ARMENIA REVISED IRRIGATED AGRICULTURE PROJECT PROGRAM

RIA OREANDA
Nov 5 2008
Russia

Yerevan. ">OREANDA-NEWS . November 5, 2008. The Governing Council
of Millenium Challenge Account-Armenia SNCO met at the Office of
Government, presided at by GC Chairman, RA Prime Minister Tigran
Sargsyan.

The Council discussed the revised Infrastructure activity of
the Irrigated Agriculture project of the MCA-Armenia program, as
well as the preliminary report on institutional strengthening of
irrigation management entities presented by the Consultant under of
the Water-to-Market activity of the Irrigated Agriculture project of
the MCA-Armenia program.

The MCA-Armenia Chief Executive Officer briefed the Council on the
changes effectuated in the contracts on design and technical control
under the Infrastructure activity of the Irrigated Agriculture project
of the MCA-Armenia program, as well as on the course of implementation
of the credit component of the Program.

The meeting has also discussed and approved the amendments to the
MCA-Armenia program procurements plan.

The Governing Council was reported on the outcome of the vote
for the new composition of the MCA-Armenia Beneficiaries Council
(2008-2009). The council also discussed the results of the vacancy
competition for the post of Assistant to MCA-Armenia SNCO Chief
Executive Director. Following discussion and endorsement by the
Governing Council, the nominees with highest interview scores and
the commission-proposed priority list will be sent to the MCC for
final approval.

With reference to the first agenda item, MCA-Armenia SNCO CEO Ara
Hovsepyan said that account taken of the depreciation of the US dollar
over the past few years and the rise in building material-related
and operating costs, it is impossible to complete the activities
specified in the Infrastructure component of the Irrigated Agriculture
project. As a result, the program needs reconsidering and an effective
selection of sub-components, considering the technical, economic,
environmental and social factors. The program revision started
last March and was completed late in September. In the words of Ara
Hovsepyan, revision work was attended by the representatives of local
and Washington offices of the MCC, together with the representatives
of Jacobs (MB) specialized organization. The team worked in close
cooperation with the RA Vice-Prime Minister, Minister of Territorial
Administration and the representatives of State Water Management
Committee by the Ministry of Territorial Administration. They
held consultations with water-user associations and communities and
conducted field visits. As a result, the final version of the concept
note on revision of the Infrastructure activity was developed and
subsequently approved by the Millenium Challenge Corporation.

Under the revised program, by September 2011, 6 main channels will have
been repaired, 7 natural flow systems engineered, 18 pumping stations
restored, the main collectors of the drainage system in Ararat valley
and artesian/deep-water wells rehabilitated, tertiary canals restored
with a 15% co-funding on the part of water user associations. The
total cost of the revised Infrastructure activity is USD 107.2 MN. As
a result of restoration / construction work, there will be 106,161
beneficiaries in 286 communities with a population of 473,360 (of
which 244,721 are women).

As result of discussions held between the Irrigation Activity
Consultant and the MCC, it has been decided to trust monitoring work
under the Infrastructure activity to a single specialized company as
this is supposed to provide for better technical control, as well as
help engage international experts in the works. This in turn will lead
to the transfer of new professional skills and international expertise.

The meeting noted that that the vote for the third generation of the
Council of Beneficiaries was held on September 27, 2008. Applications
were received from 396 civil society organizations registered and
operational in Armenia, including unions, funds and foundations,
water-user associations, consumer societies, as well as other
non-governmental and non-commercial organizations. A secret ballot
resulted in the election of 15 candidates inclusive of 4 women,
representative of 7 different marzes of the Republic of Armenia. The
closed ballot of October 13, 2008 delegated 5 members of the Council
of Beneficiaries to the Governing Council.

The MCA-Armenia SNCO Chief Executive Director also reported that as
of September 30, 2008, the program-stipulated loan to the amount of
USD 1.5 MN was earmarked in full, with all proceeds administered in
Armenian drams. The average size of lending was AMD 3.674.000.