Report No. 34081-PK Pakistan Country Water Resources Assistance Strategy Water Economy: Running Dry November 22, 2005 Agriculture and Rural Development Sector South Asia Region Document of the World Bank Preface ............................................................................................................................... ..vi Overview and Executive Summary ....................................................................................... vu.. I: processfollowed The ........................................................................................................... 1 I1TheChallenges andAchievements ofthe Past: . .................................................................... 3 The challenges .............................................................................................................................. 3 The response-publicinfrastructure ........................................................................................... 7 The response-private infrastructure ....................................................................................... 12 The response-institutions ......................................................................................................... 16 I11The Challenges ofthePresentandthe NecessaryResponses . ............................................. 22 Adjusting to the needs of a changingPakistan .......................................................................... 22 Preparing for climate change ..................................................................................................... 25 Adapting to scarcity: An imminent "water gap" ....................................................................... 28 Getting more product per drop: The "performance gap" ....................................................... 30 Narrowingthe "trust gap" ......................................................................................................... 36 Maintainingthe resource base -- groundwater ......................................................................... 39 Maintaining the resource base -salinity management ............................................................ 45 Reversing large scale environmental degradation ..................................................................... 50 Livingwith floods ....................................................................................................................... 55 Renewing existing infrastructure: Addressing the "maintenance gap" .................................... 58 Investing inpriority new infrastructure .................................................................................... 60 IV: What needs to be done .................................................................................................... 69 Principlesfor a modern institutional structure ......................................................................... 69 Instruments ................................................................................................................................ 70 Unbundling and Competition ......................... ................................................................................................................... 75 Knowledge ............................................ .......................................... 81 What this means for Federal and Provincial Governments ...................................................... 83 V: Principled pragmatism and "rules for reformers" ............................................................. 86 Rule # 1: Water is different .......................................................................... 86 Rule # 2: Initiate reform where there is apowerful need and demonstrated demandfor change 87 Rule #3: Involve those affected. and address their concerns with understandable information ... 88 Rule #4: Reform is dialectic. not mechanical .................................................................... .89 11 Rule # 5: It's implementation, stupid ...... 89 Rule #6: Develop a sequenced,prioritized list of reforms .................................................................. 89 Rule #7: Bepatient andpersistent ......................................................................................................... 90 Rule #8: Pick the low-hangingfruit first -nothing succeeds like success....................................... 90 Rule #9: Keepyour eye on the ball -don 't allow the best to become the e Rule #I0: There are no silver bulle .................... Rule #II:Don't throw the baby ou Rule #12: Reforms mustprovide returnsfor thepoliticians who are willing to make changes.... 91 VI: The EvolvingRole ofthe World Bank ............................................................................ 93 What the Bankhas done inthe past .......................................................................................... 93 Water Resources and Irrigation .............................................................................................................. 93 Hydropower............................................. Water Supply and Sanitation The Bank's new Water Strategy ............................................................................................... 108 An indicativeWorldBankwater investmentprogramfor 2006-2010: ................................... 109 Thefour pillars......................................................................................................................................... 109 The investmentprojects.............................. Evolvingpriorities and the indicative Ba Endnotes............................................................................................................................. 117 Tables Table-1 53 Bank Assistance During 1960-1970.................................................................................. Wastewater Treatment inthe Cities of Pakistan............................................................... Table-2 94 Table-3 Bank Assistance During 1971-1980................................................................................ 120 Table-4 BankAssistance During 1981-1990................................................................................ 121 Table-5 BankAssistance During 1991-2000................................................................................ 126 Figures Figure-S1 Pakistanfrom Space.......................................................................................................... vii Figure-S2 The IndusWaters Treaty 1960......................................................................................... .vii Figure43 Rates of ReturnonInvestmenton Infrastructure andManagementof Water Resources .vii Figure-S4 World'smost Water-stressed Countries.......................................................................... .vi11 ... Figure-S5 Per Capita Availability of Water inPakistan (Cubic Meters Per CapitaPer Year) ...........ix Figure436 Annual Canal Diversionsand "Escapages to the Sea" ....................................................... ix Figure-S7 The Quality (ChemicalOxygenDemand) ofUrbanStreams ............................................. x Figure438 PredicatedChangesinIndusFlowsjust above Tarbela..................................................... xi Figure439 StoragePer Capita inDifferent Semi-Arid Countries..................................................... ..xii Figure-S10 Days ofAverage Flow which Reservoirs in Semi-AridCountries can Store .xii Figure-S11 Storage-AdditionalYield Curve for the Indus................................................................. inDifferentBasins ........................................................................................................... xiii ... Figure-S12 Sedimentationand Storage Capacity................................................................................ xiii ... Figure-S13 Wheat Yields Per Unitof Landwater............................................................................. xiii ... Figure414 Crop ProductionandDrought.......................................................................................... xiv Figure-S15 Benefitsfrom Tarbela 1975-1998..................................................................................... xv Figure-S16 The Effect of Bhakra Damon Different Social Groups.................................................... xv ... 111 Figure-S17 The Development of Economically-feasible Hydropower Potential inPakistan xvi Figure-S18 The "Global Poll" Resultsfor SouthAsia......................................................................... inInternationalContext.................................................................................................... xx Figure-S19 World Bank Lending to Pakistanfor Water -Past and Prospective................................ xxi Figure-1 The Water CAS Process...................................................................................................... 1 Figure-2 World`s Most Water-StressedCountries............................................................................. Figure-3 Per CapitaAvailability of Water inPakistan (Cubic Meters Per Capita Per Year) ............33 Figure-4 IndusBasinIrrigation System............................................................................................. 4 Figure-5 A Typical Canal Commandinthe IndusSystem................................................................ 5 Figure-6 FloodLosses inPakistan..................................................................................................... 5 Figure-7 The IndusWater Canal System at Partition in 1947........................................................... 6 Figure-8 GroundwaterLevels............................................................................................................ 7 Figure-9 8 Figure-10 Benefits from Tarbela 1975-1998....................................................................................... The IndusWaters Treaty of 1960........................................................................................ 9 Figure-11 AverageNumber of Employment of Adult Casual Laborers ........................................... 10 Figure-12 The Effect of Irrigation and GreenRevolution on Income ............................................... 10 Figure-13 The Effect of Bhakra Dam on DifferentSocial Groups.................................................... 11 Figure-14 Income Gains from Directly andIndirectly Impacted Sectors-BhakraDam.................... 11 Figure-15 Groundwater Levels 1860-1960........................................................................................ 13 Figure-16 Irrigation Expansionand GroundwaterLevels ................................................................. 13 Figure-17 15 Figure-18 Quantities andValues of Irrigation Suppliesin Punjabby Source................................... Growth of Tubewells......................................................................................................... 15 Figure-19 Rates of Returnon Investment on Infrastructure andManagementof Water Resources .-18 Figure-20 Employment Generationby Crop ..................................................................................... 23 Figure-21 Population Growth inPakistan.......................................................................................... 24 Figure-22 Urban Population Growth inAbsolute Numbers.............................................................. 24 Figure-23 Proportion of GDP inManufacturing................................................................................ 24 Figure-24 24 Accumulated Effects of Deglaciationon Indus River Flows ........................................... Prevalenceof Poverty in Pakistan..................................................................................... Figure-25 26 Figure-26 Change in South Asia Summer Rainfall Predictedby Nine General Circulation Climate Models .............................................................................................. 26 Figure-27 27 Figure-28 PredictedChange in Rainfallintensity.............................................................................. PredictedChange inNumber of Rainy Days .................................................................... 27 Figure-29 Annual CanalDiversions and "Escapages to the Sea" ...................................................... 29 Figure-30 ProjectedDemandfor Water............................................................................................. 29 Figure-31 Wheat Yields Per Unit of LandandWater ....................................................................... 30 30 Figure-33 Crop Production and Drought ........................................................................................... Figure-32 Drought Effect on Yields .................................................................................................. 31 Figure-34 Crop Yields for Headand Tail-Enders.............................................................................. 31 Figure-35 Returnsto IrrigationLocationina Canal.......................................................................... Figure-36 Differences inWheat Yields Across Distributaries inthe Pakistani and IndianPunjabs 32 .31 Figure-37 Yield andWater Productivityof Wheat under DifferentIrrigation Figure-38 Production (kg/cubic Meter of Water) under Different Agricultural Practices.................32 SchedulingStrategies........................................................................................................ 34 Figure-39 Cubic Meters of Water to Produce a ton of Produce......................................................... 35 Figure-40 PunjabCanal Entitlements from the 1991Water Accord ................................................. 39 Figure-41 Irrigation Expansion and Groundwater Levels ................................................................. 39 Figure-42 The Growing Role of Groundwater Irrigation.................................................................. 40 Figure-43 PunjabWater Balance: Normal Year (MAF) .................................................................... 40 Figure-44 PunjabWater Balance: Drought Year (MAF) ................................................................... 40 iv Figure-45Declining Groundwater Table inPunjab........................................................................... 41 Figure-46Effect of the Depthof the Water Table on........................................................................ 41 Figure-47 41 Figure-48 Arsenic in Groundwater inPunjab.................................................................................... Depthto Water Table by Province.................................................................................... Figure-49 Figure-50 Long-TermTrends of Water-logging................................................................................ 46 Arsenic inGroundwater in Sindh...................................................................................... 44 44 Figure-51 Salinity Levelsby Province.............................................................................................. 47 47 Figure-53 Salt Balance inthe Indus Basin ........................................................................................ Figure-52 Canal DiversionsandWater-logginginSindh.................................................................. 48 Figure-54 Pakistan's WetlandResources .......................................................................................... 51 Figure-55 53 The Quality (ChemicalOxygen Demand) ofUrbanStreams........................................... The Quality (BiochemicalOxygenDemand)ofUrbanStreams ...................................... Figure-56 54 Figure-57 55 Figure-58 FloodLosses inPakistan................................................................................................... The "Kuznets Curve" for EnvironmentalQuality............................................................. 56 Figure-59 The Financingof Water Services inPakistan................................................................... 59 Figure-60 DepletingPakistan's InfrastructureStock......................................................................... 60 Figure-61 Storage Per Capita inDifferentSemi-AridCountries....................................................... 61 Figure-62 Daysof Average Flow which Reservoirs inSemi-AridCountries can Store ............................................................................................................ Figure-63 Sedimentation and StorageCapacity................................................................................. InDifferentBasins 61 62 Figure-64 Storage-additionalYield Curve for the Indus................................................................... 62 Figure-65 Benefits from Basha andKalabagh................................................................................... Figure-66 Economically-FeasibleHydropowerpotentialinPakistaninInternationalContext........62 63 Figure-67 Environmentaland Social Indicatorsfor Some MultipurposeDams................................ 63 Figure-69 Who Benefits fromNew Indus Storage?........................................................................... 64 Figure-70 UrbanWater Supply Coverage ......................................................................................... 67 67 Figure-72 RuralWater Supply Coverage (ImprovedWater Supply) ................................................ Figure-71 RuralWater Supply Coverage by Province...................................................................... 67 Figure-73 67 Figure-74 The DesiredEvolutionofFunctionsandActors............................................................... ImprovedSanitation Coverage.......................................................................................... 69 Figure-75 The Basis for SoundIrrigation Service Provision............................................................. 70 Figure-76 Typical Public andPrivateRoles inthe Provisionof Infrastructure ................................ 72 Figure-77 ParticipantsinModernRegulation.................................................................................... 74 Figure-78 Timetablefor Implementationof a FormalWater EntitlementSystem............................ 78 Figure-79 81 FromLow-level to High-levelEquilibrium inConakry ................................................... Systems Models for PlanningandManagement............................................................... Figure-80 82 Figure-81 World BankLendingto Pakistanfor Water-relatedSectors 1952-2004........................... 95 Figure-82 HouseholdIncome ofFamiliesat Ghazi BarothaHydropowerProject BeforeandAfter Resettlement ....................................................................................... 105 Figure-83 The "Global Poll" Resultsfor SouthAsia....................................................................... 109 Figure-84 World Bank Lendingto Pakistanfor Water-relatedSectors -Past andProspective......110 Boxes Box-1 The Water Accord of 1991................................................................................................ 20 Box-2 How other distortionsAffect the Water Economy .The Case of Sugar-Cane .................35 Box-3 The IndusRiver SystemAuthority (1992) ........................................................................ 37 Box-4 Public InformationonKalabaghDam(an extract) ........................................................... 65 Box-5 Water Entitlementare the PrincipalMechanismfor EnsuringEfficiency. Sustainability andVoluntary Reallocationof Water......................................................... 76 V R .. T h i s reporti s the productof q h t e e n monthsofintensive work byBank staff andan eminent group of Pakistani andforegnconsultants. The BankteamconsistedofJohnBriscoeandUsmanQamar paskTeamLeaders), ManuelContijoch(SASAR); DonBlackmore(Consultant(formerChiefExecutiveMurrayDarlu-~g Commission))andPervaizAmir. The reportbenefitedgreatlyfrom formalreviewsandcomments byexternal reviewers(DavidSeckler, RichardReidtnger,ChrisPerry,SaeedRana, Shams ulML& FrankvanSteenbergen, KarinAsmdSiegman, Asif Kau,KhahdMohtadullah,BertSmedema,Shamshad Gohar, ShahidaJ@ and M. N.Bhutta)andWorldBankstaff(KeithPitman,MasoodAhmad,AbidHasan,ShahzadSharjeel,Dale Lautenbach,VladoVuceiic, Adolfo Brizzi,XiaokaiLiandAlainLocussol). The reporthas beenreviewedby senior officialsfrom the Ministry ofWaterandPower, the Plantllng Commission,the EconomicAffairs Division,the ProvincesandWAPDA. Writtencommentswere received fromthese agencies. The reporthasbeenreviewedindetailbyWorldBankmanagementandthe revisedversionendorsedbyit. A finalroundofconsultationswas heldinSeptember2005withthe multi-stakeholdergroup,includmgthosewho hadadvisedduringthe earlystagesofthiswork. As usual,notallreviewersagreedwithallthat iswritteninthe report(nordidthe authors agreewithallthatwas suggestedbythe reviewers!). The productis entirelythe responsibilityofthe authorsandshouldnotbe amibutedto the reviewers. vi Pakistan i s one of the world's most arid countries, with an average rainfall of under 240 mm a year. T h e population and the economy are heavily dependent on an annual influx into the Indus river system (including the Indus,Jhelum, Chenab Ravi, Beas and Sutlej rivers) o f about 180 billion cubic meters of water, that emanates from the neighboring countries and i s mostly derived from snow-melt in the Himalayas. Throughout history, people have adapted to the low and poorly distributed rainfall by either livingalong river banks or by careful husbanding and management of local water resources. O n e of the greatest of human civilizations - the Indus Valley civilization (Harrapa and Mohenjo Daro) - flourished along the banks of the Indus. This precarious, low-level balance between m a n and water was decisively shifted with the advent of large-scale irrigation technology Figure 51: inthe 19th century. The Indusirrigation system became the largest Pakistan from space contiguous irrigation system in the world. As shownin Figure S1, the desert literally bloomed, with irrigated agriculture providingthe platform for the development of the modern economy of Pakistan. This hydraulic economy has faced and surmounted three massive challcmges inthe last halfcentury. T h e first challenge arose because the lines of partition of the Indo-Pak sub-continent severed the irrigated heartland of Punjab from the life-giving waters of the Ravi, Beas and Sutlej rivers. In an unprecedented triumph of water diplomacy, Pakistani engineers, together with their Indian counterparts and the World Bank, negotiated the Indus Waters Treaty, giving Pakistan rights in perpetuity to the waters of the Indus, Jhelum and Chenab rivers, which comprise 75% of the flow of the whole Indus system. T h e second challenge was that there was now a mis- match between the location of Pakistan's water (inthe Figure 52: The Indus Water Treaty of 1960 western rivers) and the major irrigated area in the east. Tarbela on the Indus, and link canals, which ran for hundreds of miles and carried flows ten times the flow of the Thames River. (Figure S2) To a considerable degree (but not completely) the "heroic stage" of water engineering in Pakistan was now over - as in other countries the major challenges were now those of management, This is the case in all countries (see Figure S3). But in the case of Pakistan, however, the "heroic" era had involved particularly blunt affronts to the living organism that the river represents. T h e natural flow regime was dramatically altered: rivers which had previously meandered over wide plains were now confined within narrow channels, sediments which had Figure 53: Rates o f return on investment on infrastructure and managementof water resources vii previouslynourishedthe delta were trapped, vast quantities ofwater were disgorgedonto deserts, substantial parts of which were of oceanic origin and highly saline. It was this last realitywhich gave rise to the third major challenge facing Pakistan shortly after Independence. Hundreds of billions of cubic meters of water were now stored inthe naturally-deepaquifers of Punjab alone. Inmany areas water tables hadreached the levelof the land, givingrise to the twin curse of waterlogging and salinity. Inthe early 1960s,it appearedthat Pakistanwas doomed, ironically,to awatery, saltygrave. With equal doses of good thinking, goodplanningandgoodluck, this problemis now not beaten (nor will it ever be) but controlledand managed, to a degreethat no one foresaw fifty years ago. The good thinkingwas the applicationofwater science and economics by many of Pakistan's best andbrightest inconjunctionwith manyof the bestwater minds inthe world. The "solution" was not the obvious one of liningcanals and putting less water on the land but of increasing the use of groundwater, thus bothincreasing evapotranspiration, drawingdown the groundwater table andleachingmuch of the salts down and out of the root zone. The good thinking andgood planningwere classic "public goods". The "good luck" driver of this revolutionwas the modest but transforming tubewelland diesel engine, bought and managedby millions of farmers for the simple reason that this decentralized "on-demand" source of water enabledthem to greatly increasetheir crop yields andincomes, So the modern history of water development andmanagementinPakistani s one inwhich the glass can be seen as more than half full. But, as this Report will show, the glass can also be viewed as much more than half empty too. Once again, the survivalof a modernand growingPakistan is threatened by water. The facts are stark. Sobering Fact #1: Water Stress. Pakistani s already one of the mostwater-stressedcountries inthe world ( Figure S4), a situationwhich is goingto degrade into outright water scarcity ( Figure S5) due to highpopulationgrowth. BarFigure 54: One o f the worlds most water-stressed countries YYWIIhlFPa m ... V l l l I Figure 55: Declining per capita availability of water in Pakistan (cubic meters per capita per year) Sobering Fact #2: There i s no additional 200 water to b e injected 1 Figure 1 Annual Canal Diversion and EscaPaIes to the Sea into the system. There i s no feasible 1so intervention which would enable Pakistan to -2 mobilize appreciably 100 more water than it now j uses. Arguably, as shown graphically in so Figure S6, overall use for irrigation needs to decline so that there are 0 adequate flows into the 1 5-76 1979-80 1983-84 1987.88 1991-92 1995-96 1999-00 2003-04 Years degrading delta. IExistingCanalDiversion 0Escapagesto the Sea Figure 56: Annual Canal Diversions and "Escapagesto the Sea" Sobering Fact #3: A highriskwater Source::World Bank 2CO3 en%ronment. Pakistan's dependence on a single river system means it has little of the robustness that most countries enjoy by virtue o f having a multiplicity o f river basins and diversity o f water resources. While India (for example) might be able to muddle through because it has many rivers and if something goes wrong in one place the effect i s cushioned by opportunities in other places, this i s a luxury which Pakistan does not have. If the water/sediment/salt system o f the IndusBasin goes badly wrong, that's it. There i s n o latitude for error. ix Sobering Fact #4: Large-scale degradation of the resource base. There i s abundant evidence of wide-scale degradation of the natural resource base on which the people of Pakistan depend. Salinity remains a major problem, with some aspects partially controlled but others -includingthefateofthe 4500 approximately 15 million tons of salt 4000 which are accumulating in the Indus si00 Basin every year, and the ingress of saline water into over-pumped COD 3n00 freshwater aquifers - remain only mg/l ZSDD dimly-understood threats. And the 2000 delta, deprived of the water and silt id00 which built and sustained it, i s (000 degrading rapidly, with large human 500 and environmental consequences. Simultaneously, there i s large-scale n uncontrolled pollution of surface and Urban streams in different cities groundwater from the increasing Figure 57: The quality (Chemical Oxygen Demand) of urban streams quantities of pesticides and ferthzers Source: Zechariah 2005 used in agriculture and by rapidly growingcities and industries. Major cities have inadequate sewage treatment plants. Many are either non-functional or working poorly. And there i s only one industrialc o m m o n effluent treatment plant workinginthe whole of the country. The result, as illustrated inFigure S7, is the presence of heavily degraded surface water around all cities and towns. Sobering Fact #5: Groundwater is now being over-exploited in many areas, and its quality is deteriorating. Over the past 40 years, the exploitation of groundwater, mostlyby private farmers, has brought enormous economic and environmental benefits. A laissez-faire approach could be appropriate during this era. Groundwater now accounts for almost half of all irrigation requirements. Now, although, there is clear evidence that groundwater i s being over-exploited, yet tens of thousands of additional wells are being put into service every year. Inthe buruni areas of Balochistan, farmers are pumpingfrom depths of hundreds of meters and inthe sweet water areas of the Indus Basin, depletion i s now a fact in all canal commands. Furthermore, there are serious and growingproblems with groundwater quality, a reality that is likely to get worse because there are 20 milliontonnes of salt accumulating inthe system every year. Pakistan has thus entered a n era inwhich laissez-faire becomes an enemy rather than a friend. There i s an urgent need to develop policies and approaches for bringingwater withdrawals into balance with recharge, a difficult process which i s going to require action by government and by informed and organized users. Since m u c h groundwater recharge in the IndusBasin is from canals, this requires an integrated approach to surface and groundwater. There is little evidence that government (or donors, including the World Bank) have re-engineered their capacity and funding to deal with this great challenge. And here delay is fatal, because the longer it takes to develop such actions, the greater would become the depth of the groundwater table, and the higher would be the costs of the "equilibrium" solution. Sobering Fact #G: Flooding and drainage problems are going to get worse, especially inthe lower IndusBasin. The natural state of heavily-silt laden rivers (like the Indus)i s to meander. This is because as silt buildsup in their beds, the rivers seek lower lands and change their courses. This creates havoc with human settlements and so, throughoutthe world, such rivers have been trained and confined by embankments within relatively narrow beds. But as with everything watery, solvingone problem gives rise to another. Int h i s case, the bed keeps getting higher and higher, and soon the river is, as in the lower parts of Sindh, above the level of the land. (To some degree the trapping of silt in upstream reservoirs alleviates this particular environmental hazard.) Over time, the likelihood of X embankment breaching increases, as do the problems of drainage from flooded lands. W h e n this coincides with unfavorable tidal conditions, the consequences can be disastrous. Sobering Fact #7: Climate change. T h e Indus basin depends heavily on the glaciers of the western Himalayas which lndusat BishamQIla act as a reservoir, capturing snow and 100 rain, holding the water and releasing it into the rivers which feed the plain. It i s now clear that climate change i s already affecting these western glaciers ina dramatic fashion (far more seriously, for example, than in the ::: damper EasternHimalayas). While the science i s still ini t s infancy, best estimates (Figure S8) are that there will b e fifty years of glacial retreat, during -100 which time river flows will increase. Figure 58: Predicted changes in Indus flows just above Tarbela This -especiallyincombinationwith the predicted flashier rainfall -- i s likely to exacerbate the already serious problems of flooding and draining, especially inthe lower parts of the basin, in the next few decades. But then the glacial reservoirs will be empty, and there are likely to b e dramatic decreases in river flows- as shown in Figure S8, conceivably by a terrifying 30% to 40% in the Indus basin in one hundred years time. Sobering Fact #8: An inadequate knowledge base. The Indus Basin is a single, massive, highly complex interconnectedecosystem, uponwhich m a n has left a huge footprint. W h e n a dam or barrage i s constructed the water and sediment cycles are changed dramatically. W h e n water i s diverted onto deserts, the water and salt balances seek new equilibriums. Ina system so massive and complex, the generation and smart use of knowledge are the keys to adaptive management. But there has been very little investment in Pakistaninbuildingthis knowledge base and the accompanying institutional and human systems. T h e past twenty years should have been ones of massive investment in knowledge about this ecosystem. But the reverse has happened, and even the once-renowned Pakistan water planning capability has fallen into disrepair, T h e country i s literally flying blindinto a very hazardous future. Sobering Fact #9: Much of the water infrastructure is in poor repair. Pakistani s extraordinarily dependent on i t s water infrastructure, and it has invested init massively. D u e to a combination of age and what has aptly been called the "Build/Neglect/Rebuild" philosophyof public works, much of the infrastructure i s crumbling. This i s true even for some of the major barrages, which serve millions o f hectares and where failure would be catastrophic. There i s no modern Asset Management Plan for any of the major infrastructure. Sobering Fact #lo: The quality of project implementation i s poor. Pakistan i s justifiably proud ofits outstandingachievement inbuildingthe IndusBasin Replacement Works. Inthe intervening years, the quality of project implementationhas declined substantially. Today, implementation of water sector projects in Pakistan i s characterized by inefficiencies, completion delays and time and cost overruns. Factors that affect implementationinclude: weak implementation planning and management, litigation related to land acquisition, non-compliancewith agreed resettlement and rehabilitation programs, lack of attention to environmentalissues, delays in procurement, delays in preparationof accounts and carrying out audits, and the lack of preparation for transition from construction to operations. xi Sobering Fact #11: The system i s not financially sustainable. There are three basic questions relevant to the financing of infrastructure -who pays? how m u c h i s paid?and how is the money used? Interms of "who pays", there are many reasons why a substantialportionof the costs of public works which provide individual services (such as irrigation water) should be paid for by those who get the service. But in Pakistan users of canal water pay a very small part of the bill, which is basically paid by the taxpayer. Interms of "how m u c h is paid", the answer is: much less than the presently configured institutions require for rehabilitation and maintenance of the assets and for operations. T h e result is that most infrastructure i s in poor repair. Interms of "how i s the money used" the answer i s that first call is for payment of heavily overstaffed bureaucracies, whose productivity i s low and whose appetite leaves insufficient funds for system maintenance and operation. This reality gives rise to a vicious circle, inwhich users are not willing to pay for poor and unaccountable services, which means that insufficient funds are available for operations and maintenance, which results in the decline of service quality and whereupon users are even less willing to pay., ,. Sobering Fact #12: Pakistan has to invest, and invest soon, in costly and cubic meters per contentious new large capita dams. When river flow is 6000 variable, then storage i s 5000 required so that the supply of 4000 water can more closely 3000 match water demands. 2000 Relative to other arid countries, Pakistan has very 1000 little water storage capacity. 0 Figure S9 shows that whereas the United States and Australia have over 5,000 cubic meters of storage capacity per inhabitant, and Figure S9: Storage per capita in different semi-arid countries China has 2,200 cubic Source: World Bank analysis of ICOLD doto meters, Pakistan has only 150 cubic meters of storage capacity per capita. And Figure S10 shows the storage capacity avadable in some of the major arid basins in the world. The dams of the Colorado and Murray- Darling Rivers can hold 900 days of river runoff. South Africa can store 500 days in i t s Orange River, and India between 120 and 220 days in i t s major peninsular rivers. By contrast, Pakistan can barely store 30 days of water inthe Indusbasin. Figure S10: Days of average flow which reservoirs in semi-arid countries can store in different basins Source: World Bonk owlysis of ICOLD and GDRC data xii As showninFigure S11, each millionacre feet - I (MAF) o f storage capacity lost means one MAF/year less water that can be supplied with a i Additional yield inMAFIysar 25 givenlevel of reliability. And, as shown in ,* Figure S12, there i s an urgent need for storage just to replace the capacity that has (as ;torage predicted) been lost to sedimentation. Given level I the high silt loads from the young Himalayas, ~ Pakistan's two large reservoirs are (as predicted 0 10 20 30 40 at design) siltingrelatively rapidly. Storage MAF Sobering Fact #13: Poor governance and Figure 511: Storageadditional yield curve for the Indus low trust. Conceptually the simplest task for water managers in the Indus Basin i s to move water in a predictable, timely manner to those who need It and have a right to it. Pakistan has among the best water engineers in the world. And yet this task is done less and less satisfactorily, less in the light of day and more behind an opaque curtain inwhich, as always, monopoly + dscretion - accountability = corruption. The result i s inequitable distribution of water, poor technical performance and a pervasive environment o f mistrust and conflict, from the provincial level to the water course. The water bureaucracy has yet to make the 1985 1995 2005 2015 vital mental transition (depicted Figure 512: Sedimentation and storage capacity : in FigureS3) from that o f I Source World Bonk 2003 builder to that of manager. Sobering Fact #14: Water I t l productivityis low. Large parts 8 1 I 1.2 o f Pakistan have good soils, 10Tonshayield +kglm3 1 abundant sunshine and excellent farmers. And yet crop yields, both 0.8 4 jil: per hectare and per cubic meter o f E 0.6 water, are much lower than -a internationalbenchmarks, and 3 0.4 much lower even than in 2 neighboringareas of India (Figure 01 0.2 S13). The quality ofwater service 0 plays an important role in this: ImperialValley, USA Bhakra, India Punjab, Pakistan yields from reliable, self-provided I groundwater are twice those o f Figure 513: Wheat yields per unit of land and water unreliable and inflexible canal 9 w c e : Ahrod 2035 supplies. xiii Inwater matters, the cup is always halfempty, butit is also half, or, inthe case of Pakistan, at least a quarter, full. Inconfronting these awesome challenges, Pakistan has considerable strengths, too. Hopeful Fact #1: A well-established tradition and system ofwater entitlements. Pakistan has an unusually long- and well-established tradition of water entitlements. At the international level, Pakistan's rights to water from the Indus Basin system are unambiguously defined inthe IndusWaters Treaty. The 1991Water Accord i s a major achievement, which establishes clear entitlements for each province to surface waters. Implicit in the Water Accord, too, i s a set of water entitlements at the canal command level (established on the basis of historic use). Inlarge areas of the system, these entitlements serve as the basis for allocation of water among canal commands. There are also well- established rules for further distributingwater to the distributary and outlet levels. Below the outlets, the warabandii s a proxy (appropriate ini t s era) to a water right, inwhich a farmer has a right to time, a surrogate for water. The existence of such well-established entitlements means that Pakistan can now focus on: puttinginplace a similar system for the surface systems that do not currently have such established entitlements; extending the entitlement system to cover any new water that might be mobilized; formalizing entitlements for environmental flows (including to the delta); and moving towards a similar definition of entitlements for groundwater, and, above all, administering this system ina more transparent, participatorymanner. Hopeful Fact #2: Pakistan has largely avoided the trap of subsidizing electricity for groundwater pumping. One of the obvious ways governments around the world address the problem of agricultural distress i s to subsidize inputs. Inmany countries, electricity for irrigation pumpingis heavily subsidized. This policy greatly exacerbates the underlyingproblem, which is making sure that groundwater pumpingdoes not exceed recharge, and that the water table i s not too deep. To date, this policy has been followed only inBalochistan, with disastrous effects both on the water table and on the financial state of the utility, and for pumping from public wells in Sindh. At present, the political pressure for "free power" has been muted because the water table i s shallow and most pumps are diesel powered. The Federal and Provincialgovernments should be applauded for their stance to date and should continue to strongly resist pressures to move towards free power for irrigation in the future. Hopeful Fact #3: There i s much scope for increasing water productivity. The flip side of current low water productivity i s that Pakistan can get much more product -crop, jobsandincome- per drop of water. As showninFigure S14, reduced water supplies in the irrigated areas have little detrimental impact on production (at least in the short run),inpart because groundwater i s available to make up the difference in the short run, in part because waterlogging and salinity are reduced, and inpart because limited water supplies are Figure 514: Crop production and drought Source: World Bonk 2003 xiv used more carefully when there are shortages. But the bottom line i s that this shows that it i s quite possible to substantially increase production with existing supplies of water. A second, very important, factor i s the emergence of a new class of progressive farmers, who are shifting to high-value crops (which produce far more income and jobs per unit of water), introducing n e w crops and agricultural technologies, and puttingunprecedented pressures on the irrigation departments to become more accountable and efficient. Hopefulfact #4: High returns from previous major water Power Irrigation ~ ~ infrastructure. Pakistan benefited immensely from 3500 the major water 1 infrastructure built in the e 3000 IndusBasin. As shown in 3 2500 Figure S15, the benefits 2000 from Tarbela substantially r '' e 1500 exceeded those which were 0 predcted at the time of = 1000 construction. Through 500 forward and backward 0 linkages in the economy, Predicted Actual the total benefits were probably about twice those Figure 515: Benefits from Tarbela 1975-1998 of the direct power and irrigation benefits. It i s source: WCD 2000 also certain that, as has been shown for the Bhakra project in Indian Punjab ( Figure YOchange of Income of DifferentTypes of Households With S15), it was the poor and Without Bhakra Dam who, through the 80 operation of labor markets, were 60 probably the greatest beneficiaries of these investments. It i s 40 important to note that although much of the 20 discussion of such projects is in terms of 0 agriculture, in fact it i s Landowners Agr Labor Rural Non Agr Rural Others Urban the power benefits which are often greatest (Figure S15). Figure 516: The effect of Bhakra Dam on different social groups And here, too, as showninFigure S17, Source: Bhatia. 2005 Pakistan lags behind i t s neighbors-86% of the 56000 mw of Pakistan's economically-viable hydropower potential has yet to b e developed. xv 100% 90% 80% :apan 70% Europe North America 60% 50% 40% 30% 20% 0 1000 2000 3000 4000 Figure 517: The development of economically-feasible hydropower potential in Pakistan in international context Source: World Bank 2003 H o p e f u l Fact #5: Pakistan has overcome major water challenges int h e past. Pakistan has a remarkable history of successfully confronting major water challenges. It has enormous human capacity to confront this next roundof challenges, which can b e pooled in four major categories. T h e sustainable management of a huge, inter-linked and very complex natural resource base i s probably the single most challenging long-term task for Pakistan and requires the development of world-class capacity in three related areas. First are the natural sciences. Adaptive management of the Indus Basin system requires highlevels of knowledge and understanding of a series of linked basic natural processes, the more important of which include: the behavior of the glaciers as climate change proceeds; the fate of the large amounts of salt being mobilized; the qualitative and quantitative dimensions of the aquifer systems inthe Indus Basin and in the other parts of the country; the evolution and behavior of the ecosystems of the delta; and the impact of changed sediment loads on river morphology. Second are the engineering sciences. T h e plumbingfor the world's largest contiguous irrigation system has underpinned m u c h of Pakistan's development. Pakistan has long been a world leader in hydraulic engineering, and it i s going to have to renew this capacity so that a new generation can maintain and modernize the water transmission and distribution systems. T h e thirdleg of the intellectual stool are the social sciences. Because at the end of the day government i s goingto have to design institutions and instruments, which will ensure that the actions of the millions of people who live in and off of the natural and engineered water systems are in consonance with the requirements of those systems. Pakistan, accordmgly, needs to build a strong natural, engineering and social scientific cadre capable of working with all users in defining the problem, developing solutions, monitoring, assessing and adjusting. T h i s is a capacity which requires a wide range of disciplines - those necessary for understanding climate, river geomorphology, hydraulic xvi structures, surface and groundwater hydrology, limnology, water chemistry, sediment management, hydraulics, soil sciences, terrestrial and coastal ecosystems, agronomy, plant physiology, industrial organization, conflict management, politics, economics and financing. In the past Pakistan has relied heavily on outside knowledge, especially in sciences. Now Pakistan needs to develop i t s indigenous capacity and make a major pushto establish and nurture a new set of institutions that will provide the scientific, technical and policy support for the management of increasingly scarce water. Experience in other countries shows that if this i s not done there will b e serious economic, social and environmental consequences. The water economy of Pakistan depends fundamentally on a gigantic and complex hydraulic infrastructure system. There are now a set of related challenges which have to be addressed - how to maintain what has been built, what major new system-wide infrastructure needs to be built,what infrastructure needs to b e built for populations who have not been served and for environmental protection, and how to build institutions that will manage the resource effectively in the looming era of scarcity. Firstis rehabilitation and maintenance. Many elements of the vast hydraulic system are now reaching the end of their design lives, and have to be rebuilt. There i s an enormous backlog of deferred maintenance. Most recent irrigation and water supply "investments" from donors, including the World Bank, have been for the rehabilitation of poorly maintained systems. There is n o systematic Asset Management Plan at either the Federal or Provincial level which describes the condition of the assets, the requirements for replacement, rehabilitation (or retirement) and operations and maintenance and the associated costs, and the proposals for financing of these costs. Development of such plans i s a high priority. Second i s the urgent need for construction of major new storage on the Indus. There i s probably no more contentious a n issue inPakistan today. Inpart, this i s for legitimate and necessary reasons (such as the resettlement of substantial numbers of people), partially for legitimate but resolvable reasons (lack of transparency about how this would affect the actual allocation of waters among the provinces and to the delta) and partially the discussion of dams has become a vehicle for a host of remotely- or un-related political grievances. A curiosity i s that the mostvehement opposition to new dams comes from Sindh,when in fact it i s the downstream riparian who i s typically the greatest beneficiary of the enhanced regulation which comes with new storage. (For this reason, in other countries lower riparians will often pay for upstream storage.) T h e requirements for government are obvious - there needs to b e a totally transparent and verifiable implementation of the 1991 Water Accord, and reasonable quantities of water need to be guaranteed and delivered to the delta (as was discussed as part of the Indus Treaty negotiations). Equally important i s a well-designed plan for paying for the costs of this storage, with the very large hydropower potential offering possibilities for raising substantial amounts of private financing. Third, there are needs for large investments inmeeting the needs of those who do not have water and sanitation services in cities, towns and villages. Fourth, Pakistan has been accumulating an "environmental debt" by not investing inmunicipal and industrial wastewater. It is clear that this has to change, and that it is going to take large amounts of investments. Fifthand finally, Pakistan has to walk o n two legs -investing simultaneously ininfrastructure and in developing the institutions required for the sustainable management of increasingly-scarce water. T h e resource requirements for all of these priorities are very large. Government faces three essential tasks. First, to set priorities for the short and medium term. Second, to define the principles which xvii will govern what proportions of the initial and recurrent costs are paidby taxpayers and by users. Third, government has to ensure that the limited financial resources are usedvery efficiently. This is obviously not happening in the "business-as-usual" model at present. It i s going to mean exploring a whole set of mechanisms for introducing competition, for paying for output not inputs, and for increasing accountability. The agrarian economy of Pakistan accounts for about 25% of GDP and employs about half of the labor force. While the transition to an urban and industrial economy can and must continue, agriculture will remain central for the well-being of large numbers of people. Better water management i s a key constraint to improvingagricultural productivity and generating jobs. Over the past several decades, farmers have largely taken the problem into their own hands, and "solved it" by sinking hundreds of thousands of tubewells which provide just-in-time water for their crops. To a substantial degree the main function of the canal systems has been to recharge the groundwater - about 80% of groundwater abstractions in Punjab come from recharge from canals. T h e survival of the water economy over the last several decades has largely been despite rather than because of the State -it has been the tapping of the unmanaged groundwater by millions of farmers, by towns and villages and industries that have pulled the economy through. Itis clear that this era of "productive anarchy" is now coming to an end, since groundwater is now being over tapped in many areas (including both the Indus Basin and Balochistan and other non-Indusareas). This poses two very major challenges to the State. First, surface water supply systems are going to resume their previous highimportance, and need to b e managed much more accountably and effectively. Second, groundwater will have to be managed - for related reasons of quantity and quality - m u c h more aggressively than has been the case in the past. Itis also obvious that the needs for water are changing substantially, as a result of agricultural diversification, urbanization, industrialization, recognition of environmental needs, climate change and the evolution of the natural resource base. Since there will be, if anything, less rather than more water, it means that the new water economy is goingto have to be one which is much more flexible, inwhich a key will be the voluntary reallocation of water from those who need it less to those who need it more. It is goingto require a very different type of state machinery at bothFederal and Provincial levels to meet these challenges. In constructing this "new water state", the focus must be primarily on instruments which govern the relationships of different users with the water, and with each other. T h e logical organizational architecture then i s that which i s required to manage the instruments and order the relationships between the parties. Some of the key elements of the "new water state" will be: Introducing accountability, efficiency, transparency and competition into the surface water supply business. This will meanunbundhngthe business into bulk, transmission and distribution enterprises, with relations among the parts governed by contracts which specify the rights and responsibilities of both parties. While it will not be easy to enforce such contracts, experience shows that this can stimulate improved accountability and service quality. This will mean moving away from a monolithic service model below the distributaries (withFarmers' Associations competing "for the market" with the irrigation department) and into the canal commands (where a variety of forms of public-private partnerships can provide an alternative to the irrigation department). Inmany cases, professionals from the Irrigation Departments would be encouraged to form private businesses for the provision of such services, thus ensuring that their skills are not lost, and that they do not see the changes as purely a loss of security. T h e bulk business (operation of dams and barrages) would probably remain in state hands, but with many major functions (such as operation o f power plants) xviii concessioned out to private operators. A similar institutional architecture would pertain for the drainage infrastructure. Insuch a system (which would take place as a sequencedand prioritized process over many years) the government would, gradually, play a very different role. It would corporatize the state owned operating units and develop new capacities to do the economic regulation. T h e government would also be far more active ingroundwater management, where it has been largely absent. This would mean developing a new legal and regulatory framework for co- managing groundwater with user associations. Itwould mean developing the sophisticated natural resource management capacity required for management of the water and land systems. A center-piece of these systems, both surface and groundwater, would be improvingthe administration of a well-established system of water entitlements. What i s now needed i s finalization of the agreement on environmental flows into the Delta (a process that i s underway) and then implementation of the Accord in a transparent manner, audited by an auditor who is, and is perceived to be, neutral. T h e same system then needs to be "drilled down" to the canal commands within the provinces (where entitlements are mostly well established but not transparently administered). And so on down all the way to the users' associations and eventually to the farmers. There i s broad agreement among most water professionals in Pakistan that this improved administration is quite feasible and that it would increase efficiency, allow flexibility in adapting to scarcity and reduce conflict and install trust inthe system. A similar, and even more difficult, process is essential for the management of groundwater quantity and quality, since groundwater reservoirs are already being mined in the barani and sweet water areas. Again, this will take a well thought-out, pragmatic, patient and persistent strategy. T h e central elements will be heavy involvement of users, substantial investments in modern water and agricultural technology, and the State playing a vital role as developer of the enabling legislation, and regulator and provider of knowledge and decision support systems. Inthe eyes ofmany the idea of such a modern, accountable "Pakistan water system" i s panglossian, given the deteriorating performance in recent decades and the broader challenges of governance. T h e glass is, of course, always half empty. But it i s half full too. Pakistan has a stronger base for doing this than most other developing countries, and there are some important signs that the need for change i s being understood, there are political leaders who are starting to grapple with these realities, and the government and private sector leaders are taking the important first steps down this long and winding road. Pakistan is fortunate, too, in that it i s not the first country in the world to face this (daunting) set of challenges. T h e experiences of other countries suggest that there are a set of "rules for reformers" in ....... undertaking such a transition. These rules include: Initiate reform where there i s a powerful need and demonstrated demand for change. Involve those affected, and address their concerns with effective, understandable information. Ifeverythingis a priority,nothingis a priority -- develop a prioritized, sequenced list of reforms. Pick the low-hanging fruit first - nothingsucceeds like success. Keep your eye on the ball - don't let the best become the enemy of the good. B e aware that there are no silver bullets. Don't throw the baby out with the bathwater. xix . .... Treat reform as a dialectic, not mechanical, process. Understandthat all water i s local and each place i s different - one size will not fit all. Be patient, persistent and pragmatic. Ensure that reforms provide returns to politicians who are wilting to make changes. Recognize that water, unlike electricity or telecommunications, i s "far from a simple commodity" Water's a pasture for science to forage in Water's a niark of our dubious origin Water's a link with a clistant futurity W'ater's a symbol of ritual purity Water i s politics, water's religion Water is just about anyone's pigeon \X'ater is frightening, water's endearing Water's a lot more than mere engineering Water i s tragical, water i s comical Water is far from the Pure Economical. Kenneth Boulding An important objective of this Report is to help define the water elements of the framework (knownas the Country Assistance Strategy) which will govern the relationship between the World Bank and Pakistan for the period 2006-2010. This i s an iterative process, inwhich there have already been many discussions involvingthe Federal and Provincial Governments, the Bank`s Country Management and the Bank`s Pakistan Water Team. While the final agreement on water will only be decided jointly with the other elements of the CAS, the contours of this agreement are already broadly clear. The Federal and Provincial governments and the management of the World Bank 10 ~ all agree that water management i s one of the central development 15 - challenges facing Pakistan, and that it i s an area where the Bank has a long history and a strong 10- comparative advantage. This i s inbroad agreement with the 0Podil findings of a major poll of awide variety of South Asian stakeholders (Figure S18), which 0 concluded that infrastructure, Prtority that shouldbe Jven bythe Bank education and governance were the three areas which were both o f high national importance and Figure 518: The "global poll" results for South Asia Source: World Bank ZWZ where the Bank was perceived to have a comparative advantage. xx There is, therefore, a general agreement that `0 MajorInfrastructure 0lrngationand Drainage 0Floods 0UrbanWSBS 13RuralWSBS ImnHydro+% all Bank lending there will b e a major increase in 600 Bank lending for water-related activities, with the indicative overall figures showninFigure S19. This wouldmean that water-related lending for Pakistan would increase about 10 1952-1960 1961-1970 1971-1980 1981-1990 1991-2000 2OOC-2004 fold from the 2000-2004 Figure S19: World Bank Lending t o Pakistanfor Water-related period, and - Past account for Sectors and Prospective about $1bitlion Source: World Bank 2004 inthe coming four years. World Bank support would be based on "principled pragmatism" recognizingthat reforms and investments must proceed in parallel and the best should not b e allowed to become the enemy of the good. Broadly speaking, Bank assistance would support four pillars of the water sector, as described below: Pillar 1:Asset Development and Management Pakistan has a large endowment (with an estimated replacement value of US$60to 70 bitlion) of water resources infrastructure, most owned and managed by the provinces, and m u c h now quite old. Bank- funded projects will make major investments inrehabilitation of some critical assets (including barrages) and will help put in place Asset Management Plans which will set priorities for asset rehabilitation and maintenance, make explicit the requirements for public and user financing, and develop efficient institutional arrangements for rehabilitating and maintaining this infrastructure. T h e Bank will also continue i t s support for: developing and implementing a drainage and salt management strategy, other investments - including small dams, minor irrigation and groundwater management - in barani areas outside the Indus Basin, as well as for improvinglivelihoods and safety in coastal areas. O n e major issue that i s likely to emerge in the 2006-2010 CAS period i s possible Bank engagement in developing and co-financing major n e w Indus Basin storage and hydro, if and w h e n the Government makes such a decision. T h e Government i s actively addressing some of the major issues which have been raised about a new dam on the Indus,including transparent implementation o f the 1991Water Accord and environmental flows into the delta. Indiscussions with the Government it has been agreed that the Bank could be involved, with the usual provisions that any such project met the Bank's normal technical, economic, social and environmental standards, and that these investments were part of an overall program which includedinstitutional reforms and investments at federal, provincial, canal command and farm levels to ensure better use of water. xxi Pillar 2: Water ResourcesManagement The Bank expects to support development of capacity at the provincial and federal levels for improvingwater and associated natural resource management. For surface water supplies, a major emphasis will be buildingon Pakistan's platform of defined water entitlements, making the administration of these more transparent and accountable, from the inter-provincial to the user levels. For groundwater, the Bankwill support the development of the government's capacity for knowledge generation, policy generation and management. A major emphasis will need to be on developing a better understanding of salinity and formulation of salt management strategies; groundwater recharge; and flood flows. For both surface and groundwater there will be an emphasis on incorporating environmental issues (including water quality, wetlands and environmental flows). An important element of Bank support will be training o f a new generation of multi-disciplinary water resources specialists and support for multi-disciplinary centers of excellence for water resources, natural and social sciences. Pillar 3: Service Delivery The Bank expects to be heavily engaged inprovincial- and city-level efforts to improve the quality, efficiency and accountability with which water supply, sanitation and irrigation services are delivered. The Bank will emphasize the development of frameworks which encourage the entry of new players (including community organizations, and the small- and large-scale private sector), the use of contracts which specify the rights and obligations of providers and users and benchmarking for allwater services. The Bank will emphasize the modernizationof infrastructure -including canal re-modeling and the use of measuringdevices, which are integral for movingto a more flexible, accountable, transparent and monitorable service delivery paradigm. Pillar 4: On-farmProductivity The Bank will continue to invest in the on-farm services (land leveling, watercourse lining, and introduction of new technologies through private-public partnerships) which are essential for agricultural diversification and for improvingthe amount of crop, income and jobs produced per drop of water. The Bank anticipates providing such support through i t s various lending instruments, including budgetary support for policies and prior actions that address key issues (Development Policy Lending) as well as through specific investment lending for infrastructure and institutionalreforms. Finally, given the major scientific, policy and implementation challenges ahead, the Bank, with partial support from the Government of the Netherlands, will mount a major program for providinganalytic and technical support to the federal and provincialgovernments. ParaphrasingAkhter Hameed Khan, the great Pakistani reformer', it might be said that the Bank's involvement inwater in Pakistan has been one inwhich the Bank "has chased the rainbow of well- functioning institutions and dreaded the nightmare of further institutional decay.. .. andthat only the boldest among us can say that we may not be similarly engaged tomorrow"*. xxii I:THE 88 In2003, the Board of Executive Directors (representing the 180countries who own the World Bank) approved a new Water Resources Sector Strategy. Two important conclusions of the Strategy were that the general principles adopted needed to be adapted to the widely-varying conditions pertaining in the Bank's borrowingcountries and that there needed to be more systematic and integrated incorporation of water-related issues into Country Assistance Strategies (CAS, the "contract" between the Government and the Bank which defines an indicative four-year package of investment and advisory services to be provided by the World Bank). Water management i s a major issue for Pakistan and area where the Bank has a long history of engagement and a perceived comparative advantage. As part of the process of preparing a Pakistan Country Assistance Strategy for the period 2006-2010it was agreed that the Bank would do a Water CAS for Pakistan, following the logic shown in Figure 1. Generous support was provided by the Bank Netherlands Water Partnership Program. Figure 1: The Water CAS process T h e Pakistan Water CAS process involved several related elements: Extensive discussions with senior officials of the provincial and the federal governments, includmg a major formal consultation on institutional issues; A consultation with about 50 stakeholders from the private sector, academia, NGOs, professional associations and government; and T h e commissioning of the following background papers by prominent Pakistani practitioners and policy analysts. 1 BACKGROUNDPAPER AUTHOR(S) I E S I G N A T I O N 1: Water, growth and Sarfraz K h a n Qureshi 2ormer Director, Pakistan Institute of Development itudies 2. Human and Social K a r i n Siegmann and iesearch Fellows, Sustainable Development Policy Dimensions. Shafaat Shezad Institute Managing Director 3agler Badley ietired WAPDA official Zhief Scientific Officer + evapotranspiration. Water Natural Resources Division, Pakistan 4~riculturalResearch Council 6. Water rights and Zhief Engineer ACE (Pvt.) Ltd. / Project Coordinator ~ Faizul Hasan entitlements. Senera1Consultants for WAPDA 7. Sustainable, accountable Sardar Muhammad 'ormer Member (Water), and Chairman WAPDA institutions. Tariq and Shams-ul- :espectively Mulk 9. Drinkingwater and K h u r r a m Shahid Zonsultant sanitation. 10. The political economy I m r a n Ali Professor, Lahore University of Management Sciences of reform. T U M S ) 11.The role of large dams Pervaiz Amir Economist inthe IndusS stem. Asianics Agro. Dev. International 12. Groundwater Frank V a n Steenbergen Metameta Research and Ground Water/Water Quality development and Shamshad Gohar Specialist Management PCWSSP 13: Modernization of Pervaiz Amir Economist Agriculture Asianics Agro. Dev. International 14.The policies and Sardar Muhammad Former Member (Water), and Chairman WAPDA, prospective plans for Tariq and Shams-ul- respectively development and Mulk management of water resources by the Federal and Provincial Governments. 15. Flood Control and Asif Kazi Former Special Secretary M i n i s t r y of Water and Management Power and Ex-Chairman Federal Flood Commission 16. Drainage and salinity M.N.Bhutta and Director General management. Lambert Smedema International Water Loggingand Salinity Research Institute fTWASRn 17: T h e evolution of Bank Usman Qamar Senior Irrigation Engineer, World Bank lending and non-lending for water in Pakistan 18. T h e evolution of Bank Pervaiz Amir and Nadir Economist lending & non-lending for Abbas Asianics, and Sr. Water Supply and Sanitation water supply and sanitation Specialist, World Bank 2 WE CHALtE The challenges Pakistan is a n arid country. T h e balance between population and available water already makes Pakistan one o f the most water- stressed countries of the world (Figure 2); with rapid population growth itwill soon enter a condition of absolute water scarcity (Figure 3). Inthe cultivable plains, rainfall ranges from about 500 mm a year along the Punjab border with India (which receives some rainfall from the summer monsoon) to only 100 mm a year inthe western parts of Pakistan. These low precipitation a3 levels mean that rain-fed, or barani, Figure 2: One of the worlds most water-stressed countries %,.,. agriculture, is not possible on a large scale in Pakistan. Throughout history people have adapted to the low and poorly distributed rainfall _li_ by either livingalong river banks or -r---- by careful husbanding and management of local water resources. O n e of the greatest of human civilizations - the Indus Valley (Mohenjodaro and Harappa) civilization flourished along the banks of the Indus. But under natural conditions population densities were necessarily low. With Britishrule everything changed. As analyzed in Deepak Figure 3: Declining per capita availability o f water in Lal's history of economic growthin Pakistan (cubic meters per capita per year) the subcontinent3, the British Source. Amir 2005 understood that the marginal returns to water development were higher in regions of relatively low rainfall than in the higher rainfall areas and thus emphasized hydraulic works which would "make the deserts bloom"4. Inmany ways the imperative was to "go west, young man", including into the arid part of eastern Punjab. 3 Inany social endeavor of such ambition, the result varies depending onthe interaction of the natural and human terrain as described brilliantly in I m r a n A l i ' s seminal book T h e Punjab under " 1mperialism"s and in h i s background paper for this Report6. As the irrigation systems stretched further and further away from areas of reasonable rainfall, they dealt with quite different social realities on the groundand gave rise to quite different hydraulic civilizations. InUP and eastern Punjab canal irrigation occurred primarily on already settled lands, and irrigation was a supplement to relatively well- watered rain-fed cultivation. Inwestern Punjab, the part that would be in Pakistan, the situation was quite different. Irrigation here was onto pastoral lands, only a small fraction of which were private proprietary holdings. These extensive barren tracts were appropriated as state property and categorized as Crown or State Waste Land. Not only were the rights of the pastoral tribes to the land not recognized, but these tribes were also deemed to lack the agricultural traditions to make a success of cultivating new land. The Britishadministration then embarked on a vast process of agricultural colonization, by essentially introducing colonists from other parts of the Punjab to these 'canal colony' lands A massive canal system (Figure 4 shows its extent today and Figure 5 the architecture from the barrage to the field) was built,with the principle being to maximize the use of "run-of-the-river" flows inthe khanzseason and to allow equal distributionto all irrigators by use of the warabandi, a time-based roster allocation system. Since that time agriculture in the region has largely been synonymous with irrigation, with rainfall playing only a supplementary role both for the spring (rabz) and autumn (khanj harvests7. -. :rrigation System Source: Hosan 2005 4 I , Figure 5: typical canal command inthe Indus system A Source: Hasan 2005 As population densities increased, especially in 1-Lim Lost -Area Flooded (Million Acres) 1 the areas adjacent to the rivers, so too did the vulnerability of 3,500 25 people to the naturally 3,000 20 meandering nature of 2,500 heavily-silt laden rivers, 15 and to floods. As 2,000 shown in Figure 6, 1,500 10 floods have, with 1,000 considerable regularity, 5 inflicted large damages 500 and caused many 0 0 deaths. The nature of the flood protection and management challenge varies considerably across the countrys. InNWFP Source: Kozi. 2005 and Balochistan and parts of the Punjab the so-called "hill torrents" are usually highly beneficial, sustaining a large agricultural population. Occasionally flash floods cause serious damage, as did the drought-ending 5 floods inBalochistan in2005. Inthe plains the problem i s different. Punjab has problems both with inundation a n d land erosion, but intelligent use of the natural, south-west slope of the land has reduced the impact of flooding. Inall river systems, and especially those with heavy silt loads, the greatest flooding problems are in the flat deltas. And so it i s in Pakistan, where Sindh i s basically a delta inwhich the Indus has meandered over millennia. As in all deltas, once silt i s deposited in one place, the river shifts to a lower-lying area. In times of flood these can be very dramatic and long- distance shifts. As larger populations inhabited the delta, however, this uncertainty was not acceptable and so, over the past 150 years "the Indus River has now been put in a straitjacket, thereby fixing i t s location"9. T h e result of this river training, as with so many other silt-laden rivers around the world, has meant that when silt is deposited the river now does not shift course horizontally, but vertically, givingrise to a situationwhere the river is now higher than surroundingland and the choice is between two unsatisfactory and expensive options - dredging and continuing to raise the side embankments. T h e inevitable consequence i s that "when a protection bund breaches in Sindh Province, inundations are prolonged, and the floods not only damage summer crops but they also interfere with the sowing of subsequent winter crops. The potential for economic losses, and human sufferings for the poor inhabitants of relatively cheap flood-prone lands near the river, are the greatest. In addition to millions of acres of irrigated land that i s subjected to flooding, country's major railand roads are also sometimes affected by super flood events that keep the infrastructure out of service for long durations."1° Transforming an arid and capricious environment into one inwhich large numbers of people could live peaceful and prosperous lives is, everywhere, a great gamble and even, in the eyes of some, a Faustian bargain. T h e natural flow regimes of the rivers were dramatically altered. Rivers which had previously meandered over wide plains were now confined within narrow channels. The large quantities of sediments which were washed off of the young Himalayas in the spring floods now no longer nourished the delta but were diverted onto land (and later partially trapped behind high dams). Vast quantities of water were disgorged onto deserts, substantial parts of which were of oceanic origin and highly saline. And areas which were previously habitable only by nomads were now transformed into dense "canal colonies" of immigrant farmers". T h e area was, for better or worse, transformed into a hydraulic civilization which brought great returns butwhich also posed, and poses, massive political, hydraulic and economic challenges inmaintaining an acceptable balance between the natural system and man. T h e first challenge for the nation of Pakistan was a political challenge which arose because the hasuly-drawn lines of Partition severed the irrigated heartland of Punjab from the life- givingwaters of the Ravi, Beas and Sutlej rivers (Figure 7). T h e second challenge was a hydraulic challenge, because there was now (Figure 7) a m i s m a t c h between the location of Pakistan's water (from the Indus,Jhlumand China, the so-called western rivers) with the areas that had previously been irrigated from the Ravi, Beas and Sutlej (which were now "India's rivers"). Figure 7:The Indus Water Canal Systemat Partition in 1947 The third challenge was neither political nor hydraulic but ecological. Itwas this last reality which gave rise to the thirdmajor water challenge A C W DOAB RECHNLM A R BAR1DOAB A` which Pakistan had to face at and after Independence. Hundreds of billions of cubic meters of water were now stored in the naturally-deep aquifers of Punjab alone. The groundwater table rose dramatically (Figure 9,and in many areas water tables now reached the level of the land. And these waters were rich in salts which had been absorbed from the soil. After the water evaporated, the land was covered with a crispy layer of life- suppressing salt. Inthe early 1960s it Figure 8: The change in groundwater levels appeared that Pakistan was doomed, Source: Bhutto and Srncdrmo ZM ironically, to a watery, salty grave. The response public infrastructure - Partition both created Pakistan and did it in such a way that the very survival of the country was put in jeopardy. Almost ninety percent of the irrigated area in the Indus Basin was now inPakistanlz, but the rivers which nourished these lands had their origins inIndia (and, to a minor degree, inremote and sparsely inhabited parts of China). Over the next decade, teams from Pakistan and India worked together with a team from the World Bank (whose offer of i t s "good offices" was accepted by both countries) to fashion a solution which would be acceptable to both sides and would be durable. There were great difficulties and many dead ends. The first proposal (framed by David Lilienthal, former Chairman of the Tennessee Valley Authority and the person who got the ball rollingon the IndusTreaty) was of a single, integrated basin authority. This was rapidly rejected as being impractical. The broad outlines of the agreement were that Pakistan was (withminor exceptions for existing uses inKashmir) assigned full use of the waters of the Indus,Jhelum and Chenab rivers, which accounted for 75% of the waters of the system. But the unique feature of the negotiating process was that it was agreed that the process should not be driven by legal principles but that, instead, principles of water engineering and economics were to be the basic considerations.13 This meant that, Pakistan's considerable misgivings notwithstanding, India was to be permitted (under very carefully specified conditions which took two years to negotiate) to tap the considerable hydropower potential of Pakistan's three rivers before these entered Pakistan'``. The IndusWaters Treaty (IWT) was not a first-best for either side. Then there were conflicting principles put on the table - "no appreciable harm" versus "equitable utilization". As inmost other cases "international water law i s used by riparians less to resolve disputes than to dignify positions based on individual state interest."l5. And so too it was for the way in which the IWT was (and sometimes still is) perceived. Fromthe Indian side the fact that Pakistan got 75% of the water represented a fundamental violation of the principle o f "equitable utilization" (the favorite of the InternationalL a w Association). "The Treaty came under heavy fire in the Indian parliament and was subjected to trenchant criticism by most of the speakers who participatedin the Lok Sabha debate on the subject on 30 November 1960. They blamed the Government of India for a policy of appeasement and surrender to Pakistan and said that Indian interests had been let down..."I6 From 7 the Pakistani side the fact that they were allocated "only" 75% of the water w h e n they had 90% of the irrigated land represented a violation of the principle of "appreciable harm" (the favorite of the International L a w Commission). A solomonic judgment (to which w e return several times in this report in other contexts) was that of President Ayub Khan: " ....we have been able to get the best that was possible.. ..very often the best i s the enemy of the good and in this case w e have accepted the good after careful and realistic appreciation of our entire overall situation.. ...The basis of this agreement i s realism and pragmatism.. .."I7 T h e wisdom of this perspective has been vindicated many times over the past 45 years, with the Indus Treaty recently again being declared "sacrosanct" by the Presidents of both countries. A central element of the IndusWaters Treaty was the construction of the infrastructure which would enable Pakistan to both supplythose areas which would no longer be irrigated from the Ravi, Beas or Sutlej ("India's rivers") and to increase the overall area under irrigation. T h e Indus Basin Development Fund (withcontributions from several western governments, a payment from India and loans from the World Bank) was used to re-plumb the system, as shown in Figure 9. This included the buildingof massive "link canals" from the western rivers to the east and to build the two main storage dams (Tarbela, the then-biggest rockfill dam in the world, on the Indus and Mangla on the Jhelum) on which the re-configured system would depend. This was a massive engineering challenge, that faced, as do all challenges inlife, times when failure seemed imminent. Butwith great skill and commitment Pakistan's engineers and their collaborators from around the world did it. The Indus Waters Treaty brought a fundamental and unprecedented change in Pakistan's options and approach towards i t s water development and management, With the loss of the three eastern rivers, Pakistan had no choice but to rely on storage for meeting i t s existing demands (Mangla) and for future extension of the irrigated area (Tarbela). In short, the development and sustainability of water resources development inPakistan became, and continues to be, dependent on storage and dams. What was the social and economic impact of this infrastructure? First,it secured the future of a young and vulnerable country. (It is relevant to note that, despite the fact that itwas funded bythe World Bank, there was no economic analysis done of Mangla D a m - it was a n investment that was self- evidently necessary for the pure survival of the Punjab in Pakistan.). Second, it - especially Tarbela - facilitated the expansion of irrigated area and the production of clean and renewable hydropower. In a major study done for the World Commission on Dams, Pervaiz Amir and colleagues did an ex-post assessment of the impact of Tarbela. 8 T h e impact was and i s massive. Inthe mid-1970sthe World Bank did an ex-post assessment of the economic impact of Mangla and the link canals. While recognizingthat the indirect benefits were large, the assessment focused only on direct benefits, and concluded that these exceeded 10%. Power Irrigation ' ~ 3500 1 3000 (I) g 2500 2000 r '' 1500 E 1000 0 500 0 Predicted Actual those predicted at appraisal (Figure 10). As Figure 10: Benefits from Tarbela 1975-1998 noted in the Tarbela 51ICh onnn There have been two major studies in the sub-continent which have examined these indirect impacts. A study by the International FoodPolicy ResearchInstitute of the impact of the green revolution19 showed that: T h e multiplier was large -- each rupee increase invalue added in agriculture stimulated an additional rupee of value added inthe region's non-farm economy; About halfof the indrect income gainwas due to agriculture's demands for inputs and marketing and processing services, and the rest due to increased consumer demands as a consequence of higher incomes; and T h e multipliers for basic productive infrastructurewere much higher than for social spending and other sectors. 9 As pointed out by Pervaiz Amir20, the indirect impacts of major dams inPakistan are likely to be quite similar to those emanating from the similar-sized Bhakra D a m in the Indian Punjab, for which there has been a major recent assessment21. T h e study found that the direct benefits were higher than anticipated when the dam was built and that the dam did, indeed, serve to transform this region. For every 100 rupees of direct benefits, Bhakra generated 90 rupees of indirect benefits for the regional economy and ripples well beyond the region. These investments were done in the name of national survival, food security and economic growth: how do they fare when judged by the contemporary criterion onpoverty reduction? T h e single most important finding from research shows that the central issue for poverty reduction i s not who gets the water, but how that water transforms the demand for labor (which i s provided primarily by the landless and marginal farmers). T h e fundamental driver i s that the demand for agricultural labor i s 50% to 100% higher on irrigated land22. As Robert Chambers has shown through village-level work (Figure 1l), irrigation has meant higher and much more stable - employment, with the poor the major - irrigated village beneficiaries. unirrigated village Two recent, much more sophisticated Figure 11: Average number o f employment for analyses (which used input-output adult casual laborers each month matrices and using Social Accounting Source: Chambers 1988 Matrix methods) have shown similar results. T h e study by the International Food Policy Research Institute of the impact of the green revolution23 showed (Figure 12) that the biggest % increase 1973- winners from the Green Revolution 1983 were the landless whose incomes increased by 125 percent as a result of '""T I I the large increase in demand for their labor. 100 And the major study byBhatia and 50 colleagues of the effect of Bhakra24, again (Figure 13) shows that the rural 0 poor have benefited hugely from the Large farmers Smllfamers Non-irrigating Landless Nan-ag project and (Figure 14) that it was the with irrigation with irrigation farmers households indirect effects of the dam which had the major impact on urban areas (and Figure 12: The Effect of irrigation and green revolution on income therefore on urban poverty reduction). (There are, of course, a number of important differences between Source: Hazel1et 01 1991 landholding size and agricultural productivity in the Indian and Pakistan Punjabs, which would mean that the distribution of direct benefits, which accrue to those with land, would be somewhat different. But there i s unlikely to be 10 % change of Income of DifferentTypes of Households With and Without Bhakra Dam 80 60 40 20 0 Landowners Agr Labor Rural Non Agr Rural Others Urban Figure 13: The effect of Bhakra Dam on different social groups Source: Bhatia, 2005 a Direct Impacts Indirect Impacts l 100% 80% 60% 40% 20% 0% Self Agr Labor- NonAgr- Others- Urban Erployed- Rural Rural Rural Rural Figure 14: Income Gains from Directly and Indirectly Impacted Sectors- Bhakra Dam Source: Malik 2005 11 m u c h difference in terms of the forward and backward linkages which determine the magnitude of the indirect effects, or of the effects on the poor, since labor markets operate quite similarly on both sides of the border.) With the certainty - or so it seems - of retrospective wisdom, it has been claimed that these interventions did nothing for the poor, because it was rich farmers who benefited from the infrastructure25. These studies show the limits of such a reductionist view (which has never been one taken by governments with responsibility anywhere in the world). At the end of the day it does not matter (a) whether such projects are justified in terms of poverty reduction or (b)whether the primary recipients of the "first-round benefits" are those with land. Because the record i s overwhelmingly clear -investmentsinwaterinfrastructure inthesub-continent haveresultedinmassivereductionsin poverty, and it is actually the poor and landless who have been the biggest beneficiaries. T h e appropriate (water!) metaphor (as in other water projects around the world) i s not "trickle-down" but a risingtide lifts (almost) all boats". Finally, all pubic infrastructure was not for irrigation. Settling large numbers of people ina n arid and capricious environment means facing not only the constant threat of famine, but the constant threat of variability's other face, occasional but very damaging floods. "Floods are detrimental not only in financial terms, but also in their ability to severely undermine the productive system that has to be reasonably free from uncertainties and frequent disruptions" *6 As also pointed out by Asif Kazi, there can be no such thing as full protection from floods. In terms of infrastructure, the challenges (and the responses) are quite different in different parts of the country. In addition to the major dams (which provided some protection from floods), and the multitude of small check dams in the hills, there were also substantial investments in flood control infrastructure, with about 6000 kilometers of embankments constructed along the major rivers and their tributaries27. There have also been investments inwatershed protection (above Mangla, for example28) which have probably had a modest effect on the uncontrollable sediment loads from the young mountains, and have and could have (accepted wisdom notwithstanding) little effect on large scale flooding29. T h e Pakistan approach to flood management has also emphasized other non-structural elements, "including permanent and temporary relocation of potential flood affectees, review o f reservoir operation regulations to attenuate flood peaks, land-use regulations for hazardous areas, and an extended and reliable Flood Forecasting and Timely Warning Network."30 The response private infrastructure - T h e large investments in surface irrigation transformed not only the economy and landscape of Pakistan, but had a huge impact on groundwater. T h e vast, leaky, irrigation system disgorged hundreds of billions of cubic m e t e d 1into the aquifers of the Indus Basin at the same time as when natural drainage channels were impeded. T h e result was a fundamental change in the water balance, with subterranean and surface flows out of the aquifers and into the rivers and eventually the ocean no longer capable of draining the m u c h larger quantities of water which were poured into the aquifers. T h e result was an inexorable and relatively rapid rise in the water table, as shown for a cross-section between the Punjab canals (Figure 15) and on an average basis for a longer period in Figure 16. There were two pronounced and curiously entangled consequences o f the highwater table. 12 A CHAJ DOAE RFCUNA DOAE BIiRl OOAB A' i r I t 4 0 20 40 60 80 lOOkm Figure 15: The rise in groundwater levels 1860-1960 Source: Bhutta and Smedema 2005 45 0 40 -10 h $ 35 L -20 - 30 v E -30 Ue, m 25 $ 20 -40 5 + U 2 15 -502m m .?10 - -60 e C J (3 5 -70 0 -80 1900 1915 1934 1947 1963 2001 2004 Figure 16: Irrigation expansion and groundwater levels Source: IWASRI/WAPDA, 2004 13 T h e first consequence was a revolution inthe use of groundwater. At the time of independence, groundwater use in the country was very limited - mainly through Persian wheels in the riverine aquifers, and the remarkable kareres (horizontal community wells) inBalochistan. This changed dramatically from the mid-sixties onwards as a result of several converging factors. As the Green Revolution took hold, farmers needed m u c h more reliable supplies of "just-in-the" water. The canal system, however, with few hydraulic controls and rigid, predetermined schedules was derived for another, less precise type of irrigation and no longer met the more demanding needs of farmers, T h e "green revolution" was not just about seeds and fertilizers, a central part was also the emergence of the new modular pump plus diesel engine technology which offered every farmer an "exit option", or at least one inwhich he could ensure that he hadwater when he needed it if the canal irrigation system failed. As emphasized by IWMI's Tushaar Shah32, "we need to recognize that self provision of water i s the best indicator of the failure of public water supply systems. Tubewells proliferate in canal commands because public irrigation managers are unable to deliver irrigation on demand.". In addition, starting in the 1960s there were new forms of government support: credit and soft loan programs for pump sets and tubewells, and subsidies for electricity (with agricultural rates 40% less than normal rates in Punjab and Sindh, and 60% less in Balochistan and NWFP)33. T h e second consequence of the rapid rise in the groundwater table was m u c h less benign. Ini t s travel down and back up the soil profile, the water had absorbed the salts - sometimes very abundant where the sediments were of oceanic origin, as in large parts of Sindh -- which were present inthe soil. W h e n the water evaporated the salts stayed behind, covering large areas of once-fertile fields with a sterile crust. T h e low-lying areas were now effectively barren, due to the combined effect of salt and sodden root zones. Inthe early 1960s, it appeared that the blessing of bringingwater to the desert had ended up as a curse, with 4 million hectares of Pakistan affected by waterlogging and salinity and apparently doomed to a watery, salty grave. But just as there are unforeseen ecological consequences when manintervenes with nature on such a massive scale, so, too, i s the power of human ingenuity also often unimaginable. So when President Ayub Khan visited Washington in 1962, he told President Kennedy of the curse of waterlogging and salinity. And thus started another chapter, for that conversation led to a major scientific enquiry by teams of natural and social scientists from Harvard University (where else, with Kennedy in the White House!) and their Pakistani colleagues into the causes of the problem and the policy options for containing the damage. Intuition said that the balance needed to be restored by reducing the flows into the aquifers, by liningthe canals. But the scientists said otherwise -- the way to establish a new, not-so-close-to-the-surface water balance was to increase the amount of evapotranspiration (more crops) and to increase the circulation of water so that the salts would not accumulate in the root zone. And so it proved, although not quite inthe way that the scientists thought and advised. For that was an era of n a h e faith in the capacity of governments to plan and implement, and of little confidence in the actions of individual peasant farmers. And so the proposed solution was large-scale installation of public tubewells, which would re-cycle groundwater back into the canals for subsequent use on the fields in the sweetwater areas, and pump saline water out into drains in the saline areas. And so almost 20,000 high capacity (50-150 liters per second) government-run tubewells were installed from the 1960s onwards under the Salinity Control and Reclamation Project (SCARP)34.Inmany of the worst affected areas the SCARP formula worked wonders - converting a saline wasteland back into a productive area. In fresh groundwater areas, the SCARP drainage tube wells doubled up as an additional source of irrigation. In saline groundwater areas the problem of disposing the highly saline effluent made the deep tube well program far more complicated and the impact more limited. As we have seen above, the farmers knew one thingbetter - they didnot need larger supplies of unreliable water, but m u c h more precise supplies which they could control. And so the great attack on 14 waterlogging and salinity followed the compass o f the scientists, but not their road-map. The large SCARP tubewells were installed and didplay a role; butit was the unfettered action o f millions o f farmers with their individual tubewells and their intensifying agriculture which reversed the risingtide of water and salt, and restored a still-uneasy balance. The net result of this interplay o f supply- and demand-side 700,000 1 factors was (Figure 17) an explosive increase in the 3 600,000 I number o f tubewells for 500,000 irrigation, primarily in the sweetwater areas far from the 5 8 400,000 ocean and nearer the v - v) 300,000 I mountains. (The investment al o n these private tube wells i s 200,000 o f the order o f Rs. 30-40 P +3 100,000 billion.) Inaddition many industries rely for their water 0 supply on relatively `clean' ,g ,$P groundwater.35 ,&Q ,&% ,$?% ,@Q ,@Q ,@% &Q$Q5 In1960, groundwater accounted for only 8% o f the Figure 17: The growth in use of tubewells Source:Steenbergen and Gohm 2005 farm gate water supplies in Punjab. Twenty five years ~~ later this figure was 40%, and at present groundwater use for agriculture accounts for more than 60 YO o f the water at the farm gate inPunjab36. Itis estimated that 75% o f the increase inwater supplies in the last twenty-five years i s due to groundwater exploitation37. Inthe process, the great canal system became less of a water delivery mechanism, and more o f a groundwater recharge mechanism. Inthe Punjab, for example, 80% o f the groundwater recharge i s from the canal system. Finally, it i s instructive to consider the source o f irrigation water by both quantity and ElCanalwater directly value, inpart because it shows the centrality o f conjunctive use, and the fallacy o f a 0 Tubewells Cartesian view, namely that from natural recharge "groundwater i s more important than surface water". E3 Tubewells Figure 18 shows: fromcanal- induced That surface water i s recharge very important, accounting for 90% By quantity By value used for irrigation in (cubic meters) (Rupees) Punjab (40% directly and 50% indirectly). The massive infusions Figure 18: Quantities and values o f irrigation supplies in Punjab, of surface water remain by source as important as ever. However, primarily because of the inability 15 of the surface system to directly meet the just-in-time demands of modern agriculture, the delivery i s through the circuitous (and costly inmany ways) groundwater system; and That groundwater i s very important, accounting for 60% of the water delivered at the farm gate and 75% of the value of water delivered. Insummary, the last forty years witnessed an extraordinary demonstration ofman's ability to thinkand act h i s way out of apparent dead ends. With equal doses of good thinking, goodplanning and good luck, the people and governments of Pakistan have addressed the twin challenges of producing more while simultaneously dealing with a fundamental threat to the natural resource base. T h e good thinkingwas the application of water science and economics by many of Pakistan's best and brightest inconjunction with many of the bestwater minds inthe world. The "solution" was not the obvious one of liningcanals and puttingless water on the land but of increasing the use of groundwater, thus bothincreasing evapotranspiration, drawing downthe groundwater table and leachingmuch of the salts down and out of the root zone. T h e good thinking and good planning were classic "public goods". The "good luck" driver of this revolution was the modest but transforming tubewell and diesel engine, bought and managed by millions of farmers for the simple reason that this decentralized "on-demand" source of water enabled them to greatly increase their crop yields and incomes. The response institutions - A s described earlier, the hydraulic civilization of the IndusValley in Pakistan was a very particular construction, cut from quite a different cloth from i t s apparently-similar Indian cousin to the east. To the east, irrigation was a service provided to existing farmers who had long been engaged in settled agriculture. To the west, in the to-be-Pakistan areas there were only pastoralists. There the role of the State was not only to lay out the physical infrastructure, but also to construct an entirely n e w colonial social structure38. All of history is path dependent, butinfew places is the importof the initial decisions as profoundand as clear as it i s in this case, as dissected with extraordinary clarity by I m r a n Ali39, For the British, especially after the armed struggle of 1857, the Punjabis were the favored people of the sub-continent. I t was only Punjabis -andnotgroupsofanyoftheother ethnic groupsinthe futurePakistan-who were given land in the canal colonies in both present Punjab and Sindh, laying the basis for still- simmering perceptions of preferential treatment by the State. Furthermore, the colonial administration almost universally confined the selection of grantees to the `upper' segments of village society (the lineages that controlled land and power at the local level) and excluded the lower status `service' castes. And here another path-defining brick was laid, for these same landholding castes monopolized recruitment into the colonial military, with Punjabis comprising fully half of the entire British army. T h e d t a r y thus became a major actor in the emerging hydraulic society, through substantial land grants to military personnel, military farms, extensive horse-breeding schemes, and stud farms and remount depots for the cavalry. After 1900, the selection process worked within the framework of the Punjab Alienation of Lands Act, which listed hereditary landholding castes in each district, and forbade land transfers from `agricultural' to `non-agricultural' castes. Finally, those who were rewarded with land inthe new canal colonies were primarily non-Muslim Punjabis from the east, laying the seeds for the massive problems of return migration in 1947. T h e hydraulic state in Pakistan, then, created not just infrastructure, but social fabric, and it was a state which evolved in close association with the military. T h e hallmark of the Pakistani water bureaucracy at Partition was one of discipline, order and the unquestioned supremacy of the State. As described earlier, the pressing water challenges of Pakistaninthe first decade after Independence were to build the infrastructure necessary for water and energy security. Given the dominance of the 16 single trans-provincial Indus Basin and the need for basin-wide solutions, the logical response was WAPDA, a parastatalgiven a mandate of planning and buddingthis infrastructure and given the human and financial resources to do so. WAPDA proved to be very successful, developing a global reputation for world-class expertise in planning, construction and operation. Buildinginstitutions, however, is not a one-shot business. Tradeoffs which were made quite sensibly at one particular stage of development, may not be appropriate as opportunities and values change. T h e key test is whether the physical and institutional systems are able to evolve as circumstances change. T h e very success of one endeavor gives rise to new challenges, and often challenges which are fundamentally different from those just mastered. It i s now generally agreed that in recent decades the major water institutions - the Irrigation Departments, WAPDA - have ossified, and not evolved inthe face of changing circumstances, incentives and demands. Like all institutions, they were designed to meet a specific need at a particular historic juncture. In the case of the Irrigation Departments, the challenge of the 19th century was to put inplace a low-cost extensive unlined canal system which could spread the then-abundant water onto a very large area at minimalcost for the production of foodgrains. The reasonable result was a system which hadlittle ability to regulate flows within the channel systems or for flow measurement at either the main,branch or distributary levels and which ensured that painwas equally spread through an inflexible time-based allocation system. Some defects were cumulative and became apparent and important over time. T h e rigidand simple wurubundi rules had many virtues, but also -like all human endeavors -vices. A major issue was that a time-based distribution system which did not take account of large canal losses ended up heavily discriminating against tail-enders. The "take it when w e give it; and use it or lose it" philosophy of wurubundi also meant that the system became less aligned with the needs of irrigators as water became scarce, and as farmers shifted to varieties and crops which were more sensitive to the timingofwater inputs. Farmers, as everywhere, adapted inways that they could - by trading wurubundi turns inthe distributaries, and, eventually, by becoming heavily reliant ongroundwater which they could control m u c h better. This "involution" (to use Clifford Geertz's cultural anthropological construct40) meant that the Irrigation Departments slowly but surely shifted their focus from being a good service provider to being concerned substantially with ways inwhich the Department could serve the needs of the people init. A greater and greater amount of the real attention ofthe Irrigation Departments was paid to the employment provided, and the opportunities for rent which could b e extracted at all levels. T h e iron equation of rent-seeking (monopoly + discretion -accountability =corruption) wasatworkevenin colonial time: "The subordnate bureaucracy was involved extensively in perquisites from agricultural owners. T h e larger and m o r e powerful the latter, the more concessions they could obtain from corruption. This occurred in essentially two features: first, greater and inordinate access to irrigation water; and second, underassessment of water rates. This situation was exacerbated in Sindh, with more land under large landowners."41 After Independence, this process was deepened and strengthened. T h e Irrigation Departments (a) maintained (to this day) their monopob status; (b) developed ever-higher levels of discretion (so that at each level in each of the systems there are just a few people - sometimes one - who decide exactly how and why water is distributed to the various canals inthe ways it is) and ensuring that the water records remained (and remain) internal rather than public records; and (c) concurred with the cumulative uppingof the "who pays" balance away from the user and towards the budget, thus creating a larger and larger discrepancy between the cost and value of water (and thus a larger and larger space for arbitrage) and less and less uccotmtubi&yto users. T h e end results are somewhat different in different areas, and always there are good people at various levels who push to hold the incentive structure at bay. But the systemic result i s clear. T h e originaldiscipline of the wurubundi is severely damaged, with "direct outlets" constituting up to 30% of flows in some canal commands. 17 T h e rents extracted are huge: at the top of the feeding chain in some provinces crores of rupees allegedly are paid by officials for positions; at the executive engineer level offers of "clean jobs at four times the salary" are rejected because of the major loss of income (formaland mostly informal) this would entail. Put all of this on top of a system where inequality (the so-called "feudal problem") was built in from the start and it is not surprisingthat the single most strikingfeature to experienced outsiders is the very highlevel of mis-trust in the water management system of Pakistan. T h e contemporary situation is summarized well by I m r a n Ali: "with declining administrative efficiencies, overstretched organizational resources, degraded service delivery, and unchecked corruption, there appears to be a glaring failure of centralized irrigation manage men^"^^ WAPDA has a shorter history driven by the original planning and construction of major infrastructure mission. It performed this heroically, inmany respects, with an organization of high morale and competence buildingMangla and Tarbela, and, inthe process overcoming enormous technical challenges which threatened the integrity of structures which have served the country so well. With the imminent completion of Indus Basin Project and Tarbela dam, the country`s emphasis shifted to addressing water logging and salinity problems, both of which were included inWAPDA's founding Act. In 1973, the federal government launched an "accelerated program" of water loggingand salinity control (SCARP Program). WAPDA, which had skimmed off the cream of the technical expertise earlier available in the Irrigation Departments, was the natural choice to play the lead role in the construction of SCARPSas well as new canals that cross provincial boundaries. While federal resources for the SCARP Program were allocated to the provinces, they were obliged to use WAPDA as the "contractor". Completed works were "handed over" to the Irrigation Departments, who took over O&M responsibility, invariably with reluctance and reservations. Besides operating and maintaining the existing three major reservoirs, WAPDA continues to perform some of these new responsibilities to date, even though this takes opportunities for the Irrigation Departments to develop their own capacity. With the ongoingreforms of WAPDA's Power Wing and the advent of the drought and emergingwater shortages, WAPDA has once again been thrust into the limelight. The residual Water Wing of WAPDA has shifted i t s focus towards developing water resources envisaged in i t s ambitious Vision 2025. WAPDA i s constructing several medium size reservoirs as well as major irrigation extension projects (Greater Thal and Kachi canals), while planning for and advocating major new reservoirs. Inmanyways these key institutions of the hydraulic state of Pakistan I I resembled and in some cases were modeled after, similar institutionsin developed countries which had used water infrastructure as the platform for growth inarid lands. And as with all such countries -including the USA, Mexico, Brazil, South Africa, Egypt, India, Thailand, Australia and China - the process of institutional change has been protracted, fitful, difficult and incomplete. Inthe process o f a I similar review with the World Bank Figure 19: Rates o f return on investment on inChina, the Government of China infrastructure and management of water resources developed a useful schematic Source World 0mk 2W3 representation (Figure 19) of the 18 institutional challenge in movingfrom an era, "Stage 1" inwhich buildinginfrastructure i s the dominant challenge, to "Stage 2", where infrastructure still had to be built, but maintenance and management of existinginfrastructure and resources become the primary challenge. Longas the distance is to go, Pakistan has made some very important progress insome critical areas. Institutions are not just organizations, but the "rules of the game" which govern relationships among organizations and people.43 T h e most fundamental of the instruments which affect water management are those which define who is entitled to do what with water. At the apex level there i s the IndusWaters Treaty which defines, unambiguously and inperpetuity, the water that belongs to Pakistan. One of the great virtues of the Treaty was that by the clarity of definition, and the permanent nature of the rights so established, it motivated India and Pakistan to focus on how they would use the water that was theirs (and not on endless distracting haggling about what water they should have). Recent differences on "differences" which have arisen in the interpretationof the Indus Waters Treaty have confirmed the foresightedness of the framers of the Treaty (who set up well-defined mechanisms for dealing with these) but have also suggested that there i s room for modernizing the bilateral dispute resolutionmechanism so that questions can be resolved in a more predictable and time-bound manner by the Indus Waters Commission. Ina system where mostdepend on a single river system, clarity on entitlements at the next leveldown -betweenprovinces-wasequallyimportantand, inmany ways, equally disputatious. Startingin1935, there were a series of high-level commissions constituted first by the Britishand then Pakistani governments to try to get a lasting agreement on the division of the Indus system waters among the provinces. After many failed attempts, in 1991, agreement was reached on the provincial entitlements to waters of the Indus Basin (see Box 1 from the background paper from Faizul Hasan44). This Water Accord i s a great achievement since it defines, unambiguouslyand in perpetuity, the shares of available water which can be used by each of the provinces. It is worth re-counting the bases for the Accord. T h e basis for entitlements was prior existing uses: "the record of actual average system uses for the period 1977-1982 would form the gudeline for developing a future irrigation pattern. These ten daily uses would be adjusted pro-rata to correspond the indcated seasonal allocations of the different canal systems and would form the basis for sharing shortages and surpluses." This meant that "the existing uses of water supplies to the provinces, which they have so far been getting as ad hoc allocations, remain untouched". T h e Accord specifies an automatic process for adjusting entitlements depending on availability. "These ten daily uses would be adjusted pro-rata to correspond the indicated seasonal allocations of the different canal systems and would form the basis for sharing shortages and surpluses." Incase a provincewas notina position, for the time being, to make fulluse ofits allocation, that surplus may be used by another province without acquiring a right to it. The Provinces were, in law, given freedom by the Accord to use their allocation in any way that they want: "there would b e no restrictions on the Provinces to undertake n e w projects within their agreed shares" and "the provinces will have the freedom within their allocations to modify system-wide and period-wise uses". Inpractice, however, the fact that provincial entitlements were explained as aggregates of specified historical uses in different canal commands meant that the Accord was thus implicitly specifying the distribution of the provincial shares to each of the existing canal commands, allocations which, in Punjab at least, are followed to this day. Similarly the historic allocations within each canal command among the distributaries i s also defined historically and followed and similarly down to the outlet level, below which the warabandi system specifies shares. 19 W h a t this implies i s that in major parts of the Indus Basin irrigation system there are, in fact, well-defined entitlements at all levels, f r o m the international, through the inter-provincial, downto canal commands, distributaries and outlets and ultimately to each farmer on a water course. Box 1: The Water Accord of 1991 There was an agreement that the issue relaung to apporuonment o f the waters o f the Indus F h e r System should be settled as quickly as possible. In the light o f the accepted water distributional principles, the following apporuonment (inMAF) was agreed to: ICharif Rabi Total Punjab 37.07 18.87 55.94 Sindh* 33.94 14.82 48-76 NWFP 3.48 2.30 5.78 Balochistan 2.85 1.02 3.87 Civil Canals** (NWFP) 1.80 1.20 3.00 ***Grand Total 79.14 38.21 117.35 Including already sanctioned Urban and Industrial uses for Metropolitan I50 Pakistan of 6.0 cents per kwh). Thousand rupees per year The rate of return of the project was very high at appraisal and Figure 82: Household income of families at Ghazi Barotha Hydropower Project before and after resettlement SOYICC: World Bonk ZW4 105 even higher ex post -- the economic rate of return was 22.5% (versus 20% at appraisal) and the financial rate of return of 15.1% (versus 13.8% at appraisal).'92 Inaddition to i t s large direct contribution to the Pakistani economy, Ghazi meant that the Bank was involved in a power sector reform program inwhich WAPDA was to be unbundled into independent generation, transmission and distribution companies (a process not yet complete). Finally, Ghazi dealt very successfully with complex resettlement issues, which included legacies from Tarbela. Figure 82 shows that those who were resettled were m u c h better of after than before the project, with average household income increased by about 20%. Water Supply and Sanitationlg3 Water supply and sanitation (WSS) has been an integral part of the social sector investment portfolio of the World Bank. Starting modestly in 196Os, the Bank`s overall WSS portfolio grew to 9% of total commitments in 1979. Subsequently, dedicated lending decreased to about 3% excluding WSS components of non-dedicated lending categories. Currently the bank, world-wide, has 100 dedicated WSS projects and another 150 non-dedicated projects with significant WSS components. Lately, interest in the sector has grown because three targets under MDGs depend on improvingthe coverage and quality of WSS service delivery. World Bank`s involvement, as well as its experience, inthe WSS inPakistan, has been modest even compared with its overall world-wide engagement in the sector. Starting inlate 1960s, the Bank has financed just five dedicated WSS projects until 1999, five years ago focusing primarily on water supply rather than sanitation. T h e Bank has not financed any major sanitation project although there are new projects like the Punjab Municipal Service Improvement Project being appraised with possible Bank involvement in future. Of the five Bank supported projects, just one project covered rural WSS. Four projects were inthe two largest cities of Karachi and Lahore. The results have been mixed at best, because, according to OED reports: Legal frameworks and regulatory mechanisms were absent and hindered achievement of ambitious project objectives. T h e functions of service provisionand regulationwere not separated. Strategies were needed to minimize political interference in operational and policy matters (especially employment). Capital cost contributions and cost recovery needed to be improved while protecting the interest of "the poorest of the poor". There were opportunities for market segmentation and differential pricing that could be exploited. T h e sanitation aspect in most of the projects was not addressed. T h e following i s a summary of the Bank supported WSS projects based on various Bank documents. Lahore WaterSupplySewerage andDrainage Project (1967-72) T h e main objectives of this relatively small Urban Water Supply Project were to rehabilitate and expand water supply, sewerage and drainage facilities at Lahore and to help establish an institutional capability to efficiently operate existing facilities and to develop capacity for long range program expansion. According to an OED report, revision of the scope and design made evaluation and comparison with original appraisal difficult. Despite difficulties the long-run development objectives of water, sewerage and drainage were achieved. SecondLahore WaterSupplySewerageandDrainage Project (1976) 106 Project objectives were to (a) continue with the improvement and extension of Lahore's water supply, sewerage and drainage system; (b) develop an efficient public utility organization which would b e competent to continue the implementation of a proposed ten year investment plan; and (c) develop an urban project which IA subsequently helped to finance. According to OED, the project was successful: the main project objectives were met and the physical components implemented. Tariff adjustments helped WASA to make goodprogress toward meeting revised financial covenants. Project illustrated the need to allow for sufficient time in project implementation schedules for institution buildngand human resource development. Great emphasis on dealing with physical implementation problems was at the expense of operational aspects. OED noted that Lahore i s fortunate to have a 24 hour water supply and a comprehensive sewerage system. T h e service needs continue to grow as the city expands while requests for increase in tariff level are m e t reluctantly. T h e situation of Lahore, located on a sweet water aquifer and in close proximity to river Ravi with potential recharge, i s unique and duplicating this model may be a challenge else where in the country. Karachi WaterSupplyand SanitationProjects (1983-1991) Objectives were to (a) increase Karachi's water supply by 60 MGD (b) introduce system and household metering; and (c) strengthen the Karachi Water and Sewerage Broad (KWSB) through TA and Training. T h e project helped increase supply between 60-70 MGD. However, success in controlling leakages was limited. Through installation of meters and repairs there was an improvement inrevenue recoveries from bulkusers butit hadless effect on revenue from domestic consumers. Project increased long term quality and reliability of bulk supply to Karachi. However, KWSB still did not achieve financial sustainability and required subsidy. The project helped strengthen KWSB capacities to manage and execute large projects. T h e June 2000 OED observations on the project stressed the need for an adequate regulatory framework that provided sufficient management autonomy and a path for reform that guarantees sustainability, limitations of financial covenants and conditionality, and the need to incorporate inproject design valuable local experiences, particularly when they specifically address poverty alleviation. Overall, OED evaluated the project outcomes to be unsatisfactory with unlikely sustainability. SecondKarachi Waterand SanitationProject T h e main objectives of this follow up project were to (1) increase potable water supply and reduce water losses (2)improve the financial viability of the Karachi water and Sewerage Board (KWSB) through increased revenues, cost reduction and increased operational efficiency; (3) improve the organization and management of KWSB; (4) improve sanitation in the City of Karachi, including i t s low-income and coastal area by increasing sewerage coverage and sewage treatment capacity. An OED evaluation states that none of the four objectives were fully achieved (1) the water supply was increased but no reduction inlosses is documented (2) T h e financial viability of the KWSB hardly improved; it survived due to government subsidies throughout the 1990's. T h e operational efficiency and the intended reduction inwater losses of K W S B were impossible to gauge since it chose not to meter domestic consumption. KWSB's organization and management did not improve even after reducing staff from 14,000 to 8,500 and some limited administrative improvements. T h e water supply quantity and quality are probably worse after completion of the project because of a rapid population growth inKarachi and especially among the low-income population. A significant shortcoming was the legal and regulatory framework. An effort was belatedly made at the behest of the Bank to involve a private operator but in the end these efforts came to nothing. According to OED, the main lessons learned were that without a fundamental legislative and regulatory reform, including changed incentives and contracting of a private operator, the project was doomed from the start; financial covenants were ineffective if KWSB lacked the authority and means to comply with them; excessive politicization of the tariff setting and of the management added to the difficulties; and the project design should have incorporated more of community participation 107 especially under the sanitation component where Karachi had gained valuable experience from the well-known Orangi Pilot Project. Rural Water Supplyand Sanitation (1992-95) This project covered all four provinces as well as AJK. As per OED, "it is difficult to measure the achievement of general project objective of improvingrural productivity and health particularly of women and children and reduce poverty and deprivation inruralAzadJammu and Kashmir (AJK), Balochistan and Sindh, since the project failed to develop monitoringand impact indicators. There was success inimplementing the hardware components, while the software components were scaled back considerably. Inthe three provinces, only between half and two thirds of the institutional development assistance funds were actually spent. The project was first IDA financed ruralwater supply project in Pakistan with a demand-driven approach incorporating significant community involvement-and with contributions from beneficiaries toward the capital investments. The new methodology required a change of mind-set of public schemes that had proved unsustainable. Indications are that roughly 95% of the water schemes built under the project are still operating three years after completion. Interms of shortcomings --- the program to expand sanitary excreta disposal programs did not meet the expected acceptance and fell far short of planned achievements. OEDinits review of the project notedthe followinglessons learned from this experience: 0 A demand-driven ruralwater supply and sanitation strategy based on strongcommunity participation requires a longer time to take root than what i s usually offered by one single project. The AJK component performed better than the Balochistan and Sindh components precisely because it enjoyed a century's old tradition of community participation whereas the other two did not. Changing the habits of excreta disposalimplies a much greater effort than providingwater supply. Symptomatically, the water supply investments performedmuch better than the latrine components. Project objectives shouldbe stated in terms that would allow quantitative monitoringof progress towards reachingthem. The Bank's new Water Strategy Inparallelwith these reviews ofWorld Bank engagement inwater inPakistan, and influenced by them, the World Bank developed a new Water Strategy, which was approved by the Board of the Bank in 2003, and set a new direction for Bank engagement inwater throughout the world. The main messages of the 2003 Water Strategy are: Water resources management and development i s central to sustainable growth and poverty reduction and therefore of central importance to the mission of the World Bank. Most developing countries need to be active both inmanagement and development of water resources infrastructure. The mainmanagement challenge i s not a vision of integrated water resources management but a "pragmatic but principled" approach that respects principles of efficiency, equity and sustainability, but recognizes that water resources management is intenselypolitical, and that reform requires the articulation of prioritized, sequenced, practical and patient interventions. The World Bank needs to assist countries in developing and maintaining appropriate stocks of well-performing hydraulic infrastructure and inmobilizing public and private financing, while meetingenvironmental and social standards. 108 The World Bank will re-engage with high-reward/high-risk hydraulic infrastructure, usinga more effective business model. The Bank's water assistance must be tailored to country circumstances and be consistent with the overarching Country Assistance Strategies. Subsequently the Board drew on the main messages - of more aggressive Bank engagement in infrastructure - in setting the parameters for an Infrastructure Action Plan. And recently, the major OED annual review, the Annual Review of Project Effectiveness, carries the same message, sayingthat "The World Bank should focus on promotingeconomic growth rather than social policies as the route to reducing poverty.. and calling on the Bank to refocus its efforts on infrastructure projects and . urban and rural development"194. An indicativeWorld Bank er investment program for 2006-2010: The four pillars: An important objective of this Reportis to be an inputinto definingthe water elements of the framework (known as the Country Assistance Strategy) which will govern the relationships between the World Bank and Pakistan for the period 2006-2010. The program described here i s "almost but not quite" final. "Almost": because there have been extensive discussions between the Bank and the Federal and Provincial governments of Pakistan over water-related priorities over the past eighteen months, The indicative program described here is a product of those discussions and thus one on which there i s close agreement between the government and the Bank. Second, "not quite": the details of the "Government of Pakistan-World Bank contract onwater" for the next four years will only be finalized, necessarily and appropriately, over the next several months as Bank management and the M i n i s t r y of Finance finalize the overall CAS. Since 1980, investments inthe irrigated agriculture sector (water and agriculture) have been declining, both as a percentage of the total public spending and as a percentage of GDP. In2003, the total allocation for agriculture and water represented only about 0.5% of GDP. The Federal and Provincial governments 0Social and the management of the World Bank all agree that water management i s one of the 0 central development challenges facing Pakistan and that Prioritythat should be given by the Bank investments in the sector must be increased substantially. The Figure 83: The "global poll" results f o r South Asia Federal Government is already demonstratingi t s commitment Source: World Bank 2003 inthis regard. The allocation " for water inthe Public Sector Development Program (Federal Development Budget) jumped from Rs 109 20 billioninFY05 to over Rs 35 billionin FY06 representing a 75 percent increase. This i s inbroad agreement with the findings of a major poll of a wide variety of South Asian stakeholders (Figure 83), which concluded that infrastructure, education and governance were the three areas which were both of high national importance and where the Bank was perceived to have a comparative advantage. There i s also a general agreement that water sector i s an area where the Bank has a long history and a strongcomparative advantage. There is, therefore, a general agreement that there will be a major increase in Bank lending for water-related activities, with the indicative overall figures shownin Figure 84. This would mean that water-related lending for Pakistanwould increase about 10 fold from the 2000-2004 period, and account for over $1billioninthe coming four years. 0MajorInfrastructure0lrngabonandDrainage 0Floods 0UbanWS&S 0RuralWSIS Hydro 700 +%all Banklending Sectors - Past and Prospective Figure 84: World Bank Lending t o Pakistan for Water-related Source: World Bank data Given the diverse set of challenges facing the sector and the large need for resources, Bank support would need to be selective, keepinginview the Bank's comparativeadvantage, other donors' traditional areas of support, and the priorities identified in this Report. World Bank support would focus on instruments and incentives for reforms rather than simply on organizations, programs and projects, It would be based on "principled pragmatism" recognizingthat reforms and investments mustproceedinparalleland the best shouldnot be allowed to becomethe enemy of the good. Broadly speaking, Bank assistance would support four pillars of the water sector, as described below: Pillar 1:Asset Development and Management: Pakistan has a large endowment (with an estimated replacement value of USJ60 to 70 billion) of water resources infrastructure, most owned and managed by the provinces, and m u c h now quite old. As described in this Report, the condition of this stock of infrastructurei s a major cause of concern. In some instances - such as Taunsa and Sukkur barrages - the precarious state of major structures puts the well-being of tens of millions of people at risk. Inother instances, the effect i s more insidious, 110 with the poor condition of canals and pipes and treatment plants meaning that infrastructure does not produce the services it should, and people have to adapt to unreliable and sub-standard services. For these reasons a major focus of Bank engagement over the next four years will be to simultaneously finance m u c h needed investments in rehabilitation of some critical assets (including barrages) and to work with Federal and Provincial authorities to develop a more appropriate culture and practice of asset rehabilitation and management. This will included an emphasis on development of Asset Management Plans, which will include an inventory of existing assets, an evaluation of their condition and the requirements for one-time and regular rehabilitation, and for maintenance. Out of this assessment will emerge a set of short- and medium-term priorities for asset rehabilitation and maintenance. T h e Asset Management Plans will make explicit the requirements (and trade-offs) for public and user financing, and the importance for developing efficient institutional arrangements for rehabilitating and maintainingh s infrastructure, As is evident throughout this Report, most of the water inPakistan is already allocated. The implicit view of the Bank, accordingly, i s that attention should be focused on sustainingthe infrastructure that has been bdt, and improving the productivity of water. A vital part of Bank activity in the past has been on drainage. T h e Bank will continue to invest, as part of provincial investment programs, in drainage and salt management investments, and will continue to contribute to the evolution of national and provincial drainage and salt management strategies. O n e major issue that i s likely to emerge in the next CAS period is possible Bank engagement in developing and co-financing major new Indus Basin storage and hydropower, if and when the Government makes such a decision. As is discussed indetail in this Report, this i s a highly- controversial issue inPakistan, in part because of reasonable concerns about the cost and impact of a new d a m and the distribution of costs and benefits, in part because of dissatisfactions with the lack of transparency with implementation of the Water Accord, and in part because this acts as a surrogate for a series of weakly-related historic and contemporary political grievances. Over the past decade, the Bank has tended to shy away from engagement with such controversial issues because of reputational risks to the Bank (with Bank investments inhydropower, for example, falling by about 90% over the course of the last decade). M o r e recently, the Board of the Bank has debated these questions at length (includmg in course of discussions on both the Water Strategy and the Infrastructure Action Plan). T h e Bank's borrowers have all said that the Bankis needed precisely where issues are complex and difficult. T h e broad conclusion is that the Bank must re-engage with such "high-risk/high-reward" investments when there is a sound case for doing this and w h e n the Bank has a strong comparative advantage. Inthe case of possible storage on the Indus, then, the Bank understands fully and exactly how controversial this issue is. But the Bank also believes that new storage is of overwhelming national importance to Pakistan, and that delay makes things m o r e dlfficult not easier. Accordingly, in discussions with the Government it has been agreed that Bank could be involved in financing a new dam on the Indus ifthe economic, technical, social and environmental, institutional, financial and commercial feasibility i s established. As Government understands, and as this Report has repeatedly stressed, building a dam i s just one part of a set of necessary activities, which include improvingthe transparency and efficiency of administration of the Water Accord, and making a set of institutional reforms and investments at provincial, canal command and farm levels to ensure better use of water. This Report has concentrated heavily on the challenges inthe IndusBasin, because they loom so large inPakistan and because they are so complex. This focus notwithstanding, the Bank`s investment program includes investments in infrastructure (mostly in NWFP and Balochistan) in small dams and minorirrigation schemes and ingroundwater management inthe barani areas outside the Indus Basin, Inthe urban water and sanitation sector, the Bank is likely to finance a project inPunjab, which would implement the recommendations of the ongoing studies, as well as rehabilitation and extension o f the 111 delivery systems. If it i s not possible to design a long-term concession contract for Lahore, then this loan might also fund investments which would be included in a lease contract. Pillar 2: Water ResourcesManagement A s stressed throughout this Report, the development and management of the water resources of Pakistan ingeneral and the Indus Basin is a huge challenge, requiring very high levels of administrative, engineering and scientific capability. There i s broad agreement that over recent decades the capacity for modern water resources management at boththe Federal and Provincial levels has not evolved rapidly enough to meet the emerging challenges. Accordingly, over the next CAS period the Bank will give high priority to supportingthe development of capacity at the provincial and federal levels. For surface water supplies a major emphasis will be buildingon Pakistan's platform of defined water entitlements, making the administration of these more transparent and accountable, from the inter-provincial to the user levels. For groundwater, the Bank will support the development of a government capacity for knowledge generation and management, and for policy and implementation of groundwater management. In both cases, there will b e an emphasis on incorporating environmental issues (including water quality, wetlands and environmental flows). An important element of Bank support will be trainingof a new generation of multi- disciplinary water resources specialists; and will include stimulation of centers of excellence for water resources sciences. Pillar 3: Service Delivery Infrastructure is, of course, not an end in itself, but a means to the end of providmgusers with better, more sustainable services. Inmany ways, State water institutions in Pakistan (at both the Federal and Provincial levels) have not made the transition from the era of development and construction to the era where management of resources and services is the primary challenge. T h e formal service delivery structures for both irrigation and water and sanitation services are exclusively large public enterprises, which operate with little accountability to their users, and with little transparency. Helping start the transition away from this old model to a modern service delivery architecture was the major objective of the (misnamed) National Drainage Program (which emphasized issues of water user associations and autonomous provincial irrigation agencies). While achievements under the NDP were (as described earlier) modest, many lessons were learned (about keeping projects focused on a few key objectives, and about the need for encouraging experimentation with different forms of sound institutional reform), the centrality of the objectives of the NDP remain valid. Accordingly, the Bank will remain heavily engaged inprovincial efforts to improve the quality, efficiency and accountability with which services are delivered. Specifically, for reasons described n this Report, the Bank will emphasize instruments as much as organizational forms. This will mean an emphasis on the development of frameworks which encourage the entry o f new players (including community organizations, and the small- and large-scale private sector), the use of contracts which specify the rights and obligations o f providers and users and benchmarking for all water services. T h e Bank will put a major emphasis on the nexus of entitlements, measurements and transparency. This will mean emphasizing measurement and reporting throughout, and the associatedinvestments in measurement devices, information technology and real-time reporting of what is actually delivered to whom. Pillar 4: On-farm Productivity 112 An important distinction betweenwater supply services and irrigationservices is that the former are an end in themselves, whereas the latter are simply one input into a multi-faceted effort to improve agricultural production. Many of the elements of this challenge (such as credt, marketingand agricultural research and extension services) are addressed as part of the Bank's overall ruraland agricultural program, and addressed in companionwork on those sectors. The Bank's water portfolio, however, has and will continue to go beyond delivery of water services, and involve investments in on- farm services (land leveling, watercourse lining, introduction of new technologies) which are essential for agricultural diversification and for improvingthe amount of crop, income and jobs produced per drop ofwater. Priorities and Sequencing Pakistan needs to move forward on all the four pillars simultaneously. Priorities and sequencing of investments (short-, medum-, and long-term) should seek to maximize benefits (measured in terms or public welfare) from policy reforms and investments, subject to various constraints (budget, water and other resources). Inthe short term (next 1to 2 years), the focus wouldneedto be on the lowhanging fruitunder each pillar, which can be harvested at relatively low cost and effort with high returns. These include improvingasset managementplanning; establishing O&M cost sharing principles; investing incritical rehabilitation; high pay-off investments that would improve water use efficiencies; reducing costs; decentralizing irrigation management; ensuring greater transparency inwater entitlements and allocations; puttingsystems and instruments inplace; and starting activities that have longer gestation periods, such as planning for major infrastructure human resource development and capacity building. Inthe medium term (next 3 to 5 years), the focus would needto be onitems that require further preparatory work and analysis of trade-offs (investments in new reservoirs, system expansion, groundwater management, research and capacity building). Finally, in the long term (6 to 10 years), Pakistan would need to focus on human resource development; reviving excellence inresearch and development; attaining financial sustainability for the sector and meeting the Millennium Goals for drinkingwater supply and sanitation. The investment projects: Over the course of the past year, the Government and the Bank have identified an indicative set of projects and programs which Pakistan i s likely to ask the Bank to finance. It i s agreed that the Bank would provide support through its various lendinginstruments, includingbudgetary support for policies and prior actions that address key issues (Development Policy Lending) as well as through specific investmentlending for infrastructure and institutionalreforms. There is agreement that there will be a major increase inBank lending for water-related activities, with the indicative overall figures showninFigure 84. This would mean that water-related lendng for Pakistan would increase about 10- fold from the 2000-2004period, and account for about $1billion inthe coming four years. The tentative lending program for the next four years would be as follows: Punjab Irrigation Policy Loan (US$400 million): This 3 to 4 year program would support the reform program inPunjab's irrigation sector, built on four pillars: asset development and management; water resource management (including investments in capacity building,knowledge generation and management, and pilot projects for groundwater management); reform of irrigation service delivery; and enhanced on-farm services to increase water productivity. The policy framework could include a medium-term (ten year) vision of how Punjab wishes to change i t s management of water resources and 113 irrigation services, includingbroad outcomes and targets and short-term targets of what can be achieved immediately in terms of the policy and institutional reforms. Punjab Municipal Services Improvement Loan (US$G5 million): This loani s designed to improve efficiency, coverage and quality of basic infrastructure/services through: developing an efficient mechanism for allocating public resources for infrastructure; buildingcapacity of government to manage local government performance improvement and of city districts/TMAs for improved urban management, governance and delivery of urban services and; providingperformance-related matching grants for infrastructure repair/renewal. It i s likely that water and sewerage services would be part of this. SindhWater/Irrigation Sector Improvement Program (US$140 Million): The projectwould improve water productivity through a reform agenda/investments leading to better management system that links canal command areas, the distributary and the watercourse level. Components include; capacity budding; civil works; agriculture and irrigation technology; and management and administration. NWFP Irrigation Sector Improvement Program (US$70 million): The project would improve - water productivity through a reform agenda/investments leading to better management system that links canal command areas, the distributary and the watercourse level. Components include; capacity building;civil works; agriculture and irrigationtechnology; and management and administration. Private Power (Bank Group) Investment (Total $200 million): Inview of the projected shortfall ingenerating capacity (fromabout 2007-08), there is an urgent needto elicit private sector resources for new/greenfield generation projects. The Bank, jointly with IFC and/or MIGA, would support Government efforts to attract private investments for such projects, including, potentially, both run- of-the-river and multipurpose hydropower projects. Punjab Water Infrastructure Investment (US$150 million): Several barrages inPunjab require rehabilitation and modernization to address problems arising from deficiencies which could lead to progressive structural failure and serious economic consequences. Besides physical rehabilitation, improvements and modernization, the project will also support institutional and organizational restructuring and capacity buildmg, and improved O&M regimes. Balochistan Small-scale Irrigation (US$40 million): The project would develop water resources through restoring and increasingwater storage; increasing productivityofwater throughmore efficient use, and developing capacity to formulate a water resources development plan using surface, groundwater and watershed management. Components include: water management (with a special emphasis on groundwater); infrastructure for restoring the hydrological balance of Band Khushdd Khan; constructionof delay action dams and selected small-scale irrigationprojects; on-farm water management; modernizationof irrigation systems and subsidies for efficient on-farm irrigation systems and modern irrigation technologies; and institutional development - among farmers, water users and different levels of government. Punjab Water Sector Irrigation Investment (US$lOO million): The project would support institutional reforms inwater resource management and delivery of irrigation services in specific canal commands of Punjab through an "incentive-based approach". Farmers and farmer organizations will play a major role and would compete for a set of "rewards" for meeting specified "entry conditions" The "entry conditions" would relate to items like formation of farmer organization, commitment to implementing water entitlements, provider/user contracts, water measurement and monitoring. The "rewards" would be investments in capacity building, canal modernization, measurement devices, and 114 on-farm services and possibly an optioninwhich the farmers could choose "professional management." A FederalWater ResourcesCapacity BuildingLoan (US $40 million): This project would develop the capacity of the Federal Government (including the proposed National Water Council and i t s Secretariat, IRSA, Planning Commissions Water Resources Section, and WAPDA-water wing) to become a more effective custodian of the nation's water resources. It will include major investments inknowledge management (including modernization of measuring equipment, decision support systems, and priority applied research); it will include training of a new generation of multi-disciplinary water resources specialists; and will include stimulation of centers of excellence for water resources sciences. O n e major issue that i s likely to emerge inthe next CAS period - but is not included in the current indicative list of projects -- i s possible Bank engagement in developing and co-financing major new Indus Basin storage and hydro, if and when the Government makes such a decision. Indiscussions with the Government it has been agreed that Bank could be involvedif the economic, technical, social and environmental, institutional, financial and commercial feasibility i s established and these investments are accompanied by institutional reforms and investments at provincial, canal command and farm levels to ensure better use of water. Analytic andAdvisory Services: A s described throughout this report, Pakistan i s going to have to invest heavily in the generation and management of knowledge. Pakistan looks to the Bank as a major partner for providmgglobal knowledge on modern water development and management. In the past the Bank has provided such services out of i t s own resources and by making use of a variety of global trust funds. Given the need to intensify such analyuc and advisory services, the Bank is developing, with partial support from the Government of the Netherlands, a multi-year program which would enable the provision of a greatly- increased set of advisory, knowledge and capacity buildingservices to both Federal and Provincial governments. Inthe important urban water and sanitation sector, the Bank Group has recently becomeinvolved in a n advisory capacity in Punjab. T h e IFC i s providingadvisory services for Lahore, while the Bank i s helping to investigate contractual incentives, financing mechanisms, pricing, regulatory mechanisms and budding capacity to improve urban water and sanitation services in other towns. T h e Bank has not been involved in rural water supply and sanitation for some time, and thus has limited knowledge of the sector. Given the importance of this sector for welfare of many poor people, the Bank needs to re-engage. A first step would b e a review of the status of the sector and key policies, with a particular focus on the project initiation and design mechanisms, the supply chain, cost recovery and operations and maintenance arrangements. A major challenge i s likely to b e the evolution of infrastructure-driven Public Health Engineering Departments. Evolving priorities and the indicative Bank water investment program T h e Country Assistance Strategy i s not a document which i s set in stone, but rather a living document (with an associated set of lending and non-lending activities) which evolves as conditions and knowledge change. T h e intensive work and discussions which were part of producing this document have, predictably and appropriately, changed perceptions bothin Pakistan and the Bank and brought to the fore several hitherto relatively-neglected priorities. Inparticular there are two areas that are likely to gain greater prominence than they have in the current indicative CAS plan. 115 T h e first of these i s urban water supply and sanitation. Pakistani s urbanizing and industrializing rapidly. While irrigation will remain by far the largest user of water, inthe future water development and management in Pakistan will no longer be synonymous with irrigation and drainage. There are several dimensions to this shift: more and more water will need to be reallocated from agricultural to urban uses; m u c h greater investments will need to be made in collecting and treating urban and industrial wastes; and major changes will need to be made in the way inwhich urban services are financed and delivered so that coverage and service quality are improved. To a substantial degree the long history of Bank engagement with water through the irrigation sector inPakistan has meant that the Bank's view, and the Bank`s water-related investments (as shown in Figure 84), have not adequately reflected the need for similarly-intense attention to municipal and industrial water and wastewater. T h e discussions stimulated by this Report concluded that this i s indeed an area where Pakistan's needs are large and growing, and where the Bank needs to become more engaged. T h e Bank will do this by initiating detailed analytic work on municipal and industrial water and wastewater. It is likely that a product of this work will be a program of Bank investments in municipal and industrial water and wastewater which is more substantial than that reflected in this Report. T h e second area of relative Bank neglect that emerged during discussions of this Report i s that of hydropower. Again, in part stimulated by the discussions around t h i s Report, the Bank will start a process of more specific assessment of the role of hydropower (micro and mini and large, both through run-of-the-river and storage projects) and the potential for greater Bank involvement. 116 ENDNOTES 1Akhter HameedKhan, "A Historyof the FoodProblem", TheAgriculturalDevelopmentCouncil, 1973. 2Akhter HameedKhan. A Historyof the FoodProblem. AgriculturalDevelopmentCouncil, NY 1973. 3DeepakLal,CulturalStabilitv and Economic Stacnation: India 1500BC- 1980AD 4Inthe evocativephrase ofArthur Maass and-RaymondL.Anderson And the Desert ShallRejoice:Conflict, Growth. and Justice inArid Environments,MIT Press, 1978 5ImranAli. The Puniabunder Imuerialism. 1885-1947, PrincetonUniversityPress, PrincetonNJ 1988. 6Paper 10 7Paper 10 8Paper 16 9Paper 16 10Paper 16 11ImranAli book 12NDGulhati.IndusWaters Treatv:An ExerciseinInternationalMediation, AlliedPublishers,Bombay1973. and RamaswamyIyer 13Gulhatiand Undula 14Gulhatiand Undula 15Shapland inUndulaAlam 16Gulhati l7 Khan Ayub in Gulhatipage 340. 18Paper 2 19Peter Hazell. and C.Ramasamy.1991.The GreenRevolutionReconsidered: The Impactof HighYielding Varieties inSouth India, Baltimore, Md. :TheJohnHopkinsUniversityPress. 20Paper 11 21RameshBhatia. EconomicBenefits and Synergy Effects of the BhakraMultipurposeDam, India: A case study, World Bank 2005 (draft). 22RameshBhatia. "Water and Growth", BackgroundPaper Report, 2005 23Peter Hazell. and C. Ramasamy.1991.The GreenRevolutionReconsidered:The Imuactof HighYieldiw Varieties in SouthIndia, Baltimore, Md. :TheJohnHopkinsUniversityPress. 24RameshBhatia. EconomicBenefits and Synergy Effects of the BhakraMultipurposeDam, India: A case study, World Bank 2005 (draft). 25Pelliquen,Shripad 26Paper 16 27Paper 16 28Paper 16 29 Ian Calder inthe Economistand elsewhere 30Paper 16 31Assumingan area of roughly 200 kmx 300 km, a change of depth of 15 meters and a storage coefficient of 0.3 32Tushaar Shah "Accountable institutions",BackgroundPaper Report, 2005. 33Reference to whoever hasJohnson 1989 as a reference.. Ithink smedemaor maybe pervaiz. . 34Reference is whoever hasJohnson 1989 as a reference! 35Paper 12 36Samereference 37Paper 12 38 ImranAli 39 ImranAli 40 Clifford GeertzAgricultural Involution 41 Paper 10 42 Paper 10 43 DouglassNorth 44 FaizulHasan Paper 6 117 45 Paper 5 46 EdLuce FT pieceon India 47 For example Brazil, as documentedinWorld BankWater ResourcesSector Strategy 2003. 48 Arif Hasan, inJohnBriscoe,"TWOdecades of changeina Bangladeshivillage", EPW, Vol XXXVI,No 40, October 26,2001. 49 Paper 2 50 World Bank. "India's Water Economy: Facinga TurbulentFuture", draft 2005 jl Barbara A. Miller,A. Whitlock and R.C.Hughes. "Flood Management- the TVA experience", TVA, Oak Ridge, 1998. 52 Ainun Nishat poweipointpresentationon FloodManagementinBangladesh,World Bank Water Week 2005 53 Paper 5 54 Paper 5 jj "Minding the wheat market", Editorial,DawnApril 14,2005. 56 ??Ahmad,-- check j7 Paper 2 j8 IWMIResearchreport 65 59 ShahidAhmad ShahidAhmad 61 ShahidAhmad 62 Gulhati1973 03 ShahidAhmad 64 PervaizAmir 65 Directly from ImranAli 66 Shahid-double check 67 ImranAli 68 Describedinmany of the backgroundpapers report 69 Indus River SystemAuthority. "Apportionment of Waters of IndusRiver Systembetween the Provinces of Pakistan:Agreement 1991 (A chronologicalexpose)", undated. 7o IndusRiver SystemAuthority. "Apportionment of Waters of IndusRiver Systembetweenthe Provinces of Pakistan:Agreement 1991(A chronologicalexpose)", undated. 71 Paper 1 72 PavanVarma, BeingIndian 73 Paper 12 74 Ahmad 75 Paper 12 76 Van Steenbergen 77 Paper 12 78 Kansas case -seeIndiapaper 79 Gohar, personalcommunicationinreviewof initial draft of this report. Paper 12 Kemperand Briscoe Mexico paper 82 India Water CAS 83 KemperMexico 84 Paper 12 85 Paper 12 86 Paper 12 This section draws heavily,and often directly, on the backgroundpaper byBhuttaand Smedema Paper 17 88 Paper 17 89Paper 12 90 Paper 12 91This sectiondraws heavily,and often directly, on the backgroundpaper by Vakar Zachariah 92Paper 3 93NDGulhati.IndusWatersTreatv:An ExerciseinInternationalMediation,AlliedPublishers,Bombay 1973. 94 IndusRiver SystemAuthority. "Apportionment of Waters of Indus River System betweenthe Provinces of Pakistan:Agreement 1991 (A chronologicalexpose)", undated. 95 Paper 9 118 96 Paper 3 9' ShahidaJamil, personalcommunicationas part of a review of an earlier draft of this Report. 98 Paper 5 99 Paper 2 100 Paper 3 101 Paper 12 102 Van Steenbergen, personalcommunicationas part of a review of an earlier draft of this Report. Paper 15 Paper 15 Paper 15 Paper 15 lf17Paper 15 lo* Paper 15 IO9 Estimatespreparedby Punjab IPD September 2005. "OAustralian experience shows that the average "renewals annuity", which includes the cost of both replacement and operations andmaintenance, "is about 3% to 4% for older, and 2% to 3% for newer assets". Personal communication,GolbournMurrayWater and the MurrayDarlingBasinCommission, 2005. Paper 15 112 Paper 1 113 Van Steenbergen,personalcommunicationina reviewof an earlier draft of this Report 114 An asset value of US360billion over 20 million hectares implies an asset per hectare servedof US$3,000. Nirmal Mohanty. "Moving to scale", Report,2005. 116 Pervaiz paper 11 117 Paper 2 11* WCD study 119 Paper4 Supplementingdata of Ledec 2003. 121 KhaledAhmed: "Sindh: The feel-badfactor", The FridavTimes, Lahore, May 2005 122 SardarTariqpaper 14 123 Pervaiz Amir paper 11 124 Paper2 12) WDR 1992 126 Paper 3 127 Paper 9 12* For example, ifrainfallis higher, streamflowmay extendover severalmonths inadditionto the relatively short duration flood flows, inwhich case proportionatelymorewater can be stored for a longer periodif the site has sufficient reservoir capacity. However, since the prevailingconditions over most of the year are arid to semi-arid,there must alwaysbe a concernfor the higher evapotranspirationlosses that stem from storage of water inan open reservoir. There appearsto belittle systematic study and analyticalresultsonwhich to baseestimates of the amountof recharge possibleor the extent of its influence at a particular site 130 DavidMosse The Rule ofWater: Statecraft.Ecolow and CollectiveAction in SouthIndia, Oxford University Press,2003. Tariq and Shams 132 KyuSik Lee. Costs of infrastructuredeficienciesinmanufacturineinIndonesia.Nigeria andThailand.Policy ResearchWorkingPaper WS1604, The World Bank, 1996 133 Omkar Goswami. "The urgent needfor infrastructure", The EconomicTimes, Delhi,April 25,2005. 134 NationalResearchCouncil. Privatizationof Water Services inthe UnitedStates: An Assessment of Issues and Experience,WashingtonDC 2002. 135World Bank. The Environmentand Develobment. The World DevelopmentReport, 1992. WashingtonDC. 13G ICID and others benchmarking 13'Asian Development Bank, Utilities Data Book, Manila 2003. 13*Public Affairs Centre. "Towards user report cards on irrigationservices: Learningfrom a pilot project in India". Bangalore,December 2002. 119 139Manuel Contijoch, personal communication 140IUlurram Shahid,paper 9 141Paper 9 142Saleth paper 143 StephenE.White and DavidE.ICromm. "Local groundwatermanagementeffectivenessinthe Coloradoand Kansas Ogallala Region", Natural Resourceslournal, Vol35, 1995. 144 ICarinICemper andJohn Briscoe. Mexico: PolicvODtions for Aauifer Stabilization,World Bank 1999. 145 Stephen E.White and DavidE.ICromm. "Local groundwatermanagementeffectiveness inthe Coloradoand I