Gujarat[, India] medium irrigation project

Memorandum audit report covers the period 3/79-10/80 and is based on document review, interviews with USAID/I and Government of Gujarat (GOG) officials, and site visits. Only 14 of 33 medium irrigation development projects (MIP"s) have been approved for funding; eight of them are 12-38% behind schedule due to slow loan disbursement, GOG delays in awarding contracts, and shortages of personnel (only 700 of 1,200 positions filled). Unless immediate remedial actions are taken, the project will not be completed as scheduled. Other project elements, however, are showing satisfactory progress. River gauging stations have been established at 23 MIP"s, socioeconomic studies were completed in 24 MIP areas, and demonstration farms are being prepared. USAID/I monitoring activities were limited (the World Bank, the larger donor in the program, had major monitoring responsibility), and little action was taken to address problems noted on field trips. In the past year, however, the Mission has stepped up efforts in this area and appointed an engineer as Project Officer. The GOG has not submitted MIP contracts to USAID/I and the World Bank as required, including 16 contracts (out of 41) valued at over $750,000 which required prior World Bank approval. Neither were these contracts furnished to USAID/I after the World Bank did finally review them. The GOG has since taken action to comply with contract approval requirements. In addition, several advances had been made to contractors but were not recorded by USAID/I or the World Bank. The GOG has agreed to supply quarterly status reports on advances. Although the GOG is complying with reporting requirements, its internal expenditure reports are inaccurate and inconsistent. Finally, non-urgent construction at Watrak was wrongly carried out by GOG force account. The GOG should correct the above matters. To assure public acknowledgement of U.S. participation in the project, the GOG should confirm in writing to USAID/I that required signs have been placed at major project sites.