water users’ association. 10 Governance in Irrigation and Drainage Appendix 2 water losses from the canals to the farmers. These losses are estimated to be 25 percent of the water to be delivered, but in reality, might be less due to waterlogging. The sale of illegal water turns raises good money for the operators, who share this money with their superiors. The farmers know this and are very keen to monitor their paid-for water turns, which they do by estimating the volume received by the rise in water level in their paddy fields. In this way, the illegal water turns actually make the operator work very precisely, delivering just enough water to the farmers to “save” water for an extra illegal water turn, and thus the overall distribution performance is better. Overall, this does not save water, and the real effect is a diversion of part of the irrigation service fee from the official to the illegal circuit (making the officially unpaid position of chairman of a WUA more attractive); however, the level of water delivery precision becomes incredibly high. New Problems and How They Were Overcome In 2007, a chairman of the Apex WUA came to power who embezzled money and “bought” the support (for re-election and mismanagement) of the majority of his 12 fellow WUA chairmen. The government regulator finally intervened after many years of protests by water users, by cancelling the license of the Apex WUA to manage the main system and collect the irrigation service fees. The corrupt chairman was finally succeeded by a newly elected chairman in 2017. Suggestions for Further Improvement The problem of the corrupt chairman of the Apex WUA showed a weakness in the representation and accountability structure of the three-tier WUA. The water users could not prevent the reelection of the corrupt chairman, because this position is not elected by direct vote of all water users, but by vote of the 13 chairmen of the secondary canal WUAs. By bribing seven of them, he maintained power. The election of the board of the Apex WUA in general elections by all water users could prevent the reelection of a malfunctioning chairperson of the Apex WUA. Reference Vos, J. M. C. 2002. Metric Matters: The Performance and Organization of Volumetric Water Control in Large-Scale Irrigation in the North Coast of Peru. Wageningen, The Netherlands: Wageningen University. Governance in Irrigation and Drainage Appendix 2 11 Mexico: The Role of Aquifer Management Case 2.  Councils in the Sustainable Use of Groundwater MAP A2.3 Guanajuato, Mexico IBRD 45293 | JANUARY 2021 Mexicali UNITED STATES OF AMERICA COTAS (Groundwater user BAJA CALIFORNIA associations in Guanajuato) SONORA Hermosillo •• Groundwater use: 4,100 hm3 Chihuahua CHIHUAHUA COAHUILA BAJA CALIFORNIA NUEVO •• No. of COTAS: 14 SUR LEON Saltíllo Monterrey DURANGO Culiacán Gulf of Mexico La Paz Durango TAMAULIPAS SIN •• Farmer members of COTAS: ZACATECAS Ciudad ALO Victória A Zacatecas SAN LUIS POTOSI AGUASCALIENTES QUERÉTARO 8,610 NAYARIT Aguascalientes San Luis Potosí YUCATAN Tepic PAC IF I C GUANAJUATO Guanajuato HIDALGO Merida O C EA N Guadalajara Querétaro DISTRITO FEDERAL JALISCO Pachuca TLAXCALA Campeche QUINTANA MEXICO Morelia CITY Jalapa ROO Toluca Tlaxcala Chetumal Colima Puebla VERACRUZ COLIMA MICHOACAN Cuernavaca CAMPECHE PUEBLA TABASCO Villahermosa GUERRERO Chilpancingo CHIAPAS BELIZE PROJECT STATE Oaxaca STATE CAPITALS MEXICO OAXACA Tuxtla Gutierrez NATIONAL CAPITAL MORELOS STATEE BOUNDARIES GUATEMALA HONDURAS INTERNATIONAL BOUNDARIES EL Farmer profiles in SALVADOR Guanajuato Groundwater Management •• 62% of land belongs to big It is well established that very few examples of sustainable private landowners groundwater management regimes exist in areas of intensive •• 32% of the land belongs groundwater use. Hence, the collective management of ground- to ejiditarios (communal water by water users—self-regulation or local-level gover- smallholders) nance—is increasingly advocated as an alternative, or •• Average plot size in ejidos: complementary, to state regulation. Since the early 2000s, the 5 ha World Bank has recommended frameworks to promote the •• No. of farmers using development of aquifer management organizations as an groundwater: 18,000 ­integral component of Integrated Water Resources Management •• Business and cash income (IWRM). orientation Groundwater Use in Guanajuato, Mexico Reaching sustainable groundwater extraction levels is the most critical issue in Guanajuato’s water management (map A2.3). All its 18 aquifers are overexploited, with annual extractions around 1,200  million cubic meters more than recharge. Total groundwater extractions fluctuate around 4,100 million cubic meters while recharge is around 2,900 million cubic meters for the whole state. The level of overexploitation is thus around 40 percent of recharge. The result is an annual mean aquifer drawdown of more than 2 meters, with important regional differences. 12 Governance in Irrigation and Drainage Appendix 2 This aquifer drawdown is leading to problems of high arsenic and Value Chains fluoride concentrations in groundwater, increased pumping costs, drying up of wells, land subsidence, and the desiccation of •• Export fruit and vegetables springs. •• Maize and beans To urban and distant markets Aquifer Management Councils (COTAS) One of the responses to this problem was the formation of aquifer management councils (COTAS) in the state from 1998. The cre- ation of COTAS was institutionally led by the Guanajuato State Water Infrastructure Water Commission (CEAG). COTAS were created as councils of water user representatives. These councils were envisioned to •• Deep tube wells consist of all water users, who would unite to work on implement- •• Drip irrigation ing IWRM actions in their aquifers. These councils were supported by a consultative group consisting of government agencies. Through a trust fund established by the state government, COTAS were financially supported to have a technical office run by a manager, a technician, and a secretary. The membership of the COTAS, which would represent the highest decision-making body through its general assembly and elected board members, was to consist of all the water users of an aquifer. These were defined as those with a concession title to extract groundwater for agricultural, industrial, or commercial use, while urban water users would be represented through the municipal water supply utilities. The CEAG intended that the COTAS would be legally recognized local water management organizations that would focus on regulations and water by reaching agreements on aquifer management through actions to regulate, conserve, and efficiently use water. Reduction of Consultative Organizations In the national regulations of 2004, COTAS were recognized by the National Water Commission (CONAGUA) as consultative organizations that would support and advice CONAGUA in formulating the rules and regulations of an aquifer. COTAS do not take part in the granting of groundwater conces- sions and the implementation and control of legal regulations. As a result, COTAS have the legal status of civil society organizations that work based on the collaboration and goodwill of the water users. Development of the COTAS The development of the 14 COTAS in Guanajuato from 2000 to 2006 strongly hinged on the financial and technical support of CEAG. CEAG’s efforts to strengthen the COTAS during this period focused on increasing user participation and formulating a groundwater management model that would lead to concrete actions. These aimed to reduce groundwater extractions by reaching agreements with all agricultural water users, who were supported to make changes to their irrigation technolo- gies and production practices. As a result, the number of users who became members of the COTAS rose from 225 in 2000 to 8,610 in 2006 (of an estimated 18,000 groundwater users), and 20 aquifer monitoring committees were formed (CEAG 2006). An important achievement of the COTAS is that Governance in Irrigation and Drainage Appendix 2 13 each has updated and verified the database on PHOTO A2.2 Export Farming in Guanajuato groundwater wells, in the process identifying many ­ irregular wells. Training of farmers and help desk The COTAS were very actively involved in training around 5,300 users in water issues, together with gov- ernment agencies, and extensive information cam- paigns on the “new water culture” were held. The aquifer monitoring committees have led to enhanced awareness. For many farmers, the COTAS have become important help desks or service windows that support them in their interactions with government agencies. PHOTO A2.3 Groundwater Well with Electric Pump Especially concerning groundwater concession titles, the COTAS play an important role as intermediaries between farmers and CONAGUA and other state and federal agencies for obtaining and renewing the titles (most titles are valid for 10 years). The COTAS have also become intermediaries for users, who through them can get support to access government programs aimed at more efficient water use, a practice many farmers would like to see expanded. Administrative tasks of COTAS The COTAS have gained the recognition of CONAGUA, ©Jaime Hoogesteger. Used with the permission of Jaime Hoogesteger. Further permission required for reuse. which has delegated several programs to them while also giving them a role in supporting the users in the required administrative procedures for renewal of water use permits in each aquifer. Limited Results in Reducing Groundwater Depletion COTAS have not become fully fledged user organizations in which strategies for reducing groundwater overexploitation have been devised. The result is that they have not achieved significant reductions in groundwater extractions, nor have they led to user self-regulation in the aquifers of Guanajuato. Three main reasons can be mentioned for the limited results in curbing groundwater depletion: •• The large number of users per aquifer (between 800 and up to almost 1,200 for most aquifers). •• Pressure to sustain and increase economic development, and the increasing demand by international markets for fresh vegetables exclusively produced with groundwater on Guanajuato’s fertile soils. •• Very limited control by the sole national authority in groundwater administration, the CONAGUA. 14 Governance in Irrigation and Drainage Appendix 2 Future of COTAS Today COTAS form a platform for groundwater users to find solutions for the vexing problem of ground- water depletion. To move forward, groundwater users would need to devise aquifer agreements with substantially lower levels of groundwater extractions, either through an adjudication of pumping rights on the basis of mutual prescription, or through a negotiated downward adjustment of groundwater con- cessions with the federal government. To do so requires continued financial support for these organiza- tions and far-reaching changes in the institutional arrangements for water management that prevail in Mexico. Reference CEAG (Comisión Estatal del Agua de Guanajuato). 2006. Memoria Institucional 2000–2006 de la Comisión Estatal del Agua de Guanajuato (CEAG). Guanajuato City, Mexico: CEAG. Governance in Irrigation and Drainage Appendix 2 15 Tunisia: A National Irrigation Operator in the Case 3.  Form of an SOE MAP A2.4 Irrigation and Drainage Schemes in Tunisia Water Management Arrangement •• Regional Agricultural Development Directorates of the Ministry of Agriculture (CRDAs) operate the main system •• Agricultural development groups (GDAs) responsible for water distribution Farmer Profiles •• 516,000 farms, av. 10 ha (in Sector Overview 2005) Tunisia has invested substantially in modernizing its irrigation sys- •• Only 3% of farms > 50 ha tem (map A2.4). Two-thirds of the country’s irrigated area is equipped with sprinkler or drip technology for on-farm irrigation, yet irrigated agriculture performs below its potential output. The Value Chains return on irrigation investments is low, and public schemes rely on recurrent subsidies for the O&M of public schemes. Some areas that •• Olive oil (main export) are equipped for irrigation have not been exploited, and cropping •• Cereals intensity is also below its potential (90 percent versus 130 percent). •• Tomatoes Photos A2.4 depict examples of drip irrigation in Tunisia to grow •• Dates and grapes crops such as watermelons. •• Citrus fruits In 2018 the World Bank initiated the Tunisia Irrigated Agriculture Intensification Project in response to the Tunisian government’s recognition of the need to shift from a supply side response (increasing water mobilization) to a demand management approach (more efficient and productive water use). As part of the project preparation, the World Bank and the Government of Tunisia diagnosed the problems plaguing the irrigation subsector and developed a framework to improve demand management. The project includes a combination of physical infrastructure upgrades, creating accountable institutions, and providing support to the farmers in increasing agricultural value addition. 16 Governance in Irrigation and Drainage Appendix 2 Lack of Reliability in Service Delivery Water Infrastructure The dilapidated state of irrigation infrastructure has impacted •• 33 large dams the reliability of service delivery. Frequent irrigation system fail- •• 253 small dams ures can cause up to weeks of delay in service. This unreliability •• 837 reservoirs of service has prevented agricultural intensification on irrigation •• 55,512 boreholes schemes. Farmers are hesitant to take the additional risk of investing in more profitable crop production because of the high •• 130,000 wells probability of technical failure on the irrigation schemes. This is •• 410,000 ha equipped for irrigation especially true for the northwestern region, where outdated sys- tems are susceptible to repeated breakdowns, causing multiple service interruptions in the irrigation season. Figure A2.2 depicts the cyclical impact of unreliable irrigation services on farmers, who are then unable to invest in high- value crops, leading to low cost recovery and lack of O&M of schemes, which can lead to unreliable irrigation services. Institutional Failure While the diagnostic by the World Bank and government notes multiple factors limiting the potential of irrigated agriculture, an important constraint is the current institutional model, in which there is a lack of accountability from the service provider to the users (in delivering the service), and from the user to the service provider (in paying for the service). The institutional model in all public irrigation schemes is a decentralized system, in which the Groupements de Développement Agricole (GDAs, or Agricultural Development Groups) are delegated the responsibility of water distribution, and the Centres Régionaux de Développement Agricole (CRDAs, or Regional Agricultural Development Directorates of the Ministry of Agriculture) operate the PHOTO A2.4 Drip Irrigation in Siliana Region, Tunisia ©Jean-Yves Jamin (Water Alternatives). Used with the permission of Jean-Yves Jamin. Further permission required for reuse. Governance in Irrigation and Drainage Appendix 2 17 FIGURE A2.2 Cyclical Impact of Unreliable Irrigation Services in Tunisia Before project situation formers stuck in a vicious circle Unreliable irrigation services Most farmers unwilling to Entitles in charge of irrigation switch to high-value crops schemes (GDAs and CRDAs) (risk of losing the whole unable to pay for harvest in case of maintenance costs technical failure) Farmer’s incomes are too Farmers produce only low to allow them to pay low-value crops: they for improved are stuck in a low-risk, irrigation services low-return trap Note: CRDAs = Centre Régionaux de Développement (Regional Agricultural Development Directorates of the Ministry of Agriculture); GDAs = Agricole Groupements de Développement Agricole (Agricultural Development Groups). main  system. Figure A2.3 depicts the confusing and overlapping functional roles in the current institutional model that create a lack of control and accountability within the various organizational ­ tiers. The project appraisal document (World Bank 2018) outlines five reasons for its failure: •• A uniform model is applied across all public schemes, ignoring specific characteristics such as the size and social cohesiveness of each scheme. •• The model does not differentiate between regulatory and operational functions. •• Neither the CRDA or GDA is “fit for purpose.” The CRDA is an administrative body that does not have the flexibility needed to provide commercial services, while GDAs lack the mandate and proper training to ensure reliable service delivery. •• The interface between the CRDAs and the GDAs is vague (there are few delivery points equipped with flow meters), creating a lack of accountability to the final user. •• The arrangement for tariff structure and cost sharing between the CRDAs and GDAs does not corre- spond with the system’s O&M costs. Consequently, GDAs often face significant managerial 18 Governance in Irrigation and Drainage Appendix 2 FIGURE A2.3 Institutional Model in Tunisia, 2018 Resource Lack of Broken line of responsibility control CRDA Lack of control GDA Lack of accountability User Confusing and overlapping roles Note: CRDA = Centres Régionaux de Développement (Regional Agricultural Development Directorates of the Ministry of Agriculture); GDAs = Agricole Groupements de Développement Agricole (Agricultural Development Groups). challenges. Out of the 1,253 GDAs in Tunisia, only 20 percent are functional with a cost recovery rate above 60 percent, but also with significant debt to either the CRDAs or the electricity supplier. Institutional Reform Options An independent study funded by Public-Private Infrastructure Advisory Facility was conducted during project preparation to find institutional options for the creation of autonomous, financially viable, and client-oriented irrigation management entities (World Bank 2018). Table A2.2 shows the five options identified and their main advantages and disadvantages. To ensure political feasibility of these options, consultation activities with important stakeholders were conducted during project preparation. Eventually, the Tunisian government’s preference for option II, establishment of a public company with participation from the private sector, was adopted. This institutional model will apply to seven large irrigation schemes located in the North-West. The project will first set up the state-owned enterprise (SOE), and will open its capital to private inves- tors after a few years, once the technical and financial records are available and there is a reasonable level of cost recovery. For one of the smaller irrigation schemes under the project with adequate social cohesiveness, the proposed option is a farmer-based association. Governance in Irrigation and Drainage Appendix 2 19 TABLE A2.2 Institutional Options in Tunisia Option Advantages Disadvantages Etablissement Public (EPA) Simple to set up (with Special law) Same as CRDA: too bureaucratic, little financial and operational autonomy Public company (SOE) Corporatized utility, relatively flexible in its Some degree of political influence remaining management Relatively simple to set up (with Special Law) Low stakeholders risk (political economy) Possible evolution to models with private capital Public company with Same as above, except stakeholders’ risk higher Unlikely to attract private capital at this stage minority private capital PPP (majority private capital) Simple to set up, no law required Complexity of defining terms of contract Highly unlikely to attract private capital at this stage User organizations Ownership by the users Can be cheaper Lack of capacity Transparent (in principle) Weaknesses of legal framework (even with new Code des Eaux) Accountability more challenging in practice Note: CRDA = Centre Régionaux de Développement Agricole (Regional Agricultural Development Directorates of the Ministry of Agriculture); PPP = public-private partnership; SOE = state-owned enterprise. Institutional Model for Greater Accountability, Greater Reliability of Services The Ministry of Agriculture, Hydraulic Resources and Fisheries (MAHRP) will establish the SOE and transfer to it the responsibility of all the irrigation and drainage (I&D) schemes rehabilitated under the project in the North-West. An agreement will be signed between the MAHRP and the SOE, giving the public company authority over the I&D assets, the right to collect irrigation service fees, and responsi- bility for delivering services. The government will transfer O&M subsidy payments during the transition period until the SOE achieves full cost recovery from water tariffs. The new provider will also receive assets from the CRDA, including offices, workshops, and necessary equipment. Some technical and administrative staff from the CRDA and the GDA staff will be transferred to the SOE. Figure A2.4 illustrates the direct relationship between the service provider and the client in the new institutional model that will ensure accountability. The commercially oriented relationship to the client farmer, with an adequate performance monitoring system and financial autonomy through improved cost recovery, complemented by performance-based subsidies, will help break the vicious cycle of low- cost recovery and unreliable irrigation services. The short-term aim for the new SOE will be to recover the annual O&M cost, and in the medium to long term, recover the depreciation (the investment cost). Figure A2.5 depicts the project’s three-pronged approach to agricultural intensification in Tunisia. This institutional modernization will be complemented by targeted rehabilitation, ensuring O&M cost recovery through increased tariffs, and assisting farmers in enhancing the agricultural value addition. 20 Governance in Irrigation and Drainage Appendix 2 FIGURE A2.4 New Institutional Model in Tunisia Resource Performance agreement with MARHP Single responsibility SOE Control (or GHIP) by CRDA Strong contract Feedback by GDA Client One entity charge, accountable to client thru service contract, with performance incentives, feedback, and control Note: CRDAs = Commissariats Régionaux de Développement Agricole (Regional Agricultural Development Directorates of the Ministry of Agriculture); GDAs = Groupements de Développement Agricole (Agricultural Development Groups); GHIPs = Groupements Hydrauliques d’Intérêt Public; SOE = state-owned enterprise. Summary of Key Functions from Six Perspectives Perspective 1: Farmer involvement Approximately 8 percent of the farmers own more than half of the cultivable land, while about 62 percent are smallholders with less than 10 hectares each. About 25 percent of the rural population is landless (Qamar 2013). Under the World Bank project, farmers will be provided with advisory services to improve productivity gains and strengthen linkages for local value addition. Since citizen engagement is an import- ant part of the institutional reform process, the new provider will be more accountable to farmers. Perspective 2: WUA (GDA) GDAs previously were delegated the responsibility of water distribution. In the new institutional struc- ture, existing GDAs will be the counterparts representing the interests of the users to the operator, through an appropriate citizen engagement mechanism. In schemes in which the GDA will remain in charge of the O&M, they will evolve into Groupements Hydrauliques d’Intérêt Public (GHIP) with strengthened capacity. Perspective 3: Agency (CRDA) The CRDAs are the regional service providers that are part of the MAHRP and oversee the operations of the main irrigation systems. Under the new institutional model, the CRDA will transfer its responsibili- ties as a service provider to the newly established entity, SOE. The CRDA will have a project owner role, monitoring the performance of the schemes’ operations against agreed indicators. Governance in Irrigation and Drainage Appendix 2 21 FIGURE A2.5 Theory of Change for Agriculture Intensification in Tunisia Efficient irrigation Project interventions help services reach a higher-level equilibrium Rehebilitation and improvement works New entities manage irrigation schemes Farmers ready to efficiently and ensure engage in high-value proper maintenance crop production of the networks Project interventions Support to Institutional agricultural modernization development and market access Higher and more Framers seize new predictable revenues marketing opportunities allow farmers to pay that translate into for hight-quality higher revenues and irrigation services new value chains Perspective 4: Line ministries (MAHRP) The MAHRP had been the main public service provider. All the regional service providers (CRDAs) are part of the MAHRP. Under the new institutional structure, the MAHRP will sign a performance-based contract with the new operator. Perspective 5: Private sector While the Tunisian government has tried to encourage private sector investment in irrigation, there are currently no private companies that provide I&D services. Under the new institutional model, the new operator will open its capital to private investors after a few years (Qamar 2018). Perspective 6: Non-irrigation user Renewable water resources are about 420 cubic meters per year per inhabitant, which is below the level of absolute water scarcity, and agricultural consumption takes about 80 percent of the water resource. 22 Governance in Irrigation and Drainage Appendix 2 However, rapid urbanization is putting immense pressure on water resources. Between 2012 and 2013, water consumption increased by 12 percent due to the rise in urban population (World Bank 2014). Climate change also has a strong impact on water users in the country, as evidenced by the severe drought in 2016 and 2017. References Qamar, M. K. 2013. “Tunisia.” GFRAS (Global Forum for Rural Advisory Services). https://www.g-fras.org/en/world-wide-extension-study​ /­africa/northern-africa/tunesia.html. World Bank. 2014. “Water: Tunisia’s Other Development Challenge.” World Bank News, September 4, 2014. http://www.worldbank.org/en​ /­news/feature/2014/09/04/water-tunisia-s-other-development-challenge. World Bank. 2018. “Project Appraisal Document, Tunisia Irrigated Agriculture Intensification Project.” Report PAD2430, World Bank, Washington, DC. Governance in Irrigation and Drainage Appendix 2 23 Morocco: A Classic PPP in the El Guerdaine Case 4.  Irrigation Scheme MAP A2.5 El Guerdaine Water Management Arrangement •• Public-private partnership (PPP) contract (build-operate-transfer) •• Private sector in charge of construction of hydraulic infrastructure and operation for 30 years Farmer Profiles •• Size range: 5 ha to 20 ha Scheme Overview •• No. of farmers: 600 The Souss-Massa-Draa Region (see map A2.5), located in the •• Business and cash-income orientation Province of Taroudant, produces nearly 60 percent of the region’s citrus exports (Houdret 2008). The El Guerdane irriga- tion scheme of the Souss Region, because of its semi-arid cli- mate, has traditionally been impacted by water scarcity. Due to Value Chains the region’s limited rainfall, before the project farmers have •• Citrus (orange trees) ­ roundwater always relied on individual wells exploiting the g from the Souss Aquifer for the irrigation of their crops. Key Problems and Challenges Water Infrastructure Due to the high quantities of water withdrawals, the Souss •• Before the project: farmers used Aquifer began to experience gradual overexploitation. Water individual wells that was accessible at 25 meters in the 1960s was extracted at •• After the project: 10,000 ha depths reaching 200 meters in the early 2000s (Houdret 2008). equipped with pressurized This made the extraction of water more expensive for farmers, collective network, using water resulting in abandoned farmland, because farmers no longer from an existing dam (Aoulouz found it profitable to continue irrigating with such high Dam) extraction costs. 24 Governance in Irrigation and Drainage Appendix 2 In 1995, the Watershed Management Plan of Souss-Massa allocated an annual 45 million cubic meters of water to the El Guerdane irrigation scheme, which encompasses 10,000 hectares. The water would originate 40 miles from the El Guerdane perimeter at the Aoulouz Dam (IFC 2013). The government’s intention was to complement the current irrigation with surface water, alleviat- ing the stressed aquifer. Every hectare was projected to receive around 4,000 cubic meters of addi- tional surface water, or 50 percent of the total amount needed to irrigate citrus crops. Various schemes were explored to use the newly available water for irrigation resourcefully. The first option was the classical approach of public development through the Code of the Agricultural Investments (CIA), which would require the Government of Morocco to pre-finance all investments. The government would then recover the installation costs in the form of direct participation from the farmers receiving the services. Through the CIA, however, it would be difficult for the government to pre-finance capital expenditures (CAPEX) for construction and provide adequate operating expenses (OPEX) for infrastructure maintenance. A second attempt to co-finance an irrigation scheme with the regional WUA (AUEA Al Moustaqbal) was discussed. Under this structure, the state would finance 40 percent of the project and the farmers would finance the remaining 60 percent.1 This structure, however, would result in expensive water prices and an expensive right to connect for the farmers, thus proving equally unviable. Approach and Solutions Given the constraints of the first two options, the Government of Morocco gradually began to support the idea of developing the region’s irrigation infrastructure through collaboration with the private sec- tor, because publicly funded projects were predicted to result in substantial public investments or in a lower quality of service provided. Accordingly, the world’s first public-private partnership (PPP) in irri- gation was launched in El Guerdane to assist the region’s agricultural sector. Through the implementa- tion of PPPs in irrigation, the Government of Morocco sought to: •• Reduce the public sector’s subsidies for investment and O&M. •• Improve sustainability and quality of I&D services to its farmers at an affordable cost. •• Promote the modernization of irrigation practices. •• Promote efficient use of water resources using the right incentives (such as volumetric billing). In this new venture, the private sector would work with the government of Morocco in a BTO (build-transfer-operate) contract. In a 30-year partnership, the private sector would be responsible for (a) the construction of a 90-kilometer conveyance structure (pipeline) from the Aoulouz Dam to the El Guerdane perimeter; a 300-kilometer irrigation network covering the project’s 10,000 hectares; and the O&M of all hydraulic Infrastructure. Governance in Irrigation and Drainage Appendix 2 25 Transformation Strategy in Detail A long and tortuous pathway to find a private operator The El Guerdane project had to undergo two distinct bidding processes. The first began with a prequal- ification round for interested investors, which identified potential candidates based on their financial and technical backgrounds. The technical capacity criteria included the number of years of experience in irrigation network operations and years of experience in the construction of hydraulic infrastructure (World Bank 2005). The technical criteria also required the interested companies to demonstrate a total of US$200 million in hydraulic infrastructure works performed over the previous eight years (from 1996 to 2004). The financial criteria included a net worth of at least US$100 million, and either a debt ratio below 60 percent, or a net operational result of at least US$40 million.2 Once the interested companies were prequalified, the second phase of the prequalification round began: the structuring of consortiums, led by local financial investors. Lead investors were allowed to team up with both local and international construction firms (or other firms through which their services could be provided). Once the consortiums were created, the official bidding process was opened. The single criterion for the bid was the lowest tariff offered per cubic meter of water provided. During the first bid- ding process two consortiums, one led by Suez S.A. and the other by Omnium Nord-Africain (ONA), met the prequalification criteria and moved on to the technical and financial round. After the prequalifica- tion round, ONA wished to make changes to the composition of its consortium. Unsettled by this request, Suez S.A. withdrew its technical and financial bids. While the Government of Morocco could have continued the tender with ONA, the government decided to terminate the bidding process to avoid dealing with a unique bidder. Consequently, a second tender was launched welcoming all investors wishing to participate to directly submit technical and financial proposals. The prequalification phase of the bidding process was elimi- nated, but the prequalification criteria were not. In other words, any interested company could submit their technical and financial proposals, but only those that met the prequalification criteria would have their envelopes opened. The contractual documents remained unchanged from the first attempt, the only difference being the elimination of the prequalification round, reducing the tender evaluation from a two-phase to a one-phase process. A total of two bids were received from two consortiums that had met the prequalification requirements, ensuring the opening of both their proposals. The winning consortium, Amensouss, offered a tariff of LD 1.48  (US$0.168) per cubic meter. The second consortium, which included HOLDING-YNNA (HY), DIMATIT, and Société Nouvelle Travaux Maroc (SNTM), offered LD 1.88 (US$ 0.213) per cubic meter of water (World Bank 2005). The contract was thus awarded to Amensouss in 2004 and signed in 2005. The Amensouss Consortium had the ONA Company (currently called NAREVA) as a major shareholder, but also consisted of Igrane Fund from Morocco’s Caisse de Depôt et Gestion (CDG), France’s Compagnie Nationale d’Aménagement de la Région du Bas-Rhône et du Languedoc (BRL), and Austria’s Infrastructure Development and Management (Inframan). It should be noted that HM King Mohammed VI, the current king of Morocco, held notable stock in ONA, the winning concessionaire, which blurred, in many aspects, 26 Governance in Irrigation and Drainage Appendix 2 the line between the public and private sectors. This situation has changed since the award of the PPP contract because the king is no longer a shareholder of NAREVA. Difficult balance between incentives and risk allocation in PPP arrangements Signed in 2005, the El Guerdane concession is regarded as the world’s pioneering PPP in irrigation. The El Guerdane project is a BTO. Under this 30-year model, the private sector (concessionaire) is responsi- ble for the construction of a 90-kilometer conveyance pipeline stretching from the Aoulouz Dam to the El Guerdane perimeter, and an irrigation network of approximately 300 kilometers encompassing El Guerdane’s 10,000 hectares. The completion of these projects had to take place within the first two years of the 30-year contract period. Upon completion the infrastructures were transferred to Morocco. The O&M of the infrastruc- ture, however, was delegated to the private sector for the remaining time of the contract. CAPEX The total cost of the infrastructure was estimated at US$105 million, an amount that was directly co-­ financed by the private sector, the public sector, and the users (IFC 2013). The public sector, which financed nearly US$50 million, was able to contribute its share through the assistance of the Hassan II Fund for Economic and Social Development. The water users were responsible for paying a subscription tariff at the onset of the concession period, which accrued to approximately US$8 million (farmers were responsible for paying only half of their subscription tariffs upon subscription; the remaining amount was spread throughout the contract period). This money was used to cover part of the initial investment cost. Of the total investment, the state covered approximately 48 percent; the private concessionaire, 44 percent; and the users, the remaining 8 percent. The private sector was able to finance 75 percent of its contributions from commercial loans and the rest from its equity. OPEX Throughout the years, the water users continued to pay a tariff for the provision of I&D (US$0.168 per cubic meter initially, but the tariff evolves), and an additional public domain fee (LD .02 [US$0.00545] per cubic meter). The revenue from water tariffs is transferred to the private company as reimbursement for its initial investment, while the public domain fee goes to the River Basin Agency. The government, through its substantial initial investment, subsidized a large part of the construction to facilitate the concessionaire’s ability to offer a better tariff. Because the government was not going to subsidize during the operation period, the goal was to secure a tariff not too high for farmers to pay, but not too low for water to be used frivolously. The tariff for the service of water had two components: fixed and variable. The fixed component was an annual prepayment of 20 percent of the subscribed water volume determined at initial ­subscription. The variable component, in contrast, was based on water consumption. Due to the high water demand, the concessionaire was given the right to suspend water provision to nonpayers and to prioritize making the nondistributed water available to farmers on the waiting list. ­ Governance in Irrigation and Drainage Appendix 2 27 Risk allocation In relation to risk, the PPP arrangements aimed to transfer as much of the risk as possible to the service provider without discouraging the private sector to bid. The payment risk was fully transferred to the private party. The supply risk, in contrast, was divided between the public sector, private sector, and users. In cases when water is deficient in the system, the amount that the private sector may lose is capped. The following measures were or will be taken to mitigate the supply:3 •• In the case of a 0 percent to 15 percent water deficiency, the private sector must bear the full finan- cial loss. •• In the case of 15 percent to 22.75 percent water deficiency, the private sector must bear the first 15 percent of financial loss, and the user will bear the remaining amount (through an increase of water tariff). •• The Government of Morocco will compensate the service provider for any water deficit above 22.75 percent. •• Users already assume partial supply risk through tariff surcharges (limited to 10 percent of the tariff). Through the public contribution to initial investment, the water tariffs charged by Amensouss outcom- peted the increasing price of groundwater, incentivizing farmers to subscribe to their service. The following was or will be done to mitigate demand risks (World Bank 2005): •• Construction did not start until 80 percent of the water was subscribed for. •• An initial subscription was organized in which identified subscribers paid an initial tariff. •• Water was allocated among subscribers according to overall and individual demand. •• Water (4,000 cubic meters per hectare) that is not subscribed for is reallocated among farmers who need more. •• Farmers who do not use part of their water lose their right to the unused volume, to the benefit of other farmers. •• If demand is insufficient, subscription will be opened to other farmers in the area (beyond target beneficiaries). Creation of Renewal Fund as a major innovation of PPP design The El Guerdane project included a Renewal Fund, which is not scheduled to begin until the 21st year of the contract period. From year 21 to year 30 of the concession, the concessionaire will be responsible for financing the Renewal Fund (approximately US$18.8 million), which is to be used for the renewal and restoration of the irrigation system after the 30-year contract expires, irrespective of the entity in charge of the irrigation scheme. Tables A2.3 and A2.4 summarize the main financial information of the PPP design. 28 Governance in Irrigation and Drainage Appendix 2 TABLE A2.3 CAPEX of PPP Design in Renewal Fund, El Guerdane Project Percent Concessionary (public sector) 48 Concessionaire (private sector) 44 Users 8 Source: World Bank 2005. TABLE A2.4 OPEX of PPP Design in Renewal Fund, El Guerdane Project Item Comments Public subsidy for operation None Payment from users to concessionaire US$0.168 per cubic meter (evolving tariff) Payment from concessionaire to Basin Agency LD .02 cents (US$0.00545) per cubic meter (approximately) Payment from concessionaire to Renewal Fund US$18.8 million over the last nine years Source: World Bank 2005. Summary of Key Functions from Six Perspectives In December of 2001, the International Finance Corporation (IFC) began supporting Morocco, and served as the lead technical and financial advisor to the Moroccan government. Prefeasibility studies and risk analysis began in 2002, and upon signing the concession in 2005, the IFC was no longer involved in negotiations between the Government of Morocco and Amensouss. Perspective 1: Farmer involvement Farmers are customers of an on-demand, individual, and pressurized irrigation service (hydrant on the plot). They pay the irrigation fee on a volumetric basic based on actual water consumption, and are sub- ject to service interruptions. Perspective 2: Regional WUA The regional WUA (AUEA Al Moustaqbal) plays no specific function in the PPP arrangement. Perspective 3: Government irrigation agency (ORMVASM) Morocco delegated the responsibility of representing the public sector to the Office Regional Mise en Valeur du Souss-Massa (ORMVASM, or the Regional Office for Agricultural Development of Souss Massa). The ORMVASM’s primary responsibility is to interact with the Agency of Souss Massa Basin, the regional basin agency, to ensure the availability of water. The ORMVASM also interacts closely with the conces- sionaire and the users, supervising compliance with the terms of contract. Governance in Irrigation and Drainage Appendix 2 29 Perspective 4: Line ministry (Ministry of Agriculture) The Ministry of Agriculture signed the 30-year PPP contract with the concessionaire (private consor- tium), representing the public party (concessionary). The contract regulator is a PPP unit created within the Ministry of Agriculture. Perspective 5: Private sector/concessionnaire The main obligations of the private operator are the following. Financing 50 percent of the costs for the investment, design, and equipping of 10,000 hectares, which includes the construction of a 90-kilome- ter pipeline and a 300-kilometer distribution network to transport the water, and a distribution system to deliver it to farmers (based on the size of their citrus groves). Thirty years of O&M of the irrigation system and all related costs, which should be covered by irrigation tariffs paid by the farmers. The obligation to commence construction was delayed until enough farmers had subscribed (and paid the initial fee) to cover 80 percent of the water supply expected through the scheme. Contributing to the Renewal Fund, which is scheduled to begin the 21st year of the contract period. Summary of Key Learnings from El Guerdane An overall positive experience The El Guerdane experience has proven to be a successful one for all parties involved: •• The public sector was able to minimize its public funding (for initial investments and O&M subsi- dies) through the mobilization of the private sector while getting new hydraulic assets. •• The farmers were able to receive better and more sustainable I&D services at a price no higher than they previously paid. •• The private sector made a profit thanks to distributed contractual risks and the constant incorpora- tion of innovation. A huge demand from farmers for I&D services A year after the signing of the concession (2005), the total capacity for subscriptions was maxed. A total of 10,000 hectares, as planned, would be irrigated upon completion of the construction. Another 5,000 hectares were placed on a waiting list. While the recharge rate of Souss Aquifer has not been determined since the signing of the concession, it is presumed that less water is being pumped for irrigation of the perimeter. Several reasons for El Guerdane’s success include the practice of a “take-and-pay” method as opposed to a “take-or-pay” scheme. In the former, the farmers are not responsible for paying for water they have not used. This financial tool allows for more flexibility when balancing the supply and demand of water for the region. 30 Governance in Irrigation and Drainage Appendix 2 A well-designed risk allocation Another notable aspect of the PPP was the risk allocation at the supply, demand, and investment levels, which may have further attracted private investors. A prime example is the distribution of the supply risk between the concessionaire, the government, and the users according to the water deficiency in the system. While the benefits of the Renewal Fund have yet to be reaped, the El Guerdane project is inno- vative in that the concession plans for the renewal of the irrigation system beyond the 30-year contract period. Another key element is the farmers’ financial capacity to pay for the water. Without the provi- sion of water, it is very possible that many farmers would have to stop the production of their high-value crops targeted toward the international market. Room for improvement Despite its success, El Guerdane has encountered roadblocks that serve as learning tools for future PPPs. The total cost of the construction works, for instance, was lower than the total amount anticipated. The private sector was able to reap the entire benefit of not having spent all the funds, because the public sector had no mechanism through which it could retract unused money allocated for construction. A few years after the works construction, heavy rains caused a destructive flood that damaged the 90-kilometer pipeline. The public sector had to pay for the repairs (force majeure). It is believed that this issue may not have arisen if better works design had been practiced during the construction phase. While noting the overall positive outcomes, it is important to assess the limitations and negative out- comes. Research at Guerdane has identified losers in the process. Houdret (2012) calls for more careful evaluation of the ecological and the social impacts before replicating the model elsewhere. The follow- ing main issues were identified4: •• The low-income farmers in the area viewed themselves as having lost access to land and water in the process. Small farmers reportedly lost access to water that was reallocated to the project, and due to the technical and financial requirements to switch to drip irrigation, could not afford to be included. Small-scale farmers (comprising 62 percent of the headcount) cultivate one-third of the land, but have access to only 13 percent of the groundwater (El Mahdad 2003). •• Irrigation expansion reduced opportunities for cattle breeding, a traditional form of investment and financial security for farmers in the region, though this loss was offset by growing involvement in milk production. •• The selection of beneficiaries was reportedly highly contentious and favored farmers owning large plots rather than those owning small plots, adding to the marginalization of the less powerful and con- tributing to accumulation of resources of the more powerful. It was reported that information on regis- tration processes, for example, was relayed too late to certain groupings for them to enter the process. •• Several large landholdings in the irrigation system were owned by the same people who invested in the infrastructure, further increasing rather than decreasing economic and social inequalities. Governance in Irrigation and Drainage Appendix 2 31 Guerdaine success is difficult to replicate, even in Morocco From 2008 to 2010, the Government of Morocco began to carry out feasibility studies in nine other regions around the country in which potential PPPs in irrigation could be implemented. Legal, economic, finan- cial, institutional, and technical studies have been carried out for the existing large irrigation schemes, but the institutional model has been difficult to replicate for existing schemes for many reasons: •• The existence of different appetites for the modernization of irrigation services and capacity to pay from farmers within the scheme (subsistence farmers of cereal compared to commercial farmers). •• The need of a higher public subsidy for CAPEX to make the model attractive to the private sector. •• Local resistance due to the socio-political impacts of transferring the management of the scheme from a public entity (ORMVASM) to the private sector (concessionaire). Notes 1. See the Syngenta Foundation for Sustainable Development website, https://www.syngentafoundation.org/. 2. See the Syngenta Foundation for Sustainable Development website: https://www.syngentafoundation.org/. 3. See the Syngenta Foundation for Sustainable Development website: https://www.syngentafoundation.org/. 4. The concerns regarding the performance of PPP contracts and social impacts reported in this document include criticisms identified in schol- arly literature (Houdret 2008, 2012). These are included in the interests of presenting diverse views, and to prompt further reading and critical reflection. The findings reflected by various authors are not endorsed by the World Bank Group by their inclusion in the document. References El Mahdad, E. 2003. Water and Men in the Souss: Contribution to the Study of a Moroccan Hydrosystem (in Arabic). Agadir, Morocco: Faculté des Lettres et des Sciences Humaines. Houdret, A. 2008. “The Privatization of Irrigation Water Services: New Partnerships and Water Conflicts in the El Guerdane Project, Morocco.” Paper presented at the 13th World Water Congress, International Water Resources Association, Montpellier, France, September 1–4, 2008. http://www.iwra.org/congress/2008/resource/authors/abs89_article.pdf. Houdret, A. 2012. “The Water Connection: Irrigation and Politics in Southern Morocco.” Water Alternatives 5 (2): 284–303. IFC (International Finance Corporation). 2013. “Public-Private Partnership Impact Stories—Morocco: Guerdane Irrigation.” IFC. https://www​ .ifc.org/wps/wcm/connect/07baeea5-e7f0-47bf-ba61-0c94cc3f55ad/PPPStories_Morocco_GuerdaneIrrigation.pdf ?MOD=AJPERES​ &CVID=lHIEqIq. World Bank. 2005. “Guerdane Project. Introduction to Private Sector Participation in Irrigation.” Paper presented at the World Bank Water Week, “Water Security: Policies and Investments,” Washington, DC, March 1–3. 32 Governance in Irrigation and Drainage Appendix 2 Bangladesh: Decentralization Leads to Case 5.  Operational Success MAP A2.6 Bangladesh Bangladesh Water Challenges Panchagar Panchagar PANCHAGAR La lm o NILPHAMARI nir LA Nilphamari LM Thakurgaon Thakurgaon ha tLalmonirhat RANGPUR ON Nilphamari THAKURGAON INDI A IRH Kurigram AT Rangpur Kurigram KURIGRAM Rangpur •• Flat topography, frequent flooding, Dinajpur Dinajpur RANGPUR DINAJPUR Gaibandha river erosion Gaibandha JOYPURHATGAIBANDHA Joypurhat Joypurhat JAMALPUR SHERPUR Sunamganj NAOGAON NETROKONA SYLHET MYMENSINGH Sherpur Naogaon BOGRA Bogra Jamalpur Netrokona Sylhet Naogaon Bogra SUNAMGANJ RAJSHAHI Mymensingh SYLHET •• Climate change impacts NOWABGANJ Nowabganj Nowabganj MYMENSINGH Rajshahi RAJSHAHI TANGAIL Kishorganj MOULVI BAZAR Rajshahi Natore Sirajganj Sirajganj HABIGANJ Moulvi Bazar J a m u na NATORE Natore SIRAJGANJ Habiganj Tangail KISHORGANJ G a n PABNA gPabna Pabna e s DHAKA GAZIPUR Gazipur NARSINGDI I N DI A •• Seasonal water shortages a Narsingdi Brahmanbaria hn Kushtia INDIA KUSHTIA Manikanj DHAKA Tungi BRAHMAN eg Meherpur MANIKGANJ NARAYNGANJ BARIA DHAKA MEHERPURChuadanga Rajbari M •• Inadequate water management RAJBARI Naraynganj Pa Faridpur CHUADANGA Jhenaidah dm JHENAIDAH Magura Nārāyanganj Comilla Cumilla a MUNSHIGANJ Munshiganj CH HA RI MAGURA FARIDPUR SARIATPUR CHANDPUR COMILLA JashoreNarail infrastructure Sariatpur Chandpur KH AG RA Jessore Madaripur Khagrachhari JESSORE NARAIL MADARIPUR GOPALGANJ KHULNA Gopalganj LAKHIMPUR FENI Feni BARISAL Khulna Lakhimpur Noakhali CHITTAGONG RANGAMATI •• Poor operation and maintenance of Satkhira KHULNA PEROJPUR Barishal Jhalukathi Bhola SATKHIRA Bagerhat JHALUKATHI Rangamati Perojpur BAGERHAT Mongla NOAKHALI CHITTAGONG BARISAL PATUAKHALI water resources infrastructure BHOLA Patuakhali Chattogram Barguna Bandarban BARGUNA PROJECT COUNTRY es ng •• More than two-thirds of the Ga BANDARBAN CITIES the Mouths of COX’S DIVISION CAPITALS BAZAR MYANMAR rural population is landless or Cox's Bazar NATIONAL CAPITAL Cox’s Bazar DIVISION BOUNDARIES Bay of Bengal functionally landless (owning INTERNATIONAL BOUNDARIES IBRD 45294 | JANUARY 2021 fewer than 0.2 ha of land) Small-Scale Water Resources Development A Robust Policy Environment Typical interventions on systems of Bangladesh is characterized by heavy rainfall during the 1,000 ha or less: monsoon seasons and water shortages during the dry •• Construction of flood protection seasons (map A2.6). Water management interventions embankment have had a tendency to ignore project beneficiaries and designs often have had a single purpose that neglected •• Conservation of water for irrigation and interfered with needs of other users (such as naviga- •• Construction of water control tion, fisheries, and wetland conservation). structures and rubber dams In 1995 the government initiated a robust policy, plan- •• Excavation and re-excavation of canals ning, institutional, and legal framework for the sector. •• Training stakeholders and Water The National Water Policy (NWP) provided guidelines to Management Cooperative Association effectively manage critical water resources, emphasizing (WMCA) members (a) stakeholder participation; (b) strategic planning; Governance in Irrigation and Drainage Appendix 2 33 PHOTO A2.5   Images from the Asian Development Bank–Financed PSSWRSP ©Alan K. Clark. Used with the permission of Alan K. Clark. Further permission required for reuse. (c) decentralization; (d) sound management of social and environmental issues; (e) sustainable O&M through management transfer to WMAs; and (f) autonomy, transparency, and accountability of sector institutions (ADB 1995). An important provision under the NWP was the jurisdiction of local government institutions over small (those 1,000 hectares or fewer) water schemes, which had previously been the responsibility of the Bangladesh Water Board. By bifurcating responsibility for large and medium systems (those above 1,000 hectares) with small-scale, it enabled closer attention to be paid to the subproject development cycle, community participation, and, importantly, improved O&M. Supporting Guidelines for Participatory Water Management were approved in 2000 under the policy framework. These provided the guidance on how to establish WMAs on large and medium schemes, and water management cooperative associations on small-scale schemes (Ministry of Water Resources 2000). The National Water Management Plan (2004) provided a comprehensive framework for short- to long- term strategy and priority programs. It was the final piece of the jigsaw, resulting in an elaborate and comprehensive policy framework. A Novel Institutional Setup ment (LGED) under the Ministry of Local Government, Rural The Local Government Engineering Depart­ Development and Cooperatives (MLGRD&C) is responsible for small-scale water resources (SSWR) development. It was established in 1984 and is considered to be one of the most successful water sector institutions in Asia. 34 Governance in Irrigation and Drainage Appendix 2 The LGED is a highly decentralized organization with more Intermediate Level: Circle Offices than 90 percent of total staffing at district and upazila (sub- district) levels. The chief engineer is the head of the organiza- •• 10 LGED circle offices are below tion, supported by four additional chief engineers, with the headquarters and above the supporting staff. The total staff under permanent payroll is district level. 10,287 (at headquarters and field levels). •• Circle office is headed by a A decentralized institutional setup with main staffing superintending engineer. strength at the upazila level enables the LGED to provide •• Circle offices monitor O&M and closer support to the development of Water Management train LGED staff and WMCAs. Cooperative Associations (WMCAs). The upazila engineer, •• Training is focused on technical being based in the field and close to beneficiaries, facilitates issues with special reference to construction and O&M supervision, conflict resolution, and quality control. other participatory actions that can otherwise suffer in heav- ily centralized agencies. The LGED has achieved notable results in two phases of SSWR development projects, financed by the Asian Development Bank (ADB) with co-financing from the International Fund for Agriculture Development and the Government of the Netherlands. There is an on-going ADB-financed Participatory Small-Scale Water Resources Sector Project (PSSWRSP) and a subsequent phase in planning stage. Beneficiary Participation Water management in Bangladesh was historically dominated by top-down approaches, steeped in bureaucracy and with an engineering bias. There was very little or no beneficiary involvement, resulting in suboptimal performance. Absence of O&M funds and lack of beneficiary participation resulted in system disrepair and loss of benefits from production. Encouraged by the success of the privatization program of tube well irrigation, the government undertook transfer of management of flood control, drainage, and irrigation schemes to beneficiaries. ­ This transfer was enacted under the Bangladesh Water Development Board Act, 2000. The Guidelines for Participatory Water Management provide a systematic and comprehensive process for stakeholder participation in six stages of subproject development and management: ­ •• Identification, prefeasibility •• Feasibility study •• Detailed planning and design and stakeholder institution building •• Implementation and trial operation •• O&M •• Monitoring and evaluation Governance in Irrigation and Drainage Appendix 2 35 District Level Upazila and Union Level LGED is responsible for: The upazila engineer is closest to and most regularly in contact with WMCA, •• Guiding and monitoring the LGED and responsible for: at upazila level. •• Guidance to WMCA in the walkthrough •• Registering monitoring reports in and preparation of annual plans. subprojects. •• Monitoring subprojects, including the •• Taking actions based on monitoring WMCA functioning. report recommendations. •• Actions to improve functioning. •• Reporting issues and progress to the supervising engineer circle •• Registering and conveying major level and the additional chief maintenance needs to LGED district engineer (IWRM). level. The District Small-Scale Water The Development Coordination Resources Development Committee Committee and the union parishad supports and assists project (lowest administrative unit) monitor implementation at the district level. progress. Under the ADB-financed PSSWRSP, much emphasis was placed on further refining key elements of the subproject development process, specifically further enhancement of the O&M phase. A comprehensive set of guidelines was developed for O&M (including rationalizing budgets, condition assessments, and fund management), which was approved under the overall policy framework. Farmer Cooperatives: More than Water Management 1960s: Comilla Academy for Rural LGED exists under MLGRD&C Development develops cooperatives model WMCAs registered under Aims: overcome challenges of the Cooperative Societies Act (2001) rural economy; reaching farmers WMCAs not confined to water Model forms basic framework for management activities alone organizing farmer groups The advantage of registering WMCAs as cooperatives is that they have evolved into multipurpose coop- erative societies, with microcredit forming a significant activity (de Silva 2012). A 2006 study (ADB 2006) finds that the reason some WMCAs were thriving was because of the diversification of their activities. They had more group cohesion and were also performing water management responsibilities very well. Activities in addition to water management, particularly microcredit, thus provide the scope for more 36 Governance in Irrigation and Drainage Appendix 2 Impressive Results and Lessons Successive SSWR investments demonstrate that better rural water management and crop production technologies enable water users to increase productivity, strengthen household food security, improve nutrition, and safeguard rural livelihoods by reducing the risk of flooding. ADB’s evaluation reports for Small-Scale and Second Small-Scale Water Resources Sector Development Projects (ABD 2007; ADB 2012) finds that: •• Decentralized, community-managed SSWRs have improved rural incomes and are an effective means of reducing rural poverty. •• Successful WMCAs have farming, entrepreneurial, management, and leadership skills among members; enthusiastic leadership; a common goal; salaried staff for maintaining accounts and records; and a transparent system for raising and utilizing funds. •• Between 2002 and 2008 (a) average cropping intensity increased by 28 percent (from 170 percent to 198 percent) compared with only 8 percent within the control area; (b) paddy production increased by 57 percent. •• Beneficiary engagement at all stages of the subproject development process improves the sustainability of WMCAs. •• WMCAs have not collected or spent enough on maintenance to prevent a gradual build-up of deferred maintenance. Deferred maintenance leads to a “build-neglect-replace” cycle and a loss of benefits, and affects the sustainability of WMCAs. Activities to institutionalize WMCA-managed O&M through a detailed strategy should be initiated at an early stage of subproject development. •• Women’s participation in WMCAs has an encouraging effect on subproject implementation. Although there is one-third reserved membership for women in WMCA managing committees, women’s effectiveness depends on their capabilities, which can be improved through training. sustained activities (as a group) throughout the year. The financial surplus that may be generated by other activities can contribute to O&M costs and the socioeconomic development of the WMCA members. The water management organizations (WMOs) surveyed (ADB 2006) were strongly favorable to a single-tier, registered cooperative association being the appropriate legal institution for LGED WMOs. Ensuring accountability and transparency by observing the cooperative rules and laws is considered more appropriate for organizations such as WMCAs, which are likely to handle more funds for O&M. LGED and the Department of Cooperatives continue to work closely in the formation and nurturing of WMCAs. ADB has supported the MLGRD&C in strengthening the Department of Cooperatives (under the PSSWRSP) with the establishment of a dedicated Water Cell that focuses on WMCAs’ registration and training needs. Being under one ministry surely facilitates the development process. Governance in Irrigation and Drainage Appendix 2 37 References ADB (Asian Development Bank). 1995. “Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of Bangladesh for the Small-Scale Water Resources Sector Development Project.” ADB, Manila, the Philippines. ADB (Asian Development Bank). 2007. “Performance Evaluation Report: Small-Scale Water Resources Sector Development Project.” ADB, Manila, the Philippines. ADB (Asian Development Bank). 2012. “Project Completion Report: Second Small-Scale Water Resources Sector Development Project.” ADB, Manila, the Philippines. ADB (Asian Development Bank), Government of the Netherlands, and LGED (Local Government Engineering Department). 2006. “Draft Final Report: Institutional Studies for Legal Framework of Water Management Organizations.” ADB, Manila, the Philippines. de Silva, S. 2012. “The Experience of Water Management Organizations in Bangladesh—A Literature Review.” International Water Management Institute, Colombo, Sri Lanka. Ministry of Water Resources, Government of Bangladesh. 2000. “Guidelines for Participatory Water Management.” Ministry of Water Resources, Dhaka, Bangladesh. 38 Governance in Irrigation and Drainage Appendix 2 Case 6. India: Championing Change with Leadership MAP A2.7 Rivers and River Basins in Madhya Pradesh Water Management Arrangement •• Nodal state government agencies operate major irrigation systems •• MPWRD is the public irrigation agency •• Minor systems operated jointly with WUAs, farmer groups, and contractors Value Chains Madhya Pradesh’s Irrigation Turnover •• Rice Madhya Pradesh, despite being one of India’s poorest and most •• Wheat infrastructurally underdeveloped states, became the country’s •• Other cereals agricultural success story (map A2.7). Between 2005 and 2015, the •• Pulses sector grew on average 9.7 percent annually (Gulati, Rajkhowa, and •• Oilseeds Sharma 2017), and achieved a record agricultural growth rate of •• Cotton 20.4 percent in 2013–14. This impressive and sustained growth has been unmatched by any of the other major agrarian states in India, as depicted in figure A2.6. Water Infrastructure One of the factors driving this accelerated agricultural drive in •• Gross irrigated area: 10.3 million ha Madhya Pradesh is its irrigation sector. The state government, by guaranteeing water and power supplies to farmers during the •• 67% wells and tube wells, 17% canals, 13% other sources, 3% wheat season, increased wheat production significantly (Gulati, tanks/ponds Rajkhowa, and Sharma 2017). The irrigated area in the state expanded threefold since 2010–11 (Burton and Stoutjesdijk 2017). This irrigation turnover is largely due to improvements in man- Farmer Profiles agement in the state’s Water Resources Department (MPWRD), instituted by the state’s senior bureaucratic and political leader- •• Cultivators: 9.84 million ship. This case study outlines the features of this management •• 37.6% are female approach and the leadership that championed this change. •• Agricultural labor: 12.1 million Governance in Irrigation and Drainage Appendix 2 39 FIGURE A2.6 Share of Agriculture and Allied Activities Growth Rate in Indian States, in 2004–05 Prices 40 30 20 Percent 10 0 –10 –20 2010–11 2011–12 2012–13 2013–14 2014–15 Punjab Madhya Pardesh Maharashtra Uttar Pradesh Gujarat Source: NITI Aayog 2014. Sector Overview Madhya Pradesh is India’s second-largest state, with an estimated population of 72 million (map A2.7). It is sourced by 10 rivers that are rainfed, mostly in the monsoon season (June to September). During the monsoon season the annual rainfall ranges from 800–1,600 millimeters (World Bank 2004), but this is usually insufficient for a full crop harvest, and supplemental irrigation is required. The winter crops rely completely on irrigation because the river flow between December and May is quite low (Julaniya et al. 2016). Problems in Service Delivery Operability of the irrigation system Most of the I&D systems lacked sufficient O&M attention, with less than 50 percent (on average) of the created potential being utilized. The gap between the irrigation potential created (IPC) and irrigation potential utilized (IPU) ranged from 70 percent in minor schemes to 50 percent in medium schemes to 40 percent in major schemes (World Bank 2015). Unreliability Due to the lack of rehabilitation and remodelling of irrigation infrastructure, the supply of water tended to be less predictable. This was aggravated by insufficient extension, and the lack of use of agricultural technology, inputs, and diversification (World Bank 2004). Multiple-use services Competing demands from other sectors, such as domestic, power, and industrial, for storage water resulted in groundwater exploitation for irrigation. This has put greater pressure on the state’s ground- water resources (World Bank 2004). 40 Governance in Irrigation and Drainage Appendix 2 Organizational Resources and Governance Challenges The problems in service delivery are indicative of the governance deficit in public irrigation in India, in which investment in irrigation is insufficiently planned, implemented, and managed (Shah et al. 2016). The key issues in public irrigation that the MPWRD set out to tackle were (a) extended project gestation periods; (b) deferred maintenance in many projects; (c) poor canal management; (d) low motivation among the staff; (e) inadequate communication between the department, farmers, and WUAs pertain- ing to service delivery and asset management; and (f) setting low targets with an outdated monitoring system (Julaniya et al. 2016). Strategies for Improvement Shivraj Singh Chouhan, Madhya Pradesh’s chief minister, prioritized agricultural growth through irriga- tion expansion as part of his development strategy (Shah et al. 2016). His initial approach involved improving power supply for irrigation, especially during the wheat irrigation season. The popularity of this strategy was reflected in his electoral success in 2008 and provided a basis for greater intense irriga- tion reform. In 2010, he appointed RS Julaniya, an honest and competent official, as the new head of the Irrigation Department. With the political support of the chief minister, Julaniya pushed for manage- ment reforms that involved not only investing in new water infrastructure but also improving water management in the existing irrigation schemes (Julaniya et al. 2016). The following are some of the critical reforms that led to Madhya Pradesh’s irrigation turnover. Canal irrigation management protocol Traditional principles of canal management that had been abandoned in most irrigation schemes were reinstated: rationalized irrigation schedules; tail-to-head irrigation; operating canals by strict rotation; and operating canals at full supply level. Outdated irrigation schedules were replaced by new schedules that corresponded to new cropping patterns (Shah et al. 2016). Even though pumping from the head reaches of the canals was illegal and amounted to theft, it was a regular practice. Pumping was legalized, with pumps limited to 5 horsepower capacity, and farmers in breach of this were penalized. Tail-end-first irrigation and operating canals through rotation have led to a greater supply of water: fields are irrigated faster, and farmers are able to save time and labor (Shah et al. 2016). Completing last-mile projects With the help of the World Bank’s Madhya Pradesh Water Restructuring Project (MPWRP) loan, the MPWRD prioritized completing last-mile projects. This included lining large old dirt schemes to ensure water to tail-end users faster (Julaniya et al. 2016; Shah et al. 2016). Effective monitoring The revised management system involved greater emphasis on improving monitoring through modern technology. Gatekeepers send daily reservoir water-level gauge readings by SMS to the central web- based management information system (MIS), at which depth readings are converted into stored Governance in Irrigation and Drainage Appendix 2 41 volume based on reservoir-specific depth-volume curve. This helps the senior management set reser- voir-specific irrigated crop area targets for the coming winter season (Julaniya et al. 2016). On a weekly basis, the executive engineers enter the cumulative area irrigated on the MIS, and regular weekly video conferences, chaired by Julaniya and the engineer-in-chief, are held with the staff to discuss the status during the irrigation season. Maintenance planning Julaniya identified timely preventative maintenance for better service delivery performance (Julaniya et al. 2016). In India, most nodal irrigation agencies have limited or negligible resources for moderniza- tion and maintenance. In Madhya Pradesh, the state government has authorized the MPWRD to allocate more resources for annual repairs and maintenance (Julaniya et al. 2016; Shah et al. 2016). The MPWRD staff is responsible for ensuring, prior to the irrigation season, that the system is suitable to deliver water at full supply levels. Civil works of value on subminor canals and filed channels are delegated to WUAs (Julaniya et al. 2016; Shah et al. 2016). Staff performance Julaniya recognized that improved irrigation delivery required a motivated staff, and therefore revised human resource practices to reward staff contribution for well-performing systems. In 2011–12, staff with improved or satisfactory performance were rewarded with certificates and monetary bonuses. This created motivation and healthy competition within the public agency. In systems that performed poorly, the divisional staff assess the cause and provide proposals to improve performance in the next season (Julaniya et al. 2016). Partnership with WUAs About 2,000 WUAs were established but were not functional and played an insignificant role in service deliv- ery. With the improvement in irrigation systems and water reaching the tail-ends, the WUAs found a new role. They became involved with prewinter desilting of minor and subminor canals and became critical part- ners of the MPWRD in irrigation scheduling, maintenance, and orderly water distribution (Shah et al. 2016). Change in Irrigation Service Delivery The state government in MP has invested far less financially than have other dominant agrarian states (such as Maharashtra) in its public irrigation infrastructure, but nevertheless managed to almost triple the irrigated area in canal commands. The area irrigated by public canals surged from less than 1 million hectares in 2010, to 1.56 million hectares in 2011, to 2.02 million hectares in 2012, and to 2.33 million hectares in 2013 (Shah et al. 2016). Since 2009, the state managed to bridge the gap between the IPC and IPU, as depicted in figure A2.7. The improvements in irrigation service delivery have led to increased crop yields, varied crop patterns, and a shift from a mono-crop regime to double cropping. In 2000–01, the irrigation ratio in the state was 24 percent, which was around 17.2 percent points lower than the all-India average. By 2014–15, the irrigation ratio in Madhya Pradesh reached 42.8 percent, less than 5 percentage points below all India average (Gulati, Rajkhowa, and Sharma 2017). 42 Governance in Irrigation and Drainage Appendix 2 Championing Change through Leadership The partnership of Chief Minister Shivraj Singh Chouhan and RS Julaniya as principal secretary are fundamental elements of this success story. Chouhan promised Julaniya a stable tenure and political autonomy. This created the space for change that Julaniya needed to implement reforms without any political pressures. His dynamic leadership inspired a motivated irrigation bureaucracy that set out to establish order and rule of law in canal commands. The chief minister’s steady support also enabled coordination with other sectors, such as agriculture, forestry, and revenue departments and district collectors. Unlike its counterparts in other Indian states, the MPWRD evolved into an animated bureaucracy with the purpose of ensuring efficient and reliable water service delivery to as many users as possible (Junaliya et al. 2016; Shah et al. 2016). FIGURE A2.7 Share of IPU against IPC in Irrigation System Utilization, Madhya Pradesh, 2009–16 90 85 79 82 80 72 Utilization, IPU/IPC (%) 70 60 57 50 40 34 32 30 20 10 0 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 Source: Julaniya et al. 2016. Note: IPC = irrigation potential created; IPU = irrigation potential utilized. Summary of Key Functions from Six Perspectives Perspective 1: Farmer involvement Farmers are an important constituency group in Madhya Pradesh; about 70 percent of the state popula- tion is involved in agriculture. Most groundwater pumps are owned and operated by the farmers. Prior to 2005, farmers operated at low efficiency, wasted water, and were unmotivated to diversify their crops. Due to the lack of reliability in the delivery of water, farmers would often interfere in the water distribution systems. However, since the state implemented irrigation reforms, and with the help of a World Bank loan, the expansion of irrigated land has helped farmers to increase their net income from the major crops by 18 percent in the head reaches, 29 percent in the middle reaches, and 35 percent in the tail-end (World Bank 2004, 2015). Governance in Irrigation and Drainage Appendix 2 43 Perspective 2: WUA In 1999, new legislation pushed for the establishment of WUAs, and for the most part, these were largely nonoperational. Now, WUAs are responsible for maintenance in minor canals and field channels. The World Bank loan allowed them to be provided with training and capacity building for this role. The elec- toral process for the WUAs was also revised, so that currently one-third of the committee is re-elected every two years. WUAs are now important partners of the MPWRD in irrigation scheduling and ensuring disciplined water distribution. Perspective 3: Irrigation agency (MPWRD) The MPWRD is the main irrigation agency in the state, responsible for managing surface water resources that are stored in about 5,000 dams and tanks. In 2010–11, the total irrigated command area under the MPWRD was 2.79 million hectares (Julaniya et al. 2016). The MPWRD is structured under divisional offices under executive engineers at the district level. They report to the circle offices under superintending engineers, and the superintending engineers report to basin offices under chief engineers. The chief engineers report to the engineer-in-chief, who in turn reports to the principal secretary, MPWRD. The principal secretary is directly responsible to the minister (Burton and Stoutjesdijk 2017). Perspective 4: Line ministries (Ministry of Water Resources and Ministry of Agriculture) The two relevant ministries are the Ministry of Water Resources and the Ministry of Agriculture. The state government created the Krishi Cabinet, which is a committee of the Council of Ministers, led by the Chief Minister Chouhan. It is responsible for developing an overall plan for agriculture. Perspective 5: Private sector Currently, there is a limited role played by the private sector because most of the surface water systems are managed by the public agency or farmers. Perspective 6: Nonirrigation users While the irrigation sector accounts for 90 percent of water use in Madhya Pradesh (World Bank 2004), multiple competing demands for water have increased in the state, especially demand for storage water for drinking purposes. References Burton, M., and J. Stoutjesdijk. 2017. “Increasing Irrigated Agricultural Production Using ICT and Modern Management: A Case Study from Madhya Pradesh, India.” Paper presented at the 23rd International Congress on Irrigation and Drainage, Mexico City, October 8–14. Gulati, A., P. Rajkhowa, and P. Sharma. 2017. Making Rapid Strides—Agriculture in Madhya Pradesh: Sources, Drivers, and Policy Lessons. New Delhi, India: Indian Council for Research on International Economic Relations. Julaniya, R. S., S. Manish, M. G. Choubey, and S. Biswas. 2016. “A Management Approach to Increase Irrigated Agricultural Area and Production in Madhya Pradesh, India.” Paper presented at the Second World Irrigation Forum (WIF2), Chiang Mai, Thailand, November 6–8. 44 Governance in Irrigation and Drainage Appendix 2 NITI Ayog 2014. “Gross Capital Formation in Agriculture and Allied Sectors as %age of GDP in Agriculture Sectors from 1993-94 to 2013-14” https://niti.gov.in/planningcommission.gov.in/docs/data/datatable/index.php?data=datatab Shah, T., G. Misra, P. Kela, and P. Chinnasamy. 2016. “Har Khet Ko Pani?: Madhya Pradesh’s Irrigation Reform as a Model.” Economic and Political Weekly 51 (6): 19–24. https://www.researchgate.net/publication/297765602. World Bank. 2004. “India—Project Appraisal Document for the Madhya Pradesh Water Sector Restructuring Project.” Report 28560, World Bank, Washington, DC. World Bank. 2015. “Implementation, Completion and Results Report for the Madhya Pradesh Water Sector Restructuring Project.” Report ICR00003371, World Bank, Washington, DC. Governance in Irrigation and Drainage Appendix 2 45 Pakistan: Lessons from Comprehensive Case 7.  National-Level Irrigation and Drainage Reforms MAP A2.8 Pakistan Program Overview •• Aim: to improve efficiency of the irrigation and drainage (I&D) system in Pakistan and ensure its sustainability •• Program cost (at appraisal): US$785 million •• Implementation period: 1997–2004 Key Components •• Establish appropriate policy environment and institutional framework •• Strengthen sector institutions •• Improve sector policies and planning •• Strengthen technical foundations on I&D •• Improve I&D infrastructure network Agriculture: A Lifeline Extent of Salinity and Agriculture is the backbone of Pakistan’s economy, contributing Waterlogging 23 percent to the GDP, accounting for more than 40 percent of labor engagement, and the major contributor in overall export •• 21% of irrigated land is affected by varying levels and types of incomes (map A2.8). The sector plays a significant role in liveli- salinity hoods, since 64 percent of the population is rural (in 2017). •• 30% of irrigated area has groundwater levels within 1.5 m of The Indus River is the world’s largest irrigation network: the Indus the soil surface Basin Irrigation System (IBIS) accounts for 80 percent of Pakistan’s •• 70% of tube wells installed in IBIS agricultural production. The majority of IBIS flows through Punjab are pumping sodic water and Sindh provinces. Relatively smaller command areas are found 46 Governance in Irrigation and Drainage Appendix 2 in Khyber Pakhtunkhwa and Balochistan provinces. Following signing of the Indus Waters Treaty with India in 1960, Pakistan began an extensive irrigation development program, administered by the World Bank. Works included major barrages and link canals to replace flows in eastern tributaries that India began to divert in accordance with the terms of the treaty. Neglected Drainage: A Curse to Sustainable Irrigation Pakistan focused its early efforts primarily on irrigation rather than drainage development. This was to boost food production in a recently created nation. Over time, irrigation without drainage, overirriga- tion, infrastructure development (which impeded drainage), a lack of focus on drainage from irrigation institutions, and limited stakeholder engagement led to severe waterlogging and salinity. Experts esti- mated a reduction of 25 percent in productivity due to increased waterlogging and salinity. In 1993 the government responded with a Drainage Sector Environmental Assessment, recommending policy and institutional reforms for the drainage subsector and a 25-year drainage investment program. This envisaged improved irrigation management and major institutional reforms to complement drain- age investments. In 1997 the World Bank National Drainage Program (NDP) project was approved. It aimed to address waterlogging and salinity through a combination of institutional reforms of the irrigation subsector and drainage infrastructure development (World Bank 1997). From Irrigation Developer to Irrigation and Mismatch in Transfer of Powers Drainage Service Provider and Policy Making Pakistan’s century-old Provincial Irrigation Departments (PIDs) Pakistan provincial assemblies were established during British colonial rule. Following inde- approved the enabling legal pendence and rapid irrigation development, these institutions framework to support institutional simply added new functions of drainage to their administrative reforms in 1997. The PIDA Acts structure rather than integrating with the existing institutional provided the legal framework for structure. No additional funds were provided for the O&M of establishment of PIDAs, AWBs, FOs, drainage systems, which subsequently fell into disrepair. This and regulation of the decentralized was much the same situation as for the case of the irrigation sys- water sector. Importantly, the tems, in which 63 percent of the annual budget allocation was enactment took place more than a for sustaining the establishment, not related to irrigation scheme decade before Pakistan undertook overall transfer of power and maintenance activities. This could be considered the fundamen- policy-making authority from tal issue, compounded by the lack of accountability and trans- federal and provincial levels to parency in service provision. local governments. This led to a The NDP attempted an ambitious transition from institutions fundamental mismatch in how focused on infrastructure development to ones focused on ser- decisions were made for irrigation reforms, and the participation of vice orientation. This entailed institutional reforms of the local government and beneficiaries. Federal Water and Power Development Authority and PIDs, specifically: Governance in Irrigation and Drainage Appendix 2 47 •• Redefining roles and functions •• Decentralizing roles and responsibilities •• Streamlining •• Transferring management responsibility for functions that should be managed by other (lower tier) entities that will succeed PIDs: Provincial Irrigation and Drainage Authorities (PIDAs), area water boards (AWBs), farmer organizations (FOs), or the private sector •• Capacity building for Water and Power Development Authority (WAPDA) and the new public and private institutions Too Much Too Soon: Ambitious Reforms The crux of the institutional reforms rested on the structural transformation of I&D service provision at the provincial level. These were based on the following: •• Reorientation of WAPDA from an executive agency to that of a planning agency with a national, interprovincial, and river basin management orientation. •• Devolution of O&M and fee collection to FOs. •• Transformation of PIDs to autonomous PIDAs, which would manage subunits of the province’s part of the Indus River Basin within a suitable legal framework. •• Establishment of financially self-sustaining AWBs over a seven- to 10-year period, as informed in the PIDA Act (AWBs would be based on former irrigation canal circles, which encompass a main and distributary canal system within an overall irrigation zone; a superintending engineer would head the irrigation canal circle, reporting to a chief engineer at the zonal level). •• Devolution of O&M and collection of water charges to FOs. •• Promotion of the formation of FOs on a pilot basis (these would be owned and controlled by farm- ers, and would take over I&D system management below the distributaries and minors). The project agreed on the establishment of one pilot AWB in a canal command in each province (in  Punjab, for example, the province comprised 17 irrigation circles), within one year of the ­ establishment of the PIDA. At project closure Sindh Province was most advanced, with the establish- ment of the Sindh Irrigation and Drainage Authority, three AWBs, and 150 FOs. But instead of being autonomous, AWBs remained under the control of the Irrigation Department and had only changed in name, not function. Though FOs had commenced system O&M and fee collection, limited capacity building efforts and skepticism from the PID were key limitations to success. Punjab province established one AWB and several FOs, then progress stopped. Distributary canals were put under the joint management of PID and FOs, thereby reverting to former arrangements. 48 Governance in Irrigation and Drainage Appendix 2 Importantly, the collection of water charges remained with government, leaving FOs with no main function. The other provinces made limited progress. In Khyber Pakhtunkhwa, O&M and water charge collection were not devolved to farmers. Balochistan made minimal progress, mainly since much of its irrigated area was under communally managed irrigation schemes. The World Bank Implementation Completion Report (World Bank 2007) notes that “… the project has not achieved its first objective … irrigation and drainage system management has remained practically the same as pre-reform, with minimal changes.” The overall outcome was disappointing, given the scale, time frame, and efforts to undertake a much-needed but ambitious process. Learning from a Painful Process Subsequent to closure of the NDP and a hiatus period, Punjab Province moved forward. The Punjab Irrigation Sector Development Policy Loan, approved in 2007, provided US$100 million financing to the Government of Punjab for a major reform agenda to improve fiscal management and service delivery. The project built on the base work of the NDP for FO strengthening and carried it forward with improve- ments. These included O&M budget rationalizations, water resource management reforms to make water allocation and distribution more transparent, and actions for improved irrigation service provi- sion and system management. The World Bank Implementation Completion Report (World Bank 2010) reported a moderately success- ful outcome given that progress was made on areas such as O&M cost recovery. However, improved irrigation service delivery through participatory irrigation management remained more challenging, mainly due to PID reforms being put on hold after project closure. FOs similarly had become less effec- tive due to unresolved institutional problems. Sindh Province continued its efforts to progress the reform process. By 2003, five out of 13 AWBs were notified, and 80 FOs had taken over O&M responsibility. The other two provinces have less to report, due in part to their more limited command area within the IBIS. What has been learned through this lengthy and at times contentious reform process? First, the intent was valid and timely as Pakistan had focused its efforts on irrigation development within the IBIS for too long, and sustainable agricultural production was under threat from the lack of attention to drainage. But if we look deeper, there are pertinent points to learn for future reform programs. Commitment. Leadership and ownership of the reform process is fundamental. In this case, the PIDs were the “doctors operating on themselves,” a painful process unlikely to succeed unless there is inher- ent ownership of the need for change. Tailored solutions. The one-size-fits-all strategy rolled out across all provinces was inappropriate, given the subtle and at times obvious differences in irrigation systems and, importantly, social structures. For example, the feudal system in Sindh results in skewed land distribution and power asymmetries. Expecting egalitarianism and the democratic appointment of FOs could therefore be much more chal- lenging than in Punjab. Likewise, Balochistan is dominated by community-managed irrigation systems, Governance in Irrigation and Drainage Appendix 2 49 for which there was no clear approach within the PIDA. A project-driven Community Irrigation Services Unit was established in the PIDA, but this lost momentum following project closure, again for a lack of buy-in. Streamlined and convergent processes. Irrigation reform took place a decade in advance of power devolution to provincial local governments. This mismatch in timing may have impacted on the ­ ­ engagement process and on developing more tailored, province-specific strategies. Time frames and staying the course. Undertaking the same set of reforms simultaneously across all ­provinces was challenging because the provinces worked at their own pace. During implementation, the commitment from different participants varied. The federal government stopped NDP implementation for a year and a half, and Balochistan withdrew from NDP for more than a year. The lessons reiterate the need for tailored solutions, a very rigorous consultation process to develop appropriate strategies, consistency with broader reform programs and processes, and, importantly, long-term commitments from the public sector. Pakistan continues to proceed with province-specific initiatives—perhaps a more pragmatic approach in hindsight. References World Bank. 1997. “Staff Appraisal Report, Pakistan, National Drainage Program Project.” Report 15310-PAK, Rural Development Sector Management Unit, South Asia Region, World Bank, Washington, DC. World Bank. 2007. “Implementation, Completion and Results Report for the National Drainage Project.” Report ICR0000372, Sustainable Development Department, Pakistan Country Unit, South Asia Region, World Bank, Washington, DC. World Bank. 2010. “Implementation, Completion and Results Report for the Punjab Irrigation Sector Development Policy Loan.” Report ICR00001488, Agriculture and Rural Development Unit, South Asia Region, World Bank, Washington, DC. 50 Governance in Irrigation and Drainage Appendix 2 India: Policy Actions Avert a Groundwater Case 8.  Crisis MAP A2.9 Surface Water Map of Punjab State, India Water and Energy Demand Management •• Power subsidies have led to groundwater overconsumption •• About 1.2% of Punjab State’s GDP is composed of power subsidies •• State-level policy actions undertaken to rationalize power consumption Key Actions •• Introduce normative-free power requirements for agriculture •• Segregate agriculture feeder line •• Introduce 100% feeder metering •• Introduce distribution meters Farmer Profiles Setting the Scene •• Agriculture constitutes 36.5% of India leads the world in groundwater depletion, with groundwa- Punjab workforce in FY2011a ter providing up to 70 percent of the water used in agriculture. •• Average landholding: 3.95 ha Over the past three decades there has been massive growth in •• Rice: 3,046,000 ha private agricultural tube wells to supplement the surface water •• Wheat: 3,500,000 ha resources (see map A2.9 for a visual of the surface water avail- ability in the state). The State of Punjab, India, was a star performer during the green revolution. Its agricultural gross domestic product (GDP) grew at 5.7 percent per annum between 1971/72 to 1985/86, which was much higher than India’s overall agricultural growth rate of 2.31 percent. By 2005, this had crashed to Governance in Irrigation and Drainage Appendix 2 51 1.6 percent per annum, with a dramatic decline in rice and wheat production, which dominated 80 percent of the cropped area (Gulati, Roy, and Hussain 2017). Much of the slowdown in production is linked to policy actions, including free power for agriculture and minimum support prices for rice and wheat. While these may have resulted in a boom in the past, their impact today is increasingly detrimental to the efficient use of energy and water. As much as 77 percent of the cultivable land in the state is irrigated by tube wells (Khanna, 2018). Between 1980 and 2015, the number of tube wells increased from 600,000 in 1980–81 to 1,400,000 in 2015–16. With the fast-depleting water table (70 centimeters per year during 2008 to 2012) the number of submersible motors also increased from 619,197 (56.7 percent) in 2009 to 978,874 (72.4 percent) in 2017. This increased agricultural electricity consumption from 6.97 million kilowatts in 1974–75, to 11. 5 million kilowatts in 2015–16. Supporting Demand Management Agricultural producers with access to unlimited free power for their operations consume about 87 per- cent of the power subsidy. Untargeted power subsidies are a huge cost on both the environment and the fiscal health of the state through a vicious cycle. The cost of providing free power for agriculture (about US$1 billion) is no longer sustainable. The ADB is facilitating implementation of a Comprehensive Fiscal Consolidation Program in Punjab. This US$200 million policy-based program loan, approved on November 19, 2014, is to generate fiscal PHOTO A2.6 Tube Well Irrigation in Punjab ©Alan K. Clark. Used with the permission of Alan K. Clark. Further permission required for reuse. 52 Governance in Irrigation and Drainage Appendix 2 savings and make better use of scarce budgetary resources, and thereby help with the socioeconomic development of the state. Its outputs include fiscal management, revenue reforms, and, importantly, expenditure rationalization focusing on power subsidy (ADB 2014). Actions Taken Key actions to be undertaken under the program include: •• Introducing normative free power requirements for agriculture and incentivizing efficient uses of power. •• Segregating agricultural feeder lines and using the agriculture feeder data for subsidy calculation. •• Introducing 100 percent feeder metering. •• Introducing distribution meters. To improve targeting of the power subsidy, the state government developed a Strategy Paper to imple- ment a scheme that would gradually optimize power supply to agricultural producers. The option selected was to restrict the power supply to agricultural producers as per the “normative supply hours” requirements to ensure required irrigation of the zone. A detailed study by Punjab Agriculture University analyzed electrical tube well operating times for groundwater for different seasons and crops to determine normative supply hours. Based on these recommendations, the Department of Power issued notifications in 2015 and 2016 on the schedule of power supply to the agricultural pump set connections in the state for different crops and seasons. The power supply hours are followed, but keeping in view weather conditions such as drought, exces- sive rains, floods, or other factors beyond the control of Punjab State Power Corporation Limited (PSPCL), supply hours can also be modified so that farmers’ crops do not suffer. The power supply hours to vegetable, floriculture, and horticulture farming may vary according to crop and seasonal requirements. Direct Benefits to Replace Subsidies Aligned with the power subsidy targeting under the  program, the Cabinet of the State of Punjab approved a new pilot scheme on Direct Benefit Transfer for Electricity for agriculture consumers on January 24, 2018. A comprehensive public awareness campaign was rolled out in advance to facilitate implementation of the selected agricultural power subsidy targeting plan. The aim was to sensitize water users on the urgent need to conserve water and to motivate the public to reduce water consumption. The target audi- ences were mainly farmers, village panchayat (council) members, agricultural employees, general vil- lagers, local municipalities, and students. Key messages of the campaign included (a) using suitably sized pumps; (b) avoiding water wastage; (c) storing water; and (d) avoiding overirrigation. Governance in Irrigation and Drainage Appendix 2 53 Under the scheme, a cash subsidy would be paid directly to the bank accounts of 990 farmers (on six rural feeders) in advance for the consumption of electricity, to the amount of INR 50,000 a year. The farmers, participating voluntarily, would then be metered. If the farmers saved on their electricity bill through prudent water consumption, they would be allowed to retain the subsidy, minus the bill amount. The scheme will help curb wasteful energy consumption, save precious groundwater resources, and rationalize the subsidy pay-out by the Government of Punjab. The benefits of the pilot were explained to the farmers, who voluntarily participated.  The PSPCL will collaborate with Abdul Latif Jameel Poverty Action Lab (J-PAL) South Asia and the World Bank to evaluate the pilot results. Solving a Complex Challenge Overall, ADB support for power sector reforms and technical measures to improve power distribution have helped control the power subsidy requirements. While the state’s overall spending on power sub- sidies has increased since FY2014, this is primarily the result of a greater number of agricultural electric- ity consumers, the subsequent increase in energy consumed, and the jump in subsidy payouts in FY2017 and subsidy arrears from previous years. Overall, the subsidy per hectare of gross cropped area decreased from INR 6,428 in FY2013 to INR 6,157 in FY2016. The average unit rate for the subsidy payout for agri- cultural consumption declined by 13.7 percent from ₹ 5.1 per kilowatt-hour to ₹ 4.4 per kilowatt-hour in this period. Further net benefits are expected in the PHOTO A2.7 Farmer in Punjab coming years with expected further outreach of these ­ programs. Under the ADB program, 19.6 percent of agricultural power consumers have been metered (268,733 out of 1,368 million consumers). Despite this encouraging result, the state government faces considerable opposi- tion from FOs on tube well metering. Persuading farmers to move forward with these changes remains challenging (ADB 2018). Apprehensions persist, mainly around the reliability of receiving cash subsidies instead of free power; the skewed benefits, given that not all farmers (especially small and marginal farmers owning less than a hectare) have electric tube well connections; and a suspi- cion that this is the first step toward outright removal of the subsidy. Is Demand Management a Realistic Approach? Water—being intrinsically linked and cross-cutting across almost all sectors—requires broadened approaches to finding solutions, including from the non-water project ©Ray Witlin / World Bank. Further permission required for reuse. perspective. The impacts of one user on the other cannot 54 Governance in Irrigation and Drainage Appendix 2 be tackled with sector specificity. Opening new horizons is essential to consider how one user can ben- efit another, or to highlight trade-offs between users. Fiscal reforms, particularly when tackling sensitive issues such as rationalizing power subsidies (as attempted in Punjab), is challenging. Introducing measurements and replacing subsidies with direct benefits cause resistance from farmers, who may be more concerned with immediate benefits. Power and land distribution asymmetries further compound the understanding of who truly gains from changes to the status quo. Demand management has the potential to be highly effective if designed with strong stakeholder partic- ipation, long-term commitment, and, critically, political ownership. A policy-based lending approach that requires specific policy actions to trigger release of subsequent tranches of financing provides an effective instrument. As with any public resource management program, the introduction of direct benefits to replace subsi- dies can be tricky and requires robust public awareness campaigns. Perhaps most challenging is the marrying of concepts across sectors and placing equal emphasis on the socioeconomic analysis of stake- holders, to develop a suitable awareness campaign and set of incentives. With the Punjab Development Finance Program, the state government has demonstrated high political commitment to bring about essential but difficult reforms despite the interruptions caused by the state election, turnover of key government officials, and political sensitivities and vested interests. References ADB (Asian Development Bank). 2014. “Punjab Development Finance Program: Report and Recommendation of the President.” ADB, Manila, the Philippines. ADB (Asian Development Bank). 2018. “Punjab Development Finance Program: Progress Report on Tranche Release.” ADB, Manila, the Philippines. Gulati, A., R. Roy, and S. Hussain. 2017. Getting Punjab Agriculture Back on High Growth Path: Sources, Drivers and Policy Lessons. New Delhi, India: Indian Council for Research on International Economic Relations. Khanna, R. M. 2018. “‘Dry’ Punjab Draws 1.5 Times the Water that Goes in Ground.” Tribune, August 10, 2018. https://www.tribuneindia.com​ /news/archive/punjab/-dry-punjab-draws-1-5-times-the-water-that-goes-in-ground-635178. Governance in Irrigation and Drainage Appendix 2 55 Mali: Office du Niger Agency: Transfer Case 9.  of Land and Water Functions to Semi-Autonomous Agency MAP A2.10 Office du Niger Agency, Mali Value chains •• Rice •• Onions •• Vegetables •• Cotton (prev.) To local, urban, anddistant markets Water infrastructure •• 80,000 ha of moderninfrastructure •• 1930s’ gravity canal scheme •• Markala diversion works onNiger River •• Five zones apart from privatizedsugar estateValue The Office du Niger scheme in Mali has been hailed as an out- Water management standing success of IMT after three decades of gradual reform (map A2.10). The reforms entailed a heavily donor-funded green •• Performance contract revolution package, the empowerment of settlers by means of betweengovernment, office du cooperatives and rice mill associations, and the thorough reha- Niger,and farmer reps bilitation of the canal network during the 1980s and 1990s. •• Variety of (dys) functional The thrust of the reforms accelerated after the collapse of the userorganizations at local level Traore regime in 1992 and refusal of the settlers to deliver their paddy crop to the office, inaugurating multiparty elections and the introduction of neoliberal policies that favored market liberalization and devaluation of the CFA in 1994. In the same year the office organization, known as a state within the state, was drastically down- sized (from 3,000 plus to about 400 staff), and a radical irrigation management turnover program was implemented. Today, both the production output and size of the scheme is larger than ever before. 56 Governance in Irrigation and Drainage Appendix 2 Despite the success of the reforms, a number of pernicious challenges have remained unaddressed. Recent efforts to establish effective and sustainable WUAs have floundered and resulted in a deadlock and confusing situation at ground level. In addition, recent massive investments by foreign companies in the expansion of the Office du Niger threaten to undermine the production successes of the past. The anticipated expansion of the scheme will result in increased competition over water, making the estab- lishment of effective, inclusive, and sustainable WUAs capable of dealing with increased water scarcity paramount. Rather than a one-size-fits-all approach, this case study is going to argue for a context-spe- cific, diversified approach toward the establishment of effective user organizations. Incremental Reforms and Drivers of Change Various drivers for the ultimately successful reforms can be identified with hindsight. Steady donor pressure, starting in 1978, with later successor initiatives in 1982, and between 1996 and 2002. The mix of pressure and financial support for a gradual but steady rehabilitation of the scheme’s infra- structure proved pivotal in overcoming technical impediments to increased cropping intensities and production. The 1992 political regime change (a shift to multiparty democracy and the adoption of macroeconomic neo- liberal policies) and, in particular, the crop liberalization combined with tenure reform offered the right mix of tenure security and opening up of market links to allow most farmers to convert irrigated production from prison-like conditions into an economically attractive proposition. This shift in policy also allowed previ- ­ ecognized irrigated com- ously illegal irrigated perimeters (the so-called hors cashiers) to become legally r mand areas, expanding the total command area from around 60,000 to 80,000 hectares in the mid-1990s. The very fact that most donor support inside the scheme (both technical and institutional) was offered through bilateral donors meant that the scheme as a whole became a field laboratory for different kinds of technical rehabilitation and institutional development approaches. The French, the Dutch, and the Germans (under a European Union [EU] banner) all applied improvement approaches, resulting in a diversified technical and institutional irrigation-scape. It also meant that the long-term reforms were incremental and showed that one could learn what worked best by comparing the different field labora- tories of donor-driven improvement processes. Tripartite Zonal Performance Contracts and the Missing Link at Village-Tertiary Level While the tripartite, three annual performance contracts spell out at zonal level which objectives must be attained on the part of government, Office du Niger, and the farmers, there is no effective link at the village-tertiary unit level, despite this being the very level where collective action with regard to both water distribution and maintenance has to be made effective. See figure A2.8. At village and tertiary level, there have been two initiatives to establish some form of user organization beyond the existing village cooperatives. In practice, what users do when confronted with an opera- tional or maintenance issue is to mobilize informal leadership. Governance in Irrigation and Drainage Appendix 2 57 FIGURE A2.8 Postreform Accountability Relations in Context of Tripartite Performance Contracts, Mali Government of Mali ON board of directors Performance contract steering committee Three general delegates, Representatives of Ministry of one of them also on ON board ON general manager Finance and Other Ministries Three zonal delegates co-manage with zone manager; Zonal manager scheme-level meeting elects and staff three general delegates Members of Zonal meetings of committees for Members of five Manager of village delegates maintenance of zonal committees secondary elects secondary canals on farming licenses canals (189, schemewide) and land allocation 22,000 heads of holding in 200 villages elect three delegates per village Source: Aw and Diemer 2005, 81. Note: ON = Office du Niger. Stakeholder Roles and Responsibilities in I&D Management The roles of the stakeholders are outlined in relation to four perspectives regarding water management: •• Farmers (both in schemes and individually). •• WUOs (framing boundaries and systemic linkages—roles, responsibilities, legal and financial flows) at the levels of water user groups (WUGs), WUOs, and apex bodies, plus links to IWRM bodies. In the case of Office du Niger, we focus on the tripartite performance contracts that spell out O&M targets at zonal level. •• Line ministries and regulatory bodies (government and Office du Niger). •• Private sector (for example, PPPs, service providers for water and agriculture, value-chain entities). 58 Governance in Irrigation and Drainage Appendix 2 Institutional Design in Context of Case Analysis Framework Rather than a one-size-fits-all approach, one needs to think about an inclusive process that pays tribute to what works at the local level. Certain drivers work in favor of such a tailormade, context-specific approach. The office has benefited from having a relatively ample water supply (because the system was over dimensioned to start). With the on-going expansion of the scheme this will change, providing incentives at farmer level to organize and instigate effective forms of collective action to deal with water scarcity situations (Wade 1987). As in many other large-scale canal irrigation schemes in Africa, private investors are cherry-picking land inside the scheme’s perimeter, engaging in a variety of contract farming arrangements. While these arrangements and the associated agro-processing development may benefit farmers who have not been included in the contract farming arrangement (through opening up new market opportunities), it is also likely to introduce new inequities in terms of water distribution, as private parties tend to receive pref- erential treatment on the back of their monetary buying power through the managing agency. This development calls for a context- and scheme-specific approach toward the arrangement of O&M responsibilities. At river basin level, a similar challenge of competition over scarce water is revving up. This means that the Office du Niger’s water abstraction will come under scrutiny, inviting new initiatives to engage in innovative forms of water savings and increased irrigation performance. References Aw, D., and G. Diemer. 2005. Making a Large Irrigation Scheme Work: A Case Study from Mali. Washington, DC: World Bank. Wade, R. 1987. “The Management of Common Property Resources: Collective Action as an Alternative to Privatisation or State Regulation.” Cambridge Journal of Economics 11 (2): 95–106. Governance in Irrigation and Drainage Appendix 2 59 Mozambique: IMT and Contract Farming Case 10.  in the Chókwè Irrigation System Overview Farmer proles The Chókwè Irrigation System is a large-scale open canal irriga- tion system (26,000-hectare command area) for monoculture •• Family sector: approx. 11,000 rice production, developed under Portuguese colonial rule in the farmers, av. 0.9 ha early 1950s as the Colonato do Limpopo. The system is located •• Private sector: approx. 900 about 200 kilometers northeast of Maputo. The scheme takes its farmers, average 6.6 ha water from the Limpopo River at the Macarretane diversion weir, •• Companies: approx. 15, av. 350 ha at which water enters the canal system by gravity. In 1997, the state agent responsible for the scheme’s management was replaced by a parastatal, the Hydraulics of Chókwè Public Value chain Company (HICEP). This involved a reform in which old buildings were sold, staff numbers reduced, and water management •• Rice responsibilities transferred to WUAs, or Associações dos Contract farming with a foreignowned Regantes. These were established at the level of the secondary rice processing factory canal, or Distribuidor. In 2005 the Government of Mozambique supported a foreign Water infrastructure agribusiness investor in buying and rehabilitating a rice process- ing factory in Chókwè. The investor developed a contract farm- •• 26,000 ha open canal scheme ing program to increase the paddy inflow into the processing with max. 7,500 ha cropped plant. This led to a far-reaching rural transformation: increasing •• Former Portuguese colonial the cropped area and total production while also affecting water scheme of 1950s management practices. In 2013 the company withdrew from the •• Direct diversion from Limpopo area after having struggled to make a profit from the operation River 50 sectors (av. 280 ha) and being confronted with a flood that damaged the irrigation system and the factory. The case describes this period between 2005 and 2013. Water management Historical Path •• Parastatal and WUA The current Chókwè Irrigation System was originally developed comanagement in the 1950s as a settlement scheme for Portuguese colonizers, •• Private contracting company under the name Colonato do Limpopo. Mozambican families pressures parastatal were evicted from the fertile Limpopo Valley. In 1977, after 60 Governance in Irrigation and Drainage Appendix 2 independence and inspired by Marxist-Leninist ideals, the scheme area was transformed into the largest state farm in the country: the Complexo Agro-Industrial de Limpopo (CAIL). The creation of CAIL meant that a single state organization took control over all aspects of agricultural production within the bound- system, with the exception of managing the canal system, which was brought aries of the irrigation ­ under the control of an irrigation agency called Sistema de Regadio Eduardo Mondlane (SIREMO). In 1983 CAIL was divided into 10 smaller state enterprises, each with an area of approximately 1–2,000 hect- ares. In 1984 the Mozambique Liberation Front (FRELIMO) moved toward policies aimed at stimulating cooperative agriculture, creating incentives for the establishment of agriculture cooperatives of a more ­ smallholder farmers and farmers’ associations. In 1986, 436 private farmers occupied 4,600 hectares, with an average of 10.5 hectares each. These farmers were obliged to follow the agricultural planning for irrigation system and had contracts with the government stipulating production targets and the per- the ­ centage of production to be sold to the state. In parallel, 14,000 peasant farmers had received between 0.5 and 1 hectare each, and by 1990, all the state farms had been dismantled. The peace treaty of 1992 brought an end to a civil war that had lasted almost 20 years. The following political democratization and economic liberalization gave a new impetus to Mozambique’s economic development. In 1993, Chókwè’s cooperatives were transformed into farmers’ associations, creating three production sectors: the company sector (which replaced the former state sector) with farms from 40–400 hectares; the private sector, with farm sizes of 4–40 hectares; and the family sector (farms up to 4 hectares). In 1997 SIREMO was heavily reformed and downsized to become the parastatal HICEP. Associações dos Regantes (or WUAs) were established to become responsible for water management at the level of the secondary canal and below. Low Utilization and Productivity The 26,000-hectare equipped area had not been cultivated completely for a long time. Between 2001 and 2006, only about 10 percent of the area was used for rice production, the result of a combination of challenges: •• Poor state of the I&D network. •• Very limited access to agricultural inputs (seeds and fertilizers). •• Farmers’ lack of finance to investment in capital-intensive production. •• Unreliable markets (with fluctuating prices, long distances, and unreliable buyers). •• Salinization of large areas. In 2007, fewer than 40 percent of smallholders produced rice, while others preferred to grow vegetables or maize, often on just a small part of their land. While rice production is not profitable for smallholders in Chókwè, for larger-scale rice production it is. Other crops, however, are on average 60 percent more profitable. The difference is mainly attributed to higher fertilizer use, a substantially higher labor alloca- tion, and more secure access to water. Governance in Irrigation and Drainage Appendix 2 61 Irrigation Management Transfer and Contract Farming In the reforms of 1997, WUAs became responsible for water distribution and the maintenance of the irrigation infrastructure from the secondary canals downward. HICEP remained responsible for water distribution and maintenance of the primary infrastructure. When producer associations were ­ dissolved, WUAs took an important role in the coordination of rice production. They also formed an essential link with HICEP and external investors with regard to (re)allocations of land in some of the tertiary units. However, HICEP still plays a central role in the process of irrigation management and the coordination of production down to the tertiary level, making WUAs auxiliary bodies to HICEP, with little autonomy and decision-making power in the O&M of the system. Between 2003 and 2007, the Investment Coordination Center of Mozambique developed a strategy to attract private investors into the rice sector, an initiative that attracted a British investor. The green revolution strategy (2007) also encouraged private sector–led development, aiming (among other things) to end rice imports, which were running at an annual value of about US$70 million. The inves- tor acquired the old rice processing facility, previously operated by a state company that had gone bankrupt. The rationale of investment was creating a stable market link for local producers. Even though the investor was not looking for quick profits, it did aim to operate profitably. The ­processing unit can break even at 10,000 tons per year, although its full capacity is double that amount. To source enough rice, the investor tried to get 14,500 hectares to run as a nucleus estate, but the government eventually obstructed this attempt. The investor then made deals with WUAs to use part of the land in their areas, which would be vacated by farmers who had earlier been allocated the land. In exchange, farmers were supported in their remaining field with mechanized land leveling, plough- ing, seeding, and harvesting, and provided with fertilizers and improved seeds. See photos A2.8 and A2.9. After two years these contracts were not renewed, and the investor changed its strategy to work- ing with individual farmers through contract farming arrangements. Farmer who engaged in these contracts were called PHOTO A2.8 Contour Bunds Constructed with associated producers and signed c ­ ontracts that Highly Sophisticated Laser-Level Machinery committed them to cultivating their land with the ­ obligation to: •• Prepare the land with equipment approved or provided by the investor. •• Exclusively use seed varieties approved by the investor, sown at recommended densities. •• Apply fertilizers and pesticides in quantities rec- ommended by the investor. ­ ecommended •• Follow good agronomic practices as r ©G. J. Veldwisch. Used with the permission of G. J. Veldwisch. by the investor. Further permission required for reuse. 62 Governance in Irrigation and Drainage Appendix 2 PHOTO A2.9 Harvesting the Field of an AP with a Obey the recommendations and instructions pro- ••  Combine Harvester vided by the investor during the season. Sell the produced rice at the price determined by ••  the investor for the season. In return, the investor guaranteed to buy the whole harvest at a fixed price level, although adjustable to several quality characteristics stipulated in the con- tract. Through job interviews the investor selected 229 associated producers, of which 50 were women. Those who did not have a minimum of 8 hectares were allo- cated large pieces of land by HICEP to be used for con- ©G. J. Veldwisch. Used with the permission of G. J. Veldwisch. tract farming. With an average of almost 15 hectares, Further permission required for reuse. the associated producers occupied an area of about 3,400 hectares. The investor’s exclusion of farmers with fewer than 8 hectares was informed by the optimization of machine use, and on the understanding that small farmers would keep a substantial share of the harvest for themselves. The investor also stepped in as a broker toward HICEP in order to guarantee adequate water delivery and drainage services for its associated producers. To that end, the payment of the water fees collectively through the investor’s accounts helped. According to the investor, the average paddy yield on AP fields was 4 tonnes per hectare, substantially higher than the 2–3 tonnes per hectare that these farmers pro- duced before. In addition to the contract farming scheme, the investor produced rice seeds on 600 hect- ares (see figure A2.9). FIGURE A2.9 Cropped Areas in Chókwè Irrigation System, 2004–10 Seasons 9 8 7 Area (1,000 ha) 6 5 4 3 2 1 0 9 8 6 10 5 7 /0 /0 /0 /0 /0 / 09 08 07 05 06 04 20 20 20 20 20 20 Actually cropped area Plan Rice Other Total Source: Veldwisch 2015. Note: CIS = Chókwè Irrigation System. Governance in Irrigation and Drainage Appendix 2 63 Roles and Responsibilities in I&D Management from Five Perspectives Perspective 1: Farmers •• Small farmers versus associated producers. •• Small farmers were moved off their land without much process, but likely not losing in total area of land. •• Most of the associated producers made good profits, but were also taking big risks, with some incurring debts. •• For associated producers, a strong reduction of room for management decisions. Perspective 2: WUA Leaders and other local elite used the WUA to gain access to the deals with the investor and oust small farmers from the prime land. Perspective 3: Irrigation agency •• Increase of irrigated area and production appreciated. •• Reliable partner in the investor, with a large number of emerging farmers. •• Increase in amount of water fees paid. •• Struggle to adequately supply water and keep drainage in good condition. Perspective 4: Line ministries and regulatory bodies •• Increase of irrigated area and production appreciated. •• “Breadbasket of the nation.” Perspective 5: Private sector The investor took on a large share of the risks Reference Veldwisch, G. J. 2015. “Contract Farming and the Reorganisation of Agricultural Production within the Chókwè Irrigation System, Mozambique.” Journal of Peasant Studies 42 (5): 1003–28. 64 Governance in Irrigation and Drainage Appendix 2 Nigeria: IMT and PIM in the Kano Case 11.  Irrigation Scheme MAP A2.11 Tiga Dam and Kano River Scheme, Nigeria Water Management Arrangement •• Irrigation and drainage (I&D) agency supplies bulk water •• Private sector contracted for heavy-duty maintenance services •• Water user associations (WUAs) at secondary level Scheme Overview Farmer Profiles The Kano River Irrigation Scheme (KRIP) is located in Northern Nigeria in Kano State, approximately 30 kilometers outside of •• Average plot size: 0.8 ha the state capital, Kano City (map A2.11). Kano is the second-­ •• Size range: 0.1 ha to 20 ha largest city in Nigeria with a population of 3.6 million. KRIP •• No. of farmers: 18,000 development started in the early 1970s with a planned area of 22,000 hectares in phase 1, of which 13,227 hectares was imple- •• Women farmers: 10% mented in various stages until 2008. Rainfall is 697 millimeters •• Business and cash-income per annum, falling in four months of the year (June to September). orientation cropping is fully irrigation-dependent while wet sea- Dry season ­ son irrigation is supplementary. The main crops grown are rice and horticultural crops (tomatoes in particular), supplying local urban and distant markets. Value Chains Scheme OMM, up to the time of the project intervention, was the •• Rice responsibility of the government I&D agency, the Hadejia Jamare •• Tomatoes River Basin Development Authority (HJRBDA), which operated the main supply from Tiga Dam to the scheme since its establish- •• Grains ment in 1976. The authority had a mixed water service provision •• Vegetables and agricultural support mandate prior to the institutional To cannery and urban and distant reform process, including agro-mechanization, ad hoc fertilizer, markets and seed distribution. Governance in Irrigation and Drainage Appendix 2 65 Key Problems and Challenges Water Infrastructure The dominant problems were that farmers were not getting an adequate and reliable supply of water •• 1970s’ gravity canal scheme despite the available resource in Tiga Dam, and the •• 14,000 ha of modernization scheme condition was in perpetual decline. There •• Tiga multipurpose dam supplying were serious issues of top-end and tail-end inequity, irrigation scheme and Kano City and farmer representation was nominal through weakly established WUAs. Despite these major chal- ­ arkets, KRIP retained a distinctly commercial lenges and aided by proximity to a major city and related m farming character, and was viewed as one of Nigeria’s better-functioning large-scale schemes. The main causes of poor performance were attributed to the following. Dilapidated infrastructure over 30 years old with limited maintenance since inception. While the con- crete-lined canals were still reasonably functional, drains and control structures were dilapidated. The original Begeman gates for flow control were in poor condition or inoperable. The I&D agency had a mixed agricultural and water supply mandate, was top-down, administratively weak, and under resourced. Funds received from government were not earmarked for OMM and were used for various purposes (including subsidized agricultural inputs) subject to influence by political campaigns. Maintenance was limited to crisis responses of canal breaches or flood damage, and routine mainte- nance was absent. ISFs were not ring-fenced. By law, all revenue collected from activities on state-owned assets had to be remitted to central treasury. A return flow of operational funds was meant to follow annual OMM bud- geting but was typically a fraction of the amount that was requested, and late in arriving. Low ISF collection rates and low incentive to pay, given poor service to farmers. Farmers paid a nominal ISF, equivalent to approximately US$15 per hectare per season, less than a quarter of the estimated amount required for adequate OMM. Fee collection rates of approximately 30 percent to 40 percent were reported. Inadequate legislation for robust water management institutional arrangements. Water law was antiquated with no provision for decentralized water management, participatory irrigation management (PIM), IMT, compulsory membership, water user representation, or fee retention. A draft Water Resources Bill to modernize water management nationally, including IWRM provisions, was under debate for more than 10 years, but at the time of the intervention the bill had not progressed. The draft included no specific enabling provisions for improved irrigation water management. ­ Heavy infestation of typha grass in canals and drains. Dense stands of typha grass reduced canal flows, blocked drains, increased sedimentation, and provided ideal nesting sites for quelea, a major cause of crop losses. Removal required heavy machinery at high costs. 66 Governance in Irrigation and Drainage Appendix 2 Approach and Solutions PHOTO A2.10 Kano River Irrigation Scheme (KRIP) The Government of Nigeria identified the strategic and economic importance of irrigation development across the country, particularly in the more arid, less economically developed northern states. Scoping studies were conducted by the Food and Agriculture Organization of the United Nations in 2004. Some years later the government, represented by the Federal Ministry of Water Resources, requested the World Bank to provide technical and planning support. This led to an extended collaboration over five years, during which a set of strategic areas for intervention were identified, leading to the Transforming Irrigation Management in Nigeria (TRIMING) program, which included KRIP. The main strategic interventions that led to the modernization and reform plan for KRIP are first summarized and then expanded below. •• Reform of the role of the River Basin Development Authority (RBDA) (I&D agency). •• IMT to WUAs at secondary canal level and PIM in the form of WUGs at tertiary level. •• Institutional reform opportunistically included in the new Water Resources Bill (passed by the House of Representatives in 2018 and awaiting Senate approval at time of publishing). •• Substantial investment in organizational development. •• Private sector contracted for supply and main canal ©Jonathan Denison. Used with the permission of Jonathan maintenance and desilting. Denison. Further permission required for reuse. •• Agricultural services separated from water supply services. •• Scheme infrastructure modernization, with attention to revised hydraulic and organizational boundaries. Governance in Irrigation and Drainage Appendix 2 67 PHOTO A2.11 Beneficiaries of the Kano River Irrigation Scheme ©Jonathan Denison. Used with the permission of Jonathan Denison. Further permission required for reuse. Transformation Strategy The strategy for scheme operational and financial sustainability was based on the following: •• Institutional realignment and definition of new functional roles, with the RBDA taking on the role of bulk supplier and operator, providing water to 26 new sector-level WUAs located at secondary canal level. •• New laws and regulations at federal level to ensure a legal basis for WUA establishment (including compulsory membership) and to provide a legal basis for fee retention at WUA and scheme level to finance ongoing OMM. •• Organizational capacity development for OMM at the scheme in support of the RBDA (I&D agency) as the operator for the bulk system, multiple WUAs at secondary level (700–1,400 hectares), and WUGs at tertiary level (30–100 hectares). •• Private sector contracted for maintenance of the supply and main canal and drainage system, requiring heavy machinery for removal of typha grass, canal works, and desilting activities. •• Explicit and legally supported operator and WUA service agreements established through service delivery contracts between the RBDA and the WUAs, and the RBDA and the maintenance contractor. •• Investments in the agricultural complex through private sector support to ensure increased produc- tivity and profitability to generate income and thereby ensure that the irrigation service fees were both sufficient for the OMM needs, and affordable for the farmers. This also supported the attitudi- nal shift needed among farmers from the mixed (agricultural and water) mandate of the prior orga- nizational functions to the RBDA and the newly established WUAs responsible for irrigation service provision only. 68 Governance in Irrigation and Drainage Appendix 2 •• Infrastructure redesign and modernization to ensure technical and organizational alignment of the secondary-level hydraulic units. This included canal and control structure modernization, and, importantly, the installation of measuring points at which the new bulk water supply entity would deliver to the newly established secondary-level WUAs. These hydraulic units were designed for between 700 and 1400 hectares, to ensure sufficient size to employ full-time administration and technical personnel, but remain small enough for meaningful representation and farmer access to the WUA office and personnel. •• Annual OMM budgets were based on asset and personnel assessments, and affordability to pay was assessed on realistic anticipated yields and market evaluations. ISFs were expected to increase from US$15 to US$45 to US$60 per cropping season, which was evaluated as affordable in discus- sions with farmer representative groups, given wider agricultural and organizational support to the scheme organizations (water service security and reduced risk) and production and marketing sup- port to the farmers through private sector mobilization. Attitudinal Change through Consultation and Information Exchange The RBDAs are powerful regional organizations in Nigeria with a long history of water-related develop- ment, playing a central role in planning and managing investments in relation to dams and irrigation, as well as in operations, including revenue collection. Proposed changes to institutional arrangements required a shift in the wider understanding of their role, and inevitably a change in power relations and the financial control of resources. Key elements of the process leading to attitudinal change at all levels included: •• Mobilization of ministerial support, through two consecutive governments, by the Nigerian lead personnel, supported by the World Bank project leadership. ­ •• Selection of capable senior Nigerian personnel on the counterpart team. •• Multiple workshops at federal, regional, and scheme levels, led by the Nigerian counterpart team  over a period of two years in all participating states and schemes. This was supported by  a range  of technical specialists, thereby introducing other African experiences from fur- ther  afield, leading to the collaborative assessment of problems and development of solutions. •• Visits to other African countries where irrigation reform had been carried out, such as Mali, Senegal, and South Africa. •• Repeated engagement with farmer representatives and RBDA personnel at scheme level, defining new roles and functions in an iterative process of refinement. •• Mobilization and support to dynamic counterpart staff, to address resistance to change and achieve attitudinal shifts in support of the transformation agenda. Governance in Irrigation and Drainage Appendix 2 69 Building on Existing Institutional Arrangements WUA organizational development interventions were initiated in 2006–07 by the Federal Ministry of ­ Water Resources (FMWR), Irrigation Department (figure A2.10). A three-tiered WUA structure was intro- duced using cooperative legislation at: •• Unit level (30–50-hectare WUGs). PIM arrangements were nominally introduced at the tertiary-level WUA, responsible for maintenance of the earthen canal hydraulic unit. •• Secondary-level blocks (200–2,000 hectares, later resized organizationally and in the engineering design to 700–1,400 hectares). •• Scheme level, represented by an Apex WUA. While these initial attempts (prior to the transformation initiative) at institutional reorganization achieved relatively little in terms of improved irrigation water services at farm level, they were valuable in introducing ideas about new ways of organizing and operating. The RBDA irrigation personnel and farmers were aware of fundamental principles of PIM, providing an important platform for the reform process. FIGURE A2.10 Institutional Arrangement for WUA Apex WUA SCHEME LEVEL SECONDARY CANALS & OUTLET STRUCTURES Intake WUA Intake WUA I-WUAs comprising ±100-200 farmers each TERTIARY CANAL U-WUAs comprising Unit Unit Unit Unit Unit Unit Unit ±300-100 farmers each WUA WUA WUA WUA WUA WUA WUA Source: Original compilation. Note: WUA = water user association. 70 Governance in Irrigation and Drainage Appendix 2 Changing the Dual Agro-Water Mandate to an Irrigation Water Services Mandate The RBDA and the WUAs previously had the dual mandate of being responsible for water service issues and for facilitating agricultural support. This included the organization of subsidized seed and fertilizer, input warehousing, and the coordination of marketing. The Apex WUA acted mainly in a liaison and conflict resolution capacity for lower-tier WUAs, and operational involvement was limited to seasonal allocation decisions with the RBDA. The tertiary-level WUAs were responsible for ad hoc maintenance and water-sharing activities at tertiary level. The modernized arrangement mandate was limited to irrigation water functions only, shown in the blue box in figure A2.11. The prior three-tier WUA structure was maintained in principle, but new responsibili- ties were defined with government teams, farmer representatives, and RBDA personnel over 18 months. In principle, water responsibilities were viewed is an input to the agricultural enterprise and were facili- tated by the RBDA, maintenance contract, WUA, and the WUG. The agricultural functions (in the green box in figure A2.11) were separately assigned to cooperative structures based on crop type. PIM and IMT were key principles included in the institutional setup at secondary canal level, reflecting devolution to the lowest practical, and financially sustainable, level. FIGURE A2.11 Organizational Mandates Typical situation on Organization irrigation schemes for water and farming functions One organization for One or more infrastructure and crop production groups water management or programs • Voluntary • Water rules • responsive • Water allocations • Flexible • Maintenance Separate • Opportunistic • Water fees out the organizational • Diverse • Record keeping functions • Individual or collectives • Land register • JV partnerships • Outsider entry point • Informal partnerships • Coordination • Mentoring Compulsory Optional membership membership Authoritarian Experimental administrative These are different entrepreneurial rules-based organizational learning cultures Source: Original compilation. Note: JV = joint venture. Governance in Irrigation and Drainage Appendix 2 71 Redefinition of Key Roles: Legal Reform and Institutional Bricolage A legislative intervention was made to the draft Water Resources Bill, including two new regulations (WUA and irrigation scheme regulations). These were included in the bill at the project’s initiative to enable a sound legal basis for effective scheme management in future, by properly enabling IMT and PIM. This process was facilitated by engagement with and active support from the minister. The bill was passed by the House of Representatives in 2018 and was pending final Senate approval at the time of publishing. While this legislative intervention is expected to have longer-term impact, the project had to rely on interim measures to enable immediate action. This was achieved through facilitating (a) a Statement of Sector Policy by the minister; and (b) a Delegation of Authority for Transfer of Irrigation and Drainage Facilities to Water User Associations, both based on the extant legislation. These interim measures established rights of use of infrastructure by WUAs, devolution of financial control to the scheme, and the right to collect and hold a significant portion of the water use fees at WUA level. The interim legal interventions, particularly financial ring-fencing at scheme level, were imperfect, but were all that could be achieved within the project cycle. They enabled the transformation process to make a significant step to a modernized management arrangement. The project proceeded with the interim legal measures that enabled the same approach, albeit with lesser legal specificity and clarity, and in anticipation of the bill being promulgated into law in future (final arrangement shown in figure A2.12, facilitated by interim legal provisions during the project). The modernized arrangement included a revised role for the RBDA, from operator of all levels of the FIGURE A2.12 Revised Institutional Arrangements for WUAs and Irrigation Scheme Regulations RDBA O&M • Dam operation REG 2 • Dam maintenance Irrigation scheme • Supply canal regulations RBDA <-> • Main canals / drains WUA relationship • TRIMING trains Bulk water supply “Revenue” = RBDA agreement billinh @ point of supply Point of supply (sector/intake) Payment to RBDA for bulk water @ point WUA O&M REG 1 of supply by Reg. 2 • WR ACT and Regulations WUA Regulations • Infrastructure transfer agreement • TRIMING trains • TRIMING supports Year 1 to 3 Infrastructure transfer Internal finances of legally agreement established WUA for own (secondary and tertiary) operations at secondary / tertiary are dealt with by Reg. 1 Source: Original compilation. Note: RBDA = River Basin Development Authority; HJRBDA = Hadejia Jamare River Basin Development Authorit; TRIMING = Transforming Irrigation Management in Nigeria; WUA = water users’ association. 72 Governance in Irrigation and Drainage Appendix 2 scheme, to one focused on reservoir operations, and OMM of the supply and branch canals (figure A2.12). Water was delivered to the secondary-level WUAs, which were bulk water purchasers responsible for internal distribution. This facilitated the WUA entities to be legally established, retain fees, engage in contractual agreements with the RBDA as bulk services provider, and enforce nonpayment of ISFs by farmers. The revised arrangement led to the WUAs being sized to be finan- cially viable (700–1400 hectares), yet remain decentralized enough for meaningful local participa- tion, sufficient degree of farmer control over decision making, and the employment of permanent administrative and technical staff for operations. Engineering Redesign in Support of Organizational Functions The engineering design was revised interactively so that sectors were combined or divided to arrive at WUAs of approximately 700–1,400 hectares. Legal agreements were structured at the point of supply (red dot) between the RBDA (bulk operator) ­ gure A2.13. and the WUA responsible for OMM within the resized sectors (irrigation blocks). See fi Summary of Key Functions from Six Perspectives The roles of the stakeholders are outlined in relation to six viewpoints on water management. FIGURE A2.13 Scheme Organizational Levels Scheme organizational levels Reservior RDBA O&M WUA REG. 2 • Dam operations Dam Bulk water supply • Dam maintenance agreements • Supply canal RBDA <–> WUAs Supply canal • Main canals / drains • TRIMING trains MC left MC right Point of supply (sector/intake) SC 1 SC 14 WUA O&M • WR act and regulations Sector 14 Sector ... Sector ... Sector ... Sector 2 Sector 3 Sector 1 • Infrastructure transfer agreement • TRIMING trains • TRIMING supports year 1 to 3 WUA 1 WUA 2 WUA 3 ................. WUA 14 WUAs = 800–1,200 ha in size Source: Original compilation. Note: RBDA = River Basin Development Authority; TRIMING = Transforming Irrigation Management in Nigeria; WUA = water user association. Governance in Irrigation and Drainage Appendix 2 73 These are listed and shown in figure A2.14. 1. Farmers (both in schemes and individually). 2. WUOs who framing boundaries and systemic linkages (roles, responsibilities, legal-financial flows) at the levels of WUGs, WUOs, and apex bodies. 3. State irrigation agencies (such as HJRBDA). 4. Line ministries and regulatory bodies (FMWR). 5. Private sector (PPPs, service providers for water and agriculture, value-chain entities). 6. Non-irrigation users (fisher people and cattle herders). FIGURE A2.14 Functions of the Different Stakeholders 3 Federal ministry of 4 water resources HJRDBA Fisherpeople and • Dam operations cattle herders • Dam maintenance 6 KRIS RDBA KRIS irrigation KRIS WUA management team scheme executive council apex body Admin • Budgeting WUA WUA WUA • Expenditure (sector) (sector) (sector) Bulk water WUA • Auditing system (sector) maintenance Operations contract Irrigation Finance / • Main canal 2 • Typha clearing • Secondary technician admin • Main drains intakes • Secondary drains • Main canal repair OPS support • Main/secondary • WUA register Unit Unit Unit Water user Unit Unit etc. gates and equip • M&Evaluation WUG WUG WUG group WUG WUG • Social(rap/grm) WUA support F F F F F F F 5 • Org. training 1 • Irrig. training • Info development • Communication Source: Original compilation. Note: GRM = Grievance Redress Mechanism; HJRDBA = Hadejia Jamare River Basin Development Authority; KRIS = Kano River Irrigation Scheme; RAP = Resettlement Action Plan; RBDA = River Basin Development Authority; TRIMING = Transforming Irrigation Management in Nigeria; WUA = water users association. 74 Governance in Irrigation and Drainage Appendix 2 Perspective 1: Farmer involvement in WUGs •• Formulate the water register of the farmers served by the tertiary canal(s) under their responsibility and update it every year at the (sector-level) WUA. •• Distribute water to users in accordance with the scheme’s operational manual. •• Collect the fees from the farmers before the irrigation season starts (fees approved by the executive council of the scheme) and deposit them at the WUA at the sector level. •• Organize, involve the farmers, and implement the maintenance of the canals and drains at the ter- tiary level before each irrigation season starts. •• Keep a record of the days involved in the maintenance of canals and drains voluntarily provided by the farmers. •• Intervene in any water service conflict that could arise in the WUA at the unit level. •• Report at sector level on the grievances and conflict resolution presented by the farmers. •• Coordinate and distribute the compensation grants provided by the project, derived from damages in the construction of the infrastructure as established in the approved Resettlement Action Plan. Perspective 2: WUA (sector level, 700–1,400 hectares) •• Collate the unit water register of the farmers served by the sector and update it every year. The sec- tor WUAs need to include any farmers who are served directly by the distributary canal under their responsibility. •• Distribute water to the WUAs at the unit level in accordance with the operational manual of the scheme. •• Open a bank account following the agreed specifications approved by the PMU, and collect the fees from the unit WUAs. •• Prepare the irrigation scheduling before the irrigation season starts. •• Organize and involve the farmers and implement the maintenance of the distributary canals and drains at sector level before each irrigation season starts. •• Intervene in any unresolved water service conflict in the WUA at the unit level. •• Report to the apex WUAs at scheme level about the conflict resolution and grievances presented by the farmers in their sector. •• Review the implementation by the WUAs at unit level of the compensation grants provided by the project (derived from damages in the construction of the infrastructure, as established in the Resettlement Action Plan). •• Implement the grievance redress mechanism at their sector. Governance in Irrigation and Drainage Appendix 2 75 •• Organize, facilitate, and conduct the training session with the WUAs at the unit level to improve the efficiency of the system. •• Organize meetings of the WUAs at the unit level, using the facilities of the sector-level offices. •• Participate at the general assembly. •• Prepare monthly financial statements of the sector (balance between collections and the expenses). •• Respond to the observations made by external auditors of the accounts presented and resolve issues. The apex WUA would contribute to the scheme executive council in relation to the following: •• Formulate the irrigation plan of the scheme (with sector WUAs). •• Participate in the process and approve the I&D service fees. •• Manage the contractual arrangements with the maintenance contractor. •• Approve the irrigation program of the sectors and RBDA scheme team. •• Review progress monthly and address issues. •• Review the progress information presented by the WUAs. •• Review the general audit of the WUAs and report to the HJRBDA. •• Act as an entry point for outside stakeholders and disseminate information to farmers and stakeholders. Perspective 3: Government irrigation agency (HJRBDA) •• Operate the dams and distribute water to the main canals and sector WUAs. •• Participate in the negotiations of the ISF of the scheme and obtain approvals from regulatory and oversight bodies (to be decided and formulated). •• Support the scheme executive council (SEC) and the (sector-level) WUAs in their routine OMM activities, including ongoing training for O&M, financial, and other administration. Perspective 4: Line ministries (FMWR) •• Regulatory review and knowledge dissemination of the WUA establishment processes, including awareness-raising media and structured training approaches. •• Support in relation to the formalization of water rights at scheme level. 76 Governance in Irrigation and Drainage Appendix 2 Perspective 5: Private sector The private sector plays an important role in the water management functions. The modernization of Kano WUA requires the contracting of a maintenance contractor by the scheme executive council. The contractor would undertake heavy-duty maintenance activities including: •• Clearing of typha grass from waterways with a fleet of swamp boats. •• Clearing of main and secondary drains. •• Undertaking main and secondary canal repair on an ongoing basis. •• Maintaining infrastructure and equipment (including gates) on main and secondary canals Perspective 6: Nonirrigation Users The needs of fisher people and cattle herders were accommodated in the overall technical design by ensuring water provision to key locations, and cattle transit paths inside the scheme. Organizationally, interaction and conflict resolution between irrigators and herders (a major social and political issue in Nigeria) was facilitated at the Apex WUA level. Summary of Key Learnings The Kano case highlights a participative and transformative planning process that led to a jointly for- mulated and completely restructured water management arrangement and a major shift in functional roles of all key players. While the construction aspect of the modernization was still being imple- mented at the time of writing this report (2018), the attitudinal change, participative redesign, and legal transformations reported here were established, and contributed to the reform of the irrigation sector at national level. It is expected that these institutional and organizational transformations will lead to key outcomes of improved performance in terms of sufficiency, equity, and reliability; strengthen representation and fairness; and lead to long-term financial sustainability through systematic infrastructure maintenance. Key lessons emerging: •• The power of inclusive consultations over time in facilitating attitudinal shifts despite substantial ini- tial resistance to change. Extended engagement with all stakeholders over three years and the use of preexisting and familiar structures (such as the three-tier WUA arrangement) as building blocks for future arrangements, led to change. •• The importance of in-country political and technical leadership, and close collaboration with funding agency planners. In the Kano case, this involved two ministers of Water Resources, the Department of Irrigation project coordinator, and World Bank project and country leadership. Governance in Irrigation and Drainage Appendix 2 77 •• The need for quick responses to opportunities, such as those afforded by the unexpected movement of the Water Resources Bill after two years of being stalled. This prompted new WUA clauses to be inserted into the bill, and subsequent regulations drafted by the combined project planning team in a short window of time. The quick response substantially strengthened the regulatory environment. •• The importance of aligning hydraulic and organizational boundaries and functions, and the need for harmonizing engineering design with water management organizational design (Apex WUA at scheme level, operational WUAs at secondary level, and WUGs at tertiary level). •• The importance of a viable and affordable financial feedback loop (ISFs supporting OMM) based on realistic cropping plans and yields, and ring-fencing of ISFs for future use only in OMM. These were central to planning for financial sustainability into the long term. 78 Governance in Irrigation and Drainage Appendix 2 Case 12. Spain: Modernization of an Ancient Flood System—New Governance Challenges 10° O Bay of Bis cay PROJECT LOCATION Water Management ASTURIAS BASQUE CANTABRIA COUNTRY FRANCE PROVINCE CAPITALS NAVARRE Arrangement Oviedo NATIONAL CAPITAL GALICIA Santander Santiago Vitoria ANDORRA PROVINCE BOUNDARIES Pamplona INTERNATIONAL BOUNDARIES o Logrono M iñ LA RIOJA Esl a CASTILE AND LEÓN CATALONIA •• Construction started in the 13th e gr Valladolid Zaragoza Se Du ero Duero Eb ro Barcelona ARAGON century MADRID PORTUGAL MADRID •• Water user associations (WUAs) MENORCA Jar am a Taj o Toledo Valencia Palma at two levels: main system and JÚCAR IRRIGATION MALLORCA EXTREMADURA CASTILLA-LA MANCHA SYSTEM Júcar Gu ad ia na BALEARIC ISLANDS IBIZA 21 términos (villages) Mérida VALENCIA FORMENTERA ISLAND Seg ura MURCIA Med i t erra n ea n S ea •• WUA is one of the most important r ui vi Murcia da lq G ua ANDALUSIA Seville Genil in Spain ATLANTI C OCEAN IBRD 45292 | ALGERIA JANUARY 2021 This map was produced by the Cartography Unit of the World Bank Group. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of the World Bank Group, any MOROCCO judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 5° O Farmer Profiles System Overview •• Average plot size: 0.7 ha The La Acequia Real del Júcar irrigation system in Valencia, •• Size range: 0.1–10 Ha Spain, is ancient: its main canal was constructed in the 13th cen- •• No. of farmers: 29,400 tury under the reign of King Jaime I. Over 750 years the system •• Many farmers over 60 years old was expanded to now cover some 20,000 hectares, supplying •• Oranges are sold to cooperatives irrigation water to approximately 29,400 smallholders. The sys- (but hardly profitable) tem is collectively managed by the Junta de Gobierno (elected board of directors) of the Comisión de Regantes (WUA). This is one of the most ancient, important, and influential WUAs of Spain (see photo A2.12). Value Chains Water is taken from the Jucar River through the Antella intake •• Fruit (mainly citrus) works. The water from the Jucar River is also used by groundwa- •• Vegetables ter users in the upper part of the river basin, several other large •• Rice and smaller irrigation systems in the downstream part of the Oranges to national and Northern river basin (such as the Júcar-Turia irrigation system), and the European markets; rice for local and city of Valencia. The Jucar river basin is a closed river basin, national paella implying that in most years, most of the time no water reaches the Mediterranean Sea. The irrigated area presently is about 20,000 hectares. In 2018 approximately 29,400 users had water rights. Governance in Irrigation and Drainage Appendix 2 79 Governance Water Infrastructure The governance has two tiers: at the level of the 21 términos (villages) all users elect a board of seven members (junta •• Irrigation system more than local). The junta locales employ a celedor (ditch rider) and 750 years old various regadores to distribute the water and irrigate the •• 20,000 ha of irrigated land fields. They also appoint a water judge (jurado de riego) to •• 54 km of main canal mediate in conflicts. All users can join the annual general •• 500 km of distribution canals assembly meeting for discussion with the board. The users in the términos also elect one or two repre- PHOTO A2.12  Acequia Real del Júcar sentatives of deputies (delegados) to form the gen- eral assembly of the Comisión de Regantes at main system level. See figure A2.17. These 30 members of the general assembly elect a daily board (junta de gobierno) for the governance at main system level. This board has 10 members who elect a chairperson (presidente) from their midst. They have a meeting once a month. The junta de gobierno employs engi- neers and administrative personal to manage the irrigation system. They also employ an acequiero mayor, who oversees the water distribution at main system level, and various guardas, who distribute ©J. Vos. Used with the permission of J. Vos. Further permission required for reuse. the water along the secondary canals. Reservoirs Two reservoirs in the Jucar River store water that is released in the summer for irrigation: the Alarcón Reservoir (1,112 cubic megameter capacity) and the Contreras Reservoir (300 cubic megameters of use- ful capacity). Groundwater Little groundwater is used in the system, due to its salinity and because the small net returns for crops such as oranges and rice do not support pumping costs. Water allocation Water is allocated according to the water rights tied to a landholding and the crop planted. Water allocation and distribution Water allocation and distribution to each of the términos is arranged by the acequiero mayor and exe- cuted by guardas (ditch riders). Inside each término the celador distributes the water. The regadores make sure each field is irrigated. 80 Governance in Irrigation and Drainage Appendix 2 Farmers request water turns, and these turns follow the order along the canal. This system has been changed to automated delivery in the more modernized areas. The main field application method remains basin irrigation, in which bordered fields with fruit trees are inundated. Vegetables are irrigated with furrow irrigation. In the modernized sectors, drip irrigation is installed. Rice is cultivated in permanently flooded paddy fields. Water is conveyed in open, mainly lined canals, and regulated with electrically or manually operated vertical sliding gates. Discharges are measured at the entrance of the secondary canals. This infrastruc- ture is now replaced by a piped system, which has automated regulation and flow meters. Albufera estuary An important part of the system’s run-off and drainage water ends up in the Albufera estuary (2,800 hect- ares), situated at the tail of the main canal. The Albufera is a freshwater lagoon and estuary on the Gulf of Valencia coast, south of the city of Valencia. It is a nature reserve and visited by many tourists. The shores of the lagoon are used for cultivating paddy rice. Traditionally fishing was important, but due to bad water quality, fishing has stopped. The Jucar River Basin and Irrigation Modernization Plans The river basin authority (Confederación Hidrográfica de Jucar, CHJ) that forms part of the Ministry of Environment allocates the water from the Jucar River and reservoirs to the various irrigation systems. It coordinates the water allocation with the Federation of the Groundwater Users in the upper basin, and the Federation of the Irrigation Systems in the downstream part of the basin. At the end of the 20th century, increased water use in the upper part of the Júcar basin (and the plan to transfer water to the Vinalopó watershed in the south) put pressure on the water allocation in the Jucar basin. The 1998 River Basin Management Plan of the CHJ planned the modernization of irrigation sys- tems in the lower part of the basin to maintain the balance between supply and demand. The water “saved” through the installation of drip irrigation in the modernized irrigation systems was allocated for other agricultural uses. The government provided subsidies of 60 percent for the installation of the piped distribution system and hydrants. The farmers had to pay for the drip installation in their fields. Their main motivation for installing drip irrigation was for its convenience and the time it saves (and not for the reduction of water use). The river basin plans made in the context of the European Water Framework Directive (2000–15 and 2015–30) also addressed the need to save water, not so much for reallocation to other agricultural uses, but because the increased valorization of ecological river flows and the Albufera Lake (in the tail-end) required a shift in emphasis from irrigation to ecological flow. Governance in Irrigation and Drainage Appendix 2 81 Role of the WUAs The board of the WUAs approved the plan to shift to drip irrigation; however, the water users did not participate in that decision. When asked why they shifted to drip irrigation, 50 percent of the farmers replied that they were obliged to do so by the board of the WUA, 16 percent responded that they wanted to increase production (with fertigation), and 9 percent said water saving was their goal (Ortega-Reig et al. 2017). Execution of the Modernization Plan The first modernization plan with installation of drip irrigation was approved in 1998. This plan was followed by several more plans by the river basin authority. The irrigated areas are converted one by one, and the process goes very slowly. In the La Acequia Real del Jucar irrigation system, as of 2018, only three irrigation sectors had been converted (sectors 14, 15, and 23), and three more are under construc- tion (sectors 10, 18, and 19; 717 hectares in total, with 2,575 farmers) out of the total of 43. When an irrigation sector is converted to drip irrigation, a distribution system of buried pipes is installed. Each field gets a hydrant that can be opened and closed by remote control. The operation and monitor- ing of the piped system and the distribution to the fields is done from a central command center. At the head of each irrigation sector, the water is mixed with fertilizers. Not all farmers in the irrigation sectors with pipes have installed drip irrigation in their fields, with about 5 percent of the farmers refusing to convert to drip irrigation. One reason is because the old citrus trees adapt poorly to the conversion from basin to drip irrigation because their root systems are too deep and wide, so localized shallow drip irrigation results in reduced yields. In many parts of the irrigation sectors that have been converted to drip irrigation, the farmers want to maintain the open canal system as a backup system. The canals are used once a year to give extra water to leach salts. In case of heavy rainfall, the canals serve as drains for storm water. The maintenance of the canal system forms an extra financial burden. Environmental Effects of Water Saving One major objective of the modernization program was to save water, which could then be allocated from the Júcar River directly to the Albufera lagoon to increase water quality. It is calculated that the drip irrigation in the La Acequia Real del Júcar saves about 10 million cubic meters of water per year (out of the 180 cubic megameters of annual allocation). However, before the installation of the drip irriga- tion, the extra water applied to the fields drained mostly to the Albufera lagoon. Thus, the saving can be considered a “dry water saving,” with no net positive result for the Albufera region (Mondría 2010). The water allocated directly from the river might have higher quality compared with the drainage water from the irrigation system. However, the risk is that the “saved” water will be allocated for other uses (or stored in the Alarcon or Contreras reservoirs) and not to the Albufera. This demonstrates how water allocation from a reservoir to a natural park can be changed easily by a political decision. 82 Governance in Irrigation and Drainage Appendix 2 Socialeconomic Effects of Modernization for Users The conversion to drip irrigation has four main social and economic effects in the converted areas. With the conversion to drip irrigation, water distribution is regulated and monitored by a central remote cen- ter, meaning that the local WUA (at the level of the 21 términos) no longer has a function. This places the democratic functioning of the scheme at risk despite the board of the main irrigation system still being elected by the farmers of the 21 WUAs of the términos. Because the farmers do not need to request water turns to the celedores, and the regadores are no longer needed to irrigate the fields, the centuries-old collective irrigation organization that supported the social fabric of the rural areas in the converted términos is affected. Yields of older orange plantations have decreased as a result of drip irrigation while water fees have increased, and farmers have to invest in drip installations that need regular maintenance and repair. One main problem is the theft of equipment in the field (such as water meters), which increases the costs of the infrastructure. The irrigation water is mixed with fertilizers, making it impossible for a farmer to produce organic crops. Additionally, the fertilizers are the same for all farmers in an irrigation sector, irrespective of the crops grown. This problem is now being solved by connecting organic farmers directly to the main distribution pipes, before the sector heads where the fertilizers are mixed. Suggestion for Improvement Allow decentralized management of the drip system. This will enable users to have direct involvement in the management of their irrigation sector and will allow for more flexible water distribution and ­fertilizer use. References Mondría, M. 2010. “Infraestructuras y Eutrofización en l’Albufera de València: El Modelo Cabhal.” Doctoral dissertation, Polytechnic University of Valencia, Spain. Ortega-Reig, M., C. Sanchis-Ibor, G. Palau-Salvador, M. García-Mollá, and L. Avellá-Reus. 2017. “Institutional and Management Implications of Drip Irrigation Introduction in Collective Irrigation Systems in Spain.” Agricultural Water Management 187 (June): 164–72. Governance in Irrigation and Drainage Appendix 2 83 France: Evolution of Regional (Water) Case 13.  Development Companies MAP A2.12 Regional Development Companies with Public and Private Shareholders as Water Service Providers IBRD 45299 | JANUARY 2021 UNITED KINGDOM Calais BELGIUM Water Management Lille To Br ussels GERMANY Arrangement el C hann En glish Amiens LUXEMBOURG Cherbourg Rouen S Channel Is. ein Metz (U.K.) Caen e PARIS Nancy Strasbourg To Stuttgart •• Initially created in the 50s as Brest Troyes Rennes Le Mans Loi re LIECH. Regional Development Companies Nantes Tours Dijon SWITZERLAND with multiple functions Moulins Vichy •• Now with 75 years concession Bay Limoges Lyon of Biscay Clermont St-Étienne Grenoble ITALY contract specialized in multipurpose water delivery Rhône Bordeaux G PROJECT AREAS ar o nn BRL e Nimes Avignon Nice To Genova services CACG Toulouse MONACO Cannes SCP Biarritz Marseille Toulon SELECTED TOWNS AND CITIES Perpignan NATIONAL CAPITAL INTERNATIONAL BOUNDARIES SPAIN ANDORRA To Barcelona Ajaccio Farmer Profiles •• Size range: 5 – 50 Ha Scheme Overview •• No. of farmers: 20,000 Three regional development companies (Société d’Aménagement •• Commercial orientation Régional, SARs) managed the three largest irrigation schemes in southern France, where irrigation is needed to supplement rain- fall. These companies manage large hydraulic assets with the main purpose of delivering I&D services to farmers. In addition, Value Chains and according to regional specificities, the companies provide •• Fruit trees, cereals, orchards, water services for other uses (such as water supply and sanita- vineyards, etc. tion, hydropower, industry), contributing to the water security of the three regions. The three companies are BRL, operating in the Languedoc-Roussillon region; Société Canal de Provence (SCP), operating in the Provence region; and Compagnie d’Aménage- Water Infrastructure ment des Côteaux de Gascogne (CACG), operating in the Sud- •• 350,000 ha equipped with Ouest region. pressurized system (hydrants) •• 85 dams, 70 pumping stations, Key Problems and Challenges more than 10,000 km of pipe The three SARs were created in the 1950s, after the Second World •• Urban water for 3.9 million people War, in order to boost the economy of these three deprived in the 3 schemes and water for regions, where agriculture (wheat, vineyards, and olive trees) industries (400 customers) was mainly rainfed (in the Languedoc Roussillon) or irrigated 84 Governance in Irrigation and Drainage Appendix 2 through precarious small-scale irrigation schemes in the Provence PHOTO A2.13 SAR Managed Irrigation Schemes (eastern and southwestern parts of France). Approach and Solutions The SAR were created as public development tools to foster regional and multisectoral development: diversified and intensive agriculture; industrial expansion; urban expansion; and tourism development on the coast. A specific legal and institutional personality was developed for the newly created companies (SARs) that fall under the French Société d’Economie Mixte (a publicly owned and privately managed com- pany, with a majority of public shareholders). During the creation of the companies, the concessionary (asset owner) was the central gov- ernment, represented by the Ministry of Agriculture. This function of concessionary has been transferred to the regional government as part as the process of decentralization. Figure A2.15 shows the cur- rent breakdown of shareholders for the three SARs. The institutional design also includes a public service concession for 75 years granted from the state to the SARs; and the granting of water rights issuance by the river basin agency (especially for the main water withdrawal in the Rhône River). ©BRL/G. Used with the permission of BRL/G. Further permission required for reuse. FIGURE A2.15 Shareholders of the Société d’Aménagement Régional BRL CACG SCP 2% 10% 16% 18% 23% 31% 50% 18% 27% 58% 46% Shareholders Regional government (public) Department (public) City of Marseille (public) Private partners Others (including water users) Source: Daurensan et. al 2015. Note: BRL = Bas-Rhône Languedoc; CACG = Compagnie d’Aménagement des Côteaux de Gascogne; SCP = Société Canal de Provence. Governance in Irrigation and Drainage Appendix 2 85 The two main missions to fulfill for the SARs were the development of water storage, transfer, and ­distribution infrastructure, and the provision of support for irrigated agriculture development (­incuding extensions services, research, and land management). Some SARs also have specific complementary missions, such as tourism promotion. The objective was to create regional companies with local governance and a comprehensive mandate covering the design, construction, and operation of the hydraulic assets over a long period of time, as well as complementary functions that will ensure productive agricultural use of public investments (agricultural research, extension, development of multipurpose water uses allowing to increase the rev- enues for the SAR). Transformation Strategy The long history of the SARs can be divided into three different periods. 1955–85: 30 years of development multipurpose During this period, the SARs (a) planned, designed, and carried out works and hydraulic ­ infrastructure; (b) mobilized the necessary funding; and (c) were involved in land restructuring, research ­ gricultural prod- and technical support to producers, and post-harvest and marketing processes for a ­ onsulting activities, espe- ucts. Starting in the 1970s, the SARs exported their knowledge by developing c cially in Francophone countries such as Morocco, Tunisia, Mali, and Senegal. 1985–2000: Crisis, reorganization, and specialization around water service delivery This period corresponded with the reduction of the investment phase as the main hydraulic assets were completed. The three SARs also disengaged from some complementary missions (such as land management, tourism promotion) and transferred these functions to specialized entities. The compa- nies also faced the reduction of state financial support, which obliged them to restructure their orga- nization significantly (including reduction of staffing, creation of subsidiaries, optimization of operation costs, and update of tariffs), and look for new financial partners (local authorities, private companies, and banks). Even if the SARs represent a majority of public shareholders, they are not entitled to subsidies for O&M. They operate under private management with private accounting, tax liabilities, and the obligation to ensure a constant balance between charges and income. Important investment of asset renewal may be co-financed by the concessionary (regional government), the SARs, and the river basin agency (the latter if the renewal includes a modernization of the infrastructures leading to water economy or positive externalities on environment). SARs in the 21th century The SARs are consolidating their business model by diversifying their sources of revenue for water sales, as showed in figure A2.16, panels a and b. Even though the volumes of water delivered to the customers are still predominantly for agriculture (except for SCP), the revenues generated from the irrigation fees are decreasing, and for two of them represent only 10 percent (SCP) and 40 percent (BRL). 86 Governance in Irrigation and Drainage Appendix 2 FIGURE A2.16 Sources of Revenue for Water Sales a. Volumes b. Turnover 100 100 90 90 80 80 70 70 60 60 Percent Percent 50 50 40 40 30 30 20 20 10 10 0 0 BRL CACG SCP BRL CACG SCP Agriculture Urban water supply Industries Gardens and divers Source: Daurensan et. al 2015. Note: BRL = Bas-Rhône Languedoc; CACG = Compagnie d’Aménagement des Côteaux de Gascogne; SCP = Société Canal de Provence. A new generation of regional projects is strengthening SARs’ position as key stakeholders contribut- ing to water security and resilience of the regional economy to climate changes and climate variabil- ity (including flood management, thanks to the multipurpose dams managed by the SARs). These projects are Aqua Domitia (for BRL); Poitevin Lowlands (for CACG); and Verdon Saint-Cassien Transfer (for SCP). Summary of Key Functions from Six Perspectives Perspective 1: Farmer involvement Farmers are customers of an on-demand, individual, and pressurized irrigation service (hydrant on the plot). They pay the irrigation fee using a binomial formula based on volume and on flow available at the hydrant. A contract is signed between the farmer and the SAR that stipulates duties and rights for each party (including the continuity of service for the farmer, and the right to interrupt service if the farmer is failing to pay the irrigation fee). Perspective 2: WUA In the public concession (the hydraulic assets built by the SARs), the WUA has no functions in O&M. Outside the public concession (small and medium schemes built before the SARs, but receiving some services from the SAR), the traditional forms of collective water management in France applies, the Association Syndicales Autorisées (ASAs). These ASAs are WUAs, based on a strong and old legal frame- work. They are created based on the principle of compulsory membership (for any landowner within the perimeter). They are in charge of O&M of hydraulic assets, collect irrigation fees, and operate under the public oversight (local government) for their financial management. Governance in Irrigation and Drainage Appendix 2 87 Perspective 3: Agency (SAR) The SAR (concessionaire) (a) invests and operates—acts on behalf of the concessionary (asset owner); (b) receives remuneration from the users (water tariffs); (c) bears investment and operation risks; and (d) ensures the renewal of infrastructure (with the support of the concessionary). Perspective 4: Line ministry (Ministry of Agriculture) The Ministry of Agriculture was the first concessionary until this function was transferred to the regional government under the framework of the decentralization policy of France. Perspective 5: Private sector Some private companies are stakeholders of the SARs, especially commercial and development banks, water supply and sanitation service providers, and water users. Perspective 6: Nonirrigation users In addition to I&D services, the SARs provide water service delivery to other customers for uses such as: •• Water supply and sanitation (bulk water to treatment plants, and in some cases treated water to customers). •• Water for electricity generation (especially SCP). •• Water for industry (especially SCP). •• Nontreated water for individual households (usually for recreational uses such as garden and swimming pools). •• Ecological flows in the public interest, to provide water for the environment (such as securing min- imal environmental flows). Summary of Key Learnings from SARs Case The SAR model is quite unique in the world, not only because of its legal and institutional personality but also because of its capacity to evolve, over more than 60 years, from a typical public entity concen- trating multiple functions to ensure a coordinated regional development, to a mixed company (public and private shareholding) that combines a specialized water service provider (function of water service provision) operating under private management rules for a large spectrum of customers and water uses, with a key stakeholder in regional development (function of asset development), especially toward water security. The reasons for success are multiple and include: •• The existence of a long-term territorial vision (concession contract of 75 years), including socioeco- nomic and environmental challenges. •• The participation of public stakeholders in financing the CAPEX aspects of the scheme. The regional development was decentralized with a clear vision of how to use the SARs to catalyze regional development. 88 Governance in Irrigation and Drainage Appendix 2 •• The private law statutes and the operating autonomy that allow for O&M without public subsidies under a customer-provider relationship (with rights and duties for each party). •• The integration of all human skills in the SAR, from design to operation, which is useful for the O&M of the schemes in France but also for the export of knowledge (consulting firms within the SARs). •• The multipurpose infrastructure (agricultural, urban, industrial, environment) that allows for lim- iting demand risks (such as a reduction of volumes for irrigation) by diversifying customers and revenues. •• A clear and sustainable tariff policy, and commercial management that includes (a) transparent contracting between the contractor and final user; (b) solidarity between uses and territories (a water user at the tail-end of the system pays the same as those upstream); (c) the adaptation of tariffs to the needs of the water users (such as the possibility of selecting different flows and range of total volume for farmers), and for every use (including agriculture and urban). Reference Daurensan N., E. Dressayre, and F. Malerbe. 2015. “BRL, CACG & SCP, The French Model Of Sociétés D’aménagement Régional.” ICID Conference, Montpellier, 2015 Governance in Irrigation and Drainage Appendix 2 89 SKU W19062