Technical Assistance Consultant’s Report...BCM billion cubic meter ... 1. The Asian Development Bank (ADB) approved a Transaction Technical Assistance (TRTA) Grant (TA 9349-CAM)

Project Number: 51159-001 (TA 9349-CAM) October 2019

Kingdom of Cambodia: Preparing the Irrigated Agriculture Improvement Project (Financed by the Technical Assistance Special Fund and Project Readiness Improvement Trust Fund) Prepared by: Pacific Rim Innovation and Management Exponents, Inc., Philippines in association with Sheladia Associates, Inc. (USA) and CamConsult (Cambodia) Prepared for: Ministry of Water Resources and Meteorology This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and neither the ADB nor the Government shall be held liable for its contents.

Technical Assistance Consultant’s Report

TA 9349-CAM: PREPARING

THE IRRIGATED

AGRICULTURE

IMPROVEMENT PROJECT

(IAIP), CAMBODIA

Final Report

3 May 2019

TABLE OF CONTENTS Page i

TA 9349-CAM: PREPARING THE IRRIGATED AGRICULTURE IMPROVEMENT PROJECT (IAIP), CAMBODIA

TABLE OF CONTENTS

Page

List of Tables ii List of Figures ii List of Appendixes ii List of Abbreviations iii I. INTRODUCTION 1

II. PROJECT BACKGROUND 2

A. Overview of the Cambodian Agriculture Sector 2 B. ADB Sector Experience and Assistance Program 10 C. The Project Area 11

III. THE PROPOSED PROJECT 13

A. Rationale 13 B. Impact and Outcome 15 C. Outputs 15 D. Implementation Arrangements 19 E. Costs and Financing 23

IV. DUE DILIGENCE 25

A. Technical Viability 25 B. Economic and Financial 25 C. Governance 25

V. SAFEGUARDS 29

A. Environment 30 B. Involuntary Resettlement 33 C. Indigenous Peoples 34 D. Climate Change and Disaster Risk Reduction and Disaster Management 35

VI. GENDER AND SOCIAL DIMENSIONS 36

VII. PERFORMANCE MONITORING AND EVALUATION, REPORTING, AND COMMUNICATION 38

A. Monitoring 38 B. Evaluation 39 C. Reporting 39 D. Stakeholder Communication Strategy 40

TABLE OF CONTENTS Page ii


LIST OF TABLES

Number Title Page

1 Classification of Irrigation Systems in Cambodia, 2009 7 2 Overview of IAIP Target Provinces 12 3 Project Readiness Activitiesa 19 4 Project Implementation Plan 20 5 Project Cost Estimates 23 6 Allocation and Withdrawal of Grant and Loan Proceeds 24 7 Financial Management Action Plan 26 8 Risks and Mitigation Measures 28 9 Stakeholder Communication Strategy 40

LIST OF FIGURES

Number Title Page

1 Distribution of Rainfall in Cambodia 5 2 Map of the Project Area 12 3 Project Organization Structure 22 4 PMU Organizational Chart 23

LIST OF APPENDICES

Number Title

1 Terms of Reference of the TRTA Consultant 2 Development Coordination 3 Project Design and Monitoring Framework 4 Irrigation Asset Management System 5 National Water Resources Data Management Center and Water Resources

Information System 6 Selection Criteria for Scholarships, Internship, Training, and Mentoring 7 Project Organization Matrix 8 List of Project Management Unit Staff and Terms of Reference 9 Detailed Cost Tables 10 Economic Analysis of IAIP Subprojects 11 Financial Management Assessment Report 12 Procurement Capacity and Risk Assessment Report 13 Procurement Plan 14 Terms of Reference of Consultants 15 Risk Assessment and Management Plan 16 Summary Initial Environmental Examination Reports for the Four Subprojects 17 Rapid Ecological Assessment of the Stung Chinit South Area with focus on the

Bengal Florican 18 Bird Survey Report 19 Summary Poverty Reduction and Social Strategy 20 Gender Action Plan

LIST OF ABBREVIATIONS Page iii


LIST OF ABBREVIATIONS

ADB Asian Development Bank ADF Asian Development Fund AFD Agence Francaise de Developpement BAP biodiversity action plan BCM billion cubic meter CDRI Cambodia Development Resource Institute CEDAC Cambodian Center for Study and Development in Agriculture CSO Civil Society Organization DDR due diligence report DED detailed engineering design DFAT Australian Department of Foreign Affairs and Trade DFWUC Department of Farmer Water User Communities DHRW Department of Hydrology and River Works DMF design and monitoring framework DP development partner DRR disaster risk reduction DSS decision support system EA executing agency EIA environmental impact assessment EIRR economic internal rate of return EMO Environmental Management Officer EMP environmental management plan EWS early wet season FAO Food and Agriculture Organization FDRMMP Flood and Drought Risk Management and Mitigation Project FERP Flood Emergency Reconstruction Project FR Final Report FS feasibility study FWUC Farmer Water User Community FWUSG Farmer Water User Subgroup GAP gender action plan GDP gross domestic product GHG greenhouse gas GRM grievance redress mechanism ha hectare IA implementing agency IAIP Irrigated Agriculture Improvement Project IAMS irrigation asset management system IBBA important bird and biodiversity area ICT information and communication technology IEE initial environmental examination IFAD International Fund for Agricultural Development IMT irrigation management transfer IPM integrated pest management IRC Inter-Ministerial Resettlement Committee IRRI International Rice Research Institute ISF irrigation service fee IUCN International Union for Conservation of Nature IWRM integrated water resource management JOROP Joint Reservoir Operation km kilometer LARP land acquisition and resettlement plan

LIST OF ABBREVIATIONS Page iv


m meter MEF Ministry of Economy and Finance MAFF Ministry of Agriculture, Forestry, and Fisheries MIME Ministry of Industry, Mines, and Energy MLMUPC Ministry of Land Management, Urban Planning, and Construction MOE Ministry of Environment MOH Ministry of Health MOWRAM Ministry of Water Resources and Meteorology MRD Ministry of Rural Development NDF Nordic Development Fund NDMC National Disaster Management Committee NGO nongovernment organization NRE Natural Resources and Environment NRM natural resources management NSDP National Socio-economic Development Plan NWDMC National Water Data Management Center NWRDMC National Water Resources Data Management Center OCR ordinary capital resources O&M operation and maintenance PDWRAM Provincial Department of Water Resources and Meteorology PFM public financial management PMIC Project Management and Implementation Consultant PIMD participatory irrigation management and development PMU Project Management Unit PPMS project performance monitoring system PPP public-private partnership PRIMEX Pacific Rim Innovation and Management Exponents, Inc. PSC Project Steering Committee QPR Quarterly Progress Report RGC Royal Government of Cambodia Rice SDP Climate Resilient Rice Commercialization Sector Development

Program SCS Stung Chinit South SEMP site environmental management plan SOE statement of expenditure SOW-REF Secretariat of the One-window Service for Rice Export Formalities SP subproject SPRSS summary poverty reduction and social strategy SPS Safeguard Policy Statement SRM staff review meeting SRP Sustainable Rice Platform SWM solid waste management TA technical assistance TOR terms of reference TRTA transaction technical assistance UNEP United Nations Environment Programme UIWRMSP Uplands Irrigation and Water Resource Management Sector Project VAT value added tax WA+ water accounting plus WCS Wildlife Conservation Society WMIS Water Management Information System WRIS water resources information system WRM water resources management WRMSDP Water Resources Management Sector Development Program

https://www.adb.org/projects/documents/cam-wrmsdp-2015-emr

FINAL REPORT Page 1

TA 9349-CAM: PREPARING THE IRRIGATED AGRICULTURE

IMPROVEMENT PROJECT (IAIP), CAMBODIA

I. INTRODUCTION

1. The Asian Development Bank (ADB) approved a Transaction Technical Assistance (TRTA) Grant (TA 9349-CAM) to the Royal Government of Cambodia (RGC), through the Ministry of Water Resources and Meteorology (MOWRAM), for the preparation of the proposed Irrigated Agriculture Improvement Project (IAIP). The ensuing project will enhance agricultural and rural economic productivity through the increased efficiency of irrigation systems and improved management of water resources in Cambodia. It will: (i) enhance efficiency and climate resilience of four irrigation systems in Kampong Cham, Battambang, Takeo, and Kampong Thom provinces with a total command area of about 43,500 ha; (ii) improve water resource management through participatory irrigation management and capacity building of farmer water user communities (FWUCs) and national and provincial water resources and meteorology staff; and (iii) provide infrastructure, equipment, and training to manage water resources information for better planning and investment. 2. To implement the TRTA and assist MOWRAM in preparing the design of the proposed project, ADB engaged the services of Pacific Rim Innovation and Management Exponents, Inc. (PRIMEX) (Philippines) in association with Sheladia Consultants (USA) and CamConsult (Cambodia), through a contract signed on 19 September 2017. (The terms of reference [TOR] of the TRTA Consultant are shown in Appendix 1.) The TA Consultant Team was composed of 33 consultants (19 international and 14 national), who provided a total of 154.5 person-months (p-m) of specialist inputs. The TRTA Team commenced services on 25 September 2017 with the mobilization of the Team Leader/ Water Resources Management Specialist and four national consultants. A Project Management Unit (PMU) office was established at MOWRAM with H.E. Chann Sinath, Under Secretary of State, as Project Director, and office equipment procured.

3. After extensive field visits for ocular survey and local stakeholder consultations in seven provinces (Battambang, Kampot, Kampong Cham, Kampong Thom, Prey Veng, Takeo, Tbong Khmum) in October and November 2017, several candidate subprojects were identified for possible inclusion in the ensuing project. These candidate subprojects were screened using the following selection criteria:

The subproject has low irrigation efficiency and water productivity but has scope for substantial enhancement of both irrigation efficiency and water productivity.

The subproject requires only a rehabilitation of existing irrigation infrastructure and systems or related schemes, NOT the construction of new infrastructure and systems.

The subproject should involve rehabilitation of both main and secondary canals to ensure that farmers and sharecroppers who work on faraway lands will be reached.

The command area of the subproject should be sufficient to generate substantial economic returns.

The subproject should be economically viable and technically, socially, and environmentally feasible.

Majority of beneficiaries should be sharecroppers, poor farmers, women, and other vulnerable and excluded groups.

The subproject should be located away from the Tonle Sap. The subproject should not be covered by other existing or proposed development

projects financed by ADB, such as the WRMSDP (Loan 2672-CAM [SF]) and the Climate-Resilient Rice Commercialization Sector Development Program (Rice SDP) (Loan 3007-CAM), or by any other development partner (DP).

FINAL REPORT Page 2



The subproject will, to the extent possible, not significantly require land acquisition or involuntary resettlement (including the displacement of squatters or encroachers from the rights of way, applying both permanent and temporary physical and economic displacements). Proposed subprojects assessed as Category A under the ADB Safeguard Policy Statement (SPS) (2009) (i.e., considered to entail significant land acquisition impacts) during initial screening will not be eligible under the proposed project.

The subproject must be maximum Category B for Environment and Category C for Indigenous Peoples under the ADB SPS (2009).

4. After a screening of the candidate subprojects, the following four irrigation systems were selected for inclusion under the TRTA: (i) Kamping Pouy Irrigation System in Battambang Province; (ii) Prek Po Irrigation System in Kampong Cham; (iii) Stung Chinit South (SCS) in Kampong Thom Province; and (iv) Canal 15 in Takeo Province. 5. These four subprojects were subjected to feasibility study (FS), and detailed engineering designs (DEDs) were prepared for Kamping Pouy and Prek Po. For the other two subprojects (Stung Chinit South and Canal 15), DEDs will be prepared during the first year of implementation of the ensuing loan-funded project. The FS reports for the four subprojects were submitted to ADB and MOWRAM in May 2018, and their DEDs and related documents (technical specifications, bill of quantities, and tender documents) were submitted in October 2018. The TRTA was supposed to have been completed in September 2018, but was extended three times (31 December 2018, 31 March 2019, and 30 June 2019) to enable the Consultant Team to provide assistance and support to ADB until the conduct of loan negotiations between ADB and RGC. 6. This Final Report presents the proposed design of the proposed Irrigated Agriculture Improvement Project in Battambang, Kampong Cham, Kampong Thom, and Takeo provinces in Cambodia. The report also includes the results of the technical, financial, and economic due diligence, as well as the poverty and social (including gender) and environmental assessment of the proposed project.

II. PROJECT BACKGROUND

A. Overview of the Cambodian Agriculture Sector

7. Since 1993, when the first post-conflict national elections were held leading to the first coalition government, Cambodia has been through dramatic political, economic, and social changes and has undertaken crucial institutional and economic reforms, which have led to impressive growth and development outcomes. While the economy continues to expand rapidly in Cambodia, real GDP growth eased to 6.8% in 2017 from 7% in 2016.1 However, Cambodia’s economic activity continues to expand at a robust pace. The growth rate is expected to be marginally higher than 2017, reaching 7.1% in 2018, driven primarily by domestic consumption and exports.2

8. The agriculture sector has been a major driver of the country’s economy, along with construction, garment export, and tourism. Agricultural production improved largely due to better weather conditions after the country experienced severe droughts for a number of years. Paddy rice production expanded, rising to 7.4 million tons in 2018, or a 3.5% increase on 2017.3 While agriculture’s share of GDP has declined over time, gross agricultural 1 World Bank Group. Open Knowledge Repository. Report: Cambodia Economic Update: Recent Economic

Developments and Outlook. April 2018. 2 Ibid.

3 https://www.khmertimeskh.com/50575496/paddy-rice-production-reaches-7-4-million-in-2018/

https://www.khmertimeskh.com/50575496/paddy-rice-production-reaches-7-4-million-in-2018/

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output has expanded as a result of the increase in the area under irrigation, the use of improved inputs, and some commercialization in farming. The sector has also remained an important source of employment, enterprise development, and poverty reduction. Agriculture is also the most important sector for employment, employing more than half of the country’s workforce. It is more important to the rural poor as it provides their most important source of income; the poorest 10% of the Cambodian population are rural households that are mostly dependent on agriculture for their livelihood.

9. Agriculture continues to play an important role in Cambodia’s economy, but it provides a livelihood for a smaller proportion of today’s population than it did in the past. A Ministry of Agriculture, Forestry, and Fisheries (MAFF) study released in June 2017 found that today, around 40% of the population work in farming, down from about 80% in 1993. Rice is, by far, the most important product, making up 60% of agriculture’s contribution to GDP. Fishing and fisheries make up another cornerstone of Cambodia’s rural economy, providing an estimated 80% of animal protein in the typical Cambodian diet.4

10. Rice production is central to the Cambodian agriculture sector. The rice subsector comprises about half of the national agriculture, forestry, and fisheries output. It is also one of the main engines driving agricultural sector growth, contributing more than 75% of the total crop production from 2010 to 2012.5 Rice is also the staple of the traditional diet, providing more than 75% of the daily energy intake for the average Cambodian.6

11. Paddy production occupies around 75% of the cultivated land, and rice contributes around 15% of the total agricultural value added (IFC, 2015). The cultivated area for rice in Cambodia was around 3.052 million ha in 2016, comprising two main seasons: wet and dry. Wet season farming covers around 74% of the total cultivated land, and dry season approximately 16% (MAFF, 2017). Rice production has increased significantly during the last decade, with the production volume increasing by more than double from 2000 to 2016. The data show that the estimated paddy production in 2016 increased to 9.9 million tons in 2016 compared to only 4 million tons in 2000 (MAFF, 2017).7

12. Cambodia has recently re-entered the world market as a rice exporting nation, following a 30-year hiatus caused by war, political isolation, and a decimated agricultural sector. A resurgence of rice cultivation is occurring across the country’s vast lowlands, as the rural population expands, and previously abandoned or mined farmlands are brought back to production. Rice production growth in Cambodia expanded further in 2016 due to improved weather. Rainy season rice production, which accounts for almost 80% of Cambodia’s total rice production, grew significantly for the first time since 2013, increasing by 0.38 million metric tons (t) in 2016 and reaching 7.4 million t of paddy rice in 2018.8 This is explained by the expansion in harvested area by 1.1%, reaching 2.56 million ha, while yields rose by 4.2%, averaging 3.2 t/ha (98% of the cultivated area has already been harvested).9 Other factors that contributed to the country’s rice production success story over the past decades include (i) the considerable expansion of the nation’s irrigation infrastructure, (ii) increased use of improved high-yielding rice varieties, and (iii)

4 Open Development Cambodia, Agriculture and fishing. March 2015. https://opendevelopmentcambodia.net/topics/agriculture-and-fishing/ Accessed on 30 April 2019.

5 Men Sarom. 2013. Technical Workshop on Agricultural Transformation in Asia: Policy Options for Food and

Nutrition Security. Siem Reap, Cambodia. 6 World Bank. 2009. World Development Indicators. Washington, DC. USA.

7 Cheu Ponleu and Heng Sola. Overview of the Cambodian Rice Market_ Challenges and the way forward. 2018. Cambodian Agriculture Value Chain Program. Phnom Penh, Cambodia. http://ap.fftc.agnet.org/ap_db.php?id=886 Accessed on 29 April 2019.

8 https://www.khmertimeskh.com/50575496/paddy-rice-production-reaches-7-4-million-in-2018/ 6 February 2019.

9 World Bank. Ibid.

https://opendevelopmentcambodia.net/topics/agriculture-and-fishing/

http://ap.fftc.agnet.org/ap_db.php?id=886


FINAL REPORT Page 4



intensification of cropping with the introduction of an early wet season followed by the main wet season crop.10

13. Rapid growth in rice production has turned Cambodia from a net rice importer to an exporter, with rice exports increasing from 700 t in 2000 to 40,000 t in 2010. In 2013, Cambodia exported nearly 400,000 t of rice to 66 countries.11 In 2017, the total amount of formal Cambodian rice exports increased to about 635,679 t in 2017, an increase of 17.3% from 542,144 in 2016, according to a report from the Ministry of Agriculture.12 In 2018, total exports of milled rice decreased by 1.5%, reaching only 626,225 t, which were sent to 61 different countries around the world.13 Although, Cambodia remains a relatively small rice exporter, accounting for only 1.9% of the world rice trade in 2016, its value of rice shipments grew by 148.9% since 2012.14 Between 2015 and 2016, although volume of rice export increased by only 0.7%, the export value grew about 7%.15 Rice has become one of two most important agricultural export commodities, contributing around 2% to the country’s total export earnings in 2015,16 surpassing the traditional agricultural exports of rubber and forestry products.

14. Cambodia’s rice exports increased rapidly in the past seven years, and export data from the Secretariat of the One-window Service for Rice Export Formalities (SOW-REF) show that it grew from 105,259 t in 2010 to 635,679 t in 2017.17 In the first nine months of 2018, Cambodia exported 389,264 t of rice, a drop of 8.4% from 2017 according to figures from the MAFF.18

15. Rice is the overwhelmingly predominant food crop, being grown on an estimated 2.3 million hectares (ha), or nearly 85% of the country’s total cultivated area, and providing more than 50% of crop value added nationwide. The paddy growing area is currently 3.06 million hectares (ha), covering 68% of the total cultivated land (4.5 million ha).19

16. Rice is grown over a diverse landscape and encompasses four major rice-producing ecosystems: rainfed upland, rainfed lowland, deep-water or floating rice, and irrigated dry season or recession rice. The predominant growing environment is the rainfed lowland rice crop, which accounts for 90% of the total wet season crop area. The average farm size varies by region and population density, with the largest in the northwest provinces at 2-4 ha and the smallest in the southeast at 1-2 ha. In the crowded southern Mekong River region, farms often average less than 1 ha, but nationally, the average farm size is approximately 1.2 ha.

17. The country’s rice growing regions experience distinct wet and dry seasons, with majority of the national crop (about 80%) being cultivated during the summer monsoon wet season in 86% of the total rice area, and 20% produced in the predominantly irrigated dry winter period in 14% of the total rice area. Throughout Cambodia, substantial year-to-year variation in total rainfall and rainfall distribution pattern is experienced (Fig. 1). The rainfall

10

World Bank. 2009. World Development Indicators. Washington, DC. USA. 11

IFC. 2015. Cambodia Rice: Export Potential and Strategies. Phnom, Penh, Cambodia. 12

https://www.khmertimeskh.com/99215/rice-exports-rise-2017/ 1 January 2018. 13

https://www.khmertimeskh.com/50575496/paddy-rice-production-reaches-7-4-million-in-2018/ 6 February 2019. 14

Central Intelligence Agency. 2017. The World Fact Book, Field Listing: Agriculture. 15

Cheu Ponleu and H. Sola. 2018. Food and Fertilizer Technology Center for the Asian and the Pacific Region (FFTC-AP). Agricultural Policy Articles: Overview of the Cambodian Rice Market – Challenges and the Way Forward. Cambodian Agricultural Value Chain Program. Phnom Penh, Cambodia.

16 http://atlas.media.mit.edu/en/profile/country/khm/#Exports

17 C. Ponleu and H. Sola. Ibid.

18 https://www.khmertimeskh.com/550215/rice-exports-continue-to-fall-2/ 14 November 2018.

19 Hang, S.C., H. Socheth, O. Chandarany, P. Dalis, and P. Dorina. 2012. Foreign Investment in Agriculture in Cambodia. Working Paper Series, No. 60. Cambodian Development Resource Institute (CDRI) and Food and Agriculture Organization of the United Nations (UN/FAO).

https://www.khmertimeskh.com/99215/rice-exports-rise-2017/


http://atlas.media.mit.edu/en/profile/country/khm/#Exports

https://www.khmertimeskh.com/550215/rice-exports-continue-to-fall-2/

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pattern is highly erratic, with drought and floods occurring regularly, often in the same season and often coinciding with critical stages of the growing cycle for rice, with its consequent impact upon yields. The variations in average annual rainfall produce changes in cropping patterns and options for pre- and post- rice cropping with field crops. Approximately 27% of the wet season rice crop is at least partially irrigated, while the dry season crop is essentially fully irrigated.20

18. Complex production systems prevail in the rice-growing areas of Cambodia. These have developed because rice is grown mainly in the floodplains along the lower Mekong and surrounding the Tonle Sap, where topography is extremely flat. In the area immediately surrounding the Tonle Sap, gradients are very low, while changes in water level can reach up to 8 meters (m) every year, resulting in significant areas of inundation annually. Many local irrigation systems attempt to trap these flood waters behind man-made barriers of earth and subsequently deliver trapped water to cropped areas as the waters recede. This situation will become even more challenging under the influence of climate change, which is expected to increase the intensity of rainfall and extend the periods without rain. The Ministry of Environment (MOE) estimated that between 1996 and 2000, drought-related rice losses were approximately 20% of potential national production. The severe drought in 2004 affected 300,000 ha of paddy rice leading to an 82% loss of the potential harvest.21

19. There are five main rice crops recognized in Cambodia: early wet season, wet season, recession cropping, dry season crops (using both photoperiod- sensitive and non-photoperiod-sensitive varieties), and floating rice. However, cropping revolves around three seasons: (i) the early wet season (EWS) from April to July; (ii) main wet season from July to October; and (iii) dry season from November to March (Nesbitt, 1997).

20. Rice is the dominant crop in the lowlands in the main wet season, with transplanting occurring as soon as sufficient rainfall allows the cultivation of soils and the accumulation of standing water in the fields. This may vary from June to later August depending on the season and landscape position of the field. Harvesting coincides with the early part of the dry season. In rainfed lowland rice ecosystems, more than half of the rice-growing soils are categorized as having low productivity potential, whereas about 20% has medium potential, and 23% with high potential (White et al., 1997b). The low potential soils, Prateah Lang and Prey Khmer, together represent about 40% of the lowland rice-growing area.

21. Dry season crops are dependent upon the development of irrigation infrastructure, many of which were developed during the Pol Pot period without adequate attention to the technical parameters for an efficient irrigation system. While some of these systems are progressively being upgraded with the assistance of multilateral and bilateral agencies, the smaller scale irrigation systems tend to be more efficient in

20 http://www.pecad.fas.usda.gov/highlights/2010/01/cambodia/

21 Ministry of Environment. 2001. Vulnerability and Adaptation Assessment to Climate Change in Cambodia.

Phnom Penh, Cambodia.

Figure 1: Distribution of Rainfall in Cambodia

Source: DANIDA

http://www.pecad.fas.usda.gov/highlights/2010/01/cambodia/

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terms of ease of water management, where they are less dependent upon the linear Pol Pot designed irrigation drains and canals. The introduction of shorter maturation varieties requiring less than 90 days has enabled farmers to modify their cropping patterns to avoid the period of greatest uncertainty and potential for flooding. It is this desire to minimize risk that has driven the changing cropping patterns, made possible by the introduction of early maturing varieties. For this reason, the early wet season crop is assuming greater importance in the overall rice cropping systems even though it is still relatively small when compared to the wet season crop.

22. The irrigation subsector. Cambodia’s irrigation infrastructure has grown gradually over the past two decades since modern irrigation systems were first developed in the 1950s, replacing the famous Angkor Wat ancient system based on four reservoirs, built between the 10th and 12th century, which stored some 100-150 million m3 of water to irrigate approximately 14,000 ha.22 This growth has been the result of the Government’s efforts to enable farmers to achieve higher crop yields, reduce their vulnerability to drought, stabilize rice production potential, and increase national food security or self-sufficiency. Despite this growth, Cambodia’s irrigation remains significantly underdeveloped as many irrigation and drainage systems built during the Khmer Rouge regime (1975-1979) have become useless, non-functional, and even disruptive to water management.23 Moreover, only a small percentage of these structures can be incorporated in any future water management system and will require significant investment.24 In comparison with similar rice cultivation environments in the lowlands of Thailand or the Mekong Delta in Viet Nam, Cambodia has barely scratched the surface with regard to bringing higher areas of rice land under irrigation. The estimated irrigated area of 24% of the total rice lands in Cambodia is just about one-half or one-third of the 50-75% of irrigated rice lands in the lowland of south-central Thailand and southern Viet Nam.25

23. The operating irrigation schemes are grouped into four main categories:

River, lake or stream diversion by gravity. These systems are used for wet season supplementary irrigation as there are no storage facilities. Offtakes are generally uncontrolled, although in some cases, water level control is provided by diversion weirs.

Water pumping from rivers. These systems can provide water for both the wet and dry seasons. Pump stations have been provided by the Government.

Reservoirs storing water from runoff, streams, or rivers for wet season supplementary irrigation. Water is abstracted from the reservoir by gravity or mobile pumps provided by farmers.

Reservoirs storing flood waters from the Tonle Sap/Bassac/Mekong system and released by gravity or mobile pumps for a dry season recession crop only. These areas also benefit from natural flooding for land preparation. The crop is transplanted as the floodwater recedes and is irrigated during the growing season with water stored in nearby reservoirs. This system takes advantage of the large range of water levels in the Tonle Sap/Bassac/Mekong system to fill the reservoirs during the flood to a level sufficient for gravity command of the paddy fields. Although they are equipped for irrigation, these areas are often termed

22

Food and Agriculture Organization of the United Nations (FAO). 2011. Aquastat Regional Report – Cambodia. 23

Ibid. 24

Chann Sinath. 2011. Investment in Land and Water in Cambodia. FAO Regional Office for Asia and the Pacific.

25 USDA. 2010. http://www.pecad.fas.usda.gov/highlights/201001/cambodia/

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flood recession areas as they use natural flooding at the beginning of the season for land preparation and the filling of the reservoirs.26

24. In 2009, an assessment conducted by the Cambodian Center for Study and Development in Agriculture (CEDAC) recorded 2,525 irrigation schemes across 13 provinces and found that, of this number, only 23% functioned during the dry season, 49% functioned during the wet season, and 23% functioned during both seasons.27 Those schemes that were at least 60% in line with the original design were categorized as well-functioning, 40–60% in line with the original design were considered functioning, and less than 40%, which were in line with the original design, were considered as non-functioning. The results showed that of the 2,525 schemes, only 6% were functioning well, 32% were functioning partially, and 62% were non-functioning (Table 1). In 2010, CEDAC, concluded that more than 2,400 schemes needed rehabilitation or reconstruction.28

Table 1: Classification of Irrigation Systems in Cambodia, 2009

System Size (ha)

Total No. Systems

Wet Season Surface

Dry Season Surface

Functionality

Good Partial Non-

Functioning 10,000+ 9 159,835 28,762 0 4 5 5,000 – 10,000 22 147,675 40,404 1 10 11 2,000 – 5,000 65 162,439 49,271 2 18 45 1,000 – 2,000 119 139,152 37,389 3 27 89 500 – 1,000 184 102,468 36, 290 10 64 114 100 – 500 992 154,540 104,549 93 252 647 < 100 1,134 35,434 24,502 40 431 663 Total 2,525 901,543 129,051

Source: CEDAC, 2009

25. Relevant sector policies and legislation. The 1993 Constitution of Cambodia recognizes the value of natural resources, including water and land, as strategic for the country’s development and the enhancement of the welfare of the people. As stipulated in Article 59, “the State shall protect the environment and balance of abundant natural resources and establish a precise plan of management of land, water, air, wind, geology, ecological system, mines, energy, petrol and gas, rocks and sand, gems, forests and forestry products, wildlife, fish and aquatic resources.”

26. The Rectangular Strategy for Growth, Employment, Equity, and Efficiency (Phase 3), the Policy on the Promotion of Paddy Production and Rice Export (also known as the Rice Policy), and the National Strategic Development Plan (NSDP), 2014-2018 all place increased importance on the role of agriculture (and the rice subsector) in macroeconomic and rural development.

27. The Rectangular Strategy includes “the enhancement of the agriculture sector” among its four strategic growth rectangles, the others being the (i) rehabilitation and construction of physical infrastructure, (ii) private sector development and employment generation, and (iii) capacity development and human resource development. With regard to agriculture sector development, the Rectangular Strategy emphasizes that Cambodia’s agriculture sector shall continue to play an important role in supporting economic growth, ensuring equity, securing food security, and promoting development of the rural economy. The Government’s vision is to modernize Cambodia’s agriculture, based on a new

26

FAO. 2011. 27

CEDAC. 2009. Inventory of Irrigation Schemes and Farmer Water User Committees in Cambodia. Case Study: Situation within 13 out of 24 provinces. CEDAC Farmer and Water Program.

28 CEDAC. 2010. Irrigation in Cambodia: Review and Outlook. Presentation at the Annual M-POWER Meeting of the Network Partners, 8–10 February 2010.

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approach and with a changed scope and pace, to transform the sector, from extensive form of development (i.e., primarily depending on expanded use of available resources such as land and other natural resources) and traditional agricultural inputs into an intensive type of development that primarily depends on the application of techniques, new technologies, research and development, mechanization and increased capacity of irrigation to improve productivity, and diversification into high-value crops and other agricultural products. including livestock farming and aquaculture, while taking into account the need to ensure efficient management of land and sustainability of environment and natural resources. Moreover, further promotion of commercialization and agro-industry development will increase added-value of agricultural products and income of peo

28. The Rice Policy, approved by the Council of Ministers on 25 July 2010, articulates the Government’s intent to transform Cambodia into a “rice basket” and a major rice-exporting country. In addition, it elaborates short-, medium-, and long-term measures for improved paddy production, collection and processing, logistics, and marketing, and includes an institutional mechanism for its implementation by relevant ministries and agencies.29 The NSDP directs resources to rural areas, with increased attention to production activities, including agriculture (which is dominated by rice) and rural development.

29. The Water Law, passed in 2007, has four sub-decrees on river basin management, water allocation and licensing, water quality, and FWUCs. The concept of water pricing, as embodied in this law, aims to promote “the effective and sustainable management of water resources” through integrated water resources management (IWRM). While the law recognizes water as a public good, it also recognizes the need for water to be treated as an economic good through provisions on licensing and charging of fees for certain extractive uses, as well as the development of sub-decrees on the establishment of FWUCs and water allocation.

30. Major irrigation subsector institutions. MOWRAM is the principal agency for WRM in Cambodia at the policy level. It is essentially a technical ministry responsible for the provision of irrigation services, flood and drought control, hydrology, and meteorology, etc. At the implementation level, authorities are delegated to provincial, district, and commune levels in line with the Government’s decentralization policy. MOWRAM is mandated to manage, lead, and supervise the implementation of the Water Law and carries out this mandate through its central agencies and provincial departments. It is also responsible for providing irrigation services, including the development of all irrigation infrastructure (large, medium, and small), operation and maintenance (O&M), and support for farmers to manage irrigation schemes. It has the capacity to oversee and manage externally assisted investment projects, but needs capacity strengthening and resources at the national and provincial levels to (i) improve irrigation operations, (ii) upgrade and strengthen engineering and project management human resource capacity and competencies in irrigation and drainage O&M; and (iii) improve administration, financial, and business processes in line with the Government’s public financial management reform program.

31. In irrigation, MOWRAM adopts participatory irrigation management and development (PIMD) and irrigation management transfer (IMT) through FWUCs as tools for achieving the decentralization of responsibility for O&M of irrigation facilities to the users, as prescribed in the Water Law. As the sustainability of irrigation services is highly dependent on the capabilities and responsibilities of farmers, a national program to strengthen their ability to manage minor irrigation schemes through FWUCs has been in place since 1999. However, additional investments are needed to: (i) expand FWUCs and training of farmers in on-farm water management and O&M of irrigation systems; (ii) put

29

These agencies are MAFF, MLMUPC, MOWRAM, MOC, MOE, and MIME.

FINAL REPORT Page 9



in place legal mechanisms to enable farmers, through elected FWUCs, to cover the costs of O&M independently, with appropriate incentives; and (iii) extend vocational and on-the-job training to FWUCs, with matching grants for FWUCs so they can access funds for works and capacity building. A Government order issued in March 2015 on farmers’ participation in the O&M of irrigation systems provides the basis for forming FWUCs and involving them in the design, implementation, and O&M of irrigation projects.

32. Other government institutions with important roles in water management are the following: MAFF, which is MOWRAM’s strategic partner in WRM; Ministry of Rural Development (MRD), which is tasked to provide clean water to rural areas; Ministry of Industry, Mines, and Energy (MIME), which is tasked to provide drinking water supply to cities and towns; MOE, which is in charge of wastewater treatment in cities and town; Ministry of Land Management, Urban Planning, and Construction (MLMUPC); Ministry of Health (MOH); National Disaster Management Committee (NDMC); and Natural Resources and Environment Unit (NRE) of the Cambodia Development Resource Institute (CDRI).

33. Key irrigation subsector issues and constraints. Given the country’s recent success in achieving surplus rice production, the Government is intent on expanding its production and export capacity and becoming a major rice exporting nation. At the same time, the Government recognizes that its joining the ranks of the world’s major rice producing nations requires considerable additional development of its irrigation infrastructure. The Government has prioritized the achievement of a massive irrigation infrastructure development program over other approaches that will support rudimentary agricultural or rural economic and development needs. In 2010, MOWRAM reported receiving funding commitments of approximately $2 billion for irrigation infrastructure development which, if leveraged wisely, can substantially alter the status quo in the agriculture sector.30 However, irrigation expansion is threatened by: (i) poor engineering of many existing systems; (ii) an almost total lack of system O&M owing to expensive and unpopular farm-level user fees; (iii) systems developed in regions with unsuitable soils or other physical problems; (iv) lack of sustainability of many systems over a 10-20 year timeframe; and (v) lack of farm credit, inhibiting the affordability of on-farm irrigation equipment (pumps, fuel) and tertiary access (feeder canal construction).31

34. Investments in irrigation are needed in order to stabilize and increase rice production, reduce farmers’ susceptibility to droughts and floods, and ensure food security. Irrigation systems need to be rehabilitated and upgraded to improve their performance and enable multiple cropping of rice while, at the same time, rendering them more resilient to climate change impacts. In addition, given the important role of FWUCs in helping sustain irrigation schemes, it is necessary to establish efficient and effective FWUCs, through community organization, and provide them with adequate inputs and support, particularly training and capacity building, to ensure that they function well. FWUCs also need to be provided with financial assistance, especially during the initial years of irrigation system operation before irrigation service fees (ISFs) could be fully collected to meet O&M expenses. Policy and legal mechanisms need to be put in place to enable farmers, through the elected FWUCs, to collect water user fees to enable the schemes to be operated and maintained adequately with appropriate incentives.

35. MOWRAM and the Provincial Departments of Water Resources and Meteorology (PDWRAMs) also need capacity building and additional qualified and experienced staff to boost their institutional capacity. This is because: (i) there is a limited number of personnel relative to the number of projects they are handling and will handle in the future; (ii) the current civil service system provides very low remuneration that

30

USDA. 2010. 31

Ibid.

FINAL REPORT Page 10



neither encourages self-development of staff nor attracts qualified and experienced personnel; and (iii) the existing project management system and procedures at the project and subproject levels are still inefficient and ineffective.

B. ADB Sector Experience and Assistance Program

36. ADB support to agriculture has been both multilayered and multifaceted. ADB has engaged with policy and institutional reform processes, as well as with individual investment projects on the ground (many focused on the Tonle Sap Basin provinces). It has worked on various rural livelihood dimensions (including rural infrastructure provision) and through several ministries within individual projects in often innovative (if sometimes complex) structures. The major lessons learned include: (i) regulatory and policy reforms in the sector have been significant and sustained; (ii) institutional issues have affected both the adoption of new sector practices (e.g., O&M on irrigation schemes) and project implementation (i.e., through procurement, consultant recruitment, covenant compliance delays, etc.); (iii) pursuit of basin-wide objectives for resource management has been compromised by institutional performance; (iv) sector policy and management reform has been a necessary but (so far) insufficient step to promote growth and diversification, and (v) further substantial downstream activities are necessary to provide technical training for farmers and government staff, build social capital, and promote value chain formation. 37. ADB’s future strategy and assistance program. ADB’s sector strategy supports productivity enhancement, diversification, commercialization and connectivity, and sustainable natural resources management, without compromising the natural resource base upon which long-term sustainability depends. ADB’s strategy is therefore deliberately selective in pursuit of these ends. ADB’s support is in four key areas: (i) enhancing agriculture productivity; (ii) promoting diversification; (iii) supporting commercialization and connectivity (value chains and linkages); and (iv) supporting sustainable natural resources management (NRM).

11. Enhancing agriculture productivity. Enhancing agriculture sector productivity in the first instance involves measures to make on-farm practices more efficient, based on improved use of natural resources (i.e., soils and water) and non-exploitation of ecologically sensitive areas. Given that the government regards rice development as a flagship priority, ADB’s approach is to replicate some of the productivity-oriented components of the Tonle Sap Poverty Reduction and Smallholder Development Project (e.g., improved access to good quality seeds, access to agriculture market and agriculture extension through innovative rural information and communication technology [ICT], etc.) and the Climate Resilient Rice Commercialization Sector Development Program (e.g., land use zoning and planning, ecosystem mapping and soil classification, improved land management, seeds production and distribution, technical extension materials production) activities, and also to extend geographical coverage into other provinces around the Tonle Sap basin. This theme will include some irrigation system enhancement, mainly to improve the efficiency of water management through land leveling (and to accommodate increasing peak flows) and to maintain operational sustainability (e.g., through FWUCs). This theme will also include basic research and extension capacity development within MAFF. 12. Promoting diversification. Ensuring there is scope for future productivity growth in the agriculture sector requires a greater orientation towards potentially much higher-value outputs (including and especially non-commodity outputs capable of value added transformation). Promoting diversification involves better rationalization of the production resource base to allow more specialization within rice cultivation. This includes higher value and internationally competitive rice varieties, and higher value non-rice crops. Higher value rice includes glutinous rice, aromatics (many of which have historically been quite area-




specific in their cultivation), and organic production systems. Non-rice crops are typically fruits and vegetables in lowland and irrigated areas, but can also include flowers, bamboo etc., and pulses, maize, cassava, and tree crops in upland areas, as well as livestock (in the east) and aquaculture (almost anywhere). Although many crops and primary outputs with such value adding potential are already known in Cambodia, areas are small, cultivation and management history is short, and agronomic and economic data are largely absent. Accordingly, ADB will support research and development of some rice varieties having market potential and also the non-rice crops. This will specifically include the development of input regimes and management practices designed to be environment-friendly (e.g., by better managing inputs applications) rather than potentially damaging soils, water and wider ecosystems–including system of rice intensification (SRI), ‘drought escape’, precision/drip irrigation, small-scale intercropping, zero/minimum tillage, bare and degraded lands planting. 13. Supporting commercialization and connectivity (value chains and linkages). Supporting commercialization includes a range of national and regional measures, which make agriculture more market-oriented and which better link primary producers to product markets, to Cambodia’s urban areas, and to regional demand. This theme will incorporate support for the filling critical parts of the country’s rural infrastructure deficit through the physical expansion of post-harvest facilities (i.e., for transport, cleaning, drying, grading, and storage), for rice milling efficiency improvement (i.e., for credit access and technical capacity building to reduce Cambodia’s current relatively high milling costs), for access to farm development credit, market information, technology transfer, and other farm business services (including weather-related crop insurance, soil testing, equipment provision and servicing). Improvements in rice marketing, support will also be selectively focused on those non-rice crops that realistically have market potential and investment designs will particularly explore innovative ways of working in partnership with the private sector based on experiences gained in Cambodia and elsewhere. Options for private sector to supply/ manage services on behalf of government will be explored. 14. Supporting sustainable NRM. Supporting sustainable NRM includes: (i) mapping of ecosystem functions and assessment of ecosystem services as input into land use planning processes; (ii) strengthening of and support for natural resource institutions/processes; (iii) improvement of biodiversity monitoring system to maintain ecosystem integrity; (iv) strengthening of community organizations in forestry and fisheries protected areas to manage common property resources; (v) support to innovations in developing community livelihoods based on conservation; and (vi) support for forest and fisheries resources policing (i.e., training and increasing numbers of rangers, forest patrollers). 15. Gender development. A large number of women are active in the sector but presently underpaid for their efforts, being mainly engaged in subsistence production. Thus, gender mainstreaming shall continue to be emphasized to help the Government achieve gender targets stated in the National Strategic Development Plan (NSDP). Specifically, ADB projects/programs will: (i) support women’s participation in local planning and decision making forums related to irrigation infrastructure investments, water user groups, etc.; (ii) improve women’s access to training and new technologies to increase productivity and support women to shift to higher value and market oriented production; and (iii) increase women’s access to markets and financial services. C. The Project Area

38. The project covers the rice-producing but poor provinces of Battambang and Kampong Thom in the Tonle Sap Basin as well as Kampong Cham and Takeo Khmum in the central lowlands of the Mekong River (Table 2; Fig. 2).




Table 2: Overview of IAIP Target Provinces

Zone Selected

Provinces Capital

Population

(2008)

Area

(km²)

No. of

Districts

Tonle Sap Lake

region

Battambang Battambang 1,036,523 11,702 14

Kampong Thom Steung Saen 708,398 13,814 8

Plains region Kampong Cham Kampong Cham 1,074,845 4,549 10

Takeo Duon Kaev 843,931 3,563 10

Figure 2: Map of the Project Area

39. Battambang is located in the northwest part of Cambodia. It is bordered by the provinces of Banteay Meanchey to the north, Pursat to the east and south, Siem Reap to the northeast, and Pailin to the west. Its total land area is 11,702 km2 and is subdivided into 14 districts. It ranks as the third most populous province with a population of 1,036,523 in 2008. As it is a part of the Tonle Sap Biosphere Reserve, the province’s fertile rice fields have led to a mostly agricultural economy. 40. Kampong Thom borders the provinces of Siem Reap to the northwest, Preah Vihear to the north, Stung Treng to the northeast, Kratie to the east, Kampong Cham, Kampong Chhnang to the south, and the Tonle Sap to the west. It is Cambodia’s second largest province by area at 13,814 km2. It is subdivided into eight districts with a total population of 708,398 in 2008. 41. Kampong Cham is located in the central lowlands of the Mekong River and has a land area of 4,549 km2. It borders the provinces of Kampong Chhnang to the west, Kampong Thom and Kratié to the north, Tbong Khmum to the east, and Prey Veng and Kandal to the south. Kampong Cham is subdivided into 10 districts with a total population of 1,074,845 in 2008.

https://en.wikipedia.org/wiki/Banteay_Meanchey_Province

https://en.wikipedia.org/wiki/Pursat_Province

https://en.wikipedia.org/wiki/Pailin_Province

https://en.wikipedia.org/wiki/Siem_Reap_Province

https://en.wikipedia.org/wiki/Preah_Vihear_Province

https://en.wikipedia.org/wiki/Preah_Vihear_Province

https://en.wikipedia.org/wiki/Stung_Treng_Province

https://en.wikipedia.org/wiki/Kratie_Province

https://en.wikipedia.org/wiki/Kampong_Cham_Province

https://en.wikipedia.org/wiki/Kampong_Cham_Province

https://en.wikipedia.org/wiki/Kampong_Chhnang_Province

https://en.wikipedia.org/wiki/Tonle_Sap

https://en.wikipedia.org/wiki/Kampong_Chhnang_Province

https://en.wikipedia.org/wiki/Kampong_Thom_Province

https://en.wikipedia.org/wiki/Kampong_Thom_Province

https://en.wikipedia.org/wiki/Krati%C3%A9_Province

https://en.wikipedia.org/wiki/Tbong_Khmum_Province

https://en.wikipedia.org/wiki/Prey_Veng_Province

https://en.wikipedia.org/wiki/Kandal_Province




42. Takéo is located in southwest Cambodia. It borders the provinces of Kampot to the west, Kampong Speu to the northwest, and Kandal to the north and east. Its southern boundary is the international border with Viet Nam. It has a land area of 3,563 km2 divided into 10 districts. It had a population of 843,931 in 2008. 43. These provinces are different in many respects. They differ in: (i) all aspects of physical works and present system functionality; (ii) soil type; (iii) water availability; (iv) road access to sites; (v) population density of nearby expanding urban centers; (vi) yearly rainfall distribution and dry periods at present; (vii) crops grown; (viii) access to agro-inputs, credit, and equipment; (ix) systems being subject to flooding of the Mekong river for water; and (x) involvement of private firms; among others. 44. Information available in the National Water Status Report (2014)32 indicates that the four provinces differ considerably in key aspects that influence irrigation systems and their potential for modernization. For example, irrigation in the province of Kampong Cham is subject to water levels in the Mekong River and its yearly flooding, whereas in the other provinces, water is extracted from local rivers and watersheds. Also, these provinces vary in soil type and fertility, population density, and distance to Phnom Penh. The latter affects their access to markets and technology. These factors will be considered in the screening and selection of SPs for modernization and in establishing a National Water Data Management Center (NWDMC) in MOWRAM and in developing a Water Management Information System (WMIS). 45. Field visits of the TRTA Team to the four provinces confirmed that the larger systems differ significantly from one another in terms of the following:

Technical state-of-affairs and stability; Links to adjacent systems; Water availability (and present or potential for water storage); Rainfall and predominant periods; Soils and fertility; Use of agro-inputs and farming technology; Access to markets; Current level of the rice fields and need for leveling; Competition for water in view of urbanization and growth of the non-irrigation

water use sector; Presence of private firms and investors (other than traditional farmers/water

users) that own land or use water in the system; System water efficiency and water productivity; and Population density and road network access, among others.

III. THE PROPOSED PROJECT

A. Rationale

46. Cambodia’s agriculture sector plays an important role in achieving domestic food security and currently serves as a major source of livelihood, household income, and significant export earnings despite the low agricultural productivity. The agriculture sector is far below its productive capacity and generates low income mainly because of the lack of water during the dry season, which limits crop diversification and cropping intensity.33 Of the 3.98 million ha of agricultural land in Cambodia, only about 1.3 million ha are within the command area of 2,730

32

A publication of the ADB-funded Water Resources Management Sector Development Program (WRMSDP). 33

ADB. 2017. Concept Paper. Proposed Loan: Cambodia Irrigated Agriculture Improvement Project. Manila.

https://en.wikipedia.org/wiki/Kampot_Province

https://en.wikipedia.org/wiki/Kampong_Speu_Province

https://en.wikipedia.org/wiki/Kandal_Province

https://en.wikipedia.org/wiki/Vietnam




irrigation systems.34 Most of these systems are either underperforming or dysfunctional due to various reasons. Some of the irrigation systems were constructed without proper design, did not have a farm-level distribution system, and did not consider crop water requirements, water availability, and hydraulic considerations. Many systems are aging and need upgrading and remodeling, but resources are limited. As a result, irrigation systems only supplement current farming that revolves around growing wet season rice for a cropping intensity of about 100%. Moreover, significant seasonal variations in rainfall and river discharges make sustained year-round agricultural production difficult. 47. Cambodia has five major river basins, and the average annual surface water volume flowing through the rivers is about 472 billion cubic meters (BCM), of which about 437 BCM (92.5%) is discharged to the Mekong Delta. Out of the remaining 35 BCM (7.5%), productive consumption by all users is estimated at about 10 BCM or only about 2% of the total surface water. There is, thus, a huge potential for developing water resources to ensure adequate irrigation water, particularly during the dry season, which can increase the cropping intensity of 3.98 million ha of agricultural land from about 100% to 200%-300%. However, as agriculture is the biggest user of water in Cambodia, utilizing about 95% of the country’s total water consumption, the efficient, effective, and sustainable management of the country’s water resources depends largely upon how efficiently irrigation systems are managed. 48. For that reason, it is important not only to upgrade the condition of old and deteriorating irrigation systems, but also to strengthen system O&M in order to sustain the increases in agricultural productivity brought about by the modernization of irrigation facilities. The O&M of irrigation systems has been a challenge in Cambodia, as in many other developing countries, mainly because of the absence of a mechanism to (i) identify the systems requiring O&M or rehabilitation or replacement, (ii) estimate the financial and in-kind resource requirement, and (iii) involve the water users. With the issuance of MOWRAM Sub-decree No. 31, issued in 2015, however, FWUCs have been required to manage irrigation system O&M at the farm level. Thus, new FWUCs have to be organized where there are none, and existing ones adequately capacitated for their role in O&M. 49. Furthermore, as Cambodia’s river basins are expected to be provided with automated gauging stations using remote sensing for water accounting in the next five years, it is necessary to establish a national water data management center (NWDMC) and a water resources information system (WRIS) for the compilation, analysis, and dissemination of recorded data for the use of government planners, designers, decision-makers, managers, and water users in integrated water resource management (IWRM). 50. The IAIP will replicate and scale up the new investment model35 introduced by ADB in the Cambodia Uplands Irrigation and Water Resource Management Sector Project (UIWRMSP) (Loan 3289-CAM), which integrates the modernization of irrigation facilities with improved system O&M in order to increase irrigation efficiency, enhance water productivity, and build climate resilience. The project will support the implementation of the government’s National Strategic Development Plan (NSDP) on Water Resources and Meteorology.36 It will contribute to achieving the targets in the NSDP, which were derived from the government’s Rectangular Strategy.37 This strategy aims to develop and expand the country’s irrigated land and manage its water resources more effectively by improving existing irrigation systems, making water user communities more efficient, building capacity

34

Ministry of Water Resources and Meteorology. 2015. Cambodia Irrigation Schemes Information System. Phnom Penh.

35 The conventional investment model focuses mainly on the rehabilitation of irrigation canals.

36 MOWRAM. 2014. National Strategic Development Plan. Phnom Penh and Ministry of Economy and Finance (MEF). 2014. Strategic Development Plan on Water Resources and Meteorology. Phnom Penh.

37 MEF. 2013. Rectangular Strategy for Growth, Employment, Equity, and Efficiency, Phase III. Phnom Penh.




of the water users, and reducing the vulnerability of Cambodian people to natural disasters. The project will also incorporate findings and recommendations of ADB’s sector strategy,38 including enhancing agriculture productivity; promoting diversification, environmental sustainability and climate change adaptation, gender development; and addressing institutional constraints. It is consistent with two of the major strategic thrusts and components of ADB’s Country Partnership Strategy, 2014-2018, for Cambodia (i.e., agriculture and physical infrastructure). It is also aligned with ADB’s Water Operational Plan and Irrigation Subsector Guidance Note (2017), which focuses on increasing irrigation efficiency and water productivity, and with the Agriculture and Natural Resources Operational Plan, which focuses on increasing agricultural productivity and improving the management of natural resources. 51. ADB is the leading development partner of Cambodia in the sector. It has also partnered with Agence Francaise de Developpement (AFD), Australian Department of Foreign Affairs and Trade (DFAT) (formerly AusAID), International Fund for Agricultural Development (IFAD), and the Nordic Development Fund (NDF) in delivering various projects in the past. ADB’s current projects in the sector include: (i) UIWRMSP ($65.0 million, 2015-2021); (ii) Water Resources Management Sector Development Program (WRMSDP) (investment component of $24.8 million, 2010-2018); (iii) Flood and Drought Risk Management and Mitigation Project (FDRMMP) ($44.8 million, 2013-2019); and (iv) Flood Emergency Reconstruction Project (FERP) ($81.68 million, 2014-2017). Major ongoing irrigation projects funded by other development partners include those financed by AFD (€24.0 million, 2015-2107), Japan International Cooperation Agency (JICA) ($65.0 million, 2013-2019), and DFAT (A$60.0 million, 2017-2020). Further details are provided in Appendix 2. B. Impact and Outcome

52. The project is aligned with the following impact: inclusive economic growth through agriculture and irrigation attained.39 It will have the following outcome: water and agriculture productivity in the project areas enhanced.40

C. Outputs

53. The project will have two outputs: (i) efficiency and climate resilience of irrigation systems enhanced; and (ii) water resource management improved.

1. Output 1

54. Under this output, the project will modernize, and climate-proof four irrigation systems (Kamping Pouy, Prek Po, Stung Chinit South, and Canal 15) to ensure irrigation for about 43,500 ha of agricultural land.41 It will: (i) remodel and improve reservoir embankment, pumping stations, as well as main, secondary, and tertiary canals and drains as well as appurtenant structures; (ii) design joint reservoir operation (JOROP) for two subprojects and schedule irrigation to improve water sharing arrangements between linked systems and ensure equitable water distribution, particularly during droughts; (iii) strengthen existing FWUCs and create additional FWUCs with strong women participation, and help them collect ISFs and perform sustainable O&M of the distribution canals; (iv) pilot an irrigation

38

ADB. 2017. Agriculture, Natural Resources, and Rural Development Sector Assessment, Strategy, and Road Map: Cambodia. Manila.

39 Government of Cambodia. 2018. Rectangular Strategy for Growth, Employment, Equity, and Efficiency, Phase

IV. Phnom Penh. 40

The design and monitoring framework (DMF) is in Appendix 3. 41

These systems or subprojects are Kamping Pouy in Battambang, Prek Po in Kampong Cham, Canal 15 in Takeo, and Stung Chinit South in Kampong Thom.




asset management system (IAMS) to improve O&M budgeting and procedures; and (v) formulate the Sustainable Rice Platform (SRP) in the Stung Chinit South subproject, providing farmers the opportunity to protect endangered bird species habitat, while achieving a premium price for rice by complying with sustainable production standards.42 55. Overall, three new FWUCs will be established in Prek Po in Kampong Cham, Stung Chinit South in Kampong Thom, and Canal 15 in Takeo Province. For the existing FWUC in Kamping Pouy, additional farmer water user subgroups (FWUSGs) will be created. These FWUSGs will be responsible for managing the O&M of the subprojects after the completion of the civil works. They will be provided with extensive training in various aspects of irrigation system O&M and supported by the respective PDWRAMs in the four project provinces. In establishing the FWUCs, women will be encouraged to be members and participate in the management committees. 56. An IAMS will be established on a computer platform and piloted in one irrigation subproject.43 If successful, it will be expanded to the remaining three subprojects for the purpose of improving IAMS and O&M budgeting for the irrigation systems. The IAMS may be replicated nationwide if the piloting turns out a success. 57. Kamping Pouy Subproject. Located in Battambang Province, this subproject is a reservoir-fed system with a 12,000-ha command area. Its modernization will involve the following civil works:

(i) Rehabilitation of a link canal of 13.90 kilometers (km) connecting Mongkol Borey River to the Kamping Pouy Reservoir, which will provide additional water supply to the subproject;

(ii) Strengthening of the reservoir embankment of 6.50 km by providing erosion protection measures on the upstream slope;

(iii) Upgrading of the 14.14-km main canal using concrete lining and installation of all structures for water control and distribution devices;

(iv) Upgrading of two secondary canals with a total length of 13.00 km and 41 associated control and distribution structures;

(v) Rehabilitation of secondary irrigation and drainage canals with a total length of 40.90 km and improvement and installation of 101 structures; and

(vi) Installation of seven drainage structures on one of the secondary drains and tertiary irrigation and drainage canals to avoid inundation of paddy lands within the target command area.

58. In addition, intensive training will be provided to the existing FWUC that was established in 2001 and to staff of the Battambang PDWRAM on the JOROP of Kamping Pouy Reservoir. This is necessary since the reservoir supplies a total command area of 19,000 ha through four canal outlets: (i) Outlet 1, 2,000 ha; (ii) Outlet 2, 1,000 ha; (iii) Outlet 3, 1,800 ha; and (iv) Outlet 4, 12,000 ha and a 2,200-ha extension to the north (outside the subproject area). It is this area under Outlet 4 that will comprise the Kamping Pouy subproject.

42

The Sustainable Rice Platform is a multi-stakeholder platform established by the United Nations Environment Programme (UNEP) and the International Rice Research Institute (IRRI) in December 2011. Its mission is to promote resource efficiency and sustainability in the global rice sector through an alliance that links research, production, policymaking, trade, and consumption. The SRP has over 80 institutional members spanning a wide range of actors both within and outside the value chain. Its current membership includes government agencies, research institutes, rice traders, and environmental and social nongovernment organizations from Cambodia, including MAFF WCS, Sansom Mlup Prey, and AMRU Rice Ltd.

43 See Appendix 4 for details.




59. Prek Po Subproject. This subproject in Kampong Cham Province has a command area of 8,000 ha. Its upgrading will involve the following activities:

(i) Construction of a new pumping station equipped with five electrical and submersible pumps on the Mekong River bank at the intake point of the system;

(ii) Upgrading of the 12.75-km main canal and secondary canals with a total length of 70 km by providing concrete lining and associated control and offtake structures; and

(iii) Establishment of a FWUC for the subproject, with sub-FWUCs based on about 200 ha and hydrological boundaries.

60. Stung Chinit South Subproject. Located in Kampong Thom Province, this subproject covers a total potential command area of about 19,900 ha. However, about 3,900 ha of the total area are being developed by the ADB-funded Climate Resilient Rice Commercialization Sector Development Project (Rice SDP). Excluding the Rice SDP area, the Stung Chinit South targets a command area of 16,000 ha in 11 communes in Baray District of Kampong Thom Province. The Stung Chinit South system is currently equipped with one main canal of 35 km and 75.78 km of combined secondary and tertiary canals. However, due to the deterioration of these canals and associated structures, the system cannot provide irrigation services to the full potential target area, especially for the dry season crop. Modernization of the subproject will entail the following civil works:

(i) Improvement of the Stung Chinit weir by replacing the existing erosion protection works at the downstream section by a concrete slab and chute blocks;

(ii) Improvement of the Stung Chinit South main canal of 35 km by upgrading existing structures, adding additional structures, fixing canal embankments, and excavating the canal bed to increase irrigation supply to the downstream area of the system; and

(iii) Improvement of 10 secondary canals with a total length of 42.6 km and five tertiary canals with a total length of 24.62 km through: (a) excavation work to restore the canal sections; (b) forming new canal embankments and fixing the existing embankments; and (c) fixing existing and constructing additional irrigation and drainage structures to ensure proper water distribution and prevent drainage issues.

61. In addition, a FWUC and sub-FWUCs will be established to support O&M activities based on about 2,000 ha per sub-FWUC and appropriate hydrological boundaries. Furthermore, an SRP will be formulated in the Stung Chinit South subproject, with assistance from the Wildlife Conservation Society (WCS). The SRP will provide farmers the opportunity to protect the habitat for the bird species in the International Union for the Conservation of Nature (IUCN) endangered list, while achieving a premium price for the rice product. This will be achieved by complying with sustainable production standards and outreach mechanisms that contribute to increasing the global supply of affordable rice, improved livelihoods for rice producers, and reduced environmental impact of rice production. 62. Canal 15 Subproject. This subproject located in Takeo Province will involve the following physical improvements:

(i) Rehabilitation of the 18-km Canal 15 main canal, which will take water from

the Angkor Borey River to supply the whole system of the Canal 15




Subproject by excavating the large amount of silt that has accumulated on the canal bed to a depth of about 2 m;

(ii) Rehabilitation of Canal 87 as a secondary canal system that will take water from Canal 15 by desilting the canal bed to a depth of about 1.5 meters; and

(iii) Modernization of the Samput pumping system, another secondary system of Canal 15, which will involve improving the intake channel of 1.9 km, upgrading the existing pumping station, and providing the canals with a total length of 21.33 km with concrete lining and associated drainage facilities.

63. Only one FWUC will be established for the Samput pumping system farmers.

2. Output 2: Water Resources Management Improved 64. Under this output, the project will: (i) install hydrometeorological (hydromet) stations to support WRM in upstream watersheds in Battambang and Kampong Cham provinces; (ii) train government staff and FWUCs on modern canal operation techniques, irrigation scheduling, water management, and O&M; (iii) establish a National Water Resources Data Management Center (NWRDMC) in MOWRAM, including a building equipped with data management facilities (database and server system, analytical system, dissemination facilities, doppler radar, etc.); (iv) develop a water resources information system (WRIS) using satellite-based information and ground observation to serve as a common platform for sharing water resources management data; (v) train MOWRAM and PDWRAM staff on water accounting and data management; and (vi) provide a program for scholarships, internships, training, and mentoring in WRM. More specifically, the project will support the following:

(i) Installation of hydromet stations in the watersheds for water resources monitoring (in collaboration with the ADB-funded FDRMMP and UIWRMSP);

(ii) Modernization of irrigation system operation, including preparation of a reservoir operation plan, pumping system operation manual, irrigation scheduling and water allocation agreement, water distribution, cropping plans, system maintenance plans, and irrigation service contribution agreement and collection;

(iii) Establishment of an ongoing pump and reservoir operator team to oversee O&M of the primary infrastructure in collaboration with the FWUCs, which may include a public-private partnership (PPP)-based set-up;

(iv) Establishment of self-reliant FWUCs to oversee the O&M of the irrigation schemes, including receiving a 95% ISF collection rate. Specific skills to be developed include O&M of canals and associated structures, irrigation scheduling, water management, and cropping planning in a climate change context;

(v) Involvement of FWUCs in subproject implementation and O&M, as required in the Sub-decree on the Procedures for the Establishment, Dissolution, Role and Duties of FWUCs issued by the Government of Cambodia on 12 March 2015;

(vi) Design of JOROP for Mongkol Borey and Kamping Pouy reservoirs; (vii) Construction of an NWRDMC building in MOWRAM equipped with data

management facilities (server system, desktop-based system, dissemination facilities, etc.) to be used for data collection, analysis, and dissemination;44

(viii) Development of a WRIS45 based on a modular decision support system (DSS) approach (database, modelling packages, user interfaces) that will

44 See Appendix 5 for a detailed description of the NWRDMC. 45

Details are also in Appendix 5..




incorporate climate, weather, and hydrology time series and remotely sensed data and allow for easy adoption to meet contemporary water resources management needs of Cambodia, such as water scarcity management and flood forecasting as associated end-user designed communication product;

(ix) Fit-for-purpose training programs designed and undertaken that meet different capacity development requirements for establishing, operating and maintaining the WRIS, including producing highly qualified MOWRAM managers and technical staff; and

(x) Provision of a number of scholarships46 for graduate studies leading to a Master in WRM degree or internships, training, or mentoring programs related to WRM in collaboration with other organizations, and 10 grantees attending short courses in the Asia region on WRM and related topics. The scholars, interns, mentees, and training grantees, after the completion of their programs, shall return to Cambodia and work for the NWRDMC as required by MOWRAM.

D. Implementation Arrangements

65. Project readiness activities. Project readiness activities and their expected completion dates are shown in Table 3.

Table 3: Project Readiness Activitiesa

Activities 2019 Responsible

party Apr May Jun Jul Aug Sep Oct Nov Advance contracting actions

a X X X X X X X X MOWRAM

ADB Board approval X ADB Loan and grant signing X ADB and

Government Provision of government legal opinion

X MEF

Government budget inclusion X MEF Loan and grant effectiveness X MEF ADB = Asian Development Bank, MEF = Ministry of Economy and Finance, MOWRAM = Ministry of Water Resources and Meteorology.

a Bidding documents for works and goods of Prek Po and Kamping Pouy subprojects will be launched in June 2019.

Source: Asian Development Bank

66. The overall project implementation plan is shown in Table 4.

46

See Appendix 6 for selection criteria for scholarships.



Table 4: Project Implementation Plan



ADB = Asian Development Bank, FWUC = farmer water user community, GAP = gender action plan, MOWRAM = Ministry of Water Resources and Meteorology, NWRDMC = National Water Resources Data Management Center, O&M = operation and maintenance, PDWRAM = Provincial Department of Water Resources and Meteorology, PPMS = project performance monitoring system, SPR = semi-annual progress report, WCS = Wildlife Conservation Society.

Notes: 1. Loan effectiveness will be in November 2019. 2. Construction works in the two core subprojects (Kamping Pouy and Prek Po) will be completed by the end of Q4 2021, after a 6-month defects liability period for the physical component of the project. Source: Asian Development Bank.



67. Project implementation organizations. MOWRAM will be the executing agency (EA) and its Department of Farmer Water User Communities (DFWUC) will be the implementing agency (IA). A PMU has been established in DFWUC before the commencement of the TRTA. The PMU is headed by the Under Secretary of State of MOWRAM as Project Director, with assistance from the DFWUC Director as Project Manager. The PMU was fully involved in the preparation of the project. During project implementation, the PMU will be composed of 26 personnel designated from MOWRAM, the Department of Hydrology and River Works (DHRW) of MOWRAM, and the PDWRAMs of Battambang, Kampong Cham, Kampong Thom, and Takeo provinces. MAFF will be represented by two staff members to coordinate the provision of agricultural support to the project beneficiaries, including access to quality seed and other agricultural inputs, as well as marketing of produce. The PDWRAMs will be responsible for coordinating all field activities with FWUCs and DFWUC, piloting IAMS activities, and implementing O&M activities. DHRW will coordinate the installation, operation, and data collection of the hydromet stations. The PMU will be supported by the project management and implementation consultant (PMIC). 68. A project steering committee (PSC) chaired by the Minister of MOWRAM and comprising senior officials from MOWRAM, MAFF, MOE, Ministry of Economy and Finance (MEF), and the Provincial Governor’s offices of Battambang, Kampong Cham, Kampong Thom, and Takeo provinces will oversee project implementation and provide policy guidance. Resettlement and land acquisition will be implemented by and under the management of the Inter-Ministerial Resettlement Committee (IRC) chaired by MEF with membership from the representatives of relevant line ministries in close cooperation with the Provincial Resettlement Sub-committees of the four participating provinces. 69. A matrix summarizing the management roles and responsibilities of project implementation organizations and the key persons involved in implementation, are provided in Appendix 7. The project organization structure is shown in Figure 3, and the PMU organization is in Figure 4. The list of PMU staff members and the brief TOR of PMU key positions and units are in Appendix 8.

Figure 3: Project Organization Structure



DFWUC = Department of Farmer Water User Community; EIA = environmental impact assessment; FWUC = farmer water user community; GDR = General Department of Resettlement; IAIP = Irrigated Agriculture Improvement Project; MAFF = Ministry of Agriculture, Forestry and Fisheries; MOE = Ministry of Environment; MOWRAM = Ministry of Water Resources and Meteorology; NWRDMC = National Water Resources Data Management Center; PDWRAM = Provincial Department of Water Resources and Meteorology; PMIC = project management and implementation consultant; PMU = project management unit; SRP = Sustainable Rice Platform; WCS = Wildlife Conservation Society. Source: MOWRAM.

Figure 4: PMU Organization Chart

E. Costs and Financing

70. The project is estimated to cost $123.1 million (Table 5). ADB will provide $120.8 million comprising: (i) a concessional loan of $117 million from ADB’s ordinary capital resources (OCR); (ii) a grant not exceeding $2.2 million from ADB’s Special Funds resources (Asian Development Fund [ADF]); and (iii) a grant not exceeding $1.6 million from the High Level Technology Fund. The ADB grant will finance disaster risk reduction (DRR) measures for the Stung Chinit South Subproject, and the High Level Technology Fund will cofinance consulting services for the data center and the WRIS. The government will finance the equivalent of $2.3 million, including in-cash contribution for land acquisition and resettlement, supplementary salary costs, and in-kind contribution in the form of tax exemptions for consulting services and goods sourced from overseas, applicable taxes and duties on items paid for by the government, counterpart staff, office accommodation, and facilities.

Table 5: Project Cost Estimates

Item Amount

($ million) % of Base Cost

A. Base Costs a, b

Stung Chinit Works 29.35 26.6% Non-Stung Chinit Works 62.09 56.3% Goods 6.83 6.2% Data Center Consultants 2.17 2.0% Other Consulting Services 6.49 5.9% Capacity Building 1.54 1.4% Incremental Operating Costs 1.56 1.4% Salary Supplements and Audit 0.27 0.2% Subtotal (A) 110.29 100.0% B. Contingencies Physical

c 6.43 5.8%

Price d 6.38 5.8%

Subtotal (B) 12.81 11.6% C. Financial Charges During Implementation

e - 0.0%

Total Project Costs (A+B+C) 123.10 111.6%

Project Director

Project Manager

Technical, Planning,

Monitoring and Evaluation and Reporting Unit

Financial Management Unit

Safeguard and Gender

Mainstreaming Unit

Provincial Level Administration

Unit

Staff (10) Staff (2) Staff (3) Staff (9) (in provinces)

Staff (3)

Procurement and Contract

Management Unit



Note: Figures may not sum precisely due to rounding. a Includes taxes and duties of $8.45 million for operating cost to be financed by ADB.

b Base costs in third quarter 2018 prices.

c Physical contingencies computed at 6% for civil works and 5% for other expenditure categories.

d Price contingencies are based on escalation rates for local currency and foreign exchange costs estimated for

Cambodia. Annual escalation rate for local currency costs is estimated at 3.5% for each year, while annual escalation rate for foreign exchange costs is estimated at 1.5% for each year.

e Loan terms include an interest rate of 1.0% per annum during an 8-year grace period and 1.5% per annum

thereafter, with no commitment fee. Source: ADB estimates.

71. Key assumptions. The following key assumptions underpin the cost estimates and financing plan:

(i) Cost estimates are based on 2018 prices. (ii) The contingencies comprise physical and price contingencies. Physical

contingencies are computed at 6% for civil works and 5% for other categories. (iii) Project payments will be made using the United States dollar currency.

Therefore, the international rate of price inflation has been applied to project costs. Price contingencies based on expected cumulative inflation over the implementation period are as follows:

Escalation Rates for Price Contingency Calculation

Item 2018 2019 2020 2021 2022 2023 2024 Average

Domestic rate of price inflation (KR costs) 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%

International rate of price inflation ($ costs) 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

Source: ADB estimates.

(iv) In-kind contributions were calculated as the exemptions for VAT or withholding tax for firms and NGOs under consulting services, and as exemptions for VAT and import duties for vehicles and other items sourced from overseas under the goods category.

72. The detailed cost estimates by financier, by output and by year, as well as key assumptions for costs and financing, are shown in Appendix 9. The allocation and withdrawal of grant loan proceeds are summarized in Table 6 below.

Table 6: Allocation and Withdrawal of Grant and Loan Proceeds

Source Expenditure Category Amount Allocated

($)

Percentage and Basis for Withdrawal from the Loan

Account

ADB Grant Stung Chinit South Works 2,200,000

6.6% of total expenditure claimed

Total 2,200,000

High Level Technology Fund (Grant)

Data Center Consultants 1,600,000

74.1% of total expenditure claimed*

Total 1,600,000

ADB Loan

Stung Chinit South Works 31,110,000

93.4% of total expenditure claimed

Non-Stung Chinit South Works

69,040,000

100% of total expenditure claimed

Data Center Consultants 560,000

25.9% of total expenditure claimed*

Other Consulting Services 6,480,000

100% of total expenditure claimed*

Goods, Capacity Building, Incremental Operating Costs

9,810,000

100% of total expenditure claimed*

Total 117,000,000

* Exclusive of tax exemptions



IV. DUE DILIGENCE

A. Technical Viability

73. Technical due diligence was carried out by the TRTA Consultant during the subproject feasibility studies, aided by topographical surveys and geotechnical investigations carried out by qualified local subcontractors. The design process also included extensive field visits and stakeholder consultations, as well as the conduct of socioeconomic surveys at the selected subproject sites. The feasibility studies provided the basis for the proposed layouts, design of system capacities, and hydraulic designs of structures, among others. Water balance studies were also undertaken by the TRTA hydrologists, which confirmed that water will be available and sufficient for the recommended cropping patterns to be adopted in the subproject areas. Future/planned cropping calendars were based on a review of the present cropping calendars in the subproject command areas and the potential improvement of planting schedules. Participatory processes were adopted in finalizing the designs, construction, and required O&M activities. Designs were checked against anticipated climate variations to ensure that system design capacities are adequate to mitigate against climate variability. Sound construction specifications and procedures for construction quality supervision will be needed to assure system functionality and long-lasting performance. B. Economic and Financial

74. The economic analysis of the four subprojects resulted in economic internal rates of return (EIRRs) of 24% for Kamping Pouy, 21.6% for Prek Po, 20% for Canal 15, and 22.8% for Stung Chinit South, all higher than the assumed 12% cutoff rate for economic viability (see Appendix 10 for subproject economic analyses). Sensitivity analysis conducted for Kamping Pouy showed that a 10% increase in costs or a 10% decline in economic paddy price will reduce EIRR to about 23%. Capital cost would need to more than double to reduce EIRR to 12%, and the economic farmgate price of paddy would need to fall by 48% to reduce EIRR to 12%. For Prek Po, sensitivity analysis undertaken in relation to capital cost gains and paddy price declines showed that a 10% increase in costs or a 10% decline in economic paddy price will reduce the EIRR to 18.9% and 18.2%, respectively. Capital cost would need to increase by 90% or paddy price to decline by 30% to reduce the EIRR to 12%. For Stung Chinit South and Canal 15, a 10% increase in the cost of annual O&M or major repairs or agricultural inputs will result in a negligible drop in EIRR to 22.7% and 19.8%, respectively, higher than the 12% cutoff rate. C. Governance

1. Financial Management

75. The financial management assessment report was conducted under the TRTA47 in May 2018 in accordance with the ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Diligence: A Methodology Note. The objective of the assessment was to determine whether MOWRAM, the designated EA, at central level and its DFWUC, the designated IA, have sufficient and suitable financial management systems to implement the project. The assessment focused on the country and public financial management systems, including accounting, budgeting, funds flow, financial reporting, auditing and internal control.

47

ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Grant for Subprogram 2, and Grant Assistance to the Kingdom of Cambodia for the Public Financial Management for Rural Development Program. Manila.



76. The financial management assessment concluded that the pre-mitigation financial management risk level for the project is moderate (see Appendix 11 for details). The general environment for public financial management (PFM) in MOWRAM is generally satisfactory and is, to a large extent, strengthened by standardized policies and guidelines, which are implemented for all externally financed projects and programs. MOWRAM has the capacity to administer the advance fund and implement statement of expenditure (SOE) procedures since it has previously worked with ADB and is currently implementing several ADB-funded projects. MOWRAM is also part of the government’s comprehensive Public Financial Management Reform Program, which is being supported by an ADB grant. 77. On the project level, issues have been identified with respect to planning and budgeting processes, accounting policies and procedures, funds flow mechanisms and disbursement procedures, and personnel capacity. The engagement of an international and a national Financial Management Specialist to provide technical assistance to PMU in the various aspects of financial management and build the capacity of designated finance staff will mitigate the identified risks. Overall, the project arrangements are considered satisfactory since MEF and MOWRAM have agreed to implement an action plan to address the deficiencies (Table 7).

Table 7: Financial Management Action Plan

Weakness Mitigation Action Responsibility Timeframe

Limited capacity of PMU staff in project financial management.

Although the PMU finance officer is gaining significant experience in project finance management (concurrently the finance officer of Loan 3289-CAM), he lacks familiarity with MEF’s FMM, and updated ADB loan disbursement procedures, and Peachtree/Sage.

Ensure the PMU finance staff are continually trained on budget preparation and execution, financial management and accounting, procurement, internal audit monitoring and evaluation under the PFMRDP,

a

which is supported by an ADB grant covering three ministries (including MOWRAM).

ADB; CARM; MEF; MOWRAM

Q1 2020 - Q4 2022

Assign a project accountant (trained in financial management, accounting, and Sage under PFMRDP) to assist the PMU finance officer and staff. Project accountant and cashier will be nominated from the Finance Department of MOWRAM.

MOWRAM December 2019

Project management and implementation consultants, including financial management consultants, to conduct training for PMU staff on project financial management, standard operating procedures and FMM, ADB’s Loan Disbursement Handbook; and provision of the project administration manual.

MOWRAM, PMU Q1 2020 - Q4 2022



Weakness Mitigation Action Responsibility Timeframe

Limited capacity of PMU staff to prepare FMRs. PMU staff do not have capacity to show financial information and physical progress in one report, as required in the FMM.

The current project accounting system is semi-manual with the limited use of Excel spreadsheets.

The accounting software still needs to be installed in the PMU finance unit to be established and the PMU staff trained in this.

Improve the system in project accounting to link the installed Sage software in the Finance Department with the project accounts and physical progress.

Procure an agreed software, that links project internal reporting activities with those at inter-department and -agency levels to reduce/eliminate budget/disbursement variances, to enhance the financial management system of PMU.

Conduct training for PMU on how to generate FMRs from the agreed project accounting and reporting software.

MOWRAM, Finance Department,

PMIC

Q1 2020

Q1 2020

Q1 2020

Capacity in internal audit is limited. IAD staff comprises many staff assigned from other MOWRAM departments since 2007 but without the necessary educational background and a few new young staff with accounting degrees but lacking experience in internal audit. In addition, the IAD claims it does not have enough equipment to perform their respective duties effectively and efficiently.

Collaborate with the PFMRDP to ensure capacity building of the internal audit department under the PFMRDP.

MOWRAM Q1 2020 - Q4 2022

Low quality of external audit, particularly the required project audit standards.

Coordinate with and make use of the terms of reference for auditors that are being strengthened by MEF.

Closely monitor contract performance of external auditors to ensure that auditing firms have assigned staff with qualification and experience as agreed in the contract.

MOWRAM; MEF Q2 2020

Q1 2020 – Q3 2024

ADB = Asian Development Bank, CARM = Cambodia Resident Mission, FMM = financial management manual, FMR = financial management report, IAD = Internal Audit Department, MEF = Ministry of Economy and Finance, MOWRAM = Ministry of Water Resources and Meteorology, PFMRDP = Public Financial Management for Rural Development Program, PMU = project management unit. a ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Grant for

Subprogram 2, and Grant Assistance to the Kingdom of Cambodia for the Public Financial Management for Rural Development Program. Manila.

Source: TRTA consultant.

2. Procurement

78. The overall risk rating for Project Procurement Risk Assessment is Low (see Appendix 12). MOWRAM procurement staff have adequate technical skills to undertake the procurement of goods, works, and consulting services. A systematic process to identify procurement requirements is in place. MOWRAM follows the procurement planning process, and it diligently tracks its contractual payment obligations. However, there is still a need for improvement in their follow-up mechanism and the timely release of payments to suppliers, contractors, and consultants. Hence, the engagement of international and national procurement specialists as part of the PMIC is recommended to support PMU in the timely and smooth implementation of procurement activities. The consultants will review the



detailed design, specifications, O&M requirements, bid document contractual conditions, and bid evaluation reports (BERs), including addressing ADB’s comments on relevant documents. The project procurement plan and packages are in Appendix 13, and the terms of reference of various consultants are in Appendix 14.

3. Risk Assessment and Risk Management Plan 79. Major risks and mitigating measures are summarized in Table 8 and described in detail in the risk assessment and management plan (RAMP) in Appendix 15.

Table 8: Risks and Mitigation Measures

Risks Mitigation Measures

The reluctance or unwillingness of FWUC members to participate in joint reservoir operations and water sharing arrangements could jeopardize the attainment of the project benefits in Kamping Pouy and other similar subprojects.

A joint reservoir operation (JOROP) protocol for Kamping Pouy has been prepared under the TRTA and could provide the basis for the development of a formal water sharing agreement on water sharing among concerned farmer water user groups and subgroups.

PMIC will provide technical advice and support to the PDWRAM in supervising JOROP implementation in the subproject.

Climate change could increase the demand for water, reduce crop yields during the dry season, and increase storm activity and flooding during the wet season.

The design of irrigation infrastructure has been climate-proofed based on available climate projections, and climate change adaptation measures will be adopted in the subprojects, e.g., use of early maturing rice varieties that will be harvested before the onset of the wet season and diversification into higher value crops that require less water during the dry season.

The limited institutional capacity in project management, especially at the provincial level, could pose governance risks and result in delays in project implementation.

The IAIP has been designed to be ‘implementation-ready,’ with detailed engineering design packages for two subprojects (including tender documents) ready for bidding after loan effectiveness.

An international PMIC (Firm) will be recruited by PMU, as an advance action, to ensure that PMU has the necessary technical and project management support to facilitate project implementation and minimize delays in the procurement of civil works contractors. PMIC staff will provide support to the PDWRAMs in the subproject areas in the various aspects of project management.

The project will provide extensive training to MOWRAM and PDWRAM staff in a wide range of subjects from system O&M, irrigation scheduling, JOROP, and other technical subjects to financial management and procurement.

The delayed release or lack of project counterpart funds could delay project implementation.

The loan agreement will record the government’s commitment to finance counterpart funds in a timely manner.

Budgetary constraints in counterpart funding will be addressed through timely applications for counterpart funding by PMU with the support of PMIC.



Risks Mitigation Measures

Works programs (site possession) shall not proceed until resettlement obligations have been fully implemented.

The lack of inter-agency coordination at the provincial level (e.g., between MOWRAM/ PDWRAM and MAFF/PDA) could derail project implementation.

PMU, with technical support from PMIC, will work closely with the PDWRAM and Provincial Department of Agriculture (PDA) in the planning and preparation of synchronized water distribution plans and cropping calendars for the subproject areas. These plans and cropping calendars will be reviewed at the end of the year and updated, as necessary, for dissemination to all FWUCs and water user groups/sub-groups at the secondary and tertiary levels of the command area.

JOROP = joint reservoir operation; MAFF = Ministry of Agriculture, Forestry, and Fisheries; MOWRAM = Ministry of Water Resources and Management; O&M = operation and maintenance; PDA = Provincial Department of Agriculture; PDWRAM = Provincial Department of Water Resources and Meteorology; PMIC = Project Management and Implementation Consultant; PMU = Project Management Unit

V. SAFEGUARDS

80. ADB safeguard classifications. All safeguard documents have been prepared in accordance with ADB’s SPS, 2009.48 In compliance with ADB’s information disclosure and consultation requirements, the safeguard documents will be disclosed on the ADB project website.49 The safeguard classifications are B for environment, B for involuntary resettlement, and C for indigenous peoples. Protection of biodiversity is a key issue for the Stung Chinit South Subproject, which is located adjacent to an Important Bird and Biodiversity Area (IBBA) that supports critically endangered bird species. MOWRAM is committed to implementing safeguard plans and adhering to ADB and the government’s safeguard policies. 81. Project safeguards grievance redress mechanism. ADB’s SPS requires that Government establish and maintain a grievance redress mechanism (GRM) to receive and facilitate resolution of affected peoples’ concerns about the project’s social and environmental performance. PMU will establish the project safeguards GRM, as detailed in the safeguard plans, within 60 days of the loan effectiveness date or before the implementation of land acquisition activities, whichever is earlier. The GRM comprises a set of clear procedures to receive, record, and address concerns or complaints raised about safeguard issues at village, commune, district, and provincial levels. GRM focal points from the PMU, contractor teams, and communes will be identified and disclosed at construction sites and camps and each affected commune. Affected persons will have the option of seeking redress through existing channels, such as the Grievance Redress Committee or through the project’s GRM entry points. The PMIC will report monthly on the GRM to the PMU. The PMU will monitor and report on GRM to ADB in the project’s quarterly progress reports (QPRs) and semi-annual safeguards monitoring reports. 82. Public consultation and information disclosure. The land acquisition and resettlement plan (LARP) will be disclosed on the ADB website before the staff review meeting (SRM). The draft environmental impact assessment (EIA), including environmental management plans (EMPs), will be disclosed on the ADB website 120 days before board approval. The EMPs and resettlement plans will be translated into the Khmer language and provided to the PMIC to be made available to interested stakeholders on request. The final

48

Available at: http://www.adb.org/documents/safeguard-policy-statement. 49

Public Communications Policy available at https://www.adb.org/sites/default/files/institutional-document/ 32904/files/ pcp-2011.pdf.

http://www.adb.org/documents/safeguard-policy-statement

https://www.adb.org/sites/default/files/institutional-document/%2032904/files/%20%20pcp-2011.pdf

https://www.adb.org/sites/default/files/institutional-document/%2032904/files/%20%20pcp-2011.pdf



EIA and LARP will be updated and disclosed following the DED. Semi-annual safeguard monitoring reports will be disclosed following review. Consultations with affected persons and key stakeholders were carried out during project preparation and will continue during implementation as described in the safeguard documents. A. Environment

83. Environmental reports and approvals. The project is classified as category A in accordance with ADB’s SPS (2009). Three subprojects (Kamping Pouy in Battambang Province, Prek Po in Kampong Cham Province, and Canal 15 in Takeo Province) were confirmed to be category B for environment, for which an initial environmental examination (IEE), which includes an EMP, was prepared.50 An EIA, which includes an EMP, was prepared for the Stung Chinit South Subproject in Kampong Thom Province. The Kamping Pouy and Prek Po subprojects have progressed through DED. However, the DED of Canal 15 and Stung Chinit South subprojects will be prepared during the initial phase of project implementation. Therefore, the IEE, EIA, and EMPs will be updated during DED. The EMPs will be included in the tender/bid documents. Baseline data and impact assessments are provided in the IEE, EIA, and social and poverty impact assessments. Khmer language summaries of the IEE and EIA have been provided to MOWRAM. MOWRAM will obtain subproject approvals from MOE prior to the mobilization of the civil works contractors. 84. Environmental benefits. The improvement of the project irrigation and drainage facilities will result in: (i) an increase in certainty and control of existing irrigation areas; (ii) expansion of reliable irrigation for multiple plantings in a year; (iii) longer cropping periods in areas previously unavailable for parts of the year due to flooding; and (iv) more robust infrastructure and practices against climate change and natural disasters. This will not only lead to increases in area and yield but also, through capacity building and training, a number of additional benefits, which will improve environmental conditions in the irrigated farming communes. This will include integrated pest management (IPM), efficient use of fertilizer, and water conservation farming practices. 85. In terms of sustainable areas sown as a result of increased irrigation, the project will increase potential growing areas by 4,000 ha in the dry season at Kamping Pouy; up to 7,620 ha in the wet season and 6,800 ha in the dry season at Prek Po; by 4,800 ha in the dry season at Stung Chinit South; and 1,500 ha in the early wet season at Canal 15. The beneficiaries of these changes will be the local farmers, with downstream effects for local commercial enterprises. Since rural populations are the poorest sectors of the Cambodian population, poverty alleviation effects will be direct. 86. IPM will promote a reduction in the amount of pesticides used, resulting in reduced movement of pesticide residues in surface water and reduced risk of leaching of residues into groundwater, and will include safeguards for farmers in the safe handling and use of chemicals. Fertilizer needs will be matched with soil nutrient levels and crop or water conditions to avoid overuse and leakage of nutrients into water resources. Training on farm water management to use water more efficiently will conserve seasonal water resources. 87. At the Prek Po subproject, a solid waste management (SWM) component has been designed for the project implementation phase to provide alternative collection and disposal arrangements to avoid the clogging the main canal intake canal. The component will provide direct support for existing disposal site improvements and expansion of collection and development of a community-based waste management and action plan for the local Prek Po authorities.

50 The IEE reports for the four subprojects are in Appendix 16.



88. The total carbon dioxide equivalent (tCO2e) of emissions generated by the combined four subprojects are low at 69,290 t/yr. The reconfiguration and modernization of main and secondary canals and the planning of tertiary canals in both subprojects to maximize water delivery to farm fields through gravity will reduce the use of small pumps (which accounts for 50% to 60% of the total greenhouse gas [GHG] generation) and will further reduce the GHG generation from this source. The replacement of inefficient diesel pumps at the Samput pumping station in the Canal 15 subproject with electric pumps will also result in significant GHG savings. 89. Key environmental impacts and risks. During construction, the main issues will be air and water pollution, noise and dust, and earthworks and spoil disposal - all of which must be managed by strict control by construction contractors and supervisors. Disruption to local livelihood activities is anticipated, and this will be minimized by work scheduling, site access, consultation, and safety planning. Mitigation of construction-phase impacts relies heavily on responsibility of works contractors to follow specified clauses and to effectively implement measures to minimize pollution of air and water and soil erosion. 90. Irrigation schemes must be sustainable and responsibly managed to ensure that agreed irrigation flows are maintained and other water users are not disadvantaged. The feasibility study reports for the subprojects have demonstrated that water for the planned levels of irrigated cropping is available and sustainable. The EMP requires clear and detailed water extraction plans for the cropping seasons, in line with the water use parameters established in the feasibility study reports, to be prepared as part of each scheme’s operating procedures and submitted before construction. 91. The Stung Chinit South subproject is located adjacent to the IBBA which includes the Tonle Sap Northern Lowland Protected Landscape. This is an area characterized by seasonally inundated grassland and is a breeding habitat of the Yellow-breasted Bunting, Bengal florican, and a number of other birds listed as critically endangered on the International Union for Conservation of Nature Red List. In order to better understand project risks to critical habitat, a specialist report was commissioned by the TRTA. The report found that local people have seen floricans within 1.5 km of the subproject boundary (see Appendix 17). Given this, a second survey for endangered birds with more extensive and systematic field survey and structured interviews was undertaken by the Wildlife Conservation Society (WCS). This survey confirmed presence of critical breeding habitat for Bengal floricans in the IBBA, just 1-2 km west of the command area (see Appendix 18). To enhance project agricultural outcomes and mitigate potential induced impacts on threatened birds, the WCS will be contracted to undertake a $920,000 sustainable rice cultivation program at Stung Chinit South during project implementation. The terms of reference for the program are included in the TORs of consultants in Appendix 14. 92. The project has developed a Biodiversity Action Plan (BAP). The WCS supported sustainable rice cultivation program will provide the core foundations of mitigation of both direct impacts and potential induced impacts on biodiversity, and the BAP describes and codifies this intervention and its ongoing goals. It is anticipated that this component, if implemented effectively, will result in a net biodiversity gain, through stabilization and increase in grassland habitat and bird numbers. The biodiversity gains are key performance indicators of the BAP and will be monitored as part of the EMP. 93. Civil works on secondary canals have been designed to stop short of the subproject boundary to ensure that they will not enable dry season cropping beyond the boundary. Management of the use of agricultural chemicals will be implemented through the project’s capacity building and farmer training components and Sustainable Rice Platform approaches. These are key performance indicators in the BAP which will be monitored as



part of the EMP. There will also be community-based disaster risk reduction measures implemented alongside each subproject. 94. Environmental management plan. Mitigation measures for identified impacts are included in the EMPs. The EMPs define mitigation measures; supervision, monitoring, and reporting requirements; public consultation and grievance redress procedures; institutional strengthening and capacity building. The EMPs include an environmental monitoring program (which integrates BAP key performance indicators for monitoring impacts on biodiversity at Stung Chinit South). The monitoring results will be used to evaluate the following: (i) extent and severity of actual environmental impacts against the predicted impacts; (ii) performance of the environmental protection measures and compliance with relevant Cambodian laws and regulations as well as internationally accepted standards as in the IEE, EIA and EMPs; (iii) trends of impacts; and (iv) overall effectiveness of the EMPs. The monitoring plan includes the evaluation of KPIs for the BAP and will be reported on separately. The finalized EMPs and the BAP for Stung Chinit South based on the DEDs and cleared by ADB will form part of the bidding documents. Adherence to the EMPs will reduce residual impact significance to acceptable levels. 95. Implementation of the EMP. MOWRAM, through its PMU, is responsible for overseeing the implementation of the EMPs. The capacity of the PMU to coordinate EMP implementation will be strengthened through the appointment of qualified staff and through training provided by PMIC. This will include an Environmental Management Officer (EMO) for the PMU. An international Environment Specialist and a national Environment Specialist will be part of the PMIC team to provide (i) training for PMU and contractors and (ii) technical support in EMP implementation. 96. The PMU will engage and work with the PMIC to ensure that the IEE, EIA and EMPs are updated based on the DEDs and the bidding documents include the EMP and detailed instructions to bidders on required impact mitigation and monitoring requirements. The PMU EMO, with close support of the PMIC, will be responsible for supervising EMP implementation, ensuring contractors' compliance with environmental management requirements, implementation of the monitoring program, and coordinating the GRM. PMU will submit quarterly project progress reports (which will integrate an appendix on SRP and biodiversity monitoring) and semi-annual environmental reports to ADB. 97. The contractors will be required to develop site environmental management plans (SEMPs) for each subproject site in accordance with the IEE, EIA, and EMPs and environment safeguards requirements. These shall be reviewed, cleared, and monitored by the PMIC construction supervision consultants and submitted to the PMU EMO for review. The contractors will be responsible for implementing the SEMPs during the construction phase of the subproject under the supervision of the PMU EMO and PMIC. Contractors will be required to assign an environmental health and safety officer responsible for SEMP implementation and supervision of occupational and community health and safety practices, as set out in the IEE, EIA, and EMPs. Each works contractor will submit monthly progress reports to PMU. These reports will include reporting on EMP compliance. 98. ADB will visit project sites and review project performance against the EMPs and legal agreements. ADB will review periodic environment monitoring reports submitted by the PMU. If any of the safeguard requirements that are covenanted in the legal agreements are found not to be satisfactorily met, ADB will require the PMU to develop and implement an appropriate corrective action plan agreed upon with ADB to rectify unsatisfactory safeguard compliance. ADB may also consider suspension, cancellation, or acceleration of maturity, specified in the legal agreements. If unanticipated environmental impacts become apparent during project implementation, ADB will require the PMU to (i) assess the significance of



such unanticipated impacts, (ii) evaluate the options available to address them, and (iii) update the IEE, EIA, and EMPs. B. Involuntary Resettlement

99. The Prek Po, Stung Chinit South, and Canal 15 subprojects will not require land acquisition and/or resettlement. However, for the Kamping Pouy subproject, construction activities will require permanent acquisition of a total of 340 square meters (m2) of residential land of five affected households with 22 persons, of which two affected households (12 persons) will have residential land partially affected and two affected households (seen persons) will have residential land fully affected (these two households will need to relocate), and one affected household (three persons) has only banana trees to be cut down during the construction phase. Subproject implementation will also impact 147 fruit trees, 34.8 m2 of houses of different types, 4 m2 of brick-made toilet, and 54 m2 of barbed-wire fences. At the project preparation stage, the project was classified as category B for involuntary resettlement. 100. A LARP has been prepared for the Kamping Pouy subproject, and draft resettlement due diligence reports (DDRs) have been prepared for the Prek Po, Stung Chinit South, and Canal 15 subprojects in accordance with the principles and requirements of ADB's SPS and the government's laws and regulations on LAR. The draft LARP and all the DDRs have been approved by the IRC and GDR and concurred by ADB. 101. GDR will update the draft LARP for the Kamping Pouy subproject following DED of the subproject and submit to ADB for approval and disclosure. Upon completion of compensation payment, GDR will prepare a LARP compliance report and submit to ADB for approval and disclosure. This report will serve as basis for ‘no objection” to start construction. 102. MOWRAM will ensure that no physical or economic displacement will occur until: (i) compensation at full replacement cost has been paid to each displaced person for project components or sections that are ready to be constructed; (ii) other entitlements listed in the land acquisition and resettlement plan have been provided to the displaced persons; and (iii) a comprehensive income and livelihood restoration program, supported by an adequate budget, is in place to help displaced persons improve or at least restore their incomes and livelihoods. 103. Relevant project-related information has been disclosed in Khmer language to all affected persons, local communities, and local authorities during project preparation through various individual and public consultations at the project preparation stage and will continue throughout project implementation. The draft resettlement DDR and the draft LARP have been disclosed on ADB and MOWRAM websites. 104. GDR is responsible for overseeing LARP implementation. PMU will ensure regular coordination of updated LARP implementation through designated safeguards focal staff and/or coordinator. The international and the national social safeguards and resettlement specialists from PMIC will provide technical support to MEF-GDR in updating and monitoring LARP implementation, as needed, and to PMU in internal monitoring of the updated LARP implementation and preparing the safeguards sections of the QPRs to describe the safeguards implementation/compliance status, including the GRM. 105. The Department of Internal Monitoring and Data Management of MEF-GDR will be responsible for internal monitoring of LARP implementation compliance and will submit semi-annual safeguard monitoring reports to ADB. These reports will describe the progress of



implementation of resettlement activities and any compliance issues and corrective actions if identified. These reports will closely follow the monitoring indicators agreed in the approved LARP. The cost of internal monitoring will be borne by MEF-GDR. 106. PMU will coordinate closely with IRC and the IRC Working Group on all matters concerning involuntary resettlement. It will work closely with the MEF-GDR to update and implement the updated LARP. As part of such coordination, PMU will ensure the DEDs for all the subprojects are shared with GDR, at the latest, with two weeks from their finalization, demarcation on the ground is conducted, and request GDR to initiate the update of the LARP. 107. The IRC, technically supported by the MEF-GDR, is tasked to approve the allocation and release the resettlement budget as part of government’s counterpart contributions. IRC shall ensure that funds for resettlement are judiciously spent and that the updated LARP is implemented as planned. C. Indigenous Peoples (IP)

108. The due diligence, including social impact assessment, conducted at the project preparation stage found that the project will not directly or indirectly affect the dignity, human rights, livelihood systems, or culture of indigenous peoples or other ethnic minorities within the project area of impact. It will also not affect the territories of natural or cultural resources that IP own, use, occupy or claim as their ancestral domain. Therefore, the project is assigned category C for IP at the project preparation stage. 109. There are 256 households (996 persons) and 1,022 households (3,933 persons) of ethnic Cham in the larger command areas of the Canal 15 and Stung Chinit South subprojects, respectively. DDRs have been prepared for the Canal 15 and Stung Chinit South subprojects in accordance with the requirements of ADB’s SPS (2009) to confirm that it does not impact indigenous peoples or ethnic minorities. 110. Results of the due diligence showed that the Cham ethnic group is well mainstreamed in the society within the subproject areas, speak Khmer in addition to their own language, and are represented at commune, district, and province levels. The Cham in the subproject command area use Khmer language when communicating outside their home and use Cham language at home and when praying without any restriction and enjoy similar rights according to the laws as the mainstream Khmer. The local Cham have representatives in the communal, district, and provincial councils and secretary of the government. In Canal 15, the Cham ethnic group in the command area use the Canal 15 mainly for transportation similar to the other locals. The canal is not the fishing area of Cham. Canal improvements will be done section by section, while the width of the canal is large enough to avoid any disturbance to transportation, as needed. The subproject secondary canals and the pumping station also do not affect any indigenous peoples or ethnic minorities. 111. For the Stung Chinit South scheme, the subproject implementation will not cause any impact on indigenous peoples or ethnic minorities in the command area. The villagers have not been using water from the subproject canal since 2012. They have been cultivating one season per year and practicing rainfed agriculture. Therefore, blocking water in the canal, section by section during the construction phase, will not cause any negative impact on local farming, nor will it impact livelihoods. 112. During the DED of these two subprojects, the DDRs will be verified, and IP will be confirmed by the EA, and an updated report submitted to ADB as needed. The project will not finance any subproject or component that will trigger impact on IP.



D. Climate Change and Disaster Risk Reduction and Disaster Management

113. Climate and disaster risk. The TRTA prepared a Climate and Disaster Risk Assessment for the project. The project’s climate risk without mitigation is classified as medium. Key climate risks include increased precipitation intensity and variability and associated flood risk as well as increased drought risk. The project’s civil works have been designed for resilience against projected climate change, based upon increased hydraulic capacity of major canals for drought storage and dedicated land drainage channels to remove flood waters. These will be supported in all subprojects by training and capacity building in water conservancy and climate resilient farming practices. Disaster risk for the subprojects is primarily from peak floods, with droughts the next most threatening hazard. DRR activities within the project focus on civil works to reduce the risk of extreme events and capacity building to increase disaster preparedness at the commune and village levels. The estimated incremental cost of climate change adaptation measures for the project is $6.94 million. The estimated cost of DRR for the project is $5.66 million. 114. The major disasters directly addressed by the project are extreme floods and droughts, although resilience against the full range of potential disasters, including typhoons and epidemics, will be a benefit of the project’s capacity building in disaster management. 115. Civil works. In the Prek Po subproject, drought is targeted by the design of the pumping station, which will be able to draw water from extremely low levels of the Mekong (at levels lower than one in 10 years drought). Both flood and drought are targeted by the project’s hydromet stations repair, rehabilitation and training, since these stations will be able to provide early warning of these disasters as they develop. 116. At Kamping Pouy, the full extent of the increase of drainage capacity of drainage canals and infrastructure is a response to the likelihood of extreme floods from future increased rainfall intensity. Strengthening the reservoir weir wall at the Kamping Pouy reservoir has the dual purposes of water security (prevent water loss through leaks) and weir safety (strengthen weir against failure). The weir civil works, therefore, address flood (weir failure) and drought (loss of water). 117. Civil works at the Canal 15 subproject will significantly increase the depth of main and secondary canals. This will ensure more water is retained in the canals for the normal dry season, but the increased depth will also act to delay the onset of flood and marginally reduce extreme flood peaks. At Stung Chinit South, repair and strengthening of the Stung Chinit Reservoir weir and/or spillway will ensure water security (prevent water loss through leaks) and, more importantly, will ensure weir safety (strengthening weir against failure), since the weir in its current condition will ultimately fail. The civil works at the weir/spillway, therefore, address flood catastrophe (weir failure) and drought (loss of water). 118. Capacity building. In all subproject areas, training of commune councils and village leaders in DRR and disaster management will be contracted by the project. It will comprise: (i) commune and village level training and participatory assessment and analysis of disaster risk; and (ii) commune and village level training and participatory exercises in disaster management planning. The training will continue the commune-level training in disaster risk already carried out by National Committee for Disaster Management Secretariat teams under the ongoing Community-Based Disaster Risk Reduction grant project. 119. At Stung Chinit South, the promotion and establishment of SRP will develop a cohesive and resilient farming community with higher incomes. This will increase communities’ disaster preparedness and ability to get through a range of disasters and restore livelihoods.



VI. GENDER AND SOCIAL DIMENSIONS

120. During project preparation, a gender assessment was conducted in all the subproject areas to determine gender-related constraints and opportunities. This served as the basis for the preparation of the gender section in the summary poverty reduction and social strategy (SPRSS) (Appendix 19) and the gender action plan (GAP), which includes actions and targets to ensure that women participate and fully benefit from the opportunities provided through the project (see Appendix 20).

121. In all core subproject communities, gender conditions and relations are largely similar. The population density in the command areas is high compared with provincial averages. The majority of the population is Khmer, although there are several predominantly Cham communities in the Stung Chinit South and Canal 15 command areas. An average household includes 4.5–5.0 persons, and the proportion of female-headed households is 50%–75% lower than the national average (27%). Between 2004 and 2012, poverty levels declined at least 10% and as much as 40% in core subproject communes. However, as many as 25% of households are poor, with 38%–48% considered extreme poor. Net enrolment in primary education is high in most command areas (70%–80%), except in the Prek Po Subproject (65%); enrolment in lower secondary school drops significantly to 30%–40%. Throughout basic education, however, the gender gap has been nearly eliminated or reversed. This is reflected in literacy rates that are high for both women (93%–97%) and men (95%–99%).

122. In subproject communes, the average irrigated landholding is 1.5–3.0 ha; most households own their land. However, 40–60% of households are land-poor or landless. Women are active in all stages of rice cultivation, principally assisting their husbands, and are responsible for record-keeping of costs and revenues. Farming is the primary income source of 80% of households. Secondary income sources include raising livestock, income from rental properties, and fishing in Cham communities. National and international labor migration occurs in all subproject communities, involving 20%–30% of adult men and 15%–25% of adult women.

123. Women and men consulted in the core subproject communities agreed that women spend more time on activities related to family and household matters. Outside the home, the participation of women and men in community organizations is low. Women accountfor 17% of commune councilors, on average. In FWUCs where membership is open to women and men, women comprise less than 10% of members and less than 5% of elected members of management committees. Women in management committees are normally designated as FWUC accountants. Low women’s participation is largely due to deeply entrenched social and cultural norms and views that women are weak and passive, and their opinions as less important than those of men.

124. Women and men agree that improved irrigation facilities will enable households to grow additional rice crops and that they are interested in paid work during project implementation. For women, the benefits of increased income from increased yields are greater time for their family responsibilities and more money for children’s education, family health care, and upgraded housing. Women support initiatives to strengthen FWUCs, but they feel very strongly that married women with child care responsibilities do not have the time or family support to participate actively in local government or community activities, including FWUCs. Women and men are very clear about their priorities for training under the project: (i) management and leadership skills (and, for women, confidence-building) and accounting and financial literacy (to support women as FWUC accountants) that will support people’s economic activities as well as FWUC development; and (ii) adaptive and resilient technologies for agriculture and water resource management.



125. At the national and provincial levels within MOWRAM, women represent less than 10% of MOWRAM staff and senior management. MOWRAM has endorsed a gender mainstreaming action plan, yet it has not resulted in significant increases in staff knowledge or practices to adopt gender-responsive approaches to the development of irrigation infrastructure and the establishment of FWUCs. Representatives of MOWRAM cite the lack of financial and other resources to implement actions identified in the gender mainstreaming action plan, including training and establishment of system to collect and track sex disaggregated data.

126. The GAP identifies gender-responsive actions in relation to the two key outputs of the project. For the first output, these are: (i) strengthening women’s voice in project implementation; (ii) strengthening and increasing women’s participation (at least 30%) and leadership (at least 25%) roles in FWUCs; and (iii) promoting women’s opportunities for paid work (25% women hired for unskilled labor in civil works). For the second output, gender actions include: (i) increasing women’s participation in trainings and capacity development in FWUC management and climate-smart agriculture (40% women participants); and (ii) assistance to MOWRAM in GAP implementation. In addition, skills-building sessions for FWUC members will be offered in each command area, including negotiation skills, accounting, members’ rights and responsibilities, and conflict resolution strategies. Key GAP indicators are also reflected in the project Design and Monitoring Framework (DMF). MOWRAM will track sex disaggregated information in its database and will be in charge of monitoring the GAP through the gender focal point in PMU with the assistance of gender specialists in the PMIC team.

127. The project will implement the GAP to address gender issues, such as low participation of women in water resources management, low participation of women in decision-making in the FWUC, lack of leadership and communication skills, low participation of women in FWUC activities, and lack of skills to participate in construction activities. The project will directly benefit women, who comprise 51% of the total commune population.

128. GAP implementation arrangements. The responsibility for implementing the GAP lies with PMU, with support from PMIC. The TORs of the PMIC team leader, deputy team leader, and M&E consultants will include relevant gender aspects related to their scope of work. An international gender consultant will be recruited for 4 p-m (intermittent) and a national gender consultant will be recruited for 25 p-m (intermittent), and will be responsible for guiding the implementation, monitoring, and reporting on the GAP throughout the project period. The individual gender consultant’s work plans should be aligned with the key milestones of the project outputs/activities related to the GAP. The PMU will support the national gender consultant needs to ensure that gender awareness and GAP implementation training is provided for all staff. The national gender consultant will need to ensure that gender-related substantive content is integrated into capacity development activities and communication strategies of the project, whenever appropriate. Gender-related indicators will be included in the project M&E system, and data disaggregated by sex and age and other relevant factors will be included in project progress reports. An update or report on the progress of GAP implementation will be provided to ADB on a biannual basis. Adequate resources (human and financial) have been allocated to implement, monitor, and report on the GAP.



VII. PERFORMANCE MONITORING AND EVALUATION, REPORTING, AND COMMUNICATION

A. Monitoring

129. Project performance monitoring. A preliminary project performance monitoring system (PPMS) has been developed based on the key indicators and targets outlined in the project DMF. It shall be established after the IA has developed comprehensive PPMS procedures and plans in accordance with ADB's Project Performance Monitoring System Handbook within six months of loan effectiveness with the support of PMIC. The PPMS procedures, performance indicators, and their targets will be reviewed and approved by ADB. Benchmark review mainly focusing on secondary data will be conducted. With the help of PMIC, the implementing agency will then undertake quantitative and qualitative project performance monitoring for each project component every six months to evaluate the delivery of planned facilities and the project benefits that have accrued.

130. Compliance monitoring. A number of assurances have been given by the government to ensure smooth implementation of the project. Those are subject to the Loan covenants (Loan Agreement, Schedule 5). ADB will monitor compliance with those covenants during project implementation through regular review missions, QPRs submitted by PMU, and review of project accounts and procurement procedures.

131. EMP compliance verification and reporting. EMP and SEMP compliance monitoring will be undertaken by MOWRAM, through the PMU and with support of PMIC. PMU will report the environmental performance of the contactors and environmental compliance through the project’s QPRs and semi-annual environment monitoring reports. For this project, environmental and social safeguards reporting will be done separately. The reports should include the results of periodic environmental quality/effects monitoring and identify any environment-related implementation issues and necessary corrective actions. The operation and performance of the project GRM, environmental institutional strengthening and training, and compliance with all covenants under the project will also be included in the report. WCS will prepare a quarterly monitoring reports on progress in the implementation of BAP and SRP for Stung Chinit South, which will be an appendix of the main project QPR.

132. Social safeguards monitoring. The LARP includes the detailed monitoring and reporting requirements for IR. No external monitoring of involuntary resettlement is required by this project. Primary responsibility for internal monitoring lies with PMU, which will be responsible for overseeing the formation, function, and activities of the IA and, through semi-annual monitoring reports, summarize the progress and compliance issues. MEF-GDR, as the technical arm of the IRC, will also assume the role of internal monitor on behalf of PMU and IRC, monitoring the implementation ofthe LARP, ensuring that this is carried out in compliance with the project resettlement policy outlined in the approved updated LARP for the subproject and in compliance with the loan covenants/project agreements. All monitoring data on the LARP will be collected to ensure sex disaggregation. The PMIC’ international and national social safeguards and resettlement specialists will support PMU and MEF-GDR to establish a system to implement the internal monitoring plan and accompany the PMU and MEF-GDR in carrying out internal monitoring to assess whether the approved updated LARP is implemented properly and if the involuntary resettlement objectives set out in the agreed LARP are achieved.

133. GAP monitoring. Regular monitoring of gender-related indicators contained in the DMF and the GAP will be done during project implementation. The PPMS will ensure that data disaggregated by sex is collected, analyzed, and reported on, wherever relevant, and



will allow the monitoring of women’s participation in all project capacity-building and construction activities, training events, and meetings. GAP progress reports will be submitted to ADB at least on a semi-annual basis using the GAP progress monitoring template. Participatory monitoring of project impact will be implemented at the midterm of the project, and this will include focus group discussions and interviews with female members and commune members who are not part of the FWUCs, construction workers, and community members to obtain quantitative and qualitative data. Qualitative data on women’s empowerment and the expansion of their roles in FWUCs, such as positive changes and removal of constraints affecting their participation in FWUCs, will also be collected. B. Evaluation

134. The IA, with PMIC support, will provide semi-annual updates on project performance through the PPMS. The status of achievement of performance targets or indicators of the project’s outcome and output will be provided in the semi-annual updates. ADB review missions will review the PPMS semi-annually to evaluate the project’s performance and the likelihood of delivering the desired outputs and achieving the envisaged outcome. Corrective actions will be agreed with the executing agency or implementing agency and recorded in the aide memoires or MOUs and subsequently monitored by ADB and the executing agency.

C. Reporting

135. The EA will provide ADB with: (i) QPRs in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's/performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, (d) updated implementation plan for next 12 months, and (e) safeguards monitoring reports; and (iii) a project completion report within six months of physical completion of the project. To ensure that the subprojects continue to be both viable and sustainable, project accounts and the EA’s annual financial statements, together with the associated auditor's report, should be adequately reviewed. WCS will submit quarterly external monitoring reports on the implementation progress of BAP and SRP for Stung Chinit South and submit directly to ADB. D. Stakeholder Communication Strategy

136. The main stakeholders of the project are categorized into government, beneficiaries, and affected persons or groups, civil society organizations (CSOs) and NGOs, the private sector, and DPs. These stakeholders will be targeted for different communication activities, which will involve the following direct and indirect communication strategies:

(i) Full access to all project information will be provided to government key stakeholders through multiple communication channels (QPRs, PPMS, external monitoring reports on safeguards, and ADB mission aide memoires) to ensure they understand the project, its importance and the stakeholders’ responsibilities, and guarantee their participation in project planning and implementation.

(ii) MAFF will directly participate in the water accounting plus (WA+) training and agriculture support activities, while MOE will be working closely with NGOs (i.e., WCS) in the implementation of conservation activities.

(iii) MOWRAM, PDWRAM, and ADB will conduct regular consultations with FWUCs, beneficiaries, and affected persons/groups, such as FWUC farmers and other water users, to ensure that they are informed about the relevance of the project and are updated on project developments (e.g., project



planning, design implementation, and expected contributions). (iv) Multiple communication channels will also be utilized to ensure that project-

affected persons and other stakeholders receive adequate advance notice of discussions and meetings.

(v) MOWRAM, PDWRAM, MOE, and ADB will also conduct consultations with FWUCs and beneficiaries on project plans, conservation activities, and impact of the project on target groups in collaboration with CSOs and WCS.

(vi) Project implementation agencies will designate focal persons responsible for updating the MOWRAM website, which will provide the latest information that will guide stakeholders, participants, and partners in the implementation of the project.

(vii) Multiple communication channels will be utilized to: (a) inform private sector on procurement of contracts; and (b) ensure that project-affected persons, other stakeholders, and international development partners receive adequate information on project progress and performance.

137. The stakeholder communication strategies are summarized in Table 9 below.

Table 9: Stakeholder Communication Strategy

Stakeholders Information Required Who will Provide Strategy/Means

Government key stakeholders MOWRAM, PDWRAMs FWUC Department PMU MEF MAFF MOE

Full access to all information on all aspects of project planning and implementation

PMU, ADB QPRs, PPMS, external monitoring reports on safeguards, ADB website, ADB mission aide memoires

Beneficiaries and project affected persons/groups Female and male farmers FWUCs Other water users (private

companies, domestic water supply)

Information on project planning, design, implementation, and expected contributions

MOWRAM, PDWRAMs, ADB

Consultations with FWUCs and beneficiaries, QPRs, PPMS, external monitoring reports on safeguards, ADB website, ADB mission aide memoires

CSOs and NGOs Project plans and activities and impact on target groups

MOWRAM, PDWRAMs, ADB

Consultations with FWUCs and beneficiaries, QPRs, PPMS, External monitoring reports of safeguards, ADB website, ADB mission aid memoirs

Private sector Construction companies

Procurement of contracts PMU MOWRAM website

International Development Partners

Project progress and performance

MOWRAM, PMIC, MEF

MOWRAM website, QPRs, PPMS

ADB = Asian Development Bank, CSO = civil society organization, FWUC = farmer water user community, MAFF = Ministry of Agriculture, Forestry and Fisheries, MEF = Ministry of Economy and Finance, MOE = Ministry of Environment, MOWRAM = Ministry of Water Resources and Meteorology, NGO = nongovernment organization, PDWRAM = Provincial Department of Water Resources and Meteorology, PMIC = Project Management and Implementation Consultant, PMU = project management unit, PPMS = project performance monitoring system, QPRs = quarterly progress reports. Source: TRTA consultants.

Documents

Technical Assistance Consultant’s Report...BCM billion cubic meter ... 1. The Asian Development Bank (ADB) approved a Transaction Technical Assistance (TRTA) Grant (TA 9349-CAM)