Iraq - Telecommunications Project

C5 RETURN TO RESTRICTED REPORTS DESK Report No. PU-65a WITHIN ONE WEEK This report is for official use only by the Bank Group and specificafly authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsiblity for the accuracy or completeness of the report. INTERNATIONAL BANK POR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE FIRST TELECOMMUNICATIONS PROJECT IRAQ August 23, 1971 Public Utilities Projects Department CEJRRCY 1WJIVALNTS Currency Unit = Iraqi Dinar (I.D.) US$1.00 = I.D. 0.357 (357 Fils) US$1 million = I.D. 357,000 Iraqi Dinar 1 = US$2.8 I.D. 1 million = US$2.8 million I.D. 1 = 1,000 Fils MEASURES ]QUIVALENTS khz = kilohertz mhz = megahertz 1 Kilometer (km)= 0.621 statute mile FISCAL YEAR April to March 31 (e.g. FY 1970 lasts frcmn April 1, 1969 to March 31, 1970) LIST OF ABBREVIATTMNS, ACRONYMS AND DEFINITIONS USED IN THE REPORT Baud - Speed in bauds is the number of code elenents (pulses and spaces) per second Carrier - A systen of providing a number of circuits (channels) through one transmission mode (radio, cable or wire) Channel - One circuit of a carrier system carrying speech or telegraphic signals 00KSAT - Communications Satellite Corporation DEL - Direct exchange line (connected) Gentex - Telegraph exchange switching systen for use between public telegraph offices HF - High frequency radio 3,000-30,000 khz ITU - International Telecommunications Union LD - Long distance LDD - Long distance dialing Microwave - Radio systems working at frequencies above 300 mhz, but nonnally applied to systems working at frequencies above 1,000 mhz Multimetering - Method of charging long distance calls by means of repeated pulses recorded on the subscriber meter Multiplexing - Providing many telecommunications channels through one transmission mode OTD - Operator trunk dialing. Establishing long distance calls by the operator dialing the distant sub- scriber number - Posts, Telegraphs and Telephones Adninistration STD - Subscriber Trunk Dialing. Etablishing long distance calls by means of the subscriber dialing the distant subscriber number, directly without the intervention of operators Telex - Automatic teleprinter exchange providing direct exchange of messages between subscribers UHF - Ultra high frequency radio 300-3,000 mhz UNDP - United Nations Development Program VFT - Voice frequency telegraph, system of transmission of telegraphic signals. IRAQ POSTS, TELEGRAPHS AND TELEPHONES ADMINISTRATION (PT&T) APPRAISAL OF THE FIRST TELEOMUN ICATIONS PROJECT TABLE OF CONTENTS Page No. SJMMARY AND CONCLUSIONS ............................ i - ii 1. INTRODUCTION ............................................ 1 2. THE EONOMY AND THE SECTOR ................... . 2 A. Bconomic Setting ....oo................... o...... 2 B. The Telecomunications Sector ....................... 2 3. THE PROGRAM AND PROJECT ................................ 4 A. The Program . o o .................... .. . . . . . . . . . . . 4 B. The Project ......... ......**.*. ****..*.... . C. Costs ..........00 00 0. ........ 0 0........ .. 0. .... . . .. $00 D. Contingencies ................ E. Items Proposed for Bank Financing ................... 6 F. Procurement..................... 6 G. Execution of the Project ............................ 6 H. Disbursement . ............ ....... 7 4. JUSTIFICATION ................... . . ......... 8 5. THE BENEFICIARY ...................o................ o..... 11 A. Organization and Management ......................... 11 B. Management Consultants ............... .............. 11 C. Accounting and Audit .... 11 D. Staff and Training ................................ 12 6. FINANCE . 13 A. Financial Arrangements with Borrower ................ 13 B. Tariffs .................. .......................... 13 C. Past Financial Performance .......................... 14 D. Financing Plan ....................0............ 5 E. Future Finances ................................. 16 7. AGREE4ENTS REACHED DURING NEGOTIATIONS .................. 17 This Report is based on the findings of Bank missions to Iraq in October/ November 1970 and April 1971 consisting of Messrs. F. Gheith and M. F. Kohler and Messrs. M. F. Kohler and S. A. Sathar respectively. s LIST OF ANNEXES 1. Basic Statistical Data - March 31, 1970 2. Income Statements PT&T - 1968-1970 3. Balance Sieets PT&T - 1968-1970 4. Statements of Sources and Uses of Funds PT&T 1968-1970 5. Pro-Forma Income Statements - Telecomunications Operations 1968-1978 6. Pro-Forma Balance Sheets - Telecommunications Operations 1968-1978 7. Pro-Forma Statements of Sources and Uses of Funds - Telecommunications Operations 1968-1978 8. Representative Tariffs November 1, 1970 9. Terms of Reference for Management Consultants 10. Telecommunications Expansion Program 11. Estimated Schedule of Disbursements of Proposed IBRD Loan 12. Justification 13. Construction Schedules 14. Chart of Main Long Distance Network 15. International Sector Table MAP Iraq - Main Long Distance Network  IRAQ POSTS, TELEGRAPHS AND TELEPHONES ADMINISTRATION (PT&T) APPRAISAL OF THE FIRST TELECSOMMUNICATIONS PROJECT SUMMARY AND CONCLUSIONS i. This report covers the appraisal of a project forming part of Iraq's Five Year Telecommunications EKpansion Program. The cost of the program is estimated at ID 21.9 million (US$61.4 million). The project identified for Bank financing is estimated to cost ID 14.2 million (US$39.7 million) including a foreign currency cost of ID 9.8 million (US$27.5 million). The proposed Bank loan of US$27.5 million would cover the foreign costs. ii. Telecommunications facilities in Iraq are seriously deficient due to an almost complete lack of investment in the sector for the past ten years. There is a long waiting list of applicants for telephone con- nections and substantial demand for long distance calls which cannot be met. The project would meet part of the demand for local telephone con- nections by providing the cable network and associated facilities for about 100,000 direct exchange lines. It would establish, for the first time in Iraq, a long distance telephone service which would be both ade- quate and reliable, thereby alleviating congestion and delays. A micro- wave link 1,000 km in length connecting the main centers of economic activity would be the central feature of this service. It would also be used to transmit television programs, and links to six television stations form part of the project. International telephone, telegraph and telex services would also be improved by the installation of a satellite ground station permitting direct access to a high capacity and quality system in replacement of the present HF. systems which are inadequate in quality and capacity. The internal financial rate of return of the program is estimated at about T1%. iii. All equipment and materials to be financed by the Bank would be procured under international competitive bidding. iv. The borrower of the proposed loan would be the Government and the beneficiary will be the Posts, Telegraphs and Telephones Administra- tion (PT&T), which is responsible for all postal and telecommunications services in Iraq. PT&T has employed consultants (ARAC, Cairo/UAR) to review and recommend improvements in its administration, management organiza- tion and financial procedures. The consultants have tentatively recommended separate accounting systems for the postal and telecommunications ser- vices and will study the feasibility of dividing PT&T into two entities. The Government intends to use this study for consideration of the changes that may be necessary in the organization and procedures of PT&T. - 11~ - v. The operating results of PMkT's telecommunications services based on accounts which have been notionally separated from postal ser- vices are satisfactory. While the tariff levels are adequate some readjustments are desirable. The Government has formed a special com- mittee to study tariffs. This study is expected to be completed prior to the completion of the project. vi. The accounts outstanding from Government and its agencies to PT&T for its services are rather high as of March 1970. The Govern- ment has confirmed during negotiations that arrangements have been made to ensure the prompt payment of past and future accounts by all users of the telecommunications services provided through PT&T. vii. The project would be suitable for a Bank loan of US$27.5 million for a tern of 20 years, including a grace period of 5-1/2 years. IRAQ POSTS, TELEDRAPHS AND TELEPHONES AIlNISTRATION (PT&T) APPRAISAL OF THE FIRST TELECOMMUNICATIONS PROJECT 1. INTRODUCTION 1.01 The Goverment of Iraq has requested Bank assistance in financing a project forming part of its Five Year Telecommunications Expansion Program,included in the National Development Plan for the fiscal years 1971 to 1975, to be undertaken by the Iraqi PT&T Administration. The program is estimated to cost ID 21.9 million (US$61.h million). 1.02 The purpose of the project proposed for Bank financing is to develop the telecommunication service during the five year period by: (i) doubling the number of telephone connections to meet a part of the denand for local service; (ii) providing modern and reliable long distance service adequate to meet existing and future demand; (iii) providing additional facilities as part of the main long distance routes to link television stations for inter- change of programs; and (iv) installing a satellite ground station to provide an adequate international telegraph, telephone and telex service from and to Iraq. 1.03 The cost of the project is estimated at ID 14.2 million (US$39.7 million) of which the foreign currency costs of ID 9.8 million (US$27.5 million) is proposed for Bank financing. 1.04 It would be the first Bank-assisted telecommunications project in Iraq, and would be carried out by the Posts, Telegraphs and Telephones Administration (PTkT), the wholly Government-owned entity that provides all public telecommunications and postal services in the country. PT&T would be the beneficiary of the proposed loan; the borrower would be the Government. 1.05 The Goverment enquired about the possibility of Bank financ- ing for a microwave project in October 1969. The Bank arranged for two preappraisal missions to Iraq. Since no studies had been made, the Government was advised, as a first step, to prepare a project feasibility study. Government employed engineering consultants (Microwave Services International Inc., New Jersey/USA) and presented the required data for the microwave project and the sector information in early September 1970. This report is based on the findings of an appraisal mission composed of Messrs. F. Gheith and M. Kohler who visited Iraq in October/November 1970, and a visit in April 1971 by Messrs. M. Kohler and S. Sathar. -2- 2. THE ECONOMY AND TE SBTOR A. Economic Setting 2.01 Lying in the arid zone of the Middle East, Iraq covers an area of about 435,000 kn2 traversed by the twin river system formed by Tigris and E5aphrates. The country's population of about 9 million is concentrated in the habitable areas provided by this river system. The western half of the country is largely desert. Rich oil reserves are being exploited, mostly in the mountainous region around Kirkuk in the northeast and also around Basrah the main port, in the southeast. 2.02 The economy is based on two major components, agriculture and the petroleum industry. The latter is the dominant component and provides over 50% of Government revenues and about 90% of foreign exchange earnings. The gross national product (GNP) is estimated to be US$2.7 billion, of which about 33% is contributed by the petroleum industry, 19% by agricul- ture, and 9% by manufacturing industry. The 1969 per capita GNP was about US$300. B. The Telecommunications Sector 2.03 Law No. 81 enacted in 1963 gives PM&T responsibility for pro- viding all public postal and telecommunications services. PT&T is a wholly Government-owned entity under the jurisdiction of the Ministry of Communications and operates essentially as a Government department rather than an independent agency. It is financially independent of the Govern- ment's budget for its revenues and current expenses; but, the Ministry of Planning provides funds for capital developnent and PT&T is not expected to generate funds internally for such purposes. 2.04 PT&T is headed by a Board of Directors with the Director General of PT&T as Chairman of the Board. The other directors are repre- sentatives of the Ministries of Finance, Defense and Interior and of the PT&T labor union, a legal adviser and a senior engineer, nominated by the Council of Ministers. (See also paragraph 5.01.) Existing Facilities 2.05 Since World War II the sector's development has been limited, both qualitatively and quantitatively, and the last 10 years have been a period of virtual stagnation. Progress in the sector and the quality of its services have been hampered mainly by inadequate budgetary allocations and repeated changes in the leadership of PT&T. Long waiting lists for telephone connections and abnormal delays in long distance services are symptoms that the sector lags far behind the demand for its services. -3- 2.06 Some principal statistics for Iraq's local telephone service in March 1970 are given below (see Annex 1 for details). Comparative international statistics are given in Annex 15. Number of automatic exchanges 19 Total capacity of automatic exchanges (lines) 77,600 Number of manual exchanges 271 Total capacity of manual exchanges (lines) 24,860 Number of connected direct exchange lines (DEL's) 91,246 Approximate number of telephones 143,600 Manual exchanges of less than 100 lines capacity are in service for 16, 12 or 7 hours daily in order to achieve economy in operation. Automatic exchanges are of the step-by-step type. About half of them are 20 to 33 years old, and the service which they give is generally unsatisfactory in quality. The local cable networks, which are largely of the same age as the exchanges, are in bad shape. Most of the secondary distribution is by overhead wire which causes continual difficulties in maintenance and the repair of faults. P&T only recently began rehabilitating the net- works using underground distribution with work being carried out by foreign contractors. 2.07 The main long distance telephone service in Iraq is provided by carrier systens on open-wire routes, which permit only limited capacity and reliability. In an effort to provide additional circuits, PT&T has installed carrier systEms on power lines but they do not provide the proper quality of service and are unusual for use in public service. The long distance service is being operated entirely on a manual basis which in turn leads to uneconomic use of available circuits. Because of the poor service, the Government has reserved for its priority use about 30% of the circuits further aggravating the quality of service provided to the public. Frequent faults on the open-wire lines and theft of wires fur- ther contribute to the unsatisfactory quality of the long distance service. The total number of long distance circuits is 346, of which 134 operate over power lines. 2.08 The telegraph service in Iraq operates on point-to-point work- ing mainly by Morse. However, P&T has introduced manual Gentex switch- boards at Baghdad and Basrah with which a few teleprinter machines are associated, and this service is being extended to other regions. Telex service is on the basis of manual operation, with about 50 subscribers connected, essentially airlines, news agencies, banks and some embassies. 2.09 The international service is operated by high-frequency radio and is subject to all the shortcomings of this type of operation. The international telephone service connects Iraq with 20 other countries, while the international telegraph service connects with 14 destinations, out of which 10 operate with teleprinters and 4 on Morse. PT&T has in service 13 transmitters with 17 channels for telegraph services, 5 trans- mitters with 10 channels for telephone service, and 24 receivers for both telegraph and telephone service. 3. THE PROGRAM AND MEE PROJECT A. The Program 3.01 The five year program for development of telecommunications of Iraq aims at improving and expanding the telecommunication facilities and meet part of the demand for telephone connections; the long distance national and international telegraph and telephone services will be modernized and improved to provide a high quality service. 3.02 The program provides for (a) the installation of about 100,000 lines of local exchange equipment together with the local and junction cable network and associated facilities, (b) the installation of long distance facilities consisting of a backbone microwave network with multiplex and associated switching equipment for subscriber trunk dialing, (c) installation of a satellite ground station for international services, (d) installation of Telex and Gentex system for about 700 lines and (e) training facilities for PT&T's technical personnel. This program is estimated to cost about ID 21.9 million (us$61.h million). Details of the program are set out in Annex 10. 3.03 The PT&T has contracted for about 58,000 lines of local ex- change equipment and some of the cables required as a part of the program and employed consultants to complete the detailed engineering and prepara- tion of bid documents for the long distance facilities including the microwave and switching systems. About ID 0.8 million (US$2.2 million) has been spent during 1970-71, the first year of the program. B. The Project 3.04 The project proposed for Bank financing is a part of the telecoummnications program and consists of the following: (a) Microwave system connecting main towns from Baghdad to Hilla, Basrah and Amara in the South and to Mosul, Kirkuk and Erbill in the North; the provision of multiplexing equipment for about 1,500 channels and television program interconnections and spurs for about six TV stations; and installation of ultra high frequency links to the important urban centers in the North East. (b) Long distance exchange facilities with total capacity of about 5,000 lines peritting direct subscriber trunk dialing between the major cities. (c) Part of the cable network and subscriber facilities including local and junction cables and drop wires, branch exchanges and telephone instruments. (d) National and international telex and gentex services by providing exchange facilities of approximately 700 lines. (e) A satellite ground station including an international switching center and associated facilities. (f) 1hgineering consultant services required for detailed engineering of (e) and for supervision of construction of (a), (b) and (e) above. For the realization of the full benefits from the project, it is essen- tial that certain related parts in the program mainly the installation of local exchange equipment and cable network now in progress also be completed. Government has given assurances during negotiations that these works will be completed in time for the effective operation of the project. Details of the project are given in Annex 10. C. Costs 3.05 The estimated costs of the project are about ID 14.2 million (US$39.7 million) and are sunarized below; further details are given in Annex 10. Local Foreign Total Local Foreign Total % ---- million ID --- --- miion US --- 1. Local service 2.86 1.79 4.65 8.01 5.0o 13.01 32.8 2. Long distance service 0.93 5.57 6.50 2.60 15.60 18.20 45.8 3. Telex service 0.10 0.57 0.67 0.28 1.60 1.88 4.7 4. Satellite ground station 0.17 1.18 1.35 0.48 3.30 3.78 9.5 5. Consultants - 0.14 0.14 - 0.40 0.40 1.0 6. Contingencies: Physical 0.29 0.53 0.82 0.79 1.48 2.27 5.7 Price 0.02 0.0h 0.06 0.07 0.12 0.19 0.5 Total 4.37 9.82 14.19 12.23 27.50 39.73 100.0 D. Contingencies 3.06 The estimates for the cables for the local service are based on recent Iraqi contracts for similar cables. A contingency provision of 10% in local and foreign costs has been included to accomnodate design changes. The estimates for long distance facilities are largely based on consultant's estimates for microwave systems which on the basis of experience appear to be on the high side; even so, they were not reduced but a contingency of only 5% was included to accommodate minor design changes. The estimates for the satellite ground station are based on the recent experience of Communication Satellite Corporation (COMSAT). These costs have shown a tendency to decline and the estimates thus have an inbuilt contingency provision. With respect to other itens in the project, a contingency provision of 5% each for both physical and price changes in both local and foreign costs has been provided. E. Items Proposed for Bank Financing 3.07 The foreign exchange costs of the items proposed for Bank financing are summarized below: ID millions US$ millions 1. Microwave system Basrah- Baghdad-Mosul with associated spurs to TV stations, equip- ment for UHF radio links tele- phone and telegraph multiplex equipment 4 .07 11.4. 2. Long distance exchange equipment and accessories 1.50 4.2 3. Local and junction cables, drop wires, branch exchanges and tele- phone instruments 1.79 5.0 4. National and international tele- graph/telex exchange equipment and accessories .57 1.6 5. Satellite ground station including international switching center and associated facilities 1.18 3.3 6. Consultant service .14 .4 7. Unallocated .57 1.6 9.82 27.5 F. Procurement 3.08 Procurement of all equipment and materials to be financed by the Bank would be through international competitive bidding. G. Execution of the Project 3.09 The installation and commissioning of all equipment and of the cable network will be carried out by suppliers under the supervision of PT&T. PT&T will use their own staff to install subscribers cables and subscriber -7- apparatus including branch exchanges. These-arrangements are satis- factory. The detailed engineering of the long distance facilities com- prising the microwave system, multiplexing and switching equipment has been completed. Installation will be supervised by the consultants, Microwave Services International Inc. USA. PT&T also is discussing with COMSAT their employment as consultants for the satellite ground station project. 3.10 The project is scheduled to be completed by March 1976. A detailed schedule is shoun in Annex 13. H. Disbursement 3.11 The proposed loan would be disbursed against the CIF costs of imported equipment and materials and the foreign exchange component of suppliers' installation and supervision costs. The estimated schedule of disbursements is given in Annex 11. - 8 - 4. JUSTIFICATION 4.01 The developaent of telecommunications in Iraq has been vir- tually stagnant during the past 10 years and services are now lagging far behind demand in all the basic branches -- local, long distance, telex and international services. This state of affairs has had adverse effects, particularly on industry and commerce, and has hampered national development and social progress. 4.02 The project aims at: (a) improving the quality of the local service and partly satisfying the demand for subscriber connections; (b) satisfying in full for the first time the projected traffic demands of existing subscribers and new connections under the project for long distance facilities; (c) providing TV program inter-connections; and (d) improving the quality and capacity of the international telegraph, telex and telephone services to meet the demand for these facilities. The justification for the components of the project required to achieve these goals are set out below. Local Telephone Service 4.03 For a number of years, demand for telephone connections in Iraq has not been satisfied and only a few connections have been given to high-priority applicants. The percentage utilization of the installed exchange capacity (exchange fill) in the main towns served by automatic exchanges has been abnormally high, ranging from 95 to almost 100%. The total known demand in March 1970 amounted to 127,000 lines composed of 91,000 DELls in service and 36,000 registered applications. Assuming a modest growth of 10% per annum, which is exceeded in most developing countries the total known demand in 1976 would be about 226,000 lines of which the project aims at meeting only 170,000 DEL's by that time (Annex 10, page 1). The actual shortfall is likely to be considerably higher since the forecast demand has not taken into account any un- expressed demand which by experience in other countries is known to be substantial. The size of expansion has had to be limited because of PT&T's financial resources and execution capability. Long Distance Service 4.04 The existing long distance service is totally unsatisfactory for several reasons as given in paragraph 2.07. The long distance faci- lities included in the project would establish a country-wide network -9- wh.h will link together the main centers of economic activity -- ai':ricultural, industrial, commercial and petroleum. The network will a-so form the main artery for future connections with other Middle East countries such as Turkey and Iran. It could be extended to the other neighboring countries such as Jordan, Lebanon, Syria and Saudi Arabia at a later date. a.0:5 Because of the very poor quality of service at present, the r;urrent traffic or historical traffic growth rates do not directly .urnish a basis for forecasting the future circuit requirements. The consultants have examined the needs on a detailed, section-by-section analysis based on the interdependency between the exchanges and expe- ri4nce in other countries. On account of the improved service, the traffic increases on this basis are expected to be between 200 to 300% soon after commissioning of the microwave systems followed by a growth o 15% per annum. These forecasts appear reasonable. 1.16 The microwave system has been designed to provide TV bearers for program interconnection of 6 TV stations. The additional TV faci- lities will be about 20% of the total cost of a microwave system for .public telecommunications only. The inclusion of these TV services as an integral part of the microwave system enables these facilities to be provided at a nall cost compared -ith alternative methods, and the country would therefore benefit accordingly. International Service 4.07 The present international telephone and telegraph services from Iraq by means of HF Radio are inadequate because of the poor quality of service inherent with such systems and the lack of sufficient number of circuits. The use of satellite communications will enable Iraq to provide high quality international services for the first time. 00OMSAT has carried out a study recently and has estimated that the telephone service which is of very poor quality now should show an immediate increase of about 200% and thereafter both telephone and telex traffic will increase at 15% annually. This COMSAT study also shows that the satellite ground station in Iraq operating through an Indian Ocean satellite is expected to be profitable from the first year of operations in 1974. Least-Cost Solution 4.08 Selecting the least-cost solution for expansion of the local exchange systems requires coordination in size and timing with the over- all program, using optimizing techniques developed over the years by the major international telecommunications entities. PT&T has handled this problem satisfactorily on a detailed exchange-by-exchange analysis of the e=timated growth of demand. - 10 - 4.09 The engineering consultants' studies have shown that, con- sidering present needs and the projected annual growth in traffic, a microwave scheme would be the least-cost solution for the provision of an adequate long distance service in Iraq, as compared with the alter- native of a coaxial cable. Internal Financial Rate of Return 4.1o The internal financial rate of return of the five year program is estimated to be about 14% (see Annex 12, page 2). The rate of return was determined by equalizing the present values of expenditures and incre- mental cash flows. Improvement and expansion of Iraq's telecommunications will produce other benefits besides revenues; for example it will promote business, transportation and other economic activities. 4.11 Because of the very close interrelation between the facilities which are to be provided under the project and those which are to be pro- vided under the program, it is impossible to identify incremental cash flows with the project investment. Therefore, no internal financial rate of return can be developed for the project alone. However, for the micro- wave network, where the major components are provided under the project and the related incremental cash flows can be estimated, the internal financial rate of return is estimated to be about 30% (Annex 12, page 3). A sensitivity approach was applied by varying the projected number of telephone calls per long distance circuit, and indicated returns of 26% and 33% respectively for the 20% lower and higher traffic projections. - 11 - 5. THE BENEFICIARY A. Organization and Management 5.01 The organizational structure of PT&T generally follows con- ventional practices with separate functional units for postal, telephone and telegraph operations, postal savings accounts, accounting, legal and personnel. There have been deficiencies in the past in the management especially on the financial side. The management has also suffered from the organizational weaknesses in decision making with respect to procure- ment, personnel and tariffs. Major decisionson the project, however, have already been made and the efficiency of management is expected to improve with the reorganization under study by consultants (paragraph 5.02). Management in the technical branches is adequate and capable of planning and supervising project execution. PT&Tts adninistrative systems and methods require improvement and its financial area needs strengthening. B. Management Consultants 5.02 The Government has been aware of the need to remove the weak- nesses referred to above as well as others in accounting (see paragraph 5.03 below). In order to do so PT&T has engaged Arab Research and Administration Center (ARAC, UAR), management consultants, with terms of reference summarized in Annex 9. The consultants will also be study- ing as a long-term proposition, the feasibility of separating tele- communications and postal operations. The Government has confirmed during negotiations that the consultant's recommendations will be used for consider- ing necessary changes in the organization and procedures of PT&T. C. Accounting and Audit 5.03 wile PT&T's accounts have been kept on an accrual basis since 1963, there were for several years substantial arrears in the actual prep- aration of the annual financial statements. With guidance from the auditors, PT&T has recently managed to bring its records up to date, and has produced the March 1970 statements within six months after the close of the year. Even so the present accounting system does not provide management with the necessary data for decision-making and control, and no interim financial data and operating data by type of services or revenue and expense budgets are prepared. The consultants are reviewing this area and will make recommendations to remedy this situation. 5.04 PT&TIs accounts have been reviewed periodically by the Auditor General on behalf of the Government. In addition, as required by the PT&T law, a systematic audit has been carried out regularly since 1963 by a local firm of independent public accountants. These auditors pre- pare their report and accompanying financial data in Arabic. Assurances - 12 - were obtained during negotiations that: (1) the audit reports and financial statements of PT&T will be submitted to the Bank in English within six months of the close of the fiscal year, and (2) starting April 1, 1975 the reports will cover the separate accounts of telecom- munications operations. D. Staff and Training 5.05 PT&T's staff totalled 10,014 on March 31, 1970. The present estimate of those engaged in telecommunications is 70% or about 7,000 employees but there is some uncertainty and the consultants are to determine the exact number. Although this figure includes staff for telegraph operation, the resulting ratio of 47 persons per 1,000 tele- phones is on the high side. Annex 15 shows comparative ratios from some other countries. 5.06 The Government has been aware of over-staffing in its depart- ments and public enterprises and imposed severe restrictions on new employment several years ago. Accordingly, PT&T proposes to hire only a minimum of staff to overcome its shortage of experienced financial personnel and qualified technicians and engineers. For other require- ments PT&T proposes to arrange for retraining or redeployment of staff who will become redundant in other categories. PT&T expects to add only about 600 employees during the construction period and to achieve a staff ratio of 32 persons per 1,000 telephones by 1976. 5.07 PT&T's major staffing weakness is in the financial area. Only a few of the staff now employed in accounting are qualified to fill other than clerical positions. To overcome this weakness, PT&T plans to hire an adequate number of experienced accountants and to promote the more- promising members of its present accounting staff after they have com- pleted in-service training courses. 5.08 The training of telecommunications technical staff has been progressing satisfactorily over the past few years. The training center for telecommunications technicians, which began operations in 1964 with the International Telecommunications Union (ITU) under UNDP financing, is graduating about 100 technicians every second year. Besides full courses for technicians, the curriculum includes brief introductory training for new engineers and in-service training for engineering staff. The training facilities are being extended to increase the number of sub- jects and of trainees. A special section for in-service training for accounting staff is planned to start early in 1972. Other subjects to be taken up include microwave radio techniques, crossbar automatic exchanges and telex operations. During the calendar years 1971-1975, over two thousand trainees will attend the center for in-service technical train- ing. For this extension of its training center PT&T has applied for continued UNDP assistance. - 13 - 6. FINANCE A. Financial Arrangements 6.01 Under the Iraqi system, all developmental or expansion projects, including the telecommunications expansion program, have to be specifi- cally included in and financed from the National Development Plan. Financ- ing is provided out of Plan funds which are comprised of 50% of oil reve- nues and a share of profits from the various departments and entities of the Government including the PT&T as laid down in the laws appropriate to each case. 6.02 While the pattern of financing differs from conventional prac- tice, Government does recognize that PT&T should operate on a commercial basis as prescribed in PT&T Law No. 81 of 1963, and should yield a reason- able surplus which would accrue to the centralized pool of Government resources for future expansion activities. In order to generate annual revenues sufficient to (1) cover all expenses of telecommunication faci- lities, including adequate maintenance, depreciation and interest charges; (2) cover repayment of telecommunications borrowings to the extent not covered by depreciation and (3) create a reasonable surplus to finance future investments, the Government agreed during negotiations to take necessary steps to ensure that a reasonable annual return on national investment in telecommunication facilities will be obtained from April 1, 1977. A return of 10% on net fixed assets would appear reasonable. B. Tariffs 6.03 Annex 8 sumnarizes the telecommunications tariffs presently in effect. The amounts charged to subscribers for monthly rental of con- nections, as well as installation charges, includes an excise duty of about 20%. These duties are special to telephone subscribers as user charges and have been treated as part of revenues in the notional ac- counts of PT&T in this report. 6.04 The aggregate charges for local service are in line with charges in neighboring countries. The telecommunications revenues during each of the past three years have been adequate to cover telecommunications ex- penses and to produce a return above 9%. With current tariffs the return on total net investments would drop somewhat until the new investment be- comes fully operational but is expected to be above 8% from 1977 onward. 6.05 While the overall tariffs are generally satisfactory there are some structural anomalies. The number of free calls allowed is high, particularly to newspapers. The long distance rates especially for the short and intermediate distances are on the low side. Also the charges for leased circuits to Government have not been worked out on a rational basis. The Government has formed a special committee to study the tele- communication tariffs and to recommend for Government consideration, any adjustments which appear necessary. The study is expected to be com- pleted prior to the completion of the construction of the project by March 31, 1976. C. Past Financial Performance 6.06 PT&T has not kept separate accounts for the postal and tele- communications operations. Therefore financial data for telecommunica- tions operations has been prepared on a pro-forma basis by notional separation from PT&T's audited financial statements. 6.07 PT&T's past performance (pro-forma data for telecommunications is shown in Annex 5 and for PT&T as a whole in Annex 2) has shown improve- ment during the past three years due in part to the effect of excise duties. The rates of return on average net plant in service are as follows: 1968 1969 1970 F) denotes loss Total PMT (3.1) (1.0) 3.8 Telecommunications 9.4 11.8 20.1 Though the rate of return on the telecommunications operations has been satisfactory, traffic has not been increasing because of acute congestion, especially in long distance. The national long distance revenues from 1968 to 1970 have declined as shown in Annex 5 due to the use of avail- able facilities for Government priority users (paragraph 2.07). 6.08 Annex 3 shows PT&T's balance sheets for the past three years. The following is a summary of the March 31, 1970, pro-forna financial position for telecommunications: (millions) DMars U S Assets Fixed assets: Net plant in service 4.2 11.8 Work in progress 2.9 8.1 Total fixed assets 7.1 19.9 Current assets 3.9 10.9 Total assets 11.0 30.8 Liabilities Equity 8.3 23.2 Subscribers' deposits .8 2.3 Current liabilities 1.9 5.3 Total liabilities 11.0 30.8 - 15 - 6.09 The valuation of fixed assets is based on suppliers' invoiced costs plus related expenses, but does not include minor elements of PT&T's own labor costs incurred for installation of equipment. While the book figures are acceptable and have been used in the financial presentation of this report, PT&T should identify and determine appro- priate values for the fixed assets when separate accounts are introduced. 6.10 However, while the general position is good, the collection of accounts receivable is not satisfactory. The balance sheet contains ID 1.08 million (US$3.04 million) of past due accounts equalling about 3-1/2 months of 1970 total billings. Goverment institutions, public enterprises and some individuals whose accounts are to be settled by Government, appear to be responsible for these arrears. The record of the other subscribers is satisfactory because they are disconnected if they fall in arrears. Consolidated information per account reconciled with each Government institution is not available, but the Minister of Communications has directed PT&T to submit consolidated statements of accounts to all the institutions concerned. The Government has also arranged with the Minister of Finance for PT&T to be paid directly from the various annual budgets of the institutions. D. Financing Plan 6.11 Annex 7 shows the estimated past and forecast sources and applications of funds for the telecommunication operations. The fund requirements during the construction period exclusive of those estimated to be expended during 1971 (paragraph 3.03) are summarized as follows: (thousands) Dnars US$ % Applications of Funds Expenditures on this program 21,126 59,153 73.8 Expenditures on subsequent program 5,686 15,921 19.9 Increase in working capital (net) 1,820 ),09 6.3 Total applications 28,632 80,170 100.0 Sources of Funds Internal cash generation 12,135 33,978 42.4 Less: Repayment to Planning Board ( 310) ( 868) ( 1.1) Profit and other distributions to Government ( 5,498) (15,394) ( 19.2) Net internal cash generation 6,327 17,716 22.1 Receipts from Planning Board 21,485 60,158 75.0 Subscribers' deposits (net) 820 2,296 2.9 Total sources 28,632 80,170 100.0 - 16 - . While the pro-forma net internal cash generation shows that PT&T provides 22.1% of the requirements of funds, the forecast total generation of funds available for investment is expected to amount to 42.4%. 6.12 The estimated amount of expenditures for the subsequent program represents downpayments on orders for equipment to be installed during the subsequent phase of the ongoing expansion program. The planning for the subsequent expansion will be made during the project period and advance payments will become due when entering into contractual commit- ments toward the end of the period. 6.13 The financial plan envisages that the T-eceivables will be reduced to an acceptable level by the collection of ID 427,000 (US$1.2 million) during 1972 from various governmental institutions as a result of the action indicated in paragraph 6.10. E. Future Finances 6.14 Forecast pro-forma income statements for telecommunications for 1971-1978 and a summary of the assumptions nr wiih they are based are shown in Annex 5. The rate of return on th . everage net plant in service is expected to increase gradually, reaching 8.4% in 1977. The operating ratio will continue to improve reaching the level of 0,73 in 1977. 6.15 During the project period telecommunications revinues are expected to increase by about 100% -- from ID 3,649,000 (Uc,',11.2 million) to ID 7,306,000 (US$20.5 million). The number of subscribers will nearly double during the period, and adequate long distance facilities will be put into service for the first time. As a result of all these factors, average telephone revenues per DEL are estimated to increase from ID 31 (US$86.80) in 1971 to ID 39 (US$109.20) in 1976. 6.16 The financial position of telecommunications, as shown in the pro-forna forecast balance sheets in Annex 6, is expected to remain sound. - 17- 7. AGREIMETS REACHED LURIG NEGOTIATIONS 7.01 During negotiations agreement was reached on the following principal points: (a) The Bank will be furnished a satisfactory certified annual audit report of PT&T, in Eiglish, within six months of the close of the fiscal year. Commencing no later than April 1, 1975, these financial statements will reflect separately the telecommunications operations. (Paragraph 5.Oh,) (b) From April 1, 1977 a reasonable annual return on national invesiments in telecommunication facilities will be obtained. (Paragraph 6.02.) 7.02 The project forms a suitable basis for a Bank loan of US$27.5 million for a term of 20 years, including a 5-1/2 year grace period. August 23, 1971  ANNEX 1 IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Basic Statistical Data March 31, 1970 1. Population 9,100,000 (1969) 2. GNP per Capita in US$ 300 3. Number of automatic exchanges 19 4. Total capacity of automatic exchanges 77,600 5. Number of exchange lines in service-automatic 69,494 6. Number of Manual exchanges 271 7. Total capacity of manual exchanges 24,860 8. Number of exchange lines in service manual 21,752 9. Total number of exchange lines in service 91,246 10. Total number of telephones 143,600 11. Number of long distance circuits 346 12. Number of teleprinters in service 50 August 6, 1971 IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Income Statements PT&T 1968-1970 (in thousands of Dinars) ACTUAL REVENUES Years ending March 31: 1968 1969 1970 Operating revenues from telecommunications 2,700 2,784 2,763 Operating revenues from postal services 543 560 551 Total operating revenues 3,243 3,344 3,314 EXPENSES Operating expenses telecommunications 2,461 2,655 2,924 Operating expenses postal services 1,o4y 1,o83 1,186 Total operating expenses 3Z508 3,738 4io Total net loss from operations (265) (394) (796) NON-OPERATING INCOME AND EXPENSE Interest earned on investments in securities 161 171 187 Interest expense on postal savings accounts (100) (100) (100). Net loss per audited reports (204) (323) (709) EXCISE DUTIES 114 342 998 Total net profit or loss for PT&T (90) 19 289 Ratio of net profit or loss from operations plus excise duties to average net plant in service (3.1) (1.0) 3.8 Notional allocation for telecommunications and postal services. Audited by firm of independent public accountants. August 14, 1971 IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Balance Sheeta PST 1968-1970 (in thousands of Dinars) ACTUL a at March 31t 1968 1969 1970 ASSETS Fixed asseta Telecmmiations plant in service 4,972 5,523 5,926 Lases Allowance for depreciation 1,129 Net t*1eoamunications plant in service 34,92 Work in progresa 1,967 2.202 2,863 Total telecmuniastions plant 5810 6.311 Postal fixed asseta (net) 11111 1,163 1.16o Total fixed assets (net) 6,921 7,474 8.254 Investment in securities (rrom postal savings account funds) 3,478 3,578 3,678 Carrent &aeta Cush 749 373 723 subscribers, accounts receivable and accrued telcomiunatione inaome 936 1,214 1,333 Inventories 1,613 1,758 1,552 Other current asseta 586 752 647 Total current assets 3,884 4,097 4255 Total &asets 14.283 15.149 16A187 LIABILITIES Paid in capital 6,822 6,822 6,822 Accumulated deficit (695) (11018) (1,727) Total equity 6,127 5,804 5AO95 Non current liabilities Subscribers deposita 671 739 788 Postal saving@ acounts 4,624 5,255 5,626 Pnds from Goverment per Plan Law 1,825 2,o66 3,043 Total non-current liabilities 7.120 8&060 9L457 Darrent liabilitiee 1kaiae duties due Government 171 505 805 Other current liabilities 865 780 830 Total current liabilities 1,036 1j285 1.635 Total liabilities 14,283 15,149 16j187 Carrent ratio 3.7:1 3.2:1 3.6:1 abt/Equit ratio (excluding ambecribera' deposita from debt) 51:49 56t44 63:37 Audited by a firs of independent public accountants. August 7, 1971 IRAQ Posts, Telegraphs and Telephones Administration (PT&T) StatEments of Sources and Uses of Funds PT&T 1968 - 1970 (in thousands of Dinars) ACTUAL Years ending March 31: 1968 1969 1970 Sources of Funds Net profit before interest expenses (including excise duties) 10 119 389 Depreciation telecommunications 1 266 289 299 Depreciation postal services 1 19 21 22 Total internal cash generation 295 429 710 Subscribers' deposits 1 61 68 49 Increase in postal savings accounts 312 631 371 Funds from Government per Plan Law 431 241 977 Increase in current liabilities 125 249 350 Total sources 1 224 1 618 22457 Uses of Funds Capital expenditures 429 863 1,101 Investment in securities 375 100 100 Interest expense postal savings accounts 100 100 100 Change in accounts receivable (184) 278 119 Change in inventories and other current assets 311 311 (311) Excise duty distributions 114 342 998 71-7 1,199 2,107 Change in cash 79 (376) 350 Total uses 1,224 1,L618 2 457 Debt service coverage (interest expense by internal cash generation) 3.0 4.3 7.1 1/ Notional allocation into telecommunications and postal services. IRAQ Fosts, Telegraphs and Telephones Administration (PT&T) Pro-Form a Income Statements - Telecommunications Operations 1968 * 1978 (in thousands of Dinars) ACHIAL FORECAST Years ending March 31: 1 10 Un W M M IM a 1 2T8 Revenues Bent and local service 1,458 1,50 1,552 1,597 1,672 1,8&h 2,101 2,401 2,744 3,090 3,h61 National long distance service 346 329 292 292 292 336 511 949 1,285 1,1114 1,555 International long distance service 50 51 47 4? 47 157 203 311 358 112 474 Leased circuits - - - - 175 175 225 438 594 650 706 Installations. transfers, etc. 120 86 92 68 110 110 33D 10 40 w449 503 Telex - - - - - 20 100 230 265 305 351 Telegraph service 68& 752 721 721 721 721 721 721 721 721 721 Other operating revenues 44 62 59 62 65 68 71 75 79 83 87 Excise duties 11 2 862 h6 5 626_ 820 913 1,022 Total revenues 3 3 , 3J4 it.M 62 7 8,037 8B Operating expenses Personnel expenses 1,922 2,048 2,27 2,347 2,460 2,636 2,940 3,110 3,218 3,413 3,623 Other operating expenses 273 318 350 w18 470 575 652 740 807 856 937 Depreciation 266 2 6 3 365 506 W 1.183 1,439 1,628 1.820 Total operating expenses 2,461 2,655 2,924 3,097 3,295 3,717 11,398 5,033 5,.6 5,89 6,380 Net operating income 353 471 837 552 251 223 490 1,262 1,842 2.140 2,500 Interest earned On funds advanced to postal operations * * 10 10 * - * * - - - Interest expenses On funds from postal savings accounts (20) (28) (9 - - Net income - Telecommunications 333 143 828 562 251 223 io90 1,262 1,842 2,1h0 2,500 Average net plant in service 3,765 3,976 4,170 4,187 5,127 7,498 12,856 19,01 23,201 25,65527,568 ate of return (net operating income including excise duties to average net plant in service) () 9. 11.8 20.1 13.2 4.9 3.0 3.8 6.5 7.9 8.4 9.1 operating ratio (operating expenses to total revenues) () 87 85 78 85 93 94 90 80 75 73 72 Number of .E.L's installed (thousand) 8O 90 91 95 100 115 130 150 170 190 213 Average telephone revenues per D.E.L. 1.D. 26 27 33 31 28 29 33 38 39 38 38 uotional presentation derived from audtled P,T1 fig,.res. Includes excise duties - amounts shown under revenues. August 14, 1971 ANNEX 5 Page 2 of 3 pages Notes on the Pro-Forma Income Statements 1. Revenues have been forecast under the following assumptions: Rent and local service - at the 1970 average annual revenues of ID 17.15 per subscriber. National long distance service - at the 1970 level of revenues for 1971 and 1972, thereafter considering the new microwave scheme with STD operation which will progressively come into operation; 20% beginning in January 1, 1973, 40% by January 1, 1974, and the full scheme by July 1, 1972. A traffic upsurge of 3001o is assumed in each section following commissioning, thereafter a 100o annual growth traffic. International long distance service - at the 1970 level of revenues for 1971 and 1972, and reflecting the satellite ground station beginning operations on January 1, 1974. A 15% annual increase in traffic is assumed. Leased circuits - at 60% of national long distance revenues for 1972 and 1973, subsequently at ID 2,250 per annum per circuit (based on ID 5 per circuit/kilometer, assuming 450 km average circuit length), based on 100 circuits leased in 1974, 150 in 1975 and an increase of 25 circuits per annum thereafter. Revenues from the lease of circuits to the television authorities have been forecast to start accruing on October 1, 1974, on ID 200,000 annual basis. Installations and transfers - at ID 14.1 per average subscriber as experi- enced in past years, for the estimated connections through November 1,1970, thereafter ID 22 per new subscriber by considering the published increase of the installation charges which became effective November 1, 1970. Telex service - assumed that the service is to came into full operation on October 1, 1973, with a 15% annual grQwth in revenues thereafter. Telegraph revenues - at the 1970 level of revenues, assuming that the increase in international telegraph traffic will compensate the decrease in national telegraph traffic. Excise duties - have been considered to be an element of PT&T revenues since they are specific user charges. 2. Personnel expenses have been forecast on the basis of a 4* annual increase in the average compensation per employee and an increase gradually in the number of employees by about 600 duringproject execution as well as ANNEX 5 Fage 3 of 3 pages by the necessary personnel in respect of the satellite ground station (including expatriates during 1974 and 1975) and 50 persons each in 1977 and 1978 for additional technical and accounting staff. 3. The forecast of other operating expenses is based on a 10o annual increase starting from the 1970 level of expenses and adding in those years, where necessary, the expenses of the management consultants and of the training center, suppliers' maintenance and training expenses attributable to the new microwave network and maintenance and operating expenses (including space segment costs) of the satellite ground station. 4. Depreciation was forecast on the basis of 51, per year on average gross plant in service. August 15, 1971  t0 1 i II I i :as { b. î D j s ; ;n 1 I.W li b 5 *e I.5 p I 0 b.s * B $ ANNEX 6 Page 2 of 2 pages Notes on the Pro-Forma Balance Sheets 1. The value of fixed assets additions and transfer of work in progress to plant in service in the forecast balance sheet of 1971-1976 are in harmony with the data given in the Estimated Costs Table in Annex 10. The 1977-1978 expenditures for the subsequent program has been estimated on the basis of 12% of the cost value of plant in service at the previous year's end. The 1977-1978 balances of work in progress have been forecast at 35% of the aggregate amount of the current year's capital expenditures and the balance of work in progress brought forward from the prior year. 2. The March 1977 and 1978 cash holdings have been forecast on the basis of 2 months of the subsequent year's operating cash outflows. 3. Beginning March 1973, subscribers' accounts receivable and accrued income have been forecast conservatively as the aggregate sums of 15% of the current year's rent and telegraph charges including excise duties, 50% of the current year's long distance call charges, and 25% of current year's telex, leased circuit and other revenues. 4. For inventories it has been assumed that ID 125,000 of the cables held in stock on March 1970 will be used annually during 1971 and 1975 for the execution of the local network projects; conversely, stores have been projected to increase by 5% of the annual capital expenditures between 1972 and 1978. 5. Other current assets have been forecast to increase annually by ID 15,000, the same amount of increase as projected for other current liabilities. 6. The notional "initial capital", figure per April 1, 1967, has been determined by difference of all other balance sheet items. The amounts of capital provided per plan law in 1977 and 1978 and, included in the balance sheet totals, have been determined on a residual basis to balance the financing plan in these years while maintaining the cash positions outlined under 2 above. 7. The forecast of subscribers' deposits is based on the continued levy of a subscriber deposit which averaged ID 8.6, in March 1970. August 15, 1971 IRAQ osts, Telegraphs and Telephones Administrattion (PT&T) Pro-Forma statements of Sources and Uses of Funds Teleaommunications Operations 1968 - 1978 (in thousands of Dinars) ACTuAL FO RCAST Years ending March 31: 1968 1969 1970 1971 1972 1973 197 1975 1976 1977 1978 Sources of Funds Net incme before interest expense 35) 171 817 562 251 223 490 1,262 182 2,140 2,500 Depreciation 266 2 y 3 "6 W i .f.! 9 1.626 iL.82D Total internal cash generation 619 760 1,1.6 86 616 729 1.296 2,45 3,281 3,768 4,320 Subscribers' deposits 61 68 19 32 43 129 129 172 172 175 197 Funds froe avernment per Plan Lav 131 21 977 701 1,209 7,371 5,561 14,761 90 1,676 1/2,1194 Postal Savings Accounts Funds (51) 359 (715) - - - - - . - . Total Sources 1,060 1,428 1,.27 1,597 1,868 8,232 6,906 T*Y 4,357 5,619 7,011 Uses of Funds Capital Expenditures .22 790 1,082 802 1,337 7.589 5.859 5,012 1,025 Vok - gapand. subsequent program - * * * * * * 2,000 3,686 16,130 Interest expenses 20 28 19 - - - * * * RApeyment of Plan Funds - - * * - - - * 106 04 245 Profit distributions - 2 6 6 - 26 1,022 i1,227 2xcise duty distribution (20) 8 698 1,062 836 h87 567 678 775 867 967 Change in receivables (18f) 278 119 17 (127) (77) 273 218 358 159 186 Change in inventories 351 138 (196) (85) (56) 254 160 126 166 184 207 Change in postal fund advances 2 242 (312 - - - - - * 1,039 1,18 1,377 1,38 1,690 8,253 6,867 6,o64 4,696 6,26 6,962 Change in cash 21 (6 5 2 17 (1 219 1,211. 49 Total Uses 1060 1 8 1.4n U 1A88 8M23 2 -7J378 - 7 5L6IL U notional presentation First year vith 100f distribution of profits (based on previous year's net ineame) Required if cash position to be maintained at 2 months of subsequent cash operating outlays. Includes revenues from excise duties Represents cash distributions made during the fiscal year to the Government for excise duties collected from the telecamunications services subscribers. August 14, 1971  ANNEX 8 Page 1 of 2 pages IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Representative Tariffs November 1, 1970 (in Dinars and Fils) 1. Annual rent rates Category/Type of subscriber Basic Tariff Excise Duties Total Law 42 Law 172 (1966) (1967) (1) 24 hours' service Government and Business 18.400 1.000 4.000 23.400 Residential 10.400 1.000 2.000 13.400 (2) 16 hours' service Government and Business 16.400 1.000 4.000 21.400 Residential 9.400 1.000 2.000 12.400 (3) 12 hours' service Government and Business 15.400 1.000 4.000 20.400 Residential 8.400 1.000 2.000 11.400 (4) 7 hourst service Government and Business 14.400 1.000 4.000 19.400 Residential 7.900 1.000 2.000 10.900 The above rents allow the following number of free calls per year: Newspaper and Iraqi Press Agency 15,000 Government and Business 3,000 Residential 2,400 The charge for each excess call is ID 0.004 (4 fils), i.e. about 1 USJ ANNEX 8 Page 2 of 2 pages 2. Installations and Transfers Excise Duties Basic Law 42 Law 172 Tariff 1966 1967 Total (Dinars) Government 20 1 2 23 Residential 20 1 2 23 3. Long Distance Rates (per 3-minute call period) Distance Rates in fils Distance Rates in fils (periods) (periods) 7 a.m. 4 p.m. 7 a.m. 4 p.m. to to to to km 4 p.m. 7 a.m. km 4 p.m. 7 a.m. 0- 25 30 25 4ol- 500 285. 238 26- 50 45 38 501- 600 330 275 51-100 90 75 601- 700 360 300 101-150 120 100 701- 800 390 325 151-200 150 125 801- 1,000 450 375 201-300 195 163 1,001- 1,200 510 425 301-400 240 200 1,201- 1,400 570 475 August 14, 1971 ANNEX 9 Page 1 of 3 pages IRAQ Posts, Telegraphs & Telephones Administration (PT&T) Telecommunications Program 1971-1975 Terms of Reference for Management Consultants On August 28, 1970, the Iraqi PT&T signed a contract with the firm of management consultants, Arab Research and Administration Center (ARAC), whose parent office is in Cairo, UAR, with a branch in Baghdad. These consultants will analyze and review the performance and operating efficiency of PT&T's management and administration and make recommendations for the restructuring of its internal organization and the elimination of weaknesses in the area of financial management. A summary of the terms of reference of the consultants is given below. A. General and Cost Accounting, Stores Records and Saving Accounts Organization 1. Design an adequate accounting system that also allows the determination of expenses of PT&T's various services. Improve the procedures for the control of physical assets and material consumption. Develop an internal control system to prevent irregularities and admi- nistrative inconsistencies and to produce up-to-date information to management of the entity's operations. 2. Develop the pertinent records for all administrative functions in PT&T and design an appropriate flow of documents. 3. Study and improve the system of stores accounting to provide for perpetual and accurate stores data required for the preparation of financial condition data on an interim basis. Set the basis for an appropriate stores coding system, with the ultimate goal of a full inventory control system to optimize investment in stores and minimize losses due to overstocking and obsolescence of materials. 4. , Develop adequate procedures for long-term planning and financial budgeting. 5. Streamline the collection system for public and governmental subscribers. 6. Study the organization and accounting operations of the Postal Savings accounts department and advise on appropriate changes for improv- ing them and strengthening its investment opportunities and profitability. ANNEX 9 Page 2 of 3 pages B. Administrative Organization 7. Study the present organizational systems and procedures in PT&T's headquarters administration and all branch offices, with the aim of establishing an integrated administrative system for work simplifi- cation and better coordination between the general management and sub- ordinate echelons to optimize operating efficiency and prepare PT&T for the future expansion. 8. Prepare a comprehensive study of all positions in all adminis- trative levels (management, employees and workers) and fields of special- ization in order to tailor the staff to actual requirements in quantity and quality by defining authority and responsibilities and pinpointing staff redundancies. 9. Set up a system to provide for a regular inflow of statistical data required for decision-making and control. 10. Study the feasibility of computer-based operations in the areas of general administration, stores control, statistical data compilation and accounting. 11. Suggest improvements in the system of internal communications to provide adequate channels of communications between and within the headquarters administration and the various branches of PT&T. 12. Set up an appropriate system for progress control to monitor the implementation of plans and the adherence to guidelines and instruc- tions, to eliminate causes of delays and deviations from the plan. 13. Study the filing system and suggest a standard indexing system that will guarantee easy reference to subjects and eliminate misplacing of files. C. Implementation and Training 14. The consultants (if PT&T so desires) shall advise on imple- mentation of the necessary organizational and procedural changes during one complete year from the date of submitting their final report. In addition, the consultants will propose a suitable training policy for administrative and financial personnel with the objective to raise staff efficiency. ANNEX 9 Page 3 of 3 pages D. Timetable Phase I Months a. Collection of information from PT&T. b. Study and detailed analysis. 8 c. Presentation of a preliminary diagnosis and proposal for revision of organization structure; after discussions and approval by PT&T, preparation of a final proposal. 7 Phase II Review systems and procedures in the accounting, stores, statistical records and collection departments; preliminary recommendations for improvements. 8 Phase III Study the feasibility of computerization of the accounting, stores and other operations; preliminary recommendations for improvements. 4 Phase IV Presentation of job descriptions for all echelons and detailed definition of systems and procedures as agreed to under phases II and III; present- ation of final report. Phase V Implementation (if PT&T opts for it); this phase includes also the follow-up and supervision of staff training. 12 The above timetable spells out maximum time allowances, but the consultants shall endeavor to reduce the total time span of their assignment by working simultaneously on two or more phases. August 15, 1971  ANNEX 10 Page 1 of 5 pages IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Telecommunications program and project Details of the five year telecommunications expansion program of Iraq is given in sections A to E below. The project which is a part of the program comprises of all of the facilities included in the program with the following exceptions: (a) local exchange equipment, local exchange buildings and about 50% of the cable network which forms a part of the facilities detailed under section A. (b) the microwave systems to neighboring countries under section D. A. Local Telephone Service The expansion of local service is expected to achieve the following targets: 1,000 Actual Forecast March 31 March 31 68 69 70 71 72 73 74 75 76 Total capacity 88 102 102 102 117 132 150 170 191 Number of DEL's 80 90 91 95 100 115 130 150 170 Number of telephones 124 141 143 145 150 173 182 210 238 Registered waiting lists show 36,000 applications for connections, 18,000 of them in Baghdad. Because of long waiting time and scarcity of available connections, the hidden demand is expected to be very high, and Project will alleviate only part of the pressure, leaving substantial remedy to subsequent stages of the ongoing expansion when demand will be more precisely established, execution capacity of PT&T improved and financial resources adequate. During the project period, 100,000 additional capacity lines will be added (11,500 to replace worn-out equipment). After interna- tional competitive bidding PT&T has contracted for 58,000 lines and is finalizing the contract for the remaining 42,000 on the same bid. The distribution of these additional capacities and dates of commissioning are shown in table 1 of this Annex. Cable networks to meet the targets for additional connections will be taken up during the project period. Some of the cables for the 58,000 lines have already been procured, while the remainder, (in addition ANNEX 10 Page 2 of 5 pages to the requirements for the 42,000 lines) will soon be procured -- all under international competitive bidding. Renovation of the existing distribution networks and replace- ment of the overhead wires by secondary cables are an urgent necessity in ordei to improve the service and overcome frequent faults and repairs. PT&T started this work recently, and will continue it progressively during the project period. The execution of most of cable networks and the renovation are being carried out by foreign contractors through full international competitive bidding. B. Long Distance Service The Chart (Annex 14) and Map show the main microwave backbone connecting the main towns from Baghdad to Basrah and Amara in the south and to Mosul, Kirkuk and Erbill in the north. They also show the UHF links that will connect 16 other towns and localities to the microwave backbone. Chart (Annex 14) also shows the number of circuits provided under the project between zones, toll centers on the microwave route and other towns that will be served by the UHF links. The microwave system is about 1,000 km long with a capacity of 960 channels working on duplicated radio link and equipment (1+1). It passes by 12 through-repeaters, and 14 terminal stations and drop repeaters. Long distance service has been designed to operate basically on STD working and multimetering system of call charging. However, appropri- ate pro--isions would allow operator-to-subscriber dialing (OTD) whenever requAi-ed, and full manual operations to areas with manual local exchanges. To provide this service, the project includes the installation of 14 long distance switching exchanges,with a total of 5,000 lines capacity and associated equipment in the local exchanges. Multiplexing and channel requirements for this period will be procured to cover the following purposes: Equivalent Number of Number TeleDhone Channels Fablic telephone circuits 700 700 tfblic telegraph and telex circuits 600 100 Leased telephone circuits 300 300 TV and radio order-wires 55 55 Radio program circuits 51 153 Maintenance circuits 39 39 1,347 10 reserve 134 1,461 Total (approximate) 1,500 channels Telephone Traffic, now being handled by carrier long distance circuits, will be handled after Program execution by 1,000 new telephone circuia This will release most of the existing carrier circuits, which.will4 be used to provide service to the small towns along the ANEX 10 Page 3 of 5 pages Television Transmission Implementation of the microwave system permits the use of its basic installations to convey television programs between 6 TV stations in Baghdad, Samawa, Basrah, Amara, Kirkuk and Mosul. This system will utilize two additional bearers (1+1) on the existing system for TV. C. Telegraph and Telex Services Modernization and development of the telegraph service and the introduction of telex service under the project will require the use of about 100 telephone channels of the microwave system for the provision of about 600 voice-frequency telegraph channels (VFT) at the initial stage. They will be used for telex, Gentex and future data transmission, for which reason the VFT channels would be suitable for 50 and 100 bauds speed -- i.e., 12 channels per system. The development of telex service will be based initially on three telex exchanges: one in Baghdad of 500 lines capacity, one in Mosul of 100 lines and one in Basrah of 100 lines. Telex subscribers are estimated to be 50 in 1971 and 1972, 400 in 1973, 500 in 1974, and 600 in 1975. D. International Service PT&T intends to bring about basic improvements in the interna- tional telegraph and telephone services by installing a satellite ground station in Iraq. The site for the station is likely to be near Baghdad and the station will be a standard INTELSAT-type of ground station with a steerable 80-100 feet antenna and will be working with the Indian Ocean satellite. It is expected that to start with telephone and telegraph circuits will be provided via the satellite to Bahrain, Lebanon, Pakistan, India, France and United Kingdom and at a later date to Japan and Germany. A microwave system will be installed to link Basrah with Kuwait. PT&T is also considering feasibility studies for connection to neighbouring countries viz Turkey, Jordan and Syria at the present time. E. Engineering Consultants Service Microwave Services International (MSI) of New Jersey/USA as consultants had carried out for the PT&T the detailed engineering of the long distance facilities including microwave, multiplex and long distance switching equipment. PT&T is retaining MSI for the supervision of the construction as well. PT&T is also discussing with COMSAT (Communi- cations Satellite Corporation) to engage them for engineering and super- vision of the ground satellite station. These services yet to be performed by MSI and the full scope of services for the ground station are included in the project. F. Costs Details of costs of the program and project are given in the Table 2 of this Annex. ANNEX 10 Table 1 IRAQ Page 4 of 5 pages Posts, Telegraphs & Telephones Administration (PT&T) List of new Automatic Exchanges. Installations during the period of 1971-1975 Existing (1970) Program TOWN Automatic Fiscal Year and its area Capacity Type * of service Baghdad area 63,018 Auto + Man. 10,000 1971 10,000 1972 18,000 1973 18,000 1974 4,000 1975 Mosul area 11,583 Auto + Man. 4,000 1973 Kirkuk area 5,155 Auto + Man. -- Basrah area 6,698 Auto + Man. 4,000- 1973 Amara area 1,346 Auto + Man 4,000 1975 Sulaimania area 1,486 Man. 4,000 1973 Erbill area 1,054 Man. 4,000 1972 Baquba area 1,677 Man. - Ramadi area 590 Man. - - Kut area 1,035 Auto + Man. 4,000 1973 Hilla area 2,347 Man. 4,000 1973 Karbala area 1,027 Man. 4,000 1972 Najaf area 2,130 Man. 4,000 1972 Diwaniya area 1,888 Man. 4,000 1972 Nasiriya area 1,481 Auto + Man. - - Total 100,000 * Automatic exchange will be installed in the main town of area. August 14, 1971 AN 10 Table 2 age > of 5 page. IRAq Ulot, Telegraph, a-d Telephone. (IT&T) Telecomunication Exp.lun Program (on thousands of Ilaqi lnars) Estimated Cost (Diot..rsement3) 1971 1972 1973 1914 1975 1976 1977 Tot..l ITEN L F T L F T L F T L F T L F T L F T L F T L F T 1. Local Servie 47. 785 32o 600 0 65 1-020 1,695 flL L_In .185 : 1.208 2003 440 28102'0 - - >462 5,221_ 8,683 a. LoC E.hange 55 310 365 70 390 460 125 650 775 161 914 1,075 135 768 903 60 375 435 606 3,407 4,013 b. Local Networka 260 16o 420 320 210 530 550 370 920 686 424 1,110 660 440 1,100 380 210 590 - - - 2,856 1,814 4,670 * 2 . L o n g i tan e S e r v i c e _ä-- 2 0 3 , j 9 6 , 2 2 1 3 3 1 a A d- l - - - -4 1 8 4 4 L 8 1 8 a. Micromave (Teleco), IF, multiplex & VFT - - 150 1,600 1,750 100 960 1,060 142 725 867 - ---- 392 3.285 3,677 b. Microave (TV) sp.r & pror,am facilltie.- 48 384 432 28 204 232 31 197 228 - - - - - - - 107 785 892 * c. L.D.D. 8wit.hing & multimetern-g - - - - - - - 156 60 756 114 405 519 158 495 653- -- - - - - 428 1,500 1,928 d. Carrier systema over pen wre routes 60 190 250 - - - - - - - - - - 60 190 250 e. Land, buildings & *ir-conditioning (for long distance nervice) - -- - - - - -406 204 6L0 451 10 461 - - - - - - - - - 857 214 1,071 3. International Service - - - 6 60 66 14 1.060 1208 j 1 216 - - - - - - .z 130 1,40 .. Mlcro-ave liok with Kuwait - - - 6 60 66 7 63 70 -- - - - - - - - - - - 13 123 136 b. Earth Satellite Statton (incl. international swltching center) - - - 141 997 1,138 35 181 216 - - - - - - - - - 176 1,178 1,354 4. Tele, Service -6 I1 Q 3 88 41 go 1 40 2000 240!-a L102_ 682 5. l and buildings & air-conditioning (Except 2e above) 10 1 l 100 170 230 140 3o. 29 408 200 150 3 - 6. Training Center - . 60 LO 32 6_ 22 L8 a _ý 2 20 - 114 j13 227 7. Engineering Consultants - 10 10 - -0 - 1 -- -11 15 1 8. Contingencie- 100 20 0 100 268 368 200 400 600 - - - o 304 _54 1,018 1,572 - Grand Total 325 h77 802 3-016 UU1 7.589 1,9 h 5.859 1.591 3.42 5.012 50 1 1 150 p Estieated Costa (Comissioned) 1. local Service - - - 575 8W01,375 705 990 1,695 847 1,338 2,185 795 1,208 2,003 540 885 1.425 - - - 3,462 5,221 8,683 2. Lon Di.tan.e serie- - - -- - - - - - -- - - 670 3,140 3,810 740 1,708 2,448 4341,126 1.560 - - - 1,844 5,974 7,818 3. internattona& Service - - -- - - - - 13 123 136 176 1,178 1,354 - - - - - - - - - 189 1,301 1,490 4. Telex Service-- - 6 3-- -1 a3 75 SR 43 270 313 40 200 240 - - - 102 580 682 5. Land & Boldtn 10 7 17 100 70 170 230 1,0 370 249 159 408 200 150 350 - - - 789 526 1,315 6. trn-Ing Center - 30 30 60 30 30 60 29 28 57 25 25 50 - - - - - - - 114 113 227 7. Engineering Consultants - - - - - - - - - -- 70 70 - 71 71 - - - - - - -- 141 141 8. _otingenci --- - -- 00 300 100 268 368 200 400 600 154 150 30 554 1,01B 1,572 * Grand Total - 61 837 U, 5 ,448 2.401 265 6.237 8 302 2.052 3840 7 7 054 Ite.s identified for proposed Bank loan. foreign exc.hage coponents; part only for i & b) Contingencies for long distance equipment (ites 2a, b, c & d) are about 5% Contigencies for local network, and other items are about 10% L;tated rtntlion payment0 J.ly 15, 19171 d ANNEX 11 IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Estimated Schedule of Disbursements of Proposed IBRD Loan (in thousands of US$) Undisbursed Calendar Year Disbursements Loan Balance --------------- US$--------------- 1971 3rd quarter - 27,500 4th quarter 100 27,,400 1972 1st quarter 550 26,850 2nd quarter 1,800 25,050 3rd quarter 2,710 22,340 4th quarter 2,960 19,380 1973 1st quarter 2,960 16,420 2nd quarter 1,750 14,670 3rd quarter 1,750 12,920 4th quarter 1,750 11,170 1974 1st quarter 1,750 9,420 2nd quarter 1,850 7,570 3rd quarter 1,850 5,720 4th quarter 1,850 3,870 1975 1st quarter 1,810 2,060 2nd quarter 700 1,360 3rd quarter 500 860 4th quarter 300 560 1976 1st quarter 140 420 2nd quarter 200 220 3rd quarter 200 20 4th quarter 20 - Assumptions: - Loan will be signed before September 30, 1971. - First down payments for cable contracts will become due during second quarter of 1972, and down payments for microwave supplier contracts between October 1971 and March 1972. - Down payments for ground satellite station in second quarter of 1972. Auaust 14. 1971  ANNEX 12 Page 1 of 3 pages IRAQ Posts, Telegraphs & Telephones Administration (PT&T) Justification A. Internal Financial Rate of Return of the Telecommunications Program The internal financial rate of return of 14.0% determined on page 2 of this Annex, is the discount rate which equalizes the present values of the incremental cash flows attributable to the program and the expenditures, both at 1972 price levels, and taking into consideration the increased revenue resulting from the increased traffic reflected in Annex 5. The incremental cash flows were arrived at by difference from the two streams of cash flows (net operating income before depreciation) with and without project execution considered for the average lifetime of the equipment to be provided by the project. The figures "'with project execution" are those shown on the forecast statements of profit and loss for 1972-1978 and for the subsequent three years assume a 10%, 5% and 5% growth of revenues. Conversely, the figures "without project execution" are the 1971 cash flow deficit since no revenue increases are assumed to be possible from the facilities installed by March 31, 1971. B. Internal Financial Rate of Return of only the Long Distance Facilities of the Project The calculation on page 3 of this Annex equalizes the stream of capital expenditures, together with the operating cash outlays attributable to the long distance facilities provided by the telecom- munications program (microwave network and spur connections), with that of the attributable revenues, both at the 1972 price levels. The analysis assumes an average useful lifetime of the facilities of 20 years beyond the construction period. As indicated on page 3 of this annex, the rates of return were calculated for three alternative assumptions for the long distance telephone traffic, by upwards and downwards variation of the projected number of telephone calls per circuit in the busy hour by 20% from the most likely traffic assumption. ANNEX 12 Page 2 of 3 pages IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Internal Financial Rate of Return of the Telecommunications Program (in thousands of Dinars) Cash flows Capital expenditures and Years ending corresponding investment Without With Net benefits of March 31 in working capital project project project (1) (2) (3) 3-(1+2) 1971 802 - - (802) 1972 1,4o4 854 616 (1,642) 1973 7,723 854 729 (7,848) 1974 6,360 854 1,296 (5,918) 1975 6,276 854 2,445 (4,685) 1976 7 854 3,281 2,420 1977 (148) 854 3,768 3,062 1978 85 854 4,320 3,381 1979 - 854 4,752 3,898 1980 - 854 4,990 4,136 1981 - 854 5,24o 4,386 1982 - 854 5,240 4,386 1983 (357) / 854 5,240 4,743 1984/1994 - 854 5,240 4,386 1995 (581) / 854 5,240 4,967 Internal financial rate of return 14.0% Net operating income deduction of depreciation. Residual value of earth station equipment which does not require replacement after ten years. Residual value of working capital. August 14, 1971 ANNEX 12 Page 3 of 3 pages IRAQ Posts, Telegraphs and Telephones Administration (PT&T) Internal Financial Rate of Return of only the Long Distance Facilities of the Project (in thousands of Dinars) INCREMENTAL Years ending Capital Operating Net March 31 Expenditures Cash Outlays Revenues Benefits 1973 3,988 54 84 (3,958) 1974 2,386 65 843 (1,608) 1975 1,835 189 1,801 (223) 1976 - 164 1,899 1,735 1977 - 164 2,1.7 1,983 1978 - 164 2,381 2,217 1979 - 164 2,531 2,367 1980 - 164 2,718 2,554 1981 - 164 2,757 2,593 1982 - 164 2,800 2,636 1983 - 164 2,847 2,683 1984 - 164 2,899 2,735 1985-1995 - 164 2,956 2,792 Internal financial rate of return 26.3% 1/ Including telephone revenues on the basis of eight 3-minute long distance calls in the busy hour per circuit. The internal financial rate of return, assuming 10 calls/busy hour per circuit, is 29.5%; assuming 12 calls/busy hour per circuit, 32.6%. Includes additional revenues and costs which can be specifically identified with the additional long distance facilities provided under this project. August 14, 1971  IRAQ TELECOMMUNICATION PROGRAM CONSTRUCTION SCHEDULES LOCAL SERVICES I / 1971 1972 1973 1974 1975 1976 SPECIFICATIONS BIDDING & CONTRACTING RECEPTION OF MATERIALS INSTALLATION TESTING & COMMISSIONING NOTE 1/ Local and Junction cable network and subscriber facilities. LONG DISTANCE SERVICES 2/ S 1971 1972 1973 1974 1975 1976 SPECIFICATIONS II BIDDING & CONTRACTING BUILDINGS RECEPTION OF EQUIPMENT z INSTALLATION Z TESTING & COMMISSIONING Note 2 / Microwave, multiplex and long distance switching equipment IBRD - 5430 (3R)  IRAQ MAIN LONG DISTANCE NETWORK MAIN MICROWAVE SYSTEM UHF LINKS TELEPHONE CIRCUITS D> S-! %ZAKHO iI z BAGHDAD TO ZONE CENTERS 94 120 48 98 DOHUK RETWEEN ZONE CENTERS 97 24l i SINJAR TALAFAR12/2 ARRUSH AGRA 6/24 MoSUL 2/24 12/24 - - -I - ZONE CENTERS TO TOIL CENTERS 20 20 3 56 20 355 58 ERILL MIRGASUR DIANA RAWANDOOZ 3141"8/48 12/24 12/24 OTHER TELEGRAPH, TELEX, AND GENTEX CIRCUITS 2RANIA KYESANIAK 248 48 SULAIMANIA BARZANIA 48 72 9 KIRKUK 4 2 4 SEKANYAN 24 24 ur1 12/24 HL8H 24 TO BAGHDAD CHENARO (MAP) z z JBRD -543)(4R>  ”「’&--&―너―  - 萬，引一一不一秤弘‘－可一－－一下司 -il&!’•、＇’、― ―·》＇、．- I-:｀呵一｀- --.!，、、C- -―一：.‘■、．’、― .-―。，■‘’■、k- -’一甲―l：一，■＇”、一：一、― -：惜‘-&‘、一》二一｝&l --―二一，,‘、－一■、― we→、、一＿、l 〕：，■‘，、■一■一I!kl ―》＇·、一＼■！,- -，、■、＿- 〕■／。化J魚， l&--J．〔瀘終＇己、嚼一― l;－一雜h，丫7」 ;,.rr■一一‘&｀一〕》― &,‘登’■，枕袖：·＿b’〕 If一必風卜～,＇抑：:.‘抆＿“」 -，一，＇匹乏豳曰二二c二二二悶二＝＝韋f兀i一■〕■＇一― -&,：方，&&,.;-－一＇■v- -／、遞f答；一：二馳·、．1- ―二＇·＇一日j電― ，、＇緝、―→．&I ,，工→＇他二～一•■＇- ／頸、爾＇戶■、＇■L－·彎「韁― ＇三”：。：&‘一‘一j＿、．、：:J盡I .（日＇，才‘_，·＇＇、．‘計：g吃i＇戶乏― -＼答／甘一戶。產，·）祕l■不l ―、、丰＇Ii、州〝■〞》J k..&―■芝― ―、j〞．:f～〝一、1卜口口六― -‘、＇〕劉一j―■一＿I ―、‘→刁．、！辭■。一― -‘。I&lr&1口口日71- 11&＇。，■‘一】―他l口口必＞- -j×lJ&./-l_.1口口C江I -！一‘＼〞i■，_：一＇。·：-：。0-：■六0- l,｀、一衫．、，…＇、．1―口口n,- ―屆～二11 IJ&I一『》！l口口― ―『、、1.1·：·J‘必一―l口口l -C‘、州權＇才了！&J&:：一，!；計日―■呂l ―哥；咸』｀//j_/&:；三f‘必：亡―援― -.：必】細粤一「’一‘卜·、．/-::&&：亡‘呈― -：么二＇方＿．」，－一‘邢匹一一卜舟：!&& -.f然：- ·―－一＇一J&？二．:＝一―- 二L一一＿____＿一日‘f＿日一一二江」一＿___________