Report No. 348a-PH FILE COPYPhilippinesAppraisal of the Aurora-PenarandaIrrigation ProjectApril 1, 1974

Irrigation and Area Development Division IAsia Projects Department

Not for Public Use

Document of the International Bank for Reconstruction and DevelopmentInternational Development Association

This report was prepared for official use only by the Bank Group. It may not be published,quoted or cited without Bank Group authorization. The Bank Group does not acceptresponsibility for the accuracy or completeness of the report.

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CURRENCY EQUIVALENTS

US$1.00 * Pesos (t) 6.729J 1.00 - US$0.149

WEIGHTS AND MEASURES - METRIC SYSTEM

1 hectare (ha) - 2.47 acres1 kilometer (km) 2 a 0.62 miles1 square kilometer (km } - 0.3886 square miles1 meter (i) 2 39.37 inches1 square meter (m ) - 10.76 square feet1 cubic meter (mi3) 3 . 35.31 cubic feet1 million cubic meter (Mm ) - 810.7 acre feet1millimeter (am) - 0.039 Inches1 kilogram (kg) - 2.2 pounds1 cavan (paddy) - 44 kg22.7 cavans 1 metric ton

INITIALS AND ACRONYMB

NIA - National Irrigation AdministrationUPRP - Upper Pampanga River ProjectDAR - Department of Agrarian ReformBAES - Bureau of Agricultural Extension ServicesBPI - Bureau of Plant IndustryNGA - National Grains Authority

PHILIPPINES

APPRAISAL OF THE AURORA-PENARANDA IRRIGATION PROJECT

Table of Contents

Page No.

SUMMARY AND CONCLUSIONS ............ ...................

I. INTRODUCTION ..........................................

II. BACKGROUND ............................................. 1

General ........ .................................. 1The Agricultural Sector ..... ..................... 1The Critical Role of Water Development .... ....... 2Project Formulation .............................. 3

III. THE PROJECT AREA ... 4

General .......................................... 4Climate .......................................... 4Topography, Drainage and Soils ................... 5Land Tenure and Farm Size .................... .... 5

"NExisting Irrigation Facilities .; ................ 6Agricultural Production ...... ................... 7Transportation .......... ......................... 7

IV. THE PROJECT ........................................... 7

Project Works ....... ............................ 8Water Supply, Demand and Quality ................. 9Status of Engineering ...... ...................... 11Central Luzon Irrigation Development Study ....... 11Cost Estimates ....... ............................ 12Financing ... 13Procurement ........... 13Disbursements ........... 14Accounts and Audit .......................... 14Environmental Effects ............................ 14

V. ORGANIZATION AND MANAGEMENT ........................... 14

Project Management ............................... 14Supporting Agricultural Services .............. ... 16Recovery of Cost ................................. 17

This report is based on the findings of an appraisal mission, composedof Messrs. E. G. Giglioli, M. El Moghazi (Bank) and L. W. Bartsch (Consultant).

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Page No.

VI. PRODUCTION, MARKET PROSPECTS, PRICES AND FARM INCOMES 19

Production .................... 19Market Prospects .................... 19Prices ..................... 19Farm Income .................... 20

VII. BENEFITS AND JUSTIFICATION . . .......................... 21

VIII. AGREEMENTS REACHED AND RECOMMENDATION ................. 22

ANEXES

1. Climatological Data2. Land Tenure and Reform3. The Upper Pampanga River Project4. Project Works5. Water Supply, Demand and Quality6. Central Luzon Irrigation Development Study7. Construction Schedule8. Cost Estimates9. Equipment List

10. Schedule of Expenditure and Disbursements11. Organization and Management12. Supporting Agricultural Services13. Present and Projected Cropping Patterns and Production14. Marketing and Prices15. Crop and Farm Budgets16. Farm Labor Analysis17. Economic Analysis

CRARTS

Construction Schedule No. 8152Proposed Organization for Project Construction No. 8211Proposed Organization for Operation and Maintenance No. 8212Proposed Cropping Calendars No. 8214

MiAP S

Central Luzon Basin No. 10769Upper Pampanga River Project No. 10921Project Area No. 10770Aurora Diversion Works No. 10981

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

SUMMARY

i. The Government of the Philippines has requested Bank Groupassistance to carry out the Aurora-Penaranda Irrigation Project locatedin Central Luzon. The project includes the construction of two diversiondams to lead water from the Aurora basin, through a diversion channel, intothe Pantabangan reservoir, the rehabilitation of 16,700 ha of the existingPenaranda irrigation system and the construction of a new system on some8,600 ha. It also includes provision for carrying out an irrigation devel-opment study to assess the land and water resources of Central Luzon, topropose a plan for effective development of the resources and to identifypriority projects within the plan.

ii. According to the Bank's Agricultural Sector Survey, an annualtotal of 50,000 ha of newly constructed or rehabilitated irrigationdevelopment on rice lands would have to be carried out for the remainderof the decade to allow the country to achieve foodgrains self-sufficiency.Improvement of water control is a prerequisite to optimum utilization ofthe modern high yielding rice varieties. The proposed project would be thethird in a series of Bank assisted projects aimed at providing greatersecurity of water supply for dry season rice cropping in Central Luzon,the largest rice producing region in the Philippines. The first was theAngat Dam (Loan 297-PH) and the second the Upper Pampanga River Project(Loan 637-PH). The proposed project would be an extension of the latter.

iii. Total project cost, including interest during construction andthe irrigation study, is estimated to be t 269 million (US$40 million),of which US$19.0 million, or approximately 48%, would be in foreignexchange. The Bank would finance the foreign exchange component. The totalcost of civil works and equipment to be put to international competitivebidding would be US$11.2 million and US$2.3 million, respectively. TheGovernment's executing agency, the National Irrigation Administration (NIA),would employ consultants to assist in design and construction supervis!onon the Aurora-Penaranda Irrigation Project and to provide support forreview, analysis, plan formulation and training required for the irrigationstudy. The project would take five years to execute.

iv. The Government of the Republic of the Philippines would bethe borrower with the NIA the executing agency for the project. Both theAurora-Penaranda component of the project as well as the irrigation studywould be implemented by the Upper Pampanga River Project (UPRP) office.The UPRP organization is well staffed with competent personnel and with theemployment of consultants would be able to implement the project success-fully. An Agricultural Development Coordinating Council (ADCC) would beestablished in the project area to ensure coordination of the Governmentagencies providing agricultural supporting services to the farmers. A

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Steering Committee composed of all Government agencies with interestsin land and water development in Central Luzon would be set up as part ofthe study, to ensure that all users' points of view are taken into accountin designing the irrigation development plan for the area.

v. At full development, ten years after project commencement, annualpaddy production for the project area is expected to reach 202,000 tonscompared with a current level of production of 82,000 tons. The incrementalproduction would make a contribution to the campaign for self-sufficiencyin rice by providing enough of the staple food to support just over halfa million people per annum.

vi. The Government is engaged in a program of land reform aimed attransferring ownership of the land to the cultivators. The most likelyimmediate effects of the program would be the disappearance of the fewlarge landholdings in the area and the abolition of inequitable share-cropping as a form of tenure. The project area is cultivated by 10,000farm families operating smallholdings of approximately 2.5 ha. Some 80%of the farmers are tenants of small landowners. The project would resultin rises in annual per capita income on an average farm size from aboutUS$75 at present to US$170 at full agricultural development in 1983. Theselevels of income would still be low in comparison with the national averagewhich is projected to rise to US$330 by 1983, but would lead to a narrowingof the income gap between the project area and the rest of the country.

vii. The project is expected to generate an increase in farm laboremployment opportunities, with the equivalent in full-time jobs risingfrom the present 15,000 to 21,000. In addition, it would also generateincreased employment in the services sector. The economic rate of returnof the project is expected to be about 17%. The rate of return is sensitiveto increases in cost and delays in benefits and relatively insensitive toother factors. However, even under extremely adverse conditions, the rateof return would not be less than 11%.

viii. The proposed project is suitable for an IDA credit of US$9.5million on the usual terms and a Bank loan of US$9.5 million for a period of25 years, including a 7-year grace period. The borrower would be the Republicof the Philippines.

PHILIPPINES

APPRAISAL OF THE AURORA-PENARANDA IRRIGATION PROJECT

I. INTRODUCTION

1.01 The Government of the Philippines has requested Bank Groupassistance in financing the construction of the Aurora-Penaranda Irriga-tion Project in Central Luzon. Upon completion the project would providea dependable water supply for year round irrigation of about 25,300 ha.The projec;; is an extension of the Upper Pampanga River Project (UPRP)currently being built with Bank assistance (Loan 637-PH).

1.02 A feasibility study for the project was prepared under the pro-visions of Loan 637-PH by the National Irrigation Administration (NIA) withthe assistance of Engineering Consultants, Inc. of Denver, Colorado andEngineering and Development Corporation of the Philippines, of Manila.This report is based on that study and the findings of the Bank's appraisalmission which visited the Philippines in September/October 1973. The missionwas composed of Messrs. E.G. Giglioli, M. El Moghazi (Bank) and L.W. Bartsch(Consultant). Mr. B. Kanchanalak (Bank) also contributed to preparation ofthe report.

II. BACKGROUND

General

2.01 The Philippine archipelago covers about 298,000 km (115,000 sq mi)scattered over more than 7,000 islands between the Pacific Ocean and theChina Sea. However, most of the area (98%) is encompassed in the 45 largestislands. According to latest estimates, the population is around 39.0 mil-lion and growing at a rate of 3.0% annually. Per capita GNP, which duringthe last decade grew at 5 to 6% a year, was r 1,429 (US$212) in 1972, how-ever this growth was not associated with any change in income distribution.

2.02 Out of a total land area of some 30 million ha, more than halfis in forests and about one-third is presently under cultivation or inplantations. It is estimated that there might be 2.0-2.5 million ha offairly level or slightly rolling lands still suitable for cultivationincluding up to 1.0 million ha of cogon grass lands which are difficult torehabilitate. Agricultural exploitation of this additional land by itselfwould be insufficient to meet increasing demands for food for a populationwhich is expected to reach 50 million by 1980 and to significantly improveincomes in the rural areas. These objectives call for increasing the pro-duction of presently cultivated areas through yield improvements and in-creased cropping intensities.

The Agricultural Sector

2.03 Agriculture is still the most important sector in the economy,accounting for about one-third of net domestic product, one-half of totalemployment and 70% of commodity export earnings. In the first half of the1960s the rate of growth of agricultural output was slow and failed to keep

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up with populazior growth. In the latter half of the decade, largely as aresult of the adoption of improved rice varieties, it accelerated and sur-passed the substantial growth recorded in the non-agricultural sector. How-ever, employmenit in agriculture increased during the early period of lowgrowth and levelled off during the later years. Although most of the in-crease in the labor force between 1965 and 1970 was accommodated innon-agricultural employment, the unemployment rate, especially in therural areas, remairned high. Moreover, since the new rice varieties havenot increased :ot-al labor requirements over the traditional varieties,underemployment, reflecting seasonal slack of farm operations, also remainedhigh.

2.04 With a rapid growth rate in agriculture and little change inemployment, productivity per worker increased sharply in 1965-70, whileproductivity in the non-agricultural sector remained much the same. Thus,the gap in incomes between workers in agriculture and those in other sectorshas narrowed appreciably although incomes in agriculture are still substan-tially lower. Farmers who used improved technology, such as the new ricevarieties, shared in the higher agricultural incomes, but those who continuedin the traditional ways of farming were largely unaffected.

2.05 There is considerable pressure of people on land in the Philippines,where the population density is 131 people/sq km compared with an Asianaverage of 86. Lowland areas best suited for rice have been fully occu-pied for over a decade. Migration is heavy from the overcrowded regionsof Central Luzon and the Visayas to the Cagayan Valley in Northeast Luzonand Mindanao in the south. Even though the resource base can still be ex-tended, this alone will not meet increasing denands for food for a populationwhich will approach 50 million by 1980, or significantly improve farm incomes.These goals can only be realized by raising the productivity of the resourcebase.

2.06 Agricultural sector performance will be crucial in determiningwhether the drive towards a more rapid but more equitable income expansionsucceeds. The major goals for the sector are self-sufficiency in cereals,particularly rice and corn; expansion of agricultural exports; intensificationof agrarian reform; better conservation of natural resources; and strengthen-ing of institutional support. Reaching self-sufficiency in cereals isimportant not only to strengthen the balance of payments, but also to raiseincomes for much of the rural population.

The Critical Role of Wlater Development

2.07 Mie P?ilippines cannot reach self-sufficiency in rice withoutsubstantial investment in irrigation expansion and rehabilitation. Per-formance of irrigation systems in the country falls far short of theirpotential. Tke Sector Survey 1/ estimates that, out of a total area of960,000 ha which could be served by existing irrigation systemas, only

1/ IBRD Agricultural Sector Survey, Philippines, May 2, 1973 (Report No. 39a-PH).

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630,000 ha are served in the rainy season and 254,000 ha in the dry season.

Almost all of the irriga"..ed area is devoted to rice cultivation. TheNational ::rrigation Administration's (NIA) gravity systems are the maincomponent. In addition, NIA has constructed or rehabilitated a substantialpart of the small privately operated communal systems, averaging 250-300 ha.

The Irrigation Services Unit (ISU), now under NIA's administrative supervisionis responsible for pump irrigation schemes. The 104 NIA gravity systems,varying in size from 130 ha to 30,000 ha, are usually run-of-the-river schemeswith insufficient control structures in the canals, inadequate drainage andlittle provision for access. Even when the system is new, water distributionis uneven during the wet season and limited during the dry season. Main-tenance has been minimal due to staff and fund shortages and the lack of access

for maintenance machinery. A vicious circle has developed by which lack ofmaintenance discouraged farmers from paying operation and maintenance chargesand lack of the latter precluded further maintenance.

2.08 This unsatisfactory situation began to change in the latesixties. The NIA was reorganized, more advanced irrigation designs wereintroduced and much higher levels of water management aimed at. Simultaneouslythe need for intensified agricultural supporting services on irrigation pro-jects was realized. The Bank-assisted Upper Pampanga River Project (UPRP),

and the Angat-Magat Integrated Agricultural Development Project, assisted bythe Asian Development Bank, typify the new approach. The pattern of rehabili-tation, new construction and operation exemplified by these projects isessential for large-scale rice production. Indeed, to meet domestic ricedemand in the 1970s an annual program of rehabilitation and new constructionin the rice lands of 50,000 ha will be needed for the remainder of the decade.The proposed Aurora-Penaranda Irrigation Project would thus be entirely com-patible with Government objectives for water resources development.

Project Formulation

2.09 The proposed project is the second phase in the development ofthe Pampanga river basin. It would provide dry season irrigation to landsin the Penaranda area by utilizing the storage capacity created by thePantabangan dam, the main feature of the UPRP. Although the proposed CentralLuzon Irrigation Development Study (para 4.15) would establish investrent

priorities for irrigation development in the region, it is reasonable :oproceed with the Aurora-Penaranda project at this time for the followingreasons:

(a) in terms of soils, land use, farm size and existing levelof irrigation facilities the project area is highlysuitable for modernization of rice cultivation, beingwholly similar to the various sytems being rehabilitatedand expanded under the UPRP;

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(b) being an extension of an-ongoing project it would takefull advantage of the organization facilities set up toconstruct and operate the UPRP. In particular it wouldinvolve economies of scale in terms of operation andmaintenance as well as for development of coordinatedagricultural supporting services;

(c) the diversion of Aurora water into the Pampanga basin wouldbe a net addition to the water reserves of the major ricegrowing region of the Philippines. Irrigable lands arefar in excess of available water supplies in the Pampangabasin, while the reverse is true of the Aurora basin.

III. THE PROJECT AREA

General

3.01 The project is located in Central Luzon, the largest rice pro-ducing region in the Philippines, which contains about 20% of the areaplanted to rice annually and accounts for 27% of total national production.The mean rice yield in this region is about 30% above the national average.This is attributable to the existence of irrigation systems in the area andthe rapid adoption of high yielding varieties developed by the InternationalRice Research Institute (IRRI) and the College of Agriculture of the Universityof the Philippines (Los Banos).

3.02 The proposed project covers some 25,300 ha located in the Provincesof Nueva Ecija, Bulacan and Pampanga about 100 km north of Manila. The projectarea includes the 16,700 ha of the existing Penaranda River Irrigation System(PENRIS) and some 8,600 ha of rainfed lands to the southwest. The area isbounded on the north by the Penaranda river, on the east by PENRIS lateral "C"canal and its proposed extension, on the south by the Maasim river and on thewest by the Candaba swamp and the Pampanga river (see Map).

3.03 There are a number of small towns scattered throughout the areawith populations between 5,000 and 10,000. The larger towns provide banking,storage and processing facilities as well as supplies of inputs to thesurrounding agricultural areas. A good highway network and a railroad con-necting the project area with Manila ensure an easy inflow of supplies andoutflow of produce.

Climate

3.04 The climate in the project area is tropical and monsoonal. Warmtemperatures throughout the year allow a twelve-month growing season withirrigation. About 85% of the average annual rainfall of 1,850 mm falls inthe wet season from May through November, during which heavy rains occur, andtyphoonal storms may pass through the area causing floods and some damage tocrops and engineering works. The rainfall, together with river flows in thewet season, is generally adequate for a single rice crop. Dry season cropping,

however, entails considerably more risk and a supplemental irrigation supplyis essential for an assured crop. Further climatic details are presented inAnnex 1.

Topography, Drainage and Soils

3.05 Lands in the east and southeast of the project area are gentlysloping or undulating, while in the central and western portion they arerelatively flat. The whole area is dissected by many small creeks and rivers,serving as natural drainage-ways running from the north and northwest to thesouthwest. The recently formed flood plains and terraces along the Penaranda.and Pampanga rivers are subject to flooding; the natural levees along theriver banks protect the older alluvial terraces making up most of the projectarea from flooding due to overflowing of the two rivers. The southwesternpart of the area is relatively low and borders the Candaba swamp. Thecapacity of the creeks and rivers running through the project area is usuallyexceeded during periods of high and intensive rainfall. Flooding is aggravatedby the absence of a drainage network in the existing PENRIS. The low areasin the southwest along the Penaranda and Pampanga rivers are affected byflooding. While subsurface drainage is generally poor due to the fine-texturedSoils, the lands bordering the rivers have better internal drainage becauseof higher sand and gravel contents.

3.06 Soils are fertile, generally dark, medium to fine-textured,with slightly acidic to neutral reactions and slow internal drainage.They are eminently suited to year round paddy cultivation. The flatrelief, fine texture, slow internal drainage and existing layout in smallpaddy fields would all militate against successful cultivation of dry-foot crops unless greatly improved surface and some subsurface drainagewere provided.

Land Tenure and Farm Size

3.07 Since the beginning of the century various legislative measureshave been introduced with the intention of ameliorating the lot of thetenant farmer. With the introduction of the Agricultural Reform Codein 1963, the Government committed itself to the gradual transfer of landownership from the landlords to the tenant cultivators. The progressionwas to be from sharecropper to leaseholder, to amortizing owner 1/ andfinally to full owner-operator. Within the project area the first stageof the process is clearly apparent; before 1964 sharecroppers accountedfor 50% of the farmers compared to 28% at present. While the achievementis modest, it is far higher than the national average and of real significanceto the individuals concerned. The leaseholder has security of tenure and paysa fixed annual land rent, while the sharecropper has little security and mustpay a major share of the proceeds of his crop in rent. There has been nochange in the relative proportion of owner-operators to tenant farmers.

3.08 Following the declaration of martial law in October 1972,the Government has given priority to land reform and has issued-a number

1/ An ex-tenant during the peft.d of purchase of his holding under theAgricultural Reform Code.

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of decrees to accelerate the transfer of land to the cultivators.The decrees abolish sharecropping and eliminate the requirement foran intermediate stage as a leaseholder between being a sharecropper andbecoming an amortizing owner. They also provide for the landowner toretain up to seven ha of land if he cultivates it himself, while proposingto establish tenant farmers on "family-sized" farms of three or five ha,respectively, depending on whether the land is irrigated or rainfed.More progress in transferring land to the tenants has been achievedin the first year of the new land reform program than in the previous ten.However, the question of how to deal with tenants on holdings of seven haor less poses a difficult problem, particularly in cases where part of theholding is cultivated by the owner. Many of the small absentee landownersare people whom it would be politically difficult to dispossess. It is hardto estimate the ultimate farm ownership in the project area since the averagesize of holding there is already only 5.75 ha. A reasonable scenario for thetenurial situation in the project area at full development is likely to havethe following features: the disappearance of sharecropping; an underterminablebut substantial increase in the number of owner-operators and amortizingowners; and possibly some residual lease-holding to accommodate small-owners unable to engage in farming. There is unlikely to be, however,any major change in the present farm size distribution.

3.09 Surveys carried out by the Department of Agrarian Reform(DAR) show that some 10,000 farm families, averaging six members perfamily for a total of 60,000 people, live in the project area. Theaverage farm unit is 2.5 ha, with about 621 of the farms, covering 52Z ofthe area, falling between 1 and 3 ha. The farm size distribution is:

Farm Size Farm Holdings Cultivated Area(ha) -- …_…_ -(x)…___

Less than 1 9 31-2 27 172-3 35 353-4 19 244-5 6 10

More than 5 4 11

Total 100 100

The land in the project area is owned by about 4,700 people, 82Z of whomown less than 7 ha. Fewer than 30% of the owners are actively engagedin farming and work about 3,500 ha. Over 85% of the farmers in theproject area are tenants, two thirds of which are leaseholders and thebalance sharecroppers (Annex 2).

Existing Irrigation Facilities

3.10 Approximately 16,700 ha of land in the project area fall withinthe existing PENRIS operated by NIA. The system, which was completedin 1930, suffers from insufficient maintenance and an inadequate numberof control structures, leading to wasteful use of water in the higherreaches of canals and shortages in the lower reaches. Only some 10,000 ha

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can be irrigated during the dry season because of low flows in thePenaranda river. Outside the PENRIS there are small areas served byprivately owned pumps and communal irrigation systems built by groupsof farmers using their own funds, with or without financial assistancefrom the government. These systems account for only a few hundredhectares and also suffer from a water shortage during the dry season.

Agricultural Production

3.11 Rice grown by transplanting is by far the most important cropin the area. There are small, scattered patches of crops such as maize,

water melons and vegetables. In the irrigated areas most farmers haveadopted the high yielding varieties, while in the rainfed areas there is a

substantially greater use of the lower yielding, but hardier traditionalvarieties. Fertilizer and agrochemical use is generally low, particularlyin the rainfed area. In the irrigated area the mean yield runs to 2.3

and 2.4 ton/ha of paddy for the wet and dry seasons respectively. The

yield of rainfed rice averages 2.0 ton/ha. The low yield levels are

partly due to unsatisfactory water management and partly to poor farmingpractices, such as inadequate weeding and insufficient use of inputs.

3.12 Few farmers rely entirely on machinery for land preparation,but many employ a combination of animal drawn and mechanical equipment.Small power tillers are popular. Use of machinery is more frequent in land

preparation for the dry season crop where timing is important. Approximatelyhalf of the present crop is threshed mechanically. Nearly all mechanicalequipment is operated by contractors.

Transportation

3.13 The project area is traversed by the National Highway from Manilato Northern Luzon. This road is presently being rehabilitated andupgraded and these works are expected to be completed by 1975. There is

a good network of roads connecting the barrios or hamlets to the municipal-ities with neighbouring provinces. Under the project feeder roads would

be rehabilitated and new roads contructed to handle the increased produc-tion from double cropping.

IV. THE PROJECT

4.01 The project proposed for Bank Group financing would provideirrigation and drainage facilities allowing year round cultivation ofsome 25,300 ha through more effective control of water and a transbasindiversion to bring in supplemental water for the dry season. It wouldinclude:

(a) Construction of two earth and rockfill diversion dams onthe Canili and Diayo rivers in the Aurora basin withdiversion channels to divert the water into the Pampangariver basin;

(b) Raising and improving the Pampanga-Bongabon diversion dam;

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(c) A canal connection between the Pampanga-Bongabon damand the Penaranda diversion dam by enlarging andextending for 19 km the main canal and lateral G-2of the Pampanga-Bongabon River Irrigation System(PBRIS);

(d) Rehabilitation of an existing 16,700 ha irrigationand drainage system;

(e) Construction of a new irrigation and drainage systemto serve an 8,600 ha area which is now rainfed;

(f) Improvement of existing drainage channels and con-struction of cross-drainage and diversion structuresto collect local flows;

(g) Upgrading of about 40 km of existing project roads andconstruction of approximately 15 km of additional roadsin the area;

(h) Upgrading of agricultural supporting services; and

(i) Procurement of vehicles and equipment.

The project also provides for a comprehensive study of the water and landresources of the Central Luzon basin to identify potential irrigation projectsand formulate a plan for their development, with due consideration to otherbeneficial users of water. Consultants would be engaged to assist projectstaff with the planning, design and construction of the works and to assistwith the Irrigation Development Study. A detailed description of the projectworks is given in Annex 4.

Project Works

4.02 Aurora Diversion Works. To provide supplemental dry-seasonirrigation water to the project area, two dams would be constructed onthe Canili and Diayo rivers respectively to divert their flows into thePantabangan reservoir in the Pampanga river basin by a trans-basin diversionchannel cut into a saddle on the ridge dividing the Pampanga and Aurora basins.The Canili dam would rise about 75 m above the stream bed and have a crestlength of approximately 700 m. The Diayo dam would rise about 47 m above thestream bed and have a crest length of 200 m. The dams and reservoirswould provide the elevation to divert water, but would not allow storage.Both dams would be earth and rockfill structures with impervious coresand outer shells of pervious materials. As all river flows, includingthe flood flows, would be passed by the trans-basin diversiSn channel intothe Digoliat river, a tributary of the Pampanga river, no spillway oroutlet works would be needed at the dams.

4.03 Penaranda Service Area. In order to deliver the additional waterto the project area the Pampanga-Bongabon diversion dam on the Pampangariver would be increased in height, the main canal of the PBRIS would be

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enlarged and Lateral G-2 of the PBRIS would be enlarged and extended tothe existing Penaranda diversion dam. A conduit would be constructed alongthe face of the dam to convey the water directly into the headworks of theexisting Penaranda main canal.

4.04 The Penaranda River Irrigation System (PENRIS), now deliveringwater to approximately 16,700 ha, would be rehabilitated and upgraded byrepairing existing canals and structures and providing additional controlstructures and turnouts to manage water deliveries more effectively. Newirrigation works would be constructed to serve about 8,600 ha of rainfedlands south of the PENRIS. These would include the enlargement of LateralC of the PENRIS to provide capacity to carry the additional diversion, andstructures on local rivers to divert the inflows. Adequate control struc-tures and turnouts would be provided on the canal system for efficient watercontrol and delivery.

4.05 The project would be brought to the same levels of on-farm-develop-ment as the UPRP, which are the highest in the country. The canal systemswould have a turnout for each 10 ha from which project built farm ditcheswould provide direct delivery to about 80% of all holdings. Each 10 ha blockwould also be served by a collector drain. With minor exceptions, all canalswould be unlined. Small buildings would be provided for Water ManagementTechnologists operating each 500 ha of irrigated land (para 5.05). Someroads would be rehabilitated and, where needed, new ones would be constructed.Roads for operation and maintenance would be built along the major canals.

Water Supply, Demand and Quality

4.06 The Penaranda river and three minor local streams, togetherwith rainfall, would provide sufficient water in the wet season tomeet the crop water requirements of the 25,300 ha project area. However,in the dry season the water supply is deficient and only some 10,000 hacan be irrigated. To increase the area under irrigation in the dry seasonan additional supply of water would be provided by diverting flows fromthe Aurora basin into the Pampanga basin, where the water would be storedin the Pantabangan reservoir of the Upper Pampanga River Project (UPRP).

4.07 Water studies for the entire Pampanga basin, including the projectarea, were undertaken by NIA and the consultants. These update the earlier1968 studies and take into consideration data collected since then. The nowstudies show that up to 93,000 ha could be irrigated in the dry season in theUPRP and Penaranda project areas without the Aurora diversion. The additionalwater available in the Pampanga basin would be used to expand the UPRP fromthe original area of 72,500 ha, referred to as Stage I, by two further stagesto an ultimate service area of 89,000 ha. Construction on Stage II, whichwould bring the service area to 82,400 ha, is now under way (Annex 3). Forsupplies above and beyond those needed for the Stage I area to materialize,a major improvement in the presently low levels of irrigation efficiencieswould be needed. Such improvements are only likely to be achieved gradual-ly (para 4.10), and in the interim it will be necessary to depend upon theAurora diversion to meet the project area requirements. Once the higherirrigation efficiencies are realized, additional lands can easily be broughtunder irrigation in the Pampanga basin.

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4.08 Stream flow records on the Penaranda river at the diversionpoint are very limited, although satisfactory records extending from1960 are available on two tributory streams which measure 85% of thePenaranda flows at the diversion point. Satisfactory correlations onan area basii, were obtained from these records. Adequate correlationshave been obtained with the Penaranda flows to estimate the monthly flowsof the three minor streams.

4.09 In the Aurora basin, flows at the diversion point have beenrecorded only since May 1972. Synthesized flows were obtained by cor-relation with a downstream gauging station and with rainfall recordsextending back to 1955. An average annual diversion of 164 Mm3 is expected.Because of the limited hydrologic data in the basin, correlations with out-basin data were also carried out and indicate a possible range of averageannual diversions from 137 Mm3 to 204 mm3. The higher flows could easily behandled by the diversion works. The effects of a 25% reduction in theexpected average flow have been considered in the economic analysis of theproject (para 7.02). The NIA is continuing stream gauging at all watersupply points, and this additional information would be taken into consid-eration during preparation of final designs. Agreement was obtainedthat NIA would present the final plans to the Bank for approval beforeinitiating construction. Operation studies of the Pantabangan reservoir toexamine the effects of storing the additional Aurora diversion water showedthat only minor changes in reservoir operation would be necessary, as theadditional water would amount to only 5% of the reservoir's storage capacity.

4.10 With assured water control cropping intensities on project area farmscould be as high as 250%. However, water requirements for the project werebased on an intensity of 200%, i.e. two rice crops in each calendar year toreflect peak power and organizational constraints likely to hold back croppingintensities. Taking into account the higher irrigation efficiencies expectedat the farm level upon completion of the project, conveyance losses and effec-tive rainfall, annual diversion requirements were estimated to average 22,000m3/ha for two rice crops. Based on the above assumption, a dependable watersupply from Pantabangan dam and local streams would be available for about83,000 ha in UPRP and for 25,300 ha in the project area. After completion ofthe project, farm efficiencies are expected to slowly improve even furtherover a period of years as NIA staff is trained to effectively manage the morecomplex water distribution system, and the farmers acquire a sense of waterdiscipline. However, once surplus water becomes available, it could be usedelsewhere in the Pampanga basin where there is no lack of irrigable land.

4.11 Tests of water samples from all sources to be used in the projectshow equally good quality of water with low salinity and less than 300 ppmof dissolved solids. Water from the Penaranda river has been utilized since1930 in the project area without any evidence of harmful effects. NIA hasrequested water supply rights from the Bureau of Public Works and assuranceswere obtained that the necessary water rights would be granted to the NIAand that no other water rights which could adversely affect the project'swater supply would be granted. Further details on water supply, demand andquality are presented in Annex 5.

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Status of Engineering

4.12 Exploratory drilling and foundation investigations have shownthat the existing sites for the proposed dams are adequate from anengineering and geologic viewpoint. However, further geological investi-gations are being carried out for an alternate site on the Diayo thatcould be several hundred meters downstream, and which may prove to be moreeconomical through a reduction in the amount of grouting and foundationconsolidation required. Sufficient investigations have been carried outto ensure the availability of suitable materials for construction of thedams. Studies of the irrigation and drainage systems and other worksfor both the rehabilitated and new areas were carried out by NIA. Surveyswere made for the principal canals and structures from which embankmentand quantity estimates have been completed. Minor distributories, drain-age and road networks were estimated on a unit basis per hectare fromNIA experience on the ongoing UPRP. The procedures followed are satis-factory.

4.13 The proposed construction schedule is described in Annex 7and Chart No. 8152. The dams would be built in two years. Three yearshave been allowed for completion of the irrigation system. The CentralLuzon study would be carried out in 3-1/2 years, and all project worksare expected to be completed by June 1978.

4.14 Consultants would be engaged to complete investigations anddesigns for the Aurora diversion dams and canals, prepare tender documents,supervise construction and certify payment documents for all civil works,including the irrigation systems. Although the consultants would have finalresponsibility for all these aspects, most of the design and field work wouldbe carried out by NIA's engineers and technicians. NIA lhas engaged a consult-ing engineering firm which is satisfactory to the Bank for the work outlinedabove and under terms of reference approved by the Bank.

Central Luzon Irrigation Development Study

4.15 Agricultural production in the dry season in the Central Luzonbasin requires irrigation, as 90% of the annual rainfall occurs betweenJune and November. Some 820,000 ha of land in the basin are classifiedas suitable for irrigated agriculture, of which about 190,000 ha arepresently served by national gravity irrigation systems in the wetseason. In the dry season the area irrigated is reduced by 60 to 70%.The average annual runoff in the basin is over 21,000 NO of which thePampanga and Agno river watersheds contribute 45Z and 50Z respectively.

4.16 In 1966, US Bureau of Reclamation experts prepared a report onthe basin, which identified potential water storage projects and outlinedthe possible functions of each scheme. The UPRP was one of the projectsso identified. Further investigations and studies have been or are beingcarried out which provide a valuable data basis, but are inadequate toformulate a long range irrigation development plan aimed at optimizingutilization of the region's land and water resources. The proposed study

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would meet this requirement by undertaking an inventory of the basin's landand water resources and reviewing the status of their development, after whichit would formulate an irrigation plan for the region, giving due considerationto other potential beneficial uses of the water resources. Specific potentialirrigation projects would be identified and a plan prepared for their in-tegrated development in a logical sequence. Further data are provided inAnnex 6.

Cost Estimates

4.17 Total project costs are estimated at US$40.0 million, of whichUS$4.37 million would be for the Central Luzon study. Foreign exchangerequirements are based on NIA's recent experience with the UPRP and areestimated at US$17.0 million for 45% of the total project cost. Projectcosts are based upon quantity estimates from feasibility designs and unitprices quoted in UPRP bids for comparable work items during the second halfof 1973. All unit prices have been adjusted to mid-1974 levels and reflectthe fuel price increases of December 1973. For civil works to be constructedby force account the cost of construction equipment to be procured under theproject is included in the civil works item. Unit prices for equipment,materials and supplies are based upon current quotations received by NIA.NIA's costs for design and construction supervision are included underengineering, while the consultants' fees are shown under consulting services.Physical contingency factors of 20% and 15% have been applied to the Auroradiversion and the irrigation systems respectively. A total price contingencyof 31% is included for expected price inflation on both local and foreign costitems including physical contingencies, the annual rate of inflation duringthe life of the project ranges between 5% and 12% (Annex 8).

4.18 Details of the project cost are presented in Annex 8 and aresummarized below:

ForeignLocal Foreign Total Local Foreign Total Exchange---Pesos Million--- --- US$ Million … ------

Aurora Diversion 41.5 33.7 75.2 6.2 5.0 11.2 45Penaranda Service Area 40.6 24.5 65.1 6.0 3.6 9.6 38Operation & MaintenanceEquipment 0.2 2.8 3.0 - 0.4 0.4 93

Consulting Services 1.0 4.4 5.4 0.1 0.7 0.8 87Central Luzon Study 12.8 12.8 25.6 1.9 1.9 3.8 50

Sub-Total 96.1 78.2 174.3 14.2 11.6 25.8 45

ContingenciesPhysical 15.2 12.3 27.5 2.3 1.9 4.2 45Price 30.1 23.7 53.8 4.5 3.5 8.0 44

Sub-total. 45.3 36.0 81.3 6.8 5.4 12.2 44

Total Project Cost 141.4 114.2 255.6 21.0 17.0 38.0 45

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Financing

4.19 Bank Group assistance consist:;ng-of a US$9.5 million IDA Creditand a US$9.5 million Bank Loan is proposed. This represents about 48% of thetotal cost of the project. The combined Credit/Loan would cover the foreignexchange component of US$17.0 million. Also included under the Loan portionis US$2.0 million for interest during construction. The local currency require-ments for the project estimated at f 141 million (US$21.0 million) would beprovided to the NIA by the Government out of annual budgetary appropriations.Fcreign exchange expenditure on consulting services of up to US$50,000 whichwould be incurred after March 1, 1974 but before signature, would be eligiblefor reimbursement under the proposed Credit/Loan.

4.20 To ensure the continuous and timely flow of funds, assurances wereobtained that a special fund would be set up for the project into which theGovernment would deposit every month the local currency requirements for thenext three months' period. The fund would help ensure rapid payment of civilworks contractors, which would help attract small contractors (para 4.22).Budget requirements for local currency would rise to a peak of V 64 millionin FY 77. Establishment of the revolving fund would be a condition of effect-iveness of the Loan/Credit.

Procurement

4.21 Equipment and vehicles for construction, operation, maintenanceand the irrigation study, costing about US$2.3 million, would be procuredafter international competitive bidding in accordance with Bank GroupGuidelines. A preference limited to 15% of the cif price of imported goodswould be extended to local manufacturers in the evaluation of bids. Pro-curement of off-the-shelf items costing less than US$10,000 each would beexempted from international competitive bidding and would be purchased throughnormal government procurement procedures which are satisfactory. The aggre-gate of all such items would not exceed US$100,000. A detailed list ofequipment requirements is given in Annex 9.

4.22 The Aurora diversion works (US$11.2 million) would be let asone contract, subject to international competitive bidding. Works on thePenaranda service area (US$9.6 million) consist of 12 different work items,scattered over a large area and include a large proportion of rehabil'ta-tion works. The latter would need to be planned and executed at shor. noticeto avoid the growing season and adverse weather conditions and would have tobe phased with irrigation releases. When similar works were advertised underUPRP the NIA failed to attract even local contractors. It is unrealistic,however, for NIA to expect to undertake the full volume of its plannedconstruction program in UPRP and in the proposed project by force account.Assurances were obtained that NIA, with assistance from the consultants,would investigate ways of expanding the execution of civil works in the servicearea by contract, so that the amount of work done by force account would notexceed 20% of the total cost of the work. The balance would be tenderedafter advertising according to contracting procedures satisfactory to theBank.

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Disbursements

4.23 Disbursements would be made at the rate of 100% against the cifcost of directly imported equipment or at the rate of 65% for imported equipmentprocured locally. For services of foreign consultants and for overseastraining, disbursement would cover the actual foreign exchange cost. Disburse-ments for civil works would be at the rate of 27% of certified monthly progresspayments or expenditures. For civil works contractors' mobilization andequipment disbursement would be at 100% of foreign exchange cost. It isexpected that disbursments would be completed by June 30, 1979, approximatelyone year after the end of construction. An estimated schedule of expenditureson the project and a semi-annual disbursement schedule are given in Annex 10.

Accounts and Audit

4.24 The NIA is a Government agency and its accounts are auditedanhually by the Government's Corporate Auditor's Office. Assuranceswere obtained that NIA would maintain separate accounts for the project.After audit by the Corporate Auditor's Office the project accounts, togetherwith the auditor's comments, would be sent to the Bank within four months ofthe close of each financial year.

Environmental Effects

4.25 The transbasin diversion from the 64 km of the Canili-Diayowatershed proposed under the project would have no significant effect onany existing or proposed water resources development in the 840 km2

Aurora basin. The agricultural lands in the basin get an annual precipi-tation of 3,200 mm, more or less evenly distributed throughout the year.There are about 12,000 ha of land considered suitable for irrigationdevelopment in the basin, of which more than 50% have already beenprovided with irrigation facilities. The available water resource in thebasin is much in excess of present and anticipated future requirements.

4.26 There is no schistosomiasis in the project area or in the islandof Luzon generally. Malaria is almost non-existent in the Penaranda servicearea, but some cases are reported from the Pantabangan dam site, not far fromthe proposed Aurora diversion works. The NIA provides anti-malarial servicesand operates a hospital at Pantabangan which would be available to the project.

V. ORGANIZATION AND MANAGEMENT

Project Management

5.01 The National Irrigation Administration (NIA) was created in1964 and given responsibility for developing, operating and maintainingall national irrigation systems in the Philippines. NIA is also authorizedby Government to levy and collect water rates from beneficiaries of thenational irrigation systems to defray operation and maintenance costs. TheGovernment finances the NIA through the sale of bonds or from appropriations.A Board of Directors is responsible for the Agency, and the Administrator,

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who is appointed by the Board with the approval of the President of thePhilippines, handles management.

5.02 A special project office under the direction of a ProjectManager was established to carry out the UPRP. The organization set upfor both construction, and operation and maintenance has proved effective.The proposed project, which is basically an extension of the Pampangaproject, would be constructed and operated by the UPRP organization.The Dam Division now building the Pantabangan dam would be responsiblefor the Canili and Diayo dams and the transbasin diversion channel.The Penaranda service area construction would be carried out by a newlyconstituted Division, wholly similar to the three Divisions presentlyengaged in the same kind of work in the UPRP service area.

5.03 The UPRP organization was made formally responsible for carryingout the proposed Central Luzon study by Presidential Decree No. 35 ofNovember 2, 1972. A Project Development Division has been set up to ex-ecute the task. Some 30 professionals would be assigned to the Divisionand consultants would be engaged by NIA under terms of reference alreadyapproved by the Bank to provide guidance, special technical services andassistance in training staff engaged on the study. NIA has engaged aconsulting engineering firm satisfactory to the Bank to assist with thestudy.

5.04 Coordination with other Government agencies interested in landand water development in Central Luzon would be provided by the SteeringCommittee established under Memorandum Order No. 408 of February 20, 1974.The Committee is chaired by a senior representative of the NIA and drawsits membership from the Bureau of Public Works, the National Power Corporation,the Local Water Utilities Administration, Metropolitan Water Works andSewerage System, the Department of Agrarian Reform and the Department ofAgriculture and Natural Resources. The Committee would provide coordinationwith other agencies to insure due consideration of all aspects of thebasin's land and water development. However, NIA would be the finalauthority on the scope and content of the irrigation development planreport to be submitted to the Government. The report would be largelytechnical and any conflict of interest problems would have to be resolvedthrough normal Government processes.

5.05 The Dam and Reservoir Division of UPRP would assume responsa)ilityfor the operation and maintenance of the Aurora element of the proposedproject. A fourth Irrigation District would be set up to operate and maintainthe Penaranda service area. The latter would be divided into 50 ha irrigationunits. Two such units (100 ha) would be supervised by a ditchtender, fiveditchtenders (500 ha) would be controlled by a graduate Water ManagementTechnologist. A Supervisor would be responsible for a water managementdivision including five Water Management Technologist (2,500 ha). Three tofour divisions would constitute a zone under a Superintendent. The proposedPenaranda Irrigation District would consist of three zones. The water manage-ment staff would be trained in the UPRP's on-going training program. Detailsof the organization are given in Annex 11 and Charts No. 8211 and No. 8212.

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Sutpporting Agricultural Services

5.06 An Agricultural Development Coordinating Council (ADCC) has been setup in the UPRP to coordinate the work of the various agencies providing serv-ices to the farmers. The arrangement is still new, but it appears to beworking well. The proposed Penaranda project would be managed as an integralpart of the UPRP and should be brought under the ADCC. However) there aresome difficulties in attaining this objective. The existing UPRP falls with-in a single province, while the Penaranda project area lies in three provinces.As it would be impractical to have three ADCCs for the project and the threeprovinces in question fall within the same administrative region, it shouldbe possible to organize the existing ADCC on a regional basis to cover boththe UPRP and the project areas (Annex 12). The expanded ADCC would preparean overall plan for supporting agricultural services for review by the Bankwithin one year of loan signature. Assurances on restructuring of the ADCCand preparation of the plan were obtained.

5.07 Extension services are provided by a number of Governmentagencies, the main one being the Bureau of Agricultural Extension Services(BAFS). The principal extension workers are farm management technicians,home management technicians and rural youth officers. There are now about25 extension workers in the area, with a ratio of farm management techniciansto farmers of 1:600 compared to the proposed ratio for the UPPR of 1:200.To deal with the requirements of the land reform program and double croppingin the project area, the extension staff would be increased so that, by 1980,there would be about 100 extension workers in the area. Out of this totalabout 50 would be farm management technicians, each dealing with some 200farmers on about 500 ha. In addition, there would be one supervisor for every10 farm management technicians. Assurances were obtained that the necessaryagricultural extension personnel would be provided to the project.

5.08 The Maligaya Rice Research and Training Center (MRRTC) is situatedclose to the project within the UPRP boundaries. The Center is engagedmainly on rice research in the fields of breeding and selection, fertilizerrequirements, weed and pest control, water management, and storage and pro-cessing. It also works on seed production, certification and testing for riceand other crops. The Center has training facilities that are already usedfor training UPRP and extension staff. Both the MRRTC and the T1PRP workclosely with the International Rice Research Institute and the AgriculturalCollege of the University of the Philippines. The proposed project would beable to draw on all these sources for research back-up.

5.09 Present fertilizer consumption in the project area is less than4,000 tons per annum, with urea accounting for a little less than half of thetotal. At full development the project area would require sorme 12,000 tonsof fertilizer, on the basis of 60 kg/ha of nitrogen and 30 kg/ha of phosphateper crop season which the existing supply channels could meet. In view ofpossible world shortages of nitrogenous fertilizers, the effects of a 25%reduction in the projected urea requirement at full development have beenconsidered in the economic analysis of the project (Para 7.02). The certifiedrice seed requirement at full development would amount to 500 tons per year,and no difficulties are envisaged in obtaining this amount.

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5.10 The higher cropping intensity resulting from the project wouldrequire a large increase in credit. As part of the accelerated land reformprogram, the Government has strengthened the credit institutions and easedcredit to small farmers, previously dependent on the landlords for theirrequirements. A system of "supervised credit" is used, which includes theprovision of technical services to the borrower to ensure that recommendedpractices, such as variety, fertilizer and agrochemical inputs, are adopted.Under the system no collateral is required. The Rural Banks in the projectarea granted loans totalling V 8.6 million (US$1.3 million) in 1972. ThePhilippine National Bank has also become active in providing productioncredit. Upon completion of the project, production credit requirements fortwo crops of paddy are expected to amount to about V 40.2 million (US$6.0million) annually. The existing credit institutions would be able to meetthe requirement.

5.11 The UPRP's Agricultural Development Division would be responsible 1)for monitoring such aspects of the project's progress as: deployment of ||extension and water-management personnel, pace of land reform, croppingpatterns, use of inputs and credit, incidence of pests and diseases, etc.The Division is already carrying out this work on UPRP.

Recovery of Cost

5.12 Republic Act No. 3601 establishing NIA gave it the authority to"collect from the users of each irrigation system constructed by it suchfees as may be necessary to finance the continuous operation of the systemand reimburse within a period of not less than twenty-five years the costof construction thereof." The NIA's record of irrigation fee collection hasshown a steady improvement over the last five years. The total collectionhas risen from V 4.8 million in FY69 to Y 7.9 million in FY73. Over the sameperiod the collection rate as a percentage of fees charged has increased from53% to 65%. The better recovery is attributed to improved and more timelybilling, the use of more collectors, rehabilitation of some of the irrigationsystems, withholding of water to delinquents and incentive collection bonuses.

5.13 Irrigation fees on the national irrigation schemes are now leviedat the rate of t 25/ha for wet season rice and P 35/ha for dry season rice.The NIA Board approved an increase in fees equivalent to two cavans of paddyper ha in the wet season and three cavans in the dry season. At the existingGovernment support price for paddy the new fees would be equal to V 70 andV 105 per ha, respectively. Assuming the fee increase is approved by thePresident, they would be applied to all national irrigation systems in thePhilippines and would not differentiate between the level of facilities avail-able to the farmer on a project like the UPRP and the level found on a tra-ditional NIA gravity system. The existing irrigation fees account for about3% of the current net income of a PENRIS farmer, while the new rates would beequal to about 9% of the farmers' current income and about 6% of the estimatednet farm income at full development. The operation and maintenance (O&M) costof the project (Annex 11), based on the costs of the entire UPRP includingPenaranda, are estimated at V 125/ha/annum (US$18.6). The rates proposedby the NIA would cover O&M costs, but would contribute little toward capitalrecovery.

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5.14 A more reasonable recovery rate, which would be within the farmers'repayment capacity and yet permit NIA to recover a substantial part of theinvestment in the project, would be equivalent to 9 cavans of paddy per ha/year (approximately F 300 at present prices). At a discount rate of 10%, thepresent worth of such a charge would be about r 47 million. The present worthof the project cost 1/ plust O&M costs, at the same interest rate, is aboutt 159 million, indicating a recovery ratio of about 30%. Considering thesmall average farm size in the area, the tenurial status of most farmers andthe fact that per capita income at full development would be below the averagenational income, the proposed recovery level, which represents about 10% ofnet farm income, would be reasonable. The above analysis excludes the costof Pantabangan dam apportionable to the project, as no final cost allocationof the dam between power, flood control and irrigation has been made yet, andthe total area to be irrigated from the reservoir has not yet been finalized.Once such an analysis is completed the project water charges policy would bereviewed.

5.15 To ensure sound operation and maintenance practices and an equita-ble contribution by the beneficiaries toward recovery of the capital cost ofthe project, the Government has agreed that:

(a) the NIA would make adequate annual budgetary provisionsto supply the funds necessary for operation and maintenanceof the project. Total annual expenditure for operation andmaintenance in 1974 constant prices is estimated at r 2.0million beginning in 1977, rising to j 3.2 million (US$0.4

- million) thereafter;

(b) the NIA would treat the UPRP and the proposed Penarandaproject as a single entity in all matters relating toirrigation fees;

(c) irrigation fees would be levied to provide NIA with sufficientfunds to maintain and operate the project and to allow for therecovery of investment cost within not more than 50 years,taking into account farmers' incentives and capacity to pay.A gradual increase in irrigation fees over a period of fiveyears from completion of construction to a level equivalent toabout 9 cavans of paddy per ha/year was considered reasonable;and

(d) the NIA would take all necessary actions to ensure fulland prompt collection of the irrigation fees.

1/ Total project cost of r 255.6 million, less price contingencies,equipment salvage value and the Central Luzon Study. In this analysisboth costs and revenues are evaluated at constant prices.

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VI. PRODUCTION, MARKET PROSPECTS, PRICES AND FARM INCOMES

Production

6.01 Upon completion of the project the area cropped would rise fromabout 36,000 ha per annum at present to 50,600 ha, corresponding to anincrease in cropping intensity from 143% to 200%. An assured water supply,improved extension services and expanded credit facilites, would encourageincreased planting of high yielding rice varieties, heavier fertilizerapplications and greater use of crop protection chemicals. The use ofmachinery for land preparation and threshing would increase to meet moreexacting crop calendars. It is expected that at full agricultural developmentin 1983 most threshing would be mechanical and practically all farmers woulduse a combination of machinery and animal-drawn implements for land preparation.

6.02 At full development, paddy yields from the wet and dry seasoncrops are expected to average 3.8 and 4.2 ton/ha respectively. It isestimated that in the PENRIS area these yield levels would be achievedfive years after the introduction of water control, while in the existingrainfed areas the projected yield levels would be reached six years afterthe provision of water. Total paddy production from the project areawould be about 202,000 tons at full development, compared with 82,000tons at present and an estimated 107,000 tons in future without the project.Details of present and future yields and production are given in Annex 13.

Market Prospects r ^ f ;

6.03 The Agricultural Sector Survey concluded that even wifh a rapid,recovery from the recent floods, the Philippines would have difficulty inregaining the momentum in rice output of the latter 1960s, when productionrose some 5.5% a year, reflecting yield increases averaging about 6% along withsome decline in the area planted to upland rice. Based on population forecastsof 50 million in 1980 and assuming that present annual per capita absorptionof milled rice of about 100 kg would remain the same, total demand for ricein the Philippines in 1980 would be around 5.0 'million tons equivalent to 7.6million tons of paddy. To meet the higher demand, local production wouldhave to increase by about 5.2% per year between 1972 and 1980. While theGovernment's recent campaign to increase rice production has met withconsiderable success, the prospects of fertilizer shortages on the worldmarket raise some doubts about the Philippines' ability to attain self-sufficiency by 1980. In any event the additional production from the projectarea should be readily marketable.

Prices

6.04 Two alternative estimates of the future farm-gate price forpaddy expressed in 1974 constant prices have been used in the report.The first, which was used in the economic analysis, was derived from theBank's world market price projections for milled rice in 1980. For the30% broken quality Thai rice normally imported by the Philippines, theprice would be US$150 per ton of milled rice cif Manila. This price

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corresponds to a farm-gate price of ' 31 cavan (1 710/ton of paddy). Thesecond, which was used in the farm budget analysis, was derived fromrecent market prices in the Philippines and the level of the Governmentsupport price. It amounts to f 35.0 per cavan (r 800/ton of paddy) andcorresponds to an import price of $170 per ton of rice cif Manila (Annex 14).

Farm Income

6.05 Farm models have been prepared for the PENRIS and the rainfedlands, covering typical farm sizes of 1.5, 2.5 and 4.0 ha, as well as fourtypes of tenure, i.e. sharecropping tenancy, leaseholding tenancy, amortiz-ing ownership and freehold tenure (Annex 15). Leaseholding is the mostcommon form of land tenure in the project area, but under the provisions ofthe land reform program amortizing ownership would be the prevailing formin the future. The estiw.ated present incomes and those projected at fulldevelopment for six different farm models under these particular forms oftenure are summarized below. The present incomes under sharecropping areshown for comparative purposes.

Farm Size Tenure Farm Income(ha) Present Future

Rainfed PENRIS-------- ( -)…___- ----

1.5 Sharecropper 960 1,860Leaseholder 1,160 2,240 4,225Amortizing owner - - 5,195

2.5 Sharecropper 1,600 3,070Leaseholder 1,835 3,585 6,865Amortizing owner - - 8,480

4 Sharecropper 2,560 4,930Leaseholder 2,690 5,250 10,125Amortizing owner - - 12,710

6.06 Taking the 2.5 ha farm size as the average for the project area,present net farm incomes of between V 1,835 and Y 3,585 (US$270 to $530),depending on whether the land is rainfed or irrigated, would rise at fullproject development to V 6,865 (US$1,020) for a leasehold tenant whosestatus did not change. Should the same farmer acquire his land under theprovisions of the land reform program and become an amortizing owner, hisincome would rise to Y 8,480 (US$1,260). The present per capita incomesin the project area, based on a family size of six, leasehold tenure andthe standard 2.5 ha farm, vary from I 305 (US$45) to r 595 (US$89), orbetween about 20 and 40% of current national per capita income of ' 1,429(US$212). At full development in 1983 per capita income on the same sizeof farm in the project area would rise to f 1,145 (US$170) if the farmerremains a leaseholder and t 1,415 (US$210) should he become the owner. Theselevels of income would still be low in comparison with the national averagewhich is projected to rise to r 2,220 (US$330) by 1983. However, theywould be equivalent to between 50 and 65% of the national per capita incomeand would indicate a narrowing of the gap between conditions in the projectarea and the rest of the country.

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VII. BENEFITS AND JUSTIFICATION

7.01 The proposed project would increase cropping intensities andyields on about 25,300 ha presently dependent upon run-of-river irrigationand rainfed cultivation by providing an assured water supply, better watercontrol, improved drainage and the necessary agricultural supporting services.Rice would continue to be the only crop grown in the area. Assuming a 50-yearproject life, a rice price equivalent to US$150 per ton cif Manila (para 6.04),a world market price of US$200 per ton of urea and a shadow wage rate forunskilled farm labor equivalent to about 50% of the present peak market wagerate, the economic rate of return on the project would be about 17%. If farmlabor is priced at the current peak market rate, the rate of return would beabout 16% (Annex 17).

7.02 A further analysis was carried out to examine the economic rateof return under adverse conditions. These conditions, of which the firsttwo were experienced during construction of the UPRP, are as follows: athree-year delay in project benefits as a result of failure to completeconstruction on time; a 30% increase in construction costs as a result ofgreater quantities of work being required to complete the project; ananticipated shortage of nitrogenous fertilizers leading to a 25% reductionin fertilizer application rates and resulting in a reduction of yields to3.6 and 3.9 ton/ha during the wet and dry season crops respectively(para 5.09); a possible 25% shortfall in water flow from the Aurbra basingiving rise to a reduction in the dry season cropped area to 21,500 ha(para 4.09), and a combination of fertilizer and water shortages. In eachcase the rate of return did not fall below 11%. Benefits from the projectwere also evaluated by using a rice price equivalent to the Governmentsupport price. In this case the rate of return would be 20%.

7.03 Investments associated with construction of the UPRP dam andother facilities, which would contribute to the realization of benefitsfrom the project, have been excluded from the economic analysis describedabove. When the updated benefits and costs streams associated with theUPRP are added to those of the Aurora Project, the economic rate of returnon the combined project would be 14%, which is somewhat higher than therate of return from UPRP alone. The above analysis also disregards thelikely benefits and costs associated with a more intensive level of on-.armworks. Both the desirable level and construction procedures for such worksin the area are yet to be determined. However, when implemented theyshould lead to substantially improved benefits for the combined UPRP/Aurora-Penaranda project.

7.04 Double cropping throughout the project area would introduce a moretaxing cropping calendar and the use of farm machinery for land cultivationand threshing would have to be increased considerably in order to meet thenew requirements. Nevertheless demand for farm labor in the area wouldincrease from 15,000 man-years at present to 21,000 man-years at full devel-opment. Practically all the additional demand would occur in the dryseason, a period of few employment opportunities.

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7.05 At full agricultural development rice import savings due to theproject would amount to US$9.4 million per year at the projected worldmarket price. After deducting the incremental cost of imported fertilizersand chemicals, the net foreign exchange savings as a result of the projectwould amount to about US$7.1 million per year.

VIII. AGREEMENTS REACHED AND RECOMMENDATION

8.01 During negotiations, agreement with the Government was reachedon the following principal points:

(a) the necessary water rights wculd be transferred to the NIA,and no private rights which could adversely affect theproject's water supply would be granted (para 4.11);

(b) NIA would make adequate annual budgetary provisions to supplythe funds necessary for proper operation and maintenance ofthe project (para 5.15);

(c) NIA woulc' treat the UPRP and the proposed project as a singleentity in all matters relating to irrigation fees (para 5.15); and

(d) irrigation fees would be levied to provide NIA with sufficientfunds to maintain and operate the project and to allow for therecovery of investment cost within not more than 50 years,taking into account farmers' incentives and capacity to pay.A gradual increase in irrigation fees over a period of fiveyears from completion of construction to a level equivalentto about 9 cavans of paddy per ha/year was considered reasonable(para 5.15).

8.02 A condition of effectiveness af the Loan/Credit would be theestablishment of a special fund for the project, into which the Governmentwould dteposit every month the local currency requirements for the nextthree months' period (para 4.20).

8.03 The proposed project would be suitable for an IDA credit ofUS$9.5 million on the usual terms and a Bank loan of $9.5 million, with a25 year maturity and a grace period of seven years. The borrower would bethe Republic of the Philippines.

ANNEX 1Page 1

PHILIPPINES

AURORA-PENERANDA IRRIGATION PROJECT

Climatologial Data

1. The project area is a homogeneous climatological unit with warmtemperatures throughout the year. The climate is tropical and although twoseasons may be recognized, they are not especially pronounced. There is arelatively dry period from the later part of November into April when thenortheast winds generally prevail. The lowest precipitation usually extendsover a period of two to five months each year. Heavy rains prevail through-out the balance of the year when the southwest monsoon dominates the weather.The project area is only partly protected from the northern and trade windsbut is open to the southwest monsoons in which frequent and severe cyclonicstorms occur. Rainfall becomes more intense in May and June reaching apeak in August and falls off in October and November. Between 85 and 90%of the total annual precipitation of about 1,850 mm falls in the wet seasonbetween May and November and is generally sufficient to produce a crop ofrice. There is not enough rainfall to produce a rice crop during the dryseason.

2. Temperature differentials are not great throughout the year andfor Cabanatuan City, which is approximately 25 km. north of the project area,the mean monthly temperature varies frem a low of 26°C in January to a highof 30 C° in May.

3. Relative humidity is high all year, with a monthly mean varyingfrom 70% to 80% during the rainy season and from 63% to 74% during the dryseason. The mean monthly evaporation varies from a low of approximately110 mm in September to a high of approximately 245 mm in April with a meanannual total of 1,975 mm.

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Climatic Conditions at Cabanatuan Cityl/

January February March April May June July August September October Noverber December Total

Number of rainy days 2/ 2.0 2.0 3.0 4.0 12.0 18.0 20.0 24.0 22.0 12.0 10.0 6.0 135.0

Average kainfall (mm) 4.4 6.1 27.7 41.4 149.7 256.8 301.2 385.3 314.9 173.7 138.7 52.0 1,852.5

Maximum rainfall (mm) 23.1 49.5 265.1 261.4 586.8 590.8 608.1 647.5 628.7 403.1 575.0 212.9 2,534.9

Minimum rainfall (mm) 0.0 0.0 0.0 0.0 16.6 64.3 142.5 176.1 179.3 11.4 13.5 0.0 1,306.1

PRelative humidity '%) 71 68 65 63 70 80 83 85 85 81 78 74 75

Minimum temperatuire (OC) 20.1 20.0 21.4 22.9 23.8 23.7 23.5 23.6 23.4 22.8 21.9 20.9

Mean temperature (0c) 25.9 26.3 27.8 29.3 29.7 28.6 28.1 27.5 27.6 27.6 26.8 26.2 27.62

Maximum temperature '°C) 31.6 32.6 34.1 35.5 35.5 33.3 32.4 31.5 31.7 32.5 31.6 31.5

Prevailing wind direction NF NE SE SE SE SE SE S S NE NE NE

Wind velocity (m/sec) 3/ 2.2 2.6 2.2 1.9 1.7 1.7 1.8 1.8 1.5 1.6 2.2 2.7

_/ Average values for the period 1946-1971 unless otherwise stated. f':2/ Average values for the period 1951-1970

3/ Average values for the period 1949-1971 H

ANNEX 2Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Land Tenure and Reform

Background

1. At the end of the last century land tenure in the Philippineswas feudal in character, as large tracts of land were held by a smallnumber of owners, while the cultivators worked as sharecropping tenants.Under the sharecropping system the tenant had no security of tenure andusually paid an inordinately high proportion of his crop to the landlordas rent. Since the beginning of this century various legislative measureshave been introduced aimed at regulating and improving the conditions oftenant farmers by defining sharing arrangements, formalizing share-tenancycontracts, limiting the landlords' right of eviction, providing forcompulsory arbitration of agrarian conflicts, recognizing cash tenancyor "leaseholding" as an alternative to sharecropping and providing a degreeof security of tenure. While these measures improved tenancy relations,they allowed for the continuance of sharecropping as the principal formof land tenure. The resulting inequities in the distribution of incomefrom land continued to threaten the stability of the agricultural sector.

2. In 1963 the Agricultural Reform Code (RA. 3844) was promulgated.The long term aim of the code was to transfer ownership of rice and cornland to the cultivators through the eventual abolition of tenant farming.The ultimate goal was to be achieved in stages. The first step in thetransition would be the abolition of sharecropping and its replacement bya system of cash tenancy or leaseholding. The second step would consist ofthe purchase by Government of the private land farmed by the leaseholdersfor resale to them, thus transforming them into amortizing owner-cultivators.After full payment for the land they would become owner-cultivators orfreeholders. The code also fixed cash rents for leaseholders equivalent to25% of the average harvest during the last three crop seasons prior tointroduction of land reform in the area, less the cost of seed, harvesting,threshing, hauling and processing.

3. By 1971, little more than 50,000 sharecroppers, about 5% of thetotal, had been converted to leaseholders with secure tenure on the landthey cultivated and with more favorable land rent payments. The secondstage of full-ownership had only been attained by 3,400 farm families.Following the declaration of martial law in 1972, Presidential Decree No. 27

ANNEX 2Page 2

was issued with the objective of acceleratin- the transfer of landownership to tenant farmers on rice and corn lands. The main provisionsof the decree are that:

(a) tenant farmers, whether sharecroppers or leaseholders,shall be deemed owners of a family size farm, consistingof 5 ha on rainfed land and 3 ha on irrigated land;

(b) the landowner shall retain not more than 7 ha providinghe agrees to cultivate it himself;

(c) for purposes of determining the cost of the land to betransferred to the tenant farmer, the land is valued attwo to two and one half times the average harvest of thethree normal crop years preceding the promulgation of thedecree; and

(d) tenants will pay for the land in 15 equal annual instalmentsat an interest rate of 6% per annum.

4. Accurate data on the numbers of tenants and landlords, and thesize, distribution and location of their holdings are still being collected.Estimates put the-number of tenants on rice and corn lands at about 1million on approximately 1.8 million ha held by some 350,000 landlords.It is believed that 80% of the latter have holdings of less than 7 ha.In addition the total number of rice and corn farmers probably exceeds2 million while the total area of rice and corn lands is not much morethan 4 million ha, of which considerably less than/1 million ha areirrigated. There is therefore little prospect of the obiective of 5 harainfed or 3 ha irrigated family size farms being attained. In the firstyear of the accelerated land reform program the Government has appliedthe provisions of the legislation to tenanted estates over 100 ha. About107,000 land transfer certificates have been issued to some 78,000 tenantsfarming 130,000 ha of land. This is more than was achieved in the previousten years. For smaller sized holding,s the Government is proceedingcautiously, while searching for means of satisfying the aspirations of thetenants without alienating the large class of small landlords.

Situation in the Project Areai

5. Surveys carried out by the Department of Agrarian Reform (DAR)-show that 27,000 ha in the project area, including some 2,000 ha that areout of command, are owned bv 4,700 people. Some 44% of the owners haveproperties of less than 3 ha, and 82% have holdings below the 7 ha limit-for possible landlord retention. This group of owners accounts for 42%of the area. The land ownership pattern by size of holding is as follows:

ANNEX 2Page 3

Size of }o ldin_, Owners Area Owned(ha) No. % (ha)

Less than 3 2,075 44 3,739 143 - 7 1,798 38 7,701 287 - 12 431 9 3,772 1412 - 24 260 6 4,229 1624 - 5n 117 2 3,924 1450 -100 43 1 3,804 14Total 4,724 100 27,169 100

The average farm unit in the area is 2.7 ha, with about 62% of the 10,000farms, covering 529 of the area, falling between 1 and 3 ha. The farm sizedistribution is as followqs:

Farm Size Hnldings Cultivated Area(ha) - %--------------------

Less than 1 9 31 2 27 172- 3 35 353- 4 19 244 -5 6 10

More than 5 4 11

Total 100 100

6. The tenure picture within the Project area in June 1973 was asfollowx:

Tenure Farmers Area

No. ha 71

Owmer-Operator 1,300 13 3,618 13Leaseholder 5,Q61t 5° 16,066 59Sharecropper 2,772 28 7,485 28

Total 10,034 100 27,1F9 100

Roughlv lhalf of the owner-operators rere amortizing owners, i.e. ex-tenantfarmers in the process of purchasinp their farms. A survey carried out byDlAP in the eight municipalities cove-ing the project area showed that,prior to the nromulc,ation of the AM,r;cultural Reform Code in 1963, share-cronpers constituted 507 of the total farmers. While there has beenlittle or no chang,e in the relative nroportion of owner-operators totenant farmers, there has been a sub;tantial change-over from sharecroppingto the more equitable leaseholding.

ANNEX 2Page 4

7. The PAR plans to carry out the land transfer Program involving1.8 million ha and approximately 1 million tenant families by 1977.Should this ambitious target be achieved, all farms in the project areawould be owner-operated before the comnletion of construction in theservice area. Until the ambiguities of the existing legislation withregard to the small landlords are clai^fied, it is not possible todetermine what pronortion of the existing tenant farmers could expect tobecome owner--operators. However, evern under the most conservative assump-tions it is safe to predict that sharecropping as a form of land tenurewill have disappeared from the project area by full development in 1983,and that the number of amortizing owners will have increased substantially.However, there is no reason to believe that there would be any substantialchan-e in the existing farm size distribution.

ANTE-X 3

Page 1

PIILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

The Upper Pampanga River Project

1. A feasibility report prepared by the US Bureau of Reclamation(USBR) in 1966 contained the first documented estimates of the irrigableland in the Upper Pampanga river basin. The report proposed an UpperPampanga River Project (UPRP), based on construction of storage dams onthe Pampanga and Maringalo rivers to provide wet season irrigation to81,000 ha and dry season irrigation to 75,000 ha. Some 45,700 ha ofthe 81,000 ha were already included in NIA operated run of river gravitysystems served by the following diversion dams: the Talavera RiverIrrigation System (TRIS); the Lower Talavera River Irrigation System(LTRIS); the Paapanga River Irrigation System (PRIS) and the PampangaBongabon River Irrigation System (PBRIS). The remaining 35,000 ha wereto be developed by bringing in lands to the west and south of the NIAsystems.

2. The USBR study was revised in early 1968 by the UPRP CoordinatingCommittee (UPRPCC). The irrigable area was reduced from 81,000 ha to65,500 ha with the Pampanga reservoir alone, 71,500 ha with the addition ofthe Maringalo reservoir and power releases and 74,500 ha without powerreleases. Of the 65,500 ha to be served by the Pampanga reservoir,rehabilitation would be required on 39,700 ha of existing systems andnew construction would be carried out on 25,800 ha.

3. After appraisal by the Bank in late 1968 the UPRP was reformulatedunder Loan No. 637 PH. Only the Pantabangan dam on the Pampanga riverwould be built to serve a total of about 77,000 ha in the wet season andabout 72,000 ha in the dry season. Rehabilitation of existing systemswould account for 45,700 ha in Areas I, II and IV, while new systemswould be built on 31,300 ha in Areas III and V. The Bank version ofthe project provided for about a 10% increase in the service areaproposed under the UPRPCC project formulation. This was due to amore detailed review of available water resources in the basin atthe time of appraisal. The areas to be covered under the projectwere as follows:

ANNEX 3Page 2

(ha) -

Area I 24,200

Pampanga River Irrigation System (PRIS) 13,000'4urcon Creek Irrigation System (MCIS) 6,000Lower Talavera River Irrigation

System (LTRIS) 3,200Vaca Creek Irrigation System (VCIS) 2,000

Area II 11,500

Pampanga Bongabon River IrrigationSystem (PBRIS) 10,050

Pamaldan Cinco Cinco IrrigationSystem (PCCIS) 1,450

Area III . 12,000

Pampai'xga Bongabon River IrrigationSystem Extension (PBRISE) 12,000

Area IV 5,200

Talavera River IrrigationSystem-Lower (TRIS-L) 5,200

Area V 24,400

Sto. Domingo Area (SDA) 16,100Munic Area 500Aliaga Area 3,000Talavera River Irrigation System-

Upper (TRIS-U) 4,800

Wet Season Total 77,300

Less TRIS-U 4,800

Dry Season Total 72,500

ANNEX 3Page 3

4. The land classification revort prenared in 1971 by the NIA withUSBR assistance defined a project boundary and a gross area of 128,490 ha,of which 103,830 ha were determined to be arable and 101,060 ha wereclassified as irrigable. Recent studies of available water in the basin,which also evaluated previously unconsidered sources, concluded that upto 92,700 ha of land, an increase of some 20,000 ha, could be broughtunder double-cropping of rice with an improvement of farm irrigationefficiency. Under the project a concerted effort is being made to trainthe farmers to accept new technology and to provide them with the necessaryinputs to achieve efficient double-cropping. As part of this intensifiedextension effort and through the implementation of rotational irrigation,NIA expects substantial improvements in the currently low farm irrigationefficiencies. On this assumption preDarations are being made to expand theexisting scope of the UPRP, referred to as Stage I, bv about 10,000 ha togive a total Stage II area of 82,410 ha in the dry season and 87,210 hain the wet season. At present work is limited to oversizing the necessarycanals and structures in Stage I to deal with the larger area. Constructionof the terminal facilities for Stage II is being delayed pending completionof Stage I and improvement in farm irrigation efficiencies. In Stage IIthere would be a reduction in the irrigated area originally planned inSto. Domingo together with increases in the PBRISE. PBRIS, Aliaga, Munoz andRizal--Munic areas (Table 1).

5. At the current low level of farm irrigation efficiency of about28% the water available in the project area would be sufficient for alittle less than 60,000 ha of double-cropDed rice. It is anticipatedthat the intensified extension effort being mounted by the Government aspart of the rice self-sufficiency campaign, together with the substantial1build-un of NIA water management staff, would result in an initial improve-ment in efficiency to about 36% by the time construction of Stage I iscomnleted in 1976, and shortly thereafter a further rise to 43%, whichwould permit year round irrigation of Stage II.

6. In Stage III the UPPP wnuld total slightlv less than 89,000 hain the drv season and about 98,nn0 hn in the wet season. A farm efficiencyof 48v' would he required. No date c.in be set for this development.

ANNEX 3Table 1

PHILIPPINES

AURORA - PENARA1RDA IRRIGATION PROJECT

UPRP Development Stages

5ervice Area Stage I Stase II State III

!dzal-Munic 500 2,600 2,600

xtensc.n (EXTN) -- 3,780

Lower Talavera River Irrigation System (LTRIS) 3,200 3,210 2,880

Vaca Creek Irrigation System (VCIS) 2,000 2,050 2,050

Murcon Creek Irrigation System (MCIS) 6,0oo 5,040

Pampanga River Irrigation System (PRIS) 13,000 15,210 14,550

Platero - 1,000 1,000

Aliaga 3,000 5,670 5,670

Pamaldan Cinco Cinco Irrigation System (PCC1S) 1,450 1,260 1,260

Pampanga Bongabon River Irrigation System (PBRIS) 10o050 16,150 16,150

Pampanga Bongabon River Irrigation SystemExtension (PBRISE) 12,000 12,300 12,300

San Agustin Extension Area (SAEA - - 1,000

Talavera River Irrigation System-Upper (TRIS-U) 4,800 4,800 4,000

Talavera River Irrigation System-Lower (TRIS-L) 5,200 5,400 9,400

Munoz - 3,540 3,540

Sto-Domingo Area (SDA) 16,100 8,950 12,480

Total Wet Season 77,300 87,210 97,700

Tot,;L Dry Season 72,500 82,410 88,920

1/ 1968-IBRD Formulation.

ANNEX 4Page 1

PHILIPP NES

AURORA-PENARANDA I.RIGATION PROJECI

Project Works

1. The Aurora-Penaranda IrrigTtion Project is an extension of theUpper Pampanga River Project (UPRP). It would consist of two main features,an irrigated area of 25,300 ha and a transbasin diversion scheme 75 kmnorthwest of the irrigated area, which would divert water from the smallAurora watershed into a headwater tributary of the Pampanga River. Theadditional water would au,ment the Ppntabangan releases and would permitadditional dry season irrigation in the Penaranda project area. Rainfalland wet season flows in the Penarand. River and adjacent streams, afterimprovement of the canals and distritution system, would be sufficientto produce a crop of rice on the 25,27n0 ha of the project area in the rainyseason. The diverted water, which mculd be stored in the Pantabanganreservoir of the UPRP and released in the dry season, would nrovidesufficient additional water to permit cultivation of a dry season cropin the full project area. The principal features of the project are asfollows,

(a) The Aurora diversion would consists of a dam on the Caniliriver, a dam on the Diayo river, and two diversion channels,one connecting the two res4rvoirs and another through asaddle in the ridge dividi'tg the Aurora basin and thePampanga river basin. The diverted water would be dischargedthrough these channels int' the Digoliat river, a tributaryof the Pampanga river;

(b) The raising and improvement of the Pampanga-Bongabon diversiondarm and an extension of th- Pampanga-Bongabon main canal tothe headworks of the existing Penaranda diversion dam. Here,a nine crossing though the Penaranda diversion dam reservoirwould pass the flow of the Pamnanga-Bongabon main canaldirectly into the Penarandr main canal to avoid any lossesin the reservoir:

(c) The rehabilitation ancl enlargement of the existinq irrigationand drainage system servinr' about 16,700 ha of the Penarandaproject area.

ANNEX 4Page 2

(4) A new irrigation and drainage system to serve an 8,600 haextension of the Penaranda area which is not irrigated atpresent;

(e) Improvement of existing drainage channels and construction ofcross drainage and diversion structures for local flows;

(f) Upgrading of existing roads and construction of additionalroads in the project area; and

(g) Construction of an electric power transmission line fromthe Pantabangan dam to the Canili and Diayo damsites.

2. Canili and Diayo Dams. The Canili and Diayo dams would be locatedin steep canyons of the Canili and Diayo rivers approximately 30 km north-west of the town of Rizal and 20 km east of the Pantabangan dam. The cor-fluence of the two rivers is about 800 m downstream of the damsites. Eachproposed dam would be an earth and rockfi 1 structure with an imperviousearth core, sand and gravel filters downstream of the core, and a perviousouter shell of alluvial materials. The Canili dam would rise about 75 mabove the stream bed with a crest length of approximately 700 m and abase width of 300 m. The embankment volume would be approximately 1,700,000m3 . The Diayo dam would rise some 47 m above the stream bed with a crestlength of 200 m and a base width of 20C m. The embankment volume would beapproximately 400,000 m3. The impervicus materials for the dams wouldcome principally from the two diversion channels, the alluvial and filtermaterials from river deposits 2 to 10 km from the damsite and partiallyfrom decomposed rock materials closer to the damsites. Suitable rock forrip rap exists within 2 km of the damsites.

3. Appurtenant Dam Works. All river flows, including the flood flows,would he passed by the diversion channels from the reservoir into theadjacent Digoliat river, a tributary of the Pampanga river basin. Thedams and reservoirs would provide the elevation to divert water, but wouldnot allow storage. Spillways would not be provided for either dam as allflood flows would pass immediately into the Digoliat river, whose channelhas adequate carrying capacity. A conduit would be constructed throughthe foundation of each dam to permit diversion of the river during construc-tion of the embankment. Upon completion of the dam embankment, the conduitswould be closed with a concrete plug to hold the waters in the reservoir.The diversion conduit for the Canili dam would be designed to pass a 25-yearflood as construction of the dam is expected to require eight months andshould any delay occur, the wet season flows could be passed with a conduitof this capacity. The Diayo dam is expected to be completed in one dryseason of six months without difficulty and the conduit would be designedto carry the maximum dry season flows. The reservoir capacities are givenin Table I.

AN1EX 4Page 3

4. Diversion Channels

(a) Transhasin Diversion Channel. The transbasin diversionchannel would be constructed in a saddle on the ridgedividing the Pampanga and Aurora basins. The channel,with a length of about 1,200 m, would connect the Canilireservoir with the Digoliat river. The channel would beunlined and apDroximately 90 m wide with a maximum depthof 13 m and would be designed to pass the flood flows. Anunlined pilot canal would be constructed below the bottomgrade of the larger channel to carry the normal flows.The smaller canal would extend anproximately 5 m belowthe bottom of the larger chiannel, would be trapezoidalin section, 5 m wide at the bottom and be provided with aconcrete control structure and road bridge near the lowerdischarge end. More than 90% of the volume of water divertedwould be confined to the pilot canal. During the wet season,flood flows are expected to inundate the pilot canal atwhich time the larger transbasin channel would be utilized.The diversion ch nnel *^ould be able to pass safely flowsof up to 2,400 m Isec, which are far in excess of the 100year flood. The channel would be excavated predominantlyin overburden, with possibly some weathered rock in thebottom. The excavated material would be utilized in theconstruction of the dam embanlkments.

(b) Diayo Channel. The Diayo rhannel would be an unlined canalabout 200 m long which wou]d connect the Diayo and Canilireservoirs. It would have a bottom width of 10 m with2:1 side slones and a maximum depth of 22 m. The channelis designed to carry the probable maximum flood of the Diayoriver. It would be excavated mainly in overburden, and thematerial would be used in the dam embankments.

5. Access Roads. Access roads to the damsites have been completed.Anv additional extensions and improvements to the existing roads wouldbe carried out by the contractor for the dams.

6. Power Line. A 69 kv woodpole nower line would be extendedfrom the Pantabangan damsite to the diversion dams. The line would providepower for construction and for a new resettlement area downstream from theCanili dam for families who are to be relocated because of the constructionof the Pantabangan dam.

7. Penaranda _Service Area. Water for the Penaranda service areawould come from two principal sources:

(a) from the Aurora basin diversion via the Pantabangan reservoirand the Pampanga river- and

ANNEX 4Page 4

(b) from streams including the Penaranda, Bulu, San Miguel andGarlang rivers in the service area.

8. To deliver the additional dry season water to the project areait would be necessary to slightly increase the height of the Pampanga-Bongabon diversion dam, to enlarge the main canal of the Pampanga-BongabonRiver Irrigation System (PBRIS) from approximately Station 9 to Station 21,and to provide a new canal connection to the Penaranda system by enlargingand extending Lateral G-2 of the PBRIS to the Penaranda system diversion dam,where a condiut would be constructed along the face of the dam to deliverthe water into the headworks of the existing Penaranda main canal.

9. The existing Penaranda irrigation system (PENRIS) built between1925 and 1933 and now delivering water to about 16,700 ha, would be rehabi-litated and upgraded by repairing canals and structures, constructingadditional sub-laterals, farm, ditches, turnouts, drainage canals andassociated works. New irrigation workr would be constructed in the Penarandaextension area of approximately 8,600 la (PENRISE). This would requirethe rehabilitation and enlargement of Lateral C of the PENRIS, and theconstruction of diversion dams and cro s drainage structures on the Bulu,San Miguel and Garlang rivers to divert the inflows. In general, the canalsystems would have additional structures such as checks, control structuresand turnouts to more effectively contrcl the water deliveries and moreefficiently provide water as needed to each field. The new systems wouldhave a turnout for each 10 ha unit fron which farm ditches, constructedas a project cost, would provide direct delivery to most ownerships.However, a few owners would still receive deliveries through theirneighbours' fields. Canals would not be lined. A small building tobe used as a working station for the Water Management Technologist (WMT)would be provided for approximately each 500 ha of irrigated land.

10. Roads. Roads would be constructed on the rehabilitated and newlybuilt canal banks. In addition, the existing roads in the irrigated areawould be improved by widening, surfacing and rehabilitating structures;additional new roads would be provided where such facilities do not existbut are needed.

11. On-Farm Development. The proposed level of on-farm development issimilar to what is being implemented on the UPRP and would be a substantialimprovement over the existing system which makes no provision for accessor for distribution beyond the sub-lateral. The NIA is now building a 1,000ha pilot scheme on the UPRP to test the feasibility, costs and local accept-ability of full on-farm development, in-luding land consolidation, landleveling and individual farm access to irrigation and drainage. The effectsof the development on yields, ease of c3erations and efficiency of wateruse would be applicable to the proposed project.

ANNEX 4Table 1

PHILIPPINES

AURORA-PENARANDA IRRIDATION PROJECT

Statistical Data on Dams and Reservoirs

Canili Dio

Reservoir

Inactive storage 24 Mm3 1.25 Mm3

Maximlm storage 42 Mm3 2.60 Mm3

Area - at top of inactive storage 120 ha 7.0 ha- at top of 'naximum storage 250 ha 17.0 ha

DamnZoned Zoned

Type Earthfi ll Earthfill

Height above streambed 75 m 47 m

Crest length 700 m 200 m

Crest elevation 305 m 305 m

Maxium water surface elevatiun 304.7 m 304.7 m

Volume of embanlanent 1.7 Mm3 0.4 2m3

.ANNX 4Table 2

PHILIPPINES

rABA'ENh 1Av IRRaUAiN PgECST

Suznmwyof r*ion KFaciitiee to be ded

.2/1/is PNRSE: 2/ Tbtal

G*nals and Laterals 284 km 1 34 km 418 ckm

Main Tarm Ditches 272 km 1h8 km 400 Aom

Supplementary Farm Ditches 7114a1n k336 km 1,050 km

Drainage Ditches ¶87 km 88 km 275 km

Turnouts ~425 units 200 units .625 units

WMT-WorkinStg ations 32 units 16, km .:48 units

Upgrading of existiRg: roads 25-km 15 km 40 km

Cmwtruction of new'ioads 10n 5kkmm .15 km

1/ Excisting PenaTanda River .r ation yte o f 16,700 ha.

2/ Proposed.' PenaraRiverIrr4gatili 8y9s tem .EZrteusion of. 8 600 ha.

ANNEX 5Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Water Supply, Demand and Quality

1. Water Supply - The project would obtain its gain water supplyfrom the Penaranda river and three minor rivers flowing through theproject area the Bulu, San Miguel and Garlang rivers. 4Flows in the rainyseason are sufficient to irrigate the proposed project;, but during the dryseason, there is not enough water to grow a rice crop on the full projectarea. Supplemental dry season water would be provided by diversion ofwaters from the Aurora basin into the Pampanga basin.

2. Records of discharge on the Penaranda river at the diversionpoint are unreliable and flows of the river have been correlated fromrecords of gauging stations on two tributaries. The gauging stations haveacceptable continuous records from mid-1960 and measure the flows of 85%of the Penaranda basin. The total flows at the diversion point werecorrelated on an area basis. On the San Miguel and Gatlang rivers,flow records are available for only two years (1960 through 1962). Theserecords were correlated on an area basis to obtain the combined flow ofall the tributaries and prorated with the Penaranda flows to obtaincorrelated monthly flows.

3. In the Aurora basin, flows at the diversion point with a drainagearea of 63.5 km2 have been recorded only since May 1972. An estimate ofthe flows has had to be synthesized by correlation with river runoffrecords on the Cabatangan river, at a point approximately 10 km belowthe diversion damsite near Diammon with a drainage area of 177 km2, aswell as with rainfall records at Baler and Conversion. River runoffrecords extend back to 1955 and the rainfall records extend back to1946. Because of severe orographic effects, the rainfall records had tobe adjusted to correct for wide variations in precipitation betweenstations. River records were principally adjusted on an area basis,but took into consideration the short term records at the proposedtransbasin diversion point. An average annual diversion of 164 Mm3 isexpected. Because of the limited hydrologic data correlations with moredistant rainfall stations in the general area were carried out. Fromthese studies it is estimated that the annual amount available fordiversion could range from a minimum of 137 Mm3 to a maximum of 204 Mm3.The monthly flows would vary from 7.9 Mm3 in April to 17.4 Mm3 in November.The diverted water would be stored in the Pantabangan reservoir which hasa capacity of 3,435 Mm3. Operation studies of the reservoir indicate that

ANNEX 5Page 2

by reasons of its large capacity, only minor adjustments In reservoiroperation would be necessary to store the additional water, or to takecare of any flood flows. As about two-thirds of the project's totaldry season irrigation water requirement would be stored in the PantabanganReservoir, farmers would be advised on November 1 of each year of theprobable dry season water supply. This would be before planting time and,should the supply be less than normal, the farmers would be able toadjust their planting accordingly.

4. Water Requirements - It is assumed that two crops of rice wouldbe grown each year using 120-day non-photoperiodic rice varieties. Theplanting and harvesting dates would generally be aligned With the wetand dry seasons. Accordingly, planting periods would be June 15 toAugust 15 for the wet season crop, and November 15 to December 21 forthe dry season crop. Land preparation would be performed prior to thesedates. Irrigation periods were assumed to be 105 days in the wet seasonand 100 days in the dry season for transplanted rice. Under thisschedule, irrigation demand during March and April would be minimalallowing maintenance of the irrigation system to be carried out underdry conditions.

5. A computer analysis of the irrigation water requirements of theentire Panpamga basin, including the Penaranda area, and of the ability ofthe available supplies to meet the requirements was undertaken. Estimatedmonthly river flow records, estimated consumptive use and an average annualwater deficiency of 7% were used. The study updates the previous studiesmade in 1968 when the Bank appraised the Upper Pampanga River project.The study takes into consideration additional data collected since thattime, and the flows from small side streams, internal project flows andreturn flows, which provide additional and heretofore unconsidered watersupplies to the basin. The study shows that up to 20,000 ha more landthan the 72,500 ha in Stage I of the UPRP could be developed if irrigationefficiencies on the farm are raised to 48%. Work has already begun todevelop the UPRP to Stage II, totaling 82,400 ha, on the assumption thatfarm efficiencies will be raised by intensified extension and improved NIAstaffing to 43% within a reasonably short time. In view of the largesize of the UPRP, increases in efficiency beyond this level are expectedto come more slowly.

6. For the Penaranda project an annual water requirement for twocrops of rice has been estimated at 22,000 m /ha with a farm efficiencyof 58%. The higher efficiency has been assumed as the project would besmaller and more compact than the UPRP and would also benefit from theexperience gained operating the latter. The study showed that even ifa farm efficiency of 80% was attained, the water available in Pantabanganreservoir and the local rivers would not allow more than 10,000 ha ofland to be irrigated in the Penaranda area in the dry season. The Auroratransbasin diversion is therefore required to provide the additional waterneeded for dry season cropping on the full project area.

ANNEX 5Page 3

7. Project water requirements have been estimated as follows:

Wet Season Dry Season

A. Land Preparation (20 days)

Saturation 140 105Submergence 25 25Evaporation 62 57Percolation 33 33

Sub-Total 260 220Annually

Total 480

B. Field Crop (105 days) (100 days)

Evapotranspiration 470 525Percolation 175 165

Sub-Total 645 690

Total 1,335

Total crop water requirement 1,315Less effective rainfall 965Farm water requirement 850Plus farm irrigation losses 625Farm irrigation requirement 1,475Plus canal losses 495Plus system administrative losses 230

Total Diversion Requirement 2,200

ANNEX 5Page 4

8. Quality of Water - Tests of water samples on the Canili and Diayorivers indicate good quality of water with total discolved solids under250 ppm. The tests of water in the Pamnanga river basin show equally goodquality of water with total dissolved solids under 300 ppm. The waters ofthe Penaranda river have been utilized in the project area since 1930without evidence of any harmful effects. Recent water samples collectedfrom the Penaranda, San Miguel, and Bulu rivers indicate the water to beof good quality with total dissolved solids slightly exceeding 200 ppm,with low salinity and ion concentration levels. The quality of wateravailable from all sources is suitable for irrigation and no harmful effectsare foreseen.

9. Floods - In the absence of concurrent rainfall and runoff recordsat or near the Canili and Diayo diversion dams, the inflow design floodwas estimated by deriving a probable maximum precipitation for the watershedand applying this to a derived synthetic unit hydrograph. The probablemaximum precipitation was derived from a depth-duration envelope curve ofobserved maximum point rainfall of various durations in the Philippines.The data used in the same as that used by the Bureau of Public Works toderive inflow design floods for dam and reservoirs in Central Luzon. Arepresentative unit hydrograph for the Aurora watershed was derivedsynthetically by the US Bureau of Reclamation recommended practice forungaged areas. From this procedure, a one-day stojm duration is consideredthe most critical with a peak discharge of 1,975 m Is. This flood wasadopted as the design flood and the discharge capacity of the Aurora diver-sion channel slightly exceeds this figure.

10. Sediment - Sediment sampling has only recently been started andthe data obtained have been collected during times of low river discharges.These samples indicate a low sediment accumulation although they cannot beconsidered as an accurate analysis of the effect of sedimentation.Further sampling and analysis wqould continue and more accurate conclusionswould be reached in a few months when high stream flows are analyzed andbefore final desi-ns are prepared for the dams. In any event, sedimentationrates would not be a serious matter as almost the entire proportions of theCanili and Diayo reservoirs would he available for sediment storage. Therewould be no interference with reservoir operations as the dams would beused primarily as diversion structures.

ANNEX 6Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Central Luzon Irrigation Development Study

General

1. The Central Luzon basin covers approximately 1,800,000 ha ofland in eleven provinces (Bulacan, Nueva Ecija, Pampanga, Pangasinan,Tarlac, La Union, Nueva Vizcaya, Quezon, Zambales, Rizal and MountainProvinces) of which about 87% or 1,570,000 ha lie in the five provinces ofBulacan, Nueva Ecija, Pampanga, Pangasinan and Tarlac. Within these some820,000 ha are found to be potentially suitable for irrigated agriculture.

2. Land is one of the most important basic resources in the CentralLuzon basin and, agriculture and agriculturally based activities constitutethe major segment of the region's economy. The foremost problem facingagriculture is the lack of dependable supplies of water for irrigationthroughout the year. Rainfall, though generally sufficient to supportcrops during the wet season, is erratic as to time and place of occurrenceand is unquestionably deficient during the dry season. As a result, agri-cultural production in rainfed areas is limited to the wet season, andlands are left uncropped in the dry months. Of approximately 190,000 haof land served by national gravity irrigation systems in the five provincesduring the wet season, only about 30 to 40% are irrigated during the dryseason.

3. Average rainfall in the basin varies from approximately 1,600 mmto 3,000 mm per annum. About 90% occurs during June through November.The estimated average annual runoff in the basin is over 21,000 Mm3, about45% originating in the Pampanga river watershed, 50% in the Agno riverbasin and the remaining 5% from smaller coastal drainage areas.

4. In 1966, a water resources survey team from the U.S. Bureau ofReclamation prepared and submitted to the Philippine Government a CentralLuzon basin report. This report identified potential storage projectswithin the region, outlining the possible functions of each scheme. Oneof the projects which was so identified and which has since then beenimplemented is the Upper Pampanga River Project (UPRP). Groundwater in-vestigations are being conducted in the Guimba area with assistance fromthe United Nations Development Program (UNDP). Further investigationsand studies have been or are being carried out, which provide basic dataand information that would be helpful in identifying other projects in thebasin.

ANNEX 6Page 2

5. The earlier investigations in the basin have provided a valuabledata basis, however, such data are inadequate to formulate a long-rangeirrigation development plan with the end in view of achieving optimumutilization of the region's land and water resources. The proposedCentral Luzon Irrigation Development Study would meet this requirement.

Objectives

6. The objectives of the study would be to:

(a) Undertake a comprehensive inventory of the basin's landand water resources;

(b) Review the present status of water resources developmentin the basin and determine present and future developmentneeds in the light of current government plans and policieson irrigation, power, flood control, municipal and indus-trial water supply, and other uses of water;

(c) Formulate a plan of irrigation development for the regiongiving thorough consideration to the other potentialbeneficial uses of the water resources;

(d) Identify specific potential projects which would meetimmediate and future water requirements in the basin area;and

(e) Provide special training for NIA staff in regional andcomprehensive basin planning through on-the-job and consultantassisted training programs in the Philippines and elsewhere.

7. The plan to be developed by the study would provide guidelinesfor the integrated implementation of irrigation projects in a logicalsequence within the region.

Implementation

8. The Central Luzon study would be undertaken by NIA's office ofthe UPRP. It would be assisted by a firm of consultants who would beemployed to provide general guidance in the study and expertise in technicalfields as needed to reinforce the UPRP staff. Within the UPRP a ProjectDevelopment Division (PDD) would be assigned the primary responsibility ofcarrying out the study, and would obtain assistance from other unitsin UPRP as needed. The Division has five sections, Investigations,Economics and Land Resources, Hydrology, Plan Formulation and Social andEnvironmental Aspects. The staff would consist of approximately 30professionals, and 80 subprofessionals for field work, drafting, transporta-tion and administrative support. With the assistance of consultants thePDD staff would be fully competent to satisfactorily carry out the study.

9. Surveys and mapping would be undertaken, including aerialphotography, to assist in the preliminary planning and to subsequently

ANNEX 6Page 3

aid in the preliminary design of irrigation facilities and flood controlworks. Extensive ground control would be required for interpretationof the aerial photographs and the preparation of contour maps for projectlayouts.

10. Hydrologic studies would be carried out to assess the wateravailability in the basin. Additional rainfall and river gaging stationswould be installed or existing stations improved to provide data forfuture use. The required hydrologic information would be derived from theexisting rainfall and streamflow data and where necessary by hydrologicanalysis through correlation with relevant data. Sedimentation and evaporationstudies would also be carried out as needed.

11. Information on ground water in the basin is limited. The geo-physical conditions of the Central Luzon plains have not yet beenassessed and the results of some previously drilled test wells are in-conclusive and not generally applicable throughout the basin. Under thestudy, an electrical resistivity survey would be carried out over a periodof two years to ascertain whether there is any ground water potentialin the basin and if possible to indicate the location of areas with thegreatest promise.

12. At sites wiere potential structures are proposed geologicalexplorations would be initiated. Core drilling, test pits and otherfoundation exploration activities would be undertaken where structuresare planned. Similar activities would be carried out for constructionmaterial exploration.

13. For the purpose of the study a soil survey based on visualinspection with a limited amount of laboratory back-up would be provided.NIA would rely primarily on the Bureau of Soils for this work. Inasmuch asrice would undoubtecly be the principal crop, this type of survey would beadequate for preliminary plans. A reconnaissance land classification wouldbe required for the preparation of subsequent feasibility studies.

14. The current agricultural activities in the basin would beanalyzed and potentials, constraints and limitations identified. Futureagricultural possibilities under the proposed study would be reviewedand programs identified which would beneficially assist in establishinggreater and more profitable agricultural output. Associated with thiswould be a review of the land ownership pattern, the need for adjustmentin ownership, and the advisability of undertaking a land consolidationprogram for more efficient project formulation and agricultural development.The review would be based on the data being collected by the Department ofAgrarian Reform under the Government's land reform program.

15. A training program for technical personnel of NIA would beundertaken under the study. It would provide promising technicians theopportunity to gain broader knowledge in comprehensive land and waterresource development planning. The training program would cover allaspects of such work and would include on-the-job training as well asacademic courses. The training work would be carried out with the help of

ANNEX 6Page 4

the consultimg firm employed by the NIA for the study and would includeoverseas training as well as training within the Philippines.

Consultants

16. NIA would employ under terms of reference already approved bythe Bank Group a firm of consultants to assist with the study. It isexpected that NIA would be able to carry out many of the data collectionfunctions and that the role of the consultants would be to provide guidance,review and special technical services as needed. The consultants' workwould include advice and review of work on aerial surveys and mapping,hydrometry, geologic and construction material investigations, groundwaterexploration and well testing and land classification and land resourcessurveys. The consultants would carry out overall hydrologic studies,designs and cost estimates for major structures; they would review andevaluate the adequacy of all data, the benefit and economic analyses andthe preparation of the irrigation development plan for the basin. Theywould also prepare a report giving the findings of the study, along withsupporting background information. In addition the consultants wouldassist with the training program for NIA staff, and in the coordinationof activities with the Steering Committee.

Steering Comnittee

17. In view of the broad scope of the study coordination with otherGovernment agencies would be essential and would be provided through aSteering Committee, which would include representatives of the primaryGovernment agencies that are engaged in land and water development. TheCommittee would draw its members from the National Irrigation Administration,Bureau of Public Works, National Power Corporation, Local Water UtilitiesAdministration, Metropolitan Waterworks and Sewerage System, as well asother affected government agencies. The Committee, which would be chairedby a senior staff member of NIA, would provide coordination with otheragencies on the study to insure consideration of all development aspectsof the basin's land and water. As the purpose of the study is to preparean irrigation development plan for consideration by Government, thefinal authority on the scope and content of the report would rest with NIA.Through participation in the Steering Committee other agencies would begiven an opportunity to express views which may affect or be in conflictwith the irrigation development plan. The agencies would also becomeaware of the proposals contemplated by NIA. The report would deal largelywith the technical aspects of development and could not be expected toresolve all the conflict of interest problems which may exist in a largebasin development. These would have to be resolved through the normalGovernment processes for authorization of projects which would take intoconsideration country-wide interests and the proposals of other agencies orgroups.

ANNEX 6Page 5

Report

18. Upon completion of the study a report would be prepared whichwould include an evaluation of the irrigation possibilities in the basinincluding transbasin diversions, storage facilities and a reconnaissanceof groundwater potentials. Where proposed irrigation projects have multi-purpose features, such as power, flood control and navigation, these wouldbe evaluated with the project after discussion with the agencies primarilyresponsible for such activities. Land use and agricultural aspects would beexamined in sufficient detail to show the prospects and limitations. Areview and analysis of land ownership, land reform and land consolidationwould be made. Social and environmental conditions of proposed developmentswould be reviewed. Project layouts would be in sufficient detail to permitat least reconnaissance level cost estimates for projects proposed fordevelopment in the succeeding 25 years. More accurate estimates would beprepared for projects proposed for earlier development. An evaluation ofeconomic benefits to establish a priority of development and the formulationof an overall irrigation development plan would be included. The reportwould be issued in final form after review by the NIA and the SteeringCommittee.

19. It is expected that the investigations would be completed inabout three years and a report setting forth the development plan wouldbe submitted six months later.

Costs

20. The study is estimated to cost a total of US$4.37 million includinga foreign exchange component of US$2.2 million for the purchase of equipment,vehicles, materials and supplies, consultant and other contractual servicesand for costs associated with the training of NIA personnel. Details ofthe cost estimate are given in Annex 8 and a list and cost of the proposedequipment to be purchased is shown in Annex 9.

ANNEX 7

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Construction Schedule

1. The proposed construction schedule for the project is shown onChart No. 8152. Construction is estimated to take five years. The firstyear (1974) would largely be devoted to mobilization, planning and design.Physical work would commence in the second year, reach a peak in the thirdyear (1976) and gradually taper off in the fifth year (1978).

2. The diversion works and the rehabilitation of the 16,700 haPenaranda system would be completed by the end of May of 1977, thus allow-ing the June-November Aurora basin flows to be stored in Pantabangan reser-voir for utilization in the 1978 dry-season crop. Construction of the8,600 ha extension to the Penaranda system would not begin until 1976. Thearea is situated at the southern limit of the existing canal system andwould have to await the enlargement and rehabilitation of the latter beforeit could be developed. The first fully irrigated rice crop on the new areawould be taken in the 1978 wet season.

3. As a major proportion of benefits from the project would bederived from the increased cropping intensity in the dry season, timelycompletion of the Aurora diversion works would be of critical importance.

ANNEX 8Table 1

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Cost Estimate

ForeignExchange

Local Foreign Total Local Foreign Total %-------- (Pesos '000) --------- --------- (US$ '000)_________

1. AURORA DIVERSION UNIT

Mobilization and Roads 2,020 2,400 4,420 300 355 655 54Relocations 470 - 470 70 - 70 -

Canili Dam 20,795 18,370 39,165 3,090 2,730 5,820 47Canili Dam Diversion Conduit 2,660 1,040 3,700 395 155 550 28Diayo Dam 5,650 4,925 10,575 840 730 1,570 46Diayo Dam Diversion Conduit 235 100 335 35 15 50 30Diayo Channel 670 705 1,375 100 105 205 51Transbasin Diversion Channel 5,860 5,270 11,130 870 785 1,655 47Transmission Lines 670 ,l010 1,680 100 150 250 60

Sub-Total 39,030 33,820 72,850 5,800 5,025 10,825 46Contingencies 20b 7,805 6,750 14,555 1,160 1,005 2,165 46Engineering Supervision & Administration 32 2,425 - 2,425 360 _ 360 -

Sub-Total 49,260 40,570 89,830 7,320 6,030 13,350 45

2. PENARANDA SERVICE AREA

Raising PBRIS Diversion Dam 240 65 305 35 10 45 22Enlarging PBRIS Main Canal 4,710 3,610 8,320 700 535 1,235 43Construction Lateral G-2 2,185 1,405 3,590 325 210 535 39Conduit at face of Penaranda Diversion Dam 1,040 400 1,440 155 60 215 28Rehabilitation of existing Penaranda

Service Canals 9,755 7,380 17,135 1,450 1,100 2,550 43Construction of irrigation facilities in

Penaranda Extension Area 7,940 5,170 13,110 1,180 765 1,945 39Construction of cross drainage/diversion

structures for local flows 5,420 2,545 7,965 805 380 1,185 32Enlarging Lateral C 1,415 680 2,095 210 100 310 32Improvement of existing drainage channels 2,150 1,855 4,005 320 275 595 46Improvement of project roads 975 925 1,900 145 135 280 48Construction of new project roads 505 470 975 75 70 145 48

Sub-Total 36,335 24,505 60,840 5,400 3,640 9,040 40Contingencies 15% 5,485 3,675 9,160 815 545 1,360 40Engineering Supervision & Administration 6% 4,205 _ 4.205 625 - 625 -

Sub-Total 46,025 28,180 74,205 6,840 4,185 11,025 38

Sub-Total I + 2 95,285 68,750 164,035 14,160 10,215 24,375 42

3. CONSULTING SERVICES 1,005 4,375 5,380 150 650 800 81

4. OPERATION & MAINTENANCE EQUIPMENT 170 2,860 3,030 25 425 450 94

5. CENTRAL LUZON STUDY

Project personnel 5,785 875 6,660 860 130 990 13Contractual Services 5,920 4,915 10,835 880 730 1,610 45Equipment 1,150 6,970 8,120 170 1,035 1,205 86Contingencies 1,930 1,915 3.845 285 285 570 50

Sub-Total 14,785 14,675 29,460 2,195 2,180 4,375 50

SUB-TOTAL PROJECT COST 111,245 90,660 201,905 16,530 13,470 30,000 45Price Contingencies 1/ 30,075 23,755 53,830 4,470 3,530 8,000 44Interest during construction - 13,455 13,455 _ 2,000 2,000 100

TOTAL PROJECT COST 141,320 127,870 269,190 21.000 19,000 40,000 48

1/ Based on Annex 8, Table 3

ANNEX 8Table 2

PHnIPPINE

AURORA - PENARWN&D IRIGAiTION PROJECT

CENTRAL LUZON IRRIGATION DEVELOBMENT STUDY

Cost Estimate

Local Foreign Total

…- - -- -(us$ O o)- - - - -

1. Project personnel 840 - 84o

2. Training project personnel 20 130 150

Sub-Total 860 130 990

3. Contractual Services

a) Survey P Mapping 500 - 500b) Groundwater investigation 100 70 170c) Geologic exploration 100 40 140d) Consultants 180 620 800

Sub-Total 880 730 1,610

4. Equipment, Supplies & Materials

a) Office supplies, materialss, furniture 30 - 30

b) Field supplies, materials& furniture 25 - 25

c) Imported equipment - 850 850d) Equipment rental 80 - 80e) Fuel, oil & spares 185 185f) Sundries 35 - 35

Sub-Total 170 1,035 1,205

Sub-Total Items 1-4 1,910 1,895 3,805

Contingencies 15A 285 285 570

Total 2,195 2,180 4,375

ANNEX 8PHILIPPINES Table 3

AURORA-PENARANDA IRRIGATION PROJECT

Price Contingencies

Calendar Year: 19743/ 1975 1976 1977 1978 1979 Total

1. Civil Works Us$ 'ooo1/ 595 2,650 8,660 7,910 2,785 775 23,375

Armual Inflation Rate % 12 10 8 8 8 8

Price Contingencies US$ '000 35 425 2,100 2,550 1,200 370 6,680

2. Equipment US$ '000 2/ 100 700 790 h65 190 55 2,300

Annual Inflation Rate % 8 7 5 5 5 5

Price Contingencies US$ '000 5 75 125 100 50 20 375

3. Other US$ '000-/ 730 1,270 1,405 700 205 15 4,325

Annual Inflation Rate % 9 9 8 7.5 7.5 7.5

Price Contingencies US$ '000 35 170 305 205 75 10 800

Total US$ '000 1,425 4,620 10,855 9,075 3,180 845 30,000

Price Contingencies (Rounded)US$ '000 100 700 2,600 2,900 1,300 400 8,000

1/ Based on Annex 8, Table 1

2/ Based on Annex 9, Tables 1, 2 and 3.

3/ As estimated costs based on mid-1974 prices, half yearly rate used.

ANNEX 9Table 1

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Equipment, Materials and Supplies for Force Account Work

Total CostItem Quantity Unit Cost C.I.F.

(U $ '000)-------

Crane--Truck lOT w/i yd. clawdrag 1 20 20

Crane, Crawler 20T w/l yd. clawdrag 1 35 35

Tractor crawler, D-6 equivalent 4 50 200

Loaders, wheeled 1-3/4 yd. 1 25 25

Pneumatic Tired Rollers, 22T 2 30 60

Vibrating Drum Rollers, 15T w/ind.

tractor 50 hp 4 30 120

Sheepsfoot Rollers 4 12 48

Ditchers, 1:1 slope w/farm tractor,

75 hp 2 40 80

Graders, 125 hp 2 35 70

Truck, dump, 4 x 2 8 15 120

Truck, stake, 4 x 2 3 12 36

Truck, pick-up, 4 x 4 6 8 48

Jeeps, 4 x 4 12 6 72

Radio Transceiver (Single side band) 4 2.5 10

Sub-Total 944

Spare Parts 56

Total 1,000

ANNEX 9Table 2

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Equipment, Materials and Supplies for Operation and Maintenance

Total CostItem Quantity Unit Cost C.I.F.

------- (s, 0o) -------

Crane-Truck lOT wA/ yd. clawdrag 1 20 20

Crane, Crawler 20T w/1 yd. clawdrag 1 40 40

Tractor Crawler, D-4 equivalent 6 25 150

Loaders, wheeled 1-3/4 yd. 1 25 25

Graders, 125 hp 2 35 70

Truck,dump, 4 x 2 4 15 60

Truck)stake, 4 x 2 1 12 12

Truck, pick-up 4 x 4 2 8 16

Jeeps, 4 x 4 4 6 24

Radio Transceiver(single-side band) 4 2.5 10

Sub-Total 427

Spare Parts 23

Total 450

ANNEX 9Table 3

PHILIPPIiNES

AURORA - PENARAD IRRI WTION PROJECT

OENTRAL LUZON IRRIGATION DEVELOHNT STUDY

List o' F,uioment and Vehicles

Item Estimated Cost

A, SURVEy: N AID MAPPING

Distomat DI - 10, 4 units 60,000Theodolite, $ units 25,000Precision levels, 6 units 7,,00Transits, 8 units 14,000Engineers level, 8 units 12,000Philadelphia Rods, 28 units 4,000Steel tapes, 14 units 2,500Electronic calculators, 8 units 8,000Mirror Stereoscope, 10 units 6,000'Pocket Stereoscope, 10 units 1,500Stereoplotter, 1 unit 110,000

Sub-Total: 250,000

B. HYDROMITRY

Automatic Stage Recorder, 24 units 13,50oAutomatic Rain Gage, 18 units 10Current Meter, 4 units 9,000Aluminum or Fiberglass boat, 2 units 5,000Outboard motors, 2 units 6,500Calculators, electronlc, 4 units 4,000Engineers level, 3 units 44,500Rods, 3 units 5°°Sediment sa¶plers, 8 units assorted

weights including accessories 1,500

Sub-Total: 59,000

C. GROUW!D:ATER VXPL0RATION

Terrameter, direct current earth resistivitymeter, complete with accessories andspare parts, 3 units 451,000

Water level indicators, portable ph meters,conductivity meters, water samplers andother instriuments, lump suin 5,000

Sub-Total: 50,000

ANNEX 9Table 3Page 2

Estimated CostD. IAND CLASSIFICATION AND SOILS L.ABORATORY

Laboratory equipment to complement existing laboratoryfacilities consisting of various types and quantitiesincluding c6m-bination digestion and distillationapparatus; electric furnace; centrLf.oge;,burners; shakers; ph meter; ccnductivitybridge; conductivity cells, demineralizer;flame photometer; spectro-photometer;balances; sieves; sieve shaker hot plates;trunnion carrier; semi-permanent scientificglasswvare; and other apparatus and chemicals;lump sum 1 5, C00

Field land-classification and.materials-testinginstruments and tools including sieves; handaugers: and field scales; lump sum __5,_0_o

Sub-Total: 20,030E. GEOLOGIC E,T2LOIRATIOH

Drilling rigs, complete with accessories andspare parts, diamond bits, core barrelscasings, etc.; 2 units 1 50,coo2 units

F. VEHICIES

Surveying and lHapping:. - Jeeps, 4 x 4 43,2002 - Pick-ups; one-ton 12,000

liydrometry:4 - Jeeps, 4 x 4 21,6002 - Pick- ups; one-ton 12,C03

Groundw-ater Investigation:3 - Jeeps, a x 4 16,2C33 - Pick-upS, one ton 1i,2Oo

Geologic Exploration:2 - Jeeps, 4 x 4 10,8302 - Pick-ups,one ton 12,OO

Land Classification:o - Jeeps, 4 x 4 43,2002 - Pick-up5, one ton 1 2,000

Project Staff includn-g agro-economic surveyteams, social and environmenual survei crews:1 - Wagon, 4xh4 - Jeeps, It x 4 21,600

ANNEX 9Table 3Page 3

Estimated Cost

Consultant's Staff:1 - Wagon, 4 x 4 5,6o03 - Jeeps, 4 x 4 11,200

Sub-Total: 250,000G. MISUCELXI'MEOUS EOJIPUIMIT

Lump sum provision for unlisted items ofequipment, apparatus and instruments 75,000

Total: 850,0ooo

PHILIPPINE

AURORA - PENARANDA IRRIGATION PROJECT

Estimated Schedule of Expenditures

TotalItem Cost FY 74 V FY 75 FY 76 FY 77 FY 78 FY 79

- -_ (US$ '000)-----------------------------

Aurora Diversion Unit 13,350 - 590 3,030 8,190 1,540 -

Penaranda Service Area 11,025 - 650 2,550 3,765 2,390 1,670

Consulting Services 800 - 170 250 250 95 35

0 & M Equipment 450 - - - 105 235 110

Central Luzon Study 4,375 255 1,380 1,720 880 1-40 _

Sub-Total 30,000 255 2;?90 7,550 2i3,;90 4,4C i,815

Price Contingencies 8,000 - 800 2,000 3,5oo ly _ 500

Sub-Total 38,000 255 3,590 9,550 16,690 5,600 2,315

Interest During Construction 2,000 300 750 950

Total Project Cost 40,000 255 3,590 9,550 16,990 6,350 3,265

1/IT 9RD fiscal years.

HI-O

ANNEX 10Tablet

PHIIUPPIES

AURORA - PENARANDA IR2IGATION PBROJEC

Estimated Schedule of Disbursements V

IBRD Fiscal Year Accuaulated Disbursementsand Semester US$ '000 Eqivalent

Fiscal Year 1975

ist 500

2nd 2,400

Fiscal Year 1976

1st 5,500

2nd 6,700

Fiscal Year 1977

1st 10,500

2nd 14,900

Fiscal Year 1978

lst 15,700

2nd 17,300

Fiscal Year 1979

lst 18,000

2nd 19,000

1/ The IDA Credit of US$ 9.5 million would be disbursed ahead ol" the Loan ofuS$ 9.5 million.

ANNEX 10PHILIPPINES Table 3

AURORA-PENARANDA IRRIGATICN PROJECT

Proposed Allocation of Proceeds of Loan/Credit

Costs ProposedTotal * Foreign Loan/Credit........... ........ (US$ M illo 00000**600. *0*.o OS

Category

I. Civil Works:

Aurora Diversion 10.8 5.0 10.7 *Penaranda Service Are 1/ 8.0 2.6Central Luzon Study d/ 1.2 0.2Price Contingencies 37 7.1 2.9

Sub Total 27.1 10.7

* Of which:(a) US$3.5 million for mobilization and contractors' equipment and (b)US$7.2 million for other civil works. Disbursement for (a) will be 100% offoreign exchange and for (b) 27% of total cost.

II. Equipment 2.3 2.3 2,3

Disbursement will be 100% of foreign exchange

III. Consultants and Training:

Aurora-Penaranda 0.8 0.7Central bIuzn Study 1.6 0.7Training 0.1 0.1

Sub-Total -77 1.5

Disbursement will be 100% of foreign exchange

IV. Interest During Construction 200 2.0 2.0

Disbursement will be 100% of total

V. Unallocated:

Physical Contingencies 5/ 4.2 1.8Price Contingencies 6/ 0.9 0.7

Sub-Total T57i T77 2.5(Admin. and Engineering) (1.0)

Total 10iO 19.0 19.0

1/ Force account equipment, US$1.0 million (Annex 9, Table 1) excluded and transferredto Cat. II.

2/ Excludes cost of consultants (US$1.6 million), training (US$0.1 million) andequipment (US$0.8 million) (Annex 9, Table 3).

3/ Includes US$6.7 million for civil works and US$0.4 million for Central Luzon Study(Annex 8, Table 3).

4/ Includes equipment for force account (US$1.0 million), O&M (US$0.45 million) andCentral Lazon Study (US$0.85 million) (Annex 9, Tables 1,2, and 3).

5/ Includes physical contingencies on civil works (US$3.6 million) and Central LuzonStudy (US$0.6 million) (Annex 8, Table 1).

6/ Includes price cotingencies on euipmetit (US$0.5 million) and consultants(US$0.4 million) (Annex 8, Table .

ANNEX 11Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Organization and Management

1. Since 1964 the overall responsibility for the national irrigationsystems in the Philippines has been vested in the National IrrigationAdministration (NIA). The NIA was set up under Republic Act No. 3601 toinvestigate, study, improve, construct and administer all national irriga-tion systems. It was given the powcr to carry out investigations intoall available water resources in the country in order to utilize them forirrigation and to collect water rates from the beneficiaries of thenational irrigation systems. The NIA is financed by the Governmentthrough the sale of bonds or from appropriations.

2. The governing body of the NIA is the Board of Directors, composedof a Chairman and six members. Its management is vested in an Administra-tor appointed by the Board, with the approval of the President of thePhilippines. The NIA is organized into five departments at headquarters,ten regional offices managing the field services and a number of specialprojects offices. Consultants were employed under the provisions of theBank-assisted (Loan 637-PH) Upper Pampanga River Project (UPRP) to makerecommendations for a program for the improvement of NIA's operations,organizational structure and financial management. Most of the recommenda-tions have already been implemented or are in the course of being put intoeffect.

3. A special project office under the direction of a Project Managerwas established to carry out the UPRP. The organization evolved both forconstruction and for maintenance has worked well. The UPRP now employsnearly 7,000 people of whom over 2,000 are engineers, agriculturists,economists and other professionals. During the construction phase(Chart No. 8211) the Dam and Town Facilities Division of the UPRP wouldbe responsible for the Aurora transbasin component of the project. ThisDivision is currently responsible for construction of the Pantabangan dam.The latter is expected to be nearing completion at the time that work onAurora would begin. A new Division would be created to assume responsi-bility for the construction of the service area in Penaranda; it wouldbe completely similar to the existing three Divisions presently engagedin constructing the UPRP service area.

4. Presidential Decree No. 35 of November 2, 1972 charged the UPRPwith the responsibility for carrying out the proposed Central LuzonIrrigation Development Study. The Project Development Division wouldhandle the study and would assign approximately 30 professionals to thetask (Annex 6).

ANNEX 11Page 2

5. The proposed organization for operation and maintenance (O&M)is shown in Chart No. 8212. The existing Dam and Reservoir Divisionwould assume responsibility for 0 & M of the Canili and Diayo dams andof the diversion works. The 0 & M of the Penaranda service area wouldbe catered for by creation of a fourtli Irrigation District. The smallestphysical sub-division in the system would be a 50 ha irrigation unit.Two such units would be the basic organizational entity and would besupervised by a ditchtender. Five of the latter, or 500 ha, would forma water management section under a Water Management Technologist, whowould be an agricultural engineering graduate. Five sections, or2,500 ha, would make up a water management division under a Supervisor.Three to four divisions, 7,500 to 10,000 ha, would constitute a zone,under a Superintendent. The proposed Penaranda Irrigation District wouldbe divided into three zones. Water Management Technologists for theproject as well as the ditchtenders would be trained in the UPRP's ongoingtraining program.

ANNEX 11Table 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Cost of Operation and Maintenance

Annual Cost?/ha

Salaries and Wages 85.00

Equipment Costs 16.25

Office Expenses 2.50

Supplies and Materials 4.75

Mfaintenance of Irrigation Works 7.50

Maintenance of Roads 9.00

TOTAL 125.00

/1 Based on costs of entire UPRP, includingPenaranda, for a total of 102,000 ha.

ANNEX 12Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Supporting Agricultural Services

Extension

1. A number of Government organizations currently has dealingswith the farmers. The principal agencies are:

(a) The Bureau of Agricultural Extension Services (BAES);

(b) The Bureau of Plant Industry (BPI);

(c) The Department of Agrarian Reform (DAR);

(d) The Agricultural Credit Administration (ACA);

(e) The Department of Local Government and CommunityDevelopment (DLG-CD); and

(f) The National Irrigation Administration (NIA).

In addition there are the non-Government Rural Banks (RB).

2. In the Upper Pampanga River Project (UPRP) the need forcoordinating the various agencies providing services to the farmers wasclearly felt. In September 1972, the respective heads of the NIA, theACA, the DAR, the Central Bank of the Philippines, the National Foodand Agricultural Council on behalf of the BAES and BPI and the Federationof Nueva Ecija Rural Bankers signed a memorandum of agreement. Thelatter set forth in detail the responsibilities of the various agencieswithin the UPRP and provided for coordinating machinery. Day-to-daycontrol is exercised by the Agricultural Development CoordinatingCouncil (ADCC) consisting of the Provincial Heads of the participatingagencies. While the arrangement is still quite new, it seems to beworking well. As the proposed Penaranda project would be operated aspart of the UPEP, similar coordinating arrangements would be made. Theexisting ADCC is organized on a provincial basis as the UPRP fallsentirely within Nueva Ecija province while the proposed Penaranda projectis located in three provinces, Nueva Ecija, Bulacan and Pampanga. How-ever, the three provinces are within the same administrative region andit should be possible to expand the existing ADCC to give it a regionalbasis and to provide coverage for both UPRP and the Penaranda service

ANNEX 12Page 2

area. The main requirements are that the members of the ADCC have theauthority to speak on behalf of their agencies and be close enough tothe operational level to understand the problems.

3. The BAES is mainly responsible for agricultural extension, withtechnical back-up being provided by the BPI. The present extension staffin the project area totals 25 and consists of 2 Extension Supervisors,1 Rice Specialist, 17 Farm Management Technicians (FMT), 2 Home ManagementTechnicians and 3 Rural Youth Officers. This works out at a ratio ofone extension worker to 400 farmers. A more realistic picture is obtainedif only the FMTs are considered, the ratio then becomes 1:600. In UPRPit is proposed to bring the ratio to 1:200. Under the proposed projectthe extension cadre by 1980 would total 98, consisting of:

Extension Supervisors 5Rice Specialist 1Farm Management Technicians 50Home Management Technicians 30Rural Youth Officers 12

4. The project would be organized on the basis of irrigationunits of 50 ha in the same manner as the UPRP. The 20 odd farmers insuch a unit would be given every incentive to work together as a group.The NIA would schedule irrigation on a rotational basis thus promotinga uniformity of operations within each unit at any given time. Therotational area would also be the basic unit for the provision of creditand the building block for the eventual organization of irrigationassociations and cooperatives. In UPRP the NIA is assigning a WaterManagement Technologist, who is an agricultural graduate, to every10 units. The same staffing pattern would be applied to the Penarandaservice area (see Annex 11).

5. New extension work items to be emphasized would include improvedirrigation and drainage practices; the use of good quality seed and evenplanting; proper fertilizer application; weed and pest control; and theuse of tillage and threshing machinery. The restructured ADCC would beresponsible for drawing up within one year of loan signature a comprehensivefive-year program for the agricultural supporting services for both theproposed project and the UPRP.

Research

6. The Maligaya Rice Research and Training Center is situatedsome 60 km northwest of the project area and is within the UPRP boundaries.The Center is operated by the BPI and is engaged in selection and breeding,fertilizer application, weed control, crop protection, water managementand storage and processing investigations on rice. It also works onpossible rotation crops to rice, as well as being responsible for seedproduction, certification and testing for rice and other crops. TheCenter has training facilities and is being used by UPRP for training of

ANNEX 12Page 3

staff. The Central Luzon State University, located some 65 km northwest

of the project area, already works with UPRP on water management investi-

gations. The UPRP also has good working relations with the InternationalRice Research Institute and the Agricultural College of the University

of the Philippines. The project would be able through UPRP to draw onresearch back-up from all these sources.

Fertilizers

7. Present fertilizer consumption in the project area reaches an

annual total of just under 4,000 tons. Urea accounts for a little lessthan half of the total. Application rates for all fertilizers in thewet season run at a level of about 90 kg/ha. In the irrigated dry seasoncrop the rate of application averages 140 kg/ha of which just under50 kg/ha are nitrogen. At full development the project area would require

some 12,000 tons of fertilizer, of which one-third would be urea and thebalance Ammophos. The average rate of application per crop season wouldbe of 60 kg/ha nitrogen and 30 kg/ha phosphate. Fertilizers are presently

supplied in the project area by private dealers. These supply channelsare adequate to handle the estimated increase in demand.

Seed

8. Some 2,000 tons of rice seed per annum are presently used in the

project area. Seeding rates tend to be unnecessarily heavy as an insuranceagainst the risk of seedling losses. Seed is obtained by retention fromthe farmers' commercial production and from seed-growing cooperatives.The Maligaya Center produces foundation and registered seed for bulking

by selected seed-producing cooperatives. At full development the project

would use approximately 2,500 tons of rice seed per annum. The modestincrease over present consumption, despite the substantial increase in

area cropped, would be achieved by a reduction in the seed rate to 50 kg/ha.

On the assumption that rice seed would be renewed every five years, theestimated annual requirement of quality seed for the project area at full

development would amount to 500 tons. No difficulties are envisaged in

supplying this amount.

Farmers' Organizations

9. As part of the Land Reform program the Government through theDLG-CD is promoting the formation of pre-cooperative farmers' organizations,based on the barrio or hamlet. The organizations would serve as a channelfor the inflow of technical services, credit and inputs and as an assemblypoint for produce intended foa market. It is hoped that at a future datethe organizations would grow into full fledged, formally constitutedcooperatives. This approach to cooperative organization fits in wellwith the 50 ha irrigation unit approach adopted by NIA in the existing

UPRP. The organizations are very new and still unproven but they appear

to hold out considerable promise and would be extended from the UPRP toinclude the project area.

ANNEX 12Page 4

10. The NIA is committed to the creation of irrigation associationsamongst the farmers which would eventually assume a large part of theresponsibillty for the operation and maintenance of the national irrigationsystems. W.thout losing sight of the ultimate objective, the main thrustof NIA's efforts in UPRP has been to organize the farmers within the 50 haunits primarily for production and water management. The immediate aimis to demonstrate to the farmers that working together and using waterefficiently is possible and profitable. Once this has been establisheda realistic framework for setting up irrigation associations would exist.The project area would be expected to follow on the example and gainfrom the experience of the UPRP.

Credit

11. Some 10-20% of the farmers in the project area finance theirrequirement of farm inputs and hired labor from their own resources.The remainder use some form of credit. The principal sources are:

(a) banks, notably the Rural Banks (RB), the PhilippineNational Bank (PNB), the Development Bank of thePhilippines (DBP) and private banks;

(b) the Agricultural Credit Administration (ACA);

(c) input dealers, marketing organizations and millers; and

(d) money lenders.

Seven of the eight municipalities in the project area are served by branchesof the RBs. The PNB has one branch in the project area, and 10 branchesin the three provinces in which the project is located.

12. To ensure the success of the accelerated Land Reform program setin motion by Presidential Decree No. 27 of October 1972, the Governmenthas proceeded to strengthen the credit institutions and to facilitatethe granting of production credit to small farmers who previously dependedon the landlords for their requirements. RBs have been authorized re-discounting privileges of 100%, Government guarantees of up to 85% ofthe loans made and low-cost money from the Central Bank. The easiercredit thus made available is employed under a system of "supervisedcredit', which includes the provision of technical services to the bor-rower to ensure that recommended practices, including variety, fertilizerand agrochemical inputs, are adopted. All loans granted under supervisedcredit are not secured by collateral, but are covered by a Governmentguarantee; the interest is at 12% per annum and the loan is for a periodof 5 to 6 months.

13. The total agricultural loans made by the RBs in the projectarea rose from t 4.5 million (US$0.7 million) in 1970 to t 8.6 million(US$1.3 million) in 1972. The increase in lending by the PNB was even

ANNEX 12Page 5

more marked. In 1972 the PNB granted loans totalling * 56 million (US$8.3million) to farmers cultivating about 160,000 ha of rice in the threeprovinces of the project area. By August of 1973 the PNB had alreadyissued loans to a total of 1 85 million (US$12.6 million).

14. At present production credit is given at the rate of t 700/ha,made up of t 380 for inputs and p320 for services. The latter include anelement of subsistence. In view of the steep rise in cash inputs esti-mated to take place at full development some increase in the rate ofproduction credit would have to be considered. If the element of sub-sistence could be reduced as a result of improvement of the farmers'income at full project development, a rate of about t 950/ha would seemto be reasonable. It would cover 90% of total cash inputs, excludingwater rates and paid labor.

15. Assuming that at full development about 10% of the farmers inthe project area would finance their requirements of inputs and hiredlabor from their own resources, some 9,000 farmers would need creditfrom institutional sources. Should a loan level of r 950/ha be used,the total annual credit requirement at full development would amountto f 40.2 million (US$6.0 million) or 90, of all cash inputs. Theexisting credit institutions are expected to be able to meet therequirement.

ANNEX 13Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Present and Projected Cropping Patterns and Production

Present Cropping Pattern

1. At present some 16,700 ha included in the existing Penarandariver Irrigation System (PENRIS) are cultivated to rice in the wet season.During the dry season, flows in the Penaranda river are only sufficientto permit rice cultivation on 10,000 ha, giving an overall croppingintensity in the PENRIS of about 165%. In the rainfed area south of thePENRIS, that would be developed under the project, only a wet season ricecrop is grown on 8,600 ha. The present overall cropping intensity inthe project area is about 143%. Rice is the only crop of any significancein the area. Paddy production is estimated at 81,500 tons per annum.The present cropping pattern and production estimates and projectedfuture conditions without the project are given in Table 1.

2. Wet season rice is grown between May and December. Transplant-ing is spread over a 10-week period between the middle of June and theend of August and harvesting takes place over an eight-week periodbetween the beginning of November and the end of December. The dryseason crop is grown between December and May, both planting and harvest-ing are spread over eight-week periods in December-February and April-Mayrespectively. All rice is transplanted from field nurseries on topreviously puddled land. The extended period of transplanting is mainlydue to the difficulties experienced in obtaining adequate and timelyirrigation and consequent heavy reliance on rainfall.

3. Most of the farmers in the PENRIS grow short-strawed highyielding varieties, while in the rainfed areas only about one-third ofthe farmers use the high yielding varieties, the majority relies on thelower yielding, but hardier traditional varieties. The average paddyyield in the rainfed areas is about 2 ton/ha, on the irrigated areas theaverage wet and dry season yields are 2.3 and 2.4 ton/ha respectively.The low yield levels are partly due to unsatisfactory water managementand partly to poor farming practices. The latter are exemplified byrandom transplanting, high weed infestations, and insufficient use offertilizers and agrochemicals.

Future Cropping Pattern

4. In the absence of the project the rate of increase in yield inthe rainfed areas is estimated at 1.5% per annum and would most probablybe due to a slow enlargement of the area under high yielding varieties.

ANNEX 13Page 2

In the existing PENRIS area the yields in both the wet and dry seasoncrops are estimated to increase by some 3.5% per annum as a result ofbetter cultivation, more weeding and improved plant protection. Theuse of inputs would be expected to increase with the availability ofgreater supplies of credit, and more extension effort as part of theGovernment's campaign for national self-sufficiency in rice. There wouldbe no change in the existing cropping intensity due to shortage ofwater in the dry season.

5. The expected changes in the cropping pattern and in cropproduction under the project are shown in Table 2. The project wouldprovide wet season irrigation to the 8,600 ha of rice presently dependenton rainfall and would also supply sufficient additional water from theAurora basin to allow for an irrigated rice crop on the entire 25,300 hain the dry season. Cropping intensity in the project area would beraised from the existing level of about 143% to about 200%. The proposedcropping pattern based solely on rice is consistent with the heavy,flat soils of the project area.

Future Yields

6. With good water control, adequate supplies of credit andinputs and a strengthened extension service, future paddy yields areexpected to be 3.8 ton/ha and 4.2 ton/ha for the wet and dry seasoncrops respectively (Table 2). In the PENRIS area these yieldswould be achieved five years after the introduction of water control,while in the existing rainfed areas it is estimated that the projectedyields would be reached six years after the provision of water, orten years after the inception of construction.

7. The improved yields would be obtained from the introduction ofhigh yielding varieties throughout the project area, better land prepara-tion through greater use of machinery, certified seed, row planting,heavier fertilizer input and greater expenditure on crop protection andweed control. The improved road network envisaged under the projectwould allow better access to the farms, thus facilitating the inflowof inputs and outflow of produce. The projected yields are alreadybeing exceeded by enterprising farmers in nearby areas who are usinggood farming practices, adequate input levels and assured water suppliesby pumping.

Development Constraints

8. The project would bring about a change in the croppingcalendars, a moderate increase in labor requirement, a greater degreeof mechanization in land preparation and threshing, and a demandfor additional drying and storage facilities. The more importantissues are examined briefly.

ANNEX 13Page 3

9. Cropping Calendars. To ensure efficient utilization of re-sources and the avoidance of technical and organizational bottlenecks,cropping calendars must be prepared as a basis for extension and watermanagement activities. The experience of local farmers growing dryseason crops and the results obtained at the research station atMaligaya provide a useful basis on which to construct such a calendar.The attached Chart No. 8214 shows a provisional calendar. The principaldifferences between the proposed and existing practices are to be foundin the shortening and bringing forward of the transplanting period ofthe wet season crop, which is reflected in an earlier harvest. In thedry season crop the period of transplanting would be substantiallyreduced from the current eight weeks in December-February to six weeksin November-December. This would bring the harvest forward by overfive weeks and allow the crop to be reaped between the middle ofFebruary and the middle of April, at the height of- the dry season.This calendar would tend to even out the demand for labor, wouldensure that harvesting coincides with dry weather and would allow aperiod of sixty days in March-April during which the irrigation systemwould be shut off for maintenance.

10. Labor Availability. The supply and demand for labor with andwithout the project are examined in detail in Annex 16.

11. Mechanization. At present a surprisingly high proportion ofthe farmers use for land preparation a combination of animal drawn andmechanical equipment. The latter takes the form of small power tillers.This is particularly true for land preparation for the dry season crop.With the improvement of water management and the increased cropping intensityunder the project it is estimated that the use of machines would spread tothe point that some 65% of land preparation in the wet season crop wouldbe mechanical and 85% in the dry season crop. It is anticipated that themachinery would be operated mainly by contractors, as is the case atpresent.

12. Harvesting. The rice is harvested by sickle and the bundles maybe left for a few days in the field to dry, depending on weather. Thresh-ing is either carried out manually by beating the panicles on a slattedtable or by mechanical threshers. The latter are large machines and needfirm conditions underfoot. At present approximately half the crop isthreshed manually and half mechanically. There is a tendency for greateruse of machinery in the dry season crop. Under project conditions thegreatly improved field access and the need to speed up operations wouldlead to a greater demand for mechanical threshing. This should not poseany difficulty as the existing enterprising contractors can be expectedto meet the requirement.

13. Drying and Storage. At the present time the bulk of the threshedpaddy is sun-dried on whatever suitable surfaces are available. A few ofthe rice mills own small artificial driers, but they are seldom used

ANNEX 13Page 4

because of the high operating cost relative to sun-drying. All millshave sun-drying capacity. The arrangements appear to be adequate forthe present paddy crop of 81,000 tons. At full development the annualpaddy production from the project would total 202,000 tons. Productionof the wet season crop would increase by 70%, while the increase in thedry season crop would be over 300%. The harvest of the latter shouldpresent no problems as it would take place mainly in February-March,two of the driest months in the year. Some expansion of drying facilities,both solar and mechanical, would be required to deal with the increasedoutput for the wet season crop harvest in the wetter September-Novemberperiod. No difficulties are anticipated in providing the additionalfacilities as the milling industry is enterprising and is aware of the needfor drying. Storage capacity within the project area is more than adequatefor present production, but would need to be expanded to meet-the increasedcrop yields. In addition to on-farm storage, there are public and privatesector storage facilities. The latter are expected to increase storagespace to meet rising paddy production from the project area.

Processing

14. Paddy from the project area is milled in 123 privately owned ricemills and hullers in and around the project area. On the basis of a12-hour milling day the mills have annual capacities of 500-600 tons. Theexisting milling capacity is adequate to handle the present paddy produc-tion of 80,000 tons. An increase in milling capacity would be requiredstarting in 1978 to deal with what would grow to an additional annualpaddy production of about 120,000 tons by 1983. No difficulty is foreseenin expanding processing capacity to handle additional production fromthe project, as the private sector is enterprising and has access tosources of capital.

Marketing

15. The farmer has a choice of selling the paddy surplus to hisrequirements to a middleman, storing it in a private or Government ownedwarehouse in the hope of obtaining a better price, having it milled andselling the rice to a trader or selling the paddy to the National GrainsAuthority at the Government support price. He may use all of the abovemetlhods of disposing of his crop. While Government is involved in themarketing sector, there is no authority with specific responsibilityfor marketing. The part played by Government agencies and farmersmarketing cooperatives is remarkably small. With the emphasis presentlybeing placed on development of the cooperatives, as an essential supportto the land reform program, it is likely that at the time of full projectdevelopment farmers' cooperatives would play a much larger role inmarketing of the paddy.

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

1/Production from the Project Area at Present

Gross Value Net Value Net ReturnsPaddy Farm Gate of Productl7n of from

Area Yield Price Production Costs- Production31 Project Area(ha) (ton/ha) (P/ton) -- P/ha----------------- (P Million)

Wet Season

Irrigated Rice 16,700 2.3 800 1,840 530 1,310 21.9(3.1) (2,480) (735) (1,745) (29.1)

Rainfed Rice 8,600 2.0 800 1,600 485 1,1v1 5 9.6(2.3) (1,840) (615) (1,225) (10.5)

Dry Season

Irrigated Rice 10,800 2.4 800 1,920 535 1,3R9 14.9(3.3) (2,640) (785) (1,855) (20.0)

Total: 36,100 46.4(59.6)

4/Cropping Intensity = 143%

1/ Projected future conditions without the project, wherever different from the present, are shown in parentheses.2/ Based on Annex 14 Table I . Excludes the cost of labor.3/ Without accounting for labor.4/ Based on a net irrigable area of 25,300 ha.

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Production from the Project Area at Full Development

Gross Value Net Value Net ReturnsPaddy Farm Gate of Production of from

Area Yield Price Production Costsl/ ProductionY/ Project Area(ha) (ton/ha) (P/ton) P/ha----- --------- (P Million)

Wet Season

Irrigated Rice 25,300 3.8 800 3,040 940 2,100 53.1

Dry Season

Irrigated Rice 25,300 4.2 800 3,360 1,000 2,360 59.7

Total: 50,600 112.8

3/Cropping Intensity 200%

1/ Based on Annex 15 Table 1. Excludes the cost of labor.2/ Without accounting for labor.3/ Based on a net irrigable area of 25,300 ha.

IpC

ANNEX 1 3Table 3

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Summary of Cropping Pattern and Production

PaddyCropped Area Production

Present Future Present Future(ha)----- --- ('000 tons)---

Wet Season

Irrigated Rice 16,700 25,300 38.4 96.1

Rainfed Rice 8,600 - 17.2 -

Sub-Total 25,300 25,300 55.6 96.1

Dry Season

Irrigated Rice 10O800 25,300 25.9 106.3

Sub-Total 10,800 25,300 25.9 106.3

Total 3610 50,600 81.5 202.4

Cropping Intensity 143% 200%

ANNEX 14Page 1

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Market Prospects and Prices

Market Prospects

1. At present, the main emphasis of Government policy is on theattainment of self-sufficiency in basic foods especially rice and corn.The deficit in rice, the main staple food crop, has been a persistentproblem for the Philippines. Offic-.al figures show that for 1963-67the Philippines imported an average of about 300,000 tons of riceannually. Although imports of rice stopped from 1968/69 to 1970/71,there were declines in stocks of rice in these years. Rice importsresumed and rose to 635,000 tons in 1971/72 and were again high in1972/73.

2. According to the Agricultural Sector Survey, even if thereshould be a rapid recovery from the recent floods, the Philippineswould not find it easy to regain the momentum in rice output achievedin the latter 1960's. In this period, production rose some 5.5% a year,reflecting yield increases averaging, about 6% along with some declinein area planted to upland rice.

3. Official figures for 1972 give rice output for the Philippinesat about 3.1 million tons. However, an estimated 10% of the crop isnot milled, consisting of allowance.; for seed and wastage (includingrice which is fed to livestock). W:Lt1- population at about 39.0 millionand rice imports of 635,000 tons the per capita absorption of milledrice in the Philippines was about 100 kg in 1972. Based on presentpopulation forecasts of 50 million in 1980 and assuming that annualper capita absorption of milled rice would remain at 100 kg, totaldemand for rice in the Philippines in 1980 would be around 5.0 milliontons (equivalent to 7.6 million tons of paddy). To meet the higherdemand paddy production would have to increase by about 5.2% per yearbetween 1972 and 1980. While the Government's current Masagana campaignto increase rice production has met with considerable success, theprospects of a shortage of fertilizers on the world market raises someuncertainties about the ability to maintain the present rate of progress.In any case no difficulties in marketing the additional production fromthe project area are foreseen.

Prices

4. Since 1957 the Government has established annually a farm gatepaddy support price to encourage production through a guaranteed minimum

ANNEX 14Page 2

price to farmers and to allow some purchases of paddy by Government tobuild stabilization stocks. Responsibility for operating the systemrested with an independent body, the Rice and Corn Administration (RCA),which operated unsatisfactorily. Effective September 28, 1972, theresponsibility for price stabilization of rice and corn was transferredto a National Grains Authority (NGA) under the Secretary of Agriculture.

5. During the 1950's and early 1960's the support price remainedvirtually unchanged and was 1 9.5 per cavan (Y 216/ton) in 1961. There-after, it was gradually increased and by 1971 it reached ? 20.0 percavan (1 454/ton). Although no precise figures are available for acomparison of the annual average paddy farm and support prices before1965 in the Philippines, the Sector Survey shows the farm price about11% higher in 1965, but for 1966-70 it shows the support price exceedingthe farm price by about 11%. For 1971 official paddy prices areavailable only for Central Luzon, which accounts for about 20% of thearea and about 30% of the paddy grown annually in the Philippines. Forthis region the farm price was higher than the support price.

6. The behavior of market prices in relation to the supportprices in the period considered appears to be in harmony with therecord of domestic paddy output during the past decade in thePhilippines. In the early 1960s domestic production was unable tosatisfy the growing demand for rice and this tended to raise marketprices above the support price the Government was able to offer. Afterthe mid-sixties, increased production as a result of the spread ofhigh-yielding varieties improved the balance between domestic productionand consumption and tended to depress market prices. During the lasttwo to three years the trend appears to have reversed itself as a resultof the slowing down of production and the support price became in-creasingly less operative. As a result of larger price increases oflocal and imported goods, including farm production inputs, in 1972and 1973 and to encourage farmers to increase paddy production, theGovernment has again raised sharply its official price for paddy whichin the second half of 1973 was established at t 35.0 per cavan (? 800/ton).

7. Although there are apparent increases in the paddy support andfarm prices in terms of current Pesos, these prices have remained constantin real terms between 1965 and 1972. This can clearly be seen from thefact that the support price index, 1965 = 100, rose to 172 in 1972 whilein the same period the national consumer index for the Philippines andthe Manila wholesale price index for domestic products, also with1965 = 100, were 173 and 177 respectively. Equally important is thefact that the support price for rice has kept pace with changes in theworld market price for rice. Since the devaluation of the Peso in 1971,the support price was raised by about 75% to take account of the newexchange rate and maintain price equality between imported and domesticrice. In view of the existing strong domestic and world market demandfor rice and the likelihood of little change in the future, together

ANNEX 14Page 3

with the increasing costs of fertilizers and insecticides, the Governmentis expected to maintain for the early 1980's its present support priceof V 35.0 per cavan.

8. Two alternative estimates of the future farm gate price forpaddy expressed in 1974 prices have been used in the economic analysis:(a) the Bank's projected price for milled rice in 1980. For the 30%broken quality Thai rice normally imported by the Philippines, thisprice would be $150 per ton of mnilled rice cif Manila. This correspondsto a farmgate price of V 31 per cavan (V 710/ton of paddy); and(b) the present Government farm gate support price for paddy of V 35.0per cavan (V 800/ton). This price corresponds to an import price of$170 per ton of rice cif Manila. This price was also used in the farmincome analysis. The farm gate prices as derived from both the Bank'sprojected price and from the Government support price are shown below:

1980 Price Structure for RiceProjected World GovernmentMarket Price Support Price--------… (Y/ton)…------------

Export Price, fob Bangkok 875 ($130) 1,011 ($150)Ocean Freight 134 ($ 20) 134 ($ 20)Manila port handling charges

and transport to Cabiao 87 87

Wholesale price of rice Cabiao 1,096 1,232

Paddy equivalent price Cabiaoi 723 813Milling costs (equivalent tovalue of by-products) - -

Handling and transport costsfrom farm to mill 13 13

Farm gate price of paddy 710 800

/1 Average price in 1973 currency values for 30% broken Thai rice.

/2 One ton paddy = 0.66 ton rice.

ANNEX 15Page 1

!!ILIPPINES

AURORA-1EN6ANDA IRRIGATION PROJECT

Cr2p gan FarM Budgets

1. The existing and propo6et cropping patterns are given inAnnex 13. This annex shows the following:

(a) Production costs for rirgated and rainfed rice underpresent and future "with" and "without" projectconditions (Table 1). Present costs are based onthe results of a survey carried out by NIA andinterviews in the area during appraisal. In theabsence of the project Little change in the levelof inputs is expected in the rainfed areas. Inthe irrigated areas some lppovement in husbandryis assumed. The input levels for future "withproject" cond4ttioa wr based on recommendations bythe Bureau of SoAl and the Aureau of Plan Industryand the assumption of Increased mechanization of landpreparation and th?shizng.

(b) Monthly labor requirement for the dry and wet seasonrice crops based on present and proposed croppingcalendars (Table 2). It is assumed that underproject conditions the labor requirement for landpreparation and harvesting would be reduced by theuse of machinery whtle there would be an increase inthe labor requirement for crop management, coveringsuch activities as weeding, fertilizer and pesticideapplication and irrigation.

(c) Crop budgets under present and future conditions "with"and "without" the project (Table 3).

(d) Farm budgets for typical family farms of 1.5 ha, 2.5 haand 4.0 ha (Table 4). The budgets are calculated on acash flow basis and only hired labor has been costed.The monthly requirement for hired labor was calculatedby comparing the lab)or requirement with the availabilityper farm of a maximm of 50 man-days/month and a totalof 600 man-days/year of family labor. Future watercharges are based on the proposal by NIA to levy chargesat the rate of 2 cavans of paddy/ha in the wet seasonand 3 cavans in the dry season. This would adequately

ANNEX 15Page 2

cover the cost of operation and maintenance of the;:rrigation project, but contribute little to capitalrecovery.

(e) The effects on farm income of various forms of landtenure (Table 5). Rentals for sharecropping arecalculated over a range of sharing agreements betweentenant and landlord by which the tenant's net incomevaries between 20% and 40% of the gross value ofproduction. The most prevalent pattern is 50-50sharecropping^which results in the tenant receivingabout 40% of the gross value of production. Rentalfor leaseholders is calculated according to theprovisions of Republic Act No. 3844, while the annualpayment for amortizing owners is in accordance withPresidential Decree No. 27 (Annex 2).

PHILIPPINES

AURORA_PENARANDA IRRIGATION PROJECT

Rice Crop Production Costs

Present Future Without Project Ftiture With Project 1,Wet Season Dry Season Wet Season Dry Season W4fet Teason Dry Season

Cash Inputs (P/ha) Rainfed Irrigated Irrigated Rainfed Irrigated Irrigated irrigated irrigated

Cultivation 50 60 80 80 105 110 110 115

Seed 85 85 85 85 65 65 65 65

Fertilizer 75 75 90 160 180 200 285 310Agro-Chemicals 95 100 105 100 140 180 230 240Harvesting 160 185 150 160 210 190 190 200Other 20 25 25 30 35 40 60 7

Total Cash Inputs 485 530 535 615 735 785 940 21 l,000?

Labor Inputs 3/

(man-days/ha)

Land Preparation 29 29 27 22 22 20 19 18Planting 32 32 32 32 32 32 32 32Crop Management 14 19 20 16 21 24 30 32Harvesting 25 25 21 25 20 19 19 18

Total Labor Inputs 100 105 100 95 95 95 100 100

1/ Based on the following assumptions at full development

(a) Cultivation - Wet season - Mechanical 65% @ P 120/haAnimal 35% @ P 90/ha

Dry season - Mechanical 807. @ P 120/haAnimal 20% @ P 90/ha

(b) Seed rate 1.1 Cavan/ha @ P 60/cavaLu.

(c) Fertilizer - Wet season - Urea 72 kg/ha, Ammonium phosphate 150 kg/ha.Dry season - Urea 90 kg/ha, Ammonium phosphate 150 kg/ha.

Urea @ P 1.34/kg; Ammonium phosphate P 1.25/kg.

(d) Agrochemical - Lump sum.

(e) Harvesting - Mechanical threshing @ 6% of yield value.

2/ Includes interest ?i 12% per year on production credit equivalent to 90% of cash inputs.

Excluding labor handling farm machinery, the cost of which is included under cash inputs.

U'

PHILIPPINES

ATJROP.A - PENARANDA IRRIGATION PROJECT

ionthly Labor Requirements for Various Iice Crops (man_-days/ha)1/ 2/

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Wet Season

Irrigated id.ce P - - - - 5 23 23 11 10 8 13 12 105

W - - - 5 24 19 8 11 8 10 10 95

w - - - - 5 19 27 16 20 11 2 - 100

Rainfed Rice P 5 - - - - 10 26 25 7 7 10 10 100

W 5 _ _ _ 12 26 16 8 8 10 10 95

Dry Season

Irrigated Rice P 20 13 12 10 10 6 10 19 100

W 20 14 14 11 10 4 - _ _ - 8 14 95

W 12 19 10 2 - - _ - - 10 25 22 100

1/ P = Present 2/ Excluding labor handling farm machinery.W = Future Without ProjectW = Future With Project

or

~rt

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Rice Crop Budgets

Present Future Without Project Future With ProjectWet Season Dry Season Wet Season Dry Season Wet Season Dry Season

Rainfed Irrigated Irrigated Rainfed Irrigated Irrigated Irrigated Irrigated

Yield (ton/ha) 2.0 2.3 2.4 2.3 3.1 3.3 3.8 4.2

Farm-Gate Price (Plton) 800 80° 800 800 800 800 800 800

Gross Value ofProduction (P/ha) 1,600 1,840 1,920 1,840 2,480 2,640 3,040 3,360

Production Costs,Excluding Labor (P/ha) 485 530 535 615 735 785 940 1,000

Net Value of ProductionExcluding Labor (P/ha) 1,115 1,310 1,385 1,225 1,745 1,855 2,100 2,360

(man-days/ha) 100 105 100 95 95 95 100 100

(man-days/ha)~~~~~~~~~~~~~~~~~~~~~~~~

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Farm Budgets

-- - 1.5 ha farm-- --- 2.5 ha farm-------- -- h-.-- - 4.0 ha farm-------Future Future Future

Present with Present with Present withf E2Lect ~~~Project Project

Rainfted Irrigated IrIgdated Rainfed Irrigated Irrigated Rainfed Irrigated Irrigated

Transplanted Rice (ha) 1.5 2.5 3.0 2.5 4.1 5.0 4.o 6.6 8.0

Total Cropped Area (ha) 1.5 2.5 3.0 2.5 4.1 5.0 4.0 6.6 8.0

Cropping Intensity (%) 100 165 200 100 165 200 100 165 200

Total Paddy Productions (ton) 3.0 5.8 12.0 5.0 9.6 20.0 8.o 15.4 32.0

Gross Value of Production (P) 2,400 4,640 9,600 4,000 7,680 16,000 6,400 12,320 25,600

Production Costs (Exc'-udingLabor) 1/ o x (P) 730 1,330 2,910 1,210 2,180 4,850 1,940 3,510 7,760

Cost of hired Farm Labor (P) - - - 110 140 170 415 710 1,135

Net Value of Production(Before Water Charges) (P) 1,670 3,310 6,690 2,680 5,360 10,980 4,045 8,100 16,705

Water Charges (P) - 70 260 - 120 440 - 190 700

Net Crop Income (P) 1,670 3,240 6,430 2,680 5,240 10,540 4,045 7,910 16,005

Farm Labor Requiremernt (man-days) 150 257 300 250 423 500 400 680 800

1/ Based on Annex 13, Table I & 3

2/ Based on maximum of 50 man-days/month and a total of 600 man-days/year of family labor.

3/ Based on present charges of P25/ha in the wet season and P35/ha in the dry season and proposed future charges ofP70/ha and P105/ha for wet and dry seasons respectively. C

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Farm Budgets: Effects of Tenure System

------------- 1.5 ha Farm --------- ---------------2.5 ha Farm----------- --------------- 4 ha Farm-----------

Future Future FuturePresent with Present with Present with

Project Project ProjectRainfed Irrigated Irrigated Rainfed Irrigated Irrigated Rainfed Irrigated Irrigated

1/Gross Value of Production (P) 2,400 4,640 9,600 4,000 7,680 16,000 6,400 12,320 25,600

1/Net Crop Income (P) 1,670 3,240 6,430 2,680 5,240 10,540 4,045 7,910 16,005

Annual Payment for Land:2/

Sharecropper (P) 1,190-710 2,310-1,380 4,510-2,590 1,880-1,080 3,705-2,170 7,345-4,145 2,765-1,485 5,445-2,980 10,885-5,765

Leaseholder (P) 510 1,000 2,205 845 1,655 3,G75 1,355 2,660 5,880

Amortizing owner (P) 620 710 1,235 1,030 1,185 2,060 1,650 1,895 3,295.

Net Crop Income after Land Payment:2/

Sharecropper (P) 480-960 930-1,860 1,920-3,840 800-1,600 1,535-3,070 3,195-6,395 1,280-2,560 2,465-4,930 5,120-10,240

Leaseholder (P) 1,160 2,240 4,225 1,835 3,585 6,865 2,690 5,250 10,125

Amortizing owner (P) 1,050 2,530 5,195 1,650 4,055 8,480 2,395 6,015 12,710

Freeholder (P) 1,670 3,240 6,430 2,680 5,240 10,540 4,045 7,910 16,005

1/ Based on Annex 15, Table 4

2 Based on a range of sharing agreements between landlord and tenant.

4D>

ANNEX 16Page 1

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Farm Labor Analysis

Labor Supply

1. Based on surveys conducted by NIA, the Department of AgrarianReform and from the population census, it is estimated that at presentabout 10,000 farm families live in the project area. The average familyconsists of 6.0 persons, 3.5 of whom are of working age (15 to 65 years).From this potential labor force, one person is usually assigned todomestic housework and is not available for farm work. Therefore, thepresent available labor supply is estimated to be about 25,000 farmworkers. Assuming 240 working days per worker, the annual labor supplywould be 6.00 million man-days or an average of 0.50 million man-daysper month. Assuming a farm labor growth rate of 2.5% per annum (comparedto an expected population growth rate of 3.0% per annum), the labor forceavailable for farm work would increase to about 32,000 workers at fulldevelopment in 1983. The annual labor supply would thus be 7.68 millionman-days or an average of 0.64 million man-days per month.

Labor Demand

2. The estimated future annual labor requirement per ha for the variousfarm operations under "with" and "without" project conditions are given inAnnex 15, Table 2, while total monthly labor requirements are shown in Table 1of this annex. Under the "without" project conditions, annual laborrequirement per cropped hectare would be 95 man-days for the project area,with peak monthly demand of about 0.55 million man-days occuring in June andJuly. Because of the expected additional use of mechanization mainly inland preparation and threshing, the available farm labor in the area wouldbe sufficient to meet demand even during these peak months.

3. At full development under the "with" project conditions, annutIlabor requirement per cropped hectare would increase to 100 man-days.The annual labor demand for the entire area would thus reach about 5.0million man-days. Because of the anticipated shifts in the cropping calendars(Annex 13), future peak labor requirements of about 0.68 million man-daysper month would occur during July and November. Available labor in theproject area would fall short of meeting the peak monthly requirement byabout 40,000 man-days. This shortfall of some 2,000 laborers per monthwould be easily met from labor available in the adjacent areas.

ANNEX 16Page 2

Existing Wage Rates

4. At present, most of the farm labor requirement in the area isprovided by family labor. Need for hired labor arises only in the peakmonths of June and July. According to surveys by various Governmentagencies and the mission's own interviews in the area, the average wagerate during the peak months is P 4.0 per man-day. During the slack periodwhen available labor supply exceeds demand, opportunities for off--farmwork are limited. However, as no data are available on the market valueof farm labor during the slack period, the lower limit of the economicwage rate has been based on the cost of subsistence estimated at P 1.60per man-day.

Pricing of Labor

5. The proper assessment of a shadow wage rate for farm labor isa complicated issue involving a number of value judgments as well asextensive empirical data on off-farm employment opportunities. In theabsence of reliable data, analysis in this annex disregards:

(a) the value of leisure;

(b) problems of income distribution between the various segmentsof the population; and

(c) the importance of saving in relation to consumption.

Thus, the analysis given here deals only with the opportunity cost ofoutput foregone in non-farm employment.

6. The estimated curve for the shadow wage rate under "with" and"without" project conditions for the project area is shown in Figure 1.The curve incorporates the assumptions made earlier in this annexregarding the supply and demand for farm labor. Also incorporated in thecurve is the assumption that the marginal shadow wage rate of farm laboris positive at all levels of demand and increases as more and more laboris drawn into farm work. The rise in the shadow wage rate is slow initially,reflecting the scarcity of productive alternative employment, but increasesmore rapidly as the full labor supply is utilized. Furthermore, it isassumed that at the employment level corresponding to full employment inthe project area, the shadow wage rate is equal to the market wage rate.Since under "without" project conditions the available labor force in thearea would be sufficient to meet all labor needs, it is assumed that atfull employment the shadow wage rate would be equal to the present marketwage rate of P 4.0. Under the "with" project conditions additional laborwould be required in the two peak months, but could be easily suppliedfrom available farm labor in the neighboring areas although it wouldreceive a slight premium estimated at 10% of the market wage rate under"without" project conditions.

ANNEX 16Page 3

7. On the basis of the above assumptions, the monthly marginal andaverage shadow wage rates, under "with" and "without" project conditionsare shown in Table 2. The marginal shadow wage rate varies from P 1.7per man-day in April and May to P 4.2 per man-day in July anl Novemberunder "with project" conditions and from P 1.7 in April to P 3.4 perman-day in June and July under "without project" conditions. The monthlyaverage shadow wage rate varies from P 1.6 per man-day in April and May toP 2.5 in July and November under "with project" conditions and from P 1.6per man-day in April to P 2.2 per man-day in June and July under "withoutproject t " conditions. T'he average shadow wage rates for the year are P 2.1and P 1.9 per man-day under "with" and "without" project conditions,respectively.

8. By aggregating the monthly wage bills, the annual economic costof labor at full development is P 10.77 million "with the project" and P 6.47million "without the project." The incremental economic cost of labor,amounting to P 4.30 million, accounts for about 10% of the incrementalnet benefit to the project area at full development (without accountingfor labor costs) of P 44.5 million (Annex 17, Table 1). Even if wecost all farm labor at P 4.4 per man-day, the incremental labor costwould amount to P 7.7 million or about 17% of the incremental net benefit.

PHILIPPINES

AUltOIlA-PENIAHANDA 11Uri.TGATION PROJECT

Total Monthly Labor Requirements ('000 man-days)2/

Area(ha) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Wet Season

Irrigated Rice P 16,700 - - - - 83 384 384 184 167 134 217 200 1,753

W 16.700 - - - - 83 401 317 134 184 134 167 167 1,587

W 25,300 - - - - 126 481 683 405 506 278 51 - 2,530

Fainfed Rice p 8,600 43 - - - - 86 224 215 60 60 86 86 860

w1f: 8,600 43 - - - - 103 224 138 69 69 86 86 818

W

Dry Season

Irrigated Rice P 10,800 216 140 130 108 108 65 - _ _ _ 108 205 1,080

W 10,800 216 151 151 119 108 43 - _ _ _ 86 151 1,025

W 25,300 304 481 253 51 - - - - - 253 632 557 2,531

Total P 36,100 259 140 130 108 191 535 608 399 227 194 411 491 3,693

X 36,100 259 151 151 119 191 547 541 272 253 203 339 404 3,430

w 50,600 304 481 253 51 126 481 683 405 506 531 683 557 5,061 i

1/ P = Present CD

J = Future Without ProjectW = Future With Project

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

Pricing of Farm Labor

Without (W) or Jam2ary February March April -ay June Julywith (W) Project W W W W W W W w W w

Labor Requirement .26 .30 015 .48 .15 .25 .12 oO5 o19 o13 .55 .48 .54 .68(Million man-days)

Marginal shadow wage rate 1.9 2.0 1 .8 3.0 1.8 1.9 1.7 1.7 1.8 1.7 3.4 3.0 3.4 4.2(P/day)

Average shadow wage rate 1.7 1.8 1.7 2.0 1.7 1.7 1.6 1.6 1.7 1.6 2.2 2.0 2.2 2.5(P/day)

Total Imputed Cost .44 .54 .26 .96 .26 .43 .19 .08 .32 .21 1.21 .96 1.19 1.70(P million)

Without (W) or August September October November December Totalwith (W) Project W w w W w W w w W w

Labor Requirement .27 .41 .25 .51 .20 .53 .34 .68 .40 .56 3°43 5.06(Million man-days)

Marginal shadow wage rate 109 2.6 1 . 3.2 1 8 303 291 4,2 2.5 3.5(P/day)

Average shadow wage rate 107 1.9 1.7 2.1 1.7 2.1 1.8 2.5 1.9 2.2 1.9 2.1(P/day)

Total Imputed Cost .46 .78 .43 1.07 .34 1.11 .61 1.70 .76 1o23 6.47 10.77(P million)

1ol

411LIPPINES

AURORA-PENERANDA IRRIGATION PROJECT

Estimated Shadow Wage Curve for Farm Labor

5.0 J.

4.0 4.0

z30....

w

2.02.0

0

10

1.0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0

F-ARMI ABOR DEMtAND (MILLION MAN-DAYS!MONTHI

Wo:a Bai n435

ANNEX 17Page 1

PHILIPPINES

AURORA - PENARANDA IRRIGATION PROJECT

Economic Analysis

1. The following assumptions were made in evaluating the project'srate of return:

(a) Benefits. The expected paddy yields, prices, gross returns,production costs, net returns (without accounting for laborcosts) and labor requirements per ha, are shown in Annexes13 and 15. The farm-gate price of P 710 per ton of paddy usedin the economic analysis was derived from the Bank's worldmarket price projections for milled rice in 1980 and isequivalent to US$150 per ton of rice (Thai 30% broken) cifManila. Table 1 shows the expected project benefits at fullagricultural development.

(b) Investment Costs. All investment costs except pricecontingencies (P 53.8 million), the cost of the IrrigationStudy (P 29.5 million) and interest during construction(P 13.5 million) have been included in the economicanalysis. The incremental cost of the Water ManagementTechnologists is included under the annual 0 & M costs.

(c) Development Period. It has been assumed that water for fulldouble-cropping would become available to the rehabilitatedPENRIS area in mid 1977 as a result of closure of the Canilidiversion dam. Water for double-cropping the newly constructedareas would be available by mid-1978, after completion of thecross drainage/diversion on the San Miguel, Garlang and Bulurivers. It has been assumed that projected yield levels onthe rehabilitated area would be achieved over a period of fiveyears in equal instalments from 1977 inclusive, while in thnewly constructed area projected yields would be attained overa six year period in equal instalments from 1978 inclusive.Full project benefits would be achieved in 1983.

(d) Pricing of Labor. Farm labor was evaluated at a shadow wagerate equal to its opportunity cost, which varies seasonallyand averages P 2.1 per man-day over the year under "with"project conditions at full development. A detailed analysisis presented in Annex 16. The use of unskilled labor inconstruction and development works is limited and all laboremployed in such works was valued at the market wage rate.

ANNEX 17Page 2

2. Using the foregoing assumption and discounting project benefitsand costs over a 50 year project life, the economic rate of return isestimated to be 17% (Table 2). Benefits from the project were alsoevaluated by using the Government support price for paddy of El 800/ton,equivalent to US$170 per ton of rice cif Manila. In this case the rateof return would be 20%.

3. The above analysis does not include investments associated withthe UPRP dam and other facilities which would contribute to the realizationof benefits from the project. UPRP costs have been updated and benefitshave been recalculated on the basis of the yield levels and net values ofproduction used for Penaranda. When the revised costs and benefitsstreams associated with the UPRP are added to those of the Aurora-Penarandaproject, the economic rate of return of the combined project would be14%, which is only fractionally higher than the rate of return for UPRPalone (Table 3).

Analysis of Uncertainty

4. Several of the basic assumptions made in the economic analysishave been varied in order to examine their impact on the rate of return. Thesefactors, which are partially based on cost over-runs and delays experiencedin the development of the UPRP, are as follows:

(a) a three years delay in project benefits as a result of failureto complete construction on time;

(b) a 30% increase in construction costs as a result of higherquantities of work being required to complete the project;

(c) anticipated shortage of nitrogenous fertilizers on the worldmarket leading to a 25% reduction in fertilizer applicationrates and resulting in a decrease in yields to 3.6 ton/haduring the wet season and 3.9 ton/ha during the dry season;

(d) possible shortfall in water flow from the Aurora basingiving rise to a reduction in the dry season cropped area to21,500 ha; and

(e) a combination of a 25% reduction in nitrogenous fertilizertogether with a 25% reduction of Aurora water.

The effects of the various assumptions on the rate of returns are asfollows:

ANNEX 17Page 3

Alternative Rate of Return

(a) Benefits delayed three years 12(b) Construction costs increased 30% 13(c) Use of Nitrogen fertilizer reduced by

25% over the life of the project 14(d) Reduction of Aurora water by 25% 14(e) Combination of (c) and (d) 11

PHILIPPINES

AURORA - PENARA MN IRRIG&TION PROJECT

Economic Analysis - Net Value of Prodaction

Gross Value Net Value Net ReturnsPaddy Farm Gate of Producti p Of from

Area Yield ' Price Production Costs _ Production project Area

ThT (ton/ha) (P/t-nT --------------(P7Sa)--------------- (P Million)

Wet Season

Irrigated Rice W 16,700 3.1 710 2,200 735 1.,465 24.5

W 25,300 3.8 710 2,700 940 1,760 44.5

Rainfed Rice W 8,600 2.3 710 1,635 615 1,020 8.8

W - -

Dry Season

Irrigated Rice W 10,800 3.3 710 2,345 785 1,560 16.8

W 25,300 4.2 710 2,980 1,000 1,980 50.1

Total: W 36,100W _.

~~W________________________________

-- (P Million)--Total Net Value of Production

W - with project - W without project. Before Costing Labor 50.1 94.6

1/ From Annex 13, Tables 1 and 2 Less Imputed Cost of Labor 3/ 6.5 10.87/ From Annex 15, Table 13/ From Annex 16, Table 2 Total Net Value of Production 43.6 83.8

Net Incremental Value of Productionat Fhll Project Development 40.2

a5 F-i 9

ANNEX 17Table2

:PHILPIN&.S

ATRORA - PEUARANDA IIRRIGTICH PROJECT

Economic Costa & Benefits(US$ 10)

Incremental

World Market Government supportPrice Of Rice Pre-or Rice

Yekr Cost v60on)

1 640 -

2 3,230

3 9,500 -

4 8,720 1,530 1,870

5 3,370 1,940 2,360

6 1,310 3,920 4,760

7 470 4,730 5,680

8 470 5,510 6,700

9 470 5,750 6,990

10-50 470 5,970 7,260

Economic Rate of Return 16.7% 19.9%

ANNEX 17Ta Ee 3

HILIPPI:

AURORA-PEIARA IRRICATION PROJECT

Economic Oosts. -& Benefits(US- $ Mi 1 1ion)

UPRP UPRP+APIP/

Year Costs Benefits Costs Benefits

1 10.0 10.0

2 No .9.0

3 11.0 11.0

4 30.0 30*0

5 10.2 0.5 1o.8 o.5

6 1 o.4 2.3 13.6 2.3

7 12.7 5.9 22.2 5.9

8 1.4 12.2 10.1 13.7

9 1.4 17.6 4.8 19.5

10 1.4 18.5 2.7 22.14

11 1.4 19.4 1.9 24.1

12 1.4 19.8 1 .9 25.3

13 1.4 20.7 1 .9 26.5

14 1.4 21.2 1.9 27.2

15 1.4 22.1 1.9 28.1

16-50 1.4 22.5 1.9 28.5

Economic Rate of Return 13.9% 14.2%

1/ Aurora Penaranda Irrigation Project

PHILIPPINES

AURORA-PENARANDA IRRIGATION PROJECT

CONSTRUCTION SCHEDULE

1974 1975 1 1976 1977 1978

AURORA DIVERSION'

Mobilization and move in

Strip Canii! damsite

Grout Canili dam

Canili diversion conduit excavation

Caiayo diversion conduit ecavation

Diano diversion conduit installation

Caiolr diversion conduit PEc NRic itaationGotDiayo dan m3 2

Diayo channel excavation

NOT ES

1. SHADING INDICATES WSET SEASON MONTHS'. 2. NUMBERS ABOV/E THE CANILI AND DIAYo DAM VWORl( iTEMS

ARE ESTIMATED PLACEMENT OF DAM\ MATERIAL, IN THOUSAND

CUBIC METEH S

World Bank-8n152

PHI L7PMINESAURORA - PENARANDA IRRIGATION PROJECT

PROPOSED ORGANIZATION FOR PROJECT CONSTRUCTION

NIA ADMINISTRATOR

UPRPPROJECT AUDITOR PROJECTMANAGER CONSULTANTS

ADMINISTRATIVE ENGINEERING AGRICULTURAL PROJECT DEVELOP. EOUIPMENT

DIVISION DIVISION DEVELOP. DIVISION DIVISION* DIVISION

ASSISTANT ASSISTANTPROJECT MANAGER PROJECT MANAGER

DIVISION 1 ~~~~~~~~~~~~~~FIELD PROCuREMEN DAM 01VIS10N RSROI NOFFICEREETEETDVSO

DIVISION 2

ADMIN. SERVICES ADMIN. SERVICES

OFFICE ENGINEERING| OFFICE ENGINEERING

FIELD ENGINEERING FIELD ENGINEERING

ADMIN.~~~~~~~~~~~~~~~~~~~~~~~~ ....RVICESG

OFFICE ENGINEERING|

FIFLD ENGINEERING .-Roponsible for preparation of Central Luzon Study.FIELD ENGINEERING O **Responsible for Aurora trant-bsin co-nponent of proiect.

***R.sponsible for PFnaranda irrigation conponent of project.

OPE RATWON W |MANTE~NANCE l

World Bank-8211

PHI LIPPINESAURORA PENARANDA IRRIGATION PROJECT

PROPOSED ORGANIZATION FOR OPERATION AND MAINTENANCE

NIA ADMINISTRATOR

UPRPPROJECT MANAGE

EQUIPMENT AGRIC. DEVELOPMENT DAM-RESERVOIR ADMINISTRATIVE

DIVISION DIVISION DIVISION DIVISION

DISTRICT 1 DISTRICT 2 DISTRICT 3 DISTRICT 4

SAN JOSE TALAVERA STA ROSA PENARANDA

ZONESUPERINTENDENT 1

(3)

DIVISIONSUPERVISOR

(10)

WATER 1

Personnel requirements shown in parentheses.MANAGEMENT .-

TECHNOLOGIST Proposed addition to UPRP organizational chart for operation & maintenance.

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World Bank-8212

PHILIPPINESAURORA - PENARANDA IRRIGATION PROJECT

PROPOSED CROPPING CALENDARS

Crop J F M A M J J A S 0 N D

I I~~~~Cl

Wet Season l ~ ii c

l l I~~~~

Wet Season T 9

(25,300 ha) M I

System_______________________________M aintenance 1

I ~~~~~~~~~~~~N

Dry Season 3RiceIT

(25,300 ha) i m

I ~~M=

H

Notation:30C :Cultivation Rainfall mmN :Nursery25T . TransplantingM :ManagementH : Harvest 174

41 52

4 6 2

J F M A M J J A S 0 N D

World Bank-8214

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RESER I I~~~~~~~~~~~~~~~~~~~ORMAL RESERVOIR

CREST EL 305PHLIPINECE.FTER' DIAIO OA~ ~ ~ ~ ~~~AROA- ENRAD IRIATO POJC

-DIVERSIOURORNDIVESIONWORK

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