15 July 2004	Thursday	26 Jamadi-ul-Awwal 1425

ISLAMABAD, July 14: The World Bank has questioned the economic viability of three ongoing and five upcoming irrigation projects in Pakistan that have a total estimated cost of Rs232 billion, it is learnt.

In a review of the ongoing and proposed irrigation expansion projects, the bank in its report pointed out that either sufficient water was not available for these projects or better alternatives could have been pursued both on technical and economic sides.

The bank said the feasibility studies of these projects needed to be critically reviewed with a view to either dropping, deferring or curtailing their scope, notwithstanding they have reached a point of no return due to political or any other reasons.

Among the ongoing projects, the bank particularly mentioned the Rs53 billion Greater Thal canal project and Kachhi and Rainee canals and said such long-gestation and high-cost irrigation expansion investments were questionable even in the best of circumstances.

"This is more so when water supplies are not assured, command areas comprise sandy soils and high pay-off short-term investments compete for resources." Among the proposed irrigation projects, the bank identified the Rs42 billion Sehwan Barrage Complex project, Rs19 billion Chashma Right Bank 1st Lift Irrigation, Rs99 billion Akhori Dam, Rs18 billion Dhok Pathan dam and Rs1 billion Sabakzai dam.

The bank suggested that these projects should be deferred till the completion of their studies. The bank said that collectively the Thal canal, Kachhi and Rainee canals would account for over 4.6 million acre feet (maf) of water for their Kharif requirements only - nearly twice the additional capacity that would be created by the raising of the Mangla Dam.

There were uncertain prospects of supplying water to these canals during the Rabi season until additional storage became available. Reallocating water from other canals during Rabi, though theoretically possible, would be hard of actually implementing given the existing 'customary or historical rights' and the lack of real attention to water conservation, the report said.

The three canals would receive water for a period of 75-90 days in a year (July to September). Non-availability of water during April-June (Kharif sowing) would affect cropping patterns and yields. Since the projects would take a long time to complete, they would not yield even the low level of benefits in the short term, it said.

No funds had been allocated for command areas development under these projects without which benefits of these projects would remain elusive, the bank added. Given the sandy nature of soils, the estimated ERR for the Thal canal (over 18 per cent) appears overly optimistic.

If the additional cost of colonization, CAD (which are of the same order of magnitude as the cost of main canal works) are added, the ERRs would become unacceptable. About the Rs42 billion Sehwan Barrage Complex, the bank said the ERR was estimated at 10.1 per cent which was quite low.

The bank said that given its marginal economics, if a lower cost scheme with higher benefits could not be found after further detailed planning and analysis, it was proposed that the project be deferred for consideration beyond 2011.

The bank said that the Rs19.2 billion Chashma right bank canal lift irrigation project had an estimated ERR of 10.3 per cent and big landowners would benefit the most from additional irrigation of 67,000 acres of land. Income disparities between large and small landowners and landless labour are likely to increase.

The bank recommended that given the low ERR and high O&M cost, the decision whether or not to go ahead with the Chashma lift project should be deferred till a full and rigorous evaluation of the project feasibility had been made and mechanisms to increase cost recovery for O&M were agreed with beneficiaries.

On Rs118 billion Akhori, Dhok Pathan and Sabakzai dams, the bank said that since their feasibility studies had still to be carried out, a decision about these projects should be deferred till their feasibility had been established. Implementation should be deferred until after 2011.