Papua New Guinea - Upper Ramu Hydroelectric Development Project

RESTRICTED Report No. PU-60a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE FIRST PHASE OF THE UPPER RAMU HYDROELECTRIC DEVELOPMENT ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA TERRITORY OF PAPUA AND NEW GUINEA March 26, 1971 Public Utilities Projects Department  Currency Equivalents US$1 = $A 0.89 $A 1 - US$1.12 $A 1,000,000 = US$1,120,000 Weights and Measures Equivalents kW = kilowatt MW - Megawatt (1,000 kW) kWh = kilowatt hour SWh -Megawatt hour (1,000 kWh) GWh - Gigawatt hour (1 million kWh) kV = kilo volt (1,000 volt) Acroryw and Abbreviations CCt4CNWEALTH - Commonwealth of Australia TERRITCRY - Territory of Papua and New Guinea ADMINISTRATICN - Administration of the Territory of Papua and New Guinea EIC0M - Electricity Connission of FPpua and New Guinea CCWCURKS - ComnDnwealth Department of Works AEC - Administrator's Executive Council SMI - Snowy Mountains Authority EICOM's Financial Year - July 1 - June 30  TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMSSION OF PAPUA AND NEW GUINEA APPRAISA.l OF THE FIRST PHASE OF THE UPPER RAMU HYDROELECTRIC DEVELOir!NT TABLE OF CONTENTS Page No. S'JM%AR AND CONCLUSIONS i 1. INTRODUCTION 1 2. THE ECONOiMY AND THE PCWER SECTOR 3 The Territory and its Economy 3 Ernrgy Resources 3 The PowTer Sector 4 3. THE BORROWER AND THE BEN7EFICIARY 5 ELCOM's X-3aagement and Organization 5 Existing Facilities 6 4. THE POWER NARKET 7 5. FUTURE DEVELORET OF ELCOM1S FACILITIES 8 Port Yoresby Area 8 Upper Ramu Area 8 Other Investment 9 Development Costs 1970/71-1977/78 9 6. JUSTIFICATION OF THE PROJECT 10 Load Growth 10 Economic Comparison of Alternatives 10 7. THE PROJECT 11 Cost Estimate 11 Procurement and Disbursement 12 Construction Schedule 13 Consultants 13 Ecological Aspects 13 Internal Financial Rate of Return of the Project 13 This report was prepared by Messrs. E. A. Minnig, T. B. Russell and F. Rydell.  Page No. 8 FINANCIAL ASPECTS 14 Past Record and Present Position 14 Auditing 16 Accounting 16 Insurance 17 Financing Plan 17 Financial Forecasts 19 9. RECOYMIENDATIONS 20  LIST CF ANNEXES 1. Energy Production per Capita in Relation to Gross National Product per Capita for Selected Countries 2. Organization Chart 3. Power Plants as Installed June 30, 1970 4. Overhead Line Statistics 1969/70 5. Supply Point Transformer Statistics 1969/70 60 Distribution Substation Statistics L969/70 7. Table: Actual Generation, Sales, Maximum Demand 1963/64-1969/70 8. Consurier Statistics 1965/66-1969/70 9. Table: Actual Sales & Revenues per Tariff Classification 1963/64-1969/70 10. Table: Forecast Generation, Sales, N.axinxum Demand 1970/71-1977/78 11. Table: Forecast Sales & Revenues per Tariff Classification 1970/71-1977/78 12. Economic Trends and Prospects in the Area to be served by the Upper Ramu Project 13. Alternative Projection of Electricity Generation in the Upper Ramu Service Area 14. Diagram: Generation, Sales, Maximum Demand 1963/64-1977/78 ELCOI 15. Diagram: Generation, Sales, I4aximum Demand, Installed Capacity 1963/64-1977/78 Upper Ramu Service Area 160 Plan and Section Upper Ramu No. 1 and No. 2 Project 17. Layout and Profile Upper Ramu No. 1 Project 18. Economic Comparison of the Proposed Project with Alternatives 19. Principal Data Upper Ramu No. 1 20. Hydrology 21. Geology 22. Cost Estimate  -2- 23. Disbursement Schedule 24. Principal Dates 25. Monthly Tariff Schedules 26. Actual and Estimated Income Statements 1965/66-1977/78 27. Actual and Estimated Balance Sheets 1965/66-1977/78 28. Estimated Source and Application of Funds Statement 1970/71-1977/78 29. Estimated Interest Schedule 1970/71-1977/78 30. Estimated Amortization Schedule 1970/71-1977/78 ltAP  TERRIrORY CF PAPUA AND NEW GUINEA ELECTRICITY CO4IWSSION OF PAFUA AND NEW GUINEA APPRAISAL OF THE FIRST PHASE CF THE UPPER RAJU1U HYDROELECTRIC DEVELOPMENT SUMMARY AND CONCLUSICNS i. This report appraises the first phase of the Upper Ramu No. 1 hydroelectric scheme in New Guinea, needed to meet a growing demand for power. Installed capacity will be 45 nil in three units. The project will be constructed by the Electricity Comission of Papua and New Guinea (ELCOM) between 1971 and l975. About 300 miles of transmission lines will be built as part of the project linking the power station to several ex- isting local networks which would be unified. The new underground power station, operated as a run-of-the-river plant, will be the main source of power for this system. The second phase of Upper Ramu No. 1 envisages construction of a dam to regulate run-off and the installation of two more 15 MI units. A further development of 180 1NJ (Upper Ramu No. 2) is also possible and would also benefit from the storage already provided. The total cost of the project (i.e. Upper Ramu No. 1, phase 1) is estimated to be US$3309 million equivalent. Costs to be incurred outside the Territory of Papua and New Guinea are estimated to be US$23.2 million equivalent. ii. A Bank loan of US$23.2 million equivalent to meet the off-shore costs has been requested by the Commonwealth of Australia (Guarantor), on behalf of the Territory of Papua and Newi Guinea (Borrower) which the Commonwealth administers. This loan would be the first to the Territory for power0 iii. ELCOM, which would be the beneficiary of the loan, was established in 1963 as a statutory corporation and has adequate powers to conduct its affairs in accordance with sound public utility practice. On matters of policy, however, it must follow directions given by the Commonwealth Ymn- ister of External Territories or the Territory Administration. The Ter- ritory is moving rapidly towards self-government, when ELCOM would be directly responsible to the new Government. iv. The Territoryts economy is based essentially on primary pro.- duction and is showing healthy growth, particularly in the monetized sector, with corresponding growth in the demand for power. In 1968/69, GNP was US$217 per capita; energy generation was 83 kWh per capita (based on a population of 2.4 million), which is consistent with the level of development. The monetized sector of the economy has been growing by 12% annually since 1965/66 and accounts for 60% of the GNPo Industrial output has grown at 15% per annum over the same period, accounting for 16% of GNP in 1968/69. In the five years 1963/64-1967/68 ELCOM's investments represented about 3.3% of national investments and its current five-year program foresees investments representing 3.8%. v. EICOM presently supplies power to nine centers of population in the Territory. Three of these centers will be served by the project. ELCCMT is also responsible for the operation and maintenance of generating  -ii- and distribution facilities at 124 centers owned by the Administration. Three of these centers will be transferred to EICOM and incorporated in the system based on the project. vi. ELCOI4I's sales of energy have ilnereased by about 21% per year on average over the past six years and a similar rate of growth is ex- pected until 1977/78. A higher rate of growth of about 25% is, however, expected in the area served by the project, the output of which will be fully utilized in 1977/78. vii. Although demand for power is growing rapidly in the project area, total demand is still small in relation to the potential offered by the various hydroelectric sites. Accordingly, the Ramu development has been divided into stages, and the project is the least-cost means of supplying the forecast demand. The rate of retu,rn on the extra capi- tal required for the project compared with the cheapest thermal alter- natives has an average expected value of 18%. viii. ELCOMi's management is able, and its staff is competent. ELCOM has had a trainiing program in operation since 1963, and it is expected that by 1977/78, the proportion of expatriates on its staff (at present 42%) will be reduced to 5%. Its future financial position is in general satisfactory. A tariff increase to produce 5% higher revenues became effective January 1, 1971. The rate of return on its net fixed assets in operation is forecast to improve from 4h7% in 1969/70 to 12.8% by 1977/78. The internal financial rate of return on the project is over 17%. ix. Procurement, except consulting services, would be on the basis of international competitive bidding in accordance with the Bank's Guide- lines. x. The proposed project would be a suitable basis for a Bank loan of US$23.2 million equivalent for a period of 25 years, including a period of grace of five years,  TERNITORY OF PAPJA AND NEW GUINEA ELECTRICITY COliMISSION CF PAPUA AND NEW GUINEA APPRAISAL OF TIlE FIRST PHASE CF THE UPPER RAM HYDROELECTRIC DEVELOPMENT 1. IMTRODUCTION 1.01 The Goverrment of the Commonwealth of Australia (the Common- wealth) on behalf of the Territory of Papua and New Guinea (the Ter- ritory) and the Electricity Commission of Papua and New Guinea (ELCOM) has requested a Bank loan to finance the off-shore costs of the first phase of the Upper Ramu No. 1 underground hydroelectric development which it is planned to commission by mid-1975 with an installed capacity of 45 ivW. 1.02 Under the UN1 Trusteeship Agreement (New Guinea) and the Com- monwealth's Papua and New Guinea Act, the Commonwealth is responsible for governing and developing the Territory. An Administrator appointed by the Governor-General of the Commonwealth administers the Territory but the Territory has its own legislature (House of Assembly) consisting of 84 elected members and 10 official memrbers, which may make ordinances to be presented to the Administrator for assent. The Administrator's Executive Council (AEC) is also an important organ of government, and the Administrator must accept its advice on specified matters which cover a considerable area. It consists of seven ministerial office-holders appointed from the House of Assembly, three official and one elected member, and the Administrator himself. The ministerial office-holders have full authority in certain specified matters subject only to the AEC. A considerable step towards self-government has therefore already been taken and the Commonwealth has indicated that the future of the Territory is self-government and ultimately independence. 1.03 The present constitutional relationship between the Common- wealth and the Territory is an interim one. Within the executive Gov- ernment of the Territory there are a number of Authorities for which the Commonwealth remains directly responsible. One such Authority is ELCOM. Although established under Territory Ordinance, ELCON is required to carry out directions given to it by the Commonwealth Mjinister of External Territories or the Administrator on matters of policy relating to the performance of its functions, duties, and powers. Under self-government ELCOM would become responsible to the Government of Papua and New Guinea. 1.04 ELCOM was established as a Statutory Corporation on July 1, 1963, wrhen it took over the functions of the Administration's Electrical Undertaking Branch. On establishment, nine electric supply systems, each serving a center of population, were transferred to EICONI and it assumed full responsibility for them. The Ordinance also requires ELCOM to operate and maintain generating and distribution facilities at other centers (i.e. small settlements; there are 124 of them at present) owned by the Admnin- istration, with funds provided by the Administration. In time such cen- ters could be transferred to ELCOI4, if transfer does not impose a financial burden on ELCOM.  - 2 - 1.05 The project for which Bank assistance has been requested is phase I of the Ramu No. 1 scheme. It consists of an underground power station, operated as a run-of-the-river plant with three 15 Ml units, plus transmission facilities to Lae, Madang, Gorolka and lit. Hagen (see Map). Fhase 2 of the scheme consists of the construction of a dam on the river to form a reservoir, and the installation of two more 15 MW units. Until the commissioning of phase 2 in 1979 existing diesel- electric generating capacity at Lae and Madang would serve as standby, and would be utilized for peaking purposes and during periods of low flow in the Ramu River. Afterwards the diesel units would be transferred to other centers, 1.06 The project requires an estimated invest.ent of US$33.9 million, of which the proposed loan of US$23.2 million would cover off-shore costs; US$10.7 million would be local costs. 1.07 In addition to the places mentioned above, the project would serve Kundiawa and Kainantu which lie on the route of the transmission lines. Demand in all these places totalled 9.2 MV in 1969/70 and is expected to be about 55 Ml by 1977/78 assuming an increase of about 25% annually on average which is the rate of increase experienced over the past six years. The area has a great potential for economic development. The project would replace decentralized, costly, diesel generation. 1.08 The project was first presented to the Bank early in 1967 but was considered premature because of the small demand in the early 1970s. A preappraisal was carried out in July 1969, but an appraisal report was deferred because disbursements would not be required until early in 1971. In the interim period tender documents and specifications have been pre- pared in accordance with the Bank's Guidelines and an appraisal was carried out in October 1970. 1.09 This report was prepared by Messrs. E. A. Minnig (Power Engineer); T. B. Russell (Economist); and F. Rydell (Financial Analyst) from infor- mation prepared by ELCCO's consultants, and during field appraisals in July 1969 and October 1970.  - 3 - 2. THE EC CONY AND THE POWLt SECTOR The Territory and its Economy 2.01 The Territory of Papua and New Guinea extcends over 800,000 sq mi of tropical seas north of Australia. The eastern half of New Guinea and the three largest islands - New Britain, New Ireland and Bougainville - comprise most of the land surface of 180,000 sq mi. It is an area of unusual diversity with extremely rugged mountain ranges, wide valleys, large river systems, extensive jungles and vast swamps. 2.02 Population at mid-1970 was estimated at 2Q4 million, including about 49,000 non-indigenous. The growth rate since the last census (1966) has been about 2.6% per annum overall, but the non-indigenous population - because of immigration attracted by economic prospects - has been growing at 9% per annum. Average population is only 13 to the sq mi but ranges from 1.5 to 60 according to district. The indigenous population is overwihelmingly rural. The largest towns are the capital, Port Moresby, with a population in the neighborhood of 50,000, and Lae of 24,000. 2,03 The econcmy is based es3entially on primary production. GNP in 1968/69 was Us$512 millioni, equivalent to US$217 per capita, and the average annual growth rate since 1965/66 has been 6.3%. There is still a large subsistence sector, which supports the great majority of the indige- nous population. The monetized sector has been growiing much more rapidly (over 12% annually since 1965-66) and accounts for around 60% of GNP. It is based largely on plantation crops for export and on Government oper- ations and services. Industrial output has been growing at about 15% per annum; it accounted for 16% of GNP in 1968/69. GNP is projected to grow at 5-6% per annum2/ under the current development program (1968/69 to 1972/73) and the monetized sector at 10%2/ These growth rates are esti- mates made by the Bank's 1969 Economic 14ission. Energy Resources 2e04 A recent survey indicated a vast hydro potential of some 6,000- 8,000 ZJ at sites capable of producing 300 MV or more. Less than 1% of the hydro potential is now being exploited. Most of the sites are too large for development at present. There are no known economic deposits of coal. Prospects for oil and gas of commercial value are considered favorable following an off-shore gas strike in the Gulf of Papua. Fuel oil has to be imported at present. Fuel imports in 1968/69 were about 100,000 tons, of which ELCCI4's share for electricity generation was about 8.5%. 1/ Preliminary Government estimate. 2/ These projections may have to be increased in view of much higher growth rates reported for 1969/70.  -4- The Po'lTer Sector 2,05 Virtually all power facilities were destroyed during WJorld lWar II. The Commonwealth Department of 1Uiorks (CCMWORKS) was made responsible for reconstruction. In 1957 the 'Administration took over this respon- sibility by creating the Electrical Undertaking Branch. On July 1, 1963 ELCOM was established and assumed full responsibility for nine centers. It also provides the Administration wiith services at 124 other centers owned by the Administration. 2.06 The nine centers served by ELCOO and their populations ac- cording to the last census (July 1966) are as follows: Port Moresby (41,848), Iae (16,5i56), Rabaul (10,561), WTewak (8,945), IMadang (8,837), Goroka (4,826), Swaarai (2,201), Kavieng (2,142), and Kokopo (537), The location of these centers together with the Administration centers are shownn on the attached Map. 2.07 Outside the centers served by ELCOM or the Administration, private generating equipment is generally installed by missions and plantations. The largest private generating facility is owned by Placer Development Ltd., a mining company wihich has vtrtually ceased operations and nowa sells about twio-thirds of the power generated at its plant to ELCOON for distribution in lae. 2.08 As of June 30, 1970 installed capacity and generation in the Territory were as followJs: Annual Installed Capacity kW Generation % of Total I{ydro Diesel Total Glh Generation ELCOM 35.9 18.0 53.9 13h.7 67.3 Administration - 6.1 6.1 19.0 9.5 Placer Development Ltd. 5.5 - 5.5 3508 18.0 Other Private - 3.5 3.5 10.5 5.2 TOTAL 41.4 27.6 69.0 200.0 100.0 25,7 GWh was sold to ELCOII by Placer Development Ltd., so ELCOM's share of power generated or purchased for distribution amounted to about 80% of the total. Per capita generation was about 83 kWh. 2.09 In the five years 1963/64-1967/68 ELCOM invested $A 14.4 mil- lion (US$16.1 million), which wzas 3.3% of national investment in the monetized sector in the period. Its investment program for 1968/69- 1972/73 calls for $A 31.5 million (US$35.3 million), which is 3.8% of total projected investment in the monetized sector in this period. 2.10 The relationship between per capita power production and per capita GNP is consistent iTth world trends as shown in the diagram, Annex 1. If the more recent figures from this report (paragrarhs 2e03 and 2.08 above) are plotted on this diagram the world trend is still closely followed.  3. THE BORRCWER AND THE BENEFICIARY 3.01 The Borrower would be the Administration of the Territory of Papua and New Guinea, the Guarantor the Commonwealth of Australia, and the Beneficiary the Electricity Commission of Papua and New Guinea (ELCOM). A Guarantee Agreement would be entered into between the Bank and the Common- wealth, a Loan Agreement between the Bank and the Territory Administration, a Project Agreement between the Bank and ELCOM, and a Subsidiary Loan Agreement between the Territory Administration and ELCOM. 3.02 Lending direct to ELGOM would rnot only exclude any direct in- volvement of the owner of ELCOM (i.e. the Territory) but also the Ter- ritory's future Government. Since ELCOM's autonomy is limited as explained in paragraph 1.03, and since ELCOM must also submit by-laws governing tariffs, terms and conditions of supply, regulations and licences to the Administrator for his approval, it is necessary that the Administration also should have responsibility for the loan. 3.03 There is yet another reason for the arrangement explained in paragraph 3.01. The various Ordinances governing the use of water in the Territory for agriculture, forestry, mining, conservation, water supply and power generation are in apparent conflict. The Local Government Ordi- nance, for instance, reserves the right of a Council to supply light and power within its area, without reference to ELCOM. ELCOM, therefore, has no adequate powers to ensure that hydroelectric developments will be oper- ated, planned or built to achieve maximum advantage for the whole economy. Both the Commonwealth and the Territory are reluctant to make changes when the Territory is moving rapidly to self-government. They consider that changes should be made by an elected Government. 300 Apparent conflicts can best be avoided by lending directly to the Territory Administration and entering into a Project Agreement with EBCOM. To safeguard ELCOM's interest it is nevertheless considered essential that the Guarantee and Loan Agreement should contain covenents stating that the Territory Administration, or its successor, should consult with the Bank prior to enacting any legislation affecting EBCOM, its future operations, duties, functions, and powers. Because of legislative difficulties this was not possible. In lieu of this a default condition was negotiated whereby the Bank could suspend or cancel the loan should legislation be enacted which would materially and adversely affect ELCOM. ELCOM's Management and Organization 3.05 ELCOM is governed by a Commissioner (full-time) and four Associate Commissioners (part-time) appointed by the Commonwealth Minister of External Territories on the recommendation of the Administrator. Officers of the Commission are appointed by the Commissioners and their terms and conditions of employment are determined by the Minister. 3.o6 The Commissioner is due to retire on June 4, 1971. He is both chairman of the commission and EBCOM's general manager. Steps have been taken to recruit a successor. It is considered desirable that a general manager responsible for day-to-day operations be appointed at an early date, thus freeing the Commissioner to concentrate on development and general matters  -6- of policy. Steps have already been taken to reorganize top management and three assistant general managers have been appointed responsible for finance and administration, marketing, and engineering respectively. Assurances were obtained that EICOM will consult with the Bank on new appointments to the positions of general manager and assistant general managers (finance and administration, and engineering). Annex 2 shows ELCOM's proposed organizational structure which is sat-sfactory. Senior staff are cormpetent. 3.07 ELCOM's establishment increased from a total of 779 as of June 30, 1967 to 1,313 as of June 30, 1970 of which 335 were expatriates and 978 were from the Territory. Included in this total were 508 trainees and apprentices. Thus trained staff in service totals 805, giving a ratio of one employee per 20 consumers. Given ELCOM's area of operations this number is not excessive, but economies can be achieved. ELCOM has now engaged the services of the State Electricity Commissicn of Victoria to review organization and methods. As a first step it is hoped to eliminate some expatriate staff posts and some expatriates will be replaced by local officers. During negotiations confirmation was obtained that ELCOM would proceed with this policy. 3.08 In 1969/70 ELCOM spent about US$750,000 on training and education. Since February 1967 a training center has offered courses for technicians. With the help of its training program ELCOM expects to reduce the propor- tion of expatriates on its staff from 42% (the present proportion) to 5% by 1977/78. The training program is considered to be overly ambitious for ELCOM's needs after 1977/78. It is also questionable whether ELCOM should finance all training costs estimated at about $A 460,000 per annum from 1972 onwards since after completion of their course some trainees find employment in the private sector and others in Administration centers. 3.09 The future of the training center will be reviewed when the State Electricity Commission of Victoria's study of ELCOM's organization and methods (paragraph 3.07) has been completed. The Administration has agreed to give ELCOM an annual subsidy of $A 90,000 to ease the financial burden of training for reasons outlined above. During negotiations confirmation was obtained that (a) ELCOM will review by December 31, 1971, future man- power requirements and intake of trainees; and (b) the Administration will provide ELCOM annually up to and including fiscal 1978 an annual subsidy of not less than $A 90,000 for training. Existing Facilities 3.10 To serve the nine centers for which it is directly responsible ELCOM had available at June 30, 1970 a total of 53.9 W of generating equipment to serve a demand of 32.0 MW, Of this capacity 35.9 MS was hydro and 18.0 MW diesel. Annex 3 lists the individual power plants. 3.11 Annex 4 lists ELCOM's transmission and distribution facilities by center and voltage. Supply point transformer statistics are given in Annex 5. Annex 6 gives a list of distribution substations. Both supply point and distribution transformer facilities are adequate.  - 7 - 4. THE PCWER MARKET 4 01 Principal statistics for the years 1963/64 and 1969/70 and aver- ages for the period as a whole are listed below to show the growth of ELC0iqVs service, The detailed figures are given in Annexes 7, 8 and 9. Growvth was from a small starting base, and it reflects correspondingly rapid expansion of the monetized sector of the economy. Potential demand is understated because there was some shedding or restriction of load, especially at Port Moresby, in the latter part of this period. ELOCK-'s Electrciy Sales and Related Data in 1963 4 and 1969770 1963/64 1969/70 Electricity Sales GWh 47 144 Annual system load factor % 50 57 Proportion of sales! domestic % 48 26 commercial and industrial % 52 74 Annual rate of growth of sales % 21 Annual rate of growth of units generated % 19 Losses and auxiliary consumption as % of units generated 16 10 Proportion of sales in project area % 22 28 For sales in project area only: domestic % 50 27 commercial and industrial % 50 73 Annual rate of growth of sales in project area % 25 Annual rate of growth of units generated in project area % 25 Losses and auxiliary consumption in project area, as % of units generated 14 12 4.02 The increasing proportion of industrial sales has been a factor in the improvement of the annual system load factor. ELCOII has made a forecast of sales to 1977/78 and expects the same rate of growth in total sales of 21% to continue, but with little change in losses or system load factor (Annexes 10 and 11). The achievement of this rate is considered feasible in view of the prospects for economic growth and the assumption by ELCOM of responsibility for additional load centers. 4.03 The higher rate of growth of sales in the area to be served by the project reflects a lower starting base as well as the rapid pace of develoFment there. Continuation of the past average growth rate in sales of about 25% per annum is forecast by ELCOM up to 1977/78 (Annex 10). This forecast also seems feasible in the light of the excellent economic prospects of the area (Annex 12), and falls within the range of alternative projections made as a check (see paragraph 6.02 and Annex 13). Annexes 1l and 15 show in diagrammatic form generation, sales and maximun demand for EIC400 and for the project's service area.  - 8 - 5. FUTURE DEVELOPMENT OF ELCOMIS FACILITIES 5.01 ELCOM envisages a program of new works to ensure that the growing demand can be met. Its investigations have been carr-ied out in sufficient detail and the conclusions drawn are in general satisfactory. Port Moresby Area 5.02 ELCOM's consultants, COMCRKS, have investigated further hydro developments on the Laloki River to serve this area. As a first step they recommended raising the Sirinumu dam. Construction started late in 1969 and should be finished early in 1972. 5.03 As a second step COMUORKS recommended the construction of two further hydro plants, Rouna No. 3 (12 MFI) and Rouna No. h (9 Mu) for com- missioning late in 1974 and 1976 respectively. It is questionable whether Rouna No. 4 is justified in view of its high specific cost of $A 610kW. - Nevertheless it is included in the program subject to review at the appro- priate time. The potential of the Laloki River would be fully utilized if these two hydro plants were built. Developments on other rivers are being investigated (Vanapa, Angabunga, and IMusa) as further sources of power for Port Moresby, but they appear to be too large or too far awiay. ELCON is therefore investigating a 30 14W diesel station at Baruni near Port Moresby to meet demand after 1976. 5.04 Investments in generating facilities in the Fort Moresby area for the period 1970/71-1977/78 are estimated at about $A 18.7 million. Upper Ramu Area 5.05 COI4tJORKSt first reports on the Upper Ramu and a report on hy- drology prepared by the SnowTy Msountains Authority (SMA), were submitted to the Bank early in 1967; analysis showed that construction should be deferred at least for five years. The Bank recommended further geological and economic investigations since the potential of the Upper Ramu River could be developed in one stage of 276 MU (6 x 46 MUl) or in two stages, Ramu No. 1 and Ramu No. 2 of 75 MIW and 180 I&I respectively. A geological report prepared by the Bureau of Mineral Resources, Geology and Geophysics of the Commonwealth Department of National Development preceded reports prepared by C01VORKS in M4arch 1968 and by SMA in June 1968, Extensive exploratory drilling was carried out to locate the principal structures of the scheme. A final report prepared by CCI4WORKS in July 1969 reviewed economic aspects. 5.o6 The estimated cost of a single-stage development is about $A 88.0 million or $A 320/kW, and of a two-stage development $A 103.5 million or $A 405/kwl. Given the power market to be served which cannot be enlarged to include other areas because of the distances involved, COMUORKS concluded that a two-stage development is economically more attractive in terms of total costs on a discounted basis and that the smaller scheme should be built first. Further refinement of the analy- sis showed the economic advantage of retaining for standby and peaking  -9- purposes available diesel generating capacity at Iae and Madang to firm up Ramu No. 1 if initially constructed as a run-of-the-river plant. Thus construction of the dam estimated to cost $A 17.2 million to firm up out- put could be deferred until at least 1978/79. These conclusions are satis- factory and acceptable and the supporting investigations (geology, drilling) are adequate. Annex 16 shows a plan and profile of the two-stage develop- ment and Annex 17 a plan and profile of the Ramu No. 1 development. 5.07 Investments necessary in this area in the period 1970/71-1977/78 total about $A 56.2 million of which the project (Ramu No. 1 first-phase) would account for about $A 30.3 million. The second-phase (dam plus two additional 15 IST units) accounts for the remaining sum. Other Investment 5.08 About 32.4 IW of diesel generating equipment will be installed up to 1977/78 to serve the remaining areas as follows: 2.1 INr at Wewak; 8 111 at Rabaul; 0.5 W3J at Kavieng; 13.6 HI at Iae; 4.5 MW at Yadang; and 3.7 124 at Goroka. In addition a 0.2 III hydro set would be added to the existing plant at Goroka. New diesel sets at Lae, Tadang and Goroka during 1971-1974 are necessary to meet increases in load which will occur before the commissioning of the Project. 5.09 Investments in generating facilities in these centers for the period 1970/71-1977/78 are estimated at about $A 6.9 million. 5.10 Over the period 1970/71-1977/78 investments in transmission facilities, apart from the Upper Ramu area, and distribution expansion in all ELCOM1 centers would require $A 7.7 million. 5.11 Other construction would require investments of about $A 5.3 million. Development Costs 1970/71-1977/78 5.12 ELCCN's program requires investments as sumarized below: $A Million Port Moresby area 18.7 Upper Ramu No. 1 (Project) 30.3 Upper Ramu No. 1, Fhase 2 25.9 Generating Plant in other areas 6.9 Transmissionl/ & Distribution 7.7 Other Construction 5.3 ELCOM Overheads charged to Constructionl/ 9.6 TOTAL 10o4. Percentage of investment spent on Project 29% i/ Excludes the Project.  - 10 - 6. JUSTIFICATION OF THE PROJECT Load Growth 6.01 The project would supply six load centers in New Guinea at present not interconnected and supplied by independent diesel plants except for two small hydro units. ELCOM,I is already responsible for supply at lae and Madang (the main ports of New Guinea) and Goroka, the center of the coffee growing industry, and is due to assume responsibility for Yt. Hagen, Kundiawa and Kainantu. Total generation at the first three places nearly quadrupled between 1963/64 and 1969/70 (see Annex 7), 6.02 As al-eady indicated, ELCON expects growth of about 25% per annum on average over the next eight years in this area, although the rate is expected to decline to about 17% by 1978. As already stated (paragraph 4.03) the rate forecast seems reasonable but, as a check, three independent projections were made based on past relationships between electricity gen- eration, monetized GNP, industrial output and expatriate population in the Territory, and estimates of the future trends of the last three variables (Annex 13). These projections suggest average annual growth rates ranging from about 20% to 26%,s compared with the ELCON figure of 255%, and were taken into account in examining the economic justification of the project, as described below, Economic Comparison of Alternatives 6.03 COMIQORXS examined alternative ways of meeting the projected load growth. The least cost thermal alternative (in present worth terms) was determdned by a process of elimination. It proved to be a central steam station at Lae burning imported fuel oil. A similar procedure was followed for the hydro possibilities and indicated that the project was the least cost hydro development. Details are given in Annex 18. 6.o4 The project has higher capital costs but much lower running costs than the thermal plant at Lae. Comparison was based on the dis- counted cash flowJs of the two over a period of 50 years. To allow for uncertainties, probability analysis was used to establish the mean value and range of variation of the discount rate which equalized the present worths of the two alternatives, assuming three different values, with corresponding probabilities assigned to them, for each of the main vari- ables (future load growth, capital costs and oil price). The procedure is described in Annex 18 and the results sunmmarized below.: IMIean value of equalizing discount rate (R) 18% Standard deviation of (R) 2.5% Range of (R) (95% probability) 13-23% 6.05 On the assumptions adopted, there is less than a 3% probability that the equalizing discount rate would be below 13%. This is satisfactory, since the opportunity cost of capital in the Territory for low risk projects is believed to be below this figure.  7. THE PROJECT 7Q01 An explanation has already been given of the economic advantage of dividing hydroelectric exploitation of the Upper Ramu into two separate schemes, raferred to as No. 1 and No. 2, and of further subdividing No. 1 scheme into two phases of which phase 1 is the project appraised in this report. Fhase 1 would utilize the head made available by cutting across a bend in the Ramu River. An intake weir in the river would form a head- pond, from which water would be diverted down a concrete-lined shaft to the turbines in an underground machine haill Here the three 15 WI Francis- turbine-driv en generating units would be installed but the hall would be built with space for twTo more units. A surge chamber would be excavated immediately downstream from the machine hall, from which the tailrace tunnel, which would be about a mile and a half in length, would lead back to the river, The intake weir would have movable gates. A hoist house, control building, transformer compound and switchyard iwould be built on the surface close by. An access shaft for personnel and equipment would lead dowi to the machine hall. About 300 miles of 66/132 kV transmission lines would connect the project to the principal load cernters of Lae, Hadang, Goroka and It. Hagen. Principal data for the project are listed in Annex 19, and both No. 1 and No, 2 schemes are showrn on Annexes 16 and 17, where the project is shoan in red. 7.02 The headpond of the project would have storage sufficient to permit daily regulation of the flow. A firm capacity of about 22 MW gives an output of firm energy of about 135 GlJh annually; the total possible out- put of the project is estimated to be about 230 GEE, in a year of average rainfall. Thus with about 23 MN of diesel capacity retained for standby and peaking purposes, system firm capacity would total 45 PAJ. Annex 20 discusses hydrological aspects in more detail. 7.03 The exploratory drilling and geological investigations which have been carried out indicate that underground conditions should be favorable for construction, that little support will be needed, and that only very slight inflows of water will be experienced. Annex 21 discusses these matters in detai'l. 7.0o The region is, however, one of rather high seismicity. An earth- quake of intensity 9 on the Mercalli scale can be expected every 50 years. All engineering structures wrill be designed accordingly and, when phase 2 is built, it will be necessary to pay special attention to the stability of the dam. Cost Estimate 7.05 A detailed estimate given in Annex 22 is summarized belowi. An allowance of about 15% of the cost of underground works has been included for unknowm geological conditions and it has been assumed that 20Po of the tailrace tunnel (although designed as an unlined tunnel) will be fully lined. In addition there is a contingency allowyance for unestimated items of about 8% of estimated costs. An allowance of 5% per annun has been  -12- made to cover increases in labor costs and costs of imported equipment; it amounts to about 16% of the total cost without contingencies. The cost of the Rouna No. 2 hydro development was utilized as a basis for this estimate because of identical layouts and recent commissioning., If the contingency and price increase allowances are not utilized, or there are other savings, such savings would be cancelled. $A (thousands) US$ (thousands) % of Total Local Off-Shore Total Local Off-Shore Total Expenditure 1. Land 750 - 750 8ho - 8bo 3.1 2. Preliminary Works 1,160 300 1,460 1,285 335 1,620 5.9 3. Civil Works 3,200 6,340 9,540 3j560 7,090 l0,65o 39.0 . Electro- Mechanical Equipment 470 2,650 3,120 520 2,965 3,485 12.8 5. Transmission Lines and Substations 520 6,160 6,680 575 6,890 7,465 27.3 6. Consulting Fees and ELCOM Project Overheads 1,970 960 2,930 2,190 1,075 3,265 11.9 SUB-TOTAL 8,070 16,hlo 2h,480 8,970 18,355 27,325 100.0 7. Physical Con- tingencies 600 1,410 2,010 660 1,580 2,240 8.2 8. Price Increase 940 2,915 3,855 1,0o0 3,265 4,305 15.7 TOTAL 9,610 20,735 30,345 10,670 23,200 33,870 123.9 31l5% 68.5% 100% 31.5% 68.5% 100% The proposed Bank loan would cover the off-shore costs of the project amounting to US$23.2 million. Procurement and Disbursement 7.06 Procurement, except consulting services, would be on the basis of international competitive bidding in accordance with the BankTs Guide- lines dated August 1969. Specifications and tender documents are being prepared and some (electro-mechanical, preliminary works and main civil works) have already been approved by the Bank. Disbursements would be made only for the actual off-shore c.i.f. costs of equipment and materials and for the off-shore cost of civil works, installation, erection and consulting services as specified in the contracts. Australian manufacturers, contractors and consultants would be considered eligible for disbursements from the proposed loan. This has been the case with past loans to the Territory. A disbursement schedule is given in Annex 23.  - 13 - Construction Schedule 7.07 Tenders for the electro-mechanical equiprient have been reviewed cy the Bank and were issued in January 1971. Construction is estinated - to start in August 1971 and the first two units are scheduled for cormmis- sioning in June 1975 and the third unit in September 1975. The program is reasonable and the target dates should be achieved. Further details are given in Annex 24. Consultants 7.08 ELCOM has engaged the Australian Commonwealth Department of Works (COOWORKS) as its prime consultant, and Preece, Cardew and Rider (UK con- -- sultants) to expedite delivery and supervise manufacture of imported equip- ment. The terms and conditions of both contracts are satisfactory, During ne.xotiations asrsuxanceB were. _btain'ed&th,t CtOc-oud coi'tinife to eriploy consultants satisfactory to the Bank. Fcological Aspects 7.09 Rzsettlement. There are no villages in the area to be acquired for the project nor in the storage area of phase 2. Villagers have planted coffee along the river flats; relocation will not disrupt the economy of the area if carried out early. Iand required for the project is minimal and there are no competing claims for it. 7.10 Health. The Territory Department of Public Health has reviewed the health aspects of the Ramu scheme. The only serious apparent health hazard, in the Department's view, is malaria. With construction of the dam and resulting earth movement in phase 2, extensive breeding sites for mosquitos would be created unless protective measures are taken. During negotiations confirmation was obtained from the borrowrer ant1 the bene- ficiary that all measures -'ould be undertaken to eliminate this risk, and to protect the work force and surrounding population from any health hazard vihich would be introduced and/or enhanced by construction of the project. Confirmation wras obtained, that a conprehensi4e ecological study iTould oe undertaken by qualified experts satisfactory to the Bank, prior to the design stage of Ramu 1 phase 2 which involves a major water storage area, 7.11 Environment. No other adverse ecological impact is expected. The future storage area (phase 2) could become a public recreation area and may even have potential for development as a national park. Internal Financial Rate of Return of the Project 7.12 The internal financial rate of return of the project is defined as the discount rate which equates the present values of the project's capital and operating costs over its life, plus associated distribution costs, and the stream of revenues attributable to it. The internal fi- nancial rates of return are 17.5% for the whole project service area, 17.3% for the whole area excluding the lit. Hagen and Kundiawa parts of the project, and 23.0j% for the incremental investments and revenues at- tributable only to Mt. Hagen and Kundiawia.  - 14 - 8. FINANCIAL ASPECTS Past Record and Present Position 8.01 In its first year of operation, 1963/64) ELCCIY earned a 7.3% rate of return on its average net fixed assets in operation. (See para- graph 8.o4 for valuation of fixed assets.) During the next three years, 1964/65 through 1966/67, operation improved and the average annual rate of return increased to about 12.7%. Operating results deteriorated in the following three years and the annual rate of return declined to 8.4% in 1967/68, and to 4.7,% in 1968/69 and 1969/70. Revenues were based on tariffs each of which reflected the cost of service in its particular area. As shown in Annexes 9 and 11 the average revenue per kl1h sold is higher in the Upper Ramu area than other areas. This fact is attributed to smaller operating systems and lower load factors. The tariff schedule as of December 31, 1970, is shown in Annex 25. A detailed presentation of the operating results for the most recent five-year period is shown in Annex 26. 8.02 Four factors contributed to the decline in earnings during the last three years. They were: (i) Tariff reductions on July 1, 1968 in the Lae, Rabaul and HIadang areas to make charges more equitable to these con- sumers compared to consumer charges in other areas; (ii) a substantial increase in training costs; (iii) establishment of an appliance and repair center which ran at a loss; and (iv) an increase in personnel (see paragraph 3.07). 8.03 ELCOII's financial position at June 30 of each year from 1966 through 1970 is shown in Annex 27. The financial position at June 30, 1970 is summarized in the following condensed balance sheet.  -15- ASSETS Amount (million) USV $A Equivalent Fixed Assets Gross fixed assets in operation 26.3 29.4 Less reserve for depreciation 3.6 4.0 Net fixed assets in operation =-7 757 lWork in progress 2.2 205 Total fixed assets Z4.9 27c9 Long-Term Investments 2,1 2.3 Deferred Cnarges 0.3 0.3 Current Assets 2.2 205 Total Assets 79 7. EQUITY AND LIABILITIES Equity Earned surplus 0.9 1.0 Reserves 2.2 2.5 Total equity 7-1 775 Long-Term Debtl/ 23.9 26.7 Current Liabilities 0.8 0.9 Def erred Credits 0.9 1.0 Operating Reserves 0.8 09 Total Equity and Liabilities 793 330 1/ Includes $A 534,000 (US$598,080) long-term debt due within one year. 8.04 Included in the net fixed assets in operation are the original fixed assets, valued at $A 5.8 million, taken over by ELCOM from the Admin- istration (paragraph 1.04). These assets were valued on the basis of a comprehensive survey carried out by engineers and officers of the Electrical Undertakings Branch and the Treasury Department, and for the most part were valued at original cost less accumulated depreciation. This valuation is reasonable and acceptable. 8.05 In the Territory of Papua and New Guinea most land is classified as native land, public land, and to a much smaller extent, freehold land. Public land in private use is on a 99-year leasehold basis. At the time of the transfer of assets to ELCOM no valuation was assigned to land. It vas assumed that land and land/water rights associated with the transferred assets would be automatically vested with ELCOM. Furthermore, in some cases ELCOM did not acquire land or land/water rights when it subsequently expanded its power system. During the appraisal it was agreed that ELCOM would present to the Bank at the time of negotiations evidence satisfactory to the Bank that it has proper authority to use the land and water related to its operations. "his was not possible. Nevertheless confirmation was obtained during negotia- tions that the necessary steps to provide ELCOM with the proper authority were under way and the provisior. of satisfactory evidence made a condition of effectiveness. 8.o6 Long-term investments amounting to tA 2.1 million consist of the following: self-insurance sinkirng fund, $A 0.8 rdllion; administration loan  -16- sinking fund, $A 1.0 million; and a voluntary redemption sinking fund, $A 0.3 million which relates to debt incurred for the original assets trans- ferred to ELCOM from the Administration (paragraph 8.oh). Most of these sinking funds are invested in long-term securities of the Territory. 8.07 The current financial position, as reflected by a current ratio of 1.6/1.0 (including current maturities of long-term debt) appears satis- factory, but most of the current assets are tied up in stores inventory and receivables and a cash shortage existed at June 30, 1970. Cash on hand was only $A 9X000 and ELCOM was also carrying a $A 100,000 bank overdraft. The cash balance at the end of each of the last five years has never exceeded $A 11,000 and each year also showed bank overdrafts varying between $A 29,000 and $A 386,ooo. The year-ending overdrafts are required to meet the substan- tial debt service payments on Administration loans which are due on June 30 of each year. Past records show that ELCOM repaid these overdrafts promptly. 8.08 Since 1963, the Administration has provided funds to ELCOM in the form of long-term sinking fund loans. These loans mature after either 25 or 40 years, depending on the type of assets being financed. The legal instru- ment covering each such loan contains a clause in which ELCOM's total assets, both present and future, are pledged as security for the interest and repay- ment of principal. Another clause establishes precedence over all other funds subsequently borrowed by ELCOM, Therefore it was agreed that the proposed subsidiary loan, under which the Administration would relend the Bank funds to ELCOM, would rank pari passu with all existing Administration loans to ELCGM. 8.o9 ELCOM's equity consists only of accumulated earned surplus and several reserve accounts. Its past expansion was financed primarily by long- term loans. Therefore, ELCOM has always had a high debt/equity ratio, which is not unusual for government owned utilities. This ratio was 92/8 on June 30, 1966 and had reduced only slightly to 88/12 on June 30, 1970. Long-term debt included $A 5.8 million which is the liability for the assets originally trars- ferred to ELCOM from the Administration. The transfer agreement requires ELCOM to pay annual interest at the rate of 5% but repayment of principal is not required except as may be determined by the Minister of External Terri- tories. Because of its top-heavy debt structure and this potential demand liability of $A 5.8 million, ELCOM has requested the Administration's per- mission to convert this obligation from debt to equity. Assurances were ob- tained during negotiations that this conversion would become effective on or before July 1, 1971. Auditing 8.10 ELCOM has its own internal audit staff under the direction of a professionally qualified expatriate auditor. As required under Section 23 of the Electricity Commission Ordinance, ELCOIM is audited annually by the Auditor- General's Office of the Commonwealth. These auditing arrangements are satis- factory. During negotiations, assurances were obtained that ELCOM would cnn- tinue to employ auditors satisfactory to the Bank. Accounting 8.11 ELCOM has a capable accounting staff and employs a satisfactory accounting system. However, its financial statements do not conform to  - 17 - those usually found in public utility practice. An amendment to its by-laws made mandatory the detailed form of financial statements prescribed therein, This requirement does not permit any flexibility in the use of accounts and it is impossible to record unusual transactions properly without amending the by-laws. During negotiations assurances vere obtained that this amend-lrent 'Tould be canre1oA since the Ordinance already requires MIW't to maintain its accounts "in accordance with the accounting principles generally applied in commercial practice." Insurance 8.12 ELCCI4 practices self-insurance by charging operations annually with an amount estilmated to be equivalent to the insurance premiums that would have been paid if insurance policies had been in effect and by making annual deposits to an insurance sinking fund account. ELCOM intends to engage an insurance consultant to determine the adequacy of this plan, and if necessary to revise it. During negotiations, assurances assurances uiere obtained that such action would be undertaken. Financing Plan 8.13 A summary of the financial plan during the five-year period, 1971/72 through 1975/76, is shown below: Amount (million) US$ $A Equivalent % Funds Required Construction Costs Upper Ramu Project Construction expenditures 30.2 33.8 _ Interest charged to construction 3.8 4.3 - Total 3570 358,1 46.2 Other projects Construction expenditures 32.9 36.8 Interest charged to construction 1.6 1.8 Total T3. 38.6 46.9 1janor centers construction 0.4 0.5 0.6 Total construction costs 68.9 77.2 93.7 Increase in Net Working Capital 1.9 2.1 2.5 Other 2.8 3.1 3.8 Total Funds Required 736 82.4 100,0 Source of Funds Net Internal Cash Generation Internal cash generation 37.5 42.0 Less: Interest charged to operations 7.8 8.7 long-term debt amortization 1.5 1.7 Sinking fund requirements 2.7 3.0 Total deductions 12.0 Net internal cash generation 25 28 34.7 Borrozings 46.3 51.8 62.9 Other sources ar 2.0 2.4 Total Funds 73.6 82i7 1CO.0  - 18 - 8.14 Net internal cash generation, estimated at about $A 25.5 million, or about 35% of the total fund requirement, is a reasonable contribution on the part of ELCOM towards financing its expansion program. To generate t1lese funds ELCOM introduced a 5% tariff increase effective on January 1, 1971. 8.15 The proposed borrowiing would be as follows: Amount ($A millio`n) IBRD loan 20.7 Future foreign loans 9.4 Adainistration loans 14;5 Suppliers' credits 1.7 Total 125 8.16 The financial projections assume that the proposed BanL: loan would be for 25 years including a period of grace of five years with a rate of interest of 7S. The future foreign loans would cover the foreign exchange costs of the Rouna No. 4 ($A 6.3 million equivalent) and Baruni (diesel - $A 3.1 million) projects, It is too early for ELCOM to consider arranging loans for these two projects since the funds will not be required until fiscal 1973/74 and thereafter. It has been assumed that these loans would have terms of 25 years (including a five-year grace period), and 20 years (including a three-year grace period), respectively, both with a rate of interest of 7%. 8.17 The Administration agreed during the appraisal that it would provide ELCGM with two sinking fund loans of $A 5.0 million each in 1971/72 and 1972/73 with maturities of 40 years. Wvhile the Administration's long- range plan has tentatively earmarked annual loans of $A 3.0 million to ELCCM in succeeding years, the financial forecast indicates that a loan of $A 3.0 million will be required in 1973/74 but only $A 1.5 million in 1974/75. I14cvT ever, during negotiations assurances were obtained that in the event of a shortage of funds during the period of project construction, the Common- wealth of Australia, as guarantor, or the Administration, wc-ald provide ECGM with such funds or make other satisfactory financial arrangements to complete the project. In addition, assurances were obtained from EILCOM that, prior to undertaking any future construction project costing in excess of $A 10.0 million, it vould provide ., financiil plan aatisiactory to thf: Bank covering such project. 8.18 Proposed suppliers' credits would finance foreign costs of various diesel plants scheduled for 1971/72 and 1972/73. Assumed terms for these credits are 8% interest and repayment over six years. 8.19 Details of the financial plan are shown in Annex 28. During construction of the project (1970/71 through 1975/76), EICAI's gross fixed assets in operation plus work in progress would increase about 2.7 times. aased on the forecasts, the financing of this expansion program is considered firm, with the exception of the future foreign loans of $A 9.4 million. The financial plan is reasonable.  -19- Financial Forecasts 3.20 Operating results 1970/71 through 1977/78 are shown in Annex 26e ELCOM is expected to achieve a rate of return of 6.3% in 1970/71 (compared with a return of h.7% in the previous year) which ref'lects a 5,% tariff in- crease during the last half of the fiscal year. The return should increase to 9% in 1971/72 when the increased tariff will have been in effect for the entire year. During the next three years, the rate of return should exceed 10%. In 1975/76, when the project is scheduled for operation, the rate of return declines to 9.5% because of the substantial increase in ELCOM's rate base. Thereafter the rate of return should again exceed 10%. To assure satisfactory operations in the future it was agreed that ELCOM would not lower its tariffs during the years 1971/72 through 1975/76, and earn a rate of return of not less than 9% in the fiscal years 1972 through 1976 and not less than 10%l thereafter. 8.21 ELCOM's projected balance sheets are shown in Annex 27. The financial position is satisfactory throughout the eight-year period, 1970/71 through 1977/78. The current ratio (including current maturities of long- term debt) is satisfactory, varying between 1.2/1.0 to 1.5/110, but the esti- mated cash available at the end of each year is still not sufficient to meet the heavy sinking fund payments on Administration loans without carrying a year-end overdraft of $A 0.3 million. To conserve cash during the construc- tion period of the project, assurances were obtained that prior to June 30, 1978, ELCOM would not declare any dividends. 8.22 The balance sheet at June 30, 1972 includes for the first time an Administration equity investment account, amounting to about $A 6.7 million. About $A 5.8 million of this sum represents the value of the assets to be transferred to ELCOM. The balance of about $A 0.9 million is the estimated value of the assets at Kieta on Bougainville Island which will be transferred to ELCOM. The Administration has agreed to accept an equity investment in the amount of $A 6.7 million as full settlement for the total of these assets. The Administration equity investment account will be further increased by about $A 1.3 million in 1975/76 when ELCCM is expected to take over the distribution systems at lit. Hagen, Kundiawa and Kainantu, on completion of the project. Assurances were obtained that the value of any additional assets transferred to ELCOM in the future would be offset by an equivalent increase in the Administration equity investment account. 8.23 ELCOM and the Administration have informally agreed that power systems transferred to ELCOM in the future will be accounted for separately and that the Administration will subsidize any operating losses of these systems. Financial forecasts indicate that the four systems mentioned above should be profitable. Because of the possibility of transferring to ELCOM unprofitable systems in the future, the Administration formally agreed to subsidize any such systems' losses. 8.24 ELCOM's 88/12 debt/equity ratio at June 30, 1971 is expected to improve to about 67/33 at June 30, 1978. However, to maintain a satisfactory debt/equity ratio throughout the life of the proposed Bank loan, assurances were obtained that ELCOM would not incur any debt additional to the debts described in the financial plan (paragraphs 8.15 through 8.13) unless internal cash generation is sufficient to cover the maximum future debt serrine, inclu- ding service on any proposed loan, by not le:33 than 1.5 times.  -20- 9. RECOMMENDATIONS 9.01 During loan negotiations, agreement was reached on the following points: (a) The Administration's original investment in ELCOM will be converted from long-term debt to equity (para. 8.09); (b) in the event of a shortage of funds, the Administration and/or the Commonwealth Government will provide such funds to ELCOM, or make other satisfactory financial arrangements, as may be required to complete the project (para. 8.17); and (c) assets subsequently transferred to ELCOM from the Administration will be recorded as equity investments (para. 8.22). 9.02 The subsidiary loan, under which the Administration would relend the Bank funds to ELCOM, will rank pari passu with all existing Administra- tion loans to ELCOM (para. 8.03). -- 9.03 A condition of effectiveness of the loan is the presentation to the Bank of satisfactory evidence that ELCOM has proper authority to use land and water necessary for its operations. 9.oh The proposed project constitutes a suitable basis for a Bank loan of US$23.2 million to the Administration for a term of 25 years including a 5 year grace period, to be relent to ELCOM4 on the same terms. March 26, 1971  ANNEX I TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA. 90,000 --- 8,000 -- 7,000 __ 70,000 -UN- IGDM ITED STATES 6,000 - -- U N ITZ ERLANO 5,000 _ - TD-KIGDOM__ 4,000 -- ~~~~~~~~~~~~~~~~~EST GERMANY 0OAST 1w I~~ USRAI 3,000 - / FRANCE 2,000 _ 900 I /r -.500 -LIBERIA 9 0- ~~~~~~~~~~~~(IRON ORE MINING) 44001 -i-- HANA 1gMALAYSIA (WES) L 30 (ALUMINUM SMELTE) CLi/ PHILIPPINES CONGO (K) Z (KATANGA MINING)/ z I 1--I // 9 0 ---UGANDA-PAP JAAN,: NEW 4UIE (99) a 70 0 SIRALEN /CONGO(s x 60 SER EN Bi_ 0.. APUA AND NEW GUINEA (1 6E 50 - - -, I- 40 KENYA - 30 Z S TOGO w ~~~~~~~TANZANIA S W 20 BUM /f NIGERIA ETHIOPIA S S INDONESIA to0 ENERGY PRODUCTION PER CAPITA 9 I - -I I-- IN RELATION TO I I- 8 - GROSS NATIONAL PRODUCT PER CAPITAr, 7------ FOR SELECTED COUNTRIES* 6------ 5 _ - - _ _ _ 4 - - 3 10 20 50 100 200 500 1,000 2,000 5,000 10,00 GROSS NATIONAL PRODUCT (GNP) IN US $PER CAPITA *UN STATISTICAL YEAR BOOK 1969. (1968 DATA) IBRD-5208(R)  TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA PROPOSED ORGANIZATION |COMMONWEALTH MINISTER OF EXTERNAL TERRITORIES CANBERRAi A.C.T. | SECRETARY ADMINII rRATION I ~~~~~~~~~~~~~~PAPUA AND NEriV GUINEA PORT MOREStY ECONOMIC AFFAIRS GOVENMET DVLPMEN CENTRAL SECRETARIAT LEGAL AFFAIRS SRIE ECNMC PRODUCTION MIIG EUAIN SCL TRSPT |PLICY TRADE MAN POWER POiCY TOURISM ELECTRICITY COMRISSEON OF APUA AND NEW GUINEAR SOARDSOP SCORMMISSIONERS zNE L MANAGER |FINANGE.z AEM=UIETEATION |MA: :;: 2RKETING;0 ;0 l E ENGINEERING - |AREA MANA.ERS] I  ANNEX 3 TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA (ELCOM) POWER PLANTS AS INSTALLED JUNE 30, 1970 Total Capacity Installed No. and Size of Units (kW) Manufacturers (kW) HYDRO Rouna No. 1 1 2,500 Boving/Bruce Peebles 3 1,000 Boving/Metro Vick 5,500 Rouna No. 2 5 6,ooo Voest/Elin Union 30,000 Goroka 1 200 Gilkes/GEC 2 100 Gilkes/GEC 4oo TOTAL HYDRO 35,900 (35.9 MW) DIESEL Lae 2 84o English Electric/English Electric 2 320 Blackstone/ASEA 1 320 Blackstone/Lanc. Dyn. Crypto 1 2,400 Ruston/English Electric 1 530 English Electric/GEC 5,570 (5.6 MW) Rabaul 2 840 English Electric/English Electric 4 320 Blackstone/ASEA 1 1,200 Fuji/Fuji 4,160 (4.2 MW) Madang 1 1,340 English Electric/English Electric 2 530 English Electric/GEC 1 500 English Electric/GEC 3 240 Blackstone/Lanc. Dyn. Crypto 3,620 (3.6 MW) Wewak 3 530 English Electric/GEC 2 250 National/Brush 1 210 Mirrlees/Brush 2,300 (2.3 MW) Goroka 1 392 Blackstone/Brush 4 250 Dorman/MacFarlane 1,392 (1.4 Mw) Samarai 1 14o Mirrlees/GEC 2 150 Blackstone/Elect. Const. Co. 44o (0.4 MW) Kavieng 3 150 Blackstone/Elect. Const. Co. 450 (0.5 NW) TOTAL DIESEL 17,932 (18.0 MW) TOTAL INSTALLED CAPACITY 53,832 kW (53.9 MW) Decemter 15, 1970  ANNEX h TERRITORY OF PAPUA AND NEM GUiNEA EIECTRICITY COMMISSION CF PAPUA AND NEWJ GUINEA Overhead Line Statistics 1969/70 TRANSMISSION 66 kV 33 kV Port Moresby (Circuit ilIes) 39.5 10.4 Lae (Circuit idles) 66.8 0.2 415 V DISTRIBUTION 33 kV 22 kV 11 kV 3-Fnase I-Phase Port Moresby (Route Miles) 1.8 12.8 87.0 82.9 3.7 Sarnarai (Route Miles) 1.5 o.6 Lae (Route Miles) 40.2 41.4 _ Rabaul (Route Miles) 29.2 17.9 n.a. n.a. Madang (Route Miles) 25.2 22.3 - Goroka (Route Miles) 14,4 - 17.5 0.7 Wewak (Route Miles) 23.7 10,2 - Kavieng (Route Mfiles) 4.1 9e3 _ TOTAL CIRCUIT/RCUTE MnIES 106.3 10.6 1.8 56.4 198.1 n.a. na. January 15, 1971  ANNEX 5 TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COYAISSION 0F PAPUA AND NEW GUINEA (ELCOM) SUPPLY POINT TRANSFORNER STATISTICS 1969/70 MVA Voltage Ratio KVA Voltage Ratio Feeders PORT MORESBY Rouna No. 1 1.S. 3 x 2.5 3.3/33 k1 2 x 30 3.3 kv./415-240 V 2 x 33 kV Rouna No. 1 I.S. 2 x 0.5 33/22 kV - 1 x 22 kV Rouna Auto S/S 2 x 5.0 33/66 kV - Rouna No. 2 P.S. 5 x 7.5 11/66 kV 2 x 300 66 kV/433-250 V 3 x 66 kV Boroka S'S 2 x 5.0 66/11 kV 1 x 50 11 kV/415-240 V 5 x 11 kV Boroka S'S 1x 10 66/11 kV - Konedobu S/S 2 x 7.5 66/11 kV 1 x 100 11 kV/433-250 V 7 x 11 kV Bomana S/S 2 x 0.5 33/11 kV - 2 x 11 kV Bomana S/S 2 x 2.5 33/11 kV 1 x 11 kV LAP Baiune Auto SIS 2 x 2.5 33/66 kV 1 x 25 33 kV/433-250 V L x 66 kV Lae S/S 2 x 2.5 66/11 kV - Lae P.S. 3 x 0.4 415 V/il kV 2 x 500 11 kV/433-250 V 5 x 11 kV MADAING Madang _I S. 2 x 0.75 415 V/l1 kV - 3 x 11 kV Madar. S. 3x0.5 415 V/11 kV - VhWaK ;.<.. '3 x 0.75 415 V/11 kV - -4 x 11 kV Wewak P.S. 3 x V.4 4-r5 V/11 kJ - - THydro P.S. 2 x 0.3 415 1/22 kV - Ix 22 kV Diesel p.O 4x.3 415 V/22 kV - - 2 x 22 kV RA_AULF Pabaul P.S. 4 x 0.4 415 V/lI kV 2 x 50 11 kV/433-250 V 4 x 11 kV Rabaul S/5 2 x 0.75 11/22-33 kV - KAVIENG Kavieng P.S. 2 x 0.3 415 V/l1k -kV 2 x 11 kV S-AMRAI - --- TOTAL ~ -,53/120.15 11/1935 43 p.S. - :-ower Sca-i-on S/S - Substation December 15, 1970  TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA (ELCOM) DISTRIBUTION SUBSTATION STATISTICS 1969/70 NUMBER OF SUBSTATIONS SUBSTATION COMMISSION H.V. BULK METERED CAPACITY KVA 1 Pole 2 Pole 1 Pole 2 Pole H.V. Bulk Kiosk Indoor Mounted Mounted Total Kiosk Mounted Mounted Total Commission Metered PORT MORESBY 45 3 105 73 226 8 18 7 33 39,405 6,025 LAE 26 2 58 13 99 11 1 - 12 17,500 2,100 RABAUL 17 - 45 13 75 - _ _ - 7,665 - MADANG 6 1 15 13 35 - - - 4,8oo - GOROKA 2 - 22 4 28 - - - - 2,685 - WEWAK 3 - 28 2 33 - 3 3 6 3,045 1,000 KAVIENG _ _ 6 1 7 - - - - 550 - TOTAL 99 6 279 119 503 19 22 10 51 75,650 9,125 December 15, 1970  TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMMISSION OF PAPUA AND NEW GUINEA (ELCOM) ACTUAL GENERATION, SALES AND MAXIMUM DEMAND 1963/64-1969/70 Average Annual Growth Rate 1963/70 FISCAL YEAR ENDS JUNE 30 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 in % GENERATION (MWh) Upper Ramu Service Areai 11,974 14,666 17,628 22,481 28,702 36,725 45,572 25.0 Other Service Areas 43,484 51,293 60,511 71,723 81,331 94,488 114,793 17.6 TOTAL 55,458 65,959 78,139 94,204 110,033 131,213 160,365 19.4 Hydro Generation 29,195 38,823 39,136 43,954 71,778 99,916 119,437 26.5 Thermal (Diesel) Generation 26,26 27,36 39,003 50,250 38,255 31,297 40,928 7.7 TOTAL 55,458 65,959 78,139 94,204 110,033 131,213 160,365 19.4 SALES (MWh) Upper Ramu Service AJea 10,310 12,792 16,048 20,163 25,513 32,188 40,138 25.4 Other Service Area 36,230 42,929 52,485 62,472 72,819 86,022 104,039 19.2 TOTAL 46,540 55,721 68,533 82,635 98,332 118,210 144,177 20.7 LOSSES AND AUXILIARY USE Upper Ramu Service Area-'/ in MWh 1,664 1,874 1,580 2,318 3,189 4,537 5,434 21.8 ini % Total Gen5ration 13.9 12.8 9.0 10.3 11.1 12.4 11.9 _ Other Service Areas-/ in MWh 7,254 8,364 8,026 9,251 8,512 8,466 10,754 6.9 in % Total Generation 16.7 16.3 13.3 12.9 10.5 9.0 9.4 - TOTAL in MWh 8,918 10,238 9,606 11,569 11,701 13,003 16,188 10.3 in % Total Generation 16.1 15.5 12.3 12.3 10.6 9.9 10.1 - MAXIMUM DEMAND (kW) Upper Ramu Service .ea/ 2,896 3,360 4,095 5,160 6,165 7,400 9,195 21.2 Other Service Areas_e 9,695 10,701 12, 484 14,443 16,553 22,825 15.3 TOTAL 12,591 14,061 1,8 32,020 16.8 AVERAGE ANNUAL LOAD FACTOR (%) Upper Ramu Service A ea/ 47.2 49.8 49.1 49.6 53.2 56.6 56.6 Other Service Areas_ 51.1 54.6 55.4 56.7 56.1 53.5 57.4 TOTAL 50.2 53.5 53.7 54.9 55.3 54.3 57.2 / Lae, Madang, Goroka. Port Moresby, Samarai, Wewak, Rabaul, Kokopo, Kavieng. November 24, 1970  ANNEX 8 TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY CCGSSION OF PAPUA AND NEU GUlNEA Consumer Statistics 1965/66-1969/70 1. Total Number of Consumers per Tariff Category at end of each Fiscal Year 1965/66 1966/67 1967/68 1968/69 1969/70 Domestic 7,764 8,904 10,112 11,189 12,824 General Supply 2,272 2,418 2,572 3,o64 3,403 Bulk Supply 83 94 101 - - Ifaximum Demand - - - 4 12 Public Lighting 58-/ 1 1 1 1 TOTAL 10,177 11,417 12,786 14,258 16,240 Increase over previous year in % 12.9 12.1 11.9 11.5 13.9 2. Anual Increase of Consumers 1965/66 1966/67 1967/68 1968/69 1969/70 Domestic 924 1,140 1,208 1,077 1,635 General Supply 192 1146 154 391 339 Bulk Supply 43 11 7 - - M4aximum Demand - - - 4 8 Public Lighting 11 (57) _ _ TOTAL 1,170 1,240 1,369 1,472 1,982 1/ As from July 1, 1966 unmetered street lighting has been recorded as 1 consumer. January 15, 1971  TERRITORY OF PAPUA ANS NEW GUINEA ELECTRICITY COMMS56ION OF PAPUA AND NEW GUINEA (ELCOM) ACTUAL SALES BY TARIFF CLASSIFICATION, REVENUES AND REVENUES PER kAh SOLD 1963/64-1969/70 1963/64 1964/65 1965/66 1966/67 1967/68 1968/691_ 1969/70 REVENUE/ REVENUE/ REVENUE/ REVENUE/ REVENUE/ REVENUE/ REVENUE' SALES REVENUES kWh SALES REVENUES kWh SALES REVENlUES kWh SALES REVENUES kWh SALES REVENUES k-Wh SALES REVENUES kWh SALES REVENUES kWh A cents/ A cents/ A cets! Acents/ A cents/ A cents5 A cents' MWh $A kWh WWh $A kWh Wh SA kWh MWh $ kWh MWh $A kWh MWh $A kWh MWh $A kWh UPPER RAMU SERVICE AREA Domestic 5,185 259,376 5.00 6,642 329,324 4.96 7,636 377,028 4.94 9,125 444,149 4.87 11,059 531,065 4.80 9,135 399,398 4.37 10,935 472,062 4.32 General 5,021 264,014 5.26 5,954 310,168 5.21 7,885 396,637 5.03 10,339 503,910 4.87 12,554 606,439 4.83 22,919 954,215 4.16 29,070 1,188,632 4.09 Bulk/Waximum Demand 34 1,968 5.79 113 6,442 5.70 431 22,534 5.23 653 33,715 5.i6 1,657 78,122 4.71 - - - - - - Public Lighting 70 4,466 6,38 83 5,260 6.34 96 6,092 6.35 n 10,933 n.a. n.a. 12,981 n 134 15,684 11.70 133 20,609 15.50 Special - _ 46 2,183 4.75 243 11,030 4.54 - - - - TOTAL 10,310 529,824 5.14 12,792 651,194 5.09 16048 802,291 5.00 2o,163 994,890 4.93 25,513 1,239,637 4.86 32,188,1369,297 4.25 40,1381,681,303 4.19 OTRER SERVICE AREAS Domestic 17,218 735,070 4,27 18,971 510,924 4.27 21,077 894,425 4.24 23,950 1,008,964 4.21 26,289 1,099,586 4.18 22,921 914,022 3.99 26,3801,0o45,443 3.96 General 12,576 576,368 4.58 15,433 688,376 4.46 21,008 875,4ii 4.17 24,269 999,751 4.12 27,279 1,109,473 4.07 54,555 2,068,328 3.79 59,070 2,270,746 3.84 Bulk/Macim.- Demand 3,150 123,48o 3.92 4,451 174,188 3.91 5,891 224,835 3.82 6,829 266,457 3,90 6,812 250,349 3.68 8,o99 156,567 1.93 18,152 209,454 1.15 Public Lighting 310 16,860 5.44 355 19,628 5.53 402 22,584 5.62 550 40,324 7.33 6oo 46,515 7.75 447 50,593 11.32 437 55,821 12.77 Special 2,976 47,132 1.58 3,719 61,182 1.65 4,107 74,710 1.82 6,874 161,707 2.35 1L,839 326,540 2.76 n.e. 18,809 n.a. - 225,517 na. TOTAL 36,230 1,498,910 4.i4 42,929 1,754,298 4.o0 52,485 2,091,965 3.99 6,47 2,477,203 3.97 72,8L9 2,832,463 3.89 86,022 3,208,319 3.7 104,039 3,8o6,981 3.44 TOTAL Domestic 22,403 994,446 4.44 25,613 1,140,248 4.45 28,713 1,271,453 4.43 33,075 1,453,113 4.39 37,348 1,630,651 4.37 32,056 1,313,420 4.10 37,315 1,517,505 4.07 General 17,597 040,382 4.78 21,387 998,544 4.67 28,893 1,272,048 4.40 34,608 1,503,661 4.34 39,833 1,715,912 4.31 77,474 3,022,543 3.90 88,140 3,459,378 3.92 Rulk/Maxim Demand 3,184 125,448 3.94 4,564 l8o,630 3.96 6,322 247,369 3.91 7,482 300,172 4.01 8,469 328,471 3.88 8,099 156,567 1.93 18,152 209,454 1.15 Public Lighting 380 21,326 5.61 438 24,888 5.68 498 28,676 5.76 550 51,257 9.32 6oo 59,496 9.92 58i 66,2773/ 11.41 570 76'4303! 13.41 Special 2,976 47,132 1.58 3,719 61,182 1.65 4,107 74,710 1.82 6,92o 163,890 2.37 12,082 337,570 2.79 n.a. l8,809- n.a. n.a. 225,517- na. TOTAL 46,540 2,028,734 4.36 55,721 2,405,492 4.32 68,533 2,894,256 4.22 82,635 3,472,093 4.20 98,332 4,072,100 4.14 118,21o 4,577,616 3.86 144,177 5,488,284 3.65 OTRER OPERATIlNG REVENUE ATTRIBUTABLE TO SALES 57,312 48,996 25,616 42,713 25,578 38,833 18,716 TOTAL OPERATING REVENUE 46,54 2,6046 4.48 55,721 ,44,48 4.40 68, 533 291987 2 4.26 82,635 14806 4.25 98,332 ,09767 4.17 121 4,616,449 391 44-77 557 82 O/ On July 1, 1968 ELCOM rev-sed tariffs (reduction in general) and changed its Tariff Structure. 2/ From July 1, 1966 onwards metering of public lighting sas abolished and replaced by a fined monthly charge which includes not only energy conumned bht also reimburses ELCOM for maintenance and service cf the facilities. I/ The Special Load category wea abolished on July 1, 1968. The revenue in 1968/69 and 1969/70 is for a water pumping load at Port Moresby. This load was diacontinued after 1969/7D. November 23, 1970  TERRITORY OF PAPUA AND NEW GUINEA ELECTRICITY COMLUSSION OF PAPUA ANPD NEW GUINEA (FLCOM) FORECAST GENERATION, SALES AND MAXIMUM DEMAND 1970/71-1977/78 Averagec Average Annual Annual Growth Actual Growth Rate Rate 1969/78 FSCAL YEAR ENDS lOINE 30 1969/70 1963/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 e 9% GENERATION (Mh ) Upper Raa Service yea- 45,572 25.0 53,950 70,65o 90,700, 113,100 140,000 201,7601/ 245,280 278,840 2S.4 Other Service Areas- 114,793 17.6 127,660 153,400 201,2101 239,170 282,530 333,390 389,280 455,700 18.9 TOTAL 160,365 13.4 181,60o 224,050 291,910 352,270 402,530 535,150 634,560 734,540 21.0 Hydrc Ceneretiln Upper RAam Ser-ice Area 216600 ) 29,000 30,000 30,000 30,000 30,000 i88,26o 2L5,40o 233,010 ) 18.9 Othuer Areas 90,837! . 102,000 023,000 147,000 176,000 198,000 198,000 223,000 237,000 Other Area. ~~~90,8371000 1200 7OO Ther-Ie Generatin- Upper Ram. Service Area 16,972 ) 24,950 4o,650 60,700 83,100 110,000 13,500 29,820 453230 )26.2 Other Areas 23,956 ) 1 25,660 30,400 54,210 63,170 84,530 135,390 166,280 218,700 TOTAL i6o,365 19.4 181,610 224,o05 291,910 352,27O 422,530 535,150 634,560 734,54o 21.0 SALES (MWh) Upper Rama Sernice Aren-' 40,138 25.4 50,260 65,713 94,304 109,109 130,349 175,487- 210,249 246,892 25.8 Other ServOcr Areas_ 1o4O039 19.2 ii4,698 137,824 218 92J 215,o,4 254,175 299,974 350,308 410,149 18.9 TOTAL 144,177 20.7 164,958 203,537 265,3o4 320,303 384,524 475,461 560,557 657,414 20.9 LOSSES AND AUXILIARY lESE Upper Rama Seei-ce Area] in M3h 5,434 21.8 3,690 4,937 6,386 7,911 9,651 26,273 35,031 31,948 24.9 in % Tt.al Ge2ytitAon 11.9 - 6.8 7.0 7.0 7.0 6.9 13.0 14.3 11.5 - Other Servine Areas- in M3h 10,754 6.9 12,962 15,576 20,201 24,056 28,353 33,416 38,972 45,551 19.8 in % Total GeneratiAo 9.4 - 10.2 10.2 10.0 10.1 10.0 10.0 10.0 10.0 - TOTAL in MWh i6,l08 10.3 16,652 20,513 26,606 31,967 38,oo6 59,689 74,003 77,499 21.8 in % Total GeneratiAn 10.1 - 9.2 9.2 9.1 9.1 9.0 11.2 11.7 10.6 - MAXIMM DFEMAND (ekW) Upper Ramu len-ice /ea- 9,195 21.2 11,540 14,980 19,060 23,580 28,960 39,664 47,086 54,905 25.0 Other Sen-lee Areas 22,825 15.3 26623 31.876 4,664 48,876 57,374 67,385 78,521 90,993 19.0 TOTAL 32,020 i6.8 38,163 46,856 60;724 72,456 86,334 107,049 125,607 145,898 21.0 AVERAGE ANNUAL LOAD FACTOR (%) Upper Ramu lervAce Aces' 56.6 53.0 53.8 54.3 54.8 55.2 58.1 59.S 58.0 Other Serniee Area2 57.4 54.7 54.9 55.1 35.9 56.2 56.5 56.6 57.2 TOTAL 57.2 54.3 54.6 54.9 55.5 55.9 57.1 5T.7 57.5 1/ L.., Mad-ng, Gorokh and ne ef July 1, 1975, Mt. Hagen, Kendiawe, Kalnentl. 2/ Port Meresby, Saaarai, Wewak, Rabaul, Kokepe, K-ni-pg n.d an of July 1, 1972, Kiete. Nvehmber 24, 1970  !E1-T ~