Turkey - Power System Operations Assistance Project

Docmment of The World Bank FOR OFCIAL USE ONLY Report No. 13684 PROJECT COMPLETION REPORT TURKEY POWER SYSTEK OPERATIONS ASSISTANCE PROJECT (LOAN 2602-TU) NOVEMBER 4, 1994 Industry, Trade and Finance Operations Division Country Department I Europe & Central Asia Region This document has a restricted distribution and may be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EOUIVALENTS Currency Unit - Lira (TL) At Appraisal (January 1985): US$1 - TL 450 TL 1000 - US$2.22 June 1994: US$1 - TL 29,500 TL 1000 - US$0.034 WEIGHTS AND MEASURES kW - kilowatt MW - 1,000 kW kWh - kilowatt hour GWh (Gigawatt hour) - 1,000,000 kWh kV (kilovolt) - 1,000 volts One meter (m) - 3.28 feet One kilometer (km) - 0.624 miles One kilogram (kg) (1,000 grams) - 2.2 pounds One ton (metric ton) (1,000 kg) - 2,205 pounds One kilocalorie (kcal) (1,000 calories) - 3,968 BTU Cumecs (m3/second) - 35.31 cubic feet per second m: \ss\currency  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation Novmber 4, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Turkey Power Systems Operations Assistance Proiect (Loan 2602-TU) Attached is the Project Completion Report on Turkey - Power Systems Operations Assistance Project (Loan 2602-TU) prepared by the Europe and Central Asia Region. The Borrower contributed Part II of the PCR. The project objectives were partially met: reliability,.ailability and efficiency of five power generating plants were improved; reduction of transmission and distribution losses fell short of targets; the management and technical capability of the Turkish Electricity Authority, TEK, was not increased since the corresponding training program was never implemented; and control of the peak power demand was not achieved because the project did not include any component for demand side management. The project implementation had a slow start due to a lack of commitment by TEK which resulted in a very low level of loan disbursement -- only 17% of the US$140 million loan was disbursed in four years. Without changing the project objectives and as a remedy to accelerate loan disbursement, procurement of power transformers and transmission equipment costing about US$42 million originally included in the loan 3345-TU (TEK Restructuring Project), was financed by the loan. At the same time, some of the project components were canceled. The Bank loan was closed three years later than originally planned and US$24.5 million was canceled in December 1993. The PCR could not establish the final project cost, but estimated that the rate of return of the TEK investment program is about 6%. The project outcome is rated as marginally unsatisfactory and its institutional development impact as negligible. Since the Government has now split TEK into separate generation/transmission and distribution companies, the project sustainability is rated as uncertain because it will depend on the commercial performance of the new companies. The PCR contains a satisfactory account of the project implementation and results. No audit is planned. Attachment 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 TURKEY POWER SYSTEM OPERATIONS ASSISTANCE PROJECT (LOAN 2602-TU) PROJECT COMPLETION REPORT TABLE OF CONTENTS Eaae Noe, PREFACE ......................................................... i EVALUATION SUMMARY ...............................................ii Part I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity .. 1 2. Background ................................................... 1 3. Project Objectives and Description .. 1 4. Project Design and Organization .. 2 5. Project Implementation .. 3 6. Project Results .. 4 7. Bank Performance .. 5 8. Performance of the Borrower and Guarantor .. . 5 9. Consulting Services .. 6 10. Findings and Lessons .. 6 Part II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 1. General ...................................................... 7 2. Bank's Performance .. 7 3. Project Results .. 7 4. Financial Performance .. 8 5. Procurement .. 8 6. Consultant Services ..8..................... 7. Rehabilitation and Training .. 8 Part III: STATISTICAL INFORMATION 1. Related Bank Loans and Grant ................................. 10 2. Project Timetable ........................ 11 3. Loan Disbursements ....................... 11 4. Project Implementation .................................... 11 5. Project Costs and Financing .................................. 12 6. Project Results ......................... 13 7. Status of Covenants ....................... 16 8. Use of Bank Resources ................................... . 17 This document has a rstricted distribution and may be used by recipients only in the perfoanca of their official duties. Its contents may not otherwise be disclosed without World Bank authorizaon.  I  i TURKEY POWER SYSTEM OPERATIONS ASSISTANCE PROJECT (LOAN 2602-TU) PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the Power System Operations Assistance Project in Turkey, for which Loan 2602-TU in the amount of US$140.0 million was approved on July 2, 1985. The loan was closed on December 31, 1993, three years behind the original schedule. Total disbursements reached $115.5 million, with $24.5 million in loan cancellations. The PCR was prepared by the Industry Trade & Finance Division, Country Department I of the Europe & Central Asia Region (Preface, Evaluation Summary, Parts I and III). Part II of the PCR was prepared by the Borrower (Turkish Electricity Authority - TEK). Preparation of this PCR is based, inter alia, on the Staff Appraisal Report; the President's Report; the Loan and Guarantee Agreements; supervision reports; project progress reports; correspondence between the Bank and the Borrower; and internal Bank memoranda.   ii TURKEY POWER SYSTEM OPERATIONS ASSISTANCE PROJECT {LOAN 2602-TU) PROJECT COMPLETION REPORT EVALUATION SUMMARY Introduction 1. A loan of US$140 million was made to the Turkish Electricity Authority (TEK) in 1985 with the objective of improving operational efficiency. The project was the seventeenth Bank group operation in Turkey's power subsector, and was a continuation of the Bank's assistance, started in 1952, for developing the subsector and for increasing utilization of indigenous resources. The loan was guaranteed by the Republic of Turkey. Obiectives 2. The project had five main objectives: (i) to improve the availability and efficiency of TEK's power generation facilities; (ii) to improve the reliability of the transmission and distribution systems; (iii) to improve availability of transmission and distribution facilities by prompt response intervention to restore service in case of outages, and by the introduction of hot-line maintenance and outage prevention techniques; (iv) to reduce power system losses by the judicious application of reactive power compensating equipment; and (v) to help control peak power demand by means of peak-shaving techniquee. Implementation ExDerience 3. Project implementation proceeded more slowly than originally planned. Through the first four years of a five year project, disbursements stood at only 17% of planned disbursements. 4. After the closing date was already postponed once, it was realized that a large proportion of the loan would remain unutilized because the implementation time for items not yet procured would exceed three years. This was addressed by financing certain components, the most important being the Tuncbilik power plant rehabilitation, with the TEK Restructuring Loan and by transferring to this loan specific projects from the TEK Restructuring Loan for which procurement was more advanced. Final loan disbursements reached $115.5 million by April 30, 1994, after several postponements of the closing date totalling 3 years. Loan cancellations will total $24.5 million. 5. There were several reasons for the delay. Frequent changes in TEK's operational management resulted in lack of continuity and commitment for the Project Implementation and Performance Monitoring Unit. As was the case with other loans to TEK, there was pressure on TEK's capital resources to give  iii priority to new investments over the rehabilitation program financed with this loan. Moreover, slow project implementation was also caused by changes in project scope and the lack of clear relationship between project objectives and the investment program to be implemented under the project as well as by the borrower's lack of commitment towards the realization of project objectives. 6. TEK and the Government did not display the hoped for commitment to the institutional aspects of the project. Apart from a pilot program of O&M training, the training component was never implemented. Results 7. Because of the significant delay in loan disbursements and the subsequent transfer of procurement packages and work contracts between this loan and 3345-TU, TEK Restructuring Loan, the project did not follow the original financing plan. However, special equipment and special vehicles which supported the objective of improved operational efficiency were acquired. In addition, needed investments to the transmission network, planned for other Bank operations, were successfully completed under this loan. 8. The financial performance of TEK and its ability to function as a viable economic organization were major concerns. Financial management continued to be poor, and financial targets were not met. The major factors affecting TEK's financial performance were inadequate tariff adjustments, increased investments in generation plants due to non-realization of BOT schemes, and accelerating inflation and devaluation of the Turkish Lira against major currencies. 9. At project appraisal, the financial rate of return (FRR), for TEK's investment program as a whole, was estimated at 11.2%. An analysis of TEK's overall performance data for the project time frame reveals a more likely rate of return of 6.2%, considerably less than originally forecast. It should be noted that the estimates of the FRR are a measure of the financial return on TEK's overall investments, and it would be very difficult to obtain separate FRR estimates attributed to this project alone. Sustainability 10. The question of sustainability is difficult to answer mainly because the Government has now split TEK into separate generation/transmission and distribution companies with the aim of comnercialization/privatization. Thus, the original objective of upgrading the efficiency of TEK operations now must be continued by each of the new subsidiary organizations. During the life of the project, some improvement was achieved relative to the operational performance goals.  iv Findings and Lessons 11. The Bank should strive to maintain some level of staff continuity from appraisal into initial supervision. None of the staff that appraised the project participated in any of the subsequent supervision missions. 12. The lessons to be learned from this lending operation are that project implementation and institution building efforts will not be successful unless the Borrower takes charge and there is a firm and continuing commitment on the part of both the Borrower and the Government to the agreed goals. The Bank's role in the implementation phase of projects needs to be re-examined and more emphasis put on supervision missions to be pro-active and utilize the various leverages that are at their disposal to ensure that projects are on schedule and obligations fulfilled appropriately.   PROJECT COMPLETION REPORT TURKEY POWER SYSTEM OPERATIONS ASSISTANCE PROJECT (LOAN 2602-TU) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Proiect Identity Project Name Power System Operations Assistance Project Loan No. 2602-TU RVP Unit Europe & Central Asia Region Country Turkey Sector Energy Subsector Power Borrower Turkish Electricity Authority (TEK) Guarantor Republic of Turkey 2. Backaround 2.01 In every year from 1971 through Project Appraisal in 1985, domestic electricity supply was insufficient to meet demand, resulting in high costs to the economy, as imports increased and supply interruptions became more frequent. During the Five Year Plan of 1985-89, priority was to be given to domestic sources of energy, especially hydro and lignite, in the country's generation expansion program.One alternative to the construction of new capital facilities is to improve the reliability and efficiency of existing facilities. As the Power System Operations Assistance Project was being formulated, a key recommendation emerged, namely, that the GOT should accord the highest priority to upgrading and improving the efficiency with which existing facilities in the energy sector are currently utilized. 2.02 The salient feature of the Turkish electricity system is that the largest load centers are located at considerable distances from the main indigenous energy resources of hydro and lignite. As a result, TEK has also had to pay special attention to the development and construction of a high-voltage transmission grid. Concurrent with the preparation of this loan was the preparation of Loan 2586-TU, Fourth TEK Transmission Project. That project constituted the fourth phase of development of TEK's 380-kV transmission network and planned for the construction of 800 km of interconnecting high voltage transmission lines. 3. Prolect Oblectives and DescriDtion 3.01 As a result of the key recommendation to concentrate on operational efficiency, the five main project objectives were operational in nature tos (i) improve the availability and efficiency of TEK's power generation facilities; (ii) improve the reliability of the transmission and distribution systems; (iii) improve availability of transmission and distribution facilities by prompt response intervention to restore service in case of outages, and by the  introduction of hot-line maintenance and outage prevention techniques; (iv) reduce power system losses by the judicious application of reactive power compensating equipment; and (v) help control peak power demand by means of peak- shaving techniques. 3.02 The project was to be implemented over five years from 1986-1990 and essentially had three major components: (a) provision of tools and equipment for rehabilitation and spare parts; (b) analysis of possible operating efficiencies, feasibility study of a second combined cycle power plant in Thrace, and operational training; and (c) conversion of the 630 MW Anbarli steam power station near Istanbul from fuel oil to dual fuel firing (fuel oil and natural gas). 3.03 The total project cost was estimated at $162.0 million. Of this amount, $140.0 million was in foreign exchange, and the proposed Bank loan of $140.0 million would finance the full foreign exchange cost. The local cost equivalent of $22.0 million was to come from TEK's internal cash generation and the Government's contribution to TEK. Cofinancing was not considered feasible because of the nature of the goods and services to be procured. 4. Proiect Desian and Oraanization 4.01 Design. The project was designed around the concept that efficiencies could be realized from existing facilities. Rehabilitation projects are frequently not received with the same enthusiasm as are new capital works projects, even though the concept is sound. In many respects, investing in rehabilitation and efficiency projects can be more cost-effective than an investment in new facilities. The project as designed envisioned that there would be a marked improvement in operating efficiency. For example, increasing the power factor at the 35-kV level to 0.95 from its then low level of 0.80 would release about 300 MW of generation capacity under then existing system condition. This is significant in a sector where annual demand growth has averaged 9% for a 20-year period. 4.02 Organization. As implementing agency for the project, TEK planned to use its own labor forces for installation and rehabilitation work. Overall coordination would rest with the Project Implementation and Performance Monitoring Unit (PIPMU), the creation of which was a condition of the loan's effectiveness. This unit would report to TEK's Assistant General Manager for Operations and would monitor the operational performance of the different components of TEK's power system according to agreed performance goals. 4.03 The PIPMU would receive technical assistance from ELTEM-TEK, a local engineering consulting firm and a TEK subsidiary. The use of ELTEM-TEK was consistent with the condition of effectiveness specified in Article 7.01 of the  -3- Loan Agreement, namely, that engineering consultants must be engaged. ELTEM-TEK was functioning in a similar capacity on other Bank loans in the power sector, and this arrangement had proved satisfactory to both TEK and the Bank. 4.04 Procurement. The equipment and materials required for the project were initially grouped into fourteen contract packages. The proposed procurement schedule called for completion of tender documents for ten of the packages by the end of September 1985 and the contracts to be awarded for these same packages by end of July 1986. 4.05 Training. Training was an important project component and critical to the goal of improving operational efficiency. There were to be three interrelated training activities: (a) overseas training of experienced engineers in specific operational and maintenance techniques; (b) on-the-job training of experienced technicians; and (c) overseas and in-country training of transmission and distribution maintenance crews in hot-line work. The project provided for an estimated 100 man-years of overseas training in addition to the hot-line training for maintenance crews. 5. Project Implementation 5.01 Implementation of the project proceeded more slowly than expected at appraisal. Through the first four years of the project, disbursements were only 17% of planned disbursements. After three extensions of the loan closing date, the loan was closed on December 31, 1993, three years behind schedule. Total disbursements under the loan reached $115.5 million on April 30, 1994, or 83% of the original commitment. Loan cancellation amounts totalled $24.5 million. 5.02 The PIPMU did not function as originally planned. Although loan effectiveness was only delayed one month until the PIPMU was established, TEK was slow in effectively staffing the unit so that the project was behind schedule from the beginning. After an initial disbursement of $8.0 million in FY86, there were no further disbursements until FY88, and only $5.5 million were disbursed in FY89. 5.03 The procurement plan prepared at Appraisal envisioned that the tender documents for ten contract packages would be prepared in 1985 and would be approved by the Bank prior to year-end 1985. In reality, only one package was sent to the Bank for approval in 1985. There were three substantive exchanges on the bid documents before the Bank's no objection was given, some 10 months after the package was initially submitted. On two occasions TEK delayed its response to the Bank's comments for three months. The lengthy process for approving the first package appears to have been an anomaly, because the average time for approval of the other major packages was 1-3 months. 5.04 As the schedule slipped, as components such as the Anbarli conversion were cancelled, and as disbursements lagged, this loan was reviewed in the overall context of TEK investments rather than as a stand alone operation. As a result, it was agreed in September 1990 to allocate about $42.0 million of this loan for other transmission projects. In 1992, it was further agreed to transfer  - 4 - some $22 million in specific contracts and the loan agreement was amended accordingly. Principally, contracts for power transformer equipment, from loan 3345-TU, TEK Restructuring, were transferred to this loan because the procurement process of these contracts were more advanced than that of the originally planned investments, and could thus be completed within the final closing date. These transfers and reallocations can be construed to meet the intent of the loan which was to improve the reliability of TEK's transmission and distribution network. 5.05 In most Bank projects in Turkey, institutional strengthening or training is an important component. This project provided for an estimated 100 man-years of overseas training in addition to the hot-line training for maintenance crews. With the exception of on-the-job training and a pilot O&M training program at Seyit6mer, it can be said that the training program was never implemented. 6. Project Results 6.01 Although the loan was closed three years behind schedule, the project was incomplete in its execution, at least when compared to the original project plan. While it is normal for projects to undergo corrective changes during implementation, this project seemed to lack direction and focus. On the positive side, the transfer of procurement packages or works components between this loan and the TEK Restructuring Project resulted in important improvements to TEK's transmission network. Some of the studies and rehabilitation work were completed, and specialized vehicles and equipment were procured. 6.02 The institutional objectives of the project were not achieved. Although some training did occur, the comprehensive training program designed to increase TEK's technical and managerial capability was never implemented. 6.03 The financial performance of TEK and its ability to function as a viable economic organization were major concerns. Financial management of the operation continued to be poor. Although accounts receivable collection was improved, the progress was really minimal and targets were not met. The target ratio 1.0 for current assets to current liabilities was not met during the life of the loan. TEK was unable to produce funds from internal sources equal to 35% of the average incurred capital expenditures during the life of the loan. Inadequate tariff adjustments coupled with the accelerating inflation and devaluation of the Turkish Lira against major currencies placed TEK in financial distress and non- compliance with financial covenants (1986-91). Consequently, the estimated 6.2% rate of return on the (1986-91) time-slice of the power system's investment program of which the project was a part falls short of the 11.2% rate of return estimated at appraisal. Further, the audit reports on TEK's accounts, which, since 1988, have been carried out by a private auditor of international repute (Price Waterhouse) revealed major flaws in TEK's accounts, and the auditors declined to issue an opinion on them. 6.04 However, under the TRP (June 13, 1991) it was agreed to maintain net average tariffs in real terms at US$0.06 per Kwh net of taxes, to be adjusted periodically (monthly as was the case through December 1993). These modifications along with other measures such as lower investment, improved financial management  and recapitalization of TEK (all of which had a time lag), not only prevented TEK's financial collapse but also permitted compliance with the financial covenants in 1993. 7. Bank Performance 7.01 Even though the Bank supervised the project on a routine basis and identified problems regularly, supervision by the Bank was benign. It was noted that the Borrower was not meeting the requirements or covenants related to project implementation. For example, no quarterly progress reports had yet been submitted through December 1987. 7.02 Although problems in project implementation and schedule slippage were regularly identified, no plan was developed to either get the project back on track or to restructure or cancel the loan. It was not until 1990 that loan reallocations were made to other specific components of TEK's overall investment plan. 7.03 Historically procurement slippage has been a problem on projects in Turkey. With the exception of the first contract package that consumed nine months in the approval process, most contract packages were approved in from one to three months from the time the bid documents were first submitted for review. 7.04 One deficiency on the part of the Bank was the lack of continuity of staff from Appraisal to Supervision. None of the staff who appraised the project participated in any of the supervision missions. As a result, the understandings achieved with the Borrower regarding the project concept and implementation plan were most likely lost, or certainly diminished. 8. Performance of the Borrower and Guarantor 8.01 TEK did not commit the resources to make the PIPMU a well functioning project implementation unit. PIPMU did have the benefit of its consultant ELTEM- TEK assisting with project implementation. However, even with this outside assistance, quarterly progress reports were not prepared until the third year of the project. 8.02 TEK and the Government did not display the hoped for commitment to the institutional aspects of the project. Training, which can have positive long term impacts on the organization's capabilities, was never implemented. 8.03 The financial condition of TEK and the entire power sector was adversely affected by electricity tariffs which did not reflect the economic cost of supply, nor fully cover the financial obligations. As a result, TEK was unable to meet the agreed financial performance targets until the end of project implementation. 8.04 Although tariffs are not fully in its direct control, TEK should have taken greater responsibility for those financial decisions that were within its purview, namely, implementation of financial action plans to address deficiencies  in accounts receivables and foreign debt service, and auditing of financial statements. 9. Consulting Services 9.01 The project plan called for a foreign consultant to undertake feasibility studies for rehabilitation of thermal power plants. A contract was not signed with the selected consultant, Southern Electric International (SEI), until May, 1988, three years into the project. In addition to the rehabilitation studies, SEI was to provide training. The services provided by SEI were satisfactory. 10. Findings and Lessons 10.01 The immediately apparent causes of the problems that beset the project may be summarized as follows: (i) failure to adhere to the project schedule; (ii) failure to make decisions that would augment project implementation and schedule; (iii) lack of commitment on the part of TEK's management to the technical assistance objectives of the project; (iv) lack of a strategy for the development and deployment of TEK's human resources, and for overcoming the problem of freeing TEK's middle managers from their day-to-day tasks to enable them to devote time to improving the structure and organization of their jobs. 10.02 The more fundamental reasons for these deficiencies, however, must be sought in TEK's lack of appropriately qualified top and middle managers with the ability and necessary energy and enthusiasm to define and take charge of the institutional efforts needed to improve the performance of TEK as a whole and of its administration and financial management in particular. This in turn may be attributed to TEK's lack of autonomy in establishing its personnel and financial strategies and, in particular, in recruiting and retaining qualified managers and staff on a competitive basis. It has since been recognized by the Turkish authorities that these problems cannot be overcome without partial or total transfer of TEK's activities to one or several corporations functioning independently from the Government and in accordance with normal commercial principles within a framework of parameters defined by an independent regulatory authority. Reforms in this direction have begun to be undertaken in 1993. 10.03 The lessons to be learned from this lending operation are that project implementation and institution building efforts will not be successful unless the borrower takes charge and there is a firm and continuing commitment on the part of both the borrower and the Government to the agreed goals. Borrowers and Governments often give undertakings when the fate of the loan seems to depend on such undertakings, only to lose interest once the project is underway. 10.04 The Bank would be well advised to consider loan cancellation or meaningful loan restructuring when a project experiences the delays and lack of progress that occurred with the Power System Operations Assistance Project.  PART II TURKEY POWER SYSTEMS OPERATIONS ASSISTANCE PROJECT (LOAN 2602-TUI PROJECT COMPLETION REPORT PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 1. General 1.01 Implementation of the project moved more slowly than originally planned. This was in part due to the fact that the beginning years of project implementation coincided with the period of successive general and municipal elections and the associated massive turnovers which were experienced in the management and staff of all governmental agencies as well as within TEK. These frequent changes had a major impact on the approval and implementation of the project packages and were the main factors causing delays. Additionally, the heavy burden of changing economic conditions also prevented TEK from acting as an independent entity to make its own decisions for investments and recruitment and even for utilization of internally generated funds. 1.02 Lack of staff continuity within TEK and the Bank itself hampered efficient coordination of project implementation. Creation of the Project Implementation and Performance Monitoring Unit (PIPMU) and the World Bank project group in 1991 improved and accelerated the coordination and implementation of the project. 2. Bank's Performance 2.01 During project appraisal errors were introduced in planning of project packages, and this can be considered as one of the reasons for implementation delays from a technical point of view. For example, some project packages, specifically ripple control equipment and modification of the electrostatic filters at thermal power plants (TPP), were not well defined and were not economic to implement given the actual state of the energy system and demand structure of the country. 2.02 TEK emphasizes that there is a need for a better understanding of the issues and problems prior to and during appraisal so that precise determination of the project package can be made. 3. Pro-ect Results 3.01 Although there were substantial changes in the project packages, the initial main objectives of the project, namely, the improvement and availability and efficiency of TEK's power generation and the reliability of the transmission and distribution systems, were not lost.  -8- 4. Financial Performance 4.01 The proposed targets for financial performance progressively became the main philosophy of the TEK Restructuring Project (LN. 3345-TU)even though the agreed upon financial covenants could not be met until 1993. However, the corporate planning introduced under that project has enabled TEK to fulfill its covenanted obligations. 5. Procurement 5.01 Delays in the procurement packages were caused by the preparation of the bidding documents which extended beyond the deadlines initially established. This was mainly due to (a) the broad range of equipment to be procured, and (b) the unavoidable and cumbersome bidding procedures which all public enterprises have to follow. TEK emphasizes that training of TEK staff by the Bank in regard to procurement procedures at certain intervals will prevent the delays in the bidding procedures and accelerate project implementation. 6. Consultant services 6.01 ELTEM-TEK performance was satisfactory and its assistance was valuable in its capacity as consultant in preparing bidding documents and quarterly progress reports. TEK wishes to express its desire to continue to employ ELTEM-TEK as consultant for future World Bank projects. 7. Rehabilitation and Training 7.01 The rehabilitation of Tuncbilek TPP project package was transferred to the TEK Restructuring Project (LN.3345-TU), and this work still continues. 7.02 Rehabilitation of thermal power plants and relevant training task was satisfactorily completed by SEI. 7.03 Conversion of Anbarli TPP fuel system to double fuel system was cancelled because it was found incompatible with TEK's energy production system within the supply-demand structure of Turkey's economy. Therefore, Anbarli TPP steam pipes package was eliminated from Loan 2602-TU. 7.04 Computer controlled material management system was established in Seyitomer TPP. After the procurement of computers for other TPP's using internal resources, the personnel of very plant have been trained in material management system concepts. Every power plant now applies a material management system to control its own stock. 7.05 A preventive maintenance software program was provided as an accessory to vibration analyzers for Yatagan, Tuncbilik, Soma, and Seyitomer TPP's, and personnel were trained in the use of the software program. A more detailed preventive maintenance program is being implemented in the scope of the OMIP project. 7.06 Mechanical maintenance, electric maintenance and measurement control training notes prepared for Seyitomer TPP are applicable for other plants and using those notes as training infrastructure was prepared by the Training Department.  - 9 - 7.07 Class notes and training schedules were prepared and implemented for operation procedures and operation of Seyitomer TPP. Personnel of other plants have been trained in procedure preparation, and class notes are available. Afterwards, every power plant prepared its own procedures under the coordination of the Training Department. 7.08 Also, TEK personnel have received training for each special equipment procured within the context of the loan.  - 10 - PART III: STATISTICAL INFORMATION 1. Related Bank Loans and Grant Title Purpose Year Status Comments T/A Grant Assistance in reorganizing 1967 Complete Turkey's power industry. 568-TU Keban 380-kV transmission lines. 1968 Complete PPAR issued Transmission Nov. 1981. 1194-TU TEK Construction of substations 1976 Completed in PCR issued Transmission II and transmission lines, as June 1984 Oct. 1984. well as training of TEK staff against Institu- in the design and operation estimated tional of the transmission system, date of objectives and tariff, manpower, and June 1979. partially power system studies. achieved. 2322-TU TEK Construction of 1,500 km 1983 Completed in PCR issued Transmission III of 380-kV transmission lines Sept. 1989 May 1990. to interconnect various power against Institu- stations to TEK's bulk supply estimated tional system; continue institution date of objectives building activities initiated Dec. 1986. only under previous Bank projects partially in the sector. achieved. 2586-TU TEK Construction of 800 km of 1985 Loan closed PCR issued Transmission IV 380-kV transmission lines and in Dec. 1991, June 1993. transformer substations to one year Institu- strengthen TEK's bulk power behind tionalob- system. Increase TEK's original jetive