Privatizing Public Irrigation Tubewells in Pakistan: An Appraisal of Alternatives

Abstract

As part of its broader groundwater privatization programme, the Government of Pakistan is seeking to transfer to the private sector the management, operation, and maintenance functions of the system of public tubewel1s (called "SCARPs") which were installed to control waterlogging and salinity. This paper presents a micro level analysis of alternative privatization strategies. linear programming models of representative farms in SCARP I area of Punjab Province were developed to explore the efficiency and equity implications of various transition optio!'\S. Net benefits of supplemental water available from SCARP tubewel1s were estimated at about Rs 800 per acre, which are about three times higher than the existing level of O&M expenditure. Even without considering the}ong-term benefits of waterlogging control, this result implies that the SCARP programme has a high social rate of return. For particular SCARP tubewells which are uneconomical to repair and operate, replacing these tubewells with farmer-owned small tubewells appears likely to improve agricultural productivity and reduce government outlays. Operable SCARP tubewells should be kept in service unless they are replacCd by equal or greater alternative pumping capacity in the private sector to prevent waterlogging. Rural institutions should be strengthened to ensure efficient local level groundwater management.