Privatizing Public Irrigation Tubewells in Pakistan: An Appraisalof Alternatives

As part of its broader groundwater privatization program, the Government of Pakistan is seeking to transfer to the private sector the management, operation, and maintenance functions of the system of public tube wells (called “SCARPs”) which were installed to control water logging 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 options. Net benefits of supplemental water available from SCARP tube wells 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 long-term benefits of water logging control, this result implies that the SCARP program has a high social rate of return. For particular SCARP tube wells which are uneconomical to repair and operate, replacing these tube wells with farmer-owned small tube wells appears likely to improve agricultural productivity and reduce government outlays. Operable SCARP tube wells should be kept in service unless they are replaced 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.