India - Third Trombay Thermal Power Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2199-IN REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE THIRD TROMBAY THERMAL POWER PROJECT March 30, 1978 This document has a restrleted distribution and may be used by recipients only In the performance of their offeial dutles. Its contents may not otherwise be disclosed without World Bank authorimtlon.  CURRENCY EQUIVALENTS Currency Unit = Rupee (Rs) Rs 1 Paise 100 US$1.00 = Rs 8.6 Rs 1.00 = US$0.1163 Rs 1 million = US$116,279.06 (Since September 24, 1975, the Rupee has been officially valued relative to a "basket" of currencies. As these currencies are now floating, the U.S. Dollar/Rupee ex- change rate is subject to change. As of March 17, 1978, the exchange rate was Rs 8.18 to US$1.0. FISCAL YEAR April 1 - March 31 LIST OF ABBREVIATIONS AND ACRONYMS USED IN THIS REPORT GOI = Government of India NTPC = National Thermal Power Corporation Ltd. NHPC = National Hydro Power Corporation Ltd. CEA = Central Electricity Authority SEB = State Electricity Board TEC = Tata Electric Companies MSEB = Maharashtra State Electricity Board GOM = Government of Maharashtra KfW = Kreditanstalt fur Wiederaufbau kV = kilovolt - 1,000 volts kWh = kilowatt hour = 1,000 watt-hours MW = Megawatt = 1,000 kilowatts km = kilometer  FOR OFFICIAL USE ONLY INDIA THIRD TROMBAY THERMAL POWER PROJECT LOAN AND PROJECT SUMMARY Borrower: Tata Electric Companies (The Tata Hydro-electric Power Supply Company, Ltd., The Andhra Valley Power Supply Company, Ltd., and The Tata Power Company, Ltd.). Guarantor: India, acting by its President. Amount: US$105 million. Interest Rate: Standard. Commitment Fee: Standard. Term: Payment over 20 years, including five years' grace. Project Description: In order to help meet the forecast load growth in the Bombay area, the project provides for construction at Trombay of a 500 MW power generating unit, together with boiler, electrical and mechanical equipment and associated works. This is the first single unit installation of this size to be constructed in India and the principal project risks concern problems during the erection, commissioning and initial opera- tional stages. Estimated (US$ million) Cost: Local Foreign Total Preliminary Works 2.7 -- 2.7 Civil Works 13.2 -- 13.2 Electrical and Mechanical Works 67.3 69.9 137.2 Coal Handling 6.6 -- 6.6 Switchyard 5.7 4.0 9.7 Construction Equipment 2.1 -- 2.1 Subtotal 97.6 73.9 171.5 Contingency (physical) 5.3 3.7 9.0 Contingency (price) 11.2 10.7 21.9 Engineering and Administration 4.5 2.5 7.0 Total Project Cost 118.6 90.8 209.4 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 IFC authorization.  - ii - Financing (US$ million) Plan: Local Foreign Total Equity Shares 20.4 - 20.4 Loans - IBRD 14.2 90.8 105.0 Local Financing Institutions 64.0 - 64.0 Consumers' Contribution/Govern- ment of Maharashtra 20.0 - 20.0 Total 118.6 90.8 209.4 Estimated Disbursements: (US$ millions) Bank FY FY79 FY80 FY81 FY82 FY83 Annual: 11.0 24.0 45.0 20.0 5.0 Cummulative: 11.0 35.0 80.0 100.0 105.0 Rate of Return: 14% (using revenues based on expected tariffs as indicator of benefits). Appraisal Report: No. 1788b-IN, dated March 28, 1978.  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE THIRD TROMBAY THERMAL POWER PROJECT 1. I submit the following report and recommendation on a proposed loan, in an amount equivalent to US$105 million, to the Tata Electric Com- panies, Ltd. (TEC), with the guarantee of the Government of India (GOI), to help finance the construction of a 500 MW power generating unit and associated works. Amortization would be over 20 years, including five years' grace, at the standard Bank interest rate. The GOI would charge TEC a guarantee fee in order to bring the effective interest rate to 10-1/4% per annum, the rate at which Bank Group assistance is being made available by GOI to public sector corporations. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (1529-IN dated April 25, 1977), was distributed to the Executive Directors on May 3, 1977. Country data sheets are attached as Annex I. Background 3. India is exceptional among the Bank Group's member countries for its size and diversity; the country is divided into more than 20 States with a population of some 630 million speaking over 60 languages. Since Independ- ence the trend in growth of GNP has been about 3.5% per annum, or a little over 1% per annum in per capita terms, while over the five years 1971/72 - 1975/76 it fell to as low as 2.5% per annum, in spite of the record harvest of 1975/76. This unsatisfactory performance is only in part the result of the low availability of investable resources: while India's domestic savings effort compares well with other countries at the same average income levels, however, the net transfer of resources from abroad has never been above 3% of GNP, and fell to as little as 0.8% between 1969/70 and 1973/74. More signi- ficant perhaps is the fact that in spite of a marked rise in the investment rate from about 10% in the early 1950s to about 18% over the past fifteen years, the trend in GNP growth has remained about the same. This indicates a marked decline in the efficiency of capital use, as a result of increasing capacity underutilization, long project gestation, and increased emphasis on relatively capital intensive projects and sectors. 1/ Parts I and II of this report are substantially the same as Parts I and II of the President's Report for the Karnataka Irrigation Project (Report No. P-2223-IN), dated March 15, 1978.  4. Since Independence the growth of the socio-economic infrastructure (transport, education, health services, etc.) has been impressive, but has often been achieved at high cost and has yielded results of variable quality. Many industrial and agricultural investment schemes have been highly success- ful, but others have taken excessively long to be completed and have operated well below full capacity. In some regions of the country, growth and struc- tural change have been rapid and compare favorably with developments in many other parts of the world; in other regions there has been stagnation, and in some, decline. Although national income has increased in most years, there has been no rise in the living standards of the vast mass of rural and urban poor, conservatively estimated at 200 million people with per capita incomes of US$70 per annum. 5. The structure of the economy has been slow to change. Agriculture remains the dominant sector, with its share of national product declining only gradually from about 50% to 42% over the last twenty years. The share of manufacturing industry has increased only slowly and, since the late 1960s, has remained approximately constant at about 16%. There has, however, been a shift in the composition of manufacturing production, with consumer, inter- mediate, and capital goods now contributing about one third each, compared with an overwhelming preponderance of consumer goods 25 years ago. Recent Trends 6. In March, 1977, a party other than Congress formed a Government for the first time since Independence. The Janata, or People's Party, is a heterogeneous amalgamation of smaller parties which had never before been able to form a united front. The state of the economy was not a prominent election issue; in fact the economy was generally stronger than at any time in the last ten years. Over the two years 1975/76 and 1976/77, the growth of GDP averaged 5.4% per annum. Agricultural production in 1976/77 did fall by about 3% but only because of a return to a more normal harvest of 111 million tons after the record 121 million ton output in 1975/76. In fact, the 1976/77 figure is the second largest harvest on record. The growth of industrial production accelerated over the past two years from 6.1% in 1975/76 to 9.2% in 1976/77. The volume growth of exports continued its impressive recent performance, and averaged approximately 13% per annum over the past two years. This export growth, together with hardly any in- crease in import levels, has resulted in dramatic balance of trade improve- ments with an estimated deficit for 1976/77 of less than US$500 million. In sum, the overall resource position with record foreign exchange and food- grain reserves, is exceptionally strong, and gives the Government considerable room for maneuver. 7. In agriculture the bumper crop of 1975/76 was largely due to remark- ably good rainfall, both in amount and distribution, while the good crop in 1976/77 was produced under somewhat less than normal weather conditions. A conspicuous change was the increase in fertilizer use, which rose by about 25% over 1975/76, following marked declines in fertilizer prices. Industrial production benefited from fewer labor disputes, fuller utilization of in- stalled capacity in both private and public sectors, a more liberal import policy, relatively good power availability, and increased demand because of  - 3 - higher consumer incomes, expanded exports and higher public expenditures. Inflation re-emerged in 1976/77 as an important issue of economic management. During 1975/76 the wholesale price index had fallen by 8.5%; but in 1976/77 it rose by 11.6%. The key characteristic of this rise was that it occurred largely in a few agricultural commodities for which prices had dramatically fallen in the previous year. In the twelve months ending Septembel 1977, the increase was less than 5%. The overall price index has shown virtually no trend over the past three years taken together. 8. The balance of payments situation has improved dramatically since the 1973-1975 period. In 1975/76 the trade deficit was $1,530 million, which was more than covered by US$1,560 million in net aid, US$205 million in net purchases of currency from the IMF, and US$559 million in net miscellaneous capital and invisibles (mostly private remittances); indeed, this large aggregate net resource inflow led to a US$794 million increase in foreign exchange reserves, to a level of almost US$2.2 billion. In 1976/77, the balance of payments continued to improve, with exports provisionally, esti- mated to have increased by US$1,145 million against an imports increase of only US$85 million, so that the trade balance deficit is now estimated at only US$470 million. The sharply decreased trade deficit, along with a further increase in the net inflow of miscellaneous capital and invisibles from abroad of US$640 million, more than offset the fall of US$350 million in net aid and the US$365 million repurchases of currency from the IMF, and allowed a US$1.5 billion addition to reserves, which reached a level of US$3.7 billion at the end of March 1977. The developments have continued in the current year, with reserves estimated at US$4.8 billion as of October 1977. Development Prospects 9. The favorable economic situation gives the Government the opportun- ity to address the longer-term constraints on growth. The basic task is to raise the overall rate of growth from its historic range of 3% to 4%. In the long run this will require raising more resources for investment. But it will also be important to achieve significantly better utilization of avail- able resources, partly through an immediate boost to industrial demand. 10. In agriculture, the basic problem remains that, despite the record foodgrain crop in 1975/76 and the good crop in 1976/77, the long-term growth rate of foodgrain production has been unacceptably low, less than 3% per annum over the last twenty-five years, and less than 2% since 1967/68. This has meant that only in good years has there been any margin of production to cater to per capita growth in food consumption, and in normal years it has been necessary to import food. There is considerable scope for stepping up growth both by increasing the use of inputs and by raising the productivity of exist- ing capacity. Three promising developments in regard to the first are the sharply higher outlays on irrigation in the Fifth Plan period along with a renewed determination to increase public investment in irrigation even more beginning in 1978/79 and to complete on-going projects expeditiously, the indications that private investment in tubewells is picking up again after a slowdown in the early 1970s, and the continued recovery of fertilizer demand. With regard to more productive use of existing capacity, there is increased  - 4 - awareness in the Government that the benefits of irrigation projects can be much increased not only through command area development but also through more efficient design and operation of major surface irrigation infrastructure. Also, hopes have been generated for increasing productivity on both irrigated and rainfed farms through a reorganized and improved extension and research system, which has been recently introduced in several States in northern and eastern India. 11. A strong effort to raise agricultural growth is essential, not only to meet food requirements, but also because of the pervasive influence of agriculture on the levels of activity in other sectors of the economy. This effort must also be so structured as to increase the incomes of small and marginal farmers, in order to increase production since they operate 25% of the cultivated land and account for somewhat more than 25% of production, and for welfare reasons, since they make up about 70% of rural population and constitute the majority of those living below the poverty level. 12. The industrial sector is poised for growth, as serious constraints on the supply side have been removed by the improved situation, particularly with respect to coal and imported raw materials and components; however, the power supply situation is once more somewhat worrisome (paragraph 13 below). There has been a progressive liberalization of controls and the 1976/77 Central Budget announced a reduction of some taxes on private industry. In many cases management of public enterprises has improved, as is reflected in their markedly higher production and profitability as a group. In the medium term it is the demand for industrial output that will determine indus- trial growth. In certain industries, export demand will provide a strong pull on production; this is true, for example, for certain chemicals, some electrical equipment, processed agricultural products, vehicles and automobile ancillaries. But the impact of increased exports on overall industrial demand will grow only slowly given the current low share of exports in sales. If the higher growth and productivity in agriculture discussed earlier were to materialize, it would provide a significant stimulus to industry. It is difficult to specify the linkages explicitly; but because of the large share that agriculture holds in GNP, the coefficients do not have to be large for agricultural growth and the concomitant growth in demand for industrially produced inputs and mass consumption goods to boost overall industrial demand significantly. A higher public deficit and increased public investments are the instruments most directly under Government control, and also those that can increase demand for industrial products most immediately. While the first budget of the new government projects a relatively small deficit, it does maintain a 20-22% increase in spending over the likely outlay in 1976/77. The projected deficit is contingent on the utilization of foreign exchange reserves; to the extent they are not utilized though increased imports, the deficit will increase. 13. The general improvement in the supply of energy augurs well for India's ability to meet the needs of a more rapidly growing economy. Organ- izational and transportation problems in the coal industry have largely been overcome, production is generally sufficient to meet demand, stocks are  -5- comfortable, and the industry has good prospects for meeting domestic demand although exports have been cut back as a result of a disruption in the supply of explosives early in the year. However, the supply of electricity continues to be a concern, since the power situation is not uniformly good. Power shortages affect a number of the more industrialized States, particularly Maharashtra, Punjab, Haryana and West Bengal; as a result, there is a con- tinued constraint on the expansion of industry. This is despite a number of favorable factors: greatly improved capacity utilization in thermal power stations, more efficient exchange of power between States, accelerated imple- mentation of power projects, and somewhat improved availability of finance for power investment. The underlying reason for the weak power supply posi- tion is that capacity shortages continue despite the improved investment program. The prospects for the oil and gas sector have been further improved by new finds of oil and gas near the large offshore Bombay High field. Crude oil from Bombay High was brought to shore for the first time in May 1976; production reached an annual rate of 2 million tons by March 1977, and will rise to a level of 12-13 million tons by 1984/85. Although India will con- tinue to import crude at or somewhat above the current level, much of the foreign exchange burden of rapidly rising imports will be avoided by the development of these resources. Prospects are also bright for further dis- coveries off-shore, given the current high level of exploration activity. 14. Underlying all other development issues is that of population. Although India's population growth rate of a little over 2% is not high in comparison with most LDCs, the size of the absolute increment - 13 million annually - is daunting. It appears, however, that population growth may have passed its peak in the 1960s, and it is expected to continue to slow down, both because the birth rate will continue to decline and because the death rate will not fall as steeply as in the past. It is apparent that India's family planning efforts suffered a setback following the end of the recent emergency period, and acceptor rates are at very low levels currently. However, the new Government has announced its commitment to a voluntary family planning program and has maintained ambitious performance targets. Although it will take some time, adoption of family planning practices is expected to increase to higher levels. Over the longer term, with a sustained family planning effort, it should be possible to lower the population growth rate to 1.1% per annum by the end of the century. Our "best guess" projection of India's population by the year 2000 is 890 million. Many of the benefits of family planning policy will only be felt beyond the turn of the century, but the decline in fertility will bring about an early change in the age struc- ture of the population. The school age group will grow more slowly or not at all after 1981, thereby reducing the pressures on the primary and second- ary education system. The labor force, however, will continue to grow at a fast rate until the end of the century. 15. India's balance of payments position should be comfortable for the next few years. The combination of past global inflation and increased ex- ports have reduced the proportion of export earnings needed for debt service from 30% in 1970/71 to 16% in 1976/77. The ratio is not likely to rise above this level in the next few years. Given continuing favorable policies, the volume of exports should grow by at least 7% to 10% annually in the near  -6- future; and import needs for fertilizer, POL and foodgrains will continue to require a diminishing proportion of available foreign exchange. The large inflow of private remittances shows no immediate signs of declining and should continue to bolster the foreign exchange position in the medium-term. Imports, including a variety of capital goods, have already been liberalized signifi- cantly. Increased public investment and a revival of the domestic economy is likely to generate substantial additional import demand. However, this should be quite manageable, given the currently comfortable foreign exchange position, continued export efforts, and maintenance of the current real level of net aid. The present situation presents an opportunity to raise the level of investment and, consequently, reach a more satisfactory level of long-term growth. PART II - BANK GROUP OPERATIONS IN INDIA 16. Since 1949, the Bank Group has made 53 loans and 97 development credits to India totalling US$2,015 million and US$4,934 million (both net of cancellation), respectively. Of these amounts, US$886 million has been repaid, and US$2,014 million was still undisbursed as of February 28, 1978. Annex II contains a summary statement of disbursements as of February 28, 1978, and notes on the execution of ongoing projects. 17. Since 1957, IFC has made 14 commitments in India totalling US$58.4 million, of which US$13.8 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$30.1 million, US$23.6 mil- lion represents loans and US$6.5 million equity. A summary statement of IFC operations as of February 28, 1978, is also included in Annex II (page 2). 18. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. Family planning, education, water supply development, and urban investments have also received Bank Group support in recent years. 19. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, urban development and water supply remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, command area development of existing irrigation schemes, intensification and streamlining of extension systems, and seed production  form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on agriculture-, export- and energy-related projects. 20. The need for a substantial net transfer of external resources in support of India's economy has been a recurrent theme of Bank economic re- ports and of the discussions within the India Consortium. Thanks in large part to the response of the aid community, India has successfully adjusted to the changed world price situation. However, the basic need for readily usable foreign exchange assistance, to augment domestic resources, assure effective utilization of existing capacity, stimulate investment and accel- erate economic growth, remains. As in the past, Bank Group assistance for projects in India should include, as appropriate, the financing of local expenditures. India imports relatively few capital goods because of the capacity of the domestic capital goods industry. The import component of projects tends to be especially low in such high-priority areas as agricul- ture, education, and family planning. For the Bank Group to be able to make an appropriate contribution to the financing of projects in these sectors, it is important to cover a proportion of local expenditures. 21. It is clear from the review of the Indian economy that as much as possible of India's external capital requirements should be provided on con- cessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and some Bank lending to India, for which the country is creditworthy, is appropriate. As of January 31, 1978, outstanding loans to India totaled US$1,168 million, of which US$662 million remained to be disbursed, leaving a net amount out- standing of US$506 million. 22. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with an estimated 58%, 24% and 29%, respectively, in 1975/76. On March 31, 1976, India's outstanding and dis- bursed external public debt was US$13.1 billion, of which the Bank Group's share was 25%. The Bank Group's share is expected to remain around this level in the future. Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1976/77, about 14% of India's total debt service payments were to the Bank Group.  - 8 - PART III - THE POWER SECTOR Background 23. The Indian power sector is within the concurrent jurisdiction of the Central Government and the State Governments. The Electricity (Supply) Act, 1948 assigns extensive responsibilities to the State authorities, but it also provides for broad guidance and coordination from the Central Govern- ment. The principal agencies in the industry are the State Electricity Boards (SEBs), which are responsible for the generation, transmission and distribution of electricity within each State; the Central Electricity Authority (CEA); and the two Central Power Corporations, the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation (NHPC). 24. In the 1950s and 1960s, power generation and the expansion of installed capacity kept pace with consumption, growing on average by about 12% annually. Since 1970 the situation has deteriorated, and power shortages have grown in frequency and duration as demand for power has outstripped supply. Between 1970/71 and 1974/75 growth in power generation averaged only 6% annually. Then followed two years of more rapid growth at an annual rate of 13%. In the first five years of the decade, the main reason for this poor performance was delays in completing new power projects, which led to short- falls in capacity below planned levels. Moreover, poor monsoons and an unreliable coal supply meant that even available hydro and thermal capacity was not fully utilized. Weakness in the management of thermal power stations also contributed to the problem. When in 1975/76 and 1976/77 the situation improved, this was the product not only of two good monsoons and of much improved coal supply but also of a concerted effort in the power sector to improve project implementation, thermal capacity utilization and overall system management. Capacity grew by 10% in 1975/76 and by 8.3% in 1976/77. However, even these encouraging increases did not eliminate shortages of power which persisted in 1976/77 and the first half of 1977/78. This reflects a very low rate of capacity expansion rather than inefficiency in the operation of the system. Generating capacity throughout India, excluding 2,000 MW of non-utility capacity, currently stands at about 25,000 MW. 25. While per capita demand for electricity has been rising in India, it remains among the lowest in the world at about 140 kWh per annum. Overall demand is dominated by industry, which accounts for about two-thirds of all electricity sold. Agriculture and irrigation account for another 12 to 13% of demand. Growth of consumption has been particularly rapid in the rural areas where more than 80% of the total population live. The number of elec- trified villages grew from just over 3,000 in 1950/51 to some 200,000, or about one third of all villages in India, by 1975/76. The number of irriga- tion pumpsets and tubewells which have been energized increased from 21,000 in 1950/51 to 2.4 million by the end of 1973/74. An additional 1.2 million are expected to be energized by the end of 1978/79 and a further 2.1 million by the end of 1983/84.  -9- 26. To help cope with the power scarcity and to strengthen central planning and coordination of the power system, the Government of India has recently undertaken to construct and operate large Centrally owned generating stations. For this purpose, the National Thermal Power Corporation and the National Hydro Power Corporation were established in November 1975, with authority to design, construct, own and operate generating and transmission facilities and supply power in bulk directly to State Electricity Boards. Additionally, GOI has authorized Tata Electric Companies (TEC), a utility company in the private sector, to expand its Trombay power station in the State of Maharashtra with a single 500 MW unit extension which would be the large generating unit installed in India. Bank Group Operations in the Power Sector 27. The Bank has made seven loans to India for power projects amounting to US$179.5 million and IDA has made nine credits totalling US$596 million. All the loans and credits for generating plant (excluding the Singrauli thermal power project (Credit 685-IN)), the Beas project (Credit 89-IN) and the first two transmission projects (Credit No. 242-IN and Loan 416-IN) have been completed. The Singrauli project is still at the early implementation stage and no disbursements have yet been made; in the case of the Rural Electrification project (Credit 572-IN), disbursements to February 28, 1978 were US$10.3 million. Of the finance made available for the remaining trans- mission projects (Credit 377-IN of May 1973 and Credit 604-IN of January 1976), US$80.6 million has been disbursed by January 31, 1978 in the case of Credit 377-IN and in the case of Credit 604-IN, approximately US$44 million had been committed by January 31, 1978 in respect of contracts awarded or under issue. The ongoing power transmission projects and the rural electri- fication project are proceeding satisfactorily notwithstanding delays in initial implementation and in preparation of specifications for the more sophisticated load despatch equipment. The Singrauli thermal power project is also proceeding satisfactorily. 28. With regard to the Trombay thermal power station, a Bank loan of US$16.2 million (Loan 106-IN) was made in November 1954 to Tata Electric Companies (TEC) to finance the construction of the original 125 MW thermal power station consisting of two 62.5 MW generating units, boilers and ancillary plant together with transmission facilities. A second Bank loan of US$9.8 million (Loan 164-IN) was made in May 1957 to finance a third 62.5 MW generating unit and associated plant. A fourth unit (150 MW), which was financed with U.S. assistance, was commissioned in 1962. Maharashtra State Power Sector 29. Prior to 1954 the more populous areas of Maharashtra State were supplied by private electricity undertakings operating under license. Upon its establishment in 1954, the Bombay State Electric Board took over supplies in Gujarat and part of Bombay. In 1956 the Bombay SEB area was extended to include parts of Madhya Pradesh, Hyderabad and Kutch; then in 1960 the Board was split in two to form the Gujarat State Electricity Board (GSEB) and the Maharashtra State Electricity Board (MSEB). During this time the individual private electricity undertakings were gradually taken over, and only four principal licensees are now left.  - 10 - 30. The four major licensees operate within their concession areas, and MSEB generates and distributes electricity throughout the rest of Maharashtra. With the exception of TEC, the licensees are only distri- butors and buy power in bulk from MSEB and TEC. TEC, which is by far the largest licensee and operates its own generating plant, is unable to meet the demand on its system and also purchases up to 500 MW of power from MSEB. 31. As of March 31, 1977, MSEB had 12 power stations (five hydro and seven thermal) with a total installed capacity of 1,879 MW, including Koyna and other hydro power stations leased to the Board by the State Government for operation and maintenance. TEC has four power stations (three hydro and one thermal) with a total installed capacity of 622 MW. In addition, there is the GOI-owned Tarapur nuclear power station with a capacity of 400 MW, which is shared by MSEB and GSEB, and the 40 MW Chola thermal power station (owned by Indian Railways), which is connected to the TEC system. 32. In Maharashtra, there have been power cuts on a sustained basis since 1972 amounting to some 30%, the brunt of which has fallen on industrial consumers. The result is that, following a growth rate of around 10% per 1970 and 1971, load growth in Maharashtra fell to an average annual growth rate around 5% during the next five years. Total installed capacity of MSEB and TEC is about 2,700 MW (including 200 MW from Tarapur); capacity utilization averaged 65% during the year ending March 31, 1977, with total energy sent out at about 13,200 million kWh. Sales of energy amounted to about 10,560 million kWh, but it is estimated that this figure would have been some 2,000 million kWh higher in the absence of restrictions. About 28% of all industry in India is concentrated in the Greater Bombay area and this category of consumer accounts for about 68% of the demand in Maharashtra State. 33. Maharashtra's long-term power sector strategy is inextricably linked with overall development of the Indian power sector. This envisages, as a first stage, the elimination of restrictions on the availability of power. Demand for power for the Maharashtra State in 1977/78 is projected to be about 2,480 MW, or about 13% of national demand. By 1983/84, in the absence of supply constraints, the forecast power requirement will grow at a rate of about 10% per annum to 4,500 MW. The Tenth Annual Power Survey for India forecasts an acute power deficiency in the range of 15% to 20% in Maharashtra through 1983/84. 34. The long-term objective in the Indian power sector is the develop- ment of a national power system, a prior step being the integration of the State power systems to form Regional power systems. In the case of the Western Region, Maharashtra's system is already interconnected with the systems of Gujarat and Madhya Pradesh, but the three systems are not yet equipped for full integrated operation on a Regional basis. Progress toward this goal has been slow; sophisticated load despatch equipment is now on order and the State load despatch centers should be fully equipped in 1978. Integrated Regional operation of State systems will also require further pro- gress toward developing an agreed system of tariffs and working conventions for the exchange of power among States.  - 11 - PART IV - THE PROJECT 35. The proposed project was appraised by a mission which visited India in July/August 1977. The appraisal report (No. 1788b-IN, dated March 28, 1978) is being distributed separately to the Executive Directors. Negotia- tions were held in Washington in February 1978. The Borrower was represented by Mr. K.M. Chinnappa, Managing Director; the Guarantor by Mr. R. Swaminathan of the Department of Economic Affairs and Mrs. 0. Bordia of the Ministry of Energy. A Supplementary Project Data Sheet is attached as Annex III. Project Description 36. The proposed project consists of construction and installation of a 500 MW generating unit, together with boiler, electrical and mechanical plant including antipollution equipment and associated works. It will be erected on reclaimed land (ash disposal area) owned by TEC adjacent to the existing 337.5 MW Trombay power station. The infrastructure facilities (coal handling, water and transmission) are already available adjacent to the site and would be extended to meet the requirements of the project. The project is scheduled to go into commercial operation in December 1982. This would be the first generating unit of its size in India and, as such, it represents a significant technological advance. Project Cost and Financing 37. The project cost is estimated at US$209.4 million equivalent, including US$90.8 million in foreign exchange cost. The proposed Bank loan would provide about 50% of the project cost. The financing plan is shown in the Loan and Project Summary at the beginning of this report. TEC has agreed to increase its equity by March 31, 1982 (Section 3.01(b) of Loan Agreement). The loans from local financial institutions (a consortium led by the Indus- trial Credit and Investment Corporation of India Limited) are expected to be made available for 20 years, including 5 years' grace, at 13% per annum. The completion of satisfactory arrangements for the provision of these loans is a condition of effectiveness of the Bank loan (Section 7.01(a) of Loan Agreement). For the balance of new capital requirements, Maharashtra Government has indi- cated that, together with necessary deposits which TEC would collect from its customers, it would provide up to Rs 172 million (US$20 million equivalent). Procurement and Disbursement 38. Except for minor items of equipment costing US$100,000 or less, all equipment financed under the proposed loan would be procured through international competitive bidding in accordance with the Bank's guidelines. The proceeds of the loan would be disbursed against 100% of the cost of consultants' services (US$7 million) and of the cost of electrical and mechanical equipment (US$90 million). US$8 million would be unallocated. Indian manufacturers competing under international competitive bidding would be granted a preference margin of 15% or the current rate of import duty, whichever is less. It is expected that Indian manufacturers will submit the  - 12 - lowest conforming bids for most of the items financed under the loan. In order to permit the consultants to proceed with design work, up to US$250,000 of expenditures for this purpose would be financed retroactive to March 15, 1978. 39. The turbo-generator and specific associated equipment would not be financed under the proposed Bank loan. The former would be procured from Bharat Heavy Electricals Ltd., which has recently concluded a cooperation agreement with Kraftwerk Union of West Germany; the associated equipment would be subject to international competitive bidding. A loan of DM 85 million (US$37 million equivalent) is expected to be made to the Government of India by Kreditanstalt fur Wiederaufbau (KfW) of West Germany, to meet the foreign exchange cost of the turbo-generator and associated equipment; an equivalent amount will be raised for the project as part of the borrowing from Indian financial institutions. Project Implementation 40. TEC would be responsible for project implementation. TEC consists of three separate private sector companies 1/ established in 1910, 1916, and 1919, which operate as a group under the same management. Each of the three companies operates under an individual license, and the Trombay Thermal Power Electric License 1953, under which the Trombay power station is operated, is granted jointly to all three. TEC forms part of the Tata group of enterprises, which has substantial financial resources, an excellent credit rating, first- class managerial ability, and a long and successful history of operations in many industrial and other fields in India. TEC itself is also well managed and operated in accordance with sound utility and commercial principles. Its management and staff are fully competent to implement the proposed project efficiently. 41. The four licenses involved expire on June 30, 1980. The Government of Maharashtra has agreed in principle to an extension of TEC's licenses for a period coterminous with the last repayment of the Bank loan. Among the conditions of the license extension, which is expected shortly, is an agreed redefinition of TEC's licensed area of supply. TEC and MSEB would begin dis- cussions on July 1, 1984 to arrive at a mutually acceptable agreement for further redefinition of TEC's licensed area; GOI has agreed to obtain, as a condition of loan effectiveness, an undertaking from the Government of Maharashtra that this will not adversely affect TEC's financial operations (Section 3.06 of Guarantee Agreement). Formal extension of the licenses is a condition of disbursement of the Bank loan (paragraph 4 of Schedule 1 to Loan Agreement). 42. The project is being engineered by Tata Consulting Engineers, the principal consultants, who are experienced in the design and supervision of construction of power generation and transmission projects, both in India and 1/ The Tata Hydro-Electric Power Supply Company, Ltd., The Andhra Valley Power Supply Company, Ltd. and The Tata Power Company, Ltd.  - 13 - abroad. However, since they have no previous experience in the engineering of generating units with a capacity as large as 500 MW, TEC has agreed to engage consultants experienced in the design and construction of units of this size to assist Tata Consulting Engineers in the more sophisticated areas (Section 3.02 of Loan Agreement). Ebasco Services Inc. of the US have since been engaged as review consultants and will assist Tata Consulting Engineers in the basic engineering and detailed design of the project and in other areas as required. 43. An acceptable project implementation plan has been submitted to the Bank. Design work is already underway, as is the preparation of speci- fications and tender documents for the steam generator, which has a long lead time, with a view to award of the contract by June/July 1978. 44. Sea water would be used for cooling purposes through an extension to the existing pump house. The Bombay Municipal Corporation, which is the source of fresh water for the existing Trombay thermal power station, has confirmed that it will be in a position to meet the additional demand (about 1.2 million gallons per day) when the 500 MW unit is commissioned. No asso- ciated transmission is required, as power from the proposed project would be fed into the existing 220 kV network through an extension to the switchyard at the power station. 45. The boiler would be designed for triple firing (oil or gas from the Bombay High offshore fields or coal from Central India coal fields). The estimated annual coal requirement of the 500 MW unit is 1.35 million tons, but to provide for greater use of coal by existing units 3 and 4, plans should be made based on the assumption that up to two million tons a year may be required. 1/ GOI has agreed to take all necessary steps to ensure that adequate coal supplies are available and that adequate rail facilities are available to transport at least two million tons a year to Trombay by the time the project is completed (Section 3.04 of Guarantee Agreement). 46. The location of the new 500 MW generating unit is in an industrial area on the outskirts of Bombay on coastal land adjacent to the existing Trombay power station. Since there are no residential properties in the near vicinity, no resettlement problems are involved. TEC has agreed to take adequate measures to minimize the adverse ecological effects of the project, in accordance with standards prescribed by national, state or local authori- ties (Section 3.06 of Loan Agreement). The 500 MW generating unit will be equipped with an electrostatic precipitator with a stack which will be designed for a height of 500 feet to ensure greater dispersion of emissions, together with heat dissipation and ash disposal facilities. The Project includes provision for a sulphur dioxide removal system. However, as the Singrauli coal which is being used at Trombay has a relatively low sulphur content (0.3-0.6%), the emission level is not likely to provide an environ- mental hazard. Consultants would be engaged to carry out a study to determine appropriate measures, if any, which might be necessary to remove sulphur dioxide from the flue gases in order to meet national, State or local envi- ronmental standards. 1/ Units 1 and 2 are equipped for oil firing only.  - 14 - 47. The conditions laid down by GOI in approving the proposed credit include a requirement that TEC make available to the Central Electricty Authority and Bharat Heavy Electricals Ltd. the expertise acquired in the design, construction and operation of the 500 MW generating unit to be installed under the project, and to make available facilities for training a reasonable number of personnel selected by GOI in the construction, opera- tion and maintenance of the 500 MW unit. TEC Finances 48. TEC has a successful financial record within the limitations of the licenses and regulations under which the three companies operate. TEC's earnings are largely regulated by the Electricity (Supply) Act, 1948, which permits the Companies to adjust tariffs once a year to cover operating ex- penses (including depreciation, interest and income tax), certain appropria- tions to statutory reserves, other special appropriations and a margin for profit. While the Act places an effective ceiling on the earnings of a licensed company, TEC has consistently earned profits and has paid dividends regularly on its share capital. Investment has been financed primarily from equity and loan capital, along with a relatively small amount of internally generated funds. TEC's debt outstanding as of March 31, 1977 represented 43% of its capitalization. 49. TEC's investment plan covering the period of six years from 1977/78 to 1982/83 forecasts an investment of Rs 1,984 million (US$230.7 million equivalent), including US$209.4 million for the Project. TEC's financial forecasts show that cash generation shortfalls would emerge in 1983/84 and later years, due to the fact that the additional annual repayment of its pro- ject loans would amount to Rs 98.4 million (based on 15 years repayment), whereas the additional cash flow being provided by the annual depreciation on the project (based on a life span of 30 years) would be only Rs 51 million. TEC has therefore agreed, for purposes of determining tariffs under the Elec- tricity (Supply) Act from 1983/84 to include a special appropriation for debt redemption in such amount as may be necessary each year to meet the cash shortfall, and GOI agreed to obtain an undertaking from the Government of Maharashtra that the permissions necessary for this purpose would be granted as a condition of loan effectiveness (Sections 5.04 and 7.01 (c) of Loan Agreement and Section 3.06 of Guarantee Agreement). 50. Although TEC's overall financing plan shows that revenue would only provide 3% of the total investment during the six year period to 1977/78, interest during construction amounting to Rs 340 million (US$40 million equiv- alent) will not be capitalized. TEC's tariffs will be raised each year by the amount of the accruing interest to discharge this liability. This addi- tional revenue to meet interest during construction would effectively raise the proportion of the investment program to be financed from 3% to 17%. This would be satisfactory. 51. TEC's borrowing ceiling was recently raised to Rs 2,379.3 million (about US$297 million equivalent), which is more than adequate to cover its forecast borrowing requirements. The TEC's debt/equity ratio is forecast to rise to 73/27 by 1982/83 before declining to 67/33 by 1985, which is  - 15 - reasonable. In order to alert the Bank to any proposed borrowing which would exceed the forecast borrowing, TEC has agreed to consult with the Bank before raising the borrowing ceiling above its present level (Section 5.03 of Loan Agreement). Project Benefits and Risks 52. The proposed project was compared to alternative means of providing equivalent power to the Bombay area. Oil and natural gas have more valuable alternative uses (i.e., as feedstock) and are not intended as a long-term fuel for power generation. Hydro-electric and nuclear alternatives were ruled out because of their long gestation periods and because the most readily available and economic hydro sites are being developed in parallel and are therefore supplements rather than alternatives to the Trombay development. Comparison with a 500 MW power station at a coal pithead indicated that, at a discount rate of 6% or more, the project's costs are less because it is less capital intensive (i.e., the project's higher fuel costs are more than offset by the lower costs for associated transmission and infrastructure and by the shorter completion time). 53. The project's internal rate of return, comparing revenues based on expected tariffs with economic costs, is estimated at 14.2%. This result is affected somewhat by changes in the main variables: a 10% reduction in revenues would reduce the return to 11.8%, and a 10% increase in capital and operating costs would reduce it to 13%. 54. The major plant (turbo-generator, steam generator and associated equipment) will be manufactured by firms with long experience in the manu- facture of 500 MW and larger generating units and project risks during fabrication, installation and initial operational phases should not prove a serious problem. TEC's system designs and plant specifications are subject to review by Ebasco Service, Inc. of the U.S., which is experienced in the design and supervision of construction of projects of this size. In other respects, the project risks are no greater than can normally be expected with other developments of this nature. PART V - LEGAL INSTRUMENTS AND AUTHORITY 55. The draft Loan Agreement between the Bank and the Tata Electric Companies, the draft Guarantee Agreement between India and the Bank, and the Recommendation of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement are being distributed to the Executive Directors separately. 56. Special conditions of the project are listed in Section III of Annex III. Special conditions of loan effectiveness are the provision of loans from local financial institutions, the completion of security arrange- ments and the securing of permission from the Government of Maharashtra with  - 16 - respect to the admissibility of certain expenses for tariff purposes (Section 7.01 of Loan Agreement). 57. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 58. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President March 30, 1978  ANNEX I INDIA - SOCIAL INDICATORS DATA SHEET Page 1 of 4 LAND AREA (THOU KM2) -----o-4---------------------------- INDIA REFERENCE COUNTRIES (1970) TOTAIL 3280.5 MOST RECENT AGRiC. 1780.7 1960 1970 ESTIMATE INDONESIA PHILIPPINES BRAZIL** _ _---_-_--__---_--- - -- ------- _a -------- _;--- ---------__ -- _ -_---------- GNP PER CAPITA (USS) 60.0* 100.0* 150.0/a* 130.0 230.0* 550.0* POPULATION AND VITAL STATISTICS POPULATION (MID-YR, MILLION) 434.9 547.6 620.4/a 117.6 36.9 92.8 POPULATION DENSITY PER SQUARE KM. 133.0 167.0 189 0/a 62.0 123.0 11.0 PER SQ. KM. AGRICULTURAL LAND 252.0 308.0 348.O07T 414.0 375.0 49.0 VITAL STATISTICS CRUDE BIRTH RATE (/THOU, AV) 43.2 41.0 37.0 45.9 44.2 36.4 CRUDE DEATH RATE (/THOU,AV) 23.9 19.0 17.0 20.6 13.2 9.9 INFANT MORTALITY RATE (/THOU) 139.0/a ., 130.0 . 80.0 110.0 LIFE EXPECTANCY AT BIRTH (YRS) 41.7 47.2 49.5 . 55.6 5S.4 GROSS REPRODUCTITN P8TE 3.2 2.9 2.8 3.2 3.3 2.G POPULATION GROWTH RATE (%) TOTAL 2.0 2.3 2.2 2.0 3.0 2.9 URBAN 2.5/b 3.2 3.1 3.7 /a 4.0 5.0 URBAN POPULATION (% OF TOTAL) 17.9 19.8 20.6 17.5 /b 27.6 56.0 AGE STRUCTURE (PERCENT) 0 TO 14 YEARS 41.0 41.6 40.1 /b 44.0 45.6 42.0 15 TO 64 YEARS 55.9 55.3 56.7 7F 53.5 51.6 55.0 65 YEARS AND OVER 3.1 3.1 3.2 7F 2.5 2.8 3.0 AGE DEPENDENCY RATIO 0.6 0.8 0.9 0.9 0.6 ECONOMIC DEPENDENCY RAVIO 1.1/C .,1/a 1.2 Ic .. 1.5 1.5 FAM;LY PLANNING ACCEPTORS (CUMULATIVE. THOU; 71.0 14595.0 37658.0 259.3 354.0 250.0 USERS (% OF MARRIED wOMEN) .. . 16.7 *- 2.0 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSAND) 175000.0 218000.0 248000.0 /a .. 12400.0 29400.0 LABOR FORCE IN AGRICULTURE (x) 71.0 69.0 68.0 55.0 /a 40.4 UNEMPLOYED (x OF LABOR FORCE) 1.i/d .. 1.7 .. 7.6 7.5 INCO-Ml DISTR!9L'T!C . OF PRIVAVE INCOME RECD Bi- HIGHEST 5% OF HOUSEHOLDS 26.7 25,0/b ,, .. . . 3.0 /a HIGHEST 20% OF HOUSEHOLDS 51.7 53.1 7F . .. .. 62.o7S LOWEST 2D% OF HOUSEHOLDS 4.1 4.77 . . * * * 3.071I LOWEST 40% OF HOUSEHOLDS 13.6 13,1 .. .. *. 1o.o0F DISTRIBUTION OF LAND OWNERSHIP X OWNED BY TOP 10% OF OWNERS 45.0 X OWNED BY SMALLEST 10% OWNERS 1.5 HEALTH AND NUTRITION POPULATION PER PHYSICIAN 5840.0/e f4890.0 4220.o 26370.0 . 1910.0 POPULATION PER NURSING PERSON 5310 0 221c 3680.0/d 7630.0/c . 2 POPULATION ,'ER HOSPITAL BED S9 O71610.o- .. 1640.Ou 850.0 260.0-- PER CAPITA SUPPLY OF - CALORIES I% OF REQUIREMENTS) 95.0 92.0 89.0/e 91.0 93.0 109.0 PROTEIN (GRAMS PER DAY) 55.0 53.0 52.07e 43.0 45.0 64.0 -OF JHICH ANIMAL AND PULSE 19.0 16.0 .. 14.0 22.0 39.0 DEATH RATE (/THOU) AGES 1-4 44.0 - . * 6.6 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 38.0 65.0 79.0/b 65.0 ,13.0 87.0 SECONDARY SCHOOL 9.0 .. 28. 07u 12.0 - 49.0 YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 12.0 12.0 11.0 12.0 10.0 11.0 VOCATIONAL ENROLLMENT (7. OF SECONDARY) 6.0 60o/d ..29.0 6.0/b 17.0 ADULT LITERACY RATE (x) 24.0 33.0Z 36.0/b,f 59.0 .. 14.0 HOUSING PFRSONS PER ROOM (URBAN) 2.6 2.6 2.1 1.0 OCCUPIED OWELLINGS :.1Tr:CUT PIPED WATER (%) 7 ACCESS TO ELECTRICITY 76.0 73.0/c (% OF ALL DWELLINGS) , . . . . .0 RURAL DWELLINGS CONNECTED TO ELECTRICITY (%) ' ' 7. 8.0 CONSUMPTION RADIO RECEIVERS (PER THOU POP) 5.0 21.0 24.o 114.0 45.0 60.0 PASSENGER CARS (PER THOU POP) 0.7 1.0 1.0 2.0 6.0 2S.0 ELECTRICITY (KWH/YR PER CAP) 4e.0 114.0 143.0 20.0 235.0 491.0 NEWSPRINT ~KG/YR PER CAP) 0.2 0.3 0.3 0.3 2.0 2.7 SEE NOTES AND DEFINITIONS ON REVERSE  ANlNEX I Page 2 of 4 NOTES Unless otherwise noted, dact for 1960 refer to any year between 1959 and 1961, for 1970 between 1968 and 1970, and for lost Recent Eftimate between 1973 and 1975. *.NP per capita date are baned on thb World Bank Atlas methodology (1974-76 bhoie). ** Braoil has bees selected an an objective country becanne of it. size osd comparable problems of regional i-eqolity. INDIA 1960 /a 1951-61 average; b 1951-60; /c Ratio of population cder 15 -nd 65 and over tc lbcr force age 15 and over; jd Registered applic-nts for work; in 1962; /f Regiotre-d, not all pro-ticirg in ofe noustry; /g Including midwive-; /h 1958; /i 1960-62. 1970 Ia Ratio of population coder 15 and 65 and over to labor force age 15 end cent; /b 1967-68; /c Incloding midwives; /d 1967. MOST RECENT ESTIMATE: /a 1976; /b 1971; /I Ratio of popolation onder 15 end 65 and over to labor force age 15 and over; /d Including nidwiven; c/ 1969-71 average; /f Popolation 10 yearn ad over. INDONESIA 1970 /a 1961-71; lb 1971; /c Inc-idig midwives. PIILIPPINES 1970 /a As percentage of employment; /b Not iocloding private vocational -h-ools BRAZIL 1970 Ia Economically active population; /b Hopital personnel; It Inaide only. RfI, Novevber T, 1977 DEPINITIONS OF SOCIAL INDICATORS Land area (thoe an51 PopuaIti-n per soreite Perene - Population divided by comber of practiclog otal T- Total srface area Omp,,icing iled area and Inland waters male an,d female greduate nor"ee - trained' e '-ertified" nursen. and Aoric. - M-ot reces en.t iate of agrioultural area need temp-carily or pesta- annili-ry personnel with training o e-perience. sently far crepe, pastures, ma-ket & kitches gardens or to lie fallw. Populatior pen hospital bed - Population divided by comber of hospital beds available in peblie and private general and specialized hospital and GNP per capits (US$) - GNP pee capita ostimstnn at torrent market prices, rehabilitation centers; esinldes sorsing homes and eatablish..ent foe cslcnlated by same conversioi method as World Bank Atlas (1973-75 basis); cntedisl and prevestive ears 1960; 1970 snd 1975 data. Per .a.ita tpply of ealenies (2 of cequirt-ts) - Compoted inns energy qoqivaleso of set food sepplies available in eontr per C pita per day; Populatin and vital taitistgs av-ilsble snpplies conpniss domestic production, imports less exponts, and Ponlntion (mid-year millions) v of July first: if cot available, overage changes in stock; set sspplies e-cIde animal feed, seeds, qsansities used of two end-year ettimates; 1960, 1970 and 1975 data, is food pnocessing end losses is distribution; requiremests wre estieaned by FAO bosed en physiological needs foe nensal activity and health -onsid- Po,Elatio density - per sqnane kc - Mid-ye-a pepulation per *quare kilometer sninS envinosesnal tmnperatnte, body wights, age and ass distribstions of (100 hectares) of total area popolation, and allowing ID't gee wats ate hoeaehld level. Popclation density - Pee seeae ko of a.i.. land - Compoted en sbove for Per senits sneely of protein israms par day) - Protein content of per capita agnic-lt-cal land only met sopply of fond pen day; et sapply of food is defined as above; reqcirn- ments for a11 nenstnies established by ITSDA Economic R.asaneh Sneices Vital statistics provide fee a minimuman aliwnce .f 60 grams of total protein per day, and Crude birth rste see thossnd. even.e. - AsnesS live births per thobsand of 20 frnam of animal and pusis peeteti, of which 10 grams ahbuid be animal mid-yesr populatoni; ten-year s.itlsesein averages ending is 1960 and T'CC, protein; tbsasaetndords see lower 1-tn nhose of 75 grams Of total pr-tein and five-year aver-ge ending in 1975 for mast necent esti te, and 23 grm-s of animal protein as f-average lot the wrld, proposed by FAO Crude death rote per thousand. average - Abns-I deaths per thassand of mid-year in the Third Warld Peed SaYey. population; ten-year arithtic averngea ending iE 1960 and 1970 and five- Per cnites p"rtein nonply from snimni smd pusel - Protein supply of fend year .ves ge ending in 1975 for most recent etimatn. derived finn animals and plses is grams per day. m _ant menlity rate (/thf c) - Atnnal deeths of istane-unde- one ye-r of age Death rate i/then) sans 1-4 - Ann-l deoths per thousand in age group 1-4 per ehonsand live bireha. years, to children is thio age group; enggesetd as an tidicator of Life seoceancy at birth (Yea) - Average nember of yease of life remaising at 1ainsttition. birth; nsually five-year averages ending in 1960, 1970 and 1975 fte develop- ing constrict. Edn-ation Gros reproduction rate-soerage number of lie da-gstersa womas will bean Adlawted enrollment ratio - erimary school - Enrollment of a11 ages as pen- is her normal repr-ductive period if she expeciences present age-apecific cestage of primary school-age popolation; inclndes children aged 6-11 years fertility eaten; .s..lly fivs-year averages ending in 1960, 1970 and 1975 bat adj_ted foE different lengths of primary edunation; foe countries with for developing c.n.tries. niversal edncation, enrollment may esesed 1007, saince ome poplin are below Population grce"th esse (71) - eottl - Compound a.nnal gro-th c-ets of mid-ye-r or aboye the official school age. popalation for 1950-60, 1960-70 and 1970-75. Adlabted emnollFetm ratio - necandory school - Compoted as sbove; -scondary Popalation growth rate (%) - urban - Compnted like growth rate of total edueatiam requires at leaset f.e years of appro-ed prtiary imatrcction; popusatios; different definntentl of -rban areas my affct cparability of provides g.n.a l, vocational or teach en e ining insernt-i-nm for pousi data smang countries. of 12 en 17 yetar of *ae; cornespondence coarsen are generally em..Idod. Urban PosPlation (7 of total) - Ratio of -rba- to total population; different Years of schooling provided (first amd second levels) - Total years of definitions of urban areas may affect comparability of data among countriea- choeling; at secondary levI l, vocational imn-ttution may be psrtially or completely e-cluded. one structure (pec-est) - Children (0-14 years), anekige-age (15-64 y-aes), Votati-1al enrolLment (% of s--ondary) - V-ta-iona1 isoticuci-ns inc-lde and retired (65 years and over) an peroentages of mid-ypor population tebhnical, industrial or other progroms which operate indenepden-ly at ns Agi denepden-y ratin - Ratio of population onder 15 aod 6h and over t hose departments of secondary fnocitutions of ages 15 thr-ogh 64. Adalt literacyrate (7) - Literate adults (able to read and weitni as per- Economic dependenc ratio - Ratio of popslation under 15 and 65 and over to cectage of total adult populacion aged 15 pears and over the Iabor force In age iroap of 15-64 yearn. Familv planning-accneoro (cumulacive, then) - Cunulative conkbr of acceptorn Hoo ing of birth-control devices under onespics of national family ponning prograr Persons per room inches) - Averags number of persons per room in noonpied since inception. conventional dwellings in orban arens; dwellings eexcld n-n-pernentn Family plasnins-users (71 of married women) - Pecnos-agns of carried nonen of structuesa and unoccepied parts. child-hearing age (15-44 yearn) who ate birth-control deviceI to all narrind Occupied doellingn without pined water (2) - Occpied convectional dwellings nanny i,, some age gronp in orban and rurai areas withsot inside or outside piped wactr focilitins ya percentage of alI oncupied dwelling. Deployment o~~~~~~~~~~~~~~~~ccese en electricity (71 of all dwellings) - Conventional dwellings with Tata1 lab-r force (thoasand) - tEonominolly antics persons, including armed eleoricity in living quarters as percent of total dwellings in onbon and fortes and unemployed hot excluding hosse.ive-, studens, etc.; definitioss renal ares. in vanions cosntries are not compsrable. -ual dwellings connected to elenti- ity (%t ) - Compsted as aboye for enrol Labor force is agriculeure 171) - Agricsltr-l labor force (is fanning, fore-try, dwellings only hosting and fishing) as percentage of total labor foece semeloyad (71 of labor force) - Umeplayed are esmIly defined as persons who consontmon are able and villing to rake a job, ont of a job on a given day, remained net Radio receivers (Aee then pop) - 611 types of receivers for radio broadcast of a Job, and seeking work fora specified o not exceeding one to general public per thoand of popelation; ecldee onlicensed rcei week; map soe he comparable betweeencountries dae to different definitiesI in co-ntries and in years when registrotion of radio nets was is efecest; of unemploynd and soure of data, e.g., employment office statistics, Is pbe data for recent yearn may not be comporabin since most couneries abolished surveys, compoisory onomployment insarance bienssing. Paea Pa cr (e then non) - Passenger cars -opnise motorcars .attng Incute distributionc-rPercentage of private inccme (both in cash and kind) lens than eight petron; e..cledes ambolane, hease amd ciltaryt received by richent 5%, ricebst 2071, penment 2071, and p--rest 40% of hpuse- vehinles, hold. Eletricity (kwh/yr per cap) - Ansual c-neompoipe of ind-strial, --mercial pebli and p atvae electricity in kilowatt beer Per capita, inner ally Di-stribution of land wsnershin -Percentages of land do-ned by wealthiest 10% based -n prid ce datat,ithto_ aliowance for loses in grids bht alo- and poorest 1071 of land nerses oing for imponts and emparts of electricity. HNewepnimt (kg/yr pe- cap) - Per -apita annol tonasptieon in kilagrame Hea1tb and Nutrition sotimated from d-teg predonsion pies net ip-nta of m-wprie.t Popolation per physician - Populatian divided by somber of practicing physicians qualified from a medical school at universty level.  ANNEX I Page 3 of 4 ECONOIIIC DEVELOPMENT DATA GNP PER CAPITA IN 1975 a/ USS 1SO GROSS NATIONAL PRODUCT IN 1975/76 AE_EBAL RATE OF GROWTH_ (_, constant Pices) 2/ 1158 Bln. ..A...... 1960/61-1964/65 196S/66-1969/70 1970/71-1974/75 GNP at Market Prices 82.0 100.0 5.8 3-7 2.6 Gross Domestic Investment 46.7 20.1 Gross National Saving 16.0 19.3 Current Account Balance -0.7 -0.8 Resource Gap -1.5 -1.8 OUTPUT, LABOR FORCE AN) PRODUCTIVIT IN 1971 Value Added (at factor cost) Labor Foree V.A. Per Worker USS Bin. 96 Uil. 1 jSS 1% of Nat ional Average Agriculture 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services 16.3 31.1 J0.2 16.7 SL2 186 Total/average 52.6 100.0 180.4 100.0 292 100 GOVERNMENT FINANCE General Government Central Government (Rs. Bin __ % of GD? (Rs.IBl 7T(%of GDP _ 1975/76 1975/76 1973/74-1975/76 t975/76 1975/76 1973/74-1975/76 Current Receipts 133.34 18.5 16.7 79.11 11.0 9.8 Current Expenditures 118.77 16.5 153 70.05 9