Report No. 2027a-IND Indonesia Irrigation Program Revie · Report No. 2027a-IND Indonesia Irrigation Program Review October 16, 1978 Projects Department East Asia & Pacific Regional

Report No. 2027a-IND

IndonesiaIrrigation Program Review

October 16, 1978

Projects DepartmentEast Asia & Pacific Regional Office

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENT

US$1.00 - Rupiahs (Rp) 415Rp 100 - US$0.241Rp I million - US$2,409.64

($ refers to US$ throughout report)

WEIGHTS AND MEASURES - METRIC SYSTEM

1 millimeter (mm) - 0.039 inches1 meter (m) - 39.37 inches1 kilometer (km) - 0.62 miles1 square kilometer (sq km) 0.386 square miles1 hectare (ha) 2.47 acres1 cubic meter (cu m) - 35.31 cubic feet1 million cubic meters (MCM) - 811 acre feet1 liter (1) 0.264 gallons (USA)1 liter/second (1/sec) 0.035 cubic feet per second1 kilogram (kg) - 2.2 pounds1 metric ton (ton) 2,205 pounds

CONVERSION FACTORS FOR RICE

1 ton "dry stalk paddy" - 765 kg rough paddy ("paddy gabah"or "dry rice paddy")

1 ton "paddy gabah" - 680 kg milled rice1 ton "dry stalk paddy" - 520 kg milled rice

INDONESIA FISCAL YEARApril 1-March 31

Table H 7.1: SAVINGS, INVESTMENT AND FINANCIAL TRANSACTIONS, 1977(Billion won in current prices)

Total Financial Government Corporate Individual Rest of the WorldUqes Sources Uses Sources Uses Sources Uses Sources Uses Sources Uses Sources

Nonfinancial Account 3,725.3 3,725.3 102.2 102.2 829.7 829.7 973.5 973.5 1,502.9 1,502.9 317.0 317.0

Saving - 3,725.3 - 102.2 - 829.7 - 973.5 - 1,502.9 - 317.0

Investment 3,725.3 - 74.5 - 940.1 - 1,951.7 - 759.0 - - -

Financial surplus or deficit - - 27.7 - -110.4 - -978.2 - 743.9 - 317.0 -

Financial Account 6.257.4 6,257.4 2,454.3 2,454.3 514.2 514.2 1,168.2 1,168.2 1,448.2 1,448.2 672.5 672.5

Financial surplus or deficit - - - 27.7 - -110.4 - -978.2 - 743.9 - 317.0

Money 384.1 384.1 5.2 384.1 12.7 - 161.4 - 204.8 - - -

Time and savings deposits 763.1 763.1 4.1 763.1 12.7 - 254.0 - 492.3 - -

Insurance and trust 137.7 137.7 5.1 137.7 5.4 - 13.6 - 113.6 - - -

Other deposits 216.0 216.0 - 216.0 - - 61.6 - 154.4 - - -

Securities 945.1 945.1 169.6 186.3 88.7 255.9 217.5 502.9 469.3 - - -

(NIF) (200.0) (200.0) (125.0) - (29.8) (200.0) (31.2) - (14.0) - - -

bOK loans 150.0 150.0 150.0 - - 150.0 - - - - -

Bank loans 886.9 886.9 886.9 8.9 _ 8.8 - 585.4 - 283.8 - -

Loans of insurance and trust 102.6 102.6 102.6 - - - - 59.4 - 43.2 -

Other loans 603.2 603.2 603.2 - - - - 461.1 - 142.1 -

(NIF) (170.0) (170.0) (170.0) - - - - (170.0) - - - -

Government loans 268.5 268.5 - 268.5 268.5

(NIF) (200.0) (200.0) - (200.0) (200.0) -- -

Equities other than stocks 143.7 143.7 38.9 94.7 97.8 - 4.5 49.0 2.5 -

Trade credit 287.0 287.0 - - 15.8 14.3 271.2 143.5 - 129.2 -

Gold and foreign exchangeholdings 355.5 355.5 355.5 - - - - - - - 355.5

Foreign debt 672.5 672.5 - 48.1 - 232.7 - 391.7 - - 672.5 -

1{iscellaneous and ad3ustment 341.5 341.5 133.2 319.2 12.6 -37.1 184.4 -46.6 11.3 106.0 -

Source: EPB, Fourth Five-Year Plan documents.

C)to

Page No.

4. ORGANIZATION AND MANAGEMENT OF DGWRD . . . . . . . . . . . . . . . 33

Structure of the DGWRD . . . . . . 33Suggested Reorganization of DGWRD .. . ... . 36

- Revised Structure ... . . . . . . . . . ..... . . . . 36- Planning, Programming and Design . . . . . . . . . . . . . . 37- Project Implementation . . . . . . . . . . . . . . . . . . . 37- Technical Services .... . . . . . . . . . . . . . . . . . 38

Training .... . . . . . . . . . . . ....... . . . . . . 38Project Monitoring . . . . . . . . . . . . . . . . . . . . . . . 40

5. SUMMARY OF RECOMMENDATIONS.. .. 41

Future Irrigation Development . . . . . . . . .. 41Training and Staff Development. . . . . . . . . . . . . . . . . . 41Organization of the DGWRD. . . . . . . . . . . . . . 43

LIST OF TABLES IN MAIN REPORT

2.1 Harvested Area, Production and Average Yield of Paddy Rice in Javaand the Other Islands, 1968-76 ... . . ... 4

2.2 Summary of Estimated Paddy Areas . . . . . . . . . . . . . . . . 52.3 Summary of Service Areas of Existing Irrigation Systems . . . . . 62.4 Summary of Physical Progress and Funding of Irrigation Develop-

ment Under Repelita I and II ... ... . . . . . . . . . . . 102.5 Estimates of Future Paddy Production with and without Bank

Group-Assisted Projects . . . . . . . . . . . . . . . . . . . . 153.1 Summary of Areas Identified for Possible Future Irrigation

Development . . . . . . . . . . . . . . . . . . . . . . . . . . 183.2 Imputed Costs of Development for Three Models of Irrigation

Development .... . . . . . . ...... . . . . . . . . . . 223.3 Estimated Incremental Paddy Rice Production from Potential

Irrigation Development . . . . . . . . . . . . . . . . . . . . 263.4 Estimated Costs of Potential Future Irrigation Development . . . 293.5 Estimated Implication of Suggested Future Irrigation

Development Program .. 30

ANNEXES

1 Terms of Reference . . .. 442. The Extent and Quality of Irrigation Development in Indonesia . 463. Summary of External Aid for Irrigation and Water Resource

Development in Indonesia ... . . . . ..... . . . . . . . . 624. Bank Group Lending for Irrigation Development . . . . . . . . . . . 725. Operation and Maintenance of Irrigation Systems . . . . . . . . . . 856. Farm Level Water Distribution and Water Users Associations . . . . 927. Organization and Management of Directorate General of Water

Resources Development ... . . . . . . .... . . . . . . . . . 968. Training Needs of the Directorate General of Water Resources

Development . .... ........ .... . . . . . . . . . . 105

Page No.

9. Potential for Further Irrigation Development or Rehabilitation ofExisting Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

10. Economics of Potential Future Irrigation Development . . . . . . . . . . 13411. Estimated Repelita III Development Expenditure by Central Government . 15712. Preliminary List of Irrigation and Tidal Reclamation Projects for

World Bank Assistance ... . . . . . .. . . .. . . . . . . . . . . 158

LIST OF FIGURES

2.1 Organization of Services for Irrigated Agriculture (8723(2R))2.2 Cumulative Disbursements for First Eleven Bank Group Irrigation

Loans (19450)4.1 Ministry of Public Works (18517)4.2 Directorate General of Water Resources Development (18518)4.3 Secretariat of the Directorate-General of Water Resources

Development (18519)4.4 Directorate of Planning and Programming (18520)4.5 Directorate of Rivers (18521)4.6 Directorate of Swamps (18522)4.7 Directorate of Irrigation (18523)4.8 Directorate of Logistics (18524)4.9 Directorate of Hydraulic Engineering (18525)4.10 PROSIDA (18724)4.11 P4S (18662)4.12 Suggested Structure for Directorate General of Water Resources

Development (18663)4.13 Suggested Structure for a Directorate of Planning, Programming and

Design (18664)4.14 Suggested Structure for a Directorate of Works (18665)4.15 Typical Organization of a traditional "Dharma Tirta" (18755)

MAPS

Administration and Population (12696 R)National Irrigation Systems, Identifying Location of all Major

Systems including Bank- Assisted Projects (13128)

INDONESIA

IRRIGATION PROGRAM REVIEW

SUMMARY AND CONCLUSIONS

Introduction

1. This report represents one component of a program of rural sectorstudies in Indonesia. It reviews the current program of irrigation developmentin Indonesia, examines the prospects for and implications of future irrigationdevelopment opportunities and finally studies the organization and managementof the Directorate General of Water Resources Development (DGWRD) with a viewto assessing the planning, implementation and operational capacity of thatorganization in relation to its current and future activities. It is con-cerned primarily with the relation between rice production and irrigationdevelopment. It does not cover issues such as the relationship betweenirrigation development and employment and income distribution.

2. Starting from the proposition that increasing rice productionshould remain a central policy objective for Indonesia this report concludesthat by the end of Repelita III (1984) the irrigation development programwill need to have been expanded by about 20% if the growth rate of domesticrice production is to keep pace with the expected growth rate in demand(about 4% p.a.). To achieve an expanded and more diversified irrigationdevelopment program will require not only an increased budget, but also alarger and more comprehensive training and staff development program, animprovement in supporting services to irrigated agriculture, infrastructuredevelopment in islands outside Java as well as a substantial reorganizationof the structure of the DGWRD.

3. An earlier Bank survey of Indonesia's irrigation and relatedagricultural programs in 1975 highlighted the concern of the GOI regardingthe continued deficit between the supply of and demand for rice and examinedthe potential for using irrigation development to reduce that deficit. Thesituation has not changed, a persistent deficit is further exacerbated by thedamage caused by pests and diseases in recent years. Latest estimatesindicate that total rice production in 1977 was about 15.9 million tons,virtually the same as the production reported in 1976. This level of outputis far less than domestic requirements. During 1977/78 Indonesia importedsome 2.3 million tons of rice and the latest estimates suggest that riceimports during 1978/79 will be about the same; these levels of imports exceedthose in any of the previous five years. This situation raises crucialquestions for the Indonesian Government:

(a) What are the reasons for the apparent deterioration in thedomestic rice production/demand situation?

(b) To what extent has irrigation development been able tocontribute to increasing rice supplies?

- ii -

(c) What are the prospects for an expanded program of irrigationdevelopment to bolster the growth rate of rice production?

4. This report will address the second and third questions. The firstis outside the terms of reference; however, it will be considered in anotherstudy, "Supply Prospects for Major Food Crops", which is currently beingprepared.

5. Indonesian farmers harvested some 8.4 million ha of rice in 1976,4.5 million ha (54%) on Java and 3.9 million ha (46%) on the Other Islands.(Preliminary figures suggest that areas in 1977 were about the same.) Ofthis total there are about 7.2 million ha of "sawah" (rice fields surroundedby low banks or "bunds") of which 60% are on Java. About 6.1 million ha ofthe harvested sawah areas are irrigated by irrigation systems of varioustypes (averaging a cropping intensity of about 120%), 1.1 million ha arerainfed. All sawah lands account for almost 95% of the total rice production.As this review shows, irrigation development has received considerable empha-sis in the Government's development effort (about 12% of the 1978/79 develop-ment budget); the area harvested from sawah lands has increased at an averageannual rate of about 1.5% since the late 1960s, compared with the increaseof total rice area harvested of about 0.6%. Over the same period the produc-tion of rice produced on sawah land increased at an average annual rate of3.9% compared with about 3.5% for rice production in Indonesia as a whole.

6. Statistics on the areas watered by irrigation systems and theproduction from these areas have not been published yet. However, frompreliminary data made available to the mission it is estimated that in 1968there were some 4.3 million ha served by irrigation systems, compared withabout 5.0 million ha at present. Of the area currently serviced by irriga-tion systems, it is likely that only about 4.0 million ha of that total areof a quality which is adequate for technically efficient irrigated riceproduction.

7. The impact of the Government's investment in irrigation is diffi-cult to quantify. The main problem is that rice production is the result ofthe interaction of a number of factors which jointly influence the finaloutput. Important factors are the production incentives perceived byfarmers, the extent and quality of irrigation, crop management standards, thesupply of inputs and the services such as extension, credit and marketingfacilities available to farmers. The quality of facilities in a number ofirrigation systems has not yet achieved design objectives since in many casesthe construction of tertiary canals has lagged far behind the construction ofprimary and secondary canals. In addition, in some areas operation andmaintenance and support services for farmers have not been adequate and as aconsequence production has suffered.

8. Estimating the impact of irrigation on rice production is furthercomplicated by natural events such as attacks by pests and diseases, abnormalrainfall and various climatic factors. For example, damage to rice crops bythe brown plant hopper is estimated to have reduced rice output during 1977by about one million tons below what it might have been and was probablythe major reason for the stagnation of rice production between 1976 and

1977. However, it is accepted that irrigation development has been animportant and usually essential ingredient of increased rice production.Analysis of the results of Bank Group-assisted projects has confirmed this.

9. The Bank has been heavily involved with irrigation development inIndonesia since its first loan for rehabilitation of a number of systems in1969. To date, the Bank has made 11 credits and loans totalling some$447.5 million for irrigation, which are planned to benefit about 1.2 millionha of irrigated land, mainly through the rehabilitation of existing systemson Java which had become run down because of inadequate maintenance. Theloans also cover the construction costs for extension of some irrigatedareas, studies and training, etc. It is estimated that, when all the ongoingBank Group-assisted projects have matured and reached full development around1990, the incremental production resulting from these projects will be in thevicinity of two million tons of rice per year.

Future Irrigation Development

10. With the rehabilitation of most existing irrigation systems eithercompleted or under way, future irrigation development in Indonesia will beheavily oriented to the construction of new gravity systems and swamp andtidal land development outside Java. In addition, it is expected that somelarge storages will be built on Java to expand dry-season irrigation. Onpresent indications the development on Java is likely to involve about 500,000 ha.In the longer run groundwater development may assume a more significant rolethroughout Indonesia. In summary the DGWRD has reviewed the potential forfuture irrigation development and has identified possible projects whichwould command a total area of about 5.6 million ha made up of 4.0 million haof new gravity development, 1.3 million ha of swamp and tidal land development,some groundwater development, as well as 0.3 million ha of rehabilitation ofexisting gravity systems.

11. The orientation of future irrigation development towards theislands outside Java does not mean a rapid move away from irrigation invest-ment on Java. Many of the existing irrigation systems on Java still need tobe fully rehabilitated, including further upgrading of simple systems atrelatively low cost per hectare, construction of tertiary canals in manyexisting systems and, where possible, augmentation of water supplies throughthe construction of storages. By comparison, projects in the Other Islandswill generally involve higher investment costs than on Java and requirelonger lead times between planning and completion of construction. Thereremain, in economic terms, substantial potential benefits to the economy fromthe intensification of irrigation development on Java and many of thesebenefits can be realized relatively quickly compared with the opportunitiesin the Other Islands.

12. It was not possible in this report to consider the appropriate mixand sequence of irrigation development projects. However, the missiondid undertake an assessment of the economics of three of the major types ofpotential projects. On the basis of the assumptions made in the analysis therates of return likely to be achieved from swamp and tidal land development,new conventional run-of-the-river gravity systems and large-scale dam develop-ment should all be adequate to justify government investment.

- iv -

13. An important question facing the GOI now is the rate at which itsfuture irrigation development program can be pursued; it comes at a time whenplans are being formulated for the Third Five-Year Plan. The conclusion ofthis review is that if the GOI wishes to achieve a rate of growth of riceproduction in the future which matches the expected rate of growth of ricedemand (about 4% p.a.), then the annual investment in irrigation develop-ment should be increased from its current (1978/79) level of about $520 mil-lion p.a. to about $635 million p.a. (1978 prices), by the end of RepelitaIII (1984), an increase of about 20%. Such an increase should be phased ingradually.

14. Two important matters arise from an enlarged program. The first iswhether the future irrigation development will be supported by a comparableexpansion of services to irrigation farmers. In particular, extension, inputsupplies and credit facilities should be available, as well as adequateinfrastructure. While the mission has not made an estimate of the fundswhich would be required for such activities it is likely that the increasewould be comparable to the proportional increase suggested for irrigationdevelopment. This raises the whole question of whether the volume of fundsallocated to agriculture and irrigation (about 19% of all local currencydevelopment expenditure in 1978/79) should be increased at the expense ofother sectors in the economy, or whether the total budget allocation toagriculture and irrigation should remain constant with reallocation withinthis total. This is a matter which is beyond the scope of this report, butwill need to be addressed in the context of the sectoral planning for theeconomy as a whole.

Organization and Management of DGWRD

15. The second matter concerns the DGWRD. It is the mission's conclu-sion that the present staffing and organizational structure of the DGWRD arenot likely to be able to cope with such an expansion of activities, particularlysince it will involve a substantial change in the type of projects and a muchgreater geographical spread of work compared with the present.

16. The DGWRD, which is the institution with the primary responsibilityfor constructing irrigation systems, has a reputation within the Governmentfor efficiency and high standards. Despite the fact that projects have beenand are still somewhat delayed, and forward planning and project preparationare at times deficient, the substantial progress which has been made inirrigation development in Indonesia is to a large extent due to the successof the DGWRD and the energy of its staff. However, there is much evidencethat already some of the senior staff of the DGWRD are overstretched in termsof the demands made on them. The rapid expansion of the work program inrecent years has not only placed increased pressures on senior management,but it has also resulted in an increase in the amount of outside consultantassistance in various forms. While the use of consultants has probably notbeen out of line with the growth of the work program, it does appear that theactivities of consultants are becoming increasingly difficult for the DGWRDto manage and absorb. The mission reached the conclusion that staff shouldbe trained and developed to take control of more of the DGWRD activities,thereby gradually reducing reliance on consultants in the longer term.

-v -

17. In addition, the present organization of the DGWRD is reaching thelimit of its capacity to undertake a greater volume and variety of workspread over a wide geographical area. The DGWRD is organized on functionallines, having major directorates responsible for such functions as gravityirrigation, river and flood control, swamp development, etc. This type oforganization results in duplication of activities and lack of coor-dination between the different forms of water resources development in theregions. In addition the scope of future work, which emphasizes new develop-ment of gravity irrigation, as well as swamp and tidal land development, willplace even more pressures on the already strained coordination mechanisms andwill also exacerbate the current uneven work load between the functionaldirectorates.

18. While there are traditional reasons for the functional organiza-tional structure, it is recommended that a change in the basic organizationto one which emphasizes regional responsibilities, with regional directoratesof works, having responsibility for all irrigation development in a specificregion of Indonesia., would improve the efficiency and future implementationcapacity of the DGWRD. Such a change in structure would make it possible forthe DGWRD to carry out an enlarged and more diverse program of irrigationdevelopment, give it better control over routine activities and training ofstaff and, with a special directorate having the responsibility solely forplanning, programming and design, give it an improved forward planningcapability.

Recommendations

19. This report recommends that, if the GOI wishes to maintain a growthrate in rice production which is comparable to the expected growth rate indemand:

(a) The annual program of irrigation development and the budgetin constant prices allocated to the DGWRD be increased in stages byup to about 20% by the end of Repelita III (see para. 3.30 andAnnex 9).

(b) The training and development of staff in the DGWRD be given greaterpriority than it has been given in the past (see para. 4.15 andAnnex 8).

(c) The Directorate General of Water Resources Development should berestructured along regional lines (see para. 4.09 and Annex 7).

20. A list of specific recommendations can be found in Chapter 5 ofthis review.

INDONESIA


1. BACKGROUND

The Setting

1.01 The declining growth rate in rice production in recent years hasworried both the Government of Indonesia (GOI) and the Bank. This concernis underlined by the rising trend in imports of rice to a level which werein the vicinity of 2.3 million tons in 1977/78 and in 1978/79 are likely tobe about the same; imports of such a magnitude are substantially greaterthan in previous years. With about 95% of rice production in Indonesiaproduced under either irrigated or wet land conditions,/l the Bank wasconcerned to review the progress made in irrigation, the current developmentprogram, the future irrigation development program and the impact of irri-gation on capital requirements and rice production.

1.02 The main objective of this report therefore was to review thecurrent program of irrigation development, examine the prospects for andimplications of future irrigation development and to study the organizationand management of the Directorate General of Water Resources Development witha view to assessing the planning, implementation and operational capacity ofthat organization in relation to its current activities as well as theplans for future irrigation development. Annex 1 discusses the mission'sterms of reference in more detail.

1.03 The quite specific and limited terms of reference for this reviewwere chosen deliberately. There will be no discussion of supporting servicesfor irrigated agriculture, this subject was discussed in detail in the Bank'sIrrigation Program Survey of April 1975,/2 and more recently in "A Review ofthe Supporting Services for Food Production," of October 1978. In additionit is not the purpose of this review to examine in detail each irrigationproject receiving financial assistance from the Bank. Supervision reportsprovide a regular review of each project and moreover Project CompletionReports (PCR), together with Project Performance Audit Reports (PPAR) by theOperations Evaluation Department (OED), provide the Bank's management and theExecutive Directors with a considerable amount of information with respect tothe progress and results of project loans. Furthermore in the case ofIndonesia, OED has completed recently a review of all rural sector lendingwhich placed particular emphasis on the Bank's lending for irrigation.

/1 "Wet land" areas or rainfed sawah refers to rice lands which featuresmall banks (bunds) around the rice fields which will retain rainfall.They are areas which are not irrigated by an artificial water supply.Irrigated and wet lands will in this report be referred to together assawah lands.

/2 Indonesia, "Irrigation Program Survey," Report No. 705-IND, April 15,1975.

-2-

Mission Work

1.04 This report is based on the findings of a mission composed ofMessrs. J.W. van Holst Pellekaan and R.H.S. Fennell (Bank), Tan Sri JohnDaniel, R.B. Campbell, and M. Fireman (consultants), which was in Indonesiaduring September/October 1977. Mr. D. Johnson assisted with the computa-tions. Mission members held extensive and detailed discussions with seniorstaff of the Directorate General of Water Resources Development (DGWRD) and anumber of other government institutions including BAPPENAS and the Ministryof Education. In addition, with the generous assistance of the DGWRD,members of the mission made visits to various ongoing irrigation developmentson Java and visited areas in the Other Islands where future irrigation andtidal reclamation developments are under construction or being planned. InJanuary 1978 some members of the mission returned to Jakarta to discuss apreliminary draft of the report with the DGWRD. The mission is grateful tothe Director-General and staff of the DGWRD for their substantial assistanceduring the preparation of this report.

-3-

2. CURRENT IRRIGATION DEVELOPMENT

The Extent of Irrigated Agriculture /1

2.01 Although Indonesia has a monsoonal climate with annual rainfall inrice producing areas ranging between 1,500 to 3,000 mm p.a., irrigationis of critical importance to rice production. On Java a large part of thisrainfall comes in the wet season and while in aggregate it is usually ade-quate for paddy rice production, its distribution during the year varies withthe result that there may even be periods during the wet season when thesupply of rain water is inadequate for optimum rice production. During theseperiods supplementary irrigation is required to ensure technically efficientrice production. On the other hand crops can also be damaged during the wetseason because of excessive amounts of rain, making drainage just as impor-tant as irrigation in most rice growing areas. During the dry season riceproduction is on Java is usually impossible without irrigation. On theislands outside Java rainfall patterns vary a great deal. In Sumatera thedistribution of rainfall during the year is more even than in most of Javaresulting in a less pronounced dry season. However, more permeable soils inthe islands outside Java often make supplementary irrigation still necessary.In most of the eastern islands the wet season is shorter and more pronouncedwith a severe dry season on many islands.

2.02 Rice is the dominant irrigated crop in Indonesia. In 1976 it wasestimated that there were some 8.4 million ha of rice harvested in Indonesia(4.5 million ha in Java and 3.9 million ha on the Other Islands), of whichabout 7.2 million ha were irrigated or cultivated under wet land (sawahlands) conditions (4.2 million ha on Java and 3.0 million ha on the OtherIslands)./2 Sawah lands account for almost 95% of total rice production inIndonesia. Table 2.1 shows that the growth rate of the area harvested fromsawah lands has been about 1.5% p.a. between 1968 to 1977. Over the sameperiod the total area harvested increased by about 0.6% per annum; theexpansion of the area of sawah land in recent years has been an importantfactor in the development of the agricultural sector.

2.03 Other crops such as sugarcane, soyabeans and corn are also irri-gated. The total irrigated area of these other crops is not yet known;however, it is known that irrigation of crops other than rice is found mainlyon Java./3 Most of these other crops become part of the rotation with rice,

LI It is not the purpose of this report to trace the development of irri-gation in Indonesia nor to dwell in detail on the present situation.Two recent articles by A. Booth, "Irrigation in Indonesia," Parts I andII, in the Bulletin of Indonesian Economic Studies, Volume XIII, Nos. 1and 2, March and July 1977, provide an interesting background anddiscussion of various aspects of irrigation development.

/2 Of the 7.2 million ha of sawah lands, about 6.1 million ha are irrigated,about 1.1 million ha are rainfed. Preliminary figures for 1977 suggestthat area and production are about the same as 1976.

/3 Data on the area of palawija crops is now becoming available and will bediscussed in more detail in the report, "Supply Prospects for Food Crops."

-4-

Table 2.1

Table 2.1: HARVESTED AREA, PRODUCTION AND AVERAGE YIELD OF PADDY RICEIN JAVA AND THE OTHER ISLANDS, 1968-77

Area Harvested Paddy Production /a Yield /aOutside Outside Outside

Year Java Java Indonesia Java Java Indonesia Java Java Indonesia------- Million ha ----- --- Million ton paddy --- ----- Ton paddy/ha -----

Irrigated and Wet Land /b

1968 3.86 2.51 6.36 9.955 5.406 15.361 2.58 2.15 2.411969 3.95 2.60 6.54 10.653 5,775 16.428 2.70 2.22 2.511970 3.96 2.72 6.68 11.205 6.504 17.709 2.83 2.39 2.651971 4.05 2.84 6.89 11.991 6.605 18.596 2.96 2.32 2.701972 4.01 2.60 6.61 11.518 6.385 17.903 2.87 2.45 2.701973 4.24 2.83 7.06 12.600 7.215 19.815 2.97 2.55 2.811974 4.45 2.89 7.34 13.526 7.535 21.061 3.04 2.61 2.871975 4.39 2.95 7.33 13.369 7.489 20.858 3.05 2.54 2.841976 4.22 3.01 7.23 13.723 8.128 21.852 3.25 2.70 3.071977 /c 4.15 3.06 7.21 13.354 8.555 21.909 3.22 2.79 3.04

Average Annual Growth Rate,1968 to 1977 /d 1.2% 2.0% 1.5% 3.5% 4.7% 3.9% 2.3% 2.7% 2.4%

Unirrigated and Dry Land

1968 0.41 1.25 1.66 0.451 1.351 1.802 1.10 1.08 1.081969 0.35 1.12 1.47 0.387 1.206 1.593 1.11 1.08 1.081970 0.34 1.11 1.46 0.397 1.226 1.623 1.17 1.10 1.111971 0.37 1.07 1.43 0.424 1.170 1.594 1.15 1.09 1.111972 0.33 0.97 1.31 0.407 1.084 1.491 1.23 1.11 1.141973 0.33 1.01 1.34 0.441 1.234 1.675 1.34 1.22 1.251974 0.29 0.88 1.17 0.358 1.054 1.412 1.23 1.20 1.201975 0.26 0.90 1.16 0.357 1.124 1.481 1.37 1.25 1.281976 0.25 0.89 1.14 0.339 1.110 1.449 1.36 1.25 1.271977 /c 0.24 0.94 1.18 0.347 1.187 1.534 1.44 1.26 1.30

Average Annual Growth Rate,1968 to 1977 /d -5.6% -3.5% -4.0% -2.6% -1.4% -1.7% 3.0% 2.1% 2.3%

Total Irrigated, Wet Land, Unirrigated and Dry Land

1968 4.27 3.76 8.02 10.406 6.756 17.163 2.44 1.80 2.141969 4.30 3.72 8.01 11.040 6.981 18.020 2.57 1.88 2.251970 4.30 3.83 8.14 11.601 7.730 19.331 2.70 2.01 2.371971 4.42 3.91 8.32 12.414 7.775 20.190 2.80 1.99 2.431972 4.34 3.57 7.90 11.925 7.469 19.394 2.75 2.09 2.451973 4.57 3.84 8.40 13.041 8.449 21.489 2.85 2.20 2.561974 4.72 3.78 8.51 13.884 8.589 22.473 2.94 2.27 2.641975 4.65 3.85 8.50 13.726 8.613 22.339 2.95 2.24 2.631976 4.47 3.90 8.37 14.062 9.239 23.300 3.15 2.37 2.781977 /c 4.39 4.00 8.39 13.702 9.741 23.443 3.12 2.43 2.77

Average Annual GrowthRate, 1968 to 1977 /d 0.7% 0.5% 0.6% 3.3% 3.8% 3.5% 2.6% 3.2% 2.8%

/a Official statistics up to and including 1976 show production and yield in terms of stalk paddy. Productionand yield figures in this table are in terms of rough paddy also referred to as dry rice paddy ("paddygabah"), assuming 1 kg stalk paddy - 0.765 kg rough paddy. Also official statistics now use conversion ratefor paddy gabah to milled rice as 0.68.

/b Refers to irrigated and rainfed sawah. The term "sawah" refers to all rice fields, irrigated or rainfed,which have low banks or bunds built around them to retain water so that rice can be grown under floodedconditions.

/c Preliminary estimate.

/d Computed by fitting semi-log regression line.

Source: Central Bureau of Statistics.

- 5 -

although irrigated sugarcane, which has at least a 12 to 18 month growingseason if no ratooning is adopted, is a direct competitor with rice forirrigated land. The use of irrigated land for sugarcane is in most casesstrongly influenced by the location of established sugar mills and tradi-tional arrangements and agreements between mill managements and villageleaders which will probably persist. The total area of land used for sugarin Indonesia is about 200,000 ha. It is estimated that about 50% of thisarea is irrigated. Thus, while irrigated sugarcane is undoubtedly an impor-tant form of land use in some areas of Java and is an important source ofemployment and income for a number of communities, it is nevertheless rela-tively unimportant in the context of the total irrigated area throughoutIndonesia.

2.04 Irrigated areas in Indonesia are usually classified according tothe type and quality of irrigation facilities provided. The three classifi-cations commonly used are "technical", "semi-technical" and "simple". Tech-nical irrigation systems are those which have a water supply system which isseparate from the drainage system and where the volume of incoming waterdelivered can be measured at a number of points. Semi-technical systems havefewer permanent structures, have only one water measurement device (usuallyat the major intake) and the supply and drainage systems are not always fully

Table 2.2: SUMMARY OF ESTIMATED PADDY AREAS (1977)/a

Cropping HarvestedType of paddy area Service area tb intensity area

(million ha) (%) (million ha)

Irrigated PaddyTechnical 2.1Semi-technical 0.9 . . .Simple (incl. village) 2.0 .

Subtotal 5.0 116 5.8

Wet Land PaddyRainfed 1.0 100 1.0Swamp (incl. tidal) 0.5 100 0.5Nonirrigated upland 1.1 100 1.1

Total 7.6 110 8.4

/a Mission estimates based on published statistics.

/b This refers to the service area for irrigated land and cultivated landfor nonirrigated areas. Not all of the irrigation service areas areprovided with irrigation water because distribution systems have not beenconstructed and hence the actual rice cropping intensity may be signif-icantly higher than shown in this table.

- 6 -

separate. Simple systems have no measurement devices, and conveyance systemsfor water supply and drainage are not separate, with the possibility ofrecirculation of water. A further classification of irrigation systems is onthe basis of the controlling authority. Most of Indonesia's irrigationsystems (about 80%) are under the control of the Ministry of Public Works.The remainder are known as "village" irrigation systems which are managed,operated and usually constructed under the leadership of village chiefs.Often village systems are constructed without the advice of professionalengineers. In recent years some of the finance for these village construc-tion programs has come through the INPRES program./l The extent and qualityof irrigation systems in Indonesia are discussed in detail in Annex 2.Table 2.2 provides a summary of the estimated situation in 1977.

2.05 The regional distribution of irrigation service areas is shownin Annex 2, Table 1. A summary of the estimated current situation forservice areas under Government or village control is given below. Thediscrepancy between the swamp land areas shown in the next table and inthe Table 2.2 is accounted for by the areas occupied by spontaneous settlerswho occupy fringes of coastal Sumatera and Kalimantan.

Table 2.3: SUMMARY OF SERVICE AREAS OF EXISTING IRRIGATION SYSTEMS /a

TidalGravity irrigation and

Semi- swampTechnical technical Simple Village lands/b Total'

Region -------------------- million ha ------------------

Java 1.63 0.38 0.55 0.53 - 3.10 62Bali - 0.04 0.01 0.05 - 0.10 2Sumatera 0.22 0.32 0.28 0.29 0.03 1.15 23Kalimantan - 0.02 0.04 0.02 0.04 0.11 2Sulawesi 0.14 0.09 0.05 0.09 - 0.35 7Nusa Tenggara 0.07 0.06 0.05 0.04 - 0.21 4

Total 2.06 0.91 0.98 1.02 0.07 5.03 100

Source: Directorate General of Water Resources.

/a All these service areas, except the "village" systems, are under thecontrol of the Ministry of Public Works and Electric Power; they do notinclude swamp and tidal land areas occupied by spontaneous settlers(see para. 2.05). Some of the totals appear to be incorrect because ofrounding.

/b Includes tidal and fresh water swamps.

/1 INPRES is an acronym for Instruksi Presiden - "Presidential Instruction,"a rural public works program.

2.06 These figures, together with those in Table 2.1, underline theimportance of irrigation to agricultural production on Java. With only 7% ofthe land area, Java accounts for about 60% of the irrigation service area andabout 60% of the area of sawah rice harvested. Java is endowed with the bestsoils for irrigated rice production L] and supports about 66% of the popula-tion, so that the extent of irrigation areas in Indonesia would appear to bein reasonable balance with the broad distribution of population, however,the productivity of sawahs in Java is greater than in the Other Islands. Forexample, in the years 1976 and 1977 the average paddy yield from sawah areasin Java was about 3.2 ton/ha compared with about 2.8 ton/ha in the OtherIslands (see Table 2.1).

Institutional Responsibility for Irrigation

2.07 The earlier Irrigation Program Survey (see para. 1.03) reviewedthe responsibilities of various government institutions for irrigated agri-culture. Basically the situation has not changed since that report waswritten. Figure 2.1 shows the current situation; it shows clearly theextent to which the coordination of a number of ministries is required todeliver irrigation and the associated services to Indonesian farmers.Para. 1.03 explains that this report is not intended to review again allthose institutions and organizations which have a role in irrigated agricul-ture. The operations and activities of the Ministry for Public Works, whichhas the overall responsibility for irrigation, and the Directorate General ofWater Resources Development within that Ministry which has the major respon-sibility for constructing irrigation systems, will be discussed in Chapter 4and Annex 7 of this review.

Operation and Maintenance of Irrigation Systems

2.08 Operation and maintenance (O&M) of irrigation systems down to thetertiary outlet has traditionally been the responsibility of the ProvincialPublic Works services. Beyond that point farmers, through their variousvillage organizations, are responsible for O&M. The neglect of this activityat both the provincial and village level over many years first led to theneed for the extensive rehabilitation program. Bank Group-assisted projectshave included components for the establishment and equipping of O&M organiza-tions, and despite early problems, improvements are being achieved; however,for Indonesia as a whole the standard of O&M is still unsatisfactory and isinevitably resulting in below optimum production on irrigated areas andperpetuating the need for system rehabilitation.

2.09 So far as the primary and secondary canals are concerned, the mainconstraints to the improvement of O&M standards is the lack of sufficientfunds and trained personnel, particularly at the lower levels, and an inappro-priate distribution of staff (see Annex 8, para. 12). It is evident thatthere is a lack of motivation among O&M staff, who consider that maintenancework is not as "glamorous" as development work. There is also an attitude of"permissiveness" among irrigation officials who are often not sufficiently

/1 Soils in Java used for paddy production are characterized by fine texture,limited swelling, shrinking and a high content of easily decomposableminerals which provide most of the nutrients needed for crop production.These soils are generally more productive than those in the Other Islands(for yield comparison, see Table 2.1).

firm on matters of unsatisfactory maintenance and in dealing with problems ofwater allocation between competing irrigation communities. These attitudescan only be changed by more frequent and direct involvement of the mostsenior officials of the Provincial Public Works and the DGWRD in O&M work.The normal tendency is for top management to give priority to the construc-tion aspects of projects as these lend themselves to straightforward evalua-tion of success or failure, whereas the lack of effective maintenance is notreadily evident since it often takes several years before its adverse effectsbecome apparent. (Annex 5 contains a number of suggestions for strategies toimprove the quality of O&M.)

2.10 At the village level, O&M is dependent on the cooperative effort offarmers through various kinds of water management organizations (see Annexes5 and 6). These organizations vary in their structure and effectiveness, butgenerally they are inadequate to achieve efficient or equitable water manage-ment. While the mission was concerned by the quality and effectiveness ofthe O&M carried out by the Provincial Public Works service, it was just asconcerned by an apparent weakening of the existing institutional arrangementsfor water management and O&M at the village level L1 and at the same time avery slow growth in the establishment of formal water user associations.

2.11 The cost of operation and maintenance of primary and secondarycanals in Government irrigation systems is financed primarily through theprovincial government's budget. Contributions to the costs of regionaldevelopment are collected from owners of land through the IPEDA tax./2Some of the proceeds from this tax are allocated to the operation and main-tenance of irrigation systems in the provinces. The funds allocated to O&Mhave, since 1974/75, been supplemented by subsidies from the Central Govern-ment (see Annex 5). Apart from the IPEDA tax share there is at present noformal water charge levied from farmers for primary and secondary delivery.On the other hand, operation and maintenance of the tertiary systems isfinanced through a variety of gratuities, formal and informal payments byfarmers to those in the village responsible for the allocation and distri-bution of water.

2.12 The improvement of O&M standards in irrigation systems at alllevels will need to come from increased and higher quality staffing, greaterinvolvement by senior staff of both DGWRD and the Provincial Public Works andmore financial support for O&M, in terms of both the volume and timeliness offunds.

2.13 The suggested changes in the structure of the DGWRD discussedin a later chapter provides for the coordination of O&M responsibilities ofthe DGWRD in the Directorate of Planning, Programming and Design and for

/1 For example, in some villages the traditional distribution of waterthrough a village irrigation official or "ulu ulu" has been disbandedbecause of inefficiency and corruption. It has not always been replacedby improved management systems.

/2 IPEDA means "Iuran Pembanguanan Daerah" which operates under LawNo. 11/PRP/1959. It is basically a land tax collected annually from landowners at the rate of 5% of the net value of production. The constructionof an irrigation system would raise the net value of the land and conse-quently the IPEDA tax.

advice on O&M in each of the proposed regional Directorates of Works. It isimperative that the DGWRD continue its emphasis on improving the quality ofO&M work and provide guidance and advice at the regional level. With respectto financing, the DGWRD is pressing for an allocation of 30% of the IPEDAtax to the financing of operation and maintenance of irrigation systems.These funds, together with a continued Central Government contribution and animprovement in O&M staffing should go a long way towards upgrading O&Mstandards and consequently reducing the need for regular system rehabilitation.

Irrigation Development Under the First Five Year Plan

2.14 Indonesia's first five year plan (Repelita I) set a target of830,000 ha for rehabilitation of irrigation systems and 430,000 ha of newdevelopment. The published data report that the target for rehabilitation Lwas achieved, but it is doubtful that all work in the plan was actually com-pleted. For example, as the discussion of the Bank-assisted projects inAnnex 2 points out, while the primary and secondary distribution systems arewell on the way to being finished, most of the tertiary development had noteven been started. It is also clear from Table 2.4 that targets for newdevelopment (extension) of irrigation systems were not achieved. The GOI wasforced to delay the construction of new systems, which were mainly to serveas a basis for transmigration projects in the Other Islands, because of thepriority allocation of both finance and manpower to rehabilitation. Thegovernment tidal reclamation program, which was started about 1968 with plansfor the development of one million ha, achieved only about 33,000 ha duringRepelita I (see Annex 9). On the other hand, development of a much largerarea, about 300,000 ha, by spontaneous settlers had taken place over a numberof years starting well before 1968.

2.15 The emphasis given to rehabilitation in Repelita I was in line withthe Government's aims at that time of restoring existing infrastructure toworking order as well as its desire to achieve rapid increases in grainproduction, particularly rice. The First Five-Year Plan also saw a substan-tial increase in the commitment of foreign aid for irrigation development,much of it from the Bank. The magnitude, origin and nature of foreign aidare summarized in Annex 3.

/1 Rehabilitation usually involves the restoration of existing irrigationsystems to their original standard. However for PROSIDA projects italso involves system improvements. Other Directorates are now alsotaking this example.

Table 2.4: SUMMARY OF PHYSICAL PROGRESS AND FUNDING OFIRRIGATION DEVELOPMENT UNDER REPELITA I and II /a

Repelita I Repelita IITotal Total

Type of planned Achievements planned Achievementsprogram/financing target 1969-70 1970-71 1971-72 1972-73 1973-74 Total target 1974-75 1975-76 1976-77 1977-78 1978-79

Physical targets/progress - -------------------------- ha --------------------------------- -------------------------- ha ----------------------

Irrigation rehabilitation 830,000 210,330 171,549 135,754 172,444 263,469 953,546 834,698 108,956 105,143 112,011/d n.a. n.a.Irrigation extension 430,000 43,153 24,379 46,400 45,834 31,480 191,246 950,000 20,684 88,522 63,435/d n.a. n.a.River and flood control /c n.a. 73,259 62,406 57,045 55,875 40,853 248,585 679,190 79,278 148,822 71,797/d n.a. n.a.Swamp and tidal development n.a. 21,059 25,000 14,905 61,562 56,140 178,666 /e /e /e /e n.a. n.a.

Development budget allocation/expenditure /f - ----------------------- Rp. million ---------------------------- ------------------ Rp. million ------------- ------

Irrigation rehabilitation 49,971 7,603 7,865 9,192 11,011 14,300 49,971 n.a. 10,736 16,840 26,485 36,243 53,722Irrigation extension 25,034 5,335 4,566 4,739 5,394 5,000 25,034 n.a. 14,339 26,131 36,203 50,228 68,812River and flood control 6,346 1,942 901 920 1,383 1,200 6,346 n.a. 10,095 36,829 37,580 46,830 65,366Swamp and tidal development / 33,078 5,826 6,336 6,475 7,041 7,400 33,078 n.a. 1,030 2,000 2,000 2,250 2,875

Subtotal 114,429 20,706 19,668 21,326 24,829 27,900 114,429 n.a. 36,200 81,800 102,268 135,551 190,775

Routine expenditure /h n.a. 133 250 261 321 392 1,357 n.a. 583 1,141 1,424 1,794 2,085

Foreign aid /iProject aid 40,125 3,075 1,777 5,382 5,810 7,761 23,805 187,539 5,935 10,043 8,591 18,592 4,939/iTechnical assistance 17,063 - 983 1,159 3,113 1,494 6,749 18,883 1,868 3,154 3,486 8,093Buyer's credit /k - - - - - - - 68,890 - 52,996 3,984 11,911 -/

Subtotal 57,188 3,075 2,760 6,541 8,923 9,255 30,554 275,312 7,803 66,193 16,061 38,596 4,939/i

Total (RP. million) n.a. 23,914 22,678 28,128 34,103 37,547 146,340 n.a. 44,586 149,134 119,753 175,941 n.a.

Total ($ million) /1 64 60 68 82 90 107 359 289 424 520(est.)

n.a.: Not available.

/a Refers to irrigation development under the control of the Directorate General of Water Resources Development and the Jatiluhur Authority. Expenditureson irrigation development under the INPRES program are not included.

/b For fiscal years April 1 to March 31./c Includes tidal and swamp development in Repelita II./d Includes only area developed during first quarter of 1976-77, namely up to and including June 30, 1977.Te For Repelita II the areas for swampy land development are included with "River and flood control."/f The mission was not able to obtain data on actual expenditure; however, it is reasonable to assume that expenditure was close to the budgeted amount./g In Repelita II, swamp and tidal development is grouped with river and flood control. The figures shown in Repelita II are contributions to overheads

general administrative costs of the Central Government./h Includes salaries for permanent staff, office equipment and supporting services, etc.7i Exchange rates used to convert foreign currency to Rp were the official rates prevailing in year of disbursement.X For the first three months of 1978-79 fiscal year.

Credit extended to the Government through commercial or semi-Government lending institutions./1 US$1 = Rp 415 for all years except 1969 up to 1971/72.

Source: Directorate General of Water Resources Development.

Irrigation Development Under the Second Five-Year Plan

2.16 The second plan (Repelita II) started in 1974 with an ambitioustarget, but as is apparent from Table 2.4, the targets are unlikely to bereached by the end of the plan period in April 1979; any estimate of actualachievements would be speculative at this stage, although it is clear thatmany of these projects will not be completed by 1979. Table 2.4 also showsthe rapid growth in the Repelita II rupiah budget allocations for irrigationdevelopment since 1974/7-5. The annual rate of growth between 1974/75 and1977/78 averaged about 40% and even allowing for an annual inflation rateover the same period between 15% and 25% the real rate of growth in therupiah budget has been substantial. The rapid rate of increase in thedomestic budget for irrigation development has meant that the disbursedforeign aid as a proportion of the total outlay on irrigation development hasdeclined considerably in recent years. On the other hand, sharply increaseddisbursements of foreign aid are expected over the next five years, mainlybecause of the lags between commitment of funds and project execution. (Forthe anticipated disbursements from Bank Group loans see Annex 4).

2.17 Table 6 of Annex 2 shows that about 1.6 million ha are presentlyeither under construction or in the design stage. The table shows that ashift is taking place in the broad type and location of irrigation develop-ment. While conventional gravity irrigation systems remain important,accounting for about 80% of the current activities, 60% of the work is fornew development. Not only is the emphasis of activity moving away fromrehabilitation, but in terms of area some 60% of all current work is locatedoutside Java.

2.18 There are two other characteristics of Repelita II worth noting.About 80% of the conventional projects under construction or in the designstage are less than 2,000 ha in size and, while these projects accountat most for only 30% of the total area involved, they make up a significantpart of the program of irrigation development. The prominence of smallprojects results to a large extent from the "Sederhana" or small-scaleirrigation development program which the GOI initiated at the start ofRepelita II, with the stated aims of both increasing rice production andimproving the well-being of the low-income segment of the population by meansof simplified design and construction standards applied to projects whosesize would be no greater than 2,000 ha. Another aspect of the Sederhanaprogram is that most of these projects would be outside Java (see Table 8,Annex 2). The Sederhana program is discussed in more detail in Annex 2.

2.19 A second feature of the current program of construction, whichis also relevant to future irrigation development, is the tidal and swampland reclamation program. As mentioned in para. 2.14, the development ofthese areas by the GOI started during Repelita I, but progress fell far shortof the target. Although many engineering and agricultural questions remainto be solved, substantial areas have already been developed in Sumatera andKalimantan for the purposes of settling transmigrants. Even though tidal andswamp land reclamation is only a small part of the total water resources

- 12 -

development for agriculture, it is important in the context of the expansionof rice-producing areas and the transmigration program. The future prospectsof tidal land reclamation and its problems are discussed in more detail inAnnex 2. In addition, further background information *is available from thereport of a conference held in Rome in 1975 to discuss tidal land developmentin Indonesia./li

Impact of Irrigation Development on Rice Production

2.20 Irrigated land in Indonesia is used primarily for rice produc-tion, although in those areas where irrigation systems are incapable ofdelivering adequate water supplies for rice production during the dry seasonpalawija crops L2 are grown using residual soil moisture and rainfall.Nevertheless, because of the importance of irrigation development to riceproduction, this section of the report will concentrate on the extent towhich the heavy investment in irrigation over recent years has been associatedwith increased rice output.

2.21 It should be stressed at the outset that the rehabilitation andextension of irrigation systems alone will not necessarily result in signifi-cant increased rice production. Improved farm management, namely use ofappropriate cultivation practices, correct types and quantities of inputs,pest and disease control, and careful attention to water management are allfactors which jointly determine the level and rate of growth of rice output.For example, it is likely that the increased cropping intensity made possibleby irrigation has intensified the need for more intensive programs of pestand disease control. Nevertheless there is little argument about the viewthat the availability of a reliable irrigation system makes it both technicallyfeasible and economic to adopt a more intensive crop management and to useimproved levels of inputs.

(a) Aggregate Situation for Indonesia

2.22 Table 2.1 shows that between 1968 and 1977 the area of sawahrice harvested has expanded from 6.36 million ha to 7.21 million ha, anincrease of about 0.9 million ha The increase was associated with a declineof 0.5 million ha in the area of dry land rice harvested, most of which waspresumably converted to irrigated or rainfed sawah. In addition some0.4 million ha were added to the total area harvested either through furtherextension of irrigation areas or increased cropping intensity on existingirrigation areas. Estimates in Table 2.2 suggest that of the total sawaharea harvested in 1976/77, up to 5.8 million ha were harvested from irrigated

/1 See "Indonesia, Development of Tidal Lands in South-East Sumatera."Report of a Seminar held at the FAO, Rome, on November 24-26, 1975.

/2 The term "palawija" refers to crops other than sugarcane which are grownin a rotation with rice. This group usually includes crops such asmaize, various beans, pulses and cassava. The importance of thesecrops to total food production will be discussed in more detail in theBank report on the Supply Prospects for Major Food Crops.

- 13 -

land, the remainder being rainfed sawah with no water supply from an irrigationsystem. Over the same period the production of paddy rice from sawah landsrose by about 6.5 million ton increasing at an annual rate of about 3.9% p.a.(accounted for by a yield growth of 2.4% p.a. and area growth of 1.5%p.a.). On the other hand, because production from dry land areas declined,total production increase by only 6 million ton, growing at a rate of 3.5%p.a. (yield .8% p.a. and area 0.6% p.a.).

2.23 Although average yields on all irrigated land (including rainfedsawah) have been increasing at about the same rate as yields on unirrigatedor dry land areas, the absolute increase in per ha yield of paddy on sawahareas (.4 ton/ha) has been twich the increase in yield on dry land (0.2ton/ha). While it cannot be assumed that the margin between the averageyield from irrigated and nonirrigated land has been solely due to improvementsand extension of irrigation systems (see para. 2.20), it is reasonable toassume that a significant part of the explanation is irrigation. The signifi-cant contribution of sawah production to the growth of total rice output isunderlined by the fact that whereas the growth rates of yield on both sawahand dry land areas are about the same 2.4%) the overall growth rate issignificantly higher (2.8%). This implies that the shift to a greater propor-tion of rice production originating from sawah land has had a major influenceon aggregate productivity growth.

2.24 The strong growth rate in the area of sawah rice harvested can beattributed to both increased cropping intensity and the extension of irriga-tion systems. Rehabilitation of village systems in Java has received consider-able attention in the years 1968 to 1974, but it is not apparent from theavailable statistics that as a result yield improvements on sawah land inJava have been significantly better than on the Other Islands (yield increasesin both regions have been about 0.6 ton since 1968).

2.25 Although the importance of irrigation development to yield increasesis widely accepted, it is difficult to isolate the contribution of irrigationwater from other factors. For example, attempts have been made to correlateyield with the extent of irrigation coverage in a region using the ratio betweenthe total of technically and semi-technically irrigated area and total sawaharea. The results so far have been mixed and inconclusive and confirm thatirrigation alone will not result in significant sustained increases inproductivity. The recent Asian Agricultural Survey L1 sought to quantify therelative importance of the contribution of area and yield to rice production.For Indonesia the results of the analysis for the years 1965 to 1972 confirmedthe conclusion in paragraph 2.23 that the decline in the growth of dry landrice areas has been more than offset by an expansion in irrigated or sawaharea. For the years used in the analysis (a period of rapid productiongrowth) area increases accounted for about 40% of total growth, irrigation

/1 Asian Agricultural Survey, 1976. Rural Asia: Challenge and Opportunity,Asian Development Bank, Manila, April, 1977, p. 75.

- 14 -

contributed close to 47% and dry land -7%. So far as yield is concerned themajor influence was fertilizer which is estimated to have accounted for 25%of total production growth, other factors (most importantly the change in theproportion of land irrigated) about 35%.

2.26 Apart from the difficulties encountered because of the unavailabilityof statistics which record production from irrigation areas as distinct fromall sawah areas, and the many factors which jointly determine production,/lit is probably too early to draw conclusions about the impact of recentinvestments in irrigation since many of these developments will not matureuntil well into the 1980s. The mission was not able to obtain information onthe likely impact of all irrigation investments, but it has made an assessmentof the impact of Bank-assisted projects.

(b) Contribution by Bank Group-Assisted Irrigation Projects

2.27 Annex 4 discusses in some detail the World Bank's lending program forirrigation. These projects cover about 1.2 million ha out of about 5 millionha of land which is declared as being serviced by irrigation systems;/2 overthe last four years, disbursements by the Bank for the projects in which ithas become involved have accounted for between 3% and 15% of the total DGWRDdevelopment budget. It is estimated that, if the ongoing projects arecompleted according to the current schedule of construction, and if appraisalestimates of future yields are reached, then Bank Group-assisted projects arelikely to contribute an additional 2 million tons of rice annually to totalIndonesian production by 1990. Included in Annex 4 is a summary of theexpected contribution from each project. The following table compares theincreased paddy production anticipated from Bank projects with the totalprojected production of paddy for Indonesia as a whole, without the impact ofBank projects, assuming that the latter increases at an annual rate of either2.5%, 3.0% and 3.5%.

L1 In the forthcoming study of supply prospects for food crops in Indonesia,an attempt will be made to make a systematic assessment of the relativeimportance of the different factors which influence rice production.

/2 Rehabilitation in Bank Group-assisted projects is to "technical" stan-dards. Consequently, some systems are upgraded in the course of rehabil-itation. Although rehabilitation undertaken by the DGWRD in otherprojects is often to semi-technical or simple standards, increasinglyhigher standards are being adopted.

- 15 -

Table 2.5: ESTIMATES OF FUTURE PADDY PRODUCTION WITH AND WITHOUTBANK GROUP-ASSISTED PROJECTS

Percentage contribu-Incremental tion of incremental pro-

Indonesia production Indonesia duction from Bank Group-(without Bank Group- from (with Bank Group- assisted projects to

assisted project Bank Group- assisted projects total estimated pro-at indicated annual assisted at indicated annual duction at indicated

growth rates)/a projects /b growth rates) growth ratesYear 2.5% 3.0% 3.5% - 2.5% 3.0% 3.5% 2.5% 3.0% 3.5%

------------------ million ton paddy ---------------- -------- (g) -------

1976Lc 23.3 23.3 23.3 - 23.3 23.3 23.3 - - -

1977/d 23.4 23.4 23.4 - 23.4 23.4 23.4 - - -1978 24.0 24.1 24.2 0.1 24.1 24.2 24.3 0.4 0.4 0.41979 24.6 24.8 25.1 0.3 24.9 25.1 25.4 1.2 1.2 1.21980 25.2 25.6 25.9 0.7 25.9 26.3 26.6 2.7 2.7 2.61981 25.8 26.3 26.8 1.1 26.9 27.4 27.9 4.1 4.0 3.91982 26.5 27.1 27.8 1.6 28.1 28.7 29.4 5.7 5.6 5.41983 27.1 27.9 28.8 2.0 29.1 29.9 30.8 6.9 6.7 6.51984 27.8 28.8 29.8 2.4 30.2 31.2 32.2 7.9 7.7 7.51985/e 28.5 29.6 30.8 2.5 31.0 32.1 33.3 8.1 7.8 7.5

Growthrate1977to1985 2.5% 3.0% 3.5% - 3.7% 4.1% 4.6% - - -

/a The average rate of growth for paddy production has been about 3.5% overthe last 8 years although very recently the impact of the brown planthopper and climate factors have resulted in a substantially reduced rateof growth. While the extent of crop damage in the future is difficult topredict, it is the judgment of agronomists and entomologists that itcould be 3-4 years before rice varieties resistant to the emerginggenotypes can be bred and multiplied in sufficient quantities as to beavailable throughout Indonesia. Until this occurs the growth rate ofrice production is expected to be below past trends.

/b See Table 5 in Annex 4. Includes all Bank Group-assisted projects up to andincluding Irrigation XI.

/c Central Bureau of Statistics.

/d Preliminary estimates by Central Bureau of Statistics. The production data for1977 include incremental production resulting from investment in BankGroup-assisted projects up to and including 1977.

/e The analysis is terminated at 1985 because shortly after this year projectsdesigned to increase rice production, but for which no estimates of incrementalproduction are as yet available, will start to make a contribution to totalproduction.

- 16 -

28. The table shows that the incremental production from Bank Group-assisted projects to total production is expected to account for about 8% ofestimated total Indonesian paddy production in 1985 if only the ongoingprojects are included. Whether the assumed range of growth rates in produc-tion for all Indonesia without Bank Group-assisted projects is reasonable ornot is obviously open to debate. Similarly the accuracy of the estimatedincremental production from Bank Group projects depends heavily on the extentto which assumptions in appraisal reports will be achieved. Some projectsmay fall further behind schedule, and supporting services in most projectareas are not yet as good as assumed in appraisal reports./i

2.29 Bearing in mind the difficulties the contribution of the incrementalproduction from Bank-assisted projects to the growth rate of total paddyproduction is in the vicinity of an additional 1% p.a. For example, if it isassumed that Indonesia's production of paddy will grow at 3.0% in the futurewithout the increased production from Bank Group-assisted projects, thenaddition of the incremental production from these projects raises the averageannual rate of growth over the years to 1985 to about 4% p.a. In otherwords, the increased production from Bank Group-assisted projects would, ifachieved, return the average growth rate of rice production over the years to1985 to about the levels attained in Indonesia during the late 1960s andearly 1970s. However, there are three important qualifications to thisconclusion. First, it is expected that the damage being caused to rice cropsby the brown plant hopper will be controlled after three to four yearsfollowing the wider spread of improved resistant varieties. Second, delaysin project construction and inadequate delivery of supporting services onBank Group-assisted projects should be minimal and finally, it should beemphasized that with the maturation of current Bank Group-assisted projectsthe rice production growth rate is unlikely to be sustained at a rate between3.5% and 4% p.a. beyond 1985 unless investment in irrigation development iscontinued at a rate which is at least comparable to the rate of recent years.The next chapter of the report will address this issue.

/1 For example, the Project Completion Report for the first irrigationproject in Indonesia (Credit IND-127) notes that in 1976 when plannedconstruction was almost completed, only 52% of the project area wascovered by BIMAS/INMAS programs.

- 17 -

3. FUTURE IRRIGATION DEVELOPMENT

Government Oblectives in Water Resource Development

3.01 The Government's planning of future irrigation development needs tobe considered in the context of its overall plans for water resources develop-ment for all purposes. In particular the demand for water from domestic andindustrial users needs to be weighed against the demands from agriculture.The competing demands for available water supplies is an increasingly importantissue on Java. While details of the Government's investment plans forRepelita III had, at the time of writing, not yet been announced, the broadpolicy objectives are clear. Economic growth, increased food production,balanced regional development, improved employment opportunities and redistri-bution of incomes remain important goals of the GOI. Irrigation investment inits various forms can be expected to continue to contribute to the achievementof these objectives. The DGWRD will continue to carry a heavy responsibilityfor irrigation development to increase food grain production and reclamationof tidal lands to assist in the transmigration program. Its activities willalso need to be coordinated with those responsible for dry-land developmentin areas which may in the future become irrigation areas. It will need totake account of the need to provide water supplies for industrial developmentand hydroelectric power generation, as well as the requirement for drinkingwater supplies to the rural and urban population.

3.02 Irrigation development should therefore be seen as but one of themany priorities of both the Government and the DGWRD. Nevertheless theproportion of the local currency (Rupiah) development budget allocated toirrigation was about 9.5% of the total in 1977/78 and is planned to be almost12% in 1978/79. When routine expenditures and foreign aid are added, irri-gation has accounted for about 5% of the total GOI budget in recent years.The development budget for irrigation has increased at an average rate ofabout 40% p.a. since 1974/75 (probably equivalent to a real annual growthrate of between 15% and 25%). This part of the report will show that ifIndonesia is to achieve a growth rate in rice production which is comparableto the expected growth rate in demand, then the annual allocation of develop-ment budget funds to irrigation by the end of Repelita III will need to beabout 20% greater (in real terms) than in recent years, even given thepossibility of producing rice under dryland conditions.

Future Potential for Irrigation Development

3.03 Table 3.1 below provides a summary of the areas identified by theDGWRD as having potential for irrigation development; further details arepresented in Annex 9. It is envisaged that, of the total of 5.6 million ha,about 5.1 million ha (almost 95%) will involve the construction of new irriga-tion or swamp development projects, most of which would be on the islandsoutside Java. The following is a brief summary of the total scope ofpotential future irrigation development as estimated by the DGWRD:

- 18 -

Table 3.1: SUMMARY OF AREAS IDENTIFIED FOR POSSIBLE FUTUREIRRIGATION DEVELOPMENT

Gravity irrigationNew Swamp and

Province development /a Rehabilitation tidal Groundwater Total- ------------------ - - million ha …

Java /a 0.16 0.07 - 0.05 0.28

Sumatera 2.53 0.08 0.65 - 3.26Kalimantan 0.68 0.02 0.62 - 1.33Sulawesi 0.36 0.04 - - 0.40Nusa Tenggara 0.08 0.01 - - 0.09Maluku 0.16 - - - 0.16Irian Jaya 0.03 .07 - - 0.11

Total /b 4.02 0.30 1.28 0.05 5.65


/a It is not known how much of this area is already used for dry landagriculture.

/b Includes Madura and Bali.

/c Some totals appear to be incorrect because of rounding.

(a) Java

3.04 With most of the basic rehabilitation of existing systems on Javahaving been completed or already under way, the future pattern of developmentwill be concentrated on more intensive system rehabilitation, including theconstruction of tertiaries, and on increasing cropping intensity in existingirrigation systems through the augmentation of dry-season water supplies.Indeed some 55% of the area included in the DGWRD inventory of future develop-ment potential on Java still involves rehabilitation of existing systems. Onthe other hand, there are also proposals for a number of large- to medium-scale dams designed to increase the water supply to existing systems.

3.05 The total scope for new storage development on Java is relativelysmall compared with the extent of existing irrigation development. TheDGWRD has some 21 storage proposals under review. The total storage capacityof these dams is currently estimated at about 8,300 million cubic meters (seeAnnex 9, Table 4) which, depending on the type of crop, soil conditions, hydro-logy and the demands on water stored for other purposes,could probably irrigateabout 500,000 ha per year. Inevitably, in a closely settled island like Javaa number of these water storage projects will result in the inundation offarmland and necessitate the resettlement of a significant number of people,

- 19 -

creating considerable social and administrative problems, and adding substan-tially to project costs.IL It is therefore likely that in Java both forsocial, political and economic reasons, the Government will still prefer toconcentrate on rehabilitation, upgrading and "fine tuning" of existingirrigation systems. In addition, the prospects for small-scale irrigationsystems, based on small storages, to supplement water supplies in particularlocalities should also be considered. The question of the choice of projectsis an important issue facing those who plan future irrigation development andwill be examined further in paragraph 3.23.

3.06 Only a few groundwater projects have been identified for develop-ment on Java. At present, the DGWRD is surveying the groundwater resourcesof Java, partly with Bank financial assistance (Loan 1434-IND), and thissource may become a major potential water supply in areas where surfacesupplies have been exhausted or are too costly to develop. However, theextent to which it becomes a practical source of water supply for irrigationsystems depends on a number of factors. The hydrology of areas with ground-water resources needs to be investigated to determine the magnitude of theresource, its response to water withdrawal, its quality and its source ofreplenishment. Because much of the groundwater is at least 100 m belowground level, appropriate equipment will need to be evolved and operating andmaintenance systems devised which will suit Indonesian conditions.

(b) Other Islands

3.07 The potential for development includes both construction of newand rehabilitation of existing irrigation systems, and swamp and tidal landreclamation. New conventional systems and rehabilitation of existing onesinvolve mainly small to medium size projects which are widely dispersedthroughout the islands. Many of them would be in the group broadly known as"Sederhana" projects (small projects with simple standards, see para. 2.18).The Government sees these projects as an important part of its program ofregional development, food production and income distribution. The missionwas impressed by this program and sees merit in expanding it so long ascontrols on the quality of work done are strengthened. The larger conven-tional projects planned for the future are found mainly in South Sumatera andKalimantan; many of these will involve substantial land clearing and landdevelopment adding to total costs. On the other hand additional benefitsfrom these projects may be greater than those from rehabilitation projects.

3.08 The other major potential for development in the Other Islandsis swamp reclamation. As explained in Annex 2, these are mainly drainageprojects in inland fresh water swamps and tidal lands in the coastal areas ofSumatera and Kalimantan. The reclamation already undertaken is based on avariety of engineering design for drainage and water control. It is theGovernment's intention to devise the most appropriate drainage system andthat these areas should become important settlement areas for transmigrants.

/1 In aggregate the area inundated may amount to about 30,000 ha. Thisis a very tentative estimate based on the farm land area expected to beinundated by those dams in an advanced planning stage.

- 20 -

The identified scope for future tidal land development indicated in Table 1of Annex 9 (0.56 million ha) is less than the potential suggested by theGovernment in earlier statements (for example it had been suggested that2.2 million ha could be developed) probably because actual developmentexperience in these areas has exposed a number of difficulties such as theoptimum drainage system, cropping rotations, planting times, soil quality,water and soil management and crop varieties. It is possible that, followingfurther research, current technical problems in the more difficult situationscan be resolved and that the potential area for development can be increasedin the future.

Preparation of Irrigation Projects for Development

3.09 The DGWRD adopts two distinctly different sets of criteria forevaluating a project's feasibility, depending on the source of finance.If the project is to be financed by the Government, then it needs tosatisfy a number of criteria which are mainly concerned with the suitabilityof the area for irrigation, adequacy of water supplies, and the absence oflabor, transport, land ownership and flooding problems. (A detailed list ofthese criteria is given in Appendix A of Annex 9). On the other hand, if theproject is to be financed by an international lending institution or bilaterallenders, then a comprehensive engineering and economic feasibility study isinvariably required. While a few of the potential future project areas(Table 3.1) have been considered in terms of the criteria needed for localfinancing, even less have been the subject of formal feasibility studiesrequired for foreign assistance. Some potential projects in Indonesia are nowbeing subjected to preliminary assessment;]i however, preparation of projectsfor appraisal, even with the assistance of teams of expatriate consultants(see Annex 3), has been made difficult by inadequate data on basic resources.

3.10 Annex 9 discusses the availability of soils data in Indonesia.Soils information which is sufficiently accurate for planning purposes is notavailable at present for most of the potential project areas which are mainlyoutside Java. The mission recommends that, if the development of irrigationsystems and tidal lands is to be realized, then soil surveys in target areasshould be mounted as a matter of urgency. Most of the areas identified forirrigation development have not been surveyed and it is essential thatsoils information be obtained and analyzed before project planning starts.The mission considers that there should be some uniformity in the type ofinformation obtained and the type of analysis; it has, therefore, draftedsuggested terms of reference for such soil surveys (see Annex 9, Appendix B).

3.11 A similar situation exists for hydrological information, in thatfew of the potential project areas have adequate climatic and stream flowdata. There is an urgent need to extend the network of climate and streamflow measurement points and to make provision for a sound system of data

/1 A team of United Kingdom advisors under a bilateral assistance programare at present undertaking preliminary analyses of the many potentialprojects with a view to ranking them in order of economic merit.

- 21 -

compilation and analysis. The DGWRD is moving to correct this situation anda component of Irrigation XI provides for financing the expansion of theexisting hydrological data collection program.

3.12 Many of the potential irrigation and water resource developmentsare in remote areas where various forms of infrastructure such as roads,marketing facilities and distribution centers for farm inputs do not exist.The establishment of these facilities will need to be accounted for inproject costs. It goes without saying that the nature of future irrigationdevelopment will intensify the demand on financial resources and lengtheningthe development period.

Economics of New Irrigation Development

3.13 A systematic analysis of the most appropriate future irrigationdevelopment program would need to consider the most economic mix and sequenceof projects, their time of construction and their contribution to nationalincomes. The mission did not have available to it the expected costs andbenefits of all potential projects, and was therefore not in a position toundertake this analytical approach, but did make an assessment of the economicsof three of the most important types of potential projects. Annex 10 containseconomic analyses of two major types of gravity irrigation development(a medium-sized run-of-the-river project on Sumatera and a large storage-basedproject on Java), and a tidal reclamation development on Sumatera./l Thepurpose of the analysis is to assess the economics of these three types ofp-rojects since they figure prominently in the inventory of potential futureprojects. A satisfactory analysis was made difficult, however, due to thelack of benefit and particularly cost data for these types of projects. Ofcourse, it is not surprising that many of these pioneering types of projectscould not be costed since, as mentioned earlier, basic resource data is notavailable and feasibility studies have not even been started for most ofthem. It was therefore decided to make the object of the analysis an estimateof the maximum development cost which would, with a stream of benefitsestimated bIy the mission, yield an economic rate of return of at least 15%./2

(a) Run-of-the-River Development in Sumatera

3.14 It is possible that in the future some 50% of new irrigationdevelopment outside Java will involve projects in the size range 2,000 to

/1 While "Sederhana" or simple irrigation projects are also likely to beimportant in the future, the characteristics of these types of projectsare so variable that typical models are impossible to construct. Theeconomic analysis, therefore, excludes any consideration of this type ofproject. The exclusion of these projects from the analysis in no wayimplies that they are less economic than larger projects.

/2 This is an arbitrary benchmark and does not imply anything about theeconomic cost of capital in Indonesia. It does, however, serve as arough guide to the economic justification of a project.

- 22 -

10,000 ha (See Table 2, Annex 9). Economic analysis of a hypotheticalproject designed to simulate a typical irrigation scheme in the province ofJambi (Sumatera) indicates that if the best estimates for all assumptionsmade in the analysis are realized, then unless total development costs (inmid-1978 prices) are kept equal to or less than a figure of $3,900 per ha ofservice area, the project will not achieve the chosen target economic rate ofreturn at 15%. As is to be expected, the development cost which would stillallow an economic rate of return of 15% is sensitive to delays in the accrualof benefits and variations in those benefits. The results of the analysisfor this and other hypothetical projects are given in the following table.More complete details of the analysis are presented in Annex 10.

Table 3.2: IMPUTED COSTS OF DEVELOPMENT FOR THREEMODELS OF IRRIGATION DEVELOPMENT

Imputed Cost of Development /aConventional Tidal Large storage-irrigation reclamation based irrigation

Item (Sumatera) (Sumatera) (Java)----------------- ($ per ha) -----------------

Best estimate 3,900 2,500 3,700Full benefits delayed 3 years 3,300 1,600 2,30025% reduction in rice price 2,400 1,400 2,500

/a Estimated total financial costs per ha which should not be exceeded ifthe project is to achieve an economic rate of return of 15%. Theseimputed costs would include costs of construction, physical contingen-cies, costs associated with placing settlers on the project and providingbasic essential infrastructure. All figures are in mid-1978 prices andwere calculated from the economic analysis using a shadow exchange rateof $1=Rp. $520. (See Annex 10)

3.15 While the type of economic analysis in Annex 10 was done becauseno reliable estimates of development costs were available for the simulateddevelopment, an attempt was made to determine an indicative cost of develop-ment against which to compare the results of the economic analysis. Theestimate for the conventional project in Jambi (Table 10 of Annex 10) showsthat when transmigration costs are included, total development costs areclose to $4,200 per ha. Without the cost of transmigration it would be about$2,500 per ha. The tentative conclusion for a 10,000 ha conventional irri-gation project of the type simulated here is that if transmigration costsare involved then there is some doubt that the project could achieve a 15%economic rate of return; if no transmigration costs are involved then therate of return is likely to be above 15%. The results will, of course, varyaccording to the specification of the project. For example in most projects,an increase in the service area which results in a decline in the average

- 23 -

cropping intensity will reduce the economic rate of return. On the otherhand, the extent to which transmigration costs are charged to the project willhave a critical effect on the economic rate of return.

(b) Tidal Land Reclamation in Sumatera

3.16 For the purposes of this analysis it was assumed that tidal landdevelopment would proceed through the progressive reclamation of blocks of10,000 ha, even though many developments of this size may well end up beingcontiguous. The analysis, results of which are summarized in Table 3.2above, shows that the mission's best estimate of the stream of benefitssuggests that if total development costs do not exceed $2,500 per ha then thesimulated tidal reclamation project would show an economic rate of return of15%. A delay of three years in achieving the benefits would lower thedevelopment cost which could be permitted to $1,600 per ha before the rate ofreturn would drop to below 15%; a 25% reduction in benefits would reduce themaximum development cost to $1,400 per ha, while a 25% increase in benefitswould raise the permissible development cost to $3,100 per ha.

3.17 Investigations into the technical and economic aspects of tidalland reclamation are being undertaken and already some tentative informationon development costs is available, from which the mission has estimated thatthe cost of tidal land development could be in the order of $2,200 per hawhen costs of recruiting and establishing transmigrant settlers are included(see Table 11 of Annex 10). In the unlikely event that no transmigrationcosts are involved then the total costs are estimated at about $1,300 per ha.

(c) Large Storage-Based Irrigation Development in Java

3.18 Among the options for future water resource development identifiedby the DGWRD are a number of large water storages on Java for the purpose ofadding to the total available supply of dry-season irrigation water andthereby increasing cropping intensity. The project simulated in Annex 10assumes some extension of the irrigation area, but mainly the provision of anadditional reliable water supply to permit the growing of a dry-season cropon areas which are already irrigated in the wet season. The model assumes anincrease in cropping intensity for 100,000 ha from 125% (which includes 20%of the area growing rainfed rice) to 200%. On the basis of the mission'sbest estimate of the benefit stream, the total development costs for such aproject could be as high as $3,700 per ha and still show an economic rate ofreturn of 15%. A three year delay in the realization of full project benefitswould reduce the threshold development costs to $2,300. The actual cost ofdeveloping one ha in Java will vary considerably depending on land and soilconditions, the extent of the area already serviced, the type of waterstorage which is built and the cost associated with compensation for the landused, particularly in the catchment and inundated area. Consequently anyestimate of costs per ha of large storages would be speculative however, itis likely that most large storages for irrigation purposes on Java would costin the vicinity of $3,000 to $3,500 per ha of service area.

- 24 -

Issues and Options for Future Irrigation Development

3.19 The rehabilitation of irrigation systems was the main objective ofthe GOI in Repelita I and II. With the realization of this objective thereis now an increasing emphasis on the extension of service areas, the increaseof cropping intensity and the development of new irrigation systems. One ofthe main driving forces behind the heavy investment in irrigation development(accounting for some 12% of total Rupiah development budget for1978/79)1l has been the GOI objective of self sufficiency in food grains,particularly rice. The self-sufficiency target has not yet been achievedand, while ongoing developments are still to reach peak production potential,it is apparent that the Government is faced with a continued need to importrice (see para. 1.01).

3.20 One of the issues which therefore arises is the extent to whichfurther irrigation development can provide a boost to the rate of'growth offood grain production. Four related questions result: First, what contri-bution to rice production can be derived from the full exploitation of theongoing and potential future irrigation projects? Second, should the empha-sis in the GOI's irrigation development'be concentrated on Java or the OtherIslands? Third, what types of projects should the Government choose?Finally, what are the possible budgetary implications of different levels andtypes of irrigation development for the GOI?

(a) Rice Production and Future Irrigation Development

3.21 Over the last decade the average annual rate of growth of riceproduction in Indonesia has been about 3.5% (see Table 2.1). After 1970 thetrend rate of growth declined to about 3.0%, made up of a growth rate in areaof about 0.6% and yield of about 2.4%. Over the last two to three yearsproduction fluctuated considerably, in fact total production declined slightlybetween 1976 and 1977. The damage caused by the brown plant hopper and otherpests and diseases, lower fertilizer use, and some movement away from the useof high-yielding varieties appear to be-the main factors contributing to therecently decline in the average annual rate of growth recently. Although itis anticipated that resistant varieties combined with strategic sprayingwill, in time, overcome the devastating effects of the brown plant hopper andthat when this takes place farmers will expand their use of high-yieldingvarieties, sprays and fertilizers, an important precondition to the wider useof improved varieties and inputs is the availability of irrigation facilities.

3.22 It was concluded earlier (paragraph 2.29) that the trend rate ofgrowth of rice production in Indonesia could be increased by 1% p.a. ifthe projected production from Bank Group-assisted projects is realized. Theissue for the longer term future is the extent to which the higher growth

/1 Agriculture and irrigation together accounted for about 19% of the totalRupiah development budget (DIP) in 1978/79. These two sectors representabout 9% of the total budget (made up of routine expenditures, developmentbudget and foreign aid).

- 25 -

rate can be sustained. Using assumptions about incremental production whichare similar to those used in recent Bank appraisals, estimates can be made ofthe additional impact of the potential future irrigation projects. It isestimated that the development of all the areas indicated in Table 3.1 wouldresult, at full development, in an annual incremental production of 18.7million tons of paddy (see Table 3.3 and Annex 9). The time required beforethis production level can be achieved will to a large extent be influenced bythe composition and magnitude of the annual irrigation development program./1

(b) Java versus the Other Islands

3.23 At present Java accounts for about 60% of all irrigated area andabout 60% of all rice production. On the other hand, Java has about 66% ofthe total population and is a net importer of rice. A question raised bythese observations is whether production of rice on Java can be increased byfurther intensification of irrigation development. Table 3.3 shows that outof an estimated incremental paddy production resulting from rehabilitationand development of all potential projects (18.7 million tons) only about0.9 million tons (5%) are expected to come from projects on Java. In additionto these production increases there is the possibility that the "simple"village irrigation systems could be upgraded to technical or semi-technicalstandards and consequently raise the productivity of these systems. Thereare probably some 500,000 ha of village systems which could be upgraded (seeAnnex 2, Table 2). On the islands outside Java there are also probably atleast 500,000 ha of village systems which could be upgraded. Assuming anincremental yield resulting from the upgrading work of one ton paddy per ha,then the total additional production which can be expected from rehabilitation,new development and upgrading of irrigation systems on Java is about 1.4million tons of paddy, about 7% of the potential for all of Indonesia. Thisis naturally only a very approximte estimate and probably does not fully takeinto account the scope for production increases from further intensificationof production leading to both the expansion of area harvested and increasesin yield.

/1 The issues surrounding the prospects for the expansion of the productionof all food crops on both irrigated and dry land areas in Indonesia areto be taken up in more detail in a separate sector study (Supply Prospectsfor Major Food Crops). That study will also devote more time than has beenpossible here to the factors which have influenced the growth in foodcrop output. Its conclusions should provide further guidance on theoptimum size and content of the future irrigation program. Since alarge proportion of the total labor force in Indonesia is employed inirrigated agriculture, the projected increases in rice production arealso relevant to employment prospects. A study on employment is currentlybeing prepared in the Bank.

- 26 -

Table 3.3: ESTIMATED INCREMENTAL PADDY RICE PRODUCTION FROMPOTENTIAL IRRIGATION DEVELOPMENT /a

Type ofirrigation Otherdevelopment Java Islands Indonesia

---------------- million ton paddy ----------------

GravityNew development 0.65 15.45 16.10Rehabilitation 0.14 0.46 0.60

Subtotal 0.79 15.91 16.70

Swamp and tidal development - 1.92 1.92Groundwater 0.07 - 0.07

Subtotal 0.86 17.83 18.69Upgrading /b 0.50 0.50 1.00

Total 1.36 18.33 19.69

/a See Table 3 in Annex 9 for assumptions used in arriving at these estimates.Some columns and rows do not add because of rounding. Although noallowances are made for losses after harvesting due to poor storage,pests and diseases in estimating the totals in Annex 9, the incrementalavailability is not likely to be significantly affected. It should beemphasized that the estimates in this table do not include the productionexpected to result from projects currently in the design or constructionphase.

/b Upgrading of simple village systems to semi-technical or technical standards(see para. 3.23).

3.24 It is apparent that Indonesia will increasingly need to rely on theislands outside Java to provide the base for major increases in rice produc-tion. The question facing the GOI, however, is the extent to which develop-ment activity in the short term should be allocated between Java and theOther Islands. A definitive response to this question will depend on anumber of factors including the Government's regional development objectives,transmigration planning, project preparation, infrastructure development andthe expected economic and social benefits from the projects in differentlocations. The mission was not in a position to undertake the analysis andform the judgements required to reach conclusions on these issues. However,it is the mission's view that a balanced program of irrigation developmentin both Java and the Other Islands will be feasible in the longer term,but it is likely that in the short term greater emphasis may need to be givento projects on Java because it is there that many projects have already beenprepared and consequently can be rapidly implemented. In addition, it is the

- 27 -

mission's judgment that further intensification, and "fine tuning" andupgrading of irrigation systems and improved tertiary development on Java willcontribute rapidly to increasing food crop production. Furthermore the staffwithin the DGWRD have acquired considerable skill in this kind of development;and finally, basic infrastructure and services are either available or can beimproved relatively simply./l Nevertheless, there is an urgent need forproject planning and preparation in the islands outside Java to proceedrapidly in order that the costs and benefits of the potential projects can beascertained (See comments made earlier in paragraphs 3.09 to 3.12).

(c) The Choice of Irrigation Development Program

3.25 The GOI's choice of the type of irrigation development programwill depend not only on decision with respect to the regional priorities forinvestment as discussed above, but will also be influenced by factors such asthe overall contribution to national income of different combinations ofprojects in a total program and the available budget. While there are manyissues to be considered before a choice is made, the economic returns frompotential projects will figure prominently in any consideration of the mostappropriate program./2

3.26 The results of Bank appraisals of irrigation projects in Indonesiasuggest that, from the point of view of the return on investment, rehabilita-tion projects show a higher economic rate of return than new developments.Rehabilitation projects take advantage of sunk investment while usuallyrealizing substantial incremental benefits from restoration work on existingstructures and distribution systems. Moreover, rehabilitation work requiresless engineering investigations than new developments and therefore is lessdemanding in terms of staff resources, and by virtue of the fact that theirrigation systems are already in operation many investigations such as soilsurveys can often be omitted from the preparatory work. Finally, rehabilita-tion projects can usually proceed faster and result in more rapid increasesin production than most new developments. It is for these reasons that theGOI has concentrated on rehabilitation in Repelita I and II and it is themission's view that the Government should continue to upgrade the rehabilitatedsystems through improvement and construction of tertiary distribution systems.

3.27 The economics of different types of new developments such asconventional run-of-the-river projects, tidal land reclamation and largestorage-based developments will depend on the circumstances of the partic-ular project. On the basis of the analyses discussed in earlier paragraphsof this chapter, all three types of development are likely to show asatisfactory economic rate of return. Tentative cost estimates for tidalland development are significantly less than the cost at which such a

/1 See Annex 4 for a discussion of differing viewpoints on the justifi-cation of tertiary canal development.

/2 The need for the DGWRD to conduct a continuing analysis of the optimumirrigation development program will be discussed in more detail in Chapter 4.Increasing pressures on the total budget make such an analysis an urgent matter.

- 28 -

development is expected to show an economic rate of return of 15%, and it istherefore tempting to conclude that from an economic point of view tidal landdevelopment is the preferred investment strategy. While this may turn out tobe correct, there are at present a sufficient number of problems and unresolvedquestions associated with tidal land development to make any estimate of thecosts and benefits speculative at this stage. However, development optionsare not only a function of costs and returns, they must also take account ofthe natural resources available, budget limitations and the wider developmentand social objectives. In some circumstances only conventional irrigationsystems will be feasible and may well show higher rates of return than tidalland development. Nevertheless the possibiilty of a sound rate of return fortidal land development may be attractive to the Government because theseareas offer substantially greater scope for the settlement of transmigrantscompared with other potential projects. Also, questions of title to landin the service area usually present fewer problems than elsewhere.

(d) Budgetary Implications of Irrigation Development

3.28 The implications of future irrigation development on the Govern-ment's budget will depend on the types of projects chosen and the rate atwhich future irrigation development is planned to proceed. Estimates of thetotal capital cost of all identified future potential irrigation and waterresource developments could be of the order of $14,400 million (see Table3.4).

3.29 The rate at which the future potential irrigation development canbe achieved is a matter of judgment, but depends mainly on the implemen-tation capacity of the DGWRD and the size of the budget. Chapter 4 of thisreport will discuss the organization and management of DGWRD. The mainconclusion of that discussion is that the increasing scope, diversity andwider regional distribution of the future were of the DGWRD call for asubstantial reorganization of its administrative structure. The missionconsiders that if the reorganization outlined in Chapter 4 is achieved thatthe DGWRD should be able to manage the new development of 100,000 ha p.a. ofgravity irrigation systems and 50,000 ha p.a. of swamp and tidal land develop-ment. Such a rate of annual achievement would result in all identifiedprojects being completed in about 30 years. The cost of this developmentwould, in 1978 prices, be about $375 million. If this scale of new develop-ment were achieved annually it would, depending on the rate of growth of riceproduction without these projects, be expected to sustain the rate of growthof rice production in Indonesia at between 1.4% and 4.2% p.a., at,least untilthe year 2000. Table 3.5 presents the results of these calculations togetherwith estimates of the implications for the budget and rice production if theannual development activity fell below and increased above the expectationsof the mission, assuming a restructured DGWRD. (Details of the basis forthese estimates are discussed in Annex 9).

- 29 -

Table 3.4: ESTIMATED COST OF POTENTIAL FUTURE IRRIGATION DEVELOPMENT

Types of irrigation Average unit Estimated totaldevelopment /a Area capital cost /b capital cost /b

(million ha) ($/ha) ($ million)

Gravity- New development /c 4.02 3,000 12,060- Rehabilitation 0.30 1,500 450

Swamp and tidal development 1.28 1,500 1,920

Total 5.65 14,430

/a Groundwater development is not included in this table since informationon costs is very uncertain.

/b Mid-1978 prices, excluding costs associated with the transport andsettlement of transmigrants. These costs also do not include overheadcosts, but include an allowance for land clearing and levelling whereapplicable (see Annex 10, Tables 10, 11 and 12).

/c Some would include storages. These would be of varying sizes, theaverage unit capital cost assumed would allow for some storages.

- 30 -

Table 3.5: ESTIMATED IMPLICATIONS OF SUGGESTED FUTUREIRRIGATION DEVELOPMENT PROGRAM

Mission's Mission's Mission'slow suggested high

Item Unit expectations expectations /a expectations

Projected new development- Gravity ha/yr 80,000 100,000 120,000- Swamp and tidal ha/yr 40,000 50,000 60,000

Total ha/yr 120,000 150,000 180,000

Cost of development /b $ m 300 375 576

Additional paddy production ton/yr 380,000 475,000 570,000

Average annual productiongrowth rate for Indonesia(1978-2000)- asuming zero growth rate

without projects % 1.4 1.7 2.0- assuming 3% growth ratewithout new projects % 3.8 4.0 4.2

/a This suggested expectation assumes a major reorganization, training andstaff development program for the DGWRD.

/b These are only the costs (1978 prices) of the new development indicatedin the table. There would be additional annual costs associated withriver and flood control and overheads. For details see Annex 9.

3.30 The Government's options for irrigation development are more variedthan are presented in the preceeding discussion, however, the results of theanalysis raise a number of significant issues for the GOI. For example, itis expected that the future annual rate of growth of demand for rice will beabout 4%; if this is to be met then it is reasonably certain that, given thecomparatively small importance of dry land rice production and its slow rateof growth, the irrigation development required to meet the growth rate indemand would need to be about equal to the mission's suggested expectationsas summarized in Table 3.5. The annual budget required for that scale ofactivity, together with river and flood control ($135 million) and overheads($125 million),/1 is likely to be about $635 million p.a. in 1978 prices.Such an annual budget would require an increase of about 20% over the estimated

/1 Assuming that the amount required annually for river rehabilitation andflood control is about the same as the current budget allocation. Over-heads are assumed to be 25% of total costs (see Table 2.4 and Annex 11).

- 31 -

current (1978/79) budget of the DGWRD (see Table 2.4). The mission suggeststhat if the GOI wishes to sustain a growth rate of rice output at about 4%per year, then a phased increase in the total development budget allocationfor irrigation should be given serious consideration.

3.31 Two important issues arise from such a substantial increase inirrigation development. The first is whether the enlarged program willbe supported by a comparable increase in supporting services (extension,credit, marketing facilities) to farmers. In addition, it will also benecessary to provide infrastructure such as communications, roads and com-munity facilities in newly developed areas. The mission did not make anestimate of the funds and staff required to provide the investment andservices necessary to complement the irrigation development; this can only bedone when projects have been designed. The types of infrastructure will needto be assessed as will the time at which they need to be available. Both ofthese matters will require concerted coordination between the various institu-tions responsible. A further increase in the funds required for the expansionof irrigation raises the whole question of the allocation of developmentfunds to agriculture and irrigation (the share at present is about 19%). Inpassing the mission would also wish to stress that any increase in thesupport for irrigated production should not be at the expense of support fordry land production. These choices and demands on resources are matterswhich must be addressed by the GOI in the context of an analysis of investmentpriorities for Indonesia as a whole. The second important issue is one ofthe capacity of the DGWRD to undertake an expanded program; this will beaddressed in Chapter 4.

Proposed Irrigation Development under the Third Five-Year Plan (Repelita III)

3.32 At the time this report was prepared, irrigation development plansfor Repelita III were not available. However, it is clear that irrigationdevelopment has the strong support of the GOI and that the magnitude of thefuture program of planning, design and construction activity will be mainly afunction of the capacity of the DGWRD to undertake a program. In the absenceof official Repelita III proposals, the mission has made estimates of likelyCentral Government development expenditures suggested by the analysis offuture investment activity (paras. 3.28-3.30). The suggested program isgiven in detail in Annex 11 and reflects the mission's judgment regarding thelikely order of mag'nitude of a program which the DGWRD could accomplish withthe type of reorganization suggested in Chapter 4. It abstracts from thebudget constraints on irrigation development and is only suggested as a basisfor discussion.

3.33 In summary, the mission estimated that, in addition to projectscarried over from Repelita II,/2 the DGWRD should be in a position to nearly

LI Perhaps it should be emphasized here that a 4% growth rate in productionin the face of a projected 4% growth rate in consumption will not closethe gap between domestic supply and demand.

/2 It is difficult to estimate what this would be, but it may involve about500,000 ha.

- 32 -

complete about 95,000 ha of gravity irrigation systems and bring a further190,000 ha to an advanced stage during the five-year plan period. In addition,it should be possible to almost complete the development of an additional50,000 ha of swamp and tidal lands and bring a further 100,000 ha to anadvanced stage. Finally, river rehabilitation and flood control as well asfurther rehabilitation, "fine tuning" and upgrading of existing irrigationsystems should be continued. When the estimated costs of all these activitiesare added to those of the ongoing activities carried over from Repelita II,the annual budget (including overheads) is likely to be about $500 million inthe first year and about $635 million in the fifth (all in terms of 1978prices). This compares with a likely total expenditure by the DGWRD during1978/79 of about $520 million.

Projected Bank Group Involvement in Irrigation Development

3.34 Annex 12 provides a tentative list of the projects for which theDGWRD has requested the Bank's financial assistance. The list contains amixture of large- and medium-size projects, new gravity developments, reha-bilitation and tidal reclamation. A striking feature of the programis that most projects are located on Java. To the extent that most ofthe projects identified in Annex 12 represent a continuation of projectsalready launched with Bank Group assistance on Java this is not surprising.However, since the Government has identified regional development outsideof Java and transmigration as major policy objectives, it is not immediatelyapparent why more projects could not be proposed for Bank assistance outsideJava. While the addition of such projects to the list would increase thecost of the total program, the mission recommends that it is an appropriatetime to seriously consider an increasing commitment of Bank Group funds forfuture irrigation development in order to assist the GOI to increase the rateof growth of food grain production and promote regional development.

3.35 The second matter which stands out from the "pipeline" of BankGroup-assisted projects is the absence of simple irrigation projects in thesuggested program. Perhaps other agencies or institutions are alreadyplanning to give assistance here./1 However, in the light of the Government'semphasis on the widespread development of simple irrigation systems, themission recommends that the Bank discuss with the GOI the manner in which itcan assist with these projects.

/1 USAID is considering extending its lending for "Sederhana" projects (seeAnnex 2).

- 33 -

4. ORGANIZATION AND MANAGEMENT OF DGWRD

4.01 The Directorate General of Water Resources Development (DGWRD) hasearned the reputation in recent years for being one of the most active andprogressive government institutions in Indonesia. It was established in itspresent form in 1966 and has been at the center of irrigation development; itis also the institution responsible for executing Bank Group-assisted irriga-tion projects.

4.02 There is no question that the progress which has been made inirrigation development in the last five to ten years has been due to thesuccess of the DGWRD and the energy and skill of its senior staff. However,the mission perceived that the DGWRD is facing some problems which need tobe resolved at the earliest opportunity. The mission concluded that theDGWRD was already overloaded in terms of its capacity to undertake additional,and in particular, a wider variety of irrigation and water resource develop-ment projects in widely dispersed regions of Indonesia. This conclusion wassupported by senior government officers both inside and outside DGWRD. Inaddition, delays in implementation resulting in substantial shortfallbetween development targets and achievements (see Chapter 2) provide furtherevidence that the administrative and executing capacity of the DGWRD iscurrently overstretched. To the extent that these shortfalls became arecurrent event it must also be assumed that forward planning was inade-quate. It is the mission's view that a change in the structure and staffingof the DGWRD would achieve important improvements in its management andimplementation capacity and also provide scope for expanding and varying itsactivities. The mission also concluded that apart from a change in thestructure of the organization there was a need to give much greater attentionto planning and programming activities, staff training and project monitoring.These matters will now be discussed in more detail.

Structure of the DGWRD

4.03 The DGWRD is one of the larger Directorates General within theMinistry of Public Works (MPW). It is responsible for the rehabilitation andconstruction of those irrigation systems financed by the central government.In undertaking this task it will frequently use the facilities and servicesof the Provincial Public Works offices or retain outside contractors. TheDGWRD is organized along functional lines. The main functions are executedby six directorates and a number of executive bodies (see Figure 4.2). Thedirectorates of Irrigation, Rivers and Swamps which have the main operationalresponsibilities, are themselves organized internally on similar functionallines (see Figures 4.5, 4.6 and 4.7). The assistant Director General isresponsible for a range of administrative activities (see Figure 4.3), whilethe directorates of Planning and Programming, Logistics and Hydraulic Engineer-ing are responsible for support activities of various kinds (see Figures 4.4,4.8 and 4.9). In addition to the six directorates, four special executivebodies have been established to cope with specific tasks which cannot be accom-modated within the normal operational activities of the existing directorates.Increasingly, a situation is arising in which it has become necessary to establish

- 34 -

special executive bodies to cope with the increasing work load of theDGWRD. The establishment of these bodies is convenient since no change inthe basic structure of the organization is required and they can thereforebe created by authority of the Minister. Any change in the basic structureof Government institutions requires presidential approval.

4.04 The executive bodies have a number of features in common but arealso different in some respects. They all have separate administrations andkeep separate accounts, they may have working conditions for employees whichare different from other employees in the DGWRD and are formally directlyresponsible to the Director General. The main difference between the executivebodies is that for some (for example PROSIDA) the General Manager is not aworking staff member of one of the six Directorates. Others (of which P4S isan example) have General Managers who are at the same time directors ofDirectorates. In the case of P4S the General Manager is also the Director ofthe Directorate of Swamps and as a result there is scope for the activitiesof the executive body to be integrated with those of the Directorate.While the creation of executive bodies has advantages (for example they canbe rapidly established, are simple mechanisms for increasing the implemen-tation capacity of the DGWRD and are easily identified by those inside andoutside the Government by virtue of their specific responsibilities) it alsopresents some problems which will now be discussed.

4.05 One of the executive bodies, PROSIDA, was established to executeBank Group-assisted projects (see Annex 4). PROSIDA has matured into acompetent organization, but the benefits arising from its establishment andultimate success have not been achieved without some cost. For example, allexecutive bodies are formally responsible directly to the Director-General,consequently the person in that position now has direct line administrativeresponsiblity for six directorates and a number of executive bodies. Themission considers that ultimately this structure of responsibility will betoo heavy a load for one person to carry, but more importantly, it does notallow the Director General to give enough attention to the broaderpolicy issues associated with irrigation development./l A second concernwith the establishment of special executive bodies is that they tend tobecome separated from the main stream of activities and are further separatedfrom the rest of the Directorate General by virtue of their different andinvariably better salaries and working conditions. Of course the nature oftheir work, including the need to achieve higher standards than other partsof the DGWRD, continuing contact with international and bilateral institutionsand the need to conduct business according to different procedures and in aforeign language, are all valid reasons why the terms of employment inexecutive bodies can logically be better than for the rest of the DGWRD.

/1 To the extent that the General Managers of executive bodies are also theDirectors of Directorates this issue is not relevant; nevertheless theincreasing number of executive bodies means that the load will at somestage be passed on to the Director General.

- 35 -

However, the other staff in the DGWRD are increasingly being asked to achievethe same standards and become more involved with similar work. Many are alsoexecuting large projects, partly financed from outside sources, and hence theneed to have special executive project bodies will probably become lessobvious. The only persuasive argument which remains for the retention ofthese bodies is that they can be easily established to cope with an expandedworkload. These issues have not gone unnoticed at the staff or manageriallevel in the DGWRD and the mission detected some general concern regardingthe long-term impact of a continued separation between special executivebodies such as PROSIDA and the remainder of the DGWRD.

4.06 At this point another institution involved in irrigation develop-ment, namely the Jatiluhur Authority, should be mentioned (Figure 2.1). ThisAuthority was established by the Government in 1970 as a semi-autonomousorganization with the responsibility of managing the multipurpose developmentof the Jatiluhur region based on the Jatiluhur reservoir. It is governed bythe Minister of Economy, Finance and Industry (MEFI) and its operations aremanaged by a Board of Directors. The MEFI, in guiding the Authority andsetting its policies for Jatiluhur development, is assisted by a MinisterialCouncil made up of the Ministers of Public Works, Mining and Energy, HomeAffairs, Finance and Agriculture. It is through this mechanism that theDGWRD has a very close involvement with the activities of the JatiluhurAuthority which has some 260,000 ha of irrigated land under its control.

4.07 The DGWRD has an immense program of activities spread over a largenumber of islands which stretch for about 3,000 miles. Although it has asubstantial staff of its own, it relies heavily on assistance from consul-tants. The total professional engineering staff of the DGWRD is about 1,170at present (see Annex 8, Table 5), but many are inexperienced and hence themanagement has found it convenient to employ consultants for various pur-poses. Many of these consultants are involved in activities which in thelong run should be undertaken by DGWRD staff. The mission was not competentto judge to what extent there should be a dependence on outside expertise,(no detailed data was available to the mission on the growth in dependence onconsultants in relation to the growth and increase in complexity of theDGWRD's work) but it did view with concern the fact that much of the planningof future work involves the continued use of consultants (see for example,the allocations for consultants in Irrigation X and XI). A reduced dependenceon consultants would mean increasing the total DGWRD staff and devoting moreresources to staff training and development. However such a move should, inthe missions's view, be made in the context of a reorganization of thestructure of the DGWRD.

4.08 The present functional basis for the organization of the DGWRD,while probably appropriate when most irrigation activities were concentratedon Java, is less efficient when considered in the light of the future widerrange of activities in the Other Islands. The mission is aware of the factthat the functional basis of organization in the context of centralizedstructure of administrative responsibility is very much a traditionalorganizational framework in Indonesia. However, from various discussionsthe mission concluded that the management and coordination of DGWRD activi-ties at the regional level was becoming increasingly difficult and, if notimproved, was likely to lead to a breakdown in the efficiency of the

- 36 -

organization. ln addition, it is a large country where distances are great.Communications, while improving, are not yet well developed and it is ineffi-cient to have directors and their staff from headquarters visiting the sameareas, each to supervise his own particular sphere of work and needing toestablish his own relationship with Public Works officers in each province.Finally, the expanding scope and complexity of irrigation development make itessential that there be maximum coordination between the various forms ofdevelopment to ensure that the regional exploitation of water resources iscoordinated. The mission has therefore concluded that the current, andparticularly the future, responsibilities of the DGWRD would be more efficientlyachieved if there could be a reorganization of the institution on the basisof a regional division of responsibilities and duties.

Suggested Reorganization of DGWRD

(a) Revised Structure

4.09 A revised structure for the DGWRD recommended by the mission isdiscussed in Annex 7 and outlined in Figure 4.12. The suggested structuralrearrangement involves dividing the operational activites of the DGWRD intofour regions of responsibility. Each region would have a directorate ofworks which would be responsible for all water resource development withinthat region. The revised structure envisages that each of these directorateswould be established along the lines of PROSIDA as it is at present (seeFigure 4.10). In addition to the directorates for each of the four regionsthere would be a directorate of planning, programming and design (see Figure4.13) and a directorate of technical services. The Director General would beaided by an Assistant Director General who, apart from helping him with thegeneral management of the DGWRD would also be responsible for a number ofadministrative matters. The suggested reorganization assumes that the headoffice for each directorate would remain in Jakarta, within the centralgovernment structure. However, there would be a significant reorganizationof responsibilities within the central office of the DGWRD./1

4.10 The mission suggested to the Director General of the DGWRD that hiswork would be further assisted if he could have at his disposal two DeputyDirector Generals, one responsible for project implementation, whilst theother would be responsible for planning and programming, technical servicesincluding hydrology, hydraulic research, design criteria and constructionstandards, logistics, operation and maintenance and training. However, dis-cussions of the draft proposals with the Director General indicated that theremay be substantial problems in the establishment of Deputy Director Generalsin the organization because of existing government rules and proceduresrelating to the structure of government institutions. The mission's conclusionswere therefore modified to a certain extent. The suggestions made in this reportwere discussed with the Director General who had some reservations regardingthe regional allocation of responsibilities on the basis that expertise in

/1 The broad thrust of these recommendations will need to be considered inrelation to the Government's regional development planning. A Bankreport which is relevant to this issue is Report No. 502-IND, "A Frameworkfor Regional Planning in Indonesia," August 1974.

- 37 -

one field of work should be kept within the same organizational unit. Heexpressed a preference for modified approach, namely splitting the largeDirectorate of Irrigation, perhaps on a regional basis, and absorbing PROSIDAin such a change.

(b) Planning, ProgramminR, and Design

4.11 The Directorate of Programming and Planning would be reorganizedto become the institution's overall planning body; it would coordinate allsurveys and investigations, planning and programming, design and procurement.In addition, it would be responsible for coordinating the planning ofoperation and maintenance activities of the proposed directorates of works.In general the mission concluded that the management of the DGWRD would bemade more effective if more resources were devoted to planning. In particularthe DGWRD should aim in the long run to be in a position to undertake mostidentification and feasibility studies and evolve an optimum developmentprogram with less involvement of outside consultants. While the DGWRD isalready giving much more attention to planning and programming than it hasin previous years, the mission's concern was that these functions werebeing diluted by other activities; for example, the administration of thedevelopment budget, and responsibility for groundwater development (seeFigure 4.4).

4.12 The wider scope and greater complexity of future irrigationdevelopment calls for a much more intensive planning and programming effortthan in the past when most of the DGWRD's activities were concerned withrehabilitation of existing systems. In the mission's view more staffresources should be devoted to evolving longer term irrigation developmentplans for Indonesia. This planning should be on a regional basis and shouldbe integrated with the ongoing river basin studies. This planning roleshould logically be carried out by DGWRD staff; they will need to haveanalytical competence and sufficient experience to weigh the relative import-ance of various policy objectives and regional priorities. While the missionaccepts the view that consultants can and should help in the planning process,it considers that a much greater involvement by DGWRD staff is of crucialimportance in order that the outcome of planning studies can, where appro-priate, be expeditiously incorporated in the overall programming of futuredevelopment activity.

4.13 In addition to the activities mentioned in the previous paragraph,the mission considers that the DGWRD should become more directly involvedin the preparation of basic data. In particular, coordinating the collectionof economic, soils and hydrological data for project preparation purposesneed to become part of the responsibility of the planning and programmingdirectorate (see Annexes 7 and 9). A suggested structure for the directorateof Planning, Programming and Design is shown in Figure 4.13.

(c) Project Implementation

4.14 The major role for each suggested regional directorate of workswould be project implementation. Each directorate would have within it a

- 38 -

number of subdirectorates which would be responsible for project implemen-tation in the main functional areas appropriate to the region. For examplethere would probably be separate subdirectorates responsible for gravityirrigation, tidal and swamp development and groundwater development. As canbe seen from Figure 4.14 it is suggested that each of the directorates ofworks would also have subdirectorates responsible for technical support,logistics and operations and maintenance as well as a subdirectorate undera chief of staff responsible for technical, financial and general adminis-tration.

(d) Technical Services

4.15 The suggested Directorate of Technical Services would be basicallyresponsible for the same activities as the present Directorate of HydraulicEngineering. It would be engaged in basic research and investigations andwould act as an advisory body to the operational directorates on technicalissues. This directorate should, in the view of the mission, have itsheadquarters in Bandung as at present. In addition to its current responsi-bilities it would also become responsible for establishing guidelines forstandards to be achieved in irrigation works and for training.

Training

4.16 The responsibility for training in the DGWRD rests with the Personneland Organization Divison of the Secretariat. In addition, there is the Centerfor Education and Training (PUSDIKLAT) which arranges and coordinates trainingactivities for all Directorates General in the Ministry of Public Works. Theactivities of that Division, however, are limited to informal training and"upgrading" since it is not one of the institutions nominated by the GOI to beresponsible for formal training and education inside and outside the govern-ment.<! However, the DGWRD has had difficulties recruiting staff, particularlyengineers, because of the shortage of trained engineers in Indonesia andbecause salary incentives in the Government are not as attractive as formost positions in private enterprise. It is therefore placed in the positionof needing to provide informal in-service training for most of its staffafter they are recruited. Also for some years now the DGWRD has arranged forpre-service training through the award of various scholarships at a number ofeducational institutions. There also exists a three-year in-service courseon water resources at the Public Works Department Academy in Bandung./2On-the-job training has been promoted and many of the DGWRD staff are assignedto work with consultant engineers during the course of their contract work onvarious projects. In addition, an important component of the trainingprogram is overseas training for qualified staff at selected universities.

/1 Presidential decree No. 15, 1974 states that formal training for governmentemployees be the responsibility of the National Institute of PublicAdministration; training of nongovernment employees would be the responsi-bility of the Department of Manpower; and general training and educationis the responsibility of the Department of Education.

/2 A program financed by the Ministry of Public Works in the Institute ofTechnology at Bandung.

- 39 -

4.17 These informal and formal training activities (discussed in moredetail in Annex 8) have no doubt been of benefit to the execution capacity ofthe DGWRD. However, the mission was left with the impression that much ofthe current training is not achieving the results expected and that theplanning of training programs in recent years has not always been done with aview to the future needgs of the organization. For example, staff are sentoverseas to a variety of courses and which have a wide range of content,location and duration. Those who graduate from these courses are oftenplaced in positions where their training cannot be fruitfully used. One ofthe reasons for this appears to be that unfortunately, selection for overseastraining is regarded often as an award for past services rather than as aspecific means of upgrading skills for future responsibilities.

4.18 The DGWRD needs to ensure that overseas courses meet its priorityneeds, and it would be useful to develop closer links with some overseasinstitutions - such as has already been done with Delft /1 - so that the coursescan be tailored to the needs of DGWRD staff. One of the recommendations ofthe Bank's Irrigation Program Review (1975) - short visits to Malaysia andother neighboring countries by middle level staff - has had limited successpartly because lack of forward planning has prevented these visits from beingfocused on specific practical problems. Further the mission doubts that thetraining of staff by assigning them as counterparts to consultants has alwaysbeen productive for either the consultants or the DGWJRD staff.

4.19 Manpower training and staff development is a difficult task,particularly within an institution which has been under a great deal ofpressure to undertake and complete projects. Staff have not always beenmade available for training courses. In addition, adequate financial andstaff resources have not always been made available for the training activi-ties. Only recently have the training needs of the DGWRD been systematicallysurveyed and discussed with senior DGWRD management. As a result of thesediscussions, training programs are now being formulated and a specific itemis allocated to training in the 1978/79 DGWRD budget. These recent stepsreflect a realization by senior management of the importance of training;however, the mission is of the view that current initiatives may not go farenough. The mission therefore recommends the following:

(a) The DGWRD should define its responsibilities for training vis-a-visthe training activites undertaken in the Center for Education andTraining (PUSDIKLAT) in the Ministry of Public Works and ElectricPower.

(b) The DGWRD should review the long-term demand for and supply oftrained staff in different specialities.

(c) The DGWRD should consider the establishment of a standing committeeto review training plans and programs.

/1 "Technische Hogeschool te Delft" (Technical Institute in Delft) in theNetherlands.

- 40 -

Project Monitoring

4.20 At present the Director-General cannot easily or quickly obtain anup-to-date status report on any one of the many irrigation projects under hiscontrol. Status reports are prepared for supervision missions from the Bankand other lenders at regular intervals; in addition a system of annual reportingdoes exist./L However, no readily accessible record of the progress beingmade in any chosen project is available to the management of the DGWRD. Thesuggested reorganization of the DGWRD (discussed in more detail in Annex 7)proposes the establishment of a separate division in the Office of theAssistant Director-General to be responsible for the monitoring of projects.

4.21 A system of regular information supply should be provided by eachof the proposed Directorate of Works to the project monitoring division whichshould have available to it adequate computing facilities for storing andprocessing the information. A well-organized monitoring system should pro-vide a timely'warning to senior management of difficulties or delays in pro-jects. In the future, when projects are completed it might also be used tomonitor the supply and availability of inputs and the production increases indifferent projects./2 An additional use for the project monitoring activitycould be a continued review of operation and maintenance activity in completedprojects. The scope of this monitoring activity can be built up gradually ascomputor facilities and experience is acquired. At no time should it become amanagerial burden for the Assistant Director General; in order to ensure thisthe various Directorates should become responsible for data input.

/L Recently a "Control and Monitoring of Foreign Aid Projects Unit" wasestablished in the Foreign Assistance Administration Division.

/2 Bank Loan No. 1100 (Irrigation VI) included a component to finance themonitoring of benefits from the first six irrigation projects, andfurther provisions for monitoring subsequent projects were included inthe loan agreements for later projects. While that study has not pro-duced any results as yet, it is not suggested that the project monitoringactivity in the DGWRD should replace the benefit monitoring study, ratherit should complement it.

- 41 -

5. SUMMARY OF RECOMMENDATIONS

5.01 The mission's recommendations cover the magnitude of the futureirrigation development program, training and staff development of DGWRDpersonnel and the organization of the DGWRD.

Future Irrigation Development

5.02 The mission recommends that if the GOI intends that the growth ratein the output of rice should keep pace with the expected rate of growth inthe demand for rice:

(a) The average annual budget of irrigation development should beincreased by about 20% p.a. to about $635 million p.a. (1978prices). Such a budget should be sufficient to finance the develop-ment of about 100,000 ha of gravity irrigation p.a. and about50,000 ha of swamp and tidal land development p.a., together withriver and flood control and overheads. A program of this magnitudeshould achieve a growth rate of rice output of about 4% p.a.,ensuring that the current gap between domestic supply and demand isnot widened. Budget increases should be made slowly and in stepwith the suggested reorganization of the DGWRD (paras. 3.29 and3.30 and Annex 9);

(b) The DGWRD and the Provincial Public Works Service should placemuch more emphasis on improving the operation and maintenanceof irrigation systems at the primary and secondary levels andshould enhance the status of O&M staff (paras. 2.08 to 2.13 andAnnex 5);

(c) The DGWRD and the Provincial Public Works Service should,with the Ministry of Agriculture, continue to promote theestablishment of water user associations (para. 2.10 andAnnex 6);

(d) Soil surveys in areas identified for future irrigation developmentshould be mounted urgently (para. 3.10 and Annex 9);

(e) Any expansion of irrigation development should be complemented byimprovements in support services to farmers, although this shouldnot be at the expense of the support given to dry land agriculture(para. 3.31 and Annex 9);

(f) That serious thought should be given to maintaining the presentpace of irrigation rehabilitation and development in Java whileplanning and programming activities proceed for expanded irrigationdevelopment in the Other Islands (para. 3.23).

Training and Staff Development

5.03 The mission recommends that:

(a) The Ministry should define the respective responsibilities ofPUSDIKLAT and the four Directorates General for the planning andimplementation of training schemes (para. 4.19 and Annex 8).

- 42 -

(b) DGWRD should review its long-term manpower needs (para. 4.19 andAnnex 8). This review would take into account such factors as:

- future total manpower needs; and

- minimum training, experience and types of qualifications required.

(c) The DGWRD should review the long-term supply prospects for engineersand technicians (Annex 8). This review should take particularaccount of:

- the output from the formal education system;

- the extent to which graduates could be influenced to form the DGWRDthrough scholarships or other incentives;

- the extent to which upgrading of existing staff could provide themanpower needs;

(d) The DGWRD should review its recruitment policy (Annex 8). Thisreview should include an examination of:

- salary levels and conditions of employment as they affectrecruitment;

- the type and number of scholarships;

- the use of short-term local and overseas consultants forparticular tasks;

(e) The DGWRD should consider the establishment of a standing committeehaving representatives from within and outside the organization(para. 4.19 and Annex 8). The committee should be responsible for:

- reviewing long-term plans for all training programs;

- assessing the effectiveness of such programs;

- establishing contacts with major institutions supplying engineersand technicians for the Directorate General and, if appropriate,recommending changes in curricula;

- evolving a program for the use of existing technical talent andmake recommendations concerning funds required for writing,testing and publication of Indonesian textbooks and manuals;

- review the possibility of expanding A-V programs for juru pengairan(irrigation subforemen) to all irrigation provinces, the SPMAs andthe Ministry of Agriculture;

- consider and if appropriate draft proposals for the establishment ofa training center for DGWRD staff in conjunction with the reorganizationproposals discussed in Annex 7.

- 43 -

Organization of the DGWRD

5.04 In order to achieve these objectives the mission recommends that:

(a) The DGWRD be reorganized along regional lines having four separateDirectorates responsible for project implementation in four regionsof Indonesia (para. 4.09 and Annex 7);

(b) The Director General be assisted by two Deputy Director Generals.One should be responsible for project implementation and the othershould be responsible for planning and programming, technicalservices and general administration (para. 4.10 and Annex 7).Note: Because the mission was advised that the creation of twoDeputy Director Generals would not be possible within the guidelinesfor the structure of government organization, it recommendsan alternative; the retention of the present position of AssistantDirector General with broadly the same functions, but with theadditional responsibility for project monitoring (para. 4.09 andAnnex 7);

(c) Greater emphasis should be given to building up the planning andprogramming capacity of the DGWRD (para. 4.11 and Annex 7);

(d) All supporting technical services for the DGWRD should be withinone Directorate. In addition this Directorate should also becomeresponsible for setting standards and for training and staff deve-lopment (para. 4.15 and Annex 7);

(e) A system of regular information supply and analysis on the progressof all irrigation projects should be established, backed up byadequate computing, data storage and retrieval facilities. Aspecial project monitoring division should be set up for thispurpose (para. 4.20 and Annex 7).

- 44 -

ANNEX IPage 1

INDONESIA


Terms of Reference

Background

1. The Bank Group's lending operations for irrigation since 1969 haveconcentrated mainly on rehabilitation of existing irrigation systems whichhad fallen into a state of disrepair after many years of poor maintenance.Most of these rehabilitation activities have been on Java. The rehabilita-tion of the major irrigation systems on Java has now been either completed,is in progress or is in an advanced planning stage. In the light of thesubstantial imports of rice (expected to be about 2.5 million tons in1977-78), the Bank was concerned to know whether irrigation could contri-bute to increased food crop production, the nature and direction of theGovernment's plans for future irrigation development and the extent to whichthe Bank might assist in financing that development.

2. A related interest arose out of the assumption, based on theGovernment's regional development objectives, that future irrigation develop-ment would concentrate more on developments in the islands other thanJava and also that, as a consequence of the trend in the type of project,there would be a trend away from the rehabilitation of existing "run of theriver" systems towards construction of new irrigation development involvingeither run of the river supplies, storage or tidal land and swamp developmentin areas where clearing, drainage and leveling of new land would be a majorrequirement. It was assumed that the Bank may become involved in theseprojects in the future through its lending activities and therefore a previewof the scope and economics of these future projects was considered to beuseful for the Bank's forward planning.

3. Finally, there was concern in some quarters of the Bank aboutthe capacity of the line agency responsible for irrigation development,the Directorate General of Water Resources Development (DGWRD) to continue totake responsibility for an increasing number of Bank Group projects. Thisconcern was not stimulated by any dissatisfaction about the performance ofthe DGWRD, rather a realization that Bank Group loans, together with thosefrom other institutions as well as bilateral lending and assistance, place aconsiderable burden on a government body such as the DGWRD. One of the mainpurposes of the mission therefore was to assess the capacity of the DGWRD tocope with the foreseeable investment in irrigation in Indonesia.

Terms of Reference for Mission

4. "The main objective of the Review is to examine the prospects forand implications of future irrigation development in Indonesia. In addition,the mission should make a study of the organization and management of the

- 45 -

ANNEX 1Page 2

Directorate General of Water Resources Development with a view to assessingthe planning, implementation and operational capacity of that organization inrelation to its current tasks as well as its expected future role. Timepermitting, the mission should also review the extent and operation of pastand current irrigation development in Indonesia."

- 46 -

ANNEX 2Page 1

INDONESIA


Extent and Quality of Irrigation Development in Indonesia

1. Irrigation facilities in Indonesia are provided by a range cf insti-tutions, but most can be conveniently classified into those constructed andserviced by the Ministry of Public Works (MPW) and those which are outsidethe control of the MPWEP (usually referred to as village systems)./l Thesystems, operated and maintained by the MPW through its Provincial PublicWorks organization, dominate the irrigation picture in Indonesia.

Extent of Existing Irrigation Development

2. Public Works Irrigation Systems. Table 1 provides a summary ofthe service area of existing irrigation systems which are administered byMPW, by type and province./2 "Technical" irrigation systems are thosewhich have water supply and drainage systems which are separate and wherewater supplies are measured; they usually have permanent, well-maintainedstructures. "Semi-technical" systems have fewer permanent structures, haveonly one measurement device (usually at the major intake) and the supplyand drainage systems are not always completely separate. "Simple" systemshave no measurement devices, conveyance systems are not fully separate withthe possibility of recirculation of water. "Village" systems (see Table 1also) are classified as simple and are built and operated er.tirely by thelocal community; they fall outside the jurisdiction of the MPW. "Swampand Tidal Swamp" systems are not irrigation systems in the conventionalsense, since they usually allow little control over water supply and mainlyprovide drainage./3 According to the inventory provided by the DirectorateGeneral of Water Resources Development (DGWRD), which is the organizationwithin the MPWEP responsible for the construction of publicly financed

A1 Village systems may have been constructed by a village on a cooperativebasis, or they may have been constructed using public funds, but subse-quently managed by village organizations.

/2 It should be stressed that the areas in Table 1 are the nominal serviceareas. In some cases only a proportion of the total service areacan be irrigated at present because of inadequacies in water supplies,poorly developed reticulation systems, etc. (see para. 3)

/3 More sophisticated systems are being designed which will allow greatercontrol.

- 47 -ANNEX 2Page 2

irrigation systems, the total nominal service area of existing irrigationsystems under the control of the MPW is some 4.0 million ha. The servicearea in Java accounts for about 63% of the national total and is moreadvanced technically than irrigation areas in the Other Islands.

3. Service areas exceed irrigated area to the extent that a system hasan inadequate water supply during the wet and dry seasons, is in need ofrehabilitation, tertiary-development or on-farm development. The ratio ofirrigated area to service area provides a reasonably good measure of thecondition of existing systems; however the area actually irrigated is diffi-cult if not impossible to obtain. Nevertheless an approximate assessment ofthe quality of the service area can be made by comparing Tables 1 and 2. Inthe latter table the figures show that on the basis of estimates made by theDGWRD and the Directorate General of Food Crops (DGFC), 3.0 million ha of theservice area administered by the MPW will be eligible for production inten-sification under the BIMAS/INMAS program during the 1977/78 wet seasoncompared with a total service area of 4.0 million ha. This is not a BIMAS/INMAS target figure, but the area of irrigated land which was estimated tohave sufficiently good water control for growing high-yielding varieties ofrice with the BIMAS/INMAS packages./l

4. If the DGWRD/DGFC estimate is accurate, approximately one millionha (or 25% of the total service area) of existing "Public Works" systems arecurrently in need of augmented water supplies, rehabilitation, tertiarycanals or on-farm development. Of this area, Sumatera accounts for about420,000 ha; Java, 294,000 ha; and Sulawesi, 145,000 ha. The reasons for theinadequate quality of one quarter of the MPW service area are likely to becomplex and varied. Furthermore not all of the shortcomings in the irriga-tion systems can be considered as the formal responsibility of the MPW.For example it has traditionally been the responsibility of farmers in theservice area to construct tertiary distribution systems, although recentmoves by the Government to provide financial assistance for the constructionof tertiaries in some areas is changing the strict demarcation of formalresponsibility for tertiary construction.

5. The above analysis probably understates the need for the improve-ment of irrigation systems since no account is taken of potential croppingintensities on lands already irrigated. According to data presented inTable 3, only about 1.4 million ha of the Public Works systems are suitablefor the BIMAS/INMAS program during the dry season; this amounts to about45% of the eligible wet-season area. Cropping intensities are a functionnot only of water supplies, rainfall and water management, but also of thequality of irrigation facilities. Once all defective systems are rehabil-itated a substantial expansion of the area planted to both wet and dry-seasoncrops should be possible. Table 4 which shows the proportion of the PublicWorks service areas eligible for BIMAS/INMAS loans in the dry season of 1977and the wet season of 1977-78, indicates the extent to which there areprovincial and regional differences in the quality of irrigation systems.For the wet season Java shows one of the highest ratings with an average of

L Unpublished BPS data suggests that the total sawah area harvested inIndonesia during 1976 was about 5.3 million ha compared with the total inTable 2 of 5.5 million ha.

- 48 -ANNEX 2Page 3

about 80%, although there would appear to be considerable scope for rehabili-tation in Central Java which shows about 60% of the area as being eligiblefor the BIMAS/ INMAS program.

6. The discussion to this point has concentrated on the traditionaland widespread gravity irrigation systems. There are some 65,000 ha of tidaland fresh water swamp areas under the control of the MPW. All of theseareas are assessed as being suitable for the BIMAS/INMAS program in the wetseason, and about 50% during the dry season./l

7. Village or Nonpublic Works Systems. The extent of village irriga-tion systems which are not under the control of the Ministry of Public Workscould not be obtained. However, Table 2 shows that some 1.0 million ha ofvillage systems are eligible for the BIMAS/INMAS program during the wetseason 1977/78. In other words, village systems account for about one-quarterof the total area served by gravity irrigation systems and which are at thesame time eligible for the BIMAS/INMAS program is to be found in the villagesystems. About half of this area is found in Java.

8. Other Water Resource Developments. It was mentioned earlier thatthe extent of tidal land development under the control of the MPW wasrelatively small (about 85,000 ha). By contrast, the area of tidal land inIndonesia developed outside the jurisdiction of the MPW and eligible for theBIMAS/INMAS program is estimated to be in the vicinity of 400,000 ha in thewet season of 1977/78. Most of this area has been settled spontaneously incoastal Sumatera and Kalimantan; water management facilities are seldom morethan simple drainage systems built by the settlers. The interesting questionwhich arises is whether those areas which have not been settled spontaneouslyhave been inadvertently missed or have been rejected by these settlersbecause of doubts about the long-term productivity of some areas.

Extent of Systems Under Construction or in Design Phase

9. Table 5 summarizes the extent of ongoing irrigation developmentunder programs administered and financed by the MPW. Many of these proj-ects, which include some 1.1 million ha of new development and 0.5 million haof rehabilitation, are planned for completion during the next year or two,although most will probably be completed during the period of Repelita III.Most of the rehabilitation currently under way (66% of the total area) is onJava, while most of the new developments (again about 66% of the total area)are taking place on the Other Islands. Two much publicized components ofthe new development programs are the "Sederhana" or simple irrigation,and the swamp or tidal reclamation projects.

/1 The difficulties which the mission encountered with the data on theextent of irrigation development referred to earlier are reflected hereagain. For example the area suggested as being suitable for BIMAS/INMASin the wet season (Table 2) is greater than the total area available(Table 1). The explanation for these discrepancies is probably to befound in different definitions and the fact that it is difficult toexpect that two surveys will cover exactly the same area.

- 49 -

ANNEX 2Page 4

10. "Sederhana" Program. Primarily designed for implementation byProvincial Public Works organizations outside Java, this program was aimed atirrigation development on a small scale (no greater than 2,000 ha) and lowcost (costs have ranged between $250 and $500 per ha) leading to rapid increasesin rice production and at the same time supplementing the Government'stransmigration program by providing increased employment opportunities andregional development generally. A background paper issued by the MPWEP /1describes the program as follows:

"The Sederhana Irrigation/Reclamation Program was establishedby the Government as a means of both increasing rice produc-tion and improving the well-being of the low income segmentof the rural population. It is undertaking projects which canbe simply and rapidly executed. The Director General of WaterResources Development, Ministry of Public Works and ElectricPower was assigned this responsibility. A proposal was sub-mitted for the construction of projects with a total area of550,000 hectares, to put into Indonesia's Second Five YearDevelopment Plan (Repelita II from Indonesian Fiscal Year1974/1975 - 1978/1979), broken down by years as follows":

Indonesian fiscal year Target area Achieved area /a(April 1-March 31) ------------ (ha) ---- …-------

1974/75 40,000 39,3981975/76 60,000 49,3541976/77 100,000 56,2291977/78 150,000 69,537/b1978/79 200,000 n.a.

Total 550,000 n.a.

/a The achieved areas are drawn from Annex 2, Table 9.

/b This is a target.

11. As can be seen from the above table, development achieved has fallenshort of the target and consequently the 1977/78 target has been reduced to69,500 ha (see Table 7). Most of the Sederhana development to date hasinvolved the rehabilitation of existing small irrigation systems. Resultshave been variable depending on the effLciency and implementation capacity ofthe Provincial Public Works and the availability of suitable local contractors,

/1 "Sederhana (simple) Irrigation/Reclamatton Project in Indonesia," Ministryof Public Works and Electric Power, April 1976.

- 50 -ANNEX 2Page 5

but perhaps the most important factor has been the commitment of the localvillages where the projects are implemented. There are known to have beenoutstandingingly successful projects and at the same time some disappointingresults; as with larger projects many projects have not yet achieved theconstruction of tertiary canals and the establishment of water user associa-tions with the result that many of the systems which have been completed arenot being used efficiently. Part of the current five-year program is beingfinanced by a loan of $23.7 million from USAID, for the three years (1976/77to 1978/79) for the DGWRD to retain consultants to advise on design, training,construction, and operation and maintenance (including on-farm distribution)to ensure efficient water management. While results still fall short ofexpectations, with management at all levels still being a significant problem,it is understood that a further three-year USAID loan arrangement for "sederhana"development is being discussed.

12. It is perhaps too early to evaluate the impact of the Sederhanaprogram on the regional improvement and development of irrigation systems./1However, there can be little question that it has had a stimulating effecton the staff in the Provincial Public Works in that they have been giventhe opportunity to participate in the construction and management of irriga-tion development to a greater extent than previously. Although it is possiblethat in some provinces resources used for the Sederhana program have beendiverted from other activities related to ongoing irrigation development, theprogram has had the effect of distributing public investment in irrigationwidely between regions outside Java and, to the extent that new developmentsare built, will also assist with the transmigration program. The simple, lowcost nature of the program has attraction, particularly at a time of budgetstringency. Moreover, a greater number of farmers can be reached than mightotherwise be possible. On the other hand the poor quality of the work donesometimes because of inadequate supervision probably means high annualmaintenance costs as well as the likelihood of extensive rehabilitation ofstructures within a relatively short period of time. On balance, however, itmust be said that this is an imaginative scheme which, with the right management,has the potential for improving the welfare of farmers outside Java morequickly than some of the larger, technically more complete, but more expensiveand time consuming, irrigation schemes.

13. Tidal Reclamation. Sumatera and Kalimantan have on their coast-line at least 5 million of ha of tidal swamps. For some years now,starting with the period of Repelita I, the GOI has been reclaiming smallparts of these tidal areas with a view to establishing rice farms mainly fortransmigrants from Java. That the development of rice farming was possible inthese areas was shown by the many spontaneous settlers, mainly from Sulawesi,who established farming activities in many of the tidal areas on Sumatera andKalimantan. The tidal swamps consist of peats of varying thickness overlyingalluvial or marine sediments which support a natural vegetation which variesfrom various types of palms to substantial trees (usually secondary growth).Reclamation consists of: (a) construction of a main canal which functionsmainly as a drain connecting a tidal river with the swamp area; (b) con-struction of simple access roads usually adjacent to canals, (c) construction

/1 The USAID is currently undertaking an evaluation of the program.

- 51 -ANNEX 2Page 6

of a network of secondary canals to permit the distribution of fresh waterfrom the river by gravity at high tide and drainage into this same networkduring low tide; and (d) clearing of vegetation, land leveling settlementand cultivation.

14. Repelita I included ambitious plans for tidal development, however,progress was slower than expected. The following tables show the potentialfor development assessed-in 1974, along with achievements during Repelita Iand plans for Repelita II. It is clear that the target of 1 million ha forRepelita II will not be achieved.

Estimated Estimated Target tidalpotential of reclaimed reclamation

Location tidal swamp area during proposed forof projects development /a Repelita I Repelita II

----------- (ha) ------------------

South/Central Kalimantan 568,000 12,829 50,000West Kalimantan 180,000 2,730 25,000South Sumatera 362,000 9,827 75,000Jambi 114,500 6,802 25,000Riau 986,000 904 75,000

Total 2,210,500 33,092 250,000

/a This estimate (made by the Government when making its plans forRepelita II) is indicative only and is not based on any specificsurvey work. Other estimates of the potential area for develop-ment have also been used including a figure of 5 million ha ata seminar on Tidal Land Development in S.E. Sumatera held at FAOin Rome in November 1975.

TIDAL AREA RECLAIMED DURING REPELITA II

Location of projects 1974/75 1975/76 1976/77 1977/78…----________________ (ha) ---- …----------

South/Central Kalimantan 1,668 7,770 11,125 10,817West Kalimantan 579 4,043 9,025 7,660South Sumatera 2,068 15,492 15,640 16,560Jambi 600 7,820 3,680 9,140Riau 450 11,866 16,780 17,226

Total 5,365 46,991 56,250 61,403


- 52 -

ANNEX 2Page 7

15. The costs of tidal land development (in mid-1978 prices) havebeen in the order of $1,000-1,500 per ha for drainage, clearing and landdevelopment; in addition the costs associated with transmigration and theprovision of basic facilities for transmigrants is about $800 per ha. Withan allocation of 2 ha per family, total capital cost of settlement to theGovernment is probably between $3,600 and $4,600 per family. The dominantland use in the areas so far is paddy rice production in the wet season withpalawija crops and fruits in the dry season.

16. While there is optimism about the potential of tidal lands asa basis for increased food production and as a target area for transmigrants,a number of technical questions need to be resolved.

(a) Soils. Peat soils deeper than about 100 cm in the undrainedconditions are difficult to farm. They grow only a very limitedrange of crops and are unsuitable for paddy production. Acidsulphate soils, which are formed when the clay soils are aerated,with toxic or potentially toxic layers close to the surface(50 cm), can be farmed provided there is rigid control of the watertable.

(b) Water Control. While the maintenance of water levels in soilsis necessary to avoid the formation of acid sulphates, it is alsoimportant to avoid having water tables too close to the surfacewhich would be detrimental to most perennial crops. Salt waterintrusion does not appear a serious problem though some could beexpected during a prolonged drought. The main objective of tidalland development is drainage. In the future it may be possibleto achieve a level of technology which would permit the supply ofsupplementary water during periods of drought.

(c) Cropping Patterns. Much work is still required to determine themost appropriate types of crops and rotations of these areas.

(d) Pests and Diseases. These are serious and farmers complainthat rats are their biggest problem. This is to be expectedin areas opened up close to jungle. Some of the rice diseases,e.g., blast, arise because of adverse soil conditions.

(e) Soil Fertility. Most of the areas are likely to respond to ferti-lizers, however, research is required to determine optimum appli-cations for various crops.

17. These issues are being investigated, partly with Bank assistance./lWhile statements which refer to the vast potential of tidal lands needto be treated with caution until the problems referred to above can be

/1 Bank Loan No. 1268 provides an amount of $6.7 million for the financingof studies and the preparation of a feasibility report for tidal landdevelopment. This work is under way.

- 53 -

ANNEX 2Page 8

resolved. Nevertheless, there are known to be some areas where the problemsare minimal. These areas should be identified as rapidly as possible throughreconnaissance surveys since they offer significant potential for relativelyrapid large-scale land settlement. Tidal land development is an importantcomponent of Repelita III. Annex 12 shows that tidal land developmenthas been included in the pipeline of proposed projects for Bank financing.

ANNEX 2Table I

INDONESIA


Inventory of Existing Irrigation Systems /a(October 1977)

Gravity /bTotal

Total public SwampSemi- public works and and

Island/Province Technical technical Simple works Village /c village tidal Total------------------------------------- (ha) ----------------------------------,---

JavaW. Java /d 344,430 82,646 105,910 532,986 199,432 732,418 - 732,418Jatiluhur 213,500 38,771 45,472 297,743 /e 297,743 - 297,743C. Java 474,301 67,597 205,416 747,314 163,511 910,825 - 910,825Yogjakarta - 64,317 - 64,317 4,200 68,517 - 68,517E. Java 587,445 125,546 194,330 907,321 165,815 1,073,136 - 1,073,136DKI Jakarta 11,613 5,790 160 17,563 - 17,563 - 17,563

Subtotal 1,631,289 384,667 551,288 2,567,244 532,958 3,100,202 - 3,100,202

Bali - 44,355 8,291 52,646 51,174 103,820 - 103,820

SumateraAceh - 132,713 /f - 132,713 33,150 165,863 - 165,863N. Sumatera 57,047 40,567 38,475 136,089 95,676 231,765 3,800 235,565W. Sumatera 29,801 94,087 72,632 196,520 55,075 251,595 - 251,595Riau - 4,933 81,264 86,197 7,070 93,267 3,141 96,408Jambi 675 3,000 17,804 21,479 12,347 33,826 9,702 43,528Bengkulu 5,989 16,214 31,089 53,292 4,659 57,951 - 57,951S. Sumatera 26,549 18,315 40,688 85,552 66,040 151,592 12,445 164,037Lampung 104,198 10,343 - 114,541 19,000 133,541 - 133,541

Subtotal 224,259 320,172 281,952 826,383 293,017 1,119,400 29,088 1,148,488

Kal imantanW. Kalimantan - 8,470 2,250 10,720 10,730 21,450 5,052 26,502E. Kalimantan 1,167 200 30,143 31,510 550 32,060 - 32,060C. Kalimantan - - 2,698 2,698 - 2,698 7,632 10,330S. Kalimantan 2,323 6,514 6,135 14,972 4,640 19,612 22,438 42,050

Subtotal 3,490 15,184 41,226 59,900 15,920 75,820 35,122 110,942

Sulawes iN. Sulawesi 5,037 18,432 18,613 42,082 8,029 50,111 - 50,111C. Sulawesi 5,678 8,163 4,470 18,311 29,499 47,810 ' - 47,810S. Sulawesi 126,907 53,512 20,956 201,375 43,161 244,536 - 244,536S.E. Sulawesi 2,172 4,564 665 , 7,401 4,215 11,616 - 11,616

Subtotal 139,794 84,671 44,704 269,169 84,904 354,073 - 354,073

Nuss TenggaraW. Nusa Tenggara 63,343 51,267 37,595 152,205 10,869 163,074 - 163,074E. Nusa Tenggara - 9,803 13,860 23,663 27,627 51,290 - 51,290

Subtotal 63,343 61,070 51,455 175,868 38,496 214,364 214,364

Maluku - 1,419 - 1,419 - 1,419 - 1,419

Total 2,062,175 911,538 978,916 3,952,629 1,016,469 4,969,098 64,210 5,033,308

/a This inventory applies to service areas. All categories except "village" are under the controlof MPWEP. Table does not include swamp areas where spontaneous settlers have establisheddrainage systems.

/b Term used to cover the traditional gravity irrigation systems. Most are based on "run-of-the-river" supplies.

/c Taken from information on village systems in Annex 2, Table 2. To the extent that there arevillage systems which are not suitable for BIMAS/INMAS credit, these figures understate theservice area.

/d Excludes area under control of Jatiluhur Authority.

/e Included in W. Java.

/f Includes "simple" irrigation systems.

Source: Directorate General of Water Resources Development, Ministry of Public Works and ElectricPower, and Directorate General of Food Crops, Ministry of Agriculture

INDONESIA


Area of Paddy Land Identified as Suitable for BIMAS/INMAS ProgramWet Season: 1977-78

Paddy Area Served by Irrigation Systems Other Paddy Land Total TotalProvince Ministry of Public Works and Electric Power Village Total public Rainfed Tidal Land Swamp Land Polder Part other all

Semi- Total systems works & village Public Nonpublic Public Nonpublic water paddy paddyTechnical technical Simple public works works works works works logged land land

……------------------------------------------------------------------ (ha) ----------------------------------------------------------------------------------------

JavaW. Java 529,976 161,723 135,946 827,645 199,432 1,027,077 135,114 _ _ _ _ _ - 135,114 1,162,191C. Java 309,935 104,217 24,239 438,391 163,511 601,902 190,000 - - _ _ _ - 190,000 791,902Jogjakarta 1,200 23,166 32,032 56,398 4,200 60,598 45,069 - - - _ - - 45,069 105,667E. Java 550,400 123,100 90,685 764,185 165,815 930,000 - - - - - - - - 930,000Jakarta 5,339 2,446 - 7,785 - 7,785 6,590 - _ _ _ _ - 6,590 14,375

Subtotal 1,396,850 414,652 282,902 2,094,404 532,958 2,627,362 376,773 - - - _ ' - 376,773 3,004,135

Bali - 35,384 4,271 39,655 51,174 90,829 1,599 - - - _ _ - 1,599 92,428

SumateraAceh - 20,331 93,443 113,774 33,150 146,924 63,843 - - - - - - 63,843 210,767N. Sumatera 9,857 53,305 13,988 77,150 95,676 172,826 91,015 1,278 - _ 9,656 101,949 274,775W. Sumatera 24,706 70,281 43,593 138,580 55,075 193,655 36,115 - - - - - - 36,115 229,770Riau - 3,747 6,373 10,120 7,070 17,190 20,024 15,116 51,882 - 4,122 - 91,144 108,334Jambi 400 3,000 22,579 25,979 12,347 38,326 3,006 35,439 - - _ - - 38,445 76,771Bengkulu 8,689 11,539 29,713 49,941 4,659 54,600 -- - - - 54,600S. Sumatera 14,300 450 850 15,600 66,040 81,640 - - 49,755 - - 49,755 131,395Lampung 49,606 - 1,150 50,756 19,000 69,756 23,730 - _ - - 2,330 - 26,060 95,816

Subtotal 107,558 162,653 211,689 481,900 293,017 774,917 237,733 51,833 101,637 - 4,122 2,330 9,656 407,311 1,182,228 u

KalimantanW. Kalimantan - 3,900 7,150 11,050 10,730 21,780 56,400 107,000 93,630 - - - - 257,D30 278,810E. Kalimantan - 2,170 2,720 550 2,720 25,490 - 25,490 28,210C. Kalimantan - 13,060 13,060 - 13,060 10,399 - 55,469 - - 2,300 1,699 69,867 82,927S. Kalimantan 2,323 5,753 3,732 11,808 4,640 16,440 97,119 12,968 117,374 8,950 12,205 5,006 10,985 264,607 281,047

Subtotal 2,323 9,653 26,112 38,088 15,920 54,000 189,408 23,668 266,473 8,950 12,205 7,306 12,684 520,694 574,694

SulawesiN. Sulawesi 4,082 20,819 11,536 36,437 8,029 44,466 1,113 - - - - - - 1,113 45,579C. Sulawesi 5,706 9,716 18,050 33,472 29,499 62,971 2,392 - 450 - - - - 2,842 65,813S. Sulawesi 62,269 21,621 26,503 119,393 43,161 153,554 79,154 - - - 79,154 232,708S.E. Sulawesi 279 - - 279 4,215 4,494 - - - - - 4,494

Subtotal 72,336 52,156 56,089 180,581 84,904 265,485 82,659 450 - - 83,109 348,594

NusattenggaraW. Nusa Tenggara 61,049 42,769 31,247 135,065 10,869 145,934 30,205 - - - - - - 30,205 176,139E. Nusa Tenggara 3,750 13,088 19,785 36,623 27,627 64,250 67,372 - - _ _ _ 67,372 131,622

Subtotal 64,799 55,857 51,032 171,688 38,496 210,184 97,577 - - - - - _ 97,577 307,761

Total 1,643,866 730,355 632,095 3,006,316 1,016,469 4,022,777 985,749 75,501 368,560 8,950 16,327 9,636 22,340 1,487,063 5,509,840

Source: Directorate General of Water Resources Development and Directorate General of Food Crops.

- re

INDONESIA


Area of Paddy Land Identified as Suitable for BIMAS/INMAS ProgramDry Season: 1977

Paddy Area Served by Irrigation Systems Other Paddy Land Total TotalProvince Dept. of Public Works Village Total public Rainfed Tidal Land Swamp Land Polder Part other all

Semi- Total systems works & village Public Nonpublic Public Nonpublic .ater paddy paddyTechnical technical Simple public works works works works works logged land land-------------------------------------------------------------------- (ha) ---------------------------------------------------------------------------~-------------~----

JavaW. Java 278,971 105,906 35,580 420,457 101,458 521,915 - - - - - - 1,612 1,612 523,527C. Java 137,012 35,107 4,936 177,055 50,539 227,594 - - - - - - - - 227,594Jogjakarta 1,200 11,775 15,000 27,975 7,025 35,000 - - - - - - - - 35,000E. Java 244,865 3,100 35 248,000 2,000 250,000 - - - - - - - - 250,000Jakarta 5,339 2,446 - 7,785 - 7,785 - - - - - - - - 7,785

Subtotal 667,387 158,334 55,551 881,272 ]61,022 1,042,294 - - - - - - 1,612 1,612 1,043,906

Bali - 24,772 4,154 28,926 37,153 66,079 - - - - 66,079

SumateraAcehl - 20,331 - 20,331 6,570 26,901 - - - - - - - - 26,901N. Sumatera 8,422 39,690 7,149 55,261 68,884 124,145 91,814 - 848 - - - 11,349 104,011 228.156W. Sumatera 22,979 56,693 30,937 110,609 47,452 158,061 28,407 -- - - 28,407 186,468Riau - 2,957 2,897 5,854 6,666 12,520 12,620 - 3,370 - - - 11,950 15,990 40,460Jambi 400 3,000 12,111 15,511 4,765 20,276 - 21,468 - 23,768 45,236 65,512Bengkulu 8,689 11,539 29,713 49,941 - 49,941 - - - - - - - - 49,941S. Sumatera 8,400 - - 8,400 6,031 14,431 5,800 - - - - - 125,309 131,109 145,540Lampung 10,953 - 10,953 6,710 17,663 -- - - 17,663 17,663

5ubtotal 59,843 34,210 82,807 276,860 147,078 423,938 138,641 21,468 4, 21 £ 172,376 336,703 760,641

Sal imantanW. Kalimantan - 3,900 7,150 11,050 10,730 21,780 56,480 10,700 93,630 - - - - 160,810 182,590E. Kalimantan 181 - 180 361 240 601 2,975 - - 2,975 3,576C. Kalimantan - - 500 500 - 500 - - 17,000 - - 2,300 - 19,300 19,800S. Kalimantan 525 1,300 475 2,300 125 2,425 2,200 - 1,750 - - 17,250 25,501 46,701 49,126

Subtotal 706 5,200 8,305 14,211 11,095 25,306 61,655 10,700 112,380 - - 19,550 25,501 229,786 255,092

Sulawes iN. Sulawesi 4,082 20,819 11,536 36,437 - 36,437 1,113 - - - - - - 1,113 37,550C. Sulawesi 5,706 9,716 18,050 33,472 29,499 62,971 2,392 - 450 - - - - 2,842 65,813S. Sulawesi 40,822 25,599 30,900 97,321 40,216 137,537 199,780 - - - - - - 199,780 337,317S.E Sulawesi 278 - - 278 5,571 5,849 6,749 - - - - 1,100 - 7,849 13,698

Subtotal 50,888 56,134 60,486 167,508 75,286 242,794 210,034 - 450 - - 1,100 - 211,584 454,378

Nusa Tenggara

W. Nusa Tenggara 18,782 5,877 650 25,309 - 25,309 - - - 25,309E. Nusa Tenggara 2,750 4,413 5,445 12,608 5,700 18,308 - - _ - - _ _ _ 18,308

Subtotal 21,532 10,290 6,095 37,917 5700 43,617 - _ - - - - - - 43,617

Total 800,356 388290

217,398 1,406,694 437,334 1,844,02 8

410,330 32,168 117,048 - - 20,650 199,489 779,685 2,623,713


|a X

ANNEX 2Table 4

INDONESIA


Comparison of Public Works Service Areaand Area Suitable for BIMAS/INMAS Pro ram(Dry-season 1977 and wet season 1977/78)

Total public Area suitable for Proportion of serviceworks service BIMAS/INMAS loans area suitable for

area /a Dry season Wet season Dry season Wet season1977 /b 1977/78 /c 1977 1977/78

- --------- (ha) --------------- -------- () ---------

JavaW. Java 830,729 420,457 827,645 51 100C. Java 747,314 177,055 438,391 24 59Yogjakarta 64,317 27,975 56,398 43 88E. Java 907,321 248,000 764,185 27 84Jakarta 17,563 7,785 7,785 44 44

Subtotal 2,567,244 881,272 2,094,404 34 82

Bali 52,646 28,926 39,655 55 75

SumateraAceb 132,713 20,331 113,774 15 86N. Sumatera 136,089 55,261 77,150 41 57W. Sumatera 196,520 110,609 138,580 56 71Riau 86,197 5,854 10,120 7 12Jambi 21,479 15,511 25,979 72 /aBengkulu 53,292 49,941 49,941 94 94S., Sumatera 85,552 8,400 15,600 10 18Lampung 114,541 10,953 50,756 10 44

Subtotal 826,383 276.860 481,900 34 58

KalimantanW. Kalimantan 10,720 11,050 11,050 /a /aE. Kalimantan 31,510 361 2,720 1 9C. Kalimantan 2,698 500 13,060 19 /aS. Kalimantan 14,972 2,300 11,808 15 79

Subtotal 59,900 14,211 38,088 24 64

SulawesiN. Sulawesi 42,082 36,437 36,437 87 87C. Sulawesi 18,311 33,472 33,472 /a /aS. Sulawesi 201,375 97,321 119,393 48 59S.E. Sulawesi 7,401 278 279 4 4

Subtotal 269,169 167,508 180,581 62 67

Nusa TenggaraW. Nusa Tenggara 152,205 25,309 135,065 17 89E. Nusa Tenggara 23,663 12,608 36,623 53 /a

Subtotal 175,768 37,917 171,688 22 98

Malaka 1,419 - - - -

Total 3,952,629 1,406,694 3,006,316 36 76

/a From Table 4.

/b From Table 3.

/c From Table 2.

- 58 -

ANNEX 2Table 5

INDONESIA


Inventory of Systems in Design Stage or Under Construction /a

(October 1977)

Gravity /b SwampNew and Ground-

Island/Province development Rehabilitation Subtotal tidal water Total------------------------------- (ha) --------------------------------

JavaW. Java /c 61,680 36,924 98,604 - - 98,604Jatiluhur 66,000/d 18,243 84,243 - - 84,243C. Java 88,834 129,151 217,985 - - 217,985Yogjakarta 27,885 - 27,885 - 1,270 29,155E. Java 19,752 146,650 166,402 - 88,000 254,402DKI Jakarta 2,155 - 2,155 - - 2,155

Subtotal 265,506 330,968 596,474 - 89,270 685,744

Bali 3,813 5,118 8,931 - - 8,931

SumateraAceh 59,725 33,150 92,875 - - 92,875N. Sumatera 24,694 14,500 39,194 3,000 - 42,194W. Sumatera 41,762 6,840 48,602 12,000 - 60,602Riau 13,589 1,650 15,239 51,626 - 66,865Jambi 6,585 2,600 9,185 18,340 - 27,525Bengkulu 31,572 8,800 40,372 - - 40,372S. Sumatera 60,983 8,250 69,233 70,880 - 140,113

Lampung 92,761 515 93,276 7,000 - 100,276

Subtotal 331,671 76,305 407,976 162,846 - 570,822

KalimantanW. Kalimantan 3,600 - 3,600 26,630 - 29,230E. Kalimantan 3,884 100 3,984 - - 3,984C. Kalimantan 710 - 710 18,405 - 19,115S. Kalimantan 17,048 2,500 19,548 18,079 - 37,627

Subtotal 24,532 1,600 26,132 62,114 - 88,246

SulawesiN. Sulawesi 25,704 4,886 30,590 - - 30,590C. Sulawesi 26,407 4,900 31,307 - - 31,307S. Sulawesi 76,405 62,787 139,192 - - 139,192S.E. Sulawesi 15,448 - 15,448 - - 15,448

Subtotal 143,964 72,573 216,537 - - 216,527

Nusa TenggaraW. Nusa Tenggara 22,941 7,890 30,831 - - 30,831E. Nusa Tenggara 8,331 4,180 12,511 - - 12,511

Subtotal 31,272 12,070 43,342 - - 43,342

Maluku 3,340 - 3,340 - - 3,340

Total 804,808 499,634 1,304,442 224,960 89,270/e 1,618,672

/a This inventory applies to service areas./b Term used to cover the traditional gravity irrigation systems.

7W Excludes area under control of Jatiluhur Authority./d Includes 51,000 ha tertiary development./e Groundwater will supplement conventional irrigatiorn - actual service area

will be smaller.


- 59 -ANNEX 2Table 6Page 1

INDONESIA


Distribution of Irrigation Systems in Design Stage or Under Constructionby Size of Service Area, By Region

Gravity Tidal Ground-Region New development Rehabilitation Swamp swamp water Total

Java0 - 1,999 ha 57 146 - - 1 204

2,000 - 4,999 ha 8 28 - - - 365,000 - 9,999 ha 4 5 - - - 910,000 - 19,999 ha 3 4 - - 1 820,000 ha and above 4 3 - - 2 9

Total 76 186 - - 4 266

Bali0 - 1,999 ha 7 11 - - - 18

2,000 - 4,999 ha - - -5,000 - 9,999 ha - _10,000 - 19,999 ha - -20,000 ha and above - - -

Total 7 11 - - - 18

Sumatera0 - 1,999 ha 124 28 - - - 152

2,000 - 4,999 ha 11 7 1 3 - 225,000 - 9,999 ha 11 3 1 1 - 16

10,000 - 19,999 ha 5 1 1 2 - 920,000 ha and above 3 - 1 2 - 6

Total 154 39 4 8 - 205

E. & W. Nusa Tenggaraand Maluku

0 - 1,999 ha 37 5 - - - 422,000 - 4,999 ha 5 2 - - - 75,000 - 9,999 ha - 2 - - - 210,000 - 19,999 ha - -20,000 ha and above - _ _

Total 42 9 - - - 51

- 60 -

ANNEX 2Table 6Page 2

Distribution of Irrigation Systems Under Constructionby Size of Service Area, By Region

Gravity Tidal Ground-Region New development Rehabilitation Swamp swamp water Total

Kalimantan0 - 1,999 ha 27 5 - 6 - 38

2,000 - 4,999 ha 1 - 2 5 - 85,000 - 9,999 ha 1 - 1 5 - 710,000 - 19,999 ha20,000 ha and above

Total 29 5 3 16 - 53

Sulawesi0- 1,999 ha 41 17 - - - 58

2,000 - 4,999 ha 5 3 - - - 85,000 - 9,999 ha 4 5 - - - 910,000 - 19,999 ha 2 1 - - - 320,000 ha and above 1 1 - - - 2

Total 53 27 - - - 80

Indonesia0 - 1,999 ha 293 212 - 6 1 514

2,000 - 4,999 ha 30 40 3 8 - 815,000 - 9,999 ha 20 1 2 6 - 4310,000 - 19,999 ha 10 6 1 2 1 2020,000 ha and above 8 4 1 2 2 17

Total 361 277 7 24 4 675

- 61 -ANNEX 2Table 7

INDONESIA


Progress of Sederhana Program in Repelita II(1974/75-1977/78) /a

1974/75 1975/76 1976/77 1977/78 1978/79 Total Repelita II

Number of Area Number of Area Number of Area Number of Area /b Number of Target Number of Area

Island/province projects (ha) projects (ha) projects (ha) projects (ha) projects area /c projects

JavaD.K.I. Jakarta - - - - - - - - - - - -

W. Java 27 5,336 17 3,996 21 3,233 14 2,548 20 2,475 99 17,588

C. Java 30 4,033 4 813 9 1,724 .19 2,633 21 134 83 9,337

Yogjakarta 2 73 2 134 5 230 4 531 5 168 18 1,136

E. Java 3 2,193 3 632 1 150 3 487 2 0 12 3,462

Subtotal 62 11,635 26 5.574 36 5.337 40 6.199 48 2.777 212 31,522

Bali - - 4 658 2 - 4 1,425 3 1,497 13 3,580

SumateraAceh 6 2,925 9 2,480 5 719 2 868 4 234 26 7,226

N. Sumatera 7 3,105 12 3,700 11 1,718 9 4,787 10 756 49 14,066

w. Sumatera 15 4,066 9 2,753 14 2,504 9 4,944 27 2,012 74 16,279

Riau 4 383 8 1,839 21 4,701 13 6,350 27 0 73 13,273

Jambi 28 3,019 31 3,238 26 2,639 14 4,755 44 0 143 13,651

Bengkulu 8 1,214 10 2,246 19 2,746 14 4,534 36 414 87 11,154

S. Sumatera 2 1,350 7 1,993 13 382 11 4,530 16 318 49 8,573

Lampung 5 1,343 12 3,085 11 2,899 9 2,244 37 3,508 74 13,079

Subtotal 75 17.405 98 21.334 120 18,308 81 33.012 201 7,242 575 97.301

KalimantanW. Kalimantan - - 1 100 2 0 3 1,100 4 375 10 1,575

C. Kalimantan - - 1 108 7 410 2 2,500 7 637 17 3,655

S. Kalimantan 7 1,357 6 1,232 9 3,244 5 4,830 6 0 33 10,663

E. Kalimantan - - 1 100 8 1,680 6 1,118 21 1,600 36 4,498

Subtotal 7 1,357 9 1,540 26 5.334 16 9.548 38 2.612 96 20.391

SulawesiN. Sulawesi 7 1,681 4 1,925 7 3,080 12 4,265 14 135 44 11,086

C. Sulawesi 4 1,035 5 4,102 6 4,721 11 4,535 16 3,680 42 18,073

S. E. Sulawesi 8 2,631 3 2,564 5 404 7 2,436 9 2,728 32 10,763

S. Sulawesi 8 3,568 32 7,589 20 5,744 6 1,043 17 1,886 83 19,830

Subtotal 27 8.915 44 16,180 38 13,949 36 12.279 56 8.429 201 59.752

Nusa TenRgaraW. Nusa Tenggara - - 4 1,400 7 3,275 7 3,500 11 878 29 9,053

E. Nusa Tenggara - - 5 282 10 632 5 2,912 11 637 30 4,463

Subtotal - - 8 1.682 17 3.907 12 6.412 22 1.515 59 13.516

Maluku - - I - 1 100 1 222 1 685 4 1,007

Irian Jaya - - - - - - - - - - -

Timor - - - - - - -

Total 171 39,312 190 46.968 240 46.935 190 69.097 369 24,757 1.160 227,069

/a Fiscal years, April 1 to March 31.

/b Estimated.

/c Target areas generally lower in 1978/79 compared with previous years in order to ensure an improved quality of work.


INDONESIA


Project Loans to Indonesia by International Institutionsor Foreign Governments for Water Resources Development

1968 to September 1977

Lending Institution/ Name of Project Year of LoanCountry Commitment ($ million)

A. IBRD/IDA Madium-Solo Groundwater 1968 0.030Jatiluhur Irrigation 1968 0.067Jatiluhur Extension 1968 0.126Jatiluhur Aerial Mapping 1971 0.250.Jatiluhur Irrigation Extension (Fifth Irrigation Project) 1974 30.000First Irrigation Project 1969 5.000Second Irrigation Project 1970 18.500Third Irrigation Project 1970 14.500Pomali-Comal Irrigation Feasibility Study 1971 0.806Fourth Irrigation Project 1972 12.500Sixth Irrigation Project 1975 65.000Seventh Irrigation Project 1976 33.000Eighth Irrigation Project 1977 63.000Ninth Irrigation Project 1977 35.000Tenth Irrigation ProjectEleventh Irrigaton Project

Total 277.779


0


B. Asian Development Tajum Irrigation Project 1969 0.990Bank Gambarsari/Pesanggrahan Irrigation 1971 2.700

Sempor Dam 1972 9.200Wampu Flood Control 1972 5.940Proyek Serbaguna Karang-Sambung 1975 3.000Telun Lada Area Development, Phase I 1975 12.200Lodoyo Irrigation Project 1977 20.500

Total 54.530

C. U.S.A. Citanduy River Basin Master Plan and Feasibility Studies 1972 0.695 1Lower Citanduy Design 1975 a%Segara-Anakan Pre-Design 1975 } 1.270Segara-Anakan Project Design 1975Jragung Dam Pre-Design 1975 0.442Sederhana Irrigation 1975 23.700Luwu Area and Transmigration 1975 15.000Lower Citanduy - Construction 1976 12.500Jragung Dam - Plan and Detailed Design 1974 1.800

Total 55.407

D. Japan Karang Kates Dam 1968 2.600Karang Kates Dam 1969 3.536

I. I-IOQ aoo cr

iv >D


Karang Kates Dam 1970 3.570Karang Kates Dam 1971 1.430Kali Konto Dam (Selorejo Dam) 1968 0.800Kali Konto Dam (Selorejo Dam) 1969 1.204Kali Konto Dam (Selorejo Dam) 1970 1.040Brantas Delta Irrigation 1970 0.905Brantas Delta Irrigation 1971 0.395Kali Porong Irrigation 1970 1.238Kali Porong Irrigation 1971 1.482Kali Porong Irrigation 1975 1.600Ular River Flood Control 1971 1.300River Dredgers Rehabilitation 1972 0.200Way Jepara Irrigation 1973 2.171 aWay Umpu and Way Pangubuan Irrigation 1974 1.070.Way Umpu and Way Pangubuan Irrigation 1976 6.430Kali Surabaya Irrigation (Phases I and II) 1974 4.000Kali Surabaya Irrigation (Phases I and II) 1976 8.850Wlingi Multipurpose Dam 1975 18.500Wlingi Multipurpose Dam 1976 2.340Wonogiri Dam - Engineering Services for Dam and

Hydro Power 1976 1.433Wonogiri Dam - Construction 1977 35.400Wonogiri Irrigation - Design 1977 1.750Way Rarem - Detailed Design 1977 1.100

Total 104.344

OQ a ZM ,tXi

Ox>


E. United Kingdom /a Kediri-Nganjuk Irrigation - Phase I 1973 0.538Kediri-Nganjuk Irrigation - Phase II 1974 0.068Kediri-Nganjuk Irrigation - Phase III 1974 1.160Kali Progo Irrigation 1973 0.900Kali Progo Irrigation - Engineering Services 1974Dumoga Irrigation 1975Gumbasa Irrigation 1975

Total 6.246

F. Netherlands Dredger Rehabilitation 1969 0.160Dredging Equipment Rehabilitation 1969 0.346Jakarta Flood Control 1969 1.020Jakarta Flood Control 1974 1.501Jakarta Flood Control - First Stage 1976 7.200Jakarta Flood Control - Second Stage 1977 3.688Semarang-Sedeku Irrigation Rehabilitation 1969 1.250Tidal Swamp Equipment 1976 1.900

Total 17.065

G. Canada Water Resources Sectoral Development. 1976 9.174- Bengkulu Design Unit- Central Java Design Unit- Sumbawa Water Resources Development Study

Total 9.174

/a Exchange rates have varied considerably and therefore a rate of US$1 = E 0.5 was used throughout.

CD tIV

Z.4


H. France Cisedane, Jakarta, Cibeet Water Resources Development Study 1975 2.083Additional Services for cisedane, Jakarta, Cibeet WaterResources Study 1977 0.524

Total 2.607

o

(D XI -

INDONESIA


Technical Assistance Grants to Indonesia from International Institutionsor Foreign Governments for Water Resources Development

Foreign Government /a Name of Project Year Value($ million)

A. United Nations1. UNDP Institute of Hydraulic Engineering - Bandung 1970/71 2.4162. FAO Advisory Services in Water Legislation - Jakarta 1974/75 n.a.3. WFP Volcanic Debris Control (E. Java/Bali) 1969/70 1.131

Food Assistance for Construction of Irrigation Canalsin Kebumen Area (Central Java) 1977/78 1.280

B. Japan Barito River Basin Study (South Kalimantan) 1969/70 0.473 /bAssistance for Irrigation River Improvement and Volcanic

Debris Control (E. Java and Bali) 1969/70 n.a.Kali Surabaya Feasibility Study (East Java) 1970/71 n.a.Riam Kana Irrigation (South Kalimantan) 1977/78 n.a.Brantas Basin and River Control Study, includingFeasibility Study of Wlingi Dam (East Java) 1971/72 0.650 /b

Regional Development in Lampung (Lampung)- Way Jepara 1971/72 0.170 /b- Way Umpu and Way Pengubuan 1972/73 0.150 /b- Way Rarem and Way Abung 1972/73 0.500

/a Note that technical assistance provided by Bank Group is included in project loan amounts in Table 1 (seeAnnex 4, Table 2 for details).

/b Estimate by DGWRD.

OQ Vb {D H MK ..

Foreign Government Name of Project Year Value($ million)

Studies and Planning of Central South Sulawesi WaterResources Development (Central and South Sulawesi) 1972/73 0.756 /a

Wonogiri Irrigation Project (Central Java) 1974/75 0.600 /aOverall Ular River Flood Control and Drainage Project

(North Sumatera) 1975/76 0.750 /aErosion and Volcanic Debris Control - Master Plan ofMt. Meraju Area (East Java) 1975/76 2.415 /a

Strengthening Design Unit of Central Design Unit ofSouth Kalimantan Provincial Public Works (South Kalimantan) 1976/77 0.600 /a

C. United Kingdom Kali Progo Basin Study (Yogjakarta) 1969/70 0.200 /aKediri Nganjuk Groundwater Development (E. Java) 1969/70 0.192 /aDumoga and Gumbasa Irrigation (N. and C. Sulawesi) 1970/71 1.655 /a IKrueng Jrene and Krueng Bara Irrigation (Aceh): a- Feasibility Studies 1971/72 0.250 /a- Detailed Design and Supervision of Construction 1977/78 2.687 /aBali Island Water Resources Development (Bali) 1972/73 0.125 /aMadura Island Water Resources Development (E. Java) 1972/73 0.375 /aHydrological and Hydrometeorological Network (Lampung) 1972/73 0.302 /bKali Progo Irrigation Project (Yogjakarta) 1972/73 1.305 /bWater Resources Planning Consultancy (Jakarta) 1972/73 n.a.Strengthening of Design Unit in Provincial Public Works

(E. Java) 1973/74 0.345 /aStrengthening of Design Unit in Provincial Public Works

(North Sumatera) 1974/75 0.650 /a

/a Estimated by DGWRD.

/b Estimated by mission.

I-.tTlna a

(D >M '


Water Resources Development Study (Lampung) 1974/75 1.000 /aGroundwater Survey (East Java) 1975/76 0.500 /aAirphoto Interpretation Course 1975/76 0.018 /aStrengthening of Design Unit in Provincial Public Worksand Arau and Kuranji River Flood Control 1976/77 0.875 /a

Sediment Transport Investigation in the Brantas River(E. Java) 1976/77 0.018 /a

Gunung Kidul Groundwater Project (Yogyakarta) 1976/77 0.550 /aGambarsari Drainage Surveys and Reclamation Studies of

Coastal Areas (Central Java) 1976/77 n.a.Strengthening of Design Unit of Provincial Public Works

(Bali) 1976/77 0.500 /aAssistance to Institute of Hydrologic Engineering (Bandung):- Hydrologic Training 1977/78 0.230 1- Supply of Calibration Equipment 1977/78 0.060Operation and Maintenance Equipment (E. Java) 1977/78

D. Netherlands Jratunseluna River Basin Study (C. Java) 1969/70 2.350Cimanuk River Basin Development (W. Java) 1970/71 n.a.Jakarta Drainage and Flood Control (Jakarta) 1970/71 1.536 /bNorth Luwu Plain (S. Sulawesi) 1970/71 0.054 lbDetailed Design of Luwu Irrigation Project (S. Sulawesi) 1973/74 2.269 lbRawa Pening Improvement Feasibility Study (C. Java) 1973/74 0.269 TbSerang River Flood Diversion and Juana Drainage (C. Java) 1974/75 0.746 /bHydraulic and Hydrological Studies and Equipment for

Tidal Swamp Reclamation 1976/77 1.200 /b


/b Estimated by mission.

X F3

WD >,DX


E. Canada Lombok Water Resources Development (Nusatengara) 1971/72 2.000Timor Island Water Resources Development (Timor) 1974/75 2.600

F. France Cimanuk River Basin Development (W. Java) 1969/70 n.a.

G. West Germany Anai Delta Irrigation Pre-Feasibility Study (W. Sumatera) 1970/71 n.a.

H. Switzerland Sumani Pumping System Irrigation (W. Sumatera) 1977/78 0.830 /a

I. Australia Serayu River Basin Development (C. Java) 1971/72Singomerto Weir (C. Java) 1975/76 1.030 /a lWest Kalimantan Water Resources Development Study -

(W. Kalimantan) 1976/77 0.335 /a C



000F I-'P Pzoo LOW

- 71 -

ANNEX 3Table 3

INDONESIA


Project Loans Negotiated for Irrigation andWater Resources Development by Major Source /a

AsianWorld Development

Year Bank /b UN Bank USA Japan UK Netherlands Canada France---------------------- ($ million) ------------- …----------------

1968 0.2 - - - 3.4 - - _ _1969 5.0 - 1.0 - 4.7 - 2.8 - -

1970 33.0 - - - 6.8 - - - -1971 1.1 - 2.7 - 4.6 - - - -1972 12.5 - 15.1 0.7 0.2 - - - -1973 - - - - 2.2 1.4 - - -1974 30.0 - - - 5.1 1.5 1.5 - -1975 65.0 - 15.2 40.4 20.1 3.3 - - 2.11976 33.0 - - 14.3 19.1 - 9.1 9.2 -1977 98.0 - 20.5 - 38.3 - 3.7 - 0.5

Total 277.8 - 54.5 55.4 104.5 6.2 17.1 9.2 2.6

/a Refers to total negotiated during year; it does not represent amount disbursedin each year. Discrepancies between data in this table and detailed data inTable 1 are due to rounding. Amounts in current prices.

/b Two irrigation loans totalling $171 million were negotiated by World Bank in1978.

- 72 -ANNEX 4Page 1

INDONESIA


Bank Group Lending for Irrigation Development

Summary of Bank Group Activities

1. Bank Group lending for irrigation development in Indonesia startedwith an IDA credit of $5.0 million in March 1969. Since that time ten moreprojects have been financed, four credits and six loans. The most recentestimates of the cost of all Bank Group-assisted projects in terms of end-1977-prices and including contingencies (see Table 2) is about $1200 million,with Bank credits/loans amounting to $447.5 million. Table 1 provides asummary of the status of each project while Table 2 gives a summary of themost recent cost estimates for all projects together with information regard-ing their main components.

2. The areas covered by the Bank-assisted projects are indicated inTable 3. The Bank's early activities concentrated on rehabilitation ofprimary and secondary irrigation canals since this type of development wasexpected to generate rapid benefits, high economic returns and utilized theexisting engineering and managerial expertise in the Directorate General ofWater Resources (DGWRD). In 1975 the Bank reviewed its lending activities forirrigation projects /1 and inter alia concluded that greater emphasis neededto be given to the rehabilitation of tertiary canals since these systemswere not being constructed by farmers as had been assumed when the earlycredits for the rehabilitation of primary and secondary canals had beennegotiated. At the same time the Bank also commenced lending for newdevelopment of irrigation systems as well as continuing its lending forrehabilitation.

Progress and Impact of the Bank-Assisted Irrigation Projects

3. It is not the purpose of this review to examine the progress andimpact of each Bank project in detail, that is done in the course of regularsupervision missions and the project completion reports as they become due.However, some general comments are appropriate here, some of which willbring out a number of problems and issues which have been the subject ofintense debate within the Bank recently.

4. The project completion report for Credit 127-IND summarized engi-neering accomplishments, institutional benefits and the agricultural andeconomic impact of the project. It was noted that engineering standards

/1 See Irrigation Program Survey, Report No. 705-IND, April 15, 1975.

- 73 -

ANNEX 4Page 2

have improved with consequent advances in cost effectiveness, serviceability,simplicity and endurance of irrigation structures. These improvements havebeen evident in the execution of subsequent projects.

5. The establishment of PROSIDA /1 as the executing unit for the earlyBank projects contributed greatly to the management efficiency of all Bank-assisted projects. The scope of PROSIDA's activities is reflected in itscurrent program which includes responsibility for execution of the bulk ofBank-assisted projects. In the future, other Directorates in the DGWRDwill become more involved in the planning and execution of Bank-assistedprojects and it is possible that PROSIDA will gradually be absorbed intothe operating structure of the DGWRD. The gradual phasing out of PROSIDAas a separate entity will be evidence of its success in providing a train-ing ground for DGWRD personnel (see discussion of PROSIDA in Annex 7).

6. Out of approximately 1,500,000 ha of technical irrigation systemsin Indonesia, all of which required rehabilitation in 1968, about 1.1 mil-lion ha have been included under the nine Bank Group projects approved todate (see Table 3). Another 91,000 ha requiring rehabilitation will beincluded under Irrigation X and XI. The balance of about 300,000 ha havebeen or will be rehabilitated by the GOI with the-aid of loans from the AsianDevelopment Bank (ADB) and bilateral aid assistance. Because much of therehabilitation work was limited to the most urgent works, many of the systemscould benefit from further upgrading. Aside from additional construction oftertiary canals (about 450,000 ha will be provided with tertiary canals underthe first 11 Bank projects), most existing systems need further drainage,feeder roads and flood protection. Increased water supply in the dry seasonthrough the construction of storage dams is another area for possible futureBank involvement. Another related activity is watershed management. Many ofthe systems rehabilitated by the Bank have suffered from serious siltationproblems and while rehabilitation has helped to remove the problem, itdid not cure it. The long-term solution is watershed management, and theIndonesia General Agriculture Division (AEPIA) is presently preappraisingsuch a project in Java.

7. The appraisal reports for Bank Group-assisted projects indicatethat, when all development is complete and the assumptions concerningsupporting services and productivity have been satisfied, these projectswill result in an increase of about two million tons of rice p.a. in about1990 (see Table 4). In addition, significant increases will occur in theproduction of secondary crops such as soyabean, corn, ground nuts, andvegetables. All the increased production from irrigation projects cannot beascribed to water supplies alone since the availability of water needs to beassociated with improved inputs (HYV seed, fertilizers) and better managementpractices (extension). It is the joint application of all these factors ofproduction that makes an irrigation project achieve its full potential.This issue is taken up at greater length in para. 12 below.

/1 PROSIDA is the acronym for "Proyek Irigasi IDA."

- 74 -

ANNEX 4Page 3

8. The contribution of Bank-assisted projects to Indonesian paddyproduction is reflected in the estimates in Table 5. The relative impact ofthe ongoing Bank-assisted projects rises rapidly to the mid-1980s when theyare estimated to contribute about 20% to total rice production. The extentto which this will be the case obviously depends heavily on all the assump-tions embodied in the calculations, however,,there can be little doubt aboutthe increasing and significant impact of the Bank-assisted projects in totalrice production. Major reasons why this impact may be delayed are a lag inconstruction of primary, secondary and .in particular tertiary systems,inadequate supporting services and unexpected damage by pests and disease.

9. The nine ongoing Bank-assisted irrigation projects are estimated toimprove the income of-some 1.6 million-farm families and increase the workopportunitie's for at least another 0.5 million landless laborer families.Furthermore, these projects are also expected to result in a substantialimprovement in the supply of water in villages for purposes other thanirrigation.

Problems of Implementation

(a) Cost Overruns, Construction Delays and Quality of Work

10. In the earlier Bank-assisted projects cost overruns caused byinadequacies in preparation and design, together with unexpectedly highrates of inflation resulted in substantial cost overruns. For example, theproject completion.report for Credit 127-IND notes a cost overrun of 250%between the estimated cost at appraisal (March 1968) of $8.8 million andthe cost estimate following a detailed. assessment (April 1970) by.a consul-tant of $31.1.million. Subsequently, project costs were raised again to$54.3 million as shown in Table 1 of this annex. That table also showsthat many of the Bank' s other projects have cost more to construct, than theappraisal estimates. On average the cost overrun for the first five creditshas been 165%. To a large extent these overruns were due to the exception-ally high inflation rates in Indonesia during 1971-1975, together withGovernment decisions after appraisal to expand the scope of some works.

11. Delays in construction, particularly in early projects, haveoccurred due to a number of factors. The most common reasons were delaysin the:engagement of consultants, time-consuming paperwork and delays inreceiving budget supplements required to make up cost-overruns. There werealso deficiencies in the quality of construction in early projects due to thelack of trained personnel. While these deficiencies were eventually recti-fied, they-created significant problems and delays during construction. Atpresent much, greater attention is being given to forward planning, particu-larly the letting,of tenders.

(b) Operation and Maintenance

12. The quality and funding of operation and maintenance activitieswere inadequate for many of the Bank projects in earlier years. Again,while more attention has been given to the quality and financing of O&M

- 75 -

ANNEX 4Page 4

activities in recent years, it was not until the Bank placed considerablepressure on the Government that this issue was resolved. At present O&Mfunds are allocated to various subprojects at levels agreed by the Bank andat least half of these funds are released by mid-August each year.

(c) Supporting Services

13. Perhaps the most serious problem faced by the Bank's projectsis that while the water distribution facilities in many project areas havebeen constructed and are operating efficiently, the supply of inputs andassociated services for example (agricultural extension services, credit andmarketing facilities) have not kept pace with the engineering activity.This situation was recognized some years ago and highlighted in the Bank'sIrrigation Program Survey in 1975. Since that time efforts have been made tostimulate action by the GOI to improve the situation. The Bank launchedagricultural research and extension projects in 1976, and it had alreadyinitiated a seeds project in 1971. The results from the seeds project, whileso disappointing early, are expected to have a substantial impact in the nextfew years. The extension project has not yet fully matured, but progress sofar is encouraging. Fertilizer projects were negotiated in 1971, 1973,1975, and 1976 and these have led to a substantial improvement in theavailability of nitrogenous fertilizer to farmers.

14. The whole question of supporting services is examined in a separateBank report (A Review of the Support Services for Food Crop Production). Therecommendations in that report, which cover credit, fertilizer marketing andpricing, rice prices, the role of cooperatives, research and pest control,have been discussed with the Government. Action has been taken to engageconsultants to study the pest problems in rice and make recommendations oncontrol measures, prepare a second research project for Bank financing, andto draft terms of reference for the preparation of a second seeds project.

Major Issues Associated with the Bank's Irrigation Lending Program

(a) Incremental Benefits from Rehabilitation

15. While it was noted in paragraph 1.03 (of the main report) that thisreport is not aimed at a review of Bank-assisted projects, there are twocurrent issues which should be mentioned because they have become the subjectof controversial debate within the Bank.

16. The preparation by the Bank's Irrigation Division (East AsiaPacific Region) of the project completion report for Credit 127-IND (PCR127-IND) and the audit of that report by the Operations Evaluation Department(OED) in a Project Performance Audit Report (PPAR) has given rise to anintense debate on a number of matters. One of these is the magnitude ofbenefits due to the rehabilitation of irrigation projects. The heart of thecontroversy is whether wet-season yields in areas where irrigation systemshad been rehabilitated using Bank financial assistance are greater afterrehabilitation than they would have been without rehabilitation.

- 76 -

ANNEX 4Page 5

17. The PCR position was that the joint effects of rehabilitated irri-gation facilities and improved input, credit and extension packages led toincreased wet-season yields as well as increased dry-season area and yield.Because the provision of a better water supply is a precursor to the useof improved inputs and services it is impossible to assign project benefitsaccurately to either rehabilitation or inputs and services. Nevertheless thePCR drew the conclusion, as had the appraisal report, that improved waterdelivery and distribution in the project area, together with some improvementin supporting services, improved yields in the wet season.

18. The OED in its PPAR assessed this reasoning and concluded that wet-season yield increases in the project areas would have been realized withoutrehabilitation since climatic records indicated that in recent years paddyfields in those areas would have had adequate water for rice productionthroughout the wet season and that therefore other factors such as improvedinputs and services were the dominant determinants of increased wet seasonyields. OED suggested that less than half of the yield improvement could beattributed to rehabilitation. The PPAR states that the PCR has implicitlyassumed yield increases due to rehabilitation are greater than 50% of thetotal yield increase.

19. While this issue may never be resolved to the satisfaction ofall parties, it is a basic fact that the available hydrological data showthat crop water requirements during periods such as two weeks and a monthwithin the wet-season growing period are greater than the amount availablefrom rainfall. Rehabilitated irrigation systems are justified on the basisthat they will make up the shortfall between water requirements and suppliesand consequently increase yields above levels achieved without rehabilitation.The fact that yield improvements are not occurring as rapidly as had beenhoped is not evidence of the failure of rehabilitation but rather, as pointedout in para. 13, the slower than expected build up of supporting services.

(b) The Justification for the Construction of Tertiary DistributionSystems

20. The first four IDA credits for irrigation in Indonesia included nofunds for the construction or rehabilitaiton of works beyond the tertiaryterminal, except for the first 50 meters of all tertiary canals and scatteredpilot tertiary demonstration units. The Government opposed using public fundsfor tertiary canals, asserting that farmers had always and should continueto construct these themselves under gotong royong or other group schemesorganized by the local administration and water authorities. The Bankcontested the GOI position from the beginning, but the Government's viewprevailed. In 1974, the Bank reviewed its irrigation projects in Indonesia(Irrigation Program Survey) and, amongst other things, pointed out thatfarmers were not building or repairing the tertiary systems as originallyenvisaged. This observation had indeed already been made in earlier super-vision reports. Following further Bank pressure the Government agreed thatfuture projects should include components for tertiary development whereappropriate. The impact of that decision on the nature of the Bank's lendingprogram for irrigation can be seen in Table 1 of this Annex.

- 77 -

ANNEX 4Page 6

21. The justification for the Bank's continuing involvement in thefinancing of tertiary development has been questioned by OED in its PPARof Credit 127-IND. While admitting to the inadequacy of basic data, OED hasargued that farmers have not constructed tertiary systems themselves becauseof sociological and financial factors. OED has concluded that these factorsare of such importance that the Bank should understand and act on them beforeproceeding further with tertiary development.

22. It is the mission's view that the question of the justification oftertiary construction support by the GOI and indirectly by the Bank is amatter which can only be argued on a case by case basis. There are somecircumstances in which farmers already have or will rehabilitate or constructtertiaries and other circumstances where they will not. In the lattersituations factors such as the difficulty of the terrain and the resultantuncertainty of farmers concerning the most appropriate design, the povertyof farmers and hence their lack of finance and/or free time to build tertia-ries, the unwillingness of some farmers to grant rights of way, and finallythe lack of organizational support from Government required to mobilizevillage labor on the scale necessary, all contributed to the nonconstructionof tertiaries in some areas.

(c) Disbursement of Bank Group Loans

23. The cumulative disbursement pattern for the 11 ongoing Bank Group-assisted irrigation projects is shown in Figure 2.2. Although actual disburse-ments in the early years lagged behind expectations, the rate of disbursementsis now approaching appraisal estimates even though the absolute amountsdisbursed still fall short of the targets by about 20%. As shown in Figure2.2. it is projected that this gap will be gradually closed./l It is alsoapparent that the annual rate of disbursements will need to increase substan-tially if the projects are to be completed according to the projected time-table. For example, whereas the annual disbursements for irrigation projectsbetween 1969 and 1978 totalled about $10 million p.a., the average annualtotal disbursement over the next seven years for ongoing projects will needto rise to about $50 million to achieve the disbursement projections. Ifprojected additional projects are added this figure is likely to rise tobetween $100 and $150 million p.a.

(d) Relative Importance of Bank Group-Assisted Project in the TotalDGWRD Budget

24. The actual and expected Bank disbursements for ongoing Bank-assistedirrigation projects in Indonesia are summarized in Table 6. With the exceptionof 1976/77 there has been a slow rise in disbursements. This rise should accele-rate in the near future (see Figure 2.2) making necessary a corresponding increasein the allocation of the DGWRD budget to Bank-assisted projects. When the totalcosts of likely future projects are added to the funds which need to be set

/1 Perhaps it should be noted that the rate of disbursement of loan funds isnot always a reliable indicator of the success of a project. Delays indisbursement may merely reflect administrative delays.

- 78 -

ANNEX 4Page 7

aside for ongoing projects the total annual funding required for Bank-assistedirrigation projects could become as high as $250 million (see Annex 12, Table2). It is difficult at this stage to predict the growth in the DGWRDbudget, but on the basis that it increases by 10% p.a. a commitment of such amagnitude would result in Bank-assisted projects accounting for about 30% ofthe total budget within the next five years. Whether the GOI will allow sucha situation to arise is not clear. What is clear is that if Bank Group-assistedprojects continue to be implemented and financed at the rate projected, thenthey will rapidly become an increasingly dominant part of DGWRD operations.

INDONESIA


Bank Group Lending Program for Irrigation

Total project cost estimate EconomicAmount Disbursements Credit Loan - Date of rate of

Credit/loan Credit Loan 10/13/78 Appraisal Current/a Appraisal CurrentLa effectiveness return Status-…-…-- …------------------ (US$ million) -------------------------- (%)/b

Cr. 127 5.0 5.0 8.8 54.3 3/25/69 51 Completed

Cr. 195 18.5 18.5 36.3 91.4 12/31/70 29 Essentially completed

Cr. 220 14.5 14.3 29.1 72.0 5/28/71 25

Cr. 289 12.5 12.1 23.4 58.0 5/05/72 39

Cr. 514 30.0 6.9 68.0 162.0 1/10/75 42 Major construction started mid-1977

Ln. 1100 65.0 14.2 165.0 229.0 6/20/75 30

Ln. 1268 33.0 9.5 60.0 62.0 9/21/76 30 " " late-1977

Ln. 1434 63.0 1.6 118.0 118.0 7/07/77 16

Ln. 1435 35.0 3.7 64.0 64.0 7/07/77 17

Ln. 1578 140.0 0.3 216.0 216.0- 8/16/78 14 Loan signed in June 1978.

Ln. 1579 31.0 - 47.4 47.4 8/16/78 12 Loan signed in June 1978.

Total 80.5 367.0 86.1 165.6 437.4 670.4 736.4

/a As at date of latest Bank Supervision Reports mainly dated in 1978./b Rates of return as assessed at appraisal.-

n.a. - not available.

Note - Major increases in project costs following appraisal have been associated with the first five credits and can be mainly attributed toexceptionally high inflation rates in Indonesia during 1971-75, and GOI decisions following appraisal to expand the magnitude of thework contemplated. -

- Credits and loans for irrigation in this table are frequently referred to as Irrigation Projects I to XI.

-a 4

- 80 -

ANNEX 4

Table 2

INDONESIA


Most Recent Cost Estimates for Bank-assisted Irrigation Projects /a(US$ million)

Credit/Loan Number 127 195 220 289 514 1100 1268 1434 1435 1578 1579

Civil works /b 32.1 69.0 46.2 34.0 95.9 126.6 -20.8 49.6 27.7 95.2 19.3Land acquisition - 5.3 1.4 0.4 6.6 3.4 3.5 2.6 1.9 3.4 1.5+quipment, vehicles /c 7.2 1.9 4.7 5.0 1.9 2.4 1.1 4.7 2.7 2.8 2.8O&M during construction 3.2 - 2.6 1.3 1.5 8.9 0.6 - - - -Administration & over-

head /d 9.2 9.6 9.7 6.6 10.7 16.1 0.8 4.3 1.5 9.9 1.8Consultants /e 2.3 2.8 2.5 3.8 2.8 5.5 12.5 9.4 8.9 14.8 5.3Miscellaneous /f - 0.4 0.9 2.7 3.2 8.4 2.1 5.9 1.4 4.9 0.6Base cost 54.0 89.0 68.0 53.8 122.6 171.3 41.4 76.5 44.1 131.0 31.3Physical contingencies - - 1.5 1.6 10.3 14.7 7.8 17.2 8.7 29.8 6.6Price contingencies - 2.4 2.5 2.6 29.1 43.0 11.8 24.3 11.2 55.2 9.5

Total 54.0 91.4 72.0 58.0 162.0 229.0 62.0 118.0 64.0 216.0 47.4Credit'(actual) 5.0 18.5 14.5 12.5 30.0Loan (actual) 65.0 33.0 63.0 35.0 140.0 31.0

/a Credit/Loan Date and Sources of Information

127 Actual expenditures. Project Completion Report (June 1977).195, 220 October 1977 estimate. Supervision Report (December 1977).289 October 1977 estimate. Supervision Report (December 1977).514 October 1977 estimate. Supervision Report (December 1977).1100 October 1977 estimate. Supervision Report (December 1977).1268 October 1977 estimate. Supervision Report (December 1977).1434 End-1977 estimate. Appraisal of Irrigation VIII (May 1977).1435 End-1977 estimate. Appraisal of Irrigation IX (May 1977).1578 Appraisal estimate May 19781579 Appraisal estimate May 1978

/b In addition to all structures, includes civil works tax, pilot on-farm developments, and communica-tions (only for Credit 195 and for 1100, Sampean Baru subproject - elsewhere communication costsare linked under "miscellaneous").

/c Includes equipment for construction and O&M purposes, where listed; also includes audiovisualequipment for Irrigation IX subproject IV.

/d Administration and overhead: includes "management" and "supervision" costs, but not consultantsor vehicles or buildings.

/e Consultants: always listed explicitly in supervision reports and appraisal. Does notinclude training or technical assistance, which fall under "miscellaneous."

/f Miscellaneous: Composed of the following items:

Credit/Loan Items Included in Miscellaneous

195 Feasibility studies.220 Survey and design.289 PROSIDA mapping and drilling, and training and overhead (for groundwater pilot); feasi-

bility studies (Sampean Baru, Cirebon-Cimanuk).514 Agricultural extension services, specialists and training, "unallocated." (Jatiluhur).1100 Training (PROSIDA); feasibility projects, soil erosion problems, groundwater investigation,

training and study tours, technical assistance, monitoring systems for rehabilitationprojects, mapping (Subproject IV).

1268 Studies of detailed engineering; associated works by P3SA; training;telephone communications for PROSIDA.

1434 Telecommunications; training (Madiun Groundwater Pilot Project); mapping.1435 Mapping, telecommunications.1578 Mapping and survey, training, soil surveys and field investigations.1579 Training, field investigations.

Source: Various Bank appraisal, supervision and completion reports.

- 81 -

ANNEX 4Table 3

INDONESIA


Appraisal Estimates of Areas Associated with Bank Group Irrigation Projects

Rehabilitation,Reclamation and Drainage New Development

Primary and Tertiary Primary and TertiaryCredit/Loan secondary canals canals secondary canals canals

…-------------------------- (ha) -…-- - - - - - - - - -

Credit 127 /a 174,700Credit 195 186,000Credit 220 200,000Credit 289 229,100Credit 514 55,000 /b 56,000 /cLoan 1100 122,000 7d 179,000 /e 9,800 9,800Loan 1268 100,000 /f 6,000Loan 1434 80,700 30,000 2,800 /gLoan 1435 27,000- 3,500 17,000Loan 1578 87,900 29,000 36,900 37,700Loan 1579 - - 7,600 7,600

Total 1,162,400 394,000 66,600 47,980

/a Taken from the Project Completion Report.

/b Includes 4,000 ha reclamation of uninhabited swamp.

/c Includes 5,000 ha pilot tertiary plots in this project and first fourrehabilitation projects.

/d Includes 33,000 ha of drainage works in Rentang scheme which was notincluded in Credit 127-IND.

/e Includes 90,000 ha in Rentang, 89,000 ha in Cirebon.

/f This tertiary development is planned for 100,000 ha in irrigation systemsbeing rehabilitated under Credits 195, 220 and 289-IND.

] Groundwater development in three pilot areas.

INDONESIA

IRRIGATION PROGRAM4 REVIEW

Estimated Impact of Bank Irrigation Projects on Harvested Area and Paddv Rice Production /a

Year Year Project area /c Cropping intensity Harvested area Increase Paddy yield /d Increase Paddy Production IncreaseCredit/ Major type of construction of full Without With Without With Without With in area Without With In paddy Without With in paddyLoan No. development completed development project project project project project project harvested project project yield projert I. project productionWet/Dry Wet/Dry Wet/Dry

(ha) -- - -(ha) ---------- --- - (ton/ha) --------- ------------- (ton) ------…______

Cr. 127 Rehabilitation 1977 1985 153,500 174,700 120 151 183,400 264,200 80,800 2.1/1.7 4.0/3.4 1.9/1.7 490,910 1,177,850 686,940Cr. 195 Rehabilitation 1979 1985 186,000 186,000 158 200 294,000 372,000 78,000 2.4/1.6 4.0/3.2 1.6/1.6 686,000 1,329,000 643,000Cr. 200 Rehabilitation 1979 1985 189,600 189,600 120 137 228,100 259,100 31,000 2.0/1.6 3.8t3.8 1.8/1.6 457,000 973,600 516,600Cr. 289 Rehabilitation 1979 1985 211,600 211,600 140 140 297,300 297,300 - 2.6/2.5 3.9/3.8 1.3/1.3 893,300 1,151,700 258,400Cr. 514 Rehabilitation 1982 1988 47,000 51,000 125 179 58,600 91,100 32,500 2.0/1.2 4.0/4.5 2.0/3.3 110,700 363,300 252,600Ln. 1100 Rehabilitation 1985 1991 173,000 180,500 120 120 208,000 217,000 9,000 3.0/2.8 4.5/4.2 1.5/1.4 565,600 919,000 353,400New development 2,000 7,500 100 100 2,000 7,500 5,500 1.5/ - 4.0/ - 2.5/ - 3,000 30,000 27,000Ln. 1268 Rehabilitation 1982 1988 100,000 100,000 145 145 145,000 145,000 - 2.8/3.0 4.2/4.5 1.4/1.3 517,000 619,500 102,500New development 5,800 5,800 126 190 7,300 11,000 3,700 1.8/2.0 3.8/3.8 2.0/1.8 14,580 41,800 27,200Ln. 1434 Rehabilitation 1982 1988 71,400 71,400 123 125 87,750 89,200 1,450 3.0/2.5 4.2/3.8 1.2/1.3 250,600 364,000 113,400New development 2,800 2,800 114 150 3,200 4,200 1,000 4.2/2.6 4.2/4.2 - /1.6 12,100 17,700 5,600Ln. 1435 Rehabilitation 1981 1987 30,000 30,000 122 135 36,600 40,500 3,900 3.4/3.6 4.3/4.3 0.9/0.7 99,860 155,250 55,390New development 1,500 3,500 100 200 1,500 7,000 5,500 1.8/ - 3.7/3.7 1.9/3.7 2,700 25,900 23,200Ln. 1578 Rehabilitation 1984 1990 79,400 79,400 128 143 102,000 113,400 11,400 3.0/4.0 4.2/4.2 1.2/0.2 350,560 489,510 138,950Nev development 25,000 36,900 100 109 25,000 40.400 15,400 2.0/ - 4.2/4.2 2.2/4.2 29,600 181,800 152,200Ln. 1579 Rehabilitation 1982 1988 - - - - - - - - - - -New development 7,600 7,600 113 126 8,600 9,600 1,000 2.9/1.8 4.2/4.2 1.3/3.4 22,000 40,300 18,300Total Rehabilitation 1,241,500 1,274,200 - - 1,640,750 1,888,800 248,050 4,421,530 7,542,710 3,121,180New development 44,700 64,100 - - 47,600 79,700 32,100 83,980 337,500 253,520

Total 4,505,510 7,880,210 3,374.700

/a Estimates based on appraisal reports except for Credit 127 for which information was taken from the Project Completion Report. The estimates for futurepaddy production assume the availability and application of adequate support services including credit. The increased production is therefore not onlythe result of improved water supplies. All yield and production figures in terms of rough paddy ("paddy gabah").

/b Taken from infornation in latest supervision reports.

/c These areas do not always coincide with the area shown on Table 3 because part of the project area is ued for crops other than rice. In some cases smalladditional areas have been incorporated as parc of rehabilitation projects. Project areas identified for new development may have been growing rainfedrice or other crops prior to development.

/d Figures in these columns refer to yields for high-yielding varieties in wet and dry seasons. Some figures are averages when more than one project areais involved.

Le The appraisal reports for Credit 195, 220 and Loan 1100 do not show an estimated future paddy production without the project. For the purposes of thesecalculations, a 1% growth rate of production without the project was assumed.

INDONESIA


Estimated Impact of Bank Irrigation Projects on Paddy and Rice Production Over Time - Increased Production /a('000 tons)

Total increasein paddy

Credit/Loan No. production 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Cr. 127 686,940 137,400 274,800 412,200 549,600 686,940 686,940 686,940 686,940 686,940 686,940 686,940 686,940 686,940Cr. 195 643,000 - - 128,600 257,200 385,800 514,400 643,000 643,000 643,000 643,000 643,000 643,000 643,000Cr. 220 516,600 - - 103,320 206,640 309,960 413,280 516,600 516,600 516,600 516,600 516,600 516,600 516,600Cr. 289 258,400 - - 51,680 103,360 155,040 206,720 258,400 258,400 258,400 258,400 258,400 258,400 258,400Cr. 514 252,600 - - - - - 50,520 101,040 151,560 202,080 252,600 252,600 252,600 252,600 XLn. 1100 380,400 - - - - - - - - 76,080 152,160 228,240 304,320 380 400Ln. 1268 129,720 - - - - - 25,940 51,890 77,850 103,780 129,720 129,720 129,720 129,720Ln. 1434 119,000 - - - - - 23,800 47,600 71,400 95,200 119,000 119,000 119,000 119,000Ln. 1435 78,590 - - - - 15,720 31,440 47,150 62,870 78,590 78,590 78,500 78,500 78,500Ln. 1578 291,150 - - - - - - - 58,230 116,460 174,690 232,920 291,150 291,150Ln. 1579 18,300 - - - - 3,660 7,320 10.980 14,640 18,300 18,300 18,300 18,300 18,300

Total paddy 3,374,700 137,400 274,800 695,800 1.116,800 1,557,120 1,960,360 2,363,600 2,541,490 2,795,430 3,030,000 3,164,310 3,298,620 3,374,700

Total rice /b 1,931,110 86,560 173,120 438,350 703,580 980,990 1,235,030 1,489,070 1,601,140 1,761,120 1,908,900 1,993,520 2,078,130 2,126,060

/a These estimates are based on Table 4 adopting the development period assumed in the various appraisal reports. Adjustments have been made where possibleto allow for implementation delays. It is assumed that incremental production accrues at completion of construction. To the extent that increased pro-duction is possible before construction is completed the rate of build up in increased production is understated.

/b Assuming 63% milling percentage.

OD

- 84 -

ANNEX 4Table 6

INDONESIA


Comparison Between DGWRD Budget, DGWRD Expenditure on Bank Projectsand Bank Disbursements

Total DGWRD Total DGWRD expenditure onFiscal Year /a budget /b Bank-assisted projects tc Bank disbursements /d

($ million) ($ million) (Z of budget) ($ million) (% of budget)

1974/75 107 n.a. n.a. 11.8 11.0

1975/76 359 n.a. n.a. 12.5 3.5

1976/77 289 n.a. n.a. 7.5 2.6

1977/78 424 68 16 11.2 2.6

1978/79/c 520 220 42 18.8 3.6

/a For fiscal year ending March 31.

/b Actual annual budgets for 1974/75 to 1978/79 inclusive (see Table 2.4).

/c Estimated by Bank.

/d Actual disbursements for 1974/75 to 1977/78. Disbursements commencing 1978/79estimated by Bank and assumes DGWRD budget for Bank projects is available.

-85 - ANNEX 5Page 1

INDONESIA


Operation and Maintenance of Irrigation Systems

1. Irrigation development in Indonesia is the responsibility of eitherthe national or communal authorities. The national system is the jointresponsibility of the Government and the local community. The Government isresponsible for the main system (primary and secondary), and the localcommunity for the terminal (tertiary and quaternary) system. These systemsusually command a large area and many were constructed in the colonialperiod. As explained elsewhere in this report (see Annex 2), there are threemain types of national system. If a measuring device is placed only at theintake point, the system is defined as "semi-technical;" a system withmeasuring devices at all turnouts down to the tertiary level is defined as"technical;" and a "simple" system is one with no measurement devices.

2. In communal systems, the construction and management of the irriga-tion systems are the responsibility of the local community, although thegovernment would still render its assistance with the preparation of plansand design, with heavy earthwork and large structures. These systemsnormally have a relatively small command area and have a wide range ofphysical structures and organizational arrangements. The respective areasunder national and communal systems are in the approximate ratio of three toone.

Administration of Operation and Maintenance

3. In this report, "operation" refers to the allocation of irrigationwater supplies and the handling of drainage runoff, whilst "maintenance"encompasses the upkeep of irrigation and drainage structures and embankments,and the removal of silt and vegetation from irrigation canals and the upkeepand weeding of drainage channels. There are certain basic distinctionsbetween the two activities, although considerable coordination between opera-tion and maintenance is essential in order to ensure the smooth functioningof each. Operation is normally an everyday activity which involves not onlyoperations personnel, but also the farmers, whilst maintenance normally takesplace periodically and, although desirable, need not directly involve thefarmers.

4. The Provincial Public Works Service is responsible for the mainte-nance of all irrigation structures, the actual maintenance work beingundertaken through its offices at the Public Works "Seksi" level. The Seksiis also responsible for the distribution and management of irrigation waterthroughout the main and secondary canal systems. At the village level,when the water is in the tertiary canals, it is the responsibility of farmersalthough the responsibility is usually delegated to the village head ("lurah")who in turn is assisted by a village water master ("ulu-ulu"). The "lurah",who is normally an influential person is usually chosen by popular electionevery five years. He is remunerated by the village through allotment ofagricultural land from the common village land ("bengkok" land).

- 86 -ANNEX 5Page 2

5. Water distribution in an irrigation area within a district or"Kabupaten" is coordinated by a District Irrigation Committee, under thechairmanship of the Kabupaten Chief ("Bupati"). It consists of officialsfrom the Provincial Public Works Service, the Agricultural Service and otheragencies concerned (see Figure 2.1). This coordination is delegated to thesubsdistrict ("kecamatan") level and influenced by the prevailing croppingpattern, which differs according to the season, and the availability ofwater. The village water master, who is elected by the farmers and whotraditionally has different names in different regions, e.g., "Ulu-ulu" inCentral and East Java, "Ili-ili" in West Java, "Sedahan" in Bali, "RajaBandar" in North Sumatera and "Tuo Bando" in Central Sumatera, is responsiblefor the equitable distribution of the water within the tertiary block. Theulu-ulu is the head of the farm-level irrigation organization, and in Javagenerally is also allotted land from the "Bengkok." In some areas, anorganization called "Dharma Tirta" assists the ulu-ulu in carrying out thework of water management. "Dharma Tirta" means "devotion to irrigation work"- it is the rural irrigation unit. The traditional organization of a"Dharma Tirta" is shown in Figure 4.15 and is discussed in Appendix A of thisAnnex. The ulu-ulu has several assistant ulu-ulu, each controlling an areaof about 10 ha. The task of the assistant ulu-ulu is to distribute water inhis area and to supervise the work of member farmers. He is chosen fromamong the farmer members and is paid for his services in various ways. Hemay receive an allocation of "bengkok" land from the lurah, he may be paid incash or in terms of agricultural output or in labor. The magnitude of thesepayments varies between districts.

6. There is no doubt that there are considerable inadequacies in theoperation of systems at the tertiary level. Most of these arise from the factthat a very large element of voluntary "service" on the part of the farmersis called for. There are also other factors involved, not the least of whichis the urge to survive in an increasingly difficult economic situation. Themain problems that paddy farmers have, in greater or lesser measure, may besummarized as follows:

(a) Difficulty in organizing themselves, particularly when farmersfrom more than one village are involved. This is associated witha shortage of qualified staff.

(b) Declining interest in "gotong royong" or organized self-helpamongst villagers.

(c) Increasing commercialization in the rural sector, so that cashearning is becoming relatively more important, and there is areluctance to donate labor.

(d) Land ownership by people outside the authority of the "lurah."

(e) Shortage of water in many areas makes water-sharing difficult toadminister equitably.

(f) Difficulty in collecting fees to support the "Dharma Tirta"organization.

- 87 - - 87 - ~~~~~ANNEX 5Page 3

(g) Greater expectation of government assistance, as a result ofpromises of more equitable distribution of the national wealththat they have heard from time to time.

Specific Issues

7. The responsibility for and quality of water management at thevillage level varies and is at present under review by village authoritiesand the Ministry of Public Works. At the same time, the general standard ofmanagement and maintenance in national systems leaves much to be desired.Although most structures inspected by the mission in Java were in goodphysical condition, there were many signs of damage to canal banks throughhuman and animal activity seeking access to canal waters. There was evidencethat positive steps were being taken in various places to avoid furtherdamage, by the construction of specially designed watering pools for animalsand by providing stepladders for humans. However, much more needs to be doneif these projects are not to deteriorate to the point of requiring to berehabilitated in a few years' time. The single most serious problem notedwas that of siltation. This must be tackled as a national problem as itsseriousness cannot be overemphasized.

8. Siltation of irrigation canals arises mainly through deforestationin the watersheds of the rivers which supply water to the irrigation areas.This problem varies in severity from system to system, and in some areas hasreached such serious proportions that silt is actually entering the paddyfields and gradually building up field levels. If unchecked, this processcould eventually lead to the loss of command in such areas. A substantialproportion of maintenance funds has been allocated to countering the silta-tion problems. Silt removal by manual means downstream of such structures asare provided with silt-ejecting devices, and from canals, is much in evidence,and dredgers are at work in some primary systems. However, this is likely tobe a losing battle unless positive measures are taken to get to the root ofthe problem, namely, the continued deforestation of catchments, and the lackof effective erosion control at the headwaters of the various streams andrivers which serve the irrigated areas.

9. The main constraints to the improvement of operation and mainte-nance standards on irrigation projects are the lack of sufficient funds andtrained personnel, particularly at the lower levels. It is evident thatthere is a lack of motivation among O&M staff, who consider that maintenancework is not as "glamorous" as development work. There is also an attitude of"permissiveness" among irrigation officials who are often not sufficientlyfirm on matters of unsatisfactory maintenance and in dealing with problemsarising in water allocation between competing irrigation communities. Theseattitudes can only be changed by more frequent and direct involvement of themost senior officials of the DGWRD in O&M work. The normal tendency is fortop management to give priority to the planning, design and constructionaspects of projects as these lend themselves to straightforward evaluation ofsuccess or failure, whereas the lack of good and proper maintenance is notreadily evident since it often takes several years before its adverse effectsbecome apparent.

10. There is clearly a need for the DGWRD to formulate and strictlyfollow a policy which could cover at least the following aspects:

- 88 -ANNEX 5Page 4

(a) a clear statement from the top that irrigation works and equipmentare expected to be kept in continuous full working condition;

(b) priority in the selection, training and accelerated promotion ofthose officers who have a particular interest or talent in organiz-ing and carrying out maintenance work;

(c) provision for the periodic inspection of project equipment andworks by senior officers from headquarters;

(d) the establishment of periodic working sessions to discuss O&Mproblems as they arise;

(e) introduction of other incentives for higher standards of personalperformance, punctuality and adherence to targets of performance;

(f) -institutional arrangements for the follow-up by headquarters onthe implementation of the new policy; and

(g) appropriation of adequate funds for satisfactory maintenance.

11. Lack of regular maintenance of works leads to the continuousdeterioration of irrigation systems below their design capacity. This inturn results in continuous failure to achieve agricultural production targetsand economic benefits. Deferred maintenance of irrigation and drainagesystems tends to accumulate to the stage where local resources could beoverwhelmed and external assistance would then have to be sought again for"rehabilitation." It should be clearly recognized that most rehabilitationworks that have been carried out with Bank Group assistance and otherwise arein fact a direct result of the accumulation of deferred maintenance. It isthe mission's view that the Public Works Service should intensify its empha-sis on improving O&M standards. This would, inter alia, ensure:

(a) maintenance of high levels of production;

(b) the realization among the Public Works staff involved of the impor-tance of high standards of maintenance;

(c) realization among DGWRD management of the true cost of propermaintenance;

(d) a buildup in the villages of the expectation of a high level ofperformance by Public Works staff; and

(e) the development of better and more appropriate systems andorganization to suit individual projects.

12. The costs of O&M are financed from three sources: the CentralGovernment, the Provincial Government and through the village. The proportioncoming from these sources varies between provinces and between villages.

- 89 -ANNEX 5Page 5

Funding of Operation and Maintenance

13. One of the reasons frequently given for poor operation and main-tenance performance is the lack of funds; it is apparent that this consti-tutes a major component of the overall problem. However, further enquiryby the mission revealed that at the national level the financial problemoften arises more through delays in obtaining the funds than through in-sufficient funds being provided in the annual budget for the purpose. Themission was assured that if funds provided by the Central Government for O&Mpurposes could be made available directly to the Provincial Public WorksOffice rather than through the Provincial Government (which then passes itdown to the Provincial Public Works Office), much improvement could berealized. The delayed timing of fund releases has been the subject ofcomment by various missions in the past, but there is evidence from recentsupervision reports for Bank Group-assisted projects that improvements arebeing achieved. It is understood that timeliness of funding is still anissue in other projects.

14. The volume of O&M funds provided by the Central Government has beenincreasing annually over the past three years, even though it has been agreedthat O&M is the primary responsibility of the Provincial Government. For theyear 1975/76 a total sum of Rp 5.736 billion was provided by the CentralGovernment for O&M. This was increased to Rp 6.273 billion for 1976/77, andfurther increased to Rp 7.920 billion for 1977/78. More detailed data on theallocation of O&M funds to different projects show that Bank Group-assistedprojects receive allocations which are much greater than other Public Worksprojects. For example, PROSIDA projects and the Jatiluhur project arebudgeted at Rp 3,500 and Rp 4,200 per ha respectively in 1977/78. This com-pares with approvals for 1977/78 for all projects of about Rp 2,000 per ha.In addition, the Bank Group-assisted projects usually receive O&M fundson time. These differences are unfortunate and if they persist will probablymean that many other projects will fall due for rehabilitation sooner orlater.

15. Funds from the Provincial Government are obtained through the IPEDA("Iuran Pembangunan Daerah") tax which is collected from owners of land underLaw No. ll/PRP/1959. Taxes are levied at the rate of 5% of the net value ofproduction including a cost allowance for unpaid family labor. The allocationof the tax collected to irrigation varies throughout Indonesia. At the timethis report was being prepared the DGWRD was having discussions with theGovernment with the aim of reaching agreement on the allocation of at least30% of the IPEDA tax collections to operation and maintenance of the irrigationsystem. It is understood that the allocation at present is about 10%,although that figure would vary between provinces. This taxing arrangementat the Provincial level is instead of a formal water charge.

16. At the village level the funds for operation and maintenance, princi-pally for the tertiary and quarternary system, come from a variety of paymentsand gratuities, discussed earlier in para. 5. There is a lack of uniformityand formality at the village level, a matter which could be rectified by theestablishment of formal water user associations (see Annex 6).

- 90 -

ANNEX 5Table 1

INDONESIA


Operation and Maintenance Allocation by Central Governmentfor Public Works Irrigation Systems

Eligible Proposed ApprovedYear area Total Per ha Total Per ha

(ha) (Rp '000) (Rp) (Rp '000) (Rp)

74/75 3,659,050 5,854,480 1,600 5,854,480 1,600

75/76 3,859,722 10,977,150 2,844 5,736,000 1,486

76/77 3,655,845 9,033,900 2,671 6,273,850 1,716

77/78 3,966,188 14,750,474 3,719 7,920,444 1,997

78/79 4,009,066 15,076,414 n.a. n.a. n.a.

n.a. - not available.


- 91 -

ANNEX 5Appendix A

INDONESIA

IRRIGATION PROGRAMI REVIEW

Note on the Structure of "Dharma Tirta" and Water User Associations

1. The traditional "Dharma Tirta" organization was based on villageadministrative boundaries. The traditional structure (see Figure 4.15) hasthe following main characteristics;

(a) the lurah (village headman) is responsible to the villageconsultative assembly. This assembly has ultimate power in thevillage;

(b) the lurah is assisted by advisors on technical issues related toagriculture and irrigation;

(c) the lurah is assisted in his responsibility for village watermanagement by the "ulu-ulu desa". This person, together with thevillage security officer and the village secretary, form the centraladministrative unit for water management at the village level;

(d) the staff of the "Dharma Tirta" have direct access to the ulu-uludesa on technical matters.

2. The structure for a water user association (the water managementorganization being suggested by the Ministry of Public Works) is based ontertiary blocks rather than village boundaries. Tertiary blocks may crossvillage boundaries. This system has the following characteristics;

(a) the members of the water users association (the highest authorityof the association) appoint an "ulu-ulu vak" to manage the waterdistribution in tertiary blocks. This person becomes an executiveof the water users association; and

(b) where a tertiary block extends across village boundaries coordi-nation is achieved by a Board of Management made up of the villageheads (lurahs) concerned and prominent villagers. This Board inturn appoints an executive body to carry out day-to-day functions.

3. Water user associations will be discussed in more detail in Annex 6.

- 92 -ANNEX 6Page 1

INDONESIA


Farm Level Water Distribution and Water User Associations

1. While a number of institutional arrangements for water managementat the farm level exist in Indonesia today, the distribution of water tofarmers generally is not always efficient and frequently is inequitable./1The reasons for the unsatisfactory situation with respect to on-farm watermanagement are similar to those which have delayed the construction oftertiary and quaternary irrigation distribution systems (see Annex 4). TheGovernment has for some time been aware of the inefficiency of on-farm waterdistribution and has taken various steps to improve the situation. At theprovincial level the "Dharma Tirta" system was established officially inCentral Java in 1971 (see Annex 5 for a description of this system).The Central Government has also formulated the concept of "Water UserAssociations"./2 The purpose in establishing these associations is toformalize in a uniform fashion the existing traditional water managementunits and to establish the basis for the formation of associations where theydo not already exist.

2. The main feature of water user associations is that they providean administrative structure designed to ensure the efficient and equitablesupply, management and distribution of water to farmers' fields. It isenvisaged that these associations are formed on the basis of water supplyrather than village boundaries. Each association would have a policy for-mulating body (Board of Management) and an executive body to carry out theday-to-day functions. The board of management would be elected from themembership of the association and would maintain continuous liaison withvillage officials and the government institutions responsible for the supplyof irrigation water to the tertiary system (Provincial Public Works Offices)and the institutions responsible for technical advice such as the DirectorateGeneral of Food Crops and extension personnel.

3. It is apparent that the progress and efficient utilization oftertiary and quaternary water distribution systems is dependent not only onthe quality of design and construction of these systems, but also the manner

/1 See Series Research Report No. 14 "A Research on Water Management at theFarm Level: An Indonesian Case Study," by Research Institute in SocialSciences, Satya Wacana University, Salatiga, Indonesia, 1975. Thisreport discusses a number of water management systems in Bali and CentralJava and analyzes their strengths and weaknesses.

/2 Perkumpulan Petani Pemakai Air, (referred to as P3A) is the Indonesiantranslation.

- 93 -

ANNEX 6Page 2

in which they are used and maintained as well as the efficiency and equity ofwater distribution through these systems. The establishment of water userassociations should therefore be seen as an integrated part of the improve-ment and extension of the tertiary and quaternary irrigation systems. Themission therefore recommends that the DGWRD, the Provincial Public WorksService and the Ministry of Agriculture should continue to promote theestablishment of water user assoc'ations.

4. Progress in the establishment of water user associations has beenslow. Table 1 in this Annex shows that, even when those associations whichare in the process of being developed are included, they cover only about250,000 ha of the area under irrigation in Indonesia. The situation forPROSIDA projects only is shown in Table 2. While the Balinese subak systemis included in these tables, the data do not, however, cover those areaswhere there is at present a traditional water distribution system, charac-terized mainly by the "ulu-ulu" system (see Annex 5).

-94 - ANNEX 6Table 1

INDONESIA


Formal Water User Associations /a

Active Developing TotalProvince No. of asso- Member- Area No. of asso- Member- Area No. of asso- Member- Area

ciations ship covered ciations ship covered ciations ship covered(ha) (ha) (ha)

JavaW. Java 18 5,713 2,480 533 43,061 48,223 551 48,774 50,703C. Java 282 n.a. 26,000 39 13,324 4,180 321 n.a. 20,180Yogyakarta 36 2,310 2,190 31 1,384 686 67 3,694 1,871E. Java 37 6,149 5,762 416 48,302 21,956 453 54,451 24,146

Subtotal 373 n.a. 31,855 1.019 106,071 75,045 1,392 n.a. 106,900

Bali 1,222 132,508 100,586 - - - 1,222 132,508 100,586

SumateraN. Sumatera 4 660 1,855 49 6,259 15,436 53 6,919 17,291W. Sumatera 28 1,297 1,008 114 3,548 3,975 142 4,845 4,983Rian - - - 18 918 918 18 918/b 918Jambi - - - 22 513 4,642 22 513 4,642Bengkuhn - - - 4 338 338 4 338 338S. Sumatera - - - 9 1,522 3,132 9 1,522 3,132Lampung 3 1,147 995 3 114 600 6 1,261 1,595

Subtotal 35 3,104 3,858 219 13,212 29,041 254 16,316 32.899

KalimantanW. Kalimantan - - - 7 80 425 7 80Lb 425E. Kalimantan - - - 4 186 290 4 186 290

S. Kalimantan 4 80 315 23 874 2,569 27 954/b 2,884

Subtotal 4 80 315 34 1,140 3,284 38 1,220 3,599

SulawesiS. Sulawesi 7 2,375 950 5 121 500 12 2,496/b 1,450

Nusa TenggaraW. Nusa Tenggara - - - 5 218 200 5 218 200

E. Nusa Tenggara - - - 4 80 1,266 4 80/b 1,266

Subtotal - - - 9 298 1,466 9 298 1,466

Total 1,641 n.a. 137,564 1,286 120.842 109,336 2,927 n.a. 246,900

/a This listing does not include the traditional institutions which already exist to provide local village level controlover water management (e.g., "ulu ulu" systems which cover almost all irrigation systems in Java. The table doesinclude members of the "subak" systems in Bali.

/b Not all farmers within the area covered are members of Water User Associations.

Source: Subdirectorate of Land and Water Conservation, Directorate General of Food Crops, Ministry of Agriculture,January 1978. (Note: Some figures have been adjusted to make them consistent with separate data receivedfrom the Directorate General of Water Resources Development for PROSIDA projects presented in Table 2.)

INDONESIA


Formal Water User Associations in Some PROSIDA Project Areas

ProportionTotal Active Developing Total of project

?rovince Project name project No. of Membership Area No. of Membership Area No. of Membership Area areaarea associations covered associations covered associations covered covered(ha) (No.) (No.) (ha) (No.) (No.) (ha) (No.) (No.) (ha) (X)

TavaW. Java Cisedane 42,000 3 621 369 10 2,082 2,003 13 2,703 2,372 5.6

Rentang 93,000 12 4,693 1,820 128 37,930 15,172 140 42,623 16,992 18.3Ciujung 24,300 3 399 291 14 2,438 2,482 17 2,837 2,773 11.4Cirebon 89,000 - - - 370 n.a. n.a. 370 n.a. n.a. n.a.

C. Java Glapaii Sedadj 42,000 5 1,964 589 31 11,497 3,449 36 13,461 4,038 9.6Pemali Com.l 123,000 49 13,181 5,272 8 1,827 731 57 15,008 6,003 4.9

E. Java Pekalen Sampean 229,000 12 3,947 1,374 73 27,505 11,000 85 31,452 12,374 5.4Madiua 140,000 25 2,202 816 343 20,797 10,956 368 22,999 11,772 8.4

SumateraLampung Way Sepu i- 25,000 3 1,147 995 - - - 3 1,147 995 4.0

Sula-esiS. Sulawesi Sadai. 56,600 7 2,375 950 30 11,261 4,500 37 13,636 5,450 9.6

ource: PR05IDA, iha .--rate General of Water Resources Development (January 1978).

sma lxt

- 96 -

ANNEX 7Page 1

INDONESIA


Organization and Management of Directorate Generalof Water Resources Development

1. Rehabilitation and new development of those irrigation systemsfinanced by the Central Government is the responsibility of the DirectorateGeneral of Water Resources Development (DGWRD), which is a part of theMinistry of Public Works (MPW). At the regional level the responsibility forthe execution of irrigation development, as well as operation and maintenanceof existing irrigation systems, is the responsibility of the provincialorganization of the Ministry of Public Works through the Water ResourcesDevelopment Division of the Provincial Public Works organization. Any newirrigation development which is financed by the MPW is executed by theProvincial Public Works Office under the guidance and supervision of theDGWRD. For this purpose the DGWRD does have regional coordinating offices./IIn addition, the Minister may also establish additional project executivebodies to directly undertake special projects as .ecessary.

2. The organization of the MPWEP is shown in Figure 4.1 whilst thatfor the DGWRD is shown in Figure 4.2. Within the DGWRD, there are sixDirectorates which are organized by functions and comprise a Director with achief of staff and subdirectors. In addition, there is a Secretariat whichprovides overall management support and coordination assistance to theDirector General. Figure 4.3 shows the organization of the Secretariat to theDGWRD whilst Figures 4.4 through 4.9 show the organizational structure of thesix Directorates. In addition to the Directorates of the DGWRD there are atpresent four special project executive bodies, namely PROSIDA, P4S, Brantas,and Project Banjir./2 P4S may become part of PTPT./3 Even if this occurs it

/1 Regional offices ("Kantor Wilaya") are often abbrcviated to the acrony-1"KANWIL."

/2 PROSIDA is the acronym for Proyek Irigasi IDA which since 1968 has beenan executing body for IDA and IBRD projects. P4S is the acronym forProjek Pengembangam Persawahan Pasang Surut, which is the body created tostudy and execute tidal land development. The General Manager of theseexecutive bodies can be identical to the Director of a Directorate orcompletely separate. P3SA (Proyek Perencanaan Pengambangan Sumber - SumberAir - Proyek Jratunseluna) an executive body created to program andstudy water resources development, and P2AT (Proyek Pengembangan Air Tanah)an executive body responsible for nationwide groundwater investigations anddevelopment, have General Managers who are also directors. PROSIDA has aseparate General Manager.

/3 "Direktorat Penyapan Tanal Pemukiman Transmigrasi" (Directorate for LandPreparation for Settlement).

- 97 -

ANNEX 7Page 2

would still leave no less than nine separate heads of Directorates or specialexecutive bodies who are directly or indirectly responsible to the DirectorGeneral of the DGIRD.

3. Finally one more body should be mentioned. The Jatiluhur Authority(see Figure 2.1) is a semi-autonomous public agency established by theGovernment in 1970 to manage the multipurpose development of the Jatiluhurregion and to implement Credit 195. It is governed by the Ministry ofEconomy, Finance and Industry (MEFI) and its operations are managed by aBoard of Directors. The MEFI, in guiding the Authority and setting itspolicies for Jatiluhur development is assisted by a Ministerial Councilcomprising the Ministers of Public Works (MPW), Mining and Energy, HomeAffairs, Finance and Agriculture.

4. The Authority's Board of Directors consists of a President Director(Project Manager) and three Department Directors who have separate responsi-bilities for Irrigation, Electric Power, and Administration. The IrrigationDepartment Director's responsibilities include the Authority's agriculturalsupport, coordinating and programming activities. An Agriculture Advisorycommittee, comprising the Ministry of Agriculture's Director of ExtensionServices, three technical specialists and the head of the Irrigation Depart-ment Agriculture Section, counsels the Board on agricultural matters. Whilethe Authority is an independent body its close ties to the DGWRD result inconsiderable coordination of activities. This review has not suggested anychange in the structure or role of the Jatiluhur Authority. To a largeextent the establishment of the Authority was a special case and while theestablishment of such an authority in the future may be justified because ofsimilar multipurpose circumstances, the control of government irrigationdevelopment within one institution is probably preferable.

Staffing

5. The total staff of the DGWRD at present is about 4,000. Of thesesome 2,000 are accounted for by those who are on the permanent establishment,the remainder are employed on a temporary basis for specific projects. Mostof the professional employees are within the permanent establishment of theDGWRD, whereas most of the temporary employees are nonprofessionals (Table 5in Annex 8 gives further details).

Scope and Activities of the DGWRD

6. The scope of the work of the DGWRD covers the following mainareas:

(a) Irrigation and Drainage.

(b) Development and Reclamation of Deltaic and swampy areas,especially for agricultural purposes.

(c) Flood control, river training and river improvements.

- 98 -ANNEX 7Page 3

(d) River basin planning and development.

7. The DGWRD has an immense program of activities. Many of theseactivities are carried out by consultants (both foreign and local). Theprogram includes:

(a) The selection -and evaluation of new projects and the preparation ofthese projects for financing.

(b) Project implementation and coordination.

(c) Catchment management and erosion control.

(d) The establishment of improved and hydro meteorological networks forthe reporting of hydrological information and the processing ofthis information.

(e) Selection and preparation of new irrigation and tidal developmentareas for transmigration.

(f) Development of improved standards of construction.

(g) Development of improved operation and maintenance standards andpolicies.

(h) Improvement of tidal swamp reclamation techniques.

(i) Improving weed and silt control techniques in irrigation areas.

(j) Improved water management at the farm level.

(k) Liaison with farmers, farmers' cooperatives and provincial govern-ments with respect to irrigation development programs.

(1) Research and development of new techniques in construction andmaintenance procedures.

(m) Coordination with agricultural production, planning and developmentorganization and committees.

(n) Organizing training courses and scholarships for the purpose ofstaff improvement.

8. It is apparent that it will take many years to develop the highlevels of competence required to handle even a few of these activitiesefficiently. Even organizations which have a great depth of internalresources find it convenient and indeed essential to commission consultantsand universities to assist with part of their work, particularly the workinvolved with investigation, design and research. The use of outside

- 99 -

ANNEX 7Page 4

assistance to provide a stimulus to departmental staff ensures that projectsdo not suffer by diverting essential management personnel to investigationor design.

9. Nevertheless it is the mission's view that a situation should notbe created whereby the DGWRD will be dependent for all time on consultants todo all their technical work. Such a situation could be avoided by buildingup a team of specialists with the appropriate training and aptitude, whowould be given the opportunity for career advancement within the specialistservice without the need to move out into administrative positions.

Evaluation of Present Organizational Structure

10. The present organizational structure of the DGWRD on a functionalbasis, namely with Directorates responsible for planning and programming,rivers, swamps, irrigation and logistics does not lend itself to the bestuse of available skilled manpower. Indonesia is a large country wheredistances between project areas are great. Communications, while improving,are not yet well developed and it is extremely time-consuming to haveDirectors from headquarters visiting the same area, each one to look afterhis own particular sphere of work and needing to establish his own relation-ship with Public Works officers in each province. While the functionalbasis for the organization of the DGWRD might well have been appropriatewhen most of the irrigation developed was on Java, the future situation, inwhich much more of the activity will be located on the Other Islands, will,in the mission's view, highlight the fact that the current functional basishas a number of disadvantages. In addition the greater variety of futureprojects with the need to coordinate the various types of development withtheir competing demands on the available water resources emphasizes furtherthe need for coordinated operational activity within a region.

11. Apart from the problems of distance and liaison with regionalorganizations, there are a number of other disadvantages with the presentsystem. Not the least of these is the fact that, although all Directors areon the same grade, their workload and responsibilities vary considerablydepending on their functional responsibility. It was the conclusion of themission that these Directors do not really function as specialists in theareas of work for which they are responsible since their function is mainlymanagerial and administrative. Apart from the uneven load on differentDirectorates, the present organizational structure results in an enormousadministrative and executive burden on the Director General. This situationwas confirmed to the mission many times in discussions with DGWRD staff andis basically the result of the centralization of decision and managementactivity, and is exacerbated by the fact that the Director General is also amember of a number of advisory boards which provide overall management andadvice to the executive bodies such as PROSIDA and the Jatiluhur Authority.The mission concluded that the present framework of DGWRD organization isalready fully committed and does not allow for any expansion and diversi-fication of its activities except through the formation of new executivebodies. However, even the creation of executive bodies does not resolve theissue of intraregional coordination. Many of the projects have made slower

- 100 -

ANNEX 7Page 5

than expected progress; this underlined the mission's concern about thenumber, and quality and experience of staff and the relevance of the DGWRDstructure to its current and future tasks.

12. The DGWRD's planning and programming capability is not welldeveloped, it being diluted by a heavy involvement in matters such as theadministration of the development budget, design and construction in con-nection with river basin studies and groundwater development and liaison withother government departments (see Figure 4.4). The mission considered thatmore resources should be devoted to forward planning and that more of thisfunction should be carried out by DGWRD staff rather than consultants.

13. Finally, a comment about PROSIDA. The Bank itself, when it startedits lending program for irrigation, expressed concern with the capacity ofthe DGWRD to execute Bank project and consequently requested that a specialexecuting agency be established for the purposes of undertaking the planningand construction of Bank Group-assisted projects. As a result PROSIDA wasformed (see Figure 4.10). Although PROSIDA has become a strong and resourcefulorganization, planning and construction delays have occurred. At the sametime the existence of such a body within the DGWRD has created difficulties.Most discussions that the mission had with responsible officers indicate thatthe continued existence of PROSIDA within its present form needs to becritically examined. There is complete agreement that PROSIDA did have animportant role to play in the early days of the first IDA credits when theDGWRD was a fledgling organization. However, there is a strong feeling thatPROSIDA has now become an anachronism and an excuse for poor performance byofficers outside it. PROSIDA officers work different hours from otherofficers in the DGWRD, their rates of pay as well as overtime pay are moreattractive and they receive better fringe benefits than most other DGWRDemployees. Such differences which can also be seen in other executive bodiesare resented strongly by almost every other section of the DGWRD. Eventhough there are sound arguments for the differences between working conditionsof PROSIDA and other DGWRD officers (e.g. need to maintain higher standards,working with foreign languages), in the long run such feelings can do nothingbut harm to the organization.

Suggested Reorganization of DGWRD

14. For the DGWRD to cope with its future role it should, in the viewof the mission, carry out a reorganization based on a regional division ofresponsibilities and duties. The division suggested could be based eitheron the regional division already used for Water Resources DevelopmentPlanning and Management or on the Economic Management Regions used forplanning purposes. Either form of regional division would provide fourregions, work in each could be the responsibility of a Director. The revisedstructural arrangements envisage that each Directorate would be establishedvery much along the lines of PROSIDA at present. Each Directorate would havesubdirectorates responsible for planning and programming, implementation,operation and maintenance, logistics and hydrology.

- 101 -

ANNEX 7Page 6

15. The mission suggested to the Director General of the DGWRD thathis work would be assisted if he could have at his disposal two DeputyDirector Generals, one responsible for project implementation whilst theother would be responsible for planning and programming, technical servicesincluding hydrology, hydraulic research, design and development, logistics,operation and maintenance, training and general administration. However,discussions of the draft proposals with the Director General indicated thatthere would be substantial problems in the establishment of Deputy DirectorGenerals in the DGWRD because of existing government rules and proceduresrelated to the organization of government institutions. The mission'sconclusions were therefore modified to a certain extent. The suggestedstructural arrangement for the DGWRD is shown on Figure 4.12.

16. The suggested organization is based on the concept of dividing theactivities of the DGWRD on a regional basis. While each Directorate wouldstill be located in Jakarta and would be within the central governmentstructure there would be a significant reorganization of responsibilities.The Directorate of Planning, Programming and Design (Figure 4.13) would beresponsible for coordinating all surveys and investigations, planning andprogramming, design, construction, logistics (mainly procurement) and ope-ration and maintenance carried out by the four Directorates responsible forworks in each of the major regions. In this respect the planning and prog-ramming directorate becomes the overall planning and technical support armfor the DGWRD. Each of the Directorates responsible for works in the fourregions would have responsiblilities for technical support, logistics andoperation and maintenance, but would coordinate these functions with theDirectorate of Planning and Programming. The most important function of thisDirectorate will be to provide a focal point for long-term planning.

17. The major role of each regional Directorate of Works would be proj-ect implementation as shown in Figure 4.14. There would be a number ofsubdirectorates responsible for projects which could be projects of differenttypes e.g. tidal land development, gravity irrigation, and groundwater devel-opment. It will be noted in Figure 4.14 that the subdirectorates responsiblefor project implementation are depicted as having responsibility for 12 proj-ects. These projects, can of course, be further subdivided into subprojectsif the need arises. In addition, each project could be implemented in variousways, for example, by the use of consultants or by DGWRD staff. Basically,the objective would be to provide a coordinated management structure in orderthat project implementation regions can be effectively undertaken. Separateaccounts could be kept for each project or subproject. The most importantconsideration, in terms of the long-term capacity and capability of the DGWRDwill be the establishment of the "technical support subdirectorate" undereach Directorate of Works. These subdirectorates can be assisted by consul-tants in the early stages, but it should be the aim of the DGWRD to staffthem entirely with indigenous staff at an early date.

18. The sixth Directorate, that of Technical Services will remainsubstantially the same as the present Directorate of Hydraulic Engineering.The headquarters of this Directorate should, in the view of the mission,remain in Bandung as at present. It will be noted that the training functionhas been added to this Directorate. This has been suggested since there are

- 102 -

ANNEX 7Page 7

obvious advantages in having this Directorate somewhat removed from thehustle and bustle of project planning and implementation, to quietly undertakethe training function which is such an important aspect of the Department'soverall development in its goal of facing the increasing challenges of thefuture. In addition to the functions of the present Directorate of HydraulicEngineering the proposed directorate should also be responsible for settingstandards for all works throughout the DGWRD.

19. If the proposals outlined are accepted by the GOI, the transitionfrom the present establishment and organization to the new establishment canprobably be accomplished with a little dislocation of ongoing activities.All that would be immediately necessary would be for the existing directorsto revise their role of being responsible for one particular specialist areaand to consider themselves managers of the overall water resources developmentwithin a defined region.

20. As suggested earlier, the proposed division of the DGWRD would havesome attractive advantages which cannot be achieved by any other rearrangement.The Directorate of Works for a particular region would be the only one inday-to-day contact with provincial public works service in any province onany aspect of Water Resource Development falling within the purview of theDGWRD. This alone should help improve rapport between the DGWRD and theprovincial administration, which can do nothing but good for the Government'soverall plans to push ahead with water resources development in Indonesia.

21. The organization suggested will have the following direct advantagesover the present arrangements:

(a) The proposed organization lends itself to rapid expansion tocope with increased size and scope of work.

(b) The Director for each region would only have to travel withinhis region, i.e. on average a quarter of the area he does now.

(c) He would have to deal with only a limited number of ProvincialPublic Works Services, i.e. those situated within his region.

(d) He could organize farmer cooperation more effectively and achievebetter coordination as he would deal with all aspects of waterresources development within a region.

(e) Having a wider field of interest to cover, the staff within aDirectorate can more readily be moved around according to anindividual's aptitude for any particular work.

(f) There is more opportunity for Directors to compare notes andto learn from one another's mistakes, the Directorate of TechnicalServices can coordinate this function and resolve questions rela-ting to standards of construction.

- 103 -

ANNEX 7Page 8

(g) The workload can be readily adjusted so that it is more evenlydistributed among the Directorates, simply by changing theboundaries of regional responsibility.

(h) The suggested structure provides a better basis for managementcontrol over the progress of projects because all functionsconcerning the implementation of a project in a region are theresponsibility-of one directorate.

22. If the reorganization suggested is implemented it is proposed thatthe Director General, together with his Assistant Director General (or theDeputy Director Generals if they can be established) and Directors constitutethe Water Resources Development Planning Council. This council should meetfrom time to time under the chairmanship of the Director General to planfuture development, discuss and resolve major problems and decide on policy.

23. Insofar as projects financed by the Bank Group are concerned theywould be treated in the same way as any other projects and would be handledby the Director of the Region in which the project occurs. In effect thereforethere will be four Prosida's instead of one. The reorganization would alsoenable more officers of the DGWRD to be involved in project preparation,planning, implementation and operation and maintenance, thus giving themconfidence to identify new projects for Bank financing. The arrangementwould also give the Director General an opportunity to consider the overalloperation of the DGWRD and critically examine its future development to copewith the ever increasing need to improve and expand irrigated agriculture inIndonesia.

24. In addition to the reorganization suggested above, it is essential,in order to increase the investigation, planning and implementation capacityof the DGWRD to meet foreseeable needs, that the following measures be takenurgently:

(a) Continue to build up the hydrological and meteorological datacollection system with a view to preparing a national (or basin orregional, as a first step) Water Resources Inventory.

(b) Institute an official management information system, so thatinformation on performance is readily available to top managementin order that, if necessary, timely remedial measures can betaken.

(c) Strengthen the staffing in the Provincial Public Works Service,both in quality and in numbers.

(d) Initiate soils surveys in areas earmarked for early development.

(e) Place more emphasis on manpower planning and training programs.

(f) Move more rapidly with the collection of socioeconomic databoth on rehabilitated projects, and on projects that are in thepipeline in order to facilitate project planning and preparation.

- 104 -ANNEX 7Page 9

(g) Critically examine some of the financial procedures thatapparently cause delays in procurement of equipment and supplies.

25. These proposals for the reorganization of the DGWRD are presentedhere in broad terms. The detailed arrangements would need to be formulatedseparately once the overall principle has been accepted. The mission suggeststhat, if a reorganization is to be implemented, the changes be guided andmonitored by an advisor who is external to the DGWRD, but who has longexperience in the organization and management of similar institutions.

Alternative Organizational Structure

26. The mission seriously considered a number of alternative organiza-tional forms for the DGWRD. Some alternative arrangements were also sug-gested by the Director General. In principle the other organizationalforms suggested would retain the functional division of the DGWRD, with eachfunctional directorate subdivided on a regional basis. Included in thealternative proposals were a split of the large Directorate of Irrigationinto two separate Directorates, incorporating PROSIDA in the split. In otherwords there would be a subdirectorate (or in the case of Irrigation, Direc-torates) responsible for major regions. While such an arrangement would bemore consistent with existing government guidelines on the organization, ofgovernment institutions, it would not overcome the major problems which themission sees with the existing arrangements, namely that it results inreduced scope for coordination of water resource developments at the regionallevel and does not avoid duplication of activities by directors in variousregions. There remains the real possibility of uneven workloads betweendirectorates, the need for frequent consultation between directorates in thecourse of project implementation, and finally it would not allow for theexpansion and diversification of DGWRD activities unless special executivebodies are formed.

-105 -

ANNEX 8Page 1

INDONESIA


Training Needs of the Directorate General of Water Resource Development

Introduction

1. The 1975 Irrigation Program Survey noted that while there were afew first-class instititions in Indonesia for training of engineers andagriculturalists, the output was well below national requirements. Trainingfacilities for middle-level technicians was assessed at that time as beingqualitatively and quantitatively inadequate. Although the capacity ofuniversity and diploma-level institutions has increased since 1975, one ofthe major constraints on the implementation of an increased long-term nationalirrigation program continues to be the shortage of trained manpower.

2. This review of training is limited to the Directorate General ofWater Resources Development (DGWRD) staff, particularly engineers. However,the general conclusions also apply to the staff of the Provincial PublicWorks Offices who are associated with much of the work of the DGWRD. Theshortage of skilled staff affects both design and implementation capacity fornew schemes as well as the effective operation and maintenance of thoserecently rehabilitated.

3. Before discussing the scope of training activities an importantpoint relating to responsibility for training activities should be made.Presidential decree No. 15, 1974 states that formal training for governmentemployees be the responsibility of the National Institute of PublicAdministration; training of nongovernment employees would be the respon-sibility of the Department of manpower; and general training and education isthe responsibility of the Department of Education. The DGWRD, therefore, hasno authority to conduct formal training activities although it can providein-service training which does not lead to formal qualifications.

University-Level Training for Engineers

4. The Ministry of Education's current estimate of the output ofgraduate civil engineers is 150 a year, principally from the Institutes ofTechnology at Bandung (ITB) and Surabaya (ITS), as well as Hasanuddin Univer-sity. That Ministry estimates the annual output is unlikely to exceed 500 by1985. Moreover, the majority of civil engineers are absorbed by the privatesector, particularly in the field of construction, where the salary incentivesare much higher than in Government. Consequently, the needs of the Government,of which DGWRD forms only a small part, are not being met. For subprofessional

-106 -

ANNEX 8Page 2

staff, the main sources of recruitment are the senior technical high schools(STM). While the laboratory and workshop facilities of some of these schoolsare being upgraded (often with assistance from the Bank, other internationalagencies and governments), the majority of them lack adequately trainedteachers.

Current Training Arrangements in DGWRD

5. The DGWRD, like other units of the Ministry of Public Works (MPW),recognizes that the education system cannot yet produce sufficient qualifiedmanpower and has therefore initiated both pre-service and inservice trainingschemes for engineers and technicians.

6. Pre-Service Training. DGWRD awards scholarships to students intheir undergraduate years at seven higher level institutions /1 to attractthem to work in water resource development. By 1977, 74 graduates from thisscheme had joined the DGWRD. Through DGWRD initiative and funding, specia-lized degree courses in hydraulic engineering were established at BrawijayaUniversity in 1975 and Gaja Mada University in 1977. About 30 graduates ayear are expected to join the Directorate General by 1981 from these 2universities. At the technician level, a six-month course for graduates ofsenior technical higher schools (STM) is run by DGWRD to provide more specia-lized training prior to their recruitment. The Directorate-General alsomanages and finances further training of STM graduates and also trainsundergraduates at technical school (ST) level in Jogyakarta which providescourses specifically oriented towards the needs of the irrigation services.

7. In-service Training. The three-year water resources course at theInstitute of Technology, Bandung is one of the most important in-servicetraining programs for DGWRD staff./2 This is one of eight parallel coursesin building construction, highway engineering, electrical engineering,etc. Participants require about 5 years post-STM experience in the DGWRD andcurrently 76 students are enrolled in the first year of the course. They areselected from provincial, project and headquarters staff. Fifty-two arestudying water resource engineering. Most of the remainder are enrolled inmechanical engineering and geodesy courses. Many of the instructors aredrawn from the Ministry of Public Works staff, and, as is common in manyeducational institutes in Indonesia, only work as part-time lecturers.Annual entry has expanded from 16 in 1975 to 76 in 1977. Upon the successfulcompletion of the three-year course, students are awarded a Bachelor ofIrrigation Engineering (BIE), a diploma-level qualification. Since themajority of engineering staff in the provincial irrigation services /3 and a

/1 Institutes of Technology, Bandung and Surabaya, Gaja Mada, Diponegoro,Parahiyangan and Pajajaran Universities and the University of Indonesia.

/2 This course is financed by the Ministry of Public Works.

/3 In East Java Province in 1976, 64 out of 102 higher technical staff(engineers, surveyors, etc.) were holders of the BIE.

-107 -

ANNEX 8Page 3

number of headquarters staff are graduates of these courses, this trainingconstitutes a very important part of the staff-upgrading program. Partici-pants are normally bonded to serve in Public Works for six years. Unfor-tunately, the mission did not have an opportunity to assess the quality ofthe course work or its relevance to the DGWRD's needs. ITB also runs a14-month postgraduate training course for engineers in the DirectorateGeneral of Roads and Highways, the management of which is coordinated by theITB and the MPW.

8. On the Job Training. Training courses for irrigation foremen (jurupengairan) have been run for a number of years in several provinces as well asa more intensive course at the Ministry of Works Training Center at Surabaya.The latter, partly in response to one of the recommendations of the lastIrrigation Program Survey, has been expanded with Bank financing to includeaudio-visual (AV) programs. Although the latter are still in the pilot stage,testing the relevance of course content, building up a series of lessons anddeveloping the technical capacity to reproduce training material, the programseems to have considerable potential, not only for juru pengairan training,but also for use in the agriculture sector and even in the Agricultural HighSchools (SPMA). Certain problems need to be resolved, however, before theprogram can be expanded through the provinces. The initiative in design andassessment of the training should be taken by Indonesian rather than as atpresent by expatriate staff. In addition, it is necessary to make a carefulassessment of the practicality of using sophisticated AV equipment before theprograms are extended to other provinces.

9. Training of Indonesian engineers by consultant staff has becomemore widespread. However, consultants often find that their training function,which they generally seem to accept, takes second place to the engineeringtask partly because of time pressure. Moreover, partly because counterpartsmay not be assigned on a permanent basis and partly because they lack thenecessary technical background, the benefits of such training are limited.This form of "incidental" training is not an adequate substitute for longerterm formal training.

10. Overseas Training. An important component of the in-service programis the wide range of overseas courses financed by bilateral and internationalaid agencies. These courses vary considerably in duration and scope. Table 1gives an indication of the range of these courses and the countries which areproviding them. In the selection of staff for overseas training, a majorconstraint has been the limited knowledge of English of many DGWRD middle-levelstaff. Special English classes are organized to prepare engineers for suchcourses.

11. These overseas courses financed under bilateral and internationalaid programs have improved the skills of DGWRD staff. However, the wide rangeof course content, location and duration of training gives the impressionthat this type of training is rather haphazard and does not form part of asystematic training plan. Often, selection for overseas training is regardedas an award for past services rather than as a specific means of upgrading

-108 -

ANNEX 8Page 4

skills. The DGWRD needs to ensure that overseas courses meet its priorityneeds, and it would be useful to develop closer links with some overseasinstitutions - such as has already been done with Delft /1 - so that the coursescan be tailored to the needs of DGWRD staff. Much of the technical assistancefinanced by the Bank and other agencies has been piecemeal and thereforestimulated this dispersion of effort. One of the recommendations of the lastProgram Review - short visits to Malaysia and other neighboring countries ofmiddle-level staff - has been of limited success partly because lack offorward planning has prevented these visits from being focused on specificpractical problems.

Future Training Needs

12. Despite the strenuous efforts made by DGWRD over the last fiveyears to expand training programs, there are four questions which need to beaddressed - manpower planning, operational policy alternatives, the organiza-tion of training and the provision of an adequate budget for training.

13. Manpower Planning. There appears to be no formalized system forprojecting the future needs of graduate engineers, other specialists (such asgeologists and surveyors) or technicians. Understandably, the DirectorGeneral's most pressing priority is 'to staff the growing number of developmentprojects while maintaining a minimum level of competence in the provincialcadres. Nevertheless, the magnitude of rehabilitated schemes in Java demon-strates the need to estimate future manpower requirements by level of responsi-bility and qualifications. A consultant study of O&M in East Java concludesthat "present staff members should suffice for all irrigation service worksincluding O&M, but a major reorganization and intensive training of availablestaff is needed... The level of staff at provincial headquarters is adequate,but assignment of technical staff to administrative and data collection workis wasteful."/2 It was suggested to the mission by DGWRD staff that thissituation also applied in other provinces. Although this study is stillunder review in the province, these quotations indicate that the size andfocus of training programs must be preceded by policy decisions. Themission did not consider it useful to extrapolate future staff needs for theprovince or on a national basis from the area/staff ratios in the consultantreport because the ratios may not be accepted as optimum for that provinceand variations in terrain and nature of irrigation systems preclude suchextrapolation. Nevertheless, this is an example of one basis for manpowerprojections, although the mission was unable to ascertain if this method isused in the DGWRD for forward planning.

14. Operational Policy Alternatives. There are a number of policyissues which underlie the development of training programs. For example:Does DGWRD intend to expand its own design, research and construction super-vision capacity or does it propose to continue to rely to a large extent onexpatriate consultant firms? What will be the demand for trained manpower(both engineers and technicians) in the provincial cadres if rehabilitated

/1 Technische Hogeschool te Delft, the Netherlands./2 Table 2 gives some manpower/area relationships in East Java.

-109 -

ANNEX 8Page 5

systems are to be maintained at an efficient level? Is the long-termobjective to have graduate engineers (Insinyur) for divisional engineers(Kepala Daerah) or will BIE's be equally effective? Are the replacement/wastage rates at engineer and tehnician level in DGWRD the same as the figure(4% to 5%) used by PUSDIKLAT for the Ministry of Public Works? These questionsmay have been addressed by senior management, but the mission did not find anyevidence that the Personnel and Training Divisions were aware of a policy onthese matters.

15. Organization of Training. The Center for Education and Training(PUSDIKLAT) /1 in the MPW is responsible for both the planning of thetraining needs of the three Directorates General (Water Resources, Highways,Housing, Building and City Planning) and managing the five Regional PublicWorks Training Institutes. Each Directorate General has a training departmentwith a small planning staff. Although PUSDIKLAT's experienced director has agood appreciation of the training needs of the Ministry, he is handicapped bythe lack of specialist staff in training technology as well as by an acuteshortage of funds. The executive responsibility for specific trainingprograms rests with the Directorates General. This is a practical solutionbecause each of them is such a large institution. However, PUSDIKLATshould be given greater authority to standardize courses, to assess theeffectiveness of all training programs and to expand its capacity to developtraining techniques. In the DGWRD, the Training Division needs at least one,possibly more, experienced engineers to assist the head of the Division inthe planning and evaluation of training courses both in Indonesia and overseas.The Director General should consider the establishment of a standing committeeon training which could consist of his six Directors, the head of PUSDIKLATand representatives of ITB, and at least one major consulting firm. It isessential that the Division have sufficient support staff to administer themany programs.

16. Training Budgets. The budgets for training are inadequate.Despite requests for increased training budgets, it appears that BAPPENAS hasrepeatedly cut the proposals. By way of illustration, it is noteworthy thatwhile the total Ministry of Public Works budget grew from Rp 45.7 billion toRp 248 billion between 1970-71 and 1977-78, PUSDIKLAT's budget fell fromRp 327 million to Rp 235 million. The DGWRD chose to send engineers toHolland for an 11-month course rather than conducting the course in Indonesiapartly because the cost of the training (Rp 3.0 million per participant) wasbeyond the resources of the budget. Travel of the Training Division staffhas to be paid from operational division's funds. There is a need forIndonesian textbooks and manuals; the mission understands that a number ofexperienced engineers would be prepared to write textbooks. However, thereis little or no budget for incentive payments or production costs. In viewof the magnitude of the language problem, an increased allocation of fundsfor this purpose could pay dividends in operational work as well as in theacademic institutions.

/1 Pusat Pendidikan dan Latihan Tenaga kerja.

-110 -

ANNEX 8Page 6

Conclusions and Recommendations

17. The mission concludes that:

(a) The effective supply of professional engineers available to the DGWRDfalls far short of the effective demand. The DGWRD is at present notonly competing against other directorates general for engineers butit also competes against an expanding demand for engineers in theprivate sector. It is unlikely that the DGWRD can appreciablyincrease its recruitment from the formal training institutionsunless it expands its scholarship system for undergraduates orimproves salaries.

(b) The Ministry of Public Works and Electric Power has trainingprograms in a number of its Directorates General, some of whichhave received financial support and technical assistance personnelunder Bank Group and other loans. Such support, while undoubtedlybeneficial, has tended to distract attention from the need forcomprehensive plans based upon future expanded investment in newand sometimes different types of projects as well as growingoperation and maintenance demands.

(c) The investment proposed during the next five to ten years in newsystems as well as in operation and maintenance of existing systemswill be of limited effectiveness if the staff required to design,supervise and operate such systems are inadequately qualified.DGWRD should undertake a comprehensive and systematic review of itsmanpower needs and in the light of those needs and the output ofthe education system, design an appropriate recruitment and trainingprogram.

18. The mission recommends that:

(a) The Ministry shouid define the respective responsibilities ofPUSDIKLAT and the Directorates General in the MPW for the planningand implementation of training schemes.

(b) DGWRD should review its long-term manpower needs. This reviewwould take into account such factors as:

(i) future total manpower needs; and

(ii) minimum training, experience and types of qualificationsrequired.

(c) The DGWRD should review the long-term supply prospects for engineersand technicians. This review should take particular account of:

(i) the output from the formal education system;

ANNEX 8Page 7

(ii) the extent to which graduates could be influenced to join theDGWRD through scholarships or other incentives;

(iii) the extent to which upgrading of existing staff could providethe manpower needs

(d) The DGWRD should review its recruitment policy. This reviewshould include an examination of:

(i) salary levels and conditions of employment as they affectrecruitment;

(ii) the type and number of scholarships;

(iii) the use of short-term local and overseas consultants forparticular tasks;

(e) The DGWRD should consider the establishment of a standing committeehaving representatives from within and outside the organization.The committee should be responsible for:

(i) reviewing long-term plans for all training programs;

(ii) assessing the effectiveness of such programs;

(iii) establishing contacts with major institutions supplyingengineers and technicians for the Directorate General and, ifappropriate, recommending changes in curricula;

(iv) evolving a program for the use of existing technical talentand make recommendations concerning funds required for writing,testing and publication of Indonesian textbooks and manuals;

(v) review the possibility of expanding A-V programs for jurupengairan (irrigation foremen) to all irrigation provinces,the SPMAs and the Ministry of Agriculture;

(vi) consider and if appropriate draft proposals for the establish-ment of a training center for DGWRD staff in conjunction withthe reorganization proposals discussed in Annex 7.

- 112 -

ANNEX 8Table 1

INDONESIA


Overseas Training

This table is intended to illustrate the diversity of courses andcountries and number of staff affected. It does not give a comprehensivereview of all current overseas training.

Departures in the First Nine Months of 1977

(a) Course length

Duration of courses No. staff Man-years

One month 38 3.2Two months 13 2.2Three months 4 1.0Four months 9 3.0Six to nine months 7 4.1Twelve months 12 12.0Two years 10 20.0

93 45.5

(b) Principal countries in which courses are being attended

No. ofCountry courses

Japan 15 Mostly short courses with consultants head offices rangingin duration from one week to four months.

UK 6 One month to a year including courses in rural developmentadministration at Bradford University and 2 one-yearcovering irrigation engineering.

Philippines 4 Short 1-3 week courses on such topics as village irrigation(sederhana). In some cases visits included Taiwan.

USA 5 Short courses on seduhana irrigation (AID project andvisits to consultants Head Offices).

Netherlands 1 Hydrometry and Survey. In addition, 33 engineers left forDelft in November for 'a 12-month course in water management.

Canada 2 Two-year courses in water resource planning and economicsfive persons) and applied hydraulics (five persons).

Also courses in Egypt, Thailand, Italy and Korea.

INDONESIA


Comparison of Staff and Irrigation Work in East Java

Head District Section SubsectionType of staff office Biggest Average Smallest Biggest Average Smallest Biggest Average Smallest

Office staffNontechnical 101 29 25 18 12 10 12 2 2 1Technical 48 37 14 9 18 16 5 2 1 1

Total 149 66 39 27 30 26 17 4 3 2

Field staffIrrig. foreman 178 26 21 16 8 5 4 1 1 1Irrig. subforeman 1,321 177 162 151 41 35 30 10 6 4Laborer 4,352 1,055 356 414 149 135 90 49 24 12

Irrigation system

Irrigation area('000 ha) 898 139 111 67 38 25 22 7.2 5.3 3.7

Length of govern-ment canals (km) 5,385 632 198 750 115 213 23 68 35 11

Storage reservoirs 141 5 - 1 - - - - 1 -

Control structures 11,536 1,660 1,117 890 335 539 628 67 48 27

Rainfall stations 798 102 101 59 17 30 19 5 2 4

Source: Hunting & McDonald (East Java Team) Operation & Maintenance Study, April 1975.

o' z(bXm


INDONESIA


District and Section Staffing in East Java

Staff numbersIrrigation area Office staff /a Irriga- Irrigation Gate ope-

Fully Non- tion fore- subfore- rators &District Section Total tech. Tech tech Total man man laborers

MalangMalang 18,051 7,820 7 12 19 4 28 86Repanjen 27,359 15,576 11 11 22 5 44 130Kasri 22,052 13,924 5 12 17 4 30 90Pasuruan 20,668 9,457 8 7 15 4 32 93

Total 88,130 46,777 5 15 20 17 134 399

KediriKediri 29,140 15,278 12 10 22 7 57 73Nganjuk 38,801 32,628 17 8 25 7 57 108Tulungagung 30,202 11,061 23 9 32 7 49 120Blitar 31,667 16,242 16 13 29 6 50 61

Total 129,810 75,209 20 20 40 27 213 362

JombangJombang 24,351 19,524 6 6 12 5 54 175Mojoagung 23,199 20,884 5 5 10 5 51 154Paree 19,367 14,461 5 6 11 6 46 85

Total 66,917 54,869 9 18 27 16 151 414

MojokertoMojokerto 32,324 15,056 11 10 21 9 76 141Sidoarjo 33,077 31,968 11 9 20 8 70 178Wonokromo 5,356 1,996 4 4 8 2 22 97

Total 70,757 49,020 21 31 52 19 168 416

LumajangLumajang 34,616 18,647 15 7 22 7 50 116Probolinggo 19,161 15,915 6 8 14 4 36 146kraksaan 17,916 12,086 6 7 13 3 27 98Taoggul 22,441 19,053 9 6 15 5 35 88

Total 94,135 65,701 14 17 31 19 148 448

BondowosoBondowoso 25,018 14,004 11 7 18 5 39 76Jember 32,636 22,725 13 11 24 6 47 87Rawatamtu 28,919 21,010 13 11 24 5 41 58Situbondo 24,689 21,271 16 10 26 5 35 135

Total 111,262 78,010 14 25 39 21 162 356

BanyuwangiBanyuwangi 23,433 16,613 16 10 26 4 26 59Genteng 20,026 19,348 9 11 20 3 27 84Benculuk 22,526 22,526 11 10 21 4 26 57

Total 65,985 58,587 9 19 18 11 77 200

Mad iunMadiun 28,183 23,164 40 18 58 5 41 293Barat 37,261 28,754 -20 20 40 7 51 316Ngawi 36,040 26,181 21 17 38 6 44 297Ponorogo 37,725 24,116 18 12 30 8 41 149

Total 139,209 102,215 37 29 66 26 177 1,055

BojonegoroBojonegoro n.a. n.a. 9 8 7 8 37 242Lamongan n.a. n.a. 6 9 15 8 30 384

Total 105,381 28,462 16 19 35 16 67 526

Madura (District & Section) 24,488 17,331 7 14 21 4 24 176

/a Nontechnical staff includes district logistic section.Nontechnical staff such as drivers and watchmen, etc. are not included.

n.a. - not avaiable.

Source: See Table 2.

- 115 -

ANNEX 8Table 4

INDONESIA


Irrigation Area Per Head of Staff in East Java

Irrigation area perNontechnical staff Technical staff Ratio of non-

Irrigation Irrigation technical staffsub- fore- to total irri-

District Laborer foreman man Section District gation area-------------------- (ha) ---------------------

Malang 221 658 5,184 2,843 17,626 0.32

Kediri 359 609 4,808 1,909 6,490 0.28

Jombang 162 43 4,182 4,182 5,147 0.18

Mojokerto 170 421 3,724 2,721 3,369 0.10

Lumajang 210 636 4,954 2,615 6,724 0.18

Bondowoso 313 687 5,298 2,099 7,947 0.20

Banyuwangi 331 857 6,000 1,833 7,332 0.09

Madiun 132 786 5,354 1,406 3,762 0.19

Bojonegoro 200 1,573 6,586 7,025 6,586 0.29

Average 233 630 5,121 2,959 7,595 0.20

Source: See Table 2.

INDONESIA


Summary of Staffing of Directorate General of Water Resources Development /a

Engineers Other Professions NonDirectorate Status of staff 4-yr degree 5-yr degree 4-yr degree 5-yr degree Subtotal professional Total

Secretariat General Permanent civil servant 32 5 56 43 136 175 311

Temporary employee - 2 1 4 7 67 74

Total 32 7 57 47 143 242 385

Directorate of Planning Permanent civil servant 81 43 22 12 158 33 191

& Programming Temporary employee 21 45 2 13 81 91 172

Total 102 88 24 25 239 124 363

Directorate of Rivers Permanent civil servant 109 61 15 31 216 126 342

Temporary employee 14 71 2 28 115 187 302

Total 123 132 17 59 331 313 644

Directorate of Swamps Permanent civil servant 61 49 15 31 156 104 260 1Temporary employee 11 1 5 7 24 66 90

Total 72 50 20 38 180 170 440 a

Directorate of Irrigation b Permanent civil servant 184 160 38 28 410 149 859

Temporary employee 17 46 3 13 79 1,236 1,315

Total 201 206 41 41 489 1,385 1,874

Directorate of Logistics Permanent civil servant 15 32 3 3 53 77 130Temporary employee - - - 2 2 30 32

Total 15 32 3 5 55 107 162

Directorate of Hydraulic Permanent civil servant 52 31 I 1 85 125 210

Engineering Temporary employee 22 - 15 7 44 193 237Total 74 31 16 8 129 318 447

Total Permanent civil servant 534 381 150 149 1,214 789 2,003

Temporary employee 85 165 28 74 352 1,870 2,222

Total 619 546 178 223 1,566 2,659 4,225

/a April 1978, except for "nonprofessional" which are as at January 1978.

/b Includes PROSIDA.


a zMD X

kpo

- 117 -

ANNEX 9Page 1

INDONESIA


Potential for Further Irrigation Development orRehabilitation of Existing Systems

1. This annex draws on information derived from an inventory ofirrigation systems identified for future development or rehabilitationprovided by the Directorate General of Water Resources Development (DGWRD).The scope of potential future development discussed here does not representthe aggregate of all possible development, rather it covers only thoseprospective irrigation and reclamation developments which have been identi-fied by the Directorate of Planning and Programming following a survey of allprovinces. Therefore, the projects included in the inventory of developmentpotential are those envisaged by DGWRD (but not yet programmed) for RepelitaIII and well beyond. For most of these projects, even preliminary feasibil-ity analyses do not exist. The basic source of the information on which thisannex is based are data supplied by provincial offices of the Ministry ofPublic Works (MPW).

Areas for Potential Development

2. Table 1 shows the service area of potential development by provinceand type of project./l The most striking feature of Table 1 in this annexis the total area under consideration: roughly 5.7 million ha, of which4.0 million ha (about 75%) is new irrigation development, 0.3 million harehabilitation and 1.3 million ha of swamp and tidal land development. Thescope of the new development potential can best be appreciated by comparingit to the estimate of existing service area of Public Works systems (4.0 mil-lion ha) and the area of Public Works systems currently under construction(1.0 million ha), together about 5.0 million ha. In other words if thepotential for expansion of Public Works systems indicated in Table 1 can berealized, then this would more than double the present service area.

3. The distribution of potential projects in terms of service areabetween Java and the Other Islands is also shown in Table 1. With therehabilitation of major works nearing completion or under way, only about20% of the area targeted for rehabilitation is on Java. Almost all of thenew development of gravity systems is planned in the Other Islands, of which63% is on Sumatera. Potential swamp and tidal swamp developments are predom-inantly in Sumatera and Kalimantan and make up 1.3 million ha (about 30%)

/1 A number of dams are proposed for Java, and have been classified as "newdevelopments" even though they would serve existing irrigation systems,with benefits resulting from increased cropping intensity.

- 118 -

ANNEX 9Page 2

of the total new development prospects. Groundwater projects have a fairlylow prominence in DGWRD planning,except for areas already heavily populatedand lacking alternative water supplies. This is largely due to inadequatedata on the geological and hydrological characteristics of the groundwaterresources and doubts concerning the ability of users to maintain pumpingfacilities. A number of studies are at present being undertaken by theDGWRD, some with Bank assistance,/l designed to investigate the technicaland economic feasibility of groundwater development in Java and the OtherIslands. While a conservative attitude to groundwater development prevailsat present there are widespread expectations that this will be a valuableaddition to water supplies in the future particularly in the dry season.

Available Data Base for Future Irrigation Development

4. Few of the potential projects included in the DGWRD inventory inTable 1 have been made the subject of feasibility studies, and many may notbe justified on technical or economic grounds. Furthermore, for most of theprojects indicated in Table 1, neither information on the suitability ofsoils and climate for irrigated agriculture nor the magnitude and reliabilityof water supplies is available.

5. Soils. According to the information provided to the mission, soilsurvey coverage to date in Indonesia can be characterized approximately asfollows:

Type of Survey % of Indonesia

Semidetailed and detailed 1Reconnaissance 25Exploratory 34Schematic 40

6. FAO, in collaboration with the Soils Research Institute, Bogor,between 1972-74, made a "land capability" appraisal of the soils of all ofIndonesia. The mapping was at a scale of 1:2,500,000 and admittedly was a"desk study" which incorporated many "unconfirmed estimates." The study wasdesigned to indicate the areas considered promising (and not promising) formore detailed follow-up studies of agricultural potential and was not intendedto designate the quality of soils. There are several reports available whichdescribe in much greater detail the principal kinds of soils that are availablefor development. One of these reports is "Soils for Agricultural Expansion inIndonesia" (Soils Research Institute, Bogor, 1974). The descriptions givenare of the "Great Soil Groups" as recognized in the more popular soil classi-fication systems (e.g., Seventh Approximation of the USDA, the World Systemof FAO and the Indonesian System). However, it should be emphasized that

/1 See Bank Loan No. 1434.

- 119 -

ANNEX 9Page 3

each of these soil groups covers a wide range of characteristics, physicaland/or chemical; in most cases the range is so wide that it is impossible todesignate the agricultural suitability of such a group. For example, soiltexture rarely is considered to be an important parameter at the Great Soil'Group level, although clearly it is vital in rating a soil as regards itsagricultural suitability, particularly for irrigation. Likewise such parame-ters as soil slope, drainability, salinity, fertility, erodability, etc., mayvary so widely within a Great Soil Group as to cover the full range of soilsuitability from Class I to Class VI (unsuitable for agriculture). Thus,determination of suitability or the potential of the soils of a particulararea for agricultural development and the appraisal of their productivityrequires careful examination in the field, supplemented by analyses of soilsamples and interpretation of laboratory and field test data, the kind andamount depending upon apparent or potential constraints to crop production.

7. The survey of potential projects (see paragraph 1 of this annex) bythe Planning and Programming Directorate of the DGWRD covered some 520 projectareas throughout Indonesia. The survey extended to about 6.2 million ha andincluded a preliminary description of soils to determine their suitabilityand priority ranking as regards irrigation rehabilitation and/or development.The Soils Research Institute, Bogor, provided the mission with the scale atwhich existing soil surveys for the project areas identified were available,the scale being a good index of the detail and the likely usefulness of asoil survey for project planning and appraisal purposes. The results of thecompilation were as follows:

Scale of No. of Total % in eachsoil survey project areas hectares group

1:10,000 2 10,500 0.21:50,000 19 966,000 15.51:100,000 55 219,000 3.51:200,000 5 160,000 2.61:250,000 139 1,492,000 23.91:1,000,000 299 3,393,000 54.3

Total 519 6,241,000 100.0

8. These figures show that about 85% of the total area under considera-tion has been surveyed at a scale greater than 1:100,000; this compares withrecommendations by most experts and organizations that soil surveys for deter-mination of land irrigability be made at a scale of 1:12,000 or larger. However,where the soils are relatively uniform or the development problems are quitesimple, a scale as small as 1:50,000 may in some cases be satisfactory. Soilsurveys at scales smaller than 1:50,000 usually do not provide sufficient infor-mation for project planning, design or appraisal. On this basis only 4% ofthe project areas comprising about 16% of the land in the above inventory couldpossibly be at a scale satisfactory for project planning and/or appraisal,and it is almost certain that the soils problems for some of the areas


surveyed now at a scale of 1:50,000 or larger are so complex that the existingsurveys are not satisfactory for project planning.

9. Consideration of the preceding leads to the inevitable conclusionthat insufficient soils information is available in most proposed or potentialproject areas for design or appraisal or even to establish a reasonable orderof development priorities except perhaps where irrigation rehabilitation isbeing planned. The mission therefore recommends that if GOI is intending tocontinue its irrigation development and if, as indicated in Table 1, most ofthis development is likely to be new areas, then increasing attention willneed to be given to careful and detailed soil surveys of potential irrigationareas. To do this, the GOI should increase its capacity for carrying outsoil surveys of potential development areas at an appropriate developmentscale and detail commensurate with the known or potential appraisal problems.This should be done as soon as possible so that project planning, design andappraisal will not be delayed by lack of soils information known to beessential. As a component of this planning for soil surveys, the missionconsiders it essential that soil survey contracts be accompanied by terms ofreference which will ensure that the information required for project plan-ning will be obtained and that the information will be analyzed and presentedin a uniform manner. Suggested general terms of reference for such surveysare provided in Appendix B to this annex.

10. Hydrology. The Institute for Hydraulic Engineering, which isresponsible to the Director General for Water Resources Development, hasgradually been increasing its capability in the collection, compilation andpublication of hydrologic records. Technical assistance has been provided bythe UNDP aimed largely at institutional development and implementation of anational hydrologic network. However, at present, only a negligible propor-tion of the potential future projects have adequate hydrological informationfor their planning, and design.

11. A component of Irrigation XI (see Annex 4) is directed at speedingup the establishment of a nationwide network of hydrologic and climaticmeasurement stations by financing the acquisition of equipment and technicalassistance. The number, type and location of hydrologic and climatic measure-ment stations included in the program were determined from the coordinatedneeds of the individual agencies under the DGWRD. The automatic data proc-essing and printing equipment are supplemental to existing equipment andrepresent requirements to eliminate a backlog of from five to seven years inthe compilation and publication of hydrologic data.

Capital Costs of Possible Future Irrigation Development

12. Assuming that quality of soil and water supplies can be assessed,then the costs and benefits for conventional run-of-the-river gravity irriga-tion systems can probably be estimated with reasonable accuracy on the basisof experience. The cost of new developments in areas where irrigationsystems have not been built before will undoubtedly be more difficult toestimate. Cost estimates for rehabilitation projects should pose littledifficulty. However, there is still significant uncertainty concerning the

- 121 -

ANNEX 9Page 5

development costs of swamp and tidal land developments. The types of drain-age, the water control mechanisms, the optimum cropping pattern and croppingcalendar, the best varieties and their input requirements, the most efficientwater management and many other related questions are all the object ofintensive investigations at present.

13. Despite the difficulties involved in making an accurate costestimate for different types of development, some broad assessment of thecost indicated by the inventory of potential projects may be useful if onlyto underline the magnitude of the program envisaged by the DGWRD. RecentBank reports appraising irrigation projects in Indonesia have estimated thecost of rehabilitation of conventional run-of-the-river gravity systems,including the cost of tertiary development, can range between $1,000 and $2,000per ha (mid-1978 prices). Development costs for new gravity systems inIndonesia including the construction of a storage vary considerably in termsof cost per ha serviced; however, recent experience, together with informationavailable from feasibility reports for future projects, suggests a range ofcost between $2,500 and $3,500 per ha serviced.]1 So far as swamp or tidalswamp development is concerned cost estimates need to be even more tentative.The information available to date suggests development costs in the range of$1,000 per ha to $1,500 per ha./l Applying these estimates to the inventoryof future possible projects identified by the DGWRD suggests a total develop-ment expenditure of about $14,400 million in mid-1978 prices.

/1 No account is taken in these estimates of the cost of power generationor flood control. This estimate does not include the cost of transportand housing for transmigrants. It includes the cost of physical contin-gencies, but not price contingencies.

- 122 -

ANNEX 9Page 6

Type of irrigation Average unit Estimated totaldevelopment /a Area capital cost/b capital cost/b

(m ha) ($/ha) ($ m/ha)

Gravity- New development/c 4.02 3,000 12,060- Rehabilitation 0.30 1,500 450

Subtotal 4.32 12,510

Swamp and tidal 1.28 1,500 1,920land development

Total 5.65 14,430

/a Groundwater development is not included in this table since informationon potential area and costs is very uncertain.

/b Mid-1978 prices, excluding costs associated with the transport andsettlement of transmigrants, but including physical contingencies. Costsdo include an allowance for land clearing and leveling where applicable(see Annex 10, Tables 10, 11 and 12).

/c Some would include storages. These would be of varying sizes; theaverage unit capital cost assumed would allow for some storages.

14. Table 2 shows that while all rehabilitation work can probably beachieved relatively quickly (five years would not be an unreasonable expec-tation), the new development work will clearly need at least 30-40 years andprobably longer before it could all be fully completed. By way of compari-son, it is perhaps useful to recall the achievements during Repelita I andII, Table 2.4 in the main text shows that during Repelita I, DGWRD rehabili-tated about 190,000 ha per year and achieved about 38,000 ha of new develop-ment. As suggested in Annex 4, much of the work was not actually completedduring Repelita I and was carried over to the next Five Year Plan. DuringRepelita II it is likely that some 100,000 ha of rehabilitation (probably ofa higher quality than during Repelita I) will be finished with perhaps anaverage of 75,000 ha of new development and 50,000 ha of tidal land develop-ment per year.

Impact on Rice Production of Irrigation Development Potential

15. The impact of the irrigation development potential on rice produc-tion in Indonesia is made difficult not only by uncertainties about thepace at which development will proceed, but also by doubts concerning farmer


response to the availability of irrigation facilities, the extent to whichfarmers use improved crop inputs, their crop management capacity, climaticfactors, and the capacity of farmers to combat disease and insect attack.However, using assumptions about incremental production similar to those usedin recent Bank appraisals of irrigation projects as a basis, the impact ofthe potential irrigation development is estimated as leading to an incre-mental annual production of about 18.7 million tons paddy or about 11.8 mil-lion tons of rice./l In addition the production of other crops such as corn,soybeans and vegetables would also be expected to increase. Table 3 providesthe basis of the increased rice production estimates, the table below pro-vides a summary.

Type of irrigation Incremental yield Incrementaldevelopment Area of rice annual rice production

(million ha) (ton paddy/ha) (million ton paddy)

Gravity- New development 4.03 2.0 16.10- Rehabilitation 0.30 1.0 0.60

Subtotal 4.32 16.70

Swamp and tidal landdevelopment 1.28 1.5 1.92

Groundwater 0.05 1.5 0.07

Total 5.56 18.69

16. Any estimate of the rate of irrigation development in the futurewill need to take into account the projects started during Repelita III (moredetails concerning this issue are given in Annex 11). It is the mission'sconclusion that, given changes in the organization of the DGWRD (see Annex 7)and sufficient financial resources, it should not be unreasonable for theGOI to plan for a steady program of 500,000 ha of new conventional gravityirrigation development, and 250,000 ha of swamp and tidal land developmenteach 5 years as well as some 100,000 to 300,000 ha of rehabilitation whichwould be predominantly the rehabilitation and construction of tertiarysystems. This future activity could be structured as a five yearly rollingprogram with development of any particular area usually being started in onefive-year period and completed in the next. However, on average it is to be

/1 The conversion ratio used here to convert paddy to rice (0.63) is ofcourse likely to improve over time and hence when the projected develop-ment is achieved the resultant rice production, given the assumptions,may well be much higher than 11.8 m tons.


expected that in any one year the engineering work for 100,000 ha of newgravity irrigation and 50,000 ha of swamp and tidal development would becompleted which will then come into full production about five years later.

17. Leaving aside the impact of rehabilitation work (which in thelonger run should be absorbed into improved maintenance activities), it canbe expected that the annual increase in paddy production, or its equivalentfrom these development activities will amount to a tctal of 475,000 tonspaddy or about 300,000 tons rice per year. The annual cost and impact ofthis development on the growth rate of paddy production in Indonesia is shownin Table 4. Also shown in the table are the implications of two alternativelevels of future irrigation development, one less than and the other greaterthan the mission's suggested expectations.

18. Although there are obviously many other options in terms of devel-opment strategies and rates of development, the above table makes the generalimplications of various planning scenarios quite apparent./l For the pur-poses of this report it can be assumed the future growth rate in demand forrice is in the vicinity of 4% p.a. It is apparent from the previous tablethat such a growth rate will not be achieved through irrigation developmentunless the implementation capacity of the DGWRD can match the mission'ssuggested expectations, 100,000 ha of new gravity systems and 50,000 ha ofswamp and tidal each year, and a continued annual growth area of rice produc-tion from existing irrigation systems and dry land areas of at least 3% p.a.The budgetary implications are also apparent. When the cost of river andflood control ($135 million)/2 and overheads ($125 million or 25% of costs)are added, a total annual budget of about $635 million (1978 prices) isindicated if the production expectations are to be achieved. This costcompares with a budget for the DGWRD during 1977/78 (including foreigndisbursements) of $425 million and a likely expenditure during 1978/79 ofabout $520 million. The conclusions from this broad analysis are clear: thefuture budget for the DGWRD will need to be increased in real terms by about20% if the GOI is to achieve a continuing growth rate in rice productionwhich will meet the anticipated future growth rate in demand. It is the viewof the mission that the present organizational structure of the DGWRD is notin a position to cope efficiently with the increase in the megnitude andscope of activities which such an enlarged program requires.

/1 These issues together with the role of nonirrigated crops will beexplored in more detail in another sector study, namely "The SupplyProspects for Major Food Crops."

/2 The DGWRD budget for flood control was $120 million in 1977/78 and is setat $165 million in 1978/79.


INDONESIA


Areas Identified for Possible Future Irrigation Development(Service areas)

Gravity /a SwampNew and Ground-

Island/Province development Rehabilitation Subtotal Tidal water Total…----------------__________---- (Ha) -…-- - - - - -

JavaW. Java /b 82,040 32,801 114,841 1,870 - 116,711C. Java - - - - 40,000 40,000Yogyakarta 2,459 - 2,459 - - 2,459E. Java 77,704/b 35,085 112,789 - 8,600 121,389DKI Jakarta - - - - - -

Subtotal 162,203 67,886 230,089 1,870 48,600 280,559

Bali 13,628 300 13,928 - - 13,928

SumateraAceh 251,912 22,256 274,168 55,000 - 329,168N. Sumatera 65,800 11,150 76,950 84,100 - 161,050W. Sumatera 241,254 12,916 254,170 69,900 - 324,070Riau 687,978 20,022 708,000 293,800 - 1,001,800Jambi 181,031 6,469 187,500 - - 187,500Bengkulu 160,110 4,890 165,000 55,000 - 220,000S. Sumatera 271,398 1,002 272,400 38,600 - 311,000Lampung 667,100 5,000 672,100 55,000 - 727,100

Subtotal 2,526,583 83,705 1,994,200 651,400 - 3,261,688

KalimantanW. Kalimantan 181,200 17,800 199,000 225,000 - 424,000E. Kalimantan 143,650 1,350 145,000 95,790 - 240,790C. Kalimantan 352,110 4,885 356,995 25,449 - 382,444S. Kalimantan 6,660 240 6,900 272,800 - 279,700

Subtotal 683,620 24,275 707,895 619,039 - 1,326,934

SulawesiN. Sulawesi 133,789 10,911 144,700 2,415 - 147,115C. Sulawesi 96,401 16,218 112,619 - - 112,619S. Sulawesi 121,835 11,465 133,300 - - 133,300S.E. Sulawesi 6,975 2,925 9,900 - - 9,900

Subtotal 359,000 41,519 400,519 2,415 - 402,934

Nusa TenggaraW. Nusa Tenggara 82,680 8,425 91,105 2,000 - 91,305E. Nusa Tenggara - - - - - -

Subtotal 82,680 8,425 91,105 2,000 - 91,305

Maluku 164,450 - 164,450 - - 164,450

Irian Jaya 32,820 73,065 105,885 - - 105,885

Total 4,024,984 299,175 4,324,159 1,279 48,600 5,651,353

/a The term is used here to include conventional "run of the river" gravity and pumpsystems.

/b Mainly areas to be served by proposed dams; irrigation systems already in existence.

Source: Directorate General of Water Resources Development, July 1978.

INDONESIA


Indicated Construction Capacity for Completion of Potential Irrigation Development /a

New Swamp & Tidal GroundItem development Rehabilitation Subtotal development water Total

------------------------------------ (ha/year) --------------------------------…

Potential irrigationdevelopment (ha) 4,025,000 299,200 4,324,200 1,278,600 48,600 5,651,400

Development periodfor completion by:/b

10 years 402,500 29,920 432,420 127,860 4,900 565,140

15 years 268,300 20,000 288,300 85,200 3,200 376,800

20 years 201,300 15,000 216,200 63,900 2,400 282,600

25 years 161,000 12,000 173,000 51,100 1,900 226,100

30 years 134,200 10,000 144,100 42,600 1,600 188,400

35 years 115,000 8,500 123,500 36,500 1,400 161,500

40 years 100,600 7,500 108,100 32,000 1,200 141,300

/a Base year = 1978. Irrigation development, both new development and rehabilitation amountedto some 230,000 ha per year during Repelita I and about 170,000 ha per year during the firstthree years of Repelita II.

/b Area which would need to be developed annually to achieve total potential area in the number X Mof years indicated. Total may not add due to rounding. I %

- 127 - ANNEX 9Table 3

INDONESIA


Estimated Paddy Rice Production Which Could Result From Potential Irrigation Development

IncrementalPotential Assumed paddy yields /b Estimated annual paddy production paddy production

Type of irrigation service Without With Without With With less withoutdevelopment area /a Present Xc development development Present development development development

ha --- ----- (ton/ha)-- -------- - (million tons) ------- …---

JavaGravity

- New development/d 162,200 1.0 2.0 4.0 0.16 0.32 0.97 0.65- Rehabilitation/a 67,900 2.5 3.0 4.0 0.17 0.27 0.41 0.14

Subtotal 230,000 0.33 0.59 1.38 0.79

Swamp and tidal dev./f 1,900 1.0 2.0 3.5 - - -Groundwater 48,600 2.0 2.0 3.5 0.10 0.10 0.17 0.07

Total 280.600 0.43 0.69 1.55 0.86

Other IslandsGravity

- New development/d 3,862,800 1.0 2.0 4.0 3.86 7.73 23.18 15.45- Rehabilttation/e 231,300 2.5 3.0 4.0 0.58 0.93 1.39 0.46

Subtotal 4,094,100 4.44 8.66 24.57 15.91

Swamp and tidal dev./f 1,276,700 1.0 2.0 3.5 1.28 2.55 4.47 1.92Groundwater - - - - - - -

Total 5,370,800 5.72 11.21 29.04 17.83

IndonesiaGravity

- New development /d 4,025,000 1.0 2.0 4.0 4.03 8.05 24.15 16.10- Rehabilitation /e 299,200 2.5 3.0 4.0 0.75 1.20 1.80 0.60

Subtotal 4,324,200 4.88 19.25 25.95 16.70

Swamp and tidal dev. /f 1,278,600 1.0 2.0 3.5 1.28 2.56 4.4B 1.92Groundwater 48,600 2.0 2.0 3.5 0.10 0.10 0.17 0.07

Total 5,651,400 6.26 11.91 30.60 18.69

ia From Table 1.

/b For simplicity incremental yields in wet and dry seasons assumed the same. See footnotes 1c and /d for assumptions on croppingintensity. Some totals may appear incorrect because of rounding.

/c Estimates of productivity in the present are more than usually difficult since the present status of many of these potential develop-ment areaa is not known. With rainfed and upland paddy areas together amounting to only about two million ha at present, it isclear that many of the areas identified for new irrigation development are currently not producing rice. The present yield figureis hence intended to be more in the nature of an estimate of productivity in terms of rice equivalents.

/d It is assumed that all new developments will have a final cropping intenstty of 150%, compared with only 100% without the develop-ment and at present.

/e Rehabilitation projecta assumed to achieve 1501 cropping intensity at full development and 133% without development and 100% atpresent.

/f Swamp and tidal projects are assumed to have 100% cropping intensity at present and in the future.

- 128 -

ANNEX 9Table 4

INDONESIA


Broad Outline and Implications of Suggested Future Irrigation Program

Mission's Mission's Mission'slow suggested /a high

Item Unit expectations expectations expectations

Projected Average Annual Completion Rate- Gravity ha/yr 80,000 100,000 120,000- Swamp and tidal ha/yr 40,000 50,000 60,000

Total ha/yr 120,000 150,000 180,000

Cost of development /b- Gravity $ million/yr 240 300 486- Swamp and tidal $ million/yr 60 75 90

Total $ million/yr 300 375 576

Additional paddy production /c- Gravity ton/yr 320,000 400,000 480,000- Swamp and tidal ton/yr 60,000 75,000 90,000

Total ton/yr 380,000 475,000 570,000

Average annual growth ratein production (1978-2000)/d- zero growth rate with-

out projects % 1.4 1.7 2.0- 3% growth rate withoutnew projects x 3.8 4.0 4.2

/a These expectations assume a change in the organization of the DGWRD alongthe lines indicated in Annex 7.

/b Using the expected development costs assumed in the table followingpara. 12. Does not include price contingencies. Estimates in 1978prices.

/c Using the increment between expected production with and without irriga-tion development assumed in Table 3.

/d These are the average annual growth rates which result when the estimatedincremental production from investment indicated in the table is added tothe expected production between 1978 and year 2000. Two assumptions aremade about the growth rate of future production without the indicatedinvestment. It is first assumed that there will be no growth in produc-tion without these new projects, secondly that there will be a 3% growthrate without these new projects. Ongoing and Bank Group-assisted projectare assumed to be part of the total development program.

- 129 -

ANNEX 9Table 5

INDONESIA


Tentative List of Proposed Storage Projects on Java

Estimatedactive

Name of storageproject River Province (mln cu m)

Jatigede Cimanuk West Java 1,500Matenggeng Cijolong/Citanduy West Java 415Manenteng. Cisanggarung West Java 248Ciamis/Cikembang Citanduy West Java 163Pangkalan Cibeet West Java 950Parungbadak Cisedane West Java 200Jragung Jragung Central Java 133Ngrambat Serang Central Java 195Glapan Tuntang Central Java 364Wonogiri Bengawan Sala Central Java 660Mrica Serayu Central Java 180Maung Merawu/Serayu Central Java 370Karangsambung Lukulo Central Java 300Bantarkawung Pemali Central Java 661Cijangkelok Cisanggarung Central Java 264Karang Anjar Comal Central Java 304Bantarsari Pemali Central Java 253Jipang Bengawan Sala East/Central Java 920Bendo Madiun East Java 86Badegan Madiun East Java 138Palasari Tukad, Sengiang, Gede Bali 15

Total . 8,319/a

/a Total storage availability of this magnitude would probably be sufficientto irrigate about 500,000 ha of rice per year under Javanese conditions.


- 130 -

ANNEX 9Appendix A

INDONESIA


List of Criteria Used by DGWRD in Selection of Projects for Local Financing

1. The following main criteria are used:

(a) Priority should be given to quick-yielding projects located in ornear the consumption centers.

(b) The soil should be suitable for rice production.

(c) The quantity and quality of water available.

(d) Manpower for agriculture is not a problem.

(e) No problems in transporting the products to consumers.

(f) No problems in land ownership.

(g) No problems on flood or at least the flood can be controlled easily.

(h) The project site should be easily controlled.

(i) And other factors which will enhance the implementation.

2. Further guidelines in executing prxojects are outlined as follows:

(a) Due to comparative shortage of funds, the budget should be used inthe first place to rehabilitate the irrigation structures, whilecanals should be rehabilitated as much as possible by means of"aided self-help," especially in densely populated rural areas.

(b) In these areas construction work should be done mainly and in thefirst place by manual labor, while equipment should be used only tosupport manual labor where necessary.

(c) Where equipment is needed for new construction works or largerehabilitation projects, loans for foreign currency will be obtainedfrom international lending agencies or donor countries.

(d) It is the Government's policy that tertiary canals should be dug bythe farmers themselves, based on plans and design made by theproject. Assistance may be given for the construction of tertiarystructures and heavy parts of the canals only. (To some extent theGovernment's policy on farmer involvement in the construction oftertiary canals is being modified as the Government becomes moreclosely involved financially with tertiary construction).

- 131 -ANNEX 9Appendix BPage 1

INDONESIA


Terms of Reference for Soil Surveys in Potential Irrigation Areas

1. One of the features of future irrigation development in Indonesiais that most projects will be in areas which have not been used for irrigatedcrops and in many cases have not even been used for agriculture. One of theimportant issues to be considered in the planning for these irrigationdevelopments is the suitability of the soils for irrigated crops.

2. A review of the Terms of Reference (TOR) used in Indonesian soilsurveys shows that-most are similar, regardless of marked differences in soilcomplexities, crop production and project development problems and surveyobjectives. Moreover, none of the TOR's specifically require presentation inthe survey reports of the kinds of summary data and specific recommendationsregarding measures to be taken to overcome soil constraints during projectplanning and/or project implementation. The reports produced in the pastvaried widely in usefulness, and even the more useful ones were at times toogeneralized to provide the specific information needed by planners andengineers.

3. It should be emphasized that the results of any soil survey can bepresented in a manner both understandable and useful to planners and engineers,but this will be done only if the desired information is specified in detailin the terms of reference. Also, it should be noted that appropriate termsof reference can be drawn up only after a highly skilled soil surveyor hasmade an initial reconnaissance study of the project area and has identifiedthe principal crop production constraints, both permanent and,remediable, aswell as the detail required in the survey so that the major issues can beanalyzed and resolved.

4. The TOR must be flexible, making it the responsibility of theorganization undertaking the survey to investigate soil characteristicsor problems not identified in the reconnaissance survey. The participation ofboth planners and engineers in reviews of the original TOR is obviouslyimportant for maximum utility of the soil survey results.

Broad Content of Terms of Reference L1

5. The following items should be explicitly covered in the terms ofreference for soil survey contracts:

L1 To a large extent these suggestions are based on proposals alreadyput forward by the Soils Research Institute, Bogor.

- 132 -

ANNEX 9Awpp,dix BPage 2

(a) Objectives - The objectives and type of survey should be specified.

(b) Location - The survey area must be clearly indicated on a mapwith sufficient physical reference points to locate the boundaries.

(c) Nature of the Proposed Project - The major expected farming orother enterprises of the project should be indicated.

(d) Working Base - Aerial photographs, mosaic, topographic map or planetable. The TOR should state the minimum acceptable scale for thesoil maps.

(e) Maps Required - Indicate the soils, vegetation, current land use,topography, potential land use and land classes, specifyingthe criteria used for the classification.

(f) Design of Rentis Layout - This should be determined by the surveyorsafter preliminary analysis of the available information.

(g) Intensity of Observations - Under average conditions one soilobservation per 12.5 ha is likely to be adequate for a 1:25,000scale presentation. The intensity will, however, vary according tothe nature of the terrain, complexity of the soil patterns and theobjectives of the survey.

(h) Methods of Soil/Land Survey, Classification - Methods of survey tobe employed and the types of land classification to be presentedshould be agreed between the client and the soil surveyor.

(i) Soil Sampling - One or more soil profiles should be fully describedboth chemically and physically for each major soil mapping unit andadditional analyses should be done as required by the nature of theproblems encountered. Where additional analyses are needed, thesamples should consist of the surface 30 cm and three additionalsamples to a total depth of at least 1.5 m.

(j) Final Survey Report - In addition to presenting the materialrequired in the TOR and outlined above, the mission calls attentionto the fact that the items which are of paramount importance toplanners and engineers and which seldom if ever have been includedin Indonesian soil survey reports are:

(i) summary tables of the areas affected by each separate and bycombinations of soil constraints (e.g., salinity, waterlogging,thickness of peat, acid sulphate, fertility status, etc.);

(ii) indication, in the case of each constraint or combination,of the proportion of the areas slightly, moderately andseverely affected;

- 133 -

ANNEX 9Appendix R BPage 3

(iii) the cost in qualitative or semiquantitative terms of removingeach of these constraints;

(iv) the economic and social benefits, both immediate and future, inqualitative or approximate quantitative terms (e.g., theincreases in crop yields) that would result from the removalof each constraint or combination; and

(v) specific recommendations from the soil surveyors for ameliorationor reclamation of each category of affected land, subject ofcourse to confirmation by more detailed economic analyses.


INDONESIA


Economics of Potential Future Irrigation Development

1. The purpose of this Annex is to contrast and compare the econom-ics of the major types of future irrigation development in Indonesia (seeAnnex 9). The types of development considered here are conventional, run-of-the-river gravity irrigation development, tidal land development, and alarge storage-based irrigation development based on a large storage. Threebasic models for these types of development are evolved in this annex. Twoof these basic models apply to hypothetical, but realistic situations inSumatera. The third (the large dam development) applies to a situation inJava./l Because the water resource developments examined in this annex arerelatively new to Indonesia, it is inevitable that the analysis which followsis to some extent speculative. However, where possible, the results andexperience of the initial pioneering developments that do exist have beenused to provide the basis for assumptions made.

2. Method of Analysis. Because of the lack of data on developmentcosts for the hypothetical models, the analysis concentrated on assessingthe maximum level of development cost which will still allow the project toachieve a predetermined economic rate of return./2 Using this approach itwas possible to derive the present value of the total cost stream. Thisimputed cost estimate, defined in terms of the present cost (mid-1978 prices)per ha of development, then became the assessed maximum allowable develop-ment cost assuming that the predetermined economic rate of return is to beachieved.

3. Indicative project costs based on best estimates are given inTables 10 and 11. The cost estimates utilize unit rates and actual projectcost experience elsewhere, adjusted to the assumed project model conditions.These indicative cost estimates, stated on a per hectare basis, can becompared with the imputed costs resulting from the analysis for each modeldescribed above.

/1 While "Sederhana" or simple irrigation projects are an important partof the Government's portfolio of potential future irrigation development,the economics of these projects were not considered here because thecharacteristics of these projects are so variable, that typical casesare impossible to define. It should perhaps be noted here that theDGWRD is currently engaged in a systematic analysis of many potentialsederhana projects with a view to ranking them for future financing andconstruction.

/2 It was assumed that 15% would be the minimum acceptable economic rate ofreturn. This is an arbitrary benchmark and does not imply any judgmentabout Bank policy nor of the opportunity cost of capital in Indonesia.

- 135 -

ANNEX 10Page 2

4. Both the conventional new irrigation development in the OtherIslands and the tidal land reclamation projects analyzed in this annex arepioneer projects in that much of the area to be developed is currently virginland and unsettled. A number of assumptions are therefore possible concern-ing alternative future uses for the project area in the absence of theproject. In this analysis, however, it is assumed that the future develop-ment of the project area without the project will be a continuation ofcurrent land use trends, usually timber cutting and hunting.

5. A more detailed investigation of the likely future alternative usefor the project areas would probably show that the area set aside for theconventional irrigation project would have more development alternatives thanthe tidal areas, some of which could possibly yield equally favorable socialand economic rates of return. It is beyond the scope of this review toexamine in detail the relative economic merits of alternative developmentpossibilities. In the case of the model for the large storage-based damdevelopment on Java, in addition to making assumptions about future incomesfrom the target area without the project, it is necessary to make assumptionsabout losses of production and relocation costs because of dam construction.

Conventional (Run-of-the River) Irrigation Development

6. Characteristics of the Model. The basic model is patterned after astraightforward, run-of-the-river project with no special distinguishingcharacteristics. A project size of 10,000 ha net is assumed./l A project ofthis size is large enough to realize economies of scale with respect tomobilization of equipment and manpower, and to the provision of adminis-trative and support services.

7. The project model assumes a location in western Jambi province,in central Sumatera. The general location, poorly developed, with a lowpopulation density and little infrastructure, has been designated by theGovernment as one of the major future transmigration receiving areas in thenation. A prereconnaissance survey by the Directorate General of WaterResources Development (DGWRD) in this general area has found that there arelikely to be sufficient water supplies to support irrigation projects ofthe scale proposed in this analysis. Characteristics of the project site,which may become increasingly common to rural development in islands otherthan Java, are remoteness from major population and market centers, poorlydeveloped transportation and marketing systems, with substantial landclearing and land development requirements.

/1 10,000 ha suitable for paddy cultivation, net of project infrastructure,house plots, etc.

- 136 -

ANNEX 10Page 3

8. The basic farm holding is assumed to be 1.25 ha of which 1.0 ha isin paddy (Sawah) land, detached from a house/garden lot of 0.25 ha. Afarm holding of this size is consistent with recent irrigation projectsdeveloped for transmigrants on the Other Islands./li

9. All benefits assumed in this model are derived from agriculturalproduction, 95% of which is derived from irrigated rice cropped at anintensity of 150% at full development. About 5% of the net value of cropproduction is derived from mixed garden and tree crops grown in the house/garden compound.

10. Purchased inputs, crop production costs, labor requirements, riceand fertilizer prices and a farm budget during the development period aregiven in Table 1, 2, 3, 4 and 5. The yield assumptions, shown in Table 5 arebased on those used in Bank appraisal reports for projects with similar, ifnot inferior, soils. Improved standards of management, the use of HYV rice,good water control and a high standard of supporting agricultural servicesare assumed for the future.

11. While the assumed cropping intensity at full development (150%) isgreater than cropping intensity assumed for some Bank appraisals of run-of-the-river projects elsewhere in Indonesia, many of the potential locations forirrigation development in the Other Islands have relatively more, and betterdistributed, rainfall and hence more regular river streamflow than in Java.It is expected that the more attractive physical environment would enable ahigher average cropping intensity than in Java. Also, the catchment areasare, as a rule, well-forested and siltation in the lower reaches of mostrivers has not yet become a major problem; with conservation of the catchmentit should not become a problem in the future.

12. The labor requirements for crop production are supplied mainly byfamily labor although for transplanting and harvest the use of some hiredlabor is assumed. Land preparation is done by hired draft animals on a con-tract basis. Should the farmers be able to purchase draft animals in thefuture, direct land preparation costs could be reduced.

13. Net Benefits Without the Project. The net income foregone from theproject area because of the project will depend on assumptions made concerningthe present and future use of the land. Based on general land use conditionsin the vicinity of the hypothetical project being modelled in this example,the future situation without the project can be approximated as follows:

/1 For example Sitiung/Sungai Dareh in West Sumatera.

- 137 -

ANNEX 10PJ?a e 4

ha

Rubber (productive and unproductive) 3,200Wet rice 1,300Mixed rainfed annual crops 2,000Dense primary and secondary forest 2,000Unproductive brush, alang-alang swamp 1,500

Total 10,000

14. The future land use situation assumes that considerable expansionof agricultural activities will occur over the 12-year period 1978-90 as aresult of spontaneous settlement. The annual net income foregone in thefuture at full development, expressed in 1978 constant prices, is calculatedas follows:

Annual AnnualCrop Area net return area net return

(ha) (Rp/ha) (Rp million)

Rubber 3,200 44,500 142.4Rice 1,300 95,000 123.5Mixed annuals 2,000 52,000 104.0Forest 2,000 7,500 15.0Unproductive land 1,500 - -

Total 10,000 - 384.9

15. Project Development Phasing. The assumed development schedule isshown below:

Construction Area under cultivationYear costs Incremental Total

(%) ------ (ha) --------

1 52 253 354 20 1,500 1,5005 10 2,000 3,5006 5 2,500 6,0007 - 3,000 9,0008 - 1,000 10,000

- 138 -

ANNEX 10Page 5

Once a given area is brought under command, it is assumed that six moreyears are required for the attainment of full project benefits.

16. Development Costs. While the principal objective of the analysisis to determine that level of development costs above which the economic rateof return will fall below 15%, an attempt has been made to derive an indi-vidual development cost. It is assumed for the purposes of this model thatconventional irrigation projects in the Other Islands will incur costs forclearing as well as land and paddy development. These costs would be inaddition to the usual irrigation development costs. All these items areindicated in Table 10.

17. Economic Analysis. Project benefits are discounted over a 30-yearperiod, beginning in 1978 (Year 1). The results of the analysis are givenin Tables 8 and 9. On the basis of the assumptions made in deriving the coreor basic model, the economic rate of return of a conventional run-of-the-river gravity irrigation project is likely to be 15% provided all developmentcosts, including those costs involved in placing settlers on the project,as well as physical contingencies, do not exceed Rp 1,620,000 per ha (about$3,900 per ha) in terms of mid-1978 prices. By way of comparison somevery tentative cost estimates for a gravity run-of-the-river project havebeen pre-sented in Table 10. If the estimate indicated in that table(Rp 1,744,000/ha or $4,200/ha) is correct then the preceding analysis sug-gests that projects showing a return of 15% are a possibility, althoughobviously tVie chances of some being marginal is significant. Each projectwill have different characteristics and will need to be examined separately.

18. Income Position of Farmers. The financial cash flow of the trans-migrant farmer family from the first year of settlement through the time whenproduction benefits attain maximum levels is shown in Table 5. Under theassumptions of the model annual family incomes will reach Rp 413,00 ($995)at the end of the sixth cropping year. Per capita incomes will be aboutRp 75,100 ($181) assuming an average family size of 5.5. This compareswith an estimated absolute poverty level in Indonesia for 1975 of $95per capita. About 92% of family income at full project development isderived from crop production.

19. Sensitivity Analysis. As there are few, if any, existing projectsthat possess all of the characteristics of the model designed to simulate apioneering conventional irrigation project, the model incorporates a compos-ite of features from several outer-islands projects adapted to the assumedphysical and geographical setting. The sensitivity analysis tested the

/1 It should be noted that this analysis uses a shadow exchange rate offoreign exchange of US$1 = Rp 520. Recently a rate of US$ 1 = Rp 490has been used in project appraisals. Such a change would have an insig-nificant impact on the results of the analysis discussed here.

- 139 -

ANNEX 10Page 6

impact of changes in the rate of land development, rice price level and levelof benefits on the results of the economic analysis. The results of thesensitivity tests are given in Table 9.

Tidal Land Reclamation

20. Characteristics of the Model. The basic, or core, model is pat-terned after existing government projects. The model incorporates thepredominant technical and physical characteristics of tidal swamp projectswhich were started during the final years of Repelita I and developed furtherduring Repelita II. Many of these projects are still in progress. A projectsize of 10,000 ha, net, is assumed for the model. The project would be largeenough to realize economies of scale with respect to construction and admin-istrative/supporting service, and in the light of available evidence it seemsreasonable to believe that a contiguous 10,000 ha block with good soil couldbe located. It is necessary to assume a geographic location for the projectso that farm-gate product and input prices can reflect transport and othermarketing costs. The assumed location is in the tidal swamps of SouthSumatera, about 100 km downstream from the city of Palembang. The SouthSumatera location was selected because some data are available for thatarea.

21. The basic farm holding is assumed to be a field plot of 1.75 ha anda house/garden lot of 0.25 ha intended for transmigrants. The detached fieldplot may be from 1 to 3 km from the farm house. Some existing projects givethe transmigrants two field plots in different locations to diminish the riskof the farmer receiving a total holding of less than average soil quality.The basic model assumes all benefits are derived from agricultural production,90% of which consists of the output from one crop of rainfed rice. Theremainder is derived from a small area of mixed annual food crops and perennialsgrown in the house/garden compound.

22. Purchased inputs, crop production costs and labor requirements,rice and fertilizer prices and a farm budget are given in Tables 1, 2, 3, 4and 6. The yield assumptions shown in Table 6 are based in part on realizedtest farm and demonstration plot yields in several small ongoing tidalprojects, in part on professional agronomic opinion regarding the potentialof the soils in tidal lands, and in part on realized yields from farmers'fields reported in recent farm surveys. It is implicitly assumed thatadequately detailed soil surveys will be completed prior to final settlementand farm layout, and that areas with problem soils will be avoided.

23. Farm fertilizer recommendations have not been formulated for soilsin existing tidal land development areas. Therefore the fertilizer inputlevels specified in the crop budgets are not based on specific recommen-dations. However the cost of a recommended nutrient package, given theassumptions concerning yields and soils, is not expected to be significantlydifferent from the cost used here.


24. Yields of rice (dry rough rice, or Gabah Kering) are projected torise from 1.5 tons/ha in year 1 to 3.5 tons/ha in year 6 for a given develop-ment block. These yield projections take into account the possibility ofyield reductions due to drought in some years, although tidal swamp rainfedrice is less subject to drought effects than are rainfed rice crops outsidethe swamps. Recent crop-cutting surveys indicate that farmers on the pre-ferred tidal land soils in the pioneer developments on tidal areas in Jambiand South Sumatra are already obtaining yields of 2.5 to 3.0 tons of paddyper hectare using long maturing local varieties and no fertilizer. There isas yet no firm evidence that yields are declining after some ten years ofcontinuous cropping, although some observers have noted a tendency for somespontaneous settlers to adopt a shifting type agriculture leading to specula-tion about declining fertility in some areas.

25. Cropping activities are performed by combinations of hired andfamily labor. Hired labor, in combination with family labor, is mainly usedfor land preparation, transplanting and harvesting. Labor employed for landpreparation and transplanting is paid a cash wage, while harvesting laborreceives a share of the crop. Available family labor supplemented by hiredlabor and informal labor exchange should be adequate to handle 1.75 ha ofrainfed paddy at full project development. It is assumed that the sicklewill eventually replace the ani-ani finger blade in harvest operations.

26. It is assumed that land preparation will continue to be performedmanually, using hoes or a "scalper" blade which cuts the weedy growth justbelow the soil surface. At present draft animals are virtually non-existentin the existing tidal projects. Cattle are probably not suitable because ofthe long period during which much of the land is inundated or saturated inthe wet season, however, it is not immediately apparent why buffalo are notpresent even in Jambi where settlement of tidal lands was started morethan ten years ago. Because of the unanswered questions concerning thesuitability of draft animals their use is not assumed in the crop budgetsused to simulate future development.

27. Project Area Income without the Project. The most probable usethat would be made of the project area, were it not developed by Government,would be that either it would remain a dense second growth swamp forest orthat it would be eventually developed by spontaneous settlers. The modelassumes that in the absence of government activity spontaneous settlerswould, over a period of 15 years, develop 40% of the area and that theremaining 60% would remain a secondary growth swamp forest. Although it isassumed that the entire 10,000 ha is suitable for agriculture it is unlikelythat unassisted settlers would have the technology or engineering skills toeffect the development of the area, particularly those parts some distanceaway from natural drainage channels. Almost all the spontaneous settlementin the tidal lands at present is on the periphery near rivers and channels.

28. The income foregone from the land used for the project wouldthen be the net value of production from spontaneous agricultural developmenton 4,000 ha and the net annual return from a second growth swamp forest of


6,000 ha./l Table 7 gives estimates of the net farm income of a spontaneoussettler. The figures are derived from 1977 survey data on spontaneous settlersin the swamps of Jambi and South Sumatera./2 It is assumed that a given farmwill require eight years to reach the indicated "future" yield levels and netreturns. The estimation of net income foregone from spontaneous developmentis based on the net value of production from a single crop of rainfed rice ayear and a modest number of coconut trees. Income from other sources such astrading and fishina is not included as these activities are likely to con-tinue irrespective of a government project. There is little data on whichto base an estimate of net annual returns from a secondary swamp forest. Itis estimated that the return to the nation from occasional noncommerciallogging, firewood production and hunting is about Rp 10,000 ha/annum. Theweighted average annual opportunity cost or income foregone in mid-1978prices from the land is estimated to be:

(40% x Rp 110,000) + (60% x Rp 10,000) = Rp 50,000/ha100

29. Project Development Phasing. Construction, survey and design, isassumed to extend over seven years. During this period land clearing andon-farm development will be completed, as will the construction of the"social" infrastructure such as markets, schools, health facilities and thelike. The assumed development program is represented by the table below:

Area under cultivationYear Physical works Incremental Total

(% of cost) -------- (ha) --------

1 52 153 204 20 2,000 2,0005 20 2,500 4,5006 15 3,000 7,5007 5 2,500 10,000

/1 The 10,000 ha net in rice fields requires the development of a grossarea of about 13,750 ha. Thus 40% x 13,750 = 5,500 ha and60% x 13,250 = 8,250 ha.

/2 "Agro Socionomic Study in the Tidal Swamp Area I Lagan, Sub-P45 Jambi"and "Agro Socionomic Study in the Tidal Swamp Area of Karang Agung,Sub-P45 South Sumatra", Wet Season Survey Reports by Agro EconomicSurvey, August 1977.

- 142 -

ANNEX 10Page 9

30. Economic Analysis. The benefit stream is discounted over a 30-yearperiod, with 1978 as year 1. The results of the analysis of the basic caseare given in Tables 8 and 9. On the basis of the assumptions made in deriv-ing the basic model, the economic rate of return is likely to be 15% providedall development costs, including those involved in placing settlers on theproject and physical contingencies, do not exceed Rp 1,020,000 per ha (about$2,460 per ha) in mid-1978 prices. While many technical problems associatedwith tidal land development still need to be resolved, the indicative costsbased on experience so far suggest that total costs may be in the vicinityof $2,200 per ha and about $1,300 per ha without the cost of transmigration./IThese figures suggest that the rate of return on investment in tidal reclama-tion could be well above 15%. However, the indicative cost figures must beregarded as tentative; they may change considerably depending on the finaldesign and the location.

31. Income Position of Farmers. The financial cash flow of the trans-migrant farm family from the first year of settlement through the period whenproduction benefits attain maximum levels is given in Table 6. Under theassumptions of the model, annual family incomes will reach Rp 414,400($1,000) at the end of the sixth cropping year. Per capita incomes will beabout Rp 75,300 ($182),/2 assuming an average family size of 5.5. About 92%of family income at full development is derived from crop production.

32. Sensitivity Analysis. Although the basic model bears a closetechnical and physical resemblance to existing tidal swamp developmentprojects a number of assumptions have been made concerning implementation andsupport activities, agronomic responses and farmer behavior which do notrepresent the present situation. While it is believed that the assumptionsare realistic there is a possibility that the assumptions may not be realized,or more likely, that the assumptions may be only partially realized. Conse-quently, the sensitivity analysis concentrates on those assumptions which themission considers most likely not to be achieved, and which could have asignificant bearing on the economic rate of return. The results of thesensitivity tests are summarized in Table 9.

Large Storage-Based Irrigation Development

33. Characteristics of the Model. One of the options facing theGovernment in terms of future irrigation development in Indonesia is theconstruction of large storages to improve the water supply to existing irri-gation projects and to extend the areas irrigated. It is likely that mostof these storages will be suitable for the generation of power, and flood

/1 It should perhaps also be noted here that the force account costs fortidal land development in recent years has been significantly below$1,000 per ha. On the other hand, the requirements for improved watercontrol in future developments may bring a substantial increase in costs.

/2 Mid-1978 prices.

- 143 -

ANNEX 10Page 10

control, but at the same time many will necessitate the inundation of usefulfarm land as well as the relocation of rural people. There are a number ofsuch potential schemes in Java, one of the largest being the Jatigede multi-purpose project in Central Java (see Table 4 in Annex 9). The hypothethicalmodel chosen here exhibits many similarities with that project although thereis no intention here to provide a complete analysis of the project. Forexample the model analyzed will not include the potential benefits and costsof power generation.

34. For the purposes of this analysis it is assumed that the totalproject area is 100,000 ha with rehabilitation planned for 80,000 ha andextension of 20,000 ha, with farms in the project area having an average sizeof 0.5 ha. A simplification adopted for the purposes of this illustrativemodel is that the only crop considered in the analysis is rice although it islikely that in an actual situation some other crops such as soybeans andsugarcane would be irrigated.

35. Purchased inputs, crop production costs, labor requirements, riceand fertilizer prices are given in Tables 1, 2, 3 and 4. Yield assumptionsshown in Table 8 are in line with the assumptions used for current Bankappraisals in Central Java. Similarly input requirements and labor costs arealso based on assumptions made in current reports.

36. Economic Analysis. Estimated income from the project area withoutthe project and the results of the economic analysis are indicated in Table 8.On the basis of the assumptions made in deriving the model, the economicrate of return from a large storage based irrigation development in CentralJava, could be about 15% if total costs do not exceed about $3,700 per ha.Costs of dam, channel construction and land preparation for a large projectsuch as the one simulated in this analysis have typically been in the vicin-ity of $3,000 to $3,500 per ha. (No detailed estimates have been attemptedhere because of the substantial variations possible due to type of terrain,geological conditions, size, and type of dam and service area.) To this costwill need to be added the cost of moving farmers and villagers from inundatedareas and resettling them; in total costs could exceed the notional benchmarkestimated above. On the basis of these tentative results it cannot be assumedthat the economic rate of return from larger dam construction will exceed15%. Each proposal, however, will be different and will need to be con-sidered separately. In addition, there may be many other economic andnoneconomic reasons for undertaking such projects which have not been con-sidered in this analysis.


INDONESIA


Purchased Inputs at Full Development for Three HypotheticalWater Resource Development Models /a

(Unitsiha)

Conventional Tidal Large storage-irrigation reclamation based irrigation

Wet Dry Wet Wet DryItem/activity Unit season season season season season

Land preparationAnimal (animal-day)/b 15 15 - 20 15Man (man-day) - - 30 - -

Transplanting (man-day) 18 18 20 - -Seed (kg seed) 30 30 35 30 30Fertilizer /c

Urea (kg/ha) 150 150 150 200 200TSP (kg/ha) 100 100 100 50 50

Plant protection /d (package)- diazinon (1) 2 2 2 2 2- zinc phosphide (gm) 200 200 200 200 200

Harvesting /e (% share of crop) 6 6 5 3 3Interest /f

Institutionalcredit (%/mo) 1 1 1 1 1

Noninstitutionalcredit (%/mo) 2 2 2 2 2

/a Cash inputs only; unpaid family lauor not included.

/b Economic cost (same as financial cost) at Rp 1,000/day for draft pair anddriver.

/c Urea 46% N; TSP 46% P205.

/d Package containing 2 liters diazinon or equivalent and200 gm zinc phosphide (rodenticide).

/e 40% to 50% of harvest done by hired labor on 12.5% share basis.

/f Institutional credit finances purchase of seed, fertilizer and insecticidefor 6 months at 1% per month; noninstitutional credit to finance 75% ofhired labor cost of land preparation and transplanting for 6 months at 2%per month interest.

- 145 -

ANNEX 10Table 2

INDONESIA


Crop Production Costs: Full Development /a

Tidal Large storage-Conventional irrigation reclamation based irrigation /b

Item Wet season Dry season Wet season Wet season Dry season

- ------------- (Rp '000 per ha) ----------------------

Cash costs /cLand preparation /d 15.0 (15.0) 15.0 (15.0) 9.0 (12.0) 20.0 (20.0) 15.0 (15.0)Transplanting 4.5 ( 5.8) 4.5 ( 5.8) 5.1 ( 6.7) - ( -) - ( -)Seed 3.2 ( 2.6) 3.2 ( 2.6) 3.8 ( 3.1) 4.2 ( 3.3) 4.2 ( 3.3)Fertilizer 33.5 (26.2) 33.5 (26.2) 31.7 (26.2) 33.9 (26.9) 33.9 (26.9)Plant protection 8.0 ( 8.0) 8.0 ( 8.0) 8.0 ( 8.0) 8.5 ( 2.0) 8.5 ( 2.0)Harvesting 24.0 (20.0) 24.0 (20.0) 17.5 (14.0) 14.0 (11.2) 14.9 (11.2)Other 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0)Interest - ( 4.1) - ( 4.1) - ( 4.2) - ( 3.2) - ( 3.2)Taxes /e - ( 8.7) - ( 8.7) - ( 7.3) - (11.0) - (11.3)

Total 91.2 (92.4) 91.2 (92.4) 78.1 (84.5) 83.6 (80.6) 78.6 (75.9)

---------------------- (man-days per ha) ----------------------

Labor inputs (man-days/ha)Land preparation 30 30 50 40. 40Planting 35 35 40 40 40Crop management 55 55 60 90 90Harvesting 35 35 30 60 60

Total 155 155 185 230 230

Hired labor (man-day/ha)Man-days 18 18 50 - -Animal days 15 15 - - -

/a Economic and financial costs expressed in constant mid-1978 prices; financial costsin parentheses.

/b To a large extent these costs are based on the Bank appraisal of the Kali Progoproject (see Indonesia, irrigation X, Staff Appraial Report, May 1, 1978, ReportNo. 1872b-IND).

/c Inputs and prices taken from Tables 1, 3 and 4. Cost of hired labor included in cashcosts.

/d Average wage rates at full development for hired labor.

Other Islands Java(Conventional and (Large storage-tidal irrigation) based irrigation)

Economic Financial Economic Financial----------------…-…--(Rp/day) -------------------

Man 300 400 130 n.a.Woman 200 250 n.a. n.a.

n.a. - not applicable.

/e IPEDA land tax calculated at 5% of the annual net value of production includinga cost allowance for unpaid family labor.

- 146 -

ANNEX 10Table 3

INDONESIA


Commodity Price Structure /aRice

Large storage-Conventional irrigation Tidal reclamation based irrigation

Iteam (Jambi) (South Sumatera) (Central Java)Rp/ton lb $/ton Rp/ton /b $/ton Rp/ton /b $/ton

1978Export price, Thai 5x-42% brokens

f.o.b Bangkok /c 122,000 235 122,000 235 122,000 235Ocean freight and insurance 9,000 17 8,000 15 10,500 20Import price c.i.f. Sumatera port /d 129,000 252 130,000 250 132,500 255Port handling 4,000 8 4,000 8 2,500 5Handling, transport and storage to

wholesale point /e 2,000 4 3,000 4 3,000 6Wholesale imported rice 137,000 264 136,000 262 138,000 266Transport and handling mill to

wholesale /f -11,000 -21 -3,000 -6 -1,000 -2Ex-mill rice, project area 126,000 243 133,000 256 137,000 264Paddy equivalent (622) 78,000 150 83,000 159 86,500 166Milling charge lesp value of

byproduct jg -2,000 -4 -2,000 -4 -1,000 -2Drying and cleaning cost -2,000 -4 -2,000 -4 -1,500 -3Transport cost farm to mill -1,000 -2 -1,000 -2 -1,;000 -2Farm-gate paddy 73,000 140 78,000 149 83,000 159

(Financial farm-gate)/h (65,000) (157) (65,000) (157) (65,000) (157)

1985Export price, Thai 5x-42% brokens

f.o.b Bangkok /c 156,000 300 156,000 300 156,000 300Ocean freight and insurance 7,500 14 6,500 13 10,500 20Import price c.i.f. Sumatera port Id 163,500 314 162,500 313 166,500 320Port handling 3,000 6 3,000 6 2,500 5Handling, transport and storage to

wholesale point /e 1,500 3 1,500 3 3,000 6Wholesale imported rice 168,000 323 167,000 322 172,000 331Transport and handling mill to

wholesale /f -11,000 -21 -3,000 -6 -1,000 -2Ex-mill rice, project area 157,000 302 164,000 316 171,000 329Paddy equivalent (63%) 99,000 191 103,000 199 107,500 207Milling charge less value of

byproduct a - - - - -1,000 2

Drying and cleaning cost -2,000 -4 -2,000 -4 -1,500 3Transport cost farm to mill -1,000 -2 -1,000 -2 -1,000 2Farm-gate paddy 96,000 185 100,000 193 104,000 200

(Financial farm-gate)/i (83,000) (200) (83,000) (200) (83,000) (200)

/a Economic prices; financial prices in parentheses. All prices in mid-1978 constant values. Shadowexchange rate of $1.00 - Rp 520 used for economic prices; official rate of $1.00 - Rp 415 usedfor financial prices. Recent appraisals of irrigation projects have used a shadow exchange rateof $1.00 - Rp 490; using this amended rate does not significantly affect the outcome of the economicanalysis.

lb Rounded to nearest Rp'000. Dollar and rupiah totals may not agree due to rounding.

/c Based on IBRD commodity price projections (November 1977) for Thai rice; 10% of 5% brokens, 60% of25-35% brokens, 30% of 42% brokens.

/d Ports are Palembang and Jambi.

/e Wholesale market in port cities, which are the main consumption centers.

/f Transport by river barge in South Sumatera and by truck in Jambi. Future transport costs to Jambiproject are reduced to reflect planned road improvements.

ft At present, milling costs are high due to scattered, small relatively inefficient mills and thedemand by byproducts is low. In the future, more efficient, competitive mills will predominate andthe price of byproducts will increase with growth of the economy and population.

/h The present financial price is equivalent to the Government-supported floor price at the BUWD/KUDcooperative center less Rp 1.5/kg for drying and cleaning, Rp 2.3/kg for quality imperfections, andRp 1.0/kg for transport, farm-to-BUWD.

/i Future financial prices are equal to the economic price converted at $1.00 -Rp 415. Taxes andmarket distortions are assumed to be negligible. The Government "one-price" policy is assumed toremain in force.

- 147 -

ANNEX 1 0Table 4

INDONESIA


Commodity Price Structure /a

Fertilizers

Large storage-basedConventional irrigation Tidal reclamation irri ation prolect

Item (Jambi) (South Sumatera) (Central Java)Rp/ton /b S/ton Rp/ton /b $/ton Rp/ton /b $/ton

Urea: 1978Ex-PUSRI plant; bagged /c 86,000 165 86,000 165 86,000 165Transport to project area /d 17,000 33 3,000 6 3,000 6Storage and handling 7,000 13 7,000 13 20,000 38Transport to farm 1,000 2 1,000 2 1,000 2Farm-gate 111,000 213 97,000 186 110,000 211

(Financial farm-gate)/e (71,000) (171) (71,000) (171) (71,000) (171)

1985Ex-PUSRI plant; bagged /c 114,000 220 114,000 220 114,000 220Transport to project area /f 12,000 23 3,000 6 3,000 6Storage and handling 7,000 13 7,000 13 20,000 38Transport to farm 1,000 2 1,000 2 1,000 2Farm-gate 134,000 258 125,000 241 138,000 266

(Financial farm-gate)/g (110,000) (266) (110,000) (266) (110,000) (266)

TSP: 1978Export price US Gulf f.o.b., bulk /h 62,000 120 62,000 120 62,000 120Freight and insurance /i 10,000 19 10,000 19 10,000 19Import price c.i.f Surabaya 72,000 139 72,000 139 72,000 139Handling and bagging / 10,000 19 10,000 19 7,000 13Transport to project area /k 18,000 35 11,000 21 7,000 13Storage and handling 7,000 13 7,000 13 6,000 12Transport to farm 1,000 2 1,000 2 1,000 2Farm-gate 108,000 208 101,000 194 93,000 173

(Financial farm-gate)/e (71,000) (171) (71,000) (171) (71,000) (171)

1985Export price US Gulf f.o.b., bulk 90,000 173 90,000 173 90,000 173Freight and insurance 10,000 19 10,000 19 10,000 19Import price c.i.f Surabaya 101,000 192 101,000 192 100,000 192Handling and bagging 10,000 19 10,000 19 7,000 13Transport to project area /f 16,000 31 12,000 23 7,000 13Storage and handling 7,000 13 7,000 13 6,000 12Transport to farm 1,000 2 1,000 2 1,000 2Farm-gate 134,000 257 130,000 249 121,000 233

(Financial farm-gate)/g (97,000) (233) (97,000) (233) (97,000) (233)

/a Economic prices; financial prices in parentheses. All prices in mid-1978 constant values. Shadowexchange rate of $1.00 - Rp 520 used for economic prices; official rate of US$1.00 - Rp 415 used forfinancial prices. Recent appraisals of irrigation projects have used a shadown exchange rate of$1.00 - Rp 490; using this amended rate does not significantly affect the outccme of the economicanalysis.

/b Rounded to nearest Rp '000. Dollar and rupiah totals may not agree due to rounding.

/c Based on I8RD world market price projections (November 1977) for bagged urea, f.o.b. Europe, adjusted toSouth East Asia markets.

/d Based on river transport to tidal swamp project and rail and truck transport to conventional irrigationproject. For large storage-based irrigation projects in Java, it is cost of sea transport.

/e Based on current government farm cooperative (8UUD/KUD) retail selling price plus cost of transportcooperative-to-farm.

If Future transport cost to Jambi reduced to reflect planned road improvements.

/R In deriving the future financial farm-gate price, it is assumed that taxes and market distortions arenegligible. The financial price is derived by converting the economic farm-gate price at the officialexchange rate of US$1.00 - Rp 415. The Government "one-price" policy is assumed to continue in thefuture. The basis for the price level is Central Java.

/h Based on IBRD commodity price forecasts (November 1977) for TSP, f.o.b. US Gulf coast ports.

/i Freight and insurance for bulk shipment US Gulf coast to Surabaya bagging facility.

LI Cost of discharging, bagging, handling and reloading.

/k Ocean freight (interisland steamer) Surabaya to Palembang, off-loading and reloading on barge (Tongkang)and shipment to tidal swamp. Ocean freight to Jambi (interisland steamer) Surabaya to Jambi port,off-loading and reloading on trucks and truck freight to project area.

- 148 -

ANNEX 10Table 5

INDONESIA


Conventional Irrigation: Generalized CashFlow for 1.0 ha Irrigated Farm during Development Period /a

YearItem Unit 0 /b 1 2 3 4 5 6

Crop ProductionIrrigated paddyWet (ha) - 1.0 1.0 1.0 1.0 1.0 1.0Dry (ha) - 0.3 0.4 0.5 0.5 0.5 0.5

Paddy yieldWet (ton/ha) - 1.8 2.3 2.9 3.4 3.8 4.0Dry (ton/ha) - 1.8 2.3 2.9 3.4 3.8 4.0

Total annual production (ton) - 2.3 3.2 4.4 5.1 5.7 6.0

------ ______------ (Rp '000) …-…---

Value of ProductionGross value ofproduction - 149.5 217.6 312.4 377.4 438.9 498.0

Production costs,excl. labor - 19.0 27.0 47.0 51.0 56.0 58.1

Hired labor cost - 24.3 31.0 48.0 55.0 60.0 62.7Land tax - 1.8 3.3 6.4 8.8 11.3 13.0Interest - 2.5 3.0 4.5 5.4 5.8 6.1Net value of production - 101.9 153.3 211.5 257.2 305.8 358.1

Government AssistanceFood /c 62.0 62.0 - - - - -Seed /d 5.0 - - - -

Tools, clothing,utensils /e 25.0 - - - - - -

Subtotal 92.0 62.0 - - - - -

Off-Farm Income /f 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Home Garden - Net Valueof Production /a - 10.0 15.0 15.0 15.0 20.0 25.0

Farm Family IncomeFarm income /h 62.0 173.9 168.3 226.5 272.2 325.8 383.1Off-farm income 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Total annual income 97.0 193.9 188.3 246.5 302.2 355.8 413.1

/a Calendar year basis, in mid-1978 financial prices./b Year 0 covers six months. Settlers arrive on site at end of rainy season in

June-July and spend balance of year working on tertiaries and preparing sawah.lc Rice and other food sufficient to provide basic requirements for family of five.

Valued at mid-1978 financial prices./d Rice and vegetable seed./e Standard transmigration package./f. Based on results of surveys by Agro Economic Survey, Bogor. This income is

derived mainly from the raising of ducks, chickens, fishing, wood cutting aswell as laboring work.

/g Miscellaneous vegetables and palawija crops consumed at home; value increasesas fruit trees begin bearing in Year 5.

/h Includes income from rice, garden crops and government food grants.

- 149 -

ANNEX 10Table 6

INDONESIA


Tidal Reclamation Model: Generalized Cash Flow for 1.75 ha Farmduring Development Period /a

---------------- Year ------------------------Item Unit 0 /b 1 2 3 4 5 6

Rainfed paddyWet season (ha) - 1.40 1.60 1.75 1.75 1.75 1.75Paddy yield (ton/ha) - 1.5 2.0 2.6 3.0 3.3 3.5Total annual production (ton) - 2.1 3.2 4.5 5.3 5.80 6.1

… ______________-- (Rp '000) …----------------Value of production

Gross value - 136.5 217.6 319.5 408.1 464.0 506.3Production costs

excluding family labor - 16.0 25.0 45.0 59.0 65.0 69.6Hired labor cost - 23.0 30.0 39.0 50.0 54.0 57.2Land tax - 1.7 3.3 6.5 9.5 11.5 12.8Interest - 3.1 3.7 5.7 6.4 7.0 7.3Net value ex-production - 92.7 156.3 223.3 283.2 326.5 359.4

Government assistanceFood /c 62.0 62.0 - - - - -Seed /d 5.0 - - - - - -Tools, clothes, utensils /e 25.0 - - - - - -

Subtotal 92.0 62.0 - - - - -

Off-farm income /f 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Home garden - net value ofproduction /a - 10.0 15.0 15.0 15.0 20.0 25.0

Farm family incomeFarm income /h 62.0 164.7 171.3 238.3 298.2 346.5 384.4Off-farm income 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Total annual income 97.0 184.7 191.3 258.3 328.2 376.5 414.4

/a Calendar year, in mid-1978 financial prices.

/b Year 0 covers a six-month period from transmigrants' arrival in June/July toend of year.

/c Rice and other food sufficient to provide basic requirements for family of five.

/d Rice and vegetable seed.

/e Standard transmigration package.

/f Based on results of surveys by Agro Economic Survey, Bogor.

/g Miscellaneous food crops and fruit mainly consumed at home; valueincreases over time as fruit trees mature.

/h Includes income from rice, garden crops and government food grant.


INDONESIA


Tidal Reclamation: Net Farm Income from Unassisted Development /a

Present and Future

Item Unit Present Future withoutdevelopment

Yield of paddy /b (ton/ha) 1.5 2.0

Farm-gate price /c (Rp'000/ton) 78.0 100.0

Gross return (Rp'000/ha) 117.0 200.0

Cash production cost /d (Rp'000/ha) 17.0 50.0

Net return-paddy (Rp'000/ha) 100.0 150.0

Net return-coconuts /e (Rp'000/ha) - 17.0

Net return from crops (Rp'000/ha) 100.0 167.0

Economic cost of familylabor and land /f (Rp'000/ha) 52.0 57.0

Net farm income (Rp'000/ha) 48.0 110.0

/a Economic prices, mid-1978 prices.

/b Taken from field survey and crop cutting data for Jambi and SouthSumatera tidal areas, rainy season 1976/77.

/c Economic farm-gate prices from Table 3.

/d Based on Agro Economic Survey data from Jambi and South Sumatera tidalswamps, rainy season 1976/77.

/e Coconuts growing in rice fields. Planted at density of 25/ha, yielding20 nuts/tree/year, valued (economic) at Rp 35/nut, net.

/f Family labor: 150 man-days at shadow wage of Rp 300/man-day plus nominalopportunity return from an undisturbed second-growth swamp forest ofRp 8,000/year.

INDONESIA


Economic Analysis: Projected Future Production at Full Develogent /a

Gross value Net value Projected Economic IncrementalCropped Price /c of Production of net labor net value ofarea Yield (Rp '000 production cost /d production return cost /e production(ha) (ton/ha) ton) ----------- (Rp '000/ha) ---------- ---------- Rp millions ----------

Conventional IrrigationWet season

Rubber and forest /b W 5,200 - - - 79Rainfed rice W 3,300 - - - - - 228 -Irrigated rice W 10,000 4.0 96.0 384.0 91.2 292.8 2,928 370Garden and fruit W 750 - - - - 160.0 120 45

Dry seasonRubber and forest /b W 5,200 - - - - - 78 'Irrigated rice W 5,000 4.0 96.0 384.0 91.2 292.8 1,464 185Garden and fruit W 750 - - - - 160.0 120 45

Total W 8,500 385 _W 16,500 4,632 645 3_602

Tidal ReclamationWet and dry season

Rainfed rice and forest /b W 10,000 - - - - - 500 -Irrigated rice W 10,000 3.5 100.0 350.0 78.1 271.9 2,719 365Garden and fruit W 1,500 - - - - 166.7 250 90

Total W 10,000 500 -WU 10,000 2,969 455 2,014

Large Storage-BasedIrrigation DevelopmentWet season

Irrigated rice W 80,000 4.5 104.0 468.0 83.6 384.4 30,752 2,000w 100,000 4.5 104.0 468.0 83.6 384.4 38,440 2,900

Rainfed rice W 20,000 2.0 104.0 208.0 45.0 163.0 3,260 425

Dry seasonIrrigated W 25,000 4.2 104.0 436.8 67.0 369.8 9,245 625

W 100,000 4.5 104.0 468.0 78.6 389.4 38,940 2,990

Total W 125,000 43,257 3,050W 200,000 77.,380 5.980 31,193

La In 1978 constant terms./b For the estimates of benefits without the project, see paragraph 14 for conventional project and paragraphs 27 and 28 for tidal

project./c From Table 3./d From Table 2 for costs "with project." Costs without the project from estimates in recent appraisal reports for projects i >

similar areas. . z

/e Costed at an average economic wage of Rp 270/day for conventional irrigation and tidal project and Rp 130/day with the project and XRp 130/day without the project for the storage irrigation development.

m


INDONESIA


Summary of Sensitivity rests

Imputed cost of development /aConventional Tidal Large storage-

Item irrigation reclamation based irrigation

… ---------------- Rp'000/ha

Best estimate 1,600 1,000 1,500

Three-year delay in development 1,400 650 950

25% reduction in rice price 1,000 600 1,000

25% increase in benefits 2,000 1,300 1,900

------------------ US$/ha --------------------

Best estimate 3,900 2,500 3,700

Three-year delay in development 3,300 1,600 2,300

25% reduction in rice price 2,400 1,400 2,500

25% increase in benefits 4,900 3,100 4,600

/a Estimated total financial costs per ha which should not be exceeded if projectis to achieve an economic rate of return of 15%. These imputed costs wouldinclude costs of construction, physical contingencies as well as costs asso-ciated with placing settlers on the project and providing infrastructure. Allfigures in terms of mid-1978 prices.

- 153 - ANNEX 10

Table 10Page 1

INDONESIA


Indicative Cost Estimates: 10,000 ha Conventional Irrigation Project

Measurement Number ofCost item unit units Unit cost Total cost

(Rp) (Rp million)

1. Diversion structure 650.0

2. Canals and structuresMain canal km 14 47.0 658.0Secondary canal km 90 22.4 2,016.0Tertiary system ha 10,000 0.10 1,000.0

3. Drainage ha 10,000 0.0075 75.0

4. Access/inspection roads and bridgesNew access roads to diversion km 6 6.2 37.2Upgrade connection to access km 15 4.0 60.0Inspection roads km 36 3.3 118.8Bridges -- - 79.0

5. Land acquisition for civil works ha 500 0.125 62.5

6. EngineeringDesign, supervision (5%) 259.5

7. Other /fStudies and investigations 1,200.0Housing, O&M staff 88.4Office, O&M staff 14.3Communications 214.2Equipment 76.2O&M during construction (2%) 103.8O&M costs /g 256.0

Subtotal (other) 1,952.9

Subtotal (items 1-7) 6,968.9

8. Land clearing (on-farm) lh ha 10,000 0.169 1,690.0

9. On-farm development /iLeveling, shaping, bunds, etc. ha 9,000 0.05 450.0

10. Market/village/farm roads and bridges /kClass II roads km 16 5.56 89.0Class III roads km 86 3.26 280.4Class IV roads km 300 0.06 18.0Bridges meter span 375 0.14 52.5

Subtotal (items 8, 9, 10) 2,579.9


11. Transmigration costs /1 family 10,000 0.68 6,800.0

12. Physical contingencies(15X of civil works cost) 1,091.0

Total all costs 17,439.8

Cost per hectare Rp 1,743,980$ 4,202 /m

Cost per hectare withouttransmigration Rp 1,063,980

$ 2,564 /m

- 154 -


Footnotes:

/a Costs expressed in 1978 constant terms.

/b Approximately 20 cm diversion.

/c Density and unit costs averaged from several studies of similar projects.

/d Based on prereconnaissance study of Batang Tabir Project, Jambi.

/e Unit costs adopted from Southeast Sulawesi Transmigration and Area DevelopmentStudy, ADB/D.G. Transmigration, Hunting Technical Services, 1977.

/f Estimates adopted from various studies including Appraisal of Irrigation IX,IBRD, May 1977.

/g Present value of O&M cost stream, Rp 6,000 a year for 27 years at 15%.

/h Average cost per hectare:6,600 ha primary/heavy secondary forest at Rp 220,000/ha.1,800 ha in thin secondary forest/old rubber @ Rp 110,000/ha.

800 ha alang-alang and light brush @ Rp 50,000/ha.800 ha in annual crops - no cost.

/i Nearly all sawah will require moderate shaping and leveling.

/k Densities and unit costs from Southeast Sulawesi Study.

/1 Official government budgeted support amounts; includes social infrastructurecosts for markets, schools, health facilities. Unit costs from SoutheastSulawesi Study (footnote /e) and Identification of Transmigration Projects II,III, IV. May 1977.

/m Converted at $1 = Rp 415.

- 155 -ANNEX 10Table 11Page 1

INDONESIA


Indicative Cost Estimates: 10,000 ha Tidal Reclamation Project

Measurement Number ofCost item unit units Unit cost Total cost /a

(Rp) (Rp million)

1. Survey, investigation and design ha 10,000 0.015 150.0

2. Canals, ditches and drains /bPrimary canal km 21.6 9.72 210.0Secondary canal km 22.8 7.50 171.0Supply and drain ditches km 655.0 2.33 1,526.1

3. Land acquisition for civil works ha 500 0.05 25.0

4. OtherHousing, O&M staff 65.0Office, O&M staff 11.0Equipment 28.0O&M during construction /c 38.0O&M annual costs Id 171.3

Subtotal (other) 313.3


5. Land clearing /e ha 10,000 0.20 2,000.0

6. On-farm development /f ha 10,000 0.03 300.0

7. Roads and bridgesVillage tracks km 150 0.04 6.0Foot bridges meter span 100 0.08 8.0

Subtotal roads and bridges 14.0

Subtotal (items 5, 6, 7) 2,314.0


8. Transmigration costs /Jg family 5,000 0.68 3,400.0

9. Physical contingencies(20% of civil works costs) 844.2

Total all costs 8,953.6

Cost per hectare Rp 895,360$ 2,157 lh

Cost per hectare withouttransmigration Rp 555,360

$ 1,338 /h

- 156 -


Footnotes:

/a 1978 constant prices.

/b Adapted from Unit Cost Upang, DPUTH/DGWRD/P4S, 1976. Preliminaryresults from some feasibility studies being undertaken at presentsuggest that in some areas levees and more intensive drainage networksare likely to add significantly to the costs indicated in earlierfeasibility studies. these possible cost increases have not been takeninto account here.

/c Adapted from unit costs for conventional irrigation project adjusteddownward to reflect lower O&M requirements.

/d Present value of O&M cost stream (discounted at 15%) mainly for canalmaintenance.

/e Average per hectare cost assuming 9,000 ha in primary/heavy secondaryforest with clearing cost of Rp 50,000/ha. Clearing operations includecutting, stump removal and clean-up of debris.

/f Mainly for bunds and farm ditches/drains with minor leveling and shaping.

/£ Includes costs of recruitment, staging, transportation, housing, subsis-tence grant for one year, social, physical and administrative infrastruc-ture and administrative costs.

/h Converted at $1 = Rp 415.

- 157 -ANNEX 11Table I

INDONESIA


-Estimated Repelita III Development Expenditure by Central Government on

Irrigation, Swamp Land Development, River and Flood Control /a

Timingof start of

Type of development development /b Area Unit cost 1979/80 1980/81 1981/82 1982/83 1983/84

(ha) (Rp/ha) -------------------- Rp million -------------------

Future new developmentGravity

Technical /c Series 1 20,000 1,500,000 1,500 3,000 7,500 9,000 6,000

Series 2 20,000 1,500,000 - 1,500 3,000 7,500 9,000

Series 3 20,000 1,500,000 - - 1,500 3,000 7,500

Series 4 20,000 1,500,000 - - - 3,000 3,000

Series 5 20,000 1,500,000 - - - - 1,500

Semitechnical /c Series 1 25,000 800,000 1,000 2,000 5,000 6,000 4,000

Series 2 25,000 800,000 - 1,000 2,000 5,000 6,000

Series 3 25,000 800,000 - - 1,000 2,000 5,000

Series 4 25,000 800,000 - - - 1,000 2,000

Series 5 25,000 800,000 - - - - 1,000

Simple /d Series 1 50,000 650,000 3,250 6,500 6,500 6,500 6,500

Series 2 50,000 650,000 - 3,250 6,500 6,500 6,500

Series 3 50,000 650,000 - - 3,250 6,500 6,500

Series 4 50,000 650,000 - - - 3,250 6,500

Series 5 50,000 650,000 - - - - 3,250

Swamp/tidal /d Series 1 50,000 600,000 3,000 6,000 6,000 6,000 6,000

Series 2 50,000 600,000 - 3,000 6,000 6,000 6,000

Series 3 50,000 600,000 - - 3,000 6,000 6,000

Series 4 50,000 600,000 - - - 3,000 6,000

Series 5 50,000 600,000 - - - - 3,000

River and flood control /e 57,000 57,000 57,000 57,000 57,000

Rehabilitation /d /f Series 1 50,000 700,000 3,500 7,000 7,000 7,000 7,000

Series 2 50,000 700,000 - 3,500 7,000 7,000 7,000

Series 3 50,000 700,000 - - 1,750 3,500 3,500

Series 4 50,000 700,000 - - - 1,750 3,500

Series 5 50,000 700,000 - - - - 1,750

Subtotal 69,250 93,750 124,000 156,500 181,000

Overhead - 25% 17,310 23,440 31,000 39,125 45,250

Ongoing investment LBank Group projects 60,590 70,550 58,930 34,030 33,200

Other projects 60,000 45,000 30,000 15,000 5,000

Subtotal 120,590 115,550 88,930 49,030 38,200

Total (Rupiah million) 207,150 232,740 243,930 244,655 264,450

Total (US$ million) /h 499 561 588 590 637

/a Bank estimates in 1978 prices.

/b Not all development planned for Repelita III will start at the same time. Development activity is assumed to be phased

in a number of construction series as shown.

/c Development costs for each series are phased in the proportions 5%, 10%, 25%, 30%, 20% and 102.

/d Development costs for each series are phased in the proportions 10%, 20% 20%, 20%, 20% and 10%.

/e Estimate based on expenditures during Repelita II.

/f Includes tertiary rehabilitation and development.

/g These are estimated total costs for known carryovers of Bank Group-assisted projects and an estimate of the continuing

investment for other projects. See Table 2 in Annex 12 for details of ongoing Bank Group-assisted projects.

/h US$1 = Rp 415.

- 158 - ANNEX 12

Table IPage I

INDONESIA


Preliminary List of Irrigation and Tidal Reclamation Projects for World Rank Assistance, 1979-1983

Rehabili- New TentativeProjects Province tation development Status of preparation Executing unit cost /a

(ha) (ha) (tentative) ($ a)

Irrigation XII: Appraisal - June 1978Negotiations - November 1978

1. Jatiluhur Tertiary Development West Java Jatiluhur Authority 70- 150,000 ha (DO)- 186,000 ha (construction) DD completed

2. Cisedane Drainage- construction West Java DD 30% complete PROSIDA 36

3. Tidal Lands Development- 230,000 ha (FS) South Sumatera P45- 120,000 ha (FS) Central Kalimantan P4S } 9- 110,000 ha (DD) South Sumatera & FS completed in mid-1978 P4S

Jambi

4. Drainage Studies- Pemali-Comal Central Java PROSIDA- Sadang South Sulawesi PROSIDA 4

Total 119

Irrigation XIII: Appraisal - June 1979Negotiations - November 1979

1. Jatigede Dam (preconstruction) Central Java Directorate of Rivers 31- access roads & base camp- tunnel

- resettlement

2. Ci=anuk River Flood Protection (construction) West Java DD completed Directorate of Rivers 75

Total 106

Irrigation XIV: Appraisal - June 1979Negotiations - November 1980

1. Segala Mider Dam Lampung DD completed end of 1979 Directorate of Planning 50- construction and Programing

2. Jragung Dam Central Java DD completed in mid-1979 PROSIDA 100- construction

3. Batutegi Dam Lampung Directorate of Irrigation 20- preconstruction DD completed mid-1979

Total 170

Irrigation XV: Appraisal - October 1980Negotiations - March 1981

1. South Crobogan Irrigation Central Java PROSIDA 30- DD and construction 10,000 FS completed in March 1978

2. Medium-Sized Irrigation Projects Java, Sumatera, Design reviews completed in Directorate of Irrigation 100- completion of ongoing construction Sulawesi mid-1978

3. Tidal Land Development South Sumatera- construction 5 Jambi 20,000 P4S 70

Total 200

-159- ANNEX 12

Table iPage 2

Rehabill- New TentativeProjects Province tation development Status of preparation Executing unit coat /a

(ha) (ha) (tentative) (S m)

Irrigation XVI: Appraisal - June 1981Negotiatione - November 1981

1. Jatigede Central Java Directorate of Rivers 300- construction 90,000 20,000 DD completed in March 1978

2. Way Sep.tih Irrigation Lampung2.1 Way Ketibung 3,500 ) DD completed in end-1979 Directorate of Planning { 202.2 North Kandis 1,250 ) and Programming

3. Way Sekampung Irrigation Lampung Directorate of Planning3.1 bekri 8,600 DD completed in end-1979 and Programming 20

Total 340

Irrigation XVII: Appraisal - June 1982Negotiations - November 1982

1. Sungei Darch- construction 20,000 60

2. Kedung Obo Dam Central Java Directorate of Planning- preconstruction DD completed in mid-1979 and Programming 15

3. Madiun Dams Central Java- two dams (DD) FS completed early 1978 PROSIDA 2

Total 77

Irrigation XVIII: Appraisal - June 1983Negotiations - November 1983

1. MIadiun Dams Central Java PROSIDA- two dams (construction) FS completed 1978 60

2. Madiun Rehabilitation Central Java PROSIDA- construction 65,000 DD completed in 1978 100

Total 160

Irrigation XIX: Appraisal - June 1984Negotiations - November 1984

1. Bnatutegi Dam Lampung Directorate of Irrigation- construction (including power) 27,000 DD completed in 1979 160

2. Tidal Land Development- 80,000 ha conatruction) S. Sumatera 6 Jambi 80,000 DD completed mid-1980 P4S 90- 300,000 ha (DD) S. Kalimantan b FS completed mid-1979 P4S 10

Jambi

Total 260

Irrigation XX; Appraisal - June 1985Negotiations - November 1985

1. Kedung Ombo Dam Central Java DD completed in 1979 Directorate of Planning 6 100- construction DD completed in 1979 Programming

2. Other projects not yet nominated(including Bantarkawang and Karang Angar)

DD - Detailed Design; FS - Feaaibility Study.

/n Mid-1978 prices plus contingencies.

- 160 - ANNEX 12Table 2

INDONESIA


Estimated Expenditures for Ongoingand Proposed Bank Group-Assisted Irrigation Projects /a

($ million)

Fiscal Irrig. X - XI Irrig. XII Irrig. XIII Irrig. XIV Irrig. Vyear Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD)

/b /c /c

1978/79 70 (35) - - - - - - _ _

1979/80 146 (73) 0.8 (0.5) 0.9 (0.6) - - - -

1980/81 170 (85) 24.0 (15.5) 20.0 (13.4) 5 (3) - -

1981/82 142 (71) 39.0 (25.0) 33.0 (21.9) 30 (20) 10 (5)1982/83 82 (41) 32.0 (20.5) 30.0 (19.6) 30 (20) 30 (20)1983/84 80 (40) 18.0 (12.0) 17.0 (11.2) 40 (25) 40 (30)1984/85 60 (30) 5.2 (3.5) 5.1 (3.3) 40 (25) 50 (30)1985/86 - - - - - - 25 (17) 50 (30)1986/87 - - - - - - - - 20 (15)1987/88 - - - - - - - - - -1988/89 - - - - - - - - - -1990/91 - - - - - - - - - -1991/82 - - - - - - - - - -1992/83 - - - - - - - - - -

Total 750 (375) 119.0 (77.0) 106.0 (70.0) 170 (110) 200 (130)

Irrig. XVI Irrig. XVII Irrig. XVIII Irrig. XIX TotalTotal (IBRD) Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD)

1978/79 - - - - - - - - 70.0 (35.0)1979/80 - - - - - - - - 147.7 (74.1)1980/81 - - - - - - - - 219.0 (116.9)1981/82 - - - - - - - - 254.0 (142.9)1982/83 15 (10) - - - _ _ - 219.0 (131.1)

1983/84 40 (30) 5 (3) - - - - 240.0 (151.2)

1984/85 60 (40) 10 (6) 5 (3) - - 235.3 (140.8)

1985/86 80 (50) 20 (15) 20 (15) 10 (5) 205.0 (132.0)1986/87 70 (45) 20 (15) 30 (20) 30 (20) 170.0 (115.0)1987/88 50 (30) 15 (8) 40 (30) 50 (30) 155.0 (98.0)1988/89 25 (15) 7 (3) 40 (25) 50 (35) 122.0 (78.0)1990/91 - - - - 25 (12) 50 (30) 75.0 (42.0)1991/82 - - - - - - 40 (30) 40.0 (30.0)1992/83 - - - - - - 30 (20) 30.0 (20.0)

Total 340 (220) 77 (50) 160 (105) 260 (170) 2,182.0 (1,307.0)

/a Based on 1978 prices plus contingencies; estimated by Bank. Assumes Bank loans are65% of total cost after Irrigation XI. (Proposed projects are based on Table 1 ofthis Annex.)

/b Estimated by Bank assuming disbursements are 50% of total costs incurred.

/c Derived from draft appraisal reports.

INDONESIAIRRIGATION PROGRAM REVIEW

ORGANIZATION OF SERVICES FOR IRRIGATED AGRICULTURE

IRRIGATION SERVICES ADMINISTRATION AGRICULTURAL SERVICES

MINISTRY OF AGRICULTURE| FINANCE & INDUSTRY _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __|

| 1 ' ;XLE;:!j ' r~~~~~~~~------------------------------ i1ig[fftf* I I~~~~~~~~~- 'd---

-------------------- ''-----'1' A I ---I I~~~~~~~~~~~~~~~~~~~~~~~~I1

E~ ~j - -nme - - - all. Of--------- - - - -

I ~~~ I ii iub I itltA clua |________ I=rv=____________~______________________________________ eenh dcImTann

____________________________________H Rncon ACCIO

-~~~~~ - - -- - - Wo- Aqld T9-. G.id-3;

* I~~~~~~~~~~~~~~~~~~~~~~~~l- I .

OEERATION h MAINTENANCE STAFFI

I I

Figu,re 2. 2

INDONESIACUMULATIVE DISBURSEMENTS

FOR FIRST ELEVEN BANK GROUPIRRIGATION LOANS

$ Million

450 -

400 /

//350

/

// Most Recent Projection300 _

250 -Appraisal Estimates

200 -

150 /

/1100 /

50

Actual

1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990

Fiscal Years

World Bank - 19450


Ministry of Public Works

Minister of Public Works

Inspectorate SecretariatGeneral General

Directorate General Directorate General Directorate Generalof Water Resources of Roads and High- of Housing, Building

Development ways and City Planning

Center fr XCenter for Cene fo Center for Natonal Hous- Asphalt Mi- NationalResearch and Education and Data and Equipment ing Public ing Public Construction

Development Training Statistics Management Corporation Corporation Corporation

C

Provincial Public clWorks Services

World Bank - 18517


Directorate General of Water Resources Development

T D irector General ofGe| Water Resources Devt .

Director General1. Management Information Division Secretariat of DGWRD

2. Financial Administration Division3. Personnel and Organization Division Assistant Director General

4. Legal Division5. Foreign Assistance Adm Division 1 2 3 4 5 66. General Affairs Division J

Directorate~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dretrt of ||| of Planning Directorate Directorate Directorate Directorate D rate o

and of Irrigation of Rivers of Svvamps of Logistics HydnerauingProgra mming Eninern

Special ProlectExecutive Bodies

(Prosida, P4S, Brantas,Jakarta Flood

Control Project)

Plaroaing Irrigation River Swamp Equipment EHydraulic

River Basin Studies Proiects Projects Projects Project Projectsand Groundwater

Exploration (World Bank - 18518


Secretariat of the Directorate-General of Water Resources Development

Assistant Director General

Management Infor- Financial Personnel and Foreign Assistance General Affairsmation Division Administration Organization Legal Division Adm. Division Division

Division Division

Technical Dev. - Budgeting rganization and Law [ Technical Asst. General Adm.Sub-Divison j | Sub-Division Methods. Sub-Div. | Sub-Division Sub-Division Sub-Division

Dev. Evaluation Treasurer Personnel Dev Legal Order 1 Project Asst. Filing & Reproduc-Sub-Division Sub-Division Sub-Division Sub-Division j Sub-Divison tion Sub-Div.

Dev. Reporting | Finance Adminis- 1 Personnel Adm. Civil Law Aspect 1 Foreign Aid Adm. Internal AffairsSub-Division j tration. SSub-iivi Sub-Division Sb-Division Sub-Division Sub-Division

Adm. & Building Control and Public RelationsMaintenance Monitoring Sub-DivisionSub-Division of Foreign

Aid Projects Unit

World Bank - 18519


Directorate of Planning and Programming

Director of Planning

and Programming

D AdminSstratIon DApprisa SDivision

Technical Finance - ] GeneJral Bfank s Fore8520i

Sub-Division Sb-Division 1 Sub-Div 'si'on Adminstra

Oraizto of River Basin Dev. Ground WaterWR Plnnn Planning Dev. Planning

m n strat on of ~ ~ ~ Preparation, |w DSre

WRDPlanin Programming & Deig Seto

Section ~~~~~~Reporting Sectionio

WRD Ecnoi Suve Secio GWD Construc-|JSeSuvetionon| tion Section

Adm ofDI Design Section |Operation Dev.

Liaso Appraisal Section |S4Upervisio

Water Re- |

_sournces

Data Unit

World Bank -18520

INDONESIAIRRIGATIO PROGRAM REVIEW

Directorate of Rivers

Director of Rivers

AdministrationDivision

Technical Finance General Affaris Foreign EquipetSub-Oivision Sub-Division Sub-Division Aid Admin-

istration SupervisionUnit UnitI~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ l

1st. Construction 2nd Construction River OperationDevelopment Development and Maintenance

1st Section for 4th Section for R _alSurvey Section Construction Dev. Construction Dev. tation Section

River Rehabili- 2nd Section for 5th Section for River Trainingtativer Section- Construction Dev. Construction Dev. SecTion

tation Section ~~~~~~~Section _ Section_ Seto

River Control 3rd Section for 6th Section for River OperationDesign Section Construction Dev. Construction Dev. and Maintenance -

OQSection Section Section 1

World Banik -18521


Directorate of Swamps

Director of Swamps

AdministrationDivision

Technical Finance General Affairs Foreign AidSub-Division Sub-Division Sub-Division Administration

Swamp Planni 1st Construction 2nd Construction Swamp Operation andSwm lann Development Development Maintenance

1st Section for 4th Section for Swamp FunctionalSurvey Section Construction Construction Organizing Section

Development Development

2nd Section for 5th Section for Swamp FunctionalI nf ra Structure _ Co nstructlo n Co nstructlo n _ DevelopmentPlanning Section I Development Development Section

3rd Section for 6th Section for Operation andInfra Structure Construction Construction MaintenancePlanning Unit il _ Development Development Section

ID

_ Swamp Functional BPlnnn Sc Io World Bank -18522

IEquiplment Plan-


Directorate of Irrigation

| Director of l

Irrigation

l l j ~~~~~~~~~~~~~~~~~~~~Divsion l

Technica[ Finance General Affairs Foreign Aid Equipment

sub-Division Sub-Division Sub-Diviiion Administration Supervision

Unit Unit

Irrigation 1st Construction 2nd Construction Rehabihtation Mainan

Planning Servic Development DevelopmentSevcMannnePltiSetio for 4th Service Service

1 1st Technical | J Cst ection fo 4th Section for 1st Section for Irrigation Net-

Planning Service Development CDevelopment Rehabilitation work Control

2nd Irrigation 2nd Section for 5th Section for 2nd Section for Operation and

-Technical _ Construction Construction Rehabilitation f Maintenance

Planning Section Development Development Section

3rd Section for 6th Section for 3rd Section for ertiary Network

Design Section Construction onstruction e tion Development

Development Development RehbiaSectiontC

Survey Section lX Projects Mon- |_

Irrigation l| itoring Unit l

*Badan Pelaksana Proyek Induk Irigasi dengan bantuan Bank Dunia (Executive

Body for Major Irrigation Projects with World Bank Assistance) World Bank- 18523


Directorate of Logistics

Director of Logistics

Administration |; | ~~~~~~~~~~Div ions

Technical I Finance General AffairsSub Division SubDyson j Sub Division

Equipment Service l Materials Service l

Land and Floating M trian PlanningEquipment Section I and Procurement

(Sumatera) Section

Land and FloatingEquipment Section II Transportation

(Java) Section Y

Land and Floating H

Equipment Section IIItoaeSeto jr-Storage Section t

(Kalimantan/Sulawesi)

Land and FloatingEquipment Section IV

(Maluku, Bali, NusaTenggara, Irian Jaya)

World Bank - 18524

INDONESIAIRRIGATION PROGRAM REVIEWDirectorate of Hydraulic Engineering

Director ofHydraulic Engineering

! Administration |l Division

Technical Financial General Affairs Foreign AidSub-Division Sub-Division Sub-Division Administration

Unit

Hydrology Service Hydraulic Service Hydraulic Structure Documentation andHydrology Service l l Hydrauhc Service l l ~~~~~Service ll Dissemination Service |

y rometrics eneral Hydrau- Technical Geology Dcut ionSectionalic Section Section

Groundwater.Hydrology River Hydraulic Soil Mechanics Dissemination

Section _ Section Section Section

Water Quality Estuary & Shore(Chemistry) Section Hydraulic Section Structure Section Data Collection

General f )Hydrology f

World Bank - 18525


PROSIDA(Special Project Executive Body Responsible for IDA and IBRD Projects*)

DIR. GENERALWATER RESOURCES

DEVELOPMENT

EXPERTS * _ S GEN. M AGEADVISORY GRROUP

CHIEF CHIEF

ENGINEERING OP. & MAIN. l DMISR

|DEPUTY CHIEF | |DPT HEENG./CONSTRUC. | ENG.SUV.DS

ASST. TO THE ASST. FORASST. FORGEN. MANAG. SUPERV CONST.FINANCE

Z IISST.}FOR AASST. FOR CEARSBFO

FOR MADIUN (E-SERIES) A-SERIES B-SERIES. FOR

7 BUILDING/FAC l 7 DESIGN HYDROLOG. GEN. AFFAIR

Proyek Irigasi IDA FACPROSIDAI

_l ASST. FOR l | ~~ASST. FOR ASST. FO7R | ASST. FOR7 MECH. EQUIPM. g 7 BUDGET/REP. l 7 AGRICULT. LOGISTIC AFFAI

7 BUDGET/REPORT.UDE |E AI

CONSULTANT~~ SUB.PFIOJECT | SUB.PROJECTS SUB.PROJECT SUB.PROJECT | UB. PROJECT FO CERBONFO MOSLADINT _ (E-SERIES) | A|-*ERIES B-SERIES C-SERIES | |D-SERIES r

'Proyek IrigasM WDA (PROSIDA)

World Bank -18724


P4S (Special Project Executive Body Responsible for Tidal Land Development*)

Director General of WaterResources Development

General Manager m_ mm_ Advisory Board

Deputy General Manager

Chief of Staff

Deputy Chief of Staff

E g s X | X X | N E Cw|>. % E >| " ° | -d,.|1- | c

E A-~~~~~~~-

R IAU JAMBI SOUTH WEST SOUTH/CENTRAL C~~~~~~~~~~~~c E SUMATERA eaure KAIANA < ALIMANTAN < LD

Proyek Pengembangan Persareahan Pasang Surut (P4S) World Bank-18662


Suggested Structure for Directorate General of Water Resources Development

Director Generalof

Water ResourcesDevelopment

Divi sions Under-I

DirecAratsofsrecorarecort firctorant D Secretariat of DGWRD

W. Project Monitor ing2O Personnel Administration AsUistant Director General3. Financial Administration

4. Foreign Assistance Administration a R I e_ neacad vl65- Legal Affairs1 2 3 4 5 66. General Affairs _ _ _ m

Planning and Works. Works, Works, Works, Technical

Design Region I Region 11 Region III Region IV Services

Overall Co-ordination of: Units and Sub-Directorates for. Units and Sub-Directorates for.l

Survevs & Investigations Survey & Investigaticons HydrologYlPlanning and Programrming Planning & Design Same Same Same Hydraulics/Researchl

Design Construction (3) as for Region I as for Region I as for Region I Design, Research and Develop-l Construction & Logistics Logistics ment ran

O 81 M O & M Trining {r

_M D.&_ Dissemination J D

World Bank - 18663

Figure 4.13


Suggested Structure for Directorate of Planning, Programming and Design

D irecto r of Planning, Programm-

ing and Design

_ _ _ _ Chief of Staff

Technical Financial GeneralAdministration Ad ministration Administration

Sub-Directorate Sub-Directorate Sub-Directorate S De r1~ ~ ~ 1 Sub-Di rectorate Sub -Di|rectorateCo- ordination Co-ordination Co-ordination Co-ordinationof Surveys & of Planning of Designs of Construction of 0 & M.Investigations & Programming and Logistics

S & I Region I P & P Region I Designs Region I C & L Region I 0 & M Region I

S & I Region 11 P & P Region 1| Designs Region 11 C & L Region °1 0 & M Region II

S & I Region III P& P Region III Designs Region III, C & L Region III 0 & M Region III

S & I Region IV P & P Region IV Designs Region IV C & L Region°V 0 & M Region IV

World Bank - 18664


Suggested Structure for a Directorate of Works

|Directorof

|Works, Region I

Chief of Staff

Technical iaca Gerl|Administration | diltaion |i dlnsrton|

[ Sub-DirectorateSub-Directorate Sub-Directorate Sub-Directorate Sub-Directorate Sub-Directorate OperationTechnical Project Project Project Logistics andSupport Implementation Implementation Implementation Maintenance

L Surveys and l X Project I Project V Project IX Logistics I O& M IInvestigations Unit

Plannning Project 11 Project VI Project X Logistics II 0 & M IIUnit

Design Unit Project III Project VIl Project XI Logistics III 0 & M III

M Project Unit Project IV Project Vil Project XIl Logistics IV 0 & M IV

I Monitoring Unit I I I I I I I I W a

World Bank -18665

Figure 4.15

INDONESIAIRRIGATION PROGRAM REVIEEW

Typical Organization of a Traditional "Dharma Tirta"

Village Assembly

Technical Ad- ~ ~ ~ TchncaTechnical Ad- LrhAdvisors for

visors for Lurah AgricultureIrrigation at

Village Level at Village

Ulu-Uiu desa

Assistant Ulu-UluApprox. 10 Ha. per Assistant Ulu-Ulu

World Bank - 18755

IBRD 13128I 'v100$ r 103-06 IOti 109- ,po rrt

000 6 ,9,, APRIL1978

XMALAYSIA s0O; ,- CHIINVA 5-,G,

Raoano =rd, . x w MALAYSIAudy Arean9 G PNGAPORE

7 -0 Al..i N r-..

P. K 7/ L M A N T A N lig S,d A-_z,,PrrrtrRaoStudoA(Oa ri Ne N ) J . Dumo or trE 20Sub 2roe

2500 0 , h a 6 5,0 00ha j A V A S E S;d _ 1

~~~WyKe b 7 \\ ieaeSbppet4,0 Suharoe -sun K A LIno M A T A Pto-Parl flrdyAINDONESIA 7'Gror a, | S.dyuproLerr / Ar

IRRIGATION PROGRAMAREVE R <ra1oo \o\akolcuroro Keltrtedalevr9a3oo

6ANK G~ReOUPl ASISE 8R.ICSt1Xl7,000ha (rodori9 2_

S7d0ng Sub-proFoerEk,-, SWAMpLANDr 84.00 Ia P0A0rhP 5 6l00h.

Wa S.pur,hS Srlamp-g Sub -phoitt I A V A 5 E A *210 2 30 40 5,60 1 / N D I A tv 65000 hC E Seot,Way Ko rur Sb-c 241.00 h.

O- 1 t Sub pro-c ,700 h,

Way P',,,'31 10b- 109- 42,00, ha3580 ha ~~~~~~Jatilrohru Prope- 253.000 haIRI,-gaoSub proj-r92,00h0 h. 23l C 006 h,,rp90w

INDONESIA eCrau ictr Flood Control0 h

IRRIGATION PROGRAM REVIEW , Id p-I17,00h

Tyaninp aSb kalro I . ,tdy Art 4.20050.RANK GROUP ASSISTED PROJECTS (IS)7,600b hZ r a. -. hu

L I EXISTING AREAS UNDER IRRIGATION CIletuh Srudy Arer oee ROADS 7F00 r.-be, SSeS RIVERS 5IrRORh. rta ~ ooTIDAL LANDS .- NSWAMP LANDS LOBKL i hdLNPK~ PorIPNay

- INTERNATIONAL BOUNDARIES MIi - I, P I

75,00 haTrehab,I--r,o kr Srrt . o, ,S.-"-. rrl,r oe AI ~~~~~~~~30,0 he TO2800hDOOIP

2.800 hr -r-udcrat prior proje- BMBAWAdr-huN

0 lOS 200 300 400 Soo N G C A K \l, ~ Rudy KILOMETER6S IV AyLV0 C AI

o too 200 300 A.E. - d 0 0r Al d b -~A.rMILES -4,-. MO

100- 196- 109- 112- 121~~~~~~~~~~~cepane ruc Urrraot..- - BAI S 0< RO

Documents

Report No. 2027a-IND Indonesia Irrigation Program Revie · Report No. 2027a-IND Indonesia Irrigation Program Review October 16, 1978 Projects Department East Asia & Pacific Regional