Republika ng Pilipinas Department of Agriculture PAMBANSANG PANGASIWAAN NG PATUBIG (National Irrigation Administration) EDSA, Diliman, Quezon City

IRRIGATION MANAGEMENT TRANSFER POLICY AND IMPLEMENTING GUIDELINES

Second Edition -

April 2011

NIA IMT POLICY AND IMPLEMENTING GUIDELINES

Second Edition TABLE OF CONTENTS Topics NIA POLICY ON IRRIGATION MANAGEMENT TRANSFER I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV. XVI. THE NIA IRRIGATION MANAGEMENT TRANSFER (IMT) POLICY RATIONALE OF THE NIA IMT PROGRAM LEGAL BASIS AND EXISTING POLICY ON IMT THE IMT PROGRAM AND ITS OBJECTIVES COMPONENTS OF THE IMT PROGRAM THE IMT PROCESS COVERAGE IRRIGATION MANAGEMENT TRANSFER CONTRACTS AND RESPONSIBILITIES COMPENSATION, PAYMENT SCHEDULE AND PAYMENT CRITERIA DISPUTE/GRIEVANCE RESOLUTION CONTRACT SUSPENSION MONITORING AND EVALUATION SYSTEM IA O&M SEED FUND ALLOCATION OF IA INCOME FROM IMT FINANCING THE IMT PROGRAM INSTITUTIONAL ARRANGEMENT DESCRIPTION OF THE DIFFERENT IMT CONTRACT ARRANGEMENTS IRRIGATION MANAGEMENT TRANSFER (IMT) IMPLEMENTING GUIDELINES I. THE NIA IMT POLICY II. III. IV. V. VI. VII. VIII. IX. X. RATIONALE OF THE NIA IMT PROGRAM LEGAL BASIS AND EXISTING POLICY ON IMT THE IMT PROGRAM AND ITS OBJECTIVES COMPONENTS OF THE IMT PROGRAM THE IMT PROCESS COVERAGE IRRIGATION MANAGEMENT TRANSFER CONTRACTS AND RESPONSIBILITIES COMPENSATION, PAYMENT SCHEDULE AND PAYMENT CRITERIA DISPUTE/GRIEVANCE RESOLUTION 1 1 2 2 3 3 4 4 5 6 6 7 7 7 7 8 Pages

ANNEXES Annex 1 Annex 2 9 12 12 12 13 14 15 20 23 23 26 27

Topics XI. XII. XIII. XIV. XV. CONTRACT SUSPENSION MONITORING AND EVALUATION SYSTEM IA O&M SEED FUND ALLOCATION OF IA INCOME FROM IMT FINANCING THE IMT PROGRAM

Pages 27 28 29 29 30 31 33 36 46 46 49 52 55 57 57 59 61 62 63 63 63 63 63 64 73 74 75

Annex 3 Annex 4 Annex 5

XVI. INSTITUTIONAL ARRANGEMENT MEMORANDUM OF UNDERSTANDING BY AND BETWEEN THE NATIONAL IRRIGATION ADMINISTRATION AND IRRIGATORS ASSOCIATION IRRIGATION MANAGEMENT TRANSFER (IMT) CONTRACT NIA AND IA IMT RESPONSIBILITIES Model 1 Model 2 Model 3 Model 4 IA COMPENSATION AND NIA-IA ISF CURRENT ACCOUNT COLLECTION SHARING SCHEME Model 1 Model 2 Model 3 Model 4

Annex 6

Annex 7

NIA-IA ISF BACK ACCOUNT COLLECTION SHARING SCHEME Model 1 Model 2 Model 3 Model 4

Annex 8 Table 1 Table 2 Table 3

NIA AND IA IMT PERFORMANCE EVALUATION SYSTEM NIA IMT PERFORMANCE EVALUATION REPORT IA IMT PERFORMANCE EVALUATION REPORT INSPECTION REPORT ON MAINTENANCE OF IRRIGATION FACILITIES AND STRUCTURES UNDER IA RESPONSIBILITY

ii

Republika ng Pilipinas Department of Agriculture PAMBANSANG PANGASIWAAN NG PATUBIG (National Irrigation Administration) EDSA, Diliman, Quezon City

NIA POLICY ON IRRIGATION MANAGEMENT TRANSFER1 Second Edition April 2011

I. THE NIA IRRIGATION MANAGEMENT TRANSFER (IMT) POLICY

Irrigation Management Transfer (IMT) refers to the transfer from the NIA, the management, operation and maintenance of the National Irrigation Systems (NIS) to Irrigators Associations (IAs), wholly or partially, depending on the size of the NIS and capacity of the IA. Pursuant to the NIA Charter and relevant legislations cited in Section III of this document: IT IS THE POLICY OF THE NATIONAL IRRIGATION ADMINISTRATION TO PURSUE IMPROVED IRRIGATION SYSTEM PERFORMANCE, IRRIGATION SERVICE, AND ATTAIN FINANCIAL SUSTAINABILITY IN THE OPERATION AND MAINTENANCE OF THE NATIONAL IRRIGATION SYSTEMS (NIS) THROUGH THE TRANSFER OF NIS MANAGEMENT, PARTIALLY OR FULLY, TO DULY ORGANIZED IRRIGATORS ASSOCIATIONS (IAS). A summary description of the different IMT arrangements is attached as Annex 1. The IMT Implementation Guideline which describes in detail the implementation of the IMT Policy is attached as Annex 2, supplemented by Annexes 3, 4, 5, 6, 7, and 8. The first edition of the IMT policy was issued as MC 47 s. of 2008. However, during the National and Regional IMT Policy Orientation that were conducted in the later part of 2009 to early 2010, there were issues, concerns and suggestions raised for the improvement of the IMT Policy and its Implementation Guidelines. Such were consolidated and further discussed by concerned Units of the NIA Central Office, and was the subject of a Workshop with representatives from the RIOs, IMOs, IAs and FIAs in August 2010. Based on this, the second edition of the IMT Policy and Implementation Guidelines were formulated. It is hoped that the second edition will settle all the issues and clarify the ambiguities and vague areas seen and experienced by the field offices on the implementation of the IMT policy. II. RATIONALE OF THE NIA IMT PROGRAM

NIA started Participatory Irrigation Management (PIM) in National Irrigation Systems (NIS) in the early 1980s, following the successful formulation, testing and nationwide adoption of IA organization and participatory irrigation development in Communal Irrigation Systems (CIS). The IMT in NIA evolved from the earlier PIM even in the absence of a clear and articulated policy on IMT. IMT contract arrangements that evolved, however, somewhat differed from one region to another. These differences are on ISF sharing arrangement, payment scheme for IA share and disposition of IA share among others. Due to this the NIA decided to issue a written unified IMT Policy to avoid confusion and attain a more effective transfer of NIS management to duly organized IAs.

The IMT Policy was presented to and approved by the NIA Board of Directors on 26 May 2008 th during its 845 Regular Board Meeting, as evidenced by the NIA Board of DirectorsResolution No. 7497-08 Series of 2008. The first edition was issued as Mc 47 s. 2008 on 29 September 2008

The reasons and incentives for transferring management of NISs to IAs are: NIA point of view: a) b) c) d) Mandate of its charter and other relevant Philippine Laws; Expenses on operation and maintenance (O&M) exceed revenue from irrigation service fee (ISF) collections; There is a need to improve NIS operation performance in terms of equitable water delivery and distribution, narrow the gap between irrigated and service area, and increase ISF collection efficiency; and Improvement of NIS performance needs the joint effort of NIA and farmers.

IA point of view: a) b) c) d) III. Opportunity to develop their capacity for organizational and system management; Better chance for improvement of NIS performance as the IA directly manage O&M; Opportunity to build-up IA capital; and Equitable opportunity for higher agricultural production and income for IA members.

LEGAL BASIS AND EXISTING POLICY ON IMT

RA 3601 of 1963, the NIA Charter, as amended by PD 552 and PD 1701 authorizes NIA to delegate the partial or full management of national irrigation systems to duly organized cooperatives or associations RA 7607 of 1992, the Magna Carta of Small Farmers mandates the government to encourage small farmers to join or form irrigators associations and promote participation of farmers to develop their capabilities to eventually assume the operation and maintenance of irrigation systems and the responsibility of collecting fees from the individual members and remitting an amount to the NIA. RA 8435 of 1997, the Agriculture and Fisheries Modernization Act (AFMA) mandates NIA to gradually turn over the operation and maintenance of the National Irrigation System (NIS) secondary canals and on-farm facilities to Irrigators Associations (IAs) . IV. THE IMT PROGRAM AND ITS OBJECTIVES

The program that implements the IMT policy and guidelines shall be called the Irrigation Management Transfer (IMT) Program . The IMT Program supersedes or encompasses all other programs of NIA relating to the organization and development of IAs in the NISs, and the transfer of management functions in the operation and maintenance of NISs from NIA to duly organized IAs. The objectives of the IMT Program are the following: a. b. c. Develop and institutionalize a strong and dynamic partnership between the NIA and the IAs for the delivery of efficient irrigation service to irrigated farmers; Duly organized, registered, functional and self-reliant IAs capable and willing to operate and maintain the NISs, wholly or partially. Improved performance of the NISs and delivery of irrigation service, in terms of equitable water distribution, and timely and reliable water deliveries. Performance indicators are: a) more equitable water distribution, b) better timely and reliable water deliveries, c) higher cropping intensity, and d) higher ISF collection efficiency. 2

d. e.

Higher opportunities to farmers of NISs for better and more profitable agricultural production. Farmers are expected to benefit from better irrigation service in terms of higher yields and farm incomes. Sustainability and financial viability of the operation and maintenance of NISs and consequently the IAs and the NIA. Improved NIS performance triggers better agricultural production and profitability, willingness of farmers to pay ISF, higher ISF collection efficiency and more funds for O&M of NIS, therefore, better maintenance and sustainable operation of NIS, and sustainable inflow of funds or income to IAs and the NIA to support the O&M of NISs.

V.

COMPONENTS OF THE IMT PROGRAM

The five (5) components needed to be addressed by the IMT Program are: a) IA Component which is concerned with the organization and capability development of IAs; b) NIA Personnel Component which addresses the preparation of NIA personnel at all levels of the organization to enable them to perform their roles considering the IMT Program implementation; c) Infrastructure Component which addresses the repair and rehabilitation program developed jointly by NIA and IA to address the identified physical deficiencies of the system; d) Monitoring and Evaluation (M&E) Component. which aims to provide the IA and NIA the needed management tools in assessing achievements on improving the system O&M and IA development; and e) Linkages and Advocacy Component which addresses advocacy activities to other government and non-government organization because the IMT Program needs to be widely disseminated and fully supported by the NIA personnel, IA and relevant agencies to expect a successful implementation of the same. A more detailed discussion of this section is presented in Annex 2. VI. THE IMT PROCESS

The IMT process aims to develop and strengthen the IA to make them capable of recognizing their innate capacity and mobilizing their members to take on the challenge of managing the O&M of the NIS, confidently and sincerely, through informed collective decision of all members. The process has five phases: a) Phase 1 The Preparatory Phase; b) Phase 2 The Mobilization Phase; c) Phase 3 The Participatory Planning Phase; d) Phase 4 The Implementation Phase; and e) Phase 5 The Monitoring and Evaluation Phase. Described in detail in Annex 2, the phases looks at the progressive development of the IA as a group of water users, served and linked together by a common source or supply. In like manner, the process also develops the capacity of the NIA O&M personnel to adapt to the new regime of O&M in NIS, and gradually, adjust their activities to give way to the stronger presence of IA in O&M and provide the needed technical and managerial assistance the IA needs so that it will be able to comply with its contract obligations. If necessary, these Staff will be provided with training to equip them with the necessary skills, knowledge and attitude to plan, implement, monitor and evaluate the IMT Program within their area of jurisdiction. These activities aim to promote: a) common understanding of the NIA IMT Policy and Program from the NIA Central Office to the Irrigation Systems Offices; b) common ownership of the Program; and c) develop the capability of the direct implementors of the program. It must be noted that the milestone to signal the start of the Implementation Phase is the signing of a Memorandum of Understanding (MOU) between the NIA and the IA for the implementation of the physical works identified, agreed and planned during the previous phases and he eventual transfer of O&M responsibilities to the IA under the IMT Program. The template for the MOU is attached as Annex 3.

VII. COVERAGE The IMT Program shall be implemented in all existing National Irrigation Systems (NISs) including those that are under construction. Existing NIS O&M and/or management contracts will be modified to conform to this IMT Policy subject to consultation and mutual agreement between the NIA and the IA, except those under Type III and Stage III Contracts (which cover asset turn-over), unless renegotiated by IAs. VIII. IRRIGATION MANAGEMENT TRANSFER CONTRACTS AND RESPONSIBILITIES There are five basic functions in the management of irrigations systems which will be covered by IMT. These are: 1) operations; 2) maintenance; 3) fund management; 4) enforcement of procedures and resolution of water-related conflicts; and 5) agricultural support services. The first four (4) functions are the ones usually being undertaken by NIA and the fifth function is accomplished through coordination with relevant government and non-government entities. Model Contracts. As mentioned earlier, the general description of the transfer strategies is presented in Annex 1. The detailed NIA and IA responsibilities for each of the transfer strategies are presented in Annex 5. The IMT for NISs shall pursue the IMT contract models described as follows: IMT Contract NIA Responsibility IA Responsibility

Model 1

Model 2

Model 3

Model 4

a) Maintenance of canals (portion of main canals, laterals and other irrigation facilities and structures within the coverage of the IA service area); b) operation activities such as discharge monitoring and preparation of list Manages the entire system but of irrigated and planted area; and c) transfers specific operation and distribution of irrigation service fee (ISF) bills maintenance responsibilities to and campaign for payment. the IA Depending on the capacity and willingness of the IA, ISF collection can be an added responsibility of the IA especially in NISs that have very limited NIA Staff under the NIA rationalized structure. Manages the main system, Management, Operation and Maintenance from the headworks to the head (O&M) of the laterals, sub-laterals, and gates of lateral canals terminal facilities. Management, Operation and Maintenance Manages the headworks and (O&M) of the rest of the system from the portion of main canal up to the junction of the first lateral canal headgate junction of the first lateral canal down to the farm level facilities. This is an headgate expanded form of Model 2. Full management, Operation and Monitoring, evaluation and Maintenance (O&M) of the entire system technical assistance of the IA including the headworks

The preparation of ISF bills is considered for turn-over to the IA in Models 2, 3 and 4 contracts. However, since ISF bill preparation is computerized, unless the IA procure their own computer and have trained personnel to do the job, this responsibility cannot be turned4

over to the IA. Hence, when the IA lacks the equipment and manpower to do ISF bill preparation, this shall be done by the NIA but the cost for such shall be considered as part of the NIA Cost in the determination of the O&M Cost break-even pointand the NIA-IA ISF collection share for Models 2 and 3. For Model 4, the cost of doing this shall be determined and agreed by the NIA and the IA and shall be paid by the IA along with the Irrigation System Rental Fee. This shall be discussed and agreed during the NIA-IA IMT Contract negotiation. The responsibility will be turned-over to the IA once they attain the capability to perform the job and at that time the IA and NIA ISF collection share will be re-negotiated. Other Transfer Options. The NIA shall consider, on a case to case basis, other emerging possibilities on IMT. Such options may include tripartite agreement among NIA, IA and LGU; and/or long-term lease contract; or management by competent third parties. These options are subject to the recommendation of the Head of the responsible organization within NIA that handles the IMT Program and approval of the Administrator or the Board of Directors. Contract Negotiation. To be eligible to negotiate for any IMT Contract, the IA must pass the IA IMT Contract Eligibility Criteria specified in Annex 8. The negotiation considers the willingness and capability of the IA to undertake O&M responsibilities. The major points for discussion during the contract negotiation are the: a) NIA and IA responsibilities in the IMT Contract; and b) compensation, payment schedule and payment criteria. The IMT Contract negotiation must be carried out in an open and transparent manner. The template for the IMT Contract is presented in Annex 4. The development of the capability of the IA to perform IMT Contract responsibilities is the function of the NIA. The capability development interventions that will be provided by the NIA to the IA must be based on an objective IA training needs evaluation and the list of responsibilities under the IMT contract targeted to be negotiated with the IA as discussed in item 1, Section V of Annex 2. IX. COMPENSATION, PAYMENT SCHEDULE AND PAYMENT CRITERIA

The guidelines for determining IA remuneration for maintenance and IA share on ISF collection of current and back accounts are shown in Annexes 6 and 7, respectively. The details of the IMT compensation, payment schedule and payment criteria are presented in Annex 1. Compensation. The remunerations for canal maintenance (for Model 1) and share of the IA from ISF collections shall be subject to negotiation with the NIA based on the concept of fair sharing of responsibilities and benefits . In the concept of fair share of responsibilities and benefits , responsibilities means the O&M responsibilities each party performs within the irrigation service area being considered for IMT; and benefits shall be interpreted as the remuneration and fair share of each party on the ISF collection within the area being considered for IMT. Due to the high cost of operating pump systems and the reduced ISF rates as specified by MC No. 41 s. 2007, all ISF collections shall first be allocated for payment of 50% of the energy cost. The other 50% of the energy cost will be subsidized by NIA. Sharing of ISF collections in excess of 50% of the energy cost, shall be negotiated by the IA and the NIA based on the concept of fair sharing of responsibilities and benefitsas mentioned above. The details of the compensation arrangements are presented in Annexes 1, 6 and 7. Payment Schedule. Payment of IA remuneration for canal maintenance must be done by the NIA within one month after inspection by authorized NIA staff and the NIS Federation and submission of a report (Table 3) that the work done is satisfactory and eligible for payment. 5

Payment of IA ISF collection shares (for all Contracts) shall be done within one month from the end of the collection period after a transparent NIA-IA reconciliation of the total ISF collections, remittances and collection efficiencies within the IA service area. (Refer to Annex 1). Payment Criteria. The criteria for paying IA remuneration on canal maintenance for Model 1 and IA ISF collection share for any of the IMT Contracts are presented in Annex 1. It presents in general, the basis of payment on IA remuneration for canal maintenance and IA ISF collection share. It includes penalties in case of delayed payments to IA in the case of NIA and failure to remit full NIA ISF collection share for Models 2 and 3 Contracts, and failure to pay Irrigation System Rental Fee for Model 4 contract. The process, deadlines and sanctions on payment and remittances of ISF Collections either for Current or Back Account Collections by IAs shall be subject to existing accounting and auditing rules and regulations and are not part of this document. However, such shall be informed or properly disseminated by the NIA to the IA for their compliance. X. DISPUTE/GRIEVANCE RESOLUTION

The NIA through the Head Staff at the NIS level and the IA President representing the IA concerned shall make every effort to resolve amicably any dispute/grievance arising out of the IMT Contract. When a dispute/grievance is not amicably resolved by the contracting parties, the following process is recommended. 1. The System Management Committee (SMC) is the first level of responsibility for resolving dispute/grievance at the system level. The SMC as specified in MC 36 s. 19972 is composed of concerned NIA Staff and IA/FIA Presidents. In the SMC the representation of relevant government agencies. LGUs and other institutions are on call basis or as need arises. 2. Any dispute/grievance that is not settled by the SMC will be elevated to the Manager of the Irrigation Management Office (IMO) who will try to resolve such in coordination with the President and Board of Trustees of the Provincial Federation of IAs and concerned IMO Staff. If necessary, the mediation of the Provincial/Municipal Government may be sought for the resolution of the dispute/grievance. 3. If the dispute/grievance is not resolved at the IMO level, such shall be elevated or endorsed to the Regional Irrigation Manager who will coordinate with the President and Board of Trustees of the Regional Federation of IAs in resolving the dispute/grievance. 4. In any case that the NIA and IA/FIA concerned: 1) do not agree to submit to the above process; 2) do not arrive on a mutually agreed solution; or 3) the dispute/grievance is not resolved through the above process, such shall be submitted to any court of law that has jurisdiction thereof or as indicated in the Section on Settlement of Disputes of the NIA-IA IMT Contract. XI. CONTRACT SUSPENSION

Contract suspension may be resorted to only when: a) the delivery of irrigation service to farmers; and b) the viability of operating and maintaining the irrigation system are negatively affected, as in the following cases:
2

With the changes in the NIA Structure and Staffing due to the Rationalization Plan, particularly at the NIS level, MC 36 s. 1997 has to be revised.

1. Unresolved dispute/grievance resulting to disruption of the IMT contract arrangement 2. Poor NIA or IA IMT Performance affecting irrigation service and financial viability of the system These are further discussed in Section XI of Annex 2. XII. MONITORING AND EVALUATION SYSTEM There are two major components in the monitoring and evaluation (M&E) system in the implementation of the IMT Program, namely: a) NIA IMT Performance Evaluation; and b) the IA IMT Performance Evaluation. The NIA IMT Performance Evaluation covers indicators related to; a) assistance for the organization and capability development of the IAs; b) implementation of water delivery schedules based on O&M plan; and c) repair, improvement and/or rehabilitation of the physical facilities (irrigation, drainage and drainage). The evaluation scheme is presented in Annex 8. The eligibility of an IA to negotiate for an IMT Contract is determined based on the IA IMT Eligibility Criteria in Annex 8. After successfully negotiating and signing an IMT Contract, the seasonal IA IMT Performance is evaluated through the IA IMT Performance Evaluation, also discussed in Annex 8, which evaluates the IA performance on their responsibilities as specified in their IMT Contract. The IA IMT Performance Evaluation is different from the annual IA Functionality Survey 3 which is done to assess the functionality IAs on a yearly basis, and on three (3) major groups of indicators namely: a) Operation and Maintenance; b) Organizational Management; and c) Financial Management in a more detailed manner. XIII. IA O&M SEED FUND For new IAs or IAs which are not yet financially capable of financing their O&M cost, the NIA shall provide IA O&M Seed Fund equivalent to the IA O&M Cost Requirement for one cropping season or as agreed by both parties. The IA O&M Seed Fund shall be paid in full without interest by the IA upon receiving its incentives/ISF Share for the season. The IA O&M Seed Fund can be provided from initial ISF collections subject to negotiation and agreement by both parties. XIV. ALLOCATION OF IA INCOME FROM IMT

It must be emphasized that the IMT remunerations and incentives shall be used primarily for irrigation-related activities. It is the policy of NIA to ensure the sustainability of the NIS whose irrigation management has been transferred to the IA. In order to attain this, the disposition of the IA yearly income must be balanced for the various operations expenses. The yearly budget and expenditures of the IA is recommended at 40 percent for personal services and 60 percent for maintenance and other operating expenses (MOOE). XV. FINANCING OF THE IMT PROGRAM The IMT Program shall be funded through on-going projects whether new NIS under
3

The IA Functionality Survey has to be revised to consider changes on the IA responsibilities in the new IMT Model Contracts.

construction and existing NIS under rehabilitation and modernization. The Project Institutional Development Division (IDD) and the Regional Engineering and Operations Division (EOD) shall align all their institutional development programs to be consistent with this IMT policy. The Project Manager (PM) and the Regional Irrigation Manager (RIM) shall make sure that the IMT Program is properly funded and supported. The existing NISs that are not covered under any on-going and proposed projects shall pursue the IMT Program through the yearly allocation for NIS Repair and Rehabilitation Fund appropriated to the NIA through the General Appropriations Act. The Deputy Administrator of the Engineering and Operations Sector shall ensure that NIS Repair and Rehabilitation Fund fully support the components of the IMT Program. As a general rule, five (5) percent of the allocation for civil works in all local and foreign funded projects must be allotted to support the IMT Program for the system or project (new) under repair, rehabilitation or construction. The budget, however, must be firmed-up through the preparation of an IMT Program of Work (POW) to be submitted to the Deputy Administrator for Engineering and Operations for approval. IMT POWs will be reviewed and consolidated by the Operations Department through the Institutional Development Division at the NIA Central Office. XVI. INSTITUTIONAL ARRANGEMENT The Irrigation Management Transfer (IMT) Program is the program of the National Irrigation Administration and every single unit of the agency has inherent functions and responsibility to perform in supporting the program implementation. Within the NIA Rationalized Structure, the Administrator through the Office of the Deputy Administrator of the Engineering and Operations Sector shall be responsible for the overall planning and implementation of the IMT Program. The Operations Department (OD) through its Systems Management Division (SMD) and Institutional Development Division (IDD) shall take the lead in the planning, implementation and monitoring of the IMT Program. Specifically, it is responsible of: a) review and consolidation of IMT Programs for all NISs; b) formulating and disseminating the IMT policies and guidelines; b) provide training to institutional development (ID) and relevant O&M staff at the RIO and IMO to prepare them to implement the IMT Program; c) assist the Regional Engineering and Operation Division (EOD) in preparing work and financial programs; d) assist the EOD in training ID and relevant O&M staff at the IMO and system levels; e) monitor and evaluate the implementation of the IMT Program; f) conduct assessment surveys as necessary; and g) assist the RIO and IMO in solving problems that affect the IMT Program planning and implementation. The Regional Irrigation Manager through the Regional Engineering and Operations Division (EOD) shall take the lead in managing the IMT Program at the regional level and shall assist all IMOs within the region. At the Irrigation Management Office (IMO) level, the Division Manager through the O&M Section shall lead the implementation of the Program for each NIS within the IMO coverage. At the system level, the most Senior Staff or Staff designated as head of the System, through the Senior Irrigators Development Officers (SIDOs) and/or Irrigators Development Officers (IDOs), and/or the Senior Water Resources Facilities Technicians (SWRFT) are the direct implementors of the IMT Program.

List of revisions done on the Second Edition of the NIA IMT Policy Second Edition 1. (Page 1) Section 1. Statement of IMT Policy 2. Main Text of the IMT Policy reduced to 8 pages, limited to general declaration of provisions on the IMT Policy 3. (Page 9) Annex 1 presents clear description of the IMT contracts, compensation, payment schedule and payment criteria MC 47 s. 2008

(Page 4) Section 4, Same content Main Text is 17 pages with lots of duplication with Annex 1, the IMT Guidelines (Page 51) Annex 2 does not provide for payment schedule and payment criteria IMT Guidelines only three (3) Annexes. It is difficult to find specific 4. (Page 12) Annex 2, the IMT Guidelines is topics on the guideline such as supported by eight (8) distinct Annexes for easy determination of NIA-IA sharing location of topics. scheme, NIA-IA performance evaluation, etc. 5. (Page 33) Annex 3, MOU Template for system (Page 53) Annex 1, Attachment 1-1, improvement/rehabilitation between the NIA and IA Same Content 6. (Page 36) Annex 4, IMT Contract Template. (Page 53) Annex 3 Improved with additional instructions for clarity 7. (Page 59) In determining the O&M Cost BreakEven Pointas basis for the NIA-IA ISF collection sharing scheme, it was recommended by the IDD CO to include a NIA-CO share of 13% based on (Page 49) No NIA-CO share computations made by Engr. RSGamboa. In the specified document it is suggested to be at 10% considering that the NIA CO had other source of income such as the Management Fee and Equipment Rental. 8. (Page 46) Annex 5, Detailed NIA and IA (Page 30) Not as detailed as the responsibilities for the different Models second edition 9. (Page 57) Annex 6, Detailed scheme on (Pages 68 to 70) Not as detailed as determining IA remuneration for maintenance and the second edition NIA-IA ISF collection sharing scheme 10. (Page 63) Annex 7, Compensation on Back Not included Accounts (Pages 23 and 24) For the NIA IMT 11. (Page 64) Annex 8, The NIA-IA IMT Performance performance (Pages 15 and 45) for Evaluation is attached the IA IMT performance 12. (Pages 4 and 25) For Model 1, it is recommended that ISF collection shall be considered for transfer Not specified as IA responsibility depending on capability and willingness of the IA. 13. (Pages 4 and 25) For Models 2, 3 and 4 contracts), Since ISF Bill is computerized, IAs need to procure computers and the development of computer knowledge and skills. Some RIOs and IMOs are (Page 33) Specified for transfer to IA concerned whether such can be transferred for Models 2, 3 and 4 contracts (no outright to IAs. Hence, it is recommended to have flexibilities provided) the flexibility that the preparation of bills be transferred to the IA only when it has the equipment and tested capacity to do so.

Second Edition

MC 47 s. 2008

14. (Pages 5 and 26) Considering MC 41 s. 2007, which reduced the ISF Rates for pumps by 50%, it is recommended to specify in the IMT Policy that Not specified only 50% of the energy cost shall be considered as cost in the computation of break-even pointand the NIA-IA sharing scheme on ISF collection (Page 11) It was defined that Conflict/Grievance not resolved at the system and regional level will be elevated to the DA Management Committee headed by the DA Secretary. 16. (Page 6 and 27) A Section on Contract Suspension Nothing relative to contract is included suspension 17. (Pages 8 and 31) Financing the IMT Program. It is recommended that 5% of civil works allocation from any project (local or foreign) be allotted to finance IMT Programs with the requirement that an IMT POW be prepared and approved to firm-up the (Page 15) No percentage specified allocation. The 5% allocation for IMT Programs is specified under MC 59 s. 2003 but such is not being followed. Less than 5% (3% in most cases, as per feedback of field level IDS Staff), is being allotted for IMT Program financing. (Page 12) It was specified that such shall be based on the average base 18. (Page 9) For Model 1, it was recommended by field collection efficiency (BCE) within the level IDS Staff that the base collection efficiency IA area before the signing of the (CE) where IAs start to have ISF collection share contract and it is not the same for be at 55%. The IA share is pegged at 1% to 15% areas having average BCE of below for collections above the agreed base CE. 60% (1% - 25%) and BCE of above 60% (1% - 15%) 15. (Pages 6 and 27) Dispute and grievance (relative to IMT contracts) resolution was revised to involve only units within the NIA, System Management Committee and the Federation of IAs. (Page 13) The IA will pay Technical 19. (Page 11) The IA will pay NIA an Irrigation System Assistance Fee and repay all the cost Rental Fee and will contribute 30% of the cost of of repair and rehabilitation financed major repair and rehabilitation after contract by the NIA after contract signing at signing. zero interest. 20. (Page 19) The MC on Patubigayan Trust Fundis not yet issued. The proposal is with the Operations Department. 21. (Page 47) Coverage of IA for repair and maintenance may include portion of main canal (Page 32) not specified within the IA area of responsibility

Republika ng Pilipinas Department of Agriculture PAMBANSANG PANGASIWAAN NG PATUBIG (National Irrigation Administration) EDSA, Diliman, Quezon City

MC No. _27_ S. 2011 MEMORANDUM CIRCULAR MEMORANDUM TO : THE SENIOR DEPUTY ADMINISTRATOR, DEPUTY ADMINISTRATORS, DEPARTMENT MANAGERS, REGIONAL IRRIGATION MANAGERS, OPERATION MANAGERS, PROJECT MANAGERS, PROVINCIAL IRRIGATION MANAGEMENT OFFICERS AND ALL OTHERS CONCERNED THE ADMINISTRATOR SECOND EDITION OF THE NIA IMT POLICY AND IMPLEMENTING GUIDELINES

FROM SUBJECT

: :

This Memorandum Circular supersedes MC 47 s. 2008 entitled The NIA IMT Policy and Implementing Guidelines. This is the second edition of the NIA IMT Policy and Implementing Guidelines which was prepared due to issues and clarifications raised by field offices during and after the RIO and IMO IMT Orientation Workshops conducted within 2009 to 2010. It is, however, reiterated that pursuant to the NIA Board of DirectorsResolution No. 7497-08 Series of 2008 dated 26 May 2008, the attached second edition of the NIA Irrigation Management Transfer (IMT) Policy and Implementing Guidelines are issued as references in the planning and implementation of irrigation development and improvement programs particularly in the management of the Operation and Maintenance of all National Irrigation Systems (NISs). Any program that implements the policy and guidelines within the purview of the IMT shall be called the Irrigation Management Transfer (IMT) Program . The IMT Program encompasses all other programs of NIA relating to the organization and development of IAs in all NISs as well as in all irrigation projects undergoing construction, rehabilitation and/or modernization. Existing NIS management contracts will be reviewed and modified or revoked to conform to this IMT Policy subject to consultation and mutual agreement between the NIA and the IAs concerned, except those under Type III and Stage III Contracts (which covers asset turn-over), unless otherwise renegotiated to the IMT Models. All new IMT contracts shall conform to the models set forth in this IMT Policy and Implementation Guidelines. All memorandum circulars or parts thereof that are inconsistent with the provisions of this Second Edition of the NIA IMT Policy are hereby revoked and/or modified accordingly. This Memorandum Circular shall take effect immediately. For strict compliance.

ANTONIO S. NANGEL Administrator DPG AAG LGBR -

Annex 1 GENERAL DESCRIPTION OF THE DIFFERENT IMT CONTRACT ARRANGEMENTS

Contract/ Responsibilities Model 1 The NIA Manages the entire system but transfers specific operation and maintenance activities to the IA Compensation 1. For Canal Maintenance: Based on standard labor capacities in canal maintenance and the wage rate based on the Regional Wage Board (Non-Agricultural Workers). Payment Schedule Within one month after inspection by authorized NIA staff and the NIS IA Federation and submission of a report that the maintenance work done is satisfactory and eligible for payment. For IAs: Unsatisfactory evaluation result will mean that the IA is not eligible to receive the compensation for the maintenance work evaluated until the work is rectified or done satisfactorily. For NIA: Delayed payment in excess of one month shall be subject to payment of an interest of 0.5% per month. Fraction of a month is considered one month. For IA: The IA is not eligible to receive incentives at ISF collections percentage equal or lower than the agreed base ISF collection percentage. For NIA: Failure to pay the IA share within one month after the end of the collection period and/or completion of the joint NIA-IA assessment and reconciliation, the IA Share shall earn 0.5% interest per month of delay. Fraction of a month is considered one month. Payment Criteria

The IA will be responsible of: a) Maintenance of canals; b) operation activities 2. IA Share on ISF Current Account Collection: such as discharge monitoring and Scale of 0% to 15% of total ISF collection. The suggested preparation of list of base ISF collection level to be negotiated with the IA is irrigated and planted 55%. If this is the agreed base collection level, the IA area; c) distribution of starts to have a share of the ISF collection at irrigation service fee percentages above 55% to 100%. This is equal to 1/3 % (ISF) bills; and d) for every one (1) percent incremental increase from 55% campaign for payment. 3. IA Share on ISF Back Account Collection: Back Accounts before the signing of the Contract: a) IA: 25% b) NIA: 75% Back accounts after signing of the Contract: a) IA: 5% of b) NIA: 95% Model 2 NIA manages the main 1. IA Share on ISF Current Account Collection: system, from the headworks to the main (Canal maintenance is not separately compensated. canal up to the Compensation for this is an integral part of the IA Share headgates of lateral from ISF Current Account Collection.) canals.

Within one month after the end of the collection period and/or completion of the joint NIA-IA assessment and reconciliation of records of collections, collection efficiency and remittances within the IA Service Area.

Within one month after the end of the collection period and/or completion of the joint NIA-IA assessment and

For the IA: 1. If the IA ISF collection fails to meet/pay in full the agreed NIA share from current account collectibles in a specific season, the deficit shall

Annex 1
Contract/ Responsibilities Model 2 The IA is responsible for the management of the laterals, sub-laterals and terminal facilities within the coverage of the IA service area. Compensation Payment Schedule Payment Criteria

For gravity systems, this shall be negotiated based on the NIA and IA percentage share of the Break-Even O&M Cost of the system. For pump systems, all ISF collections shall first be allocated for payment of 50% of the energy cost. The other 50% of the energy cost will be subsidized by NIA as directed under MC No. 41 s. 2007. Sharing of ISF collections in excess of 50% of the energy cost, shall be negotiated by the IA and the NIA based on the concept of fair sharing of responsibilities and benefits similar to that for Model 2 Gravity Systems above. 2. IA Share on ISF Back Account Collection: Back Accounts before signing of the Model 2 Contract: a) IA: 25% b) NIA : 75% Back accounts after signing of the Model 2 Contract are the responsibility of the IA.

reconciliation of records of collections, collection efficiency and remittances within the IA Service Area

be considered as back account payable of the IA to NIA. 2. Unpaid NIA share will earn an interest of 0.5% per month. Fraction of a month is considered one month. 3. IA shares from ISF collection for the succeeding season will be applied first to their back account. 4. In case of unsatisfactory evaluation of canal repair and maintenance, the IA will be asked by the NIA to rectify or accomplish the work satisfactorily. Otherwise, the NIA will deduct the cost of canal repair and maintenance from the IA Share, at a rate computed following the computation of IA remuneration for canal repair and maintenance for Model 1 Contracts. The NIA shall use the amount to pay for the repair and maintenance of the canal section. For NIA: Failure to pay the IA share within one month after the end of the collection period, the IA Share shall earn 0.5% interest per month of delay. Fraction of one month is considered one month.

Model 3 The NIA manages the headworks and portion of main canal up to the junction of the first lateral canal headgate. The IA is responsible on the management, operation and 1. IA Share on ISF Current Account Collection The NIA-IA Sharing Scheme shall be determined similar to Model 2 2. IA Share on ISF Back Account Collection (If the IA did not pass through Model 2 Contract) Back Accounts before the signing of the Model 3 Contract: Same as Model 2 Same as Model 2

10

Annex 1
Contract/ Responsibilities maintenance (O&M) of the rest of the system from the junction of the first lateral canal headgate down to the farm level facilities. Model 4 NIA transfers to the IA the full management of the irrigation system including the headworks and provides only technical assistance to the IA on the management of their organization and the O&M of the irrigation system. Compensation a) IA :25% of b) NIA :75% of Back accounts after signing of the Model 2 or Model 3 Contract are the responsibility of the IA. Payment Schedule Payment Criteria

The IA will be responsible of collection, safekeeping and management of ISF. The IA will pay to NIA an Irrigation System Rental Fee equivalent to the money value of 1.50 cavans of dry paddy (computed at the government support price of palay at the time of billing) per hectare per year based on the firmed-up service area (FUSA) of the system. The System Rental Fee will cover the cost of technical assistance and cost of using the irrigation facilities and structures. In cases of major damages due to force majeureand/or major repair and rehabilitation beyond the financial capacity of the IA, the NIA will be responsible for doing the detailed engineering and implementation of the repair works with IA participation and will finance 70% of the cost. The IA will finance 30% of the cost and assist the NIA in the planning and implementation.

The Irrigation System Rental Fee is payable in two (2) equal installments of the money value of 37.50 kg of dry palay payable for each season (wet and dry seasons). Payment of the System Rental Fee installments shall be within one month from the end of ISF collection period for every season after an open or transparent joint NIA-IA assessment and reconciliation of the total ISF collections, collection efficiency and remittances within the IA service area

For the IA: Unpaid Irrigation System Rental Fee will earn an interest of 0.5% per month. Fraction of a month is considered one month.

The IA manages the irrigation system. It becomes responsible of O&M planning implementation, monitoring and evaluation for the entire IA Share on ISF Back Account Collection system, including the setting up and (If the IA did not pass through Model 2 or 3 Contract) Back collecting ISF rates, Accounts before the signing of the Model 4 Contract: and irrigation system improvement/moderniz a) IA :25% of ation program. b) NIA:75% of Back accounts after signing of the Model 2, Model 3 or Model 4 Contract are the responsibility of the IA.

11

Annex 2

IRRIGATION MANAGEMENT TRANSFER (IMT) POLICY IMPLEMENTING GUIDELINES Second Edition - April 2011
I. THE NIA IMT POLICY

Pursuant to the NIA Charter and relevant legislations cited in Section III of this document: IT IS THE POLICY OF THE NATIONAL IRRIGATION ADMINISTRATION TO PURSUE IMPROVED IRRIGATION SYSTEM PERFORMANCE, IRRIGATION SERVICE, AND ATTAIN FINANCIAL SUSTAINABILITY IN THE OPERATION AND MAINTENANCE OF THE NATIONAL IRRIGATION SYSTEMS (NIS) THROUGH THE TRANSFER OF NIS MANAGEMENT, PARTIALLY OR FULLY, TO DULY ORGANIZED IRRIGATORS ASSOCIATIONS (IAS). II. RATIONALE OF THE NIA IMT PROGRAM

What is IMT? IMT Refers to the processes involved in the transfer of the management, operation and maintenance of the national irrigation systems (NIS) to Irrigators Associations (IA), whether wholly or partially, depending on the size of the system and capacity of the IA. Why transfer management of NIS? The main reason for the IMT Program of the NIA is to attain efficient irrigation service and sustainable operation of the National Irrigation Systems (NIS) through the involvement of Irrigators Associations (IAs) in the management of the systems. This is done through the transfer of management functions in the operation and maintenance of NISs from NIA to duly organized IAs. Specifically, the reasons for transferring the management of NISs from NIA to IA are: NIA point of view: a) Implementation of the NIA mandate as prescribed by its charter and other relevant Philippine Laws; b) Reduction of Expenses on operation and maintenance (O&M). In many instances the O&M expenses of an NIS exceeds revenue from Irrigation Service Fee (ISF) collections; c) Improvement of NIS operation performance in terms of timely and equitable water delivery and distribution, narrow the gap between irrigated and service area, and increase ISF collection efficiency; and d) Improvement of NIS performance needs the joint efforts of NIA and farmers. IA point of view: a) Improvement of NIS efficiency and performance as users are directly involved in the management of O&M; b) Improvement and equity in water availability and distribution; c) Opportunity to build-up IA capital; d) Opportunity to develop capacity for organizational and system management; and e) Equitable opportunity for higher agricultural production and income for IA members. The Challenge of IMT. The main challenges of IMT are: a) the formation and development of the farmers into a functional and self-reliant association of water-users, which is capable and willing to take on the responsibilities of operating and maintaining the NIS; and b) acceptability of the Program to the NIA O&M personnel so that they cooperate and facilitate

12

Annex 2 the capacity development of farmers and realign/redefine their functions to provide technical as well as managerial assistance to IA. III. LEGAL BASIS AND EXISTING POLICY ON IMT

The relevant Philippine Laws that provide legal bases to NIA to transfer management of NIS to IAs are the following: RA 3601 of 1963, the NIA Charter, as amended by PD 552 and PD 1701 Section 2: Powers and Objectives The NIA shall have the following powers and objectives: (a) To investigate and study all available and possible water resources in the Philippines, primarily for irrigation purposes; to plan, design, construct and/or improve all types of irrigation projects and appurtenant structures, all national irrigation systems; the authority to supervise the operation, maintenance and repair, or otherwise administer temporarily all communal and pump irrigation systems constructed, improved and/or repaired wholly or partially with government funds; and delegate the partial or full management of national irrigation systems to duly-organized cooperatives or associations, under such terms and conditions which the NIA Board of Directors may impose. RA 7607 of 1992, the Magna Carta of Small Farmers SECTION 20. Access to Irrigation Services. While the Government, through the National Irrigation Administration (NIA) and other concerned offices, continues to provide irrigation services, farmers' organizations shall be encouraged to spearhead the construction of irrigation systems. Towards this end, the Government shall encourage small farmers to join or form Irrigators Associations. In addition, it shall promote participation of farmers to develop their capabilities to eventually assume the operation and maintenance of irrigation systems and the responsibility of collecting fees from the individual members and remitting an amount to the NIA. The NIA shall undertake the development and institutionalization of second-crop irrigation facilities in support of multi-crop farming. It shall also devise schemes for small farmers to avail of electric pumps or diesel-powered deep well irrigation systems in barangays or communities where water is scarce. RA 8435 of 1997, the Agriculture and Fisheries Modernization Act (AFMA) SECTION 30. National Irrigation Systems (NIS) The National Irrigation Administration (NIA) shall continue to plan, design, develop, rehabilitate and improve the NISs. It shall continue to maintain and operate the major irrigation structures including the headworks and main canals. In addition, the NIA is mandated to gradually turn over operation and maintenance of the National Irrigation System's secondary canals and on-farm facilities to Irrigators Associations. The following Memorandum Circulars (MC) pronounced the NIA policy and previous IMT guidelines that addressed and guided earlier efforts on Participatory Irrigation Management (PIM). All of these MCs guided the implementation of IMT up to the late 1990s. MC No. 014, s. 1987 - defines the Criteria in the Shared-Management (Turn-over) of NIS or part of NIS to IA under Stage I, Stage II and Stage III Contracts.

13

Annex 2 MC No. 014, s. 1989 - revised the Criteria in the shared-management (turn-over) of NIA or part of NIS to IA and changed the contract titles to Type I, Type II and Type III. This effectively separated the maintenance contract (Type I) and the ISF Collection Contract (Type II). Many IAs, however, elected to undertake a combined Type I and II Contracts. MC No. 41, s. 1990 - increased the IA incentives for Type I contract from P610 to P1,100 for the maintenance of 3.5 km of unlined canal or 7.0 km of lined canal. It also revised the IA incentive for Type II contract and reduced the required ISF collection from 70 percent to 50 percent before the IA qualifies for incentives. It also defined the expanded IA duties on Type I and Type II contracts. MC No. 6, s. 1991 - required the IA collectors and treasurers with Type II Contracts to be bonded and a separate cash book for ISF collections be established. MC No. 35, s. 1993 - increased the IA incentives from P1,100 to P1,400 for Type I contract. IV. THE IMT PROGRAM AND ITS OBJECTIVES

The program that implements the IMT policy and guidelines shall be called the Irrigation Management Transfer (IMT) Program . The IMT Program supersedes or encompasses all other programs of NIA relating to the organization and development of IAs, and the transfer of O&M responsibilities to IAs in the NISs. The IMT Program is a set of activities and resources aimed at improving the performance of NISs through the transfer of management functions in the operation and maintenance of NISs from NIA to duly organized IAs. The objectives of the IMT Program are the following: a. Develop and institutionalize a strong and dynamic partnership between the NIA and the Irrigators Associations for the delivery of efficient irrigation service to irrigated farmers; Duly organized, functional and self-reliant Irrigators Associations (IAs). The IA is registered with appropriate government entity, and is capable and willing to operate and maintain the NIS, wholly or partially. Improved performance of the NISs in terms of equitable water distribution, and timely and reliable water deliveries. Performance indicators are: a) more equitable water distribution, b) better timely and reliable water deliveries, c) higher cropping intensity, and d) higher ISF collection efficiency. Higher opportunities to farmers of NISs for better and more profitable agricultural production. Farmers are expected to benefit from better irrigation service in terms of higher yields and farm incomes. Sustainability and financial viability of the operation and maintenance of NISs, and consequently the IA and the NIA. Improved NIS performance triggers better agricultural production and profitability, willingness of farmers to pay ISF, higher ISF collection efficiency and more funds for O&M of NIS, therefore, better maintenance and sustainable operation of NIS, and sustainable inflow of funds or income to IAs and the NIA to support the O&M of NISs.

b.

c.

d.

e.

14

Annex 2 V. COMPONENTS OF THE IMT PROGRAM

The following five (5) components need to be addressed by the IMT Program. 1. The Irrigators Association Component. The basic entity that shall receive and take-over the NIA s management functions in NIS is the Irrigators Association (IA). The IA could be a first level IA that was organized and registered to consolidate the collective decision-making of a number of turnout service area groups (TSAG) served by a common supply channel or it could be a second level such as Council of IAs (CIA) or Federation of IAs (FIA) served through a common head gate from a main supply channel or in cases of small to medium size systems, the FIA may cover the entire system. In larger schemes, a Confederation of C/FIAs (CC/FIA) is also organized at the headgate of a main supply channel where water supplies for the headgates of all the CIAs/FIAs are obtained. The primary concern in this component is the organization and capability development of the IA including officers and members to enable them to carry out the management functions transferred to them. The organization of IAs shall be redirected towards the mobilization and development of the turnout service area group (TSAG) initially to provide a solid grassroots foundation for democratic or consultative problem-solving, decision-making and equal (area-wide) representation to facilitate the active participation of all farmers/IA Members. The IAs at various levels are organized as pyramid structure along hydraulic boundaries for more cohesive and professional management of NIS in support to higher agricultural productivity and farming profitability. The term Irrigators Associations (IA) shall refer to the various levels of water users associations in various NISs that include, but not limited to, the Council of IAs (CIA), Federation of IAs (FIA), Confederation of IAs (CFIA), and Irrigation Service Cooperatives (ISC). Duly organized association shall mean organized and registered with authorized entities of the government and operates in accordance with appropriate laws of the Philippines. Why develop the IA? The development of the IA aims to to establish and sustain professional management by IA of the following: a) affairs of the association, b) operation and maintenance of the system, c) financial viability of the association, and d) productivity and profitability of farming in the IA area. How should IAs be organized? The organizational structure should reflect hydraulic boundaries that are designated by readily identifiable and verifiable irrigation structures to delineate appropriate key management functions at different levels of the NIS. For most NIS, the key management organizations are identified in the illustration below.
Level of facilities Area in hectares

CFIA

System or District

Up to 20,000

FIA

Main Canal or Zone

1,000 - 5,000

CIA

Lateral or main canal

500 or more

IA

Sub-Lateral or Lateral

150 - 300

TSAG

On-Farm Facilities

20 - 50

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Annex 2

Depending on the size of the system, a pyramid-shaped organizational structure is the pattern of IA organization starting from the turnout service area group (TSAG) as the basic unit of irrigation water management. The TSAG members have a common interest in ensuring equitable water distribution in the area being served by a turnout. The TSAG membership is also suitably sized for small group activities to involve all farmers in collective decision making. The Irrigators Association is the federation of TSAGs within the lateral for small schemes, or within a specific section along the lateral canal for large schemes. Farmer-members of TSAGs compose the general assembly of the IA and TSAG leaders are the IA Board of Trustees or Directors. The IA officers are elected from the members of the Board or from the general assembly, depending on the Constitution and By-laws of the IA. The IA is recognized as a juridical entity and registered with the Securities and Exchange Commission (SEC) or Cooperatives Development Authority (CDA). The Council of IAs (CIA) is organized as federation of IAs at the system level for small schemes or at the lateral level for large schemes. The general assembly of the CIA is the TSAG Leaders or the IA officers and BOD. The IA organization goes up the ladder until the system level federation or confederation of IAs is formed, as the case may be and depending on the desire and need of the IAs. The CIA and other higher organization are also registered so that they qualify to enter into contract with NIA on either IMT or other activities, such as civil works contracts. Capability Development or Strengthening of IAs. IA capability development or strengthening shall be focused on four (4) major aspects of capacity build-up a) Organizational discipline and management; b) System management; c) Financial management; d) Entrepreneurial capability development. This must be done through the experiential learning process rather than the usual classroom-lecture type. These shall include, but not necessarily limited to the following: a. Organizational discipline and management. Refers to the conduct of regular IA activities in accordance with the constitution and by-laws and policies, practice of collective decision making, and maintenance of quality and complete records of IA meetings, transactions, extent of membership and master list of members, approved policies and regulations and enforcement of the same. The IA should be able to give high importance on these essential aspects to sustain the organization. Through the application of appropriate experiential learning methods, the following capability development areas may be included in this aspect considering the actual training or capability development needs of the IA based on the IA Functionality Survey Results and/or a Training Needs Assessment. These trainings are applicable for the capability development of IAs in preparation for IMT Contracts. 1) Setting IA Goals, Objectives and Targets 2) Integrity Development and Good Governance (Transparency) 3) O&M Policy Formulation, Dissemination and Enforcement 4) IA Incorporation and By-Laws Dissemination to members 5) Basic Leadership Development Course 6) Value Formation Seminar 7) Record Keeping and Filing System 8) Basic Management and Supervision 9) Communication and Feedbacking 10) Linkages with LGU and Other Institutions/Organizations

16

Annex 2

11) Gender in the Operation and Maintenance of Irrigation Systems

b. Irrigation System management. The training module develop by IDD on System Management could be used as introductory material. System-specific on-the-job training (OJT) modules on O&M should be developed for the use of the Senior Water Resources Facilities Technicians (SWRFT) in coaching the IA. Important training modules that should be considered are: 1) Operation Plan (cropping calendar and pattern; water delivery and distribution; maintenance) Preparation; 2) Irrigation Facilities and Structures: Uses and Operation 3) Discharge Measurement and Monitoring; 4) LIPA Preparation and Compilation; 5) Water Delivery and Distribution; Water Management; Water Saving Technologies 6) Maintenance Requirements of Irrigation, Drainage and Road facilities; and 7) Assessment of O&M performance and the Irrigation System through endseason walk-through to identify repair and maintenance needs 8) Water-saving rice production technologies such as the: a) Alternate Wetting and Drying; b) System for Rice Intensification (SRI); and c) Sustainable System for Irrigated Agriculture (SSIA) 9) Information Campaign on Effect of Informal Settlers and Garbage Disposal in Irrigation Canals and Embankments on the Operation and Maintenance of Irrigation Systems (including relevant laws) 10) Adaptation Strategies to Climate Change for Irrigation Systems The above trainings are applicable for the capability development of IAs in preparation for any IMT contract with variations considering area coverage of the contract, i.e., Lateral coverage for Models 1 and 2 contracts, first lateral headgate up to farm level facilities for Model 3 contract, and whole system for Model 4 contract. c. Financial management. NIA has developed a training manual on Financial Management System for IAs. It is important that financial activities of IAs are continuously monitored and evaluated to ensure that accounting and auditing procedures are properly adopted and practiced. Regular and spot audit on the books of the IA should be sustained by NIA. Financial reports and statements of the IA should be reviewed by NIA to formulate suggestions for improvement. IAs that can afford to hire professional accountants for the preparation of financial reports and statements, even on retainer-fee mode, should be encouraged. In cases where the IA cannot find from its members or officers any potential for developing capabilities on bookkeeping, financial reporting and related skills, the IA should decide to hire IA personnel for this to be paid out of their IA share. It is the responsibility of the NIA to develop the capabilities of the IA officers, members and/or personnel on financial management to institutionalize the necessary skills and knowledge within the IA. Considering the IMT Model Contract an IA is planning to negotiate with NIA, the following modules may be considered for IA capability development on financial management. Responsibility 1) ISF Bill Preparation IMT Contract Models 2, 3 and 4

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Annex 2 Responsibility Strategies on ISF Bill Distribution and Collection Campaign ISF Collection Strategies ISF Collection Recording, Accounting, Remittance and Reporting and Updating of Irrigation Fee Register Updating of Irrigation Fee Register Financial Planning and Budgeting Bookkeeping, Accounting, Financial Control and Financial Reporting for IAs Preparation of SEC Reportorial Requirements and related financial reports IMT Contract Model 1, 2, 3 and 4 Model 2, 3 and 4 Model 2, 3 and 4 Model 2, 3 and 4 Model 1, 2, 3 and 4 Model 1, 2, 3 and 4 Model 1, 2, 3 and 4

2) 3) 4) 5) 6) 7) 8)

d. Entrepreneurial and Other Areas of Capability Development. Besides irrigation, the IA have to deal with other concerns that can further develop the viability and functionality of their organization. Relevant modules for training are: 1) 2) 3) 4) 5) IA Capital build-up and entrepreneurship Linkages with LGU and other government agencies Rice-based crop diversification Livelihood development programs Gender and development (promoting women participation in irrigation)

The above training programs are applicable to any IA with any of the IMT Contracts. 2. The NIA Personnel Component. This component addresses the preparation of NIA personnel at all levels of the organization to enable them to perform their roles considering the IMT Program implementation. The changes on the roles of NIA O&M personnel depend on the stages of IMT implementation and on the transfer model adopted in the system. For Transfer Model 1, the NIA role is reduced by the functions usually done by the Water Resources Facilities Tender (WRFT) (formerly Ditchtender) but the duties of the Senior Water Resources Facilities Technician (SWRFT) shall now include the usual O&M functions plus technical assistance to IAs as follows: a) monitoring and evaluation of IA activities particularly its compliance with the IMT Contract; b) on-the-job training on specific O&M activities transferred to the IA; c) assistance to the IA on water-related conflict resolution among TSAGs and farmers; d) organizational development of the IA. For Transfer Model 2 and Model 3, the NIA role is reduced by a substantial amount as the functions done by the WRFT and SWRFT are both affected. The task of NIA O&M personnel shifts from the usual O&M activities to developing the IA capacity to perform O&M activities within the area coverage. Thus, NIA responsibility includes the following: a) OJT of IA on O&M planning, implementation, and monitoring and evaluation;

18

Annex 2 b) Assistance to IA on resolution of water-related conflicts among TSAGs and farmers; c) Training IA on financial planning and management; d) Training IA on accounting and auditing of financial transactions; e) Advising and training IA on organizational management and discipline; and f) Provision of technical assistance and guidance to IA. For Transfer Model 4, NIA completely transfers the O&M functions to the IA. The remaining roles of NIA are as follows: a) Monitoring and evaluating the IA performance periodically; b) Collecting a Technical Assistance Fee from the IA; and c) Providing O&M supervision and technical assistance to the IA. 3. The Infrastructure Component. The infrastructure component is the repair and rehabilitation program developed jointly by the NIA and IA to address identified physical deficiencies of the system. It aims to restore the original operating condition of the physical facilities before the transfer of management to the IA. It is composed of a list of repair and construction activities on specific locations with corresponding cost estimates and time frame. The main objective is to handover to the IA a smoothly running irrigation facility once construction is completed. Prior to start of construction, it is necessary to thoroughly explain to IAs/farmers the functions of each structure especially if there are new ones such as proportional long-crested weirs, flow measuring devices, and check structures. While these were discussed and agreed upon during the planning phase, not all farmers would completely grasp the objectives and functions of each structure. Proper orientation of the farmers on these structures will minimize operational problems caused by farmers interference and manipulation. Implementation of this component is also capitalized to build-up the IA resources for its responsibilities in O&M of the system. NIA shall give priority to the IA as contracting party or to its members as construction labor on any rehabilitation and improvement works within the IA area that are programmed to be done by labor intensive methods. Twenty-five percent (25%) shall be deducted by NIA from IA and/or member labor payment for the establishment of an IA Repair and Maintenance or Patubigayan Trust Fund (PTF)1. 4. The Monitoring and Evaluation (M&E) Component. The M&E aims to provide the IA and NIA the needed management tools in assessing achievements on improving the system O&M and IA development. Specifically, the M&E seeks to provide NIA with quantifiable basis in assessing the effectiveness of the IA in the performance of the turned over management responsibilities of the NIS specified in the IMT Contract. It also aims to provide the IA the means to evaluate the NIA performance in complying with its commitments in support to the IM. The M&E is discussed in detail in Section XV of this document. 5. The Linkages and Advocacy Component. The IMT Program needs to be widely disseminated and fully supported by all NIA personnel, first and foremost, to expect a successful implementation of the same. Advocacy activities to other government and
1

A separate NIA Memorandum Circular for the Patubigayan Trust Fund (previously termed as IA Improvement Shareduring the implementation of WRDP and IOSP II is being prepared and will be issued through the facilitation of the Operations Department (Systems Management Division and Institutional Development Division).

19

Annex 2 non-government organization would be much easier after all NIA personnel believe on the soundness and attainability of the program objectives. VI. THE IMT PROCESS

The IMT process aims to develop and strengthen the IA to make them capable of recognizing their innate capacity and mobilizing their members to take on the challenge of managing the O&M of the NIS, confidently and sincerely, through informed collective decision of all members. The process that has five phases looks at the progressive development of the IA as a group of water users served and linked together by a common water source or supply. In like manner, the process also develops the capacity of the NIA O&M personnel to adapt to the new regime of O&M in NIS, and gradually, adjust their activities to give way to the stronger presence of IA in O&M and provide the needed technical and managerial assistance the IA needs so that it will be able to comply with its contract obligations. If necessary, NIA Staff will be provided with training to equip them with the necessary skills, knowledge and attitude to plan, implement, monitor and evaluate the IMT Program within their area of jurisdiction. These activities aim to promote: a) common understanding of the NIA IMT Policy and Program from the NIA Central Office to the Irrigation Systems Offices; b) common ownership of the Program; and c) develop the capability of the direct implementors of the program. The process adopted in the implementation of IMT is iterative and cyclical wherein participants undertake activities as part of their experiential learning process as in the diagram below.
New Activity Application

Implementation, Application

Planning

Monitoring and Evaluation, Analysis

Setting Objectives, Abstraction, Learning

The transfer learning process is similar to that of the management cycle where implementors and participants go through the same processes but adopts and improves from lessons learned in each completed cycle. There are five phases in the IMT process: Phase 1: The Preparatory Phase is the set of preparatory activities that generates data and information, and decision for IMT action plan setting. This ensures that all key players have common understanding of: a) the IMT process and requirements; b) the current state of the irrigation system; c) IA capacity and functionality; and d) the need for system improvement and management transfer to improve irrigation service. This will include IMT Program information dissemination to IAs and farmers by NIA IMO Staff through; a) formal and informal discussions with IAs as well as members/farmers (NIA-IA meetings, attending IA meetings, IA trainings/workshops, individual contacts, etc.); and b) NIA-IA Workshop on the IMT Program of NIA using the NIA IMT Policy and the IMT Implementation Guideline (Annex 1) as reference material supported by actual data and

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Annex 2 information on: i) current irrigation system performance; ii) IA functionality status; and iii) cases of successful NIA-IA partnership through existing O&M contracts within the region and/or in other Asian countries. The objective of this phase is to motivate the IA and the NIA Staff at the system level to recognize: a) the importance and benefits of the IMT program; and b) the need for the IA to assume O&M responsibilities as partners in the O&M of the irrigation system. This activity will jump-start the IMT process. Phase 2: The Mobilization Phase is the set of activities that leads to farmers awareness of the situation of the O&M of NIS and the realization of the IA for the need to: a) improve system performance, b) strengthen unity among users, c) mobilize farmers to initiate system improvement, d) further develop IA capacity for the O&M of the system, and e) organize or re-organize the IA, as the case may be, i.e., by organizing and strengthening its turnout service area groups (TSAGs). The mobilization phase establishes the starting environment for the succeeding Participatory Planning Phase. This phase will include: a) conduct of IA membership meetings on IMT; b) the conduct of a joint NIA-IA walk-through of the irrigation system or IA area, to generate a list of repair, rehabilitation and/or improvement works necessary to be addressed to improve the performance of the irrigation system or IA area; and c) NIA-IA workshop on assessment of the IA performance as an organization and generate a list of issues to be addressed to strengthen the IA using data and information from the IA Functionality Survey. The mobilization phase has three major activities the Situation Analysis (SA), the IA reorganization, and the organization of a higher level IA. The SA is conducted by the IA as an organization at the TSAG level to examine the O&M performance of their system/IA area and identify opportunities for improvement. The SA intends to stimulate demand for improved operation and maintenance, re-organization, reactivation and/or strengthening of the IA, and the transfer of irrigation management from NIA to IA. The re-organization of the IA is required to: a) ensure that the IA is a representative organization of all the water users within its hydraulic boundaries; b) potential users in expansion and recovery areas are included; c) equal water rights of all farmers within the IA service area is recognized; and d) facilitate collective decision making of all IA members. The organization of higher level IA is necessary if the target IMT area is composed of two or more duly organized IAs. The mobilization phase establishes the starting environment for the succeeding Participatory Planning Phase. Phase 3: The Participatory Planning Phase activities in this phase will be based on the results of the activities in Phase 2. In this phase the NIA-IA partnership and the empowerment of the IA will be further developed. It includes: a) NIA-IA workshop to discuss the results of the joint NIA-IA walk-through of the irrigation system and generate a prioritized list of repair, rehabilitation and/or improvement works to be done; and b) NIA-IA planning workshops to discuss and agree on activities to be done to strengthen the IA and c) NIA-IA Action Planning Workshops to formulate proposals for physical improvement, improved system operation, improved maintenance, IA capacity build-up plan, monitoring and evaluation scheme, and the draft IMT contract. The main objective in the conduct of activities in this phase is to provide opportunity to the IA to experience actual involvement in the formulation and preparation of the following: a. Proposed physical improvement that include arrangements by which the IA can participate;

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Annex 2 b. c. d. e. Operation and maintenance plan for the system; Plan for the capacity development and capital build-up of the IA; Monitoring and evaluation scheme; and Draft IMT contract.

This phase coincides with the pre-engineering phase for the physical development of the system. The IAs will be involved in the actual survey of the physical works to be done and will be consulted on the design/plan of the physical development works through the conduct of subproject design consultation meetings before the design/plan is finalized. A Memorandum of Understanding (pro-forma attached as Annex 3) between the NIA-IA will be formulated and signed by NIA and IA representatives. The approved subproject design/plan or the list of physical works to be done will be an attachment to the MOU. Phase 4: The Implementation Phase is the conduct of activities to attain the objectives drawn up in the various plans in Phase 3. Inherent components in this phase is the NIA-IA Assessment and Planning meetings to evaluate actual accomplishments against targets and formulate new strategies, policies and plans to improve performance, rectify assumptions, and resolve issues and concerns. It is during this phase that the physical improvement is undertaken. It is important during this phase that all new structures planned to improve system operation are fully understood and appreciated by all farmers. Past experience relates that farmers often perceive that some structures are flow constrictors that make water application to farms more difficult. These are often modified or demolished by farmers without prior notice. IAs, as far as practicable, shall be engaged in the infrastructure rehabilitation and construction of NIS under the IMT Program. Civil works contracts and/or employment of members in the infrastructure component shall be the source of establishing the IA Repair and Maintenance or Patubigayan Trust Fund (PTF). Agreements on the participation of farmers in construction and in giving the IA-members priority in labor recruitment should be implemented with transparency and sincere effort. IA Repair and Maintenance or Patubigayan Trust Fund (PTF) for financing O&M within the IA area of responsibility must be undertaken. Periodic inventory of physical works followed by NIA-IA Assessment and Planning Meeting to evaluate actual accomplishments against targets, formulate new strategies and policies, adjust assumptions and plans, and resolve issues and concerns shall be conducted. Besides promoting IA empowerment, such activities will enrich the organizational management capacity of the IA as well as establish a venue for information dissemination of project status. At the end of this phase a Joint NIA-IA inventory of completed physical works is done and a dry-run of the improved irrigation system will be conducted. Based on the observations in the dry-run necessary de-bugging works must be listed and implemented. Once the physical works is accepted by NIA and conformed by the IA, IMT contract negotiation can proceed, finalization of the IMT Contract and eventually signing of the IMT Contract by the NIA and IA designated representatives. The template for the IMT Contracts is attached as Annex 4. Phase 5: The Monitoring and Evaluation Phase aims to provide the IA and NIA the needed management tools in assessing achievements on improving the system O&M and IA development. Specifically, the M&E seeks to provide NIA with quantifiable basis in assessing the effectiveness of the IA in the performance of the turned over management responsibilities of the NIS specified in the IMT Contract. It also aims to provide the IA the

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Annex 2 means to evaluate the NIA performance in complying with its commitments in support to the IMT. The M&E is discussed in more detail in Section XV of this document. Annex 8 presents the NIA and IA IMT Performance Evaluation system. VII. COVERAGE The IMT Program shall be implemented in all existing National Irrigation Systems (NISs) including those that are under construction. Existing NIA O&M and/or management contracts will be modified to conform to this IMT Policy subject to consultation and mutual agreement between NIA and IA, except those under Type III and Stage III Contracts (which cover asset turn-over), unless renegotiated. VIII. IRRIGATION MANAGEMENT TRANSFER CONTRACTS AND RESPONSIBILITIES Management functions to be transferred from NIA to the IA. The basic functions on the management of irrigations systems are: 1) operations; 2) repair and maintenance; 3) fund management for O&M; 4) enforcement of procedures and resolution of water-related conflicts; and 5) agricultural support services. NIA is directly concerned on the first four and the fifth is done through coordination with relevant government agencies and nongovernment organizations. The management functions that will be transferred to the IA are the tasks in items 1), 2), and 3) above. Items 4) and 5) are considered inherent functions of the IA in its organizational management. 1. Operation. Refers to the activities involved in diverting water from the source and conveying and distributing this to the point of application in the farmersfields. The principal tasks include: a. b. c. d. e. f. g. Preparation and monitoring of cropping calendar and planting pattern; Preparation and submission of List of Irrigated and Planted Areas (LIPA); Measurement and monitoring of water requirements and available supply; Conveyance and distribution of available water to headgates of lateral canals; Distribution of water to turnout inlets; Application of water to farm plots; and Removal/drainage of excess water from fields.

Tasks e and f are inherent functions of individual farmers. All of the other tasks shall be transferred to the IA depending on the infrastructures involved and the transfer model adopted. For Model 1, for example, very specific activities in a, b, and c are transferred on limited sections of the system. For Model 2 and Model 3, all tasks are transferred to the IA based on the infrastructures covered within the IA jurisdiction. 2. Repair and Maintenance. Refers to the activities undertaken related to keeping the irrigation system in good operating condition at all times within the limitations of available resources to attain maximum use and economic life of the irrigation and drainage facilities. The principal tasks are: a. Routine maintenance that include removal of silt at flow measuring devices, clearing of floating debris accumulated at the crests of proportioning and duckbill weirs and inlet of structures, remedial repairs to minimize leakage from control gates and check structures, remedial measures to prevent overtopping of canal embankments, greasing or oiling of gates; and

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Annex 2 b. Periodic repair and maintenance that include desilting, cutting of vegetation on canal embankments, and reshaping and cleaning canal prism. All routine and periodic repair and maintenance tasks are transferred to the IA according to the adopted transfer Model except desilting work. Desilting is a major maintenance cost in many NIS, hence, it is very difficult for small and just startingIAs to undertake. Therefore, this shall be treated in the following manner. Desilting of canals, where this could be done manually, shall be the responsibility of the IA. Where the operation could only be done with the use of heavy equipment, this shall be the joint responsibility of the IA and NIA. These sections should be specifically defined in the IMT contract by citing the canal name and stationing. Such sections are agreed upon after the joint walk-through survey of the IA and NIA. Desilting done through the joint effort of the IA and NIA is implemented as follows: a. Where NIA has suitable equipment, the Manager of the Irrigation Management Office (IMO) deploys the equipment for desilting work and the IA contributes by providing fuel and oil. b. In instances where the IA deploys its own equipment or obtains equipment assistance from LGU for desilting canal sections identified and delineated as joint responsibility of the IA and NIA, the fuel and oil cost shall be borne by the NIA. 3. Financial management. This includes the following tasks: a. b. c. d. e. f. g. h. Preparation of ISF bills for individual farmers; Distribution of ISF bills and campaign for payment: Collection of ISF payments; Safeguarding and remitting ISF collections; Maintenance of irrigation fee registers (IFR); Budgeting, budget implementation and monitoring; Imposition of discipline and sanctions on settlement of members obligations; and Procurement and disbursement control.

Items f, g, and h are inherent functions of the IA in its organizational management. NIA provides appropriate training to the IA on these aspects as part of the capacity build-up and strengthening program for the IA. All tasks ato eare transferred to the IA according to the adopted transfer Model. For Model 1, only task bis transferred but for Model 2, Model 3, and Model 4, all tasks are transferred. The IMT Model Contracts. The transfer of management of NIS from NIA to IA shall be in the following Model Contracts. The existing O&M contracts shall be reviewed in accordance with this guideline and shall be modified or revoked, if necessary. The IA or the NIA may initiate the renegotiation of existing O&M contracts into any of the IMT contract models. IMT Contract NIA Responsibility Manages the entire system but transfers specific operation and maintenance responsibilities to the IA IA Responsibility a) Maintenance of canals (portion of main canals, laterals and other irrigation facilities and structures within the coverage of the IA service area); b) operation activities such as discharge monitoring and preparation of list of irrigated and planted area; and c) distribution

Model 1

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Annex 2 IMT Contract

NIA Responsibility

IA Responsibility of irrigation service fee campaign for payment. (ISF) bills and

Depending on the capacity and willingness of the IA, ISF collection can be an added responsibility of the IA especially in NISs that have very limited NIA Staff under the NIA rationalized structure. Model 2 Manages the main system, Management and/or Operation and from the headworks to the Maintenance (O&M) of the laterals, subhead gates of lateral canals laterals, and terminal facilities. Management and/or Operation and Manages the headworks and Maintenance (O&M) of the rest of the system portion of main canal up to from the junction of the first lateral canal the junction of the first lateral headgate down to the farm level facilities. This canal headgate is an expanded form of Model 2. Monitoring, evaluation and Full management and/or Operation and provision of technical Maintenance (O&M) of the entire system assistance to the IA including the headworks

Model 3

Model 4

The preparation of ISF bills is considered for turn-over to the IA in Models 2, 3 and 4 contracts. However, since ISF bill preparation is computerized, unless the IA procure their own computer and have trained personnel to do the job, this responsibility cannot be turnedover to the IA. Hence, when the IA lacks the equipment and manpower to do ISF bill preparation, this shall be done by the NIA but the cost for such shall be considered as part of the NIA Cost in the determination of the O&M Cost break-even pointand the NIA-IA ISF collection share for Models 2 and 3. For Model 4, the cost of doing this shall be determined and agreed by the NIA and the IA and shall be paid by the IA along with the Irrigation System Rental Fee. This shall be discussed and agreed during the NIA-IA IMT Contract negotiation. The responsibility will be turned-over to the IA once they attain the capability to perform the job and at that time the IA and NIA ISF collection share will be re-negotiated. The IMT Contract Template is shown in Annex 4. The general obligations of the NIA and the IA are presented and discussed in items C General Obligations of the NIA and D General Obligations of Annex 4 and the specific NIA and IA responsibilities for each contract in Annex 5. The guideline for determining the IA compensation and NIA-IA ISF collection sharing schemes for the different IMT Contracts are discussed in Annexes 6 and 7. Other Transfer Options. The NIA shall consider, on a case to case basis, other emerging possibilities on IMT. Such options may include tripartite agreement among NIA, IA and LGU; and/or long-term lease contract; or management by competent third parties. These options are subject to the recommendation of the Deputy Administrator for Engineering and Operations and approval of the Administrator or the Board of Directors. Contract Negotiation. To be eligible to negotiate for any IMT Contract, the IA must pass the IA IMT Contract Eligibility Criteria specified in Annex 8. The negotiation considers the willingness and capability of the IA to undertake O&M responsibilities. The major points for discussion during the contract negotiation are the: a) NIA and IA responsibilities in the IMT Contract; and b) compensation, payment schedule and payment criteria. The IMT Contract

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Annex 2 negotiation must be carried out in an open and transparent manner. The template for the IMT Contract is presented in Annex 4. The development of the capability of the IA to perform IMT Contract responsibilities is the function of the NIA. The capability development interventions that will be provided by the NIA to the IA must be based on an objective IA training needs evaluation and the list of responsibilities under the IMT contract targeted to be negotiated with the IA as discussed in item 1, Section V of Annex 2. IX. COMPENSATION, PAYMENT SCHEDULE AND PAYMENT CRITERIA

The details of the IMT compensation, payment schedule and payment criteria are presented in Annex 1. Compensation. It is the policy of the NIA that the IA shall be compensated for performing irrigation system management functions and/or O&M responsibilities transferred by the NIA to the IA in such a manner that the interest and viability of both the IA and the NIA is considered. The remunerations for canal maintenance and/or share of the IA from ISF collections shall be subject to negotiation with the NIA based on the concept of fair sharing of responsibilities and benefits . In the concept of fair share of responsibilities and benefits , responsibilities means the O&M responsibilities each party performs within the irrigation service area being considered for IMT; and benefits shall be interpreted as the remuneration and/or fair share of each party on the ISF collection within the area being considered for IMT. For pump systems, all ISF collections shall first be allocated for payment of 50% of the energy cost. The balance of 50% of the energy cost will be subsidized by NIA in consideration of the reduced ISF rates for pumps as specified in MC No. 41 s. 2007. Sharing of ISF collections in excess of 50% of the energy cost, shall be negotiated by the IA and the NIA based on the concept of fair sharing of responsibilities and benefits similar to that of Gravity Systems. The guideline for determining the IA compensation and IA Share on collection of ISF Current and Back Accounts for the different Model Contracts is presented in Annex 6 and 7. Payment Schedule. Payment of IA remuneration for canal maintenance must be done by the NIA within one (1) month after inspection by authorized NIA staff and the NIS Federation and submission of a report (Table 3) that the work done is satisfactory and eligible for payment. Payment of IA ISF collection shares (for all Contracts) shall be done within one month from the end of the collection period after an open and transparent NIA-IA reconciliation of the total ISF collections, remittances and collection efficiencies within the IA service area. (Refer to Annex 1). Payment Criteria. The criteria for paying IA remuneration on canal maintenance for Model 1 and IA ISF collection share for any of the IMT Contracts are presented in Annex 1. It presents in general, the basis of payment on IA remuneration for canal maintenance and IA ISF collection share. It includes penalties in case of delayed payments to IA in the case of NIA and failure to remit in full the NIA ISF collection share for Models 2 and 3 Contracts, and failure to pay Irrigation System Rental Fee for Model 4 contract.

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Annex 2 The process, deadlines and sanctions on payment and remittances of ISF Collections either for Current or Back Account Collections shall be subject to existing accounting and auditing rules and regulations and are not part of this document. However, such shall be informed or properly disseminated by the NIA to the IA for their compliance. X. DISPUTE/GRIEVANCE RESOLUTION

The NIA through the Head Staff at the NIS level and the IA concerned shall make every effort to resolve amicably any dispute/grievance arising out of the IMT Contract. When a dispute/grievance is not amicably resolved by the contracting parties, the following process is recommended. 1. The System Management Committee (SMC), is the first level of responsibility for resolving dispute/grievance at the system level. The SMC as specified in MC 36 s. 1997 is composed of concerned NIA Staff and IA/FIA Presidents. In the SMC the representation of relevant government agencies. LGUs and other institutions are on call basis or as need arises. 2. Any conflict that is not settled by the SMC will be elevated to the Manager of the Irrigation Management Office (IMO) who will try to resolve such in coordination with the President and Board of Trustees of the Provincial Federation of IAs and concerned IMO Staff. If necessary, the mediation of the Provincial/Municipal Government may be sought for the resolution of the dispute/grievance. 3. If the dispute/grievance is not resolved at the IMO level, such shall be elevated or endorsed to the Regional Irrigation Manager who will coordinate with the President and Board of Trustees of the Regional Federation of IAs in resolving the dispute/grievance. 4. In any case that the NIA and IA/FIA concerned: 1) does not agree to submit to the above process; 2) do not arrive on a mutually agreed solution; or 3) the dispute/grievance is not resolved through the above process, such shall be submitted to any court of law that has jurisdiction thereof or as indicated in the Section on Settlement of Disputes of the NIA-IA IMT Contract. XI. CONTRACT SUSPENSION

Contract suspension may be resorted to only when: a) the delivery of irrigation service to farmers; and b) the viability of operating and maintaining the irrigation system are negatively affected, as in the following cases: 1. Unresolved dispute/grievance resulting to disruption of the IMT contract arrangement In such case, the NIA through the IMO under the direction and supervision of the RIO shall temporarily suspend the IMT Contract and shall take-over the management of irrigation operation and maintenance of the area covered by the IMT contract. During the IMT contract suspension, the NIA shall have the option to hire contract of servicesto complement its manpower in the management of the area covered by the contract. Resumption of the IMT Contract can be negotiated through the mutual agreement of the NIA IMO and the IA concerned. The Contract resumption has to be supported by a notarized NIA-IA Joint Resolution to such effect. 2. Poor NIA or IA IMT Performance affecting irrigation service and financial viability of the system

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Annex 2 The IMT Performance Evaluation of the NIA and the IA is evaluated by the procedure describe in Annex 9. This provides a system of monitoring and evaluating the performance of each party of their IMT Contract responsibilities. When the IMT performance rating of any or both parties is Satisfactory or lower, a NIA-IA consultation meeting with the participation of all members of the NIS System Management Committee (SMC) particularly the Local Government Unit (LGU) representative shall be conducted to discuss actions to be done to correct performance gaps. The NIA and the IA must support each other and work together to correct any problem on the performance of their IMT contract responsibilities in order to sustain efficient irrigation service to irrigated farmers and financial viability on the O&M of the irrigation system. However, in extreme cases where: a) the performance of any of the parties fails to improve or is equivalent to an adjective rating of Fair or lower for two (2) consecutive cropping seasons despite corrective efforts exerted; and b) when the performance of a party is negatively affecting the delivery of irrigation services to irrigated farmers and the financial viability of operating the IMT covered area and the irrigation system, any of the party can decide to write the other party for the suspension of the IMT contract within one month notice. In case the IA decides to write the suspension letter, this must be addressed to the Manager of the Irrigation Management Office, copy furnished the SMC members, Regional Irrigation Manager and the Deputy Administrator for Engineering and Operations at NIA Central Office. In case the NIA decides to write the letter, this must be addressed to the IA President, copy furnished the SMC members, Regional Irrigation Manager and the Deputy Administrator for Engineering and Operations at NIA Central Office. The IMT contract is deemed suspended upon receipt of the letter of suspension by the party concerned. In any case of contract suspension, the RIO must conduct an investigation in cooperation with the SMC and the Provincial and/or Regional Federation of IAs (whichever is appropriate) and submit a report with their recommendation to the NIA Administrator within one (1) month from Contract suspension. When the IMT Contract is suspended (as in Case 1 above) the NIA through the IMO under the direction and supervision of the RIO shall take-over the management of irrigation operation and maintenance of the area covered by the IMT contract and the NIA shall have the option to hire contract of servicesto complement its manpower in the management of the area covered by the contract. Re-negotiation of a suspended IMT contract must be done through mutual agreement of the NIA IMO and the IA subject to the fulfillment of failed obligations of one or both parties and the resolution of other issues that caused the contract suspension. XII. MONITORING AND EVALUATION (M&E) The M&E provides the IA and NIA the needed management tools in assessing achievements on improving the system O&M and IA development. Specifically, the M&E seeks to provide NIA with quantifiable basis in assessing the effectiveness of the IA in the performance of the turned over management responsibilities of the NIS specified in the IMT Contract. It also aims to provide the IA the means to evaluate the NIA performance in complying with its commitments in support to the IMT.

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Annex 2 There are two major components in the monitoring and evaluation (M&E) system for the implementation of the IMT Program, namely: a) NIA IMT Performance Evaluation; and b) the IA IMT Performance Evaluation. The evaluation guideline is presented in Annex 8. The NIA Performance is assessed on Indicators related to: 1) assistance for the organization and capability development of the IAs for performing their responsibilities under IMT; 2) operation, specifically the implementation of water delivery schedules based on O&M plan; and 3) repair, improvement and/or rehabilitation of the physical facilities (irrigation, drainage and roads). The indicators are basically lifted out from the various plans developed in Phase 3 (Participatory Planning Phase) of the IMT implementation Process. The eligibility of an IA to negotiate for an IMT Contract is determined based on the IA IMT Eligibility Criteria in Annex 8. After successfully negotiating and signing an IMT Contract, the seasonal IA IMT Performance is evaluated through the IA IMT Performance Evaluation, also discussed in Annex 8, which evaluates the IA performance on their responsibilities as specified in their IMT Contract. The IA IMT Performance Evaluation will be done by the NIA but such shall be presented and reviewed by the SMC. Any IA that signed an IMT Contract will be evaluated using the IA IMT Assessment at the end of every season on indicators of performance of their responsibilities in the IMT Contract and performance on organizational management, O&M and financial management following Annex 8. The IA IMT Performance Evaluation is different from the IA Functionality Survey2 which is conducted annually on three (3) major groups of indicators namely: a) Operation and Maintenance; b) Organizational Management; and c) Financial Management. XIII. IA O&M SEED FUND For new IAs or IAs which are not yet financially capable of financing their O&M cost, the NIA shall provide IA O&M Seed Fund equivalent to the IA O&M Cost Requirement for one cropping season or as agreed by both parties. The IA O&M Seed Fund shall be paid in full without interest by the IA upon receiving its incentives/ISF Share for the same season the seed fund was granted. The IA O&M Seed Fund can be provided from initial ISF collections subject to negotiation and agreement by both parties. An agreement to this effect must be made by the NIA and the IA during contract negotiation and included as a provision of the IMT Contract. XIV. ALLOCATION OF IA INCOME FROM IMT It is the policy of NIA to ensure the sustainability of the NIS whose management has been transferred to the IA. In order to attain this, the disposition of the IA yearly income must be balanced for the various operations expenses. It is also appropriate, as part of good financial management practices, to recommend expenditure ratios of various items as percent of total expenses or as percent of total income or as percent of the ISF share of the IA. This must be discussed between the NIA and the IA during the contract negotiation and the agreed allocation made part of the final IMT Contract. The yearly budget and expenditures of the IA is recommended at 40 percent for personal services and 60 percent for maintenance as follows: Particular I.
2

Personnel Services

Allocation as % of IA Compensation 40

The IA Functionality Survey has to be revised to consider changes on the IA responsibilities in the new IMT Model Contracts

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Annex 2 Allocation as % of IA Compensation 60 15 5 10 14 6 5 5 100

Particular II. Maintenance and Other Operating Expenses (MOOE) 1. Repair and Maintenance of Irrigation Facilities 2. Repair and Maintenance of Equipment 3. Collection Expenses 4. Office Operation and Maintenance 5. Repair and Maintenance or Patubigayan Trust Fund 6. Miscellaneous 7. Net Income for Capital Build-Up Total

Repair and maintenance (R&M) of irrigation facilities covers budget for expenses on canal clearing, canal repair and maintenance, water monitoring, fuel and oil and other related activities on the upkeep of irrigation facilities and structures under the responsibility of the IA. Repair and maintenance of equipment includes budget for spare parts, equipment repair and maintenance and labor for mechanic. Collection expenses include IA collection expenses, collection incentives, loss on sale of palay, loss due to shrinkage and hauling and drying fee. Office operation and maintenance includes office supplies, traveling expenses and per diem, cost incurred during BOD/General Assembly meetings, trainings and seminars, shares of TSAGs/member IAs/FIA from ISF collection incentives, fuel and oil, light and power, office improvement, interest expense, withholding tax, and vehicle registration. IA Repair and Maintenance or Patubigayan Trust Fund - a yearly allocation for repair and maintenance trust fund, mostly taken out from the net income, is also included to ensure availability of fund for special or emergency repairs. The yearly sum is accumulated if it is not spent on the corresponding year in order to ensure that the repair and maintenance fund will grow and be available for any major repairs in the future. The allocation shall be subject for review on a yearly basis by the Board of Trustees of the IA. Funds may be realigned from one expense item to another depending upon the needs. However, expenses for personal services shall be limited to 40% of ISF share. The allocations may be augmented from funds allocated out of the IA Repair and Maintenance or Patubigayan Trust Fund (PTF) and other sources, if any. Miscellaneous expenses all other expenses not included above. Net Income for Capital Build-Up the remaining percentage of the total budget will be earmarked for IA Capital Build-Up which could be used for other income generating activities or assistance to members through credit with the approval of the IA Board of Trustees. XV. FINANCING OF THE IMT PROGRAM The IMT Program shall be funded through on-going projects for new NIS under construction and existing NIS under rehabilitation and modernization. The Project Institutional Development Division (IDD) and the Regional Engineering and Operations Division (EOD) shall align all their institutional development programs to be consistent with this IMT policy. The Project Manager and the Regional Irrigation Manager shall make sure that the IMT Program is properly funded and supported.

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Annex 2

The existing NISs that are not covered under any on-going and proposed Projects shall pursue the IMT Program through the yearly allocation for NIS Repair and Rehabilitation Fund appropriated to the NIA through the General Appropriations Act. The Deputy Administrator of the Engineering and Operations Sector shall ensure that the NIS Repair and Rehabilitation Fund fully support the components of the IMT Program. As a general rule, five (5) percent of the allocation for civil works in all local and foreign funded projects must be allotted to support the IMT Program for the system or project (new) under repair, rehabilitation or construction. The budget, however, must be firmed-up through the preparation of an IMT Program of Work (POW). Copy of the POW must be submitted to the Deputy Administrator for Engineering for review and consolidation by the Operations Department. XVI. INSTITUTIONAL ARRANGEMENT The Irrigation Management Transfer (IMT) Program is the program of the National Irrigation Administration and every single unit of the agency has inherent functions and responsibility to perform in supporting its implementation. Within the NIA Rationalized Structure, the Administrator through the Office of the Deputy Administrator of the Engineering and Operations Sector shall be responsible for the overall management of the NIA IMT Program. This Office shall facilitate the formulation and issuance of policies, guidelines, directions and fund allocation for the implementation of the IMT Program subject to the approval of the Administrator and/or the NIA Board of Directors. It is also responsible for the monitoring and evaluation to determine the effectiveness of the Program The Operations Department (OD) through its Systems Management Division (SMD) and Institutional Development Division (IDD) shall take the lead in the implementation of the IMT Program: a) disseminate the IMT policies and guidelines; b) provide training to institutional development (ID) and relevant O&M staff at the RIO and IMO to prepare them to implement the IMT Program; c) assist the Regional Engineering and Operation Division (EOD) in preparing work and financial programs; d) assist the EOD in training institutional and O&M staff at the IMO and system levels; e) monitor and evaluate the implementation of the IMT Program; f) conduct assessment surveys as necessary; and g) assist the RIO and IMO in solving problems that affect the IMT Program implementation. The Regional Irrigation Manager through the Regional Engineering and Operations Division (EOD) shall take the lead in managing the IMT Program at the regional level and shall assist all IMOs within the region. At the Irrigation Management Office (IMO) level, the Division Manager through the O&M Section shall take the lead in managing the implementation of the Program for each NIS within the IMO coverage. At the system level, the most Senior Staff or Staff designated as head of the System through the Senior Irrigators Development Officers (SIDOs) and/or Irrigators Development Officers (IDOs), and/or Senior Water Resources Facilities Technicians (SWRFT) are the implementers of the IMT Program. As they stay in the field most of the time, the SWRFTs assigned at the system level are the direct link of NIA to the IA and farmers. They are expected to work closely with the IA officers, members and other farmers on a daily basis. They are expected to be the key NIA personnel who will observe and monitor the performance of the IAs, anticipate and/or identify problems, help the IA solve problems and assist them understand and practice prescribed

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Annex 2 procedures in O&M. Problems, issues, or concerns that are not resolved at the system level should be elevated to the SIDO/IDO at the IMO, then to the Head of the Irrigation Management Office (IMO) if the SIDO/IDO cannot solve these and so on up the management ladder. The scope of work of the SWRFTs at the system level on the implementation of the IMT Program, therefore, is redefined to include the increasing importance of assisting, monitoring and evaluating the IA in its functions and the NIA s diminishing scope of direct operation and maintenance work.

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Annex 3 MEMORANDUM OF UNDERSTANDING BY AND BETWEEN THE NATIONAL IRRIGATION ADMINISTRATION AND _________________________________________________________, Inc. KNOW ALL MEN BY THESE PRESENTS: This understanding executed and entered into this _____ day of ___________, 200__ in __________________________________________ by: The NATIONAL IRRIGATION ADMINISTRATION, a government-owned and controlled corporation created under Republic Act No. 3601 as amended by Presidential Decree No. 552 with principal office at Epifanio delos Santos Avenue, Quezon City, herein after referred to as NIA; and The ______________________________________, an organization of irrigated farmers, registered in accordance with the laws of the Philippines with SEC Registration No. __________ and principal office at _________________________________________, represented by its President, ___________________________________, hereinafter referred to as the ASSOCIATION. The Parties hereto witness that: WHEREAS, under the NIA charter and as reiterated under the Agriculture and Fisheries Modernization Act or RA No. 8435, NIA is Mandated to transfer the operation and maintenance (O&M) of lateral canals and all farm level facilities within this canal, in all National Irrigation Systems (NISs) to capable Irrigators Associations; WHEREAS, under the ______________________ Project the irrigation facilities and structures will be rehabilitated to make the system functional, as a requirement of IMT; WHEREAS, both parties agree that the system rehabilitation will be planned, implemented and monitored with the participation of the Association; WHEREAS, both parties agree to jointly test the completed works if these pass performance standards before the negotiation of IMT contracts; WHEREAS, the IA and its members agree to contribute 25% of wages from labor participation of IA members hired for rehabilitation works or from value of Pakyaw Contract awarded to IAs for the establishment of a IA Patubigayan Trust Fundor O&M Trust Fund as source of funds for the O&M activities within the IA irrigation service area; NOW THEREFORE, for and in consideration of the foregoing premises, the PARTIES bind themselves to the hereunder arrangements; A. Obligations of NIA 1. The NIA shall prepare a Program of Work (POW) for the irrigation system rehabilitation based on the joint NIA-IA Irrigation System Walk Through conducted on __________________ and on the agreed work priorities with the IA during the Rehabilitation Works Prioritization Conference conducted on ___________________ at the __________________________.

33

Annex 3 Based on the approved POW, the NIA in consultation with the IA prepare a manpower requirement schedule as basis of the IA in mobilizing its members for labor and in monitoring the Patubigayan Trust Fundor O&M Trust Fund . This should be attached as Annex A and form part of this MOU. 3. The NIA shall bear the cost of investigation and survey, plan preparation and other pre-construction engineering activities for the system rehabilitation. 4. The NIA shall likewise finance the cost of the irrigation system rehabilitation/restoration. 5. The NIA shall facilitate the conduct of a monthly joint NIA-IA inspection of rehabilitation works. 6. The NIA shall facilitate the conduct of a monthly joint NIA-IA System Rehabilitation Coordination Conference to discuss the progress of the rehabilitation and related problems/issues. 7. The NIA shall facilitate the conduct of inventory and test-run of the rehabilitated irrigation facilities and structures with the participation of the IA and prepare a report to be signed by NIA (through the Irrigation Superintendent) and the IA (through its President) witnessed by the RIO/CO representatives who participated in the activity. If there are items of work to be corrected, these shall be listed in the report and these shall be corrected by NIA through IA participation and another inventory and test-run shall be done after. This process will be repeated until both the NIA and the IA agree that the rehabilitation works are done according to the agreed POW of rehabilitation. 8. The NIA shall provide technical assistance on the organization/re-organization and strengthening or capability development of the IA to develop their capability (IA trainings) in performing their responsibilities in the IMT contract as well as manage their organization. 9. The NIA will provide opportunity for the involvement of women in all activities during project implementation as well as during the O&M phase. 10. The NIA shall provide the IA with necessary documents for O&M of the IA area (copies of Irrigation Fee Register (IFRs) of farmers, parcellary map, master list of farmers, forms for list of irrigated and planted areas, other O&M report forms) upon signing of the IMT Contract. B. Obligations of the Association 1. 2. 3. The Association through its IA President will sign (conform) the POW prepared by NIA as a result of the Rehabilitation Design/Plan Consultation Conference. The Association shall provide 100% labor requirement in the repair of facilities and structures located within the tertiary system (main farm ditch to the farms). The Association and its members must contribute 25% of wages from labor participation of IA members hired for rehabilitation works or from value of Pakyaw Contractawarded to IAs for the establishment of the IA Patubigayan Trust Fund or O&M Trust Fund . The Association shall follow the manpower requirement schedule prepared by NIA in mobilizing its members for labor participation. The Association shall participate in the conduct of a monthly joint NIA-IA inspection of rehabilitation works. The Association shall participate in a monthly joint NIA-IA System Rehabilitation Coordination Conference to discuss the progress of the rehabilitation and related problems/issues with NIA. The Association shall participate in the conduct of inventory and test-run of the rehabilitated irrigation facilities and structures with the participation of the IA and countersign the System Inventory and Test-Run Report. If there are items of work to be corrected, the IA shall see to it that these are listed in the report. (These shall be corrected by NIA through IA participation and another inventory and test-run 2.

4. 5. 6. 7.

34

Annex 3 shall be done after. This process will be repeated until both the NIA and the IA agree that the rehabilitation works are done according to the agreed POW of rehabilitation). 8. The Association shall enter into IMT Contracts with NIA after the completion of the civil works. 9. The Association shall identify officers and members who will attend IA trainings and study tours aimed at developing their capability to manage their organization and perform their O&M responsibilities in the IMT Contract. 10. The Association shall make available its Book of Accounts for use by NIA in the conduct of IA financial audit. C. Special Provisions 1. 2. 3. 4. 5. Both parties have equal access in the monitoring of costs and progress of civil works for the systems improvement in a manner mutually agreed by the parties. The Association shall submit itself to NIA supervision as a safeguard that the provisions of this MOU shall be faithfully observed and that the interest of members is protected. The NIA and the IA shall firm-up the irrigated area of the system after the completion of the rehabilitation works. The NIA and the IA shall negotiate the type of IMT contract that the IA can enter into and discuss and agree on the contract provisions. The NIA and the IA shall establish the System Management Committee (SMC) in consonance with NIA MC No. 36, Series of 1997 and No. 08, series of 2002 as the policy-making, planning and monitoring body for the O&M of the irrigation system. Members of the SMC must include line Local Government Units (LGUs), government line agencies and non-government organizations providing support or technical assistance on irrigated agriculture.

IN WITNESS HEREOF, the PARTIES to this UNDERSTANDING have hereunto signed this instrument this ________ day of ______________, 200__ For and in behalf of the IA: ________________________ IA President For and in behalf of the NIA: _________________________________ Manager, Irrigation Management Office

35

Annex 4 IRRIGATION MANAGEMENT TRANSFER CONTRACT BY AND BETWEEN THE NATIONAL IRRIGATION ADMINISTRATION AND THE (name of IA) KNOW ALL PERSONS BY THESE PRESENTS: This CONTRACT, executed and entered into this ___ day of (month and year), at (municipality and province) by: The NATIONAL IRRIGATION ADMINISTRATION, a government corporation with principal office at NIA Building, Epifanio delos Santos Avenue (EDSA), Diliman, Quezon City, and represented herein by (name of representative), who is authorized in his capacity as ( position of representative) of the (name of NIS), with office at (office address) and hereinafter referred to as the NIA; and The (name of IA), a water-users association duly organized and registered in accordance with the laws of the Philippines with principal office at (office address of the IA), and represented herein by (name of representative), who is authorized in his capacity as (position of representative) of the association and hereinafter referred to as the IA. WITNESSETH THAT: WHEREAS, the IA signifies its desire, willingness and readiness to manage, operate and maintain the (name of canal and/or NIS being transferred); WHEREAS, the IA has demonstrated its total cooperation and persistent enthusiasm by attending all activities in preparing the IA officers and members in their new and bigger roles in system operation and maintenance (O&M) under the Irrigation Management Transfer (IMT) Program; WHEREAS, the NIA, pursuant to its Charter and other relevant laws of the Philippines, and in accordance with its objective of improving O&M performance and sustainability of national irrigation systems (NIS), is promoting the delegation of the full or partial management of NIS to IAs; WHEREAS, the NIA is willing to transfer the management, operation and maintenance of the (name of canal and/or NIS being transferred) to the IA under its IMT Program;; WHEREAS, the IA has undergone and passed all the preparatory organization, training, participatory planning and consultations, and functionality assessment survey as established and required under the IMT Program; WHEREAS, both parties believe that the IMT Program will benefit the NIA, the IA and the farmers in terms of better irrigation service, improved agricultural production opportunity to all farmers, and equitable sharing of burden and benefits in O&M of irrigation facilities;

36

Annex 4 NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants hereinafter set forth, the NIA and the IA agree as follows: A. DEFINITION OF TERMS

The definition of important terms as contained in this contract is presented in Attachment 1 and specifically made an integral part of this Contract. B. THE TRANSFER MODEL IN THIS CONTRACT

The irrigation management transfer model applied in this Contract is Model [insert model number]1, which is described as [derive description from IMT Policy page 4 or from first paragraphs of Annex 5 (Model 1), Annex 5 (Model 2), Annex 5 (Model 3) and Annex 5 (Model 4)]1. C. GENERAL OBLIGATIONS OF THE NIA

The NIA shall have the following general obligations in this Contract: 1. Plan, implement and monitor its activities related to (a) Operations, (b) Maintenance and Repair; (c) Management of Fund for operation and maintenance (O&M). Provide capability development program such as on-the-job training to the IA on a) irrigation system management and operation and maintenance; b) organizational management; and financial management Assist the IA in formulating policies and procedures in the performance of its obligations under this Contract. Undertake the monitoring and evaluation of the performance of the IA relative to this Contract. Provide technical assistance to the IA particularly in the preparation of O&M plan and budget. Monitor and provide technical assistance to the IA in the implementation of their O&M plan and budget. Provide technical assistance and support to the IA for the promotion of Quick Turn-Aroundand Ratooncrop in between the Wet and Dry Seasons, to help the government in its program of increasing rice production and attaining rice sufficiency

2.

3. 4. 5. 6. 7.

D.

GENERAL OBLIGATIONS OF THE IA The IA shall have the following general obligations in this Contract: 1. Plan, implement and monitor its activities related to (a) Operations, (b) Maintenance and Repair; (c) Management of Fund for O&M in its area of jurisdiction.

Items in bracket are instructions and should be deleted in the final contract

37

Annex 4 2. 3. Prepare an annual O&M budget, allocating at least 60 percent to maintenance and other operating expenditures and, at most, 40 percent to personal services. Establish a Repair and Maintenance Trust Fundthat will get a yearly budget allocation equivalent to at least six percent (6%) of the yearly income of the IA. Unused amount in the fund shall accumulate and shall be reserved for any major repairs of irrigation facilities in the future. Formulate policies and procedures in the performance of its obligations under this Contract based on fair and equitable sharing of burdens, efforts and benefits at various levels of the organization, i.e., farmer-members, turnout service area group (TSAG), IA, and Federation or Council of IAs. Allow NIA access to the records, books of accounts, and other documents of the IA relative to the O&M of the subject irrigation facilities. Assist the NIA in promoting the program of increasing rice production through Quick Turn-Aroundand Ratooncrop in between the Wet and Dry Seasons.

4.

5. 6. E.

SPECIFIC RESPONSIBILITIES OF THE PARTIES

[The templates for the specific responsibilities and authorities of the NIA and the IA are presented as Annex 5. Select the appropriate attachment for the contract under negotiation and make this an integral part of this IMT Contract. Refer to this as Attachment 2 in the final contract]2. The specific responsibilities of the NIA and the IA are presented as Attachment 2 of this Contract. F. IA COMPENSATION, ISF COLLECTION SHARING SCHEME, PAYMENT SCHEDULE AND PAYMENT CRITERIA

[The determination of the IA compensation, ISF collection sharing scheme for current and back accounts, payment schedule and payment criteria are described in Annex 1, Annex 6 and Annex 7. These should be discussed and agreed by the NIA and the IA and made an integral part of this Contract. The format in Annex 1 can be adopted and used and titled Attachment 3 for the final IMT Contract.]2 The IA compensation, ISF collection sharing scheme for current and back accounts, payment schedule, payment criteria and penalties as agreed by the contracting parties are attached as Attachment 3 of this contract. G. ALLOCATION OF IA COMPENSATION AND ISF COLLECTION SHARE

[It is the policy of NIA to ensure the sustainability of the NIS whose management has been transferred to the IA. In order to attain this, the disposition of the IA yearly income must be balanced for the various operations expenses. It is also appropriate, as part of good financial management practices, to recommend expenditure ratios of various items as percent of total expenses or as percent of total income or as percent of the ISF share of the IA. During the contract negotiation, the NIA shall assist the IA formulate a fund allocation scheme and shall be made an integral part of this contract. The recommended percentage is discussed in Section XI of Annex 2] 2
2

Items inside bracket [ ] are instructions. Delete these in the final IMT contract.

38

Annex 4 The income of the IA from its IMT Contract Compensation shall be allocated as: ____ percent for personal services and ____ percent for maintenance and other operating expenses (MOOE). The detailed percentage allocations are as follows: Particular I. II. Personnel Services MOOE 1. Repair and Maintenance of Irrigation Facilities 2. Repair and Maintenance of Equipment 3. Collection Expenses 4. Office Operation and Maintenance 5. Repair and Maintenance or Patubigayan Trust Fund 6. Miscellaneous 7. Net Income for Capital Build-Up Total IA O&M SEED FUND Allocation as % of IA Compensation

100

H.

[For new IAs or IAs which are not yet financially capable of financing their O&M cost, the NIA shall provide IA O&M Seed Fund equivalent to the IA O&M Cost Requirement for one cropping season or as agreed by both parties. The IA O&M Seed Fund shall be paid without interest by the IA upon receiving its incentives/ISF Share at the end of the collection period of the same season the seed fund was granted. The IA O&M Seed Fund can be provided from initial ISF collections subject to negotiation and agreement by both parties. An agreement to this effect must be made by the NIA and the IA during contract negotiation and included as a provision of the IMT Contract]. The NIA shall provide the IA with IA O&M Seed Fund in the amount of PhP_________ which shall be taken out from initial ISF collections. The IA O&M Seed Fund shall be repaid without interest by the IA upon receiving its incentives/ISF Share at the end of the collection period of the same season the seed fund was granted. I. INSPECTION AND AUDIT

The IA shall permit the NIA to inspect the IA s book of accounts and financial records relating to its operations and to have such documents audited by Auditors appointed by the NIA, if so required by NIA. J. GENERAL PROVISIONS

Subject to Sections C, D, E and F of this Contract, the following General Provisions shall apply: 1. 2. 3. All repair works on the structures, conveyance and distribution facilities, and terminal facilities that can be done manually shall be the responsibility of the IA. All repair works that require the use of heavy equipment including those arising from events of force majeure shall be the joint responsibility of the NIA and the IA. The rights, authorities, and obligations of the IA defined in this Contract are not transferable to any individual or entity.

39

Annex 4 K. SPECIAL PROVISIONS 1. All rehabilitation and improvement works defined in the Program of Works jointly prepared by the NIA and the IA on the irrigation facilities that are subject of this Contract shall be satisfactorily completed by NIA within the prescribed period after this Contract has taken effect. NIA shall give priority to the IA as contracting party or its members as construction labor in any rehabilitation and improvement works that will be undertaken by NIA within the coverage of the IA. Seasonal NIA and IA IMT Performance Evaluation shall be done jointly by the NIA and the IA following formats shown in Annex 8 of the IMT Policy and which will be made part of this Contract. NIA shall provide the IA an office space free of charge until such time that the IA has established its own Association Office. Contract suspension may be resorted to when: a) the delivery of irrigation service to farmers; and b) the viability of operating and maintaining the irrigation system are negatively affected, as in the following cases: a. Unresolved dispute/grievance resulting to disruption of the IMT contract arrangement In such case, the NIA through the IMO under the direction and supervision of the RIO shall temporarily suspend the IMT Contract and shall take-over the management of irrigation operation and maintenance of the area covered by the IMT contract. During the IMT contract suspension, the NIA shall have the option to hire contract of services to complement its manpower in the management of the area covered by the contract. Resumption of the IMT Contract can be negotiated through the mutual agreement of the NIA IMO and the IA concerned. The Contract resumption has to be supported by a notarized NIA-IA Joint Resolution to such effect. b. Poor NIA or IA IMT Performance affecting irrigation service and financial viability of the system The IMT Performance Evaluation of the NIA and the IA is evaluated by the procedure describe in Annex 9. This provides a system of monitoring and evaluating the performance of each party of their IMT Contract responsibilities. When the IMT performance rating of any or both parties is Satisfactoryor lower, a NIA-IA consultation meeting with the participation of all members of the NIS System Management Committee (SMC) particularly the Local Government Unit (LGU) representative shall be conducted to discuss actions to be done to correct performance gaps. The NIA and the IA must support each other and work together to correct any problem on the performance of their IMT contract responsibilities in order to sustain efficient irrigation service to irrigated farmers and financial viability on the O&M of the irrigation system. However, in extreme cases where: a) the performance of any of the parties fails to improve or is equivalent to an adjective rating of Fairor lower for two (2) consecutive cropping seasons despite corrective efforts exerted; and b) when the performance of a party is negatively affecting the delivery of irrigation services to irrigated farmers and the financial viability of operating

2.

3.

4. 5.

40

Annex 4 the IMT covered area and the irrigation system, any of the party can decide to write the other party for the suspension of the IMT contract within one month notice. In case the IA decides to write the suspension letter, this must be addressed to the Manager of the Irrigation Management Office, copy furnished the SMC members, Regional Irrigation Manager and the Deputy Administrator for Engineering and Operations at NIA Central Office. In case the NIA decides to write the letter, this must be addressed to the IA President, copy furnished the SMC members, Regional Irrigation Manager and the Deputy Administrator for Engineering and Operations at NIA Central Office. The IMT contract is deemed suspended upon receipt of the letter of suspension by the party concerned. In any case of contract suspension, the RIO must conduct an investigation in cooperation with the SMC and the Provincial and/or Regional Federation of IAs (whichever is appropriate) and submit a report with their recommendation to the NIA Administrator within one (1) month from Contract suspension. When the IMT Contract is suspended (as in Case 1 above) the NIA through the IMO under the direction and supervision of the RIO shall take-over the management of irrigation operation and maintenance of the area covered by the IMT contract and the NIA shall have the option to hire contract of services to complement its manpower in the management of the area covered by the contract. Re-negotiation of a suspended IMT contract must be done through mutual agreement of the NIA IMO and the IA subject to the fulfillment of failed obligations of one or both parties and the resolution of other issues that caused the contract suspension. L. SETTLEMENT OF DISPUTE

The NIA through the Staff at the NIS level and the IA concerned shall make every effort to resolve amicably any dispute/grievance arising out of the IMT Contract. When a dispute/grievance is not amicably resolved by the contracting parties, the following process will be adopted. 1. The System Management Committee (SMC), is the first level of responsibility for resolving dispute/grievance at the system level. The SMC as specified in MC 36 s. 1997 is composed of concerned NIA Staff and IA/FIA Presidents. In the SMC the representation of relevant government agencies. LGUs and other institutions are on call basis or as need arises. Any conflict that is not settled by the SMC will be elevated to the Manager of the Irrigation Management Office (IMO) who will try to resolve such in coordination with the President and Board of Trustees of the Provincial Federation of IAs and concerned IMO Staff. If necessary, the mediation of the Provincial/Municipal Government may be sought for the resolution of the dispute/grievance. If the dispute/grievance is not resolved at the IMO level, such shall be elevated or endorsed to the Regional Irrigation Manager who will coordinate with the President and Board of Trustees of the Regional Federation of IAs in resolving the dispute/grievance.

2.

3.

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Annex 4 4. In any case that the NIA and IA/FIA concerned: 1) does not agree to submit to the above process; 2) do not arrive on a mutually agreed solution; or 3) the dispute/grievance is not resolved through the above process, such shall be submitted to any court of law that has jurisdiction thereof.

Notwithstanding, any reference to settlement of dispute by a court of law, the parties shall continue to perform their respective responsibilities under the Contract unless they otherwise agree. M. AMENDMENT

This Contract may be amended in part or in full through a written proposal by either party, subject to negotiation and mutual agreement by the parties. N. EFFECTIVITY

This Contract shall take effect immediately upon signing by both parties and approval of appropriate NIA authorities, and shall continue until terminated by mutual agreement of the parties. IN WITNESS WHEREOF, the parties hereunder affixed their signatures this ___th day of (month), in the year of our Lord, Twenty Hundred and (year) at the municipality or city of (town or city, province). For the NIA ___________________ For the IA ______________________

SIGNED IN THE PRESENCE OF: ________________________ _______________________ ________________________ _______________________

Approved: _________________________

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Annex 4

ACKNOWLEDGEMENT REPUBLIC OF THE PHILIPPINES ) ) SS BEFORE ME, this _______ day of _______________________, 20__, personally appeared: Name CTC No. Date/Place Issued

Known to me and known to be the same persons who executed the foregoing instrument consisting of _______ (__) pages including this page of acknowledgement, and acknowledged to me that the same is their free and voluntary act and deed, as well as the free and voluntary act and deed of the principals they represent. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal at the place and on the date first above written.

NOTARY PUBLIC

Doc. No. ______; Page No: ______; Book No. ______; Series of ______.

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Annex 4 Attachment 1 IRRIGATION MANAGEMENT TRANSFER CONTRACT DEFINITION OF TERMS 1. Irrigation Management Transfer - refers to the processes involved in the take over by the Irrigators Associations (IA) of the management, operation and maintenance of the national irrigation systems (NIS), wholly or partially, depending on the size of the irrigation system and capacity of the IA. Operation (O) of irrigation systems refers to the activities involved in diverting water from the source and conveying and distributing it to the point of application in the farmers fields. The principal tasks in operation are 1) preparation of cropping calendar and schedule of farming activities, 2) measurement of water requirements and supply, 3) conveyance and distribution of available water to headgates of lateral canals, 4) distribution of water to turnouts, 5) application of water to farm plots, and 6) drainage of excess water from fields. Maintenance (M) refers to the activities undertaken for keeping the irrigation system in good operating condition at all times within the limitations of available resources to attain maximum use and economic life of the system facilities. The principal tasks in maintenance are: 1) routine maintenance that include removal of silt at flow measuring devices, clearing of floating debris accumulated at the crests of proportioning and duckbill weirs, remedial repairs to minimize leakage from control gates and check structures, remedial measures to prevent overtopping of canal embankments, greasing or oiling of gates; and 2) periodic maintenance that include cutting of vegetation from canal embankments, and reshaping and cleaning canal prism. Major facilities - refer to any of the following: diversion works (dams, intakes, pump stations, and similar structures), main, lateral canals and service roads, headgates, siphon, drop with road crossing, thresher crossing, conveyance flume, and end checks of main or lateral canals. Terminal facilities - refer to any of the following: turnout structure and gate, main and supplementary farm ditches, division boxes, and farm drains. Irrigation Service Fee or ISF refers to the fee that an individual farmer or group of farmers, as the case may be, is obliged to pay to NIA for the irrigation service provided to them. Current Account Collectible refers to the ISF that the individual farmer or group of farmers, as the case may be, is obliged to pay the NIA for the immediate past cropping season. Current account for the immediate past wet season should be paid not later than (insert last month) after which it becomes a Back Account. Current account for the immediate past dry season should be paid not later than (insert last month) after which it becomes a Back Account. ISF collection efficiency is the ratio, expressed in percent, of the actual collections to the current account collectible Old Back Account - refers to all unpaid ISF, which are collectible prior to the initial effectivity of this Contract. The amount of this account shall be established by NIA on or before the signing date of this Contract. This may not be included in the irrigation fee register (IFR) to be maintained by the IA.

2.

3.

4.

5. 6.

7.

8. 9.

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Annex 4 10. New Back Account - refers to all unpaid ISF which become collectible after the effectivity date of this Contract. Repair work - refers to any construction-related activity that must be done to bring back the facility to normal operation and/or condition. Emergency repair refers to construction/restoration work that has to be undertaken and completed without delay in order to continue the operation of the irrigation system or part thereof for a particular cropping season and/or to save standing crops. Irrigators Associations (IA) - The term irrigators associations refers to the various levels of water users associations in various NIS that include but not limited to individual IAs, Council of IAs (CIA), Federation of IAs (FIA), Confederation of IAs (CFIA), and Irrigation Service Cooperatives (ISC). Service area - refers to the firmed-up number of hectares covered within the jurisdiction of the irrigation system or IA, as the case may be. Recoverable area is part of the service area that could be irrigated upon completion of the rehabilitation and improvement works. Expansion area is not part of the service area but which is adjacent, and which could be irrigated upon completion of the rehabilitation and improvement works Irrigated area - refers to the actual irrigated and planted number of hectares within the coverage of the system or IA, as the case may be, and reported in the list of irrigated and planted area (LIPA) in a given season. Benefited area - refers to the number of hectares in a given season that was irrigated, planted and which produced at least 2 tons of unmilled rice (palay) per hectare (40 cavans per hectare).

11. 12.

13.

14. 15. 16. 17.

18.

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Annex 5 (Model 1) NIA AND IA IMT RESPONSIBILITIES (Model 1) Transfer Model No. 1 The NIA manages the entire NIS but transfers specific operation and maintenance activities to the IA. Facilities under the IA responsibility: Station Name of Canal From To No. of Structures Service Area, ha

No. of TO

Total

Length

3.873 km

28

10

579

Facilities under the Joint Responsibility of NIA and IA: (Only if applicable as discussed in the column IA responsibility on Maintenance succeeding table) Station Service No. of Name of Canal No. of TO Area, ha Structures From To

Total

Length

NIA Responsibility Manages the entire system but transfers specific operation and maintenance activities to the IA. Specifically the NIA have the following responsibilities: Operation

IA Responsibility The coverage of the transferred O&M responsibilities will be the IA area. The specific responsibilities transferred to the IA are as presented in Section VIII of this document: Operation

1. Prepare operations plan one month before start of a cropping season. 2. Disseminate information on water delivery and planting schedule to farmers through the different IAs within the system. 3. Manage the diversion, delivery and distribution of irrigation water to different lateral headgates and turnouts. 4. Establish discharge monitoring points and provide stage-discharge rating tables to IA. Monitor discharges on main canal and lateral headgates. 5. Collect, compile and summarize LIPA reports from IAs and WRFTs. 6. Resolve water-related conflicts among IAs and or farmers brought out by IAs within the irrigation system. 7. Call meetings and conferences to discuss problems encountered on operations and formulate solutions with

1. Coordinate with NIA on the preparation of Operation Plan within the IA area. 2. Assist NIA in disseminating information on water delivery and planting schedules to farmers with the IA area. 3. Monitor discharges at the IA lateral headgate. 4. Monitor status of farming activities within IA area and, prepare and submit weekly LIPA reports. 5. Distribute irrigation water equitably among farmers within the IA area. 6. Resolve water-related conflicts among farmers and/or TSAGs within the IA area. 7. Attend meetings and conferences called by NIA regarding operations problems and formulation of solutions. 8. Assist in the dissemination of information to the farmers within the IA area.

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Annex 5 (Model 1) IA Responsibility the IAs. 9. Removal/drainage of excess water from 8. Prepare system operation performance fields. and disseminate information to farmers Maintenance Coverage: Lateral canals through the IAs. 9. Provide the IA with copies of Masterlist and/or portion of Main Canals within the IA of farmers and parcellary map for the IA area of responsibility as agreed with the area. NIA. Maintenance 1. Undertake all maintenance works at the diversion works, main canal, lateral canals and canals structures within the system except on areas with contract with IA. 2. Undertake all repair works on irrigation and drainage canals and structures within the system. 3. Undertake maintenance of service roads within the system. On ISF Collection 1. Prepare the ISF bills of individual farmers and farm lots and bundle the bills based on TSA and IA. 2. Distribute the ISF bills to the IAs in areas with IMT contracts. In areas outside the IMT, distribute the bills to individual farmers. 3. Collect from paying farmers in coordination with the IA and issue official receipts. 4. Record ISF collections, assess ISF collection efficiency and determine the amount of incentive for each IA with IMT contract. 5. Undertake necessary accounting and auditing activities on financial transactions of the system office. 6. Pay IA remuneration on canal maintenance and share on ISF collections and other remunerations promptly based on agreed upon frequency or collection status. 1. Periodic maintenance that include manual desilting and cutting of vegetation on canal embankments on an agreed schedule with NIA. 2. Routine maintenance that include manual removal of silt at flow measuring devices, clearing of floating debris accumulated at the crests of proportioning and duckbill weirs and inlet of structures, remedial repairs to minimize leakage from control gates and check structures, remedial measures to prevent overtopping of canal embankments, greasing or oiling of gates. 3. Prevent the following: (a) planting of trees or any vegetation on canal embankments; (b) construction of building or any structure on canal embankments; (c) dumping of garbage or any waste inside canals or on the embankments; (d) tying animals on canal embankments; (e) wallowing of carabaos in the canals; (f) construction of turnouts or similar structures without prior authority from NIA; and (g) immediately report to NIA any acts by a person or group of persons that disrupt water deliveries and/or destroy any irrigation facility or structure. Note: Desilting of canals, where this could be done manually, shall be the responsibility of the IA. Where the operation could only be done with the use of heavy equipment, this shall be the joint responsibility of the IA and NIA. Where NIA has suitable equipment, the Manager of the Irrigation Management Office (IMO) deploys the equipment for desilting work and the IA contributes by providing fuel and oil. In areas where the IA deploys its own equipment or obtains equipment assistance from LGU for desilting NIA Responsibility

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Annex 5 (Model 1) NIA Responsibility IA Responsibility canal sections identified and delineated as joint responsibility of the IA and NIA, the fuel and oil cost shall be borne by the NIA.Such sections are determined through joint NIA-IA walk-through one of the items to be discussed and agreed during contract negotiation and shall be made part of the contract. ISF Collection 1. Distribution of irrigation service fee (ISF) bills. 2. Campaign for payment and assist NIA in the collection of ISF. 3. Monitor the ISF collections within the IA area to determine status and IA incentives from collections. 4. Disseminate to members ISF collection status and the amount of IA incentives. Note: Depending on the capacity and willingness of the IA, ISF collection can be an added responsibility of the IA especially in NISs that have very limited NIA Staff under the NIA rationalized structure. This must be discussed and agreed during the NIA-IA IMT contract negotiation.

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Annex 5 (Model 2) NIA AND IA IMT RESPONSIBILITIES (Model 2) Transfer Model 2 NIA manages the main system, from the headworks to the main canal up to the headgates of lateral canals and transfers to the IA the management of the laterals, sublaterals and terminal facilities. Facilities under the IA responsibility: Station Name of Canal From To No. of Structures No. of TO Service Area, ha

Total

Length

Facilities under the Joint Responsibility of NIA and IA: (Only if applicable as discussed in the column IA responsibility on Maintenance in the succeeding table) Station Service No. of No. of Name of Canal Area, ha Structures TO From To

Total

Length

IA Responsibility The IA manages the whole length of a specified Manages the main system, from the lateral including all irrigation facilities downstream headworks to the head gates of lateral of the headgate of the lateral covered by the IA. canals. The specific obligations of the The specific responsibilities transferred to the IA NIA are: are: Operation 1. Prepare jointly with IAs and the FIA the operation plan for the entire system and the IA area that includes cropping calendar, schedules of farming activities, programmed area for irrigation, water allocation and delivery schedules. 2. Establish and calibrate discharge monitoring points and provide IA with stage-discharge rating tables. 3. Train IA in observing the measuring points and utilizing the rating tables. 4. Deliver appropriate irrigation diversion requirements at the headgate of IA based on agreed upon programmed area and schedule. 5. Monitors and evaluate the Operation 1. Prepare the operation plan for the IA lateral with NIA one month before initial delivery of water every cropping season. 2. Disseminate information on water delivery and planting schedules to farmers with the IA area. 3. In coordination with the NIA, initiate establishment and calibration of discharge monitoring points. 4. Monitor and distribute irrigation water equitably among IAs, sub-laterals and turnouts (TO). 5. Safeguard the water rights of all farmers regardless of the proximity of their farms to the headgate or point of water supply delivery to the IA.) 6. Monitor and record discharges on all agreed upon observation points and submit data to NIA. 7. Submit operation status reports to NIA that include water situation, list of irrigated and planted area (LIPA).

NIA Responsibility

49

Annex 5 (Model 2) NIA Responsibility discharges at the headgate of the laterals and progress of farming activities within the system. 6. Formulate O&M policies, rules and regulations and sanctions for the NIS. 7. Assist the IA in formulating and implementing O&M rules and regulations and sanctions. 8. Provide the IA copies of the updated parcellary maps considering updated master list of farmers/landowners submitted by IAs. 9. Resolve water-related conflicts among IAs in the system area (if any occurs). 10. Removal/drainage of excess water within the coverage of the NIS. 11. Conducts pre-season, mid-season and post-season O&M review and planning for the NIS in coordination with IAs/FIA. 12. Provide the IA with copies of Masterlist of farmers, IFRs and parcellary map for the IA area. 13. Provide capability development to the IA/FIA on operations. Repair and Maintenance IA Responsibility 8. Resolve water-related conflicts among farmers and/or TSAGs within the IA area. 9. Attend meetings and conferences called by NIA regarding operations problems and formulation of solutions. 10. Formulate and enforce policies, rules and regulations on operations including appropriate sanctions for violators. 11. Update master list of water users by TSA every cropping season or as often as necessary. 12. Removal/drainage of excess water from fields. Repair and Maintenance - Coverage: Lateral canals and/or portion of Main Canals within the IA area of responsibility as agreed with the NIA. 1. Prepare yearly repair and maintenance plan jointly with NIA on the facilities within the IA area of coverage. 2. Undertake repair and maintenance works based on the plan earlier prepared with the NIA. 3. Routine maintenance, include manual removal of silt at flow measuring devices, clearing of floating debris accumulated at the crests of proportioning and duckbill weirs and inlet of structures, remedial repairs to minimize leakage from control gates and check structures, remedial measures to prevent overtopping of canal embankments, greasing or oiling of gates. 4. Periodic maintenance that include manual desilting and cutting of vegetation on canal embankments. 5. Coordinate and cooperate with NIA in undertaking repair works that need heavy equipment. 6. Prevent the following: (a) planting of trees or any vegetation on canal embankments; (b) construction of building or any structure on canal embankments; (c) dumping of garbage or any waste inside canals or on the embankments; (d) tying animals on canal embankments; (e) wallowing of carabaos in the canals; (f) construction of turnouts or similar structures without prior authority from NIA; and (g) immediately report to NIA any acts by a person or group of persons that disrupt water deliveries and/or destroy any irrigation facility or structure.

1. Prepare yearly repair and Removal/drainage of excess water from fields. 2. Prepare maintenance plan for the whole system. 3. Provide the IA with maintenance guidelines for irrigation facilities. 4. Regularly monitor the implementation of the repair and maintenance plan by the IA and provide regular feedback to IA with suggestions for improvement. 5. Assist the IA in undertaking repair works that need utilization of heavy equipment. 6. Assist the IA in formulating policies, rules and regulations for repair and maintenance of irrigation facilities. 7. Attend monthly meetings of the IA Board of Directors and provide technical assistance on repair and All routine and periodic maintenance tasks within maintenance works as deemed the coverage of the IA area are transferred to the IA except mechanized desilting works. Where necessary.

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Annex 5 (Model 2) NIA Responsibility IA Responsibility 8. Provide capability development desilting could only be done with the use of heavy training on maintenance to the equipment, this shall be the joint responsibility of IA/FIA. the IA and NIA. These sections should be specifically defined in the IMT contract by citing the ISF Collection canal name and stationing. Such sections are determined through joint NIA-IA walk-through and 1. Provide the IA copies of the one of the items to be discussed and agreed during irrigation fee registers (IFR). contract negotiation. Desilting done through the 2. Prepare ISF bill of the IA based on joint effort of the IA and NIA is implemented as the submitted LIPA and deliver this follows: promptly to the IA. 3. Train IA billing clerks or 1. Where NIA has suitable equipment, the bookkeepers in preparing ISF bills Manager of the Irrigation Management Office and maintaining IFRs. (IMO) deploys the equipment for desilting work 4. Monitor regularly the progress of and the IA contributes fuel and oil. ISF collections and provide 2. Where the IA deploys its own equipment or assessment feedback to IA. obtains equipment assistance from LGU for 5. Issue official receipt for every desilting canals, the fuel and oil cost shall be remittance of ISF collections by the borne by the NIA. IA. 6. Update NIA File of individual ISF Collection farmer s IFR based on ISF collection report submitted by the 1. Prepare seasonal or annual financial plan and IA. budget based on O&M plans giving utmost 7. Conduct regular and spot audits of importance to operations and maintenance IA collectors and books of obligations of the IA. accounts. Provide feedback to IA 2. Receive the ISF bill from NIA and prepare ISF on audit findings. bills for individual farmers and consolidate by 8. Pay IA share on ISF collections and TSA and/or member-IAs for easier distribution other remunerations promptly within the IA area. based on agreed upon frequency or 3. Distribution of ISF bills to individual farmers and collection status. campaign for ISF payment. 9. Keep and safeguard seasonal file 4. Collection of ISF payments from farmers within reports on: a) LIPA; and ISF its coverage from farmers within its coverage. collection as reference during the 5. Safeguarding and remitting ISF collections to NIA-IA assessment and the NIA. reconciliation of ISF collections, 6. Regularly submit ISF collection report to the collection efficiency and NIA and disseminate collection progress to IA remittances, and as back-up copies members and farmers. of IA Files. 7. Establishment, updating and maintenance of irrigation fee registers (IFR) within the IA service area. Note: The preparation of ISF bills is considered for turn-over to the IA. However, since ISF bill preparation is computerized, unless the IA procure their own computer and have trained personnel to do the job, this responsibility cannot be turned-over to the IA. Hence, when the IA lacks the equipment and manpower to do ISF bill preparation, the responsibility shall be done by the NIA but the cost for such shall be considered as part of the NIA Cost in the determination of the O&M Cost Break-Even Pointand the NIA-IA ISF collection share. This shall be discussed and agreed during the NIA-IA IMT Contract negotiation. The responsibility will be turned-over to the IA once they attain the capability to perform the job and at that time the IA and NIA ISF collection share will be re-negotiated.

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Annex 5 (Model 3) NIA AND IA IMT RESPONSIBILITIES (Model 3) Transfer Model 3 The NIA Manages the headworks and portion of main canal up to the junction of the first lateral canal headgate. The IA is responsible on the management, operation and maintenance (O&M) of the rest of the system from the junction of the first lateral canal headgate down to the farm level facilities. This is an expanded form of Model 2. Facilities under the IA responsibility: Station Name of Canal From To No. of Structures Service Area, ha

No. of TO

Total

Length

Facilities under the Joint Responsibility of NIA and IA: (Only if applicable as discussed in the column IA responsibility on Maintenance in the succeeding table) Station Service No. of Name of Canal No. of TO Area, ha Structures From To

Total

Length

IA Responsibility Management and/or Operation and Maintenance Manages the headworks and portion of (O&M) of the rest of the system from the junction of the main canal up to the junction of the first first lateral canal headgate down to the farm level lateral canal headgate. The specific facilities. This is an expanded form of Model 2.The responsibilities of the NIA are: specific responsibilities transferred to the IA are: Operation 1. Prepare jointly with IAs and the FIA the operation plan for the entire system and the IA area that includes cropping calendar, schedules of farming activities, programmed area for irrigation, water allocation and delivery schedules. 2. Establish and calibrate discharge monitoring points and provide IA with stage-discharge rating tables. 3. Train IA in observing the measuring points and utilizing the rating tables. 4. Deliver appropriate irrigation diversion requirements at the headgate of IA based on agreed upon programmed area and schedule. 5. Monitors and evaluate the Operation 1. Prepare the operation plan for the IA lateral with NIA one month before initial delivery of water every cropping season. 2. Disseminate information on water delivery and planting schedules to farmers with the IA area. 3. In coordination with the NIA, initiate establishment and calibration of discharge monitoring points. 4. Monitor and distribute irrigation water equitably among IAs, sub-laterals and turnouts (TO). 5. Safeguard the water rights of all farmers regardless of the proximity of their farms to the headgate or point of water supply delivery to the IA.) 6. Monitor and record discharges on all agreed upon observation points and submit data to NIA. 7. Submit operation status reports to NIA that include water situation, list of irrigated and planted area (LIPA). 8. Resolve water-related conflicts among farmers and/or TSAGs within the IA area. 9. Attend meetings and conferences called by NIA

NIA Responsibility

52

Annex 5 (Model 3) NIA Responsibility discharges at the headgate of the laterals and progress of farming activities within the system. 6. Formulate O&M policies, rules and regulations and sanctions for the NIS. 7. Assist the IA in formulating and implementing O&M rules and regulations and sanctions. 8. Provide the IA copies of the updated parcellary maps considering updated master list of farmers/landowners submitted by IAs. 9. Resolve water-related conflicts among IAs in the system area (if any occurs). 10. Removal/drainage of excess water within the coverage of the NIS. 11. Conducts pre-season, mid-season and post-season O&M review and planning for the NIS in coordination with IAs/FIA. 12. Provide the IA with copies of Masterlist of farmers, IFRs and parcellary map for the IA area. Repair and Maintenance 1. Prepare yearly repair and Removal/drainage of excess water from fields. 2. Prepare maintenance plan for the whole system. 3. Provide the IA with maintenance guidelines for irrigation facilities. 4. Regularly monitor the implementation of the repair and maintenance plan by the IA and provide regular feedback to IA with suggestions for improvement. 5. Assist the IA in undertaking repair works that need utilization of heavy equipment. 6. Assist the IA in formulating policies, rules and regulations for repair and maintenance of irrigation facilities. 7. Attend monthly meetings of the IA Board of Directors and provide technical assistance on repair and maintenance works as deemed necessary. IA Responsibility regarding operations problems and formulation of solutions. 10. Formulate and enforce policies, rules and regulations on operations including appropriate sanctions for violators. 11. Update master list of water users by TSA every cropping season or as often as necessary. 12. Removal/drainage of excess water from fields. Repair and Maintenance 1. Prepare yearly repair and maintenance plan jointly with NIA on the facilities within the IA area of coverage. 2. Undertake repair and maintenance works based on the plan earlier prepared with the NIA. 3. Routine maintenance, include manual removal of silt at flow measuring devices, clearing of floating debris accumulated at the crests of proportioning and duckbill weirs and inlet of structures, remedial repairs to minimize leakage from control gates and check structures, remedial measures to prevent overtopping of canal embankments, greasing or oiling of gates. 4. Periodic maintenance that include manual desilting and cutting of vegetation on canal embankments. 5. Coordinate and cooperate with NIA in undertaking repair works that need heavy equipment. 6. Prevent the following: (a) planting of trees or any vegetation on canal embankments; (b) construction of building or any structure on canal embankments; (c) dumping of garbage or any waste inside canals or on the embankments; (d) tying animals on canal embankments; (e) wallowing of carabaos in the canals; (f) construction of turnouts or similar structures without prior authority from NIA; and (g) immediately report to NIA any acts by a person or group of persons that disrupt water deliveries and/or destroy any irrigation facility or structure. All routine and periodic maintenance tasks within the coverage of the IA area are transferred to the IA except mechanized desilting works. Where desilting could only be done with the use of heavy equipment, this shall be the joint responsibility of the IA and NIA. These sections should be specifically defined in the IMT contract by citing the canal name and stationing. Such sections are determined through joint NIA-IA walk-through and one of the items to be discussed and agreed during contract negotiation. Desilting done through the joint effort of the IA and NIA is implemented as follows: 1. Where NIA has suitable equipment, the Manager of

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Annex 5 (Model 3) IA Responsibility the Irrigation Management Office (IMO) deploys the ISF Collection equipment for desilting work and the IA contributes fuel and oil. 1. Provide the IA copies of the 2. Where the IA deploys its own equipment or obtains irrigation fee registers (IFR). equipment assistance from LGU for desilting 2. Prepare ISF bill of the IA based on canals, the fuel and oil cost shall be borne by the the submitted LIPA and deliver this NIA. promptly to the IA. 3. Train IA billing clerks or ISF Collection bookkeepers in preparing ISF bills and maintaining IFRs. 1. Prepare seasonal or annual financial plan and 4. Monitor regularly the progress of budget based on O&M plans giving utmost ISF collections and provide importance to operations and maintenance assessment feedback to IA. obligations of the IA. 5. Issue official receipt for every 2. Receive the ISF bill from NIA and prepare ISF bills remittance of ISF collections by the for individual farmers and consolidate by TSA IA. and/or member-IAs for easier distribution within the 6. Update NIA File of individual IA area. farmer s IFR based on ISF 3. Distribution of ISF bills to individual farmers and collection report submitted by the campaign for payment. IA. 4. Collection of ISF payments from farmers within its 7. Conduct regular and spot audits of coverage from farmers within its coverage. IA collectors and books of 5. Safeguarding and remitting ISF collections to the accounts. Provide feedback to IA NIA. on audit findings. 6. Regularly submit ISF collection report to the NIA 8. Pay IA share on ISF collections and and disseminate collection progress to IA members other remunerations promptly and farmers. based on agreed upon frequency or 7. Establishment, updating and maintenance of collection status. irrigation fee registers (IFR) within the IA service 9. Keep and safeguard seasonal file area. reports on: a) LIPA; and ISF collection as reference during the NIA-IA assessment and reconciliation of ISF collections, collection efficiency and remittances, and as back-up copies of IA Files. Note: The preparation of ISF bills is considered for turn-over to the IA. However, since ISF bill preparation is computerized, unless the IA procure their own computer and have trained personnel to do the job, this responsibility cannot be turned-over to the IA. Hence, when the IA lacks the equipment and manpower to do ISF bill preparation, the responsibility shall be done by the NIA but the cost for such shall be considered as part of the NIA Cost in the determination of the O&M Cost Break-Even Point and the NIA-IA ISF collection share. This shall be discussed and agreed during the NIA-IA IMT Contract negotiation. The responsibility will be turned-over to the IA once they attain the capability to perform the job and at that time the IA and NIA ISF collection share will be re-negotiated. NIA Responsibility

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Annex 5 (Model 4) NIA AND IA IMT RESPONSIBILITIES (Model 4) Transfer Model 4 The NIA transfers to the IA the full management and use of the irrigation system including the headworks and provides technical assistance to the IA on the management of their organization and the O&M of the irrigation system. NIA Responsibility NIA transfers to the IA the management of the entire system including the headworks and provides only technical assistance to the IA on the management of their organization and the O&M of the irrigation system. IA Responsibility The IA manages the entire system. It becomes responsible of O&M planning implementation, monitoring and evaluation for the entire system, the setting up and collecting ISF rates, and irrigation system improvement/modernization program.

The IA will pay NIA a System Rental Fee equivalent to the money of 1.50 cavans of dry paddy value (computed at the government support price of palay at the time of billing) per hectare per season based on the firmed-up service area of the system. The Rental Fee will cover the cost of technical assistance and cost of NIA is responsible on using the irrigation facilities and structures. monitoring, evaluation and provision of technical The System Rental Fee is payable in two (2) equal installments assistance of the IA. for each season (wet and dry seasons). Payment of the Rental Specifically NIA will do the Fee installments shall be within one month from the end of ISF following responsibilities: collection period for every season. 1) Provision of technical assistance to the IA on the preparation of O&M plans of the system. 2) Monitoring and evaluation of the O&M of the Irrigation System. 3) Monitoring and evaluation of the IA organizational management. 4) Provision of technical assistance and supervision on the O&M of the system. 5) Provision of technical assistance on the capability development of the IA. 6) In case of force majeure like typhoons and earthquake where the system suffers major damages, the NIA will survey the damages and do detailed engineering works for the repairs to be done in consultation and cooperation with the Specifically, the IA does the following responsibilities for the entire system service area: Operation 1. Prepare operation plan for the system NIA one month before initial delivery of water every cropping season. 2. Disseminate information on water delivery and planting schedules to farmers. 3. In coordination with the NIA, initiate establishment and calibration of discharge monitoring points. 4. Monitor and distribute irrigation water equitably. 5. Safeguard the water rights of all farmers regardless of the proximity of their farms to the headgate or point of water supply delivery.) 6. Monitor and record discharges on all agreed upon observation points and submit data to NIA. 7. Submit operation status reports to NIA that include water situation, list of irrigated and planted area (LIPA). 8. Resolve water-related conflicts among farmers and/or TSAGs. 9. Attend meetings and conferences called by NIA regarding operations problems and formulation of solutions. 10. Formulate and enforce policies, rules and regulations on operations including appropriate sanctions for violators. 11. Update master list of water users by TSA every cropping season or as often as necessary. 12. Conducts pre-season, mid-season and post-season O&M review and planning with the participation of the NIA and TSAG leaders, and members of the SMC.

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Annex 5 (Model 4) NIA Responsibility IA. 7) Finance 70% of the works to be done in case of damages by force majeure and/or major repair and rehabilitation. 8) Responsible for the implementation of the repair works due to damages by force majeure and/or major repair and rehabilitation. in cooperation with the IA. 9) Conducts at least 4 supervisory visits of the IA/NIS per season. 10) Provide the IA with copies of Masterlist of farmers, IFRs, parcellary maps, irrigation system map showing irrigation facilities and structures and simplified operation manual for the system. 11) Update NIA File of individual farmer s IFR based on ISF collection report submitted by the IA. 12) Keep and safeguard seasonal file reports on: a) LIPA; and ISF collection as reference during the NIA-IA assessment and reconciliation of ISF collections, collection efficiency and remittances, and as back-up copies of IA Files. IA Responsibility 13. Removal/drainage of excess water from fields. Repair and Maintenance 1. Prepare yearly repair and maintenance plan. 2. Undertake and finance regular repair and maintenance work for the system. 3. Assist the NIA in conducting survey works and detailed engineering design for repairs of damages due to force majeure . 4. Finance at least 30% of the cost of repair works to be done for damages due to force majeure and/or major repair and rehabilitation. This could be in the form of cash, labor and materials. 5. Assist the NIA in the implementation of the repair works due to damages by force majeure and/or major repair and rehabilitation. 6. Prevent the following: (a) planting of trees or any vegetation on canal embankments; (b) construction of building or any structure on canal embankments; (c) dumping of garbage or any waste inside canals or on the embankments; (d) tying animals on canal embankments; (e) wallowing of carabaos in the canals; (f) construction of turnouts or similar structures without prior authority from NIA; and (g) immediately report to NIA any acts by a person or group of persons that disrupt water deliveries and/or destroy any irrigation facility or structure. ISF Collection 1. Prepare seasonal or annual financial plan and budget based on O&M plans giving utmost importance to operations and maintenance obligations for the whole system. 2. Prepare ISF bills for individual farmers and consolidate by TSA and/or member-IAs for easier distribution to all irrigated farmers within the system. 3. Distribution of ISF bills to individual farmers and campaign for payment. 4. Collection of ISF payments from farmers within its coverage from farmers within its coverage. 5. Safeguarding ISF collections. 6. Regularly submit to the NIA copies of ISF collection reports and disseminate collection progress to IA members and farmers. 7. Establishment, updating and maintenance of irrigation fee registers (IFR) within the system service area.

Note: The preparation of ISF bills is considered for turn-over to the IA. However, since ISF bill preparation is computerized, unless the IA procure its own computer and have trained personnel to do the job, this responsibility cannot be turned-over to the IA. Hence, when the IA lacks the equipment and manpower to do ISF bill preparation, this shall be done by the NIA but the cost of doing this shall be determined and agreed by the NIA and the IA and shall be paid by the IA along with the Irrigation System Rental Fee. This shall be discussed and agreed during the NIA-IA IMT Contract negotiation. The responsibility will be turnedover to the IA once they attain the capability to perform the job.

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Annex 6 IA COMPENSATION AND NIA-IA ISF CURRENT ACCOUNT COLLECTION SHARING SCHEME (Model 1) Guideline for determining the IA compensation and ISF Collection share for Model 1 Contract. 1. For Canal Maintenance This will be negotiated by the NIA and IA considering the standard labor capacity for clearing estimated at 220 m2/hour and the wage rates in the area based on the Regional Wage Board or Prevailing Market Rates whichever is higher, at the time of billing. Sample Computation: Given the following data: 1) Canal length = 3.5 kilometers 2) Average width of canal embankment to be cleaned (above operating water level) = 0.30 meters on each side. 3) Prevailing labor rate in the area is P300/day Computation 1) Area to be cleaned = (3.50 km) X (1,000 meters/km) X (0.30 meters/side) X (2 sides) = 2,100 m2 2) Number of days to clean the given canal length by one person = (2,100 m2) / (220m2/day) = 9.45 days 3) The remuneration of the IA for every canal clearing and maintenance for the given canal length is: = (9.45 days) X P300/day = P2,863.64 per clearing The sample computation shows that for the given data and information, the IA will be compensated at P2,863.64 per clearing. The rate will change depending on the current labor rates in the area at the time of billing/payment. The prescribed vegetation clearing is at least once in 45 days or about 3 times per season (5 months) but not more frequent that once a month or 5 times per season. 2. NIA-IA Sharing Scheme The IA shall be granted incentive for its performance of specific O&M responsibilities and campaigning for payment of current ISF collectibles from farmer-beneficiaries within the IA service area. A base ISF collection levelmust be agreed by the NIA and the IA. The
suggested base ISF collection level to be negotiated with the IA is 55%. If this is the agreed base collection level, the IA starts to have a share of the ISF collection at percentages above 55% to 100%.

The IA ISF collection share is computed as percentage of the total collection which will be at 0% for collection at 55%(or the agreed cut-off collection level) up to the maximum of 15% when ISF collection reaches 100% of the total collectibles. This means that the IA will have a share of one-third percent (1/3%) of the total collection for every one (1) percent increase on

57

Annex 6 ISF collection from 70%. The computation of the percentage share of the IA is illustrated as in the 3 sample computations below. The final percentage share of the IA will be based on the Current ISF Collection Efficiency attained at the end of the collection period. Computation on how 1/3 % was arrived at: Share of the IA for every percent increase in collection from 55% = 15% divided by 100% minus 55%, or this is equal to = 15/(100 - 45) = 15/45 = 1/3 Sample computation 1 1. Actual collection reached 100% 2. The incremental increase of collection from 55% is = 100 55 = 45% 3. Percentage share of the IA = 45 X (1/3) = 15% of total actual collections at 100% Sample computation 2 1. Actual collection reached 56% 2. The incremental increase in collection from 55% to 56% = 56 55 = 1% 3. The Percentage share of the IA = 1 X (1/3) = 0.333% of the total actual collections at 56% Sample computation 3 1. Actual collection is at 55.01% 2. The incremental increase in collection from 55.01% = 55.01 - 55.00 = 0.01% 3. The percentage share of the IA = 0.01 x (1/3) = 0.00333% of the total collections at 55.01% The current account collection efficiency (CE) is the ratio of collection from current account against current account collectible, expressed in percent. In this arrangement, the SWRFT/Collector issues the Official Receipt (OR) to paying farmers and shall be accountable for all ORs and ISF collections. The IA merely assists the SWRFT/Collector in the collection of ISF payments through campaigning for payments and other assistance to motivate irrigated farmers to pay.

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Annex 6 NIA-IA ISF CURRENT ACCOUNT COLLECTION SHARING SCHEME (Model 2) The repair and maintenance of canals is part and parcel of the responsibility of the IA in the Model 2 Contract and shall not be given separate compensation besides their share of ISF Current Collection as it is considered an integral part of their share from the current account collection which will be determined through this guideline. Any discount granted by the IA to individual farmer for prompt payment of current account in cash shall be charged against the share of the IA. It is, therefore, up to the IA whether or not to continue granting discount to individual farmers. 1. Model 2 Gravity The share of the IA from current account collections shall be subject to negotiation with the NIA based on the concept of fair sharing of burden and benefits . In the concept of fair share of responsibilities and benefits , responsibilities shall be interpreted as the responsibility of each party in the O&M of the area being considered for transfer; and benefits shall be interpreted as the share of each party on the ISF collection which is estimated based on their share of the break-even point O&M cost within the area considered for transfer. Hence, it will be necessary to do an open and transparent estimation of the cost that each party will incur when the IA assumes irrigation management responsibilities for a Model 2 contract. a. The Share of NIA on the Break-Even O&M Cost must include: 1) O&M Cost of NIA at System level expressed in P/hectare of NIS Firmed-Up Service Area. This shall include: a) Personnel services cost. This covers salaries and wages plus other personnel services cost such as GSIS and Health Insurance. b) Maintenance and Other Operating Expenses excluding IA Remunerations and Shares 2) Cost due to IMO Technical Support which is composed of same items as above expressed on P/hectare of the Total Firmed-Up Service Area of all NISs covered by the IMO. 3) Cost due to RIO Technical Support which is composed of same items as above expressed in P/hectare of the Total Firmed-Up Service Area of all NISs covered by the RIO. 4) Cost due for the NIA Central Office at 10%1. To get the share of the NIA of the total Break-Even O&M Cost, the total of cost items 1) , 2) , 3)and 4)above will be multiplied to the Total Firmed-Up Service Area of
1

The estimated percentage share of the NIA Central Office is at 13% at full Salary Standardization implementation and full Rationalization Plan implementation as computed by the Institutional Development Department (IDD). However, since the NIA CO is also getting income from 5% Management Fee, equipment rental, etc., 10% is recommended.

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Annex 6 the IA subject for IMT. b. The share of the IA on the Break-Even O&M Cost must include: The O&M Cost of IA in the performance of its responsibilities on the O&M of the IA area under Model 2 shall include: 1) Personnel services cost for the performance of IA responsibilities under Model 2. This covers salaries and wages of IA employees (such as billing clerk, bookkeeper) for O&M; incentives of IA Offices/Leaders; etc. 2) Maintenance and Other Operating Expenses. This covers travelling expenses, communications, supplies and materials, office maintenance (if any), repair and maintenance of facilities and equipments, insurance, etc. 3) Overhead Cost due to technical support of the NIS IA Federation and Provincial/Regional IA Federation (if any) The total of items 1) , 2)and 3)above will be the share of the IA on the O&M BreakEven O&M Cost. The Total of the NIA and IA Share on the Break-Even O&M Cost will be considered the Total Break-Even O&M Cost within the IA Area of responsibility. Hence, the share of NIA will be the percentage of its O&M Cost to the Total Break-Even O&M Cost and the share of the IA will be the percentage of its O&M Cost to the Total Break-Even O&M Cost. The resulting percentage share will be the percentage share of each party to any amount of current ISF collected. 2. Model 2 Pump Systems All ISF collections shall first be allocated for payment of 50% of the energy cost. The other 50% of the energy cost will be subsidized by NIA in consideration of MC No. 41 s.2007. Sharing of ISF collections in excess of 50% of the energy cost, shall be negotiated by the IA and the NIA based on the concept of fair sharing of responsibilities and benefits similar to that for Model 2 Gravity Systems above. Any discount granted by the IA to individual farmer for prompt payment of current account in cash shall be charged against the share of the IA. It is, therefore, up to the IA whether or not to continue granting discount to individual farmers for prompt payment of their ISF.

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Annex 6 NIA-IA ISF CURRENT ACCOUNT COLLECTION SHARING SCHEME (Model 3) 1. Model 3 Gravity Systems The share of the IA from current account collections shall be subject to negotiation with the NIA based on the concept of fair sharing of responsibilities and benefits . Computation of the NIA-IA Sharing Scheme shall follow the pattern explained for Model 2 above except that the share of NIA will proportionately reduce due to assumption of higher responsibility by the IA. The number of personnel of the NIA will also be reduced for the performance of responsibility from the dam to only a portion of the main canal up to the first lateral headgate. Any discount granted by the IA to individual farmer for prompt payment of current account in cash shall be charged against the share of the IA. It is, therefore, up to the IA whether or not to continue granting discount to individual farmers for prompt payment of their ISF. 2. Model 3 Pump Systems All ISF collections shall first be allocated for payment of 50% of the energy cost. The other 50% of the energy cost will be subsidized by NIA in consideration of MC No. 41 s.2007. Sharing of ISF collections in excess of 50% of the energy cost, shall be negotiated by the IA and the NIA based on the concept of fair sharing of responsibilities and benefits similar to that for Model 2 Gravity Systems above. Any discount granted by the IA to individual farmer for prompt payment of current account in cash shall be charged against the share of the IA. It is, therefore, up to the IA whether or not to continue granting discount to individual farmers for prompt payment of their ISF.

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Annex 6 NIA-IA ISF CURRENT ACCOUNT COLLECTION SHARING SCHEME (Model 4) Model 4 Gravity and Pump Systems The IA manages the entire system and becomes responsible for all the O&M activities including setting up and collecting ISF rates, and irrigation system improvement/modernization program. The IA will pay to NIA an Irrigation System Rental Fee equivalent to the money value of 1.50 cavans of dry paddy (computed at the government support price of palay at the time of billing) per hectare per year based on the firmed-up service area (FUSA) of the system. The Rental Fee will cover the cost of technical assistance and cost of using the irrigation facilities and structures. The Irrigation System Rental Fee is payable in two (2) equal installments of the money value of 75 kilograms for each season (wet and dry seasons). Payment of the Irrigation System Rental Fee installments shall be within one month from the end of ISF collection period for every season. In case of major damages due to force majeure , the NIA will be responsible for doing the detailed engineering and implementation of the repair works with IA participation and will finance 70% of the cost. The IA will finance 30% of the cost and assist the NIA in the planning and implementation of the physical works to be done.

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Annex 7 NIA-IA ISF BACK ACCOUNT COLLECTION SHARING SCHEME The share of the IA for the collection of ISF back accounts due to the NIA will be determined through the following guideline. IMT Contract IA Compensation/Incentives from ISF Collection on Back Accounts Back Accounts before the signing of the Model 1 Contract: IA Share: NIA Share: 25% of actual collection (principal and surcharges) 75% of actual collection (principal and surcharges)

Model 1

Back accounts after signing of the Model 1 contract: IA Share: NIA Share: 5% of actual collection(principal and surcharges) 95% of actual collection (principal and surcharges)

Back Accounts before signing of the Model 2 Contract: Model 2 IA Share: NIA Share: 25% of actual collection (principal and surcharges) 75% of actual collection (principal and surcharges)

Collection of ISF back accounts after signing of the Model 2 Contract will be the responsibility of the IA. (If the IA did not pass through Model 2 Contract) Back Accounts before the signing of the Model 3 Contract: Model 3 IA Share: 25% of actual collection (principal and surcharges) NIA Share: 75% of actual collection (principal and surcharges) Back accounts after signing of the Model 2 or Model 3 Contract will be the responsibility of the IA. (If the IA did not pass through Model 2 and Model 3 Contract) Back Accounts before the signing of the Model 4 Contract: IA Share: 25% of actual collection (principal and surcharges) NIA Share: 75% of actual collection (principal and surcharges) Back accounts after signing of the Model 2 or Model 3 or Model 4 Contract will be the responsibility of the IA.

Model 4

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Annex 8 NIA and IA IMT Performance Evaluation System There are two major components in the Monitoring and Evaluation (M&E) system for assessing the implementation of the IMT Program: a) NIA IMT Performance Evaluation; and b) the IA IMT Performance Evaluation. The NIA Performance is assessed on Indicators related to: 1) assistance for the organization and capability development of the IAs for performing their responsibilities under IMT; 2) operation, specifically the implementation of water delivery schedules based on O&M plan; and 3) repair, improvement and/or rehabilitation of the physical facilities (irrigation, drainage and roads). At the end of the season, the IAs and/or Federation of IAs will be given the NIA IMT Performance Evaluation Form and this will be completed through an IA BOD Meeting. The completed form will then be submitted to the Manager of the Irrigation Management Office (IMO) by the IA President for consolidation, analysis and discussion with the NIS Staff. The results of NIA IMT Performance Evaluation will be presented and discussed along with the IA IMT Performance Evaluation done by the NIA during the End-Season O&M Review and Planning Workshop with the members of the SMC for finalization and signing by the members of the SMC. During the workshop, discussion and agreements on what to be done by the NIA and FIA/IA(s) to improve their performance and the NIA-IA partnership must also be done. The results of this will form part of the basis of the succeeding season s NIA and IA IMT Performance Evaluation. The consolidation of the NIA IMT Performance Evaluation will be done using Table 1. Copies of this report must be submitted to the Engineering and Operations Division of the Regional Irrigation Office, the Operations Department of the Engineering and Operations Sector and to the Project Management Office of a Project covering specific NISs, for review, analysis as basis for provision of technical assistance. 1. NIA IMT Performance Evaluation The NIA IMT Performance Evaluation will be done by the SMC in session. The NIA shall make available to the SMC all pertinent source reports necessary as reference for the evaluation. The indicators are basically lifted out from the various plans developed in Phase 3 (Participatory Planning Phase) of the IMT implementation Process.
Activities I. 1. 2. 3. 4. II. Assistance to IA Training/Strengthening Assistance to IA O&M Review and Planning Meeting/ Workshop Walk-Through Inspection with the IA ISF Collection Feedback Reconciliation Conference Operation (Days with Qa=>Qp / Days canal has Q) X 30 or (No. of days of actual water delivery) / No. of agreed Scheduled Days of Water Delivery) X 100; Where Q = Discharge; subscript a = Actual and subscript p = plan or program and (Batches Conducted/Batches Planned) X 10 (Batches Conducted/Batches Planned) X 10 (Batches Conducted/Batches Planned) X 10 (Batches Conducted/Batches Planned) X 10 Computation Points 40 10 10 10 10

6.

Compliance to water delivery schedules

30

III. 7.

Construction/Repair/Improvement of Physical Facilities (Agreed construction/ repair/ improvement works to be done and/or supported by NIA. Include repairs due to force majeureor other calamities.) Irrigation (No. of actual works accomplished/No. of works planned) X 30

30 15

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Annex 8
Activities 8. 9. Drainage (under NIA responsibility) Roads along canals (under NIA responsibility) Computation (No. of actual works accomplished/No. of works planned) X 30 (No. of actual works accomplished/No. of works planned) X 30 Total Numerical Rating Points 10 5 100

Equivalent Adjective Ratings 1 2. 3. 4. 5. Outstanding Very Satisfactory Satisfactory Fair Poor 95 and above 85 to 94 75 to 84 65 to 74 Below 65

Prepared by: __________________________ IA President Conforme: (IA BOT, Signature over printed name) __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________ __________________________

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Annex 8 2. IA IMT Contract Eligibility Criteria and Performance Evaluation

Before an IA can be declared eligible in negotiating for any model contract, the IA performance will be evaluated on the IA IMT Contract Eligibility Criteria as follows: IA IMT Contract Eligibility Criteria The evaluation of the eligibility of the IA to negotiate for a contract will be done by the NIA with the results presented and consulted to the IA and the SMC. The following IA Eligibility Criteria will be used in determining the eligibility of an IA or FIA in negotiating for the different IMT Model Contracts. The following eligibility criteria must all be fulfilled/met for an IA to be declared eligible in negotiating for a specific IMT Contract. Contract 1. Model 1 1.1 Contract a. b. c. d. e. f. IA Eligibility Criteria Capability in performing responsibilities for Model 1 Contract Had been trained and can prepare LIPA for the IA Area of responsibility Had been trained and can perform repair and maintenance responsibilities. Had been trained and know strategies and timing of bill distribution. Had been trained and knows strategies and timing of ISF collection campaign. At least Satisfactory IA Functionality Rating for the last IA Functionality Evaluation. IA members agree to establish Trust Fund for repair and maintenance (Patubigayan Trust Fund) from their remunerations and ISF collection share once they enter into the Model 1 Contract. This must be established and maintained after the IA had signed a Model 1 Contract with the NIA. Other Criteria for Model 1 Contract IA Members had been consulted and agreed with the plan of the IA to negotiate for a Model 1 Contract (proof: Minutes of General Assembly Meeting and/or TSAG (all) Meetings) Has written and updated O&M Plans The IA is registered and in the active file of appropriate government entity (SEC or CDA) at the time of contracting, and is capable and willing to operate and maintain the NIS, wholly or partially. Have a TSAG and IA level sharing system on IA Remunerations and ISF Collection Campaign Incentives. 75% or higher IA Membership At least 80% average IA members attendance in IA meetings and group activities The IA practices transparency in its financial transactions, i.e., prepares and disseminate regular financial statements/reports (at least once per season) to IA members. IA Annual Budget allocates at least 60% of income for O&M activities within the IA area of responsibility. IA has O&M Plans (Cropping Calendar/Pattern; Repair & Maintenance; Water Delivery & Distribution Schedule; and IA Budget/Financial Management Plan

1.2 a.

b.

c. d. e. f. g. h.

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Annex 8 Contract i. 2. Model 2 to 4 1.1 Contracts a. b. c. d. IA Eligibility Criteria Has written IA O&M Policies Capability in performing responsibilities for the IMT Contract (same criteria for Models 2 to 4 Contracts but the area coverage differs) IA has the capability to prepare LIPA for the IA Service Area IA has the capability to prepare ISF Bills for individual farmers/farm lots for IA Service Area The IA had distributed ISF more than 90% of ISF bills on or before harvest in two consecutive seasons. IA has the capability to collect Irrigation Service Fees (ISF). It has official receipts, ISF collection report forms, established system of collection and remittance, designated collectors, planned strategies on ISF collection, etc. IA has the capability to update and maintain Irrigation Fee Register (IFR) of individual farmers/farm lots The IA can or had performed well its repair and maintenance responsibilities. At least Very Satisfactory IA Functionality Rating for the last IA Functionality Evaluation. The IA has viability of 1.0 or better in the last wet and dry seasons. Is maintaining a Trust Fund for repair and maintenance (Patubigayan Trust Fund) Other Criteria for Model 2 or higher form of Contracts The IA is registered and in the active file of appropriate government entity (SEC or CDA) at the time of contracting, and is capable and willing to operate and maintain the NIS, wholly or partially. IA Members had been consulted and agreed with the plan of the IA to negotiate for the IMT Contract (proof: Minutes of General Assembly Meeting and/or TSAG (all) Meetings) Has written and updated O&M Plans Have a TSAG and IA level sharing system on IA Remunerations and ISF Collection Campaign Incentives. 90% or higher IA Membership 90% average IA membersattendance in IA meetings and group activities The IA practices transparency in its financial transactions, i.e., prepares and disseminate regular financial statements/reports (at least once per season) to IA members. IA Annual Budget allocates at least 60% of income for O&M activities within the IA area of responsibility. IA has O&M Plans (Cropping Calendar/Pattern; Repair & Maintenance; Water Delivery & Distribution Schedule; and IA Budget/Financial Management Plan Has written IA O&M Policies

e. f. e. f. g. 1.2 a.

b.

c. d. e. f. g. h. i.

IA IMT Performance Evaluation The IA IMT Performance Evaluation will be done by the NIA but such shall be presented and reviewed by the SMC.

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Annex 8 Any IA that signed an IMT Contract will be evaluated using the IA IMT Assessment at the end of every season on indicators of performance of their responsibilities in the IMT Contract and performance on organizational management, O&M and financial management. The rating sheet is presented below. This is different from the IA Functionality Survey1 which is conducted annually on three (3) major groups of indicators namely: a) Operation and Maintenance; b) Organizational Management; and c) Financial Management. At the end of the season, the NIA through the NIS Staff shall conduct IA IMT Performance Evaluation of all IAs within the coverage of the NIS. This can be done through the assistance of the Staff of the IMO Operations Section. The completed form will then be submitted to the Manager of the Irrigation Management Office (IMO) for consolidation, analysis and discussion with the NIS Staff. The results of the IA IMT Performance Evaluation will be presented and discussed along with the NIA IMT Performance Evaluation done by the IA(s) during the End-Season O&M Review and Planning Workshop with the members of the SMC for finalization and signing by the members of the SMC. During the workshop, discussion and agreements on what to be done by the NIA and IA(s) to improve their performance and the NIA-IA partnership will also be done. The results of this will form part of the basis of the succeeding season NIA and IA IMT Performance Evaluation. The consolidation of the IA IMT Performance Evaluation will be done using Table 2. Copies of this report (Table 2) must be submitted along with Table 1 to the Engineering and Operations Division of the Regional Irrigation Office, the Operations Department of the Engineering and Operations Sector and to the Project Management Office of a Project covering specific NISs, for review, analysis as basis for provision of technical assistance. For IAs with Model 1 Contract Indicators of Performance A. Organization Performance (25 points) 1. Extent of membership (5 points): 0.20% for every Points = (Percent percent membership in excess of 75% or membership maximum of 5 points for 100% membership 75) X 0.20 2. Seasonal financial statements prepared and Yes reported to IA members (5 points) No 3. Established income sharing at different IA levels Yes (5 points) No 4. Established repair and maintenance trust fund Yes (Patubigayan Trust Fund) (5 points) No 5. Preparation of Plans (5 points) a. Cropping calendar and pattern of planting b. Water delivery and distribution Prepared Not prepared Prepared Not prepared Prepared Not prepared 2 0 1 0 1 0 Criteria Points 25 5 5 0 5 0 5 0

c. Maintenance

The IA Functionality Survey has to be revised to consider changes on the IA responsibilities in the new IMT Model Contracts

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Annex 8 Indicators of Performance d. IA Budget and Financial Plan C. O&M Performance (40 points) 1. LIPA preparation (5 points) 2. Operation activities such as discharge or water level monitoring on specific points in the system (5 points) 3. Irrigated area percentage (8 points) = (irrigated/planted area divided by the programmed area) X 100; 0.40 points for every percent above 80%; 80% is 0.00 points; 100% is 8 and above 100% will have bonus points. 4. Benefited area percentage (7 points) = (benefited area divided by the irrigated/planted area) X 100; 0.35 points for every percent above 80%; 80% is 0.00 points; 100% is 7 points. 5. Good canal ratio (8 points)= (Length of well maintained canal divided by the Total length of canals2) X 100; 0.40 points for every percent above 80%; 80% is 0.00 points; 100% is 8 points. 6. Functional structure ratio (7 points)= (Number of functional structures divided the total number of structures) X 100; 0.35 points for every percent above 80%; 80% is 0.00 points; 100% is 7 points. C. Financial Performance (35 points) Prepared Not prepared Done Not done Points = (Actual % - 80) X 0.40 Criteria Prepared Not prepared Points 1 0 40 5 0 5 0

Points = (Actual % - 80) X 0.35

Points = (Actual % - 80) X 0.40

Points = (Actual % - 80) X 0.35

35 5

1. ISF Bill Distribution (5 points) (0.25 for every Points = (% of percent in excess of 80% distributed on or before bills distributed harvest time or a maximum of 5 points; 80) X 0.25 Performance of 50% and below is zero points) 2. ISF Collection Efficiency (10 points); 0.25 points for every percentage collection above 60%; 0 points for 60% collection; 10 points at 100% collection 3. IA Viability (10 points) = Total Income/Total Expenses); 0 points at 0.80 Viability and 10 points at 1.0 and higher viability; maximum of 10 points 4. Repair and Maintenance (RM) Expense Percentage (10 points); = RM Expense divide by the Total Expenses) X 100; 0.125 points for every percentage above 60%; 0 points at 60% and 10 points at 100% Rating Points = (Actual percentage collection 60) X 0.25 Points = (IA Viability 0.80) X 50 Points = (Actual RM Expense percentage 60) X 0.25

10

10

10

100

Well maintained canal is one that has no excessive vegetation, garbage, and narrow sections due to accumulated sediments

69

Annex 8 Equivalent Adjective Ratings 1. Outstanding 2. Very Satisfactory 3. Satisfactory 4. Fair (needs strengthening) 5. Poor (need to be re-organized and strengthened) Prepared by: __________________________ SWRFT/IDO Conforme: __________________________ NIS Office Head Signature over printed name 95 and above 85 to 94 75 to 84 65 to 74 Below 65

For IAs with Model 2, 3 or 4 Contract Indicators of Performance A. Organization Performance (20 points) 1. Preparation of O&M Plans (5 points) a. Cropping calendar and pattern of planting b. Water delivery and distribution Prepared Not prepared Prepared Not prepared Prepared Not prepared Prepared 2 0 1 0 1 0 1 0 5 5 0 5 0 5 0 40 Prepared Not prepared 5 0 Criteria Points 25

c. Maintenance d. IA Budget and Financial Plan

Not prepared 2. Extent of membership (5 points): 0.20% for every Points = (Percent percent membership in excess of 75% or membership 75) X maximum of 5 points for 100% membership 0.20 3. Seasonal financial statements prepared and Yes reported to IA members (5 points) No 4. Established income sharing at different IA levels Yes (5 points) No 5. Established repair and maintenance trust fund Yes (Patubigayan Trust Fund) (5 points) No B. O&M Performance (40 points) 1. LIPA preparation (5 points)

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Annex 8 Indicators of Performance 2. Operation and Maintenance Activities (5 points) a. Water distribution activities b. Repair and Maintenance 3. Irrigated area percentage (8 points) = (irrigated/planted area divided by the programmed area) X 100; 0.40 points for every percent above 80%; 80% is 0.00 points; 100% is 8 and above 100% will have bonus points. 4. Benefited area percentage (7 points) = (benefited area divided by the irrigated/planted area) X 100; 0.35 points for every percent above 80%; 80% is 0.00 points; 100% is 7 points. 5. Good canal ratio (8 points)= (Length of well maintained canal divided by the Total length of canals3) X 100; 0.40 points for every percent above 80%; 80% is 0.00 points; 100% is 8 points. 6. Functional structure ratio (7 points)= (Number of functional structures divided the total number of structures) X 100; 0.35 points for every percent above 80%; 80% is 0.00 points; 100% is 10 points. C. Financial Performance (35 points) 1. ISF Bill preparation and distribution (5 points) (0.25 for every percent in excess of 80% bills Points = (% of bills prepared and distributed or a maximum of 5 distributed 80) X points for 100% performance; Performance of 0.25 80% and below is zero points) 2. ISF Collection Efficiency (10 points); 0.50 points Points = (Actual for every percentage collection above 80%; 0 percentage collection points for 80% collection; 10 points at 100% 80) X 0.50 collection 3. IA Viability (10 points) = Total Income/Total Points = (IA Viability Expenses); 0 points at 0.80 Viability and 8 points 0.80) X 50 at 1.0 and higher viability; maximum of 10 points 4. Repair and Maintenance (RM) Expense Percentage (10 points); = RM Expense divide Points = (Actual RM by the Total Expenses) X 100; 0.25 points for Expense percentage every percentage above 60%; 0 points at 60% 60) X 0.25 and 10 points at 100% Rating Done Satisfactorily Not done Done Satisfactorily Not done Points = (Actual % 80) X 0.40 2.50 0 2.50 0 Criteria Points

Points = (Actual % 80) X 0.35

Points = (Actual % 80) X 0.40

Points = (Actual % 80) X 0.35

35

10

10

10

100

Well maintained canal is one that has no excessive vegetation, garbage, and narrow sections due to accumulated sediments

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Annex 8 Equivalent Adjective Ratings 1. Outstanding 2. Very Satisfactory 3. Satisfactory 4. Fair (needs strengthening) 5. Poor (need to be re-organized and strengthened) Prepared by: __________________________ SWRFT/IDO Conforme: __________________________ NIS Office Head Signature over printed name Note: For performance rating of Satisfactory or lower of any or both parties, a NIA-IA consultation meeting with the participation of other members of the NIS System Management Committee (SMC) particularly the Local Government Unit (LGU) representative shall be conducted to discuss actions to be done to improve the performance or correct performance gaps of the party concerned. Range 95 and above 85 to 94 75 to 84 65 to 74 Below 65

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