Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 27626
IMPLEMENTATION COMPLETION REPORT
(TF-21162 TF-20417 TF-50090 TF-21718 TF-20479)
ON A
GRANT
IN THE AMOUNT OF SDR 9.1 MILLION
TO THE
EXECUTIVE COMMITTEE OF THE INTERNATIONAL FUND FOR SAVING THE ARAL SEA
FOR A
WATER AND ENVIRONMENTAL MANAGEMENT PROJECT
February 25, 2004
Environmentally and Socially Sustainable Development Unit
Europe and Central Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS
(Exchange Rate Effective )
Currency Unit =
FISCAL YEAR
January December
ABBREVIATIONS AND ACRONYMS
ASBP
Aral Sea Basin Program
POE
Panel of Experts
BVO
Basin Water Management
SDR
Standard Drawing Rights
Organizations
CACs
Central Asian Countries
SIC-ICWC Scientific Information Center of ICWC
DTF
Dutch Trust Fund
SIDA
Swedish International Development
Agency
EC-IFAS
Executive Committee of IFAS
SYNAS
Syr Darya Control and Northern Aral
Sea Project
EU-Tacis
European Union ­ Technical Assistance TACIS
Technical Assistance
for Ce.States
GEF
Global Environment Facility
TF
Trust Fund
ICR
Implementation Completion Report
TRIB
UNDP's Transboudary River Basin
Initiative established with funds from US
State Department
ICWC
Interstate Commission for Water
UNDP
United Nations Development Program
Coordination
IFAS
International Fund for Aral Sea
USAID
United States Agency for International
Development
MTR
Mid-Term Review
WARMAP TACIS Project, Water Resources
Management and Agricultural
Production in the Central Asian
Republics
PMCU
Project Management and Coordination WEMP
Water and Environmental Management
Unit
Project
Vice President:
Shigeo Katsu
Country Director
Dennis de Tray
Sector Director/Sector Manager
Laura Tuck/Marjory-Anne Bromhead
Task Team Leader/Task Manager:
Masood Ahmad

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ARAL SEA
ARAL SEA WATER AND ENVIRONMENTAL MANAGEMENT PROJECT
CONTENTS
Page No.
1. Project Data
1
2. Principal Performance Ratings
1
3. Assessment of Development Objective and Design, and of Quality at Entry
2
4. Achievement of Objective and Outputs
7
5. Major Factors Affecting Implementation and Outcome
13
6. Sustainability
16
7. Bank and Borrower Performance
17
8. Lessons Learned
20
9. Partner Comments
22
10. Additional Information
23
Annex 1. Key Performance Indicators/Log Frame Matrix
24
Annex 2. Project Costs and Financing
25
Annex 3. Economic Costs and Benefits
31
Annex 4. Bank Inputs
34
Annex 5. Ratings for Achievement of Objectives/Outputs of Components
36
Annex 6. Ratings of Bank and Borrower Performance
37
Annex 7. List of Supporting Documents
38
Annex 8. Project Design and Implementation
40
Annex 9. Parallel and Spin-off Projects
42
Annex 10. Borrower's Comments
43
MAPS
IBRD 28879
IBRD 28893
IBRD 28894

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Project ID: P008326
Project Name: ARAL SEA WATER AND
ENVIRONMENTAL MANAGEMENT PROJECT
Team Leader: Masood Ahmad
TL Unit: ECSSD
ICR Type: Core ICR
Report Date: February 25, 2004
1. Project Data
Name: ARAL SEA WATER AND ENVIRONMENTAL L/C/TF Number: TF-21162; TF-20417;
MANAGEMENT PROJECT
TF-50090; TF-21718;
TF-20479
Country/Department: ARAL SEA
Region: Europe and Central Asia
Region
Sector/subsector: Central government administration (56%); Other social services
(23%); General agriculture, fishing and forestry sector (17%);
Irrigation and drainage (4%)
Theme: Water resource management (P); Environmental policies and
institutions (P); Conflict prevention and post-conflict reconstruction
(P); Participation and civic engagement (P); Biodiversity (S)
KEY DATES
Original
Revised/Actual
PCD: 01/16/1996
Effective: 09/17/1998
09/17/1998
Appraisal: 05/18/1998
MTR: 03/15/2000
07/06/2001
Approval: 06/11/1998
Closing: 06/30/2003
06/30/2003
Borrower/Implementing Agency:
EC/IFAS/EC/IFAS
Other Partners:
Netherlands, Sweden, EU
STAFF
Current
At Appraisal
Vice President:
Shigeo Katsu
Johannes F. Linn
Country Director:
Dennis de Tray
Ishrat Husain
Sector Manager:
Marjory-Anne Bromhead
John Hayward
Team Leader at ICR:
Masood Ahmad
Werner Roider
ICR Primary Author:
Peter Whitford; Anatoly Krutov;
David Pearce; Masood Ahmad;
Mahwash Wasiq
2. Principal Performance Ratings
(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely,
HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)
Outcome:
U
Sustainability:
L
Institutional Development Impact:
N
Bank Performance:
U
Borrower Performance:
U
QAG (if available)
ICR
Quality at Entry:
U

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Project at Risk at Any Time: Yes
An accurate rating of project outcomes would be "moderately satisfactory". However, this ICR rates the
project as "unsatisfactory," since no "moderately satisfactory" category exists in the PDS format. The "U"
rating has been given for three reasons: First, overall financial management in particular, was weak.
Second, the project lacked ownership by the five countries as project implementation was dominated by the
leader of the project management and coordination unit (PMCU) based in Uzbekistan; line agencies in the
other countries were not properly represented in decision making during project implementation. Third, the
project did not achieve the stated objective of reducing withdrawals of water for irrigation by 15% over the
project period. This was intended as a target of the overall Aral Sea Basin Program. However, the Water
and Environment Management Project documents also show this as a project target. It was unrealistic to
state this ambitious goal as the target of a US$20 million project.
It would have been impossible for the project to achieve close to 15% reduction by itself since this would
have required substantial physical investments in rehabilitation of irrigation and drainage systems in
addition to the strategic studies, pilot projects and public awareness programs supported under the project.
Over the past six years, the amount of water extracted for irrigation has in fact been reduced by 15% in the
Syr Darya Basin. This occurred primarily because of reductions in the area irrigated and increased
releases of water for hydropower generation in the winter.
Despite the overall rating, several outcomes were positive. These were: (a) a clearly articulated
assessment of key water management issues in the Basin; (b) a road map for addressing them; (c)
restoration of key wetlands; (d) improved dam safety; and (e) improved monitoring of water flows. Details
are given in Section 4. on achievements of objective and outputs.
3. Assessment of Development Objective and Design, and of Quality at Entry
3.1 Original Objective:
The overall objective of the Water and Environment Management Project (WEMP) was to help implement
the Aral Sea Basin Program (ASBP) approved by the five heads of Central Asian States in 1994. The
main objectives of the program were to: (a) stabilize the environment; (b) rehabilitate the disaster zone
around the Sea; (c) improve the management of international waters; and (d) build the capacity of regional
institutions.
The WEMP project focused on two objectives: stabilizing the environment; and improving the
management of international waters. The project was also intended to contribute to the two other ASBP
objectives. These were however, to be pursued primarily by the Executive Committee of the International
Fund for Aral Sea (EC-IFAS) and national governments with help from UNDP and other donors.
The WEMP project objectives were ambitious, defined very broadly, and did not fully reflect the political
and economic realities of the countries participating. Project design did not fully anticipate the difficulties
involved in implementing a five-country effort through a regional body. The ambitious objectives were not
consistent with the modest financing provided. In addition, the project's aims were often confused with the
overall ASBP objectives, although the project was only one of several interventions under the Program. In
the WEMP project document, the ASBP target of reducing the water withdrawn for irrigation by 15
percent is also described as a project target.
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3.2 Revised Objective:
The project objectives were not formally revised. However, after the Mid-Term Review (MTR), revisions
were made to the balance between project components, and targets were clarified. The scope of the three
investment components, dam safety, water flow monitoring, and wetland restoration, under national level
projects was increased, since these were successful and provided useful demonstrations for scaling up at
national level. For Component A-1 (National and Regional Water and Salt Management), terms of
reference for strategy development were revised to include an analysis of conflicts between irrigation in the
summer and energy generation in winter. The strategy also provided the technical and analytical base for
dialogue on regional water management among the Central Asian Countries (CACs). This dialogue is
ongoing and will continue. The changes are described in Section 3.4, Revised Components.
3.3 Original Components:
The project at appraisal was packaged into one lead component (A) and five support components.
Component A-1: National and Regional Water and Salt Management (US$5.3 million, with grants of
US$4.3 million)
The component supported development of regional and national water management strategies. These
included development of scenarios of water demand and allocation at the regional level to help enable
political decision-makers to reach agreements for improved water, salt and broader environmental
management. At the national level, it supported development of water and salinity policies, strategies and
action plans to provide guidance for investments in the sector. Expected outputs included: an updated
Strategic Action Program for the next 5 to 10 years, an improved knowledge base on water and salinity
management, reduction in withdrawals of water for irrigation by 15%, participation by water users in
strategy development, and a gradual build-up of consensus and capability for reaching interstate
agreements.
Component A-2: Participation in Water Conservation (US$1 million with grants of US$810,000)
The component was to be implemented for a four year period (1999-2002). Its objective was to encourage
water users and providers to introduce low-cost water conservation measures by providing grants for pilot
water conservation projects.
Component B: Public Awareness (US$3.1 million, with grants of US$2.79 million)
Key features included developing a public awareness campaign in the five states, development of a
communications strategy on water saving, and creation of advisory committees.
Component C: Dam Safety and Reservoir Management (US$2.6 million with grants of US$1.4 million)
The component supported safety assessment of selected dams in the five countries. It also supported the
upgrading of the monitoring and warning systems at nine dams and training in dam safety monitoring and
assessment, preparation of detailed designs for priority rehabilitation measures, and development of a
program for Lake Sarez. It was also expected that following the training, staff would evaluate the safety of
other dams.
Component D: Trans-Boundary Water Flow Monitoring (US$3.5 million, with grants of US$2.22
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million)
The component supported purchase and installation of water flow and water quality monitoring equipment
at 25 trans-boundary water monitoring stations. It also supported training of Hydromet staff at these
stations, and improvements in data management and transmission.
Component E: Wetlands Restoration (US$3.9 million, with grants of US$3.43 million)
The component supported restoration of Lake Sudoche, a Delta Lake on the border of the Southern Aral
Sea, which had become desiccated due to poor water management. Restoration was expected to yield
substantial biodiversity benefits, and to provide opportunities for enhanced income for the local people
from fishing and livestock grazing. Component design included construction of infrastructure to raise the
level of the lake and improve quality of water in the lake, an access road, and monitoring of biological and
economic impacts.
Component F: Project Management Support (US$1.9 million, with grants of US$1.3 million)
A Project Management and Coordination Unit (PMCU) was to be established within EC-IFAS.
The WEMP sub-components were designed to support key programs defined in the ASBP (see Project
Document Vol. 2 Part IV, Table 1), such as component A (Program 1.1) for regional water resources
management strategies, Component C (Programs 1.2 and 1.3) for improving the dams' and reservoirs
sustainability and efficiency, Component D (Program 2) for improving hydro-meteorological services, and
Component E for restoring wetlands' deltas (Program 4). The ASBP cost was estimated at US$452
million (1996 prices) and the cost of each program was much higher than total WEMP funds. Thus, each
WEMP component was to focus on limited and pilot activities that could lead to scaling-up under
follow-up investments.
3.4 Revised Components:
During project implementation, various components were adjusted. The investment components (C, D and
E), for which implementation went well, were scaled up, while components A-2 and B, which faced
difficulties, were scaled down. Central Asian Country (CAC) Government contributions to project costs
were expected to be substantial at project appraisal and this led to a major implementation problem, namely
shortage of counterpart contributions in cash. Disbursement percentages in the grant agreements were set
at much lower levels than is common practice for projects in the region. For example, the percentage for
imported goods under Component C (for Dam Safety) was set at during appraisal, while the CACs were to
provide 55% of the cost of international contracts. Amendments were made to the grant agreements after
the mid-term review, which resulted in 100% financing of most components from grants (see section 5.4 for
details). Due to the many small contracts and complex financing arrangements with grants from different
donors, some implemented through co-financing and some through parallel financing, along with changing
disbursement and exchange rates, it has proven difficult to determine accurately the total cost of each
component. However, Bank estimates of the funds it disbursed from various grants are accurate and
reasonably represent the cost of each (see figures in the revised component descriptions, below).
A-1. National and Regional Water and Salt Management (US$4.9 million of grant funds including
funds for A-2)
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During project implementation, trade-offs between water use for energy and for irrigation emerged as a
major issue and caused tension between upstream countries (which use more water in winter to produce
energy) and downstream countries (which need the water in summer for irrigation) of the Syr Darya Basin.
To address this, the scope of the A-1 component was adjusted to include a detailed analysis of energy/water
problems and development of options to address them.
A-2. Participation in Water Conservation
The component was to be implemented from 1999-2002; however, the period was cut to two years due to
management and monitoring problems. As designed, it involved water use competitions among various
water users (such as private farms, cooperative farms and water agencies), with awards for winning
proposals to introduce low-cost water conservation measures. The component had very high overhead
costs--over 45% of the total was for design, management, supervision, for monitoring operations and
delivery of prizes to the winners. Technical assistance (TA) was provided from the EU Tacis-Funded
WARMAP-II (Water Resources Management and Agricultural Production) project for independent
monitoring of the competitions, for selection of winners and for certifications of the award of prizes.
WARMAP-II was closed in October 2000. An alternative arrangement for independent monitoring was not
established prior to the 2001 agriculture year and there were long delays in transferring prize moneys to the
winners of 1999 and 2000 competition. As a result of these problems, implementation of the component
was stopped
B. Public Awareness (US$1.4 million of grant funds)
Component implementation faced difficulties from the start. The component objectives and design were
extremely ambitious and did not consider the region's political realities. In retrospect, the aim of changing
water users' behavior through creating public awareness of the urgent need to conserve water (and reducing
water consumption by about 5% by the end of 2002) was unrealistic. The major causes of inefficient water
use were and are dilapidated infrastructure (requiring major investments to address) and poor government
policies. These are quite separate issues from inadequate public awareness. The component's design,
based on a modern public awareness campaign aimed at specific groups, was premature in a cultural
context where such campaigns are broadly understood as government propaganda, and where governments
still dominated agriculture and irrigation.
The component implementation arrangements were inappropriate. They relied excessively on the use of a
single foreign consulting firm to carry out the thematic research, identify target groups, design the strategy,
and train national public awareness teams. However, international consultants are not readily accepted in
Central Asia, and their use needs to be very carefully targeted. The consultancy assignment was one of the
first under the project, and both the PMCU and the consulting firm had little experience in implementing
such activities in Central Asia. The relationship between the two was difficult from the start, as both had
different expectations and little experience in resolving disputes or working as a team; therefore, in a short
time, it became extremely tense, severely hampering progress. Issues emerged about the competence and
performance of the consulting firm. At the same time, some were concerned that the prevailing conditions
under which the firm was working were not conducive to achieving the objectives.
A second design weakness was that separate national and international public awareness teams were
recruited at different times, and reported through parallel structures to the PMCU. Ideally, all teams
should have worked together, and the national teams should have worked directly with the international
consultants.
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By the mid-term review, little progress had been achieved in implementing the component. It was
restructured substantially, activities were scaled down and the unspent funds were allocated to other
components. The international consultants' contract was terminated in December 2000 with partial outputs
and partial payments. Expectations were lowered to more realistic levels (to fit the national teams'
capacities) and work plans were modified to convey fewer and simpler messages to fewer target groups in
each country. Implementation was completed in July 2002.
C. Dam Safety and Reservoir Management (US$2.2 million of donor financing)
The component was to be financed by GEF (US$500,000), EU-Tacis (US$550,000), Swedish International
Development Agency (SIDA) (US$350,000) and country contributions (US$1.17 million). The EU-Tacis
funding did not materialize, SIDA funding was increased to US$1.1 million (SEK9.84 million), and GEF
funding was increased to US$1.1 million. A study on probable maximum floods for the Syr Darya dams
and provision of bathymetric equipment to Kyrgyz Republic were added to the component. Component
activities laid the basis for additional support to dam safety in the Central Asian Countries through other
funding sources (e.g., Chardara Dam in Kazakhstan, and Sarez and Kayrakum in Tajikistan).
D. Trans-Boundary Water Monitoring (US$3 million)
The component's scope was increased. The project financed installation of an additional 12 monitoring
stations, besides the 25 planned at appraisal, using savings from other components.
E. Wetlands Restoration (US$3.4 million of grant funds)
Feasibility studies and cost estimates were not prepared adequately at appraisal stage for this component
aimed at construction of various works for rehabilitation of Lake Sudoche near the Aral Sea in Uzbekistan.
Thus, the detailed engineering design was prepared during project implementation period. After
preparation of detailed design, it became clear that the works included in the project would cost about three
times the funds allocated. Therefore, to reduce costs, several changes were made to the design and only the
essential works needed to rehabilitate the lake were included. These consisted of: (a) constructing a dike
on the Akkum ridge, a temporary road from Karadjar village to Akkum ridge, and an outlet regulator to
control water levels in the lake and flush when the lake is filled; (b) reconstructing a regulator at the
Ravshan canal and constructing a new regulator at the head of the Ustyurt collector to divert freshwater
from the canal to the lake; and (c) excavating a channel to divert water from the Left Bank Collector Drain.
The channel was extended to the lake, linking different parts of it for improving water circulation and
mixing to reduce the salinity levels.
The works excluded from the project were related to installing a pumping station to dispose of drainage
water from the Ravshan farm. Feasibility studies showed that the higher lake levels would not have any
adverse affect on the drainage of the Ravshan farm. Therefore, the pumping station and related works
comprising a collector drain, a road from Ravshan village to the pump station, and a power line for the
pump station, were excluded from the project.
F. Project Management Support (US$600,000 of grant funds)
The PMCU (based in Tashkent) was geographically separated from the EC-IFAS secretariat in 1999 when
leadership of IFAS moved to Turkmenistan (see section 5.1). A substantial part of the costs related to
managing other components, all included in Component F at appraisal, was charged to each component;
thus, the final cost of Component F is lower than initial estimates. Furthermore planned EU-Tacis funds of
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US$820,000, for project management were not available after the WARMAP II project closed in October
2000.
3.5 Quality at Entry:
Annex 8 describes the project's origins and preparation. The components grew out of experience from
preparation of the first phase of the Aral Sea Basin Program (ASBP), except for A-2 and B4 which were
added during appraisal with little prior preparation.
The preparation, appraisal and negotiation process was contentious, reflecting the differing perspectives of
EC-IFAS and the Bank (and, on occasion, GEF)--less on what to do but more on how to do it. EC-IFAS
wanted to control as much of the money as possible and perform the work with its own and
national/regional staff. The Bank and GEF staff argued for the use of international consultants. Bank and
GEF staff may also have pushed for a project design with too much focus on strategy development, and too
little on support for pilot physical investments. The result was a compromise: A-1 (the strategy
component) was carried out by a team of international and national consultants, with the latter's role
enlarged, and A-2 and B with their high local costs, were added. However, these disputes and the Bank's
focus on the detailed preparation of A-1 led to insufficient attention to the state of readiness of components
B, C, D and E. Furthermore, even the design of A1 was problematic. The Terms of Reference (TOR)
were complex and lengthy with too much emphasis on strategies, salt and water management, and interstate
water allocations, and too little on energy-irrigation water use conflicts, links between macro-economic
policies and water management, and national water policies and investment programs to address broader
water management issues. Despite emphasis on A-1 during preparation, it took about two years to agree
on the final TOR, due to the complex formulation.
Financing arrangements were also complex, a financing gap existed from the start, and an appropriate
system was not developed for financial management on a day-to-day basis. Furthermore, procurement
arrangements were complicated, and the proposed implementation schedule was unrealistic, particularly for
recruiting international consultants for A-1. Early implementation experience showed that the project was
not fully prepared at appraisal, and did not have full ownership of the participating countries. Quality at
entry was not satisfactory.
4. Achievement of Objective and Outputs
4.1 Outcome/achievement of objective:
The project's main objective was to support the ASBP implementation, which was achieved. Most of the
interventions constituting the ASBP of 1994 have now been completed.
Specifically:
(a)
Stabilization of the environment around the Aral Sea: The Syr Darya Northern Aral Sea
Control Program, part of the ASBP and implemented by the Kazakh Government with Bank financing, is
supporting restoration of the Northern Aral Sea and delta wetlands, and improved management of the lower
Syr Darya basin. Restoration of Lake Sudoche, supported by WEMP, has led to additional investments in
wetland restoration by the Uzbek Government in the Amu Darya delta and the water strategy supported
under component A1 has confirmed that with improved management there is sufficient water for restoration
of the delta ecosystems. The next priority is further investment in irrigation and drainage rehabilitation and
policy reform in Uzbekistan and Turkmenistan to permit large-scale implementation of this strategy.
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(b)
Rehabilitation of the disaster zone around the Sea: This objective overlaps the first. ASBP
supported investments in improved drinking water and sanitation for the population living in and around the
Aral Sea in Turkmenistan, Uzbekistan and Kazakhstan. There is more to be done, in both this area and in
restoration of vegetation to reduce wind erosion.
(c)
Improve the management of international waters: the strategic studies supported under WEMP
demonstrated that the principal water management problems of the basin are not due to management and
allocation tensions at regional level. They are due to deteriorating irrigation and drainage infrastructure
and poor water management at national level, principally within the two countries which comprise 75% of
water use within the basin, Uzbekistan and Turkmenistan. Furthermore, when there have been
transboundary difficulties, these have generally been at a bilateral or sub-basin level. The Central Asian
Countries' focus during the project period shifted from the Sea to the upper river basins and from regional
to national issues. In the Syr Darya basin, the energy-irrigation uses emerged as major issues and the
countries made several agreements to address them. In the Amu Darya basin, energy-irrigation issues were
less severe.
While bilateral disputes over water have continued between some of the basin states, they have not erupted
into actual conflicts. Cooperation among these states is comparable to that in other river basins in the
world. The IFAS/ICWC (International Fund for Aral Sea/Interstate Commission for Water Coordination)
mechanism and the project activities, which encouraged information sharing and common solutions, can
take some credit for this.
A bilateral agreement between Uzbekistan and Turkmenistan in 1996 clarified the sharing arrangements of
Amu Darya waters downstream of Kerki, and has mostly worked without major dispute, although water
shortages during the drought years have severely affected Karakalpakstan. The primary purpose of the
1996 agreement was to specify conditions for management of the irrigation and drainage facilities crossing
the territories of the two countries and to define mechanisms for resolving problems. Issues related to
major investments for rehabilitating the Karshi Pumping Cascade, crossing the two countries, remained
unresolved.
The project provided the technical and analytical bases for improving water resources management and
allocations among riparian states and sectors. Awareness of dam safety was introduced, which led to new
investments to improve overall water management in the basin. Better records of water flows will be
available for planning water resources, as well monitoring and management. Wetlands restoration provided
a practical model for addressing the environmental degradation problems around the Aral Sea. These
physical models of improved water management are being widely replicated in the basin. Thus in terms of
physical outcomes and their sustainability, this project may be rated satisfactory.
(d)
Build the capacity of regional institutions: The WEMP, and the ASBP more broadly, have not
been successful in achieving this objective. At the time of appraisal both EC-IFAS the regional body for
coordinating the ASBP, and the project management unit of the WEMP, were in Tashkent. Senior Uzbek
experts played a key role in both, and experts from other countries played a lesser role; but, EC-IFAS was
designed with a rotating presidency. In 1999 this was moved to Ashgabat while the PMU and most
expertise remained in Tashkent. EC-IFAS was greatly weakened. Furthermore, support to EC-IFAS by
UNDP and EU-TACIS ceased in 2000. In 2002 the presidency was moved to Dushanbe and under Tajik
leadership, EC-IFAS has revived its coordination and advocacy role. However, Uzbek and Turkmen
support has been limited, and the donor support to EC-IFAS is much more limited than in the late 90s.
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4.2 Outputs by components:
A-1.
The component was divided into several phases with the idea of systematically preparing national
and regional plans, and then finding ways to make priorities consistent. Startup of the A-1 component was
delayed by 12 months, mainly because of procurement disputes caused by the recipients' skeptical view of
the value of foreign consultants and desire to perform most of the work with their own staff. Also, the
TOR prepared at appraisal was highly complex and finalization proved contentious. Once procurement
issues were resolved, the PMCU did apply due diligence to ensure the work's progress and first drafts of
the reports were prepared more or less on time. The panel of experts (POE) appointed at the suggestion of
the Bank supervision team made valuable comments. The compromise solution for recruiting local
consultants into regional and national working groups reporting to the international consultanting team
seems to have worked quite well, although the need for clearing various documents by the five governments
slowed the effort. Stakeholders generally have a positive view of consultant's performance, one of the few
times this happened with an international consulting firm in Central Asia.
Several reports were prepared under the A-1 studies: (a) two regional reports; (b) five national reports (one
for each country); (c) a joint regional and national report; (d) a report on water losses and development
strategies; and (e) a report on the Action Plan. In addition, a database and a set of models were developed
to improve analytical capacity in the region.
The A-1 studies provided a few key messages that will be of great value in future water resource
management programs in the region. Specifically, the studies concluded that:
(a)
With a reasonable standard of management, water resources in the Aral Sea Basin are adequate to
meet current irrigation needs and provide an appropriate volume for environmental purposes in the delta
areas.
(b)
Irrigation is the main user of water (more than 90%) and losses are extremely high. About 70% of
water diverted from the rivers is lost and only 30% is beneficially used to grow crops. The low efficiency
is due to the deteriorated irrigation infrastructure, inadequate drainage, water-logging and soil salinity
requiring large water applications for leaching. Furthermore, farmers lack incentives to improve
production, and water use, especially in Uzbekistan and Turkmenistan, because of continued public sector
domination of the agriculture sector.
(c)
Shallow water tables and the resulting salinization and water logging are estimated to cost the
national economies about US$1.7 billion annually or about 30% of the economic value of crop production
in the Aral Sea Basin.
(d)
Restoration of the Aral Sea to its 1960 levels is not economically or socially feasible, given the fact
that 22 million people depend on irrigated agriculture for their livelihood. However, in addition to the Delta
areas and the Northern Aral Sea, with water conservation and rehabilitation measures, restoration of the
Western Aral Sea is a long term possibility.
The A-1 studies also proposed ways to resolve the energy-irrigation issues, particularly in the Syr Darya
basin. These helped promote dialogue among the riparian states. Furthermore, the studies showed that
benefits from improving water use at the national level are extremely high, even under a scenario of
sub-optimal water allocations among the riparian states. This is primarily because water losses in the
irrigated areas within countries are much higher than those resulting from inefficiencies in water allocations
among countries. Thus, the short to medium-term focus should be on national projects that can improve
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water use efficiency, while pursing inter-country water allocations. However, discussions for improving
inter-country allocations take decades, as evidenced in other river basins around the world.
EC-IFAS, with assistance from the UNDP (and US$250,000 provided by the US Government under the
Trans-Boundary River Basin Initiative), is holding discussions with the Central Asian Countries on the
results of the strategy. Several workshops and seminars have been arranged and consultations are taking
place between key stakeholders to move the dialogue on improving national water management and
inter-country water allocations forward. The discussions are also strengthening IFAS's role in facilitating
the regional dialogue.
A-2.
The sub-component was curtailed two years early, ostensibly because of the PMCU's
unwillingness to engage a suitable monitoring consultant (after EU support was terminated) but also
because of concerns about loose financial management, including major delays in paying award money.
However, the sub-component illustrated that farmers will conserve water if given a financial incentive and
showed the effectiveness of a number of low-cost techniques for doing so.
B.
This component was based on the questionable premise that public awareness alone could affect
water use. A large and diverse media campaign was mounted and surveys showed that policy makers,
farmers, students and other groups were increasingly aware of wasted water, the Aral Sea problem and the
ASBP. No attempt was made to measure any impact on water use, specifically the project component's
5% target, (out of the overall 15% target), and the component's effect is doubtful. However, several
working papers were prepared that may be useful in the future in improving irrigation planning.
C.
Support for the safety assessment of 10 dams helped to create awareness among the governments
about the urgency of problems related to dam infrastructure, and led to several follow-up investments.
With the support of pilot projects, the safety of at least nine dams has been improved. Several
professionals have been trained in dam safety assessment and are serving on the panels of experts for dam
safety. Initially, governments gave only limited support for the component, since decision makers across
the basin were not aware of the dangers posed by the unsafe dams. However, by the end of the project the
activity enjoyed the countries' full support. Kazakhstan, Kyrgyzstan and Tajikistan have now developed
their own plans for rehabilitating dams and introduced modern technologies to monitor dam safety.
Further, work under the component directly led to a separate IDA and Swiss-financed project for Lake
Sarez in Tajikistan. In Kazakhstan, rehabilitation of Chardara Dam was included in the Syr Darya Control
and Northern Aral Sea (SYNAS) project and Kayrakum Dam was included in the proposed Tajikistan
Ferghana Valley Water Management Project. Priority works for Tuyamayun Dam in Uzbekistan were
included in the Uzbekistan Rural Water Supply and Sanitation Project. Rehabilitation of these dams is also
helping to resolve the water and energy conflicts between upstream and downstream users by increasing
re-regulating capacity below the Naryn Cascade on the Syr Darya and increasing the supply of water to
generate energy in winter and irrigate crops in summer.
D.
About 25 trans-boundary water-monitoring stations were installed. Equipment was procured under
the project for an additional 12 stations; it has been delivered and stored in Tashkent and will be
transported to the four countries and installed. Once all remaining equipment is installed, the component
will have exceeded its physical targets. Questions remain about the cost-effectiveness of some of the
equipment purchased. Still, data from the completed stations is already being used by the basin water
management organizations (BVOs) and national water agencies to improve the timing and scheduling of
irrigation releases.
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E.
The restoration of Lake Sudoche (a 40,000 ha. delta wetland that lost its regular source of
replenishment) appears to have fully met its biodiversity and social/economic targets. Comprehensive
ecological and socio-economic monitoring was well managed. The wetland attracts various birds, some of
which are classified as endangered species from the International Red Book. The littoral area and area
regularly flooded are highly productive (5 to 10 times higher than the dry land) and used as pasture for
livestock. Further, the local population sees the lake as a main source of fish, which meet about 40% of the
local population's protein requirements. The component was successful in restoring biodiversity, managing
natural resources, and protecting the contiguous area from dust and salt storms. Economic benefits were
also gained as the local population is able to use the restored area for fishing, hunting and grazing.
The component provided a model for improving the environment and biodiversity in the deltas by mixing
drainage water with high salinity content with fresh water (when rivers have a surplus); further monitoring
of the lake over several years is necessary to fully assess the project's impact. The Government of
Uzbekistan decided to continue the program of wetland restoration in the Amu Darya delta and has three
new projects underway (others are also being planned), reportedly following Lake Sudoche standards.
Restoring more wetlands in the Amu Darya delta is included in the Uzbekistan Drainage, Irrigation and
Wetlands Project. In Kazakhstan, restoration of the Northern Aral Sea and Syr Darya delta lakes is now
proceeding under the SYNAS Project.
F.
The PMCU became competent in project management, although some key staff were ineffective.
Management of procurement was generally satisfactory, once policy disputes with the Bank were resolved.
Project financial management was extremely cumbersome, rarely timely and not transparent (see section
5.4).
4.3 Net Present Value/Economic rate of return:
As a GEF project, investments were not subject to a conventional ERR analysis. Component E was an
exception, where a 12% rate of return was forecast, based on benefits from increased fish, reed and
livestock production from enhanced productivity of grazing land in the vicinity of the lake. Monitoring
reports and information from the field indicate that benefits from the lake are likely to be higher than the
appraisal estimates. Full benefits from the lake in terms of biodiversity, fish and muskrat, livestock and
reed production will be realized in 2005 with continued flushing and the mixing of water (to reduce salinity
levels in all parts of the lakes).
The qualitative benefits expected for other components were largely achieved. Decision makers are using
data from the trans-boundary stations to manage water resources in the region. The dam safety component
resulted in additional investments that will lead to improving water management in both river basins. And
the water strategy is increasingly being used by the five countries. Benefits are described in more detail in
Annex 3.
4.4 Financial rate of return:
Not applicable, as this is not a revenue generating project.
4.5 Institutional development impact:
PMCU did a marginally satisfactory job overall of managing the project (though perhaps not in the last two
years). The physical separation of PMCU from the EC-IFAS secretariat meant that the larger objective of
strengthening EC-IFAS was not achieved (see section 5.1 below). In fact, EC-IFAS may have been weaker
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at the end of the project than at the beginning. During the long preparation phase of ASBP, prior to
WEMP, substantial donor assistance (about US$32 million) was provided to the EC-IFAS, mainly in the
form of technical assistance for various studies. At that time, PMCU and EC-IFAS were almost "one and
the same," due to the close link between EC-IFAS and PMCU, and the location of EC-IFAS and PMCU in
Tashkent. Further, various personnel were carrying out dual functions. After the start-up of WEMP, when
EC-IFAS was separated from PMCU and moved to Ashgabat, all resources remained with the PMCU.
Another issue was that the PMCU was both helped and hindered by a director with a strong personality,
who could make things happen, but could also alienate people, especially those outside Uzbekistan. His
attitude towards the Bank and the EC-IFAS chairman was often confrontational. Within the PMCU, some
ineffective component managers (one from each country, picked partly on political grounds) were balanced
by competent regional experts on international consultant's team. The project had several components
spread in five countries with meager resources; this inevitably weakened the depth of impact in each
country.
PMCU had a large number of local contracted staff as well as directors for each component and several
national coordinators. Civil servants of the line ministries, who are very poorly paid in most Central Asian
Countries, did not play a major role and were insufficiently involved in or supported by the project. Most
staff left the PMCU after project completion. Some who were trained under WEMP, now work on other
development projects in the region. Thus, the project had some capacity-building effects.
Many project activities were implemented at the national level. But, systematic activities designed to
strengthen national institutions were not included in the project, and this was a design weakness. While the
Ministries of Water played some role in the project implementation because their staff were involved in
project activities, though under the leadership of PMCU and its Component Directors, the Ministries of
Environment and Energy had a much weaker role. Similarly, the strategic work of water resources
planning/investments lacked involvement of the core economics and financial ministries. EC-IFAS has
tried to address this since the secretariat moved to Dushanbe in early 2002. Generally, capacity-building
without substantial accompanying investment programs often has limited impact. However, some national
institutions were strengthened, due to involvement of their staff in various components, such as preparation
of national and regional plans, installation of water- measuring stations, assessments of dam safety and
rehabilitation of wetlands.
The project was also intended to strengthen EC-IFAS, but this was to be achieved through a UNDP project
(with US$1 million from the Dutch government). The UNDP project became inactive and was later
cancelled after EC-IFAS moved to Ashgabat (UNDP staff working on the project were reluctant to move
there and establish another office). However, the WEMP succeeded in providing assistance (about
US$100,000) to establish the EC-IFAS in Dushanbe. Also, with project assistance, EC-IFAS was able to
arrange several donor coordination meetings, workshops and seminars. With help from USAID, it
prepared a follow up to the ASBP involving discussions between the Central Asian Countries and potential
donors. With continued assistance, EC-IFAS it may be able to realize its goal, which is to help coordinate
water use and promote international support for improved water management in the five countries.
5. Major Factors Affecting Implementation and Outcome
5.1 Factors outside the control of government or implementing agency:
The EC-IFAS is defined as the "government" and the PMCU as the "implementing agency." While
EC-IFAS was created in 1994 with a broad mandate and impressive powers (on paper), it was relatively
weak because the five countries, despite declarations from their heads of state, were unwilling to
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compromise their sovereignty by delegating decision-making powers to IFAS or its secretariat, EC-IFAS.
To enhance ownership, a decision was made to rotate the chairmanship of IFAS from state to state every
two years, which appeared judicious at the time. However, this course was coupled with the physical
transfer of EC-IFAS offices from state to state, which proved unworkable and damaged its effectiveness.
Further, the separation of the PMCU from the EC-IFAS when it moved to Asghabat in 1999 made it
impossible for the project to strengthen EC-IFAS (which was an implicit objective of the WEMP).
The SARS outbreak, which delayed a visit by Chinese experts to supervise the installation of equipment
and staff training under Component C, and delayed completion of that activity, was also outside EC-IFAS
control.
Cost overruns on the original design of Component E were the result of an inadequate design at appraisal
and the lack of any comparable cost data, possibly coupled with inadequate oversight by the Bank, also at
appraisal. The design was revised during implementation without compromising the functioning of the
wetlands/lakes.
5.2 Factors generally subject to government control:
Three periods should be distinguished. First, when PMCU and EC-IFAS was chaired by Uzbekistan during
the project preparation phase; second, when the EC-IFAS was separated from PMCU and moved to
Turkmenistan just after the project start-up, and when EC-IFAS moved to Dushanbe.
During 1998-1999 when Uzbekistan chaired the EC-IFAS, the PMCU was fully integrated with EC-IFAS
and the project preparation was undertaken during this time. The EC-IFAS was supported by donors
providing large amounts of Technical Assistance. During 1999-2002, EC-IFAS moved to Ashgabat and
became largely ineffective. Turkmenistan appear to have little interest and was not in a strong position to
promote regional cooperation and the only time it called a meeting of the IFAS was to decide where to
rotate the chairmanship after its term was up, with about one year delay. During this period, all momentum
and capacity built during the preparation phase of ASBP for addressing regional issues in a cooperative
way was lost. In 2002 when EC-IFAS moved to Dushanbe, and has tried to reassert control over the
project. This created a conflict between EC-IFAS and PMCU that brought costly delays to Components
A-1, C and D. The conflict resulted in the EC-IFAS being unable to ask the Bank to extend the closing
date or to complete the outstanding work since EC-IFAS depended on the PMCU for project
implementation. The PMCU remained in Tashkent for the duration of the project.
The Bank agreed at project start-up to en-bloc staffing of the PMCU, without a "no objection" to individual
project personnel (though it appears a "no objection" letter to key project staff was sent at the start of the
project) It therefore, had little leverage when faced with inadequate performances. The appointment of the
former EC-IFAS chairman as director/leader of the PMCU immediately after he completed the
chairmanship rotation, and had signed the Grant Agreements with the Bank, led to conflict of interest
issues, and did not allow EC-IFAS the independence to assert itself to improve project management or
make a multi-country project concept a reality.
5.3 Factors generally subject to implementing agency control:
Procurement delays, especially on the key component (A-1), were partly due to the inexperience of PMCU
but mainly the result of policy differences with the Bank that spilled over from the appraisal/ negotiations
process. However, once these were resolved, PMCU was reasonably business-like in steering
implementation.
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Concerns from the other countries regarding Uzbek domination of the PMCU were not adequately
addressed. The curtailment of Component A-2 after two years because of the lack of an independent
consultant to ensure transparency (and Bank concerns about the potential for corruption), might have been
avoided if PMCU had a more flexible attitude.
Financial management and auditing remained a problem throughout the project period (see Section 5.4
below). The ability to monitor the project's progress and financial disbursements on a day-to-day basis
was never established. Reports were infrequent and inadequate, making it difficult to update work plans
and fully utilize the grant funds.
5.4 Costs and financing:
Annex 2 provides details on costs and financing by components and expenditure categories at the project
appraisal and completion. Estimation of total project/component costs at completion is extremely
challenging for several reasons, including inadequate information about CACs contributions, changing
disbursement percentages for various expenditure categories, and changes in exchange rates during the
project implementation. As mentioned earlier, the amounts disbursed from various grants are accurate and
have been used to estimate the project/component costs.
The total project cost at the appraisal stage was estimated at US$21.20 million with US$4.96 million to be
financed by the CACs and US$16.24 million by the donors (Annex 2 Table 1). The Project Documents
indicated that an additional US$0.9 million of CACs contribution would be financed by the donors. Thus
the net contribution expected from the CACs was US$4.06 million. In addition, the countries were to
provide in kind contributions such as civil works for Component C and D for installation of dams
monitoring and water measuring equipment respectively.
The donors were to fund US$17.14 million also covering US$0.9 million from CACs contribution. At the
project start, total commitments from the donors were US$16.24 million (GEF Grant US$12.22 million
equivalent, US$2.3 million equivalent by the Dutch Government, US$1.37 million equivalent by
EU-TACIS from in kind contributions WARMAP II Project, and US$0.35 by SIDA) leaving a financing
gap of US$0.9 million. The donor financing shown in the procurement tables was US$15.4 million,
including GEF and Dutch financing (Annex 2). Soon after the project start, the Dutch Government
provided another US$0.5 million raising the total Donor commitment to US$16.74 or US$15.4 million net
of the EU-TACIS in-kind contribution. It is not clear how much funding was actually provided by
EU-TACIS as it was in the form of TA from the WARMAP II project that ended in October 2000. During
project implementation, additional funds were provided by the Dutch Government (US$1.0 million) for
completing the Lake Sudoche rehabilitation, and the Swiss Development Corporation (SDC) provided
US$1.1 million equivalent.
The total disbursements at the project closing from all Grants were US$15.5 million equivalent (Annex 2,
Table 2) compared to original commitment of US$15.4 million (excluding EU-Tacis funding).
Disbursements from the GEF trust fund were US$11.3 million, Dutch trust funds US$3.1 million and
SIDA TF US$1.1 million (a significant increase from original commitment). The total undisbursed funds
from all grants were US$1.2 million equivalent (GEF TF US$0.7 M, Dutch TF US$0.5 million).
Major Financial Management Issues.
Project financing and financial management remained the biggest issue and cause of tension between the
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EC-IFAS, PMCU and the Bank. The main problems were:
(i)
financing was not fully secured from the beginning and EC-IFAS had no financial resources of its
own to make up for any deficit in donor financing as Governments normally do under a Bank project. In
addition to uncertain financing from CACs, there was a financing gap of about US$2.27 million
(considering uncertain and difficult financing arrangements from EU-Tacis) that was a cause of concern
and a stumbling block at the project start-up;
(ii)
CACs did not provide cash contributions for the project, although the disbursement percentages for
various categories were set up assuming cash contribution from CACs. This created problems in payments
for various contracts. This was particularly a problem in cases where the disbursement percentage was set
very low (45% for component C and F) and where goods were procured under ICB contracts. While the
countries carried out civil works for installation of equipment under component C and D, there is no
credible evidence of significant cash contribution by any of the five countries;
(iii)
the financial management system and disbursement process for the project was very complex
because of several special accounts, with each payment being funded from more than one Trust Fund.
Transactions were extremely difficult to trace. There were three special accounts under the project -- for
GEF, the Dutch and the SIDA Trust Fund. In addition, there was a CAC US$ Special Account, a US$
Current Account and a local currency account. Often the US$ denominated payments to suppliers
originated from the CAC US$ Special Account and were routed through the US$ current account. The
funds were then transferred from Grant TF Special Accounts according to their shares to the CAC US$
Special Account. Sometimes payments were made from one TF Special Account and the funds were then
transferred from other TFs to charge each TF according to the eligible shares. The better approach would
have been to disburse the TF sequentially, one after another, at the same disbursement rates. After
mid-term, this approach was used for the new Dutch TF-50090 under which the Component E costs were
disbursed 100% (instead of sharing between GEF and with other Dutch Trust funds);
(iv)
the PMCU was responsible for other Government of Uzbekistan related ASBP activities not
included under the project. The financial records and transactions of WEMP were often mixed with these
non-WEMP related activities;
(v)
during 1999, the funds from the SA of the GEF, Dutch and Swedish Special Accounts were placed
in separate deposit accounts at the National Bank of Uzbekistan (NBU). Subsequently, the PMCU was
asked to use interest received from the funds placed on deposit at the NBU as EC-IFAS contributions;
(vi)
added complications arose due to restrictive foreign exchange transactions in Uzbekistan where the
PMCU was based and through which all funding was passed; and
(vii)
the project audits were often late and queries from the Bank about the audit issues rarely received a
satisfactory reply.
There were great difficulties with financial management under this project, partly because of the original
design, with low disbursement rates, a financing gap, a large number of special accounts and activities
funded from many TFs, and partly because of financial management by PMCU during the project
implementation. Expenditure statements were not kept current, making day-to-day financial management
as well as future planning extremely difficult. During all supervision missions, the financing issues
remained a main focus of discussion. Disputes over financial issues often distracted time and energy from
focusing on technical and institutional outcomes.
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After the MTR, efforts were made to streamline financial management. Several amendments were made to
increase disbursement percentages. Some Special Accounts were closed, and only the GEF Special
Account was used for transferring TF funds. Payments for several large contracts were made directly by
the Bank and the balances of the Special Accounts were reduced. However, difficulties with financial
management remained a problem until project closing, and caused tension with the implementing agency.
They contributed to the underachievement of some of the project targets, and played a large part in the
decision of the task team to rate the overall achievement of the project unsatisfactory.
6. Sustainability
6.1 Rationale for sustainability rating:
Overall, sustainability of the activities supported by WEMP appears likely, although a number of risks
remain. Works constructed under components C, D and E have been transferred to the national
governments and their sustainability is likely. The results of A1 are being disseminated and despite all the
difficulties, overall cooperation among countries in handling regional water issues is better than in many
other river basins in the world. Particularly on the Syr Darya Basin there have been a series of agreements
between the riparian states since 1995 to address the energy-irrigation operational conflicts. The Prime
Ministers and even the Presidents of the countries meet to resolve urgent issues at short notice.
Furthermore, the studies supported under WEMP illustrate that regional water management can best be
addressed by improving water management at national level, through investments and improved policies.
Notes on specific components follow:
A-1. Water and Salt Management. The analytical and strategic work has provided a solid framework
for improving water management with regard to regional cooperation. The report recommended that a
working arrangement is needed to ensure the deltas (including the Sudoche wetland restored under this
project) receive guarantees of water for dry years. The component analysis has modestly contributed to
solving the Naryn Cascade issue, which is being discussed by bilateral international financial institutions in
dialogue with the Syr Darya Basin states and in-country assistance strategies. Databases and models have
been shared and should have continuing value.
A-2.
Participation in Water Conservation. Sustainability is questionable, and depends on whether
data on potential savings in water use with low-cost investments and financial incentives will be
incorporated in national programs with donor support.
B.
Public Awareness. Sustainability is questionable, if the audiovisual materials generated under this
component can be well archived and made available to future users (for example, through an IFAS
information system), they could have continuing value for future programs.
C.
Dam Safety. Sustainability is likely. The greatly heightened awareness of the risks of dam failure
generated by the project make it likely that states will find the modest funds needed to operate and maintain
the new equipment. This component has already led to additional investments in dam safety and improved
operation of dams in all CACs. (Lake Sarez, Chardara, Kayrakum).
D.
Trans-Boundary Water Monitoring. Sustainability is likely. Further assistance is being
provided by SDC and USAID to improve water monitoring and creating regional centers in Dushanbe and
Almaty, with links to the international hydromet agencies. Pressure from institutions that use data, such as
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the Ministry of Irrigation and Water Resources and the World Meteorological Organization (WMO), will
most likely ensure that key transboundary stations are properly operated and maintained, even in the poorer
countries, where hydromet funding continues to be a critical problem.
E.
Wetlands Restoration. Overall, the restored wetlands should be sustainable. Uzbekistan has
decided to expand the restoration program with its own resources, and it is creating a permanent body to
manage the restored group of wetlands. Because the local population of Karakalpakstan benefits greatly
from the restored wetlands (hunting and fishing are their main source of income), the Government is likely
to ensure that water supplies to the lakes will be maintained. The drainage water supply is more or less
guaranteed for Lake Sudoch due to the farmers' irrigation activities; however water quality in the Lake will
depend on fresh water flows from the Amu Darya River. This can be achieved with the annual, expected
average flow of fresh water, which will also enhance the Lake's biodiversity.
F.
Institutional Development. Sustainability is questionable. As mentioned above, the PMCU's role
ended at project completion/closing. However, EC-IFAS, which will remain intact, is a regional body
established by the countries, which have a strong motivation to maintain it. The IFAS branches in each
country receive substantial financial contributions from their governments for implementing national
projects. The issue is financing for the EC-IFAS regional office, for which a mechanism must be found
where national contributions can help sustain it.
The decision by EC-IFAS to manage further dissemination of A-1 studies, with UNDP help, should provide
it with an opportunity to develop the technical capacity it needs. However, maintaining the agency will also
depend critically on a permanent funding mechanism from the five states.
6.2 Transition arrangement to regular operations:
The process of defining EC-IFAS' "regular" operations, through the discussion of an ASBP-II, is ongoing,
and includes lessons from WEMP. It is recognized that several WEMP components are likely to continue
as national, rather than regional, programs (for example, C, D and E), and that ASBP II will consist mainly
of investments and policy changes at the national levels.
7. Bank and Borrower Performance
Bank
7.1 Lending:
As described earlier, the project design was a compromise, and it might be argued that the Bank went too
far in accommodating the views of EC-IFAS, especially with respect to including Components A-2 and B,
overall project management arrangements, and the high number of PMCU staff. However, the alternative
may have been no project at all. The Bank's later decisions to curtail these two components were strongly
resisted and resented by the PMCU. The elaborate design for Component A-1 was effective in bridging the
Bank and PMCU objectives, although its implementation proved quite challenging.
The 1996 ASBP Review, largely produced by the Bank, made various recommendations, including (a)
merging two inter-state organizations, the Interstate Council of the Aral Sea (ICAS) and the International
Fund of the Aral Sea into one IFAS; and (b) transferring responsibility for ASBP/WEMP management
from headquarters to the Resident Mission in Tashkent (RMT), effective July 1997. The Bank did not
object strongly or use its full leverage when EC-IFAS was effectively split in two (EC Secretariat and
PMCU) in April 1999, with near fatal consequences for its capacity. Also, the Bank from Headquarters
did little to support the Country Office Resident Mission in Tashkent (RMT) in handling a complex and
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politically difficult project. Overall lending is rated unsatisfactory.
7.2 Supervision:
Bank Management in the early years of implementation did not sufficiently recognize the strategic
importance of the project, perhaps due to the 1997 reorganization and broad-sweeping management
changes in Washington.
In late 2000, supervision responsibility was shifted back to Headquarters. The Country Office staff
continued to participate in technical, procurement and financial management aspects, in overall project
management, and importantly, in facilitating collaboration between countries on key issues.
The project was regularly supervised, twice a year, with a Mid-Term Review in July 2001. Supervision
budgets were adequate and missions were frequently large, generally with appropriate skills. However, no
specialist in hydrologic equipment and communications was used either at appraisal or supervision and
visits by financial management specialists were infrequent in the early years, with consequences for project
quality.
The project had four task managers between preparation and completion. However, this was not as
problematic as it might seem at first glance, since there was good overlap between them and close support,
including participation in the appraisal and supervision missions, by sector and country managers.
Early supervision was concerned mainly with resolving procurement disputes, which the Bank handled with
patience and persistence. The minor compromises that were made (for example, in selecting local
consultants for A-1) were appropriate. Supervision teams were diligent in resolving issues, such as the
successful request to the Netherlands to provide an additional US$1 million to allow completion of
Component E, and the 6-month extension to Phase VI, to allow additional analysis of key questions.
As a result of the Mid-Term Review, more emphasis was given under A1 to water-energy trade-offs and
the appointment of the independent panel of experts (POE), as well as curtailing Components A-2, and B.
It also led to greater focus on adequately completing the three physical components--C, D and E. An
earlier Bank recommendation to replace the national project coordinators for the Kyrgyz Republic and
Tajikistan with officials from the energy sector was not adopted, although deputy team leaders from energy
were added. Although it was clear at MTR that the project objective of reducing water use by 15% was
unrealistic, this was not formally revised. Such a revision would have required lengthy discussion with the
PMCU and member countries. The project supervision team judged that it was better to focus on
addressing implementation issues and restructuring poorly performed components, rather than spend time
and political capital on such a debate. Despite the resulting "disconnect", their judgement was the right
one.
The project was rated B on environmental safeguards (no social safeguard issues were identified) at
appraisal, mainly because of construction issues related to Component E and their potential impact on
salinity and dissolved oxygen. These were to be mitigated by clauses in construction contracts and the
monitoring system, respectively. Environmental/safeguard management performance was rated
satisfactory by PSRs throughout project implementation. The ICR mission saw no evidence of
environmental problems at Lake Sudoche (and much environmental benefit).
7.3 Overall Bank performance:
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Although the picture is somewhat mixed, overall Bank performance can be considered moderately
satisfactory, in particular given the difficult operating environment in Central Asia in the mid 1990s. The
"unsatisfactory" rating has been given in this ICR for Bank performance since no "moderartely
satifactory" category exists in the PDS format.
Borrower
7.4 Preparation:
Since EC-IFAS did not accept the Bank's view that the modest results of the preparation phase were due to
national working groups being supplemented with only short-term international specialists, it greatly
resisted the Bank's preference for giving overall responsibility for A-1 implementation to an international
consulting firm. This greatly increased the time and cost of the preparation/appraisal process. The agency
also felt that salt management was of secondary importance, whereas the Bank insisted it be given equal
importance to water quantity issues. EC-IFAS's priority for A-2 and B has already been discussed.
Preparation documentation, including cost estimates, on all components except possibly A-1 was thin, at
best. As for the CACs, they had limited involvement in project preparation activities; they were only
consulted by EC-IFAS on a limited basis on project design and preparation activities. Overall, recipient
performance during preparation is rated unsatisfactory.
7.5 Government implementation performance:
Before 1999, when EC-IFAS was located in Tashkent, it was synonymous with PMCU (see below). From
1999-2002, EC-IFAS lost all its effectiveness and thus is rated highly unsatisfactory. From 2002 to the
present, EC-IFAS has tried to re-build its capacity and rein in the autonomous PMCU. However, this did
not resolve project issues, but rather created a stalemate, especially in Phase VII of Components A-1, and
for Component D there were long delays in transport of equipment to the five countries. The overal rating
is unsatisfactory --though future prospects are more promising.
The Panel of Experts for A-1 met twice (in June 2001 and January 2002). Its second report noted a
concern that its earlier recommendations were not fully considered. Further, it recommended greater
attention to: (a) consistency between national and regional strategies, water use and the environment in the
deltas; (b) clear rules for water management; (c) allocation of O&M costs; (d) the role of BVOs; (e) a
River Basin Authority; (f) salt balances; and (g) a 12-month extension of A-1 studies. Also, there is little
evidence that EC-IFAS vigorously followed-up on the issues raised. Predictably, PMCU and the network
of Soviet-era water specialists argued for the status quo and resisted any suggestions for radical change.
Compared to the preparation phase of the project, CACs had a rather active role in implementation of some
components. In particular, they have constructed facilities for installation of dams monitoring equipment
(under component C) and water measuring equipment (under component D) from their own funds. They
were also involved in carrying out dam safety assessments and restoration of wetlands. Their participation
in the A1 studies was in coordinating data collection activities, analysis and discussions primarily through
the National Teams for A1 component and National Coordinators drawn from various Government
agencies and reporting to the A1 Consultants and PMCU. The CACs should have had more involvement in
developing the strategy and national and regional plans instead of leaving these tasks to national teams and
coordinators. The CACs provided funds for project activities that were implemented by their own
governments on their territory, for example, construction works for hydromet stations. However, they did
not provide cash contributions for the activities managed at the regional level by PMCU, except Uzbekistan
that contributed some since PMCU was located in Tashkent.
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7.6 Implementing Agency:
The PMCU's performance throughout the project is rated unsatisfactory. Although it did develop
competence in daily project management functions, such as procurement and accounting, it continued with
the disputes raised at appraisal, it did not handle financial management well, and in the last year of the
project, it held Components A-1 and D hostage in its ongoing battles with the Bank and EC-IFAS. As a
result, project accounts did not offer timely information on expected project costs, trained staff were
demoralized and left and the Bank and POE technical advice on A-1 issues was ignored.
7.7 Overall Borrower performance:
Overall recipient performance is rated unsatisfactory.
8. Lessons Learned
The most significant lessons are listed below:
1.
Developing a detailed operational strategy among five countries is a daunting effort under any
circumstances, but even more so when there are assymetrics in power, wealth and political systems between
countries. Thus, spending substantial resources to develop a detailed strategy may be wasteful. Also
large-scale TA projects or stand-alone components with broad objectives like A-1 studies are difficult to
implement due to often divergent opinions about how they should be undertaken.
2.
Multi-donor projects are extremely difficult to implement. This is a lesson in particular for GEF
operations, where GEF policy places great emphasis on the need for substantial co-financing.
3.
Inadequate preparation of some components before appraisal adds greatly to the burden of the
project agency and Bank supervision staff during implementation.
4.
GEF support can have a catalytic role, as evidenced by the impressive number of parallel and
spin-off projects generated, at least partly from WEMP. Among these was a decision by Uzbekistan to
expand wetlands restoration with its own funds, investments under the Bank-supported Uzbekistan
Drainage, Irrigation and Wetlands Improvement project, and the Kazakhstan SYNAS projects.
5.
PMCU was given responsibility for implementing activities which would have more appropriately
been implemented by country-level line agencies. The project activities and components, such as
component C, D and E could have been implemented by the countries' Ministries of
Agriculture/Environment or National Hydromet. This would have enhanced country ownership, and
resulted in strengthening national institutions, improving sustainability.
6.
Regarding strategic analysis, allocating substantial resources to ambitious regional studies may not
be a good use of resources. A better alternative is likely to be to agreed on broad principles, and then to
concentrate on more narrowly focused follow-up work in areas like energy-irrigation trade-offs and the
impact of glacier melting, and above all, in improved irrigation and drainage management at the country
level. It is clear that poor national water management and degraded infrastructure cause many of the
environmental problems in the Aral Sea Basin. WEMP activities in dam safety, trans-boundary monitoring
and wetlands restoration will be best followed up through national programs, now that the project has put
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the spotlight on these issues and they are seen as priorities on the countries' agendas.
7.
The project validated an underlying assumption of the ASBP: While restoring the Aral Sea to its
former size and productivity will not be possible, it is feasible to recreate much of the lost value by
restoring wetlands in the deltas of the Amu and Syr Darya Rivers. This was determined by the successful
restoration of Lake Sudoche under Component E and by the analyses of Component A-1, which conclude
that additional water of suitable quality can be made available to the deltas by improving water
management throughout the basin. These lessons have been incorporated in the Bank's Syr Darya and
Northern Aral Sea Project in Kazakhstan and the Uzbekistan Drainage, Irrigation and Wetlands
Improvement Project.
8.
Regional projects are generally complex and difficult to implement. Also, providing counterpart
funds for regional projects is even more difficult than for the national projects. This is especially
true in Central Asia where much of the existing infrastructure now crosses borders and the governments
are cash strapped. However, programs conceptualized at the regional level can be successfully
implemented when specific activities are defined and implemented nationally. This was confirmed by
WEMP experience with the relatively trouble-free implementation of Components C, D and E, and national
projects such as the Syr Darya Northern Aral Sea Control project in Kazakhstan, and the Water Supply
and Sanitation projects in Kazakhstan and Uzbekistan. A better approach would be to design programs for
the regional level but divide projects and activities into efforts at the national level; this will make them
consistent with regional goals and coordination, but place implementation under national governments.
This lesson is reflected in the design of the proposed Ferghana Valley Water Resources Management
Program and should be a principle of ASBP II.
9.
Instead of the whole Aral Sea Basin, a river basin approach which deals with the Syr Darya and
Amu Darya basins separately is increasingly being used in dealing with regional water management issues.
The Aral Sea itself has been separated into two parts. The Northern Aral Sea and delta depend upon the
flows of Syr Darya, and the Large Aral Sea and delta depend on the Amu Darya waters. The number of
countries involved in each basin is reduced to about three, making discussions and cooperation more
practical. Also, the issues of water management in Syr Darya Basin are more severe and the
implementation of solutions more advanced than the Amu Darya.
10.
Another difficulty with regional projects is that country ownership at the line ministry level is a
challenge. For example, because the project was prepared largely by EC-IFAS, ICWC, and other regional
water experts, along with the donors, the line ministries had only limited participation in preparing the
operation and there was relatively little focus on country specific results. Ministries of Economy and
Finance have had even less involvement. The lesson is that it may be unrealistic to expect full country
ownership from all major line and core ministries for a US$20 million regional project. A less ambitious
approach may be more likely to succeed.
11.
A further lesson well documented in projects from other countries is that entrusting project
management to a PMCU of relatively well paid contracted staff, while it may ensure that Bank procedures
are followed, does not build ownership at country level. On the contrary, it may lead to resentment from
technical ministries.
9. Partner Comments
(a) Borrower/implementing agency:
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The Borrower's (EC-IFAS's) full comments are given in Annex 10 and the main points are summarized
here. EC-IFAS endorses the contents and conclusions of the ICR. However, in its view overall the project
objectives were achieved and the project implementation should be rated satisfactory. It indicates that
difficulties in implementation were mostly due to inexperience of regional/national organizations in
implementation of such a complex regional project involving five countries under a transitional environment
at the national and regional levels. Contrary to the ICR mission's finding, it suggests the EC-IFAS
performance in preparation, supervision and overall was satisfactory. EC-IFAS agrees that: (a) the project
lacked ownership by the five countries as the project implementation was dominated by the PMCU
leadership based in Uzbekistan and this was main impediment in resolving implementation problems; (b)
the 15% savings in water use should have been the goal of the ASBP and not the project, and it would be
only achieved through increased irrigation system efficiency; (c) water allocations in the Aral Sea Basin
should allow for the necessary quantities of water for revitalization and sustaining the environment around
the sea, in particular the wetlands in the delta area, in addition to water for irrigation; and (c) the financial
management and project financing remained the major problem during the project implementation.
In addition, the comments include a number of disagreements/suggestions with statements made in the ICR
including: (i) EC-IFAS disagrees with the suggestions that international consultants are not readily
accepted in Central Asia. It indicates that competent international consultants are acceptable; rather, the
region has a problem with excessive payments to international consultants as opposed to local consultants
that may equally be competent; (ii) EC-IFAS also disagree that "the network of Soviet era water
specialists" has resisted any radical suggestions and has argued in preserving the status quo, as indicated in
the ICR. It points out that all of the specialists were chosen with the participation and endorsement of the
World Bank; and (iii) on the financial management misconduct, EC-IFAS notes that the World Bank
should have had better control over the financial management issues of the project and should share the
blame for this mismanagement.
Many of the comments are on potential role of EC-IFAS in the future in overall regional water management
issues, including carrying out the last phase of the A1 studies, conducting further consultations with the
CACs, resolving interstate water management issues, and developing new water sharing agreements. Upon
completing the A1 studies, EC-IFAS notes that the final A1 report must be considered by the IFAS Board,
and it points out that the report falls short of proposing variants for a new regional water sharing
agreement. The borrower report notes that the present timing is not suitable for discussions between
upstream and downstream countries on trade between energy and irrigation. New agreements should be
considered only when the all parties are ready. The report suggests that additional donor support is
necessary for sustaining the institution, and that it should have the status of an international organization
that would prevent domination by any State.
(b) Cofinanciers:
The ICR was sent to SIDA, EU-Tacis and the Dutch Government, the cofinanciers of the project, in
November 2003. No comments have been received from the cofinanciers. A short email received from the
EU-Tacis staff saying that full comments would be sent at a later date, indicated also that EU-Tacis has not
been able to confirm in its record any commitments for funding this project.
(c) Other partners (NGOs/private sector):
Not applicable.
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10. Additional Information
The following section deals with issues of project implementation and impacts of particular interest to
GEF, following the GEF Secretariat's draft Guidelines of May 2003.
Implementation Approach. The project had no logical framework at appraisal but the Trans-Boundary
Diagnostic Analysis (Table 7 in the Project Document) serves much the same purpose. Its analysis of root
causes of problems and project activities was generally sound; however, the expectation that public
awareness alone would lead to water conservation was unrealistic, as was the anticipated 15% reduction in
water use by 2002.
As is true of most projects, after grant signing, the recipient and the Bank's attention turned from strategic
vision to day-to-day details of procurement and other implementation issues. However, the Mid-Term
Review did address broader questions of project objectives and methodology in a limited way and made
adjustments to the extent possible.
Given the Soviet legacy of centralized control and the authoritarian tendencies of project decision-makers,
there was little genuine partnership with other stakeholders, especially those outside the water-engineering
network. Also, environmental and energy agencies had limited involvement. Generally, the difficulties of
five countries working together were underestimated and the risk of Uzbekistan domination, though well
known from the preparation phase, was inadequately addressed.
Project M&E arrangements were weakly developed (there is no section in the Project Document) and
results were not disseminated in a timely or permanent form. Therefore, there was little feedback of M&E
results into implementation. There was also little coordination and interaction between components with
similar objectives, such as A-1, A-2 and B.
Regional Ownership. While the project objectives were and are highly relevant to the cause(s) of the Aral
Sea crisis and were acknowledged by the five countries, details of project design and implementation
methodology were, in many cases, a compromise between EC-IFAS and the Bank; they were never fully
owned by the former (e.g., the procurement process for A-1) or, in other cases (A-2 and B), by the Bank.
Nevertheless, there is reason to hope that A-1 outcomes will influence the policies, programs and projects
of the five states.
GEF support had a catalytic role, as evidenced by the impressive number of parallel and spin-off projects
generated at least partly from WEMP (Annex 9). Among these was a decision by Uzbekistan to continue
and expand wetlands restoration with its own funds, using standards developed under WEMP.
Co-financier support was strong and the "associated investments" projected at WEMP approval (mostly
World Bank projects) were realized in a larger total amount. Some additional projects are being prepared
by the World Bank, Asian Development Bank and others, which draw directly from WEMP findings.
Public Involvement. Table 6 of the Project Document (Sustainability and Participation in the Project) is
mainly concerned with sustainability, but it seems little attention was paid to participation, except in
Component A-2, which made awards for water savings to innovative farmers and farm groups. For
example, the limited dissemination was planned for the A1 reports at appraisal, and multi-stakeholder
involvement has been a challenge.
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Annex 1. Key Performance Indicators/Log Frame Matrix
Outcome / Impact Indicators:

1

Indicator/Matrix
Projected in last PSR
Actual/Latest Estimate
Five national policies, one regional policy,
Plans accepted by the five countries.
Plans prepared, with limited dissemination.
strategy and action programs accepted by
Elaborate consultation and stakeholder
the five Aral Sea basin countries and IFAS
participation conducted by EC-IFAS with
Board.
UNDP assistance.

At least five replicable and sustainable
Five models in practice.
At least five practices confirmed and being
practices for saving water are confirmed.
introduced.
Awareness among population about saving
60% of the population is reached.
Water-saving target was not achieved.
water, national and regional policies,
strategies, and programs.
A program to monitor and maintain the dams, 10 dam safety assessments completed, and Assessments completed, monitoring
sustainably.
dams monitored.
ongoing, additional investments to rehabilitate
dams identified and some introduced.
Trans-boundary water flows (quality and
100%, 25 stations.
25 stations operating, but not yet the
quantity) are measured and data available for
additional 12.
basin-wide water management.
Improved salinity and oxygen levels in Lake
About 10 g/liter; 6 mg/l.
Field information shows numbers achieved.
Sudoche.
Output Indicators:

1

Indicator/Matrix
Projected in last PSR
Actual/Latest Estimate
Five national water and salt management
Final plans.
Draft plans prepared, but not all consistent
policies, strategies and action plans.
with regional plan.
Timely monitoring reports with substantive
20 reports prepared. The component was
Only 1 comprehensive report available to ICR
lessons on low-cost water conservation
curtailed in 2000. The target was left in the
mission. The component was curtailed well
measures.
PSR by mistake.
before the last PSR.
Large numbers are reached by the public
60% of public is reached
Achieved.
awareness campaign.
Dams are inspected.
10 dams inspected.
Achieved.
Water measuring stations operating and
25 stations operating.
25 stations operating, with minor
providing reliable data.
deficiencies; the 12 additional stations are not
yet installed.
Construction of Lake Sudoche is completed. 100% completed.
Construction completed, with some items
deleted.
1 End of project
Note: Key indicators were not included in the project document but added by the supervision
mission in November 1999; these were narrower in scope than the document would suggest (for
example, they contained no quantitative targets on water savings) and had somewhat arbitrary
baseline data.
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Annex 2. Project Costs and Financing
Project Costs and Financing
Total project costs at appraisal were estimated at US$21.2 million, of which US$4.96 million was to be
from country contributions (Table 1 below) and US$16.24 by the Donors. The Project documents
indicated that US$0.9 million of CACs contribution is to be financed by a donor not yet identified at the
time of appraisal; thus, net country contributions expected were US$4.06 million. Disbursement rates in
the grant agreement were set quite low, assuming high levels of country contributions in cash. In addition,
countries were to provide in-kind contributions such as for civil works for Components C and D, for
installing dams and monitoring/water measuring equipment. The high level of country contribution was
unrealistic in retrospect.
The donors were to fund US$17.14 million also covering US$0.9 million of CACs share. At the
appraisal/approval stage, total donor commitments were US$16.24: US$12.22 million from a GEF fund,
US$2.3 million from the Netherlands, US$1.37 million from EU-Tacis, and US$350,000 from SIDA,
which totaled US$16.24--leaving a gap of US$0.9 million. Project documents show a Netherlands
contribution of US$3.2 million, although only US$2.3 million was allocated to project components under
the grant agreement (perhaps assuming that Dutch Government would fund CACs share of US$0.9
million). The procurement tables in the appraisal report were prepared only for US$15.4 million, covering
GEF and Dutch funds (noting US$12.2 million and US$2.3 million, respectively, but assuming Dutch
Funding of US$3.2 million).
Soon after the start of project implementation, an additional US$500,000 Netherlands grant was obtained
(TF21718, signed in June 1999) to partially fill the financing gap, thus raising donor commitments to
US$16.74 million. EU-Tacis funds were originally envisaged for Component C (dam safety) and
Component F (project management); instead, it provided in-kind TA for design and independent monitoring
of the A-2 competition through its ongoing WARAP II project, as well as some help in project
management. However, this assistance ended in October 2000 when WARMAP II was completed. It is
difficult to estimate the organization's equivalent monetary contribution to the project. Thus, donor
commitments net of the EU-TACIS contribution were US$15.4 million soon after the project startup.
SIDA provided more funding than originally expected. At project closing, total SIDA funds totaled about
US$1.1 million (Swedish Kronor 9.84 million), including supplemental funds for the Syr Darya Cascade
Study and Bathymetric equipment to the Kyrgyz Republic, and 100% of the costs of consulting services
under Component C.
Netherlands funding (TF20479) was US$2.3 million (NLG4.5 million) for two components. For Lake
Sudoche works, NLG2.25 million were allocated at a disbursement rate of 40% (44% of the cost of these
works was to be covered by the GEF; the remaining 16% by CAC). For Component A, NLG2.25 million
were for consulting services at a disbursement rate of 21%; 65% was to be covered by the GEF TF and
remaining 14% by the CAC. By the mid-term review, losses due to exchange rate fluctuations in NLG and
to some extent in the SDR rates were over US$800,000. After this time, the balance of the Dutch grant
was converted to EUROs whose value since last year increased in US$ equivalents. Contributions since
then were mainly used to fund the A-1 consultant contract. At the Bank's request, the Netherlands
provided another US$1 million grant (TF 50090) of which 100% was applied to completing the Lake
Sudoche works. Total Netherlands funding was about US$3.6 million (under TF20479, 21718 and
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050090--US$2.3 million, US$500,000 and US$1 million, respectively) against commitments of US$4.2
million. At project closing, US$3.1 million was disbursed from these grants (US$1.3 million for
Component A and US$1.8 million for Component E), while US$500,000 were undisbursed.
Under the GEF TF20417, SDR9.1 million (US$12.2 million at the time of negotiations) was to fund all
components, 100% financing for goods under Components D, E and F, and for consulting services and
incremental operating expenditures for Components D and E. Other components were partially funded
from the Dutch TF and CAC or only from the CAC. At closing, the total amount disbursed from GEF
TF20417 was US$11.3 million and the undisbursed amount was US$700,000.
Total disbursements at project closing from all grants were US$15.5 million, compared to the original
commitment of US$15.4 million (excluding EU-Tacis financing). The total undisbursed balance from all
grants was US$1.2 million. Without an additional US$1 million from the Netherlands, along with a
reduction in the components' scope and favorable exchange rates (EURO and SDR to US dollars),
available funds would not have been adequate to meet the project's obligations. The apparent
inconsistencies in these numbers are due to exchange rate fluctuations during the project implementation
period.
Major Issues in Financial Management
Project financing and financial management remained the biggest issues and causes of tension between the
PMCU and the Bank. The main problems were:
(i)
Financing was not fully secured from the beginning and EC-IFAS (the main counterpart source for
the project) had no financial resources of its own to compensate for any deficit in donor funds. This was
particularly important when EC-IFAS chairmanship was moved from Uzbekistan to Turkmenistan. PMCU
performed the EC-IFAS functions after this time and took decisions related to finances on the other's
behalf. Immediately after the project began, serious concerns arose about securing the US$900,000 (the
source of which was still unidentified). Also, EU-Tacis financing was uncertain; foreign experts operating
under WARMAP II provides technical assistance but this was terminated in 2000. Thus, arrangements for
financing of US$2.27 million were uncertain, a cause of concern and a stumbling block at start-up.
(ii)
The Central Asian Countries did not provide cash contributions for the project (although the
disbursement percentages were calculated assuming they would) which created financial problems for
various contracts. This was particularly true where the disbursement percentage was set at a very low rate
(45% for Components C and F) and goods were procured under ICB contracts. While the countries carried
out civil works for installing equipment under Components C and D, no credible evidence exists of
significant cash contributions by any of the five countries.
(iii)
The financial management system and disbursement process were quite complex because three
special accounts were created and each payment was funded from more than one TF. Thus, transactions
were hard to trace. The three accounts were used for GEF TF20417, for the Dutch TF20479 and for
SIDA TF 21162 grants. In addition, a CAC US dollar special account and current account were
established, as well as a local currency account. Often, the US dollar-denominated payments to suppliers
originated from the CAC special account and were routed through the current account. Funds from Grant
TF special accounts were then transferred to the CAC US-dollar special account. Sometimes, payments
were made from one TF special account and funds then transferred from other TFs to charge each TF
according to the eligible shares. A better approach would have been to spend all of the funds in one grant
account, and then move to another account, rather than making one payment from several accounts. Also,
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this would have eliminated the added costs of transaction fees for moving funds from one account to
another. After mid-term, this latter approach was used for the new Dutch TF-50090 under which
Component E costs were 100% disbursed (instead of sharing between GEF TF20417, DTF20479 and
TF50090). Thus, all TF funds were disbursed smoothly within a few months.
(iv)
The PMCU was responsible for other Uzbekistan-related ASBP activities not included in the
project. Thus, WEMP financial records and transactions were often mixed with these non-WEMP efforts.
After the mid-term review, parts of the accounting system were streamlined by reducing the number of
special accounts as well as their funding levels. Disbursements were extremely slow in the first 18 months
after the project started: The GEF TF 20417 SA had a balance of US$1 million, DTF 20479 US$200,000,
and SIDA TF 21162 US$200,000--a total advance of US$1.4 million, substantially higher than the
project's quarterly expenditures.
(v)
In 1999, funds from the SA of the GEF, Dutch and Swedish special accounts were placed in
separate deposit accounts at the National Bank of Uzbekistan (NBU). Subsequently, the PMCU was asked
to use interest from these funds for EC-IFAS contributions, which they did.
(vi)
Added complications arose due to restrictive foreign exchange transactions in Uzbekistan, where
PMCU was based, and through which all funds passed.
(vii)
Project audits were often late and Bank queries about audit issues were rarely answered
satisfactorily.
The above summarizes the difficulties in the project's financial management. Some issues were due to the
original design, including low disbursement rates, a financing gap, and various special accounts and
activities funded from many TFs. Others emerged in implementation. During all supervision missions,
financing issues remained the main focus of discussion. Disputes over finances always overshadowed and
affected the substantive technical discussions. Because expenditure statements were not current,
day-to-day financial management and future planning were extremely difficult. After the mid-term review,
efforts were made to streamline financial management. Several amendments were made to increase
disbursement percentages, and most of the project activities were 100% financed from the grant.
Contributions from the client were in-kind (personnel and civil works). Some special accounts were closed,
and only the GEF special account was used to transfer TF funds. The Bank paid for several large
contracts directly, and the special accounts' balances were reduced. However, financial management
remained a problem until project closing, producing tension between the Bank and the implementing agency
and causing several project targets to under-achieve.
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Table 1: Project Costs/Financing by Component : Appraisal Estimates
(in US$ millions)
Component
Total
Central
Grant Financing by Donors
Asian
GEF Netherlands EU-Tacis
SIDA
Total
Countries
A. Water and Salt Management
6.27
1.16
4.11
1.0
5.11
B. Public Awareness
3.10
0.31
2.79
2.79
C. Dam Safety and Reservoir
2.57
1.17
0.50
0.55
0.35
1.40
Mgmt
D. Trans-Boundary Water
3.45
1.23
2.22
2.22
Monitoring
E. Wetlands Restoration
3.88
0.45
2.13
1.3
3.43
Project Mgmt Support
1.93
0.64
0.47
0.82
1.29
Total
21.2
4.96
12.22
2.3
1.37
0.35
16.24
(4.06) 1/
(3.2) 2/
4/
1/
The countries' contribution adds up to US$4.96 million. While the total shown in the Project Document
was US$4.06 million with a note that US$0.9 of the countries contributions were to be financed by an
unidentified donor contribution.
2/
Dutch funding was NLG4.5 million or US$2.3 million equivalent (allocated to Components A and E)
while the total was shown in the Project Document as US$3.2 million, possibly showing the Netherlands
would provide an additional US$0.9 million from the CACs share. In any event, there was gap in
financing of US$0.9 million. After project start, US$500,000 was provided under Dutch TF 21718, thus
leaving a US$400,0000 gap in donor financing.
3/
EU-Tacis funds were provided in-kind through WARMAP II for component A-2, and possibly for
Component F. WARMAP II stopped in October 2002. It is difficult to estimate how much funding
EU-Tacis provided.
4/
Donor financing totaled US$16.74 million (including the additional US$500,000 from the Netherlands)
against the US$17.14 million identified as the donor portion including U$0.9 million for countries share
financed by the donors. The donors' cash contribution totaled US$15.37 million, excluding in-kind
funding by the EU-Tacis.
Table 2: Project Costs/Financing by Component: Latest/Actual
(US$ Millions)
Component
GEF
The
SIDA
Total
Original
Netherlands
Commitment
s
A. Water and Salt Management
3.6
1.3
4.9
5.11
B. Public Awareness
1.4
1.4
2.79
C. Dam Safety and Reservoir Management
1.1
1.1
2.2
1.40
D. Trans-Boundary Water Monitoring
3.0
3.0
2.22
E. Wetlands Restoration
1.6
1.8
3.4
3.43
F. Project Management and Support
0.6
0.6
1.29
Total
11.3
3.1
1.1
15.5
16.24
Note: As the report states, it is impossible to estimate the total cost and no credible evidence exists of
significant country cash contributions though there were contributions in-kind (for staff, office space, logistics
and civil works). Disbursement percentages were increased to 100% just after the mid-term review and prior to
major grant disbursements. Estimates of grant funds disbursed are accurate and reasonably reflect project costs.
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Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent)

1
Procurement Method
Expenditure Category
ICB
NCB
2
N.B.F.
Total Cost
Other
1. Works
2.88
0.00
0.00
0.83
3.71
(2.88)
(0.00)
(0.00)
(0.00)
(2.88)
2. Goods
2.53
0.00
0.64
0.68
3.85
(2.53)
(0.00)
(0.61)
(0.00)
(3.14)
3. Services
0.00
0.00
10.00
1.36
11.36
Consultant Services and
(0.00)
(0.00)
(8.40)
(0.00)
(8.40)
Training
4. Incremental Operating
0.00
0.00
1.10
0.91
2.01
Costs
(0.00)
(0.00)
(0.98)
(0.00)
(0.98)
5. Recurrent Costs
0.00
0.00
0.27
0.27
(0.00)
(0.00)
()
(0.00)
(0.00)
Total
5.41
0.00
11.74
4.05
21.20
(5.41)
(0.00)
(9.99)
(0.00)
(15.40)
The project document notes that the amounts in parentheses are to be financed by the GEF (US$12.2 million and
Dutch grants of US$2.3 million ). It appears Dutch funding of US$3.2 million was assumed in the detailed table
instead of US$2.3 m.
Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent)

1
Procurement Method
Expenditure Category
ICB
NCB
2
N.B.F.
Total Cost
Other
1. Works
2.70
0.00
0.00
2.70
(2.70)
(0.00)
(0.00)
()
(2.70)
2. Goods
2.30
1.00
0.80
4.10
(2.30)
(1.00)
(0.80)
()
(4.10)
3. Services
0.00
0.00
8.30
8.30
Consultant Services and
(0.00)
(0.00)
(8.30)
()
(8.30)
Training
4. Incremental Operating
0.00
0.00
0.40
0.00
0.40
Costs
(0.00)
(0.00)
(0.40)
(0.00)
(0.40)
5. Recurrent Costs
0.00
0.00
0.00
0.00
0.00
(0.00)
(0.00)
(0.00)
(0.00)
(0.00)
Total
5.00
1.00
9.50
0.00
15.50
(5.00)
(1.00)
(9.50)
(0.00)
(15.50)
Notes: All figures are Grant Funds disbursed by the Bank (GEF, Dutch and SIDA)
1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies.
2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff
of the project management office, training, technical assistance services, and incremental operating costs related to (i)
managing the project, and (ii) re-lending project funds to local government units.
- 29 -

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- 30 -

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Annex 3. Economic Costs and Benefits
Given the largely strategic nature of the project objectives, it is not surprising the discussion in the project
document of benefits and justification is largely qualitative. Benefits are summarized in the matrix below:
The table below compares appraisal projections and probable outcomes in both quantitative and qualitative
expected benefits. However, it should be noted the project's full impact has yet to be felt and another
evaluation three to five years from now could be quite useful.
- 31 -

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Benefit
Appraisal Expectation
ICR Expectation
Section K of the Project
Document
National and regional
An integrated, transparent and A-1 studies provide good technical and
policies, strategies and action agreed framework would be
analytical information to improve water
programs for managing
created, in the form of a
management in the region. Regional and
water and salt.
regional and five national water national plans are prepared.
and salt management plans.
Interstate agreements on
"Enhancing the capability" of
Some progress on seasonal
water sharing for water
such agreements, through joint management. This statement refers to
quality, seasonal
decision-making under
the water-energy trade-off issue, where
management and
Component A.
an agreement was reached in 1998.
cost-sharing.
However, allocation of water in the
drought years 2000 and 2001 was
notably inequitable. Various initiatives
to improve water management in the Syr
Darya Basin were conducted.
Reform measures such as
Improving acceptance in the
Some progress re: water charges in
water pricing and cost
region for such measures.
Kyrgyz Republic, Tajikistan and
recovery. Water conservation
Kazakhstan, though not due to the
by creating regulations.
project. Regulatory measures were
Water conservation through
inadequate during the droughts in 2000
inter-state agreements that
and 2001, at least in Uzbekistan.
would allow for more
Based on the draft regional strategy
sustainable water and land
under A-1, if water conservation
management.
measures were adopted by the five
states, sufficient water would be
released to meet the needs of the "sixth
user," the Aral Sea (or rather its deltas),
without explicit interstate agreements to
this effect.
Water sector investment to
Investment (from private,
Too early to tell. Private investment
make water use more
public and donor sources) will remains negligible. Public sector
efficient and to address the
accelerate through (a)
investment is severely constrained by
maintenance backlog.
transparent and stable policies; budget and economic conditions. An
(b) component A reforms and
important exception is wetlands
(c) demonstration effects of
development, since Uzbekistan
other components.
embarked on a significant program
based on Component E success.
However, Uzbekistan's current
investments in rehabilitating irrigation
and drainage systems remain far below
the rate of deterioration. Donor support
increased, with some long-gestation
projects coming on stream; but, future
plans are cautious, due to slow progress
on economic reforms in Uzbekistan and
- 32 -

---

Turkmenistan and limited absorptive
capacity in the Kyrgyz Republic and
Tajikistan
Reducing water consumption "IFAS target" of 15% water
The 15% target was achieved in one
and thereby improving river conservation, with 5% from
basin. however, this was not due to the
salinity and flow to the deltas Component B. Other impacts
project. Thus there was no evidence of
and Aral Sea.
from deepening and
systematic water savings yet. There was
effectiveness of reforms,
no significant impact from Component
incentives and interstate
B (5% savings). Impacts from reforms
agreements.
and incentives (e.g. WUAs and pricing)
will take time to develop.
Capacity to monitor water
Create physical capacity.
Appraisal targets exceeded; problems
flow and quality between
with delivery of equipment for
states.
additional 12 stations to the four
countries and installation are being
resolved.
Dam safety.
Increase in dam safety by
Spin-off dam safety projects for Lake
installing equipment and
Sarez, Chardara and Kayrakum were
training staff on early warning identified. (Lake Sarez is almost
systems for nine dams and Lake completed, Chardara is being carried
Sarez action plan.
under a project in Kazakhstan, and
Kayrakum is being prepared.
Biodiversity.
Increase as a result of
Strong visual evidence of substantial
Component E.
impact; monitoring under way.
Institutional impacts.
Strengthening:
While the project strengthened some
.ASBP
elements of the ASBP, it may have
·EC-IFAS
diverted attention from other needs
·National agencies
(such as watershed management).
Strengthening EC-IFAS was not
achieved and it is weaker than at
appraisal. Little impact on national
agencies.
Incremental cost analysis.
Incremental cost of $17.8
Not relevant at ICR stage.
million estimated.
Component E rate of return.
At least 12%, based on
Full benefits will be realized in a few
economic benefits of
years. Available monitoring shows
US$800,000 a year and
benefits are likely to be higher than
biodiversity benefits of at least original estimates.
that much.
Damages from salinity would 20% rate of return could be
No evidence of systematic changes in
be reduced.
achieved if benefits from
soil salinity levels to date.
reducing salinity are about $4
million a year.
- 33 -

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Annex 4. Bank Inputs
(a) Missions:
Stage of Project Cycle
No. of Persons and Specialty
Performance Rating
(e.g. 2 Economists, 1 FMS, etc.)
Implementation Development
Month/Year
Count
Specialty
Progress
Objective
Identification/Preparation
06/01/1994
14
Sector Leader, Water Resources
Specialist (2), Water Advisor,
Irrigation and Drainage Engineer
(2), Economist (2), Agriculturist,
Pocurement Specialist, Financial
Management Specialist,
Drainage Engineer, Dams
Engineer, Public Relations
Specialist (The count is
approximate as accurate record is
not available.
Appraisal/Negotiation
04/13/1998
12
Sector Leader, Water
Resources Specialist,
Agriculturist, Ecologist,
Drainage Engineer,
Economist, Dams Engineer
Procurement Specialist,
Financial Specialist, Public
Relations Specialist, Lawyer,
Loan Office (count is
approximate).
04/13/1998
Supervision
12/04/1998
5
SECTOR LEADER (1); FIN.
S
S
MGMT. SPECIALIST (1); SR.
OPERATIONS OFFICER (1);
OPERATIONS OFFICER (1);
IRRIGATION ENGINEER (1).
05/21/1999
7
COMMUNICATIONS ASS. (1);
S
S
EXTERNAL AFFAIRS OFF.
(1); FIN. MGMT. SPECIALIST
(1); PROCUREMENT
ANALYST (1); OPERATIONS
OFFICER (1); IRRIGATION
ENGINEER (1); SR.
OPERATIONS OFFICER (1).
11/26/1999
9
PROJECT MANAGEMENT (1);
S
S
PROJECT
MANAGEMENT/POL (1);
WATER RESOURCES/ENVIRO
(1); IRRIGATION/DRAINAGE
- 34 -

---

(1); WATER RESOURCES (1);
ECOLOGY (1); DAMS
SPECIALIST (1);
PROCUREMENT (1);
SOCIAL/ENVIRONMENAL (1).
06/23/2000
11
WATER RESOURCES/ENVIRO
S
S
(1); PROJECT
MANAGEMENT/POL (1);
DAMS SPECIALIST (1);
COMMUNICATIONS SPECIAL
(1); COMMUNICATION
SPECIALI (1); FINANCIAL
MANAGEMENT (1);
PROCUREMENT (1); WATER
RESOURCES (1); WATER
RESOURCES/ENV (1);
PROJECT MANAGEMENT/PO
(1); PROJECT MANAGEMENT
(1).
12/21/2000
10
TEAM LEADER (1);
U
S
OPERATIONS OFFICER (1);
SR. IRRIGATION ENGINEE
(1); RESIDENT REP.
TASHKENT (1); SECTOR
MANAGER (1); IRRIGATION
ENGINEER (1); ENERGY
SECTOR SPECIALI (1);
RESIDENT RE. KYRDYZ (1);
FINANCIAL MANAGAMENT
(1); GEF REPRESENTATIVE
(1).
07/06/2001
9
WATER RESOURCES (1);
U
S
SECTOR MANAGER (1);
COUNTRY MANAGER (1);
OPERATIONS OFFICER (1);
ENERGY SPECI. (1); PUBLIC
RELATIONS (1);
PROCUREMET (1);
PROCUREMENT (1);
ECONOMIST (1).
02/25/2002
4
TEAM LEADER/WATER
S
S
RESO (1); ECONOMIST (1);
OPERATIONS OFFICER (1);
WATER RESOURCES (1).
08/06/2002
5
WATER RESOURCES (1);
S
S
ECONOMIST (1); WATER
MANAGEMENT (1);
COUNTRY
MANAGER/ECONOM (1);
COUNTRY MANAGER/ECON
(1).
03/03/2003
2
TEAM LEADER (1);
S
S
ECONOMIST (1).
- 35 -

---

ICR
06/02/03
3
TEAM LEADER (1);
WATER RESOURCES (1);
COUNTRY MANAGER
(1).
(b) Staff:
Stage of Project Cycle
Actual/Latest Estimate
No. Staff weeks
US$ ('000)
Identification/Preparation
incl. below
Appraisal/Negotiation
1,055
Supervision
1,307
ICR
35
Total
2,394
- 36 -

---

Annex 5. Ratings for Achievement of Objectives/Outputs of Components
(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)
Rating
Macro policies
H
SU
M
N
NA
Sector Policies
H
SU
M
N
NA
Physical
H
SU
M
N
NA
Financial
H
SU
M
N
NA
Institutional Development
H
SU
M
N
NA
Environmental
H
SU
M
N
NA
Social
Poverty Reduction
H
SU
M
N
NA
Gender
H
SU
M
N
NA
Other (Please specify)
H
SU
M
N
NA
Private sector development
H
SU
M
N
NA
Public sector management
H
SU
M
N
NA
Other (Please specify)
H
SU
M
N
NA
- 37 -

---

Annex 6. Ratings of Bank and Borrower Performance
(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)
6.1 Bank performance
Rating
Lending
HS
S
U
HU
Supervision
HS
S
U
HU
Overall
HS
S
U
HU
6.2 Borrower performance
Rating
Preparation
HS
S
U
HU
Government implementation performance
HS
S
U
HU
Implementation agency performance
HS
S
U
HU
Overall
HS
S
U
HU
- 38 -

---

Annex 7. List of Supporting Documents
List of Supporting Documents
RER/98/005: Aral Sea Basin Capacity Development Project ­ Terminal Report Form, UNDP,
October 2001.
EC-IFAS, "Aral Sea Basin Program: Draft Progress Report No. 4", February 2002.
World Bank, "Aral Sea Basin Program Review: Proposed Tentative Conclusions and
Recommendations", unpublished draft, June 1996.
European Commission, EuropeAid Cooperation Office, Program 2003-2005, Terms of Reference,
"Strengthening the Capacity of Basin Water Organizations (BVOs) for Improved Resource
Planning", Brussels, October 2002.
World Bank, ASBP/ WEMP/ Sub-Component A.1,"Report of Independent Panel of Experts,
January-February 2002."
EC-IFAS, ASBP/ WEMP. Sub-Component A.1, Regional Report No. 3, "Draft Regional Policy,
Strategy, and Action Program for Water and Salt Management", Royal Haskoning, 30 April,
2003."
EC-IFAS, ASBP/ WEMP, Sub-Component A.1, National Report No. 2 by National Working
Group of Kazakhstan, "National Policy, Strategy and Action Plan for Water and Salt
Management Project", __ 2002.
EC-IFAS, ASBP/ WEMP, Sub-Component A.1, National Report No. 2 by National Working
Group of Kyrgyz Republic, "National Policy, Strategy and Action Plan for Water and Salt
Management Project", __ 2002.
EC-IFAS, ASBP/ WEMP, Sub-Component A.1, National Report No. 2 by National Working
Group of Tajikistan, "National Policy, Strategy and Action Plan for Water and Salt Management
Project", __ 2002.
EC-IFAS, ASBP/ WEMP, Sub-Component A.1, National Report No. 2 by National Working
Group of Turkmenistan, "National Policy, Strategy and Action Plan for Water and Salt
Management Project", August 2002.
EC-IFAS, ASBP/ WEMP, Sub-Component A.1, National Report No. 2 by National Working
Group of Uzbekistan, "National Policy, Strategy and Action Plan for Water and Salt Management
Project", September 2002.
SIC-ICWC/IWMI, "Ways of Water Conservation" (results of WUFMAS Sub-Project,
- 39 -

---

WARMAP-2 Project (TACIS) and Sub-Component A.2 of GEF Project), Tashkent, 2002.
IFAS, "WEMP - Component B: Public Awareness, March 1999 - July 2002," (unpublished
draft), Tashkent, 2002.
- 40 -

---

Additional Annex 8. Project Design and Implementation
Project Origin
The nature and extent of the Aral Sea crisis were fully described in Section I.B of the project document. In
1994, with Bank assistance, the five countries developed the Aral Sea Basin Program (ASBP) as a
comprehensive attempt to deepen understanding of the problems and propose solutions. The ASBP had
eight themes (programs) and 19 projects, including strategies, pilots and feasibility studies for investment
projects (see Project Document, Vol. 2, Part IV, Table 1 for a full listing). Donor support was obtained for
most of the 19 projects, which were carried out from 1995-1997.
A GEF Preparatory Assistance Grant of $500,000 was obtained for studies in two of the projects:
"Regional Water Resources Management Strategy," (1.1) and "Water Quality Assessment and
Management" (3.1a). The studies were intended to cover water quantity and quality issues in a
complementary way, with leadership from the water and environmental sectors, respectively. In practice,
despite some joint meetings, the two working groups tended to operate independently and there was no
provision for a joint product. Each study was carried out by regional and national working groups of
senior specialists, on a part-time basis, with most of the activity occurring at workshops. The resulting
reports were somewhat disappointing: The 1.1 group produced a voluminous regional and five national
reports that mostly reproduced previous material with few new concepts and a tendency to avoid
controversial issues. The 3.1a reports (also regional and national) stated that salinity was the principal
trans-boundary water quality problem, though other pollutants were important in specific locales and at the
national level. However, they did not analyze the mechanisms of salt transfer in any detail.
Project Design
As work began on the project design, it was clear the focus would be on strategies for managing regional
water quantity and quality. However, all stakeholders felt it would be desirable to supplement this focus
with components that would meet GEF's concern with addressing the causes of the Aral Sea crisis and
simultaneously show some "results on the ground." At this stage, the main participants were: EC-IFAS
management; the Director of SIC-ICWC; Aral Sea Basin units at Bank headquarters and in the Resident
Mission in Tashkent; the ECA region GEF coordinator; and the GEF Secretariat. Officials of national
ministries of agriculture, water and environment and their design institutes were relatively uninvolved.
Several suggestions for additional components were evaluated. The Bank proposed a regional program of
pilot projects to test methods of water conservation and salt management, but it was rejected by
EC-IFAS--although Component A-2 eventually contained many of the same characteristics. Several
donors subsequently financed various pilot projects, though no systematic review of their results has been
made. A Bank proposal to continue the work of Program 6 (Land Degradation) through pilot projects on
watershed management and/or rehabilitation of the Aral Sea bed under the then-new GEF theme of
Desertification was rejected by GEF. However, the Bank itself is now lending in both areas, the latter (in
Kazakhstan) with GEF support.
During project design, components building on ASBP projects 1.3 (Sustainability of Dams and Reservoirs)
(C); 2.1 (Hydrometoerological Services)(D); and, 4.1 (Wetlands Restoration)(E) were agreed upon
without controversy. While Component E was a direct outgrowth of Project 4.2, which developed a
strategy for wetland restoration and proposed some priority sites, the others shifted focus somewhat:
Component C focused on one aspect of the sustainability of dams and reservoirs that was of particular
interest to the Bank, since dam safety assessments under its first round of projects in the former Soviet
- 41 -

---

Union uncovered an alarming number of problems. Other aspects, like sedimentation, were set aside
(although provision of hydrographic equipment was later added). Component D expanded the work of
Project 2.1, which emphasized institutional strengthening and forecasting of snow volume, into the
emerging priority of trans-boundary monitoring stations to support present and future water agreements.
Component B was proposed by EC-IFAS during appraisal and was a controversial addition. The priority
of improving water use efficiency was not in doubt; however, with hindsight, Component B was based on
an erroneous premise ­ that public awareness alone could lead to significant changes in water use behavior.
Indeed, it should have been understood by EC-IFAS and the Bank (as recently endorsed in the A-1
Regional Report No. 3), that many factors are involved. These include improved agricultural practices,
improved conveyance and distribution facilities, water charges and extension services. Perhaps the most
unfortunate aspect was adopting a target of "at least a 15% reduction of water use by the end of the next
phase" ­ an imprecise ending point but taken by many to mean the end of the project. However, para. 2.13
is more explicit, presenting a Component B objective as to "induce behavioral changes among water users,
thus reducing their water consumption by about 5% at the end of the awareness campaign in 2002."
With the inclusion of the public awareness program (Component B), the Bank team sought assistance from
External Affairs staff to ensure it was designed in a professional way. However, the latter were not
comfortable with the EC-IFAS plan to hold a competition between water user groups with cash prizes.
Thus, this activity was moved from Component B to Component A-2.
The final project design was essentially a compromise between (a) those who gave priority to longer-term
strategy development versus those who stressed "results on the ground;" (b) the recipient (EC-IFAS), who
wanted to control as much of the money as possible (by continuing the Working Group concept from Phase
1, and emphasizing activities having a high proportion of local costs) and the Bank, which felt the ASBP
experience already demonstrated the value of consulting firms working to precise TOR and strict deadlines;
(c) an "equal shares for each country" approach to a more needs-based philosophy; and most of all (d)
differing views as to the value of foreign consultants. These issues were described (in somewhat veiled
language) in para 1.48 of the project document. Because of these differing perspectives and objectives, the
appraisal process was greatly extended and, at times, heated.
The time needed to reach a compromise on these issues and on the design of Component A-1 tended to
distract attention from the lack of readiness of several components (B, D and E). As B was added at
appraisal, there was no prior experience to draw upon. Also, no analysis existed of site-specific needs for
the hydrologic stations under Component D--especially the appropriate level of automation--so a "one
size fits all" approach was adopted that detracted from the component's quality. For Component E, the
inadequacy of preliminary designs and cost estimates was not apparent until after project launch.
- 42 -

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Additional Annex 9. Parallel and Spin-off Projects
Donor
Project Title
Component A1
USAID
Natural Resources Management Project
CAR Environmental Policy and Technology Program
Institutional Strengthening Project
CAR Trans-Boundary Water and Energy Program
Integrated Water Management in Zerafshan River Basin
EU/UN
Water Management Strategy (SPECA)
Component A2
Swiss/IWMI
Integrated Water Resource Management Project
Component C
WB
Syr Darya Control and Northern Aral Sea Project (SYNAS)
Lake Sarez Risk Mitigation Project
Kyrgyzstan
Monitoring Equipment Installation at Togtogul and Shamaldysay Dams
Turkmenistan
Monitoring Equipment Installation at Khauzkhan Dam
Swiss
Monitoring and Early Warning System at Sarez Lake
Tajikistan
Proposed Ferghana Valley Water Resources Management Project
Component D
USAID
CAR Improvement of Regional Hydro-meteorological Data Collection,
Transmission, and Sharing
Meteor Burst Communication System
Installation of Meteorological Stations at Fedchenko and Abramov Glaciers
Uzbekistan Hydromet Information Technology Assistance
Swiss
Regional Center for Hydrology
Installation of Hydrological Stations in Tajikistan and Uzbekistan
Meteorological Stations
Hydrological Forecasting Project
Kazakhstan
Trans-Boundary Monitoring Stations
Component E
WB
Drainage, Irrigation, and Wetland Improvement Project (DIWIP)
Uzbekistan
Delta Management Project (Biodiversity Restoration of Muinak, Rybache, and
Djiltyrbas Lakes)
WB
Syr Darya Control and Northern Aral Sea Phase-I Project
- 43 -

---

Additional Annex 10. EC-IFAS Comments
Aral Sea, Water and Environmental Management Project
Comments by EC-IFAS
Examining the WB Implementation Completion Report for the Aral Sea, Water and Environmental
Management Project, including the official conclusions and comments, the EC-IFAS notes, that in general,
the World Bank gives quite a correct assessment of the work done.
It is necessary to note that such a large project was implemented in the region practically for the first time
and analysis of its positive and negative aspects would be very useful for future work of both EC-IFAS and
works related to the UN declaration of the years 2005-2015 to be ten years of fresh water (Water for life).
One can see that many difficulties in project implementation were as a result of its regional characteristics,
and the that fact that not only issues are to be considered regionally/comprehensively but also
comprehensive solutions acceptable to all would have be found. Though this is an attractive approach, but
not a very realistic one, especially taking into consideration the differences in national interests on many
issues and the transitional nature of the Central Asian States economies. The more correct approach could
be the exposure in the project of the whole complex of existing problems both on the national and on the
regional levels and the development of their solution variants. The concrete solutions can be reached only
by the states themselves and by their entities as a result of future work. In this regard. we consider it
necessary to mention as one of the project imperfections, the lack in of serious world experience analysis of
which the CA specialists are not well aware, but which should be well known by the consultants of the
World Bank.
In examining the ICR Report, the EC-IFAS has the following comments:
1.
The agreement system of the worked materials with the Governments of the CA States, the revision
of these materials and their legitimacy were not organized by the GEF Agency and by the Consulting
Company ­ "Haskoning". (Though the report on Phase VI was once discussed at a ICWC meeting ). The
only agreed document is the initial report on the Component A I, but the Governments notes were not taken
into account.
2.
The created institute, PMCU under the influence of the GEF Agency Leadership, factually
replaced the parties participated in the Project.
3.
The final reports of the GEF Projects were neither considered by the Board of IFAS nor at the
general meeting of legally authorized representatives of the States. The considerations at ICWC level have
the relation of its members to this project and do not have any legitimate basis.
4.
The project hasn't come up to the consideration at least to the approaches to the new water
division. This is a basic question, it was mentioned in ASBP-1 and at the beginning stage of the GEF
Project by Mr. Gert Slummer and Mr. Ginyatullin R.A. at the first workshop in Tashkent (September,
2000). As a result, the national consultants were requested to submit the legitimate documents in future.
But subsequently, the global issues were "successfully" put by the GEF Agency Leadership to the inner
economic level. Additionally, the problem of water division wasn't solved, "the money was spent", there is
a lack of the mechanism for undoubted water provision to the Aral Sea deltas and even for example, the
water not fully used by Tajikistan because of the crisis, doesn't reach the Aral Sea.
- 44 -

---

5.
The main contradictions such as "the upper watersheds and the downstreams"; "irrigation and
power engineering" will be saved until the time when the countries establish economic mechanism of water
use thereby smoothing out these contradictions. This most important question wasn't considered in the
GEF Project as well and because of the lack of coincidence in the interests of water loss, underproduction
of electric power and other damages connected with flooding of territories, worsening of ecological
situation and technical state of water-engineering system having interstate importance are evident in the
region.
6.
International competent consultants are readily received in Central Asia (p.37), the contradictions
on the issue concern as a rule their quantity and big difference in the salary compared with local specialists
who are sometimes more qualified.
7.
The statements on 15% - shortening of water use norms it is necessary to connect with the
measures on rehabilitation of irrigation systems and increasing their efficiency factor.
8.
The statement (p. 10) on the reasonable way of water resources management in the Aral Sea Basin
and their sufficiency for the purposes of the existing irrigation and deltas and the information on these
issues should be considered in the context of correct water division in the region with regard for ecological
needs. That's why we support (p. 11) the discussions, workshops, symposiums and consultations in this
direction.
9.
The point that about 70% of water for rivers are lost raises big doubts. At least in Tajikistan, this
is not the case.
10.
We do not fully agree with some ideas in the point 5.1. No state has the intent to compromise. But
transmission, delegation of some rights, authorities to jointly created organizations are questions which can
be solved and progress on them can be reached at the round table. The functioning of IFAS, EC-IFAS,
ICWC should be full, like the functioning of the international organizations, without any domination from
any country. There will not be any confidence and fruitful cooperation without it.
11.
In point 5.2 there are some inaccuracies. EC-IFAS, was located in Dushanbe City for the first
time and not again as was stated. And it is not a conflict but a simple request of EC-IFAS Leadership to
follow the regulation approved by the Heads of CA States.
12.
In the point 5.3. The Bank must not only give a true appraisal but also as a financing organization,
it must take timely measures to prevent domination by anyone which will lead to financial violations,
injustice and different difficulties. This circumstance confirms once again the necessity to establish the
functioning international control by giving IFAS the status of an UN organization, proposed by the
President of IFAS, Rahmonov and reflected in the Dushanbe Water Appeal at the International Fresh
Water Forum on August 29 ­ September 1, 2003. This will assist in practical realization of ASBP-2,
approved on August 28, 2003 at the IFAS Board Meeting.
13.
Page 18 (A.I). Here there is the substantiation of new water division and it is envisaged in the
agreement of the Heads of States. It will take years and it should not be put off. In future it would be
easier and simpler to make decisions on water division with regards to economic and environmental fields.
At the same time, it is necessary to work at the economic mechanism of water use, or the principle of
transmission from water division to sharing of profits coming from the joint use of water resources.
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14.
The suggestion of the World Bank concerning the achievement of potential economy in water use in
the national programs under the support of donors deserves all supports. As these issues are mentioned in
ASBP-2 it is necessary to support them as well.
15.
The support is needed in the creation of the Regional Center of Hydrology (RCH), an agreement
which is already made by Kazakhstan, Kyrgyzstan and Tajikistan.
16.
On page 18 (E) the question is evidently on the rehabilitation of wetland areas. But there are land
­ reclamation defective lands (salinity, swamp land) and that is why it is necessary to rehabilitate these
lands in the region ­ about 5 mln. ha from which more than 80 thous. ha belong to Tajikistan.
17.
We are grateful to the World Bank understanding of the necessity to define the constant location of
EC-IFAS. It is also mentioned in Dushanbe Declaration of the Heads of CA States dated October 6, 2002.
The location in Dushanbe more suitable as Tajikistan has 55,4% of water resources forming in the Aral
Sea Basin and uses only 11% of regional waters that is a natural guarantee to the other countries interests.
18.
Point 7.4. To make it clear, it is necessary to indicate that EC-IFAS was located in Tashkent and
in accordance with the order, the Republic of Uzbekistan chaired it.
19.
Point 7.5. p. 20. From 2002 EC IFAS was located in Dushanbe and is providing the same
function as the EC on the basis of its regulation approved by the Heads of States. We strongly object the
common statement that "the network of Soviet-era water specialists predictably argued for the status quo
and resisted any radical suggestions". This doesn't concern the specialists of the Republic of Tajikistan.
And all specialists were chosen with the participation of the project parties and the representatives of the
World Bank.
20.
Point 7.6 (p 21). It would be useful to name the persons "who held components A.I and D hostage
in its ongoing battles with the Bank and EC-IFAS respectively", who dispersed the trained personnel, who
broke Phase VII, their countries and why they didn't implement the decisions of the Heads of CA States.
21.
Point 8 (p.21). There are no underlying "bilateral tensions and disputes between the countries" as
the decisions of the Heads of CA States are aimed at cooperation and development of appropriate
documents. But there are people tearing away the implementation of the decisions.
Summary
We cannot avoid the large regional projects in transboundary basins such as the basin of the Aral Sea.
This is why we need to do the following:
·
the Center for the project management which must have its own balance (financial means),
consisting of the parties representatives and should coordinate the project implementation such as
EC-IFAS;
·
joint organization (by the countries) of the term of references and its approval;
·
the financing must be separate by each country but the control over the implementation must be
carried out by the Governments and by the Center for the project coordination;
·
there must be a strong mechanism of the agreement of project decisions, taking into account the
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views and approvals at the official Governmental level.
Regarding the fact that the equipment for 12 additional hydrological stations and other techniques and
equipment (transmitters, cars) are still in Tashkent which was artificially organized by the GEF Project
Leadership and at present the Executive Committee of IFAS tries to transmit them to their destination.
Regarding the results of the Components B, C, D and E, the Executive Committee of IFAS within the
framework of the new ASBP-2, envisages the new projects in which these results would be used and the
implemented works would be prolonged. We consider it necessary to realize the projects within the
framework of ASBP-2 in which the results of these Components are realized.
In general, the EC-IFAS proposes to consider the results of the project "Water and environmental
management in the Aral Sea Basin" as satisfactory and hopes for future fruitful cooperation with the World
Bank.
S. Aslov,
EC-IFAS Chairman
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