Document of

The World Bank FLE COPYFOR OFFICIAL USE ONLY

Report No. 1905b-IND

INDONESIA

IRRIGATION XI

STAFF APPRAISAL REPORT

Projects DepartmentEast Asia and Pacific Regional Office

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

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CURRENCY EQUIVALENT

US$1.00 = Rupiahs (Rp) 415Rp 100 = US$0.241Rp 1 million = US$2,409.64

WEIGHTS AND MEASURES - METRIC SYSTEM

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

gO'NVERSION FACTORS FOR RICE

1 ton "dry srtalk paddy" = 800 kg paddy ("paddy gabah")= 500 kg milled rice

1 ton paddy (gabah) = 630 kg milled rice

INDONESIA FISCAL YEAR

April 1-March 31

FOR OFFICIAL USE ONLY

ABBREVIATIONS

BIMAS - Bimbingan Massal Swa Sembada Bahan Makanan"Mass Guidance for Self-Sufficiency in Foodstuffs"a farm input-credit package program

BRI - Bank Rakyat Indonesia - People's Bank of IndonesiaBULOG/DOLOG - Badan Urusan Logistik - "National Logistics Body"

- rice procurement agency/Depo Logistik - provincialbranch of BULOG

BUUD - Bahan Usaha Unit Desa - Forerunner of KUD as VillageUnit Cooperative

DGWRD - Director(ate)-General of Water Resources DevelopmentDGC - Directorate-General of CooperativesDIP - Project Implementation BudgetDOR - Directorate of RiversDPMA - Directorate of Hydraulic EngineeringGWh - Gigawatt hour (1 million kilowatt hours)GOI - Government of IndonesiaHYV - High-Yielding VarietyINMAS - Intensifikasi Massal - "Massive Intensification"

- a farm input programINPRES - Instruksi Presiden - "Presidential Instruction"

- a rural public works programIPEDA - Iuran Pembangunan Daerah - Land TaxKUD - Koperasi Unit Desa - Village Unit CooperativeMOA - Ministry of AgricultureMW - Megawatt (1,000 kilowatts)NFCE - National Food Crops Extension ProjectO&M - Operation and maintenancePLN - Perusahaan Umum Listrik Negara - National Power Company

of IndonesiaPROSIDA - Proyek Irigasi IDA - Agency of DGWRD created to execute

IDA-assisted projectsProyek Cimanuk - Badan Pelaksana Proyek Pengembangan Wilayah Sungai

Cimanuk, "Project Executive Body for Cimanuk RiverBasin Development"

Proyek Hidrologi - Badan Pelaksana Proyek Hidrologi dengan bantuan BankDunia, "Project Executive Body for Hydrological Studywith World Bank Assistance"

REC - Rural Extension CenterSEDEKU - Semarang-Demak-Kudus Irrigation System

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

I

INDONESIA: APPRAISAL OF IRRIGATION XI

TABLE OF CONTENTS

Page No.

1. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . .1

General .1... . . . . . . . . . . . . . . . . . . . . .The Agricultural and Rural Sector. . . . . . . . . . . . . 1Development Strategies ................ . . 2The Irrigation Subsector . . . . . . . . . . . . . . . . . 4Project Formulation. 5

2. THE PROJECT AREAS. 7

Location . . . . . . . . . . . . . . . . . . . . . . . . . 7Climate 7

soils. 8Population, Farm Size and Land Tenure . . . . . . . . . . 8Agricultural Support Program . . . . . . . . . . . . . . . 9Existing Works and Infrastructure . . . . . . . . . . . . 10

3. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . 11

The Project Works .12Water Supply, Demand and Quality . . . . . . . . . . . . . 14Status of Engineering .15Implementation Schedules . . . . . . . . . . . . . . . . . 15Cost Estimates .16Financing . . . . . . . . . . . . . . . . . . . . . . . . 16Procurement .17Disbursements .18Accounts and Audits . . . . . . . . . . . . . . . . . . . 18Environmental Effects .18

4. ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . 21

Project Management .21Consultants, Advisors and Training . . . . . . . . . . . . 22Agricultural Support Services . . . . . . . . . . . . . . 24Operation and Maintenance . . . . . . . . . . . . . . . . 25Monitoring . . . . . . . . . . . . . . . . . . . . . . . . 26

5. AGRICULTURAL PRODUCTION .27

Present Cropping Patterns .27Future Cropping Patterns .28Future Yields with Project .29Cropping Calendars .29Drying, Storage and Processing . . . . . . . . . . . . . . 30

This Report is based upon findings of an appraisal mission composed ofMessrs. J.J. O'Brien, M. Saddington, W.P. Ting, N.D. Owens (Bank), L. Bartsch,M. Fireman, and E.B. Lipcomb (Consultants), which visited Indonesia inOctober 1977.

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Page No.

6. MARKET PROSPECTS, PRICES, FARM INCOMES AND PROJECT CHARGES. . 32

Market Prospects . . . . . . . . . . . . . .. . . . . . . 32Prices .... . . . . . . . . . . . . . . . . . . . . . . 33Farm Incomes . . . . . . . . . . . . . . . . . .. . .. . 33Project Charges . . .. . . . . . . .. . . . . 35

7. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . . 42

8. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . . 50

List of Tables in Main Report

3.1 Cipamingkis Subproject Water Balance . . . . . . . . . . . . 193.2 Summary Cost Estimate ... . . . ..... . . o . . . . . . 204.1 Consulting Services and Training . . . . . . . . . . . . . . 235.1 Cropping Patterns and Production . . . . . . . . . . . . . . 316.1 Price Structure for Food Crops and Fertilizers . . . . . . . 386.2 Input and Output Price Summary . . . . . . . . . . . . . . . 396.3 Summary of Farm Budgets . . . . . . . . . . . . . . . . . . . 406.4 Rent Recovery .... . . . . . . . . . . . .... . . . . . . 417.1 Economic Analysis - Net Value of Production at Full Project

Development . . . . . . . . . . . . . . . . . . . . . . . . 477.2 Total Monthly Crop Labor Requirements . . . . . . . . . . . . 487.3 Economic Costs and Benefits . . . . . . . . . . . . . . . . . 49

ANNEXES

1. Cost Estimates, Expenditures, Disbursements and Allocationof Loan Proceeds

2. Crop and Farm Budgets3. Schedule of Early Events4. Related Documents and Data Available in Project Files

List of Figures

3.1 Implementation Schedule4.1 Organization Chart - Director General Water Resources

Development4.2 Organization Chart - PROSIDA4.3 Organization Chart - DPMA4.4 Organization Chart - DOR4.5 Organization Chart - Jatiluhur Authority5.1 Cipamingkis Subproject - Proposed Cropping Calendar5.2 Jragung Subproject - Proposed Cropping Calendar

List of Maps

IBRD 13142 Irrigation Project XIIBRD 13144 Cipamingkis SubprojectIBRD 13531 Jragung Dam Subproject

INDONESIA

IRRIGATION XI

1. BACKGROUND

General

1.01 The Government of Indonesia (GOI) has requested Bank assistance forthe construction of a weir and irrigation system for the 7,600 ha Cipamingkisarea of West Java; the construction of the access road, diversion tunnel andbase camp as the first stage of the Jragung Dam project in Central Java; theinitiation of a water resource development oriented hydrologic measurementprogram throughout Indonesia; preparation of a master plan for the conserva-tion and development of the water and land resources of the Cimanuk RiverBasin in West Java; and the review and conduct of studies for irrigationdevelopment and review and completion of designs for flood control in thelower Cimanuk, Cipanas and Ciwaringin rivers.

1.02 The feasibiity studies for the Cipamingkis subproject was initiallyprepared with local consultant assistance (P.T. Indah Karya) and updated bythe Jatiluhur Authority; for the Jragung Dam subproject, feasibility studieswere prepared under PROSIDA with consultant assistance (ECI) from USAID.The Hydrologic Measurement Program was prepared by the Directorate of HydraulicEngineering (DPMA) and the Cimanuk River Water Management Program by theDirectorate of Rivers, with consultant assistance from Gadja Mada University.

The Agricultural and Rural Sector

1.03 Major Issues. The major issues facing the agricultural and ruralsector in Indonesia are: the need to create productive employment oppor-tunities to raise the incomes of the rural poor; the need to increase domesticfood supply to keep pace with rising demand; the need to expand productionof agricultural exports, particularly smallholder tree crops; and the needto ensure productive, sustainable use of Indonesia's varied land, water andother natural resources. These issues are all interrelated. Their solutionwill necessarily involve complex and sometimes novel technical and organiza-tional approaches, along with attendant risks that must be recognized andaccepted if programs are to be developed to deal with Indonesia's problems onthe requisite scale. The risks of action must be weighed against the risksof inaction in the face of widespread poverty and underemployment, growingfood import requirements, and ecological damage caused by insufficientcontrol of deforestation in the most densely populated areas.

1.04 Role and Performance of the Sector. Although the contribution ofagriculture to GDP and exports has declined during the last 15 years, therural sector continues to be of overwhelming importance to the vast majorityof the Indonesian people in terms of employment, incomes and food production.Some 80% of the country's 135.5 million people /1 live in rural areas. Withthe exception of oil palm and tea, agriculture is dominated by smallholder

/1 Estimate for mid-1978 based on Inter-Censal Population Survey of March 1976.

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production; there are some 14.4 million smallholders producing subsistenceand cash crops on 14.2 million ha and 1,800 large estates occupying 2.2million ha. Over the five years to 1976, the growth rate of agriculturalproduction has been uneven, averaging 3.8% while total GDP grew at 7.9%. In1977, agricultural performance was disappointing. For the second straightyear, rice production was plagued by inadequate or untimely rainfall in manyparts of Java, and by pest and disease damage to high yielding varieties.In view of the critical role of agriculture as the primary source of house-hold income for over half of all Indonesians, the slowdown in agriculturalgrowth takes on considerable social significance.

1.05 Development Problems and Potentials. In Java, the cultivable landis almost fully utilized and in some areas, agricultural land use alreadyexceeds ecologically safe limits. In 1976 about 82 million people lived inJava which has 45% of the cropped area but only 7% of the country's totalland area. About one-third of Java's rural population is landless and alarge proportion cannot support themselves on incomes from their own farms.Outside Java there are large areas of unused cultivable land, although lessfertile than in Java, and other natural resources to be exploited. While theinhabitants of these islands do not have high standards of living, they aregenerally better off than many in Java.

Development Strategies

1.06 Employment. Perhaps the single most important challenge facing theIndonesian Government is to guide and structure the development process insuch a way that the creation of new opportunities for gainful employment doesat least keep pace with the growth of the labor force. The changes associatedwith modernization in rural Java are generally labor-saving, so that farmingis increasingly becoming a part-time activity. Modern manufacturing andservices have been unable to absorb the incremental labor force. Successfullocally administered public rural works programs (INPRES), may be difficultto expand due to limited budget and implementation capacity. Future employ-ment strategy will therefore stress labor-intensive export industriesand small-scale rural enterprises producing for the domestic market. Theremay also be potential for more productive agricultural employment throughincreased cropping intensity and a shift to higher value crops and livestock,including fruits and vegetables grown on house compounds.

1.07 Food Crops. Despite the heavy emphasis on rice productionin the past, recent developments suggest a widening gap between domesticproduction and demand for food. The rate of growth of rice productionappears to have declined in recent years and the principal non-rice foodcrqps have stagnated. There is no room for relaxing the national riceproduction effort. To keep rice imports below some reasonable fraction ofworld trade in rice, demand must be shifted to other domestic and importedstaples and production must grow at around 4% per year. Improved watermanagement and agricultural supporting services are essential for increasing

rice yields and production. On Java there remains much scope for more

efficient water use, through construction of additional tertiary and quater-

nary canals. On-the other islands there is potential for new irrigation

systems including tidal and swamp land development. Efforts to increase rice

production must include an intensified research and extension effort to solve

the pest and disease problem. Upland food crops also offer promising develop-

ment prospects. There is much room for yield improvement through intensified

research and supporting services, and tremendous scope for area expansion in

the other islands if stable, long-term cropping systems can be developed. In

addition, a food policy which emphasizes upland crop production as well as

rice would serve the twin goals of growth and equity better than a policy

aimed exclusively at rice, as many of the poorest parts of Java and the other

islands are best suited to dry land farming.

1.08 Transmigration. Transmigration offers challenging opportunities

for improving social equity and the economic use of Indonesia's two main

underemployed resources: Javanese labor and land in the other islands.

Transmigration has long been hampered by unrealistic expectations about its

potential contribution to regional development and the solution of Java's

population problems, overambitious targets and weak, uncoordinated implemen-

tation. These problems are now being addressed. The present focus is on the

organizational aspects of transmigration and the design of a least cost

package of services needed to ensure successful, long-term settlement.

1.09 Tree Crops. The Government has embarked on a major effort to

develop smallholder tree crops outside Java as part of its transmigration

and national rubber and coconut replanting programs. The objective is to

improve production on existing blocks while developing large areas of new

land for settlement. One of the Government's main approaches has been to use

public estate companies to plant tree crops on land to be settled by local

landless families and transmigrants. The estate companies provide a range of

services including planting material, land clearing and planting, inputs,

processing and marketing facilities for the smallholders. This approach is

well taken in view of Indonesia's scarce managerial and technical capabilities.

1.10 The Role of the Government. The capacity of the Indonesian

Government to plan and implement agricultural and rural development programs

has generally improved over the past decade. However, future programs

responsive to the Government's stated objectives will necessarily be more

complex than those which the Government has followed up to now. They will

require closely coordinated "packages" of research, extension, inputs,

credit, land development, transportation and marketing improvements. Multi-

agency integrated area development programs in Java and land settlement

schemes in the other islands will require stronger field organizations of

Government line agencies and local governmental authorities, as well as new

administrative arrangements. With the more complex organizational require-

ments of future programs, implementation capacity is likely to become the

limiting factor in Indonesia's economic and social development. It is

therefore of utmost importance that the Government continue its efforts to

strengthen the key rural development institutions.

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1.11 Bank Lending Strategy. There is general agreement between theBank and the Government on the overall objectives and strategies proposedfor the rural sector. While views sometimes differ on the relative emphasisto be given to different investments and on the technical design of someprojects, such differences are not profound and are likely to be resolvedwith further analysis and dialogue.

1.12 The Bank has been and should continue to be involved in a broadrange of agricultural and rural activities in Indonesia. Since the firstirrigation credit in 1968 the Bank has rapidly expanded its agriculturaland rural lending to include support for estate and smallholder tree crops,fertilizer production and distribution, sugar estates, support services,transmigration, livestock and fisheries. An integrated rural developmentproject is currently being appraised. Of the three credits closed withinthe last year (Estates I, Irrigation I and Pusri Fertilizer), all showedexcellent rates of return ranging from 25% to 33%. Taking 1974 as base year,Bank financed projects will contribute almost 60% of the increase in palm oiloutput by 1980, about 16% of incremental sugar production and 6% of incremen-tal rice and rubber. Four continuing trends in Bank agricultural lending toIndonesia are: (a) a shift from rehabilitation to new development activities;(b) a shift from support of state enterprises to direct support of small-holders; (c) an increased emphasis on rainfed systems; and (d) greateremphasis on development of the other islands. All these trends are consis-tent with the Government's changing policies.

The Irrigation Subsector

1.13 Rice is the dominant irrigated crop in Indonesia. Of an estimated8.4 million ha of rice harvested in 1976, 7.2 million ha were irrigated orgrown under wet land conditions. Irrigation systems cover about 5 millionha, of which Java accounts for 60%. Average paddy yields on Java areabout 3.3 ton/ha compared with 2.8 ton/ha in the other islands. Althoughirrigation has long been a major feature of Indonesian agriculture, by thelate 1960s, the systems built during the colonial period were in a stateof complete disrepair. Irrigation development during the first two develop-ment plan periods concentrated heavily on the rehabilitation of thesesystems. Construction of new systems, mainly to serve as the basis fortransmigration projects outside Java, lagged behind.

1.14 With the rehabilitation of most existing irrigation systemseither completed or under way, future irrigation development in Indonesiawill shift to the construction of new gravity systems and swamp and tidalland development outside Java. This shift does not mean, however, thatirrigation development on Java should stop. Many of the existing systemsstill need to be fully rehabilitated or upgraded at relatively low cost,and the limited potential for large storage and groundwater should bedeveloped to expand dry season cropping as far as economically feasible.A recent Bank review of Indonesia's irrigation program concluded that toexpand rice production along with demand at 4% per year, the level ofinvestment in irrigation should be increased by about 20%. This in turn

would require strengthening of the Directorate General of Water ResourcesDevelopment (DGWRD), training and staff development, and an expansion ofagricultural supporting services. The proposed project fits in well withthese conclusions.

Project Formulation

1.15 Cipamingkis and Jragung are unrelated projects on the island ofJava. While project works at Cipamingkis are for a single purpose, irriga-tion, those at Jragung are multipurpose and include irrigation, flood con-trol, municipal and industrial water supply, and hydroelectric power genera-tion. The construction of the works proposed under these two components hasbeen combined with the hydrologic and water management programs to provide anappropriately sized loan package adaptable to normal supervision.

1.16 The proposed irrigation works at Cipamingkis and Jragung are aslight departure from the type of projects that GOI has undertaken with Bankassistance under the previous credits and loans. Irrigation Projects Ithrough IX had as a major thrust, the rehabilitation of existing irrigationsystems that had become severely deteriorated due to the lack of maintenanceover a period of about 30 years following the advent of World War II.Cipamingkis would provide a new irrigation system in a predominantly rain-fed area; while Jragung by supplying dry-season water, would intensifyirrigated cropping in a presently irrigated area. The last major irrigationsystem in Java needing improvement is being assisted under Irrigation VIII(Loan 1434-IND). Construction of new systems and intensification of existingsystems is the next logical step to increase irrigated agricultural produc-tivity on Java, the most densely populated and developed area of theIndonesian archipelago. The proposed works support GOI's policy of improv-ing, extending, and intensifying agricultural production, and helping to meeta serious deficit in Indonesian foodgrain supply.

1.17 The Cipamingkis project would supply run-of-river irrigation waterto a group of farmers near the Jatiluhur Irrigation Area (assisted by theBank under Credits 195-IND and 514-IND). However, the proposed water supplyfor the Cipamingkis area is completely independent of those water sourceswhich serve the Jatiluhur area.

1.18 Jragung Dam was identified in a major river basin study /1 GOI con-ducted to plan flood control and drainage works in the East Semarang area.The resulting master plan proposed several integrated works, including damsand reservoirs, drainage, flood channels and irrigation rehabilitation. Theproposed Jragung Dam, and the ongoing SEDEKU drainage and irrigation works(Bank-assisted under Loan 1435-IND), are part of the proposed works. To

/1 The Jratunseluna River Basin, which is a group of five river basins,namely, Jragung, Tuntang, Serang, Lusi and Juana, studies for whichwere undertaken from 1970 to 1974 with consultant assistance (NEDECO)financed under bilateral aid from the Netherlands.

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fully utilize the potential of the Jragung site, in addition to flood con-trol, the proposed works would provide irrigation and municipal water sup-plies and hydroelectric power generation. Subsequently GOI, with consultant

assistance (ECI) financed by United States bilateral assistance updated theNEDECO feasibility studies and undertook detailed design of the dam.

1.19 Besides providing flood control for 1,800 ha alongside the JragungRiver's banks downstream of the proposed dam, the dam would also assist in theflood protection of the 30,000 ha SEDEKU area. The SEDEKU project works weredesigned assuming the construction of the Jragung Dam. Until the dam is

constructed, the Jragung River 50-year flood would exceed the SEDEKU designflood by about 30%. Such a flood may breach or overtop some portions of theJragung embankments designed to protect the SEDEKU area. Agricultural benefitsfrom the dam would be limited to the 7,600 Jragung irrigation area, the1,800 ha lying alongside the river and to the 1,100 ha near the coast thatwould benefit from return flows in the dry season.

1.20 GOI, with consultant assistance (Burns and McDonnell - TransAsia Engineering Associates), has recently identified three alternativesources of municipal and industrial water supply for the city of Semarang,the Central Java provincial capital. These are Muncul Springs, JragungReservoir, and Penggaron Reservoir. Groundwater sources south of Semarangalso appear promising, though probably in limited quantities. While, interms of capital investment, Muncul Springs would be the least cost alter-native, the water from this source is already being used for irrigation andhydroelectric generation and only a limited quantity is available formunicipal use. Development of groundwater is being studied with ADBassistance. Of the two reservoirs, GOI has chosen Jragung as the moreeconomic, to supply some 63 MCM of water/year for Semarang. GOI considersthis supply, in addition to the Muncul and groundwater sources also beingdeveloped, would meet Semerang's demand for water up to around 1990.

1.21 As presently formulated, the proposed works include a six megawatt(MW) capacity hydroelectric powerplant, which would produce 30 gigawatt hours(GWh) of energy annually; and a 17 km transmission line to tie the powerproduced into the main Central Java grid. The powerplant would be operatedincidental to the other project functions, and no releases of water areproposed solely for power generation. However, the economic viability of thepowerplant has yet to be fully established, and its inclusion in projectworks would be reviewed during detailed design.

1.22 Detailed design of the dam itself will not be completed until March1979. The appraisal revealed that while sufficient investigations have beencarried out to establish the technical soundness and economic viability ofthe dam, the remaining work would result in a more reliable cost estimate. Pro-ceeding with the initial stages as proposed in this project would not impacton remaining studies, but would advance the time when project benefits can be

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achieved. It was therefore decided to proceed on a "time-slice" basis under

which the entire project would be appraised at this time, but financing underthe loan would be provided only for the construction of the access road, basecamp and diversion tunnel. Assurances have been obtained from GOI, that itwould proceed with the construction of the dam and its appurtenant facilitiesin accordance with a time schedule to be agreed between the borrower and theBank. These latter works would be considered for financing under future Bankloans.

2. THE PROJECT AREAS

Location

2.01 The Cipamingkis subproject area lies about 30 km southeast of

Jakarta in the uplands above the main Jatiluhur project area in West Java.It is an essentially rural agricultural area lying about 10 km off the mainJakarta-Bogor-Bandung Highway. The Jragung Dam is located on the JragungRiver about 20 km southeast of Semarang. The Jragung River drains a part ofthe northeastern slopes of the extinct volcano Gunung Ungaran (peak elevation2,050 m). Its headwater is at elevation 1,250 m on the side of the volcanoand the river profile drops rapidly to the coastal plain, at slopes of up to200 m/km. Only one small village of about 400 population is located in thereservoir area. There are two very small hamlets below the damsite whichwould be affected by the spillway. It is proposed that these communities belocated to higher ground as a part of dam construction. There would be norelocations as a consequence of the initial stage work included in thisproject. The irrigation service area lies in the northwestern part of thebasin, between the Tuntang River to the east and the Dolok River to the west.The proposed project area of some 7,600 ha would be directly irrigated, whileabout 1,100 ha farther downstream would benefit from return flows during thedry season. The Directorate of Irrigation using local funds, or PROSIDAunder Loan 1435-IND, have either recently rehabilitated or are currentlyrehabilitating the irrigation systems that would be provided water supplyfrom the project. The Cimanuk River has its origin at Mount Puncak Gede atan elevation of over 2,000 m. Initially, it traverses the mountainous regioneast of Bandung, debouches onto the coastal plain below the proposed JatigedeDam and flows northward into the Java sea below the town of Indramayu. Itstotal length is about 180 km. Total drainage area is about 3,600 sq km.

Climate

2.02 There is little variation in the tropical, monsoonal climate ofJava, with temperatures varying only a few degrees around the annual average

of 26 0C. Mean annual precipitation ranges from 1,500 to 3,000 mm except inthe highest areas, where it often approaches 5,000 mm. Seasonal weatherpatterns prevail with the wet season (northwest monsoon) extending fromNovember to May and the dry season (southeast monsoon) from June throughOctober.

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2.03 In the Cipamingkis subproject area, mean annual temperature is

25.40 C. Mean annual precipitation for the area is about 4,700 mm upstream ofthe Cipamingkis river and about 2,600 mm in the downstream area. Mean annualrelative humidity is 82%, percentage of possible sunshine about 74%, and windvelocity slightly under 4 km/hr. Dry season rainfall is slightly higher thanon the north coast plains, averaging from about 120 to 230 mm/month. Ricecannot be grown during the dry season without supplemental irrigation andsecondary crops frequently suffer severe moisture stresss. Although there isonly minor variation in day lengths throughout the year, photosensitive ricevarieties have different growth durations during the wet and dry seasons.

2.04 In the Jragung subproject area mean annual temperature is about

260 C, with only minor variations from month to month. Precipitation over thedrainage area above the damsite averages about 2,700 mm annually. Relativehumidity ranges from 45 to 100% on a daily basis, with a monthly average of85% in the wet season and about 75% in the dry season.

Soils

2.05 Although very little definitive information on soils is availablefor the Cipamingkis subproject area, a Bank soils expert reviewed the data,conducted a field inspection of the project area, and found the soils idealfor sustained irrigated rice cultivation. The soils are alluvium of volcanicorigin having very fine clayey to fine silty texture in the surface horizonand low percolation rates. The subsurface horizon is comprised of very fineto fine clayey texture. Water holding capacity of the surface horizon rangesfrom about 25% to 50% with a moderate to high acidity.

2.06 Soil surveys of the proposed Jragung Dam irrigation service areawere conducted by the Agricultural Institute in Bogor (IPB). The soilsare heavy textured gray or brownish gray. They have low permeability andgenerally poor nutrient status which will require supplementary nitrogen andphosphorus to obtain high yields. The soils are considered to be good ricesoils.

Population, Farm Size and Land Tenure

2.07 The Cipamingkis project area has an estimated rural population of103,000 made up of about 16,000 farm and 2,800 landless laborers families.At Jragung, flood control and irrigation works would benefit about 158,400people, consisting of some 20,200 farm and 8,600 landless laborers families.The following table shows population statistics and average farm size foreach project area.

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Flood pro- Average No. of No. of Average

tection Irrigated Total rural family farm landless farm

Subproject area area population size families families size

(ha) (ha) (ha)

Cipamingkis - 7,600 103,000 5.5 16,000 2,800 0.5

Jragung 1,800 8,700 158,400 5.5 20,200 8,600 0.5

2.08 Farm size and land tenure data are sketchy. Information from local

officials suggest an average farm size of 0.5 ha in both project areas. The

following is a rough estimate of farm size distribution.

Farm size No. of farms Cultivated area

(ha) …----------- - M(%) …---------

CipamingkisLess than 0.5 59 29

0.5-1.0 32 43

1.0-2.0 6 19

More than 2.0 2 9

JragungLess than 0.5 58 300.5-1.0 28 34

1.0-2.0 13 31

More than 2.0 1 5

2.09 At Cipamingkis, some 77% of farmers are owner-operators, and 23%

sharecroppers, while at Jragung some 60% are owner-operators and 40% are

sharecroppers. In most sharecropping arrangments, the tenant and landowner

equally share total production, and input and harvesting costs, the tenant

and his family provide their labor, and the landowner pays the land tax.

Landless laborers comprise some 15% of the rural population at Cipamingkis,

and 30% at Jragung.

Agricultural Support Program

2.10 The BIMAS program provides farmers with subsidized credit, ferti-

lizer, agrochemicals; allowances for HYV seed, spraying and cost of living;

and extension advice for crop production. Under the BIMAS program the Bank

Rakyat Indonesia (BRI) is the main source of production credit. For irri-

gated rice production, a farmer can obtain up to Rp 37,000/ha to cover seed,

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fertilizer, insecticide, rodenticide, spraying, and cost of living expenses.The loan is for seven months at 1%/month interest rate. To be eligiblefor the loan, a farmer must demonstrate a reliable cropping history andnot be more than two years overdue with his earlier BIMAS repayments. AtCipamingkis, the BIMAS program covers some 50% of the wet-season paddy crop,and 30% of the irrigated dry-season crop. At Jragung it covers 15% of thewet-season paddy area, but does not operate in the dry-season.

2.11 The National Seed Corporation at Sukamandi (Credit 246-IND) pro-duces limited supplies of certified paddy seed. This is distributed throughBUUD/KUDs at Rp 150/kg. This seed would be available at both Cipamingkis andJragung. In both subproject areas, seed growers who obtain their plantingmaterial from district seed farms of the provincial agricultural services,supply most or all available certified seed. The Directorate-General ofCooperatives (DGC) operates two BUUDs at Cipamingkis and four at Jragung.BUUDs are precooperatives which convert to farm cooperatives, or KUDs, when

proven viable. The cooperatives distribute fertilizer and agrochemicals, andprovide such processing services as paddy drying and cleaning, in addition tostorage. At each BUUD/KUD, the BRI establishes an office to handle BIMAS loanapplications and repayments.

2.12 In both project areas, staff of the Directorate of Food CropsAgriculture within the Ministry of Agriculture (MOA) provide extension ser-vices to farmers. Due to shortages of staff, the extension services arecurrently providing advice largely to farmers participating in the BIMASprogram. The National Food Crops Extension Project (NFCE) (Loan 1267-IND) iscorrecting this deficiency. Presently extension services at Cipamingkisconsist of one new rural extension center (REC), one middle-level extensionworker (PPM), and seven field extension workers (PPLs). Jragung project areahas only minimal services with some three PPLs stationed there.

Existing Works and Infrastructure

2.13 Cipamingkis. A semipermanent weir on the Cipamingkis River wasconstructed during the colonial period and rehabilitated by GOI in 1974. Itserves as a headworks for the 500 ha existing semitechnical /1 irrigationsystem in the subproject area. The remaining area is rainfed or floodedfrom primitive village systems. The engineering and economic potential forincorporating the existing weir into the subproject scheme would be exploredin the course of detailed design prior to construction.

2.14 Interior roads in the Cipamingkis area are neither extensive, of ahigh standard, nor well maintained. Many are passable to motorized vehicles

only during the dry season. The poor condition of the roads adverselyaffects the ability to distribute agricultural inputs in a timely fashionas well as the marketing of agricultural production.

/1 Semitechnical irrigation refers to partially developed and controlledsystems.

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2.15 Jragung. Water supplies are diverted from the Jragung River atJragung weir for some 2,000 ha and from the Tuntang River at Glapan weir

for 1,200 ha in the subproject area. During the wet season the remaining4,400 ha grow rainfed crops, however no dry season irrigation supplies areavailable from either weir. With construction of Jragung Dam, water divertedat Jragung weir would irrigate 6,400 ha in the wet season and Glapan weirwould continue to irrigate 1,200 ha. However, during the dry season, Jragungweir would supply water to both the 6,400 ha and 1,200 ha areas. The exist-ing irrigation infrastructure was constructed some 50 or more years ago.Glapan weir and the western main Glapan canal, were rehabilitated underCredit 127-IND. Silting and slides have reduced the capacity of the Jragungmain canal, and secondary and tertiary canals throughout the service areaare in poor repair and inadequate for intensive cropping. However, underLoan 1435-IND and locally funded works, money has already been allocatedfor the rehabilitation of the 3,200 ha service area and the construction of

4,400 ha of new service area. These works would be completed in time to usewater from the proposed Jragung Dam.

3. THE PROJECT

3.01 The proposed project would include:

(a) construction of a weir, headworks and primary canal, improvement,enlargement and extension of secondary canals and construction oftertiary canals to serve about 7,600 ha in the Cipamingkis area ofWest Java (Map 13144);

(b) construction of an access road, base camp and diversion tunnel asthe first stage of construction of Jragung Dam in Central Java(Map 13531);

(c) construction of measurement stations and provision of consultingservices to improve and accelerate the existing hydrologic programin support of the planning, design and operation of water resourceprojects throughout Indonesia; and

(d) provision of consulting services to prepare a master plan anddetailed designs for the conservation and development of thewater resources of the Cimanuk River Basin, West Java (Map 13142).

The project would also include consulting services for design of theCipamingkis system and supervision of construction for the Cipamingkis andJragung subprojects; construction of a telecommunications system, offices andhousing at Cipamingkis; procurement of essential vehicles and equipment andtraining of project staff, especially for the Cipamingkis subproject and theHydrologic Measurement Program.

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The Project Works

3.02 The project works for each of the subprojects can be summarized as

follows:

3.03 Cipamingkis. The proposed works include construction of a gated

concrete overflow weir with a hydraulic height of 2 m and crest length

of 48 m flanked by earthen embankment dams. Weir facilities would include

gated headworks to serve the two main canals to be constructed on the left

and the right banks. About 4.5 km of access road to the weir site would be

constructed.

3.04 The irrigation system would involve construction of the unlined

main canals with a total length of about 19 km; about 44 km of secondary

canals; and about 215 km of tertiary canals serving about 50 blocks of land

averaging about 150 ha each and totaling 7,600 ha. About 230 structures

consisting of checks, drops, culverts, diversions and bridges would be con-

structed as part of the irrigation system.

3.05 Because of the undulating character of the project area, significant

drainage problems are not anticipated. However, the project would provide

drainage for about 2,300 ha where natural drainage cannot accommodate the

additional requirements from fully irrigated agriculture.

3.06 Jragung Dam. This subproject includes extension and improvement of

an existing highway to serve as the main access road to the damsite; construc-

tion of a 4.0 m inside diameter tunnel 400 m long and a connecting 400 m open

channel to provide for diversion of the Jragung River during construction of

the dam proper; and the construction of the base camp required for subsequent

dam construction.

3.07 Road improvement and construction would require about 130,000 cu m

of excavation and backfill, 200,000 cu m of macadam, 1,200 cu m of concreteand masonry for structures and drainage and acquisition of about 12 ha of

land.

3.08 The base camp would include a motor pool compound, camp and staff

housing and offices, mess halls and a generator housing building. About

26 ha of land would have to be acquired.

3.09 Hydrologic Measurement Program. The Hydrologic Measurement Program

is designed to overcome a significant deficiency in historic planning, design

and operation of water resource developments in Indonesia due to a lack of

reliable streamflow data. The program is directed to the collection of such

data for utilization in near- and mid-term planning and designs for identi-

fied high priority potential developments. It would supplement a UNDP tech-

nical assistance project directed to institutional development and implemen-

tation of a national hydrologic network.

3.10 The work involved in this program includes the construction and

equipping of 120 stream flow measuring stations, 20 climatological stations,

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and 40 rainfall stations. In addition, equipment would be provided to record

water level fluctuations in about 20 observation wells and for about 18 crews

to service, maintain and obtain records at the above-mentioned measurement

network scattered throughout Indonesia.

3.11 Automatic data processing (ADP) and printing equipment will be

furnished for the central office of the Directorate of Hydraulic Engineering

(DPMA) in Bandung for the processing, compilation, analysis and publication

of the data obtained through this and similar programs under DPMA.

3.12 Technical assistance in the fields of hydrometeorology, hydrology,

sedimentation and ADP equipment utilization and operation would be provided

to assure effective implementation of the program.

3.13 The number, type and location of hydrologic and climatologic

measurement stations included in the program were determined from the coordi-

nated needs of the individual agencies under the DGW7RD. The ADP and printing

equipment are supplemental to existing equipment and represent requirements

to eliminate a backlog of from 5 to 7 years in the compilation and publication

of hydrologic data.

3.14 Cimanuk River Water Management Program. The Cimanuk River Water

Management Program would be the first involvement by the Bank Group in

Indonesia for the development of a master plan for the management of the land

and water resources of an entire river basin. It would involve the review,

analysis and coordination of all existing and largely unintegrated plans for

water and land resource development in the basin and evolve an integrated and

coordinated plan for the utilization, conservation and management of those

resources.

3.15 A number of studies, ranging from reconnaissance through detailed

design have been completed or are under way, covering specific potential

water and land resource development. Principal among these is the Jatigede

Dam, which would be a major multipurpose facility on the Cimanuk River, and

is currently in the detailed design stage through Australian bilateral

assistance.

3.16 A large number of additional studies for small developments in

the basin have also been prepared by the DOI and Provincial Public Works,

and a plan for management of the upper watershed has been proposed by

the Directorate of Forestry and Land Rehabilitation in the Ministry of

Agriculture. All of these plans, investigations and studies would be re-

evaluated and blended into an integrated program for development under the

Master Plan to evolve from this project.

3.17 The New Rentang Barrage on the Cimanuk River is being assisted

uner Irrigation VI (Loan 1100-IND) and the contract for construction of

the barrage is scheduled for award in May 1978. A plan for flood protection

on the lower Cimanuk River below New Rentang Barrage has been completed, but

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designs require additional review before a final implementation plan can be

adopted. In addition, plans for flood control on the Cipanas and Ciwaringin

rivers adjacent to the lower Cimanuk River have also been completed but

designs need to be reviewed.

3.18 Deferral of the power function from the proposed Jatigede Dam on

the upper Cimanuk River will permit that facility to serve an additional irri-

gation area of about 20,000 ha, and reconnaissance studies of a plan for that

purpose will be undertaken.

3.19 The project includes technical assistance to develop the master

plan, for the review and completion of designs for flood control for the

lower Cimanuk, Cipanas and Ciwaringin rivers and for the irrigation recon-

naissance and feasibility study of the 20,000 ha area. However, assurances

have been received from GOI that completion of the flood control designs and

initiation of the feasibility study would be contingent upon Bank approval,

following completion of the review and reconnaissance activities respectively.

Water Supply, Demand and Quality

3.20 Cipamingkis. The subproject area will be supplied by direct diver-

sion from the Cipamingkis River. As river runoff records at the diversion

site are available for only a short period of time, the flows in the river

have been determined by correlation with data from the adjacent Ciliwung

River. Reliable precipitation and discharge records for this river estab-

lished runoff coefficients for the region which, together with recent limited

data for discharge and precipitation for the Cipamingkis basin, established

estimated average monthly flows at the diversion site. Approximately

49 years of record were utilized to establish the average monthly flows.

In computing water availability, average monthly flows with 80% reliability

have been used.

3.21 The consumptive crop-water requirements for the proposed cropping

pattern were determined by using the Hargreaves method which has been espe-

cially adapted for use in Indonesia and adopted by the DGWRD for general use.

The projected cropping calendar is shown in Figure 5.1. The effective

rainfall has been established as the 80% probability of monthly precipitation

at Cibarusa which is centrally located in the project area. An overall

efficiency of 60% in water use has been assumed. The water balance compu-

tation is presented in Table 3.1. Adequate water supplies are available in

all months except September. However, deficiencies in that month are only 8%

of the total water requirement. Planting of rice and other crops will be

staggered to accomodate to the available water supply. During the dry season

the paddy area will be limited to about 2,000 ha. Secondary (palawija) crops

with low water requirements, short growing season and for which a ready

market exists in Jakarta have a good potential as substitute crops for

rice.

3.22 Because the project would not include storage, there will of course

be years with more severe shortages than shown in Table 3.1. However, in

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4 out of 5 years, the water supply will be greater. Under the assumed

cropping pattern, the maximum diversion requirement would occur in December

when approximately 2.2 cu m/sec would have to be diverted from the available

supply of about 5.4.

3.23 Jragung Dam. Water supply for this subproject would come from

three sources: the Jragung River, transbasin diversion of up to 6.5 cu m/sec

of surplus flow from the Tuntang River to Jragung Reservoir, and diversion of

additional irrigation water in the wet season to the Jragung irrigation area

through the Glapan weir. Diversion from the Tuntang River would be through a

one kilometer concrete lited tunnel.

3.24 In addition to providing a full dry-season irrigation supply for

8,700 ha, the total project would also include the provision of 63 MCM of

water annually to supplement the existing municipal water supply for Semarang.

3.25 Both the Jragung and the Cipamingkis rivers at the respective

points of diversion have water of excellent quality for irrigation. For

municipal and domestic purposes, the water from Jragung Dam would require

only some continuous chemical treatment such as clorination and filtration to

remove suspended sediments during flood periods.

Status of Engineering

3.26 Cipamingkis. Aerial surveys and topographic mapping of the area is

currently underway and is scheduled for completion in 1978 with assistance

provided under Loan 1268-IND. Detailed design of the Cipamingkis weir, and

the primary and secondary canal system has been essentially completed by the

Planning and Design Staff of the Authority. Field surveys have been com-

pleted and were utilized for site specific design and quantity estimates.

Foundation drilling and material investigations at the weir have also been

concluded. Design of the tertiary system would be accomplished by the staff

of the authority.

3.27 Jragung Dam. For the initial stage proposed for construction in

this project, detailed designs and construction drawings for the diversion

tunnel are essentially completed. The same documents for the access road and

base camp are scheduled for completion in June 1978. Detailed design of the

dam is scheduled for completion in March 1979. A number of geologic faults

have been located and investigated at the damsite. None of them show any

recent displacements. Extensive analyses have also been made of possible

earthquake effects. Studies of these factors indicate that the dam and

appurtenant structures are geotechnically feasible. The characteristics

of the site will be taken into consideration in the preparation of final

designs.

Implementation Schedules

3.28 The project would be implemented over a period of 4 years, during

which the second stage of the Jragung Dam subproject would be initiated,

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possibly under a future loan. The schedules for each of the project construc-tion components are presented in Figure 3.1.

Cost Estimates

3.29 Total project cost is estimated to be US$47.4 million of whichUS$26.9 million (57%) is the foreign exchange component. Because of the taxexempt status of the implementing agencies, the costs do not include provi-sion for local, provincial and national taxes. Unit prices are based uponrecent contract prices for similar works in Java. The base cost estimate isexpressed in mid-1978 prices. Physical contingencies of 25% have beenapplied to the civil works and right-of-way costs for the Cipamingkis sub-project and the Hydrologic Measurement Program due to the amount of work thathas not been carried to the detailed design stage. Although detailed designfor the preliminary works at Jragung Dam have been completed, the uncertaintyof tunneling dictated that a contingency factor of 40% be utilized for thatwork, and 15% for the access road and base camp. Contingencies of 10% and20%, respectively have been applied to the costs of vehicles and equipment,and services. Expected price increases over the implementation period totalabout 26% of the base cost estimate plus contingencies assuming the followingcalendar year inflation rates:

Annual Inflation Rate (%)1978 1979 1980 1981/82

Civil Works 14 12 10 8Equipment and Services 8 8 8 7

Details of the cost estimates are contained in Annex 1 and are s-ummarized inTable 3.2. The total project cost for Jragung Dam, including the secondstage and expected price increases, are also presented in Annex 1.

3.30 Engineering and administration costs amount to about 5% of the basecost estimate. Costs of consulting services are based on recent contractssigned in Indonesia for similar services with local and foreign firms. Thedirect costs of foreign consultants (salaries, overseas allowance and companyoverhead and fee) amount to about US$6,500 per man-month. Including indirectcosts (travel, housing, office and miscellaneous expenses), the total costwould be about US$8,000 per man-month. Total costs of local consultants wouldbe about US$1,200 per man-month.

Financing

3.31 The proposed loan of US$31.0 million would finance about 65% ofthe total project cost and would cover the full foreign exchange costs(US$26.9 million), and US$4.1 million of local costs. GOI would providethe remaining Rp 6,810 million (US$16.4 million) to the executing agenciesout of annual budget appropriations.

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Procurement /1

3.32 Of the 56 vehicles to be acquired under the project, a total of 27will be required for use by consultants and will be procured by coirretitivemeans other than ICB (10 for start-up - to be purchased locally through theconsultants services category - and 17 through international shopping). Allthe remaining vehicles, as well as equipment for construction and operationalpurposes (US$2.8 million), would be procured under international competitivebidding procedures in accordance with the Bank Group guidelines. A preferenceequal to 15% of the c.i.f. cost of the imported goods or the customs duty,whichever is lower, would be extended to qualified local manufacturers in theevaluation of bids. Vehicles for consultants and items of equipment costingless than US$10,000 each and limited to a total of US$400,000, which are notsuitable for ICB, would be purchased through normal GOI procedures, which havebeen found acceptable to the Bank. There are sufficient suppliers of suchgoods to ensure adequate competition. All contracts for vehicles and equipmentexceeding US$100,000 in estimated value would be submitted to the Bank beforebidding and award.

3.33 Construction of the major works for the Cipamingkis subproject,including the weir, primary and secondary canals and structures, roads,and drainage systems (US$11.8 million), and the initial works for JragungDam (US$5.5 million) may be of interest to international contractors.Contracts for these works would be awarded on the basis of internationalcompetitive bidding in accordance with Bank guidelines. Civil works con-tracts at Cipamingkis would be packaged into about three contracts and forJragung into about two contracts. Qualified local contractors would be givena preference of 7-1/2% in evaluation of bids.

3.34 The remaining civil works for Cipamingkis (US$4.8 million), involv-ing small-scale construction activities (tertiary development, offices andhousing) scattered over a wide area, and the construction of measurementstations at almost 200 locations throughout Indonesia for the HydrologicMeasurement Program (US$2.0 million), would not be of interest to internationalcontractors. These works would be carried out following local competitivebidding or, in the case of tertiary and quaternary canals and drains, throughthe INPRES rural works program. While local contracting procedures have beenreviewed under earlier projects and are acceptable to the Bank, assurances havebeen obtained from GOI that: (a) to avoid late construction starts during thedry season, bids could be received and processed without waiting for theproject implementation budget (DIP) to be signed, but contract award andexecution would be deferred until after the DIP is approved; and (b) priceescalation clauses which are not normally provided in local civil workscontracts would be included in contracts extending beyond one year. For civilworks contracts estimated to cost US$1 million and above, documents would besubmitted to the Bank for review before tendering and award.

/1 All costs in this section of the report include contingencies.

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escalation clauses which are not normally provided in local civil workscontracts would be included in contracts extending beyond one year. For civilworks contracts estimated to cost US$1 million and above, documents would besubmitted to the Bank for review before tendering and award.

Disbursements

3.35 Disbursements would be at the rate of 100% against the foreignexchange cost of training and directly imported vehicles and equipment, 95%of the ex-factory cost of locally manufactured equipment, 65% for locallyprocured imported equipment, excluding vehicles, and 40% of total expendi-tures for locally procured vehicles. Disbursements for both foreign andlocal consultants would be at 100% of total expenditures to encourage the useof local consultants and to enable the executing agencies to engage consul-tants expeditiously, since prior budgetary allocations would not be needed.For civil works contracts, excluding tertiary networks, disbursement would bemade at a rate of 70% of total cost. For tertiary construction, disburse-ments would be made against 100% of the cost of structures, but no disburse-ments would be made for earthworks. Disbursement for tertiary structureswould be made only if the withdrawal application is accompanied by a certif-icate from the site engineer stating that the tertiary and quaternary canalsand drains in the tertiary block had been completed. The estimated schedulesof expenditures, disbursements, and allocation of the loan proceeds arepresented in Annex 1. It is proposed to provide US$500,000 of retroactivefinancing to provide for a review of plans for flood control on the Cimanuk,Gipanas and Ciwaringin Rivers to be accomplished prior to loan signing, andfor the services of the expert on river control and management.

Accounts and Audits

3.36 Assurances have been obtained from the Government that the imple-menting agencies would: (a) maintain separate accounts for this project,(b) engage auditors acceptable to the Bank, and (c) submit audited financialstatements, along with the auditors comments and opinions to the Bank withinsix months of the close of each fiscal year.

Environmental Effects

3.37 During construction of the proposed Cipamingkis irrigation systemthere would be a temporary disruption and scarring of the right-of-way ofcanals and the weir site. This would be short lived and not cause any majornonreversible impacts upon the environment. For the Jragung subproject thework proposed would have a similarly temporary environmental impact over aconsiderably smaller area. However, the second stage involving the contructionof the dam would permanently inundate about 600 ha of land.

3.38 There are no known unique environmental factors in any of the areasaffected by the project. None of the project areas have endemic schistoso-miasis or malarial problems and none would be induced due to project activi-ties. The impact upon the human environment would be positive. In their useof pesticides farmers would have to exercise care not to contaminate fish ordomestic water supply.

Table 3.1: CIPAMINGKIS SUBPROJECT WATER BALANCE

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

31 28 31 30 31 30 31 31 30 31 30 31

Potential Evapotranspiration mm 66.5 62.7 72.4 83.7 84.4 95.6 96.9 114.6 108.2 110.0 90.5 74.0

Crop Coefficient (Rice)Area A 1.19 0.66 - - - - - - - 0.91 1.14 1.28

Area B 1.28 1.19 0.66 - - - - - 0.91 1.14

Area C 0.91 1.14 1.28 1.19 0.66 - - - - -

Consumptive Use mmArea A 79.1 41.4 - - - - - _ _ 100.1 103.2 94.7

Area B 85.1 74.6 65.9 - - - - - - - 82.4 84.4

Area C 65.9 95.5 108.0 113.8 64.0 - - - - -

Land Preparation & Nursery mmArea A - - - - - - - - 52.5 127.5 - -

Area B - - - - _ _ _ _ - 52.5 127.5 _

Area C 52.5 127.5 - - - - - - - - -

Percolation mm

Area A 31.0 28.0 - 90.0 62.0 60.0 62.0

Area B 62.0 28.0 31.0 - - - - - - 93.0 60.0 62.0

Area C 84.0 62.0 60.0 62.0 30.0 31.0 - - - - -

Effective Rainfall mm 232.0 194.0 207.0 204.0 126.0 16.0 80.0 32.0 76.0 172.0 203.0 103.0

Irrigation Requirement mm

Area A - - - - - - - - 66.5 117.6 - 53.7

Area B - - - - - - - - - - 66.9 43.4

Area C - _ 48.4 - 44.0 127.8 15.0 - - - - -

Water RequirementArea A MCM - - - -_ 1.928 3.410 - 1.551

Area B MCM - - -_- - - - 3.144 2.040

Area C MCM - - 0.968 - 0.880 2.556 0.300 - - - -

Total MCM - - 0.968 - 0.880 2.556 0.300 _ 1.928 3.410 3.144 3.597

Total /a cu m/sec - - 0.60 - 0.55 1.64 0.19 _ 1.24 2.12 2.02 2.24

Available Supply cu m/sec 8.00 8.37 8.28 9.09 5.00 2.09 1.77 0.73 1.14 2.64 4.50 5.41

Water Balance cu m/sec + + + + + + + + -0.10 + + +

Shortage (%) - - - - - - - - 8 -

/a Conversion includes factor for 60% overall efficiency.

Note: Area A is early wet-season rice on 2,900 ha. Area B is late wet-season rice on 4,700 ha. Area C is dry-season rice on 2,000 ha.

Secondary dry-season crops will be grown on 3,000 ha utilizing residual moisture.

Table 3.2: SUMMARY COST ESTIMATE

Foreign

Local Foreign Total Local Foreign Total exchange

- --- (Rp million) ---- ---- (US$ million) ---- (%)

Cipamingkis Subproject 3,460 3,380 6,840 8.2 8.3 16.5 50

Jragung Subproject - 1st Stage 1,070 1,250 2,320 2.6 3.0 5.6 52

Hydrologic Measurement Program 620 1,580 2,200 1.4 3.9 5.3 74

Cimanuk River Water Management Program 370 1,240 1,610 0.9 3.0 3.9 79 o

Base cost estimate 5,520 7,450 12,970 13.1 18.2 31.3 58

Physical contingencies 1,260 1,470 2,730 3.0 3.6 6.6 55

Expected price increases 1,830 2,110 3,940 4.4 5.1 9.5 54

Total project cost 8,610 11,030 19,640 20.5 26.9 47.4 56

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4. ORGANIZATION AND MANAGEMENT

Project Management

4.01 Four separate entities will be responsible for the implementation

of the various parts of this project. As the Cipamingkis subproject area

falls within the Jatiluhur Region, it would be implemented by the Jatiluhur

Authority, a semi-autonomous Government corporation under the jurisdiction of

the Ministry of Economy, Finance and Industry. The Jatiluhur Authority is

presently entirely responsible for the execution of two Bank-assisted projects

(Credits 195 and 514-IND) and for a portion of another (Loan 1268-IND).

Works on Credit 195-IND will be completed this year; most of the main contracts

under Credit 514-IND have been or will shortly be awarded; and works under

Loan 1268-IND, mainly the construction of tertiary systems, are scheduled to

be completed by mid-1979. The Authority is well managed and, based upon its

success in implementing the ongoing projects, should have no difficulty in

executing the works proposed under this project.

4.02 The Jragung dam subproject would be managed by PROSIDA, an executive

body within the Directorate-General of Water Resources Development (DGWRD),

which has been the executing agency for most components of the remaining

Bank Group-assisted irrigation projects in Indonesia. Since its establishment

in 1969, PROSIDA has demonstrated an increasing capability to plan and executeirrigation projects and has gained the reputation of being one of the most

efficient construction agencies in the Indonesian government. The capability

of PROSIDA to successfully carry out its responsibilities under this project

has been established by prior performance.

4.03 A new executive body, Proyek Hidrologi, is in the process of being

established to implement the Hydrologic Measurement Program. While organiza-tionally distinct from the existing Directorate of Hydraulic Engineering

(DPMA), Proyek Hidrologi would share its management, facilities and most of

its staff with DPMA. The Director of DPMA would become jointly General

Manager of Proyek Hidrologi and the head of the Subdirectorate for Hydrologic

Services in DPMA would become jointly the Deputy General Manager. DPMA is

located in Bandung, West Java. Its headquarters and laboratory facilities are

modern and efficient and it has been operationally and institutionally streng-

thened by bilateral assistance as well as a UNDP-assisted project (para. 3.09).

It is the principal hydraulic engineering organization under the DGWRD but

funding constraints have limited its ability to establish and maintain measure-ment stations to provide adequate hydrologic data and to effectively analyze

and publish the hydrologic data that it does collect. With the assistance of

advisers, to be engaged under the project, the reorganized DPMA staff would be

capable of implementing the project and operating the systems to be established

in an efficient manner.

4.04 The creation of a new executive body to implement this component has

been taken as the only practical solution to the constraints faced by the

DGWRD in modifying its organizational structure to cope with an expanding

program of work and in attracting and retaining staff of the necessary calibre.

Executive bodies can be established by the Minister of Public Works (whereas

establishment of a new Directorate or Subdirectorate would require the assent

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of the President, a very time-consuming procedure). The Minister can alsoestablish terms and conditions of employment within executive bodies above thelevel obtaining in the line agencies and thereby attract and retain theskilled staff needed for complex projects such as this. By the use of jointappointments, such as those described above for Proyek Hidrologi, the flow ofinformation and the coordination of work assignments between the executivebodies and the line agencies can be maintained. The DGWRD recognizes that theestablishment of new executive bodies, in addition to those now existing, isnot an optimal organizational arrangement. Discussions are continuing withinthe Government and with the Bank on an organizational structure which would,among other things, provide for the greater integration of activities underBank Group-assisted projects with those of the DGWRD as a whole.

4.05 Execution of the Cimanuk River Management Program would also beentrusted to a new executive body, for the reasons that have just beendiscussed above. Proyek Cimanuk is being established using the same managementand largely the same staff as the line agency, the Directorate of Rivers(DOR), which has been handling the planning and design of flood control worksin the Cimanuk basin up to now. DOR is a well-established agency with respon-sibility for flood control and sediment control in natural and manmade channelsthroughout Indonesia. With the consultant and advisory assistance to beprovided under the project, the reorganized DOR staff would be capable ofimplementing the Program.

4.06 Organization charts for the Directorate-General of Water ResourcesDevelopment and the three implementing agencies under its jurisdiction areshown in Figures 4.1, 4.2, 4.3 and 4.4. The organization of the JatiluhurAuthority is presented in Figure 4.5. Assurances have been obtained that theGovernment would, before making any new appointment to the position ofPresident Director of the Jatiluhur Authority or of the General Manager ofPROSIDA, Proyek Hidrologi or Proyek Cimanuk, inform the Bank of the names,qualifications and experience of the persons considered for such appointmentand would afford the Bank a reasonable opportunity to exchange views with theGovernment on the qualifications and experience of such persons; and also,that the Government would cause the above agencies to be adequately staffedat all times with competent and qualified personnel.

Consultants, Advisors and Training

4.07 The project includes assistance for the funding of consultants to

complete detailed designs, prepare construction drawings and tender documentsand to supervise construction for the Cipamingkis subproject. GOI hasindicated that it intends to utilize Nippon Koei Co. (Japan), which ispresently engaged by the Jatiluhur Authority for ongoing work related toCipamingkis for the above-mentioned work. For the Jragung Dam, detaileddesigns will be completed by consultants financed by USAID. GOI intends toengage the same consultants (ECI) to supervise construction of the initialphase works included in this project. An additional adviser would be recruitedto advise the Provincial Director of Public Works on the coordination ofactivities in the Jratunseluna area.

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4.08 For the Hydrologic Measurement Program, two hydrologists and one

hydrometeorologist would be engaged as advisers for a three-year period. Anadvisor on sedimentation laboratory equipment and operation would be engagedfor 18 months and one on hydrometric automatic data processing equipmentoperation for 6 months. For efficiency, cost effectiveness and coordination,these advisors would be recruited from a consulting firm with the capability

to provide additional back-up assistance to the advisers.

4.09 For the Cimanuk River Water Management Program, consulting servicesare provided for the preparation of the master plan and for the review andcompletion of plans and designs for flood and sediment control on the lowerCimanuk River below New Rentang Barrage and for the Cipanas and Ciwaringin

rivers. GOI has indicated that it intends to engage Snowy Mountains Engi-neering Corporation (Australia) for these activities. In addition, a long-

term (two years) advisor on river control and management would be engaged

4.10 Engagement of all consultants and advisors would be on terms and

conditions acceptable to the Bank, and assurances have been obtained from GOIthat consultants and advisors would be engaged by November 30, 1978. Con-sulting services and training to be provided under the project are shownbelow. Training would be provided through contractual arrangements with theforeign consultants. It would include short-term academic training on spe-

cific project related activities and home office work-training assignments.Details of the training activities would be identified following the engage-ment of consultants.

4.11 An assurance has also been obtained that the Borrower would (a)

cause DGWRD to appoint a panel of consultants, whose qualifications andexperience would be acceptable to the Bank, to review the planning, designand construction of Jragung Dam (and any additional dams as may be agreedbetween the Borrower and the Bank) throughout the period of planning, design

and construction of such dams, to ensure the quality of their designs and

safety; and (b) cause such panel to be consulted prior to the execution of

all major changes in the design or construction of any of the said dams.

Table 4.1: CONSULTING SERVICES AND TRAINING

FieldCon- investi-

Total sultants gations Training Foreign Local

- …------ (US$ 000) ---------- (Man-months)

Cipamingkis 900 800 100 95 -

Jragung Dam 600 400 200 - 65 -

Hydrologic MeasurementProgram 1,500 1,200 300 140 15

Cimanuk River WaterManagement Program 2,900 2,900 - 280 300

Total 5,900 5,300 200 400 590 315

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Agricultural Support Services

4.12 In order to attain the full future benefits of the proposed subproj-ects, agricultural support services need to be strengthened in the projectareas. While this project does not contain assistance to any agriculturalsupport program, GOI has several ongoing programs which it would expand atCipamingkis and Jragung. The Bank is assisting GOI in upgrading some ofthese programs, such as the extension service through Loan 1267-IND, theNatonal Food Crops Extension Project (NFCE), and medium-term credit servicesthrough Credit 480-IND, and the proposed Rural Credit Project. The Bank isalso discussing with GOI the introduction of several other programs to improveagricultural supporting services, such as building village fertilizer stores,upgrading the management and operation of farmer cooperatives, and a secondagricultural research project. Domestic fertilizer production would continueto grow with assistance from the Bank Group (Credit 193-IND and Loan 1089-IND),and the fertilizer distribution project (Loan 1139-IND) would aid fertilizerdistribution from the national to the district level.

4.13 The MOA, BRI and DGC would supply agricultural supporting servicesin the project areas. The recently introduced NFCE project would intensifyand expand extension services by reorganizing and increasing the number offield extension workers (PPL) to provide one for each 1,700 farm families.The PPLs would be supervised by middle-level extension workers (PPMs), andsubject matter specialists (PPSs) at the district level would support andtrain both the PPLs and PPMs. The PPSs would also conduct adaptive researchat the district and subdistrict levels. The BIMAS Secretariat, within theMOA, would expand the BIMAS program (subsidized credit to cover seed, ferti-lizers, pesticides, crop spraying and cost of living expenses) at both projectareas. BRI, which provides credit for the BIMAS program, would increase itsfield staff at existing village unit offices, and where necessary, build andstaff new village unit offices. Besides providing farmers with productioncredit through the village unit, BRI would also supply longer term credit(three to five years) for the purchase of draft animals, ploughs and otherrequired farm equipment. Where necessary, the DGC would establish BUUD/KUDsand village fertilizer stores (kiosks) to handle fertilizer and pesticidedistribution at the retail level. The BUUD/KUDs would be equipped with paddydrying floors, grain warehouses, and rice milling facilities. By purchasingpaddy from farmers, they would also undertake their usual task of maintainingGOI's paddy support price at the farm level.

4.14 At full development, demand for fertilizer would rise from itscurrent level of some 1,000 tons to 2,700 tons/year at Cipamingkis; and from1,600 tons to 4,400 tons/year at Jragung. At present, farmers use mainlyurea (80%), and triple superphosphate (20%) and it is expected that thisratio would continue under the project. While the existing fertilizer supplychannels could handle the increased demand, subdistrict roads would requirerepairing and upgrading to help improve the distribution efficiency at thevillage level. This would be done under the INPRES program. The annualdemand for certified rice seed would be 100 tons at Cipamingkis and 200 tons

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at Jragung at full development. To meet these targets, the quality of localseed growers' production would be upgraded under the provincial agriculturalservice's ongoing work. After project completion, production credit require-ments would also rise. At Cipamingkis, the annual project area short-termproduction credit needs would be around Rp 350 million at Cipamingkis, andRp 560 million at Jragung. At present farmers receive estimated annual BIMASfunds of Rp 160 million at Cipamingkis and Rp 25 million at Jragung. WhileBRI would be able to supply these additional funds, it would have to increaseits field staff, and, particularly at Jragung, build and staff new villageunits to handle the increased credit flows and avoid delays in processing andissuing the credits. The BRI has been gradually improving its services tofarmers, and it is expected to continue doing this, and provide the addi-tional field staff and facilities. To ensure that farmers' needs for advice,credit, and agricultural inputs would be provided in the project areas,assurances have been obtained that GOI would take the necessary steps toensure adequate and timely credit and other agricultural inputs (includingfertilizer, agricultural chemicals and certified seed) are made available atthe village level in the Cipamingkis subproject area and assist in theprovision of drying and storage facilities.

4.15 The extension service, in cooperation with the Provincial IrrigationServices and Ministry of Home Affairs, would form farmer groups (water-userassociations) for extension, production planning, water management, and ter-tiary and quaternary unit construction in each tertiary unit. The quaternaryunit, comprising some 20 to 40 farmers, would be the group's basic unit. Asthey have been vital in synchronizing crop calendars and water supplies,assurances have been obtained from GOI that a water-user association would beformed for each tertiary unit in the Cipamingkis area to participate in theunit's construction and to take over its operation and maintenance afterproject completion.

Operation and Maintenance

4.16 The Jatiluhur Authority would be responsible for operation andmaintenance (O&M) of the Cipamingkis subproject during construction. Thisresponsibility would continue for the weir and primary and secondary canalsfollowing completion of construction, while the farmers would assume respon-sibility for the tertiary system. Tertiary O&M would be accomplishedthrough the formation of water-user associations embracing tertiary blocks ofabout 150 ha each. Farmers would pay about 50 kg of paddy/ha to fund thefull O&M costs of these systems. Operation of the Hydrologic MeasurementProgram would continue to be the responsibility of DPMA.

4.17 As noted in Figure 4.5, the Jatiluhur Authority has a Division ofOperation and Maintenance. Field operations are divided into four geographicdistricts, each headed by an O&M engineer. The maintenance section of theO&M Division would be responsible for the upkeep of the weir and primary andsecondary canals including structures and embankments. Major repairs wouldbe carried out by contract.

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4.18 Although there have been considerable improvements in 0&M servicesin the completed and ongoing Bank-assisted irrigation projects in Indonesia,there is still a need for more trained staff, as well as an increase in O&Mbudgetary allocations. The amounts of O&M funds received in FY77/78 by thevarious irrigation subprojects were in line with those agreed upon duringnegotiations of Loans 1434/1435-IND, and at least half of the funds werereleased by August 15, 1977. For FY78/79, GOI has increased the O&M alloca-tion for rehabilitated systems from Rp 3,200 to Rp 3,500/ha, and is consider-ing the implementing agencies' request for additional staff. Assuranceshave been obtained from GOI that: (a) adequate O&M funds, adjusted to keeppace with inflation and actual needs, would be allocated in future years forall Bank-assisted irrigation projects; (b) GOI would take the necessary stepsto ensure that at least half of the budgeted O&M funds would be released tothe subprojects by August 15 of each year and the balance, in equal quarterlyinstallments thereafter, until the total amounts are fully released; (c) toupgrade the standard of 0&M services and to effectively utilize the availablefunds, GOI would progressively increase the number of qualified O&M personnelin the Bank-assisted projects until the additional numbers to be establishedby GOI in consultation with the Bank are employed; (d) GOI would inform theBank by December 31 of each year of the proposed number of O&M personnel andper hectare 0&M budget for each subproject; and (e) by June 1 of each follow-ing year, it would submit the approved 0&M budget and by October 1, thestaffing provisions.

4.19 For the Hydrologic Measurement Program it is essential that themeasurement stations and equipment are properly and continuously operated andmaintained. Assurances have been obtained from GOI that adequate O&M staffand funds, adjusted to keep pace with inflation and actual needs, would beallocated in future years to continue the operation and maintenance of themeasurement stations.

Monitoring

4.20 A program to monitor benefits accruing from Bank-assisted irriga-tion and drainage works, together with other social aspects, is currentlybeing implemented under Loan 1100-IND. As that program is expanded it wouldinclude this project, with additional required funds provided under a subse-quent Bank-assisted project. An assurance has been obtained that the Govern-ment would ensure that the survey and evaluation of the economic and socialbenefits of the project would be carried out by the survey and evaluationservices included in the Sixth Irrigation Project.

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5. AGRICULTURAL PRODUCTION

5.01 The project would increase agricultural production by providing andimproving irrigation and drainage on 18,100 ha of paddy land. Secondarycrops would also benefit from the project. The changes are discussed underthe respective project areas.

Present Cropping Patterns

5.02 Cipamingkis. Rice is the most important crop in the Cipamingkisarea. During the wet season, farmers grow irrigated paddy on 5,600 ha andrainfed paddy on 2,000 ha. During the dry season they irrigate about 1,000ha of paddy, and grow around 2,000 ha of secondary crop (palawija crop) Li onresidual moisture. Red peppers are the main palawija crop, grown on 1,500 ha.The remaining 500 ha consists of a variety of crops such as soybean, corn,groundnut and sweet potato, and in this report soybean has been used torepresent the group. The overall project area cropping intensity is about139% per annum. Of the irrigated paddy area, about 500 ha is served by asemitechnical system, while the balance is irrigated by small, nontechnical(village) irrigation systems.

5.03 Wet season rice is grown between November and June. Depending onthe start of irrigation supplies, farmers transplant over some 12 weeksbetween November and early February. They harvest over ten weeks betweenMarch and May. Farmers grow dry season paddy between April and September,transplanting in April-May and harvesting in August-September. All rice istransplanted from field nurseries onto previously puddled land. Palawijacrops are grown between March and October on dry season rainfall and residualsubsoil moisture from the preceding crop. While some small plots may behand irrigated, practically all palawija crops suffer moisture stress.

5.04 Farmers sow 40% HYV rice in the wet season and 70% in the dryseason. HYV are mainly Pelita 1/2 and some IR 20 and IR 26. Average wetseason rainfed paddy yields are 1.8 ton/ha, irrigated paddy 2.6 ton/ha, and dryseason irrigated paddy 1.7 ton/ha. Paddy yields are affected by poor watermanagement, inadequate dry-season water supplies and insufficient agricul-tural input services. Average red pepper yields are 1.2 ton/ha and soybean0.4 ton/ha. Insufficient water principally causes the low yields.

5.05 Jragung. The Jragung project area is split between 7,600 ha thereservoir would directly irrigate during the dry season; 1,100 ha, adjacentto the 7,600 ha, which return flows would irrigate; and 1,800 ha of rainfedland alongside the river banks which the reservoir would protect from wetseason flooding. During the wet season, farmers plant the entire 10,500 ha torice, of which 6,100 ha is rainfed and 4,400 ha is irrigated. No irrigationwater supplies are available during the dry season, and farmers grow about4,500 ha of palawija crop on residual subsoil moisture. Tobacco, with

/1 Palawija crops are those other than rice, sugarcane and estate crops;major ones are soybeans, corn, cassava, groundnuts, sweet potato, greenbeans and vegetables.

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2,500 ha planted, is the main palawija crop. The other 2,000 ha consists ofcorn, sorghum, soybean, groundnuts and other crops, and, for this report, cornhas been used to represent them. Annual cropping intensities vary from 100%on the 1,800 ha rainfed area to 152% on the balance of the project area. Theoverall project area cropping intensity is 143%.

5.06 Wet season rice is grown from October to May and dry season fromMarch to August. Because of flooding during December to February, farmers whooccupy the 1,800 ha rainfed area may have to replant considerable portions oftheir wet season crop. Farmers on the remainder of the project area may alsobe flooded; however, works under Loan 1435-IND would alleviate this. All riceis transplanted from field nurseries onto previously puddled land.

5.07 Farmers plant only local varieties on the 1,800 ha that are subjectto floods. On the remaining 8,700 ha they plant 40% HYV in the wet seasonand 50% HYV in the dry season. Average wet season rainfed paddy yields are1.4 ton/ha on the 1,800 ha; and on the remaining area it averages 1.6 ton/hawhile irrigated paddy averages 2.8 ton/ha. Average dry season tobacco yieldsare 0.2 ton/ha (cut and dried leaf), and corn 0.8 ton/ha (dry kernel).

Future Cropping Patterns

5.08 Cipamingkis. Without the project cropping patterns would changelittle. Varietal improvement and slightly better farming practices wouldincrease paddy yields about 10% by 1987 so that wet season rainfed paddy wouldaverage 2.0 ton/ha; irrigated paddy 2.9 ton/ha; and dry season irrigated paddy1.8 ton/ha. As palawija crops are grown in the dry season on residualmoisture, their yields are not expected to increase.

5.09 Table 5.1 shows the expected changes in cropping patterns and pro-duction with the project. During the wet season the entire 7,600 ha wouldbe irrigated paddy. The dry season irrigated paddy crop would increase from1,000 to 2,000 ha, and the area of palawija crop from 2,000 ha to 3,000 ha,giving an overall annual cropping intensity of 166%.

5.10 Jragung. Under Loan 1435-IND, PROSIDA is currently rehabilitatingand constructing the irrigation systems on the 7,600 ha served by the Jragungmain canal and the 1,100 ha return flow area. Consequently, even without theproject this area would be fully and efficiently irrigated during the wetseason. Although no dry season irrigation supplies would be available,because of the larger wet season area irrigated, farmers would increase theirarea of palawija crop grown from 4,500 ha to 6,000 ha. Wet season irrigatedpaddy would average 4.0 ton/ha; dry season tobacco 0.25 ton/ha and corn 0.9ton/ha. However, on the 1,800 ha currently flooded and growing rainfed paddy,no change is expected in the cropping pattern or yields without the project.The overall, annual project area cropping intensity would increase to 157%.

5.11 Table 5.1 shows the expected changes in cropping patterns andproduction with the project. Although obtaining higher yields, farmerswould continue to grow rainfed rice on the 1,800 ha given flood protection.Dry-season irrigation water from the Jragung reservoir would allow farmers to

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irrigate a dry season paddy crop on the 8,700 ha service and return flowareas. Assuming that management problems may restrict the dry season crop to95% of the area (8,300 ha), the annual cropping intensity for the 8,700 hawould be 195%, and for the overall project area 179%.

Future Yields With Project

5.12 With good water management, control and distribution, a strengthenedand improved extension service, and adequate credit and input supplies, theestimated average future crop yields at full project development would be asfollows:

ESTIMATED FUTURE YIELDS WITH PROJECT

Wet season Dry seasonRainfed Irrigated Irrigated Redpaddy paddy paddy pepper Soybean-------------------- (ton/ha) -------------------

Cipamingkis - 4.2 4.2 1.8 0.6

Jragung 1.9 4.0 4.3 - -

The projected yields would be achieved five years after the introduction ofwater or completion of construction, rehabilitation or drainage works. Theimproved yields would be contingent upon the use of HYV rice varieties, cer-tified seed, and heavier fertilizer and crop protection input in the projectareas. The introduction of the National Food Crops Extension Project to theproject areas would play a key role in the organization of farmer groups forextension, crop production, and water management. The forming of the groupswould help in synchronizing cropping patterns and calendars with projectedwater deliveries, increasing contact between individual farmers and govern-ment programs, and ensuring better use of resources and inputs available toeach farmer.

5.13 Present and future crop areas, yields and total production for eachproject area are shown in Table 5.1. At full project development, aboutsix years after completion of project works, annual total paddy productionwould reach 114,200 tons compared to 41,700 tons at present.

Cropping Calendars

5.14 Figures 5.1 and 5.2 show the proposed cropping calendars forpaddy and secondary crops in the project areas. With the improvement andextension of irrigation and drainage facilities, paddy and other crops can beplanted at the correct time, avoiding yield reductions due to planting out ofphase and interference with the following crop. Apart from climate, theproposed cropping calendars have also taken into account the peak labordemands for each of the field operations.

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Drying, Storage and Processing

5.15 Farmers sun-dry paddy on the roadside and in house yards and storeit in their houses. Insufficient concrete drying floors makes drying of thewet-season crop difficult and losses from rainfall can be considerable.The DGC is helping to overcome this problem by providing loans to BUUD/KUDsto install drying floors (para. 4.13). The project areas have more thansufficient milling capacity to handle current production. Besides numerousprivate mills, farmer cooperatives (BUUD/KUDs) own three in Cipamingkis andsix in Jragung. Future increases in demand for milling capacity can bereadily met, either by private capital or the BUUD/KUDs. Most rice milledis medium grade, around 35% broken.

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Table 5.1: CROPPING PATTERNS AND PRODUCTION

Present _ Future without project At full project development /a

Area Yield Production Area Yield Production Area Yield Production(ha) (ton/ha) ('000 ton) (ha) (ton/ha) ('000 ton) (ha) (ton/ha) ('000 ton)

-------------------------------------- Cipamingkis --------------------------------------

Wet seasonRainfed rice 2,000 1.8 3.6 2,000 2.0 4.0 - - -

Irrigated rice 5,600 2.6 14.7 5,600 2.9 16.2 7,600 4.2 31.9

Subtotal 7,600 7,600 7,600

Dry seasonIrrigated rice 1,000 1.7 1.7 1,000 1.8 1.8 2,000 4.2 8.4

Red pepper 1,500 1.2 1.8 1,500 1.2 1.8 2,000 1.8 3.6

Soybean /b 500 0.4 0.2 500 0.4 0.2 1,000 0.6 0.6

Subtotal 3.000 3,000 5,000

Annual summaryPaddy 8,600 - 20.0 8,600 - 22.0 9,600 - 40.3

Red pepper 1,500 - 1.8 1,500 - 1.8 2,000 - 3.6

Soybean 500 - 0.2 500 - 0.2 1,000 - 0.6

Total cropped area 10,600 10,600 12,600

Cropping intensity (%) 139 139 166

---------------------------------------- Jragung --------------------------------------…

Wet seasonRainfed rice I /c 1,800 1.4 2.5 1,800 1.4 2.5 1,800 1.9 3.4Rainfed rice II 4,300 1.6 6.9 - - - - - -

Irrigated rice 4,400 2.8 12.3 8,700 4.0 34.8 8,700 4.0 34.8

Subtotal 10.500 10,500 10,500

Dry seasonIrrigated rice - - - - - - 8,300 4.3 35.7

Tobacco 2,500 0.2 0.5 2,500 0.25 0.6 - - -

Corn /d 2,000 0.8 1.6 3,500 0.9 3.2 - - -

Subtotal 4,500 6.000 8,300

Annual summaryPaddy 10,500 - 21.7 10,500 - 37.3 18,800 - 73.9

Tobacco 2,500 - 0.5 2,500 - 0.6 - - -

Corn 2,000 - 1.6 3,500 - 3.2 - - -

Total cropped area 15,000 16,500 18,800

Cropping intensity (x) 143 157 179

/a In 1987 for Cipamingkis and 1988 for Jragung.

/b Represents a group of palawija crops, including soybean, corn, groundnut, sweet potato, other vegetables.

/c Rainfed rice I area presently flooded alongside Jragung river.

Rainfed rice II - area within 7,600 ha served by the Jragung main canal.

/d Represents a group of palawija crops, including corn, sorghum, soybean, groundnut, vegetables.

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6. MARKET PROSPECTS, PRICES, FARM INCOMES AND PROJECT CHARGES

Market Prospects

6.01 Self-sufficiency in rice is a major Government goal. Indonesianrice production has been unable to satisfy demand for many decades. From1969 to 1976, imports have ranged between 0.5 and 1.3 million tons. However,due to a poor domestic crop in 1977,/l recent dry weather, and a steadilyincreasing population, imports have risen dramatically to around 2.5 milliontons for Indonesian FY77/78. While rice production grew by some 4.5% from1969 to 1975 (from 11.7 to 15.5 million tons), production has stagnatedaround 15.5 million tons for the last three years. Although the Government'sestimates of future demands suggest 0.6 million tons of rice imports would berequired in 1978, it now appears this figure would be considerably higher,and substantial imports would continue to be required for many years. Thusno difficulties are foreseen in marketing the additional 72,500 tons of paddyfrom the project areas.

6.02 Much of the incremental rice production from Cipamingkis andJragung would be consumed at the farm level, while the surplus to localrequirements would be marketed in the Jakarta and Semarang urban areasrespectively. Palawija crop production would be marketed locally.

6.03 Farmers mainly sell their surplus paddy production through privatedealers and millers. The Government's rice procurement authority (BULOG/DOLOG) maintains a floor price for paddy in the project areas, and theBUUD/KUD, its purchasing agent in the villages, buys a standard grade ofpaddy directly from farmers at a fixed price. The floor price is currentlyRp 70 (US$0.17)/kg for 14% moist paddy at the village. Although duringnonharvest periods, prices on the open market are usually higher than thefloor price, farmers are often forced to sell their paddy below the floorprice during the wet-season harvest. In some cases inadequate facilitiesprevent paddy from being dried to the required 14% moisture content standard.In other cases, BUUD/KUDs exhaust their credit lines from BULOG and areunable to obtain cash to pay the farmers, who need cash immediately to meettax payments or to pay off the last season's debts so that they can purchaseinputs for the new season, and are then forced to sell their paddy on theopen market at a discount. Most farmers sell paddy with about 18-20% mois-ture content and up to 10% impurities. Practically all farmers have tosell some paddy immediately after harvest to meet their debts, even if laterthey have to repurchase paddy for consumption. BULOG, through its subsi-diary DOLOG, also maintains rice and paddy storages at the provincial level.Farmers sell their palawija crop production in village and subdistrictmarkets. Facilities at these markets are being upgraded where necessaryunder the INPRES program. Some BUUD/KUDs are disseminating information onmarket prices to their members.

/1 Dry-season harvest 1976, wet-season harvest 1976/77.

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Prices

6.04 For both the farm budget and economic analysis, farm inputs andoutputs have been valued in mid-1978 prices. For rice, soybean, corn andfertilizers, these prices were derived from the Bank's Commodity Division'sforecasts for world market prices, and adjusted for transportation costs.The remaining crops and inputs not traded on the international market havebeen expressed in terL. of actual farmgate prices averaged over three years(1975-77) and adjusted for inflation. Only an estimated 10% of rice productionfrom the project areas would be milled into high-grade rice (5% brokens); 60%would be medium-grade (25-35% brokens); and 30% would be low grade (42%brokens). Using this quality mix and the world market price forecasts, theequivalent economic farm-gate price for paddy would rise from US$146/ton in1978 to US$187/ton in 1985 (in terms of mid-1978 constant dollars) in theproject areas. Historically, the Government has followed a policy of keepingconsumer food prices low by selling imported rice below its cost and keepingdomestic floor prices low. To mitigate the effect of this policy on farmincome, GOI has simultaneously subsidized fertilizer and pesticide. In thelast two years, however, GOI has substantially raised domestic paddy pricesto encourage rice production. This change in policy, combined with the fallof world prices from the record levels of 1973-74, has brought farm-gateprices fairly close to world market levels. Thus, the floor price for paddyis now Rp 70/kg, as compared with an imputed economic price of Rp 76/kg.Although with some fluctuations, GOI has similarly gradually reduced thesubsidies for fertilizers. GOI is expected to continue its efforts to aligndomestic and world market prices, and consequently at full development,economic and financial prices for inputs and outputs are assumed to coincideat the Bank's forecasted world market prices.

6.05 Price structures for food crops and fertilizers are shown inTable 6.1. Table 6.2 shows all prices used for the financial and economicanalyses.

Farm Incomes

6.06 For farm income analysis, farm models have been prepared for threetypical farm sizes (0.2, 0.5 and 1.2 ha) at Cipamingkis, and one farm size(0.5 ha) at Jragung. Details are presented in Table 6.3. Although benefitswould not be generated at Jragung until construction of the dam, a farm modelhas been constructed to show the expected benefits for the average size farm.Land use and cropping patterns for the present conditions broadly reflectaverages for cultivated lands in the project areas. For the analyses,soybean represents a composite grouping of secondary (palawija) crops such assoybean, groundnut, corn, green beans and sorghum at Cipamingkis, whilecorn represents the areas of a similar grouping of crops at Jragung. Farmbudgets are calculated according to cash flows. Labor costs include onlyhired and harvest labor, not farm family labor, and were determined fornon-harvest periods by calculating the excess of total monthly labor require-ments over an estimated 40 man-days of family labor per farm per month.Hired farm labor is costed at Rp 350/day at Cipamingkis and Rp 300/day atJragung. Average annual land taxes (IPEDA) at present are Rp 7,000/ha at

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Cipamingkis and Rp 4,000 at Jragung. Without the project they would remainat the same level at Cipamingkis, but because of ongoing work at Jragungunder Loan 1435-IND they are expected to reach about Rp 10,000/ha. At fulldevelopment they would reach an estimated Rp 13,000/ha at Cipamingkis and

Rp 14,000/ha at Jragung. With the project, farmers would also contributeRp 4,000/ha (some 50 kg of paddy/ha) for O&M of the tertiary and quaternary

irrigation units. Sharecropping is extensive in both subprojects, and farmincomes have been calculated for both owner-operators and sharecroppers.Except for the landlord paying the land tax, and the sharecropper and his

family providing the labor, the landlord and sharecropper equally dividegross production less harvesting and other production costs. Farm familiesin all areas also earn considerable off-farm income from either skilled

(carpentry, stone masonry, local public official) or unskilled work, and fromroadside trading. Based on farmer interviews in the project areas, off-farmfamily earnings have been estimated for the present and for the future withthe project.

6.07 At Cipamingkis, the smallest farm (0.2 ha) is assumed alreadyentirely irrigated during the wet season and 20% of its area irrigated inthe dry season. The two larger farms are about 65% irrigated in the wetseason, but receive no irrigation water in the dry season. Annual croppingintensities, which increase with the project, are highest on the 0.2 ha farm,and progressively fall for the other two farms. At Jragung the model farm is

assumed half irrigated and half rainfed at present, but due to works under

Loan 1435-IND, becomes fully irrigated during the wet season in the withoutproject situation. The proposed project would supply dry season water, thus

considerably increasing the annual cropping intensity.

6.08 Table 6.3 shows the results of the farm budget analysis. Between

now and full agricultural development of the project, net crop incomes would

grow at 10-12%/year at Cipamingkis and 5-6%/year at Jragung. Even allowing

for the additional costs of family farm labor and management (Table 6.4),

this indicates farmers would have sufficient financial incentive to achievethe projected yields and cropping intensities.

6.09 Although comparisons of farm incomes based on farm budgets with

income data based on national accounts aggregates must be interpreted with

caution, they do present an approximation of the relative position of projectbeneficiaries. Present per capita farm incomes in the project areas arebetween US$35 and US$85, about 15-30% of the estimated 1978 per capita GNP of

US$275. Thus an estimated 90-95% of these families presently have annual per

capita incomes at or below the estimated absolute poverty level of US$95

(1975 prices). Providing the farm population remains constant, at full

project development in 1987 the projected per capita farm income is estimated

to range from US$55 to US$175, some 15-45% of the then per capita GNP. Theproject would enable beneficiaries to slightly improve their income levelsthroughout the economy. It would also raise some 30-35% of the farmers abovethe absolute poverty level.

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6.10 No reliable income data are available for the landless laborers who

live in the project areas. However, assuming two full-time workers per

family; an average wage rate of Rp 200/day; and 200 work days/year/worker,the annual income of a landless family can be no more than Rp 80,000 or

US$195. bince employment opportunities are limited, many families probably

earn less. Benefits to accrue to landless laborers under the project are

discussed in para. 7.01.

Project Charges

6.11 Irrigators in Indonesia pay a land tax (IPEDA) and, depending on the

intensity of on-farm irrigation development, water charges for the operation

and maintenance of the irrigation system below the secondary turn-out. IPEDA

is collected by village heads, and turned over to local and provincial adminis-

trations for use in public services. However, it can be considered a direct

project tax which contributes towards the operation and maintenance, plus

capital repayments, of the main irrigation system. Since IPEDA is assessed as

a percentage of the value of production, the amounts collected would increase

as crop yields rise in response to the project. A GOI interministerialcommittee has recommended that part of this increase in IPEDA should be used

to cover annual operating and maintenance costs of the irrigation works that

were rehabilitated or constructed. Additionally, as a result of a recent GOI

decision to tie disbursements under its local infrastructure development

program (INPRES) to IPEDA collection performance, IPEDA collection rates have

improved markedly. At present up to 10% of the IPEDA collection is used for

O&M of the main and secondary systems. The Central Government, however,

provides the balance of funds, 90% or more, required for O&M of the main

systems.

6.12 Water-user associations at the tertiary canal level in Indonesia

have traditionally contributed a portion of their crop to the water master

(ulu-ulu), or he has received the use of an area of village rice land, in

payment for his services. As tertiary and quaternary canal and drain develop-

ment has occurred under Bank-assisted irrigation projects, the irrigators

have increased their contributions to cover all operation and maintenancecosts of the teriary/quaternary unit. The amount of this water charge varies

according to the degree of development of the tertiary unit. Present and

expected future levels of IPEDA and water charges are as follows in the two

subproject areas (in constant mid-1978 prices):

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PROJECT CHARGES AVERAGED OVER SUBPROJECT AREAS

Present /a With project /b Increment-…------------ (Rp/ha)/c ----------------

Cipamingkis

IPEDA 7,000 13,000 6,000Water charges 500 4,000 3,500

Total 7,500 17,000 9,500

Jragung

IPEDA 10,000 14,000 4,000Water charges 3,000 4,000 1,000

Total 13,000 18,000 5,000

/a At Jragung these are the estimated IPEDA and water charges after fulldevelopment of Loan 1435-IND project works. At Cipamingkis, present andfuture "without project" charges would remain the same.

/b With project refers to full agricultural development in 1986 atCipamingkis, 1987 at Jragung.

Ic In terms of constant mid-1978 rupiahs.

6.13 Assurances have been obtained that, following completion of theCipamingkis subproject, GOI would collect, in accordance with its laws andregulations, the adjusted IPEDA based on the increased productivity of allirrigated land rehabilitated and constructed under the project; amounts to becollected would be sufficient to ensure sound O&M practices and to recover areasonable portion of the capital costs during the project's useful life,taking into account farmers' incentives and capability to pay; and it wouldsubmit to the Bank for review every two years the IPEDA rates collected for

different land classes.

6.14 In determining the extent of cost recovery and the relation ofproject charges to benefits under the project, cost and rent recovery indices

have been calculated. The cost recovery indices are 7% for Cipamingkis and53% for Jragung. Rent recovery indices were calculated for owner-operatorsand share croppers on 0.2, 0.5 and 1.2 ha farms at Cipamingkis, and on a 0.5ha farm at Jragung. They indicate that at Cipamingkis owner-operators wouldpay from 27% to 84% of their project rent in incremental project charges, andshare croppers from 9% to 31%; while at Jragung owner-operators on theaverage size farm would pay 27% and share croppers 2%. Table 6.4 lists theassumptions used in calculating the rent recovery indices.

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6.15 Project charges are considered satisfactory in both the subprojectareas. Even though most owner-operators would have rent recovery indicesless than 50%, no increase is proposed in the projected land tax rate andwater charges farmers would pay under the project as some 90% of the projectarea farmers would have per capita incomes below the critical consumptionlevel /1 at full project development. All farmers pay heavy local taxes.Besides paying substantial total direct project charges (land taxes andtertiary/ quaternary block O&M charges of Rp 17,000-18,000/ha), they wouldpay at least 10% of their gross value of production in village taxes, as wellas contributing to the social life of the village through religious taxes,compulsory feasts, and allowing all village members, if they wish, to partakein the harvest of the farmer's paddy crop. The harvesters retain up to onefifth of the crop as payment, a wage rate considerably higher than theaverage market rate. Since even at full project development practically allshare cropper families would have per capita incomes below the critical con-sumption level, the low rent recovery indices for this group are appropriate.

/1 Critical consumption level (CCL) is defined as the consumption levelat which the social value of an extra unit of consumption equals thesocial value of an extra unit of public revenue. In Indonesia the CCL isestimated to be at least two thirds of national GNP per capita.

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Table 6.1: PRICE STRUCTURE FOR FOOD CROPS AND FERTILIZERS

Food crop & 1 9 7 8 1 9 8 5fertilizer prices '000 Rp/ton US$/ton '000 Rp/ton US$/ton

RiceExport price, Thai 5-42% broken mix, /a

f.o.b. Bangkok 122.3 235 156.0 300

Ocean freight & insurance 10.4 20 10.4 20Port handling, storage, transport

to wholesaler 4.2 8 4.2 8

Handling, transport mill to wholesaler -2.6 -5 -2.6 -5Rice price, ex-mill, project area 134.3 258 168.0 323

Paddy equivalent price (63% recovery) 84.5 163 105.5 203

Milling costs less value of by-product -2.0 -4 -1.0 -2

Drying & cleaning -1.5 -3 -1.5 -3

Handling, transport farm to mill -1.0 -2 -1.0 -2

Farm-gate paddy price /b 80.0 154 102.0 196

(Financial farm-gate price) /c (65.0)/d (157) (81.0) (196)/e

SoybeanExport price, f.o.b. US Gulf port 143.0 275 180.4 347

Ocean freight & insurance 15.6 30 15.9 30Port handling at Semarang 3.6 7 3.7 7

Soybean price on trucks, Semarang 162.2 312 200.0 384

Transport wholesalers to wharf -4.2 -8 -4.0 -8Transport farm to wholesaler -3.0 -6 -3.0 -6Farm-gate price /b 155.0 298 193.0 371

(Financial farm-gate price) /c (130.0) (313) (154.0) (371)/e

CornExport price, f.o.b. US Gulf port 44.7 86 62.0 119

Ocean freight & insurance 8.3 16 8.3 16Port handling at Semarang 3.1 6 3.1 6

Corn price on trucks, Semarang 56.1 108 73.4 141Transport wholesalers to wharf -3.9 -7 -3.4 -7

Transport farm to wholesaler -2.2 -4 -2.0 -4

Farm-gate price /b 50.0 96 68.0 131(Financial farm-gate price) /c (40.0) (96) (54.0) (131)/e

UreaWorld export price, f.o.b. /f 85.8 165 114.4 220

Ocean freight & insurance 3.1 6 3.2 6

Handling, distribution toretail level 21.0 40 21.4 41

Transport BUUD/KUD kiosk to farm 1.1 2 1.0 2

Farm-gate price /b 111.0 213 140.0 269

(Financial farm-gate price) /c (71.0) (171) (112.0) (269)/e

TSPWorld export price, f.o.b.

Florida 61.4 118 90.0 173

Ocean freight & insurance 11.4 22 11.2 22Handling, distribution to

retail level 21.1 41 20.8 40Transport BUUD/KUD kiosk to farm 1.1 2 1.0 2Farm-gate price /b 95.0 183 123.0 237(Financial farm-gate price) /c (71.0) (171) (98.0) (237)/e

/a Assumed rice quality: 10% of production, 5% brokens; 60% medium grade,

25-35% brokens; 30% lower grade, 42% brokens. Assumed prices in 1985 (inconstant mid-1978 prices); 5% brokens, US$422/ton; 25-35 brokens, US$290/ton;42% brokens, US$275/ton.

/b At a shadow-priced exchange rate of Rp 520 = US$1.00.

/c At the official exchange rate of Rp 415 = US$1.00.

/d Present financial price calculated as follows: floor price at BUUD/KUD for

14% moisture content paddy Rp 70/kg; less Rp 1.5/kg drying and cleaning;Rp 1/kg transport farm to BUUD/KUD; Rp 2.5/kg for market imperfections.

/e In the future, distortions are assumed eliminated between internal and worldmarket prices.

/f Urea is valued at ex-PUSRI factory, Palembang, IBRD world market priceprojections for bagged urea f.o.b. Europe have been adjusted for South-EastAsia markets.

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Table 6.2: INPUT AND OUTPUT PRICE SUMMARY(Rp'000/ton)

1 9 7 8 1 9 8 5Financial Economic Financial Economic

CropsRice 65.0 80.0 81.0 102.0Soybean 130.0 155.0 154.0 193.0Corn 40.0 50.0 54.0 68.0Red pepper 300.0 300.0 300.0 300.0Tobacco 800.0 800.0 800.0 800.0

FertilizerUrea 71.0 111.0 112.0 140.0TSP 71.0 95.0 98.0 123.0

SeedsRice - local 65.0 80.0 81.0 102.0

HYV 150.0 160.0 160.0 200.0R.ed pepper 300.0 300.0 300.0 300.0Tobacco 216.0 216.0 216.0 216.0Soybeans 130.0 155.0 170.0 220.0Corn 40.0 50.0 54.0 68.0

OtherZinc phosphide 2,300.0 2,700.0 2,300.0 2,700.0Agrochemicals /a 900.0 4,100.0 900.0 4,100.0

/a Rp/liter.

Table 6.3: SUMMARY OF FARM BUDGETS

Family Crop income Off-Farm income Total farm income /a Per capita incomeFarm size size Present Future /b Present Future Present Future Present Future

(ha) (no.) ------ …-_-__--_-_-_-____-- (Rp'000) ---- …-___U_------------ ---- (US$)…

Cipamingkis

0.2 5.5/c 35 95 70 70 105 165 45 705.5 15 50 70 70 85 120 35 55

0.5 5.5 95 235 60 50 155 285 70 1255.5 50 120 60 50 110 170 50 75

1.2 5.5 155 380 40 20 195 400 85 1755.5 80 190 40 20 120 210 55 90

Jragung

0.5 5.5 130/d 220 50 40 180 260 80 1155.5 65/d 115 50 40 115 155 50 70

/a All income data is rounded to nearest Rp 5,000 and US$5.00.

/b Future represents at full project development in 1987 for Cipamingkis, and 1988 for Jragung.

/c For each farm size the top data line refers to owner-operators, and the second to share-croppers.

/d This figure refers to future without project, as due to an earlier Bank project (Loan 1435-IND), presentincome would increase substantially.

Table 6.4: RENT RECOVERY(Rp'000)

C I P A M I N G K I S J R A G U N G0.2 ha farm 0.5 ha farm 1.2 ha farm 0.5 ha farm

Owner-op. Share-crop. Owner-op. Share-crop. Owner-op. Share-crop. Owner-op. Share-crop.

A. At Full Project Development

1. Incremental gross value of farmproduction /a 66 33 152 76 259 130 127 64

2. - Less cash production costs /a 13 7 31 16 74 44 36 183. - Equals net cash income 53 26 121 60 185 86 91 464. - Less imputed family labor costs /b 6 6 16 16 25 25 6 65. - Less imputed farmer's management /c 3 2 8 4 13 7 6 36. - Less imputed return on own capital /d 13 - 26 - 42 - 257. - Less allowance for risk/uncertainty /e 13 7 30 15 52 26 25 138. - Less general taxes /f 7 3 15 8 26 13 13 69. - Less miscellaneous TR 3 2 8 4 13 7 6 3

10. Equals project rent 8 6 18 13 14 8 10 15

11. Incremental - Water charges (O&M) 1 0.5 2 1 4 2 0.5 0.2512. - Land tax (IPEDA) I - 3 - 7 - 2

13. - Total direct charges 2 0.5 5 1 11 2 2.5 0.25 4

B. Discounted Cash Flows Over Project Life /h

14. Project rent 62 1.7 140 101 109 62 78 11715. Water charges 9 5 19 9 38 19 5 216. Land taxes 8 - 23 - 54 - 16

17. Total direct charges 17 5 42 9 92 19 21 218. Rent recovery (%) 27 11 30 9 84 31 27 2

Farm income per capita at full development(1987)(US$) 70 55 125 75 175 90 115 70

Absolute poverty (1975): US$95GNP per capita (1978): US$275/i

/a From Annex 2, Table 5./b Wage rate Rp 350/day at Cipamingkis; Rp 300/day at Jragung./c At 5% of incremental gross value of farm production./d At 10% of farmer's own incremental capital./e At 20% of incremental gross value of farm production./f Village taxes, at 10% of incremental gross value of farm production./g Storage losses, at 5% of incremental gross value of farm production./h Net present value of project rent and incremental charges, which are discounted at 10% per year over the

project life (30 years)./i GNP per capita for 1977 of US$260 inflated by 6%.

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7. BENEFITS, JUSTIFICATION AND RISKS

7.01 By providing improved water control, distribution and drainage,the proposed project would increase crop yields and production on 7,600 ha atCipamingkis. The project would directly benefit some 16,000 farm families orsome 88,000 people; and by providing additional employment opportunities,indirectly benefit some 2,800 landless laborers' families, or 63,000 people.By increasing crop production and the dry-season cropped area it would createa demand for an additional 0.6 million man-days of farm labor per year, equiv-alent to some 2,500 full-time jobs annually. Construction of the secondstage of the Jragung Dam would provide 63 MCM municipal and industrial watersupply for the city of Semarang and 30 GWh of hydroelectric power generation.It would also increase crop yields on 10,500 ha and directly benefit 20,200farm families or some 112,000 people; and by providing additional employmentopportunities of 0.9 million man-days of farm labor per year, indirectlybenefit 8,600 landless laborer families, or 48,600 people. The reservoirwould also reduce the rivers silt load by some 540,000 cu m annually, thusreducing O&M costs in the irrigation area served by the Jragung main canal,and the dredging of floodways at the river's mouth. Although not included inthe economic benefits, the project would considerably improve village watersupplies for domestic purposes throughout the project areas. It would alsosupport the Government's policies of reducing food grain imports and attain-ing self-sufficiency in rice production.

7.02 Economic rates of return are presented for the proposed works atCipamingkis, and for the completed reservoir at Jragung, including thehydropower generating facilities and urban water supply offtake, treatmentand distribution works. Although the project provides only for the construc-tion of the access road and diversion tunnel at Jragung, the economic rate ofreturn has been calculated for the entire subproject to demonstrate itseconomic feasibility. The proposed phasing of project works at Jragungresults from financial considerations, not from any logical physical separationof project works into various stages.

7.03 Benefits. Expected future crop yields and production with andwithout the project are discussed in Chapter 5. Chapter 6 presents the farm-gate prices for inputs and outputs, based on the Bank's commodity price fore-casts for rice, soybean and chemical fertilizers, and domestic prices forother commodities. Annex 2, Table 3 gives the expected crop production costsand labor requirement/ha; Table 7.1 shows the expected gross and net cropreturns/ha (without accounting for labor), the total expected agriculturalbenefits at full agricultural development for the project areas, and sum-marizes net agricultural benefits for each project area.

7.04 The hydropower installation at Jragung would assist Perusahaan UmumListrik Negara (PLN), the national power company of Indonesia, meet theexisting demands of consumers in the city of Semerang, who at present exper-ience frequent power black-outs and brown-outs during the year. The avail-able supply of energy is already considerably less than the present demand,the annual amount of power produced at Jragung is small compared to the totalannual demand in Central Java, and because the existing system has sufficientcapacity to handle the Jragung output, no investment has been allowed for

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additional distribution facilities at the retail consumer level. The energy

has been valued at the estimated average consumer tariff of Rp 34.9/kWh /1

for 1978, less 10% transmission and 10% distribution losses, and the O&M

costs of generation, transmission and distribution. Transmission O&M has

been estimated at 1% of the capital cost of transmission, while the distri-

bution O&M has been estimated at Rp 0.5/kWh supplied to retail consumers.

7.05 Following feasibility studies of the alternative sources of munici-

pal and industrial water supply for Semerang, GOI has given priority to

Jragung reservoir (together with the development of the Muncul Springs and

groundwater sources) to meet increased demand up to around 1990. The reservoir

would supply an additional 63 MCM of water annually, and this has been valued

at Rp 91/cu m supplied to retail consumers. Although this is above the

existing tariff (Rp 43 cu/m), it corresponds to the tariff levels suggested

for new urban water supplies in the appraisal of the proposed Second Water

Supply Project. Health benefits, which would be extensive, have not been

quantified.

7.06 The reservoir would reduce silt deposition by an estimated 135,000

cu m per year in the floodways where the river enters the sea. Average

dredging costs are Rp 700/cu m, and benefits from reduced dredging are

estimated at Rp 94.5 million annually. Other benefits from reduced siltation

are expressed in lower O&M costs for the Jragung main canal service area.

7.07 Foreign Exchange. Due to the existence of import taxes, quanti-

tative restrictions and export subsidies, the official exchange rate of

Rp 415 = US$1.00 does not represent the true value to the economy of foreign

exchange used in carrying out the project, and savings through increased

grain production. A standard conversion factor of 0.8 (Rp 520 = US$1.00)

was, therefore, used in the economic analysis.

7.08 Labor Pricing. Because of the small average farm size (0.5 ha in

both project areas), and the large number of landless families whose major

income source is farm labor, considerable unemployment, and low productivity

employment, exists in the project areas. Additionally, farm labor require-

ments are distinctly seasonal, with major demands occurring during the wet

season. Even at full project development during the month of peak labor

requirement (wet-season harvesting, dry-season cultivation and transplant-

ing of rice), total labor utilization in agriculture would be only 43% at

Cipamingkis and 55% at Jragung. While the farm labor force tries to offset

this situation by doing considerable off-farm work, much of this is of

extremely low productivity. Thus farm labor was valued at a monthly shadow

wage rate. This varies seasonally, and based on experience in other compar-

able Bank-assisted irrigation projects in Indonesia, averages Rp 130/man-day

at Cipamingkis and Rp 140/man-day at Jragung over the year under "with

/1 Annex 8, Report No. 1638a-IND; Indonesia, Appraisal of the Seventh Power

Project.

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project" conditions at full agricultural development, compared to a fullemployment market wage of Rp 350/man-day at Cipamingkis and Rp 300/man-day atJragung. Table 7.2 shows the total monthly labor requirements for crops byproject areas. Since project construction work would employ many locallandless laborers, and to reflect the low productivity of much of theirexisting work, unskilled labor used in civil works was valued at 50% of itsestimated actual cost for the economic analysis.

7.09 Investment Costs. As calculated for the economic analyses andexpressed in mid-1978 prices, the total investment costs are Rp 9.40 bil-lion /1 for Cipamingkis and RP 55.22 billion /2 for Jragung. Investmentcosts are net of taxes and transfer payments. In determining their rupiahvalue, foreign exchange costs were converted to rupiah using a standardconversion factor of 0.8 (para. 7.07). Investment costs have been adjustedto reflect the economic value of unskilled labor used in construction (civilworks reduced 10%, para. 7.08). Costs include physical contingencies, butexclude price contingencies. Other investment costs included are the infra-structure required for agricultural supporting services, such as paddy dryingfloors, paddy and fertilizer storages at village level, BRI and BUUD/KUDbuildings, and BUUD/KUD equipment. Estimated incremental annual O&M costswould vary from minus Rp 900 to Rp 3,500/ha for the main irrigation systemsand from Rp 1,000 to Rp 3,500/ha at the farm level. Estimated O&M of thepower generation is Rp 32 million per year /3, and estimated O&M of themunicipal and industrial water supply is Rp 1.45 billion per year /4.

7.10 Development Period. According to the project implementationschedules (Figure 3.1), development would occur as follows:

Cipamingkis. The diversion weir would be completed in April1982, and the 1982 dry-season crop would be the first grown underupgraded conditions. All the service area would be completedand ready for the 1982/83 wet season.

Jragung. Water storage would commence during the 1983/84 wetseason, and the 1984 dry season crop would be the first grownunder upgraded conditions. Power generation and urban water

/1 Includes Rp 0.05 billion for required infrastructure for agriculturalsupporting services.

/2 This includes construction of the reservoir, the hydroelectric powerplant and transmission lines (Rp 26.37 billion); the municipal andindustrial water offtake, treatment, transmission and distribution works(Rp 28.78 billion); and infrastructure for agricultural supportingservices (Rp 0.07 billion).

/3 This includes the hydroplant operation, and transmission and distri-bution of the power.

/4 This includes water treatment costs; pumping from the treatment plantto Semarang; and water distribution operations.

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supply would also commence in 1984, with 50% of annual totalpower and water supply benefits being realized that year.Benefit flows would reach 100% for power in 1985; and forwater supply 67% in 1985, 83% in 1986, and 100% in 1987.

Beginning with the first crop grown under upgraded conditions, farmers wouldachieve the projected yield levels over five years in equal installments.Cipamingkis would reach full development in 1987 and Jragung in 1988.

7.11 Salvage Values. At Jragung the economic life of several of thestructures would be considerably longer than the period over which theeconomic analysis has been conducted (35 years). Thus salvage values equalto 67% of the original cost of the dam, and 33% of the water treatment plantwere added to the flow of economic benefits in year 35.

7.12 Economic Rate of Return. Using the foregoing assumptions and dis-counting project costs and benefits over 35 years the economic rates ofreturn are 13% for Cipamingkis, and 12% for Jragung (Table 7.3). The weightedaverage "rate of return" for the entire project would be 12%.

7.13 Sensitivity Analysis. During implementation the most likelyproblems the project would encounter are construction delays and cost overruns.Thus the sensitivity of the rates of return were tested to these variables,including three and five year delays in the commencement of Jragung damconstruction, plus a 25% reduction in total benefits should farmers notrealize the projected commodity prices, cropping yields and/or intensities.The following table shows the results of the analysis:

Parameter varied Cipamingkis Jragung

…____ _ …(%) …_______

Base estimate 13 12Construction cost increased by 20% 11 9Commencement of dam constructionand benefit flow delayed:three years - 11five years - 10

Total benefits decreased 25% 10 8Total benefits increased 25% 16 16

Under all adverse conditions tested, the economic rates of return fall below12%, which demonstrates the need to keep costs and benefits at or nearpresent projections, and to keep to the proposed construction schedule. Thebenefits estimated to flow from the proposed works at Jragung are contingentupon the dam being constructed. However, in none of the cases tested wouldthe rate of return fall below 8%, while on the other hand, if the level ofbenefits are 25% higher than forecasted, the rates of return would be around25-33% higher.

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7.14 Risks. No major management or organizational problems are expectedin the implementation of the project. Rapid inflation over the last severalyears led to sizeable cost overruns on projects initiated in the early 1970s.Inflation is now more nearly under control, but provisions for price increasesare greater for this project and other projects recently financed by the Bankthan in earlier projects.

Table 7.1: ECONOMIC ANALYSIS - NET VALUE OF AGRICULTURAL PRODUCTION AT FULL PROJECT DEVELOPMENT /a

Production

Farm-gate Gross value Production Net value of net value in Imputed Net benefit inArea Yield price of production costs production project area labor cost project area

('000 ha) (ton/ha) (Rp'000/ton) ------------- (Rp'000/ha) ------------- -------------- (Rp million) -------------

CipamingP is

Future Without ProlectWet season - Rainfed rice 2.0 2.0 102 204 46 158 316

- Irrigated rice 5.6 2.9 102 296 64 232 1,299

Dry season - Irrigated rice 1.0 1.8 102 184 51 133 133

- Red pepper 1.5 1.2 300 360 29 331 497

- Soybean 0.5 0.4 193 77 13 64 32

Total 2.277 241 2.036

Cropping intensity: 139

Future With Project

Wet season - Irrigated rice 7.6 4.2 102 428 84 344 2,614

Dry season - Irrigated rice 2.0 4.2 102 428 79 349 698

- Red pepper 2.0 1.8 300 540 45 495 990

- Soybean 1.0 0.6 193 116 21 95 95

Total 4.397 327 4.070

Cropping intensity: 166X-

Incremental Benefits from Project Area 2.120 86 2,034

jragung

Future Without Prolect

Wet season - Rainfed rice I /b 1.8 1.4 102 143 31 112 202- Irrigated rice 8.7 4.0 102 408 79 329 2,862

Dry season - Tobacco 2.5 0.25 800 200 74 126 315- Corn 3.5 0.9 68 61 25 36 126

Total 3505 432 3.073

Cropping intensity: 157

Future With Project

Wet season - Rainfed rice I 1.8 1.9 102 194 42 152 274

- Irrigated rice 8.7 4.0 102 408 79 329 2,862

Dry season - Irrigated rice 8.3 4.3 102 439 80 359 2,980

Total 6.116 569 5,547

Cropping intensity: 179

Incremental Benefits from Project Area 2.611 137 2.474

/a Full agricultural development occurs in 1987 at Cipamingkis, and 1988 at Jragung.

Rainfed rice I refers to the area which the project protects from floods.

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Table 7.2: TOTAL MONTHLY CROP LABOR REQUIREMENTS('000 man-days)

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

('000 ha)

Cipamingkis

Wet SeasonRainfed rice P 2.0 64 56 18 40 38 20 - - - - 40 64 340

W 2.0 64 56 18 40 38 20 - - - - 40 64 340

Irrigated rice P 5.6 196 185 73 157 106 56 - - - - 112 179 1,064

W 5.6 207 196 84 168 118 56 - - - - 112 179 1,120

W 7.6 266 274 266 266 205 - - - - - 152 243 1,672

Dry SeasonIrrigated rice P 1.0 - - - 20 43 42 20 30 25 - - - 180

P 1.0 - - - 20 45 45 22 33 25 - - - 190

W 2.0 - - 20 84 110 60 60 106 - - - - 440

Red pepper P 1.5 - - - - - 45 30 30 45 45 - - 195

W 1.5 - - - - - 45 30 30 45 45 - - 195

W 2.0 - - - - - 60 50 40 60 70 - - 280

Soybean P 0.5 - - - 5 12 9 7 11 11 - - - 55

W 0.5 - - - 5 12 9 7 11 11 - - - 55

W 1.0 - - 10 25 21 16 25 23 - - - - 120

Total P 10.6 260 241 91 222 199 172 57 71 81 45 152 243 1,834

W 271 252 102 233 213 175 59 74 81 45 152 243 1,900

W 266 274 296 375 336 136 135 169 60 70 152 243 2,512

Jragung

Wet SeasonRainfed rice I P 1.8 68 59 22 36 34 18 - - - - 40 65 342

W 1.8 68 59 22 36 34 18 - - - - 40 65 342

w 1.8 54 47 21 36 40 21 - - - - 40 65 324

Rainfed rice II P 4.3 129 103 39 86 82 43 - - - - 94 155 731

Irrigated rice P 4.4 145 132 57 119 84 44 - - - - 97 158 836

w 8.7 287 278 305 305 235 - - - - - 191 313 1,914

W 8.7 287 278 305 305 235 - - - - - 191 313 1,914

Dry SeasonIrrigated rice W 8.3 - - 83 349 456 249 249 440 - - - - 1,826

Tobacco P 2.5 - - - - 125 110 45 83 125 137 - - 625

W 2.5 - - - - 125 110 45 83 125 137 - - 625

Corn P 2.0 - - - 20 38 18 32 32 - - - - 140

W 3.5 - - - 35 66 32 56 56 - - - - 245

Total P 15.0 342 294 118 261 363 233 77 115 125 137 231 378 2,674

W 16.5 355 337 327 376 460 160 101 139 125 137 231 378 3,126

W 18.8 341 325 409 690 731 270 249 440 - - 231 378 4,064

Table 7.3: ECONOMIC COSTS AND BENEFITS(Rp billion)

_ Capital cost _ O&M costs Total Incremental prolect benefitsYear Dam Water supply Irrigation Power Water supply annual cost Irrigation Power Water supply Dredging Total

Jragung

1 (1978) 0.48 0 0 0 0 0.48 0 0 0 0 02 (1979) 1.01 0 0 0 0 1.01 0 0 0 0 03 (1980) 1.09 0 0 0 0 1.09 0 0 0 0 04 (1981) 2.86 4.02 0 0 0 6.88 0 0 0 0 05 (1982) 4.69 7.59 0 0 0 12.28 0 0 0 0 06 (1983) 7.14 8.14 0 0 0 15.28 0.01 0 0 0 0.017 (1984) 6.82 3.48 0.07 0.01 0.75 11.13 0.51 0.47 2.87 0.05 3.908 (1985) 2.35 2.78 0.07 0.03 1.00 6.23 1.00 0.94 3.83 0.10 5.879 (1986) 0 2.78 0.07 0.03 1.20 4.08 1.50 0.94 4.79 0.10 7.3310 (1987) 0 0 0.07 0.03 1.45 1.55 1.99 0.94 5.74 0.10 8.77

11-34 (1988-2011) 0 0 0.07 0.03 1.45 1.55 2.47 0.94 5.74 0.10 9.2535 (2012) 0 0 0.07 0.03 1.45 1.55 18.18 0.94 7.69 0.10 26.91

Economic rate of return: 12%

Incrementalproject

Year Capital O&M Total benefits

Cipamingkis

1 (1978) 0.99 0 0.99 02 (1979) 2.25 0 2.25 03 (1980) 2.73 0 2.73 04 (1981) 2.42 0 2.42 05 (1982) 1.01 0.04 1.05 0.226 (1983) 0 0.05 0.05 0.637 (1984) 0 0.05 0.05 1.038 (1985) 0 0.05 0.05 1.449 (1986) 0 0.05 0.05 1.84

10-35 (1987-2012) 0 0.05 0.05 2.03

Economic rate of return: 13%

- .50 -

8. AGREEMENTS REACHED AND RECOMMENDATION

8.01 During negotiations, agreement has been reached with the Governmenton the following points:

(a) GOI would proceed with the construction of Jragung Dam in accord-ance with a time schedule to be agreed between the Borrower and theBank to ensure the full realization of benefits contemplated by theinclusion of preliminary works in this project (para. 1.22);

(b) prior to the initiation of feasibility studies for the 20,000 hairrigation area, and the detailed designs of flood control plansfor the lower Cimanuk, Cipanas and Ciwaringin rivers, the Borrowershall obtain the approval of the Bank (para. 3.19);

(c) to minimize late construction starts requiring some financing bythe GOI, invitations to bid would be issued as bid documents arecompleted, and bids would be received and processed without waitingfor the project implementation budget (DIP) to be signed, butcontracts would be awarded only after the DIP is approved; andprice escalation clauses would be included in local civil workscontracts extending beyond one year (para. 3.34);

(d) the Jatiluhur Authority, PROSIDA, Proyek Hidrologi and ProyekCimanuk each would: (i) maintain separate accounts for theproject; (ii) engage auditors aceptable to the Bank to audit theseaccounts; and (iii) submit to the Bank audited financial statementswithin six months of the end of each fiscal year, together with theauditor's comments and opinions (para. 3.36);

(e) GOI would consult with the Bank before appointing a replacementfor the President Director of the Jatiluhur Authority; and theGeneral M4anagers of PROSIDA, Proyek Hidrologi and Proyek Cimanukand would cause the project implementing agencies to be adequatelystaffed at all times with competent and qualified personnel(para. 4.01);

(f) GOI would engage advisors to Proyek Hidrologi on: (i) hydro-meteorology; (ii) hydrology; (iii) sedimentation; (iv) hydrometricautomatic data processing equipment; and to Proyek Cimanuk,(v) river management and control by November 30, 1978 (para. 4.09);

(g) All other consultants required for design and construction, devel-opment of a master plan, feasibility studies, and review andcompletion of plans and designs would be engaged by November 30,1978 (para. 4.09);

(h) GOI shall cause the DGWRD to appoint a panel of consultants,whose qualifications and experience shall be acceptable to theBank, to review the planning, design and construction of JragungDam (and any additional dams as may be agreed between the Borrowerand the Bank) throughout the period of planning, design and con-

- 51 -

struction of such dams, to ensure the quality of their designs and

safety, and cause such panel to be consulted prior to the execu-

tion of all major changes in the design or construction of any of

the said dams (para. 4.10);

(i) GOI would take the necessary steps to ensure that adequate credit

and agricultural inputs (including fertilizer, agricultural chem-

icals and certified seed) are made available at the village level

in the Cipamingkis subproject area and assist in the provision of

drying and storage facilities (para. 4.13);

(j) a water-user association would be formed for each tertiary unit in

the Cipamingkis subproject area to participate in the unit's

construction and to take over its operation and maintenance after

project completion (para. 4.14);

(k) adequate O&M funds, adjusted to keep pace with inflation and annual

needs, would be allocated to all Bank-assisted irrigation systems

in future years; GOI would take the necessary steps to ensure that

at least half of the budgeted O&M funds would be released to

subprojects by August 15 of each year and the balance, in equal

quarterly installments thereafter, until the total amounts are

fully released; to upgrade the standard of O&M services and to effec-

tively utilize the available funds, GOI would progressively

increase the number of qualified O&M personnel in the Bank-assisted

projects until the additional numbers to be established by GOI in

consultation with the Bank are employed; and GOI would inform

the Bank by December 31 of each year of the proposed number of O&M

personnel and per hectare O&M budget for each subproject; and by

June 1 of each following year, it would submit the approved O&M

budget and by October 1, the staffing provisions (para. 4.17);

(1) adequate staff and funds, adjusted to keep pace with inflation and

actual needs, would be allocated to DPMA in future years to con-

tinue the operation and maintenance of the hydrologic measurement

stations (para. 4.18);

(m) GOI would ensure that the survey and evaluation of the economic and

social benefits of the project would be carried out by the survey

and evaluation services included in the Sixth Irrigation Project

(para. 4.19); and

(n) following the completion of the Cipamingkis subproject, the Govern-

ment would collect the adjusted IPEDA based on the increased

productivity of irrigated land for which an irrigation system is

rehabilitated or constructed following completion of the project;

the amounts to be collected would be sufficient to ensure sound O&M

practices and to recover a reasonable portion of the capital costs

during the project's useful life, taking into account farmers'

incentives and ability to pay; and it would submit to the Bank for

review every two years the IPEDA rates collected for different land

classes (para. 6.13).

- 52 -

8.02 With the above assurances, the project would be suitable for a Bankloan of US$31.0 million, with a 20-year maturity including a grace period of

5 years. The Borrower would be the Republic of Indonesia.

INDONESIA

IRRIGATION XI PROJECT

Cipamingkis Subproject

Cost Estimate

Foreign BaseLocal Foreign Total Local Foreign Total exchange cost---- (Rp million) ---- ---- (US$ million) ---- ---- (%)

Civil worksWeir 120 170 290 0.3 0.4 0.7 60 4Primary and secondary canals 470 570 1,040 1.1 1.4 2.5 55 15Canal structures 1,030 1,540 2,570 2.4 3.8 6.2 60 38Tertiary canals 700 460 1,160 1.7 1.1 2.8 40 17Drainage 60 60 120 0.1 0.2 0.3 50 2Access and inspection roads 80 90 170 0.2 0.2 0.4 50 2Office and housing 110 60 170 0.3 0.1 0.4 35 2

Subtotal civil works 2,570 2,950 5,520 6.1 7.2 13.3 54 80

Right-of-way 540 - 540 1.3 - 1.3 - 8

Vehicles and equipment 20 60 80 - 0.2 0.2 75 1

Consultants and training 70 300 370 0.2 0.7 0.9 80 6

Engineering and administration 260 70 330 0.6 0.2 0.8 20 5

Base cost estimate 3,460 3,380 6,840 8.2 8.3 16.5 50 100

Physical contingencies 890 890 1,780 2.1 2.2 4.3 50 25

Expected price increases 1,410 1,410 2,820 3.4 3.4 6.8 50 41

Total project cost 5,760 5,680 11,440 13.7 13.9 27.6 50 166

*__- P i

INDONESIA

IRRIGATION XI PROJECT

Jragung Dam Project

Cost Estimate - Initial Stage

Foreign BaseLocal Foreign Total Local Foreign Total exchange cost

---- Rp million ------- ------- US$ million ------- ------ % ------

Civil worksAccess road 250 250 500 0.6 0.6 1.2 50 22Diversion tunnel 340 410 750 0.8 1.0 1.8 55 33Base camp 290 290 580 0.7 0.7 1.4 50 26

Subtotal civil works 880 950 1,830 2.1 2.3 4.4 52 81

Right-of-way 80 - 80 0.2 - 0.2 - 4

Vehicles and equipment - 80 80 - 0.2 0.2 90 4

Consultants 50 200 250 0.1 0.5 0.6 80 7

Engineering and administration 60 20 80 0.2 - 0.2 20 4

Base cost estimate 1,070 1,250 2,320 2.6 3.0 5.6 52 100

Physical contingencies 280 300 580 0.7 0.7 1.4 52 25

Expected price increases 300 320 620 0.7 0.8 1.5 52 32

Total project cost 1,650 1,870 3.520 4.0 4.5 8.5 52 157

.~~~~~~~~~~~~~~~~~.,(D P M

m >D

INDONESIA

IRRIGATION XI PROJECT

Hydrologic Measurement Program

Cost Estimate

Foreign Base

Local Foreign Total Local Foreign Total exchange cost--- (Rp million) --- ---- (US$ million) ---- ------ % ------

Civil worksStation construction 260 400 660 0.6 1.0 1.6 60 30

Subtotal civil works 260 400 660 0.6 1.0 1.6 60 30

Vehicles and equipment 70 640 710 0.1 1.6 1.7 90 32

Consultants and training 120 500 620 0.3 1.2 1.5 80 28

Engineering and administration 170 40 210 0.4 0.1 0.5 20 10

Base cost estimate 620 1,580 2,200 1.4 3.9 5.3 74 100

Contingencies 80 250 330 0.2 0.6 0.8 74 15

Expected price increases 120 380 500 0.3 0.9 1.2 74 23

Total project cost 820 2,210 3,030 1.9 5.4 7.3 74 138

I D HLTMwXK""-

INDONESIA

IRRIGATION XI PROJECT

Cimanuk River Water Management Program

Cost Estimate

Foreign BaseLocal Foreign Total Local Foreign Total exchange cost- ------ Rp million ------- ------- US$ million ------- ------ % ------

Consultants 240 960 1,200 0.6 2.3 2.9 80 76

Vehicles and equipment 30 260 290 0.1 0.6 0.7 90 16

Engineering and administration 100 20 120 0.2 0.1 0.3 20 8

Base cost estimate 370 1,240 1,610 0.9 3.0 3.9 79 100

Physical contingencies 10 30 40 - 0.1 0.1 79 3

Total project cost 380 1,270 1,650 0.9 3.1 4.0 79 103

I-Ptx1X H m

m >

INDONESIA

IRRIGATION XI

Jragung Dam Subprolect

Cost Estimate - Total Prolect

Foreign BaseLocal Foreign Total Local Foreign Total exchange cost

- Rp million ------- ------- US$ million ------- ------ % ------

Civil worksJragung Dam

Embankment 4,870 5,960 10,830 11.7 14.4 26.1 55 54Spillway 490 590 1,080 1.2 1.4 2.6 55 5Outlet works 170 250 420 0.4 0.6 1.0 55 2Power plant 420 1,700 2,120 1.0 4.1 5.1 80 11Transmission line 30 140 170 0.1 0.3 0.4 80 1Tuntang diversion 170 250 420 0.4 0.6 1.0 55 2Access road 250 250 500 0.6 0.6 1.2 50 2Diversion tunnel 340 410 750 0.8 1.0 1.8 55 4Construction camp 290 290 580 0.7 0.7 1.4 50 3Road relocation 160 170 330 0.4 0.4 0.8 50 1Coffer dam 20 20 40 - 0.1 0.1 55 -

Subtotal civil works 7,210 10.030 17,240 17.3 24.2 41.5 58 85

Right-of-way 500 - 500 1.2 - 1.2 - 2

Vehicles and equipment - 120 120 - 0.3 0.3 100 1

Consultants 350 1,390 1,740 0.8 3.4 4.2 80 9

Engineering and administration 430 110 540 1.0 0.3 1.3 20 3

Base cost estimate 8,490 11.650 20,140 20.3 28.2 48.5 58 100

Physical contingencies 2,110 2,910 5,020 5.1 7.0 12.1 58 25

Expected price increases 7,220 9,960 17,180 17.4 24.0 41.4 58 85

Total prolect cost 17,820 24.520 42,340 42.8 59.2 102.0 58 210

ANNEX ITable 3

INDONESIA

IRRIGATION XI PROJECT

Expected Price Increases

Calendar Year1978 1979 1980 1981 1982 Total

Expected Annual Inflation Rate (%)

Civil works 14 12 10 8 8Equipment and services 8 8 8 7 7

Estimated Annual Expenditures ----------- US$ million -------------

Civil worksCipamingkis 1.7 4.1 4.9 4.2 1.7 16.6Jragung 0.9 1.9 2.0 0.7 - 5.5Hydrological measurement program 0.3 0.6 0.6 0.5 - 2.0

Subtotal 2.9 6.6 7.5 5.4 1.7 24.1

Equipment and ServicesCipamingkis 0.5 0.9 1.2 1.1 0.5 4.2Jragung 0.2 0.5 0.6 0.2 - 1.5Hydrological measurement program 0.6 1.2 1.2 1.1 - 4.1Cimanuk river water management

program 0.7 1.6 1.6 0.1 - 4.0

Subtotal 2.0 4.2 4.6 2.5 0.5 13.8

Expected Price Increases

Civil works 0.1 1.5 2.6 2.4 0.8 7.3Equipment and services - 0.4 0.8 0.7 0.3 2.2

Total 0.1 1.9 3.3 3.1 1.1 9.5

ANNEX 1Table 4

INDONESIA

IRRIGATION XI PROJECT

Estimated Schedule of Expenditures

Calendar Year

Total 1978 1979 1980 1981 1982

------------ (US$ million) ------------

Civil WorksCipamingkis 13.3 1.4 3.4 3.9 3.3 1.3

Jragung 4.4 0.7 1.5 1.6 0.6 -

Hydrological measurement program 1.6 0.3 0.4 0.5 0.4 -

Subtotal 19.3 2.4 5.3 6.0 4.3 1.3

Right-of-Way 1.5 0.3 0.7 0.3 0.2 -

Vehicles and Equipment 2.8 0.5 1.1 0.9 0.3 -

Consultants and Training 5.9 0.8 1.6 1.6 1.4 0.5

Engineering and Administration 1.8 0.3 0.5 0.5 0.4 0.1

Base cost estimate 31.3 4.3 9.2 9.3 6.6 1.9

Physical Contingencies 6.6 0.8 1.8 2.0 1.5 0.5

Excpected Price Increases 9.5 0.1 1.9 3.3 3.1 1.1

Total project cost 47.4 5.2 12.9 14.6 11.2 3.5

ANNEX ITable 5

INDONESIA

IRRIGATION XI PROJECT

Estimated Schedule of Disbursements

IBRD fiscal year Cumulative disbursementsand semester (US$'000 equivalent)

FY79First 500Second 3,500

FY80First 6,000Second 9,000

FY81First 12,500Second 16,000

FY82First 20,000Second 24,000

FY83First 27,000Second 30,000

FY84First 31,000

ANNEX 1Table 6

INDONESIA

IRRIGATION XI PROJECT

Proposed Allocation of Proceeds of Loan

Cost LoanTotal Foreign amount

… (US$ million) -------

I. Civil WorksJatiluhur Authority 13.3 7.2 13.1PROSIDA 4.4 2.3 4.3DPMA 1.6 1.0 1.6

Physical contingencies 2.4 1.3 -Expected price increases 5.4 2.9 -

Subtotal 27.1 14.7 19.0

II. Vehicles and EquipmentJatiluhur Authority 0.2 0.2 0.2PROSIDA 0.2 0.2 0.2DPMA 1.7 1.6 1.7DOR 0.7 0.6 0.7

Subtotal 3.0 2.9 2.8

III. Consultants, Field Investigationsand Start-Up Vehicles

Jatiluhur Authority 0.8 0.6 0.9PROSIDA 0.6 0.5 0.6DPMA 1.2 1.0 1.3DOR 2.9 2.3 3.1

Physical contingencies 0.4 0.2 -

Subtotal 5.9 4.6 5.9

IV. TrainingJatiluhur Authority 0.1 0.1 0.1DPMA 0.3 0.2 0.3

Subtotal 0.4 0.3 0.4

V. UnallocatedBalance of physical contingencies 3.8 2.1 0.9Balance of expected price increases 4.1 2.2 2.0Right-of-way acquisition 1.5 - -

Engineering and administration 1.8 0.4 -

Subtotal 11.2 4.7 2.9

Total 47.4 26.9 31.0

ANNEX 1Table 7

INDONESIA

IRRIGATION XI PROJECT

Vehicles and Equipment

Item Quantity Unit cost Total cost- …____ (US$) --

l. CipamingkisVehicles

Jeeps 12 7,000 84,000Motorcycles 25 640 16,000Bicycles 50 200 2,000

Subtotal 102,000

EquipmentSoil laboratory equipment L.S. 30,000 30,000Radio telecommunications

equipment L.S. 48,000 48,000Office equipment & supplies L.S. 20,000 20,000

Subtotal 98.000

Total 200,000

II. JragungVehicles

Jeeps 6 7,000 42,000Subtotal 42,000

EquipmentGeologic equipment L.S. 120,000 120,000Survey equipment L.S. 20,000 20,000Office equipment & supplies L.S. 18,000 18, 000

Subtotal 158,000

Total 200.000

III. Hydrologic Measurement ProgramVehicles

Station wagons (4 Wh-dr) 21 13,000 275,000Sedans 2 10,000 20,000

Subtotal 295.000

EquipmentHydrographic

Screamflow measurement /a 18 sets 4,000 72,000Water stage recorders 150 1,500 225,000Water sampling /b 18 sets 2,500 45,000Parts and supplies L.S. 88,000 88,000

ClimatologicClimatologic stations Ic 20 sets 9,500 190,000Recording rain gauges 40 1,250 50,000

HydrogeometricObservation well /d 20 sets 2,500 50,000Sore hole logger /e I set 50,000 50,000

Mobile water quality lab. 1 30,000 30,000Computer equipment /f 1 set 240,000 240,000Environmental quality equipment L.S. 200,000 200,000Printing machine 1 85,000 85,000Hi-speed copying machine 1 50,000 50,000Workshop equipment L.S. 10,000 10,000Office equipment & supplies L.S. 20,000 20,000

Subtotal 1.405,000

Total 1,700,000

IV. Cimanuk River Water Management ProtramVehicles

Jeeps 6 7,000 42,000Subtotal 42,000

EquipmentGeologic equipment L.S. 250,000 250,000Hydrographic equipment L.S. 75,000 75,000Survey equipment L.S. 100,000 100,000Soil laboratory L.S. 163,000 163,000Office equipment & supplies L.S. 70,000 70,000

Subtotal 658,000

Total 700,000

/a Includes current meters, lines, reels, cranes, boats, etc., for wading andlight hand line measurements as well as for heavy-duty measurement.

/b Includes two hand samplers and one heavy-duty sampler in each set.Ic Includes equipment to obtain complete climatological data (precipitation,

temperature, evaporation, wind speed and relative humidity)./d Includes water level sensor and recorder.Ie Includes electric resistivity, potential, nuclear and caliper logging and

flow measurement./f Includes (2)D-MAC pencil followers; (2)D-MAC control consoles; (2) IBM 029

cardpunch machines; (2) Datagrid digitizers; (5) IBM composers; and mis-cellaneous spare parts.

INDONESIA

IRRIGATION XI PROJECT

Crop Production Costs: Physical Inputs

C I P A M I N K I S J R A G V N GInputs/ha Wet Season Dry Season Wet Season Dry SeasonRainfed rice Irrigated rice Irrigated rice Red pepper Soybeans Rainfed rice Irrigated rice Irrigated rice Tobacco CornI II

PresentCultivation (animal days) 20 20 15 20 10 17 17 17 15 10Seed (kg) 40 40 40 0.4 30 50 40 50 50 60Fertilizer (kg)

125 75Urea 50 100 100 25 40 100 125TSP 10 25 25 20 10 10 25Organic compost 500Agrochemicals

(it) insecticides 1 1 2.5 0.5 0.5 2(gr) zinc phosphide 50 50Harvesting (Z crop yield/ha) 3 3 3 3 3 3 3 3Interest (% month) /a 2 2 2 2 2 2 2 2 2 2

Future Without ProjectCultivation (animal days) 20 20 20 20 10 17 17 15 10Seed (kg) 40 40 40 0.4 30 50 30 50 60Fertilizer (kg) 60 120 100 25 200 125 75Urea 10 30 25 25 10 50 125TSP

Organic compost 500Agrochemicals

(It) insecticides 1 1.5 1.5 2.5 0.5 1.5 2 1(gr) zinc phosphide 50 50 50

Harvesting (% crop yield/ha) 3 3 3 3 3 3 3Interest (% month) /a 2 1 1 2 2 2 1 2 2Future With ProjectCultivation (animal days) 20 20 20 10 17 17 17Seed (kg) 30 30 0.4 30 40 30 30Fertilizer (kg)

Urea 200 200 100 50 200 200TSP 50 50 25 35 15 50 50Agrochemicals(It) insecticides 2.5 2.5 2.5 2 1 2.5 2.5(gr) zinc phosphide 100 100 100 100 100Harvesting (% crop yield/ha) 3 3 3 3 3Interest (% month) /a 1 1 2 2 2 1 1

/a Rice - interest is charged on 90% (cash inputs - harvesting costs) for six months rainfed rice; for seven months irrigated rice.Red pepper & soybeans - interest is charged on 90% of cash inputs for three months.Tobacco - interest is charged on 90% (cash inputs - harvesting costs) for five monthsr

Hi1Corn - interest is charged on 90% (cash inputs - harvesting costs) for three months.

ANNEX 2Table 2

INDONESIA

IRRIGATION XI PROJECT

Monthly Crop Labor Requirements(man-day/ha)

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

CIPAMINGKISWet SeasonRainfed rice P /a 32 28 9 20 19 10 - - - - 20 32 170

w 32 28 9 20 19 10 - - - - 20 32 170

Irrigated rice P 35 33 13 28 19 10 - - - - 20 32 190W 37 35 15 30 21 10 - - - - 20 32 200W 35 36 35 35 27 - - - - - 20 32 220

Dry SeasonIrrigated rice P - - - 20 42 42 20 31 25 - - - 180

W - - - 20 45 45 22 33 25 - - - 190W - - 10 42 55 30 30 53 - - - - 220

Red pepper P - - - - - 30 20 20 30 30 130W - - - - - 30 20 20 30 30 130W - - - - - 30 25 20 30 35 140

Soybeans P - - - 10 23 18 14 23 22 - - - 110W - - - 10 23 18 14 23 22 - - - 110w - - 10 25 21 16 25 23 - - - - 120

JRAGUNGWet SeasonRainfed P 38 33 12 20 19 10 - - - - 22 36 190

rice I W 38 33 12 20 19 10 - - - - 22 36 190w 30 26 12 20 22 12 - - - - 22 36 180

Rainfedrice II P 30 24 9 20 19 10 - - - - 22 36 170

Irrigated rice P 33 30 13 27 19 10 - - - - 22 36 190W 33 32 35 35 27 - - - - - 22 36 220W 33 32 35 35 27 - - - - - 22 36 220

Dry SeasonIrrigated rice W - - 10 42 55 30 30 53 - - - - 220

Tobacco P - - - - 50 44 18 33 50 55 - - 250W - - - - 50 44 18 33 55 60 - - 260

Corn P - - - 10 19 9 16 16 - - - - 70W - - - 10 19 9 16 16 - - - - 70

/a P = PresentW = Future without projectW = Future with project

INDONESIA

ANNEX 2lRRICATION XI PROJECT Table 3

Crop Production Costs /a

C I P A M I N K I S J R A G U N GWet Season _ - _Dry Season Wet Season Dry Season

Rainfed rice Irrigated rice Irrigated rice Red pepper Soybeans I Rainfed rice It Irrigated rice Irrigated rice Tobacco Corn

PRESENTCash Inputs (Pp'000/ha)/bCultivation /c 20.0 (20.0) 20.0 (20.0) 15.0 (15.0) 12.0 (12.0) 0 0 15.3 (15.3) 15.3 (15.3) 15.3 (15.3) 13.5 (13.5) 9.5 (9.0)Seed 3.2 (2.6) 3.2 (2.6) 3.2 (2.6) 0.1 (0.1) 4.7 (3.9) 4.0 (3.3) 3.2 (2.6) 4.0 (3.3) 10.8 (10.8) 3.0 (2.4)Fertili-er 6.5 (4.3) 13.5 (8.9) 13.5 (8.9) 5.0 (5.0) 1.9 (1.4) 3.7 (2.5) 5.4 (3.6) 13.5 (8.9) 25.7 (17.8) 8.3 (5.3)Agrochenicals - - 4.2 (1.0) 4.2 (1.0) 10.3 (2.3) 2.1 (0.5) - - - (0) 2.1 (0.5) 8.2 (1.8) 0 (0)Harvesting 4.3 (3.5) 6.2 (5.1) 4.1 (3.3) - - - - 3.4 (2.7) 3.8 (3.1) 6.7 (5.5) 4.8 (4.8) 1.2 (1.0)Interest - (3.0) - (3.5) - (3.2) - (1.0) - (0.9) - (2.6) - (3.1) - (3.1) - (4.3) - (0.8)Other 1.1 (0.6) 1.9 (1.9) 2.0 (2.0) 1.6 (1.6) 2.3 (2.3) 1.6 (1.6) 2.3 (2.3) 1.4 (1.4) 2.0 (2.0) 2.4 (2.4)

Total cash inputs 35.0 (34.0) 49.0 (43.0) 42.0 (36.0) 29.0 (22.0) 11.0 (9.0) 28.0 (28.0) 30.0 (30.0) 43.0 (38.0) 65.0 (55.0) 24.0 (21.0)

Labor Inputs (nan-days/ha)Land preparation 40 40 40 25 25 45 45 45 60 10Planting 40 40 40 10 35 50 40 40 25 13Crop rnaagerent 50 60 55 35 20 55 45 55 45 25Harvesting 40 50 45 60 30 40 40 50 120 20

Total labor inputs 170 190 180 130 110 190 170 190 250 70

FUTURE WITHOUT PROJECTCash Inputs (Rp'000/ha)/b

Cultivation /c 20.0 (20.0) 20.0 (20.0) 15.0 (15.0) 12.0 (12.0) 0 0 15.3 (15.3) 15.3 (15.3) 13.5 (13.5) 9.0 (9.0)Seed 4.1 (3.2) 5.3 (4.2) 5.3 (4.2) 0.1 (0.1) 5.8 (4.6) 5.1 (4.1) 4.0 (3.2) 10.8 (10.8) 4.1 (3.2)Fertili-er 9.6 (7.7) 20.5 (16.4) 17.1 (13.7) 5.0 (5.0) 3.1 (2.5) 4.7 (3.8) 34.2 (27.3) 32.9 (26.3) 10.5 (8.4)Agroche.ical. 4.1 (0.9) 6.3 (1.5) 6.3 (1.5) 10.3 (2.3) 2.1 (0.5) - - 10.5 (2.5) 8.2 (1.8) 0 (0)Harvesting 6.1 (4.9) 8.9 (7.0) 5.5 (4.4) - - - - 4.3 (3.4) 12.2 (9.7) 6.0 (6.0) 1.8 (1.5)Interest - (3.2) - (2.9) - (2.4) - (1.0) - (1.4) - (2.8) - (3.2) - (5.0) - (1.3)Other 2.1 (2.1) 3.0 (3.0) 1.8 (1.8) 1.6 (1.6) 2.0 (2.0) 1.6 (1.6) 2.8 (2.8) 2.6 (2.6) 1.6 (1.6)

Total cash inputs 46.0 (42.0) 64.0 (55.0) 51.0 (43.0) 29.0 (22.0) 13.0(11.0) 31.0 (31.0) 79.0 (64.0) 74.0 (66.0) 27.0 (25.0)

Labor Inputs (nan-days/ha)Land preparation 40 40 40 25 25 45 45 60 10Planting 40 40 40 10 35 50 40 25 15Crop tnaagement 50 65 65 35 20 55 75 45 25Harvesting 40 55 45 60 30 40 60 130 20

Total labor inputs 170 200 190 130 110 190 220 260 70

FUTURE WIT0 PROJECTCash Inputs (Rp'000/h.)/b

Cultivation /c 20.0 (20.0) 15.0 (15.0) 12.0(12.0) 0 0 15.3 (15.3) 15.3 (15.3) 15.3 (15.3)Seed 4.0 (3.2) 4.0 (3.2) 0.1 (0.1) 6.6 (5.1) 4.7 (3.7) 4.0 (3.2) 4.0 (3.2)Fertlli-er 34.2 (27.3) 34.2 (27.3) 17.1(13.7) 4.3 (3.4) 8.8 (7.1) 34.2 (27.3) 34.2 (27.3)Agrochenicals 10.5 (2.5) 10.5 (2.5) 10.3 (2.3) 8.2 (1.8) 4.4 (1.1) 10.5 (2.5) 10.5 (2.5)harvesting 12.9 (10.2) 12.9 (10.2) - - - - 5.8 (4.6) 12.2 (9.7) 13.2 (10.4)Interest - (3.4) - (3.4) - (2.4) - (0.8) - (3.2) - (3.2) - (3.5)Other 2.4 (2.4) 2.4 (2.4) 5.5 (5.5) 1.9 (1.9) 3.0 (3.0) 2.8 (2.8) 2.8 (2.8)

Total cash inputs 84.0 (69.0) 79.0 (64.0) 45.0(36.0) 21.0 (13.0) 42.0 (38.0) 79.0 (64.0) 80.0 (65.0)

Labor Inputs (nan-days/ha)Land preparation 40 40 25 25 45 45 45Planting 40 40 10 35 40 40 40Crop nanag..emt 80 80 40 25 50 70 70harvesting 60 60 65 35 45 65 65

Total labor inputs 220 220 140 120 180 220 220

/a Economic prices, based on current and projected world market prices for rice, soybeans, corn and fertilizers. Figuresin parenthesis are financial prices. Prices used are shown in Chapter 6, Tables 6.1 and 6.2. All prices are at constantnid-1978 levels.

/b Physical inputs are given in Asses 2, Table 1.

/c Cost of contracting a pair of bullocks aod as operator is Rp 1,000/animal day in Cipaingkis and Rp 900/anial day in Jragung.

INDONESIA

IRRIGATION XI PROJECT

Crop Budgets /a

C I P A M I N K I S J R A G U N GWet Season Dry Season Wet Season Dry Season

Rainfed rice Irrigated rice Irrigated rice Red pepper Soybeans Rainfed rice Irrigated rice Irrigated rice Tobacco CornI II

PRESENT

Yield (ton/ha) 1.8 2.6 1.7 1.2 0.4 1.4 1.6 2.8 0.2 0.8Farm-gate price (Rp'000/ton) 65 65 65 300 130 65 65 65 800 40Gross value ofproduction (Rp'000/ha) 117.0 169.0 111.0 360.0 52.0 91.0 104.0 182.0 160.0 32.0

Production costs, excl. labor(Rp'OOO/ha) 34.0 43.0 36.0 22.0 9.0 28.0 30.0 38.0 55.0 21.0

Net value of productionexcl. labor (Rp'000/ha) 83.0 126.0 75.0 338.0 43.0 63.0 74.0 144.0 105.0 11.0

Labor requirements(man-days/ha) 170 190 180 130 110 190 170 190 250 70

FUTURE WITHOUT PROJECT

Yield (ton/ha) 2.0 2.9 1.8 1.2 0.4 1.4 4.0 0.25 0.9Farm-gate price (Rp'000/ton) 81 81 81 300 154 81 81 800 54Gross value of

production (Rp'000/ha) 162.0 235.0 146.0 360.0 62.0 113.0 324.0 200.0 49.0Production costs, excl. labor

(Rp'000/ha) 42.0 55.0 43.0 22.0 11.0 31.0 64.0 66.0 25.0Net value of production

excl. labor (Rp'000/ha) 120.0 180.0 103.0 338.0 51.0 82.0 260.0 134.0 24.0Labor requirements

(man-days/ha) 170 200 190 130 110 190 220 260 70

FUTURE WITH PROJECT

Yield (ton/ha) 4.2 4.2 1.8 0.6 1.9 4.0 4.3Farm-gate price (Rp'000/ton) 81 81 300 154 81 81 81Gross value of

production (Rp'000/ha) 340.0 340.0 540.0 92.0 154 324.0 348.0Production costs, excl. labor

(Rp'OO0/ha) 69.0 64.0 36.0 13.0 38 64.0 65.0Net value of production

excl. labor (Rp'000/ha) 271.0 276.0 504.0 79.0 116 260.0 283.0Labor requirements

(man-days/ha) 220 220 180 120 220 220

/a Calculated using financial prices and costs based on Annex 2, Table 3 and Table 6.2.

sz

INDONESIA

IRRIGATION XI PROJECT

Farm Budgets

C I P A M I N K I S J R A G U N G0.2 ha farm 0.5 ha farm 1.2 ha farm 0.5 ha Farm

Present W project/a W project Present W project W project Present W project W project Present W project W project

Cropped area (ha)Wet season - rainfed rice - - - 0.17 0.17 0 0.42 0.42 - 0.25 - -

- irrigated rice 0.20 0.20 0.20 0.33 0.33 0.50 0.78 0.78 1.20 0.25 0.50 0.50Dry season - irrigated rice 0.10 0.10 0.11 - - 0.10 - - 0.12 - - 0.48

- soybeans - - 0.03 0.03 0.03 0.13 0.19 0.19 0.48 0.15 0.15 -(tobacco)L

- red pepper 0.02 0.02 0.05 0.15 0.15 0.18 0.13 0.13 0.14 0.12 0.20 -(corn)

Total cropped area 0.32 0.32 0.39 0.68 0.68 0.91 1.52 1.52 1.94 0.77 0.85 0.98Cropping intensity (1) 160 160 195 136 136 182 127 127 162 154 170 195

Crop Production (kg)Paddy 690 760 1,300 1,160 1,300 2,520 2,780 3,100 5,540 1,050 2,000 4,060Soybean - - 20 10 10 80 80 80 290 (t) 30 40 -Red pepper 20 20 90 180 180 320 160 160 250 (c) 100 180 -

Farm Income (Rp'000)Gross value of production /b 52 69 135 131 161 313 238 310 569 96 202 329Production costs, excl. labor /b 13 16 23 24 29 49 52 65 102 27 47 63Hired labor cost - harvesting /c 5 7 13 9 13 24 22 30 54 8 19 39

- other /d - - - - - - 1 1 14 -Net value of production 34 46 99 98 119 240 163 214 399 61 136 227

Land tax (IPEDA) /e 1 1 3 3 3 7 8 8 16 2 5 7

O&M costs, farm irrigationsystems /f - - I - - 2 1 1 5 - 2 2

Payments to landlord 17 23 49 49 59 120 82 107 206 30 68 113

Net crop income- owner-operator 33 45 96 95 116 233 154 205 378 59 129 218- sharecropper 17 23 49 49 60 119 80 106 190 31 67 113

Other income /h 70 70 70 60 60 50 40 40 20 50 50 40

Total net farm income- owner operator 103 115 166 155 176 283 194 245 398 109 179 258- sharecropper 87 93 119 109 120 169 120 146 210 81 117 153

Total labor requirements (man-day) 57 62 81 117 124 180 25 270 373 141 163 216

/a U - Future without project; W - Future with project./b Based on Table 4, Crop Budgets./c Calculated at 12% of gross paddy production./d Based on maximum 40 man-days/month farm of family labor; and at Cipamingkis an average wage of Rp 350/man-day./e Average annual land tax rates/ha are Rp 7,000/ha now and Rp 13,000/ha with the project at Cipamingkis; and Rp 4,000 now, Rp 10,000 without the project,

and Rp 14,000/ha with the project at Jragung./f For tertiary and quaternary units, annual O&M/ha is estimated at Rp 500 now and Rp 4,000 with the project at Cipamingkis and Rp 3,000 and Rp 4,000 at :Jragung.

¢ z/g Landlord and sharecropper share equally gross production less harvesting and other production costs, except for the land tax which the landlord pays, fa xand l-bor hich the sharecropper provides. /h Based on interviews and Bank surveys./i Tobacco and corn represent the secondary crops at Jragung.

ANNEX 3

INDONESIA

IRRIGATION XI

Schedule of Early Events

Activity Target date

General

1. Appoint consultants

(a) Cipamingkis Subproject Nov. 1978(b) Jragung Subproject " 1978(c) Cimanuk River Water Management Program " 1978(d) Hydrologic Measurement Program " 1978

2. Employ advisors

(a) Directorate of Rivers Nov. 1978(b) Directorate of Hydraulic Engineering " 1978

Cipamingkis Subproject

1. Initial design of tertiary systems Oct. 19782. Complete review and detailed design of weir

and primary and secondary canals Dec. 19783. Invite bids and award first construction contract Oct. 1978-July 1979

Jragung Subproiect

1. Complete detailed designs June 19782. Invite bids and award first construction contract July-Oct. 1978

Hydrologic Measurement Program

1. Civil works

(a) Prepare designs and specifications fortypical measurement stations Oct.-Dec. 1978

(b) Invite bids and award contract forconstruction of first group ofmeasurement stations Jan.-Mar. 1979

2. Equipment

(a) Prepare specifications for measurementequipment Oct.-Dec. 1978

(b) Invite bids and award contracts formeasurement equipment Jan.-Mar. 1979

ANNEX 4Page 1

INDONESIA

IRRIGATION XI

Related Documents and Data Available in the Project File

A. General reports and studies relating to the agriculture and irrigationsector.

A.1. World Bank, "Indonesia Development Prospects and NeedsBasic Economic Report," Report No. 708-IND, April 15, 1975.

B. General reports and studies relating to the project.

B.l. Republic of Indonesia, Jatiluhur Authority, "Summary of1972 Report on Cipamingkis Irrigation Project byP. T. Indah Karya," Indonesia, September 1976.

B.2. Republic of Indonesia, Jatiluhur Authority, and P. T. IndahKarya, "Data on Hydrology for Cipamingkis IrrigationProject," Indonesia, 1972 (Extract from Report).

B.3. Republic of Indonesia, Jatiluhur Authority, "General Plan,Cipamingkis Irrigation Area, Conclusion and Recommendations,"(translated from Indonesian), 1972.

B.4. Republic of Indonesia, Jatiluhur Authority, Directorateof Irrigation, Sub-Directorate of Agricultural Development."Agricultural Develoment of Cipamingkis Project Area," Indonesia1976, (Including supplement).

B.5. Republic of Indonesia, Jatiluhur Authority, "Construction CostEstimate for Cipamingkis Irrigation Project, Renewed andRevised in August 1976."

B.6. Republic of Indonesia, Jatiluhur Authority, "Report on CipamingkisIrrigation Project," July 1977.

B.7. Republic of Indonesia, Jatiluhur Authority, "Report on CipamingkisIrrigation Project, Annexes, Tables and Drawings," July 1977.

B.8. Republic of Indonesia, Jatiluhur Authority, "Hydrology and WaterBalance Computation," December 1977.

ANNEX 4Page 2

B.9. Republic of Indonesia, Directorate General of Water ResourcesDevelopment; Kingdom of Netherlands, Directorate of InternationalTechnical Assistance; and NEDECO, "Jratunseluna Basin DevelopmentProject, Explanatory Note on the Rehabilitation of the MainDrainage Systems in the Plain of East Semarang, Part 1," May1974.

B.10. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Upgraded FeasibilityReport," December 1976.

B.11. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Upgraded FeasibilityReport, Executive Summary," December 1976.

B.12. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Upgraded FeasibilityReport, Appendix 1, Economics," September 1976.

B.13. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Upgraded FeasibilityReport, River Diversion Works, Cost Estimate," September1977.

B.14. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Quarterly ProgressReport No. 1," June 1977.

B.15. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Jragung Dam,Multi-Purpose Irrigation, Flood Control, Hydro Electric andMunicipal and Industrial Water Supply Project, Quarterly ProgressReport No. 2," September 1977.

B.16. Burns and McDonnell and Trans-Asia Engineering Associates, Inc.,"Water Supply Master Plan for the City of Semarang, Indonesia,"November 1976.

ANNEX 4Page 3

B.17. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "First-PhaseWater Supply Feasibility Study for the City of Semarang, Indonesia,"November 1976.

B.18. Republic of Indonesia, Directorate General of Water ResourcesDevelopment and Engineering Consultants Inc. (ECI), "Appendix -Supplemental Information for the Water Supply Master Plan and theFirst-Phase Water Supply Feasibility Study for the City of Semarang,Indonesia," November 1976.

B.19. Republic of Indonesia, Directorate General of Water ResourcesDevelopment, Institute of Hydraulic Engineering; and G. W. Caughran,"A Programme for Obtaining Accurate Streamflow Records in Indonesia,"September 1976.

B.20. Republic of Indonesia, Directorate General of Water ResourcesDevelopment, Institute of Hydraulic Engineering; and G. W. Caughran,"A Programme for Obtaining Accurate Streamflow Records in Indonesia,""Appraisal and Recommendations for Hydrometry in Jawa Timor andMadura," March 1977.

B.21. Republic of Indonesia, Directorate General of Water ResourcesDevelopment, Institute of Hydraulic Engineering, "Applicationfor Assistance for the Improvement of Hydrologic Data Collection,Processing and Evaluation in Indonesia," October 1977.

B.22. Republic of Indonesia, Director General of Water Resources,Directorate of Rivers, "Master Plan of Cimanuk River Basin Develop-ment," July 1977.

B.23. Republic of Indonesia, Director General of Water Resources,Directorate of Rivers, "Lower Cimanuk River Flood Control andRiver Improvement," July 1977.

B.24 Republic of Indonesia, Director General of Water Resources,Directorate of Rivers and Gadjah Mada University, "Project Reporton Lower Cimanuk Flood Control and River Improvement," Main Reportand Executive Summary, September 1977.

B.25. Republic of Indonesia, Director General of Water Resources,Directorate of Rivers, "Master Plan of Cimanuk River Basin Develop-ment," September 1977.

ANNEX 4Page 4

B.26. Republic of Indonesia, Director General of Water Resources,Directorate of Rivers, "Financial Proposal: Construction LowerCimanuk Flood Control and Master plan for Cimanuk River Basin,"October 1977.

B.27. Republic of Indonesia, Director General of Water Resources,Directorate of Rivers, "Master Plan of Cimanuk River Basin Deve-lopment, Additional Data/Explanation for IBRD Team," October1977.

C. Selected Working Papers

C.l. Cost Estimates, Working Papers

C.2. Price Structure for Fertilizers and Soybeans

C.3. Economic Analysis - Net Value of Producton at Full ProjectDevelopment, Economic Cost and Benefits.

INDONESIAIRRIGATION Xi

CIPAMINGKIS AND JRAGUNG SUBPROJECTSIMPLEMENTATION SCHEDULE

1978 1979 1980 1981 1982 1983 1984

Calender YearsCIPAMINGKIS SUBPROJECT

WEIR, PRIMARY & SECONDARY CANALS

DETA I LED DESIGN .m,

TENDER AND AWARD

CONSTRUCTION -111TERTIARY CANALS AND DRAINAGE

DETAILED DESIGN

TENDER AND AWARD

CONSTRUCTION - -_JRAGUNG DAM SUBPROJECT ~-LOAN 1

INITIAL STAGE

TENDER AND AWARD

CONSTRUCTION

JRAGUNG DAM

DETAILED DESIGN

TENDER AND AWARD _I i

CONSTRUCTION C

-- LOAN 2

World B3ank-18590 F

INDONESIAIRRIGATION Xi

WATER RESOURCES ORGANIZATION

MINISTER OF PUBLIC WORKSAND ELECTRIC POWER

DIRECTOR-GENERAL OFWATER RESOURCES

DEVELOPMENT

|DIRECTCORATE OF | | DIRECTORATE OF I |DIRECTORAT_EOF|PLANNING AND DIRECTORATE DIRECTORATE OF DIRECTORATE IR IGTO HYDRAULIC

|PROGAMMINGAN| | OF RIVER l l SWAMPS OF IRRIGTIO IRRIGAT ION ENINERN

PROYEH| CIMANUK l l PROSIDA HIDROLOGI

Wordd Bank-18765

INDONESIA PROJECT XIPROSIDA MANAGEMENT ORGANIZATION

[DIR. GENERAL|WATER RESOURCES

DEVELOP.

| EXPERTS |- * NNA. _ ORYROUP

CHIEF CHIEF CHEENGINEERING OP. & MAIN. ADNMIIT

|ENG./COiNSTRUc. | |ENG.13uRV.-DES.

ASST.T A O SST. FOR ASST. FOR FORGEN.M SUPERV. CONST.SURVEY . & M. NCE

ASST. FOR _ ASS,T.FOR | ASST. FOR | ASST. FORBUILDING/FAC| DEIGN HYDROLOG. | GEN. AFFAIR

MECH. EQUIPM. | BUDGET/REP. | AGRICULT | LOGISTIC AFFAIR|~~ ~~~~~~~~~~~~~~~~~~~ST FOR.FO

BUDGET/REPORT.

sue.PROJECT SUB. PROJECTS SUB. PROJECTS SUB. PROJECT SUB. PROJECT M(E-SERIES) A-SERIES B-SERIES C-SERIES D-SERIES ->

World Bank-16008

INDONESIAIRRIGATION XI

Directorate of Hydraulic Engineering Organization

Director ofHydraulic Engineering

r Sub-Di S-b-~~Division SbDv

[m X 3~~~~~~~~~~~~~~~~~~~~~~~~~~~~~evc Dimnto Ser cHydrometrics General Hydrau- Technical Geology Documentation

Section Ilic Section Section Section

Groundwater River Hydraulic Soil MechanicDismntoHydrology Section Sechan Section

Section

Water Quality Estuary & Shore |. Data Collection (Chemistry) Section Hydraulic Ston Structure Section D Section

GeneralHydrology

World Bank -18513

INDONESIAIRRIGATION Xi

Directorate of Rivers Organization

Directorof Rivers

Proyek R Plnnn 1st. Construction r 2nd Construction Swamp Operation

Cimanuk River Planning Development Development and Maintenance

1st Section of 4th Section of iver Rehabili-

Survey Section Construction Dev. Construction Dev. Rive RehaioiSection Section tation Section

River Fiehabili- ~~2nd Section of 5th Section of RvrTannRiver Rehabili- Construction Dev. Construction Dev. River Training

tation Section ~ ~ ~ ~ Setin eciotto Section Section Se Lt

RiverControl 3rd Section of |6th Section of River Operation Q

Design RverContrl ConstructionDev. Construction Dev. and Maintenance I-i Design Section Section Section Section 0

World Bank - 18514 4

INDONESIAIRRIGATION Xi

Jatiluhur Authority Organization

Minister of State forEconomy, Finance and Industry

Ministers of Public Works andElectric Power, Finance, Home

Affairs and Agriculture

Jatiluhur AuthorityBoard of Director

President Director

Director, Electric Director, Director, AdministrationPower Department Irrigation Department Department

Deputy Director Deputy Director Deputy DirectorAgriculture Division Development and Construction Division Operation and Maintenance Division

World Bank-18515

INDONESIAIRRIGATION PROJECT XI

Cipamingkis SubprojectProposed Cropping Calendar

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

Wet Season Paddy N

7,600 ha

H

C__ Dry Season Paddy N

2.000 ha T111111111in

H

a. Palawija (a) M1,000 ha H

b. Red pepper C2,000 ha N

(b) T

HM

Notation: mm

C - Cultivation 400N - NurseryT - Transplant 300M - ManagementH - Harvest 200

> - Average Rainfall (mm)100

00J F M A M J J A S 0 N D

World Bank - 18307

INDONESIAIRRIGATION PROJECT Xl

Jragung SubprojectProposed Cropping Calendar

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

Wet Season Paddy N

10,500 ha-mM M

Dry Season Paddy N

T 8,300 hav -

|Palawija I = HO~~~

Palawija 11 Mmm~~~~~~~~

Mlawa F M M ManaNote: Farmers Hay grves4 00

- Average Rainfall (mm) 0

J F M A M ,i J A S 0 N 0

Note: Farmers may grow Palawija crops after rice, however, these crops have not been included in economic anaylysis; World Bank - 18306 J

IBRD 13142

100* 0630 1000 1194

MALAYSIA (IH 'iA5.~~~~ Ibogo *, ~~~~~~MALAYSIA

S1.dy A- 4--',~SINGAPORE7,000 ha

,-, .l.o 004

R.. &.dy A,.. 1,LQ( h ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~1,~~

So osg, Dbrsh

1000 qhoo,0 K'A LI M AN TA N

3,500 ho

0,005,501 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1,0h

V., T E A-5A -

Ioo,00,Soy,o-- S U LAW ES IAA-- 5,0005 10'.,h5

.'

a..a.1w a~~~~~P-,0005 mis6,000 th. 2t,0G0h.

Nay OaSrkpnfl Oo10prs3t 80,90 Irs d.. 011

W. 5,0005 - Cob rojj- 54,600 h.

INPONESW Oly Ko,O,h-101 C8odbO al0 PMtl

M M RIGA1ON PROJECT '' XI l,osos 60~i0 ,16010 '~~

BR16;~~~~1oli PoojkfT Xi M.6i..~~~~POo,o RsobCIOioOa~~ & ondolro-pjo m0585Ops

Ilffl IGAIOOo1ISJOT 15 511-0 0000,,tabIl1o ls Ol'a ssoloo4l 9

7 6on h. B.6r0 .2OOhO0040~'posro # hodOorr.005 1s0

55800ATIONi REjOAPITATtON I oosd6o 0100

950A0 , v 00100 oat1a1101 051 011,0,ss

a6hdo~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0'0 fa O

WITVONATIONALOOCIC06A1SCoso 001 -CloO-ola,,- 00~j0

~so~~sorol 0 1010000 -o a Ia srroaOrO LOMBOK -

229,000 Ir. SLOMBAWA , .lUlJa.

0 100 0 o o o I,3A N D 0 N E S I

106.~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~31

IBRD 13144vff Was IIputlw seto JANUARY 1978

SUMATERA )A VA S E A

/oz~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~09 T. 91o 1

Tcca Jh. Poese |, KILOMETER

e Ctpaningkis Sub-Projet

Projc-Bet Areaeo.e

Pronednofheposetod,e~ Cattachdlsdnt,otooce nt

Kg. Jongo lI

ProposedCipamingkis KIOETR

MILES

IBRD 13531t/ cipntih9ts Thismap or Ar d VrA b A MARCH 1978

,, 33 bMf i Arerz he ravo orro wh th lINDONESIAa,Bcsv iB sta - OXia.5y yyvl Doudre bpym, rn rp

.. .. ... 72 IRRIGATION PROJECT XE< _ \Drinaif Mi.~~~~~reboye avorrpnermm

30S0bpr0e0 aaap orucn or mi J ragung Dam SubprojectE. sting Man Conols

. MD A Al 0 E ANExisi,ng Irrigation Areas. Eisitng Weirs or Drms

Proposed Weirs or Darms

Sedeku Drainoge Subproject Boundory

J A V A Proposed Reservoirsi ' Rivers

5 L A Roads/ ~~~~~~~~~~~Demak R,.y

</ U ' \ * .ower Statohs

KILOMETERS 81o

\EGA Gu-TIOibug<S

\ E5 OP9ER r/ J P

/ * | o / ( i KED)RAGNGOtB

: 5 vmv~~~~~~~~~~~~~~DM D rI tR Di;X

s2w>~ ~ ~~TNTr, KeuniDtlrg [ONg

_ / } ,_ _\j J''iS~~~E