Document of The World Bank FOR OFFICIAL USE ONLY Report No. 13089 PERFORMANCE AUDIT REPORT REPUBLIC OF THE MALDIVES SECOND FISHERIES PROJECT (CREDIT 1320- MAL) AND REPUBLIC OF YEMEN FISHERIES DEVELOPMENT PROJECT (CREDIT 1025-YAR) THIRD FISHERIES DEVELOPMENT PROJECT (CREDIT 1274-YDR) MAY 27, 1994 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ACRONYMS AND ABBREVIATIONS AE - Agriculture Economist AFESD - Arab Fund for Economic and Social Development CACB - Cooperative and Agricultural Credit Bank FAO/CP - Food and Agriculture Organization/Cooperative Program DANIDA - Danish International Development Agency DMP - Dhekunuge Masgathumuge Project DOF - Department of Fisheries EEC - European Economic Community FAO - Food and Agriculture Organization FMDC - Fisheries Manpower Development Center FPID - Fisheries Project Implementation Department FTPP - Felivaru Tuna Processing Plant GCDFR - General Corporation for Development of Fish Resources GOM - Government of Maldives GOY - Government of Yemen GRP - Glass Reinforced Plastic IDA - International Development Agency IFAD - International Fund for Agricultural Development KV - Kilovolt MENA - Middle East and North Africa Region MFW - Ministry of Fish Wealth MNC - Maldives Nippon Corporation MOA - Ministry of Agriculture MOF - Ministry of Fisheries MSY - Maximum Sustainable Yield NCFM - National Corporation for Fish Marketing OED - Operations Evaluation Department OPEC - Organization of Petroleum Exporting Countries PAR - Performance Audit Report PCFW - Public Corporation for Fish Wealth PCRs - Project Completion Reports PDRY - People's Democratic Republic of Yemen PIU - Project Implementation Unit PPAM - Project Performance Audit Memorandum ROY - Republic of Yemen SDR - Special Drawing Rights STO - State Trading Organization TA - Technical Assistance UNDP - United Nations Development Project GLOSSARY Demersal - Fish found near the bottom of the sea Dhoni - Traditional fishing boat, Maldives Houris - Traditional Yemeni fishing boats Mariculture - Salt water agriculture Masdhoani - Plural of masdhoni Masdhoni - Traditional boat for tuna fishing, Maldives Pelagic - Of the ocean surface on the open sea, as distinguished from coastal waters Sambuks - Traditional Yemeni fishing boats Skipjack - Tuna species, a major food source for Maldivian people FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Offte of Direator-Gwenal Opeation Evaluation May 27, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT Subject: Performance Audit Report on THE REPUBLIC OF THE MALDIVES - Second Fisheries Project (Cr.1320-MAL) THE REPUBLIC OF YEMEN - Fisheries Development Project (Cr.1025-YAR) and Third Fisheries Development Project (Cr. 1274-YDR) Attached is the Performance Audit Report on the Republic of the Maldives-Second Fisheries Project (Cr. 1320-MAL), and the Republic of Yemen-Fisheries Development Project (Cr. 1025-YAR) and Third Fisheries Development Project (Cr. 1274-YDR) prepared by the Operations Evaluation Department. Although implemented in different ecological conditions, these three projects provide implementation experience on how marketing and credit support to artisanal fishermen can be decentralized, and vessels and land facilities improved. The PAR confirms that the projects had satisfactory outcomes. Institutional achievements were substantial in the Maldives Second Fisheries and Yemen Third Fisheries, the two projects for which sustainability is likely. Fish production did increase in the three projects, and the PAR noted that improvements in marketing, credit, and mechanized vessels are more likely to succeed when the fishermen are involved and their concerns taken into account. Delays due to procurement and contracting complexities occurred in all cases soon after effectiveness, a problem which shows the need for training and supervision support on procurement issues at the beginning of implementation. The PAR supports the Bank 1982 Sector Policy Paper on Fishery Development, which calls for countries to monitor the supply of natural resources and regulate their use. The PAR confirms that IDA should systematically assess the Borrower's capacity to monitor natural resources at appraisal and during supervision, and should provide support in coordination with other development agencies as appropriate. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 护 产 FOR OFFICIAL USE ONLY PERFORMANCE AUDIT REPORT REPUBLIC OF THE MALDIVES Second Fisheries Project (Credit 1320-MAL) REPUBLIC OF YEMEN Fisheries Development Project (Credit 1025-YAR) Third Fisheries Development Project (Credit 1274-YDR) TABLE OF CONTENTS Page No. Preface . . . . . . . .. . .. . .. .. . .. .. . .. .. .. . .. . . .. . . . . . . . . . . . . . . . . i Basic D ata Sheets ................................................. iii Evaluation Summary ............................................... ix I. BACKGROUND ............................................... I A udit Context .............................................. I 11. THE PROJECTS .............................................. I A. Republic of the Maldives: Second Fisheries Project (Cr. 1320-MAL) ............ 1 Project Background ........................................... I Project D esign .............................................. 2 Project Implementation ......................................... 3 Project Results .............................................. 4 Evaluation Findings and Issues .................................... 6 B. Republic of Yemen: Fisheries Development Project (Cr. 1025-YAR) ............ 9 Project Background ........................................... 9 Project D esign .............................................. 9 Project Implementation ......................................... 10 Project Results .............................................. 11 Evaluation findings and Issues .................................... 12 C. Republic of Yemen: Third Fisheries Development Project (Cr. 1274-YDR) ........ 15 Project Background ........................................... 15 Project D esign .............................................. 15 Project Implementation ......................................... 16 Project Results .............................................. 16 Evaluation Findings and Issues .................................... 17 III. OVERALL FINDINGS AND ISSUES ................................. 20 Fisheries Resources ........................................... 20 Fisheries Project Administration ................................... 20 1 "This report was prepared by Josette Murphy (Task Manager) and C.E.Patrick Watson (Consultant), who audited the projects in July and August 1993. Carl& Sarmiento provided the administrative support.' This document has a restricted distribution and may be used by recipients only in the performance ofole'r official duties. Its contents may not otherwise be disclosed without World Bank authorization. Fish Marketing . ............................................. 21 Fisheries Credit ............................................. 21 Fishing Vessels ............................................. 22 Table 1: Republic of the Maldives - Second Fisheries Project Summary of Fisheries Statistics; Project Area, 1987-1992 ................ 23 Table 2: Republic of the Maldives - Second Fisheries Project Felivaru Tuna-Processing Plant - Raw Material Supplies Summary of Fish Purchases (Metric Tons) ......................... 23 Table 3: Republic of the Maldives: Second Fisheries Prices Average Annual World Skipjack Tuna Project ....................... 24 Table 4: Republic of Yemen: Fisheries Development Project Summary of Fishing Fleet Statistics .............................. 24 Table 5: Republic of Yemen: Fisheries Development Project GCDFR Revenue from Hodeidah Auction Fish Market .................. 25 Table 6: Republic of Yemen: Fisheries Development Project ROY - Red Sea Coastal Fish Landings ............................ 25 Table 7: Republic of Yemen: Third Fisheries Development Project Gulf of Aden Fish Production 1980-1990 .......................... 26 ANNEX - Comments from the Republic of the Maldives Ministry of Fisheries and Agriculture .......................... 27 Ministry of Finance and Treasury ............................ 28 MAPS Republic of the Maldives: IBRD 16116R, IBRD 16117R and IBRD 16832 Republic of Yemen: IBRD 14788R PERFORMANCE AUDIT REPORT REPUBLIC OF THE MALDIVES Second Fisheries Project (Credit 1320-MAL) REPUBLIC OF YEMEN Fisheries Development Project (Credit 1025-YAR) Third Fisheries Development Project (Credit 1274-YDR) PREFACE This is a Performance Audit Report (PAR) for a cluster of three fisheries projects: the Republic of the Maldives Second Fisheries Project (Credit 1320-MAL), and the Republic of Yemen Fisheries Development (Credit 1025-YAR) and Third Fisheries Development Projects (Credit 1274-YDR). Each of these projects focus on the artisanal fishing sector, and they include interventions in fish marketing, provision of credit for fishing fleet mechanization, and new vessel construction. Although they were implemented in different ecological conditions, they provide implementation experience on improvement of vessels and land facilities for artisanal fishing, and on decentralization of marketing and credit support. Credit 1320-MAL, in the amount of US$5.0 million for the Second Fisheries Project, was approved in January 1983. The original Closing Date (December 1989) was extended twice to June 1991, and the project was fully disbursed. The project was cofinanced by the International Fund for Agricultural Development (US$2.3 million), the Organization of Petroleum Exporting Countries (OPEC) (US$0.9 million equivalent), and the Norwegian Government (US$5.6 million equivalent). Credit 1025-YAR, in the amount of US$17.0 million for the Fisheries Development Project, was approved in May 1980. The original Closing Date (June 1986) was extended four times until June 1990. The project was 91 percent disbursed. It was cofinanced with Danish International Development Agency (DANIDA) (US$4.0 million equivalent). Credit 1274-YEM, in the amount of US$60 million for the Third Fisheries Development Project, was approved in June 1982. The original Closing Date (June 1988) was extended three times to June 1991. The project was fully disbursed. It was cofinanced by the International Fund for Agricultural Development (US$4.9 million equivalent), the European Economic Community (US$3.4 million equivalent), and Arab Fund for Economic and Social Development (AFESD) (US$8.8 million equivalent). This PAR draws on the Project Completion Reports (PCRs) for all three projects, prepared in 1992 (by the East Asia and Pacific Regional office for the Maldives Second Fisheries Project, and by the former Middle East and North Africa Regional Office for the Yemen Fisheries Development and Third Fisheries Development Projects). It makes use of the PAR for the First Fisheries Project in the Maldives (Cr. 0907-MAL, OED Report No. 5587 of April 1985), and the PAR for the Second Fisheries Development Project (Cr. 0932-YDR) in the People's Democratic Republic of Yemen (OED Report No. 7959 of June 1989). It also draws from the experience of cofinanciers on the audited projects. The Staff Appraisal Reports, President's Reports, Credit and Project Agreements, Supervision Reports, and the project files were reviewed, and discussions held with Bank staff. - ii - An OED mission visited the Republic of the Maldives and the Republic of Yemen in July- August 1993 and discussed the outcomes and effectiveness of IDA's assistance with government officials, beneficiaries and individuals familiar with the projects concerned. A draft of this Audit was sent to both Governments for review, and comments received from the Republic of the Maldives are attached as an Annex. Their kind cooperation and valuable assistance is gratefully acknowledged. While generally confirming the ratings assigned on the basis of the PCRs, this Audit provides additional information on the importance of fish stock monitoring and on ways to make marketing and credit services more accessible to artisanal fishermen. - 111 - PERFORMANCE AUDIT REPORT REPUBLIC OF MALDIVES Second Fisheries Project (Cr. 1320-MAL) BASIC DATA SHEET Basic Project Data Item Appraisal Actual or Actual as % of Expectation Current Estimate Appraisal Estimate Total Project Cost (US$ mil.) 12.6 14.9 118% Loan Amount (US$ mil.) 5.0 5.8 115% Cofinancing Total 7.0 8.7 125% IFAD 2.2 2.3 104% OPEC 0.9 0.9 94% N.G. 4.1 5.6 137% Economic Rate of Return 27% 14.4% - Institutional Performance Cumulative Estimated and Actual Disbursements FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 Appraisal Estimate (US$ mil.) 0.30 1.30 3.10 4.10 4.60 4.90 5.00 - - Actual (US$ mil.) - 0.24 0.87 1.49 2.75 4.13 4.69 5.50 5.74 5.759 Actual as % of Appraisal (%) 0% 18.46 28.06 36.34 59.78 84.29 93.80 110.00 114.80 115.00 Date of Final Disbursement: August 28, 1991 In terms of SDR, the total disbursements constituted 98% of the Credit amount of SDR 4.8 million. Project Dates Item Date Planned Date Revised Date Actual IdentificationY 07/80 Preparation 09/81 Appraisalg- 03-04/82 Negotiations 11/29/82 11/29/82 Board Approval 01/25/83 01/25/83 Loan Signature IDA/IFAD 02/18/83 02/18/83 Loan Signature OPEC 04/15/83 05/25/83 Grant (Norwegian) 05/25/83 Loan Effectiveness 05/19/83 07/15/83 08/30/83 Ioan Completion 06/30/89 06/30/90 12/31/90 Ioan Closing 12/31/89 12/31/90 06/30/91 The project was identified during the supervision of the First Fisheries Project. Decision Memorandum meeting 18 May 1982. - iv - Staff inputs (Staff Weeks) FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 TOTAL Prcappraisal 0.2 7.9 15.3 23.4 Appraisal 31.3 18.6 49.9 Negotiation 3.8 3.8 Supervision 4.4 8.9 15.3 17.1 10.6 15.2 3.9 4.2 2.9 7.9 90.4 Other 07 --A -1-A-j TOTAL 0.2 8.6 49.0 30.3 8.9 15.3 17.1 10.6 15.2 3.9 4.2 2.9 7.9 174.1 Mission Data Stage of No. of Persons No. of Days Type of Performance Type of Problem Project Cycle MonthlYear la Field in Field Specializationf Rating Identification' 07/80 n/a n/a n/a - - Preparation 01/82 5 20 PS,E,RE,M,FD - - Appraisal 05/82 3 21 FS,RE,CE - - Supervision I 03-04/83 3 7 FS,RE,NA 1 - Supervision II 11/83 2 4 FS,CE 2 Long delay in (M&T) contract negotiations. Supervision In 03/85 1 10 AB 2 Design issues and Disagreement with consultant (T). Supervision IV 106-07/85 3 10 AE,FS,NA 3 Change in project concept. Need to change designs (M&T). Supervision V 06/86 1 10 ACE 2 Problems with fuel distribution component (M). Supervision VI 11-12/86 2 16 ACE,NA 2 Problem with fishing boat design (T). Supervision VII 08/87 3 10 ACE,E,NA 2 Construction delays (T. Supervision VIII 03/88 4 10 ACE,FS,CS,NA 1 - Supervision IX 03-04/89 1 7 ACE 1 - Supervision X 10/89 1 5 PS 1 - Type of specialisation: PS = Fisheries Specialist, E = Engineer, RE = Refrigeration Engineer, M = Marketing, NA = Naval Architect, PD = Fuel Distribution Expert, CE = Civil Engineer, AE = Agriculture Economist, ACE = Agriculture Credit Economist, and CS = Credit Specialist. Performance Rating: 1 = no significant problems, 2 - moderate problems-significant but not critical deviations from project goal, 3 - major problems-requiring special attention and intensive supervision. Project was identified during the supervision of Fisheries I. -v - PERFORMANCE AUDIT REPORT REPUBLIC OF YEMEN MIsherles Development Project (Cr. 1025-YAR) BASIC DATA SHEET Basic Project Data Item Appraisal Actual or Actual as % of Expectation Current Estimate Appraisal Estimate Total Project Cost (US$ mil.) 30.0 24.0 80% Loan Amount (US$ mil.) 17.0 15.4 91% Cofinancing Total 4.0 4.0 100% DANIDA 4.0 4.0 100% Economic Rate of Return 28% 13% - Institutional Performance Cumulative Estimated and Actual Disbursements FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 Appraisal Estimate (US$ mil.) 2.22 6.90 13.40 16.40 17.00 - - - - - Actual (US$ mil.) 0.14 0.50 3.70 6.40 9.00 9.70 10.00 10.30 12.20 15.38 Actual as % of Appraisal (%) 6.35 7.24 27.61 39.02 52.94 57.05 58.82 60.58 71.76 90.00 Date of Final Disbursement: January 31, 1991 Project Dates Itan Date Planned Date Revised Date Actual Identification 01/75 (777) Executive Project Summary Preparation 06/77 Appraisal 09/79 10179 Credit Negotiations 03/80 04/80 Board Approval 05/20/80 Credit Signature 06/06/80 Credit Effectivenes 10/06/80 04/14/81 Credit Closing 06/30/86 06/30/87 06/30/90 06/30/88 06/30/89 06/30/90 Credit Completion 06/30/85 06/01/91 -Vi - Staff Inputs (Staff Weeks) F F80 81 82 F83 F84 F5 F86 FY87 F8 FY89 FY90 F91 F92 TOTAL 75-79 Preappr. 87.6 33.1 120.7 Appraisal 66.7 66.7 Negotiat. 3.2 3.2 Supervis. 1.1 8.7 11.9 32.2 11.9 24.2 15.4 5.6 15.2 11.2 8.5 6.5 2.7 155.1 Other 138 --- --- - ----- - - - - - _J§A TOTAL 89.8 117.9 8.7 11.9 32.2 11.9 24.2 15.4 5.7 15.2 11.2 5.5 6.5 2.7 361.8 Mission Data Stage of No. of Persons No. of Days Type of Project Cycle Month/Year in Field in Field Specialization' RatingW Preparation 1976/1978 Appraisal 10/79 Supervision I 12/81 4 7 FA,FS,NA,E 2 Supervision II 12/82 3 6 E,PE,FS 2 Supervision 111 06/83 4 10 E,PE,AC/MA,NA 3 Supervision IV 07/84 3 7 FA,NA,FS 3 Supervision V 12/84 4 12 E,Ag.Cr.SplFA,PE,Sm.Sc.FS 3 Supervision VI 10/85 2 18 Ag.Ec.,FS 3 Supervision VII 02/86 2 11 Ag.Ec.,FS 2 Supervision VIII 04/86 1 5 FA 2 Supervision IX 12/86 2 10 AG.EC.,FS 2 Supervision X 10/87 1 11 FS 2 Supervision XI 05/88 2 12 Ag.Ec.,FS 3 Supervision XII 03/89 2 6 Ag.Ec.,FS 3 Supervision XIII 10/89 1 7 Ag.Ec. 3 Supervision XIV 11/89 1 Ag.Ec. 3 FA = Financial Assistant, FS - Fisheries Specialist, NA - Naval Architect, E - Economist, PS = Port Engineer, AC/MA = Accountant/Management Analyst, Ag.Ec - Agricultural Economist, Ag.Cr.SplFA = Agricultural Credit Specialist/Financial Analyst, and Sm.Sc.FS = Small Scale Fisheries Specialist. k/ Performance Status Rating: 1 = Problem Free or Minor Problem, 2 = Moderate Problem, and 3 - Major Problems. - vii - PERFORMANCE AUDIT REPORT REPUBLIC OF YEMEN Third FIsherles Development Project (Cr. 1274-YEM) BASIC DATA SHEET Basic Project Data Item Appraisal Revised Actual or Actual as % of Expectation Current Appraisal Estimate Estimate Total Project Cost (US$ mil.) 21.4 29.4 31.7 148% Loan Amount (US$ mil.) 6.0 6.0 6.9 115% Cofinancing Total 8.3 8.7 18.3 219% IFAD 4.9 4.9 5.7 115% EEC 3.4 3.8 3.4 111% A.F. - 8.7 8.8 101% Economic Rate of Return 23% - 17% - Institutional Performance Cumulative Estimated and Actual Disbursements FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY0 FY91 FY92 Appraisal Estimate (US$ mil.) 0.60 3.20 5.60 5.80 5.90 5.90 - - - Actual (US$ mil.) 0.01 0.17 0.32 0.72 0.78 1.40 4.51 5.70 6.54 6.90 Actual as % of Appraisal (%) 1.66 5.31 5.71 12.41 13.22 23.72 76.44 96.61 110.84 116.94 Date of Final Disbursement: September 30, 1991 Project Dates Iten Date Planned Date Revised Date Actual Identification -om Preparation 04-05/81 Appraisal 09-10/81 Credit Negotiations - 05/6-11/82 Board Approval 06/24/82 Credit Signature 08/11/82 Credit Effectivenes - 02/28/83 Credit Closing 06/30/88 12/31/89 06/30/91 06/30/90 Credit Completion 12/31/87 12/31/91 - viii - Staff Inputs (Staff Weeks) FY FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 TOTAL 78-79 Preappraisal 3.1 10.9 57.1 18.8 89.9 Appraisal 0.3 52.5 52.8 Negotiation 4.1 4.1 Supervision 7.5 13.9 18.0 11.3 11.5 10.2 11.7 10.3 7.0 14.7 0.1 116.2 Other . 0.3 0.5 12.0 02 - 1 TOTAL 3.2 11.5 57.6 87.4 7.5 13.9 18.0 11.5 11.5 10.2 11.7 10.3 7.0 14.7 0.1 276.1 Mission Data Stage of No. of Persons No. of Days Type of Ratin' Type of Problem Project Cycle Month/Year in Field in Field Specialization! Identification,FMDC ' 09/80 Cons. Firm Identification, IFD# 06-07/80 3 30 CE,PS,MS Preparation 04-05/81 4 FS,TS,E,CE Appraisal 09-10/81 5 FA,E,TS,FS,CE Supervision 1 11/82 3 8 E,PE,PS 1 Supervision II 10/83 2 7 E,PE 2 Delay in recruitment of consulting engineers. Supervision III 06/84 3 8 FA,IS,NA 2 Above delay continues. Problems in selecting Yemenis for training. Supervision IV!' 11/84 3 9 E,ACS,PE 2 Supervision Vf' 05/85 2 11 ACS,FS 2 Problems of BID evaluation + award. Supervision VI' 05/86 2 10 AE,FS 2 Supervision VII' 04/87 2 9 AE,E 2 Cost over UN. Project Director appointment. Supervision VIII 11/87 2 19 AE,E 2 Recruitment of Project Director. Supervision IX 06/88 3 8 AE,E,TS 2 Supervision X 12/88 2 10 AE,NA 2 Procurement of training vessels. Supervision XI 06/89 2 4 AE,E 2 Supervision XII 11/89 2 5 AE,E 2 Supervision XIII 03/90 2 12 AE,E 2 Supervision XIV 06/91 3 17 AE,NA,IS 2 CE = Civil Engineer, PS = Fisheries Specialist, MS = Marine Surveyor, E = Economist, PE Ports Engineer, PA = Financed Analyst, ACS = Agriculture Credit Specialists, AE = Agriculture Economist, NA = Naval Architect, IS = Institutions Specialist, TS = Training Specialist. Rating: 1 = Problem Free or Minor Problem, 2 = Moderate Problem, and 3 = Major Problems. Study carried out by FAO consultants, financed by Kuwait Trust Fund. d Study by FAO/Red Sea Regional Project UNDP FAO/IC Supervision. Combined with Supervision of Fisheries II. Including 6 days for Supervision of Fisheries II. / Including Supervision of Fisheries II. PERFORMANCE AUDIT REPORT REPUBLIC OF THE MALDIVES Second Fisheries Project (Credit 1320-MAL) REPUBLIC OF YEMEN Fisheries Development Project (Credit 1025-YAR) Third Fisheries Development Project (Credit 1274-YDR) EVALUATION SUMMARY Introduction training and institutional development, but made no provision for assessing fish resources. 1. Fishing is the principal means of livelihood in the Republic of the Maldives and 4. Implementation Experience: Project an important resource in the Republic of Yemen. components were modified during imple- This Performance Audit Report (PAR) reviews mentation because of the unexpected withdrawal three projects, approved between 1980 and of the Japanese partner in a joint venture to 1983, which sought to modernize artisanal modernize the existing canning factory on fishing, marketing and processing, and to Felivaru Island, and because of a decrease in strengthen the borrowers' institutional capacity world prices for frozen tuna. GOM chose to for fisheries administration and services. The integrate the facility for frozen whole tuna three projects were successful in increasing planned under this project with the existing artisanal production, improving marketing and cannery, a decision which required numerous processing facilities, and strengthening changes in specifications but was expected to institutions and services. They encountered result in a more efficient enterprise. This similar difficulties in the monitoring of fish change, together with early difficulties in resources and in procurement. procurement and disbursement due to the implementation agency's lack of experience with 2. The PAR reviews the objectives and IDA procedures, delayed implementation. results of the three projects separately (Chapters I and II), then discusses the overall findings 5. Results: After the initial delays, the around common issues of fish resources Project succeeded in establishing most of the monitoring, fisheries project administration, fish expected facilities and services at Felivaru within marketing, credit programs, and fishing vessels the 6 year time scale planned at appraisal and, (Chapter III). including an additional Norwegian Government grant, within the approved budget. As a result, Republic of the Maldives: Second Fisheries the Maldives now possesses a modern tuna Project (Cr. 1320-MAL) refrigeration and canning complex designed and operated to high international standards. The 3. Objectives: This was the second project plant can shift between frozen whole and canned in a series designed to modernize the tuna products according to overseas demand and artisanal fishing industry in the northern half of prices. Mechanization of the pole & line fishing the Maldives Archipelago and to develop export fleet in the Northern Maldives is now virtually markets for frozen tuna. Its main objectives complete. After disappointing sea-trials for the were to improve fish collection and processing long range vessels, this component was changed on Felivaru Island, to modernize repair, fuel to building 75 mechanized inshore fishing storage and distribution facilities to the fishing vessels, the last of which are now nearing fleet, and to construct 20 longer range fishing completion. Training provided greatly exceeded vessels. It provided technical assistance for SAR plans. Overall fish production has more -x- than doubled. The institutional achievements are Republic, sought to increase fish production and sufficient to revise the PCR rating from partial consumption by providing the necessary to substantial. infrastructure, promoting participation by private enterprise in fish marketing and distribution, and 6. Projed Spec(fic ndings and Issues: establishing a strong institutional framework for the provision of support services to artisanal * The Audit confirms that the project was fishermen. The main components were to satisfactory in achieving its objectives, establish an artisanal fishing port at Hodeidah, institutional results are substantial and with all ancillary infrastructure and services, and sustinailiy islikly.to improve the infrastructure and services in sustainabiity is likelyother locations. * There is a possible declining trend in 8. Implement&*n Expeience: Project catch/boat/day, which should be implementation took five years longer than investigated to identify its causes (not expected and encountered much difficulty. A key necessarily related to a decrease in fish factor was a conflict in objectives between the population). The present information base executing agency (GCDFR) and the IDA-funded on the fish resources of the Maldives project. GCDFR's mandate, as it understood it, remains inadequate and an effective was to develop the industrial fisheries sector, management of fish resources is urgently while the IDA-funded project sought to needed. strengthen artisanal fishermen and private sector marketing and distribution. IDA raised the issue * The PCR raises issue with GOM's decision repeatedly but GOY and GCDFR took little to integrate construction of the frozen tuna action. I addition, there were numerous processing complex with modernization of changes in technical specifications and difficult the Felivaru cannery, but the Audit relations between GCDFR, design consultant considers that the decision was correct. It engineers, and harbor construction contractors. increased the efficiency of both enterprises Delays and poor management also hampered the and gave more flexibility to adjust credit program, but after a reorganization in production to demand and changing prices. 1985, the program became successful in extending credit and obtaining satisfactory cost * Through efficiency gains and improvement recovery. in management, the labor force requirements of the Felivaru processing 9. Results: Despite these difficulties, the facility have decreased slightly. However, Hodeidah fisheries harbor was completed on the sparse local population on Felivaru and time and within budget; it is now so popular neighboring islands cannot meet the with fishermen and traders that its use greatly demand, so laborers from Sri Lanka, exceeds harbor design capacity, with some loss mostly women, and male managers from in fish quality and hygiene. While the auction other Asian countries still provide part of market generates considerable revenue for the labor force. GCDFR, the Audit found that the Hodeidah Port * While an effective development project management is suffering because of insufficient implementation agency has been established funds provided for maintenance. Completion of within STO, early training and Bank facilities in other locations was uneven, and support on IDA procedures would have some completed facilities are underused. The avoided delays in procurement. design of improved fishing boats could not meet the unrealistic target set at appraisal. Republic of Yemen: FIsheries Development Project (Cr. 1025-YAR) 10. The clear, albeit belated, success of the credit component shows how a credit program 7. Objectives: This project, the first can be turned around if it tailors its services to fisheries project with the former Yemen Ara.b meet the fishermen's needs, by sending trained - xi - staff to the fishing villages and making the On the other hand, the great improvement process of application and loan repayment easy in performance of the credit agency and simple for the client. The recovery rate following the arrival of a good advisor now reaches 83 percent. shows that good management focussed on clients' needs can make all the difference in 11. Project Specific Rndings and Issues: achievement. * Since the Hodeidah harbor was by far the Republic of Yemen: Third FIsheries largest component, the overall achieve- Development Project (Cr. 1274-YEM) ments of the project are confirmed as satisfactory. Institutional objectives 12. Objectives: This project, the third in a continue to be only partially achieved, and series of four at this time, focussed on creating sustainability is uncertain because of a specialized training capability for the fisheries inadequate provision for maintenance of sector, improving the productivity of artisanal portfishing, and strengthening the marketing role and portfaclitis ad unertin rsouce dta. onshore facilities of five fisheries cooperatives in * The reliability of fish catch data is the vicinity of Aden. uncertain, but fish catch in recent years 13. Implementation Experience: Implemen- may be close to the annual maximum tation was delayed by problems in procurement sustainable yield. It is urgent that a more and selection of consultants, again demonstrating thorough assessment of fish stock be the need for early training and support on IDA undertaken and that safeguards against procedures, and by a revision of the co-financing overfishing be established as necessary. agreement. Specifications for the Village The Marine Science Resources and Fisheries Facilities were upgraded, leading to Research Center in Aden should continue cost increases. The Fisheries Manpower to receive adequate resources to monitor Development Center was developed, and it did fish stock in the Red Sea waters. shift its focus towards the training needs of fishartisanal fishermen and related crafts. " Whle he pprisa tea di cal atenion However, artisanal fishermen remain reluctant * While the appraisal team did call attention to leave work for attendance at the Center. A to fish resources constraints, supervisionin the reports and the PCR do not discuss the Center was not developed because the existing issue. The Bank Fishery Development extension service in the Ministry of Fish Wealth Sector Policy Paperl' emphasizes the need was being strengthened with UNDP/FAO for appropriate monitoring of fish stock, assistance. The marketing component was and IDA supervisions should report that modified after country unification: fish this is indeed being done and the results marketing became open to private traders, and used. the cooperatives managed an auction system and provided ancillary services. * The Audit agrees with the PCR conclusion that the project was too complex for a first 14. rets: e succesd lraliztion of project in the sector, when the institutional fish marketed prodction basetributed to the economic development of the addition, there was a conflict between the affected communities. Fishermen have been project objectives and the way the able to purchase their boat from the cooperatives parastatal agency charged with project or a new boat. The training center was execution understood its overall mandate, completed and is functioning well, although it creating problems between management, needs to diversify its sources of students in order the borrower and IDA. to function at full capacity. - xii - 15. Fndings and Lessons: policy Paper, fisheries projects should strengthen the countries' capacity to * The Audit confirms the PCR ratings: the monitor fish stock as appropriate, and ]DA project achieved its objectives satis- supervisions should ascertain that this is factorily, achievements in institution indeed being done and the results used. building have been substantial and Monitoring of fish stock needs to cover sustainability is likely. both national and international waters; it * While fish stocks in the Gulf of Aden do requires good coordination among funding not seem overfished, it remains important to ensure close monitoring of fish resources 17. Fisheries Projecs AdninistraIon: there and in the Red Sea. The Marine Resources and Research Center has the Fisheries projects include the modern- capability and mandate to do so for all ization of infrastructure and processing fisheries areas in the Republic of Yemen, facilities, and so are prone to procurement but needs to maintain an adequate operating and disbursement difficulties. Since they budget. are also frequently implemented in small countries with limited experience of IDA * The Fisheries Manpower Development procedures and no resident missions, the Center is functioning well and made good Bank should provide training and close progress in adjusting its courses to artisanal support at the very beginning of fisheries, but may be underutilized. The implementation. Audit supports the efforts by FMDC management to bring in more students from the northern part of the country and from concentrate on building up the institutional abroad, and to serve the needs of the oil capability to design and implement a long- industry for trained navigators and marine term program, as was done in the Maldives engineers. and in the People's Democratic Republic of Yemen. It should also strengthen the * Project design did not take into account the country's capacity to monitor fish existence of a fisheries extension service in resources, and this topic should be kept the Ministry of Fish Wealth and UNDP under review during supervision and plans to strengthen it. The project was completion missions. revised to avoid duplication, but this should have been foreseen at preparation.18. Marketing and Credit Services for prepartion.AItkanal fsheries: * Fishermen have responded positively to the increased demand of a liberalized market, and production has increased in quantity evidence on various degree of marketing and quality. The experience demonstrates privatization. In the two Yemen projects, that both producers and traders respond fishermen and traders responded quickly quickly to a more advantageous marketing and effectively to a liberalized market. In process, with little need for further the Maldives, fishermen have also re- incentives. The credit program contributed sponded positively to increased demand, to this success. but the pool of potential private entrepre- Overallneurs may not be sufficient to fully replace gthe State Trading Organization for fish 16. Fish Resources: marketing and provision of ancillary services. ruInadequate information systems on fish resources has been a problem in the three The experience in Yemen demonstrates that projects. As stipulated in the Bank Sector decentralized credit procedures, which - xiii - make it easy for clients to apply for and in cooperation with the fishermen them- repay their loans, can quickly be successful selves succeeded. This experience con- if a demand exist. firms the importance of involving fisher- men in identifying needs for technical 19. Fishing Vessels: changes and in developing improved vessels. * Both the Maldives and Yemen Fisheries projthe ves ad cmpens e * The increased scarcity and costs of timber Development psuitable for boat building and repair call introduce new types of fishing boats and for attempts to use alternative material, but both failed, but subsequent efforts to adapt this should be done in cooperation with traditional design to modern requirements fishermen as described above. I' World Bank, Fishery Development: Sector Policy Paper, Report No. 3915, May 1992, paras. 5.24, 5.30. PERFORMANCE AUDIT REPORT REPUBLIC OF THE MALDIVES Second Fisheries Project (Credit 1320-MAL) REPUBLIC OF YEMEN Fisheries Development Project (Credit 1025-YAR) Third Fisheries Development Project (Credit 1274-YDR) I. BACKGROUND Audit Context 1.1 The three projects reviewed in this audit focussed on the artisanal fisheries sector, they included interventions in fish marketing, provision of credit for fishing fleet mechanization, and new vessel construction, and their Project Completion Report (PCRs) were published during 1992. A cluster audit provides a better understanding of issues common to many artisanal fisheries projects, in spite of obvious differences between the oceanic island environment of the Maldives and the semi-desert coastline of southern Arabia. 1.2 Fishing is the principal means of livelihood in the Maldives and is the second most important source of foreign exchange. The industry is regulated by the Ministry of Fisheries and Agriculture with centralized state control of the canned and frozen tuna export trade, but fish catching is reserved for the private sector artisanal fishing communities. Credit 1320-MAL is the second of a series of IDA projects aimed at strengthening artisanal fishing in the process of overall fisheries development. The third project in the program is already in progress. 1.3 The two projects in Yemen were initiated at a time when the Yemen Arab Republic in the north and the People's Democratic Republic of Yemen in the south were separate countries, hence the references to YAR and YDR in the project titles. The two nations united in May 1990 to form the new Republic of Yemen (ROY) and among other changes, this unification has been followed by amalgamation of their respective fisheries administrations into a single Ministry of Fisheries covering both areas. The change should strengthen fisheries, especially in the former YAR centered on the Red Sea port of Hodeidah, where it was previously administered by a branch of the Ministry of Agriculture. Credit 1025-YAR was the Bank's first involvement in the fisheries sector of North Yemen. Fisheries in the former PDRY has long been regarded as of high economic importance and supported by a strong Ministry of Fish Wealth and a large parastatal infrastructure, centered on the port of Aden. Credit 1274-YDR, which was completed in December 1991, is the third in an ongoing series of Bank supported fisheries projects. The fourth project in the series is currently being implemented. II. THE PROJECTS A. Republic of the Maldives: Second Fisheries Project (Cr. 1320-MAL) Project Background 2.1 The project was the second stage of a linked series for the development of the tuna fisheries which was to give priority attention to: a) strengthening knowledge of resources; -2- b) testing new technology for fishing methods, vessels and equipment; c) improving fish production by mechanization of the artisanal fishing fleet; and d) developing the capability to manage exports of frozen tuna. The first project (First Fisheries Project (Credit 907-MAL)) was implemented between mid-1979 and March 1983. It focussed on the objectives a) to c) above and aimed at improving the artisanal tuna fishery by providing credit for motorizing existing sail-powered fishing craft; providing additional marine engine repair centers in the islands to maintain the expanding mechanized fleet; developing an improved "second generation" class of diesel powered artisanal inshore fishing vessel; and promoting more efficient fishing methods to enhance fishermen's productivity and earnings through a technical assistance component. The installation of a number of navigational aids was included to improve safety at sea around the Maldive Islands but provision for resource studies was deleted. 2.2 The first project achieved virtually all of its objectives in near exemplary fashion, with the credit program for vessel mechanization and the second generation vessel design proving particularly successful. However, a prototype larger vessel for longer range tuna fishing, which was designed and built under the technical assistance provision, did not perform very well during trials. There has been no further attempt to explore opportunities for longer range tuna fishing. 2.3 The second project was expected to address various topics which could not be covered under the first project. They included: a) fuel supplies to key outer islands for the mechanized fishing fleet; b) upgrading and expansion of freezing and processing centers; c) more reliable collection and delivery of tuna catches from fishing vessels to these centers; and d) better understanding of tuna and live bait species resources and possible safeguards against over fishing. Project Design 2.4 The Second Project was identified by GOM with IDA assistance during July/August 1980 and was prepared in September 1981 with the assistance of an IDA mission, with funds provided by UNDP under the Technical Assistance component of the First Project. It included an IDA credit of US$5.0 million, together with an IFAD loan of US$2.0 million, an OPEC loan of US$0.9 million, a Norwegian Government grant of US$4.1 million (later increased to US$5.6 million), and a GOM counterpart contribution of US$0.6 million. 2.5 The project was designed to support GOM efforts to increase fish production in the northern half of the Maldives Archipelago and to develop export markets for frozen tuna, by the provision of fish collection, handling, freezing and cold-storage facilities centered on Felivaru Island; boat repair and fuel storage and distribution facilities to serve the fishing fleet; and construction of 20 longer range fishing vessels to exploit more distant fishing grounds. Technical assistance provision was included to cover the costs of consultancies, for supervision, training and for the preparation of a follow-up -3- project, but fish resource work was not included. The Maldives State Trading Organization (STO) was the executing agency. Project Implementation 2.6 The Second Project became effective on August 30, 1983, about three months late, and the work was completed and the Credit finally closed on June 30, 1991, eighteen months behind schedule. Project organization and management became the responsibility of a project implementation unit (PIU), in the newly established Fisheries Project Implementation Department (FPID) within the STO. However, none of the staff members involved had any prior experience of IDA disbursement procedures and administrative requirements pertaining to contract negotiations, recruitment and procurement. This situation undoubtedly caused some delays and difficulties which could have been avoided had there been provision for training the project staff at an early stage, (as suggested in the Second Project PCk (page 4, para. 4.5)). There was an almost identical situation with the First Project, which was not resolved for either project until very belatedly when a Disbursement Division representative visited the Maldives to brief PIU staff.-V All covenants were complied with. 2.7 Implementation became more complicated shortly after the start of the project because of two external events, the withdrawal of the Japanese from a cannery joint venture, and the collapse of world prices for frozen tuna. In early 1985, GOM inherited the tuna canning facilities of a former joint venture fishing company on Felivaru Island. In addition to up-grading the cannery, GOM/STO decided that the IDA project refrigeration complex should be fully integrated on the same site, thereby combining them into a single enterprise known as the Felivaru Tuna Processing Plant (FTPP). This meant that the Project's marketing strategy, which was originally based on the export of frozen tuna, changed to a predominant reliance on the export of canned fish. Integration of the two operations also necessitated some redesigning of site and plant layout and changed specifications, especially for power supply to the Felivaru complex. These changes inevitably led to further delays in project implementation, exacerbated by difficulties with, and between some of the consultants involved. 2.8 Power generation capacity at Felivaru was quadrupled from the originally planned 3xl 10 KV to six generators producing up to 1,320 KV in order to cater for project needs and cannery expansion; a 20 MT/day freshwater plate-ice plant was installed instead of a 25 MT/day seawater block-ice plant; and the proposed 40 MT/day brine freezer was replaced by a blast-freezer of equivalent capacity. Water treatment (desalination) plant capacity was increased from 10 to 100 ton/day to ease the potable water supply problem on the island. In retrospect, it would have been better to retain the original ice plant specification because of the fresh water shortage. In consequence, the plant is rarely used. 2.9 In order to expand the volume of fuel supplies to the islands and increase the number of fuel storage tanks, and to cater for the rapidly growing mechanized fishing fleet and the Felivaru complex, the procurement of two new 100 MT tanker vessels was dropped in favor of two second-hand ships, of 2,000 MT and 700 MT capacity, purchased with GOM funds. Savings from the Project funds were used to increase the number and capacity of island-based fuel storage tanks from 11 x 15,000 liters to 20 x 48,000 liters. Local fabrication of the tanks and their delivery and installation at the selected sites was seriously delayed and have only just been completed. 2.10 The Project, as envisaged at appraisal, also included provision for the construction of 20 larger fishing vessels based on the design developed under the First Project, to exploit offshore fish stocks O OED Report No. 5587, Project Performance Audit Report, Maldives Fisheries Project (Credit 907-MAL), PPAM par. 58. -4- in more distant waters inaccessible to the existing inshore fleet. But the sea-trials of the prototype "long range" craft gave rise to questions about its sea worthiness and suitability. This component therefore remained in abeyance until 1988 when it was decided to utilize the funds for building 75 mechanized inshore fishing craft at STO's boatyard on Alifushi Island. The final nine vessels of this order were seen nearing completion at the yard during the audit mission visit. 2.11 Collection and delivery of catches from outlying islands to Felivaru was to have been accomplished using four existing transport vessels and procuring 2 x 5 MT and 2 x 10 MT capacity new craft, stowing the fish in insulated holds with ice-cooled water. In view of an increase in volume of catches it was decided instead to acquire four larger vessels of 25 MT capacity each. The additional purchase of two barges and a passenger carrier was dropped in favor of ')TO providing equivalent craft from its existing inter-atoll transport fleet. 2.12 There were a number of changes in the Technical Assistance and Training components, corresponding to the shift in project direction from tuna freezing to canning. The posts of production manager and maintenance engineer were deleted from the management contract financed by IDA, and recruited directly by STO, whereas IDA financed the posts of general manager., chief accountant, program manager and quality control and computer specialists. The SAR allocated 120 staff-months for the purpose, but this was reduced to 100 staff-months in 1986. On the other hand, the SAR provided for 36 staff-months of foreign training, whereas the needs were such that actual utilization was no less than 157 staff-months. 2.13 Although the TA component included provision for consultants to prepare a follow-up project, it was not used. Instead, with FAO and FAO/World Bank Cooperative Program assistance, GOM prepared a feasibility study for a tuna freezing and export enterprise in the southern Maldives, which has formed the basis for the IDA Third Fisheries Project (2327-MAL) now under implementation. 2.14 The original closing date of December 31, 1989 was extended by a total of eighteen months to June 30, 1991. The delay occurred mainly in the early stages and was caused partly by PIU staff's initial unfamiliarity with Bank procedures and by the redesign work needed to integrate the project refrigeration complex and the tuna cannery development at the same site. IDA disbursements totalled 98 percent of the Credit in terms of SDR values (in terms of US$ values IDA disbursements exceeded the approved Credit ceiling by nearly US$750,000 or 15 percent), IFAD and OPEC disbursements amounted to 90 percent and 94 percent of their respective Loans and the Norwegian grant was fully utilized. The undisbursed balances of SDR68,000 and SDR182,000 from the IDA Credit and IFAD Loan and US$50,700 from the OPEC Loan were canceled. Project Results 2.15 After the initial 18 month delay, the Project succeeded in establishing most of the required facilities and services at Felivaru within the 6 year timescale envisaged at appraisal and, including the additional Norwegian Government grant, within the approved project budget. As a result the Maldives now possesses a modern tuna refrigeration and canning complex designed and operated to very high standards and producing top quality, dolphin-safe products for sale under premium international brand labels such as John West and Princes's. The plant has ample capacity for expanding production and can supply the export market with frozen whole tuna as well as canned products, in response to shifts in overseas demand and prices but subject to improvements in quantity and reliability of its raw material supply. The Audit agrees with the PCR criticism of the change in ice-plant specification, mainly because of the limited freshwater supply on Felivaru Island (PCR para. 5.2). As a result, there is still an acute shortage of ice in the Project area. -5- 2.16 The Project has had a pronounced effect on fishing in the northern Maldives. The number of mechanized masdhoani recordeJ as being engaged in pole & line tuna fishing in the project area, as shown in Table 1, rose by 62 percent from 366 in 1987 to 595 in 1992, whereas countrywide the increase was 47 percent, from 1,044 boats in 187 to 1,533 in 1992. In addition there are a number of registered mechanized masdhoani (174 in tho nrject area during 1991) which are used mainly for non-fishing purposes or lying derelict. It is also of interest to note that the fleet of traditional sailing masdhoani, which numbered more than 1,300 in 1980, around the start of the First Fisheries Project, has now shrunk to about 370 of which only 4 are recorded as still fishing in the northern Maldives project area. Thus, it can reasonably be concluded that mechanization of the pole & line fishing fleet is now virtually complete, although there will continue to be a need for additional new boats to further increase the fleet size and to replace old craft as they wear out. 2.17 Table 1 shows that overall fish production from the Northern Maldives grew from around 14,500 MT in 1980 to 32,000 MT by the end of the decade. Since then it appears to have stagnated at an average level of about 31,500 MT/p.a. despite further annual increases in fishing fleet size. According to MOF fisheries statistics, since 1987 as much as 90 percent of the total catch comprises Skipjack or Yellow-fin tuna, and 92-97 percent of -e total catch is caught by the mechanized masdhoni fleet. Even so, only between 8,000 to 10,000 tons of annual catch from the project area has been sold to FTPP, the rest going for local consumption or for sale to the dried fish market. There has been a revival of demand for dried fish and especially for the dry/smoked tuna product known as "Maldive Fish" in Sri Lanka. Concern was expressed (PCR para. 6.4) that this might jeopardize FTPP fish supplies but the Audit findings suggested that market demand for such dried fish is fairly limited. During the Audit visit it was reported that the dried fish stores were full, traders had accordingly stopped buying, prices had dropped and those fishermen who were induced to sell to the dried fish traders have reverted to selling to FTPP. 2.18 FTPP requires at least 14,000 MT annually and, as shown in Table 2, has had to make up the shortfall by purchasing more costly frozen fish from the Dhekunuge Masgathumuge Project (DMP), which is another STO fishing enterprise operating in the southern Maldives. Despite the procurement of additional fish collector vessels for the project, the constraint still seems to be the capacity and irregular scheduling of the collector fleet, consequent failure to motivate fishermen to increase their effort, and, as also shown in Table 2, a high rejection rate of spoiled fish caused by very high ambient temperatures and the fishermen' inability to use ice to chill their catches. None of the masdhoani has as yet been fitted with insulated fish storage containers and no provision has yet been made for the production and distribution of ice to the fishing fleet. Action on these lines is essential if there is to be any improvement in the quality of incoming fresh fish and reduction in spoilage losses. 2.19 The PCR (para. 7.1) suggests that the main risk to project sustainability is the high level of production costs including wages. Felivaru staffing has continued to decrease, down to 842 in 1993 from 1,200 in 1990 and other economy measures such as privatization of fuel distribution are progressing. The Audit agrees with the importance of strict cost control but considers that the principal task now must be to tackle the problem of raw material supply; motivating fishermen and organizing the fish collection service so that it can be relied on to deliver at least 10,000 tons p.a. from the outer islands to Felivaru, in addition to the 4,000 to 5,000 tons purchased directly from fishermen at the FTPP jetty. A marginal increase in fishing days/boat to 180 (mechanized artisanal fishing vessels in most other parts of the world manage at least 220-240 days/boat/year), even at current average levels of catch/boat/day @ 400 kg, would enable the existing fleet of 600 mechanized masdhoani to produce a total of 43,200 MT. This would be more than enough to maintain domestic supplies as well as satisfy the minimum factory needs. However, fishermen will not waste time and fuel costs on catching fish unless they can be guaranteed that a collector vessel will be available to buy their catch at the end of the day. -6- 2.20 Thereafter, the greatest risk to the Project sustainability lies in the health of the fish resources. STO and MOF staff concerned with the Project agreed with statements in the PCR (para. 6.1) that the tuna slocks are not under any undue pressure and that there has not been any drop in catch per unit effort so far. However, the figures shown in Table 1, in the Audit's view, do show a slight but discernable inu progressive decline in mean annual catch/boat and catch/boat/day since 1989 which justifies caution and suggests the need for more urgent and detailed investigation. Fishermen' attitudes, marketing problems and reduced availability of live-bait as well as the sttus of the tuna stocks are among the possible causes of declining catch rates. It is regrettable, as has been noted earlier in para. 2.3, that although the need for appropriate resource studies of the tuna and live-bait fish stocks was recognized, neither the First nor Second IDA Projects included provision for this purpose. It was reported that this was done to avoid duplicating ongoing assessments of Indian Ocean tuna stock, sponsored by FAO in the early 1980s. Evaluation Findings and Issues a) Fish Resources 2.21 As noted above, neither the 1st nor the 2nd project has addressed the inadequacy of the present information base on the fish resources of the Maldives. Tuna is a highly migratory pelagicW species subject to natural variations in abundance from one year to another and, because they are also fished by other Indian Ocean states, excessive exploitation by any one or more of these countries could have as much, or greater impact on stocks around the Maldive islands as fishing by the Maldive national fleet. However, while the sustainability of the tuna stocks may be of varying degrees of importance to the economies of the other countries concerned, it is a matter of life or death to the Maldives. Effective management of the tuna resources will have to be organized on an international/regional basis and the scientific and administrative authorities within MOF will need greater support in promoting and participating in such arrangements. The 3rd IDA Fisheries Project made a positive step in that direction by including provision to strengthen fish catch data collection and analysis and to support stock assessment efforts by MOF in the Maldives. 2.22 About 60 percent of the mixture of demersal2/ fish and other species totalling 6,000-10,000 tons per annum, which is caught within the atolls, comprises live-bait for the skipjack tuna fishery. The balance are food-fish species, including snappers, groupers and other reef species for domestic consumption. The Audit was advised that the atoll area fish catches may be nearing maximum sustainable yield (MSY) and that continued active development of pole & line fishing will impose progressively greater strain on this resource. Only very limited information is available and there is need for careful monitoring and management of the fishery to optimize and sustain yields and to minimize waste. MOF estimates that the existing skipjack fishery produces 7-13 kg of tuna per 1 kg of bait, whereas in some other countries pole and line fishermen catch 20-40 kg of tuna per 1 kg of live-bait. Thus, there would seem to be scope for improvement and an R & D program aimed at improving the live-keeping techniques and minimizing mortality losses, and economizing on the use of live-bait while maintaining or increasing tuna catch rates, is strongly recommended, along with more detailed assessment studies of the atolline,1 fish stocks. Of the ocean surface on the open sea, as distinguished from coastal waters. Found near the bottom of the sea. From atolls, ring-shaped coral islands nearly or completely surrounding a lagoon. -7- b) Tuna Canning vs Freezing 2.23 Following withdrawal of the Japanese partner from the MNC joint venture, STO found itself responsible for the cannery and other facilities on Felivaru Island and had to determine the best means of utilizing them in the light of the changed circumstances, including developments to be financed under the IDA 2nd Fisheries Project. A key factor influencing the outcome was the concurrent collapse in world frozen tuna prices, from US$1,100/ton at the end of 1981 down to US$350/ton in 1984. This followed a lengthy period of price volatility during the 1970's, consequent on the 1973 fuel oil price crisis and the mercury-in-tuna scare. As can be seen in Table 3, canned tuna prices also fluctuate, but much less violently and not necessarily in phase with frozen tuna price trends. 2.24 In these circumstances it was determined that the safest course would be to integrate the cannery and refrigeration complex so that product lines could be switched in response to changing market conditions. GOM proposed this change to the Bank and, as stated in the PCR (para. 4.1), a reassessment carried out by STO on this basis was accepted by the Bank. In the Audit's view that should have been the end of the matter. The remark, also in the PCR, that "these decisions were made by STO and GOM ... without any consultation with IDA" was indignantly denied by STO staff members. It does not seem to accord with the records. Although some IDA staff still believe that a concentration on production and export of frozen tuna would have been beneficial, the Audit considers that the GOM decision was reasonable and correct because it would have been ridiculous to have two separate enterprises side by side on the same little island, both belonging to STO but with separate management teams and competing with each other to buy fish from the same fishermen and hire labor. Therefore, unless it is suggested that the cannery should have been demolished altogether rather than developed, the argument about a free-standing frozen fish operation seems unrealistic in the circumstances obtaining in the northern Maldives. As it is, the difference between 14.4 percent and 16.9 percent in re-estimated ERR has been allowed, quite unnecessarily in the Audit's opinion, to cast a shadow over an otherwise very successful project. The Audit was unable to gather all the data needed to recalculate the ERR, but considers that the PCR estimate of around 14 to 15 per cent is still broadly correct, given that fishing fleet growth and employment effects are somewhat lower but catch rates are higher than was envisaged at Appraisal. The project as originally conceived was appraised in May 1982 and therefore the changes to integrated freezing and canning facilities could not have been foreseen. This was a project in which a flexible response to a dynamic situation was amply justified by the outcome, but in which the scale of change was such as to nullify use of the 27 percent appraisal ERR estimate as a comparative reference point. c) Social and Institutional Effects 2.25 Additional employment created by the Project was expected to reach 1,900 jobs by the stage of full development in 1994. This figure included 940 employees at Felivaru, 30 carpenters at the Alifushi boatyard, 40-60 fuel supply workers and at least 600 fishermen on the Project boats, (PCR, para. 6.7). In view of the reduction in employment at Felivaru to only 840 people, as noted in para. 2.19 above, the Audit considers that the jobs total is now unlikely to exceed 1,800. It was also expected that about 8,000 fishermen (700 boats x 11-12 crew) would benefit from expanded marketing opportunities and thereby from higher incomes. Currently, there are about 600 mechanized masdhoani and although only 9 project vessels remain to be completed, it is known that similar craft are being built privately. It is therefore anticipated that it will take a further 2-3 years to meet this target. 2.26 Population density outside Male is sparse. Employees for the frozen and cannery facility are transported every day from Fe!ivaru and neighboring islands, but the potential labor force within reasonable distance is insufficient to meet demand. Contractors recruit employees from Sri Lanka, mainly women, and supervisory and technical staff are also recruited from various Asian countries. The Audit -8- saw no evidence of obvious social problems for the expatriate employees but could not make a thorough assessment of this situation. 2.27 No data were available on the composition of boat ownership but it was ascertained that the lending arrangements and loan recovery rates were the same as under the Ist Project. Selection of applicants was undertaken by MOF/STO in consultation with the atoll community leadership concerned and it is considered that in most cases the benefit went to genuine and proficient fishermen. The near 100 percent loan recovery rate supports the view that the vessels are being used responsibly and for the intended purposes. As regards the future, there is anxiety about the impact of rocketing imported timber prices on the cost of boats. From US$300/ton in 1983 it has risen to US$1,200-1,500 now. In consequence, the price of a 2nd Generation Masdhoni, including engine, has escalated from MRf99,000 progressively to MRf235,000 from the STO boat yard, and up to MRf400,000 from a private builder. 2.28 As regards institutional effects, the Project has contributed to the establishment of an effective development project implementation agency within STO. It would have been better if the PIU staff had been more adequately briefed on the administrative procedures involved, and given more technical support, at the outset. The Audit endorses the comments and recommendations to this effect made in the PCR (paras. 4.5 and 8.4(b)), the more so because the same issue was raised as a lesson for future action in para. 59 of the Maldives First Fisheries Project PPAM. Even though the Second Project appraisal occurred nearly three years before First Project completion, the implementation arrangements and PIU staff were different and the Bank should have been concerned with the need for briefing and technical support, based on the earlier experience. d) Project Formulation and Supervision 2.29 The process of project preparation and appraisal appears to have been well done, given that it was timed too early to take into account all of the lessons from the 1st Project, such as the inadequacy of the so-called "long-range" fishing vessel. The one major omission was the failure to include provision to strengthen resource monitoring and MOF's fisheries research effort. Supervision is judged to have been barely adequate in this case, in that there were only 10 missions during the 71h year implementation period from 1983 to 1990. This gave rise to some very long gaps, eg 16 months between missions 2 and 3 and 11 months between missions 4 and 5. A fisheries specialist was fielded on only five of the ten missions and, unlike the 1st Project, none of them included anyone from the Disbursement Division to ensure that PIU staff were properly briefed on Bank requirements. e) Reporting 2.30 Project monitoring and reporting has been satisfactory. The PCR provides a fair summary of project experience and is broadly in line with the records contained in the Bank's file archives. The Audit is in general agreement with the PCR findings, except as stated to the contrary elsewhere ir. this PAR. However, it has to be recorded that editing of the PCR is deficient, in that there are several annoying references to section/paragraph numbers which do not appear in the published final text. Presumably they originate from earlier drafts, that were either deleted or re-numbered, (eg paras. 1.1 to 1.16 and Annex I Tables I to 5, etc). In addition, the appended map of Felivaru Island shows the layout as envisaged at appraisal, preintegration, and bears little resemblance to the outcome. There should have been ample time and opportunity prior to completion, for supervision mission staff to produce sketch maps showing the changes in layout and composition of project facilities, for the benefit of the PCR and PAR readers. -9- B. Republic of Yemen: Fisheries Development Project (Cr. 1025-YAR) Project Background 2.31 This project was the Bank's first involvement with fisheries in the former Yemen Arab Republic, a sector which was considered to be relatively neglected but of importance and to have substantial development potential. The fishery was exploited by about 3,000 artisanal fishermen scattered along a 600 km stretch of the eastern Red Sea coastline. Responsibility for fisheries rested with the YAR Ministry of Agriculture (MOA) but suffered from a lack of specialist staff. Concurrently with the appraisal mission visit in late 1979, MOA established a Department of Fisheries (DOF) within the ministry but its function was largely advisory on policy matters and it lacked the ability to undertake practical development. In May 1990 the two Yemens united and fisheries was transferred from MOA to a new Ministry of Fisheries based in Sana'a but covering all fisheries in the united Republic of Yemen. 2.32 The project was identified by an FAO/Bank CP mission in 1975, followed by three FAO sponsored feasibility studies covering fish marketing, shrimp resources and suitable on-shore development sites. These studies confirmed that sectoral weaknesses included a general lack of coastal infrastructure, such as sheltered harbors, access roads and other basic services; inadequate provision for distributing fish to inland markets and weak institutional support for fisheries. The Fisheries Development Project therefore had as its principal objectives: a) increasing fish production and domestic consumption; b) promoting the incomes of artisanal fishermen; c) reducing national dependence on food imports; d) establishing a strong institutional framework for the provision of support services to fishermen; and e) providing some of the lacking infrastructure. Project Design 2.33 Following appraisal in October 1979, matters progressed more rapidly. The main components of the project were: a) an artisanal fishing port at Hodeidah, with on-shore fish marketing, boat repair and fuel supply; b) a landing jetty at Khawbah with facilities for fish and shrimp processing, storage and ice plant; c) on-shore fish marketing facilities at Khawkah and Mocha, south of Hodeidah; d) fish markets at Sana'a, Taiz, Ibb and Dhamar; e) introduction of new shrimp trawlers; f) credit scheme for fishing boats, gear, engines etc; - 10 - g) access road to Khawbah; and h) technical assistance for upgrading fishing methods, fish marketing, credit, boat building, etc. The Project, as approved, comprised an IDA credit of US$17.0 million, with parallel financing totalling US$4.0 million for the shrimp processing plant at Khawbah from DANIDA. Credit beneficiaries and the Government were expected to contribute the equivalent of US$9.3 million. The newly established General Corporation for Development of Fish Resources (GCDFR) was appointed to be the executing agency on behalf of the Government and MOA. Project Implementation 2.34 The Project became effective on April 14, 1981 about 6 months late and took five years longer to complete than planned. The Credit was finally closed on February 8, 1991 and an undrawn balance of US$1.6 million was canceled. The Completion Date is recorded as June 1, 1991. Compliance with covenants on staffing and audits of accounts was delayed. There were lengthy delays in setting up the Project Implementation Unit (PIU) within GCDFR. Appointment of the Project Manager in July 1982 was more than one year late, and when he left after only two years instead of five, he was never replaced leaving the Project without any on-site direction for most of the time. The PIU was thus rendered largely ineffectual, under-staffed and denied the resources needed for it to perform. According to the PCR and supervision records, these problems resulted primarily from the uncooperative attitude adopted by the Chairman of GCDFR. Consequent on these delays and other difficulties, the Project was accorded moderate/major problem status throughout its implementation phase (see para. 2.37 and 2.38 for further discussion). 2.35 There were a number of changes to the Project during the course of implementation, including a different route for the Khawbah access road and transfer of responsibility for its construction from GCDFR to the Tihama Development Authority and substitution of traditional Yemeni sambuks and houris in place of the fishing vessel designed during appraisal for supply to fishermen under the credit program. The Technical Assistance component was revised to provide a marine engineer and a fisheries extension adviser in place of the boat builder. 2.36 The credit program which was intended to finance fishing vessel construction, vessel repairs, engines and nets, was set up within the Cooperative and Agricultural Credit Bank (CACB) but made little progress until mid-1985 when the fisheries credit adviser was finally appointed after a five year delay. The lack of progress was partly due to CACB's prior bad experience with fisheries loans issued between 1979 and 1985, for which the recovery rate was only 36 percent as of June 1985. Procurement of new engines and fishing gear was also constrained by foreign exchange problems and difficulties with the central High Tender Board over contracts. Following the adviser's zrrival and on the basis of the procedures he recommended, CACB issued 856 loans between 1985 and the end of 1990, to a value of YR13.18 million, equivalent to US$1.8 million. By December 31, 1990 the recovery rate for the whole portfolio, including the pre-1985 "problem" accounts, had risen to 83 percent and the Audit was informed that even some of those old accounts had revived and were now being repaid. 2.37 Despite protracted disputes between GCDFR, the design consultant engineers and the harbor construction contractors, Hodeidah and Khawbah fishing harbors and associated shore facilities were completed on schedule in 1984. Khawbah water supply was not completed until June 1989 about 6 years late, and the access road to Khawbah was not even started until October 1989 and has still not - 11 - been completed. Three inland fish markets were built, at Sana'a, Taiz and Ibb, 4 years late in 1986, but the fish landing facilities at Khawkhah and Mocha were finished on schedule in 1982. 2.38 The greatest hindrance to timely and effective implementation of the Project was the ambivalent attitude of the executing agency GCDFR. The role of GCDFR as envisaged by IDA at appraisal and thereafter, was to exert all its efforts, in the process of implementation, to foster the expansion and modernization of the artisanal fisheries, to encourage more active participation by private enterprise in fish marketing and distribution, and to provide supporting services to the fishermen. Unfortunately, it appears that this remit conflicted with other instructions from Government when GCDFR was established, in which GCDFR was held responsible for domestic fish supply and for developing any fisheries export potential through industrial scale fishing as appropriate. GCDFR was created at about the same time as the appraisal mission visit and so had no track record. IDA was apparently not aware of this conflict of interest until after project effectiveness. It was, therefore, taken by surprise when GCDFR proposed to monopolize the fish trade and to engage in forms of industrial fishing which IDA considered detrimental to artisanal fishing interests and incompatible with the agreed aims and objectives of the Project. The incompatibility remained unresolved throughout implementation because of GOY's reluctance to respond to the Bank's complaints. 2.39 The issue was repeatedly raised with Government by supervision missions and in correspondence from Washington but to no avail. Government continually promised remedial action but did nothing, the Chairman of GCDFR followed his chosen course of action, largely at the Project expense but oblivious to any damage caused to the Project interests and objectives, and the Bank appeared reluctant to take action, beyond reminding the Borrower to abide by the Project Agreement terms. As to what GCDFR did do, it was apparently not a lot. The industrial fishing fleet in the end did not materialize and a fish processing plant built to handle its catch has remained unused. As regards the Project, a PIU was established and despite weaknesses it was able to process contracts for constructing the highly successful Hodeidah fish harbor and other less successful onshore facilities. Since then GCDFR has managed the harbor operations quite successfully despite the inadequate provision for maintenance. Project Results 2.40 Hodeidah Fisheries Harbor was the largest and arguably the most successful single component. It was completed in 1984 on time and within budget and has proved so popular with both fishermen and traders that the fleet now landing at Hodeidah and using the port facilities greatly exceeds harbor design capacity. Tables 4(a) and 4(b) summarize the data available on numbers of fishing vessels. The Audit was informed that a recent check by the Port Manager showed that the number of boats regularly landing their catches into Hodeidah totalled at least 100 sambuks and 160-200 houris. These totals include vessels from other coastal centers and a few from South Yemen but the result is that the relatively short length of unloading quay is hopelessly congested, with 200 or more houris and sambuks crowding in each morning to land their fish. The auction floor is likewise no longer large enough for the volume of daily landings. Whereas there were originally 5 auctioneers to dispose of the catch, there are now 14, each with 2 or 3 assistants. There are numerous legitimate traders and other fish buyers but the overcrowding is made worse by the many unofficial "porters" and people having no proper business in the harbor area but who it is not possible to exclude because of the lack of a landward perimeter fence. The adverse impact of all this congestion on market hygiene and thus on fish quality is quite apparent. 2.41 The auction market generates considerable revenue for GCDFR, amounting, as shown in Table 5, to YR8.3 million in 1992. But the Port Manager stated that he received only YR60,000 pa, not including wages for 25 harbor staff, to cover annual maintenance costs. Major items which have been - 12 - outstanding for years because of a lack of funds include repairs to the badly corroded corrugated-iron market hall roof, road resurfacing, replacement of the slipway winch, and dredging, particularly in the harbor entrance and alongside the unloading quay where the harbor has silted up badly. 2.42 The very limited time available precluded on-site visits by the audit mission to any of the fishing centers along the Red Sea coast other than Hodeidah. However, from discussions with GCDFR staff members who were members of the PIU team, it was confirmed that although the Khawbah jetty and onshore fish and shrimp processing facility were built, the jetty has become unusable because of severe siltation and now dries out at low tide. The processing plant has never been used, except for the production of ice which is in high demand by local fishermen and traders. The new Khawbah water supply is no doubt greatly appreciated by local residents for domestic purposes, as well as enabling ice to be made at the factory, but the access road has still not been completed, apparently because of lack of finance. No attempt has been made to maintain a dredged channel to the jetty at Khawbah for the same reason. 2.43 The three inland fish markets were designed, located and built in consultation with local officials but have remained unused because their locations proved unsatisfactory and because fish is customarily sold through local shops and other private channels (PCR, para. 5.06). The Audit considers that it would have been better had the consultation been with traders and consumers rather than officials. The fishery service centers at Khawkhah and Mocha also proved to be a waste of resources, because private repair facilities already existed and were much more competitive than the GCDFR owned operations. 2.44 As described in para. 2.35, the credit component had a shaky start but, after the belated arrival of the fisheries credit adviser, the lending program was turned around into a highly successful part of the Project, with the loan recovery rate of at least 83 percent. Prior to 1985 CACB had poor results from its relatively small fisheries loans portfolio, mainly because of a lack of understanding about the artisanal fishing sub-sector. Fishermen wanting loans had to make several visits to CACB's Hodeidah office, each costing up to 3 days income from lost fishing time as well as the direct cost of bus fares. In most cases, repayments also involved having to make monthly visits to the office. Under the new arrangements recommended by the adviser and initiated by the CACB, staff receive specialist training in fisheries matters and then visit the fishing villages at regular intervals, usually fortnightly, to explain the system to prospective new applicants, to assist in completing the documentation, and to collect repayment installments from borrowers. This means that fishermen rarely have to visit Hodeidah more than once to obtain the loan. Repayments are equally easily arranged. The regular visits enable CACB staff to acquire a more detailed understanding of the fisheries, the way of life of the fishing communities, the seasonal nature of fishing and fishermen' earnings and the nature of the individual borrowers. Fishermen in turn have developed an affinity with the bank staff concerned, as people with whom they can discuss their problems. Evaluation Findings and Issues a) Fish Resources 2.45 Some anxiety has to be expressed at this stage concerning the fish stocks in YAR waters of the Red Sea. As noted in the SAR (para. 2.04), information and data on the fish resources were scarce at the time of appraisal and are not much better now. In the meantime however, fish production has grown steadily, from about 11,000 mt in the late 1970's, through 18,000 to 22,000 in the mid-1980's, to more than 30,000 mt/pa in 1991 and 1992, as shown in Table 6. The accuracy of these figures is questionable but they seem likely to be of at least the right order of magnitude. - 13 - 2.46 If the figures are about right, and the earlier assessments of annual maximum sustainable yield of about 30,000 mt are also correct, then the fishery may now be close to the limit. On the other hand, even if the figures are in error and exaggerate the risk of overfishing, the uncertainty still remains. It is crucial that a more reliable system for monitoring the Red Sea fish stock and fishing efforts be instituted. 2.47 IDA should note that whereas fish resource constraints were considered by the appraisal team, there is little or no subsequent reference even in the PCR. The Region considers that supervision missions kept the resource base under regular review, but the Audit recommends that it is necessary to include appropriate references to such reviews in supervision and completion reports. Now that the two countries have united, the services of specialized agencies in the former PDRY fisheries administration are available to the whole area. In particular, staff of the Marine Science Resources and Research Center in Aden, who have been posted to the newly established research station in Hodeida, need to institute more authoritative fish stock assessment studies in Red Sea waters, to safeguard the fishery against any risk of overfishing (see para. 2.74). b) Project Planning 2.48 The PCR concludes (paras. 6.01(ii) and 10.01(i)) that project design was too complicated and that this contributed to the project's overall disappointing performance. The Audit agrees that, in the case of a first project in the sector with a weak fisheries administration and with project implementation entrusted to a newly established parastatal agency, it would have been sensible to reduce the number of components and locations involved. In the Audit's opinion and as happened in neighboring PDRY, the Project could have been used to build up an institutional and administrative capability to design and implement a more ambitious follow-up program. However, in this context, the Audit must disagree with the statement in the PCR (para. 10.01(iii)) concerning the provision of infrastructure, because there are many examples where a feeder road, ice plant, or sheltered landing has been the key prerequisite for a fishery to develop. 2.49 Although it is common practice to entrust project implementation to parastatal organizations, it is essential to verify during the planning process that there are no incompatibilities between project terms of reference and the agency's other responsibilities. The Audit was informed by PIU and other GCDFR staff that in this case, GCDFR was not set up primarily to implement the IDA project but had other terms of reference to fulfil, some of which conflicted. IDA's attitude to this situation was described by GCDFR as being at times unhelpful but, as outlined in paras. 2.37 and 2.38 above, the matter remained unresolved throughout the project period. Whatever the rights and wrongs, the Bank should not have allowed this dispute to fester for so long. More should have been done, at the highest level necessary, as soon as the nature and scale of the problem became apparent. As regards the lesson for future reference, the Audit agrees with the PCR conclusions (paras. 6.01(i) and 10.01(ii)) concerning the need to spell out the requirements for project implementation and obtain specific prior assurances from the agency concerned and the government. In addition, the Audit stresses the need for even greater caution in cases where the agency concerned is newly established and thus has no track record by which to judge its ability and aspirations. c) Artisanal Fishing Boat Design 2.50 The Audit endorses the PCR conclusion (para 10.01) that the introduction of new types of fishing boat into a traditional artisanal fishery is a process requiring great care and the direct participation of the fishermen concerned over a lengthy period. The idea that an acceptable design could be developed during appraisal (PCR, para. 4.01-iii) is just not feasible. Time is required for prototype - 14 - selection, trials by selected fishermen, modifications, retrials, etc, until a satisfactory outcome is achieved and experience suggests that all this can take up to three years. Artisanal boats successfully developed in India under the Gujarat Fisheries Project (Credit 695-IN) and in the Maldives under the First Fisheries Project (Credit 907-MAL) provide good examples of how it should be done. Sadly there are all too many examples of the reverse. d) Credit for Artisanal Fisheries 2.51 The principal features of the ultimately highly successful fisheries credit component are comprehensively described in the PCR (para. 5.01) and further summarized in this PAR, para. 2.43 above. However, a key element in the Audit's view, which distinguishes CACB from so many other lending agencies elsewhere and so-called "participating" banks, is that CACB has been prepared to listen and to accept expert advice. In addition, CACB has not believed, as have so many others, that a successful lending portfolio can be created without providing and training specialist staff and thereby incurring extra costs for salaries and travel expenses. Many credit scheme failures have resulted from the lending agencies' unwillingness to adjust their procedures to fishing sector needs or to incur the added costs needed to ensure success. Examples include India, Gujarat and Andhra Pradesh Fisheries, Credits Nos 695-IN and 815-IN; Yemen, Ist Fisheries Project, Credit 370-YDR; and Tunisia 1st Fisheries Project, Credit 270-TUN. e) Reporting 2.52 Project monitoring and reporting has been weak. Although the PCR provides a reasonable summary of project experience, from IDA's perspective, the record shows that it was drafted as a desk assignment in Washington and not as the outcome of a project completion mission to Yemen. Some of the information, eg the appended plan of Hodeidah Fish Harbor, is misleading. MOF was requested but apparently failed to provide a review of the Project from the borrower's perspective and as a consequence there was no opportunity for project staff to discuss any of the issues or to contribute to the findings in any other way. This is in marked contrast to the Yemen 3rd Fisheries Project only a few months later on, in which the PCR was drafted by an FAO/World Bank CP mission in consultation with PIU staff and where the Government also contributed a section containing the borrower's reaction. 2.53 This all took place more than a year after national unification and the Audit finds it hard to understand why the response was so different in the two cases only a few months apart. Former PIU staff in Hodeidah informed the Audit that they had not seen the PCR until a few days before the Audit's arrival, nor had they been asked about providing a text for Part II. Communication to and within Yemen is not easy, as the Audit also found upon arrival in Sana'a, and must have been even more difficult in the aftermath of unification and ministerial reorganization. It seems that the messages did not reach their correct destination but, as the Bank must have been aware of the communication problem, it is considered that greater effort should have been made to contact the people concerned and thereby obtain MOF's contribution. Even at this late stage it is suggested that this should still be attempted so as to avoid any risk of the PCR being regarded as too one-sided. This might also clear the way for a follow-up project to expand Hodeidah Fish Harbor, to build up the feeder road network to fishing villages/fish landing sites, to improve basic services, such as village water supplies and provision for ice manufacture and distribution, and also to make good some of the defects from the 1st Project. f) Economic Returns 2.54 The Appraisal estimated ERR (28 percent) and the re-estimated value (13 percent) at completion are, as noted in the PCR (para. 5.07), subject to considerable uncertainty because of the lack - 15 - of reliable data. The lower value was based on benefits being limited to incremental fish production on the whole YAR coast, the fish harbor development, the credit scheme, and the supplies of water and ice at Khawbah. Data obtained by the Audit was no more reliable but suggests that the situation remains essentially the same as at completion and therefore that the estimate of 13 percent is probably about right. The two principal components, namely Hodeidah fish harbor and the fisheries credit scheme, which account for nearly 65% of actual project costs, have both proved very successful. The unsuccessful elements, such as Khawbah pier, the inland fish markets, service centers at Khawkah and Mocha and the Khawbah link road, were relatively less costly. Overall, the project has undoubtedly produced a substantial increase in volume of fish catch and in fishermen's earnings and fisheries sector employment, even though the very limited available data are unreliable and (as is the case for Hodeidah landings figures in Table 6) sometimes contradictory. C. Republic of Yemen: Third Fisheries Development Project (Cr. 1274-YDR) Project Background 2.55 IDA involvement in fisheries development in the former PDRY has focussed on the needs of the 5,000 or so fishermen who comprise the traditional inshore and small-scale artisanal fisheries sub-sector, whereas earlier GOY efforts concentrated on exploiting the fish resources of the Gulf of Aden by means of licensed or joint venture industrial scale fishing and state owned fish processing enterprises. This audit is concerned with the Third Project in an ongoing program in which the Fourth Fisheries Project is already in progress. 2.56 The First Project, approved in 1973, financed the construction of a fish receiving station at Shihr, cold storage facilities at Mukalla and provision of 100 mechanized fishing boats for use by members of artisanal fishing cooperatives in the Shihr/Mukalla area. The First Project was completed in 1981. The Second Project commenced in 1979 and centered on the construction of a fishing and general purpose harbor at Nishtun, some 220 miles east of the First Project area and adjoining the border with Oman. The project also provided improved shore facilities, boats, engines and gear to fishing villages in the area. The project was completed and the credit closed in June 1987. 2.57 The Third Fisheries Project was identified and prepared by FAO/Bank CP missions and appraised by IDA in October 1981 with the aims of creating a specialized training capability for the fisheries sector, improving the traditional sub-sector's productivity and strengthening the marketing role and onshore facilities of five selected fisheries cooperatives in the vicinity of Aden. The project was approved in June 1982 and declared effective in February 1983. Project Design 2.58 As revised in 1987, the project comprised an IDA credit of US$6.0 million (SDR 5.4 million), an IFAD loan of US$5.0 million (SDR 4.45 million), an EEC credit of US$3.8 million, an Arab Fund (AFESD) contribution of US$8.8 million, and a GOY counterpart share of US$5.9 million, a total estimated cost therefore of US$29.4 million. The main components of the project were: a) construction and equipping of a Fisheries Manpower Development Center near Aden, incorporating a technical secondary school and providing preservice specialized training and in-service short courses for fishermen and ancillary workers. A fisheries extension service, with headquarters in FMDC, would serve all the outlying fishing villages; -16- b) provision of facilities for handling, storing and marketing of fish by cooperatives in five village centers; and c) technical assistance for FMDC's training program. 2.59 FMDC was initially designed to provide fisheries-related specialized training which was not available elsewhere, and which could lead to certification of deck officers and marine engineers for the industrial fishing fleet and diplomas for supervisors and managers of shore based fish processing operations. In-service training needs for existing MFW staff would also be catered for. The village development component was intended to assist the cooperatives concerned towards greater autonomy in marketing their members' catch, instead of having to rely only on the National Corporation for Fish Marketing (NCFM). 2.60 The MFW assumed overall responsibility for the project and established a PIU for the purpose which greatly benefitted from the experience gained during implementation of the first two projects. Project Implementation 2.61 - Delays in the selection of consulting engineers consequent on IDA objections to the original nomination, changes to the draft tender documents also at IDA's behest, revision of the co-financing arrangements and agreements, plus the aftermath of the January 1986 riots, resulted in the loss of over three years. It was not until April 1987 that contracts were awarded covering the main project components. Construction of the FMDC complex was completed in September 1990 and all the equipment ordered was delivered by April 1991. 2.62 There was a change in the arrangements for fisheries extension consequent on UNDP funding an FAO initiative to expand the existing MFW fisheries extension service independently of FMDC. The proposal to develop a separate extension organization based on the Manpower Center and supported by the project was not pursued. However it is expected that closer links between FMDC and the MFW HQ based operation will be developed. 2.63 The contract for construction of the Village Fisheries Facilities was awarded in May 1987 and the completed structures handed over to the cooperatives at Fokum, Ras Imran, Bir Ali, Shuqra and Ras al Ara in February 1990. As noted in the PCR (para. 5.13-5.17), they were more elaborate and more costly than originally intended, due to the addition of facilities such as boat ramps, slipways and fish cleaning/filleting lines, on MFW's insistence. This overspecification was unfortunate, not only because of the extra costs but also because the role cooperatives has since evolved (see para. 2.65), making some of the facilities unnecessary or inappropriate, and therefore under-utilized. 2.64 Covenants were complied with, except for delays in appointment of key managers, and the absence of cost recovery plans after village facilities were transferred to cooperatives. Project Results 2.65 The fisheries sector has been profoundly affected by the political, social and economic changes that have occurred since 1988. The former large scale, state controlled industrial fishing operations have stopped, and revival of such fishing by private enterprise is progressing only very slowly, if at all. The arrangement whereby all artisanal caught fish had to be sold through the fisheries cooperatives to NCFM has been abolished and the function of the cooperatives has also changed to a - 17 - service role. Catches may now be sold directly to fish traders under an auction system managed by the cooperative concerned and this has resulted in fishe r concentrating on the quality species required by the trade and for which the traders are prepared to pay premium prices in cash. The Audit visited the Shugra cooperative, which now charges 5 percent of the auction price whereas in the past it retained 40 percent of the payments received from NCFM, and fishermen often had to wait for long periods before receiving payment. According to fishermen interviewed during the Audit, they now feel there is an real incentive to increase their productivity. 2.66 Since the two countries united in 1990, the Cooperative and Agricultural Credit Bank from the north has established branches in Aden, Mukalla and Abyan and is operating a fisheries credit scheme essentially the same as in Hodeidah. This has enabled many fishermen to purchase the boats they have been using hitherto, but which have remained cooperative property and therefore liable to re-allocation. Others are obtaining loans for new boats, although this is constrained by a shortage of engines, in Shuqra alone the Audit was informed that there are as many as 60 potential applicants for boat loans and more again for replacement engines and fishing gear. It is reported that the Gulf of Aden fishing fleet has grown from just under 2,000 vessels in 1989, to 2,600 in 1991/92. 2.67 As noted in para. 2.61 a FMDC was completed and fully equipped by April 1991, but by then the collapse of the industrial fishery reduced the demand for trained sea-going staff and imposed a reorientation towards the training needs of artisanal fishermen and ancillary trades, such as boat building and marine mechanics, etc. Adjustments to the curriculum and teaching practice have been slow but these are getting better. Consideration is also being given to the acquisition of one or more mobile training vehicles, with demonstration equipment, in which the highly trained FMDC staff can conduct training sessions at fishing villages in collaboration with MFW extension service staff. Evaluation Findings and Issues a) Fisheries TWAining 2.68 FMDC was designed to cover the fisheries related training needs both of the offshore industrial fishing sub-sector and of the inshore artisanal fisheries. The virtual demise of industrial fishing imposed a shift in emphasis in the FMDC training curriculum towards the artisanal fishing sub-sector; this was difficult for a number of the more senior staff members whose experience was derived mainly from the industrial fishing fleet. Despite this difficulty, good progress has been made in the last 2-3 years in making the necessary adjustments and the resultant courses have been very helpful in training numbers of MFW staff whose duties concern the artisanal fisheries. With regard to the fishermen there are other problems, and in particular, a reluctance to attend courses away from home because it involves losing several days fishing and income. Attendance allowances are unlikely to do more than partially compensate for these losses. Under these circumstances the mobile training vehicles mentioned in para. 2.67 could have a greater role than merely establishing a rapport with the extensionists. They could become the principal means by which the expertise at FMDC can be disseminated to the fishing community, on their own doorstep and with the minimum loss of fishing time. 2.69 Unless there is a revival in industrial fishing in the near future, there is a considerable risk that the excellent facilities at FMDC will be underutilized. With this in mind, and as a short term expedient, the Audit was informed that FMDC management has been in contact with the growing local oil industry which also has needs for trained navigators and marine engineers. School leavers, especially from fishing communities who may be receptive to the idea of working in the industry, could be given appropriately designed courses as diesel engine and refrigeration plant mechanics, or as carpenters/boat builders/repairers. In addition, so far few if any fisheries staff from North Yemen have attended FMDC - 18 - style courses and would certainly benefit. The possibility of foreign students coming to Aden is also kept in mind and between all these prospects it should be possible to keep FMDC fully occupied for the next few years. b) Fisheries Extension Service 2.70 As noted in para. 2.62 above and in the PCR (para. 5.10), the plans for setting up a countrywide fisheries extension program centered on FMDC were effectively abandoned after UNDP funding became available to MFW to reinforce the existing MFW fisheries extension service. This service had operated quite successfully for a number of years previously, in support of artisanal fishing gear modernization and mechanizing the fishing fleet, even in places as remote as Socotra Island. Thus, it was surprising to note that the SAR and other preimplementation project documentation appears to contain no reference to the prior existence of the MFW activity, nor do they provide any justification for the apparent overlap or duplication. It is also surprising that UNDP appears to have been unaware of the IDA project plans for extension, not least because IFAD was a co-financier, and this suggests a need for greater coordination between the multilateral agencies. In the Audit's view, the aim should have been to build on and strengthen pre-existing institutions rather than duplicate them. c) Market Liberalization 2.71 The contrast between the marketing situation for artisanal catches between now and 1981, after completion of the First Fisheries Project, is quite dramatic. The bulk of the catch then comprised small pelagics and other lower grade species that could be caught in larger amounts. All fish had to be sold through the Public Corporation for Fish Wealth, now the NCFM. Cooperatives were little more than PCFW agents, and fishermen had little or no incentive to use their skills to search for the better varieties or to protect catches against spoilage. Now, fishermen have responded to market demand by greatly increasing production of the better demersal fish species and are well aware of the difference in market value between well looked after chilled/fresh fish and others left lying in the sun for long periods. The auction system effectively protects fishermen against any attempts at market rigging, but the traders are also benefitting from the new regime because they are now able to obtain the kinds and quality of fish that their customers require. The experience demonstrates clearly that both the producers and traders are quick to respond to the more advantageous situation, with little or no need for further inducement. d) Project Initiation and Supervision 2.72 As described in the PCR (paras. 8.1 and 8.2), the initial three years that were effectively lost as a result of IDA's rejection of the original choice of consultant engineer, and demands for revision of tender documentation, might have been handled in a more positive and constructive fashion thereby minimizing the time loss. It is right and proper that the Bank should oversee this crucial stage in any project, but it is unwise to assume that Bank procedures and requirements can be complied with unless the Bank ensures that the necessary technical and administrative advice and briefing is provided from the outset. Even in cases such as this where it might be thought that the earlier project should have provided the necessary experience, it is by no means safe to assume that same staff remain. Courses, promotions and transfers, etc, all take their toll. Thus, more broadly based and more frequent supervision at the beginning is required and the Audit concurs with the recommendations in the PCR (para. 8.3(i) and (ii)). 2.73 There were 14 supervision missions during the 9 years from late 1982 to mid-1991 and although the official record (PCR, Table 8) shows the involvement of a fisheries specialist in only 4 of the first 6 missions and none thereafter, in fact missions 6 through 14 were all led by a senior fisheries economist (designated AE) following his transfer into MENA from another division. Thus, there was - 19 - no skimping of fisheries expertise throughout the project, but it could have benefitted from greater inputs of engineering and administrative knowledge. In-country project monitoring and reporting seemed adequate. e) Fish Resources 2.74 The Marine Resources and Research Center (MRRC) located in Aden is the agency under MFW responsible for assessing and monitoring the fish stocks in the sea areas controlled by the united ROY. The Center also undertakes studies in physical, chemical and biological oceanography, marine pollution and mariculture and for these purposes operates two research vessels and has branches at Mukalla and, more recently, at Hodeidah. The Center appears to be well staffed with an appropriate range of expertise but it also has to operate under very severe budgetary constraints, particularly since 1992, such that field work has become a practical impossibility. If this situation should continue for much longer the implications for fish stock management and conservation will be serious. MRRC received support under a United Nations Educational, Scientific and Cultural Organization (UNESCO) funded project, now completed. The IDA funded Fourth Fisheries project (Cr.2265-YEM) includes some assistance to MRR, to strengthen its operations along both coasts. This should be kept under close review in case additional support is needed to ensure effective coverage. 2.75 Fish production data from the Gulf of Aden fishery for a selection of years between 1980 and 1990, are shown in Table 7. Figures for 1991 and 1992 were not available, but the table does show the decline in pelagic fish production consequent on the demise of the industrial fishing fleet, and the increase in demersal fish catch from the artisanal fleet since 1989/1990. Except for the Red Sea demersal stocks there appears to be no immediate risk of overfishing and indeed quite the reverse in case of the stocks of small pelagic species in the Gulf of Aden and western Arabian Sea. These fish were the basis of the industrial fishery which must revive sooner or later, but under present circumstances may need some additional encouragement if the hopes for private investment are to be realized. Nevertheless, it is considered important that in any future Bank involvement in Yemen fisheries there should be a component in support of fisheries research and fish stock assessment, as a safeguard in the future for all the past investment. f) Artisanal Fisheries Credit 2.76 Although the provision of fisheries credit was not among the aims of the Third Project, it has been a noticeable element in the changing situation during implementation and subsequently. The action by CACB to open branches in the south has stimulated demand for new boats and had beneficial effects on the boat building, marine engineering and gear supply trades. The Audit was informed that loan recovery rates were as good or better than in Hodeidah, and in mid-1992 were: Aden - 92.1 percent Abyan - 77.4 percent Mukalla - 88.3 percent All of which augurs well for sustainable good performance. g) Economic Returns 2.77 The SAR estimate of overall ERR for the project, excluding FMDC, was 22.5 percent and this was reduced to 16.5 percent (PCR para. 6.5) at completion, mainly on the grounds of increased project costs particularly for the Village Fisheries Facility component. The political and social changes - 20 - since 1990, whereby among other effects the former producer cooperatives have been converted to a service role, have rendered some facilities, such as the processing lines at cooperative depots, now surplus to requirements. Physical changes such as beach erosion at some places and siltation at others have made some other project facilities inoperable, eg the slipway at Shuqra. Conversely, these negative effects are offset by the greater volume of higher value fish species now being landed and by the improvement in fishermen's incomes consequent on the changed marketing arrangements. Although it was not possible to collect and verify sufficient data to undertake an authoritative recalculation of ERR, the features outlined above suggest that the PCR valuation is still about right. III. OVERALL FINDINGS AND ISSUES FIsheries Resources 3.1 The issue of inadequate knowledge and understanding about fish stocks has figured in different ways in all three cases, together with underfunded or otherwise inadequate research and fish resource assessment and the companion risk of over-fishing. As already stipulated in the Bank Sector Policy Paper,1 it is strongly urged that systematic attention be given to the need for effective monitoring of fish catch in all fisheries projects. 3.2 There is an international dimension to fish resource assessment, which applies to most marine fishery situations and to some inland fisheries, eg the African Great Lakes. Many species migrate from one area of national jurisdiction to those of neighboring countries. It follows that the data processing and effective management of such fisheries must be properly coordinated and projects should be designed to facilitate such action, in the interest of all concerned. FIsheries Project Administration 3.3 In all three cases, there were long delays after the projects were declared effective, while consulting engineers were identified, approved and contracted, and while tender documentation was sorted out and contracts awarded in ways that satisfied both IDA and the national authorities. In most cases it is believed that delays of this nature could be greatly reduced, if not avoided altogether, if the Bank would: a) ensure that appraisal missions carefully check the local regulations and requirements covering recruitment, tenders and major contracts, etc., so that any incompatibilities with IDA rules can be resolved during negotiations; and b) ensure that PIU staff have all the information, other administrative briefing and technical backing needed to minimize the learning period and avoid costly errors. For example, if IDA wished to disqualify a particular consultant or contractor on the grounds of unsatisfactory past performance, as was the case with the YDR Third Fisheries Project, it would have been sensible to inform the PIU of that decision from the outset so that they would not waste time and could have directed their efforts elsewhere to locate other more suitable people. In the two other cases the PIUs were staffed by people who were not familiar with IDA procedures and requirements. The inclusion of a Disbursement Division expert in an early supervision team, to brief PIU staff on the spot, would have been of great benefit to all concerned and helped to save a lot of time. This action was taken 1/ World Bank, Fishery Development: Sector Policy Paper, Report No. 3915, May 1982, parm. 5.24, 5.30. -21 - in the case of the Maldives First Fisheries Project and proved very beneficial both to the Bank and to reinforcing the capability of the PIU. 3.4 Fisheries projects, which include much construction or upgrading of port and processing facilities, are prone to delays and difficulties due to lack of familiarity with Bank procurement procedures. They are also frequently implemented in small countries with no resident mission, so the PIU depends on supervision missions for advice. It is recommended that Bank staff assess the familiarity of implementation staff with procurement and disbursement procedures and plan for appropriate supervision assistance and/or formal training at the earliest stage of implementation. Fish Marketing 3.5 The three projects provide a range of fish marketing situations for comparison. In the Maldives, the State Trading Organization effectively controls the export of frozen and canned tuna through its subsidiary organizations, DMP and Felivaru, and, therefore, has a dominant influence on the prices which fishermen can obtain for their catch. However, the previous STO monopoly on Maldive fish and other dried fish exports no longer applies, so that the private traders are also able to buy tuna and have some impact on prices. As their market seems to be almost solely restricted to Sri Lanka, and as it appears that the market there for fish from the Maldives is also limited (the Audit was informed that the dried fish stores were full and therefore the traders had temporarily stopped buying), there is a balance between the two outlets from which fishermen can benefit. There is pressure on STO and the Government to expand the privatization process, such as in the case of fuel distribution, but it is by no means clear that there is a sufficient pool of entrepreneurs ready, willing and able to take over. In the meantime it seems that STO has worked quite well and care will be needed to make sure that when and if it is eventually replaced, it will be succeeded by something better, not worse. 3.6 In PDRY, until recently fishermen were dominated by the Peoples' Corporation for Fish Wealth, now the NCFM, which was bureaucratic, inefficient and failed to provide any incentive to fishermen. Under pressure it has now given way to a cooperatively managed free auction market system in which the interests of fishermen and private traders are both enhanced, at least insofar as fish supply for the domestic market is concerned. If the industrial fishery does revive, producing mainly for export, there may be need once again for a centralized fish processing and export marketing operation. This would probably require at least a regulatory role by the state, in conjunction with private enterprise development. 3.7 In North Yemen prior to starting the IDA project, the widely dispersed artisanal fishery left fishermen very much in the hands of traders who were also the only practical source of credit. It appears that Government's intention in setting up the GCDFR was directed at possible offshore semi-industrial fishing rather than helping the inshore artisanal sector. However, creation of the auction market and fish harbor at Hodeidah has so stimulated traders and fishermen that GCDFR (now part of NCFM) has effectively been sidelined and limited to the role of provider of services such as harbor management, supplies of ice, etc. So long as the balance of influence between fishermen and traders remains as it is, all should be well. However, there is a need to promote further onshore improvements at other coastal locations, possibly including some lesser harbor works, feeder roads and ice production, to avoid risk of the fishery becoming too heavily concentrated at Hodeidah. Fisheries Credit 3.8 Rural credit in general, including lending to artisanal fishermen, has a rather dismal loan recovery record in most parts of the world. It is therefore an unusual coincidence to find two quite - 22 - dissimilar countries in which the lending programs have been so successful. The circumstances underlying this success in the Maldives, where there is a fairly strict system of island administration, where the credit has been limited to tuna fishing boats and where the number of sales outlets for tuna catches is limited, are probably not replicable elsewhere. The fisheries loan scheme in Yemen, on the other hand, has more general relevance and may prove to be an example which could be applied in other artisanal fisheries situations. The key element is a lending agency prepared to operate a scheme which accommodates to the fishermen' way of life. The agency needs to specially train staff and enable them to deliver the banking service to the fishermen at the fish landing center, thus minimizing any loss of fishing time. In most other cases the schemes appear to have been designed mainly to suit the bank's convenience and it is not surprising that they evoked a negative response from the fishermen concerned. 3.9 In North Yemen prior to the start of the IDA project, fishermen wanting a loan had to make repeated visits to the bank's head office in Hodeidah before their applications could be considered and yet more visits subsequently to deposit their repayments. For fishermen based at more distant centers, the time taken up by each visit could involve the loss of one or more days fishing and corresponding loss of earnings, powerful disincentives which forced most fishermen to turn to the traditional moneylenders- and other sources of informal credit. Under the new scheme nearly everything can be done at the fishing village thus maximizing the benefit to the fishermen, which they clearly appreciate. The consultant who designed the scheme deserves particular credit for his work. 3.10 As a result of this Audit, the Region now plans to write up a case study of the Yemen experience. It will provide an example of an innovative lending scheme and should be of interest to other World Bank regions, regional banks and other organizations such as the EEC Commission. FIshing Vessels 3.11 Both the Maldives and North Yemen projects had components aimed at introducing new types of fishing boat and both failed. In the Maldives this was because the vessel developed during the preceding project for offshore fishing was judged to be unsuitable, if not unseaworthy. The fund for building a number of these crafts was used instead on building a larger number of inshore boats of already proven and popular design. In Yemen the intention to introduce a new type of artisanal inshore trawler which, it was believed, could be designed during the appraisal mission, was also abandoned after it was found that local fishermen had adapted existing sambuks for shrimp trawling. 3.12 In both cases the project planners had failed to verify if there was a need for a new type of vessel and, if so, whether it was possible to modify an existing local boat for the purpose. Had the answer to the second question been negative then provision would have been needed for up to 3 years of consultation with fishermen, trials of several possible designs, selection of the most suitable for modification and construction of prototype, further trials and modifications, eventually ending up with an acceptable vessel in which the fishermen would have confidence. 3.13 A further problem, affecting the maintenance and renewal of traditional fishing fleets, is the increasing scarcity and escalating cost of timber for boat building and repair. For example, in the Maldives the traditional craft were hand built from coconut palm timber until Government had to prohibit further felling from state palm forests as a conservation measure. Accordingly, for the past 12 years or more, boats have been built with hardwood timber imported from Sri Lanka and elsewhere. The cost of such timber has increased from US$300/ton in 1983 up to US$1,500/ton now, with a corresponding rise in the cost of the standard boat from MRf99,000 to MRf235,000. Timber could well become too scarce and too expensive for such boats to be economic, in which case alternative materials, such as GRP (fiberglass) will have to be considered, but adaptation of the boat designs to suit different materials will involve much the same lengthy process as outlined above. - 23 - Table 1: Republic of the Maldives - Second Fisheries Project Summary of Fisheries Statistics; Project Area, 1980-1992 Year Mechanical Total Catch No. of Trips Trips per Catch per Masdhoani Catch per Boat (Fishing days) Boat Boat Trip (No.)YV (mt) (nt) (No.)h' (No.) (kg) 1980 375 14500 38.7 n.a. n.a. n.a. 1987 366 26300 71.9 60300 165 436 1988 463 29600 63.9 70874 153 418 1989 446 32400 72.6 78468 176 413 1990 474 31300 66.8 82404 174 380 1991 507 31400 61.9 80293 158 391 1992 595 31900 53.6 n.a. n.a. n.a. A' Boats recorded as engaged in fishing. One trip equals one fishing day, equals the unit of effort. Source: Statistics Section, Ministry of Fisheries and Agriculture Table 2: Republic of the Maldives - Second Fisheries Project Felivaru Tuna-Processing Plant - Raw Material Supplies Summary of Fish Purchases (Metric Tons) Year Felivaru Collector DMPL Total Rejects (%) Jettyh' Boatss' (nt) (mt) (nt) (m1t) (Mt) 1988 5201.2 1986.8 2765.0 9953.0 550.1 (5.5) 1989 6440.9 4347.4 2160.0 12948.3 945.2 (7.3) 1990 4569.5 3872.7 5673.0 14115.2 991.3 (7.0) 1991 2895.7 4137.4 7595.0 14628.1 825.5 (5.6) 1992 3106.6 5097.4 5851.6 14055.6 791.2 (5.6) 19931 1082.0 2642.4 4212.2 7936.6 n.a V 1993 data for 7 months only-January/July inclusive. Deliveries by fishing boat directly to the Folivaru Plant. Fish purchased at outer islands by project collector vessels. IV Fish purchased from the Southern Maldives Dhokunuge Masgathumuge Project. Source: STO/Felivaru Tuna Processing Plant Annual Reports - 24 - Table 3: Republic of the Maldives - Second Fisheries Project Average Annual World Skipjack Tuna Prices (US$) (a) Frozen Whole Skipjack (US$/Ton, FOB Male) End 1981 - 1100 End 1982 - 600 End 1984 - 350 End 1988 - 909 End 1989 - 867 End 1990 - 813 End 1991 - 610 End 1992 - 639 1st. Half 1993 - 655 (b) Canned Chunk Skipjack (US$/Case, C&F Europe) 1988 - 26.58 1989 - 23.71 1990 - 27.48 1991 - 26.67 1992 - 24.37 1st. Half 1993 - 23.48 Source: MOF and STO data. Table 4: Republic of Yemen - Fisheries Development Project Summary of Fishing Fleet Statistics Year Houris Sawbuks (a) National Fleet (Appraisal Estimate & Forecasts) 1979/1980 815 157 1985 803 247 1990 794 256 (b) Growth in Hodeidah Based Fishing Fleet 1987 52 70 1989 60 73 1990 60 75 1991 70 70 1992/93 75 80 Source: Staff Appraisal Report, April 1980. NESFM (GCDFR) Port Managers Reports. - 25 - Table 5: Republic of Yemen - FIsheries Development Project GCDFR Revenue from Hodeidah Auction FIsh Market.1 (Levy @ 3% of Auction Sale Prices) Year Total Collectedd 1985 YR 767,065 1986 2,179,363 1987 2,763,094 1988 2,779,260 1989 2,889,911 1990 2,936,407 1991 3,690,790 1992 8,338,132 Data more reliable than those listed for Hodeidah in Table 6. Source: GCDFR Accounts Branch, Hodeidah Table 6: Republic of Yemen - FIsheries Development Project Red Sea Coastal FIsh Landingsfi (Metric Tons) Landing Center 1989 1990 1991 1992 Macha 130 176 225 n.a. Khawbah 2439 2633 n.a. n.a. Hodeidah 5366 3282 4644 4143 Khawkhah 792 781 1839 2260 Kataaba 911 864 1015 1742 Hayma 430 1457 2251 n.a. Othersb' 14912 18337 24236 28585 Totals 24980 27530 34210 36730 A' This table is based on limited data and should be treated as indicative only. Ihe key point is that totals since 1989 exceed the minimal sustainable yield estimate for YAR Red Sea Fishery at 23,000 -32,000 mt/p.a. Fish and shrimp combined (Sauders, 1983). Landings for previous years were 1978/79: 11,600 mt./p.a. (SAR); 1983/87: 18,000 - 22,000 mt/p.a. Total number of fishing communities about 40. (SAR) Source: 4th Fisheries Project PIU, Aden - 26 - Table 7: Republic of Yemen - Third Fisheries Development Project Gulf of Aden Fish Production 1980-19901 Type 1980 1985 1986 1987 1990 Pelagichl 85.6 73.4 67.2 71.1 49.2 Demersail 20.3 17.3 28.2 22.3 38.8 Invertebratew 10.4 6.0 6.4 3.7 7.8 Other 0.3 0 0 0.1 0 Total 116.6 96.7 101.8 97.3 95.8 Earlier years data are available, but not since 1990. Pelagic fish mostly from industrial fleet. Demersal catch mostly from artisa=al fishenes. V Invertebrate catch is mainly cuttlefish. Source: Project Implementation Unit, 4th Fisheries Project, Aden. -27- Annex (Page 1 of 2) COMMENTS FROM THE REPUBLIC OF THE MALDIVES MINISTRYOF FISHERIES AND AGRICULTURE MALE' REPUBLIC OF MALDIVES FAX TRANSMISSION TO; Graham Donaldson, Chief DATE: 3 March, 1994 Agriculture and Human Development Division Operations Evaluation Department FAX NO: (1) 202 522-3123 FROM; Economic Planning and Coordination Section PAGES: 1 Dear Mr. Graham Donaldson, Thank you for the opportnity to comment on the Draft Performance Audit Report of the Second Fisheries Project (Cr.1320-MAL) We had also noticed that the mean annual catch per boat and the catch per boat per day is showing declining trends since 1989. One reason for this maybe that fishing boats in the project area have reached the maximum economic yield (MEY). I agree that the consequences are grave and justifies, as you have recommended, further investigation. We have also looked into the figures of other regions and they too show the same trends from 1989. However, I believe that only by changing the type of vessels, (a technological change) can we stop the declining trends. In the project area as well as the new project area (South - Third Fisheries Project) I expect to see the same trends. Anyway I would recommend to my minister that we should seriously investigate this matter. Thank you once again for your insights, I remain Yours sincerely Ali Ha Assistant Director If you do not receive the number of pages indicated, please advise immediately. Telephone (960) 322625, Telex 77033 MAS MF, FAX (960) 326558 -28- Annex (Page 2 of 2) FACSIMILE TRANSMISSION DEPARTMENT OF EXTERNAL RESOURCES MINISTRY OF FINANCE AND TREASURY Ghawthe Building, Male', Republic of Maldives, Itl: (960) 317581-3 Fax: (960) 317592, Tlx: (896) 66326 EXTRES MF To: TEE WORLD BAN/USA Attention: MR. GRAAM DONALDSON, CHIEP, AGRI.& HUMAN DEV. DIV. From: MR. ADAM MANXXU/ DEPUTY MINISTER, Date: 25. 04. 94 This Tunsmission should contain page/s including this cover sheet. Should there be any missing / illegible please inform us immediately RE: REPUBLIC OF KALDIVRS: SECOND PISHERIES PROJECT (CR. 1320-MLD) DRAFT PERFORMANCE AUDIT REPORT REFERENCE IS MADE TO YOUR LETTER DATED 1 FEBRUARY 1994 WITH REGARD TO THE ABOVE MENTIONED PROJECT. I AM PLEASED TO INFORM YOU THAT OTHER THAN THE MINISTRY OF FISHERIES & AGRICULTURE (MOFA) ALL THE OTHER CONCERNED AUTHORITIES HAVE NO COMMENTS FOR THE SAID REPORT. I HOPE THAT YOU HAVE RECEIVED THE COMMENTS FROM MOFA. BEST REGARDS HUDA ALI SHAREEF SENIOR PROGRAM OFFICER s ！勝RD 16116R 一 IBRD 16117R 72040' 73°00' 73°20' DECEMBER 1982 INDI A Uilgarnu o NUVARAFUSOfI HAA ALIFFU Huvaratushi NUJVANANDHOO SRI LANKA Dh,dhdhoo MALDIVES Nolh iarantaru 6040 KIhiudhoffush 640 HAA DRAALU Mavaidhoo Maama Kunudhor 6020, Feevah 6020 Maakadoodhoo SHAVIYANI Farukolhu MALDIVES SECOND FISHERY PROJECT Major Fishing Grounds \ 6 00 O- ' t" -Manadhoo * Major Fishing Islands NOONU Collecting Points f Freezing Plant Al,fushi Major Fishing Grounds Naifaru Administrative Capitals VIHAFARU Alhtu1s1 Other Islands RAA VEIDOG -5040-540 ---- -- Administrative Atolis KADNO;NOO Ugoofaaru Hulhudhoo 0 T 20 30 KILOMETERS FEUVARU 10 20 EJON0- NArFARU MILES BC NURAA LHAVIYANI 5020 5020 BAA Mabaru Dharavan o This map has been prepared by the EdhAfsh1 KAAFU World Bank's staff exclusfvely for NmAADNO0 EYDHAFUSHI the convenience of the readers of TNUD00 the report to which it is ottached 5°00' The denomntions used and the Thulhaadhoo 500- boundaes shown on this map do not ~mply, on the port of the World Bonk ond ts affilsates, any judgment on the legal status of any terniory or sny endorsement Goldu or acceptance of such boundöries 72020' 72040 73000' 73°r1) 7304(Y 一巨一一一 - c 7..rt. 7. 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