Click here to load reader

World Bank Document · PDF file Currency Unit - Kip US$ 1.00 -Kip 600 Kip 1000 - US$ 1.67 GOVERNMENT AND IMPLEMENTING AGENCY FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES

  • View
    4

  • Download
    0

Embed Size (px)

Text of World Bank Document · PDF file Currency Unit - Kip US$ 1.00 -Kip 600 Kip 1000 - US$ 1.67...

  • Document of

    The World Bank

    FOR OFFICIAL USE ONLY

    C; "I

    Report No. 8106-LA

    STAFF APPRAISAL REPORT

    LAO PEOPLE'S DEMOCRATIC REPUBLIC

    SECOND TELECOMMUNICATIONS PROJECT

    FEBRUARY 6, 1990

    Industry and Energy Operations Division Country Department II Asia Region

    This document has a restridcted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

    P ub

    lic D

    is cl

    os ur

    e A

    ut ho

    riz ed

  • CURRENCY EQUIVALENTS (As of July 1989)

    Currency Unit - Kip

    US$ 1.00 - Kip 600 Kip 1000 - US$ 1.67

    GOVERNMENT AND IMPLEMENTING AGENCY FISCAL YEAR

    January 1 - December 31

    WEIGHTS AND MEASURES

    Metric System

    ABBREVIATIONS AND ACRQNYMS

    BCEL - Banque pour le Commerce Exterieur Lao CEM - Country Economic Memorandum EDL - Electricite du Laos EPTL - Entreprise d'Etat des Postes et

    Telecommun catiins Lao ERR - Economic ITternal Rate of Return FRR - Financial Internal Rate of Return FX - Foreign Exch9nge GDP - Gross Domestic Product HF - High Frequency (Radio) ICB - International Competitive Bidding ITU - International Telecommunications Union Lao PDR - Lao People's Democratic Republic LCB - Local Competitive Bidding LIB - Limited International Bidding MCTPC - Ministry of Communications, Transport,

    Post and Construction NSEM - New System of Economic Management P&T - Post and Telecommunications PABX - Private Automatic Branch Exchange SOE - Statement of Expenditure UHF - Ultra-high Frequency UNDP - United Nations Development Programme

  • FOR OMCIL USE ONLY

    I.AO PDR

    SECOND TELECOMMUNICATIONS PROJECT

    CREDIT AND PRQOCjSIRY

    Borrower: The Lao People's Democra* ic Republic (Lao PDR).

    Beneficiary: Entreprise d' Etat des Postes et Telecommunications Lao (EPTL).

    Amount: SDR 19.1 million (US$24.5 million equivalent).

    Terms: Standard IDA Terms with 40 years maturity.

    Onlending Terms: Proceeds of the IDA credit, along with financing from other sources, will be passed on by the Government to EPTL as a mixture of equity (US$9.3 million, 38%) and loan (US$15.2 million, 62X); the terms of the loan are: 8% interest, 20 years, including 5 years of grace; EPTL will bear the foreign exchange risk.

    Pr2oect Objectives: The objectives of the proposed Project are to: (a) carry out priority investments in the sector, particularly the first phase of a nation-wide digital telephone network, and improve irnternational telecommunications services; (b) strengthen EPTL's capabilities in the areas of planning, project implementation, operations, maintenance and financial management; and (c) develop EPTL's human resources.

    Project Description: The proposed Project is an integral part of EPTL's ectoral Telecommunications Investment Program 1990-95 (the Program) and will include the following components: (a) installation of automatic digital telephone exchanges in Vientiane and five provincial capitals with a capacity of 15,000 lines; (b) construction of local cable networks, subscriber connections and installation of public call facilities in the six cities; (c) installation of a backbone network of digital microwave links, connecting all new telephone exchanges; existing HF-radio links will be relocated into regions with lower traffic demand; and (d) training and technical assistance to strengthers EPTL's project implementation and operations capabilities. To assist in project implementation, training, institutional and financial development, EPTL w-ill employ consultants which are presently assisting in detailed design and preparation of tender docume.itation.

    This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

  • - ii -

    Benefits: The Program represents an important first step in the Govern- ment's strategy of national integration and simultaneous economic decentralization through improved telecommulications infrastructure. It will help develop a comprehensive, integrated, nationwide network, providing the critical backbone from north to south. It will significantly improve telecommunications services (including automatic access to international networks) to about 5,200 existing Lelephone sub- scribers and provide services to about 9,500 new subscribers in six major locations throughout the country. Redeployment of existing HF equipment will benefit other provinces. The Program is expected to yield an economic rate of return of about 13X.

    Risks: The major project risk is that implementation may be slower than expected because of EPTL's weak implementation capabilities. The proposed Project includes measures to mitigate this risk: (a) a substantial program of technical assistance (including project management) and training of EPTL staff; (b) early appointment of project implementation consultants; and (c) structuring of procurement around a small number of packages which can be awarded on a turn-key basis.

  • - iii -

    Estimated Project Costs: Local Foreign otal --- (US$ million)----

    Telephone exchanges 0.0 9.9 9.9 Transmission 0.9 8.7 9.6 Outside Cable Plant 0.6 7.5 8.1 Ancillary Equipment 0.0 0.9 0.9 Buildings 0.3 0.3 0.6 Project Management & TA 0.3 2.3 2.6 Training 0.1 0.6 0.7

    Total Base Cost __ 30.2 32.4

    Physical contingencies 0.2 1.5 1.7 Price contingencies 0.3 4.2 4.5

    Total Prolect Cost 2.7 35.9 38.6

    Interest During Construction 2.2 0.6 2.8

    Total Financing Reauired 36.5 41.4

    Project Financing Plan:

    IDA 1.4 23.1 24.5 UlDr.p 0.1 1.1 1.2 Japanese Government Grant 0.0 11.7 11.7 EPTL LA2 0.6 4.0

    Total Financing 4. 3. 41

    Estimated Disbursement: IDA El 1221 12 1993 1994 1995 1996 19.7

    -------------(US$ million)-------------- Annual 1.0 2.7 4.1 4.9 3.7 4.7 3.4 Cuaulative 1.0 3.7 7.8 12.7 16.4 21.1 24.5

    Rate of Return: 13X

    Map:L IBRD No. 21 898

    A Based or, an Exchange Rate of Kip 600 - US$1.00; the Project is exempt from duties and taxes.

  • SECOND TELECOMMUNICATIONS PROJECT

    Table of Contents Page No.

    CREDIT AND PROJECT SUMMARY .i................... . .

    I. INTRODUCTION .1.. . . . . . . 1

    II. ECONOMIC BACKGROUND ........ .. ... . ...... . .

    III. THE TELECOMMUNICATIONS SECTOR . . . . . . . . . . . . . . . . . 2 Sector Organization ................... 2 Existing Facilities ................... 3 Quality of Service ................... 3 Access to and Usage of Service . . . . . . . . . . . . . . 3 Demand for Service ................... 4 Sector Constraints ................... 5 Government Objectives and Strategy for the Sector . . . . . 5 Ban': Group's Experience in the Sector . . . . . . . . . . 5 Rationale for IDA Involvement in the Proposed Project . . . 6

    IV. THE BENEFICIARY - EPTL ..................... 7 Responsibilities . . . . . . . . . . . . . . . . . . . . . 7 Organization and Management . . . . . . . . . . . . . . . . 7 Human Resources and Training . . . . . . . . . . . . . . . 7 Technical Assistance ................... 8 Financial Management and Accounting System . . . . . . . . 8 Billing and Collection . . . . . . . . . . . . . . . . . . 9 Audit.10. ................. Performance Monitoring . . . . . . . . . . . . . . . . . . 10

    V. THE PROGRAM AND THE PROJECT ... . . . . . . . . . . . . . . . 11 Introduction .... . . . . . . i . . . . . . . . . . . . 11 Investment Program 1990-95: Objectives . . . . . . . . . . 11 Investment Program 1990-95: Description . . . . . . . . . . 11 The Proposed Project ... . . . . . . . . . . . . . . . . 12 Project Objectives . . . . . . . . . . . . . . . . . . . . 12 Project Description . . . . . . . . . . . . . . . . . . . . 12 Project Cost . . . . . . . . . . . . . . . . . . . . . . . 13 Project Financing and Terms ... . . . . . . . . . . . . . 14 Retroactive Financing .... . . . . . . . . . . . . . . . 16 Status of Preparation .... . . . . . . . . . . . . . . . 16 Project Implementation . . . . . . . . . . . . . . . . . . 16 Procurement .... . . . . . . . . . . . . . . . . . . . . 16 Disbursements .... . . . . . . . . . . . . . . . . . . 18 Performance Indicators, Project Monitoring, Auditing, and

    Reporting .... . . . . . . . . . . . . . . . . . . 19

    This report is based on the findings of an appraisal mission to Lao PDR in July/August 1989, comprising Christian Duvigneau (Task Manager), David Delgado (Telecommunications Engineer), and Aldo Baietti (Consultant).

  • - ii -

    VI. FINANCIAL ANALYSIS . .... .................. 20 Introduction . . . . . . . . . . . . . . . . . . . . . . . 20 Past Financial Performance: EPTL Consolidated . . . . . . . 20 Past Financial Performance: Telecom. Operations . . . . . . 22 Valuation of Assets . . . . . . . .