Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 8274

PROJECT COMPLETION REPORT

TU!>KEY

NORTHERN FORESTRY PROJECT(LOAN 1585-TU)

JLA'UA2xj jl qqb

Agriculture Operations DivisionCountry Department IEurope, Middle East and North Africa Regional Office

Tsis doonment has a restied dsbuibon and way be used by rcipiet only in the pefomance ofthbir ofile duoi Its contents may not oherwie be dscosed witout Wodd DBnk audKrIton.

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CurreneY Eauivalents

Currency Unit - Turkish Lira (TI)

Appraisal 1977 US$1.00 - TL 25.OO1986 US$1.00 - TL 674.501987 US$1.00 - TL 857.21

Government of Turkey Fiscal Year

March 1 - February 28 (through 1981)March 1 - December 31 (1982)January 1 - December 31 (from 1983

Abbreviations

CP - World Bank Cooperative ProgrameFAO - Food and Agriculture Organization of the United NationsFPMU - Forest Project Monitoring UnitMOF - Ministry of ForestsO/M - Operations and MaintenceOGM - General Directorate of Logging Production and Forest ManagementORKOY - Directorate of Forest Village DevelopmentSAR - Staff Appraisal ReportUNDP - United Nations Development Prograsme

FOR OMCIAL USE ONLYTHE WORLD BANK

Washtngton. D C 20433U.S.A.

Ofice of ODwecta-Gewalopwat..m h,aat'w'

December 22, 1989

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on TurkeyNorthern Forestry Proiect (Loan 1585-TU)

Attached, for information, is a copy of a report entitled Projeci:Completion Report on Turkey Northern Forestry Project (Loan 1585-TU)"prepared by the Europe, Middle East North Africa Regional Office with PartII of the report contributed by the Borrower. No audit of this project hasbeen made by the Operations Evaluation Department at this time.

Attachment

This document has a estriced distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OmCaL USE ONLY

PROJECT COMPLETION REPORT

TURE

NORTHERN FORESTRY PROJECT(LOAN 1585-TU)

Table of Contents

Preface .............. . ................... .......... i

Evaluation S-mmary ................................. . ........ . ii

PART I: PROJECT REVIEW FROM BANK'S OPERATION

1. Project Identity ........................2. Background ........................ ... 1o.o ..3. Project Objectives and Description ..... t..... ...... 24. Project Design and Organization . 35. Project Implementation .4.... ............ 46. Project Results ............... 67. Project Sustainability.. ...................... 78. Bank Performance.. 79. Borrower Performance. ........... .. ....... ........ 810. Project Relationship t .. .......................... 1011. Consulting Services ..... .... . o ............................ ...... 1112. Project Documentation and Data ...... .................... too. 1113. Summary and Conclusions ............... ............ 11

PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

1. Project ObSectives ..... ................... ....... 152. Introduction of Project .................................. 163. Project Organization ............... . .................. 164. Important Forest Targets and Achievements of the Project ...... 175. Appreciation of the Project . .................................. 176. Reasons for Proposed Revised Targets in 1982 ............. 207. Steps Which Were Taken to Try to Resolve the Difficulties ..... 228. Other Subjects with Related to the Project .. .............. 239. Conclusion ........... ................... ...................... 23

PART III: STATISTICAL INFORMATION

1. Related Bank Loans ..... . . ....... ............................... 432. Project Timetable ............................................... .#..** 433. Loan Disbursements .......... ................... . ..... 464. Project Implementation ....................... .................... 485. Project Costs and Financing ... to ............... 50

A. Project Costs ..... .................... .*# .................. 50B. Project Financing ........................ .. ........ 50

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Table of Contents (continued)

6. Project Results . . . . . . . . . . . 51A. Direct Benefits ....................... 51Be Economic Impact . .............. 52C. Financial Impact ........................... ....... ,..... 52D. Studties ...................... ...... 53

7. Status of Covenants ...... ........ ... 538. Use of Bank Resources ....................... 55

A. Staff Inputs ....................... 55B. Missions ....................... 56C* Costs .......... 57

Attachments

1. Value of equipment and vehicles financed out of the Loan2. Procurement of equipment and vehicles - number of units, by

source of financing3. Financial and economic analysis

Annex 1s Comments by the Ministry of Agriculture, Forestry andRural Affairs ........... 65

M;aps IBRD 13330R1

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TURKEY

NORTHERN FORESTRY PROJECT(Loan 1585-TU)

PROJECT COMPLETION REPORT

Preface

ii. This project completiont report (PCR) reviews performance under

Loan 1585-TU (US$86.0 million) for the Northern Forestry Project, which was

made in June 1978. The final disbursement took place on April 13, 1988, and

the undisbursed balance of US$800,000 was cancelled as of that date.

ii. The completion report was prepared by the AO/World Bank

Cooperative Program, with the exception of this preface, the Evaluation

Summary and part of paras 8, 25 ancd 26, paras 10, 31, 34 and 35, and Part II,

Tables 3a and 8A, which are the responsibility of Bank staff.

iii. The Final Report on the project prepared by the Government was

submitted to the Bank in July 1988. A copy is included as Part II of the PCR.

The entire PCR was sent to the borrower for comment, and the borrower'sresponse is attached as an annex.

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TURKEY

NORTHERN FORESTRY PROJECT(Loan 1585-TU)

PROJECT COMPLETION REPORT

Evaluation Summary

Prosect Background and Obiectives

1. About a quarter of Turkey's land area is classified as forest land.The northern forest region represents 60X of Turkey's forest resources and isconsidered to have the greatest potential to contribute to economicdevelopment. At the time of project preparation, Turkey was a net importer offorest products although it had major reserves of unutilized wood. A long-term integrated forestry and forest industry development program for thenorthern region covering the period 1975-1995, prepared with UNDP/FAOassistance, was the basis for the Government's request for the Bank to financethis project. Survey results reported that the region's industrial roundwoodoutput could be tripled by 1995 through improved forest management systemsincluding conversion of natural forests to faster growing industrial forestplantations, improvement and expansion of the forest access road network,reforestation and provision of equipment to permit exploitation of steepinaccessible areas. The project comprised the 1979-85 time slice of thelonger term forestry development program and aimed at (i) increasingindustrial roundwood production, (ii) improving forest management planning,(iii) creating additional employment for forest villagers and(iv) strengthening development of forest villages. Total project costs wereestimated at $915 million of which the foreign exchange component (about 10)was to be financed from the Bank loan ($86 million equivalent).

Implementation ExRerience

2. Implementation of this project was affected by the followingfactors: (i) the identification report substantial'ly overestimated forestresources available in the area, did not sufficiently anticipate the technicalproblems involved in regenerating beech/spruce forests in the region and was

too ambitious in its other project targets; (ii) forestry staff reluctance tochange traditional forest management practices was intensified by the problemsin (i) above; (iii) wood demand was reduced due to depressed economicconditions at the beginning of the project period provided a convenient excusefor not achieving production targets; (iv) lack of good dialogue precludedfrank discussion, until late in the project period, of the issues causingforestry staff resistance to the forest management practices the projectintended to introduce; (v) the implementing agency lacked experience with Bankprocurement procedures, leading to delays in procurement of machinery andequipment critical to implementation of project targets; and (--i) inadequateconsideration was made in the project design of socioeconomic conditions, suchas the competition for resources between forestry officials and villagerswishing to use the areas for grazing.

Results

3. The factors listed above led to substantial shortfalls in meetingproject targets. In particular, annual roundwood production, which wasexpected to increase from 5 million m to 10 million i 3 , remained at pre-project levels. The project had only minor impact on improving forestmanagement practices, which had been one of the projects main aims.Nevertheless, since the project financed the replacement of overaged equipmentand production would have decreased without such equipment replacement, theproject still had an acceptable economic rate of return of 27% (as compared tothe anticipated 76% ERR in the appraisal report). However, since wood pricesin Turkey are held substantially below world market prices, the financial rateof return of the project was negative.

Sustainabili tY

4. Over the longer run, the most significant effect of the project islikely to be the institutionalization of management plans for annual forestryoperations. The plans prepared, if implemented satisfactorily, should providea basis for substantial increases in forest I-Arvests (estimated at about aone-third to one-half increase in the present cut). Impressive gains werealso achieved in plantation establishment, which are expected to be continued.A start has been made in improving the understanding of the importance ofobtaining the cooperation of village communities, but continued efforts inthis regard are essential. Greater importance must also be given tomechanisms for transferring the successful findings of the forestry researchinstitutions so that they can be introduced on a field trial basis.

Lessons Learned

5. The project demonstrates the critical importance of realisticproject preparation, including adequate surveys of resources available,appropriate consideration of technical and socioeconomic problems, and carefulassessment of institutional capabilities. It also indicates that new

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technologies being introduced from other countries should be tested first on apilot scale. The project also shows that sometimes project financedinvestments may still be worthwhile in spite of failure to achieve importantinstitutional and technical goals which the project aimed at addressing. Itwould, of course, have been much better to have identified the real issuesimpeding project performance much earlier in the implementation period,permitting an appropriate restructuring of the project. The delay inidentifying the real technical problems in the project design, which increasedthe reluctance of forestry staff to adopt changed practices, illustrates theimportance of creating a spirit of trust between the implementing agency andBank staff, permitting problems and disagreements to be addressed frankly andopenly so that appropriate remedies can be devised while there is still timefor their implementation.

NORTHERN FORESTRY P dJECT

(LOAN 1585-TU)

PROJECT COMPLETION REPORT

PART I: PROJECT REVIEW FROM BANR'S PERSPECTIVE

1. Proiect Identity.

Project Name: Northern Forestry ProjectLoan No: 1585-TURVP Unit: EMIAGCountry: TurkeySector: AgricultureSubsector: Forestry

2. 9ackaround

1. Some 20 million hectares or one quarter of Turkey's land area is*lassified a, forestland. About half of this is considered as high forestlocated mainly in the mountain ranges and hills near the Black, Aegean andMediterranean seas. Management of Turkey's forests has always been difficultdue to the scattered nature of small forest areas, degraded forests, steepslopes. rocky soils, and the rights of the villagers to work in the forestand to be supplied with forest products. Some of the least accessible forestareas have had little disturbance from their natural state, but most forestareas have had the better trees continually cut from them, for manycenturies. The remaining areas of forests which were considered to have thegreatest potential to contribute to economic development are those of theNorth Turkey region, which contain some 10 million hectares of forest landof which half is classified as productive forest.

2. In the 1970's Government efforts to develop the forestry sectorhave been directed towards: (i) carrying out of a series of forest resourcesand exploitation studies with UNDP/FAO assistance; (ii) encouragingdevelopment of integrated forest industries to maximize use of forestresources, and (iii) raising living standards of forest villagers. On thecompletion of three major studies, about eighty percent of Turkey's forestarea had been surveyed and feasibility studies for integral forestry andforest industry development prepared for about two-thirds of the surveyedareas. One of the studies which surveyed the northern forests resulted inpreparation of a long-term integrated forestry and forest industrydevelopment programme which aimed at bringing these forests into fullproduction in the period 1975-1995. Preliminary findings from the studyprovided the basis for the Balikesir Newsprint Project, an integratedsawmill and newsprint manufacturing complex in Western Turkey for which theBank provided a loan of US$ 70 million in 1976 (Loan 1258-TU). The detailedforest development programme resulting from the study, which the Governmenthad accepted in full and requested Bank assistance in implementing, formedthe basis for the Northern Forestry Project, which was to extend modernsystems of forest management, initiated under the Ardeniz (Mediterranean)Forest Utilization Project (Loan 957-TU) and UNDP/FAO technical assistanceproi, < to Turk, 's or fora4t ar, .

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3. Suirvey results had indicated that the 1976 national industrialroundwood output of about 6.6 million m3 could be more than tripled by 1995with the introduction of an integrated forest management system involving:stabilization of the existing forest-road systems to lengthen the loggingseason; const.uction of new forest access roads; reforestation: and moreintensified management of forest areas. In addition, conversion of naturalforest to fast-growing industrial forest, plantations would ensure futureself-sufficiency in industrial roundwood by the end of this century. As aconsequence, the forestry subsector would be able to contributesignificantly more to the country's development than it had in the past.Since 1973, there hae been a gradual deterioration in the external tradingposition of Turkey which culminated in a serious balance of payment crisisin 1977.

3. Project Objectives and Descrintion

4. The project comprised a seven-year 1979-85 time slice of the long-term (1975-95) forestry development programme for Turkey's northern forestregion which represents about 60% of the national forest resources. With theprincipal aim of preventing Turkey from becoming a massive net importer offorest products by the mid-1980s, the project was to: (i) increaseindustrial roundwood production in the undertilized northern forests fromthe estimated level of6.5million m3 in 1978 to 10 million m in 1985.thereby providing additional raw material to help meet market demandelsewhere in the country, as well as in the project area which incorporated16 of the country's 26 forest conservancies; (ii) improve forest managementplanning on some 5 million ha of these forests: (iii) create additionalemploymient for forest villagers; and (ivl strengthen an onaoing programmefor development of forest villages.

5. The project provided for: (a) implementation of an intensifiedforest production and management programme, including reforestation; (b) theconstruction of about 26,000 km of forest and logging extraction roads,including about 400 km of village access roads; (c) stabilization of 25,000km of existing and newly constructed roads, including about 2,000 km ofvillage access roads; (d) fixed and mobile mechanical workshops forequipment maintenance; (e) logging equipment needed for extraction of logsfrom steep inaccessible areas which cannot be harvested by manual methods(comprising about 10 to 15% of the project area); (f) establishment andplanting of industrial plantations of about 76,000 ha of currently non-productive lands with fast-growing tree species and of 86,000 ha ofconventional afforestation; (g) erosion control works in about 57,000 ha offorests which form part of critical water catchment areas; (h) rangeimprovement in about 64,000 ha of potential grazing areas, with specialemphasi. on pasture improvement and the initiation of pilot rotationalgrazing schemes for forest villages; (i) construction of seven new forestnurseries for seedling production with an aggregate capacity of about 25million plants; (j) intensification of forestry research and revision ofcurrent management plans; (k) forest protection and conservation worksincluding construction of additional fire towers: (1) fencing of forestregeneration areas to prevent browsing by livestock; (m) pilot wildlife andenvironmental protection programmes in forest areas and national parks; (n)training of Ministry of Forestry (MOF) personnel in forestry management andlog extraction techniques through 144 man-months of training fellowshipsabroad; and (o) on-the-job training of MOF personnel in the fields ofmanagement planning, machinery operation, and industrial plantations, andtraining of villagers in forestry operations.

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6. Total project costs were estimated at USS 915 million of whichahout 10% represented foreign exchange requirements. Almost 60% of totalbase costs were to be generated by civil wor.s, equipment and machinery forroad construction. Project implementation was to be carried out by MOfthrough four of its General Directorates as follows: OGM, the GeneralDirectorate of Logging Production and Forest Management, was to implementthe project road construction and log extraction programmes and thosereforestation operations relating to regeneration of natural forest inlogged-over areas; AGM, the General Directorate of Afforestation and ErosionControl, was to implement the project forestry works related toestablishment of industrial plantations, afforestation of degraded forest.erosion control, forest maintenance, protection and range improvement;ORKOY, the General Directorate of Forest Village Affairs, was to beresponsible for planning the project village road component and rangeimprovement works and; MPG, the General Directorate of National Parks andEnvironmental Protection, was to implement environmental protection andwildlife breeding programmes in the project area. Project coordination wasto be carried out by the Forestry Planning and Project Monitoring Unit(FPMU) to be formed by strengthening MOF's existing Planning Unit. To ensureachievement of project production targets, the existing management plans forProject Area Forests were to be revised to introduce intensive managementtechniques, including shorter rotations and reforestation with fast-growingspecies.

4. Proiect Design and Organization

7. The overall concept to satisfy domestic demand for forest productsfrom national forest resources rather than through imports was sound. At thetime of project preparation, Turkey was a net imiporter of forest products,although it had major reserves of unutilized wood. It was believed that ifaccess into the forest areas was not improved and additional log productionthereby increased, the country could become a massive net importer of forestproducts by the mid-1980s. Considering that the country's external tradingposition was already structurally weak. there was a good rationale for aproject that would help increase the supply of wood from national resources.

8. The idea of extending the more dynamic forest systems beingintroduced through the Bank-financed Akdeniz Forestry Project into theunderutilized forests of the Northern region, thereby improving theirproductivity and ensuring that Turkey would remain self-sufficient in forestproducts, at least until the end of the century, had been fully accepted byGovernment and Bank assistance had been requesteo for its realization.Whether the Northern Forestry Project was the appropriate vehicle to bringabout the proposed changes is open to question because ot the time theTurkish foresters were not ready to implement a project that involvedprofound changes in forest management on a large-scale. The physicaltargets set during preparation and appraisal - particularly in terms ofindustrial roundwood production, road construction, revision of managementplans and clearfelling - were too ambitious, and the technical problemsassociated with introducing the project concept in all parts of the projectarea were not sufficiently anticipated.

9. The approach to leave project execution to the existing managementof MOF was justified. The main directorates concerned were considered to bewell organized and had an existing administrative network spread throughoutthe forest area; they had prove.: their ability to implement large-scaleforestry production and conservation programmes, and their trainingprogrammes provided assurance of a steady supply of both professional andtechnical grade foresters for future expansion. The difficulties, however,of achieving effective coordination and improved forest management planning,

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have been underestimated. The attempt to ensure integrated forward planningof field operations by the participating directorates through thestrengthening of MOF's Planning Unit failed. The location of the emergingForestry Planning and Project Monitoring Unit (FPMU) in the Ministry madesense, but to pla% its role properly it would have required a seniorDirector armed with suitable authority.

10. Seen ir, retrospect, the project as designed andappraised was irpossible to implement successfully at the time.rhe tiqnificant increase in industrial roundwood production - theproject's major objective - largely through providing equipmentand improving road access to the apparently underutilized forestsof the north, was unlikely to be achieved for the followingreasons:

r) The -esource base turned out to be much smaller thanexpected at appraisil, a fact that became evident in thelatter part of 1983, and estimated demand did notmaterialize.

ii) Technical problems were encountered with regeneratingthe beech/spruce forests of the Black Sea region.

Jiii) The resistance of senior forestry officials to changes

in management planning (the reasons for which will beexplained below) were underestimated.

5. Proiect Implementation

11. The most critical variance between planned and actual projectimplementation was the shortfall in project targets, particularly industrialroundwood production, clearfelling and artificial regeneration, revision offorest management plans and road construction improvement.

12. Industrial Roundwood Production. There are a number of factorswhich could not have been foreseen and that have accounted for the level ofproduction remaining essentially similar to what it was during the six yearprior to project start-up. During the early project years (1981-mid 1983)Turkey's poor economic situation depressed timber sales, log depots filledup and OGM was forced to reduce its annual allowable cut. It was thereforeacceptable at the time to assume project target shortfalls were due almostentirely to depressed demand for logs. However, when the economic situationimproved in the latter part of 1983 and 1984, but did not result inincreased log production, it was clear that other factors were at work whichhad been overshadowed by depressed log demand. namely a reduced resourcebase and technical problems associated with regeneration of forests in tlleBlack Sea Region.

13. Due to the fact that no aerial photographs were taken between 1979and 1981, the first new inventories did not become available until 1982.This meant that the first revised forest management plans for the projectarea did not appear until the latter part of 1983 and it was not until theFebruary 1984 Supervision Mission that the Bank was informed that the re-inventoried areas were showing some 25% less productive high forests thanhad been asumed in the inventories used for project preparation. On turtherinvestigation it was also found that OGM was experiencing serious

difficulties in regenerating (naturally or artificially) their beech/spruceforests which constituted a significant part of the project area's resourcebase.

14. Faced with (i) reduced areas of productive high forest,difficulties over regeneration of the beech/spruce forests (the pine forestareas which made up the remainder of the project area are relatively free ofregeneration problems and (ii) a far from buoyant demand for logs in theearly eighties, OGM decided it was prudent to keep their production ofindustrial roundwood at levels which turned out to be at about the pre-project levels. However, even to maintain production at pre-project levelsan ever increasing proportion of the allowablt annual cut had to come frommaintenance or 'bakim" thinnings in the younger aged class stands, ratherthan from the oldest stands which were prescribed for regeneration over the20-years plan (regeneration) period.

15. Clearfelling and Artificial Regeneration. The data indicate thatthe project logged nearly twice the area proposed by SAR to removeconsiderably less volume. The reason is the project's reluctance to enterinto a large clearfelling programme, which would achieve high loggingvolumes per hectare. Instead, the project increased its operations inshelterwood and "bakim" fellings. This change in plan was a forestmanagement decision. The logging and road cost advantages offered by aclearfelling operation were not realized. Artificial regeneration of cutover forests remained below SAR target because a decision had been taken in1980 by OGM to rely as far as possible on natural regeneration in order tocut costs; this, however. has not helped much as difficulties have beenexperienced in the natural regeneration of spruce and beech. OGM had alsofound it difficult to raise .ifficient seedlings to match requirements,particularly in the spruce and beech areas.

16. Revision of Forest Management Plans. The SAR estimated that all 16conservancies which comprised the project area and amount to some 5 millionhectares would have revised plans by the end of 1985. This has provenunrealistic given the short period available for taking aerial photographsin the Black Sea Area (July 15 - August 15), lack of aerial photos for thefirst three years (1979-81), difficulties of retaining trained staff in themanagement areas (due to tough working conditions and lack of any financialincentive) and differing v;ews on the extent to which the new revised plansshould differ from the old plans and the models that had been established inthe Garzipasa and Mut Isletmes (District) located in Antalya.

17. Road construction. Road activities in the project have not met SARtargets. OGM chose to not acquire all the machinery allocated early in theproject, and therefore mobilized a programme much smaller than planned. Thereason stated for this was that the conservancies did not demand the scaleof road programme expected in the SAR and this in turn was the result of thedecision to implement a reduced logging programme. Therefore, the reducedroad programme was a result and not the cause of the shortfall in logging. Afactor affecting road activities later in the project was the transfer ofthe road construction unit from OGM to the Directorate of Rural Services.This resulted from the reorganization of the Ministry of Agriculture andForestry and became effective in January 1985. Since then OGM staffexpressed unhappiness with the slow progress in forest road construction.

18. During the initial years project implementation suffered from aweak project management. This was compounded by an adverse economic climate.OGM's decision to keep production of industrial roundwood production at pre-project levels rather than increase it, is a reflection of the depressed

for -'i t' ^ly ̂Y O t ^s It- isi - in 1 tn l IV

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as far as possible on natural regeneration instead of promoting artificialregeneration of cutover forest was an attempt to cut costs in a period oflocal funds shortage. Delays in the procurement of equipment and inimplementing the fellowship and consultancy programmes as well as a slowadoption of innovative management systems were major factors responsible fornot achieving SAR targets.

6. Prniect Resujt

19. Principal project objectives were only partially achieved: (i) Theincrease in annual roundwood production (from 5 million m , to a sustainable10 million m 3 ) in the underutilized forests of North Turkey, did not takeplace as was intended. The project has only helped to maintain production atabout the pre-project level; (ii) The project has had only little impact onimproving silvicultural, management and nursery practices or on resolvingregeneration problems which it was hoped would be one of the project's majorachievements. Although a start has been made by reducing rotations,increasing the area covered by one management plan and improving inventorymethods, the revised management plans are still too detailed, lengthy andrigid and thus lack the flexibility needed to respond to new researchfindings, and/or changing markets; (iii) The creation of additionalemployment for forest villagers was limited because project works undertakenwere much smaller than anticipated at appraisal: (iv) Since the output ofindustrial roundwood remained at the pre-project level, no additional rawmaterial was generated by the project for small private sector villagesawmills, for major forest industries located in the region and for severallarge-scale state-owned forest industries: (v) The intention to save forestimports was not fulfilled. The value of forest imports rose from US$ 6.4million in 1982 to US$ 168.8 million in 1987. DVring the same period thevolume of imports increased from 10,300 m to 1.4 million m : (vi)Achievements in erosion control, range improvement, amenity planting,protection forest improvement and the village roads programme remained alsobelow target largely because these activities were considered less importantthan the project's key components.

20. At appraisal the financial viability and economic justification ofthe project were based principally on the following two assumptions, namely:(i) that the project would generate large quantifiable benefits in the formof incremental industrial roundwood production and (ii) that in the absenceof the project MOF would not undertake significant alternative investments,in which case all forestry operations would cease by 1982 since theirexisting equipment had been planned to be scrapped by that date. The basicfinancial and economic rates of return then were 70% and 76% respectively.At completion, the value of production attributable to the project turnedout to be much lower than anticipated because the annual production ofindustrial roundwood had remained below the pre-project level of 5 millionm throughout the disbursement period. The higher than expected output offuelwood was too small to compensate for the shortfalls in roundwood. Inretr-ospect, the above assumption that in.the absence of the project forestryoperations would cease by 1982 (or scaled down gradually as underalternative assumptions for the economic analysis) is not valid anymorebecause of the considerable delays in the procurement of equipment andvehicles. In reassessing the financial viability it was assumed thereforethat the production without project would continue at the SAR-assumed levelfor 1981. With that assumption the financial rate of return at completion isnegative; the economic rate of return is estimated at about 27% whichreflects the large differences in financial and economic wood prices (seeTable 1 of Attachment 3).

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7. Proiect Sustainabilitv

21. Sustained benefits from project actions can be expected only abouthalf way thrQugh the economic life of the project because it was only duringthe latter part of the disbursement period that there was a slow acceptanceby the MOF staff of the importance of management plans, two samples of whichhad been prepared in the mid-seventies as guidelines. These plans take intoaccount, at'ong other variables, shorter rotation ages, new silviculturalcriteria, development of plantations and their management, a combination ofharvesting systems, interaction of villagers with the forest, erosioncontrol as well as range management and protection of the forest ecosystems.These plans will allow an increased harvest of between one-third and one-half the present cut, providing a determined effort is made to constructroads into the presently inaccessible remaining high forest areas whichwould allow the increased cut under the improved management plans. TheImpressive gains with plantation establishment should continue providedenthusiasm is not dampened by a reduction of funds and managerial direction.A start has been made in the understanding of interaction with the villagecommunities, but continued efforts are required to assure villagecooperation.

8. Bank Performance

22. The momentum the Bank had displayed during the early stages of theproject cycle wps not maintained during implementation. The im)rovement offorest management planning was one of the principal objectives of theproject, yet the Bank did not place sufficient emphasis on policy changesthrough the project. In 1982, when Government revised the physicalimplementation targets, the Bank missed an opportunity to reformulate theproject. In the same year, when aerial photographs became available, achance was missed to verify the resource base although it was known that theoriginal surveys had been made between 1962 and 1972. At this time theTurkish foresters had little experience of inventory work and in their ownwords were 'feeling their way". The forest type classification included nocategory of unmanageable high fore$ts although it was later realized thatconsiderable areas of high forest would have to be reclassified as.protection" forest.

23. The potential for increasing production from the forests byintensifying the current network of forest access roads, by adopting moremodern extraction systems (cableways) and reforestation with fast growingspecies had. been highlighted by earlier UNDP-financed studies.- Since therewere indications that Government was receptive to adoption of these newtechniques (the Bank had already played a role in introducing thesetechniques in South Turkey through the Akderiz project), it was felt withinthe Bank that there was obviously scope for further assistance to Governmentin adopting more productive forest management systems in the north of thecountry. Through an identification mission in April 1977 the Bank assistedGovernment in dafining the scope of the project and making arrangements forits further preparation. By joining part-time the FAO-CP preparation missionof June 1978, the Bank showed its continued interest in the project andtheir report was issued as Preparation/Preappraisal Report. The appraisalmission in September of that year endorsed project objectives andcomponents. The implementation period was extended from five to seven years.but the earlier estimates on wood resources in the project area and thephysical implementation targets set earlier in the project cycle wereaccepted. The only major issues that were discussed in the Bank prior tofinalization of the SAR were (i) the need to strengthen MOF's Forest ProjectMonitoring Unit (FPMU) and (ii) the financing and budgetary implicationsfrom the Bank's point of view.

-8-

24. Through periodic supervision missions the Bank was kept wellinformed about the shortcomings in project implementation. The major issueswere repeatedly highlighted but the resolutio.Q of key problems was left tothe fulfilment of Government promises with unfortunately little action beingtaken on solutions suggested by the Bank or consultants. Disbursement, whichhad been almost entirely dependent upon equipment procurement, continued tolag behind SAR forecasts throughout the project. The USS 86 million loan hadbeen approved in June 1978, with 31 March 1986 Closing Date, yet by 31December 1982 actual disbursement was USS 32.1 million compared with the SARfigure of USS 57.9 million. As of 31 July 1985, only about USS 43.5 millionhad been disbursed. Following Government request that funds under the loanbe made available for the financing of spare parts for existing machinery tobe used for purposes of the project, the Bank agreed that an amount notexceedinJ US$ 6 million may be utilized for the financing of such spareparts the para 2(a) of the Loan Agreement was revised accordingly.

25. Drawing on the experience gained from the project, it would seem inretrospect that policy changes required were too important as that theycould have been achieved through a single project, or, more specifically.through the provision of foreign exchange for the purchase of vehicles andequipment for an amount less than 10% of project costs. A focus on two orthree representative areas and to have solved the critical silvicultural andforest management problems before embarking on an ambitious project covering10 million hectares of forest land would have shown more satisfactoryresults. The support of a Government programme and project implementationthrough the existing Government structure has many advantdges. A cleardistinction between project and ongoing Government programme, however. maybecome quite difficult, particularly if the field staff is not in theposition to differentiate between project and non-project activities. Moreaccount s4ould have been taken of the deeply rooted objections on the partof the forett villagers to any interference with what they regard as theirinviolable rights. The idea of establishing a strong monitoring unit forthis type of forest was well accepted by the Bank but it should have beenpursued more vigorously. The dual role that the Bank required FPMU to play,namely liaison with the Bank on behalf of the Ministry and strict monitoringto provide executing management with analytical data may have beenincompatible. Located in the Ministry until 1984 it could do the first butnot the second. In 1985, a Bank review mission noted the manytechnical flaws in project design referred to elsewhere in thisreport. However, it was decided to complete the procurement ofproject equipment since replacing over-aged equipment had higheconomic benefit, even without the other technologicalimprovements envisaged under the project. The mission alsorecommended that improvements in forest methodology be firsttested on a pilot scale before trying to introduce them on thescale attempted under this project. The suggestion for such apilot operation was not taken up by the Government.

9. Borrower Performance

26. It seems that OGM has never been 'eally convinced thatthe northern forests could support the annual allowable cut (AAC)recommended at preparation and appraisal. However, in order toobtain the foreign exchange to purchase equipment for roadconstruction and logging, OGM did not raise objections duringproject formulation to the proposed increases in the AAC nor tothe proposed improvements in forest management and silviculturalpractices. A lack of commitment on the part of OGM throughout

implementation is exemplified by the fact that hardly anymeasures have been taken to t.nd solutions to the beech/spruceregeneration problem. The unwillingness to change forestmanagement practices through a combination of increasingclearfelling and artificial regeneration (in overmature areaswhere natural regeneration is unsuccessful) and reducingselection felling and natural regeneration to those areas wherenatural regeneration can be successful, resulted from theunresolved regeneration problem (natural or artificial) andreaction to forest villagers concern over loss of employment inthe face of less than buoyant demand for logs. The SAR'soveroptimistic estimates of forest resources and inadequateappreciation of the technical problems involved reinforced theoverly cautious attitude to change shown by the foresters. Lackof collaboration between field staff and the Borrower's ownResearch Institute also contributed to reluctance to change.Meanwhile, the current practice, a combination of "bakim"thinning and natural regeneration, is believed to slowly destroythe country's forest estate. If the project had been properlyimplemented, it could have at least provided some direction as tothe means of containing this destruction, but the opportunity waslost through the default of the concerned authorities.

- 10 -

27. Project management suffered from FPMU's poor performance and itsinability to undertake effectively the functions for which it was created.Most cri*ical of all was its failure to establish a monitoring andevaluati. system so essential for providing the raw data needed by themanagement to take decisions and introduce the change expected to come aboutas a result of project actions. The SAR called for consultants being takenon from the beginning of the project but the first consultant was notengaged until early 1983. By the end of the project only 38 man-months ofconsultancy had been achieved out of a planr.ed 144 man-months. The firstfellowship took place three years after start-up, a disappointing recordconsidering that at time of negotiations these inputs were believed to bevital to the success of the project. Problems to project implementationwere also posed by procurement issues largely because OGM was notorganizationally equipped to handle procurement in accordance with theBank's guidelines and often selected equipment whose high price could not bejustified. As a result, not only the type and quantities of equipmentpurchased was different from what was foreseen during appraisal but also thephasing of purchases and the source of finance utilized. Less loan fundswere used to procure SAR equipment and the "savings" were used to importitems such as trucks and other vehicles which, according to the SAR, were tobe purchased with Government funds on the local market (see Attachments 1and 2).

28. The seeming lack of coordi-nation between OGM, and the forestvillage communities made it very difficult to establish a fully integratedapproach to developing the forestry. and forest industries sector alonglines mutually beneficial to the parties concerned, and to the country as awhole. For example, it appears that inability to regulate grazing was havinga detrimental effect on the regeneration of beech and spruce and in the sameareas animosity between villages competing for resources made it difficultfor territorial staff to enter their forests. There is also room for muchcloser coordination between the research wing and territorial staff. Forexample, although altitude research trials of Sitka spruce, Douglas fir andPinus contorta have been undertaken in Macka Isletme for almost 20 years,none of the successful species have been introduced on a field trial basis.Mechanisms for transfer of successful research findings to the territorialforesters should be devised and stronger links established with both theAnkara Forestry Research Institute and appropriate Isletmes that wouldbenefit from these findings.

10. Proiect Relationshig

29. Almost two decades after the Bank first became involved in theforestry sector and after substantial investment, OGM still seemssomewhat reluctant to modernize its approach to forest management andsilvicultural practices and thereby improve the production of industrialroundwood. The reasons for this reluctance include: (i) conservatism ofTurkey's present forest policy makers; (ii) a notion that clearfelling. evenif it is done in small blocks and planted up straight away isenvironmentally undesirable; (iii) a view that as the cost of naturalregeneration is minimal compared to artificial regeneration. it isfinancially preferable even though it may take years to achieve: and (iv)limited financial control from the Treasury or policy guidance from SPObecause 95% of OGM's budgeting requirements comes from its own revolving andannex budgets derived from sales of timber or other produce from the forestestate.

- 11 -

il. Consulting Services

30. The SAR called for consultants to be employed by the enoof 1978. The fact that the first consultant arrived only inearly 1983 was due largely to a lack of qualified Englisnspeaking counterparts during the early project years and areluctance on the part of the Turkish foresters to use foreignexpertise. Because of their late arrival, the consultants'impact on the project was limited. The performance of thecontractors and the quality of their work can be rated as quitesatisfactory.

12. Project Documentation and Data

31. Most of the covenants agreed at negotiations have notbeen fully complied with (see Part III, 7). Annual work programswere rarely sent to the Bank as required. Audit reports wereoften submitted late, but with one exception the auditor'sopinion was clean and unqualified.

32. The SAR provided a useful framework for the Bank as itcontained the phasing of physical development targets by year,the type and phasing of vehicle and equipment purchases by numberof unit%, and an estimated schedule of disbursements. These keytables were used as benchmarks during the supervision phase.Most relevant to the Borrower were the annual targets of projectworks. A breakdown of these targets by sub-areas would have beenof help.

33. rhe data relevant for the preparation of the PCR werenot readily available. Most of them were incomplete or could notbe traced at all, largely because of organizational changesduring project implementation. To avoid this situation in futureprojects, the Borrower should be provided with forms specifyingthe type of data required and ageeement should be sought atnegotiations as to who would be responsible for their collectionon a regular basis throughout the life of the project.

13. Summary and Conclusions

34. The project did not fully meet its objectives andtargets for several reasons, including: (a) unrealisticallyoptimistic assumptions relating to production targets,availability of management skills, adoption of new technology andproject scope; (b) delay in procurement of machinery andequipment which were critical to implementation of projecttargets; (c) inadequate consideration of socioeconomic andgeographical distribution of forest villages as well as difficultterrain in project design; and (d) insufficient critical pathplanning between staff training and equipment procurement(project input) on one hand and implementation of project targets(project output) on the other. These design problems werecompounded by an unfavorable macroeconomic climate which

- 12 -

persisted durirg the entire period of project implementation.In addition, there appears never to have been a full meeting ofminds between Forestry Department officials and the Bank on thedesirability of the project's proposed changes in forestrypractices. Forestry is an important resource for Turkey andefforts to modernize methods employed continue to have nighpriority in order to allow for increased productivity withoutdepleting the growing stock or endangering the environment.However, the development and testing of improved methods shouldproceed on a pilot scale before efforts are made to introducethem on a broader basis.

35. While the project did not achieve its intended andrather ambitious objectives of increasing forest production andimproving forestry methods, it still had a number of benefitswhich made the investment worthwhile. By replacing over-agedequipment, the project prevented a sharp drop in production whichwould have occurred without this action. Another significantpositive result is the institutionalization of management plansfor annual forestry operations. Afforestation far exceeded theSAR estimates and the results, particularly in the pine growingregions, are impressive. In fact Turkey is ahead of many otherMediterranean countries in its mechanical afforestationtechniques. rhe fire protection program has also gone very well.Fuelwood production over the 1979-1987 period exceeded SARestimates by over 11 million steres. The 27% economic rate ofreturn for the project, while substantially less than projected,is still respectable and reflects the inherent profitability ofTurkish wood production even with current technology. Judgedagainst such standards, the project should not be considered atotal failure, even though the more ambitious production andtechnical objectives were not achieved.

- 13 -

PART II

PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

The "Final Report of Turkey Northern Forest Project(Loan 15B5 Tu)" prepared by the Government was submitted to theBank in July 1988. A copy is attached.

- 15 -

INTRODUCTION

Turkey Northern Forest Project (loan 1585 Tu) has been financed by Word Bank.

O,.ir Government decided to establish SEKA Newsprint-timber integreted factory

in Balikesir according to results of pre-studies forest resources w'hich has been made

for M¶armai& and lWestern Black Sea Region with collaburation FAO-GeneralDirectorate

of Forestry in September-1973.

For supplying the required raw-material possibilities the decidion has been

made -s tc, take an action for finding out the potential forest resources at 15 Forest

Concervancv areas in Egean-Marmara-Black sea region as a result of the meetings held

by participation of United Nations Development Programme, FAO and General Directorate

of Forestry members under the coordination of SEate plarniing Organisation.

The necessary feasibility study has been completed at the beginning of 1976.

The Proiect has been started in 1979) accord4ng to the signed loan contract

w-ith the liord Bank at the end of 1978 for providing the required foreign finance.

1-PROJECT OBJECTIVES

- To defermine the existing and future potential wood supply

- To prepare an analvsis of the wood supply in industrial use categories

- To indicate the cost of developing the forest resources and of the wood

availabitv for industrial use

- To maximize regional contributions to the national dem.ani for forest products,

exclude necessary consuming

- To increase round wood production in the currently under utilized forests

- To rea!ise management plan revisions on 5 million ha. of these forests.

- To develop appropriate forest management principles and parameters for the

optimum development of the forest rrsourcej.

- To detenmine requirements and forest resources development practices in respect

to watershe.a protection, erosion control, recreation and tourism development.

- To determine, enlargement types of fcrest areas through aforestation and assess

necessary requirements and posibilities

- To determine forest protection meaures requiired to minimi7- lasses

- To determine the impact of the forest development on emolavement and its

significant contrib;'-

- 16 -

- To provide additional raw material to founda-tions including private sector,

ORtS, SEKA and to help meet denand elsewvere in Turkey

- To create additional emplaysment.

2-INTRODUCE OF PROJECT

Productive Forest Area : 4.930.000 Ha.

Unproductive Forest Area : 5.570.000 Ha.

Total Forest Area : 10.500.000 Ha.

Forest Conceevancies in the project izmir, Balikesir, ganakkale,

Area Bursa,istanbul, Adapazari,

Eski.7ehir, Bolu,Zonguldak,

Kastamonu,Amasya ,Giresun,Trabzon,

Artvin,Erzurum,r

Foundation given credit World Bank

Amount of credit 86.000.000 US $

Interest X 7,5

Duration of without paid 4 Years

edgining -Finishing date of Credit 30.9.1978-30.3.1986

(It was extended by the 31.12.196)

Internal money TL. equivalent to 822.5 milyon

Us $

Total project cost (Internal + Credit) 908,5 Milyon US $

Amount of Credit expenditure (By the

end of 1986)

1btal exponditure 85.200.091,04 US $

Reman&er from credit 799.908,96 us $

3-PROJEC ORGANIZXEION

Procet Pmplantations was being traced by the Would Bank until March 1984

through Forest.Planning and Monitoring unit was established as an ndependent unit

according to dated 1978 loan agreement.

This unit was closed in 1984 March and its duties has been handed over to

Resarch, Planng and Coordination Department's.

- 17 -

That's why, administration of project has been started to be carried out

by Research Planning and Coordination Department in accordance with principles of

our General Directorate.

This position accelerated a lot of works for the project between departments

and the other orgamnzations. As a result of this new position the brocracy was

reduced and relations between our General Directorate and World Bank have been

regulated more than before.

It was also written by the World Bank that after 1984 March the project

organization reached at succesfull levels.

4-IMPORTANT FOREST TARGETS .4ND ACHIEVENENTS OF THE PROJECT

Project targets and achievements are shown in attached. Tabla 1 and graphs.

5-APPRECtATtON OF THE PROJECT

As it can be understood by examining the important targets and the

achievements of tables, in some of the main forestry activities such as industrialwood production, regenerAtion,renewing management plans, road construction, the

project targets can not be achieved.

The important targets and bottlenecks for the necessity of project revising

are being explained below.

5.1-INDUSTRIAL WOOD PRODUCTION

Annual allowable cut is being calculated by General Directorate of Forestry

based on findings of existing forest management plans.

Existing forest management plans show 11.671.931 cubic meter of annual

&slowable cut. In our country we always facing different figures between planindications and achievements in practice. Plan indications can only be achieved ifforests are protected against all destructive factors and we are able to practice

technical forestry operations required.Since we are facing the factors hampering

the practice required, such as, social factors, limited transportation, technical

unabilities, production of seedling needed etc, and illegal utilization of theforest resources. As a result it is found very difficult to achieve management plan

targets.

- 18 -

5.1.1-IH MAIN FACTORS PREVENTING OF PROJECT TARGETS IN INDUSTRIAL WOOD

PRODWCTION

a) Exlusion of some forest areas from production in soe Conservancies

because of out dated management plans and revision of management plans were notcompleted at required dates for those areas, and secondy, project targets which

require, completion of management plans revision of autdated plans by 1985, couldonly be achieved by 25 Z of total.

b) Because of the delays in delivering road machines and equipmient cocused

unconstructing of necessary roads resulted unexploitation of forests.

c) Public disputes in some project areas

d) Delay in procurement of production equipment needed for the extractionof wood in difficult texalne and in arcas where labor shortage is a problem.

e) Constraints in achieving annual allowable cut in project areas.

- 20 % of annual allowable cut as thinning and final feelling has turnedout for the areas to be reserved as protection fcTest and for the areas where

road coustruction were physichly inpossible

- 7 % of annual allowable cut has been calculated for scattered regeneration

areas.

- 3 % of annual allowable cut has been calculated for the areas whereland owner-ship disputes are exist.

- 6 Z of annual allowable cut has been leot because of illegal cutting,

fire damage and encrochments. As a result we can say that total of 36 % of annualallowable cut is practically not availlable

- Lack of possibilities to get wood from the area where natural regeneration

of beech failed, until availability of seedlings for artificial regeneration

- New management plans show about 25 % reduction in annual allowable cut.

5.2- REGENERAIION ACTIVITIES

According to management plans for the project area annual average

regeneration area for productive forest is 23.500 Ha. But this figure is 90.000

Ha. in the project.

5.2.1-REASONS PREVENTING ACfEEVEMENTS OF THE PROJECT TARGETS FOR NATURAL AMD

ARTIFICIAL RECENERATION

a) The project targets were higher,the management plan targets have to be

- 19 -

applied. The project targets prepared by foreign experts did not influenced the

realistic values.

b) The project targets have been prepared by taking into consideration of

forest values but infact the targets should be planned according to the low incamed

forest villagers pressures on the forest and regeneration areas. The socio-economii

structure and the distribution of the human settlement should have to be considered.

c) Because of the seedling shortages the artificial regeneration activities

could not be reached to the given targets especially in Fagus and Picea forest of

about 80-100 thousand hectares with 0,1-0,4 canopy classes.

d) Regenerated areas must be well protected. Unfortunatelly because of the high

social presures from the forest villagers it was not possible to work on big

regenation areas.

e) In the project the regeneration of productive forest are given as 80 %

artificial and 20 % natural. This was not appropriate with management plan .figures.

5.3-FOREST MANAGEMENT PLAN REVISIONS

Project target for plan revision indicates that forest management plans for

the project area should be completed by 1985.

5.3.1-REASONS PREVENTING ACHIEVEMENTS OF PROJECT TARGET IN MANAGEMENT PLANS

PREPERATION :

In order to prepare management plans in time and with required precision

first requirement is the provision of aereal photos in required quality and quantity

each year. As to be known the areal photos are provided From General Commandery

of Mapping. For the years of 1979, 1980 and 1981 we were not provided with aereal

photos for the project areas, owing to various difficulties have been faced in areal

photogiaphy. For Trabzon and Artvin Conservancies it took us two years,1982 and

1983 to get aereal photos. And management plans preparation for these conservancies

took us two years, 1983 and 1984 as well. In 1984 we were only be able to get aereal

photos for Bolu, Giresun and Zonguldak conservancies management plans preperation

for these areas could be completed in 1986.

Botlenecks in both aereal photography and number of Personnel Caused to

dictate annual work programs.

- 20 -

b) Forest total area in project region is 10.582.743 Ha. If we asme that one

management crew is able to prepare management plans for average area of 35.000 to

40.000 Ha. annually than we should have had 55 management crews in order to

complete management plans in 5 years.

5.4-ROAD CONSTRUCTION

5.4.1-REASONS PREVENTING ACHIEVEMENTS OF PROJECT ANNUAL TARGETS IN ROAD

CONSTRUCTION ARE SET OUT BELOW

a) Insufficient resources

b) Insufficient machine park at the begining of the project and delays in

equipment and spare parts procurements caused delays of putting in action of

required number of machines during this period.

c) low productivity in road coustruction caused by scattered felling areasdictated by management plans which do not permit team work.

d) Supply difficulties caused by scattered and remote work sites from residential

centers.

e) Work time limitation caused by high elevation and difficult rocky terrain

f) Difficulties of getting nattral stabilization material supply in forest

areas and lack of rock crushere to produce stabilization material caused reduction

in stabilization program.

g) Road stabilization is mainly planned for beech forest where frequent land

slides occur which damage existing drainage structures since these structures had

to be renewed, resulted in low productivity in both new road construction and road

stabilization.

6- REASONS FOR PROPOSED REVISED TARGETS IN 1982

A report dated 21 Nov.1981 explaning the reasons for proposed in 1982 had

been already sent to the Bank. We now summarize the reasons below.

6.1-REASONS FOR PROPOSED PRODUCTION TARGETS ARE SET OUT BELOW

a) Inventory work were not carried out in order to calculate annual allowable

cut during project preparetion in project forest areas.

b) In annual allowable cut calculation lineer programing were employed

considering increment of existing afforestation and future afforestation and

regeneration and proceeds to calculate annual felling area for regeneration as

- 21 -

soon as possible in the forest which were assumed mostly old aged.

c) Project assumes 90 % of the yield will be taken as final cut. This will

result in reduction of existing stocks at higer rate if new forest can not be

created.

d) Even the assumption under wider spacing in plantations, heavy thining,

pruning and fertilization which seem impossible to practice in the near future do

not accepted to be realistic.

e) Project target for production is based on the assumption at almost all old

forest and over rotation period so they should be artificialy regenerated in 50

years by fast growing species. According to this assumption annual average of

90.000 Ha. Should be clear cut and planted. Project assumes to reach the industrial

wood production target calculated by those cutting amounts.

6.2-REASONS FOR PROPOSED REVISED TARGETS IN REGENERATION

a) It is an obligation to follow management plan recomendations.

b) Seedling production promlems for species and provenances in quality and

quantity have been considered.

c) Regeneration areas have been determined, by taking in to consideration of

soil texture and site quality classes

d) An effective and continous protection reqirements have been considered.

Social and economic situation of forest villagers have been considered

e) Rich seed years for natural regeneration have been considered.

6.3-REASONS FOR PROPOSED REVISED TARGETS IN MANAGEMENT PLANS REVISION

When we revised the target for plans in 1982 we had in mind that in order

to complete existing shortfalls at that time we would need 50 management crews

and necessary areal photes then it is decided to complete the shortfalls during

the years 1985, 1986 and 1987.

6.4-REASONS FOR PROPOSED REVISED TARGETS IN ROAD CONSTRUCTIONS

a) It is assumed that since mechanization in production was to increase we

can give up coustructing some slope roads

b) Project assumption was to construct road to the scattered areas with lower

stocking. This did not seem reasonable to us

c) We assumed that we could give up some road stabilization since there were

or of similiar nature.

- 22 -

7- STEPS WHICH WERE TAKEN TO TRY TO RESOLVR THE DIFFICULTIES ENCOTERED

AND COMMENTS ON HOW SUCCESSFUL TDSWE STEPS HAVE BEEN:

Thining in young forest estalished by plantation and regenerations are

getting higher attention. As a result of these activities, production of chip wood

are increasing if compare to past years with 1986,

It is possible to show on a brief table as follows;

1979 1980 1981 1982 1983 1984 1985 1986

Chip Wood

Production(M3)121.292 131.417 226.082 532.830 589.950 516.750 610.952 53P.300

Activities for improvements of degraded coppices and renewal of producti-

on coppices has been accelerated. We eypected this way to save some industrial woood

from high forests which were used for fire wood.

Procurement of production equipment has helped to extract wood from

difficult sites. Remainders of old production which were of the road side and in

the valley has been appreciated. Training is continueing for the ftl1 use of pro-

uction equipment.

A new nursery of 25 Ha. set up in Trabzon region in order to supply

seedlings required for spruce artificial regeneration which was a major problem.

This nursery has been designed to produce about 8 to 10 million seedling annually.

In addition, a cool house has been set up in Adapazarl Hendek forest

nursery for seed storage at lower temperatures to be used for natural regeneration

on the other hand annually, 2,5 million beach seedlings have been produced in

Nursery of Ddzce-Gflkaya in Bolu (ionservancies in order to increase seedlings pro-

duct. 1.

Working has been continueing to increase sufficient level of seedlings

production in different forest tree species.

General Directorate of Forestry has started to increase the number of

management crews since 1979. It is obvious that to increase management crews there

are some requirements of experienced personnel. Annual budgets provide satisfactory

funds to achieve investment program and procure required equipment. If we compare

the 1979 capacity for making management plans with today it is clear it has been

increased about 2,5-3 times. Further measures for improvement of management plans

are being taken.

- 23 -

8- THE OIHER SUEJECTS AB(XT PROJECT

8.1- EDUCATION

The training of the tecnical staff involved in the project was completed

abroad. The trairning program was very beneficial to the staffs. The staffs who know

foreign language and are specialized in various fields of forestry were trained.

8.2- CONSULTANCY :

The specialists who were required by the Department of General Directorate

of forestry were employed according to loan agreement. Consultancy subject concerning

with the project was realized considering our needs as well. It can't be able to

say something about the specialists was usefull for us altough it was paid monthly

over 5.000 US $

8.3- YIELD RESEARCHS:

In Northern Turkey Forestry Project activities,under the coordination of

R.P.C Department and under the technical supervision of Forestry Research Institute

at Pinus nigra and Pinus silvestris forests some measurements and observations were

carried out for the aim of preparing yield tables.

For Pinus niFra; tzmir, ganakkale, Bursa,Eskisehir,Adapazarl,Kastamonu,

Giresun,Amasya and longuldak, For Pinus, silvestris; Bursa Eskisehir, Bolu,Zonguldak,

Kastamonu,Giresun,Trabzon and Erzurum conservancies were selected as pilot areas.

These activities were evaluated and completed by Forestry Research Institute

9. CONCLUStON

Project was started in 1979.

The project was under the responsibility of Forest Planning and Monitoring

Unit Sifice March 1984.

The monitoring unit established out of the General Directorate of Forestry

caused sq problems in credit using and delays of achiving given targets(procure-

.nent, training etc) from the begining of project.

Credit using amounts are as follows;

1979 1980 1081 1982 1983 1984 1985 1986US $ US $ US s US $ US$ US $ US $ US $

11532252 -173M29 363740 9966674 5742993 JZJ6 46 20675536 85mn9JfY

- 24 -

As it can be understood from the given table above annual credit using

percentage between 1979-1983 in 8,8 2 and 1984-1985 is 12,8 Z.

The transfering of project monitoring unit to OGM is resulted effectiveness

in project implementations. For example the procurement programmes and credit usingachievement are speeded up and training of technical stpff in abroad are nearly comp-leted.

As a result of provided benefits and gained expreinces of the project the

following evaluation can be;

Provided benefits

a) The settling of Project idea.

b) By the achievement of training programmes new experts were trained andexperienced in project activities and abroad resulted of increased technical activi-ties in TUrkish forestry and succesful implementation and evaluation of any kind ofexternally financed projects.

c) Unksuccesful achievement of some targets shows the deficiencies of the

TUrkish forestry and forest institutions.

d) Setting up important establishments such as nurseries.

Gained experiences

a) The essential need of participating Turkish forest technicians in projectplanning activities. The project preparing by only foreign experts proves that those

projects did not influence the country truths.

b) In employing of foreign experts, without of counterpart personnel the

expert can not work beneficialy. The need of employing foreign experts in required

subjects.

c) It is understood that the project implementation in large areas (10,5

million Ha) without adequate number of experienced technical experts, a complicated

project-has no benefits, instead of this small scaled projects in specific subjects

are decided and accepted beneficial.

d) The problems can not be solved in time without a monitoring unit andexperienced technical personnel to be imployed in such projects.

e) The projects leader must be sellected very carefully and he has goodrelations with the administration.

- 25 -

TLURKEY 14ORTd4RN i~O.A: TA Y ilRoJ.4T

liew Road Construction

3_.

t;.2 l90 191 172 1S 1X79: 15

2~~~2rtO-R:: E - .C-In_7;I

- 26 -

TUIRKEY N4ORTHERNd FORETRY i-ROJECT

Road Upgrad3ng

1~~~~~~'~ ~

'4 ee N ,~~~~~~~~~~~~~~~~~~~4 * .4

0.4 -~~~~~~~~~~~~~~~~~~~~~~~.

I/. 4,4\%

0.1 - .4. . p.41.~4.%* '4.4 4... *~~*4 4..

.4/4 1 l 1.402 4.%14 4 195 1 0

/4 /\ / /.4 /44Y 4 .4.

./\4 PROGR4\ ACH/44% ..4%% 4T

- 27 -

TURKEY FiORTHER14 FOREvvRY PROJECTRoad SAabil.zation

El~~e elGG L AniE;E

-28 -

TUiRKEY NtORMADN P'OkRS.STRY PRO)JECTRostd Malntenance

so -_

s. ! n ' u 0 0 lo 194090 ,Ht lEX 1R RE. 9S 10

E-4 ~ ~ ~ ~ ~ ~ ~~RR

CA~ ~~~E RORA E T.IYliE7

-29 -

TURKEY IiORwTHZRr FOR,-':TRY lRO,.ECTIndustrial 'food

e _ 0 0 | v A/~~~~~e

l99'T 7Il 18 19 CZ 95 1J

E-4 77~~~~~YAR

2 z] PROGRAlii [ ACHIEV<LEJiT~~~~~

-30-

TUMM1Y 1XORTkiAdQN FOU4SRY PROJiCT

FPuel 'good

16

14 7 77- 9%

13 V7oN .

EX A~~. /

\% le /O 9% .

1. el~~~~~~~/9. * S

I ~~ ~ ~ /\9% J8 19"3 18 0 8/~~~YAR

PROGRAIL - ACS. i9%9 'NT

- 31 -

TURKUY t)iiRiit S , I AJSCTliatural Regeneration (Site preparation)

74 -_

1 414 419-~~ .. .

;3 13N1 13E ISO9; 1ga 15 I04 13aN lgB6

7LA^RSP, ROGRA1' ED ;.-;V$;

- 32 -

T;IR.:;:. t.WAZUSRN .Nfi.Y RNECTArti?ical Fe,;erer..±in (Site preparation)

1? -

,512 / ,

11 q 'sl I "I I 8

Rz-jOGR;.:zA.'-_...... i;

- 33 -

TURKEY l;ORTHlRN FORESTRY PROJkiCTImprovement Felling

24-

22

20 7

24 ~ 9i 19D -91 1B 93 16 95 lB

12 -~~~/

/~~~~~~~d

14

12

a-

.~~~ / ..

.EA.RSPOG~AIw ACHIEVELMEIT

- 34 -

TURKEY NORTHERN PORESTRY PROJECT

Forest Ualbtenanoo

10 0.

~~~~~~~~~~~~~~~~~. %

- 35 -

TURKEY NORTHERN FORESTRY PROJEC*T

Forestation (Satablishment)

F~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ _7

19t3 l980 l9a1 1982 1903 l984 19Bj 1986~~~~~~~~~~~~~~~~~~J

C-4 40 -~ ~ ~ YAR

E7] YROGR Ej ACHIEVEXENT~~~~~~~~~~~~~~~~~~~~~~~~~~~%61

- 36 -

TURK(EY NORTHERN FORESTRY PROJECTPorestation (Maintenace)

1fi0 ,.

Be1 j11Xl~~~~~~~~~~~7

l - R1 91 18 981 1Ol l9S 191

140 -~ ~ ~ ~ ~ E.R

22 } ROGRAll E] ACHIE'ZtENT~~~~~~~~~~~~~~~~~~~~~~~~~~~.6

-37 -

TURKEY NORTHERN FORESTRY-PROJECT

Erosion Control (Establishmzent)

7. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~7

a- r4-~~~~~~~~~~~~~~~~~~~~

4i

S ~ ~ ~ ~ ~~ERPROGRAM ACHIEVEMENT.

- 38 -

iUPURZU i:)RTplJ e*OR.SThY PRO3ECTEz'Oaion Control (biaLnj;na4ic.)

17 -

15

15

14

A.~~~~~~~~~,\

I 9.~~~~~~~~~~~~~~~4 1

3 -~ ~ ~ ~ ~ ~ ~ /\

1979 1980 161 1962 1*/ 1941\'1 8

/~~~ 'r7 .FS ACHm.11., IN

-39-

TfFYNO%-M=R±I '01rSTRY ?PfO!-CTRlang* ImProvement (Establishmuent)

1.4 -

1.6 .e

C-4 ~~.. A% %

Z /. /~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~% N

I * .1S... f* *. L, J

- 40 -

TURXEY- NORTHERN POR?ZTRY PRojrCTRang, Improvement (L&aintenanoe)

J/~~~~~

,Z~~~~~~~~~~~~~~~~~~~~~~~~~~. . -

eY'E' 01|022|1M. d~~~~~~~~~~~*

13'9 1909 1901 1982 1993 1984 1985 1986

' .. * /1

ar A F /"

P" GP .1 N- ArH! *!--

-41 -

TURKEY NORTIMERN FORE-STRY PRDJBCPUansement Plan Revilsior

2.4 - _.

1979 lan la 1980 19811a B3 1984 1 985 19flu

;R A.RS

EUPROGRAL ACHIVhtZNT

- 42 -

TURKEY

NORTHERN FORESTRY PRCJECT

Table -I-

OPLR6T1363 =8je 01 Lbtv.Umet0.6 I 6mev.Ovje 001-3 M ." l jet 08g4ee6 008w 66=.".gma 8m Set 17OU 1a 2s vg a 3t~g u

1.41. 44" 66 @eatIWO KLa 8.4 .D 4.0Q1 3.100 3.004 149 30 La" &.M 3.960 w.3 a.4s a.614_M KWa "a 56 X D.Ow 720 701 1.000 710 759 I.100 1.6O0 0o "l

5-440 eabltession a 2.000 1.30 4" SAMW 1.770 1.040 4.0OD 1.693 1.47 4.000 .103 1.45 1.15)

4.46 Ka 44.6000 l0.100 316440 4*750 4T.34 40.171 10.700 49.144 8.331 54.300 W.OOD 5.04) a.165

5-leba44tl 6 MM 1.000 .66" 4.576 MOO 5 .616 4.540 6000 6.7 4.71 8.510 6.8- $.270 M .06

&.o1 406 0006. 10.340 82.470 13.077 10.400 10.41 15.m 10.400 1.608 .N310 10.500 13.310 11.30) 1.071

741tb*MS *' sinweuaaf Snte )tPWS?I0) fin 13.000 361 e.034 14.000 17.100 S.V04 15.00 10.000 9.060 16.000 .0 S 6.OO 172 .6

N.Ar.titt1 3 minlusb 00 7.000 1064 12.360 41.000 160.0" 6.06 43.010 13.450 11."7 46.010 1A.0W0 10.520 5.36

9.upivemu"t Posts* MCn4a-oe lt.loamet) *1 - .600 1.? - 3.410 707 - 2.43 1.390 - 1 .650 3.608

i0.eue.t li 49.000 63.340 46.M7 6101 73.91v 52.50S 64.01D 73.250 61.7 72.n00 106.700 79.000 67.679

U.I,ststSoa 8* 20.000 35.506 10.716 22.000 7.3 13.297 14.031 43.50 %C .6 24.003 84.00 41.342 33.54?

1F34 bttea (latP) s1 123.60o P4.16 72.409 170.0M 3*.962 .e.e' 211.0" n9.7 MM.61 261.000 74.09 s98.C?7 94.516

1l..abu 0t1au1 ma 6.000 2.SD 2.054 6.000 1.60 1.539 1.000 2.400 069 6.000 3.0oo 2.400 R.1s9

314ea1aa CeealtLejinDaa) He 14.000 1.350 4.661 19.000 4.*3 34.06 24.000 6.09) 6.538 36.000 7.00 6.053 S.V?

15.. tpovmat Its 3.00W I.S00 1.360 9.000 U.V, 85. 9.000 1.00 640 10.0W0 1.100 1.250 2n

16-bug 1mervemsatt1.a1ateaaaee) Mm 7.000 6.000 370 11.000 1.3W* 1.40 10.000 3.092 19 25.000 N.M00 3.400 IO0

17maemAf"S tul _.wu4m _00*1 * 2.200 363 - 2.24i )43 1.u5 6L14 _ 1.610 1.219

1IS3. %904 16" 319366 *03 -Aegis" A I *sV- fetrojt 1091269 O. Pv*,"*e 36,1804 AAV oa ^ rV0446- frjt kteed 0160 ale- 7045 6240 19-6 79.06

4.53 3.40 2.024 8.046 4.53 USO0 2.03 4 .137 j.320 2.600 1.045 1.426 - .600 1.3) Jn7 2.300 12.400 1T2.1 14.663

1.30 LWO no 63? 1.100 .100 710 6a" 1.100 1.100 1n D 13 1 767 435 T.810W 1.4D 5.617 T 53

4.3 63.0 1.400 1.054 4.000 50 1.460 1M 4.000 2.600 1L46 64 * h.700 5 66 4.000 I8.10 11.153 6.116

,&M 18300 53.107 46.50 60650 14.700 5.345 46.741 64.00 7.200 .M7 M 9.00 49.339 .. 268 WOODe MA. 411#461 32.

M .10 "0 4.30 9.50 1.270 4.961 464 1.D0 7-n.670 4.7 4.509 - 640 4.93 4.4T 59.100 36.30 4.114 3A."?

tDg SUM 1.8? 14.06 10.600 IRA"60 MM 103L1 10.70t 1.t 0 11.61) 1.U t U1?OO u1.660 7.h722 73.4 6610 91.65 96.11U

0.1 UAW 14.16 U.366 17.00 13.30 MM 9.715 1.0 14.93 14.15 1.1 - 17.000 14.60 11.96? 1w0.000 6.W 15.401 6.934

9eD0m 1u13 s.en ^026 5 o 1.JOD 1.310 7.723 15.00 15.000 7.664 6.335 16.800 1.40 6.8 383.000 66.00 o03? 713.00

* * 5.455 7.43 - -l 14.9901847 - 19.031 16.190 - s u" 16.0*6 ? 3 59.34

74.00 U11.1 70.5 74.921 MOOD 133.400 UJ- 5 03.3 76.000 1o0.000 91.63? .591 . 166600 n764 6u93 4TLODD 6.5 69.1 mou.O 30 41.190 48.04 0 230.000 19.42046 50 U D 9A 0 00O 62.045 SUM - 29.000 61.0 54.49 174.00 0 1)7.006 3 155 M406

s%M e.00 11.364 130.194 317.000 94.000 18.645 30 330.000 126.100 139.004 ,) 11.000 1U6.3W9 IS5611 1.1n 4o0.000 s0.t5 e02.4

.u0 M0 4.15 2.69? 1o.0 3.00 4.660 3.191 UAW06 3.060 6.750 6.464 -L .00 5.100 4.591 1.Oo 1.5.00 29.945 24.34

.060o 600 16.500 13.34u 3s.00o 9.000 6.5 t.39n 0.0oe 9.000 9.000 6.4 - 9A 6.c00 6.690 8200o0 42.0 66.651 SS.ns

.0o 1SO 10ao 1.135 11.060 1. S00 11O 11.000 1.100 2.150 1.U * 1.5s0 Lse0 1.000 64e0e 7100 12.300 6.563

m0oos 310 40 .614 41.000 3.500 6.750 1.33U S0000 35OO 2.900 LOi0t 3.M500 4.300 1.251 109.00 17.100 33.048 10.032

1.989 1.214 - L 1.600 1.*60 2.05? 92? 1. 415 41 - - 14.744 7.141

l-4rojett T7rer . ha,. be. taken from _AtP report sud rerx:vJ twpetc fren t doted 19t2 rev" 4 report.

2-M0 promus .*6d achlevemnta hbe be.9, t3 n from .* i'.partbunto.

3-Arbevesnt of fuel Io we totol of 5reludLz* cuttut u 4 tra.orttozt a exclud4iq culttsr" end tr wipwtftltoa.

4-eorastl7 mlntens an total * r 'utural reoenermtonU a..- srtiic ger 6a0 rhich O"e Include tendian of 1013e

rWrorntIO and thialag.

S-f,ojoct tarves awe for 197O-19m yea", revised taets ae for 1"2-197 eer.

- 43 -

PART III

STATISTICAL INFORMATION

1. Related Bank Loans

Loan/Title Puroose Aonroval Status Comments

1. Ardeniz Forest Antalya 1974 Closed ) Satisfactory asUtilization Project Forestry ) far as the(Loan 957-TU) ) industrial

) elements were2. Balikesir Newsprint Newsprint 1976 Closed ) concerned, but

Project ) less success-(Loan No. 1258-TU) ) fully for the

) forestry com-) ponent of the) Antalya project.

2. Project Timetable

iiezm Plied Revised Actual

Reconnaissance n.a. n.a. Nov., 1976Identification n.a. n.a. April, 1977Preparation/Preappraisal n.a. n.a. Jun/Jul., 1977Appraisal n.a. n.a. Sep/Oct., 1977Loan Negotiations n.a. n.a May, 1978Board Approval June 1, 1978 - June 1, 1978Loan Signature n.a. June 5, 1978Loan Effectiveness Sep. 4. 1978 Oct. 30, 1978 Oct. 30, 1978

Loan Closing Mar. 31, 1986 Dec. 31, 1986 June 30, 1987 1/June 30, 1987

Project Completion Sep. 30, 1985

1/ To accommodate final disbursements, the loan accounts were kept openuntil March 31, 1988.

- 44 -

Comments: (Issues Raised at Each Stage of Project Cycle)

Identification

.) Aureement on a site for the nroposed SEKA Pulg Mill. There was somedisagreement between OGM and SPO on this point. Doubts were alsoexpressed about suitable water supply in the sites prepared byconsultants.

ii) Scope of the forest village comnonent in relation to a proposedFAO/UNDP Proje^t. The Directorate of Forest Village Development.ORKOY, had an ongoing Forest Village Development ImprovementProgramme. FAO/UNDP were proposing a 3-5 year technical assistanceproject for strengthening the planning of Forest VillageDevelopment in the Bagindar Region. The relationship between thisongoing and planned Bank activity needed further clarification.

iii) Technigal Assistance. There was considerable reluctance in someparts of MOF to accept expatriate technical assistance for projectplanning and implementation. On the other hand, it seemed fairlycertain that some level of expatriate input would be needed if theproject was to be successful.

Preparation

i) Implementation Canacity. The CP mission pointed out that duringappraisal particular attention should be paid to project risksrelated to possible failure by the Government's forest service toachieve road construction targets. "If the targets analysed in thisproject are not achieved, there is a risk that in order to maintainlog production at the proposed project level, clearfelling of areasunsuitable for regeneration, or overcutting of forests served byexisting roads, might take place."

ii) Revision of Mananement Plans in the Project Area should beundertaken as soon as possible to take account of the newafforestation techniques, felling regimes, etc., proposed in theFAO studies concerned ("Forest Resources in the European Region"and "Forestry survey of the North Aegean, Marmara and Black Searegions of Turkey", Rome, 1976).

iii) Technical Assistance had been proposed for the initial phase of theproject, especially with the need for adequate maintenance of thelarge quantities of equipment and with the implementation of theproposed management and harvesting techniques. While the TurkishGovernment was agreeable to the technical assistance. it wasreluctant to have such assistance financed out of loan funds.

Apprai sal

i) Strengthening of MOF's Project Monitoring Unit (FPMU) to ensuresatisfactory preparation of annual operational working plans priorto implementation of recommended project physical programes, andalso to provide a basis for monitoring of project progress.

- 45 -

ii) Financial and Budaetarv Imolications of the Project from the Bank'spoint of view. The appraisal mission reviewed two alternativeoptions for reducing the project size, either taking a smallerproject area, or reducing the project development period to ashorter time slice. In relation to the first option of a smallerproject area, the appraisal mission pointed out that Governmentwith UNDP/FAO assistance had spent the last three years and overUS$ 1 million in developing an integrated long-term forestry andforest industry management plan based on allowable cut, felling.thinning, reforestation of the northern region as a whole. Theproject design was based entirely on this work and Government hadfully accepted the proposal. No project had yet been formulated fora smaller area. nor could it be without a revision of themanagement planning assumptions which would necessitate revisedfeasibility studies; it would also imply phasing of forest industryestablishment over a longer period and could conceivably delaystart-up of the pulp mill project then scheduled for Bank financingin FY 196O. A second main point was that, from the technical pointof view, the forests of the northern region are all undercut.current production was less than half the annual allowable cut.Over maturity in the natural forest was, in many areas, leading todeclining yields and spread of disease or insect damage. Toconcentrate road and logging operations in selected ForestDistricts would constitute an unsound approach to technical forestmanagement which the Bank could not support. For these reasons theAppraisal Mission rejected the option of a smaller project.

iii) The alternative of a project with a shorter development period wasnot considered to be viable because of the nature of project worksand benefits. Reducing the project development period to a 4-yeartime slice, for example, would not significantly reduce foreignexchange costs (they would drop from US$ 95 million to about US$ 65million) and would be technically unsound because project roadconstruction operations would be only 20% completed and forestryoperations only 10% completed by the end of the development period.It would be too early to assess the results of reforestation orindustrial plantation establishment operations. A 4-year projectwould not ensure future wood supplies for the industrial complexplanned for Bank borrowing in FY80. Project yields would remain atthe 1982 level. Based on this approach the project's financial rateand economic rates of return would both fall to 4%. For thesereasons the mission also rejected this option.

3. Loan Disbursements

Cumulative Estimated and Actual Disbursements

FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88

Appraisal Estimate (US$ million) 27.00 37.88 47.06 54.98 66.70 74.50 86.00

Actual (US$ million) 0.97 16.77 18.65 29.44 36.18 38.94 43.23 58.78 75.16 85.20

Actual as Z of Estimate 3.6 44.3 39.6 53.5 54.2 52.3 50.3 68.3 87.4 99.1 >

Date of Final Disbursement: April 13, 1988

_ 47 -

3a. Withdrawal of the Proceeds of the Loan

Original Allocation Final AllocationCategory US$ M. Percent US$ M. Percent

(1) Equipment and Machinery

(a) Road Construction, Stabi-lization and Upgrading 27.60 32.1 18.03 21.2

(b) Logging 19.30 22.4 30.62 35.9

(c) Mechanical Workshop 2.20 2.8 2.89 3.4

(d) Forestry Operations 26.20 30.5 32.58 38.2

(e) Management Planning 1.20 1.4 0.48 0.6

(2) Specialists Services andFellowships 0.90 1.0 0.62 0.7

(3) Unallocated 8.60 10.0 - -

TIOTAL 86.00 100.0 85.20 * 100.0

* The balance of US$800,000 (rounded) was cancelled effectiveApril 13, 1988.

-48-

4; trept JmoleuoIjtigjAoerasaal PCI

Indicators Unit Et-$_"Wte WfZAM yi

Nov red censtruction 000 in 2t 7 14.4Read stabilization *21.2 8.0Read tpquading 8.0 5.5Road tmsntuance * 43U 6 317.6

Indnstrial veed million t 59. 5 35.0Feelvoed pillion steres 73.4 97.4

Forstel Xratloil

Warking for telling pillion i - S3.4Cleuufefling 1000 ha 403.0 142.8

flterw elt fd ling * 189.0 225.1lbelttived falling *312.0 227.2

Thiuning 347.0 1997.0Noteral -ree oran-a t o p ion * 109.0 -- Silo ccl Val mintonmnce / 3342.0 t3S0.0Pentectita roest 501.- P-lantino in understocked ares * 29 0S35

"reunt vork * 80

- zth ttiell *t tracs fo fire 010km b :0 t.2mm ne n* lesett towur s.0 O93.0

-=tr eti n of dMti"S to elistiD9 tWMi 71 93.0-int ance of leokaot tMers

- Estlamt of n radio links * 4-Nintee of radio links - 1.6

- Eetinof doe t 3lp one ZIni 00 kmt 1.3- nttean of teoni l s *

BDildin, consLtretiu and maintoan

New mchical nerheps nin 7 12Additsion to existing uetksep s 9 IICongiurectlmn ci admnistrtini 4 wuiebu1igs (otbpet than ue as)i and ensiog -

Bdeiding uaintennce--Fereotro euriore

Artificial vegwtiea df ctoum foet 000 ha 323 6UlIndustrial plttnim establiohit . 76Conetial aestatle ti. * 86Fire centrol truning in pulanations *n-Ereuim ontrol*S72.Raugiim'euunnt * 4 40.3b^it plating ^ 12-

- 49 -

Censtrectin f neo uorseis Bember of "its 7 6of 3-4 NilliSnplant caparity

Naimtmnance Csileic)turalD of:- Attificial regeretstionaffrestation and animp planting 0 ha 2/

- Insdutrial planati ons 2r- trousin control 19Z N- Range iroeent * 115isa nRainteu te rier-to upgradino) in:-lad ItRSen ae ished to -I979 : 41- Plantatimns pltat t179uw-I ^{

- f ptte 11 ins) eI ads)- Eresin ctntro ara (1979 onvards)

Boildinn constructien and maintenancewr;o ne nertaten o, tawien senat it-ACI utters appreprinte)

Adinistrative, servire and training

baidi * r staff & vitkers * 594 192

Villae read cinstrectionVillage road stabili7ation 000 ki 41Village read Upgrading 00 in V

Constructieon f vjdlife breeding centres 4Transplatatiin operations 3Constrectien of roads

1/ Contains all read construction and aintuance for all Sectors of pnject.2/t All siliceltera) maintenance epeptions have bemn combined3/ All ferestri regen eratie operatiens re combined because of difficultys { earatin of t s n data a gatherd.U 4 e rJad constructio And maintenance section.S/ indes adinistrati e, service and training cnres.j/ Incldes 1986.

-50-

5. Proiect Costs and Financing

A. Project Costs

Appraisal Estimate Actual

Foreign ForeignLocal Exchangg Local Exchanae

................ (US$ million).

CIVIL WORKS

- Road Construction 169.6 91.4 261.0 91.9 49.5 141.4- Erosion Control and 38.8 9.7 48.5 13.8 3.5 17.3

Range Improvement- Forest Protection 16.2 4.0 20.2 2.2 .6 2.8- Buildings 40. 12.5 f 60.4 2LI Q .

Sub-total Civil Works 265.5 124.6 390.1 112.2 55.6 167.8

MACHINERY AND EQUIPMENT 31.2 93.6 124.8 15.8 96.4 112.2

SERVICES 7.0 5.9 12.9 - .6 .6

Total Base Costs ML Z 2Z4.1 52L.8.aa IZ 1 52. ZL

Contingencies- Physical (5%) 15.2 11.2 26.4- Price (69%) 272.8 87.8 360.6

Total Project Costs 591.7 323.1 914.8 128.0 152.6 280.6

Comments

34. Total project costs expressed in USS are substantially lower thanestimated at appraisal for two principal reasons:

i) Most of the project works undertaken remained well below SARtargets. Almost 60% of total base costs were to be generated bycivil works, equipment and machinery for road construction butachievements in new road construction were only 54% of the SARtarget.

ii) A dramatic appreciation of the USS against the TL (from TL 25.00 =US$ 1.00 at appraisal to TL 674.50 = US$ 1.00 in 1986 and TL 857.21= US$ 1.00 in 1987).

Earlier estimates (1982) had put the total project costs at US$ 550 million.The basis had been actual expenditures during 1979-81. estimates for 1982and projections for 1983-87.

- 51 -

B. Project Financino

Planned (LoanSource lComments

(US$ M) % (US$ M) %

IBRO Expenditure 86.0 9.4 85.2 30.4Categories

Suppliers Credit 6.5 0.7 6.5 2.3

Domestic 822.3 89.9 188.9 67.3

TOTAL 914.8 100.0 280.6 100.0

6. Project Results

A. Direct Benefits

Appraisal Esimate atIndicators Estimate Closing Date/Full Dev.

Incremental production (m¶llion mi3) 1.O noneof industrial roundwood p.a.

Saving in foreign (US$ million) 500.0 noneexchange p.a

Net contribution (US$ million) 92.0 * nonep.a

Employment creation in (million of 14.2 9.0 1/forestry operations man/days p.a.)

Employment created in (million of 94.0 40.0 1/project works man/days over

7 years)

1/ Estimate based on achievement of SAR targets

* TL 2.3 billion at TL 25JUS$.

- 52 -

B. Economic Tmpact

Aagrais$alEstimate PCR Estimate

............. M ..............Economic Rate of Return

Basic rate 76 1) about 27 2!

Underlying Assumotions:

.1/ In the absence of the project MOFwould not undertake significantalternative investments. In thiscase all forestry operations wouldcease by 1982.

2/ In the absence of the project. theSAR-assumed 1981 level of productionof 2.3 million m would continueuntil 1998. (See also Attachment 3).

Comment: Considering the overall performance of the project, the PCR estimatewould appear to be unjustified. Its high level is explained by the fact thatmost of OGM's production is sold to public sector enterprises at lower thanworld market prices. As shown in Table 1 of Attachment 3, economic values forindustrial roundwood and fuelwood in some years exceed the correspondingfinancial prices by several hundred percent.

C. Financial Impact

AonraisalEstimate PCR Estimate

.......................................... (%

Financial Rate of Return

Base estimate 70 negative

Underlying Assumgtions

Same as above under B.

- 53 -

D. Studies

The project did not include any studies.

7. Status of Covenants

Deadline forCovenant Subject Compliance Status

Loan Agreement

- 3.01 (b) The Borrower shall at Throughout Partiallyall times maintain implementation compliedFPMU with such powers withas shall be necessaryto carry out itsfunctions

- 3.01 (c) The Borrower shall Throughout Delayedemploy in a timely implementation and onlymanner international- partiallyly recruited technical compliedspecialists with

- 3.02 (b) Except as the Bank Throughout Not fullyshall otherwise agree implementation compliedthe Borrower shall withcause all goods andservices financed outof the proceeds of theloan to be used ex-clusively for theProject

- 3.03 (b) The Borrower shall Throughout Substan-maintain such records, implementation tiallyprocedures and sepa- compliedrate accounts as shall withbe adequate to recordand monitor Projectprogress; shall havesuch accounts auditedfor each FY; and fur-nish to the Bank.auditreports not later thanseven months after theend of such year

- 54 -

- 3.03 (c) Promptly after comple- Within six Partially

tion of the Project ... months of complied

the Borrower shall pre- closing date with

pare and furnish to theBank a report on theexecution and initialoperation of theProject

- 3.05 The Borrower shall, Auoq.st 15 of Partially

through FPMU, prepare preceding complied

and submit to the Bank year with

the proposed work pro-gram for the next year

- 3.06 The Borrower shall September 30, Partially

establish within the 1980 complied

Project area and withthereafter maintain inoperation 30 managementplanning teams ... torevise the currentmanagement plans foreach isletme in theProject area

8. Use ofRBank Resources

A. Staff Inputts 1/

FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 Total

Preappraisal 27.0 69.6 96.6 V

Appraisal 65.7 65.7

Negotiationt 9.0 9.0

Stupervision 0.4 20.1 15.4 24.6 20.1 13.9 12.1 55.5 21.7 7.3 3.6 194.7Other 0.2 1.6 1.8

Total 27.0 144.7 20.1 15.4 24.8 20.1 13.9 13.7 55.5 21.7 7.3 3.6 i67.8

1/ In staffweeks; source: TRS.

3. Ns~in

Nenth/ No. of No. of 5 1 S alizatign Performance Tro of

Recengaissnmce 1117h I Fldeuiifictieu t14/M 2 3 Fpne arat1.n/Preapprai,a1 06177 4 5 f F ENS"p r.isia 217 ter & fF)E,U 2 -2 1 11/78 2 2 F' N

*u.rigsn2 6/BI 3 14 F,UL 2 2 93 2/96 1 11 F 2 2 04 S/783 2 26 FtRLI 3 2 F,I,T

* S 3/81 1 1s F 2 I,1 Is 9/S1 2 In F,lL 2 3 F,N,T

* 7 2/92 1 ii F 2 2 FNT* Om9 3 16 F FAISL 2 2FNIT

- 9 7/83 2 7 F1RL 2 1 F INOTI 1t 2294 1e F 2 3 N,TIFI 11 I1r94 t 14 F 3 2 T Nf -tin12 5/95 17 F, E,L 3 3 TON

* 13 11/95 5 EIF 3 3 MIT* 14 16/97 1 16F3

I/ E £couoRist EN Eaviruwntallsii F a Forester, FA Financial Anaipsi,IL lad&a ani I.quinq Expert.

I Problem.frve?oSao tJroble': Li oeriate probless;o 3 aNhjor prsblmn.V// F ~ flNanaer. S: Othbe'i"'y Tz echnical.

-57-

C.st

Average S Cost of Averag St cost of

Staoe of I5nJiL L Cost HO Activities Field Activitv

Proiect Cnele g.5.tLi. L oer Mission Member ner Mission Member

Through Appraisal )

Appraisal through )Board Approval )

) Information not available to mission

Board Approval )through )Effectiveness )

Supervision )

TURKEY

NDEN FOESlRY FR.JECT

FROJECT CGRETION REORT

VaLue of Eqhipnwlt ard VehicLes Finrwxed out of the Lmm

it.. 1979 1960 1981 1982 1983 1984 1985 1 1987 TotaL........................................................... am 90).................................................

Vehicles - - 2,818.9 - 278.6 - - - 13,789.3 16,956.8Tractors - 12,325.9 642.6 5,346.1 2,205.0 - 16,963.5 - 4,077.9 41,579.0Loodrs - 4,073.3 - - - - - - 873.5 4,946.8

biLe Towmrs - - - 0- - - 54.0 692.2 1,196.2SpeciaL EcL1pmert - 124.1 25.9 - 140a8 1,01L4 - 2,396.7 278.3 .3,984.2Forestry Eqjipiet - 477.? - 619.0 222.1 - 67.2 196.6 98.1 1,680.?Radio E"AP*nt 1,143.3 - 1?57.7 - - 321.9 77.2 42.4 2,219.8 4,862.3Mmrku*q EqjipApnt L - 89 - - - - 267.2 - 276.1

Sbr-totaL 1,143.3 17,0M1.0 4,624.0 5,981 2,846.5 1,340.3 17,107.9 3,406.9 22,029.1 75,482.1 U'

Vre FPrts - 492.1 8067 2,591.7 2,276.9 - 257.3 - 2,6M.1 9,094.8

TOTAL 1,143.3 17,493.1 5,43D.7 8,574.8 5,123.4 1,340.3 17,365.2 3,406.9 24,699.2 84,576.9

Source: 0lL

- 59 -

attchewnt 2

*TUUR1sE Y

N09THERN FORESTRY PROJECT

PROJECT CONOEZTtON REPORT

Procurement of fauiofnt and Vehictes - Number of Units by Source of financing

IeJer of Units Source of Finance

SAR tuat SiR ActuatVehicLes.Pic-ups &o 44 - GOTPick-ups, awD 482 265 T GOT

t P1ic-ups, 4WD 2 -_.Dick-ps, 4WD 910 596 to"R

Sub-totat: T; UT.Pick-uo, 2 WD 452 265 GOT 60T.Stion wagons, 4W0 770 8 .Lowd Trucks 32 10 IGRo

23 GOT.Fire Lorries 43 35 19R0.Aabite Workshoo trucks 60 25.Lorries, 5-7.5 t 174 155 GOT.Larries, 9 t 71 70 -.NiflibuSs 70

tractors.! oetrs, 180-220 ho 216 230 I9RO logoI Dozer, 140 ho 44 49 -

! ractors, 90-100 ho 1S5 352.Tractors, 65-85 ho 712 185 GOT.Tractors, 65-85 ho 136 GOT

Loaders.we =W9 116 82 193 £i93.0eeot 112 10 GOT.Hydrautic Graote 140 32 1830.Hydrautic Grauote 70 - GOT -

30bite Logging Towes 114 30 BRO too 1

So"ciat £euiomnt.Winches 112 28S GOT tOR.Ceomressors 416 135 GOT.oopressors - 60 t*Rock Crushers 58 19 GOT.Oebaekers 2 6 £9R3 t£53i Vibrating Rotters 58 30Stowctearing Eauioment 6 GOT -

*Fuet Tanks 209 GT6 GOTWiiater Tanks 43 106

*Etectric Generators 216 144j Chcin Some - 80

I Frorestr EquIpment -I 3

; .wtching Toots 39 39 £i90! .Chein Stashars 73 1s

I Oisc Harrow 240 89 ..Otisc "arows 2 * GOT.TIne Ptoughs 146 59.10:ovat@rs 10 5 GOT*Oitchers 9 6.TratLens ftLtbed 45 23*nsecttcide Agticater 9 62 -

.Chain aws 81"An .t ticides - n.e. 19B.Saede - n.a. 1930.Lab. lEquipmnt . n.e. GOT

.Nesting lo 134,000 4,703 GOTont Cteny Containers 3,200 3,715

j Rd1le Etuiownt 1,435 2,0n GOt 19e

| rAshe 1'10w1nt n.e. GOT lab0

Souret SAO and OG.

Notis n.s. a qwantity procured not knoua.

nazY

MIRN FORESRY PROJECT

PROJECT COWLETION REFORT

tnflataor Factors, FinanciaL Prices ard Enamnic VaLues of bod

t. IWLATOR FACTORS 1/

Ih lesue Price Irdex Deflator Excheng Ratetigm - imr-- UL~~c to twI

1919 47.9 16.9? 31A.(19110 I1.0 8.12 76.01981 136.7 5.94 111.221902 171.3 4.74 162.551983 223.8 3.63 225.461984 340.2 2.39 366.681985 477.1 1.70 521.981986 601..4 1.31 6?4.5D198W 811.6 1.03 857.21 0

II. FItWEAL PRICES AN EOtOEC VWS OF NlOD

1979 198) 1981 192 1983 1984 1985 1986 1987-FinwiCaL Prices Z/1udatr. RmaXMd1LD 1,911 2,935 5,376 6,755 7,729 10,398 1D,70 V3,468 44,024FWtd CTL/Ster) 96 153 115 328 829 1,195 1,50 2,478 4,340

Ewna,alc VaLuesImtr. IEUMW 31 (11J 3,m1 7,478 11,366 17,213 24,480 41,691 59,299 78,3m 99,412felod 4/ OLStere) 2OR 411 S19 1,05 1,83 2,837 3,625 6,513 9,215

1/ Sam: Inewt* iarl FiwviaL Statistics (W).!i Some: OEM Pretng Dt. Prices for ird. wad pradxts from all project carancivces have been weighted.

i bned an ilport parity wLues of sauM adjusted for differece in qality.Z/ Openmrket price.

I u a K a v

Ith"ENh FOUSTB? fECt

p601KW camlSOo UIP60t

in "Am* &ard Vak. of hgi.ok frts pmjftt khw- 9 w

Sm k*Ai so kta so SAtw SOS ktIM so ktuaL sm Dctut l us kAtmLt so DctLat Sm kbt

Rome" umI E

saji I.6W0 3,31 IA.0 3.4 140 .5~00 W ,3lD 2,72 1.48 2,914 S1990 3.183 6,300 2.4W 6,30D 2,XK 6,10D 2.189

U U U 8 1 1 UQE 5? 10t 44 tUl 89 t1 U 3 5 3

we gm m S I UR 13 318 63 4W 63 21R 73 _ S S_d 53 I W so MD 3sem & AjilUp I'M 2,73 31 2,2 S1 2.430 427 Z3 Ms 2,6W 61 2,8 m 2,8 6 2,8o II"?Slbt M- t2 - 131 - 12 -- 3SS - 48 %1 - *U 41 - m1

t 'aut td t'a 43,S V t,O 4,m IDIOM ts *Dm. s0D

IM tD ) tD,ll I&Off 10,2 n5,m7 t4aD 1314D lSwt % I I t X66t46t W,1t 11,703 91m lOR t,2 la,XO a,"

IItJIllOI tar

botiai ltd #t OM 7.00 4.680 4, *F 2.33 2.33 0 23m 0 2,m3 0 2.33 0 2,3 0 2a,5D 0 4mbtm- ('50 9~4)30 33 411t mmD 7 7UD S2 .5D S1 ?GM 5.30 t, SZ3? 7.D 5,30 7.M S,30 7

t W 0 (243) 2W 4133 SAID 2,S14 1.124 9.A 1t,97t 9,1W 2.33 3.3 2,178 3,53 1,SS0 I,5DI 2,176amlitnd (D stem) 0 2,m 1,w 072,tt 3.4 4.310 520 r,on 5,211 7, .30 53t 53 28 SIM 7Z 5,33 1A?6

VMIE tf UUItlR_U ...... . ... (I iti1 ............ . . .. ........

F*wI wave: b9L Wm 0 GO = t5,0D 2 3 6K23.8 13.515 3.23.5 3W5 WM2 t1, 11. 5 21,194 11,432.1 45,00 11,432.1 MAW 11,432.1 9t 116

.*atqmi 0 266 0.1 1.t 0.1 ?26 02o 2.31 0.2 5 .2 ,74 0.2 02 0.1 1,1' 0.2 7,214Tutal 0 O1.10 3.t43 713 0,23.9 14,241 lk13. 12. 3,5.4 21to7 293 11,4N.3 1326 1.3.3 12,439 11,432.3 33,0t8

Ic "kw*:.*IL mm O 0 (7,30 3,.T (M2 62.0 26.2 9,AL1 263 ,177.1 413 t42 37 99,435 11,3N.2 129,S4 11t,l9.2 122,148 11,.1.2 Zt6.R1*at_md 5 741 u402. 17 04 32 0.4 I'm 06 1W 0.6 t,3 0.6 ,4A2 0.6 G.W 0,.6 15,"4

[1.111 0 (,83 360.9!,W9 62.4 31,80 9 . 33.3 t7.t 1o 2 76 3r.316 11,13. 1N96 11,13. 12t.0 11,-..3 231,70

It sm 4tS in t1977 anstl U.- 11 ttb If & d ad l dtm am in otna IL

.......... X

HSI..............

ifzEfi

a* e _

*6: aD

S-d -- 1

f SSW33 3V - -

Attaie_ft 3- 63- TabL@ i.

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In? ___ ii3g, ~~..

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Ane 1- 65 - Pae 1 of 2

EMBASSY OF THE REPUBLIC OF TURKEYOFFICE OF THE CHIEF COUNSELOR FOR ECONOMIC AND COMMERCIAL AFFAIRS

2523 Massachusetts Avenue, N.W., Washington, D.C. 20008

TELEPHONE

Ref: 2351 9M4sM

904143 TUFN4IR

November 21, 1989

Mr. Graham DonaldsonChief, Division 1OED/IBRDWashington, D.C. 20433

Re: Draft Project Completion Report (Loan No. 1585-TU)

Dear Mr. Donaldson:

Please find enclosed the Turkish and English versions ofcomments by the Ministry of Agriculture, Forestry and RuralAffairs, General Directorate of Forestry (0GM) on the draftcompletion report of Loan No. 1585-TU.

I would appreciate it if these comments are taken intoaccount in the final report.

,_--yfm rs sincerely,

Falih SeleklerEconomic and CommercialCounselor

Encl. 2

Annex 1-66 - Page 2 of 2

COMMENTS OF THE GENERAL DIRECTORATE OF FORESTRY (OGM)ON THE DRAFT COMPLETION REPORT OF NORTHERN FORESTRY PROJECT

As stated in the World Bank report, this project hasconcributed to Turkish forestry, but not as much as expected.

We share the Bank view as to what caused this; i.e. the fearand lack of enthusiasm of Turkish forestry officials towardschange and modernization in forestry; scarcity of qualifiedtechnical people with language skills; lack of coordination andcommunication within the project; late arrival of machinery andequipment and over-optimism during project preparation. Beingthe first serious project in our forestry sector has, in itself,caused some problems. Lack of sufficient data and documents onour forestry resources, and not being able to explain to theWorld Bank what, and to what extent, could be achieved in Turkeywere major deficiencies. If, during project preparation,periodical data forms were standardized and outdated data wereupdated, concrete information to be utilized for the projectduration would have been secured. Training during the firstcouple of years, both on the matters mentioned above and also oncommunication, would have helped in facilitating coordination andinformation exchange.

Notwithstanding these shortcomings of Turkish forestryofficials, the over-optimism and high aspirations of the WorldBank experts were also an important mistake. Moreover, therationale of some of their down to earth targets were debatable,like high production targets and replacing the existing forestsin Northern and Western Anatolia with fast growing type trees.

As indicated in the report, problems in rejuvenation and in-sufficient young tree production, especially in species likebeech trees, would have caused destruction of our forests throughhigh production. Nevertheless, we share the views of the WorldBank that silvicultural activities were not successful.

Targeting to replace leafed forests with fast growing, lowquality species is also debatable. Instead of replacing the rareand valuable oak and beech tree forests in Northern and WesternAnatolia, thought should have been given to improve them. On theother hand, there are dangers in replacing species, such asaltering the natural equilibrium and an increase in harmfulinsects and mushrooms.

All in all, this project has introduced mechanisation andmodern forestry know-how to Turkish forestry. Problems inproduction have been solved through mechanisation and importantimprovements were realized in language skills, education andmodern thought. If the last 3-year-performance were realized inthe first years, the project would have been much more success-ful.

MAP SECTION

g~~~{\ N.:z . ; .4..-.. N/ )\ > _,i9tA....... ......... Er IBRD 13330 RI

50 9 soe~~~~~~~~~~0 35540iULGARIA .rt'_i BlI a - k 5ea 40

Edarne irlrtareti Inebolu Sinop U. S S. R.

.)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Douaaa 4001t

Ma~~~~~Ii~K

U. Bandirma. Anap KrmGai e

-~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~0

r TURKEY

o7 ;i/ r7i1t r r /7n e a n .Sa e K SYRIAN NORTHERN FORESTRY PROJECT 3s-

< C-RU -- ,-0 ARAB PROJECT AREA AND BASMUDURLUK LOCATIONS

ui~~~~~~~ CYPRU I REP OFP

North Turkey projectoese / REP.-APO e c areo boundary -_- 40

o) Sasmuduntuk heodquarters POLAND1>-- Basmudurluk bounoorieso M aMjor forested areas 4s;

A Site ot Balikesir newesprint project i m / >.vao Site ot Akdeniz *Orest utilizotion project j

Main roads' Railways / fa ROMANIA t--.-nnternational boundaries , s 47

__Rivers Go..-> /s eThe Bsmadaduk beandudes of AMAOYA,KASTAMONO end SINOP , amer -uneBULGBULOA.have Seen realianedsinevetis rap ass drawn. ,/ The Wen. ;_L._-n.JS. -_ -,

re Iineaee,e

o too 200 300 ! memo~t t ., rveuav Ankara (N/. O~

K c n a-frT U R K E YQ

/ r e n,, m m_e,,,, ' <. \- -. o Jr REP. OFMILES r r a eSYRIAN NORTHE F O IRAN

t0 Y P5 CRETE U S resae -\REP. 2rNOVEMOERS 9R9