Documemt of

The World Bank

FOR OFFICIAL USE ONLY

> ~3 3Z SC6-/&~ /~~ C Report No. P-5371-SC

MEMORANDUM AND ztiECODATION

* .. - ; , OF THE

PRE.SIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

AND THE-

INTERNATIONAL DEVELOPMENT: ASSOCIATIONI

TO THE

EXSECUTIVE DIRETORS ,

ON A PROPOSED. -O^

IN -AN AMOUNT EQUIVALENT Th US$1 5 lILLI-ON

--AND A -PROPOSED CREDITT-

OF.SDR 1.1 MILLION.

TO' -

..T KITTS AO NEVIS

MFOR AN

AGRIMlLTUtAL DEVELOPMENT SUPPORT PROJECTT..

l4AY 1, I"

s dofuinetwhas a -trkted d1trIbst6on4 'may be usWedby redleats .ony n tbe erfounce-' otheir official duties. Its coients may not otkenise.be dlsclosemI withoot Yold .dc: . - .

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CURRENCY AND EOIUIVALENT UNITS

Currency 'Unit - East Caribbean Dollar

EC$ 1.00 - US$0.37US$1.00 - EC$ 2.70

HEIGHTS AN HEASUME

I inch -- 2.5 centimeters (em)I oot ~30.5 cm1 mile ~-1.609 kilometers (kmn)-1 acre 0.405 hectares (ha)

1 acre-foot -1,233 euibic meters (m3) I pound 0.454 kilogram (kg)

ABBREVIAIONS~

-CARDI Caribbean Agriduiturai I(Osearch. and -Development

QWICO Carbben Communit:yCATCO, d aribbe~n Ag-ricultural Tradinh, CopnCDB CAribbeqtevl~ n Bak 'D)BSKN, ~-DOV0l0Pi~ -n Of St. Ritt6 i14-0ovis,DOA & Departmenot Agri'cvxltu

Eli ~- Eur6pean. Ie4 intBnki, -I

LDC - Led flevelpnRnt CrporaLtion~~AN * Ministv`yy of Agricl~tua~ a~s Labor.

and Tiren ei jo)inistry of.- iiifnlue, Lands ous

and Dv4op~tent, t Kitte NACGO~ Nati:onal. Agricultutal 0Carpoiation

-~SKN - St- ~Kittem anid "evie',$SWC - t Kit'ta- Suoa? fanuialturi~ig CriorionMNP -ntedl -Ut.ibn 'Dov41 net rogr'annxk

-PISAID -UIJ. S Aid' ~oAntenationa3 De1pien

7 - - C~~~~~~~OVERNMENT 1F. ST.' KI2T-T 7ND

January -1 - Deicember 31,

FOR OmCIAL USE ONLY

ST. RITTS AND NUMlS

6AGZI$UTUAL DEYELPMM MT 8PORT PROJCT

LOAN AND CREDIT D PROAECT 81UIARY

BIrrgnEs Goverment of St. Rlitte and Nevis (GOSKN)

Beneficiaries: Ministry of Agriculture, Lands, Housing and Development,St. Kitts (AB); Ministry of Agriculture, Lands, Housing,Labor and Tourism, Nevis (MAN)I and St. Kitts SugarManufacturing Corporation (8SMC)

Amounts Loan: US$1.5 million equivalentCredit: SDR 1.1 million (US$1.5 million equivalent)

Termss Loans 17 years, Including 5 years of grace at thestandard variable interest rate

Credits Standard, vith 35 years maturity

On-lendinm Terms: OSRN vould on-lend US$1.9 million of the loan and creditto SSWC on the same terms and conditions as the Bank loan(plus 1S annual premium and with SSMC assuming theforeign and cross-currency risks)

Financing Plans Government US$0.5 millionDonors US$0.8 millionIBRD US$1.5 millionIDA USS1.5 million

Total US$4.3 million

* Economic Rate of eturn n.a.

Staff Anpraisal Renort No. 8977-SC

liu_: IBRD No. 22358 end 22586

This document has a restricted distribution and may be used by recipients only in the perfomanceof their official duties Its contonts may not otherwise be disclosed without World Bank authodltt.j

13MOAUU hAND RECO)UIDAION 0F THE MSIDEUT 0? TOINTNATIONAL BANK O RECONSTUCTION AMD DEVELNT AND THE

INTERNTIONAL EVE ASSOCIATIONTO THE EUTSC IvE DIRECTORS

ON A PROPOSED LON AND CRDSITTO ST. KITTS AND lIS

NOR AN AGRICULTURAL DEVLOMET SUPORT ROCT

1. The following memorandum aud recommendation for a proposed loan ofUS$1.5 million equivalent and development credit of SDR 1.1 (US$1.5 millionequivalenc) to St. Kitts and Mevie (SIN) is submitted for approval. Theproposed loan would be repayable over 17 years, including five years of grace,at the Bank's standard variable interest rate. The proposed credit would beon standard IDA terms, with 35 years maturity. About US$1.9 millionequivalent vould be on-lent to the St. Kitts Sugar Manufacturing Corporation(SSMC) on the same terms as the Bank loan, plus an annual premium of 1l.Bilateral financing is expected for the non-sugar component of the project.The proposed loan and credit would help finance an agricultural developmentsupport project.

PART I - COUgTRY POLICIES AND BAJNK ROUP ASSISTANCE STRATZGY

2. Backaroutd. until 1980, the island economy of SKU (population40,535 on an area of 269 km') was based on the production of cane sugar.During the early 1980., tourism became increasingly important, surpassingsugar as a foreign exchange earner in 1985 (tourism's share of CDP iscurrently estimated at over 10 of CDP). Within a limited and fragileeconomic base, the country has achieved a relatively high GNP per capita(US$2,770 in 1988). At the same time, the costs of developing the basicinfrastructure needed to expand the tourism industry, improve helthfacilities and provide access to educational services bave placed a heavyburden on domestic resources. SN has maintained political stability sainceindependence in 1983. The People's Action Movement Party, ln office sinceindependence, was reelected in March 1989.

op 3. SRN, a member of the Organization of Eastern Caribbean States(OECS), has a limited scope for independent monetary and exchange rate policy.The OeCS countries osbare a common currency managed by the Eastera CaribbeaCentral Bank (ECCB). The exchange rate can only be altered by unaniousagreement. Two key elements provide the system with stabilitys strictlimitations on the ability of Governments to monetize debt by borrowing fromthe lCCd and the backing of at least 602 of the demand liabilities of the ICCBby hard currency assets. Since 1976, the common currency has been pegged tothe United States dollar at ZC$ 2.7 to US$1.0.

4. The agricultural sector is a key component of SXN's economy,generating 421 of merchandis exports, almost entirely from sugar, andemploying about 35S of the labor force. Within agriculture, the sugarIndustry accounts for 751 of production and 701 of labor. Food imports supply30S of domestic food consumption. SOM does not have a strong tradition ofnon-sugar farming and production has not been market-oriented. Agricultural

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activities have historically centered around th, sugar industry, which, until1975, consisted of 52 privately owned estates and one sugar factory. Theentire sugar industry ts now run by the state-owned St. Kitts SugarManufacturing Corporation (SSMC). About 902 of the sugar produced (at a costconsiderably higher than the world free market price) is exported atpreferential prices to quota markets in the UK and the US.

5. Recent Economic Trgsds and Prosgects. SKN's economic performancehas been relatively strong in recent years. Real GDP grew on average at over5 per annum during 1982-89, led by tourism and related construction. Thebalance of payments current account deficit increased from about 10 of GDP in1987 to 15S in 1988 and 1989, reflecting increased imports financed mostly bygrants and highly concessionary loans. The current account surplus of theconsolidated public sector evolved from 42 of GDP In 1986 to about 72 of GDPin 1987 and then to about 52 in 1988. The decline In public iector savings in1988 was caused by a 52 reduction in the corporate tax, a 202 public sectorwage increase to restore competitiveness with private sector wages, higherexpenditures on goods and services, and rising operating losses of theElectricity Department. Growth in tourism and construction has strainedlimited labor resources and has resulted in additional wage and costpressures, which have reduced overall competitiveness in low-technology, laborintensive production.

6. SKR's future development prospects are favorable, assumingcontinuation of prudent Government fiscal and debt "mnagement policies and theabsence of major exogenous shocks. These favorable prospects hinge on thegrowth of tourism, the expansion of manufacturing and, to a limited extent,agricultural diversification. Projections of real GDP growth In SoN reflectthe projected rapid growth in tourism, slow declin in the sugar Industry,relative stagnation in the manufacture of clothing, expansion in electronicsassembly and development of non-sugar agriculture. Private foreign investmentis assumed to finance developments In tourism, but Government borrowing tosupport infrastructure requirements will be required from concessionalsources. Overall, real GDP is projected to grow at 4.52 per year during the1990-2000 period. Real exports of goods and non-factor services are projectedto grow by an average of 6.52 per year during this period, while the realgrowth of imports of goods and non-factor services is projected to averageabout 32 per year.

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ST , IIm AND NEVIS: SELECTED ECONOMIC IUDICATORU

1984 1985 1986 1987 1988 1989

GRONTH RATES a/GDP f.c. 9.0 5.6 6.3 7.5 6.7 5.1GDP/capita 11.2 8.7 8.4 8.5 8.2 6.6

RATIOS (Z) h/Debt servicelxgnfs 2.6 3.4 7.7 2.2 2.6 1.3

Govt revenue/GDP 31.2 31.1 30.7 32.1 30.3 a/aGovt expenditurelGUP 34.2 43.0 33.6 34.9 37.7 alaOverall deficit/GDP -3.0 -11.9 -2.9 -2.8 -7.4 ala

Current account -3.7 -4.1 -2.7 -10.4 -17.6 -20.0Current account/GDP -5.2 -5.5 -2.9 -9.8 -14.8 -15.1

UIDICESConsumer prices el 169.5 123.3 174.0 175.6 176.0 alReal exchange rate A/ 109.1 108.8 105.0 98.7 92.3 ula

&i Based on constant 1977 prices.k; Based on current prices.a/ 1978 - 100.41 1980 - 100.

7. External debt in 1988 was US$26.4 million (222 of GDP) and theexternal debt service was equivalent to about 21 of exports of good andservices. The ratio of debt service to public sector current revenuesapproximated 8S. However, the difficult financial situation of the sugarindustry and the fledgling nature of tourism flows underline the fragility ofthe economy given its thin base and vulnerability to external shocks; thus,SKN should exercise caution in contracting further external debt over themedium term. The above considerations imply that SIR could be consideredcreditworthy for limited non-concessional borrowing.

8 *DelouMen Issues and Priorgties. The central developmsent issufacing SKI is the diversification of the country's economic base. The growthIn tourism achieved in recent years in response to the Government'sinvestments in Infrastructure has launched this process. Expansion of tourimwill be based on private investment. In agriculture, the Government's long-term stratogy is to reduce the dependence on sugar by supportingdiversification into other crops In manufacturing, SOR has bean successfulin attracting enclave-type industries despite rising labor costs. Rowever,

further expansion requires upgrading skills of the work force to enhanceproductivity and overall competitiveness. Availability of funding atconcessionary terms will be required to expand infrastructure and to improvehuman resource development.

9. SRN's development prospects will require addressing the followingis'-ses: (a) increasing public sector savings, especially by containingcurrent expenditurel (b) promoting non-traditional agriculture throughresolution of land tenure problems, market promotion, and efficiency gansthrough improved information and technical assistance services, and divestmentof the sugar Industry; (c) directing the Public Sector Investment Program's(PSIP) emp_a3is to tourist infrastructure, health facilities and oducation;and (d) elizusating restrictions on foreign labor to alleviate labor shortagesand wage pressures.

BAI= GROUP 0ASISTANCI

10. The Bank Group assistance strategy aims at assisting SKY to carryout the aforementioned policy agenda, and, in particular, to diversifyproduction to help reduce economic vulnerability and enhance ereditworthines.This strategy, as well as that for the other oee8 countries, Is contatied Inthe Board Document titled "Terms of Lending to Small Island EconomiesGraduating from IDA", dated November 18, 1985. SKY was deemde eligible for anIDA allocation based on the following special features of the countrysti) lack of full IBID creditworthiness; (11) high export concentration onsugar and tourism, and heavy dependence on exports as the source of growth;(iII) high cost of infrastructure; ('v) limi4ted skills and weak institutionalcapacity; Cv) difficulty in achieving economies of scale; and(vi) vulnerability to climatic conditions.

1I. Since 1985, the economy of SKI has performed well and policesl havebeen basically sound. But conditions that justify IDA eligibility stillprevail and the external enviroment, which has been favorable, is projectedto be less so In the future. Notwithstanding the progress made, the countryrequires more time to broaden Its economic base and devolop * growing degreeof resiliene. The country's vulnerability reduces its creditworthines andaccess to voluntary commercial credit. It is for these reaoons that SKI andother O0CS countries continue to be considered eligible for limited IDAresources.

12. Lendina Protram. Economic and Sector Work (ISV) and AUdgoordination The proposed loan and credit would be the eighth direct BankGroup operation with the o0c8 countries and the first for SKI. SIN has,however, benefitted from Bank Group loans channelled through the CaribbeanDevelopment Bank (CDB). For the future, CDI is expected to play a greaterrole in lending to o0c1 countries in line with the Collaborative Programagreed between the Bank Group and CDB in 1990. After the project nowproposed, the Bank Group would limit its direct assistance to the O0CScountries primarily to policy advice, based on the Long-Term Prospects Studycompleted In PY90, the CARI0*31 trade report completed in FY91, and selectivefurther ESN covering regional issues as well as country-specific issues.

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Lendig will be choaelled through CDI except for large projects beyond COI'scapacity (which may bo co-financed with CDB) or for those dealing with soctorswhere CDB doe. not yet operate. such as projects usalinD with the eviromentand those vith a heavy policy content. The Ban k is identifying an OICSenwirotentael project where, a in any future operation In the OeCS countries,the blend of IDAtIItD resources will be determined on a country-by-countrybasi according to inome level and creditworthiness prospects. Iu addition,the Bank will continue in Its role of coordinating and mobilizing externalassistance to the OECS countries through the Caribbean Consultative Group(COCED). The Bank, a. for other OUCS countries, maintains close coordinationwith the IMF In Its ROW program. The IM has not had a formal progrsam ithSM. It conducts regular Article TV consultations.

13. The proposed operation is the outgrowth of the rewiew of 8KI'sPSIP, conducted under the auspices of the COCED chaired by the Bank. It formsthe centerpiece of SXN's agriculture PSIP. For the future, and in line withthe collaborative program between the lDak Group and CDBI, the Bank's strategyin agriculture is to work with CDB in developing a common agricultural sectorstrategy for the small Caribbean islands, as the bass for chznnellingresources through CDB for the financing of projects similar to this one.

AR II - TU PPT POC

14. Prolect Objectlves. The key objectives of the proposed project areto inprove the pace and diversity of SRN'. agricultural development throughs(i) changes in the incentive frsaework, which are aimed at providing securityof landonership and migrnt labor to work in agriculture (particularly In thesugar industry); (II) Improvements in agricultural support services and theGovernment's agricultural planning capacity; and (III) changes in theoperations of the sugar industry, including its divestment in the second yearof the project.

15. Prol ct DesgriAt_oa. The project would have two major components.The agricultural development component would comprise a land administrationprogram, consisting of a new leasehold titling system, cadastral msapping andland surveying (16S of project cost); strengtheing of exte4sion and landservices of the Departments of Agriculture (DOAs) (102 of project cost); madagricultural planning, including market research and investment promotion (301of project cost). The project would provide consultancy services, involvtng46.5 man-months, for cadastral mapping, land surveying, organization andmanagement review, economic and physical planning, and market development; andnine local staff to assist with the implementation of the leasing program andto strengthen the DOAs. External training would be provided for three staffof the Land Development Corporation (LDC) in land economy and valuation. Thesecond major component concerning the sugar industry (442 of project cost)would support the engagement of a small management team to keep the mlloperating, and to Introduce much-needed operational improvements, while aprospectus is put together to facilitate the sale of the sugar mill no laterthan September 30, 1992. The Ministry of Agriculture, Lands, lousing andDevelopment, St. Kitts (MAS) would have overall responesbility for theproposed project. The existing functional departments of MAE and the Ministry

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of Agricultu, Lands, Labor and Tourism, ewis (MAN) would implement theaicultural developmt cmponet. The maasemet of the sugar industry,prior to ito eale, would be contracted to a private mangement tesm. Thetotal coot of the project Io esttated at US$4.3 million equivalent, with aforeign ebag component of US$3.7 million (866). A breakdown of costs andthe fiuancing plan are shoam n Schedule A. Amount. and methods ofprocur mut and of disbureements, together with the disburesment schedule, arebow In Schedule B. A timntable of key project processing events to given SnSchedule C. The Staff Appraisal Report 1o. 8977-SC, dated Bay 1, 1991, toalso attached.

16. Attons 4 td. The Borrower hass (a) enacted a new LandDevelopment Act, which replaces the annual lease system with 35-year renewableleases, and includes arrangements for settling disputes arising therefrom;(b) established tenant selection criteria and implementation procedures forthe leasing program, and agreed to establish a committee to determine annualland rentals; (a) signed a two-year management contract with a firms, underterms and conditions acceptable to the Baok and IDA, for managing the sugarindustrys (d) agreed to allow employment of migrant laborers to work in thesugar lndustry; (e) elinsiated the levy imposed on the sugar industry;(f) submitted SSMC's audited financial statements for 1988 and 1989; and(g) dosignated the Project Coordinator in rhe Office of the Minister of HAS.As conditions of effectiveness, the Borrower has agreed to: (a) sign aSubsidiary Agreement, satisfactory to the Bank and IDA, between the Governmentand 55MG; (b) contract experts, undor terms end conditions satisfactory to theBank and IDA, to prepare a prospectus for the sale of SSMC (c) eliminate thespecial cess isposed on the sugar industry; and (d) establish In the NationalBank a Project Account, with an initial deposit of EC$ 100,000. QQoAct40s: The Borrower he. also agreed thats (a) it would either employ, ormake arrasemenats, acceptable to the Bank and IDA, to obtain the necessaryfunds, through bilateral assistance or other means, for the employment of asenior economic specialist and a land use specialiot, under terms andconditions acceptable to the Bank and IDA, not later than December 31, 1991;(b) HAS would employ consultants in ¢adastral mapping, survey practices andorganization and management, under terms and conditions acceptable to the Bankand IDA, not later tban December 31, 1991; (c) HAS would employ vonsultants inmarketing and investment promotion, under terms and conditions acceptable tothe Bank and IDA, not later than March 31, 1992; (d) HAS would provide thenecessary staff for the DQA, the Central Housing Authority and the Office ofRegistrar of Titles, all with qualifications satisfactory to the Bank and IDA,not later than December 31, 1991; (e) HAS and MAN would employ a senioragriculturalist for the DOA In St. Rltts and a senior agriculturalist for theDOA In Nevis, with qualifications and experience, and under terms ofreference, all satisfactory to the Bank and IDA. Incremental salaries forthese two local staff would be financed on a declining basis, with theGovernment assuming 1001 of costs by project completion; (f) WAS and MAN wouldprovide agricultural extensin services, satisfactory to the Bank and IDA,ensure that the DOAs bave adequate funds for the provision of extensionservices, and mainttain an adequate number of agricultural extension staff,satisfactory to the Bank and IDA; (S) DOAs would divest themselves of theoperation of the agricultural machinery pool not later than December 31, 1995;(h) SSMC would, by December 31, 1991, offer for sale its sugar mill, together

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with a long-term lease from the Borrower of its sugar land., by way of sbhres,jolit venture, or other arrang_ments, satisfactory to the Bank and IDA;(1) not lter than March 31, 1992, prepaoe an action plan, satisfactory to theBank an IDA, aied at mitigating economic and socil welfare problem thatcould arise in the event of closure of the sugar mills (j) by September 30,1992, establish a timetble in accordance with the above ction pla,satisfactory to the Bank and IDA, to close down th. sugar mill In the eventthat no satisfactory arrangement has been made to sell the mill and if theIndustry continues to Incur substantial losses, unless the Bank and IDA ohallotherwise agrset (k) in the event of closure of the sugar mill, comence theImplementation of the above action plan no later than three months after theclosing takes placel (1) the Central Planning Unit (CPU) would submit to theBank and IA the necessary data and information on the project through snnualprogress reports, begining February 28, 1992. CPU would also monitor projectimplementation and evaluate the resultsl (m) CPU would annually review withCDB and the Bank and IDA the PSIP, beginning March 31, 1992, in terms of thevolume of resources available for various sectors relative to developmentpriorities and adequacy of financaing, including any proposed changes in thetiming and composition of the agreed investmeat program for agriculture; end(n) LDC would develop and enter into contractual arrangements, satisfactory tothe Bank and IDA, which would bind employees receiving training under thetraining progrsm to provide not less than two months of service to LDC foreach month of training received.

17. ProJect Benefits. The main benefits would come from theestablishment of efficient conditions for agricultural development,particularly by replacing the one-year agricultural lease system with 35-yearrenewable leases, tbereby removing a major deterrent to the developmnmt of theagricultural sector in SKN. The project would help to provide the policiesand legal framework for the orderly management and future development of landresources. Direct beneficiaries would be small farmer and business peoplewho may be attracted into agricultural development, for whom access to land,agricultural support services and market information and assistance would beprovided. The proposed project would alsb help stabilize the financialcondition of the ailing sugar industry, while seeking to sell it off as agoing concern, thereby relieving the Government of the financial burden of theindustry that has been losing money due to poor management. The new lesingprogram, Including the land use planning study and zoning work to be Initiatedunder the project, would lay the framework for more orderly andenvironmentally sound development; and the improvements in the management andoperation of the sugar mill and fields being provided under the project wouldfurther enhance the positive environmentally stabilizing aspects of the crop.As it would be difficult to quantify the benefits of the teconical assistanceand related support for Improving agricultural planning capacity, as ell assupport services under the project, the economic rate of return bas not beencalculated.

18. jglj. The main risks would be the extent to which interest can befostered in the agricultural sector outside of the sugar industry, and theability of such entrepreneurs to secure market niches for agricultural -products, both within the growing domestic tourist/hotel market and abroad.Another important risk relates to the timefreme needed for the sale of the

industry end trnfoer to the pr4vate sector. To m4n4n4is the first sot ofrisks, the project desig includes considorable technical asisataDe forupgraditg sgrcltual *upport service., nd for aslitlog favor groups adantreprnours to seek out and supply new nAih.s* the latter rlsk to

safeguarded by the provision of investment banking advisory services for thedivostiture.

19. *begNcrd^io I an satisfted that the proposod loss and creditwould comply with the Articls of A$reemat of the Bank and IA en recommeadthat the gxecutive Directors approve the proposod loan and credit.

Barber D. ConablePresident

Attacments

Washington, D. C.may 1, 1991

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,ST. KUTS AS, UVI

LOCLUA, a 0 t R -

RstSiatd Costs and Panc P

latimated Costs 11

* ~ (US$ m4, 1 uc) _-______

Ar4ulurl Da2 lontLand Admin±tration 0.3 0.2 0.5Support 8evviess (DOAs) 0.2 0.2 0.4AgTicultural Plaung 0.0 1.0 1.0

buAar ZNWIas 0.0 1.4 1.4

Procset Precaration Pacilitv Adne I&l 0

BasJ Cos t CL st

Physical Conticguieo 0.0 0.3 0.3P.l.e Continencies sl LI L.

Total 0.6 3.7 4.3

* Gov.nmant 0.5 0.0 0.5Danors 0.0 0.8 0.8Bank Gt.OS 1.45 1.5

* ~~~~IDA L2I IJ41L

Total 0.60 3.70 .4.3

&I Ixalusive of taxes ad duti"e, wic we ngligible.

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Schedule B

ST. KITTS AND NVMSAGRICULTURAL DEVELOPMENT SUPPORT PROJECT

Procurement Method and Disbursement.

Procurement MethodInternational

Project Element Shopping Other Total-- (US$ million)-----------------

Consultants 2.9 2.9(2.17) (2.17)

Equipment & vehicles 0.5 0.5(0.4) (0.4)

Training 0.05 0.05(0.05) (0.05)

Local staff 0.4 0.4(0.030) (0.030)

Minor works & supplies 0.15 0.15(0.05) (0.05)

Project preparation 0.3 0.3(2.3) (0.3)

Total 0.65 3.65 4.3__--3

(0.45) (2.55) (3.0)

Note: Figures in parentheses are the amounts to be financed by the Bankloan and IDA credit.

Disbursemente

Amount 2 of ExpendituresL oa.Cbt Bank IDA Financfd

(USL) (LR m

(i) Consultants' services 0.980 0.578 - 1002(ii) Goods 0.100 0.211 - 1002 of foreign & 1002

of local expenditures(ex-factory cost)

(iii) Training 0.030 0.014 - 1002(iv) Incremental salaries 0.030 0.021 - 1002 until the amounts

disbursed reach anamount of SDR 0.021 m;502 up to US$0.03 m;and 352 thereafter

(v) Works 0.040 0.007 - 1002 of foreign& 602 of local exp.

(vi) Audit fee 0.002 0.001 - 52 of total cost(vii) PPF Advance Recovery 0.15(1 0.106 - Amount Due

(viii) Unallocated Jj6 0,0162Total 1.500 '1.00

Estimated Bank/IDA Disbursements (US$ million)

BankPY 12 1993 1994 1995 1996 1997 1998 1999Annual 0.5 0.8 0.9 0.6 0.05 0.05 0.05 0.05Cumulative 0.5 1.3 2.2 2.8 2.85 2.90 2.95 3.00

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ST. KITT AID 311

TXItabl. of RIn P!roiet Poceos. Ihrt

a. Tine taken to pptrepa. Aboit two yeas

b. Prepared by: @ves ithWAOICI asetetauc.

c. First ZBIRIIDA )f±.etons July 1988

d. Appraisal Mission Deptu:.: Match 1990

o. legottations: Mah 1991

f. Pl--ned Date of Effectivenes. Augt 1991

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Schedule D

ST. RITTS AND URVIS

ftatus of Bank aOwun 6neration In Sft. RKtts and N (i8SKI)

A. Statement of Bank Loans and IDA Credits a of December 31. 1990

None

5. Statement of IC Investments a ogf DeceSber 31. 1990

Non

MAW SECTION

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