4 fig., 16 ref.; IIMI research report 21 IIMI, POB 2075 Colombo - Sri Lanka. E-mail: r.desilva@cgnet.com

This report cites a case study of the institutional implications of remodeling an old irrigation system in northern Pakistan. The process of planning and designing the Lower Swat Canal remodelling effort conspicously left out the critically important consideration on institutional issues such as water allocation rules, operational procedures, and organizational capacity for post-construction system management. Consequently, the changes in physical infrasructure in the remodeled system did not accompany corresponding institutional changes to support the required operation and maintenance responsibilities. Citing this example, the report draws the attention of the donors and the project planners to the institutional implications of current project preparation methods and concludes that the institutional constraints in modernizing old irrigation systems can be foreseen at the planning and design stages. The report advocates the need for an "institutional impact assessment" effort that assesses both the impact of infrastructure development design on the existing institutional framework and the related institutional improvements, as an essential component of project appraisal for irrigation system modernization in developing countries

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