Uganda - Posts and Telecommunications Rehabilitation Project

Document of The World Bank 1 oO?N ,f FOR OFFICIAL USE ONLY Report No. P-3536-UG REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 20.4 MILLION TO THE REPUBLIC OF UGANDA FOR A POST AND TELECOMMUNICATIONS REHABILITATION PROJECT April 25, 1983 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.  CURRENCY EQUIVALENTS Currency Unit Uganda Shilling (Ugh) US$ 1.00 = USh 107.0 (First Window) US$ 1.00 = USh 240.0 (Second Window) USh 1.00 = US$ 0.009 (First Window) USh 1.00 = US$ 0.004 (Second Window) On August 23, 1982, the Government introduced a dual exchange rate coupled with a 5% devaluation of the official (First Window) exchange rate. The exchange rate in the Second Window is market determined through weekly auction and subject to fluctuations; it has steadily fallen from USh 300 to the Dollar in August 1982 to USh 250 to the Dollar in mid- November 1982 and USh 230 in January 1982. Over the last three months, it has risen slightly again, to USh 250 to the Dollar. Conversions in the Staff Appraisal and President's Report have been made at the First Window rate, which is applicable to all external assistance projects. FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS UPTC = Uganda Posts and Telecommunications Corporation MPPT = Ministry of Power, Posts and Telecommunications VHF = Very High Frequency UHF = Ultra High Frequency  FOR OFFICIAL USE ONLY UGANDA POSTS AND TELECOMMUNICATIONS REHABILITATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Uganda Beneficiary: Uganda Posts and Telecommunications Corporation (UPTC) Amount: SDR 20.4 million (US$22 million equivalent) Terms: Standard Relending Repayment to Government within 15 years, including 3 years Terms: of grace, at 15% interest per annum; UPTC to bear the foreign exchange risk. Commitment Fee: Standard Project: The Project represents an essential part of UPTC's rehabi- litation and investment program for the period 1982-87. It would address the most urgent sector needs. It would en- sure the flow of foreign exchange needed to prevent further deterioration of telecommunications services, rehabilitate telecommunications capacity back to about pre-war levels, allow the utilization of some idle capacity existing in the system, and attain acceptable standards of postal service. It would also place the initial building blocks of institu- tional development - sector legislation, accounting and financial control, and comprehensive training. The Project has three main components, namely rehabilitation of tele- communications, postal and common services, technical assistance, and two years' worth of imported spare parts and materials. Risks: The main uncertainties associated with the Project relate to possible delays in implementation. However, sensitivity analyses show that even a two-year delay in all benefits with no postponement of costs (a very unlikely combination) would still leave the project economically viable. A second main risk facing the project is the unstable secu- rity situation in Uganda. But security has already im- proved considerably over the last year and is expected to improve further, especially as the economy recovers. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Local Foreign Total Costs: -----(US$ million)----- Telecommunications Rehabilitation 2.2 9.8 12.0 Postal Rehabilitation 0.2 0.9 1.1 Common Services Rehabilitation 0.3 1.3 1.6 Training 0.2 2.4 2.6 Technical Assistance - 2.8 2.8 Recurrent Purchases 0.5 1.8 2.3 Total Base Cost 3.4 a/ 19.0 22.4 Price Contingencies 0.6 3.0 3.6 Total Project Cost 4.0 22.0 26.0 a/ Including US$0.9 million of taxes and duties. Financing Local Foreign Total Plan: --=-(US$ million)