LUWU AREA AND TRANSMIGRATION DEVELOPMENT PROJECT - IRRIGATION EQUIPMENT - AID LOAN NO. 497-T-038

Evaluation, which covers the period 1/1/75-5/18/81, focuses on the use of irrigation equipment provided under the project and is based on physical inspection of the various project sites. The Government of Indonesia"s (GOI) management of the project has been very weak. This has adversely affected equipment utilization and has contributed to construction delays and increased costs. Most of the AID-financed equipment was received by the GOI subproject office at Ujung Pandang in South Sulawesi between 2/79-7/79. However, it took the GOI from 4 to 19 months to transport the equipment to the project sites. All of the equipment was delivered except for 19 items of service equipment and some spare parts. Site visits revealed that most of the equipment has not been used thus far. Heavy construction equipment has been leased to local contractors for only about 28% of the time available, and most of the spare parts were still in their shipping containers and had not been properly inventoried. The principal causes of these problems were: (1) a lack of GOI funds to either buy spare parts or to move AID-financed equipment to the project sites; (2) a lack of fully trained GOI personnel; (3) failure to establish and operate workshops or to institute a spare parts management system; and (4) failure to establish an effective equipment leasing program. Auditors recommend that USAID/I establish standards for equipment utilization. If those standards are not met, the GOI should be required to refund the cost of the equipment to A.I.D. The GOI should provide funding and USAID/I should provide at least one long-term technician to assist project personnel to establish a workshop and implement a spare parts management system. On-job training should be provided in equipment maintenance, repair, and operation. Furthermore, USAID/I should require the GOI to locate missing equipment and repair manuals.