Mid-Term Review

JBIC ODA Loan project Mid-Term Review 2006

Evaluator: Asahi Ltd. (Teruo Kawakami)Time of Mid-Term Review Field Survey: January 2007
Project Title: The Republic of the Philippines “The Laoag River Basin Flood Control and Sabo Project” (PH-P224)[Loan Outline]
Loan Amount / Contract Approved Amount / Disbursed Amount: 6,309 million yen / 5,778 million yen / 2,356 million yen (As of the end of September 2006)
Loan Agreement: May 2001 (5 years after L/A signing)
Original Project Completion Date: September 2006
Revised Project Completion Date: June 2008
Loan Expiry Date: September 2009
Executing Agency: Department of Public Works and Highways (DPWH)
Operation and Maintenance Agency: Department of Public Works and Highways (DPWH)
Selection Criteria for Mid-Term Review: Specific Subject (erosion, sediment and flood control)[Project Objective]
The objective of this project is to 1) construct Sabo dams, 2) construct and repair dikes, and 3) construct spur dikes, 4) construct groundsills and 5) construct sluiceways on the
Laoag River in the province of Ilocos Norte in northern Luzon for the purpose of addressing 25-year flood probability and reducing flood damage in the Laoag River drainage
basin, thereby improving the region's living environment and sanitation, and contributing to its socioeconomic development.
Consultant: Pacific Consultants International (Japan)
Contractor: Package 1: HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. (Korea); Package 2: Toyo Construction Co., Ltd. (Japan)1Mid-Term Review[Mid-Term Review Result]
Item[Relevance]

Ex-ante Evaluation (at the time of appraisal)(March 2001)(1) National policy level
・The Medium-Term Development Plan (1999–2004) had the aim ofcontinuing the improvement of flood control facilities mainly in Metro
Manila and industrial and agricultural areas in flood prone regions while
promoting comprehensive watershed management including forestation.

Result of mid-term review and ex-post evaluation results as estimatedat the time of mid-term review(1) National policy level
・ In the Medium-Term Development Plan (2004–2010), reduction ofnatural disaster damage is listed among the five strategies in theenvironment and natural resource sector with the goal of constructing
flood control and drainage facilities in all areas affected by flood anddrift sand. Therefore, this project remains consistent with the national
plan of the Philippines.

(2) Policy level・At the time of appraisal, no comprehensive water control/erosion control
plan was in place.
This project is based on the Master Plan for the “Laoag River Basin
Flood Control and Sabo Project” developed by JICA in December 1997
and the feasibility study (F/S).

(2) Policy level
・ In the Regional Development Plan for Region I (2004–2010), major
flood management projects are mentioned as measures to be promoted
to prevent flood in the growth center of this region and agriculturalareas.
・ Pursuant to Executive Order No. 510 issued in March 5, 2006, theRiver Basin Control Office was established under the Department ofEnvironment and Natural Resources (DENR). This office is
responsible for: 1) working jointly with DPWH to examine
appropriateness of water control projects on major rivers; 2) working
jointly with DPWH and the National Disaster Coordinating Council(NDCC) to develop a national water control master plan; and 3)
examining appropriateness of reforestation plans and setting orders ofpriority. These tasks are intended to realize comprehensive
administration composed of the structure portion such as water control
facilities and the non-structure portion such as reforestation. The
coordination with DPWH and DENR is an issue to be addressed for the
future.

(3)(3) Planning level

Planning level2

Mid-Term Review

Effectiveness (Impact)・In the Laoag River Basin that suffers damage from flood and landslidedisasters almost every year, it was urgently needed to implement
comprehensive and drastic measures to control flood including theconstruction of the Sabo dams to prevent inflow of sediments from the
upstream of the river and to improve rivers that join the Laoag River.

・ After the signing of the ODA Loan Agreement in 2001, the Laoag
River Basin was hit by flood and landslide disasters caused by major
typhoons such as Igme (June 2004) and Labuyo (September 2005)(Note 1) and therefore this project remains necessary.
・ On the other hand, due to the topographic changes, large-scale
sediment deposition, and destruction of the structures that have been
constructed caused by those major typhoons, additional works became
necessary. The additional budget is now submitted for approval. The
office in charge of the preliminary review (the National Economic andDevelopment Authority (NEDA)) demands, in light of theestablishment of the above-mentioned River Basin Control Office, theexecuting agency to cooperate with DENR and local governments as acondition for the recommendation to ICC concerning approval of theadditional budget, saying that the water control structures that areplanned to be constructed would not work unless the issue of forest
loss in the hinterland, which is the root cause of incessant floods, isaddressed. (Based on this advice, the executing agency is requesting
the local government (Ilocos Norte Provincial Government) to
exchange a Memorandum of Agreement (MOA) on the cooperation inwater control administration. However, there are issues to be solved
prior to executing MOA, such as the establishment of the structure tocooperate with municipalities in the basin, allocation of necessary
personnel, budget determination, and cooperation with DENR.

(1) Operation and effect indicators
1. Quantitative effects
1) Monitoring indicators
On extending the ODA Loan, JBIC and DPWH agreed that DPWH willconduct monitoring of the operation and effect indicators after the projectcompletion shown in the table below, which was prepared based on thevalues present in the feasibility study (1996).
3(1) Operation and effect indicators
1. Quantitative effects
1) Proposed operation and effect indicators for monitoring
The executing agency indicated an intention to modify the effect indictors
among the indicators subject to monitoring after the project completion as
follows to reflect the price rise, increases in population and income,increase in buildings, etc. during the 1996–2006 period (reply from theMid-Term Review

Scale of Flood

Operation
Indicators

EffectIndicators

Peak Flow Rate(m³/s)
Peak
Water
Level
(EL.m)
AmountofDamage(million pesos)
NumberofHousesDamaged10-year Probable
Flood
At
After
Present Project
8,900
9.06
559
10,000

8,900
9.06
20
1,750

25-year Probable
Flood
At
After
Present Project
10,9009.90
696
12,100executing agency to the inquiry).
As mentioned in the sections of relevance and efficiency, the executing
agency is currently applying for approval of the government for the
additional budget. The values for after the project are estimated on theassumption that the additional budget will be approved as it is and the
project will be implemented as planned.

10,900
Scale
Flood

9.90
31
2,270

(Note)・ In this project, operation indicators of peak flow and water level are
not expected to change after the project completion because 1) flood
control facilities such as dams do not exist, and 2) upstream
inundation is not included in the assumption.
・ In this project, necessary repair and construction works are carriedout only in the priority areas (urban areas). Therefore, the damage
caused by a 25-year probable flood would not be reduced to zero.
3) EIRR
16.7%
Costs: Cost of river repair and construction of river facilities, increase in
the operation and maintenance cost resulted from the implementation of
the project
Benefits: Reduction in the estimated total amount of damage (amount of
4

Operation
Indicators

EffectIndicators

of

Peak
Flow
Rate
(m³/s)
Peak
Water
Level
(EL.m)
AmountofDamage(million
pesos)
NumberofHousesDamaged10-year Probable
Flood
At
After
Present Project

25-yearFlood
At
Present

Probable
After
Project

8,900

8,900

10,90010,900

9.06

9.06

9.90

9.90

1,180
13,000

42
2,280

1,466
15,400652,9002) EIRR
・The NEDA Secretariat calculated EIRR after the execution of theadditional budget at 14.8%.
Costs: Cost of river improvement and construction of river facilities,
increase in the operation and maintenance cost resulted from theimplementation of the projectMid-Term Review

damage caused by a smaller flow rate than that of a 25-year probableflood)

Benefits: Reduction in the amount of flood damage, prevention of landloss, recovery of land utilization, negative benefits, and the benefits
brought by the restoration of irrigation facilities in the project target
region2. Qualitative effects
Flood damage will be reduced and the living environment in the target
region will improve. Regional socioeconomic development will be
accelerated.

2. Qualitative effects
1) After the completion of the project, reduction in the flood damage is
expected to help substantially decrease diarrhea, etc. transmitted throughor caused by water, and the epidemic mortality and morbidity rates of
local residents including infants are expected to decline. In the City of
Laoag adjacent to the Laoag River, the construction of dikes will alleviate
the fear of flood damage and as a consequence economic activities will be
activated with the construction of houses and commercial facilities.
2) Agricultural production increase effect (impact)
As an effect other than the reduction in the amount of damage included in
the monitoring indicators, when the Ilocos Norte irrigation system isrestored with the completion of the project, agricultural production is
expected to increase by 660 million pesos on an annual basis as a result of
the construction of Sabo dams and the irrigation diversion weir. However,the cost of restoration of irrigation facilities is not covered by theadditional budget under review this time. This effect will be generated if
irrigation facilities are restored by NIA in the near future. (The damage
caused by typhoon Igme to the irrigation facilities to be covered by suchproject includes sediment deposition in irrigation canals over 14 km in
length and destruction of 5 intake dams (headworks). If DPWH carries out
the restoration work, it would cost 508 million pesos. The intake dam of
the Madogaon River is half destroyed and the irrigation canal near thedam is also damaged. They need to be addressed urgently in order torealize an increase in agricultural production by the restoration of theirrigation system which makes a large part of the effects of this project.）5Mid-Term Review(2) Factors which may influence the effectiveness and impact
・Land acquisition
An area of land of 1,527,000 m2 is planned to be acquired and 1,160,000
m2 (76.0%) has already been acquired (payment is made or donated). Of
the remaining 367,000 m2, payment has not been made for 302,000 m2
and owners are unknown for 65,000 m2 (as of December 2006). Payment
has not been made because of the delay in the submission of necessary tax
documents. While continuing to demand submission, the executing
agency is planning to obtain confirmation of entry permission if
necessary. In any case, there is no problem that may cause delay in theimplementation of the project.
・Progress in resident relocation
Resident relocation is required for 65 households. Negotiations have been
made with 64 households and compensation has been paid to 63
households. As a result of negotiations for compensation with theexecuting agency, those residents received monetary compensation andrelocated from where they were living on their own. In this project, thoseresidents who need to be relocated chose to move from their living sites
on their own and therefore there is no need to secure the substitute land.
(As of June 2007, compensation has been made to all residents subject torelocation and resident relocation has been completed.)・Approval of National Commission on Indigenous Peoples (NCIP) for theconstruction of Sabo dams (5 sites)
NCIP determined that dam construction will have no impact on
indigenous people in Labugaon, Solosona, and Madongan of the fiveproposed sites. As for Cura and Papa, documents certifying that the
project is implemented according to the procedures specified by NCIP
have been received. There will be no hindrance in carrying out the project6

Mid-Term Review

in the future.
・Compliance of EMP (Environmental Management Plan) required under
ECC
Mostly complied(3) Factors which may influence the sustainability
・As mentioned in the section on relevance, with the aim of realizing
comprehensive water control administration, the River Basin Control
Office was established in DENR to engage in comprehensive
implementation of flood control measures such as the construction ofwater control structures under the jurisdiction of DPWH and forestationand other works under the jurisdiction of DENR not involving structures
such as forestation. In this regard, NEDA requested DPWH to cooperatewith DENR and local governments in flood control works other than theconstruction of structures as a condition for the review of the additional
budget and also advised to seek cooperation of local governments insecuring the budget for the maintenance of water control facilities. Also,
as the diversion weirs and drainage weirs constructed at 26 sites under the
project are scattered over the basins of the Laoag River and its branches,
establishment of the system for their operation and maintenance such as
emergency opening and closing in the event of flood is being considered
including transferring the operation and maintenance function from
DPWH to local governments as well as seeking understanding andcooperation of local residents. It is desirable that such system will beestablished and reinforced at an early date.
Informationreference[Efficiency]

for(1) Outputs
・ Civil engineering
1. Construction of Sabo dams (5)(1) Outputs
・Although there is no change in the outputs, design change wasnecessitated due to the large-scale sediment deposition and changes in7Mid-Term Review

・

2. River improvement at the lower reaches (construction and repairof dikes over approximately 13 km in total)
3. Improvement of alluvial fan rivers in the middle reaches(construction and repair of dikes over approximately 40 km in total,
construction of spur dikes)

the river conditions caused by major typhoons, as already mentioned,
and additional works are needed (extension of open levees,
strengthening of the dike slopes and consolidation of foundation, etc.).
The additional budget is being submitted for approval as mentioned in
the section of relevance.

Amount of consulting services estimated at the time of ex-anteevaluation: 558 M/M

・Amount of consulting services necessary for completion as estimated at
the time of the mid-term review: 642 M/M (115% of the planned
amount)This increase is caused by the delay in project implementation and theincrease in the period of construction supervision for the additional
works that became necessary due to the damage from typhoons.

(2) Project period
May 2001 – September 2006 (65 months)(2) Project period
May 2001 – June 2008 (scheduled) (85 months) (131% of the planned
period)The delay is mainly caused by the delay in the procurement procedure(process for selecting contractors) and additional works that became
necessary due to the damage from major typhoons.

(3) Project cost
6,309 million yen（2,253 million pesos）
Total project cost approved by the Government of the Philippines: 3,004
million pesos (ODA Loan portion: 2,253 million pesos（6,309 million yen(1 peso＝2.8 yen); Philippines Government’s: 751 million pesos）

8(3) Project cost
The executing agency is now applying for approval for the additional
budget of 1,828 million pesos over the total project cost. It includes 1,717
million pesos for the construction cost, 124 million pesos for consulting
services, 30 million pesos for land acquisition, 10 million pesos for the
management cost, and 61 million pesos for the contingency for inflation,less the reduced amount of the physical contingency 116 million pesos(according to calculation by NEDA. The total of each item is not equal to
the total amount because of rounding errors. ) However, ICC Secretariatof NEDA issued a recommendation that DPWH should promoteMid-Term Review

cooperation with DENR and the local government, saying that flood
damage in this region should be reduced not only by carrying out theworks covered by the additional budget but also by establishingcomprehensive measures in the flood control project, and also advised
DPWH to promote cooperation with local governments (11 bodies
including the province, cities and towns) in the operation and maintenanceof flood control facilities after completed.
Lessons Learned andRecommendations

・・

Indicators set for use attimeof
ex-postevaluation

For proper and sustainable operation and maintenance of water control facilities scattering over a wide area, it is essential to establish a structure
for cooperation among DPWH, DENR and local governments (state, city, town and village). Such system needs to be established as soon as
possible.
In connection with the foregoing, it is important to implement reforestation of the hinterland as part of the non-structure portion of thecomprehensive administration of water control which is to be realized, in order to ensure sustainability of water control facilities constructed under
this project and generate further effects of the project. Therefore, the executing agency is advised to consult with DENR, which is the department
in charge, and local governments at an early date and develop an implementation plan.

Operation indicators:
Peak flow rate (m³/s)
Peak water level (EL.m)
Effect indicators
Amount of damage (million pesos)
Number of houses damaged

Operation indicators:
Peak flow rate (m³/s)
Peak water level (EL.m)
Effect indicators
Amount of damage (million pesos)
Number of houses damaged(Note 1) Damage from typhoons
Flood frequency
Flood duration
Amount of damage to agriculture,irrigation facilities, bridges, road,2001 (Typhoon Felia)
15 years
12 hours
1.5 billion pesos

2002
No record
No record
No record

92003
No record
No record
No record

2004 (Typhoon Igme)
20 years
48 hours
2.48 billion pesos

2005 (Typhoon Labuyo)
12 years
24 hours
109.5 million pesos

Mid-Term Review

etc.
Damage to houses

Flood casualties

767 completely destroyed, 2702
half destroyed, 5471 submerged

No record

No record

1 died, 2 missing, 14 injured

No record

No record

10

38 completely destroyed,
151 half destroyed, 14197
submerged, 797 isolated
No record

No record

No record