Nepal: Infrastructure upgrade and institutional reform of irrigation systems (#480)

International donors have poured money into developing Nepal’s irrigation infrastructures since the late-1950s, but results remain only partly successful. At present, irrigation infrastructures have been developed to serve 1.331 million ha but the irrigation potential is estimated to about 1.76 million ha. The Irrigation Water Resources Management Project is one of the latest international aid efforts aimed to developing the irrigation facilities while improving Nepal’s institutional framework pertaining to water infrastructure projects. The importance of adequate and timely finance, well-defined administrative roles and institutional capacity building are part of the key lessons learned from this project.

Description of the Problem

Food production in Nepal is barely sufficient to meet its annual food requirement. Irrigation is an important input for increasing food production. As of 2011, the country has a cultivated area of 2,642,000 ha (18% of its land area), of which two third (1,766,000 ha) is potentially irrigable. Up to the end of 2012, about 71% of the cultivated area has some form of irrigation infrastructure but only 40% of the cultivated area has year round and dependable irrigation. 

Plans for developing Nepal’s irrigation infrastructure started as early as the late 1950s. International donors including USAID, India, the Asian Development Bank, Saudi Fund for Development, and Kuwaiti Fund have assisted in the construction of irrigation schemes. At present, these irrigation infrastructures have been developed to serve 1.331 million ha with irrigation. Yet, it has been reported that these projects have repeatedly fallen short of their potential due to issues of governance, including misallocation of funds and systemic corruption.

Decisions and Actions Taken

The Irrigation Water Resources Management Project was initiated in 2008 with the aim of supporting the national goal of poverty reduction and to develop Nepalese irrigated agriculture through irrigation development and management. The project was implemented with the grant assistance of the World Bank ($50 million is grant assistance), along with direct contribution of Water Users Associations (WUAs) ($5 million) and the Government of Nepal ($10 million). The objectives of the proposed project were to improve irrigation service delivery, and to enhance sustainability and productivity of selected irrigation systems in Nepal.

The Project has following four action components:

  1. Rehabilitating and modernizing the irrigation infrastructure; 
  2. Completing and consolidating the irrigation management transfer reforms;
  3. Reinforcing the institutional and policy support for better water management and productivity;
  4. Integrating the crop and water management components;

Outcomes

Significant improvements were made, especially towards action components 2 and 3. Feasibility studies and social investigations were thoroughly conducted, which enhanced ground level participation. Capacity support by governmental agencies, including operation and management (O&M) training, were delivered to farmers and were shown to be effective methods as to maintain and improve irrigation infrastructures in the long run.   

The implementation of the irrigation projects was hindered by the fact that budgets were approved too late or towards the end of the fiscal year. A lack of clear cut responsibilities and authority at the regional level also worked against a smooth implementation of the projects. It was reported that several WUAs used funds provided by their village development committees or local MPs as proxies for their contribution.

In turn, such sort of rent seeking activities creates non-involvement among the majority of the beneficiaries. As a result, WUAs and farmers’ associations continued to rely heavily on the local governments assistance, thus fuelling the ‘Dependency Syndrome’. Such poor compliance of the funding scheme’s guidelines is believed to have added to the problems of low public expenditure traceability and underlying corruption.

Lessons learned and replicability

The Project shares the following lessons in relation to the IWRM approach: 

  • O&M training is an important tool for the durability of projects and for local capacity building; 
  • Feasibility studies and social investigations are methods that can be used in evaluating the tradeoff between technical and societal needs.
  • Adequate and timely financing is vital for the smooth the implementation of projects;
  • Decentralization must be accompanied with delimiting clear cut responsibilities for each administrative level;
  • Public expenditure tracking body and integrity mapping reports are important measures to enhance the water governance;
  • Participatory resource mobilization supports the sense of local-level involvement. 

Photo: Aerial view of paddy fields near Pokhara, Nepal

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