ASIAN DEVELOPMENT BANK Operations Evaluation Department

PROJECT PERFORMANCE EVALUATION REPORT

FOR

INDONESIA

In this electronic file, the report is followed by Managements response.

Performance Evaluation Report

Project Number: 26190 Loan Number: 1339-INO August 2006

Indonesia: Capacity Building Project in the Water Resources Sector

Operations Evaluation Department

ABBREVIATIONS ADB BAPEDALDA BAPPENAS CPO DGWR IHA IRM m3 MPW NAD NGO NSIASP OED OEM PAMST PCR PISP PP PPTA PWRS RBO Rp RRP TA WATSAL WATSAP WRDC WRDM Asian Development Bank Badan Pengendalian Dampak Lingkungan Daerah (provincial environment agency) Badan Perencanaan Pembangunan Nasional (National Development Planning Agency) central project office Directorate General of Water Resources in-house adviser Indonesia Resident Mission cubic meters Ministry of Public Works Nanggroe Aceh Darussalam nongovernment organization Northern Sumatra Irrigated Agriculture Sector Project Operations Evaluation Department operations evaluation mission Policy Analysis and Management Support Team project completion report Participatory Irrigation Sector Project peraturan pemerintah (national regulation) project preparatory technical assistance provincial water resources service river basin organization rupiah report and recommendation of the President technical assistance Water Sector Adjustment Loan water sector adjustment program water resources data center water resources development and management GLOSSARY balai dinas hydromet provincial river basin management units local government organizations hydrological and metrological NOTE The fiscal year (FY) of the Government ends on 31 December.
Key Words capacity building; capacity development; water resources sector; water resources management; training; sustainability; water law; results-oriented management; development effectiveness; evaluation; lessons; operations evaluation department; performance evaluation

Director General Director Team Leader Team Member

Bruce Murray, Operations Evaluation Department (OED) R. Keith Leonard, Operations Evaluation Division 1, OED Jocelyn Tubadeza, Senior Evaluation Officer, OED Caren Joy Mongcopa, Senior Operations Evaluation Assistant, OED Operations Evaluation Department, PE-689

CONTENTS Page BASIC DATA EXECUTIVE SUMMARY MAP I. INTRODUCTION A. Evaluation Purpose and Process B. Expected Results DESIGN AND IMPLEMENTATION A. Formulation B. Rationale C. Cost, Financing, and Executing Arrangements D. Procurement, Construction, and Scheduling E. Design Changes F. Outputs G. Consultants H. Loan Covenants I. Policy Framework PERFORMANCE ASSESSMENT A. Overall Assessment B. Relevance C. Effectiveness D. Efficiency E. Sustainability OTHER ASSESSMENTS A. Socioeconomic Impact B. Asian Development Bank Performance C. Borrower Performance ISSUES, LESSONS, AND FOLLOW-UP ACTIONS A. Issues B. Lessons C. Follow-Up Actions iii v ix 1 1 2 2 2 3 4 5 5 6 6 7 7 7 7 8 9 13 14 14 14 14 15 15 15 17 19

II.

III.

IV.

V.

APPENDIXES 1. Project-Related Statistics 2. Project Outputs 3. SP-1 and Masters Program, Bandung 4. Chronology of Significant Water Resources Sector Events

22 25 31 33

The guidelines formally adopted by the Operations Evaluation Department (OED) on avoiding conflict of interest in its independent evaluations were observed in the preparation of this report. Jonathan Cook and Peddy Suhardi were the consultants. To the knowledge of the management of OED, there were no conflicts of interest of the persons preparing, reviewing, or approving this report.

Attachment:

Managements Response

BASIC DATA Capacity Building Project in the Water Resources Sector (Loan 1339-INO) PROJECT PREPARATION/INSTITUTION BUILDING PersonMonths 33 Amount ($) 600,000 Approval Date 29 Mar 1993

TA No. 1859

TA Name Human Resources Development Project in the Water Resources Sector

Type PPTA

KEY PROJECT DATA ($ million) Total Project Cost ADB Loan Amount/Utilization ADB Loan Amount/Cancellation KEY DATES Fact-Finding Appraisal Loan Negotiations ADB Board of Directors Approval Loan Signing Loan Effectiveness First Disbursement Project Completion Loan Closing Months (Effectiveness to Completion) BORROWER EXECUTING AGENCY

As per ADB Loan Documents $46.20 27.72

Actual $22.95 18.34 9.38

Expected

3 April 1995 1 June 1995 30 June 2000 30 June 2000 62

Actual 220 May 1994 24 Jul5 Aug 1994 78 November 1994 6 December 1994 10 January 1995 3 April 1995 1 June 1995 30 June 2002 29 November 2002 86

Republic of Indonesia Directorate General of Water Resources

Type of Mission Fact-Finding Appraisal Project Administration Inception Review Midterm Review Project Completion Operations Evaluation

No. of Missions 1 1 1 10 1 1 1

No. of Person-Days 57 78 5 142 36 36 62

ADB = Asian Development Bank, PPTA = project preparatory technical assistance.

EXECUTIVE SUMMARY The Capacity Building Project in the Water Resources Sector (the Project) was executed by the Directorate General of Water Resources (DGWR) of the Ministry of Public Works (MPW) over 19952002. It was intended to strengthen national and provincial institutional capacity for sustainable, multisectoral, and economic management and use of water resources on a river basin basis. The project included three components: (i) strengthening the national policy and coordination framework, (ii) strengthening the capacity of regional institutions for multisectoral water resources development and management, and (iii) strengthening the capacity of DGWR. Overall, Indonesia has abundant water resources, with per person availability around four times the Asian average. Average country demand is 1.7% of runoff, but in some river basins in Java this approaches 50%. At the time of design, the major river systems of Java and the larger islands were beginning to suffer from significant stress due to catchment clearing, rapid urbanization and industrialization, resulting in increasing pollution. Project cost was $23 million, half of the appraised level. The Asian Development Bank (ADB) provided a loan of $18.3 million or 66% of the approved loan amount. Government contributions were only 25% of the $18 million planned, mainly due to devaluation of the rupiah (Rp) and fiscal problems resulting from the 19971998 Asian financial crisis. Project implementation was severely delayed initially; at the time of the midterm review in 1998, only about 10% of the loan had been drawn. Although disbursement accelerated thereafter, political changes caused problemsparticularly decentralization under the Wahid government. The Project was completed 24 months late, in mid-2002. Significant changes occurred during implementation. A number of activities, particularly relating to the private sector, were deleted, while significant support was provided to two other projects: the Northern Sumatra Irrigated Area Sector project (NSIASP) and the Water Sector Adjustment Loan (WATSAL), which were supported via ADB and World Bank loans, respectively. Assistance to NSIASP has not proven useful or sustainable, due to the limited linkage between the projects. However, World Bank staff consider the contribution to WATSAL to have been invaluable (inter alia) in laying the foundation for the 2004 Water Law. The Project comprised 49 outputs in the three components. While almost all outputs contributed to capacity development, it is not clear from the project framework whether they were necessary and sufficient to lead to the desired outcomes. Future capacity-building projects need to be more explicit regarding their intended outcomes and the outputs required to achieve them. Some project activities have been successful. The provision of support to the diploma and masters degree program in Bandung was valuable. Project irrigation training materials continue to be used, although other modules are not. The two most innovative aspects of the project the in-house advisers and results-oriented managementhave not survived, highlighting the difficulty of introducing institutional change, unless strongly demand driven. The Project is considered to have been relevant, though relevance was constrained by decentralization, which commenced in May 1999. The centralized project implementation approach largely bypassed the structural provincial organizations, and reduced the potential to build the capacity of the provincial water resources services. Project objectives align closely with ADBs Water-for-All policy, but are less directly linked to country objectives than they were at design.

vi It is difficult to define project effectiveness, as no outcome indicators were identified at design or monitored during implementation. The project has had some impact on policy, legislation, management, and operation, but in all cases less than planned. The water law is a positive outcome to which the Project contributed, but it is still awaiting the passage of supporting regulations. In terms of the hydrology network and data management, outcomes are constrained by lack of management support and reinvestment. The project is rated less effective. OEM rated the project less efficient, due to substantial delays, and the limited costeffectiveness of provincial activities. However, some aspects of the project were cost-effective, including the conduct of training courses and local consultant recruitment. Consultant inputs totaled around 140 person-years, double the appraisal estimate, due to changes in scope and under-budgeting. The failure of the in-house advisers to meet their objectives contributed to increased reliance on consultants. With the Project rated less sustainable, the overall rating is partly successful. A number of issues remain, which will affect the potential for capacity development in the sector and the extent to which economic benefits can be delivered to water users. (i) The need for a strong commitment by target agencies and the Government to develop the capacity and capability of the water sector institutions, particularly at provincial level. Expansion of the public awareness campaign piloted under the Project may be merited. The complexity and consequent difficulty of moving from political boundary, topdown water management to hydraulic boundary-based participatory management. The need for improved data availability, particularly for hydrological and meteorological data, but also for other information relating to water resources management. Duplication in water quality testing, with responsibility shared between the provincial water resources services, the Badan Pengendalian Dampak Lingkungan Daerah (BAPEDALDA, the provincial environmental agencies) and other agencies, such as the water companies and health departments. The Project operated in four core and four noncore provinces. There is a need to extend some aspects of the project to at least the remaining provinces outside Java, and to review the situation in project provinces.

(ii)

(iii)

(iv)

(v)

Project experience highlights a number of lessons that may be relevant to future capacity-building projects and projects in the water sector: (i) (ii) Capacity-building projects should be demand-driven, and considered only where the demand from senior management is clear and unequivocal. Institutional development projects are difficult and long-term in nature. The project design recognized this and implied that further projects would be required to meet project objectives. In practice a series of TAs may be a preferable approach to supporting capacity building, since they can more readily take account of changing circumstances, build on strengths, and address weaknesses. Training programs should be timed to meet the work cycles of participants, and not scheduled at busy periods.

(iii)

vii

(iv)

(v)

Activities that are in strong demand (such as the masters degree program in Bandung) are far more likely to succeed than those which are merely accepted by management. The Project had little success with technical equipment, such as automatic data loggers, though performance was variable. Complex technical equipment needs support, e.g., through training, spare parts and service agreements, to ensure adequate life and use.

The issues and lessons described suggested a number of follow-up actions, which would support project outcomes and assist the national and provincial development of Indonesias water sector. The actions were discussed with the Government at a well-attended wrap up meeting, and at a subsequent intra-government meeting. TAs are suggested, with possible support from ADB for (i) developing optimal ownership, operation, and maintenance systems for the hydromet networks in the provinces; and (ii) supporting the development of river basin management. Any TAs would need to complement ADBs Participatory Irrigation Sector Project and the World Banks Water Resources and Irrigation Sector Management Program. Given the long-term nature of institutional strengthening, consideration could be given to a TA cluster loan or a loan under ADBs new multi-tranche facility. In addition to several projectrelated actions, Badan Perencanaan Pembangunan Nasional (BAPPENAS, National Development Planning Agency) strongly suggested more local participation in ADBs evaluation studies.

Bruce Murray Director General Operations Evaluation Department

ix

I. A. Evaluation Purpose and Process

INTRODUCTION

1. The Capacity Building Project in the Water Resources Sector in Indonesia1 (the Project) was randomly selected for operations evaluation in 2006. The Project was completed on 30 June 2002. The evaluation is based on criteria proposed in the Asian Development Banks (ADB) Guidelines for the Preparation of Performance Evaluation Reports of Public Sector Operations, i.e., relevance, effectiveness, efficiency, and sustainability. The report identifies lessons for future ADB assistance for capacity building in the water resources sector and followup actions to promote project impact. The evaluation involved a review of project documents and relevant studies and discussions with ADB staff familiar with the Project. The Operations Evaluation Mission (OEM) visited Indonesia from 31 May to 26 June 2006. Field studies included discussions with staff of the Directorate General of Water Resources (DGWR),2 which served as the Executing Agency (EA), and other relevant agencies including Badan Perencanaan Pembangunan Nasional (BAPPENAS) (the National Development Planning Agency) and the World Bank. The evaluation team also met officials in three of the four core provinces and water users and key stakeholders. Following internal review, a copy of the draft report was circulated among ADB departments concerned and those of the borrower. Comments received have been reflected in the report. 2. The Project was self-evaluated by the Agriculture, Environment, and Natural Resources Division of ADBs Southeast Asia Department through a project completion report (PCR), circulated in August 2005.3 The PCR rated the Project successful. It indicated that, although implementation was slow initially and considered unsatisfactory at midterm review, implementation accelerated thereafter, with significant high-profile outputs relating to national water resources coordination and policy development achieved by project end. The PCR assessed project outputs as having far-reaching impact and showing clear signs of increased stakeholder participation and water resources management decentralization. The PCR noted that project activities improved processes and set in motion the long-term strengthening of national and provincial institutions engaged in water resources management. Some project outputs did not become fully operational but a significant number of outcomes as conceived during appraisal were achieved. 3. The PCR found that implementation arrangements were appropriate and sufficiently flexible to allow adjustment during implementation to optimize impact. However, government ownership was low initially and consulting services and institutional support were of lower quality than expected. The project design would probably have been improved with more stakeholder involvement. Training activities met appraised targets and their continuation after the Project has increased the likelihood of project sustainability. The PCR rating followed ADBs Guidelines for the Preparation for the Preparation of Performance Audit Reports.4 The Project was assessed as relevant, efficacious, less efficient, likely to be sustained, and had significant other impacts.
1

ADB. 1994. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of Indonesia for the Capacity Building Project in the Water Resources Sector. Manila (Loan 1339-INO, for $27.7 million, approved on 6 December). The Directorate General of Water Resources was known until 1998 as the Directorate General of Water Resources Development ADB. 2005. Project Completion Report on the Capacity Building Project in the Water Resources Sector in Indonesia. Manila. These guidelines were in effect at the time of PCR preparation. The new Guidelines for the Preparation of Performance Evaluation Reports of Public Sector Operations omit institutional and other impacts from the core rating criteria. Available: http://www.adb.org/Documents/Guidelines/Evaluation/PPER-PSO

2 The Project was assessed mainly on the delivery of outputs and not on the achievement of outcomes. While the PCR in some cases attempted to describe project outcomes, it was not able to substantiate that these will result from the delivered outputs. B. Expected Results

4. The Project was classified as a human resources development project. Its goal was to strengthen national and provincial institutional capacity for sustainable, multisectoral, and economic management and use of water resources on a river basin basis. Specifically, it aimed to strengthen (i) operational policy making and existing policy instruments, (ii) institutional coordination frameworks, (iii) management systems and processes, (iv) technical standards and practices, and (v) related human resource systems and staff skills of water resources management agencies. In so doing, the Project sought to strengthen multisectoral and coordinated water resources planning and allocation, and improve water quality monitoring and management. To achieve these objectives, the Project had three components, which comprised strengthening (i) the national policy and coordination framework, (ii) the capacity of regional institutions for multisectoral water resources development and management, and (iii) the capacity of DGWR. 5. The report and recommendation of the President (RRP) for the Project included a project framework. This listed a few generalized outputs. For example, component 2 outputs are strengthened water resources planning and management and strengthened water quality management in selected provinces. These are actually closer to component purposes (outcomes) than outputs. Planned outputs are listed in the consultants terms of reference (RRP, Appendix 8) and limited description is provided in the Project Administration Memorandum.5 Approximately 40 outputs were listed in the consultant terms of reference, many of which were useful and relevant to capacity-building objectives. Project design documents do not define the expected project beneficiaries. However, it is likely that the primary beneficiaries of a capacity-building project would be the employees of the institutions being strengthened. The improved performance that should result would benefit water users through improved water management and allocation decisions. II. A. Formulation DESIGN AND IMPLEMENTATION

6. The water resources sector was given significant emphasis during the early 1990s. This was recognized by the Government raising water resources from a subsector of agriculture to a full sector, including all water users. BAPPENAS consequently established a separate Bureau for Water Resources and Irrigation (RRP, para. 15). Water resources coordinating committees had been established in all Java provinces, chaired by the governor. There was thought to be potential to expand this process to the rest of the country. Numerous donors including World Bank, ADB, and bilateral agencies were supporting initiatives in the sector.

The problem with separating outputs from the framework is that it is not possible to judge whether the frameworks vertical or horizontal logic is sound, and thus whether the planned project outputs are necessary, sufficient, and feasible to achieve the desired outcomes. This separation also precludes a logical analysis of project risks and assumptions, and the risk analysis (RRP, para. 61) has little linkage to the framework. Improved risk analysis relating to output-outcome links might have identified project weaknesses and allowed corrective measures to be adopted, either in the design or subsequently. Detailed stakeholder analysis may also have been helpful.

7. Project preparatory technical assistance (TA) was undertaken from September 1993 to May 1994. The study identified many issues relating to limited institutional capacity in the water resources sector, but did not undertake a detailed institutional analysis. While the report (as well as the subsequent project) assumed institutional development and capacity building to be a good thing and demanded by the institution, the report does not demonstrate that this attitude was widely held by senior DGWR management. There is no indication of where demand for the project originated, nor of commitment to its objectives by senior management. Such an analysis would not have been easy: when asked, managers will typically state that they seek to increase the capacity and capability of their institution, as this is expected of them. However, at the minimum, an in-depth analysis of the many factors constraining institutional change would have been valuable during design. This analysis would have assisted in clarifying the obstacles that the project was likely to face and could have suggested ways to overcome them. The report did provide an adequate basis for appraisal, which nonetheless undertook substantial redesign. Overall, the design was relevant to both ADBs and the Governments prevailing policies. However, in retrospect the design: (i) lacked adequate stakeholder analysis and did not involve stakeholders sufficiently in the design process, (ii) did not make explicit the linkages between outputs and expected outcomes, and (iii) did not assess risks in any detail. Outputs were listed only in the consultant terms of reference, and were not defined in detail, resulting in some lack of design clarity. Design issues contributed to delays in early implementation, and led to substantial redesign at midterm. 8. The Project attempted a big-bang approach, addressing a range of problems in many areas. It assumed that if a range of intermediate objectives were met, then overall capacityenhancement objectives would be achieved. In practice, it may have been preferable for the project designers to define a clear purpose, and ensure that the components and outputs included in the project were necessary and sufficient to achieve it. The multiplicity of objectives at purpose level (5) and output level (initially 40, increasing to 49 during implementation) resulted in a rather unfocused project. A more measured approach, using a series of TAs for example, may have achieved better results. These could have built on experience and adapted more readily to changing circumstances, such as reorganization or decentralization. The design recognized that a single project was unlikely to result in the desired increase in capacity, stating: addressing the project objectives and capacity-building needs nationwide for the water resource sector is a long-term process. The project would initiate this process selectively at the national level and in some provinces (RRP, para. 32). It was thus likely that a series of further interventions would be required to lift national capacity and capability in the sector. B. Rationale

9. The Project was intended to systematically address institutional deficiencies through capacity-building interventions in the institutions responsible for water resources planning and management. Water resources are abundant in Indonesia. Its 30 provinces contain some 91 major river basins. Total annual renewable water resources were estimated at 2.5 trillion cubic meters (m3) with annual per capita availability of about 14,000 m3, four times the Asian average. Average country demand is 1.7% of runoff, but in some river basins in Java it approaches 50%. About 60% of Indonesias population resides in Java, Bali, and Madura, which make up just 7% of the land mass. In the early 1990s, national water resources development priorities changed significantly in response to competing demands, growing shortages and deteriorating water quality in many parts of the country, caused by (i) extensive and continuing watershed degradation due to population pressure; (ii) rapid urbanization resulting in added demands for clean water and sanitation; and (iii) industrialization, affecting water use and quality.

4 10. In addressing these issues, the Government adopted a series of policy, strategy, and institutional reform initiatives that sought to achieve more integrated and balanced water resources planning, development, and management. Although the strategies with respect to integrated water resources management were well articulated, national, provincial, and district institutional capacity was not adequate to ensure their effective implementation. In addition, coordinating the functions of the various institutions involved in water resources development and management was difficult, and led to a number of gaps in services, to the detriment of efficient, integrated and sustainable use of water resources. More effective coordination of these agencies at different levels of government was needed to address complex and urgent issues in the sector. C. Cost, Financing, and Executing Arrangements

11. Total project cost at completion was $23 million, half of the appraisal estimate of $46 million. Cost under-runs were due to changes in project scope (para. 17.) and devaluation of the rupiah over the project period. In total, $5 million was spent on strengthening the national policy and coordination framework (compared with $0.9 million estimated at appraisal), $6.6 million (one third of the appraisal estimate) on strengthening regional institutions, $7.8 million (half of the appraisal estimate) on strengthening the capacity of DGWR, and $3.6 million on project administration support and interest during construction. The reduction in expenditures on regional activities is significant and limited the Projects potential to deliver sustained outcomes in the provinces. Appendix 1 includes a breakdown of project costs. 12. Of the approved loan amount of $27.7 million, $18.3 million (66%) was disbursed. This provided foreign exchange and local financing, amounting to 80% of project cost (compared with the planned 60%). The Government provided $4.6 million equivalent of local financing, equal to 20% of the project cost, versus $18.5 million (40%) at appraisal. Government contributions were limited by budgetary constraints following the fiscal crisis of 1997. 13. The Project was executed by DGWR. Implementation was through a number of teams: (i) the Central Project Office (CPO), (ii) provincial implementation units, (iii) the Policy Analysis and Management Support Team (PAMST), (iv) in-house advisors (IHAs), and (v) consultant teams at central and provincial levels. BAPPENAS provided support by coordinating the various agencies involved in water resources planning and management. The CPO became more effective in 1998 when it was allocated a full-time head (PCR, para. 32). As was common at the time, the provincial implementation units were under the management of DGWR, and thus did not always link closely to the provincial water resources services (PWRSs). This proved to be a significant negative factor in relation to PWRSs strengthening following the decentralization that commenced in mid-1999, and may be a reason for significant underspending in component 2. 14. The PAMST was established during the project, providing policy advice to DGWR management and acting as the project coordinating committee. It provided reasonably effective coordination between December 1996 and March 1999, though lacking outside membership. It then ceased operation due to DGWR reorganization. It re-emerged in April 2002 and operated over the final few months of the project. Some of its policy functions have been taken over by the inter-ministerial coordination team for water resources management (Tim Koordinasi Pengelolaan Sumber Daya Air [TKPSDA]) established by Presidential Decree 123/2001 with support from the World Bank and the Netherlands. The teams secretariat is in the Economic Coordination Ministry. Its responsibilities will be taken over by the yet-to-be-formed national water resources council.

D.

Procurement, Construction, and Scheduling

15. According to PCR (para. 41), procurement was carried out in accordance with ADBs Guidelines on Procurement. Civil works comprising construction of new offices for provincial hydrology units and rehabilitation and construction of new hydrological stations were procured through local competitive bidding. Equipment and vehicles were procured centrally through a mix of international shopping, local and international competitive bidding, and direct purchase. 16. Project implementation was delayed by 2 years. At appraisal, it was envisaged that the Project would be implemented over 5 years with completion in June 2000. The actual completion date was June 2002. Delays occurred due to (i) lack of consensus in DGWR on the overall goal of the Project, arising from poor understanding of the project design; (ii) lack of ownership, commitment, and high-level policy management support; (iii) lack of familiarity by the CPO with ADB procurement and budgeting procedures; (iv) reorganization of DGWR in 1998 and 2001, leading to the appointment of new staff unfamiliar with the Project; (v) problems experienced by the package-1 consultant team;6 and (vi) the addition of activities to component 1 (discussed below). E. Design Changes

17. In 19982000, project implementation was affected by political reforms, the Asian financial crisis, water resources sector reform, decentralization, and water institution reorganization. These factors led to a reduction in component 2 activities in target provinces, including (i) deleting the data loggers in Maluku, (ii) reducing the number of new hydrometeorological (hydromet) stations to be built in other provinces, and (iii) substantially scaling back the procurement of water quality measuring and monitoring equipment. Conversely, a number activities were added, mainly to component 1, including (i) additional work on the policy, legal aspects, and coordination relating to water resources sector adjustment; and (ii) establishment of a water resources data center (WRDC) in Jakarta with links to five provinces in Sumatra. This activity was transferred from the Northern Sumatra Irrigated Agriculture Sector Project (NSIASP),7 whose commencement was delayed and budget reduced, leading to a logical transfer of activities to the Project.

6 7

In the Project as implemented there were 7 consultant contracts, known as Package 1, Package 2, etc. ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of Indonesia for the Northern Sumatra Irrigated Agriculture Sector Project. Manila (Loan 1579-INO, for $130 million, approved on 13 November).

6 F. Outputs

18. The 49 outputs identified by Table 1: Classification of Project Outputs PCR have been divided into the five Class of Output Number % classes suggested by a recent OED 8 1. Enabling Environment 4 8 report (Table 1). Outputs are 2. Sector Network (including Other concentrated on support to the water Agencies in Sector) 6 12 sector organizations, largely relating 3. Organization (DGWR and PWRSs) 26 54 to the preparation of guidelines, 4. Employees 12 24 manuals and reports. Support to the 5. Beneficiaries 1 2 enabling environment relates mainly Total 49 100 to the work supporting the DGWR = Directorate General of Water Resources, PWRSs = coordination framework and the Provincial Water Resources Services. water law, while sector network Source: Project Completion Report Appendix 3, classification by Operations Evaluation Mission. activities mainly involve multi-agency policy development and planning. Employee activities focus on training of water sector agency staff, while support to beneficiaries was limited to the public awareness campaigns undertaken in two river basins in the last year of the project. Overall, the activity classification appears appropriate in relation to project objectives, though the limited direct linkage to beneficiaries is notable. Planned and actual outputs are listed in Appendix 2 with a description of their status post-project and at OEM. 19. Substantial project and consultant resources were allocated to training, notably the training of 17 in-house-advisers in Bangkok on water resources management, and training of trainer programs, received by a total of 930 trainees. The PWRSs continue to provide training for water user associations, but other aspects of the training of trainer programs do not appear to have been sustained. However, the DGWR human resources development center (Pusdiklat) is using project irrigation training materials in its 12 regional centers. Five courses were run in 2005. Other training materials produced by the Project are not used. The Sp-1 Bipowered postgraduate program at Bandung was supported when funding from the Netherlands and the World Bank ended, and converted under the Project to a masters degree program, which has continued post-project. A total of 242 mainly DGWR and PWRS staff graduated during the project period (Appendix 3). About 10% of participants were female, underlining the high proportion of men in management positions in the sector. G. Consultants

20. Consultant inputs totaled 379 person-months of international and 1,318 person-months of national consulting services, double appraisal estimates. Most consultants are reported to have performed well. Discussion with DGWR staff and core province PWRSs did not identify any particular issues with consultant capability or approach. All consultant outputs viewed were written in Bahasa Indonesia, which is a positive factor, and all training course reports viewed included end-of-course self-evaluations. The PCR (para. 43) reports that significant delays and inefficiencies were caused by the lack of understanding of the project design by the key package 1 consultants and their inability to field appropriate staff early in the project period. Routine quarterly reporting was of poor quality initially. The team leader changed three times in 19961999. Performance improved significantly in later years. However, the problems adversely affected implementation, because package 1 was the lead team, accountable for package 2 and

ADB. 2005. Lessons in Capacity Development: Sectoral Studies in Sri Lanka. Manila (SST: SRI 2006-04).

other outputs (RRP, Appendix 8). Project expenditure (excluding consultancy costs) per personmonth of consulting time declined from $39,000 at design, to $7,500, or by 81%.9 21. The IHA were intended to take on the role of in-house consultants. However, they were appointed late and many resigned or were transferred. Those that remained could advise, e.g., on hydromet network development or training programs (as in South Sulawesi), but there appears to have been little clear appreciation of their potential roles. The RRP (para. 43) indicates that the IHA will be transferred from their line positions to specially created positions which will support project implementation. After initial training during the first 612 months, they will work side-by-side with the management consultants in both DGWR and the regions. In the latter part of the Project, they will assume primary responsibility for guiding project implementation. The specialist positions were not created and in practice, most IHA could only play a marginal role in implementation. H. Loan Covenants

22. Most loan covenants were complied with. Annual accounts for the years 2001 and 2002 were reported by the PCR not to have been supplied. Timely copies were in fact received by ADBs Indonesia Resident Mission (IRM). The covenanted benefit evaluation, also agreed during PCR, has not been prepared, while the ongoing appointment of IHA has not occurred. I. Policy Framework

23. Policy changes had a substantial effect on the Project. Two reorganizations of DGWR with changes of ministry occurred: in 1998 Public Works was split into the Ministry of Settlements and Regional Development (Kimbangwil) and a small state ministry of Public Works, which were merged in 2001 to form the new Ministry of Settlements and Regional Infrastructure (Kimpraswil). In August 2005 the Ministry of Public Works (MPW) was reestablished, and DGWR reorganized, with sectoral in place of regional directorates, as recommended by the Project. The Asian financial crisis of 19971998 also had a major impact on the Project, limiting the availability of counterpart funds and leading to rapid devaluation of the rupiah. Rapid decentralization began in 1999, with economic power devolving to the regions and in particular the districts. Over time, some functions have been moved from the districts to the provincial level, in part due to recognition that the provinces would have a limited role under a fully devolved structure. Some functions have also been recentralized to Jakarta (e.g., river basin management for multi-province basins), but it is expected that these functions will be largely delegated to the provinces under some form of comanagement. A chronology of key events affecting the water resources sector is in Appendix 4. III. A. Overall Assessment PERFORMANCE ASSESSMENT

24. The Project was innovative, and was ADBs first capacity-building project in the water resources sector. Project relevance was constrained by the decentralization that commenced in May 1999. Project implementation was centralized and largely bypassed the structural provincial organizations, reducing the potential to build the capacity of the PWRSs. Project objectives nonetheless remain relevant to the Government strategy and ADBs water policy, but
9

The Government PCR identifies even higher consultant costs ($9.2 million), which would further reduce project non-consulting expenditure per consultant month to $6,300.

8 only moderately relevant to ADBs current Indonesia country strategy. No outcome indicators were identified or monitored, making it difficult to define project effectiveness. However, the Project has had some impact on policy, legislation, management, and operation, though less than planned. The water law is a positive outcome to which the Project contributed, but requires the passage of supporting regulations to become effective. Outcomes with respect to the hydrology network and data management are constrained by a lack of management support and reinvestment. Implementation efficiency was low in first years of the Project due to substantial implementation delays. Some aspects of the Project were cost-effective, including the conduct of training courses and local consultant recruitment. Consultant inputs totaled 140 person-years, double appraisal estimates, due to changes in scope and under-budgeting. Consultant costs amounted to almost half of project baseline costs, raising concerns in relation to cost-effectiveness in the light of the reduced project scope. With the Project rated less sustainable, the overall rating is partly successful (Table 2), one class lower than the successful rating derived by the PCR. Subsequent paragraphs discuss each rating criterion. Table 2: Assessment of Project Overall Performance
Criterion 1. Relevance 2. Effectiveness 3. Efficiency 4. Sustainability Overall Rating Weight (%) 20 30 30 20 Assessment Relevant Less Effective Less Efficient Less Likely Partly Successful Rating Value 2 1 1 1 0.8 <1.6 Weighted Rating 0.4 0.3 0.3 0.2 1.2

Source: Operations Evaluation Mission estimates.

B.

Relevance

25. The project is classed as relevant. The project design was adequate but had a number of drawbacks, discussed in para. 8. At the time of formulation, the Project was highly relevant to national policy. However, structural institutional changes undertaken from 1998 to 2006 and the decentralization policies pursued strongly by the Government have reduced the relevance of the project as designed. Project objectives nonetheless remain relevant to the March 2005 National Medium-Term Development Plan, which includes a continuation of the program for (i) issuing government regulations on water resource management, rivers, financing, irrigation, and restructuring of river basin corporations; (ii) issuing the Presidential Regulation on Establishment of a National Water Resources Council; (iii) strengthening sector institutions at all levels; (iv) establishing councils for coordination of water resources management at central, provincial, district, and basin levels; (v) creating a management information system; (vi) improving community participation; and (vii) improving the capability of the community and water user associations in the development and management of irrigation.10 26. ADBs 20032005 country strategy and program identifies five focal areas for support: (i) improving governance and strengthening the capacity for long-term sustainable development; (ii) meeting local rural and urban development needs through decentralization; (iii) promoting human development through provision of and access by the poor to social services; (iv) mainstreaming environment management and sustainable use of natural resources; and (v) reducing poverty by promoting long-term, significant growth through investments in infrastructure, strengthening financial and corporate governance, and encouraging private
10

Quoted in World Bank. 2004. Water Sector Adjustment Loan (WATSAL) Implementation Completion Report. Washington, DC.

sector development. The Projects main contributions were to (i) and (iv), through support for rational water resources development, but it was less relevant than at project inception. The Project was in line with ADBs 1996 Water-for-All policy and the Water Financing Program 20062010, for which Indonesia is one of the five main target countries. 27. As highlighted by the recent Country Assistance Program Evaluation for Indonesia,11 decentralization had a significant impact on capacity building and ADBs program. The project supported decentralization efforts in several ways, including through its contribution to development of the 2004 Water Law, and through public awareness campaigns that were piloted late in the project period. However, the project remained essentially a central government initiative implemented at the provincial level through project-managed provincial implementation units. This prevented a greater contribution to the development of local government capacity, and highlights a weakness in the Governments previous approach to implementation. Once the design had been defined, there was little that could be done by those implementing the Project to respond to decentralization initiatives, reducing project relevance at the time of OEM. While the Project was flexible in supporting other projects (e.g., NSIASP and the Water Sector Adjustment Loan [WATSAL]), it could not be restructured to the extent necessary to respond to decentralization. C. Effectiveness

28. The Project is rated less effective. Five purpose-level objectives were defined, relating to strengthening of (i) operational policymaking, (ii) the institutional framework for coordination, (iii) management systems and processes, (iv) technical standards and practices, and (v) human resource systems and skills of water resources management agencies. The Project has made limited progress towards these objectives, though its performance varies, with the greatest contribution being to policymaking. The ADB PCR (Appendix 3) contains details of achievements against planned activities (outputs), but little analysis of the extent to which the outputs contributed to project purposes. No outcome indicators have been identified or recorded. Planned reports on benefit evaluation and the lessons from the IHA experience have not been prepared, probably due to the mid-2005 reorganization of DGWR. 29. Some progress has been made relating to operational policymaking. The water law passed by parliament in January 2004 provides an excellent framework for modern water resources management.12 However, most of the supporting legislation has not been passed, either at central or regional level, preventing implementation of the act, 2.5 years after it was passed. Two national regulations have been approved (known as peraturan pemerintah [PP]): PP16/2005 on water supply system development, and PP20/2006 on irrigation in June 2006.13
11 12

ADB. 2005. Country Assistance Program Evaluation for Indonesia. Manila (CAP: INO 2005-16). The law was contentious and subject to a request for review by Indonesias Constitutional Court, mainly on the grounds that it set the basis for water privatization. The court declared the law conditionally constitutional. A review of the law noted that the law contains weaknesses regarding the issue of definition, acknowledgement of the right to water, hierarchy of rights, price determination and environmental protection. Constitutional Courts Review and the Future of Water Law in Indonesia, 2/1 Law, Environment and Development Journal (2006). 13 The passing of the irrigation PP represents a significant achievement given the extent of controversy about irrigation responsibilities. As stated by the WATSAL completion report, In anticipation of the revision of regional autonomy, which was likely to give a greater role to the province .., [the Ministry of Settlements and Regional Infrastructure (Kimpraswil)] started to actively further its sectoral interests mid-2003 by monopolizing Task Force work, and attempting to reclaim some of the irrigation responsibilities There had been major implementation progress in 16 provinces with signs of growing beneficial impact on irrigation management performance and beneficiary satisfaction. The Ministries of Home Affairs, and of Agriculture, and most local governments as well as the National Farmers Association, disagreed with [the Kimpraswil].

10 DGWR expects that the 12 remaining regulations will be released progressively over the next year or so, but this will depend on (i) the ability of the relevant combined panels (comprising relevant ministries) to review, amend and approve the regulations; (ii) the writing of regulations that have yet to be drafted (e.g., regarding the organizational structure and tasks of water resources institutions, the National Water Resources Council, and water resources management); and (iii) the time taken for cabinet to approve them. Since there is currently a backlog of about 80 laws awaiting the drafting or approval of regulations, it is uncertain when the regulations will actually be released. 30. The water law is strong when dealing with river basins and irrigation schemes, but less so in relation to water quality. One recent reviewer identified a significant omission in the law in relation to its lack of provision for administrative sanctions for pollution problems such as breaches of factory discharge standards. In this situation, the only redress is to take the polluter to court, which is a protracted and uncertain process under the Indonesian judicial system. If pollution in Indonesian rivers is to be controlled, a system of sanctions (e.g., automatic fines or the threat of cutting water supplies) will be required. Whether this can be established through an appropriate regulation or requires amendment of the law needs to be assessed. 31. The institutional framework for coordinated water resources management has been defined in general terms. The water law requires that coordination at the national level shall be carried out by the National Water Resources Council established by the Government.14 Coordination at the provincial level shall be by provincial water resource councils established by provincial governments. The national council is awaiting formal approval (via a presidential regulation, kepres) and its membership and charter are not available. Several provinces visited by OEM have established provincial water management committees, which comprise delegates from relevant government organizations under the chairmanship of the governor. They meet only occasionally and then mainly to respond to emergencies such as drought or flood. North Sumatra and several other provinces have commenced establishment of the multi-stakeholder councils required to be formed under the water law, but they are awaiting their relevant national and provincial regulations before commencing operation. No RBO has yet been formed in the core project provinces. South Sulawesi has come the closest, having formed four river committees covering the entire province (these group 10 or 12 rivers together). Several provinces have formed provincial river basin management units (balai), which are primarily responsible for provincial irrigation management (of schemes of 1,000 to 3,000 ha). Where the balai are located primarily on a single catchment they will form an integral part of future RBOs, but the relationship between the RBOs and the balais has not yet been clearly defined. Jeneberang, in South Sulawesi, is considering forming a company (similar to those in the Brantas and Citarum basins), which should have the capacity to manage water resources efficiently, but may not integrate easily with the needs of civil society and NGOs. 32. Because the project was firmly based in a line department, it was unlikely that it could have developed the intersectoral linkages required for integrated water resources planning and management. While recognizing that no ideal solution exists, it is possible that greater involvement of the provincial governors offices and the Regional Development Planning Boards (Badan Perencanaan Pembangunan Derah) would have resulted in improved coordination. 33. Management systems and processes appear to have improved somewhat. Appointment to positions and promotion are reported to be more merit- (and exam-) based than before, but in
14

The Council was included in the project scope. If it had been created as planned in the mid-1990s, it might have had a significant impact on water sector coordination, and led to improved project outcomes.

11

the provinces, promotion remains largely seniority- and contacts-based. In common with many other parts of the public service, appointment or promotion to government positions can lack transparency. The Projects two most innovative management initiatives were the appointment of IHAs and the introduction of results-oriented management. Neither of these initiatives succeeded: the one original IHA who remains in place or has been reappointed has a full-time line position in his PWRS. The concept was potentially useful during project implementation, but because no permanent position was created in the DGWR or PWRS structure, it was unlikely to be supported post-project. Even during the project, the IHAs generally had full-time jobs in the provincial or project structure. The IHA positions were functional rather than structural, and were thus looked upon as a poor career move by many suitable candidates. The incentives and disincentives associated with the positions were not adequately assessed during project design. 34. Results-oriented management was used to a limited degree (e.g., in planning hydrology programs), but not as an overall approach to incentive-based management. Provincial level officials interviewed could recall little if any detail of the approach or the reasons for introducing it. Where results-oriented management was introduced under the project on a limited basis, as in South Sulawesi and Bali, it is no longer used. The failure of the initiatives is likely to have been due to (i) the high level of complexity of the results-oriented management system proposed and lack of adequate explanation of the concept, (ii) the difficulty of introducing new concepts into the bureaucracy, and (iii) the inability of the project to integrate them into DGWR systems. Decentralization to the regions made it difficult to impose management systems on provinces and districts, while Indonesias strict budgetary and control systems have the effect of supporting existing relationships and implementation systems. 35. Technical Standards and Practices. To some extent, the Project contributed to the development of standards and practices. For example, water quality standards were revised and disseminated, at least to project provinces. However, in some provinces (e.g., South Sulawesi and North Sumatra) water quality data collection remains weak and key parameters are not analyzed due to a lack of funding. Conversely, all relevant parameters are analyzed in Bali. Hydrology data collection and publication is better than pre-project and a higher proportion of stations are functional. However, the proportion of damaged and non-functional stations is increasing, as indicated in Table A1.4. The automatic data loggers have demonstrated variable performance. In Bali, most are functional, while all have failed in South Sulawesi, North Sumatra and Nusa Tenggara Barat (NTB), where they are reported not to have worked since 2002. This is unfortunate, as they can save much time and effort in the transfer of river flow data to the database. Provinces are using the digitizers provided under the Project to transfer data from their paper rolls to databases, and the project-supplied Tideda software continues to be used. However, other software has not proved sustainable (e.g., Hymos, which did not survive the Year 2000 computer problems and Hydroper, which was intended to support river basin modeling but proved ineffective in Indonesian conditions). Data management systems were established and continue to function. However, websites, databases, local area networking, and internet links experience problems. The Water Resources Data Center operates the DGWR intranet and website at a basic level. Links to the provinces are not maintained due to low internet connection speed. Limited programming skills remain in the center, and further support and hardware are required (due to be provided under ADBs Participatory Irrigation Sector Project). 36. Human Resource Systems and Skills of Water Resources Management Agencies. Substantial training of trainers and on-the-job training was undertaken under the Project. It is likely that some of this training was effective in making individual staff more aware of issues in and approaches to modern water resources management. However, most staff members

12 interviewed could recall little about specific short courses and any resulting benefits. No workplace follow-up surveys were undertaken to attempt to define what impact the courses had on their participants. Graduates from the DGWR Pusdiktek (Technical Expertise Education Centre) masters degree program interviewed by OEM spoke highly of the course. However, in some core project provinces (e.g., North Sumatra), many of the participants came from centrally-run projects, thus limiting the effect on provincial water resources management. Some aspects of the course would nonetheless have assisted in project planning and management. The integrated and coordinated water resources planning and allocation based on river basin units, envisaged as an outcome, has not yet occurred, though a useful foundation has been laid. The complexities of integrated management in the Indonesian bureaucratic and social system remain a major barrier to this objective. There is little evidence of improved water quality monitoring, except in Bali. The demarcation between DGWR and the provincial environment agencies leads to divided responsibilities and a lack of clarity about their respective programs. Provincial officials in the three core provinces visited were unsure why the PWRSs were collecting water quality data. 37. Some significant outcomes have been achieved relating to capacity improvement, notably in the masters degree and training-of-trainers programs. However, it is widely believed that there is a marked shortage of middle level managers, including in DGWR, to take over from the current senior managers when the latter retire (within approximately five years). The situation is worse at the provincial level, where provincial governments have eroded the skilled workforce in the PWRSs through transfers of personnel to other sectors. At district and balai levels capacity is often limited, though in some cases well-qualified teams have been built up. The Jeneberang river basin balai in South Sulawesi includes two masters and six bachelors degree holders among its 21 professional staff. 38. The project design included a public awareness campaign, intended to commence about 15 months after inception. This activity was a useful addition by the appraisal team to the project design, though no detail is provided in the RRP or project administration memorandum. In practice commencement was greatly delayed with design of materials by University of Indonesia in 2001 and the conduct of trials in Ciliwung (West Java) and Brantas (East Java) river basins in the last year of the Project. No evaluation of the campaign was undertaken, but it is reported by PCR (para 55) to have had high DGWR commitment and been very beneficial. The government PCR lists more than 80 leaflets, videos and other materials, many of which should be relevant to future campaigns. Awareness-raisingof both the public and provincial governmentswill be an important feature of future water resources development, to ensure support for improved water resources management and related activities such as hydrology data collection. 39. Changes to the project design included the contributions made to NSIASP and to WATSAL. The Project incorporated a number of NSIASP activities due to that projects late commencement and reduced budget, but there appears to have been little linkage between the two projects. Although planned activities were implemented, the Projects contribution to NSIASP outcomes was marginal, due in part to the relative weakness of the North Sumatra PWRS and its lack of commitment to project objectives. The contribution to WATSAL was considerable, and according to World Bank staff, invaluable. As a sector adjustment loan, WATSAL provided no funds directly to the water sector, and relied on other projects and TAs to assist the Government meet its objectives. The third and largest tranche of WATSALs policylinked loan was cancelled in 2003 due to delay in meeting conditionalities, but possibly also due to the extent of Indonesias recovery from the 1997 financial crisis and reduced need for budgetary support.

13

40. While training was reasonably efficient and substantially exceeded its targets, its effectiveness was limited by several factors. In many cases trainees came from provincial projects, limiting their ability to use any skills gained in the structural PWRSs. The maximum age of 45 greatly reduced the pool of training candidates in provinces such as North Sumatra. Proposed trainees of the intended relatively senior level were often not able to commit the necessary time for the training course, and sent nominees, reducing the potential impact of the training. D. Efficiency

41. Overall, OEM agrees with the PCR rating of the Project as less efficient. No economic efficiency assessment was undertaken during project design or by PCR, since economic gains are difficult to relate directly to capacity-building activities. Efficiency estimation therefore rests on efficiency of process and cost effectiveness. 42. Efficiency of process was limited during the Projects first 3 years, with slow implementation caused by a number of factors, outlined in para. 16. However, implementation accelerated in 1999 and was relatively efficient during the last 3 years. Equipment procured under the project was generally considered useful by the provinces, although some suggested that the project office should have discussed equipment requirements with the provinces and tailored purchases to meet provincial needs. This might have prevented the acquisition of equipment that was not considered relevant, such as mobile laboratories and water quality testing equipment in North Sumatra. In some provinces vehicles were taken by provincial management, leaving inadequate transport for their hydrology units. 43. Cost-effectiveness was limited by factors beyond the control of the project, notably the decentralization policy that came into effect in May 1999. The Project made major efforts to adjust to this situation, but in practice many of the activities remained centrally focused, limiting the cost-effectiveness of regional activities. In practice a carefully structured series of TAs may be a more cost-effective method of reaching desired capacity-building outcomes. Despite institutional issues and frequent reorganizations, there were positive features of the project from a cost-effectiveness perspective. Training was done at the Governments standard unit rates, which were considered cost-effective. BAPPENAS issued guidance on acceptable unit rates to be adopted for training activities (PCR, para. 55). As highlighted by the government PCR, the doubling of consulting inputs was accompanied by only a marginal increase in costs over the level of the RRP. This was due to rupiah devaluation, but also to minimizing consultant recruitment cost, which was a major focus of the consultant selection processes in DGWR. Extensive use of consultants can mitigate against efficiency, because much of the analytical, project design, policy and planning work may be passed to them. This tendency remains evident in DGWR. While consultants can be efficient in terms of work produced (e.g., guidelines, manuals, and policy statements) the use of consultants may result in minimal capacity or capability building. The trainer training program was meant to overcome this to some degree, but most training programs are still conducted by outside consultants rather than in-house trainers. The training of water user associationswhere the PWRSs often assume a significant training roleis an exception. A number of training programs are conducted each year by Pusdiklat; irrigation training modules developed under the Project are still used, but need to be updated.

14 E. Sustainability

44. The Project is considered less sustainable. It was intended to be the first of a number of initiatives to address water resources concerns, and it is unlikely that any single project could sustainably address the sectors many institutional concerns. Some project outcomes are likely to be sustained, including, for example, the ongoing capacity strengthening through the Pusdiktek masters degree program, and the legislative base provided by the 2004 Water Law. However, in other areas it appears that DGWR is proceeding much as it did previously, and has not taken full advantage of the opportunities provided by the Project. For example the WRDC now lacks the capacity and capability to act as a serious data repository for DGWR or the provinces. Further support, planned under the Participatory Irrigation Sector Project (PISP),15 will be required for it to become useful and widely used. The Resource Information Center established in Pusdiklat presumably provided a useful source of training related or consultant capability data but it could not be located by DGWR staff. 45. At the provincial level, sustainability was severely limited by the Projects centralized implementation approach, which resulted in minimal impact by the Project on the capacity of the local government organizations (dinas). The hydrology units supported in the core provinces succeeded in greatly improving their performance under the Project. However, in most cases the units are gradually losing capacity and capability, due to lack of budget, training and reinvestment. Bali is a partial exception. In South Sulawesi, a motivated workforce is frustrated by computer breakdowns and a lack of funds to repair or maintain field equipment. This demonstrates a lack of commitment on the part of PWRS management, although the overall budgetary restrictions facing the provinces are recognized. A dependency syndrome appears to have developed, with a burst of project-related activity, followed by a steady decline towards the former level, in anticipation of further project support (Table A1.4). IV. A. Socioeconomic Impact OTHER ASSESSMENTS

46. The Project has the potential to contribute to significant socioeconomic impact in the long term. Water resources will become increasingly scarce in many river basins in Java and a proportion of basins in the larger islands. The 2004 Water Law provides a good basis for resources management by institutions from the district to the national level and this should assist in resolving conflicts and improving water utilization. Government agencies appear to have accepted the need for participatory planning and management, and this should allow the concerns of a wider range of stakeholders to be heard in future. The move towards river basin management, though difficult, has the potential to improve water management and allocation decisions, and should thus have a positive impact on economic development. B. Asian Development Bank Performance

47. ADB performance was satisfactory, although there were shortcomings in the early years of the Project. Missions were fielded reasonably regularly, particularly in the initial years when implementation was slow. A total of 12 missions were fielded in 7 years between project

15

ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of Indonesia for the Participatory Irrigation Sector Project. Manila. (Loan Nos. 2064-INO(SF)/2005-INO, for $130 million, approved on 19 December).

15 inception and completion, with an input of 183 days.16 The missions provided valuable support and direction to the Project. However, few visits were made to core provinces, with no visits to the noncore provinces. The government PCR concludes that more frequent visits to the provinces would have assisted in instilling a sense of belonging to the project and thus improved the level of commitment of provincial managers. Overall, more intensive and more consistent monitoring, with fewer changes of mission staff in the first 3 years, could have assisted the Project to be more responsive to the changes and uncertainties of the political and administrative climate following the financial crisis and fall of the Suharto government. ADBs midterm review in February 1998 was successful in promoting more rapid implementation. However, some DGWR staff considered that postponement of implementation, perhaps in the last half of 1999, followed by reformulation to take account of institutional changes, may have been preferable. As the first ADB project of its type, more intensive monitoring and support would have been useful. 48. The ADB PCR (para. 47) indicates that ADB devised a project output monitoring system that provided detailed lists of issues and time-bound action plans for DGWR. However, the design provided few indicators at purpose level, and no relevant outcome monitoring was undertaken. ADB could have assisted the Project develop outcome indicators, and established measurement mechanisms (including, for example, the impact of training courses in the workplace or the proportion of training undertaken by in-house trainers during and post-project). C. Borrower Performance

49. Borrower and executing agency performance was also satisfactory, although marginally so. DGWR and its predecessor organization made strong efforts to implement the Project efficiently in a difficult institutional and fiscal environment. The PCR (para. 45) reports that CPO was established on time and was generally staffed by capable personnel throughout project implementation. However, it was not fully staffed until 1998. With almost 50 outputs and seven consulting packages, the project was complex and difficult to implement. The two MPW reorganizations during project implementation added to the workload and hampered project progress, while decentralization limited impact at the regional level. V. A. Issues ISSUES, LESSONS, AND FOLLOW-UP ACTIONS

50. Sustainability and Commitment. Since decentralization, the capacity and capability of project provinces to undertake project-related activities has declined. For example, computers are aging and the ability of the hydrology sections to handle data collection and processing is decreasing as staff leave and skills are lost. While provincial budgetary resources are limited, the decline in capacity suggests a lack of commitment by PWRS management. This is not entirely surprising; for example, government agencies are normally more concerned with new investment and services that relate directly to their clients concerns than with routine collection, management and publication of data. However, hydrological and climatic data are of major importance for the management of existing resources, and particularly for the design of new water supplies, dams and irrigation schemes. Work is merited by DGWR to ensure that proper importance is attached to hydromet data collection. In Nanggroe Aceh Darussalam (NAD),
16

By comparison the World Bank mounted an average of three missions per year to WATSAL over 5 years, with an input of nearly 700 days. In addition, the task team leader moved to the Jakarta office for 14 months in 20022003 to ensure close coordination and enhanced dialogue.

16 despite negligible existing capacity, the head of the PWRS attached great importance to hydromet data collection, placing it at almost the same level as tsunami recovery activities. Many water resources management activities will take place at district level. There is therefore a need to promote the need to adequately resource data collection and processing to local stakeholders, such as governors, heads of districts and subdistricts, parliamentarians and public servants in related sectors. A continuation of the public awareness campaign started under the Project thus needs to focus on government institutions as well as the public. 51. River Basin Management. Limited progress has been made towards the management of water resources on the basis of hydraulic boundaries. While this was a significant project objective, and has been government policy since the passing of Law 11/1974, it has been constrained by many factors including (i) the lack of enabling regulations (provinces cannot develop legislation until the national law and relevant regulations are in place); (ii) the loss of power that may result from sharing management responsibilities and particularly the introduction of participatory, integrated, and transparent systems; (iii) the complexity of integrating the interests of many and diverse stakeholders; and (iv) difficulties in locating appropriate nongovernment stakeholders. Following World Bank recommendations (under the Java Irrigation Improvement and Water Management Project) Indonesia has established balai systems in many river basins and groups of basins. These organizations are under the PWRSs and are responsible for undertaking PWRS functions in the river basins. In practice, much of their work relates to the operation and maintenance of irrigation schemes. While this can be effective, to some degree it is counter to the concept of integrated and participatory river basin management, because it vests more power in the PWRSs. Similar issues relate to river basin management companies (such as those in the Brantas and Citarum basins). The water law outlines the proposed approach to river basin management and provides a clear demarcation of responsibilities (e.g., with inter-provincial rivers being managed by the central government). However, much remains to be done before effective RBO (or councils) are established and operating effectively. It is expected that considerable support will be required in many basins, possibly including TA, for them to operate effectively on a participatory basis. 52. Improving Data Availability. Hydrology, climate, and water quality data are published fairly regularly by most provinces. Annual year books are published that contain daily data records (including, for example river flow, rainfall, temperature, and some water quality information). From 10 to 15 copies are produced for distribution within the PWRSs and forwarding to DGWR and to the Water Resources Research Institute in Bandung.17 The data can be made available to consultants, engineers or students, following a written request to the PWRS and approval by the head or delegate. Hard copy data are then made available for photocopying. Most hydrology sections report that they can also make electronic data available. It is highly desirable to develop systems to provide the data in forms convenient for users, and to advertise their availability. It is a pity to spend so much effort in collecting the data, only to limit their utility by restricting access. Consideration should be given to making the data available on the internet (as currently practiced by Yogyakarta), through university or public libraries, through statistics offices or perhaps through a commercial outlet. In the last case, a company could be contracted by a provincial government to maintain hard and soft copy data in a range of sectors (e.g., mapping, land resources and statistics as well as hydrology and climate) and to sell these to users for an appropriate fee. Brief discussions were held with the Statistics Office in Makassar, which advised that it would be able to keep and make available
17

DGWR proposes to publish hydromet data in future through Bina Program, perhaps limiting the extent of publication by the Water Resources Research Institute in Bandung. This step should be analyzed carefully prior to implementation, because the Institute has considerable resources and skills in relation to hydromet network operation and data analysis, which should be further developed.

17

hydromet data for the province. This would require that the PWRS accept that the data are in the public domain and should thus freely available to the public. Provision of electronic data would require development of an appropriate and user-friendly database. The issue of permissions also needs to be addressed, because a requirement that data requests and approvals be in writing will have a negative impact on the demand for and timeliness of data delivery. 53. Duplication in Water Quality Testing. The PWRSs have traditionally tested water quality. Neither the PWRSs or hydrology sections responsible for collecting the data are able to clearly indicate why this is done, but it appears to be to facilitate monitoring of the suitability of water for specific uses (e.g., domestic or irrigation). Water quality data are also collected by the Badan Pengendalian Dampak Lingkungan Daerah (BAPEDALDAs), whose main responsibilities relate to pollution control and who implement the clean rivers program. At present, the PWRS water quality data are of varying standard. In many cases, lack of budget limits the range of tests that can be carried out. In South Sulawesi, most data relate to physical parameters (e.g., color, temperature) though useful biological and chemical oxygen demand analyses are also conducted. Tests that are necessary or desirable for health related reasons (e.g., bacteriology) are not regularly conducted. The division of responsibility for general water testing between two agencies seems to be an unnecessary division of skills and effort, although the two departments do make efforts to run complementary programs. The issue of rationalization therefore merits consideration by national and provincial authorities, combined with an enhanced program of input and output water quality monitoring by the PDAMs (district level water companies), which are responsible for supplying water for domestic consumption. 54. Extension to Other Provinces. The Project operated in four core provinces with limited hydromet network development activities in a further four. Some provinces, particularly in Java, are already well advanced in their water resources management programs, and need only limited assistance. However, the Projects noncore provinces and most of the non-project provinces outside Java are thought to require significant support in at least two key areas: (i) upgrading, operation, and maintenance of their hydromet networks; and (ii) the establishment of hydraulic boundary river basin management. This should be a major focus of DGWR to the extent that it is able to support individual provinces, and may be considered for TA support in ADBs future program. Any TA could also assess (i) how to provide support to and increase the capacity and capability of the district water resources management staff, and (ii) what should be the relative roles of the province and district. PISP will work with 25 districts, but mainly in relation to irrigation management. Wider water management functions also need to be supported. B. Lessons

55. Capacity-building projects (and TAs) should be demand driven. They should thus only be considered where there is strong demand from senior management and commitment to project objectives. In practice, it is likely to be helpful if a project largely or entirely responds to the governments own plans for institutional development and thus the government effectively takes the lead in preparing the project. Since institutional development is almost inevitably reported by managers as being a good thing it can be difficult to assess real attitudes and the reasons for and extent of any resistance to change. The traditional ADB mode of project design, with a PPTA followed by appraisal, may fail to fully identify the institutional stumbling blocks that are likely to be encountered. There is little that can be done in the context of a project to greatly reduce the risk of institutional failure. At minimum, a detailed institutional analysis should be conducted with major input from the institution itself, combined with (i) in-depth problem analysis allowing definition of the specific problems to be tackled by the project); and (ii) preparation of

18 an improved project framework, including risk analysis, allowing links between outputs and outcomes to be clearly defined, and assumptions made explicit. 56. Capacity Building in Project Modality. Institutional development projects are inherently difficult and long term in nature. A single bigbang project may not be the best way to achieve capacity-building objectives. Innovative systems are difficult to introduce and sustain. For example, two of the main innovations attempted were the use of in-house-advisers and results-oriented management. Neither was successful. The concept of an adviser to PWRS management, able to assist in policy development and planning in several subsectors, is potentially useful and could be further explored by DGWR. Results-oriented management remains relevant and the introduction of simplified systems by DGWR and provinces merits examination. For future major capacity-building activities, consideration should be given to designing a series of TAs, a TA cluster loan or a capacity development loan under ADBs new multi-tranche loan facility. 57. Training Program Timing. Substantial formal and on-the-job training was conducted under the Project. Although few participants have much detailed recollection of the courses or their content, all were positive about the quality of teaching and in most cases the relevance of the course and material. Project experience suggests training programs should be timed to match trainee availability. Annual project budgets often did not become available until May or later, which caused training courses to be conducted during the second half of the year, when many public servants were busy attempting to complete their own programs before losing unspent budget allocations at years end. While rollover of annual allocations is now permitted, it remains desirable to attempt to schedule training courses when the intended trainees are less busy. This may make it desirable for projects with substantial training needs to augment the national and local government training budget with TA funds. This would assist in allowing courses to be scheduled at the optimal time. 58. Masters Degree. The outcome of the Sp-1 and masters degree program at Pusdiktek in Bandung has been highly positive. The program is being funded out of the core budget, with a pass rate close to 100% (Appendix 3). Graduates considered the course to be practical and relevant to water resources managers, providing a good basis for promotion within the PWRSs. The only negative feature identified is the number of graduates in some provinces who have been assigned as project managers or assistant managers, where relatively few of the skills learned are directly relevant. However, it is expected that many of the better staff will move into management positions in due course. The lesson that can be drawn from this outcome is that project outputs that are seen to be relevant and in demand by management are far more likely to be sustained post-project than those seen as less directly relevant. 59. Technical Equipment. The installation of high-tech equipment under the project was not successful. Almost all data loggers malfunctioned within 2 months to 2 years of installation in three out of four core provinces (though 9 out of 12 continue to operate in Bali); computer networks and servers did not operate to specification or broke down; while mobile laboratories were largely unused. Telemetry networks (including project-supplied equipment) have often failed to operate for various technical and financial reasons. Where there is a lack of capacity or capability to operate equipment supplied on a sustainable basis, consideration should be given to (i) providing appropriate training to staff; (ii) providing adequate spare parts under the original contract; and (iii) writing service agreements with the supplying company, prepaid for the life of the equipment if necessary. Providing consumables from project budgets may not be desirable, as this prevents development of self-reliant systems and fosters dependency.

19

60. Other lessons, including a number brought forward from the PCR (para. 61), are listed below. Other PCR lessons and recommendations are also supported. (i) (ii) New concepts, such as results-oriented management, should be carefully integrated with existing systems and build on existing strengths. There is a need to promote adequate resourcing of data collection and processing (e.g., hydromet) among local stakeholders, such as governors, heads of districts and subdistricts, parliamentarians and public servants in related sectors. The public awareness campaign started under the Project should be continued, with a focus on government institutions as well as the public. Systems should be developed to make data available in convenient form to users, and to advertise availability. Classical training has limited application. Although on-the-job training of trainees may be more time consuming, expensive and require skilled delivery, it is generally more beneficial. Close monitoring and flexibility by the Government and ADB are desirable for pilot or initial projects in a sector.

(iii) (iv) (v)

(vi) C.

Follow-Up Actions

61. A number of the issues and lessons invite follow-up action by the Government as outlined in Table 3. The proposed follow-up actions were discussed with government officials during OEM and agreed in principle. Table 3: Suggested Follow-Up Actions
Institutions Suggested Action Responsible 1. Assess the need for external TA to develop optimal DGWR/WRRI/ ownership, operation, and maintenance systems IRM for the hydromet network. 2. Define possible TA on river basin management in DGWR/IRM non-WISM provinces. 3. Dispose of redundant project assets. Project PWRSs/ DGWR/WRRI 4. Conduct distribution study for hydromet data. DGWR 5. Assemble and make available all project-related MPW/WRDC materials. 6. Resurrect the Resource Information Center. WRDC 7. Promote local participation in evaluations. OED Suggested Timing End-2006 Monitoring ADB

End-2006 Mid-2007 Mid-2007 End-2006

ADB ADB ADB ADB

End-2007 ADB All future BAPPENAS evaluations in Indonesia

ADB = Asian Development Bank, BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Development Planning Agency), DGWR = Directorate General of Water Resources, IRM = Indonesia Resident Mission (of ADB), MPW = Ministry of Public Works, OED = Operations Evaluation Department, PWRSs = Provincial Water Resources Services, TA = technical assistance, WISM = Water Resources and Irrigation Sector Management Program. WRDC = water resources data center, WRRI = Water Resources Research Institute (Bandung). Source: Operations Evaluation Mission.

62. Arrest Hydromet Network Deterioration. The hydromet networks of the Projects core provinces are deteriorating, with respect to field equipment, and data processing and storage. In Bali, under the Project, the proportion of damaged automatic water-level recorders declined

20 from 100% to 5% in 2002. However, by 2006, the proportion had increased again to around 30%. The situation in non-project provinces is not known in any detail; however, NAD and West Java probably represent two extreme situations, with all stations reported as damaged in NAD and most functioning in West Java. TA is suggested to review the situation of project and several non-project island provinces to assess ways to establish sustainable networks and manage their data more effectively (software, data management, networking, and backup). The TA could provide updated computer systems and training to increase the utility of data within the PWRSs. During the design of such a TA, research would be required by DGWR to ensure that target provinces are motivated to maintain their hydromet networks. It may be desirable in some provinces to reduce the number of hydromet stations, while improving the quality and management of those that remain. This applies particularly to provinces such as NAD where the network has deteriorated significantly. The network should be needs-based, and should not be eliminated from rivers where there are potential water conflicts or development needs. Hydromet data recording is patchy. In South Sulawesi, many stations are missing around 30% of their data. The problem relates in part to low payments to the station keepers, with average monthly wages of around Rp40,000. DGWR is proposing an increase in wages, which could be tied to a responsibility system, with penalties imposed for non-reporting of problems. 63. As part of any TA, assessment could be made of the optimal institutional structure for ownership, operation and maintenance of the hydromet network, e.g., whether stations should continue to be operated by many agencies (PWRSs, DGWR, and the Water Resources Research Institute), or whether the structure should be streamlined. The desirability of DGWR and the PWRSs continuing to conduct water quality monitoring should also be assessed. 64. Possible TA on River Basin Organisation Development. It is likely that difficulty will be experienced in establishing effective RBOs in most provinces. TA is suggested once the relevant regulations are in place, to work in conjunction with DGWR and selected pilot provinces, to assist in establishing effective and participatory RBOs. The main aim would be to define the options for RBO establishment, in order to support the national move to hydraulic boundary water resources management. Care would be needed to avoid overlap with the Water Resources and Irrigation Sector Management Program, which is planning to support river basin water resources councils or committees in river basins in 13 provinces. 65. Disposal of Assets. In North Sumatra, most of the water quality equipment remains in storage as the PWRS is not undertaking water quality analysis. This equipment should be transferred to another PWRS, to BAPEDALDA, or sold, as it will otherwise simply deteriorate or become obsolete. A precedent has been set in the return of the mobile water quality lab by Bali PWRS to Jakarta. Possible options for disposal of the other non-used mobile labs (North Sumatra and South Sulawesi), boats, engines and other equipment in all project provinces needs to be researched and followed up. The Water Resources Research Institute in Bandung indicated that it would be interested in receiving one or more of the labs. 66. Conduct Distribution Study for Hydromet Data. A first step in improving the availability of hydromet data would be to assess demand for data and options for making data available to potential users on a cost- and time-effective basis. DGWR is considered to have the capacity to undertake such a study, but consideration could be given to providing support under the hydromet equipment TA outlined above. 67. Assemble and Make Available All Project-Related Materials. As recommended by the PCR, it is highly desirable that the guidelines, manuals and teaching materials produced under the Project be assembled and made freely available to all interested parties. As a first

21

step, they could be located, copied and placed in the MPW library. Electronic copies should be located from the MPW human resources development center (Pusdiklat), the consultants or elsewhere and placed on the MPW website by the Water Resources Data Center. 68. Resurrect the Water Resources Information Center. No one interviewed by OEM could recall anything about the Center. Nonetheless, the maintenance of a register of technical skills and training capability is potentially a useful concept to assist central and provincial managers identify appropriate skills to support development or training activities. Locating, updating and disseminating a skills register for the water resources sector is suggested as an activity for WRDC under the forthcoming PISP. The activity could also involve Pusdiklat. 69. Local Participation in Evaluations. BAPPENAS is responsible for national evaluation in Indonesia. BAPPENAS staff have expressed interest in participating in OEDs evaluation missions, and this could be pursued in future performance and thematic evaluation studies. It is anticipated that BAPPENAS can fund its own participation. Participation in field work (at a minimum) by line agency staff is also desirable and should be encouraged, if possible including the allocation of funding from the OED budget for travel and per diem costs for participating staff.

22

Appendix 1

PROJECT-RELATED STATISTICS Table A1.1: Cost Breakdown by Project Component ($000)

Appraisal Actual Category Foreign Local Total Foreign Local Total A. Investment Costs 1. Civil Works 1,690 4,681 6,371 352 1,025 1,377 2. Equipment 8,325 176 8,501 4,647 324 4,971 3. Consulting Services 2,866 3,987 6,853 4,169 2,642 6,811 4. Training i. Management 1,466 294 1,760 2,214 994 3,208 Development Program ii. Specialist Education 4,140 772 4,912 1,696 208 1,904 Program iii. Other Training 431 3,492 3,923 131 364 495 5. Project Administration 0 3,839 3,839 0 599 599 Support B. Recurrent Costs 0 3,120 3,120 0 173 173 18,918 20,361 39,279 13,209 6,329 19,538 Base Cost Taxes and Duties 0 3,360 3,360 0 412 412 Interest during Construction 3,617 0 3,617 3,000 0 3,000 Total 22,535 23,721 46,256 16,209 6,741 22,950 ( ) = negative. Source: Asian Development Bank Project Completion Report. Change (%) Foreign Local Total (79) (44) 45 (78) 84 (34) (78) (42) (1)

51 (59) (70)

238 (73) (90) (84) (94) (69) (88) (72)

(82) (61) (87) (84) (94) (50) (88) (17) (50)

(30) (17) (28)

Table A1.2: Yearly Expenditures by Component ($000)

Item A. Component 1 1. Civil Works 2. Equipment 3. Consulting Services 4. Management Development Program 5. Other Training 6. Project Administration Support B. Component 2 1. Civil Works 2. Equipment 3. Consulting Services 4. Management Development Program 5. Water Resources Special Education Program 6. Other Training 7. Project Administration Support C. Component 3 1. Civil Works 2. Equipment 3. Consulting Services 4. Management Development Program 5. Water Resources Special Education Program 6. Other Training 7. Project Administration Support Total Recurrent Costs Total Base Cost Interest during Construction 24 97 Taxes and Duties Total 24 97 Source: Asian Development Bank Project Completion Report. 1995 1996 1997 836 63 625 140 8 569 45 255 1998 366 11 315 1999 2000 525 1,131 135 350 369 544 78 100 40 2001 956 39 24 455 365 33 40 2002 1,155 91 565 437 22 40 899 151 104 264 64 235 21 60 1,457 155 131 370 736 16 49 3,511 21 3,532 11 0 3,543 Total 4,969 39 693 2,854 1,020 163 200 6,609 751 2,445 1,684 64 1,352 113 200 7,786 587 1,832 2,273 2,124 552 219 199 19,365 173 19,538 3,000 412 22,950

40

40

483 1,564 1,746 1,347 7 119 276 153 188 935 597 366 268 492 377 283 387 62 47 476 29 40

254 15 20 18 1,911 145 726 317 387 218 92 26 4,000 42 4,042 560 0 4,602

1,138 1,138 22 35 24 134 707 304 271 127 207 3 3 11 23 2,299 1,826 8 28 2,307 1,854 263 439 0 0 2,691 2,293

1,319 1,228 50 180 386 431 296 279 464 266 83 22 40 50 4,196 3,531 56 18 4,252 3,549 713 893 0 0 4,577 4,830

Appendix 1

23

Table A1.3: Costs Estimated by Government Project Completion Report ($000)

Investment Cost A. Component 1: Strengthen National Framework 1. Consulting Services (primarily Package 1) 2. Equipment Subtotal (A) B. Component 2: Strengthen Regional Capacity 1. Civil Works 2. Equipment 3. Consulting Services i. Package 2 ii. Package 6 iii. Package 7 4. Training Subtotal (B) C. Component 3: Strengthen DGWR 1. Civil Works 2. Equipment 3. Consulting Services i. Package 1 (primarily) ii. Package 3 iii. Package 4 iv. Package 5 4. Training i. Management Development Program ii. Water Resources Specialist Education Program iii. Other Training Subtotal (C) D. Project Administration Support Project Administration Support Total Investment Costs Recurrent Costs Recurrent Cost Total Project Cost Before IDI, Taxes, and Duties Taxes and Duties IDI Total Project Cost Total Consulting Costs Investment Costs excluding Consulting Consulting Costs as Proportion of Total Investment Foreign 678 215 893 375 3,422 1,397 172 543 186 6,095 53 879 1,255 996 764 103 1,330 911 109 6,399 Local 396 24 420 966 357 1,210 82 374 122 3,111 135 123 891 305 234 32 410 279 200 2,608 599 6,738 173 6,911 412 7,323 3,524 3,214 52% Total 1,074 239 1,313 1,341 3,779 2,607 253 917 309 9,206 188 1,002 2,146 1,301 998 135 1,740 1,190 309 9,007 599 20,125 173 20,298 412 3,000 23,711 9,431 10,694 47%

13,387

13,387 3,000 16,387 5,908 7,480 44%

IDI = interest during implementation, DGWR = Directorate General of Water Resources. Source: Government Project Completion Report.

24

Appendix 1

Table A1.4: Hydrometeorological Equipment Status and Condition of Equipment by Province

Province A. Aceh Total Good Light Damage Heavy Damage Working Latest Publication of Data B. North Sumatera Total Good Light Damage Heavy Damage Working Latest Publication of Data C. Bali Total Good Light Damage Heavy Damage Working Latest Publication of Data D. South Sulawesi Total Good Light Damage Heavy Damage Working Latest Publication of Data Total Total Good Light Damage Heavy Damage Working River Flow Stations AWLR Staff Gauge 31 10 11 10 10 2005 70 34 14 22 34 2001 48 27 18 3 27 2005 42 42 0 0 42 2005 191 113 43 45 113 9 2 2 5 2 2005 7 4 3 4 2001 3 3 0 0 3 2005 40 40 0 0 40 2005 59 49 2 8 49 Rainfall Stations ARR Manual 17 10 3 4 10 2005 24 4 6 14 4 2001 21 21 0 0 21 2005 13 2 10 1 2 2005 75 37 19 19 37 0 0 0 0 0 2005 35 31 0 4 31 2001 6 6 0 0 6 2005 227 98 122 7 98 2005 268 135 122 11 135 Climate Stations 5 1 0 4 1 2005 15 3 5 7 3 2001 9 9 0 0 9 2005 23 13 6 4 19 2005 52 25 11 15 32

Core Provinces (% of Equipment Not Working) North Sumatera 1997 92% PCR 2002 51% OEM 2006 51% Bali 1997 PCR 2002 OEM 2006 1997 PCR 2002 OEM 2006 100% 5% 44% 73% 16% 0%

80% 0% 43% 100% 0% 0% 46% 8% 0%

82% 36% 83% 80% 0% 0% 86% 59% 51%

46% 0% 11% 0% 0% 0% 56% 0% 50%

100% 0% 80% 86% 0% 0% 89% 20% 38%

South Sulawesi

1997 88% 75% 83% 34% 92% PCR 2002 24% 3% 32% 0% 7% OEM 2006 41% 17% 51% 50% 38% ARR = automatic rainfall recorder, AWLR = automatic water level recorder, OEM = operations evaluation mission, PCR = project completion report. Source: Provincial Water Resources Services.

Total

Appendix 2

25

PROJECT OUTPUTS
Output at Appraisal Output at Completion Comments by OEM
Component 1: Strengthening of National Policy and Coordination Framework Output 1.1: National Water Resources Institutional Framework Planned Outputs Actual Outputs 1.1.1. Agreement on operating Agreement on operating procedures reached procedures for national water resources coordination framework 1.1.2. National water Guideline Strengthening National Policy and Coordination resources coordination Framework prepared in 1998, but procedures not framework operationalized. Academic paper for the National Apex operationalized Body for Water Resources: used to prepare draft presidential decree (see 1.1.5) 1.1.3. Capacity-building needs A training needs assessment was completed in December identified 1997 and a more detailed assessment in mid-1998 Additional WATSAP Activities 1.1.4. Water resources reform Package 1 assisted working group in drafting National policy prepared Policy for Water Resources Management and academic paper for draft presidential decree for National Policy for Water Resources. Guideline on National Policy for Water Resources

Project strongly supported WATSAP and among other interventions was instrumental in leading to passage of water law 1.1.5. Draft of presidential Assisted in drafting presidential and ministerial decrees for National water council decree regarding the Establishment of national apex body for water resources yet to be formed. It has National Water the potential to assist in Resources Council integrated and prepared participatory water resources management 1.1.6. Revision of draft law on Assisted working group in preparing a technical paper and Law passed but not yet water resources a draft law for water resources and several draft effective. Only 2 out of development prepared regulations. A new water law No. 7 2004 was passed in 14 regulations approved January 2004 by cabinet Output 1.2: National Operational Management Guidelines 1.2.1. National database Guidelines prepared on how to establish a monitoring Water supply and system established to system for water supply and demand. demand models do not monitor water supply appear to be used and demand 1.2.2. Studies initiated to Studies initiated to review water resources policies and review water resources regulations policies and regulations 1.2.3. National water Studies on water resources policy and regulations were resources management prepared in 1997 and were approved by DGWR. These guidelines established studies have led to drafts of new policy and regulations. 1.2.4 Technical paper on MIS Draft national water management guidelines including for National Water operating policies and strategies were compiled and Resources prepared approved by DGWR in 1997. 1.2.5. General design of Technical paper on management information systems national information completed and used in the design of the central and system prepared provincial MIS system. 1.2.6. Local area network General design for MIS completed and used in the detailed Limited data is system installed design and implementation of the central MIS data maintained by the warehouse. WRDC. Extension planned under PISP 1.2.7. Staff trained to operate Local area network improvements were then designed and Local area network has local area network installed through package-7 consultants expanded from 25 to system 100 terminals in DGWR, with about 1000 hits per month

26

Appendix 2

Output at Appraisal

Output at Completion

Comments by OEM

Component 2: Strengthening Capacity of Regional Institutions for Integrated Water Resources Development and Management Output 2.1: Water Resources Planning and Management Strengthened in Selected Provinces 2.1.1. Water management PWMCs have been activated in three provinces: NTB, Bali, South Sulawesi hasn't committees established and South Sulawesi, with operational secretariats met since 2004, North (on the basis of prior established in NTB and South Sulawesi. Basin water Sumatra established a governors decrees) and management committee established for Jeneberang basin water management operationalized in in South Sulawesi, and two meetings held in 1999. Further council in April 2006 provinces and river inputs are considered necessary before the committees under Law 7, but it is not basins as required. are judged to be sustainable. Balais are being established yet operational. Project provinces are (i) Committees mainly used North Sumatra, (ii) to tackle emergencies South Sulawesi, (iii) Bali, and (iv) West Nusa Tenggara 2.1.2. Hydrometeorological A total of 472 units of hydrometeorological data Data loggers mainly networks upgraded, observation and collection stations have been upgraded non-functional except in facilities and equipment and 37 new stations built. A total of 79 data loggers were Bali. Hydromet stations procured, and procured and 45 have been installed for direct downloading tending to deteriorate hydrology unit staff of water-level data in digital form. Training materials and trained in four above operating guidelines prepared. provinces as well as in (i) South Kalimantan, (ii) South East Sulawesi, (iii) Irian Jaya, and (iv) Maluku 2.1.3. Water resources Provincial spatial geographic information system database Bali able to use, South database established by in MapInfo software developed by consultants in four Sulawesi and North river basin provinces mentioned in 2.1.1, to support water resources Sumatra not using. Little planning activities, including information on level of (if any) updating. Staff development and availability of data such as location of developing independent station, catchment and basin area, and administrative systems in South boundaries. Sulawesi 2.1.4. Water allocation and Water demand and availability profiles of selected pilot Water demand data accounting system basins prepared for each province. Water management generally not available. established in each units ready for establishment of BWMC. Data support Hydroper did not work province systems for water allocation introduced as a pilot initiative effectively in Indonesian in the Ayung Basin in central Bali. conditions 2.1.5. Water allocation Training provided in Hymos software operation, data Tideda used in all operation implemented support systems software operation, hydrometeorological provinces except North in pilot basins measurements, map development using MapInfo, and Sumatra. Hymos ceased database development using Tideda software. Some staff functioning in 1999 members in three core provinces can now use Tideda for (reported to be a Y2K data processing. problem) Additional WATSAP Activities 2.1.6. Legal instruments for Technical paper I on present and future framework for Much uncertainty over national hydrology hydrology management in DGWR and Puslitbang Air future of central management prepared Bandung was published on 14 December 2000. Academic hydromet data paper II on guidelines for inter-agency cooperation and publication formation of national hydrology network was published on 18 October 2000. Decree of director general on future hydrology management was issued on 2 August 2000. Implementation plan for WATSAP Hydrology Program was published on 15 January 2001.

Appendix 2

27

Output at Appraisal

Output at Completion

Comments by OEM

Improvement of Water Resources Data Management (transfer from ADB Loan No.1579-INO) 2.1.7. MIS data warehouse Meetings held in Jakarta, five provinces, and five pilot MIS in North Sumatra designed for five districts, and user requirements established. Information and NAD not effective. provinces : (i) Aceh, (ii) was collected and inventory made of databases built. No information on other North Sumatra, (iii) Review and evaluation of data management process provinces, but no links to West Sumatra, (iv) complete. Data warehouse designed and user needs center Riau, and (v) Jambi established. 2.1.8. MIS data warehouse Data warehouse (WRDC) procured and installed by the Equipment now old. procured and package-7 consultant in DGWR office under DGWR, with Limited data stored, commissioned. WRDC two-server system and nine workstations. Center is limited access in established operational Jakarta, none from provinces 2.1.9. Local area network Local area network system improvements completed and 100 workstations improved and system commissioned, including fiber-optic connection, high-speed connected. More data operational switches, and 25 workstations. input needed. Usage limited. Upgrading planned under PISP 2.1.10. Website established Web site designed and operational, connected through Website slow to access WRDC established within MPW domain during office hours. http://sda.KIMPRASWIL.go.id More bandwidth needed. Updating required, e.g., with current draft regulations 2.1.11. Computer equipment Computers and ancillary equipment installed Computers old. installed in five Webserver provinces and five pilot unserviceable districts 2.1.12. Staff trained Training of staff at central, provincial, and pilot district More training needed. levels completed. Lack of programming skills Output 2.2: Water Quality Management Strengthened in Selected Provinces 2.2.1. Preventive river This activity was deleted from package-2 by the Directorate maintenance system of Water Resources as river maintenance has no direct upgraded and relationship to water quality strengthened 2.2.2. Water quality standards National water quality standards were disseminated by Value of data uncertain disseminated by DGWR DGWR to regional agencies through a seminar held in to regional agencies Makassar in December 1998 concerned 2.2.3. Water quality database Water quality testing equipment was supplied to the four South Sulawesi only and monitoring system core provinces in 1999 and 2000. This included a mobile testing a few parameters operationalized in each water quality laboratory as a fully equipped bus. The due to lack of budget. province database and monitoring system was operationalized Not used for effective monitoring 2.2.4. Water quality monitoring The regional and provincial environmental agencies in four Data are provided to coordination provinces committed to cooperate with the PWRSs in BAPEDALDA and are strengthened at water quality management. Coordination between PWRSs published in PWRSs provincial level and local environmental agency for Luppereng, year books. It is not Jeneberang, and Talo basins was carried out through clear who is using them clean rivers program in South Sulawesi or for what purpose (if any) 2.2.5. PWRSs staff skills Water quality monitoring guidelines were prepared. Staff upgraded were trained to carry out the water quality monitoring program in the selected pilot basins after delivery of equipment in August 1999.

28

Appendix 2

Output at Appraisal

Output at Completion

Comments by OEM

Component 3: Strengthening Capacity of DGWR Output 3.1: Policy and Management System in Central DGWR 3.1.1. PAMST set up The PAMST team was set up and was active from Role taken over to some December 1996 to March 1999 and re-activated at the end degree by Coordination of April 2002. Team set up under WATSAL 3.1.2. ROM system Guidelines and workshops were introduced at central level No understanding of established and managers understood the ROM process ROM by officials interviewed by OEM 3.1.3. Twenty in-house Seventeen in-house advisers at central and provincial In-house advisers advisers in place levels went through training, including 3 months at Asian generally not effective Institute of Technology in Bangkok, during project. Positions not continued postproject 3.1.4. Public awareness Preparation activities started in 1999 by PT Istaka AMS. Reported to have been campaign in water Public awareness campaign designed and materials effective but not conservation and quality prepared by the University of Indonesia from May to extended beyond trial maintenance November 2001.Trials were successfully held in the river basins. Will be picked up implemented basins Ciliwung and Brantas. in WISMP river basins Output 3.2: Technical Support to Provincial and District Agencies 3.2.1. New policies in water Dissemination of information on management and water resources management quality started and concepts understood, but new drafts of and water quality water resources policy, regulations, water quality disseminated to guidelines, and MIS were prepared toward the end of provincial and district phase 1 of package -1 in 2000/2001. water resources agencies with implementation guidelines 3.2.2. Management Provincial management information systems starting to be Limited use of provincial information system developed but central data warehouse only recently in systems, no connection between the new place and provincial and central systems just installed. to center. Internet directorates of DGWR access very limited and provincial agencies upgraded in areas such as status of water resources, water allocation by sector 3.2.3. Implementation Central level has disseminated implementation strategies strategies upgraded and disseminated by DGWR to regional agencies 3.2.4. ROM system extended Workshops held in provinces and concepts understood in ROM not understood or to provinces and NTB, North Sumatra, and Bali but in general ROM used districts principles not being applied. 3.2.5 DGWR and PWRSs staff A subdirectorate of hydrology was created in 2000. Skills of Hydrology downgraded skills upgraded staff of the previous DGWR organization were enhanced in 2005 reorganization. Skills in DGWR now somewhat limited Output 3.3: Project Design and Implementation Capacities of DGWR 3.3.1. In-house training Project appraisal capabilities of previous DGWR staff Not thought to be capacities for project members were strengthened during the first part of the continued appraisal established program using project analysis training materials. 3.3.2. Systems for contractor No construction supervision as this work element was supervision and deleted from package-1s scope of work and instead was management undertaken through a separate quality assurance project strengthened outside of ADB loan 3.3.3. Processes involving Beneficiary participation and bottom-up process reported Relevance limited beneficiaries on. Bottom-up process is now widely known, and the following strengthened process is starting to be implemented. decentralization

Appendix 2

29

Output at Appraisal

Output at Completion

Comments by OEM
Human resources management reported to be somewhat improved compared with preproject situation

Output 3.4: Human Resources Management 3.4.1. Human resources A review and assessment report on the personnel division management system of DGWR was prepared in early 1998. An action plan to upgraded upgrade and strengthen the personnel division was prepared in mid-1998 and included initiatives on the human resources information database system, manpower planning, job analysis, recruitment, and performance appraisal. 3.4.2. Career path Draft guidelines and proposals for employee career path development and a development and a manager succession program were manager succession completed in 1997/1998. Proposals accepted by previous program established in personnel division of DGWR and starting to be partly DGWR and provincial adopted, but not followed up through new organization agencies 3.4.3. Staff skills of personnel Training needs of all directorates of the previous DGWR, division upgraded including the secretariat of the director general and the personnel division of DGWR, were assessed. A draft training plan was prepared in mid-1998. Output 3.5: Human Resources Development 3.5.1. A system more Draft operating guidelines for identifying and analyzing responsive to training training needs were prepared in 1997. Staff members needs established responsible for administering training needs in each directorate were trained. 3.5.2. Training capacities Reports were prepared in 1997/1998 on (1) review and strengthened in water assessment of training objectives of central and Provincial resources development institutions (2) short-range improvement plan of the DGWR at center and PWRSs personnel division, (3) guidelines on preparation of training budgets Output 3.6: Technical Support for the Private Sector 3.6.1. Information system for Information system proposed for private sector use but not the private sector implemented strengthened 3.6.2. Consultation A consultative mechanism for active stakeholder mechanisms between participation was proposed but not yet implemented. government agencies and private sector established 3.6.3. Methods for training During ADBs mission of February 1998 it was recognized private sector agencies that many barriers to achieving the objectives of publicstrengthened private partnerships remained. Training programs for the private sector were deleted from package-1s scope of work Output 3.7: Management Development Program 3.7.1. In-house management The responsibility for the in-house management development program development program was assigned in 1997 to package-3 established consultants through the Directorate of Training for Water Resources Output 2: Management development planning organizationally and institutionally anchored in MPW, including (i) institutional assessment for MPW training units, (ii) institutional needs assessment of management development plan capacity building, (iii) establishment of Resource Information Center at MPW, (iv) design of 5-year management development training plan, (v) training of trainers in foreign aid.

Pusdiklat continues to prepare detailed annual training plans

Training modules prepared. Irrigation in use to limited degree, others currently not used

deleted

deleted

deleted

The Ministry has career planning processes in place, but it is not clear how the project has contributed to them Only irrigation modules continue to be used. Need updating

30

Appendix 2

Output at Appraisal

Output at Completion

Comments by OEM

Output 3: Training of In-House Advisers includjng (i) Very late in project preparation of training plan; (ii) training in basic period, limited relevance management by Institute of Management, University of to project due to lack of Indonesia, in NovDec 1999; (iii) training in English institutional support. Not Language, Language Training Institute, JanMarch 2000; continued post-project (iv) overseas training in water resources management at Asian Institute of Technology, Bangkok, MarchMay 2000. Output 3.8: Water Resources Specialist Education Program 3.8.1. Water Resources Work initially undertaken through package-1 included (i) Course continued postSpecialist Education improvements in admission testing to improve student project and strongly Program strengthened selection, (ii) procurement of 61 computers, and (iii) supported. identification of laboratory requirements. Responsibility for the Specialist Education Program was then placed in package 4 with implementation through the Institute of Technology Bandung. BWMC = basin water resources management committee, package-1 = Capacity-Building Package 1 (consultants engaged under the Project), DGWR = Directorate General of Water Resources, DSS = data support system, MPW = Ministry of Public Works, NTB = Nusa Tengara Barat, OEM = operations evaluation mission, PAMST = policy analysis and management support system, PISP = Participatory Irrigation Sector Project PWMC = provincial water resources management committee, PWRS = provincial water resources service, ROM = results-oriented management, WATSAP = water sector adjustment program, WRDC = water resources data center. Source: Abbreviated from Appendix 3 of Project Completion Report, Operations Evaluation Mission.

Appendix 3

31

SP-1 AND MASTERS DEGREE PROGRAM, BANDUNG 1. The Water Resources Specialist Education Program for Sp-1 and Masters Degree commenced in 1986 under Bipowered in the Campus of Pusdiktek (Technical Expertise Education Centre) in Bandung. Support under the Capacity Building Project for this program covered the 1996 to 1999 intakes for the Sp-1 program, and the 2000 intake for the masters degree program. The length and course content for both programs is about the same (2 years or 4 semesters). However, a research thesis is required under the masters degree program, adding around four months to the duration. Teaching resources are provided through collaboration with Universities such as Institut Teknolgi Bandung and UNDIP (Semarang) and from water resources practitioners from DGWR. The course is reported to be strongly supported, with more than 100 applicants each year from the PWRSs and DGWR for the 30 available places. Table A3: Number of Graduates
1996/ 1997/ 1998/ 1999/ 1997 1998 1999 2000 Water Resources Specialist Education Program 1 3 5 5 2 1 10 4 2 1 1 3 2 5 1 1 1 1 2 1 2 1 1 3 12 7 5 11 7 6 5 7 1 2 2 1 1 2000/ Total 2001/ 2002/ 2003/ 2004/ 2001 Project 2002 2003 2004 2005 Masters Masters Program Program 2 16 6 23 2 5 3 14 3 4 2 3 3 3 4 3 7 1 36 5 30 1 2 1 5 3 5 2 2 0 1 10 6 4 21 1 3 7 4 15 5 1 2 5 2 1 6 48 242 23 30 30 27

Province DGWR (Jakarta) Aceh North Sumatra West Sumatra South Sumatra Riau Jambi Bengkulu Lampung West Java Central Java East Java Yogyakarta West Kalimantan Central Kalimantan South Kalimantan East Kalimantan North Sulawesi 2 Central Sulawesi 2 South Sulawesi 2 3 7 Southeast Sulawesi Bali 6 West Nusa Tenggara 2 3 East Nusa Tenggara 2 3 East Timor Maluku 1 1 Irian Jaya 1 Universities 5 Total 33 32 62 Sources: Project Completion Report and Pusdiktek.

7 4 5 2 1 6 1 1 1 67

2. The number of women entrants to the courses were limited. Based on OEM interviews, South Sulawesi had the highest proportion of female entrants at 19% (4 out of 21); Bali, 14%; and Aceh, 4%. 3. Almost 100% of students passed the course, particularly in the masters degree program. A total of 8% of 247 entrants did not graduate under the Bipowered Program (1986 1991), and only 2% of 364 entrants did not pass the course under the Sp-1 program (1991

32

Appendix 3

2000). There have been virtually no failures under the masters degree program, reportedly due to the strong support provided to participants. 4. The course is classified as highly relevant as it has been designed with a combination of academic background (provided by universities with well-established water engineering skills) and practical experience (gained from senior water resources officials). 5. Interviews were conducted with around 12 graduates of both the Sp-1 and masters degree programs. Most were satisfied with the course, and considered it relevant to their work. In Bali, South Sulawesi, and NTB, Sp-1 and masters degree graduates from Pusdiktek Bandung indicated that completion of the course had assisted in their career development.

Appendix 4

33

CHRONOLOGY OF SIGNIFICANT WATER RESOURCES SECTOR EVENTS

Year 1974 Notes Includes river basin management 1987 BAPPENAS issued the government policy statement on Turnover to farmers of the operation and maintenance of irrigation systems. schemes <500 hectares; introduction of irrigation service fee on larger schemes 1989 Decree of MPW on the Determination of 90 River Territories (wilayah sungai) that in turn encompass 5,590 river basins. 1989 PROKASIH (clean rivers) program initiated by Ministry Covers about 5% of Indonesian of Environment in 11 river basins implemented by its manufacturing facilities in Java, regional offices (BAPEDALDAs) Kalimantan and Sumatra Converted to PROPER PROKASIH in 1994 19952002 World Bank-aided Java Irrigation Improvement and Water Resources Management Project (JIIWMP) July 1997 to early Asian financial crisis Rupiah fell from Rp2,400 to 1998 14,500/$1 by 23 January 1998, recovering to Rp9,500 in early February May 1998Oct End of Suharto government in May, establishment of Launch of WATSAL 1999 Habibie government January 1999 Tim Koordinasi formed 9-member inter-ministerial team, chaired by the minister for economic affairs April 1999 Launching of irrigation management policy reforms Task redefinition, WUA under Keppres No. 3/1999, later followed up by PP No. empowerment, irrigation 77/ 2001 on Irrigation management transfer, decentralization, self financing, and sustainability Oct 1999July Abdurrahman Wahid Government 2001 1999 MPW broken up into Water reform program initiated Ministry of Settlements and Regional Development (Kimbangwil) and a smaller State Ministry of Public Works (MeNeg PU) May 1999 Law 22 - Local Government Decentralization Policy Law 25 and regulation 25 on Fiscal Balance Between Central Government and the Regions 2001 Tim Koordinasi (Coordination Committee for WRDM) Minister of Economic Affairs established Decree 15/M.EKON/12/2001 July 2001 Megawati Government 2003 reversed several reform September 2004 laws and attempted to backtrack on regional autonomy July 2001 Merger of Kimbangwil and MeNeg PU to form new DGWR directorates included Ministry of Settlements and Regional Infrastructure River Basin Planning, (Kimpraswil) with a Directorate General for Water Technical Guidance, and Resources (DGWR) Western, Central and Eastern Region Implementation/ Supervision directorates 20012003 Indonesia Water Resources and Irrigation Reform Implementation Project (IWIRIP) Action Law 11 on Water Resources passed

34

Appendix 4

Year 2003

March 2004 2004

December 2004 2005 April 2005 June 2005

March 2006 June 2006

Action Notes Ministry of Environment completed PP 82/01 on pollution control as well as all implementation guidelines in June 2003) Law 7 passed and declared Superseded Law No. 11/1974 and PP No.77/2001 Law No. 32/2004 and Government Regulation No. 32/2004, which seek to set up transparent governance of water resources within the river basin through the BWRC SB Yudhoyono Government Committed to consolidating selected reforms Regulation 16/2005 on Drinking Water Provision System North Sumatra Water Resources Council formed Reorganization of MPW, including reorganization of MPW Regulation No. 286/PRT/ DGWR (mainly involving a move from geographic to M/2005 sectoral directorates) Meeting of Tim Koordinasi on the finalization schedule for all regulations relating to Law 7/2004 PP on Irrigation No 20/2006 is the first regulation released, out of 14

BAPEDALDA = Badan Pengendalian Dampak Lingkungan Daerah (provincial environment agency), BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Development Planning Agency), ISF = irrigation service fee, MPW = Ministry of Public Works, pP=peraturan pemerintah (national regulation) Rp = rupiah, WUA = water users association. Source: Operations Evaluation Mission.

MANAGEMENT RESPONSE TO THE PROJECT PERFORMANCE EVALUATION REPORT FOR THE CAPACITY BUILDING PROJECT IN THE WATER RESOURCES SECTOR IN INDONESIA (Loan 1339-INO)

On 13 November 2006, the Director General, Operations Evaluation Department, received the following response from the Managing Director General on behalf of Management:

1. Management reviewed OEDs Project Performance Evaluation Report (PPER) for the Project and has the following comments. A. General Comments

2. The Project aimed at assisting the Government in strengthening national and provincial institutional capacity for sustainable and economic management of water resources for multisectoral use. Approved in December 1994, it was one of the few capacity building projects that was supported by a loan rather than technical assistance (TAs). The willingness to borrow at ordinary capital resources terms for the Project confirmed the strong Government commitment to project objectives. This was further demonstrated by the early signing of the loan agreement and the early fulfillment of loan effectivity conditions by the Government. 3. The fiscal crisis of 1997 and subsequent reorganization of the Directorate General of Water Resources Development (DGWRD), the executing agency (EA) for the Project, and decentralization of its functions and mandate affected the project design and its implementation arrangements. ADB and the Government responded to the changing needs, and adjustments were made to the project scope and implementation arrangements. However, frequent changes in the senior management and middle executive positions of the EA and delays in formulating enabling laws and regulations for implementation of the new water law enacted with project support had their impacts on the project performance. We note that the PPER has rated the overall performance of the Project as partly successful, one class lower than the successful rating derived by the project performance report of August 2005. B. Lessons Learned

4. As the first ADB project of its type in the water resources sector, the Project provides a number of important lessons that have been highlighted in the PPER. We agree with the PPER that (i) considering the inherent difficulties and long-term process involved in it, capacity building objectives may not always be best achieved through a single project, and consideration should be given to alternative arrangements such as a TA cluster loan or a capacity building loan under multitranche financing facility; (ii) support for higher education of government staff, as provided under the Project, is highly productive; (iii) new concepts such as results-oriented management tried under the Project should be carefully integrated with the existing systems and build on existing strength; and (iv) on-the-job training of trainees may be more expensive, but it is generally more effective.

C.

Follow-up Actions

5. Management has the following comments on the proposed follow-up actions. (i) We agree with the recommendation that an assessment could be made as part of a TA whether hydromet and water quality data should continue to be monitored by several agencies or the responsibility should be streamlined. However, the suggested timing should be end-2007, and not end-2006. We agree that considerable TA will be required to help develop additional river basin organizations for management of water resources with the basin concept. Any such new initiative should be based on a strong commitment of the regional and national governments, and should draw experience from the ongoing initiatives in major river basins with ADB and other donor assistance. We will initiate dialogue with the government to assess the demand and commitment and may propose suitable assistance, if required, during 20072009 period. While we support the PPER recommendation to dispose off redundant project assets, we consider the suggested timing of mid-2007 as unachievable, considering the Governments internal procedural requirements that would need to be followed for such disposal of assets. It would be more realistic to indicate end-2007 as a target date. We support the recommendation for an assessment of hydromet data demand and identification of available options for making data available to potential users. We support the PPER recommendation for assembling all guidelines, manuals, and teaching materials produced under the Project, making those available to all interested parties. We support the recommendation to prepare and maintain a register of technical skills and training capability at the Water Resources Data Center by end 2007. We welcome OED proposal to encourage local participation in future evaluations by OED and its willingness to support such participation costs from OED budget.

(ii)

(iii)

(iv)

(v)

(vi)

(vii)