Philippines - Seventh Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-2097-PH REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE NATIONAL POWER CORPORATION WITH THE GUARANTEE OF THE REPUBLIC OF THE PHILIPPINES FOR A SEVENTH POWER PROJECT June 2, 1977 Thls document has a restricted distributon and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriation.  CURRENCY EQUIVALENTS US$1.00 = Philippine Peso (P) 7.50 P 1.00 = 100 centavos P 1.00 = US$0.133 P 1 million = US$133,333 UNITS AND MEASURES 1 kilovolt (kV) = 1,000 volts (V) 1 megawatt (MW) = 1,000 kilowatts (kW) 1 megavolt ampere (MVA) = 1,000 kilovolt amperes (kVA) 1 gigawatt hour (GWh) = 1 million kilowatt hours (kWh) 1 kilometer (km) = 1,000 meters (m) ABBREVIATIONS AND ACRONYMS NPC - National Power Corporation MECO - Manila Electric Company NEA - National Electrification Administration PDC - Power Development Council NPC'S FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY Page 1 of 3 pages PHILIPPINES SEVENTH POWER PROJECT Loan and Pro,ject Summary Borrower: National Power Corporation (NPC) Guarantor: Republic of the Philippines Amount: $58 million equivalent Terms: 20 years including a grace period of 4-1/2 years, with interest at 8.2% per annum. Project Description: The project includes: (a) Expansion of transmission system in Luzon comprising: (i) about 1,360 km of 230 kV, 115 kV and 69 kV trans- mission lines; (ii) substations with a total capacity of 225 MVA; (b) The first stage of establishing communication systems and a control center in Luzon; (c) Support for NPC's training activities; (d) Consultants' services for management improvement and a tariff study. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Page 2 of 3 pages Estimated Cost: Foreign Local Foreign Total Exchange ($ million) ---- --(%) - A. Transmission System Transmission lines & substations 14.02 29.15 43.17 Engineering & administration 2.20 - 2.20 Subtotal 16.22 29.15 45.37 64 B. Communication & Control Communications network 0.83 4.87 5.70 Control facilities 2.21 2.97 5.18 Engineering & administration 0.55 0.93 1.48 Subtotal 3.59 8.77 12.36 71 C. Training & Advisory Services Training school 2.34 2.38 4.72 Overseas training - 0.41 0.41 Management advisory team 0.11 0.72 0.83 Tariff study - 0.03 0.03 Subtotal 2.45 3.54 5.99 59 Base cost estimate 22.26 41.46 63.72 65 Physical contingencies 3.51 3.96 7.47 - Price contingencies 8.57 12.58 21.15 - Total Project Cost (net of taxes) 34.34 58.00 92.34 63 Financing Local Foreign Total Plan: ------ million) ------ Source NPC 34.34 - 34.34 World Bank - 58.00 58.00 Total 34.34 58.00 92.34  Page 3 of 3 pages Estimated IBRD ($'000) Disbursements: Fiscal Year Annual Cumulative FY78 880 880 FY79 11,920 12,800 FY80 25,900 38,700 FY81 16,050 54,750 FY82 3,250 58,000 Procurement Arrangements: Equipment and materials to be financed under the proposed loan would be procured through international competitive bidding in accordance with Bank guidelines. For the purpose of bid comparison, qualified local manufacturers would receive a margin of preference of 15% over the c.i.f. price of imported goods or the level of customs duties, whichever is lower. Civil works contracts for erection of transmission lines and construction of communication and control and NPC's training centers would be awarded on the basis of competitive bidding advertised locally in accordance with local procurement procedures which are acceptable. Technical Assistance: Engineering (144 man-months) and management consulting services (108 man-months) would be provided to assist NPC in carrying out parts (b) and (d) of the Project described above. The proposed loan would also cover the foreign costs incurred in the training of middle management staff of NPC. The foreign exchange cost of technical assistance, net of contingencies, is estimated at about $2.1 million. Rate of Return: Based on the expected level of tariffs, the estimated economic rate of return on NPC's investment program for the 1977-82 period is 10%. Staff Project Report: No. 1552-PH, dated May 23, 1977.   REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE NATIONAL POWER CORPORATION WITH THE GUARANTEE OF THE REPUBLIC OF THE PHILIPPINES FOR A SEVENTH POWER PROJECT 1. I submit the following report and recommendation on a proposed loan to the National Power Corporation, with the guarantee of the Republic of the Philippines, for the equivalent of $58.0 million to help finance a seventh power project. The loan would have a term of 20 years, including 4 1/2 years of grace, with interest at 8.20 % per annum. PART I - THE ECONOMY /1 2. An economic mission visited the Philippines in April/May 1975 and its report, "The Philippines: Priorities and Prospects for Development, Basic Economic Report" (No. 1095a-PH of May 5, 1976) was distributed to the Executive Directors on May 18, 1976 (SecM/76/366). Paragraphs 3-16 below are an updated summary of that report. Annex I contains country economic data. 3. During the 1960s, the economy grew in real terms at an annual rate of about 5%. However, the rate of growth was less than what might have been achieved if the considerable natural and human resources of the Philippines had been exploited more effectively. Moreover, the benefits of growth were distributed relatively unevenly. As the population and labor force continued to grow rapidly, unemployment rose. Low levels of taxation accentuated these problems and resulted in inadequate public investment in necessary infrastructure and social services. A relatively weak export performance combined with a failure to reduce the import dependence of domestic industry resulted in a steady deterioration in the balance of payments position. 4. During 1970-72, the authorities adopted policies of monetary and fiscal restraint in order to lay a firm basis for future growth. With assistance from the Consultative Group for the Philippines, they succeeded in improving substantially the maturity structure of the external public debt. Real GNP during that period increased at about 5% a year. In 1972, the Government initiated a series of social and economic reforms including an agrarian reform program, tax reforms, and an administrative reorganiza- tion. 5. In 1973, there was a sharp increase in the level of economic activity in the Philippines and the growth in real GNP doubled to 10%. /1 This is the same discussion of the economy as that in the President's Report for the Second Rural Development (Land Settlement) Project (P-2061-PH) of April 28, 1977.  -2- This upsurge was led by the international commodity boom, which resulted in higher export incomes, a strong recovery in agricultural and industrial production for the domestic market, and an expansion in public and private investment. 6. Like most countries, the Philippines was profoundly affected by the events in the world economy that began with the marked increase in the prices for food and petroleum in late 1973. With international trade the equivalent of almost half of its GNP, the Philippines was quite vulnerable to the impact of world inflation, the increase in oil prices, and the pro- longed recession in the industrialized countries. While adverse effects of the recession were cushioned somewhat in 1974 by a modest improvement in the external terms of trade, the Philippines was more seriously affected in 1975 by the continued rise in import prices and reduced demand for Philippine exports. While the international economic situation has made it difficult for the Government to realize its objective of accelerating the rate of development, GNP in 1974, 1975, and 1976, nevertheless, grew in real terms at an annual rate of about 6%. 7. Agricultural production has grown at an average rate of 3.2% per year during the 1970s, a period which has been characterized by unusually adverse weather conditions. Rice production increased by 25% in 1973/74, but because of damage by typhoons, grew by only 1% in 1974/75; the Government had to import 200,000 tons in the first half of 1975 to ensure adequate stocks. However, the rice harvest in 1975/76 was very good due to favorable weather conditions and during this period the Philippines was vir- tually self-sufficient in rice. The Government continues to give the highest priority to further increasing agricultural production and has initiated a number of programs designed to expand the use of fertilizer, irrigation and supervised credit. It has also intensified efforts to expand the social services needed in rural areas, including rural electrification, health and family planning services, and village road and small-scale irrigation projects. 8. Although progress has been slower than initially planned, the Government has made some progress with its agrarian reform for the nation's one million tenant farmers who grow rice and corn. By September 30, 1976, the Government had issued Certificates of Land Transfer to 224,000 of the 424,000 tenants on holdings of over 7 hectares; thus, title to 390,000 hectares (out of the total 825,000 hectares of farms occupied by such tenants) has been transferred. The Government has raised the cash portion of the com- pensation package to landlords to reduce their resistance to land reform, but strong administrative efforts will be necessary to ensure continued progress in the implementation of the program. 9. Industry accounts for almost 30% of net domestic product, one third of total fixed investment and 15% of total employment. Industrial production, which grew by 12% in 1973, was adversely affected in 1974 and 1975 by the worldwide economic slowdown and the depressed demand for Philippine exports. As a result, industrial production increased by only 4% in 1974 and 5% in 1975. Stepped-up public sector spending for infrastructure development and  - 3 - other priority projects contributed significantly to sustaining the higher level of domestic activity in 1976, especially in the construction industry. The longer term prospects for industrial growth are favorable because of the natural and human resource endowment of the Philippines and a very active private sector. 10. The Government has made significant progress in increasing public investment. The ratio of public investment to GNP is currently over 4%, having risen from 1.8% in FY72./1 The Government has also implemented a series of long needed tax reforms and improvements in tax administration. These reforms, aided by the increased economic activity, the boom in export incomes, and domestic inflation, resulted in a 36% increase in national government tax revenues in FY73, and an estimated 47 percent in FY74. The ratio of national government tax revenues to GNP has increased from an average of 9% in the early 1970s to about 12% during the period FY74-76. 11. Significant financial reforms have also been introduced. At the beginning of 1976, the Central Bank issued circulars designed to help ration- alize the level and structure of deposit and lending rates; deposit rates were raised for the second time in 18 months; long-standing statutory ceilings on the long-term lending rates of banking institutions were increased from 12-14% to 19% per annum; and the ceilings on short-term lending rates were raised. Efforts were also made to control short-term money market operations and to strengthen the organized banking institutions. These actions should help to improve the mobilization and allocation of domestic resources in the Philippines. 12. In the latter part of 1973, inflation emerged as a major problem in the Philippines. The increase in prices was caused by the large increase in liquidity that came with the export boom in 1973/74, and by a number of cost-push factors, including the higher rate of world inflation. To deal with this problem, the Government adopted contractionary monetary and fiscal policies, and attempted to reduce the impact of inflation on consumers by subsidizing such essential goods as wheat, imported rice, and cooking oil. The annual inflation rate fell from 35% in 1974 to 8% in 1975 and 6% in 1976. 13. On the external side, Philippine's balance of payments benefited considerably from the international commodity price boom during 1973. High prices for the country's chief exports, including coconut products, sugar, copper and wood products, resulted in a 70% increase in export earnings and a current account surplus of about $550 million. Since mid-1974, the external trade position has deteriorated, due to the sharp increases in the prices of oil and other imports, less favorable prices for Philippine exports, and reduced volume of some exports resulting from the downturn in the econo- mies of the Philippines' main trading partners. As a result, current account deficits of about $900 million in 1975 and about $1,000 million in 1976 were incurred. The current account deficits have been offset by direct foreign investment, inflows of medium- and long-term loan capital, the use of IMF /1 Fiscal year July 1 to June 30.  facilities and some short-term borrowing by the Central Bank. External reserves were about $1.2 billion at the end of 1976, equivalent to four months' imports. Assuming continued sound debt management and the maintenance of a balanced maturity structure of foreign borrowings, the overall level of external debt of the Philippines is expected to remain within reasonable limits, as the ratio of debt service payments to exports and nonfactor services would average about 16-17% during the rest of this decade. At present, the Bank/IDA share in total debt outstanding is about 17% and its share in debt-service is about 4%. These shares are expected to increase somewhat in the years ahead. 14. In addition to increased domestic savings substantial foreign assist- ance will be essential to help finance the large investment expenditures which will be necessary for the country's development. In order to ensure that disbursement of external assistance reaches levels commensurate with the level of development expenditures which will be required during the latter part of the decade and that debt service obligations remain within reasonable limits, total commitments of official assistance will need to be maintained in real terms at least at the annual level of about $500 million which was achieved in 1974. The Consultative Group for the Philippines at its meeting in Paris on June 15 and 16, 1976, agreed that it would be reasonable for the Philippine Government to seek official aid commitments of about $600 million in 1976 and $700 million in 1977. Total new commitments of public and private medium- and long-term capital are estimated to have reached $2 billion in 1976 and need to be maintained at approximately this level through 1980. 15. Despite the slowdown in the growth of the economy, which is pri- marily a result of worldwide economic conditions, the Government remains committed to regaining the growth momentum, which began in 1973, to provide for a continued increase in incomes and employment. Both the Philippine Government and the Bank staff Report "The Philippines: Priorities and Prospects for Development" estimate that it should be possible in the longer term for the Philippine economy to grow in real terms at a rate of about 7% per annum provided that good economic management continues and international economic conditions improve. High priority must be accorded to expanding employment opportunities, because unemployment and underemployment are still high and the labor force continues to grow at 3% a year. Continued attention must also be given to expanding the Government's effective family planning program to reduce the rate of growth of the population and the labor force. 16. The Government is pursuing a development strategy which focuses on rural development with emphasis on food production, accelerated industriali- zation, both in capital-intensive resource based industries and labor-intensive export industries, and a substantial expansion in public sector investment in infrastructure to support the growth of the productive sectors. In support of these objectives, the Government plans to continue its efforts to increase public revenues, to strengthen the capacity of public sector agencies and to foster the growth of exports. It is also actively encouraging both local and foreign investors to expand productive investments. While the Government understands that large scale borrowing abroad cannot continue indefinitely, it also recognizes that it will take time for development programs to have an  impact on the balance of payments. Therefore, the Government is seeking increased support from the international financial community to assist in the financing of its development effort. PART II - BANK GROUP OPERATIONS 17. By 'May 17, 1977, the Philippines had received 47 Bank loans (of which two were on Third Window terms) and three IDA credits for a total of $1,201.8 million, net of cancellations. About one third of Bank lending ($407.4 million) has been for infrastructure projects in power, transporta- tion, and water supply and another third ($420.4 million) has been for agriculture. Of the remainder, $248.4 million has been for industry and $125.6 million has been for social sector projects in education, population and urban development. There has been a marked improvement in the execution of Bank-financed projects in the last four years compared with experience in the 1960s, when there were serious problems caused by a shortage of peso counterpart funds and poor administration. All ongoing projects are now being implemented reasonably well. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of April 30, 1977, and notes on the execution of ongoing projects. 18. The Bank's lending program has been designed to continue to support the Philippine development effort with its emphasis on agriculture and infra- structure and its growing attention to the needs of lower income groups. About one third of Bank lending planned for the next few years would be for agricul- ture and rural development projects and another third would be for needed basic infrastructure projects, mainly in the fields of transportation and power. The amount of lending for social sector projects, including education, population and urban development, is expected to continue to grow rapidly and account for nearly 20% of future lending. The balance of future lending would be for industrial development, where growing attention is being given to the needs of small and medium industries with high employment potential. The rapid growth in public revenues during the past five years has allowed for a significant expansion in public investment and both the ambitious Philippine development program and the Bank's growing lending program have been designed to meet the country's substantial future needs. 19. This is the eighth loan to be presented to the Executive Directors in FY77. Loans for tree farming, rural infrastructure, irrigation, industrial finance and rural electrification are expected to be ready for consideration by the Executive Directors within the next few months. 20. As of April 30, 1977, IFC had made commitments in the Philippines totalling $79 million for investment in 14 projects in the fields of devel- opment banking, power, telecommunications, ceramic tiles, paper, petroleum products, nickel mining and refining, chemicals and synthetic fibres and edible oils. Of these investments, $32.4 million had been sold, cancelled and repaid, leaving a net portfolio of $46.6 million, including $0.6 million undisbursed. A Regional Mission for East Asia was established by IFC in Manila on April 1, 1977.  - 6 - PART III - THE POWER SECTOR 21. The three major regions of the Philippines are in very different stages of power development. Most of past power development has taken place on the island of Luzon, where about half of the population live and most industrialization has occurred. Some grid development has also taken place on the main southern island of Mindanao, particularly in the northern part where the availability of easily developed low cost hydropower has attracted substantial industrial investment. In the Visayas, which comprises all other major islands located in the central part of the Philippine Archipelago, grids are only now beginning to be constructed. 22. Historically, ownership of the power sector has been fragmented. The largest utility in the country has been the privately-owned Manila Elec- tric Company (MECO) which holds the franchise for the greater Manila area. The National Power Corporation (NPC), which is the second largest utility and totally Government-owned, generates and sells power in bulk to other utilities and large industrial consumers. In addition, there are a number of small utilities in the country, operating largely in isolation. In 1970, there were 336 privately-owned and 122 publicly-owned utilities, most of which were very small and were located in urban areas. Since then a number have been taken over by rural cooperatives and some have ceased operating. As of December 1975, about 120 utilities and 51 cooperatives were actually supplying consumers. 23. This fragmented ownership has made the integrated development of the sector slow and difficult. To overcome this problem, the Government has taken steps to consolidate ownership of the sector. In 1972 NPC was made responsible for constructing all future generation facilities and estab- lishing island grids. The Government is in the process of purchasing most of MECO's generating plants, which will be operated by NPC in the future. When this process is completed, MECO will become primarily a power distributor. The Government has also established the National Electrification Administra- tion (NEA) with responsibility for integrating small utilities and extending power service to rural areas. 24. In March 1976 the Government established the Energy Development Board to be responsible for the exploration and development of primary energy resources, including geothermal energy, water, oil, gas, and coal. The Board will work closely with the existing Power Development Council (PDC), the body responsible for formulating policies and programs on power development and coordinating the activities of all organizations connected with electric power. PDC coordinates policy for NPC, NEA, MECO and all other utilities and is responsible for approving major power projects and tariff rate policies. It is attached to the Department of Public Works, Transport and Communications, to which NPC and NEA also report. The sector was organized in this manner during the first half of 1976 and has yet to be tested in practice. 25. Since 1957 the Bank Group has made six loans and one IDA credit amounting to $160.3 million, net of cancellations, to NPC and the Government for six projects in the power sector. Four projects have been fully completed. A loan of $22 million (Loan No. 349-PH) was made in 1972 to finance the Fifth  - 7 - Power Project which included a second thermal unit at Bataan and transmission facilities in Luzon. Due to initial delays in the delivery of transformers and poor weather and soil conditions which affected the implementation of the transmission component, disbursements are somewhat behind schedule. However, the loan is expected to be fully disbursed before the closing date which has been postponed from June 30, 1976 to June 30, 1978. The loan of $61 million (Loan No. 1034-PH) for the Sixth Power Project made in 1974 is financing the construction of the 100 MW Pantabangan hydropower plant and expansion of transmission systems in Luzon. The construction of the generat- ing plant was completed in April 1977 as originally scheduled and the plant has since been operating at full capacity. Work on transmission lines has been slow and completion will be delayed by one year. While some progress has been made in the context of past loans to improve NPC's institutional capacity, as noted in paras. 32-36 of this report, NPC's responsibilities are expected to grow very rapidly in the years ahead and strong efforts will be necessary to build up NPC's capability further so that it can effectively implement a much larger power program. IFC made a loan of $8 million to MECO and an equity investment of $4 million in 1967. IFC's Board approved the sale of IFC's equity holding in MECO on September 28, 1976 (Resolution No. IFC 76-43). 26. The project performance audit report on the Fourth Power Project (Sec. M76-35) suggested that the Bank should agree with NPC procedures for annual review and revision of tariffs and specific targets for transmission expansion. It also suggested that the Bank should assist in the development of management training programs. These comments have been taken into account in the design of subsequent projects, including the project now proposed. The report also recommended greater use of local management consultants to assist NPC. This suggestion was carefully considered at the time of appraisal, but in view of NPC's very rapidly growing responsibilities in the power sector and the technical requirements of managing a muich larger program, it was decided that the need for tecnical assistance could only be provided by consultants from an experienced operating utility of a size equivalent to NPC which has confronted problems similar to those which will be faced in the power sector in the Philippines in the coming years. Present Access to Service 27. The electrification of the country has been progressing steadily. The per capita consumption of electricity in 1974 was estimated at 280 kWh, compared with 490 kWh in Korea, 184 kWh in Thailand and 120 kWh in India. Over 30% of the population is currently served with electricity compared with 23% in 1970. Although regional imbalances presently exist, with 46% of the households electrified in Luzon compared with 15% in Mlindanao and 13% in the Visayas, NEA's rural electrification program is expected to improve the'situation. The total electricity supply in 1974 was estimated at about 11.9 billion kWh; 50% was provided by MECO, 20% by NPC, 21% by self- generating industries, and 9% by small utilities. On the consumption side, industrial consumers represented about 55%; residential consumers, 20%; and commercial, agricultural and other users, 25%.  - 8 - 28. NPC and a few self-generating utilities, including MECO, have pro- vided reliable and continuous power supply to about 90% of the total consumers, but services by other self-generating utilities have been substandard, with power available for only a few hours each day. The situation has worsened in some rural areas because small utilities have lost interest in maintaining their business in apprehension of being taken over by NEA and some of them have even ceased operation. However, within a few years NEA's program will more than compensate for the deteriorating service from smaller utilities. Sector Development Objectives 29. The Government is committed to a policy of rapid industrialization which is central to its objectives of fostering growth, employment and exports. It is also committed to a policy of dispersing industrial growth from the already congested Manila Metropolitan Area to other regions of the country. In order to meet these objectives and to realize the planned annual growth in Gross National Product of 7% during the next 10 years, it is estimated that electricity consumption in the Visayas and in Mindanao will need to grow at annual rates of about 16% and 13%, respectively, compared with about 8% in Luzon. This would result in an overall annual growth in consumption of 11%. Because NPC is the institution primarily responsible for power generation, it has a critical role to play in helping the Philippines realize its economic objectives. 30. About 80% of the power generation in the Philippines is currently dependent on imported oil and the remaining 20% on hydro resources. The Government has decided to diversify energy resources by developing indigenous hydro and geothermal power and by introducing nuclear energy. The construc- tion of the first geothermal power plant is underway in southern Luzon, while explorations for more geothermal energy are being undertaken in several parts of the country and have already shown promising results. Investigations are also progressing at several potential hydropower sites. In addition, NPC has started the construction of its first nuclear power plant with financing from the United States Export-Import Bank and commercial banks. 31. NEA has set a target of establishing an electric power cooperative in each province by 1977, completing the country's "backbone" system by 1980, providing electricity to all towns and villages by 1984, and attaining total electrification of the country by 1990. The United States Agency for Inter- national Development has been providing financial and technical assistance for this program. By December 1975, a total of 75 cooperatives had already been formed; 51 were operating, serving a rural population of about 2 million on a 24-hour-day basis. In the course of establishing cooperatives, NEA takes over and integrates some of the existing small utilities, particularly those with exorbitant rates and poor service. By March 1976, the number of utilities taken over by NEA had reached 106. NEA's activities in the power distribution sector will eventually result in only the largest 10 to 15 private utilities remaining in business.  - 9- Sector Investment Program and Costs 32. The sector investment program required to meet the expected demand increase is huge. It will almost triple the country's generating capacity by expanding it from about 3,100 MW in 1974 to about 8,500 MW in 1985. Emphasis will be placed on the development of non-oil sources of generation. If imple- mented as planned, the program would reduce oil-fired generating capacity from 81% of the total in 1974 to 53% in 1985; hydropower would correspondingly increase from 19 to 31%; and geothermal and nuclear power would share the remaining 16%. Although the objective of diversifying energy sources is reasonable, the program is very ambitious and involves certain risks. Financial constraints may hinder the timely development of capital-intensive hydropower projects and technical problems may arise in developing nuclear and geothermal sources of energy. In particular, sufficient geothermal steam may not be secured in time for the planned development of 745 MW of geothermal generation. The program therefore needs continuous review and, if difficulties do arise, it is possible that additional oil-fired thermal plants will be needed. 33. The rapid expansion in generating capacity will need to be accom- panied by a vigorous program of extending the transmission network. In 1976, NPC had a total of 3,600 km of transmission lines and about 1,200 MVA of substation capacity to supply utility and non-utility consumers. About 3,300 km of the transmission network are located in Luzon, 200 km in Mindanao and 100 km in the Visayas. As noted in earlier paragraphs, the grid system has been concentrated in the Central Luzon area, and the population in northern and southern Luzon and large parts of Mindanao and the Visayas either has no access to electricity or has to rely on unreliable and costly generation by small local utilities. NEA is vigorously promoting the rural electrification program throughout the country, but progress of this important program is dependent on the rapid expansion of NPC's grid system into rural areas. The Bank Group has been assisting the grid expansion under the Loans for Fifth and Sixth projects (Loan No. 809-PH, Credit No. 296-PH, and Loan No. 1034-PH), by financing about 1,100 km of transmission lines and 1,200 MVA of substation facilities in Luzon. The Overseas Economic Cooperation Fund of Japan has provided funds for the first stage of grid expansion in the Cagayan Valley in northern Luzon. NPC is also expanding the grids in Mindanao and the Visayas with assistance from the Asian Development Bank and Banque de Paris et des Pays-Bas. In general, NPC has been able to finance a large part of its generating program from export credits and other commercial sources on reasonable terms, but needs to rely more heavily on official sources of development financing to support its transmission program for which commercial sources of finance are less readily available. 34. The total sector investment at the end of 1974 was about $954 million, with NPC accounting for $405 million, or 42%; MECO, 45%; and NEA and other utilities, 13%. The development program envisaged through 1983 will require a total investment of about $6.7 billion (P 50.6 billion) at current prices, including financial charges; this would represent an increase in the share of power in public investment from 10% in recent years to about 35% in the  - 10 - future. NPC's share of the investment program will amount to $5.8 billion (P 43.9 billion), or about 87% of the total. About 65% of this amount will be invested in Luzon, 19% in Mindanao, and 16% in the Visayas. Investment by MECO on its transmission and distribution system will be about $450 mil- lion (P 3.4 billion) through 1983. Another $440 million (P 3.3 billion) will be spent by NEA in financing rural cooperatives to acquire the assets of private utilities and to expand the distribution systems in rural areas. Investment in the remainder of the sector is likely to be small in comparison as it will cover only distribution costs for small utilities not absorbed in the NEA cooperative system. Constraints on Sector Development 35. NPC was created in 1936 as a non-stock public corporation, but was converted to a stock corporation wholly owned by the Government in 1960. Its corporate powers are vested in a Board of Directors which includes the General Manager. Although NPC was originally chartered to develop hydropower re- sources in the country, its role and responsibilities have been dramatically expanded in the past few years following the Government's decision to make NPC the prime force in the development of power generation from all sources. This change in sector policy was so fundamental that NPC has not yet been able to adjust fully to the new situation. NPC has constructed five hydro- power stations and one thermal power station in its 40-year history, but it will need to construct and operate about 75 large power projects in the next 15 years. To carry out a program of the required magnitude successfully, NPC will need to greatly improve its capacity to construct and operate a much larger, more modern, and more complex power system. In particular, NPC needs to improve its capacity for system planning and financial management and control, to streamline and improve its internal organization, and to develop effective training programs for its personnel. 36. The Government recognizes the difficult situation NPC faces and has taken a number of steps to improve its implementation capability and to enable the staff to cope with the large development program. Salary scales and merit systems have been improved to make NPC more competitive with private industry; specialized engineers have been recruited from other government agencies for the newly organized nuclear and geothermal units and basic agreement has been reached to transfer MECO's operating personnel as well as its generating facilities to NPC. There have also been changes in the composition of NPC's Board. Its members, including its chairman, now consist of some of the most highly qualified technocrats in the country. More recently, a Corporate Planning Staff and a Human Resources Development Division have been set up in the head office. The Corporate Planning Staff is responsible for advising NPC management on long range policy planning and assisting the various departments in NPC in implementing long range plans approved by NPC's management. The Human Resources Development Division is responsible for assessing manpower requirements, developing a recruitment and training program and establishing and managing a proposed NPC training  - 11 - center. NPC is also planning to engage consultants associated with an operating utility to review NPC's existing management and administrative structure and assist in implementing the necessary reforms. While a signif- icant beginning has been made, continuous vigorous efforts will be necessary to enable NPC to meet its rapidly growing responsibilities. PART IV - THE PROJECT 37. The project was prepared by the National Power Corporation. A Bank mission appraised the project in March/April 1976. At the time of appraisal, the project proposal included the construction and equipping of the Kalayaan pumped - storage plant in Luzon. However, as the government subsequently received a financing offer for this component from another source, the Bank was requested to consider financing an enlarged transmission component which is also urgently needed. Because of the proposed change in content and scope of the project a follow-up appraisal took place in February 1977. Negotia- tions were held in Washington, D.C. in May 1977; the Philippines negotiating team was led by Mr. Z. B. Baile, the Assistant General Manager of NPC and Dr. Benito Legarda, the Deputy Governor of the Central Bank. The Staff Pro- ject Report (No. 1552-PH) is being distributed separately to the Executive Directors. Program and Project Objectives 38. The proposed project has been designed to assist the Government in implementing the very large power program needed for the Philippines' future economic development and to assist NPC in its continuing efforts to improve its institutional capacity. The requirements of the power sector were dis- cussed in the Basic Economic Report (No. 1095a-PH) and have been the subject of an active dialogue between the Bank and the Government. The main institu- tional emphasis of the proposed project is reflected in substantial assistance to NPC for improving its organization, training programs, and financial policies and procedures. 39. The proposed project would consist of: (a) expansion of the transmission system in Luzon; (b) the first stage of a communication system and control center in Luzon; (c) support for NPC's training activities; and (d) consultants' services for management improvement and a tariff study. 40. The transmission program supported under the project would include about 1,360 km of transmission lines and substation capacity of 225 MVA, which upon completion would extend NPC's transmission grid to cover almost all of the island of Luzon. The 230 kV and 115 kV facilities to be provided under  - 12 - the project would either strengthen existing systems which will be overloaded in a few years or provide a bulk supply of power to areas which presently do not have power supply but expect rapid load development mainly due to the establishment of new industries. The 69 kV lines will extend NPC's power supply to rural areas where NEA is promoting the rural electrification program. 41. The project would also provide for a communication network linking all power plants and major substations in Luzon and a central control center equipped with system monitoring, data acquisition and remote control faci- lities. NPC presently does not have such a control system, which is unusual for a system as large as the Luzon grid, and even a minor disturbance could easily lead to a total system collapse. Upon completion, the control center would continuously monitor all generating plants and major substations so that the cost of system operation can be minimized, system security improved and, in case of system disturbances, service restored with the minimum effect on consumers. 42. As discussed in paragraphs 35 and 36, NPC's present organization, particularly that of the head office, was designed for the execution of a small number of projects, and was suitable for the situation that existed before 1973. The currently expanded role of NPC in the sector necessarily requires a reorganization and redefinition of responsibilities to enable NPC to meet the challenge of the next decade. In order to assist in this process, NPC has agreed to engage: (a) a management advisory team, which would be financed under the proposed loan, to assist NPC in organizing the head and regional offices, redefining authority and responsibilities, and executing day-to-day operations (Section 3.03(a) of the draft Loan Agreement); and (b) by not later than December 31, 1977, a financial manager to plan and manage NPC's finances and conduct negotiations with financial institutions (Section 5.09 of the draft Loan Agreement). The management advisory team would include a qualified systems planning advisor who would assist the manager of the Corporate Planning Department in analyzing the power system, forecasting market demand, and optimizing the investment program. NPC proposes to appoint consultants associated with an operating utility for such advisory services. It is estimated that about 108 man-months of consultants' services would be required, and the team would be appointed by September 30, 1977. It has also been agreed that NPC would implement a management improve- ment program within twelve months after the completion of the consultant's report (Section 3.03(b) of the draft Loan Agreement). 43. A manpower development study for NPC has been carried out by the College of Public Administration of the University of the Philippines. The study estimates that NPC will need to expand the number of its employees from about 5,800 at present to more than 10,000 in 1985 and that training will be needed in a wide variety of disciplines to support this rapid expan- sion. The study recommended the immediate establishment of a comprehensive training program, including the development of an NPC training school. To meet the urgent need for improving managerial capability, funds are included in the proposed loan to provide overseas training for 12 to 15 of the middle management staff of NPC. They would be attached to appropriate foreign  - 13 - utilities for about six months in order to learn utility management practices. To help with NPC's longer term manpower requirements, provision has been made in the project for the establishment of an NPC training center. Agreement has been reached that NPC would review its training program once a year in consultation with the Bank (Section 3.05 of the draft Loan Agreement). 44. Electricity tariffs in the Philippines are complex and diversified, reflecting the fragmented structure of the power sector which has precluded a comprehensive tariff study. The recently initiated reorganization and integration of the power sector, however, would now facilitate such a study, which is needed to ascertain the sector's costs and tariffs on a marginal cost basis and to enable the Government to make more informed decisions on its pricing policy. The Government and NPC have agreed to initiate such a study and to establish a unit within NPC which would be responsible for reviewing NPC's tariffs on a continuing basis (Section 3.04 of the draft Loan Agreement); the Government has agreed to consult the Bank on any significant changes in its power sector tariff policies (Section 3.02 of the draft Guarantee Agreement). Project Cost and Financing 45. The total cost of the project is estimated to be about $92 million (net of taxes), of which $58 million (or 63%) would be in foreign exchange. The cost estimates include a physical contingency of 12% and an overall price contingency equivalent to about 30% of base costs and physical contingency. For local costs, price contingencies amount to 9% in 1977-79, and 8% there- after; for foreign exchange costs, price contingencies amount to 7.5% in 1977-79, and 7% thereafter. The unit cost for overseas training of NPC personnel was estimated at $25,000 per participant for six months. Unit costs per man-month of consulting services were assumed at $6,000. 46. The proposed loan of $58 million would finance the foreign exchange component of the project. NPC would finance the balance of project costs. Project Execution 47. The transmission component consists of a total of 50 small and simple subprojects. NPC has gained sufficient experience with this type of work through the implementation of the Fifth and Sixth Power Projects and would be able to carry out the engineering and construction supervision of the trans- mission project using its own staff. NIPC would appoint a project manager for the project, who would report directly to the Luzon regional manager, in order to ensure adequate coordination and timely completion of the numerous subpro- jects. NPC would procure equipment and materials and would tender civil works contracts which are expected to be carried out by local contractors. Since NPC's experience in system control and communication is very limited, it has agreed to retain qualified engineering consultants for detailed design, procurement and construction supervision for that component. 48. NPC would be responsible for retaining consultants for advisory services and selecting candidates and arranging courses for overseas training.  - 14 - The overseas training of NPC's middle management staff would be carried out in four phases; each phase would be limited to a six-maonth course and 3 or 4 participants so that the program would not jeopardize NPC's daily business activities. Procurement and Disbursement 49. Equipment and materials financed by the proposed loan would be procured through international competitive bidding in accordance with the Bank's Guidelines. Although the project consists of numerous subprojects, contracts would be grouped into several packages large enough to attract foreign bidders. For purposes of bid evaluation, qualified local manufac- turers would receive a preference of 15% or the level of custom duties, whichever is less. Civil works contracts for erection of transmission lines and construction of communication and control center, as well as NPC's training center, would be awarded on the basis of competitive bidding adver- tised locally in accordance with local procedures which are acceptable to the Bank. 50. The Bank loan would be disbursed for 100% of foreign cost of imported goods, 100% of the ex-factory price of locally manufactured goods procured under international competitive bidding, 15% for civil works expenditures, and 100% of the foreign exchange cost or 65% of the total cost of consultants services and overseas training. Financial Analysis 51. To carry out its very large future program, NPC will need to expand its asset base by ten times over the next eight years. To cover capital expenditures of $5.8 billion (P 43.9 billion), NPC will borrow about $3.6 bil- lion (P 26.9 bil]lion) abroad to cover foreign costs. Arrangements have already been completed for about $1.7 billion (P 13 billion) of foreign financing; accordingly, the prospects appear to be favorable for raising the additional borrowing required. The balance of NPC's investment requirements of $2.2 bil- lion (P 17 billion) would have to be provided from within the Philippines either from NPC's internal cash generation or in the form of Government equity contributions to NPC. On this basis, the debt/equity ratio would not rise above 46/54, which would allow a margin for debt revaluation during the forecast period if currency parities change. 52. Since 1972 NPC has been attempting to earn reasonable revenues. The rate of return on currently valued net fixed assets in operation rose from 4.5% in 1971 to 6.4% in 1975; this is primarily the result of a series of tariff increases. However, the higher than expected cost inflation has prevented NPC from achieving the 8% rate of return previously agreed upon with the Bank. In fact, the rate of return for 1976 is estimated to have fallen to 3.5%. A 35% tariff increase was implemented in November 1976 and as a result the rate of return is expected to rise to 5.3% in 1977.  - 15 - 53. Substantial funds are required by NPC over the coming years which must come from a combination of internal cash generation and Government equity as NPC will need to use its borrowing capability primarily for foreign rather than local borrowing. The rate of return should therefore be fixed in the future at the highest level possible, taking into account consumers' tariffs and the amount of budget resources that the Government can allocate to the power sector. With an 8% rate of return on its annually revalued net fixed assets in operation, NPC's internal cash generation would contribute only 4% of the resources needed to finance total power investment program proposed through 1983. Thus, the Government would need to contribute about $2 billion in the form of equity contributions. It has been agreed to continue the existing covenant which requires NPC to earn 8% rate of return. However, in order to provide for a larger share of financing from internal cash generation, the Government and NPC have also agreed to review with the Bank, by not later than June 30, 1979, NPC's tariff levels and to determine a schedule of tariff increases which would enable NPC to earn, at the earliest feasible time, rates of return higher than 8% (Section 5.07 (b) of the draft Loan Agreement). 54. The current debt control test agreed between NPC and the Bank pro- vides that the borrower shall not incur debt without the agreement of the Bank unless its net revenues for the fiscal year next preceding such incurrence, or for a later 12-month period ended prior to such incurrence, shall have been at least 1.3 times the maximum annual debt service requirement for any succeeding fiscal year on all debt (including the debt to be incurred). Because of the increasing need to borrow to finance its capital program, NPC has had to seek the Bank's agreement to incurring each new debt during the past few years. A change was needed to provide covenants which would give adequate freedom to NPC to manage its debt and still assure its major creditor, the Bank, periodic opportunities to review NPC's investment and borrowing program. Therefore, agreement was reached with NPC that: NPC would submit annually a copy of its ten-year development program with the supporting financial plan to the Bank for its review, and NPC would only undertake a major project, investment, or acquisition (defined as those exceeding $50 million equivalent) after having established in consultation with the Bank that such investment, project, or asset: (a) forms part of a least cost development program for NPC; (b) will be undertaken or acquired through means which will ensure a reasonable cost; and (c) will be financed under a reasonable financing plan. These covenants are expected to provide NPC greater flexibility than in the past and at the same time allow for adequate discussion between NPC and the Bank to reach agreement on a least-cost development program (Sections 5.04 and 5.05 of the draft Loan Agreement). In addition, it has been agreed that NPC's medium-term borrowings (i.e., debt maturing within 5 years) would be limited to a total of $50 million equivalent (Section 5.06 of the draft Loan Agreement). 55. NPC had undertaken in the agreement for Loan 1034-PH thao by December 31, 1976, outstanding accounts for electricity supplied would not exceed the previous three months revenues. Efforts have been made to reduce outstanding accounts and arrangements were made in 1973 with certain utili- ties to amortize their accounts receivable over periods ranging from 36 to 60  - 16 - months; on December 31, 1975, a balance of P 5.7 million remained from an original amount of P 23.4 million to be amortized. Consumers' accounts receivable at end-1975 were P 92.3 million, excluding the unamortized balance remaining, or about four months' billings. As NPC was unable to disconnect major consumers because of the effect such action would have on the towns and areas served by delinquent utilities, NPC did not meet the covenant by end-1976. Therefore, the relevant covenant has been repeated in the draft Loan Agreement but the deadline date has been extended to December 31, 1978 (Section 5.08 of the draft Loan Agreement). Benefits and Risks 56. Electricity consumption in Luzon has shown a steady growth during the last decade and the rate of household electrification increased from 35% in 1970 to 46% in 1975. However, most of the people who enjoy electricity live in the central part of Luzon including the Manila metropolitan area. In the northern and southern part of the island only 15% of households have an electricity supply provided largely by small, self-generating utilities only for a limited time each day at high cost. To rectify the situation, NEA has embarked on an ambitious program of total electrification, but its success depends heavily on availability of NPC's power. With the completion of the proposed project, almost the whole of Luzon except for few remote areas will be covered by NPC's transmission grid and 40 additional large industries are expected to be connected to the grid by 1981. Thus, the proposed project would substantially contribute to the country's total electrification and industrialization program by providing low cost, reliable power supplies throughout Luzon. 57. Each of the 50 transmission subprojects has been reviewed and is either the least cost alternative or the only solution available. The basic design has been standardized by NPC to minimize the engineering, construction and maintenance costs and a significant reduction in unit cost is unlikely to result from further design modifications without jeopardizing equipment safety and reliable operation of the system. 58. Since the proposed project is a timeslice of NPC's transmission expansion program in Luzon and forms a part of the generation-transmission- distribution chain of power supply, it is very difficult to quantify benefits attributable to the project. Therefore, an internal rate of return calculation has been made on the basis of NPC's overall investment program in Luzon for the period 1977/82, including both generation and transmission. Efficiency prices were used with all taxes and duties excluded and foreign exchange costs shadow priced. Revenues based on the expected level of NPC's bulk supply tariffs have been used for the benefit. 59. The internal rate of return on NPC's program in Luzon for the 1977-82 period is estimated to be at least 10%. By using a discount rate of 12%, which is considered to approximate the opportunity cost of capital, the average cost of power supply in Luzon was found to be 22.0 centavos per kWh, about 6% over the expected average tariff of 20.7 centavos. This means that the bulk tariffs designed to recover NPC's accounting cost would largely  - 17 - recover the economic cost of power supply in future. The comprehensive tariff study included in the proposed loan would examine in detail the sector costs on a marginal cost basis and provide the Government with guidelines for setting a rational power pricing policy for both bulk supply and retail sales. 60. Recent policy decisions by the Government on the power sector have clearly defined the objectives and strategies for the sector's development. NPC has been given a major role and responsibility in the sector; the country's economic development will to an important degree depend on NPC's future perform- ance; however, NPC has not yet fully adjusted itself to the new situation. Much needs to be done: technical capability needs to be rapidly expanded to cope with the massive development program, financing needs to be secured, planning improved, a comprehensive training program developed, and sound public utility management introduced. The proposed loan would help NPC to improve its overall institutional capability and also to extend power supplies to industries and rural areas. Works involved in the physical component of the project are ordinary ones, and project risks are no greater than can normally be expected for this type of project. There may be some risks associated with the institu- tional aspects of the project. However, these are expected to be minimized as NPC has agreed on principles of managerial reform and has already taken various steps in the right direction. To ensure achievement of the project's objectives, particularly NPC's institution-building efforts, the Bank staff will maintain close contact with NPC and the Government regarding the overall power program and will closely review progress on the project. PART V - LEGAL INSTRUMENTS AND AUTHORITY 61. The draft Loan Agreement between the Bank and the National Power Corporation, the draft Guarantee Agreement between the Republic of the Philippines and the Bank, the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank, and thie text of the draft resolution approving the proposed loan are being distributed separately to the Executive Directors. 62. Special conditions of the project are listed in Section III of Annex III. 63. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank.  - 18 - PART VI - RECOMMENDATION 64. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments June 2, 1977  TABLE SA Page 1 of 4 pages PHILIPPINES - SOCIAL INDICATORS DATA SHEET LAND AREA (THOU KM2)------------------------- __- ---------- ~~~~~PHILIPPINES REFERENCE COUNTRIES (1910) TOTAL 300.0 HOOST RECENT AGRIC. fl6.3 in9c6 19,0 ESTIMArE THAILAND FURKEr KAOR E A ,WR. OF8 GNP PER CAPI TA ( USA) 100 230.0 370. 0 210.0O 480.t20. POUPU0LA T ION A ND V I TAL S T AT ISI IC S POPULATION (RID-YR. NILLIMN 217. 4 36. 9 4 2. 5 36. 3 35.7 314 POPULATION DENSITY PER SQUARE KM. 91. 0 12 3. 0 1 42. 0 71 .0 4 6 .0 3 19. 0 PER SO. AM. AGRICULTURAL. LAND . 279.0 326.0& Ad 61.0 1 320. 0 VITAL STATISTICS AVERAGE BIRTH RATE I/THOU) 45. 1 4 4 .2 43. 8 44.-3 4 0.6 35. 0 AVfERAGE DEATH RA TE c/THOU) 17r. 9 1 3. 2 10.5 13.7 1 4.4 11. 4 INFANT MORTALITY RATE ((THOU) . 80.0 68.0 /a 80.0 14 5. 0 LIFE EXPECTANCY AT BIRTH (YRSI 4 9.4 5 5. 6 58. 4 55 .5 5 4. 4 g,RQ55 REPROOUCIION RATE '.5L/a 3. 3 3. 3 3 .2z 2.6 /&b 2. 6 POPULATION GROWTR RATE (I) TOTIAL 3 .0 3 .0 2. 9 3 .1 2 .5 2.3 URBAN 4 .0 4 .0 4. 0 4 .9 1a.2 6. 4 URBAN POPULATION (1 Or TOIAL) 2 5. 3 271. 6 29.0 15.0 31L.2 41L. 2 AGE SIRUCTURE (PERCENT) 0 T0 14 TEARS 4 5 .1 4 5 .6 44.0 i4 5 .3 41 .8 42 .1 IS TO 64 YEARS 5 1 .6 5 1. 6 % 52. 5 3 .9 5 4.6 65 TEARS AND DOVER 2.? 2 .8 2.0 3.-0 4 .3 3. 3 AGE UEPENOENCT RATI10 0. 9 0. 9 0. 9 0 .9 0. 9 0.9 ECUWORIC DEPLNDENCT RATTO 1.3/b 1.5 1.14/bL 1.1I/c 1.4 FANMILT PLANNING ACCEPTORS (CUMULAT IVE. T HOU). 354.0 2812. 5 4 70.0 USERS TI or MFARR IED WOME N) .. 2.0 1 9. 0 1 0.3 8.2 42.0 EMPLOYHENT TOTAL LABOR FORCE (TROUSANOD 10 103.0 123300 .0 1 42 00.0 167100.0 14 50 0.0/4 104300. 0 LABOnR FORCE IN AGRICULTURE (Z) 6 1 .0 55.0/a 56.0L 7c19. 0 67.0 5./ IJNE4PLOTEO (Z OF LABOR FORCE) 6. 0 7.0 4. 0 .4.0/e 5.o0 / I NC OmE ULISTIRIBUT7ION UF PRIVATE INCOME RECID BY- HY GHE ST 5t Or HOUSEHOLDS 28.8 . . 2 4. 8 .. 3 2.B 1:.1 HTC~HE ST 201 OF HOUSEHOLDS 5 6 .2 54.0/4. 60.6 4 4.5 LSWLST zoo Or HOUSEHOLOS 4. . 2 3. 9 29 I LOWEST 431 OF HUiUSEHOLDS 11. 9 I 1. 9~ 9 r OIbTnTIUTION OF LRNO OWNERSRIP I UNLO BY TOP IT? Or OWNERS . .. . 53 .0 28.0 I UWNE0 BY SH4ALLEST 100 DANERS . . .....09 2. 0 HEALIR AND NUTRITION POPULATION PER PHTSICIAN... 3220.0/ 1 9 7 0.0 2 22 0.0 2 2100/ POPULATION PER NURSING PERSON... 2000.01k 6 650.0 18B0.0/Zg 1760.00 5j POPUOLATION PER HOSPITAL BED 11I80 .0 850.0. 8 50.0 49 0.0 1 92 0. 0 PER CAPITA SUPPLY OF- CALORIES (Z OF REQUIAEnENTS) 853. 0 100.0 97.0g105.0 110.0 10 3.0 PROTEIN (GRAMtS PER DAT) 4 4. 0 4 5. 4. 0 47: 520 1.0 6. -OF WHICH ANIMAL AND PUL,E 19.0O/c 2 2. 0 11.0/a 22.01b 1 9 .0 TEATH RATE. I/THOU) AGES 1-4 9.DOa 9 .0 9.3 a15.Oa EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 91.0k 108.Oa 10. % 82.0 ILI.OA. 104. 0 SECONDARY SCHOOL 26.0 48:0 ~ 48. D[LIZ 16.0 2 8.0 41.0 YEARtS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 10. 0 1 0. 0 10. 0 12.0 I1. 0 12. 0 VOCATIONAL ENROLLMENT (I DF SECONDARY) 14.D If A.DL/ 9.U /& 14.3 / 14 .0 16. 0 ADULT LITERACY RATE (I) ... 72. 07a 19. 0 5 5. 0Z 81.0 HOU SIN4G PERSONS PER ROOR (AVERAGE) . 2.1 ...1.9 2.7 OCCUOPIED DWELLINGS WITHOUT PIPED WATER (Z) 80. 0 76.0... 6 4 .0 So.o0/g AC CESS TO ELE CTR ICIT Y (1 OF ALL DWELLINGS) 1 7. 0 23.0 ... 4 1.0 50. 0 RURAL DWELLINGS CONNECTED TO ELECTRICITY (1) . 7 . 0 I. 8. 0 30. 0 CONSUMPTION RADIO RECEIVERS (PER THOU POP) 22.0 45.0 45.0 78.0 89.0 126.0 PASSENGER CARS (PER THOU POP) 3.0 8.0 9.0 5.0 4.0 2.0 ELECTRICITY (RWH/YR PER CAP) 100.0 235.0 315.0 124.0 247.0 301.0 NEWSPRINT (AG/YR PER CAP) 1. 3 2.0 1. 5 1. 0 0.17 3. 4