Cameroon - Post and Telecommunications Technical Assistance Project

Docunmt of The World Bank FOR OFFICIAL USE ONLY Report No. 986_ PROJECT COMPLETION REPORT REPUBLIC OF CAMEROON POSTS AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT (LOAN 2073-CM) AUGUST 26, 1991 Industry and Energy Operations Division Occidental and Central Africa Department Africa Regional Office 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.  Abbreviations and Acronyms The Entity s The Entity intended to be established through the project, for the administration and operation of Post and Telecommunications services INTELCAM : International Telecommunications Corporation of Cameroon ITU : International Telecommunication Union P and T : Posts and Telecommunications UNDP : United Nations Development Program UPU : Universal Postal Union  THE WORLD BANK FOR OMCAL USE ONLY Washington, D.C 20433 U.S.A. Iite if DsttoCmtal Opmati Evlution August 26, 1991 MEM0RA4DUH TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Cameroon Posts and Telecommunications Technical Assistance Project (Loan 2073-CM) Attached. for information, is a copy of a report entitled "Project Completion Report on Cameroon - Posts and Telecommunications Technical Assistance Project (Loan 2073-CM)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only in the porformrnace of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OMCIAL USE ONLY CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CH PROJECT COMPLETION REPORT Table of Contents Pritface ............................ 1 Basic ........... ................ 11 ref.1ichts . ....... ...... . . . . . .. ..... * .. vi I. INTRODUCTION 1...... .... .... II. PROJECT PREPARATION AND APPRAISAL ..... ....... ........ 1 Project Objectives .................. ....... ... .. . I The Project . ................ *..............*..*...* 2 Covenants ..... ...................................... 2 III. PROJECT IMPLEMENTATION ............................. .. ,*. * * 3 Loan Effectiveness and Project S tart -Up ............. 3 Project Revision .......................... .s.e. .... *. 4 Implementation Schedule ............... . .............. 4 Reporting . .......................................... *4 Procurement ....................... ............. . .. 4 Disbursements .................... 0....................... 4 Loan Allocation ....... ..... . S 5 Operations ..... .......... . * .................... . 5 Performance of Consultants and Bor rore r ............. S IV. OPERATING PERFORMANCE ........................ ....... . 6 V. FINANCIAL PERFORHANCE ............................... 6 VI. INSTITUTIONAL PERFORHINNCE............ ............. 6 VII. BANK PERFORMANCE ............... ........ t Overall Contri bution ... on..... ........................ 7 Supervi rvsion ........ ................................ 7 Working Relationship ................................ 7 VIII. PROJECT JUSTIFICATION AND FAILURE TO ACHIEVE THE OBJECTIVES ........................... 8 Project Justification .............................. 8 The Failure to Achieve the Objectlve.................. 8 IX. CONCLUSIONS .................. .. ..... .e 9 Annex 1: Compliance wLth Covenants ANNEX 1: Compliance with Covenants ,..... , 10 This document has a restricted distribution and may be used by recipients only in the performance nf thPir n ": I dUti^* It- einntants iv v tint r' oW * a 1 s dl -' sd Withr t Wnr'd r r - ithnri *-n|  - i - CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COIPLETION REPORT Preface 1. This Project Completion Report (PCR) ;overs the Post and Telecommunications Technical Assistance Project in Cameroon, supported by Loan 2073-CM. The loan of $7.5 million to the United Republic of Cameroon, was approved on December 17, 1981,.became effective on July 2, 1982, and was closed on December 3., 1985, which was the original closing date. 2. This report was prepared in the Africa Technical Department of the World Bank on the basis of information available in the files. 3. The draft PCR was sent to the Borrower for v mnents, however, no comments were received.  - ii - CAMEROON POST AND TELECOMHUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COMPLETION REPORT Basic Data Sheet - Key ProJect Data Appraisal Actual or Items Expectation Current Estimate Total project cost (t million) 11.1 n.a. Overrun (Z) 0.0 n.a. Loan amount ($ million) 7.5 7.5 Disbursed ($ million) 7.5 2.0 i/ Cancelled (S million) 0.0 5.5 I Completion date 12/31184 Not completed Proportion completed by expected completion date (Z) 100.0 30.0 Time overrun (X) 0.0 n.a. Economic rate of return (I) n.a. n.a. Financial performance Improving Poor Institutional performance Improving Poor 1/ As of February 137 1986, the date on which the account was closed (the formal closing date was December 31, 1985).  - {it - CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COMPLETION REPORT Basic Data Sheet - Other Project Data Ori;inal Actual or Items Plan Current Estimate First mention in files 5/79 Government's application 11/79 Appraisal 02116/81 Negotiation 08/24/81 Board approval 12/17/81 Loan Agreement date 03/19/82 Effectiveness date 03/82 07/02/82 Closing date 12/31/85 12/31/85 Borrower United Republic of Cameroon Executing agency Idem, through Ministry of P&T Fiscal year of executing agency July 1-June 30 Commitment charge (Z) 3/4 Interest on outstanding loan amount (S) 11-3/5  - iv - CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CH PROJECT COMPLETION REPORT Basic Data Sheet - Mission Data Month/ No. of No. of Man Date of Mission Year Veeks persons Weeks Report Sector 12/78 3 2 6 11/13/79 Preparatory 7/79 1 1 1 n.a. Preparatory 12/79 1/2 2 1 02/14/80 Preparatory 04/80 1/2 1 12 n.a. Preparatory 05/80 1 1 1 n.a. Appraisal 02/81 2 1 2 03/11/81 Subtotal 11-1/2 Super'iision 05/82 1 2 2 06/04/82 Supervision 11/82 1 1 1 12/07/82 Supervision 05/83 1-1/2 1 1-1/2 07/08/83  CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COMPLETION REPORT Basic Data Sheet - Country Currency Exchange Rates Exchange Rate Year US$ 1.00 - 1981 271.73 CFAF 1982 328 61 1983 381.06 1984 436.96 1985 449 26 Appraisal year average 271.73 Intervening years average 382.21 Completion year average 449.26 .1  - vi - CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COMPLETION REPORT Highlights 1. In 1979, the Government of the United Republic of Cameroon requested the Bank's participation in improving the efficiency, reliability, and quality of the country's postal and telecommunications services. The request led to the Posts and Telecomlunications Technical Assistance Project. 2. In this framework, the Government was tot (a) restructure the organization providing the servicest (b) systematize and accelerate staff training; (c) rehabilitate existing installations; and (d) prepare appropriate development plans and expansion programs. The rehabilitation element was implemented separately. and the three other items made up the Project, which was to be executed with the assistance of cotasultants. Loan 2073-CM financrid the foreign exchange costs and the Government the local costs. 3. The sector reform component was to be carried out in two stages: firstly, a review of the existing situation and the preparation of recommendations and a plan of action; secondly, implementation of sector reforms. The first stage was completed and the recomaendations submitted on time to the Government, but they were not implemented because of disagreement on the proposed measures, changes in personnel and also the difficult country dialogue. Because training had to be adapted to tie zequirements of the new organization, this component was also postponed. On the planning and programing side, the consultants prepared ind submitted network development plans, which needed further discussion before becoming the basis of a possible Bank-supported investment project. The Project did not come to fruition. The Loan was closed with a cancellation of about 73Z of the proceeds. 4. Although the Project made a good start and had smooth progress up to the the review of detailed recommendations, it soon lost its focus on sector objectives, agreed during loan negotiations. Different factors may have contributed to the failure to achieve project objectives. First, the Bank had been somewhat optimistic in its estimate of the time required to achieve true sector reform. Second, in concentrating exclusively on sector operational, financial and management issues, the Project failed to address policy issues, such as resource mobilization, including fiscal and tariff policy to be applied to the sector, general procurement, personnel and human resources development policies, which although may appear perpineral  - vii - to the sector's technicalities, are nevertheless very important. Addressing these policy i;sues would have required thorough discussions and prior agreement with the Government before embarking in a large and expensive consultancy contract. More generally, it was probably too optimistic to expect the preparation and implementation of sector reforms within a single project. Indeed, the first phase of project implementation would have been more effective if carried out as part of preparation. Third, frequent Government reshuffles resulted in priority changes and in conflicting views as to the need and urgency of major sector reorganization. 5. The main lesson to be learned from this Project is that, before embarking in the reorganization of the sector planning, operations and finance, a consensus should be reached $n Government on all sector policy issues, and that the new sector orientation should be first clearly expressed in a 'Statement of Sector Policy" agreed between the Government and the Bank. Such an approach requires time to thoroughly d-.scuss and review these issues with all interested parties, outside the technical ministry, to make sure that all potential benefits and consequences of the various options available to improve the sector efficiency, are well understood by rhose to be involved in the decision process, and that all potential problems are well under control.  REPUBLIC OF CAMEROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073 - CM PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 Cameroon's public postal and domestic telecomunications services are provided by the Ministry of Post and Telecommunications (MPT). International telecommunications services are provided by a State-owned corporation, called International Telecommunications Corpo etion of Cameroon (INTELCAM). The Bank Loan 2073-CM was the first loan to the po)st and telecommunications sector in Cameroon. I I PROJECT PREPARATION AND APPRAISAL 2.01 In 1979, the Cameroonian Government, through MPT, declared its intention to . qrove the efficiency of its telecommunications operations as well as the quality of the services to the public, and invited the Bank and the International Telecommunications Union (ITU) 1/ to carry out a detailed diagnostic study of the sector and propose a plan of action. A joint Bank/ITU sector mission visited the country in December 1978 and reported in a Sector Memorandum (Report No. 2696-CM) the pressing need for basic institutional sector reform, improved staff training and comprehensive rehabilitation of the existing telecommunications facilities. The Government accepted the recommendations of the joint mission and requested assistance from the Bank on the one hand for funding institutional reform and a training component, and, on the other hand, for the implementation of the network rehabilitation component, under UNDP/Government financing 2/. ITU was to implement both components. The resulting Bank-financed project was prepared by missions that visit-ed Cameroon in July 1979 and May 1980, and was appraised in February 1981. Negotiations took place in Washington from August 24-28, 1981. The Board approved the $7.5 million loan to the United Republic of Cameroon on December 17, 1981, and the Loan Agreement was signed on March 19, 1982. 1/ ITU - International Telecommunication Union, a United Nations Organization, located in Geneva, Switzerland. 2/ UNDP - United Nations Development Programme.  -2- Proiect Obiectives 2.02 The objectives of the Project were to prepare and implement sector reforms, including the creation or an autonomous, commercially- oriented operating entity in order to improve the operation and quality of post and telecommunications services and to plan and prepare their long-term development. The Proiect 2.03 With the support of consultants, the Project was tos (a) (i) assess the existing organization of the P and T services and design a new legally and financially autonomous public entity ('the Entity") for the operation of the post and telecommunications services on a commercial basis; and (ii) establish, staff, and operate the Entity during the initial phase, including on-the-job staff training in management, accounting and administration; b) prepare an investment program for the Entity, comprising a demand study, financial projections, identification and preparation of particular investment projects, and preparation of bidding documents; and Cc) upgrade the facilities at the Yaounde Post and Telecommunications School, train instructors, and award fellowships for studies abroad. Covenants 2.04 The Loan Agreement provided the following particular covenants: (a) the Entity was to assume responsibility for project implementation and was to sign with the Government a subsidiary loan agreement on the original loan agreement terms. Until then, MPT was to implement the Project on behalf of the Government; (b) the Government was to nominate an inter-ministerial Project Steering Comuittee, whose members were to be senior officials. It was to oversee all project activities and be maintained until the Entity had been established (the nomination of the Committee was a condition of loan agreement effec iveness);  - 3 - (c) the Government was to hire consultarts, acceptable to the Bank for the tasks (a) and (b) of para 2.03. For the task (c), it was to engage the ITU and the Universal Postal Union (UPU)i (d) the Government was not to amend the terms of reference or the conditions of employment of the consultants without prior Bank agreement, and was from time to time to exchange views with the Bank on the evaluation and implementation of the recommendations and other conclusions from the consultants and organizations involved in the Project; (e) the Government was to appoint qualified executives as General Manager and Finance Manager. These appointments were to take effect upon establishing the Entity; (f) the Government was to assign a qualified national as counterpart to each consultant. The counterpart was to gradually take over the job of the consultant with whom he had been assigned to work; (g) the Government was to prepare and furnish to the Bank a Project Completion Report within six months after the Closing Date of the Loan; and Ch) the Government was to cause the Entity to have an appropriate accounting system with separate accounts for each of its principal branches of operations. The accounts were to be audited by independent auditors, and a copy of the audit report was to be sent to the Bank not later than six months after the end of the fiscal year. Details of compliance are given in Annex 1. In general, the Borrower complied with the covenants which were related to the start-up of the project and to the implementation of part (a) ti), but not with those related to the creation of the Entity. III. PROJECT IMPLEMENTATION Loan Effectiveness and Proiect Start-Up 3.01 The Loan became effective on July 2, 1982, about a month later than the date envisaged in the agreement. The consultants had started their assignment about six months earlier; their contract was pre-financed by the Borrower.  -4- Prolect Revision 3.02 The Loan Agreement was not amended. Implementation Schedule 3.03 The Project started on time with full Government support. Consultant TORs were prepared and approved at an early stage of project preparation and the consultants, who were selected and appointed before negotiations, began their assignment in December 1981, prior to loan effectiveness. The Project Director and the Steering Committee were also appointed on schedule. The consultants submitted their report with recommendations also on schedule by October 1982 (the preparation of an opening balance sheet, which they had not originally included--see para 3.09--took a few months extra, but this did not influence the overall situation). The Steering Committee reviewed the consultants' report and although it recommended implementation of the reforms as proposed, the Government never made a decision to proceed. This precluded the start-up of the implementation phase of the Project (Part A (ii)], as well as the training component (Part C) (para 2.03 (c)]. The consultant's work on the balance sheet was the last activity under the Project. Reporting 3.04 No explicit requirement for periodic progress reports was established. However, the Bank receivea the consultants' report, conclusions and recommendations as well as the Steering Committee report and recommendations to the Government. A Project Completion Report was covenanted [para 2.04 (g)], but has never been issued, in spite of repeated requests. Procurement 3.05 The consultants were selected and hired in accordance with the Bank's guidelines. No goods were procured under the Project. Disbursements 3.06 The estimated and actual cumulative disbursements of the Loan are as follows: Table 3.1: Cumulative Disbursements Appraisal Bank Estimates Actuals Actuals as Z Fiscal Year ($ million) (S million) Appraisal Estimates 1982 2.00 0.00 0 1983 4.17 1.91 46 1984 5.99 2.01 34 1985 6.91 2.01 29 1986 7.50 2.01 27  - 5- The original Closing Date, which was December 31, 1985, was not extended, but the loan *ccounts remained open until February 13, 1986, when the undisbursed amount of USS 5,487,528 was cancelled. Loan Allocation 3.07 The original and final allocations of loan proceeds ares Table 3.2s Loan Allocation Category Original Final 1. Consultants' services 4,730 2,012 2. Equipment and vehicles 880 0 S. Fellowships for training abroad SOO 0 4. Unallocated 1,590 0 - Cancelled - 5,488 Total 7,500 7,500 Operations 3.08 Studies were carried out by consultants in collaboration with Cameroonian counterparts. The Steering Committee reviewed the consultants' report and recomvended the creation of the Entity to the Government along the lines proposed. Since the Project was not implemented, there is no further information available. Performance of Consultants and Borrower 3.09 In general, the consultants performed in accordance with their temss of reference and respected agreed timetables. However, although the individual consultants had the professional expertise required to fulfill their task, as a group, they failed to pass the message correctly to their counterparts and particularly to present solutions in a practical way acceptable in the Cameroonian contest. Even after a number of discussions on the subject, the consultants' report failed to convince the authorities to proceed with reforms as ttie ramifications of implementation seemed too complex and may have resulted in unacceptable political repercussions. A contract interpretation problem occurred: the consultants maintained that they had not foreseen the preparation of an opening balance sheet for the Entity as part of their assignment. The matter was discussed at a meeting in Washington in December 1982, following which, the consultants completed their assignment with Cameroonian staff, for an additional cost of three manmonths. 3.10 The Borrower's performance was excellent during project preparation and remained satisfactory during the first phase of the Project. Cameroonian counterparts were assigned as required and worked closely with the consultants. The Steering Committee also performed its task. However, the reluctance of Government officials in charge of the sector to address the major reform issues and discuss them with the Bank  -6- before loan closing precluded further project implementation. At that time, the overall country dialogue with Cameroon was difficult at best and the Government was conservative in not wishing to implement change which risked upsetting the delicate political balance. IV. OPERATING PERFORMANCE 4.01 Because of the character of this Project, no indicators of operating performance were discussed and agreed upon during project preparation, and because the Project never attained its objectives, no data were made available on the actual status of the overall P and T operating performance during the project period. However, the rehabilitation and maintenance of the telecommunications equipment and plant carried out as a joint project activity with ITU assistance under UNDP/Government financing during the period 1979-82 (para.2.01), produced substantial improvements in the reliability and quality of the telephone and telex services in Cameroon and clearly demonstrated that skilled Cameroonian engineers and technicians can be motivated to perform their duties satisfactorily when they are given the tools, the spares, appropriate on the job training and a sound working environment (see Supervision Report dated July 8, 1983). Despite the recommendations of the Cameroonian Project Director that it continue, the network rehabilitation unit was dissolved toward the end of 1982. V. FINANCIAL PERFORMANCE 5.01 For the same reasons as for the operating performance, (Chapter IV) no data were made available on the status of the financial performance of the P and T administration. According to information in the files, the financial situation of both the postal and the telecommunications services remained very weak. One of the major purposes of the proposed sector reform was the establishment of a commercially- oriented, financially-autonomous Entity with management accountable for financial performance. This objective was not met. VI. INSTITUTIONAL PERFORMANCE 6.01 Administration of the Cameroonian P and T services was neither efficient enough to provide reliable and satisfactory postal and telecommunications services nor to operate and maintain the equipment and plant. It was, therefore, unable to plan and implement any significant development program (see Sector Memorandum, Report No. 2696-CM, and various comnunications from the Government available in the files). The proposed sector reform was aimed at correcting these major deficiencies to improve the overall institutional performance but unfortunately, they were not carried out.  - 7 - VII. BANK PERFORMANCE Overall Contri stion 7.01 By its involvement in sector analysis, its participation in project preparation, and its financing of the studies carried out under the Project, the Bank contributed to a better understanding of the actual situation of the sector in Cameroon. The studies emphasized the sector's potential for substantial improvement in quality and reliability of service. The studies also emphasized the sector's potential profitability, as well as its potential for sustained development outside the Government budget, when the services and infrastructure are provided, operated and developed by a commercially-oriented, autonomous entity. Supervision 7.02 Three supervision missions visited the country during the first 24 month period of project implementation (starting in December 1981, when the consultants began their assignment in the field). The first mission came to Cameroon in May 1982, two months after Loan signature (para. 2.01). This was the only mission during the period of the consultants' actual work with information gathering and analysis and with drafting of recommendations. A second mission was sent out in November 1982, before the Steering Committee had completed its review of the consultants' report and issued its recommendations to the Government. The third mission visited Cameroon in May 1983 to discuss a plan of action for implementation. However, the Bank's dialogue with Government was difficult and it became evident that the new Government and the newly-appointed sector authorities had other priorities and were not ready to pursue the original project objectives. Two more missions were proposed by the Bank, for November 1983 and April 1984, but not agreed to by the Government. Working Relationship 7.03 The working relationship and cooperation between the Bank and the Government was excellent during project preparation and during the initial phase. The third supervision mission, however, was unable to have a constructive dialogue (para. 7.02), because, on the one hand, the mission insisted on pursuing project implementation as originally designed and, on the other hand, the Government was reluctant to address major sector issues. There were several changes in key governmental officials during the project period. The Cameroonian Project Director was elected to an international position and left the country shortly after the consultants had submitted their recommendations. Other officials, who were previously active in pursuing the project's objectives, were nominated to other Ministries, or to other responsibilities. The Minister in charge of MPT when the implementation phase was to be discussed with the Bank, let it be understood that the Government had other priorities and expressed a different opinion from his predecessor regarding the need and urgency for sector reforms. His official position was also in line with a declaration of the Presidency at the time that no new parastatals should be created. Following official Government statements opposing the project's major  objectives, all project supervision activities were suspended. Two further attempts to re-open the dialogue, in 1983 and 1984, were unsuccessful (para. 7.02). VIII. PROJECT JUSTIFICATION AND FAILURE TO ACHIEVE OBJECTIVES Prolect Justification 8.01 In 1979, when the Government first approached the Bank and ITU for assistance in improving the sector's efficiency, Cameroon was one of the few remaining countries in Sub-Sahara Africa where domestic teleconmunications services were still operated by a Department of the Government. Despite the large amount of resources invested in the domestic telecommunications network, the sector was unable to provide reliable and satisfactory service. The course of action agreed with the Government at the origin of the Project was fully justified, although in retrospect it was probably optimistic to expect preparation and implementation of a program of radical sectoral reforms in a single project. 8.02 Consultants under the Project provided the Government with detailed recommendations for the setting up of the Entity. Their report gives a detailed and balanced picture of the operational, financial, and managerial situation of the administration of the services in 1982, and the recommendations provide a fair basis for the establishment of an efficient commercially-oriented autonomous entity in line with initial project objectives. The consultant report also provides a services development plan, the objectives and composition of which responded reasonably to the country's need, although the proposed phasing of the investment program would have required further review and discussion with the Bank. These first results would have been worthwhile if the project objectives had been pursued. It is unfortunate that most of the efforts made and resources and time spent have been wasted. The Failure to Achieve Oblectives 8.03 Other factors have contributed to the failure to complete the Project. First, satisfied with the general statement of intent from the Prime Minister, the Bank prepared the project for addressing exclusively the sector's operational, financial and management issues without considering other factors, such as resource mobilization to be applied to the sector, including fiscal and tariff policies, general procurement policy, personnel and human resources development policies. These areas were the exclusive domain of other Ministries, some of them more powerful than the technical Ministry in charge of communications. In retrospect, failure to address or. time those issues peripheral to the sector's technicalities but nevertheless very important for the Government, and to direct the dialogue toward their resolution before embarking in a large and expensive consultancy contract, may have given arguments to those opposed to sector reform. Moreover, the Government was clearly not prepared to implement the major institutional changes required to make posts and telecommunications operations autonomous. Second, frequent governmental  - 9 - reshuffles resulted in priority changpe and in conflicting views as to the need and urgency of a major reorgpnization of the P and T sector. 8.04 After refusing two earlier attempts by the Bank, in 1983 and 1984, to re-open the dialogue (para 7.02), the Governmunt indlcated in 1985 its desire to proceed with project implementation and to continue working with the Bank. However, the Government's proposal for an *xtiemely modest reform, which consisted of endowing MPT with a so-called budget anneze, was too remote from the original project objectives. The Bank was unwilling to extend the Project on that basis and the Loan was thus closed and the unused balance cancelled. IX. CONCLUSIONS 9.01 The main lesson to be learned from this Project is that, before embarking in the reorganization of the sector planning, operations and finance, a consensus should be reached in Government on all sector policy issues. Furthermore, it would have been preferable if the legal framework of the Entity had been decided before Board Presentation and that the new sector orientation had been first clearly expressed in a "Statement of Sector Policy agreed between the Government and the Bank. Such an approach requires tile to thoroughly discuss and review these issues with all interested parties, outside the technical ministry, to make sure that all potential benefits and consequences of the various options available to improve the sector efficiency, are well understood by those to be involved in the decision process, and that all potential problems are well under control.  - 10 - ANNEX 1 Page 1 of 2 CAM'iROON POST AND TELECOMMUNICATIONS TECHNICAL ASSISTANCE PROJECT LOAN 2073-CM PROJECT COMPLETION REPORT Compliance with Covenants Agreement Covenant Status Section 3.01 (a) Ministry of P and T to carry out project Complied until the Entity is established. 3.01 (b) Borrower to appoint and maintain a Steering Complied Committee. 3.01 (c),(d) Borrower to enter into subsidiary loan agreement with the Entity and exercise its rights under that agreement. 3.02 (a) Employment of consultants satisfactory to Complied the Bank for parts A and B of project. (b) Employment of ITU and UPU for part C of project. 3.03 (a),(b) Borrower to facilitate the work of the Complied consultants and organizations and not to in part change their terms of reference. 3.04 Borrower to exchange views with the Bank Not complied from time to time on the evaluation of reports and conclusions of the consultants and organizations. 3.05 Borrower to appoint qualified senior */ executives upon establishment of the Entity. 3.06 Borrower to assign qualified counterparts. Complied 3.07 Borrower to select suitable staff for */ fellowships under part C of project.  - 1 1 - ANNEX 1 Page 2 of 2 Agreement Covenant Status Section 3.09 (a) Borrower to furnish the Bank with reports, Complied contract documents, schedules, and other initially relevant project information. but not thereafter 3.09 (d) Borrower to prepare and furnish to Bank a Not complied Completion Report within six months of loan closing date. 4.02 Borrower to maintain project records. Complied 4.03 (a) Borrower to cause Entity to have an */ appropriate accounting system. 4.03 (b) Entity's accounts to be audited by external */ auditors acceptable to Bank, and copy of audit report be furnished to Bank within six months of end of fiscal year. 4.04 Until the Entity can take over, the Not complied Hinistry of P and T to continue to carry out rehabilitation work on telecommunications installations. 4.05 Borrower to cause the training facilities, */ covered by part C of project, to be operated appropriately and efficiently. Note: *T he Entity was not established and, thus, the covenants relating to it were not applicable. Among these is also the training, which should be adapted to the needs of the Entity.