El Mercado Negro.

The first phase of the WTTP was completed in 2005 and the results evaluated in a follow-up ICR report (World Bank, 2007).

The ICR noted that the actual growth in water demand fell far short of the projections in the SAR, thereby reducing the need for transfers of water from the Yellow River. The ICR ascribed it largely as a failure in the SAR to appreciate the extent and pace at which water- saving technologies would be adopted by industries in the area (World Bank, 2007:3). A number of factors contributed to the rapid change, not least the pricing structure enforced; the price of ground-water was only 40% of that of the surface water resource. While the economy kept growing at 6.6% p.a. between 1993 and 2002, water demand fell by 11.4% p.a. The ICR found that the utilisation of the installed capacity of the WWTP (which was half of the design capacity) was only 23% (World Bank, 2007:22).

The fact that the WWTP did not reach the transfer volumes envisaged in the SAR caused the ICR to state that a “physical target/year of the volume of water transferred from the Yellow River” should have been provided as part of the Monitoring and Evaluation design in the SAR (World Bank, 2007:8).

5.9.4 Discussion and evaluation

The SAR assumed that the required annual water transfer for each year in the future would be exactly equal to the deficit projected, the latter being the difference between the projected water demand and the sustainable yield of the local water resources. The SAR did not consider that there would be a likelihood of periods in future years that the receiving basin would have excess local yield available and that the required transfer quantities, therefore,

could be lower. The modelling of the source catchment, the Yellow River, was done independently from the modelling of the receiving catchment.

It would have been interesting to see what the hydrological conditions in the receiving basin were since the completion of the project and to compare that against the actual water transfers that had taken place since the completion of the WWTP. Unfortunately, despite several attempts, such information was not made available. However, a hydrograph over a twenty year period at the Hejin station near the confluence of the Fen River with the Yellow River is presented in Figure 5-14 (Australian Bureau of Meteorology, s.a.). From this graph can be deduced that the characteristics, especially regarding variability, of the Fen River are very similar to those of the rivers in South Africa, e.g. as depicted in Figure 5-15 for the Vaal River at Vaal Dam, with its relatively high coefficient of variation (CV) of 0.78 (Nel, 2012).

Figure 5-14: Stream-flow hydrology of the Fen River at Hejin

YEAR

A

ve

ra

ge

m

on

th

ly

f

low

(m

/s)

0 500 1000 1500 2000 2500 3000

YEAR

A

ve

ra

ge

m

on

th

ly

f

low

(m

ill

ion

m

)

Figure 5-15: Vaal River hydrology (naturalised) at Vaal Dam

As for the Vaal River, there would be periods that the receiving basin of the WWTP (i.e. the upper Fen) has conditions of excess yield. It is therefore quite reasonable that more water than the limit of the “sustainable yield” of the local resource, as set in the SAR, could be abstracted during such periods. The real-time model that predicted conditions seven days in advance automatically would have made adjustments to the required transfers based on the conditions in the receiving catchment.

The ICR pointed to the reduction in water demand as the reason for the under utilisation of the WWTP. This probably was the main reason, but the ICR did not consider the possibility that a contributory factor to the reduced transfers could be due to variable hydrological conditions in the receiving basin.

On the basis of the envisaged transfers, future variable costs of the scheme were calculated. This probably led to an overestimation of this cost component (as demonstrated), which would have affected the CBA assessments.

The actual growth in water requirements in the Taiyuan area was markedly reduced due to improved efficiencies of water use. This phenomenon lowered the need for water transfers and thus probably masked the expected lowering that could have been foreseen from an integrated systems context.

In conclusion: the appraisal approach followed in International Case Study 4 is evaluated against the criteria set in paragraph 5.3:

a) Neither of the two World Bank assessments, the SAR and the ICR, considered the need for an integrated hydrological assessment of the source and receiving basin, jointly, in a total systems context. No simulation of annual operations, and likely water quantities to be transferred, was performed

b) The assumption was made in both World Bank assessments, the SAR and the ICR, that the Wanjiazhai Water Transfer Project would be required to provide all

incremental water beyond the yield capability of the existing system.

It is thus concluded that the approach used in this case study was completely analogous to that of the Incremental Approach described in Chapter 1.

5.10 International Case Study 2: Water augmentation to South East