Biophysical and socioeconomic conditions of pre and post dam construction were assessed in one of the arid regions of Iran commanded by Minab dam. The methodology used in this study was drawn from the international organizations especially the World Commission on Dams and the United Nations for selection of the indicators for sustainable development relating to water resources projects. Commissioning of the dam in 1986 led to progressive expansion of the irrigated agriculture, which was almost doubled in year 2006. Results of the study revealed that there is significant positive impact of the irrigation infrastructures of the dam; for example literacy rate has increased from 41 % (pre project) to 74 % in 2006. Similarly, significant improvements were observed in health care, sanitation, education and other scopes. Nevertheless, for some of the targets only 50-60 % progress were made, whereas no significant achievements had been made in the others. Therefore, development did not match with the planned goals of the project. Deficiency in achieving the primary objectives, especially after many years of project completion, may be attributed to the management and implementation of the project. For effective project performance, a new institutional framework and guide lines are proposed in this article.