Colombia - Fifth Telecommunications Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2683-CO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO EMPRESAS PUBLICAS DE MEDELLIN WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA FOR A FIFTH TELECOMMUNICATIONS PROJECT March 10, 1980 This doment hus a reticted dIutrisibudon nd may be used by recipients only In the perfer_mce ef their oficil dutes. Ils cOtebts may not otherwise be disclosed without Wld flank authoration.  CURRENCY EQUIVALENTS Average Calendar 1979 Average Calendar Year 1978 (Estimate) Currency Unit = Peso - Col$ Col$ US$1 = Col$39.25 42.6 Col$1 = US$0.025 0.023 ABBREVIATIONS EDA: Empresas Departamentales de Antioquia EPM: Empresas Publicas de Medellin ICB: International Competitive Bidding MOC: Ministry of Communications NPD: National Planning Department NTB: National Tariff Board TELECOM: Empresa Nacional de Telecommunications FISCAL YEAR January 1 to December 31  FOR OFFICIAL USE ONLY COLOMBIA FIFTH TELECOMMUNICATIONS PROJECT LOAN AND PROJECT SUMMARY Borrower: Empresas Publicas de Medellin (EPM) Guarantor: Republic of Colombia Amount: US$44.0 million equivalent Terms: Repayment in 17 years, including four years of grace at interest of 8.25% per annum. Project Description: The proposed project would be the first Bank supported effort to strengthen a municipal telephone system in Colombia. It is aimed at expanding and improving service in Medellin, the second largest city, and the surrounding area and at strengthening the Empresas Publicas de Medellin (EPM) so that it can expand services to other urban and rural areas in the largest department in Colombia (Antioquia). The project comprises the installation of (a) about 108,400 local switching equipment lines and about 90,000 additional connections; (b) subscribers and cable plant to enable a further 10,000 additional connections to be made; (c) 3,300 public call office telephones which would serve largely low income communities; and (d) buildings to house project equipment. During project execution, EPM would carry out studies aimed at improving the entity's organizational and tariff structure. EPM is a competent public utility and should be able to carry out the project on time; it has already taken initial steps which demonstrate that the risks of unusual delays are minimal. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  tii) Estimated Cost: Local Foreign Total (Us$ Million Equivalent) Exchange equipment 7.7 30.3 38.0 Cables 11.3 13.6 24.9 Subscribers plant 1.4 4.4 5.8 Public call office telephones 0.2 1.7 1.9 Buildings 1.3 - 1.3 Freight and insurance 3.0 5.6 8.6 Total Base Cost 24.9 55.6 80.5 Physical contingencies 0.9 - 0.9 Price contingencies 16.5 12.1 28.6 Total Project Costl/ 42.3 67.7 110.0 Financing Plan: Local Foreign Total (US$ Million Equivalent) World Bank 44.0 44.0 Suppliers' Credit 11.5 11.5 Other Bank loans - 9.9 9.9 EPM 42.3 2.3 44.6 Total 42.3 67.7 110.0 Estimated Bank Fiscal Year 1981 1982 1983 1984 1985 Disbursements: (Us$ Million Equivalent) Annual 11.0 14.0 11.8 5.2 2.0 Cumulative 11.0 25.0 36.8 42.0 44.0 Rate of Return: 16.8% Appraisal Report: No. 2795-CO, dated March 7, 1980. 1/ EPM is exempt from custom duties and taxes.  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO EMPRESAS PUBLICAS DE MEDELLIN WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA FOR A FIFTH TELECOMMUNICATIONS PROJECT 1. I submit the following report and recommendation on a proposed loan to Empresas Publicas de Medellin (EPM), with the guarantee of the Republic of Colombia, for the equivalent of US$44 million to help finance a Fifth Tele- communications Project. The loan would have a term of 17 years, including four years of grace, with interest at 8.25% per annum. PART I. THE ECONOMY 1/ 2. An economic report on Colombia (2535-CO) was distributed to the Executive Directors in June 1979. A small updating mission visited Colombia in mid-December and this section on the economy reflects its major findings. Country data sheets are provided in Annex I. Background 3. Colombia has made substantial progress over the past two decades in the transition from a predominantly rural and agricultural economy scattered among several isolated, but largely self-contained, regions to a more inte- grated, urban industrial economy. The productive base of the economy has been widened and diversified, and a modern sector relying heavily on imported inputs has developed. The country's external sector has been strengthened by the rapid growth of non-traditional exports. Fluctuations in domestic economic conditions resulting from unpredictable shifts in world coffee prices, while still considerable, have become more manageable. 4. Following several years of erratic economic growth and high unemploy- ment, the Colombian authorities introduced in 1967 a dramatic change in devel- opment policy, shifting emphasis from a protectionist policy of import substi- tution to measures designed to expand and diversify exports. With only minor modifications, this export promotion strategy remained in effect until the mid-1970s. These policies were successful in expanding non-coffee exports, thereby alleviating the foreign exhcange constraint to growth and making possible a higher level of investment. As a consequence, real GDP growth accelerated to an average 6.5% p.a. between 1968 and 1974, well above the historic average, and non-coffee merchandise exports rose nearly threefold. 5. Despite these advances, the economy showed signs of deteriorating by late 1974. This was largely the result of slower growth in the industrial economies, an inelastic tax system and imported inflation which led to a weakening of the public finances and balance of payments and an acceleration 1/ This section is unchanged from that included in the President's Report for Bogota Power Distribution Project (Report No. 2676-CO).  in domestic inflation. In addition, the country was faced with a pending loss of self-sufficiency in petroleum, its primary energy source. These develop- ments prompted the authorities to introduce a stabilization program, accom- panied by basic reforms of the fiscal, monetary and trade systems aimed at restoring the basis for accelerated long-term growth. Concurrently, petroleum pricing policy was modified to improve incentives for oil exploration and development and policies were initiated to reduce the subsidy on local consump- tion of petroleum products. These reforms were successful in improving the public finances and reducing inflation in 1975, but initially caused economic growth to slow (from 6.0% in 1974 to 3.8% in 1975) as the economy adjusted to the changing domestic and international circumstances. Recent Economic Developments 6. During the three years 1976-78 the Colombian economy was subject to severe inflationary pressures which caused the Government to focus economic policy on short term stabilization rather than on long term development issues. The origin of these pressures was the exceptionally high world coffee price prevailing during this period which caused Colombia's export earnings from coffee to increase to US$1.8 billion and US$2.1 billion in 1977 and 1978, respectively (from an average US$725 million in 1974-75), producing an unpre- cedented rise in incomes and internal demand. The supply of consumer goods, particularly of basic foodstuffs which was adversely affected by drought conditions in most of the country, lagged behind the growth in demand and inflation accelerated to the unprecedented rate of 44% in the twelve months ending June 1977, from 26% the preceding year. The authorities responded rapidly by introducing a broad range of fiscal, monetary and trade,policies designed to gain control over the explosive increase in prices. As a conse- quence of these measures and of a favorable second semester harvest, inflation declined sharply throughout most of the following 18 months, with the annual inflation rate leveling off at 29% in 1977 and falling to 18% in 1978. 7. Because of the lack of dynamism in world markets and modest increases in domestic investment, the Colombian economy expanded only moderately in 1976 and 1977, with real GDP growing by 4.6% and 4.8%, respectively, in those two years. In 1978, however, real GDP rose by an estimated 8.5% in response to continued strong growth in aggregate demand, supported by expanded private investment financed increasingly through a rapidly growing extra bank market and by favorable agricultural conditions. Since growth was concentrated in the relatively labor intensive sectors of the economy--personal services, trade, transport and communications, and small-scale manufacturing and agri- culture--unemployment declined sharply during this period. In 1978, unemploy- ment in the four major cities averaged about 8% of the labor force, compared with an average of about 12% a few years earlier. Both the balance of payments and the public finances generated large current surpluses in the 1976-78 period. Largely as a result of increased coffee export receipts, Colombia's net official international reserves had risen from US$573 million at the end of 1975 to US$2.5 billion by the end of 1978, equivalent to about nine months imports of goods and non-factor services. This increase in reserves occurred despite nearly 12% p.a. real growth in imports and slow growth in manufactured exports. Curbs on public investment and higher revenues from the coffee tax and from earnings on international reserves made possible unprecedented overall surpluses in the public finances.  - 3 - 8. Despite continuation of the stabilization policies in effect since early 1977, inflationary pressures increased somewhat in 1979. A mild frost in Brazil's coffee areas caused world coffee prices to rise early in the year, resulting in an acceleration in reserve accumulation and in aggregate demand growth. Widening interest rate differentials favoring Colombia and real appreciation of the peso, generated short-term capital inflows, which, together with delays in import payments, led to further reserve increases. Receipts from illegal exports provided an additional source of funds for the already overly liquid economy. In all, net official reserves rose by approxi- mately US$1.6 billion for the year, reaching the equivalent of 11 months imports at year end. About mid-year the authorities issued a new series of short term securities carrying highly competitive interest rates in an effort to absorb some of the excess liquidity existing in the formal and informal credit markets. This issue, which represents a significant break with past open market operations that were not interest-competitive and forced onto financial institution portfolios, was successful in attracting funds equivalent to 5.4% of the monetary base by year end, helping to reduce money supply growth (M2) in the formal market from 30% in 1978 to 24% in 1979. Nevertheless, large wage increases and higher energy costs, together with rapid growth in domestic demand, pushed inflation up to 30% for the year. Economic growth was strong again in 1979, with real GDP rising by an estimated 5.5%, and unemployment remained low. Distribution and Welfare 9. The steady gains in per capita income, together with rapid rural/ urban migration and expanded employment opportunities for women over the past quarter century caused a dramatic drop in the crude birth rate. The achieve- ment of lower birth rates was facilitated by expanded family planning programs. Consequently, Colombia's population growth rate declined sharply, from over 3% in the late 1950s, to about 2.8% in the early 1970s and to an estimated 2.1% at present. Although 66% of the population lives in urban centers, there are now 22 cities with populations exceeding 100,000 persons. Some of the major cities have serious transportation, housing and urban congestion problems, however, and large numbers of persons live under poor conditions. 10. Available evidence suggests that the welfare of all income groups in Colombia has increased significantly since the 1950s and that the propor- tion of the population living in absolute poverty has declined. These gains were in part a consequence of reasonably good economic growth and of efforts to raise welfare through investment in health, education, low income housing, water and sewerage, and other social services. Existing data on income dis- tribution trends present a less clear picture. It is probable that some improvement occurred in income distribution between 1950 and the mid-1960s as a result of a strong shift of the labor force from rural areas to higher productivity jobs in urban industry and services and of relative wage gains for urban unskilled workers. Accelerated inflation through the early and mid- 1970s caused real wages to increase less rapidly than returns to non-labor factors of production. While the trends in income distribution during this period are unclear, it seems unlikely that any significant improvement occurred. Since 1977, however, rural wages have risen in real terms and  -4- unemployment has declined notably, supporting the presumption of some distributional improvement. Development Strategy of the Current Administration 11. The development strategy of the present Government is essentially unchanged from that of the previous administration, with the most significant variation being a greater emphasis on expanding economic and social infrastruc- ture. The key elements of this strategy are the promotion of non-coffee exports and investment, supported by measures to increase allocative and productive efficiency. Factor (particularly capital) and product markets are to be freed from unnecessary controls in order to increase efficiency and lower costs, and tariff and non-tariff barriers to imports are to be reduced to provide greater competition to domestic industry. These steps, along with periodic exchange rate adjustments as required by relative cost differences, tax rebates and favorable access to credit, are expected to provide the stimulus for rapid growth in non-coffee exports and in private investment. Public investment is to be accelerated, with particular stress on improving and extending the transportation network and on resolving the country's rapidly growing energy problem. Investments in transportation are expected to lower freight costs substantially and those in telecommunications to facilitate economic activity as well as to minimize the unnecessary use of transport; both are aimed at integrating regional growth centers into a national market. Complementary measures to encourage industry to locate outside the four major metropolitan areas have been introduced. 12. Raising investment and productivity in agriculture and industry are important objectives of the Government's plans to expand growth and employment. Substantial increases in credit are being provided to agriculture. Extension programs are to be expanded to cover larger numbers of small and medium scale farms and widened to include farm management and broader dissemination of crop research. Innovative programs such as the integrated rural development (DRI) and nutrition (PAN) projects financed by the Bank are expected to receive continued high priority. Low income rural areas are to be helped through rural electrification, health and education programs and through an expanded feeder roads program. Industry, which is experiencing high capacity utiliza- tion ratios because of lagging investment in recent years, is expected to benefit from improved functioning of domestic capital markets, as controls are eliminated from these markets, and from increased incentives for exports as the real effective exchange rate recovers to pre-1976 levels. This, plus increased competition from imports as tariff and non-tariff barriers are lowered, should provide the stimulus for greater industrial investment and bring about more rapid technological change. 13. Projections of Colombia's energy balance indicate a rapidly growing deficit which is expected to reach significant proportions in the mid-1980s in the absence of an aggressive energy development program. High priority is being given to the development of additional energy resources in order to avoid the constraint on growth that large scale shortages of energy would entail. The strategy adopted is designed to reduce the country's dependence on petroleum as an energy source by developing substitutes. Major projects are being executed and others prepared to expand hydroelectric power genera-  -5- tion, and incentives are being given to private foreign companies for accel- erated exploration and development of the country's petroleum, coal and natural gas potential. Exports of coal and natural gas are expected to offset a large portion of the petroleum imports projected for the mid to late 1980s. Higher energy prices are expected to slow the growth in energy demand. While the total investment cost of future energy development is still being deter- mined, preliminary estimates indicate that the required investment could run as high as US$8.0 billion in 1979 prices over the next decade. Even under the most optimistic assumptions regarding development of energy resources, however, Colombia will continue to rely heavily on energy imports until the mid-1980s when exports of coal and natural gas begin to reduce the nation's net energy deficit. 14. With Colombia's long term growth prospects enhanced by the increased availability of foreign exchange and with inflation expected to moderate, the authorities are beginning to focus policies on a number of issues that need to be addressed if the country is to achieve its full growth potential and poverty is to be alleviated at a more rapid pace. These issues include the reduced competitiveness of Colombian goods in external markets brought about in recent years by the relatively high domestic inflation uncompensated by foreign exchange adjustments, and the slow modernization and lowered efficiency of domestic industry resulting from low investment levels and limited foreign competition. Public investment has not increased significantly in the past few years and domestic resource mobilization is still insufficient, particu- larly in comparison to the expansion required in public investment. While income distribution and welfare trends appear favorable, substantial efforts will have to be made to reduce the widespread poverty still existing in the country. 15. Economic policy is presently in a period of transition as the authorities attempt to combine stabilization and growth measures so as to arrest inflation while still permitting the economy to expand. Some advances have already been made in dismantling the existing stabilization program and in bring- ing about conditions favorable to increased investment and growth. For example, the 100% marginal reserve requirement imposed on commercial banks has been rescinded and the Government has taken a more active role in the capital market through open market operations. The transition process, however, has been moving slowly in certain respects and the Government recognizes the importance of acting quickly in finding appropriate solutions to these potential constraints to growth. Exchange rate adjustments are expected once again to become a tool of development, rather than a component of stabilization policy, and further measures to stimulate private investment and encourage technological change are proposed. As inflationary pressures continue to recede, controls on interest rates and credit, which have already been relaxed somewhat, are expected to be further reduced as are tariff and non-tariff barriers to trade. Such measures, once fully effective, could be expected to produce a sizeable jump in private investment and in economic efficiency. Delays in carrying out economic and social infrastructure investments could adversely affect growth of the pro- ductive sectors and reduce economic welfare. Thus public investment is to be accelerated at the maximum consistent with continued progress toward economic stability. The Government is particularly concerned with the slow growth of energy sector investment (with the exception of investment in hydropower). Although some progress has been achieved as capital outlays by foreign oil companies have risen as a result of more profitable wellhead prices and the  - 6 - growth in demand for petroleum products has been slowed by higher retail prices, the Government intends to advance development of the country's other energy resources, i.e., coal and natural gas. 16. Since in the absence of corrective measures both the current account of the balance of payments and public sector savings are expected to weaken over the next few years, mobilization of domestic resources to support the strong expansion required in public investment is likely to be a critical issue in carrying out the Government's strategy. The authorities are already moving ahead on this issue, having taken measures to improve tax administration and enforcement and to generate resources through large real increases in charges for public services. Additional tax measures will probably be needed, however. Capital market improvements, including realistic interest rates on savings deposits, are expected to stimulate private savings. These efforts are being complemented by measures to encourage the production of basic foodstuffs-- which weigh heavily in the consumer market basket--as a means of reducing infla- tionary pressures and moderating inflationary expectations, which should have a further favorable effect on savings. 17. Given the country's strong resource base and with continued sound economic management, Colombia is expected to achieve annual real GDP growth averaging about 6% during the 1980-85 period. However, because of the expected decline in coffee prices and with accelerating oil imports and the high import content of future investment, the current account of the balance of payments is expected to be in deficit throughout the early to mid-1980s. Colombia is expected, therefore, to continue to be a large net importer of capital for some time to come. Even assuming that the Colombian authorities permit a drawdown of international reserves to the equivalent of three months' imports in the years immediately ahead, gross external capital requirements are projected at US$10 billion between 1980 and 1985, or an annual average of about US$1.7 billion. An increasing proportion of this capital inflow is expected to be provided by foreign commercial and financial sources. 18. Colombia's public external debt repayable in foreign currency amounted to an estimated US$4.4 billion at the end of 1978, equivalent to about 18% of GDP, of which US$2.8 billion was disbursed and outstanding. The Bank/IDA share of this external debt was 26.5% in 1978. Because of the expected decline in commitments from bilateral sources and corresponding recent acceleration in Bank lending, this share is expected to exceed 30% in the early 1980s, before falling to about 27% by 1985. Although the public debt service ratio fell in recent years as export growth accelerated, this ratio is expected to increase from 10% in 1978 to about 15% in 1985. The World Bank's share in public debt service is expected to rise to 26% in 1985 from 24% in 1978. Balance of payments prospects beyond the early 1980s will depend heavily on the timely development of domestic energy sources and on progress made in executing several natural resource-based export- oriented projects currently under preparation. Given the expected continuation of sound economic and financial management and timely execution of the country's energy program, Colombia is considered creditworthy for the required external borrowing on conventional terms. PART II: BANK GROUP OPERATIONS IN COLOMBIA 19. The proposed loan, the 85th to be made to Colombia, would bring the total amount of Bank loans to Colombia to US$2,400.6 million (net of  - 7 - cancellations). Of this amount, US$1,803.9 million is now held by the Bank; IDA made one credit of US$19.5 million for highways in Colombia in 1961. Disbursements have been completed on 49 loans and the IDA credit. During 1972-77, disbursements averaged US$86 million equivalent per year, they declined slightly to US$74 million in 1978 but increased sharply to US$135 million equivalent in 1979. The improving performance of social sector institutions in the execution of Bank-financed programs, the gradual containment of inflationary pressures which should allow for relaxation of fiscal restraint and the recent Bank lending for infrastructure projects, all point to higher levels of disbursements in the future. IFC has made investments and underwriting commitments of US$53.9 million in 24 enter- prises and now holds US$16.7 million. Annex II contains a summary statement of Bank loans, the IDA credit and IFC investments as of December 31, 1980. The Annex also contains summaries on the execution of the 34 ongoing projects. 20. In response to the priority objectives established by successive Governments (self-sustained economic growth increased employment and improved income distribution), since 1966, Bank lending to Colombia has become increas- ingly diversified and has been concentrated on production-oriented programs and activities which emphasized social as well as economic benefits. All four loans for education and training have been made during this period, twelve of the fourteen loans for industry, eleven of the thirteen agricultural loans, one loan for a nutrition project, two loans for urban development projects and all nine loans for water supply and sewerage. During the same period, fifteen loans in the power and transport sectors were made, while before 1966, 22 out of a total of 25 loans were made to these sectors. 21. Bank lending to Colombia in FY79 consisted of two loans each for water supply/sewerage and power, and one each for urban development, aviation development and agricultural credit, totalling US$311.5 million equivalent. In addition to the loan proposed in this report, the FY80 program includes already approved loans for nickel and power distribution projects and proposed loans for power generation, small scale industry, secondary oil recovery and exploration, vocational training and further industrial credit. Work is also under way on projects for railways, ports, feeder and rural roads, further mining development, agricultural credit, power (including rural electrification), irrigation, water supply and sewerage, agro-industries, urban development and environmental improvement, for possible consideration by the Executive Directors during the next two years. 22. The proposed Bank lending conforms closely with the Government's development strategy, which is attuned to the requirements of the era that began with the 1973 price rise of internationally traded petroleum. To help Colombia develop domestic sources of energy, a sizeable part of the proposed lending would be for hydropower. The Bank intends to assist the development of coal mines and petroleum, which hold potential in helping Colombia meet part of its energy requirements and in diversifying exports. Bank involvement in the energy sector would help mobilize additional external financing as some of the projects would require co-financing. Other future loans would finance agriculture and industry (including agro-industry) to assist the Government in its efforts to raise overall productivity, income and employment, and to strengthen and diversify exports. Closely related to these objectives would be the proposed Bank lending for transport infrastructure. In this context, the Bank is assisting the Government in preparing a rural and feeder roads project to integrate the more backward areas of the country into the  -8- modern economy. Other loans under preparation for ports and railroads are aimed at helping Colombia handle larger volumes of non-traditional exports and the imported inputs on which the modern sector of its economy relies for expansion. Lending for telecommunication would assist the Government in its efforts to integrate cities and towns into the national economy and reduce the large amuunt of congestion in existing networks. Finally, a relatively large number of loans are being prepared in support of the Government's efforts to help the lowest 50% of the Colombian population. Lending for urban development and slum improvement, rural electrification, agricultural credit, land settlement, water supply and sewerage, irrigation and environ- mental improvement projects is principally designed to improve the standard of living of the poor. 23. The operations of external lenders in Colombia are shown in Annex I. While IBRD, IDB, and bilateral sources provided about 75% of total external financing to Colombia in the 1961-72 period, their share has decreased since then to approximately 50% for the 1975-77 period and it is expected that during the period 1979-83 this share will decline further to about 38% of external capital requirements. Like the Bank, IDB has given increased emphasis to social projects and has financed projects in low cost housing, urban and rural development, agrarian reform, university education, water supply, rural electrification, and land erosion control. In the future, it proposes to assist Colombia to develop sources of domestic energy and to expand the activity of the productive sectors to help generate increased employment. USAID has supported programs in education, urban development and small farm development, but is phasing out its aid program in Colombia over the next few years with about US$10 million remaining to be disbursed on previous loans. The Governments of the Federal Republic of Germany and the Netherlands have also provided concessional financing for social and regional integration projects. III. THE SECTOR, THE CITY AND ZONE AND THE INSTITUTION Sector Background and Organization 24. Colombia's rugged topography--three Andean mountain ranges separating the main centers of population and economic activity--accounts for the high priority successive governments have given to the development of adequate telecommunications infrastructure and its relatively advanced stage of development. Colombia's 5.6 telephones per 100 population is comparable to the rates in Brazil, Costa Rica and Mexico, which are 4.0, 6.9 and 5.5 respectively, 1/ all of which have higher per capita incomes. Telegraph services are also well developed with 1600 offices all over the country, including at least one in each town with 3,000 people or more. 25. The early development of telecommunications facilities came about through the proliferation of local independent institutions--by 1970, 66 entities operated telephone facilities. The vast majority of these were municipal companies which operate a small number of telephones, independently of one another. Initially, long distance and international telephone and 1/ Information from The World Telephones, published by AT&T in January, 1978.  -9- telegraph services were run by foreign companies under Government concessions, while the national telegraph system was operated by the Ministry of Communica- tions. In 1947, the Government created the autonomous Empresa Nacional de Telecomunicaciones (TELECOM) to operate and further develop long distance services. With the exception of most lines within the Department of Antioquia, where the Empresas Departamentales de Antioquia (EDA) operates, TELECOM is responsible for all long distance and international services as well as the telex system. In line with the need to reduce the fragmented operation of the sector (see paragraph 29 below), TELECOM has recently been acquiring several local telephone companies and expanding its services to rural and small urban areas. 26. During the 1970s, the sector expanded rapidly. The number of telephones more than doubled to an estimated 1.4 million by 1979 and a large number of rural areas were provided with public call offices. Nonetheless, a large unfilled demand remains (estimated at 250,000 lines), which together with intensive use of existing lines, has resulted in serious network conges- tion and subscriber dissatisfaction. Similarly, long distance networks suffer from call traffic congestion, although with the assistance of previous Bank loans, the reliability of long distance service has improved and the quality of completed calls is good. International telephone services are also of high quality but with similar congestion problems. Telegraph and telex services appear adequate for current needs. 27. The Government exercises control over the companies and the sector in a variety of ways and through different institutions. The Ministry of Communications (MOC) formulates policy and regulates all communications entities. Setting priorities and approving investment programs of individual entities are the responsibilities of the National Planning Department (NPD). The National Tariff Board (NTB), chaired by the Chief of the NPD, has authority to approve tariff levels for each utility company. When proposals regarding telecommunications tariffs are considered, the MOC is represented on the NTB. The sharing of long distance telephone revenues between TELECOM and each local company is determined by contracts negotiated between the two entities. Sector Issues and Government Strategy 28. Despite the substantial progress achieved, the local and internal long distance systems are inadequate to satisfy the present needs of the economy. Demand has repeatedly exceeded system capacity and congestion has become a serious problem. In many of the municipal entities, there has been virtually no growth in exchange capacity during the past five years and no planning for future needs. 29. The fragmentation of operations among the -telecommunications entities has been largely responsible for the inadequacies of the system. Most of them do not have the capacity to manage their operations effectively, let alone plan and implement an expansion program. Furthermore, many have substantial financial difficulties resulting from deficient management, exces- sive short-term borrowings and inadequate tariffs. Procurement practices are also unsatisfactory and result in excessive costs. To help overcome this prob- lem, the Government has been promoting institutional consolidation into five or six strong regional/municipal entities and one national company (TELECOM).  - 10 - 30. Since 1975, the Government has placed a high priority on regional development and integration and, in support of this, it has given emphasis to expanding the transport and communications infrastructure. The Administration which took office in August 1978 has reiterated this policy. For communications, the Government's principal aims are to reduce the excessive congestion existing for all telephone services, expand services to new areas, and consolidate the large number of entities into a smaller number of well-run and financially viable institutions to improve overall sector efficiency. Progress is already occurring on each of the above fronts: by 1985, about one-half of rural communities is expected to have access to telephones; congestion on long distance and some local exchanges is being reduced; and the number of entities has already declined from 66 to 38. The Bank's Role 31. The Bank has made four loans totalling US$106 million for tele- communications in Colombia. The loans have all been to TELECOM and aimed at a) strengthening the institution; b) expanding and improving the long distance network; and c) extending telephone service to rural areas (with complementary assistance of the IDB) and in small towns. The first two projects achieved their objectives according to the Project Performance Audit Report for the Second Telecommunications Project (SecM79-409, June 1, 1979). The report noted the positive effect of Bank involvement on the organization of TELECOM and its procurement practices--ICB, specifically, resulted in lower prices and better equipment specification. A third project, which is nearly completed, continued along the above lines. Based on the results of the initial Bank projects, the Government requested the Bank to undertake a sector,study (Telecommunications Sector in Colombia, Report No. 663-CO, May 16, 1975) and to follow up with a fourth operation (Loan 1450-CO) aimed at accelerating sector consolidation. The ongoing project provides long term financing to TELECOM for expanding local networks in which TELECOM purchases a controlling interest. Through this support, the Bank is contributing to rational develop- ment of the sector and to large savings in operating costs, which result from standardization and from consolidation of operations, and in equipment costs by purchasing in bulk under international competitive bidding. The proposed loan would attempt to establish a similar basis for consolidating telephone operations in a specific region of the country and would strengthen the institution responsible for carrying out this work (see paragraphs 39 and 49-51 of this report). This would be the first telecommunications project with a municipal company, albeit one which has already ventured outside the municipality and intends to expand gradually its area of operations. Medellin and its Environs 32. Medellin is the capital and principal center of Antioquia, the most heavily populated department in Colombia. Medellin and its immediate suburbs situated in the Aburra Valley of the Central mountain range account for about one-half of the department's estimated 3.5 million people. Colombia's indus- trialization began in Medellin and for many years it was the leading industrial and commercial center in the country. Though it has been overtaken by the rapidly growing Bogota, the capital, it is still the major industrial center for production of a large range of commodities, including textiles, garments  - 11 - and leather goods, and accounts for about 23% of the country's industrial employment and 19% of its output. Surrounding Medellin is also a rich agri- cultural area farmed by notably efficient small owner operators (many of whom are being provided with assistance under a loan for Integrated Rural Develop- ment, 1352-CO) producing flowers, beans, vegetables and a variety of other food crops. Colombia's major coffee producing region is also nearby. 33. The area within about a 35 km. radius of Medellin includes a large number of towns ranging in population from about 10,000 to over 100,000 inhabitants. These towns have been growing rapidly since the physical growth of Medellin has reached its limits. Two major developments are expected to influence greatly the spatial development of the entire southern region of the department. Construction of the Medellin airport at Rio Negro, in the valley adjacent to the Aburra Valley, is currently underway with the assistance of a Bank aviation loan (1624-CO). An industrial and free trade zone is also planned for construction close to the airport. Together, these developments are expected to result in a rapid growth of industry, population, housing and services. Another urban complex is also planned north of Medellin adjacent to Bello, a town with over 100,000 population, which may nearly double the population of that area by 1990. The demands for public services, including telephones, can be expected to grow rapidly in areas farther away from Medellin. Empresas Publicas de Medellin--The Borrower 34. Empresas Publicas de Medellin (EPM) is an autonomous public entity set up by the municipality to provide electricity, telephone, water supply and sewerage services to the population of Medellin and vicinity. EPM is a well-run institution with a qualified technical staff. Pay scales are attractive, training courses are provided in-house and staff turnover is low. It is managed by a seven-member Board of Directors with the Mayor of Medellin as the Chairman. Day-to-day administration is in the hands of a general manager, appointed by the Board and who is assisted by four managers (technical, operations, finance and administration), a secretary general for legal matters and a planning director. Each manager oversees all four services related to his/her area of responsibility. 35. The telephone branch of EPM is the second largest network in the country. It operates 206,800 main telephones in 29 exchanges in Medellin and in nine nearby municipalities. EPM is slowly expanding its command area incorporating networks away from central Medellin. Two additional towns have recently requested EPM to operate their systems, which are expecting to be incorporated in due course. With the growth of operations towards Rio Negro, it is anticipated that a number of additional municipalities will be easily * and economically included in the EPM system. By the end of the proposed project period, only six Antioquian communities of greater than 10,000 (but less than 20,000) population are likely to remain outside the EPM system. Currently, a small, uneconomic departmental entity (EDA) operates most of these networks, including long distance. If the service and organization of EPM improve in the directions outlined in the proposed project, it will be capable of assuming the increased responsibility of operating most of Antioquia's communication network.  - 12 - 36. Telephone penetration in Medellin is high by Colombian standards at 14 direct connections per 100 inhabitants. However, the waiting list of 43,000 applicants (as of October 1979) exceeds 20% of those already connected and is equivalent to the net increase of the last three years. Many of the applicants have been wait listed for five years or longer. There is serious congestion--during peak traffic hours, only 46% of local call attempts are successful. Local congestion further exacerbates already busy long distance lines, hampering essential inter-city and rural-urban communication. 37. While business (including government, professions, commerce and industry) accounted for 23% of the telephones, it generated 52% of the call traffic of EPM's system. The impact of business on related usage is, however, much greater than the above figures indicate since businesses--and residences used for business purposes--generate most of the traffic during the peak period, and provision of an adequate grade of service for this traffic is the primary determinant of system capacity costs. 38. EPM has developed a master Telephone Development Plan for 1980 to 1990 based on detailed forecasts of demand and plant growth. It has used block-by-block analysis to map out the quantity and location of growth. The 11-year plan is divided into two stages with the first aiming to increase connections from 206,000 in 1978 to 326,000 in 1984, and in the second to 506,000 by 1990. The first stage program is estimated to cost US$160.3 million equivalent, with a foreign exchange component of US$101.2 million equivalent. This large foreign exchange requirement would have to be financed from several external sources, in addition to the proposed Bank loan. 39. Telecommunications accounts for roughly 12% of EPM's assets compared to nearly 75% for electricity and 13% for water and sewerage. Management time has consequently concentrated far more heavily on power generation and distribution. This has been manifested in the relative superiority of procurement practices in power vis-a-vis telecommunications and in the need for management focus on improved maintenance and sound planning to take account of technological developments. It is expected that, as a consequence of Bank and commercial borrowing (as opposed to suppliers' credits) and the use of international competitive bidding, EPM will reduce costs significantly on equipment purchases. Likewise, carrying out the recommendations of the proposed study on telephone branch organization (paragraph 49 below) is expected to have a profound effect on EPM's capacity to operate its future targe-scale telephone network outside Medellin. The proposed project is intended as a first step in building an organizationally and technically sound regional telephone enterprise. Lastly, with assistance from the IDB, EPM is expanding its water supply and sewerage facilities as well as strengthen- ing that branch of its operation. Performance under Previous Loans 40. So far Bank assistance has been directed at EPM's power department. EPM has carried out four Bank financed power projects (Loans 225-CO, 282-CO, 369-CO and 874-CO). An evaluation of Bank operations in Colombia which was distributed to the Executive Directors on May 25, 1972 (Report No. Z-18) re- viewed, inter alia, the experience with EPM under the first three projects.  - 13 - The projects were regarded as successful and Bank involvement was commended for having strengthened the power department. The fourth project, Guatape II Hydroelectric Power Project (Loan 874-CO) has experienced delays and cost overruns; commissioning of the generating units is scheduled for late February 1980 (see Annex II). 1/ Between 1973 and 1977, the power department's financial position weakened as a result of inadequate tariff adjustments that did not fully compensate for the rapid inflation of those years. This in part was responsible for delaying Bank support for the whole power sector. Tariff adjustments in 1978 have resulted in satisfactory performance and the Bank is now proceeding to appraise another power generation project for EPM. The proposed project would aim at strengthening the telecommunications branch of the entity in ways similar to that already accomplished for power. IV. THE PROJECT Background and Objectives 41. The project prepared by EPM, comprises part of the company's 1980-90 telephone development program to more than double new connections and to improve the quality of service throughout the network. The project was appraised in December 1979. Negotiations were held in Washington, D.C. in February 1980, with a Colombian delegation led by Mr. Armando Olarte, Director of External Credit and Mr. Diego Calle, General Manager of EPM. 42. The project aims at satisfying a large share of unmet demand for telephone connections in Medellin and its environs and to increase the access of lower income groups to telephone services. It would also strengthen the organization of EPM's telephone department, so that it would be capable of managing efficiently a greatly expanded network and procuring equipment at greatly reduced costs. The project is the first Bank effort in Colombia to assist in the development of a company which heretofore has concentrated almost entirely on providing telephone services to a major municipality, into an institution capable of serving a heavily populated and important economic region. Project Description 43. The physical facilities comprise: (a) a total of about 108,400 additional local switching equipment lines in Medellin and in the surrounding areas, with associated cables and subscribers' plant, and about 90,000 additional connections; (b) cables and subscribers' plant (for which exchange equipment has already been contracted) to enable the installation of another 10,000 connections; 1/ To be updated.  - 14 - (c) 3,300 public call office telephones to serve largely low income areas; and (d) building extensions to house project equipment. During the execution of the proposed project, EPM would also carry out studies to identify a more appropriate organizational structure for its large-scale telephone operations and to help rationalize the telephone tariff structure. Costs and Financing 44. The cost of the project is estimated at about US$110.0 million equiva- lent, including foreign exchange expenditures of about US$67.5 million, or about 61% of the total project cost. The cost estimates are based on December 1978 prices paid by Colombian telephone entities and adjusted for inflation during 1979. Price contingencies amount to 36% of base costs and are based on forecasts of annual international and domestic inflation. Physical contingencies of 7% are provided for civil works; however, none is required for equipment since the needs are based on detailed engineering designs and plans. A breakdown of costs by project component is contained in the Loan and Project Summary at the begin- ning of this report. 45. The proposed Bank loan of US$44 million would finance 40% of the total project cost, and about 65% of the foreign exchange cost. EPM would also obtain external credits of approximately US$11.5 million equivalent from suppli- ers and US$9.9 million equivalent from commercial banks. The balance of project costs of US$44.6 million (40.5% of-total project costs) would be financed from EPM's internal cash generation. Procurement, Implementation and Disbursement 46. All goods financed under the Bank loan would be procured through international competitive bidding (ICB) in accordance with Bank guidelines. Of the goods to be procured with Bank loan funds, only cables are currently manufactured in Colombia. Telephones and switching equipment may also be manufactured in Colombia by the time bids are received. For all such procure- ment, qualified domestic manufacturers would be given a preference in bid evaluation of 15% of the CIF price, or the existing import duty whichever is lower. Other imported goods not financed by the Bank would be procured under ICB except where additions to existing equipment warrant standardization, in which case they would be purchased by negotiation. Goods such as cable ducts and poles which are locally manufactured by a number of firms would be procured through competitive bids from domestic suppliers and financed with EPM's funds. The local procurement practices permit competition and are satisfactory. 47. EPM staff would prepare engineering designs and bid documents, evaluate bids and draw up equipment contracts. They would also lay and commission all local distribution cables, and would supervise cable duct construction to be carried out by local contractors. All installation and  - 15 - maintenance of equipment would be carried out by EPM's technical staff. Where new technologies are involved, EPM's staff would assist in equipment installa- tions to be carried out by the contractor. EPM's management is sufficiently experienced and competent to carry out the project satisfactorily. 48. Disbursement would be made for 100% of the CIF cost of the imported equipment and the foreign costs of its installation. In the case of cable, telephone and switching equipment, disbursements would be for 100% of foreign expenditures and 94% of local expenditures. The project is expected to be fully disbursed by June 30, 1985. Institutional Improvement 49. While EPM's organizational set up for telephone operations has been satisfactory, it is not adequate for the large-scale telecommunication activi- ties projected for the next five to ten years. With a 140% increase in opera- tions by 1990 and the expected assimilation of networks distant from Medellin, the telephone branch of EPM alone would be a sizeable enterprise. Likewise, the rapid technological advances in the field, will require a degree of special- ization and full-time management, which is not possible under the current orga- nizational structure. After discussing this matter with the Bank, EPM has decided to begin organizing gradually an integrated branch including all activi- ties related to telecommunications. It has agreed to complete a study by February 28, 1981, under terms and conditions satisfactory to the Bank and by September 30, 1981 begin to carry out the recommendations of the study after receiving comments from the Bank (section 4.05 of the draft Loan Agreement). 50. Overall staff productivity is high with a staff ratio of 4.2 per 1000 telephones. However, the standard of subscriber service, in terms of repair of faults, is inadequate. EPM is examining its maintenance system with an eye towards improving fault clearance procedures and, if required, employing additional maintenance staff; with Bank consultation it has estab- lished performance targets for improving maintenance service. 51. EPM maintains a progressive tariff structure for residences that varies according to property value. It also has a different rate structure for businesses and homes. Since, in the future, EPM plans to meet a high percentage of growing demand, it is important that its tariff structure pays due attention to economic efficiency, so that it generally reflects incremental expansion costs, while achieving an equity impact. EPM has provided assurances that by September 1, 1981 it will carry out under terms of reference satisfac- tory to the Bank a study of its telephone tariffs and put into effect a program, satisfactory to the Bank, based on conclusions of the study (section 5.10 of the draft Loan Agreement). Since a similar study is being undertaken under Loan 1450-CO by TELECOM, which earns the vast majority of its revenues from long distance services, the combination of the two studies should provide a basis for establishing telephone tariff structures in Colombia, generally, and for the division of revenues from long distance services between TELECOM and local companies, a notably complex issue. Finances 52. EPM's consolidated financial position and that of each of its departments (power, telephones, water and sewerage) is satisfactory. During  - 16 - 1977 to 1979, annual debt service coverage was never below two and based on projections through 1984, it is not expected to fall below 1.5 for any of the departments. The projections further indicate that the development program of each department can be carried out independently of financial resources from other departments. In order to ensure that the telephone operations are not hampered by financial obligations or requirements of the other depart- ments, EPM has provided assurances that transfers from the telephone department to any other can only be made (in the form of a loan), once the requirements for its telephone operations, including EPM's Telephone Investment Program, has been provided for (section 5.09 of the draft Loan Agreement). Furthermore, EPM has agreed to maintain debt service coverage of at least 1.5 for each department (section 5.06 of the draft Loan Agreement). 53. The telephone department has maintained a strong financial position as reflected in a current ratio of 1.7 and a debt equity ratio of an estimated 24/76 as of December 31, 1979. Its performance during 1977-1979 has also been satisfactory; it has maintained an average operating ratio of 68% and has generated internally more than 70% of its capital expenditures in addition to meeting all operating expenses and debt service. This perfonnance has been in part the result of generally acceptable levels of tariffs and an efficient billing and collection system. Revenues from local services account for about 70% of EPM's operating revenues, with the remaining income coming from other services, including long distance afid international service. 54. Financial forecasts indicate that an annual rate of return of 9% on revalued telephone assets would be sufficient for the telephone department's requirements during the 1980-84 period. EPM obtained approval from the National Tariff Board for a program of monthly tariff increases beginning December 1, 1979, which is estimated to generate about 70% additional revenues from local services for the 1980 and 1981 period. No further tariff increases are expected to be required to meet a 9% return, until 1983. For 1983-84, further tariff adjustments would be required to generate an estimated 30% additional revenue. EPM has provided assurances that it would maintain a rate of return on revalued assets of at least 9% (section 5.07(b) of the draft Loan Agreement). 55. With a 9% rate of return, the financial projections indicate that for the period 1980-84, EPM would generate internally about 44% of its significantly increased capital expenditures after providing for operating expenses, increases in working capital and debt service. The balance would be obtained from external borrowings. EPM intends to follow its own Telephone Investment Program and has provided assurances that it would obtain Bank concurrence for capital expendi- tures outside of that program that exceed US$2 million equivalent in any given year (section 5.08 of the draft Loan Agreement). Benefits and Risks 56. The proposed project would help meet a sizeable unfilled demand for telephone services in Medellin, and in the surrounding areas. The installation of about 3,000 public call offices in rural and urban low income communities combined with the continued highly subsidized call rate would provide large  - 17 - numbers of the poor with convenient access to telephone services for the first time. The project would facilitate the timely delivery of goods and services, and contribute to improved efficiency in industry, commerce and services. It would also strengthen the management and operation of EPM's telephone network, spread services to new areas and, thus, pave the way for further consolidation of the country's telecommunications sector. The project would also have a positive effect on the environment since communications would be used where, in its absence, transport may have been required. Better access to health and emergency services can be expected to result from reduced congestion and increased access of the poor to telephones. 57. The economic rate of return on EPM's 1980-84 telecommunications investment program, of which the project is an integral part and 70% of its cost, is at least 16.8%. Benefits were measured in terms of the incremental revenues that are expected to result from the program. Financial costs and benefits were transformed to economic ones by applying a standard conversion factor for foreign exchange of 0.93 and a shadow wage rate ratio of 0.68. The incremental returns, however, which are based on official tariffs rather than on the--unmeasurable--consumers' willingness to pay, underestimate the benefits to subscribers in commerce and industry. Moreover, they do not include the estimated revenues from the additional lines that would undoubtedly be connected sometime in the future over and above those included in the project, but for which the capacity is built under this project. With an unfavorable combination of 10% higher capital and operating costs and 10% lower revenues, sensitivity analysis suggests that the rate of return would not fall below 12%. 58. The project is technically feasible and offers limited risk. Telecommunications projects generally comprise a large number of independent activities, so that delays in completing a few items of works do not generally prevent the realization of benefits from other newly created assets. PART V. LEGAL INSTRUMENTS AND AUTHORITY 59. The Draft Loan Agreement between the Bank and EPM, the draft Guarantee Agreement between the Republic of Colombia and the Bank and the report of the Committee provided for in Article III, Section 4 (iii) of the Bank's Articles of Agreement are being distributed to the Executive Directors separately. 60. Special conditions of the loan are listed in Section III of Annex III. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank.  - 18 - PART VI. RECOMMENDATION 61. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments March 10, 1980  -19- ANNEX I TABLE 3A Page 1 of 5 COLOMBIA - SOCIAL INDICATORS DATA SHEET LANDAREAISANSQ.K)COLOMBIA REFERENCE GROUPS (ADJUS-ED AfERAGFS LAND AREA (THOUSAND SQ. E.) COLOMBIA - MOST RECENT ESTIMATE)- TOTAL 1138.9 SAME SAME NEXT HIGHER AGRICULTURAL 225.6 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 /b ESTIMATE lb REGION /c GROUP id GROUP /e GNP PER CAPITA (US$) 240.0 380.0 870.0 1124.4 1097.7 1942.6 ENERGY CONSUMPTION PER CAPITA (XILOGRAMS OF COAL EQUIVALENT) 491.0 606.0 685.0 943.1 730.7 1646.7 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (MILLIONS) 15.8 21.3 24.6 URBAN POPULATION (PERCENT OF TOTAL) 48.2 59.8 65.5 59.3 49.0 51.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 38.0 STATIONARY POPULATION (MILLIONS) 55.0 YEAR STATIONARY POPULATION IS REACHED 2065 POPULATION DENSITY PER SQ. KM. 14.0 19.0 22.0 23.5 44.6 28.2 PER SQ. KM. AGRICULTURAL LAND 71.0 93.0 109.0 80.5 140.7 100.5 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 46.0 46.8 38.0 40.9 41.3 35.4 15-64 YRS. 51.0 50.5 59.0 54.4 55.3 56.3 65 YRS. AND ABOVE 3.0 2.7 3.0 3.9 3.5 5.1 POPULATION GROWTH RATE (PERCENT) TOTAL 3.1 3.0 2.1 2.4 2.4 1.7 URBAN 6.0/B 5.2 3.9 3.7 4.5 3.0 CRUDE BIRTH RATE (PER THOUSAND) 46.0 36.0 30.0 32.8 31.1 27.5 CRUDE DEATH RATE (PER THOUSAND) 14.0 11.0 8.0 8.5 9.2 9.1 GROSS REPRODUCTION RATE 3.2 3.2 1.8 2.4 2.2 1.8 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. 115.4 263.8 USERS (PERCENT OF MARRIED WOMEN) .. .. 48.6 17.7 34.7 FOOD AND NUITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-1OO) 97.0 99.0 107.0 99.4 104.4 102.0 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 94.0 92.0 94.0 d 107.0 105.3 120.8 PROTEINS (GRAMS PER DAY) 50.0 51.0 45.5 [k 60.4 64.4 80.9 OF WHICH ANIMAL AND PULSE 28.0 29.0 36.8 A 28.3 23.5 31.3 CHILD (AGES 1-4) MORTALITY RATE 17.0 13.0 9.0 6.7 8.6 5.1 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 53.0 58.5 62.0 63.6 60.2 65.6 INFANT MORTALITY RATE (PER THOUSAND) .. .. 98.01j 76.1 46.7 45.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TMTAL .. 63.0 64.0 63.4 60.8 69.4 URBAN .. .. 73.0 79.5 75.7 85.1 RURAL .. .. 46.0 38.6 40.0 43.0 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 47.0 48.0 58.8 46.0 70.1 URBAN .. 75.0 73.0 77.8 46.0 88.3 RURAL .. 8.0 13.0 24.5 22.5 33.2 POPULATION PER PHYSICIAN 2400.0 2170.0 1820.0 1841.9 2262.4 1343.2 POPULATION PER NURSING PERSON 3740.0 2040.0 .. 933.7 1195.4 765.0 POPULATION PER HOSPITAL BED TOTAL 580.0 510.0 530.0 563.4 453.4 197.6 URBAN .. .. 320.0 279.4 253.1 260.2 RURAL .. .. 9670.0 1140.9 2732.4 1055.0 ADMISSIONS PER HOSPITAL BED .. 23.0 25.0 25.7 22.1 17.3 HOUSING AVERAGE SIZE OF ROUSEHOLD TOTAL .. 6.0 5.7/j 5.0 5.3 4.7 URBAN .. .. 5.5T1 4.8 5.2 4.4 RURAL .. .. 5.9LI 5.3 5.4 5.1 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. 1.8/1 1.3 1.9 1.1 URBAN . 6 1.3 1.6 1.2 RURAL .. .. 2:4 1.5 2.5 1.2 ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL 47.0/f .. 58.11 54.3 50.0 66.0 URBAN 83.07 .. 87. 5 80.1 71.7 85.1 RURAL 8.07? .. 13.2T 14.2 17.3  -20- ANNEX I TALE 3A Page,.2 of 5 COLoMBIA - SOCIAL INDICATORS DATA SHEET COLOMBIA ~~REFERENCE GROUPS (ADJUST-ED AYjRAGES COLOH8LA - MOST RECENT ESTIMATE) - SAME SAME NEyT HICHER MOST RECENT GEOGRApHIC INCOME INC0ME 1960 /h 1970 /b ESTIMATE lb REGION /c GROUP /d GROUP /a EDUCATION ADJUSTED ENROLLMENT RATIOS PRII_.-Y: TOTAL 77.0 100.0 106.0 107.3 102.5 101.7 MALE 77.0 98.0 103.0 109.1 103.6 110.0 FEKALE 77.0 102.0 109.0 107.4 97.1 92.8 SECONDARY: TOTAL 12.0 23.0 35.0 40.5 33.5 51.2 MALE 13.0 23.0 35.0 40.4 38.4 56.4 FEMALE 11.0 22.0 35.0 39.0 30.7 43.7 VOCATIONAL ENROL. (% OF SECONDARY) 31.0/h 21.0 17.0 IB.5 11.5 18.3 PUPIL-TEACHER RATIO PRIMARY 38.0 38.0 30.0 37.1 35.8 27.1 SECONDARY 11.0 K 17.0 19.0 17.9 22.9 25.3 ADULT LITERACY RATE (PERCENT) 63.0 73.0 81.0 77.4 64.0 86.1 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 7.0 11.0 16.5 29.1 13.5 53.4 RADIO RECEIVERS PER THOUSAND POPULATION 139.0 105.0 119.0 172.1 122.7 225.9 TV RECEI'tERS PER THOUSAND POPULATION 11.0 38.0 51.0 67.9 38.3 102.6 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 56.0 69.0 76.1 40.0 78.5 CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. 6.8 4.2 3.7 3.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 5100.0/f 6200.0 6700.0 FEMALE (PERCENT) 18.9 24.6 24.6 21.5 25.0 24.5 AGRICULTURE (PERCENT) 51.4 37.9 31.0 30.2 43.5 28.9 INDUSTRY (PERCENT) 19.2 21.0 23.0 23.8 21.5 30.6 PARTICIPATION RATE (PERCENT) TOTAL 30.6 29.7 29.7 30.9 33.5 33.8 MALE 49.8 44.9 44.7 47.3 48.0 51.3 FEMALE 11.6 14.6 14.6 13.3 16.8 16.3 ECONOMIC DEPENDENCY RATIO 1.7/f 1.7 1.6 1.5 1.4 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGBEST 5 PERCENT OF HOUSEHOLDS 41.2/f i 31.9/i .. 23.7 20.8 HIGHEST 20 PERCENT OF HOUSEHOLDS 67.7/f.i 6O.17i *- 58.7 52.1 57.6 LOWEST 20 PERCENT OF HOUSEHOLDS 2.1/f,i 3.5/i .. 2.9 3.9 3.4 LOWEST 40 PERCENT OF HOUSEHOLDS 6.8/f,i IO.IT .1 9.9 12.6 11.0 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 214.0 265.6 270.0 RURAL .. .. 197.0 185.1 183.3 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 267.0 396.3 282.5 550.0 RURAL .. .. 122.0 308.1 248.9 403.4 ESTIMATED POPULATION BELOW ABSOLUTE POVERrY INCOME LEVEL (PERCENT) URBAN .. .. 34.0 35.2 20.5 RURAL .. .. .. 46.6 35.3 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1977. te Latin America & Caribbean: /d Intersediate Middle Income (5551-1135 per capita. 1976); 7e Upper Middle Income (S1136-2500 per capita, 1976)- /f 1964; L 1951-6; /h Includes teacher-training at the third level; /t Ecomouically acEtiv population; Li 1973. Lk National data. not strictly comparable with previous year.. Recent FAD data show 102.0, 52.0 and 26.0, respectively for these three messures.' Most Recnt Estimte of CR? per capita is for 1978. Revisd October 1979  ANNEX I -21- ~~~~Page 3 of 5 DEP5INTTTCEs OF ppOri, TINTSATOPB Motes: Although the data are draw from -ouce gene.rally judged the meat sathuritati-e and reliable, it should alas he noted that they my sot he interns- ticoalUy coparable becaus of the nck of standardloed oefinltlon. and concpts used by different countries in -11letint the data. The data are, hnontheless, usefUl. to describe orders cf saghltude, indicate trends, and charnoterine certain major differences between co-tries. 'Ti ajutedgrupavrages tf-oreachindicator are populAtion-weighted geomeric meas, exclding the extreme values of the indicator acid the meat popuclated counry s ech goup Du to lak of dnta, grop avrages or all1 Indicastor, for Capital Surpluc Ott xpurters and of indicators of A-ses to ldster aci Ecoretn Disposal, dousing, incom Distribution nod Povety for other ocuittey groups are poyntlatics-neighted geometric mean olthxut exclusion of the extrem vales and toe aunt populated coontry. Since the -ovrage of coutries smng the indictatrs depends on - ,availah.tr of data and is not uniform ctIo mit he exrcsd in rebatin avegnofco:diator to another. These aversee are meatly useful as anrxntosof "eprted"vleeenomaigteaosofun indictorata ie eg h country sod referenc gous lARD AREA (tooad echo.) Access to Etnreta biennia (ecnt of poplaton - ,totl ra, n ua Ttl- Total eurface rea cnprisiog land area and inland eaters. usher of peopl toa,uban, ndr l seodb oreadooa no Agricuatural - Mist rfeet ont:eate of sgri-ctitural ares used teeprarily percen.tages of thir renpeccive populations. Ecrets disposal esy Inobude or p.ernet ly for oropo, past_res n.net and hitcben gardens or to the co -cunad dioposal, xith or otltiut treatment, of h-s eurreta lie fsl.nd sate-ater bY water-borne system or the s- of pit priebr sod -latar ,nutallaticns. ISP PIEP CAPITA '90$) - INP per capita estimates at ourret maket iplos P.Mmipacdperphpw.ip,an - P. lains diiddbnueropaccngpyisn -alosiltod by san cocrno ethod ax World hank Atlso (1976-78 basis); meialsholat unicerniy iel.S rIprcingpyi 1960, i970, unO i978 data. ~ ~ ~ ~ 'peculaion per.Hring Person - Population diobded by number of practicin nale INE5OCCINDTMPSS0NP APrPPTAk - An-..a consuption of -omererial energy sod femele gradute.t nuse, pranti-1 nuns,sd -.sintant nurses 1ca ad lignite,petroiei, natural gasadbdo, ula.n ge- Popultion per Hoaxital Bed - total, rbn,ad&rrl-Pplain(oa, ubn thermal eleor-city~ In hilogran of ocal. equivalent per capita; 1isad and rura) dtoided by thrir Sepoic ubr of hospital reds noablanle in i970, sod 1976 data. puhlio end priests general sod peLali-ed hxntpta1 and r-habildistton centers. Hospitals are establishments p.ermnetly staffed by at leant one physici an. POPULAnTION AND0 VffAL STATISTICD Establishments prsooding principally custodial care -'ae'nt included. uRasl Total PopiIitlon Mid-Yeas (.llions) Asi of July ii 1960, 1970, and hospitals, howeve, include health and medical o-ntera not permnetly ataffed 1977 dt.by a. phyeicisa (best by a medi-ai assintant, nurs, mtidwife, etc.) hichi offer Urban Ppsua ic (percent of total) -Rastio of urban to totai pcpslstlipn; in-ptient noodation and procide a limited rang of medical facilitie.. differont definitiono of urba arcaa my affeot comparability or data Ade.lsesa peI optlPd-tona number of admioiuna to or dis-bargen fro. amog co-t.rien; :i96C, 1970, and 1975 data. bospitalo d-ieded byth toe ofhdo. Poult o Pr .etin Poplaio i yer 00 -CuLrrent population projectinos are basd o 0005140 1979 lltotaIllnpopulation -by ago and -e sod their mertlity and fertility Averag dice of Household (persons per hou.eholi) - total, ura,ad rura - rates. Poetnpar-nters for mortality rates comprise of three A boosehold cooe of a. grop of individuls ehn shur icig quaters sos boIS conni llfo roP-ctanY no birth iocr....iog cith .-utry'-. their mJ.aimeals. A boarder or lodger my or .y not he inoliudod is tic per caita loco_ len, o 7fnle life nopeot-ny stbdiloag at hb.t.shlid if. or ttintioal parp-e.. 77.5 .eso. The parantr fur fertility rEn .aln have tnree levels Averge snbeeof ruso per roo - total, urban, anrra A- Aeagenele anutuing decluo in fortility accrding to incom level and past of perosoper room. in al urban, and rura occupied -savetio..i deling~, ifunl olannhin perforano. Eaca coutry is then asIge on o these renpcticeip. Wellings exclde can-permanet st-uture and -utrci;irar tine combinations of sartal.1ty sod fertility trends for prnjection Access to leotr-ity (perceta of da-lilas-1 lto~,talerben,sd rorai prposes.; cetoal dselllngs oheetiiyi iig uresa ecnaoo Ototbos. ry cPula-1t-c - In o otutio...ry popl.tisto there is so grouth total, urban, sod rura d-oeuings repectively. sioce the hinth into is equal ti tl~oetlah rate, nd alno the age otruotur renaino constant. This is shiteved only after ferthihity rates EDtifATION docluc-00too -ep oeo le-I of -iot net repruduotbit rate, ubso AdutdErol tRtos looiooo~oeascuti,natd on the bsin of theprojected tbarcteriotics meat of all age a t the primary level soprcnages of respectior priasry of the popuistict in tho pear 20000, sod the rate of doulise of fertility school-age poplationa; -orlip inoludes children aged 6-11 years but rate to _rplacr_ct lecel. adjusted fur differe-t irogtbi of primary eduratios; for co-trio. wIth enstatinr pulation I.s roeaod - The yra h.. statiusary popoul.tiuivra education enrollment nVap-seed 1.00 peroet s;oe Some pupils cic a :bo reacted. are below cr aboe tie officIl achnsi age. PPoputint D--oty Seco..dary sohoci- total male sod femal - Computed S.ai si-; ueo-iary Per oo. cM. Od-pear pplatioc per scyar kitloneter (100 he-taren) of education oquan n; ietast fou years of approvd primary iorci otal rs procides general oaiol,or teacher training inetructi-no 'or pipila Per oc. be giotrlland - Computed noasSo .e for agricultural lend asually of 102 to 17 years of age; correpoades-re -nrse ar g-srally ccnl'. ecoluded. PPcplnlo Ag outrocrcc Children (0-lb years), curbing-age Vocatica enro -.llmntsent o scndry Pytiona.l institut.o.. boolude (lb-h yearn, st-dtretlIrd 65 year end con) as percetages of ti-year technical, industril, or-thrporm icoeatodperoyors popula.tion: i970. 1970O, and 1977 data. depsrtmesnt of oecoadsry instltutiuss. yeloiar o;Grouch bats'(P pre t) toal- ic`un.1 och rates of total sid- Pupi-tsnoheratsorsry nd sncdary - Total studnats n-rolld to year popuctioto fr 1M50-hO 19iM70 .-77 n 1.9y0-77. prmry sod seoany leel d~ivded by suncra ftahr.nsecfe Pou -to gboh Pa,te ~pore-t) - r An - O-sca growth eates of urban oP.ohgles popolnibos for 199-60, 1-9t0-70, ai1907.Adult literac rat p(ercont) - Literte aduIto :ablo to resoand ut)a Ird ito pat, ochoand) - Aocoa. Ive- births per thousand of cud- aper-ettgo of total adult pplto gd1 er n or yea pplto;10,970, sod 1977 data. Cruor loath Once (p_touad -Ahopa deatbo per tbounnd of 500-your COHSUWFTION Poputlaton 1970, 1'970, sod 1977 data. Paeanner Cur (per thouan ooltis) 1-Pssnger car -cprauc ntic care Crono epodoctiocbate-boo age ounber of daughtoronoma iotl hoar netin esca Igh Persno oxCiude nuoelances, hearses and mIlitary :0 irecres reprod-tiorperiod fueepeecrpestug-viicle.. opsoific fertility roten; -.s aly floe-yea avrages ending ia 1960, badbo R- -cro (per tbounand population) -All types of r-eeivrs ice radio 0979, und 1975. brssdan.ta so gon..erl pu~bl ic per thousand of Population; occludesiuoli-eaae Pumilp Ploobog A bocptors, .coa ~thcssanda( - A-..al cunie of -oui-e _isounres d is years ohee regiotratist of rai s ets -a is oc fpt gsbo brth_-omtrol dl~eov under auspice of sostlonal femll effect; data for recect years my not bc ocaparable 01ic- eocunries fa iy Ploog sr (ect of an de sosin) - Percentag of -uried TOtoo aper thoois"d cPulation) - Tb re..eirers fcc hrcadcattognea doiso hl-beain ah.54pas os oe hlrbit-cotrol de-bor puicprtouadprlton nldnulicensd TV rececr in ootri-o Sial uriedoco Iisn aegou.ed :o. Years oben rhtainof flc nets wa in effect. Neapapr Crclaton po thousandp oratfion d- Oh-w tho --ergr irsoistion .0CC dAI NOTDITTON5fa i Isdec. offo rocic per Capita '1969-71-iO0) - mnle.ocf per c-pits devoted primarily to recording generalsen It i omldered to be 'daily' socnI Prodotlor of all food roedocces. P-do-tibsrocloden tecd -d if it nipe..ace s3-et fou times a see. fecd sod i on -1-osio_ -'s lbasis. Comeditoen cove prio..ry goodo Cinem A..uaI Atteodunir per Capit.aecr Year -Bhated oo the numbr of tiorotso e.g. caga nei... sad cf sugar hidch ar odible end -ostiniactrtents odd durig tho year, u-iuding a oin to once-in oi-.a and -ccle (e.g. coffeeIsd ten are -uclued). Aggregate prodantion of each couoty _nto ioboned .. natioo... Icerage prosocr prtoosaghtu Pe oi-to -upip cf onlor-v s per_et os' clllroolee nlto) - Computed fros lABmP FORCE -orgy ociulc f set food ospplies -cilabc -n cootry per capita Total laorfrce tbhnano_s - t~Oosomially astive per...., including arme per dyc. bA-tlble oupplio -oprbn- dometic prod-tibc, iparts les frore end unemplyed but eoluding housewive, students, etc. efitotic- Iroprts, sod changes in 0t000. Not ioppiioa -scijd unisal feed, neds i viariu c-utrie- are noct coparahle. tunitienoied oc food pr-cnsisg, and bon t id tribot-it. bquire- Pmleon - Pesie lobor force as Percentage of total lIcer furco. trottsIcr stated by, PAybsdo pyiog .ca sedto)cel ~ ~ lIrrsso - Labor force in farmi.g, forestry, nhnting and si-it c bao c doeriog ocrir_mooalbr frra uo , bd veighto, flobiog anprenaeoftol ao fore. age soc Ioo oiotribtbicnt .f popoincion, and allonig 10 peroent for Induntry percet) - labor force in mining, contrct-o, asnfcturing and -ite at bouueb'lo io_vl ort-iiy , sater P55 a , naperentgef totaLl labor force. -yrcpit. c-opil of -t-e: eans p-c day) -Protei cocc fp0 atcntln!aenren)-tnlsaeadfml - mip'sutonr cspitu ovt coppip of f-co per dsp. let oupply of fond Is defined so asb yftsaecmutdn oa,ml,ad Coa-le laborfocnopr Iboc.Pq-ice-ent for al cnre oalse yU rurnd. for a -etageo of total, sLe and female population of alI ages respeetoely; ocoimum aicoancoIf 60 grasso f total protein per day and 20 gram of 1.970. 1970, and 1975 data. Th-n are 1SW' aParticipation rates reflecting ucln sod pulse protoic, of oJ,ch i gram should he solsea protein. age-sexstruture of tie pepulntln, ens long tIme trend. A few etimates These oted-as are lo..er then those of 75 gras of total pruteis and ar rmntion 1al sources 00 gras of soisal proteis os an avrage for the norld, propose d by PAO EconomIcDpednY Pads. - Ptio of populltico under 15 and 65 and seer to ontbr Tird Wcold food "u"oep th Lab force in ag -goP of 15-60 Years. Pe-cpotaprt-i -upoi from sourest sod pulse - Protein oupply sf food ier-vd umoionlo sod polo- ~s gram pe dsy. INM ITInO Child (ugrm u I Mortal tyPt 'Pr tb_ood - Aonoal deaths per thcnno Prenae fPict Icm 'bctb isash and ilsd) - Received. by ricel St iaggru1-yer, ,.!toytilrn. this agc group; for most deco)- 5 aon,robea0pcan,post0 pecn,sd ore 0 Peren -oing oo-tr-e diti Arrived from life tahlos. of households. IlALTH POV'ERTYTAFG00S 1140UP :,Ife AostryotOrb'eas I oruge oube- of yoarn of life Estiunted Abaolutr oet noelvl e aia urbaen rural- vtu si.ga corto; 190 17, n 1977 as huuepvryiem leve in that incm IbeI beo sIhn mni .fottttity Pate 0,e thoo-c A..Anua lesihn of -nfacta under onotriticoally adequate diet pious essen.tial ncn-fcud requiremets a not yaof hae e oooed oe tirobs. affordable. AvcoIs to OSfe -d.tor pororot If yoic:- toal_ubso,. es url Esti-ldmRes rlati-ePvrySom re 54prcant) - ranadrua ifoner of people totl, urban,un arurl nibs reant rotto ta relat_r pcrty Inc..e lec-l is on-thirdIofacerge pr capita oae atr su 'pply toldnteae ufc snr eunrae o personal Inoome of the coutry. Urban leve is dero-d from therrl ae :ocoot-aoatd naor oco as chat ftc. protot-i Orbsirs,h pbn, .wih ajsa fir big her sct of llivig is orh-anreas. us aitary sells) aS persotagen of thenr respective pop ti-ton. I htacePoutonAlwisuePortynoeLeve j et ( -urhb and en urban arm aS public foonatinor otandpont la-ated net more than rrl-Preto osltc ubnadrrl h r hsuepo" _0mters frox a hoSe ey be .n..idered as being sothin re habonhi acesof that _coce. In_ ruralofca re.s.nnble aroes told imply tint toe louses for mehern of tie.. sehold do notices to spend a. Ec-noo sod Soc;al Data Die-ion lluprrportlcant part of the day in fetohing tie fanly' a-st-r seeds osnoic Asalyi'si and Pro-jeoton Departmet August 1979  8C011197 30-W.AP1A18 18,T4 PogO 4 of S 196769 ~~~~~~~~~~ ~~~~~ ~~~~~~~~~~~~~~~~~~~~~~(1967-697- 1875 1988 A90-06 19 75 19 76 1977 1978 1979 1 988 1969 74 79 85 189 85 979 1965 NATTO381 ACCOUNTS9 1976 P~i-o Ond E-oh-og 6~.00 0,0.5 00006I1 pIldoot ~~~~~~9,660 84,967 19,236 19,671 17.326 88,282 19, 376 15,922 6.5 5.8 6.8 181.2 103.8 t00.0 3011g. 80010 50805 AA 216d1 7-87 -751 -699 6 47 _424 38 -164 .424 - - - 10.6 8.I 1.7 Cr055 0015es10c Income 6~~~~~~,999 1,8a68 19,228 16,668 17, 753 16,365 19,715 loc974 . . 9. 7.25 98. 3 Import (mcI. 880) ~~~~~~ ~~1.491 2.047 2. 362 2.418 2.895 3,0 3,411 9, 012 7.5 11. 7 8.7 14.1 17.4 19, 3 810 -0 -ft. y71)o..88.17 -1.419 -2 297 -2, 782 -T -2 ~384 -3.314 3,464 .4_49. _._5 96 5,4 7 5.0 1.8.1 17.3 RU...... 120 72 -2,50 -480 -681 -469 -133 .53 514 -1--47 -8.7 2.0 COoop8008osd81l-- 7, 320 10,608 11,579 12.540 13.2371 13,954 14.527 19.7035 6.9I I., 5.4 70.09 7.9 79. 4 3000400808 0,opeodllreo hod. 98oc4o9 1,61 2, 710 3,1077 3, 427 3, 899 4,2 78 4,535 6. 978 11. 1 2.1 .0 18.46 23. . 26. 9 Coloeort S-VIng0 3,589 2, 9670 3,9 4, 106 4,3"2 4,481 46 6.464 11.1I 10.5 7.1' 21. 74.8 24. 9 60110.01 0.-100 0,529 2,624 329 3,981 4, 228 4,1 56 4,790 5,602 11.6 10.8 6.5 19.4 05. 22.4 66436488068F 78417 80-1 P060 68 C--eo 78-78A65- fT.. 8.761s1 Goods ~~~~ ~~~~ ~~290 983 671 627 1, 293 1, 771 2,13 4955 32.0 19. 3 40. 9 44.6 64.95 80-00000- GoAds 7Fo-l, Po-l) 254 609 732 872 901 1,223 1.44 2,765 71.4 19.0 14.0 42.7 30.9 26.6 Poets 5 15 69 194 239 609 729 1, 756 12.2 152.4 19.1 1.1 13.3 18.8 C--pti..6o G.od. 6bi 21 21_L4 235 290 370 426, 638 16. 74.1 13.9 89.9 9.3 . T.t.1 60-1h.odi-e (CIF) 728 606 1,425 1,745 2,128 2,717 3,973 4,724 9,882 18.4 29.2 19.4 107.0 167.0 166.7 666061dGood. 96 324 381 382 4.76 419 779 6,88 31.8 7.4 18.2 1".9 10.1 21.4 0 "00EPol 99I 1,291 1,874 7,414 262 3,736 3,761 6,572 14.9 27. 6.8.1 69. 78.6 08114 7080)73417 7647 41,2927 .7 ,760) 2,0047 2,437) 2 ,4247 3,127) 4 17 63 .27 (64.2) 760.97 37.47 88oo167 8 362 898) 8657 7367 ),,,,,,,4~~~~~~~~~~~~~ 7236) 72927 567) 73.o 24.67 5m42) 737) 75,47 6.87 706.1 600010 001046 1,717 2,255 2,796 3,298 4,331 4,536 8,361 12 26.0 13.0 3009 70. 100,8 8ootP I'ell,O 21.2 73.9 607.8 141.6 638.3 147.2 144.7 184.1 T0708 P101- 12d 34.0 95.8 900.8 100.9 188.6 142.9 138.4 233.1 T-o. of T-d4 OOd-O 62.9 27.1 709.8 128.1 118.7 103,0 91,." 79.2 160710 600E8 0Y SEC538 70-1- 10-) o-10 000 19 676 - 810.1- -d R-6,~ 60c--008 .-Ioo Cr001 8.0 . Ps--n 0150. 40161010011 8~~~~~~~~~~,923 4,145 4,224 4.330 4,720 4,926 6.284 6,737 2.8 4.6 5.3 30,6 76. 88.1 79066-9 2,427 3,833 9,933 487 4,434 4,669 4,.68 6,7681 8.7 5.1 8.4 26.3 27.6 26. 81t5- 4_ 28 944834 6.65 4 ' 47,~18_466 3.9 . 6.2 41.1 43.1 43,7 708.6 9,590 396 1,0 1 ,4574 1,1 .,1 792 2. 5.1 5.7 .9 100.9 107.0 670,3 06,A P-r o f0 CDP C6.0o R-287- 413 1.502 1.670 2,55 2,546 3,332 42302 13,1.29 70.3 22.1 725.0 103 008 0.4 Corrool ObOOOodlOores ~~~~ ~~262 798 791 930 .,1I29 1,352 2.126 6.233 1 6,8 21.9- 24.0 4.8 5.0 5.9 1od6e008p 90-108 138 . 67 919 1,119 1,439 1,783 7,176 6,898 76.2 22,2 28.1 3.5 9.8 6.5 084h- PobIll 0816 1 g0706 434 867 -37 .880 19 - 25 800 I ., - 7. ,b61. 10-0- 26-0ot. 612 917 1,135 1,1.23 1,8636 1.975 7.987 17.367 8.6 21.1 32,0 6.5 6.4 9,9 a66.63088 3.9010-.598 1969.70 8675-79 1980-85 108000 .g1066 So- 30-8 4.25 3,62 0.73 00001 8566160 0.26 2.02 1,33 n-gOs 8,c51 9S-I.,o R000 7.20 8,32 3.29 6600305 ...001 Rsoog 008 14 7.32 71.74 dO 7.f 8017 2A . of 7-17 164 1973 0964 1J972 0964-7 cO S- 813907-92 A A ID~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Ogl,1601.8 1. 0 .81168 3.427 2.057 47.3 37.2 -1.6 700~_,17 _9 87016 I., 22.7 1,,dosOlo 7.~~~~~~~~~095 1.212 10.7 17.8 271. P-oo 24.2 19. 5680009 ~~~~~ ~ ~~~~~1.749 3.,842 34.0 _2.27 8.2 T--0p08 so - O0o,.lo4l.14. 12 82161 ~~~~~~ ~ ~~~~~~5,1.34 6.812 178.0 1007.0 3.20681.176 kdo .d0.81115I5 -..,,.,.7088,,,, 01- 005 Alt071889(16 1944 1973 196 8873- Li080-73 N 1 75 1964 U-73 19M-73 ~ ~ ~ ~ ~ ~ ~ ~~~78006e61 0.06 0. ' 46101-1-1 983 01166.4 160.4 5.9 06T6. 0600 77 70. 0008810 0,8~~ ~ ~~~~~~ ~~37 2,55 35.2 148.6 3.M6o 801. __-__- 0_730 ._48 6 877.3 971.7017801 70, 00.0 1M7. l-I1 1.359 1.21) 186.7 100.A 2.6 Fobrocs 0. 1980  -23- ANNEX I Page 5 of S BALANCE OP PAYMENTS EXTERNAL ASSISTANCE AND DEBT (Amounts in Millions of US Dollars at Correct Prices) Actual Estimated Proleoted 1970 1975 1976 1977 1978 1979 1980 1981 1982 1985 SULAEY BALANCE OF PAYMENTS Exports (itol. NYI8) 1,00 2,165 2,782 3,397 3,992 5,226 5,644 6,138 7,001 10,606 morts (incl. NY') 1.149 2,030 2.302 2,723 3,414 4,789 5.681 6,796 7,881 11,515 Resoorce Bala.ce (X-M) -149 135 480 674 578 437 -37 -658 -880 -9D9 Ft Servics (Net) -180 -263 -279 -264 -156 -97 -119 -172 -275 -678 Profits ( -64l ( -74) ( -115) ( -114) ( -1d) ( -130) < -145) ( -163) ( -182) ( -233) other ( -116) ( -189) I -164) ( -150) ( -38) ( 33) ( 26) ( -9) ( -93) ( -445) Coerces Traosfers (Net) 27 48 21 29 20 21 22 24 25 30 b lance on fCatent A.coout -3 -80 222 439 442 361 -134 ,-806 -1,130 -1,557 Private Direct Invest-Ont 39 32 14 42 47 65 80 100 130 300 Poblo MALT Loans lisbsesNnflPects 235 383 241 374 341 887 552 651 980 1,369 - Repaymsents -75 -135 -152 -174 -231 -458 -319 -330 -385 -552 Net Disburse- ecos 160 248 89 200 110 429 233 321 595 817 DII, MiLToanr 101 141 109 85 110 282 212 250 275 365 - RepayPents -59 -87 -07 -89 -96 -116 -141 -165 -170 -225 Net Disbusements 42 54 22 -4 14 166 71 85 105 140 Capital Tea.na ftloes n.ei. 55 -115 215 173 60 291 - - Change in Net Reservea (- =TIncrease) 6 -139 -562 -850 -673 -1,312 -250 300 300 300 GRANT AND LEAN COMNITMENTS 1972 1973 1974 1975 1976 1977 1978 Official Granf and Grants-like- - - - - - Public and M&LT Loans 1RD 74 162 8 88 80 306 475 IDA - _ _ _ _ _ _ Other Multiloseral 39 29 65 5 93 61 71 GoverPNsents 114 72 52 66 132 65 113 Suppliera 39 31 50 74 44 31 90 Private lacks 93 190 61 164 169 65 146 Bonds - 45 - _ _ _ _ Public Loans n.e.i. - 1 - Total Poblic Median - and Long-teem Lo.n. 359 530 236 397 518 528 895 EXrTERAL PUBLIC DEBT O.ta.tndine on 12/31/77 Outstanding no 12/31178 (RBpayyble in Foreign Currency) Diabursed Oni Percent Disborsed Only Peecent Wnrld Bank 716,2 26.7 711.5 26.5 IDA 22.0 0.8 21.8 0.8 other Moltilateral 195.5 7.3 243.1 8.6 Coverneents 928.4 34.6 983.8 34.7 Suppliers 207.4 7.7 .209.4 7,4 Private Banks 551.0 20.6 567.9 20.1 Bonds 47.7 1.8 45.4 1.6 Public Dobts n.e.i. 1L. 0.5 9.7 0.3 Total Public Medium- and Long-teem Loans 2,680.0 100.0 2,832.6 100.0 1972 1973 1974 1975 1976 1977 1978 DEBT AND DEBT SERVICE Poblic Debt O .s tatding and Disb:raed /1 1,626.5 1,901.7 2,170.0 2,318.0 2,403.2 2,680.0 2,832.6 Intereat on Public Debt 57.6 77.2 101.1 111.7 122.8 138.2 171.8 Repsysnents o Public Debt 96.3 131.4 207.5 135.3 151.8 176.1 230.5 TotsI Public Debo Service 153.9 208.6 308.6 247.0 274.6 314.3 402.3 Other De bi Serui (Net) 155.1 i26.6 118.B 87.0 87.0 89.1 96.0 Totai Debt Service (Net) 309.E 335.2 427.2 334.0 361.6 403.4 498.3 B-rden on Eport Earnings (7.) Public Debt Service 12.8 13.5 16.6 11.4 9.9 9,3 10.1 Total Debt Service 25.6 21.7 23.0 15.4 13.0 11.9 12.5 Total Debt iErvic- Pls Net Foreign Inve Itnent Eccoce 31.5 26.2 25.9 18.8 17.1 15.2 15.4 Average Tenon of Public Debt Inserestas 7. Prior YPar Debt Outstanding sod Disbursed 4.2 4.7 5.3 5.4 5.3 5.8 6.4 A-nrtieatioo as 7 Prior Year Debt Oateiasding and Disburred 7.0 8.1 10.9 6.5 6.5 7.3 8.6 I8RD Debt Oucuttndicg and Diabursed /1 453.4 504.5 561.7 633.5 671.6 716.2 751.5 IBRE as 7 Public Debt Outstanding and Disburaed 27.9 26.5 27.1 27.3 27.9 26.7 26.5 IBRD as 7. Public Debt servic- 30.9 29.1 24.1 31.7 31.2 29.6 23.7 IDA Debt ONuttanding and Disbarsed /I 20.9 23.0 22.8 22.5 22.3 22,0 21.8 IDA as 7. Public Debt Outstanding and Disbarsed 1.3 1.2 1.1 1.0 0.9 0.8 0.8 IDA on 7. Pablic Debi Service 0.3 0.2 0.1 0.2 0.2 0.i 0.1 Cel1ubia DiEision /1 End of period. Feb--ary 1, 1980  -24- ANNEX II Page 1 of 11 THE STATUS OF BANK GROUP OPERATIONS IN COLOMBIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of December 31, 1979) (US$ million) Loan Amount (less Cancellation) Number Year Borrower Purpose Bank IDA Undisbursed 49 fully disbursed loans and one IDA credit 784.5 23.5 /1 - 680 1970 Colombia Roads 32.0 1.5 738 1971 Empresas Municipales de Palmira Water Supply 2.0 .2 741 1971 Empresa de Acueducto y Alcantarillado de Bogota Water Supply 88.0 3.5 849 1972 Instituto Colombiano de la Reforma Agraria Irrigation 2.2 .8 860 1972 Instituto de Fomento Municipal Water Supply 9.1 2.6 874 1973 Empresas Publicas de Medellin Power 56.0 4.1 903 1973 Banco de la Republica Industrial Cr. 60.0 .1 920 1973 Colombia Education 21.2 10.4 926 1973 Ferrocarriles Nacionales Railways 25.0 .3 1072 1975 Instituto Nacional de Fomento Municipal Water Supply 27.0 14.4 1073 1975 Empresa Nacional de Telecomunicaciones Communications 15.0 .9 1118 1975 Colombia Rural Settlement 19.5 9.3 1163 1975 Colombia Agriculture 21.0 15.3 1223 1976 Banco de la Republica Industrial Cr. 80.0 14.8 1352 1977 Colombia Rural Dev. 52.0 40.7 1357 1977 Banco de la Republica Agricultural Cr. 64.0 29.7 1450 1977 Empresa Nacional de Communications 60.0 58.6 Telecomunicaciones 1451 1977 Banco de la Republica Industrial Cr. 15.0 7.9 1471 1977 Colombia Highways 90.0 82.8 1487 1978 Colombia Nutrition 25.0 23.2 1523 1978 Empresas Municipales de Cali Water Supply 13.8 13.4 1558 1978 Colombia Urban Develop- ment 24.8 24.4 1582 1978 Interconexion Electrica, S.A. Power 126.0 113.4 1583 1978 Colombia Power 50.0 39.2  -25- ANNEX II Page 2 of 11 A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of December 31, 1979) (Continued) Number Year Borrower Purpose Bank IDA Undisbursed 1593 1978 Zona Franca Industrial Industrial y Comercial de Cartagena Export 15.0 14.3 1598 1978 Banco de la Republica Industrial Cr. 100.0 81.4 1624 1979 Colombia Airports 61.0 61.0 1628 1979 Empresa de Energia Electrica de Bogota Power 84.0 73.6 1694 /2 1979 Colombia Urban Develop- ment 13.5 13.5 1697 /2 1979 Empresa de Acueducto y Alcantarillado de Bogota Water Supply 30.0 30.0 1725 /2 1979 Interconexion Electrica, S.A. Power 72.0 72.0 1726 /2 1979 Instituto Nacional de Fomento Municipal Water Supply 31.0 31.0 1737 /2 1979 Instituto Colombiano de la Reforma Agraria Agriculture Cr. 20.0 20.0 1762 /2 1979 Cerro Matoso, S.A. Mining-Nickel 80.0 80.0 TOTAL 2,269.6 23.5 Of which has been repaid 442.9 2.0 Total now outstanding 1,826.7 21.5 Amount sold 50.5 Of which has been repaid 27.7 22.8 Total now held by Bank and IDA 1,803.9 21.5 Total undisbursed 988.3 /1 Includes exchange adjustment of US$4.0 million. /2 Not yet effective.  -26- ANNEX II Page 3 of 11 B. STATEMENT OF IFC INVESTMENTS (as of December 31, 1979) Type of Amount in US$ million Year Obligor Business Loan Equity Total 1959 Laminas del Caribe, S.A. Fiber-board 0.5u - 0.50 1960-1965 Industrias Alimenticias Noel, S.A. Food products 1.99 0.08 2.07 1961 Envases Colombianos, S.A. Metal cans 0.70 - 0.70 1961-1968 Morfeo-Productos para el Hogar, S.A. Home furniture 0.08 0.09 0.17 1961 Electromanufacturas, S.A. Electrical equipment 0.50 - 0.50 1962 Corporacion Financiera Development Colombiana financing - 2.02 2.02 1962-1963 Corporacion Financiera Development - 2.04 2.04 Nacional financing 1963-1967 Compania Colombiana de Textiles 1.98 0.15 2.13 1968-1969 Tejidos, S.A. 1964-1970 Corporacion Financiera de Development Caldas financing - 0.81 0.81 1964-1968 Forjas de Colombia, S.A. Steel forging - 1.27 1.27 1966 Almacenes Generales de Warehousing 1.00 - 1.00 Deposito Santa Fe, S.A. 1966 Industria Ganadera Livestock 1.00 0.58 1.58 Colombiana, S.A. 1967-70-74 ENKA de Colombia, S.A. - Textiles 5.00 2.60 7.60 1969 Compania de Desarrollo de Tourism - 0.01 0.01 Hoteles y Turismo, Ltda. (HOTURISMO) 1969-1973 Corporacion Financiera del Development - 0.45 0.45 Norte financing 1969 Corporacion Financiera del Development - 0.43 0.43 Valle financing 1970 Promotora de Hoteles de Tourism 0.23 0.11 0.34 Turismo Medellin, S.A. 1970-1977 Pro-Hoteles, S.A. Tourism 0.80 0.25 1.05 1973-1975 Corporacion Colombiana de Housing - 0.46 0.46 Ahorro y Vivienda 1974 Cementos Boyaca, S.A. Cement 1.50 - 1.50 1975 Cementos del Caribe, S.A. Cement 3.60 - 3.60 1976 Las Brisas Mining 6.00 - 6.00 1977 Promotora de la Interconexion de los Gasoductos de la Costa Atlantica S.A. Utilities 13.00 2.00 15.00 1977 Compania Colombiana de Clinker, Cement and S.A. Construction Material 2.43 0.30 2.73 Total Gross Commitments 40.31 13.65 53.96 Less cancellations, terminations, repayments and sales 28.96 8.26 37.22 Total commitments now held by IFC 11.35 5.39 16.74 Total undisbursed _ _ _  -27- ANNEX II Page 4 of 11 C. PROJECTS IN EXECUTION 1/ 1. Ln No. 680 Highways VI; US$32 million, June 4, 1970. Effective date: March 29, 1971 Closing date: original - November 30, 1974 current - November 30, 1980 The project is nearing completion; the paving program, which is the largest component of the project, has experienced considerable cost increases and delays. The disbursement percentages for the relevant categories of the loan have been adjusted to spread remaining loan funds over the paving works implementation period. Project completion is now expected for end-1980. As of December 31, 1979, US$30.5 million (95% of the total) had been disbursed. 2. Ln No. 738 Palmira Water Supply and Sewerage; US$2 million, May 28, 1971. Effective date: December 29, 1971 Closing Date: original - March 1, 1975 current - June 30, 1980 The original project works were completed at lower cost than originally estimated. The savings of about US$348,000 are being used to finance supple- mentary sewerage works which were already identified during project appraisal. Work on the project additions is well advanced and funds should be fully dis- bursed by the loan closing date. As of December 31, 1979, about 90% of the loan amount was disbursed. 3. Ln No. 741 Water Supply (Bogota II); US$88 million, May 28, 1971. Effective date: August 16, 1971 Closing Date: original - June 30, 1978 current - December 31, 1980 Project implementation is progressing satisfactorily and the Borrower continues to perform well. Completion of the Chuza-Ventana tunnel section, which was delayed by a methane explosion, is expected to be completed by mid-1982; all other project elements will be completed by the end of 1980. Disbursements up to December 31, 1979, amounted to about 96% of the loan amount. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  -28- ANNEX II Page 5 of 11 4. Ln No. 849 Drainage (Atlantico II); US$5 million, June 30, 1972. Effective date: November 14, 1972 Closing Date: original - March 31, 1978 current - December 31, 1979 The project is the second phase of a scheme to develop about 17,000 ha of seasonally inundated land for agricultural production. At the request of the Government, US$2.8 million of the loan of US$5.0 million was cancelled in February 1977. Settlement of farmers within the project areas is behind schedule and the provision of technical assistance/farm credit needs improve- ment. Because heavy rainfall in May and again in November resulted in flooding which destroyed crops in the project area, a study is to be carried out to determine possible deficiencies in design and a least cost solution for correcting them. The closing date would be extended once consultants are employed to carry out the study. The results are expected to be ready for Bank review in mid-1980. 5. Ln No. 860 Medium-Size Cities Water Supply and Sewerage Project; US$9.1 million, October 10, 1972. Effective date: March 7, 1973 Closing Date: original - September 30, 1976 current - September 30, 1980 As of December 31, 1979, about 71% of the loan amount was disbursed. Management problems affected the initiation of the project, but execution has since improved. Delay in receiving budgetary funds as a result of the Government's economic stabilization measures also slowed down project execution; however during 1979, execution has improved. INSFOPAL has prepared a new implementation program for each city and works are now expected to be completed by December 1980. The closing date will be extended in one time. 6. Ln No. 874 Guatape II Hydroelectric Power Project; US$56 million, January 12, 1973. Effective date: March 13, 1973 Closing Date: original - December 31, 1978 current - June 30, 1980 The project is virtually completed; the only remaining item is some procurement of distribution equipment. After considerable delay in resettling the people of El Penol and Guatape, filling of the Santa Rita reservoir was carried out in May 1978, three years behind schedule. The revised project cost is substantially above appraisal estimate, mainly occasioned by higher cost of the civil works. As of December 31, 1979, US$51.9 million or 93% of the loan amount had been disbursed.  -29- ANNEX II Page 6 of 11 7. Ln No. 903 Development Finance Companies V; US$60 million, June 11, 1973. Effective date: November 9, 1973 Closing Date: original - June 30, 1977 current - December 31, 1979 The loan is fully committed. Disbursements are expected to be completed within the next few months. As of December 31, 1979, only US$0.1 million remained undisbursed. 8. Ln No. 920 Education III; US$21.2 million, July 19, 1973. Effective date: January 9, 1974 Closing Date: original - June 30, 1977 current - December 31, 1981 Project execution had been suspended in mid-1975 pending redefinition of sector priorities by the Government. It resumed in 1977 but suffered continuous delays. In June 1978, the Government submitted a proposal to reduce the scope of the project and to cancel a large portion of the loan. However, the new administration, which came to office in August 1978, retracted the proposal and decided to proceed with the project as originally conceived. Since reactivating the project, the Borrower has made progress in planning, construction, educational programming and personnel training, and project execution is proceeding normally. 9. Ln. No. 926 Sixth Railway Project: US$25 million, August 8, 1973. Effective date: December 6, 1973 Closing date: original - June 30, 1976 current - August 31, 1980 Because of severely constrained locomotive availability, freight traffic in 1979 decreased by 5%, compared to the previous year. The Government has provided substantial funds to assist CNR in obtaining necessary equipment and spare parts to improve motive availability. Thus, performance is expected to improve over the next few months. Together with the Bank, the Government is studying further corrective measures aimed at enabling the railway to fulfill its important role in facilitating continued economic growth in Colombia, including provision of necessary services for the planned exploita- tion of coal for export. As of December 31, 1979 only about US$300,000 of the loan amount remained undisbursed.  -30- ANNEX 11 Page 7 of 11 10. Ln No. 1072 Second Multi-City Water Supply and Sewerage Project; US$27 million, January 16, 1975. Effective date: April 14, 1975 Closing Date: June 30, 1980 There were substantial delays in making the eight subloans effective. The last subloan (Barranquilla) was made effective on September 9, 1976. In spite of the fiscal restraint imposed by the Government's economic stabiliza- tion measures, project implementation is progressing satisfactorily in most cities. Works are expected to be completed by December 1980. Subborrowers have not been implementing tariff adjustments as agreed; therefore, INSFOPAL is proceeding to take corrective measures. As of December 31, 1979, US$12.6 million or 47% of the loan had been disbursed. 11. Ln No. 1073 Telecommunications III; US$15 million, January 16, 1975. Effective date: April 14, 1975 Closing Date: Original - December 31, 1978 Current - June 30, 1980 Contracts for all Bank-financed goods have been awarded, and work is proceeding satisfactorily. Though many of the project works have been commissioned and are earning revenue, project completion is not expected until June 1981 because of earlier delays in procurement and building construction. As of December 31, 1979, only US$900,000 million or 6% of the loan remained undisbursed. 12. Ln No. 1118 Caqueta Rural Settlement Project; US$19.5 million, June 2, 1975. Effective date: April 1, 1976 Closing Date: October 31, 1979 The loan became effective on April 1, 1976, after a six-month delay. Project execution has proceeded rapidly and some of the lost time regained. Road and bridge construction is well ahead of schedule (79 km have been completed). School construction and the provision of sufficient credit are lagging though corrective measures are being slowly taken. As of December 31, 1979, US$9.3 million or 48% of the loan remained undisbursed. Upon receipt of a Government request, the closing date would be extended for two years in order to allow sufficient time to complete the project. 13. Ln No. 1163 Cordoba 2 Agricultural Development Project; US$21 million, September 12, 1975. Effective Date: March 30, 1976 Closing Date: June 30, 1981 A few months after effectiveness, the Government decided to give responsibility for project civil works to another agency. This decision delayed the initiation of the project. Implementation is now proceeding satisfactorily, but still behind schedule. As of December 31, 1979, US$5.7 million of the loan amount had been disbursed.  -31- ANNEX II Page 8 of 11 14. Ln No. 1223 Sixth Development Finance Companies Project; US$80.0 million, March 31, 1976. Effective Date: September 1, 1976 Closing Date: June 30, 1980 The project is proceeding satisfactorily and virtually all loan funds are committed. As of December 31, 1979, about 82% of the loan had been disbursed. 15. Ln No, 1352 Integrated Rural Development Project; US$52.0 million, January 7, 1977. Effective Date: August 26, 1977 Closing Date: December 31, 1982 The project is now in its fourth year of implementation and proceed- ing satisfactorily in spite of its complexity. The project's components of credit, technical assistance and training are proceeding satisfactorily, while institutional coordination continues to be effective. The forestry and water supply components have suffered some delays. Administrative procedures, such as procurement and disbursement, continue to present some difficulties, but they are much less serious than initially. Control and monitoring of project execution is comprehensive, and a methodology for evaluating the project's impact has been prepared. As of December 31, 1979, US$11.3 million, or 22% of the loan had been disbursed. 16. Ln No. 1357 Second Agricultural Credit Project; US$64.0 million, February 4, 1977. Effective Date: September 6, 1977 Closing Date: December 31, 1981. The funds assigned to medium and large farmers are now fully committed. Subloans made to small farmers have recently picked up and this portion of the loan is expected to be fully committed by 1981. Concern over possible diversion and substitution of subloan funds led the Borrower to increase substantially its end-use supervision. About 73% of loan funds for credit to agroindustries have been committed for 82 subprojects. As of December 31, 1979, US$34.3 million, or 54% of the loan had been disbursed.  -32- ANNEX II Page 9 of 11 17. Ln. No. 1450 Telecommunications IV; US$60 million, July 7, 1977. Effective Date: October 3, 1977. Closing Date: June 30, 1982. The project has been delayed as a result of several personnel changes in the Borrower. Current activities are concentrated on the procure- ment of project goods, the planning of cable networks--trunk exchange expansion and design of buildings to house equipment. The Borrower is studying possible ways to make up some of the time lost, As of December 31, 1979, US$58.6, or 98% of the loan, remained undisbursed. 18. Ln. No. 1451 Second Small-Scale Industry Project; US$15 million, September 27, 1977. Effective Date: February 14, 1978. Closing Date: December 31, 1980. After initial delays in loan effectiveness mainly due to management changeover, project implementation is proceeding well and loan funds should be fully committed by June 30, 1980. As of December 31, 1979, US$7.1 million had been disbursed. 19. Ln. No. 1471 Highways VII; US$90 million, July 5, 1977. Effective Date: November 28, 1977. Closing Date: December 31, 1982 The Project comprises three main programs: rehabilitation, main- tenance, and vehicle weight control. After initial delays, the project is now developing satisfactorily. Stabilization and drainage works are progressing well; contracts for 14 of the 32 construction lots have been signed and works have commenced. The maintenance program began in January 1980, and consultants to assist MOPT in executing the program have been retained. The vehicle weight control program has experienced a 12-month delay but progress is now satisfactory. As of December 31, 1979, about US$7.2 million had been disbursed. 20. Ln. No. 1487 Integrated Nutrition Improvement Project; US$25 million, November 10, 1977. Effective Date: March 9, 1978 Closing Date: June 30, 1982 Significant progress has been achieved in the major components of health, nutrition education and water supply. Initial delays occurred in two subsidiary components--home food production and food quality control--but activities are now underway. Project management and coordination have been sound, flexible and effective. Evaluation systems are operating effectively.  -33- ANNEX II Page 10 of 11 21. Ln. No. 1523 Second Cali Water Supply and Sewerage Project; US$13.8 million, June 20, 1978. Effective Date: January 31, 1979 Closing Date: June 30, 1982 Progress in design and tendering is slow and project implementation is delayed. EMCALI's weak financial position remains the most critical issue in the implementation of the project. EMCALI has agreed to take corrective measures to restore the entity's financial viability and to improve management and administrative procedures. The Bank is following up project execution closely. 22. Ln. No. 1558 Urban Development Project; US$24.8 million, July 21, 1978. Effective Date: December 1, 1978 Closing Date: June 30, 1982 The 1978 change of Government led to corresponding staff turnover in the executing agency and to slow project start; overall progress is now running about 18 months behind schedule. Project implementation plans in eight of the 23 cities are substantially completed and it is expected that implementation plans in the next ten project zones will be completed before the end of this year. The first disbursement application has been received and two more are forthcoming. The new Directora General of SIP intends to accelerate project implementation and will establish a working unit in SIP for monitoring and operational evaluation of the project. 23. Ln. No. 1582 San Carlos I Hydro Power Project; US$126 million, July 14, 1978. Effective Date: April 5, 1979 Closing Date: June 30, 1984 Project works are proceeding on schedule. 24. Ln. No. 1583 500 kV Interconnection Project; US$50 million, July 14, 1978. Effective Date: October 17, 1978 Closing Date: June 30, 1982 Project works have recently been initiated. The Bank-financed component (transmission line) is proceeding on schedule, at lower-than- anticipated cost. However, project completion is likely to be delayed by about one year as a result of the re-issuance of bids for the KfW-financed component (substations).  -34- ANNEX II Page 11 of 11 25. Ln. No. 1593 Cartagena Industrial Export Processing Zone; US$15 million, August 1, 1978. Effective Date: January 30, 1979 Closing Date: December 31, 1983 After an initial delay due to procurement problems, project implemen- tation is now running smoothly. A number of contracts have been signed, and work is proceeding without delay. 26. Ln. No. 1598 Seventh Development Finance Companies Project; US$100 million, July 27, 1978. Effective Date: November 28, 1978 Closing Date: December 31, 1982 By the end of December 1979, about US$60.6 million had been committed and an additional US$18.5 million, which has been approved by BR for subloans, is presently being processed. 27. Ln. No. 1624 Airports Project; US$61 million, December 29, 1978. Effective Date: July 24, 1979 Closing Date: December 31, 1984 Project implementation is proceeding well. 28. Ln. No. 1628 Mesitas Hydroelectric Power Project; US$84 million, April 9, 1979. Effective Date: August 21, 1979 Closing Date: December 31, 1982 Project works are well under way, although at higher-than-anticipated cost. 29. Ln. No. 1694 Second (Cartagena) Urban Development; US$13.5 million, August 31, 1979. This loan has not yet become effective. 30. Ln. No. 1697 Third Bogota Water Supply; US$30 million, November 30, 1979. This loan has not yet become effective. 31. Ln. No. 1725 San Carlos II Hydro Power; US$72 million, November 30, 1979. This loan has not yet become effective. 32. Ln. No. 1726 Third Water and Sewerage; US$31 million, November 30, 1979. This loan has not yet become effective. 33. Ln. No. 1737 Third Agricultural Credit; US$20 million, November 30, 1979. This loan has not yet become effective. 34. Ln. No. 1762-CO Cerro Matoso Nickel; US$80 million, December 20, 1979. This loan has not yet become effective.  -35- ANNEX III Page 1 COLOMBIA FIFTH TELECOMMUNICATIONS PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken to prepare project: One year (b) Agency which prepared project: Empresas Publicas de Medellin (EPM) (c) First presentation to Bank: February 1979 (d) Departure of appraisal mission: November 1979 (e) Completion of negotiations: February 1980 (f) Loan effectiveness planned: July 1980 Section II: Special Bank Implementation Actions None Section III: Special Conditions 1. Assurances have been obtained that EPM would: (a) carry out a study to restructure telephone branch management and implement the results after consulting with the Bank by September 30, 1981 (paragraph 49); (b) by September 1, 1981, carry out a study of the structure of telephone tariffs, under terms of reference acceptable to the Bank (paragraph 51); (c) not utilize telephone operation funds for other purposes unless such funds are in excess of all reasonable Telephone Department requirements (paragraph 52); (d) maintain debt service coverage for each department of at least 1.5 (paragraph 52); (e) maintain tariffs at a level to produce a rate of return of not less than 9% on revalued assets (paragraph 54); and  -36- ANNEX III Page 2 (f) seek Bank concurrence before undertaking for its telephone operation any new capital investment beyond that provided for in the 1980-84 program and in excess of US$2,000,000 (paragraph 55). 2. There are no special conditions of effectiveness.  IBRD-3638R I 78' 78' 74' 7' OCTOBER 1976 CO OMIAIt A' rOH AM A N r I cA C E A #H A ERA t3erren X , / t S & } g @r _oo A .) e ~~~~~~MAGDALE N A t V/ Y R. h& oH SCEb P do, -t JiPl dm 0 44040- by fh0 '4~~~~~~~~~~~~~~~~~~~~~~~~4 V \ > a 3, /() i NORTE \ y~~ E -N E Z U E l hA ,)CORDOBA -j DE 5 A N T A N DER A R A U C A BOY ACA o/ RISARALAI / CALDAS CA * EA t oM8oIOI. jCUNDINAMARCXA da f 400008 BOGOTh V I C H A DA/ _4e s 0 f z/Armen r> lb0oge ._ V11 4'_ LLE T V L Io vMcenco_ t