Watershed Management Planning and Project Formulation

This chapter explains about, the steps in watershed planning and implementation process, different stages of project formulation and evaluate economic viability of watershed management projects

1. Integrated River Basin Management EiT -M, School of Civil Engineerin g, IEC May , 202 5

2. 5. Watershed Management Planning and Project Formulation Contents What is a watershed management plan? Why is watershed management planning important? Watershed management planning process Steps in the watershed management planning and implementation process Watershed management project formulation Economic evaluation of watershed management projects

3. Objective At the end of the chapter, students will be able to: Explain the steps in watershed planning and implementation process Explain different stages of project formulation Evaluate economic viability of watershed management projects

4. What is a watershed management plan? A watershed management plan is a document which specifies the goals, policies and strategies for the management of the watershed. Goals: Statements that describe the desired future watershed condition toward which programs, activities, and decisions are directed. Example: Ensure sustainable storage and retention within the watershed Policies: The strategic steps, or intermediate ends, required to reach the watershed’s goals. Example: The watershed’s wetlands shall be managed and restored to preserve and enhance their functional values, as identified through a comprehensive wetland inventory and functional assessment. Strategies: The specific actions by which the community will achieve its goals Example: Complete a wetland inventory and assess the values of the wetland functions for each of the watersheds

5. Why is watershed management planning important? Careful watershed management planning: Protect the physical, chemical, and biological components of the watershed Restore those that have already been degraded Provides a context for integration , by using practical, tangible management units that people understand Yields better management by generating ecologically based, innovative, cost-effective solutions

6. Watershed management planning process Although each watershed management plan emphasizes different issues and reflects unique goals and management strategies , some common features are included in every watershed management planning process. The watershed management planning process is: Iterative, Holistic, Geographically defined, Integrated, and Collaborative.

7. Watershed management planning process Watershed management planning is an iterative and adaptive process The processes involved in watershed assessment, planning, and management are iterative and that targeted actions might not result in complete success during the first or second cycle. It is expected, however, that through adjustments made during the management cycles , water quality improvements can be documented and continuous progress toward attaining water quality standards can be achieved. Watershed plans should address all the sources and causes of water body impairments and threats ; that is, the plans should address not only the sources of the immediate water quality impairment but also any pollutants and sources of pollutants that need to be addressed to ensure the long-term health of the watershed.

8. Watershed management planning process Watershed management planning is a holistic process Holistic watershed management plans provide the most technically sound and economically efficient means of addressing water quality problems and is strengthened through the involvement of stakeholders that might have broader concerns than solely attainment of water quality standards (e.g., water supply, aesthetics). A holistic approach addresses all the beneficial uses of a water body , the criteria needed to protect the use , and the strategies required to restore water quality or prevent degradation . This approach will help to expedite cooperative, integrated water resource planning and successful implementation of needed management, thereby facilitating the restoration of water quality.

9. Watershed management planning process Watershed management planning is geographically defined A watershed management plan should address a geographic area large enough to ensure that implementing the plan will address all the major source causes and of impairments and threats to the water body under review. Although there is no rigorous definition or delineation of this concept, the general intent is to avoid a focus on single water body segments or other narrowly defined areas that do not provide an opportunity for addressing watershed stressors in a rational, efficient, and economical manner. At the same time, the scale should not be so large that it hampers the ability to conduct detailed analyses or minimizes the probability of involvement of key stakeholders and successful implementation. If you select a scale that is too broad , you might be able only to conduct cursory assessments and will not be able to accurately link the impacts back to the sources and causes .

10. Watershed management planning process Watershed management planning should be integrated with other planning efforts It is likely that many federal, state, tribal, and local planning efforts are occurring simultaneously with your watershed management planning effort. At a minimum, you should be aware of these programs; ideally, you should integrate them into your watershed management planning effort through stakeholder participation , data sharing , and implementation of management measures. You might also want to include staff from these programs as partners in developing your watershed management plan. This approach can help in gaining additional technical expertise , leveraging resources , and sharing responsibilities for implementation.

11. Watershed management planning process Watershed management planning is a collaborative and participatory process One of the key characteristics of the watershed management planning process is that it is participatory . Different researches showed that implementation of a watershed management plan has the greatest chance of success when stakeholders are brought into the process at the very beginning of the watershed management planning effort. This finding is supported by the fact that implementation of the plan usually rests with members of the community , and if they are involved up front and see that their concerns are addressed, they will be more likely to participate in developing management options and supporting plan implementation.

12. Steps in the watershed planning and implementation process The general steps one would take to improve management of a watershed for any number of purposes are: Build partnerships Characterize our watershed Finalize goals and identify solutions Design an implementation program Implement the watershed management plan Measure progress and make adjustments

13. Steps in the watershed planning and implementation process Build partnerships Partnerships are key to effective watershed management planning. Through a partnership, different people and organizations work together to address common interests and concerns. Developing a watershed management plan is not easy, but a partnership often has improved chances for success because key parties are involved from the beginning. Partnerships often result in: More efficient use of financial resources A spirit of sharing and cooperation More equitable assignment of management responsibilities based on relative impacts to watershed resources More creative and acceptable ways to protect natural resources

14. Steps in the watershed planning and implementation process Characterize the watershed After establishing our partnerships, the next step in our watershed management planning effort will be to characterize the watershed so that you can get a better understanding of the impacts in the watershed, the causes and sources of the impacts and to quantify the impacts. After we characterize the watershed, we will then have the foundation needed to identify and select management strategies to bring about improvements. To characterize the watershed: Gather existing data and create watershed inventory Identify data gaps and collect additional data if needed Analyze data Identify causes and sources of the problem that need to be controlled Quantify the impact

15. Steps in the watershed planning and implementation process Finalize goals and identify solutions Setting goals and management objectives : now that you have characterized and quantified the problems in the watershed, you are to refine the goals and establish more detailed objectives and targets that will guide developing and implementing a management strategy Setting indicators and targets: once you have established specific management objectives, you will develop environmental indicators and numeric targets to quantitatively evaluate whether you are meeting your objectives or not Determining load reductions needed: after you have set indicators and targets, the next step is to determine load reductions needed to meet those targets. Identify critical areas and management strategies: using the information you have collected; you can locate critical areas where management measures will likely achieve the greatest load reductions Selecting management strategies: after determining loading targets to meet your objectives, you will need to identify management practices to help meet those targets

16. Steps in the watershed planning and implementation process Design an implementation program Designing our implementation program and assembling the watershed plan generates several of the basic components needed for effective watershed management plans. In designing an implementation program, Develop information/education component Establish an implementation schedule Establish milestones Develop criteria to measure progress towards identified goals Developing a monitoring component Develop evaluation framework Identify technical and financial assistance needed to implement the plan Assign the responsibility for reviewing and revising the plan

17. Steps in the watershed planning and implementation process Implement the watershed management plan Now that we have our plan on paper, we can get started implementing it. The process of implementing our watershed plan will consist of four major phases : Creating an organizational structure Preparing work plans Implementing activities Sharing results When the implementation phase begins, the dynamic of our watershed group, and stakeholders’ level of participation might change. It is important to take time at this point to consider creating a strong organizational structure.

18. Steps in the watershed planning and implementation process Measure progress and make adjustments Once we have started to implement our watershed plan, we need to monitor the management program to ensure smooth implementation and to measure progress toward meeting goals The activities that need to be performed during measuring progress and making adjustments are: Review and evaluate information Share results Prepare annual work plans Report back to stakeholders and others Make adjustments to program

19. Watershed management project formulation What is project formulation? Project formulation can be defined as taking a first look carefully and critically at the project idea and carefully weighing its various components and analyzing with the assistance of specialists or consultants. It is assessment of the various aspects of an investment proposition. It is an important stage in the pre-investment phase.

20. Watershed management project formulation Stages of project formulation Feasibility analysis Techno-economic analysis Project design and network analysis Input analysis Financial analysis Cost-benefit analysis Pre-investment analysis

21. Watershed management project formulation Feasibility analysis First stage in project formulation. Examination to see whether to go in for a detailed investment proposal or not. Screening for internal and external constraints. Conclusion could be: The project idea seems to be feasible The project idea is not a feasible one Unable to arrive at a conclusion for want of adequate data

22. Watershed management project formulation Techno-economic analysis Screens the idea to estimate potential of the demand for goods/services. Choice of optimal technology. This analysis gives the project a platform for preparation of detailed project design. Project design and network analysis It is the heart of the project entity. It defines the sequence of events of the project. Time is allocated for each activity. It is presented in a form of a network drawing. It helps to identify project inputs, finance needed and cost-benefit profile of the project.

23. Watershed management project formulation Input analysis It assesses the input requirements during the construction and operation of the project. It defines the inputs required for each activity. Inputs include materials, human resources. It evaluates the feasibility of the project from the point of view of the availability of necessary resources. This aids in assessing the project cost.

24. Watershed management project formulation Financial analysis It involves estimating the project costs, operating cost and fund requirements. It helps in comparing various project proposals on a common scale. Analytical tools used are discounted cash flow, cost-volume-profit relationship and ratio analysis. Investment decisions involve commitment of resources in future, with a long time horizon. It needs caution and foresight in developing financial forecasts. Cost- benefit analysis The overall worth of a project is considered. The project design forms the basis of evaluation. It considers costs that all entities have to bear and the benefit connected to it.

25. Watershed management project formulation Pre-investment analysis The results obtained in previous stages are consolidated to arrive at clear conclusions. Helps the project-sponsoring body, the project-implementing body and the external consulting agencies to accept/reject the proposal. Project report It is a concise copy of detailed analysis done for the project. An entrepreneur/expert prepares the report before the investment in project is done. The report assesses the demand for proposed product/service, works out cost of investment and profitability on this investment. It acts as an instrument to convince investors to invest in the project.

26. Watershed management project formulation Project report A project report gives information on the following: Economic aspects – present market, scope for growth, justification for investment. Technical aspects – technology, machinery, and equipment needed. Financial aspects – total investment needed, entrepreneur’s contribution, cost of capital and return on capital. Production aspects – product details, justification for the choice of product, export worthiness. Managerial aspects – qualifications, experience of people needed for managerial posts.

27. Watershed management project formulation Contents of a project report Objectives and scope of the report. Product characteristics (product design, specifications, quality standards, uses and applications). Market position and trends (current capacity for production, potential demand, export prospects, trends in import-export, price structure etc.). Raw materials (types, quality, sources, price). Manufacturing (process, production schedule, technique used. Plant and machinery (types, infrastructure support, cost). Land and building (requirement, building construction schedule, choice of location, cost). Financial implications (capital structure, fixed and working capital investment, project cost, profitability). Marketing channels (trade practices, marketing and advertising strategy). Personnel (requirement of staff, skilled-unskilled labor, salary and wage payment, qualifications, experience)

28. Project cost formulation in micro watershed Watershed action plan is incomplete until the costing of each activity is completed. For costing of any structure, we have to calculate the quantity and information regarding the current rates. Cost is calculated by following formula: The total cost required for the watershed management intervention is determined after the costs of the different activities of interventions are estimated.  

29. Project cost formulation in micro watershed Example Contour bund is proposed in 65ha land at a certain area. Distance between two contour bund rows is 50 m. The soil type is soft and hard soil. The X- section of contour bund is as below. Assuming rate as 55 Birr/m 3 for soft soil and 60 Birr/m 3 for hard soil, find the cost of the Contour bund.

30. Economic evaluation of watershed management projects Economic evaluation of watershed management projects is essential to determine their consequential effects on social welfare needs and environmental enhancements. Watershed management projects also generate productive, protective, social and employment generation benefits. A watershed project is considered economically feasible if the total benefits that result from the project exceed those which would accrue without the project by an amount in excess of the project cost. Economic feasibility is contingent on technical feasibility because a project incapable of producing the desired output is not going to produce the benefit needed for its justification. The test of social feasibility is equally important components of overall economic evaluation of the project. Social feasibility of watershed projects is determined by assessing the change in daily lives of the beneficiaries and evaluating the willingness of the stakeholders .

31. Economic evaluation of watershed management projects Benefits Benefits of watershed management projects vary from many kinds of effects . A systematic procedure is required to make sure that each effect is considered and evaluated. A variety of terminologies have been used by planners and economists to describe individual project consequences. Broadly, the benefits are classified into tangible and intangible benefits. Tangible benefits results from the consequences to private parties, which can be assigned a monetary value . The benefits obtained from project-produced goods and services denote primary benefits and these could be of different kinds ( direct, indirect, land-enhancement, protective etc.) Direct benefits accrue by putting project output to its intended use . They may consist of increase in farm income resulting from application of irrigation water, reduction in physical damage on fertile lands (as a result of flood protection and sand casting) etc.

32. Economic evaluation of watershed management projects Tangible benefits Indirect benefits result as individuals realize the economic consequence of technological external effects. The effects may result either from the production of project output or from its use by others. For example, Output intended for one purpose (storage of harvested rainwater for irrigation) may also provide other beneficial effects (fish production). Protection of uplands from irreversible losses through erosion may benefit community of extra revenue and fodder from protected uplands. Land enhancement benefits result, where more productive land uses is made possible by the watershed management project and are distinguished from direct benefits to the land use, which would prevail without the project.

33. Economic evaluation of watershed management projects Intangible benefits Describe consequences, which cannot be assigned a monetary value but should be considered while evaluating a project. Examples of such benefits of water harvesting structures may consist of environmental restoration, ecological diversity etc. Costs Costs of the project generally include cost of construction, operation and maintenance of activities associated with watershed projects like cost of storage (dam, spillway, pond, etc.), cost of soil conservation structures (contour bunding, terraces, half-moon terraces), cost of water distribution system , etc.

34. Economic evaluation of watershed management projects Mathematics of economic analysis Economic analysis consists of the following steps: Estimate or predict physical consequences (i.e. benefits and costs) resulting from each alternative (i.e. watershed management activities) including that of doing nothing. Assign a monetary value on each physical consequence based on market price. Select a discount rate to convert the prediction time of monetary values into an equivalent single number. Select an appropriate time horizon of the project. Compare the alternatives for selecting a feasible project and in case of post project evaluation compare the cost and benefits with the bench mark data.