44375 THE WORLD BANK PAKISTAN'S Water Economy Running Dry John Briscoe · Usman Qamar 2 PAKISTAN'S WATER ECONOMY PAKISTAN'S WATER ECONOMY RUNNING DRY John Briscoe Usman Qamar 1 THE WORLD BANK CURRENCY AND EQUIVALENTS Currency Unit = Pakistan Rupee US$ 1 = PKR 59.73 (8 November 2005) FISCAL YEAR 1 July­30 June ABBREVIATIONS AND ACRONYMS AJK Azad Jammu and Kashmir MTIP Medium Term Investment Plan CAS Country Assistance Strategy NDP National Drainage Program COD Chemical Oxygen Demand NWFP North West Frontier Province DOs Direct Outlets O&M Operation and Maintenance FGW Fresh Groundwater OED Operations Evaluation Department FOs Farmer Organizations OFWM On-Farm Water Management GDP Gross Domestic Product OPP Orangi Pilot Project GoP Government of Pakistan PARC Pakistan Agriculture Research HYV High Yielding Varieties Council IBDF Indus Basin Development Fund PCR Project Completion Report IBDP Indus Basin Development Project PER Public Expenditure Review IBIS Indus Basin Irrigation System PID Provincial Irrigation Department ICR Implementation Completion PIDA Punjab Irrigation and Drainage Report Authority IPCC Intergovernmental Panel on PIM Participatory Irrigation Climate Change Management IRIS Indus River System Authority PMF Probable Maximum Flood IWMI International Water Management PPAR Project Performance Audit Report Institute SCARP Salinity Control and Reclamation IWT Indus Waters Treaty Project KITE Korangi Industrial and Trading SITE Sindh Industrial Trading Estate Estate TDF Tarbela Development Fund KWSB Karachi Water and Sewerage TMA Tehsil Municipal Administration Board WAPDA Water and Power Development LBOD Left Bank Outfall Drain Authority LCC Lower Chenab Canal WSS Water Supply and Sanitation MAF Million Acre Feet WUA Water Users' Associations Preface PREFACE This Report is the product of eighteen months of (specifically from Ministry of Water and Power, intensive work by The World Bank staff and an Planning Commission, Economic Affairs eminent group of Pakistani and foreign Division, the provinces, and WAPDA). consultants. The Bank team consisted of John The Report was reviewed in detail by The Briscoe and Usman Qamar (World Bank Task World Bank management, and the revised version Team Leaders), Manuel Contijoch (World Bank); endorsed by it. A final round of consultations Don Blackmore (former Chief Executive, Murray- was held in September 2005 with the multi- Darling Commission), and Pervaiz Amir. The stakeholder group, including those who had Report benefited greatly from formal reviews and advised during the early stages of this work. The comments by external reviewers (David Seckler, release of the Report attracted extensive and high- Richard Reidinger, Chris Perry, Saeed Rana, level attention in Pakistan. Details can be found Shams-ul-Mulk, Frank van Steenbergen, Karin on www.worldbank/pakistan. Astrid Siegman, Asif Kazi, Khalid Mohtadullah, As usual, not all reviewers agreed with all that Bert Smedema, Shamshad Gohar, Shahida Jamil, is written in the Report (nor did the authors agree and M.N. Bhutta), and World Bank staff (Keith with all that was suggested by the reviewers!). Pitman, Masood Ahmad, Abid Hasan, Shahzad The product is entirely the responsibility of the Sharjeel, Dale Lautenbach, Vlado Vucetic, Adolfo authors and should not be attributed to the Brizzi, Xiaokai Li, and Alain Locussol). John reviewers. The World Bank would like to W. Wall, the Bank's Country Director for Pakistan, acknowledge Oxford University Press India's help provided unstinting support in developing and in editing the Report. disseminating the Report and ensuring that it The financial support provided by Royal resulted in practical actions by both the govern- Netherlands Government for the preparation and ment and The World Bank. printing of this Report through Bank-Netherlands The Report benefited enormously from the Water Partnership Program and Bank-Netherlands encouragement, guidance, and knowledge of Water Support Program for Pakistan is gratefully senior officials of the Government of Pakistan acknowledged. v Contents PAKISTAN'S WATER ECONOMY TABLE OF CONTENTS PREFACE v OVERVIEW AND EXECUTIVE SUMMARY xiii 1. THE PROCESS FOLLOWED 1 2. THE CHALLENGES AND ACHIEVEMENTS OF THE PAST 3 The Challenges 3 The Response--Public Infrastructure 8 The Response--Private Infrastructure 13 The Response--Institutions 17 3. THE CHALLENGES OF THE PRESENT AND 23 THE NECESSARY RESPONSES Adjusting to the Needs of a Changing Pakistan 23 Preparing for Climate Change 26 Adapting to Scarcity: An Imminent `Water Gap' 28 Getting more Product per Drop: The `Performance Gap' 29 Narrowing the `Trust Gap' 36 Maintaining the Resource Base--Groundwater 40 Maintaining the Resource Base--Salinity Management 47 Reversing Large Scale Environmental Degradation 52 Living with Floods 57 Renewing Existing Infrastructure: Addressing the `Maintenance Gap' 60 Investing in Priority New Infrastructure 63 4. WHAT NEEDS TO BE DONE 73 Principles for a Modern Institutional Structure 73 Instruments 74 Unbundling and Competition 75 Regulation 78 Water Entitlements 80 vii Contents Transparency 84 Knowledge 85 Financing 87 What this means for Federal and Provincial Governments 89 5. PRINCIPLED PRAGMATISM AND `RULES FOR REFORMERS' 92 Rule #1: Water is Different 92 Rule #2: Initiate Reform where there is a Powerful Need and 93 Demonstrated Demand for Change Rule #3: Involve those Affected, and Address their Concerns with 94 Understandable Information Rule #4: Reform is Dialectic, not Mechanical 95 Rule #5: It's Implementation, Stupid 96 Rule #6: Develop a Sequenced, Prioritized List of Reforms 96 Rule #7: Be Patient and Persistent 96 Rule #8: Pick the Low-hanging Fruit First--Nothing Succeeds like Success 96 Rule #9: Keep Your Eye on the Ball--Don't allow the Best to 97 become the Enemy of the Good Rule #10: There are no Silver Bullets 97 Rule #11: Don't throw the Baby out with the Bathwater 98 Rule #12: Reforms must Provide Returns for the Politicians 98 who are Willing to make Changes 6. THE EVOLVING ROLE OF THE WORLD BANK 100 What the Bank has Done in the Past 100 Water Resources and Irrigation 100 Hydropower 114 Water Supply and Sanitation 115 The Bank's New Water Strategy 118 An Indicative World Bank Water Investment Program for 2006­10 118 The Four Pillars 118 The Investment Projects 123 Analytic and Advisory Services 125 Evolving Priorities and the Indicative Bank Water Investment Program 125 BACKGROUND PAPERS IN THE ENCLOSED COMPACT DISC viii Figures, Tables, Boxes FIGURES Figure 1 Pakistan from space xiii Figure 2 The Indus Waters Treaty (1960) xiv Figure 3 Rates of return on investment on infrastructure and management of water resources xiv Figure 4 World's most water-stressed countries xv Figure 5 Declining per capita availability of water in Pakistan (cubic meters per capita per year) xv Figure 6 Annual canal diversions and `escapages to the sea' xvi Figure 7 The quality (Chemical Oxygen Demand) of urban streams xvi Figure 8 Predicted changes in Indus flows just above Tarbela xvii Figure 9 Storage per capita in different semi-arid countries xix Figure 10 Days of average flow which reservoirs in semi-arid countries can store in different basins xix Figure 11 Storage-additional yield curve for the Indus xix Figure 12 Sedimentation and storage capacity xx Figure 13 Wheat yields per unit of land and water xx Figure 14 Crop production and drought xxii Figure 15 Benefits from Tarbela (1975­98) xxii Figure 16 The effect of Bhakra Dam on different social groups xxiii Figure 17 The development of economically feasible hydropower potential in Pakistan in international context xxiii Figure 18 The `global poll' results for South Asia xxviii Figure 19 World Bank lending to Pakistan for water-related sectors--past and prospective xxviii Figure 1.1 The Water CAS Process 1 Figure 2.1 World's most water-stressed countries 3 Figure 2.2 Declining per capita availability of water in Pakistan (cubic meters per capita per year) 4 Figure 2.3 Indus Basin irrigation system 5 Figure 2.4 A typical canal command in the Indus system 6 Figure 2.5 Flood losses in Pakistan 6 Figure 2.6 The Indus water canal system at Partition in 1947 7 Figure 2.7 The change in groundwater levels 8 Figure 2.8 The Indus Waters Treaty (1960) 9 Figure 2.9 Benefits from Tarbela (1975­98) 10 Figure 2.10 Average number of employment for adult casual laborers each month 11 Figure 2.11 The effect of irrigation and green revolution on income 12 Figure 2.12 The effect of Bhakra Dam on different social groups 12 Figure 2.13 Income gains from directly and indirectly impacted sectors--Bhakra Dam 12 Figure 2.14 The rise in groundwater levels (1860­1960) 14 ix Figures, Tables, Boxes Figure 2.15 Irrigation expansion and groundwater levels 14 Figure 2.16 The growth in use of tubewells 16 Figure 2.17 Quantities and values of irrigation supplies in Punjab, by source 16 Figure 2.18 Rates of return on investment on infrastructure and management of water resources 20 Figure 3.1 Employment generation by crop 24 Figure 3.2 Population growth in Pakistan 24 Figure 3.3 Urban population growth in absolute numbers 25 Figure 3.4 Proportion of GDP in manufacturing 25 Figure 3.5 Prevalence of poverty in Pakistan 25 Figure 3.6 Accumulated effects of deglaciation on Indus river flows over ten decades 26 Figure 3.7 Change in South Asia summer rainfall predicted by nine General Circulation Climate Models 27 Figure 3.8 Predicted change in number of rainy days from the `decreased rainfall' IPCC model 27 Figure 3.9 Predicted change in rainfall intensity (in mm per day) from the `decreased rainfall' IPCC model 27 Figure 3.10 Annual canal diversions and `escapages to the sea' 29 Figure 3.11 Projected demand for water 30 Figure 3.12 Wheat yields per unit of land and water 30 Figure 3.13 Drought effect on yields 30 Figure 3.14 Crop production and drought 31 Figure 3.15 Crop yields for head- and tail-enders 31 Figure 3.16 Returns to irrigation location in a canal 32 Figure 3.17 Differences in wheat yields across distributaries 32 Figure 3.18 Yield and water productivity of wheat under different irrigation scheduling strategies 32 Figure 3.19 Production (kg/cubic meter of water) under different agricultural practices 34 Figure 3.20 Cubic meters of water to produce a ton of produce 36 Figure 3.21 Punjab canal entitlements from the 1991 Water Accord 38 Figure 3.22 Irrigation expansion and groundwater levels 40 Figure 3.23 The growing role of groundwater irrigation 41 Figure 3.24 Punjab water balance: normal year (MAF) 41 Figure 3.25 Punjab water balance: drought year (MAF) 42 Figure 3.26 Declining groundwater table in Punjab 42 Figure 3.27 Effect of the depth to the water on last of pumping 42 Figure 3.28 Depth of water table by province 43 Figure 3.29 Arsenic in groundwater in Punjab 45 Figure 3.30 Arsenic in groundwater in Sindh 46 Figure 3.31 Long-term trends in severe waterlogging 48 Figure 3.32 Salinity levels by province 49 Figure 3.33 Canal diversions and waterlogging in Sindh 49 x Figures, Tables, Boxes Figure 3.34 Approximate current salt balance in the Indus Basin (million tonnes a year) 50 Figure 3.35 Pakistan's wetland resources 53 Figure 3.36 The quality (Biochemical Oxygen Demand) of urban streams 56 Figure 3.37 The quality (Chemical Oxygen Demand) of urban streams 56 Figure 3.38 The `Kuznets curve' for environmental quality 57 Figure 3.39 Flood losses in Pakistan 58 Figure 3.40 The financing of water services in Pakistan 62 Figure 3.41 Depleting Pakistan's infrastructure stock 63 Figure 3.42 Storage per capita in different semi-arid countries 63 Figure 3.43 Days of average flow which reservoirs in semi-arid countries can store in different basins 64 Figure 3.44 Sedimentation and storage capacity 64 Figure 3.45 Storage-additional yield curve for the Indus 65 Figure 3.46 Benefits from Basha and Kalabagh 65 Figure 3.47 Development of economically-feasible hydropower potential in Pakistan in international context 65 Figure 3.48 Partial environmental and social indicators for some multipurpose dams 66 Figure 3.49 Who benefits from new Indus storage? 67 Figure 3.50 Urban water supply coverage 69 Figure 3.51 Rural water supply coverage 69 Figure 3.52 Improved water supply coverage 70 Figure 3.53 Improved sanitation coverage 70 Figure 4.1 The desired evolution of functions and actors 74 Figure 4.2 The basis for sound irrigation service provision 74 Figure 4.3 Typical public and private roles in the provision of infrastructure 76 Figure 4.4 Participants in modern regulation 79 Figure 4.5 Indicative, sequenced, and prioritized timetable for implementation of a formal water entitlement system 83 Figure 4.6 Systems models for planning and management 86 Figure 4.7 From low-level to high-level equilibrium in Conakry 88 Figure 6.1 World Bank lending to Pakistan for water-related sectors (1952­2004) 101 Figure 6.2 Household income of families at Ghazi Barotha Hydropower Project before and after resettlement 115 Figure 6.3 The `global poll' results for South Asia 119 Figure 6.4 World Bank lending to Pakistan for water-related sectors-- past and prospective 120 TABLES Table 1.1 List of background papers (available in the enclosed compact disc) 2 Table 3.1 Wastewater treatment in the cities of Pakistan 55 xi Figures, Tables, Boxes Table 6.1 Bank assistance (1960­70) 102 Table 6.2 Bank assistance (1971­80) 105 Table 6.3 Bank assistance (1981­90) 106 Table 6.4 Bank assistance (1991­2000) 112 BOXES Box 2.1 The Water Accord of 1991 22 Box 3.1 How other distortions affect the water economy--the case of sugarcane 35 Box 3.2 The Indus River System Authority (1992) 37 Box 3.3 Public information on Kalabagh Dam (an extract) 67 Box 4.1 Water entitlements are the principal mechanism for ensuring efficiency, sustainability, and voluntary reallocation of water 81 xii Overview and Executive Summary OVERVIEW AND EXECUTIVE SUMMARY Pakistan is one of the world's most arid countries, (in the western rivers) and the major irrigated area with an average rainfall of under 240 mm a year. in the east. Again Pakistan's water engineers were The population and the economy are heavily up to the task, building the world's largest earth- dependent on an annual influx into the Indus river fill dam, theTarbela on the Indus, and link canals, system (including the Indus, Jhelum, Chenab, which ran for hundreds of miles and carried flows Ravi, Beas, and Sutlej rivers) of about 180 billion ten times the flow of the river Thames (fig. 2). To cubic meters of water, that emanates from the a considerable degree (but not completely) the neighboring countries and is mostly derived from `heroic stage' of water engineering in Pakistan was snow-melt in the Himalayas.Throughout history, now over--the major challenges were now those people have adapted to the low and poorly of management. This is the case in all countries distributed rainfall by either living along river (fig. 3). But in the case of Pakistan, however, the banks or by careful husbanding and management `heroic' era had involved particularly blunt affronts of local water resources. One of the greatest of to the living organism that the river represents. human civilizations--the Indus Valley Civilization The natural flow regime was dramatically altered: (Harappa and Mohenjodaro)--flourished along rivers which had previously meandered over wide the banks of the Indus. plains were now confined within narrow channels; This precarious, low-level balance between man sediments which had previously nourished the and water was decisively shifted with the advent of large-scale irrigation technology in the Fig. 1: Pakistan from space nineteenth century. The Indus irrigation system became the largest contiguous irrigation system in the world. As shown in fig. 1, the desert literally bloomed, with irrigated agriculture providing the platform for the development of the modern economy of Pakistan.This hydraulic economy has faced and surmounted three massive challenges in the last half century. The first challenge arose because the lines of partition of the Indo-Pak subcontinent 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 andThe 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 percent of the flow of the whole Indus system. The second challenge was that there was now a Source: NASA, www.visibleearth.nasa.gov. mismatch between the location of Pakistan's water xiii Pakistan's Water Economy In the early 1960s it appeared that Pakistan was Fig. 2: The Indus Waters Treaty (1960) doomed, ironically, to a watery, salty grave. With equal doses of good thinking, good planning, and good luck, this problem is now not beaten (nor will it ever be) but controlled and managed, to a degree that no one foresaw fifty years ago. The good thinking was the application of water science and economics by many of Pakistan's best and brightest in conjunction with many of the best water minds in the world. The `solution' was not the obvious one of lining canals and putting less water on the land but of increasing the use of groundwater, thus both increasing evapotranspiration, drawing down the groundwater table and leaching much of the salts down and out of the root zone.The good thinking and good planning were classic `public goods'.The Source: The World Bank. `good luck' driver of this revolution was the modest but transforming tubewell and diesel engine, bought and managed by millions of farmers for Fig. 3: Rates of return on investment the simple reason that this decentralized `on- on infrastructure and management of water resources demand' source of water enabled them to greatly increase their crop yields and incomes. Returns on Investment So the modern history of water development Infrastructure and management in Pakistan is one in which the Investments Management glass can be seen as more than half full. But, as Investments this Report will show, the glass can also be viewed Type 1 Type 2 Type 3 as much more than half empty too. Once again, the survival of a modern and growing Pakistan is threatened by water. The facts are stark. Developing Developed Source: The World Bank, 2003. Sobering Fact #1: Water Stress. Pakistan is already one of the most water-stressed countries in the world (fig. 4), a situation which is going to degrade delta were trapped; and vast quantities of water into outright water scarcity (fig. 5) due to high were disgorged onto deserts, substantial parts of population growth. which were of oceanic origin and highly saline. It was this last reality which gave rise to the third Sobering Fact #2: There is no additional water to major challenge facing Pakistan shortly after be injected into the system. There is no feasible Independence. Hundreds of billions of cubic intervention which would enable Pakistan to meters of water were now stored in the naturally mobilize appreciably more water than it now uses. deep aquifers of Punjab alone. In many areas water Arguably, as shown graphically in fig. 6, overall tables had reached the level of the land, giving use for irrigation needs to decline so that there rise to the twin curse of waterlogging and salinity. are adequate flows into the degrading delta. xiv Overview and Executive Summary Fig. 4: World's most water-stressed countries Source: www.UNEP.org. While India (for example) might be able to Fig. 5: Declining per capita availability muddle through because it has many rivers and if of water in Pakistan (cubic meters per capita per year) something goes wrong in one place the effect is cushioned by opportunities in other places, this is 3500 a luxury which Pakistan does not have. If the water/ 3000 sediment/salt system of the Indus Basin goes badly 2500 wrong, then it may prove disastrous. Hence, there 2000 Water stress is no latitude for error. 1500 Water scarcity 1000 Sobering Fact #4: Large-scale degradation of the 500 resource base. There is abundant evidence of wide- scale degradation of the natural resource base on 0 1981 1998 2003 2010 2025 2035 2050 which the people of Pakistan depend. Salinity Source: Amir, 2005. remains a major problem, with some aspects partially controlled but others--including the fate Sobering Fact #3: A high risk water environment. of the approximately 15 million tons of salt which Pakistan's dependence on a single river system are accumulating in the Indus Basin every year, means it has little of the robustness that most and the ingress of saline water into over-pumped countries enjoy by virtue of having a multiplicity freshwateraquifers--remainonlydimlyunderstood of river basins and diversity of water resources. threats. And the delta, deprived of the water and xv Pakistan's Water Economy Fig. 6: Annual canal diversions and `escapages to the sea' 200 150 (MAF) 100 ws Flo 50 0 1975­76 1979­80 1983­84 1987­88 1991­92 1995­96 1999­2000 2003­04 Years Existing canal diversion Escapages to the Sea Source: The World Bank, 2003. silt which built and sustained it, is degrading Fig. 7: The quality (Chemical Oxygen rapidly, with large human and environmental Demand) of urban streams consequences. Simultaneously, there is large-scale uncontrolled pollution of surface water and 5000 groundwater from the increasing quantities of 4500 4000 pesticides and fertilizers used in agriculture and 3500 by rapidly growing cities and industries. Major 3000 COD cities have inadequate sewage treatment plants. mg/l2500 Many are either nonfunctional or working poorly. 2000 And there is only one industrial common effluent 1500 1000 treatment plant working in the whole of the 500 country. The result, as illustrated in fig. 7, is the National standard 0 presence of heavily degraded surface water around Urban streams in different cities all cities and towns. Source: Zakaria, 2005. Sobering Fact #5: Groundwater is now being overexploited in many areas, and its quality is now accounts for almost half of all irrigation deteriorating. Over the past forty years, the requirements. Now, although, there is clear exploitation of groundwater, mostly by private evidence that groundwater is being over-exploited, farmers, has brought enormous economic and yet tens of thousands of additional wells are being environmental benefits. A laissez-faire approach put into service every year. In the barani (rainfed) could be appropriate during this era. Groundwater areas of Balochistan, farmers are pumping from xvi Overview and Executive Summary depths of hundreds of meters and in the sweet Sobering Fact #7: Climate change.The Indus Basin water areas of the Indus Basin, depletion is now a depends heavily on the glaciers of the western fact in all canal commands. Furthermore, there Himalayas which act as a reservoir, capturing snow are serious and growing problems with and rain, holding the water and releasing it groundwater quality, a reality that is likely to get into the rivers which feed the plain. It is now clear worse because there are 20 million tonnes of salt that climate change is already affecting these accumulating in the system every year. Pakistan western glaciers in a dramatic fashion (far more has thus entered an era in which laissez-faire seriously, for example, than in the damper eastern becomes an enemy rather than a friend. There is Himalayas). While the science is still in its infancy, an urgent need to develop policies and approaches best estimates (fig. 8) are that there will be fifty for bringing water withdrawals into balance with years of glacial retreat, during which time river recharge, a difficult process which is going to flowswillincrease.This--especiallyincombination require action by government and by informed with the predicted flashier rainfall--is likely and organized users. Since much groundwater to exacerbate the already serious problems of recharge in the Indus Basin is from canals, this flooding and draining, especially in the lower requires an integrated approach to surface water and groundwater. There is little evidence that government (or donors, including The World Fig. 8: Predicted changes in Indus flows just above Tarbela Bank) have re-engineered their capacity and Indus at Bisham Qila funding to deal with this great challenge. And here 100 +0.03 degC/yr delay is fatal, because the longer it takes to develop 80 +0.06 degC/yr such actions, the greater would become the depth 60 +0.10 degC/yr +0.15 degC/yr of the groundwater table, and the higher would 40 be the costs of the `equilibrium' solution. 20 0 Decade in change the future ­200 2 4 6 8 10 Sobering Fact #6: Flooding and drainage problems % ­40 are going to get worse, especially in the lower Indus ­60 Basin.The natural state of heavily-silt-laden rivers ­80 (like the Indus) is to meander. This is because as ­100 silt-builds up in their beds, the rivers seek lower lands and change their courses.This creates havoc Source: Rees, 2005. with human settlements and so, throughout the world, such rivers have been trained and confined parts of the basin, in the next few decades. But by embankments within relatively narrow beds. then the glacial reservoirs will be empty, and there But as with everything watery, solving one problem are likely to be dramatic decreases in river flows-- gives rise to another. In this case, the bed keeps as shown in fig. 8, conceivably by a terrifying getting higher and higher, and soon the river is, as 30 percent to 40 percent in the Indus Basin in in the lower parts of Sindh, above the level of the one hundred years time. land. (To some degree the trapping of silt in upstream reservoirs alleviates this particular Sobering Fact #8: An inadequate knowledge environmental hazard.) Over time, the likelihood base. The Indus Basin is a single, massive, highly of embankment breaching increases, as do the complex interconnected ecosystem, upon which problems of drainage from flooded lands. When man has left a huge footprint. When a dam or this coincides with unfavorable tidal conditions, barrage is constructed the water and sediment the consequences can be disastrous. cycles are changed dramatically. When water is xvii Pakistan's Water Economy diverted onto deserts, the water and salt balances Sobering Fact #11: The system is not financially seek new equilibriums. In a system so massive sustainable.There are three basic questions relevant and complex, the generation and smart use of to the financing of infrastructure--who pays? how knowledge are the keys to adaptive management. much is paid? and how is the money used? In terms But there has been very little investment in of `who pays', there are many reasons why a Pakistan in building this knowledge base and the substantial portion of the costs of public works accompanying institutional and human systems. which provide individual services (such as The past twenty years should have been ones of irrigation water) should be paid for by those who massive investment in knowledge about this get the service. But in Pakistan users of canal water ecosystem. But the reverse has happened, and even pay a very small part of the bill, which is basically the once-renowned Pakistan water planning paid by the taxpayer. In terms of `how much is capability has fallen into disrepair. The country is paid', the answer is: much less than the presently literally flying blind into a very hazardous future. configured institutions require for rehabilitation and maintenance of the assets and for operations. Sobering Fact #9: Much of the water infrastructure The result is that most infrastructure is in poor is in poor repair. Pakistan is extraordinarily repair. In terms of `how is the money used' the dependent on its water infrastructure, and it has answer is that first call is for payment of heavily invested in it massively. Due to a combination of overstaffed bureaucracies, whose productivity is age and what has aptly been called the `Build/ low and whose appetite leaves insufficient funds Neglect/Rebuild' philosophy of public works, for system maintenance and operation.This reality much of the infrastructure is crumbling. This is gives rise to a vicious circle, in which users are not true even for some of the major barrages, which willing to pay for poor and unaccountable services, serve millions of hectares and where failure would which means that insufficient funds are available be catastrophic.There is no modern Asset Manage- for operations and maintenance, which results in ment Plan for any of the major infrastructure. the decline of service quality and whereupon users are even less willing to pay, and so on. Sobering Fact #10: The quality of project implementation is poor. Pakistan is justifiably Sobering Fact #12: Pakistan has to invest, and invest proud of its outstanding achievement in soon, in costly and contentious new large dams. When building the Indus Basin Replacement Works. In river flow is variable, then storage is required so the intervening years, the quality of project that the supply of water can more closely match implementation has declined substantially. water demands. Relative to other arid countries, Today, implementation of water sector projects Pakistan has very little water storage capacity. in Pakistan is characterized by inefficiencies, Figure 9 shows that whereas the United States and completion delays, and time and cost overruns. Australia have over 5000 cubic meters of storage Factors that affect implementation include: weak capacity per inhabitant, and China has 2200 cubic implementation planning and management, meters, Pakistan has only 150 cubic meters of litigation related to land acquisition, non- storage capacity per capita. And fig. 10 shows the compliance with agreed resettlement and storage capacity available in some of the major rehabilitation programs, lack of attention to arid basins in the world.The dams of the Colorado environmental issues, delays in procurement, and Murray-Darling rivers can hold 900 days of delays in preparation of accounts and carrying out river runoff. South Africa can store 500 days in its audits, and lack of preparation for transition from Orange river, and India between 120 and 220 days construction to operation. in its major peninsular rivers. By contrast, Pakistan xviii Overview and Executive Summary Sobering Fact #13: Poor governance and low trust. Fig. 9: Storage per capita in different semi-arid countries Conceptually the simplest task for water managers in the Indus Basin is to move water in a predictable, cubic meters timely manner to those who need it and have a per capita 6000 right to it. Pakistan has among the best water 5000 engineers in the world. And yet this task is done 4000 3000 less and less satisfactorily, less in the light of day 2000 and more behind an opaque curtain in which, as 1000 0 always, monopoly + discretion ­ accountability = corruption. The result is inequitable distribution alia USA China Spain India of water, poor technical performance, and a ustrA Morocco akistanP Ethiopia pervasive environment of mistrust and conflict Source: The World Bank analysis of ICOLD from the provincial level to the water course. The data. water bureaucracy has yet to make the vital mental transition (depicted in fig. 3) from builder Fig. 10: Days of average flow which to manager. reservoirs in semi-arid countries can store in different basins Sobering Fact #14: Water productivity is low. Large parts of Pakistan have good soils, abundant 1000 sunshine,andexcellentfarmers. And yet crop yields, 800 both per hectare and per cubic meter of water, are much lower than international benchmarks, and 600 much lower even than in neighboring areas of 400 India (fig. 13). The quality of water service plays an important role in this: yields from reliable, self- 200 provided groundwater are twice those of unreliable 0 y and inflexible canal supplies. ado ling er ange ishna In water matters, the cup is always half empty, mada Indus Or Kr Ganga Color y-Dara but it is also half, or, in the case of Pakistan, at least Nar Cauv a quarter, full. In confronting these awesome Murr challenges, Pakistanhasconsiderablestrengths, too. Source: The World Bank analysis of ICOLD and GDRC data. Fig. 11: Storage-additional yield curve for the Indus can barely store 30 days of water in the Indus Basin. Additional yield in MAF/year As shown in fig. 11, each million acre feet 25 (MAF) of storage capacity lost means one MAF/ 20 year less water that can be supplied with a given 15 Current level of reliability. And, as shown in fig. 12, there 10 storage is an urgent need for storage just to replace the 5 level capacity that has (as predicted) been lost to 0 0 10 20 30 40 sedimentation. Given the high silt loads from the Storage MAF young Himalayas, Pakistan's two large reservoirs are (as predicted at design) silting relatively rapidly. Source: Lieftinck, 1968. xix Pakistan's Water Economy Fig. 12: Sedimentation and storage capacity 25 6 MAF from Kalabagh or 15.6 MAF Basha from Tarbela, Mangla and 20 2.9 MAF Chasma from Mangla raising 18 MAF 15 MAF in age 10.4 MAF Stor 10 12.8 MAF of current capacity 5 0 1975 1985 1995 2005 2015 2025 Source: The World Bank, 2003. Fig. 13: Wheat yields per unit of land and water 8 1.2 Tons/ha yield Kg/m3 7 1 6 0.8 5 meter 4 0.5 ons/haT 3 Kg/cubic 0.4 2 0.2 1 0 0 Imperial Valley, USA Bhakra, India Punjab, Pakistan Source: Ahmad, 2005. xx Overview and Executive Summary Hopeful Fact #1: A well-established tradition and pumping from public wells in Sindh. At present, system of water entitlements. Pakistan has an the political pressure for `free power' has been unusually long and well-established tradition of muted because the water table is shallow and most water entitlements. At the international level, pumps are diesel-powered. The federal and Pakistan's rights to water from the Indus Basin provincial governments should be applauded for system are unambiguously defined in the Indus their stance to date, and should continue to Waters Treaty. The 1991 Water Accord is a major strongly resist pressures to move towards free achievement, which establishes clear entitlements power for irrigation in the future. for each province to surface water. Implicit in the Water Accord, too, is a set of water entitlements Hopeful Fact #3: There is much scope for increasing at the canal command level (established on the water productivity. The flip side of current low basis of historic use). In large areas of the system, water productivity is that Pakistan can get much these entitlements serve as the basis for allocation more product--crop, jobs, and income--per drop of water among canal commands. There are also of water. As shown in fig. 14, reduced water well-established rules for further distributing water supplies in the irrigated areas have little to the distributary and outlet levels. Below the detrimental impact on production (at least in the outlets, the warabandi is a proxy (appropriate in short run), in part because groundwater is available its era) to a water right, in which a farmer has a to make up the difference in the short run, in part right to time, a surrogate for water. The existence because waterlogging and salinity are reduced, and of such well-established entitlements means that in part because limited water supplies are used Pakistan can now focus on: putting in place a more carefully when there are shortages. But the similar system for the surface systems that do not bottom line is that this shows that it is quite currently have such established entitlements; possible to substantially increase production extending the entitlement system to cover any new with existing supplies of water. A second, very water that might be mobilized; formalizing important, factor is the emergence of a new class entitlements for environmental flows (including of progressive farmers, who are shifting to high- to the delta); and moving towards a similar value crops (which produce far more income definition of entitlements for groundwater, and, and jobs per unit of water), introducing new above all, administering this system in a more crops and agricultural technologies, and putting transparent, participatory manner. unprecedented pressures on the irrigation departments to become more accountable and Hopeful Fact #2: Pakistan has largely avoided the efficient. trap of subsidizing electricity for groundwater pumping. One of the obvious ways governments Hopeful Fact #4: High returns from previous major around the world address the problem of water infrastructure. Pakistan benefited immensely agricultural distress is to subsidize inputs. In many from the major water infrastructure built in the countries, electricity for irrigation pumping is Indus Basin. As shown in fig. 15, the benefits from heavily subsidized. This policy greatly exacerbates Tarbela substantially exceeded those which were the underlying problem, which is making sure that predicted at the time of construction. Through groundwater pumping does not exceed recharge, forward and backward linkages in the economy, and that the water table is not too deep. To date, the total benefits were probably about twice those this policy has been followed only in Balochistan, of the direct power and irrigation benefits. It is with disastrous effects both on the water table and also certain that, as has been shown for the Bhakra on the financial state of the utility, and for project in Indian Punjab (fig. 15), it was the poor xxi Pakistan's Water Economy Fig. 14: Crop production and drought 115 70,000 110 105 Canal Diversion 100 60,000 95 90 85 50,000 Sugarcane 80 75 Onset 70 40,000 65 eetF ons)T 60 Drought 30,000 55 Acre Total Food Grain 50 (000 45 20,000 Million 40 Wheat 35 30 10,000 25 Rice 20 0 15 Cotton 10 5 ­10,000 0 1990­91 1991­92 1992­93 1993­94 1994­95 1995­96 1996­97 1997­98 1998­99 2000­01 2001­02 2002­03 1999­2000 Years Source: The World Bank, 2003. who, through the operation of labor markets, were ofagriculture, in fact it is the power benefits which probably the greatest beneficiaries of these are often greatest (fig. 15). And here, too, as shown investments. It is important to note that although in fig. 17, Pakistan lags behind its neighbors--86 much of the discussion of such projects is in terms percent of the 50,000 MW of Pakistan's economically viable hydropower potential has yet to be developed. Fig. 15: Benefits from Tarbela (1975­98) Hopeful Fact #5: Pakistan has overcome major water challenges in the past. Pakistan has a Power Irrigation remarkable history of successfully confronting 3500 3000 major water challenges. It has enormous human US$ 2500 capacity to confront this next round of challenges, 2000 which can be pooled in four major categories. 1998 1500 The sustainable 1000 management of a Challenge 1 is to develop a Million 500 world-class knowledge-based 0 huge, inter-linked, Predicted Actual and very complex capacity for adaptive resource management and Source: WCD, 2000. natural resource service delivery. base is probably the xxii Overview and Executive Summary the behavior of the glaciers as climate change Fig. 16: The effect of Bhakra Dam on different social groups proceeds; the fate of the large amounts of salt being mobilized; the qualitative and quantitative % change of income of different types of households with and without Bhakra Dam dimensions of the aquifer systems in the Indus 80 Basin and in the other parts of the country; the evolution and behavior of the ecosystems of the 60 delta; and the impact of changed sediment loads 40 on river morphology. Second are the engineering sciences. The plumbing for the world's largest 20 contiguous irrigation system has underpinned 0 r much of Pakistan's development. Pakistan has long Ag been a world leader in hydraulic engineering, and wners Laborr Others Urban Non it is going to have to renew this capacity so that a Ag al al Lando Rur new generation can maintain and modernize the Rur water transmission and distribution systems. The Source: Bhatia, 2005. third leg of the intellectual stool are the social sciences. Because at the end of the day government single most challenging long-term task for Pakistan is going to have to design institutions and and requires the development of world-class instruments, which will ensure that the actions of capacity in three related areas. First are the natural the millions of people who live in and off of the sciences. Adaptive management of the Indus Basin natural and engineered water systems are in system requires high levels of knowledge and consonance with the require-ments of those understanding of a series of linked basic natural systems. Pakistan, accordingly, needs to build a processes, the more important of which include: strong, natural, engineering and social scientific Fig. 17: The development of economically feasible hydropower potential in Pakistan in international context 100% 90% Japan 80% Europe North 70% America 60% 50% 40% South 30% India America China 20% 10% Pakistan Africa 0% 0 1000 2000 3000 4000 Source: The World Bank, 2003. xxiii Pakistan's Water Economy cadre capable of working with all users in defining There is no systematic Asset Management Plan the problem, developing solutions, monitoring, at either the federal or provincial levels which assessing, and adjusting. This is a capacity which describes the condition of the assets, the requires a wide range of disciplines--those requirements for replacement, rehabilitation (or necessary for understanding climate, river retirement) and operations and maintenance and geomorphology, hydraulic structures, surface water the associated costs, and the proposals for and groundwater hydrology, limnology, water financing of these costs. Development of such chemistry, sediment management, hydraulics, plans is a high priority. soil sciences, terrestrial and coastal ecosystems, Second is the urgent need for construction of agronomy, plant physiology, industrial major new storage on the Indus.There is probably organization, conflict management, politics, no more contentious an issue in Pakistan today. economics, and financing. In the past Pakistan has In part, this is for legitimate and necessary reasons relied heavily on outside knowledge, especially in (such as the resettlement of substantial numbers sciences. Now Pakistan needs to develop its of people), partially for legitimate but resolvable indigenous capacity and make a major push to reasons (lack of transparency about how this would establish and nurture a new set of institutions that affect the actual allocation of waters among the will provide the scientific, technical, and policy provinces and to the delta), and partially the support for the management of increasingly scarce discussion of dams has become a vehicle for a host water. Experience in other countries shows that if of remotely or unrelated political grievances. A this is not done there will be serious economic, curiosity is that the most vehement opposition to social, and environmental consequences. new dams comes from Sindh, when in fact it is The water economy of Pakistan depends the downstream riparian who is typically the fundamentally on a gigantic and complex greatest beneficiary of the enhanced regulation hydraulic infrastructure system. There are now a which comes with new storage. (For this reason, set of related challenges which have to be in other countries lower riparians will often pay addressed--how to maintain what has been built, for upstream storage.) The requirements for what major new system-wide infrastructure needs government are obvious--there needs to be a to be built, what infrastructure needs to be built totally transparent and verifiable implementation for populations who have not been served and of the 1991 Water Accord, and reasonable for environmental quantities of water need to be guaranteed and protection, and how delivered to the delta (as was discussed as part of Challenge 2 is a financially feasible approach to to build institutions the IndusTreaty negotiations). Equally important maintaining and modernizing that will manage the is a well-designed plan for paying for the costs of existing infrastructure and resource effectively this storage, with the very large hydropower building needed new water in the looming era potential offering possibilities for raising infrastructure. of scarcity. First is substantial amounts of private financing. rehabilitation and Third, there is requirement for large invest- maintenance. Many elements of the vast hydraulic ments in meeting the needs of those who do not system are now reaching the end of their design have water and sanitation services in cities, towns, lives, and have to be rebuilt.There is an enormous and villages. backlog of deferred maintenance. Most recent Fourth, Pakistan has been accumulating an irrigation and water supply `investments' from `environmental debt' by not investing in municipal donors, including the World Bank, have been for and industrial wastewater. It is clear that this has to the rehabilitation of poorly maintained systems. change, andthatitisgoingtotake huge investment. xxiv Overview and Executive Summary Fifth and finally, Pakistan has to walk on two millions of farmers, by towns and villages and legs--investing simultaneously in infrastructure, industries that have pulled the economy through. and in developing the institutions required for It is clear that this era of `productive anarchy' is the sustainable management of increasingly now coming to an end, since groundwater is now scarce water. being over-tapped in many areas (including both The resource requirements for all of these the Indus Basin and Balochistan and other non- priorities are very large. Government faces three Indus areas). This poses two major challenges to essential tasks. First, to set priorities for the short the state. First, surface water supply systems are and medium term. Second, to define the principles going to resume their previous high importance, which will govern what proportions of the initial and need to be managed much more accountably and recurrent costs are paid by taxpayers and by and effectively. Second, groundwater will have to users. Third, government has to ensure that the be managed--for related reasons of quantity and limited financial resources are efficiently used.This quality--much more aggressively than has been is obviously not happening in the `business-as- the case in the past. usual' model at present. It is going to mean It is also obvious that the needs for water are exploring a whole set of mechanisms for changing substantially, as a result of agricultural introducing competition, for paying for output diversification, urbanization, industrialization, not inputs, and for increasing accountability. recognition of environmental needs, climate The agrarian economy of Pakistan accounts for change, and the evolution of the natural resource about 25 percent of GDP and employs about half base. Since there will be, if anything, less rather of the labor force. While the transition to an urban than more water, it means that the new water and industrial economy can and must continue, economy is going to have to be one which is much agriculture will remain central for the well-being more flexible, in which a key will be the voluntary of large numbers of people. Better water reallocation of water from those who need it less management is a key constraint to improving to those who need it more. agricultural productivity and generating jobs. It is going to require a very different type of Over the past several decades, farmers have largely state machinery at both the federal and provincial taken the problem into their own hands, and levels to meet these challenges. In constructing this `solved it' by sinking hundreds of thousands of `new water state', the focus must be primarily on tubewells which provide just-in-time water for instruments which govern the relationships of their crops. To a substantial degree the main different users with water, and with each other. function of the The logical organizational architecture then is that Challenge 3 is to put in place canal systems has which is required to manage the instruments and a modern institutional been to recharge order the relationships between the parties. Some framework, with the key task the groundwater-- of the key elements of the `new water state' will be: being the development and about 80 percent of application of instruments Introducing accountability, efficiency, which will motivate sustain- g r o u n d w a t e r l able, flexible, and productive abstractions in transparency, and competition into the use of water. Punjab come from surface water supply business. This will recharge from mean unbundling the business into bulk canals. The survival of the water economy over transmission and distribution enterprises, the last several decades has largely been despite with relations among the parts governed by rather than because of the state--it has been the contracts which specify the rights and tapping of the unmanaged groundwater by responsibilities of both parties. While it will xxv Pakistan's Water Economy not be easy to enforce such contracts, environmental flows into the delta (a process experience shows that this can stimulate that is underway) and then implementation improved accountability and service quality. of the Accord in a transparent manner, This will mean moving away from a audited by an auditor who is, and is perceived monolithic service model below the to be, neutral. The same system then needs distributaries (with Farmers' Associations to be `drilled down' to the canal commands competing `for the market' with the within the provinces (where entitlements are irrigation department) and into the canal mostly well established but not transparently commands (where a variety of forms of administered). And so on down all the way public-private partnerships can provide an to the users' associations and eventually to alternative to the irrigation department). In the farmers.There is broad agreement among many cases, professionals from the irrigation most water professionals in Pakistan that this departments would be encouraged to form improved administration is quite feasible and private businesses for the provision of such that it would increase efficiency, allow services, thus ensuring that their skills are flexibility in adapting to scarcity, reduce not lost, and that they do not see the changes conflict, and install trust in the system. as purely a loss of security.The bulk business l A similar, and even more difficult, process is (operation of dams and barrages) would essential for the management of groundwater probably remain in state hands, but with quantity and quality, since groundwater many major functions (such as operation of reservoirs are already being mined in the power plants) concessioned out to private barani and sweet water areas. Again, this operators. A similar institutional architecture will take a well thought-out, pragmatic, would pertain for the drainage infrastructure. patient, and persistent strategy. The central l In such a system (which would take place as elements will be heavy involvement of users, a sequenced and prioritized process over substantial investments in modern water and many years) the government would, agricultural technology, and the state playing gradually, play a very different role. It would a vital role as developer of the enabling corporatize the state-owned operating units legislation, regulator, and provider of and develop new capacities to do the knowledge and decision support systems. economic regulation. The government would also be far more active in groundwater In the eyes of many the idea of such a modern, management, where it has been largely accountable `Pakistan water system' is panglossian, absent. This would mean developing a new given the deteriorating performance in recent legal and regulatory framework for co- decades and the broader challenges of governance. managing groundwater with user The glass is, of course, always half empty. But it is associations. It would mean developing the half full too. Pakistan has a stronger base for doing sophisticated natural resource management this than most other developing countries, and capacity required for managing water and there are some important signs that the need for land systems. change is being l A centerpiece of these systems, both surface understood, there Challenge 4 is to trace a water and groundwater, would be improving are political leaders principled and pragmatic the administration of a well-established who are starting to path for implementing this system of water entitlements. What is now grapple with these reform agenda over the coming decades. needed is finalization of the agreement on realities, and the xxvi Overview and Executive Summary government and private sector leaders are taking l Recognize that water, unlike electricity or the important first steps down this long and telecommunications, is `far from a simple winding road. commodity'. Pakistan is fortunate, too, in that it is not the first country in the world to face this (daunting) An important set of challenges. The experiences of other objective of this How the World Bank might be a more effective develop- countries suggest that there are a set of `rules for Report is to help ment partner. reformers' in undertaking such a transition.These define the water rules include: elements of the framework, known as the Country Assistance l Initiate reform where there is a powerful need Strategy (CAS) which will govern the relationship and demonstrated demand for change. between The World Bank and Pakistan for the l Involve those affected, and address their period 2006­10. This is an iterative process, in concerns with effective and understandable which there have already been many discussions information. involving the federal and provincial governments, l If everything is a priority, nothing is a the Bank's country management and the Bank's priority--hence develop a prioritized, Pakistan water team. While the final agreement sequenced list of reforms. on water will only be decided jointly with the other l Pick the low-hanging fruit first--nothing elements of the CAS, the contours of this succeeds like success. agreement are already broadly clear. l Keep your eye on the ball--don't let the best The federal and provincial governments and the become the enemy of the good. management of The World Bank all agree that l Be aware that there are no silver bullets. water management is one of the central l Don't throw the baby out with the bathwater. development challenges facing Pakistan, and that l Treat reform as a dialectic, not mechanical, it is an area where the Bank has a long history and process. a strong comparative advantage. This is in broad l Understand that all water is local and each agreement with the findings of a major poll of a place is different--one size will not fit all. wide variety of South Asian stakeholders (fig. 18), l Be patient, persistent, and pragmatic. which concluded that infrastructure, education, l Ensure that reforms provide returns to and governance were the three areas which were politicians who are willing to make changes. both of high national importance and where the Bank was perceived to have a comparative Water is far from a simple commodity advantage. Water's a sociological oddity There is, therefore, a general agreement that Water's pasture for science to forage in there will be a major increase in Bank lending for Water's a mark of our dubious origin water-related activities, with the indicative overall Water's a link with a distant futurity figures shown in fig. 19. Water's a symbol of ritual purity Water is politics, water's religion This would mean that water-related lending for Water is just about anyone's pigeon Pakistan would increase about tenfold from the Water is frightening, water's endearing 2000­04 period, and account for about $1 billion Water's a lot more than mere engineering in the coming four years. World Bank support Water is tragical, water is comical would be based on `principled pragmatism', Water is far from the Pure Economical recognizing that reforms and investments must --Kenneth Boulding proceed in parallel and the best should not be xxvii Pakistan's Water Economy Fig. 18: The `global poll' results for South Asia 20 Education Governance 15 ity ior Infrastructure Pr 10 elopmentv De Social 5 Civil Soc Health ronment 0 0 5 10 15 20 Priority that should be given by the Bank Source: The World Bank, 2002. Fig. 19: World Bank lending to Pakistan for water-related sectors--past and prospective Major Infrastructure Floods Rural WS&S % of all Bank lending Irrigation and Drainage Urban WS&S Hydro 600 500 50% ear US$/y 400 40% lending 300 30% Bank 2004­05 of all 200 20% of % Millions 100 10% 0 1952­60 1961­70 1971­80 1981­90 1991­2000 2000­04 2006­10 Source: The World Bank, 2004. xxviii Overview and Executive Summary allowed to become the enemy of the good. Broadly canal command, and farm levels to ensure better speaking, Bank assistance would support four use of water. pillars of the water sector, as described below: Pillar 2: Water Resources Pillar 1: Asset Development Management and Management The Bank expects to support development of Pakistan has a large endowment (with an estimated capacity at the provincial and federal levels for replacement value of US$60 to 70 billion) of improving water and associated natural resource water resources infrastructure, most owned and management. For surface water supplies, a major managed by the provinces, and much now quite emphasis will be building on Pakistan's platform old. Bank-funded projects will make major of defined water entitlements, making the investments in rehabilitation of some critical assets administration of these more transparent and (including barrages) and will help put in place accountable, from the inter-provincial to the user Asset Management Plans which will set priorities levels. For groundwater, the Bank will support the for asset rehabilitation and maintenance, make development of the government's capacity for explicit the requirements for public and user knowledge generation, policy generation, and financing, and develop efficient institutional management. A major emphasis will need to be arrangements for rehabilitating and maintaining on developing a better understanding of salinity this infrastructure. The Bank will also continue and formulation of salt management strategies, its support for: developing and implementing a groundwater recharge, and flood flows. For both drainage and salt management strategy, other surface water and groundwater there will be an investments--including small dams, minor emphasis on incorporating environmental issues irrigation, and groundwater management--in (including water quality, wetlands, and barani areas outside the Indus Basin, as well as for environmental flows). An important element of improving livelihoods and safety in coastal areas. Bank support will be training of a new generation One major issue that is likely to emerge in of multidisciplinary water resources specialists, and the 2006­10 CAS period is possible Bank support for multidisciplinary centers of excellence engagement in developing and co-financing major for water resources, and natural and social sciences. new Indus Basin storage and hydro, if and when the government makes such a decision. The Pillar 3: Service Delivery government is actively addressing some of the major issues which have been raised about a new The Bank expects to be heavily engaged in dam on the Indus, including transparent provincial- and city-level efforts to improve the implementation of the 1991 Water Accord and quality, efficiency, and accountability with which environmental flows into the delta. In discussions water supply, sanitation, and irrigation services are with the government it has been agreed that the delivered. The Bank will emphasize the Bank could be involved, with the usual provisions development of frameworks which encourage the that any such project met the Bank's normal entry of new players (including community technical, economic, social, and environmental organizations, and the small- and large-scale standards, and that these investments were part of private sector), the use of contracts which specify an overall program which included institutional the rights and obligations of providers and users, reforms and investments at federal, provincial, and benchmarking for all water services.The Bank xxix Pakistan's Water Economy will emphasize the modernization of budgetary support for policies and prior actions infrastructure--including canal re-modeling and that address key issues (Development Policy the use of measuring devices, which are integral Lending) as well as through specific investment for moving to a more flexible, accountable, lending for infrastructure and institutional reforms. transparent, and monitorable service delivery Finally, given the major scientific, policy, and paradigm. implementation challenges ahead, the Bank, with partial support from the Government of the Pillar 4: On-farm Productivity Netherlands, will mount a major program for providing analytic and technical support to the The Bank will continue to invest in the on-farm federal and provincial governments. services (land leveling, watercourse lining, and Paraphrasing Akhter Hameed Khan, the great introduction of new technologies through private- Pakistani reformer, it might be said that the Bank's public partnerships) which are essential for involvement in water in Pakistan has been one agricultural diversification and for improving the in which the Bank `has chased the rainbow of amount of crop, income, and jobs produced per well-functioning institutions and dreaded the drop of water. nightmare of further institutional decay... and The Bank anticipates providing such support that only the boldest among us can say that we through its various lending instruments, including may not be similarly engaged tomorrow'.1 1 Akhter Hameed Khan, `A History of the Food Problem', The Agricultural Development Council, NY, 1973. xxx The Process Followed CHAPTER 1 THE PROCESS FOLLOWED In 2003, the Board of Executive Directors the Bank would do a Water CAS for Pakistan, (representing the 180 countries who own The following the logic shown in fig. 1.1. Generous World Bank) approved a new Water Resources support was provided by the Bank-Netherlands Sector Strategy.Two important conclusions of the Water Partnership Program. Strategy were that the general principles adopted The Pakistan Water CAS process involved needed to be adapted to the widely varying several related elements: conditions pertaining in the Bank's borrowing countries, and that there needed to be more l extensive discussions with senior officials of systematic and integrated incorporation of water- the provincial and federal governments, related issues into Country Assistance Strategies including a major formal consultation on (the `contract' between the government and the institutional issues Bank which defines an indicative four-year package l a consultation with about 50 stakeholders of investment and advisory services to be provided from the private sector, academia, NGOs, by The World Bank). Water management is a professional associations, and the govern- major issue for Pakistan, and an area where the ment Bank has a long history of engagement and a l commissioning of background papers (listed perceived comparative advantage. As part of the in table 1.1, and available in the enclosed process of preparing a Pakistan Country Assistance compact disk) by prominent Pakistani prac- Strategy for the period 2006­10 it was agreed that titioners and policy analysts. Fig. 1.1: The Water CAS Process Government/ Bank Country Assistance Strategy Country policies and Government programs for water of Pakistan/ development World Bank and `Water CAS' management The Bank's 2003 Water Strategy 1 Pakistan's Water Economy Table 1.1: List of background papers (available in the enclosed compact disc) Background Paper Author(s) Designation 1. Water, growth, and poverty Sarfraz Khan Qureshi Former Director, Pakistan Institute of Development Studies 2. Human and social Karin Siegmann and Research Fellows, Sustainable Development dimensions Shafqat Shezad Policy Institute 3. Water and environmental Vaqar Zakaria Managing Director, Hagler Bailley sustainability 4. Water and energy Imitiaz Ali Qazilbash Retired WAPDA official 5. Water balances and Shahid Ahmad Chief Scientific Officer, evapotranspiration Water Natural Resources Division, Pakistan Agricultural Research Council 6. Water rights and Faizul Hasan Chief Engineer, ACE (Pvt.) Ltd., and entitlements Project Coordinator, General Consultants for WAPDA 7. Sustainable, accountable Sardar Muhammad Former Member (Water), and Chairman, institutions Tariq and WAPDA, respectively Shams-ul-Mulk 8. Drinking water and sanitation Khurram Shahid Consultant 9. The political economy of Imran Ali Professor, Lahore University of Management reform Sciences (LUMS) 10. The role of large dams in Pervaiz Amir Economist, the Indus System Asianics Agro. Dev. International 11. Groundwater development Frank van Steenbergen Metameta Research and Ground Water/ and management and Shamshad Gohar Water Quality Specialist, PCWSSP 12. Modernization of agriculture Pervaiz Amir Economist, Asianics Agro. Dev. International 13. The policies and prospective Sardar Muhammad Former Member (Water), and Chairman, plans for development and Tariq and WAPDA, respectively management of water Shams-ul-Mulk resources by the federal and provincial governments 14. Flood control and Asif Kazi Former Special Secretary, Ministry of Water management and Power, and ex-Chairman, Federal Flood Commission 15. Drainage and salinity M.N. Bhutta and Director General management Lambert Smedema International Water Logging and Salinity Research Institute (IWASRI) 16. The evolution of Bank Usman Qamar Senior Irrigation Engineer, The World Bank lending and non-lending for water in Pakistan 17. The evolution of Bank Pervaiz Amir and Economist, Asianics lending and non-lending for Nadir Abbas Senior Water Supply and water supply and sanitation Sanitation Specialist, The World Bank 2 The Challenges and Achievements of the Past CHAPTER 2 THE CHALLENGES AND ACHIEVEMENTS OF THE PAST The Challenges western parts of Pakistan. These low precipitation levels meanthatrain-fedor barani agriculture is not Pakistan is an arid country. The balance between possible on a large scale in Pakistan. Throughout population and available water already makes history people have adapted to the low and poorly Pakistan one of the most water-stressed countries distributed rainfall by either living along the in the world (fig. 2.1); with rapid population banks of rivers, or by careful husbanding and growth it will soon enter a condition of absolute management of local water resources. One of water scarcity (fig. 2.2). the greatest of human civilizations--the Indus In the cultivable plains, rainfall ranges from Valley (Mohenjodaro and Harappa) Civilization about 500 mm a year along the Punjab border flourished along the banks of the Indus. But under with India (which receives some rainfall from the natural conditions population densities were summer monsoon) to only 100 mm a year in the necessarily low. Fig. 2.1: World's most water-stressed countries Source: www.UNEP.org. 3 Pakistan's Water Economy well-watered, rain-fed cultivation. In western Fig. 2.2: Declining per capita availability of water in Pakistan Punjab, the part that would be in Pakistan, the (cubic meters per capita per year) situation was quite different. Irrigation here was onto pastoral lands, only a small fraction of which 3500 were private proprietary holdings.These extensive 3000 barren tracts were appropriated as state property 2500 and categorized as Crown or State Waste Land. 2000 Water stress Not only were the rights of the pastoral tribes to 1500 the land not recognized, but these tribes were also Water scarcity 1000 deemed to lack the agricultural traditions to make 500 a success of cultivating new land. The British 0 administration then embarked on a vast process 1981 1998 2003 2010 2025 2035 2050 of agricultural colonization, by essentially Source: Amir, 2005. introducing colonists from other parts of the Punjab to these `canal colony' lands. With British rule everything changed. As A massive canal system (fig. 2.3 shows its extent analyzed in Deepak Lal's history of economic today, and fig. 2.4 the architecture from the growth in the subcontinent,1 the British barrage to the field) was built, with the principle understood that the marginal returns to water being to maximize the use of `run-of-the-river' development were higher in regions of relatively flows in the kharif season, and to allow equal low rainfall than in the higher rainfall areas, and distribution to all irrigators by use of the thus emphasized hydraulic works which would warabandi, a time-based roster allocation system. `make the deserts bloom'.2 In many ways, the Since that time agriculture in the region has largely imperative was to `go west, young man', including been synonymous with irrigation, with rainfall into the arid part of eastern Punjab. playing only a supplementary role both for the In any social endeavor of such ambition, the spring (rabi) and autumn (kharif ) harvests.5 result varies depending on the interaction of the As population densities increased, especially in natural and human terrain as described brilliantly the areas adjacent to the rivers, so too did the in Imran Ali's seminal book The Punjab under vulnerability of people to the naturally meandering Imperialism3 and in his background paper for this nature of heavily-silt-laden rivers, and to floods. Report.4 As the irrigation systems stretched further As shown in fig. 2.5, floods have, with considerable and further away from areas of reasonable rainfall, regularity, inflicted large damages and caused they dealt with quite different social realities on many deaths. The nature of the flood protection the ground and gave rise to different hydraulic and management challenge varies considerably civilizations. In UP and eastern Punjab canal across the country.6 In NWFP and Balochistan irrigation occurred primarily on already settled and parts of the Punjab, the so-called `hill torrents' lands, and irrigation was a supplement to relatively are usually highly beneficial, sustaining a large 1 Deepak Lal, Cultural Stability and Economic Stagnation: India 1500 BC­1980 AD, Clarendon Press, 1988. 2 In the evocative phrase of Arthur Maass and Raymond L. Anderson, And the Desert Shall Rejoice: Conflict, Growth, and Justice in Arid Environments, MIT Press, 1978. 3 Imran Ali, The Punjab under Imperialism, 1885­1947, Princeton University Press, NJ: Princeton,1988. 4 Paper 9. 5 Ibid. 6 Paper 14. 4 The Challenges and Achievements of the Past Fig. 2.3: Indus Basin irrigation system r Indus River vei R Tarbela am rth el Jhelum River No Reservoir Kunhar Ne Kashmir er Warsak Riv Pakistan Dam River Chenab River Kabul River Haro er Mangla Riv Reservoir reviR um Marala Kalabagh Reservoir Mar Soan Barrage ala (proposed) Jinnah U. Chenab - er Barrage hel Ravi ivaR J Power Link Khanki Riv Kurram River Rasul Rasul U. Jheluam Barrag Link India Barrge Channelinter U.Jhelum Link Thal Canal Inter Chennab U. B.R.B.D. Link nal Qadirab L. Chennab e Pakistan Inter BRBD Chashma Chashma-Jhelum L. ad Reservoir Rasul-Qadir nal C. Sutlej C.B. Jhelum Barrage L.C.C. nal abad Link L.C Qadirabad-Balloki B.D. U .Depalpur R Link Feeder .C Link C C. . Thal reservoir (Jhang) W L.C (Guger East L.C Balloki B.S. B.S. L. Link Link 2 Sulemanki Gomal River 1 (proposed) Chenab est L. .C .C Barrage Barrage Depalpur Trimmu Trimm . . B.D Barrage u-Sidhnai a) .C Ha veli Pakpattan Link Link Sidhnai U. Fordw Canal henab Barrage Haveli Internal Ravi Sadiqa Easter C ah Sidhnai-Mailsi Islam Sidhnai Barrag n Rangpur L. e Taunsa Pakpattan Barrage Taunsa-Panjnad Der Baha Muzaff Link Mailsi Chenab a Ghazi wal Qaim link argarh Sutlej wal Baha Khan River U. wal Punjnad Baha Punjnad L. Guddu Abassia Barrage Ghotki Feeder Patt Feeder iFeeder feeder Sukkur Deser Barrage Beghar NorthWest Khair Khair Rice pur Rohr Dadu purNara W i East Sehwan Reservoir est (Proposed) Lined i Kotri Barrage Pin Fuleli channel Kalr yar i Arabian Sea Source: Hasan, 2005. agricultural population. Occasionally, flash floods has reduced the impact of flooding. In all river cause serious damage, as did the drought-ending systems, and especially those with heavy silt loads, floods in Balochistan in 2005. In the plains the the greatest flooding problems are in the flat deltas. problem is different. Punjab has problems both And so it is in Pakistan, where Sindh is basically a with inundation and land erosion, but intelligent delta in which the Indus has meandered over use of the natural, south-west slope of the land millennia. As in all deltas, once silt is deposited in 5 Pakistan's Water Economy Fig. 2.4: A typical canal command in the Indus system Source: Hasan, 2005. one place, the river shifts to a lower-lying area. In Fig. 2.5: Flood losses in Pakistan times of flood these can be very dramatic and long- distance shifts. As larger populations inhabited the Lives Lost Area Flooded (Million Acres) delta, however, this uncertainty was not acceptable 3,500 25 and so, over the past one hundred and fifty years 3,000 20 `the Indus river has now been put in a straitjacket, 2,500 2,000 15 thereby fixing its location'.7The result of this river 1,500 10 training, as with so many other silt-laden rivers 1,000 5 around the world, has meant that when silt is 500 0 0 deposited the river now does not shift course horizontally, but vertically, giving rise to a situation 1950 1955 1956 1957 1959 1973 1975 1976 1977 1978 1981 1983 1984 1988 1992 1994 1995 where the river is higher than the surrounding Source: Kazi, 2005. land, and the choice is between two unsatisfactory 7 Paper 14. 6 The Challenges and Achievements of the Past and expensive options--dredging, and continuing heartland of Punjab from the life-giving waters of to raise the side embankments. The inevitable the Ravi, Beas, and Sutlej rivers (fig. 2.6). consequence is that `when a protection bund The second challenge was hydraulic in nature, breaches in Sindh province, inundations are because there was now (fig. 2.6) a mismatch prolonged, and the floods not only damage between the location of Pakistan's water (from the summer crops but they also interfere with the sowing of subsequent winter crops. The potential Fig. 2.6: The Indus water canal for economic losses, and human sufferings for the system at Partition in 1947 poor inhabitants of relatively cheap flood-prone lands near the river, are the greatest. In addition to millions of acres of irrigated land that is subjected to flooding, country's major rail and roads are also sometimes affected by super flood events that keep the infrastructure out of service for long durations.'8 Transforming an arid and capricious environment into one in which 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. The natural flow regimes of the rivers were dramatically altered. Rivers which had previously meandered over wide plains were now confined within narrow channels. Source: The World Bank. The large quantities of sediments which were washed off of the young Himalayas in the spring Indus, Jhelum, and Chenab, the so-called western floods now no longer nourished the delta but were rivers) with the areas that had previously been diverted onto land (and later partially trapped irrigated from the Ravi, Beas, and Sutlej (which behind high dams). Vast quantities of water were were now `India's rivers'). disgorged onto deserts, substantial parts of which The third challenge was neither political nor were of oceanic origin and highly saline. And areas hydraulic,butecological.Itwasthislast reality which which were previously habitable only by nomads gave rise to the third major water challenge which were now transformed into dense `canal colonies' Pakistan had to face at and after Independence. of immigrant farmers.9 Hundreds of billions of cubic meters of water were The area was, for better or worse, transformed now stored in the naturally-deep aquifers of Punjab into a hydraulic civilization which brought great alone. The groundwater table rose dramatically returns but which also posed, and poses, massive (fig. 2.7), and in many areas water tables now political, hydraulic, and economic challenges in reached the level of the land. And these waters were maintaining an acceptable balance between the rich in salts which had been absorbed from the natural system and man. soil. After the water evaporated, the land was The first challenge for the nation of Pakistan covered with a crispy layer of life-suppressing salt. was a political challenge which arose because the In the early 1960s it appeared that Pakistan was hastily drawn lines of Partition severed the irrigated doomed, ironically, to a watery, salty grave. 8 Paper 14. 9 Imran Ali, The Punjab under Imperialism, 1885­1947, Princeton University Press, NJ: Princeton, 1988. 7 Pakistan's Water Economy Fig. 2.7: The change in groundwater levels A CHAB DOAB RECHNA DOAB BARI DOAB A' depth in m Jhang Rakh Lower Bari above m.s.l. North branch branch branch Doab canal lower Jhelum canal 190 Degh Dipalpur Khadir branch Nala Ravi canal Sutlej 180 Jhelum Chenab 1960 170 1920 Pre irrigation 160 Jhelum Chenab A Doab Degh Chaj Doab Indus 150 Rechna vi A' Ra iDoab 0 20 40 60 80 100 km Bar Sutlej Source: Bhutta and Smedema, 2005. The Response-- Tennessee Valley Authority and the person who Public Infrastructure got the ball rolling on the Indus Treaty) was of a single, integrated basin authority.This was rapidly The Partition both created Pakistan and did it in rejected as being impractical. The broad outlines such a way that the very survival of the country was of the agreement were that Pakistan was (with put in jeopardy. Almost 90 percent of the irrigated minor exceptions for existing uses in Kashmir) area in the Indus Basin was now in Pakistan,10 but assigned full use of the waters of the Indus, Jhelum, the rivers which nourished these lands had their and Chenab rivers, which accounted for 75 percent origins in India (and, to a minor degree, in remote of the waters of the system. The unique feature and sparsely inhabited parts of China). of the negotiating process was that it was agreed Over the next decade, teams from Pakistan and that the process should not be driven by legal India worked together with a team from The principles but that, instead, principles of water World Bank (whose offer of its `good offices' was engineering and economics were to be the basic accepted by both countries) to fashion a solution considerations.11 This meant that, Pakistan's which would be acceptable to both sides and considerable misgivings notwithstanding, India would be durable.There were great difficulties and was to be permitted (under very carefully specified many dead ends. The first proposal (framed by conditions which took two years to negotiate) David Lilienthal, former Chairman of the to tap the considerable hydropower potential of 10 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973. 11 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973, and Undula Alam, `Water Rationality: Mediating the Indus Waters Treaty', Ph.D. dissertation, Durham University, 1998. 8 The Challenges and Achievements of the Past Pakistan's three rivers before they entered forty-five years, with the Indus Treaty recently Pakistan.12 again being declared `sacrosanct' by the Presidents The Indus WatersTreaty (IWT) was not a first- of both countries. best for either side. Then there were conflicting A central element of the Indus Waters Treaty principles put on the table--`no appreciable harm' was the construction of the infrastructure which versus `equitable utilization'. As in most other would enable Pakistan to both supply those areas cases, `international water law is used by riparians which would no longer be irrigated from the Ravi, less to resolve disputes than to dignify positions Beas, or Sutlej (`India's rivers'), and to increase the based on individual state interest.'13 And so overall area under irrigation. The Indus Basin too was the way in which the IWT was (and Development Fund (with contributions from sometimes still is) perceived. From the Indian side several western governments, a payment from the fact that Pakistan got 75 percent of the water India, and loans from The World Bank) was used represented a fundamental violation of the to re-plumb the system, as shown in fig. 2.8. This principle of `equitable utilization' (the favorite of included the building of massive `link canals' from the International Law Association). `The Treaty the western rivers to the east, and the two main came under heavy fire in the Indian parliament storage dams (Tarbela, the then biggest rockfill and was subjected to trenchant criticism by most dam in the world, on the Indus; and Mangla on of the speakers who participated in the Lok Sabha the Jhelum) on which the re-configured system debate on the subject on 30 November 1960.They would depend. blamed the Government of India for a policy of appeasement and surrender to Pakistan and said Fig. 2.8: The Indus Waters Treaty that Indian interests had been let down...'.14 From (1960) the Pakistani side the fact that they were allocated `only' 75 percent of the water when they had 90 percent of the irrigated land represented a violation of the principle of `appreciable harm' (the favorite of the International Law Commission). A solomonic judgment (to which we 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 is the enemy of the good and in this case we have accepted the good after careful and realistic appreciation of our entire overall situation.... The basis of this agreement is realism and pragmatism....'15 The wisdom of this perspective has been vindicated many times over the past 12 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973, and Undula Alam, `Water Rationality: Mediation the Indus Waters Treaty', Ph.D. dissertation, Durham University, 1998. 13 Shapland in Undula Alam, `Water Rationality: Mediating the Indus WatersTreaty', Ph.D. dissertation, Durham University, 1998. 14 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973. 15 Ayub Khan in N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973 . 9 Pakistan's Water Economy This was a massive engineering challenge that represents over 30 percent of Pakistan's installed faced, as do all challenges in life, times when failure generation capacity. The actual direct power and seemed imminent. But with great skill and irrigation benefits were about 25 percent higher commitment Pakistan's engineers and their than those predicted at appraisal (fig. 2.9). collaborators from around the world did it. The Indus WatersTreaty brought a fundamental Fig. 2.9: Benefits from Tarbela and unprecedented change in Pakistan's options (1975­98) and approach towards its water development and management. With the loss of the three eastern Power Irrigation rivers, Pakistan had no choice but to rely on storage 3500 for meeting its existing demands (Mangla), and 3000 for future extension of the irrigated area (Tarbela). US$ 2500 In short, the development and sustainability 2000 1998 of water resources development in Pakistan 1500 1000 became, and continues to be, dependent on storage Million 500 and dams. 0 What was the social and economic impact of Predicted Actual this infrastructure? First, it secured the future of a Source: WCD, 2000. young and vulnerable country. (It is relevant to note that, despite the fact that it was funded by As noted in the Tarbela study for the World The World Bank, there was no economic analysis Commission on Dams, important as these direct done of Mangla Dam--it was an investment that effects are, they tell only part of the story of the was self-evidently necessary for the pure survival impact of major infrastructure.The irrigation and of Punjab in Pakistan.) Second, it--especially hydropower are the `direct benefits', which in turn Tarbela--facilitated the expansion of irrigated area generate both inter-industry linkage impacts and and the production of clean and renewable consumption-induced impacts on the regional hydropower. In a major study done for the and national economy. Water released from a World Commission on Dams, Pervaiz Amir and multipurpose dam provides irrigation that colleagues did an ex-post assessment of the impact results in the increased output of agricultural of Tarbela. commodities. Changes in the output of these The impact was and is massive. In the mid- commodities require inputs from other sectors 1970sThe World Bank did an ex-post assessment such as seeds, fertilizers, pump sets, diesel of the economic impact of Mangla and the link engines, electric motors, tractors, fuels, and canals.While recognizing that the indirect benefits electricity. Furthermore, increased output of some were large, the assessment focused only on direct agricultural commodities encourages setting up of benefits, and concluded that these exceeded foodprocessing(sugarfactories, oil mills, rice mills, 10 percent. bakeries, etc.) and other industrial units. Similarly, Tarbela has a massive impact on the economy hydropower produced from a multipurpose dam of Pakistan. It is estimated16 that about 40 percent provides electricity for households in urban and of the population presently benefits from water rural areas, and for increased output of industrial that is regulated by Tarbela. Tarbela (along with products (including fertilizers, chemicals, and the derivative Ghazi Barotha project below it) machinery). Changes in the output of these 16 Paper 2. 10 The Challenges and Achievements of the Past industrial commodities require inputs from other Bhakra generated 90 rupees of indirect benefits sectors such as steel, energy, and chemicals. Thus, for the regional economy and ripples well beyond both increased output of electricity and irrigation the region. from a dam result in significant backward linkages These investments were done in the name of (that is, demand for higher input supplies) and national survival, food security, and economic forward linkages (that is, providing inputs for growth: how do they fare when judged by the further processing). In addition, as incomes rise, contemporary criterion on poverty reduction? there is a further feedback loop deriving from The single most important finding from increased demands for goods and services. research shows that the central issue for poverty There have been two major studies in the sub- reduction is not who gets the water, but how that continent which have examined these indirect water transforms the demand for labor (which is impacts. A study by the International Food provided primarily by the landless and marginal Policy Research Institute of the impact of Green farmers). The fundamental driver is that the Revolution17 showed that: demand for agricultural labor is 50 percent to 100 percent higher on irrigated land.20 As Robert l the multiplier was large--each rupee increase Chambers has shown through village-level work in value added in agriculture stimulated an (fig. 2.10), irrigation has meant higher and much additional rupee of value added in the more stable employment, with the poor the major region's non-farm economy beneficiaries. l about half of the indirect income gain was Two recent, much more sophisticated analyses due to agriculture's demands for inputs and (which used input-output matrices and Social marketing and processing services, and the rest due to increased consumer demands as Fig. 2.10: Average number a consequence of higher incomes of employment for adult casual l the multipliers for basic productive infra- laborers each month structure were much higher than for social 30 spending and other sectors 25 20 As pointed out by Pervaiz Amir,18 the indirect 15 impacts of major dams in Pakistan are likely to be 10 quite similar to those emanating from the similar- sized Bhakra Dam in the Indian Punjab, for which 5 there has been a major recent assessment.19 The 0 n b y n l g v study found that the direct benefits were higher Ja Ju Fe Mar Apr Ma Ju Au Sep Oct No Dec than anticipated when the dam was built and irrigated village unirrigated village that the dam did, indeed, serve to transform this Source: Chambers, 1988. region. For every 100 rupees of direct benefits, 17 Hazell, Peter, and C. Ramasamy, The Green Revolution Reconsidered: The Impact of High Yielding Varieties in South India, The Johns Hopkins University Press, Baltimore, 1991. 18 Paper 10. 19 Ramesh Bhatia, `Economic Benefits and Synergy Effects of the Bhakra Multipurpose Dam, India: A case study', The World Bank, 2005 (draft). 20 Ramesh Bhatia, `Water and Growth', Background Paper Report, 2005. 11 Pakistan's Water Economy Accounting Matrix methods) have shown similar Fig. 2.12: The effect of Bhakra Dam on results. The study by the International Food different social groups Policy Research Institute of the impact of Green Revolution21 showed (fig. 2.11) that the biggest % change of income of different types of households with and without Bhakra Dam winners were the landless, whose incomes 80 increased by 125 percent as a result of the large increase in demand for their labor. 60 40 Fig. 2.11: The effect of irrigation and 20 green revolution on income 0 r % increase 1973­83 Ag al al 150 wners Laborr Rur Others Urban Rur Non Ag 100 Lando Source: Bhatia, 2005. 50 0 Fig. 2.13: Income gains from mers mers r directly and indirectly impacted arf igation arf igation igation irr irr Landless sectors--Bhakra Dam mers Non-ag households Large with Small with Non-irr arf Direct Impacts Indirect Impacts Source: Hazell et al., 1991. 100% 80% And the major study by Bhatia and colleagues 60% of the effect of Bhakra,22 again (fig. 2.12) shows 40% 20% that the rural poor have benefited hugely from 0% the project, and (fig. 2.13) that it was the indirect r- effects of the dam which had the major impact on ed-y Ag al al al al Urban urban areas (and therefore on urban poverty Labor-r Others- Rur Non Rur Self Emplo Rur Ag Rur reduction). (There are, of course, a number of important differences between landholding size Source: Malik, 2005. and agricultural productivity in the Indian and Pakistani Punjabs, which would mean that the determine the magnitude of the indirect effects, distribution of direct benefits, which accrue to or of the effects on the poor, since labor markets those with land, would be somewhat different. But operate quite similarly on both sides of the border.) there is unlikely to be much difference in terms of With the certainty--or so it seems--of the forward and backward linkages which retrospective wisdom, it has been claimed that 21 Hazell, Peter, and C. Ramasamy, The Green Revolution Reconsidered: The Impact of High Yielding Varieties in South India, The Johns Hopkins University Press, Baltimore, 1991. 22 Ramesh Bhatia, `Economic Benefits and Synergy Effects of the Bhakra Multipurpose Dam, India: A case study', The World Bank, 2005 (draft). 12 The Challenges and Achievements of the Past these interventions did nothing for the poor, also substantial investments in flood control because it were the rich farmers who benefited infrastructure, with about 6,000 kilometers of from the infrastructure.23 These studies show the embankments constructed along the major rivers limits of such a reductionist view (which has never and their tributaries.25 There have also been been one taken by governments with responsibility investments in watershed protection (above anywhere in the world). At the end of the day it Mangla, for example)26 which have probably had does not matter (a) whether such projects a modest effect on the uncontrollable sediment are justified in terms of poverty reduction, or loads from the young mountains, and have and (b) whether the primary recipients of the `first- could have (accepted wisdom notwithstanding) round benefits' are those with land. Because the little effect on large-scale flooding.27 Pakistan's record is overwhelmingly clear--investments in approach to flood management has also water infrastructure in the subcontinent have emphasized other non-structural elements, resulted in massive reductions in poverty, and it is `including permanent and temporary relocation actually the poor and landless who have been the of potential flood affectees, review of reservoir biggest beneficiaries. The appropriate (water!) operation regulations to attenuate flood peaks, metaphor (as in other water projects around the land-use regulations for hazardous areas, and an world) is not `trickle down', but `a rising tide lifts extended and reliable Flood Forecasting and (almost) all boats'. Timely Warning Network.'28 Finally, all pubic infrastructure was not for irrigation. Settling large numbers of people in an The Response-- arid and capricious environment means facing not only the constant threat of famine, but the constant Private Infrastructure threat of variability's other face, occasional but very damaging floods. `Floods are detrimental not only The large investments in surface irrigation in financial terms, but also in their ability to transformed not only the economy and landscape severely undermine the productive system that has of Pakistan, but had a huge impact on to be reasonably free from uncertainties and groundwater. The vast, leaky, irrigation system frequent disruptions.'24 As also pointed out by disgorged hundreds of billions of cubic meters29 Asif Kazi, there can be no such thing as full of water into the aquifers of the Indus Basin at protection from floods. In terms of infrastructure, the same time as when natural drainage channels the challenges (and the responses) are quite were impeded. The result was a fundamental different in different parts of the country. In change in the water balance, with subterranean addition to the major dams (which provided some and surface flows out of the aquifers and into the protection from floods), and the multitude rivers, and eventually the ocean no longer capable of small check dams in the hills, there were of draining the much larger quantities of water 23 Jack Pelliquen, India: Evaluating Bank Assistance for Agriculture and Rural Development, OED, The World Bank, 2002, and Shripad Dharmadhikary, Unraveling Bhakra, Badwani, Madhya Pradesh, 2005. 24 Paper 14. 25 Ibid. 26 Ibid. 27 Calder, Ian, and David Kaimowitz, `A flood of evidence', The Economist, 7 October 2004. 28 Paper 14. 29 Assuming an area of roughly 200 km x 300 km, a change of depth of 15 meters, and a storage coefficient of 0.3. 13 Pakistan's Water Economy which were poured into the aquifers. The result There were two pronounced and curiously was an inexorable and relatively rapid rise in the entangled consequences of the high water table. water table, as shown for a cross-section between The first consequence was a revolution in the Punjab canals (fig. 2.14), and on an average the use of groundwater. At the time of Indepen- basis for a longer period in fig. 2.15. dence, groundwater use in the country was very Fig. 2.14: The rise in groundwater levels (1860­1960) A CHAB DOAB RECHNA DOAB BARI DOAB A' depth in m Jhang Rakh Lower Bari above m.s.l. North branch branchbranch Doab canal lower Jhelum canal 190 Degh Dipalpur Khadir branch Nala Ravi canal Sutlej 180 Jhelum Chenab 1960 170 1920 Pre irrigation 160 Jhelum Chenab A Doab Degh Chaj Doab Indus 150 Rechna vi A' Ra iDoab 0 20 40 60 80 100 km Bar Sutlej Source: Bhutta and Smedema, 2005. Fig. 2.15: Irrigation expansion and groundwater levels 45 0 40 Cultivable area ­10 35 Groundwater table ­20 (ft) 30 acres) ­30 (m 25 depth ­40 area ater 20 ­50 igated 15 Irr Groundw ­60 10 ­70 5 0 ­80 1900 1915 1934 1947 1963 2001 2004 Source: IWASRI/WAPDA, 2004. 14 The Challenges and Achievements of the Past limited--mainly through Persian wheels in the the early 1960s, it appeared that the blessing of riverine aquifers, and the remarkable karezes bringing water to the desert had ended up as a (horizontal community wells) in Balochistan.This curse, with 4 million hectares of Pakistan affected changed dramaticallyfrom the mid-1960s onwards by waterlogging and salinity, and apparently as a result of several converging factors. As Green doomed to a watery, salty grave. Revolution took hold, farmers needed much more But just as there are unforeseen ecological reliable supplies of `just-in-time' water. The canal consequences when man intervenes with nature system, however, with few hydraulic controls and on such a massive scale, so, too, is the power of rigid, predetermined schedules was derived for human ingenuity also often unimaginable. So another, less precise type of irrigation and no when President Ayub Khan visited Washington longer met the more demanding needs of farmers. in 1962, he told President Kennedy of the curse Green Revolution was not just about seeds and of waterlogging and salinity. And thus started fertilizers, a central part was also the emergence another chapter, for that conversation led to a of the new modular pump plus diesel engine major scientific enquiry by teams of natural and technology which offered every farmer an `exit social scientists from Harvard University and their option', or at least one in which he could ensure Pakistani colleagues into the causes of the problem, that he had water when he needed it if the canal and the policy options for containing the damage. irrigation system failed. As emphasized by IWMI's Intuition said that the balance needed to be Tushaar Shah:30 `we need to recognize that self- restored by reducing the flows into the aquifers, provision of water is the best indicator of the failure by lining the canals. But the scientists said of public water supply systems. Tubewells otherwise--the way to establish a new, not-so- proliferate in canal commands because public close-to-the-surface water balance was to increase irrigation managers are unable to deliver irrigation the amount of evapotranspiration (more crops), on demand'. In addition, starting in the 1960s and to increase the circulation of water so that the there were new forms of government support: salts would not accumulate in the root zone. credit and soft loan programs for pump sets and And so it proved, although not quite in the way tubewells, and subsidies for electricity (with that thescientiststhoughtandadvised. For that was agricultural rates 40 percent less than normal rates an era of naďve faith in the capacity of governments in Punjab and Sindh, and 60 percent less in to plan and implement, and of little confidence Balochistan and NWFP).31 in the actionsofindividualpeasant farmers. And so The second consequence of the rapid rise in the proposed solution was large-scale installation the groundwater table was much less benign. In of public tubewells, which would recycle its travel down and back up the soil profile, the groundwater back into the canals for subsequent water had absorbed the salts--sometimes very use on the fields in the sweet water areas, and pump abundant where the sediments were of oceanic saline water out into drains in the saline areas. origin, as in large parts of Sindh--which were And so almost 20,000 high capacity (50­150 liters present in the soil. When the water evaporated per second) government-run tubewells were the salts stayed behind, covering large areas of installed from the 1960s onwards under the once-fertile fields with a sterile crust. The low- Salinity Control and Reclamation Project lying areas were now effectively barren, due to the (SCARP).32 In many of the worst affected areas, combined effect of salt and sodden root zones. In the SCARP formula worked wonders--converting 30 Tushaar Shah, `Accountable institutions', Background Paper Report, 2005. 31 Robert Johnson, `Private Tubewell Development in Pakistan's Punjab', IIMI, Lahore, 1989. 32 Ibid. 15 Pakistan's Water Economy a saline wasteland back into a productive area. In rely for their water supply on relatively `clean' fresh groundwater areas, the SCARP drainage groundwater.33 tubewells doubled up as an additional source of In 1960, groundwater accounted for only 8 irrigation. In saline groundwater areas the problem percent of the farm gate water supplies in Punjab. of disposing the highly saline effluent made the Twenty-five years later this figure was 40 percent, deep tubewell program far more complicated and and at present groundwater use for agriculture the impact more limited. accounts for more than 60 percent of the water at As we have seen earlier, the farmers knew one the farm gate in Punjab.34 It is estimated that 75 thing better--they did not need larger supplies of percent of the increase in water supplies in the unreliable water, but much more precise supplies last twenty-five years is due to groundwater which they could control. And so the great attack exploitation.35 In the process, the great canal on waterlogging and salinity followed the compass system became less of a water delivery mechanism, of the scientists, but not their road map.The large and more of a groundwater recharge mechanism. SCARP tubewells were installed and did play a In Punjab, for example, 80 percent of the role; but it was the unfettered action of millions groundwater recharge is from the canal system. of farmers with their individual tubewells and Finally, it is instructive to consider the source their intensifying agriculture which reversed the of irrigation water by both quantity and value, in rising tide of water and salt, and restored a still- part because it shows the centrality of conjunctive uneasy balance. use, and the fallacy of a Cartesian view, namely The net result of this interplay of supply- and that `groundwater is more important than surface demand-side factors was (fig. 2.16) an explosive water'. Figure 2.17 shows: increase in the number of tubewells for irrigation, primarily in the sweet water areas far from the l that surface water is very important, ocean and nearer the mountains. (The investment accounting for 90 percent use for irrigation on these private tubewells is of the order of 30­ in Punjab (40 percent directly, and 40 billion rupees.) In addition, many industries 50 percent indirectly).The massive infusions Fig. 2.17: Quantities and values of Fig. 2.16: The growth in use irrigation supplies in Punjab, by source of tubewells 700,000 Canal water directly 600,000 Tubewells 500,000 25% 40% from natural (thousands) 400,000 50% recharge 62% Tubewells 13% ells 300,000 w from canal- 200,000 10% induced ubeT100,000 recharge 0 By quantity By value (cubic meters) (Rupees) 1960 1965 1970 1975 1980 1985 1990 1995 2000 2003 Source: Steenbergen and Gohar, background Source: Steenbergen and Gohar, 2005. paper. 33 Paper 11. 34 Ibid. 35 Ibid. 16 The Challenges and Achievements of the Past of surface water remain as important as ever. construction, cut from quite a different cloth from However, primarily because of the inability its apparently similar Indian cousin to the east. of the surface system to directly meet the just- To the east, irrigation was a service provided to in-time demands of modern agriculture, the existing farmers who had long been engaged in delivery is through the circuitous (and costly settled agriculture. To the west, in the `to-be- in many ways) groundwater system Pakistan' areas there were only pastoralists. There l that groundwater is very important, the role of the state was not only to lay out the accounting for 60 percent of the water physical infrastructure, but also to construct an delivered at the farm gate and 75 percent of entirely new colonial social structure.36 the value of water delivered All of history is path-dependent, but in few places is the import of the initial decisions as In summary, the last forty years witnessed an profound and as clear as it is in this case, as extraordinary demonstration of man's ability to dissected with extraordinary clarity by Imran Ali.37 think and act his way out of apparent dead ends. For the British, especially after the armed struggle With equal doses of good thinking, good planning, of 1857, the Punjabis were the favored people of and good luck, the people and government of the subcontinent. It was only Punjabis--and not Pakistan have addressed the twin challenges of any of the other ethnic groups in future Pakistan-- producing more while simultaneously dealing who were given land in the canal colonies in both with a fundamental threat to the natural resource present Punjab and Sindh, laying the basis for still- base. The good thinking was the application of simmering perceptions of preferential treatment water science and economics by many of Pakistan's by the state. Furthermore, the colonial best and brightest in conjunction with many of administration almost universally confined the the best water minds in the world. The `solution' selection of grantees to the `upper' segments of was not the obvious one of lining canals and village society (the lineages that controlled land putting less water on the land, but of increasing and power at the local level) and excluded the lower the use of groundwater, thus increasing status `service' castes. And here another path- evapotranspiration,drawingdownthegroundwater defining brick was laid, for these same landholding table, and leaching much of the salts down and castes monopolized recruitment into the colonial out of the root zone.The good thinking and good military, with Punjabis comprising half of the planning were classic `public goods'. The `good entire British army. The military thus became a luck' driver of this revolution was the modest but major actor in the emerging hydraulic society, transforming tubewell and diesel engine, bought through substantial land grants to military and managed by millions of farmers for the simple personnel, military farms, extensive horse-breeding reason that this decentralized `on-demand' source schemes and stud farms, and remount depots for of water enabled them to greatly increase their crop the cavalry. After 1900, the selection process yields and incomes. worked within the framework of the Punjab Alienation of Lands Act, which listed hereditary The Response--Institutions landholding castes in each district, and forbade land transfers from `agricultural' to `non- As described earlier, the hydraulic civilization of agricultural' castes. Finally, those who were the Indus Valley in Pakistan was a very particular rewarded with land in the new canal colonies were 36 Paper 9. 37 Ibid. 17 Pakistan's Water Economy primarily non-Muslim Punjabis from the east, which could spread the then-abundant water onto laying the seeds for the massive problems of return a very large area at minimal cost for the production migration in 1947. of foodgrains. The reasonable result was a system The hydraulic state in Pakistan, then, created which had little ability to regulate flows within not just infrastructure, but social fabric, and it was the channel systems or for flow measurement at a state which evolved in close association with the either the main, branch, or distributary levels, and military. The hallmark of the Pakistani water which ensured that pain was equally spread bureaucracy at Partition was one of discipline, through an inflexible time-based allocation system. order, andtheunquestionedsupremacy of the state. Some defects were cumulative and became As described earlier, the pressing water apparent and important over time. The rigid and challenges of Pakistan in the first decade after simple warabandi rules had many virtues, but Independence were to build the infrastructure also--like all human endeavors--vices. A major necessary for water and energy security. Given the issue was that a time-based distribution system dominance of the single trans-provincial Indus which did not take account of large canal losses Basin and the need for basin-wide solutions, the ended up heavily discriminating against tail- logical response was WAPDA, a parastatal given a enders. The `take it when we give it; and use it or mandate of planning and building this lose it' philosophy of warabandi also meant that infrastructure, and given the human and financial the system became less aligned with the needs resources to do so. WAPDA proved to be very of irrigators as water became scarce, and as successful, developing a global reputation for farmers shifted to varieties and crops which were world-class expertise in planning, construction, more sensitive to the timing of water inputs. and operation. Farmers, as everywhere, adapted in ways that they Building institutions, however, is not a one-shot could--by trading warabandi turns in the business. Trade-offs which were made quite distributaries, and, eventually, by becoming heavily sensibly at one particular stage of development, reliant on groundwater which they could control may not be appropriate as opportunities and values much better. change. The key test is whether the physical and This `involution' (to use Clifford Geertz's institutional systems are able to evolve as cultural anthropological construct)38 meant that circumstances change. The very success of one the irrigation departments slowly but surely shifted endeavor gives rise to new challenges, and often their focus from being a good service provider to challenges which are fundamentally different from being concerned substantially with ways in which those just mastered. It is now generally agreed that the departments could serve the needs of the in recent decades the major water institutions-- people in it. A greater and greater amount of the irrigation departments, WAPDA--have ossified, real attention of the irrigation departments was and not evolved in the face of changing paid to the employment provided, and the circumstances, incentives, and demands. opportunities for rent which could be extracted Like all institutions, they were designed to meet at all levels. The iron equation of rent seeking a specific need at a particular historic juncture. In (monopoly + discretion ­ accountability = the case of the irrigation departments, the corruption) was at work even in colonial times: challenge of the nineteenth century was to put in `The subordinate bureaucracy was involved place a low-cost extensive unlined canal system extensively in perquisites from agricultural owners. 38 Clifford Geertz, Agricultural Involution: The Processes of Ecological Change in Indonesia, University of California Press, 1963. 18 The Challenges and Achievements of the Past The larger and more powerful the latter, the more water management system of Pakistan. The concessions they could obtain from corruption. contemporary situation is summarized well This occurred in essentially two features: first, by Imran Ali: `...with declining administrative greater and inordinate access to irrigation water; efficiencies, overstretched organizational resources, and second, underassessment of water rates. This degraded service delivery, and unchecked situation was exacerbated in Sindh, with more land corruption, there appears to be a glaring failure of under large landowners.'39 centralized irrigation management.'40 After Independence, this process was deepened WAPDA has a shorter history driven by the and strengthened. The irrigation departments (a) original planning and construction of major maintained (to this day) their monopoly status; (b) infrastructure mission. It performed this heroically, developed ever-higher levels of discretion (so that in many respects, with an organization of high at each level in each of the systems there are just a morale and competence building Mangla and few people--sometimes one--who decide exactly Tarbela, and, in the process overcoming enormous how and why water is distributed to the various technical challenges which threatened the integrity canals in the ways it is), and ensured that the water of structures which have served the country so well. records remained (and remain) internal rather than With the imminent completion of Indus Basin public records; and (c) concurred with the Project and Tarbela Dam, the country's emphasis cumulative tipping of the `who pays' balance away shifted to addressing waterlogging and salinity from the user and towards the budget, thus problems, both of which were included in creating a larger and larger discrepancy between WAPDA's founding Act. In 1973, the federal the cost and value of water (and thus a larger and government launched an `accelerated program' of larger space for arbitrage) and less and less waterlogging and salinity control (SCARP). accountability to users. The end results are WAPDA, which had skimmed off the cream of somewhat different in different areas, and always the technical expertise earlier available in the there are good people at various levels who push irrigation departments, was the natural choice to to hold the incentive structure at bay. But the play the lead role in the construction of SCARPs systemic result is clear. The original discipline of as well as new canals that cross provincial the warabandi is severely damaged, with `direct boundaries. While federal resources for SCARP outlets' constituting up to 30 percent of flows in were allocated to the provinces, they were obliged some canal commands. The rents extracted are to use WAPDA as the `contractor'. Completed huge: at the top of the feeding chain in some works were `handed over' to the irrigation provinces crores of rupees allegedly are paid by departments, who took over O&M responsibility, officials for positions; at the executive engineer invariably with reluctance andreservations.Besides level offers of `clean jobs at four times the salary' operating and maintaining the existing three are rejected because of the major loss of income major reservoirs, WAPDA continues to perform (formal and mostly informal) this would entail. some of these new responsibilities to date, even Put all of this on top of a system where inequality though this takes opportunities for the irrigation (the so-called `feudal problem') was built in departments to develop their own capacity. With from the start, and it is not surprising that the the ongoing reforms of WAPDA's Power Wing single most striking feature to experienced and the advent of the drought and emerging outsiders is the very high level of mistrust in the water shortages, WAPDA has once again been 39 Paper 9. 40 Ibid. 19 Pakistan's Water Economy thrust into the limelight. The residual Water and management of existing infrastructure and Wing of WAPDA has shifted its focus towards resources become the primary challenge. developing water resources envisaged in its Long as the distance is to go, Pakistan has made ambitious `Vision 2025'. WAPDA is constructing important progress in some critical areas. several medium-size reservoirs as well as major Institutions are not just organizations, but the irrigation extension projects (Greater Thal and `rules of the game' which govern relationships Kachi Canals), while planning for and advocating among organizations and people.41 major new reservoirs. The most fundamental of the instruments In many ways, these key institutions of the which affect water management are those which hydraulic state of Pakistan resembled and in some define who is entitled to do what with water. At cases were modeled after similar institutions in the apex level there is the Indus Waters Treaty developed countries which had used water which defines, unambiguously and in perpetuity, infrastructure as the platform for growth in arid the water that belongs to Pakistan. One of the great lands. And as with all such countries--including virtues of the Treaty was that by the clarity of USA, Mexico, Brazil, South Africa, Egypt, India, definition, and the permanent nature of the rights Thailand, Australia, and China--the process of so established, it motivated India and Pakistan to institutional change has been protracted, fitful, focus on how they would use the water that was difficult, and incomplete. In the process of a theirs (and not on endless distracting haggling similar review with The World Bank in China, about what water they should have). Recent the Government of China developed a useful differences on `differences' which have arisen in schematic representation (fig. 2.18) of the the interpretation of the Indus WatersTreaty have institutional challenge in moving from an era confirmed the foresightedness of the framers of `Stage 1', in which building infrastructure is the Treaty (who set up well-defined mechanisms the dominant challenge, to `Stage 2', where for dealing with these), but have also suggested infrastructure still had to be built, but maintenance that there is room for modernizing the bilateral dispute resolution mechanism so that questions Fig. 2.18: Rates of return on investment can be resolved in a more predictable and time- on infrastructure and management bound manner by the Indus Waters Commission. of water resources In a set-up where most depend on a single river system, clarity on entitlements at the next Returns on Investment level down--between provinces--was equally Infrastructure Investments important and, in many ways, equally disputatious. Management Starting in 1935, there were a series of high-level Investments commissions constituted first by the British and Type 1 Type 2 Type 3 then Pakistani governments to try to get a lasting agreement on the division of the Indus system waters among the provinces. After many failed Developing Developed attempts, in 1991, agreement was reached on the provincial entitlements to waters of the Indus Source: The World Bank, 2003. Basin (see box 2.1).42 The Water Accord is a great 41 Douglass North, Institutions, Institutional Change and Economic Performance, Cambridge University Press, 1990. 42 Paper 6. 20 The Challenges and Achievements of the Past achievement since it defines, unambiguously and this day. Similarly, the historic allocations in perpetuity, the shares of available water which within each canal command among the can be used by each of the provinces. It is worth distributaries is also defined historically and recounting the bases for the Accord. followed, and similarly down to the outlet level, below which the warabandi system l The basis for entitlements was prior existing specifies shares. use of water: `the record of actual average l What this implies is that in major parts of system uses for the period 1977­1982 would the Indus Basin irrigation system there are, form the guideline for developing a future in fact, well-defined entitlements at all levels, irrigation pattern.These ten daily uses would from the international, through the inter- be adjusted pro-rata to correspond the provincial, down to canal commands, indicated seasonal allocations of the different distributaries, outlets, and ultimately to each canal systems and would form the basis for farmer on a water course. sharing shortages and surpluses.'This meant that `the existing uses of water supplies to the This well-established set of water entitlements provinces,whichtheyhave so far been getting is a tremendous institutional asset for Pakistan as as ad hoc allocations, remain untouched'. it moves towards modern water management.That l The Accord specifies an automatic process said, the entitlements have not been implemented, for adjusting entitlements depending on at any level, with transparency and accountability. availability. `These ten daily uses would be This has bred widespread belief that the discretion, adjusted pro-rata to correspond the indicated which is always present when there is no seasonal allocations of the different canal transparency, is widely abused.The extent of actual systems and would form the basis for sharing abuse remains unclear--officials will, in one shortages and surpluses.' breath, say that administration is `by the book' at l In case a province was not in a position, for all levels, and then say that a move towards the time being, to make full use of its transparency will be opposed because it will reduce allocation, that surplus may be used by the discretion which officials have been used to another province without acquiring a right exercise at all levels. If existing entitlements at all to it. levels were publicized, along with actual flows, and l The provinces were, in law, given freedom if this was done in a way such that the information by the Accord to use their allocation in any was easily accessible, and comprehensible to lay way that they want: `there would be no people, then a great deal of the discretion, restrictions on the provinces to undertake corruption, and mistrust would evaporate. In new projects within their agreed shares', and addition, farmers equipped with reliable `the provinces will have the freedom within information on what they would get each season, their allocations to modify system-wide and and confidence that it would actually be delivered, period-wise uses'. In practice, however, the would be able to improve substantially the returns fact that provincial entitlements were to the crops they grow. And, of course, there would explained as aggregates of specified historical be much greater pressure on the irrigation uses in different canal commands meant that departments for actually providing that to which the Accord was thus implicitly specifying the users are entitled. distribution of the provincial shares to each The installation of a telemetry system at all of the existing canal commands, allocations barrages and headworks of canals is a vital first step which, in Punjab at least, are followed to in this process. With periodic, credible calibration, 21 Pakistan's Water Economy Box 2.1: The Water Accord of 1991 There was an agreement that the issue relating to apportionment of the waters of the Indus river system should be settled as quickly as possible. In the light of the accepted water distributional principles, the following apportionment (in MAF) was agreed to: Kharif 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 Karachi. ** Ungauged civil canals above rim stations. Under Section 14 (b), the record of actual average system uses for the period 1977­82 would form the guideline for developing future regulation pattern. These ten daily uses would be adjusted pro-rata to correspond to the indicated seasonal allocations of the different canal systems and would form the basis for sharing shortages and surpluses on all-Pakistan basis. Balance river supplies, including flood supplies and future storages, shall be distributed as 37 percent each to Punjab and Sindh, 12 percent to Balochistan, and 14 percent to NWFP. The need for certain minimum escapage to sea below Kotri to check sea intrusion was recognized. Sindh held the views that the optimum level was 10 MAF which was discussed at length, while other studies indicated lower/higher figures. It was, therefore, decided that further studies would be undertaken to establish the minimal escapage needs downstream Kotri. All efforts would be made to avoid wastages. Any surplus used by provinces would not establish a right to such uses. Source: Abstract from Water Accord 1991. and public access to the data on the Internet, this lasts forever, and now it is clear that the laissez- will substantially improve public confidence in the faire attitude to groundwater exploitation, which implementation of the Water Accord. We return worked so well in recent decades, will not work to this theme, and the exciting possibilities for now that the challenge has changed from progress, in Chapter 3 of this Report. underexploitation to incipient overexploitation of Finally, a profound institutional change over many aquifers. The formal institutions have not the last thirty years throughout the subcontinent been doing very well in their `home territory' has been the de-formalization of the water (providing services and maintaining their economy. Recall that over the past twenty years, infrastructure); now they will not only have to 75 percent of the expansion of irrigated area has improve greatly there, but also gear up for the new been `outside of the formal system', and driven by and very difficult task of conjunctive use of surface the individual decisions and investments of water and groundwater, and co-managing these millions of farmers. In many ways this de- in collaboration with the users (discussed in detail formalization has been a great success. But nothing in Chapter 3). 22 The Challenges of the Present and the Necessary Responses CHAPTER 3 THE CHALLENGES OF THE PRESENT AND THE NECESSARY RESPONSES There has been much deliberation in Pakistan in l clearing huge backlog of maintenance and recent years on how to reorient the state to meet modernizing the existing infrastructure the massive water development and management l developing additional infrastructure for challenges. At the national level, this includes storage, distribution, and delivery deliberations reflected in the Ten Year Perspective Plan (Planning Commission, 2001), the National It is to these and related challenges, and the Water Policy (Ministry of Water and Power, Draft responses they demand, that we now turn our 2002) and the latest of October 2002, the Pakistan attention. Water Sector Strategy Study by the Ministry of Water and Power, which includes three main Adjusting to the Needs of a documents: the National Water Sector Profile, Changing Pakistan which summarizes and details all aspects of the water availability and utilization as they exist today; the National Water Sector Strategy, which Pakistan is in the throes of profound demographic identifies the key issues and objectives for the water and economic changes, which have major sector and proposals for planning, development, implications for water management. and management of water resources and their use First, there are major changes within agriculture in all water sub-sectors; and the Medium Term and rural areas. Until relatively recently, as Investment Plan (MTIP), which identifies the key described by Shahid Ahmad,1 `agriculture was programs and projects which should be characterized by low cropping intensity and undertaken by 2011, and which are designed to production dominated by low-water requirement achieve the initial objectives of the Strategy. crops like food grain (wheat, maize, sorghum, and As summarized in the background paper by millets, pulses, and oilseeds).... During the last SardarTariq and Shams-ul-Mulk, two of Pakistan's decade, however, the pressure on water has most eminent water practitioners, the core issues drastically increased, with more competition for emerging from these documents are: quantity and quality of irrigation water within the irrigation sector.'There is now the emergence of a l the desirability of attaining financial class of farmersknownas`progressive farmers', who sustainability are growing high-value crops for both domestic l defining clearly the water rights and and export markets, and who have leapfrogged entitlements both for surface water and out of the old `brute force' type of agriculture into groundwater `precision agriculture', in which water plays a l creating trust and transparency in equitable central role not just in evapotranspiration, but as water distribution and improving services a mechanism for delivering fertilizers and l rationalizing water charges and increasing pesticides to crops. Incipient as it is, there is already productivity evidence that this agricultural diversification is 1 Paper 5. 23 Pakistan's Water Economy transforming the countryside in many ways. As observer and social activist: `(In the) rural areas of in other parts of the world, this agricultural Pakistan...the subsistence economy has given diversification transforms rural life (and water way to a cash economy. Education has changed management) in many ways. High-value crops people's attitudes. New professions, business produce many more jobs per drop of water and and commerce have created new relationships per unit of land than traditional crops (fig. 3.1). and the "culture of poverty" is dead or dying. And they have deeper ripple effects into the rural Government inputs, however inadequate and badly implemented, have changed the physical and Fig. 3.1: Employment generation social environment. ...the changes that have by crop taken place, have created a new society and a new culture...'4 Rainfed Irrigated Second, there are major demographic and 300 250 economic changes taking place. Population growth ys da 200 (fig. 3.2) is very high--from 80 million people in 150 hectare 1980, the population will be 230 million in 2025. 100 ersonP per50 0 r Fig. 3.2: Population growth in a ut Pakistan crop Rice owaJ Bajr Wheat Pulses Cotton Spices Oilseeds 250 odderF Groundn 200 Source: Bhatia, 2005. 150 100 (millions) economy, both backward (since they demand more opulationP 50 inputs) and forward (since they give rise to a variety 0 of off-farm processing activities). These changes 1980 1990 2000 2025* are spurring substantial employment challenges Source: Siegmann and Shezad, 2005. within rural areas, with about 30 percent of people in rural areas already dependent on This means that aggregate water demands have non-agricultural sources of income.2 `Contract increased sharply and will continue to do so. farming', often led by progressive farmers, is likely Simultaneously, Pakistan is urbanizing rapidly-- (as it has in other countries)3 to be an important the percent of the population which lives in urban mechanism for bringing unified packages of areas has doubled over the past twenty years, and technology, services, and marketing, in making the the absolute size of the urban population has transition to high-valued agriculture, and in lifting increased by a factor of 3.5, going from 20 million large numbers of people--both those who stay in in 1980 to 70 million in 2000 (fig. 3.3). Associated agriculture and those who move into the associated with this urbanization is a rapid increase in the service sectors--out of poverty. role of manufacturing (fig. 3.4) which now In short, rural areas in many parts of Pakistan contributes about the same as agriculture to the are changing in fundamental ways, captured in GDP of Pakistan. Poverty declined during the vivid prose by Akhter Hameed Khan, the great 1980s but has stagnated until recently (fig. 3.5). 2 Edward Luce, `Cure for India's rural woes lies in ability to escape the farm', Financial Times, 7 December 2004. 3 For example Brazil, as documented in World Bank Water Resources Sector Strategy, 2003. 4 Arif Hasan, in John Briscoe, `Two decades of change in a Bangladeshi village', EPW, Vol. XXXVI, No. 40, 26 October 2001. 24 The Challenges of the Present and the Necessary Responses means that demands that could once comfortably Fig. 3.3: Urban population growth in absolute numbers be met at a local level will start having regional implications, and thus implications for other 80 sectors. All major cities of Pakistan, with the 60 exception of Islamabad and Karachi, depend on 40 tubewells which tap local aquifers for their raw Urban population (millions) water supplies. Lahore, for example, has 300 wells 20 that supply the city with water. This arrangement 0 1980 1990 2000 functioned well as long as the cities were small Source: Siegmann and Shezad, 2005. and the aquifers were not contaminated. But now the explosive growth in demand--which is expected to grow from 4 percent to 15 percent of Fig. 3.4: Proportion of GDP aggregate water demand in the next twenty in manufacturing years5--has meant that local aquifers are being 25 drawn down very fast. And more ominously, large ing 20 in quantities of untreated, often highly toxic munici- 15 actur pal and industrial wastes are being dumped in open GDP uf 10 % drains, and are leaching down into the aquifers. man 5 As discussed in more detail in the section on the 0 1980 1990 2000 environment later in this Report, more than 90 percent of municipal and industrial wastes are Source: Siegmann and Shezad, 2005. simply dumped, untreated, into the local aquatic environment with major consequences for the These changes of scale, location, and environment and human health now, and since composition have profound implications for water natural aquifercleansingtakes place over decades or management in the future. Most obviously they evencenturies, for very long periods into the future. will mean a Malthusian arithmetic, in which Finally, there is a growing understanding that growing demands will put unprecedented pressure there are major environmental needs for water-- on a limited quantity of available water. But it also in sustaining rivers, wetlands, and coastal areas, including the Indus Delta (discussed in the later Fig. 3.5: Prevalence of poverty section on the environment). As understanding in Pakistan and income grow, so these needs (still often Urban Overall Rural described as `wastage', as in `wastage to the sea') 50 will become important claimants on the ever- 40 scarcer resources of the country. 30 In summary, then, in the past water resources % 20 management in Pakistan was largely synonymous 10 with management of water for irrigation. While 0 1 4 9 2 irrigation will continue to use the majority of water ­9 ­9 ­9 ­0 in the foreseeable future, management of water 1984­85 1987­88 1990 1993 1998 2001 resources in Pakistan will become a much more Source: Qureshi, 2005. multisectoral affair. Water use for towns and industries will become a major local and regional 5 Paper 2. 25 Pakistan's Water Economy issue, and the use of water for environmental The Indus Basin depends heavily on the glaciers purposes will demand more water and more of the western Himalayas which act as a reservoir, attention. And issues of water quality will grow capturing snow and rain, holding the water and to be as important as issues of quantity. Water releasing it into the rivers which feed the plain. It managers in Pakistan should, like their counter- is now clear that climate change is already affecting parts in India, be bracing for a turbulent future.6 these western glaciers in a dramatic fashion (far more seriously, for example, than in the damper eastern Himalayas). While the science is still in its Preparing for Climate Change infancy, best estimates7 (fig. 3.6) are that there will be fifty years of glacial retreat, during which time There are strong indications that climate change river flows will increase. This--especially in is likely to affect Pakistan in a number of ways. combination with predicted more flashier There is much uncertainty about some, and little rainfall--is likely to exacerbate already serious uncertainty about other of these impacts. problems of flooding and draining, especially in Fig. 3.6: Accumulated effects of deglaciation on Indus river flows over ten decades Source: Rees et al., 2005. 6 Briscoe, John, and R.P.S. Malik, India's Water Economy: Bracing for a Turbulent Future, Oxford University Press, New Delhi, 2006. 7 Rees, Gwyn, and David Callins, `An assessment of the potential impacts of the Himalayas', Draft Report, HR Wallingford, April 2004. 26 The Challenges of the Present and the Necessary Responses the lower parts of the basin, in the next few l Deglaciation is going to result in inadvertent decades. But then the glacial reservoirs will be `mining' of the water banks of the Himalayas. empty, and there are likely to be dramatic decreases This isgoingtoresult in increased runoff (and in river flows--as shown in fig. 3.6, conceivably silt loads) for a few decades, to be followed by a terrifying 30 percent to 40 percent in the by major, permanent reductions in runoff. Indus Basin. Deglaciation is, of course, not the only way in Fig. 3.8: Predicted change in number of which climate change is likely to affect the rainy days from the `decreased rainfall' availability and timing of runoff in the sub- IPCC model continent. The Intergovernmental Panel on Climate Change (IPCC) uses ten General Circulation models, nine of which project that precipitation during the summer monsoon will increase substantially (fig. 3.7). Fig. 3.7: Change in South Asia summer rainfall predicted by nine General Circulation Climate Models 30 (%) 25 20 15 precipitation Source: IPCC. in 10 5 Change 0 Fig. 3.9: Predicted change in rainfall 1 2 3 4 5 6 7 8 9 intensity (in mm per day) from the Model `decreased rainfall' IPCC model Source: IPCC, 2004. The IPCC has used a regional model (curiously based on the one global model which showed reduced precipitation) to explore possible changes in the number of rainy days and in extreme rainfall in India (with obvious extrapolations to Pakistan). This model predicted a decrease in the number of rainy days (fig. 3.8) but substantial increases in extreme precipitation events (fig. 3.9). What does seem likely is that climate change will increase the variability of already highly variable rainfall patterns, requiring greater investments in managing both scarcity and floods. From this fog of information the following conclusions emerge very clearly: Source: IPCC. 27 Pakistan's Water Economy l Climate change is likely to substantially simultaneously inevitably means curtailing existing increase overall monsoonal rainfall in downstream uses.) Pakistan, but this is likely to be poorly The melting of the glaciers offers Pakistan a distributed in the sense that much of the window of opportunity, first, to make productive additional rainfall is likely to be in high- use of this `windfall', but also to understand that intensity storm events. this window should be used to prepare for the very l The area affected by flooding is likely to hard days, with substantial flow reductions in the increase substantially in the coming decades Himalayan region, which lie ahead. as the glaciers melt and as rainfall intensity While the exact shape of the future climate increases. regime is uncertain, it is very likely that there will l Water scarcity is forecast to become be greater variability--both of droughts and widespread in Pakistan in a future which is, floods. As was shown in a detailed examination given the fact that changing water use habits by the National Atmospheric and Oceans takes decades to effect, just around the Administration of US water practices, the best corner. The next several decades offer a preparation for managing unpredictable future window of opportunity, in which there is changes is to put in place a water resource likely to be more water, to prepare for a future infrastructure and management system which is in which the quantity of water available is driven to a much greater degree by knowledge likely to be substantially reduced. (including but not limited to hydrologic knowledge), and which is designed and operated What, then, are the implications of these to be much more flexible and adaptive. changes? Despite the many uncertainties, they Flooding, which already affects substantial areas include: a need for large investments in water of Pakistan (including areas in and outside of the storage. As described earlier, Pakistan actually has Indus Basin), has yet to be effectively addressed. relatively little capacity to store water. For example, Pakistan is only now starting to explore the whereas there is about 900 days of storage capacity combinations of `hard' interventions (to protect on the Colorado and Murray-Darling rivers, there high-value infrastructure) and `soft' interventions is only about 30 days of storage capacity in the (smart adaptation to living with floods, including Indus Basin. Accordingly, major investments need changing land use patterns and cropping patterns, to be made to increase capacity to store water, in and construction of emergency shelters for people both surface water and groundwater reservoirs, in and animals), which have been used to projects small (such as local rainwater harvesting) considerable effect in countries as diverse as the and big (such as large dams). In so doing, however, United States8 and Bangladesh,9and are globally- there is a need for concomitant adoption of quite accepted best practice. different development and management strategies. It must be understood that storage projects should Adapting to Scarcity: An primarily be for improving the reliability of Imminent `Water Gap' supplying existing demands and for meeting historically deprived environmental uses, and not Pakistan is close to using all of its available water for creating and serving new demands (which resources in most years. Shahid Ahmad10 has 8 Miller, Barbara A., A. Whitlock, and R.C. Hughes, `Flood Management--theTVA experience',Tennessee Valley Authority, Oak Ridge, 1998. 9 Ainun Nishat, powerpoint presentation on flood management in Bangladesh, World Bank Water Week, 2005. 10 Paper 5. 28 The Challenges of the Present and the Necessary Responses summarized the situation as follows: `The long- monitoring of the resources or the abstraction and term sustainable average annual net inflow of the should be treated with caution. Other evidence, Indus Basin is 175 billion m3. Canal diversions such as increasing salinity of groundwater due to over the same period have averaged 128 billion m3, redistribution of salts in the aquifer and declining with an average of 35 billion m3 flowing water levels, suggests that there is little, if any, downstream of Kotri Barrage to the sea...'. In a further potential for groundwater exploitation.' system with little storage and considerable The bottom line is clear--Pakistan is currently variability, however, averages can be deceptive-- close to using all of the available surface water and fig. 3.10 shows, again in Ahmad's words, that groundwater, yet it is projected that over `Pakistan is now essentially at the limit of its surface 30 percent more water will be needed over the next water resources.' twenty years to meet increased agricultural, Similarly, on groundwater:11 `Estimates of domestic, and industrial demands (fig. 3.11). groundwater availability have been made in several studies, and average around 63 billion m3. Getting more Product per Drop: Abstraction of groundwater for irrigation and for urban and rural drinking water supplies is The `Performance Gap' estimated as about 52 billion m3. While these figures may suggest some potential for further There are several corollaries to the fact of looming exploitation, they are based on very little actual water scarcity in Pakistan: the focus of attention Fig. 3.10: Annual canal diversions and `escapages to the sea' 200 150 (MAF) 100 ws Flo 50 0 1975­76 1979­80 1983­84 1987­88 1991­92 1995­96 1999­2000 2003­04 Years Existing canal diversion Escapages to the sea Source: The World Bank analysis. 11 Paper 5. 29 Pakistan's Water Economy overall water availability and production. As shown Fig. 3.11: Projected demand for water in fig. 3.13, drought has a dramatic impact on 160 production in non-irrigated areas, but remarkably 140 120 Industry 100 Municipal and Fig. 3.13: Drought effect on yields 80 rural water supply MAF 60 3.000 Agriculture at the Pre-green Post-green 40 Green farm gate 2.500 revolution revolution revolution+ 20 0 2.000 2003 2025 1.500 Source: Hasan, 2005. 1.000 0.500 Drought Drough will have to shift from productivity per unit of land 0.000 to productivity per unit of water, and the major Wheat yield (Mt/Ha) challenge will be to get more from less--more Punjab Sindh NWFP crops, more income, more jobs per unit of water. Balochistan Pakistan A basic point of departure is that there is abundant evidence that irrigated agriculture in Source: The World Bank, 2003. Pakistan is not efficient. As shown in fig. 3.12, a comparison of wheat yields in California (USA), little impact in irrigated areas. This is confirmed in fig. 3.14, which shows the very modest impact of drought on irrigated crops and, indeed, by the Fig. 3.12: Wheat yields per unit of land and water production figures for April 2005. Despite an unusually dry monsoon season (with Tarbela not 8 1.2 filling for the first time) and despite some drastic 7 Tons/ha yield kg/m3 1 prognostications of production levels as low as 6 0.8 12 million tonnes, Pakistan has had a bumper 5 wheat crop: overall production was 22 million 4 0.6 meter 3 tonnes, 10 percent higher than the government's ons/haT 0.4 2 target.12 These data suggest that irrigation is 0.2 kg/cubic 1 obviously vital for high and stable levels of crop 0 0 production, and that a lot more efficiency (`crop Imperial Valley, Bhakra, Punjab, USA India Pakistan per drop') can be squeezed out of the system. As pointed out by Shahid Ahmad,13 `the most Source: Ahmad, 2005. important basic principle in irrigation is to deliver a reliable supply of water. In an uncertain the Indian Punjab, and the Pakistani Punjab shows environment, farmers will not invest in seeds, that productivity in Pakistan relative to India and fertilizers, and land preparation, and consequently California is about 3:6:10 per unit of land, and yields and water productivity will suffer. A second about 5:8:10 per unit of water. basic principle has to do with timing. At various A second important macro perspective emerges times in a crop's growth cycle, water stress can from data analyzing the relationship between be particularly damaging'. In principle water 12 `Minding the wheat market', Editorial, Dawn, 14 April 2005. 13 Paper 5. 30 The Challenges of the Present and the Necessary Responses Fig. 3.14: Crop production and drought 115 70,000 110 105 Canal Diversion 100 60,000 95 90 85 50,000 Sugarcane 80 75 Onset 70 40,000 65 eetF ons)T 60 Drought 30,000 55 Acre Total Food Grain 50 (000 45 20,000 Million 40 Wheat 35 30 10,000 25 Rice 20 0 15 Cotton 10 5 ­10,000 0 1990­91 1991­92 1992­93 1993­94 1994­95 1995­96 1996­97 1997­98 1998­99 1999­00 2000­01 2001­02 2002­03 Years Source: The World Bank, 2003. entitlements for all users of an outlet are equal Fig. 3.15: Crop yields for head- and under the warabandi system; in fact numerous tail-enders studies have shown that there is a high degree of maldistribution which favors head-enders and Tail Head discriminates against tail-enders, with serious 6 implications for equity and productivity. Within 5 watercourses, tail-enders typically get about 4 20 percent less water than those in the middle, 3 who in turn get about 20 percent less than head- 2 1 enders.14 Figure 3.15 shows how head-enders 0 systematically do much better than tail-enders, and Wheat IRRI Rice Basmati Sugarcane fig. 3.16 shows that there could be major overall Rice (x10) production gains by re-distribution of water Source: Qureshi, 2005. currently used in excess by head-enders. A detailed analysis by IWMI15 (fig. 3.17) shows Punjab is substantially worse than it is in the Indian that inequity in water distribution in the Pakistani Punjab. At the high productivity end, farmers in 14 Paper 2. 15 International Water Management Institute Research Report No. 65. 31 Pakistan's Water Economy productivity of Pakistan's irrigation systems. When Fig. 3.16: Returns to irrigation location in a canal these supply uncertainties are resolved, the impacts on productivity can be very large: the productivity 9000 of water from tubewells (available on demand) is 8000 7000 twice that of canal water.16 (Rs/ha) 6000 For these reasons, there is broad agreement 5000 4000 that `the most promising intervention is to Income 3000 2000 provide equitable water distribution to the Net 1000 head- and tail-end reaches',17 with the issues of 0 Head Middle Tail transparent administration of water entitlements, and accountable, efficient provision of irrigation Source: Bhatia, 2005. services again being key elements. There is also growing evidence that different water application regimes could greatly increase Fig. 3.17: Differences in wheat yields the amount of `crop per drop'. Studies conducted across distributaries by PARC and IWMI indicated that extensification 8 rather than intensification could greatly increase 6 5.73 5.89 productivity. As shown in fig. 3.18, deficit and 4.39 4.68 Indian (t/ha) supplemental irrigation produce much higher 4 Punjab 2.96 3.19 ieldY returns per unit of water compared to complete 2 irrigation under farmers' practices and rainfed 0 farming systems. The deficit and supplemental Batta Rohera Distributary location irrigation had increased the water productivity Maximum Mean Minimum two- to three-folds compared to rainfed systems.18 8 7 6 Pakistani 5 Fig. 3.18: Yield and water productivity (t/ha) 4 Punjab of wheat under different irrigation ieldY3 2 scheduling strategies 1 0 tons/ha kg/m3 Lallan Khadir FAO 5 2 Distributary location 4.5 1.8 4 1.6 Maximum Mean Minimum 3.5 1.4 3 1.2 2.5 1 Source: IWMI, 2003. ons/haT 2 0.8 Kg/m3 1.5 0.6 1 0.4 0.5 0.2 Pakistan are doing at least as well as farmers in 0 0 Rainfed Farmers' Full Deficit India, but the spread between high- and low-yields Practice Supple- Supple- is much greater in Pakistan, due in part to more mental mental Irrigation Irrigation unequal water distribution.These inequalities play an important role in the explanation of the lower Source: Ahmad, 2005. 16 Paper 5. 17 Ibid. 18 Ibid. 32 The Challenges of the Present and the Necessary Responses In situations of water scarcity, however, it is it is not appropriate to consider very leaky systems important to look at productivity not just in terms to be `fine', especially as aquifer depths increase. of units of water applied, but to take into account (c) Economic productivity: If `the prices-- that return flows to sweetwater aquifers are not including those relating to externalities--and `losses', but water that is still available for other incentives are right' then the summation of all uses and users. (This is a concept that has long costs--water, energy, and those of greater precision been applied in the subcontinent--for example, in the application of these and other inputs--are in the 1950s Indus Waters Treaty discussions of all summed up in the economic value of a crop the net effects of upstream abstractions in Kashmir and it is thus the `economic return' criterion which on the availability of water from the Jhelum and is the appropriate one in assessing the efficiency Chenab.19) of different regimes. Consider the basic arithmetic of local water Shahid Ahmad's background paper20 looks at balances under equilibrium as shown in the the issue of water productivity from the Et equation below: perspective. The major findings include: Applied water = consumed water + non-consumed l There is considerable loss of water due to water inefficient irrigation application at the field Consumed water = beneficial evapotranspiration level. Because of poor surface irrigation + non-beneficial evapotranspiration hydraulics and unleveled fields, farmers apply enough water to cover the highest spot Non-consumed water = water recharging the in the field. The result is not only excessive aquifer + water returning to streams non-beneficial Et, but also loss of nutrients Now consider three issues of productivity-- especially nitrates, and pollution of the water productivity, energy productivity, and groundwater with these excess applications economic productivity. of agricultural chemicals.This is a particular (a) Water productivity: In simplified terms the problem in the canal commands which have basic objective of increasing productivity of water high Authorized Canal Water Allowances. is: l There is much non-beneficial Et due to l in sweetwater areas--the measure of water weeds, shrubs, and plants that grow along productivity is to maximize the proportion the waterways, weeds in fallow fields, and of consumed water which goes to beneficial vegetation in wastelands. As the weed evapotransipration (Et) (and minimize the infestation is very high in the Indus Basin, it proportion due to non-beneficial Et.) is expected that almost 20­30 percent of l in saline areas--here water which goes to the water is consumed by weeds and thus aquifer is no longer of any use, and therefore regarded as non-beneficial Et. the objective is to reduce the sum of water l Watercourses are the main source of weed lost to non-beneficial evapotranspiration and seeds to the fields. Weeds grown along the water which is added to the saline aquifer. watercourse shed seeds which ultimately (b) Energy productivity: Canal water which reach the field through the irrigation water. infiltrates into sweetwater aquifers is not lost, but Weeds in cropped fields not only reduce crop it takes energy to lift the water again. And therefore yield but also consume water. All weeds 19 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973. 20 Paper 5. 33 Pakistan's Water Economy should be regularly eradicated as part of the p reusing return flows--by integrating watercourse maintenance activity, something crops, forest plants, forages, and that will be substantially improved as part of aquaculture into land use to utilize the major national program for watercourse different qualities of water in a lining. sustainable manner l Et studies were conducted by IWMI and PARC using remote sensing techniques in There is agreement among agronomic and areas where drought had positive impacts in water professionals that the overall productivity reducing waterlogging and increasing of the IBIS could be improved by reallocating productivity. These studies showed that water from areas where production per unit of over-irrigation is a common practice in water lossishigh.Aspointedout by Shahid Ahmad: southern Punjab and Sindh. Evaporation `reallocation will generally be difficult between the from fallow fields and waterlogged areas provinces as the water apportionment and increases non-beneficial Et and contributes rights are well defined. However, there is to accumulation of salts in the surface soil. a possibility that each province looks into Authorized Canal Water Allocations of various l The major implications are that there can be major reductions in non-beneficial Et by: canal commands and reallocates water allowance based on evapotranspiration, cropping pattern, p reducing evaporation from water applied to irrigated fields through improved and cropping intensity to have sustainability on irrigation technologies such as precision long-term basis. This will dramatically increase land leveling and furrow irrigation in the the economic productivity of water, both under IBIS, and drip irrigation in areas where the deficit and excess canal commands.' As water is at premium, and, as shown in discussed elsewhere in this Report, the use of such fig. 3.19, introduction of modern technocratic discretion would fly in the face of agronomic practices such as residue the single-most important need in the system, farming using zero-till planting, namely to reduce discretion and to put in place mulching of fruit plants, or changing systems which make entitlements inviolable, and crop planting dates to match periods of which reduce the application of administrative less evaporative demand discretion. Fortunately, there is another way of moving towards the desired goal of greater p reducing evaporation from fallow land by decreasing area of free water surfaces, productivity. decreasing non-beneficial or less- beneficial vegetation, and controlling Fig. 3.19: Production (kg/cubic meter of weeds water) under different agricultural practices p minimizing salinization of return flows--by minimizing flows through 1.6 saline soils or through saline ground- 1.4 1.2 water to reduce pollution caused by 1 the movement of salts into recoverable 0.8 0.6 irrigation return flows 0.4 0.2 p shunting polluted water to sinks--to 0 avoid the need to dilute with fresh water, Zero Laser Conventional Tillage Leveling saline or otherwise polluted water should be shunted directly to sinks Source: Amir, 2005. 34 The Challenges of the Present and the Necessary Responses Pervaiz Amir, in his background paper on describes the ways in which distortions in public agriculture,21 has outlined the appropriate way to subsidies can give rise to absurd water use patterns encourage such efficiency gains. Entitlements (in this case in the sugar industry). (based on historic use) are, to a large degree, It is apparent that water (not land) is the main established for the major parts of the Indus Basin constraint, and there is growing attention to the system.There should be no command-and-control quite different water requirements of different overriding these entitlements, even in the case of crops (fig. 3.20). An acre of sugarcane, for example, greater productivity. What there should be, consumes as much as eight times the water needed instead, is an aggressive effort to make clear to by wheat. Increased attention is accordingly now both those who have too much water and those being given to producing crops that can yield more who have too little, how reallocation (perhaps with less water, withstand water-scarce and initially as a lease and eventually as permanent drought conditions, and thrive on low quality transfers) might benefit both parties, and then (saline/alkaline) water,23 and to the effect encourage water trades (with willing buyers paying of different agronomic practices on water willing sellers). Such trades would logically start productivity. within specific canal commands, but then expand Successful reforms in the water sector need, to trades between canal commands, and eventually therefore, to be accompanied by simultaneous trades between provinces. improvements on the agricultural side, in Finally, crop productivity obviously depends on production techniques, marketing efficiencies, and much more than just the supply of water. Box 3.1 in research, education, and extension.24 There is a Box 3.1: How other distortions affect the water economy--the case of sugarcane (from the background paper by Imran Ali22) `The linkages between industrial needs and impacts and water quality and supply can be seen in the case of the sugarcane. Starting with one sugar mill in 1947, Pakistan now has over 80. Sugar mills are often a reward for political services and support. A large number are owned by politically important elements and owe their existence to political gratification. Also, in the 1990s the Nawaz Sharif government induced financial institutions to extend loans for sugar mills, to which Sharif's Ittefaq Foundries was a capital goods supplier. Sugar also seemed a relatively uncomplicated form of earning industrial rents. The Pakistani consumer had to subsidize the processor, since international sugar prices traditionally remained below domestic prices. However, beyond a low percentage of total cropped area, sugarcane production is not ecologically suited to an arid region like the Indus Basin. Now, farmers need, or want, to grow enough sugarcane to feed 80 mills, creating excessive demand on both surface and tubewell water. Areas with critically low groundwater levels have large standing crops of sugarcane (as well as rice, the other water intensive crop). Shortfalls in sugarcane supply would create a crisis in the sugar industry, which has the second highest capitalization in the Pakistani stock market, as well as politically eminent stakeholders. Additionally, effluents from sugar mills are a significant source of water pollution, which is affecting human and livestock health. Clearly, on specific issues there are complex options facing the administration, involving trade-offs between environmental, hydraulic, social, agronomic and industrial priorities.' 21 Paper 12. 22 Paper 9. 23 Paper 5. 24 Paper 9. 35 Pakistan's Water Economy which is changing the water supply system so that Fig. 3.20: Cubic meters of water to produce a ton of produce it meets the predictability, transparency, and flexibility required for a modern and much more 16000 productive agricultural system. 14000 12000 10000 Narrowing the `Trust Gap' 8000 6000 4000 One of the defining issues in contemporary 2000 0 Pakistan water management is the pervasive lack e y of trust, at all levels.25 Milk Rice Maiz It is, again, useful to start with the Indus Basin otatoesP Wheat ybean oultrP Eggs Beef So Cheese Sugarcane treaty, both because of its direct importance to Pakistan, but also because of the model it provides Source: Hoefstra, 2003. in reducing mistrust. The Indus Waters Treaty shows very clearly that a well-defined set of vital public sector role in the production of these entitlements, which are monitored by both `public goods'. But experience in other countries stakeholders, and which have clear enforcement which have undergone recent agricultural mechanisms, can provide a high (not perfect) level diversification (such as Chile, Brazil, and Mexico) of trust, even when the parties involved have has shown that the private sector can play an literally gone to war several times. The IWT is a equally important role. As Pervaiz Amir has great example of how `good fences make good described: `an important driver for higher water neighbors'. efficiency and farm productivity will be Now consider the parallel issue between establishment of hi-tech modern farms with provinces in Pakistan. As described earlier, the international cooperation that show the modern 1991 Water Accord is an enormously important way. Exposing industry leaders to opportunities achievement.There remain a number of important of joint partnership can help bring new issues on which agreement needs to be reached, biotechnology, efficiency based systems thinking including how to share flows under drought and international marketing perspective to a larger conditions, how much water to allocate to the segment of the farm community.' delta, and how to manage the demands from some In summary, improving the productivity of provinces.There is also a need for putting in place water used in agriculture is a central challenge a modern conflict resolution mechanism. These facing a water-scarce Pakistan. (As pointed out by caveats notwithstanding, the Accord is basically Shahid Ahmad, since the water required to grow sound and should be implemented in its present enough food for one person--between 3,000 and form. But what has happened? 5,000 cubic meters a year--is about 100 times Fifteen years after the Accord was signed there the amount required for household purposes [100 is still not a sound organization equipped with lpd or about 35 cubic meters a year], urban the right instruments that would give all parties demands are important locally but not at a confidence that the Accord is being implemented national scale.) Confronting this challenge will transparently. This is a deplorable missed require actions on multiple fronts, not least of opportunity, because it has caused mistrust to 25 Described in many of the background papers done for this study. 36 The Challenges of the Present and the Necessary Responses fester and to corrode a host of water-related and auditor.) Third, reporting must be totally other issues between the provinces. The irony is transparent and available in real time for all parties that, with the Accord in place, this is so easy to fix! to scrutinize. Similar accords in other countries--the The great frustration in Pakistan is that, given Colorado Compact in the US and the Murray- the Accord, this is so easy to do and yet it has not Darling Agreement in Australia--show that yet been done. The central function of IRSA (see once there is a clear agreement, there are three box 3.2) is to be this auditor and `river master', fundamental implementation requirements. First, but it acts more like a political body and does not that a rigorous, calibrated system for measuring do this task. For years now a telemetric system for water inflows, storages, and outflows be put in automatic measurement of flows into and out of place. Second, that the measurement system be the main barrages and control structures has been audited by a party which is not only scrupulously `under implementation', but there is always independent and impartial but is seen to be so by something that does not work (further fueling all parties. (In the case of the Colorado the Federal belief that the lack of transparency in the system Department of the Interior is the `river master'; is being manipulated for nefarious purposes). in the Murray-Darling system, an individual There is no higher priority for water management from Western Australia is retained as the water in Pakistan than to move aggressively in putting Box 3.2: The Indus River System Authority (1992) The Water Accord necessitated the creation of an Indus River System Authority (IRSA) for its implementation. The Authority was established in December 1992. It consists of 5 members, one each to be nominated by each province and the federal government from amongst engineers in irrigation or related fields. The first Chairman was the member nominated by the Government of Balochistan, to be followed by the nominees of the Governments of NWFP, Punjab, and Sindh, and the federal government, and thereafter in the same order. The term of office of the Chairman is one year. The functions of the Authority are as follows: n Lay down the basis for the regulation and distribution of surface waters amongst the provinces according to the allocations and policies spelt out in the Water Accord; n Review and specify river and reservoir operation patterns, and periodically review the system of each operation; n Coordinate and regulate the activities of WAPDA in exchange of data between the provinces in connection with the gauging and recording of surface water flows; n Determine priorities with reference to sub-clause © of clause 14 of the Water Accord for river and reservoir operations for irrigation and hydropower requirements; n Compile and review canal withdrawal indents as received from the provinces on 5-daily or, as the case may be, on 10-daily basis and issue consolidated operational directives to WAPDA for making such releases from reservoirs as the Authority may consider appropriate or consistent with the Water Accord; n Settle any question that may arise between two or more provinces in respect of distribution of river and reservoir waters; and n Consider and make recommendations on the availability of water against the allocated shares of provinces within three months of receipt of fully substantiated water accounts for all new projects for the assistance of the Executive Committee of National Economic Council (ECNEC). Source: Paper 6. 37 Pakistan's Water Economy in place a totally transparent, impartial system for part. The irrigation department keeps detailed implementation of the Accord. records of the entitlements for each season of the This situation is mirrored within the provinces. amounts of water actually delivered, and of the As described earlier, one hugely important part of `balances' for each canal command. (For example, the Accord was that it formalized the entitlements as can be seen in the first few entries for the current for the 24 canal commands in Punjab, the 3 season, a number of canal commands did not wish major barrages in Sindh, the 2 barrages serving to receive their full shares, but they get `credit' for Balochistan, the 5 canals serving NWFP.26 this, and can use these saved amounts later in the Consider the case of Punjab as an example. The season.) This system is very close to something allocations to the 24 canal commands are specified that would be ideal. The one big missing piece is for 10-daily periods in both the kharif and rabi the transparent and verified implementation of the seasons in the annex to the Accord (fig. 3.21).27 allocations. And here, again, lack of transparency And the administrators of the allocation system means that there is discretion, discretion which in Punjab apparently respect these, for the most corrodes belief in the fairness of the system. Many Fig. 3.21: Punjab canal entitlements from the 1991 Water Accord 10-Day Seasonal Systemwise Adjusted Allocations 1 of 8 E1 (Excluding Flood Flows & Future Storages) Punjab­Kharif Period F.I.C. M.R. CBOC S.Y.C. S.V.C Trimmu Panjnad Thal Taunsa CABC Greater Total INT (Upper) (Lower) Thal (1000 × Cs) Apr 1. 24.2 0.1 1.8 8.3 3.9 2.9 4.3 6.0 4.9 1.3 2.6 60.3 2. 24.7 0.3 1.8 10.8 3.7 3.4 5.1 6.4 4.3 0.18 3.4 64.7 3. 28.1 1.1 2.0 13.3 5.5 5.5 7.3 6.4 7.9 0.5 4.9 82.5 May 1. 30.1 1.3 2.1 16.0 8.0 5.9 7.6 6.6 10.0 0.7 5.4 93.7 2. 30.8 2.0 2.1 17.2 8.7 6.1 9.0 6.8 11.5 1.1 5.5 100.8 3. 31.6 2.4 2.2 18.1 9.2 6.3 9.5 6.8 11.9 1.3 5.5 104.8 Jun 1. 32.3 2.6 2.3 18.5 9.4 6.6 10.5 6.8 13.0 1.7 5.4 109.1 2. 33.2 3.6 2.2 18.7 9.7 6.7 10.4 6.9 13.5 1.8 5.5 112.2 3. 34.0 4.0 2.2 19.2 9.6 6.7 10.7 6.7 14.0 1.8 5.7 114.6 Jul 1. 32.7 5.4 2.2 19.2 9.9 6.6 10.4 6.6 14.3 1.7 5.8 114.8 2. 29.6 6.0 2.0 17.9 8.7 5.7 0.0 6.3 12.5 1.7 5.1 104.4 3. 27.8 6.1 1.8 16.8 8.7 5.1 9.6 6.8 11.8 1.8 4.7 100.0 Aug 1. 28.2 5.8 1.7 17.4 8.2 5.3 9.6 6.0 11.5 1.8 4.8 100.0 2. 31.5 6.1 1.8 19.3 9.3 6.3 10.6 6.3 11.3 1.8 5.4 109.7 3. 34.6 4.9 2.0 20.6 10.1 6.8 11.1 6.6 13.9 1.8 5.9 118.3 Sep 1. 33.9 4.4 2.1 21.0 10.0 6.8 11.1 6.8 14.4 1.8 5.9 118.2 2. 33.9 3.7 2.1 20.6 9.8 6.8 10.8 6.8 14.0 1.8 5.8 116.1 3. 33.1 2.3 2.2 19.6 9.9 6.9 11.0 6.8 13.0 1.8 5.5 112.0 Total MAF 11.18 1.24 0.74 6.31 3.07 2.15 3.40 2.37 4.19 0.55 1.87 37.07 Source: Government of Pakistan, 1991. 26 Indus River System Authority, `Apportionment of Waters of Indus River System between the Provinces of Pakistan: Agreement 1991 (A chronological expose)', undated. 27 Ibid. 38 The Challenges of the Present and the Necessary Responses officials, including those at senior levels, honestly farmers on the state agencies, is at the heart of the try to implement the water according to water rights issues in Pakistan. All disputes stem entitlements. But they are under a variety of murky from the crisis of confidence. The small and and non-transparent pressures to tweak the system, medium farmers have the apprehension over the to use discretion for a variety of opaque reasons. large farmers of using more water. The small and These officials are the strongest advocates for medium farmers have an understanding that the moving to verification and transparency at irrigation department is not equitably distributing all levels. the water, therefore, providing more water to the In some cases, however, what is happening is influential farmers. Therefore, there is a need to not `tweaking' but wholesale destruction of the develop the confidence building measures at all discipline on which the system fundamentally the levels. Delays in justice and poor accountability depends. In his background paper Sarfraz have also shaken the confidence of the farmers on Qureshi28 describes the existence of a large number the state agencies.' of uncontrolled direct outlets (DOs) in the Nara It is obvious that Pakistan faces a series of serious Canal in Sindh. `These are outlets which draw natural challenges in managing its water resources. water directly from the main canals that often have As described by Siegmann and Shezad, it is, in no outlet control (gates for example, and where fact, the human-induced uncertainties that are of these exist they are not easily controlled by the greatest concern to common farmers: `the ID). These types of outlets are illegal under the availability of water for irrigation often varies 1873 Irrigation Act, but have been permitted and during the season (despite efforts to improve a majority has been accorded official sanction over forecasts, there are no guarantees), but this the years. The cumulative effect of the steady variability and uncertainty does not seem to be increase in these DOs has been to increase the the primary issue with farmers--transparency and command area of the Nara Canal by more than timely information, participation in decisions 30 percent making it impossible to distribute water about what to do when there are shortages, and to large areas in the tail portion of the canal delivery on whatever is agreed, are the more command area without a major increase in important issues.' Or in the words of Faizul Hasan: diversion and a change to a rotational method of `Farmers generally understand the natural water distribution among the distributaries since variability of their main source of water supply, outlet discharges become unreliable if the flow in the Indus River, but want to know what their share the canal is outside the range of about 70­110 is and when it will be delivered--with this percent of design discharge.' It is common information they can make good or at least knowledge that large amounts of money change informed and lower risk decisions on how best to hands for the sanctioning of these direct outlets. use both the water and their land (and possibly This paradox of a basically sound allocation respond more appropriately to incentives).' system being administered without transparency The overall situation and some of its and accountability is replicated down below the ramifications are summarized by Pervaiz Amir in canal commands and into the distributaries, his background paper: `The lack of transparency outlets, and watercourses. As described in the in information sharing and hiding data that background paper by Faizul Hasan: `Lack of trust should be in the public domain has created an among various users, especially mistrust of small environment of distrust and despair. Unless the farmers on the large farmers and mistrust of the grievances in relation to water entitlements, 28 Paper 1. 39 Pakistan's Water Economy distribution, and governance are addressed in a inexorable rise of the water table (from an average comprehensive manner, dams or even other large of about 80 feet in 1900 to 10 feet a century later, scale water infrastructure projects will be blamed shown in fig. 3.22) and the mobilization of large for all the shortcomings in water sector.' amounts of salt, as hundreds of billions of cubic In the shadows of discretion and lack of accountability, of course, lurk all sorts of Fig. 3.22: Irrigation expansion and interests--of powerful people who manipulate the groundwater levels system for their ends, and of those in the 45 0 bureaucracies who serve them and are rewarded 40 Cultivable area ­10 (ft) for this service. The amounts of money that acres) 35 Groundwater table ­20 circulate in service of these distortions are very 30 (m ­30 depth 25 large, and those who benefit from it will not easily ­40 area 20 ater ­50 acquiesce to changes. But there is a widespread 15 10 ­60 sense in Pakistan that this has now gone too far igated 5 ­70 Irr Groundw for too long, and there would unquestionably be 0 ­80 1900 1915 1934 1947 1963 2001 2004 massive support for politicians who ensured that entitlements were made public, and that there was Source: IWASRI/WAPDA, 2004. unimpeachable information publicly available on who is getting what. Modern measurement and meters of surface water were stored in the aquifers. computer technology makes it much easier to do The result was large-scale waterlogging and this today. In the words of an astute observer of salinity, but also the ready availability of large similar problems in India: `an entire range of amounts of groundwater which could be used to activities which normally incubate corruption can supplement canal water supplies. And so in the be made transparent through the intervention of 1960s extensive groundwater exploitation got technology... The government must concentrate under way, a process which has continued on enabling technology to overarch human unabated until the present. venality, andempowertheordinaryperson to access The 1960s saw the start of the era of large-scale and monitor the availability of services directly'.29 groundwater exploitation. As described in the background paper by van Steenbergen and Gohar,30 over 600,000 private tubewells have been Maintaining the Resource sunk. It is estimated that 75 percent of the increase Base--Groundwater in water supplies in the last twenty-five years is to be attributed to public and private groundwater As described earlier, the initiation of large-scale exploitation (fig. 3.23). The investment on these irrigation in the Indus plains started a large, and private tubewells is of the order of 30­40 billion still on-going transformation in the hydrogeology rupees, whereas the annual benefits in the form of of the basin. First there was the injection of agricultural production are estimated at 200 hundreds of billions of cubic meters of water into billion rupees, roughly equivalent to 5 percent of the aquifers, quantities of recharge which far GDP. In addition, most towns and many industries exceeded the subsurface horizontal drainage rely for their water supply on groundwater. To a capacity of the aquifer system. This led to an large degree this groundwater system has become 29 Pavan K. Varma, Being Indian, Penguin, 2004. 30 Paper 11. 40 The Challenges of the Present and the Necessary Responses the injection of massive amounts of seepage into Fig. 3.23: The growing role of groundwater irrigation the aquifers, but still of very little use of groundwater. Stage 3 started in the 1960s, and Canal Groundwater involved the application of new technologies on a 120 massive scale for the exploitation of groundwater. eary 100 Stage 4 started some years back in the barani areas per 80 (where recharge is much smaller), and is now eetf 60 starting in the main Indus Basin. It is a stage in acre 40 which the primary challenge becomes preserving the resource base--the groundwater--on which 20 Million so much life and wealth now depends. As shown 0 for the Punjab in figs. 3.24 and 3.25, groundwater 1960 1967 1977 1985 1991 1999 is in balance in the kharif season, but now Source: Steenbergen and Gohar, 2005. systematically negative in the rabi season, meaning that groundwater is being mined and water tables the primary storage mechanism used to distribute must fall. And the levels are indeed falling available water between the monsoon (Kharif) and (fig. 3.26) dry season (Rabi).31 The management challenge is to stabilize the It is useful to consider the history of groundwater table at levels where the cost of groundwater development in Pakistan in three pumping is not prohibitive (see fig. 3.27) and in stages. Stage 1 was the pre-canal era of deep and which primary attention is given to understanding stable water levels, in which only small and local and managing the quality--and especially the use was made of groundwater. The main feature salinity--of the aquifers. Although groundwater of Stage 2, starting in the nineteenth century, was levels are already very deep in some barani areas Fig. 3.24: Punjab water balance: normal year (MAF) Recharge Discharge 50 50 Loss from storage Recharge from 40 40 River Base flow to rivers Return flow from 30 30 GW20Abstraction Non-beneficial Recharge from 10 20 ET losses Irrigation System Recharge from 10 Groundwater Rainfall Abstraction (Public + Private) 0 0 Source: Steenbergen and Gohar, 2005. 31 Paper 5. 41 Pakistan's Water Economy Fig. 3.25: Punjab water balance: drought year (MAF) Recharge Discharge Loss from storage 50 50 Recharge from Rivers 40 40 Base flow to rivers Return flow from GW Abstraction 30 30 Recharge from Non-beneficial ET 20 20 Irrigation System losses Recharge from 10 10 Rainfall Groundwater Abstraction 0 0 (Public + Private) 1 Source: Steenbergen and Gohar, 2005. (farmers are drilling wells to 1,000 feet in the fruit- people and the state. The failure to manage growing Pishin district of Balochistan), in the groundwater in the barani areas is a salutary plains groundwater tables are still fairly shallow warning. As described by van Steenbergen and (fig. 3.28), something which good management Gohar:32 `Overuse of groundwater is dramatic in would aim to preserve. In none of the past stages some of the barani areas of Pakistan... (with) have conscious management played any role in orchards in Balochistan being dismantled and by the fate of the aquifer. In Stage 4 it is precisely the out-migration, destabilizing a region that is already ability to consciously manage the aquifer which volatile by nature and location.... the constant constitutes a huge and quite new challenge to the overuse of groundwater in the last decades has Fig. 3.26: Declining groundwater table Fig. 3.27: Effect of the depth to the in Punjab water on last of pumping Water Table Decline in SGW Zone of Chaj Daob 1400 1998­2001 Total cost (Rs) 1200 0 Construction cost Oct- Mar- Jun- Oct- Mar- Jun- Oct- Dec-Apr- AF 1000 Energy cost 98 99 99 99 00 00 00 00 01 ­5 per 800 eet SZ- I le-f cost 600 ­10 SZ - II tab 400 SZ - III ater ­15 200 W Pumping 0 ­20 0 10 20 30 40 50 60 70 80 Period Average water table depth (ft) Source: Steenbergen and Gohar, 2005. Source: Steenbergen and Gohar, 2005. 32 Paper 11. 42 The Challenges of the Present and the Necessary Responses fallen at more than half a meter a year for the last Fig. 3.28: Depth of water table by province thirty years, resulting in a cup-shaped depression prone to the migration of saline groundwater. >10 ft 5­10 ft <5 ft Global experience suggests several things about managing scarce groundwater. First, it is a very 100% difficult task, even under good governance 80% conditions. Second, it requires changes in several area 60% related areas, including legal and administrative. 40% Of particular importance (and sensitivity), it ercentP 20% means that the rights of individuals to pump as 0% much water as they wish from their land have to be curtailed. Water rights have to be vested in the NWFP Sindh Punjab akistanP state, with individuals then given entitlements Balochistan (usually related to historic use) to pump specific volumes.The administrative challenge is immense, Source: Steenbergen and Gohar, 2005. both to register historic use (and entitlements) and to manage those. Van Steenbergen and Gohar34 made the barani areas of Pakistan less resilient to describe some of the experience to date in this drought.'This descent into non-sustainability, and regard: `The Groundwater Rights Administration the huge associated social, economic, and political Ordinance is a useful model for barani areas, costs should be considered as a warning of the whereas the Groundwater Regulatory Framework importance of action to manage the groundwater developed but not yet endorsed in Punjab can serve of the Indus Basin. as an example for the alluvial aquifer systems in There are special challenges of managing the Indus valley. At the same time--preferably groundwater in the vicinity of Pakistan's within the Provincial Irrigation and Drainage burgeoning cities, most of which depend on Authorities--Groundwater Management Units groundwater for water supply. The large-scale need to be established and activated in each exploitation of the aquifer underneath the cities Province. Past history showed that such efforts and in urban periphery has however led to falling quickly went in dormancy, for instance in water tables and to contamination of water Balochistan and Punjab. By giving the Units a supplies by leaking sewerage systems and septic central role in the enforcement of groundwater tanks as documented for Karachi, for example. In legislation and in the implementation of Quetta the over-exploitation of the confined programs... they can become vibrant aquifer by agricultural users around the city has organizations in their own right.' already led to a number of doomsday projections, In all instances where groundwater predicting that in a foreseeable future even the management has had some success, the foundation supply from deep fossil groundwater to the capital has been Aquifer User Associations who are of Balochistan province will dry up. It is estimated supported very strongly by government who have that the remaining groundwater may be exhausted a vital role in providing the information and by 2016.33 And the water table around Lahore has systems for making decisions (for example on the 33 Paper 11. 34 Ibid. 43 Pakistan's Water Economy total amount of pumping from an aquifer) and in to expand the scope of their work to include both providing the necessary legal and administrative surface water and groundwater. support. In the case of the Indus Basin there are The forms of organization would necessarily three complicating factors. First, some of the be different in different parts of the country. As aquifers are very large, much too large to be suggested by Gohar:36 in the Indus Basin there are managed by a single Aquifer User Association. 43 main canal commands, for which aggregate (Experience in the huge Ogallala Aquifer which and distributary-level water balances could be stretches from Minnesota to Texas shows that a developed as a basis for the formation of integrated single aquifer can, indeed must, be broken down surface water/groundwater user associations. In the into pieces which can be managed by local mountainous areas (such as the Pishin-Lora, associations.35The smaller such units become, the Quetta Valley, and Bund Kushdil Khan areas of less realistic it is to treat them as individual Balochistan) water balances have been or could aquifers; but the larger they become the more be developed, and provide the knowledge base for difficult the management of users becomes. This the development of aquifer associations. will require, as with so much, a learning approach In their background paper, van Steenbergen and and adaptive management). Second, it is Gohar37 describe an initial experience with some particularly important to manage the sweetwater elements of such an approach: `This approach aquifers which border saline aquifers with special worked well in the Kamalia Distributary that takes care.The tendency will be for more pumping from off from Burala Branch Canal of LCC.The initial the sweetwater aquifer, thus causing the phreatic response of farmers and local agencies was level in the sweetwater area to fall relative to the lukewarm, but after a first awareness building stage level in the saline aquifer, inducing saline intrusion the ice was broken. During the course of the pilot, and destroying the sweetwater aquifer. Third and participatory piezometers were installed at farmers' finally, given the highly integrated nature of the land and local water management was discussed canal and groundwater systems, integrated in plenary. The results were a shift of paddy management of surface water and groundwater is cultivation to other crops and water releases to a must. What this suggests is that a pragmatic the tail ends of the distributary for the first time initial approach would be to develop aquifer in three years.' associations on the foundation of the Farmers' In a large number of developing countries Organizations (FOs) which are being formed in (including Mexico38 and India39), this intrinsically various provinces for management of water difficult task has been greatly complicated by a distribution at the distributary canal level. And tradition of subsidizing electricity for groundwater here a key issue is sequencing--as long as the FOs pumping. This genie, like most other genies, is are weak, they should not be encumbered with very difficult to put back in the box, and it means the complex additional task of extending their that stabilization of aquifer levels (which is mandate to cover groundwater, too. But once the inevitable, one way or another) will come at much FOs find their feet, then the next step should be higher economic, social, and environmental costs. 35 White, Stephen E., and David E. Kromm, `Local groundwater management effectiveness in the Colorado and Kansas Ogallala Region', Natural Resources Journal, Vol. 35, 1995. 36 Shamshad Gohar, personal communication. 37 Paper 11. 38 Kemper, Karin, and John Briscoe, Mexico: Policy Options for Aquifer Stabilization, The World Bank, 1999. 39 Briscoe, John, and R.P.S. Malik, India's Water Economy: Bracing for a Turbulent Future, Oxford University Press, New Delhi, 2006. 44 The Challenges of the Present and the Necessary Responses The situation in Pakistan is not ideal--tariffs for This management will not be only an issue of agricultural tubewellsareapproximately 35 percent managing quantity--the issues of quality are below rates for the domestic or industrial uses equally important, and closely related to the (with serious anomalies in Balochistan, where the quantitative aspects of aquifer management. subsidies are much higher and have been Most people in rural and urban Pakistan depend fundamental to digging a hole so deep that in on groundwater for their drinking water. Of the places escape is almost impossible). In addition, major towns, only Karachi and Islamabad at present 86 percent of tubewells are powered by rely primarily on surface water sources. With diesel motors, and thus unaffected by electricity the emergence of the problem of arsenic prices. But this will change as rural electrification contamination in the Ganges-Brahmaputra Basin, improves and as the groundwater table falls. As in there is now concern about this issue in Pakistan, all other countries, there are and will be populist too. `The extent of arsenic contamination of temptations to subsidize energy for pumping groundwater has recently been documented for groundwater. A high priority for policymakers at the first time. Preliminary findings of the National both the national and provincial levels is not to Water Quality Monitoring Programme indicate succumb to such pressures. If there was to be a that arsenic found its way in large number of water decision to increase subsidies to agriculture, then samples from cities such as Bhawalpur, Multan these subsidies should be ones that enhance water and Sheikhupura and Lahore'.41 Figures 3.29 and productivity (as has been done in Mexico40), not 3.30 show the levels of arsenic, relative to the destroy the resource base. WHO guideline of 10 parts per billion (ppb). Fig. 3.29: Arsenic in groundwater in Punjab 100% 90% 80% 70% Arsenic concentration % more than 50 ppb 60% 50% Arsenic concentration % 10­50 ppb ercentageP 40% 30% Arsenic concentration % up to 10 ppb 20% 10% 0% ah alpur Khan yy w La Multan Jhang Khan argarh Y DG R Bha Muzaff Districts Source: Steenbergen and Gohar, 2005. 40 Kemper, Karin, and John Briscoe, Mexico: Policy Options for Aquifer Stabilization, The World Bank, 1999. 41 Paper 11. 45 Pakistan's Water Economy Fig. 3.30: Arsenic in groundwater in Sindh 100% 90% 80% 70% Arsenic concentration % 60% more than 50 ppb 50% ercentageP Arsenic concentration % 40% 10­50 ppb 30% 20% Arsenic concentration % up to 10 ppb 10% 0% pur erk Dadu Shah par Khair ab w Thar Na Districts Source: Steenbergen and Gohar, 2005. The presence of fluoride in the groundwater is contamination remains the major contamination also a potential health risk. `A survey of 987 and cause of morbidity in drinking water.' samples from sources of domestic water supply, In addition to these `natural' contamination showed, however, that they are predominantly low problems, human-induced contamination now in fluoride, with 84 percent containing less than constitutes an additional threat to the quality of 0.7 ppm of fluoride....suggesting that fluoride and groundwater. This is especially serious where fluorosis--including the dental and bone aquifers are being used to dispose of long-lived deformation--are not uniform but can be serious synthetic organic chemicals and heavy metals, at specific places'.42 pollutants which will concentrate and persist in As concluded in the background paper by van aquifers for many decades. (This issue is discussed Steenbergen and Gohar:43 `for both arsenic and further in the section on environment.) fluoride contamination, alertness is required Finally, the most fundamental of all quality without being alarmist. The result of the recent challenges, however, is salinity--where will the salt studies needs to be substantiated, before initiating go? How will groundwater be managed so that programs to deal with these issues. It is important freshwater aquifers are not destroyed by intrusion at the same time to keep things in perspective and from saline aquifers? among other things--a not lose track of the fact that bacteriological subject to which we now turn in the next section. 42 Paper 11. 43 Ibid. 46 The Challenges of the Present and the Necessary Responses Maintaining the Resource are mobilized by the ongoing tubewell pumping Base--Salinity Management44 and by the deeper groundwater flows. These mobilized salts then become part of the salt The management of salinity constitutes one of the dynamics of the root zone and underlying shallow major challenges for long-term sustainability of groundwater zone. irrigated agriculture in the Indus Basin. Secondly, much of the lower basin is of marine Why is salinity such an issue?The basic concern origin (having been elevated through movements is that high salinity in the root zone greatly inhibits of the earth and by the deposition of silts from the productivity of most crops. The simplified the Indus). Further inland, where the deposits are physics starts with the fact that as rainwater turns older, some of the marine salts in the upper soil into streamflow, it travels through soils and have been leached out over time. But in the dissolves salts that are naturally present in the soils. younger lands of lower Sindh, the marine salts are When this water is then used for irrigation, most still strongly present at shallow depth. of the water is lost to the atmosphere through the Third and finally, there are the salts imported process of evapotranspiration. The salts, however, by the Indus irrigation water. Although this water do not evaporate, but stay behind, generally in is mostly of low salinity (only some 200­300 ppm the root zone or even on the surface of the soil. In at Tarbela and other rim stations), this means that temperate climates where there is a lot of rainfall about 30 million tonnes of salt are being imported and where evapotranspiration rates are low, the each year. Before the advent of large-scale salts are mostly leached out to rivers and eventually irrigation, roughly similar amounts of salt were the ocean, and pose little problem. In arid being exported to the sea. (Minor salt sources, such environments, however, the situation is reversed-- as those released by mineral weathering, and evapotranspiration rates are very high (meaning imported by fertilizers and rain are generally that alargeamountofsalt`stays behind'), and there too insignificant to be considered in the salt is little rainfall or excess water applied to wash the management planning.) salt out of the root zone and into sinks where it The advent of large-scale irrigation had no longer constitutes a threat. Complicating the dramatic implications for salinity in the Indus issue in arid environments is the fact that the Basin. First, flows of both water and salt to the process of irrigation often mobilizes large amounts ocean were reduced. Today, only about 10 million of salt that were previously in deep aquifers and tonnes are being returned to the sea each year in soils where they caused no harm. the Indus and about 4 million tonnes via the As described in the background paper by Bhutta Left Bank Outfall Drain (LBOD).This means that and Smedema,45 the salts presently occurring in about 15 million tonnes of salt (or about 1 tonne the Indus Basin are of a variety of origins. Firstly, of salt per hectare per year of irrigated land) are there are the fossil salts deposited as a result of being stored somewhere in the basin. evapotranspiration during the drier period in the Second, as described earlier, large amounts of geological formation of the Indus plains. These water were dumped into the unsaturated zone salts occur at various locations and depths in the above the then-deep aquifers. These waters substrata and in the groundwater. Most of the fossil dissolved some of the salts which had previously salt is safely stored in the deeper substrata but some been safely stored well below the root zone. In 44 This section draws heavily, and often directly, on the background paper by Bhutta and Smedema (Paper 15). 45 Paper 15. 47 Pakistan's Water Economy many places, the water table has now come close In many ways this salinity management strategy to or even intersected the surface.This meant large has worked extraordinarily well over the past forty increases in evaporation, with the salts that were years on the aggregate (fig. 3.31). But with water, in the water being deposited in the root zone or like politics, everything is local. And there are still the soil surface. As described in Chapter 2, by the substantial areas, especially in the lower part of 1960s the waterlogging and salinity problem the delta, where groundwater is naturally saline posed a major threat to large areas of the irrigated and where waterlogging and salinity remain plains of the Indus.The response to this challenge immediate problems (fig. 3.32). showed what can be done if the nation's and the Paradoxically, in a country where water scarcity world's best scientific and technical minds are put is a looming problem, it is scarcity which helps to work on a problem. It was realized that `the reduce the salinity problem! Consider the solution' comprised three integrated actions--first, following two examples. In Sindh the area affected to lower the groundwater table through massive by waterlogging and salinity varies enormously pumping, thus reducing large evaporation losses (by a factor of 5 over the 1990s) and appears (and the corresponding salt deposition); second, (fig. 3.33) to be directly related to the quantity of to increase the application of water to crops, so water applied during the previous year.46 And that salts would not accumulate in the root zone overall, as described earlier, water shortages in the but be leached down and out of harm's way; Indus Basin have little impact on production, and third, to use the incentive of greater crop because the deleterious effect of water shortages is production to motivate farmers to engage in offset by the positive effect of reduced waterlogging greater use of groundwater. and salinity and because of supplementary Fig. 3.31: Long-term trends in severe waterlogging 9 8 7 6 (Ma) 5 4 Area 3 2 1 0 ­1 1975 1980 1985 1990 1995 2000 2005 Year Punjab Sindh/Balochistan NWFP Pakistan Source: Bhutta and Smedema, 2005. 46 Paper 11. 48 The Challenges of the Present and the Necessary Responses Sindh to the sea. The (planned and inadvertent) Fig. 3.32: Salinity levels by province successes of the last decades has led--as reflected Salt free Slightly saline in the report of the Expert Panel on the Drainage Moderately saline Strongly saline Master Plan--to a fundamental rethinking of the needs for this infrastructure.The general consensus 100% is that these large drains (such as the LBOD) are 80% necessary in the salt-plagued lower delta, but that 60% the fundamental approach is now to reduce the `drainable surplus' through more efficient water 40% use and local use of saline drainage effluent, and 20% that extension of the existing drains further up 0% the plains will not be necessary. NWFP Punjab Sindh Baloch. Pakistan While there is much that has been enormously Source: Bhutta and Smedema, 2005. positive in Pakistan's remarkable success at stemming the plague of waterlogging and salinity, there are also very worrying signs that this was at irrigation from groundwater. It is also salutary to least as much good luck as it was good judgment. recognize that this happy coincidence cannot Experience in other arid areas has shown that persist for long, because of constraints on both salinity management must be built on a strong the quality and quantity of groundwater. knowledge base, both system-wide and locally. Twenty years ago, it was believed that the only And here, after so many years, there are gaping way of maintaining salt balances in the basin would holes in the knowledge base even at the system be to construct a `drainage superhighway' which level. Consider, for example, the most basic piece would transport salts from Punjab, NWFP, and of knowledge, namely a system-wide salt balance Fig. 3.33: Canal diversions and waterlogging in Sindh Change in waterlogged area Canal diversion previous year Canal diversions Area in 1000 ha MAF/yr 3000 60 2000 50 1000 40 0 30 1991 1992 1994 1995 1997 1999 2000 1993 1996 1998 ­1000 20 ­2000 10 ­3000 0 Years Source: Steenbergen and Gohar, 2005. 49 Pakistan's Water Economy which would indicate the flux of salts both areas it is essential to know how much salt needs horizontally and vertically. The Drainage Master to be exported and where it should be stored.This Plan is attempting, for the first time, to construct cannot be done without reliable salt balances at a system-wide salt balance. While there is a fairly disaggregated levels. reasonable understanding of what is coming in Each new era of water development poses new and what is going out of the system, knowledge challenges to water managers. As described earlier, of how much salt is being retained in the root over the coming decades groundwater tables in zone, or being flushed down to the deep aquifer is the sweetwater areas are likely to continue to fall, rudimentary at best. The first estimate of the in many cases quite rapidly and steeply. In addition Drainage Master Plan was that there are 34 million to the other challenges described in the previous tonnes of salt accumulating in the root zone. The section on groundwater, this raises an important WAPDA figures, however, showed that soil salinity salinity concern in the aquifers which border on levels in the root zone had stabilized in the 1990s saline areas. Because as the groundwater table falls and actually declined during the last five years. in the sweetwater area, the hydraulic gradient will This led to a revised salt balance (fig. 3.34) in be steeper, and the normally slow horizontal flow which it is estimated that the root zone is actually of water will increase, in this case out of the saline losing 3 million tonnes of salt a year. aquifers into the sweetwater aquifers. In addition, This is a profoundly important issue. If salt is the heavy pumping of groundwater can cause up- not managed, there will be major productivity, coning of saline water from deeper aquifer (which social, and environmental consequences; and to caused more than 250 drainage cum irrigation achieve a salt equilibrium in the fresh groundwater tubewells installed in the fresh groundwater zone Fig. 3.34: Approximate current salt balance in the Indus Basin (million tonnes a year) Mountains Sink Pumping Indus 3 from 29 Canal diversions 22 tubewells 49 7 = ­ 0.1 Root zone 7 Unsaturated Leaching 3 1 zone 6 7 70 Sink Sink Saturated = 11 zone 10 LBOD Evap Sink 4 Pond 7 Sea Source: M.N. Bhutta, personal communication. 50 The Challenges of the Present and the Necessary Responses of SCARP-II to be abandoned47). It is vital to expectations as it is about managing salt. Salt monitor both water and salt flows, so that this creates its own distributional impacts which for process does not become a local threat. many areas bear no resemblance to the original A central and politically sensitive issue is the design or individual equity within irrigation fact that, from a salinity perspective, there are areas schemes.Therefore, effective salinity management in the Indus plain which are suitable for irrigated schemes always contain a significant restructuring agriculture (generally near the mountains and far component to enable individuals to leave the from the coast) and others which are not so suitable industry in a managed way.This is generally much (especially those in the saline lower reaches of the cheaper than trying to eradicate salinity.' basin). It is useful to step away, momentarily, In summary, there is an urgent need to invest from the obvious and very sensitive political heavily in monitoring, and scientific and technical implications of this gradient and see how other capacity to deal with the salinity issue. At a macro countries have dealt and are dealing with similar level it is clear that the difference between salt problems. A good example is the Murray-Darling being imported and salt being exported is about Basin in Australia, which is of about the same size 15 million tonnes per year. This gives rise to two and faces many of the same salinity problems. A key questions. cornerstone of the Australian salinity management Key question 1--where is this salt going? Is it strategy is to define different strategies for different to `safe storage' or into places where it will affect saline areas. In some areas there is a strategy of agriculture? saline agriculture, which encourages cropping Key question 2--there are very large amounts with salt-resistant crops and the use of saline of salt already stored at various places in the soil groundwater for this purpose. In other areas of and groundwater. Are water management actions high salinity not only is productive agriculture not keeping these out of harm's way, or are these being possible, but it would mobilize large amounts of mobilized (for example, through pumping of deep salt which would cause systemic harm. In these groundwater or through lateral movement from areas, the strategy is to offer farmers incentives-- saline to fresh aquifers)? including sale of their water entitlements--to For this, managers need to know global balances retire their land from irrigation. The implications but, more importantly, they need: to be able to for Pakistan are obvious--there is a need for get inside the `black box' and find out what is detailed assessment down to the local level, and happening in terms of both stocks (where is the there is a need to have a support and incentive salt?) and flows (where is it moving?), and to have structure which will ensure that the right type of a very good knowledge base for local situations. agriculture is done in the right areas. Migration In conclusion, it is important to note that of water and other inputs must be a voluntary one about 80 percent of irrigated agriculture in in which those who are surrendering their right Pakistan currently operates in a largely salt free to use them are compensated. In Australia, the environment. This figure is not static, however, growing water markets do this in a way that and maintenance of this proportion depends on farmers in these low-productive areas do far good management. For both currently `safe' areas better from the revenues from selling their water and those where salinity levels are high, sound rights than they did by practicing irrigation. knowledge-based strategies for living with and Salinity management, then, in the words of the managing salinity must be developed to avoid former CEO of Australia's Murray-Darling Basin adverse long-term effects on the productivity and Commission `is as much about managing human sustainability of the system. 47 Paper 11. 51 Pakistan's Water Economy Reversing Large Scale To a substantial degree the retreat of the delta Environmental Degradation48 is an inevitable phenomenon and a part of the bargain struck in order to support large numbers Salinity management is the biggest and most of people in the Indus Basin. That said, it has also fundamental environmental challenge in the Indus long been recognized that it is important to Basin. Butthereare other environmental challenges provide some managed flows to sustain the delta too--of managing the coastal zone and delta, of to the degree that this is possible. This was, in preserving wetlands, and of managing pollution. fact, an item which was specifically discussed as part of the Indus Waters Treaty. There is a long- The delta standing debate about the flows that are needed to maintain reasonable quality in the delta. In his The coastal zone of Sindh is highly productive in definitive history of the Indus Waters Treaty, terms of photosynthetic processes and Gulhati50 records that `for salinity repulsion at the biodiversity,49 with about 200 species of fish mouth of the Indus and for purposes of navigation reported in the delta. The delta produces large between Kotri and the sea, Pakistan wanted to quantities of shrimp--about 25,000 tonnes a year, reserve 17 MAF as an "existing use"'. This was more than half of which is exported. Mangroves taken up again in 1991 in the discussions of the are a centerpiece of the deltaic ecosystem. Water Accord. `The need for certain minimum Estimates using satellite imagery show a steady escapage to sea, below Kotri, to check sea intrusion, decline in mangrove coverage in the Indus delta. was recognized. Sindh held the view that the A 1977 estimate was of 263,000 ha; a 1990 study optimum level was 10 MAF, which was discussed estimated 160,000 ha of mangrove forests; and at length, while other studies indicated higher/ the latest estimate in 2003 reported that 106,000 lower figures. It was, therefore, decided that further ha of mudflats are under the mangrove forests studies would be undertaken to establish the along the coast of Sindh. minimal escapage needs down-stream Kotri'.51 There are multiple reasons posited for this After many years of discussion, the Ministry of decline. The mangroves have traditionally been Water and Power has commissioned major studies used as a source of wood for construction. by international consultants to examine the issue However, today the residents of the coastal villages of the decline of the delta, the various contributing mainly use them as a source of fodder for livestock, factors, the role of diminished flows, and to make and as a source of fuel. In addition, professional recommendations about the quantity and timing livestockers from the interior of Sindh bring large of managed flows for the delta. The report is due number of camels to the coastal lands for grazing soon and is expected to result in a final agreement. and browsing mainly during the flood season. These factors notwithstanding, it has long been Wetlands clear thatthereductionin freshwater outflow to the delta and the decrease in sediments and nutrients Pakistan possesses a great variety of wetlands from play a role in this decline, and the associated the Indus delta to the high Himalayas. The area decline in fisheries and livelihoods in the delta. of inland waters in Pakistan has been estimated at 48 This section draws heavily, and often directly, on the background paper by Vakar Zakaria. 49 Paper 3. 50 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, Bombay, 1973. 51 Indus River System Authority, `Apportionment of Waters of Indus River System between the Provinces of Pakistan: Agreement 1991 (A chronological expose)', undated. 52 The Challenges of the Present and the Necessary Responses 7,800,000 ha. Pakistan's Wetlands Action Plan, or dhands (17 percent)--the large-scale use of recently prepared by WWF-Pakistan and NCCW, water for irrigation has had both positive and gives an overview of 53 important wetlands of negative effects on this environment. Pakistan, and describes their location, area, threats, Wetlands are a vital part of the ecosystem. and management status. Examples of key values and functions of wetlands Figure 3.35 shows the location of important in Pakistan include: wetlands in the country. As is implicit in the description of the major types of important l Flood control: Kinjhar and Haleji lakes wetlands--man-made reservoirs (31 percent), reduce the impact of Indus floods, while brackish lakes (35 percent), and freshwater lakes Manchar lake accommodates water from Fig. 3.35: Pakistan's wetland resources Source: Zakaria, 2005. 53 Pakistan's Water Economy Indus and also from torrential hill streams. the wetlands. Many coastal lakes like Pateji l Groundwater replenishment: Wetlands in were freshwater lakes prior to the LBOD such areas are valuable source of groundwater project. recharge, for example, the Hub reservoir in lLand reclamation for various purposes, Balochistan. particularly for agriculture, has eliminated l Reservoirs of biodiversity: Haleji lake holds many wetlands. A recent study assessed the 60,000 to 10,000 ducks and coots in mid- evolution of wetlands in Thatta and Badin winter. districts in lower Sindh, and concluded that l Ecosystem services: A large fishing several lakes had become either reduced community is dependant on Manchar lake considerably in size or had completely dried for subsistence. up. In part, this was attributed to extensive l Recreation, tourism, and cultural rice cultivation by the local population. importance: Haleji lake in Sindh, Taunsa lDischarge of sewage, effluents, irrigation, barrage in Punjab, and Sheosar lake in the and industrial waste is putting a serious stress Northern Areas attract visitors. on aquatic ecosystems. Almost all sugar mills l Support local economy and cottage in Sindh are discharging their effluents in industries: Baskets made from typha are an drains, many of which discharge into important economic activity in central and wetlands. Haleji and Lal Suhanra lakes are lower Indus Basin. facing the threat of eutrophication. lOverexploitation of biological resources like Pakistan's wetlands are under a variety of threats. food, feed, and fuel has degraded large In the past, wetlands have generally been wetlands. Kinjhar and Manchar lakes are considered as wastelands, and have been used for important examples. drainage of water, reclaimed for agriculture, or lSea water intrusion and storms in coastal treated as dumping grounds for all kind of refuse. areas has destroyed the ecosystem of a large The resources of the wetlands--fish, mangroves, number of lakes. Kalkani, Khadi, and Jhim and birds--have been harvested indiscriminately dhands are important costal wetlands that without any attempt to regulate their exploitation. have become saline in recent years. It is estimated that around 36 percent of the lUnregulated harvesting of wildlife wetlands are facing a high level of threat, and a species, particularly hunting and trapping of further 30 percent are facing medium-level threats. waterfowls, is causing a steep decline in The major threats include: populations. Chachh dhand in Thatta district supports a good population of l Reductions in floods as a result of Tarbela waterfowls. However, the population of and Mangla. Although obviously desirable wintering birds is declining rapidly due to for other reasons, reduced flooding together excessive hunting. All dhands along the Nara with the construction of bunds have signifi- canal are facing similar threats. cantly reduced riparian forests. A species shift lIntroduction of exotic species in lakes from Acacia to Prosopis is common in riverine is a serious threat to the population of areas. This has threatened many mammal indigenous species. Carp introduced in the species, including the hog deer. Kallar Kahar lake are proliferating at the l Some of the drainage systems have reduced expense of indigenous species. recharge of the wetlands and changed their lUnmanaged tourism is also a significant habitats by discharging saline effluents into threat to the wetlands. Major hazards 54 The Challenges of the Present and the Necessary Responses associated with tourism are damage to Water Pollution vegetation, killing or capturing wildlife, and littering. Haleji lake, Mangla reservoir, and As described earlier, Pakistan is urbanizing and Sheosar lake in the Northern Areas are industrializing very rapidly.The number of people examples. living in cities has increased almost four-fold over the last twenty years, and has been accompanied One hundred and fifty years ago, a decisive by a similar increase in industrial activity. To date choice was made, namely to render the sparsely there has been little effective action to reduce the populated Indus plains fit for large-scale human environmental impact of this rapid concentration habitation by manipulating the natural water of people and activity. system. Such a decision inevitably leaves a very First, consider the issue of wastewater disposal. large ecological footprint. Pakistan has started the As shown in table 3.1, there is very little treatment process of examining this footprint, and of of wastewater or of industrial effluent in the prioritizing those environmental issues which are burgeoning cities: it is estimated that only some 8 most important, and most amenable to change percent of urban wastewater is treated in municipal by human action. As the above description treatment plants, where treatment is at best partial suggests, many of these changes (many deleterious, owing to poor operation and maintenance. some positive) are irrevocable. And in virtually all Furthermore, there is very little separation of cases the need is for actions on many fronts, municipal from industrial effluent and both flow including modified water management regimes. directly into open drains, which then flow into Table 3.1: Wastewater treatment in the cities of Pakistan52 Major Cities Population (millions) Status and Condition of Facility Karachi 10 TP 1, 2 and 3 non-operational. Maripur being operated by semi-private arrangement. Lahore 5 Sewage treatment plants proposed but not implemented. BOOT advertised, but lack of interest resulted in schemes being shelved. Faisalabad 2 One of the treatment plants is functioning but not satisfactorily. Three other plants proposed but none yet installed. Rawalpindi 1 No sewage treatment yet. A plant is planned under an ADB loan for second phase of Rawalpindi Urban Development scheme. Islamabad 0.50 STP 1 and 2 grossly overloaded, while STP 3 was never commissioned. French loan for STP 4 being utilized in 2005. Quetta 0.50 No sewage treatment facility exists. Hyderabad 1 There are two treatment plants. None of them is functioning. Gujranwala 1 No sewage treatment facility exists. Peshawar 1 Hayatabad STP non-functional. Other plants in Charsadah and Warask are being constructed. Multan 1.2 No sewage treatment facility exists. Sargodha 0.50 No sewage treatment facility exists. Source: Paper 8. 52 Paper 8. 55 Pakistan's Water Economy nearby natural water bodies. In the absence of the that nearby groundwater is becoming seriously latter, the effluent collects in stagnant pools, within contaminated. Since all major cities, apart from residential areas or near industrial plants.53 In Karachi and Islamabad, depend on groundwater as Lahore, only 3 out of some 100 industries using their source of raw water, this poses a serious and hazardous chemicals treat their wastewater. rapidly growing problem for the cities. In addition, Figures 3.36 and 3.37 show that the BOD and many cities are having difficulties in getting COD levels in urban streams are in orders of sufficient quantities of raw water as local aquifers magnitude higher than national standards. are being overpumped and contaminated. In Karachi, Sindh Industrial Trading Estate Consider the case of Lahore, for example, which (SITE) and Korangi Industrial andTrading Estate has 300 tubewells installed pumping over 300 mad (KITE), two of the biggest industrial estates in of water. Over the past few years, water quality Pakistan, there is no effluent treatment plant and has become a serious issue as the existing sewerage the waste containing hazardous materials, heavy system is in a state of disrepair and there is metals, oil, etc. is discharged into the already no sewage treatment facility. Wastewater is polluted river and harbor.The industrial pollution contaminating groundwater supplies in many discharges combined with mangrove destruction areas of Lahore. are resulting in sharp decrease in shrimp and fish In one of the many brutal trade-offs that poor production. The Kasur Water Treatment Plant is people make on a daily basis, on the urban generally considered to be the only common periphery irrigating with low-quality water or effluent treatment plant for industrial wastewater sewage is often the only option. But even when that is currently functioning in the country, but farmers do have access to surface water and in fact it is only a pre-treatment plant and causes groundwater, many prefer sewage because they major odor problems.54 are guaranteed a constant supply, and the The overall effect is that the population is nutrients the water contains allow them to save exposed to major health hazards, and it also means on fertilizer.55 Fig. 3.36: The quality (Biochemical Oxygen Demand) of urban streams Fig. 3.37: The quality (Chemical Oxygen Demand) of urban streams 500 450 5000 400 4500 350 4000 300 3500 BOD 3000 250 mg/l COD 2500 200 mg/l 2000 150 1500 National standard 100 1000 50 500 National standard 0 0 Urban streams in different cities Urban streams in different cities Source: Zakaria, 2005. Source: Zakaria, 2005. 53 Paper 3. 54 Shahida Jamil, personal communication as part of a review of an earlier draft of this Report. 55 Paper 5. 56 The Challenges of the Present and the Necessary Responses Water pollution is, however, not only a water use in both agriculture and urban areas; it consequence of urban and industrial pollution. would mean reductions in mining of aquifers and About 5.6 million tonnes of fertilizer and 70 the consequent quality problems. It would also thousand tonnes of pesticide are consumed in the mean shifting the focus of government attention country every year. Pesticide use is increasing away from the traditional areas (of constructing annually at a rate of about 6 percent. Pesticides, and operating water supply infrastructure) mostly insecticides, sprayed on the crops mix with and `creating fiscal space' for investing in the irrigation water, which leaches through the soil environmental quality and other public goods. and enters groundwater aquifers and sometimes Global comparisons show that there is contaminates water supplies, as appears to be the somethinglikea`Kuznetscurve'formany indices of case in the recurring problems of water-related environmental quality. As illustrated schematically deaths in Hyderabad.56 The quantity or quality of in fig. 3.38, in the early phases of development agricultural runoff has not been measured or tested there is typically a sharp decline in environmental at the national level. In 107 samples of groundwater collected from various locations in Fig. 3.38: The `Kuznets curve' for the country between 1988 and 2000, 31 samples environmental quality were found to have contamination of pesticides beyond FAO/WHO safety limits.57 A recent study, Good conducted by the Environmental Protection quality Department in Punjab took 280 samples, distributed evenly over all districts in the province. It found the concentration of the different heavy vironmental Bad toxic metals (cyanide, cadmium, chromium, En mercury, lead, boron, nickel, selenium, and zinc) Low Moderate Medium High Income per capita to be in excess of WHO standards for up to 25 percent of the samples.58 Source: The World Bank, 1992. It is instructive to differentiate two different water-related environmental challenges. Category quality. As economic growth is sustained, however, One are issues of environmental degradation societies place a higher value on environmental that would improve dramatically if water was used quality, and they have more resources to spend and managed more effectively and efficiently; on the environment. For many measures of and Category Two are issues that require environmental quality there is then a slow but supplementary actions and resources. steady climb out of the environmental abyss. If the recommendations discussed in earlier sections of this Report--water entitlements, Living with Floods water pricing, accountable institutions, effective regulation--were implemented, the majority of The natural state of heavily-silt-laden rivers (like water-related environmental problems in Pakistan the Indus) is to meander. This is because as silt would be ameliorated to a significant degree. builds up in their beds, the rivers seek lower lands Specifically, this would mean an end to wasteful and change their courses. This creates havoc with 56 Paper 2. 57 Paper 3. 58 Paper 11. 57 Pakistan's Water Economy human settlements and so, throughout the world, of high magnitudes from torrential rains.' In such rivers have been trained and confined by Punjab, `the problem of inundation and land embankments within relatively narrow beds. But erosion are both prevalent.'61 The problem of as with everything watery, solving one problem Sindh is, in many ways, the most difficult and gives rise to another. In this case, the bed keeps intractable. In the words of Asif Kazi: `The getting higher and higher, and soon the river is, as province of Sindh has virtually been the delta area in the lower parts of Sindh, above the level of the for millions of years, and there is ample geological land. (To some degree the trapping of silt in evidence that there is not a single square meter of upstream reservoirs alleviates this particular Sindh where Indus has not been flowing. It has environmental hazard.) Over time, the likelihood been filling up the lowest lying areas wherever they of embankment breaching increases, as do the might have been, depositing sediment, and then problems of drainage from flooded lands. When moving on to the next low area and so on. Changes this coincides with unfavorable tidal conditions, in the course of Indus to even far away low routes, the consequences can be disastrous. of course, took place during high floods. The As shown in fig. 3.39, floods have, with process continued till an uncertain situation such considerable regularity, inflicted large damages and as this became totally unacceptable to the caused many deaths. The nature of the flood inhabitants.Therefore, over the past one hundred protection and management challenge varies and fifty years or so dykes have been constructed considerably across the country. As is always the progressively to a point that the Indus river has case, water is mostly a blessing and sometimes a now been put in a straitjacket, thereby fixing its curse.The hill torrents of NWFP, Balochistan, and location. This naturally resulted in deposition certain parts of Punjab sustain agriculture in an of transported sediment largely on its own bed area of about 1 million hectares59 but also, as giving rise to a situation where the river is now described by Asif Kazi:60 `...pose a serious threat significantly higher than the natural ground. The due to their steep slopes resulting in flashy flows choice would be between dredging and excavation to lower the bed, or to continue to raise the side embankments. Currently, when a protection bund Fig. 3.39: Flood losses in Pakistan breaches in the province of Sindh, inundations are prolonged, and the floods not only damage Lives Lost Area Flooded (Million Acres) summer crops but they also interfere with the 3,500 25 sowing of subsequent winter crops. The potential 3,000 20 2,500 for economic losses, and human sufferings for the 2,000 15 poor inhabitants of relatively cheap flood-prone 1,500 10 lands near the river, are the greatest. In addition 1,000 5 500 to millions of acres of irrigated land that is 0 0 subjected to flooding, the country's major rail and roads are also sometimes affected by super flood 1950 1955 1956 1957 1959 1973 1975 1976 1977 1978 1981 1983 1984 1988 1992 1994 1995 events that keep the infrastructure out of service Source: Kazi, 2005. for long durations.'62 59 Van Steenbergen, personal communication as part of a review of an earlier draft of this Report. 60 Paper 14. 61 Ibid. 62 Ibid. 58 The Challenges of the Present and the Necessary Responses In his excellent background paper, Asif Kazi63 attention (witness Sukkur Barrage) and gives a comprehensive overview of the challenges attention to bypass floodways that need to of flood management, of what has been done (a be properly demarcated and channelized, lot) and what needs to be done (a lot more). The and from which encroachments need to be major conclusions are as follows: removed. There are some major structures, such as the Alexandra Railway Bridge over l As in many countries, attention to floods is the Chenab, that need to be extended to episodic and goes into hibernation during avoid choking and flood ponding upstream periods of drought, with devastating that causes frequent inundation of towns and consequences (as witnessed in the recent villages. drought-ending floods in Balochistan). l A major problem is that maintenance of the l Pakistan has a long-standing and sophisti- existing flood protection infrastructure is cated understanding of flood management, deficient, with the result that breaches/ and has long emphasized both `hard' solu- damages are not uncommon. As for all other tions (such as dams, embankments, and infrastructure (discussed in more detail in drainage works) and `soft' solutions (such as the next section), there is a need for an asset watershed management, land use planning, management plan, and assessment of and flood warning systems). liabilities and mechanisms for regular l There are a number of factors--including funding of these. declining storage capacity in the major l While the concept of flood hazard land-use reservoirs, and the increased flows likely as a planning is well understood, the fact is that result of glacial retreat--which indicate that there is little enforcement, and growth of Pakistan is likely to be entering an era of vulnerable developments in flood-vulnerable increased flooding. areas continues unabated. l Flood management always involves difficult l Post-dam records are long enough to give a trade-offs. Embankments and drains and fairly good indication of the effect of the other protective structures cannot realistically reservoirs, but the quality of regulation is not be built to such a level that there is no threat being improved by extending the period of of floods. And so when floods do occur, they record by simulating reservoir operation for should not be seen as `a failure' of the system, the pre-dam periods. There is a need to but rather as an inevitable part of the uneasy review the magnitude of Probable Maximum balance which is struck when man lives Flood (PMF) for major facilities. in very large numbers in a hazardous l Flood response plans exist but implementa- environment. In addition, populations tion is weak, with specific priority items move into the Indus flood plain, which being the need to raise the level of aware- sustains a productive shallow-tubewell-based ness, and to the timing and reliability of agriculture. warnings and how they are understood by l Priority must be given to structural the general population. protection of high-value infrastructure assets, l Progressive deposition of sediment on the the failure of which would be catastrophic. river beds, particularly in the lower reaches This obviously includes the barrages, where of the Indus, is proceeding unchecked. there is both need for urgent structural Current management of the problem by 63 Ibid. 59 Pakistan's Water Economy correspondingly raising the dykes to contain Pakistan. But the great challenges are those of the river every few years is certainly not making explicit but difficult trade-offs, financing, sustainable on a long-term basis. implementation, maintenance, and institutional l Flood management is characterized by `short performance--in short, the fundamental bursts of feverish activity stimulated by a problems of development. flood event followed by long periods of complacency... as the memory of flood fades Renewing Existing into the past, the motivation for action also passes away'.64 Infrastructure: Addressing l The lack of maintenance is a very serious the `Maintenance Gap' institutional and financial issue. `Since 1958, with the transfer of major development Pakistan has a very large stock of major works to WAPDA, provincial irrigation irrigation and bulk water infrastructure, with an departments' functions were reduced mainly estimated replacement cost of about US$60 to the operation and maintenance of the billion.66 Much of this infrastructure is very old, systems. PID managers have not been with major structures operating well beyond their finding these functions sufficiently design life. As described earlier, the services challenging, and over the years have lost provided by this infrastructure are critical for much of their initiative, innovativeness, and national well-being. But the services are only morale.The PIDs' attention remains almost forthcoming if the structures are maintained and, exclusively focused on the irrigation when their useful life is over, replaced. distribution network. Let alone the flood Neither the federal government nor any of the protection works, even the river barrages provinces in Pakistan has a modern Asset have been in a state of neglect. Whenever a Management Plan, and thus there are no major problem of a catastrophic nature takes reliable estimates of the annualized costs of place on a barrage or a flood protection replacing and maintaining this infrastructure. embankment, lack of adequacy of From international experience, a typical figure-- maintenance funds is given as a standard assuming regular maintenance--of replacement cause which in several cases would be valid and maintenance is about 3 percent of the value while in others not quite so. Deferred of the capital stock of water infrastructure,67 with maintenance has become a routine practice roughly a half of this being for replacement and with PIDs, which eventually results either in half for maintenance. Taking the case of Punjab a disaster or in a major repair and restoration (which has US$20 billion of water infrastructure undertaking in the shape of an independent managed by the Irrigation Department) this would project.'65 imply that the cost of replacement and maintenance of Punjab's stock of water resource In summary, there is a long tradition of excellent and irrigation infrastructure would be about professional flood management capability in US$0.6 billion a year. This would, using the 64 Paper 14. 65 Ibid. 66 Estimates prepared by Punjab IPD, September 2005. 67 The Australian experience shows that the average `renewals annuity', which includes the cost of both replacement and operations and maintenance, `is about 3 percent to 4 percent for older, and 2 percent to 3 percent for newer assets'. Personal communication, Golbourn Murray Water and the Murray-Darling Basin Commission, 2005. 60 The Challenges of the Present and the Necessary Responses benchmark ratios, mean that Punjab should be proportions of recurrent budgets--76 percent in investing an average of about US$0.3 billion a the case of Punjab--are spent on overstaffed year in replacement and a similar amount in irrigation department staff. The politics of these maintenance. In fact there is no budget for public enterprises is such that salaries have the first replacement, and the Government of Punjab's call on resources, with maintenance being a budget for maintenance is about 1.2 billion rupees, `residual priority'. Second is the fact that large or about 6.5 percent of the above benchmark amounts (especially in Sindh) are spent on keeping estimate of the cost of maintenance. Now there unnecessary public tubewells running.70 Third is are several reasons why the costs of replacement the reality that revenue collection is low and and maintenance may be somewhat lower than declining. If the true costs of maintenance are, the above benchmark, but the stark fact is that the say, 0.5 percent of the value of the stock of provisions for replacement and maintenance are a infrastructure (one half of the international small fraction of what is required to maintain the benchmark), then the annual cost of maintaining infrastructure stock in good condition. the system would be about US$15 (or Rs 900) And this shows. As described by Asif Kazi68 in per hectare.71 Actual abiana (water charge) the previous section, the cumulative effect of collection in Punjab, for example, amounts to neglect of the river barrages has left these strategic about Rs 150 per hectare. structures in a precarious state. Some recent events The result of this pattern of declining revenues in the form of breaches in the first line of protective and rising personnel costs is illustrated embankments in Sindh and the current situation schematically in fig. 3.40. In a financially well- at Sukkur Barrage, are clear evidences of structured irrigation system (such as that in accumulative neglect. In Punjab as well, at present, Australia), users pay for efficient operations, some six barrages have deteriorated to a point that maintenance, and replacement costs of the assets deferred repairs are now being undertaken as major which provide their services.The government pays `Remodeling Projects'. And Sarfraz Qureshi69 (reluctantly!) the interest on debt accumulated in describes: `the deteriorated condition of many the past. The system (see part (a) in fig. 3.40) is distributaries, minors and watercourses, and their clean and the incentives right (for the users to related structures such as gates and outlets-- demand efficient operations and maintenance seepage losses along these canals are often high (O&M), and replacement only of essential assets and their hydraulic performance low with the and that at least cost).The typical Pakistani system result that the system does not function as it was is much more complex (see part (b) in fig. 3.40). designed or intended.Thus, plots in different parts First, there is an extra `block of payment' to be of the command area, but especially near the tail made for the extra costs incurred by having large of these canals, would receive less water than was numbers of unnecessary workers. Second, the user intended.' Government of Punjab officials estimate payments represent only a small fraction of the that the delivery capacity of canals is 30 percent total money available for O&M (including below design because of the cumulative effect of salaries). Most of the O&M allocations are from deferred maintenance and lack of rehabilitation. the budget (that is, paid for by all taxpayers), but Three further factors exacerbate an already these amounts typically do not cover what is dramatic situation. First is the fact that large required for O&M, leaving an unfilled `deficit' 68 Paper 14. 69 Paper 1. 70 Van Steenbergen, personal communication in a review of an earlier draft of this Report. 71 An asset value of US$60 billion over 20 million hectares implies an asset per hectare served of US$3,000. 61 Pakistan's Water Economy Fig. 3.40: The financing of water services in Pakistan Financial Who pays Requirements Financial Requirements Who pays Interest Taxpayers Interest Taxpayers Replacement No one Replacement Users O&M Users Taxpayers Efficient O&M Excess Taxpayers man-power Users a. Australia b. Pakistan for O&M. At the top end, the interest on past practice' case, the stock of infrastructure grows fast investments is paid for by taxpayers. What this in `Stage 1' (referring back to the `Stages' illustrated means is that there is a yawning gap, paid for in fig. 2.18) and then tails off in Stages 2 and 3. neither by users nor taxpayers. This means that But as this stock grows, so the financial demands O&M is not done adequately and--since it is last for maintaining and replacing this stock increase. in the queue--there is no investment in replacing In the Pakistan case--arguably in Stage 2--the aging assets. stock is still growing, but the finance available for And it means that much of what masquerades maintaining and replacing that stock has fallen as `investment' is, in fact, a belated attempt to rather than risen. rehabilitate the crumbling infrastructure, both for Much of what is built is not being maintained, irrigation and for municipal water supplies. (Most and that which does still function, delivers services World Bank `investments' in water infrastructure of a low quality.This in turn reinforces the vicious are, in fact, not investment in new infrastructure, cycle--users who are receiving such poor services but an attempt to make some inroads into the reasonably refuse to pay, meaning that revenues huge liabilities from deferred maintenance.) decline still further, and the maintenance and The contrast between globallyaccepted good replacement gaps widen still further. Later in the maintenance-and-replacement practice and that Report, we look at some ways of trying to approach of the systems in the subcontinent--accurately the difficult but vital challenge of moving from a described72 as `Build-Neglect-Rebuild'--is vicious to a virtuous cycle.There is no silver bullet represented schematically in fig. 3.41. In the `good for this--it will need dramatic increases in the 72 Briscoe, John, and R.P.S. Malik, India's Water Economy: Bracing for a Turbulent Future, Oxford University Press, New Delhi, 2006. 62 The Challenges of the Present and the Necessary Responses Fig. 3.41: Depleting Pakistan's infrastructure stock Annual non-personnel Annual maintenance and investment replacement budget budget Good practice Infrastructure Stock Stage 1 Stage 2 Stage 3 Annual investment budget Practice in Pakistan Infrastructure Stock Annual non-personnel maintenance- and replacement budget Source: Bank Staff. efficiency of the providers of the public services, Figure 3.42 shows that whereas the United States it will require `transition plans' so that improved and Australia have over 5,000 cubic meters of services can induce greater confidence in the storage capacity per inhabitant, and China has services and willingness to pay for them, and it 2,200 cubic meters, Pakistan has only 150 cubic will require recognition of a simple financial fact: there are only two ways to pay for infrastructure-- Fig. 3.42: Storage per capita in different from taxes or from user charges. As long as semi-arid countries government is not prepared to do either or both cubic meters of these, there is no hope for building and per capita maintaining the infrastructure necessary for a more 6000 productive economy. 5000 4000 3000 Investing in Priority New 2000 1000 Infrastructure 0 alia USA India When river flow is variable, then storage is required China Spain ustrA Morocco akistanP Ethiopia so that the supply of water can more closely match water demands. Relative to other arid countries, Source: The World Bank analysis of ICOLD Pakistan has very little water storage capacity. data. 63 Pakistan's Water Economy meters of storage capacity per capita. And fig. 3.43 world. The dams of the Colorado and Murray- shows figures for some major arid basins in the Darling rivers can hold 900 days of river runoff. South Africa can store 500 days in its Orange river, Fig. 3.43: Days of average flow which and India between 120 and 220 days in its reservoirs in semi-arid countries can major peninsular rivers (fig. 3.43). By contrast, store in different basins Pakistan can barely store 30 days of water in the Indus Basin. 1000 When the Indus Basin Works were being 800 planned, it was clear that the construction of Tarbela and Mangla were not a `final solution', 600 for two reasons. First, because it was known that 400 the high silt loads from the young Himalayas 200 meant that effective storage capacity would decline over time (fig. 3.44) and that it was necessary to 0 y build further storage to replace this loss. And ado ling er ange ishna mada Indus second that at such low levels of storage there Or Kr Ganga Color y-Dara Nar Cauv were--see the storage-yield curve in fig. 3.45-- substantial benefits from increasing the overall Murr amount of storage in the system. The Pakistan Source: The World Bank analysis of ICOLD and Water Strategy (financed by the Asian GDRC data. Development Bank) and WAPDA's `Vision 2025' Fig. 3.44: Sedimentation and storage capacity 25 6 MAF from Kalabagh or 15.6 MAF Basha from Tarbela, Mangla, and 20 2.9 MAF Chasma from Mangla raising 18 MAF 15 MAF in age 10.4 MAF Stor 10 12.8 MAF of current capacity 5 0 1975 1985 1995 2005 2015 2025 Source: The World Bank, 2003. 64 The Challenges of the Present and the Necessary Responses (around 30 percent) and much lower still than Fig. 3.45: Storage-additional yield curve for the Indus developed countries (around 75 percent). Recognizing the value of power which is not 25 subject to market volatility, which generates 20 substantial local economic multipliers (the mostly yield ear 15 local construction content of hydropower is about Current MAF/y 10 storage 80 percent versus about 20 percent for thermal in Additional 5 level power), and which provides high-value peaking 0 0 10 20 30 40 Storage MAF Fig. 3.46: Benefits from Basha and Source: Lieftinck, 1968. Kalabagh Irrigation Power Flood have reviewed likely future demands and the 1500 implied requirements for storage. If no new storage is built, canal diversions will remain stagnant at 1000 about 104 MAF and the shortfall will increase by about 12 percent over the next decade. The 500 Pakistan Water Strategy calculates that Pakistan needs to raise storage capacity by 18 MAF (6 MAF 0 for replacement of storage lost to siltation and 12 Basha Kalabagh MAF of new storage) by 2025 in order to meet Source: Amir, 2005. the projected requirements of 134 MAF.73 Large dams do not only increase the assurance of water supply, but they can also generate Fig. 3.47: Development of economically- large amounts of electricity. Currently, about 30 feasible hydropower potential in percent of Pakistan's energy is generated from Pakistan in international context hydropower.74 Even though Tarbela is operated as 100% 90% an irrigation dam (with hydropower a `by- Japan 80% Europe product'), power benefits account for 60 percent North 70% America of the overall economic benefits from the dam.75 60% 50% And (as fig. 3.46 shows) power benefits would be 40% South 30% India America an even higher proportion of total benefits from China 20% either Kalabagh or Basha. 10% PAKISTAN Africa 0% As shown in fig. 3.47, Pakistan has used only 0 1000 2000 3000 4000 about 10 percent of its estimated 40,000 MW of Economically viable potential GWh/year economically viable hydropower potential, a Source: Lieftinck, 1968. proportion much lower than, say, India and China 73 Paper 10. 74 Paper 2. 75 ASIANICS Agro-Dev., `Tarbela Dam and related aspects of the Indus River Basin, Pakistan', Report prepared for the World Commission on Dams, ASIANICS Agro-Dev. International, Islamabad, Pakistan, 2000. 65 Pakistan's Water Economy power (which is likely to be worth about four times dam. In addition, social costs are not just a matter the value of a unit of base load), Pakistan is of numbers--whereas most of the involuntary planning for hydropower to provide about half of resettlement at Kalabagh would be to nearby areas, new generation in the medium term.76 in the case of Basha resettled populations would Deciding on which dam should be built have to be relocated long distances from their involves comparisons on many axes--economic, original homes.) financial, technical, safety, environmental, and Because hydropower produces such a reliable social--and multidimensional trade-offs. stream of revenues, it opens the possibility of Figure 3.48 compares some partial indicators attracting substantial amounts of private capital, (using a log-log plot) of environmental and social in a public-private partnership, in which the public impact of existing and possible future large dams sector takes those risks which it is best able to in Pakistan with other major multipurpose dams (including exploration, and the considerable in the world,77 using very rudimentary indicators. geological risks involved in any major dam This suggests that for Kalabagh the environmental construction) whereas the private sector can and social footprint is smaller than for most other shoulder those risks which it is best suited to large multipurpose dams; for Basha the footprint (including financing and operating the electricity is much smaller. While such comparisons provide generating station). For this potential to a first-order check, there are many other elements materialize, improvements have to be made in a to be factored in before coming to any conclusion number of other aspects--including contracting on the relative merits of specific dam sites. (For and pricing practices, the electricity market example, while the design of Kalabagh is well structure and trading rules, water rights, and water advanced, this is not so for Basha, where there are use priorities. In addition, environmental and considerable questions about the safe height of a social risks play an important role in the response of the private sector which is usually more inclined to invest in run-of-the-river projects, of which Fig. 3.48: Partial environmental and there are a substantial number in Pakistan. social indicators for some multipurpose dams At the time of planning of the Indus Basin works, it was recommended that planning for the 100 Mangla Indira Sagar Akosombo next major dam on the Indus should commence Sobradinho Three Gorges Aswan MW after the construction of Tarbela and Mangla was Tehri Kariba Kalabagh per complete. Thirty years later, after an enormous Tarbela Ataturk amount of discussion, no decision has been taken 10 Basha to proceed with the construction of the next dam. The most frequent ostensible reason is that it is submerged already-privileged Punjab which will be the major Area beneficiary. As part of the 1991 Accord, the shares 1 of any increase in water available as a result of 1 10 100 1000 10000 People displaced per MW new storage are clearly allocated. As shown in fig. 3.49, this part of the Accord has a strong Source: Ledec, 2003. redistributional component, with the smaller 76 Paper 4. 77 Supplementing data presented in `Good Dams and Bad Dams', George Ledec and Juan Quintero, The World Bank, 2003. 66 The Challenges of the Present and the Necessary Responses disproportionately benefit Punjab? In part, this is Fig. 3.49: Who benefits from new Indus for legitimate and necessary reasons (such as the storage? resettlement of substantial numbers of people, and Current Additional Proportion lack of transparency about who would get the 60 5 royalties from power generation), partially 50 4 for legitimate but resolvable reasons (lack of 40 xisting ater 3 tion transparency and trust in the implementation of w 30 of 2 the allocations under the Accord), and partially %20 Propor because the discussion of dams has become a 10 1 additional/e vehicle for a host of remotely or unrelated historical 0 0 Balochistan NWFP Punjab Sindh and current political grievances.78 It is obvious what the federal government needs Source: Water Accord and Bank Staff. to do. The federal government needs to give priority to the development of infrastructure in provinces (Balochistan and NWFP) getting much Balochistan and NWFP to enable them to utilize larger shares of the `new water' than they have of their allocated shares in the apportionment accord existing allocations. The shares of both Sindh from the existing storages and storages to be and Punjab would be less than their shares of created in future including shares out of flood `existing water', with Punjab, in relative terms, flows.79 Government must also provide objective being the biggest loser. Why, then, such hostility, and understandable information (as has been and the perception that new storage would done, at least in part, as shown in box 3.3). More Box 3.3: Public information on Kalabagh Dam (an extract) Apprehensions of Sindh (i) The anxiety that the project would render Sindh into a desert. (ii) There would be no surplus water to fill Kalabagh reservoir. (iii) High level outlets would be used to divert water from the reservoir. (iv) Cultivation in riverine (Sailaba) areas would be adversely affected. (v) Sea water intrusion in Indus estuary would accentuate. (vi) Mangrove forest, which are already threatened, would be further affected adversely. (vii) Fish production and drinking water supply below Kotri would be adversely affected. Answers: (i) Dams don't consume any water. Instead these store water during flood season and then make it available on crop demand basis for the remaining dry periods of the year. The real demonstration of this came after full commissioning of Tarbela Dam in 1976. During pre-storage era of 1960­67, average annual canal withdrawals of Sindh were 35.6 MAF. After Tarbela the corresponding figure rose to 44.5 MAF with over 22 percent increase in the rabi diversions alone increased from 10.7 to 15.2 MAF. It is estimated that after Kalabagh, canal withdrawals of Sindh would further increase. (ii) WAA of 1991 has allocated, on the average, about 12 MAF additional supplies to the provinces almost all of which is in kharif season. On the other hand, factually the surplus water is available only within 70­100 days flood period. It is estimated that to provide additional allocated water over the (Contd) 78 Khaled Ahmed, `Sindh: The feel-bad factor', Friday Times, Lahore, May 2005. 79 Paper 13. 67 Pakistan's Water Economy Box 3.3 (Contd) year, a storage of about 3.6 MAF would be needed (out of this, 2.2 MAF would be in the early kharif season of April to July). (iii) Initial studies have indicated that construction of high level outlets at Kalabagh is economically unviable. Notwithstanding this, if any province wants to build, then its share of water would be strictly governed by WAA, 1991. (iv) a. An impression is also prevailing that with Kalabagh Dam, riverine areas of Sindh, commonly called `Sailaba' would go out of production due to control over floods. It can be appreciated from configuration of riverine area that Sailaba crops are grown on the land adjacent to main river and the creeks. Though crops are sown on the soil moisture soon after the floods, these need more than one watering to mature. As a result, Sailaba lands give poor yields. Consequently, farmers are generally required to provide irrigation facility through shallow tubewells or lift pumps. Prime movers on these tubewells have to be removed during the flood season to avoid damage. b. Sindh has presently 660,000 acres of Sailaba cultivated area from Guddu Barrage to the sea. This area is initially sown due to the moisture provided by flooding with river stage of 300,000 cusecs and above. c. Flood peaks above 300,000 cusecs would still be coming after Kalabagh, without much detriment to the present cultural practices, while large floods would be effectively controlled. This would, in fact, be conductive to installation of permanent tubewells to provide perennial irrigation facility in riverine areas. Towards this end, a separate scheme is being included in NWRDP. (v) a. The fear that present extent of sea water intrusion in the Indus Delta would be further aggravated by Kalabagh is not substantiated by factual data. Studies indicate that presently the total effect of the Indus estuary is only limited to the lowermost portion of the Delta and gets dissipated below Groh and Chowgazo. Gauge heights at Garho are completely insensitive to Indus discharges of up to 700,000 cusecs. Therefore, the sea water intrusion, which seems to be at its maximum even now, is unlikely to be aggravated further by Kalabagh Dam. b. Another apprehension is that sea water intrusion into existing aquifer system would cause serious quality deterioration. The groundwater contained in the aquifer is effectively saline as far north as Hyderabad. Therefore, intrusion of sea water along the shoreline of the Delta is of little consequence. This is further supported by the fact that there is southward oriented groundwater gradient throughout this aquifer. Considering the very low transmissivities of the aquifer in the Delta region, upward sea water intrusion can be almost ruled out. (vi) a. Out of the total 1.53 million acres (MA) tidally inundated historic Indus Delta, mangrove forest cover an area of almost 0.32 MA. In this forest, spreading from Karachi in the west to Rann of Kutch in the east, 95 percent of the population now consist of a salt tolerant variety. b. Extent of the active delta area (as distinct from the historic delta area described above) is about 294,000 acres. Out of this, the mangroves cover only 7,400 acres or 2.5 percent of the area. Most of the remaining area is in the form of mud-flats. The reason for this area being too small could be a combination of factors. Recently, NED University of Engineering and Technology has carried out a study titled `What Really Threatens Us and Our Mangroves'. This brings out that reduction in mangroves is essentially due to frequency of tidal inundation being too small instead of fresh water reduction caused by upstream abstractions, which started with Sukkur Barrage in 1932. Other major causes are uncontrolled overgrazing and cutting due to extreme population pressure of Karachi. c. Therefore, in order to revive the mangroves, real need is for replanting salt tolerant varieties with provision for controlled doses of fresh water. Obviously, this possibility would be much enhanced with an upstream storage facility like Kalabagh. (Contd) 68 The Challenges of the Present and the Necessary Responses Box 3.3 (Contd) (vii) a. A recent study has shown that there is no clear evidence to suggest that fisheries stocks in the river reach below Kotri have declined due to progressive reduction in the surface water supplies. On the other hand, fish production has been constantly increasing as indicated by statistical data. As such, Kalabagh Dam is unlikely to have any adverse effect on fish production in the area. b. In the riverine area downstream to Kotri Barrage, groundwater is predominantly saline or brackish and as such unsuitable for either irrigation or water supply. After Kalabagh, winter supply in the river would improve, thus assuring more drinking water. Source: Government of Pakistan web site http://www.infopak.gov.pk/public/Kalabagh_Dam.htm. fundamentally, the federal government needs to Fig. 3.50: Urban water supply coverage do everything possible to improve the transparency and trust in the implementation of the current 1980 1995 1999 allocations under the Accord. Here, as described 100 earlier in Chapter 2, the federal government would 90 80 be well advised to appoint a neutral auditor who 70 60 would have the resources to measure all % 50 abstractions from the system and to report these 40 30 in a public and transparent way. The federal 20 government also needs to conclude, as it plans to 10 0 do, the long-in-abeyance dispute about releases to the delta. It is important, too, to actively address NWFP (urban) Punjab (urban) Sindh (urban) the other legitimate issues relating to new Balochistan (urban) storage--Who will pay? Who will get the contracts? Who will be employed during Source: Siegmann and Shezad, 2005. construction? Probably most important of all is who will get the hydropower royalties--will it Fig. 3.51: Rural water supply coverage remain the anachronistic practice which specifies that `whoever has the powerhouse gets all of the 1980 1995 1999 royalties', or will it evolve into a more logical 100 approach whereby royalties are divided depending 90 80 on location of dam, power house, area submerged, 70 and population to be resettled? 60 % 50 Finally, with each of the many delays in the 40 30 past, the economic and social costs for any of the 20 major options have risen substantially because of 10 0 increases in property values and population growth lar lar lar in the areas of the proposed dams.80 Further delay NWFP ru() Punjab ru() Sindh ru() al) is not in the interests of the country. ur Balochistan (r In addition to the bulk water, irrigation, and Source: Siegmann and Shezad, 2005. hydropower infrastructure, Pakistan needs to make 80 Paper 10. 69 Pakistan's Water Economy substantial investments in water supply and of highly subsidized water ranges from 340 liters sanitation facilities for those who do not have per day per capita in high income areas to 60 liters services in both rural and the rapidly-growing per capita per day in slum areas.81 In all cities many urban areas. Figures 3.50 and 3.51 show reported of the poor depend to a large extent on private water supply coverage figures for, respectively, tanker trucks, and end up paying 10 or more times urban and rural populations in different provinces, per cubic meter than do the rich who receive the and figs. 3.52 and 3.53 show the official WHO/ subsidized services through house connections. UNICEF figures for 2002. There are obvious On the sewerage side, the situation is similar. problems with the data. As in other developing The rich get subsidized sewers; the poor live in countries, these numbers are probably a better often appalling sanitary conditions. The world- indication of the infrastructure that has been built renowned Orangi Pilot Project in Karachi,82 than the services that are actually provided--there conceived and implemented by the remarkable are large numbers who do not have adequate duo of Akhter Hameed Khan and Arif Hasan, services.The instability of the reporting (especially provides sewerage services to over a million poor for rural areas) suggests that there is considerable people and provides many lessons which can and uncertainty about actual coverage. And the 2002 are being emulated on a larger scale. The key WHO/UNICEF figures show coverage levels for lessons include: how poor people, just like rich both water and sanitation to be twice as high in people, want good quality services; how poor Pakistan as in not-obviously-worse-off India. people can transform their environment if they The large subsidies, justified in the name of the are `liberated from the demobilizing promises that poor, in fact benefit those who get water (people politicians never plan to fulfill'; how costs can be who can exert influence on rationed supplies, and reduced to a small fraction of `standard costs' by are therefore not the poor) and those who use a technical innovation, elimination of corruption, lot of water (the middle class and the rich). In and mobilization of self-help labor; how important Karachi, for example, daily water consumption it is to have high-quality, technical-cum-social mobilization support; and how, eventually, there Fig. 3.52: Improved water supply coverage Fig. 3.53: Improved sanitation coverage 1990 2002 1990 2002 100 100 80 60 80 40 60 20 40 0 Urban Urban Rural Rural 20 covered household covered household connection connection 0 Urban Rural Source: WHO/UNICEF, 2004. Source: WHO/UNICEF, 2004. 81 Paper 2. 82 The World Bank, Environment and Development, The World Development Report, Washington DC, 1992. 70 The Challenges of the Present and the Necessary Responses must be a partnership between the informal sector Indus Basin. Water scarcity in these areas is extreme (which can handle much of the local infrastructure and has led to unsustainable exploitation of better than the municipality) and the government groundwater, rangeland, and forests. Small dams (which must build the bulk collection and on perennial and non-perennial streams to capture wastewater treatment facilities). seasonal runoff, especially flood flows, have been The primary immediate challenges for the water an important means of water harvesting and water and sanitation sector are to extend services to the development in the barani areas of Pakistan for unserved, to improve the quality of services to many years. Water stored in a reservoir is used those who are nominally served, and to find principally in two ways: first, seepage from the mechanisms which are much more efficient and reservoir adds to the natural recharge of ground- accountable in order to do this. This will mean water, increasing water supplies for both irrigation going beyond the traditional public utilities and and drinking water; and second, water can be mobilizing the resources and innovative capacity drawn directly from the reservoir by a canal or of community organizations (like the Orangi Pilot pipe to meet these same purposes. When Project) and the private sector, large and small, conditions are favorable, reservoirs are also domestic and international. potentially valuable fisheries and small-scale A recently completed study calculates the costs sources of hydropower.85 of providing proper WSS cover to 90 percent of There is a long history of constructing these Pakistan's population as US$4.8 billion, with types of dams and water harvesting structures in associated annual recurring costs of over US$828 Pakistan and there is a high demand for them from million.83 By comparison, current total capital and farmers and villagers in barani areas.There are few recurrent spending on the water and sanitation options for water development in these areas other sector is about US$120 million a year.84 It is, than to capture the annual, though highly variable, therefore, imperative that users, especially the non- flood flows. Groundwater is used for village water poor, pay a much greater proportion of the costs supply and for limited irrigation, but overuse in incurred in providing the water and sanitation many areas where it is available has resulted in a services they receive. And it is equally important precipitous decline in the water table and steadily to increase investments, and the returns to these, rising cost of pumping. These projects are seen because the sanitary conditions of cities and towns as contributing significantly to groundwater (as described earlier) are imposing large health, recharge,86 and if the site is favorable, introducing economic and environmental costs, and these can a new source of surface water for farmers and only be built and operated with public funds. villagers. An informal Bank study done in connection Is Enough Attention Being Given to the Barani with Drought Emergency Recovery showed that Areas of Pakistan? The problem is somewhat the cost of water is extremely high in these projects different in the extensive barani areas outside the and that little attention has been given to 83 Paper 3. 84 Paper 8. 85 For example, if rainfall is higher, streamflow may extend over several months in addition to the relatively short duration flood flows, in which case proportionately more water can be stored for a longer period if the site has sufficient reservoir capacity. However, since the prevailing conditions over most of the year are arid to semi-arid, there must always be a concern for the higher evapotranspiration losses that stem from storage of water in an open reservoir. 86 There appears to be little systematic study and analytical results on which to base estimates of the amount of recharge possible or the extent of its influence at a particular site. 71 Pakistan's Water Economy command area development. Many in Pakistan or the project should not be implemented. Rather, would argue that because there are so few the conclusion was that government should insist development options in these areas (large) on a much higher standard for the planning, government subsidies involved are not only design, and implementation of these projects warranted but obligatory. But the point of the to minimize whatever subsidy is required and study was not that subsidies should not be given maximize the real benefits people receive. 72 What Needs to be Done CHAPTER 4 WHAT NEEDS TO BE DONE While Pakistan still needs to invest in some major in water management in Pakistan today is to design water infrastructure, it is clear that the major a set of instruments--the rules of the game that challenge facing the country is to more effectively determine how people use and dispose of water-- manage both the water resources (and the that are better aligned with the looming resource, associated natural resource base) and the water environmental, financial, and economic challenges services. The evolution also shows that the facing Pakistan. What would an incentive-based major successes of recent decades--in increasing approach to water reform in Pakistan involve? production, and in controlling waterlogging and Most fundamentally, as suggested in fig. 4.1, it salinity--have been driven primarily by the action would require a major change in the role of the of private individuals pursuing their own goals. state. The government would allow others The review shows three worrying realities: first, (including the private sector) to compete for the that in coming decades unmanaged action by right to provide water and irrigation services, while private individuals is likely to give rise to major the government would turn its attention to the problems (especially with groundwater); second, financing (and in some cases the delivery) of major that the demands on government to perform, both storage, flood control, sewage treatment, and other as service provider and regulator, are going to be public goods, and would have as its central task much greater; and third, that government policies the development and implementation of an have not yet internalized the fact that the principal integrated package of instruments--entitlements, challenge is to formulate a set of `rules of the game' pricing, and regulation--which would structure that will provide organizations (irrigation the relationships among water users so that water departments, urban utilities, and private farmers) is used efficiently, and environmental and financial with the incentives to do what is in the greater sustainability is assured. common good. Many countries have had to Many discussions of water reform in Pakistan address similar challenges in the water and other (and elsewhere) focus on organizational issues-- sectors, and out of this experience has come a the perennial favorites being Water Users' different vision of what constitutes a modern Associations (WUAs) and issues such as a National institutional structure for addressing water Water Council. The perspective of this Report is management challenges. that emphasis should be on instruments, not organizations. Accordingly, this section describes each of the central instruments that would form Principles for a Modern part of an institutional package of reforms, Institutional Structure stressing continuously that this is an integrated package in which the whole is more than the sum There is growing recognition, evident in most of of the parts. the background papers by water experts in Consider, for example, the issue of irrigation Pakistan, and in the discussions with experienced services. In his excellent book on the political Pakistan water managers, that the principal task economy of water in South India, David Mosse1 1 David Mosse, The Rule of Water: Statecraft, Ecology and Collective Action in South India, Oxford University Press, New Delhi, 2003. 73 Pakistan's Water Economy Fig. 4.1: The desired evolution of functions and actors FUTURE PRESENT of services sector 1. Publicprovision private by the vtsuppliers 2.Services non-go other and 3. Informal provision of services goods 4. Public provisionof public 5. Enabling environment functions not performed enabling 6.A functioningenvironment describes the necessary set of interlocking changes Fig. 4.2: The basis for sound irrigation well: `Since irrigation involves wider hydraulic service provision systems which are beyond the control of WUAs and which inevitably render them dependent upon the state, farmers' organizations have little chance of surviving as independent self-managed social organizations. The next step, therefore, does not ytilitu lie in knowing how to organize farmers' organizations...but how to overhaul the ticipation administrative system so that the state irrigation Par entitlements elbatnuoccA departments and farmers can be bound into ater productive relations. Participatory Irrigation W Management (PIM) cannot become a reality nor can it become self-sustaining without the restructuring of state irrigation departments... structure which is put in place. It is to the key What is striking in PIM programs is how little elements of this incentive structure that we now attention is given to water rights.The government's turn our attention. rights to water are unchallenged, while its obligations to deliver water to WUAs are rarely Instruments legally binding...'. In short, as illustrated in fig. 4.2, a sound irrigation service model requires The variety of problems now in full bloom in the mutually reinforcing changes in all three `legs of Pakistan water sector have been evolving for some the stool'. time, and have been the subject of considerable The key to putting this `new institutional reflection by the government and others. Consider, structure' in place, therefore, has less to do with for example, the conclusions which have emerged the familiar preoccupation of how organizations from discussions of the irrigation sector, are structured, and more to do with the incentive summarized by two of the principal actors in these 74 What Needs to be Done reforms:2 `In the 1990s, after consultations with matter is less organizational form and more the international agencies, the Pakistan government instruments which govern relationships among the embarked on major institutional reforms. At the various actors. What are some of the critical provincial level, the three-tiered system of PIDA, instruments (bearing in mind that there is no silver AWB, and FO was established, through the PIDA bullet, but that the art is of constructing an Acts (1997). The FO was to supply water to enabling environment of mutually supportive and irrigators, be responsible for levying and collection mutually consistent instruments)? of water charges, and make payments to the AWB. The operating public utility would be the AWB, Unbundling and Competition with an average command area of 600,000 As discussed elsewhere in this Report, the poor hectares. It would be established at the level of quality of public infrastructure is a pervasive one or more canal commands, of which there are problem in Pakistan. Studies throughout the 43 in the Indus Basin irrigation system.The AWB world3 have shown that where industries have to would manage and distribute irrigation water, self-provide, costs of production go up sharply, through formal volume-based contracts with FOs, competitiveness is reduced, and economic growth and trade water with other utilities. The PIDA is dampened. The self-provision of water supplies would be responsible for such functions as is just one manifestation of a far broader break- province-wide water delivery, system maintenance down in public infrastructure in Pakistan. A recent and development, and sales of water beyond survey4 shows that 42 percent of Pakistan's amounts contracted with AWBs.' There has been manufacturing entities have captive power some progress made in implementing this model, generating units--a figure which is just 16 percent especially in Sindh. Punjab, the province with the for China, and 17 percent for Brazil. largest irrigated area, played a major role in The provision of formal irrigation and water articulating this vision, but then, with a change of supply services in Pakistan is the virtual exclusive leadership, did not choose to put the model into monopoly of government agencies, which do practice to any significant degree. Punjab is, once not provide services to many--especially the poor again, engaging with the reform process, and and tail-enders--and provide poor quality services expects to make major progress in developing a to those who do have access. The situation in `Punjab model' which is consistent with the spirit Pakistan remains one in which public monopolies and logic of the above reforms, but is adapted to face no competition either `in the market', or `for the varying conditions in the province. the market' (where head-to-head competition is While some progress has been made, it is also not possible). increasingly clear that reforms focussed on WUAs The one overriding lesson from the global alone is like trying to sit on a stool with one leg revolution in the provision of public services is that (to use the image captured in fig. 4.2). And competition matters. In some cases, competition the discussion has focused far too much on `in the market' is possible. For example, it is organizational forms, when modern institutional technically quite conceivable in the large irrigation theory and practice tell us that the heart of the systems to unbundle the bulk and distribution 2 Paper 7. 3 Kyu Sik Lee, `Costs of infrastructure deficiencies in manufacturing in Indonesia, Nigeria and Thailand', Policy Research Working Paper WPS1604, The World Bank, 1996. 4 Omkar Goswami, `The urgent need for infrastructure', The Economic Times, Delhi, 25 April 2005. 75 Pakistan's Water Economy functions and then have a variety of forms-- (This latter factor has, arguably, been the single cooperatives, the private sector--for providing biggest advantage of the introduction of the distribution services to farmers. As has happened private sector in other countries. In the US, for elsewhere, such changes would unleash a chain of example, public water utilities have improved, in healthy systemic changes which would transform large part, as described in a study by US National the business of the provision of public services. Academy of Sciences,5 `because if public utilities First, it would require a clear contract between did not improve they would be taken over by the the bulk provider (the Irrigation Department) and private sector'.) the non-governmental provider which would Until quite recently it was assumed that the define the rights and responsibilities (for water and private sector could play a role in the provision of for payments) of both parties.The absence of such formal water services in cities and towns, but that contracts is one of the major reasons why the this would never happen in irrigation. Indeed, the monopoly providers remain unaccountable to mix of public and private financing for the users, and information remains so poor and provision of services does vary widely for different opaque. As always, discretion and lack of types of infrastructure (fig. 4.3). accountability are the handmaidens to corruption. But recent developments have shown that while Second, it would require that costs are `revealed', most canal irrigation services will remain in public and the distinction between legitimate costs and hands for the foreseeable future, the private sector those--such as massive overstaffing--which can play the same stimulating, competitive role should not be passed on to users.Third, the entry that it plays in water supply. Political leaders in of private and other non-governmental providers Punjab have raised the possibility of `professional would naturally lead to comparisons between the management' contracts, whereby a canal costs and quality of services provided by different command would be given under management providers, and thus pressures--for the first time-- contract to a private sector operator who would on public providers to improve their performance. operate under license to provide farmers' Fig. 4.3: Typical public and private roles in the provision of infrastructure Public Private ü Run-of-the-river hydro ü Multipurpose dams ü Thermal power generation ü Solid waste ü Sewerage/Sanitation ü Bulk water supply ü Gas ü Rural electrification ü Passenger trains pipelines ü Bus transport ü Rural water ü Metro ü Roads Rail freights ü Telecoms ü Rural roads ü Urban water supply ü Canal irrigation ü Groundwater irrigation 5 National Research Council, Privatization of Water Services in the United States: An Assessment of Issues and Experience, Washington DC, 2002. 76 What Needs to be Done organizations with their water entitlements. In discussion and transparency are as important as other countries--for example, Chile and technical information. In some cases,9 technical Morocco--the authorities have gone further and benchmarking information has been given out `reverse concessions', whereby private supplemented by `accountability' scorecards in operators operate public irrigation systems, with which users are directly asked their perception of the `winning operator' being the one that requires critical service issues. the smallest subsidy to provide the services. The stimulation of `competition in the Similarly, in the historically public business of irrigation distribution market' is of high priority. wastewater treatment, there is much innovation It will require a lot of technical assistance from taking place. In relatively advanced developing professionals from countries who have done this countries, typically less than 25 percent of sewage (with Australia being a `best practice' case). treatment plants actually function.6 Three years Important questions include: How does one ensure ago, the federal government in Brazil took an a level playing field? How might workers in the innovative approach to this problem. It set up a irrigation departments be encouraged, as was done fund called `Compra de Esgoto' (or `buying treated in Mexico City,10 to form their own irrigation sewage') whereby municipalities are paid for the services companies, thus ensuring that their production of treated sewage, not for the expertise is put to work, that resistance to the construction of treatment plants. The program is change is reduced, and even that this helps retrench working well, and producing much better outputs a heavily overstaffed state? How should auditing than the traditional `pay for inputs' approach. of performance, and flows of water and money be In recent years there has been a lot of discussion done so that audits are trusted by all? How does about `benchmarking' in irrigation services, one write enforceable contracts `up' between the worldwide and in Pakistan. The International service provider and the government, and `down' Commission on Irrigation and Drainage and between the service department and the users? others have developed a useful set of practical tools These issues are being incorporated into new for `benchmarking' of irrigation services,7 and the World Bank-financed irrigation projects, and will Asian Development Bank has produced similarly be given high priority and supported with the important material for comparing the necessary technical assistance and capacity performance of water utilities across Asia.8 The building. common reaction to these materials has been for In the urban water sector there has been some the public utilities to see these as technical inputs, progress, and some roadblocks. The progress to be considered by the engineers of the agencies concerns some NGOs who have been very when considering if and how they might change successful in dealing with the `internal' issues of their modus operandi. sanitation--in the OPP case described earlier this This misses the central value of such tools, has meant self-financed, self-maintained sewers for which is to expose monopolies to forms of over a million people, something which has been `comparative competition', and in which public achieved only in few other countries in the world. 6 The World Bank, `The Environment and Development', The World Development Report, Washington DC, 1992. 7 Molano, H., and M. Burton, `Guidelines for benchmarking performance in the irrigation and drainage sector', IPTRID Knowledge Synthesis Report 5, 2001, www.fao.org/iptrid. 8 Asian Development Bank, Utilities Data Book, Manila, 2003. 9 Public Affairs Centre, Towards user report cards on irrigation services: Learning from a pilot project in India, Bangalore, December 2002. 10 Manuel Contijoch, personal communication. 77 Pakistan's Water Economy In many ways, the central idea of the OPP Regulation approach is similar to that of the WUAs in irrigation--that local infrastructure can be better A cornerstone of modern institutional arrange- managed, and even built and financed by well- ments is the separation of regulation from organized local people with effective outside provision. To date, government agencies in the technical assistance. And just as theWUAs depend water sector in Pakistan have seen their role on the irrigation departments doing their work primarily as one of provision, and have done little beyond the outlet level, specifying the water on regulation, even when there is a legal framework entitlements of the WUAs and providing these in in place for this (as in the case of the Water a predictable, accountable and transparent way, Accord).There are two fundamental areas in which so too does the OPP `pass responsibility' to the government regulatory capacity must be Karachi Development Authority for the `external' developed--in regulating the delivery of services, infrastructure (sewer mains and treatment plants). and in regulating the use of water resources. The one difference, of course, is that the water On the service side, the government should flows from the bulk supplier to the user and the understand that its fundamental role is to provide sewage in the opposite direction, making these an enabling environment, and a regulatory sewage cooperatives much less dependent on the capacity, to ensure that there are modern, fair, and performance of the bulk infrastructure manager. enforceable contracts between providers (public, On the urban side there have also been several private, and NGOs) and users, both in irrigation efforts at breaking up the public sector monopoly and water supply and sanitation. Where the public and introducing the private sector. These are sector does continue to play a major role as a described in detail in the background paper by service provider (as will be the case for the Khurram Shahid.11 The most prominent case was foreseeable future) it is important that these public that of Karachi, where `the government was service providers are corporatized, and their pressurized by labor unions and NGOs (who operations ring-fenced from the regulatory and merely wanted KWSB to remain in the public policy operations of the government. Public sector) and eventually the project was scrapped providers, just like private and NGO providers, following a decision by Sindh High Court that should have contracts with users (which specify water is a national asset and cannot be handed the rights and responsibilities of both parties, over to private foreign companies. The case is still especially with regard to water and money) and pending in the Supreme Court of Pakistan.' Partial should be subject to effective, transparent attempts were also made in Lahore, Islamabad, regulation, the objective of which is to compare Sialkot, and Hyderabad, but in an amateurish obligation with delivery, and to stimulate manner, with a single provider and without competition by publishing benchmarking transparency, that was doomed to failure.12 The information. A key requirement, therefore, is that Government of Punjab is, appropriately, restarting the government develop regulatory capacity for a process for Lahore, but this time ensuring that balancing the disparate interests of the providers, the process is managed according to best the users, and the government itself (as shown in international practice. fig. 4.4). This is all quite new for the water sector 11 Paper 8. 12 Ibid. 78 What Needs to be Done surface water side, there is, in many ways, already Fig. 4.4: Participants in modern regulation a sound basis for the regulation of surface water supplies in place, via the entitlements which are defined in the Water Accord and which, in many Government ways, are also partially defined down to the level of individual users (discussed in more detail in the next section). The biggest challenge of all on the water Regulator resource side is that of groundwater management Users Utility (which has to, of course, eventually be integrated with the surface water entitlement and regulatory system). Global experience shows that moving from an anarchic groundwater management in Pakistan, but there is a lot to learn from the system to one where there is a balance between experience of other countries which have put such abstractions and recharge is a very difficult one, frameworks into place (Australia being an excellent which is less than perfect even in very good example, because the reforms there have focused governance environments. Experience also shows heavily on competition and a level playing field, that command-and-control type of approaches-- and have allowed both public and private service `prohibiting more abstractions'--simply do not providers to continue an active role. See the web work, again even in relatively easy environments.14 sites for Water Services Association of Australia, The essential ingredients of `the least unsuccessful for example www.wsaa.asn.au). The emerging approach' are clear.15 Groundwater management experience with a similar model in Maharasthtra13 requires: a legal framework which constrains the in India is also of relevance. And water regulators rights of people to pump as much water as they can also draw on the growing experience in wish from their land; the definition of Pakistan with independent regulation in other groundwater entitlements, with the latter usually service sectors (such as the telecommunications based on historical use and subject to modification and electricity sectors). should the total entitlements exceed the sustainable It will take some years and a process of trial yield of the aquifer; strong government presence and error to find the right forms for such service to give legal backing for the development of regulation, especially in a sector in which the participatory aquifer management associations and notion of contracts and competition and to provide the decision-support systems which transparency have been almost entirely absent. It enable aquifer associations to monitor their is critical to take a learning approach to this, and resource; and, above all, clarity that the primary not to see the first signs of difficulties as a reason responsibility for the maintenance of the resource to go back to `the old ways'. on which they depend is with those who have The second area where regulation is essential is entitlements to use water from a particular aquifer. in the management of water resources. On the There are many difficult technical details to be 13 Maria Saleth, `Water Rights and Entitlements', as quoted in J. Briscoe and R.P.S. Malik, India's Water Economy: Bracing for a Turbulent Future, Oxford University Press, New Delhi, 2006. 14 White, Stephen E., and David E. Kromm, `Local groundwater management effectiveness in the Colorado and Kansas Ogallala Region', Natural Resources Journal, Vol. 35, 1995. 15 Kemper, Karin, and John Briscoe, Mexico: Policy Options for Aquifer Stabilization, The World Bank, 1999. 79 Pakistan's Water Economy worked out--for example, the trade-off between the background papers emphasize the importance hydrological reality (which suggests very large of this issue. Faizul Hasan17, for example, in an aquifer associations in the Indus Basin, since all excellent and comprehensive review of water the aquifers there are connected) and the entitlements in Pakistan, concludes: `...ownership transactions costs of including large numbers of rights are necessary to realize efficiency gains, small farmers (which argues for smaller improve equity of distribution, legitimate water associations). Experience in other very large sales, reduce deficit, and promote long term aquifers (such as the Ogallala aquifer which runs investments. Lack of individual water rights from Minnesota toTexas) shows that it is perfectly does not give tail-end users legal basis for any practical to chop a single aquifer up into a large formal claim or loss of canal water resulting from number of `semi-independent' aquifers which are miss-appropriation by head-reach users.' run by a reasonable number of users.16 In the Indus Shahid Ahmad18 reports: `...farmers now Basin, this would suggest that the canal command, increasingly complain of inflexibility of the IBIS or possibly the distributary, would be the and demand more flexible water allocation, appropriate specification of the `social aquifer distribution, and utilization rules, which also allow unit'. In this case it is essential that the best does water trading among the water users.' not become the enemy of the good! And it is Earlier sections of this Report showed that in important to start with several logical possibilities many respects Pakistan has a very good base-- suggesting themselves, including: formation of an unquestionably one of the best in the developing aquifer management association for Pishin district world--because surface water entitlements around KK Bund in Balochistan, where (usufructuary rights) in the Indus Basin are already groundwater is being heavily overdrawn to the clearly specified at the national, provincial, and detriment of all; and formation of aquifer canal levels, and, through the warabandi at the associations based on the geographical areas level of individual farmers. What is missing now covered by well-functioning farmer organizations is the transparent implementation of these (or possibly even Area Water Boards) in Sindh and entitlements and, eventually, the extension of the Punjab. The critical thing now is to make a start, entitlement approach to cover both surface water because it will take time and effort to develop an and groundwater. effective model, and every day that passes, the costs Once this is done, such a management system of delay (in terms of stabilization of the aquifer at will give rise to a series of fundamental and healthy a deeper level) imposes escalating costs on farmers changes. First, those requiring additional water and the environment. (such as high-value agriculture, and people living in growing cities) will frequently be able to meet Water Entitlements their needs by acquiring the entitlements of those Chapter 2 argued that Pakistan will not be able to who are using water for low-value purposes. successfully address the many service and resource Second, there are strong incentives for low-value management challenges it faces without the water users to voluntarily `forebear' from use, implementation of a transparent and enforceable making reallocation both politically attractive and system of water entitlements at all levels. Many of practical. Since water allocation in Pakistan is close 16 White, Stephen E., and David E. Kromm, `Local groundwater management effectiveness in the Colorado and Kansas Ogallala Region', Natural Resources Journal, Vol. 35, 1995. 17 Paper 6. 18 Paper 5. 80 What Needs to be Done to becoming a zero-sum game, such voluntary, groundwater, in an environment in which consensual approaches to water reallocation are governance is weak. Nonetheless, the last ten years vital. Third, the establishment of formal water have seen enormous progress globally in the use entitlements gives rise to strong pressures for of formal water entitlements--with well- improving the data required to manage the functioning systems now working in Australia, resource. And fourth, this reduces the pressures Chile, Mexico, Argentina, and South Africa. of a `race to the bottom of the aquifer', since those (box 4.1, from Australia, provides a particularly who have entitlements have a powerful interest in clear description of the central but quite different the sustainability of the resource base. roles of water entitlements and pricing in This is not to imply that the administration of sustainable water management.) It is noteworthy such a system is simple, for canal water, let alone that all such established systems are working, often Box 4.1: Water entitlements are the principal mechanism for ensuring efficiency, sustainability, and voluntary reallocation of water Letter to the Editor, (The Economist, July 2003): Your special survey on water (`Priceless', July 19) embodies in its title a prejudice that experience from the real world rarely justifies. You refer specifically to the experience of the Murray-Darling (M-D) basin. In the M-D, water use is constrained to equal the sustainable supply through a complex system of water rights, defined in terms of volumes and security of supply. In this drought year--the worst for more than a century--many users are receiving less than 16 percent of their `normal' entitlement, and that restriction is enforced entirely through the water rights system--not through pricing mechanisms. Formally codifying these property rights--in systems that were already well managed and orderly; where customers were educated and accustomed to following rules; and allocation rules were already broadly in place and enforced--took a number of decades. Once this process was complete, it was possible to introduce a system of trading in these codified property rights, allowing managers the flexibility to better manage their enterprises (in some areas last year as much as 8 percent of water delivered was traded). The water rights system also provides the basis for improved environmental management. The parallel system of charging for water services in the M-D is quite separate from the sale and purchase of water rights, and exists to ensure that the income of water supply agencies is adequate to cover ongoing maintenance and projected major capital replacements. Three lessons may be drawn from this successful achievement of sustainable financial management and sustainable resource use: First, the primary means of balancing supply and demand for water resources is definition of water rights consistent with available supply. This is the approach followed in Australia, Israel, the US, and elsewhere. Second, defining water rights is contentious and difficult at the best of times. Where water is already over-allocated so that `tail enders' often get no water, or fresh aquifers are consistently overdrawn to meet current demand, defining and enforcing sustainable water rights is an enormous political and social challenge. This is the case in many water-short developing countries. Third, the primary role of water pricing in irrigation is not to balance supply and demand, but rather to achieve sustainable financing. Implying, as The Economist article does, that pricing water has a central role in achieving the required resource balance is to grossly mislead policymakers facing the challenge of reducing water consumption to a level consistent with long term availability and proper environmental management.The solution inevitably requires stable and well specified access rights to water, institutions with the capacity to manage the water access regime, and appropriate water pricing to ensure the long term operation of the infrastructure. Don Blackmore, Chief Executive, Murray-Darling Basin Commission, Australia Chris Perry, Professor, Economics of Irrigation, Cranfield University, UK 81 Pakistan's Water Economy after initial adjustments, and are performing well. `but if we don't measure we can't manage'!) And In none of the countries that have adopted probably most important is resistance which such systems is there any thought to returning to emanates from some powerful users, politicians, the previous government-managed allocation and irrigation department officials who are able procedures. to use the `discretion' and `lack of transparency' in Pakistan has long been heading in this direction, the system to pursue personal profit at the cost of as the very important progress in establishing both others and broader welfare. entitlements at the farm level (through the There are several obvious areas in which there warabandi) over a hundred years ago, then fifty could be rapid movement. At the national level, years ago at the international level (through the there is an urgent need, for a host of reasons Indus Waters Treaty), and in 1991 among described earlier, to rapidly move towards provinces (through the Water Accord). The issue verifiable, transparent administration of the 1991 has been highlighted in many forums--it is a Water Accord. It is remarkable, and distressing, cornerstone of the 1994 World Bank report on that for something so obvious, on which there is irrigation and drainage in Pakistan and in the such broad consensus, and which raises such huge National Drainage Program. Many of the political issues and issues of trust, so little progress Pakistani professionals who wrote background has been made. IRSA often seems to function more papers for this Report highlighted this issue, and as a sounding box for the airing of ancient it emerged as one of the most important areas of complaints about the fairness of the formula, discussion in two major consultations held in the and of contemporary mistrust about actual course of developing this Report. The issue is now abstractions. While reform and restructuring of to move to implementation. To which, naturally, IRSA (so that it can serve as a basin agency--an there is considerable resistance. issue we return to later in this Report--along the There is resistance for several reasons. First, it lines of best-practice cases like the Murray-Darling will inevitably lead to pressures to modernize the Basin Commission in Australia), is very important, long-established warabandi system, as described this is going to take time. Given this level of mis- by Shahid Ahmad: `...the assumption behind the trust, the federal government might consider warabandi concept is that there is no conveyance appointing an independent `water auditor' with loss in the watercourse and time equity system will the power to install the necessary measurement provide reasonable level of volume equity-- devices, and the obligation to make the completely a false assumption. Research work and entitlements and flows into and out of the system pilot testing on Warimetric system by adding the totally transparent (on the web, at least, and water loss function in the Warabandi Formula was probably published at least weekly in most initiated in India. Similar activity at least at the major newspapers) and in a way that is easily pilot scale is needed in the IBIS.'19 There is also understandable to the public. In the initial years, resistance because clarity on water entitlements when mistrust is so high, the government might will inevitably require greater investments in follow a path similar to that described earlier for measurement. (Investments which would, the Murray-Darling Basin in Australia, where none however, have huge returns since, in the words of of the four involved states were willing to trust the Chinese when asked in the 1980s by The anyone from another state, and so they have a World Bank whether they were not measuring water auditor who comes from Western Australia when the costs exceeded the benefits, answered 3,000 miles away to do the job periodically (and 19 Paper 5. 82 What Needs to be Done then go back home, presumably so as not to be of each canal and distributary. The outlets are the corrupted by nefarious local interests)! most important points in a distributary, where At the provincial level, too, canal water withdrawals of the outlet and entitlements of the entitlements are well defined, as discussed earlier. farmers will be documented in this register.' Again the issue is the same--making these public, The important thing now is to start.This should making public what is actually being delivered in also be done with immediate effect in Sindh, a transparent and credible way. The Government especially in the areas where FOs and WUAs are of Punjab is considering doing this, initially at the operating effectively, and where there are major canal level and eventually all the way down--in questions about the irrigation department appropriate forms for each level--to the outlet. delivering entitlements and about direct outlets. In his background paper Faizul Hasan provides a And it should also be done immediately at the clear description of what is necessary, and a canal command level in Punjab, and then drilled proposed prioritized and sequenced path (fig. 4.5) down to the outlets, starting in the areas such as for putting such a management system into place: LCC East, where FOs are already formed. `The register of water rights is required to be Sardar Tariq and Shams-ul-Mulk20 have established at both the canal and distributary summarized well what needs to be done. A partial levels. It will register the withdrawals at the head list of their recommendations includes: Fig. 4.5: Indicative, sequenced, and prioritized timetable for implementation of a formal water entitlement system Well-defined water Existing water rights of rights of individuals individuals, reasonably converted into volumes, defined by area and with systematic registry time, without reasonable system. registry system. 2012 2011 2005 Clearly defined water rights of individuals, with proper registry system. 2010 2006 2009 2007 2008 Converting the outlet discharge measurement from time based into volume, by installing the modern volumetric discharge measurement devices. Source: Hasan, 2005. 20 Paper 7. 83 Pakistan's Water Economy l In water distribution, the water entitlements (www.mdbc.gov.au), Ministry of Water and are crucial and need to be streamlined for Forestry in South Africa (www.dwaf.gov.za), future management--clear individual National Water Agency in Brazil (www.ana.gov.br) entitlements need to be defined. to cite just a few examples. l Groundwater management needs to be Pakistan has been slow and uneven in adapting vested in the state, and must address the issue to this changed information environment. It of groundwater entitlements. remains very difficult for a user to even find out l Free trade of water and creation of water what data might be available. When one reports markets would help resolve many issues. that there are concerns about the transparency with l At the macro level, the Inter-Provincial Water which the Accord is being implemented, this is Accord needs to be reviewed in the light of dismissed as `totally false...someone playing ensuring minimum flow for biodiversity. politics...we have the data which show that this is not the case'. And if the (privileged, in this case) Practical steps required over the next five years: interlocutor asks to see the data, a bell is rung and, indeed, ten minutes later a log is brought which l Draft Water Policy should be reviewed to shows entries in hand which, it is explained, shows address water entitlement issues along with exactly what is being taken out of each canal and other issues in much detail. each distributary. Coming to a judgment of l Groundwater management should be vested whether this is what the log actually says is beyond in the state. the capacity of anyone who has not been in the l Guarantee individual entitlements. irrigation department for many years. (The l Introduce information management system summary sheet, shown in fig. 3.21 earlier, kept by as a critical and essential activity. Punjab Irrigation Department for its 24 canal l Capacity of grass roots organizations needs commands is an exception, and is exactly the to be built. simple and understandable information that needs l Measurement tools need to be introduced. to be publicly available in real time at all levels.) And even if the eventual conclusion of the inquiry Transparency would be `yes, it is', then the very opaqueness of Central to the three instruments already the process and the lack of public availability of discussed--competition, regulation, and the data make it obvious why mis-trust is so entitlements--is the issue of transparency. Indeed, rampant. Discussions with officials--of high one could argue that if there were an unequivocal professional and moral standing--reveal a commitment to transparency, then all of the dissonance about what takes place as a result of other priority actions and instruments would flow this opacity. `The allocations are made absolutely from this. faithfully, according to the entitlements of each And, indeed, a central feature of modern water canal'. But then... `This is a very good Minister, management in a liberalized economy and not once has he asked us to use discretion in his democratic environment is that of openness and favor ....', or `making this public will make the transparency. In most countries now all relevant job of officials of the irrigation department very information--hydrological, performance, and difficult because they will lose the discretion they planning--is available publicly, on the web and need to operate the system'. in real time. Representative web sites show In many instances there is also a circuitous this clearly: TVA in the US (www.tva.gov), argument with hydrologists and irrigation Murray-Darling Basin Commission in Australia engineers, who argue that such systems cannot 84 What Needs to be Done be put in place until there is a `very good' Practical steps required over the next five years: information base available. It is obvious that the pre-existence of such information would be ideal, l Prepare register of entitlement but in the real world there is a powerful feedback l Readily available information loop between data availability, quality, and support l Installation of measurement devices and data for data collection activities. Global experience dissemination shows that hydrological, geohydrological, and l Formal government policy for participation hydraulic data systems will be maintained only and supporting resources when the data have meaning for users (for example, Knowledge in telling them whether they are getting their entitlements), when users can get easy access to The sustainable management of a huge, inter- the information, can find the data they need in a linked, and very complex natural resource base is user-friendly way, and who can become pressure the single most challenging long-term task for groups on the government to commit the necessary water managers in Pakistan, and requires the funding to the data collection activities. Indeed, development of world-class capacity in three experience in developed countries (with the US related areas. Geological Survey for example), shows that any First are the natural sciences. Adaptive manage- attempt by the executive branch to cut funding ment of the Indus Basin system requires high levels for the data collection and dissemination activities of knowledge and understanding of a series of produces a fire-storm by state and local linked basic natural processes, the more important governments, utility managers, farmers, scientists, of which include: the behavior of the glaciers as and NGOs who depend on these data. In Pakistan, climate change proceeds; the fate of the large with such a large, complex, integrated system, amounts of salt being mobilized; the qualitative quality information is of tremendous importance, and quantitative dimensions of the aquifer systems and it is such a healthy, open, demand-driven in the Indus Basin and in the other parts of the transparent information system that Pakistan's country; the evolution and behavior of the water sector should aspire for. ecosystems of the delta; and the impact of changed Again, in their background paper Sardar Tariq sediment loads on river morphology. and Shams-ul-Mulk have summarized succinctly Second are the engineering sciences. The and well what is needed. IRSA's technical and plumbing for the world's largest contiguous management capacities need immediate attention irrigation system has underpinned much of so that trust between the provinces can be Pakistan's development. Pakistan has long been a developed in the long run: world leader in hydraulic engineering and in water resources planning. However, the country has not l Telemetry System to give real time data to invested in maintaining the capacity it has--the provinces once-renowned Indus Basin Planning Models are l Independent audit of IRSA would create no longer operative, and there is no model of the great trust and transparency basin and its hydrology and hydraulics which l Transparency in allocation and distribution can provide high-quality information on needed at all levels critical planning issues (such as `what are the l Users' participation--government must consequences of different storage options for the support user participation quantity and reliability of water deliveries') or on l Capacity building at both community and critical operational issues (with much of the agency levels distribution of water through the vast canal 85 Pakistan's Water Economy system of Punjab, for example, done entirely by the natural and engineered water systems are in one--fortunately very competent and honest-- consonance with the requirements of those person relying entirely on his own judgment). A systems. And, as described above, the new properly developed, calibrated, and maintained institutional arrangements are going to be one in suite of simulation models of the Indus River which interactions with citizens and users are going System (see fig. 4.6), which can produce `quality to be at the core of such water management, and assured' and `repeatable' assessments is vital for such interactions are areas where engineers-- IRSA, and a host of activities related to the marvelous people otherwise--are famously development and management of Pakistan's water incompetent. resources. The bottom line is that Pakistan needs to build The third leg of the intellectual stool are the a strong natural, engineering, and social scientific social sciences. Because at the end of the day the cadre capable of working with all users in defining government is going to have to design institutions the problem, developing solutions, monitoring, and instruments which will ensure that the actions assessing, and adjusting. This is a capacity which of the millions of people who live in and off of requires a wide range of disciplines--those Fig. 4.6: Systems models for planning and management Planning tools Model backbone Management and operations Monthly simulation model for a defined period, say 20 years (with provision Biophysical Biophysical to convert to daily as outcomes from outcomes from needed) simulation model simulation model Seasonal water availability and Economic models distribution-- at scale appropriate reservoir operations to issue Progressively developed to deal with the opportunities as they present themselves Flood forecasting-- daily model component for key Social assessment-- reaches distribution of benefits Provides the biophysical Accounting for data the other models and various Reservoir processes can use shares-- power/irrigation/flood --province shares of Environmental Accord indicators-- Must be owned by all wetland health/fish provinces production, etc. Inform power market 86 What Needs to be Done necessary for understanding climate, river water supply services, are overwhelmingly paid for geomorphology, hydraulic structures, surface water with public funds, while the (very large) informal and groundwater hydrology, limnology, water sector (tubewell users, and households who self- chemistry, sediment management, hydraulics, supply or purchase from vendors) is almost entirely soil sciences, terrestrial and coastal ecosystems, financed by users themselves. There are several agronomy, plant physiology, industrial implications. First, there is a lot more money organization, conflict management, politics, flowing in `the water sector' than shows up economics, and financing. It will require an on government books. This represents an expansive and long-term human resource strategy opportunity, becauseinseveral areas formal services which will update the skills of the formidable of good quality can provide good service at a capacity which exists in Pakistan, but will also fraction of the cost of the informal arrangements. strengthen the capacity of universities and other This means that good public services could `suck scientific and training institutions to produce high- in' a lot of cash that is currently in the private quality applied research and to train the next economy. Second, this is an arrangement which is generation of water policymakers and managers. very inequitable, since those getting access to rationed publicly funded services are those who Financing can exert influence, and who are overwhelmingly In Chapter 2 some of the tremendous financial not poor. Third, the application of money in this holes in the Pakistan water sector were described-- way defies the basic tenet of public finance, which the wide gap between what is available and what says that users should pay for mostly private goods is required for the maintenance of the existing (including irrigation and water supply services) stock of infrastructure (the so-called `build-neglect- while the taxpayers' money should be used for build' model of infrastructure financing21 ); the public goods (including drainage, sewage large number of people who have no water or treatment, and flood management). sanitation services; the huge requirements for To start redirecting public finances into a more environmental management; and the large appropriate pattern, one has to start `where the requirements for building much-needed new money is', which is in financing irrigation and infrastructure. Where is this money going to come water supply services. What is a reasonable path from, and how are priorities to be set? In for the government to follow, over time, to increase considering these fundamental questions, several the proportion that users pay and reduce the factors need to be considered. proportion paid by general taxpayers? The first and most fundamental reality is that Both common sense and empirical evidence there are only three ways of paying for the costs-- show that starting with the idea of increasing they must be paid either by general taxpayers, or charges (for bad services provided by corrupt and by users, or by gifts from abroad (which are very inefficient agencies) will quite reasonably be small relative to the former two, and should resisted. For this reason, the idea of bringing tariffs generally be thought of as `quasi tax money', and into balance with costs must be the third leg of a subject to the same tests). There are two ways of triangle in which the first two legs must be looking at the water sector in Pakistan today-- `improve services first' and `provide those services the formal sector, including the irrigation and in an efficient and accountable manner', and in 21 Nirmal Mohanty, `Moving the Scale', as quoted in J. Briscoe and R.P.S. Malik, India's Water Economy: Bracing for a Turbulent Future, Oxford University Press, New Delhi, 2006. 87 Pakistan's Water Economy which `you will pay for the costs of those services' high-level equilibrium (the triangle in the figure) can come only after the first two have been clearly is an area which is perfectly suited for the done and are so perceived by users. Again, it is application of donor funding, and is something the `competition/accountability/transparency/ that The World Bank and other donors should be regulation' nexus that is key to establishing the supporting on a large scale. first step, which is restoring trust that users are A particular challenge in moving towards getting efficient, accountable services. Again, the greater user charges in Pakistan is that many have Orangi Pilot Project--where sewers were financed made such large personal investments in `coping entirely by poor users--shows the enormous with poor public services'. This has not worked potential that exists. (And on which Akhter badly--a middle-class family in any of the major Hameed Khan, always cutting to the chase, cities actually gets water twenty-four hours a day, explained to the community: `I am not bringing even though the water from the utility comes for in any external funding for this--except for the just an hour or two. Middle-class families have technical assistance--because once I do you will done this by making large investments to cope. focus on getting your hands on that money, not But the existence of these `sunk costs' poses a on the task at hand.') particular challenge, because these users would Figure 4.7 gives a relevant and reproducible actually benefit little in the short run from more example of how this was done in an urban reliable supplies. This means that, again in the water project in Africa. Financing these sorts of short run, they would oppose higher user charges `transition costs' for moving from a low-level to a even if service quality improved.They would only Fig. 4.7: From low-level to high-level equilibrium in Conakry Poor service, Good low service, high willingness to willingness to pay pay Tariff paid by the users Revenues to the operator Tariff to cover the full cost Fee paid to the operator by the of a good service IDA credit Tariff and Costs Paid by users Initial tariff 0 Year 7 Source: The World Bank, 1992. 88 What Needs to be Done become supporters in the medium run when they needed is, as described earlier, to bring as much as understood that they did not need to replace their possible `into the light of day': Who has assets (their pump and overhead tanks and water entitlements to the water? What is the contract filters) because they could now rely on the piped between the provider and the user? What are the distribution system. At the very least this requires penalties for non-performance? What is the that information on improvements, and the performance of the different providers? savings this brings in the short run (lower electricity costs) and medium run (no replacement What this means for Federal of equipment for coping) needs to be made clear and communicated effectively. It also means that and Provincial Governments the time span for bringing tariffs in line with costs needs to be tailored to this reality. The agrarian economy of Pakistan accounts for An additional factor that needs to be factored about 25 percent of GDP and employs about half into the design of tariff reform is the fact that the of the labor force. While the transition to an urban status quo is quite satisfactory to many in the and industrial economy can and must continue, public agencies who profit from the discretion agriculture will remain central for the well-being which they exercise. As David Mosse22 notes : of large numbers of people. And it is important `Only the rare engineer supports Participatory to recall the arithmetic of water--a person requires Irrigation Management. Most consider it a fad that about 100 liters for household purposes each day, should wear itself out in time...with fear for the but requires between 3,000 and 5,000 liters loss of gratuitous incomes should farmers begin to produce his/her food. Much of the discussion to function independent of the irrigation of at least the quantitative aspect of water department.' management is, therefore, primarily about water Complicating the situation is the fact that the use for agriculture. anti-reform rhetoric of `increased tariffs will hurt Water is a key constraint to improving the poor' and `this will cost jobs' has been honed agricultural productivity and generating jobs. Over to a fine art, and has the strong support of some the past several decades farmers have largely taken political parties. There is no easy answer to this the problem into their own hands, and `solved it' issue, but it is clear what are some of the elements by sinking hundreds of thousands of tubewells that need to be addressed. On the `carrot' which provide just-in-time water for their crops. side, there are creative ways of providing new To a substantial degree, the main function of opportunities for those in the public sector the canal systems has been to recharge the agencies to participate in a new service groundwater--about 80 percent of groundwater arrangement. As was done in a successful process abstractions in Punjab come from recharge from in Mexico City, public workers were given training, canals. The survival of the water economy over capital, and preferential access in setting up firms the last several decades has largely been despite which could compete for contracts handed over rather than because of the state--it has been the to the private sector. On the `stick' side, the tapping of the unmanaged groundwater by government itself is complicit in, and even the millions of farmers, by towns and villages and architect of the present arrangement, and is industries that have pulled the economy through. unlikely to be an effective change agent. What is It is clear that this era of `productive anarchy' is 22 David Mosse, The Rule of Water: Statecraft, Ecology and Collective Action in South India, Oxford University Press, New Delhi, 2003. 89 Pakistan's Water Economy now coming to an end, since groundwater is now competing `for the market' with the being over-tapped in many areas (including both irrigation department) and into the canal the Indus Basin and Balochistan, and other non- commands (where private companies can, Indus areas).This poses two very major challenges again, compete under a clear regulatory to the state. First, surface water supply systems framework with the irrigation department). are going to resume their previous high In many cases, professionals from the importance, and need to be managed much more irrigation departments would be encouraged accountably and effectively. Second, groundwater to form private businesses for the provision will have to be managed--for related reasons of of such services, thus ensuring that their skills quantity and quality--much more aggressively are not lost, and that they do not see the than has been the case in the past. changes as purely a loss of security.The bulk It is also obvious that the needs for water are business (operation of dams and barrages) changing substantially as a result of agricultural would probably remain in state hands, but diversification, urbanization, industrialization, with many major functions (such as recognition of environmental needs, climate operation of power plants) concessioned out change, and the evolution of the natural resource to private operators. A similar institutional base. Since there will be, if anything, less rather architecture would pertain for the drainage than more water, it means that the new water infrastructure. economy is going to have to be one which is much lIn such a system (which would take place in more flexible, in which a key will be the voluntary a sequenced and prioritized process over reallocation of water from those who need it less many years), the government would, to those who need it more. gradually, play a very different role. It would It is going to require a very different type of corporatize the state-owned operating units, state machinery at both the federal and provincial and develop new capacities to do the levels to meet these challenges. In constructing this economic regulation. The government `new water state', the focus must be primarily on would also be far more active in groundwater instruments which govern the relationships of management, where it has been largely different users with water, and with each other. absent. This would mean developing a The logical organizational architecture then is that new legal and regulatory framework for which is required to manage the instruments, comanaging groundwater with user and order the relationships between the parties. associations. It would mean developing the Some of the key elements of the `new water state' sophisticated natural resource management will be: capacity required for the management of water and land systems. l Introducing accountability, efficiency, lA centerpiece of these systems, both surface transparency, and competition into the water and groundwater, would be improving surface water supply business.This will mean the administration of an unusually well- unbundling the business into bulk, established system of water entitlements. transmission, and distribution enterprises, What is now needed is finalization of the with relations among the parts governed by agreement on environmental flows into the contracts which specify the rights and delta (a process that is underway), and then responsibilities of both parties. This will implementation of the Accord in a mean encouraging competition below the transparent manner, audited by an auditor distributaries (with Farmers' Associations who is, and is perceived to be, neutral. The 90 What Needs to be Done same system then needs to be `drilled lA similar, and even more difficult, process is down' to the canal commands within the essential for groundwater, since groundwater provinces (where entitlements are mostly reservoirs are already being mined in the well established but not transparently sweet water areas. Again, this will take a administered). And so on down all the way well-thought-out, pragmatic, patient, and to the users' associations and eventually to persistent strategy. The central elements will the farmers.There is broad agreement among be heavy involvement of users, substantial most water professionals in Pakistan that this investments in modern water andagricultural improved administration is quite feasible, technology, and the state playing a vital role and that it would increase efficiency, allow in developing the enabling legislation, and flexibility in adapting to scarcity, and reduce as regulator and provider of knowledge and conflict and install trust in the system. decision support systems. 91 Pakistan's Water Economy CHAPTER 5 PRINCIPLED PRAGMATISM AND `RULES FOR REFORMERS' This Report (and many other documents) makes or lead to strategic errors, if it fails to incorporate it clear that Pakistan will have to make major real world issues, and more specifically the role of changes in the way it develops and manages its interest groups, in devising a more pragmatic set water resources, and that this process has to start of reform sequences.' soon.The experience of all countries shows that it Reviews of water reform efforts throughout the is easy to articulate principles, but translating world suggest that the guiding mantra must be principles into practice is essentially and necessarily `principled pragmatism'.2 `Principled', because a political task, which is very different in different principles matter a lot. And `pragmatic', because historic, cultural, and political environments. In principles can only be translated into practice by his background paper, Imran Ali1 states the following a step-by-step, persistent process, challenge very well: `...in the institutionally which `fits' with the local culture, people, and complex environment of Pakistan, reform environment. This section reflects on some of the proposals are accompanied by variable, lessons of `principled pragmatism' in water reform contradictory, and even conflicting viewpoints. processes elsewhere,3 and from reform processes There is consequently much difficulty in in other sectors in Pakistan. They are presented in implementing a reform agenda, since political the form of `rules' (really suggestions) which a realities and considerations continue to impinge reforming government might keep in mind. on economic efficiency criteria. The decision- making environment has to contend with competing interests, differing perceptions, unequal Rule #1: Water is Different power relationships, and imperfect information. Therefore, the outcome of reform policies usually There is much that aspiring water reformers can depends on the interaction between supporters learn from reforms in other sectors--such as and opponents. This scenario is quite different power, telecommunications, and transport. But it from the assumptions of economists who feel that is also true that water is, and is perceived to be, society should move towards market-oriented different from these other `created' sectors in many models, through institutional reform policies fundamental ways. The resource economist based on a rational process of objectives Kenneth Boulding's ode to water4 (see `Overview identification, options evaluation, and strategic and Executive Summary', p. xxvii) captures many choice. Such an approach can be too simplistic, of these distinctions very well. 1 Paper 9. 2 The World Bank, Water Resources Sector Strategy, Washington DC, 2003. 3 John Briscoe, `Managing water as an economic good: Rules for reformers', Water Supply 15(4), 1997, supplemented by the observations of many people and politicians who have led reform processes around the world (Reference: Hague session). 4 Kenneth Boulding, `The Economist and the Engineer', pp. 82­92, in Economics and Public Policy in Water Resources Development, ed. S.C. Smith and E.N. Castle, Iowa State University Press, 1964. 92 Principled Pragmatism and `Rules for Reformers' Rule #2: Initiate Reform where groundwater option is becoming a less there is a Powerful Need and and less tenable option, and because the breakdowns in regulation (such as in the Demonstrated Demand for tragic current case of Hyderabad) give rise Change to strong demands for change. l For farmers, too, the `exit option' of self- Habits of water management and use, and providing groundwater is becoming more the organizations and practices involved, have and more costly, increasing the pressure on evolved over time and have, at some time, `fitted' the irrigation departments to improve the the particular prevalent economic, social, and quality of service. environmental circumstances. Change is not easy l Agrarian Pakistan is undergoing a quiet or welcomed, unless there is a very strong need but rapid revolution--contract farming is for change. Abstract and idealized statements (such increasing, high-value crops are displacing as `river basin management' or `integrated water food grains, aquaculture is increasing, among resources management', the mantra of the other things. In each case the importance of international community in recent years) have a predictable supply of water becomes vital. some resonance with professionals, but do not There has been a rapid uptake of drip constitute a reason for organizations and people irrigation and other new technologies, but to change the way water is managed. these `exit options' will not be sufficient, and Because changes are difficult and often there will be pressures to allow water to move wrenching, they will be undertaken only when more flexibly and voluntarily from low-value there is a powerful need and a demonstrated to high-value uses. Much of this now takes demand for change. Global experience5 shows that place in informal water markets, but as the impetus for change is usually either a serious agricultural production moves to scale there breakdown in services, or an environmental failure will be pressures to formalize such which affects large numbers of people, or a fiscal relationships. Again, this is an important area crisis which makes the status quo untenable. where there will be demand for changes in In Pakistan today, there are a number of settings water management practices. It is striking where there is a powerful need and demonstrated how large-scale `progressive farmers' are demand for change and which are, accordingly, becoming an increasingly articulate voice for the areas where reformers should put their initial change in the delivery of irrigation services efforts. These include: in Punjab, for example. l The security risks of deferred maintenance l Thereisastrongdemand from all quarters for are becoming apparent to planning and clarity on entitlements, and for transparent finance officials in the federal and provincial and impartial delivery of those entitlements. governments. In several instances, high- Predictably, this demand is strongest from ranking officials in these departments are tail-enders, be they provinces or farmers. becoming strident voices demanding that l Cities where individual households are facing public resources are used better, and that the greater and greater difficulties in making irrigation departments be reformed to their `coping strategies' work, because the ensure this. 5 John Briscoe, `Managing water as an economic good: Rules for reformers', Water Supply 15(4), 1997. 93 Pakistan's Water Economy The key message is that there are many windows In developing a political/communications of opportunity opening up for water reforms process for reforms, it is important to understand which will constitute specific and practical that the present situation (of unclear entitlements, solutions to local problems. It is these which will discretion, and lack of transparency) suit show what can be done, and will, by producing important groups in society. The essence of the tangible results, constitute a pressure on, and reforms outlined in this paper would be to reduce example for, others to follow. monopoly power, and introduce transparency, thus greatly reducing the space for discretion and Rule #3: Involve those Affected, corruption. Imran Ali has described why some groups would tend to oppose such changes, and Address their Concerns and outlined strategies for neutralizing such with Understandable opposition: `Larger landowners could be the most Information opposed to change, since they have been gaming the system for decades. Clearly, they do exercise People are, for good and not-so-good reasons, political influence, and benefit most from the always apprehensive about changes which will deinstitutionalized politics that are currently in be thrust upon them. And when it involves vogue. However, the attraction of contracted, something as sensitive as water, communication, formalized water rights, with capacity to purchase discussion, and information become central additional demand through efficient water elements for any reform process. What would this markets, could prove an adequate trade-off for the mean in Pakistan? pressures of constant manipulative activity and The case of construction of a new dam on the threat of water conflict. Also, there is now, Indus is a case study in many of the `dos and don'ts' hopefully, a sufficient element of modernizing of communication.6 First, several times in the past larger farmers who are making a transition to high the government has believed that a decision value agriculture; and who approach agricultural could simply be imposed as being `in the best production through capitalistic rather than interest of the people', without the extensive feudalistic values. The engineers and staff of the public discussion that such a massive and PIDs could be against these reforms, fearing they sensitive investment merited. More recently, the would entail dissolution of their service, and a communication effort and political process has breakdown in existing rent relationships. Another been much more appropriate and professional. It disincentive could be leaving the relative security has included heavy involvement of the Parliament, of service with the provincial government, for more technicians, and the media. And it has included novel contractual work with more transparent and some excellent material (partially summarized accountable institutions.' What is critical is that in box 5 earlier, and available in full on these fears are real and constitute major barriers www.infopak.gov.pk/public/Kalabagh_Dam) to reform, and that they cannot be wished away. which acknowledges that different provinces and Reform strategies must devise mechanisms for groups have different views and concerns, and addressing such fears. As described earlier, which disaggregates these and addresses many of irrigation departments might draw on the model them in a simple and clear language. followed in Mexico City,7 where workers in the 6 Paper 10. 7 Manuel Contijoch, personal communication. 94 Principled Pragmatism and `Rules for Reformers' water utility were given privileged and in some prerequisite for the success of the reform process cases sole access to contracts, provided they set will be continuity in the state's strategic directions. up--with help--private companies to provide the The certainty of such continuity would have hitherto publicly provided services. The same been more plausible had these issues been could easily be done in irrigation departments, discussed more comprehensively in the nation's for example starting with some of the equipment parliament, or other representative forums....The and repair shops. World Bank should endeavor that such a While there is widespread public dissatisfaction discussion and debate does take place, so that the with the way in which water is managed, this does outcome is seen as the product of popular support, not mean that the public at large, or influential rather than an arbitrary imposition. Perfectly groups in particular, will necessarily welcome rational and badly needed reforms can suffer if reform efforts (as is illustrated by the vehement the process of adoption and decision making is opposition by some NGOs and political parties not transparent.' to private sector involvement in water supply in Karachi). Again, as Imran Ali8 points out:`Fears Rule #4: Reform is Dialectic not and misgivings over the issue of water as an economic good should be removed, whether these Mechanical are held by the public at large, or articulated by institutional players, advocacy groups or political Ideas like `river basin planning' and `integrated elements. Those areas should be identified where water resources management' have sound continued perception of water as a public good conceptual roots, and appeal to technicians, many might be actually harmful to the community, of whom perceive implementation of these ideas carrying various disguised costs such as high as the path towards better water management. informal charges or health hazards.The distinction Useful as they are, in the words of the Operations should be made with certain programs where water Evaluations Department of The World Bank resources can continue to be regarded as a public `...progress takes place more through "unbalanced" good, such as in the management of the larger development than comprehensive planning drainage and flood control systems.' approaches'.9 As Karl Marx (had he addressed the Finally, such discussion is necessarily political subject!) might have said: water reform is a and must necessarily take into account the political dialectical, not mechanical process. realities of each country. Again, quoting Imran Ali: Improvements in water management occur `The fact that roughly half of Pakistan's existence when there are tensions (between users, between has been under military rule gives little clue as to users and the environment, and between the water which direction popular choice would take the agencies and the finance ministries) which can no country. The civilian regimes of the 1990s did longer be accommodated within the existing maintain a steadfast commitment to market forces, institutional arrangements. But reforms do not and this could continue in the future with a lead to nirvana--they simply mean that `lower- more complete return to civilian politics, except order tensions' are replaced by higher-order if religious-oriented parties can succeed in tensions. That is the yardstick by which reforms stigmatizing Western influences. Therefore, a should be judged. 8 Paper 9. 9 Operations Evaluations Department, Bridging Troubled Waters, The World Bank, Washington DC, 2002. 95 Pakistan's Water Economy Rule #5: It's Implementation, services which are delivered by inefficient and Stupid corrupt agencies.The first step must be to address the issues of accountability and efficiency (as Lawrence Summers10 has observed that the great described earlier in this Report). Once services are distinction between developing countries which improved and there is trust in the service provider, have progressed over the last thirty years and those then tariff increases to bring revenues in line with that have stagnated is not the ability to formulate costs becomes possible. As described in the urban perfect policies, but the ability to translate water supply example in Guinea, Africa (fig. 4.7), reasonable policies into actions on the ground. public funding will generally be necessary on a Paraphrasing Bill Clinton's famous election declining basis to `finance the transition'. mantra, `it's implementation, stupid'. And so it is with water in Pakistan and else- Rule #7: Be Patient and where--policies and recommendations abound, Persistent some very good. What matters is identifying improvements that can actually be implemented. Water reform processes are never short, decisive affairs. A review of the experience of rich countries Rule #6: Develop a Sequenced, by the OECD11 shows that progress in water reforms takes place over decades, not years, and Prioritized List of Reforms that even the most advanced of countries is only about half way towards the ideal forms of water Any journey requires a knowledge of the management described in declarations of intent by destination and a road map for getting there. the countries themselves and by the international However, the journey itself is taken step by step. community.12 Moving from, say, `30 percent okay' And so it is with water reforms--there must be a to `40 percent okay' over the course of a decade is long-term vision, but immediate attention must a reasonable aspiration. be on putting first things first--to sequencing, and prioritization. The practice of (aborted) water reform by government agencies in Pakistan Rule #8: Pick the Low-hanging (reinforced by some of its external supporters) has Fruit First--Nothing Succeeds often been to make everything (and therefore like Success nothing) a priority, a criticism which has often been leveled at the `over-ambitious' National The world over, citizens are either concerned or Drainage Project. skeptical about announcements of `reform', with A relevant example of a principled but some advocating abolition of the word from the pragmatic approach to sequencing relates to that public policy lexicon. `By casting their agendas as of `cost recovery' for irrigation services. Cost reforms, political advocates don't aim to stimulate recovery is, of course, an appropriate aspiration, debate and discussion. They aim to suppress it. but it is almost never the place to start. Farmers They aim to stigmatize adversaries as nasty, wrong- will not and should not pay for the costs of poor headed, selfish, or misinformed. The trouble is 10 Lawrence Summers in `Practitioners of Development' series, The World Bank, www.worldbank.org. 11 OECD, `Water management: Performance and challenges in OECD countries', Paris, 1998, www.oecd.org. 12 The International Conference on Water and the Environment, Dublin, www.wmo.org, and The World Bank, Water Resources Management Policy Paper, Washington DC, 1993. 96 Principled Pragmatism and `Rules for Reformers' that as a society, we need debates over principles A good example of `the best is the enemy of the and practicality. All reforms are not desirable, at good' rule at work is the justly famous IndusTreaty, least not to everyone.'13 which has, since its inception, had its detractors The corollary is that public support will in both Pakistan and India refer to it as `not fair'.15 only build if there are visible, tangible results Confronting the Pakistani detractors of theTreaty, from the changes which are advocated. The key is Ayub Khan gave advice which is relevant for all `show me'. would-be water reformers: `...very often the It certainly can help to show opinion leaders best is the enemy of the good and in this case that these changes have been effected in other we have accepted the good after careful and countries. The formation of the famous French realistic appreciation of our entire overall River Basin management system in the 1960s was situation...the basis of this agreement is realism strongly influenced by the successful experience and pragmatism....'16 of the Ruhrverband, established in neighboring Germany in 1916. And the political leaders of Rule #10: There are no Silver the water reform process in Brazil ascribe high Bullets importance to a study tour of Mexico and Colorado at a critical time. But there is nothing like demonstration on home territory. And since The challenges which Pakistan faces in water changes are always difficult, it is imperative to management are environmentally, socially, and start changes where conditions are propitious-- technically complex. There is a justifiable human where there is a real demand for change, where fantasy that there is a single `silver bullet' which there are champions, and where it is possible to will `solve the problem'. In some parts of the show results. Pakistan water establishment today there is still faith that the old remedy--more dams, and variants of this--will solve all water problems and Rule #9: Keep Your Eye on the should be given near-exclusive priority. Ball--Don't allow the Best to What is clear is that the most effective responses become the Enemy of the Good to the water challenges in Pakistan are going to vary very widely, and are going to require a Almost any progress is progress worth making, host of interventions of different scales. As whether or not it measures up to some abstract suggested by `Stages of water development' in global notion of `excellent'. The idea that practice fig. 2.18, the major instrument is not going to be can go from terrible to perfect in one fell swoop is infrastructure alone, but management supported one that is attractive to outsiders and is sometimes by both old and new types of infrastructure, large adopted by financial agencies (so-called Volvo and small. `Management' is going to mean instead of Volkswagen standards14 ). But it fits systemic sets of legislation, capacity building, poorly with the one-step-at-a-time gradualism organizational change, and the use of entitlement, which characterizes water reforms, everywhere. pricing, and regulatory instruments. And it is not 13 Robert Samuelson, `Reform ain't what it used to be', The Washington Post, 5 June 2004. 14 Sebastian Mallaby, The World's Banker, Penguin, 2004. 15 N.D. Gulhati, Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, New Delhi, 1973. 16 Undula Alam, `Water Rationality: Mediating the Indus Waters Treaty', Ph.D. dissertation, Durham University, 1998, p. 340. 97 Pakistan's Water Economy going to be the task of the government alone, but narrative, these accounts are rather invulnerable concerted and reinforcing actions by a host of to empirical evidence'.18 stakeholders. But that there were a silver bullet! For some, the case is clear: the idea of WUAs is partly a cruel trick played so that the more difficult Rule #11: Don't throw the Baby issues--of real reform of the irrigation agencies, out with the Bathwater and the ceding of enforceable water entitlements-- can be avoided. But the fact is that organized A corollary of the previous rule is that there is a farmers do play a role in all successful irrigation tendency when the silver bullet does not work schemes throughout the world, but only as part (mixing metaphors badly) to throw the baby out of a set of reinforcing instruments, which always with the bathwater. Dams (or the NGO-preferred include water entitlements and accountable service supply-side alternative, rainwater harvesting) are delivery agencies. The WUAs should not be propagated with missionary zeal, and when they thrown out with the bathwater, but propagated as do not deliver communities to the promised land, part of an overall reform package. The distinction they are stigmatized and it is argued that they between necessary and sufficient conditions for should no longer be part of the `toolkit'. progress is a vital one. Take the example of dams.There is an energetic and resourceful anti-dam lobby in Pakistan. Rule #12: Reforms must Provide Spurred by legitimate issues such as the lack of Returns for the Politicians who trust in administration of the Water Accord, and the effects of ever-greater water abstractions on are Willing to make Changes the people of the Indus Delta, and pulling in a host of historic unrelated grievances,17 these groups Politicians may not be the most revered figures in (working together with international anti-dam Pakistan (or elsewhere), but it is they who are `in groups) have identified a new dam on the Indus the game', who are elected to make crucial trade- as the greatest curse that could befall the people offs, and who have the critical role as judges and of Pakistan in general, and Sindh in particular. champions of reform. A discussion with politicians Take another example, that of Water Users' who have led water-related reforms throughout the Associations. The idea of WUAs transforming world19 found general agreement in a `rule' that: irrigation services has been, and is, a powerful and `If it is to work, water reform must be good persistent one, despite mounting and long- politics.'20 standing evidence that reality is a bit more The bottom line: an essential element of any complicated. Similar evidence from around reform program is that it must be viewed as a `good the world notwithstanding, the idea has had thing' by sufficient numbers of people, so that they remarkable staying power in the global water will consider voting for the politician who community, again, `because of their power as championed the reform. 17 Khaled Ahmed, `Sindh: The feel-bad factor', Friday Times, Lahore, May 2005, and Paper 10. 18 JudithTendler, `Why are Social Funds so Popular?', Local Dynamics in an Era of Globalization,The World Bank, Washington DC, 2000. 19 World Water Forum, Hague, 2000. 20 Articulated at the Hague World Water Forum in 2000 by Digvijay Singh, the then Chief Minister of Madhya Pradesh in India. 98 Principled Pragmatism and `Rules for Reformers' There are two important riders to this `rule'. likely to protest against new dams.... But inside First, it is often quite difficult to judge how actions India, the far bigger local language media relating to water are being received by citizens. representing the vast majority and poorer sections For example, consider the conclusions of a recent of society are expressing the heart-felt cry for book on how environmental reporting is done in development.' the English-language and vernacular press in India. Second, and related, is the fact that on any Anyone reading the English language newspapers reform proposal there will be a cacophony of of India would perceive that the Sardar Sarovar voices. `Sometimes I feel as if there's a completely Project on the river Narmada is almost universally false assumption that if only you talk to everybody opposed. However, a detailed analysis of press you will get an agreement. Only on a very boring coverage by Sussex University21 showed that issue or in a very boring country would you find the picture was considerably more nuanced: that. To my mind the debate.... Does not `Environmental debate in India is governed by the eliminate the need for political risk... At the end language in which it is presented and understood. the government has to take the risk....'22 In short, The message coming out of India, most likely to while all voices must be heard, much greater weight be heard by the developed world, comes out of its must be given to the voices of those who have English language media, representing just responsibility and face the voters, and less weight 2 percent of the population. This elite group has to those who are self-appointed or who represent adapted a pro-environment stance and is more small special interests. 21 Chapman, Graham, Keval Kumar, Caroline Fraser, and Ivor Gaber, Environmentalism and the Mass Media: The North- South Divide, Routledge, 1997. 22 Montek Ahluwalia, Practitioners in Development, The World Bank, 2004. 99 Pakistan's Water Economy CHAPTER 6 THE EVOLVING ROLE OF THE WORLD BANK What the Bank has Done in remedial works were implemented after the first the Past impounding of the Tarbela reservoir. Thereafter, the Bank played a catalytic role in periodic major Water Resources and Irrigation1 reviews of the irrigation and power strategy, and funded parts of the resulting investment programs. The World Bank has played a central role in the Altogether, the Bank has, so far, supported 40 development of Pakistan's Indus Basin irrigation operations in the irrigation, drainage, and water system, the largest integrated irrigation network resources development with thirty six2 IDA in the world.The Bank's partnership with Pakistan Credits (US$13,455 million in 2005 prices) and in the water sector dates back to 1952 when the four IBRD loans (US$5,807 million). During this first loan was approved for a water project in the period, these operations constituted 16.5 percent then East Pakistan. In the 1950s, the Bank's of the total Bank lending to Pakistan. The good offices were instrumental in the successful background paper by Usman Qamar3 includes a negotiations of the Indus Waters Treaty (1960) complete list of Bank operations in the water sector between Pakistan and India, which settled the and the subsectoral composition of its water sector division of the waters of Indus Basin between the portfolio since 1952. As shown in fig. 6.1, annual two countries following Partition in 1947. After lending for water-related projects has varied the signing of Indus WatersTreaty, the Bank helped between $620 million a year in the period 1960­ to mobilize funds and administered the Indus 70, to a low of $20 million a year in the most Basin Development Fund (IBDF) during 1960­ recent period (2001­04). 67, which financed the physical works to In addition to financing specific investments, implement the Treaty provisions, also known as the Bank also supported Economic and Sector the Indus Basin Development Project (IBDP). Work (ESW) and provided Analytical and Subsequently, from 1968 onward the Bank Advisory Assistance (AAA) that culminated in administered the Tarbela Development Fund several major sector reports, including Water and (TDF), which was extended to the post-Tarbela Power Resources of West Pakistan: A Study in Sector construction period during which extensive Planning (popularly know as the Lieftinck Report 1 This section is based directly on the background paper by Usman Qamar, which draws on the following documents: Agriculture Operations Division, South Asia Regional Office, The World Bank, Project Completion Note: Indus Basin Project 1964 Supplemental Credit, May 1993, Irrigation I Davison, South Asia Project Department, The World Bank, Project Completion Report: Tarbela Dam Project, April 1984. Operations Evaluation Department, The World Bank, Project Completion Report: Tarbela Dam Project, September 1986, Operations Evaluation Department, The World Bank, Pakistan--On Farm and Command Water Management and Irrigation Systems Rehabilitation Projects, Environment and Social Development Sector Unit, Rural Development Unit, South Asia Region, The World Bank, Pakistan Public Expenditure Management: Accelerated Development of Water Resources and Irrigated Agriculture, Vol. II, January 2004, www.worldbank.org. 2 Including seven IDA Credits for the former East Pakistan for a total amount of US$3,832 million equivalent. 3 Paper 16. 100 The Evolving Role of the World Bank Fig. 6.1: World Bank lending to Pakistan for water-related sectors (1952­2004) Major Infrastructure Irrigation and Drainage Floods Urban WS&S Rural WS&S Hydro % of all Bank lending 600 ear 500 50% US$/y 400 40% lending 2004­05 Bank of 300 30% all of % Millions 200 20% 100 10% 0 1952­60 1961­70 1971­80 1981­90 1991­2000 2000­04 Source: The World Bank, 2004. 1967); Revised Action Program (RAP) for Irrigated 1960­75--the Post-Indus Waters Treaty Agriculture (1979); Water Sector Investment Period Planning Study (1991); Pakistan--Irrigation and Prior to 1960, the Bank's involvement in the Drainage: Issues and Options (1994); and sector was limited to seven projects in the then Accelerated Development of Water Resources and East Pakistan for irrigation, flood rehabilitation, Irrigated Agriculture, prepared as part of the Public and water supply for a total amount of US$3,832 Expenditure Review carried out in 2003. In million equivalent (current prices). Following the addition, several sector policy and planning Indus Waters Treaty, the focus of investments and studies, including a draft `National Water Policy, the emphasis of Bank assistance was on meeting 2002' and a framework for a Drainage Master Plan the water requirements of areas that were earlier for the country were prepared through the served by the eastern tributaries of the river Indus technical assistance components of Bank-assisted (Ravi, Beas, and Sutlej) whose waters were projects, as well as various trust funds managed allocated to India as part of the Treaty. This was by the Bank, including the Bank-Netherlands imperative to avoid a food grain crisis that could Water Partnership Program. seriously harm the new nation. The 1960s saw The evolution of the water sector in Pakistan the construction of major IBDP works, including and the Bank's lending and non-lending assistance the Mangla Dam and a network of barrages and can broadly be divided into the following inter-river link canals, and subsequently the somewhat overlapping time periods. Tarbela Dam. It is worth noting that the Bank 101 Pakistan's Water Economy Table 6.1: Bank assistance (1960­70) Sr. # Financing Description Amount Amount Approval US$ US$ Date (Current) (2004­05) 1 IBRD Indus Basin Project 90,000,000 4,617,000,000 13-Sep-60 2 IDA Khairpur Irrigation 21,154,434 1,085,222,464 29-Jun-62 3 IDA Indus Basin Project 70,619,397 3,530,969,850 16-Jul-64 4 IBRD Tarbela Dam Project 25,000,000 977,500,000 2-Jul-68 5 IDA Khairpur Irrigation & Drainage 14,000,000 519,400,000 23-Jun-70 Total 220,773,831 10,730,092,314 Source: The World Bank data. did not do an economic analysis of Mangla, l From the late 1960s through 1975 river because the construction of the dam was deemed diversion capacity was expanded from to be essential for the survival of the country. 67 million acre feet (MAF) at Independence Besides its role as the Administrator of IBDF,4 the to an annual average of nearly 104 MAF Bank supported the IBDP through two IBRD today; the Indus Replacement Works, loans and one IDA credit (see table 6.1).The `twin foreseen in the Indus treaty signed with India menaces' of salinity and waterlogging, and the in 1960, including the Mangla Dam were need to provide drainage in many parts of the completed, and the Tarbela Dam was also Indus plains were also recognized at this time. In constructed. This investment program response to these strategic threats, a public expanded the Indus Basin irrigation system, program using tubewells and surface drains was increased hydropower generation capacity, launched to lower the water table and reclaim and increased cropping intensity on the saline soils.The 1960s witnessed the beginning of Indus plains. Salinity Control and Reclamation Program l Despite underinvestment in research and (SCARP). The Bank supported this program development, pricing and subsidy policies through two IDA credits. set the stage for the introduction of improved The 1960s might be termed the `heyday' of the and high-yielding varieties of seed from the water sector in Pakistan when massive investments late 1960s, as both fertilizer and irrigation in the sector, coupled with the introduction of water availability expanded (green high-yielding varieties (HYV) of wheat, heralded revolution)--from 1970 to 1994­95 the the `green revolution'. Agricultural growth, which value of wheat production, the staple crop, was sluggish in the 1950s (about 1.4 percent) and nearly doubled from 6.476 Mt in 1970­71 less than half the population growth rate, became to 17.002 Mt in 1994­95. the key engine of overall economic growth, and there was no major food grain crisis. This The timely completion of the mega IBDP enormous achievement was the fruit of the is acknowledged as a major feat of efficient following two major initiatives: project management by Pakistan, international 4 Subsequently the Bank also administered the Tarbela Development Fund. 102 The Evolving Role of the World Bank cooperation, and best practices. The Indus Basin additional water would be integrated in the Project Completion Note (May 1993) stated: national irrigation system for best use. Revised water allocation (water rights) `The Indus Basin Works have fulfilled their basic among provinces and canal commands were replacement objective (arising from the diversion not in place.5 of water to India) and provided a small increment l Complementary investments in agricultural of water; that the growth in water supply, especially development6 did not receive adequate through tubewells, had a significant impact on attention. agricultural production; and that the increase in l The development of institutional capacity power supply had been very cost effective.' to conduct research and training in Pakistan on water resources engineering and manage- Similarly, the Tarbela Dam Project Completion ment was not an important area of the Bank's Report (1984) concluded: concern. l The immense effort represented by the IBDP `...the entire Indus Basin Project stands as a and Tarbela programs inevitably absorbed monument to international cooperative effort, in the major proportion of external aid, as well a large part guided by the Bank. The immense as significant amounts of domestic resources. system of replacement works consisting ofTarbela It also tended to divert attention away from dam, six barrages and eight link canals was downstream problems associated with the constructed during the period 1961­68--two operation of Pakistan's enormous network of years ahead of the Treaty deadline...No other irrigation facilities and lack of adequate project of such size and complexity had been drainage infrastructure. As a consequence, constructed in such record time.' over time, the water table underlying the Indus plain rose, leading to serious problems While the IBDP was a success on most accounts, of waterlogging and soil salinity in certain the Tarbela PCR and OED's Project Performance areas. Audit Report (PPAR) highlight some aspects that should have received more attention during the The Post-IBDP Period (1975­93) planning stages: This period can be subdivided into two l Tarbela Dam, the last of the IBDP works, overlapping time frames: was more than a replacement work, as additional water supplies were expected to l 1975­85: Emphasis on addressing water- become available. However, during the logging and salinity problems through a planning stage it was unclear as to how this Salinity Control and Reclamation Program 5 The OED PPAR for Tarbela Dam also noted that `... agricultural benefits of Tarbela could be increased considerably if water supplies that are surplus to historical water rights could be allocated according to regional market demand (given enabling drainage investments in saline groundwater areas), rather than according to statute...'. The inter-provincial Water Accord was ultimately signed in 1991. 6 While the Lieftinck Report (1967) had advocatedTarbela Dam as the centerpiece of the IBDP, it had also pointed to the need for coupling water development with agricultural development if the full benefits of water development were to be realized. Complementary programs were to include rehabilitating, modernizing, and expanding the existing irrigation systems, and modernizing agriculture by wider use of technical inputs, improving water regulation practices and on-farm water management, reducing subsidies, increasing water charges, providing drainage and water quality management, and strengthening infrastructural support for agriculture. 103 Pakistan's Water Economy (SCARP), and integrated irrigation and emphasis on construction through WAPDA, drainage interventions (the concern of tended unintentionally to divert attention away sustainability of irrigated agriculture was the from water management, on-farm development, main driver) and related issues. Financial and other constraints l 1979­93: Implementation of Revised Action slowed implementation, and the establishment of Program (RAP) for Irrigated Agriculture-- large public sector tubewell fields placed an on- emphasis on system rehabilitation, water going financial burden on operating agencies conservation, improved management, farmer (provincial irrigation departments) that seriously participation, and sustainability (improved restricted funds available for normal maintenance O&M and cost recovery through privati- of the surface distribution and drainage system. zation of public tubewells: `the SCARP In addition, this program had technical and Transition program') operational problems. Tubewell life was less than planned (10­15 years instead of the assumed 30­ With the expected completion of IBDP and 40 years), and because of plugging of screens and Tarbela Dam in the mid-1970s, Government of gravel packs, the capacity of most tubewells Pakistan (GoP) shifted emphasis to resolving decreased about 5 percent annually. Water tables waterlogging and salinity problems, and in 1973 were lowered and irrigation supplies supple- launched an `accelerated program' of waterlogging mented, but efficient management of public and salinity control (SCARP), building upon the tubewells proved elusive. success of the program of vertical drainage Furthermore, the addition of Tarbela water, (through tubewells) and surface drains, started in while significantly increasing dry season cropping, 1960 (for example, SCARP I). Planning studies tended to aggravate waterlogging problems in undertaken in the 1960s reinforced this approach, certain areas, and brought into focus concerns identified additional areas suitable for SCARP about overall efficiencies in the use of irrigation projects, proposed a major system of surface drains supplies. These concerns were heightened further to dispose off saline effluent, and emphasized by the demonstration under a USAID-funded irrigation benefits that could be obtained from research project that water losses in the system, canal remodeling and from SCARP tubewells in especially at the watercourse level, were signifi- fresh groundwater areas. SCARPs attempted to cantly higher than had been previously assumed. lower groundwater levels through tubewell pumping and, to a limited extent, through tile The RAP for Irrigated Agriculture (1979) drainage. Pumping from freshwater aquifers provided an additional source of irrigation water, Increasingly during the 1970s, it was recognized and enabled leaching of salts from saline soils. Over that a more direct approach to the problems of 12,000 public tubewells were installed, and the management, maintenance, and efficiency in the program was generally successful in controlling operation of Pakistan's irrigation system was waterlogging while supplementing irrigation required, and further, that such an approach would supplies. need to be more closely attuned to the immediate SCARP, however, had its own problems. Its constraints on agricultural production than in comprehensive approach to area development and the past. Low abiana recoveries,7 rising SCARP 7 Until the early 1970s abiana proceeds were sufficient to cover the full O&M cost, and a small percentage of capital cost. However, the then government did not increase abiana rates even in nominal terms and recoveries fell far below O&M expenditures. 104 The Evolving Role of the World Bank O&M costs, inflation, and pay commission the need to generate additional resources in both awards resulted in major neglect of the surface the public and private sectors to relieve acute irrigation system. Deferred maintenance began resource constraints facing Pakistan. to accumulate and institutional weaknesses, Specifically, the RAP recommended: manifested by poor quality of service delivery, (a) investment policies that emphasized quick also began to become apparent. By the early returns and that complemented existing 1980s, accumulated deferred maintenance of the facilities rather than expansion of irrigated irrigation system had reached unsustainable levels. area (rehabilitation, on-farm and watercourse To help evolve appropriate policies and programs improvements, essential drainage, and agricultural to implement such a new strategy to address support services); (b) management policies that emerging issues, a UNDP-financed and The transferred relevant activities to the private sector World Bank-executed study was mounted to (for example, tubewell development in fresh prepare a RAP for irrigated agriculture. groundwater areas) and that strengthened GoP While recognizing that programs to increase operating agencies; and (c) pricing policies that availability of water and other inputs will continue recognized continuing resource constraints and the to be important, the RAP recommended in 1979 need to provide appropriate efficiency signals to that greater priority be given to complementary the private sector. The RAP recommendations in measures designed to ensure efficient water use, a large measure were accepted by GoP and made in particular through farm-level programs, and part of the National Agricultural Policy in 1980. mobilization of private initiative and capital. The RAP also recommended better coordination Bank Assistance: During the 1970s, Bank between agriculture and water policies, improved assistance was devoted to completing the Tarbela water management at the farm and command area Dam, including the remedial works that required levels, discontinuation of new public investments special attention. In addition, the Bank approved in fresh groundwater areas and privatization of three drainage projects and a flood damage public tubewells, and system rehabilitation. restoration project. Recognition was given to the capacity of the farmer During the 1980s, Bank assistance focused to respond to appropriate incentives, as well as to on implementing the recommendations of the Table 6.2: Bank assistance (1971­80) Sr. # Financier Description Amount Amount Approval US$ US$ Date (Current) (2004­05) 1 IDA Flood Rehabilitation project 35,000,000 787,500,000 12-Mar-74 2 IDA Khairpur-II Irrigation and 14,000,000 182,000,000 24-Jun-76 Drainage Project 3 IDA Flood Damage Restoration 40,000,000 460,000,000 22-Feb-77 4 IDA SCARP-VI 70,000,000 763,000,000 6-Dec-77 5 IDA Tarbela Dam Supplement II 35,000,000 381,500,000 28-Feb-78 6 IDA SCARP Mardan 60,000,000 624,000,000 23-Jan-79 Total 254,000,000 3,198,000,000 Source: The World Bank data. 105 Pakistan's Water Economy Table 6.3: Bank assistance (1981­90) Sr. # Financier Description Amount Amount Approval US$ US$ Date (Current) (2004­05) 1 IDA On-Farm Water Management 41,000,000 323,900,000 16-Jun-81 2 IDA Irrigation System Rehabilitation 40,000,000 316,000,000 4-May-82 3 IDA Balochistan Minor Irrigation 14,000,000 110,600,000 11-May-82 and Development 4 IBRD Reservoir Maintenance Facilities 10,200,000 74,460,000 15-Mar-83 5 IDA Fourth Drainage Project 65,000,000 474,500,000 31-May-83 6 IDA Command Water Management 46,500,000 320,850,000 29-May-84 7 IDA Left Bank Outfall Drain--Stage I 150,000,000 1,005,000,000 13-Dec-84 8 IDA On-Farm Water Management II 34,500,000 231,150,000 6-Jun-85 9 IDA SCARP Transition Pilot 10,000,000 63,000,000 8-May-86 10 IDA Irrigation System Rehabilitation II 79,500,000 405,450,000 29-Mar-88 11 IDA Private Tubewell Development 34,400,000 184,000,000 11-Apr-89 12 IDA Flood Damage Restoration 40,000,000 158,240,000 11-Apr-89 Total 565,100,000 3,667,150,000 Source: The World Bank data. RAP.There was a sharp increase in Bank assistance and drainage investments that sought productivity both in terms of number of operations and improvements in reclaimed areas. amounts committed for the sector, involving In water management, the Bank supported two twelve operations with a total commitment of OFWM projects and a Command Water US$3.7 billion. Besides one operation for Management project. These projects recognized improved maintenance facilities for Tarbela, the need for giving greater voice to farmers in Mangla, and Chashma reservoirs, one flood decision making at the watercourse level. damage restoration project, and one project for Supporting legislation in the form of Water Users' small irrigation schemes in Balochistan, the Bank Association Acts was promulgated in all provinces. supported drainage, on-farm water management, In system rehabilitation, the Bank supported two system rehabilitation, and privatization of SCARPs successive nationwide projects to rehabilitate the in fresh groundwater areas. irrigation and drainage system. At the same time, In the drainage sub-sector, three Bank assisted O&M funding was substantially increased with SCARPs (Mardan, Khairpur II, and Panjnad the help of grants from GoP, and periodic increases Abassia) started in the early 1980s were completed. in abiana charges were covenanted with the Further, Bank assistance in drainage was focused provinces. However, institutional and policy on SGW areas and included one project in Punjab changes required to sustain O&M levels and (Fourth Drainage), and one in Sindh (Left Bank improve O&M planning and effectiveness Outfall Drain, LBOD Stage-I). While the focus remained lacking. of all these projects was on providing drainage The Bank also supported a program for relief, they were designed as integrated irrigation `SCARPTransition' (disinvesting public tubewells 106 The Evolving Role of the World Bank in fresh groundwater areas) on a pilot basis in Pakistan's irrigation system, this could be achieved Punjab to reduce the public sector O&M burden.8 by forming FOs at the secondary canal level i.e. A project to support private tubewell development distributaries/minors.' in fresh groundwater areas, with shallow water The drainage investments in SGW areas while tables, was supported to avoid the need for further solving local waterlogging problems, faced SCARPs in FGW areas. sustainability and environmental issues: In the 1980s, feasibility and detailed design studies for Kalabagh Dam, the storage project that l Firstly, besides off-farm drainage, these was envisaged to follow the construction ofTarbela investments also supported investments for Dam, were also started. on-farm drainage--primarily a private good--without requiring beneficiary Assessment of Bank Assistance in the contribution to capital cost. This gave the Post-RAP Period wrong signals to farmers that such investments would continue to be supported While Bank assistance during this period closely by the public sector. Furthermore, it followed the RAP recommendations focusing on downplayed the importance of improved sustainability of irrigated agriculture and water management to reduce the drainable improving water delivery efficiency in SGW areas, surplus caused largely by over-irrigation. the achievements were mixed, as explained below. l Secondly, except for limited investments in The OFWM investments were the most tile drainage, most subsurface drainage was successful in terms of intended outcomes, based on large capacity tubewells.This choice including substantial `water savings', and increases of technology, while reducing the initial in cropping intensities and farm incomes (see capital cost, resulted in several problems: (i) excerpts from OED précis). However, from farmers could not maintain the large capacity an institutional development viewpoint the tubewells; (ii) deeper groundwater being achievements were modest. WUAs were generally invariably more saline than shallower non-sustainable, mainly because they did not have groundwater, environmentally safe disposal a continuing responsibility for O&M of the system of drainage effluent became a problem; above the mogha (the outlet, as shown in fig. 2.4 (iii) local drainage disposal solutions on p. 6). The third On Farm Water Management received inadequate attention9; (iv) the focus (OFWM) project Implementation Completion on vertical drainage discouraged the Report (ICR) observed: `For long term development of local private industry for tile sustainability of the irrigation system, participation drainage (PVC resin and pipes, and of farmers in irrigation management is necessary. contractors specializing in laying horizontal Their participation could be enhanced if the pipe drainage) that has been successfully farmers' organizations have a continuous crucial developed on a large scale in other countries, role in O&M of the system. They should be for example, Egypt. responsible for distribution of water and collection l Thirdly, the projects involving surface of revenue resulting from water charges. In drainage (for example, LBOD Stage-I 8 Expenditure on O&M of SCARP tubewells accounted for nearly 50 percent of the Punjab Irrigation Department's annual O&M budget. 9 For example, the option of using evaporation ponds for saline effluent disposal was rejected, based on the results of poorly sited evaporation ponds in SCARP VI. Evaporation ponds have been successfully used in countries such as Australia for disposing saline drainage effluent. 107 Pakistan's Water Economy Project) were not designed to handle storm O&M, the situation reverted to the pre- water flooding, nor was a system of flood rehabilitation situation within three to five years. management (flood warning or alarm The rehabilitation investments primarily aimed system) made a part of the design. This at restoring the system to its original design deficiency has emerged as a major issue, without any element of modernization to convert particularly in the southern coastal district the system from a largely supply driven run-of- of Sindh (for example, Badin) where the-river system to a more demand driven system10 recurring severe flooding has occurred on intended for more modern agriculture. Additional several occasions. control and flow measurement structures and l Fourthly, most provinces defaulted on an O&M regime commensurate with its covenants requiring increases in water requirements were not supported as part of these charges. The resulting low recoveries were investments. The latter would have essentially highly inadequate for O&M, and drainage required a more fundamental institutional change infrastructure remained the most poorly with greater farmer participation and incentives maintained part of the irrigation and as its centerpiece. drainage system. OED Observations: In 1992, OED carried out Privatization of SCARPs in Punjab by replacing an ex-post evaluation of two OFWM and two government owned and operated large tubewells ISRP projects. Excerpts from these evaluations are with community owned and operated small given below: capacity shallow tubewells was perhaps the most successful and path-breaking investment l As approved, the four projects supported supported by the Bank. Firstly, it greatly reduced some of the most important priorities the O&M burden of the government, thus established in the RAP. But as implemented, substantially reducing the O&M cost and recovery they strayed from the program's agreed gap. Secondly, it broke the myth that waterlogging strategy: and soil salinity cannot be controlled by private p They failed to give highest priority to and community tubewells without compromising improvements in saline groundwater small farmers' access to groundwater. Thirdly, it areas. In these areas--which have no demonstrated that farmers can better meet their supplementary well water--the returns irrigation needs if they control the operation of to controlling water tables and supplying tubewells. more surface water are the highest. The investments in system rehabilitation no doubt p They came to be dominated by had short-term benefits of reducing incidence of quantitative targets for watercourse canal breaches, and solving siltation and erosion improvement, regardless of the likely in `problem' channels. However, due to the lack effects on water supply, waterlogging, of essential institutional changes and adequate and salinity. 10 Generally, the original design criteria of the canal system had evolved to fit availability of water supplies in the rivers, to meet the objective of bringing to maturity the largest possible area of crops with the minimum consumption of water, and to operate at a low cost and with a limited number of technical staff. These resulted in low cropping intensities and low yields. While these irrigation schemes were historically very successful in generating agricultural surpluses at a time of low population densities and few technological demands, they have been less well adapted to the requirements of modern agriculture. 108 The Evolving Role of the World Bank lThe water `saving'11 impact of the 9,860 clearly facilitates the Bank's wholesaling of watercourses improved under three of the development assistance, but is likely to have four projects, plus that from canal lining reduced the overall impact of the assistance. under CWMP, totals about 2.0 million acre l Recent projects have had some worthwhile feet (MAF), or 2.3 billion cubic meters... and widespread poverty alleviation impact, Although this is only a little more than half but have also provided at the same time, the savings anticipated under RAP, it is without any justification, large transfers of nevertheless more than a new surface storage public funds to many of the rural elite. dam at Kalabagh would provide (though that Differentiation would permit, among other would have power benefits as well).This next things, a more efficient allocation of scarce proposed main storage site would provide resources, taking relative needs into account. an estimated 3.5 million acre feet at the mogha at a cost of US$3.5 billion (in a 1985 The Post-Inter-Provincial Water Accord estimate). Period (1991­2005) lCanal rehabilitation and lining work in practice included significant capacity The beginning of the 1990s was marked by the expansion contrary to the agreed program. conclusion of a long overdue Water Accord for This apparently occurred to allow the sharing the Indus waters amongst the four provinces to absorb additional water provinces in 1991. A Water Sector Investment becoming available from Tarbela Dam, and Planning Study (WSIPS) was also completed to establish rights to that water before a in 1990 to update the RAP recommendations and formal allocation agreement took effect in prioritize investments. The WSIPS emphasized 1991. In areas that could not safely absorb the need to establish a comprehensive and more water, the resulting increases in reliable Data Bank Network for water resources, waterlogging and salinity have caused serious agriculture, soils, etc. to guide investment human and environmental problems. planning; revitalize institutional capacity in the lProgram designers had envisaged a farm provinces for investment planning; establish a credit approach, arguing that farmers would sector MIS; improve project approval and review find improvements in their watercourses processes; modernize procurement processes; profitable enough to repay loans. But, strengthen the local construction and consulting because of performance problems in the industries; and initiate a training program for credit system, the improvements relied institutionalizing integrated comprehensive heavily on construction subsidies. management of water resources. lVested interests and the perquisites of However, by 1992 it had become clear that the project activities distorted the incentives to RAP approach was not resolving the overriding participants, just as the efficient management problems of the irrigation system which remained of the system as a whole was undermined by in dire straits with problems similar to many other political influence and rent seeking. irrigation systems, including waterlogging and lThe bundling of assistance for the four salinity, overexploitation of fresh groundwater, low provinces together in these four projects may efficiency in delivery and use, inequitable have been administratively convenient, and distribution, unreliable delivery, and insufficient 11It is important to clarify here that water losses in areas where there are fresh groundwater aquifers are not real losses, as these losses simply recharge the aquifer for later usage. The only real savings in losses are those obtained in SGW areas. 109 Pakistan's Water Economy cost recovery system. It was realized that the RAP have to be supplied by the government. approach was not addressing the real underlying However, the underlying problem of causes of the problems Pakistan's irrigation system inappropriate institutional framework will was facing but rather trying to deal with the require reforms that will ensure autonomy, symptoms. With this realization, the Bank stopped transparency, and accountability of present new lending in the sector12 till a far-reaching new institutional set-up for drainage. strategy to address the real causes was agreed with l Any water service that is not a public good the government. In 1994, the Bank completed a shouldbecommercialized,andlater privatized. major sector study that resulted in the report l Only with market-determined incentives for entitled Pakistan--Irrigation and Drainage: irrigation and on-farm drainage is a sustained Issues and Options. The key findings and improvement in performance possible. The recommendations of this report were: government needs to remove barriers to a free market in water. Most important, the l In Pakistan, as in many other countries, the government will have to draw up enforceable government treats irrigation water as a public property rights to water, without which any good, whereas it is a private tradable good, attempt to legalize and commercialize water for which markets can operate. Lack of well- markets would be futile. Property rights and defined individual property rights and the legalized markets will make the opportunity illegality of sales of surface water severely cost of water transparent, leading to greater constrain informal irrigation water markets. efficiency in use. Instead of rooting out the barriers to water l The long-term option for the government markets, thegovernmentpublicly administers will be to define individual water property irrigation water. Inefficient pricing of water, rights, which are necessary to ensure equity resource misallocation, rent seeking behavior, in distribution. This would address the and `illegal' trading is the result. problems of tail-enders (that is, those at the l The government had not even adequately tail end of the system who receive little or met the requirements of an administered no water), while relieving pressure on system. It had failed to make budgetary groundwater resources. provisions for operations. Moreover, the l As a first step toward individual water rights, public body responsible for irrigation Pakistan may like to aim for communal maintenance was separate from (and had rights, which are legally and administratively poor coordination with) the agency easier toestablish.Userorganizations can then responsible for revenue collection. In the translate these communal rights into enforce- past, administrative discipline was adequate able individual rights of their members. but it had gradually broken down and the cost of irrigation maintenance had vastly The National Drainage Program increased. Nor were there any measures (NDP) Experience available to restore discipline. l Economic efficiency in irrigation delivery While endorsing, in principle, the main elements and use cannot be achieved because of the of the above strategy, in 1995­96 GoP proposed lack of right incentives. its own model for implementing the reforms that l Unlike on-farm drainage, off-farm drainage envisaged replacing the provincial irrigation is a public good.Thus, off-farm drainage will departments (PIDs) with a three-tier institutional 12 Other than emergency assistance for flood damage, and operations already appraised by then. 110 The Evolving Role of the World Bank set-up comprising autonomous Irrigation and distribution, and offered immense resistance Drainage Authorities at the provincial levels, Area and inertia to the changes the reforms sought Water Boards (AWBs) at the main canal level, and to bring.14 Farmer Organizations (FOs) at the distributary l Lack of champions, both at the working level canal levels. PIDAs were to be established in all and at the political level (except in Sindh, provinces, while one pilot AWB was to be and very recently in Punjab following established in each province with FOs at the changes in leadership). distributary canal level. Supporting legislations in l Focus on organizations, not on instruments the form of PIDA Ordinances were passed and and incentives. later endorsed by the provincial governments as l Lack of attention to sequencing, PIDA Acts. However, the emphasis was on prioritization, and the `rules for reformers'. organizations, not incentives and instruments. l Lack of a detailed strategy for implementing Water rights and entitlements that were advocated the key elements of the reforms; the PIDA in the Bank's strategy paper were not on the Acts envisaged a `stroke of the pen' immediate agenda. The Bank accepted the conversion of PIDs into PIDAs but lacked proposed model as a starting point for implemen- important details15 for implementing the ting the reforms as the centerpiece of the, reform strategy. Furthermore, the Acts did misleadingly named, NDP project assuming that not address the fundamental issues of a detailed strategy for implementing the reform legalizing water markets, or clarifying model and dealing with difficult political and communal and individual water rights. economic issues would be developed during the l The Bank's underlying assumption that course of project implementation. transition plans, severance packages, While a detailed evaluation of the NDP and change management arrangements implementation experience is beyond the scope would be defined and developed during of this paper, suffice it to say that relative to its implementation did not materialize stated objectives and program targets, the due to constant distraction by other implementation performance of NDP remained implementation issues, and battles of turf more or less unsatisfactory throughout and its and jurisdiction among the various outcomes have been modest.The main reasons for participating agencies. Similarly, the this unsatisfactoryperformance included, inter alia: expectations that more transparent volumetric measurements, bulk water sales, l Overly complex and ambitious project and water charges based on volume would design that failed to address the realities of be introduced during implementation also political economy embedded in the did not materialize, as they received far lower profound changes the reforms sought.13 priority than the easier to implement l Lack of ownership, particularly by the PIDs rehabilitation works. who saw the reforms as a threat to their l From 1999 onwards, the prevailing drought existence and monopoly on water and resulting water shortages dominated the 13 For example, not including the PIDs as participating agencies in the project while seeking to replace them with alternative bureaucracies. 14 Opponents of reforms wanted to create the impression that `the reforms had failed'; however, the opposing view is that actually the `agencies failed to reform'. 15 With the exception of Sindh, where the Bank had earlier approved an IDF grant for preparing an institutional development pilot project for the Nara Canal AWB. 111 Pakistan's Water Economy water sector debate in Pakistan, and the issues completion of key policy and sector studies that surrounding new storage proposals distracted have paved the way for the introduction of a the government's attention away from National Water Policy and a drainage sector drainage and institutional reform issues. strategy for the country. Fourth, the project improved the knowledge base by providing In retrospect, a drainage project covering all the funding for institutions and individual researchers, provinces and envisaging a major civil works and contributing international experience through component was not the right vehicle for study tours and use of international panels of implementing reforms that sought to focus on experts. Fifth, the project promoted farmer improving irrigation service delivery through participation in the operation and maintenance participatory management, a system of property of the irrigation system. Finally, the project rights, and incentives. A more focused irrigation provided a forum for the discussion of long-term project would probably have been a more options for the sustainable development of the appropriate vehicle. Indus River Basin, and as a consequence, has raised Notwithstanding this overall unsatisfactory awareness of the importance of sound rating, the NDP did yield several positive environmental planning and management. outcomes. First, it helped to clear the backlog of deferred maintenance of the existing system (some Other Bank Assistance parts of the irrigation and drainage system had during the 1990s virtually no maintenance for several years). Second, although the institutional reforms component had Besides supporting the NDP project, Bank a mixed performance, the need for the reforms assistance included the projects listed below. has been endorsed at the highest levels of the GoP Besides supporting a third OFWM project, of and provinces, and Sindh made commendable particular significance was the support for Second progress. Third, it was instrumental in the SCARP Transition and Punjab Private Sector Table 6.4: Bank assistance (1991­2000) Sr. # Financier Description Amount Amount Approval US$ US$ Date (Current) (2004­05) 1 IBRD On-Farm Water Management III 36,300,000 137,940,000 21-May-91 2 IDA On-Farm Water Management III 47,300,000 179,740,000 21-May-91 3 IDA SCARP Transition II 20,000,000 76,000,000 4-Jun-91 4 IDA Fordwah Eastern Sadiqia Irrigation 54,200,000 162,600,000 2-Jul-92 and Drainage 5 IDA 1992 Flood Damage Restoration 100,000,000 300,000,000 4-Mar-93 6 IDA Balochistan Community Irrigation 26,700,000 61,410,000 26-Sep-95 7 IDA Punjab Private Sector Groundwater 56,000,000 112,000,000 11-Jul-96 Development 8 IDA National Drainage Program 285,000,000 541,500,000 4-Nov-97 Total 625,500,000 1,571,190,000 Source: The World Bank data. 112 The Evolving Role of the World Bank Groundwater Development projects16 that to justify major interventions in storage, irrigation completed the privatization of the remaining infrastructure, and long-term solutions to inter- 6,000 SCARP tubewells in FGW areas of Punjab, provincial drainage problems. With respect to providing substantial relief to its O&M burden. irrigation, the overall strategy will be to unbundle Other projects included the Fordwah Eastern at the provincial level the support initially provided Sadiqia Irrigation and Drainage Project that under NDP, and support the provinces that have successfully established the first pilot FOs in demonstrated initial results and commitment. Punjab, who were handed over irrigation O&M In line with this interim strategy, the Bank and revenue collection responsibility in the approved On-Farm Water Management projects Bahawalnagar area of Punjab; a Flood Damage for NWFP and Sindh that provide support for Restoration Project; and a Community Irrigation physical improvements at the on-farm,17 Project in Balochistan. Although the preparation watercourse, distributary, and branch canal levels of feasibility and detailed design (including bid as well as for the reforms initiated under the NDP documents) for the Kalabagh Dam were project. In addition, the Bank reallocated funds substantially completed, implementation was not from the NDP Credit for Drought Emergency started because of environmental and political Rehabilitation, and more recently approved a controversies. project for the rehabilitation of theTaunsa Barrage on an emergency basis. Bank Assistance after 2000 and Post-NDP Recent Sector Work Following the mixed experience and outcomes of In 2003, as part of Public Expenditure Review NDP, the Bank adopted an interim strategy till a (PER), the Bank carried out a systematic review new CWRAS is agreed with the government.This of public spending in the water sector, and high- interim strategy has identified areas for lighted a series of strategic issues to be addressed partnership, and mutually agreed with GoP and by the government and the Pakistani society. provinces on the need to complement the reform The review culminated in Public Expenditure agenda with investments in infrastructure. It Management Vol. II, entitled Pakistan: Accelerated distinguishes two possible scenarios: the first one Development of Water Resources and Irrigated Agri- formed by interventions that could stand on their culture, September 2003. The main findings and own merits and that could reap significant benefits recommendations of this review were: for productivity enhancement, income generation, capacity building at the farm level, and guarantee l Pakistan has been living off the great the safety of existing infrastructure (barrages); the expansion in irrigated agriculture since the second one (`high case' scenario) would seek late 1970s when the last major storage progress in the articulation of the reform reservoir was completed. With the exception instruments (enforceable water entitlements and of two major drains to serve irrigated areas water rights, participation of stakeholders, transfer on the left and right banks of the lower Indus of responsibility over asset management, river, investment has been limited since that accountable institutions, water pricing and cost time mainly to ad hoc rehabilitation of canals, recovery policies, and environmental flows) so as drains, and salinity control tubewells. 16 As part of this project, a draft framework for groundwater regulation in Punjab was also prepared. 17 Including introduction of micro-irrigation technologies and piloting of volumetric water delivery and abiana on the basis of volumetric deliveries. 113 Pakistan's Water Economy l There is little doubt that water sector knowledge base that supports planning, investment must increase substantially to policy analysis, and investment (R&D, meet urgent needs for the modernization of information systems) the distribution system, groundwater p balance short-term and long-term management, controlling soil and water benefits by making investments in salinity, as well as improving governance and both water infrastructure and water the accountability of the institutions management, and in both supply and responsible for irrigation water service. demand management However, investment in infrastructure alone p better integrate irrigation, hydropower, will not meet the challenges--key policy and agricultural development investment changes, and institutional and governance programs and policy reforms are at least as important. p reflect a more rigorous economic, social, l The major strategic issues facing Pakistan in and environmental analysis to ensure the Indus Basin include soil and water that project priorities and plans make the salinity; environmental degradation of the best use of the limited resource and fiscal lower river and estuary; inter-provincial space conflict over water allocation and p be supported by a new consensus on management; vulnerability to drought and water management and development supply reliability; and pervasive inequity, that avoids the costly political conflicts inefficiency, and low productivity. of the past l A `supply side' approach has long been the p choose judiciously among investments in staple water policy in Pakistan, and as one supplyexpansion,systemexpansion,man- might expect, new water supply (dams) and agement, environmental sustainability, new canals dominate the current proposals productivity, and governance, and then for investment in the sector. But looking to sequencing these over time to achieve a the future, the combination of high timely and sustainable development population growth, persistent poverty, program with real and substantial lagging growth in rural areas, and the economic and social benefits. looming constraints onwater resources suggests that water resources development and Hydropower management in the next forty years will be and As shown in fig. 6.2, the Bank has had an episodic must be by design substantially different from engagement with hydropower in Pakistan. the past forty years. A genuine paradigm shift Hydropower was a major element of the Bank- is needed in the water sector, in which water funded Tarbela Dam (discussed in the earlier is `managed' from the mountain tops to the section), with 60 percent of all benefits from root zone of the Indus Basin. Tarbela being due to hydropower, and with the l The strategy going forward must: value of hydropower benefits ex post substantially p modernize both the water infrastructure higher than expected at appraisal. and the institutional and governance More recently, the Bank made a loan of US$350 arrangements for water management, million in 1996 for the successful US$2,000 and improve strategic planning and the million Ghazi Barotha Hydropower Project.18The 18 The World Bank, `Implementation Completion Report' for Ghazi Barotha Hydropower Project, June 2004, www.worldbank.org. 114 The Evolving Role of the World Bank Water Supply and Sanitation20 Fig. 6.2: Household income of families at Ghazi Barotha Hydropower Project before and after resettlement Water Supply and Sanitation (WSS) has been an integral part of the social sector investment Before: Mean income = 45,000 rupees portfolio of The World Bank. Starting modestly After: Mean income = 54,000 rupees in the 1960s, the Bank's overall WSS portfolio 100 grew to 9 percent of total commitments in 1979. less 80 Subsequently, dedicated lending decreased to 60 about 3 percent, excluding WSS components of income 40 nondedicated lending categories. Currently the with 20 bank, worldwide, has 100 dedicated WSS projects, % 0 < 5 5­10 10­15 15­20 20­25 25­50 > 50 and another 150 nondedicated projects with Thousand rupees per year significant WSS components. Lately, interest in the sector has grown because three targets under Source: The World Bank, 2004. MDGs depend on improving the coverage and quality of WSS service delivery. project was completed on time and on budget. It The World Bank's involvement, as well as its produces electricity of high value (since peaking experience, in the WSS in Pakistan, has been power is particularly short) at a very low cost of modest even compared with its overall worldwide US 1.7 cents per kwh (compared to an average engagement in the sector. Starting in the late generation cost in Pakistan of US 6.0 cents per 1960s, the Bank has financed just five dedicated kwh). The rate of return of the project was very WSS projects until 1999, five years ago focusing high at appraisal and even higher ex post--the primarily on water supply rather than sanitation. economic rate of return was 22.5 percent (versus The Bank has not financed any major sanitation 20 percent at appraisal) and the financial rate of project, although there are new projects like the return of 15.1 percent (versus 13.8 percent at Punjab Municipal Service Improvement Project appraisal).19 In addition to its large direct being appraised with possible Bank involvement contribution to the Pakistani economy, Ghazi in future. meant that the Bank was involved in a power Of the five Bank-supported projects, just one sector reform program in which WAPDA was to project covered rural WSS. Four projects were in be unbundled into independent generation, two of Pakistan's largest cities of Karachi and transmission, and distribution companies (a Lahore. The results have been mixed at best, process not yet complete). Finally, Ghazi dealt very because, according to OED reports: successfully with complex resettlement issues, which included legacies from Tarbela. Figure 6.2 l Legal frameworks and regulatory mecha- shows that those who were resettled were nisms were absent, and hindered achieve- much better off after than before the project, with ment of ambitious project objectives. average household income increasing by about l The functions of service provision and 20 percent. regulation were not separated. 19 The World Bank, `Implementation Completion Report' for Ghazi Barotha Hydropower Project, June 2004, www.worldbank.org. 20 Paper 17. 115 Pakistan's Water Economy l Strategies were needed to minimize political to make good progress toward meeting revised interference in operational and policy financial covenants. The project illustrated the matters (especially employment). need to allow for sufficient time in project l Capital cost contributions and cost recovery implementation schedules for institution building needed to be improved while protecting the and human resource development. Great emphasis interest of `the poorest of the poor'. There on dealing with physical implementation were opportunities for market segmentation problems was at the expense of operational aspects. and differential pricing that could be OED noted that Lahore is fortunate to have exploited. twenty-four-hour water supply and a comprehen- l The sanitation aspect in most of the projects sive sewerage system. The service needs continue was not addressed. to grow as the city expands while requests for increase in tariff level are met reluctantly. The The following is a summary of the Bank- situation of Lahore located on a sweet water aquifer supported WSS projects based on various Bank and in close proximity to river Ravi with potential documents. recharge is unique, and duplicating this model may be a challenge elsewhere in the country. Lahore Water Supply Sewerage and Drainage Project (1967­72) Karachi Water Supply and Sanitation The main objectives of this relatively small Urban Projects (1983­91) Water Supply Project were to rehabilitate and Objectives were to (a) increase Karachi's water expand water supply, sewerage, and drainage supply by 60 MGD; (b) introduce system and facilities at Lahore, and to help establish an household metering; and (c) strengthen Karachi institutional capability to efficiently operate Water and Sewerage Broad (KWSB) through TA existing facilities and develop capacity for long and Training. The project helped increase supply range program expansion. According to an OED between 60­70 MGD. However, success in report, revision of the scope and design made controlling leakages was limited. Through evaluation and comparison with original installation of meters and repairs there was appraisal difficult. Despite difficulties the long- improvement in revenue recoveries from bulk run development objectives of water, sewerage, and users, but it had less effect on revenue from drainage were achieved. domestic consumers. The project increased long- Second Lahore Water Supply Sewerage term quality and reliability of bulk supply to and Drainage Project (1976) Karachi. However, KWSB still did not achieve financial sustainability and required subsidy. The Project objectives were to (a) continue with the project helped strengthen KWSB capacities to improvement and extension of Lahore's water manage and execute large projects.The June 2000 supply, sewerage, and drainage system; (b) develop OED observations on the project stressed the need an efficient public utility organization which for an adequate regulatory framework that would be competent to continue the provided sufficient management autonomy and a implementation of a proposed ten-year investment path for reform that guarantees sustainability, plan; and (c) develop an urban project which IA limitations of financial covenants and subsequently helped to finance. According to conditionality, and the need to incorporate in OED, the project was successful: the main project project design valuable local experiences, objectives were met and the physical components particularly when they specifically address poverty implemented. Tariff adjustments helped WASA alleviation. Overall, OED evaluated the project 116 The Evolving Role of the World Bank outcomes to be unsatisfactory with unlikely management added to the difficulties; and the sustainability. project design should have incorporated more of community participation, especially under the Second Karachi Water and sanitation component where Karachi had gained Sanitation Project valuable experience from the well-known Orangi The main objectives of this follow-up project were Pilot Project. to (a) increase potable water supply and reduce Rural Water Supply and Sanitation water loss; (b) improve the financial viability of (1992­95) Karachi Water and Sewerage Board (KWSB) through increased revenues, cost reduction, and This project covered all four provinces as well increased operational efficiency; (c) improve the as AJK. As per OED, `it is difficult to measure organization and management of KWSB; the achievement of general project objective (d) improve sanitation in the city of Karachi, inclu- of improving rural productivity and health ding its low-income and coastal area by increasing particularly of women and children and reduce sewerage coverage and sewage treatment capacity. poverty and deprivation in rural Azad Jammu and An OED evaluation states that none of the four Kashmir (AJK), Balochistan, and Sindh, since the objectives were fully achieved: (1) the water supply project failed to develop monitoring and impact was increased but no reduction in losses is indicators. There was success in implementing the documented, and (2) the financial viability of the hardware components, while the software KWSB hardly improved; it survived due to components were scaled back considerably. In the government subsidies throughout the 1990s. The three provinces, only between half and two thirds operational efficiency and the intended reduction of the institutional development assistance funds in water losses of KWSB were impossible to gauge were actually spent. since it chose not to meter domestic consumption. The project was the first IDA-financed rural KWSB's organization and management did not water supply project in Pakistan with a demand- improve even after reducing staff from 14,000 to driven approach incorporating significant 8,500, and some limited administrative community involvement--and with contributions improvements. The water supply quantity and from beneficiaries toward capital investments.The quality are probably worse after the completion new methodology required a change of mindset of the project because of a rapid population growth of public schemes that had proved unsustainable. in Karachi, and especially among the low-income Indications are that roughly 95 percent of the water population. A significant shortcoming was the schemes built under the project are still operating legal and regulatory framework. An effort was three years after completion. In terms of belatedly made at the behest of the Bank to involve shortcomings--the program to expand sanitary a private operator, but in the end these efforts came excreta disposal programs did not meet the to nothing. expected acceptance and fell far short of planned According to OED, the main lessons learned achievements. were that without a fundamental legislative and OED in its review of the project noted the regulatory reform, including changed incentives following lessons learned from this experience: and contracting of a private operator, the project was doomed from the start; financial covenants l A demand-driven rural water supply were ineffective if KWSB lacked the authority and and sanitation strategy based on strong means to comply with them; excessive community participation requires a longer politicization of the tariff setting and of the time to take root than what is usually offered 117 Pakistan's Water Economy by one single project. The AJK component l The World Bank needs to assist countries in performed better than the Balochistan and developing and maintaining appropriate Sindh components precisely because stocks of well-performing hydraulic it enjoyed a century-old tradition of infrastructure and in mobilizing public community participation whereas the other and private financing, while meeting two did not. environmental and social standards. l Changing the habits of excreta disposal l The World Bank will re-engage with high- implies a much greater effort than providing reward/high-risk hydraulic infrastructure, water supply. Symptomatically, the water using a more effective business model. supply investments performed much better l The Bank's water assistance must be tailored than the latrine components. to country circumstances, and be consistent l Project objectives should be stated in terms with the overarching Country Assistance that would allow quantitative monitoring of Strategies. progress towards reaching them. Subsequently, the Board drew on the main messages--of more aggressive Bank engagement The Bank's New Water Strategy in infrastructure--in setting the parameters for an Infrastructure Action Plan. And recently, the In parallel with these reviews ofThe World Bank's major OED annual review, the `Annual Review of engagement in water in Pakistan, and influenced Project Effectiveness', carries the same message: by them, the Bank developed a new Water Strategy, `The World Bank should focus on promoting which was approved by the Board of the Bank in economic growth rather than social policies as the 2003, and set a new direction for Bank route to reducing poverty... and calling on the engagement in water throughout the world. The Bank to refocus its efforts on infrastructure projects main messages of 2003 Water Strategy are: and urban and rural development'.21 l Water resources management and development is central to sustainable growth An Indicative World Bank and poverty reduction, and therefore of Water Investment Program central importance to the mission of The for 2006­10 World Bank. l Most developing countries need to be active The Four Pillars both in management and development of water resources infrastructure. An important objective of this Report is to be an l The main management challenge is not input into defining the water elements of the a vision of integrated water resources framework (known as the Country Assistance management, but a `pragmatic but Strategy) which will govern the relationships principled' approach that respects principles between The World Bank and Pakistan for the of efficiency, equity, and sustainability, but period 2006­10. The program described here is recognizes that water resources management `almost but not quite' final. `Almost', because there is intensely political, and that reform requires have been extensive discussions between the Bank the articulation of prioritized, sequenced, and the federal and provincial governments of practical, and patient interventions. Pakistan over water-related priorities over the past 21 Andrew Balls, `World Bank under fire on spending priorities', Financial Times, 20 May 2005. 118 The Evolving Role of the World Bank Fig. 6.3: The `global poll' results for South Asia 20 Education Governance 15 ity ior Infrastructure pr 10 elopmentv De Social 5 Civil Soc Health ronment 0 0 5 10 15 20 Priority that should be given by the Bank Source: The World Bank, 2003. eighteen months. The indicative program investments in the sector must be increased described here is a product of those discussions substantially. The federal government is already and thus one on which there is close agreement, demonstrating its commitment in this regard.The between the government and the Bank. Second, allocation for water in Public Sector Development `not quite', because the details of the `Government Program (Federal Development Budget) jumped of Pakistan-World Bank contract on water' for the from 20 billion rupees in the fiscal year 2005 to next four years will only be finalized, necessarily over 35 billion rupees in the fiscal year 2006, and appropriately, over the next several months as representing a 75 percent increase.This is in broad Bank management and the Ministry of Finance agreement with the findings of a major poll of a finalize the overall CAS. wide variety of South Asian stakeholders (fig. 6.3), Since 1980, investments in the irrigated which concluded that infrastructure, education, agriculture sector (water and agriculture) have been and governance were the three areas which were declining, both as a percentage of the total public both of high national importance and where spending and as a percentage of GDP. In 2003, the Bank was perceived to have a comparative the total allocation for agriculture and water advantage. represented only about 0.5 percent of GDP. The There is also a general agreement that the water federal and provincial governments and the sector is an area where the Bank has a long history management of The World Bank all agree that and a strong comparative advantage. There is, water management is one of the central therefore, a general agreement that there will be a development challenges facing Pakistan, and that major increase in Bank lending for water-related 119 Pakistan's Water Economy Fig. 6.4: World Bank lending to Pakistan for water-related sectors-- past and prospective Major Infrastructure Floods Rural WS&S % of all Bank lending Irrigation and Drainage Urban WS&S Hydro 600 500 50% ear US$/y 400 40% lending Bank 300 30% all 2004­05 of of % 200 20% Millions 100 10% 0 1952­60 1961­70 1971­80 1981­90 1991­2000 2000­04 2006­10 Source: The World Bank data. activities, with the indicative overall figures shown Pillar 1: Asset Development and in fig. 6.4. This would mean that water-related Management lending for Pakistan would increase about tenfold from the 2000­04 period, and account for over Pakistan has a large endowment (with an estimated US$1 billion in the coming four years. replacement value of US$60­70 billion) of water Given the diverse set of challenges facing the resources infrastructure, most owned and managed sector and the large need for resources, Bank by the provinces, and much now quite old. As support would need to be selective, keeping in described in this Report, the condition of this stock view its comparative advantage, other donors' of infrastructure is a major cause of concern. In traditional areas of support, and the priorities some instances--such as Taunsa and Sukkur identified in this Report.The World Bank support barrages--the precarious state of major structures would focus on instruments and incentives for puts the well-being of tens of millions of people at reforms rather than simply on organizations, risk. In other instances, the effect is more insidious, programs, and projects. It would be based on with the poor condition of canals and pipes and `principled pragmatism' recognizing that reforms treatment plants meaning that infrastructure does and investments must proceed in parallel, and not produce the services it should, and people have the best should not be allowed to become the to adapt to unreliable and substandard services. enemy of the good. Broadly speaking, Bank For these reasons, a major focus of Bank assistance would support four pillars of the water engagement over the next four years will be to sector, as follows: simultaneously finance much needed investments 120 The Evolving Role of the World Bank in rehabilitation of some critical assets (including engagement with such controversial issues because barrages), and to work with federal and provincial of reputational risks to the Bank (with Bank authorities to develop a more appropriate investments in hydropower, for example, falling culture and practice of asset rehabilitation and by about 90 percent over the course of the last management. This will include an emphasis on decade). More recently, the Board of the Bank has development of Asset Management Plans, which debated these questions at length (including in will include an inventory of existing assets, an the course of discussions on both the Water evaluation of their condition and the requirements Strategy and Infrastructure Action Plan). The for one-time and regular rehabilitation, and for Bank's borrowers have all said that the Bank is maintenance. Out of this assessment will emerge needed precisely where issues are complex and a set of short- and medium-term priorities for difficult. The broad conclusion is that the Bank asset rehabilitation and maintenance. The Asset must re-engage with such `high-risk/high-reward' Management Plans will make explicit the investments when there is a sound case for doing requirements (and trade-offs) for public and this, and when the Bank has a strong comparative user financing, and the importance for developing advantage. In the case of possible storage on the efficient institutional arrangements for rehabilita- Indus, then, the Bank understands fully and ting and maintaining this infrastructure. exactly how controversial this issue is. But the Bank As is evident throughout this Report, most of also believes that new storage is of overwhelming the water in Pakistan is already allocated. The national importance to Pakistan, and that delay implicit view of the Bank, accordingly, is that makes things more difficult not easier. Accordingly, attention should be focused on sustaining the in discussions with the government it has been infrastructure that has been built, and improving agreed that the Bank could be involved in the productivity of water. A vital part of Bank financing a new dam on the Indus if the economic, activity in the past has been on drainage.The Bank technical, social and environmental, institutional, will continue to invest, as part of provincial invest- financial, and commercial feasibility is established. ment programs, in drainage and salt management, As the government understands, and as this Report and will continue to contribute to the evolution has repeatedly stressed, building a dam is just one of national and provincial drainage and salt part of a set of necessary activities, which include management strategies. improving the transparency and efficiency of One major issue that is likely to emerge in the administration of the Water Accord, and making next CAS period is possible Bank engagement in a set of institutional reforms and investments at developing and cofinancing major new Indus provincial, canal command, and farm levels to Basin storage and hydropower, if and when the ensure better use of water. government makes such a decision. As is discussed This Report has concentrated heavily on the in detail in this Report, this is a highly controversial challenges in the Indus Basin, because they loom issue in Pakistan, in part because of reasonable so large in Pakistan and because they are so concerns about the cost and impact of a new dam complex. This focus notwithstanding, the Bank's and the distribution of costs and benefits, in part investment program includes investments in because of dissatisfactions with the lack of infrastructure (mostly in NWFP and Balochistan) transparency with implementation of the Water in small dams and minor irrigation schemes, and Accord, and in part because this acts as a surrogate in groundwater management in the barani areas for a series of weakly related historic and outside the Indus Basin. contemporary political grievances. Over the past In the urban water and sanitation sector, the decade, the Bank has tended to shy away from Bank is likely to finance a project in Punjab, which 121 Pakistan's Water Economy would implement the recommendations of the the federal and provincial levels) have not made ongoing studies, as well as rehabilitation and the transition from the era of development and extension of the delivery systems. If it is not construction to the era where management of possible to design a long-term concession contract resources and services is the primary challenge. for Lahore, then this loan might also fund invest- The formal service delivery structures for both ments which would be included in a lease contract. irrigation, and water and sanitation services, are exclusively large public enterprises, which operate Pillar 2: Water Resources Management with little accountability to their users, and with little transparency. Helping start the transition As stressed throughout this Report, the develop- away from this old model to a modern service ment and management of the water resources of delivery architecture was the major objective of Pakistan in general is a huge challenge, requiring the (misnamed) National Drainage Program very high levels of administrative, engineering, and (which emphasized issues of water users' scientific capability.There is broad agreement that associations, and autonomous provincial irrigation over the recent decades the capacity for modern agencies). While achievements under the NDP water resources management at both the federal were (as described earlier) modest, many lessons and provincial levels has not evolved rapidly were learned (about keeping projects focused on enough to meet the emerging challenges. a few key objectives, and about the need for Accordingly, over the next CAS period the Bank encouraging experimentation with different forms will give high priority to supporting the of sound institutional reform), and the centrality development of capacity at the provincial and of the objectives of the NDP remain valid. federal levels. For surface water supplies a major Accordingly, the Bank will remain heavily enga- emphasis will be building on Pakistan's platform ged in provincial efforts to improve the quality, of defined water entitlements, and making the efficiency, and accountability with which services administration of these more transparent and are delivered. Specifically, for reasons described in accountable from the inter-provincial to the user this Report, the Bank will emphasize instruments levels. For groundwater, the Bank will support the as much as organizational forms. This will mean development of a government capacity for an emphasis on the development of frameworks knowledge generation and management, and for which encourage the entry of new players policy and implementation of groundwater (including community organizations, and the management. In both cases, there will be an small- and large-scale private sector), the use of emphasis on incorporating environmental issues contracts which specify the rights and obligations (including water quality, wetlands, and of providers and users, and benchmarking for all environmental flows). An important element of water services.The Bank will put a major emphasis Bank support will be the training of a new on the nexus of entitlements, measurements, and generation of multidisciplinary water resources transparency. This will mean emphasizing specialists; and will include stimulation of centers measurement and reporting throughout, and the of excellence for water resources sciences. associated investments in measurement devices, information technology, and real-time reporting Pillar 3: Service Delivery of what is actually delivered to whom. Infrastructure is, of course, not an end in itself, Pillar 4: On-farm Productivity but a means to the end of providing users with better, and more sustainable services. In many An important distinction between water supply ways, state water institutions in Pakistan (at both services and irrigation services is that the former 122 The Evolving Role of the World Bank are an end in themselves, whereas the latter are trade-offs (investments in new reservoirs, system simply one input into a multifaceted effort to expansion, groundwater management, and improve agricultural production. Many of the research and capacity building). elements of this challenge (such as credit, Finally, in the long term (six to ten years), marketing and agricultural research, and extension Pakistan would need to focus on human resource services) are addressed as part of the Bank's overall development; reviving excellence in research and rural and agricultural program, and addressed in development; attaining financial sustainability for the companion work on those sectors. The Bank's the sector; and meeting the Millennium Goals for water portfolio, however, has and will continue drinking water supply and sanitation. to go beyond the delivery of water services, and involve investments in on-farm services (land The Investment Projects leveling, watercourse lining, introduction of new Over the course of the past year, the government technologies, etc.) which are essential for and the Bank have identified an indicative set of agricultural diversification and for improving the projects and programs which Pakistan is likely to amount of crop, income, and jobs produced per ask the Bank to finance. It is agreed that the Bank drop of water. would provide support through its various lending Priorities and Sequencing instruments, including budgetary support for policies and prior actions that address key issues Pakistan needs to move forward on all the four (Development Policy Lending) as well as through pillars simultaneously. Priorities and sequencing specific investment lending for infrastructure and of investments (short-, medium-, and long-term) institutional reforms.There is agreement that there should seek to maximize benefits (measured in will be a major increase in Bank lending for water- terms of public welfare) from policy reforms and related activities, with the indicative overall figures investments, subject to various constraints (budget, shown in fig. 6.4. This would mean that water- water, and other resources). related lending for Pakistan would increase about In the short term (next one to two years), the tenfold from the 2000­04 period, and account focus would need to be on the low hanging fruit for about US$1 billion in the coming four years. under each pillar, which can be harvested at The tentative lending program for the next four relatively low cost and effort with high returns. years would be as follows: These include improving asset management planning; establishing O&M cost sharing Punjab Irrigation Policy Loan (US$400 million) principles; investing in critical rehabilitation; high This three to four year program would support pay-off investments that would improve water use the reform program in Punjab's irrigation sector efficiencies; reducing costs; decentralizing built on four pillars: asset development and irrigation management; ensuring greater management; water resource management transparency in water entitlements and allocations; (including investments in capacity building, putting systems and instruments in place; and knowledge generation and management, and pilot starting activities that have longer gestation projects for groundwater management); reform of periods, such as planning for major infrastructure, irrigation service delivery; and enhanced on-farm human resource development, and capacity services to increase water productivity.The policy building. framework could include a medium-term (ten- In the medium term (next three to five years), year) vision of how Punjab wishes to change its the focus would need to be on items that management of water resources and irrigation require further preparatory work and analysis of services, including broad outcomes and targets and 123 Pakistan's Water Economy short-term targets, of what can be achieved Punjab Water Infrastructure Investment immediately in terms of policy and institutional (US$150 million) Several barrages in Punjab reforms. require rehabilitation and modernization to address problems arising from deficiencies which Punjab Municipal Services Improvement could lead to progressive structural failure and Loan (US$65 million) This loan is designed to serious economic consequences. Besides physical improve efficiency, coverage, and quality of basic rehabilitation, improvements, and modernization, infrastructure/services through: developing an the project will also support institutional and efficient mechanism for allocating public resources organizational restructuring and capacity building, for infrastructure; building capacity of government and improved O&M regimes. to manage local government performance improvement and of city districts/TMAs for Balochistan Small-scale Irrigation (US$40 improved urban management, governance, and million) The project would develop water delivery of urban services; and providing resources through restoring and increasing water performance-related matching grants for storage; increasing productivity of water through infrastructure repair/renewal. It is likely that water more efficient use; and developing capacity to and sewerage services would be part of this. formulate a water resources development plan using surface water, groundwater, and watershed Sindh Water/Irrigation Sector Improvement management. Components include: water Program (US$140 million) The project management (with a special emphasis on would improve water productivity through a groundwater); infrastructure for restoring the reform agenda/investments leading to a better hydrological balance of Band Khushdil Khan; management system that would link canal construction of delay action dams and selected command areas, the distributary, and the small-scale irrigation projects; on-farm water watercourse level. Components include: capacity management; modernization of irrigation systems building; civil works; agriculture and irrigation and subsidies for efficient on-farm irrigation technology; and management and administration. systems and modern irrigation technologies; and institutional development--among farmers, water NWFP--Irrigation Sector Improvement users, and different levels of the government. Program (US$70 million) The project would have similar objectives and similar Punjab Water Sector Irrigation Investment components to the Sindh project described (US$100 million) The project would support above. institutionalreformsinwaterresource management and delivery of irrigation services in specific canal Private Power (Bank Group) Investment (total commands of Punjab through an `incentive-based US$200 million) In view of the projected approach'. Farmers and farmer organizations will shortfall in generating capacity (from about 2007­ play a major role, and would compete for a set of 08), there is an urgent need to elicit private sector `rewards' for meeting specified `entry conditions'. resources for new/greenfield generation projects. The `entry conditions' would relate to items like The Bank, jointly with IFC and/or MIGA, would formation of farmer organizations, commitment support government efforts to attract private to implementing water entitlements, provider/ investments for such projects, including potentially user contracts, and water measurement and both run-of-the-river and multipurpose monitoring. The `rewards' would be investments hydropower projects. in capacity building, canal modernization, 124 The Evolving Role of the World Bank measurement devices, and on-farm services, and regulatory mechanisms, and building capacity to possibly an option in which the farmers could improve urban water and sanitation services in choose `professional management'. other towns. The Bank has not been involved in rural water A Federal Water Resources Capacity Building supply and sanitation for some time, and thus has Loan (US$40 million) This project would limited knowledge of the sector. Given the develop the capacity of the federal government importance of this sector for the welfare of the (including the proposed National Water Council underprivileged, the Bank needs to re-engage. A and its Secretariat, IRSA, Planning Commission's first step would be a review of the status of the Water Resources Section, and WAPDA water sector and key policies, with a particular focus on wing) to become a more effective custodian of the the project initiation and design mechanisms, the nation's water resources. It will include major supply chain, cost recovery, and operations and investments in knowledge management (including maintenance arrangements. A major challenge is modernization of measuring equipment, decision likely to be the evolution of infrastructure-driven support systems, and priority applied research); it Public Health Engineering Departments. will include training of a new generation of multi- disciplinary water resources specialists; and will Evolving Priorities and the Indicative include stimulation of centers of excellence for Bank Water Investment Program water resources sciences. The Country Assistance Strategy is not a Analytic and Advisory Services document which is set in stone, but rather a living document (with an associated set of lending and As described throughout this Report, Pakistan is non-lending activities) which evolves as conditions going to have to invest heavily in the generation and knowledge change. The intensive work and and management of knowledge. Pakistan looks to discussions which were part of producing this the Bank as a major partner for providing global document have, predictably and appropriately, knowledge on modern water development and changed perceptions both in Pakistan and the management. In the past, the Bank has provided Bank, and brought to the fore several hitherto such services out of its own resources and by relatively neglected priorities. In particular, making use of a variety of global trust funds. Given there are two areas that are likely to gain greater the need to intensify such analytic and advisory prominence than they have in the current services, the Bank is developing, with partial indicative CAS plan. support from the Government of the Netherlands, The first of these is urban water supply a multi-year program which would enable the and sanitation. Pakistan is urbanizing and provision of a greatly increased set of advisory, industrializing rapidly. While irrigation will knowledge, and capacity building services to both remain by far the largest user of water, in the future the federal and provincial governments. water development and management in Pakistan In the important urban water and sanitation will no longer be synonymous with irrigation and sector, the Bank Group has recently become drainage.There are several dimensions to this shift: involved in an advisory capacity in Punjab. The more and more water will need to be reallocated International Finance Corporation (IFC) is from agricultural to urban uses; much greater providing advisory services for Lahore, while the investments will need to be made in collecting and Bank is helping to investigate contractual treating urban and industrial wastes; and major incentives, financing mechanisms, pricing, changes will need to be made in the way in which 125 Pakistan's Water Economy urban services are financed and delivered so that detailed analytic work on the area. It is likely that coverage and service quality are improved. To a a product of this work will be a program of Bank substantial degree the long history of Bank investments in municipal and industrial water and engagement with water through the irrigation wastewater which is more substantial than that sector in Pakistan has meant that the Bank's view, reflected in this Report. and the Bank's water-related investments (as shown The second area of relative Bank neglect that in fig. 6.4), have not adequately reflected the need emerged during discussions on this Report is that for similarly intense attention to municipal and of hydropower. Again, in part stimulated by the industrial water and wastewater. The discussions discussions around this Report, the Bank will start stimulated by this Report concluded that this is a process of more specific assessment of the role indeed an area where Pakistan's needs are large and of hydropower (micro, mini, and large, both growing, and where the Bank needs to become through run-of-the-river and storage projects) and more engaged. The Bank will do this by initiating the potential for greater Bank involvement. 126