This document provides an appraisal of the World Bank financed Orissa Community Tank Management Project. The project on tank rehabilitation in the state was focused on institutional strengthening, agricultural livelihood services and some irrigation improvements in the project area.
The project envisaged the rehabilitation of 900 tanks that provide irrigation for 120 thousands hectares. Under the proposed restructuring, only 320 tanks will be rehabilitated covering 60 thousand hectares albeit with some additional irrigation work and more intensive work on institutional strengthening and agricultural livelihood services in the project area.
The report states that the outcomes of the project should be achieved for the newly defined, reduced project area.
The appraisal can be summed up as -
- The economic and financial analysis suggests that the rate of returns for the reduced-scale project is unlikely to change in any significant manner. Some additional benefits could be expected from the additional work on irrigation, from a more intensive work with Water User Associations and from more emphasis on assistance for livelihoods support services.
- However, on the cost side, the land coverage of the project will be reduced under this proposal to half of its original size while the overall costs of the project will be reduced to less than 40 per cent.
- Marginally higher outcomes on productivity are envisaged as a result of the proposed restructuring albeit their full impact may be felt at the end of the project life or even later.
- A recently completed baseline study confirmed that significant room for increase in crop and livestock productivity indeed exist and can be addressed with the activities to be undertaken by the project.
- All things considered, the restructuring of this project is unlikely to affect economic returns in a significant manner: estimated rate of return for this project was very high, over 20 per cent, and the sensitivity analysis showed a very favorable situation. Even if costs increase by 125 per cent and benefits fall by 37 per cent, still the rate of return will be over 12 per cent.
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