Bolivia - First and Second Railway Projects

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3268 PROJECT PERFORMANCE AUDIT REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) December 31, 1980 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. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) TABLE OF CONTENTS Page No. Preface ............................................................ i Project Performance Audit Basic Data Sheet ...................... ii Highlights ........................................................ iv PROJECT PERFORMANCE AUDIT MEMORANDUM .................... ....... 1 Annexes Comments from Borrower ........................................ 3 Attachment: PROJECT COMPLETION REPORT I. Introduction .......................................... 7 II. Project Preparation and Appraisal ........................ 8 III. Project Implementation and Cost ............................ 11 IV. Traffic and Operations ....................................... 15 V. Financial Performance .................................... 18 VI. Institutional Performance and Development ................ 21 VII. Economic Reevaluation ............................... .22 VIII. The Role of the Bank .................................... o. 23 IX. Conclusions .... .......................................... 25 Tables 1. Actual and Expected Physical Completion .................. 27 2. Actual and Appraisal Estimates of Project Costs (First Project - 2A, Second Project - 2B) .............28 3. Traffic Statistics ....................................... 29 4. Selected Operating Statistics (1971-1978) ,........ ..30 5. Actual and Projected Revenues and Expenses for 1971-1978 ......................................... 31 6. Actual and Projected Balance Sheets for 1971-1978 ........ 32 7. Actual and Appraisal Expectation of Project Financing 33 Map IBRD 11455R3 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. - 1 - PROJECT PERFORMANCE AUDIT REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) PREFACE This report presents a performance audit of the First and Second Railway Projects in Bolivia for which Credit 346-BO and Loan 1121-BO for US$8.0 million and US$32.0 million equivalent were made in December 1972 and June 1975, respectively. Credit 346-BO was closed fully disbursed in June 1976. Loan 1121-BO was closed in June 1980; US$3.3 million equivalent was cancelled, reducing the loan amount to US$28.7 million equivalent, when Bolivia Railways, in agreement with the Bank, purchased six diesel locomotives under a supplier-s credit. This report consists of a summary of Highlights and a brief Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by the Bank-s Latin America and the Caribbean Regional Office in conjunction with the Bolivian National Railways (ENFE) who participated actively in its production. OED has reviewed the PCR against the Appraisal and President-s Reports, the legal documents and the transcripts of the Executive Directors' meetings which considered the project. Project files and documents have also been reviewed and discussions held with Bank operational staff. OED has found that the PCR covers the significant aspects and lessons of the projects and the reevaluation of their justification and has no reason to question its analysis and findings. No mission was undertaken for these projects by OED staff. The draft audit was sent to the Borrower in the normal course. Copies of the Borrowers- comments are attached as annexes to the PPAM. - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-Ba) KEY PROJECT DATA Credit 346-BO Loan 1121-B0 Original Actual or Original Actual or Item Plan Reestimate Plan Reestimate Total Project Cost (US$ Million) 11.6 15.9 41.0 51.1 Overrun (%) - 37 - 25 Cost of Items Implemented (US$ Million) 8.0- 15.9 41.32-1 51.1 Overrun (%) - 100 - 24 Credit/Loan Amount (US$ Million) 8.0 8.0 32.0 28.7 Disbursed ) 8.0 8.0 - 28.6 Cancelled )As of 9/30/80 - - 3.3 Repaid ) Aso-/08 Borrower's Obligation ) - 8.0 - 35.56-3/ Date Physical Components Completed 12/74 6/78 12/76 12/78 Proportion Actually Completed by above Date (%) 10 69 65 90 Proportion of Time Overrun (%) - 175 - 133 Economic Rate of Return (%) 21 25 24 19 Financial Performance Disappointing4. Very Good Institutional Performance GoodA/ Very Good Cumulative Estimated and Actual Disbursements (Credit 346-B0) (US$ Thousand) FY74 FY75 FY76 FY77 (i) Estimated 4,260 8,000 8,000 8,000 (ii) Actual 1,992 6,471 7.700 8,000 % of (ii) to (i) 46.8 80.9 96.3 100 Cumulative Estimated and Actual Disbursements (Loan 1121-Ba) (US$ Thousand) FY76 FY77 FY78 FY79 FY80 FY81 (i) Estimated 1,911 28,930 32,000 28,7005/ 28,700 28,700 (ii) Actual 8,100 21,600 26,600 28,580 28,590 28,590 % of (ii) to (i) 423.9 74.7 83.1 99.6 99.6 99.6 OTHER PROJECT DATA Credit 346-Ba Loan 1121-BO Original Original Item Plan Actual Plan Actual First Mention in Files or Timetable 9/01/70 Government's Application 6/01/71 1974 Negotiations 4/--/72 10/--/72 4/21/75 Board Approval 11/28/72 6/03/75 Credit/Loan Agreement Date 12/01/72 6/05/75 Effectiveness Date 2/21/73 8/06/75 Closing Date 12/31/75 6/30/76 6/30/80 Borrower Government of Bolivia Executing Agency Empresa Nacional de Ferrocarriles Fiscal Year of Borrower January 1 - December 31 Follow-on Project Name Second Railway Project Third Railway Project Loan Number 1121-B0 1422-B0 Loan Amount (US$ Million) 32.0 35.0 Loan Agreement Date 6/05/75 6/06/77 1/ Approximate appraisal cost of the items actually implemented. 2/ Appraisal cost decreased by 10% since only about 90% of the original project was implemented and increased by US$4.4 million which was the estimated cost of additional locomotives bought under the project. 3/ includes US$6.97 million for exchange adjustment. 4/ Refers especially to the planned project implementation period (1972-74). 5/ US$3.3 million of the loan was cancelled. - iii - MISSION DATA Credit 346-B0 Loan 1121-B0 Month/ No. of No. of Date of Month/ No. of No. of Date of Item Year Weeks Persons Man-weeks Report Year Weeks Persons Man-weeks Report Preparation 3/74 2 3 6 4/30/74 Preappraisal 9/71 0.5 3 1.5 9/10/71 7/74 2 4 8 9/25/74 Appraisal 9/71 3 3 9 11/15/72 11/74 3 4 12 5/09/75 Subtotal 3.5 10.5 7 26 Supervision I 8/73 1.5 4 6 10/12/73 7/75 2 3 6 8/21/75 Supervision II 11/73 2.5 4 10 1/15/74 4/76 2 4 8 5/06/76 Supervision III 3/74 2 3 6 4/30/74 9/76 1 3 3 10/07/76 Supervision IV 7/74 2 4 8 8/23/74 5/77 1 2 2 5/25/77 Supervision V 11/74 3 4 12 12/18/74 1/ 7/77 2 4 8 8/15/77 Supervision VI 3/75 2 4 8 4/03/75 2/78 1 3 3 2/28/78 3/ Supervision VII 7/75 2 3 6 8/21/75 2/ 6/78 2 2 4 7/25/78 3/ Supervision VIII 4/76 2 4 8 5/06/76 2/ 2/79 1 2 2 2/27/79 Supervision IX 9/76 1 3 3 10/07/76 2/ Supervision X 5/77 1 2 2 5/25/77 2/ Completion 2/80 1 4 4 5/14/80 2/80 1.5 2 3 5/14/80 Subtotal 20 73 13.5 39 Total 23.5 83.5 20.5 65 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Bolivian Peso ($b) Appraisal Year Average (1972 - Credit 346-BC) Exchange Rate: US$1 = $b 12.00 Appraisal Year Average (1975 - Loan 1121-BC) US$1 = $b 20.00 Intervening Years Average US$1 = $b 20.00 Completion Year Average US$1 - $b 20.00 1/ Combined with appraisal of the Second Railway Project (Loan 1121-80). 2/ Combined with supervision of Loan 1121-BO). 3/ Combined with supervision of the Third Railway Project (Loan 1422-B0). - iv - PROJECT PERFORMANCE AUDIT REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) HIGHLIGHTS The first two railway projects in Bolivia have been quite successful and encountered relatively few problems during implementation. This contrasts with most railway projects assisted by the Bank Group. The purpose of the projects was to rehabilitate and modernize Bolivia's two railway systems to arrest the declining quality of railway services, increase traffic carrying capacity and make the railway operationally and financially viable. The western system (2,100 km) was built from 1870-1920 to serve mineral traffic between the Andes Plateau and Pacific ports, while the eastern system (1,400 km) was mainly built in the 1950s and 1960s to develop the eastern tropical plains and connect them with Atlantic ports. The two systems are separated by rugged mountains and linked only by a long detour through Argentina. Before the start of Bank Group lending, UNDP-financed consultants had already assisted the railway over a period of two years in introducing modern operational and administrative measures and planning future invest- ments. The First and Second Railway Projects concentrated on replacement and rehabilitation work, including track, telecommunications, motive power, rolling stock and workshop equipment, and also covered continuing technical assistance (PCR, Tables 2A and 2B). The projects achieved most of their objectives but the scope of the first project had to be reduced by some 30%, while it had a cost overrun of about 100% over the part actually implemented, mostly because of inflation (PCR, para. 3.03). The second project, as originally planned, was reduced by about 10%, but additional locomotives were included; it had a cost overrun of 24% over the items actually implemented (PCR, para. 3.06). The two projects suffered time overruns of 175% and 133%, respectively, largely because of unrealistic implementation schedules included in the appraisals (PCR, para. 8.04). The projects made a substantial contribution to improved maintenance procedures, better train operations and higher equipment utilization, while new equipment provided additional transport capacity. Procurement of spare parts has resulted in better equipment availability but for locomotives this was not sustained (PCR, paras. 4.07-4.11, Tables 4A and 4B). The financial performance under the projects remained below expecta- tions until 1975 when it dramatically improved as a result of sharp tariff increases (PCR, paras. 5.01-5.03). In that year, most financial criteria were exceeded and during subsequent years, the performance remained generally good (PCR, Annex 5). The PCR has reestimated the economic returns on the two proj- ects at 25% and 19% against appraisal estimates of 21% and 26%, respectively - v - (PCR, para. 7.03). The projects received good support from the Government and the Railways' management (para. 4), which contributed to important institu- tional improvements. The technical assistance by a suitable consultant team has been effective while Bank supervision, which was frequent and had good staff continuity between missions, has also made a substantial contribution. Points of special interest are: - the two years of UNDP-financed technical assistance led to a well prepared project (PPAM, para. 2; PCR, paras. 2.01-2.03); - in spite of locomotive and rolling stock availability reaching a low during the early part of the project period, the railway accommodated its increasing traffic volumes because it could rent equipment from neighboring countries (PPAM, para. 3; PCR, para. 4.06); - the financial situation of the railway was aided by its rela- tively unchallenged monopoly position (PCR, para. 5.05); mostly satisfactory Government action on tariffs (PCR, paras. 5.02-5.03); and the fact that poor technical performance of its own equipment did not lead to a loss of revenue (PPAM, para. 4); - the cost per traffic unit in constant terms decreased by 18% (PPAM, para. 5; PCR, para. 5.04); - both freight and passenger traffic (in unit km) during each of the projects increased faster than forecast, while the average haul also increased substantially (PCR, paras. 4.01-4.05); - the revised targets for staff reduction were achieved and staff productivity has more than doubled (PCR, para. 6.05). PROJECT PERFORMANCE AUDIT MEMORANDUM BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) 1. The first two railway projects in Bolivia have been quite successful and encountered relatively few problems during implementation. This contrasts with most railway projects assisted by the Bank Group. Following is a brief review of the reasons for the success in Bolivia, pointing out some possible parallels with other projects. 2. The first project was financed after an unusually long period of technical assistance and project preparation. This included a grant by the Bank in 1962 to study ways to integrate the different state-owned railway systems; a UNDP-financed transport study from 1967-69; and UNDP-financed technical assistance from 1970-72 (PCR, paras. 2.01-2.03). Since the Bank was executing agency for all the above activities, a working relationship had already been established between the railway and the Bank Group at the time when the first project was financed. It appears, however, that the long preparation period was partially caused by the Bank's reluctance to lend for railways in Bolivia because of economic and political uncertainties. 3. During the initial years of the first project, both locomotive and freight wagon availability decreased substantially. In comparable cases,1/ the impact of such a situation was very serious, with goods - even mineral ores - transferring to road transport and some freight not being moved at all, which resulted in damage to the national economy and a loss of revenues to the railway. In the case of Bolivia, the exceptional opportunity to rent equipment from neighboring railways assisted in maintaining transport capacity and has been one of the critical factors leading to the projects success. 4. However, other elements also played an important role. The rail- way s position was strong because competition from road transport was limited. The Government supported the railway with the local exchange needed for investment, in approving tariff increases and in appointing energetic manage- ment. The management accepted and worked with both the consultants and the Bank in establishing new key departments and in developing training programs for local staff. The Bank-s supervision of the project was regular and experienced, and there was continuity in the personnel used. Many of these factors have been lacking in railway projects in other countries. I/ Project Performance Audit Report on Senegal First Railway Project (Report No. 1631) and Project Performance Audit Report on Burma Third Railway Project (Report No. 2579). -2- 5. Finally, it should be noted that the cost per traffic unit in real terms decreased during the project period. This was largely the result of improved operational efficiency and increased use of diesel traction. A similar case was noted in another recently audited project.1/ In both pro- jects, traffic increased more than expected, but it is not clear whether the increase was a direct result of the cost reduction. 1/ Project Performance Audit Report on Thailand Fourth Railway Project (Report No. 2611). Annex 1 -3- PROJECT PERFORMANCE AUDIT REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) COMMENTS FROM BORROWER (Translated from Spanish) EmDresa Nacional de Ferrocarriles (ENFE) La Paz, December 1, 1980 Office of the General Manager Mr. Shiv S. Kapur Director Ooerations Evaluation Department World Bank Washington, D.C. Subject: Performance audit report on first and second railway projects Dear Mr. Kapur: Further to the telex to you of November 6, 1980, I have pleasure in replying to your letter of October 10, 1980, which accompanied the draft of the confidential report on the results of the first two railway projects, executed by ENFE under loan agreements 346-BO (1972) and 1121-BO (1975). First of all, I should like to thank you for sending the draft, which apprises us of the Evaluation Department's independent opinions. These are particularly useful to ENFE because, in addition to having our own opin- ion, we are now able to correlate criteria developed in the light of experience acauired over a long process of accomplishment, by ENFE as interested party and the World Bank as financing and supervising agency, involving more than six years of intensive work. The document is therefore of the utmost interest. It will be helpful not only to ENFE itself but also to the National Government, for whom the report sets forth the results of the joint effort accomplished by ENFE, the World Bank and the Bolivian Government, and will in addition serve as the basis for adjustments and for avoiding future errors. Secondly, examination of the reDort shows that it covers all the Doints provided for both in the Anraisal Renort and in the credit and loan agreements, in addition to a variety of other agreements, emerging from adjust- ments to action programs,in light of the factual situations encountered, made by joint agreement between the executivesof ENFE and the various missions des- patched by the World Bank over a number of years. Special attention has been given to reviewing each and every point of the report, both the Summary and the Memorandum of Results, of the ten chapters of the Final Report with its appended tables and map. The conclusions of the draft Performance Audit Report on the First and Second Railway Projects are undoubtedly encouraging to ENFE because they bring out the more salient positive facts which summarize the great effort ac- complished jointly by the ENFE technicians and officials responsible for exe- cuting the various projects here in Bolivia and the World Bank experts, specialists and advisers who performed supervision missions from time to time and those of the SOFRERAIL Technical Assistance Mission which assisted both sides. This General Management is nevertheless aware that the railway rehabilitation projects have not yet achieved their basic objectives nor the partial goals originally proposed. It is, however, also sure that with con- tinued mutual cooperation we shall succeed in achieving and even exceeding the original aims, which consisted in taking an old and almost inoperative railway infrastructure and rebuilding, rehabilitating and modernizing it, as we haVe done up to now, so that it may serve efficiently theeconomic and social development of Bolivia. There were some errors of form in the document, which I am attaching marked up for correction. I am also appending tables 3, 4-A, 4-B, 5 and 6, with official data, so that they may be completed or amended, as appropriate, in the final version of the report. -5- T also wish to inform you that this General Management has taken due note of the various suggestions and recommendations made at certain points and will accordingly give its attention to imoroving ENFE's situation. Finally, I should be grateful if, when the Final Report is approved and published, you would send me a number of copies, if possible in Spanish, for transmission to the higher authorities of the National Government, which is awaiting the results of the railway projects. Yours sincerely, /s/ Carlos Azurduy T. General Manager ENFE Encl. -6- ANNEX 2 PROJECT PERFORMANCE AUDIT MEMORANDUM BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) COMMENTS FROM BORROWER (Translated from Spanish) December 2, 1980 MR. SHIV S. KAPUR INTBAFRAD 1818 H STREET N. W. WASHINGTON D.C. 20433 IN REPLY YOUR LETTER OCTOBER 10 PLEASED TO EXPRESS MY AGREEMENT WITH PROJECT PERFORMANCE AUDIT REPORT ON FIRST AND SECOND RAILWAY REHABILITATION PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) PREPARED BY EVALUATION DEPARTMENT OF WORLD BANK GROUP. KIND REGARDS, COLONEL RENE GUZMAN FORTUN MINISTER OF TRANSPORT AND COMMUNICATIONS - 7 - ATTACHMENT PROJECT COMPLETION REPORT BOLIVIA FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-BO) 1. INTRODUCTION 1.01 Bolivia is a land-locked country, separated from the Pacific Ocean by the high chain of the Andes, and from the Atlan ic by the full width of Brazil. The country has an area of 1.1 million km , which can be roughly divided into three regions: the barren highlands, or "Altiplano" (altitude 4,000 m) in the west where most of the population lives and where the mines, which constitute the traditional wealth of the country, are located; the central highlands of the eastern Andes in the midwest; and the lowlands in the east and north (altitude below 500 m), which are really an extension of the Amazon Valley and which contain rich agricultural land, petroleum and natural gas. Because the terrain is difficult and traffic densities are light, domestic transportation services are very costly and hinder national efforts to integrate these diverse regions. In addition, external transport facilities assume special importance to the economy since exports consist mainly of bulk commodities and depend on efficient, low-cost transportation to the ocean ports in Chile, Peru and Brazil which serve Bolivia's trade. 1.02 Transport services constituted about 8% of GDP during the early seventies, and demand grew at an average rate of 9% between 1967 and 1974, a period during which GDP grew at a rate of about 6%. The major mode is pipeline transport, which handled about 75% of ton-km in 1974, followed by road (16%); rail (7%), water and aviation together account for less than 2%. Three of the transport modes carry important amounts of passenger traffic, but data are incomplete. The railways also play a key role in the transport of international trade; export-import traffic constitutes over 80% of the freight carried by the railways. 1.03 Most of the country is accessible by only one transport mode; the largest network is the road system, which consists of 38,000 km, but of which about 1,200 km are paved and a further 6,600 have a gravel surface; most of the paved portion is in the west. The railway system is 3,500 km long;there are 3,200 km of pipelines, and the river system measures about 1,600 km. The national airline (LAB) has a route network of about 16,000 km within Bolivia. 1.04 The rail network consists of two separate systems including 2,100 km in the west and 1,400 km in the east (Map IBRD 11455R3). While there is indirect rail access between the two regions through Argentina, transit traffic is small and the main traffic flows are to and from the major ports outside of Bolivia, i.e., Matarani in Peru and Arica and Antofagasta in Chile, which serve the west, and Santos in Brazil and Buenos Aires in Argentina, which serve the east. In the east, there is no road system competing with the railways; in the west, there is a road network. 1.05 Bank group involvement in the sector commenced in 1962 through financing of a survey of railways in Bolivia, followed by a UNDP-financed national transport survey which was executed by the Bank in 1969. The latter survey focused its conclusions on the scarcity of data available on the sector, the inadequate level of user charges and the inadequacy of transport - 8 - planning and coordination. Progress has been made on these problems since the study was carried out; a key aspect has been the formation of a Directorate of Planning and Coordination in the Ministry of Transport and various transport agencies, including the Empresa Nacional de Ferrocarriles del Estado (ENFE). Data problems continue, however, and, further guidance on policy options and road user charges is needed; therefore, the second National Transport Study has been financed under the Third Railway Project. 1.06 This project completion report (PCR), covering the first and second rail projects, has been prepared with the assistance of the Borrower, who provided extensive detailed reports for the Bank's review. These were the second. and third transportation projects executed by the Bank in Bolivia, and, because of the substantial interrelationship between the two, a joint PCR has been prepared. The two loans were Credit 346-BO for US$8.0 million, dated December 1, 1972, and Loan 1121-BO for US$32.0 million (since reduced to US$28.7 million), dated June 5, 1975. The loans covered two consecutive time slices of the investment plan executed between 1973 and 1978. The Bank had previously (in 1969) financed construction of a gas pipeline and has since financed three more projects in the transport sector for railways (a third loan to ENFE), airports and road maintenance. This report reflects the assessment of ENFE and the Bank on completion of the two projects. Since that time, there have been both technical problems (track interruptions due to flooding) and political problems which have reversed the favorable trends evident at that time. These problems took place after the projects were completed, are being dealt with in the context of the supervision of the Third Railway Project and will be reviewed in the PCR for that project. II. PROJECT PREPARATION AND APPRAISAL Background 2.01 Bank group involvement with the Bolivian railways commenced well before the first loan was approved in December 1972. The Bolivian Government, in 1959, had nationalized its largest railway, the British-owned Bolivian Railway Company, which had operated a network of 1,198 km in the Altiplano. The railway was joined with the five other state-owned railway systems, having a total network of 940 km, and was operated under the supervision of the Direccion Nacional de Ferrocarriles, a part of the Ministry of Transportation. In response to Government requests, a World Bank grant was provided in 1962 to finance a three-month study, by experts from SOFRERAIL consulting firm (France) to recommend what steps should be taken to improve this conglomerate of railways. Following one of the recommendations of this group, ENFE was formed in October 1964; the network incorporated the six railways of the Altiplano, to which were added the lines in the eastern system, including the Santa Cruz-Corumba line (651 km) in 1965, and the Santa Cruz-Yacuiba and the Boyuibe- Cuevo lines (580 km)in 1969. As a result, by 1970 only the Machacamarca-Uncia line (105 km operated by the Bolivian Mining Industry) and the Guaqui-La Paz line (65 km operated by Peru) remained outside of ENFE-s responsibility. - 9 - 2.02 Following its formation, ENFE applied for a UNDP grant to finance a program of technical assistance. It was decided that, before such a program was carried out, a General Transport Study should be prepared; this was done in 1967-1969 under a UNDP grant executed by the Bank. In the meantime, the railways continually operated under a deficit, and the fleet of locomotives had fallen into such disrepair that only 25% were in working condition and ENFE-s operations were reportedly on the verge of collapsing. Therefore, in 1968, the Government bought 20 DE locomotives with a loan from Japan and ten ferrobuses using a German Suppliers Credit and 5 DH locomotives, 4 DH shunt- ers, 2 automotives with four coaches each, 80 freight wagons and 20 special wagons. 2.03 Although the transport study did not recommend that the rail system be improved, ENFE again applied for UNDP aid to finance technical assistance once the study was completed; this time, a US$753,000 grant (including US$40,000 for fellowships) was provided in September 1970. The Bank was convinced that the railways' importance to Bolivia was too great to allow them to continue in their then-present state and agreed to act as Executing Agency for UNDP. A contract was consequently awarded to define and assist in the financial, managerial, operational and technical rehabilitation of ENFE. In the context of this work, the consultants defined an action program for improvements and a Five-Year Rehabilitation and Investment Plan for 1973-1977. The first two years of the recommended plan formed the basis for the appraisal of the first project, with the implicit understanding that the remaining portion would be financed under a followup project if the first phase went well. Project Appraisal 2.04 The consultants had been working with the railways for about a year by the time the project was appraised. During this period, the Bank and ENFE were able to work closely with the consultants, and, thus, there was clear agreement by the time of appraisal regarding the physical operation and institutional aspect involved in rehabilitating and modernizing ENFE and the details of the action program that needed to be implemented. 2.05 It was well understood at the time of the appraisal of the first project that the technical assistance program would have to be extended through the execution period of the project. UNDP agreed to finance this extension provided that the Bank would commit itself to supplying financial assistance for equipment acquisition. While the Bank was convinced that the necessary preparations had been made to define a sound and supportable project, there were delays in project processing because of an uncertain lending climate at the time which reflected the Bank's reservation about the Government's economic policies. Bolivia devalued its currency late in 1972 and the loan was presented to the Board shortly thereafter; in fact, there had not been sufficient time to revise the documents and local cost estimates to reflect the devaluation. (For this reason, cost conversions in this report focus on the dollar figures in the appraisal.) During the period of delay, UNDP fortunately agreed to finance a temporary extension of the consultants- contract. - 10 - Project Description and Goals 2.06 The total investment program for 1973-1977 defined by the consultants was estimated to cost US$37 million equivalent; of this total, some 31% was for rolling stock, 30% was for track and civil works, 15% was for motive power and the rest for workshops, parts and technical assistance. Of this total, US$11.6 million equivalent, corresponding to the 1973-1974 time slice of the plan, was selected for inclusion in the first project; this amount covered mainly essential equipment for track maintenance and repair, telecommunications equipment, rail tractors for light shunting operations, passenger railcar sets and 200 freight cars. In order to improve the utilization of the railways' existing equipment, the Bank also financed spare parts and workshop equipment; additional financing for technical assistance was provided by UNDP. 2.07 Using the above-financed equipment and works, ENFE was expected to make a substantial improvement in operations. The action plan drawn up specified targets for the full period to 1977, i.e., that period proposed to be covered by both the First and Second Projects, but interim targets for achievements by the end of the First Project were defined. The targets covered the amount of track to be rehabilitated, the number of locomotives to be operational, the scrapping and rehabilitation of passenger and freight cars, the concentration and modernization of workshops, staff reductions, improvements in management and operation procedures and the overall financial position and profitability of the railways. A number of improvements had already been made in these areas by the time the project was presented to the Board; for instance, pilot works for track improvement had been carried out, improved train operating plans had been introduced, and tariffs had been completely revised. 2.08 Bid prices proved to be about double the appraisal estimates and forced the cancellation of a number of components of the First Project. As a result, no meaningful comparison of achievements against the action plan targets could be made at the scheduled time for appraisal of the Second Project (late 1974). Bank staff felt that sufficient progress had been made to warrant the second loan being appraised as planned; a new investment plan covering 1975-1979 was prepared, and the 1975-1976 time slice of this plan was recommended for financing under the Second Project. This included items canceled from the First Project. The major items were track rehabilita- tion; equipment and supplies, such as rail, sleepers, earthmoving and telecom- munications equipment and items necessary for producing, shipping and placing ballast; 300 freight cars and five passenger cars; six diesel locomotives; parts; workshop equipment; some cargo handling equipment; and the associated technical assistance for improving the railways. Again, a set of targets for 1975-1979 was considered to be part of the project. These targets duplicated those agreed in the First Project and, in addition, covered maintenance objectives and needed improvements in planning and financial reporting procedures. 2.09 Neither project included a component addressing sectoral issues outside the railways; this matter was expected to be handled concurrently under a UNDP project aimed at strengthening the Directorate of Transport - 11 - Planning within the Ministry of Transport. This project was to address sectoral information needs, sectoral policies, and user charges, but was canceled after four years, during which period little had been achieved because local funds were not available. In retrospect, it seems unfortunate that some funds for this project were not included in the First and Second Railway Projects, as was finally done in the case of the Third Railway Project. III. PROJECT IMPLEMENTATION AND COST 3.01 The first project was to be implemented during 1973 and 1974, with some items to be delivered during 1975; the second project was to be implemented during 1975 and 1976, with some deliveries of equipment during 1977. However, because of delays between appraisal and Board presentation, the first loan was not effective until early 1973; procurement did not get under way until 1974 and continued through 1976. The second loan was appraised during 1974 and became effective in mid-1975; procurement occurred essentially during 1976-1978. Thus, much of the procurement of the first project occurred after the appraisal of the second project. In addition, about US$7.0 million of items canceled from the first project were included in the second project, and progress on the action plan targets took place principally following appraisal of the second project. Consequently, the interrelationship between the two projects is substantial, and it is for this reason that a joint PCR has been prepared. Project Implementation 3.02 Implementation experience with the two projects is summarized in Tables 1, 2A and 2B. These data show that: (a) the implementation schedules were overly optimistic in that the two projects were not essentially completed until December 1978 instead of December 1976 as planned; (b) while quantification of the relevant project costs is imprecise because of changes in project scope, it is apparent that foreign exchange costs (i.e., equipment) were seriously underestimated in the case of the first loan; (c) the local costs of the project were substantially underestimated (partly reflecting the peso devaluation that occurred after the appraisal). These expenditures were mainly used for track rehab- ilitation; in all, some 237 km of track were rehabilitated between 1973 and 1978 at a cost of $b 390 million, in comparison with combined appraisal estimates of 260 km of track costing $b 170 million; and (d) the delays in implementation were most significant in the case of the first project; by the due date for completion at the end of 1974, only about 20% of the project had been carried out. In the case of the second project, about 70% had been carried out by the anticipated completion date. - 12 - The First Project 3.03 The figures in Table 2-A indicate a cost overrun of about 37%; however,, the appraisal report for the second project indicates that it included deferred items from the first project amounting to about USS7.0 million in value. Inclusion of this figure indicates that the full cost overrun was about 100%. Once bids were received and the extent of the cost underestimation was known, procurement was reduced to rolling stock, parts and track/workshop equipment; these items had been forecast to cost US$5.4 million, excluding contingencies, but cost the full loan amount of US$8.0 million. The principal reductions in investments were the US$1.2 million planned for buying motive power (13 shunters and three railcars) and the reductions that were made in real terms in the amount of workshop and track equipment and spare parts purchases. While these cost increases were substantial, they were understandable in view of the long delays between appraisal and commencement of bidding and the dramatic worldwide inflation that occurred in this period because of oil price rises. It appears, from the information in the files, that the priorities for reductions in the program were not disputed between ENFE and the Bank, and the appropriate items appear to have been dropped. Analysis of passenger traffic investments in later years has shown low rates of return for the rail car investments, indicating that they were probably of lower priority. Purchase of spare parts for existing locomotives was no doubt more cost-effective than would have been the purchase of new shunters. 3.04 The scope of the "local" component of the first project was also, in effect, reduced in that progress on many items was well behind the appraisal targets at the time the second loan was prepared and appraised. In comparison with the schedules, the achievements were: Track Maintenance and Rehabilitation: Less than 20% of the target was achieved at the scheduled time for completion; however, extensive flooding and resulting damages to the track during 1974 meant that ENFE had focused its efforts on emergency repair and construction not foreseen at appraisal. Furthermore, ENFE had problems in getting the necessary locally procured parts (ties and ballast) for this work, and it was not completed until mid-1978. Rehabilitation of Motive Power: About 50% of the target had been achieved; again, delays in parts delivery were considered to be an adequate explanation for the shortfall, and the targets were achieved in 1976 once these parts became available. Rehabilitation of Rolling Stock: About 80% of the planned rehab- ilitation had been achieved; this represented a significant effort, but, again, parts shortages meant that progress on this work was inhibited, and the target was not reached until 1978. Other Items: The workshop concentration program was well behind schedule, as were implementation of a new car allocation system and achievement of the staff reduction and financial targets agreed at appraisal. - 13 - 3.05 In general, it can be seen that the objectives of the first project were reasonable, but the schedule was ambitious and many of the investment items and performance targets were deferred for the execution of the second project. In this respect, the railways were in the fortunate position that their shortfall in motive power and rolling stock could generally be met by using rented items from the various neighboring railways. The track rehabili- tation objectives appear to have been particularly unrealistic; in fact, the necessary materials, tools, equipment and trained staff to make a full start on this work were ready only in 1975. The Second Project 3.06 Equipment acquisition under the second project proceeded in line with the provisions established at appraisal (Table 2-B). The major change in scope reflected cancellation of US$3.3 million for financing the purchase of six diesel locomotives; inclusion of this item in the loan had been subject to the condition that ENFE and the Government would first attempt to buy such locomotives using suppliers' credits, and this purchase proved possible. In fact, a total of 17 locomotives were purchased from Brazil under a suppliers' credit, substantially more than the six locomotives that the appraisal had included in this time slice (however, the 17 locomotives had been included in the full 1975-1979 investment plan). The Bank accepted this increase, at ENFE's request, in the interests of standardization, but it is not clear that this decision was appropriately timed from an economic point of view since no analysis of this increase in scope was performed. Equipment acquisition was also modified to allow ENFE to purchase eight second-hand passenger cars from Chile instead of the five new coaches included in the appraisal estimate. 3.07 Regarding "local" investment items included in the second project, essentially all have now been completed, although completion was somewhat behind schedule. Features of the achievements are: Track Rehabilitation: After limited progress during the first project, about 240 km were rehabilitated between 1975 and 1978, i.e., an average of 60 km per year, and inspections indicate that the quality of the work is high. While ENFE had problems in procuring ties in the first project, the Bank was able to convince the Government to pay more competitive prices to local suppliers, which resolved the supply problem. Track rehabilitation has continuously been affected by problems with ballast availability, and, while performance has improved, it is still not fully satisfactory. The main area in which the full scope of the rehabilitation has not yet been achieved is in bridges - of the 36 bridges (with 112 spans) which were pur- chased to replace existing ones on the Uyuni-Ollague line, 21 (with 50 spans) are in place. The delay was caused mainly by exceptional weather, which allowed only for very short working periods, and by the extremely difficult working conditions in some locations; ENFE is continuing with the program at the Bank's urging and hopes to have the remaining bridges installed by the end of this year. Rehabilitation of Motive Power was completed as foreseen although there were some delays because of parts problems and because increased emphasis was put on the repair of steam locomotives following delays in procurement of - 14 - new diesel locomotives. An example of ENFE's commitment to the rehabilitation program was its insistence on fully repairing a diesel locomotive which had been badly damaged in an accident and was fully compensated for by insurance payments. Rehabilitation of Rolling Stock: ENFE had achieved over 85% of the targets by the end of 1976 and completed this work by the end of 1977. This achievement reflected a great effort in view of delays in parts avail- ability and interruptions because of priority assignments to motive power rehabilitation. Workshop Consolidation and Improvements: This work has taken much more time than was foreseen and is only now being completed; however, the work being carried out by the workshops is of a very high standard. Procurement 3.08 Procurement under Credit 346-BO proceeded slowly because of ENFE's lack of familiarity with the Bank's international competitive bidding (ICB) procedures and the difficulty of reconciling such procedures with those of the Government's Junta Nacional de Almonedas. Procurement was made even more difficult because the procurement program had to be reduced substantially once the bids were received; thus, the loan was not fully disbursed until mid-1977, two years behind its mid-1975 date scheduled at appraisal. For Loan 1121-BO, ENFE started preparing its procurement program well ahead of loan effectiveness so that, once the loan became effective, it was able to place the bulk of its orders in a very short time and at prices very close to the appraisal estimates; as a result, most of the procurement proceeded ahead of schedule, and the contingency funds were available for purchase of additional items. These funds were generally used to purchase equipment, which, in the opinion of the Bank and ENFE, was the most important need. All procurement was done in accordance with Bank guidelines and, except for a combined total of US$3.0 million used for spare parts, was done under ICB. Consultants' Performance 3.09 The consulting firm has had an extensive involvement with the Bolivian railways; it started with a brief assignment in 1962 and then provided continuous assistance from 1971 to 1979. During the period, its contribution to the dramatic improvement in the operating performance of the railway was very substantial. Particular features of this were: (a) the extensive and detailed action program which was prepared as a blueprint for the improvement of the railways. This program covered management, operation, technical, commercial, financial and investment issues; it was discussed extensively with the Bank and the railways and then applied. While achievements in many areas have not fully met the targets, the original plan and its various revisions are believed to have provided an excellent planning basis; - 15 - (b) the fact that the consultants provided consulting expertise at all levels ranging from railway engineers to foremen, monitors and other field experts who were fully familiar with the detailed day-to-day problems associated with the various aspects of railway operations; and (c) the high degree of familiarity with Spanish, the frequent and timely reporting on achievements in Spanish and English, the generally good relationship between the consultants and the railways and the strong commitment of the consultants to improving the railways. 3.10 The preceding factors contributed to the success of SOFRERAIL's efforts; however, the Borrower still had questions about the cost of the overall performance. As is normal, the high unit prices led to some resentment on the part of the Borrower concerning the value of such services. The mission has concluded, in retrospect, that the program in the first two loans was appropriate; it amounted to some 5% of total investment and 2% of annual operating costs. The main area in which more should have been achieved was track rehabilitation. The consultants felt that additional manpower should have been scheduled for technical assistance for this work, but ENFE's management resisted because it would have involved additional cost and because the management wished to minimize the amount of technical assistance. More should also have been done on accounting improvements; while significant progress was made, it did not match the performance in the more technical areas. IV. TRAFFIC AND OPERATIONS Traffic 4.01 For the appraisal of the first project, total traffic in unit-km was forecast to increase by 27% during the six-year period between 1971 (the year prior to project preparation) and 1977 (the horizon year from analysis). In actual fact, total traffic in unit-km increased during this period by 58%, i.e., an annual average of over 6.5%. Each element of the traffic forecast exceeded the appraisal estimates; passenger traffic was above the forecast in the west (2%) and the east (88%); likewise, cargo traffic exceeded the forecast in the west (10%) and the east (69%). A comparison of the appraisal estimates with actual results is shown in Tables 3 and 4B. 4.02 In terms of total units carried, the appraisal estimates were reasonably accurate, although a little high; total passengers carried were less than 1% below the forecast, and total freight-tonnage was 11% below the forecast; the rapid growth in ton-km was caused by the large increase in average haul. This increase was evident in both regions and traffic groups; the average haul for freight increased from 310 km to 492 km, and the average haul for passengers increased from 237 km to 307 km (Tables 4A and 4B). - 16 - 4.03 The appraisal forecast reflected the general assumption that the economy would grow at a 5.5% annual rate during this period; actual economic growth averaged over 6%, which partly explains the higher growth in traffic. The general increase in average haul appears to reflect the railways' increas- ingly important role in handling longer haul external trade, while losing part of their share of the shorter haul domestic traffic. It is for this latter traffic that ENFE has experienced substantial competition from truckers. 4.04 The last year for which actual traffic data were available for appraisal of the Second Rail Project was 1973. Total traffic during the 1973-1978 period was forecast to grow by 36%, but actually grew by 59%. Passenger traffic was marginally (10%) higher than forecast because of growth in the Eastern Region, but most of the growth arose from increases in freight traffic in both regions; by 1977, this was 8% above the appraisal estimates in the Western Region and 70% above the appraisal estimates in the Eastern Region. Again, the principal reason for the growth in the Western Region lay with increases in the average haul as a result of further growth in export/ import traffic. 4.05 In general, traffic has consistently been well above appraisal projections on a unit-km basis; even in 1975, following an 80% increase in freight tariffs, traffic increased by over 10% in tons and 20% in ton-km. Traffic, in tons, has increased only by about 6% since 1970. What has happened is that international traffic increased rapidly, from under 50% of total traffic in 1970 to 80% of total traffic in 1978, and local traffic declined correspondingly. Average hauls for international traffic have been over 500 km, while average hauls for local traffic were below 300 km. This change in ENFE's user characteristics was assisted by the fundamental tariff readjustment that occurred in the course of the preparation of the first project. In this adjustment, a cost-based tariff system was introduced in place of the previous system, which was on an ad valorem basis and thus would not, presumably, have reinforced the railways' competitive advantage on the long routes. Operations 4.06 Selected operating statistics for ENFE during the 1971-1978 period are given in Table 4. It can be seen that the operational performance of ENFE was poor until 1975 because of delays in the rehabilitation of diesel locomotives, which adversely affected productivity indicators. The efficiency of diesel motive power declined to its lowest point since 1968 in October 1973, when the availability was 44% in the Western Region. Freight car availability reached its lowest point (75% for the Western Region and 42% for the Eastern Region) in 1974. The Eastern Region was able to compensate for the shortage of motive power by renting locomotives from Brazil and Argentina. An average of six rented locomotives were in operation in the Eastern Region between 1973 and 1977, and both regions rented freight cars from neighboring railways. Rented cars carried over 70% of the ton-km in 1974, and the cost was over US$1.0 million, but, with the delivery of the new cars purchased under the first loan, the cost of rentals decreased to US$400,000 in 1975 in spite of the increase in traffic volumes. - 17 - 4.07 Because of the substantial traffic increases that occurred during the execution of the two projects, there was a significant improvement in overall traffic density in the period; passenger traffic increased from 81,000 to 116,000 pass-km per km, and freight traffic from 104,000 to 172,000 ton-km per km. This increase in utilization is also reflected in traffic units per employee, which nearly doubled from 86,000 to 164,000; freight ton-km per car in service (230,000 to 340,000) and net load per train (143 to 224 tons). 4.08 The focus of the operating improvements introduced in the first project was on maintenance procedures, workshop activities and organization of spare parts. Improvements were also scheduled to be made in train operations as a result of the introduction of a new car allocation system and the opening of a new train control office, but the flooding problems and the cancellation of the telecommunications component of the loan made these improvements impossible. Train operations improvements then became a major objective of the second loan, and day-to-day operations did improve considerably as a result of the implementation of new schedules for both the Western System (in late 1975) and the Eastern System (in 1977). In order to achieve the targets, train control offices were opened in each region, a proper car allocation and control system was introduced and the marshaling yards were reorganized. 4.09 Encouraging results started emerging from the second half of 1976 onward, and a comparison of 1976 operating results with those of 1973 shows evidence of dramatic improvements such as the following: - Diesel locomotive availability increased from 51% to 82%; - Wagon availability increased from less than 60% to 86%; and - Passenger coach availability increased from 45% to 64%. 4.10 The operations of the whole railway are now based on a formal schedule which is revised periodically and which is executed and controlled by two command posts located at Oruro and Guaracachi. The post at Oruro controls about 360 trains per week and, using the new telecommunications equipment purchased under Loan 1121-BO, maintains a good control of, and accurate timely data on, the trains running in the Western Region. 4.11 With the improvement of rolling stock and motive power achieved under the two projects, in-line failures (breakdowns) have been greatly reduced, and adherence to time schedules has improved. For instance, in August of 1979, the average delay per train was only 38 minutes. Speed has increased on major sections: between Oruro and La Paz, schedules for passenger trains have been reduced from five hours to four hours, and, for freight trains, from over six hours to five hours. Times will be improved even more as ENFE further speeds up the trains in line with new rates that are possible on rehabilitated sections. - 18 - V. FINANCIAL PERFORMANCE 5.01 ENFE-s financial performance improved substantially during the execution of the two projects; during the first loan (1972-1975), the financial performance did not meet the appraisal targets, whereas, during the second loan, performance exceeded the targets; the railways were, in fact, profitable during this period (Table 5). A comparison of the relevant actual and forecast working and operating ratios shows the difference clearly. 1973 1974 1975 1976 1977 1978 Working Ratio Forecast 101 97 85 85 82 79 Actual 123 121 82 82 72 87 Operating Ratio Forecast 116 112 95 95 95 94 Actual 143 135 99 99 88 104 5.02 The poor performance in the early years occurred because tariffs failed to keep pace with local inflation. A new tariff system with higher unit revenues was introduced in 1972, and the total revenues of $b 288 million during 1974 were 100% more than revenues in 1971 and 67% more than the appraisal forecast for 1974; however, this improvement was overshadowed by operating cost increases. Total working costs increased by over 100% during the 1971-1974 period because of increases in all items. The figures described refer to current pesos. Total costs declined in real terms during the period since cumulative inflation was about 128%, and unit costs in real terms declined even more dramatically. It is, therefore, clear that the reason for the deterioration in financial ratios was the substantial reduction in tariffs in real terms; average revenue in constant currency declined from .30 pesos/ ton-km in 1971 to .25 pesos/ton-km in 1974. 5.03 In 1975, following the appraisal of the Second Project but before loan presentation, tariffs were increased substantially (by about 70%) and the financial position of the railways immediately improved. Because of this tariff increase and continuing increases in traffic, revenues in 1975 increased by nearly 100% over 1974 while costs increased by 29% (slightly more than the 21% growth in unit traffic). By 1978, revenues had increased by a further 33% and were 38% above the appraisal forecast figures; working costs during the same period increased by 46% and were 52% above the appraisal estimates. The appraisal forecasts were prepared on a constant (1974) peso basis, and, if the revenue and cost figures were adjusted to reflect the 34% cumulative inflation during the period, the actual results were very close to the estimates. 5.04 During the period in which the two projects were executed, freight revenues on unit bases increased by 270% from $b 0.30 per ton-km to $b 1.10 per ton-km and passenger revenues 100% from $b 0.10 per pass-km to $b 0.20 per pass-km; inflation during the period was 205%. Unit costs were not available - 19 - on a distributed basis in 1971; average costs, excluding depreciation at that time, were $b 0.26 per unit-km, and these increased 150% (less than inflation) to $b 0.66 per unit in 1978. In fact, unit costs in real terms decreased by 18% during the execution of the two projects; these cost decreases were absorbed by the railways in assisting them to become profitable and were not passed on to users. 5.05 Detailed costing analysis by commodity, by line and by service was introduced by the consultants during the second project. The methodology used is fully acceptable to the Bank and clearly shows ENFE's dependence on freight for its profitability. This analysis indicates that, in 1978, average freight revenues covered full costs of the service, including deprecia- tion and most financial charges on a replacement cost basis, and were more than double long run marginal costs, including depreciation on this basis. Passenger charges were, on average, 35% of the full cost of this service and 75% of the long run marginal cost of the service (excluding depreciation). In general, this situation reflects the fact that the Bank's pressure for tariff increases necessary to meet the financial targets has been met through freight tariff increases, and the Government has generally been reluctant to raise passenger charges because of the "social" role of the railways. The average tariff for freight traffic in 1978 was over five cents per ton-km, a figure which is very high in comparison with that for other countries in the region, but ENFE has been able to charge these rates because of the limited competition on many of its routes. Balance Sheet 5.06 ENFE's financial position generally strengthened during the period (Table 6). While the profits earned in the later years were not large in terms of percent return on assets, they were sufficient to enable the institu- tion to strengthen its current asset position substantially; thus, the current ratio increased from 1.58 in 1971 to 3.1 in 1977 and then declined to 1.9 in 1978. This increase in current assets reflected increases in cash holdings and a 400% increase in inventories of parts; these items helped the railways to operate more effectively on a day-to-day basis. 5.07 Total assets increased about twofold in the 1971-1978 period, primarily because of asset revaluation which was required under the covenants of the Loan Agreement for 1121-BO. The revaluation, not completed until 1978, served to present the financial data in a more relevant manner and to develop depreciation schedules which were more accurate and usable for calculating operating costs. These depreciation figures are not, however, used for the costing analysis, which is based on replacement cost data. Project Financing 5.08 The financing of the two projects is summarized in Table 7, which indicates that the differences between anticipated and actual financing were relatively minor. Because of the fact that the projects really reflect time slice components of the investment plan and the fact that the timing of execution of project elements did not occur as scheduled, care should be taken in interpreting the results. - 20 - 5.09 For instance, the total foreign currency component of the first project shows an increase from US$7.9 million to US$9.0 million. Actually, the real cost increase was much more, but, in order to live within the con- straints of the financing available, project items were canceled. About US$7.0 million was included in the second project to cover the items discarded from the first project (para 3.03). Financial Covenants 5.10 The first loan included traditional financial covenants in the project agreement covering record-keeping, annual audits, financial targets, annual budget review, creation of a special funds account for the project and debt limitation. In summary, performance against these covenants was as follows: (a) Record-Keeping and Accounts (Sections 4.01 and 4.07 of the Project Agreement). ENFE consistently worked to improve the quality and timeliness of its financial reporting, but progress has been slow and accounts are still not fully reconcilable or consistent, and problems continue with consolidated accounts from the previously separated railway systems, even with the further efforts made under the third project. (b) Annual Audits (Section 4.02). Audits have been carried out by the official Government auditors, the Controlleria General de la Republica. These audit reports have continued to be provided behind the six-month schedule stipulated in the Loan Agreement, but the scope and pro- cedures have been satisfactory to the Bank. The Bank has pressed for improvements in timing, but has recognized that, until ENFE's book- keeping is speeded up, there is no point in insisting on more rapid auditing. (c) Passenger Traffic Tariffs (Section 4.03). ENFE was required to carry out a study of passenger traffic with a view to revising these tariffs by June 30, 1973. Some analysis of this issue was performed with the help of the consultants, and tariffs were increased by 10% in 1973 and further increased in 1976 and 1977; however, the increases have been small, and tariffs cover only 75% of marginal costs. The Bank has continued to press for tariff increases, and it is expected that the National Transport Survey currently being executed will make firm recommendations in conjunc- tion with an assessment of bus tariffs. (d) Financial Ratio Targets (Section 4.04). This section of the Loan Agreement specified 1977 targets for the working and operating ratios; in actual fact, these targets were met in 1977, but these data were not-really directly applicable to the execution of the first project, which occurred prior to this date; specific targets on - 21 - a year-by-year basis should have been written into the text of this covenant, so that progress could be reviewed with the Government officials on a regular basis. (e) Annual Budget Review (Section 4.05). The budget for ENFE was provided to, and reviewed by, the Bank each year. In view of the delays in the preparation of financial reports and the need to formalize the introduction of an annual budget system, this require- ment proved useful. (f) Debt Limitation (Section 4.07). This covenant restricted ENFE from borrowing long term funds without prior Bank approval unless net cash revenue exceeded 1.25 times maximum future annual debt service. In fact, ENFE was not forecast to earn any net cash from operations during the early years and, as a result, was totally restricted from long-term borrowing without Bank approval. While this may have been the implicit objective of the covenant, it should be recognized that, unless short-term borrowing is also restricted, ENFE would still be capable of getting into financial difficulties. This did not occur because the Government financed ENFE's deficit during these years. 5.11 The financial covenants included in the second loan agreement were essentially the same as those included in the first project, except that annual financial targets were stipulated (and essentially achieved through 1978), and the borrower was required to revalue assets on a regular basis (Section 5.04). The required revaluation was carried out. VI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT 6.01 During the execution of the two projects, the railways have been strengthened considerably and the improvements in general staff performance have been substantial. Some technical problems continue, especially in the area of track rehabilitation, but the law establishing ENFE as an autonomous enterprise was passed only in 1970, and, at that time, 100 of ENFE's senior staff were retired, the basic salary structure was a chaotic mix of salary systems from the various previous institutions, operations were uncoordinated, tariffs were inappropriate and planning was non-existent. Thus, the fact that it was, by the end of 1978, a relatively efficient coordinated and self- sufficient institution satisfying a clearly defined and important role in the handling of Bolivian trade is considered to be a substantial achievement and a credit, primarily to the staff who have worked for the railways during the period. 6.02 The focus in the first project was to give ENFE a sound basis upon which to work; thus, under the guidance of the consultants, key departments were established, tariffs were revised, data systems were introduced, personnel were trained and objectives were explicitly defined. The departments created covered planning, commercial policy and track rehabilitation and, in addition, appointments were made to key operating positions so that important responsi- bilities would be more clearly defined. The training that was carried out - 22 - centered first on training of individuals to establish a training school, and then on training operators for running trains, repairing locomotives and improving permanent way. In addition, a salary study was carried out to resolve the inequitable previous salary situation and to establish a basis for a unified institution. Redimensioning of the railways was not a major issue, but some minor line closures were carried out under the first project. 6.03 In the second loan, the focus continued on the above items; a more detailed study was made of ENFE's longer term staff needs, and the findings were used to agree on new staff targets which were higher than those specified under the first loan. Furthermore, the Planning Unit was considerably strength- ened so that it could provide needed direction in the areas of (a) policy formulation, (b) general planning through traffic monitoring and forecasting, and (c) establishment of satisfactory costing analyses. This aspect of the institutional strengthening is considered to have been very successful because young, energetic staff were hired and trained and this unit now provides the vital operational and commerical data needed to monitor ENFE. The attempts to improve the financial procedures were, however, less successful; not enough effort was put into this aspect, and financial information continues to be a problem. ENFE's management is continually being encouraged to improve this situation. 6.04 The amount of training performed increased substantially during the execution of the second project; some 1,900 people were trained in the 1976-1978 period in all aspects of railway operations. Most of this training consisted of limited, one-month courses in Bolivia, but additional training took place in Mexico, France and the United States. It is felt that the training component was very successful: it was carefully prepared by experts who were completely familiar with ENFE, and it has been wide-ranging in its coverage. However, a detailed review of the achievements of the training program is being carried out in a separate study by OED, which should provide more guidance on the issue. 6.05 Original staff reduction targets included in the first loan agree- ments were not met; these targets required reducing the staff from 6,200 to 5,500 by 1975. They were revised in 1975, and the revised targets, which required reductions to 6,000 by 1978, were achieved by the middle of that year. It is interesting to note that the tremendous (400%) traffic growth (ton-km) in the Eastern Region occurred with a 10% increase in staff, and, in fact, traffic units per employee are 250,000 in comparison with 130,000 in the Western Region, partly reflecting the simpler network in that region. VII. ECONOMIC REEVALUATION 7.01 The Planning Unit of ENFE, with the help of a consultant from SOFRERAIL, prepared a retrospective economic analysis of the investment programs utilizing funds of the First and Second Railway Projects. The economic analysis as prepared by ENFE follows normal Bank practices. - 23 - 7.02 The economic reevaluation is based on measuring the costs to the economy in the event that the investment programs had not been implemented. The main benefits related to the investment programs are the avoidance of (a) higher transport costs for traffic that would remain on the railroad; (b) higher costs of transporting by road the freight and passenger traffic diverted from railroads; and (c) lost traffic, where no alternate roads exit. Since the individual components of the integrated investment programs were closely interrelated, full benefits could be realized only if the whole investment program was carried out. 7.03 ENFE's analysis of the First Railway Project indicates an estimated overall rate of return (ROR) of 25%, whereas the appraisal report expected an overall ROR of 21%. ENFE's analysis of the Second Railway Project shows an estimated overall ROR of 19%, with an ROR of 21% on the Western System and an ROR of 15% on the Eastern System. The overall ROR in the appraisal report is 24%, with an ROR of 21% on the Western System and an ROR of 28% on the Eastern System. The appraisal report analyses are not presented in the same detail and, therefore, do not allow direct comparison. 7.04 The economic analysis performed for both appraisal reports did not focus on rates of return for individual components in the program but rather on the project as a whole. While there are definite interrelationships among the components, it is felt that discrete rates of return for the major items could be, and should have been, determined. This feature was improved for the second project, which showed a separation of the analysis between the two regions. It does not appear that not having the detailed analysis has adversely affected the appropriateness of the program, but it has reduced the detail to which this completion report could reevaluate the economic justifica- tion, especially in the case of the cancellation decisions that were made. For example, it is evident that a special feature of ENFE is its potential to supplement its stock of motive power, freight cars and even workshop facili- ties, using those of the neighboring networks. It is this fact which has allowed operating improvements to take place even with the project procurement delays and which has allowed the railways to cope with the high traffic volumes; however, the economic analysis did not attempt to evaluate the comparative advantages of renting versus buying equipment. It does appear that there have been large operating savings to ENFE from reducing equipment rentals (para 4.06) and that these savings could have been analyzed more carefully at appraisal. VIII. THE ROLE OF THE BANK 8.01 This section concentrates on the overall role of the Bank throughout its association with the railways and, in effect, covers a more extended period than that covered by the two projects, i.e., it includes the earlier association with the railways during the period in which the Bank executed the UNDP-financed technical assistance. - 24 - Project Justification and Objectives 8.02 The Bank's decision to provide financial support for the rehabilita- tion of the railways appears to have been very sound. It is interesting to note that the decision was made in spite of a negative assessment of the potential of the railways by the consultants who performed the Bank-executed National Transport Survey in 1968. The Bank's decision to support the rehab- ilitation reflects a conviction that the railways' basic role as the major carrier of international trade was too important to allow further deterio- ration to take place, and that substantial economic benefits could be achieved through investing in the railways. In the ten years since the association commenced, that role has become even more clearly defined; while local traffic handled by the railways has declined, international traffic has increased dramatically. This traffic is handled more efficiently and at lower real unit costs than before the projects commenced. 8.0.3 It seems that the Bank's interpretation of the Borrower's priorities and problems was well founded, primarily as a direct result of an extensive analysis of the needs of the railways made prior to the first loan. The basic actions necessary to enable the railways to start on a rehabilitation program were taken prior to making the first loan. The Bank's strategy of clearly defining the overall objectives of the projects in terms of specific action plans is felt to have been the best way of tackling this complex task, even though many of the specific targets had to be revised during project execution. In fact, an important corollary of this approach is the need for flexibility during supervision in the monitoring of progress on these targets. As circumstances change, so should the targets. Project Content and Scheduling 8.04 In retrospect, the overall content and the loan conditions of the two projects seem to have been appropriate, although the implementation schedule was overly ambitious, and, more significantly, the achievability of the local component was overestimated. The original target actions for the local component were not achieved until 1978, four years later than the original schedule and well after the completion of the procurement of the Bank- financed items and the expiration of the consultant contract. 8.05 The small size of the initial loan appears to indicate that the Bank was very tentative about its involvement with the institution. It appears that very little would have been achieved, even if the procurement program for this loan had not been reduced because of cost increases, because the project included considerably fewer than the items necessary for full rehabilita- tion. On the other hand, reserving the major loan for the second phase of the "project," when Government commitments to tariff increases and funds provisions could be ensured after the trial period of the first project, appears to have been useful in the successful implementation of the overall program. Project Implementation and Outcomes 8.06 The frequency of Bank supervision seems to have been adequate, and the quality of the work seems to have been high in that many detailed recommendations for actions needed to be taken were made. The main area in which supervision was - 25 - inadequate was track rehabilitation, wherein progress was slow, especially in the First Project, for which a detailed program for track rehabilitation was not specified clearly. The work program showed only the total km of track to be rehabilitated and maintained; the actual location was not specified. Track performance indicators were not available, which created difficulties in monitoring the track work. Corrective measures were taken in the Second Project, ENFE had better indicators to supervise progress in the track work and achievements were more satisfactory. 8.07 The relationship between the Bank and the Borrower has been excellent, and the Bank appears to have been successful in minimizing the extent and frequency of changes in key management personnel. 8.08 In neither project was any attempt made to address major issues relating to the transport sector (para 2.09). Because of the fact that the railway sector is relatively free from competition for traffic volumes on some major routes, it has been possible to successfully implement the project without addressing intermodal problems. However, this approach has meant that the appropriateness of the railways' role as a major passenger carrier has remained unresolved until now. Neither project included significant amounts of investments for passengers, but this is probably the main area in which the Government and the Bank appear to differ in their sense of priorities; the Bank has been cautious about expanding the role of the railways in carrying passengers. The Transport Survey being executed under the Third Railway Project should provide needed guidance on this issue. IX. CONCLUSIONS 9.01 Rehabilitation of the railways is not yet complete (the Third Railway Project continues this effort), but the two subject projects, in combination, have been very successful in terms of: - achieving economic benefits; - initiating major institutional strengthening and reform; - improving the efficiency of the major transport mode for Bolivian international trade; and - reducing a major drain on public funds. 9.02 The main reasons for the projects success seem to have been: - the extensive effort put into project preparation and supervision; - the clearly defined and fairly limited expectations of annual achievements; - the railways ability to rent equipment when needed; and - the financial independence of the railways. - 26 - 9.03 A special factor in these projects has been the profitability of the railways, which has allowed them to operate without the day-to-day funds problems of most railways. ENFE's special competitive situation (truck competition is limited to some of the major routes) has made it possible to maintain tariffs which allow for profitable operations in spite of losses on passenger services. 9.04 The evidence of the success of the projects took some time to become apparent; in fact, the first project made only limited achievements. The Bank's conviction that better performance would develop if the second loan were made, action plan targets adjusted and a longer horizon used for assess- ment of the success of the association was entirely correct. Recommendations 9.05 A more rigorous economic analysis should have been carried out so that the benefits of the individual project elements could have been defined; the appraisal indicated that this was not possible, but it is now felt that it was possible and would have provided useful guidance during supervision as the scope of the project was adjusted. 9.06 The use of action plan targets for improvements in key indicators relating to operations and management of the borrower is a very important aspect of this type of project. These targets should be monitored closely and regularly during supervision and should be adjusted periodically, as circumstances change, so that they continually provide appropriate and realistic goals for the institution. PROJECT COMPLETION REPORT BOLIVIA: FIRST AND SECOND RAILWAY PROJECTS (CREDIT 346-BO & LOAN 1121-BO) Actual and Expected Physical Completion % Original Works Quantity Completion Date Completed by Loan Unit Actual Expected Actual Expected Expected Date 1. Extend the track-maintenance scheme to the whole system 346-BO km 1976 1974 0% 2. Rehabilitation of track Oruro-El Alto 346-B0 km 99.3 100 1978 1974 0% 1121-BO km 70.9 95 1978 1976 75% 3. Rehabilitation of track Sta. Cruz-Corumba 1121-B0 km 68 68 1977 1976 20% 4. Rehabilitation of Motive Power Diesel locomotives in operation 346-BC loco-units 24 24 1975 1974 40% Ferrobuses 10 10 1976 1974 25% 5. Rehabilitation of Freight Cars 346-B0 cars 1020 1020 1978 1976 80% 1121-B0 6. Rehabilitation of Passenger Cars 346-BC 1121-BO cars 57 48 1977 1974 60% 7. Complete Workshop at Viacha 346-B0 80% 100% 1978 1976 70% 1121-B0 8. Complete Workshop at Uyuni 346-BC 112-BC90% 100% 1976 1976 90% 1121-B0 9. Rebuild bridges on 346-BC Uyuni-Ollague Line 1121-B1 Source: ENFE April 1980 PROJECT COMPLETION REPORT FIRST RAILWAY PROJECT (CREDIT 346-BO) Actual and Appraisal Estimates of Project Costs ACTUAL COST APPRAISAL ESTIMATE OF COST Actual Cost as a Local Foreign Total Local Foreign Total Proportion of Major Works Country Currency US$ Country Currency US$ Appraisal Estimate on Components Currency US$ Equivalent Currency US$ Equivalent of Cost (%) (1) (2) Ways and Works 123.2 2.4 8.6 32.7 1.8 4.5 191% Motive Power - Cancelled - - 1.3 1.3 0% Rolling Stock - 3.0 3.0 - 2.6 2.6 115% Locomotive and Car Rehabilitation - 2.0 2.0 - 0.9 0.9 122% 00 Workshops 13.1 0.6 1.3 9.8 0.5 1.3 100% Technical Assistance 2.0 1.0 1.1 1.4 0.8 0.9 122% Total 138.3 9.0 15.9 43.9 7.9 11.6 137% Notes:- The rate of exchange at appraisal was $bl2 = US$1, actual rate was $b20 - US$1 - Physical items were reduced in case of all categories except tehcnical assistance and rolling stock and, as a result, US$7 million in value was included in the second project (para 3.03). April 1980 PROJECT COMPLETION REPORT SECOND RAILWAY PROJECT (LOAN 1121-BO) Actual and Appraisal Estimates of Project Costs ACTUAL COST APPRAISAL ESTIMATE OF COST Actual Cost as a Local Foreign Total Local Foreign Total Proportion of Major Works Country Currency US$ Country Currency US$ Appraisal Estimate on Components Currency US$ Equivalent Currency US$ Equivalent of Cost (%) (1) (2) (1) t (2) x 100 Ways and Works Telecommunications 268.0 10.6 23.6 150.1 10.9 18.3 129% Rolling Stock 0 9.2 9.2 - 10.0 10.0 92% Motive Power l/ 0 10.2 10.2 4.9 4.9 208% Rehabilitation of Rolling Stock and Motive Power 10.5 4.4 5.0 15.8 3.5 4.3 116% Station Installation - Cancelled - 0.3 0.2 0.2 0% Workshops 6.0 1.7 2.0 9.1 1.8 2.2 90% Technical Assistance 2.3 1.0 1.1 4.5 0.9 1.1 100% Total 286.8 37.1 51.1 180.0 32.0 41.0 125% 1/ Wnen ENFE was able to acquire the Diesel Electric Locomotives under a suppliers credit, this category was cancelled, and the total loan was reduced from US$32 million to US$28.7 million. The amount spent (US$10.2 million) was considerably more than the US$4.9 million allowed for at appraisal, but reflected the purchase of additional locomotives. The rate of exchange was $b 20 = US$1 飞n la〕｝c3 一………＼汗……… 一………；｝…｛………一… 、。一一一……… { …，…………一…………………………，一…………………、： ;’………、…／……………………；“……………／…、………，…………… - 31 - T.ble 4-A PROJECT COMPLETION REPORT BOLIVIA: FIRST M SECOND RAILWAY PROJECTS (CREDIT 346-BO AND LOAN 1121-80) Selected Operating StatLsties 1971 1972 1973 1974 Uýit w E TOTAL w E TOTAL W E TOTAL w TOTAL 1. SYSTEM Rente ký 2,084 1,182 3,266 2,084 1,182 3,266 2,084 1,182 3,266 2,ý84 1,182 ff. TRkFFIC Pass,nger carried 000 914 224 1,138 887 243 1,130 {369 2SC 1,149 681 276 qý7 k. 210 59 269 194 66 26ý 181 d7 26ý lý9 99 246 Average Jo,rney ko 231) 263 237 219 276 230 210 312 23ý 219 35ý 2" Preighi .ýt .rriýd - Rý,V, 000 906 216 1,121 749 222 971 735 22n 955 724 2ý3 1,o18 Freight bet lon km - Rýven,e carn'ýng 000 161 86 347 245 Ill 356 25() liý, 3b5 ?31 196 388 A,.,age ha,1 k. 188 398 309 327 500 367 340 52,1 382 319 ýý2 381 Traýtic Units-Total 471 145 616 439 177 616 432 292 634 353 2ýl ý94 111. TRAFFIC DENSITY Passenger-km per R(lute-km 001) 101 50 82 93 56 80 87 74 82 71 84 76 llr.ight t.,,-k. per R..t,-k. 000 125 73 lofi 117 94 109 120 97 112 ill 1,2 lia IV. TRAIN RUN Fr.ýn-k. P..,ýe.zrr 000 Pright 0u0 Total 000 2426.7 602.1 3028.8 2323.5 743.G 3(1" .5 1929.1 "8.8 2817.ý Fl,ý"ht il. Total -l. 706.2 1021.6 697.3 333.1 10ý,).ýý 597.9 ý50.2 9ý8.2 Gr-, 1,.d f tr.in tan Nei load of freight trai, tan V. PRODUCTIVITY OF STOCK Nn.býr f Lor-ntL~a 1. 55 37 92 60 Is 75 bo 15 75 bo ý5 73 of t,.. i. opýr.ti.n 31 22 54 22 9 31 23 9 32 '6 Nomber f Maia IL- dieý,1 1,nc,,mccivý,s 20 5 2ý 20 25 2n 5 25 14 5 2ý Availability 811 60 7b 70 40 64 49 3,0 (10 ýo 55 Maia per 000 159 44 148 132 ,,--.bl,, pýr yt.r f di,aýl 4 4 4 4 4 4 4 4 Nr.b~ f dýý,,1 raýl .rý 10 12 10 2 1, 10 12 10 2 l- 60 58 65 60 57 30 ý9 50 33 ý5 N-býý t p.,ý,,g,r lýo b8 ý98 84 33 117 84 33 117 A,ailability 87 7q 85 4l 38 43 N-b- of -ning £týight r.ts L,359 484 1,643 1,242 465 1,707 L,189 471 1,759 1,124 548 L,672 N.ý.b,ý, of er-c,obý, frt.ght ý.,s 1,091 ý89 1,380 738 '28 966 846 230 1,076 A,ailýbility 80 bo 73 67 75 69 75 42 64 235 298 250 246 39C, 328 p~ year VI. STAFE of irpl.y,.,, 411 3,123 1,334 6,457 5, ý)8 5 1,ý06 6,391 5,094 1,507 6,6()1 5,27'ý 1,683 6,958 Fraffi, -ils p,ý -PI'y- ýOO 92 109 9ý 86 i'ý 5 96 85 134 46 bl, 143 813 11 ý,, ý = W, st,ýn 1: = E~t~, 11 Any blank sp- r, ý,,r,liabi lity f the statiýtical datý . lý., , -, ý . ý,,e r , . r , ý F,gb,ý, in,l.d, d-iný -no-, ad bagg.g, .n,. 1'(,nip,ýrary personn, I ýneL,dvd: 1973 Western R,Rioi, 224: Eýsteýrn R,pi,)n 117. 1974 Western RIg~o 636; F~I~n 30n. PROJUT COMPLTTON REPORT k011V1A FIR 1 AND SFCOD RAILWAY PROØMCTS (TL>1 34T-BO AND LOAN 1121-BO) Selected Operatirg Statistics 107$ 1976 1977 1978 WESTERN EASTERN TOTAL WESTERN EASTERN Tø]AT, WF STRN EASTIRN lOTAL WESTERN LASTERN TOTAL . SYSTEM Roste (km) 2,087 1,182 3,269 2,087 1,286 3,373 2,087 1,286 3,373 2,087 1,386 3,473 11, TRAFFIC Passengers carried (units) 831.959 117,080 1,149,039 427,384 318,571 1,245,955 916,180 372,413 1,288,593 795,207 440,323 1,235,530 Passengers km (0003 189,575 120,039 309,614 240,758 125,993 366,751 246,972 148,793 395,765 224,277 172,916 397,193 Average Journey (k) 228 379 270 260 395 294 270 400 307 282 393 321 Freight Carried (nit tons) 814,782 326,259 1,141,041 691,275 388,812 1,080,087 779,400 398,903 1,178,298 787,421 398,579 1,186,000 (Comnercial Traffic) Ton-km carried (000) 294,176 171,273 465,449 300,361 218,126 518,487 366,902 212,240 579,142 375,619 211,091 586,710 Average haul -km 361 525 408 434 561 480 471 5.31 491 478 530 495 Traffi, Uoits-Total (pas-km + ton-km 483,7;1 291,312 775,063 541,119 344,119 885,288 613,074 ;61,033 974,907 599,896 384,007 983,903 I. TRAFF1IC DENSITY Passenger-km per Roste-km 90,836 101,556 94,712 115,361 97,973 108,731 118,338 115,702 117,333 107,464 124,759 114,366 Freight tom-km per Route-km 140,956 144,911 142,383 143,920 169,616 153,717 175,804 165,039 171,699 179,980 152,302 168,935 15. TRA9N RUN Tain-km - Passenger 378,031 - 378,031 778,555 - 778,55$ 610,581 324,292 934,873 763,935 420,882 1,184,817 - Mixed 270,927 282,401 553,328 243,540 255,459 499,019 228,658 216,813 445,471 216,823 237,553 454,376 - Freight 1,255,927 565,721 553,328 1,495,447 713,104 2,208,551 1,711,048 465,147 2,176,195 1,720,219 502,792 2,223,011 - Total 1,904,243 848,122 2,752,365 2,517,562 968,564 3,486,125 2,550,287 1,006,252 3,555,539 2,700,977 1,161,227 3,862,204 Gross ton-km - Passenger 132,989 - 132,989 180,363 - 180,363 142,055 69,712 211,767 162,741 100,250 262,991 - Mixed 93,556 119,859 213,415 67,286 113,338 180,624 62,260 113,911 176,171 531,874 130,847 182,721 - Freight 539,114 357,047 896,161 606,073 450,819 1,056,892 755,412 191,454 1,146,866 800,584 409,186 1,209,770 - Total 763,659 476,906 1,242,565 853,722 564,1>7 1,417,879 959,727 575,077 1,534,804 1,015,199 640,283 1,655,482 Gross I.ad nf trains-tons - Passenger-tons 352 - 352 232 - 232 233 215 227 213 238 221 - Mixd-tons 145 424 386 276 444 362 272 5 395 239 551 402 - Preight-tns 429 611 492 405 652 479 441 842 527 465 814 544 - Total-tons 40>2 362 451 339 582 4o7 376 572 432 376 551 429 Net lead of freight train-tons 193 202 196 173 225 192 189 311 221 194 286 219 V. PRODI'CTI1VITY OF St0CK Diesel locomotives is fleet (unitsl 24 6 30 24 6 30 27 15 42 43 19 62 - Min line 20 1 21 2l I 21 20 1i 13 36 17 53 -Shnlters 4 5 9 4 5 9 7 2 9 7 2 9 Diesel Locomotivs i operation (units) 18 9 27 19.8 10.2 30.0 24.1 19.1 40.3 17 18 55 - Main line (daily average) 16 3 ]9 17,8 4,0 21.9 20.0 10.3 30.3 29.8 16.3 46.1 - Shntrs (daily average) 2 6 8 2.0 6.1 8.1 4.1 5.9 10.0 7 2 9 Averge available diesel loemotives (units) 12.6 5.9 18.5 15.2 7.5 22.7 16.0 9.8 25.6 20.8, 12.88 33.72 - nin line, 11.2 2.5 13.7 14,.3 3.0 18.0 14.9 7.0 21.9 18.94 12.22 31.16 - Shnters 1,4 1.' 4.8 0.9 3.5 4.8 1.2 2.7 3. 1.9u 0.66 2.56 Availabili to, dise I locomotives (7 70 6b 69 77 71 76 66 60 64 56 72 61 - Nlai line ( 70 83 72 80 89 81 74 69 72 64 7, 68 - Shuntr / > 70 57 60 46 63 39 28 56 38 27 33 28 April 1'.80 PROJECT COMPLETION REPORT B01IVIA: First and Second Railway Prjects (Credi. 346-B0 and Lan 1121-BO) Atnal and Prnjected Revennes and Expeses for 1971-1178, in Million Bolivian Fesos 1971 1972 1/ 1913 1974 1975 2/ 1976 1977 2 1978 A¯i¯ Fa ¯¯n¯¯ÃcS¯la1 Forecast Ac¯usl Freast¯ Acntnal Foecast Atal Forecast Antua1 Forecast Actal Forecast Actual p.engev 27-7 31.2 29.6 31.1 30.2 32.0 41.9 49.6 55.9 53.3 69.3 58.6 77.9 61.0 81.2 Feighe 10.5 111.9 118.6 127.5 150.0 133.0 223.1 412.0 455.6 432.7 478.7 450.8 538.7 471.6 609.6 i g ~n 10 1 7.8 12.3 7.5 13.8 7.5 22.8 14.0 58.4 14.8 55.0 15.7 58.6 16.5 67.0 TMta Oparoting iR-~, 142.3 15.9 160,t0 i6.0 194.0 172.5 287.8 475.6 569.9 50.8 603.0 525.1 675.2 549.1 757.8 2peaig enpt-s: ban 112.9 120,0 118 1 120.0 149.7 120.0 195.7 215.6 235.9 220.8 272.0 227.2 262.8 233.3 364.9 Fnel and bo irrcant 19.3 (9.3 19.7 18.5 19.9 175 32.4 50.0 32.4 60.0 55.0 61.5 50.6 59.0 54.8 Na Fen als 1.6 15 14.6 18,0 15.3 20.2 31.1 35.9 35.8 37.5 69.1 38.8 47.3 39.0 62.1 CM - raetra 2,6 2.5 1.4 1.5 3.1 1.5 1.8 9.7 53.7 9.8 9.9 9.9 28.9 10 0 34.9 Cqnipent Ranal (an) 3.0 5.5 9.5 4.6 7.6 3.0 30.2 25.0 8.2 25.7 33.7 23.8 29.5 21.0 23.4 ip.me R,b-ieud nd - 4.8 LS16.6 - 44.1 43.7 43,2 44.4 43.4 45.6 33.8 46 7 46.5 Losals usid Fo" 5.5 11. 5.5 25 8 5.5 15.2 25.85.5 11. 26.0 32.7 38.5 73.7 Tota ng Cos 1 1865 168.5 179.8 168.1 238.0 167.7 350.5 404.9 452.5 423.7 494 7 432.8 485.6 435.5 660.3 Derrniti- -7.0 240 31.5 24.0 40.4 25.0 40.4 51.8 59.4 54.1 104.7 66.2 108.9 131.5 Nat a Operating Costs 172.8 192.5 1921 27. 192.7 393.9 456.7 502,9 477.8 599.4 499.0 594.5 791.8 ( Operatiag eene (loss) 130.5) (41.6) (51.3) (26.1) (84.4) (20.2) (103.1) 18.9 67.0 23.0 3.6 26.1 80.7 33.6 (34.0) et Non-aperating Reverue (Inne) (0.97 (2.57 1.2 (2.5) 1.4 (2.5) (3.8) (0.1) (0.6) (0.1) 34.5 (0.1) (5.6) (0.1) 8.0 er Revenu/(loss) before interest (31.4) (44.1) (50.1) (28.6) (83.0) (22 7) (106.8) 18.8 66.4 22.9 38.1 26.0 65.1 33.5 28.0 ta lemmar 1 1.>5 4.6 (159) 3.7 6.2 3.0 6.3 15.4 11.4 18.2 24.3 35,2 58.9 73.8 85.0 a n / s) (36.9 (487) (56.0) (32 3) 89.2 (25.7) (113.1) 3.4 55.0 4.7 13.8 (9.2) 6.2 (40.3) (111.0) Sakis 117 117 112 101 123 97 121 85 79 85 82 82 72 79 87 ' -5i'g121 128 132 116 143 112 135 9 88 95 99 95 88 94 104 lie Itnirlrnd- -- - - - 1.2 58 1216 0. .1 0.5 0.31 Ties "nin C arng - 0.1 · 1.7 1.3 1.7 1.1 1.6 - 1.2 0.59 D - - - 7.6 1.9 1.5 1.7 2.3 1.8 1.0 rten an et rixed Asts .( - dnIM-otfon d Gonerl g/4 /A N/A N/A N/A N/A 41.1 56.8 51.5 57.9 58.8 58.2 68.4 59.5 115.2 aint. aTronk, Sagl e Tealae,A 84.2 91.1 104.7 93.2 118.1 96.6 113.0 98.7 189.0 Maint ance et EqnipTenr 54.3 58.1 67.8 58.1 74.1 59.6 69.4 60.1 88.3 TMainencofd CEqnil 53.7 71.8 59.8 71.8 71.6 73.4 85.0 74.3 107.3 Trafi n 40.4 70.0 48.9 80.3 85.1 84.1 84.4 84.2 69.1 Tracin s a 32.7 17.1 76.5 18.0 43.6 15.3 31.6 12.0 44.9 ls eanobsid d -d 44.1 43.7 43.3 44 4 43.4 45.6 33.8 46.7 46.5 TUn S 350.5 404.9 452.5 423.7 494.7 432.8 485.6 435.5 660.3 1/ Penneasts taken from First Railway Project. 2/ Forecasts taken frei Second Railway Project. 3/ Breakdown of working costs nnder new accounting system are shown in the bottom lines from 1974 onwards (Actuals only). 4/ Fo-rcast figures are in constant units, Actual figures in rerent figures. Son: EINFE and 1isson Estimates April 1980 PROJECT COMPLETION REPORT BOLIVIA: FIRST AND SECOND RA1LWAY PROJECTS (CREDIT 346-BO and LOAN 1121-O) Actual and Projected Balance Sheets for 1971-1978, in million Bolivian Pesos 1971 1972 1973 1974 1975 1976 1977 1978 Actual Forecast Actual Forecast Actual Forecast Actual Forecan t Actual Forecast Actual Forecast Actual Forecast Actual ASSETS (Estimated) Fixed Assets: 1/ 2/ Cross Fixed Assets 543 1,700 619 1,700 621 1,710 808 2,451 1,254 2,664 6,542 3,095 7,251 3,527 6,128 Less Accuulated Deprrciltir (24) (904) (56) (893) (94) 843 (136) (1.308) (186) i.a62 (2.40) 1,428 (2,817) (lIO0) (2,9f6) Net Fixed Assets 519 796 563 807 525 867 672 1,143 1,068 1,3D2 4,134 1,667 4,374 2,019 3,142 Work in Progress - 6 7 15 3 23 3 56 3 433 3 4,091 Current Assets: Cash 4 11 11 27 14 28 30 51 30 66 30 15 Sundry Debtors 65 101 122 155 100 247 80 210 so 201 70 260 Stores - Railway 39 42 44 54 75 84 35 120 50 209 45 204 -Pulperia 6 6 3 7 6 4 6 7 6 4 5 4 Total Current Assets 114 108 160 110 180 113 243 155 363 151 388 166 479 150 482 Suspense 19 34 29 14 - - - - - - - Cargos Deferidos (accounts cleared in following year) - Total Assets 657 904 763 917 741 980 944 1,301 1,454 1,456 4,578 ,3 ,8 ,7 ,0 LIABILITIES Current Liabilities: Comecoial 40 78 95 147 90 194 73 181 65 141 57 164 soclal (Mdal, persin, housing) 32 25 19 26 20 35 18 36 16 15 86 :'otal Cureot Liabilities 72 82 103 93 114 96 173 110 229 91 217 61 155 71 250 Long-Torn Debts 80 60 112 65 96 116 221 214 635 320 800 692 1,143 1,059 3,550 Reserves - Social (grotuities) 11 12 16 12 15 12 12 15 7 15 62 15 7 15 228 - Assets Revaluation 489 489 489 3,069 489 2,329 Equity 480 551 571 644 738 684 845 744 919 848 984 1,625 Leass Accommulated Deficits - (59) () --QU (1277 (265) (115) (304) (54) (360) (26) (446) (267) Net Equity 480 750 495 757 480 766 517 569 690 822 Asset Revaluation - - 14 14 14 14 2,809 1,35 3,687 Suspense 5 23 - 22 - 7 - - - Ab.. sLI 1 r9 Total Liabillr tiea 657 904 763 917 741 990 944 1,991 1,44 1454 4.577 1,936 5,287 2,172 Ratios: Current 1.58 1.30 1.55 1.30 1.58 1.31 1.41 1.41 1.60 1.66 1.79 2.05 3.10 2.11 1.9 LIquid 0.96 - 1.09 - 1.17 - 1.10 1.04 1.20 1.21 1.20 1.36 1 70 1.41 1.1 Debt/Equity 14/86 7/93 18/82 8/92 16/84 13/87 29/71 18/82 52/48 24/76 19/81 40/60 23/77 50/50 56/44 1/ For 1971 ENFE had estimated net value of fixed assets and proper valuation was under way. The forecast for 1972 to 1974 were therefore based on the estimated value of fixed assets and accumulated depreciation. 2/ After preliminary revaluation of fixed assets. Source: ENFE and Mission Estimates April 1980 - 3- TABLE 7 PROJECT COMPLETION REPORT BOLIVIA: First and Second Railway Projects (Credit 346-BO and Loan 1121-BO) Actual and Appraisal Expectation of Project Financing First Project Local Currency Foreign Currency Actual Anticipated Actual Anticipated Million Pesos % Million Pesos % Million US$ % Million US$ % Government 122.3 88 34.3 78 0.8 9 - IDA 16 12 9.6 22 7.2 80 7.2 91 UNDP - - - - 1.0 11 0.7 9 TOTAL 138.3 100 43.9 100 9.0 100 7.9 100 Second Project Local Currency Foreign Currency Actual Anticipated Actual Anticipated Million Pesos % Million Pesos % Million US$ % Million US$ % Government 246.8 86 160 89 - - IBRD - - - - 28.7 78 32.0 100 Supplier Credit - - - - 7.7 20 - - ENFE 40 14 20 11 0.7 2 - TOTAL 286.8 100 180.0 100 37.1 100 32.0 100 April 1980 一一－---－一－－一― ;BR望斗妒．、豔：撇輪以lEl:T ／兀 →’＇一：’兀一―l―· &&:,．■l一― 一／-：卜 ：一：一l×一＇一■一’二’〕一：’一■‘1-1:,-F么」：L：』L卜T,/-i■－ 取－一｀、 …一 II ：。＇:：〔：‘一：1&’一‘〕： &&’、．；斗一＿一；- &―由 i·―邑 ,－、一取k’。件于，一―豪 &____________＿二＿_____．很