Nepal - Second Telecommunications Project

/- [- FILE COPY DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. 72a-NEP NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT April 4, 1973 Asia Region This report was prep ied for official use only t- the Bank Group. It may not be published, quoted or cite? without Bank Group aut'torization. The Bank Group does not accept sesponsibility for the accuracy or completeness of ibe report. CURRENCY EQUIVALENTS Currency Unit - Nepalese Rupee (NR) US$1.00 - NRs 10.56 NR 1 - US$.095 NRs 1,000,000 - US$94,697 MEASURES EQUIVALENT 1 Kilometer (kn) - 0.621 statute mile FISCAL YEAR July 16 - July 15' 1/ TITLES AND ACRONYMS CB - Central Battery (Exchange) CTB - Commonwealth Telecommunications Board HF - High Frequency Radio (3-30 MHz) ISB - Independent Side Bank (HF Radio System) IT! - International Telecommunications Union MHz - Magahertz NTB - Nepal Telecommunications Board NTC - Nepal Telecommunications Corporation ODA - Overseas Development Administration (UK) PBX - Private Branch Exchange SSB - Single Side Band (HF Radio System) STD - Subscriber Trunk Dialing (Direct Distance Dialing) Telex- Teleprinter Exchange Switching System UHF - Ultra high Frequency Radio (300-3,000 MHz) VFT - Voice Frequency Telegraph VHF - Very High Frequency Radio (30-300 MHz) 1/ Approximately - based on lunar calendar. GLOSSARY OF TECHNICAL TERMS Carrier Telephony - System of providing a number of telephone (Multiplexing) circuits over one radio link, coaxial cable or pair of wires. Central Battery Exchange - A manual exchange using a central battery fot signaling and energizing the telephone trans- mitter. Concentrator - A unit permitting connection of a number of subscribers over one or more circuits to an exchange or international route. Crossbar - An automatic telephone exchange switching system utilizing a connecting matrix of the crossbar type with common-control registers. Drop Wire - A single-pair cable for connecting subscribers' premises to the nearest cable distribution point. Erlang - Unit of traffic measurement equivalent to 3,600 call seconds. Fill - Percentage of installed capacity of a cable (or telephone exch nge) actually in service. Independent Sideband - A system transmitting both sidebands without Radio System the carri.-r and with an independent channel or channels on each -4ueband. Lincompex - A linked compression expansion system used tc improve the transmission and signal noise ratio on HF radio systems. Magneto Exchange - One using AC current to both call the stbscriber and the exchange. Microwave - Covers all radio systems working at frequencies above 1,000 MHz. Multiplexing - See "Carrier Telephony" above. Single Sideband - A system transmitting one sideband and suppress- Radio System ing the carrier and other sideband during the process of modulation, thus economizing in power and bandwidth. Trailer Exchange - An exchange already installed l a container or trailer which can be transported to any desired location and brought into service without the need to erect a building and install the equipment. NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Table of Contents SUMMARY AND CONCLUSIONS ............................... i-it I. INTRODUCTION .......................................... 1 II. THE ECONOMY AND THE SECTOR ...... 2 The Country ................ 2 The Economy ...................................... 2 The Telecommunications Sector .................... 2 Existing Telecommunications Facilities ........... 3 Ongoing Works .................................... 4 III. THE PROGRAM AND THE PROJECT ........................... 6 The Program ...................................... 6 The Project ...................................... 6 Cost of the Project .............................. 6 Contingencies .................................... 7 Items for IDA Financing .......................... 8 Procurement ...................................... 8 Disbursements .................................... 9 Execution ........................................ 9 IV. JUSTIFICATION OF THE PROJECT .......................... 10 Demand for Telecommunications Service ............ 10 Least Cost Solution .............................. 12 Return on Investment ........ .................... 12 V. Thm BENEFICIARY ....................................... 13 Organization and Management ...................... 13 Staff and Training ............................... 13 Staff Levels ............................... 14 Accounting ...................................... 14 Audits ........................................... 15 Tariffs ......................................... 15 This report is based on information provided by the NTB and on the findings of a mission composed of Messrs. C.R. Dickenson and B. Holmgren which visited Nepal in September/October 1972. -2- Page No. VI. FINAINCES .............................................. 16 Past Finances .................................... 16 Financing Plan ................................... 17 Future Finances .................................. 19 Fiscal Impact .................................... 20 VII. RECONENDATIONS ....................................... 21 ANNEXS 1. Summary of the Law Estai,lishing NTB 2. International Statistical Data 3. Basic Data 4. Existiog Facilities and Ongoing Works 5. Annual Program Expenditures 6. Project Works 7. Estimated Schedule of Disbursements 8. Forecast of Demand for Subscriber Connections 9. Forecast of Telephone Exchange Capacity, Subscriber Connec tons and Extension Telephones 10. Performance Indicators 11. Telephone Trunk Revenue and Circuit Forecast 12. Rate of Return 13. Proposed Terms of Reference for Consultants 14. Principal Tariffs 15. Income Statements 16. Balance Sheets 17. Funds Flow Statements is. Notes and Assumptions on Financial Statements Io. Fiscal Impact of NTS's Operations CHIARTS De,and and Supply of Subscriber Connections - 7157 Organization - 7176 Telegraph Network - IlRD 1'1245 Tele-hone Network - IURD 10246 NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMNICATIONS PROJECT SUMMARY AND CONCLUSIONS I. The project appraised in this report consists of the Nepalese Government's second telecommunications cevelo pment plan whIch is scheduld to be carried out from July 1974 to July 1979. rhe estimated cost of the project is NRs 83.2 (US$7.9) million witi, a foreign exchange component of US$5.5 million'equivalznt which would be financed by the proposed credit. ii. The proposed credit would be the secoud for telecommuniclAions development in Nepal. The first proie(t floanced under CredLtt 166-ITEP 9 was initially delayed but is now proceediii; satisfactorily with completion expected in December 1974, about 18 months behind schedule. iii. Nepal has one of the lowest telephone densities In the world. There is at present virtually no long distance telephone service although limited facilities for message transmissioA by radio have been provided to the 78 districts. Improved facilities IuC'uding a long dista!nce telephone network to eastern Nepal are being provide( -ader the first: 1oje-t. The project now proposed for IDA financing will further supplement thse facilities and includes local exchange and network capacity for 10,600 subscribers connections, extension and improvement of the long distance telephone facilities to eastern Nepal, provision of long distancc telephone facilities to western Nepal, and additional facilities for telex subscribers. iv. Th borrower would be the Government of Nepal who would loan cte funds to the beneficiary, the Nepal Telecommunications Bonri (NTB), who would be responsible for the execution of the project. v. All procurement under the project would he by international com- petitive bidding with the exception of the purchase of minor items not exceeding US$50,000 in total valu.? and the provision of microwave stanahb equipment and telephone exchange extensions costing about US$0.5 million where NTB proposes for reasons of compatibility and economy to place orders with the original suppliers. avi. The selection of areas for service has been based on the concen- tration of population, agriculture production, industry, administration, and tourism. The sizes of the exchanges and the number of long distance yr circuits have In the absence of historizal records been related to demo- *rgraphic considerations and demand in similar areas of other developing 1 countries. The rate of return on the project is estimated at about 2OX. vii. Nepal's telecommunications development is in its very early stages. The limited facilities provided for message transmission to tne districts are operat'.g at a considerable loss. The long distance network to be installed under the first project which will contribute substantially to overall telephone revenues has rot yet been completed and revenues from the second project will only make an appreciable impact towards the end of the construction period: also, economies in scale will only become effective during the later stages of project construction. For these reasons the return on NTR's net fixed assets is only expected to reach a satisfactory level by FY M98O but should subsequently show a continuing improvement. tAs a result of the program, the gross value of NTB's plant in operation will morp than quadruple. viii. The project is suitable for an IDA credit of US$5.5 million to be relent to the beneficiary for a term of 20 years, including a five-year grace period at ai interest rate of 7-1/47. NPAL NEPAL TFLECOMML¿NICATIONS BOJARD (NTB.) APPPAISAL . A SECOND T MlATTO PROJG I. INTRODUCTLflN 1.01 The Neialese Government, in Senterber 1972, requested tDA fi,incing for its second telecrnunications develonen' plan which is whed- uled to be carried out from July 1074 to Julv 1979. The ptojEct, wh½ i t'is second Dlan, will &tentd teienhone commiunications into the xester; art of NePnal and provide additionat capacity i ed growtn 10 those are. in central Nena. and the easteri Terai wher f,4cilltles aiready exist or are being provided under thefirRt develpment pian (first project). 1.02 The estimate,.d cost of rhe project iN Nrs j3.2 . à i ill . The foreicn ex.change cornonent of NPs 3.Z åS$5. million wou1, b fi<n,rd by the proDosed credit of US$5.5 million emuiva!ent. Thte eneficiare ui1d be the Nepal Teleconunications Board (NTB). NTh xol:d be responsible fnr project execution. 1.03 The proposedý credit woul e< T/', second fkr : dévelopment in Nepal. The previous credit ,iNE, --or i. , ?million, anproved in November 1969, procvided part of thc fcrrein exch:ae cfoOnent. for tlhe first project which was oririnal it e-si.ned to 1-e undertaken durins- t'he perind July 1968 to Julv 1973. Afterinitial delvs in tkinr the credIr effective due to delay in signing ar , eenent with India for some of tie kid provisions for the nroject, and delavs in taking proncurerent acuion, the first p,roiect is now procepdin£, satisfactorilv. Fin?l completion is now exrecte3 :)ecember 1974, some 1 ronths behind sche-lue. Thp delay in compl.etion. of the first projecr wilI not affect com:rencenent of th. second project where, in the early stages, w .ok 11l largel be corcerner wth nrocure.:Ient and erection of bulilings. In orer, ho:ever, to .void delaving certain ir:por* tant sections of the project, and 1earing .n .ind the censiderable rinc involved in obtaining bids, subse.uent ianufacture and 'liery of te equ i nå'nt, it is desirabl e that 4TR ,houlcd Initiate -rrcient iction Tor the scor oroject Pariv fi 1973. 1,14 This report is based on infornation pr(ovided iy the i e . , on t.e findings of a nission conposed of Messts. C. R. F,ickenson and B. loimgren which visited Neoal in September/Octob(-r 1972. .. •> _ тг. �iгг_ Fсг}�:�,+n, ��..,� т�:�: г;,.:гт�,э> 'Г ��П;УПi _, ' Т',е Kins�гirrэ оЕ T:e�al fnrr.s ,1Е: r7�,t-и'Е•�t r. гtапгlг het4reen China t: �;,t� ггЕгrt`1 �пд гnдlн to thr� sout�. Т}и, cnээntr�. е�Тг�пгi� froг^ t�hr Тегдi ,� :.Е; ns : n ihe sn�1t� rhrou�;lг Che 51+:.iI i}: 'г i 1 i s =,п<! "`з'i:э?:1i,1reL т^vur.tri;,�s to с}.r. �•rя�::, Е,* tf�r� ~11г�а1дv�s ,эпд Es� ir r.�;,::Е��и�гэrе, su1�lг�ct hr,t.lг to tпго- <'.:-�i-`1f С аг.:' �•i'.. ;Lic exLrc�m.:s. ';'i:c nOVU! эг i0:: at ргЕ�sг�гlt �St�,.l•Etcc? ЗТ. .. ` г�.t,:с`:± is ^rnwin? �1L abПUt _.�'; ;н`r ar,�uc�. 1'hг•rь� iя �:n�-iП miг;raCion t rnr t`,е iэ;�hi_пид� to th� fE`r[�In rE�:.tr:,i t•я11е•:-: ппсf t„г� TE�r11 .•.I�ti,гs :Ег�д .. t. ,. !,лs 1a r.`,Е� лlst heen аэ� in.r г tь.: ог гг' н.:;.�.., `?'л^', 'Г1t'rг С:ahi л!г. ve �.• -' i+ Гt.1:'� DU�u' Яt10Тг гГР55ttГГг,. ' . :в• . .. ,. �тнs ичt_та�ад г�'. ;�;,.nЧ�';� ...s1.1io-: in 1� 'Э а->э, is ь-r��tirin? an.^,иа]1v , �'r� . ... ,.. :�az be:-ns. Per c;.n;r�, ;.-,п-,те is �be�.z� �iS�70-г-C. 'Рпе prin-- ,,.. _: .�..эГ,ог:�_с дcti,,rit? .s �Gz-icu����-�г �тп�сr. Эсс�,�^.`s for ,'09 о: tлtal. �DP. ,_ :э�.. г,д:зг, cr�ps are ri;.�д, iute, su�'�э:', oi1 sa.ds зr.с Lc�!,accr �а4�с.1 ar° '--э:��:,'v т,г��.:сед in th� ?дsteтn Гаrз:. ^`,"•^ iз д�sо sоп:Е �mr��iп^ о: timb�r � •i � r� ;? ^1� ?_*!С� WE'��Е!Гl 3iE'-ЗS. __� Т�S:.Т^�, 'rT[,i.СП .. ^OP.i'�^,2.^Jl�-:l� �:' rr6 •'1:.�,ап� � _��1 Э .."З t�Y10 i.3LI3Лiд:г'jц .'3�i�y, �:о.^. �. ....�5 �t`nц* �+ � Oi CAt. �,, iiP. ,: т� �г., �r• �� i-.. ,', i��`� per �геяr. ..s Ье;•-i�:=.,� г:� �.о аssилэе i.^э,�с rt �-iг:r; iл the . �_ :'.;�г� _ нСU''г(�^!V -t^::� Ioi^`:?.FЛ�1 Е.'.Х,С�._^г'•= аэI'f:1.^.г,3• ,� �r . . ... 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ГvЕг .. w?t}'. :Е�э�,. гэr�' ir�tr�rrat innгll sE�пrices LE, • ,� г t��s. г i� iч .э:г;п t^г 1��, e�r� i nг auihi,ri ��� `гэг pri•tntelv-c �>erпted �•� �t<;�Сiг•г:, fa;.'i,.:?.ii��. „;иr.,э•!-tr1 nf tiic 1aw r�stahlis!:iuF, :аГВ iS . ,� г Г. г f. � . 2,06 The pol i --y rJ i -.-e c x- -i ori c, f NT b 's t) per.ýtt i or. zz is ves t. t-. ii b ck; rti of Directors, of flv& Piemben; under the ýha..mar3«!,it ffi# Seeretary för, Othe:r jkýI!Ibcrs of 111c gcald ilk, 'N`j ;,; k i-., era! Manager; the Uytter-SeemtaKes 0 the å~tiles ni länmwe, Cans r- en! TiWuacrp and che Vrenoc 0 100 mrtw-!-ýr: m,ki Wäs Fmancial Cmitrniler is äcrrcm-; ef -.lic 01i ~ -s, vill i om annual budget approprintion: taåkfå te',,,Åstr.cits are subject ~~ w,..ýena,cmt. zqgrovab Recrultment and disAss" of gaztt(ed slaU is ö6-a't ,ätli the Public 5crvlce NiB's htaffing ax:ii are discussed in Chsprer V. ile present provide a yeý:.scnab c degree 0f autonomy vitý,lii NIIý for im day-o-av ~Mng, 2.0 7 Guverm eu,: t-, iie,! coas-;derkiýký p-:-oviding Z,,,r '1k UVý,rsicrt of NU Inr,Y a ý'IC-pornticnt. Tio inslå have hoveram- smirrel over its finsmar and W! al,zclle 01) T.c.rs.-minel ~lilveris. sju I t ty (-Ånershlp would mnknu- in be vestpr 1, bikt riýcrc for AV kripOver pamöý-ý!nnl 'nn iv, `ler c, crýý,)rat,Lon alle, B 01 t-,- cý;. `h :ý ' J! a i --, å r. , t f -- t; e Board would be the Ge .. r,j. «sn 0 t hc r lji -, CC!-C. rc. ou ;: of. ý.1. mwker"ip of flvc xjl : 3. be Go-vijrr4,ie.i i The ti,in Act, under whých Kopal 1'elecaamLaeetfotitý Corporation ýNT_3 wrild be ervated, Ims been demikpea to in fo- general appljräåtýor; te ochex- i-tråd Ar Cir the are of a bnoid nac,irt2 anýi the tm)eracion st- NTC .!-,eu WVJ. t'n rules t.-; is&Nled tv COvernmna and arArter 0=1 by Se 0_.ý-1 fruin el! ircý . i t h,is Seen ai=t I klänn wgotiactme thar a amv at any prup s et Wes ar art i el es app Ii cab le m the T21 ec orrnun. i c ý._ t 7 ulsý. (x,... !No rat i OTI be ;a: te On-, As.;ociatimi viteciently in for :ý3m-neråý befer., 1111i, :.IL ,ops ý ae i JA t i r- or triephams C1131=1 Inlån Upé i m in W! V(If- t;11';y StitjeS 00 !SCA 10=0C CSSentia',15' r17a111,11DIC Ä`_ o 'eW and at Inesprir irartaviiPf ~ ~7 tliistanc(-ý r.ýcwcrk fer nnin-i' co-tversations. Vie al. July 1972 was .`ý6 p.-i 400 one ef cie loaest. in WIJ.:),., -- veU. rhe average fý,i ýc:f i Pýia7 tÄnneX 2). ån' qgaliL! Of t11C teleynne WF-d= 11 Ma.- sonsblv satisfac.torv ý)ut_ tienma is run Wing r-c. Ilie waiting mer. Were ma,ýnrained, J-s 2.59 ädnimum cArnanic:,tioiis :raåltily zý,;c.J Inr lelaggrapk, ri) been provided by dLans HY kradio Uråliý,h aperate 01! .1 pni:L-'_,,i-(_- basis . These stxlon,., avz- i),,,er.",odded 31 the w--1!rl centers and J;i! .)f vnice transmission 1( ads ro constderablc of 2.10 The incernuknal telecommunicatioms services are at n;Ä saLlsfactory In-Mat the land ILlne ltn,ýia 1:; sti*i-jjt-,ct rZ) due ta landslides aimJ i'luýpdirkg ötrfnkz utuj vu-,(-;ocn scäs,ý>n an,11 i:n2 11F radlo services de net provide ~Tmm craasnisslark standards Enr pharke service. - 4 - ^.11 м.1г 1t??,45 stlows thг гi�' rяdio nntwoTk zпд Иа� 1П246 the telePhone 1;:c11ft1es .�xts•.in[! апд hei:!г prwlc?гд ur.dгr t5г first and sel�ond rгojects. hлslc с}аfз апц sup�'1e�entaгy infeтma*_icr. яге �:ven i^ �nnexes 3 ��n�Э 4 and �ге brfeflv 4�t out �e1nw. г.я) i.D�11 TeieFtlune SeгviCe '.. 1 � Т},е лпlу rгlер}lопе ехсi.лпг..еs at prыsf•n,• ,г on�rдtion :ire tao •г1.�.t•,-г) Ст'с�-:';i`1т аиСо^latic telephone ехсhаг••^е� яг kat`тталди апli Pat:зn,Y��.1vir.c :.ap.�r.tties af 4,4Пг.� зтlд cit�(1 iines, гl�sryгcl?vг>iy, д-Т+}iг3-CFS t,anual exchaлge :[ }3it•�С1гяг:3г ап� tпur �э�rv sэ:гзil *,агггаi ��:-.г:1�r.s;rs with :1 total caдlacit� nf ;� 1iг,г`: �+:,11Ссг} д1�гц сiгl� lягд 1+•,` гс,,гtг tn Тпдiа. Th� tnГ,t; гп_^,tдllед г•;с�1л*г,�г2 саплг. i cv дt .1и7-: 147'Z wдs `1 ,GSn, ;'i t!1 4,SFr] cnanecred зl:bscr±bers .�:1гs: t.�? nгг•гг'�rr of �гlгni:or.c� in �гrvi�'г tct;lleгf F,,75i). •'i г ,эu-tN^.С;1+�_е• :С1г,1�огЕ: `ег', г nterna- '.1 ' 'г'�г n")v гэ�litit .., lc•,r, дfчt:гг;гг rr,',гм avaiiзblг• ., tL+� г�?,в -: . !:`г1г} i:?гЕ• 1 гnГ� I!1(::;•<?t1!}э1 ?:Э д Э э.G.,1Р ; r� Т п:� }'i. TI11 � :111E' :Э1.FО СПп-' .>r{�. .'lt ,t„ ..'^А1: .Pic'1�"C�tt> •,ХГ};г .. г` . �.'}1 '�7С}`Г.13Пг2U. ThF'гf t4 ;1 LC1CH1 � f`. t-ггсЭЭi:.; wh:ch ar•• опеl'дt!`г' г:г�rn:, :1v. �г� ?21�_!.!'1_AI Тг'.1Сс�;-:3��}1 }'3�:1LSг iE`,, , ,'! . •'•е`. д�`ri'. .li21.^.1 V Г:(i'. , j ct . �i ( . . a�4:..Y :}Т� .`эh SL �Э+.:•^.'... . }�}1� ге !, t ,• .-, �п�гп1 st ati:>т,s l±...ид1+. , си �,. Э� , whi''г1 з] sn n-.•rzz г�, as �?.,�• г_'..�.�тг�., аЭ.г. 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" ': Тг1 г? г{t.�. � - • -. , . . . - , (�. ,..,.;Т � , гС, 1 г.г Г r1•..� 1't[1�� 1.1'.э�` �г• 1Пд{.1 ,-,� � гсг+..г. гi• . r , ..,! г�. , 'iF г„-�iг� .. ,l.C.,,1.U,1г. �.1,i � ,... , -,..• г��,;�t • ., l,.э ..Э, г. ,.эгг-лV, !1:l: `;l Г1+,<, t:ak'..�ij,laгЗl . � . . • , �,.,. . �.,_�, .. . . Lo }° . . . ,. r,n• i�:•v. ,- . , .� ' �"' :� :г':fr'д�..t(' .. .,,� г•''1г• _.СГ�1"!il"r Ct.lif''It/1r .�ГUiF1. � . . ..�э , . . .� 1i. .>>2 L:'i t t ;' •-.,'ь. • г '('! Р nr ' . .. . .. . 1 ;(` l . 11'г:г' а.':�:rP11:�1t7n� , . . . , .. . .. , ..г.г � 2 � + ..!Cl'гТ't ':' И', t г� . •:! Гi`<1$t'П cr1I�8Ct LY "f ,�� г1э.lПi111 - 5 exchange, and two new automatic exchanges. Tn addition, eight manual ex- changes wit, a total capacity of I 1nO lir-s will be provided. A new maiwal International and domestic trunk exchanpe is nearinp completion at Kathmandu. A new kFithriandu-Birgunj microwave system will link un with microwave routes to Calcutta and Delhi and provide a high quality international service. A new microwave route from Kathmandu to Birataap.,ar will serve a number of tot,ms in the eastern Terai. A microwave routo is also being establishcd hetween Kathmandu and Pokhara. 11F radio telpohone links are beiny, provided to Bhairawa and Nepalganj. Details of the onRoinp expaAsion and expecti-d completion dates are given in Annex 4. Thsse works will be completed by December 1974. -- 6 - ITI. T!'I Pi.C'A," l' TV- P " C rTh Prosi-r the prorar, fr the julv 173-0 Iwrion wssista vi Ah p:ping . ler r -n flr-.t prt5 (ct (see par"r ..1? above) it.: t reposed r4 "rc' vt desc r SeA ~in nrscra' 3..' hi 1. The cost Ni lA tro. :r1ar re ro o Nte s 12.7 -rillion (:') ion) iciCICn ; irelsm :v' o'ent of S,.s rillint ''ni'e un'l : tot: capital pror-M iapor 0 ;erli' m- M SM M at . ä~evler- r Tt, t i o ' y - s ' : I r C C- Cfn"onre exch:i )n cg)pen ut---san r t prov<,.e abo-, . conctions; provision of and subscribcrs ra . i t*E rnatt ni ncic ! our m- m 'r reS r - ' * flo, 3 :1 rer.,it i f r:f ' . i - '. .1 i i t yr ec:A':rr r' tw s :2 i -rei - 1f u; . 5 'ut...,a e i en i -7- (NRs million) (USA thousand) % of Total Local Foreign Total Local Foreign Total Expenditure Local Exchange Equipment 4.12 13.96 18.08 390 1,322 1,712 - Distribution Network 3.55 12.76 16.31 316 1,20.8 1,544 24 Subscribers' Apparatus .54 3.40 3.94 51 322 373 6 Microwave & I'IF/VHF .Svstems 1.87 9.94 11.81 177 Q41 1,113 18 HF Radio .86 5.50 6.36 81 521 602 10 Line Circuits .39 .59 .98 37 56 93 1 long Distance Switching .38 1.11 1.40 36 105 '41 Telex, Tele- craphs & Data .20 2.03 2.23 19 192 211 3 Vehicles, Tools, Testing & Training .18 1.53 1.71 17 145 162 Sites & Buildings 3.75 - 3.75 356 - 356 Subtotal 15.84 50.82 66.66 1, "l 4,812 6,312 10' Physical Con- tingencies 2-1/2% .11 1.27 1.68 39 120 1n Price Contin- gencies 12% - 6.09 6.09 - 568 568 (overseas pur- chases) Customs NutIes 8.72 - 8.72 826 - 826 T,TN1. 24.97 58.18 83.15 2 3651 * 6 3. n4 The project cost estimates for inorted equinment and services are b,ased on NTB's experience of prices obtained for the on!oin,. project and on rpcent exrerience of local expenditure for civil %orks, buildings and installation. These estimiates are reasonable. Customs duties of 15'. on imported equipment have been included in the project costs. Contingencies .5 A 12% price contingency has been allowed for oversea; purchases to allow for possible price increases including the effects v' rece nt changes in currency parities. Works will largely be carried out by NTB's own staff which, as a result of the transfer from Government to NT!r, recently received substantial wage increases reflecting an increase in hours of duty and -rodutr rv! tv. Further impovements in productivitv uithin ';TMs '1eration -,rav'ranhb 5'.,_6) will appl- to constructtn ;taff and will, I is considered :ult in cost navints at lrast equivalent to pesible wa.e increases durin tbe nroject reriod. Local cost increases for the project are therefore unlikelv to be sipnificant. The project works are the maximurn that :TP is to urdertake and possible increases in <mecific areas are likelv to be cc enated for hv reduction elsevher. The provisten for ry,sical conttn- 3 in 'oth loc al and overseas exrerdi ture has therkForo been 1 i -ited -1! '. Provislott his been made fer n,.ible incre,ases i customs dt i. ts r~u Iltini from nrice afI quattity variations for oversnas purclses. !r U'\Fnancinr ' t cf U S . . , n I len, vi i ou CiJ' 11th, f1,1 tnn, 1 , if he n n,e e-t f' tbe proit.et, ,rr r d. The local cost wi I e CC,1 re:.urces . ht iter; nlr,'aposed for I1 *'i n. re c wne Service h qvi i'r'lr equivnent 1 - L * re', accesmories an.d suÉ'c riber' rau 1.5. [:a -1i: 1 ' i u 7 F 'V1 T. v' r, s, r ::nu-.i r e xrin; e i /a r.s , r crn w.ire circuits, * 10 ' nrt : -ot. would be i i:nter :i tu,;i I cor.ze t i i ' * . ir * t - n /1 l.\ Tu 1 rins ter Procurerment except tor · . nw e: ing U 50,n M n a re-.ate a! A' ... n '.. oy 1 01O, a1f, r Lh fol lowtin cf,,i!!,ent ext(msions to 1e contracted ral~ 'uzrlr', on ,rour.ýs of cor'at ibilitv anl the econo.nies t10 us of existin corlon e"uirrient, power suppi les, rack (a) Microv;ave and multiplex enuinnl*rent estim.itedl to cost 1V250,0GO to extend the svstern nurchased,1 throurh international tender under Credit l-NFP: (b) telephone ,witchinc, equipent estinated te rost US$80,000 to extend an exchanre nrovided throu.h Indian aid; and (c) telenhone eychange interface and switc'ýti enuipment estimated to cost US$130,00 to allow intoc'rktin, with and extension of two exchinres nrnvided`l by tIS AI after limted international t'-ndrr. There 1s a 5% customq dttv nreferrnce for gonods frnoi comonwealth countri,es. but NTB will evaluate all tenders on the basis of C.I.Y. price. Disbursements 3.08 The proposed InA credit would be trdi!bvrsed acains:t thw C.I.F. cost of iri-orted equipmpnt and materials and th- foreirn exchan;, costs of scrvlrcs and trainin<. Estirated disbursennt; from th, Pronosed credit are shown in Annex 7. As the pro.ect is part of a continuin!, investnent DroRran, it Is proposed that ar, savinrs he midc available aftor consultatton with IDA, for the purchasc of a iitional itors ci th sanme tvre. f' The oro i ct wiI m !inl bi 3 :rur hv NTo,'c tw f-e bv ta :\ssisra, 1 1 1io reiuired fron 'the contractorq for th,e irRta1 lat jon o: tht- nicrow.ive 'vstem, and the alltmatic telenowne xhan<-s. Assi :tance -iI' alqo be rec,irot for tbe oetailed er"ncvri!- o" the lut r'n.tic tel t'!)Hon wexchanes, zir<-aratiron, of s-pcifiationn and Pval,iitinn, nf Hds. NT i s taklu rinng i t- ,i on t :t1i :.' suitable tcoernrurint -tin- wftch;t. if s: : : r i - lo'- o -I 1,. With the servfces of tlhis nxnert and witc t)c in- i! latfi anA tr.iirin- assistanrce to be -rovi,!d undfr eeninn,t contrrt, ! di'oul he a,e to carr- out the nrojecrt. an subso"uently onerate the networ,. - tn - . т�•. .Т1'^-,�'1r'гг,�?•т,, г}т• .,-11. г^tlТ�,�..� .'" Т'ьг гroi. гt {s iг�ten(lr+�'. tr, �тrсп•i<1,� ir.frnвCr;ь: сигг r:sс,г,г :.+] :и г_'.гс suc•г+• :<:fr;1 rjevгlrrm,ëut пС inr?usCr'г. г�+;гiгиltиГг .zn�: Са�+ьГt•эг,. i•;ыУ � rc•sгr,C чг•;ь,lrryu.►t�` cгкгmunlcatinп `ягil.itic�a- .;г'riг�rь,iv hlьТсle�r �rг�durtirn, ciisCrihu- t:o�� апд marketing. Thгre is also �^е«�,9 °or ir+prove:l and нкrдг.дег9 �ele- �опц;ипlг,пtiо�г faeili+.ies in orcier С,о ^�е+>', +.пе г�циireг:е-�`G of ac�r,ir,:�l.ra- cio�, h�a2th �гiд other social зervices. •.г�� ��!!ь' ^Гf>jг'гС л'�11 с'Х(CRG Cc•i�'^11U1:,. �.1C1I1C1(. 7г`iГ� И•t."-L�`ТГ \PS�d1 л; �1 ot ;(+r .ircas �rrn fuiг., rri:lh}е :ос,�: .. �д 1г,.;� аЭi :t;+nc.• serr-i,-r� fnг ..1.,(. 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Г,.'-г,.у . п''� i.r �г., � ,,.,., � cn�,.,.Г:,.,r ..1., , ., 'г•г- ,. . ..• !: г' .:`г'�`г,У 1(+ П: f•, Г•гр;� i 1г, гn.ь';i�•:.'ti г• . � ь (,�гiггs <гГ п:ь+••;itгьг;( fr�r �13tг- �,-.,, ., • з•-,,,,;г 1г` сггг,гs ,. г_',гУ=:с i+vri,..ь.,,�; �:i11 nг,� ,�,гСегi:i�lс ,г-, , г. +;r.i�.� n' С��,•� •�r'(�`г�•! t(,г i}с`V ir.гlu,iг игг!�• 3г1� пi .г�=� LcC:1I . г r�г е,i.ег_Т;' +чг ГnППССI 1<+: '. +,7fi(Y]�L IR ё,Р?7(Т ;<. 4. n4 Vhilp recent ý,r(-jtb 1r ]vcnl Iorýnv,l ffir K-itýtrindkt anký 1, 1 n has, hern at 17` prr ;Rflnur_ som( r(-,tuctinn m-v: he ä' ter t:li, 17ý1t V nlinnes of dcv,,lonr-ent. In foreca%r4r- futiert- r.,cltiire.rt,.n! or .11ý -lre.t- i e-rqvmitive In- r-r annur ;ýrrivrli rýic !-i- tnplic.A. Annc,, ý-ý .,cts, ,)lxt the rf»,iiiirf,it,rt- as rp1 itc,! tc. ti- ccnqi,Icrat nul linv ; i ri C-Is and the rrecvniwý tix, rarayýriril-. `A ' nnex 11 cives details of t.ý,e -iro- nosed exchnwýe inntal.lations anr; Pgtirat,ý<i ronnertions. Crnwt11 dcmai,d ant! actual and exinveteå achievpment Is sl-ywu ýrnphfrally in Uhart 71;)-,. Vver witli the mw;ervative 107 r-r arnur In d-lamt, fN-11V 143~ ef tet-il Ornand will be met h- thi, end 0ý 1,17,1. Vip ,,ill thnn be about MP per In" penple whirýi st411 verv 1(--; 4v4-ii ctx-j-irc,! ufth orher develrininr enttritrics. ir,IIC.ltnr,; sl.owin, tIlv ex- rcrtp<! achlevor-rrt Jiirln<ý tliv enn,,rrurtion nerin-i are rlx,X-r ii, Annex 11?. 1.01m P-nrarer .117 The towiis selert,-cl fer tci, n-tvorks will nomallv '- tb(~ tt- wiýl, !oral -rui(, . I on il 4 n tancc r1 rcutt requi renentq f nr ý,r, c-~,,,- t Inc Yl-tvo vst !mntcfl of, the bast r, ot Ilie art i cir-i t( scri b-,r rýNuncc ov-, and x-1 - FartorR hased ofi the of ,ýr-ilar rotåntri,-, for lýle -ri,i wit!rirt and tern'nätifi" trunk trnffir. Fcrccn-;rý c4' cir,--iir art, ;PI car in Anney: 11. (cý Telex <ýervicr r? -;-iit dtv ,-inkl ror t-, l t rv i t- i i t:i ä7, (-t, ,0 mt! 30 - J l cli 1r 1 v 1 , i n t1.3t t"- SiV- rf t,,(, rik-twilri- -,;i'l -rr- i -rrvi,-rl t c -cr nniýnr, 'i iv 4 ý C rv rc,ý u r tr it n, '----r t nllrvfii,, for interrinti-nal c l I I rr I I s 1) t W, cýur;cril,cr-, cintiectc<i to C-. 1ý iýz ~repn.;o(1 (4) -ý11 fl Cx t (t n dc iut(,Tr-ttje dialirr (vider Cik, thir(1 Ievelor)rt-nt Vir -ro-ft', -aru-rn for rht- Lýtcrnntiorýil ;-rvf. i-:ý an arnwil inerensp nf I ',- for te i enlwn,, atiti i fn- t PI ,-rx);, tr if f S mc 9`- nf existin7 tc!pnhrivc. ancý 6(M of T n(1 i -i. Vic PrIT-arv rontr- 'pr iiitern tn,r,! traFfic i- vin i !-!nýj u-c tii TrCHII i'; -ubicct tri interruptien DLHT- le, mn,smi:i vwýclns, -rejecr, toý,r>tl,e.r k-i tIl -in ~ive in-rovrrl relinbi i i t- 5o11n-ii- t'-t- v,,- 1301-nr11 nrr i re t t-ii I I nrov i cle nilt, i t i v-vi i t-.,c i Ird il,-,rc:l,t clrr't;f!- ý--iritv tr 1-,ý th- --pcreJ -rovtl ever rho, nr,ij..(- rkorici. } � Э ь � 1,, 1п '^}ге ,део:зlеsе Г.overn�ьent ha> дпсi•Эгг'. tn esCahlish ar, s1 ternacive тnц[г i пг iпtегпдtiопдl telecoпrr.runic�зCions trяf fic to couгttтies ot�:rr t}г.зп Тгг�1а iF n�вst'�1е vi:► };опр �(оп1;: аltгrпаСс•1и v[.г Thгrtlдna. ,1 пг•и• iir�f:nower 1S3 Е}Т' link саглhlе of 1,rovidiп^ t:�ree snecch дг.д aix tгlе^ra1�i: сЕз.�зппrls iг, ir,- г1и;lес} in the nroiect and wi11 rерlясе th� r�iчt�n г еqиг'�г�епС и�гс�1 for telox .ind С.еlепгяр}t private +гiтг sгrvices ог?}�. Т}гс rylisCin� с�с,г:#1�г;епС �гi1l Lt,en hP п`fective2v used for internяl sгrvlc�s. ',с:з :г Cntit S;,lution 4.?1 `n ,rder tn г^eet the forecasC. дг>г^:гг.,+ �rr Gcrvic.• at le•п�: c:,sr it is п,чг•s-ап> tп г!яkе the сrттесt Сесiзnг!л^1сгз1/егппслiг deci'.;ons +:1+г�п пlял.пir.� t}зг hдsic netwoтk structure апгi chen tп fс2lла• an ппсi� i: in^ n�tlз с'ith Гг'апг'ct сп thп дс>sicn, dtt*.er.siпn� лпд Cir•,inE, о` t}гг vягlпиs. corпl,пnerts instяlled аппиаllt• .�а narC пf the contlм:пus г.'evelпrca�nt пе'о�rлг�. •.1' ;,lthou h neti.•отk cic•�i:^п is ц ^ • � in i Cs гnri 5Lя ,es, i rn;:�°,:r�tя� !eci- ��nns ',;vг 4�rг>n taE-en ;гпс1 а nяtionzl nиг^hcrin� л^�'. тcuCiriF f�1:.n ��,г�'ед c,UL wir°: ;'sitдз,l+� trдn5:^i5slпп staпrЭards :,пгi his�>•з г•;з t+i� ..�Р с,г гг�гi.а.,п сг,ссгаl �>rr.?r^�е•.t. .>лth existtп�, automдtic ехгhггг^.г>� �гс• of thг� сnт�сп rnCrпl *.v^�. Т}:Р chпtcF л� ссппг^лп сопСrлl eautt•nrnr `пr t1+r> г�хсh:+г,^rs ,-.rui n+icc-c,- ••я�•r дпд l"г?г radlo епиfРтепС for the 1пп г,.'.t�:tяnce пгt+.пrг: is sc,un,i1_и h�зseгi з�г' is t�.г� }�act спвt �oluti�n. ..' з tn ��,г� с,Gг лf !�acF,r.,зru. :з�г• пг`и гпгГlrч 1�с'�] ,.�...:,,~:, •г .� ^_.f,,,- Gtцг?•• пт :hc rзпSС егпппг^tc �,,э5i� fr>г ��:tигг., r�vt•.п,,;-r.. ; ..+:; 1•с•ггз ^,,��.� `.i.e,'. r+: пт�c�rnt vд}це studics пf :зlt�rпяtз;с': п•�•`г :, . !�li.+.'. . �_„••.!t � •�'.,�с'. ;hг ;��11ег г>�:сhзтюеs яrг> hein�� .,, :�r�� �ri �tt: : �. ? . .,, ,., • , ti, .. i r�. -:гг^У� ,-�,�Г� •�,г`ц1а �i'SL1rг' 1PASC Спвг_. •. . иSы г�f tгг>1iг•Г � ..�. .. . `.•г'{!ыt'f� .. � :�•' 1ч ,,ati`ier? Ь•. tззп . гг^г� nu[si:,n��irг• �?г•гаг�г . _+ • � • . I �rs .. , ._.rf^ <�Г••, .. . >ггс[f, .... :i�. , .� �, с`�г� r�v�>г.:� .г.t.. . .:с , .•?t':?^, . 1'• L'iг• пГп. . . . :, r 5•'г . . cN. '�^Г С''�• +.`� . гi^ . ,�a [ t•„ � .. ' ,, . • . :, � ni_rn�• ,Е,,. :,aiп�,� п+г. ,tir,rмtl �r, i •�' ar: t�гi^г. , �:. ,, , , r , • . . с �,п` ::,�,,,з:~ ':г ые innr,eпt пгс,с,•s:; . • • . � г:� • ;с° �,г � . • . ��У� .. Уг .;fГП Са:. !:,r , . �jг�i С -- i•.гЕг„ .а �., г .. ... ... ,а,. :� ... ... , , . • ._,_ г•• SСГГ•1'". qi с•. :'CI• . !с.,•i '.ь.'S atLf]'.г.1llЭ,I� Lu !'�� . .,,., , , :,,. • . �-з;д1 �зп,+ с•>>r•зtз�:. ,-+•�г�,, ,�r <+f С:�..е�:; яг,1 с'.i�Ci[я .гтf ,.1г.;т.ч !�г� tt --- „�n''. ...,�t> 1•.l.y,.c г�,i гt�г�, .5г.гг^'зСг• 1ГС` i:VГ�:! 1Т� . ,. • ' -� � , ...,�..._ ;. . �•t.urn ..> .г•,?п�:hr_г.•�1.. •г; .+.��r h. rnu•;с• (.+) •_fЕг � •. �r'а� .. ctr, r,гt ?гiC �1zaCC!1v G,f• зS;.:гг• t' I•+1 , г,с ��• 1l` С, Г++г t;uf ;г*ihг�rS, ,, '.• Г(сгс .,,('?'.7(�•_ С?.t' �1:11 Г'(,SГ г,с г,�.С(',^,��• , 5i`ГVlГ. t: п• .�•гь>l,�. l'VC:1 „� .. �•., :`•,1} h�,,:��F:С� �:•�11 c,n1v be о1_�'...air:ecЭ wпr.�r. a�lditlonзl :!i�.es :+:� con- ,; � ,., _ . . ,�тг•.-з•г,, аr:�? (г') ehe ��rь,iг•сг i^ �зк„ i •пг>г' ,�iiпlv r� -,гпvЭгir .'и� г•i•�'с п� •�г,-г�rг-г•. Aчsinrs�. Lпurisn n�+гi :з^rtcu? rurь ri ��+ з,гоЬпhlе _ . . t. ,..;+1 г•-:tr.rт•.�? !��пг•Т{ts. •� sг�nяitivi!v rrn•зlvSis h�v5 't>n+�n .•,lrric•д out, .�,.•. .. rvnr z„ •г�'дvc,TaF1c• cnmh?nяС1>+1• пf СЕ.,, г�,:гi� пятаг�с•[vrs .г•ц1д "�_г;` :г• ., ,:г с пti ,..turn ryt' nпt lгсs t!з:зп 14°%. 13 %.01 Thie ýieral Telecnimnunicatinns Bo.irt! tlic: 1-, neFielary of rroposed eredit, is the sole rt-sponsible atithnrity for -ill telecommunica- tions services in Nenal (niragrarhs ?.r5 and 2.n(-). Ctr-anizatlon ard ýlanaQe-ient 5. n:! 'TTB's cirganizatton (Chart 7176). whiel: is l)nsøý,d on Cic reconmciitt-i- tions of the consul.tants financed under the first credit, iý anrropr-.,Lte før "P develoniný, telecomTrunientions svc;tpm. Tlie he;idquirters is at 1'ath-,ýAndu ard conqlsts of thrPe d-partnents Finance, Bu-ýiresg -ind Personnel. Tlirep rr"iønnl officpq. v;,cii 11n.k!tr tite contr4Lýl of a rpcioii.il manarer, x,,ill hiive territortil The offtee at Kathmandu, the most signifienilt irTlortant of ti.e:s(, has alrendv bepn spt un. Creatior. of tl,i.-, ot!irr r,?<ý,ions wIll the e:--t(msjr-i of telerhons- f-icilities tr t!ip ýire«-i- The repirnal .innaý,ers' resDorgibiliticq are to deil xi4t1i rpLitlon,;, T-aintenance, onvration% and ninor construction worýý,; .,itl-An t!ipir r(-t,ioiis. The provosed ernverston of -NTB into a ceNrnoration ?.n7) 1. tinlikilly to necessi- tate rinjor chaný,,es In NT13's irternal or-.t;,izttfcn. -ý,tAf-f anrl Traininý, s.ni The present chief executive of 'ýTlk i«; cnnable nnd qttaltfic(l. 'ýrvernnent ]tas ýi ' greed to intorni tlie ývipølt-,wlent t,- tý,ls keýý positInn. 'riæ (iý four senior 4-y-ntri.itp advisers were- obtained In 1q71 tlirnxi-,b lii(ý Co1O-.nl,o Plan in order fiellit-ýite tlie eFffýetive operatinn of 'ýTTý tloný ef-Nr.r,,erciil lin--s ind tlie ý,-trodurtion of nex, en-tneerimz ývsten!ý and #ý.xnert.s hold t'ý,e nøsition- of Fillanetal Controller. Chiý,f EMInt~r, and "k-Jønal. "anaýýpr Katlinandu. Neril(,se couriterntrtý- Innve 1,Per. PLIced witý,-i thf,s<, ~erts. Local annointmpnts tv C1vSe ton noý,tc, -,liould tii,,refore b, -ø,gsible within ti,,o ve.irs is the, experts' contraets P-xr)i!ýp. ý . rýl, Stniff eTnnlove4 at exceutiv,ý ir<- trr;micnllv ccimpetvi,t. Ti, ' iq rPstilts from rovermnent's policy of T-reNvidin- univ.-rqitý.? srhølarshir-; ner-ons wlio aýýree to enter Govtrnrent service, fo.'Llnwe.,ý! 1,-.- c)verýqe.i.q nost-fraduate telecomTttunlcation,; tralninýý e--xcli v(-.tr for four tv slx Pradu.ites. 5. f)5 The situntl<-ýn is not as sitiRfactorv ir rp,t)ei-t of titt- ýýradrs. '4TB had themselves taken action to inrrovp scan.],ir(3s hv n small school prt)vid-inf! llmited vocational fnqtriictinn for e,.![stin<, teclinical stnff and nei.? emrlnvecc;. The q,ýtt.nr ti" of n eentf-r under LTýTT)P atispices -;hould by now have ')r-en rornplet,,d biit has lýeeli h(.Id -,rý --ýue to delav. In reachim a dpct,qion on wli1r11 dpnirtntnt qlioultl be rø-spoii-,iý,1(. for tlle center -ind In Drovitlinp, the rvnlilri?(1 acconmodation. It- wa,ý -Itirinýý negotiatfonq thit these probleins ýiati hevt, reqolvfýd .i)ý choel - 14 - would be operating in temporary accommodation by not later than July 1973. In the meantime the four experts who havo already arrived in NepaL are being utilized for on-the-job training. Staff Levels 5.06 At the time of the appraisal for the earlier project serious overstaffing existed throughout the organization, with a tot. s:aff of over 1,200. After allowing for staff erploved operating the telegrlph services the nunber of staff per 1,000 telephones was about 180, corpared with about 20 to 140 in other developing -ountries. While it was difficult at this early stage in its development with a widely spread low-(tensity network and serious transportation problems to compare 1TB with ether telecommunications organizations, a need for improved productivitv was apparent. The Government arreed to adopt -easures to impre, I ;,or per- forrainre and producckvity wiiich, although initially necessitat. t trarsfer of people to other employrnent, will facilltate the econoTmic (lev. .opent of the network and an ultimate increase in emplovment. The nurmber of staff has 5o far been reduced by 17% to 999 over a period during which an incrense of 75' in size of the teleplione network has taken place. iie ;3rest nurber of staff per 1,CO0 telephones is 118. Furtther iaprovem'ents in prom<:.ctivity are rlinned under the new project; however, the proposed establishneat pro- vides for a total staff of 1,478 by 19R0 with 1,010 emplaved for the tele- phone service; a level of staff of 53 per 1.000 telephoncs. It as been agreed during negotiations that the existl:,g ecvenant which in g-neril terls requires an improvement in product.ivity should be repeate,d c ti- ^. Credft Agreemnt. Indicators which will be applitd to - t-zre futi.- n-rirrmance in iinroving Productivity are set out in Annex 10. ccoluan 1in ben rlieir recomme,d-s, t 1 iere:tat om, uercial C i T] began onlv in July 19? I'K v er,'c- .: . 171? ulv 1473, the sv t - be ;. . ni a. i de ý:elv infor-mation f:ilitating V tter inter!a, contæl s shtuld be followed bv fturttiur trtivem,ents 1:. to ara- of -Iir, budgeting and cost accounting. In view of the Lmitecl size *n NT nroposes to arrang,, with its auditors (A.F. r,usc:i & Co.) ~.ut dve systems accor, ing tr tertis of reference satisfactory ,ch propsed credit includes a -un c cover this cers estimated at 1 raft tens of reference are included in Annex 13, ?he implementa- _111 cAn bte .andled by NTS's own staft (-aragraph 5.03). - 15 - Audits 5.09 The existing credit agreement requires that the auditors' reporL should be received by IDA within five months of the end of the fiscal year. The completion of the first audit, i.e., for year ending July 16, 1971, was delayed by some six moaths due to the Auditor General requiring that the contract with the auditors should be with himself instead of NTB. The audit was finally completed in Auguii 1972, but submission of the auditors' report to IDA was delayed until the approval of the Auditor General was obtained in January 1973. The audit for fiscal year 1972 is underway and it was confirmed during negotiations that the report will be submitted imnediately upon completion. This arrangement is satisfactory. Tariffs 5.10 Details of existing tariffs are given in Annex 14. The tariffs for local telephone services are 12% and 20% lower respectively than in India and Pakistan. However, the service provided in the two principal towns in Nepal is now limited to local calls and even with provision of long distance facilities the service cannot be considered to be of equivalent value to that in India or Pakistan. Also, to enable maximum utilization and optimum revenues from the long distance facilities, it is desirable to connect rapidly an adequate number of subsc-ibers in the smaller towns where the demand would be elastic in relatic. to local service tariffs. 5.11 The HF radio telegraph network, the main existing long distance service, which fulfills a useful role in providing communications to remote areas, is unprofitable at present telegraph tariff levels which are on the low side, particularly when the high costs of operating the network are taken into consideration (paragraph 6.03). Tariffs established for long distance telephone services are at similar levels to those in other developing countries. No cheap night rate has, however, been provided for. 5.12 Government plans to meet local financing requirements Lhrjugh i tcreasing teleLommunication tariffs (paragraph 6 10). It was agreed during negotiations that increased tariffs so st-uctured as to facilitate a balanced development of the network taking into account the factors discussed in paragraph 5.10 above would be introduced with effect from July 16, 1973. Part of the increase will come from increased telegraph tariffs since this service is operating at a considerable loss, as indicated in paragraph 5.11 above. Consideration will also be given to the introduction of a cheap night rate for long distance calls which would attract new traffic during hours when the network would otherwise be under-utilized. - 16 - VI. FINANCES 6.01 NTB's financial results have been poor in the past because of inefficiencies and the nature of the network it operates. However, with expansion and structural changes of the network, with increased productivi- ties of staff and increased efficiency, and with the tariff increase, the financial results are expected to improve rapidly to become quite satis- factory towards the end of this decade. Of the funds required for thV program, almost one-third are expected to come from NTB's own resources. As a result of the program, the gross value of NTB's plant in cperation will more than quadruple. Past Finances 6.n- In accordance with a covenant under the first crenit, NTB started to produce annual audited financial statements beginning wit! fl_.cal year 1971. Income Statements, Balance Sheets and Funds Flow Statemoit., art given in Annexes 15, 16 and 17. Notes and assumptions made are given in Annex 18. 6.03 In 1971 and 1972 the net losses on NTB's operations w.:re NRs 290 thousand and NRs 110 thousand, the operating ratios 94% and qA', and the rate of return 1.27 and .5%., respectively. These poor ffnancial results are largely due to the follo.ing: (i) the HF radio networK operates at a loss which In 1971 was estimated to exceed NRs 1.0 million pei annum -- without the HF network, the rate of return in that year woulf have been 9; (ii) the very small telephone network (less than, 000 telepho-ei) does nrt allow any eronomies of scale: and (iii) there is v. ,allV nI t ance telephone network which would allow more inlensivV U!e 0 , t t facilities and also in itself would be in irport.nr s,urce *f a :onal revenues. The result in 1971 was i17 ffected by a rr.TY:rNs:, for consultants (paragrapa . ~ .4NI'B's finan,:ial poi ~i ot. i- _Uly lf '. ' 72 is - 17 - Millions Millions ASSETS NRs US$ eguiv. % Plant in Operation Gross Value 39 3.7 Depreciation 15 1.4 Net Value 24 2.3 51 Plant under Construction 11 1.1 23 Current Assets 12 1.1 26 Total Assets 47 4.5 100 LIABILITIES Equity 40 3.8 85 Long-tet-m Debt 4 .4 9 Current Liabilities 3 .3 6 Total Liabilities 47 4.5 100 6.05 Plant in operation is valued at cost of the exchange rate prevail- ing at the time of acquisititn. A substanial portion ecquired before 1967 has accordingly been entered into the books at the pre-1967 foreign exchange rate of NRs 7.65 to USSI. However, in light of the relatively high prices paid for this equipment, the present book values still appear realistic. The accumulated depreciation which amcunts to 38% of gross value is realistic. 6.06 Cash and bank deposits totalling NRs 9 million, or about one and a half times fiscal year 1972 revenue, are substantial but. temporary due to the delays in execution of the ongoing project which they will help finance. The accounts receivables position is now satisfactory with most accounts kept on a current basis. 6.07 The long-term debt is mainly the disbursed portion of Credit 166-NEP. The proceeds of this credit are being relent to NTB by the Government at 6-1/2% and repayable over 19 years including five years of grace. Financing Plan 6.08 Funds needed for the exp&nsion of the telecommunications network in Nepal during the 1973-1979 period and the sources from which they would be met are summarized below. Forecasts of NTB's sources and uses of funds are given in Annex 17. - 18 - Years ending July 16: 1973 - 1979 Million NRs % USES NTB First Project 28 21 Proposed Project 83 63 - Future Project 10 7 Working Capital and Other 2 123 2 93 Indian Aid Project .9 _7 TOTAL USES 132 100 SOURCES Internal Resourcos Internal Cash Generation 65 49 Less: Debt Service 28 37 21 28 Subscriber Deposits 6 4 Borrowing 166-NEP 14 11 Pvopused Credit 58 44 Other 3 75 2 57 Grants Government 5 4 India 9 14 11 TOTAL SOURCES 132 100 Note: Totals may not add up due to roundings. 6.09 If total requirements of funds, 28% would cooe from internal cash Feneration, 4% from subscriber deposits, 57% from borrowings and 11% from grants. The Covv:rmenw grant is an appropriation already made in the 1972/73 budget for the first Project. The Indian grant is the value of plant which is being conmtructed h% India as part of the first project and which will be handed over to the Government of Nepal after it has been commissioned. 6.10 The financing plan is based on construction costs including cus- toms duties of 15% on imported materials and an inc:ease in telecommunica- tions tariffs to provide an increase in total revenues of about 15% on existing revenues effective July 1973. During negotietions the tariff structure and the amount and timing of the necessary increases in the telecommunications tariffs were agreed. During the project period, tariffs will then only be red-iced after the agreement of IDA. Furthermore, since - 19 - the financing plan is based on NTB's cash position as of July 16, 1972, which was substantial (oaragraph 6.06), the Government confirmed during negotiations that no funds had been transferred from NTB since July 1972 and also agreed rot to transfer funds during the construction period from NTB without submitti g a financing plan acceptable to IDA. 6.11 The relending terms for the proceeds of the new credit have been assumed to be 20 years including five years of grace with an interest rate of 7-1/4%, equal to the present Bank lending rate. Recent loans by the Government to its agencies have ranged bt-tween 5% and 7-1/2%. The terms of the proposed releuding agreement were agreed during negotiations. 6.12 Since relyenues from the project will start accruing only towards the end of the construction period, temporary short-term finance estimated at about NRs 2.0 million would be required in 1977, to be repaid in the following year. During negotiations, the Government confirmed that short-term finance will be made available to NTB as and when the need arises. - 6.13 In view of the limitations imposed by the financing plan, no new works outside of the project involving a capital expenditure exceeding NRs 10 million (USS1.0 million) will be undertaken during the period of execution of the project except after consultation with IDA. Future Finances 6.14 Forecast Income statements and Balance Sheets for the fiscal year ending 1973 to 1Q80 are given in Annexes 15 and 16. Notes and Assumptions are given in Annex 18. Salient features are shown below: Year endin_ July 16: 1973 1974 1975 1Q76 1.77 1978 1979 1980 Net Income (Loss) (.IRs million) (.8) .4 1.0 2.2 1.5 1.9 4.1 7.6 Operating Ratio (2) 106 87 80 71 73 72 67 61 Rate of Return (%) neg. 3.2 5.2 7.7 6.8 6.7 8.6 11.4 Debt/Capitalization (%) 14 25 32 43 48 49 49 48 Carrent Ratio (times) 3.0 1.9 1.4 1.2 1.1 1.1 1.1 1.1 6.15 Operating revenue is expected to increase on the average by 24% per annum mainly due to the growth of the network, but also due to the increase in tariffs in FY 1974; without tariff increases, the increase would be 21.6% which results from the provision of a long distance network and a growth in subscribers connections of 19% per annum. Performance indicators for expected revenue per subscriber over the 1974-1979 period are given in Annex 10. Operating, expenses (excluding depreciation) are projected to increase by about 16% per annum. This would cover the cost of reasonable - 20 - additional staff requirements (paragraph 5.06) and other operating expenses arising out of expanded operations. The operating ratio would decrease from 106% in 1973 to 61% in 1980 which would be satisfactory. NTB is expected to continue to make P loss in fiscal year 1Q73 but should operate profitably from 1974 onwards. 6.16 Due partly to Jelays in completinFg the first proec, the eXistinR rate of returr covenant (8% by fiscal year evding July 1974) will not be met until 1979 even with the assured tariff increase. It is now proposed to require a rate of return of 5% in fiscal years 1975-1979 and 10% from fiscal year 1980. This was agreed during negotiations. Performance indicators showing the expected rates of return over the 1974-1979 period are shown in Annex 10. 6.17 NTB's financial position is expected to be satisfactory during the project period. At the end of 1979, the debt-capitalizatioi ratio would be 497; this would still leave a margin for future borrowing. The current position is projected to be quite satisfactory through the whole period. 6.18 The debt service covenant of the present agreement. which requires NTB to obtain IDA agreement before contracting new debt unless the debt service coverage exceeds 1.5, will be repeated under the n"w credit. Fiscal Impact 6.19 The fiscal impact of NTB's operations will be quite coisiderable and favorable. During the 1973-1980 period, as detAiled in Annex 19, the Government will receive NRs 39 illion resulting from N7. o'" oetirions. This amounts to abour twc times total Government investments in -,TB. After 1980, with the realization of econonicq of scale, and the chargc 'A structure of NTR's operatirns, the fiscal impact should become even rxrc f tv)rable. - 21 - VII. RECOMMENDATIONS 7.01 During the loan negotiations agreement was reached on the following principal points: (a) In the event of NTB being converted into a corporation rules and articles pertaining to its onerations will be made available to IDA sufficientlv in advance for comment prior to being brought into force (paragraph 2.07); (b) Government will ensure that NTB will continue to adopt measures to improve the labor performance and productivity staneards of its employees (paragraph 5.06); (c) Audit reports will be submitted within five months of the close of the fiscal year (paragraph 5.09); (d) Tariffs will be established at a level adequate to meet the financing plan and will not be reduced during the constructior. period (paragraph 6.10); (e) Funds will only be transferred from NTB after IDA's approval (paragraph 6.10); (f) The proceeds of the credit will be relent to NTB or terms and conditions satisfactory to IDA (parngraph 6.11); (g) No additional works outside of the agreed program involving a capital e.penditure exceeding NRs 10 tUSS1.0) million will be undertaken during the project period without the prior agreement of IDA (paragraph 6.13); (h) NTB will maintain tariffs at a level adequate to assure a min:-num rate of return on average net telecommunications assets in service of 5% in fiscal years 1975-1979 and of 10% thereafter (paragraph 6.16); and (i) No debt will be incurred except with the agreement of IDA unless historical 12 months' internal cash generation would cover maximum future debt service at least 1.3 times (para- graph 6.18). 7.02 The proposed project constitutes a suitable basis for an IDA Credit of US$5.5 million. March 26, 1973 ANNEX I NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Summary of the Law Establishing NTB General 1. The law that establishes and regulates NTB was enacted on October 17, 1969. NTB, which is fully owned by the Government, is a cor- porate body and is entitled to acquire, own and dispose of movable and immovable property. NTB is responsible for the establishment, operation and extension of domestic as well as international telecommunications facilities within Nepal and/or any other functions or duties as specified by the Government. NTB may, with the approval of the Government, frame necessary rules for the discharge of its functions, duties and the use of its authorities. The Government can issue orders and rules from time to time in matters relating to the functions *f the Board. Finance 2. The fund of NTB shall consist of the following and its expenditure shall be met out of this fund: (a) money received from Government; (b) con- tributions from forign agencies received through Government; (c) revenue earned out of the services rendered by NTB; and (d) miscellaneous income of NTB. 3. NTB shall deposit its fund with the Rastra Bank and its branches where"ier available and, in places-where there is no Rastra Bank, it shall deposit its fund in such banks as decided by NTB. Any surplus funds after providing for all expenses and necessary reserves for the next year have to be transferred to the Government at the end of each fiscal year. Accounts and Audit 4. NTB shall maintain its accounts of incomes and expenditures in such form as approved by His Majesty's Government. NTB's accounts shall be audited by an independent firm of auditors appointed by NTB. Employment 5. NTB may hire the staff needed to conduct its functions in accord- ance with the principles and procedure approved by the Public Service Com- mission. NTB can employ expatriates or personnel from foreign agencies. February 28, 1973 A&1사째（ 2 鞠―·；―··－··…，...,.,....;-..,.,.,,... !::!，·：·；;―·：：·：··，:, ·，·… ‘·… 「… 「 『…「； 「：！·■·，·｀···’^．·k·········，,- · ，········…‘「 -4-,-..,，·11(,,1,1뱁｀·1,，」【’…／떼’’·｀「」꽈·：눕（「’－·…‘…’1 .．。 l챤［·····1············：···r·······－：···뗀·… ;-1- ;!&！·－········F걍’‘깊····；（·1··｀·‘·｀··r7·…콩큔：··……’·！ & ; . ，헌 , 1 . 1 [.！·｀&l ·－ ‘·，-&&& 「“『：-’·’ !“「·‘「－ ‘·「＊& . ., ( ㅣ & ! : 1:－·．1「L」논·．:：·：「’녹‘ …‘&:&.’·1 & 「 ·눙· ··；& . & …－。 . ：」…，.1:..:｀녹…：길··· 1·J· ，·：r，」··， 1·· ‘· - - , . ．·（: , &! ·…1··1·길｀……：···＾… … ·－，··“ ·「ㅏ···닐：：·r；ㅏ11：··1-＼… 」 : l -. . ·．「· & -―·1―·―&,r./1/,1，》「「「떼／·／.,,/,4「「1빽／1콘。［》，,:-:--,，·「―닙’…14… ANNEX 3 Page I NEPAL NEPAL TLLECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNI CATIONS PROJECT Basic Data July 1972 July 1979 Actual Forecast (1) Local Telephone Numbor of telephone stations 6,750 23,000 Number of subscriber connections 4,563 17,400 Annual growth in subscriber connections (last 3 years) - 20% Expected growth in subscriber connections 19% Number of telephone exchange - Total 7 25 - Automatic 2' 15 - Manual 5 10 Installed capacity - Total 5,450 20,400 - Automatic 5,000 19,400 - Manual 450 1,000 ExcbanSe fill 84% 85% Unsatisfied demand for subscriber connections - Total 1,970 960 - As a percentage of satisfied demand 43% 6% - As a percentage of total demand 30% 5% (II) Lon& Distance Tele2hone Number of long distance circuits 8 220 Total cl.rcuit miles 320 14,000 (III) Telegraph and Telex HF radio stations 78 70 Public teleprinter circuits - 8 Telex subscribers 13 80 ANNEX 3 Page 2 July 1972 July 1979 Actual Forecast (IV) International Telephone circuits (a) Lanoline and microwave 6 20 (b) HF radio 3 7 Telegraph circuits (a) Landline and microwave 2 6 (b) HF radio 4 4 Telex circuits (a) Landline and microwave 1 6 (b) HF radio 1 3 Leased circuits 2 10 (V) Staff Total Staff 999 1,480 Telephone staff 540 1,010 Staff per 1,000 subscriber connections 118 58 Staff per 1,000 telephones 80 44 February 28, 1973 ANNEX 4 Page 1 NEPAL NFPAL TELECOMMUNICATIONS BOARD (NTB) APPRATSAL OF A SECOND TELECOMMUNICATIONS PROJECT Existing Facilities and Ongoing Works (a) Local Telephone Facilities 1. The only local telephone exchanges at present in operation are as follows: Kathmandu Central ARF Crossbar 4,490 lines Patan ARF Crossbar 600 lines Biratnagar CB Manual 400 lines Hitaura Magneto 20 lines Bhainsee Magneto 10 lines Amlekgunj Magneto 10 liros Simra Magneto 10 lines TOTAL 5,450 Lines 2. There are 4,563 working exchange lines giving an exchange fill of 84%. The total number of telephones in service is 6,750. 3. In the subscriber's distribution network wi4e use is made of armored cable laid direct in the grouni and cables in conduits are restricted to certain main sections. Paper insulated and lead sheathed cable is generally utilized. Aerial cable is used in outlying and rural districts and is now generally of the plastic insulated and sheated self supporting type. Cross connection cabinets are usei as appropriate to give flexibility. Open wire is utilized for the longer subscribers lines and PVC drop wire in other cases. 4. Modern types of subscribers instruments provided by NTB have been installed since 1970. Prior to Vat subscribers pur- chased their own instruments and some difficulty resultq on occasion due to the inadequate transmission offered by certain of these instruments. The majority of PBXs are at present privately owned; however, to achieve standardiza- tion, improve transmission and obtain revenue advantages, NTB intends progressively to offer PBS services on a rented basis. ANNEX 4 Page 2 5. The exchanges, associated distribution network and sub- scribers apparatus are generally well maintained. Over loading problems exist in one section of Kathmandu exchange and on the Singha Durbar PABX. Some redistribution of subscribers is being uncertaken in Kathmandu e :change but final correction of the present problems must await the installation of additional equipment. (b) Long Distance Telephone Facilities The only existing long distance telephone facilities are provided over the landline route to India which, besides providing for International facilities, makes some provision for domestic long distance traffic. The facilities availa- ble are provided over 3 - 242 lbs per mile copperweld pairs on steel pcles and are as follows: Bhainsee 1 Physical pair in either direction Hitaura 1 Physical pair in either direction plus three carrier channels Amlekgunj 1 Physical pair in either direction Simra 1 Physical pair in either direction In all eight circuits are in use with a total circuit mileage of 320. Service is unreliable and tends to be interrupted for considerable period during the monscon season due to landslides and flooding. Point to poin, telephone calls can also be made by means of the HF radio network on a simplex basis between Kathmandu and the outlying stations. (c) Domestic Telegraph Facilities Some 87 telegraph offices are in operation witia service provided on a telephone/telegram basis over the HF, point to voint radio network or a few sections of landline - one master, thirteen area control and 65 dependent stations comprise the HF SSB network. Master control is at Kathmandu with area controls at Biratnagar, 11am, Okhaldhunga, Jalzsware, :,itaura, Bhairawa, Pokhara, Baglung, Dang, Jnila, Nepalgunj, Mahendranagar and Dhangarl. The equipment con- siLits of 100 W SSB transreceivers for intermittent operation with power supplied from 1.2 KW motor alternators. ANNEX 4 Page 3 (d) International Facilities The pimary routing is over the landline to India with an eight channel carrier system and a six channel VF itelegrLph system both of which terminate at Patna. These provide three speech circuit Kathmandu - Delhi; three speech circuit Kathmandu - Calcutta; one telegraph channel to Delhi; and one telegraph channel to Calcutta. A separate landline carrying one physical speech circuit links Biratnagar and Jobgani. Other facilities available over HF radio are: I speech circuit Kathmandu - Delhi 1 speech circuit Kathmandu - Calcutta 1 speech circuit Kathmandu - Bombay Speech circuit schedules to Rawalpindi and Dacca I teleprinter circuit Kathmandu - Delhi 1 teleprinter circuit Kathmandu - Calcutta 1 teleprintev and 1 telex circuit Kathmandu - Bombay Teleprinter schedules to Rawalpindi and Dacca 1 telex and I PW channel to Hong Kong. These services are provided by means of: 2-1 KV SSB transmitters usea for telephone services 3-1 KW SSB transmitters used for telegraph services 1-10 KV ISB transmitter used for telephone and telegraph services but now 15 years old and unreliable 1-5 K1 ISB transmitter used for telephone services 7-ISB/SSB receivers 4 HF radio terminals 4 channels ARQ equipment International telephone facilities are terminated on a temporary 3 position sleeve control board at Kathmandu (as also are the existing internal long distance services over the Indian land line). In- ternational telex services terminate on a 30 lines concentrator at Kathmandu. Public telegraph circuits terminate on teleprinters in the Central Telegraph Office. (e) Ongoing Works Works still to be completed under the ongoing project with likely dates for completion are: ANNEX 4 Page 4 (i) Indian Grant Birgunj 300 line Pentaconta Exchange and Distribution Network with land- line circuits to Kathmandu December 1972 Kathmandu 6 position International Switchboard December 1972 Kathmandu 4 position Trunk Switchboard December 1972 (ii) Indian Grant Biratnagar 1,300 line Pentaconta Ex- change and Distribution Network December 1974 Janakpur 200 line CB Manual Exchange and Distribution Network July 1974 Jhapa 100 line Pentaconta Exchange and Distribution Ne.work September 1974 (iii) NTB Financed Patan 400 line ARF extension June 1974 Kathmandu 1,000 line ARF extension (400 lines completed) December 1972 Birgunj 700 line Pentaconta extension December 1973 (iv) IDA Financed Hitaura 200 line CB manual exchange ar.d Distribution Network February 1973 Pokhara 150 line CB manual exchange and Distribution Network February 1973 Bhairawa 100 line CB manual exchange and Distribution Network June 1973 Nepalganj 200 line CB manual exchange and Distribution Network August 1973 Rajbiraj 100 line CB manual exchange and Distribution Network October 1973 Malangwa 50 line CB manual exchange and Distribution Network June 1973 Dharan 400 Automatic Exchange and DiNtribution Network December 1974 Microwave system Kathmaadu - Pokhara) ) September 1974 Kathmandu Pulchowki - Birgunj) Microwave system Pulchowki - Biratnagar December 1974 These systems will provide 70 telephone circuits with a circuit nileage of 4,000. в ь.l.ь ':11h� .t'.2�.М'Т: � Ь.. : 1т г'гц 'вУ'.]1� �.. . .. .. >.. . ' +i . У•srs ег�f.:г .+1. . . ./�З .в'4 :1" _ ./l� 1,.+.1 _ .�t; �� 1ч1, Т.�ив 1У!] . :Лэ . F __! Г..:� __�' �� � +-.._ �_ �_..... _�. ._� У.�гг1 ._� .._ ._Ji: ..Ел: .��41-"Г�гв�й ?.`е2 ��1 t„ге1lц •��• �� ��- -- -К! ;li %.; �'�. 1 t:1elra , ,.! � ,. r !;� 6 „ `+ 1�э7 t..�: +:, �р,,.. . . . _ в, ., .5 1, .. ч. •ц ♦.�Е -Jo г,• ,• ! 41 - ь! зз5 .r,9 .5r► сi�.�г:с�.l:.п ики�га. _ . . . - � г ... . . .и h' а 13а ., tf г.•г s� � . ц 5t , . .�гь�г:г,�г гдп.тv ., - - • - �' � s л .1:t�.. -. , � � :� i..1 .1•. м ! 15 1 7I. �ь1 �'iF' .Т: lа.г....в - - - - ' ` - . ' ... ~ ;ч 1. 1ы 1:. 1. 1�г 1n. 9: 5г1 ? !'F'л�:! . . ' ' . : / 1" ! . . .. . " - 1 , . . Е. 1°. 1. ЗЕ :Ь `!г ..г_ ' ' . . . . . , ' i 11 1А .'1 ., � ,. .ь . � а: ., 17; .ь .�.. ы-в л - - - - �. Тгiен � . . . ' ' ' ' lL i'. N. -й.'.�t.1:� . ' . . � . . . . . ь . 1 . .. � 1 11 1 1 '11 / i�г . . л... .... 'Усюгл .. . _ . . . . . . , ыд aef Iя.l1�•.г . . . .. . _ .. - . . . . . . . . - 4i . . {' .. - .� .l.nt : в . •l�.г а!. . . • _ � .1'F1r1..,.,. . : �.._ .. а. _-_._. __ - _ ": ""'- _-_ �_ __ _� � ._._ �.. __ �_ _ _�в . r Э11 7: . . • .. .. .... . '` с �� ._... � � _ _. _ _'_ ' .� __. "._ .._. ,_. .�_ �_ у• _-._ ___� ._... --,-. ---- - •-л г11+г~• . F>` . �.. � ' • • �• � . . . , _ . - . _ . . ` ,. ,г.! ., !] . . . !r : : t . . • -�. -�� �.� ..�-- - _� __ ' __ -__.. ._. ._ .__ -_. -�-� ��. .��. .__ �- _� - ,. � _ �_ .�. .�_ � � . .. . . . : . • � . . .. _. • , . . � � . . � -. . . .. • . . ! � . . Ч. . ... 7 _ _ '. � г . . .. i � " ' . в ` r л . ' ' . . ' . . . ..�,г � . . . . 1 : . . . . - _ л .. � ..., .. .. . в. , . . .. �. 1 • �_ � _ ..,, . � �.е ге :г�.,,; �� : .�. � ... -у -г. . . . .. ... , v.• �•�.: � . ... . .. .. . „ . , са � л;г . . l ANNEX 6 Page 1 NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Project Works LOCAL EXCHANGF AND NETWORK Estimated In-, Service Dates. gLlkacity (a) Automatic ExchAnges (i) New ExchanRes Kathmandu Suburban December 19711 5,000 Bhaktapur March 1978 200 Banepa September 1978 50 Bt:twal September 1977 200 Bharatpur December 1977 100 TOTAL 5,550 (ii) Trailer Exchanges Kathmandu Central December 1971 1,000 Kathmandu Suburban March 1975 (Later used to xtend Patan 1978) 800 TOTAL -1-28-00 (iii) Additional Capacity in ExistinS Automatic Exchanges hiratnagar December 1978 700 Dharan September 1978 400 TOTAL 11100 Biratnagar was provided under Indian aid: Dharan will be retendered and will in part be financed under Credit 166-NEP. Extension purchase should, it is proposed, be negotiated with the original suppliers. ANNEX 6 Page 2 (iv) Conversion of existing manual exchanges at the same time providing additional capacity Size of New Estinated in Size of Manual Automatic Added Service Dates Exchange Replaced Exchange Capacity Pokhara September 19.9 150 500 350 Janakpur March 1979 200 400 200 Bhairawa September 1978 100 400 300 Nepalgunj December 1978 200 500 300 Hitaura March 1977 200 500 300 TOTAL 850 2,300 j450 (b) Manual Exchanges - an additional four exchanges and three extensions Exchange Estimated In- hew Exchange Estimated Extensions Service Dates Capacity Completion Dates Capacity Surkhet Sept. 1977 100 Rajbiraj December 1978 Dhankuta Sept. 1977 100 Malanguwa December 1978 Tansen Dec. 1978 100 Jhapa March 1979 Sirahwa Dec. 1979 10 (c) Additional cable, wire, fittings and subscribers' apparatus and PBX's to connect an additional 8,373 subscribers during the project period and a total of 10,000 stations. (d) A 600 line PABX for Government 11Q. 2. LONG DISTANCE Estimated Completion Dates (a) Stand-by Equipment on the existing Pulchowki - Biratnagar and Pulochowki - Birgunj microwave systems March 1975 (b) Additional multiplex equipment on the above systems to provide 72 additional circuits oi about 5,664 circuit miles total March 1975 (c) Twelve additional VF telegraph circuits on the above system Marc 475 These systems were purchased through international tender un6er Loan 166-NEP. It is proposed that purchase of the additional equipment should be negotiated with the original supplier. ANNEX 6 Page 3 Estimated Completion Dates (d) New microwave systems: Pulchowki - Bhairawa July 1977 Bhairawa - Nepalgunj July 1977 (e) Multiplex equipment for the above to provide a total of 24 speech circuits of about 2,736 circuit miles and six VF telegraph channcls July 1977 (f) Four dupLeA HF links to Mahendranagar, Dhangari Jumla and Okhaldhunga December 1978 (g) Trunk switching equipment to provide the following capacities: Total Exchange Terminating Capacity Kathmandu 150 ) Pokhara 12 ) Biratnagar 48 ) December 1976 Janakpur 12 ) S3hairawa 12 ) Nep.lgunj 12 ) (h) Additional line wire and route material to provide six circuits to rural exchanges having a total distance if about 90 circuit miles, together with 4 VHF systems and 2 open wire Phased carrier systems providing 48 circuits of about over 1,520 circuit miles total Program 3. TELEGRAPHS (a) A manual telex exchange with terminations for 50 local and 30 long distance subscribers December 1976 (b) Ninety teleprinters for additional teles subscribers, the public service and leased circuits Various ANNEX 6 Page 4 Estimated Completion Dates 4. INTERNATIONAL (a) Additional Multiplex and VF Telegraph Equipment tor international services (24 Speech and 6 Telegraph) March 1973 (b) A 10 KW ISB Transmitter Associated Receivers Terminals and Lincompex Equipment March 1976 5. MISCELLANEOUS A new headquarters building in Kathmandu, vehicles and training and testing equipment December 1976 February 28, 1973 ANNEX 7 NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Estimated Schedule of Disbursements IBRD Fiscal Year Cumulative Disbursement and Quarter at End of Quarter (US$000) 1973/74 December 31, 1973 120 March 31, 1974 150 June 30, 1974 190 1574/75 September 30, 1974 220 Decembe: 31, 1974 630 March 31, 1975 810 June 30, 1975 1,040 1975/76 September 30, 1975 1,410 December 31, 1975 1,730 March 31, 1976 2,200 June 30, 1976 2,650 1976/77 September 30, 1976 3,040 December 31, 1976 3,480 March 3!, 1977 3,730 June 30, 1977 3,980 1977/78 September 30, 1977 4,150 December 31, 1977 4,480 March 31, 1978 4,750 June 30, 1978 4,900 1978/79 September 30, 1978 5,040 December 31, 1978 5,220 March 31, 1979 5,400 June 30, 1979 5,500 Notes: These figures are based on: negotiation of contracts with previous suppliers US$0.5 million; a likely effective date of July 1973 for the proposed Credit; estimated lead times for placing orders and for deliveries based on recent experience; and the expected work pro- gram and estimates of the time for processing payment documents. Disbursements are expected to end June 30, 1979. March 19, 1973 . и>�ц. NEPAL TPS,BOOt97UNICATIpNS Bo�ttD (ИТ9) ForecaeL of Demand far 3ubscrlber СомесLlоп. EвL1п.aLeJ Demлttd � Actual Dвпапд 1л Агваа аlгеаду 1п Arooa to De ��� Served-Ju1p 1972 5егчеЭ-Jи1у 197Э _ gcrcaet Dетвпд �1 •�•д'у нйпид �� Рориlацоп � Capacltp 9ubscriber Чa1t1nQ Рег 100 Рег 100 АгРл Ju , 1 J_ц� 1Qj2 Со___�.j L1aL Т�'�1 Р � •.ta1_�г 1 1,r4 1�j•г •.+• -���� 19^9 1') ') � ь:а�г.:,.апд,+ ,э ооо ZTioo - э ЬОО 'Г3- t';��, "��`. - _-' - �` .� f„� °; �: �;т� .,�п э� 1в�� 1я оа1а.� 67,ооо боо 5Lo Z3o 7тг� 1.2 .. _ � Ве: �то :. л'. 1.=^: :,Зоо 1,43о .,57о 1,�3: Qi Нhнв!ар•;г 43.овр - - - - - .2 bb l5 105 115 `Э- 140 15в 165 :30 tlЭ '1га••�; 18,ооо 1о - - - - 2.5 +.5о ;оо 55о Е�.,в Ё�`г 7?л boo 88о �го 97 t�'="'"д �+� • - - • - 1,5 6 6 6 9 9 9 12 12 12 8Э r`:aL.see 9оо 10 2 - - ' .$ 5 Ь Ь ' ^ ? 9 1� 11 91 tiг•!а+га 16,000 20 1Э - ' - 1.S '�"' гбо 230 72G 35� ЭЭ� 4jв 4�о °г3 АА ;,�1г��.�:. 1'цо7°°о io Ь - - - �2 ь ь ь F ' ° э 1о 11 9Э llcra 9 9 9 12 12 12 8Э N.вlangva у ооо . 1•5 '+5 50 55 60 ЬЬ ?З 8С д8 97 9Э '!гаhв Ь�овв . _ _ „ - �z 1' 1j 14 15 17 19 21 2З г$ 20 '9nakv�r 2о,ооо - - - - - 1.в 2ов г�� гао г,о г9о згв ?5о 39о 43о 74 Fa�cira; 12,000 - ' ' ' - 1.о 1zo 13в 14о 15о 17о 1q., г1о г3о г5� 68 н1гаl,нЕнг гх,ооо 4оо 4оо 4Lo et,o �.2 _ - чбо :,оЕв 1,1�с 1,г9о 1,4zo 1,56о 1,71о 1,88о 9о -.•свгап )1,Ооо ' ' - - - 1.S 4�5 510 56С 620 Ь$0 750 820 900 9QO � 9*.адтариг 12,оов . - _ _ _ 1�о 12в 13в 140 1;0 170 190 210 230 2'f0 Ыt ?,kьага 2о,ооо - - - - - 1.о аос гго гчо :бо г9о Зго 35о 39о 43о 79 Hhчlre.rn 17,ооо _ _ _ _ _ ��в 1�о 1Чо г1о �3в г5о г�о Зво Э3о Эбо 75 чаlардеr.� 22,о00 гго гLв 26в 290 32о 35� 39о 430 470 7Ь s�сынl 1Ь,ооо - - - - i.o 14о 15� :7о 1эо г1о г3о 29о z8o 3оо Ьо вьагы•р�.:г 7,� _ _ _ _ _ 1.о то ео ц� 1а; 11о 12о 13о 1оо 15о 47 Влпера 7,оро . _ . _ 1 о 7С 90 85 95 105 :15 125 140 19j 26 s,�rxhet Э,� - - - - • 1.о Эв 3i 4о 45 50 55 60 65 70 71 Лhenkuta Э,оов - ' - - - 7.5 45 5о 55 би 7о 9о 9о 100 110 L5 гвг,чгп �j.ooo _.___ ____� � _ 1,о го 8о эо 1вс 11о 12в 1Эо 14о 15о � -1тА� ,�о7,1.00 iа4ьо � 1.у'о � ?.774 1с з 11,з7т 1�5� ;�'�воо, 1 ios 16�7о8 1В.375 2:.s::� � 1� ?аsгд оп prnlгctiдn of 1W�1 ггпs s ц�д геvlвел fi�..reн ыtere nea:;^t.:�. :+ :�е,-•,�.. . ,г ...,гСг .'г -� i'--L1Опд рё`г iw popuia°.iлп i+ ан,�у^��•д .. .. . . , ,. ехригlегсе iп .�гИгг 1г•ss дгvеlоред countrles. Р �. ].' :'otel ,Эетапf Г�н s�ЬsсгlЬег connectloпa 1s нrгlvгl et by т�.1t1р1,:г,к "�е 2~ р�р,+lвtlг+п t'Sдиге ыtttr the flguгe for детвпд рег 10в pnp.+lnг+on. . ,_, ч+ qaeed �п 1в4� ндп,.ч1 ,rroмth оп 1Э7г. � 5� Ва+гн: с:+ tле proponed constructlon рговгвт. � Janusr� 9, 1971 , .. � в..rs .с т.ьпь�. ьОл.пе Аа ^С Ju1r 16: 1о"2 1�3 1уГЬ 1915 хс snqe и иг г .хе ange 'S вег'{�ег i Sxe��`-3иЪвег��- e7��ubseri г>� аг__+ �врвгllУ Cnnneettoы Е7гглаfтв ta c1t СолоееСlооа ЕкСелвlтв CsWC11Y Caиectlona ГsЧлвlмв CapaCltr Coonsetlonв л• wsnd� • гvrral А 4.4Ор Э,Ьоо I А 5,0о0 6,2об ) А 5.ооо ♦,7о(7 ) А 5ь�о ) S,Зоо ) . глlг.l ехс. - _ r zд3q - - ) г.4оо - - ) zаьио т 1.аао ) - ) . -.е,rсм - ) ' ' ) ' - ) ' - 1 PaCso А 600 S40 1 А ЬОО 5Т0 ) А 1,оо0 69(1 ) А 1,о00 760 1 Вhаlгtвриг ' - ' - - . . г.гг л� М 10 - - А 700 гь4 60 А 1,о00 �5о 50 А 1,0о0 500 р+•::v; • - - и 1о 1 - и 1о 6 . и io 8 Р`.в.гтгг и 1о - и 1о t - � 1о б и 1о 8 чг�и�ти н ?� 17 - М 20о 80 10 и 200 1Ь0 1j и 200 180 л_: •..nи,� н 1 о г • н 1о 4 • и to б . и to е к 1о ь - и 1о 8 и 1о 1о и 1о 1о нв +•�кУ+ - - . и 5о Эо 5 и 5о Чо 1о и So 5о : т+п+ - - - - - - Jвпэkриг - - . . . . и 2оо 10о 10 М 200 120 ол}D�re, М I00 ЬО 10 и 1о0 ВО .гпвкwг М 400 4о0 ЬВ М bo0 Уог+ ' 60 М УОо 400 70 А 1.Э00 800 '�hагм . _ . - ' ' - - . А ЬОО 1ВО 'ллуе'Чhaбrnpur - _ - . М 100 6о v�,w.ara - _ • и 15о ьо Lo и 1SO 8о бо и 15о 1оо Fhэ,r•.�+ - - - и 100 )О 10 М 100 60 2о М 100 ВО !1г;ч1qвп1 ' - - - - - М 20о ЬО 1б М 200 80 ?,.•wl _ - - ' ' ' - ' ' ' - чn+гвгр,т - - - - ' ' - ' - - - sw�.н - - . - ' ' ' - - - - .,..rR•1вС . - - - - - - - - - - •,ank.cn . . ' " ' ' - - ' ' - Г+пsгп . cals 5,4Ю 4,5с; ?,1В7 ь�8рр 5,Ь50 а,5ь5 8,Wь0 5.81� г.895 1qB40 8,324 �тг.,г ..п игг�1>.а чит iк1 - _ . �s-з �э-а 1v-з zз.r zo.7 1z.8 ze.w zz.1 :.��nмаг FiL' �t1 д>,.ь 82.6 80.8 76.8 д.�,мг:- 4) ' 9о В8 8; 9о д .-.1:��сги +,•.�хдвllс енгГмдг, .с1: �ег•г в.,•�м.иtlс exchrгySe of tгвцег гург 1воб11е;; W + tпtwвгes еап•ia1 еасhапде. диавг� 10, 1973 , iн iG �� . . . . � й�Ь'�лНSйй. й. . т. � $. � �L � й ¢sе . i�S�'iYYii =,�=�,�R> >.1Ч> л � ` rи ° Q ( �tц xц ц5рΡ яц Уы�g Е '�w. :. Ь 7. , , , , . �8�i��d82i. �0025oo2S� гSц2Sц � д � ..�Р ^, У � � рΡо й � ц �jm}� �рΡ�д уΡ� лГНΡRjd � � И fi ��� �� О�ОО.�1�ОО� ООО�Оо�� Q О Q,О� � w I ��w� � � ,.. х . . . . . ц�Во88�а� �. . �, . �. � �а � . g iдZ.s»д= =�=Liдs >ЧЧ> л ~ � � � � (, � , . � � tlR�Б'HйSHH2S�'Бoo2S`oo2S� 2SгS2S2S мn `� � О .�ч � ^ � w 8 (� � � � � , o8Sg�oSS� Yioo�o`о�� � � 4 у и � � о о Ъ. s I� � � � � eйS�oErL'йа�й� ��б� �Н� � __ '�>ii=i»ii s=F>=i> М>у1 n й � { цг дr+ £"� и .g..и..и т и b(. НН. НцгSS`Ь'82S�Hё� ооо�оо�� tS25YS$ й д � Ч....н � п _ � а 8�• 5`g � 5'$�8о8�88$ � оо�Хоо`Jd. К � 8 � г3 ,......... � < (, ,,, �g ;о уΡ1 рΡ� �рΡ � : J й ии�иК�`t'iX�OGOOй'Ь'�й� �й�.�0� р 8 + Н Z==»»>)_»�> ixi>iiiTN>�I> � £ N vц иц УQ иQ '.~л 5 I888К8���8����8`��Б'ov2Soo2fцгSц252f ëd�G И у I иуу� �у ; � < � 1�55�$$S��S�HO��й � �€� � �� 00 00 rvvv 11е < и I`nииИОгiйУiаQйоо�iS � и � . fj� � Hv � ' и < �� 1 i = Z У > ) > Т > _ > > i > = i � Z > Х i } > Ч 1 .1 > йf � й о и r н�и .+ и � Ьо � о (888К8���������ооао�оо25ццбbг5 �^ Уд -а и оК£�'.Хооо�'+Нйоои$`оо�ооЬ'6� 2S �у5 �' •- {� иууд� �~ц : уΡry � 1fiQ �с й Iи,л.пигi�оо'2I0.'�i�JV�й� й� ��и. � р.л� о i' ANNEX 10 NEPAL NEPAL TELECOM MICATIONS BOARD (NTB) APPRAISAL OF A SECO`iD TELFCOMMUNICATIONS PROJECT Performance Indicators 1. A set of four indicators which will help monitor NTB's performancr has bec-a established. NTB should agree to report semi-annuall, on actual achievements related to the performance indicators. At the end of the fisr:ll year, NTB should also report on the expected achievements for the next fisczil year. 2. Performance Indicators: Year ending July 16: 1974 1975 1976 lc)77. .1978 1979 Telephone Subscribers Added - Net (number) 1,168 1,508 1,374 1,000 1.800 2,625 Employees (number) 1,200 1,300 1,300 1,375 1,450 1,4W) Telephone Revenue per Subscriber (NRs) 1,172 1,331 1,552 1,607 1,665 1,719 Rate of Return (7) 3.2 5.2 7.7 6.8 6.7 8.6 March 19, 1973 чг,г гпцпд Ju1y :r, 141У 1415 1д76 =,2г т�-м���-»<мп- �- тъ_ �rn� � а- s�--�гп-'-1г ..п- s�ь_ гг.п�--к � "1Ps� serl�ers ;tЛыгвпдв (trtowиAa serl6era (21,аииЮв (еЬоиsида •егlDел ltrt�owибa (сlюиаWв •ггtОвгв 1tМwаиСв (W,w t• 1:i а1��. )' bгга; вf +lпи:е• f rPS �Dггв t цписгв ot lfRв �аWгв о[ нilдиLв ! 1Uв n,aGn оГ вlпиив ot 11R � •�:. �° =�за'- -эs-� =-?э�-- "гsг'1 _9 Ч.•+иг, :.Ь 16 ЗЭ 5Э 1го аТ 3Э9 1То 12} 141 1qo 1эа 2 •в3 м~, 1' L6 . ' " ' ' " 45 16 гб 5О ЗЬ ,i.r Т' • - - • - - 11о ьа g6 1Э5 96 z .^е1г,� L,' � ? • � - - . - то zS TS 8т Ь2 i в1г.•-..¢,г F/ 1.о _ _ ' _ . _ бло 21Т бу1 В8о 6Э9 1,9 7 >. � 9о 13 99 гВо юз Ь +.,м�в„lлриг У! З-` . . ' ' - - 3о 11 ЭЗ ТО 5i 1 Р;в�аг+ . - . - . . _ 9� ЗЗ Т9 110 80 l s�.:г.м Т� r.ь . . _ . _ . тэ Ь 1о es 15 +.:.:¢,,,! i 3� i.� - . _ _ . _ То 6 18 100 17 9.•м: �� '.4 . " . . . . . . . . . ,'гц 1' " ' ' ' ' ' ' ' ' ' ' 9,•г^. ' . . " ' ' ' ' ' ' ' ' 1.± ' ' " ' ' ' ' ' ' " ' :��,� .r .4 " _ _ ' . . . . . . 1г.�. -S. ... . . " ' ' ' " ' ' " " гг. _ :5 :1 � .4 l' .'И � � 2г ���Е � � 2Т _� _. ..,, 1э7 2t18 Ьэ�. ттб 1,852 2а1цi 2.56г Ь,Ь �.вгсгге.n v1•�.н• г.г га .ьр 665 -АгJгlцгг 1г •,�!еиьгi �,+55 5.'�'S Т20 6,450 . •,1 ':DserlCers ,,:-6 Ь,2ЭL 7,57? Э,Оц . . •rt-, -е,.пи г�.z L'+4 130 l .'�1гаж Уц�t ?eveп.ie 530 9г0 2,780 4,j • кг гаDлгтlоег �,1ЛVа) 71L 165 К11 5 .г•А^е ,л1:вL3е т.:у г п!Га Сигlгц •�е f1n� уевг о! орвгв!tоп. ' .er-i1:e na1's01г -и.1у . п!�t 1иг{пд �ме llrвt уевг о! оргга�lоп. i.r. гЛS ,п� :ТЕ UY '�е 1V г.е v�rA �0.6 Т1П/1УDвеГSЕlГ ,пд CIy1. Авлг.•! на: .ец вrег,дг ::¢1гutlnq лпд •eealnвttn{ tмffle Гог TMemn^п4гга : 2.1�е касwги, :лг г.5 .inueи Рег а.у ��гпв�мlв J- 0•9106 Ег7vц вс в гопг•nenz.3on .аг н."'5S?: А yev 1в аТ•,в1 to 290 Евув. 9;,•г� �.Dz_rtCere eev a�i6scr11кr уг,s .7utл7ensв. t�vл0et:, :Т: • н У�• � 8 �, � IS• � , , • � • ��YSSC���lS1S� �" � ~ � I� ,.....Sw�1C��$�К'6� г�" а Я � ^, � � �s� �К з I�. . . . . . . �"sa�$е�Эi������� � а Ч ��• � �$• � I•s•��•�5�8����8"в��Е тт Ч N.�рΡуΡ�рΡ�вr ry ��" I `r ООО• WNi1Чw5�VO6ЧФйtK г . уΡ� уΡ� I д_ ц 3_I�a й`К Io . б I• S� йс' йw�бйй�о�йU"'�гЬ• 1�Е s {; уΡ Е�• Ф Q и йч�i3��йЬг�i� УУ": `� �й� К.� о�ййййи$ои .°в � тй�S��йьS'�w�жиь�йй г 1 � ~ й�" ицрΡ � 3 �у �Р Р O.P.OONYPЙW��Y`Р�Ч�ФЧМ �� �� S �' й �й,Sйй€й"ci.д2S3Кi5цFi�й�2q;±• {�%� �.TuwiNWWVЧWM�O�'3fУ�ТФЮ� ��" . ' ��а �g � �' I�Ww�з�G�a��'���'�к���'�� �� � � I� и.Чи�в�?PVUr � �l.vииМУ+1Ф�ЧW0`ОЧJв..ри� ~ I � � � .-. ... ~ JF� ✓ w.РГ�lФРТЧТуtF60.+иИ� �вr• '� `�- � i $ � � �о',и.,.. � о м�g'" � (F�'- 5 о Р •• i с, � и Ч О.в .0 С г� Й У- � AN'N9X 12 Page I NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMMICATIONS PROJFCT Rate of Return Project Period The rate of return calculations are ba5ed on costs and rpvenue,-; in the 24-year period beginning in 1974 and ending in 1997. This corresponds to an estimated average project lifetime of 20 years, commencing in 1978, vhen on average the equipment will be put into operation. The increments due to the project to number of staff, gross value of plant in operation and number of subscriber connections which have been estimated for each year in this period are listed on page 3 of this Annex, together with the costs and benefits resulting from these incri.mental changes. Revenues 2. All revenue estimates are based on the tariff with the amendments agreed during negotiation. The number of subscriber connections made Possible each year by the project has been obtained fror Annex 9. The deposit of NRs 500 required for a subscriber connection is treated as a revenue when paid and as a cost when repaid at the end of the period. RenL.Cs and call charges are based on present averages for local service (NRs 700) and projected averages for trunk service (Annex 11). For telex and leased circuits, the incremental revenue from 1974 has been attributed to the project. No telegraph revenue has been attributed to the project. Costs 3. The additional *:aff necessary because of the project has been estimated from NT3's deta:,...ed staffing plans. From 1981 through 1986, a portion of existing staff has been allocated to the project. Staffing CDSLS have been arrived at by multiplying additional staff by the ave'rage salary including provision for pension. 4. Expenses for spare materials, services, etc. have been estimated to 2.5% of average incremental gross value of plant in operation net of duties. r . Project expenditures excluding contingencies and duties have been obtained from Annex 5. The residual value of the project after 20 years (in 1997) is estimated at NRs 8 million which is mainly the copper value of cables. ANNEX 12 Page 2 Rate of Return 6. The rate of return is 20%, which is the discount rate which equates the present worth of the project's costs and attributed revenues. Sensitivity Analysis 7. A sensitivity analysis was made by varying the main parameters to their extremes (the probability of such an event is close to zero) giving the following results: Rate of Return Case Description % A 15% increase in construction cost and revenue slip /1 16 B 25% increase in operation cost 19 C 25% increase in revenues 25 D 25% decrease in revenues 14 E 10% increase in construction cost, 10% increase in operation cost, and 10% decrease in revenues 16 /1 The construction period will be increased by two years, the construction expenditure increased by 15% which is allocated over year 1980 and 1981 and benefits will be delayed by two years. March 19, 1973 rJEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) Incremental Costs and Revenues Attributable to the Project (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (13) (24) Iear ending July 16 197 1975 1976 1977 1978 1979 1980 1981 1982 1983 1986 1997 PROJECT T!CREMENTS Plant Conissi-nel - Diring the year (NRs million) - 1.32 7.05 16.52 18.29 12.81 7.95 2.72 - - - - - Total, End of Year - 1.32 3.37 214.89 43.18 55.99 63.9LL 66.66 66.66 66.66 66.66 66.66 Oper3tinr' Costs (Excl. DeDrec.) " - .02 .12 .42 .85 1.24 1.50 1.63 1.67 1.67 1.67 1.67 Bhployees (Number) 4 4 4 69 140 177 177 187 198 205 231 231 Cost per Employee (NRs) 3,219 3,380 3,549 3,726 3,912 4,109 4,314 4,314 4,314 4,314 4,314 4,314 Cost of FITployees (NRs million) .13 .13 .14 .25 .55 .73 .76 .80 .85 .88 .99 .99 Subscriber Connections - Ehd of Year (umber) 190 840 1,620 2,190 3,773 6,45 8,685 9,295 9,755 9,795 9,825 9,825 - Increase " 190 653 780 570 1,580 2,675 2,240 610 L6 40 10 - - Average i 95 51.5 1,230 1,905 2,980 5,107 7,565 8,990 9,525 9,775 9,815 9,815 Installation and Deposits (MRs million) .13 .46 .55 .40 1.11 1.87 1.57 .43 .32 .03 .01 -L.91 Rentals and Call Charges I .11 .66 1.87 3.02 4.87 8.58 13.05 15.61 16.54 16.97 17.04 17.04 Other Revenue " - .18 .h8 .73 1.28 1.48 1.88 1.90 1.90 1.90 1.90 1.93 COSTS AND REVENUES Capital Cost (NRs milli:n) 2.58 11.64 21.53 15.00 10.52 5.39 - - - - - - Operating Cost I .13 .15 .26 .67 1.40 1.97 2.26 2.L3 2.52 2.52 2.66 2.66 Residual Value less Deposits " - - - - - - - - - - - 3.09 Joerating Revenue .24 1.3c 2.90 4.15 7.26 11.93 16.5) 17.94 18.76 18.90 18.95 18.94 ANNEX 13 NEPAL NEPAL TELECOMMJNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Proposed Terms of Reference for Consultants 1. The present budgetary control procedures and expenditure accounting systems of NTB are maintained in the form prescribed for a department of Government. The prime accounting records produced thereunder do not lend themselves to direct integration into a commercial accounting structure and, furthermore, cannot provide essential management control information. 2. The consultants will be required to: (a) examine the existing budgetary control procedures of NTB and recommend a system suitable to the specific needs of NTB having regard for the commercial accounting standards required of NTB, and w-th particular reference to the provision of effective management control; (b) examine the system of accounting for total expenditure -and recommend a system that will provide for the production of both regular, fully int-grated, manage- ment accounts and statutory financial accounts. The system should on a regular basis to the extent possible .separate costs for the main services given by NTB and provide accounting information in a detail and manner that will make possible analysis of the cost of the various services NTB is providing; and (c) examine the present working of the internal audit system of NTB and recommend a system suitable to the particular requirements of NTB, that will provide for internal audit to be conducted independently of the accounting system, with no administrative functions placed on the internal auditors. March 19, 1973 ANNEX 14 Page 1 NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Principal Tariffs (As of July 16, 1972) NRs US$ Equiv. 1. Local Telephone Service Rental (incl. 100 free calls /1) per month 40.00 3.79 Call Charge /1 per call .20 .02 Extension telephone per month 25.00 2.37 PBX - for 15 lines per exchange line 25.00 2.37 PBX - for 50 lines per exchange line 35.00 3.31 Deposit (refundable) per main line 500.00 47.35 Deposit (refundable) per extension 250.00 23.67 Installation (actual cost of materials is also charged) 30.00 2.84 2. Long Distance Telephone Service Charge per Minute (each pulse is charged NRs 0.2) Distance Pulse Periods Class (kn) (seconds) I - 25 30.0 .40 .04 II 26- 50 15.0 .80 .08 III 51-100 7.5 1.60 .15 IV 101-200 5.0 2.40 .23 V 201-400 4.0 3.00 .28 VI 401-800 3.0 4.00 .38 For 3-minute calls between public call offices over the HF radio network, the charge is NRs 5.00. /1 In manual exchanges, local calls are not charged. ANNEX 14 Page 2 NRs US$ Equiv. 3. International Telephone Service NT3 share Charge per 3-minute call to NRs India-Zone 1 6.30 24.00 2.27 India-Zone 2 6.30 18.00 1.70 Japan 16.00 90.00 8.52 U.K. 16.00 90.00 8.52 U.S.A. 16.00 102.00 9.66 4. Domestic Telegraph Service Ordinary Nepalese script (incl. 30 letters) per message 1.50 .14 English script (incl. 10 words) per message 1.75 .17 per letter .05 .005 5. International Telegraph Service Ordinary India, Pakistan per message-minimum 6.40 .61 per word .30 .03 Japan per message-minimum 14.70 1.39 per word 2.10 .20 United Kingdom per message-minimum 11.90 1.13 per word 1.70 .16 United States of America per message-minimum 17.50 1.66 per word 2.50 .24 Letter Telegrams. Half the rate of ordinary telegrams. 6. Telex Service Rental per year 5,000.00 473.48 India per 3-minttes 18.00 1.70 Hong Kong per 3-mintues 45.00 4.26 March 19, 1973 А""! �С 1 � г:Е �АЕ. t�FPлL TCLFC�r.•1l1'.1CATGnN`: г•�AP.D 1NГOHF STATFMFNTS Гг:оу Т!�г;гJSАг+�S) ACTUAL fрRЕ:Г.Л;Т _ .__._._ г^с ,'гI`:: J1)LY Ij: 1�71 1�17? I�7? I'l:'� :7^� 1�i(, 1<k7i '_�7у ,- � • , nЕLчдТ�г.г. KFVEhUfS ----�--�-------°- ТЕ'LFPгlqtiEi -кt-t.TALS ?Пц0 ?100 ?57i �11? г?'?n 7;•zi y�g, L ��'' . ... � -1_осАЕ.. сл<.1.s n о о г;,,� �„ лгг, гг�л 1� 1.�. • � -D�11F �Т [С TR11NK ?j0 4�0 гj?П '+;'7 ?:_'гЭ0 4'%!Г г г,?n ""-г ) � .. , г -I7,TERГtAT10ЧAE. 31П �S!1 "1'?О 'l�:C :�Q ''iП �r�r � �',.. � � . -lrатд<_�Ат1�г1 z.� �� ; ,7г! г�� �,г� ,г• -,, :, тnт 1: тг �г n'глг,е ;�." . 3��.,^ ;i �?` "�';пТ ;�"`�'Т ? 7�, ��1 _. � 7 , г,^;, •, _-'.."-' -' . • , Tt:_Е % �j� ц0" <г•'rt �nn 1nn;? ?: : � , . . , . . 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' . . . . . . . . . 4. . � . . � . py'д:,`?с 17 ггЕ�дL ')f^AL TELECOt1nUtlfCATlП!:f, '1^Af:O ��1lр5 FLO1' STATEttCцTS Гг:RS T,10USAгiO�) ACTUAL FПRГСд�Т - `��1� _д� г г.ггi•.г. .;ut,� : . � , . 1 ,7, 1�73 197� 1o7i 197Г � 1977 197б 21�9 ---- , ��-�:-- . ,rК�F� 1 . 1': `! Rг:Аг ' л�`1 f,f �.. """'��"'���"' .. Т I�:ft�•н ..ь F.1 .Т _ ., ..L7R 1.' д ;З� ц��,q1 - г, г а, _ . .. fut �ег .г.lлтlпг, i', �„ .>1,', �.�� г,^п ,г�Г,� 'i 1E? гrд" _1' ,:,� ;, �� 'iгтлтлl � .:'�.� : t�;. --7`'i -�-.,- --�п - �fi', Z. _ ,з; • 3 . '_"_� . гn•гТк Е':,:т гс.�1~ ------------------ ;.оvг�•,nг',r . � � 1�7, ;+���, п � � ' - . � r.:гlлг. дгг ' �''n'� !'^ _ � -- -- --- - S�НйТ��д! , . 1 �� ;�;+ ,. �� � � ^ -г -с.-. , .RC�.�1'.Г.S -__-_с__-_-._-.___ г., , •..:п, „г �,у п , п ^ . ,..., а, r'��i'�':Е:� ^ Г1 п 'с •.и� , �Г1i� ]?. .��! .. " . . Е<.. . . . ;Т,грЕ ^ , � , � .. � � , , ,..;ЛL . . . . 1' . ^PnV��'^ 1 1'1 . �. r, ^ ., ' ^' ' ---- -------- r{т^тд: .. 1 '^ .,?� �'�'? .. __ �� i. , , '?' � 7' . "' •- ,. _ г . :,о,Гг ; . � .1' С'JR.,.1дd. � a�n _�';п о.� „1., ,гг ,г:,. - ' _ .. . _ . Тлг ,п;,кг 5 „ . ..,п __'r_ ��';*; , �1� � -Т--� •,�- , . : ,- . --- - Л °' г'!. 1 �:Л� 1 ("!G 1 Пt.'.ТцJ� Тlг.•. -r_'--_'-'-_-__ 'qc� ,упiп �, , :Гл; � 1^!:�^ пг�..,. п_».. _ ^��г �.�0�'. ... �'а'�J. Г' 1 'v,Mkдtt , . . . . . ..�,�,г� . , , t-UTURГ � ^ . , п . .. -, . ^ _ ^ - , 1'. 1А' l.1: 'R(,1Е�ГТ ' г . "' �', ^ ^ ^ ' .. -_ ,,, �� ,2п � ... ---гт `�-;, . -тт - ?'�.��; тТ;� ;:� �,т'_i-. - . -- ; .. . . � .t R. ,,. -----'-----'-""- .. . , .,-1�, , ' r. � .,�п � 1„ , ,�„^ ,',-.^ :.г ,:"'< ... _ . . .г�Т Сдп� " '!�1 д� ^Г� i��� iг;�, , ^ lгhг �!а г^- • . ., --Т' � � � 1 . . : � - 7!S � 1 ,!'1 п Г �1 � -'�Т `�Т-' ' .. � � - . _ :nг: Ei дТ{Пг.'; ----'----------^-- . 1• . , �:' �. , _ч��� __ . _�п :о а �. . ,. _�-,г . _ - ` .1'. ` . '1k.i,�'�. -. ' _, [„1 _� � Г7� � :_"(� . ^ . �г 1!�� � . г ., , l;:-:�F Т ' ,� , ., , т;тr,г .з; -. -. �^� _3391 ---�тдг о� -��'г?"� �1-Т - j,•� � --- - гг�.т:.г nппl.IгдТ1(r: -`i7^ оь.'7� '.�,`.г 1;7.�Гi :�<,7?� �^г:^�. �'Т^пТ :'i�7' . ,:.у^ -��' � -, --. . . . ,t PV 1Г.1 Г.OVf - � . у (!.т!'�'�At . ' �.�..�TI'�, i) . ,. ' �.. � .'�� г.п� ..З� ... .. � . . ..��' .. � i.R(.' . . . г . ANNEX IS Page I WIPAL NEPAL TELECOMMUNICATIONS BOARD (NTB) APPRAISAL OF A SECONDIELECOMNICATIMIS PROJECT Notes and Assumptions on Financial.Statements A. Income Statements 1. Rentals. The forecast is based on the revenue per subseribet In 1971 and 1972 which averaged about NRS 700 per annum; from 1974 with the proposed rental increase this will increase to NRs 820. 2. Local Calls. The free call allowance will be decreased from 10n to 50 calls per month effective July 1973. 3. Domestic Trunk. See Annex 11. 4. International. Revenues are exp, cted to increase *Jy the number of subscribers and by improved facilities. 5. Installation. The charge per installation, which has averaged about 1NRs 80, has been-assumed increased to NRs 200 effective July 1973. 6. Domestic Telegraph. Traffic is expected to decline with Improve- ments in the long distance telephone network. Effective July 1973, an increase of domestic telegraph tariffs which would increase charges in FY IQ74 by 25% was agreed during negotiations. 7. Tnternational Telegraph. Traffic is expected to decline sli, tly over the period for the same reasons as above. Telex. Service started only in 1972 and revenues in that year -ire only for part of the year. Telex revenues are expected to increase with additional subscribers and improved facilities. 9. Labor. The number of staff as of July 16, 1972 was 999 which 14T9 expects to bring down to 930 by July 1973. The additional staff necessary for new facilities has been estimated for each year and would be 540 by 19FIO. which would increase total staff to 1,490 or by 497. A new salary structlire resulting from the transfer of the staff from Government service to the service of the Board, effective July 17, 1972, has been approved, which lins increased the average annual expense to NRs 2,930 per year. Labor expenses, i.e., salaries, wages, allowances and pension costs, have been projected on the basis of projected staff levels and average expense Per employee, which is assumed to increase by 5% per year (the quality of staff will go up). ANNEX 18 Page 2 The pension liability incurred each year, estimated at about 8% of expenses for salaries and allowances, has been included in the salary expense. Be- ginning in 1974, pensions are expected to be handled by the Social Security Corporation. 10. Materials. In 1972, materials were about 2.5% of average gross value of plant in operation and that figure has been applied in the projec- tion. 11. Depreciation. In agreement with the average for the past two years and in line with experience in other countries, depreciation has been calculated as 5.5% of average gross value of plant in operation. 12. Other Income - Net. The expenses for the IDA financed consultants were charged to 1971 and therefore the figure is abnormally high. In the future revenues are expected to net out expenses. B. Balance Sheets 13. Fixed Assets. Work in progress which includes advances and letters of credits has been projected as the total of construction during the year and 50% of construction during the previous year. Gross value of plant in operation at the end of a year is equal to the total of gross value of plant in operation at the beginning of the year and construction less increase in work in progress during the year. Indian aid provisions have been added to gross value of plant in operation amounting to NRs 6.7 million in 1973 and NRs 6.3 million in 1975. '14. Inventories. For the HF equiptnent, inventories are pro ected to remain on the same level. For the rest of the equipment, inverteries have been assumed at 2% of gross value of plant in operation (excluding .F plant). 15. Accounts receivables. Following assumption has been made: local telephone servire - two month revenues: trunk service - one coi of gross revenues; domestic telegraph - cash payments only: international telegraph - decliini froim uresent level and leased circuits and telex - one and one h,,lf month of -ross revenues. New proced-ires for the accounting of revenues with debtors ;edgers are now being introduced and, by the end of this fiscal ve.ir (Ju;y 16, 1973), the assumptions above are expected to be i. oi'.-erm Debt Gross. The pension fund, projected as the accumu- Inteo toLal of annual pension provisions, is inciuded. By 1974, administra- tlon of NTf)'s pensions together with the pension fund are expected to be handed over to a scparate government-owned agency. II . Accourt Payable. This has been projected on the assumption th..,t d:ie6 mwore than one year old will be settled as of July 1973 and cnanges therenfter will be related to changes in revenues for international telex. telephone and telegraph. ANNEX 18 Page 3 C. Funds Flow Statement 18. Contributions - Government. The Government has already made an appropriation for fiscal year 1973 of NRs 4.77 million for the purchase of equipment under the first project. 19. Contributions - Indian Aid. This represents the value of plant which is being constructed under an Indian aid project and which-will be handed over to NTB when commissioned (the value of the plant is estimated at NRs 13 million whereas the spending during the project period is only NRs 9 million). 20. Loan #4 - Pension Provision. In fiscal 1973, NTB is expected to continue to make a provision for pension liabilities incurred, which amount has been treated as long term borrowing. 21. Construction - Indian Aid Project. See paragraph 19 above. 22. Debt Service - Amortization. When NTB hands over the management of pensions to the Social Security Corporation in 1974, the accumulated pension liability estimated at NRs .75 million will also be handed over. 23. For details of NTB's debts and debt service see page 4 of this Annex. March 19, 1973 •г1^лС A�iN�L 18 � P;age _С^Al ТвIГСП'УаГ.1САТlО'ь5 •,оАдU (.[г.Т '.Т4т.!ьf•:1; Гг:о�. fi..,4S1,N05� , ..С1� . .��_+14kCCПi' 4..н .vnr : ,гt• , '1�' �_ •� 1?7у � 1птS :9тТ 14�в 19тТ �'1_`оа Uf1,1 CAL1:JlAГ1W,S -- W R R�••. 1 r.4'. 1пя: .- --,.лС-:'� .• .:дп 5tt5 15iz 1"гУ о с о о п Сппl, .� wor•п'.,п о а zzze lоевт lуглт 1г•,оз втвб оlгп ,г.•, У�-гигиыс • о о с о �ооп s•1оо Сон, в�.-гпr.iг,г. 1'� t,о тбо о с -__ - 2 п U г Тоrл1 l.лкаоиlисs -'�'n.' `ТАУ$ �; " g�33 -"�о.'у� "TэSi"5 -I3TO-3 -'F7'� -"�{� Sппп "'-"' "ст"". ssssгva as`-sae в:ег'ге ':-а'ек .'ка��' sseaк`г г',-''' "..то.- 0.rrfn.T I : А11 fК1 . 1п�•• • п о боп 1г.о lгоо tгос гг�о �т�о l.)А•. • . ` 0 �г гл, � о 0n о )?У1, ?0:� l:,Ar. . . п � ...�� v ��г о 'J ' • to'вС :blоиТl:;лlпн � 9 13У, 1I7o 1г� :п: 17о0"{L'8л jT; . .г.1У.Чи 411.T г.4�п•. "'""'"""""""' ",к, .i . Э1'п 9�t5 2;.17 15ЭУ1 l•:ь1 1г.Ч2 11Тд1 :п5и1 ЭЭц" . .... . 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"-"'. "_"_"' " ' . . ЗЭ1 *k7 :�ОЭ ^' - 9е- �^: r•и 44Г, • г.. . - г. .'6 t,..,1 ?ыг9 {Ь.ц; 1lПГ Эчг.7 . . . _'._� ____ �__ 1 0 _ � _..З:� . . .! ., . �^_ . . л'•1•� 1: - , ;Ч1 'Э :r,12 Эв�ч и.•]г У�.:, •:kг I '1M1V1': t . .1' T1k.l:..��., •- -��- --•-- - , ;� ,�- ,:i .•.г: г^чо � гн '�,,4 . " � ' 1rF� �1:4 . ^ ''7Э R3P.1 г - . 1 4.. --��. . �i,� �_�_ _.._ '1 .�.�� , . • ... . ' . 1' .. �н 4,.1'! :.ГПг 6:lь. .. . .. . ♦ . . . ' . ,.'г . .. . .,.v4 .. ..1� r... .1+ � . г�,ьсо.Т., '. . .' .-..r. 2.: _.f4. �в.�7 '�и.�• .:г .. � ..п' ^'С .. .. ANNEX 19 NEPAL NEPAL TELECOKKJNICATIONS BOARD (NTB)- APPRAISAL OF A SECOND TELECOMMUNICATIONS PROJECT Yiscal Impact of NTBs Operations 1973-1980 The fiscal impact of NTB's operations will be considerable and quite favorable. During the 1973-1980 period, the Government will receive, as summarized below, principal and interest on the proceeds of the two credits passed on to NTB on commercial teLl ; customs duties on imported eauipment; and dividends. Offsetting items will be senrice charges payable to IDA, and an appropriation for the ongoing project already made in the 1972/1973 Government budget. (NRs millions) Interest NEP 166 6.2 Proposed 16.7 22.9 Principal NEP 166 7.4 Proposed 4.7 12.1 Customs Duties 8.7 Dividends -2.0 Total Funds Accruing to Government 45.7 Less: Service charges to IDA 2.4 Government contribution 4.8 Net Funds Accruing to Government 1973-1980 38.5 March 19, 1973 NEPAL NEPAL TELECOMMUNICATIONS BOARD (NTB)- DEMAND AND SUPPLY OF SUBSCRIBER CONNECTIONS 1960-1980 (Years ending July 16) JO 20-- - Esirmated denund .n• areas, ncluded in the • Progarn Il 0% annual growth) UJnmt,sted Unsatist.ed,dpmand dermnd n ' areas peesentiy not areal presetf 7ee servd 6i --- ______ _____ Dermand fn areas wIhere telephone 5 -- - -.. _.se-vce. å vaølalIe 117% annuat g'onhe 4.563 subw,.b er corinnet,ons at july 16, 1972 S2 -----Suppk fInume of connected subscriberý, 20%annualgrowthi 6-- Progra, Actual Fa. 0 } 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 /8 79 - NEPAL NEPAL TELECOMMUNICATIONS BOARD ORGANIZA TION 8oARL 01 OlHtCTOHS CHAIRMAN (SECRETARY FOR COMMUNICA1I0NS, ANL POUR MEMBERS n GNERAL MANAGtR BUSINESS. ADMINISTRATION FINANCE DEPARTMt NT ENGINEt!RING DEPARTf.'ENT :ND PERSONNEL DEPARTMENT FINANCIAL CONTROLLER CHIEF ENGINCEER BUSINESS MANAGER (SECRETARY TO 80ARDI PERSONNEL. ACCOONTS ADINISRATIONMAINTENANCE AND TRAINING FIELD ORGANIZATION - - mCM - ------- - -- -m- - -- - - - - - - - - - - - BIRATNAGAR REGION KATIIMANDU RLGION BIRGUNJ REGJON REGIONAL MANAGER CIRAINAGAR HI,NAL KAIIMANUU ntINAL MANAuR BGISNS ADMI`ESIEAtFG, , PER1SnN% L Lt LrGRAP, tv E 1Т 1�• � '� .� N Е Р А l_ •�. -'�-. 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