World Bank Documentdocuments.worldbank.org/curated/en/104911468770713531/pdf/mul… · CAP Compliance Action Plan CUA Collector Users Association DAS Drainage Advisory Service DRI

Document ofThe World Bank

Report No: 20443-EGT

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$50.0 MILLION EQUIVALENT

TO THE

ARAB REPUBLIC OF EGYPT

FOR A

SECOND NATIONAL DRAINAGE PROJECT

May 15, 2000

Rural Development, Water and Environment GroupMiddle East & North Africa Region

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CURRENCY EQUIVALENTS(Exchange Rate As of end February 2000)

Currency Unit Egyptian PoundLE 1.0 USS0.29USs 1.0 = LE 3.40LE = 100 Piasters (PT)

GOVERNMENT OF THE ARAB REPUBLIC OF EGYPTFISCAL YEARJuly I - June 30

WEIGHTS AND MEASURES

Egvptian and/or Metric Unit English/US Unit

I feddan (fd) = 1.038 acres(ac)I feddan (fd) = 0.420 hectaresI hectare (ha) = 2.380 feddan (fd)I kilometer (km) = 0.621 rmiles (mi)I meter (m) = 3.281 feet (ft)I metric ton (mt) = 0.984 long ton (ton)

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance StrategyCAP Compliance Action PlanCUA Collector Users AssociationDAS Drainage Advisory ServiceDRI Drainage Research InstituteDUA Drainage Users AssociationECRI Environmental and Climatic Research InstituteEEAA Egyptian Environmental Affairs AgencyEIA Environmental Impact AssessmentEMP Environmental Management PlanEPADP Egyptian Public Authority for Drainage ProjectsERR Economic Rate of ReturnEU European UnionFAO Food and Agriculture Organization of the United NationsFARAH Financial, Accounting, Reporting and Auditing HandbookFMS Financial Management SystemFMPM Financial Management Procedures ManualGD General DirectorateGDAFA General Directorate of Administrative and Finance AffairsGIS Geographic Information SystemGDP Gross Domestic ProductGOE Government of EgyptIAS Irrigation Advisory ServicesIBRD International Bank for Reconstruction and DevelopmentllP Irrigation Improvement Project[CB International Competitive BiddingINTESP The Netherlands-funded Institutional and Technical Support ProgramIS Intemational ShoppingIUA Irrigation Users Associations

Vice President Jean-Louis SarbibCountry Director Khalid IkramSector Director Doris KoehnTask Team Leader Nejdet Al-SalihiCo-Task Team Leader Tijan Sailah

ABBREVIATIONS AND ACRONYNIS (cont'd)

KfW Kreditanstalt fir Wiederautbau (German Bank for International Development Financing)LIB Limited International BiddingMADWQ The Monitoring and Analysis of Drainage Water Quality ProjectM&E Monitoring and EvaluationMED The Mechanical and Electrical Department of MWRIMIS Management Information SystemCMRI Channel Maintenance Research Institute of the MWRIMOIC Ministry of International CooperationMWRI The Ministry of Water Resources and IrrigationNAWQAM Canadian-funded National Water Quality and Availability Management ProjectNCB National Competitive BiddingNDP National Drainage ProjectNGO Non-Governmental OrganizationNPV Net Present ValueNS National ShoppingO&M Operations and MaintenancePEGD Planning and Evaluation General DirectoratePIP Project Implementation PlanPMT Project Management TeamPMR Project Management ReportPVC Polyvinyl ChlorideRIGW The Research Institute for GroundwaterSADAS Sector Affairs and Drainage Advisory ServiceSOEs Statement of ExpendituresTA Technical AssistanceUSAID United States Agency for International DevelopmentUSEPA United States Environmental Protection AgencyWRC Water Research CenterWUA Water Users Association

Arab Republic of Egypt

The Second National Drainage Project

CONTENTSPage No.

A. Project Development Objectives ................................................................. 2

1. Project development objective ................................................................. 22. Key performance indicators ................................................................. 2

B. Strategic Context ................................................................. 2

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project .........22. Main sector issues and Govemment strategy .................................................................33. Sector issues to be addressed by the project and strategic choices .................................3

C. Project Description Summary ................................................................. 5

1. Project components ................................................................. 52. Key policy and institutional reforms supported by the project .......................................53. Benefits and target population ................... .............................................. 74. Institutional and implementation arrangements ..............................................................7

D. Project Rationale ................................................................ 10

1. Project altematives considered and reasons for rejection ............................................. 102. Major related projects financed by the Bank and/or other development agencies ....... 103. Lessons learned and reflected in the project design ...................................................... 104. Indications of borrower commitment and ownership ............................... .................... 115. Value added of Bank support in this project ................................................................ 11

E. Summary Project Analysis ................................................................ 12

1. Economic ................................................................ 122. Financial ................................................................ 123. Technical ................................................................ 134. Institutional ................................................................ 135. Social ................................................................ 146. Environmental Assessment ................................................................ 157. Participatory approach ................................................................ 16

F. Sustainability and Risks ................................... 17

1. Sustainability ............................ 172. Critical Risks ............................ 173. Possible Controversial Aspects ............................ 18

G. Main Loan Conditions ......................... 18

1. Effectiveness Conditions ......................... 182. Other ......................... 18

H. Readiness for Implementation ......................... 18

I. Compliance with Bank Policies........................................................... 19

ANNEXES

Annex 1 Project Design SummaryAnnex 2 Project DescriptionAnnex 3 Estimated Project CostsAnnex 4 Economic AnalysisAnnex 5 Financial AnalysisAnnex 6 Procurement and Disbursement Arrangements

Table A Procurement MethodsTable B Prior Review ThresholdsTable C Project Costs by Procurement Arrangements

Table 1 Tentative Tendering and Disbursement Schedule for Contractsto be financed by the World Bank

Table 2 Tentative Tendering and Disbursement Schedule for Contractsto be financed by the EIB

Table 3 Tentative Tendering and Disbursement Schedule for Contractsto be financed by the KfW

Table 4 Tentative Financial Arrangements and Disbursement Categories (All amountsin '000 US$)

Annex 7 Institutional AspectsAnnex 7A Sunmmary of Social AssessmentAnnex 8 Environmental Management PlanAnnex 9 Project Processing Budget and ScheduleAnnex 10 Documents in Project FileAnnex 11 Statement of Loans and CreditsAnnex 12 Country at a Glance

MAPS: IBRD Nos. 30870 and 30871

Arab Republic of Egypt

Second National Drainage Project

Project Appraisal Document

Middle East and North Africa Regional OfficeRural Development Water and Environment Department

Date: May 15, 2000 Team Leader : Nejdet Al-SalihiCountry Manager/Director: Khalid Ikram Sector Manager: Salah DarghouthProject ID: EG-PE-45499 Sector Director : Doris KoehnLending Instrument: SIL Sector Theme(s) : Rural Development

Poverty Targeted Intervention: [ ] Yes [X] NoProject Financing Data

[X] Loan [ ] Credit [ Grant [] Guarantee [] Other [Specify]For Loans/Credits/Others:Amount (US$m): US$50.0Proposed terms: [] To be defined [ Multicurrency [x] Single currency

[] Standard Variable [ Fixed [x] LIBOR-basedGrace period (years): 5 yearsYears to maturity: 20 yearsCommitment fee: 0.75%Service charge: %Front-end fee on Bank loan: 1.0%

finacig plait (US$mn):

Government 134.8 0.0 134.8KfW (Germany) 0.4 39.6 40.0EIB 0.0 50.0 50.0Netherlands 0.6 3.0 3.6IBRD 0.0 50.0 50.0Total 135.8 142.6 278.4

Borrower: The Arab Republic of EgyptGuarantor: N/AResponsible agency: The Egyptian Public Authority for Drainage Projects (EPADP) of the Ministry of Water Resourcesand Irrigation (MWRI).Estimated disbursements (Bank FY/US$M):

-F: - 01 2002 2003 2004EAnnual 3.0 9.0 10.0 10.0 8.0 6.0 4.0

Cumulative 3.0 12.0 22.0 32.0 40.0 46.0 50.0

Project implementation period: 6 yearsExpected effectiveness date: January 1, 2001 Expected closing date: June 30, 2007Implementing agency: The Egyptian Public Authority for Drainage Projects (EPADP)

Contact person: Eng. Mohammed Fathi A. Hassan, ChairnanAddress: 13 Giza Street, Giza P.O. Box 12211, Egypt

Tel: 20-2-573-8039 Fax: 20-2-573-8647 E-mail: cpadp Lcoidsc.gov.egp:\egypt\re\45499\BOARD\PADBOARDMAY152000.doc

A: Project Development Objectives

1. Project development objective: (see Annex 1)

The proposed project would be the second time slice of the Government's National DrainageProgram of which the first phase (consisting of about 0.7 million feddans of subsurface drainage) iscurrently being completed under the World Bank-financed National Drainage Project (Ln. No. 3417/Cr.No. 2313-EGT) with cofinancing from KfW (Germany) and the Netherlands. The project's mainobjectives are to: (i) increase the agricultural productivity of about 0.8 million feddan of irrigated land(Ref. project maps 30870 and 30871) by improving drainage conditions through evacuation of excessirrigation water with subsurface drains into existing open drains; and (ii) avoid yield and productionlosses on this land, which would result if waterlogging and soil salinity problems were to persist. Otherproject objectives include building capacity in the Egyptian Public Authority for Drainage Projects(EPADP) through institutional support, technical assistance and training activities provided underbilateral donors' assistance. In addition, the project would assist in identifying and addressing theenvironmental issues resulting from the discharge of untreated raw industrial and domestic waste into afew open drains in the project areas.

2. Key performance indicators

Details of key performance indicators are in Annex 1. The key performance indicators showing theachievement of project objectives would be measured by: (i) preventing yield losses of crops (dependingon their tolerance for waterlogging and salinity) ranging from 7% for sorghum to 20% for cotton andcitrus; (ii) improvement in soil quality through reduced salinity to below 4 mmnhos/cm; (iii) lowering andmaintaining the water level on farmer's fields to no higher than 1 .0 m below ground; and (iv) improvingcapacities in EPADP in terms of number of staff trained and technical assistance provided.

B: Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex1)

Document number: Report No. 16533-EGT Date of latest CAS discussion: May 7, 1997

The project will support the CAS objective of raising rural incomes through diversified agriculturalproduction based on efficient and environmentally sustainable use of land and water resources. Thestrategy is to invest in agriculture with emphasis on irrigation and drainage infrastructure as principalvehicles for encouraging sustainable rural development, reducing rural poverty and ensuring the well-being of the rural population. These investments are important because the Agricultural Sector accountsfor 36% of total national employment and is the basis of the rural economy. The project will also supportthe CAS objective of developing human resources through the provision of training and technicalassistance to EPADP.

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2. Main sector issues and Government strategy:

The main sector issues are: The Government strategy to address these issues can besummarized as follows:

(a) The need to increase the efficiency in the utilization (a) Government's strategy is to move towards totalof the country's limited water resources and arable land coverage of all irrigated lands with subsurface drainageto ensure a sustainable irrigation and drainage based and to rehabilitate old and malfunctioning drains andagricultural system. pumping stations to prevent water logging and soil

salinization and to improve water use efficiency.

(b) Relatively low rural incomes (arising from small farm (b) Government's strategy has been to invest more insizes averaging two feddans combined with a large rural development, particularly in activities whichlandless rural population) which is a challenge for target social investments to the needy. Irrigatedcombating rural poverty. agriculture development is central to rural development

in Egypt.

(c) Cost sharing of investments in the irrigation and (c) Government's strategy has been to legislate fordrainage subsectors, which contributes to the cost-sharing arrangements, in which the beneficiariessustainability of the systems. pay the full cost of material and implementation of the

subsurface drainage [excluding interest charges] over atwenty-year period.

(d) The need for beneficiary participation to enhance (d) Government's strategy has been to graduallysustainability through a gradual shift of maintenance promote the development of new integrated irrigationresponsibility of the subsurface drainage system to water and drainage Collector Users' Associations.beneficiaries.

(e) Environmental issues involving the disposal of wastes (e) Government strategy has been to monitor the waterfrom industrial and domestic sources into some open quality in these drains and to pass legislation to preventdrains. pollution of water courses. Enforcement, however,

needs to be enhanced.

3. Sector issues to be addressed by the project and strategic choices:

A. Increased Efficiency in the Use of the Countries' Limited Water Resources and Arable Landthrough Improved Drainage:

The proposed project would increase the productivity of the irrigated area, as a result of improveddrainage conditions resulting from the following project components:

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(i) Rehabilitation of old malfunctioning subsurface drainage systems to ensure control ofsalinization and water logging of irrigated agricultural land on which subsurface drainagesystems were constructed in the past. The main reason for the malfunctioning of theseold systems was that, unlike the proposed project which uses continuous perforatedsubsurface lateral drains, the old systems consisted of separated clay or concrete pipeslaid with small gaps between units which resulted in concentrated entry of water throughthe gaps resulting in entry of sediment causing the eventual blockage of pipes;

(ii) Provision of new subsurface drainage in the new areas of the old cultivated lands as wellas in the old and new reclaimed lands; and

(iii) Deepening and remodeling existing open surface drains to ensure that drainage watercollected from irrigated lands by the subsurface drains is conveyed out of the project areaand into the drainage system and its outfalls.

B. Others

Other issues that the project would address include:

(i) Poverty among farm families. Since the project area covers many farm families withaverage small holdings of about two feddans, the project would help improve the incomes ofabout 400,000 farm families. This expected positive effect on rural incomes is particularlyimportant in Middle and Upper Egypt where poverty is relatively more severe (see details inAnnex 5, Tables 2,3 and 4).

(ii) Cost recovery and sustainability. There is a successful existing cost sharing arrangementsupported by legislation whereby the investment costs in subsurface drainage aresubstantially recovered from beneficiaries over a 20 year period with no interest charged.The GOE thus subsidizes approximately 50 to 55 % of this investment and the beneficiariescontribute 40 to 45 percent in real terms. The same cost sharing arrangements will beapplied in the proposed project. The consultation with beneficiaries in the social assessmentindicated that they are willing to pay for this investment cost.

(iii) Capacity Building. The project will support development of human resources throughprovision of training and technical assistance to EPADP's staff, and the overall institutionalstrengthening of EPADP. The project will also support the associated institutions of theMWRI participating in the irrigation and drainage sectors, such as the DRI (see details inSection E (4).

(iv) Environment. The project will support improvements in reducing water logging and soilsalinity as well as reducing the adverse effects on people's health due to disease vectors instanding water in surface on-farm open drains which will be replaced by sub-surface fielddrains. The project will identify sources of external pollution of the existing open drainagesystems in the project areas and prepare an action plan to address them (see details inSection E (6) and Annex 8). The project will also support the EPADP's Environmental Unitin the implementation of the EMP and their site specific environmental reviews.

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C: Project Description Summary

1. Project components: (see Annex 2 for a detailed description and Annex 3 for a detailed costbreakdown)

Compeiet S etor CostA % Tota

(a) Subsurface Drainage(') Physical- Old cultivated areas (390,000 fed)(2 ) 118.1 42.4 17.5 35.0- Old-new reclaimed areas ( 110,000 fed)(3) 35.5 12.8 5.0 10.0- Renewal & rehabilitation (300,000 fed)(4) 47.7 17.1 6.3 12.6

Subtotal Subsurface Drainage 201.3 72.3 28.8 57.6

(b) Open drains rehabilitation & remodeling: Physical 19.2 6.9 2.8 5.6Subtotal Open Drains 19.2 6.9 2.8 5.6

(c) Equipment and Materials Physical- O&M equipment for open drains 10.1 3.6 3.8 7.6- O&M equipment for subsurface drains 1.7 0.6- PVC/PE Powder for transition period (2 years) 26.5 9.5 9.5 19.0- Pumping stations - Emergency Centers 8.1 2.9 2.4 4.8

Subtotal Equipment and Materials 46.4 16.6 15.7 31.4

(d) Institutional Support to: Management& Institution

Building- EPADP And Physical 9.5 3.4 1.9 3.8- Social and participatory activities including two pilot 1.0 0.4 0.5 1.0

areas- Environmental Management Plan 1.0 0.4 0.3 0.6

Subtotal Institutional Support 11.5 4.2 2.7 5.4

Total Project Costs 278.4 100.0 50.0 100.0

(') Cost given in (a) is investment and recurrent costs on subsurface drainage less cost of PVC/PE raw material powderfor the transition period of first two years.

(2) Old cultivated areas: traditional irrigated areas under continuous cultivation.(3) Old-new reclaimed lands: areas that were reclaimed first, outside the traditional irrigated areas.(4) Renewal and rehabilitation: areas with old, dilapidated or malfunctioning subsurface drainage.

2. Key policy and institutional reforms supported by the project:

The project would support the implementation of the following policy and institutional reforms:

(a) Administrative Devolution and Procedure Formulation. EPADP would introduce, on a pilotscale, drainage Collector Users Associations (CUAs) and formulate the procedures forparticipation of beneficiaries in the operation and maintenance of the subsurface drainage systemin coordination with the Water Users Associations (WUAs) being established at the Mesqa levelunder the Bank-financed Irrigation Improvement Project (IIP). EPADP in cooperation with theNetherlands-funded Water Boards Project and the full participation of farmers would alsocoordinate with the IIP project to look into the possibility of integrating the irrigation and thedrainage water users association. These procedures would be submitted for Bank review by theend of the first year following loan effectiveness and an agreed pilot program implemented duringthe remaining project years until project completion.

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(b) Cost Sharing. MWRI/EPADP to continue its current policy of cost sharing at the tertiary (mesqa)level for both the on-farm irrigation improvements and the on-farm subsurface field drainagesystem.

(c) Improving efficiency of procurement of drainage Plastic Pipe Production Facilities andEncouraging Competition. The EPADP's seven pipe production facilities were initially financedand established in the Government sector through USAID, World Bank and German support.Spread all over Egypt, these facilities produce 80 mm perforated plastic (polyvinyl chloride orPVC) pipes for laterals and various sizes of PVC and polyethylene (PE) pipes for collectors forthe subsurface drainage of irrigated agricultural land. EPADP's current drainage works contractsstipulate that contractors will be provided with the drainage pipes by EPADP. EPADP has takena first step under the ongoing NDP, through Netherlands funding, to carry out a review of theproduction facilities by an international independent consultant with a view to further improvingthe management and efficient operation of the facilities and possible gradual commercializationor privatization. According to the consultant's report, the facilities' operations in EPADP havegenerally been efficient. At present, there is great demand for the pipes they produce forsubsurface drainage, and private sector provision altematives are non-existent. Since there ismuch sunk cost in these facilities, Government can only benefit by making existing facilitiesproductive. Under the proposed project, EPADP would pursue two actions with a view to furtherimprove efficiency and spur competition: (i) EPADP would carry out a study to look at theoptions for commercialization or privatization of these facilities, two years after the effectivenessof the Bank loan; and (ii) the project would also require modifications to the current procurementarrangements of drainage pipes to allow works contractors the option for provision of pipesthrough their drainage works contracts. The EPADP facilities would, in the meantime, over thefirst two years of the project, gradually convert to commercialized or privatized entities able tocompete for the supply of pipes to contractors. This will also open the way for private sectorsuppliers, who can develop the required lines of production for drainage pipes, to also competefor the supply of pipes.

* A World Bank special mission in August 1999 reviewed the issues related to the pipeproduction facilities and made recommendations for a comprehensive study to be carriedout to look into the possible commercialization or privatization of EPADP's pipeproduction facilities. The mission also looked at the possibility for PVC/PE pipes to beprocured directly through civil contractors. This mission had recommended that agradual transition from the current provision of drainage pipes by the EPADP's pipeproduction facilities to a system of open market competition would be advisable. Underthis arrangement, the EPADP pipe production facilities will gradually acquire the statusof independent economic units able to compete with other private sector suppliers whomay enter the market for production of these specialized drainage pipes.

* EPADP has, based on the findings of the aforementioned Bank's special mission, agreedon a TOR to carry out such a study using the project preparation PHRD grant. EPADPhas furthermore indicated that it would seriously consider the various optionsrecommended by the study for the gradual commercialization and/or privatization of thepipe production facilities. A consulting team will be engaged to carry out the study assoon as the PHRD Grant funds become available (scheduled for June 2000).

* The details of the transition period for the provision of drainage pipes during the first twoyears of the project have been agreed to avoid any disruption to implementation of thedrainage program. Based on this arrangement, the current procedures under the ongoingNDP Project will continue to be followed for the provision of PVC/PE raw materials andfor synthetic filter materials for the EPADP's pipe production facilities so as to fullycover the requirements for procurement of materials for the first year of the project and50% of the requirements for the second year. Based on this arrangement, about 30% of

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all pipe production and filter material requirements will be channeled through provisionof raw materials to EPADP's pipe production facilities directly. The remaining 70% willbe incorporated in the civil works contracts with contractors having the option ofprovision of raw materials to the pipe production facilities, or direct purchase from thefacilities, or getting the pipes through a private sector supplier. It is thus anticipated thatEPADP will gradually move over the two-year transition period towardscommercialization or privatization of its pipe production facilities. The provision ofpipes for the project will also be reviewed after two years of effectiveness and at mid-term to agree on any adjustments which may become necessary, to take intoconsideration civil contractors preferences in getting pipes, and the efficiency and costeffectiveness of the preferred option.

(d) Establishment and enforcement of sound environmental guidelines. EPADP would employ soundenvironmental and health guidelines and practices in implementing project activities such as: (i)the destruction and removal of cleared weeds and silt resulting from the dredging of open drainsby contractors to prevent any bilharzia snails which may appear in drains from re-infecting otherdrains; (ii) apply chance find procedures for possibly buried cultural heritage in standard civilcontracts; and (iii) EPADP, assisted by DRI, which is carrying out water quality studies at themixing stations (through Netherlands-funded Monitoring and Analysis of Drainage Water QualityProject (MADWQ) for the Delta and the Canadian-funded National Water Quality andAvailability Management Project (NAWQAM) project for Upper Egypt), would submit copies ofsuch studies to the Bank; (iv) EPADP, assisted by DRI, would draw up an action plan to evaluateinformation on pollution discharge into open drains in the project areas, and supportimplementation of the monitoring plan. Through the resulting mitigation plans and training ofregional drainage sector staff, the project would strongly support the Government's policy toimprove the enforcement capacity with respect to Environmental Law 48. Agreements in thisregard were reached during negotiations; and (v) environmental assessment and EMPimplementation (site specific environmental reviews and pollution abatement plans) would alsofocus on sub-project areas situated in relatively vulnerable locations such as fresh and brackishwetlands along the boundaries of the Nile Valley and Delta and protected nature sites in additionto the reclaimed areas and any project areas with serious pollution hazards.

3. Benefits and target population:

(a) Benefits:

The project's main benefits would be derived from and based on improved drainage on 0.8million feddan of irrigated lands in the Delta and Nile Valley. The net present value of benefits at the12% discount rate has been estimated at LE 607 million (or US$178 million equivalent). The project'seconomic benefit-cost ratio is 2.0.

(b) Target Population:

* The target population benefiting from the project is about 400,000 farm households. This is based onthe prevailing land ownership and cropping patterns, as most of the farmers in the project area aresmallholders who have an average size of land holding of two feddans.

4. Institutional and implementation arrangements: (Implementation period: Six years (2001-2006)

Executing agencies:

* The project would be implemented by the semi-autonomous EPADP of the MWRI, which isresponsible for implementing drainage projects and maintaining both surface and subsurfaceagricultural drainage systems. The EPADP is headed by a Chairman (First Undersecretary of State)

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at its headquarter in Cairo with a Vice-Chairman and two undersecretaries. The project would comeunder the overall supervision of the Chairman of EPADP who would be the Senior MWRI official incharge of the project. EPADP operates through five "regional sectors" and the Headquarters Officein Cairo. Each of the five field regional departments is headed by an Undersecretary of Statesupported by an M&E Unit. The total full-time staff of EPADP is about 7,100 of which 650 are civiland mechanical engineers. The intensity of staffing varies among regions with East Delta having thehighest and West Delta, the lowest. The Chairman has the authority to recruit or transfer staff asneeded which enables a certain flexibility to meet peak period requirements in the various regions.

* The EPADP has had considerable experience in implementing six drainage projects co-financed bythe World Bank including the ongoing National Drainage Project (Ln. 3417-Cr. 2313-EGT) and willbe responsible for implementing the project along similar lines to the earlier drainage projects. Inaccordance with its current mandate, EPADP would be responsible for carrying out the design,procurement, field installation and operation and maintenance of the drainage works. The project willprovide logistic support to EPADP headquarters in Cairo and field directorates to ensure continuedimprovements to the O&M of the system.

* EPADP would, as in the earlier drainage projects, obtain assistance from other agencies of the MWRI(as described below) in implementing various project components. Assistance from other ministrieswould be similarly coordinated by the WRC and its institutes to address the side effects of industrialand domestic wastes into open agricultural drains and coordinated within EPADP by theEnvironmental Unit.

* Other main institutions within the Ministry which interact with the functions of EPADP are: (i) theIrrigation Department which is responsible for the O&M of all public irrigation canals and their canalstructures. Both the EPADP and the Irrigation Department are structured along regional lines with atleast one general directorate in each governorate; (ii) the Water Resources Center (WRC) whichconducts research on all aspects of water use, including reuse of agricultural drainage water throughits 12 research institutes including the DRI with whom EPADP cooperates in the drainage sub-sector;and (iii) the Mechanical and Electrical Department (MED), which is responsible for installing,operating and maintaining all irrigation and drainage pumping stations, which has been supported bytwo Bank-funded pumps rehabilitation projects with the third project awaiting effectiveness.

- EPADP would furthermore be assisted by a Project Management Team (which was a condition ofBoard Presentation of the ongoing National Drainage Project). This team exists and is functioningwell. It is chaired by the Chairman of EPADP and is composed of members from WRC, theIrrigation Sector, MED, the Ministry of Agriculture and Land Reclamation, in addition torepresentatives of the Ministry of Industry, the Ministry of Housing and the Egyptian EnvironmentalAffairs Agency (EEAA) who are invited to attend, if required. The team meets at least bi-annuallyand more frequently, if required to address various implementation issues and review the annualprogram. This team assisted by the EMU would also function as the steering committee forimplementation of the EMP.

Financial Management. The Financial Management System (FMS) in place in the EPADP is based onprinciples and procedures defined by the legal framework applicable to the public sector and morespecifically to governmental institutions. The Financial Management System in place is satisfactoryoverall and does not show accountability issue; however, several improvements have to be introduced inorder to upgrade the Management Information System (MIS). EPADP is implementing an importantprogram which aims at improving its MIS modernization program; however, substantive results wouldrequire two years of concerted efforts. In order to implement the project according to Bank'srequirements and the required efficiency, EPADP will be required to set up special financial managementarrangements as reflected in an agreed time bound action plan which will be implemented by no later thanDecember 31, 2001. Financial management arrangements for the project are detailed in Annex 6 and aresummarized below.

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Accounting and Financial Reporting. The Project Management Team (PMT) Coordinator selectedfrom the Planning and Evaluation General Directorate (PEGD) staff will assure the issuing of the annualproject accounts and the quarterly Project Management Reports (PMR) as well as the submission of thesedocuments on a timely basis to the Bank and to the auditors. Procedures for accounts and financialreporting would be developed by a qualified specialist and would aim to conform to the Bank'srequirements.

Audit. EPADP will appoint an auditor acceptable to the Bank to carry on an annual audit according to theInternational Standards on Auditing, as issued by the International Federation of Accountants, the Bank'sGuidelines (e.g., Financial, Accounting, Reporting and Auditing Handbook ("FARAH")) and specificTerms of Reference (TORs) acceptable to the Bank. The auditor will express a professional opinion onthe annual project financial statements and will submit to the Bank an annual audit report within sixmonths after the end of the fiscal year.

Disbursements. Disbursements from the Bank loan would be initially made on the traditional system(reimbursements with full documentation and against Statements of Expenditure (SOEs), and directpayments). It would be converted to the new procedures (i.e., based on Project Management Reports(PMRs)) after the assessment of the financial management system and the issuing of a certificationensuring that this system is operating satisfactorily. The target date for this conversion is December 31,2001.

Special Account: As in the ongoing NDP, one special account would be established under the project.The special account would be held at the Central Bank of Egypt and will have an initial authorizedallocation of not less than US$1.5 million. This allocation would be increased to $3 million when theaggregate amount of withdrawals from the loan exceeds $12 million comes under LACI disbursements.However, if withdrawals are made on the basis of PMRs, then amount deposited in the Special Accountshould not exceed $5 million. The project's special account would be managed by EPADP and beaudited annually by independent special auditors acceptable to the Bank. The EPADP, assisted by theBank, has carried out a financial and procurement audit for the ongoing National Drainage Project withthe objective of evaluating the LACI readiness of EPADP for the proposed project. The audit was carriedout by independent external auditors for the current NDP Project as an indicator for the proposed NDP-IIProject.

Monitoring and evaluation arrangements: Project Monitoring and Evaluation (M&E) would be theresponsibility of EPADP's existing monitoring and evaluation unit, which will monitor progress againstagreed-upon performance monitoring indicators (Annex 1). Monitoring and Evaluation would be guidedby the Project Implementation Plan (PIP) (to be prepared by EPADP by December 2000); performanceindicators, and the project design summary (Annex 1). EPADP would undertake periodic data collectionand analyses with the assistance of the M&E Unit. The M&E Unit would consolidate the M&E reportsand include them in the semi-annual (January and July each year) progress reports. The format for thereports would be finalized during the Project's Launch Workshop. They would cover the status of projectimplementation, any problems which may have arisen and the corrective actions being taken. They wouldalso provide an updated procurement program, disbursement and commitment tables. One part of theprogress report would also include crop yields and impact on the functioning of subsurface drainageincluding O&M, particularly maintenance of open drains. The report will also include data on costrecovery of the field drainage investment cost with comparison of expected vs. actual cost recovery;report on the measures taken to improve the timely delivery of crop compensation to beneficiaries inaccordance with Bank policy; and report progress in the implementation of the EnvironmentalManagement Plan. In addition to annual progress reports, M&E would be conducted through: (a) Banksupervision missions, and (b) a project mid-term review. EPADP would prepare a detailed mid-termreport to serve as the basis for a mid-term review planned for January 2004, and submit to the Bank a

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final project evaluation report by December 31, 2006. The project will provide technical assistance forstrengthening M&E and the MIS System.

D: Project Rationale

1. Project alternatives considered and reasons for rejection:

Since the project is a follow-on to the ongoing National Drainage Project which itself hasfollowed on five earlier satisfactorily executed drainage projects, general project alternatives which havepreviously been used satisfactorily have been adopted for the proposed project. In the detailed designs ofthe drainage system, however, various options of design layouts are continuously being considered andoptimal solutions chosen. Some alternatives under the project for the subsurface drainage system havebeen reviewed, such as: (i) provision of the plastic drainage pipes through EPADP's facilities with rawmaterials provided to the facilities through IBRD and KfW financing as in the ongoing National DrainageProject (NDP); (ii) provision of the drainage plastic pipes through civil contractors using the provisionalsum concept; (iii) provision of the drainage plastic pipes through a two-year transitory period, duringwhich raw materials would be provided to EPADP's pipe production facilities, after which the pipeswould be obtained through the civil contracts. In this case, current NDP procedures of civil contractorstaking delivery of pipes from EPADP's pipe production facilities, transporting and installing them wouldbe maintained. This procedure would allow for provision of the entire resin powder (or raw material) firstyear requirements to EPADP's pipe production facilities, and one half in the second year. After thesecond year, all pipes for Bank-funded drainage areas would have to be provided through civil contracts,unless otherwise agreed by the Bank and EPADP.

2. Major related projects financed by the Bank and/or other development agencies:(completed, ongoing and planned)

Latest Supieision {Form 59 RatingsSector issue Project O: a 4ancd Pr* Only)

linplmenntation. Progress Development____________i;: _i;: ftP) 0b ective (00)

Bank-FinancedCompleted

Waterlogging and -Pumping Stations Rehab. Project I (Bank-financed) Satisfactory SatisfactoryIncreasing salinity. - Drainage I-V Projects (Bank/IDA-financed) Satisfactory Satisfactory

Inefficient on-farm - Irrigation Improvement Project (USAID-financed) Satisfactory SatisfactoryWater management.Aging and - Pumping Stations Rehab. Project II (Bank-financed) Satisfactory SatisfactoryMalfunctioningPumping stations.

Ongoing- National Drainage Project (Bank/KfW-financed) Highly Satisfactory Highly Satisfactory- Irrigation Improvement (Bank/KfW-financed) Satisfactory Satisfactory- Pumping Stations Rehab. Project liI (BanklKfW-financed) New New

(due to become effective in 2001)Planned- Irrigation Improvement Project II (BanklKIW-financed) Planned Planned

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

3. Lessons learned and reflected in the project design:

* Given the relatively slow pace of implementation of civil contracts for subsurface field drains situatedon farms with small irrigated parcels and the extensive need for detailed coordination betweenimplementing agency, contractor and beneficiary farmer, the implementation period has consideredthese delaying factors and an implementation period of six years has been used.

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* The first four drainage projects have encountered implementation delays of three to four years mainlydue to delays in effectiveness and very optimistic implementation assumptions. Under thesatisfactorily completed fifth drainage project, implementation delays owing to delays ineffectiveness were reduced to 1.5 years. In the ongoing NDP, implementation delays were furtherreduced to 11 months. All these suggest that the concerted efforts by the MWRI, EPADP, MOIC,and the Bank must be mobilized to ensure an accelerated process between Board and Effectiveness.

* Although earlier drainage projects, and in particular, the National Drainage Project, have providedinstitutional support for EPADP, further assistance will continue to be needed under the proposedproject in: (i) computerization of the design process for drainage works, construction planning andmonitoring; (ii) the operation and maintenance of the drainage system; and (iii) impact monitoringand evaluation. The continued long-term involvement by the Bank and other cofinancing agencies(KfW and the Netherlands Government) to assist EPADP in implementing these improvements wouldenhance the optimum use of resources in the drainage program, which forms a large percentage ofinvestments in agricultural infrastructure.

4. Indications of borrower commitment and ownership:

* Government recognizes the high priority of the need to provide all irrigated areas withsubsurface field and collector drainage and their associated open drainage network. This isaccepted as being a vital requirement for the continued functioning of sustainable and intensiveirrigated agriculture which has developed in the last three decades, after the completion of theHigh Aswan Dam. To this end, the project is included as one of the Government's priorityprojects in its Five-Year Development Plan (1998-2003).

* EPADP has demonstrated continuous and active participation in project identification andpreparation. EPADP had, with the agreement of the Bank, assigned a team of nationalconsultants to carry out a study to identify and prepare the second slice of the NationalDrainage Program under the ongoing National Drainage Project, for evaluation by internationalfunding agencies.

* EPADP will, by the closing of the current National Drainage Project (December 31, 2000),have already completed the detailed designs for about 150,000 feddans to be implementedunder the proposed project.

5. Value added of Bank support in this project:

The current Bank assistance strategy in Egypt accords high priority to financing projects whichimprove the efficiency or capacity utilization of existing facilities and, in particular, projects which focuson poverty alleviation and on environmental and sustainability issues. The implementation of subsurfacefield drainage on all irrigated land is critical for the successful performance of irrigated agriculture and isa priority for the GOE. The Bank's participation has assisted in attracting resources from other bilateraland multilateral donors in the past. Government has, therefore, requested the Bank to continue to supportthe ongoing drainage program to ensure rationality, continuity and credibility to the programs and for theBank to continue to act as a catalyst for mobilization of donor involvement. As stated above, the Bankhas supported five drainage projects in the past and the current National Drainage Project (Ln. 3417,US$45 million and Cr. 2313 for US$75 million equivalent), all of which have been successfullyimplemented and are closed, or except one which is currently being successfully completed. Banksupport for the project will, furthermore, contribute to ensuring efficient and optimal utilization of theirrigation and drainage system which is vital to the continuation of irrigated agriculture in Egypt.

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E: Summary Project Analysis: (detailed assessments are in the project file)

1. Economic: (supported by Annex 4)

[x] Cost-Benefit Analysis: NPV=US$178 million; ERR= 23%[ Cost Effectiveness Analysis[] Other (specify)

The project has been economically justified conservatively on the basis of its agriculturalbenefits. The economic rate of return is estimated at 23%. Benefits have been computed by aggregatinga one feddan model over a net effective area of 0.72 million feddans (90% of the gross project area of0.80 million feddans) for the three alternative areas of Egypt under the proposed project (i.e., the Deltaand the Nile Valley [Middle and Upper Egypt]). The benefits from the project were computed for 14major crops (11 in Delta, 13 in Middle Egypt and 11 in Upper Egypt); two crops (rice and sugar cane) areproduced only in the Delta and Upper Egypt regions respectively. High value crops that are grown in lowvolumes in the project area were excluded. Based on available monitoring data, the effects of subsurfacedrainage in lowering water table depth and reducing soil salinity were assessed before and after, andwithout and with the installation of subsurface drainage. It was found that vegetables (including broadbeans) and fruits (citrus) showed substantial incremental yield increases from improved subsurfacedrainage and cereals (barley, sorghum, maize) showed only moderate, but favorable yield responses.Details of yield increases per crop from improved subsurface drainage are presented in the detailedeconomic analysis in Annex 4. Project benefit flows were derived from crop budgets (utilizing drainageeffects on crop yields from the monitoring data), adjusting financial to constant Year 2000 economicprices and constructing a benefit build-up based on the total effective area across the three project regionsof Egypt entering the project each year. The project benefit flows are presented in Annex 4, Table 2 andsubsequently Table 1. Project economic costs were derived from financial costs as reflected in pricesquoted in existing field drainage contracts and adjusted to Year 2000 constant prices, excluding publictransfers. The economic analysis is carried out over a period of 30 years, which is the useful life of theinvestments made under the project. The estimated cost of implementation of the subsurface lateral andcollector of about US$750/ha is considered comparable to the costs of similar works in other countrieswith large areas of subsurface drainage systems. Costs also include recurrent costs in the form of O&Mof the installed drainage system assumed to continue after the initial project investments have been madeuntil the end of the project's useful life. Based on these considerations, the net present value of theproject was calculated at the 12 percent discount rate (representing the opportunity cost of capital) to beLE 607 million (or US$178.5 million equivalent at the current exchange rate), which represents thepresent value of the incremental national income generated by the investment in subsurface drainage inEgypt.

2. Financial: (see Annex 5)

Project investments involve both on-farm subsurface and collector investments and supportinginvestments in related rehabilitation of open drains located throughout Egypt and institution building,both of which have important benefits to individual farmers. Calculation of individual benefits in termsof preventing losses has been carried out on a per feddan basis, comparing "with" and "without" projectcrop budgets. The average size of land holding per farm family for alternative regions of Egypt has beenassumed at two feddans. Financial models have been evaluated for a 2 feddan farm unit, representing thetypical farm unit in alternative regions of Egypt (Delta, Middle Egypt, and Upper Egypt). On the basis ofcalculations from these models, investment in subsurface drainage has been found to be financiallyremunerative, with financial rates of return per farm unit ranging from 25% to 28% (see Annex 5, Table1).

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Fiscal impact:

The Government will provide about LE 435.5 million (US$135.8 million equivalent) incounterpart funds for the entire project, which is annually about 0.6% of the 1997/98 total annualGovernment investment budget expenditures and should not pose any fiscal constraint. This counterpartfunds provision excludes provisions for duties and taxes. The counterpart funds provision would finance94.3% of the local costs (or about 46% of total project costs) of the project composed mainly of financingfor civil works, crop compensation, land acquisition and for equipment or materials procured locally aswell as recurrent cost.

3. Technical:

The project is technically sound. The drainage works use the latest innovations in the industry,are based on high quality specification of works and on well-established international practices,knowledge and experience gained by EPADP over the last three decades. The anticipated increase inagriculture productivity resulting from the improved soil conditions and timely evacuation of drainagewater is reasonable and in line with the present yields achieved by farmers where subsurface drainage wasinstalled and as witnessed by the alternative reduction in yields in areas without subsurface drainage. Theproposed institutional arrangements are similar to those used for the ongoing National Drainage Project(as per Section 4 below).

4. Institutional:

- Project Management Team of an Environment Unit and the enhancement of the M&E Unit. EPADPis to continue the function of the Project Management Team established under the ongoing NDP andto support the small Environmental Unit established during project preparation as well as to enhanceits M&E unit, as agreed during the preparation phase of the project. An Environmental Unit has nowbeen established within EPADP as agreed with the preparation mission. The Environmental Unitconsists of an environmental coordinator and four staff members attached to the M&E Directorate, toassist with the implementation of the EMP. The Management Information Systems (MIS) activitieswill be further expanded and this, together with M&E, will become the main tool for monitoring theimpact of drainage on crop yields and production. In addition, the established M&E Unit would beenhanced through staffing, training and logistical support. The established Project ManagementTeam will continue to function and a project coordinator will be appointed by EPADP by the end ofDecember 2000. EPADP has, under the NDP Project, established a complaint management system aspart of its M&E project funded by the KfW whereby its field staff interact with agriculturalcooperatives and beneficiaries to look into issues raised which are critical of its drainageimplementation work with a view to resolving disputes.

* EPADP has formed over 2,000 Collector Users Associations (CUAs) based on the Drainage UsersAssociations and Farmers Participation given under Law 32 of 1964. These associations serve as aforum for EPADP officials to provide information on drainage issues, demonstrate the need formaintenance and receive early warning in the case of malfunctioning field drains and address health,environmental and social concerns. The Social Assessment conducted field interviews specificallydesigned to address the issues of farmer participation and the formation of effective CUAs. Therecommendations from this assessment are in Section 5 below. It is essential for further sustainabilityto, where possible, integrate the CUAs with Irrigation WUAs such as those being formed under theIrrigation Improvement Project (at Meska level) and expected under the Netherlands-funded WaterBoards Project (at branch and higher levels). The integration process can be achieved with farmerparticipation at the branch canal level where the same users association could address both theirrigation and drainage issues. To test the integration, two pilot areas have been identified with areasof 2,000 to 3,000 fed in the Delta (Balaktar command area in Beheira governorate and Dakaltcommand area in Kafr El Sheikh Governorate), both of which have had WUAs established under IIPat the Meska level either put in or currently under construction. A Steering Committee will beestablished under the chairmanship of the Director of the Netherlands-funded Water Boards Projectwith membership of the Irrigation Advisory Services (IAS) of IIP and EPADP field staff and

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participating farmers who will oversee the integration, provide direction for the organization andcoordinate efforts in the two pilot areas under the project. It has also been agreed that the IrrigationAdvisory Services (IAS) of HIP will assist EPADP in training its staff on issues related to farmer'sorganization and awareness aspects. Communication and mobility requirements will be met throughthe institutional support component of the project. Additional technical assistance and training willbe provided through the ongoing Water Board Project funded by the Netherlands bilateral assistanceand KfW under the proposed project.

* Technical assistance and training requirements will be met from the provisions of the Netherlands-funded INTESP, KfW, and Water Boards Project. Agreement has been reached, in principle, betweenthe Bank, Netherlands Embassy representatives and EPADP to release grant funds under the INTESPcomponent for EPADP (Code 400 - "Contribution Arrangement") and for procurement of goods,amounting to DFL 500,000 to be done under the ongoing IDA Credit or KfW Loan for the NDP.This would release this amount of grant funding for use to satisfy TA and training requirements forthe environmental requirements of the proposed project, and in support of the pilot schemes forDevelopment of Integrated Water and Drainage Collector Users Associations.

* Project Management. The financial management arrangements proposed in the agreed time boundaction plan which, if successfully implemented, during the 18-month period, will enable mitigate therisk linked to the insufficiencies identified in EPADP's existing Financial Management System.

5. SocialA social assessment which included extensive field interviews was conducted to focus specifically onthe degree of satisfaction of farmers with the drainage system and institutions associated withdrainage, as well as the best mechanisms and incentives for the formation of successful CUAs. Thisassessment was preceded by a small survey conducted independently by EPADP covering specificissues related to crop compensation to ensure that the project is in compliance with Bank policy. Thefindings of the social assessment have been incorporated in the PAD (Ref. Annex 7A). The socialassessment recommends: (i) the need for the EPADP/DAS (Drainage Advisory Service) to enhancetheir ongoing contact with beneficiaries to increase their sense of ownership and improve their levelof awareness; (ii) the need to improve the communication links between farmers and executing andadvisory engineers, ensure farmers' cooperation during implementation of the on-farm drainage andthe subsequent O&M of the system; (iii) the need for beneficiaries to be encouraged to carry out themaintenance and monitoring work of the on-farm tertiary drainage system under the supervision andadvice of the EPADP field DAS engineers. (EPADP is currently working with MWRI to introducean amendment to present regulations which will be necessary to give the CUAs a framework foroperation by merging with the WUA); (iv) DAS should be assisted in improving their services byincreasing the number of staff, providing them with training in community organization, extensionand communication, transportation, communication aids and adequate incentives; (v) improvement ofthe procedures whereby crop compensation is paid to farmers, and ensuring that the annual review ofcrop compensation tariffs is reflected in the compensation; (vi) better collaboration between the threemain agencies in the field (DAS, IAS and Agricultural Extension) to ensure that farmers receivecoordinated and complementary advice all of which can be coordinated between the Water BoardsProject. Better collaboration between these agencies will assist in strengthening the farmingorganizations and determine the best mechanisms for integrating Irrigation Users Associations andCollector Users Associations (Ref. Annex 7A Social Assessment). These principles would beadhered to during project implementation.

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6. Environmental Assessment: Environmental Category [ ] A [X] B [I] C

* The proposed project has been placed in environmental screening Category "B" consistent with theprocedures of World Bank Operational Policy 4.01 "Environmental Assessment." There are noirreversible adverse environmental impacts and major environment issues are not caused or generatedby the project. Overall, the proposed project is expected to have major beneficial impacts on theenvironment as it would construct subsurface drainage to replace shallow inefficient surface drainswhich become sources of contamination, overcome the harmful effects of waterlogging and soilsalinity and mitigate their associated harmful effects. The project would also contribute to laying thefoundation for a long-term solution for disposal of saline effluent and prevention of urban andindustrial pollution of the open conveyance drainage system. These potential benefits outweigh themagnitude of the adverse environmental impacts and their severity arising as a result of the actualpractice of using the open drainage conveyance.

* The proposed project would not involve involuntary resettlement and would include the use ofarchaeological "chance find procedures" in the civil works drainage contracts in case buriedarchaeological materials are discovered during construction work.

* There are limited but significant adverse impacts related to existing open conveyance drains thatreceive the outflow from the buried field drainage. These issues are of a generic nature and externalto the project and could be summarized as follows:

(a) Reuse of Drainage Water. Currently, drainage water in some areas is mixed with fresh waterfor reuse in irrigated agriculture. Problems could arise if contaminated drainage water ismixed with low quality irrigation water. Drainage water quality is monitored at severalmixing stations for salinity, coliforms, BOD and pesticides.

(b) Possible Adverse Effects on Public Health. Any contamination of irrigation water which mayoccur and have possible adverse effects on human and animal health would be through theexisting open conveyance drains which could become habitats for the schistosomiasis vector,which exists when open drains are malfunctioning and the drainage water is stagnant. Theproject is contributing to improving the performance of the open drains and increasing theflow in them, thereby contributing to the dilution of the density of flow and the continuousmovement of drainage water, thereby forestalling the possible survival of the schistosomiasisvector.

(c) Agricultural, Industrial and Domestic Waste Pollution. Drainage water from agricultural landcollects residues of applied fertilizers and related agro-chemicals. Some drains also receivesewage as well as industrial waste from the villages and cities in the Delta. In areas of GreaterCairo and Alexandria, where drains would contain raw sewerage and/or industrial liquidwaste, the poor quality of the water could negatively impact on livestock and crops. Only thefirst issue may be directly project generated; the remaining two are not generated by theproject, although they do affect the quality of drainage water in particular in the Delta.

(d) Weak Enforcement of the River Nile Protection Law 48 of 1982. This law protectsgroundwater and all fresh surface water, the management of which is the responsibility of theMinistry of Water Resources and Irrigation. Although this Law was not enforced previously,last year EPADP started to enforce the Law. The DRI monitors over 100 points in the openirrigation and drainage water system, while RIGW monitors groundwater with the resultsbeing compiled in annual reports.

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* In order to address the above issues, a Sector Environmental Assessment Report was prepared. Itconsisted of a Water Sector Review which addressed, among other matters, the policy, institutionaland technical aspects of the water sector related to irrigation and drainage and a generic EnvironmentManagement Plan (EMP) (see Annex 8) which complements the findings and recommendations ofthe water sector review. The EMP was discussed with EPADP during appraisal. The EMP isaddressing the above major environmental issues related to the project which call for site specific EAreports based on the annual drainage investment program. These issues would relate to the quality ofthe drainage water and the monitoring of the water quality upstream and downstream, the preparationand mitigation by the major polluters of Compliance Action Plans (CAPs) which will be submitted toEPADP and the EEAA.

* Enforcement of water pollution in open drains will be the responsibility of MWRI on the basis ofCompliance Action Plans (CAPs). During the first year of project implementation, EPADP andMWRI would contact major polluters and would require them to submit each a CAP within sixmonths based on TOR elaborated by EEAA for such plans. Because the severity and magnitude ofurban and industrial pollution vary in the different project areas, the project would finance, to theextent possible, during the first 1-2 years, those open drain areas which are not affected by urban andindustrial pollution. This will provide time for CAPs to be prepared for those areas which are highlypolluted and would enable EPADP and EEAA to establish a monitoring and enforcement system.Subsequent to preparation of individual CAP, the Environmental Unit of EPADP would reach anagreement in writing with each polluter to implement the action plan over an agreed timeframe. Incase of non-compliance, MWRI would enforce Law 48/1982 with the assistance of the Governor.Since water discharge standards of Law 48 are extremely strict and cannot be easily met, the Bank'sguidelines in pollution abatement and prevention handbook will be used.

* In order to implement the different environment activities, the project has already established a smallEnvironmental Unit (EU) in EPADP during project preparation to: (a) oversee the preparation of thesite specific environment review work with EEAA in requesting polluters to prepare CAPs; and (b)monitor the implementation of the project EMP and the site specific EMPs; and monitor water quality,and in particular, water quality after mixing of irrigation and agricultural drainage water for re-use asirrigation water.

* The funding of the implementation of the EMP has been discussed with EPADP, DRI, and co-financiers, particularly KfW, Netherlands Embassy in Cairo and the Canadian-funded NAWQAMprojects and has been agreed, in principle, during appraisal. The main components of the EMP are:(i) training of staff of the EU through workshops and seminars; (ii) support to the EU in theimplementation of the EMP; (iii) execution of selected water quality monitoring; and (iv) waterquality analyses equipment. Funds have been allocated through World Bank loan for equipment,NAWQAM Project, the ongoing Netherlands-funded INTESP Project and the Government for TAand training. Agreement has been reached on these aspects.

7. Participatory approach:

(a) Primary beneficiaries and other affected groups:

EPADP's management and key staff have been closely involved in the identification, preparation anddesign of the proposed project and in field visits to various areas and dialogue with staff on site. A fieldinvestigation, including topographic, pedagogical, hydrological, socio-economic and environmentalaspects, is conducted in the proposed project areas at least one year prior to initiation of works. The fieldinvestigation on technical data required for the design of the drainage system is carried out by EPADPbased on agricultural and hydrological data obtained from site investigations, agriculture cooperative andMALR. Involvement of the farming population is especially strong in areas of renewal where farmers

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have requested renewal of old and malfunctioning drainage systems. Beneficiaries in general have beensupportive of all kinds of field drainage works to the extent of agreeing to the cost sharing of investments.This has been confirmed by the Social Assessment which has been carried out for the project in which itwas found that farmers are willing to pay a portion of the incremental income attributed to drainageimprovements varying between 15 and 25 percent. This willingness to pay shows that there are strongincentives for farmers to participate in drainage improvement projects (Ref. Annex 7A, p. 81). Theproject envisages collaboration with the ITigation Improvement Project and the Water Boards Project forthe establishment of a pilot combined irrigation and drainage user's association at the secondary canallevel. Meanwhile, in every project area where rehabilitation of existing or installation of new drainageinfrastructure is planned, farmers will be consulted with respect to benefits, suitability of theinfrastructure and timing of construction. Lessons from the past and from the Social Assessment havebeen reviewed and will be incorporated in the communications program for which funds have been setaside under the project. The assessment has also confirmed perception of clear benefits by farmers andhas pointed to areas for improvement for EPADP.

(b) Other key stakeholders:

F: Sustainability and Risks

1. Sustainability:

The project directly addresses efficient use of water and land resources for agriculturalproduction. The sustainability is closely linked to the optimum use of soil and water resources, which hasbeen achieved by the earlier Bank-supported projects that assisted in improving farm incomes, thusenabling beneficiaries to participate in the cost sharing arrangements and ensuring financial stability andthe sustainability of the drainage program. EPADP is responsible for the O&M of the drainage works,provision of equipment, training of staff and technical assistance and is therefore provided with an annualbudget for O&M costs of the drainage system. Proceeds from the land tax system assists with theprovision of the necessary budgetary support for the O&M costs of the irrigation and drainage system.

2. Critical Risks: (reflecting assumptions in the fourth column of Annex '1)

Risk Risk Rating Risk Minimization Measure

From Outputs to Objective

Inadequate design to meet immediate needs Low Apply well-established design criteriafrom the previous World Bank-financedsuccessful drainage projects.

Inadequate availability of O&M budget Low Review yearly budget provisions duringsupervision missions.

Lack of cooperation by farmers in participating in Moderate Farmer consultation and participation inCUAs project design.

Conversion of a public monopoly in pipeproduction into a private monopoly Moderate Envisaged that study will impose non-

monopoly status as a condition of sale ofpipe production facilities

From Components to OutputsInappropriate design and inappropriate selection Low Apply appropriate technical inputs toprocess establish proper categorization criteria for

selection of relevant works andequipment.

Overall Risk Rating LowRisk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

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3. Possible Controversial Aspects:

None, since this is part of a well-established and continuing program which is accorded high priority byGovernment and beneficiaries and supported by Bank Group, and other multi-lateral bilateral fundingorganizations and is vital for the continued production of the agricultural sector.

G: Main Loan Conditions

1. Effectiveness Conditions:

The Borrower through EPADP would establish a financial management system.

2. Other: (classify according to covenant types used in the Legal Agreements)

Accounts/Audits:* EPADP has the staffing and ability to prepare and maintain project accounts in a form

acceptable to the Bank. These accounts would be kept in EPADP and would be auditedannually by an independent auditor acceptable to the Bank. Annual audit reports of projectaccounts and SOEs will be prepared and submitted in English by auditors acceptable to theBank within six months after the end of the fiscal year.

Manazement of the Proiect:* EPADP has established an Environmental Unit and will complete the staffing of the unit by no

later than December 31, 2000. EPADP will continue with current arrangements of theManagement Team.

Monitoring and Reporting.EPADP will submit to the Bank consolidated semi-annual progress reports in January and Julyof each year. It will also complete a mid-term review of project progress by September 2003and submit to the Bank a final evaluation report of project achievements by December 31,2006.

Implementation:T The Project Implementation Plan (PIP) (to be revised by EPADP by December 2000) will beupdated by the Borrower during the project's mid-term review.

H: Readiness for Implementation[X] 1. a) The engineering designs for the first year's activities are complete and ready for the start ofproject implementation.[ ] 1. b) Not applicable.

[X] 2. The procurement documents for the first year's activities are being prepared in readiness for thestart of project implementation.[X] 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.[] 4. The following items are lacking and are discussed under loan conditions (Section G):

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1: Compliance with Bank Policies

[x] 1. OD 4.30 applies in respect to crop compensation and measures will be taken prior to effectivenessto ensure that there is compliance with Bank policy.

[x] 2. This project complies with all applicable Bank policies.[ 3. The following exceptions to Bank policies are recommended for approval. The project complies

with all other applicable Bank policies.

Task Team Leader: Nejdet Al-Salihi (MNSRE)

J), 4 K[4Sector Director: Doris Koehn (MNSRE)

Country Director: Khalid Ikram (MNCEG)

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Annex 1: Project Design Summary

CAS Objectives: Sector Indicators: Sector/Country Reports: (from Goal to Bank1. Raising rural income through Farm household income increased Project supervision; M&E Mission)

agricultural production based on in areas covered by subsurface report on crop yields and Consistent with Bankefficient use of land and water drainage. production. Farm income mission of economicresources. surveys. development, with

emphasis on poverty2. Develop human resources Project supervision and mid- alleviation.

through provision of training (a) Number of staff trained. term review.and technical assistance. (b)Technical assistance provided.

Project Development Objective: Outcome/Impact Indicators: Project Reports: (from Objective toI. Increase efficiency of drainage (a) Water table lowered in project Project supervision; periodic Goal)

of about 0.8 million fed of areas by no higher than 1.0 m semi-annual progress reports Govt. is committed to theirrigated land. below ground; and mid-term review. long-term provision of

(b) Soil salinity reduced to below drainage for irrigated4 mmhos/cm. agricultural land and has

demonstrated this by itssupport in the past andinclusion of the project inits development plan.

2. Increasing agricultural About 400,000 farm families Project supervision; farmproduction and improving rural benefited as follows: income surveys of incrementalincome 25% benefited YR3 agriculture benefits of farm

40% benefited YR4 families.60% benefited YR580% benefited YR6

100% benefited YR7Output from each component: Output Indicators: Project Reports: (from Outputs toI. Timely evacuation of drainage Drainage area completed and Semi-annual progress reports Objective)

water to prevent the losses in Income Impact: and project supervision.crop yields resulting from (a) New subsurface drainageunreliable drainage with high (500,000 fed)water table. (b) Renewal of old and

malfunctioning subsurfacedrainage (300,000 fed).

(c) Deepening and remodeling Semi-annual progress reports &2. To strengthen M&E and O&M existing open drainage project supervisions

capability of EPADP. (365,000 fed).(d) Training and TA; staffweeks

of TA and training provided.Project Components EPADP semi-annual progress Timely availability ofSubsurface and Open Drains reports including M&E reports counterpart funds. This(a) Subsurface drainage (500,000 Bank supervision missions and has not been a problem

fed); Budget of US$247.0 million mid-term review. in the past six drainage(b) Renewal of malfunctioning utilized as agreed. projects.

subsurface drains (300,000fed);

(c) Remodeling of open drains(365,000 fed);

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F-- eaVhjyof Objectives KOYe d.n .e . Wonfto C and Critical:_____________ .ndIca t. .rs smptions

Supply of equipment & material Budget of US$19.9 million EPADP semi-annual progress No cost overrun duringfor O&M of open drains and utilized for purchase of equipment reports including M&E reports the projectsubsurface drains and equipment and material as agreed. implementation.for emergency pump stations Bank supervision mission and Adequate and timely

mid-term review. availability ofcounterpart funds. Thishas not been a problemin the past.

Institutional Support for EPADP Budget of US$9.8 million utilized EPADP semi-annual progress Timely availability of(a) Provision of equipment and for purchase of equipment and reports and Bank project counterpart funds. This

vehicles services as agreed. supervision. has not been a problem(b) Contractual services in the past.(c) Technical Assistance(d) Training (overseas and local)

Environmental Management Plan Budget of US$0.8 million utilizedas agreed.

(a) Establishment of Date established and staffing.Environmental Monitoring Unit Equipment provided. Semi-annual progress reports Timely availability of

(b) Provision of equipment and Monitoring Report and Bank supervision. counterpart funds.vehicles Specialized Input (SM)

(c) Water quality monitoring Numbers of staff trained and total(d) Technical Assistance time input(e) Training (Overseas and Local)(f) Environmental improvement Number of Compliance Action Semi-annual progress reports Timely availability of

resulting from addressing Plans (CAPs) implemented. and Bank supervision. counterpart funds.discharge of industrial anddomestic waste into selecteddrains. _

Social/Participatory Component Budget of US$ 1.0 million utilizedincluding two pilot schemes as agreed.(a) Organizing farmers at Branch Number of Branch level

level with awareness campaign associations established. Semi-annual progress reports(b) Provision of extension Equipment provided. and Bank supervision.

communication equipment(c) Technical assistance on Training of staff and numbers

organization and participatory trained on organization skills.approach

(d) Development and reproductionof awareness campaignmaterial Number of workshops held and

(e) Local training including number and mix of attendees.beneficiaries awareness Legal legislation prepared by theworkshops Water Boards Project.

(f) Legal framework to establishintegrated irrigation anddrainage associations at thebranch level.

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ANNEX 2: PROJECT DESCRIPTION

A. Introduction

1. The Bank Group's involvement with drainage in Egypt was initiated in December 1970 under theNile Delta Drainage I Project (Cr. 181- UAR for US$26 million). That project, the first IDA operation inthe agriculture sector, covered the improvement of drainage on 950,000 fed. Subsequently, five moreprojects were approved for drainage implementation: the Upper Egypt I (Cr. 393-UAR for US$36million), the Upper Egypt II (Credit/Loan 637/1285-EGT) for US$50 million), the Nile Delta n(Credit/Loan 719/1439/40/EGT for US$66 million), Drainage V Project (Ln. 1237-EGT for US$63million) and the NDP I (Cr. 2313/Ln. 3417-EGT for US$120 million). In total, IDA has allocatedUS$204 million for the drainage program and the Bank US$157 million. The total area covered by theBank Group supported projects is 3.32 million fed for open drains, and 3.21 fed for pipe field drains. Inaddition, these projects provided for the construction of 23 new pump stations and rehabilitation of twoexisting stations.

2. The IDA/Bank participation in the drainage program has helped attract the support of otherdonors, such as USAID (US$30 million for the Upper Egypt II Project) and the Federal Republic ofGernany (US$24 million for the Nile Delta II Project, and US$32.0 million for the NDP 1). The Dutchbilateral program has contributed over US$12 million for technical assistance and for establishing asubsurface drainage project on 44,000 fed. The African Development Bank/Fund contributed a total ofabout US$39 million for the Drainage V Project, US$29 million for the rehabilitation of themalfunctioning drainage systems on 186,000 fed. The Islamic Development Bank has also contributedUS$11 million for new construction of subsurface systems on 75,000 feddans.

B. Project Description

By Components:

Project Component 1 - US$147.00 million (Base Cost)Provision of subsurface drainage for about 390,000 fed. in the old cultivated lands and about 110,000 fed.in the reclaimed lands, including 10,000 fed of trenchless drains.

Project Component 2 - US$40.69 million (Base Cost)Renewal and rehabilitation of old malfunctioning subsurface drainage on about 300,000 fed. of areasalready provided with earlier types of drainage systems.

Project Component 3 - US$14.77 million (Base Cost)Deepening and remodeling of open surface drains on about 365,000 fed. mostly in the project areas.

Project Component 4 - US$17.50 ' miilion (Base Cost)Provision of PVC/PE powder for transitional period, emergency pumping equipment for the regionalemergency centers, subsurface and open drain O&M equipment, miscellaneous equipment, vehicles andspare parts for the drainage program.

1/ Note this base cost does not include cost of PVC/PE powder and raw materials for the two-year transition period after effectiveness (US$22.5 mzillion base cost and US$26.5

million total cost).

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Project Component 5 - US$10.43 million (Base Cost). Institutional support for EPADP, such as: (i)Technical Assistance and Training to assist EPADP and the Water Boards Project to establish a pilotscheme for integrating irrigation and drainage user's associations in the two Governorates of Kafr ElSheikh and Beheira covering areas not exceeding 2,000-3,000 fed each; (ii) Technical Assistance andTraining in support of the Environmental Management Plan; (iii) support for farmer's outreach andparticipatory activities; and (iv) supply of equipment, vehicles, technical assistance and training toEPADP (M&E and O&M of drainage system).

C. Detailed Description of Each Component

Subsurface Drainage covering 500,000 feddans area

1. Under this component, the following areas will be provided with new subsurface drainage which isdetailed in Tables 1 and 2 and summarized below:

Region Area in Feddans(and Co-financiers) *

Old Cultivated Old-New Reclaimed TotalLands Lands

East Delta (IBRD) 85,000 19,000 104,000Middle Delta (KfW) 95,000 -- 95,000West Delta (EIB) 93,000 60,000 153,000Middle Egypt (IBRD/EIB) 74,000 16,000 90,000Upper Egypt (KfW/IBRD) 43,000 15,000 58,000

TOTAL I 390000 i 11.00Q0 500.000

* Note: Based on parallel financing of project activities.

Renewal and Rehabilitation of old malfunctioning subsurface drainage covering 300,000 feddans area.

2. Under this component, the subsurface drains will be renewed in the following areas (Table 2 andsummarized below):

Regions Area in Feddans Source of Co-financingEast Delta 70,000 IBRDMiddle Delta 80,000 KfWWest Delta 25,000 EIBMiddle Egypt 65,000 IBRD/EIBUpper Egypt 60.000 KfW/IBRDTotal 300,000

Deepening and Remodeling of existing open surface drains covering 365,000 feddans area:

3. Under this component, following areas open surface drains, main and secondary will be deepenedand remodeled to receive subsurface drainage effluent as detailed in Table 3 and summarizes below:

Regions Area in Feddans Source of Co-financingEast Delta 80,000 IBRDMiddle Delta 80,000 KfWWest Delta 78,000 EIBMiddle Egypt 85,000 IBRD/EIBUpper Egypt 42 000 KfW/IBRDTotal 365,000

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Pilot scheme for establishing integrated water and drainage user's associations covering about 5,000feddans.

4. Currently, water user's associations are being established under the ongoing hrrigationImprovement Project (Ln. 3832/Cr. 2672-EGT) in Kafr El Sheikh and Beheira Govemorates. There is apilot program to extend the user's group to a federation covering secondary canals. It will be desirable tointegrate these federations to cover the drainage facilities within the service boundaries of each secondarycanal. The pilot program will initially focus on two areas about 2,000-3,000 feddans service area each.

Institutional Support to EPADP

5. The project will provide support to EPADP through provision of utility vehicles; equipment forfield investigations, computers, GIS equipment, laboratory and office equipment; technical assistance forsuch specialized studies as MIS, M&E, GIS, integrated water and drainage users associations,privatization of pipe manufacturing facilities and overseas as well as local training for EPADP staff. Theproject will provide limited support to DRI in their activities related to the project for monitoring of waterquality and associated studies related to Environmental Action Plans through provisions similar toEPADP. Additional equipment required for the maintenance of open drains and subsurface drains willalso be procured.

New Pumping Equipment for Emergency Centers in each of five regions.

6. Under this component, provision is made for electro-mechanical equipment for emergencycenters in each of the five regions with mobile units of 0.5 m3/sec capacity each.

Environmental Management Plan

7. The Environmental Management Plan (EMP) has been prepared by EPADP's EnvironmentalUnit supported by consultants. The EMP supports the environmental unit which would increaseEPADP's enforcement capacity and preparation and implementation of local environmental mitigationplans, in selected priority areas. Provision is made for all of the environmental aspects to be contracted toDRI under the technical assistance components. The environmental unit which has been established inEPADP will coordinate the environmental activities with other agencies, provide training to EPADP staffin environmental matters and review each area of implementation for the environmental concems.

Technical Assistance and Training

8. Technical assistance will cover specialized studies and input for the MIS and M&E activitiesinitiated under the ongoing National Drainage Project, formulation of procedures and a detailed programfor establishing two pilot areas of 2,000-3,000 feddans each for integrating irrigation and drainage wateruser's association, and other miscellaneous studies including a follow-on study on privatization and/orcommercialization of pipe manufacturing facilities. Training center activities at Tanta developed underDutch bilateral assistance will continue as a regular activity of EPADP. The technical assistance andtraining will be covered by various sources including the German (KfW) and Netherlands bilateralassistance and ongoing Canadian-Funded NAWQAM Project.

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Annex 2, Table 1

New Subsurface Drainage - Old LandsAreas In Thousand Feddans

DESCRIPTION OF CATCHMENT RELATED i AREA IN THOUSAND FEDDANS FORTO PUMPING STATIONS VARIOUS YEARS

2001 2002 2003 2004 2005 2006 Sub-TotalEast Delta Region

Bahr El Bakar Pumping Station - - 3 3 10 9 25Farascor Pumping Station - 4 5 6 - - 15Matariya Pumping Station - 4 5 5 6 20El Wadi Pumping Station - 5 5 5 - - 15Gabal Maryam Pumping Station 2 3 - - - - 5Shandoura Pumping Station 5 - - - - - 5Subtotal - East Delta 7 16 18 19 16 9 85Middle Delta Region

Third No. 8 Lower Pumping Station - - - 2 2.8 - 4.8First No. 8 Pumping Station 4 4 - - - - 8.0Zaglaul No. 1 Punping Station 5 6 7 - - - 18Benya & Akhwar - - - - - 4 4Abu el Koca - 3 2 - - 5Kafr El Atrash - 3 - - - - 3Ghoneim - 3 - - - - 3Kafr El Sawalem - - - 3 - - 3El Sabrya - - - 2 4 - 6No. 3 Pumping Station - - 4 4 - - 8No. 2 Pumping StationFirst and Second Shekeli - - - - - 5 5Ahmadiya Demlash - - - 2 3.2 - 5.2El-Zeiny Pumping Station - - 4 3 3 - 10Moheib & ZafaranyKom El Arab & Kom El Kasb - - 5 4 3 - 12Subtotal Middle Delta 9 19 22 20 16 9 95West Delta Region

El Tabiya Pumping Station - - 2 6.2 5.5 4 17.7El Bosely Pumping Station - - 6 2.2 - - 8.2Ibies Pumping Station 3 5 - - - - 8Al Kalaa Pumping Station - - 4 5 - - 9Edko Pumping Station 3.5 5.2 7.1 3.8 - - 19.6Hares Pumping Station - - - - 7.0 5.5 12.5Sieid Eisa Pumping Station 4 4 - - - - 8Al Hadien Pumping Station 4 3 - - - - 7Unidentified Areas - - - - 1 2 3Subtotal West Delta 14.5 17.2 19.1 1 7.2 13.5 11.5 93.0

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DESCRIPTION OF CATCHNMINT RIATWED { ~ NTOSN EDN OTO PUMPING STATIONS VAIOUS YEARS O

2001 2002 2100 2004 2005 2006 Sub-talMiddle Egypt Region

Ibrahimiya Pumping Station 3 2 - - - - 5.0East Nile Pumping Station - 3 3 - - - 6.0Makosa & Al Sawra Pumping Stations - 4 4 - - - 8El Badraman Pumping Station - - - - - 5 5El Sheik Zeyad Pumping Station - - - 3 3 - 6Aslaan Pumping Station 3 5 - - - - 8Tersa Pumping Station - 2 5 - - 7Senoufar Pumping Station - - - 3 4 - 7Etifih Pumping Station 3 3 - 6El Tabien & El Samt Pumping Station - 5 2 3 - 10Hawamdiya Pumping Station - - - 3 3 - 6Subtotal Middle Egypt 6 16 17 14 16 5 74Upper Egypt Region

Salaain A&B Pumping Stations 3 3 2 - - - 8El Bayadiya Pumping Station - - - - - 3 32nd Gabal A&B Pumping Stations - 5 3 - - - 8Tahta A Pumping Stations - - 2 3 - - 5El Manshie Pumping Station - - - 2 3 - 5El Hola Pumping Station - - - - - 2 2El Deir Pumping Station - - - - - - -El Rezka Pumping Station - - 3 - - - 3Al-bayadiya & El Redeiysia Pumping Stations - - - 3.5 2.5 - 6Unidentified Areas - - - - 3 - 3Subtotal UpperEgypt 3 8 10 8.5 8.5 5 43Total Surface (Old) _New Sub-Drainage Lands 39.5 76.2 86.1 78.7 70 67 390

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Annex 2, Table 2

New Subsurface Drainage - Old New Lands AndRenewal of Sub-surface Drains - Areas in Thousand Feddans

DESCRIPTION OF CATCHMENT AREA IN THOUSAND FEDDANS REMARKSRELATED TO PUMPING STATIONS .

2001 2002 2003 20 202005 2006 Sub-.___ Total , _;,- _;

East Delta Region NEW SUB-SURFA CE DRAINA GE - OLD NEW LANDS

- El Esteslah 4 8 7 = 7 19West Delta Region- 1t & 2nd El Bustan 2.5 4 10 9 8 6.5 40- Al Tahrir Al Ganouby 3 3 5 5 2 1 20Subtotal West Delta 5.5 7 15 14 10 8.5 60Middle Egypt Region- El Katei Drain 2 1 3- El Khonoug 2 1 3- Kamadir 5 5 10Subtotal Middle Egypt 2 3 6 5 - 16Upper Egypt Region- Thomas Afia 2 3 5 5 15

RENEWAL OF SUB-SURFACE DRAINSEast Delta Region- Diarb Negm 2 2 4- Safour 3 3 2 8- Shoubra Sourah & 2 - 2 3 5- El Azizya,Meit Assam,Mangoul &Meit Assem 3 5 2 10- Aghour 1&2, Farsis 2 4 4 10- El Sanafien & Thala 1&2 2 5 4 11- El Kanayat & El Sods 1,2,&3 3 5 2 10- Akrash 7 Mobasher Bahr Saft 2 3 5- Kofour Negm 2 5 7Subtotal East Delta Region 5 15 19 12 10 9 70Middle Delta Region- Blay & Al Santa 1&2 2 2.0 6.0- Sheirba Malakn & El Hayatem 2 2.0 6.0- Mehallet Rauh 3& 4 3 4.0- Tatay, Samnaty & Toukh 2 3.0 6.0- Dahtoura 3.0 1.6 6.6- Shouny El Thania 1.0 3.0- El Meselha - 1.7 2.0 3.7- Sugar - 1.7 1.0 2.7- El Khadrawiya, El Thania 2.0 2.0 2.8 6.8- El Atf El Thania - - 2.0 4.20 6.2- Denshaway 1,3,4& 5 4.0 5.0 4.5 2.4 5.10 21.0- Samatey, El Etwa & Kotour 2.0 2.0 2.3 1.7 8.0Subtotal Middle Delta 7.0 16.0 20.7 13.5 12.5 11.0 80.0

-27 -

- Kamhah 2.35 2.35- Kom Hamada Al Thalthah 2.65 1.95 -- 4.60- El Tanfizy -- 2.05 3.5 5.55- Al Khandak El Ghardi Shayour 3.0 1.0 4.0- Gabares el Gharby -- 0.5 1.0 3.5 5.0- El Ola -- -- -- 3.0 0.5 3.50Subtotal West Delta 5.0 7.0 5.0 4.0 4.0 25.0Middle Egypt Region- Al Ashraf el Ola 1.5 4.5 -- -- -- 6.0- Beni Saleh Al Thaltha -- -- 2.0 2.0 2.0 6.0- Kom Engasha 3.0 2.0 -- -- 5.0- Shark, Abou Gabai -- 2.0 3.0 5.0- Kola, Ahwa & Khoulos 1.5 2.5 -- -- 4.0- Domoshia -- -- 4.0 3.0 7.0- El Kahamana, Mokhtar & El Dwalta 2.0 2.0 -- 4.0- South Ehnasia -- -- 2.0 2.0- Baha El Rabaa & Shoueik 2.0 2.0 -- 4.0- El Tagen Al Thaltha -- 2.0 2.0 2.0 6.0- Gourief 2.0 3.0 5.0- El Rous El Ola 2.0 3.0 5.0- El Rous El Thania -- 0.5 3.5Subtotal Middle Egypt 3.0 14.0 16.0 14.0 5.5 65.0Upper Egypt Region

- El Basioun & Hoshat El Delga 2.0 2.0 -- -- -- 4.0- El Mehrouka -- 2.0 3.0 -- -- 5.0- West El Kosia El Ola -- -- -- 3.5 1.5 5.0- Souhag El Ola 1.5 2.5 4.0- Gerga El Ola -- -- -- 3.0 3.0- El Salaa 2.0 2.0 4.0- Naga Hammadi El Ola El Gharbia -- -- 3.0 3.0- Naga Hammadi El Sharkia 2.0 2.0- Kaft El Ola 3.0 3.0- El Matane 2.0 3.0 -- 5.0

- Armant El Mohiet 2.0 2.0 -- -- 4.0

- Hegazi El Thaletha -- -- 2.5 3.5 6.0

- Northwest Fatira 2.0 2.0 -- 4.0

- Draw & Ekleet 1.8 3.2 5.0

- South Kom Ombo 12.3 14.7 3.0 3.0

Subtotal Upper Egypt 5.5 64.3 74.7 15.0 12.5 - 60.0

Total Renewal of Sub-Surface Drains 25.5 58.5 51.5 25.5 300.0

- 28 -

Annex 2, Table 3

Open Drains RemodelingAreas In Thousand Feddans

.RIO AC_ AREA IN THOUSAND FE}DDANS _DESCRIPTFION OFCATCHMENT 2001 2002 2003 2004 200)5 2006 Sub-Total I REMARKSRELATED TO PUMPING STATIONS _ _ _

East Delta Region

- Farascor 3 7 7 3 20-Matariya 2 4 7 2 15-Bahr El Bakar 3 8 4 15-El Dabaa & El Maraeiya 5 7 8 20-Gabal Maryann& Shandorra 5 5 10Subtotal East Delta 7 14 17 20 15 7 80Middle Delta Region- Hafir Shehab El Din 5 7.5 15 10 2.5 40- No. 3 Pumping Station 5 5 7 6 23- 3rd No. 8 Lower Pumping Station 2.5 7.5 10- Moheib & Zafarany 2.5 4.5 7Subtotal Middle Delta 7.5 17 20 17 11 7.5 80West Delta Region- El Bosely 6 5 4 15- Ibies 5 5 10- Al Kalaa 8 6 14- Hares 9.5 5.5 15- El Manshia 1,2,3,4 3.0 5.0 8- Al Masraf El Gharbi 2.5 5.5 8- Unidentified Areas 4 4 8Subtotal West Delta 5.5 10.5 23 20 13.5 5.5 78Middle Egypt Region- Eastern Abou Heiba 5.0 5- Telma, El Sheikh fadel & El Nasirya 8 8- Makousa & Al Sawra 3.5 2.5 6- Delga 5 5-El Sheik Zeyad 6 6- Kalik 4.5 4 3.5 12- Tersa 5 2 7- Senoufar 2 7 9- El Brombel 5 5- Etfih 4 2.0 6- El-Badrashein 5 . 5-Hawamdiya A El Manawat 2.5 7 1.5 11Subtotal Middle Egypt 8.5 15 20 15 18 8.5 85Upper Egypt Region- Abou Teig 4 4 8- El Marashda 4 5 3 12-El Manshah 3 2 5Salaam A&B 2 8 10

- Unidentified Areas 2 3 2 7Subtotal Upper Egypt 2 12 11 10 5 2 42Total Open Drains Remodeling 31U 69 UI I 72 62 .iL5 305

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Annex 2, Table 4Yearly Implementation for Various Types

AREA MWL TE1) IN" 00 .E XANSTY-PE RGO A

______________________ 2001 2002 2Q03 2004 ~200 5 2006 _ _ _ _ _

Old Cultivated Areas East Delta 7 16 18 19 16 9 85.0Middle Delta 9 19 22 20 16 9 95.0West Delta 14.5 17.2 19U1 17.2 13.5 11.5 93.0SubiotalMDelta 30.5 52Ž2 'I 59.1- 56.2 4.55 29.5 2730Middle Egypt 5 16.0 17.0 14.0 16.0 5.0 74.0Upper Egypt 3 8.0 10.0 8.5 8.5 5.0 43.0

.. _________________ _ . .Subtotal 39.5 76.2 86.1 78.7 70.0 39.5 390.0Old New Reclaimed Areas East Delta 4.0 8.0 7.0 19.0

Middle DeltaWest Delta 5.5 7.0 15.0 14.0 10.0 8.5 60.00Subtotal Delta 9.5 15.0 22.0 14.0 10.0 8.5 79.00Middle Egypt 2.0 3.0 6.0 5.0 16.0Upper Egypt 2.0 3.0 5.0 5.0 15.0Subtotal 9.5 19.0 28.0 25.0 20.0 8.5 110.0

Rehabilitation Areas East Delta 5.0 15.0 19.0 12.0 10.0 9.0 70.0Middle Delta 7.0 16.0 20.0 13.5 12.5 11.0 80.0West Delta 5.0 7.0 5.0 4.0 4.0 25.0Subtotal Delta 17.0 38.0 44.0 29.5 26.5 20.00 175.0Middle Egypt 3.0 14.0 16.0 14.0 12.5 5.5 65.0Upper Egypt 5.5 12.3 14.7 15.0 12.5 -- 60.0Subtotal 25.5 64.3 74.7 58.5 51.5 25.5 300.0

Annex 2, Table 5

Annual Implementation Program Areas in Thousand Feddans

IMPEMETATONYEAR ___

ITEM : 00 200 200 200 205 20OA

Sub-surface Drainage- Old Lands 39.5 76.2 86.1 78.7 70 39.5 390- Old-New Lands 9.5 19 28 25 20 8.5 110- Renewal 25.5 64.3 74.7 58.5 51.5 25.5 300Subtotal 74.5 159.5 188.8 162.2 141.5 73.5 800Open Drains- Remodeling 30.5 69 101 72 62 30.5 365Subtotal 30.5 69 101 72 62 30.5 365

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Annex 2, Table 6

UNIT RATES IN L.E. INDEXED TO END 1999 LEVELFOREIGN EXCHANGE PERCENTAGE AND INFLATION RATES

RATES IN LE USED INFLATION UNIT RATE IN LEIN PREPARATION FACTOR FOR TO BE USED (1999)

ITEM REPORT (1998) 1999RENMARKS

._______________ Unit RateCivil Works - Open Drains

Excav. < 3m width 2.00/m3 10 2.20Excav. > 3m width 1.50 m3 10 1.65 Forei n InflationSpreading & shaping 3/m 10 3.30 1999 1.32- Structures 2000 2.56-Bridges 80,000/each 25 100,000 2001-04 2.68- Siphons 20,000/each 25 25,000 2005-09 2.56- Aquiducts 12,000/each 25 12,000

RecurrentOpen Drains Maintenance 4.9/fed. 20 5.80

Sub-Surface Drainage Local InflationPipe Manufacturing including 1999 6.50Material- P.E. Collectors 14.57/m 5 15.30 2000 6.40- PVC Laterals w/o Envelope 2.57/m 5 2.700 2001 6.10-PVC Laterals w/ Envelope 3.81/m 5 4.005 2002-06 6.00Transportation & Installation- P.E. Collectors 10.9/m 10 12- PVC Laterals 2.0/m 10 2.2- RCC Pipes incl. Supply 501m 10 55Structures LS 19/fed 5 20/fed- Centers Buildings 152,400/each 5 160,000- Subcenters Buildings 71,400/each 5 75,000- Crop Compensation 91/fed, 100/fed 10 100/fedRecurrent-Pipe Drain 5.8/fed 5 6.4/fed- Bldg. Maintenance 2,800/each 5 3,000/each

- 31 -

Annex 2, Table 7

Assumed Average Quantities Per Feddan for Various Types of D elopmentsNew Subsurface Remodeling

Item of Works Unit Drainage Renewal Open DrainsOld- Old

A. Pipes Manufacturing NewPE Collectors M 12.7 -11.0 5.1PVC Laterals w/o Envelop M 68 - 17 27.5PVC Laterals with Envelop M 39 - 72 12.6

B. Transport & InstallationPE Collectors M 12.7- 11.0 5.1PVC Laterals M 97- 89 40.1RCC Pipes (incl. Supply) M 1.0- 1.0 0.41

C. Structures No 1.0- 1.0 1.0

D. BuildingsCenters No/000 fed 0.01 one every

300,000 fed

Subcenters No/000 fed 0.05 one every150,000 fed

E. Crop Comnpensation Fed 1.0 1.0

RECURRENTA. Pipe Drains Fed 1.0B. Maintenance Buildings No/000 fed 0.06

OPEN DRAINSREMODELLINGExcavation < 3 m wide m3/fed 15.5Excavation > 3 m wide m3/fed 9.85Spreading & Shapping km2 /fed 0.92

Structures - Bridges No/fed One per 2,185 fed 0.46(Costab) Table200

Structures - Siphons No/fed One per 26,070 0.038fed (Costab)Table 200

Structures - Aquaduct No/fed One per 5,450 fed 0.184(Costab) Table200

Land Acquisition Fed (com. Area) 1.0

RecurrentOpen Drains km/fed 0.001

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Annex 2, Table 8

Assumed Foreign Exchange Percentage for Various Activities

Foreign Physical Foreign PhysicalComponent Activity Exchange Contingency 1 Component Activity Exchange Contingency

r_______: ____ _: ___ 1(% ) (% )

SUBSURFACE DRAINAGE Maintenance EquipmentFor Subsurface Drainage

Old Lands, OldNew Lands & Renewal Drain Flushing machine 85- Pipe Manufacturing PVC & PE 60 5 Other Equipment 85- Transport & Installation 60 5- Structures 50 5 Institutional Support- Maintenance Buildings 30 -

- Crop Compensation - - Vehicles 85 -

- Recurrent Costs - Motorcycles 85 -

- Computers, GIS Equipment 85 -

Open Drains remodeling - Expatriate Staff 100 -- Excavation Work 40 10 - Offshore Training 100 0-10- Structures 50 5 - Local Training - 0-10- Land Acquision - 10- Recurrent Cost - 10 Environmental Management- Heavy Machinery 85 -- Plan- Spare Parts & Misc. including 85 --

attachments - Miscellaneous Equipment 85 -Overseas Training 100 10 - Contractual Services 85 10Local Trainine - 10 - Vehicles 85 10

- Computers 85- Offshore Training 100- Local Training 100 0-10

Pumping StationsEquipment 85

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Annex 3: Estimated Project Costs

F : : 7 I 0 tLocal Foreign - Totaii:Project Cost By Component US $ million

Total Baseline Cost 108.782 127.693 236.475

Physical Contingencies 4.415 5.699 10.114Price Contingencies 22.619 9.237 31.856

Total Project Costs 135.816 142.628 278.445

Loca Frign0 ToitalPlrpet Cost b Category us s rof-Uo

Goods 3.886 20.949 24.835Works 91.804 118.342 210.146Services 1.438 2.693 4.131Training 1.054 0.644 1.698Other 37.631 -- 37.631

Total Project Costs 135.813 142.628 278.441

A. Estimated Cost

1. Project Costs: The total project cost is estimated at LE 946.611 million (US$278.4 millionequivalent), of which LE 484.933 million (US$142.628 million equivalent) or 51.22 percent, is foreignexchange. Project costs were based on unit rates from recent contracts under the ongoing NationalDrainage Project (Ln. 3417/Cr. 2313-EGT) with some adjustments for variations in unit prices. EPADPpays custom duties generally ranging from 10 to 40 percent for imported equipment and material and 80percent custom duty on vehicles. In addition to the custom duties, there is 10 percent sales tax on the unitrate cost of imported items plus custom duties. It has been a practice in previous projects, not to includecustom duties in the unit rates, and only to consider sales tax, so for this reason, custom duties are notreflected in the unit rates. All costs are based on prices as of June 2000 and physical contingency factorswere based on the degree of preparation and firmness of details available. These have been taken as fivepercent for subsurface drainage works, 10 percent for open drains remodeling, overseas and local training.A provision of miscellaneous unforeseen expenses has been incorporated in base costs for the technicalassistance, equipment for open drains, crop compensation, spare parts and institutional support toEPADP, hence, no physical contingency has been used. Cost estimates for each component withquantities unit rates and base cost are given in Annex 7, Tables 5 to 18. Costs due to expected priceincreases over the implementation period of six years amount to about 13.38 percent of the base cost plusphysical contingencies, assuming the following annual inflation rates.

I Fiscal Year I 2000 i 2001 2002 2003 2004 2005 2006 2007

Foreign 2.00 2.10 2.50 2.50 2.50 2.50 2.50 2.50Local 6.40 6.40 6.30 6.00 6.00 6.00 6.00 6.00

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B. Financing Plan

2. The Government has, in addition to the World Bank, requested assistance from the FederalRepublic of Germany, the Netherlands Government and the EIB. The KfW is to provide DM 80 million(equivalent to about US$40 million) of which DM 2.0 million may qualify as a grant coveringexpenditures related to technical assistance and training directly related to project implementation. Theloan portion of KfW financing would finance the foreign exchange cost and part of local cost for civilworks, equipment and material and a part of technical assistance and training for about DM 1.0 millionnot covered under the grant. Current allocation of Dutch bilateral assistance will cover the cost oftraining center at Tanta, other technical assistance and training not covered by KfW grant, particularlytechnical assistance and training for the environmental unit, Water Board activities for two pilot schemesexpenses and support to DRI. Netherlands assistance will be about Fl 7.0 million (US$3.6 millionequivalent). The co-financing will be on the basis of parallel financing. Assurances were obtained atnegotiations that GOE would confirm the cofinancing arrangements for the project by December 31,2000. The Government has also requested the EIB to participate in the co-financing which is currentlyunder discussion. Initial indications are that the EIB will finance the equivalent of US$50 million ofproject costs.

3. The proposed Bank Loan of US$50 million would finance foreign costs for civil works, equipmentand materials, pumping station equipment and installation, vehicles and equipment provided to EPADPand DRI as institutional support in addition to costs associated with the Environmental Management Planand social participatory component to two pilot schemes including technical assistance and training whichis not covered by co-financing/other financing in the sector or by Government. The Government willfinance part of local costs including civil works, recurrent cost, construction of centers and subcenters,crop compensation, land acquisition and taxes to be paid on the imported equipment and materials. Thefollowing is the tentative financing plans for various components of the project.

Financiers Financing Plan (US$ Million)Local Foreign Total

World Bank --- 50.0 50.0Kf(W (Germany) Loan 0.4 39.6 40.0Netherlands Bilateral Assistance (Grant) 0.6 3.0 3.6European Investment Bank (EIB) --- 50.0 50.0Government of Egypt 134.8 --- 134.8

Total 135.8 1426 2ZT40Q

- 35 -

Annex 4: Economic Analysis

Introduction

1. The proposed project would have two beneficial impacts: (i) increase the agricultural productivityof irrigated land by improving drainage conditions through evacuation of excess irrigation water andconveyance through subsurface drains into collector and open drains; and (ii) avoid yield or productionlosses on this land, which would result if waterlogging and soil salinity problems were to persist.Therefore, without the proposed project, crop yields would progressively decline from their current levelscontributing to substantially reduced incomes for the rural population.

Project Benefits

2. The benefits from the proposed project were calculated by aggregating from a one feddan modelover a total gross project area of 0.80 million feddans (of which the net effective area is 0.72 millionfeddans) of irrigated land for the three alternative areas of Egypt under the proposed project. These areasare the Delta and the Nile Valley (Middle Egypt, Upper Egypt). It should be noted that the projectagricultural benefits have been calculated on the basis of the assumption that the net effective agriculturalarea benefiting from subsurface drainage under the project is 90% of the gross project area of 0.8 millionfeddans (i.e., 0.72 million feddans); 10% of this area is assumed to be used for canals, open drains, roads,paths and villages. Alternative crop budgets representing cropping patterns in these three regions areutilized to determine incremental benefits per feddan from improved subsurface drainage. Representativecrop budgets utilized for each region are available in project files. Since on the average significantdifferences in crop yields exist between the Delta and Nile Valley, this analysis makes conservativeassumptions and uses differential average yields by region. Apart from average yield differences byregion, the only regional differences considered in the crop budgets are the cropping patterns, whichidentify the Delta as a rice growing area and Upper Egypt as a sugar cane growing area. Croppingintensities are assumed to be 200% in both the Delta and Nile Valley.

Production Impacts

3. The benefits from the project were computed for 14 major crops (11 in the Delta, 13 in MiddleEgypt and 11 in Upper Egypt. Middle Egypt has 13 of these crops; two crops (rice and sugar cane) areonly grown in the Delta and Upper Egypt respectively. Benefits have been conservatively calculated byexcluding comnmodities grown in low volume in the proposed project area.

The incremental yields for the crops grown are surmmarized in the table below:

Incremental Yields by CropCrop Yield Increase (%)

Barley 10Maize 9Rice 12Sorghum 7Wheat 15Broadbeans 15Soyabeans 6Berseem (L) 15Berseem (S) 15Sugarcane 15Vegetable (W) 15Vegetable (S) 15Seed Cotton 20Citrus 15

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4. The statistics utilized above are based on monitoring data obtained from areas with moderate(average) drainage problems. Some 5 crops have been recently monitored by the Monitoring andEvaluation Unit of EPADP over 3 consecutive years in 5 pilot areas. Three of these pilot areas are inTrouga Zone, Beheira Govemorate[Awwad, Safar, El-Maamal], and two of these areas are in EbshanZone, Kafr El-Sheikh Govemorate [Ebshan, El-Nashawy]) in the Delta region. The pilots involvedmonitoring the effects of lowering water table depth and reducing soil salinity as a result of field drainageon wheat, broadbeans, cotton, rice and maize. The data were collected before and after theimplementation of the subsurface drainage. For other crops, not monitored in the pilot areas, incrementalyields are based on previous data obtained from field trials and utilized under the first National DrainageProject. For conservative reasons, the incremental yield increase for rice was revised downwards to 12%to reflect a compromise between the highly conservative 10% average incremental yield obtained for ricein the Mashtul (Delta) pilot area monitoring between 1977-1986 and the higher 19% average incrementalyield for rice obtained in recent EPADP M&E Unit monitoring in the Delta region of the effects ofsubsurface drainage on rice.

Assumptions in the Analysis

5. Generally, it should be noted that crop yields are a function of several factors (including seed,fertilizer, technology and other inputs, as well as soil quality, cultural practices, and weather); therefore, itis difficult to separate the specific effects of drainage on crop yields unless one experiments and monitorstwo plots located side by side under the same farm management and controls for factors other thandrainage which may account for differential yields. Moreover, the effects of drainage on yields vary fordifferent crops because crops differ in terms of their tolerance levels for salinity and for excessivemoisture in the root zone. Nevertheless, in field trials on plots close to each other and under the samefarm management and controlling for certain agricultural inputs, it has been possible to monitor theeffects of subsurface drainage on crop yields. These findings are, of course, indicative, and should not betaken as absolute measures.

6. The following assumptions have been made in the analysis:

(a) Project Life. The benefits of the project are assumed to accrue over a period of 30 yearsconsistent with the assumed lifecycle of installed subsurface drainage systems and theflow of benefits from their installation.

(b) Benefits, Benefits Phasing and Build-Up. Since rehabilitation generally involvesrestoring areas drained by renewed laterals to their optimal state, it is assumed that thebenefits of rehabilitation are the same as that of new installation of field subsurfacedrainage. The build-up of benefits is related to the gradual implementation of thedrainage system. It is assumed that a two-year period is required to implement thesubsurface drainage contracts. Thus, year 1 is mainly for procurement of pipes forlaterals and equipment; year 2 is for installation of the drainage system; whereas in year3, benefits will begin to flow. The effects of reduced waterlogging on crop yields areassumed to be almost immediate (within 2 to 3 months after installation) whereas thatfrom reduced salinity would become more tangible by year 4 and beyond after theinstallation of field subsurface drainage. Annex 4, Table 2 (attached) presents the benefitbuild-up for the project. The benefit build-up is based on Table 3, which shows the landarea by region per year installed with subsurface drainage. The sum of the areacompleted for all regions per year is divided by the total area in the entire drainageprogram under the proposed project to get the percentage of area completed withsubsurface drainage by year. This percentage of area completed annually is multiplied bythe incremental benefit (see Annex 4, Table 5) due to the project to get the benefit build-

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up. The project benefit stream or cash flow derived from the build-up in Annex 4,Table 2is presented in the final economic analysis in Annex 4,Table 1.

(c) Prices. Year 2000 constant economic prices have been assumed and utilized in thecalculation of benefits in the economic analysis. Economic prices for traded inputs andoutputs have been calculated using price forecasts in the World Bank publication,"Commodity Price Data," dated February 2000 and prepared by The Commodities Team,Development Prospects Group, The World Bank. These shadow prices are presented inTable 8 of this Annex. These prices for commodities have been adjusted to theirfarmgate border price equivalents, with appropriate adjustments for quality premia. Forexample, Egyptian cotton commands a premium in world markets; hence the qualitypremium for both Nile Delta long staple cotton and Nile Valley middle staple cotton havebeen appropriately factored in the price adjustments. All economic values have beenconverted to local currency at the official exchange rate of LE 3.4 to one U.S. dollar. Fornon-traded commodities, such as berseem, which are locally utilized, financial prices areassumed to represent economic prices.

(d) Costs. Project economic costs were derived from financial costs by excluding taxes,duties and subsidies using year 2000 constant prices, as reflected in prices quoted inexisting field drainage contracts. Recurrent costs for the O&M of the drainage systeminstalled during the project are assumed to continue after implementation until the end ofthe investment's useful life of 30 years and include a depreciation charge for themachinery used in O&M. Although investments in technical assistance and training forinstitution building apply indirectly to the country's drainage activities, for conservativereasons, all the related investment costs have been factored in. All incrementalinvestment costs are included in the cost stream. Annex 4, Table 6 presents a summaryof project economic costs, including costs related to physical contingencies, derived fromthe software, COSTAB calculations. This project cost stream is utilized in the finaleconomic analysis in Table 1.

Economic Rate of Return

Based on the foregoing assumptions, the estimated economic rate of return from installation ofsubsurface drainage under the project was calculated to be about 23 percent. Details of the calculationsare presented in Annex 4,Table 1. The net present value at the 12 percent discount rate (representing theopportunity cost of capital) is estimated at 607.1million LE (about US$178.5 million equivalent), whichrepresents the present value of the incremental national income generated by the investment.

Cost Benefit Analysis Summary

[Benefits and costs are measured in monetary terms](LE '000 at Year 2000 Constant Prices)

Present Value ofFlows

Economic AnalysisBenefits 1,188,897Costs 581,805Net Benefits 607,092IRR 23%

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Summary of Benefits and Costs

The present value of economic benefits are based on an aggregation utilizing a benefit build-up from aone feddan model over a total net effective area installed with subsurface drainage of 0.72 millionfeddans. The present value of economic costs are derived from financial costs, using year 2000 constantprices, excluding taxes, duties and subsidies.

Main Assumptions

* Benefit flows are assumed over a period of 30 years;* A 12% discount rate representing OCC is used to calculate the present value of benefits and costs.* All benefits and costs are expressed in year 2000 constant economic prices.

Sensitivity analysis/Switching values of critical items

The project economic rate of return (ERR) is sufficiently robust and not very sensitive to benefit delays,cost increases or benefit declines. Even with a benefit delay of two years, the project ERR is still robustat 17%. Also, with increases in costs of 10% or decreases in benefits of 10%, the ERR is still robust atabout 20%. In fact, it would take a delay of benefits by six years before the ERR declines to a level belowOCC. Also, assuming the same level of project costs, it would take benefits to decrease by more than50% before the ERR switches below the OCC. Alternatively, assuming the same level of project benefits,it would take project costs to about double before the ERR switches to the level of unacceptability.Annex 4, Tables 7(a), 7(b) and 7(c) present the sensitivity and switching value calculations respectively.

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Annex 4, Table 1

Delta and Nile ValleyEconomic, IRR, NPV, and B/C Ratio

Economic Costs and Benefits (L.E. 000 at 2000 Constant Prices)

Year All Project Total Costs Net cash flowBenefits*

0 0.0 0.0 0.02001 0.0 80,953.7 (80,953.7)2002 0.0 161,937.2 (161,937.2)2003 10,560.0 174,917.1 (164,357.1)2004 40,697.4 146,872.5 (106,175.2)2005 88,186.4 106,970.5 (18,784.1)2006 122,777.8 47,600.7 75,177.12007 169,532.4 16,243.4 153,289.02008 200,230.4 16,243.4 183,987.02009 230,320.0 16,243.4 214,076.62010 256,910.6 16,243.4 240,667.12011 276,081.2 17,055.6 259,025.62012 294,231.0 17,867.8 276,363.22013 298,777.3 18,679.9 280,097.32014 304,346.5 19,492.1 284,854.42015 304,346.5 20,304.3 284,042.22016 304,346.5 21,116.4 283,230.02017 304,346.5 21,928.6 282,417.82018 304,346.5 22,740.8 281,605.72019 304,346.5 23,553.0 280,793.52020 304,346.5 24,365.1 279,981.32021 304,346.5 25,177.3 279,169.22022 304,346.5 25,989.5 278,357.02023 304,346.5 26,801.6 277,544.82024 304,346.5 27,613.8 276,732.62025 304,346.5 28,426.0 275,920.52026 304,346.5 29,238.2 275,108.32027 304,346.5 30,050.3 274,296.12028 304,346.5 30,862.5 273,484.02029 304,346.5 31,674.7 272,671.82030 304,346.5 32,486.8 271,859.6

Internal Rate of Return 22.6

Net Present Value at 12 %: 607,092.7

Benefit Cost Ratio 2.0* It represents Delta and Nile Valley agricultural benefits.

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Annex 4, Table 2

Adjustment of Economic Benefit Buildup Pattern to Reflectthe Schedule of the Incremental Productive Area

% con % con % con % con % con % con % con AdjustedCmpl. cmpl. cmpl. cmpl. cmpl. Cmpl. cmpl. Annual

Year yr-I Ben yr-2 Ben yr-3 Ben yr-4 Ben yr-5 Ben Yr-6 Ben yr-7 Ben Benefit2001 9.31 0 0 0 0 0 0 0 0 0 0 0 0 0.02002 9.31 0 19.94 0 0 0 0 0 0 0 0 0 0 0.02003 9.31 113396 19.94 0 23.60 0 0 0 0 0 0 0 0 10,560.02004 9.31 194246 19.94 113396 23.60 0 20.28 0 0 0 0 0 0 40,697.42005 9.31 243729 19.94 194246 23.60 113396 20.28 0 17.69 0 0 0 0 88,186.42006 9.31 304346 19.94 243729 23.60 194246 20.28 113396 17.69 0 9.19 0 0 122,777.82007 9.31 304346 19.94 304346 23.60 243729 20.28 194246 17.69 113396 9.19 0 0.00 169,532.42008 9.31 304346 19.94 304346 23.60 304346 20.28 243729 17.69 194246 9.19 113396 0.00 200,230.42009 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 243729 9.19 194246 0.00 113396 230,320.02010 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 243729 0.00 194246 256,910.62011 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 243729 276,081.22012 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 294,231.02013 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 298,777.32014 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52015 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52016 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52017 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52018 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52019 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52020 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52021 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52022 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52023 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52024 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52025 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52026 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52027 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52028 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52029 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.52030 9.31 304346 19.94 304346 23.60 304346 20.28 304346 17.69 304346 9.19 304346 0.00 304346 304,346.5

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Annex 4, Table 3

Incremental Land Drained and Available for Production by Year (000 Feddans)Total Project Land

Y2001 Y2002 Y2003 Y2004 Y2005 Y2006

Yl Y2 Y3 Y4 Y5 Y6

67.05 143.55 169.92 145.98 127.35 66.15

CROP Delta --------------------------- 51.30 94.68 112.59 89.73 73.80 52.20

Middle E ------------ -- 8.10 28.80 32.40 30.60 30.15 9.45

LocationUpper E --------- 7.65 20.07 24.93 25.65 23.40 4.50

LandUse

Wheat 0.300 0.320 0.390 Delta 15.39 28.40 33.78 26.92 22.14 15.66

Nile Valley 5.58 17.04 20.09 19.80 18.77 4.78

Barley 0.010 0.010 0.000 Delta 0.51 0.95 1.13 0.90 0.74 0.52

Nile Valley 0.08 0.29 0.32 0.31 0.30 0.09

Broad bean 0.050 0.050 0.070 Delta 2.57 4.73 5.63 4.49 3.69 2.61

Nile Valley 0.94 2.84 3.37 3.33 3.15 0.79

Berseem(long) 0.280 0.270 0.110 Delta 14.36 26.51 31.53 25.12 20.66 14.62

Nile Valley 3.03 9.98 11.49 11.08 10.71 3.05

Berseem (short) 0.180 0.130 0.060 Delta 9.23 17.04 20.27 16.15 13.28 9.40

Nile Valley 1.51 4.95 5.71 5.52 5.32 1.50

Vegetables (W) 0.080 0.110 0.080 Delta 4.10 7.57 9.01 7.18 5.90 4.18

Nile Valley 1.50 4.77 5.56 5.42 5.19 1.40

Cotton 0.180 0.130 0.060 Delta 9.23 17.04 20.27 16.15 13.28 9.40

Nile Valley 1.51 4.95 5.71 5.52 5.32 1.50

Rice 0.340 0.000 0.000 Delta 17.44 32.19 38.28 30.51 25.09 17.75

Nile Valley 0.00 0.00 0.00 0.00 0.00 0.00

Maize (S) 0.280 0.430 0.310 Delta 14.36 26.51 31.53 25.12 20.66 14.62

Nile Valley 5.85 18.61 21.66 21.11 20.22 5.46

Sorghum 0.000 0.050 0.250 Delta 0.00 0.00 0.00 0.00 0.00 0.00

Nile Valley 2.32 6.46 7.85 7.94 7.36 1.60

Soybean 0.000 0.060 0.000 Delta 0.00 0.00 0.00 0.00 0.00 0.00

Nile Valley 0.49 1.73 1.94 1.84 1.81 0.57

Vegetables (S) 0.100 0.220 0.090 Delta 5.13 9.47 11.26 8.97 7.38 5.22

Nile Valley 2.47 8.14 9.37 9.04 8.74 2.48

Sugar cane 0.000 0.030 0.240 Delta 0.00 0.00 0.00 0.00 0.00 0.00

Nile Valley 2.08 5.68 6.96 7.07 6.52 1.36

Citrus 0.100 0.080 0.050 Delta 5.13 9.47 11.26 8.97 7.38 5.22

Nile Valley 1.03 3.31 3.84 3.73 3.58 0.98

Crop intensity 200% 200% 200%

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Annex 4, Table 4

New and Renewal Subsuwface Drainage in All Project Areas

Cropped Area, Gross Revenue, Pro.uction C3st, Net Revenue and Weighted Average/Fed in Project Area

at 2000 Constant Economic Prices

Cropped Area Cropping Intensity Gross Revenue Cost of Production Net Revenue per Feddan Incremental Total Net Revenue Incremental Weighted

Crop W/O P. With P. W/O P. With P. W/O P. W. P. W/O P. W. P. W/O P. W. P. Net Revenue W/O P. W. P. Net Benef. Average

Fed. Fed. % % LE/fed LE/fed I.E/fed LE/fed LE/fed LE/fed LE/fed LE (000) LE (000) LE (000) LE/fed

Wheat 228,348 228,348 31.7% 31.7% 1,651 1,899 766 797 886 1,102 216 202,205 251,566 49,360.5 68.6

Barley 6,138 6,138 0.9% 0.9% 1,065 1,172 549 566 516 606 90 3,168 3,720 551.3 0.8

Broad bean 38,124 38,124 5.3% 5.3% 1,463 1,682 681 707 781 975 193 29,793 37,163 7,369.8 10.2

Berseem (long) 182,151 182,151 25.3% 25.3% 1,163 1,338 464 475 700 863 164 127,433 157,240 29,807.4 41.4

Berseem (short) 109,881 109,881 15.3% 15.3% 533 613 218 186 314 390 76 34,552 42,863 8,311.1 11.5

Vegetables (W) 61,785 61,785 8.6% 8.6% 4,033 4,636 1,667 1,736 2,366 2,900 534 146,191 179,181 32,990.2 45.8

Cotton 109,881 109,881 15.3% 15.3% 2,274 2,729 1,541 1,608 733 1,120 388 80,512 123,100 42,587.7 59.1

Rice 161,262 161,262 22.4% 22.4% 2,122 2,377 975 1,003 1.147 1,374 227 185,038 221,635 36,597.9 50.8

Maize(S) 225,711 225,711 31.3% 31.3% 1,673 1,812 927 945 746 867 121 168,379 195,631 27,252.1 37,9

Sorghum 33,525 33,525 4.7% 4.7% 1,208 1,284 793 803 415 481 66 13,923 16,122 2,198.3 3.1

0 0

Soybean 8,370 8,370 1.2% 1.2% 1,323 1,415 798 811 525 604 79 4,391 5,055 663.4 0.9

Vegetables(S) 87,678 87,678 12.2%/o 12.2% 2,562 2,947 1,360 1,406 1,202 1,541 339 105,365 135,079 29,713.5 41.3

Citrus 63,900 63,900 8.9% 8.9% 3,405 3,914 1,944 1,974 1,460 1,940 480 93,303 123,997 30,694.9 42.6

Sugarcane 29,673 29,673 4.1% 4.1% 2,038 2,330 1,999 2,080 39 250 211 1,167 7,415 6,248.6 8.7

Total Project Net Incremental Benefits 304,346.5 422.7

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Annex 4, Table 5

New and Renewal Subsurface Drainage in all Project AreasAgricultural Benefits at 2000 Constant Prices

(LE 1,000 per year)

Without P. With ProjectCROP Benefits Benefits

Yrl | Yr2 Yr3 Yr4 Yr5 Yr6-30

Wheat 202,205 202,205 202,205 230,255 239,265 245,506 251,566Barley 3,168 3,168 3,168 3,312 3,456 3,600 3,720Broad Bean 29,793 29,793 29,793 32,715 34,386 36,215 37,163Berseem (Long) 127,433 127,433 127,433 137,278 143,190 147,170 157,240Berseem (Short) 34,552 34,552 34,552 37,306 38,948 41,116 42,863Vegetables (W) 146,191 146,191 146,191 157,427 164,869 170,123 179,181Cotton 80,512 80,512 80,512 103,674 108,219 115,647 123,100Rice 185,038 185,038 185,038 193,121 206,322 214,405 221,635Maize (S) 168,379 168,379 168,379 169,974 189,802 193,813 195,631Sorghum 13,923 13,923 13,923 13,923 13,923 13,923 16,122Soybean 4,391 4,391 4,391 4,472 4,472 4,553 5,055Vegetables (S) 105,365 105,365 105,365 118,214 124,411 128,433 135,079Citrus 93,303 93,303 93,303 105,171 116,227 121,462 123,997Sugar Cane 1,167 1,167 1,167 1,973 2,175 3,182 7,415Net Benefits 1,195,420 1,195,420 1,195,420 1,308,815 1,389,665 1,439,149 1,499,766Incremental Benefits 0 0 113,396 194,246 243,729 304,346

Annex 4, Table 6

Delta and Nile ValleyCalculation of Economic Costs (LE 1, 000 at Year 2000 Constant Prices)

Yrl Yr2 Yr3 Yr4 Yr5 Yr6

Investment Costs:

Base Financial Costs 88,203.8 177,187.9 193,671.1 161,984.8 120,463.7 54,654.0Plus: _

Physical Contingencies 3,626.4 7,988.6 8,178.7 6,935.0 5,204.4 2,454.1Minus:

Taxes 2,962.4 5,698.7 5,630.7 4,357.8 3,182.4 1,196.1Crop Compensation & 8,830.5 19,072.0 23,173.4 19,308.3 16,908.5 8,830.5

Land Acquisition 0.0 0.0 0.0 0.0 0.0 0.0Equal: I

Economic Investment Cost 80,037.4 160,405.9 173,045.7 145,253.8 105,577.1 47,081.5

Recurrent Costs: 916.3 1,531.4 1,871.4 1,618.7 1,393.3 519.2

Total Economic Project Costs 80,953.7 161,937.2 174,917.1 146,872.5 106,970.5 47,600.7

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Annex 4, Table 7 (a)

Delta and Nile Valley Project AreasSensitivity Analysis (IRR)

Economic Costs and Benefits (L.E. 000 at 2000 Constant Prices)

!NCREASE COSTS ANID DECREASE BENFFITS IN 5% INCREMENTS_ E_ =_ _I gwd I I II I II I22.6 21.7 20.8 19.9 18.9 18.0 16.9 15.8 14.7 13.5 12.3 10.9

21.8 20.9 20.0 19.1 18.2 17.2 16.2 15.2 14.0 12.9 11.7 10.321.0 20.2 19.3 18.4 17.5 16.5 15.5 14.5 13.4 12.3 11.1 9.8

20.3 19.5 18.6 17.7 16.8 15.9 14.9 13.9 12.8 11.7 10.5 9.219.6 18.8 18.0 17.1 16.2 15.3 14.3 13.3 12.3 11.2 10.0 8.7

18.9 18.2 17.3 16.5 15.6 14.7 13.8 12.8 11.8 10.7 9.5 8.218.3 17.6 16.8 15.9 15.1 14.2 13.3 12.3 11 3 10.2 9.0 7.8

17.8 17.0 16.2 15.4 14.5 13.7 12.8 11.8 10.8 9.7 8.6 7.317.2 16.5 15.7 14.9 14.0 13.2 12.3 11.3 10.3 9.3 8.1 6.9

16.7 16.0 15.2 14.4 13.6 12.7 11.8 10.9 9.9 8.8 7.7 6.516.2 15.5 14.7 13.9 13.1 12.3 11.4 10.5 9.5 8.4 7.3 6.1

15.7 15.0 14.3 13.5 12.7 11.9 11.0 10.1 9.1 8.0 6.9 5.715.3 14.6 13.8 13.1 12.3 111.4 10.6 9.7 8.7 7.7 6.6 5.3

14.9 14.2 13.4 12.7 11.9 11.1 10.2 9.3 8.3 7.3 6.2 5.014.4 13.7 13.0 12.3 11.5 10.7 9.8 8.9 8.0 7.0 5.9 4.6

14.0 13.4 12.6 11.9 11.1 10.3 9.5 8.6 7.6 6.6 5.5 4.313.7 13.0 12.3 11.5 10.8 10.0 9.1 8.3 7.3 6.3 5.2 4.0

13.3 12.6 11.9 11.2 10.4 9.6 8.8 7.9 7.0 6.0 4.9 3.712.9 12.3 11.6 10.9 10.1 9.3 8.5 7.6 6.7 5.7 4.6 3.4

12.6 11.9 11.3 10.5 9.8 9.0 8.2 7.3 6.4 5.4 4.3 3.112.3 11.6 10.9 10.2 9.5 8.7 7.9 7.0 6.1 5.1 4.0 2.8_ 12.0 11.3 10.6 9.9 9.2 8.4 7.6 6.7 5.8 4.8 3.7 2.5

11.0 10.3 9.6 8.9 8.1 7.3 6.4 5.5 4.5 3.4 2.2

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Annex 4, Table 7 (b)

Delta and Nile Valley Project AreasDelay in Agricultural Benefits 2 YearsEconomic (IRR, NPV, and B/C Ratio

Economic Costs and Benefits (L.E. 1, 000 at 2000 Constant Prices)

Year All Project Benefits* Total Costs Net Cash Flow0 0.0 0.0 0.0

2001 0.0 80,953.7 (80,953.7)2002 0.0 161,937.2 (161,937.2)2003 0.0 174,917.1 (174,917.1)2004 0.0 146,872.5 (146,872.5)2005 10,560.0 106,970.5 (96,410.5)2006 40,697.4 47,600.7 (6,903.3)2007 88,186.4 16,243.4 71,942.92008 122,777.8 16,243.4 106,534.32009 169,532.4 16,243.4 153,289.02010 200,230.4 16,243.4 183,987.02011 230,320.0 17,055.6 213,264.42012 256,910.6 17,867.8 239,042.82013 276,081.2 18,679.9 257,401.22014 294,231.0 19,492.1 274,738.82015 298,777.3 20,304.3 278,473.02016 304,346.5 21,116.4 283,230.02017 304,346.5 21,928.6 232,417.82018 304,346.5 22,740.8 231,605.72019 304,346.5 23,553.0 230,793.52020 304,346.5 24,365.1 279,981.32021 304,346.5 25,177.3 279,169.22022 304,346.5 25,989.5 278,357.02023 304,346.5 26,801.6 277,544.82024 304,346.5 27,613.8 276,732.62025 304,346.5 28,426.0 275,920.52026 304,346.5 29,238.2 275,108.32027 304,346.5 30,050.3 274,296.12028 304,346.5 30,862.5 273,484.02029 304,346.5 31,674.7 272,671.82030 304,346.5 32,486.8 271,859.6

Internal Rate of Return : 17.3Net Present Value at 12%: 390,665.8Benefit Cost Ratio : 1.6

* It represents Delta and Nile Valley agricultural benefits.

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Annex 4, Table 7 (c)

Switching Year

Delta and Nile Valley Project AreasEconomic (IRR, NPV, and B/C Ratio)

Economic Costs and Benefits (L.E. 1, 000 at 2000 Constant Prices)

Year All Project Benefits* Total Costs Net Cash Flow0 0.0 0.0 0.0

2001 0.0 80,953.7 (80,953.7)2002 0.0 161,937.2 (161,937.2)2003 0.0 174,917.1 (174,917.1)2004 0.0 146,872.5 (146,872.5)2005 0.0 106,970.5 (106,970.5)2006 0.0 47,600.7 (47,600.7)2007 0.0 16,243.4 (16,243.4)2008 10,560.0 16,243.4 (5,683.5)2009 40,697.4 16,243.4 24,453.92010 88,186.4 16,243.4 71,942.92011 122,777.8 17,055.6 105,722.22012 169,532.4 17,867.8 151,664.62013 200,230.4 18,679.9 181,550.52014 230,320.0 19,492.1 210,827.92015 256,910.6 20,304.3 236,606.32016 276,081.2 21,116.4 254,964.72017 294,231.0 21,928.6 272,302.32018 298,777.3 22,740.8 276,036.52019 304,346.5 23,553.0 280,793.52020 304,346.5 24,365.1 279,981.32021 304,346.5 25,177.3 279,169.22022 304,346.5 25,989.5 278,357.02023 304,346.5 26,801.6 277,544.82024 304,346.5 27,613.8 276,732.62025 304,346.5 28,426.0 275,920.52026 304,346.5 29,238.2 275,108.32027 304,346.5 30,050.3 274,296.12028 304,346.5 30,862.5 273,484.02029 304,346.5 31,674.7 272,671.82030 304,346.5 32,486.8 271,859.6

Internal Rate of Return 12.8Net Present Value at 12%: 62,931.4Benefit Cost Ratio : 1.1

* It represents Delta and Nile Valley agricultural benefits.

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Annex 4, Table 8 (a)Present Financial and Current Economic Farm-Gate Prices

_ (] '~~~~~.E. at Year 2000 Prices)Unit Price Unit PriceX

Crop Local Unit (kg) Delta Upper EgyptFinancial Economic Financial Economic

Outputs:Wheat Ton 1,000 653.3 561.0 653.3 561.1Broad Bean Ton 1,000 1,161.3 1,161.3 1,161.3 1,161.3Barley Ton 1,000 583.3 583.3 583.3 583.3Berseem (long) Ton 1,000 50.0 50.0 50.0 50.0Berseem (short) Ton 1,000 50.0 50.0 50.0 50.0Tomatoes (wi nter) Ton 1,000 400.0 400.0 400.0 400.0Squash Ton 1,000 450.0 450.0 450.0 450.0Onion Ton 1,000 225.0 225.0 225.0 225.0Sugar-beet Ton 1,000 100.0 49.0Flax (grain) Ton 1,000 1,250.0 1,190.0 1,250.0 1,190.0Cotton Ton 1,000 2,539.7 2,384.0 1,904.8 2,066.0Rice Ton 1,000 600.0 529.0 _ - -

Maize (S) Ton 1,000 500.0 467.0 500.0 467.0Sorghum Ton 1,000 - _ 500.0 459.0Peanuts Ton 1,000 1,533.3 1,533.3 1,533.3 1,533.3Maize-forage Ton 1,000 40.0 40.0 40.0 40.0Tomatoes (summer) Ton 1,000 300.0 300.0 300.0 300.0Sesame Ton 1,000 2,916.7 2,916.7 2,916.7 2,916.7Sunflower Ton 1,000 1,100.0 1,100.0 1,100.0 1,100.0Soybean Ton 1,000 1,050.0 883.0 1,050.0 883.0Hibiscus Kg 1.0--_- 12.0 12.0Watermelon Ton 1,000 400.0 400.0 400.0 400.0Sugarcane Ton 1,000 - _- _ 90.0 47.0Grape Ton 1,000 500.0 500.0 500.0 500.0Citrus Ton 1,000 600.0 529.0 600.0 529.0Alfalfa Ton 1,000 50.0 50.0 50.0 50.0

Annex 4, Table 8 (b)Updating Input-Output Financial and Economic Farm - Gate Prices

_________________ ~~~(L.E. 2000 Prices)Unit Price Unit Price

Crop Local Unit (kg) DelIta Upper Egypt_______________________ ~Financial Economic Financial Economic

Crop-by-Products:Wheat straw Ton 1,000 120.0 120.0 120.0 120.0Bean straw Ton 1,000 60.0 60.0 60.00 60.0Maize stalks Ton 1,000 40.0 40.0 40.0 40.0Cotton stalks Ton 1,000 40.0 40.0 40.0 40.0Cotton seed Kg 1.0 1.0 0.8 1.0 0.8Berseem seed Kg 1.0 2.1 2.1 2.1 2.1Barley straw Ton 1,000 120.0 120.0 120.0 120.0Rice straw Ton 1,000 40.0 40.0 40.0 40.0Flax straw Ton 1,000 225.5 225.5 225.5 225.5Inputs:Diesel Liter 1.0 0.40 0.63 0.40 0.63Transport Ton/Km 1.0 0.17 0.17Plowing Trac/hr 1.0 20.0 25.77 20.00 25.77Pumping Pump/hr 1.0 3.00 4.00 3.00 4.00Water lifting MA3 1.0 0.02 0.02Threshing Thr/hr 1.0 6.00 8.00 6.00 8.00Winnowing Win/hr 1.0 4.00 6.00 4.00 6.00Manure MA3 1.0 2.75 2.75 .2.75 2.75N Kg 1.0 1.10 1.12 1.10 1.12P205 Kg 1.0 2.06 1.69 2.06 1.69K20 Kg 1.0 1.43 1.36 1.43 1.36Labor Man/hr 1.0 1.17 1.17 1.17 1.17Donkey Donk/hr 1.0 0.67 0.67 0.67 0.67Cow Cow/hr 1.0 1.34 1.34 1.34 1.34Sprayer Spray/hr 1.0 2.00 2.23 2.00 2.23

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Annex 5. Financial Analysis

1. Financial analysis was carried out for the project. Although both owner-cultivated and rentedfarms are found throughout the project area, only owner-cultivated farms are considered in the financialanalysis because of their predominance. The average size of farm holdings in the three regions under theproject is 2 feddans; therefore, the incremental benefit and incremental cost of drainage is assessed for a 2feddan, owner-operated farm. The incremental income with and without the installation of field drainage(represented as net farm cash flow in Annex 5, Tables 2, 3 and 4, respectively) is utilized in theincremental benefit stream in the financial models. The net farm cash flow models (Annex 5, Tables 2, 3and 4, respectively) are typical representative fanm models for the different agro-ecological regions ofEgypt; namely, Delta, Middle Egypt, and Upper Egypt.

Price Assumptions

2. Output Prices. The financial analysis utilizes financial prices paid for the individual crops (11different crops in the Delta, 13 in Middle Egypt and 11 in Upper Egypt) and are based on farmgate pricesreceived by farmers. The financial prices utilized in individual farm models for calculating net farmincome are presented in Annex 4, Table 8. They were also used in calculating incremental farm incomedue to investment in subsurface drainage under the project.

3. Input Prices. The financial prices used in the various crop budgets which constitute thebasis for determining the net farm income comprised two generic set of inputs: those that arenon-yield dependent (seed, fertilizer, animal work) and those that are yield dependent (labor forharvesting, threshing, winnowing). The financial prices for inputs used are also presented inAnnex 4, Table 8.

Farm Income Analysis

4. On the basis of the foregoing price assumptions about farm inputs and outputs, theincremental benefits (net farm cash flows) due to installation of field drainage are calculated.These incremental benefit streams are presented in Annex 5, Tables 2, 3 and 4 respectively. Thefinancial analysis (Annex 5, Table 1) comprises calculations of the net cash flows to arepresentative 2 feddan farm unit after deducting incremental costs from benefits. Theincremental cost of field drainage installation to the individual farm unit is computed as the sumof the installation contract value plus the cost of the pipes supplied by EPADP or the privatesector, plus compensation to farmers for crops destroyed during installation, plus anadministrative charge of 10 percent of the installation contract, all on a one feddan basis. Theaverage incremental cost per feddan of field drainage installation is estimated at LE1,200. Thenet cash flow presented in Annex 5, Table 1 from financial models for alternative regions showsinstallation of field drainage to be financially remunerative, with financial rates of return to theindividual farmer ranging from 25% to 28%.

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Annex 5, Table 1

Financial Analysis

Financial Model I Financial Model 2 Financial Model 3Delta Region Middle Egypt Region Upper Egypt Region

Incremental Incremental IncrementalCosts* Benefits Net Cash Flow Costs Benefits Net Cash Flow Costs Benefits. Net Cash Flow

LE LE LE LE LE LE LE LE LE

1200 0 -1200 1200 0 -1200 1200 0 -12001200 0 -1200 1200 0 -1200 1200 0 -1200

0 373.7 373.7 0 364.5 364.5 0 291.9 291.90 655.8 655.8 0 594.2 594.2 0 465 4650 810.2 810.2 0 768.7 768.7 0 622.6 622.60 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 10013 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.70 1001.3 1001.3 0 948.7 948.7 0 909.7 909.7

irr= 28% irr= 27% irr= 25%

*Cost Per Feddan of Installation of Subsurface drainage is estimated at LEI ,200.

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Annex 5, Table 2

Net Farm Cash Flow (Financial)Farm Size : 2.0 FeddansType of Farm Tenure: OwnedLocation Model I (Delta)

W/O Wi ProjectMajor Crops Project Yrl Yr2 Yr3 Yr4 Yr5 Yr6-25

L.E. L.E. L.E. LE. L.E. L.E. L.E.

(1) Wheat 561.4 561.4 561.4 651.9 677.6 694.3 721.8(2) Barley 8.2 8.2 8.2 8.7 9.2 9.7 10.3(3) Broad beans 56.7 56.7 56.7 64.9 69.6 74.7 78.7(4) Berseem (Long) 132.0 132.0 132.0 164.1 183.4 196.2 228.4(5) Berseem (Short) 26.5 26.5 26.5 35.7 41.2 48.5 54.1(6) Vegetables (W) 301.6 301.6 301.6 331.9 349.7 359.3 373.5(7) Cotton 575.4 575.4 575.4 665.0 682.9 710.4 745.1(8) Maize 302.9 302.9 302.9 307.5 376.5 385.7 384.5(9) Rice 621.6 621.6 621.6 662.0 726.9 767.4 803.8(10) Vegetables (S) 257.6 257.6 257.6 285.7 302.3 311.2 324.6

Perennial Crops:(I) Citrus 456.3 456.3 456.3 496.6 536.8 552.9 576.8

Fallow Land (Fed) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Saved Land (Fed) 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Land (Fed) 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Total Crop Farm Income 3,300.2 3,300.2 3,300.2 3,674.0 3,956.0 4,110.4 4,301.5Incremental Farm Income 0.0 0.0 373.7 655.8 810.2 1,001.3

Annex 5, Table 3

Net Farm Cash Flow (Financial)Farm Size : 2.0 FeddansType of Farm Tenure: OwnedLocation . Model 2 Egypt)

WIO With ProjectMajor Crops Project Yrl Yr2 Yr3 Yr4 Yr5 Yr6-25

L.E. L.E. L.E. L.E. L.E. L.E. L.E.

(I) Wheat 585.6 585.6 585.6 682.4 719.4 746.9 753.8(2) Barley 6.2 6.2 6.2 6.7 7.2 7.8 7.9(3) Broad Beans 41.3 41.3 41.3 49.5 54.2 59.3 59.8(4) Berseem(Long) 144.1 144.1 144.1 175.8 194.9 208.1 242.4(5) Berseem (Short) 32.4 32.4 32.4 40.3 45.0 50.9 56.5(6) Vegetables (W) 787.6 787.6 787.6 829.3 861.9 891.3 947.3(7) Cotton 232.0 232.0 232.0 284.6 294.2 313.6 317.6(8) Summer Maize 384.0 384.0 384.0 391.1 452.9 475.9 498.0(9) Sorghum 29.5 29.5 29.5 29.5 29.5 29.5 37.3(10) Soybeans 86.5 86.5 86.5 88.0 88.0 89.4 98.5(11) Vegetables (S) 643.0 643.0 643.0 714.4 741.2 763.2 803.0

Perennial Crops: _ l_l_l _l

(I) Sugarcane 120.9 120.9 120.9 124.8 125.7 130.6 151.2(2) Citrus 188.6 188.6 188.6 229.8 261.8 283.8 257.2

Fallow Land (Fed) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Saved Land (Fed) 0.0 0.0 0.0 0.0 0.0 | 0.0 0.0

Total Land (Fed) 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Total Crop Farm Income 3,281.7 3,281.7 3,281.7 3,646.1 1 3,875.9 4,050.3 4,230.4Incremental Farm Income 0.0 0.0 364.5 594.2 768.7 948.7

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Annex 5, Table 4

Net Farm Cash Flow (Financial)

Farm Size 2.0 FeddansType of Farm Tenure. OwnedLocation Model 3 (Upper Egypt)

W/O With ProjectMajor Crops Proj ect Yrl Yr2 Yr3 Yr4 Yr5 Yr6-25

L.E. L.E. L.E. L.E. L.E. L.E. L.E.

(1) Wheat 713.6 713.6 713.6 831.6 876.8 910.3 918.7(2) Broad Beans 57.9 57.9 57.9 69.3 75.9 83.0 83.7(3) Berseem (Long) 58.7 58.7 58.7 71.6 79.4 84.8 98.7(4) Berseem (Short) 15.0 15.0 15.0 18.6 20.7 23.5 26.1(5) Vegetables (W) 572.8 572.8 572.8 603.1 626.8 648.2 688.9(6) Cotton 107.1 107.1 107.1 131.3 135.8 144.7 146.6(7) Summer Maize 276.8 276.8 276.8 281.9 326.5 343.1 359.0(8) Sorghum 147.3 147.3 147.3 147.3 147.3 147.3 186.4(9) Vegetables (S) 263.0 263.0 263.0 292.3 303.2 312.2 328.5

I I I Perennial Crops: | _ _

(1) Sugarcane 966.9 966.9 966.9 998.1 1,006.0 1,045.1 1,209.4(2) Citrus 117.9 117.9 117.9 143.6 163.6 177.4 160.8

Fallow Land (Fed) 0.0 0.0 0.0 0.0 0.0 0.0 0.0Saved Land (Fed) 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Land (Fed) 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Total Crop Farm Income 3,297.0 3,297.0 3,297.0 3,589.0 3,762.1 3,919.7 4,206.8Incremental Farm Income 0.0 0.0 291.9 465.0 622.6 909.7

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Annex 6. Procurement and Disbursement Arrangements

Procurement

1. As the project implementing agency, the EPADP, has considerable experience in procurement asshown by a good procurement performance in the National Drainage project and previous five drainageprojects financed by the Bank Group. Hence, it would be responsible for procurement under the project.All goods to be financed from the Bank loan proceed would be procured in accordance with the Bank'sGuidelines for Procurement under IBRD loans dated January 1999. Basic understanding has beenreached that procurement of goods under the KfW and EIB Loans will also be in accordance with thesame guidelines (subject to final approval by the German Government and EIB). The procedures to beadopted are set out below and procurement arrangements are summarized in Table A. The LACICompliance Review of Procurement was carried out during the pre-appraisal mission (November 1999).This was then reviewed by the Principal Procurement Specialist and his comments were incorporated intothe review document with is included in the Project File (Annex 10).

A. Procurement Method

(a) Goods (Equipment and Materials)

(i) ICB procedures, in accordance with Bank's guidelines, would be used for the procurementof all vehicles, heavy equipment, laboratory equipment, electro-mechanical equipment foremergency centers, PVC and PE powder for the transitional period. These items (totalingabout US$15.7 million including contingencies) represent about 31.4 percent of the totalcost of the components financed by the Bank. Where compatibility of spare parts or otheritems with installed equipment is required, or where items are available from sole sourceof supply only, contracts would be negotiated directly with the manufacturer or authorizedagent; the aggregate amount of direct contracting for such spare parts would be up toUS$3.0 million equivalent.

(ii) LIB goods estimated to cost less than $350,000 per contract up to an aggregate amount notexceeding US$5,000,000 equivalent and goods which Bank agrees can only be purchasedfrom a limited number of suppliers, may procured under contracts awarded on the basis ofLIB.

(iii) Intemational Shopping (IS) and National Shopping (NS) with at least three quotationsfrom three eligible sources will be used for contracts estimated to cost less thanUS$200,000 equivalent each, upto an aggregate amount of US$2,000,000 equivalent.Small items costing less than US$100,000 and miscellaneous equipment and materials foroffices, laboratories, field investigation, etc. which cannot be combined into ICB packagesmay also be awarded on a NS basis, up to a limit of US$ 1,000,000.

(iv) Tendering schedule for various conmponents to be financed are summarized in Table 1.Procurement arrangements are given in Table A. All procurement under the proposedproject will be carried out by EPADP.

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(b) Civil Works. All civil works for the installation of subsurface drainage, open drains remodelingand pumping station facilities will be carried out using NCB procedures. Contractors will be pre-qualified and documents issued only to the pre-qualified contractors. Pre-qualification and biddingdocuments including bid evaluation reports will be subject to the Bank's review. Only civil works for theconstruction of maintenance centers and subcenters would be financed by EPADP. No ICB procedureswill be used due to the small scale of contract sizes making it unattractive for foreign contractors (asshown in the current National Drainage Project but who will, nevertheless, be eligible for bidding underNCB procedures if they wish).

(c) Technical Assistance and Training for EPADP and DRI. These will involve individualconsultants, and or consulting firms, mostly hired to support these agencies in design, specialized studiesand training. The selection of consultants financed from the World Bank Loan will be according to theWorld Bank guidelines for the Selection and Employment of Consultants dated January 1997.Consultants engaged for technical assistance financed under the KfW, EIB, and Netherlands financingwould be engaged according to the procedures and guidelines of these institutions. The major part of thetechnical assistance and training excluding those financed through Netherlands bilateral assistance(US$3.6 million equivalent) will be financed by the KfW grant or loan equivalent to DM 2.0 million(US$1.0 million) and a small portion funded by the IBRD loan (US$0.1 million equivalent) and theCanadian NAWQAM Project to finance items for the Environmental Management Plan not covered bythe Netherlands funded INTESP Project (NLF 500,000). The requirement of consultants for allassignments will be coordinated between the World Bank, KfW, and Netherlands GovemmentRepresentatives, the Canadian NAWQAM Project, and by the EPADP.

(d) Domestic Preference. Under ICB procedures for the procurement of goods only, a margin ofpreference would be granted to bids offering certain goods manufactured in Egypt, when compared tosuch goods manufactured elsewhere. The nationality of the manufacturer or supplier is not a condition tosuch eligibility. Appendix 2 of the guidelines will apply to domestic preference.

B. Procurement Details

(a) In the case of pumping equipment for emergency centers, the World Bank, EIB, and KfW willonly finance electro-mechanical equipment and auxiliary equipment for the pumping stations. MED onbehalf of EPADP will tender electro-mechanical equipment with a clause on coordination with the civilworks contractor during installation and testing. After the award of an electro-mechanical equipmentcontract, the supplier furnishes MED with the basic layout for the proposed equipment. On the basis ofthis layout, detailed design and drawings are prepared for the civil works by MED civil worksconsultants and a separate tender for civil works are floated, which has a similar clause of coordinationwith the electro-mechanical equipment supplier during installation and testing under MED supervision.As these are two separate contracts, Bank standard contract documents for the supply and installation ofplant and equipment (November 1997, revised January 1999) will be used for the procurement of electro-mechanical equipment and an NCB standard document will be used for civil works financed byMED/EPADP. Both of these documents were reviewed during appraisal of Third Pumping StationsRehabilitation Project and these are in conformity with Bank procedures. Furthernore, EPADP/MED hasagreed to give a written agreement that the Bank's standard bidding and bid evaluation documents will beused consistently. Technical specifications will vary for each contract according to the scope of work.

(b) EPADP has prepared a detailed program for each tender giving the location of catchment area tobe drained, estimated base cost, dates when design and tender documents are completed, advertisementdate, bid opening, bid evaluation contract award, opening of the letter of credit, equipment delivery date,installation and acceptance dates and in case of civil works completion period, start and completion dates.A detailed tender processing and contract completion schedule is given in Annex 6, Tables 1, 2 and 3

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respectively for the World Bank, EIB and KfW. Expected disbursement profiles for the World Bank(Table 2), KfW (Table 3), and EIB (Table 4) with required counterpart funding for World Bank (Table 5),KfW (Table 6), and EIB (Table 7) are shown.

(c) Review of procurement for "LACI Compliance" was carried out during pre-appraisal andreconfirmed during appraisal mission (ref. para 1 above). The Overall Procurement Risk Assessment isconsidered low as EPADP has a high capability in Bank procurement procedures having implemented sixearlier Bank-funded projects. Procurement supervision will be carried out in detail in the field at leasttwice a year in addition to frequent reviews and communications with EPADP from Headquarters. Thesupervisions will also cover procurement post review audits (Ref. also Annex 6, Table B).

Overall Procurement Risk Assessment

HighAverage _ _ _Low X

Frequency of procurement supervision missions proposed: Once every six month(s)(includes special procurement supervision for post-review/audits).

(d) The following time has been allowed for various steps of tendering and completion.

Designs and Tender documents preparationAdvertisement to bid opening 60-90 daysBid evaluation 45-60 daysCompletion of evaluation of award 30 daysAward to opening of the Letter of Credit 30 days

or advance paymentIssuance of Letter of Commitment by the

Financing agencies 30 days

Manufacturing and Equipment delivery(for pumping equipment) 15-18 months

Other Equipment delivery 4-6 monthsInstallation and testing period

(for pumping equipment) 10-12 monthsOther equipment testing 30 daysAcceptance 30 daysGuarantee period 24 monthsCivil Works - Subsurface drainage and open drains

Completion time 18-36 months

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2. The following is the summary of number of bids expected to be tendered in each fiscal yearfinanced by the World Bank giving the range of estimated contract value.

Range of ContractVaueCalendar Year Number of Tenders US$ Million

2001 12 6 0.65 to 6:6 0.01 - 2.402002 14 3 0.73 to 5.13 0.02 - 2.402003 5 4 0.40 to 6.30 0.01 - 1.542004 5 3 0.54 to 1.51 0.03 - 0.652005 2 0.18 to 0.82

3. In order to proceed with tender processing as soon as designs are ready for the contracts of thefirst year, EPADP must start to advertise the initial civil works tenders for each region by September2000, which would enable award of contracts as soon as the project loan becomes effective. CurrentMWRI's regulations do not allow this; however, there is a precedence from the ongoing NationalDrainage Project and the Irrigation Improvement Project, which requires approval of the Minister ofWater Resources and Irrigation. It was agreed that EPADP will seek such approval and inform the Bank,KfW and EIB by September 2000.

4. Prior Review Thresholds. All Bank-financed contracts above US$1.0 million for goods, US$1.5million for civil works and consulting contracts above US$100,000 for firms and US$50,000 forindividual consultants as well as the first three contracts irrespective of contract value or procurementmethods would be subject to prior review. All other contracts would be subject to post-review on arandom basis during supervision missions. This would result in 74% of all contracts being subject toprior review while the rest would be subject to post review.

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Table A: Procurement Methods(in US$ Million Equivalent)

Procurement MethodTotal & iBRD ' EIB W herlands

Expenditure Category ICB NCB Others j ,otal

A. Civil Works

1. Subsurface drainage 130.1 (23) { 24) [18.71 ((-)) 130.5 (23) {24.0}(18.7) ((-))

2. Renewal of subsurface drains 35.4 (6.5) {6.5) [5.5] ((-)) 35.6 (6.5) {6.5}[5.5] ((-))

3. Open drains remodeling 13.3 (2.0) { 2} [1.5] ((-)) 13.3 (2 ) {2}(1.5) ((-))

4. Maintenance centers and subcenters -- 0.60 (-) {L- } ((-)) 0.6 (-) {-) [-] ((-))ISubtotal 178.8 (31.5) 0.60 (-) {33.5} [25.7] ((-)) 179.4 (31.5) {33.5}

[25.7] ((-))B. Equipment & Materials

1. O&M equipment 9.40 (2.4) 0.5 {2.5) [3.5] ((-)) 9.4 (2.9) {2.5)[3.5] ((-))I

2. PVC & PE powder for transitional 23.7 (8.5) . {8.5} [6.7] ((-)) 23.7 (.5) {8.5)period

[6.7](-)3. Electro-mechanical equipment for 6.5 (2.5) {4.0} [-1 ((-)) 6.5 (2.5){4.0} H

emergency centers4. Spare Parts and Misc. Equipment 1.9 (0.5) (0.4) {0.5} [0.2] ((0.3)) 1.9 (0.9 ) (0.5)

[0.2] ((0.3))5. Computers, Lab and GIS Equipment 0.3 (-) (0.2) ((0.1)) 0.3 (0.2) {-) [-]

((0.1))6. Vehicles 4.1 (2.5) (0.2) [1.6] 4.1 (2.5) {-} [1.6]7. Synthetic filter fabric for transitional 2.8 (1.0) {1.0} [0.81 ((-)) 2.8 (1.0) {1.0)

period [0.8] ((-))Subtotal 48.7 (17.2) (1.3) (16.5) [2.8] ((0.4)) 48.7 (18.5) {16.5)

[12.8] ((0.4))C. Technical Assistance and Training

1. Institutional Support to EPADP 3.9 (-) [0.2] ((3.3))1 3.9 (- ) { -1 [0.2]((3.3))

2. Environmental Management Plan 1.5 (-) [1.0] 1.5 (-) {-} [1.01through EPADP and DRI

3. Social/Participatory comp. Including 0.5 (-) [0.3] 0.5 (- ) [0.37] ((-))two pilot schemes

Subtotal 5.9 (-) [1.5] 5.93;!j {-} [1 5]((3.3))

D. Miscellaneous - Government-Financed

1. Crop compensation and land 34.71 (-) {-} [-] [(-)) 34.71 ( -)acquisition

6.77 (-) {-} [-] ((-)) 6.77(-2. Sales tax and custom duties3. Recurrent cost 2.92 (-) f - T 2.92 ( -)

Subtotal 44.40 (-) {-} [-i ((-)) 44.4(-){-}[-]H ((-}[278.4 (50.0)

TOTAL {50.0) [40] ((3.7))

Figures in parenthesis ( ) represent amounts to be financed under the IBRD loan; figures in brackets f }represent amount to be financed under EIBloan, figures in brackets [L represent amount to be financed under KfW loan. Figures in double parenthesis (( )) represent amount to be financedunder the Netherlands bilateral assistance.

b' Direct purchase, LIB for equipment and materials through Intemational and/or national shopping.

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Table B. Prior Review Thresholds (US$ million)

Expenditure Category Type of Procurement Prior Reiw ContrtValu_____ ; t :___________ i;___ ._i____ (US$ M iW fin)

1. Civil Works International Competitive Bidding 1,500,000 53.42(ICB and Others)

2. Goods - Equipment & Materials International competitive bidding (ICB Above 1,000,000 15.21and others)

3. Services Consultants Guidelines (Firm) 100,000 0.10Consultants Guidelines (Individual)

__ 50,000 0.05

'' Main consulting services will be financed from the KfW grant according to procurement guidelines and procedures of theKfW, component given above is a small items to be financed from Bank Loan to cover items not financed by KfW orNetherlands bilateral assistance.

Table C: Project Costs by Procurement Arrangements](in US$million equivalent)

Total CostExpenditure Category Purement Method (incluing

_______________________ 1 NCB Other N. .B.F Contingencies)

1. Works 178.8 0.60 179.42. Goods 17.2 - 1.8 29.7 48.73. Services -- 1.1 4.8 5.94. Miscellaneous _ 44.4 - 44.45. Interest during construction -- --

6. Front-end Fee -- - -- -- --

Totai 17.2 I 178.8 47.9 34.5 2 8.40

Note: N.B.F. = Not Bank-financed {includes elements procured under parallel cofinancing procedures (from KfW and Netherlands),consultancies under trust funds, any reserved procurement, and any other miscellaneous items}. Reference Table(Procurement Methods) in PAD for details of IBRD and EIB financing and "Other Category."

C. Disbursement

5. Disbursements were worked out for every semester from the tendering schedule given in Tables1, 2, and 3.

6. The proposed Bank loan would be disbursed in seven years against the categories of rates shownbelow. Although EPADP has no intention in principle of requesting financing for technical assistanceand training from the IBRD Loan, and in view of some need which may arise due to financing gap for theenvironmental management plan and other activities. A nominal provisional amount has been included.This provisional amount of US$100,000 has been included to cover items not covered by KfW,Netherlands or the EIB loan financing. Amounts not utilized from this small provisional amount may, inagreement with the Bank, be reallocated for other categories in due course. The following is the summaryof expected disbursement.

1/ For details on presentation of Procurement Methods refer to OD 11.02, 'Procurement Arrangements for Investment Operations." Details on Consultant Services can be shown

more easily in the Table Al format (additional to Table A, where applicable).

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Disbursement Schedule US$ MillionI _ IBRD Fiscal Year

2001 2002 2003 2004 2005 2006 2007Annual 3.0 9.0 10.0 10.0 8.0 6.0 4.0Cumulative 3.0 12.0 22.0 32.0 40.0 46.0 50.0

The following are the categories allocated amount and percent rate of disbursement of the IBRD Loan.

Category Description Amount (US$ Million) Percent of Expenditure tobe financed

I-A 1' Civil Works - subsurface drainage contracts 4.5 32%(excluding drainage pipes)

I-B ' Civil Works - subsurface drainage contracts 23.0 54%(including drainage pipes)

I-C Civil Works - open drains remodeling 2.0 38%

11 PVC/PE Powder and Synthetic Filter 9.5 100% of foreign expenditures,100% of local expenditures(ex-factory cost); 85% of localexpenditures for other itemsprocured locally.

IlIl Other Goods 8.0 100% of foreign expenditures,100% of local expenditures(ex-factory cost); 85% of localexpenditures for other itemsprocured locally

IV Consultants' Services and Training 0.1 100%V Fee 0.50 Amount due under Section

2.04 of this AgreementVI Unallocated 2.4

Total 50.00

Civil works subsurface drainage contracts where drainage pipes are provided by EPADP for contracts signed during thefirst two years after effectiveness.

2/ Civil works subsurface drainage contracts where drainage pipes are provided through civil works subsurface drainagecontracts, unless otherwise determined by the Bank and EPADP during the transition period of two years after theeffectiveness of the IBRD Loan.

7. All applications for disbursement would be made by EPADP against contracts for: (a) civil worksof less than $200,000 equivalent; (b) goods of less than US$500,000 equivalent; (c) services of consultingfirms not exceeding US$100,000 equivalent; and (d) services of individual consultants and trainingcosting less than US$50,000, which would be disbursed against statement of expenditures (SOEs). It isestimated that total procurement under SOEs would be about US$4.0 million. Supporting documents forSOE claims would be retained at EPADP headquarters and made available for inspection by the Banksupervision missions and project auditors. The withdrawal applications for direct disbursement from theloan account would be at the minimum equivalent of 20% of the initial deposit to the Special Accounts.Although EPADP is reluctant to use a special accounts provision has been made in the Loan Agreementfor an authorized allocation to the special account of US$3,000,000 (US$5,000,000 if PMR option isused) with the first deposit not exceeding US$1,500,000. EPADP may request the balance to be

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deposited to the special account, when the total disbursed and committed under the loan will have reachedUS$12,000,000.

8. As separate areas have been assigned for each co-financiers, EPADP will submit withdrawalapplications to each financier separately, at the agreed rate of disbursement. With the first withdrawalapplication of each civil works contract, EPADP will submit a copy of signed contract and evaluationreport relevant to the contract. For goods, separate contract for items assigned to KfW and EIB financingwill be signed and agreed percentage of 100% for foreign expenditure and 85% for items procured locallywill be applied. First withdrawal application for each contract of goods will be submitted with aconformed copy of contract and evaluation report. KfW will finance 100% of technical assistance andtraining expenditures against statement of expenditures from the loan and grant proceeds.

D. Budget

9. In the past, budgetary requirements and their timely allocation has not been a problem in any ofthe projects undertaken by MWRI. However, the Govemment is taking full responsibility of paying forgoods, materials, civil works and services, manufactured, supplied or provided using local currency, it isprudent to point out the budgetary requirements for each fiscal year. Following requirements does notinclude custom duties and taxes imposed on imported equipment which can be about forty percent ofimported cost.

Counterpart Funding Requiremente(Local Budget) In Milrion L.E.

Equipmeiet & Technical Crop TAxes RtecurrentFiscal Civil Mateials Asine& Copsation and Cost TotalYear Works Trainin & Land Duies

________ ____________ ~A 6ijuisftion _ _ _ _ _

FY 2001 26.46 0.92 1.22 9.32 2.96 0.97 41.85FY 2002 59.50 1.55 1.48 21.42 5.70 1.76 91.41FY 2003 71.35 1.20 1.13 27.69 5.63 2.30 109.30FY 2004 64.81 0.68 1.03 24.41 4.36 2.10 97.39FY2005 50.91 0.40 0.10 22.65 3.18 1.93 79.17FY2006 24.82 - 0.12 12.53 1.20 0.78 39.45

TOTAL 297.85 4.75 5.08 118.02 23.03 9.84 458.57

E. Audit and Account

Project Financial Management

10. The Financial Management System (FMS) in place in the EPADP, implementing agency for theproject, is based on principles and procedures defined by the legal framework applicable to the publicsector and more specifically to governmental institutions. The main characteristics of this system are thefollowing:

11. Accounting system. An accounting system based on the cash basis and the outline of budgetcomponents is operational and reflected on legal books maintained manually. For the follow up of theother sources of funds, such as those coming from different donors, special accounting books aremaintained. It should be noted that these books are not reflecting: (i) the EPADP's contribution, and (ii)the amounts transferred by the donors. Thus, the balances are related to the amounts disbursed and arenot reflecting the transactions of the special accounts and the remaining balance at the end of each period.

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12. Budgeting system. An annual approved budget for procurement and disbursement is issued byEPADP based on the needs and actions to be undertaken. The annual budget is submitted to the Ministryof Finance, which is in-charge of controlling the budget through its specialized units. The general budgetis including the contributions of the donors for the implementation of specific project. The Planning andEvaluation General Directorate (PEGD) is playing an important role for the issuing of the annual budgetsince this entity is the official, vis-a-vis, donor and the structure responsible for the issuing of theperiodical monitoring reports.

13. Disbursements. Payments are authorized by the National Bank of Investment (NBI) on aquarterly basis within the allocated budget and based on a detailed planning of disbursement presentedtogether with supporting documents. Payments from EPADP's budget are centralized at the central leveland are processed by the budget unit which is responsible for the issuing of all the transactions accordingto the legal framework. Those related to the donor's contribution are initiated by the Contract's Unit inthe General Directorate of Administrative and Finance Affairs (GDAFA), with the collaboration andsupervision of the PEGD. The Contract's Unit is also responsible for the reconciliation for the bank'stransactions, however, this monitoring is not complete and still maintained manually.

14. Control of the budget execution. A fiduciary responsibility of control of the budget execution andmonitoring is assigned to: (i) the NBI which is reviewing the execution on a quarterly basis; and (ii) theCentral Audit Authority (CAO) which is acting on an annual basis covering EPADP's own budget as wellas donor's contribution. Based on the report issued for NDP, it appears that there is an important scopefor improvement in order to allow CAO to express an opinion according to the International Standards onAuditing (ISA). According to the Bank requirements in this field, appointment of an independent auditoracceptable to the Bank has to be considered during the implementation of the proposed NDP II. This willallow EPADP to take advantage of the added value offered by the external auditors during the annualmandatory review of the adequacy of the financial management arrangements and more specifically of theinternal control system. In fact, in addition to the issuing of an opinion on the project financialstatements. the external auditors have to submit an annual management letter describing the inadequaciesin the internal control system as well as recommendations which will contribute to improve themonitoring and execution of the project. Terms of reference of such assignment have to be submitted tothe Bank before the official appointment.

15. Project Monitoring. The official structure responsible for the project monitoring and reporting isthe PEGD. This entity consists of four high level staff and is managing almost ten projects withinternational financing. Semi-annual monitoring reports are issued by PEGD based on informationreceived from the technical departments, the five sectors, and the GDAFA. These reports are combiningphysical implementation data as well as financial information related to commitments, disbursements andavailable balances from the loans, credits and grants. Even if the system could be considered as globallysatisfactory, it still needs considerable improvement to reach the required efficiency and to improve thedecision-making process. In fact, PEGD still has to handle periodically a set of 8 sub reports issued bythe technical departments, the sectors and the GDAFA. This method of operating involves delays andextra workload related to the needed control and reconciliation of data before the issuing of the semiannual reports. This could also affect the accuracy and reliability of data since new entries have to behandled by the PEGD in order to present an overview on the project implementation. The new applicationfor the monitoring of the projects (MISPF) which will be implemented by no later than August 2000could be considered as adequate and meeting the needs of this Directorate. However, there is a need to:(i) define the role of the entities involved in the implementation of projects, and (ii) examine whether itwould be possible to share the MISPF in order to make the system effective and comprehensive.Otherwise, computerization of PEGD's activity would be virtual since the data entry would be centralizedand not shared.

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General Assessment and scope for improvement

16. General Assessment. The assessment does not lead to accountability issues, however, someinsufficiencies on EPADP's financial management were identified during the review, includingincomplete computerization of the accounting system, non-official definition, by writing, of the financialmanagement procedures, and incomplete Management Information System. It should be noted thatEPADP is in the process of addressing several of these issues mainly through the Institutional andTechnical Support Program (INTESP), financed by the Government of Netherlands, however, substantiveimprovement will require several years of concerted efforts.

17. Scope for improvement. Even if the INTESP is aiming to implement a comprehensiveManagement Information System the review of this programs shows that many actions have to beundertaken in parallel by EPADP in order to finalize the whole process. These actions are mainly relatedto: (i) the restructuring of the EPADP in order to operate according to its mission, (ii) the purchase of theneeded hardware (INTEPS covers a part of the required office equipment), and (iii) strengthening of theGDAFA's.

18. Financial Management System for the Project. Since the ISTESP will not be effective before theyear 2003, there is a need during the transition period to set up special arrangements for the managementand monitoring of the proposed NDP II. The recommendations take into account the ongoing MISPF andINTESP actions and could be considered as complementary. It is also assumed that the MISPF would beeffective by no later than August 2000. The main actions to be implemented, during a period of 12months and by no later than June 2001, are the following:

> Identification of the Project Management Team (PMT) headed by an official coordinator forthe project. Job descriptions and responsibilities should be issued by writing and included inthe Financial Management Manual.

> Hiring of a specialized consultant in accounting, finance, and information system in order toissue a Financial Management Procedures Manual (FMPM) for the project according to TORsacceptable to the Bank. This FMPM will define the flows of funds, the internal control rules,the finance and disbursement procedures, the relationship between all the internal and externalentities involved in the project implementation, the chart of accounts, and the reportingprocedures and rules.

> Acquisition of the needed hardware for the project team. This action will start at the centrallevel in order to allow the launching of the training program and improvement of thecomputer's skills especially at the level of the GDA-FA.

> Extension of the MISPP to all projects team. Each entity would be responsible for introducingof the data related to their own activity. The role of the PEGD would be centralization, review,and issuing of the Project Management Reports on a quarterly basis and according to a formatacceptable to the Bank.

> Hiring of a short-term consultant to assist the GDAFA during a first period of 12 months.This consultant, who should be a high-qualified accounting and finance, will review on aweekly basis the financial and banking records related to the project and address the errors andinsufficiencies. This consultant would also play a role of a trainer for the GDAFA staffinvolved in the project implementation. Specific TORs has to be issued, and submitted to theBank.

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> Development of training program. This action should include specific training sessions forprocurement, disbursement, accounting, project management, and financial management. Theprogram should include all the staff involved in the project implementation as well as theirbackups. The level of each staff member in terms of capacity, background, and experience hasto be taken into consideration in order to meet the needs.

Financial Management Characteristics

19. Organization of the PMT. The head of this structure has to be designated officially as coordinatorand overall responsible of the project. This person will be responsible for monitoring and evaluation aswell as procurement, finance, budgeting, and accounting functions. The PMT head has also theresponsibility to affect the adequate number of qualified staff at the central and sector levels as assistantsin the project management taking into account the activity level and the mandatory segregation of dutiesaccording to acceptable internal control concepts. To establish a sound financial management system, thePMT head will be assisted during a period of 12 months, by a qualified financial and accountant specialistoperating on a weekly basis at the level of the GDAFA. This short-term consultant will be expected todemonstrate a reasonable knowledge and understanding of World Bank procurement, disbursement,project accounting, financial reporting and auditing guidelines and procedures.

20. Selection of the Financial and Accounting specialist will be based on the following criteria: (i)University degree in accounting or finance (ii) at least ten years experience, with preference given toconsultant whose qualifications include several combinations of the following: both public and privatesector accounting, banking, planning and budgeting, procurement and contract management, and previousor current assignments with agency managing international financing; and (ii) knowledge of internationalaccounting standards and internal control procedures.

21. To establish an acceptable system for the monitoring and managing of the project, each sectorinvolved in the project's implementation will designate officially a coordinator responsible for the issuingof sub-project accounts and sub- Project Management Reports.

22. Financial and accounting policies for the project have to be developed. These policies are crucialfor ensuring transparency, providing clarity regarding financial aspects to the various stakeholders andfinance staff, ensuring uniformity, and enforcing accountability. These policies inter-alia cover thefollowing aspects: (i) expenditures which would be treated as project expenditures including theirclassification; (ii) expenditures, which would be eligible for reimbursement from Bank loan; and (iii)project accounting policies. These policies would be gradually expanded and refined to include aspectssuch as efficient management and deployment of funds, internal control policies, etc. Sectors wouldcomply with the financial and accounting policies of the project by signing a memorandum ofcomprehension.

23. Project Accounting System. The sectors involved in the project's implementation would beresponsible for the project financial management and accounting duties at a regional level. They wouldmaintain books of accounts for the component managed under their responsibility, prepare anddisseminate sub-project accounts and regional financial management reports, and ensure timelytransmission of these documents to the PMT's accounting and financial responsible at the central level.The PMT would be in charge of the aggregation process and issuing of the annual project financialstatements and the quarterly Project Management Report (PMR) as well as the submission of thesedocuments on a timely basis to the Bank and to the auditors.

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24. The overall principles for project accounting are outlined below:

(i) Books of accounts for the project would be maintained on cash basis principles. Projectaccounts would be maintained using the MISPF which, will be implemented by no later thanAugust 2000. Maintaining the reporting financial system to reflect all the transaction flowsand issuing of the quarterly PMR would complete this system.

(ii) Project accounting would cover all sources of project funds, and all utilization of projectfunds. This would include payments made to and expenditures incurred. All project-relatedtransactions (whether involving cash or not) would be taken into accounts in the reportingsystem. Disbursements made by the World Bank and the Special Account maintained byGOE would also be included in the project accounting system. Funds received fromdifferent sources would be identified separately and reflected in the project accounts.

(iii) Project-related transactions and activities would be distinguished from other activities. Thisdistinction would be reflected at the data-capture stage. An identifiable Trial Balance for theproject capturing all projects receipts, expenditures, and other payments under the projectwould be prepared. A Chart of Accounts for the project has to be developed. The Chart ofAccounts should conform to the classification of expenditures and sources of funds asindicated in the project documents (Project Implementation Plan, Project AppraisalDocument, COSTAB). The Chart of Accounts should allow data to be captured in a mannerto facilitate financial reporting of project expenditures by: (i) project components; (ii)expenditure categories; and (iii) disbursement categories.

(iv) A system of reconciliation between the Project Financial Statements/financial reports andthe legal books of accounts have to be defined.

(v) Physical information on key performance indicators that can be readily linked to financialcosts would be maintained as part of the project financial management system. Initially, thiswould be maintained for some high cost items that represent a significant portion of theproject cost, and for items for which, data on physical activities can be easily captured.These items have to be identified and indicated in the Internal Control Guidelines. This listwould be gradually expanded during implementation.

25. Issuing of the accounting procedures manual for the project which will outline at a minimum: (a)job responsibilities within the Project Management Team (PMT), (b) monthly and annually accountingledger closing and reconciliation procedures including centralization and consolidation of data, (c)accounting policies, and (d) banking and cash procedures. It is important that this manual be done inwriting so that it can be distributed to all project staff.

26. Information Flow for Accounting Purposes. The information flow will be as follows:

(i) Each sector and technical directorate would generate and maintain vouchers andsupporting documentation for expenditures on activities directly managed at their level.Sub project accounts will be issued on a monthly basis and transmitted to the PMT forcontrol, aggregation of data, maintaining of the centralized project accounts and issuingof the project financial statements.

(ii) Expenditures incurred by each sector and technical directorate would be reviewed by theproject auditors following the International Standards on Auditing and the World Bankguidelines; and

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(iii) This system would be reviewed in the light of implementation experience, and modifiedas necessary.

27. Internal Controls. The project financial management system should include the followinginternal control mechanisms:

(i) Operation of a budgeting system, and regular monitoring of actual financial performancewith budgets and targets;

(ii) Adoption and operation of simple, clear and transparent financial and accounting policieswhich would govern financial management of and accounting for the project. Thesepolicies and procedures have to be included in the Financial Management ProceduresManual.

(iii) Establishment at the transaction level of policies, procedures and systems for ensuringacceptable internal controls mechanism such as checking of expenditures, appropriatedocumentation, levels of authorization, segregation of duties, periodic reconciliation,physical verification, easy access to supporting documents etc. These policies andprocedures would be reviewed and updated periodically; and

(iv) Implementation of a comprehensive system aiming to: (i) the aggregation of data at thecentral level; and (ii) the issuing of the project financial statements and the PMR.

28. Guidelines for Internal Control Procedures. An internal control has traditionally been defined asall the policies and procedures used by management to protect an organization's assets and to ensure theaccuracy and reliability of the accounting records. Its also includes controls that deal with efficiency andadherence to management policies. The principles of an internal control system are as follows:

V Authorization - All transactions and activities should properly authorized by management,

v- Recording transactions - All transactions should be recorded to facilitate preparation of the financialstatements and to establish accountability of the assets,

Documents and records - The design and use of adequate document should help to ensure the properrecording of transactions,

V Limited access - Access to assets should be permitted only with the management's authorization,

/ Periodic independent verification- Accounting records should be checked against the assets bysomeone other than persons responsible for the records and assets,

V Separation of duties - The organizational plan should separate functional responsibilities(authorization, operating, handling assets and keeping the records ) and

v Sound personnel procedures - Sound practices should be followed in managing the people who carryout the duties and functions.

29. This document should reflect the PMT's activity including a description of: (a) staff positions andresponsibilities, (b) transaction's flows, and (c) relation with sectors and other directorate at the centrallevel as well as external authorities/administrations such as NIB and Ministry of Finance. This systemwould be reviewed in the light of implementing experience and modified as necessary.

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Financial Management Reports

30. Quarterly Project Management Report (PMR) for the project would be generated from thecomputerized financial management system. These reports would be management-oriented (i.e.,summaries rather than transactional details) and would be used for project monitoring and implementationby each sector and at the central level. The PMR should include the three following parts:

(i) Financial Statements include:* Summary of sources and uses of fundsl Uses of funds by project activity* Project balance statement of affairs* Cash withdrawal* Cash forecast* Special account statement

(ii) Project progress statements include:* Output monitoring report using contract management information, or* Output monitoring report using unit variance as monitoring indicator

(iii) Procurement management report includes:* Contract expenditure report - Goods and works• Contract expenditure report - consultant- Procurement management report - Goods and worksi Procurement management report - Consultant

Formats of the reports should be part of the Financial Management Manual.

31. Annually: Audited Project Financial Statements (PFS) would be submitted to the Bank. PFSwould include: (i) a statement of sources and utilization of funds or Balance Sheet, indicating fundsreceived from various sources, project expenditures, and assets and liabilities of the project; (ii) schedulesclassifying project expenditures by components, expenditure categories, and sector; (iii) a SpecialAccount Reconciliation Statement; and (iv) a Statement of Withdrawals made on the basis of Statementsof Expenditure (SOEs). Audited PFS would be submitted to the Bank not later than 6 months after theend of the Fiscal Year.

Audit Arrangements

32. Annual project financial statements audited by auditors acceptable to the Bank will be submittedto the Bank within 6 months after the end of the fiscal year. The Terms of Reference (TOR) have to beincluded in the Financial Management Manual and approved by the Bank.

33. The audit would be comprehensive and cover all aspects of the project (i.e., all sources andutilization of funds, and expenditures incurred). The audit will be carried out in accordance withInternational Standards on Auditing. Terms of Reference (TORs) for this assignment should cover anaudit of financial transaction, and an assessment of the financial management system, including review ofinternal control mechanisms. Each sector as well as structures at the central level would provide theauditor with access to project-related documents and records, and information required for the purposes ofthe audit. The Auditor would carry out a concurrent audit during the fiscal year, to bring to management'sattention any issues, which need to be addressed. This would strengthen internal controls, and would alsofacilitate early completion of the annual audit.

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F. Timetable

34. Assuming a board presentation on June 2000 EPADP will be held to the following schedule forimplementing the financial management action plan over the next 12 months. (Note: Action plan will bediscussed during negotiations and assurances obtained from the Government to its implementation.)

Action Output Responsibility Effective date

Preparation of TOR for the consultants Detailed program for Chairman, PMT August 2000and job position description for the PMT the implementation of coordinator &

the action plan, TOR, Consultantand JPD

Organization of the PMT Organization Chart and PMT coordinator August 2000(consulting services - 2 SW)) job description & ConsultantAcquisition of the hardware Reception of the PMT coordinator August 2000(IDA/IBRD current NDP) equipmentProgram of Training of the PMD's staff Program: contents and PMT coordinator September 2000

.__________________________ timetableImplementation of the MISPF Set-up of the system PMD & September 2000(ongoing under INTESP) and testing ConsultantTraining program Report on the training PMT and September to June(consulting services - 10 SW)) consultant 2001Accounting System for the project Chart of account and PMT & October 2000(consulting services - 4 SW)) accounting manual ConsultantInternal control guidelines FMP Manual PMT & November 2000(consulting services - 2 SW)) ConsultantReporting System Format and content of PMT coordinator December 2000(consulting services - 2 SW)) the PMR & WBImplementation of the PMR and training Set up of the out put PMT & January 2001of the staff and testing ConsultantEvaluation of Financial Management Financial management PMT & WB March 2001System assessment report

PMD staff training Training performance PMD & June 2001report Consultant

Issuing of the first PMR Integrated Management PMT August 2001report

Issuing of the second PMR, and review PMR and assessment PMT & WB December 2001of the system report

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ANNEX 6Table I

Page 1 of 4TENTATIVE TENDERING AND DISBURSEMENT SCHEDULE FOR CONTRACTS

TO BE FINANCED BY THE WORLD BANK

TENDER DECRIPTION OF ESTIMATEDPACKAGE CATCHMENT FOR CIVIL TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTA ACT SCHEDULEDESIGNATION WORKS AND/OR MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

EQUIPMENT/MATERIAL USS LE & BIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALSDESCRIPTION TENDER

DOC. IINITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-ADVANCE TION VERY LATION TANCE

CNED-1-2001 SHANDOURA P. S. (5,000 FED) 6/00 9/00 11/00 12/00 1/01 2/01 5/03 2/01 2/03 5/03

CNED-2-2001 GABAL MARYANN P.S. 6/00 9/00 11/00 12/00 1/01 2/01 5/03 2/01 2/03 5/03(0,000 FEDJ _I

CONED-3-01 EL ESTESLAH P.S. (19,000 6/00 9/00 11/00 1/01 2/01 3/01 1/05 3/01 10/04 1/05FED)

CRED-5-01 DIARB NEGM P.S. (4,000 FED) 10/00 10/00 12/00 1/01 2/01 3/01 6/03 3/01 3/03 6/03

CR. -00I SAFOUR P.S. (0,000 FED) 10/00 10/00 12/00 1/01 2/01 3/01 6/03 3/01 3/03 6/03

CODED-6-01 GABAL MARYANN & 5/03CODED-7-01______ SHANDORRA (10,000 FED=) 6/00 9/00 11/00 12/00 1/01 2/01 5/03 2/01 2/03

CODED-7-01 MATARIYA (15,000 FED) 6/00 9/00 11/00 1/SI 2/01 3/01 5/04 1 3/01 3/04 1 5/04

CNME-8-01 IBRAHEMYA P.S. (9,000 FED) 7/00 9/00 11/00 12/00 1/01 2/01 5/03 1 2/01 2/03 5/03CNME-S-01 ASLAAN P.S. (0,000 FED) 9/00 9/00 1H/00 12/00 1/01 2/01 5/03 2/01 2/03 5/03

CODME-I"l- MAKOUSA, AL SARWA &DELGA (1 1,000 FED) 0/00 0/00 10/00 12/00 1/01 2/01 11/03 2/01 0 /03 11/03

CRUE 11-01 BENI SALEH, HOSHET EL 8/00 9/00 11/00 12/00 1/01 2/01 51/03 2/01 2/03 5/03DELGA & SOUHAG EL OLA(0000 FED)I

CRUE -12-01 ARMANT EL MOHIET (4000 7.00 8/00 10/00 11/00 12/00 1/01 4/03 1/01 1/03 4/03FED)

MP413-01 PVC/PE POWDER (2,000 -8/00 /00 10/00 12/00 1/01 3/01 2/01 9/01 - - 8/01 9/01TONS)

MP-14-01 PVC/PE POWDER (2,000 10/00 10/00 12/00 2/01 3/01 4/01 4/01 11/01 - - 10/01 11/01

TONS) IMF.15-01 SYNTHETIC FILTER CLOTH

(1,500 M) .10/0 10/00 12/00 1/01 2/01 3/01 3/01 10/01 - 9/01 10/01

EDE-16-01 MISC. EQUIP REQUIRED BYDRI INC. SPARE PARTS 10/W 100 11/01 3/01 5/01 7/01 7/01 4/02 - - 2/02 4/02

EOOM-17-01 PROC. OF 6 LUBRICATIONTRUCKS 10/00 11/00 1/01 3/01 5/01 7/01 7/01 6/02 - .. 3/02 6/02

IN-18-01 COMPUTERS, OFFICEEQUIP. & UNFORESEEN FOR 9/00 10/00 12/00 2/01 3/01 5/01 5/01 10/01 - _ 9/01 10/01EPADP

IN-19-01 PRODUCTON OFCOMMUNICATION O/W 10/00 12/00 2/01 4/01 6/01 6/01 12/01 - _ 9/01 12/01PAMPHLETS, ETC. FORSOCIAL - PARTICIPATORYWORK. _ _

-68 -

ANNEX 6Table 1

Page 2 of 4

TENTATIVE TENDERING AND DISBURSEMENT SCHEDULE FOR CONTRACTSTO BE FINANCED BY THE WORLD BANK

TENDER DECRIPTION OF CATCHMENT ESTIMATEDPACKAGE FOR CIVIL WORKS AND/OR TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULE

DESIGNATION EQUIPMENT/MATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

DESCRIPTION US$ LE & BIDS EVA. AWARD LC. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALS

TENDERDOIC.

INITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-

ADVANCE TION VERY LATION TANCE

V-20-01 PROCUREMENT OF INITIAL 7/00 S/00 10/00 12/00 2/01 4/01 4/01 '-- 10/01 1/02

BATCH OF VEHICLES FOREPADP & DRI STATIONWAGONS (2), PICKUP DOUBLE

__________ CAB,~IN(4), MOTORCYCLES(56)IIICNED-50-02 EL WADEY P.S. (15,000 FED) 12/00 3/01 5/01 6101 7/01 8/01 11/04 8/01 .004 11/04

CNED-s5-02 MATARIYA P.S. (20o000 FED) 12/00 4/01 6/01 7/01 9/01 10/01 7/05 10/01 4/05 7/05

CNED-52-02 FARASCOR P.S. (15,010) 3/01 5/01 7/01 8/01 10/01 11/01 2/05 11/01 11/04 2/05

CRED-53-02 SHOUBRA SOURAH 1&2, EL 3/01 5/01 7/01 8/01 10/01 11/01 2/05 11/01 11/04 2/05

KANAYAT & EL SODS (15,000FED), 1, 2, & 3

CRED-54-02 AL AZIZYA, MEIT ASSAM & 1/01 4/01 6/01 7/01 9/01 10/01 7/04 10/01 4/04 7/04

MAN'GHIUL (10,000 FED)ICRED-55-02 AGHOUR I&2 & FARSIS (10,000 3/01 0/01 7/01 8/01 10/01 11/01 8/04 11/01 5/04 8/04

FED)CODED-56-02 EL DABAA & EL MARAEIYA 1/01 3/01 5/01 6/01 8/01 9/01 12/04 9/01 9/04 12/04

(20,000 FED)CNME-57-02 EAST NILE & TERSA P.S. (13,000) 1/01 3/01 5/01 6/01 8/01 9/01 12/04 9/01 9/04 12/04

CNME-s5-02 MAKOUSA & AL SAWRA P.S. 3/01 5/01 7/01 8/01 9/01 10/01 11/04 10/01 10/03 1/04

~~~~(8,000 FED)CONME-59-02 EL KATAR, EL KHOHOUG (6000 1/01 3/01 5/01 6/01 7/01 3/01 11/03 8/01 11/03 11/03

FED)CODME-60-02 TELMA,EL SHEKHFADEL & EL 4/01 6/01 8/01 9/01 10/01 11/01 2/04 11/01 11/03 2/04

1NASIRYA (0,000 FELD)CODME-61-02 KALIK (12000 FED) _ 6/01 8/01 10/01 11/01 12/01 1/02 7/04 1/02 4/04 7/04

CONUE-62-02 TOMAS & AFIA (15,000 FED) 1/01 3/01 5/01 6/01 7/01 8/01 13/05 I /01 3/05 3/05

CRUE-63-02 NORTHWEST FATIRA, DRAW & 3/01 5/01 7/01 0/01 9/01 10/01 6/05 10/01 3/05 6/05

EKLEET (9,000 FED)MP-64-02 PVC/PE POWDER (2,000 TONS) 4/01 5/01 7/01 8/01 9/01 10/01 10/01 5/02 _ 4/02 5/02

MP-65-02 PROCUREMENT PVC/PE 7/01 8/01 10/01 11/01 12/01 1/02 1/02 8/02 - _ 7/02 8/02

POWDER (0,100 TONS)MF-66-02 SYNTHETIC FILTER CLOTH 5/01 6/01 8/01 9/01 10/01 11/01 11/01 6/02 _ 5/02 6/02

I1.080 KCM)EODM-67-02 OPEN DRAINS EQUIP 2/01 3/01 5/01 7/01 9/01 11/01 11/01 11/02 _ 8/02 11/02

FORKLIFT (7) WEED CONTROLATT'ACH (7) 1

EODM4s-682 WORKSHOP TOOLS (6 SETS) 3/01 5/01 7/01 S/01 9/01 10/01 10/01 7/02 4/02 7/02

- 69 -

ANNEX 6Table 1



TENDER DECRIPTION OF CATCHMENT ESTIMATEDPACKAGE FOR CIVIL WORKS AND/OR TOTAL COST TENDERING SCHEDIULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULEDESIGNATION EQUIPMENT/MATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

DESCRIPTION USS LE & BIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALSTENDERDOC.I

INITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-ADVANCE TION VERY LATION TANCE

V-69-02 VEHICLES-STATION 4/01 5/01 7/01 9/01 10/01 11/01 11/01 5/02 _ _ 3/02 5/02WAGONS(2), PICKUP DOUBLECABIN(34), SINGLE CABIN(16),MOTORCYCLES(12) BICYCLES(250)

IN-70-02 COMPUTERS, OFFICE 1/01 3/01 5/01 7/01 8/01 9/01 9/01 2/02 - 12/01 - 2/02EQUIPMENT FOR EPADP

IN-71-02 AUDIOVISUAL EQUIP FOR 2/01 4/01 6/01 8/01 9/01 10/01 10/01 6/02 - - 4/02 - 6/02SOCIAL PARTICIPATORYCOMPONENT

PE-72-02 PROC. OF MOBILE PUMPS FOR 4/01 6/01 8/01 11/01 12/01 1/02 1/02 6/04 - - 6/03 12/03 6/04EMERGENCY CENTERS

CNED-94-03 BAHR EL BAKER P.S. (25,000 12/01 2/02 4/02 6/02 7/02 8/02 5/06 8/02 2/06 - - 5/06FED)

CODFD-95-03 FARASCOR P.S. (20,000 FED) 2/02 2/02 5/02 7/02 0/02 9/02 3/06 9/02 12/05 - - 3/06CRUE-96-03 EL SALAA, EL MATAANA 2/02 4/02 6/02 8/02 9/02 10/02 1/06 10/02 10/05 1/06

HAGAZI EL TALTA (15,000 FED)

CODUE-97-03 ABOU TEIG & UNINDENTIFIED 2/02 4/02 6/02 8/02 9/02 10/02 3/05 10/02 12/04 3/05__________ (15,0010 FED)

MF-98-03 SYNTHETIC FIBER CLOTH 6/02 7/02 9/02 11/02 12/02 1/03 1/03 8/03 - - 6/03 8/03(R500 KM)

EODM-99-03 PROC. OF HYDRAULIC 3/02 4/02 6/02 8/02 9/02 11/02 11/02 11/03 - - 8/03 11/03EXCAVATORS (5)

V-100-03 MOTORCYLCES (50) 5/02 6/02 7/02 8/02 9/02 10/02 10/02 6/03 ---- 4/03 6/03EDE-101-03 MISC. EQUIPMENT REQUIRED 5/02 6/02 7/02 8/02 9/02 10/02 10/02 6/03 4/03 6/03

BY DRICRED-127-04 EL SANAFIEN & THALA I&2 2.03 4/03 6/03 8/03 9/03 - 10/03 3/06 10/03 12/05 - - 3/06

____________ ( (1,00 FED)IICRED-12 AKRASH OBSHER BAHR & 3/03 5/03 7/03 9/03 10/03 - 11/03 10/05 11/03 7/05 - - 10/05

__ __ _ __ _ SAFT (5,000 FED) __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _

CODED-129-04 BAHR EL BAKER (15,000 FED) 12/02 2/03 4/03 6/03 7/03 - 8/03 5/06 8/03 2/06 _ 5/06

- 70 -

ANNEX 6Table 1



TENDER DECRIPTION OF CATCHMENT ESTIMATEDPACKAGE FOR CIVIL WORKS ANDIOR TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULE

DESIGNATION EQUIPMENT/MATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPENDESCRIPTION US$ LE & BIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALS

TENDERDOC.

INITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-

ADVANCE TION VERY LATION TANCE

CONME-130-04 KAMADIR (10,000 FED) 1/03 3/103 : 5/03 6/03 7103 8103 3106 8/03 12/OS 3/06

CRUE-131-04 WEST EL KOSIA EL OLA & 2/03 4/03 61/03 7/03 8/03 9/03 12/05 9/03 81/05 12/05GEG= E LA (801 FED)I

MF-132-04 SYNT ETC FIRER CLOTII 6/03 7/03 9/03 11/03 12/03 V. 1/04 10/04 - 7/104 10/04

(1,000=KV-133-04 VEHICLES-PICKUP SINGLE 5/03 6/03 7/03 8/03 9/03 10/03 10/03 7/04 4/04 7/04

CABIN (24) PICKUP DOUBLE______ _____ CABIN (2)

IN-134-04 AUDIO REPRODUCTION - 5/03 6/03 7/03 8/03 9/03 10/03 10/03 5/04 - - 4/04 5/04SOCIAL PARTICIPATORY

_________COMPONENT

CRED-148-05 KOFOUR NEGM (7,000 FED) _E 3/04 /504 6/04 7104 1/04 11/06 8/04 /00 11/06

CRUE-149-05 KAFT EL OLA & SOUTH I. 3/04 5/04 6/04 7/04 8/04 11/06 1/14 0/06 11/06

KOMOMOBO (6000 FED) I I .

CODUE-150-05 EL MONSHAH (5000 FED) 2/04 4/04 6/04 7/04 8/04 5/04 6/06 9/04 3/06 6/06

Leaend of Designations:

CNED-1-2001 : C-Civil Works; N-Old cultivated areas; ED-East Delta; 1-2000-First contract of FY2001

CONWD-3-2004: ON-New reclaimed areas; WD-West Delta

CRMD-4-2005 : R-Renewal areas; MD-Middle Delta

CODME-2-2002: OD-Open drains; ME-Middle Egypt

CNUE-3-2003 : UE-Upper Egypt

MP-13-2001 Material-PVC/PE Powder

MF-14-2001 Material-Filter Synthetic Fabric

EDE-16-2001 : E-Equipment; D-DRI; E-Environmental

EODM-17-2001: ODM-Open drains maintenance

INS-18-2001 : INS-Institutional

V-20-2001 V-Vehicles

PE-70-2002 : PE-Pumping equipment for emergency centers

ESDM-115-2003: SDM-Subsurface drains maintenance

SDE-48-2001 SDt-Stationery, office equipment to DR( for environmental monitoring activities

CSP-89-2001 Contractual services for two pilot schemes

SBP-90-2002 SBP-Stationery, office equipment to Water Board for two pilot schemes

CSMS-143-2004 Contractual services for mid-term/completion reports and social participatory activities.

- 71 -

Table 2

TENTATIVE TENDERING AND DISBURSEMENT SCHEDULE FOR CONTRACTSPaeIo3TO BE FINANCED BY EUROPEAN INVESTMENT BANK JEIB)

TENDER DECRIPTION OF ESTIMATEDPACKAGE CATCHMENT FOR CIVIL TOTAL CO)ST TENDERI NG SCHED ULE DISBUR.SEMENT SCHEDULE CONTR ACT SCHEDULEDESIGNATI ON WORKS AND/OR MI lL DESIGN ADVE RTISE OPEN BID ICONTRACT OPEN

EQ UIPMENT/MATERI AL US E & BIDS EVA. AWARD L. C. DISBU RSEMENT CIVIL WORKS EQUIPMENT AND MATERIALSDESCRIPTION TENDER

INITIAL FINAL START COMPLE DELI- INSTL ACCEP-

CNWD-21-01 AL HADIEN P.S. (7,000 FED) 6/00 9/00o -II/00 12/00 1/01 2/01 5/03 2/01 2/03 VER LAIO 0N3CCNWD-22-0 1 SIDI EISA P.S S(8,000 FED) _ _ /00 10/00 12/00 1/01 2/01 _3/01 6/03 3/01 3/03 _ 6/03

CNWD23-01 T _IBIES P.S. (8,000 FED) 6/00 11/00 1/00 2/01 3/01 _40 /3 40 /3__70CNWD-24-01 EDKO P.S. (19,600 FED) 8/00 1 9/00 11/00 I1/01 3/01 4/01 10 4/1 10/04 _ _CONWD-25-01 AL BUSTAN I& 2 (16,500 FED) _ 8/00 8/00 IO/Go 12/00 2/01 _3/01 12/04 3/01 9/04 12/04CONWD-26-01 AL TAHRIR AL GANOUBY 9/00 12/00 2/01 3/01 4/01 5/01 2/04 5/01 11/03 __2/04

CRWD-27-01 (11,000 ED) U fAM 9/00 1i0/00 1i2/00 1/01 2/01 _3/01 6/03 3/01 3/03 6/03

CODWD-28-01 AL MASRAF EL GHIARBI 9/00 11/00 1/01 2/01 3/01 . 4/01 7/03 4/01 4/03 _7/03

CODWD-29-01 A ASI ,,& (8,000 FD 10/00 12/00 2/01 3/01 4t01 5/01 8/03 5/01 S/03_ 8/03

CRME-30-01 KOLA & KHOULOS (4,000 _ 70-0 10/00 12/00 1/01 2/01 _3/01 6/03 3/01 3/03 6/03FED) _T_

CRME-31-01 AL SHORFA (6,000 FED 10/00 10/00 12/00 1/01 2/01 _ 3/01 6/03 3/01 3/03 6/03EM-32-01 PROC. OF 10 DIIMP TRUCKS 10/00 11/00 li0i 3/01 5/01 6/01 6/01 6/02 .3/02 6/02

AND 6 MOBILE WORKSHOPS

MP-33-01 PROC. OF PVC/PE POWDER _ _ 7/00 8/00 10/00 12/00 1/1 2/01 2/01 9/01 8/0f 9/01(2,000 TONS)

MP-34-01 PROC. OF PVC/PE POWDER _ _ 8/00 10/00 12/00 2/01 3101 4/01 4101 11/01 10/01 11/01(2,000 TONS)

MF-35-0 1 SYNTHETIC FILTER CLOTH 8/00 9/00 11/00 1/01 2/01 3/01 3/01 1/19/01l 10/01(1,500 KM)_

CRME-73-02 EL BAHA & EL SHOUEIKH 2/01 4/01 6/01 7/01 8/01 9/01 7/03 09/01 4/03 7/03

CRM E-74-02 KOM0 ENGAHA 3/01 5/01 7101 8/01 9/01 _10/01 1/04 10/01 4/04 _7/04HAKRAMORA, MOKHTAR &

EL DWALT (9,00 FD)CRWD-75S02 EL TANAFIZY EL ICIANDAK, 4101 6/01 8/01 9/01 10/01 _11/01 gm0 II/01 5104 _8/04

EL GHARDI SIIAYOUR (9,550

MP-76-02 PROCUREMENT OF PVC/PE 4/01 5/01 7/01 8/01 9/01 10/01 10/01 5/01 4/02 5/02POWDER (2000 TONS)___ .

MP-77-02 PROC. OF PVC/PE POWDER(1,100 TONS)_

MF-78-02 SYNTHETIC FILTER CLOTHI(1,500 KM)_

PE-79-02 PROC. OF PUMPING EQUIP.CNWD-102-03 EL TABIYA P.S. (17,700 FED) 1/02 3/02--- 5/02 16/02 1 7/02 _ 8/02 3/06 8/02 12/05 13/06CNWD-103 03 EL BOSELY & AL KALAA P.S. 3/02 5/02 7/02 8/02 9/02 _ 10/02 6106 10/02 3106 __60

CRWD-104-03 GABARES EL GHARBY (5,000 = 2/02 4/02 6/02 7/02 8/07 - 9/02 6/04 9/02 30 /

-'72 -

ANNEX 6Table 2


TO BE FINANCED BY EUROPEAN INVESTMENT BANK (EIB)

TENDER DECRIPTION OF ESTIMATEDPACKAGE CATCHMENT FOR CIVIL TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULEDESIGNATION WORKS AND/OR MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN


DOC.INITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-ADVANCE TION VERY LATION TANCE

CODWD-Il05-03 EL BOSELY& IBIES (25,000 2/02 4/02 6/02 7/02 9/02 10/02 1/06 10/02 10/05 1/06FED)

CODWD-106-03 AL KALAA & UNIDENTIFIED 3/02 5/02 7/02 8/02 10/02 11/02 2/06 11/02 I/05 _ 2/06(22,000 FED) _

CNME-107-03 EL ROUS EL TANIA (4,000 4/02 6/02 8/02 10/02 11/02 12/02 3/06 12/02 3/06 _ _ 6/06FED)

CRME-108-03 BENI SALEH, ABOU GABAL 2/02 4/02 6/02 7/02 8/02 9/02 9/05 9/02 6/05 9/05(11,000 FED)

CRME-109-03 DOMOSHIA, EL TAGEN, AL 3/02 5/02 7/02 8/02 9/02 10/02 11/05 10/02 8/05 - 11/05THALTHA (13,000 FED)

CRME-1 103 KOM INGASH & SOUTH 4/02 5/02 7/02 8/02 9/02 10/02 9/05 10/02 6/05 - 9/05EHNASIA (9,000 FED)I

CODME-111-03 EL SHEKH ZEYAD & TERSA 2/02 4/02 6/02 7/02 8/02 9/02 3/05 10/02 12/04 _ 3/05CODME-1 12-03 EL BROM BEL 3/02 5/02 7/02 8/02 9/02 10/02 1/05 9/02 2/05 - 5/05MF-113-03 SYNTHETIC FILTER CLOTH 3/02 4/02 6/02 7/02 9/02 10/02 10/02 5/03 4/03 5/03

(1,500 K(M) EODM-114-03 SPARE PARTS OPEN DRAINS 5/02 6/02 8/02 9/02 10/02 12/02 12/02 8/03 _ - 6/03 81/03

EQUIP - FIRST BATCIIPE-I 15-03 PROC. OF PUMPING EQUIP yi 4/02 6/02 7/02 9/02 11/02 10/02 4/05 _ 4/04 10/04 4/05EODM-I 16-03 SPARE PARTS FOR 2/02 4/02 6/02 7/02 9/02 11/02 11/02 7/03 _ 5/02 - 7/03

SUBSURFACE MAINT EQUIPEODM-117-03 SPARE PARTS FOR 2/02 3/02 5/02 7/02 9/02 11/02 11/02 6/03 _ _ 4/03 - 6/03

EXISTING EQUIPESDM-118-03 FLUSHERS (10), WATER 4/02 5/02 7/02 9/02 11/02 1/03 1/03 4/04 - - 10/03 - 4/04

TANKS (10), BOOSTERPUMPS (10), TRACTOR (10)

CONWD-135-04 AL TAHRIR AL GANOUBY 1/03 2/03 4/03 6/03 7/03 8/03 7/06 8/03 4/06 - - 7/0619,000 FED)

CONWD-136-04 FIRST & SECOND EL 1/03 2/03 4/03 6/03 7/03 8/03 3/07 8/03 12/05 - 3/07BUSTAN (23,500 FED) _

CRWD-137-04 EL OLA (3,500 FED) _____ ___ 1/03 2/03 4/01 /3 7/3-003 11/04 8/03 8/4-- 11/04CRME-138-04 GOUREF AND EL ROUS El, 1/03 3/03 5/03 7/03 8/03 - 9/03 3/06 9/03 12/15 _ - 3/06

____________-OLA (10,000 FED)-

-73 -

ANNEX 6Table 2


TO BE FINANCED BY EUROPEAN INVESTMENT BANK (EIB)

TENDER DECRIPTION OF ESTIMATEDPACKAGE CATCHMENT FOR CIVIL TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULEDESIGNATION WORKS AND/OR MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN


DOC.INITIAL FINAL START COMPLE DELI INSTAL- ACCEP-ADVANCE TION VERY LATION TANCE

CNME-139-04 EL SHEKH ZAYED & 1/03 3/03 5/03 6/03 7/03 - 8/03 11/00 8/03 8/06 - - 11/06SENOFER (13,000 FED) ICNME-140-04 EL TEGEN, EL SOF & 2/03 4/03 6/03 7/03 8/03 - 9/03 12/06 9/03 9/06 - 12/06HAWAMDIA (12,000 FED)CNWD-151-05 HARES PUMPING STATION 2/04 4/04 6/04 8/04 9/04 - 10/04 3/07 10/04 12/06 - - 3/07& UNIDENTIFIED (15,500

_______________ FED) 804301 3 7CODWD-152-05 HARES P.S. (15,000 FED) 12/03 2/04 4/04 6/04 7/04 - 8/04 3/07 8/04 12/06 .= 3/07CODME-153-05 BADRASMAN (5,000 FED) 3/02 5/02 7/02 8/02 Sf02 - 10/02 1/06 10/02 10/04 4 - 1/05CODME-154-05 NAWAMDIYA & EL 3/04 4/04 6/04 8/04 9/04 _ 10/04 12/06 10/04 10/06 12/06

MANAWAT (11,050 FED)CODME-1554-5 EL TEBANK EL SAF (6,000 2/04 3/04 5/04 7/04 8/04 9 9/04 0/06 9/04 6/06 _ 9/06

FED)__ _ _ _ _ _ __ _ _ _ _ _ _ _ _

Legend of Desienations:CNED-1-2001 : C-Civil Works; N-Old cultivated areas; ED-East Delta; 1-2000-First contract of FY2001CONWD-3-2004: ON-New reclaimed areas; WD-West DeltaCRMD-4-2005 : R-Renewal areas; MD-Middle DeltaCODME-2-2002: OD-Open drains; ME-Middle EgyptCNUE-3-2003 UE-Upper EgyptMP-13-2001 : Material-PVC/PE PowderMF-14-2001 : Material-Filter Synthetic FabricEDE-16-2001 : E-Equipment; D-DRI; E-EnvironmentalEODM-17-2001 ODM-Open drains maintenanceINS-18-2001 INS-InstitutionalV-20-2001 V-VehiclesPE-70-2002 : PE-Pumping equipment for emergency centersESDM-115-2003: SDM-Subsurface drains maintenanceSDE-48-2001 SDE-Stationery, office equipment to DRI for environmental monitoring activitiesCSP-89-2001 : Contractual services for two pilot schemesSBP-90-2002 SBP-Stationery, office equipment to Water Board for two pilot schemesCSMS-143-2004 Contractual services for mid-term/completion reports and social participatory activities.

- 74 -

ANNEX 6Table 3


TO BE FINANCED BY KMW

TENDER DECRIPTION OF CATCHMENT ESTIMATEDPACKAGE FOR CIVIL WORKS AND/OR TOTAL CDST TENDERING SCHEDULE DISBUPSEMENT SCHEDULE CONTRACT SCHEDULEDESIGNATION EQUIPMENT/MATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

DESCRIPTION USS LE & BIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALSTENDERDOC.


CNMD-36-01 FIRST NO. 8 P.S. (8,000 FED) 6/00 9/00 11010 12/00 1/01 - 2/01 5/03 2/01 2/03 - - 5/03

CNMD-37-01 ZAGLOOL NO. I P.S. (18,000 7/00 8/00 10/00 12/00 2/01 - 3/01 12/04 3/01 9/04 - - 12/04F-ED)

CRMD-38-01 BLAY & AL SANTA 1&2 (6,000 6/00 10/00 12/00 1/01 2/01 - 3/01 6/03 3/01 3/03 - - 6/03ED)

CRMD-39-01 SHEIRBA MALAKAN & EL 6/00 10/00 12/00 1/01 2/01 - 3/01 6/03 3/01 3/03 - - 6/03HAYATEM (6,000 FED)

CRMD40-01 MAHALET RAU, 3&4 (4,000 7/00 11/00 1/01 2/01 3/01 - 4/01 7/03 4/01 4/03 = - 7/03FD)

CODMD-41-01 HAFIR SHEHAB & ULDIN, 9/00 10/00 12/00 2/01 4/01 5/01 8/04 5/01 5/04 _ - 8/04MOHEB &ZAFARANY (27,000FED)II

CNMP-42-01 ASLAN A&B (10,000 FED) 9/00 10/00 02/00 /01 2/101 -- 3/01 6/03 3/01 3/03 6 /03

CODUE-43-01 ASLAN A&B (10,000 FED) 8/00 9/00 01/00 1/01 3/01 1 4/01 1 4/01 10/03 11/04

MP-44-01 PROC. OF PVC/FE POWDEE 7/00 8/00 10/00 12/00 0/01 2/01 2/01 9/01 - - 7/01 09/01(2,000 TONS)

MP-45-01 PROC. OF PVC/IP POWDER 9/00 10/00 12/00 2/01 3/01 4/01 4/01 11/01 - 10/01 11/01(2,000 TONS)

MF-48-01 SYNTHETIC FILTER FABRIC 1/00 9/00 11/00 1/01 2/01 3/01 3/01 50/01 - 9/01 2 10/01(1,500 K(M)I

IN-47-0 PILOT AREAS EXTENSION & 7/00 0/00 10/00 12/00 2/01 3/- 3/01 10/01 7/01 10/01MANTENANCE SECTOREQUIPMENT

SDE-48-01 STATIONARY OFFICE 9/00 10/00 12/00 I/01 2/01 3/01 3/01 10/01 07/01 10/01EQUIPMENT & SPAREPARTS I_____I__

CSDE-49-01 CONTRACTUAL SERVICES 10/00 NEGOTIATE 3/01 - 6/01 6/02 - -3/02 -6/02

WITH DR) FOR WATERQUALITY MONITORING _~ -1 50 /1 70

CNMD-80-02 ABU AL KOCA, KAFR EL 1/01 3/01 5/04 8/01 2/04 5/04ATRASH, GHONEIN (11,000 F) I___ ___

CRMD-81-02 DAHTOURA, SHOUNY EL 2/01 4/01 6/01 7/01 0/01 1/ 9/01 12/04 9/01 9/04 4 12/04THANIA TOUKH 2, &SAMATAY (15,600 FED) ________

CRMD-02-02 DENSOA WY, 1,3,4&5 (9,000 2/01 4/01 6/01 7/01 0/01 -9/01 3/04 9/01 12/03 -- 30

FED) ____

CODMD-83-02 NO. 3 P.S. (23,000 FED) I/Il 3/01 0/01 6/01 7/01 - /01 11/04 I/Il 8/04 --- 11/04CNUEP-84-02 SECOND GABAL A&B P.S . 2/01 3/01 s/01 6/01 7/01 - 0/0 3/04 0/01 12/03-

(0,000 FED)____CRUE-05-02 EL MEHROUKCA (S,000 FD ___ 4/01 5/01 1/01 9/01 10/01 - 11/01 1/04 11/01 12/03 -- 4/04CODUE-86-02 EL MARASHDA (12,000OFED 3/01 5/01 7/01 8/1 a 9/01 - 10/01 6/04 10/01 3/04 -- 6/04MF-87-02 PROC. OF PVC/PE POWDER 3/01 5/01 7/1 00 /1 10/01 10/01 5/02 - -- 4/02 5 /02

______ ______ (2,000 TONS) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _

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ANNEX 6Table 3


TO BE FINANCED BY KfW

TENDER DECRIPTION OF CATCHMENT ESTIMATEDPACKAGE FOR CIVIL WORKS AND/OR TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULEDESIGNATION EQUIPMENT/MATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

DESCRIPTION US$ LE & BIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALSTENDERDOC. o"


MP-S8-02 PROC. OF PVC/PE POWDER =/01 10/01 12/01 2/02 3/02 4/02 4/02 11/02 - - 10/02 - 11/02(2,000 TONS)

MF-89-02 SYNTHETIC FILTER CLOTH 10/01 11/01 1/, 3/02 4/02 5/02 5/02 12/02 - - 11/02 12/02(11500 KM)

V-90-02 VEHICLES-MICROBUSES 11 1/01 1/01 3/01 5/01 7/01 9/01 9/01 6/02 - - 3/02 _ 6/02PASSENGERS(6), MCIROBUSES25 PASSENGERS (6) & BW (25PASSENGERS (6)

CSP-91-02 CONTRACTUAL SERVICES 5/01 NEGOTIATE 7/01 _ 8/01 8/06 - 6/01 _ -FOR TWO PILOT SCHEMES

CSDE-92-02 CONTRACTUAL SERVICES 4/02 NEGOTIATE 7/02 8/02 8/05 8/05WITH DRI FOR WATERQUALITY MONITORING

SBP-93-02 STATIONARY, OFFICE EQUIP., 2/01 3/01 5/01 6/01 7/01 3/01 5/02 2/02 5/02COMMON MATERIAL ETC.

CNMD-1 19-03 NO. 3 P.S. & EL ZEINY P.S. 1/02 3/02 5/02 7/02 8/02 9 9/02 6/06 9/02 3/06 - 6/06(11,000 FED)

CNMD-120-03 KOM AL ARAB & KOM EL 2/02 4/02 6/02 8/02 9/02 _ 10/02 1/06 10/02 10/05 - 1/06KASB (12,000 FED)

CRMD-121-03 ELKHADRAWIYA, EL THANIA 1/02 3/02 5/02 7/02 8/02 9/02 12/05 9/02 9/05 - - 12/05SAMATE, EL ATWA &KATOUR (14,800 FED)

CODMD-122-03 HAFIR SHEHAB EL DIN (20,000 2/02 4/02 6/02 8/02 9/02 _ 10/02 1/06 10/02 10/05 - - 1/06FED)I I

CNUE-123-03 TAHTA A. EL REZKA P.S. (8,000 1/02 3/02 5/02 7/02 8/02 9 0/02 6/06 9/02 3/06 - 6/06FED)

MF-124-03 SYNTHETIC FILTER CLOTH 3/02 4/02 6/02 8/02 9/02 10/02 10/02 5/03 - - 4/03 - 5/03(1,500 EM)

EODM-125-03 MISC. EQUIPMENT 4/02 5/02 7/02 9/02 10/02 12/02 12/02 12.03 - - 9/03 12/03EODM-126-03 FLAT BED TRUCKS (19) 3/02 4/02 6/02 8/02 10/02 12/02 12/02 12/03 - - _ -- 12/03CNMD-141-04 THIRD NO. S LOWER, EL 1/03 2/03 4/03 6/03 7/03 - 0/03- 5/06 8/03 2/06 -- 5/06

SABRYA (10,800 FED)CNMD-142-04 KAFR EL SAWALEM 2/03 4/03 5/03 7/03 8/03 - 9/03 6/06 9/03 3/06 _ 6/06

AHMADIYA DEMLASH (8,200FED)

CRMD-143-0 DENSHAWY 1-5, EL MESELHA 3/03 5/03 7/03 6/03 9/03 10/03 1/07 10/03 10/06 1/07& SUGAR (8,200 FED) ___

CNUE.144-04 EL MANSHIE, EL REDEIYSIA 1/03 3/03 5/03 6/03 7/03 _ 0/03 3/07 9/03 12/06 _ 3/07P.S. (1 1,000 FED)

EDDM-145-04 MOTOR GRADERS () & MISC. 3/03 4/03 6/03 8/03 9/03 10/03 10/03 10/04 7/04 10/04EQUIPMENT ____I

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ANNEX 6Table 3

Page 3 of 3

TENTATIVE TENDERING AND DISBURSEMENT SCHEDULE FOR CONTRACTSTO BE FINANCED BY KfW

TENDER DECRIPTION OF CATCHMENT ESTIMATED

PACKAGE FOR CIVIL WORKS AND/OR TOTAL COST TENDERING SCHEDULE DISBURSEMENT SCHEDULE CONTRACT SCHEDULE

DESIGNATION EQUIPMENTIMATERIAL MIL MIL DESIGN ADVERTISE OPEN BID CONTRACT OPEN

DESCRIPTION US$ LE & TDBIDS EVA. AWARD L.C. DISBURSEMENT CIVIL WORKS EQUIPMENT AND MATERIALS

TENDERDOC.j____ _

DOC. INITIAL FINAL START COMPLE DELI- INSTAL- ACCEP-

ADVANCE _ TION VERY LATION TANCE

V-146-04 MICROBUS 11 PASSENGERS 3/03 4/03 6/03 8/03 10/03 11/03 11/03 8/04 5/04

(3), MICROBUS 25PASSENGERS (7), BUS 25PASSENGERS (7) ____ ___

CSR-147-04 CONTRACTUAL SERVICES 7/03 NEGOTIAT 9/03 - - - - - - 12/06

FOR M& E & SOCIAL EACTIVITIES

CRMD-157-05 EL ATAF EL THANIA (6,800 2/04 4/04 6/04 7/04 8/04 - 9/04 3/07 10/04 12/06 - - 3/07

FED)CODMD-158-05 THIRD NO. 8 LOWER (10,000 3/04 5/04 7/04 8/04 9/04 - 10/04 5/07 11/04 2107 - - 5/07

______________ FED)ICNUE-159-05 AL BAYADIYA, EL HOLA & 1/04 3/04 5/04 6/04 7/04 - 0/04 3/07 9/04 12/06 - - 3/07

UNIDENTIFIED (8,000 FED)CRUE-160-05 NAGE HAMMADI EL OLE EL 1/04 3/04 5/04 6/04 7/04 8/04 11106 8/04 8/06 11/06

GHARBIA & EL SHARKIA (5000FED)

EODM-161-05 MISCELLANEOUS EQUIP. 1/04 3/04 5/04 7/04 9/04 10/04 10/04 10/05 7/00 10/05

EODM-162-0s SPAREPARTS OF VEHICLES & 7/04 7/04 9/04 10/04 12/04 1/0s 1/00 0/05 5/05 0/OS

_,~______ OTHER EQUIPMENT __ _ _ _ ___ _

Legend of Deshinations:CNED-1-2001 : C-Civil Works; N-Old cultivated areas; ED-East Delta; 1-2000-First contract of FY2001CONWD-3-2004: ON-New reclaimed areas; WD-West DeltaCRMD-4-2005 : R-Renewal areas; MD-Middle DeltaCODME-2-2002: OD-Open drains; ME-Middle EgyptCNUE-3-2003 UE-Upper EgyptMP-13-2001 Material-PVC/PE PowderMF-14-2001 Material-Filter Synthetic FabricEDE-16-2001 E-Equipment; D-DRI; E-EnvironmentalEODM-17-2001 ODM-Open drains maintenanceINS-18-2001 INS-lnstitutionalV-20-2001 V-VehiclesPE-70-2002 PE-Pumping equipment for emergency centersESDM-115-2003: SDM-Subsurface drains maintenanceSDE-48-2001 : SDE-Stationery, office equipment to DRI for environmental monitoring activitiesCSP-89-2001 : Contractual services for two pilot schemesSBP-90-2002 SBP-Stationery, office equipment to Water Board for two pilot schemesCSMS-143-2004 Contractual services for mid-term/completion reports and social participatory activities.

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ANNEX 6Table 4

Page I of ITENTATIVE FINANCING ARRANGEMENTS AND DISBURSEMENT CATEGORIES

(ALL AMOUNTS IN "000 US$)

ITEM IBIRD FINANCING PLAN

DISBURSEMENT IBRD EIB FWGOVERNMENT NETHER0LANDS TOTALCATE- AMT. B CON- LOC FOR- TOTAL LOC. FOR- TOTAL LOC. FOR- TOTAL LOCAL FOR- TOTAL LOC. FOR- TOTAL LOC. FOR- TOTALGORY '000 TRACT _ IEICN _ EIGN _ EIGN EIGN EIGN EIGN

L. CIVIL WORKS(.) CONTRACT COST 41,500 41,500 43,200 43,200 400 33,200 33,600 89560 - 89,560 899.60 117,900 207,960(1,) RECURRENT - - - --- 2,920 2 ,920 2,920 - 2,920

COST(~BUILDINGS -- - -- 40 - 40 840 -- 40

(d) LAND - - - -34,710 - 34,710 34,710 -- 34,710ACQUISITION& ACQUISITION 6,770

(e) DUTIES & TAXES _ _ 67 6,770 6,770 _ 6,770

INCLUDING ONEQUrPMENTSUBTOTAL _ 41,500 41,500 43,200 43,800 400 33,200 33,600 134,800 134,800 135,200 117,900 253,100DISBURSEMENTI-A:CIVIL WORKS I-A 4,500 32%FOR CONTRACTSAWARDED WITHIN2.0 YEARS AFTEREFFECTIVENESSI-B: CIVIL WORKS I-B 25,000 54%FOR CONTRACTSAWARDED WITRHINIl-A: PYC/PE HI-A 9,500 100%POWDER FORCONTRACTS (EX-AWARDEDBEFORE 2 YRS FACTOAFTERRYEFFECTIVENESS ORI-B: OTHER EQUIP l1-B 8,000 85% 8,500 8,500 6,800 6,800 _ 5,400 5,400 - _ _ _ 400 400 _ 21,100 21,100

MATERIALS OFTOTAL

AS- TECHINICAL III 50 COST _ _ _ 1,000 1,000 _ 600 2,600 3,200 600 3,600 4,200ASSISTANCE &TRAINING-

(IFPROC.LOCAL

100%OFTOTALCOST

IV- UNALLI3CATED IV 2,-950 - - --

TOTDNALLOCATFD IV 050,080 _50,0no 50,000 50,880.060 _ 400 39,60 40,000 134,000 134,000 600 3,000 3,600 130,800 142,600 278,405

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Annex 7. Institutional AspectsEPADP Structure, Project Implementation and Monitoring and Pilot Program for Integrated

Water User's Irrigation and Drainage Associations

A. Introduction

1. The first phase of the National Drainage Program (NDP-I) consisting of 0.7 million feddans iscurrently under implementation with co-financing from the World Bank, Germany (KfW) and theNetherlands. The second slice, NDP II comprises about 0.80 million feddans of the remainingirrigation areas of Egypt requiring drainage systems. The main objectives of the proposed project areto increase agricultural productivity on about 0.8 million feddans of irrigated land by improvingdrainage conditions through control of waterlogging and salinity, thereby increasing crop yields andrural incomes. Other objectives are capacity building for EPADP through technical assistance andtraining activities provided under German (KfW loan/grant), Netherlands and Canadian bilateralassistance.

2. The proposed project will provide new subsurface drainage for about 500,000 feddans, andrenew and rehabilitate old subsurface drainage in about 300,000 feddans already provided withearlier types of drainage systems in the sixties and seventies. To improve the conveyance capacity ofthe drainage system where subsurface drains are installed, the project will also deepen and remodelopen conveyance drains serving about 365,000 feddans of irrigated lands in the Nile Valley andDelta.

B. Functions and Structure

3. The Ministry of Water Resources and Irrigation (MWRI) is responsible for the development ofwater resources and the construction and maintenance of the irrigation and drainage systems. TheIrrigation Department of MWRI is responsible for the O&M of all public canals. The National WaterResearch Center conducts research on all water-related issues, including reuse of drainage flows,through 12 research institutes, one of which is of particular concern to the NDP, i.e., DRI. TheMechanical and Electrical Department (MED) of MWRI is responsible for installing, operating andmaintaining all irrigation and drainage pumping stations.

4. The semi-autonomous Egyptian Public Authority for Drainage Projects (EPADP) isresponsible for the design, procurement and implementation of all drainage works, as well as formaintaining field drainage systems and open drains. The authority is headed by a chairman andassisted by a vice-chairman. There are two directorates at its Cairo headquarters with fivedepartments: Research and Design (RDD), Planning and Follow-up (PFD), Electrical and Mechanical(E&M), Sector Affairs and Drainage Advisory Service (SADAS), and Administration and Finance(AFD). Each directorate is headed by an undersecretary. RDD is responsible for (i) all pre-drainageinvestigation and the design of field drainage works through its Field Investigation and Design Unitand for (ii) the design of buildings and pumping stations through its Buildings and Structures DesignUnit. PFD is responsible for budgeting, the preparation of five-year plans, annual work programs,and monitoring implementation progress through its unit of Planning and Follow-up. TheMonitoring and Evaluation (M&E) unit of PFD monitors the drainage works through soil and watersampling. E&M is responsible for the supervision of new pumping stations built by EPADP and forthe procurement of construction equipment and vehicles. The unit of pipe factories is responsible forthe procurement of equipment and PVC/PE powder for the factories and for pipe production.

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SADAS is responsible for sectors affairs and drainage Advisory services through drainage Advisoryunit in each sector. AFD conducts administration and financial matters through its two units, one foradministration and another for finance. EPADP employs about 7,100 permanent staff in itsheadquarters and regional offices. Of these, about 780 are civil, mechanical and agriculturalengineers and another 1,300 technical assistants. EPADP has adequate staff, but staff distributionover field directorates varies.

5. In the field, EPADP is structured into five regional sectors: Upper Egypt, Middle Egypt, theEast Delta, Middle Delta and the West Delta. Each regional sector is headed by an undersecretarywith separate directorates for works and for maintenance. The number of directorates in each regionvaries according to the size of the area to be implemented or maintained. Typically, a regional officeconsists of five directorates, two for the implementation of works and three for the maintenance ofboth subsurface drainage system drains and associated open drains.

6. The Drainage Research Institute (DRI) was established in 1976 under an Egyptian-Dutchinitiative and is organized into four research divisions: Field Drainage, Surface Drainage, FieldSurveys and Economic Evaluation. Its technical staff numbers of about 60 are mostly civil andagricultural engineers with a few soil scientists and agro-economists. In the past, DRI focussedalmost exclusively on research related to the land drainage program using pilot studies and surveys totest design criteria, materials and construction methods. More recently, the Institute has beenengaged in water reuse studies and monitoring of water quality.

C. Project Implementation Arrangements

7. Project Coordination. EPADP would be responsible for implementing the project, along linesbroadly similar to those followed under the ongoing NDP-I. DRI is responsible for researchconnected with covered subsurface drainage system, including the impact of drainage on water tablesand salinity as well as the reuse of drainage water. DRI would also monitor water quality at selectedpoints in the open drains and analyze samples for various parameters. Similarly, assistance fromother ministries would be required to address pollution created by discharge of industrial anddomestic wastes into open drains. To facilitate implementation, a project coordination committee,established under the ongoing NDP-I will continue. The committee is chaired by the chairman ofEPADP and is composed of members from WRC, the irrigation sector, MED, the Ministry ofAgriculture and Land Reclamation, the Ministry of Industry, the Ministry of Housing and theMinistry of Environmental Affairs. The committee meets quarterly to address variousimplementation issues and to review the annual work program.

D. Monitoring and Evaluation (M&E)

8. Past M&E Program. With assistance from the Agricultural Economics and Statistics Divisionof MALR, EPADP carried out an ex-post evaluation of its program during 1976 to 1985, coveringabout 800,000 feddans. As no variable other than yields were measured, the approach followed didnot permit the identification of factors contributing to yield differences between sub-areas or overtime. In addition, a DRI program to measure the effect of field drainage on agricultural productionthrough crop cuttings was pursued over a period of six crop seasons (1978-87). The program wasdiscontinued at the end of Dutch assistance for this component.

9. Ongoing M&E Program. DRI is carrying out a program in pilot or experimental areas tocompare actual with potential drainage benefits. Since 1976, the M&E Unit of EPADP and DRI hasmonitored water and soil salinity, permeability, and water table depths. This effort was strengthenedunder the Drainage V Project and now includes some 500 sites. Total area under this program is

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about 500,000 fed. Baseline monitoring is undertaken prior to drainage installation, and is reviewedone year after field drainage construction, followed by further reviews for at least three more years.To improve information on crop response to field drainage, DRI would continue its program ofmonitoring water table depths, soil salinity and crop yields in pilot areas. The ongoing programunder NDP-I is pursued through two inter-related subprograms: EPADP has expanded its monitoringof physical characteristics, and impact assessment on crop production. This has allowed: (a) acontinued assessment of both physical performance and the effectiveness of drainage systems with ananalysis of crop yield data for selected areas; (b) the evaluation, in physical and economic terms, ofyields and of the production response to drainage systems; and (c) the development of planningcriteria for use in selecting future drainage and renewal areas. The program will continue under theproposed project.

10. The collection of data includes water table depths, soil salinity, the discharge in manholes andcollector outlets, crop yields and the inputs used with total production. EPADP has madearrangements to obtain crop yield data for selected areas from MALR and analyzes data to determinethe impact of drainage. To capture the drainage impact directly, EPADP has initiated an intensivemonitoring exercise in several villages to identify separately the impact of drainage installation andother technologies and the cultural practices employed. This would provide "before vs. after" and"with vs. without" perspectives on drainage.

11. The continuation of M&E activities is expected to provide quantitative relationships betweenthe yields of major crops and constraining water and soil factors, including drainage. The results,expressed in economic terms, would be translated into criteria for the priority ranking of those areasstill to be drained or those requiring the renewal of existing subsurface drainage.

E. Collector User Associations and Farmers' Participation

12. EPADP has increasingly felt the need for improved communication with farmers in the courseof the work by the field staff involving introduction of new drainage, on-farm structures, and therehabilitation of existing drainage infrastructure. Accordingly, since the early 1990s, EPADP hasstarted organizing farmers into Collector User Associations (CUAs). The CUAs are registered asnon-govemmental organizations under Law 32 of 1964.

13. Before introducing the field subsurface pipe drainage systems, the farmers used to operate andmaintain the open drainage ditches in their farms. Because of the complexity of the new systems,EPADP has taken responsibility of maintaining the pipe drainage systems at the farm level. Insupport of this activity, EPADP has constructed maintenance centers to carry out the maintenanceservices for both open and subsurface drainage net works.

14. The CUAs are based on grouping of farmers in areas provided with subsurface drainage, at thecollector level. They aim to raise awareness among farmers in dealing with drainage systems in theirlands and maintaining newly-implemented pipe drainage. The objective was to strengthencommunication through the CUAs, and thus to explain drainage performance and maintenancerequirements to farmers.

15. The goal is that, eventually, with proper training and awareness programs, the farmers couldtake over overall responsibility for maintaining the pipe drainage systems. They could alsoparticipate in the investigation and design phases, and facilitate implementation activities. By theend of 1998-99, EPADP had formed 2269 CUA's on an area of 257,371 fed (4 per cent of thetargeted area). In the absence of a legal framework, organizational and institutional support, theCUA's remain a voluntary group of farmers acting as an interface with EPADP.

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16. The basic functions of the present CUAs are:

(a) Ensuring cooperation between the users and EPADP engineers during the investigationand design stages, when soil is being sampled and ground water level measured.

(b) Involving farmers in the planning for the laterals and collectors;

(c) Reducing farmer resistance, and encouraging involvement and participation during theimplementation stage;

(d) Obtaining assistance from users in refilling the soil over laterals and collectors afterinstallation;

(e) Enabling trained farmers to extend their experience to neighbors in the newly-constructed areas; and

(f) Cooperating with the national awareness programs of the Ministry of Public Healthabout the environmental and health impacts of contaminated water.

17. The CUA's are established according to the following procedures:

(a) With the assistance of the drainage extension engineers and coordination of themaintenance district engineer, relevant collectors are identified.

(b) Regular meetings are held with the concerned farmers in presence of the influentialcommunity leaders such as mayors, and Sheiks in villages;

(c) Users on each collector are assisted to form an association of 3-6 members and to electtheir leaders acceptable to the majority; and

(d) EPADP field staff continue to provide consultation to the CUAs after delivery and assistin resolving complaints.

18. The main problems hindering the formation of sustainable CUA's are: Technical -- (a) Limitedunderstanding of the performance of the drainage networks; (b) Conflicting crop drainagerequirements within the same collector (e.g. while rice requires water submergence, Cotton needsdeep drainage) leading to disputes among farmers; and Administrative -- (a) Lack of communicationbetween farmers and staff during design and implementation; (b) CUAs have no legal basis and theirfunctions remain limited.

F. Integration of Irrigation and Drainage Users' Associations

19. To ensure the CUAs' sustainability, and to empower them with substantial system managementresponsibilities, coordination with the Water Users' Associations (WUAs) being formed in theIrrigation Improvement project (IIP) areas, should be considered. This integration will allow theWUAs to extend their involvement in both drainage and irrigation infrastructure. Integration of effortbetween IIP and EPADP will enable use of scarce skills of fanner organization and training and willavoid duplication of services to farmers. It is proposed that a pilot, multi-disciplinary effort in the UPareas be launched under NDP-II to test this approach and to identify conditions for success.

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Experience of HP in forming Sustainable WUA's

20. MWRI's first experience in forming and organizing farmers associations was in theorganization of Water Users Associations (WUA) under the USAID-supported hrrigationImprovement project (IIP) in the 1980s. The goal was to promote farmers' involvement inimprovement actions from investigation to completion of infrastructural improvements. They shouldbe involved in the operation and maintenance of the meska (tertiary) and of associated water devicesfor lifting the water. In the process of implementing IIP, the Ministry staff and farmers haveundergone intensive training programs. The IrTigation Advisory Service (IAS) within MWRI hasdeveloped a systematic 7-step procedure for users' organization and training, covering social,technical and financial aspects. To ensure effective participation and sustainability, irrigationlegislation has been amended to support WUA's and to delineate their responsibilities and duties. Theamendment was activated by law No. 213/94, which regulates the formation and powers of theWUAs. Beside irrigation activities, the law allows the farmers to be involved in effective O&M oftheir meskas, in the collection of O&M costs and in financial and water management matters at themeska level.

21. While the amended legislation has provided a framework for the duties and responsibilities ofthe WUAs at the meska level, there is no provision in support of organizing the WVUAs at the branchcanal level (federation). The MWRI is now studying the possibility to amend the law toaccommodate federations of users according to the experience and recommendations of ongoingWater Board Project (see next section). The amendment is expected to be ready by 2001. Themodified law will consider integration of drainage with irrigation to form the Irrigation and DrainageUser's Associations (IDUAs).

Fayoum Water Management Project (FWMP)

22. The MvAWRI had initiated the Water Board Project in Fayoum Directorate with the assistance ofthe Netherlands Govemment. The objective of this project is to involve farmers in irrigation anddrainage related activities at secondary canal level. The project selected 8 secondary canals inFayoum and established local water boards. Two different models of Water Boards at the secondarylevel are being tested by the FWMP/FID. The first model is a Joint Committee at secondary systemlevel through which farmers and government staff jointly participate in the Committee. The secondmodel is a Farmers' Institution where no government staff is involved. Due to the lack of a legalframework, the farmers' group has been established as a voluntary, non-governmental organization.

23. Farmers' participation in water management at the level of secondary canals is a relatively newconcept in Egypt. As a consequence there is still neither a clear policy, nor definite legislation in thisrespect. The experience gained in the Fayoum area aims to contribute to the on-going discussions onthe optimal manner for users' involvement in irrigation management in Egypt. Potential benefits ofthe creation of an efficient interface between MVVRI staff and water users at the level of thesecondary canal include:

(a) less conflicts between irrigation/drainage engineers and farmers because of regularconsultation, resulting in enhanced efficiency and productivity of the field engineers, aswell as more sustainable water management practices;

(b) improved planning and execution of operation, maintenance, and rehabilitation worksas both engineers' and users' points of view are taken into account;

(c) higher commitment of the users to infrastructure, resulting in better up-keep of thestructures;

(d) more efficient water use;

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(e) more intensive cropping patterns leading to higher agricultural production; and(f) cost effectiveness.

24. An advantage of organizations at the level of the secondary canal, as compared to the tertiarylevel, is that the irrigation and drainage command areas are more likely to coincide, enhancingchances of accomplishing real integrated water management practices. The Water Board institutionwill be formed at the secondary canal (distributory) level. The Water Board should have logicalhydrological boundaries of the irrigation as well as the drainage system. This means that the wholearea covered by one secondary irrigation canal is to be included in one Water Board and that thesecondary drains will be boundaries of the influence area of the Water Board. The WUA (at tertiarylevel) should remain intact but become part of the new institution at secondary canal level.

25. It is not clear which of the two above-described institutional models (with or withoutgovernment staff in the Executive Board of the Water Board) is the most suitable for the Egyptiansituation. Therefore, it is proposed to evaluate both models during implementation period of a pilotscheme, to develop, to test the proper processes and to provide the required legal support for IDUAs.In line with Law 12/1984 and its amendment by Law No. 213/94, final decision-making powerremains with the MWRI as it is legally responsible for the public channel system. There areadvantages and disadvantages to both models, and none can be considered ideal. The experiencegained from the water board will indicate the potential of participatory water managementorganizations for Egypt.

G. Pilot Scheme for Irrigation and Drainage User Associations (IDUAs)

26. The objectives of establishing two pilot schemes under the project are to: (i) test mechanismsfor integration of irrigation and drainage associations; (ii) strengthen awareness among farmers aboutirrigation and drainage systems and efficient system management; (iii) support farmercommunication and involvement; (iv) strengthen cooperation between users and irrigation anddrainage officials concerning the operation and maintenance of irrigation and drainage systems; and(v) ensure sustainability of the system through eventual hand-over of O&M responsibility of bothirrigation and drainage to users.

27. In selecting pilot areas for testing IDUAs, EPADP considered:

- Characteristics of the pilot areas, their boundaries coverage, canals, drains, meskas andstatus of implementation of IIP type improvements;

- Organization structure for the pilot area implementation, including roles of IAS,EPADP (field staff) and the Water Board and their responsibilities;

- Training of EPADP field staff to organize and strengthen the coordination andparticipation of farmers;

- Implementation Schedule;Budgetary requirement; for field staff, equipment, technical assistance and training;and

- Selection of Pilot Areas

28. To test the mechanism for integration of irrigation and drainage associations within theirrigation improvement areas, two areas have been selected -- one in Kafr El Sheikh Govemorate andthe second in Beheira. These two areas have already been provided with subsurface drainage andirrigation improvement networks.

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(a) Balaktar Conmmand Area in Damanhour Governorate:The selected pilot area on Balaktar canal covers about 3,000 feddans in an upper reach of thecanal. It is served by 40 meskas, organized and improved under USAID Project. The WUAshave been already formed and are working effectively on the operation and maintenanceactivities. This area is bounded by El Zini and El Omum drains. The subsurface drainage hasbeen completed under the ongoing NDP-I project, in 1995.

(b) Dakalt Command Area in Kafr El-Sheikh:This canal is currently being improved under IIP. Dakalt secondary canal serves an area ofabout 5,000 feddans and the subsurface drainage has been completed under NDP-I. Only theupper part of the canal serving about 2,000 feddans with about 30 meskas, will be taken withinthe IDUA pilot scheme. The improvement works are expected to be completed by June 2000.

Integration Mechanism for Implementation of Pilot Areas

29. For implementation of the two pilots, close collaboration between the Water Boards project,INTESP, EPADP and IIP is required. Accordingly, it has been agreed to execute the pilot programunder the direction of the Water Board Project (WBP). A steering committee chaired by the Directorof the WBP and formed of representatives of IlP/IAS, EPADP/ extension, irrigation and drainagedistrict engineers, and representative farmers of the IDUA's in each of the two pilot areas will be incharge of implementing the pilot program. The IDUA's tentative implementation planof the pilot program is presented in the following table:

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TENTATIVE IMPLEMENTATION PLAN FOR IDUAs

Activity Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6Preparation of Workplan

Identification of pilotAreas

Field Survey andSocial Assessment

Communication andexecute Farmers'awareness program

Organize Farmers as _ _ _ _ an integrated IDUAs

Procurement ofVehicles

Procurement of OfficeEquipment

Procurement of otherequipment

Implementation of -1 -IAdaptation works

Implementation Stage m L I 1 Ll 1 1 m _ _ _ _ _ _ _ -_ _ _

Interim Evaluations n

Mid Term Review

Reporting H I-Training

N.B: Hatched cells are completed activities

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Estimated Cost for the Pilot Schemes

30. The total program costs are estimated at US$602,000, shared between the WorldBank, KfW, and the Egyptian Government detailed in Tables 1 and 2, and summarizedbelow:

Egyptian Government US$ 246,500The World Bank US$ 70,000KfW US$ 286,000

The IDUAs pilot area costs include provision of:

* US$70,000 for procurement of two pickups, 6 motorcycles;

* US$286,000 for the recruitment of technical assistance expatriates for farmerOrganization, land and water management expert and M&E expert for reviewand analysis. It has also includes provision for local consultants for farmerorganization, communication specialist, water management, Agro-economist,field coordinator and support staff.

* JUS$19,600 for local training, workshops, as well as training of the drainageadvisory service field agents under water boards training programme.

* US$246,000 for the Government contribution to cover salaries of 8 SY supportstaff, and 8 SY drivers. It also covers running costs for vehicles, officeoperation, per-diem and field allowances for the local staff, and for unforeseenrequirements.

The Government Contribution particularly for vehicles operation, salary of driversand support staff, per-diem and field allowance will be funded through EPADP budgetand allocated in quarterly bases to guarantee the cash flow of the local part of thiscomponent.

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Annex 7, Table 1SARAB REPUBLIC OF EGYPT

WOO-Social tarticipetory Activities -li diudlq T.. Pilot Proras o Iter2e Irriati-n -nd I-re-na As..ociati-n at Secode-S Ce -I bc i.e., Water Bo-dBat.iled C..t.

UnIt---- Q ..titi-B Cst B..e Cost (LE '000)__nit_20 20 2032004 20 2 00 Total MI_B 2N000 2002 2003 2004 2005 2006 Ot -1

TOe.inisOn I VIdeo Itgiso loni T-n T le -nt-ation Boord Set 7 -- - 7 :0,00 - 210 - - - - 2.Slide troisotars jnioINg Slie o nl,artion St - 7 I - 73000 - 2i. 21.Caselt.tleSPsfRecorder. inciodi,lo Casette Tapo- Set7- I - - 000 I 7. - - - - 7.0tondoItioo ol atecia l. Fot -.re.' Com-i-etion LesPao 1 4 2 2 1 - 10 20,000 20.0 00.0 40. 0 40.0 .20.0 - 200. ID-inPiaho M-l...ss Bsb2-- - -- 2i 75000 - 100.0 - - - 150.Doat-e Osebse 1ine --- I35,000 - 30 - 5Booter to5sa RoIP- - - - - - 210,000 - 20.0 - - - 20.0Treotora 165-70 liti Oonhe… … … … … …….b,22 500,000 - 100.0 - - - 10.Olitet urnip-te .. d Ht-e -- - - - - - 000 - 25.0 - - - - 25.013.tatal tqapeatad aeii

20.05 459.0 40.0 00.0 20.0 - 579.0tick-Up 000b11 C.bin Iliociding1 t.o for pilot scimoee-sOb 2 2 4 9.0 0. 0. 0.Pic-k SingleI Cebin" n --- 4e 05000 - 300 - - - - 340.0iaotoenY,ie lini-ndieg 6 Ile pilot .cho-)e bOebo 6 12 Is - 1 0,000 40.0 90.0 - - - - 144.0Bicycles ..nb.e…50250 400 - 100.0 - - - 10.Sobtotal Vai.iia.21.

711.0 -- - 04.0Total 244.0 1,175.0 40.0 40.0 20.0 - 1,023.0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~28. 115. 4.0 406 200 ,5.

Cont. IL Conl. iO0'00 aastr (0I

Pot. tO-l. D"lties Per -oo. I OO. . T.nSinr_OoaoiEnob~. Taxes! &To.ese Totalte1 i T .... l Taxe Ttal Iote tch. Rta Cofoet oedirAcot

A. Eonatnat Coatst WYeIev11isIn 0 Video E'ioile-Iit iociiAi.iii Tepee A Oe ,tain onrd 19.7 (.2 2.2 22.1 5.5 0.4 0.6 6.01 0,0 0.4.0 (0.0l PPP tSilZi'FPOT 02411 OlATERlAr,Sis Id necos nluigslidesf. ..t...scot,teion e 1 .1 t2 2.2 22.1 55 0,'. . . 40 1. PA. ESOIP9IENT AMDRATTRIAI,Iaott TpeO,,. -rcodors. iocidilq Cao-tte Tapes 6.2 0.4. .7 74 1. 0.1 0.2 . 0.0 a 4.B1lo (. 0 EIPAO OlOO bBOTto-d-tice If M.t-rioia fet taees' .oeIocati.. IB1.4 12.2,21.0 215.1 53.3 3.0 6.7 67.7 0.0 04.0 10.0 tRADP tQOlrOENT 0 M0IATERIALDr-i rl.ohieg M-Ohi... 13 3.3 0.7. 15.0 157.9 79.2 2.0 4.6 46.4 0.0 04.0 (0.0 tpoAop EQUIPMENT _ao OD_ Obl

Booster Puspa 17.8 (.~~~~~~ ~~~~~ ~~~~ ~~2 2.3 21.0 1.2 030.6 6.2 0.0 04.0 10.0 EPAliP SOUIPHtNTRSDiHATRIAL.O-t-c tntor 22 1. . 63 . . .01 7.7 0. 400.0 Ei'A5p EOoOPHENTstO_ ObTON

sttal Sqoipeot od Mlot:-ils. 5(0.1 34.3 61.4 617.7 152 .4 10.1 10.0 100.0D. VelaIcirPick-tip Ocobin Coblb lin.1odi.g too Ilot Pilot -ch-noe 310.2 20.3 37.4 373.9 93.0 0.0 11.0 11.00.0 04.0 910.0 tROOP OtIlttiP I igl ah 021 19.0 30.5 0. 0.0 5, 1I0.0 (00.2 0.0 04. 10.0 EAtVOCDMot-ncyoIoelicod 6 foe pilot ech-eesI 27.0 0.2 10.0 150.2 37.,3 2.4 4.4 44.2 .0 04.0 (0 .0 EPAO VtOICLESOlcycles ~~~~~ ~~~~ ~~~~~~00.0 . 10.5 105.2 261 13 31 30.9 O 0, 4.0 00.0 EPA10P TEH CLtSSubtotal Vali.lal 034.0 -54. 1 90.7 90_6.9 _245.3 15.9 29.0 90-To teS 1,352,0 008.3 160.1 1,600.0 397.7 26.0 47.1 77

tapendLtorns by Ploa..ci.tR_lUSS '0001--Th. 600s-o BOot IORD

201202203 2004 200 2006Up Total20001 2002 2003 20y 200 2006 Total

Cseta ae eOrIs InldigCnnteSts 03-f. .0 ~ ~ ~ ~~~~~~~ .

WerTbofs - 17 -- .- C 1- G. 3 -02.~ - 1. -. 9'.'107 -. - - 53.2D-51C Pooo Ub0 - - 17.0 -35.2 - -3.Tators 16k-O 1t . .0 - -_ - - .0 - 2.1 - - - -2.

.1fi- I~~~~IrOit.. 1~ -211 20, . 11. 1071. . - 152.gobt.tal Ogoipsant s-d Kat-Lpia.. 22.0 2.0 2.1 -8 511991. i. . 5.Pich-k URDoble Cabin Ile-iadisg tnn for s~,ot l-mo3sesi 4. .: 9PIch-OpP SiIqIs Cabio - 163… … … … … 0.0 a -0.fOOcns ienlodln 6 to, Pilot -oh-,si) 2.2 4.6 - - - 6.8 12.3 25.1 - - - -3.Bicisols I. 4.0 - - 4.0 26.1 - - - 26.Sobtota1 VehlBSas lo 3-4.4 - - - -449 0. Bl - - - -24,,.t.i. ~ ~ ~ ~ ~ ~ ~ ~~ ~11556~4 2.0 2,(i. -f3. I03.33 TO- -10 .T-3-,

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Annex 7, Table 2ARAI, REPUBLIC OF EGYPT

Sec-nd National D-1-gaqKfW-5.SnoI1 Participatory A.tlotltn inclUding TWO PjIlt pr.nnema fon Int.gr.ted IrIgtonad It-ainag A.nciatlene at a....da-y Canal Level (waton Boardi

llotailsd Coats

Onanti-tle$ -- Co.t Baae Coat ILE '000O3UI t 2O001 2002 2003 2004 2005 2006 Total ItE) 2001 2002 2003 2004 2005 2006 Total

A. Teh.inaI A.e1.t....fop.tritnt Land Pnd Water Mn-gnee...t toPort TtalF-Monthn - I - .0 1.0 200;,000 - 50.0 - 25.0 25.0 - 101.0iNEPatrlate Fannrm Ongonloatlon E.nrot St.ff-monthS 1.5 1.5 I I I - 5 50.000 25.0 75.0 50.0 50.0 50.0 - 250.0National FA-,nrn Orqaniantion Specali0st staff-eoeth, 1 2 2 1 1 - 7 5,000 5.0 10.0 10.0 0.0 5.0 35.0atIoa .. locilogloqt Ttaff-nonth. 0.5 1 0.5 - - 2 0.000 2.5 5.0 2.5 - - 10.0Natona Coillcto pnc lliot Staff-months 0.5 1 0.5 - -2 0,000 2.5 5.0 2.5 - - 10.0N.tiola I ator Mlaaagnet Ongani-sn Staff-.onthS 3 12 12 90 - - 36 3,000 9.0 36.0 36.0 27.0 - - lO.0topatriate HOE Expont for Re-lac and 0A..Iyis ltalf-e-ths - 0,5s I - 1 .5 350.000 - 25.0 00.0 - 50.0 25.0 150.0.ltint i.h o-ooI nntstall--oths 2 4 2 4 2 14 5,000 10,0 20.0 10.0 20.0 10.0 30.0National (bIed CoordInator Staff-no-tha 6 12 12 6 30 5,000 - 30. 60.0 60.0 30.0 - 100.0atIonal.. i ..ppont Staff staff-month. - 1 2 12 6 0 42 2.000 - 12.0 24.0 24.0 12.0 12.0 04.0sabtntelI TeohoIca1 Aastet.ne 04.0 250. 205.0 201.0 1092.0 47.0 907.0B1. T-ainIng.

P O.11.rkshop./Semlnora 1..npsoa 0.5 I 1 1 0.5 - 4 15,000 7.5 15.0 iSO0 10.0 3.5 - 60.0Toa neb-et Coate 01.5, 2ii3T 210.0 26.0 500.5 47.0 1,057.5II. Ocorerrat Coet*A. Btecat...t Cooat (bfoetly Go-t. Coetributi..)

Office Op. ration Hooth,n 6 12 12 12 0 - 40 1.500 9.0 10. 18.0 10,0 0.0 - 72 .0Voh Icl.e Oporation (fnn 2 Vnhicl-ni Monthe 6 12 12 12 6 40 3.000 10.0 36.0 36.0 36.0 18.0 t 44,0Sopport Staff 323 1t, 6 02 12 12 6 40 2,000 12.0 24.0 24.0 24.0 12.0 96.01)n1nera 323 Mootl, 6 1 32 I32 0 - 40 3,500 9.0 10.0 18.0 18.0 9.0 = 72.0or Die0m 1Field Allo....ces l4ot, 6 12 12 12 6 - 40a2.000 12.0 24.0 24.0 240 12.0 - 9SnOfOoren.. lOnmpOOn 1 2 2 2 2 1 10 5,000 5. 0.0 10.0 10.0 10.0- 5. 50.00Total R.carr-t Coats 65,0 130.0 130.0 130.0 70.0 5.u 530,0Total -110. 43.0 40.0 340.0 269. 20,0.

Innakdoal of Totalo 1-1. fraakd..n of Totalc Innl.COat. (LE ,0003 Cent,is .0003- Lanaa,nteno(I 13-1

Local ~~~Local DUtIes ph.y. Groan

o. 301.DUtln- Fo r. iE,,o. A6Coot. For. Tn..ayDciiotarS. Tacei & alon otalfoci. tooc l axes Total Ot. tc, ate Co. enOt toeditrne Acoc..

1IvaT= at.CostaA. TehIc AOO(et-nn

toj,tnnte L-d, -nd Wiat- ilan9vn-t top-rt 01.3 6.3 10.9 100.9 27.0 1. 0 3.2 32.0 0.0 04.0 30.0 tlrAtP TECIINICAL_ASSISTANCE_1nainlFnor raiptc naln 10 21 3.473 0 .6 . 1 0. 401. EPA F TECHNICAL A.SSISTANCE1pat~ional Soclolpin t 22.4 0.6 25.1 210.51 . 0. 03 3. .00.02.0t'06 TtiOCL SSAC_I

toarit 3iEEpr o oe o nl e 102 00 16. 316.7 4.3. 2. 4.0 490 0. 4.0 0. EPA"P TECHNICAL~_ASSISTANCE 1

Oohtntl TeoaivalAaslotnoa 93.3 6.1 10. .O. 6. 05 7. 2.4 0.TnIalao0Nonviop/Sol31 5.7 . . 40 1. 1.1 . 91 000. 1. iAPTAl

Toa Noati,snt Csta1 ~ 97.0 06. 1154 1,354. 20. 19 .62 3. 00OlfiC-OiOporation t- 09.0 - 00.0 2.2 -. 26.2 0.0 04.0 0.0 EPAD? EOE8

INtinr i.. Iw 0-.0 ... 0g.0e 26.2n- 9 263.2 0.0 0.8 10.0 EOADO TEC ENCAOOASISTAE_.Pnn triate M& E.ldp-tolfor -- adA.yi 14- 9110.7 110.3 -4 32.9 4- 349. 0.0 04.0 10.0 tEPA5P TEHNICAL ASISTANSNtior..I Aoo-E. 6 43.7 7 63.7 -. 10.4 2, 10.7 0.0 84.0 0.0 tOAD? TEC ENCAI_OISTANC_

TotalFed 2-f.tr 6.0 724.0 115.4 1,01.2450.8 21.9 33.97 572.0 0 411. r EINCLAS AC

- --- g 17- -- 8o9__ -

Annex 7, Table 2KfW - Social Participatory Activities (Including Two Pilot Programs for

Integrated and Drainage Associations at Secondary Canal Leveli.e., Water Board

Detailed Costs

xxpenditures by Financiers (USS '000)

The Government 56KfW4 (Uban$2001 2002 2003 2004 2005 2006 7Ttal 2001 2002 2003 2004 2005 2006 Total

r. In-atsne CostsA. T7chmioal As.stanc.

Expatriate Land and'Water Management Expert

Expatriate Farmers Organization Expert 2.4 - 1.3 1.3 - 5.0 - 83.1 - 6.9 7.0 - 27.0

National Farmers Organization Speciali3t 1.2 3.6 2.5 2.6 2.7 - 12.5 6.4 19.6 13.4 13.7 14.1 67.2

National Sociologist 0.2 0.5 0.S 0.3 0.3 - 1.7 1.3 2.6 2.7 1.4 1.4 - 9.3

NationaI Comsunication Specialist 0.1 0.2 0.1 _ _ - 0.5 0.6 1.3 0.7 - - - 2.6

National Water Management Organizers 0.1 0.2 0.1 - - - 0.5 0.6 1.3 0.7 - - 2.6

Expatriate MSE Expert for Revie. and Analysis 0.4 1.7 1.9 1.4 - 5.3 2.3 9.4 9.6 7.4 2a.a

National Agro-£conomist - 1.2 2.5 - 2.7 1.4 7.8 - 6.5 13.4 - 14.1 7.2 41.2

Nat:onal Field Coordinator - 0.5 1.0 0.5 1.1 0.6 3.6 - 2.6 5.4 2.7 S.6 2.9 19.2

Nat:onal'Support Staff 1.4 3.0 3.1 1.6 9.2 - 7.9 16.1 16.5 8.4 - 48.9

Subtotal 7r chnical Assistance _ 0.6 1.2 1.2 0.6 0.7 4.3 - 3.1 6.4 6.6 3.4 3.5 23.0U. Training a.0 12.4 12.7 10.4 10.4 2.6 50.6 11.2 67.4 68.3 fs.2 54.1. 13.6 269.8

.TorhopsnSn inarsT ootal rn"ost f int costs 0.3 0.7 0.7 o.a 0.4 - 3.0 1.9 3.§ 4.0 4.1 2.1 - 16.1

1t. Oacurrent Costs 2.4 13.1 13.5 11.2 10.8 2.6 53.6 13.2 71.3 72.3 S9.3 56.2 13.6 285.9

A. Recurrent Cost (Mostly Govt. Contribution)Office OperationVehicles Operation (for 2 Vehicles) 2.9 6.2 6.5 6.9 3.7 - 26.2 --

Support Staf' (2) 5.8 12.3 13.1 13.9 7.3 - 52.4

Drivers t21 3.9 8.2 8.7 9.2 4.9 - 34.9

Per Diem s Field Allowances 2.9 6.2 6.5 6.9 3.7 - 26.2Unforeseen 3.9 8.2 8.7 9.2 4.9 - 34.9

Total 9acurrent Costs 1.6 3.4 3.6 3.8 4.1 2.2 18.7

Total 20.9 44.5 47.2 50.0 29.6 2,2 193.323.3 57.6 60.7 61.2 39.3 4.9 246.9 13.2 71.3 72.3 59.3 56.2 13.6 285.9

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Annex 7A. Summary of the Social Assessment 1

Introduction

The evolution of the National Drainage Program has moved to increasingly incorporate farmers in the operation and managementof the system and to contribute to the cost recovery of the infrastructure and its maintenance. Where the farmer played a passivepart in the earlier phases of the drainage program, the social aspects, in particular farmer participation in operation andmaintenance of the system, is becoming a necessary and accepted feature of project design. The participation of farmers early onin the design of the drainage systems gives them an increased sense of "ownership" and understanding of the technologies thatpermit them to carry out their livelihoods.

I. Rationale for the Social Assessment

The concept of participatory management and its use in Egypt is fairly new, and the experience of forming farmers' associationshas, until now, not had a particularly successful history. This is in part due to the lack of experience of technical personnel withcommunity organization and communication experience. But, history of past interventions of the Govemment in agriculture hasled farmers both to expect all to be given to them free of cost by the Government, as well as to resist any new innovations thatmay increase their risks. The challenge then, is to identify incentives and opportunities for the formation of successfulassociations, and the farmers' perceptions of their role within such organizations.

Bank management decided that the design of the second phase of the National Drainage Program project,should:

1. Assess and incorporate the social lessons of previous drainage projects;

2. Ensure that the farmers' needs would be taken into account in project design;

3. Identify any particular social constraints or problems that would put the execution of theproposed project at risk; and

4. Provide concrete recommendations for future effective farmer involvement.

The social assessment focused on these key areas was conducted in September-October, 1999. It built onthe results of the survey carried out by EPADP in June 1999 which addressed the issues of cropcompensation (social safeguard policy issue) and farmer's satisfaction with drainage. The field work wasconducted by a local consultant and with the participation of EPADP staff. The methodology used forthis social assessment consisted of controlled and guided interviews with (a) farm owners andsharecroppers, (b) with groups organized during the first phase, (c) with technical personnel participatingin the project in focus groups. These focus group discussions were followed up with individual farmerfield interviews. A total of 150 persons, including farmers, staff of EPADP and other key agencies tookpart in the focus group discussions. Additional information on the operation and other issues related tothe drainage system was provided in the interviews with 41 farmers.

The criteria used for the selection of the areas for the social assessment included: (1) the type of drainage,(2) the type of irrigation and water use, (3) crop types and (4) existence or not of water users or drainageusers associations. On the basis of these criteria 9 different types of areas were selected for each of twoGovemorates: Beheira and Kafr El Sheikh.

l The Social Assessment was prepared by a Local Consultant accepted by the Bank with TOR approved by the TaskTeam. A review f existing documents and experiences of NDP-1 was conducted prior to the field investigations and interviews.These findings are summarized below. Some parts of the assessment were carried out jointly with EPADP staff. The report waswritten from the draft of the consultant by Ms. Concepcion del Castillo (MNSED). The report was cleared by EPADP andMNSED. The complete social assessment report is available from MNSED.

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II. Key Findings of the Social Assessment

The strategy of the Govemment of Egypt is to increasingly move towards a development of new organizations that join theirrigation and collectors users' associations for purposes of cost recovery, maintenance, and operation of the systems. NDP-IIproposes to pilot the merging of the irrigation and drainage users associations as one part of its institutional strengtheningcomponent. An important aspect of this would be the identification of the steps to form effective collectors users' associations aswell as the norms to govern these institutions. While there are legal and institutional issues to the formation of suchorganizations that are beyond the competence of the farmers, the Collectors' Users Associations (CUAs) have to be based on therealities of farmer participation in the field and their needs. This calls for a new approach that will facilitate the formation andfunctioning of these organizations that fits the characteristics of the area of the project. These characteristics include:

* Small (average farm holding of less than 2 feddans) and fragmented holdings;* Leases of land to increase the area farmed and augment production;* Village based crop rotation in blocks to facilitate irrigation as well as drainage;* Highly intensive cropping (averaging more than 190 percent); and* Important cash crops including cotton and rice as well as horticultural crops.

Cost recovery experience under NDP-I has been fairly successful.

* The drainage investment costs are repaid over a 20 year period at no interest by thebeneficiaries according to the stipulations of the Law No. 12 issued in 1984.

e The costs include the installation contract value, the cost of pipes supplied by EPADP,farner compensation for crop losses or damages as a result of the installation, and anadministration charge of 10 percent of the installation contracts 2/.

* These costs are divided by the total area covered to determine the cost per feddan and thecharges applicable to each farmer.

* Collection of the annual dues to pay for the investment is the responsibility of the landtax collectors who are given (at this time) 7.5 percent of the total funds collected as anincentive to collection.

- Under NDP-I the cost per feddan is calculated to be LE 840. Including the administrativeand collection costs the annual recovery payment of LE 49.4 per feddan is required bylaw.

e At the time of the project's mid-term review the cost recovery in the period between 95and 97 was 81.45 percent which is good compared to previous EPADP history ofrecovery rates which was 50 percent and increased to 70 percent in FY91.

There are recommendations to improve the recovery rate even further. These include a system ofnegative tax incentives on the tax collectors, and the addition of a 10 percent compound interest rate tothe farmers who postpone their annual payments until later years.

The documents show the essential role of good maintenance of the drains in order to ensure their efficientfunctioning. Maintenance and cleaning of open drains have been the most problematic issues, since theserequire weed cleaning and earth moving (up to 21 million cubic meters of earth moving and weedharvesting annually in the total 19,000 kilometers of open drains works). The annual budget for thisamounts to LE 45 million, some of it is done by EPADP laborers in the small drains while other work isawarded to contractors and done mechanically in the sub-surface drains (six times annually for manholes

2 Project Preparation Report, Chapter VI,p.78. The average crop compensation is LE28 per feddan. The farmers pay about 40 to45 percent of the investment while the Government of Egypt pays the rest.

-92 -

and twice annually for sub-surface pipes). These works cover some 4.6 million feddans financed byEPADP and supervised by its staff. The change to sub-surface drainage for on-farm drains started in1978 with the objective of making the system more efficient and to eliminate health hazards posed byopen drains. The proposed project includes one component for deepening and remodeling open surfaceconveyance drains serving about 365,000 feddans in the Nile Valley and Delta to ensure that the drainagewater collected by the subsurface drains is conveyed out of the area and into the drainage system and itsout-falls.

Prior the installment of the subsurface field drainage systems, the existing open drainage ditches wereconstructed and maintained by the landowners and drainage users. EPADP became obligated to carry outthe maintenance requirements for the sub-surface drains because of the technical requirements thisinvolves. With EPADP, in charge of the O&M of the subsurface drains, the farmers no longer have tomaintain their privately-owned field drainage systems. But the lack of awareness of the technicalrequirements to keep the system in good operating condition (clogging the manholes with effluentsmostly in the open drains) has been a persistent problem.

Collector Users' Associations (CUAs). The need to educate the farmers to ensure the operation of thedrains led EPADP to begin to organize and involve the farmers (at the collector level) in the maintenanceof the drainage pipe networks by forming collector users' associations. There are several roles envisionedfor these associations: 3

1. Ensuring cooperation between the users and EPADP engineers during the investigation and designstages, when soil is being sampled and ground water level measured.

2. Involving the users in the planning for the laterals and collectors.

3. Avoiding the farmers' opposition, and developing their involvement and participation duringimplementation stage.

4. Enabling the trained farmers to share their experience with their neighbors in newly constructed areas.

5. Cooperating with the national awareness programs of the Ministry of Public Health about theenvironmental and health impacts of contaminated water.

In order to establish the CUAs, The Drainage Authority Service's staff (DAS) of EPADP at the drainagesectors have established a participatory methodology which includes awareness raising as well as staffinvolvement with the farmers, and their active assistance in guiding the farmers through the process ofestablishing the associations.

Before implementation of drainage works in new areas their duty is to inform the farmers of the benefitsof drainage. In all areas the staff persuades the farmers to permit the pipe laying machines enter theirfields as well as obtaining their cooperation to work with the executing engineer.

During implementation the DAS staff should instruct the farmers on how to facilitate implementation(e.g. stop flooding their fields for easy motion of machines and equipment and helping the executionengineers in surveying crop compensation).

After implementation the DAS staff assists the farmers in the formation of CUAs, election ofleaders, and conducts extension advisory services including on site demonstrations on simple

3Documented from Annex 9 of the NDP-II Project Preparation Report.

- 93 -

maintenance and on communication with EPADP for required specialized maintenance. DAShas launched a public awareness campaign to ensure better upkeep of the surface drainagesystems including, keeping the drains clean and uncontaminated with garbage, and sharing in thenational campaigns related to drainage courses (e.g. treatment and prevention of bilharzia). Bythe end of financial year 98-99, EPADP had formed 2,269 CUA's on an area of 257,371 feddans(4 percent of the targeted area), including a board membership of 9,982 farmers.

Requirements for the Formation of Effective CUAs

The policy of increased farmer participation requires the participation of the largest number of the farmersin single unified farmer's grouping on the meska level in irrigation, and CUAs in drainage, to cover allthe water-related activities. The aim is to eventually increase the participation of farmers in the on-farmoperation and maintenance of both irrigation and drainage, in collaboration with the drainage andirrigation engineers, who provide them with proper training for raising their efficiency and enhancingtheir skills.

To achieve this goal requires the rapid initiation of legislation to modify of the present laws and relevantclauses of the Law No. 2113/1989, to permit the formation of users associations for irrigation anddrainage, giving them the legitimate institutional integrity on the different levels in all irrigation lands. Itis also necessary to clearly define the relation between farmer's associations and the differentgovernmental and non-Governmental organizations (NGOs) which may have direct impact onperformance of the newly constituted associations.

O&Matfield level. O&M of open field drains where field subsurface drains have not yet been installed isalready legally private. The following conditions exist:

* Where field subsurface drains have been installed, the EPADP is responsible for partial financing andmaintaining the system.

* Privatization of O&M facilities by forming Water Users Association (WUA) on private watercourses(meskas) have been tested and organized. The amendment of the Irrigation Law authorized theMWRI to establish a special fund to finance improvement works and a method for repayment bywater users.

* MWRI has outlined the procedures in a bylaw that covers the legal and administrative aspects of costrecovery for on-farm improvements that include: (a) maintaining meskas at the farmers expense in theevent they fail to do so themselves; (b) organizing farmers groups to maintain and operate meskasfacilities; (c) recovering the full costs of meska improvement, and (d) establishing a special fund tofinance improvements.

* Under the irrigation improvement project about 4,000 WUAs have been formed and trained by theIrrigation Advisory Services (IAS). The WUAs in the improved areas are now in charge of fulloperation and maintenance of meska irrigation pumping units and the channels. They also organizeand manage the scheduling of irrigation. Their leaders cover the actual O&M costs through thecollected fees. WtJAs also have bank accounts to deposit their savings.

* It was found that farmers are willing to pay a portion of the incremental income attributed toimprovements varying between 15 and 25 percent. The willingness of the beneficiaries to pay showsthat there are strong incentives for farmers to participate in improvement projects.

* In the process of the privatization of drainage at the farm level, the EPADP has established farmersgroups for O&M activities (CUA's). This is still in an experimental stage. Therefore, full

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privatization of O&M on field subsurface would require the formation of financially capable trainedfarmers as first priority. The formation of these groups needs a parallel organization for training andadvising them. IIP has considerable experience and can assist in organizing farmers for O&M of fieldsubsurface drainage system.

* After having set the rules and procedures for fully operative groups, the irrigation law should beamended to legalize such groups.

* In subsurface drainage areas where the IIP has been implemented, it may be more efficient to makeuse of the already formed WUAs after they have been trained on drainage maintenance. Insubsurface drainage areas without IIP involvement, the EPADP could work on the formation offarmers groups with guidance of IIP experience in this area.

* Farmers groups can work either by themselves or by means of personnel hired for cleaning themanholes and removing simple clogging in the pipe network. For more specialized maintenanceworks, such as pipe flushing, repair or replacement of pipe sections, services could be supplied by theEPADP or authorized private contractors under EPADP supervision. These services could be paid forby the farmers groups.

Drainage O&M in the Public Main System. The main, open drainage system is considered to be publicland and is totally constructed and maintained by the MWRI. No resettlement or land acquisition issuesapply. The O&M of open main drains with bed widths varying from 1 to 1.5 meters and with a depthvarying from 3-5 meters below ground level, requires specialized heavy equipment for earthmoving,weed cleaning and harvesting in addition to the maintenance of the structures. Only specialized capablecontractors can carry out these works. EPADP selects the contractors through accepted competitivecontracting procedures where contractors from private and public sectors have equal opportunities.

O&M costs are currently paid by the EPADP. Some studies advise the recovery of a considerable shareof the O&M costs for irrigation and drainage facility through the land tax system. The land tax generaldirector has informed us that the land taxes are estimated to amount to 14 percent of the annual rentalvalue of the agricultural lands and change with the productivity factors (land, water, drainage andcropping pattern) based on the net return. The land tax department takes into consideration a significantincremental increase for the areas supplied with drainage projects. The information available at this timeis not sufficient to determine whether the tax system would fully cover the needs for drainage O&M costrecovery without modification. However, as properties of less than 3 feddan were recently exemptedfrom land taxes and the prevailing properties in the tile drainage areas are less than 3 feddan in size, itwould appear that the land tax may not be the proper solution, unless it is amended to cover smallholdings of three feddans or less.

III. General Information on the Selected Sites

1. West Delta Region. The West Delta drainage projects cover about 1.8 million feddans. The sizeof the West Delta Drainage Sector represents about 25 percent of the total cultivated land in Egypt.Drainage in the West Delta Drainage Sector include:

a) Sub-surface drainage covering 740.000 feddans, already executed.

b) The ongoing project has covered 30.000 feddans.

c) The actual executed areas covered 44,100 feddans, which benefited about 22,000 farm households.

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For open drainage system the activities include:

a) Widening and deepening main drains in the sector to be ready before the execution of the subsurfacedrainage project, the total length of these drains is about 3,700 Kilometers

b) Miscellaneous construction and/or rehabilitation of existing structures, such as R.C. bridges withdifferent loads; culverts, crossings, railways; aqueducts, siphons, regulators; and pavement roads forP.S. entrances.

c) Protecting the sides slopes & embankments of the existing main drains.

Land Tenure and Farm Size. The average farm size in the four sites selected for the social assessment inthe West Delta region is approximately 4 feddans. In the old land of West Delta, more than three-fifth ofland holders have farm holdings of less than 1 feddan (61 percent and 62 percent respectively in Zaineyand Kom Hamada) while this percentage is lower (41.7 percent) in Ayman Balaqtar site. In the new landsite of Abees, none of the land owners hold less than one feddan and the majority of them hold betweenland 3 feddans. Most of farms are owned, however fanners lease land on a seasonal basis as well, andthis is part of the production system in this region.

Irrigation, Drainage and Institutional Services. The area under subsurface drainage in the sites includedin the social assessment in West Delta totals 12,751 feddans plus 200 feddans under modified drainage.There are 68 collectors, and 63 CUAs in the selected sites. In this region and included in the socialassessment there are also 69 WUAs in the command areas. In general, the main agencies in Egyptianvillages are agricultural cooperatives. As the economy is moving towards privatization the role of thecooperatives is limited. The village extension workers use the village cooperatives as their main site toprovide all agricultural services to farmers

Cropping Pattern. The cropping pattern varies within and between districts in the Delta, as well as,between the Delta and Middle and Upper Egypt. The West Delta is characterized as rice growing area.Between 25 to 50 percent of command area in the selected sites was planted in rice in 1998. Wheat,broad beans, alfalfa and vegetables (tomatoes and potato) in addition to (herbs, medical plants and louf)were five main crops of winter 1999. Cotton, rice, corn and vegetables, in addition to (louf, linen, andflax (kettan) were the main five crops in summer 1999.

Area Estimates of Water Use. Between 40 and 75 percent of the Abees area and 10 percent of Zainey,respectively, are partly irrigated by drain water in summer as well as in winter season, while 10 percent ofAyman Balaqter area is partly irrigated by drains in summer season. During summer 10 percent of theKom Hamada area is partly irrigated by ground water.

2. Middle Delta Region. The Middle Delta Drainage Sector serves 1.8 million feddans located in fiveGovernorates: El-Monofia, El-Gharbia, Kafr-El-Sheik, El-Dakahlia and Domiat. The shape of the regionis a triangle. Its apex point is located north of Cairo city at a distance of 23 Kilometers. TheMediterranean Sea and the El-Brolus lake form the base of the triangle in the north with a distance of 248Kilometers from west to east . The height of the triangle from south to north is 200 Kilometers. TheDamietta branch of the Nile River is its eastern limit and the Rosetta branch of the river is its westernlimit. The length of open drains in the Middle Delta Region is 3,700 Kilometers and the length ofcollectors is 1,400 Kilometers. The execution of sub-surface drainage covered 1.4 million feddans.

The activities of the Directorate started in 1963. Now the working force consists of 135 civil engineers,27 mechanical engineers and 24 agricultural engineers. Their task is to supervise the installation of thedrainage system, operate and maintain the system and provide extension services to farmers. There are

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779 CUAs in the region serving about 80,000 feddans. The target area in the project for the fiscal year99/2000 plan is to cover 15,000 feddans with open drains and 18,000 feddans with subsurface drainage.The estimated cost is approximately LE 12 million. The activities of Kafr El-Sheik Drainage Directorateinclude:

a) Widening and deepening main drains in the sector for a total length of 500 Kilometers at an estimatedcost of LE 25 million covering 561,000 feddans.

b) The execution of the subsurface drainage covering 310,000 feddans at an estimated cost of LE 84million.

Land Tenure and Farm Size. The average farm size in the sites selected for the social assessment in theMiddle Delta Region is approximately 3.7 feddans with significant differences between old and newlands. In the old lands of the Middle Delta farms of less than 1 feddan represent, between 16,6 percent inNashart # 1; 43.4 percent in site Seven (the Third); and over one quarter of the farms in Samatai # 4 andPharaon # 3. In the new land of Nasr the First site none of the land owners hold less than one feddan.Fewer than half of land owners in the selected sites of the Middle Delta hold between 1 and 3 feddans,and approximately one quarter of them hold between 3 and 10 feddans. A small percentage of farms havebetween 10 and 15 feddans (4.5 percent) with very few landholdings of over 25 feddans (0.7 percent).

Irrigation, Drainage and Institutional Services. The area under modified drainage in the socialassessment sample for the Middle Delta totals 5,000 feddans. Similarly, in contrast to West Delta, thenumber of CUAs is small, totaling 72 with most of these located in Pharaon # 3 and Nashart # 1. Thereare at this time only 23 WUAs. There are 38 meskas and only 31 improved meskas in this sample. As inthe West Delta, the agricultural cooperatives are the main Governmental service agencies represented. Asthe economy is moving towards privatization the role of the cooperatives is limited. The villagecooperative is now used as the location for the village extension workers who provide all agriculturalservices to farmers.

Cropping Pattern. The cropping pattern varies within and between districts in the Delta, as well as,between the Delta and Middle and Upper Egypt. The Middle Delta is characterized as a rice growingarea. Between 25 to 75 percent of the command area in the selected sites was planted in rice in 1998except site Seven (the Third). Wheat, broad beans, alfalfa and maize, tomatoes and onion, in addition tosugar beet were the main five crops of winter 1999. Cotton, rice, corn and watermelon in addition to sunflower, tomato and beet were the main five crops in summer 1999.

Area Estimates of Water Use. In this sample between 10 and 25 percent of areas in all sites except siteSeven (the Third) are partly irrigated by drains water in summer as well as in winter. In Pharaon # 3 andNashart # I (Upper) respectively 10 percent of the command areas are partly irrigated by ground waterboth in summer and winter.

IV. Findings of the Focus Groups

There are three general conclusions drawn from the focus groups concerning the perceptions of farmersabout the drainage system.

1. Sub-surface drainage is recognized to be a direct cause of substantial increases in agriculturalproductivity and income by most of the farmers. The extent to which the system has impacted thefarmers differs from region to region, but there is general acknowledgment of the benefits.

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2. There is also good public awareness of the benefits to the environment as a result of the drainagesystem. These are reduced health hazards to humans, as well as improved conditions of the soil andincreased agricultural productivity.

3. More complex is the issue of willingness to pay for the maintenance of the system. The drainagesystem's operation is not as obvious and evident as in the case of irrigation, hence the farmers are lesswilling to pay beyond the investment costs for the upkeep of the system.

The results of the focus groups discussions have been grouped into three main areas: . (1) issues ofperformance of the system, (2) issues of performance of the EPADP engineers, and (3) issues of farmers'reactions to the drainage system. The social assessment's findings indicate that the problems are to alarge extent related to a lack of awareness and understanding on the part of farmers. This calls forimproved training in communication on the part of staff as well as training to improve farmerunderstanding of the drainage system and increase farmer acceptance of the works that have to beundertaken to install the drainage system and maintain it in good operating condition. In the followingsection these issues and findings are presented, each followed by analysis and recommendations.

A. Issues Related to Design and Construction

1. Issue: Rehabilitation of sub-surface drains. The farmers believe that rehabilitation should be limitedto the sections of the drainage system that are malfunctioning and do not see the need for therehabilitation of entire sections on the basis of their age alone.

Analysis. There is resistance of farmers to the rehabilitation of some of the sub-surface drains. Theirobjection is raised because they see that drains are still working. The farmers' objections andresistance can be allayed by information concerning the criteria and rationale used for the selection ofareas for rehabilitation. They do not presently understand that if 40 percent of the drains in acommand area are not working, there is a need to rehabilitate all that command area to ensure itsproper operating condition and benefits to all the farmers in that command area.

Recommendation. The M&E Unit, DAS and the executing engineers inform and discuss with farmersthe criteria and rationale for rehabilitation of old drainage systems and the benefits to the farmersaffected by it in specific areas. The information must be concise and accurate and includeinformation about the cost recovery, maintenance, and crop compensation issues affecting the farmersdirectly. [Note: Rehabilitation and renewal of malfunctioning drains is done very selectively byEPADP, however, this may require rehabilitation of collector command areas if a significant portionof the area is malfunctioning.]

2. Issue. Farmer Involvement in drainage design. Farmers in the focus groups say that the technicaldesign and alignment of the drainage systems is an exercise that is done in the offices and does notreflect conditions on the ground, including actual obstacles such as homes or fences.

Analysis. The farmers' complaints that their opinion is not taken into account in the early stages offield investigations prior to the execution of drainage works calls for an evaluation of the way inwhich field studies are being conducted. Because of the technical requirements of the drainagesystem, the decisions about drain emplacement are of necessity based on the topographiccharacteristics and surface mapping, studies that are normally conducted one year in advance of anywork execution. Yet there may be room for improved communication with farmers so as to explainto them the rationale for the studies and subsequent decisions. This is particularly important as afarmer issue in the case of the lateral drains. The complaint that the decisions are taken in officesbased only on maps calls for this early farmer involvement through information, and for more

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flexibility to take into consideration changes in land use or constructions that are not evident in maps.The early involvement of farmers in the studies and field investigations preceding the implementationof drainage works will improve the efficiency of implementation and ensure better farmercooperation.

Recommendations. (1) Establish closer interaction through information and field observations anddialogue between EPADP, field investigation, research and design as well between executingengineers, contractors; and farmers in the early field studies. (2) Ensure that observations of currentland use and farmer practices are included routinely as part of the pre-execution survey work to makesure that the drains are modified to the extent possible and meet the drainage needs. [Note: EPADP'sdesign and investigation teams try to the extent possible to avoid destruction of property and there arevery few cases recorded.]

3. Issue: Farmers' local knowledge and drainage design. The farmers wish that the engineers andcontractors would take into account their knowledge of the land, slope, and elevations between canalsand drains, all of which cause problems in the drainage system and which sometimes are notincorporated into the drainage system's design.

Analysis. This complaint shows that the farmers are confusing some of the requirements relating toirrigation command areas and drainage. The farmers' have first hand experience of problemsconcerning the elevation between irrigation canals and drains that merit consideration. They knowwhen the drains are not operating if they are at the farthest point of the collectors (ranked second as aproblem), and they know when they have waterlogged fields. The examination of the conditions onthe ground and the operation of the two systems, irrigation and drainage, can result in better design,more efficient operation of both irrigation and drainage, and increased acceptance of the farmers tothe implementation of works.

Recommendations. It is normal procedure and the role of the executing engineers to makemodifications as appropriate, with the clearance of their supervisors, to ensure the best design of thedrainage system. However, in light of the farmers' perceptions, it behooves EPADP to ensure thatthere are not problems in the emplacement of drains that render them ineffective if the elevationbetween irrigation ditches and drains are not taken into account. The farmers' complaints should bedealt with seriously and following the established channels for dealing with such issues. [Note:Appropriate topographic surveys are carried out which determine irrigation and drainage layouts.The issue of levels is more relevant for the on-farm irrigation system to ensure irrigation commandthen is the case for subsurface drainage.]

4. Issue: Farmers and Contractors. The farmers expressed frustration at the delays and level ofcompetency of some of the contractors and the fact that they rarely install the manhole covers. Anassociated complaint is that the farmers cannot take their grievances to anybody because it works totheir disadvantage with jailing and fines for disrupting the work of contractors.

Analysis. The dissatisfaction of the farmers with the competency of contractors and the manner ofexecution of works show the need to improve the level of confidence of farmers on the supervisingengineers' capacities. The executing engineers have the responsibility of ensuring that the contractorsfulfill the terms of their contracts and execute the works according to established standards. But thestaff's workload, and in some cases their inexperience, may result in unfortunate cases where theworks are approved without adequate examination of the quality of the work. Leaving worksincomplete, is not acceptable to farmers nor should it be acceptable to EPADP. The farmers for theirpart must ensure that the works are not vandalized or manhole covers stolen or destroyed. In order toimprove the level of satisfaction there is a need to ensure that the engineers are competent and

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responsible and that the complaint system is operating and that the farmers can address grievances tothe executing engineers if they observe irregularities.

Recommendations. (1) Ensure that the supervising engineers are totally competent to supervise andclear the civil works undertaken by contractors. (2) Strengthen the existing complaint andmanagement information system within the M&E Unit in EPADP so that the farmers are familiarwith the procedures to contact with the appropriate persons in EPADP when questions arise about thequality and process of drain construction. (3) Ensure that the procedures and criteria to facilitatecontact between farmers and EPADP are properly designed and implemented. (4) Ensure thatpenalties are imposed on farmers that obstruct ongoing works without going through the appropriategrievance channels. (5) Ensure that supervising engineers monitor the performance of the contractorsand the quality of work.

General Conclusions relating to design issues. The farmers consider that the installation of the sub-surface drains constitutes an investment they are paying for and therefore they should be involved in itsdesign. Clearly, while there are some aspects of design that permit farmer involvement, there are othersthat cannot be subjected to individual farmers' approval for reasons of expediency. The overall issuesand dissatisfaction raised by farmers in relation to design of drainage systems shows more than anythingthe need for improved communication and training. There is a need to ensure that the procedures forfarmer involvement and responsibilities of the executing engineers are working on the ground and thatthere is no gap between the way things ought to work and the way they are working in reality. The earlyexperiences of the IIP in particular show where there are areas for improvement so that past mistakes arenot repeated. These lessons show the need to educate the farmers about the technical features of sub-surface drainage design, and to explain to them which areas are not negotiable. At the same time, there isa need for the EPADP engineers to take the farmers' voice seriously and to ensure that the performance ofengineers and contractors is responding to their needs.

B. Issues Related to EPADP Performance

Issues: DAS responsiveness to farmers and DAS staffing. The DAS engineers have too much area tocover and thus their contact with the farmers is less than ideal. This lack of contact reduces the esteem ofthe DAS among the farmers who feel that they are not as responsive as other agencies, including theirrigation and agricultural extension engineers. The technical personnel complain that there is a severeshortage of staff and lack of means to do their job properly (transportation as well as incentives). Manyof the DAS staff work as "temporary" employees although in many cases they may have worked for theagency for up to eight or ten years.

Analysis. Farmers are not aware of the areas that have to be covered by each of the DAS engineers. TheDAS responsiveness to farmers is constrained by the number of staff, the area each has to cover and themeans by which they do their work. In addition, the DAS staff complains that they lack the prestige ofthe civil engineers within EPADP and IAS because they are currently all agricultural engineers. Inaddition to the prestige of "title" they suffer from being "temporary" staff, thus without incentives tobetter performance. Management of EPADP has to be aware of these deficiencies while taking intoaccount the limitations imposed by staffing rules and budgets. Where possible, DAS staff ought to betrained to perform better and promoted for good work. The workload of the civil engineers should bereassessed to ensure proper coverage of the drainage works.

Recommendations. Address existing staff deficiencies by: (1) Improving the level of technical andcommunications training of the DAS to ensure that they have the technical and extension advisorycompetence to address the questions and problems raised by farmers. This can be done by strengtheningthe training center in Tanta as well as by establishing a specialized unit for Drainage Extension within the

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Water Resources Center to study community organization and drainage issues.4 (2) Improving the waythey work so that their level of performance is rewarded by appropriate incentives. (3) Ensuring thatthere is enough competent staff and transport as well as other means to facilitate their work and increasetheir responsiveness to farmers.

C. Issues Related to Farmers

1. Farmer awareness. The focus groups showed that there are still farmers that are unaware of thebenefits of sub-surface drainage and its relation to improved agricultural productivity.

Analysis: Although the majority of farmers in the areas with drainage have experienced the benefits itbrings in terms of yields and productivity, there are some farmers (particularly in areas where there isno subsurface drainage at this time) that are not fully aware of its benefits nor of how the system ofsub-surface drainage works. This lack of awareness leads to unnecessary resistance and to a lack ofcooperation in some instances. There is a need for concerted attention to this matter so that there isgreater acceptance of the system, cooperation with engineers and contractors, and responsibility forthe system's maintenance.

Recommendations. (1) Improve the organizational structure of the SADAS to make the DAS aservice designed only for service to the farmers with the appropriate level of trained staff in drainageextension. (2) Increase staff training in extension and communication (3) Use the pilot areas todevelop and study the best methodologies and vehicles for farmer awareness and other training. (4)Execute the information and awareness campaigns before execution of drainage works in conjunctionwith existing IUAs and CUAs.

2. Collector Users' Associations. The farmers are unconvinced as to the reasons for the existence ofCUA's since these are not providing them with any essential services and at this time they are notserving as mechanisms for the redress of grievances. While farmers are becoming increasinglyconvinced of the role and importance of the Irrigation Users' Associations, they are less willing andmotivated to form any CUAs since they do not see the functions of these associations as significant.This is related to the less evident benefit of drainage in comparison to irrigation. While the farmersare willing to pay for the cost of the investment they are less willing to pay for additionalmaintenance costs, but they are willing to contribute to the maintenance of the system with theirlabor. The fact that CUAs are not empowered to collect funds from any of the members means thatnobody is willing to provide any dues for operation and maintenance of the drainage system.

Analysis. The organization of the CUAs in many instances has been a task that has been undertaken inthe absence of highly specific roles for the associations and without a legal charter. The farmers arein some instances unaware of the existence of the CUAs as well as their intended role. Because theseorganizations are not providing them with any services the farmers consider essential, they remainstatic and inactive. There is a need for a greater level of effort both to clearly define the specificfunctions of these organizations and to provide the necessary legal framework to make theiroperations successful in the future. If the role of the CUAs is to serve as the vehicles for maintenanceof the drainage system, it is necessary to have active and informed farmer participation as well as theability to collect fees for maintenance and other functions deemed necessary. The issues ofmaintenance cost are to be handled transparently and consistently by the DAS because the farmersfear having to pay a high cost for maintenance. The level of organization (collectors, laterals) and theintegration with the IUAs are still issues to be resolved. The CUAs should also be the forum for

4 The Water Boards Project, the INTESP, and the Bank's proposed Pilot area component will assist in this effort but a longerterm institutional solution should be established to ensure sustainability of these efforts.

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dialogue and negotiation among farmers on issues of crop consolidation and regulation of drainage toensure benefits to all the farmers.

In addition to the organizational requirements there is a need for the farmers to have a place theyconsider their space for meetings, information transfer, education and demonstration, etc. To this endeither the existing cooperatives must be made available or new small infrastructure constructed forthis purpose, and furnished appropriately to facilitate meetings and to provide educational fora for theIUAs and CUAs as well as the agricultural extension services. [Note: Maintenance centers and sub-centers which are available can be used for gatherings and meetings.]Recommendations. (1) Until the issue of the merging of the CUAs with lJAs is studied and resolvedinstitutionally as well as legally, the role of the DAS should be to organize and establish CUAs andinvolve farmers before the implementation of drainage works. (2) Jointly establish with farmers theroles and responsibilities of the CUAs. (3) Discuss the modalities of CUA operations with farmersand determine the level of financing required for the CUAs to function effectively in their agreedupon roles. (4) Train the boards of CUA's. (5) Provide training for CUAs members to do simple andregular maintenance work and expand the knowledge and practices to other farmers. (6) Integrate theWUAs and CUAs in areas where IIP has been implemented or areas where water boards at the levelof the secondary canals will be implemented. (7) Encourage agricultural cooperatives and localadministration units to participate with DAS and SADAS in the organization of the CUAs.

3. Cost recovery and crop Compensation. Findings of the EPADP Survey' and the social assessmentshowed that there were problems related to crop compensation that included: timeliness of payments,level of compensation (not at market prices) and inefficient mechanisms in the delivery ofcompensation. To address these issues, there was additional work done in this area during appraisalto ensure compliance with Bank policy. These results have been updated and included in this sectionof the assessment.

Analysis. The drainage investment costs are paid by the farmers to the land tax collector. However,by law, the farms of less than three feddans are exempt from land taxes. This procedure for paymentof the drainage investment costs leads to confusion in the farmers' minds because it is not alwaysclear to them what portion of the money they pay to the tax collector is for the drainage investmentand which for land taxes. It is possible that in some cases, farmers with less than three feddans ofland may either not be paying for the investment (because they do not pay land taxes), or may bepaying more than their share (LE 20/year is a standard payment). The age of farmers (averagebetween 45-55) also has implications for cost recovery with the 20-year period for repayment becauseoften at the death of the original owner when the heirs divide the land, the amounts to be repaidchange. This calls for a reassessment of the timing (number of years for repayment) as well as themechanisms for the cost recovery of the drainage infrastructure. It is necessary for the farmers to havea clear understanding of the conditions for repayment and the portion of payments that are for taxesand for drainage.

Analysis and Changes agreed to during Appraisal. The issue of crop compensation, and themechanisms by which payments are delivered were re-addressed during appraisal. The croppingcalendar as well as the level of cropping intensity leaves little opportunity for drainage works to beconducted when there are no crops in farmer's fields. Thus, compensation becomes an inevitablenecessity. Farmers complain that the compensation is below market prices; the payments are notmade in a timely fashion (sometimes up to two years' delay after completion of the works), and;payments are not made in a manner convenient to the farmer. The cashier responsible for paymentsdoes not make regular visits nor are these announced in advance, requiring farmers to go to the city to

Sample survey on NDP-II Lands conducted by EPADP/SADAS, May, 1999. Annex in the complete SA Report.

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obtain their payments. This, because of the cost and inconvenience to the farmers, results in furtherdelays and more bureaucratic procedures since crop compensation payments that are not taken by thefarmers within a prescribed period must be retumed to EPADP and the farmers then have to re-submitrequests for payments. The results of the EPADP survey conducted in June 1999 shows a fair degree(70 percent) of dissatisfaction with the current system.

During the Appraisal mission it was found that the time lag of up to five years between the time thestatements of crop compensation are issued and the actual payment to farmers are caused primarily by(1) delays in the contractors installing the pipes in the catchment area. Compensation is not givenuntil the entire area is finished. (2) Shortage of cash to cover crop compensation for the entireDirectorate, and; (3) The accounting unit cannot begin to calculate the compensation for the mostcurrent year until all the previous years' compensation has been paid. The original assessmentshowed that the compensation rates are authorized and regulated by a ministerial decree (number402/96). This means that, on average, the compensation is estimated to be between 20 to 30 percentbelow market price. There are some crops that are not included in this decree. It was agreed duringthe Appraisal Mission that the project would closely follow the procedures outlined by the ministerialdecree and ensure that the record keeping and payment procedures are monitored regularly to ensurepayment at market values.

The cost of compensation is part of EPADP's budget, but there is room for better planning andmanagement. During the appraisal mission it was agreed with EPADP to establish a pilot networklinking the EPADP office in Cairo to the five regions where NDP-II will be implemented. Thefunction of this communication link would be to ensure that there is access to accurate informationabout crop compensation and how it is to be carried out as well as to have a monitoring mechanism tocorrect any problems in the process of compensation. The needs and requirements for theestablishment of the pilot link will be reviewed by EPADP and the Bank informed by June 30, 2000.

In addition to the establishment of this pilot network, EPADP has agreed to consider the mission'ssuggestion to include a provisional sum in each contract for the contractor to pay the compensationand get reimbursed from a special provisional account for compensation. This would reduce the longbureaucratic procedures which are the cause of many delays. A similar approach is being usedsuccessfully in the IEP project.

These measures will ensure that the project is in compliance with OD 4.30, and they will be monitoredregularly during the implementation of the project.

4. Issue: Farmer relations and drainage operations. Farmers take onto themselves to obstruct drainswhen it suits their needs for water in the fields (rice farmers in particular) and this creates animbalance in the system, water-logging some fields that need drainage at a critical time. Fannershave not been successful in dealing with the issues of drainage in mixed farming areas, and somewish the liberalization of cropping had not occurred. This affects the farmers at the end of thecollectors particularly at harvest times (cotton harvesting and competing needs for water for riceplanting). Another issue is that of the large landowners (that generally have their own "private"irrigation systems), who complain that they wish to be consulted on the scheduling of drainage workson their lands.

Analysis. The needs of drainage for different crops in a production system no longer regulated bygovemment present an opportunity to use the CUAs and IUAs as vehicles for farmer interaction andcooperation. It also calls for improvement in the training of farmers to cooperate in the proper use of thesystem so that obstructing the drains to raise the water table does not occur and negatively affectneighboring farms. The scheduling of works regardless of the size of landholding also calls for

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cooperation between all farmers. The drainage works must be scheduled according to technicalexpediency and to the benefit of all farmers and the farmers must all cooperate to ensure that the worksare carried out with maximum efficiency.

Recommendation. DAS can conduct information campaigns with farmers to demonstrate to them howthey can organize and cooperate in decision-making so that there is less conflict and improper use of thedrainage system. Cooperation between farmers is needed to ensure the execution of works. This issue ofcommunity/farmer organization and management of the drainage system should be one area of focus forthe CUAs.

Institutional Coordination. To improve the efficiency of the organizations and agencies working at fieldlevel with the farmers there is a need to provide more institutional coherence and accountability. Thisrequires closer working relations and coordination of work between the Ministry of Water Resources andIrrigation (MWRI), the Ministry of Agriculture and Land Reclamation (MALR), and the Ministry ofLocal Development (MLD). To enhance integrated water management in general and effective drainagesystem in particular, extension services towards the farmers, and organizing farmers should be acombined efforts of MWRI, MALR, and MLD. There is an additional requirement for coordinationbetween all projects affecting specific areas.

Recommendations:

i. Establish a framework for the integration of these agencies and a strategy for itsimplementation including training of technical staff and field coordination and resourcesharing; and

2. Build on the existing capacities and capitalize the experiences of each of the agencies atthe level of field implementation of programs.

Note: Please refer to Project Files for Appendices A & B of the Social Assessment that contain thefindings of the individual farmers' interviews and the EPADP's questionnaire on social issues.

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Annex 8: Environmental Management Plan

General

1. Introduction. There are no irreversible adverse environmental impacts generated by theproposed Second National Drainage Project. Overall, the project is expected to have a positiveenvironmental impact and contribute to improved land and water management in Egypt. The provision ofsubsurface drainage would help maintain the water table at low levels and prevent water logging and soilsalinization. Preparation of the proposed project has included field-based environmental review byrepresentatives of the EPADP, and DRI.

2. There are limited but significant adverse impacts related to existing open conveyance drains thatreceive the outflow from the buried field drainage. These issues are of a generic nature and external tothe project and could be summarized as follows:

(a) Reuse of Drainage Water. Currently, drainage water in some areas is mixed with freshwater for reuse in irrigated agriculture. Problems could arise if contaminated drainagewater is mixed with low quality irrigation water. Drainage water quality is monitored atthe mixing stations for salinity, coliforms, BOD and pesticides.

(b) Possible Adverse Effects on Public Health. Any contamination of irrigation water whichmay occur and have possible adverse effects on human and animal health would bethrough the existing open conveyance drains which could become habitats for theschistosomiasis vector, which exists when open drains are malfunctioning and thedrainage water is stagnant. The project is contributing to improving the performance ofthe open drains and increasing the flow in them; thereby contributing to the dilution ofthe density of flow and the continuous movement of drainage water, thereby forestallingthe possible survival of the schistosomiasis vector.

(c) Agricultural, Industrial and Domestic Waste Pollution. Drainage water from agriculturalland collects residues of applied fertilizers and related agro-chemicals. Some drains alsoreceive sewage as well as industrial waste from the villages and cities in the Delta. Inareas of Greater Cairo and Alexandria, where drains would contain raw sewerage and/orindustrial liquid waste, the poor quality of the water could negatively impact on livestockand crops. Only the first issue may be directly project generated; the remaining two arenot generated by the project, although they do affect the quality of drainage water inparticular in the Delta.

(d) Weak Enforcement of the River Nile Protection Law 48 of 1982. This law protectsgroundwater and all fresh surface water, the management of which is the responsibility ofthe Ministry of Water Resources and Ihrigation. Although this Law was not enforcedpreviously, last year EPADP started to enforce the Law, the DRI monitors over 100points in the open irrigation and drainage water system, while RIGW monitorsgroundwater with the results being compiled in annual reports.

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3. The proposed project is the seventh of a series of World Bank-supported investments for thesubsurface drainage and builds upon earlier environmental work which included input from the EgyptianEnvironmental Affairs Agency (EEAA) and the United States Environmental Protection Agency(USEPA).6 A review of the environmental issues associated with the proposed project was prepared tosupport project preparation (IWACO, August 1999) based on which an Environmental Management Plan(EMP) has been prepared to address environmental issues during the implementation process(EPADP/IWACO, March 2000).

4. Water Sector Note: At the request of MWRI, the World Bank has initiated a water sector reviewwith respect to institutional issues and water quality management. The resulting Water Sector Noteprepared by IWACO and Delft Hydraulics identified as main and most urgent issue the reduction ofdischarges of industrial and domestic waste water into the water system. A national program would beneeded to accelerate the construction of waste water treatment plants and rural sanitation schemes. Issuesfor immediate attention are:

* Increase the re-use potential of waste water flows by treatment, storage through artificialrecharge, regulatory and financial measures for industries and agriculture and separationof re-usable and non-re-usable waste water flows;

* Increase re-use of drainage water along with careful spatial planning of activities (e.g.more salt tolerant crops, aquaculture, specific industrial purposes);

* Improvement of the legal framework; law 48/1982 is under revision;

* Set up of organizations for solid waste collection and handling;

* Upgrading the present water quality monitoring program; and

* Capacity building at the MWRI.

5. Environmental Assessment. The proposed project has been placed in environmental screeningCategory "B" consistent with the procedure of World Bank Directive 4.01, "Environmental Assessment"and for which an Environmental Assessment (EA) has been carried out. It has been placed in thisscreening category due to: (a) the limited potential negative environmental impacts associated withconstruction activities for the drainage work envisaged in the project; (b) routine monitoring measures arein place for maintenance of proper water quality; and (c) special monitoring to minimize risk in selectedlocations in the project area where domestic and industrial wastewater are discharged into open drains.Given that the focus of the proposed project is on drainage for existing agricultural land, it is notanticipated that the project would involve involuntary resettlement or result in drainage of archeologicaland/or historical sites. All project related works and actions would be subject to a site specificenvironmental review by EPADP, as part of the design process, to minimize potential localizedenvironmental impacts, avoid involuntary resettlement and prevent damage to archeological and historicalsites. Environmental assessment would place emphasis, in particular, on subproject locations situated invulnerable areas, such as coastal, and reclaimed deserts and seriously polluted drains.

6 Water Sector Note on Water Quality Management was prepared (IWACO, 1999),

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Summary of Environmental Management Plan

6. Objectives: An Environmental Management Plan (EMP) has been prepared for the project byEPADP based on the EA. The objectives of the EMP are:

- Minimise negative environmental impacts from drainage works/systems;- Establishment of and support to the Environmental Sub-unit in the General Directorate of

Planning and Follow-up of EPADP by Ministerial Decree;- sustainable incorporation of environmental concerns and actions in EPADP activities;- incorporation of the results of the Environmental Assessment issues report in NDP-II

implementation; and- stimulate environmental awareness in the drainage sector, especially within EPADP.

7. This would facilitate continued integration of environmental concerns into the constructionoperation and maintenance activities of the drainage system. The EMP would support: (a) establishmentof an Environmental Unit in EPADP; (b) training of regional drainage sector staff with view to improvingtheir enforcement capacity; (c) use of site specific environmental review procedures for subsurface andopen surface drainage works; and (d) preparation and implementation of local pollution abatement plansfor priority areas/drains including support for continued activities in water quality monitoring andimprovements by assisting the ministries and industries in the project areas in preparation of ComplianceAction Plans (CAP). Items in the EMP which are not covered under the ongoing bilateral activities underthe Netherlands or Canadian projects would be included as a component of the proposed project andwould be implemented by EPADP with the support of the Drainage Research Institute (DRI). Detaileddiscussion concerning the EMP was finalized during appraisal. The EMP includes an environmentalmitigation plan and an environmental monitoring plan. It also seeks to regularly monitor enforcement ofpollution control Law No. 48.

8. Development of the Environmental Unit in EPADP. The EPADP, as part of the pre-requisite forthe proposed project, has established an Environmental Unit whose purpose is to coordinateenvironmental work carried out by DRI, and/or other Government agencies concerned with drainageactivities. An important function of the EPADP Environmental Unit would be to create environmentalawareness among EPADP personnel assigned to headquarters and regional field offices. The EPADPEnvironmental Unit would in.clude a staff of four professionals including a Unit Chief. It wouldundertake the following functions: (a) responsible for coordinating activities in EPADP related to EA andthe EMP; (b) coordinate consultation at site; (c) disseminate environmental information and coordinateenvironmental training, especially for open drains field operation and maintenance activities; (d)coordinate site specific environmental reviews for activities at new subsurface and open surface drainageand particularly in the newly-added areas and subproject sites in or near vulnerable areas; (e) coordinatein cooperation with DRI water quality monitoring activities concerning open drains; and (f) coordinate theimplementation of local pollution abatement plans; (g) communicate with other agencies like EEAA,Ministry of Health, etc.; (h) establish database and maintain monitoring of water quality downstream ofmixing stations where municipal water offtakes are operating; and (i) prepare consolidated environmentalreports every six months as an element of the project reporting process.

9. Environmental Training Program. The EPADP Environmental Unit would coordinateimplementation of a project supported environmental training program to be conducted by DRI. Thetraining program would be conducted at three complementary levels.

(a) Training would be provided for senior level EPADP officials, such as Chairman, ViceChairman, Undersecretaries, Director Generals and Unit Chiefs, through one or two dayseminars promoting environmental awareness and focussing on key environmental issues in

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system designs, construction and operation and maintenance. These would include review ofthe impacts of water quality on the life and quality of drainage facilities; application ofmonitoring data to management decisions; environmental and health concerns associated withthe expanded reuse of drainage effluents; and special issues related to industrial and domesticeffluents in drainage waters, legislation and policy developments.

(b) Training for professional staff: Training would be provided to professional staff of EPADP topromote environmental awareness and monitoring aspects of EPADP activities especiallythose related to Law 48 enforcement activities. One week workshops would be repeated fourtimes a year during the initial two years of the proposed project and then reduced to two timesa year. Training in the workshops would cover water quality and environmental management,including investigation and design issues, operational and maintenance concerns, applicationof guidelines, collection and interpretation of monitoring data, and the use of environmentalmanagement plans.

(c) Environmental Unit Staff: The staff of the EU will receive on-the-job training during EMPexecution by the TA component. Besides, staff would receive formal training courses onenvironmental issues, water quality assessment and data management. Pollution abatementprograms abroad may be included as study tours.

10. Site Specific Environmental Review: The EPADP would design and implement a program for sitespecific environmental review of drainage activities to be conducted under the supervision of the EPADPEnvironmental Unit and include the use of standardized format including:

(a) review of current environmental conditions at the site, including industrial and domesticdischarge, solid waste dumping, etc.;

(b) Assessment of potential environmental impacts associated with drainage activities, includingconstruction impacts such as dust, noise, and disposal of waste materials;

(c) Evaluation of potential environmental issues associated with the operation and maintenanceof drainage facilities including the disposal of waste materials;

(d) Review of the potential need for involuntary resettlement due to construction activities; and

(e) Review of any potential impacts to archeological and historical site from constructionactivities; progress in undertaking site specific environmental reviews would be included inreports proposed by EPADP Enviromnental Unit. These reports would also identify anyspecial issues which arise and outline mitigation measures to address these concerns.

11. Water Quality Monitoring and Management Plan. The EMP would support Water QualityMonitoring Program to assist EPADP in assuring the drainage system in the project area is designed andmaintained in an environmentally safe manner. The program would include the following:

(a) Program Management. The Water Quality Monitoring Program would be supervised by aSteering Committee chaired by the Chairman of EPADP and including representatives ofproject related institutions. It would meet twice a year to discuss the status of themonitoring program, trends observed by the program and measures which need to be takento address potential environmental issues. The EPADP would work directly with the privateand public sector parties to implement the recommendations of the Steering Committeeespecially when mitigation measures are required to protect water quality. The

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Environmental Unit would monitor the implementation of mitigation measures and keep thesteering committee informed of the progress in addressing these issues.

(b) Monitoring Strategy. The proposed project would support a series of water qualitymonitoring activities in the project areas, to complement the ongoing program of DRI thatincludes 110 observation points evaluated on a regular basis. Priority will be given to 8-10sites in the project areas which require special monitoring due to any risks associated withindustrial and domestic effluent. The EMP would support costs associated with specialmonitoring programs at up to eight locations by contract through DRI. DRI would berequested to prepare Environmental Management Plans and Compliance Action Plans (CAPs)for industries and priority ranking domestic polluters in the project areas for correctiveactions at these sites on the basis of monitoring data and field studies. The estimated cost ofmonitoring, preparation and monitoring of implementation of the environmental mitigationplan, and provision of basic equipment for DRI are included under the proposed project. Theproject would through a contract with DRI also monitor any parts downstream of mixingstations where municipal water supply stations are operational in the project areas andprepare a mitigation or pollution abatement plans. Specific monitoring programs wouldnormally be for periods between 12 to 24 months.

(c) Monitoring Program for Middle and Upper Egypt. Coverage of monitoring in these areas hasstill not started. The proposed project would support development of a general monitoringprogram for drains in Middle and Upper Egypt after completion by DRI reconnaissance surveytentatively planned to be completed by the end of June 2000. It is anticipated that theproposed program for this activity would be reviewed by the Steering Committee andrequirements for logistical support for the program would be agreed with the Bank by October2001.

12. Implementation of Guidelines for Mixing of Drainage Water. The growing need in Egypt tomore effectively use limited water resources is requiring the reuse of agricultural drainage water bymixing it with irrigation water, which necessitates careful planning, field supervision and monitoring.Current Egyptian procedures for mixing follow; (a) the FAO guidelines on tolerance limits for variouscrops salinity; and (b) the WHO guidelines for various heavy metals and chemical composition of suchwater and its effect on crops produced for human consumptions. The DRI, with support from the AfricanDevelopment Bank, is currently preparing comprehensive guidelines for mixing irrigation and drainagewater under the specific conditions of Egypt. The proposed project would provide logistical support forthe application of these guidelines, disseminate them through an environmental training course andsupport pilot monitoring of their use at two or three locations in the project area, including monitoring ofdomestic and industrial load pollution at any mixing stations in the project area.

13. Reporting. The EPADP would prepare, as an element of its project reporting requirements, aseries of semi-annual environmental reports that outline progress in implementation of the EMP. Thesereports would be prepared by the EPADP Environmental unit and provide a means for rapid review of theprogress in development of the unit as well as addressing specific environmental objectives.

14. Project Supervision: The supervision plan for the proposed project would include the participationof World Bank Environmental staff in selective mission to review progress in implementation of theEMP. It is anticipated that support of these activities would draw upon MNA Environmental Specialistfrom Headquarters and the Resident Mission. The environmental performance of the proposed projectwould be included as a standard element of the supervision reports, including the Mid-Term Review andthe Implementation Completion Report. The implementation of the EMP would be supervised by aSteering Committee chaired by the Chairman of EPADP. The Steering Committee would include

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representatives from MWRI, EEAA, DRI and possibly other institutions directly involved in EMPimplementation. Responsibilities would be: guiding the EMP implementation progress, facilitating ininstitutional and legislative issues, main decisions like selection of key sub-project locations with seriousenvironmental issues, guiding the monitoring and enforcement strategies and activities, etc. TheCommittee would meet twice a year. The EPADP Environmental Unit would serve as the secretariat.

15. EMP Implementation Schedule and Budget. The Environmental Assessment was carried out atpre-appraisal and the draft EMP has been prepared at appraisal and the implementation schedule andbudget for this component finalized at appraisal. The implementation schedule will allow EMP activitiesto be undertaken in a fully integrated manner with other activities to be supported by the proposedproject. Preliminary cost estimates have been prepared for the EMP which include contracts formonitoring services and assistance by the DRI. Training and technical assistance to the EnvironmentalUnit shall be through INTESP Project and NAWQAM, in addition to Government budget.

16. Various international programs and projects (especially Canadian and Dutch funded) alreadystrongly focus on improvement of the environmental situation and the capacities of the institutionsinvolved. The NDP-II EA report considers the main environmental issues as identified in the WaterSector Note and the EMP is in line with and strongly supports the main recommendations (regulatorymeasures for industries, influence of planning of domestic treatment, recommendations for re-use asresult of site reviews, use and adjust water quality monitoring program, capacity building at EPADP).

Environmental Action Plan

17. The Action Plan is presented as much as possible in a succession of work packages, activities andtasks built upon each other, both in time and contents. In line with the Unit's responsibilities thefollowing work packages have been defined:

(a) management;(b) training program;(c) dissemination or environmental information exchange; and(d) assessment and mitigation.

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Action Plan

18. The table below contains all main activities identified for each of the work packages.

Table 1. Overview of Work Packages and Activities

Work Package Activity number Activity Links

Management a. 1 Agreements, protocols, contracts Before implementation

a.2 Data information acquisition / exchange Depends on ala.3 User needs assessment, equipment Field/lab., cars, office

specification and procurement

Training Program b. 1 Training program identification At startb.2 Training of Environmental Unit During first yearb.3 Environmental issues for drainage engineers After b2b.4 Environmental issues for managers and Independent

policy makersb.5 Water quality monitoring, data handling and Existing course ?

QA/QC

Dissemination c. 1 Envirommental data/information library From startprogram

c.2 Public relations: environmental news letter During NDP-IIc.3 Publications by DRI Already scheduledc.4 Dissemination material for public See social assessment

consultation

Assessment ad d. 1 Environmental field assessments/reviews After b3 and b4mitigation

d.2 Preparation of site specific pollutionabatement plans

d.3 Water quality monitoring program After b3 and b6d.4 Coordination on EA by the Unit:

environmental mitigation (see mitigationplan)

d.5 Coordination on EA by the Unit:environmental monitoring (see monitoringplan)

d.6 Reporting

Environmental Mitigation Plan

19. The environmental mitigation plan is a result of the environmental assessment activities andcovers the main identified environmental issues. Most of the issues will not be generated by the NDP-IIinterventions themselves, but are however related and linked to the drainage sector in general and theNDP-II command areas in specific.

20. For each environmental issue, mitigation measures are indicated, preliminary responsibilities aredefined and further reference is given.

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Table 2. Environmental Mitigation Plan

NX. Env. Issue Mitigation measure Responsibility Remarks1. Water quality in - monitoring drains in general; C: DRI/Env. Unit - see preliminary

general - monitoring of drains in drains, E: DRI program belowof effluents, at mixing points in_ priority areas

2. Industrial discharge in Determine/estimate C: Env. Unit - Contact and advicedrains concentration, load and impact E: DRI/EPADP/ Drainage from EEAA

- Advice on Compliance Action Sectors (MWRI) - Letter from EPADP/Plans (CAPs) MWRI- Enforce regulatory framework - see procedure below- Keep tight database ofpollution loads and violations

3. Domestic discharge in -Determine/estimate C: Env. Unit - Contact and advicedrains concentration, load and impact E: DRIlEPADP/Drainage from EEAA

on priority for waste water Sectors - Contact and advice totreatment NOPWASDon functioning of sanitary

______________________ systems, if any

4. Unacceptable water - advice on mnixing drainage and C: Env. Unit - Contact and advice toquality downstream irrigation canal water; E: DRI/EPADP/Drainage MWRI, Irrigation

- advice on re-use of drain water; Sectors Sector- advice on re-use of domestic - Advice to thewaste water; Ministry of Health- advice on source for drinking

5. Dumping of solid - cover drains along solid waste C: Env. Unit - about 6 km. ofwaste in drains sensitive stretches E: EPADP coverage is available

- Contact relevantmunicipalities

6. Involuntary - advice on resettle alternatives C: Env. Unit - Contact peopleresettlement due to - compensate affected people E:EPADP/MPWRI affected; see socialdrain construction assessment (minor

issue)

7. Cultural heritage - apply chance find procedure C: Env. Unit - see procedure below(archeological and (if archaeological evidences , E: contractors - items incorporated inhistorical sites) stop activity and bring in contractor contracts

archaeologist for detailed (probably minor issue)survey)

8. Disposal of weeds - check safety aspects for C: Env. Unit - mechanical weedworkers during rehabilitation; E: contractors control is applied- advice on avoiding contact; (therefor minor issue)

9. Ecologically sensitive - check if any nearby; C: Env. Unit - works most probablyareas - define specific ecological not in vicinity of this

requirements type of areas (probablyminor issue)

Note: C: coordination; E: execution/enforcement

21. Most of the mitigation measures are self-explaining in combination with environmentalmonitoring plan (see next section). The major issues concern issues related to pollution abatement. For afew issues further explanation and definition is given below.

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Preliminary monitoring strategy

22. Water quality monitoring in Egypt is carried out by various organizations with different purposes.An overview of the responsibilities has been given in the Environmental assessment Issues report. Maindeficiencies in the monitoring programs concern irrigation canal water in general and drainage canalwater in the Nile Valley. DRI has a continuous monitoring effort for the drainage canals in the Nile Deltaand Fayoum; this effort has special emphasis on the mixing locations. The NDP-II monitoring supportwould be oriented to:

- A general drainage canal monitoring component including the Nile Valley to complement theexisting gaps; funding would be organized through the NAWQAM project (Canadian funded;recipient of the monitoring component is DRI);

- A specific monitoring component in the priority drainage command areas as identified in thepreliminary environmental assessment; funding would be found by adjusting the ongoingprogram where required; most of the priority areas are situated in the Nile Delta.

23. The monitoring would cover general parameters as well as pollution parameters (32 parameters).Reference is made to the full spectrum analyses by DRI at part/all of the mixing stations. The programconsiders maximum 10 priority areas during a period of maximum 3 years per command area and amonitoring frequency of 4 to 12 per year. The monitoring locations are related to effluents, mixingstations and other critical issues for each command area.

24. The project will support the provision of basic monitoring equipment for the monitoring activitiesby DRI as well as the local M&E Units of EPADP in the regions.

Enforcement

Industrial Compliance Guidelines

25. The principal items of environmental legislation which control industrial compliance are:

* Law 4 of 1994, Law on Protection of the Environment;* Decree of the Prime Minister 338 of 1995, Executive Statutes of the Law on Protection of

the Environment;* Law 48 of 1982, on Protection of the River Nile from Pollution; and* Ministerial Degree 8 of 1983, Implementation of Law 48/1982 by MWRI.

26. The major environmental licensing requirement concerns for all industrial facilities:

- should comply to Law 48 and Decree 8 with respect to their effluents;- should have completed the process of environmental impact assessment (EIA). This

assessment must be approved by the Egyptian Environmental Affairs Agency (EEAA); Thisapproval forms what is called the operating permit;

- details of the approved EIA, including technical specifications and any attached conditionsmust be recorded on an official register by the facility operator. Such a register must be keptfor a minimum of ten years;

- the EEAA will audit the register on an annual basis and can prosecute for any non-compliantactivities or emissions;

- for discharges in the River Nile, canals and drains legislation requires a permit for thedischarge of industrial wastewater;

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- if there is any deviation from the register in the criteria or specification of any emittedpollutant, then the operator must notify the EEAA by writing with the details of this deviationand what is being done to correct it. It is up to the facility, installation or establishment totake the appropriate samples in order to demonstrate compliance.

27. With respect to identified (either before or during NDP-II execution) industrial effluents in theNDP-II command areas the following procedure will be applied:

- industries will be informed concerning the above guidelines;- industries will receive a formal letter requesting for water emission data and documents;- compliance will be analyzed with these documents and additional water quality data;- in case of non-compliance industries will be requested to draft a compliance action plan

(specific measures with a planning to comply); in principle advice can be given;- EPADP will write a letter to that industry for MIWR and EEAA to enforce the Law in case of

non-compliance and reluctance to prepare a compliance action plan.

28. EPADP, whose mandate is to enforce Pollution Control Law 48, carries out monitoring andenforcement of penalties on violators of water quality standards in the main open drains. The dataavailable indicates that between 1993 and 1999, a total of 13,673 violations were identified of whichEPADP has been able to secure compliance of polluters with Law 48 in about 52% of the cases andefforts continue to ensure compliance of the outstanding violators. The project will ensure that thequestion of compliance of violators will be monitored by Bank supervision missions and the percentageof compliance is continuously increased.

Cultural Heritage Assessment Guidelines

29. The known NDP-II project areas concern agricultural lands without known major cultureheritage. Unknown heritage might be in the underground, but since subsurface drains are constructed atshallow depth, there is little chance to discover them during works.

30. Unknown heritage should be managed through chance find procedures (needed for unexpecteddiscoveries of previously unknown buried sites and features during excavation and construction). Chancefind procedures should include the following guidelines:

- the method and procedures to notify the cultural heritage authorities in case a find issuspected;

- the waiting period required before work can resume after a chance find occurs and measuresfor care of found objects are implemented;

- development of measures to avoid, minimize or mitigate impacts including possibleexcavation or salvage operations;

- monitoring of heritage sites and the use of chance find procedures; andtraining in heritage conservation and management as needed.

Guidelines for preservation of cultural heritage are being incorporated in the contracts for civil works.

Ecological sensitive areas

31. According to the environmental legislation, a permit is also required for the operation of anyinstallation within 200m off the coast to protect marine waters. This distance has also been applied ascriterion with respect to the distance to sensitive areas in NDP-I. For NDP-II the same criterion andconsequences will be in force. This means:

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- check if NDP-II drainage construction works are planned within 200 m from ecologicallysensitive areas; for the NDP-II program this mainly concerns the lakes along the northerncoast line;

- field drain installation should be limited to the inland side of coastal drains;- if projects are planned beyond the coastal drains, environmental assessment should be carried

out prior to these works.

Site specific (local) pollution abatement plans

32. The mitigation measures under point 1 to 5 of the table 1. will be dealt with in the framework ofsite specific pollution abatement plans. These plans would be drafted for the drains in a selection of 8 to10 NDP-Il drainage command areas.

33. The actions in the site specific pollution abatement plans will be based on the difference betweenthe currently actual or predicted water quality in drains on one hand and legislation and for the functionsacceptable (future) water quality in the other hand. Actions are:

- water quality monitoring in case of insufficient data, within the NAWQAM monitoringframework;

- determination of realistic targets for water quality improvement;- compliance of industries and./or preparation of compliance action plans (CAP' s) in line with

the targets;- adjustments of the NOPWASD programme for implementation of treatment systems for

domestic waste water;- coverage of drains at critical locations with solid waste disposal in drains; andmonitoring of water quality in the relevant drains will be continued to determine any changes.

34. The NDP-II interventions for the priority areas will be planned at a later stage as much aspossible after drafting the site plans and (partial) implementation. With such a procedure EPADP cansupply an integrated intervention, which combines technical (drainage) and environmental actions in onepackage.

Environmental Monitoring Plan

General planning

35. For all identified environmental issues for which mitigation measures have been defined, we havedeveloped clear indicators for monitoring and evaluation purposes.

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Table 3. Environmental Monitoring Plan

Nr. Environmental Indicators Monitoring Responsibility Remarksissue frequency

1. Water quality in - Number of samples taken 4 to 12 times per DRI - agreement requiredgeneral in priority areas; year per priority (NAWQAM EPADP/DRI/(MWRI)

- Number of samples area project)analyzed;- in general: progressNAQWAM project

2. Industrial - Number of industries in 2 times per year DRI Improvement relates todischarge in drains NDP-II areas; in progress Env. Unit industry specific

- Number of letters to report indicators to beindustries; determined- Number of violationsstops;- Number of CAP's;- Number of letters fromMPWRI to EEAA toindustries;- improvement water qualitydownstream;

3. Domestic - Number of main 2 times per year DRIdischarge in drains discharges in NDP-II areas; in progress Env. Unit

- Number of letters (and reportcontact) to NOPWASD;- Number of adjustedpriorities in master plan; .__

4. Unacceptable Number of advice letters to 2 times per year DRI - Strictly related towater quality MWRI in progress measure 1.downstream report

5. Dumping of solid Meters of coverage along 2 times per year EPADP -budget for 6 km.waste in drains sensitive stretches in progress available

report6. Involuntary Number of people to be Determine for Env. Unit with - way and amount of

resettlement due to resettled; each drain prior local drainage compensation is maindrain construction Number of people resettled; to and after engineers criterion

rehabilitation/construction

7. Cultural heritage - Number of valuable sites Continuous Local drainage - securing any valuable(archeological and encountered; application of engineer site encountered ishistorical sites) - number of sites with action procedure main criterion

of arch. Experts8. Disposal of weeds - occasions of contact of Regular (/week) Local drainage

humans to disposal engineer9. Ecologically Sensitive area (m2) within Determine for Env. Unit Probably none

sensitive areas 200 m. each area priorto construction

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36. The environmental monitoring plan will be partly executed through the environmental sitereviews by DRI and Enviromnental Unit staff. Progress will be reported in progress reports and discussedwith the Steering Committee. The Steering Committee will be informed in case of structural non-compliance to the EMP in order to take necessary strategic steps.

Environmental site reviews

37. In order to achieve a proper implementation of mitigation measures, but especially to maintaina strict monitoring on the main environmental issues and quality control of measures, environmental sitereviews by DRI and the Environmental Unit would be conducted prior, during and after the interventions(at least 3x for each NDP-II priority command area).

38. Site reviews should be conducted according to a standard format. The format will be based onthe general environmental mitigation and monitoring plans. The environmental site reviews wouldinclude the following:

- review of the current environmental conditions at the site;- verification of the main environmental issues;- specify the EMP (especially the mitigation measures) for each NDP-II command area in

case of pre-implementation review (use general environmental mitigation plan);- monitor the implementation of the EMP (use environmental monitoring plan);- provide advice on the implementation where required or requested; and- reporting.

Reporting

39. The following reporting activities would be incorporated:

- for each environmental site review of an NDP-II area a standard review form should becompleted;

- site specific pollution abatement plans are presented in the form of reports;- the water quality monitoring programme should be reported four times a year by the

implementing agency (DR[); the reports should include recommendations for theenvironmental issues 2, 3 and especially 4.

- in case of involuntary resettlement separate notes or reports with respect to characteristics ofresettlement and compensation;

- in case of unexpected cultural heritage notes or reports on characteristics and actions; and- twice per year preparation of a progress report on the environmental management plan

(EMP).

40. The progress reports will be discussed during the half yearly Steering Committee meetings.The Steering Committee consists of the Chairman of EPADP, the Chairman of DRI, a representative ofthe MWRI and a representative of EEAA. The Environmental Unit staff will provide the logistic andsecretarial services. The responsibility of the Steering Committee are:

- review the EMP progress during NDP-II execution;- advice on strategic and institutional issues;- advice on adjustments in the implementation of the EMP, if required; and- approve the progress report and the half year planning.

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The progress reports and the findings of the Steering Committee are subjected to World Bank review.

Implementation Conditions

41. Resources and materials. This listing provides an indication of the minimum requiredresources, human, technical and physical to carry out the Environmental Management Plan (EMP).

Table 4. Staff of the Environmental Unit

Human resources Task description

At least five (5) members of staff with a chiefas follows:

* Three (3) Irrigation/Drainage/Civil Provision of professional input in the SiteEngineers in charge of 5 Sectors Specific Environmental Reviews and

Environmental Management Plan

Provision of input in communication,* One (1) Communication/Graphics Staff graphics techniques and effective

Member (part time) presentations for Dissemination and PublicRelations

* One (1) Database/GIS/AutoCAD Staff Provision of input for the Unit inMember (part time) Data/Information Entry and Conversion

* One (1) Environmental Provision of input and instruction in theTrainer/Consultant/Institutional environmental aspects of the EMP,Specialist application of environmental information as

well as the coaching for the EMPimplementation

* One Chief Staff Member Provision of organizational and managerialfunctions

- 118-

Table 5. Overview of hardware required

Hardware Description

One (1) Work Station consisting of a HW and SW for data/information entry and conversion; forpowerful computer, laser printers (black and mapping; for display and for presentationwhite color), high end A3/A4 colored printerfor presentations, A3/A4 scanner, AO colorscanner and an AO Plotter. Appropriatesoftwares

One (1) digital cameraOne (1) GPS For positioning and location marking when taking samplesFour (4) field vehicles 4 X 4 for For data/information collection, sampling and fieldEnvironmental Unit and DRI observations and environmental assessmentsFive (5) sets of simple analyses and sampling Supplied by NAWQAM projectequipment for the 5 regional M&ElaboratoriesOffice equipment, furniture, etc. forEnvironmental Sub-unit;

Table 6. Support and services to the EMP implementation

Support by Description Input

Drainage Research - execution of water quality monitoring; Continuous involvementInstitute - advice on mitigation measures;

- preparation of site specific EMP for each priority area,including CAPs;- support to environmental site reviews;- reporting water quality monitoring includingrecommendations;- support to progress reporting;- development and contribution to environmental andwater quality training;

MWRI, EEAA, - advice and legal actions In case of actions, furtherNOPWASD, etc. on a regular basisSenior local - regular support, phasing out after 4 years For 3 years half time, thenconsultant - support to format preparation for activities 2 years quart time, during

- support to specific environmental site reviews subsequent years support- support to site specific EMP; CAP preparation upon request- support to communication- support to reporting

International - process management For 3 years 2 months/year,consultant - strategic environmental advice then for 2 years

- supervision on EA and EMP matters; lmonth/year- review reporting- advice to the Steering Committee

Note: Consultancy support is limited due to available funds

- 119-

Cost estimates

The cost of the environmental component is based on:

Investments:Based on Table 5;Services:- monitoring (sampling and analyses) based on Section 2.2; it comprises 10 sites 6 times per

year at 3 locations by DRI for 2 years per site;- Local services further based on Table 6;- Local services further based on Table 6;

Miscellaneous:- 2 seminars for decision makers;- 3 workshops for EPADP professionals at central and regional level;- 10 training sessions (2 at each regional office) for operation and maintenance staff;- miscellaneous cost

Table 7 comprises the tentative cost estimate for the EMP during the course of the NDP-Il programme.Separately, the cost breakdowns are attached in which also the main funds for the cost items are indicated.

Table 7. Tentative Cost Estimate

Nr. Item Unit Quantity Unit cost (US$) Cost (US $)A. Investment Laboratory equipment L.S 5 10,000 50,000

Office equipment Set 2 10,000 20,000Car (Env.Unit/DRI) Number 4 35,000 140,000

__________ ____________ (210,000)

B. Services Sampling Number 864 20 17,000Flow measurements Number 864 50 43,000Lab. Analyses/report Number 864 100 87,000Preparation of Number 10 I,500 15,000monitoring reports/advice for follow-upMitigation Sites 30 3,000 90,000plan/CAPs/site review/monitorimplementationFinal report Number I 10,000 10,000

(262,000)

C. Training Development of Number 2 10,000 20,000programme and coursematerialsOverseas visits Missions 18 4,000 72,000Manager Workshops Staff days 30 1,000 30,000Prof. Seminars Staff days 70 1,000 70,000Local training Number 10 2,000 20,000

(212,000)A,B,C- 10% 68,400Contingencies

Sub-total cost 752,400

- 120-

Nr. Item Unit Quantity Unit cost (US$) Cost (US $)|Per diem Day 180 150 27,000

| Ticket Number 20 600 12,000

Local consultants Month 24 4,000 96,000Local cost Month 36 500 18,000

Contingencies 10% 24,900

Sub-total cost 273,900

Total 1,026,300

Note: the cost items slightly deviate from the official allocations.

- Cost for equipment (US$2 10,000.-) will be born from the IBRD budget;

- Cost for sampling and analyses (US$262,000.-) may be partly covered by the Canadian NAWQAM project(still to be checked) and partly by government budget;

- Cost for training (US$212,000.-) may be born from the NAWQAM budget and government budget;

- The international component of the institutional strengthening and support to the Environmental Unit (DFL500,000.-) will mainly be born from the Dutch funded INTESP project.

- 121 -

Annex 9: Project Processing Budget and Schedule

Project Schedule Planned Actual(At final PCD stage)

Time taken to prepare the project (months) 13 monthsFirst Bank mission (identification) 05/10/1999 05/10/1999Appraisal mission departure 01/31/2000 03/12/2000Negotiations 04/22/2000 05/2-5/3/2000Planned Date of Effectiveness 09/30/2000 / 119

Prepared by: Egyptian Public Authority for Drainage Projects (EPADP)

Preparation assistance: PHRD (Japan), CTF (Netherlands)

Bank staff who worked on the project included:

Name SpecialtyNejdet AI-Salihi iIrriationEngineer/Civil EngineerTi jan M. Sallah EconomistJean-Francois Barres Agricultural EconomistRouchdy Saleh Hassan Natural Resources SpecialistCharles Ameur AgriculturistAshok Subramanian Irrigation Institution SpecialistConcepcion del Castillo Social ScientistHisham Waly Financial SpecialistSamia Msadek Financial SpecialistConchita Castillo Program Assistant

Annex 10: Documents in the Project File

A. Project Implementation Plan. Included in Annex 6 of the Project Appraisal Document. Furtherdetails will be submitted by EPADP by December 2000.

B. Bank Staff Assessments

LACI Assessment for ProcurementSocial Assessment ReportEnvironmental ReportPreparation Reports

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Annex 11: Statement of Loans and Credits

EGYPT, ARAB REPUBLIC OFA. Statement of Loans/Credits

Loan/Credit Accounts List as of April 30, 2000119 Records Retrieved -- Sorted by Financier, Loan Number

CCY of Amount in millions(USD)

Loan/Credit Financier Project ID Description Conmmit Principal Undisb Disbur Approval Date Closing Date

2430 IBRD P004982 SUEZ CANAL AUTHORITY USD 56.5 0 56.5 21-Dec-59 31-Dec-6210620 IBRD P004994 IND./AG. RECURRENT IMP. USD 35 0 35 3-Dec-74 31-Dec-8010640 IBRD P004995 SUEZ REHABILITATION USD 50 0 45.8 3-Dec-74 31-Dec-8310850 IBRD P004993 TOURAH CEMENT EXPANSION USD 40 0 40 28-Jan-75 31-Dec-8210980 IBRD P004996 RAILWAYS 11 USD 37 0 35.6 20-Mar-75 30-Jun-8112390 IBRD P005001 PORT OF ALEXANDRIA USD 45 0 41.5 6-Apr-76 31-Aug-8512760 IBRD P004997 AGR.CR.FRUIT&VEGETABLE USD 50 0 48.6 28-May-76 31-Dec-8412850 IBRD P004998 UPPER EGYPT DRAINAGE II USD 10 0 10 8-Jun-76 30-Jun-8512920 IBRD P005000 IND.TEXTILES REHAB. USD 52 0 51.6 22-Jun-76 31-Mar-8313690 IBRD P005007 ALEXANDRIA WATER USD 56 0 53.2 22-Feb-77 31-Jul-8514390 IBRD P005002 NILE DELTA DRAINAGE II USD 27 0 27 31-May-77 31-Dec-8514400 IBRD P005002 NILE DELTA DRAINAGE II USD 12 0 12 31-May-77 31-Dec-8514530 IBRD P005006 REGIONAL ELECTRIFICATION USD 48 0 46.9 9-Jun-77 31-Dec-8114560 IBRD P005005 INDUST. IMPORT PRG II USD 70 0 67.1 14-Jun-77 30-Jun-8214820 IBRD P005011 SUEZ CANAL EXPANSION I USD 100 0 70.4 9-Aug-77 31-Dec-8215330 IBRD P005010 DFC III USD 33.3 0 33.3 21-Mar-78 28-Oct-8115335 IBRD P005010 DFC III USD 6.7 0 6.2 21-Mar-78 31-Dec-8217320 IBRD P.005015 GULF OF SUEZ GAS USD 75 0 75 19-Jun-79 31-Dec-8317330 IBRD P005018 POWER GENERATION USD 102 0 102 19-Jun-79 30-Jun-8818040 IBRD P005022 (DFC V) DIB IV USD 11.6 0 11.6 11-Mar-80 6-Nov-8118045 IBRD P005022 (DFC V) DIB IV USD 38.4 0 38 11-Mar-80 31-Dec-8418370 IBRD P005025 TEXTILES 11 USD 69 0 0 29-Apr-80 30-Sep-8418420 IBRD P005021 DFC IV (MIDB I) USD 1.1 0 1.1 13-May-80 15-Feb-8318425 IBRD P005021 DFC IV (MIDB I) USD 28.9 0 22.5 13-May-80 30-Jun-8718490 IBRD P005024 PULP & PAPER USD 50 0 49.9 20-May-80 31 -Dec-8618860 IBRD P005026 THIRD POWER PROJECT USD 7 0 7 26-Jun-80 30-Jun-9018861 IBRD P005026 THIRD POWER PROJECT USD 59 0 54.3 28-Jun-84 30-Jun-9119280 IBRD P005030 GAS EXPLORATION USD 25 0 25 9-Dec-80 31-Dec-8420020 IBRD P005031 HADISOLB REHABILITATION USD 64 0 64 26-May-81 30-Sep-8820410 IBRD P005034 TELECOMMUNICATIONS III USD 64 0 62.8 21-Jul-81 30-Jun-8820740 IBRD P005035 DIB V/SSI USD 120 0 118.1 22-Dec-81 31-Dec-88

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Loan/Credit Financier Project ID Description Commit Principal Undisb Disbur Approval Date Closing Date

21030 IBRD P005036 ABU QIR GAS USD 90 0 90 23-Mar-82 30-Dec-86

21760 IBRD P005038 URBAN DEVT II USD 59 0 52.9 10-Jun-82 31-Dec-92

21830 IBRD P005037 EL DIKHEILA PORT USD 132 0 55.4 17-Jun-82 30-Jun-91

22430 IBRD P005040 AGROINDUSTRIES II USD 81.2 0 56.5 8-Mar-83 30-Jun-90

22640 IBRD P005041 VOCATIONALTRAINING USD 38 0 17.6 19-Apr-83 31-Mar-93

22700 IBRD P005039 IRRIG. PUMPING STATIONS USD 41.5 0 40.5 26-Apr-83 30-Jun-92

22800 IBRD P005042 EL DIKHEILA REINF.BAR USD 165.3 0 139.5 12-May-83 31-Dec-88

23300 IBRD P005043 ROAD MAINTENANCE USD 24 0 23 28-Jun-83 30-Jun-90

23520 IBRD P005048 REG.WATERISEWER ENG. USD 4 0 1.1 25-Oct-83 31-Dec-87

24580 IBRD P005046 SM! II USD 170 0 86.4 28-Jun-84 30-Jun-94

24590 IBRD P005045 EXPORT PROMOTION USD 125 0 47.7 28-Jun-84 30-Jun-94

24600 IBRD P005044 CONSTR. IND. USD 100 0 23.6 28-Jun-84 30-Jun-94

25610 IBRD P005049 AGRIC.DEVT. II USD 139 0 80 30-May-85 31-Mar-94

25620 IBRD P005052 DRAINAGE V USD 68 0 63 30-May-85 31 -Mar-94

25690 IBRD P005051 PORT EXPAN.& REHAB. USD 37 0 17.3 6-Jun-85 30-Jun-91

25940 IBRD P005055 VOC.TRNG.III USD 19.3 0 18.1 25-Jun-85 30-Jun-94

27320 IBRD P005060 CHANNEL MAINT. USD 70 0 27.9 26-Jun-86 30-Jun-94

29930 IBRD P005058 ALEXANDRIA WATER II USD 36 0 0 15-Sep-88 31 -Dec-96

30710 IBRD P005138 AGRICULTURE STORAGE USD 40 0 9.2 25-May-89 31-Dec-95

31030 IBRD P005097 POWER IV USD 165 0 139.9 28-Jun-89 31-Dec-95

31370 IBRD P005140 ENGINEERING & TECHNI USD 30.5 0 29.5 5-Dec-89 31-Dec-98

31980 IBRD P005149 IRRIG./PUMPING USD 31 0.7 30.3 15-May-90 15-Sep-98

33530 IBRD P005150 STRUCTURAL ADJUST. USD 300 0 150.1 21-Jun-91 30-Jun-94

33540 IBRD P005111 EG-GAS INVESTMENT USD 84 0 83.7 21-Jun-91 30-Jun-99

34170 IBRD P005146 NATIONAL DRAINAGE USD 45 4.6 40.4 26-Nov-91 31-Dec-00

34410 IBRD P005109 KUREIMAT POWER PROJE USD 220 0 21 5-Mar-92 30-Jun-99

35450 IBRD P005168 PVT SEC TOURISM INF & ENV USD 130 0 0 17-Dec-92 31-Dec-00

36050 IBRD P005168 PVT SEC TOURISM INF & ENV USD 130 8 62.5 18-May-93 31-Dec-03

37190 IBRD P005157 AGRICULTURAL MODERNI USD 54 0.1 53.9 24-Mar-94 30-Jun-01

38320 IBRD P005173 EGYPT IRRIGATION IMP USD 26.7 26.7 0 22-Dec-94 31-Dec-02

40180 IBRD P040507 POLLUTION ABATEMENT USD 20 0 0 21-May-96 31-Mar-03

42630 IBRD P054958 POLLUTION ABATEMENT USD 20 18.4 1.6 16-Dec-97 3 0-Sep-03

43860 IBRD P041410 P. S. REHAB. III USD 120 120 0 6-Aug-98 28-Feb-05

45000 IBRD P053832 PRVT SECT.& AG. DEV. USD 225 225 0 22-Jun-99 31-Dec-05

S0050 IBRD P005004 IRON ORE ENGINEERING USD 2.5 0 2.5 14-Jun-77 31-Dec-81

S0140 IBRD P005016 NEW VALLEY PHOS.ENG. USD 11 0 7.9 1-May-79 30-Jun-85

1810 IDA P004983 NILE DELTA DRAINAGE I USD 26.2 0 24.2 24-Mar-70 31-Dec-80

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2840 IDA P004984 RAILWAYS I USD 30.2 0 29.2 21-Dec-71 30-Jun-803930 IDA P004985 UPPER EGYPT DRAINAGE USD 36 0 34.9 7-Jun-73 3 1-Jul-814120 IDA P004986 DFC I (BOA) USD 15 0 14.7 26-Jun-73 31-Jan-804230 IDA P004990 COTTON GINNING REHAB. I USD 18.5 0 18.5 24-Jul-73 31 -Dec-824370 IDA P004991 POPULATION USD 5 0 5 23-Oct-73 30-Jun-794840 IDA P004988 TALKHA UREA FERTILIZER USD 20 0 20 18-Jun-74 1-Apr-805240 IDA P004994 IND./AG. RECURRENT IMP. USD 35 0 35 3-Dec-74 31-Dec-805480 IDA P004992 TELECOMMUNICATION I USD 30 0 29.4 8-May-75 31-Dec-805760 IDA P004999 DFC II (BOA II) USD 25 0 25 15-Jul-75 30-Apr-816370 IDA P004998 UPPER EGYPT DRAINAGE 11 USD 40 0 40 8-Jun-76 30-Jun-856810 IDA P005003 EDUCATION I USD 25 0 23.3 22-Feb-77 31-Dec-817190 IDA P005002 NILE DELTA DRAINAGE 11 USD 27 0 27 31 -May-77 31-Dec-857740 IDA P005009 TELECOMMUNICATIONS II USD 53 0 48.2 7-Mar-78 30-Jun-848300 IDA P005008 SOHAG/MINUFIYA AGR.DEV.I USD 32 0 31.7 27-Jun-78 31 -Dec-848310 IDA P005012 URBAN DEVELOPMENT I USD 14 0 13.4 27-Jun-78 31-Dec-848500 IDA P005017 POPULATION 11 USD 25 0 17 5-Oct-78 31-Mar-868680 IDA P005014 EDUCATION II USD 40 0 36.5 19-Dec-78 31-Mar-859090 IDA P005019 LUXOR TOURISM DEVT. USD 32.5 0 23.1 17-May-79 31-Dec-899350 IDA P005018 POWER GENERATION USD 37 0 37 19-Jun-79 30-Jun-889880 IDA P005020 AGRO-INDUSTRY USD 45 0 43.8 1 1-Mar-80 30-Jun-8810240 IDA P005023 GAS DISTRIBUTION USD 50 0 50 20-May-80 31-Dec-8510520 IDA P005026 THIRD POWER PROJECT USD 120 0 120 26-Jun-80 30-Jun-8910690 IDA P005029 EDUCATION III XDR 40.1 0 33.8 7-Oct-80 31-Dec-8710830 IDA P005028 NEW LAND DEVT XDR 80 0 70.3 16-Dec-80 31-Dec-9011110 IDA P005027 FISH FARMING DEVT. XDR 14 0 10.2 17-Mar-81 30-Jun-8911560 IDA P005032 BEHEIRA PROVINCIAL W XDR 56.6 0 55.9 2-Jun-81 31-Dec-9311620 IDA P005033 TECHNICAL ASST. CREDIT XDR 6.9 0 6.9 16-Jun-81 30-Jun-9222760 IDA P005158 EMERGENCY SOCIAL FUN XDR 140 0 153.8 21-Jun-91 30-Jun-9723130 IDA P005146 NATIONAL DRAINAGE XDR 75 1.4 79.6 26-Nov-91 31-Dec-0024020 IDA P005167 TA PRIVATIZATION XDR 9 0 0.5 25-Jun-92 30-Jun-9824030 IDA P005152 SCHISTOSOMIASIS CONT XDR 26.8 12.4 14.1 25-Jun-92 30-Jun-0124760 IDA P005161 BASIC EDUCATION PROJ XDR 55.5 11.2 44.1 25-Mar-93 31-Dec-0225040 IDA P005153 MATRUH RESOURCE MANA XDR 22 7.4 14.2 27-May-93 31-Dec-0125850 IDA P005157 AGRICULTURAL MODERNI XDR 67 8.3 58.9 24-Mar-94 30-Jun-0126720 IDA P005173 EGYPT IRRIGATION IMP XDR 53.3 36.3 11.4 22-Dec-94 31-Dec-0228300 IDA P005163 POPULATION XDR 17.2 14.6 1.3 21-Mar-96 31-Dec-0328650 IDA P043102 SOCIAL FUND II XDR 120 11.3 99.9 21-May-96 30-Jun-01

- 125 -



28660 IDA P040507 POLLUTION ABATEMENT XDR 15 0 0 21-May-96 31-Mar-0330020 IDA P049166 EG-EAST DELTA AG.SERV. XDR 15 13.9 0.9 4-Nov-97 30-Jun-0430240 IDA P054958 POLLUTION ABATEMENT XDR 15 13.7 0.7 16-Dec-97 30-Sep-0330740 IDA P057704 PORT SECTOR REFORM XDR 2 2 0 15-May-98 30-Jun-0030760 IDA P045175 EG-HEALTH SECTOR XDR 90 82.8 6 21-May-98 30-Jun-0431270 IDA P040858 SOHAG RURAL DEV. XDR 25 24.7 0 27-Aug-98 30-Jun-0531940 IDA P050484 SEC EDUC ENH PROG XDR 50 47.5 0 15-Apr-99 30-Jun-0632300 IDA P052705 SOCIAL FUND III XDR 50 49 0 I-Jun-99 31-Dec-0232540 IDA P053832 PRVT SECT.& AG. DEV. XDR 75 73.7 0 22-Jun-99 31 -Dec-0532730 IDA P066336 SOC PROT INIT PROJ XDR 5 4.8 0 29-Jun-99 31 -Dec-04N0080 IDA P005169 ED.ENHANCEMENTPROG. XDR 75 54.9 13.8 24-Dec-96 31-Dec-02S0130 IDA P004987 ENGINEERING CREDIT USD 0.2 0 0 7-Nov-72 30-Nov-73S0150 IDA P004989 TALKHA FERT. ENG. CREDIT USD 0.4 0 0 13-Jan-73 31-Mar-75S0200 IDA P005013 WATER SUPPLY ENGINEERING USD 2 0 0.5 6-Dec-77 30-Jun-80

126 -

B. STATEMENT OF IFC'sHeld and Disbursed Portfolio

As of April, 2000

IFC Data Warehouse (Amounts in US Dollar Millions)-- IFC Held ------- ----- IFC Disbursed -------

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic1994/96/99 Abu Soma Develop 0.(O 1.49 0.00 0.00 0.00 1.13 0.00 0.001983/91/92/94/96/97/98 ANSDK 71.43 22.73 0.00 35.00 11.43 22.59 0.00 0.001996 Apache Corp. 0.00 2.11 0.00 0.00 0.00 2.11 0.00 0.001992/97/98 Carbon Black-EGT 14.83 2.96 0.00 0.00 14.83 2.96 0.00 0.001999 CIL 0.00 1.75 0.00 0.00 0.00 0.88 0.00 0.001994 Club Ras Soma 3.53 2.37 0.00 0.00 3.53 2.37 0.00 0.001993 Cmrcl Int Bank 0.00 15.59 0.00 0.00 0.00 15.59 0.00 0.001997 ECC 35.00 0.00 0.00 0.00 35.00 0.00 0.00 0.001997 Egypt Trust 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.001999 HC Investment 0.00 1.41 0.00 0.00 0.00 1.41 0.00 0.001986/88/92 Meleiha Oil 0.00 30.82 0.00 0.00 0.00 0.00 0.00 0.001997 MGDK 0.00 1.47 0.00 0.00 0.00 1.47 0.00 0.001992/95 Misr Compressor 9.70 3.77 0.00 0.00 9.70 3.77 0.00 0.001997/99 Orascom 16.00 4.85 0.00 0.00 16.00 4.85 0.00 0.001996 Orix Leasing EGT 0.00 0.89 0.00 0.00 0.00 0.89 0.00 0.001997 UNI 4.69 0.00 0.00 0.00 4.69 0.00 0.00 0.00

Total Portfolio: 155.19 97.20 0.00 35.00 95.19 65.00 0.00 0.00

Approvals Pending Commitment

FY Approval Project Name Loan Equity Quasi Partic1999 Allied Producers 6.70 0.00 0.00 0.002000 KIG 0.00 2.26 0.00 0.002000 Knowledge Acads 0.00 0.51 0.00 0.001996 ORIX Leasing EGT 5.00 0.00 0.00 0.001999 Sidi Krir 70.00 0.00 0.00 122.001997 Unipak-Nile 0.00 0.00 0.00 5.00

Total Pending: 81.70 2.77 0.00 127.00

Note: Values do not reflect off-balance sheet items such as guarantee and risk management products.

Last Data Update: April 30, 2000 Run Date: May 17, 2000- 127 -

Annex 12

Egypt, Arab Rep. at a glance 9/18/98

M. East Lower-POVERTY and SOCIAL & North middle-

Egypt Africa income Development diamond1997Population, mid-year (millions) 60.3 283 2,285 Life expectancyGNP per capita (Atlas method, US$) 1,180 2,060 1,230GNP (Atlas method, US$ billions) 71.2 583 2,818 T

Average annual growth, 1991-97

Population (%) 2.0 2.3 1.2 I GNP GrossLabor force (%) 2.8 3.2 1.3 GNP Gross

per - primaryMost recent estimate (latest year available, 1991 -97) capita enrollment

Poverty (% of population below national poverty line) ..

Urban population (% of total population) 45 57 42Life expectancy at birth (years) 66 67 69Infant mortality (per 1,000 live births) 51 48 36Child mainutrition (% of children under 5) 9 ,, .. Access to safe waterAccess to safe water (% of population) 64 71 84Illiteracy (% of population age 15+) 49 39 19Gross primary enrollment (% ofschool-age population) 100 97 ,I Egypt, Arab Rep.

Male 107 102 116 Lower-middle-income groupFemale 93 91 113 ..

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1976 1986 1996 1997Economic ratios

GDP (US$ billions) 13.4 35.9 67.6 75.5Gross domestic investment/GDP 28.4 23.7 16.6 17.7 TradeExports of goods and services/GDP 22.3 15.7 20.2 20.2GrossdomesticsavingslGDP 16.7 13.8 10.8 13.0Gross national savings/GDP .. .. 15.8 18.8 TCurrent account balance/GDP -10.2 -9.4 1.6 0.6 DomesticInterest payments/GDP 0.5 2.4 1.5 1.0 S InvestmentTotal debt/GDP 47.6 84.8 46.3 39.7 SvnTotal debt service/exports 6.4 8.4 11.5 8.9Present value of debt/GDP .. .. 30.9 ..Present value of debt/exports .. ., 105.0

Indebtedness1976-86 1987-97 1996 1997 1998402

(average annual growth)GDP 7.1 4.0 5.0 5.5 5.2 - Egypt Arab Rep.GNP per capita 3.7 2.3 3.6 3.1 4.0 Lower-middle-income groupExports of goods and services 2.7 5.9 1.6 2.4 10.4

STRUCTURE of the ECONOMY1976 1986 1996 1997 1 Growth rates of output and investment(%)

(% Of GDP) 23173 7' 15Agriculture 28.3 20.8 l7.3 17.7Industry 26.2 26.8 31.6 31.8 o

Manufacturing 16.1 13.3 24.3 25.2 9 5t 94 95 99 97

Services 45.5 52.4 51.1 50.5 -15 .7

Private consumption 58.5 69.6 78.8 76.8 -30 -

General government consumption 24.8 16.5 10.4 10.2 GDI - GDPImports of goods and services 34.0 25.6 26.0 24.9 G

197646 1987-97 1996 1997 Growth rates of exports and imports (%)(average annual growth)Agriculture 3.0 2.8 3.1 3.4 TIndustry 8.4 4.5 4.9 4.6 lso

Manufacturing .. 4.9 6.9 8.3 siServices 9.7 3.8 5.6 6.4

Private consumption 6.2 4.7 3.6 3.9 -s 93 64 95 96 97

General government consumption 5.0 0.5 2.4 4.8Gross domestic investment 6.9 -0.4 9.7 10.4 -10Imports of goods and services 3.2 2.4 1.6 1.9 Exports -nmportsGross national product 6.4 4.4 5.5 6.1

Note: 1997 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 128 -

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