Romania - Land Transport Project

Document of The World Bank FOR OMCIAL USE ONLY IIICROFICHE COPY Report No. 10301-RO Type: (PCR) ReprtNo. 10301 WATKINS, H/ X31708 / T-9102/ OEDD3 PROJECT COMPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RO) FEBRUARY 4, 1992 Infrastructure Operations Division Country Department I Europe and Central Asia Regional Office Tis document has a restsicted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without World Bank autorization.  CURRENCY EQUIVALENTS Currency Unit - Leu, Lel (plural) Lei 18.0 - US$1.00 up to December 31, 1980 Lei 15.0 m US$1.00 from January 1, 1981 Lei 16.5 - US$1.00 from January 1, 1983 Lei 17.5 - US$1.00 from June 30, 1983 Lei 21.5 US$1.00 from January 1, 1984 Lei 17.5 = US$1.00 from November 1, 1984 Lei 16.0 = US$1.00 after July 1, 1986 WEIGHTS AND MEASURES Metric System British/US System 1 meter (m) - 3.2808 feet (ft) 1 kilometer (km) - 0.6324 mile (mi) 1 square kilometer (km2) - 0.3861 sq. mile (mi2) 1 metric ton (m ton) 0.9842 long ton (lg ton) ACRONYMS AND ABBREVIATIONS CFR (DEPCF) Romanian Railways (Departamentul Cailor Ferate) DR (DD) Directorate of Roads (Directia Drumurilor) EMENA Europe, Middle East and North Africa EMTIN Infrastructure Division of the Technical Department of the Europe and Central Asia Regional Office ER Economic Return GNP Gross National Product IB Investment Bank of Romania IBRD International Bank for Reconstruction & Development ICB International Competitive Bidding (ICPTT) Technological Research and Design Institute for Transport (Institutul de Cercetari si Proiectari Technologice in Transporturi) MTTc (MTTC) Ministry of Transport and Telecommunications PCR Project Completion Report SAR Staff Appraisal Report TU Traffic Unit FISCA1. YEAR January 1 to December 31  THE WORLD BANK FOR OMCUL USE ONLY Washington, D.C. 20433 U.S.A. Okfe of tDisor-G.wal Opralkmnh {v&atl February 4, 1992 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Romania Land Transport Project (Loan 2034-RO) Attached, for information, is a copy of a report entitled "Project Completion Report on Romania - Land Transport Project (Loan 2034-RO)" prepared by the Europe and Central Asia Regional Office with Part II of the report contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Dapartment at this time. Attachment This document has a restricted distribution and may be used by recipients only in the performnnco of their oficial duties. Its contents may not otherwise be disclosed %ithout World Dank authorization.  FOR OFmFCIAL USE ONLY ROMANIA LAND TRANSPORT PROJECT (LOAN 2Q34-RDfl TABLE OF CONTENTS Preface Evaluation Summary PART I PROJECT REVIEW FROM TPE BANK'S PERSPECTIVE I Project Identity 1 II Background 1 III Project Objectives and Description 3 IV Project Design and Organization 4 V Project Implementation 5 Loan Effectiveness 5 Project Start-up 5 Implementation Schedule 5 Procurement 6 Project Costs and Financing 7 Disbursement 7 Loan Covenants 8 VI Project Results 8 Project Objectives 8 Physical Targets 8 Economic Performance 8 Financial Performance 10 Technical Assistance and Training 11 VII Project Sustainability 12 VIII Bank Performance 12 IX Borrower Performance 14 X Bank-Borrower Relationship 14 XI Consulting Services 14 XII Project Documentation and Data 14 PART II MROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE 16 PART III STATISTICAL INFORMATION: 18 Table I - Related Bank Loans 20 Table 2 - Project Timetable 21 Table 3 - Loan Disbursement 22 Table 4 - Project Implementation 23 Table 5(A) and (B) - Project Costs and Financlng 25 Table 6(A) through (E) - Project Results 26 Table 7 - Status of Covenants 30 Table 8(A) and (B) - Staff Inputs 31 (cont'd) 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.  Table of Contents (cont.'d) Annex 1 - List of Equipment Procured 34 Annex 2 - Traffic Trends 35 Annex 3-5 - Audited Financial Statements (1981-85) 38 Annex 6 - Key Indicators for Romanian Railways' (CFR) Operation 41 (1980-85) MAP - IBRD 15462R2 - Romania - Land Transport Project  PROJECT COMPLETIO REPORT ROMANIA LAND TRANSPORT PROJECT (IWAN 2034-RO) PREE&CE This is the Project Completion Report (PCR) for the Land Transport Project in Romania for which Loan 2034-RO in the amount of US$125 million was approved on April 21, 1981. The Loan was closed in May 1987, about two months behind schedule. US$124.8 million was disbursed and about US$0.2 million cancelled. The last disbursement was on March 24, 1987. This Completion Report was jointly prepared by the Infrastructure Operations Division (EKTIN) of the Technical Department of the Europe and Central Asia Reginal Office (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). The report is based on-information obtained from Project files in the ECAMENA Information Services Unit, Staff Appraisal Report, President's Report, Staff Supervision Reports, procurement documents and several working papers.  PROJEaT CONPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RQ) EVA LUATION SUMMARY Objective2 1. The project was designed mainly to relieve transport bottlenecks and mounting congestion on some of the most heavily trafficked railways and road sections (e.g. the Bucharest-Constanta corridor). The project also made suitable provision for regional secondary and feeder roads, so essential for the less developed regions to cater for and induce economic development. In addition, the project included a traffic optimization study designed to improve resource allocation in the transport sector by transport policy analysis (paras 3.01, 4.02 and 6.01). The project objectives have been substantially achieved (paras 6.02-6.11.) Implementation Exoerience 2. The Investment Bank (I8) of Romania, the Borrower, supervised the execution of the project with the participation of the Ministry of Transport and Communications (MTTc), which was responsible for the overall co-ordination of the project and project-related activities within the MTTc. The proceeds of the Loan were passed on e. the Railway Department (CFR) and the Roads Directorate (DR) for execution of the railway and highway components. The arrangements proved to be satisfactory. Once the Loan became effective, the projent took off smoothly. A substantial number of civil works proceeded according to schedule and were completed on target dates (para 5.02). The execution of a few sub-projects, however, faced significant delays due to unforeseen problems encountered in tunnel constructions and the unduly long delivery period of steel for the mainspan superstructure of the Danube bridges. In consultation with the Bank, the Government employed advanced type shield equipment to improve productivity in tunnel works. Furthermore, the Government introduced easing injections to stabilize sandy soil in the tunnels, as well as a new system of worker rewards for increasing labor productivity in relation to these works. These arrangements did help speed up the works, but could not fully recover the lost time (para 5.03). The quality of construction of civil works was satisfactory. 3. Regarding procurement matters, procurement actions as a whole appeared at the time to be in compliance with the letter of the Bank's procurement rules. However, this loan was part of a general pattern that was unsatisfactory, i.e. Romania won virtually all contracts. At an early stage, the Bank mission found that the technical specifications, schedules of delivery and bill of quantities (lists of unit prices) prescribed at the time of bid invitation needed amplification to permit an adequate response from international competitors, but the Borrower readily revised the necessary documents. 4. During project implementation a high-level decision was taken to economize the use of petroleum products in the country which had an impact on the design of three of the project roads where the asphaltic concrete pavement  - ii - was, in consultation with the Bank, altered - without sacrifice of strength - to one of Portland cement (Para 5.02). The Bank's flexible approach in such situations facilitated smooth implementation of the project and was greatly appreciated by the Borrower (paras 5.02 and 8.01). 5. The traffic optimization study began on time but progressed slowly and was completed almost three years behind schedule. The study approach was comprehensive and the methodology followed was sound (para 5.05). 6. A major problem of implementation was faced in respect of the training program. After a delay of 3-4 years the Borrower carried out a limited training program, but even within this limited program execution of the railway tunnel by mechanical methods, which had been agreed because of its importance for future infrastructure works, was ultimately cancelled by the Borrower. In spite of the urgent need for technology transfer in the country, the Bank mission perceived a great reluctance on the part of the country to offer adequate exposure to its technical personnel abroad to familiarize themselves with the state-of-the-art (para 5.06). Results 7. The estimated cost of the project at appraisal was US$767.1 million. The actual cost was US$611.2 million. Several factors are responsible for the savings in construction costs. For instance, intense competition due to International Competitive Bidding (ICB) and lower bid prices obtained than those in the appraisal estimate resulted in a considerable savings in several items (Paras 5.07 and 5.08). A strong US dollar in the early 1980s also contributed to substantial savings (para 5.08). Furthermore, price contingencies provided for in the cost estimates at appraisal turned our to be liberal. Actual disbursements were faster thar. the appraisal estimates (para 5.09). 8. Actual traffic on the railways compared well with appraisal estimates for both passenger and goods traffic 1981-85 (para 6.10, Annex 2B Pt III). However, recent railway traffic figures (1989/90) show a clear departure from the past trend. Railway traffic in 1990 actually dropped about 30% from the peak traffic of 1989 (Annex 2C Pt III). As regards highway traffic the recent traffic figures indicate that the declining trend of the 1980s has been arrested and the road traffic which was suppressed by physical control and regulations in the 1980s is gradually picking up in 1990. Taking into account the latest traffic trend, economic returns for the different sub- projects have been re-evaluated under different future traffic scenar.os (Para 6.06 and Table 6B Pt III). Re-evaluated ERs show that due to an unforeseen downturn of the economy during 1989/90, the rate of return for the different sub-project(s) is lower than the appraisal estimate(s) but still almost all the project components remain well justified under different scenarios considered, excepting one road stretch, namely Fetesti-Cernavoda (ER 10) which has particularly suffered due to the steep decline in tourist traffic. The project's overall re-evaluated ER is about 15 or 16% as compared with 20X estimated at appraisal. It should be emphasized, however, that the re- evaluated ER for the overall project and for its components is subject to a margin of error, or uncertainty, considerably larger than is normally the case. This is because of inadequate information on the actual traffic using the improved or new rail and road sections provided under the project (see Note to Table 6B).  iii - 9. The financial performance of the railways during the period 1981- 85 did not come up to appraisal expectations (para 6.07). Appraisal expectations of higher availability of electric/diesel locco, other rolling stock and staff productivity did not materialize. This was primarily due to denied access to critical inputs or spare parts from abroad due to excessive cotiiession of imports and the elimination of foreign borrowing. Furthermore, rail tariffs remained unchanged despite a substantial increase in input (e.g. diesel fuel) costs. Fortunately, a reduction of about 5,000 railway surplus staff to some extent mitigated the adverse financial trend. The depreciation charges. together with benefits (profits), still generated adequate internal resources which enabled CFR to finance about 40 to 50 percent of its investments, the other helf being financed mostly through state allocations (paras 6.08 and 6.10). Thd CFR continued to make at least some profit (para 6.10). 10. Use of the results of the traffic optimization study was constrained by an administrative decision which resulted in a highly skewed traffic split in favor of rail transport (paras 5.05 and 6.11). sust2-ra* 'b 'ity 11. The railways and highways organization are technically strong and competently managed. There is reasonable expectation that project benefits will be sustained (para 7.01). It is, however, necessary that railway tariffs be reviewed continuously and rationally restructured whenever necessary, and that continuity of close Bank-Government collaboration be maintained to strengthen the groundwork laid in the first land transport project. Findings and Lessons Learnt 12. The project has been successful in meeting most of its objectives, and a number of lessons have been learnt. These lessons are: (a) Considering the large size of the combined rail-cum-road bridges on the two arms of the Danube, the Bank should have advised the Government to introduce International Competitive Bidding (I13) for such major civil works' to ensure cost- effectiveness. This could have been an important breakthrough and could possibly also have avoided many of the problems encountered in implementing this important sub-project (para 8.01a); 1, Introduction of ICB in a similar situation in Hungary (construction of Budapest by-pass including two bridges on the river Danube) in a Bank-financed project paid rich dividends.  - iv - (b) The Bank should have been more forceful in persuading the Government to implement the findings of the traffic optimization study mainly by economic criteria rather than administrative policy decisions and physical regulations (para 6.11). It is, however, understandable that the political climate in those days was rather hostile for a successful implementation of the study results but with the recent opening up of the economy, and on-going restructuring process, the Bank should encourage the Government to adopt a more market-oriented transport system; (c) Lack of continuity in the Bank's supervision, particularly following Romania's unilateral decision to discontinue borrowing from the Bank, reduced the Bank's leverage in addressing the institutional issues, especially poor implementation of the training program. Furthermore, for future training programs to fulfill objectives, it would be advisable to take into account participants' weakness in or lack of knot-ledge of English so that adequate preparatory arrangements could be planned in advance (paras 6.11 and 7.01). (d) We have learned from these operations that the Romanian counterparts have only modest experience in procurement matters, particularly in the international recruitment of consulting services under the Bank's Guidelines, and will therefore require a great deal of help in these matters. Secondly, the Government should issue a dectz.e interim regulation as soon as possible to ensure that all government agencies strictly follow procedures acceptable to the Bank for procurement of goods and services, including consulting services. This should be a prerequisite for resumption of Bank lending in Romania.  PROJECr COMPLEFION REPORT ROMANIA LAND TRANSPORT PROJECr (LOADN 2034-RO) PART - rR REVIEW IMM -AN  PROJECT COMPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RO) PART I I. PRQJECT IDENTITY Project Name LAND TRANSPORT PROJECT Loan No 2034-RO RVP Unit EMTIN Country Romania Sector Transport Subsector Railways and Highways II. BACKGROUND 2.01 Despite the existence of extensive mcuntainous areas, Romania has a fairly well developed and evenly distributed transportation network (see MAP) to integrate its 240,000 sq.km of territory and to serve the needs of its population of over 23 million. The transportation network includes about 11,000 route-km of railways, 73,500 km of roads, one major seaport, four main commercial river ports and a sizeable network of inland waterways and pipelines. The Danube river, which is navigable, flows through 1,075 km of Romania, mainly along its southern border. Ninety percent of foreign trade is handled through the port of Constanta on the Black Sea. Pipelines have been the principal carriers of petroleum and natural gas but have a limited and specialized role. Air and coastal shipping are relatively unimportant for inland transport. 2.02 The backbone of Romania's internal freight transportation is the railway network, which has the crucial responsibility for moving traffic over relatively long distances from the various concentrated centers of manufacture and trade to important consumption centers. Although road traffic is sustaining high volume in tonnage, it functions mainly as a short-haul mover. It is significant that for passengar traffic, the railways' former dominance passed to roads in the late 1960s.  -2 2.03 Neither the truck fleet nor the highway system is adequate to make trucking a flexible long-haul alternative to railroads. The limited emphasis on road development is best understood within a broad view of Romania's transport strategy, with industrial development being a key factor in the development'of the transport system. The transport sector has first of all, therefore, been required to meet the needs of heavy industry and associated large construction projects. The needs of light industry, agriculture, and passenger transport have been secondary. Distribution of industrial and consumer goods is made from distribution centers which have been established in every "judet" (county). While transport to and from those centers within the judet is by road, this pattern of geographically concentrated development of production and consumption centers has favored railways because of their ability so handle dense freight traffic flows from one center to another which are generally well equipped with sidings and handling facilities for bulk traffic. About three-quarters of railway traffic moves from siding to siding. Furthermore, the production of consumer goods and light manufacturing industries which normally favor the use of road transport, is less developed. 2.04 Sea transport has been used exclusively for foreign trade and there is little coastal traffic. With the exception of crude oil, most movements in the past to and from the Constanta port were by rail. Completion of the Danube-Black Sea Canal has resulted in significant additional transport capacity to serve the economy and facilitate movement of freight traffic to and from Constanta by water transport. This canal was the major component of a larger program which also includes construction of deep-water facilities at the port of South Constanta-Agigea, designed to handle large bulk carriers. 2.05 Overall, transport accounted for less than 10 of Romania's total investments generally, while in other countries it generally accounted for about 15-25X. Thus, Romania's transport investments have been low by international comparison. Transport agencies are granted only few resources for expansion. Instead, efforts are made to intensify the use of existing facilities. 2.06 Energy has become a critical sub-sector for the Romanian economy. Having begun to import oil in 1968, Romania became a net importer of energy by 1977, and in 1980 was for the first time to import more crude oil than was produced. 2.07 The principal objectives of transport policy during the last decade were the efficient provision of services, a lowering of the share of transportation costs within the total costs of the economy, and reduction of energy consumption. To these ends, the authorities were fostering the use of rail and water transport for long- and medium-distance commodity hauls, and of road transport for short hauls, the development of integrated transport facilities (e.g., containers), and the use of common carriers in preference to transport on own account.  -3- III. PROJECT OBJECTIVES AND DESCRIPTION 3.01 The objectives of the project were to assist Romania: (a) to avoid transport cost increases by providing timelv relief of existing traffic congestion through road and rail investments intended to widen and increase the capacity of transport links which are approaching saturation; (b) to provide all-weather access to a development area, which heretofore has been served by only a fair weather track, and to provide transport for a new mine; (c) to improve the economic evaluation of projects; (d) to improve monitoring of the use of the road network; (e) to improve resource allocation in the transport sector by transport policy analysis (especially in respect of the modal split); and (f) to familiarize the railway and highway organizations with recent developments and trends in operating, monitoring and maintenance techniques utilizing the latest technology. 3.02 DescriRtion of the Project The project consists of high priority items included in Romania's 1981-85 railway and highway Investment Plans and technical assistance. The railway components include: (i) construction of 77 km of two new lines together with about 7 km of tunnels, 3 km of bridges and 2 km of viaducts; (ii) doubling of three line sections of approximately 125 km; (iii) electrification of 470 route km of main lines; (iv) procurement of special steel for the superstructure of Cernavoda bridge over the Danube; and (v) procurement of about 3301 frei-;t cars. The highway components include: (i) paving of three two-lane gravel roads (110 km); (ii) widening of one road (6 km) from two to four lanes; and (iii) construction of a 17 km new road between Fetesti and Cernavoda on the two arms of the Danube to shorten the distance between Bucharest and Constanta. Technical assistance comprises a traffic optimization study (150 man-months) and related study visits abroad by Romanian officials as well as other such visits in connection with improvements in car control and loeomotive utilization and in highway maintenance practices. Provisions have been made for the equivalent of about 30 man-months for such visits. Visits to Romania by foreign experts in connection with the traffic optimization study are also envisaged. l/ Subsequently increased to 830 freight cars, which formed a part of the total requirements of CFR's 1981-85 acquisition plan (Table 11 of SAR) which was appraised by the Bank.  -4- IV. PROJECT DESIGN AND ORGANIZATION 4.01 The project was designed mainly to relieve transport bottlenecks and mounting congestion on some of the most heavily trafficked railways and road sections. These lines and road sections connect several large cities and industrial areas and are of critical importance both for the transport network and the country. Parallel to the overall economic growth objectives, the Government was keen to reduce inter-regional disparities in development levels and to generate employment opportunities in rural areas with the development of small-scale processing units. The project was, therefore, designed especially to address some pressing socio-economic problems by the suitable provision of regional, secondary and feeder roads, so essential for the less developed regions to cater for and induce economic development. The major thrust in the project design was the construction of the combined road-cum- rail bridges over the two arms of the Danube on the Bucharest-Constanta corridor - which was probably Romania's most critical transport bottleneck. 4.02 In the project designing stage, the Romanians for the first time prepared transport feasibility studies using methodology customarily employed in Bank projects. As a result of the Bank's subsequent reviews of these studies and discussions with officials, a number of marginal components originally proposed for inclusion in this project were either reformulated or postponed. More important, however, was the traffic optimization study to be carried out under this project. The principal objective of the study was to review the existing procedures for determining transport linkages and the modal split with a view to conserving energy, improving inventory control and more closely aligning tariffs to service-specific costs. The study was designed to assist the development of local skills and formulate a policy framework within which further development of the Romanian transport sector could be considered. 4.03 The total project cost was estimated at about US$767.1 million, with a foreign exchange component of about US$330.7 million. The Bank financed only US$125 million, the balance of the foreign exchange costs as well as the local costs being financed by the Romanian Government. The Bank, provided financial support for the traffic optimization study to be carried out by Romanian consultants mainly because this would help the country to: (a) develop local skills needed to assist the modal institution and (b) establish an appropriate basis to foster inter-modal co-ordination and provide the Bank with significant leverage to assist in institutional development. The Bank Loan did not exceed the foreign exchange costs of the project and it was more a question of the Bank's preference for items to finance. 4.04 The Investment Bank (IB) of Romania, the Borrower, supervised the execution of the project with the participation of the Ministry of Transport and Telecommunications (MTTc), which was responsible for the overall co- ordination of the project and project-related activities within the NTTc. The proceeds of the Loan were passed on to the Railway Department and the Roads Directorate for the railway and highway components included in the project.  -5 - Responsibility for the technical assistance element and coordination of the traffic optimization study was vested in MTTc. V. PROJECT IMPLEMENTATION 5.01 Loan effectiveness and proiect start-up: The Loan (2034-RO) was approved on July 7, 1981 and was signed on July 17, 1981 (Table 2, Pt III). The original planned Loan Effectiveness Date (October 1981) was slightly delayed (to November 16, 1981) mainly because of the unfamiliarity of the project executing agencies with Bank procedures and requirements, as this was the first Bank-financed land transport project in the country. Once the Loan was effective, the project took off smoothly. 5.02 Implementation schedule: Originally all the project roads were scheduled to be completed by the end of 1984 and the railway works by the end of 1985, with the possible exception of the cantilevers to carry the roads over the two Danube bridges at Fetesti and Cernavoda. A substantial number of civil works proceeded according to schedule (Table 4, Pt III) and completed on target dates with minor variations. During project implementation, a high-level Government decision was taken to economize on the use of petroleum products in the country which had an impact on the design of three of the project roads where the asphaltic concrete pavement was, in consultation with the lank, altered -- without sacrifice of strength -- to one of Portland cement concrete. This change resulted in an increase of initial investment cost which was gradually neutralized over time due to lower maintenance cost. This change also resulted in the need for bitumen (financed under the project) -- from 27,000 to about 16,000 tons -- reducing the cost eligible for reimbursement by about US$3 million. However, as Romania had purchased equipment and materials valued at about US$34 million, this reduction did not affect the Bank's rate of reimbursement, which for this element of the project was limited to US$30 million. 5.03 The execution of civil works for several sub-projects, however, faced significant delays (Table 4A, Pt III) due to unforeseen problems encountered in tunnel construction and an unduly long delivery period for steel for the mainspan superstructure of the Danube bridges. The construction of several tunnels was greatly hampered by water infiltration and bad soils. In consultation with the Bank, the MTTc employed advanced type shield equipment to improve the productivity in tunnel works, and started working the shields at both ends of the tunnel to speed up the works. These arrangements did help improve productivity but could not fully recover the ground lost. Furthermore, the MTTc introduced a new method of easing injections to stabilize sandy soil in the tunnels for improving the rate of progress in tunneling work, as well as a new system of worker rewards for increasing labor productivity in relation to these works. Inadequate information at the ICB prequalification stage regarding contractor's capability to supply steel for  - 6 - the mainspan superstructure of the Danube bridges on time hindered progress and significantly delayed completion of this important sub-project which in turn greatly influenced the economic viability. 5.04 The completion of track overhaul of priority sections commenced slightly behind schedule (Table 4B, Pt III) in some cases and a major portion of the works was completed on schedule though overhaul of some sections was delayed by a year or so. The quality of construction of civil works was, in general, satisfactory. 5.05 The traffic optimization study began on time but progressed slowly because of insufficient interest on the part of the Borrower and was completed almost three years behind schedule (Table 6, Pt III). The Bank mission maintained close liaison with the Consultants (ICPTT) carrying out this study, exchanged ideas and clarified, at an early stage, the need to take into account the costs of storing and maintaining inventories at each end of the transport linkage in the study to arrive at a proper optimization of mode- selection. This suggestion was accepted by the Consultant. The study approach was comprehensive and the methodology followed was sound. But because of excessive emphasis on energy conservation, the Government imposed strict rationing of motor fuel and severe restrictions on the movement of road transport, and did not fully apply the results of the study. Infrastructure investments remained narrowly designed only to save fuel and the traffic split remained highly skewed in favor of rail transport (para 6.11). 5.06 A major problem of implementation was faced in respect of the training program component included in the project. The project envisaged training arrangements for improvements in car control, locomotive utilization and highway maintenance practices. After a delay of about 3-4 years, the Borrower carried out a limited training program (Table 6E) and even within this limited program, execution of the railway tunnel by mechanical methods, which was agreed because of its importance for future infrastructure works, was ultimately cancelled by the Borrower. In spite of the urgent need for technology transfer in the country, the Bank mission perceived a great reluctance on the part of the country to offer adequate exposure to its technical personnel abroad to familiarize themselves with the state-of-the- art. This was most unfortunate, to say the least. 5.07 Procurement: This was the first Bank-financed land transport project in the country. Close Bank-Government collaboration was, therefore, essential, particularly at the initial stage, to make the agencies concerned aware of Bank requirements. In many instances the Bank mission found that technical specifications, schedules of delivery and bills of quantities (lists of unit prices) needed amplification to permit an adequate response from international competitors. Based on the Bank's suggestions, the Borrower readily revised the necessary documents. Romanian bidders were successful throughout, despite considerable foreign competition for some items, where bids were so close that the local preference provision had to be invoked. Because of intense competition and lower bid prices obtained than those in the appraisal estimate, considerable savings were realized in some items which were  -7- subsequently utilized, in consultation with the Bank, for other important items included in the project but which could not previously be financed because of the limitation imposed by the loan amount. Regarding procurements matters, procurement actions as a whole appeared at the time to be in compliance with the letter of the Bank's procurement rules. 5.08 Project costs ane financing: The estimated cost of the Land Transport Project at appraisal was US$767.1 million. The final cost came to about US$611.2 million (Table SA). The decrease in total cost of about 20% in terms of US dollars was due to several factors. For instance, intense competition due to the introduction of ICB resulted in a considerable savings in several items (para 5.07). The changes in official exchange rates from time to time2 during project execution also affected some savings. Furthermore, the amount of price contingencies provided in the appraisal estimate turned out to be too much on the liberal side. The structure of project financing was slightly different from what was planned at appraisal. The share of railways net resources, state resources and IBRD Loan towards financing the project was set at 24.3%, 59.4% and 16.3% respectively, at appraisal, as against the corresponding figures of 29.4%, 50.2% and 20.4% actually obtained on completion (Table 5B). A small amount ($0.2 million) was cancelled from the Bank Loan because of incomplete implementation of the planned training program (para 5.06). 5.09 Disbursement: For railwayr equipment and materials the Loan was disbursed against the full ex-factory cosc of contracts won by Romanian organizations (para 5 17). Highways disbursements were made at 25% of total expenditures on civil works, which roughly accounted for about 75% of the foreign costs of the sub- project. Statements of expenditures, against which the Bank disbursed, were submitted at regular intervals by the Directorate of Roads (DR) through IB. However, no disbursements were made from the Loan allocation for highway civil works until the Bank received satisfactory evidence from the Government that ICB procurements were made for highway construction equipment and materials in an aggregate amount sufficient to cover the requested withdrawals. This procedure was adopted because the Bank did not insist on ICB for highway civil works construction in Romania. The Bank realized that introduction of ICB into civil works construction in Romania at that stage would require profound legislative changes, the success of which could not be taken for granted, and that there were substantial practical problems such as the availability and price of labor and domestic inputs to enable any foreign civil works contractor to operate satisfactorily in Romania. Given the situation, it was considered prudent that a variant of the conventional system which protected the principles of ICB and offered control over civil works performance was the most desirable approach. Apart from at the very initial stage, actual disbursements were faster than the appraisal estimates (Table 3, Part III). The Loan was closed on May 1987 with a delay of only two months mainly to 2/ Exchange rates at different points of time are shown under "Currency Equivalents".  - 8 - explore the possibility of a better execution of the training program (para 5.06). 5.10 Loan covenants: Compliance with Loan covenants was generally good in spite of some delay in implementation of a few sub-projects and reduction in scope of the training program (Table 7, Pt III). The Borrower's part (Pt II of the PCR) of the Project Completion Report and the Government's comments on Part I of the report are still awaited. (See note under Part II of the PCR) VI. PROJECT RESULTS 6.01 Proiect objectives: Overall, the project was successful in meeting its principal objectives of relieving critical transport bottlenecks on the transport links which were approaching saturation. The project also provided all-weather access to a development area which remained isolated for a major part of the year, and a transport link for a new mine. Improvement of management, operation and monitoring of the use of the transport network was also addressed with a limited amount of success through transport policy analyses (particularly in respect to the modal split - paras 5.05 and 6.11) and increasing use of methodology customarily used in the Bank for evaluation of transport investments (para 4.02). 6.02 Physical targets: The physical targets of the project have been achieved substantially as planned (paras 5.02 and 5.03) with some slippage in time schedule mainly due to unforeseen difficulties (sandy soil and water infiltration) faced in tunnel construction and in the supply of steel for the mainspan superstructure of the Danube bridges. The quality of construction of civil works was good. 6.03 Economic gerformance: The general and sub-project specific methodologies followed for the economic re-evaluation of the completed project are, basically, the same as those used at appraisal. For example, in Romania prices of railway traction and rolling stock, rails, road trucks, diesel fuel, electricity and several other important items influencing transport activity are significantly below the border prices. For calculating economic benefits and costs, both at appraisal and in the preparation of the completion report, international prices (Table 34 of Staff Appraisal Report - SAR) have been used for such tradeable commodities. Labor, land and other non-tradeable items like "ballast and stones" have been valued at local prices in both situations. As envisaged at appraisal, quantified benefits due to the proposed project resulted mainly from reduced maintenance and operating costs.  -9- 6.04 Lower transport costs due to substantial distance savings in specific cases, such as (i) the new Fetesti-Cernavoda road (a distance saving of about 60 km); (ii) the road between Adjud/Podul Turculi and Birlad (a distance saving of 40 km); (iii) the Craiova-Balchesti road (a distance saving of 30 km); and (iv) the new Vilcele-Rm. Vilcea interlinked with doubling of Rm. Vilcea-Podul Olt section (saving considerable distances in travel for about 3 million tons of freight traffic per annum) amply justified the investments made as assessed at appraisal (Table 6B Pt III), excepting the Fetesti-Cernavoda road (para 6.06). 6.05 Electrification of three heavily trafficked lines, namely Dej- Cluj-Simeria (carrying 33 million gross ton-km per route km in 1980), Mintia- Arad (carrying 23 million gross ton-km per route km in 1980) and Faurei- Tandarei (carrying 30 million gross ton-km per route km in 1980), which were already prime candidates for electrification on economic grounds, was postponed by the Government in the past because of unattractive financial returns since CFR was receiving diesel fuel far below resource costs, although Romania was importing substantial quantities of crude oil. Based on the Bank- style feasibility studies prepared at appraisal and on completion, justification of electric traction based on resource costs has been fully re- established (Table 6B, Pt III). Doubling of the Ilia-Arad and Faurei-Tandarei lines results in relatively high benefits as expected at appraisal because the expenditures are for completing a relatively small portion of a large on-going works, yielding full benefits on completion by avoiding substantial detour of freight traffic on circuitous routes. 6.06 The actual traffic growth and its projection have been re-assessed at completion. Railway traffic growth during the project construction period (1981-65) and at completion compares favorably with appraisal estimates (para 6.10 and Annex 2B Pt III). However, the recent (1989/90) traffic figures (Annex 2C Pt III) show a significant departure from the past trend and a drop of about 301 in rail freight traffic (and 20Z in rail passenger traffic) in one year, namely, 1990 compared to 1989. It is not clear whether this declining trend in traffic will continue or there will be a modest recovery of railway traffic from its 1990 figure during the next decade. For the purpose of re-evaluation of economic returns (ERs) actual traffic trend up to 1990 has been taken into consideration and thereafter two alternative scenarios have been assumed. For railway traffic, (i) a drop of about 40% from the peak in 1989 to 2000 due to the on-going economic restructuring and, alternatively, (ii) a modest annual growth of about 2 to 3% from the 1990 low traffic during the next decade. It is possible that in reality the ERs will lie in between the two bounds discussed. As regards highway traffic the recent traffic trend (1989/90) shows that the declining trend of the 1980s has been arrested and there is a growth of about 6X in freight traffic (and 11 in passenger traffic) in 1990 compared to 1989. For the purpose of re-evaluation of ERs for highway sub-projects, the actual traffic trend up to 1990 has been utilized and a traffic growth of about 4X per annum has been assumed during the 1990s and thereafter up to 2005. This assumption appears to be realistic particularly because the road traffic has been suppressed by physical control and regulations during the 1980s. Re-evaluated economic returns for the different sub-projects (Table 6B Pt III) show that, due to an unforeseen downturn of the economy in the late 1980s, the rate of return for the different sub-projects  - 10 - is lower than the appraisal estimate(s) but still almost all the project components remain well justified under the different scenarios discussed above excepting one road stretch, namely Fetesti-Cernavoda, with a marginally lower ER of about 10, which has particularly suffered due to the steep decline in tourist trade. The overall project remains economically justified as appraised with a weighted E.R. of about 15-16% (Table 6B Pt III). It should be emphasized here that these estimates are, however, subject to a margin of error, or uncertainty, considerably larger than is normally the case because of inadequate traffic information; see Note to Table 6B and footnotes to Table 6A and Annex 2A. 6.07 Financial Rerformance (CFR): The financial statements of Romanian Railways (CFR) including both appraisal estimates and actual results for FY 81-85 are given in Annex 3-6 (Pt III). The target for the railways was to produce for all activities combined a benefit (profit) of about 12-l5%3 during 1981-85, and a return of more than 3% on the average net fixed assets in use during that period. These targets were not optimistic since they were generally exceeded in the previous five year plan period. However, the desired results were not achieved, and a profit of barely 2-3% was realized in most of the years and the return on the net fixed assets was below 3% during this entire period and was less than 2% in 1982 and 1983. This was mainly because tariffs did not keep pace with inflation, particularly with the significant rise in costs of diesel fuel and electricity. The overall operating revenue of the railways, though, exceeded the appraisal estimates in absolute terms in all these years, but was not sufficient to offset an increase of about 20-30% in operating expenses (Annex 3, Pt III). Railways tariffs remained unchanged during all these years, and only recently in 1990 has the tariff been more than doubled to reverse the deteriorating trend. 6.08 The depreciation charges, together with benefits, still generated adequate internal resources which enabled the railways to finance about 40 to 50 percent of its investments, the other half mostly being met through state allocations (Annex 4, Pt III). CFR did not enter into any foreign loan other than the Bank Loan during the period under review. 6.09 Repayable state allocations which were expected to rise by about 50% from about Lei 17 billion in 1981 to about Lei 26 billion in 1985 at appraisal continued to increase more sharply during this entire period and stood at Lei 47 billion in 1985 (Annex 5, Pt III). Consequently, the debt/equity ratio projected at appraisal as 27/73 in 1985 actually worked out at 36/64. 3/ Operating ratios (including track overhaul expenses) varying between 85 and 88%. Capital overhaul of track, normally capitalized, is in Romania charged to operations. When capital overhaul of tracks is excluded from operational expenses, operating ratios and rate of return on net fixed assets improve by about 7-8% and 0.4-0.5% respectively.  - 11 - 6.10 The financial performance of the railways during the period under consideration (1981-85) was interlinked with three basic factors, namely: (i) traffic mix and its growth, (ii) railway productivity and (iii) input costs and tariff adjustments. Traffic materialization on the railways compared favorably with appraisal estimates for both passenger and goods traffic (Annex 2B, Pt III). As regards the commodity mix, principally increased coal movement in bulk and relatively low volume of higher-rated traffic had an unfavorable impact on railway finance to some extent. Appraisal expectations of higher availability of electric/diesel locos, other rolling stock and staff productivity did not materialize. This was primarily due to denied access to critical inputs or spare parts from abroad due to the excessive compression of imports and the elimination of foreign borrowing. However, utilization of traction and rolling stock in 1985 improved in absolute terms compared to 1980. Rail tariffs remained unchanged despite increased input costs (para 6.07). Fortunately, a reduction of about 5,000 railway surplus staff mitigated to some extent this adverse trend and the CFR continued to make at least some profit. The latest operational statistics (1986-89, Annex 7) indicate that the improvement in staff productivity was maintained during the 1980s and the turnaround time of wagons improved significantly during the entire period 1980-89. 6.11 Techrical assistance and training: The major technical assistance component under the project was the traffic optimizatioa study. The study was designed to review the existing procedures for optimizing transport linkages and the modal split, in order to furcher sharpen and refine them, taking into account multiple objectives including energy conservation, inventory control and the relation between tariffs and service-specific costs. The Romanian Consultants (ICPTT) carried out the studies in depth. The multi-criterial approach which was used to compute economic (social) cost comparisons went beyond the criteria agreed at appraisa'l and included a number of environmental considerations. The results of the study were put to use starting in 1984, by some 2000 regional, industrial, transport and planning agencies throughout Romania. However, the optimization criterion used in the a-,-llcation was the "least energy" criterion imposed by the Government to correspond to its prevailing policy for the 1986-90 plan period. In short, the selection of optimization criteria was not a result of the study but an administrative policy decision which resulted in a highly skewed traffic split in favor of rail transport (Table 6D, Pt III). The study demonstrated that even in the Romanian situation trade-off points between rail and road transport costs, depending on the type of rail terminal service (road or rail siding) and type of product vary considerably even using economic-cost optimization, and can reach as much as 430 km on-road (even with railway alternatives available) for high-value commodities. But these results were not put to any practical use and remained a show-piece of a theoretical exercise. The training program achieved only very limited success, as stated earlier (para 5.06). For future training programs to meet objectives, it would be advisable to take into account, inter alia, participants' weakness or lack of knowledge in English so that adequate preparatory arrangements could be made in advance.  - 12 - VII. PROJECI SUSTAINABILITY 7.01 The project sought to relieve critical transport bottlenecks and mounting congestion on some of the most heavily trafficked railway and road sections in Romania and open up some areas which were isolated for much of the year. The principal benefits of the project would accrue from savings in operational and congestion costs, reduced travel time, greater safety, increased comfort and convenience. Experience based on the completed project would also enable them to compare Bank-style tnalyses with those previously in use. The management and staff of CFR -iid DR are technically well qualified and competent. Planning staff were quick to grasp Bank-style investment analysis. There is, therefore, reasonable expectation that project benefits will be sustained. The possibility of changes in the political environment leading to a reversal of the on-going reform process in the transport sector could be a potential risk to sustaining the institutional benefits generated by the project. It is essential that continuity be maintained to strengthen the groundwork laid in the first land transport project. Romania's unilateral decision to discontinue borrowing from the Bank in the late 80s hampered close Bank-Government collaboration for further progress in the transport sector and stood in the way of the consolidation effort of project benefits, particularly adequate implementation of the training program (para 5.06). With the recent opening up of the country, much of the lost ground may well be recovered. Based on the results of the traffic optimization study, the Government should encourage equitable treatment of all modes in their access to capital, foreign exchange and markets and allow the transport market to respond freely to users' choice. VIII. BANK PERFORMANCE 8.01 Through the Land Transport Project, the Bank made a positive contribution to the physical and institutional development of the transport sector. Inclusion of both rail and road components in the same project helped to take an integrated view of the land transport system during supervision stage and identify some of the system-wide problem such as infrastructure investments narrowly designed only to save fuel. Close project supervision by the Bank helped speed up and improve productivity in critical tunnel and earth works. The procurement actions on the whole appeared to proceed satisfactorily, except procurement of steel for the mainspan superstructure of the Danube bridges (paras 5.03 and 5.07) because of timely action taken by Bank missions to assist the Borrower to carry out the necessary amplifications in technical specification, schedules of delivery and Bill of Quantities, to permit adequate response from international competitors (para 5.07). At an appropriate stage of the traffic optimization study, the Bank mission argued the need to include the implications of inventory holdings on cost and choice of transport mode selected. The study group had not previously considered this aspect fully, but appreciated and implemented the Bank mission's suggestion. The Bank's flexible approach towards pavement  - 13 - design without sacrifice of strength (para 5.02) was also greatly appreciated by the Borrower. Because of intense competition and lower bid prices obtained than those in the appraisal estimates, considerable savings were realized in some items which were subsequently utilized, in consultation with the Bank, for other important items, such as freight cars, excavators, etc. included in the project but which could not be previously financed because of the limitation imposed by the Loan amount (para 5.07). The Borrower fully appreciated the Bank's helpful and reasonable approach in this regard. However, in retrospect, the following lessons may be learnt from the experience of the project: (a) Considering the large size of the combined rail-cum-road bridges on the two arms of the Danube, the Bank could nave advised the Government to introduce International Competitive Bidding (ICB) for such major highway civil works. This could have been an important breakthrough and the country could have reaped the benefits of international competition to make the sub-project more cost-effective'. Such an approach could possibly also have avoided many of the problems encountered in implementing this important sub-project (para 5.03); (b) The Bank should have been more forceful in persuading the Government to implement the findings of the traffic optimization study through appropriate distribution of traffic among the different transport modes mainly by economic criteria rather than administrative policy decisions and physical regulations imposed by the Government (para 6.11). It is, however, understandable that the political climate in those days was rather hostile for a successful application of the study results but now with the opening up of the economy and on-going restructuring process, the Bank should encourage the Government to adopt a more market-oriented transport system; (c) A lack of continuity in the Bank's supervision, particularly during Romania's unilateral decision to discontinue borrowing from the Bank (para 7.01) near the end of this project (1986- 87) removed considerable Bank leverage in addressing the institutional issues and to a great extent led to the poor implementation of the training program. Furthermore, in the planning of future training programs it would be advisable to take into account, inter alia, participants' weakness or lack of knowledge in English so that adequate preparatory arrangements could be made in advance. 4/ Introduction of ICB in a similar situation in Hungary (construction of Budapest by-pass including two bridges on the river Danube) in a Bank-financed project paid rich dividends.  - 14 - ix. BORROWER PERFORMANCE 9.01 On the whole, the Borrower's performance was satisfactory. Background action taken for Loan Effectiveness and timely disbursements (mostly ahead of appraisal schedule) of the Bank Loan bore ample testimony to that effect. The quality of construction of civil works included in the project was satisfactory. The technical approach to the traffic optimization study was comprehensive and sound. IB, MTTc, CFR and DR are all well-managed organizations and they maintained good co-operation amongst themselves. Compliance with the loan covenants was generally good, excepting the training program element (para 5.06 and Table 7, Pt III). X. BANK-BORROWER RELATIONSHIP 10.01 Good relations between the Bank and the Borrower contributed to clarification and resolution of many issues (paras 5.02, 5.03, 5.05 and 5.07) that arose during project implementation. However, a lack of continuity, particularly following Romania's unilateral decision to discontinue borrowing from the Bank (para 8.01c), resulted in inadequate attention being paid to institutional issues, particularly the training program and use of the traffic optimization study results (Table 6D & E, Pt III). XI. CONSULTING SERVICES 11.01 The Romanian authorities insisted that the traffic optimization study be undertaken by Romanian consultants since foreign consultants were not familiar with the Romanian system. The Technological Research and Design Institute for Transport (ICPTT) in Romania was entrusted with this task, mainly to help the country develop the local skills required to foster inter- modal co-ordination. The quality of the Consultant's work was satisfactory (para 5.05 and 6.11). XII. PROJECT DOCUMENTATION AND DATA 12.01 The appraisal report and the Loan documents were well documented and provided a useful framework for both the Bank and the Borrower for review of project implementation. Supervision reports contained in-depth, on-going analysis of physical, financial and operational aspects of rail/road sub- sector, in general, and project components in particular, excepting in 1986 at the end of the project completion stage due to Romania's unilateral decision to discontinue borrowing from the Bank (para 7.01). Timely submission of audit reports of the CFR also facilitated preparation of the PCR.  PROJECT COMPLETON REPORT ROMANIA LAND TRANSPORT PROJECr (LOAN 2034-RO) PART II - ROJECT REVIEW FROM THE BORRQWER'S PERSPECIV  PROJECT COMPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RO) PART II: PROJECT REVIEW FROM THE BOSRROWiRSPERSPECTIVE The project principally reflected the political decisions of the former leadership of the country, and to a lesser extent the criteria of efficiency and economic return. The economic and political decision-making factors at that time directed that the extension of IBRD loans be followed by local measures being taken which made it compulsory that bids be awarded to local suppliers. Accordingly, the foreign exchange loan amounts made available by the IBRD were mostly used for the external payments balance. However, an independent analysis of lessons learned reveals these to be the same as those to be derived from the majority of projects benefiting from World Bank loans, namely: 1) difficulties faced by the Bank in obtaining the data, especially those regarding the overall transport sector, required for the perspective analysis, i.e. overall need, priorities and plans for all transport modes; 2) delays experienced in the implementation of civil works, due on one hand to unforeseen factors (water infiltration and bad soils in the case of several tunnels) and on the other to certain political decisions (economizing on the use of petroleum products, the effect of which was to change the way in which three roads within the project were built); 3) delays in the supply of locally manufactured goods, for instance the metal parts required for construction of the superstructure for the Danube bridges; 4) reduction to a minimum level of the loan amounts to be used for imports, which explains the limited implementation of the programs for the training of technical staff abroad. Irrespective of the aforementioned facts, one has to appreciate the efforts undertaken both by IBRD and by the institutions involved which succeeded, following special cooperation during procurement and supervision, in finally achieving project implementation. This is the appropriate occasion to congratulate IBRD on their insistence that a study of transport optimization be prepared. This study, although it was not taken into account at the time, is now being used to meet the emerging needs of a transportation system operating according to the requirements of a market economy.  PROJECT COMPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RO) PART III - STATISTICAL INFORMATION  PROJECT COMPLETION REPORT ROMANIA LAND TRANSPORT PROJECT (LOAN 2034-RO) PART III: STATISTICAL INFORMATION CONTENTS Table 1: Related Bank Loans Table 2: Project Time Table Table 3: Loan Disbursements Table 4: Project Implementation Table 5: Project Costs and Financing A. Project Costs S. Project Finandng Table 6: Project Resuits A. Economic Benefits B. Economic Rate of Retums C. Financiaimpact - Romanian Railways (CFR) D. Project Study E. Training Program Table 7: Status of Covenants Table 8: Staff Inputs A. Bank Missions B. At Headquarters Annex 1 - Ust of Equipment Procured Annex 2 - Traffic Trends A. Comparison of Actual and Forecast of Traffic on Project Sections. B. Modal Traffic Trends - Comparison of Appraisal Estimates with Actual. C. Recent Traffic Trends (1989/1990) Annex 3- Audcted Financial Statements (1981.85) - Income Statements Annex 4 - Avdted Financial Statements (1981-85) - Cash Flows Annex 5- Audited Financial Statements (1981-85) - Balance Shts Annex 6- Key Indicators for Romanian Railways (CFR)-Operation (1980.85)  .20- Table 1: RELATED BANK LOANS (in Millions US Dollars) Year of Loan Title Loan No. Approval Amount Purpose Comments Danube- 1794 1980 100.00 To assist In the construction of a 64-km canal This was the first transport Black from Cernavoda on the Danube to South sector project and the loan Sea Constanta Agigea on the Black Sea in order to was fully disbursed in May Canal provide an energy efficient and cost effective 1982 and the cana. has been Project means of transportation. open to traffic since May 1984. PPAR No. 6565 December 23, 1986. Source: Bank Mission February 1991  -21 - Tabe 2: PROJECT TIME TABLE Date Date Item Planned Actual Preparatlon by the Country February 1979 - January 1981 First Presentation to the Bank and first Bank mission to consider the project March 1979 Appraisal mission September/October 1980 Negotiations completion date May 29, 1981 Board Approval July 7, 1981 Loan Signature July 17, 1981 Loan Effectiveness October 1981 November 16,1981 Loan closing March 31, 1987 May 1987 1/ Project Completion June 30, 1986 October 30, 19882/ Source: Bank Mission Februarv 1991 1/ Loan was fully disbursed after cancelling an amount of US$ 0.22 million. 2/ Delayed due to unforeseen difficufties experienced in tunnelling works and delivery of main span super structure for Danube river bridge.  -22- Table I LOAN DISBURSEMENTS (in Millions US Dollars) IBRD Appraisal Actual Actual as % Fiscal Year Estimate Disbursement of Estimate Dec. 81 6.1 0.0 0.0 June 82 28.2 16.0 56.7 1983 Dec. 82 51.4 55.2 107.4 June 83 75.3 81.5 108.2 Dec. 83 96.4 106.9 110.9 June 84 109.4 119.3 109.0 Dec. 84 117.0 123.6 105.6 June 85 121.0 124.4 106.3 Dec. 85 123.0 124.5 101.2 June 86 124.0 124.8 100.6 1987 Dec 86 124.8 124.8 100.0 June 87 125.0 124.8 1/ 100.0 Source: Bank Supervision Reports. 1/ About US$ 0.2 million was cancelled and the final disbursement was made on March 24, 1987. Febmtu 199  - 23 - Page 1 of 2 Table 4: PROJECT IMPLEMENTATION A - COMPLETION OF CML WORKS CONSTRUCTION 1/ Scheduled Actual Total Completon Completion Ouantiy at appraisal Date Comments A. RAILWAY COMPONENT I. NEW UNES 1.1 Vlcela-Rm. Vilcea 39.6 km Sept. 1985 Nov.1988 Unforeseen difficulties experienced In tunneling works 1.2 Babenl Barbesti 37.0 km Dec. 1984 Dec. 1986 In operation since Dec. 198 II. UNE DOUBUNG 2.1 RmC Vilcea-Podu Oq!t 39.6 km Dec. 1985 Dec. 1985 2.2 llia-Arad 64.0 km Dec. 1985 May 1988 2.3 Faurel-Tandarei 20.0 km Dec. 1983 End 1984 Ill. ELECTRIFICATION OF UNES 3.1 Dej-Cluj-Slmeria 236.0 km June 1984 Nov. 1984 In operation by end 1984 3.2 MInta-Arad 142.0 km Dec. 1985 Mid 1986 Operational June 1986 3.3 Faurel-Fetesti 89.0 km Dec. 1985 Jun.1984 IV. DANUBE BRIDGE (Cemavoda) Dec. 1982 Oct. 1987 Delivery of steel for the main span superstructure was delayed B. HIGHWAY COMPONENT 1. PAVING OF lWO-LANE GRAVELROAD 1.1 Schtu-Golesti-Curtea de Arges 41.0 km Dec. 1984 March 1986 1.2 Crabova-Balcesti 23(40)km Dec. 1984 Dec. 1984 1.3 Adjud-Birlad 29 km Dec. 1984 Jun. 1984 II. WIDENING FROM TWO TO FOUR LANES 2.1 Brashov-Harman 6 km Dec. 1984 Jun. 1984 III. FOUR LANES BETWEEN BRIDGES 3.1 FetestWCemavoda 17 km Dec. 1984 Oct. 1987 See Cemavoda against item (IV) above 1/ In addition (a) 830 ralwvay freight cars Included In the Loan have been supplied as scheduled and (b) technical assistance and training program amounting US$ 1.0 million Included in the project always remained behind schedule.  - 24 - Page 2 of 2 Table 4: PROJECT IMPLEMENTATION B - COMPLETION OF TRACK OVERHAUL - PRIORITY SECTIONS Rail Type Year to be Year in Overhaul Priority Length Overhauled Overhaul Actually No. Secions km (kg) to Commence Commenced Remarks 1. Golest-Vilcele 30.0 49 1982 1983 Overhaul of all 2. IIla-Birzava 64.0 60 1982 1982 Priority Sections 3. Videle-Caracal 11 105.0 65 1981 1982 Completed before 4. Brasov-Deda 228.0 60 1981 1981 June'8 instead of 5. Tecucl-Jasi 100.0 65 1982 1983 December84 planned 6. Simeria-Hunedoara 9.0 49 1981 1982 at appraisal. 7. Simeria-Pestis 10.0 60 1982 1981 8. Alexeni-Tandarei 65.0 65 1981 1980 611.0 February 1991 Source: Supervision Reports and Staff Appraisal Report  *25- Table 5: PROJECT COSTS AND FINANCING A - PROJECTC Anaraisal Estimate Revised Estimate Actual Items Local Foreign Total Local Foreign Total Local Foreign Total -U US$ milflon - US$ million- -US$ million Railway Component New lines 86.4 39.3 125.7 107.2 49.2 157.0 109.4 48.0 157.4 Une doubling 63.6 37.9 101.5 62.0 32.1 94.1 53.0 25.0 78.0 Electrification & signalling 46.0 84.6 130.6 44.1 75.2 119.3 40.0 61.1 101.1 Danube bridges 75.8 50.3 126.1 86.3 52.5 138.8 78.5 45.5 124.0 Freight Cars 0 12.2 18.2 1 9Q3 297 9.4 136 23.0 Rail Subtotal 277.8 224.3 502. 310 0 28_2 290.3 193.2 4 Highwav Comoonent Paving of 2-lane gravel roads 25.3 11.6 36.9 25.3 12.5 37.8 24.0 10.2 34.2 Widening 2 to 4 lanes 1.7 1.2 2.9 2.9 1.5 4.4 2.9 1.3 4.2 New Constructon 706 17.9 88.5 72.4 1 3 .7 71.1 17.2 82.3 Hinhway Subtotal 97.7 3Q2 128.4 100 6 3213 32 9 98.0 287 126.7 Technical Assistance QZ Q3 1.0 Q0 5 _ 0.8 0 0.2 1.0 Subtotal 376.2 25. 63t5 411.1 261.5 672.6 389.1 222.1 611.2 Physical Contingencies 37.0 24.3 613 - - - - - Price Contingencies 23.2 5 1 74.3 _ - _ - Total 436.4 3307 767.1 411.1 261.5 672.6 I/ 3891 222.1 611-.2 1/ I/ Physical and price contingencies included. B - PROJECr FINANCING Source Planned Revised Final Comments US$ million CFR NET Resources 186.7 200.0 179.6 Regarding co-financing proposed State Resources_/ 455.4 347.6 306.8 by the Bank, Romania was IBRD's Loan 3/ 125.0 125.0 124.8 considered capable of financing the balance of Foreign exchange Total 767.1 672.6 611.2 costs, as well as, local costs. 2/ State Resources Include interest-free State Budget Allocations, interest bearing State Credits and differences between Bank estimated costs of imported items (both direct and indirect) and catalog or contract prices charged to MTTC which are otherwise absorbed by the State pricing mechanisms. 3/ Include Technical Assistance of 15 million Lei (US$ 1.0 million) to be financed in full from the Bank loan. Februarv 1991 Source: Supervision Reports and Staff Appraisal Report  .26- Page 1 of 4 Iable 6 PROJECT RESULTS A - =NQyQMIC BENEFITS I/ Beneft 1/ at Full Ooeraton Revised Estimates on Completion of Works when Estimated at Rail/Road Sections were Appraisal open to Traftc (in million Lei) RAI-L SgCTIONS 1. Now Unff 1.1 Babenl-Barbesti 140 285 II. Doublina gt LUi 2.1 llia-Arad 230 235 2.2 Faurei-Tanderel 100 103 11. New Lines and Doublina of Unes 3.1 ViDcele-R Vllcea and Rm Vilcea Podu Oft 450 455 IV. ElriGgWcat1on 4.1 Dej-Cluj-Simeria 220 224 4.2 Mintia-Arad 150 153 4.3 Faurel-Tanderel 70 74 llOAD SECTIg V. Paving of Two Lane Gravel Roads 5.1 Schitu Golesti-Curtea de Arges 35 37 5.2 CrakNa-Balcesti 18 16 5.3 Podul Turculul-Birlad 25 21 VI. Widenina of Two-to-Four Lanes 6.1 Brasov-Harman 10 10 Vil. First Two Lanes of Eyentual Four EMes 7.1 Fetestl-Cemavoda 180 172 VIII. Combined Rail/Road Bridoe 8.1 Danube Bridges 350 355 1/ Include savings in operational costs, maintenance costs and passenger travel time on two highly congested highway, sections, namely Brasov-Harman and Fetesti-Cemavoda (see Annex 2). The benefit estimates are subject to a margin of error considerably larger than Is normally the case; see footnote to Annex 2A. March 1991 Source: Mission Estimates  -27 Page 2 of 4 Table PROJECT RESULTS B - ECONOMIC RATE OF RETUBNB (ER) Project Appraisal Revaluated at Component Estimate Prolect Completion (most Probable ER %,- Sc.1 1/ Sc.2 2/ RAILWAYS I. Now line 1.1 Barbeni-Barbesti 13 13 15 II. Doubilna -of Lines 2.1 IIla-Arad 40 23 25 2.2 Faurel-Tanderel 70 43 44 III. New U Rne and Doublno of Line 3.1 Vilcele-Rm Vilcea & Rm Vlcea-Podul 22 15 17 -V. Electrifcato-n 4.1 De-CluJ- Simerda 21 18 19 4.2 Mintla - Arad 20 20 22 4.3 FaureiTanderel 24 1 18 Sub-Total 24 / 17 / 19a/ RC2AD SECTIONS V. Paving of Two Lane Gravel Roads 5.1 Schitu Golesti-Curtea de Arges 13 12 5.2 Cralova - ialcesti 19 18 5.3 Podul Turculul - Biriad 17 14 VI. Widening from Two-to-Four Lane 8.1 Brasov - Harman 23 16 ViI. First Two Lanes of Eventual Four 7.1 Fetesti - Cemavoda 1 10 Sub-Total 15a/ 12 X/ VilI. Combined Rail/Road Bridae 8.1 Danube Bridges 14 13 Grand Totai 20a/ 15a/ 16i/ jf Sc.1 - Scenario I assumes that the raiwNay traflic will continue to decline In the 1990s and will drop to about 40% of the 1989 peak level by 2000 A.D. 2/ Sc.2 Scenario 2 assumes that the railway traffic, after 1990 s actual drop, will recover modestly to the extent of about 2% per annum during the 1990s. X/ Weighted Average. NgWt: These ER estimates are subject to a margin of error, or uncertainty, considerably larger than is normally the case because of inadequate traffic information; see footnote 1 to Table 6A, and footnote to Annex 2A. Source: Mission Estimates, March 1991 and Staff Appraisal Report  - 28 - Page 3 of 4 Table 6: PROJECT RESULTS C - FINANCIAL IMPACT - ROMANIAN RAILWAYS (CFRI Operating Ratio 1/_ Return on Net Fixed Assets Appraisal Appraisal Year Estimate Actual_/ Estimate Actual_/ 1981 88 93 3.3 2.2 1982 88 97 3.3 1.3 1983 87 97 3.3 1.8 1984 88 98 3.3 2.2 1985 88 97 3.2 2.7 1/ Operating expenses (including track overhaul expenses) divided by operating revenues. 2/ Based on audited financial statements - details are given in Annex 3, 4 and 5. D - PROJECT STUDY Typo of Purpose as Defined Impact of Study at Appraisal Status Study Traffic Optimization To establish an The study was delayed Study results were not Study appropriate basis for and was completed by satisfactorily applied to developing a policy the middle of 1987. The the transport sector. frame work for the quality of the study was Motor fuel was strictly economic development satisfactory. rationed and of the transport sector regulations/restricions and for the efficient were imposed to curb utilization and co- motor fuel oil ordination of transport consumption. facilities. To be Consequently, present completed by the end of traffic split remains 1983. highly skewed in favor of rail transport.  -29- Page 4 of 4 Table : PROJECT RESULTS E - RAINING PROGRAM Purpose as Defined at Appraisal Status Remarks 30 man-months of The Loan Agreement envisaged that necessary arrangements for the technical assistance for training would be finalized by the Borrowver In Consultation with the the methodological Bank by June 30, 1992. After a delay of about 3-4 years, the Even within this aspect of the traffic Borrower carried out a limited training program as shown below. limited program, optionalization study training on referred in Part D SUNieQj Countr No.of Men days Man-dav execution of railway above and for 1. Railway traffic safety France 2 7 14 tunnel by improvements In car 2. Optimization study mechanical control, locomotive methodology USA 3 24 72 methods was utilization and highway 3. Tech. and comm. aspect agreed, but was maintenance practices. of running goods France/ 3 15 45 ultimately train. Canada cancelled. 4. Traffic Management Sweden/ 2 15 W. Germany _ _~~~~~~~ March 1991 Source: Supervision Reports  .30- TIll: STATUS OF COVENANTS Loan Agreement Desoripion Status Reference 3.04(a) and (b) Traffic optimization study to be oompleted Study completed by mid-1985 and by Dec. 31, 1984. the final report received in the Bank In August 1985. 3.04(c) Technical Asssance focusing on the Arrangements for the training training program lncluding Improvements In program suffered a delay of three car contro, locomotive utlizon, highway to four years. A limited training maintenanoe etc. program proposed and agreed with the Bank was completed by September 1987 except the training for tunnelling. 4.01 (b) Overhaul of 600 km of heavily used track. Work on these lines were completed with some adjustments In the time schedule (see Table.3) 4.01(c) Parallel development of mining and power Complied with. The Babeni-Barbesti sectors In BabeniBarbesti corridor. new line was completed by the end of 1988 and placed progressively in operation. During 1987, the line was carrying about 7 million tons of coal to thermal power stations. 4.01(d) Improvement of the Bucharest-Fetesti Complied with. highway contemporaneously with the construction of the Fetest-Cemavoda road. 4.01(e) Measures needed for carrying out of the Complied with. projt lndudir. prompt acquWon of land, rights and interest In respect of land. 4.01(fl Provsion of a suitable number of heavy-duty The Romanians bought 4 heavy- track maintenance machines, and about 80 duty machines from Plasser and pieces of traffic counting equipment by manufactured several heavy-duty 1985. machines under Plassers license in 1985 and 1986. For the highway component the Romanians bought about 190 units of loop traffic counting equipment in 1985/86. 6.02(fl and (g) Finandal staements and audied reports to Complied with. be submtted wihin siX months of the end of the fcal year. 6.020) Project Completion Report Complied with. Enbruary lJ91 Source: Supervision Reports  -31 - Page 1 of 2 TbIl: STAFF INPUTS A - BANK MINQIONS Stage of Month/ No. of No. of Staff Weeks Date Prolect Cycle Year Staff Weeks In Field of Report Identffication March/79 4 2 8 March 30,1979 Preparation September/79 3 2 6 October 3, 1979 Pr2-appraisal March/80 5 3 15 April 24, 1980 Appraisai September/80 6 4 24 November 11, 1980 Post-Appraisal March/81 4 2 j April 16, 1981 Sub-Total 61 Supervsion 1. September/81 3 2 6 October23, 1981 2. March/82 2 2 4 Aprl 16, 192 3. June/82 3 2 6 June 29, 1982 4. September/82 3 2 6 October 18, 1982 5. March/83 1 2 2 April 11, 1983 6. September/83 2 2 4 September 30, 1983 7. September/84 2 2 4 October 18, 1984 8. March/85 2 2 4 Mwch 29,1985 9. September/85 3 2 6 October 23, 1985 10. April/86 1 1 1 May 16. 1986 11. August/87 2 1 .2 September 21, 1987 Sub-Total 45 Grand Total 106 ELbruary Id9 Source: Supervision Repofs  -32 Page 2 of 2 Iable : STAFF INPUTS B - AT HEADQUARB Stage of Month/ No. of No. of Staff Weeks Project Cycle Year Staff Weeks at Headquarters Preparation/ August - October 1979 3 4 12 Pre-appraisal February- April 1980 5 7 35 Appraisal August - October 1980 6 8 48 Post Appraisal March '81 4 1 4 Loan Negotiation May'81 A Sub-Total 109 Supervision FY '82 3 5 15 - do - FY '83 2 7 14 - do - FY'84 2 5 10 - do- FY'85 2 2 4 - do- FY'86 2 6 12 -do- FY'87 1 3 3 -do- FY'88 2 1 2 Completion Report FY '90 1 3 3 - do- FY'91 2 4 _ Sub-Total 71 Grand Total 180 April 1991 Source: Bank-s MIS  -33- Annex 1 UST OF EOUIPMENT PROCURED UNDER THE PROJECT Amount j/ Item Quantf fUS mDihion) Ralhvav 1. Rails 21,060 tons 9.85 2. Copper Contact-wire for electrification 1,287 tons 3.64 3. Cables for Telecom, Signalling for electrification, new lines and doubling 2,060 km 13.37 4. Speclal Steel for Danube bridge 20,510 tons 8.19 5. Sub-station equipment 357 pcs 4.54 6. Points and Crossings 291 no 9.41 7. Track fittings 8,850 tons 6.08 8. Equipment for remote control on electrification 162 pcs 0.65 9. Equipment for telephone and radio communications 1,478 pcs 7.69 10. High tensile steel for reinforcement for concrete sleepers 4,000 tons 3.00 11. Railway freight cars 830 no 27.47 Sub-Total 93.89 (say 94.00) Hbhg 1. Excavators (0.5 cm) 9 no 0.47 2. Bulldozers (180 hp) 8 no 0.83 3. Rollers (10-12 t) 26 no 0.63 4. Motorgraders (180 hp) 10 no 0.85 5. Concrete Batch Plant 2 no 0.30 6. Mobile crane (120 hp) 9 no 0.69 7. Loaders (180 hp) 11 no 0.58 8. Dump Trucks (16.5 t) 90 no 4.50 9. Bitumen 15,000 tons 2.70 10. Steel 44,000 tons 18.82 Sub-Total 30.37 (say 30) 1/ Commited at exchange rate of January 1, 1983. February 1991 Source: Supervision Report October 1985  - 34 - Annex 2 Page 1 of 3 IBhEEl/IBFND A - COMPARISON OF ACTUAL AND FORECAST OF TRAFFIC ON PROJECT SECTIONS Traffic (Gross t,on km In millions) Railway Length 1980 - 1985- Lines of Route (km) (Actual) Appraisai Revised Estimate Estimate jj 1. Del - Cluj - Simeria 236 7812 8594 9080 2. lIla - Arad 125 2920 4892 5189 (doubling of Ilia - Blrzava . 64 km) 3. MInta - Arad 142 3317 5558 5873 (ElecStificatlon) 4. Faurel - Fetesti 89 2625 2941 3107 (Doubling of Faurei - Tanderel 20 km and eletrification of Faurel - Fetesti 89 km) 5. RmViicea- Podul Ont 40 636 785 829 (doubling) Road Length Daily Traffic (Number of Motor Vehicles) Sections of Route (kmn) 1980- - 19 Actual Aporaisal Est. Revised Est. 1/ Trucks Others Total Trucks Others Total Trucks Others Total 1. Adjud (Podul TurculuQ) - Birad 29 o 800 - 575 2. Cralova-Balcest 40 320 480 800 440 660 1,100 350 450 800 3. Brasov-Harman 6 4,800 3,200 8,000 6,720 4,480 11,200 5,040 3,360 8,400 4. FetestCernavoda 17 8,000 3,700 11,700 6,000 2,775 8,775 1/ These are crude traffic estimates based on nework totals for 1985. It would, of course, have been far preferable to have had actual and up-todate trafc data for Individual rail and road links, In particular for the four links which were expected to register very high traffic Increases because of traffic diversion. The Bank has repeatedly asked the Romanian authorities to provide this information as well as the corresponding data for the links from which traffic was to be diverted. But, to no avail. The resulting ER estimates, though the best available, are therefore subject to a margin of error, or uncertainty, coneiderably larger than is normally the case, i.e. when actual and up-to-date traffic data are available. March 191b  - .5 - Page 2 of 3 B - MODAL TRAFFC TRENDS (1981.85) - COMPARISON OF APPRAISAL ESTMATES WITH ACTUAL Freiaht IVoum in bilL tonm) Passe VoL in blL Pass4kon Railway HlghA I/ Rhier Total Raiway Highway 11 Total A.E ?( Acual A. E. 2 Actual A. E. / Aual A E. /Aaual A. E. Aotuac A. E g Actual A. E. /Actual 1980 75.5 1981 69.9 75.2 11.5 11.8 3.2 2.4 84.6 89.4 23.6 24.4 24.8 24.7 48.4 49.1 (888) (84.1) (13.6) (13.2) (3.8) (2.7) (100.0) (100.0) (486) (49.7) (51.2) (50.3) (100Q (100.0) 1982 71.8 71.1 11.8 11.1 4.5 2.5 88.1 84.7 239 25.6 26.1 24.2 50.0 49.8 (81.5) (89) (134) 13.1) (5.1) (3.0) (100.0) (100.0) (47.8) (51.4) (522) (4&6) (100.0) (100.0 1983 73.8 72.3 12.1 8.3 17.2 2.4 103.1 83.0 24.2 27.6 27.4 21.4 51. 49.0 (71.7) (87.1) (11.7) (10.0) (1&6) (2.9) (I=Q) (100.0) (469 (58.3 (53.1) (43.7) (100.0) (100.0) 1984 76.0 75.2 12.6 7.3 19.0 2.5 107.6 85.0 24.5 288 28.7 22.5 53.2 51.3 (70.7) (88.4) (11.7) (6.6) (17.6) (3.0) (100.0) (100.0) (48.0) (561) (54.0) (439) (100.0) (100.0) 1985 78.4 74.2 13.3 7.5 21.0 2.8 112.7 84.5 24.9 31.1 30.0 21.7 54.9 52.8 (69.) (879) (11-8) (9) (1 (3.2) =ag) (O0.0) (45.4) (589 (54.6) (41-1) (100.0) (100.0) 1/ Rebat to Pubrlc Tramport only. 2/ A. E. indcates Appraisal Esimat Note: Fgures wtin parentsis idcate percentge distibution. Sourc - CFR and Supevsion MissioL  -36- Annex 2 Page 3 of 3 C - RECENT TRAFFIC TRENDS U M19 Freiahlt olume in bill. ton-km) Passenaers Nolume in bill. oass-km) Railway Highwayl/ River Total Railway Highwayl/ Totai (Actual) (Actual) 1989 81.1 5.7 3.5 90.3 35.4 23.1 58.5 (89.8) (6.3) (3.9) (100.0) (60.5) (39.5) (100-0) 1990 56.1 6.0 2.5 64.6 28.6 23.3 51.9 (86.8) (9.3) (3.9) (100.0) (55.1) (44.9) (100.0) 1/ Retes to Public Transport only. Figures wkhin parenthesis Indicate percentage distribution. 2/ Figures for 1990 are provisional. Source: CFR and MTTC  -37 - Annex 3 ROMANIAN RAILWAYS (CgR) - AUDITED FINANCIAL STATEMENTS INCOME STATEMENTS (Lel in million) 1981 1982 1983 1984 1985 Basic Appraisal Appraisai Appraisai Appraisal Appraisai Advitv Forecast Actual Forecast Actual Foe-m Forecast Actual Forecast Aaual O0eratina Revenues Passengers 4,134 4,327 4,170 4,650 4.211 5202 4,257 5,377 4,308 5,880 Freight 11.949 12.173 252 13354 1249 J 12 14.528 13.149 14.162 Sub-Total 16.083 16,500 16,422 18,004 16,709 19,228 17,065 19,905 17,457 20,042 Ooeratina Exoenses 14,214 15,417 14,393 17,371 14,530 18,585 14,707 19,469 14,906 19,3B8 Net Operating Income 1,869 1,083 2,029 633 2,179 643 2,358 436 2,551 654 Auxliary Activities Revenues 751 1,056 779 1,808 780 2.168 781 6,851 782 1,446 Expenses 471 6 3 422 4 9 8 t4 537_ 4 760 Net Auxillary Income 280 420 281 386 282 702 283 1,314 284 686 Total Net Income 2,149 1,503 2,310 1,019 2,461 1,345 2,641 1,750 2,835 1,340 Interest Charges 5 465 100 _/ 94 133 124 474 141 565 Net Income 2. 1.498 I 224 2.37 1.212 2.57 1.218 2.9 a Operating Ratio J 88 93 88 97 87 97 86 98 86 97 Return on net fixed assets 3.3 2.2 3.3 1.3 3.3 1.8 3.3 2.2 3.2 2.7 1/ Including track overhaul expenses. In Romania, capital overhaul of track normally capitalzed, is charged to operations. Audited financial statements supplied by the Romanian authorities accordingly incdude capital overhaul of track with operations and no separate figures for capital overhaul of track were available. To enable valid comnparison appraisal, forecasts have been adjusted accordingly on the basis of the detailed figures given in Table 36 of the SAR. The relative picture remains unaffected because exdusion of capital overhaul of track improves operating ratios and return on net fixed assets by about 7-8% and 0.4-0.5% respectively for both *appraisar forecasts and *actuals. 2/ Mission estimates. Februarv 1991 Source: Romanian Railways  - 38 - ROMANIAN RAILWAYS ( -R . AUDITED FNAtANCAL STATEMENTS - CASH FLOWS Annex 4 1981 1982 1983 1984 in Apprasa Appraial AppraiaA Appna - Es6tm Acual Emate Actal Estimate Aual Esimate Actual Esfimate Actual (Lei miMon) SOURCES OF IUNDS Cash avbbl fom ravav"s ad 1. Total not Inm (benft 2,149 1,298 2,310 890 2,461 1,12 2,41 1,277 2, 8 1 2. Depcato (basic activ" 2117 2,153 2,211) 2,304 2,426 2,573) 3. Depredation (oa assets) 124 129 127) 2,401 131 2,534 134 2,812 137) 2.819 4. Ot sc es (seap sales, OM) la in In 197 10 228 117 125 149 5. Sub-Totl hntemal funids 4,480 3,758 4,738 3,488 4,996 3,974 5,318 4,346 5,670 4,573 Stale AlocadonCrd 6. N _neaag . . . . . 7. RepayaNe w^^** xnwnyst 3,123 1,521 1,754 1,411 2,132 2,345 3,471 3,719 3.924 3.478 EL Repayblge wh knrest 61 767 45 t.Q02 la 509 6 419 736 147 9. Sub-Total state aloations/credits 3,184 2,288 1,799 2,433 2,191 2,854 3,537 4,138 4,660 3,625 Egernal E 10. Pfoposed I8RD Loan 90 570 669 480 838 150 151 90 - 11. OOwl k: 12. Sub4ot exwnaoloans Q 80 150 151 13. Tot resource avlable 7,154 6,046 7,105 6,590 7,667 7,668 9,005 8,635 10,420 8,198 APPIUCATIONS OF FUNDS Fowed Asse s 14. Addkons to fixed ats In use 6,419 6,617 5.192) 6,098 6,648 6e342 8,062 6,974 9,815) 7,143 15. Increase (decrase) in wokn-rogrpess 3Z (1.064) 3 _ 24 22 413 16 Subo40t capital vestrmnt 6,746 5,553 5,517 6,098 6,892 8,342 8,084 6,974 9,402 7.143 DebtService 17. Interestpamsn 5 10 46) 227 94 263 124 422 141) 710 1& RpaymenofprincOpal ;