Guangzhong- Management Models

Six Irrigation Management Models from Guanzhong

Management reform models being used in Guanzhong in Shaanxi Province, China, are still evolving, and have slightly different characteristics in each of the area's nine Irrigation Districts. In general they are as follows:

Contracts

The government agency which owns the irrigation infrastructure, and has traditionally been responsible for its operation and maintenance, signs a contract with an individual (usually a local farmer, or former agency staff member). The agency retains property rights for the infrastructure within the Irrigation District. The rights and responsibility for managing the system, however, are transferred to the contractor. The contractor will operate and maintain the system for a fixed time period, usually 10 to 30 years. The contractor makes all water management decisions, and he is solely responsible for profits or losses of the contract.

In most cases, the agency requires the contractor to invest a specified amount of money to line and improve the laterals and sub-laterals. They also require the contractor to deliver a fixed volume of water. The contractor must pay a penalty if he does not deliver the expected volume. The contractor determines the service fees that farmers pay for irrigation, within a range established by the agency. He also must collect the water fees and pass them on to the local irrigation agency. In turn, the agency pays him the management fee that was agreed upon by the contract.

Lease

A lease is a slight modification from the contract system. It is generally only applied when the irrigation infrastructure is in relatively good condition. The local irrigation agency can lease out the right to operate and maintain the system without requiring the contractor to make a significant investment. Since the investment required is not as large, and the expected repayment period is less, leases tend to be much shorter. A typical lease lasts from 5 to 10 years, in contrast to contracts that can be as long as 30 years.

Water User Associations (WUA's)

In this model, groups of farmers served by the lateral are organized to form a legally incorporated association. The Water User Association (WUA) signs a contract with the irrigation agency (usually for 3 to 5 years) that clearly establishes the rights and responsibilities of both parties. The elected leaders of the WUA are responsible for operating the irrigation system using hired staff as well as farmer groups.

In most cases, a Representative Council is elected by the members of the WUA, and is responsible for most of the decision making for the WUA. The Representative Council, in turn, elects an Executive Committee, a Chairman, and one or two Executives. This model is most responsive to local needs, since farmers elect their own leadership.

Auction

The auction model is used extensively in Jinghuiqu District, one of the nine project areas. It is a variation in the contract model where the local irrigation agency ``pre-qualifies" three or four contractors to bid on the operation and maintenance (O&M) contract for the lateral canal. The agency sets a base bid, usually 2 Chinese yuan per meter of canal in the contract area. The contractors then publicly bid on the contract.

The bid amount is paid to the ID which in turn places it in an account from which contractors can borrow funds for canal improvements. With auction contracts, contractors are usually not required to invest a fixed amount or line a specified length of canal, but they do have to agree to intake a fixed volume of water. This volume increases by a specified amount, such as 3% annually. Consequently, contractors are encouraged to make investments to increase their service area in order to use additional water. The contractor is responsible for all O&M activities, including hiring and managing staff.

Joint Stockholders

This model converts communal ownership to shares. Portions of the irrigation system are divided into shares and these are sold to farmers, local residents, irrigation agency staff, and other local officials. Property rights belong to the individuals but the operation of the system is collective. The shareholders elect a 5-7 member Board of Directors including a Chairman of the Board as well as selecting a manager by inviting interested parties to apply for the position. The manager and hired staff are responsible for operating and maintaining the system as well as collecting the irrigation fees. Part of the funds from the sale of shares is used to improve laterals and sub-laterals as well as to expand the service area. In addition to paying O&M costs, a percentage of the irrigation water fees are used to pay a return on the investment to share holders.

Water Supply Companies

In contrast to the above five models that are primarily focused on one or two laterals, water supply companies cover a branch or a sub-branch and therefore serve all the laterals that take water off that branch. This can include up to 20 laterals. 

In most cases to date, Water Supply Companies have used the Joint Stockholder model in order to raise the large investments that are required to improve the branch canal and its multiple laterals. Shares in the company are usually sold to farmers, staff of the irrigation station, and local government officials with some restriction on the number of shares that any investor can hold to prevent individual control of company.

In a number of cases, these companies are assuming responsibility for the entire area previously managed by a local irrigation agency. As a result, these agency sections are phased out, although often their staff start working for the Water Supply Company. These companies cover much larger areas (often more than 10,000 ha) than in the other lateral reform models. Consequently, they have more staff. In some cases, the head of each lateral is a paid employee but also owns a share in the company.

References/For Further Reading

These papers or publications are available to INPIM members upon request.

Diemer, Geert. Monitoring and Evaluation (M&E) System for Irrigation Management Reform Component of Guanzhong Irrigation Improvement Project (GIIP), Shaanxi Province, China. World Bank, Washington, DC. 1999, 15 pages.

Wang Zhinong, et al. Irrigation Management Reform at the Lateral Canal Level in the Guanzhong Irrigation District, Shaanxi Province, China. 1999, 7 pages.

Johnson, Samuel III. Management Transfer in the Guanzhong Plain, Shaanxi Province, China. Tucson, Arizona, USA. 1999, 7 pages.