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The Worid Bank

FOR OmCIAL USE ONLY

ReputN.6 5388

PROJECT COKPLETION REPORT

SUDAN

SECOND POWER PROJECT

(Credit 564-SU)

December 28, 1984

Energy DivisionEastern Africa Regional Office

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FOR OMCIL USE ONLYSUDAN

SECOND POWER PROJECT(Credit 564-SU)

PROJECT COKPLETION REPORT

Table of Contents

Page No.

PREFACE .................BASIC DATA SHEET .. _.---. . ..-. .HIGHLIGHTS ................................................. v

I. INTRODUCTION 1

II. PROJECr PREPARATION AND APPRAISAL 2

Origin, Preparation, Appraisal and Negotiations ....... 2Project Description ... . ......... 2Project Objectives .. 3

III. IMPLEMENTATION

Credit Effectiveness..... 4Project Execution. .... 4Reporting ..... 6Procurement ...... 6Project Costs. ... 6Disbursements .... 7Performance of Consultants, Contractors and Suppliers. 7

IV. OPERATING PERFORMANCE 7

V. FINANCIAL ASPECTS 8

Introduction .. 8Financial Results ........................ 8Billing and Collection ..................................... 10Accouniting and Audit .......................................... 11

VI. INSTITUTIONAL PERFORMANCE 11

Management and Organization Effectiveness ................... 11Staff and Training ........... ............... , 12

VII. PROJECT JUSTIFICATION 12

VIII. IDA PERFORMANCE 13

IX. CONCLUSIONS 14

Dverall Achievements ......... & ............................. 14Lessons Learned ......................................... 14

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may nDt otherwise be disclosed without World Bank authorization.

ANNEXES

1 Compliance with Hain Covenants of Legal Documents ........* 162 Awarded Contracts for Equipment and iorks .................. 183 Project Cost Estimate .............. .... 204 Schedule of Disbursements ....... * .... *.... . ..... ......... 215 PEWC - Actual and Estimated Income Statements - Consolidated 226 PEWC - Actual and Estimated Income Statements - Electricity . 237 PEwC - Actual and Estimated conDolidated Cash Flows ......... 248 PEMC - Actual and Estimated Consolidated Balance Sheet ***** 259 Return on Investment ............. ......... ........ 26

APPEIDIX A - Comments from the Government of Sudan .............. 27

PROJECT COINPLETON REPORT

SUDAN

SECOND POWE PROJECT(Credit 546-SU)

PREFACE

The Project constituted part of the power development program ofthe Public Electricity and Water Corporation (PEWC) of Sudan in the period1977-1981 and included the installation of a 42-NW generating unit atRoseires hydroelectric power station, addition of diesel generatingcapacities at Burri and Juba, extension of transmission and distributionnetworks, long-term planning studies, and management consultancy services.The IDA assisted in this with Credit 564-SU of US$23 m11lion, which wassigned on June 25, 1975 and made effective on October 29, 1975. Of thecredit amount $22.03 million was disbursed by November 30, 1981 and thebalance (US$0.97 million) was cancelled on that date. The Project CompletionReport (PCR) was prepared by the Eastern Africa Regional Office based on thestaff appraisal report, supervision missions' reports and other documentsavailable in the IDA files, as well as findings of a project completionmission which visited Sudan in October 1983.

The PCR summarizes the main points of particular interest. Itshows difficulties in achieving financial and institution-building objectivesin the Sudanese power supply industry and in carrying out project works inremote areas where local conditions have adverse impact on the pace ofproject execution. The PCR also notes the problems of excessive siltation ofwater reservoirs and inefficiency of power supply in Sudan where power lossesare excessively high and outages and shortages are common.

In accordance with the revised procedures for project performanceaudit reporting, this PCR was read by the Operations Evaluation Department(OED) but the project was not audited by OED staff. A draft copy of thisreport was sent to the Borrower (Government of Sudan) for its comments.Those comments which were received have been taken into account in finalizingthe report, and are attached to the report as Appendix A.

:-; , - .:' f -*. . -- :ii

SUDAN

SECOND POWER PROJECT(Credit 564-SU)

Key Project Data

Appraisal Actual orItem Expectation Current Estimate

Total Project CoD< (US$ million) 39.97 55.26Overrun (Z) a/ - 38

Credit Amount (USS million) 23 23 b/Disbursed 23 22Cancelled - 1

Date of Completion of Physical Components 12/78 2/81 c/Proportion of Time Overrun (Z) 0 110

Internal Rate of Returnon the Project (IRR) 20 & 10% d/ 14Z e/

Financial Performance 8% 1.5%-22.0Z f/Institutional Performance mixed g/

Cumulative Estimate and Actual Disbursements (US$ million)

Nov. 30As of June 30: 1976 1977 1978 1979 1980 1981 1981

(i) Appraisal Estimate 3.0 11.5 20.5 23.0 23.0 23.0 23.0

(ii) Actual 1.4 5.5 17.1 21.3 21.6 22.0 22.0(ii) as Z of (i) 47 48 83 93 94 94 94

a/ Excluding Juba, the cost overrun is US$11.39 million or 32X.'5/ Co-financed by OPEC Special Fund (US$9.5 million in 1979).c/ Except Juba diesel station (expected in 1984).If/ Roseires 20%, Juba 10%.e/ Roseires only.t/ Return on net fixed electricity assets.g/ Although satisfactory institutional/operational performance has not been

achieved, some improvements were made.

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OTHER PROJECT DATA

Item Original Revisions Actual

First Mentioned 1969Government's Application 1972Negotiations 10174Board Approval 5/22/75Credit Agreement Date 6/25/75Effectiveness Date 9/26/75 10/29/75Closing Date 12/31/79 12/31/80 6/30/81 a/

Borrower:The Democratic Republic of Sudan

Executing Agency:

The Public Electricity and WaterCorporation (PEWC)

Fiscal Year of the Executing Agency:

July 1 - June 30

Follow-on Project Name: Third Power Project (Credit 1006-SU)

a/ Final disbursement was made on February 22, 1982.

Mission Data

Month/ No. of No. of Man-Year Weeks Persons weeks Date of Report

Appraisal 2/74 3 3 9 04/25/75

Supervision

I 11/75 3.4 3 10.1 12/10/75II 7/76 3 2 8.4 08/07/76

III 2/77 1.5 4 6 03/02/77IV 10/77 3.2 3 9.6 01/27/78V 2/78 1.8 3 5.4 03/20/78

VI 8/78 5.7 2 11.4 09/27/78VII 6/79 1.4 2 2.8 08/03/79

VIII 3/80 2 1 2 05/08/80IX 11/80 1.8 1 1.8 12/19/80

X 4/81 1.4 1 1.4 06/12/81xXI 9/81 2 2 4 12/29/81XII 5/82 3 2 6 08/10/82

xIII 12/82 3 2 6 01/20/83xIV 10/83 2 1 2 12/15/83

Total 35.2 76.9

Currency Exchange Data

Appraisal US$1 £Sd 0.348

Intervening Years Average

1975-1977 US$1 - £Sd 0.351978-1980 US$1 - £Sd 0.501981-1982 US$1 - ESd 0.901983 US$1 - £Sd 1.31

v

PROJECT COM4PLETION REPORT

SUDAN

SECOND POWER PROJECT(Credit 546-SU)

HIGHLIGHTS

The project comprised the installation of hydro and diesel units,construction of transmission lines, studies and management consultancyservices. The project was intended to meet urgent short-term power demandand to correct PEWC/NEC's financial, operational and organizationaldeficiencies as well as improving the quality of its services (paras.2.02-2.03).

The project took almost twice as long to implement as envisaged atappraisal, and cost overrun was large (about 38Z) - paras. 3.06 and 3.10.The principal objectives of the project's physical facilities, with theexception of the Juba diesel power station, by and large have been achieved.Although the institutional and financial objectives of the credit have notbeen fully met, some improvements in PEWC/NEC's organizational structure weremade, a long-range development program was prepared and more appropriateelectricity pricing was established. However, much remains to be done forestablishing autonomous, technically competent, and financially viable powersupply entities in Sudan - paras. 6.01, 6.02 and 9.02(i) and (ii).

Among the lessons learned are the importance of studying, duringproject preparation, operational problems so that their impact could bereflected in project design and selection of equipment (paras. 2.01, 4.01 and9.02); the difficulty of achieving institutional and financial improvementswithin a power entity in context of an inefficient public sector beset withproblems of autonomy, weak organizational structure, lack of clearresponsibilities, loss of skilled personnel and low salaries (paras. 1.02,6.03 and 6.05); and the inability to implement timely investment programs toavoid chronic power supply shortages and frequent outages (paras. 1.03, 5.04,5.10 and 9.02).

PROJECT COMPLETION REPORT

SUDAN

SECOND POWER PROJECT(Credit 56'i-SU)

1. INTRODUCTION

1.01 Public power supply operations in Sudan are divided into eightregions. The major interconnected system is the Blue Nile Grid (BNG),which serves about 85% of customers. The isolated regions are mostlysupplied by small diesel generating stations. The per capita consumptionof electricity in 1982 was estimated at about 60 kWh and only 8Z of thetotal population has access to the public power supply. Over the ten-yearperiod (1972-1981) the growth of power generation was about 10%, althoughthere has been a sharp decline in the rate of growth in the last few years,when it was not possible to meet the full demand mainly because of delaysin contruction of new plants, frequent breakdowns in the power system, andlack or shortage of fuel and spare parts. Continuing shortages of powerare also expected in the next two or three years.

1.02 The Ministry of Energy and Mining (MEM) has official jurisdictionover the development of energy resources and power supply activities inSudan. Prior to 1982, power and water supply operations were carried outby the Public Electricity and Water Corporation (PEWC), the originalbeneficiary of Credit 564-SU. According to a Presidential Decree, PEWC wassplit up into the National Electricity Corporation (NEC), the KhartoumWater Authority, and a number of regional organizations. NEC isresponsible for constructing and operating power generation andtransmission facilities of the national grids and distributing power inKhartoum area, supplying power to the regional organizations, establishingbulk power supply tariffs, ensuring technical uniformity throughout theSudan, and providing technical services and training to the regionalelectricity organizations. The implementation of the organizationalchanges will be carried out gradually and may be completed over a number ofyears. Delays in establishing and making operational the regionalelectricity organizations could result in further deterioration of thepower supply in the regions. The power subsector has still seriousinstitutional problems, resulting from various causes, including unclearlines of responsibility, inadequate management information and operationalsystems, lack of freedom in setting personnel policies and salaries, lossof skilled staff, weak management and very slow procedures.

1.03 The quality of the power supply in the Sudan has been ratherpoor. In addition to power supply cuts, voltage and frequency levels wereusually kept below the standard values. Power losses have been excessive,up to 30% annually. These losses have been caused by inadequate powerfacilities (small sizes, high voltage drops, low power factor),unsatisfactory operation and maintenance, and to a great extent bypilferage of electricity. NEC has not been able to undertake significantremedial measures to improve the quality of the power supply. Operating in

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very difficult circumstances, NEC has been struggling just to keep theproblems to a minimum, knoi-Ing that it would not be possible either toprevent or eliminate them.

1.04 This Project Completion Report (PCR) is based on information-obtaincd by IDA supervision missions,from NEC and other Sudanese energyrelated institutions. The Credit Beneficiary (NEC) and its consultantshave not prepared their final project report. A part of the project, theJuba diesel power station, has not been completed. In March 1984, theAssociation agreed that this project component to be partially financedthrough the allocation of proceeds from Credit 1006-SU (Third PowerProject). The Juba component will then be included in the projectcompletion report for the Third Power Project (para. 3.04).

II. PROJECT PREPARATION AND APPRAISAL

Origin, Preparation, Appraisal and Negotiations

2.01 The project had its origin in the overall power subsectordevelopment programs, which were initiated and prepared in the late 1960s.Earlier the Bank Group had assisted Sudan in the improvement and expansionof the power supply facilities through its two lending operations (Loan284-SU in 1961 and Credit 2-SU in 1963). The feasibility study of theproject was included under Loan 522-SU (1967) and carried out byinternational firms of consultants. The project was a short term solutionto meet urgent needs of the growth of power demand from 1977 until 1980. Areview of the hydropower potential revealed that no new nydro alternativewas available to meet this demand and therefore the addition of diesel andhydro sets in existing power stations was found as the basic solution. Theproject preparations had not been thorough enough, particularly in the caseof the Juba diesel power station where local conditions and transportationaspects of equipment and materials had not been studied in detail. Theproject was appraised in January/February 1974 and negotiations were heldIn Washington in October 1974. No problems arose durir.g the negotiationsand agreements were easily reached between the IDA and the Borrower (theGovernment of Sudan) and the Beneficiary (PEWC). No significant changesfrom the original scope were made in the project as presented to the Boardof Directors in May 1975. Annex I sets forth the major covenants of theCredit and Project Agreements. The Government and PEWC have not fullyadhered to the covenants, particularly those dealing with financial andinstitutional matters. At the time of the Credit signing PEWC was notsufficiently well managed to enable it to conduct the corporation'sbusiness in an efficient manner, nor to comply with the Credit and ProjectAgreement covenants.

Project Description

2.02 The Project originally consisted of the following:

A. (1) Installation of 15-MW of diesel generating capacity at Burrithermal station in Khartoum with three generating units eachrated 5 MW;

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(2) Installation of a 42-MW fourth generatiug set at Roseireshydroelectric station; and

(3) Installation of five generating units each rated 1 MW at theJuba diesel power station.

B. (1) Construction of a second 220-kV circuit from Roseires toSennar on the existing double circuit transmission line;

(2) Construction of a 110-kV single circuit transmission linefrom Sennar to Meina el Sharif; and

(3) Upgrading and extension of the Juba distribution systeminvolving installation of: (i) 150 km of 415/250 kV overheadlines; (ii) 45 km of 11 kV overhead lines; and (iii)ancillary equipment.

C. (1) A long-term power market survey;

(2) Investigations of the following sites for hydroelectricgeneration: (i) Jebel Aulia on the White Nile; and (ii)Sabaloka on the Nile;

(3) Preparation by the end of 1976 of a long-term electricitydevelopment plan, based on the long-term power market surveyand the investigation of all alternatives for responding todemand growth;

(4) A study of the advantages and disadvantages of continuing theprovision by one entity of both electricity and urban watersupply; and

(5) An examination of PEWC's plans for improvement of its wateroperations.

D. Reorganization of PEWC and improvement in PEWC's technical andfinancial management as set out in the February 1974 report of theElectricity Council of the United Kingdom.

Project Objectives

2.03 The principal objectives of the project were: providingadditional generation and transmission capacity to meet urgent short-termpower demand requirements; upgrading and extension of power distributionsystem; establishing the basis for a long-term development program; andinitiating institutional reforms on the basis of organization andmanagement studies, as well as improving technical and financialoperations. The main thrust of the intended reforms was the separation ofelectricity and water supply activities. At the time of the appraisal, theelectricity operation was financially viable, while the water supply wasincurring increasing operating losses. The project was expected to correctthe Beneficiary's financial, operational and organizational deficienciesand to improve the quality of its services.

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2.04 The information available at the time of the appraisal did notallow a realistic forecast of project results. The key assumptions made inarriving at forecast sales were based on an optimistic annual growth rateof 10%, while actual growth was only 6% in the period 1976-81. The changesin energy prices, pattern of usage and restrictions in the power supply hadnot been expressed in quantitative terms and reflected in sales forecasts.Furthermore, inefficient use of electricity, high power losses and lack ofproper energy management apparently were not incorporated in the demandforecasts. There were many uncertainties, such as power supplyconstraints, excessive losses and operational inefficiencies, which werenot anticipated and taken into account in making sales growth projectionsfor the medium- and long-term.

III. IMPLEMENTATION

Credit Effectiveness

3.01 The conditions of Credit effectiveness were confined to variouslegal actions (authorization and ratification of Credit documents and thesubsidiary Loan Agreement). The Credit was made effective on October 29,1975, about two months late. However, this delay had practically noadverse impact on the start-up of the project and its implementationschedule.

Project Execution

3.02 After advertizing in the international press, bidding documentswere issued on schedule. At that time PEWC's staff was not capable toreview these documents with the attention required. Bids received for mostof the main equipment had indicated that there may be a 25% or more projectcost overrun. These included the main item of equipment, viz for the 3x5MW and 5x1 MW diesel generating sets, the 42-MW fourth hydropowergenerating unit at Roseires, the 220/110 kV substation equipment and 110 kVtransmission lines. Due to PEWC's delay in providiag geologlcalinformation in time to project consultants, there was a six-month delay inthe invitation of bids for the civil works of the Burrn power station. Forcivil works at Roseires and Juba (foundations), no bids were received underinternational competitive bidding and PEWC had to consider the alternativesof negotiating with local and foreign contractors working in Sudan, orundertaking the work with its own task forces. Working conditions,particularly in Juba, were extremely difficult and major problems faced bycontractors were lack of transport facilities and housing, health hazards,aad life security. Although the civil works for Roseires were tenderedthree times no interest was shown by potential bidders and in May 1977 thecontract was negotiated with a construction corporation under the SudaneseMinistry of Irrigation. It is likely that difficult local workingconditions and relatively small size of the works discouraged foreigncontractors to bid. The civil works of the Juba power station wereundertaken by PEWC's own staff. This caused two-year initial delay instarting Roseires' civil construction works. Some delays also occured inappointing consultants for the long-term power market survey.

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3.03 A number of problems arose during the project execution. Localcontractors experienced lack of spare parts, equipment, materials andskilled labor. The maiFn civil works contractor for Burri was in disputewith PEWC and bad submitted excessive claims which were considered by PEVCand consultants as highly exaggerated. Stringing of the 220 kVRoseires-Sennar transmission line was affected by late delivery of erectionequipment. Finally, at Roseires hydropower station, unit No. 4 was putinto commercial operation in January 1980, about 15 months behind theoriginal estimate. Construction of the substation at Semar, together withthe 110 kV transmission line between Sennar hydropower station and Heina elSharif substation, and of the 33 kV lines at Sennar and Juba distribationsystems were finalized tn 1979 and 1980. Burri diesel power station wascompleted in December 1980 and started commercial operation in February1981 (originally scheduled in February 1978). VitW the exception of theJuba diesel power station (5xl MW), all other project components had beencompleted and put into operation before mid-1981. 1/

3.04 Despite more than five years of delay, progress on the 5-Mi Jubastation (7% of total project cost) continues to be slow. Major civil worksfor the station have been completed and equipment delivered to the site,but its installation has not started so far. The main reasons for the Jubastation delay have been difficulties in securing and transporting cementand other materials needed for the civil works at this remote site, and inengaging local labor for construction. Transportation was difficultbecause roads are not suitable for traffic during long rainy seasons, andthe river transport is limited by inadequate number of barges, for whichother goods have higher priority. Many materials and goods, such as cementand structural steel, sent to Juba for the power plant never reached theplant site (Appendix). The power supply in Juba has been extremelycritical, there is no public power supply to domestic and commercialconsumers, and the available diesel generation is used for water pumpingonly. The completion of the Juba diesel power station is urgently needed.The remaining works, replacements of deteriorated components andinstallation of equipment are estimated to cost about US$2 million. Thesupplier of equipment has expressed willingness to install and initiallyoperate the diesel generating units. This appears to be the most suitablearrangement for the completion of the Juba power station. It is expectedthat the commissioning of the generating units could be done within asix-month period after signing a contract with the supplier of equipment. 1/

3.05 The Government of Sudan has requested IDA's assistance infinancing the outstanding works in Juba. A proposal was made to includethe Juba station into the description of the ongoing Third Power Projectand to finance the equipment erection works out of Credit 1006-SUproceeds. IDA approved this proposal in March 1984 and the Juba dieselpower station is now included in the description of the Third Power Projectand the implementation of the station will be covered in its projectcompletion report. Therefore, the comprehensive review of the extent towhich expectations and objectives related to the Juba diesel power stationhave been achieved will be a part of the completion report for the ThirdPower Project.l/

1/ For the Borrower's comments, see Appendix.

3.06 The project has experienced long delays (para. 3.03) and itsremaining component is expected to be completed In 1984, a delay of sixyears, although the other parts of the project were completed with atwo and half year delay. The main factors causing delays were PEWC/NEC'sinefficient organization and management, frequent changes in topmanagement, lack of autonomy and responsibillty of PEW/NC/C vis-a-vis theGovernment, poorly trained staff, mounting financial dlfficulties (not onlyof PEWC/NEC but of the country as a whole), regional probleus, and lack ofcoordination among various entities involved in the project execution andthe power subsector activities. These factors were not sufficientlyanticipated during the project appraisal. The original time schedule wasoptimistic even for well organized power entities. Possible regionalaspects and local conditions (e.g. in Juba) had not been adequatelyanalyzed. 2/

3.07 Since the project mainly involved extension of existinghydroelectric and diesel power stations and additions to the existingtransmission system, it did not have any adverse impact on the environment.

Reporting

3.08 Compliance with the reporting requirements agreed to under thiscredit was always unsatisfactory. The progress reports on the project wereIrregular and late; they did not contain necessary information and did notgive the real insight into project problems, particularly regarding Juba.Part of the problem was that PEWC/NEC did not have a weLl organized andcapable coordination unit responsible for project reporting and there wasno continuity of staff in handling the credit related activities.Consultants reports were narrowly focused on specific project matterswithout paying due attention to crucial problems which led to lengthydelays in the implementation of the project. Slnce 1979 reporting on theproject has been practically discontinued. 21

Procurement

3.09 Both PEWC and their consultants were inexperienced in procurementmatters. International competitive bidding was not the successful methodof procurement for civil construction vorks (para. 3.02). Otherprocurement methods and implementation procedures such as competitivebidding advertized locally or construction by force account had not beenexplored sufficiently during the project appraisal and initial procurementactivities. It was only after a good deal of discussion and long delaysthat the Borrower and PEWC realized that the other procurement methods weremore appropriate in view of Sudanese local circumstances. This caused anadditional delay in awarding civil works contracts for Roseires and Jubaand thus in project completion. Details of awarded contracts for works andequiment are given in Annex 2.

Project Costs

3.10 The final cost of the project was US$55.3 million as against theoriginal estimate of US$40.0 million. A detailed comparison of these costsis given in Annex 3. The increases in the foreign and local costs were 44%and 30%, respectively, over the appraisal estimates. These increasesreflect the impact of high inflation on labor and material costs and works

2/ For the Borrower's comments, see Appendix.

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delays as well as some modifications during the project execution. Costoverruns were financed by the Government and the OPEC Special Fund loan(US$9.5 million declared effective ou July 2, 1979).

Disbursements

3.11 The original estimate of disbursements and the actualdisbursements of Credit 564-SU are given in Annex 4. Cumulativedisbursements were much lower than the appraisal estimates due to start-upand procurement delays (para. 3.02). The credit closing date was extendedfrom December 31, 1979 to November 30, 1981 and the balance of US$974,257remaining uncommitted on the latter date was cancelled. Because of theJuba diesel station problems and overall construction managementinefficiency, PEWC was not able to utilize the full amount of the creditbefore its closing.

Performance of Consultants, Contractors and Suppliers

3.12 The performance of the consultants for the project's physicalfacilities was generally satisfactory. However, they were not successfulin estimating final project costs and delays in project execution.Furthermore, their reporting was not comprehensive and regular (para.3.08). The suppliers of equipment and materials also performedsatisfactorily and offered necessary assistance during the equipmenterection and initial operation of project facilities. The local civilworks contractors experienced a number of problems and their performancewas less satisfactory (para. 3.03). PEWC construction by force account hasbeen hindered by lack of skilled workers and proper supervision as well asthe shortage of construction materials.

IV. OPERATING PERFORNMANCE

4.01 Since the project has not been in service long enough and some ofits components, such as the Juba diesel power station, have not even beencompleted, it is difficult to compare the actual operating performance ofthe project's physical facilities with the expectations at appraisal. Ingeneral, the initial operating experience was satisfactory. Someoperational problems have been experienced, mostly related to bearings oilleaks at Roseires, and cooling water and relays adjustment at Burri. PEWCand manufacturers had investigated problems and found suitable solutions.More serious problems have occurred in connection with the operation of theRoseires water reservoir and its siltation. During the floods in 1983 wooddebris and heavy siltation completely blocked intakes of units No. 3 and 4(project component) and endangered operation oE No. 1 and No. 2. Theeffect of silt suspended in the water passing through the generating unitshas been rather severe. It was reported that turbine No. 4 had brokenshear pins and levers. The silt leve.. in the reservoir has steadilyincreased in the recent years, and if necessary measures are not undertakento clean reservoir and protect generating equipment the serious problemcould arise again. The Roseires project needs some modifications andrehabilitation of screening and raking equipment to cope with the increasedsiltation and the accumulation of wood debris. The problem has to bestudied and appropriate remedial actions should be adopted. Requests for

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help from the manufacturer and the engineer have been made. withassistance from USAID, h-EC has started preparatory works to improve theoperating performance of the Roseires project and to control the excessivesiltation of its reservoir.

4.02 During the month of August 1983 substantial restrictions onavailable power from the Burri power station was caused by a fire in theswitchroom of the diesel generators which rendered main circuit breakers ofall three diesel sets inoperative, so that none of them could be connectedto the Sudanese power system. Remedial work has begun and replacementequipment has been ordered. PEWC/NEC's staff is not always well trained tooperate power facilities satisfactorily. The power facilities are notmaintained properly and securing of needed spare parts and materials isvery difficult due to the acute shortage of foreign exchange. Otherchronic problems are poor management, low level of operating staff skillsand lack of motivation due to inadequate salary levels and theBeneficiary's inability to attract and retain qualified and experiencedoperating staff and managers. The entire power system operates at severelyreduced levels of efficiency and available generation capability is wellbelow the installed capacity. Necessary measures need to be taken toimprove operational reliability and to reduce power losses. In connectionwith the Fourth Power Project, a number of measures are proposed to improvethe operating performance in the Sudanese power system.

V'J FINANCIAL ASPECTS

Introduction

5.01 Appraisal estimates and actual audited Income Statements, FundsFlow Statemeats and Balance Sheets for the combined operation of water andelectricity covering the years FY76 through FY81 are given in Annexes 5, 7and 8. Appraisal estimates and actual audited Income Statements for theelectricity operation only are given in Annex 6.

5.02 The external auditors have continually noted irregularities inPEWC's accounts, particularly in connection with billing and collections.Furthermore, both the audited accounts and the auditor's summary havecontained errors and unverified figures.

Financial Results

5.03 The following table shows the percentage variations in actualfinancial performance of the electricity operation compared with theappraisal estimates:

NEC Financial Perforuance:-Actual vs. Appraisal Estimate ()-

1976 1977 1978 1979 1980 1981

Electricity Sales -5 -11 -5 -8 -17 -21Average tariff levels 9 9 9 23 159 145Revenues 3 -2 5 12 113 96Operating expenses

(excl. depreciation) 25 45 41 88 146 189Operating Income

(before depreciation) -29 -42 -23 -54 87 17

5.04 Operating expenses were considerably higher than the appraisalestimate. This was the result of higher inflation increasing the cost ofmaterials and services, inefficiency in the operation of generationcapacity, higher than estimated power losses and fuel cost. The largeamount provided for bad debts also contributed to the high operatingexpenses. Lower growth in electricity sales was partly due to technicaldifficulties which PEUC encountered with some of its generation plants,high technical losses as well as unbilled consumption, and delays Ininstalling new capacity. At appraisal, no increases in electricity tariffswere provided for. Although actual operating expenses increased sharply,3/ and in spite of IDA's urging, tariffs were only increased in 1979 inconnection with the preparatioa of the Third Power Project. Consequently,PEWC did not achieve the required 8% return on net fixed electricity assetsin operation for the years prior to FY80. Actual rates of return were 6.6Zin FY76, 1.5Z in FY79, 22Z in FY80 and 10.9% in FY81 (Annex 6).

5.05 The water operation of PEWC sustained sizeable losses during theFY76-81 period and prevented it from achieving the 4% return on net fixedwater assets as stipulated in the credit documents. In FY80, theGovernment imposed a levy entitled -Interest on Equity Capital- on incomeof PEWC and similar public sector organizations. Interest on equitycapital is levied at the rate of 5% on the equity capital balance(including reserve for revaluation of assets) at the start of eachfinancial year. The imposition of this levy significantly decreased PEUC'snet income and increased its needs for internally generated funds.

5.06 A comparison of actual and appraisal estimates of the sources andapplications of funds for the combined operation of PEWC covering theperiod FY76-81 is shown below:

3/ The high (local) inflation rates ranging from 17% to 31% were notforeseen at the time of appraisal when an inflation rate of 8% per annumwas assumed throughout the implementation of this project.

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Appraisal AppraisalEstimate Actual Estimate Actual-

(ESd mlIn) (Z)

Sources of Funds

Internal Cash Generation 62.5 49.0 84 44Less: Debt Service 14.1 22.8 19 20

Interest on Equity - 11.3 - 10Net Internal Cash 48.4 14.9 65 27

Equity Subscriptions - 1.4 - 1Grants & Advances - 36.8 - 32Borrowings 26.1 59.5 35 53

Total Sources of Funds 74.5 112.6 100 100= .= _

Application of Funds

Construction ExpendituresProject a/ 13.9 29.8 19 26Other 63.0 36.0 84 32Total 76.9 65.8 103 58

Increase in Working Capital -2.4 46.8 3 42

Total Application of Funds 74.5 112.6 100 100

a/ The appraisal estimate includes £Sd 1.5 million related to Juba whichwas expected to be the total cost of that project component. The actualcost includes £Sd 3.7 million which was expended on Juba up to- June 30,1981.

5.07 While the actual cost of the project was about double (in current£Sd terms) the appraisal estimate, construction expenditures on other partsof NEC's investment program were a little more than half that envisaged atappraisal due mainly to lack of f..ads. This had a serious impact on thequality of service as well as on PEWC's ability to meet the demand forelectricity and water. LNet internal cash generation provided only 14% oftotal financing requirements for the FY76-81 period compared with 65%estimated at appraisal. Since internal cash generation was significantlylower than forecast, PEWC financed most of its operational and capitalexpenditures through loans and grants from the Government which accountedfor, respectively, 53Z and 32% of the total financing requirements. Atappraisal, no grants were envisaged and only 35% borrowing was estimated tobe required. Workirg capital increased substantially over the periodresulting from unusually large amounts tied up in accounts receivable(para. 5.10) and inventories. The high inventories reflect the unusuallylong lead time required in Sudan for import of materials and equipment dueto port and transportation problems and delays.

- 11 -

5.08 In spite of the additional borrowings, PEWC's debt/equity ratiowas more conservative than est'mated at appraisal mainly because of thelarge reserve stemming from annual revaluation of fixed assets which wasnot provided for in the appraisal estimates.

5.09 By obtaining a loan from GDR in 1978 without the Association'sagreement, PEWC contravened the requirement of Section 4.04 of Credit564-SU which stipulates that PEWC shall not incur any long-term debt unlessits net revenues in any year are not less than 1.5 times the debt servicerequirement for that year. This borrowing, for which IDA approval was notsought, was due to delay in implementing tariff increases (para. 5.04).However, the compliance with the covenants on revaluation of assets andlimitation of capital expenditures has been satisfactory.

Billing and Collection

5.10 Collection of PEWC's sales revenue remained unsatisfactory duringthe implementation of this project. Accounts receivable on June 30, 1977represented about 55Z of total operating revenues and deteriorated to 85Zon June 30, 1981. PEWC's billing is computerized. In 1978 PEWC decided tochange to a new computer with greater capacity which was put into operationonly in 1981. The writing and checking of programs for the new computertook longer than planned mainly because five of the seven computerprogrammers left PEWC to take up jobs in the Middle East. In the meantime,billing was several months behind. Another contributing factor to the highreceivable position was PEWC's poor performance in meter repairs,maintenance and disconnection. The large arrears of the Government,semi-government and connected agencies and corporations also exacerbatedthe situation.

5.11 The Association has agreed to finance out of the Power IIIProject (Credit 1006-SU) the services of a financial and a computer expertto join NEC in the spring of 1984. They will help NEC improve its billingand to carry out a reconciliation of the Government agencies' accountsreceivables and payables with NEC and then to offset each agency'sreceivables against its payables and settle the remaining balances throughcash payment or collection, so as to reduce the level of receivables.

Accounting and Audit

5.12 PEWC maintained separate accounts for its various area offices.At the head office in Khartoum, only the accounts of that office are kept.Durir.- the project period, the regional offices sent periodic accounts,income statements, balance sheets or other reports to Khartoum only onceevery year after the close of the financial year. In FY81, PEWC lost about25 experienced accounts staff to the Kiddle East. Staff employed to fillthe consequent vacancies were relatively inexperienced and neededconsiderable training before they could adequately carry out theirfunctions. Compliance with the covenant related to maintaining separateaccounts for its electricity and water operations has been satisfactory.

5.13 PEWC's external auditors were appointed by the Auditor General ofSudan generally well after the closing of PEWC's accounts, and consequentlythe auditor's report became available long thereafter. Due to the high

- 12 -

turnover of accounts staff (para. 5.12), PEWC has experienced delays inclosing its books on time and, consequently, submission to the Associationof audited financial accounts were not made within the six-month periodstipulated in the credi. documents.

5.14 PEWC's accounts were audited annually by a Sudanese firm. Thequality of this firm's reports was unsatisfactory. Both the auditedaccounts and the auditor's summary thereon contained errors and -averifiedfigures. The Association pointed out these discrepancies and a moreexperienced firm of auditors was appointed for the financial year 1983.

VI. INSTITUTIONAL PERFORMANCE

Management and Organization Effectiveness

6.01 Since its creation in 1975 PEWC experienced various operationaland financial problems due partly to lack of autonomy and firm leadership,inappropriate organizational structure and frequent management and staffchanges. PEWC's Board of Directors could not agree on routine matters suchas staff appointments, transfers and promotions. In the meantime, keystaff positions remained vacant for years and the quality of servicesdeteriorated. In 1978 a new PEWC Act changed the composition of the Boardand the Board's members were appointed by the Government and included,Inter alia, representatives of trade unions. The only member representingPEWC's management on the Board was the General Manager of PEWC. In 1982the PEWC Act was repealed and the electricity and water supply functionsseparated which represents a very positive development. The NationalElectricity Corporation (NEC) was established under its Act of 1982 withresponsibility for developing and managing the power facilities of theareas in the Blue Nile Grid and the Eastern Grid. It is intended that thepower distributon system in the Khartoum Province will be separated fromNEC. These institutional changes were enacted with insufficientpreparation. The legal, regulatory, organizational and managerialframework is virtually non-existent for power supply organizations in theregions. Delays in establishing regional organizations may result infurther deterioration of power supply services in Sudan.

6.02 There has been limited improvement in NEC's management. Thepresent L.EC management was appointed by the Government a year ago and it istoo early to judge its effectiveness. Long-range planning, pricingpolicies, manpower development, salary and benefit systems, and otherinstitution-building activities have not been fully developed, and arebeing pursued in subsequent operations. The consultant's studies andservices financed by the credit proceeds have had some beneficial impact onNEC, although many of consultants recommendations have not beenimplemented. However, the study of the advantages and disadvantages ofcontinuing the provision by one entity of both electricity and water supplywas instrumental in the separation of these activities and the creation ofNEC (para. 6.01).

- 13 -

Staff and Training

6.03 NEC remains overstaffed particularly in the unskilled category,but lacks a number of managerial staff, particularly In financial andaccounting services. PEWC/NEC has had problems in recruiting competent andexperienced staff in adequate numbers and in retaining trained staff.Staff salaries are not competitive considering other employmentopportunities for qualified staff and there has been a continuous movementof staff to private sector institutions or abroad where salaries are muchhigher.

6.04 There has been continuous training activity in the powersubsector through the involvement of various foreign institutions andconsultants. The benefits from training have not been fully utilized dueto the frequent changes of staff at professional and managerial levels.With the help of its consultants, NEC has undertaken a comprehensivetraining and development plan for its technical and managerial staff. Theconsultants are assisting NEC in the implementation of a new managementstructure for NEC and the organization of management training.

6.05 In spite of continuous financial and technical assistance frommany foreign development institutions NEC has not yet developed fully intoa technically competent and financially viable power supply entity. Theinstitutional problems of NEC, particularly those cowmmn to parastatalorganizations, such as managerial and organizational weakness andinadequate payscales can also be addressed in the context of the reform ofstate corporations on a country wide basis. Furthermore, more activeenergy sector work and continuing project lending can further strengthenNEC, improve its management and develop efficient operational and planningcapabilities.

VII. PROJECT JUSTIFICATION

7.01 The project (excluding the component in Juba) was to supplyadditional energy to PECW's interconnected system which accounted for about82% of PEWC's sales. At appraisal, PEWC's forecast for the period FY76-81indicated an increase in total electricity sales from 556 GWh in FY76 to671 GWh in FY78 and to 889 GWh in FY81, with an annual growth of 9.8%.Actual sales were 635 GWh and 702 GWh for FY78 and FY81, respectively(annual increase of about 6%). From FY79 onwards, demand for electricityoutgrew the system supply capability due mainly to delay in implementingthe project and reduction in other works originally included in PEWC'sFY76-81 investment program. Consequently, substantial load shedding had tobe implemented. Losses have been high reaching 27% in FY81. These lossesreflect an undeveloped and inefficient power transmission and distributionsystem as well as unmetered or unbilled consumption.

7.02 In FY75 PEWC's 170 MW of generating facilities in theinterconnected system included diesel, thermal and hydro plants with thehydro component representing about 60% of the total. Due to low reservoirlevels, the effective capacity of the hydroelectric generating sets werereduced and diesel sets and thermal units were being used to cover the

- 14 -

excess energy requirements over existing hydro capacity and to meet peakdemand. During the dry period, thermal stations were operated at base loadto supply the bulk of the system energy requirements. The projectedmaximum demand and energy requirements demonstrated that the interconnectedsystem would be capable of meeting peak demand and energy requirementsuntil FY79 after which the generating capacity to be provided by theproject would be required.

7.03 At appraisal the internal rate of return (IRK) on the projectlocated in the Blue Nile Grid was estimated at 21%, measuring benefits byusing the then orevailing average revenue per kilowatt hour. No increases(in current or real terms) to the tariffs were expected during theimplementation of the project. The internal rate of return on the projecthas now been estimated at about 14% using actual tarlrfs adjusted to FY83price level. The lower IRR than estimated at appraisal was mainly lue tothe higher cost of the project and delays in realizing benefits whicn werenot offset by the higher tariffs than estimated at appraisal.

VIII. IDA PERFORMANCE

8.01 The IDA maintainee' good working relations with the Borrower andthe Beneficiary during both credit processing and project implementation.At appraisal the IDA staff underestimated the power subsector problems inSudan. Although serious financial and institutional problems in the powersystem were identified, the project was considered worthwhile because ofthe urgent need for improved power supply and for the correction of variousdeficiencies in power supply operations. The credit was essential for thefinancing of the project's physical facilities and consultants' services.The project objectives regarding the institution-building and financialaspects have only partly been achieved. The IDA staff did not foresee theseriousness of the various difficulties in connection with the Juba dieselpower station. It appears that this project component was not asthoroughly studied as demanded by the situation. Transportationdifficulties, local conditions and the necessity of competent project sitemanagement had not been timely identified. Furthermore, projectimplementation timing vas not realistic. IDA's assistance in projectimplementation matters should have been offered much earlier. There was nocontinuity of IDA, staff in the first and last years of the projectimplementation. Joint project supervisions for Power II and Power III havebeen regular (twice a year) since 1979 but more attention was given to thepreparation and supervision of the Third Power project than to the SecondPower project.

8.02 IDA made a significant contribution to the project. In future,increased investments in rehabilitation of power facilities are likely tobe needed and IDA support for the priority investments needs to beaccompanied by substantial improvements in the power system efficiency andNEC's institutional performance.

- 15 -

IX. CONCLUSIONS

Overall Achievements

9.01 The principal objectives of the project's physical facilities,with the exception of the Juba component, by and large have been achieved.The project has provided additional capacity to the Sudanese power system,thus reducing chronic power supply cuts. Although the institutional goalsand the financial objectives of the credit have not been fully achieved,the IDA lending was instrumental in preparing the long-range developmentprogram, introducing various changes in PEWC/NEC's operations and planningprocedures, separating electricity and water supply activities,improvingorganizational structure, and establishing more appropriate electricitypricing. However, still much remains to be done for establishingautonomous, technically and managerially sound, and financially viablepower supply entities in Sudan..

Lessons Learned

9.02 The main lessons to be drawn from this lending operation are:

(i) institution-building, objectives in the Sudanese power supplysystem are unlikely to be achieved without basic reform of thepolicy framework for public corporations to enable them to (a)attract and retain qualified and experienced staff by providingthem suitable salaries and benefits and (b) operate on a soundEinancial basis with appropriate tariff levels and ability tocollect its revenues;

(ii) careful analysis of institutional and policy issues and theirimpact on corporate performance is required; future power lendingoperations should seek to achieve a satisfactory resolution ofthe basic institutional and policy problems and to improve powersystem efficiency in Sudan;

(iii) the scale and scope of projects should be more coherent andmanageable to enable close monitoring of the execution of allproject components;

(iv) operational difficulties such as those due to excessive reservoirsiltation should be fully studied during project preparation andtheir impact reflected in project design and selection ofequipment; and

(v) long-range development plans and the timely implementation ofrealistic investment programs are essential to avoid chronicpower supply shortages and interruptions.

-16- __

Page. 1 of 2SUDAN

SECOND POWER PROJECT(Credit 564-SU)

Compliance with Main Covenants of Legal Documents

Section of CreditAgreement (CA)/

Project Agreement (PA) Covenants Compliance

CA 4.01 The Borrower shall consult with Compliedthe IDA before appointing any with.person to a position of GeneralManager, Chief Engineer and ChiefFinancial Officer.

CA 4.02 The Borrower shall, inter alia,cover any deficit arising between Compliednet internally generated cash from with.PEWC's water operations and thecost of its water constructionprogram.-

PA 2.01 PEWC shall carry out the project Not compliedwith due diligence and efficiency. with

(paras. 3.02and 3.03).

PA 3.01 PEWC shall manage its affairs and Not compliedconduct its business in an withefficient manner. (paras.

and 6.01).

PA 3.02 PEWC shall take out and maintain Compliedinsurance against such risks and with.in such amounts as shall beconsistent with appropriatepractices.

PA 3.03 PEWC shall place the operation of CompliedRoseires hydropower station under with.qualified and experienced person.

PA 4.01 PEWC shall maintain records in Compliedaccordance with appropriate with.accounting practices.

-17 - KANNEX 1Page 2 of 2

PA 4.02 (a) PEWC shall have its accounts Not compliedaudited and submitted to IDA with (para.within six months after the end of 5.13).fiscal year.

PA 4.02 (b) PEWC shall maintain separate Compliedaccounts for electricity and water with.operations.

PA 4.03 (a) Rate of return for electricity 8%, PEWC neverand for water 4%. achieved the

4X on itswaterassets. Forelectricity,the 8% wasachieved inFY80 andFY81 only.(Paras 5.04-5.05).

PA 4.03 (b) PEWC shall adjust its electricity Not compliedtariffs to reflect (i) the cost of with (para.providing services at various 5.04)times and places to its customers(ii) any changes in the price offuel used by PEWC in its operation

PA 4.03 (c) PEWC shall effect the initial Compliedadjustments in its electricity with.tariffs required under PA 4.03 (b)by January 1, 1976.

PA 4.03 (d) PEWC shall complete a revaluation Compliedof its assets by December 31, with.1975.

r _PA 4.04 Debt service coverage requirement Complied

of 1.5. with exceptfor FY78(para. 5.09)

-18- ANNEX 2Page 1 of 2

SUDAN

SECOND POWER PROJECT(Credit 564-SU)

Awarded Contracts for Equipment and Works

Contract Date of ContractCategory of Work No. Signiog Value

1) Transmission lines P.II 104 01/28/76 US$1,130,000and substations + £Sd 210,000

2) Transmission lines P.II 105 07/07/76 US$475,000and substations + £Sd 119,000

3) Burri diesel station P.II 106 04/25/76 £Sd 2,069,000(diesel units) + £Sd 17,000

4) Burri diesel station P.II 107 01/08/77 US$1,128,000(switchgear) + £Sd 79,000

5) Burri diesel station P.II 108 01/27/77 £Sd 576,000(civil works)

6) Unit No. 4 Roseires P.II 200 11/30/75 AS 61,960,000(water turbine) + £Sd 11,000

7) Unit No. 4 Roseires P.11 201 04/09/77 SKr 10,719,000(generator) + £Sd 69,000

8) Unit No. 4 Roseires P.II 202 09/08/77 SwF 983,000(switchgear) I + £Sd 18,000

9) Unit No. 4 Roseires P.II 203 06/07/77 AS 22,050,000(gate plant) + £Sd 33,000

10) Unit No. 4 Roseires P.II 204 05/23/77 US$1,720,000(civil works) + £Sd 386,000

11) Stringing of 220 kV 238 06/19/77 US$1,260,000line (conductor)

12) Stringing of 220 kV 239 06/19/77 US$87,500line (earthwire)

13) Stringing of 220 kV 239 06/19/77 Yen 141,580,920line (insulators)

;_D_ - 'F- -- ts-zci-- i

i - -~~~~~~~~~~~~~~~~~~~~~~ - -. X.-:

319- ANNB

Page 2 of 2

14) Stduglg of 220 kV 239 1977 E 61,500limn (erectim equip.)

15) Stringing of 22D kV 239 1977 £ 129,500line (vehicles) + £Sd 30,000

16) Juba per station 300 01/29177 Dt7,897,000diesel (generator) + £Sd 58,000

17) Juba power station 301 £Sd 250,000(foundation)

18) Juiba power station 302 03 14177 E 130,000(steel framed structore)

20 - A R 3

(Credit 56"U)

toe Cost EstlteTh 7ousmim)

-ippraialEtinste- -O3rrent Fatimste-Local Foec Total local E?! Total

A. Project Works

(i) 15-EU diesel(Khartoum) 2,990 3,070 6,060 3,693 7,216 10,909

(ii) 4th Rwseires Uniit 5,110 5,210 10,320 6,516 13,253 19,799

(ILii) 220-kV Roseiresto Singa Circuit 2,640 2,560 5,200 3,265 5,456 8,721

(iv) 110-kY Singa toKeina el Sharifiln 1,880 1,780 3,660 2,319 1,164 3,483

(v) 54th of diesel(Juba.) 1,390 1,440 2,830 2,405 5,848 8,253 41

(vi) Juba distribution 920 600- 1,520

B. Long-Term PlanningStudies I/ 350 1,090 1,440 2,952 1,143 4,095 51

c. EaJK Program 150 1,090 1,240

Subtotal 15,430 16,840 32,270

D. Contingencies

Physical 140 320 460Price 720 6,520 7240~

Total 16,290 2/ 23,680 39,970 21,150 34,110 6/ 55,260

I/ Powaer market survey and hydroelectric investigations.2/ Includes custous duties and local taxes of [Sd 3.8 million.S1 At prevailing exchange rates:

1975 - US$1 - [Sd 0.341976-80 - US$1 - [Sd 0.51981-82 - US$1 - [Sd 0.91982-83 - US$1 - Sd 1.31

4/ Includes distribitiont and remaining erection works./Includes ECUK program.US$31.6 million financed by Credit 564-SU and OPEC Fund; US$2.5 million to befinanced by Credit 1006-SU (Juba US$2 1lon, co5sultancy US$0.5 million).

=',~~~~~~~~~~~ ~ ~ .- -~.~-$ -. -' ' .

-21 _ _ A - - .

SUDAN

SECOND POE PROJECT(Credit 564-SU)

Schedule of Disbursements(US$ millions)

Actual as ZAppraisal Actual of Appraizal

Quarter Ending Es1tinate Disbsrseaents Estimate

Sept. 30, 1975 0.3Dec. 31, 1975 0.7Mar. 31, 1976 1.5 0.5 33June 30, 1976 3.0 1.4 47

Sept. 30, 1976 4.5 2.6 58Dec. 31, 1976 6.9 3.0 43Mar. 31, 1977 9.3 3.9 42June 30, 1977 11.5 5.5 48

Sept. 30, 1977 13.9 6.2 45Dec. 31, 1977 16.5 10.4 63Mar. 31, 1978 18.0 15.5 83June 30, 1978 20.5 17.1 83

Sept. 30, 1978 22.2 18.0 81Dec. 31, 1978 22.5 19.2 85Mar. 31, 1979 22.8 20.0 88June 30, 1979 23.0 21.3 93

Sept. 30, 1979 21.3Dec. 31, 1979 21.3Mar. 31, 1980 21.5June 30, 1980 21.6

c Sept. 30, 1980 21.7Dec. 31, 1980 21.8Mar. 31, 1981 21.9June 30, 1981 22.0

Sept. 30, 1981 22.0Dec. 31, 1981 1/

1/ Closed on February 22, 1982 and the undisbursed amount of US$974,256.55cancelled.

. ~~ii 0l1 ~i §|i N $ 0 ii 1

* ... ~~J

*: I ii II pll §gE§ I §81 .1. ~ ~ 1i l |ag 8g' 1 R|

* 21i1 l41|1 AllNl@t | g g 0810 1 a | 111 |] 2 lfilEl i20§Rt 8i3iE0 R:-

, X l 1~~~ii || 2@l 1

11 § ] 21lp1 I § ii'M |8|p1 1 Rf

-23 -4nn= 6

Saall- Mmctckl-3r md Van cam

Tow uD :3 1976 1977 1978 1919 19 l19

1er Sl (GO 556 526 611 543 611 635 738 679 8L1 6W5 899 7m

'a salesI22 1316 13 136 1£5121 1M59 16c 18475 7I94 3921 196 3O15

D. & . 1461 Z316 1578 1915 17(5 MI52Z 181 34 158 4625 - 2147 5W5*eMl- 31 24 3622 32 3597 3622 3863 5718 4112 7517 4273 Mnis m M m1961 ZB68 2118 2119 2a 2540 27 3263 2668 40 2882 55NAn&Caaem1Ez. - 1486 - 392 - 197 - 36 - 539 - - -

Dq_-at,, 1566 2127 1731 Z377 209 22D 7262 2955 2D 3135 2768 36Total Cp- - 8D 30652 81#5s9 D120 5690 13631 WY07 806 15i8 2463) IZIR

00L Im 4523 2716 5K2 gm 5441 2518 5S58 1i9 6575 1359 7391 7578

Otb_rT., 45D 15 45D 667 450 53 40 6m 45D -50 450 62

get mle 211F L t A7 275 5512 1569 5891 3Df8 6301 851 I705 14097 7841 82

1ntacet Ouzd oe 675 669 956 1065 121 2 1 209 1m3 134U 1250 140I. e lriam Cip w taq 0 0 0 0 0 0 0 0 0 407 0 476

To_ta 6h& 675 W 10 IZ S 2S Wi- mD 1 i 54 Z -lZ ID 581

nat AM8 2206 4556 56 460 28D6 4954 642 5691 8611 6651 2386

(8peatIllg Rmoi I6fter d fnat) 64 78 64 99 66 92 64 96 63 64 62 79

= lace aswe 39806 4358B 435D1 49562 54060 54511 63625 57736 6GM5 64115 6S7ZZ 754

E8t cE lam - 11.4 6.6 1L6 3.2 I01 5.6 9.2 1.5 9.9 220 10.8 10.9

1/ AL rapua1saL Wm & Fmu1 c sere lodied Iu dlent1UCanSIn geneatmx ad trSs1z guts.21 kb-I flmwas rebqle to qm=t1g m -id3e Dts d

C

24

SI-~~~~~~~~~~~~~~~~~

Tba ad er -93Ua him

ONd dwano)

Yawr eafyg J1e 30:1976 1977 198 1!9 1m 198FaLkLAM Est. Am. St. Act. KuL ht Act. Nut. Act.pt. Ar

aut In q rumiti 754 96ZD 85136 19054 306785 148S 1108 131M ;1I 1301Tamzlta dmc1stde 16431 31611 1BM 3671 219 441 25336 52759 290D6 623 33sm 73525

Net P1AKIC. In an 5 6690 -7- -~ -m -i -9

I pIn 7572 3809 1299 9027 462 14013 5766 21 872 253 30 388

Imh 1992 881 937 4911 341 4168 135 205 1268 1490 62fn 45* hc u 2681 1399 326 10405 3336 EM' 3610 15M4 4K8 3066 439D 42747rnvtdm 5324 7249 5856 9847 6442 13 7Y9 ;t96 21974 7795 S7 8574 4958

M133 so 143 667 1553 644 167 636 1812 639 1956 66U1~~~~~~~~I ZT 1 36@S 3Fi 14 92 im -ff sIE -iu

I Assets 776 86156 8B 107198 1)1166 1238 11046 145769 11984 11_ 13_ 296

h1 ~ coIZal-Al 30508 3341 0 3 8 3615 30508 36U5 3D52 3415 30508 3U415 3X0M 3415eaind E-amdl L 5605 1786 6411 23193 7514 28546 250 262 5869 414' 7214

*Ra ts 3M00 6868 3000 16010 M3 19017 3000 2Z609 3 269 3M00 415ZBhvalmtlm Rem 5316 13733 5316 3012 5316 37216 5316 44699 5316 5309 S316 6011

-Tal 51824 0210 56660 86737 621D 9816Z 6737D 14663 73716 124w a11 1f5615

law1re -LabirIti 1524 16910 21302 12906 D 25 16110 2365 2750 30188 33 Z I0 32 3 51

A euts PaVble 6963 78649 7682 4648 843S 7731 9334 1321 1M 25073 11 271

Cuton depasiz 1642 663 1795 932 M141 1240 2D 1319 246 1660 2i0 Z0tIBr 193M 526 2127 1775 2350 5 2574 5 331 867 3115 6Tt st aepty Lt - - - - - - - - - 5233 - 11361

Total 10541 9036 1160 73 1289 W6 14116 1460 I 31 i 74U9

OtLf iri 295 - 35 - 295 - 35 - 295 - 95 -

Total ) tymd d LUaMitl 7768 8615 8961 107M 10116 1Z48 110146 14576 119844 1811 130562 231

DIbtKqduty 2278 2278 27:73 13:87 29:71 14:86 30:70 20:8 29.71 n 8 29n71 26:74

-25-

ARM 7

-~~~~ -*- M

TOWr Jawi ~ 30: 1976 197 397 1979 190m

SE of -p

t Nme bIer t 5753 23B 60 0 62 7179 912 71Z5 -2890 13W 8 7 tWBDqpecLal632743 29348 2506 3D72 2970 373 3426 4177 3M2 429 a es Nw. far bed dbt 58 271 1720 385

T-as &Sh rAMOU i9 9 Z s 1 09 7M6 -m

E Sscdmt 83 33 3D7 - _ _

Gm tsd Advmhi fzHfn1mty of 2E28 9142 307 3N2 4514 1462

IadE oE S 2ZO Qs (z EL 36&) 330 37 2302 68 27o 1 272 19 3678 1GM an 8m s5 37MI 564 1266 3405 4645 2151 318 48 2 z1 2) 101AM~ 8e 755 414 1 m 63 mEm.iLt 3s us 143 160 2 136Sat6i 248 531 I= 513 300NEC OMS W

Otbinr 16925741 -- 39 - 3TOeaI 7288 sa li ZZ3 3 367823502

Tcai SMzCs 12M 12 15198 B 15302 1552 13963 16435 14945 53 49565

I411atmil of a.xId

Froje 199 1788 _ 430 5015 5960 1196 I00 - 572 - 750Octr 9650 2M6 91L4 65s 54 636 916 81 12193 1134 1410 19663

Tootal I5g6W WI 129 1

AtlMIZW-tm 269 2781 321 39 53) 4 78 1067 m 4103 1026 223jntera 853 973 IZ4 1;7 1712 262 1972 209 2156 1355 2308 l0W

L2teLot iFqixy 5236 - 61-Total 1112 W 31I WI MN 3W

C(dereme) In W.C. -33 3805 -129 4lS --g 4"Z 729 4067 -34 IO05 m 1913

Total hpl±catin 17 12185 1518 D243 15302 15523 13863 16435 14965 353 16606 49565

aft *ezwIh r16e 1d by1ntezml Ca.h Camdz 7.2 1.6 5.5 1.2 4.4 1.1 3.9 1.2 4.0 3.6 3.9 3.4

=-0-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - -0f

-26 9AINEK 9

Seo Poe Project

Retura aa I It 1/

PI Projec Aditional Total Total_Ff years sales Revmes 2/ Cbst C0sts 3/ 0 & M Dstr. 0 & M Revenues 4/ Qbsts 4/

(GWh) (ESd' 000) 'LS '0

1976 1451 0 70371977 6083 0 253051978 3581 303 0 135551979 1521 350 0 49771980 30 1710 217- 346 409 400 70 3625 30571981 51 2754 433 125 600 20 4572 2801982 92 5244 1429 0 ' 700 200 6817 35591983 142 8804 4835 0 300 230 8B04 57741984 177 22302 7851 0 0 ' 17842 84901985 26373 ' 0 ' 21908 84901986-95 ' 0 84901996 ' ' 1451 99411997 2921 ' ' ' 114111998 ' 1560 ' ' 100501999 ' ' 10 ' 85002000-01 ' ' 0 ' o ' 84902002 ' 80 400 ' 89702(D03 ' e 1900 600I 1099D2004 ' 2390 700 ' 115802005 ' ' 220 300 ' 90102006-12 177 26373 7851 0 409 0 23D 21908 8490

IRR -14%

1/ Excluxg the project compont related to Juba/Based on actl average tariffs.

_/ Exldling costcss andl duis.4/ Expred in FM83 price leel acording to the fofliing price irxx: 1976 = 4.85, 1977 4.16; 1978 = 3.49,

1979 = 2.66, 198D = 2.12, 1981 = 1.66, 1982 = 1.30, 1983 = 1.00, ald 1984 = 0.80.

APPENDIX A- 27 -

CONNENTS FROM THE GOVERMENT OF SUDAN

P.CL5268248423 WORLDBANK22324 EINAR SDDATE 4112/84FROM: 22324 EIMAR SDTO: WORLD BANK/ WASHINGTON

FOR: MR. YUKINORI WATANABE¶ ACTING DIRECTOR - GENERAL OPERATIONS EVALUATIONS

RE: YOUR LETTER OF OCTOBER 23, 1984 REGARDING PROJECT COMPLETIONREPORT ON SUDAN, SECOND POWER PROJECT (CREDIT 564-SU) (.) WE HAVETHE FOLLOWING REMARKS WHICH WE HOPE TO BE CONSIDERED.

AAA/ PARA 3.4 LINE 12 AND PARA 3.6 LINE 7, INDICATE THAT THEGOVERNMENT IS NOT INTERESTED, WE DONT AGREE TO THIS POINTSINCE THE CAUSES OF DELAYS ARE DUE TO CERTAIN PROBLEMSAND NOT OF NON INTEREST OF THE GOVERNMENT.

BBB/ PARA 3.4 LINE 11, INDICATES THAT MATERIALS AND GOODS SENTTO JUBA FOR THE POWER PLANT WERE DIVERTED BY LOCAL AUTHORITIESTO OTHER USES, WE AGREE IF THERE ARE STRONG EVIDENCES.

CCC/ THE LANGUAGE CONCERNING NEC PERFORMANCE IS VERY HARDAND WE NEED TO BE TO SOME EXTENT REASONABLE (PARA. 3.3,3.4, 3.5, 3.6 AND 3.8) REFERRED (.) ALL OTHER CONTEXTIS ACCEPTABLE (.) BEST REGARDS.

EIMAR-KEARTOUM OED NOTE248423 WORLD BANK22324 EIMAR SD Para. 3.04 - Revised