Colombia - Bogota Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2003 FILE COPY PROJECT PERFORMANCE AUDIT REPORT COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) March 29, 1978 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. s fOR OFFUSE ONLY PROJECT PERFORMANCE AUDIT REPORT COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) Table of Contents Page No. Preface Project Performance Audit Basic Data Sheet Highlights Project Performance Audit Memorandum I. Project Summary 1 II. Points of Interest 4 III. Conclusions 9. Appendices A, B and C. Attachment: Project Completion Report Introduction Al Project Preparation and Appraisal A2 Project Implementation, Operation and Cost A4 Operating Performance A7 Financial Performance A10 Institutional Performance A13 Project Justification A13 Conclusions and Important Lessons to be Learned A14 Tables I - 4 Maps This document has a restricted distribution en may be used by recip6sats only in the performance of their offcial duties. Its contents may se otherwise be disclosed without WorkM Bank authorization. s PROJECT PERFORMANCE AUDIT REPORT COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) Preface This report presents a performance audit of the First Bogota Water Supply Project for which Loan 536-CO of US$14.0 million was made in 1968. It consists of a memorandum prepared by the Operations Evalua- tion Department (OED) and a Project Completion Report (PCR) prepared by the Bank's LAC Regional Office. OED has reviewed the PCR against the appraisal report and other documents, discussed the project with Bank staff, and with o'ficials of the borrower and Government during a brief OED mission to Colombia in August 1977. The generous help given by the officials of the Government and the borrower in the preparation of this report is gratefully acknowledged. The audit summarizes the analysis and conclusions of the PCR and also develops some points not fully covered in the PCR.  PROJECT COMPLETION REPORT BASIC DATA SHEET COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) Key Project Data Item Appraisal Actual or Expectation Current Estimate Total Project Cost (US$ million) 35.3 47.5 a/ Overrun (%) 35 a/ Loan Amount (US$ million) 14.0 14.0 Disbursed ) - 14.0 Cancelled ) nil Date Physical Components Completed mid 1971 mid 1973 a/ Proportion Completed by mid 1971 (%) n.a. Proportion of Time Overrun (%) 30 Incremental Financial Rate of Return (%) 15 10 Financial Performance Satisfactory Poor Institutional Performance Satisfactory Satisfactory a/ Excludes works subsequently added to the project which are estimated to have cost US$3.6 million, and were completed in 1975. Other Project Data Item Original Actual or Plan Revisions Eat. Actual First Mention in Files 1965 Government's Application 1965 Negotiations 4/10/68 Dec. 1965 Board Approval 5/28/68 Loan Agreement Date 6/03/68 Effectiveness Date 8/07/68 Closing Date 6/30/72 Several 12/31/75 Borrower Empresa de Acueducto y Alcantarillado de Bogota. Executing Agency do Fiscal Year of Borrower Calendar Year Follow-on Project Second Bogota Water Supply Project Loan/Credit Number Loan 741-CO Amount (US$ million) 88,0 Loan Agreement Date May 28, 1971 Mission Data Month, No.of No.of Date of Year Weeks Persons Manweeks Report Preappraisal & 5/66 2 1/2 2 5 6/03/66 Proj. Identification Preappraisal I 10/66 1 1/2 1 1 1/2 11/25/66 Preappraisal 11* 2/67 3 2 6 3/08/67 Appraisal I 7/67 5 2 10 5/06/68 Appraisal Updating 1/68 2 2 4 2/12/68 Sub Total /16 1/2 Supervision I 2/69 3 1 3 3/20/69 Supervision TI 4/69 2 2 4 6/04/6 Supervision t11 10/69 1 1/2 2 3 12/23/69 Supervision IV 1/70 1/2 1 1/2 2/09/70 Supervision V 3/70 1 3 3 4/09/70 Supervision VI * 10/70 1 1/2 2 3 11/10/70 Supervision VII * 5/71 1 1 1 6/08/71 Supervision VI~II * 10/71 1 3 3 12/01/71 Supervision IX * 3/72 1 2 2 4/19/72 Supervision X * 4/72 2 1 2 6/01/72 Supervision XI * 10/72 1/2 3 1 1/2 12/01/72 Supervision XII * 5/73 2 3 6 7/12/73 Supervision XIII * 9/73 1 1 1 10/03/73 Supervision XIV * 3/74 1 2 2 4/02/74 Supervision XV * 10/74 1 2 2 10/25/74 Supervision XVI * 9/75 1 3 3 11/11/75 Sub Total 40 pThis mission was involved with other projects Note: There were two other missions to Bogota,one in July 1970 and the other in March 373.  PROJECT PERFORMANCE AUDIT REPORT COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) Highlights The project was increased in scope and satisfactorily implemented though with some delay and cost overrun. It achieved the objective of eliminating the water shortage which prevailed in the city for several years. However, the extension of the water service to new consumers, particularly to those from the city's lower income areas, was less than projected at the time of the appraisal despite ample supply capacity being available. The Bank made a substantial contribution to the institutional development of the borrower. From a small, understaffed, inadequately or- ganized and geographically fragmented entity, the borrower has developed into a fairly large, technically competent and reasonably well-managed utility despite frequent changes in its top management. However, mainly because of inadequate tariff increases through early 1976 and lower than expected sales, the borrower's financial performance over the last few years had deteriorated and resulted in lower than envisaged investment in water distribution and sewerage disposal systems. The recalculated incremental financial rate of return is about 10% compared with 15% estimated in the appraisal report. The following points may be of particular interest: - reasons for cost and time overruns (para. 2,and PCR paras. 3.03, 3.05, 3.06 and 3.09); - main reasons for lower than expected sales of water (para. 3, and PCR paras. 4.04, 4.05, 8.02, 8.03 and 8.05); - deterioration in the financial performance and its effect on the envisaged investment program (paras. 4,29 and 30 and PCR paras. 5.01-5.04); - contribution of the project towards extension of service to new consumers (para. 8 and PCR para. 4.07); - institutional development of the borrower and areas for further improvement (paras. 11-19 and 32 and PCR paras. 6.01-6.03); - probable impact on the borrower and the main engineering con- sultants from splitting up of project work into a number of contracts (paras. 21-23 and PCR para. 3.09); - role of joint financing and problems imposed upon the borrower by reporting requirements from the three lenders (paras. 27 and 28).  PROJECT PERFORMANCE AUDIT MEMORANDUM COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) SECTION I Project Summary 1. This was the first Bank-financed water supply project in Colombia. The loan of US$14.0 million was made in May 1968 to Empresa de Acueducto y Alcantarillado de Bogota (EAAB), an autonomous municipal agency responsible for water supply and sewerage disposal in the District of Bogota. The loan was to finance a major part of the foreign exchange costs of a water project estimated to cost a total of US$35.3 million equivalent. The remainder of the project's foreign exchange cost, about US$3.0 million equivalent, was expected to be financed through loans from other international lending institutions. 1/ 2. The appraised project was executed as planned. Subsequently, however, its scope was extended by partial regulation and diversion of the nearby Tusaca River. This increas5d the capacity3of EAAB's water supply system from the envisaged 8.5 m /sec to 14.1 m /sec. The original project was completed in end-1973, some two years behind schedule, mainly because of deficient workmanship and subsequent withdrawal on the part of two of the contractors. It had a cost overrun of about 35% in US$ equi- valent, mainly due to underestimates in the local cost component of treatment plants, engineering, and preparation of future schemes. The extension of the project was completed in 1975 and is estimated to have cost US$3.6 million equivalent (PCR paras. 3.02, 3.03, 3.05 and Table 2). 3. Sales of water throughout the period 1971-76 were substantially lower than forecast. 2/ In 1976, actual sales were about 67% of the estimate and, in fact, they were even less than those forecast for FY73. The main reasons for actual sales being lower than forecast were: a) the population of Bogota grew more slowly than projected; b) the consumption per capita did not increase as expected; c) the expansion of water distribution and sewerage disposal systems was lower than forecast; and d) probably the supply deficit prevailing at the time was lower than assumed. In retrospect, it would seem that the estimate of increase in consumption per capita was 1/ Ex-Im Bank of USA and KfW of Germany eventually provided US$4.0 million and US$0.6 million equivalent, respectively. 2/ As given in the appraisal report for the second project. The appraisal report for the first project expected the project to be completed in 1971 and had projected sales only to 1973. The original water demand projections submitted by the borrower are understood to have been substantially lowered by Bank appraisal mission. - 2 - optimistic in relation to the projected growth of Bogota's population, an important part of which was expected to come from migration of population from the poorer regions (PCR paras. 4.02-4.05). The appraisal report also expected an increase in industrial demand for water but did not provide a breakdown between industrial and residential demand forecasts. 4. EAAB's financial performance deteriorated steadily between 1972 and 1976 and was below that anticipated at the time of appraisal, parti- cularly in terms of rate of return on revalued fixed assets which in 1975 was only 4.0% and in 1976 6.1% compared with 9% stipulated in the loan agreement.l/ This was mainly because tariff increases through early 1976 were inadequate to meet rising operating costs and revaluation of fixed assets, and also partly because actual sales of water were lower than forecast. 2/ In terms of internally generated funds, EAAB's performance was relatively better, meeting 23% of its funds requirements during the period 1971-76, compared with 31% forecast on a larger investment program. The lower than expected internally generated funds, liquidity problems and in- crease in actual costs of some components of the envisaged investment program contributed to a reduction in investment in other components of this program, e.g., water distribution and sewerage disposal systems. The actual tariffs in early 1976 were about twice the level forecast at the time of appraisal and, since May 1976, a program for increasing tariffs at the rate of 2.5% per month for 24 months has been underway. The tariff increases are ex- pected to improve EAAB's financial position (PCR paras. 5.01-5.05). 5. The project, part of a long-range master plan, was required to meet the existing shortage of supply and the envisaged growth in demand for water. It was then, and in retrospect still is, the least cost alternative to provide the required capacity. The subsequent extension of the project, built at very low unit costs, created an excess of supply on the system because, for reasons given in para. 3, sales did not develop as rapidly as expected. In retrospect, the construction of this extension could well have been delayed by about two years. On the other hand, the fact that it has already been constructed should enable EAAB's management to give greater attention to the construction of the present large and complex second water project, and to the institutional developments (Section II). In the judgment of this audit, the contingent benefits from the extension more than offset the cost of its premature investment. 6. On its completion, the project (i.e., the original and the exten- sion) totally eliminated the water shortage which afflicted Bogota and EAAB's management in the 1960s and earlier. The present supply capacity, which is well in excess of sales (para. 8), is expected to be adequate to meet the currently projected growth in sales through 1980, by which time the second Bank-supported project is now scheduled for completion (Appendix A). Had the second project been completed in December 1976, as had been originally envis- aged, EAAB's system would have had a large excess capacity. 7. Because the project had cost and time overruns and its capacity is not yet fully absorbed, the recalculated incremental financial rate of return is 1/ The second loan agreement stipulated 10% rate of return effective from 1973. 2/ In addition to the tariff increases being inadequate, their implementation was delayed due to legal complications. - 3 - about 10% compared with 15% estimated at the time of appraisal.-/ On the assumption that the benefits to the population served from a potable water supply are higher than the tariffs, the economic return of the project would be higher (PCR nara. 5.06). 8. The appraisal report did not go into detailed analysis of distri- bution, such as the investment and the increase (in km) in distribution networks, or the increase in the number of connections or in the per- centage of population served. However, some of these aspects were covered in the appraisal report of the second project. The system production capacity more than doubled as a result of the (first) project but, mainly because of lack of funds, the distribution system was not expanded sufficiently to absorb this large increase in capacity. On the contrary, investment in the distri- bution system, even in current terms, was lower than expected at the time of the appraisal of the second project in 1971 (Appendix B). Consequently, the proportion of population served was lower than projected despite the fact that the popuLation growth of Bogota was also lower. Whereas the appraisal report projected water service to 99% of Bogota's estimated popu- lation (of 3.5 million) in 1975, only 76% of the actual population (of 3.3 million) is estimated to have been served. In other words, 24% of the actual population, mainly from the poorer section of the city, was without public water service at the end of 1975. The project eliminated rationing of water to those consumers already connected and enabled the extension of service to an additional one million consumers by end-1976. About 400,000 of these consumers live in the city's low-income area, and this figure is well below the seemingly somewhat optimistic appraisal estimate which projected a 99% coverage of the city's entire population. However, it should be noted that ample system supply capacity has been available to meet the needs of the city's entire population. 9. The project required 5 Bank missions through appraisal. Sub- sequently, 16 supervision missions visited the project. It also involved an unusually large volume of correspondence between the Bank and the borrower. Some 20 consulting firms were employed for design and super- vision of the various parts of the project, and a majority of the consul- tants' contracts were extended at least once. In addition, the borrower had to meet the reporting requirements from other international lending institutions. Nevertheless, the project did become a good vehicle for the Bank to make its major contribution - the development of EAAB as a reasonably well-managed and technically competent institution. These and other points are discussed in Section II. 1/ The appraisal report did not provide the data used in the computation of this rate of return. SECTION II Points of Interest Institutional Development 10. In the first half of the 1960s when the Bank first came on the scene, the water supply sector of Colombia was weak and fragmented. There were many utilities, and several of them in the medium and smaller size towns, though urgently requiring expansion of their facilities, had little prospect of achieving financial viability - a prerequisite for the Bank's financial assistance. However, the utilities in the medium and smaller size towns were the responsibility of INSFOPAL (a government organization) and, therefore, the Bank decided to help INSFOPAL and thus indirectly help these utilities. 1/ 11. Aroun this period EAAB was a small entity (a total system capacity of 5 m /sec); its offices were scattered in several parts of the city; it had neither an internal audit nor a budgetary control system; and its accounting system was inadequate. Additionally, it suffered from shortage of staff in operations and accounting, and most important, it lacked stability and continuity at its top management level. 2/ Furthermore, its organizational structure was unclear, and some twenty individuals seemed to be reporting directly to the General Manager (i.e., Gerente). The General Manager himself reported to a Board (i.e., Junta) which comprised seven members including the Chairman, the Mayor of Bogota. Two of the members were politicians (District Councillors) and the rest were representatives from the banks who held the bonds of EAAB. Although the role of the Board was and is to determine the policies, its actual role apparently went beyond policy making and intruded into the management of EAAB (see paras. 21-23). The Board was and is also formally responsible for the appointment of General Managers and Sub-General Managers, but it is understood that the Mayor, in practice, determined the appointment of the General Manager by himself. 12. The most difficult problem facing EAAB's management at the time (and for some years thereafter), and which must have dwarfed every other problem or shortcoming, was that it did not have enough water supply capacity to meet the demand. Therefore, water rationing was in force. Furthermore, EAAB did not have long-range plans to meet the water supply deficit. Only search studies for major alternative sources of water supply and some minor projects, too small to meet future needs, were underway at the time. I/ Since 1970 the Bank has made loans to the larger Colombian water utilities (Ln. 682-CO in May 1970 to Empresas Municipales de Cali and Ln. 738-CO in May 1971 to Empresas Publicas Municipales de Palmira). 2/ EAAB had four General Managers during the previous nine years. - 5 - 13. With the help of Asesoria Industrial, a local firm of manage- ment consultants, EAAB's organizational structure was substantially altered in 1969. With the help of engineering consultants, a long-range master plan for water supply was drawn up, and a project suitable for Bank financing was prepared. The offices of EAAB were also brought under one roof. 14. Improvements in EAAB's management have taken place despite the fact that even in 1969 some of its key staff had no previous operational experience in a public utility. However, EAAB's top management staff has turned over faster than would normally be expected which may have adversely affected operations. Since 1964, there have been five EAAB General Managers, four of which were appointed by Bogota Mayors after newly being elected to office. These appointed General Managers had no previous experience in public utility management. 1/ Retention of other senior staff has been discouraged by EAAB's salary scales which were tied to those of the civil service, and hence low by industry standards, and by the fact that these positions in EAAB did not carry the equivalent status or provide the staff the same opportunity for advancement as the civil service. 15. It appears that EAAB did not have an effective manpower planning and development program. The Director General of Planning, whose position recently became vacant, and three of the present four Sub-General Managers had to be recruited from outside EAAB. EAAB did not have a program for staff ro ation, nor did staff rotation seem to take place even as a matter of course._/ The staff therefore may have developed a departmental outlook and hence may not have been considered qualified for senior positions. 16. It was agreed during negotiations of the first loan and included in the agreement of the second that the Bank was to be given a reasonable opportunity to comment on the qualifications and experience of candidates for the position of General Managers and Sub-General Managers prior to their appointment. As it turned out, the problem has been a high turnover of General Managers, and not their performance. 17. Despite the resignation of the General Managers, the turnover in the key staff, and the several pressing problems each of the General Managers had to face, EAAB has developed into a reasonably well-managed and technically competent utility. It has made substantial improvement 1/ The performance of the previous four General Managers seems to have been reasonably good under the circumstances. Therefore, lack of previous experience in the management of a public utility should not necessarily be a disqualification of the individual for the job. Nevertheless, the appointment of an outsider indicates that the institution was not able or free to recruit, develop and retain a suitable candidate. Even if a potential candidate were available, the appointment of General Manager is a political move, and therefore, unlike in many industries, may not have offered the individual the opportunity for career progression. 2/ EAAB states that the staff are now being trained and rotated. - 6 - in its operations and in its financial management; it has so far managed competently the construction of the large and complex water project; 1! and it has developed a good training program for its technicians. 18. EAAB has also made improvements in the level of its total staff relative to the size of its operation, and the present ratio of one employee per 1,100 consumers (assuming eight consumers per connection) is acceptable for Latin American countries. 2/ While there is room for further improvement in this ratio, a more important and urgent need for EAAB is to implement programs for retraining staff, presently involved in construction, for other positions within the organization. 19. The present leadership of EAAB is aware of the deficiencies in the organization. Fortunately, it is not beset by the magnitude of the pressing problems its predecessors had to face. 3/ System capacity is now adequate to meet the foreseeable demand for at least the next few years; the execution of the present (i.e., the second) project is now proceeding reasonably; work on its critical parts seems to be progressing satisfactorily; the entity is ade- quately staffed at key positions; and organizational structure is conceptually sound and readily adaptable for further modifications. Nevertheless, further improvements within the organization are called for. But, if the present leadership is given the requisite time and the means to carry them out, prospects are good that such improvements will materialize. Problems with Engineering Consultants 20. EAAB, with Bank agreement, appointed a Colombian firm of engineering consultants, INGETEC, then one of the largest consulting firms in South America, to prepare the project and the long-range master plan. This was the first water supply project of INGETEC, whose experience had previously been in the field of electric power and which had worked on some Bank-financed projects. To carry out the studies and the project, INGETEC used the services of-two other consulting firms, both from the United States, one for the treat- ment plants and the other for the distribution system. 1/ The present Sub-General Manager and some key individuals of the Technical Department have been in their positions since the late 1960s. 2/ A survey in 1974 on operating data for 19 Colombian water supply companies shows that EAAB's ratio of number of connections per employee is among the lowest in the country. (Source: Bank Supervision XIV Report.) This ratio has improved by about 20% in 1976. 3/ Inadequate system capacity hence had to resort to water rationing; shortage of key staff; initiation of a large and complex water project and construction difficulties of the contractor on the major civil works; lack of local funds to carry out some of the programs and, at times, to pay the suppliers. -7- 21. However, INGETEC had to face two problems. The first was that it did not receive full cooperation from EAAB in the initial stages. The second was that INGETEC did not obtain a consolidated contract for the whole project (as is normally the case with Bank-financed projects) but instead was given a number of contracts for each piece or phase of work. Further- more, most of these contracts were themselves extended at least once and in one case five times. 22. In addition to assigning INGETEC a major part of the project, albeit on piecemeal basis, EAAB also employed another 20 consulting firms for design and supervision of the various aspects of the project not covered by INGETEC. Thirteen of these firms had their contracts extended at least once. Some of these contracts, including extensions, did not eventually amount to more than US$5,000 equivalent (Appendix C). 23. The Bank on several occasions expressed to EAAB its dissatis- faction with the splitting up of the work into a number of contracts. EAAB's management continud on this course of action seemingly because of the pressure exerted by its Boacd to distribute the consultancy work among a number of firms. As regards INGETEC, EAAB's Board seems to have had the attitude that high cost and long duration commitments should be avoided, and hence it insisted on numerous short-term contracts. However, the splitting up of work into a number of contracts probably increased the cost of the project, added to its delay and, most important, caused problems to INGETEC and EAAB in project coordination. 1/ Role of Bank Supervision and of Joint Financing of the Project 24. This project required five separate missions from the identi- fication mission in May 1966 to the appraisal updating mission in January 1968, totalling some 26 man-weeks. Subsequently, the project was visited by a total of 16 supervision missions, 15 of them between February 1969 and October 1974 (i.e., just under 3 missions per year) and involved an expenditure of some 40 man-weeks. Eleven of these missions also involved supervision or preparation of the second Bank-financed project. 25. The project also involved a large volume of correspondence between the Bank and the borrower. The size of the correspondence involved can be judged by the fact that there are 5 files of negotiations, and 21 files on administration between 1968-76, 14 of them for the period 1968-72. For the size and relative simplicity of the project, the number of missions and the amount of correspondence involved are probably one of the most extensive among the Bank-financed public utility projects. 26. It is difficult to pinpoint the reasons for this large volume of correspondence between the Bank and the borrower, or to determine whether there were any communication barriers between the two. (The Bank corres- ponded in English while the borrower corresponded in Spanish.) However, 1/ The number of consultants employed on the second project is much lower. - 8 - the recurrent splitting of the consultancy work into a number of contracts and some relatively simple problems of procurement have been contributory factors. 27. EAAB's periodic progress reports to the Bank seemed voluminous and more detailed than necessary to provide an effective supervisory review and control. I/ Furthermore, the other two international lending agencies (Ex-Im Bank and KfW) had their own reporting requirements from the borrower. The total reporting requirements, together with the volume of correspondence, added to the workload of EAAB's officials and imposed a large burden on their time needed to perform the normal functions of managing the entity. 28. In retrospect, two questions may be asked. First, whether it might not have been more cost-effective (in terms of time-saving) had the Bank induced EAAB to employ a professional, well-acquainted with Bank practices, in the earlier years of the project and until such time as RAAB became fully acquainted with Bank's requirements and procedures. Or alternatively, had the Bank appointed at the time (instead of in 1974 which it did) a specialist on water supply at its Bogota office with the authority and responsibility to help the borrower and to take decisions on normal loan administration matters in order to achieve the same objective. 2/ The second question is whether it might not have been possible to avoid the additional burden on EAAB from the complexity and problems of joint financing by the Bank making an exception to its policy on joint financing. EAAB was a first time Bank borrower and also managerially weak; furthermore, joint financing was envisaged at only US$3.0 million or about 20% of Bank loan. (Since the second half of the 1960s, it has been the Bank's practice to induce the borrowers to supplement their foreign exchange requirements through joint financing.) Related Matters 29. One of the reasons for the actual expansion of water distribu- tion and sewerage disposal systems being lower than projected was the large investment in Chingaza scheme (Bogota Second Water Supply Project, Loan 741-CO of 1971) which absorbed most of EAAB's internally generated funds. 1/ The progress reports were, however, reduced in volume and detail at a later stage. 2/ The audit has learned that such a course of action would have been welcomed by the borrower, but it is not evident that this was ever discussed at the time. However, in 1974, the Bank seconded a specialist on water supply to its Bogota office. One of his responsibilities was the supervision of Bank-financed water projects in Colombia. - 9 - 30. The Chingaza scheme was also expected to provide electricity bene- fits to Empresa de Energia Electrica de Bogota (EEEB). On the basis of a preliminary study by EAAB, EEEB and INGETEC to determine the present (1971) worth of electricity benefits from the scheme, EEEB had agreed at the time of Chingaza appraisal to make a phased contribution totalling Col$280 million towards the construction of Chingaza. EEEB has made this contribution. However, the cost of Chingaza scheme has escalated and, in 1977, it was expected to be about 50% higher (in US$ equivalent) than the appraisal esti- mate. On the other hand, according to a Bank study in 1975, Chingaza's benefits to EEEB were estimated to be.substantially greater than those envisaged at the time of its appraisal.17 SECTION III Conclusions 31. The project eliminated water rationing which prevailed in the city for several years. Nevertheless, by the end of 1975, still about one-quarter of the city's population, mainly the poorer section, is estimated to have been without water service. The project's benefits, therefore, had not reached low income city dwellers on q satisfactory scale, even though capacity was and is available in the system..27 32. The Bank's major contribution through the project was the streng- thening of EAAB as an institution. From a small, understaffed, inadequately organized and geographically fragmented entity in the early 1960s, EAAB has developed over the last few years into a reasonably well-managed, technically competent and fairly large entity. It has a good training program at the technician level; it has reduced the proportion of water unaccounted for; and it has made substantial improvements in several other areas of operation, including financial management, despite the burden of a large and complex construction program. But there is still room for improvement (which the present leadership is aware of) in manpower planning and development at the senior level and there is need for continuity at the top level of EAAB's management. 1/ EAAB states that, despite all its efforts, it has not succeeded in obtaining any additional contribution from EEEB towards the construction of Chingaza. 2/ Since end-1976, there has been substantial increase in the percentage of the population served by EAAB from low income areas.  35- Sumoo Tibvt D eEd curv_e th a 7, .. groth r e to 8 20 -_ __ _ _ l l i El SoPo El Sopo 21 m3/s * 21.m3/1* E S o p o E s o p o Tibt 1970 1971 1972 1973 1974 1975 1976 1977 1979 1979 1980 1981 1992 1983 1984 1985 19a6 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Average output Maxlmum capacity of treatment plants and mains. SE ACUCDUCTO Y ALCAMTARILLADO DE BOGOTA 0 Water Supplied (1) Tibilo 12 m3/. (existing) (2) El Sopo: 5 3/s b~en 1980 and 1987 PROGRAMA DE ABASTECIMIENTO 20 -31. between 1987 and 1992DE GU POAL 30 -3/- from 1992 onwards. DE AGUA POTABLE July, 1977 Appendix B COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) EAAB's Annual Construction Expenditure (in current Col.$ x 10b) 1971 1972 1973 1974 1975 1976 Est. Act. Est. Act. Est. Act. Est. Act Est. Act. Est. Act. Total Construction 653 374 539 580 612 424 770 427 1,006 1,041 1,377 948 Major Sewerage 69 69 70 42 43 30 68 42 166 37 92 36 Works a/ a/ Estimates are from Appraisal Report for Second Water Supply Project. Increase in EAAB's Distribution and Sewerage Networks (km) Distribution Pipes Sewerage Pipes/Channels Years 1/2"x3" 4"x14" Total 8"-36" Total dia. dia. inc.Others dia. inc.Others 1966-70 360.0 362.3 745.0 987.6 1,105.5 1971-75 355.9 311.5 793.3 669.7 810.7 1976 73.1 52.4 125.5 72.9 85.4 Cummulative as 1,560 1,302 2,963 of Sept.1970 Appendic C Page 1 of 4 COLOMBIA: FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) CONTRACTS FOR ADVISORY SERVICES, DESIGN WORK AND STUDIES WITH INGETEC LTD. Col $ x 1000 US$ x 1000 C-2 Coordination and Technical Advice for 14.425 42 First Program. Contract of Sept. 12/67 plus 5 additions. C-3 Study and Design New Tibit6 Raw Water 1.018 Station - Contract of July 12/68. C-13 Design of Tibit6-Cantarrana Line - Con- 1.900 tract of Oct. 4/68 plus one addition. C-14 Design of Tibit6 Expansion. Contract of 900 160 Dec. 3/68 plus 3 additions. C-4 Project Prefeasibility Studies, Chingaza, 1.805 60 Teusacl, Cantarrana - Account of May 27/68 plus 3 additions. C-24 Route Study for Bogotf Main Severs - Con- 221 45 tract of June 10/69. C-17 Design and Specifications for Golillas Tunnels 20.100 47 and Dam - Contract of Sept. 5/69 plus 3 40.369 354 additions. CONTRACTS FOR ADVISORY, DESIGN AND INSPECTION SERVICES WITH OTHER CONSULTING FIRMS C-1 SPECIALIZED FOREIGN CONSULTANTS. (Various Contractors) Studies and opinions on feasibility and works of the 59 Appendix C Page 2 of 4 Col$ x 1000 US$ x 1000 First Expansion Program (Aug. 66 to Dec. 67). C-6 HIDROESTUDIOS LTDA. and C.E.I. LTDA. Design of 461 Tibit6 Pumping Station and Tank. Contract of May 29/68, plus 2 additions. C-7 PROMETER ASSOCIATES. Study of distribution systems and 561 225 preparation of computer program. Studies of the telemetering system and radio communications. Contract of April 27/68. C-8 ESTUDIOS TECNICOS LTDA. Checking of preparation of 420 works and activities of First Expansion Program. Contract of May 30/68,plus 4 additions. C-10 BLACK AND VEATCH and CAMACHO CARRIZOSA Y FERRO LTDA. 7.822 280 Inspection of manufacture and installation of Tibit6-Cantarrana line. Contract of May 27/68, plus 4 additions. C-11 BLACK AND VEATCH, HIDROESTUDIOS LTDA, and C.E.I. LTDA. 5.470 148 Inspection of construction and installations, expansion of Tibito Plant. Contract of May 27/68, plus 2 additions. C-20 INGECOM LTDA. Inspection of installation of tele- 574 metering and radio systems. Contract of April 3/72, plus one addition. C-9 LA VIALIDAD LTDA. Location of Fomeque-Chingaza high- way. Contract of Jan. 22/68, plus 2 additions. 417 C-23 LA VIALIDAD LTDA. Route of Palacio mines-Chuza high- way. Contract of July 22/69, plus 2 additions 293 Appendix C Page 3 of 4 Col$ x 1000 US$ x 1000 C-30 INGENIERIA FOTOGRAMETRICA LTDA. Establishment of 300 geodesic net for Chingaza project. C-31 INSTITUTO GEOGRAFICO AUGUSTIN CODAZZI. Preparation of serial photographs of Chingaza area. Contract of Aug./69. 93 C-27 COMPANIA ESTUDIOS E INTERVENTORIA C.E.I. LTDA. Studies, designs, plans and bidding documents for Bajo TeusacL 2.221 works. Contract of Oct./70, plus 2 additions. C-15 SALGADO, PIEDRAHITA, ESCALLON LTDA. and ENGINEERING 2.53 SCIENCE. Research, studies and basic designs for the "El Sapo" treatment plant. Contract of Jan./70, plus one addition. c-16 CAMACHO CARRIZOSA Y FERRO, CONSULTECNICOS LTDA, TAMAYO 3.688 Y ROJAS LTDA. Inspection contracts for the manufacture and installation of main distribution lines. Contracts of May/71, plus 5 additions. C-32 INGEPAR LTDA. Inspection of the protection works for 896 La Regadera Dam. Contract of Mar. 24/71, plus 2 additions. C-33 HIDROESTUDIOS LTDA. Inspection of construction of 2.325 Casablanca tank. Contract of May 14/71, plus 2 additions. C-34 HIDROESTUDIOS LTDA. and COMPANIA DE ESTUDIOS E 3.925 INVENTORIA C.E.I. LTDA. Inspection of construction of Tibit6 Settler No. 7. Contract of May 14/71, plus 2 additions. C-18 ASESORIA DE SERVICIOS COORDINADOS. Identification 85 of properties in the city for the Tibit6 Project II works. Contract of Sept. 19/67. Appendix C Page 4 of 4 Col$ x 1000 US$ x 1000 C-21 GERARDO FRIES and CIA. Preliminary design of 150 Casablanca tank. Contract of Nov./68. C-22 HIDROSAN LTDA. Study and design of new 180 meter shop. Contract of May/68. Col$33.064 US$ 832 Attachment COLOMBIA FIRST BOGOTA WATER SUPPLY PROJECT (Loan 536-CO) PROJECT COMPLETION REPORT INTRODUCTION Sector 1.01 The total population of Colombia is about 23.8 million people and is growing at an annual rate of 2.6%. The proportion of people living in urban areas (towns of more than 2,500 people) increased from 30.9% of the total population in 1938 to 60.9% in 1973. Urban growth peaked at an average annual rate of 5.4% between 1951 and 1964 (during the period of widespread rural violence), but decreased to an average annual rate of 3.9% during the 1964-73 period. This rate is expected to remain relatively constant over the next few years. 1.02 Unlike many Latin American countries, urban growth is widely dis- tributed among several intermediate and large cities. Of the total popula- tion, about 14% is living in the capital city, Bogota, which currently has a population estimated at 3.4 million. This is low compared to the "primacy" of other countries, where in 1970 for example, 35.8% of the population of Argentina was living in Buenos Aires, 32.3% of the population of Chile was living in Santiago, and 24.5% of the population of Peru was living in Lima. Medellin and Cali, the second and third largest cities respectively, have already surpassed the one million mark, while Barranquilla has over 700,000 inhabitants; Cartagena, Bucaramanga, Manizales and Pereira each have about 300,000 and 13 other cities have over 100,000 inhabitants. 1.03 The Government's effort to improve sanitation facilities over the last ten years has been reasonably successful. Although service levels vary by both family income and size of the city, about 75% of all urban families now have direct access to piped water, and 60% are connected to sewerage facilities. In the four largest cities, service levels for water range from a high of 95% of the population to a low of 82%. Slightly less, or about 91% and,78%, respectively, are connected to sewerage facilities. In the medium-size and smaller cities, service levels for water range from 90% to 65% and for sewerage from 90% to 44%, while in the rural areas, service levels are only about 30% for water and 5% for sewerage. 1.04 The Government's objective is to extend by 1980 water supply and sewerage facilities to at least 80% of the total urban population. The Government's effort in attaining this objective has been d1rected not only to providing funds for priority projects,- but also at strengthening certain key agencies so that they would become more efficient and would be better able to identify, plan and evaluate projects in the sector. Organization and Past Investments 1.05 The sector is made up of three main categories: (i) cities that operate municipally-owned utilities ("Empresas"), of which presently there are 21 with more than 25,000 people each, and which in aggregate account for about a third of the total population in this category; (ii) Instituto Nacional de Fomento Municipal (INSFOPAL) which acts as executing agency, A2 and in some cases operates water supply and sewerage systems in communities of more than 2,500 people; and (iii) Instituto Nacional de Salud (INS) which operates systems in communities of less than 2,500 people. 1.06 External assistance for the sector started about 15 years ago, and US$232.4 million was committed from 1961-75. Of this amount, 68.2% was from the Bank, 24.0% was from the Inter-American Development Bank (DB) and the remainder from USAID, Eximbank, and the German Kreditanstalt. The Bank has already made seven loans amounting to US$172.4 million for Bogota, Cali and Palmira, as well as 15 medium-size cities and 30 towns. IDB has made 10 loans totalling US$43.4 million. Two of these, made to INSFOPAL in 1962, amounted to US$10.6 million and were for 327 towns. In addition, USAID made a sector loan of US$29 million in June, 1971 for urban development. 1.07 Annual investments in the sector increased from US$21.6 million in 1965 to US$55.8 million in 1975, and total investments for that period were US$392 million . Of this, 72% was expended by the municipal entities, 20% by INSFOPAL, and 8% by INS communities. About 35% of the total investment was financed by the national budget, 20% from external sources and the remaining 45% from domestic credits and internally-generated funds. PROJECT PREPARATION AND APPRAISAL Origin 2.01 A water and sewerage sector review in 1966 identified several high priority projects, of which the Bogota project was considered the most urgent and most important. The project was the first Bank operation in the Water Supply Sector in Colombia, and was part of a long-range master plan to eliminate the water shortages that had characterized Bogota in the past. Preparation, Appraisal, Negotiation and Approval 2.02 The project was carried out by the Empresas de Acueducto y Alcantarillado de Bogota (EAAB), an autonomous municipal agency, and was based on feasibility studies prepared by Ingetec Ltda., a Colombian firm of en- gineering consultants. In addition to Ingetec, other consulting firms were used for certain portions of the final design, as well as for construction, supervision and institutional improvements. 2.03 The project was appraised by Bank staff in July 1967, and was based on information obtained from EAAB and Ingetec. Because of uncertainties in establishing reliable cost estimates and the corresponding foreign exchange components, the project was temporarily delayed, and was post appraised in January 1968. The Loan was signed June 3, 1968 and became effective August 7, 1968. Apart from the uncertainties in the original cost estimates, there were no major issues raised either before or during loan negotiations. A3 Project's Role in Long-term Plan 2.04 At the request of the Bank in 1966, EAAB prepared a long-range master plan through the year 2000. The plan included a water demand study and identified potential sources of water within the vicinity of Bogota. The study concluded that as a first stage, optimizing the production capacity of the existing Tibito water treatment plant was the least-cost solution, and while it would not entirely eliminate the existing water shortage, it would at least keep it within reasonable limits. It was expected that with the comple- tion of the the Chingaza Scheme in 1977, the water shortage would be completely eliminated. 2.05 The development of the Chingaza Scheme was considered desirable because it would result in the transfer of water from an outside watershed to the Bogota River basin. It would supply water by gravity, and would be of benefit to other sectors, such as irrigation, and especially power generation. Project Description 2.06 The project was primarily aimed at increasing the water production capacity of an existing facility, the Tibito water treatment plant, and was part of the ongoing development of the water supply and sewerage systems of Bogota, the capital of Colombia. Specifically, the project consisted of: (i) An increase in the capacity of the existing Tibito water treatment plant from 4 m3/sec to 7 m3/sec; (ii) A 78" diameter, 62 km pipeline connecting Tibito to the city; (iii) Two storage tanks, 50 km of distribution mains, and partial renovation of the existing distribution network; (iv) Preparation for a subsequent project, including construc- tion of an access road; (v) Water metering and leak detection; and (vi) Institutional improvements. Project Objectives 2.07 The physical and institutional objectives of the project were achieved. On completion of the increased production capacity at Tibito and the pipeline by the end of 1971, the shortages of water which had characterized Bogota during the 1963-71 period were eliminated. Subse- quent increases in the capacity of Tibito and its catchment works and partial regulation and diversion of the Teusaca River completed at the end of 1975 will allow Tibito to meet most of the demand requirements until A4 the Chingaza Scheme is completed in 1980 (see paras 3.01 and 4.03). Unaccounted-for water, which was as high as 30% of production in 1967, was reduced to 22% which is acceptable. The management and operations of EAAB improved notably during the period of project construction. Covenants 2.08 With the exception of the financial covenant (see para 5.03), EAAB has satisfactorily complied with all loan covenants. Reporting 2.09 Quarterly reports, including financial and statistical information have been prepared in a timely and competent fashion. All Bank requests for information have been satisfied. PROJECT IMPLEMENTATION, OPERATION AND COST Loan Effectiveness, Project Start-up and Revisions 3.01 The Loan became effective on August 7, 1968 and there were no major delays in starting up the project. Expansion of the Tibito water treatmeit plant wa originally estimated to increase production capacity from 4.0 m /sec. to 7.0 m /sec. However during the ex cution of the project EAAB increased the capacity from 7.0 m /sec to 12.6 m /sec. The additional increase in production capacity was approved by the Bank and was financed by resources provided by EAAB. Implementation Schedule 3.02 There were some delays, but in fact, by early 1972, on completion of the Tibito plant expansion and pipeline, the plant was producing in sufficient quantity to eliminate the water rationing that had characterized earlier years. The project was scheduled to be completed in 1971. The following table indicates the appraisal estimates of completion dates and the actual results: Appraisal Actual Estimates Results Increase in Production Capacity of Tibito Feb. 1970 Dec. 1971 Construction of Pipeline Jan. 1971 Oct. 1971 Construction of Storage Tanks and Distribution Trunklines June 1971 Jun. 1973 3.03 The construction delays were caused partly by the additional increase in the production capacity of Tibito, and by deficient workmanship and the withdrawal on the part of two of the contractors responsible for some of the complementary works. The delays were largely outside the scope of EAAB and could not have been reasonably avoided. A5 Procurement 3.04 All contracts for equipment supply and civil works were awarded on the basis of international competitive bidding. The manufacture, supply and installation of the 62 km, 78" pipeline between the Tibito plant and the city of Bogota was the largest single project component, and was awarded to a U.S. company. The foreign component was US$19.9 million, or 39% of the total actual cost of US$51.1 million, including interest during construction. Equipment for the pumping stations and treatment plant ,was awarded to Colombian enterprises. EAAB did not have major difficulties in following the Bank's guidelines on procurement. Project Costs and Financing 3.05 As shown in the figures on the next page, an extract of Tables 1 and 2 in the attached anexes, the project increased in cost by 45% (10% additional works, 35% cost overrun) from US$35.3 million originally estimated to US$51.1 million. Of the total cost increase of US$15.8 million, the Tibito subproject accounted for US$11.6 million, and the other subprojects accounted for the balance of US$4.2 million. 3.06 Reliable information is not available as to the distribution of the cost increases between physical contingencies and price contingencies. However, in aggregate the combined contingency provision for the Tibito subproject esti- mated at 11.7% of construction costs in 1968 was insufficient. 3.07 External financial assistance remained unchanged at US$18.6 million, and consisted of US$14.0 million from the Bank; US$4.0 million from the Eximbank; and US$0.6 million from the German Kreditanstalt. Correspondingly, the unfinanced portion of the project almost doubled from the original appraisal estimates, increasing from US$16.7 million to US$32.5 million. Given the increasingly large contributions required to finance new works in addition to the existing program, together with lower than anticipated water demand and insufficient tariff increases, the necessary resources could not be generated internally. EAAB maintained its construction program, with financing from unsecured creditors. A6 Appraisal Estimates Actual Results ---- US$ million ----- ---- US$ million ------- Item Local Foreign Total Local Foreign Total Tibito Subproject Construction of Tibito 11.6 11.5 23.1 11.6 11.5 23.1 Increase in Capacity - 2.8 0.8 3.6 Construction Costs 11.6 11.5 23.1 14.4 12.3 26.7 Contingencies 1.5 1.2 2.7 6.3 2.6 8.9 Interest during Construction 2.3 1.9 4.2 3.9 2.1 6.0 Total Costs 15.4 14.6 30.0 24.6 17.0 41.6 Other Subprojects Preparation of Future Schemes 1.7 0.2 1.9 1.7 0.2 1.9 Operational Improve- ments 0.3 1.9 2.2 0.3 1.9 2.2 Construction Costs 2.0 2.1 4.1 2.0 2.1 4.1 Contingencies .0.2 0.2 0.4 3.9 0.2 4.1 Interest during Construction 0.4 0.4 0.8 0.7 0.6 1.3 Total Costs 2.6 2.7 5.3 6.6 2.9 9.5 Total Financing Required 18.0 17.3 35.3 31.2 19.9 51.1 Contingencies as a % of Construction Costs: Tibito 12.9 10.4 11.7 43.8 21.1 33.3 Other 10.0 9.5 9.7 195.0 9.5 100.0 Aggregate Total 12.5 10.3 11.4 62.2 19.4 42.2 Performance of Consultants, Suppliers and Borrower 3.08 The first stage feasibility study was prepared by Ingetec Ltda., a Colombian consulting firm retained by EAAB prior to Bank appraisal of the loan, and continued with Bank concurrence for preparation of the project and the long-range master plan. The final design was divided into three major components: raw water pumping, which was designed by Ingetec; the A7 treatment plant, which was designed by Engineering Sciences of the United States; and the pipeline, which was designed by Hidroestudios-CEI-Ingetec of Colombia. Supervision of the works was carried out by Black and Veatch of the United States, in association with Colombian firms. 3.09 This fragmented approach was less than satisfactory, particularly since Ingetec had no previous experience in water supply and was not able to provide proper overall coordination. Furthermore, EAAB did not award Ingetec a comprehensive contract for the entire project, and Ingetec had to operate under a number of short-term contracts, one for each component of the project. This procedure on the part of EAAB undoubtedly contributed to construction delays and increased project costs. OPERATING PERFORMANCE Overlap of Projects 4.01 Because progress under the project was slower than expected, the project became a parallel operation with a second Bank-financed project, the Chingaza Scheme (Loan 741-CO), which was appraised in 1970 and signed in 1971. The construction period of the second project was estimated to extend through the 1971-77 period. As a result, the financing plan included and superseded that used in the appraisal of the Tibito Project, for which the forecast period, with the exception of the demand estimates, did not extend beyond 1973. For purposes of comparison, therefore, the appraisal estimates referred to throughout the balance of this memorandum are those used in the appraisal of the Chingaza Scheme. In addition, the forecast period was reduced by one year through to 1976 in order to correspond with the actual period of construction of the Tibito project. Market Forces 4.02 The Tibito subproject was originally intended to reduce an existing water shortage--estimated at the time of appraisal to be between 15 and 20 percent of demand. In this connecSion, the capacity of the plant was to be increased from 4.0 m /sec to 7.0 m /sec, which together with two ot er smaller plants, would provide a total installed treatment capacity of 8.5 m /sec. he subsequent addition to Tibito increased system treatment capacity to 14.1 m / sec (see para. 3.01). 4.03 During the execution of the Project, EAAB, with the concurrence of the Bank and with its own resources, constructed small and relatively in- expensive additions to the catchment works of Tibito. This, together with partial regulation and diversion of the nearby Teusaca River, increased the volume of water available to thS plant. During normal conditions (9 out of 10 years), thsre will be 10.0 m /sec of safe yield while the firm safe yield will be 8.0 m /sec). The normal availability of water supply was thus raised to 11.5 m 3(9.5 m 3/sec firm), which should meet expected demand until almost 1980. With the completion of the Chingaza Scheme in 1980, demand requirements should be satisfied until 1990. A8 4.04 Demand estimates for the Tibito Project were based on a survey of the consumption characteristics of certain selected neighborhoods. Those for the Chingaza Scheme were based on estimated per-capita demand for the 1970-80 period increasing from 271 lcpd in 1969 to 340 lcpd in 1980, and were about 5% higher for 1976 than those used in the Tibito Project. However, the increase in demand did not materialize, and in fact, water consumption was considerably lower than originally estimated in the appraisal of t e Tibito Project as shown by tqe figures, below average demand was 8.9 m /sec in 1976 as opposed to 13.5 m /sec in the appraisal estimates for the Chingaza Scheme. 3 3 Capacity in m /sec Demand in m /sec Installed Excess Appraisal Projections Actual/Proj cted Source Treatment Average Treatment Year Tibito Chingaza Results in m /sec Safe Yield Capacity Surplus Capacity Maximum Average Daily 1968 6.3 6.7 5.3 6.1 5.5 5.5 0.2 1970 7.5 8.1 6.0 6.9 6.5 6.5 0.5 - 1972 9.0 9.6 6.7 7.7 8.5 8.5 1.8 0.8 1974 10.6 11.4 7.9 9.1 9.5 11.5 1.6 2.4 1976 12.8 13.5 8.9 10.2 11.5** 14.1* 2.6 3.9 1980 18.0 18.5 12.1 13.9 25.5 28.1 13.4 14.2 1990 33.5 34.0 21.8 25.0 25.5 28.1 3.7 3.1 2000 47.5 47.5 - - - - - - * Because of limited pumping capacity (net of s and by) the current effective installed capacity could be considered 11.6 m /sec. ** Safe yield will be 9.5 m 3/sec. 4.05 As illustrated below, lower than anticipated demand was partly a function of lower population growth, partly a function of lower service levels, and partly a function of levelling-off of per capita consumption. As a result, the volume of water sold during the 1971-76 period was 75% of the original estimates. A9 Item 1971 1972 1973 1974 1975 1976 Population (in millions): Original estimates 2.7 2.9 3.1 3.3 3.5 3.7 Actual results 2.6 2.8 3.0 3.2 3.3 3.4 Population Served (as %): Original estimates 76 85 91 * 96 99 99 Actual results 72 72 73 73 76 82 Per capita Consumption (lcpd): Original estimates 210 214 218 223 230 236 Actual results 208 213 214 216 213 207 3 6 Water Sales (m /year x 106 Original estimates 155 191 224 256 292 315 Actual results 146 160 172 183 197 211 Tariff Levels 4.06 Tariffs remained unchanged during the 1970-72 period, and increased only nominally during the 1973-74 period. Despite substantial tariff in- creases which had the effect of raising the average tariff by 21.0% in 1975 and 25.0% in 1976, the average tariff declined in real terms during the 1971-75 period. During the same period, the Consumer Price Index for Colombia more than doubled, from a base of 503.4 in 1371 to 1082.1 in 1975, wereas tariffs increased by only 50%; from Col$ 1.68/m in 1971 to Col$ 2.51/m in 1975. In May 1976, EAAB restructured its tariff schedule and instituted regular monthly increases which made the year-end 1976 tariffs substantially higher than the average for the year (see para 5.04). The following figures illustrate the yearly increases in tariffs and the Consumer Price Index. Item 1971 1972 1973 1974 1975 1976 Average tariff in US$/10 Og. 0.30 0.30 0.26 0.30 0.26 0.30 Average tariff in Col$/m 1.68 1.68 1.84 2.07 2.51 3.13* Annual percentage change - - 9.5 11.7 21.0 25.0 Consumer Price Index (7/54-6/55 = 100) 503.4 573.1 699.0 875.1 1082.1 - Annual percentage change 11.8 13.8 22.0 25.2 23.6 26.0 * In August 1977 the tariff was Col$ 5.57/m3 , equivalent to a 78% increase over the 1976 average. A10 Project's Role in Service Levels 4.07 EAAB has made considerable efforts to improve service levels in recent years. In this respect, the number of families connected to the water system increased from 170,000 in 1966 to 348,000 by the end of 1976. This would not have been possible without Bank assistance in financing the expansion of the Tibito water treatment plant. However, the percentage of population connected to the water system was still only 82% of the total population of Bogota against 99% forecasted in the appraisal report. Of the increase in total population served of 1.0 million, it is estimated that 0.4 million, equivalent to 11% of Bogota's population, were members of low income families. FINANCIAL PERFORMANCE Past Experience 5.01 During the 1968-71 period, EAAB's capital requirements were ori- ginally estimated at US$73.7 million (Col$1,232 million) including the Bank-financed project of US$35.4 million (Col$642 million). About 20% of the requirements were estimated to come from internally-generated funds; 22% from equity contributions; and 58% from borrowings, including the Bank loan of US$14 million (Col$234 million). Not included was the additional expansion of the Tibito plant at an additional cost of US$3.6 million (Col$77 million). With the appraisal of the Chingaza Scheme (Loan 741-CO), for which the US$ equivalent was expressed at the rate of exchange prevailing January 1, 1971, capital requirements increased from US$73.7 million (Col$1.2 billion) to US$234 million (Col$5.4 billion), including US$13 million (Col$0.3 billion) to complete the first project, US$104 million (Col$2.4 billion) for the second project, and additional construction of US$117 million (Col$2.7 billion). About 31% of the requirements were estimated to come from internally-generated funds; 23% from equity contributions; and 46% from borrowings. The following financing plan which is an extract from Table 3 in the attached annexes, illustrates the Chingaza appraisal estimates, as well as the actual operating results during the 1971-76 period. For the purposes of comparison, the US$ equivalent is expressed at the average rate of exchange prevailing during the period in which the expenditure was made, and accordingly, is not consistent with that used in the original appraisal estimates. All 1971-76 period Appraisal Actual Estimates Results Item Us$iM % US$ 1 % Application of Funds 1st. Bank Project (Tibito) 11 6 25 16 2nd. Bank Project (Chingaza) 83 46 69 45 Other 67 37 42 27 Interest during Construction 11 6 16 11 Total Investments 172 95 152 99 Increase in Working Capital 9 5 2 1 Total 181 100 154 100 Source of Funds Internally Generated 79 44 61 40 Debt Service 23 13 26 17 Net Internally Generated 56 31 35 23 Equity Contributions 43 24 34 22 Borrowings 82 45 85 55 Total 181 100 154 100 5.02 Internally-generated funds, which were originally estimated to contribute 31% of total investments in fact contributed 23% and likewise, equity contributions expected from the Government dropped from an estimated 24% to 22%. While the contribution of internal cash generation and equity to EAAB's investment program was satisfactory, the significant fact was that because of cash constraints, the planned investments in distribution did not take place, which contributed to the failure to meet demand projections. In spite of the cutback in the investment program, debt financing had to be increased from the planned level of 45% of total expenditures to 55%, and EAAB's total indebtedness grew from 40% of the total assets carried at historical cost in 1971 to 60% in 1976. Financial Covenants 5.03 During the period 1972-1976 EAAB's rate of return has been below the covenanted rate of return on revalued fixed assets, as shown by the following figures: A12 1971 1972 1973 1974 1975 1976 1977 Estimated Rate of Return, Actual 11.8 10.2 7.6 3.6 4.0 6.1 9.3 Rate of Return, Covenanted 9.0 9.0 9.0 9.0 9.0 9.0* 9.0* * Under the Second Bogota Water Supply Project the required rate of return was increased to 10.0%. 5.04 The financial performance of EAAB deteriorated between 1972 and 1975 in spite of tariff increases of 86% to a level higher than had been forecasted at appraisal, as inflation of operating costs and asset values substantially exceeded the increases in revenues. In May 1976 EAAB instituted a program of successive monthly tariff increases, which together with restructuring had by August 1977 increased tariffs by 120%. The results have been excellent, and in 1976 the rate of return had improved to 6.1%, and for 1977 it is estimated that the rate of return was 9.3% with internally-generated funds covering 50% of capital expenditure requirements. Future Finances 5.05 Recognizing that the Empresa de Energia Electrica de Bogota (EEEB) was a major beneficiary of the Chingaza Scheme, it was agreed during loan negotiations of the US$88 million loan for the second project (Loan 741-CO), that EEEB would make certain contributions to EAAB toward the cost of the project. The contribution was agreed at that time in the amount of Col$280 million, and was based on a preliminary study to determine the value of the benefits resulting from additional power generation in EEEB's existing plants with water from Chingaza. The study was prepared by EAAB and EEEB, together with a firm of consulting engineers. The cost of the Chingaza Scheme is now expected to be considerably larger than estimated at the time of appraisal. At the same time, the benefits of the Scheme to EEEB are likely to be greatly in excess of the actual payments made by EEEB (Col$280 million) to EAAB. The latter is therefore making an important contribution to EEEB's investment program. This has been brought to the attention of the Municipality of Bogota which owns both utilities. Internal Financial Rate of Return 5.06 The internal financial rate of return was estimated at the time of the appraisal to range from 18-21%. With the completion of the Chingaza Scheme in 1981, EAAB plans to operate Tibito as a complement to Chingaza with the latter being the primary source since it operates by gravity in contrast to Tibito which requires pumping. The revised internal financial rate of return, for a 13-year useful life for the plant, is negative. However, would the plant operate for 30 years as is normal for such installations, the internal financial rate of return would be about 10.0%. The lower than expected internal financial rate of return is mostly the result of contingency overruns and lower than anticipated demand. (Table No. 4). A13 INSTITUTIONAL PERFORMANCE Management and Organizational Effectiveness 6.01 The Bank's past efforts in assisting EAAB with institutional improve- ments have been quite successful, especially those related to: (i) pitometric and leak control procedures; (ii) billing, collection and budgetary systems; and (iii) improvements in accounting practices and procedures, including the development of a computer-based financial fotecasting system. Growth 6.02 At the present time EAAB has a total of 2,185 staff members distri- buted between professional, technical and administrative personnel. This is in contrast to 1966 when EAAB had a total of 1,000 staff members. Insofar as an index of one employee per 1,150 persons served is considered adequate, the existing level indicates that EAAB is not overstaffed. Staff Recruitment, Training and Development 6.03 EAAB has had certain difficulties in the recruitment of qualified staff, particularly managerial staff. This is partly due to non-competitive salaries and fringe benefits in the public sector as opposed to the private sector, and partly due to the limited job satisfaction and scope for growth. Political influence, particularly from the Board of Directors, is pervasive. No expatriates are employed by EAAB. PROJECT JUSTIFICATION Project Achievement 7.01 The project was primarily aimed at ameliorating water shortages that had characterized Bogota in earlier years, and from this standpoint the project was completely successful. As a result, Bogota has a safe and reliable source of water, and has sufficient capacity to meet demand requirements to 1980. It is also evident that the project contributed toward institutional improve- ments. Least-Cost Solution 7.02 The project still remains the least cost solution in meeting the demand requirements of Bogota for the period 1972-1980. A14 CONCLUSIONS AND IMPORTANT LESSONS TO BE LEARNED 8.01 The lessons learned from the Tibito Project necessarily involved considerations wider than just physical construction of the production faci- lities. In this connection, it is obvious that the interaction between (i) population growth; (ii) per capita consumption; (iii) cost overruns; and (iv) the coordination between increases in production and distribution capa- ity are fundamental considerations in the planning and execution of projects. 8.02 Projections of future demand requirements depend almost entirely on the assumptions made as to changes in population and urbanization trends, which in Colombia have changed significantly during the last few years. Urban growth, for example, peaked at an average annual rate of 5.4% between 1951 and 1964 (during the period of widespread rural violence) but decreased to an average annual rate of 3.9% during the 1964-73 period. Correspondingly, the rate of total population growth also decreased, from a peak of 3.1% during the 1951-64 period to 2.6% during the 1965-73 period. Although these are national statistics, Bogota has also shown a downward trend in the growth rate. As a very tentative generalization, this suggests that after a certain stage of development, a tendency exists toward a less top-heavy distribution of urban size, and also leads to some expectation of a gradual decline in the growth rates of the large urban centers. This has resulted in a downward revision of demand requirements for Bogota, and may well result in similar revisions for other urban centers in Colombia. Future projects should focus more closely on this trend. 8.03 A significant portion of the water demand growth in Bogota has originated from the squatter settlements and slums. It was estimated, for example, that 59% of the 1972 population lived in tracts that had originated as pirate developments (subdivisions which tend to be developed on the periphery of the city by individuals who gain legal control of the parcels of land, and then resell them rapidly in small plots without urban infrastructure and without authorization from city officials). Notwithstanding the income spread between the various segments of the population, there is considerable evidence to suggest that per capita consumption by this segment of the popu- lation is considerably lower than that of the higher income groups. Perhaps the most striking feature is that the trend suggests that per capita con- sumption of the lower income groups does not appreciably increase beyond a certain level, and this also has resulted in a downward revision of demand requirements for Bogota. Again, this may well result in similar revisions for other urban centers in Colombia. 8.04 Original underestimation of cost and higher than anticipated inflation rates have resulted in substantial cost overruns. The shortage of resources to finance these overruns has squeezed the financial capability, not only of EAAB, but also of the majority of the other water utilities in Colombia. This leads to a desire for at least some official recognition of the problem by the Government, and ideally for some type of national mechanism that would ease the financial burden of the municipalities. A15 8.05 On completion of the project, overcapacity in Bogota coexisted with unsatisfied demand. The gap was wider than it otherwise would have been, in part because some of the investments in the distribution system that were scheduled to be carried out in tandem with the second Bank-financed project were jc: tponed because of fund shortages. Apart from the social merits of connecting a larger segment of the urban poor, this has had signi- ficant financial implications. The Bank-financed portion of the investment program in Bogota has tended to focus on production capacity, leaving the main responsibility for the increase in absorption capacity to EAAB. In retrospect, better results may be achieved if the Bank's efforts in the future are con- centrated equally on production and distribution. Latin America and the Caribbean Regional Office March, 1977  TABLE No. 1 SCHEDULED DISBURSEMENTS Disbursement Schedule at Appraisal in Col$ in US$ Local Foreign Total Local Foreign Total ---------------------million--------------------- 1968 56.1 51.3 107.4 3.3 3.1 6.4 1969 123.4 139.1 262.5 7.1 8.6 15.7 1970 101.8 69.0 170.8 6.0 4.2 10.2 1971 28.0 22.0 50.0 1.6 1.4 3.0 11 Total 309.3 281.4 590.7 11 18.0 17.3 35.3 Actual Disbursements IBRD Disbursements in Col$ in US$ In US$ Millions Local Foreign Total Local Foreign Total --------------------million--------------------- Annual Cumulated II 1969 29.4 35.2 64.6 1 1.7 2.1 3.8 1.5 1.5 1969 85.2 89.7 174.9 4.9 5.0 9.9 3.5 5.0 1970 111.6 110.7 222.3 6.0 5.8 11.8 2.9 7.9 1977 106.0 50.7 156.7 5.5 2.4 7.9 2.8 10.7 1972 157.0 48.8 205.8 7.5 2.1 9.6 1.8 12.5 1973 82.9 31.6 114.5 3.6 1.3 4.9 0.6 13.1 1974 20.2 24.0 44.2 0.7 0.9 1.6 0.6 13.7 1975 23.2 6.5 29.7 0.8 0.2 1.0 0.1 13.8 1976 15.3 5.0 20.3 0.5 0.1 0.6 0.2 14.0 Total 630.8 402.2 1033.0 n 31.2 19.9 51.1 14.0 n, TABLE No. 2 SCHEDULE OF PROJECT COSTS Appraisal Cost Estimates in Col$ in US$ Local Foreign Total Local Foreign Total -------------------- million--------------------- II Construction Tibito II A Pumping & Treatment 33.3 32.9 66.2 2.1 2.4 4.5 Pipeline 86.3 112.9 199.2 10 5.3 7.0 12.3 Distribution 46.4 21.5 67.9 1a 2.9 1.3 4.2 Land Acquisition 3.0 - 3.0 0.2 - 0.2 Engineering 18.7 13.0 31.7 1.1 0.8 1.9 Sub-Total 187.7 180.3 368.0 n 11.6 11.5 23.1 Preparation Tibito II B and future Schemes 29.1 3.0 32.1 1.7 0.2 1.9 If Operational Improvements 4.8 31.0 35.8 0.3 1.9 2.2 Contingencies 28.4 23.7 52.1 1.7 1.4 3.1 Price Escalation 16.1 - 16.1 I - - - Interest during Construction 43.2 37.1 80.3 2.7 2.3 5.0 II Total 309.3 275.1 584.4 a 18.0 17.3 35.3 II Actual Costs in Col$ in US$ Local Foreign Total Local Foreign Total -------------------- million--------------------- Construction Tibito II p Pumping & Treatment 125.8 70.4 196.2 5.4. 4.3 9.7 Pipeline 140.1 131.3 271.4 5.9 7.8 13.7 Distribution 122.0 36.1 158.1 6.0 1.8 7.8 Land Acquisition 8.9 - 8.9 0.4 - 0.4 Engineering 60.6 19.4 80.0 3.0 1.0 4.0 Sub-Total 457.4 257.2 714.6 n 20.7 1 .9 35.6 Preparation future Schemes n (Chingaza) 77.1 4.1 81.2 0 5.2 0.2 5.4 Operational Improvements 14.2 64.8 79.0 i 0.7 2.1 2.8 Interest during Construction 82.1 76.1 158.2 1 4.6 2.7 7.3 Total 630.8 402.2 1033.0 n1 31.2 19.9 51.1 11 am m == m I,mm am = a na = = N ______________N _____________ __________ TABLE No. 3 C 0 L 0 M B I A EmPRESA DE ACUEDUCTO Y ALCANTARILADO E BO A CCPARATIVE TABLE OF FINANCIAL RESULTS .FOR TRE SIX YRARS ENDED DECEMBER 31, 1976 Balance Sheet j ------1971------- ------1972------- ----1973------- ------1974------- ------1975------- ----1976------- Appraisal Aat,1 APPo.I Actual Appraiwal Actual Apprasa.l Actoal APPraial. Actal Appr.s.1 £rn.1 Nos to the Financial Stateme Asset i In the ce of 1976. the Baac Sheat i. as of August 31. In the case of the forecast period Property, Plant ad Eqip~ent e/ 2767 2222 3175 3253 3950 4274 4668 6271 5392 7652 6234 6476 - meaningfl u ~ ta could be prepared =til Les. Accumulated Deprlation ~/ 419 438 32 _ 651 661 883 927 1242 1019 163 g 1247 1942 after the financing deficiency i* resolved. 2348 1784 2647 2602 3285 3391 3841 5029 4373 5969 4987 6534 Vaork t Progres. / 325 903 709 897 847 1286 1355 1348 2181 2619 2954 3457 b/ in thease of the ApPraisil Beteimto. Mork 163 Y7 3356 3499 4132 4677 5 196 6377 6534 8588 7941 9=91 i. Pogo.. - red to le iumea.t Oururt Asa t. during controction. b 11 7 12 17 13 19 14 45 15 20 16 53 £ ludes reer for futura .oial emrc ad Acounta Receioable 93 94 113 124 138 140 166 191 196 250 223 292 pcoaion pay-enta. Investment. 37 35 14 35 5 8 79 3 175 3 292 3 Inentorie- 33 48 50 59 _ g 74 66 92 74 109 - 78 112 d/ Includes ut. oing to a ajor oubcotrator 174 184 189 235 2-13 24 32 331 460 382 6 4 for the construction of certain^ ærke. Other A..ete 36 27 6 36 36 34 36 24 36 39 k Total AGst. 2883 2898 3381 3760 43iIý 4932 5537 6732 7050 90W 8586 10492 21 Property, plat, d quip~ent, *ccu~ulated - = ' -- - - - - dep..iatton ad ~ok t proe i. -eva1ued Li.bilitie. ad Equity in accordance with the Col"in Comr Price Long-tem Debt, Le.. Current Portio o/ 861 691 1088 962 1305 1338 1729 1820 2311 2572 2900 3200 Current L,.bilities: £/ Includes all' rvnez fro direct billinge but Accots Payable-Regular 131 111 134 150 150 222 194 170 227 216 226 328 el.d. .raloriston nd other ta.. Acounts Payabl-1n Diopute d/ - - - - - - - 83 - 125 - - Long-tem Debt due within One Yer -1 5 1 104 66 124 68 126 646120 g/ Includes principal and Interest pay~es 00 162 162 185 21 2) 26 260 L77 95 7 n90 448 Lig-te debt. Equity h/ Net of ncrese In current labilities. Cotributed Capital 660 660 820 741 99 837 1230 968 1480 1146 1735 1257 RetSined Earning. 492 622 613 789 788 797 1022 834 1359 960 1763 902 i ncludes doated work.. valoriaation and Rev&luation Surpl- 708 763 873 1027 1083 1634 1316 23- rotig fund recooerie.. 1860 2045 2308 2557 2866 3288 3568 4535 4444 5970 5396 6844 Total Liabilities and Equity 2883 2898 3581 3760 4 4952 5557 6732 7050 9009 858I 9 2 / U quvalent described In the tetal portlon . . - . . --- - - - of the report ~as translated at the verag rates E.Iangs ad Cash Flo of echaS prevailleg during the petod the ' expenditur: ~as oade. - Ravenoe4/ 347 328 440 387 543 480 657 523 800 692 931 866 Expense 245 208 333 243 384 362 439 479 496 608 566 756 / the case of the appraial estites, the uber Net Inou e 102 120 107 164 9 8 218 44 304 84 365 110 of c~onnetion c~teomputed 00 the basis of 8 Non-Caah Charges 88 60 143 72 136 139 172 190 182 243 200 326 persons per connection. 1 the case of the ctual Internally Generated Fund. 1960 180 25 216 3I 257 390 234 486 327 ws 436 and revised data, the numbr of c ti~o n ~are Debt Servic &1 ulP 67 25 97 48 115 126 122 163 121 191 119 1951 given. Increas in Wor0king Capital / 4 46 _Q) 1 <11) 2 Q6 _78 £73) 123 U..ble l.tornlly Generated nd. 109 109 160 157 211 193 222 "33 287 207 323 145 Equity Cotribution 11 105 104 160 88 175 123 235 165 250 213 255 238 Bank Loan 536-C0 72 120 50 76 - 29 - 25 - '4 - 5 Bank Lo~n 741-Co 65 - 175 123 214 123 415 130 550 591 520 594 Othor 183 71 1 136 9 2 - 130 - 6, -7 Pud ~lable for Inem ntst 10 25- 2- ý- A2 7 ý 07 14 08 i9 TibitoProject 221 183 74 187 10 72 - 28 - 53 - 24 m~ngaS Project 82 21 226 186 272 186 512 209 645 704 572 798 Eitenalons to Dietributin Systems 164 171 174 147 219 167 235 190 278 201 298 224 Major 100erage Work. 65 - 65 - 76 - 77 - 83 - 108 - Interest During Cantrution ~ _io0to4gCotOt0 -L 2 35 6 60§ _32 65 I 48 56 81 83 20 144 53 1 55 50 9 72 483 1087 1041 1098 1190 Annual Financing Deficiency - - - - - - - - - - - 191 8erage Rate Base 1416 1092 1933 1559 2265 2197 2720 3099 3109 4063 3509 4819 Rate of Retr 10.0% 11.8% 9.0% 10.2% 9.8% 7.6% 10.3% 3.6% 11.5% 4.0% 11.9% 6.1% Ave0g. Tariff - Col$/m3 1.68 1.68 1.81 1.68 1.96 1.84 2.11 2.07 2.28 2.51 2.46 3.13 Ehar U 1)/ 19.1 19.1 - 21.9 - 23.6 - 25.6 - 32.9 - 36.1 n.hange Rat Factorl/ .0524 ,0524 - .0456 - .0424 - .0390 - .0303 - .0277 Operating Data Population (cillloa) 2.7 2.6 2.9 2.8 31.1 3.0 3.3 3.2 3.5 3.3 3.7 3.4 population Served (mllin) 2.1 1.9 2.5 2.0 2.8 2.2 3.2 1L3 3.5 2.5 3.7 2.9 Vater Production (,illion o3) 210 196 258 216 302 246 346 253 389 253 420 272 <ater Cosuptioa (illin .3) 155 146 191 160 224 172 256 183 292 197 315 . 211 Unaounted.-for Water 26% 25% 26% 26% 26% 30% 26% 28% 25% 22% 25% 22% Number of Connections k/ (thosand.) 263 232 313 247 350 270 400 293 438 313 463 348 Wllde~an:yba (LcPS) Ne: The forecasta up to 1976 are taken fron the Appralsal Report of the Second water Supply Project. ,-auary, 1977  Table No. 4 COLOMBIA EMPRESA DE ACUEDUCTO Y ALCANTARILLADO DE BOGOTA Incremental Financial Rate of Return - Costs - Sales Vol. Net Benefits Year Capital Operating (m3 x 106) Revenues (Revenues - Costs) 1969 293 2 2 11 (784) 1970 684 9 12 57 (636) 1971 499 12 16 72 (439) 1972 521 21 30 119 (423) 1973 241 36 55 195 (82) 1974 151 37 59 189 1 1975 114 43 67 209 52 1976 92 46 73 229 91 1977 99 59 93 378 220 1978 160 65 103 419 194 1979 154 73 115 468 241 1980 134 81 128 520 305 1981 116 89 141 573 368 1982 100 97 154 627 430 1983 - 97 154 627 530 1984 60 97 154 627 470 1985 0 97 154 627 530 1986-2000 0 97 154 627 530 Equalizing Discount Rate = 10% Note: Unless otherwise stated all figures are Col$ x 106 in 1976 prices.  COLOMBIA BOGOTA WATER SUPPLY PROJECT LONG RANGE MASTER PLAN SCHEMES FACILITIES SUMAPAZ Hke D.., lake r laguna Existing (1967) la Nu-ber (order af implementation) - Treatment plant Proposed Bnt Project (1968-1971) 22 m% y 1d 0 Pumping station ..... ......F.t.r. prejeer.; (-ftei 1971) Lim1ts of explolted watershed m Storage tank River Transmission ur principal distribution line 1----8 Tunnel K ILOMETrERS -=b . U SUM A PAZ SCHEME CHINGAZA REGION '- b P v6.0 mh- CHINGAZA-TEUSACA SCHEME UMAPAZ S hUTH FS- IOp CA cANTARRANA PROJE-CT 22 -31 s......... ROBOGOTA SCHEME 4. 0 mrl3. . UAPZWS ...........1. RIOiT TUJEIO- ALTO SUAREZ SCHEME 4 0.i3• •1, ------ SCHEME 10 1pos 'yR 3/1) For detail of proposed Bank proleet see Mop 2 MARCH 1968 tURD--2192R  COLOMBIA COBO1GMB T A vaeua'Q n BOGOTA WATER SUPPLY PROJECT s '""""os rOqu Noro" Ptan! -- TIBITO-]I SCHEME Tn 0. (PROPOSED BANK PROJECT) Pepng dtre ent ant Tr (3 1e 3- so ACARO ..o ntronm . Tros** onk SUSA So ae CHIA ENGATIVAFONTIBON EX IST ING P LANNED E RD Treat.snt PlantOS Storage Tank SOA Tranllission and prlncipal dist ribution pi pe Ine 60 78 " ~Daetere ninhs pip es tentative.,p.nding final design). g Present build-up areas Road Raitroad. MARCH 1968 IBRD-15 1 MAP 3 COLOMBIA BOGOTA WATER SUPPLY PROJECT TIBITO I1 SCHEME DETAIL. PUMPING AND TREATMENT PLANT TIBITO South intake- e lProtectiono k lvoDtm Row wTer ke -Pumping Station 78l Presedimentallon7 80s'ns / ,ROW Water PlPe/mfeg /60" /./0 Cooguloton and edlimentatlion Tnks ...0/ High Pressure - E i/ ' Booster Pumping it Tonk Storion %71 Control BUodg tO 0A) Filter Buildin!g 78 6O, Transmission Pipe/ines to' Bogolod SExisting facilities (Tibito I) Proposed Bank project (Tibito IIA) L - Possible future expansions (Tibito IIB) 10 2 0 60,78" Diameters in inches METERS MARCH 1968 IBRD-2179R