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Performance

Evaluation Report

Tajikistan: Agriculture
Rehabilitation Project

Independent

Evaluation

Performance Evaluation Report


November 2014

Tajikistan: Agriculture Rehabilitation Project

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

Reference Number: PPE: TAJ 2014-13


Project Number: 32494
Loan Number: 1980
Independent Evaluation: PE-773

NOTES
(i)
(ii)

In this report, $ refers to US dollars.


For an explanation of rating descriptions used in ADB evaluation
reports, see ADB. 2006. Guidelines for Preparing Performance
Evaluation Reports for Public Sector Operations. Manila.

Director General
Director

V. Thomas, Independent Evaluation Department (IED)


B. Finlayson, Independent Evaluation Division 2, IED

Team leader
Team members

S. Palle Venkata, Evaluation Specialist, IED


M.J. Dimayuga, Senior Evaluation Officer, IED
E. Li-Mancenido, Associate Evaluation Analyst, IED
M. Fortu, Senior Evaluation Assistant, IED
C. Regodon, Administrative Assistant, IED

The guidelines formally adopted by the Independent Evaluation Department on


avoiding conflict of interest in its independent evaluations were observed in the
preparation of this report. To the knowledge of the management of the Independent
Evaluation Department, there were no conflicts of interest of the persons preparing,
reviewing, or approving this report.
In preparing any evaluation report, or by making any designation of or reference to a
particular territory or geographic area in this document, the Independent Evaluation
Department does not intend to make any judgments as to the legal or other status of
any territory or area.

Abbreviations
ADB
EIRR
FGD
FMU
FOB
ha
IEM
IWRM
M&E
MOA
MOF
MWRLR
O&M
PCR
PIU
PMO
PPER
PVR
PWS
SERF
TA
WSC
WUA

Asian Development Bank


economic internal rate of return
focus group discussion
farm machinery unit
free on board
hectare
independent evaluation mission
integrated water resources management
monitoring & evaluation
Ministry of Agriculture
Ministry of Finance
Ministry of Water Resources and Land Reclamation
operation and maintenance
project completion report
project implementation unit
project management office
project performance evaluation report
PCR validation report
potable water supply
shadow exchange rate factor
technical assistance
water and sanitation council
water users association

Currency Equivalents
Currency Unit somoni (TJS)

TJS1.00 =
$1.00 =

At Appraisal
(22 February 2002)
$0.339
TJS2.953

At Project Completion
(20 October 2010)
$0.228
TJS4.382

At Evaluation
(22 April 2013)
$0.210
TJS4.770

Contents
Acknowledgements
Basic Data
Executive Summary

v
vii
ix

Chapter 1: Introduction
A.
Project Description and Expected Results
B.
Evaluation Purpose and Process

1
1
2

Chapter 2: Design and Implementation


A.
Formulation
B.
Rationale
C.
Cost, Financing, and Executing Arrangements
D.
Procurement, Construction, and Scheduling
E.
Design Changes
F.
Outputs
G.
Consultants
H.
Loan Covenants
I.
Policy Framework

4
4
4
5
5
6
6
9
9
9

Chapter 3: Performance Assessment


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

12
12
12
13
14
14

Chapter 4: Other Assessment


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

16
16
17
17
17

Chapter 5: Issues, Lessons, and Follow-Up Actions


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

19
19
19
20

Appendixes
1.
Evaluation Methodology
2.
Project Costs and Contract Awards
3.
Project Framework and Achievements
4.
Rehabilitation of Irrigation and Drainage Systems
5.
Water Supply
6.
Status of Compliance With Loan Covenants
7.
Socioeconomic and Environment Indicators
8.
Economic Analysis

22
23
24
28
30
31
41
43

Acknowledgements
This performance evaluation report for the Agriculture Rehabilitation Project in
Tajikistan was prepared by a team led by Srinivasan Palle Venkata, Evaluation Specialist,
Independent Evaluation Department (IED), under the supervision of Bob Finlayson,
Director, Division 2, IED, and guidance of Vinod Thomas, Director General, IED.
The report was prepared with support from Ma. Juana Dimayuga, Elizabeth LiMancenido, Myrna Fortu, and Charina Regodon. Clarence Dingcong, consultant,
assisted with the analysis and the preparation of the report. Peer reviewers Andrew
Brubaker, Toshiyuki Yokota, and Karl Hughes provided valuable comments to
strengthen the report. The team is grateful to Asian Development Bank staff and
Government of Tajikistan officials for their assistance and participation in the interviews.
IED retains full responsibility for this report.

Basic Data
Loan 1980-Tajikistan: Agriculture Rehabilitation Project
Item
Total project cost
Foreign exchange cost
ADB loan amount/utilization

Appraisal Estimate
($ million)
43.75
24.43
35.00

Mission Key Dates


Loan negotiations
Board approval
Loan signing
Loan effectiveness
First disbursement
Loan closing
Borrower
Executing Agency

Actual
($ million)
49.97
34.50
40.10

1113 November 2002


18 December 2002
2 May 2003
14 August 2003
22 October 2003
20 October 2010
Republic of Tajikistan
Ministry of Water Resources and Land Reclamation

Mission Data
Type of Mission
Consultation
Appraisal
Inception mission
Loan review
Project completion
Independent evaluation

Number of Missions
1
waived
1
5
2
1

Number of Person-Days
4
52
152
24
6

Project Performance Report Ratings


Implementation Period
921 April 2003
22 April 200323 June 2003
24 June 200321 December 2004
22 December 200424 August 2005
25 August 200530 November 2007
1 December 200731 January 2008
1 February 200821 December 2008
22 December 200830 April 2009
1 May 200930 September 2009
ADB = Asian Development Bank.
Source: Asian Development Bank database.

Development
Objectives
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory

Implementation
Progress
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Satisfactory
Highly satisfactory
Highly satisfactory
Highly satisfactory

Executive Summary
On 18 December 2002, the Asian Development Bank (ADB) approved a loan of
$35 million from its Special Fund resources to the Government of Tajikistan for the
Agriculture Rehabilitation Project. The projects objectives were (i) to reduce poverty
and improve living conditions of farming communities in the project area, and (ii) to
institute measures to sustain the benefits of improvements under the project. These
objectives were to be achieved through (i) enhanced crop yields brought about by
improved irrigation and drainage as a result of infrastructure improvements; (ii)
improved access to potable water, which improves health conditions; (iii) capacity
building of water users associations (WUAs) and water sanitation councils (WSCs); and
(iv) transfer of management of the irrigation, drainage, and potable water systems to
the beneficiaries after they are adequately trained to manage them.
The project had four components:
(i)
agricultural support services for dehkan farms (privately managed
farms) in the form of farm demonstrations on soil fertility and crop
husbandry, promotion of improved seeds, and establishment of farm
machinery units (FMUs);
(ii)
rehabilitation of irrigation and drainage systems covering about 85,000
hectares (ha), and related institutional support;
(iii)
improvement of potable water supply (PWS) systems within designated
areas, to serve 87,000 beneficiaries who did not have a safe source of
water; and
(iv)
project management, monitoring, and evaluation.

A.

Project Outputs

Agricultural support for dehkan farms. During project implementation, eight


demonstration farms of 10 ha each were established for soil and seed improvement
and crop husbandry trials. The demonstration farms and training provided to farmers
helped increase farm productivity, and increased the knowledge of farmers on
improved farm technologies, diversified cropping, and better use of land. However, the
envisaged continued provision of farm demonstrations after project completion was
not realized. The assistance provided to dehkan farms was limited to the duration of
the project and no mechanism was put in place to ensure sustainability beyond the life
of the project. The demonstration farms and support services to dehkan farms ceased
after the project was completed.
As envisaged at appraisal, three FMUs were established. Subsidiary loan
agreements of $1 million each were made with the Ministry of Finance (MOF) to each
of the three FMUs. Initially, the demand for machinery services from dehkan farms was
adequate for FMUs to repay their loans on time. However, the increased availability of
leased agricultural farm equipment and machinery to farmers decreased the demand
for FMU services. Farmers began to have the option to lease more modern, mobile, and
relatively cheaper equipment. Over time, FMUs were not able to generate sufficient
revenues to recover costs, resulting in failure to pay their loans on time. The FMUs,

Tajikistan: Agriculture Rehabilitation Project


however, succeeded in encouraging farmers to use machinery and also in developing a
private rental market for such equipment.
Rehabilitation of irrigation and drainage systems. The project fully rehabilitated
the irrigation and drainage facilities of three major systems comprising: (i) the
Khojabakirgan irrigation system in B Gafurov and J Rasulov districts of Sughd region; (ii)
the Vakhsh irrigation system in Bokhtar, Vakhsh, and Kolkhozabad districts of KurganTyube Zone in Khatlon province; and (iii) the Kyzylsu-Yakhsu irrigation system in Vose
District of Kulyab region. The construction and rehabilitation undertaken by the project
met the target of providing a steady supply of irrigation water to about 85,000 ha of
land. In terms of outreach, the target of 471,000 beneficiaries reached by the improved
irrigation and drainage system was met, as project areas were rehabilitated as expected
at appraisal.
Following the rehabilitation of irrigation infrastructure the average yields of
cotton increased from about 1.9 tons/ha to 2.7 tons/ha, exceeding the targets set at
appraisal. However, total production of cotton in project areas declined and was not at
the level expected at appraisal. The general decline in production of cotton was mainly
due to the reduction in the area planted with cotton, as farmers diversified to more
profitable crops. The governments policy of allowing farmers freedom in crop selection
encouraged this diversification. Nonetheless, cotton and wheat continue to dominate
the cropping pattern. In 2003, when the project started, the two crops together
accounted for 93% of the area cultivated, and in 2008 it was 89%.
During implementation, it was agreed with ADB that 20 WUAsrather than
the 30 originally agreedwould be established in five districts to better reflect
hydrological factors such as the borders of irrigation and command areas, and the
boundaries of administrative units. As of the end of December 2012, the number of
WUAs in project areas rose to 36 as a result of governments continued efforts to
transfer management of irrigation and drainage systems to beneficiaries. To build
institutional capacity in water management, 15 water resource management agencies
within the Ministry of Water Resources and Land Reclamation (MWRLR) were supported
with equipment and vehicles. Annual training was also conducted during 2005-2008
on the promotion of water resources management to build the capacity of these
agencies.
Improvement of water supply systems. The water supply infrastructure
constructed in selected communities of five districts expanded the area covered by the
water supply distribution network, increasing the number of beneficiaries. At project
completion, the estimated number of people reached by the improved water supply
was 180,546higher than the appraisal estimate of 87,000. Seven WSCs were
established to manage and operate the delivery of potable water to these beneficiaries.
The project provided further support to sanitary and epidemiological stations of the
Ministry of Health in the five districts through building refurbishment and provision of
office and laboratory equipment.
Project management, monitoring, and evaluation. As envisaged in the project
design, the project management office (PMO), three project implementation units
(PIUs), and a high-level project steering committee were established. A monitoring and
evaluation (M&E) unit was established within the PMO to monitor the environmental
and social impact of the project. The program of environmental monitoring and social
impact assessment was developed for the project implementation period and did not
continue after project completion.

Executive Summary

B.

Performance Assessment

The project is rated successful overall. The objectives of improving living


conditions in project areas and instituting measures such as WUAs and WSCs to sustain
the benefits derived from the project were largely met. The project contributed to an
increase in incomes, reduced waterborne diseases, and provided greater access to safe
drinking water.
The project was rated relevant. At appraisal, the project was relevant to the
stated objectives of the government and ADB, namely poverty reduction in the project
areas. It addressed the needs of rehabilitating the irrigation systems and restructuring
agriculture through privatization. The construction of PWS systems addressed the need
for increasing access to safe drinking water, reducing waterborne diseases, and
improving living conditions in the project areas. The project design was adequate in
addressing the key constraints of defective irrigation, poor water resource management,
limited agricultural support services, and lack of access to potable water in the project
areas. The financing instrumentcomprising a loan from ADB Special Fund resources
and a technical assistance (TA) grant to support the resolution of accumulated farm
debtwas appropriate.
The project was rated effective in achieving the expected outcomes. It
improved the living conditions of farming communities in the project area and
implemented measures to sustain the project benefits. Average monthly nominal wages
in the project area steadily increased from TJS32 in 2003 to TJS195 in 2009. The
rehabilitation of irrigation and drainage systems increased yields of cotton by about
34% and wheat yields by 31%. Real farm income increased by 44% for cotton and 41%
for wheat. The improvement in PWS significantly reduced the incidence of waterborne
diseases. Between 2004 and 2009, reported cases of malaria fell by 96%, acute
intestinal disease by 78%, typhoid fever by 55%, and hepatitis by 15%. As of the end of
December 2012, safe drinking water was made available to 198,600 people,
substantially higher than the 87,000 target set at appraisal.
WUAs and WSCs were established as envisaged. Prior to the project the area
had no WUAs and WSCs. The creation of these institutions empowered the beneficiary
communities to manage irrigation and potable water supplies, organize water
distribution, and arrange operation and maintenance (O&M) of their systems. These
institutions have remained operational and continued to collect fees from members for
O&M. This is likely to sustain the benefits of the rehabilitated irrigation and potable
water systems.
The introduction of FMUs has been effective in encouraging the use of farm
machinery, by stimulating market entry and reducing the costs of leased farm
equipment. This resulted in a decline in demand for the services of FMUs. The
demonstration farms were beneficial to dehkan farms but no mechanism was put in
place to sustain these benefits beyond the life of the project. Sustaining the services
provided by the demonstration farms to dehkan farms would have entailed additional
operation and management costs.
The project was rated efficient in terms of the benefits achieved relative to the
costs incurred. The economic internal rate of return (EIRR) was calculated at 18%,
indicating efficient use of resources in achieving the outcome. The positive net present
value at a discount rate of 12% indicates economic viability. This re-estimated EIRR is
much lower than the EIRR of 22.9% estimated at appraisal and is also lower than the

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Tajikistan: Agriculture Rehabilitation Project


EIRR calculated by the project completion report (19%). It should be noted, however,
that the re-estimated EIRR included the economic value of PWS benefits, which was not
the case at appraisal. If the benefits are limited only to irrigation, the re-estimated EIRR
drops to 15.84%; however, this would still mean the project is efficient.
In terms of efficiency of process, the project is rated less than efficient.
Deployment of staff for the PMO and PIUs was delayed, which in turn delayed the
recruitment of implementation consultants for civil works. Consequently, the
implementation of the civil works was delayed by about 2 years. The delay in
implementation start-up also had an effect on the other components. The work on
agricultural support for dehkan farms was 12 months behind schedule, while delays in
the construction of water supply systems ranged from 15 to 30 months.
The project outcomes are less than likely sustainable. Proper maintenance has
been carried out by the MWRLR on project infrastructure in primary and secondary
systems. However, the capacity of WUAs for effective O&M of tertiary systems has been
constrained by the insufficiency of fees collected from dehkan farms to cover costs of
maintenance, and the lack of adequate equipment and machinery. As a result, WUAs
generally have been unable to properly maintain tertiary systems. The sustainability of
the demonstration farms is unlikely as many of these farms have been distributed by
the government to the rural population and no longer provide services to dehkan farms.
Further, support for the management, operation, and maintenance of these farms was
not continued after project completion.
The project had a significant socioeconomic impact. The expected impact of the
project was poverty reduction in the project areas, from 88% at project appraisal to
43% at project completion. The incidence of povertyusing the national poverty line
fell from 88% at appraisal (2002) to an average of 41% in 2008 for the five project
districts, indicating that the expected impact on poverty was realized. At the national
level, the poverty headcount ratio fell from 72.4% in 2003 to 47.2 in 2009. Outcomes
could not be monitored beyond the project duration as the M&E system established
within the MWRLR was discontinued after the PMO was closed. The institutional impact
of the project was significant. The project facilitated the creation of WUAs and WSCs,
which were nonexistent in the irrigation schemes prior to rehabilitation. The
institutional capacity of the MWRLR was strengthened through: support for national
and local networks for the establishment and expansion of WUAs, training on water
resource management, and provision of equipment and vehicles. The project had no
adverse effects on the environment.

C.

Issues

The capacity of WUAs to properly maintain and operate tertiary systems is


limited by the water user fees collected from dehkan farms. O&M of the irrigation
systems by the WUAs and expansion on a sustainable basis, is only possible if sufficient
revenues are generated to fully cover the cost of equipment, machinery, and
manpower. Although cotton farming is economically profitable, given the high world
price of cotton, financial viability becomes an issue as the farm gate price of cotton
tends to be low. Levying of export taxes by the government and lack of competition
due to market distortions, such as local government control on the movement of
cotton, tends to decrease the prices received by farmers, affecting their profits. This in
turn affects the farmers ability to pay user charges for water. Institutional reforms are
also needed to strengthen the WUAs capacity to allocate water more efficiently and
collect user charges more effectively.

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

D.

Lessons and Follow-Up Actions


The lessons identified are as follows:
(i)

(ii)
(iii)

If mechanisms were incorporated in the project design for sustaining


farm demonstration units beyond the project life, agricultural extension
services could have been provided to dehkan farms on an ongoing
basis;
Measures for achieving full cost recovery in a phased manner should
have been identified early in the implementation process so that
sustainable O&M of tertiary systems by the WUAs was possible;
Establishing a permanent M&E system within the MWRLR and not just
for the implementation period could have provided project-specific
data for evaluating long-term outcomes.

The follow-up actions to consider are:


(i)
(ii)

monitor closely cost-recovery measures for sustainable O&M of tertiary


systems, and also the MWRLRs maintenance of primary and secondary
systems;
discuss with the MOF options to privatize the FMUs, since they have
served their purpose of introducing agricultural mechanization to
farmers and catalyzing a lease market for machinery.

xiii

CHAPTER 1

Introduction
A.

Project Description and Expected Results

1.
On 18 December 2002, the Asian Development Bank (ADB) approved a loan of
$35 million from its Special Fund resources to the Government of Tajikistan for the
Agriculture Rehabilitation Project.1 The project was expected to reduce poverty in four
project area districts. The expected outcomes were (i) improvement in living conditions
of farming communities in the project area, and (ii) instituted measures to sustain the
benefits of improvements made under the project. These were to be achieved through
(i) enhanced crop yields brought about by improved irrigation and drainage as a result
of infrastructure improvements; (ii) access to improved potable water, which will
reduce efforts in fetching water and improve health conditions; (iii) capacity building of
water resources institutions, and organization and training of water users associations
(WUAs) and water sanitation councils (WSCs); and (iv) transfer of management of the
irrigation, drainage, and potable water systems to the beneficiaries after they are
adequately trained to manage them.
2.

The project area comprised three major irrigation systems:


(i)
(ii)
(iii)

3.

The project had four components:


(i)
(ii)
(iii)
(iv)

Khojabakirgan irrigation system in B Gafurov and J Rasulov districts of


Sughd region;
Vakhsh irrigation system in Bokhtar, Vakhsh, and Kolkhozabad districts
of Kurgan-Tyube Zone in Khatlon region;
Kyzylsu-Yakhsu irrigation system in Vose District of Kulyab region.

agricultural support for dehkan 2 farms that included farm


demonstrations on soil fertility and crop husbandry, promotion of
improved seeds, and establishment of farm machinery units (FMUs);
rehabilitation of irrigation and drainage systems covering about 85,000
ha, and related institutional support;
improvement of potable water supply (PWS) systems within designated
areas to serve 87,000 beneficiaries who did not have a safe source of
water; and
project management, monitoring, and evaluation.

ADB. 2002. Report and Recommendation of the President to the Board of Directors: Proposed Loan and
Technical Assistance Grant to Tajikistan for the Agriculture Rehabilitation Project. Manila.
Dehkan farms are privately managed farms, either individually or cooperatively, on state-owned land
allocated to them by state authorities. Following the breakup of the Soviet Union, most of the collective
farms in Tajikistan were converted to dehkan farms. The other types of farms in Tajikistan are enterprise
farms resulting from the privatization of specialized state farms, and household/kitchen plots.

Tajikistan: Agriculture Rehabilitation Project

B.

Evaluation Purpose and Process

4.

The purpose of the project performance evaluation was to:


(i)
(ii)
(iii)

assess the projects relevance, effectiveness, and efficiency in achieving


its objectives and outputs, sustainability of outcomes, and impact;
assess the performance of ADB, the executing agency, and
implementing agencies; and
identify key lessons for future ADB operations in the agriculture sector.

5.
The project performance evaluation report (PPER) was based on a review of
project documents and related material; discussions with ADB staff and with key
informants during the independent evaluation mission (IEM); and data and information
provided by the executing and implementing agencies.3 Benefits to households were
assessed based on information obtained from focus group discussions (FGDs) with
project beneficiaries and data gathered from farms. Details on the methodology used
for this evaluation are presented in Appendix 1. The PPER will feed into a bigger
evaluation study, the country assistance program evaluation for Tajikistan in 2014.
6.
The project completion report (PCR) was prepared in December 2010.4 Overall,
it rated the project successful. The project loan was rated relevant to the needs of
restructuring agriculture through farm privatization and irrigation rehabilitation in the
context of government and ADB poverty-reduction strategies. It was rated effective in
achieving the expected outcomes of (i) improving living conditions in project area
farming communities and (ii) instituting measures to sustain the benefits from
improvements implemented under the project. The project was rated efficient by the
PCR. The economic internal rate of return (EIRR) was estimated at 19%, indicating that
the project was highly efficient and economically viable when assessed against an
assumed opportunity cost of capital of 12%. However, the process was rated less
efficient as delays in mobilizing consultants resulted in an almost 2-year delay in the
physical implementation of the project. Lastly, the PCR rated the project less likely
sustainable. While the Ministry of Water Resources and Land Reclamation (MWRLR)
carried out maintenance on project infrastructure in primary and secondary systems,
tertiary systems that were the responsibility of WUAs had little or no maintenance, due
to a shortfall in the levy paid by farmers.5 Further, the demonstration farms were rated
less likely sustainable because farmers were less likely to pay to attend field days after
project completion.6 The PCR did not rate the impact of the project, but nonetheless
assessed it as having a notable impact on living standards in the project areas.
7.
The PCR validation report (PVR) conducted by the Independent Evaluation
Department in October 2011 concurred with the PCRs successful, relevant, efficient,
and less likely sustainable ratings of the project.7 The PVR rated the project relevant in
that it addressed poverty in the poorest part of the country and was consistent with
government and ADB objectives. The project was rated effective in that the physical
3
4
5

The independent evaluation mission was fielded to Tajikistan on 2227 April 2013.
ADB. 2010. Completion Report: Agriculture Rehabilitation Project in Tajikistan. Manila.
Primary irrigation systems comprise the main or primary canal that taps water from a source such as lake
or reservoir. Secondary structures are smaller canals that branch out from the main canal to distribute
water to the tertiary canals, which are even smaller. It is the tertiary canals that irrigate the farmers fields.
Farmers operating the demonstration farms received support under the project and provided advice, but it
was expected that the effort and costs of providing this service would eventually deter farmers from
continuing to provide it for free.
Independent Evaluation Department. 2011. Validation Report: Agriculture Rehabilitation Project in
Tajikistan. Manila: ADB.

Introduction
targets were met for rehabilitation of irrigation and drainage infrastructure, expansion
of the command area, and improvements to water supply systems. The PVR rated the
project efficient although it noted a methodological error in the recalculation of the
EIRR in the PCR.8 The magnitude of benefits from the water supply component was not
quantified, which would likely have resulted in a high EIRR. The sustainability of the
project was rated less likely in view of the failure of WUAs to properly maintain the
rehabilitated infrastructure, and the fact that farmers were unlikely assume the costs of
operating the demonstration farms for free. The PVR rated the impact of the project
substantial.

The PCR EIRR calculation was based on crop production only. No separate EIRR calculation was done for
the potable water supply component, which resulted in significant economic benefits. Further, the PCR
stated that the numeraire was the domestic price and a standard conversion factor was used for shadow
pricing. The PVR pointed out that this was incorrect because traded goods should be adjusted by the
shadow exchange rate factor when domestic price is the numeraire.

CHAPTER 2

Design and Implementation


A.

Improving the
performance of
irrigated
agriculture
required
rehabilitating
irrigation and
drainage
systems and
implementing
more efficient
water
management
The project
aimed to
support the
Government of
Tajikistan in the
rehabilitation of
selected
irrigation and
draining
facilities

Formulation

8.
At the time of appraisal in November 2002, the project was consistent with the
governments rural development strategy that focused on (i) continuing the farm
reorganization program, (ii) improving the efficiency of irrigation water use, (iii)
developing a rural credit system, (iv) rehabilitating key irrigation facilities, and (v)
implementing a poverty reduction program with a substantial agricultural component.
The interim operational strategy for Tajikistan approved by ADB in 1998 was
formulated prior to the Poverty Reduction Strategy of 2002, and thus did not have an
explicit poverty focus. Nonetheless, the interim strategy for Tajikistan included
agriculture as one of the key sectors for support.
9.
The project was formulated by a technical assistance (TA) project carried out in
FebruaryJuly 2001.9 The TA was built on the previously completed Agriculture Sector
Assessment Project. 10 The formulation of the project addressed a key constraint to
agricultural production by rehabilitating defective irrigation facilities. The other key
constraints identified were poor water resource management, limited agricultural
support services and lack of access to potable water in many rural communities.

B.

Rationale

10.
At the time the project was formulated, agriculture in Tajikistan contributed
about 20% of gross domestic product and provided a livelihood for 52% of the
workforce (footnote 1). About 73% of the population lived in rural areas. Agricultural
production depended on irrigation, without which the land had little production
potential. Extensive irrigation systems, mostly built during the former Soviet era,
covered nearly half of the countrys relatively flat land. The irrigation and associated
drainage systems rapidly deteriorated due to poor management during the civil war,
and the lack of maintenance. Improving the performance of irrigated agriculture
required rehabilitating irrigation and drainage systems and implementing more
efficient water management. Accumulated debts were widespread across farms due to
poor loan administration and a drop in the world price of cotton fiber. Widespread
poverty, inefficiency of traditional farm structures, and weak fiscal capacity slowed the
progress of agricultural reforms. The reform process needed to be expanded and
deepened to restore farmers incentives, enhance the productivity and profitability of
agriculture, and improve the living conditions of the rural population.
11.
In this context, the project aimed to support the Government of Tajikistan in
the rehabilitation of selected irrigation and draining facilities, provision of associated
farm production support services, and construction of rural water supply in the main
cotton production regions of Khatlon and Sughd. In parallel with these, the project
9
10

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

Design and Implementation


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

C.

Cost, Financing, and Executing Arrangements

12.
The project cost was estimated at $43.75 million, comprising $24.43 million in
foreign exchange costs and $19.32 million in local currency costs (Appendix 2, Table
A2.1). It was to be financed by an ADB Special Fund loan of $35 million, government
funds of $7 million, and contributions from beneficiaries of $1.75 million. The actual
project cost was $49.97 million, comprising foreign exchange costs of $34.50 million,
and local currency costs of $15.47 million. ADB financed $40.10 million, 11 the
government $8.11 million, and the beneficiaries $1.76, mainly in the form of labor
during construction and rehabilitation works. The emergency assistance to rehabilitate
the Dehkanabad canal and reconstruct the embankment on the Pyanj River amounted
to $7.94 million. Technical assistance of $960,000 was approved to provide advisory
support to the project, of which $918,941 (96%) was utilized.
13.
The implementation arrangements as proposed at appraisal were followed. The
MWRLR was the executing agency, responsible for the overall management and
implementation of the project. The Agriculture Academy of Sciences was responsible
for implementing the subcomponent on farm demonstrations and promotion of
improved seeds. A high-level project steering committee was established and
functioned during project implementation to facilitate interministerial coordination and
to provide oversight and guidance on implementation. A project management office
(PMO) was established within the MWRLR to manage project activities on a daily basis,
and to liaise with ADB and the coordinating bodies. Three project implementation units
(PIUs), one in each project area, were set up for project implementation and
maintaining liaison with the PMO, local administration, and beneficiary organizations.

D.

Procurement, Construction, and Scheduling

14.
ADB Procurement Guidelines (2013, as amended from time to time) were
followed in the procurement of goods and services. In total, 155 contracts were
awarded amounting to $48.29 million (Appendix 2, Table A2.2). Of these, 78 civil
works contracts worth $35.90 were awarded. Only one was awarded through
international competitive bidding procedures, while the remaining 77 civil works
contracts were awarded through national competitive bidding. Agricultural equipment
costing $2.90 million was procured for use by the FMUs through international
competitive bidding and shopping. Equipment, machinery and vehicles amounting to
$5.8 million were procured by direct purchase, shopping, and limited international
bidding. Contracts for consulting services amounted to $2.55 million. International
competitive bidding was used to contract international consultants.
15.
The schedule for project implementation was for 6 years, 20032009. Loan
effectiveness was slightly delayed to 14 August 2003 from the expected date of 31 July
2003, due to the time involved in obtaining the borrowers legal opinion. Deployment
of staff was delayed for the PMO and PIU, which began to function fully only in midDecember 2003. This delayed consultant recruitment, which in turn delayed the
implementation of civil works. Specifically, the rehabilitation of the Vakhsh irrigation
scheme was delayed by 21 months, while for the Khojabakirgan scheme it was delayed
11

The increase in the dollar-denominated loans was due to the decline in the dollarspecial drawing right
rate.

Tajikistan: Agriculture Rehabilitation Project


by 12 months. The rehabilitation of the Kyzylsu-Yakhsu scheme was on schedule, as it
was not due until the third quarter of 2005.
16.
These delays caused further delays in the implementation of other components.
The implementation of agricultural support for dehkan farms was 12 months behind
schedule. As regards the component on improving PWS, the delays in constructing
water supply systems ranged from 15 to 30 months. To compensate for the start-up
delays, a revised implementation schedule was approved by ADB. Closing of the loan
was scheduled for 30 September 2009, but a grace period of 3 months was allowed to
ensure payments for expenditures incurred prior to the closing date.

E.

Design Changes

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

Training was
Outputs
provided to 960 F.
farmers on seeds 18.
The outputs of the four project components are discussed below. Appendix 3
selection, crop presents the project framework and achievements.
diversification,
1.
Agricultural Support for Dehkan Farms
use of fertilizers,
and on-farm 19.
The component on agricultural support for dehkan farms was envisaged to
water promote improved farm technologies, establish demonstration farms, and to set up
management three FMUs. The Agricultural Academy of Sciences was the implementing agency for
The assistance
provided to
dehkan farms
was limited to
the duration of
the project and
no mechanism
was set in place
to ensure
sustainability
beyond the life
of the project

the subcomponents on farm demonstrations and promotion of improved seeds. During


project implementation, eight demonstration farms of 10 ha each were established for
soil and seed improvement and crop husbandry trials. 12 Training was provided to 960
farmers on seeds selection, crop diversification, use of fertilizers, and on-farm water
management. The demonstration farms and training provided to farmers helped
increased farm productivity, and increased farmers knowledge on improved farm
technologies, diversified cropping, and better use of land. It was envisaged that the
activities of the demonstration subprogram would continue after project completion.
However, this was not realized. The assistance provided to dehkan farms was limited to
the duration of the project and no mechanism was set in place to ensure sustainability
beyond the life of the project. The demonstration farms and support services to dehkan
farms ceased to operate after the project was completed. Most of the demonstration
farms were later distributed to the population by the government. 13
20.
As envisaged at appraisal, three FMUs were established. Subsidiary loan
agreements of $1.0 million each were made with the Ministry of Finance (MOF) to each
of the three FMUs, one in each project system. These FMUs were to provide farm
12
13

Three in Khojabakirgan, three in Vakhsh, and two in Kyzylsu-Yakhsu.


For example, a 439-ha demonstration farm in Vakhsh visited by the independent evaluation mission was
distributed to individual and family dehkan farms after completion of the project.

Design and Implementation

machinery services to dehkan farmscollecting service charges determined on a


commercial basis, and were to become eligible for privatization once their loans from
the MOF had been repaid. Initially, the demand for services was adequate for FMUs to
repay their loans on time. However, the increased availability of leased agricultural farm
equipment and machinery reduced the demand for FMU services. Farmers began to
have the option to use more modern, mobile, and relatively cheaper equipment
through lease agreements. Over time, FMUs were not able to generate sufficient
revenues to recover costs, resulting in failure to pay their loans on time. 14
2.

Rehabilitation of Irrigation and Drainage Systems

21.
The project fully rehabilitated the irrigation and drainage facilities of three
major systems comprising: (i) Khojabakirgan irrigation system in B Gafurov and J
Rasulov districts of Sughd region, (ii) Vakhsh irrigation system in Bokhtar, Vakhsh, and
Kolkhozabad districts of Kurgan-Tyube Zone in Khatlon region, (iii) the Kyzylsu-Yakhsu
irrigation system in Vose district of Kulyab region. The construction and rehabilitation
undertaken by the project met the target of providing a steady supply of irrigation
water to 85,000 ha of land. As of the end of December 2012, the area covered by the
three rehabilitated irrigation systems had increased to 93,000 ha (Appendix 4, Table
A4.1).
22.
In terms of outreach, the target of 471,000 beneficiaries reached by the
improved irrigation and drainage system was met, as project areas were rehabilitated
as expected at appraisal. As of the end of December 2012, the number of beneficiaries
covered by the rehabilitated infrastructure had increased to 521,000 (Appendix 4, Table
A4.1).
23.
Following the rehabilitation of irrigation infrastructure, the average yields of
cotton increased from about 1.9 tons/ha to 2.7 ton/ha, exceeding the targets of 2.22.4
tons/ha set at appraisal.15 However, total production of cotton in project areas declined
and was not at the level expected at appraisal (Appendix 4, Figure A4.1). In the
Khojabakirgan scheme total production fell from 52,800 tons in 2003 to 31,057 tons in
2011 (Appendix 4, Table 4.2). In Vakhsh, total production decreased from 69,681 tons
in 2003 to 52,528 tons in 2011. In the Kyzylsu-Yakhsu scheme, total production also
declined from 25,556 tons in 2003 to 19,323 tons in 2011. The general decline in
production of cotton was mainly due to the reduction in area planted with cotton, as
farmers diversified to more profitable crops. The governments policy of allowing
farmers freedom in crop selection encouraged this diversification (paras. 3435). In
20032008, there was an increasing trend in the production of crops other than cotton,
such as wheat, cereals, vegetables, fruits, potatoes, melons and gourds in the five
project districts (Appendix 4, Figures A4.1A4.2). Nonetheless, cotton and wheat
continue to dominate the cropping pattern. In 2003, when the project started, the two
crops together accounted for 93% of the area cultivated, and in 2008 accounted for
89%.16
24.
The rehabilitation of the Dehkanabad canal and strengthening of the
embankment along the Pyanj River was an emergency response to severe flooding in
14

15

16

Repayment of loans was agreed over a 20-year period, to be made in semi-annual payments. As of April
2013, Khojabakirgan FMU made its last payment in September 2008, Vakhsh FMU in August 2010, and
Kyzylsu-Yakhsu FMU in December 2011.
Based on data derived from focus group discussions with farmers representing the three irrigation systems,
and from the MWRLR.
Based on data derived from the government completion report, 2009.

Following the
rehabilitation
of irrigation
infrastructure,
the average
yields of cotton
increased from
about 1.9
tons/ha to 2.7
ton/ha,
exceeding the
targets of 2.2
2.4 tons/ha set
at appraisal

The number of
WUAs in
project areas
rose to 36 on
account of the
governments
continued
efforts to
transfer
management
of irrigation
and drainage
systems to
beneficiaries

Tajikistan: Agriculture Rehabilitation Project


Khamadoni District and was not included as a component at appraisal. The physical
targets for this assistance were met, in rehabilitating 10.4 km of the Dehkanabad canal
and strengthening 4.4 km of flood embankment.
25.
The project envisaged the establishment of 30 WUAs in six districts. During
implementation, it was agreed with ADB that 20 WUAsrather than the 30 originally
agreedwould be established in five districts, to better reflect hydrological factors
such as the borders of irrigation and command areas, and the boundaries of
administrative units. These WUAs covered 327 dehkan farms totaling 42,620 ha and
304,700 farm household beneficiaries. 17 The WUA boards and staff were trained in
WUA establishment, operation, financial management, and collection of fees. About
27% of the combined board membership of these WUAs was made up of women. As
of the end of December 2012, the number of WUAs in project areas rose to 36 on
account of the governments continued efforts to transfer management of irrigation
and drainage systems to beneficiaries. To support operation and maintenance (O&M) of
irrigation and drainage systems, WUAs collect fees from members based on the volume
of water used, which includes a markup over the rate charged by the MWRLR to WUAs.
On top of this, WUAs also charge a flat fee per hectare cultivated by farmer members.
26.
To build institutional capacity in water management, 15 water resource
management agencies within the MWRLR were supported with equipment and
vehicles.18 Yearly training was also conducted during 2005-2008 on the promotion of
water resources management, to build the capacity of these agencies.
3.

The water
supply
infrastructure
constructed in
selected
communities
of five districts
expanded the
area covered
by the water
supply
distribution
network

Improvement of Water Supply Systems

27.
The project aimed to improve PWS systems within the command areas of the
designated irrigation systems, to serve 87,000 beneficiaries who did not have a safe
source of water. The proposed works included the installation of 225 pumps for lifting
groundwater in Vakhsh District. However, due to the high mineral content found in
80% of the groundwater, it was decided to rehabilitate the main water pipeline in
Vakhsh, which used to supply water to most areas of southwest Vakhsh but had fallen
into disrepair due to lack of maintenance. This extended the area supplied with potable
water and increased the number of beneficiaries in Vakhsh District to 23,630 people
from the target of 9,200 people.
28.
The water supply infrastructure constructed in selected communities of five
districts expanded the area covered by the water supply distribution network increasing
the number of beneficiaries. At project completion, the estimated number of people
reached by improved water supplies was 180,546, of which more than 66,000 were
women. The number of beneficiaries is more than twice the appraisal estimate of
87,000 (Appendix 5, Table A5.1). Seven WSCs were established to manage and operate
the delivery of potable water to these beneficiaries. The project provided further
support to sanitary and epidemiological stations of the Ministry of Health in the five
project districts through building refurbishment and provision of office and laboratory
equipment.

17

Household members engaged in farming are considered members of their WUA. WUAs cover only areas
where farms have been privatized.
18
Support for equipment included measurement devices, communication facilities, electrical equipment, and
computers.

Design and Implementation


4.

Project Management, Monitoring, and Evaluation

29.
As envisaged in the project design, the PMO and three PIUsone in each of the
three project areaswere established on 13 May 2003. A high-level project steering
committee chaired by the first deputy Prime Minister was established and functioned in
providing policy guidance and facilitating interministerial coordination during
implementation. The PMO was led by a project director and the PIUs by deputy project
directors.
30.
A monitoring and evaluation (M&E) unit was established within the PMO to
monitor the environmental and social impact of the project. This monitoring program
was developed for the project implementation period and was not continued after
project completion.

G.

Consultants

31.
ADB Guidelines on the Use of Consultants (2013, as amended from time to
time) were used in the selection of consultants. A $2.5-million consulting services
contract, including input of 87 international person-months and 1,862 national personmonths was awarded to Louis Berger Group (LBG) in June 2004. The consultants began
to perform their duties in July 2004.
32.
In accordance with their contract, in September 2004, LBG subcontracted the
design institute of Tojikgiprovodkhoz to conduct field surveys; prepare designs,
drawings, and bills of quantities; and estimate the costs for the irrigation and drainage
rehabilitation works. The institute provided experienced staff and adequate field
equipment to carry out the tasks. As a result, consultants were not needed for this
work and therefore the national consultant inputs were reduced by 154 person-months.
To support the emergency flood rehabilitation works on the Dehkanabad canal 6.65
international person-months and 66.00 national person-months of consulting services
were added. At the completion of the contract, 84.80 international person-months and
1,804.35 national person-months of consulting services had been utilized. The
consultants demonstrated flexibility in adjusting the structure of consultancy inputs to
the needs of the project and delivered satisfactory outputs. On the whole, the
performance of the consultants was satisfactory.

H.

Loan Covenants

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

I.

Policy Framework

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

The
consultants
demonstrated
flexibility in
adjusting the
structure of
consultancy
inputs to the
needs of the
project and
delivered
satisfactory
outputs

10

Tajikistan: Agriculture Rehabilitation Project


Beginning in the late 1990s, large former state and collective farms in Tajikistan were
systematically dismantled and handed over to farmers and farming groups as individual,
family, and collective dehkan farms, to promote private sector-led agricultural growth
and development. On 25 June 1996, Presidential Decree No. 522 abolished state
production quotas and dismantled administered pricing for all agricultural commodities,
thus encouraging farmers freedom to farm.
35.
In response to the growing farm debt, the government, on 5 March 2007,
enacted Resolution 111: Plan of Measures for Cotton Farm Debt Resolution in the
Republic of Tajikistan for 2007-2009. This resolution included policy measures aimed at
creating a better enabling environment for cotton producers, such as a provision
prohibiting district authorities from confiscating land based on the purpose of use and
provisions guaranteeing no interference in farmers freedom to farm. The resolution
also called for the design of procedures on the resolution of farm debts.

In 2006, a
separate law
on WUAs was
enacted
providing the
legal
regulations for
the
establishment,
activities, and
management
of WUAs

36.
In July 2009, the government embarked on a comprehensive agrarian reform
process through Resolution 406, which proposed a number of measures to resolve the
cotton debt and called for an action plan for reforming the countrys agriculture sector.
It provided for further implementation and enforcement of Resolution 111, thereby
supporting private sectorled agricultural growth and development, based on existing
national laws and policies. Further, on 1 August 2012, the government enacted the
Program for Reforming the Agriculture Sector 20122020. The program aims to (i)
develop productive and profitable agriculture on the basis of sustainable utilization and
management of natural resources; and (ii) conduct overall agricultural reform,
including structural and institutional reforms at national and subnational levels.
37.
As regards the water sector, the Water Code of 2000 regulates the overall use
of water resources in Tajikistan and provides the basis for the formation of WUAs. The
code is outdated, has many amendments, is not based on integrated water resources
management (IWRM), nor is it in line with modern international practices.19 In 2006, a
separate law on WUAs was enacted providing the legal regulations for the
establishment, activities, and management of WUAs, as user-led non-government
organizations for the O&M of irrigation systems.
38.
In April 2011, the government initiated the Water Sector Reform developed
with support from the donor community. 20 The reforms were based on the principles of
IWRM, 21 and aimed at (i) water management based on river basins (instead of
administrative boundaries); (ii) a single body overseeing nationwide water resource
management; (iii) control of water operation through appropriate agencies; (iv)
management of water by water users at the highest appropriate level; and (v)
implementation of river basin management units. The process of transition towards
IWRM implies complicated institutional and economic reforms in the water sector. The

19

20

21

European Union Water Initiative. 2011. National Policy Dialogue on Integrated Water Resources

Management in Tajikistan Under EU Water Initiative: Country Report on Mapping of Major Stakeholders
and Programmes in Tajikistan. Dushanbe.
United Nations Food and Agriculture Organization. 2011. Water Reform Strategy for the Republic of
Tajikistan. Draft Report of the Donor Coordination Council. Dushanbe.
Integrated management means that all the different uses of water resources are considered together.
Water allocations and management decisions consider the effects of each use on the others. They are able
to take account of overall social and economic goals, including the achievement of sustainable
development. IWRM is a flexible, common-sense approach to water management and development.

Design and Implementation


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

22

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

11

CHAPTER 3

Performance Assessment
A.

Overall the
project is
rated
successful

Overall Assessment

Overall the project is rated successful (Table 1). It is rated relevant, effective,
efficient, and less than likely sustainable. The objectives of improving living conditions
39.

in project areas and instituting measures to sustain the benefits derived from the
project were largely met. The project contributed to increasing incomes, reduced
waterborne diseases, and provided greater access to safe drinking water. Further, the
project facilitated the creation of beneficiary-managed WUAs and WSCs, which were
nonexistent prior to rehabilitation. The institutional capacity of the MWRLR was
strengthened through support for national and local networks for the establishment
and expansion of WUAs, training on water resource management, and provision of
equipment. The institutional structures established by the project will help sustain the
benefits realized during implementation. However, the revenues collected by WUAs
from members have not been adequate to fully cover the cost of O&M of tertiary
systems.
Table 1: Overall Performance Assessment
Criterion
Relevance
Effectiveness
Efficiency
Sustainability
Overall Ratinga

Weight (%)
25
25
25
25

Assessment
Relevant
Effective
Efficient
Less than likely
Successful

Rating Value
2
2
2
1

Weighted Rating
0.50
0.50
0.50
0.25
1.75

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

B.

It was
unrealistic to
expect WUAs
to handle
O&M of all
the projects
irrigation
and drainage
facilities
within the
limited time
frame

Relevance

40.
At appraisal, the project was relevant to the stated poverty reduction goal in
the project areas and to the objectives of the government and ADB. During
implementation it remained consistent with the poverty reduction strategies of the
government and ADB. It continued to be relevant at completion in terms of addressing
the critical constraints to agricultural production and restructuring agriculture through
privatization. By rehabilitating the irrigation and drainage systems, establishing new
beneficiary-led water user organizations, and strengthening the capacity of water
institutions, the project helped increase farm productivity and diversification in
agriculture, contributing to improvement in farm household incomes. The construction
of PWS systems was relevant to the need for safe drinking water, reducing waterborne
diseases, and improving living conditions in the project areas. The institutional
arrangement of letting WUAs manage tertiary irrigation and drainage systems was
appropriate in view of the governments policy of supporting private sector-led
agricultural growth and development. However, given the complicated process
involved in the implementation of water sector reforms, it was unrealistic to expect
WUAs to handle O&M of all the projects irrigation and drainage facilities within the
limited time frame of the project (footnote 1, para. 34).

Performance Assessment
41.
The project design was adequate in addressing the key constraints of defective
irrigation, poor water resource management, limited agricultural support services, and
lack of access to potable water in the project areas. The financing instrument,
comprising a loan from ADB Special Fund resources and a TA grant to support the
resolution of accumulated farm debt, was appropriate. This evaluation rates the project
relevant based on its significance to achieving the stated goal of reducing poverty in
the project area on a sustainable basis.

C.

Effectiveness

42.
The expected outcomes of the project were (i) improvement in the living
conditions of farming communities in the project area, and (ii) institutionalization of
measures to sustain the benefits derived from the project (Appendix 3). The project was
rated effective in achieving these expected outcomes.
43.
The rehabilitation of irrigation and drainage systems increased the yield of
cotton by about 34% and wheat by about 31% (Appendix 8, para. 7). Real farm income
increased by 44% per hectare of cotton and 41% per hectare of wheat (Appendix 8,
paras. 910). During implementation, the average monthly nominal wages of the
population in the project area steadily increased from TJS32 in 2003 to TJS195 in 2009
(Appendix 7, Figure A7). In 2011, average wages in the project area rose further to
TJS282. The improvement in PWS significantly reduced the incidence of waterborne
diseases. From 2004 to 2009, reported cases of malaria fell by 96% (from 642 to 22),
acute intestinal disease by 78% (from 16,271 to 3,593), typhoid fever by 55% (from
152 to 59) and hepatitis by 15% (from 1,366 to 1,166) (Appendix 5, Table A5.2). By the
end of 2008, safe drinking water was made available to 180,546 people, substantially
higher than the target of 87,000 set at appraisal; this number further increased to
198,600 by the end of 2012. The project helped improve living conditions in the project
areas by contributing to an increase in incomes, significantly reducing waterborne
diseases, and providing greater access to improved PWS.
44.
The envisaged establishment of WUAs and WSCs was realized. Prior to the
project there were no WUAs and WSCs in the project areas. The creation of these
institutions empowered the beneficiary communities to manage irrigation and potable
water supplies, organize water distribution, and arrange O&M of their systems. These
institutions have remained operational and continue to collect fees from members for
O&M. Further, the projects establishment of national and local WUA support units
within the MWRLR will expand the network of WUAs in other areas in line with the
governments reform process of reorganizing and privatizing farms.
45.
While measures were instituted to sustain the benefits of the rehabilitated
irrigation and potable water systems, this has not been the case for agricultural
support through demonstration farms. The demonstration farms were beneficial to
dehkan farms but no mechanism was put in place to sustain the benefits beyond the
life of the project. Sustaining the services provided by the demonstration farms to
dehkan farms would have entailed additional operation and management costs. The
mechanization process is likely to be sustained due to the entry into the market of farm
equipment and machinery that can be leased by farmers at lesser cost, even though
this has led to reduced demand for the services of FMUs over time.

13
The project
design was
adequate in
addressing
the key
constraints of
defective
irrigation

The
rehabilitation
of irrigation
and drainage
systems
increased the
yield of cotton
by about 34%
and wheat by
about 31%

14

Tajikistan: Agriculture Rehabilitation Project

D.

Efficiency

46.
Quantitative analysis of efficiency was undertaken based on ex post evaluation
of the EIRR. The EIRR was calculated at 18%, indicating efficient use of resources in
achieving outcomes, and economic viability at a discount rate of 12% (Appendix 8). 23
This re-estimated EIRR is much lower than the EIRR of 22.9% estimated at appraisal. It
should be noted, however, that the EIRR at appraisal did not include the economic
value of PWS benefits. When benefits were limited only to irrigation, the re-estimated
EIRR dropped to 15.84%, which still indicates efficient use of resources. This value,
however, differs from the PCRs estimate of 19.3% because the re-estimation assumed
higher yields and lower economic prices.
47.
Sensitivity analysis indicates that the project continues to be efficient for the
alternative scenario of 5% lower yields for cotton and wheat, although the EIRR is only
marginally higher than 12%. It also continues to be efficient for the alternative scenario
of 5% lower cotton and wheat prices, with an EIRR of 16.26%. However, the project is
no longer viable if both the yields and prices of cotton and wheat are 5% lower (EIRR =
10.24%). Given that the economic viability of the project is sensitive to declines in the
yield of cotton and wheat, it is imperative that irrigation facilities be well maintained
throughout the projects economic life. Farmers freedom to diversify production into
vegetables or other crops would be necessary to ensure stable farm incomes when
faced with a decline in the price of cotton or wheat. Profitable cropping would also
help WUAs collect user charges for the O&M of irrigation facilities, preventing them
from falling into a state of neglect and disrepair.

WUAs
capacity for
effective
O&M of
tertiary
systems has
been
constrained
by the
insufficiency
of fees
collected

48.
In terms of efficiency of process, the project is rated less than efficient.
Deployment of staff for the PMO and PIUs was delayed, which in turn delayed the
recruitment of implementation consultants for civil works (paras. 1516). Consequently,
the implementation of civil works was delayed by about 2 years. The delay in
implementation start-up also had an effect on the other components apart from
increasing the cost of civil works. The work on agricultural support for dehkan farms
was 12 months behind schedule, while delays in the construction of water supply
systems ranged from 15 to 30 months. Overall, taking into account the less than
efficient process and the EIRR of 18%, the project is rated efficient.

E.

Sustainability

49.
The sustainability of project outcomes is rated less than likely. Institutional
measures were undertaken to sustain the benefits of the rehabilitated physical
infrastructure, including strengthening the MWRLR and facilitating the creation of
WUAs and WSCs. The MWRLR was mainly responsible for maintenance of project
infrastructure in primary and secondary systems, while the WUAs were responsible for
the tertiary systems. Fields visits of the IEM revealed that proper maintenance has been
carried out by the MWRLR on project infrastructure in primary and secondary systems.
However, WUAs capacity for effective O&M of tertiary systems has been constrained by
the insufficiency of fees collected from dehkan farms to cover costs of maintenance,
and lack of adequate equipment and machinery. As a result, WUAs generally have been
unable to properly maintain the tertiary systems. The ongoing Water Sector Reform is a
positive development in that it will further strengthen the capacity of WUAs. It will also
23

Based on ADB guidelines, a project with an estimated EIRR greater than 18% is rated highly efficient. See
Guidelines for Preparing Performance Evaluation Reports for Public Sector Operations
(http://www.adb.org/sites/default/files/guidelines-pper-pso.pdf)

Performance Assessment
help achieve sustainability of operations, as it will involve application of IWRM
principles and asset management transfer from local government and the MWRLR to
the WUAs. However, the realization of the full benefits to WUAs will take time, as the
process of reforms is long and complicated.
50.

The demonstration farms subprogram was introduced to newly organized

dehkan farms to promote technologies that could dramatically increase productivity. It

was envisaged that the activities of these demonstration farms would continue after
project completion. The sustainability of the demonstrations farms is unlikely as many
of these farms have been distributed by the government to the rural population and no
longer provide services to dehkan farms. Further, support for the management,
operation, and maintenance of these farms was not continued after project completion.
The sustainability of FMUs is rated less than likely, as profitability declined and the
FMUs have not been able to repay their loans with the MOF on time. In view of this,
the FMUs may not be eligible for privatization within the period set in the subsidiary
loan agreement with MOF. The mechanization process may, however, be sustained due
to the increased availability of farm equipment and machinery on lease.

15

CHAPTER 4

Other Assessments
A.

Impact

51.
Socioeconomic impact. The project had a significant socioeconomic impact. The
expected impact of the project was poverty reduction in the project areas from 88% at
appraisal (2002) to 43% at project completion (2008). The poverty headcount ratio
using the national poverty linefell from 88% at appraisal to an average of 41% in
2008 for the five project districts, indicating that the expected impact on poverty was
realized (Appendix 7, Table A7.1). The fall in poverty incidence in the five project areas
was greater than that observed at the national level. At the national level, the poverty
headcount ratio fell from 72.4% in 2003 to 47.2% in 2009. Farmers reported in the
FGDs conducted by the IEM that the majority (60%) of them had experienced an
average increase in farm incomes of more than 50% (Appendix 7, Table A7.2). Farmers
attributed this increase mainly to the rehabilitated irrigation and drainage system and
use of farm machinery. Health conditions improved as indicated by the significant
reduction in waterborne diseases (para. 43); and savings in medical expenses were
generated by beneficiaries of the project due to the improved PWS system (Appendix 8,
para. 14). Further, farmers reported in the FGDs that time spent in fetching water
significantly decreased from an average of 2.5 hours per day before rehabilitation of
the water system to 0.4 hours per day after rehabilitation, benefiting women and
resulting in time savings of 113 hours a year per household (Appendix 8, para. 15).
Further, by the end of 2012, 198,600 people in project areas had benefited from access
to safe drinking water.

The
strengthening
of water
management
institutions will
enhance the
governments
efforts in farm
restructuring
and
privatization

52.
The emergency assistance provided by the project for the rehabilitation of the
embankment of the Pyanj River and the Dehkanabad canal had significant benefits for
the population affected by the severe flooding in Khamadoni District in June 2005. The
assistance, which was not foreseen at appraisal, gave protection to 50,900 ha,
including 23,000 ha of the Chubek irrigation system that was cut off from the irrigation
supply. In addition, houses and other infrastructure were protected.
53.
Institutional impact. The institutional impact of the project was significant. The
project facilitated the creation of WUAs and WSCs. WUAs have been given the
responsibility to manage the irrigation and drainage system in their areas and to collect
fees to finance these operations. The institutional capacity of the MWRLR was
strengthened through support for national and local networks for the establishment
and expansion of WUAs, training on water resource management, and provision of
equipment and vehicles. Beneficiary-led WSCs were established to manage the PWS
systems. These WSCs have been able to fund their operations from fees collected for
water services. To complement the improvement in PWS, the project provided support
to local health-monitoring stations of the Ministry of Health in the form of laboratory
equipment and building refurbishment. The strengthening of water management
institutions will enhance the governments efforts in farm restructuring and
privatization and establish a strong foundation for the expansion of beneficiary-led
management of agricultural infrastructure.

Other Assessments
54.
Environmental impact. The project had no significant adverse effect on the
environment. During the 20032008 implementation period, agricultural land in
project areas classified by the Ministry of Irrigation and Water Resources as good
increased by 12,806 ha or 16%, and as satisfactory increased by 3,041 ha or 10%
(Table A7.3). Agricultural lands classified as unsatisfactory declined by 7,349 ha or
58%. Land area with critical levels of groundwater salinity decreased by 47% and that
with soil salinity decreased by 26%. The rehabilitation of the Dehkanabad canal and the
reconstruction of the Pyanj River embankment provided protection from severe
flooding that could damage rural infrastructure and the environment. On the whole,
the project had a significant positive impact on the environment.

B.

Asian Development Bank Performance

55.
The performance of ADB was satisfactory. ADB adequately supervised the
project, with 9 missions fielded in December 2002October 2009. On 1 September
2005, project administration was transferred to the Tajikistan Resident Mission. This
facilitated closer supervision of the project and coordination with the PMO. ADB was
responsive to the requests of the PMO and provided assistance whenever necessary,
particularly in documentation and administration. ADBs response to the governments
request for emergency assistance following the flooding of the Pyanj River was timely
and appropriate. ADB took into account the lessons learned from previous projects,
particularly the need to address defective irrigation facilities that posed a significant
constraint to agricultural production.

C.

Borrower and Executing Agency Performance

56.
The performance of the borrower was satisfactory. The borrower satisfactorily
complied with the loan covenants and provided the required counterpart funds. The
high-level project steering committee formed for the project met regularly and
provided oversight and guidance on implementation. From February 2008 to
September 2009, the ADB project performance reports rated the performance of the
project as highly satisfactory. The MWRLR effectively managed a large number of civil
works contracts, including contracts related to the emergency assistance for the
rehabilitation of the Dehkanabad canal and reconstruction of the Pyanj River
embankment. The MWRLR ensured that physical targets for reconstruction and
rehabilitation were met. The performance of the MWRLR as executing agency was
satisfactory.

D.

Technical Assistance

57.
A $960,000 advisory technical assistance grant 24 was approved to assist the
government in (i) resolving accumulated farm debts; and (ii) promoting, implementing,
and monitoring policy reforms, particularly in agricultural marketing and water
resources management. The TA was signed on 7 March 2003 and was completed on 30
September 2006. It used 26 international and 39 national person-months of
consultancy inputs. Of the $960,000 approved for the TA, $918,942 (96%) was used. In
the process of implementation, it became apparent that the main issue was the rising
debt of cotton-producing farms, which was estimated at $240 million in January 2004.
Hence, the TA eventually focused mainly on the cotton debt issue.

24

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

17
On the
whole, the
project had a
significant
positive
impact on
the
environment

18

Tajikistan: Agriculture Rehabilitation Project


58.
The findings of the TA became the basis for the strategic agenda of ADB for
Tajikistans agriculture sector. The TA report was effective in drawing the attention of
government to the gravity of the farm debt problem, which undermined the
performance of the agriculture sector. Through ADBs follow-up effort, the government
formulated a Comprehensive Farm Debt Strategy, and a high-level government
institution, the Independent Commission, served as the focal point on cotton farm debt.
The forums initiated by the TA were instrumental in facilitating the international
community to come up with a consensus on a comprehensive farm debt resolution,
and in providing effective donor coordination, with ADB taking the lead role. Lastly, the
TA served as valuable input to the preparation of the Sustainable Cotton Subsector
Project approved on 3 November 2006, without project preparatory TA.25
59.
The TA was highly successful. The TA report has become a highly significant
analytical piece in understanding the farm debt problem confronting the Tajik cotton
sector. A milestone TA outcome was the approval of Resolution 111 or plan of
measures for farm debt resolution in March 2007 (para. 35). This road map, which sets
out the short- and medium-term policy and institutional reforms required for
sustainable farm debt resolution and for the development of profitable farms, was a
concerted effort of both the donor community and government.

25

ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan and

Asian Development Fund Grant to the Republic of Tajikistan for the Sustainable Cotton Subsector Project.
Manila.

CHAPTER 5

Issues, Lessons and FollowUp Actions


A.

Issues

60.
The MWRLR has been able to properly maintain project infrastructure in
primary and secondary systems using funds from water charges and budgetary
allocations. However, WUAs capacity to properly maintain and operate the tertiary
systems has been constrained by the insufficiency of fees collected from dehkan farms.
Without sufficient revenues to fully cover the costs of O&M, the maintenance of these
systems is jeopardized. Moreover, since the dilapidated and inefficient irrigation
infrastructure inherited from the soviet era was rehabilitated, as opposed to newly
constructed, the O&M costs are likely to be higher. Funds are needed for adequate
equipment, machinery, and manpower to enable WUAs to effectively carry out O&M of
irrigation systems and expansion on a sustainable basis.
61.
Although cotton farming is economically profitable given the high world price
of cotton, financial viability becomes an issue as the farm gate price of cotton tends to
be low. Levying of export taxes by the government and lack of competition due to
market distortionssuch as local government control on the movement of cotton
tends to decrease the prices received by farmers, affecting their profits. This in turn
affects the farmers ability to pay user charges for water.
62.
Apart from insufficient revenues, the inability of WUAs to generate sufficient
resources may also be partly attributed to their institutional readiness to assume
greater responsibilities for O&M, considering that they were created only during
implementation of the project. Revenue collection will improve if the WUAs are better
equipped to exercise their authority, and allocate water more efficiently. The ongoing
water sector reforms include institutional reforms that would strengthen the capacity
of WUAs, but the process is long and complicated.
63.

FMUs established in 2004 were envisaged to provide farm machinery services to

dehkan farms on a commercial basis. They continued to operate after project

completion but with declining profitability. The demand for their services decreased
due to increased availability at lower costs of modern machinery and equipment
through lease. As a result, FMUs have not been able to repay their loans with the MOF
on time. With the decreased demand for their services, the sustainability of FMU
operations is in question.

B.

Lessons

64.
Mechanisms for sustaining support services for dehkan farms should have been
incorporated in the project design. Agricultural support provided to dehkan farms was
limited to the duration of the project. No mechanisms were put in place to ensure

WUAs
capacity to
properly
maintain and
operate the
tertiary
systems has
been
constrained by
the
insufficiency
of fees
collected from
dehkan farms

Revenue
collection will
improve if the
WUAs are
better
equipped to
exercise their
authority, and
allocate water
more
efficiently

20 Tajikistan: Agriculture Rehabilitation Project


sustainability of benefits beyond the projects life. The activities of demonstrations
farms were very helpful to dehkan farms in increasing productivity, but these were
stopped after project completion. Further, most of these demonstration farms were
distributed to individual and family dehkan farms after completion of the project.
Agricultural extension services are in the nature of merit goods, with positive
externalities to the society. Hence mechanisms should have been established for the
provision of these services on an ongoing basis to ensure sustainability of productivity
gains.
65.
The phasing of cost recovery and measures to ensure sustainable operation and
maintenance of tertiary systems should have been identified at the outset. Transferring
management of tertiary irrigation and drainage systems to beneficiaries as a means for
participatory water management was appropriate and in line with IWRM principles.
However, the phasing of cost recovery and measures needed for WUAs to become
sustainable should have been made clear at the outset. Measures for achieving full cost
recovery should have been identified early in the implementation process.
66.
A monitoring and evaluation system needs to be permanently established
within the Ministry of Water Resources and Land Reclamation. While it was established
as part of project management, M&E was discontinued after the PMO closed. Hence,
project specific data cannot be provided for evaluating long-term outcomes, impact,
and poverty reduction.

The MWRLR
should take
measures to
support
WUAs in the
O&M of
irrigation
systems until
they are able
to fully
recover costs
from water
fees

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

C.

Follow-Up Actions

68.
Operation and maintenance of project infrastructure. The MWRLR should take
measures to support WUAs in the O&M of irrigation systems until they are able to fully
recover costs from water fees. Clear measures and mechanisms need to be established
for sustainable O&M of project infrastructure managed by WUAs. Gradual or phased
increases in fees charged to members over a specific period of time may be considered
to help achieve sustainable O&M. ADB needs to closely monitor both cost recovery
measures for sustainable O&M of tertiary systems, and also MWRLR maintenance of
primary and secondary systems. Given the extent of deterioration in the irrigation
infrastructure, new construction should be considered in place of rehabilitation and
repair.
69.
Farm machinery unit operations. ADB and the MOF need to discuss
privatization or other measures that will ensure the competitiveness and profitability of
FMUs.

Appendixes

APPENDIX 1: EVALUATION METHODOLOGY


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

1.

2.
The IEM was fielded to Tajikistan on 2227 April 2013. It met officials from various agencies
including the Ministry of Water Resources and Land Reclamation (MWRLR); the Ministry of Agriculture;
the Agriculture Academy of Sciences; the Ministry of Finance; Madad; local water management offices
of the MWRLR in Vakhsh and Bokhtar districts; the water users association and water sanitation
council in Bokhtar; the farm machinery unit in Bokhtar; the Farming Science Institute; and the World
Bank. The IEM conducted field visits in selected project areas particularly in the districts of Bokhtar and
Vakhsh. It also visited selected dehkan farms and the Vakhsh and Kyzylsu-Yakhsu irrigation systems.
3.
FGDs were conducted with beneficiaries in districts representing the three irrigation systems to
assess the benefits of the project to households and to gather data on crop budgets for re-estimation
of the EIRR. An FGD tool was used to gather the information needed. Table A1 shows the FGDs
conducted for the performance evaluation report.
Table A1: Focus Group Discussions
Irrigation System/District
Khojabakirgan system
B. Gafurov District
Kyzylsu-Yakhsu system
Vose District
Vakhsh system
Bokhtar District
Vakhsh District
Total

Number of FGDs

Number of
Participants

12

15

1
1
6

7
6
40

FGD = focus group discussion.


Source: Independent Evaluation Department.

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

APPENDIX 2: PROJECT COSTS AND CONTRACT AWARDS


Table A2.1: Project Costs
($000)
Category
1. Civil works
2. Equipment and vehicles
a. Equipment, machinery, and goods
b. Vehicles
3. Consulting services
4. Traininga
5. Credit line to farm machinery units
6. Project management
7. Interest charges
8. Unallocated
Total project costa

Appraisal Estimate
Foreign
Local
Total
12,313
11,545
23,858
5,165
296
1,695
0
0
228
1,377
3,356
24,429

1,486
52
805
0
0
934
0
4,498
19,321

6,651
348
2,500
0
0
1,162
1,377
7,854
43,750

Foreign
22,557

Actual
Local
13,923

Total
36,479

5,351
320
2,370
0
2,901
252
755
0
34,504

293
7
214
0
7
1,025
0
0
15,468

5,644
327
2,583
0
2,907
1,277
755
0
49,972

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

Table A2.2: Contract Amounts by Type


Category
Civil works
Equipment and machinery
Vehicles
Consulting services
Training
Credit line to farm machinery units
Project management
Total

Number of Contracts
78
19
8
4
0
5
41
155

Amount ($)
35,900,055
5,425,671
327,394
2,553,014
0
2,900,529
1,187,463
48,294,126

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

APPENDIX 3: PROJECT FRAMEWORK AND ACHIEVEMENTS

Design Summary
Goal
Reduce poverty in the
project area on a
sustainable basis
Purpose
Improve the living
conditions of project area
farming communities

Institute measures to
sustain the benefits
derived from
improvements
implemented under the
project

Target Specified
at Appraisala

PPER Updatec

Poverty incidence in
project areas reduced
from 88% to 43%

Poverty incidence in four


project districts ranging
from 37% to 41%, and is
45% in the fifth

In 2008, average poverty


incidence in five project
districts was 41%, lower
than the national poverty
incidence of 48%

Farm incomes increased


on 85,000 hectares (ha),
directly benefiting about
471,000 people

Farm incomes increased


on 84,600 ha; number of
beneficiaries as expected
at appraisald

Farm incomes increased


on 93,000 ha, benefitting
516,100 people as of endDecember 2012

Access to improved
potable water provided
for 87,000 people living in
rural areas

Improved water supply


provided to 180,546
people

Safe drinking water


supplied to 198,600
people as of endDecember 2012

Incidence of waterborne
diseases reduced in
project areas

Incidence of four key


diseases reduced by
between 28% (hepatitis)
and 83% (malaria)

Reported cases of malaria


reduced by 96%, acute
intestinal disease by 78%,
typhoid by 55%, and
hepatitis by 15%

Management of irrigation
systems transferred to 30
water users associations
(WUAs)
Capacity of Ministry of
Water Resources and Land
Reclamation (MWRLR)
strengthened

Outputs
1. Agricultural support
services for dehkan farms

Actual Achievementb

Promotion of improved
technologies including soil
survey and testing, seed
multiplication,
demonstration farms, and
farm machinery services

20 WUAs established and


responsible for tertiary
irrigation systems on
farms
15 MWRLR agencies and
the monitoring function
of the Ministry of Health
in project areas
strengthened
Eight demonstration farms
of 10 ha established: three
in Khojabakirgan, three in
Vakhsh, and two in
Kyzylsu-Yakhsu.
Training provided to 960
farmers
All farms were providing
demonstration services at
the time of project
completion review.
Three farm machinery
units (FMUs) established

36 WUAs established as of
end-December 2012

National and local WUA


support units within
MWRLR established

Training stopped after


project completion
Most of the
demonstration farms were
distributed to the
population and no longer
provide services to dehkan
farms
FMUs continue to provide
services, although facing
declining profitability and
difficulty repaying loans to
Ministry of Finance

Project Framework and Achievements 25

Design Summary

2. Rehabilitation of
irrigation and drainage
(I&D) systems and
institutional support
2a. Inter-farm I&D
rehabilitation
(i) Khojabakirgan

(ii) Vakhsh

Target Specified
at Appraisala

Actual Achievementb
and providing a range of
30 agricultural operations
on a commercial,
profitable basis to about
150 project area farms

PPER Updatec
However, they succeeded
in encouraging machinery
use by farmers and in
developing a private rental
market for farm machinery
and equipment

I&D improved on over


36,000 ha with 193,500
beneficiaries

I&D improved on 36,000


ha; beneficiaries as at
appraisal

I&D improved on 38,000


ha with 204,100
beneficiaries in 2012

Cotton yield improved


from 1.5 tons/ha to 2.4
tons/ha

Cotton yield range in 2010


2.02.5 tons/ha

Average cotton yield


range 3.03.5 tons/ha
with projecte

Annual cotton output


increased from 27,750
tons to 54,000 tons
I&D improved on over
36,000 ha with 200,000
beneficiaries

Cotton production 24,500


tons in 2008

Annual average cotton


production of 37,210 tons
in 20032011

35,600 ha (actual
command area)
rehabilitated; beneficiaries
as at appraisal

I&D improved on 40,000


ha with 222,000
beneficiaries in 2011

Cotton yield in 2010 2.0


2.5 tons/ha

Average cotton yield


range of 3.03.2 tons/ha
with projecte

Cotton production 44,450


tons in 2008

Annual average cotton


production of 51,129 tons
in 20032011

I&D improved on 13,000


ha; beneficiaries as at
appraisal

I&D improved on 15,000


ha with 90,000
beneficiaries in 2011

Cotton yield improved


from 1.3 tons/ha to 2.2
tons/ha

Cotton yield in 2010 2.0


2.5 tons/ha

Average cotton yield of


3.0 tons/ha with projecte

Annual cotton output


increased from 7,319 tons
to 22,102 tons
Capacity building in
MWRLR

Cotton production 23,000


tons in 2008

Annual average cotton


production of 19,323 in
20032011

Cotton yield improved


from 1.6 tons/ha to 2.4
tons/ha

(iii) Kyzylsu-Yakhsu

2b. Support to water


resource management
agencies
2c. Organization and
training of WUAs

Annual cotton output


increased from 31,840
tons to 55,800 tons
I&D improved on over
13,000 ha with 78,000
beneficiaries

MWRLR responsibilities at
district level reoriented
WUA support units
established and training of
trainers conducted

15 water resource
management agencies
supported with vehicles,
other equipment, and
training
WUA support units
established in five project
area districts; 20 (rather

36 WUAs established

26

Appendix 3

Design Summary

Target Specified
at Appraisala
WUA support units
established in six districts
and 30 WUAs formed

3. Improvement of
potable water supply
systems
3a. Improvement of
potable water
physical
infrastructure

Potable water supply


system serving 87,000
beneficiaries improved
Education, training, and
social marketing of health
benefits provided
Organizational structures
institutionalized in
districts and villages

3b. Promotion and


establishment of water
and sanitation councils
4. Project management,
monitoring, and
evaluation

Actual Achievementb
than 30) WUAs
established in 5 (rather
than 6) districts to better
reflect physical and
administrative boundaries;
WUAs cover 427 dehkan
farms totaling 42,620 ha
and 304,700 farm
household beneficiaries;
WUA boards and staff
trained in operation
management, finance, etc.

PPER Updatec

Potable water provision to


180,546 people managed
through water and
sanitation councils

Water sanitation councils


continue to manage and
provide safe drinking
water to the population in
project areas

Sanitary and
epidemiological stations
of Ministry of Health in
five districts supported
with building
refurbishment and the
provision of office and
laboratory equipment

Water and sanitation


councils established
Project management
office and project
implementation unit staff
trained
Project implemented as
per schedule
Performance and financial
reports submitted on time
Monitoring and evaluation
systems in place and
working effectively

Project management
office and implementation
units established before
loan effectiveness in 2004;
technical and
administrative staff in
place throughout project
period
Staff recruited using
competitive, transparent
procedures and trained in
project management and
ADB procedures
Progress reports and
annual audit reports
submitted regularly and,
except for the 2006
annual audit, on time
Monitoring and evaluation
unit established in 2005
with two specialists;
baseline and regular
socioeconomic and

Project management
office closed after project
completion
Maintenance and
operation of monitoring
and evaluation system
stopped after project
completion

Project Framework and Achievements 27

Design Summary

Target Specified
at Appraisala

Actual Achievementb
environmental profiles of
project areas submitted

PPER Updatec

ADB = Asian Development Bank, PPER = project performance evaluation report.


a
Appendix 1 of ADB. 2002. Report and Recommendation of the President to the Board of Directors: Proposed Loan and
Technical Assistance Grant to Tajikistan for the Agriculture Rehabilitation Project . Manila.
b
By the time of the project completion review mission.
c
By the time of the independent project performance evaluation mission.
d
Since the project areas were rehabilitated as expected at appraisal, the number of beneficiaries has remained unchanged, other
than by natural population increase.
e
Data derived from focus group discussions with farmers.
Sources: ADB project completion report; government completion report; focus group discussions organized by the Independent
Evaluation Department.

APPENDIX 4: REHABILITATION OF IRRIGATION AND DRAINAGE SYSTEMS


Table A4.1: Area Rehabilitated and Number of Beneficiaries

Irrigation System
Khojabakirgan
Vakhsh
Kyzylsu-Yakhsu
Total

Target
36,000
36,000
13,000
85,000

Area Rehabilitated (ha)


Project
Completion
As of EndEndSeptember
December
2009
2012
36,000
38,000
35,600
40,000
13,000
15,000
84,600
93,000

Number of Beneficiaries
Project
Completion
As of EndAs of EndSeptember
December
Target
2009
2012
193,500
193,500
204,100
200,000
200,000
222,000
78,000
78,000
90,000
471,500
471,500
516,100

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

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


(20032010)

175,000
150,000

(tons)

Total Production

200,000

125,000
100,000
75,000
50,000
25,000
0
2003

2004

2005

2006

2007

2008

2009

Year
Cotton

Source: Statistical Agency, Republic of Tajikistan.

Wheat

2010

Rehabilitation of Irrigation and Drainage Systems


Figure A4.2: Production of Selected Crops in Five Project Districts
(20032008)
175000
175,000

Total Production
(tons)
(inTons )

Total Production

150000
150,000
125,000
125000
100,000
100000

75000
75,000
50000
50,000
25,000
25000

0
2003

2004

2005

2006

2007

2008

Year
cereals
melon and gourd

potato
potatoes

vegetables
fruits

Source: Statistical Agency, Republic of Tajikistan.

Table A4.2: Cotton Production (tons)


Irrigation
System/District
Khojabakirgan
B. Gafurov
J. Rasulov
Subtotal
Vakhsh
Bokhtar
Vakhsh
Subtotal
Kyzylsu-Yakhsu
Vose
Total

2003

2004

2005

2006

2007

2008

2009

2010

2011

27,794
25,006
52,800

29,076
20,560
49,636

26,670
26,105
52,775

21,022
17,077
38,099

19,502
17,230
36,732

14,780
9,705
24,485

13,574
10,112
23,686

16,063
9,556
25,619

18,264
12,793
31,057

33,650
36,031
69,681

35,868
25,906
61,774

25,875
22,280
48,155

31,516
18,533
50,049

32,076
19,763
51,839

24,447
20,000
44,447

24,801
16,002
40,803

24,331
16,551
40,882

29,520
23,008
52,528

25,556
270,518

26,128
248,948

17,807
219,667

15,002
191,298

16,434
193,576

23,005
160,869

17,471
146,449

17,600
150,602

19,323
186,493

Source: Statistical Agency, Republic of Tajikistan.

29

APPENDIX 5: WATER SUPPLY


Table A5.1: Water Supply Coverage
Region/District
Sughd Region
B. Gafurov
J. Rasulov
Subtotal
Khatlon Region
Vose
Bokhtar
Vakhsh
Subtotal
Total

Targeted Number of
Users

Actual Number of Users


(end-December 2008)

13,400
10,000
23,400

46,060
34,156
80,216

40,000
14,400
9,200
63,600
87,000

41,326
35,374
23,630
100,330
180,546

Source: Ministry of Water Resources and Land Reclamation, Republic of Tajikistan.

Table A5.2: Incidence of Waterborne Diseases in Project Districts


Disease
Malaria
Acute intestinal
disease
Typhoid fever
Hepatitis

2003
642

2004
541

2005
398

2006
190

2007
141

2008
109

2009
22

16,271
152
1,366

17,676
149
1,702

23,104
214
924

16,038
85
1,063

11,308
70
1,032

1,0871
65
988

3,593
69
1,166

Source: Center for Medical Statistics and Information, Ministry of Health, Republic of Tajikistan.

APPENDIX 6: STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant
The Borrower shall cause the project to be carried
out with due diligence and efficiency and in
conformity with sound agricultural,
administrative, financial, engineering and
environmental practices.
In the carrying out of the project and the
operation of the project facilities, the Borrower
shall perform, or cause to be performed, all
obligations set forth in Schedule 6 to this Loan
Agreement.
The Borrower shall make available, promptly as
needed, the funds, facilities, services, land and
other resources which are required, in addition to
the proceeds of the loan, for the carrying out of
the project and for the operation and
maintenance of the project facilities.
The Borrower shall cause competent and qualified
consultants and contractors, acceptable to the
Borrower and the Bank, to be employed to an
extent and upon terms and conditions
satisfactory to the Borrower and the Bank.

Reference in
Loan Agreement
Article IV,
Section 4.01 (a)

Article IV,
Section
4.01 (b)

Status
Complied with.
Some delays in project implementation
were experienced, but they did not
materially affect the attainment of
project outputs, outcomes, and impact.
Complied with.
See below for compliance with
individual requirements under Schedule
6.

Article IV,
Section 4.02

Complied with.
The government provided all necessary
funds and facilities for project
implementation.

Article IV,
Section 4.03 (a)

Complied with. Consultants were


recruited in accordance with Asian
Development Bank (ADB) guidelines.
They began activities in June 2004.
Prequalification of civil works
contractors began in January 2005. An
evaluation committee was established
to review potential contractors and
started work on 25 February 2005. An
evaluation report was sent to ADB, and
ADB approved it on 18 May 2005. Forty
contractors were prequalified.
Complied with.
The project management office (PMO)
submitted a project implementation
schedule and procurement plan to ADB.
Civil works contract packages were
defined. Draft standard bidding
documents for the procurement of civil
works from local contractors were
approved by ADB. Subsequent changes
in the documents were submitted on a
timely basis to ADB and approved.

The Borrower shall cause the project to be carried


out in accordance with plans, design standards,
specifications, work schedules, and construction
methods acceptable to the Borrower and the
Bank. The Borrower shall furnish, or cause to be
furnished, to the Bank, promptly after their
preparation, such plans, design standards,
specifications and work schedules, and any
material modifications subsequently made
therein, and in such detail as the Bank shall
reasonably request.

Article IV,
Section 4.03 (b)

The Borrower shall ensure that the activities of its


departments and agencies with respect to the
carrying out of the project and operation of
project facilities are conducted and coordinated
in accordance with sound administrative policies
and procedures.
The Borrower shall make arrangements
satisfactory to the Bank for insurance of the
project facilities to such extent and against such
risks and in such amounts as shall be consistent
with sound practice.
The Borrower undertakes to insure, or cause to be
insured, the goods to be imported for the project

Article IV,
Section 4.04

Complied with.

Article IV,
Section
4.05 (a)

Complied with.

Article IV,
Section

Complied with.

32 Appendix 6
Covenant
and to be financed out of the proceeds of the
Loan against hazards incident to the acquisition,
transportation and delivery thereof to the place
of use or installation, and for such insurance any
indemnity shall be payable in a currency freely
usable to replace or repair such goods.
The Borrower shall maintain, or cause to be
maintained, records and accounts adequate to
identify the goods and services and other items
of expenditure financed out of the proceeds of
the Loan, to disclose the use thereof in the
project, to record the progress of the project
(including the cost thereof), and to reflect, in
accordance with consistently maintained sound
accounting principles, the operations and
financial condition of the agencies of the
Borrower responsible for the carrying out of the
project and operation of the project facilities, or
any part thereof.
The Borrower shall (i) maintain, or cause to be
maintained, separate accounts for the project;
(ii) have such accounts and related financial
statements audited annually, in accordance with
appropriate auditing standards consistently
applied, by independent auditors whose
qualifications, experience and terms of reference
are acceptable to the Bank; (iii) furnish to the
Bank as soon as available, but in any event not
later than nine months after the end of each
related fiscal year, certified copies of such audited
accounts and financial statements and the report
of the auditors relating thereto (including the
auditors' opinion on the use of the Loan proceeds
and compliance with the covenants of this Loan
Agreement as well as the on the use of the
procedures for imprest accounts/statement of
expenditures), all in the English language; and (iv)
furnish to the Bank such other information
concerning such accounts and financial
statements and the audit thereof as the Bank
shall from time to time reasonably request.
The Borrower shall enable the Bank, upon the
Banks request, to discuss the Borrower's financial
statements for the project and its financial affairs
related to the project from time to time with the
Borrower's auditors, and shall authorize and
require any representative of such auditors to
participate in any such discussions requested by
the Bank, provided that any such discussion shall
be conducted only in the presence of an
authorized officer of the Borrower unless the
Borrower shall otherwise agree.
The Borrower shall furnish, or cause to be
furnished to the Bank all such reports and
information as the Bank shall reasonably request
concerning (i) the Loan, and the expenditure of
the proceeds and maintenance of the service

Reference in
Loan Agreement
4.05 (b)

Status

Article IV,
Section
4.06 (a)

Complied with.
Separate records were kept for the
project. Project progress reports,
including cost estimates, were prepared
and submitted to ADB in a timely
manner.

Article IV,
Section
4.06 (b)

Complied with.
All ADB-funded projects in Tajikistan are
subject to a block audit. A proposal to
combine the project audits for 2003
and 2004 was approved by ADB. The
audit was conducted in May 2005, and
the audit report submitted to ADB in
August 2005, in advance of the
deadline. With the exception of the
audit for 2006, all other audit reports
were submitted on time. The audit
report for 2006, which was due on 30
September 2007, was submitted on 10
October 2007, 10 days after the
deadline.

Article IV,
Section
4.06 (c)

Complied with.
Project financial matters were reported
quarterly and, from September 2005,
discussed every quarter with the ADB
Tajikistan Resident Mission.

Article IV,
Section
4.07 (a)

Complied with.
Required information pertaining to the
project was provided regularly and on
time to ADB.

Status of Compliance with Loan Covenants 33

Covenant
thereof; (ii) the goods and services and other
items of expenditure financed out of the
proceeds of the Loan; (iii) the project; (iv) the
administration, operations and financial
conditions of the agencies of the Borrower
responsible for the carrying out of the Project and
operation of the Project facilities, or any part
thereof; (v) financial and economic conditions in
the territory of the Borrower and the
international balance-of-payments position of the
Borrower; and (vi) any other matters relating to
the purposes of the Loan.
The Borrower shall furnish, or cause to be
furnished, to the Bank quarterly reports on the
carrying out of the project and on the operation
and management of the project facilities. Such
reports shall be submitted in such form and in
such detail and within such a period as the Bank
shall reasonably request, and shall indicate,
among other things, progress made and
problems encountered during the quarter under
review, steps taken or proposed to be taken to
remedy these problems, and proposed program
of activities and expected progress during the
following quarter.
Promptly after the physical completion of the
project, but in any event not later than three (3)
months thereafter or such later date as may be
agreed for this purpose between the Borrower
and the Bank, the Borrower shall prepare and
furnish to the Bank a report, in such form and in
such detail as the Bank shall reasonably request,
on the execution and initial operation of the
project, including its cost, the performance by the
Borrower of its obligations under this Loan
Agreement and the accomplishment of the
purposes of the Loan.
The Borrower shall enable the Banks
representatives to inspect the project, the goods
financed out of the proceeds of the Loan, and
any relevant records and documents.
The Borrower shall ensure that the project
facilities are operated, maintained and repaired in
accordance with sound administrative, financial,
engineering, environmental, and maintenance
and operational practices.
(a) It is the mutual intention of the Borrower and
the Bank that no other external debt owed a
creditor other than the Bank shall have any
priority over the Loan by way of a lien on the
assets of the Borrower. To that end, the Borrower
undertakes (i) that, except as the bank may
otherwise agree, if any lien shall be created on
any assets of the Borrower as security for any
external debt, such lien will ipso facto equally and
ratably secure the payment of the principal of,
and interest charge and any other charge on, the

Reference in
Loan Agreement

Status

Article IV,
Section
4.07 (b)

Complied with.
Quarterly progress reports were
submitted in a timely manner. The last
report was submitted on 6 October
2009.

Article IV,
Section
4.07 (c)

Complied with.
The project completion report was
submitted in December 2009.

Article IV,
Section 4.08

Complied with.

Article IV,
Section 4.09

Complied with.

Article IV,
Section 4.10

Compliance waived.a

34 Appendix 6
Covenant
Loan; and (ii) that the Borrower, in creating or
permitting the creation of any such lien, will
make express provision to that effect.
(b) The provisions of paragraph (a) of this section
shall not apply to (i) any lien created on property,
at the time of purchase thereof, solely as security
for payment of the purchase price of such
property; or (ii) any lien arising in the ordinary
course of banking transactions and securing a
debt maturing not more than one year after its
date.
(c) The term assets of the Borrower as used in
paragraph (a) of this Section includes assets of
any political subdivision or any agency of the
Borrower and assets of any agency of any such
political subdivision, including the National Bank
of Tajikistan and any other institution performing
the functions of a central bank for the Borrower.
Project Executing Agency and Implementing
Agency
As the project executing agency, MWRLR
(Ministry of Water Resources and Land
Reclamation) shall be responsible for the overall
implementation of the project.
Agriculture Academy of Sciences of the Borrower
shall be the implementing agency for Part A (i) of
the project in accordance with arrangements
acceptable to the Bank.

Project Steering Committee


To provide policy guidance and facilitate interministerial coordination on project
implementation at the central level, the Borrower
shall ensure that the project executing agency is
supported by the Project Steering Committee
(PSC) that has already been established by the
Borrower. The PSC shall continue to be chaired by
the Deputy Prime Minister responsible for
Ministry of Agriculture (MOA), MWRLR, and
Ministry of Environmental Protection (MEP), and
shall include representatives from the Ministry of
Finance, MOA, MWRLR, Ministry of Economy and
Trade (MET), MEP, State Committee for Land
Management (SCLM), Ministry of Health, State
Property Committee (SPC), the Agricultural
Industries Division of the Presidents Office and
the regional administrations of Sughd and
Khatlon regions. PSC shall meet at least once
every three months, and as often as necessary.
Project Management Office (PMO)
The PMO shall be responsible for the day-to-day
implementation and coordination of the project.

Reference in
Loan Agreement

Status

Schedule 6,
para. 1

Complied with.
The executing agency took day-to-day
control of project implementation.

Schedule 6,
para. 2

Complied with.
An agreement was signed with the
Agriculture Academy of Sciences for
implementing Part A (i), soil fertility and
seed improvement subcomponents. The
PMO procured vehicles and equipment
required by the academy.

Schedule 6,
para. 3

Complied with.

Schedule 6,
para. 4

Complied with. The PMO was


established by Government Resolution
220 on 13 May 2002. The PMO director
was appointed in March 2003. By

Status of Compliance with Loan Covenants 35

Covenant

Working Group
The Borrower shall ensure that the Working
Group, already established by the Borrower for
preparation and implementation of the project,
shall continue to facilitate operational
coordination of inter-ministerial activities on the
project at the district level and provide assistance
to the project implementation units (PIUs). The
Working Group shall be chaired by the Deputy
Chief of the Agricultural Industries Division of the
Presidents Office and shall comprise Deputy
Minister of MWRLR as the Deputy Chairperson
and representatives from Ministry of Finance,
MOA, MET, MEP, SCLM, SPC, Tajik
Kommunservice, Economic Reforms and Foreign
Investments Division of the Presidents Office and
district administrations of the Pilot areas.
Project Director
The Borrower shall designate the Minister,
MWRLR, as the Project Director to oversee project
implementation
Project Implementation Units (PIUs)
The Borrower shall ensure that a PIU is
established, within 1 month after the effective
date, in each of Khojabakirgan, Vakhsh and
Kyzylsu-Yakhsu, in the project area.
The Borrower shall ensure that the PMO and the
PIUs shall be provided with adequate staff, office
premises and resources during project
implementation.

Project Managers and Deputy Managers


The Borrower shall ensure that the PMO is
headed by a full-time Project Manager and the
PIUs are headed by full-time Deputy Managers.
Deputy Managers and other key staff of the PMO
and the PIUs shall be selected on merit basis, in a
transparent manner, by a panel of experts
appointed by the Borrower and shall be subject
to the endorsement of the Bank.
Water Users' Associations (WUAs)
The Borrower shall, with the assistance of
consultants to be recruited for implementation of
the project, formulate a comprehensive long-term
program for development and support of WUAs,
including (i) identification of budgetary
allocations needed for WUA support units at the
ministerial, regional and district levels; and (ii)
determination of an overall training program for

Reference in
Loan Agreement

Status
government decree he was replaced on
1 March 2005. The new PMO director
remained in place until project
completion.

para. 5
Schedule 6,

Complied with.
The working group continued to
function during project
implementation, resolving any issues in
collaboration with other government
agencies.

Schedule 6,
para. 6

Complied with.

Schedule 6,
para. 7 (a)

Complied with.
PIUs were established on 13 May 2003,
in advance of the date of loan
effectiveness.
Complied with.
Office facilities were provided; the
MWRLR allocated to the PMO 15 rooms
totaling 620 square meters in the
ministry in June 2003. PMO and PIU
vacancies were advertised in local
newspapers on 6 June 2003. Adequate
technical and administrative staff were
recruited.

Schedule 6,
para. 7 (b)

Schedule 6,
para. 8

Complied with.
The project manager (PMO director)
was appointed by the government.
Deputy managers (deputy directors) at
the PIUs were recruited on a
competitive basis, with posts advertised
in the national press.

Schedule 6,
para. 9 (a)

Complied with.
The consultants prepared the WUA
development and training program.
According to the Decree of the Minister
of Water Resources and Land
Reclamation of the Republic of
Tajikistan No. 128, dated 10 May 2007,
regional and national departments to

36 Appendix 6
Covenant
their staff.

Reference in
Loan Agreement

Status
support WUAs were established. WUA
board members and staff were trained
in WUA operation and financial
management.

In providing support for development and


organization of WUAs, the Borrower shall give
priority to those WUAs that will be organized in
such parts of the project area where farms have
been privatized and groups of farmers are
dependent on one common source of water.

Schedule 6,
para. 9 (b)

Complied with.
It was agreed with ADB that 20 WUAs,
rather than the 30 proposed at
appraisal, would be established. The
charters of all WUAs were registered
with the Ministry of Justice. The first
was established in 2004, and the
remainder in 20052007. They cover
427 dehkan farms totaling almost
42,820 ha and have 304,700 members.
In March 2006, initial financing was
made according to the terms of the
loan agreement. All WUAs were
provided with offices, office equipment
and supplies, furniture, and computers.

The Borrower shall ensure that (i) a dialogue is


established between the targeted communities
and the concerned sector agencies of the
Borrower with respect to organization of WUAs;
(ii) WUAs are organized through a participatory
process; and (iii) the level and role of female
participation are promoted in the formulation,
organization and management of WUAs.

Schedule 6,
para. 9 (c)

Complied with.
A unit was established in the MWRLR
and at the regional and district level to
support WUAs. WUAs were established
through collaboration between farmers,
WUA organizers, and water resources
institutions. Women are active in the
governing bodies of the WUAs,
accounting for 27% of their 194
members.

The Borrower shall also ensure that WUAs are


responsible for the operation and maintenance of
the tertiary systems of the rehabilitated irrigation
systems, upon their completion, and contribute
to the cost of maintaining the secondary and
primary irrigation systems through water charges
payable to the designated local water agencies,
pursuant to a cost recovery program to be
developed by the Borrower.
Cost Recovery
The Borrower shall, in consultation with the Bank,
develop a cost recovery program for the recovery
of operation and maintenance costs of the
irrigation and drainage systems rehabilitated
under the project on a phased basis, over a
period of ten years, from the beneficiaries of such
systems in accordance with the relevant policies
of the Borrower and the Borrower's existing
agreements with the International Development
Association. The Borrower shall review the
collection rates annually and report to the Bank,
taking also into account the in-kind payments.

Schedule 6,
para. 9 (d)

Complied with.
Responsibility for tertiary irrigation
systems has been transferred fully to
WUAs. WUAs pay close to the full cost
of delivery of irrigation and drainage
services to their local MWRLR office and
recoup this cost plus a margin from
members.

Schedule 6,
para. 10

Ongoing.
The MWRLR has established the system
for collecting water fees. A uniform
national charge per cubic meter of
water is established annually, to which
local offices of the MWRLR add a
margin to cover the cost of operating
specific schemes, which varies with the
type of system (gravity or pumped).
This cost is then charged to WUAs, who
collect it from members. WUAs also
charge members a flat fee per hectare
to cover their costs. WUAs propose to
phase in increases in this charge and/or
the addition of a margin to the MWRLR

Status of Compliance with Loan Covenants 37

Covenant
The Borrower shall ensure that adequate annual
budgetary allocations are made and funds are
released on a timely basis for operation and
maintenance of the rehabilitated irrigation and
drainage systems, in particular for the primary
infrastructure such as reservoirs and large
interstate canals, until such time when these
costs can be fully recovered from the beneficiaries
in accordance with the program mentioned
above.
Power Supplies
The Borrower shall also ensure that power
supplies are made available, when needed, for
pumping systems of the rehabilitated irrigation
and drainage facilities. The Borrower shall take
appropriate measures, in consultation with the
Bank, for the cost recovery of such supplies from
the beneficiaries.
Operation and Management of Project Facilities
The Borrower shall transfer operation and
management of the irrigation and drainage
facilities and the local potable water supply
systems to WUAs and water and sanitation
councils (WSCs), respectively, once they are fully
organized and their staff have been trained, but
not later than two years after completion of the
rehabilitation of such facilities and systems in
their respective areas.
The Borrower shall also transfer operation and
management of the village water networks to
WSCs not later than one year after the
completion of the rehabilitation works.
Notwithstanding the transfer of the operation
and management of the village water networks
to WSCs, the
ownership of such networks shall remain with the
public.
Farm Machinery Units (FMUs)
The Borrower shall establish the three FMUs
initially as fully state-owned enterprises but shall
take the necessary measures to gradually transfer
their ownership to the private sector through
public offers so as to ensure that majority shares
of the FMUs are held by the private sector by the
project completion date.

Reference in
Loan Agreement
Schedule 6,
para. 11

Status
water charge to provide for maintaining
tertiary systems.
Complied with.
The government annually allocates
budget to the MWRLR for the operation
and maintenance of irrigation and
drainage systems to supplement funds
collected through water charges.

Schedule 6,
para. 12

Complied with.
The government maintained power
supplies to pumping stations as needed
through a scheme that ensures power
supply, despite the debt the MWRLR
owes to the government. The full cost
of irrigation and drainage is being
charged to WUAs.

Schedule 6,
para. 13 (a)

Complied with.
The operation and management of
parts of the irrigation and drainage
facilities had been transferred to WUAs,
and of the local potable water supply
systems to WSCs, by the time of the
project completion review mission, i.e.,
within 2 years of the completion of
rehabilitation works.
Complied with.
Seven WSCs were established, as
expected at appraisal, and registered
during 20042005. The operation and
management of the potable water
supply systems have been transferred to
WSCs. The ownership of water supply
systems remains with the government.

Schedule 6,
para. 13 (b)

Schedule 6,
para. 14 (a)

Complied with.
All FMUs were established by 1 July
2004 and registered with the Ministry
of Justice. They were established as
state-owned enterprises and will remain
so until the repayment of their loans
from the Ministry of Finance. Subsidiary
loan agreements were signed between
the Ministry of Finance and FMUs on 1
June 2005. In the second quarter of
2006, bidding for farm machinery
procurement was conducted. ADB
approved the bid evaluation report, and
two procurement contracts were signed
in August 2006. All farm machinery was
supplied before 1 April 2007.

38 Appendix 6
Covenant
The Borrower shall ensure that (i) the FMUs
operate on a commercial basis and are in charge
of operating and maintaining the farm machinery
to be procured under the project through renting
such machinery to farmers in the project area
against a service fee determined at commercial
rates, and (ii) the service fees are used for
repayment of their respective subsidiary loans
and towards administrative costs, and the
operation and maintenance costs of the
machinery.
Farm Debts
With the assistance provided under the Technical
Assistance, the Borrower shall (i) develop
necessary policies and implement relevant
regulatory, legislative and administrative
measures required to resolve the issues related to
accumulated farm debts in an efficient and
prudent manner in order to promote sustained
and profitable agricultural development; and (ii)
monitor the progress of the implementation of
relevant policy reforms and report thereon to the
Bank.

Technical Assistance
The Borrower shall take into account the
recommendations of the Technical Assistance and
take all necessary actions to ensure that, within
one year of the completion of the Technical
Assistance, appropriate regulatory framework
and administrative measures are in place to
enable effective functioning of the WUAs and
WSCs.
Environment
The Borrower shall ensure that the project is
carried out, and all project facilities are
constructed, operated, maintained and
monitored, in accordance with the existing laws,
regulations and standards of the Borrower
concerning environmental protection, and the
Bank's environmental guidelines, including the
Environmental Guidelines for Selected
Agricultural and Natural Resources Development
Projects.
The Borrower shall also ensure that appropriate
budgetary allocation is made for environmental
mitigation and monitoring activities to be
undertaken by the Executing Agency and ,
including the funds needed for procurement of
the necessary vehicles, materials, equipment and
the operating expenses for all the environmental

Reference in
Loan Agreement
Schedule 6,
para. 14(b)

Status
Complied with.
FMUs operate on a commercial basis,
charging fees for services provided.
They initially had increasing turnover
and were profitable, with profits being
reinvested in additional machinery and
related assets. FMUs have begun
repaying subsidiary loans. However,
since 2008, FMUs have had difficulty
repaying their loans on time.

Schedule 6,
para. 15

Complied with.
The findings of the technical assistance
project on farm debt resolution were
presented to the government in August
2004. A draft farm debt resolution
strategy was developed by the
government with the assistance of
international development partners
coordinated by ADB. ADB approved the
loan for the Sustainable Cotton
Subsector Project in November 2006 to
address debt issues, among others. In
2004, as part of its debt-resolution
strategy, the government wrote off
farm debts of TJS132 millionrelated
to taxes on water, electricity, gas, and
contributions to the social protection
fund.

Schedule 6,
para. 16

Complied with.
The law on WUAs was passed by the
parliament in November 2006,
establishing the legal and regulatory
framework for WUA operations.

Schedule 6,
para. 17 (a)

Complied with.
Implementation consultants and the
design institute Tojikgiprovodkhoz
collaborated to prepare project site
designs, taking into consideration ADB's
environmental guidelines and prevailing
environmental laws, regulations, and
standards.

Schedule 6,
para. 17 (b)

Complied with.

Status of Compliance with Loan Covenants 39

Covenant
management and monitoring activities under the
project as specified in the Initial Environmental
Examination Report prepared for the project.
Resettlement
The Borrower shall ensure that involuntary
resettlement under the project, if any, including
loss of use of land, other resources or assets, is
undertaken in conformity with a resettlement
plan to be promptly prepared by the Borrower in
accordance with the Bank's Resettlement
Handbook.
Gender Strategy and Plan
The Borrower shall ensure effective
implementation of the Gender Strategy and Plan
prepared for the project with specific targets. The
Borrower, in particular shall (i) within one year
after the Effective Date, identify the interventions
under the project that aim at increasing women's
access to income opportunities and reducing
their vulnerability to water-borne diseases; and
(ii) ensure that the women are given equal
opportunity in community activities to be carried
out under the project.

Enforcement of Regulations
The Borrower shall ensure, and shall cause
regional and district level administrations to
ensure, that provisions of the (i) Presidential
Decree No. 896 of 20 September 2002 exempting
the cotton crop for 2002 from value added tax;
(ii) Presidential Decree No. 899 of 23 September
2002 abolishing cotton balances and thus
reducing local administrations' control over
farming decisions, terminating the monopoly of
the Borrower's Agroinvest Bank on provision of
production loans to farmers and giving farmers
free choice of investors; and (iii) the
Government's resolution No. 421 of 22 October
1999 giving farmers choice of trading raw cotton,
are properly enforced and implemented on a
transparent basis throughout the territory of the
Borrower.
Beneficiaries Contribution
The Borrower shall ensure that the beneficiaries
of the project contribute toward cost of on-farm
improvements through providing labor for land
leveling, rehabilitation of canal turnouts and
drainage facilities and construction of additional
on-farm watercourse structures.
Supervision and Midterm Reviews
The Borrower and the Bank shall jointly undertake
a midterm review of the project after the third
year of the project implementation period to

Reference in
Loan Agreement

Status

Schedule 6,
para. 18

Not applicable.
No resettlement was expected under
the project.

Schedule 6,
para. 19

Complied with late.


Implementation consultants paid
specific attention in the design of the
socioeconomic survey to assess
womens access to income-earning
opportunities and their participation in
project activities. Women are active in
WUAs, with 27% representation on
WUA governing bodies. Women actively
contribute to beneficiaries in-kind
contribution to rehabilitation. Due to
the delay in recruiting implementation
consultants, the gender strategy and
plan was not submitted within 1 year of
loan effectiveness.

Schedule 6,
para. 20

Complied with.
In accordance with Government Decree
No. 518, farmers were given freedom of
choice as investors. Farmers are free to
dispose of all their cotton at their
discretion. Prices quoted for cotton and
other agricultural products are market
determined. Agroinvest Bank has been
reorganized.

Schedule 6,
para. 21

Complied with.
Beneficiaries participated in irrigation
and water supply system design and
contributed in-kind (mainly with labor)
to costs in accordance with the loan
agreement.

Schedule 6,
para. 22

Complied with.
ADB fielded the midterm review mission
on 1825 February 2008.

40 Appendix 6
Covenant
assess the project's progress and achievements
against its objectives, identify any difficulties
being encountered and recommend remedial
action, if and where required.
Project Performance Monitoring Evaluation
The Borrower shall ensure that a monitoring and
evaluation unit (MEU) is established within the
PMO to monitor the environmental and social
impacts of the project in accordance with the
Project Performance Management System
Handbook of the Bank.
To monitor the project's social impacts, MEU shall
compile a benchmark database incorporating
information on economic and social conditions
including public health parameters in the selected
irrigation systems to provide a comprehensive
socioeconomic profile of the beneficiary
communities.

Reference in
Loan Agreement

Status

Schedule 6,
para. 23(a)

Complied with.
The MEU began operations on 1 March
2005 with the engagement of two
specialists. The MEUs terms of
reference were approved by ADB.

Schedule 6,
para. 23 (b)

Complied with.
In JanuaryFebruary 2005, the project
implementation consultants conducted
a social survey in the project area.
Specific attention was paid to morbidity
incidence, water quality, womens
access to income opportunities, and
their wish to participate in community
activities. In January 2006, a report on
the socioeconomic and environmental
profile of project areas was completed.
Implementation consultants and the
PMO conducted regular follow-up
surveys and updated project area
profiles in October 2006 and October
2007.

ADB = Asian Development Bank, FMU = farm machinery unit, MET = Ministry of Economy and Trade, MEP = Ministry of
Environmental Protection, MEU = monitoring and evaluation unit, MOA = Ministry of Agriculture, MWRLR = Ministry of Water
Resources and Land Reclamation, PIU = project implementation unit, PMO = project management office, SCLM = State
Committee for Land Management, SPC = State Property Committee, WSC = Water Sanitation Councils, WUA = Water Users
Association.
a
ADB. 2009. Tajikistan: Request for Waiver of Negative Pledge Clause. Manila.
Sources: ADB. 2010. Completion Report: Agriculture Rehabilitation Project in Tajikistan. Manila.; Independent Evaluation
Department.

APPENDIX 7: SOCIOECONOMIC AND ENVIRONMENT INDICATORS


Figure A7: Average Monthly Nominal Wages in Project Districts (TJS)

Nominal Wages (TJS)

Average Monthly

300
250
200
150
100
50
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011
Year
TJS = Tajik somoni.
Source: Statistical Agency, Republic of Tajikistan.

Table A7.1: Poverty Incidence in Project Areas/Districts (%)


Districts
B. Gafurov
J. Rasulov
Bokhtar
Vakhsh
Vose
Average poverty incidence, project areas
National poverty incidence

2008
37
41
39
41
45
41
48

Source: Government project completion report based on surveys conducted, Republic of


Tajikistan.

Table A7.2: Focus Group Discussion Responses on Income


Income
Did farm income increase with the project?
Farm income increased
Farm income decreased
No change
Total
To what extent did income increase on average?
Increased by less than 50%
Increased significantly, by more than 50%
Increased substantially, by more than 100%
Total
Source: Independent Evaluation Department.

Number

40
0
0
40

100
0
0
100

15
24
1
40

38
60
3
100

42

Appendix 7

Table A7.3: Irrigation Condition of Agricultural Lands in Project Areas

Land Condition
A. Total area of agricultural
lands (ha)
1. Good
2. Satisfactory
3. Unsatisfactory
B. Unsatisfactory Lands (ha)
1. Critical level of
underground water
salinity
2. Land salinity
3. Critical level of
underground water
and land salinity

Change
2003
2008
(%)

2003

2004

2005

2006

2007

2008

Difference
2008
2003 (ha)

120,580
77,683
30,229
12,668

120,727
79,892
29,950
10,885

122,875
84,277
31,219
7,379

130,127
89,866
34,325
5,936

128,063
88,993
33,475
5,595

129,078
90,489
33,270
5,319

12,806
3,041
(7,349)

16
10
(58)

8,603
2,771

7,357
2,293

4,933
1,841

3,827
1,630

4,877
2,058

4,592
2,042

(4,011)
(729)

(47)
(26)

1,494

1,245

604

824

810

725

(769)

(51)

() = negative, ha = hectare.
Source: Government completion report; Ministry of Land Reclamation and Water Resources.

APPENDIX 8: ECONOMIC ANALYSIS


A.

Introduction

1.
This economic analysis validated the economic internal rate of return (EIRR) calculated at
appraisal and in the project completion report (PCR), as part of an independent evaluation process.
Specifically, it addressed the PCRs faulty shadow pricing of inputs and non-inclusion of potable water
supply (PWS) benefits, as identified in the PCR validation report.1 In addition, a more accurate estimate
was made of the annual operation and maintenance (O&M) cost, based on actual O&M conducted by
the Ministry of Water Resources and Land Reclamation (MWRLR). The assumptions for the yield of
cotton and wheat were also different from the PCR. Other than these considerations, the economic
analysis generally followed the same procedures as in the appraisal and PCR.

B.

Methodology and Assumptions


1.

Costs

2.
Shadow exchange rate factor. The first step was to re-estimate the shadow exchange rate
factor (SERF). Data on imports, exports, custom charges, and other taxes on international trade were
sourced from the Tajikistan State Statistic Agency and Key Indicators for Asia and the Pacific 2010.2
Using the simple trade-weighted formula,3 the average SERF for 20032010 was calculated as 0.9963,
which suggests minimal trade-related distortions of the exchange rate.
3.
Investment costs.4 Cost items in the investment phase for both irrigation and PWS were based
on the total project cost at current financial prices indicated in the PCR, which was $49.978 million.
Costs were converted to constant 2010 prices using the World Bank Manufactures Unit Value Index (for
foreign components) and the Tajikistan gross domestic product (for local components) as deflators. To
derive the costs in constant economic domestic (TJS) prices, taxes and duties were excluded and the
shadow exchange rate 5 was used. Total investment cost at constant (2010) economic prices was
calculated as TJS178.575 million.
4.
Operation and maintenance costs.6 The O&M cost was based on the actual costs incurred for
the conduct of O&M activities by the MWRLR in 2007-2010, for both irrigation and PWS facilities,
which comprises the costs for laborers, utilities (electricity, water, etc.), and taxes. To get the O&M
economic cost, taxes were excluded and financial prices were converted into economic prices using the
SERF. Assuming that all irrigation and PWS facilities were in full operation in 2010, the O&M cost in
2010 (in constant 2010 economic prices)equivalent to TJS14.592 million, was used as the annual
O&M cost (benchmark or standard cost) for the rest of the projects economic life.

1
2
3

5
6

ADB. 2011. Validation Report: Agriculture Rehabilitation Project in Tajikistan. Manila.


http://www.adb.org/publications/key-indicators-asia-and-pacific-2010
SERF = 1 + (net trade taxes/total trade) is one of the suggested methodologies in ADBs Guidelines for the Economic Analysis
of Projects (http://www.adb.org/sites/default/files/pub/1993/eco-analysis-projects.pdf).
Project costs required to introduce into operational use a new capability or to provide for major modifications of an existing
capability, in this case, the rehabilitation of irrigation and potable water systems.
Shadow exchange rate = official exchange rate x shadow exchange rate factor.
Ongoing, repetitive costs of operating and maintaining the irrigation and potable water systems. This includes all costs
associated with keeping the projects inputs (e.g., utilities) and outputs (canals, pipelines, roads, buildings, vehicles, equipment,
and machines) in good condition, by regularly checking and repairing when necessary.

44

Appendix 8
2.

Irrigation

5.
The economic analysis determined the viability of cotton and wheat production in two
scenarios: one without the project and the other with the project. For this purpose, values for economic
prices, average yield, and crop budgets from the PCR were updated.
6.
Economic prices. While the financial prices of inputs and outputs remained the same as the PCR,
economic prices varied due to the re-estimated SERF. In the parity price analysis, the same free-onboard (FOB) values for cotton, wheat, urea, and triple superphosphate were used as with the PCR.
However, because of the SERF re-estimation, the resulting economic prices for cotton, wheat, urea, and
triple superphosphate were lower than the economic prices used in the PCR. For cotton, the analysis
noted a big difference between its economic price and financial price, which indicates a high level of
distortion.7 For labor, financial prices were converted into economic prices using the shadow wage rate
conversion factor (0.8). Cotton seed, wheat seed, and wheat straw were assumed as non-tradables,
thus, their economic prices were equal to their financial prices.
7.
Average yield. The average yields of cotton and wheat from different sources (i.e., from the
MWRLR for dehkan and non-dehkan farms, and from focus group discussions (FGDs) for dehkan
farms) were used in the economic analysis for both the without project and with project scenarios
(tables A8.1 and A8.2). Since irrigation quality is not uniform across farms and yields tend to vary,
average values are used for the yields of cotton and wheat. During the FGDs on yield estimates, farmers
were asked for their estimated average yield 3 years before project implementation and 3 years after
project completion, to account for the annual fluctuations in yield. Yield estimates for cotton in the
without project scenario (1.98 ton/ha) and the with project scenario (2.66 ton/ha) were both higher
than the corresponding estimates used in the PCR (without project, 1.40 ton/ha; with project, 2.00
ton/ha). On the other hand, yield estimates for wheat in the without project scenario (2.25 ton/ha)
and the with project (2.95 ton/ha) scenario were both lower than those in the PCR (without project,
2.50 ton/ha; with project, 3.10 ton/ha). The revised average yield estimates show that with the project,
cotton yield increased by 34%, while wheat yield increased by 31%.
8.
Crop budgets. Data on the indicative crop budget (per hectare) were sourced from MWRLR
estimates, from the results of the FGDs with farmer beneficiaries (conducted in April 2013), and from
the crop budget used in the PCR. The harvesting cost, based on MWRLR and FGD estimates, was added
to the input costs for cotton. The financial price of harvesting cotton was converted into economic
prices using the shadow wage rate conversion factor of 0.8. In the case of wheat, combine harvesting8
was assumed to involve semi-skilled labor and hence, economic prices were assumed to be the same as
financial prices.
9.
Gross margin and income per hectare of cotton. The analysis shows that cotton farming is not
financially viable in both the without project and with project scenarios. This was also confirmed to
be the case during the FGDs with farmers and is due to the low farm gate price of cotton, combined
with higher cost of inputs. Policy induced distortions in the cotton market, creating monopsony power
for private sector gins and investors, are responsible for this situation. Farmers are tied to investors due
to their debts, allowing investors to charge higher than market prices for farm inputs. The higher world
price for cotton, however, makes cotton farming economically profitable with a gross margin of
TJS3,022.37 per hectare in the with project scenario, and TJS2,097.82 per hectare in the without
project scenario (Table A8.1). This amounts to a 44% increase in economic gross margin due to the
project.
7

The economic price of cotton was based on export-parity farm gate price, whereas financial price was based on market prices
received by farmers. The big difference highlights the high level of price distortion along the production-logistics-export
continuum, and that cotton farmers receive minimal gains despite cotton being an export earner for the country. This justifies
the diversification of production to wheat and other crops.
Refers to the use of the machine called a combine harvester.

Economic Analysis 45

10.
Gross margin and income per hectare of wheat. As per the analysis, wheat farming is both
financially and economically viable. The gross economic margin increased by 41% due to the project
as it increased from TJS518.17 per hectare in the without project scenario to TJS1,780.88 per hectare
in the with project scenario (Table A8.2).
11.
Cultivable command area and cropping pattern. Data on the irrigation service area, cultivable
command area, and cropping pattern, were sourced from the PCR. From the irrigation service area of
84,600 ha, 78% is irrigated and planted in the without project scenario, resulting in a cultivable
command area of 65,988 ha. Of this area, 90% is planted with cotton and the remaining 10% with
wheat. On the other hand, for the with project scenario, it is assumed that 100% of the irrigation
service area is irrigated and planted. The cropping pattern in the with project scenario was assumed at
50% cotton and 50% wheat. This is a conservative assumption considering that during the FGDs
dehkan farmers reported a with project cropping pattern of 60% cotton and 40% wheat, and for
non-dehkan farms the cropping pattern continues to be predominantly cotton, as reported by the
MWRLR.
3.

Potable Water Supply

12.
Estimates of project benefits from the PWS component were obtained through valuation of
benefits from reduction in morbidity, savings in medical expenses, and time savings in fetching water.
Water revenues from the monthly water fees paid by households were included in the benefits. No
deaths were reported due to waterborne diseases before or after rehabilitation of the PWS.
13.
Morbidity reduction. The morbidity rate, which was as high as 2.56%, reduced to 0.49% after
the improvement of water supply systems. The economic value of morbidity reduction was based on
the value of the total person-days lost due to waterborne diseases among the working members of the
beneficiary households. The annual economic value of the reduction in morbidity rate due to the
project, was estimated at TJS110,956.40 per year.
14.
Savings in medical expenses. In addition to avoiding the loss of person-days due to waterborne
illnesses, a reduction in morbidity also leads to savings in medical expenses. Medical expenses saved by
each person who avoids falling sick due to waterborne illness are estimated to be TJS339.32 per year
(in constant 2010 economic prices). Based on the reduction in morbidity rate, the total savings in
medical expenses amounted to TJS506,809.33 per year.
15.
Time savings in fetching water. Before the project, each household spent on average 2.5 hours
per day for 46 days a year fetching water. After the project, the time spent on fetching water was
reduced to 0.4 hours per day for 4 days a year, resulting in time savings of 113.4 hours a year per
household. For all the household beneficiaries, the economic value of time savings was estimated at
TJS4,215,218.08 per year.
16.
Water revenues. Data from the FGDs showed that before the project, each household paid
water fees amounting to TJS7 per month on average. After the project, water fees increased to TJS9.4
per month. This change was estimated to result in an increase in revenue of TJS649,956.60 per year.

C.

Summary of Benefits

17.
Irrigation benefits. The majority of benefits came from the projects irrigation component, due
to an increase in the yield of cotton of about 34% and an increase in the yield of wheat of about 31%.
Irrigation benefits (economic) for the project were derived using the estimated gross margins and the
actual area irrigated and planted in the without project and with project scenarios. The difference in
net income between the two scenarios gives the net incremental irrigation benefits at full operation

46

Appendix 8
and up to the end of project life. Overall, the collective value of the incremental production of cotton
and wheat was estimated at TJS70.256 million per year and constitutes around 93% of the projects
annual benefits. The ability of the water users associations (WUAs) to maintain and operate the tertiary
systems is constrained by inadequate cost recovery through user charges. Taking this constraint into
account, in the calculation of EIRR the irrigation benefits are assumed to decline at a rate of 5%,
starting in 2011, due to the likely deterioration of irrigation infrastructure.
18.
Potable water system benefits. Benefits from improvements to the potable water system
constituted the remaining 7% of the annual benefits. Though small in percentage terms, the total
economic benefits from the rehabilitation of the PWS were significant, amounting to TJS5.480 million.

D.

Economic Cash Flow

19.
Economic internal rate of return. The economic cash flow consists of investment and O&M on
the cost side, and irrigation and PWS benefits on the benefit side. The annual net cash flow was derived
by subtracting the costs from the benefits. From the annual net cash flow, the EIRR of the project was
calculated as 18% (Table A8.3). If benefits from irrigation alone were considered, the re-estimated EIRR
is 15.84%.
20.
The EIRR value estimated at appraisal was higher at 22.9%, and did not include the economic
value of PWS benefits. The EIRR estimated by the PCR was 19.3%, which also included only irrigation
benefits.
21.
The re-estimated EIRR in this report is lower than both that estimated at appraisal and that
estimated by the PCR. Compared to the PCR, the re-estimated EIRR assumed higher yields, but lower
economic price estimates. It also assumed a gradual reduction in irrigation benefits over time, based on
the weak capacity of the WUAs in collecting user fees needed for O&M of the irrigation systems.
22.
Net present value. At a 12% discount rate, the present value of net benefits totaled TJS47.45
million, including net benefits from both irrigation and PWS systems. The net present value (NPV)
amounted to TJS28.31 million when only net irrigation benefits were considered (Table A8.3).

E.

Sensitivity

23.
Two major scenarios were considered in the sensitivity analysis, i.e., lower yields and lower
prices for the two crops, cotton and wheat. Given that this is an ex post evaluation, investment costs
are no longer variable. The projects benefit stream, however, can vary depending on the crop yields as
well as the prices of the outputs.
24.
The project remains economically viable even when the with project yields of cotton and
wheat are assumed to be 5% lower, with an EIRR of 12.13% and an NPV of TJS0.90 million. Similarly,
the project remains viable when cotton and wheat prices are assumed to be 5% lower (EIRR = 16.26%).
However, when both yields and prices are assumed to be 5% lower, EIRR becomes 10.24% and NPV
becomes negative (Table A8.4).
25.
Given the sensitivity of the projects returns to declines in yield of cotton and wheat, it is
imperative that irrigation facilities be well maintained throughout the projects economic life. Freedom
of crop choice (e.g., diversification of production to vegetables and other food crops) would be
necessary to ensure stable farm incomes to counter the effects of decline in the price of cotton and
wheat. Stable incomes would also help WUAs collect user charges for the O&M of irrigation facilities,
preventing them from falling into a state of neglect and disrepair.

Table A8.1: Cotton: Indicative Crop Budget for 1 Hectare


(at constant 2010 prices)
Without Project
Financial
Economic
Price
per
Unit
Income
Price per
Income
(TJS)
and Exp.
Unit (TJS)
and Exp.

Item
Unit
Qty
Outputs
Main product: cotton
ton
1.98
600.00
1,190.00
(yield)a
By-product
ha
0.00
Total income
1,190.00
Inputs
Cotton seed
kg
20
4.30
86.00
Land preparation and
sum
1
320.00
320.00
cultivation
Urea (fertilizer)b
kg
53
1.90
100.70
Triple superphosphate
kg
25
0.70
17.50
(fertilizer)b
Irrigation charge
ha
1
280.00
280.00
Labor
day
45
12.00
540.00
Water users association
ha
0
40.00
fee
Harvestingc
kg
1.98
180.00
357.00
Others
sum
1
59.50
59.50
Total expenditure
1,760.70
Gross margin (TJS per ha)
(570.70)
Increase in gross margin (increase in income per 1 ha), %

1,877.50

3,723.70

Qty

With Project
Financial
Economic
Price
per
Unit
Income
Price per
Income
(TJS)
and Exp.
Unit (TJS)
and Exp.

2.66

600.0

3,723.70

1,596.00

1,877.50

1,596.00

Increment
Financial
Economic

4,994.15
4,994.15

4.30
320.00

86.00
320.00

20
1

4.30
320.00

86.00
320.00

4.30
320.00

86.00
320.00

1.94
2.40

102.77
60.01

103
43

1.90
0.70

195.70
30.10

1.94
2.40

199.71
103.22

280.00
9.60
40.00

280.00
432.00
0.00

1
50
1

280.00
12.00
40.00

280.00
600.00
40.00

280.00
9.60
40.00

280.00
480.00
40.00

144.00
59.50

285.60
59.50
1,625.88
2097.82

2.66
1

180.00
79.80

478.80
79.80
2,110.40
(514.40)

144.00
79.80

383.04
79.80
1,971.77
3,022.38

56.30
10%

924.54
44%

( ) = negative, Exp = expenditure, ha = hectare, kg = kilogram, Qty = quantity, TJS = Tajik somoni.
a
Yield from Ministry of Water Resources and Land Reclamation (MWRLR) and focus group discussion (FGD) estimates, for the economic price; same free-on-board (FOB) value as the
project completion report (PCR) but adjusted with the re-estimated shadow exchange rate factor (SERF).
b
For the economic price, same FOB value as the PCR but adjusted with the re-estimated SERF.
c
Quantity, financial, and economic prices from MWRLR and FGD estimates.
Sources: MWRLR; FGDs with farmers; PCR; Independent Evaluation Department estimates.

Economic Analysis

47

48

Item
Unit
Qty
Outputs
Main product:
ton
2.25
Wheat (yield)a
By-product:
ha
1.00
Wheat straw
Total income
Inputs
Wheat seed
kg
86.00
Land preparation
sum
1.00
and cultivation
Urea (fertilizer)b
kg
40.00
Triple
kg
22.00
superphosphate
(fertilizer)b
Irrigation charge
sum
1.00
Labor
day 12.00
Water users
sum
association fee
Combine
sum
1.00
harvestingc
Other
sum
1.00
Total expenditure
Gross margin
(TJS per ha)
Increase in gross margin
(increase in income per 1 ha), %

Without Project
Financial
Economic
Price/
Unit
Income
Price/
Income
(TJS)
and Exp. Unit (TJS) and Exp.

With Project
Financial
Qty

Price/
Unit (TJS)

Income
and Exp

Economic
Price
per Unit
Income
(TJS)
and Exp.

1,200.0

2,700.00

1,205.19

2,711.68

2.95

1,200.00

3,540.00

1205.19

3,555.31

280.0

280.00

280.00

280.00

1.00

280.00

280.00

280.00

280.00

2,980.00

2,991.68

3,820.00

Increment
Financial Economic

3,835.31

1.90
320.00

163.40
320.00

1.90
320.00

163.40
320.00

86.00
1.00

1.90
320.00

163.40
320.00

1.90
320.00

163.40
320.00

1.90
0.70

76.00
15.40

1.94
2.40

77.56
52.81

95.00
55.00

1.90
0.70

180.50
38.50

1.94
2.40

184.20
132.03

280.00
12.00
40.00

280.00
144.00

280.00
9.60
40.00

280.00
115.20

1.00
18.00
1.00

280.00
12.00
40.00

280.00
216.00
40.00

280.00
9.60
40.00

280.00
172.80
40.00

585.00

585.00

585.00

585.00

1.00

585.00

585.00

585.00

585.00

135.00

135.00
1,718.80
1,261.20

135.00

135.00
1,728.97
1262.71

1.00

177.00

177.00
2,000.40
1,819.60

177.00

177.00
2,054.43
1,780.88

558.40

518.17

44%

41%

Exp = expenditure, ha = hectare, kg = kilogram, Qty = quantity, TJS = Tajik somoni.


a
Yield from Ministry of Water Resources and Land Reclamation (MWRLR) and focus group discussion (FGD) estimates, for the economic price; same free-on-board (FOB) value as the
project completion report (PCR) but adjusted with the re-estimated shadow exchange rate factor (SERF).
b
For the economic price, the same FOB value as the PCR but adjusted with the re-estimated SERF.
c
Quantity, financial, and economic prices from MWRLR and FGD estimates.
Sources: MWRLR; FGD with farmers; PCR; Independent Evaluation Department estimates.

Appendix 8

Table A8.2: Wheat: Indicative Crop Budget for 1 Hectare


(at constant 2010 Prices)

Economic Analysis 49
Table A8.3: Economic Cash Flow
(TJS million)
Year
2003
2004
2005
2006
2007
2008
2009
2010
20112032

Investment
Cost
1.62
2.72
6.64
48.76
42.28
49.43
23.72
3.39

Costs
O&M
Cost

0.16
0.95
5.02
14.59
14.59

Total
Costs
Irrigation
1.62
2.72
6.64
48.76
42.44
50.38
28.74
17.98
70.26
14.59
70.26
EIRR
NPV
EIRR (irrigation only)
NPV (irrigation only)

Benefits
Potable Water
System

5.48
5.48

Total
Benefits

75.74
75.74

Net Benefits
(1.62)
(2.72)
(6.64)
(48.76)
(42.44)
(50.38)
(28.74)
57.76
61.15
18.00%
47.45
15.84%
28.31

( ) = negative, EIRR = economic internal rate of return, NPV = net present value, O&M = operation and maintenance, TJS = Tajik
somoni.
Note: Due to inadequate operation and maintenance, there are issues if sustainability of benefits and hence irrigation benefits
are assumed to decline at a rate of 5% starting in 2011.
Source: Independent Evaluation Department estimates.

Table A8.4: Sensitivity Analysis


Item
Base case
Cotton and wheat yields 5% lower
Cotton and wheat prices 5% lower
Cotton and wheat yields and prices 5% lower

EIRR (%)
18.00
12.13
16.26
10.24

EIRR = economic internal rate of return, NPV = net present value, TJS = Tajik somoni.
Source: Independent Evaluation Department estimates.

NPV (TJS million)


47.45
0.90
32.60
(11.85)