The Southern Governorates Rural Development Project (SGRDP) is a comprehensive participatory rural development project covering three of the five southern Governorates of the Republic of Yemen, namely Hadramaut, Abyan and Lahij. Its objective is to alleviate poverty in rural areas of these three Governorates. A major component of the project is to develop virgin lands for agriculture and allocate each 5 feddan (FD) plot to those farmers who do not own land (1 FD= 4200 m 2 ). As the annual rainfall in the project area is less than 100 mm and since landlords and other farmers already own lands suitable for agriculture in the major wadis, the only source of irrigation water in the newly developed land is the groundwater (GW). The SGRDP is aware of the scarcity of water resources in the country, particularly in the project area; it therefore makes every possible effort to optimize the use of GW for irrigation by practical means. One way of reducing GW used for irrigation is by replacing major canals in the farms by buried pipelines. This method has been tried in small-scale individual farms outside the project area and it proved that farmers could adapt to the system without difficulty. Sprinkler and drip irrigation systems have been tried in many previous agricultural development projects in the country but with no apparent success, as far as the farmers' adoption of the method is concerned. Thus, the project, as the first stage to reduce the use of GW for irrigation in the newly developed areas, planned to eliminate, initially, the conveyance losses by replacing the open canals by buried PVC pipes. In this paper, it is attempted to show that the use of buried pipes in small scale irrigation schemes is financially feasible, even if the indirect and non-tangible environmental benefits are not considered.This paper deals only with special GW schemes recommended for the project area; however, the outcome could be generalized and applied elsewhere in the country.