Nepal - Second and Third Telecommunications Projects

Document of The World Bank FOR OmCIAL USE ONLY Report No. 7757 PROJECT COMPLETION REPORT NEPAL SECOND AND THIRD TELECOMMUNICATIONS PROJECTS (CREDITS 397-NEP AND 799-NEP) APRIL 28, 1989 Industry and Energy Operations Livision Country Department I Asia Regional Office Tbis document bas a restricted distribution and may be used by recipients only in the performance of S * * i- , , . II. , .I  CURRENCY UNIT Napalese Rupee GOVERNMENT OF NEPAL FISCAL YEAR July 16 to July 15 ABBREVIATIONS AND ACRONYMS AMA - Automatic Message Accounting ANI - Automatic Number Identification DCA - Development Credit Agreement DEL - Direct Exchange Lines HMG/N - His Majesty's Government of Nepal IDA - International Development Association ICB - International Competitive Bidding ITU - International Telecommunication Union JICA - Japanese International Cooperating Agency HOC - Ministry of Communications NTB - Nepal Telecommunications Board NTC - Nepal Telecommunications Corporation ODA - Overseas Development Age--y of United Kingdom PA - Project Agreement STD - Subscriber Trunk Dialing UHF - Ultra High Frequency UNDP - United Nations Development Program UK - UWited Kingdom VHF - Very High Frequency  01% WORLO BANK VOR OFFICIAL USR OLY TeK WORLD SANK WmCmgtoa. D.C. 20433 U.S.A. ode of h00G41 opmeim [VA~UU April 28, 1989 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Nepal Second and Third Telecommunications Projects (Credits 397-NEP and 799-NEP) Attached, for information, is a copy of a report entitled "Project Completion Report on Nepal - Second and Third Telecommunications Projects (Credits 397-NEP and 799-NEP)l prepared by the Industry and Energy Operations Division, Country Department I, Asia Regional Office. Attachment This document bza reti disrbutin and may be sed by recipnts o * the peifoman of their officia dutiW& Its contnts may not othrwiso be disau without Wor Dak cuthumA.  FOR OMCIAL USE ONLY NEPAL SECOND AND THIRD TELECOMMUNICATIONS PROJECTS CREDITS 397-NEP & 799-NEP PROJECT COMPLETION REPORT Table of Contents Page No. BASIC DATA SHEET Credit 397-NEP ............ . ii Credit 799-NEP ............ iii HIGLIGHTS ...i.e..gg..eeegeg..e...g..g.e.....g........eo.. iv I* INTRODUCTION ......e.g........e.......... 1 Telecommunications Sector I................e...... 1 IDAtS Involvement in the Sector ........................... 1 II. PROJECT PREPARATION AND APPRAISAL. .......... ..... cc....... 2 A. Second Telecommunications Project Preparation, Apprsisal and Credit Approval ..eeeo.og.e.eeeg 2 Project Objectives .........2....... 2 Project Description ............................. .. - 2 Project Costs and Financing ............................... 3 Covenants eec ...... ......o.. g..eecggc. e.g.. 3 B. Third Telecommunications Project Preparation, Appraisal and Credit Approval .c........e. 4 Project Objectives .. ...................................... 4 Project Description 4....................................... 4 Project Costs and Financing ............................... 5 Covenants ceo...co...e.g..g. cc.........OO..0cc gOOOOOOe c....ccc... 5 This report was prepared by Messrs. J. Miyazaki, Financial Analyst, and D. Joshi, Consultant, of the Asia Technical Department based on information supplied by the Nepal Telecommunications Corporation to an IDA mission in February 1988 and data gathered from the Bank's files and records. 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 authorinzatior.  Page No. III. PROJECT IMPLEMENTATION ............... ........................ 6 A. Second Telecommunications Project Credit Effectiveness and Start-up ..... .................... 6 Revision of .................P. ..................... ... ..... 6 Implementation Schedule 7..................... 7 Project Costs *...... ......................... ...... 7 Disbursements 8 Credit Allocation 9 Reporting 10 Procurement 10 Performance of Consultants, Contractors and Suppliers ..... 12 B. Third Telecommunications Project Credit Effectiveness and Start-up 12 Revision of P. o j e c t 12 Implementation Schedule 12 Project Costs .. 13 Disbursements 14 Credit Allocation 15 Reporting 16 Procurement 17 Performance of Consultants, Contractors and Suppliers 17 IV. OPERATING PERFORMANCE ........................ 18 V. FINANCIAL PERFORMANCE.*................... .* .** 19 Financial Performance . ......... -..................-. -- 19 Financial Position *....* *.**.**@@@-......-.......-.- 20 Sources and Uses of Funds ............................. 21 Fiscal Impact ............................. < 21 VI. INSTITUTIONAL PERFORMANCE ................. .. ..6060 21 Organization and Management .........-.e..-...--...---.--.-- 21 Staff, Recruitment and Training .............................. 22 Accounting ................................................... 23 Audit ..........0.. ............. .................... 24 Billing and Collection ....................................... 24 Tariffs ...................................................... 25 Compliance with Covenants .................................... 25 VII. PROJECT JUSTIFICATION .............. 25 Project Achievements ....025 Project Spin-off 0.0 26 Least Cost Solution . 26 Return on Investments 000000000 6600600060006000000600006000000 26 VIII. IDA'S PERFORMANCE...................... ........... 27 Overall Performance .......................................... 27  Pase No. Supervision .............. .... .......................e.... 28 Working Relationship ....................... 28 IX. CONCLUSIONS .............e..e ....... ......eeee 28 ANNEXES 1. Physical Installation...................... .... ..g..... 30 2. Local Exchange Installations................................ 31 3. Project Costs...... ............... ...................... 32 4. Schedule of Credit Disbursements ............................ 33 5. Credit Allocations and Disbursements........................ 34 6. Key Performance Indicatorso.................................. 35 7. Estimated and Actual Income Statements: 1973-87............ 36 8. Estimated and Actual Balance Sheets: 1973-87............... 38 9. Estimated and Actual Funds Flow Statemeits: 1973-87........ 40 10. Employees and Productivity......... ......... ................ 42 11. Summary of Basic Telecommunications Tariffs................. 43 12. Compliance with Covenants...........e.......................... 44 13. Return on Investments....................................... 45  NEPAL SECOND AND THIRD TELECOMMUNICATIONS PROJECTS CRD ITS 397-NEP & 799-NEP PROJECT COMPLETION REPORT Preface 1. This is a combined Project Completion Report for the Second and Third Telecommunications Projects which were supported by IDA Credits 397- NEP and 799-NEP respectively. The basic data relating to the two credits are as follows: Credit 397-NEP Credit 799-NEP Borrower His Majesty's Government of Nepal (HMG/N) Beneficiary Nepal Telecommunications Board/ Corporation (NTB/NTC) Amount US$ 5.5 million US$ 14.5 million Approval Date March 16, 1973 May 11, 1978 Agreement Date June 26, 1973 August 22, 1978 Effectiveness Date September 20, 1973 February 27, 1979 Closing Date Original June 30, 1980 June 30, 1984 Actual December 31, 1982 June 30, 1985 2. This report was prepared by the Asia Technical Department based on the information supplied by NTC co an IDA mission in February 1988 and data gathered from IDA files and other relevant reports. 3. In accordance with the revised procedures for project performance audit reporting, this Project Completion Report was read by the Operations Evaluation Department (OED), but the project was not audited by OED staff. 4. Following standard procedures, OED sent copies of the draft report to the Borrower and the Executing Agency for their comments; however, no comments were received.  - il - PROJECT COKPLtION REPORT BAStC DATA SOHPT NEPAL, SECOND TKLKOCOP4UtNICATIONS PltJECI (CttDlT 397-Nip) xIEY PROJECT DATA Appralqftl k,-t at nt tte xpectation current estimate total Projeet Cost (0I55 Itliton) 7.8t 7.RO Overrun (t) _ (n1) Loan/Credit A_out (USS mtilton) 5.50 5.50 Otebrd )-5 Cancelled ) Repaid to _ Outetandins to ) Cate Physical Coeonents Copetetd 172t679 t2131/83 Proportion Completed by Above oate (2) 20t Proportion of Tim Underrun or Overrun (2) 80X Economic 4ate of Return (2) _ t8 __ 13 /a Financtal PerfOInce Satfactory Satiteactory Institutionat Perforsnce Satisfactory OTHER PROJECT OATA Ortgtnat Actuat or ttm Plan Rvwtsions Est. Actual First lXntton tn Ftles ot Ttetbte t / I / 02/11/t2 Goverrmnt's Applicetion N0 /73 Negotiations 03/16773 Board Approval 04/Z613 toan/Credtt ABreemsnt Date i -7 06/20i73 Effectivenese Doate /I 7 09/1/ Closing DOat O6/30/80 12!31/82 aornrew His slestv s Govevrment of t1el Executingt AgeB y 3epal TalQcoMangcans Cororation (N=TC) Fiscal YTet of Borrower July t6 -July 15 Follow-on Project Name Third Telecommuntc4tions Prolect Loan/Credit Nuabur Credit 799-NE? Aiount (USS .1111ov) 14.50 Lean/Credit Agreemnt Date 08/22/18 tlSSt1N DATA no. of No. of Date of Item Month. Tsar Days Persons Han-eka Report tdatifitea-ioe Preparation PreappraLeal,60 ~ U7 Appraisal tO/720 O Total 21 6.0 Supervtsion I 7 A 1.0 04/25/74 Supervtoson Et 061 7 i .4 0 0912/74 Supervcsion tt 075. 07124/75 Superviston IV 3 1 0.4 Ti; Sup.cwtdion V _12 Supervsteion Vt o576 7 1.0 06/11/16 Supervision Vit 7 1 1.0 O1/1l/77 Supervteton VIII 11/77 7 tt1.0 ;7 Superviston t? 12/78 3 2 01103179 Supersiica Ix /b 10793 2 0.9 O1/ 1 0 uprvtstion Xt 0 9 180 Y I 0. 7 so Supeielon KIXtl 04181 2 0.9 04 Suprvitston Xltt 1t t 0.4 Supervtion XIV . 3 0.9 01 /7/82 aupetviaon X 07tS_2 202T7 Supeevistom XVI 1082 1 0.2 10282 Supervision iv:t 12/82 T 2 superviston xVttt 04/63 3 t 0.4 Supbtete XU _ _ 4 2 t .2 _8228 Superviesio XII -69m____ Supervision XI 10/8 2 0.6 10/18/ Supervision Xlt 06/84 1 106Ti Superviston tXII 02/85 1 0.2/14/65 Supervtitsn XXIttl 10/7S 4 * 1IQ/1/S5 Completion 072f/ _2 _1 0.7_ Total 17. COURT BXCAtUIA;C RAAtS Mans of Curreny (ebbrevietton) Iuooe(es R Aptrtell Tear AvTas ES Pxchange Rats: USSt t Inteing Ter Averag n Y r 197463 USS1 b N o Complewti peaiU US$198. W SI* 15.20 j. Coebind with the Third Project due to twe diffitculty in seperating the economic banattt Of the twe b projects. lb Miesione in