Singapore - Telecommunication Project

RETURN TO REPORTS DESK WITHIN R E RESTRICTED Report No. TO-591c ONE WEEK This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE TELECOMMUNICATION PROJECT SINGAPORE TELEPHONE BOARD August 22, 1967 Projects Department  CURRENCY EQUIVALENTS US$1 = M$3. 061 M$l = US$0.327 M$1, 000, 000 = US$326,600 (Singapore and Malaysia created separate currency systems on June 12, 1967, and the new Singapore dollar is at par with the former Malayan dollar. ) WEIGHTS AND MEASURES 1 Kilometer (Km.) 0. 622 statute mile Fiscal Year - Calendar year  APPRAISAL OF THE TELECOMMUNICATION PROJECT SINGAPORE TELEPHO1NE BOARD Table of Contents Page No. SUMMARY i - ii 1. INTRODUCTION 1 2. SINGAPORE TELECOMMUNICATIONS 1 3. THE BORROWER 2 Organization and Management 2 4. EXISTING FACILITIES 3 5. DEMAND FOR TELEPHONE SERVICE 4 6. THE PROJECT 4 Cost of the Program 5 Procurement and Disbursement 6 7. FINANCIAL ASPECTS 7 Tariffs 7 Accounts and Audit 7 Present Financial Position 8 Past Earnings 9 Dividends 10 Financing Plan 10 Financial Prospects 11 8. CONCLUSIONS 12 This report is based on the findings of an appraisal mission consisting of Messrs. i.L.C. Grant and F.S. Elofson who visited Singapore in late November 1966, and additional information received from the Borrower in July 1967.  List of Annexes 1. Organization Chart. 2. Summary of Existing and Programmed Telephone Exchange Equipment Provision Singapore Network. 3. Outside Plant Works Program First Year (Page 1). Outside Plant Works Program Second Year (Page 2). 4. Summary of Telephone Tariffs. 5. Actual and Forecast Balance Sheets. 6. Actual and Forecast Income Statements. 7. Forecast Sources and Applications of Funds. MAP  APPRAISAL OF THE TELECOMMUNICATION PROJECT SINGAPORE TELEPHiONE BOARD SUMMARY i. This report covers the appraisal of a telecommunication project which is the two year construction program of the Singapore Telephone Board (STB) due to be completed towards the end of 1969. The program includes the expansion and improvement of the telephone services of the island of Singapore. The total cost of the program is estimated to be US$9.5 million with foreign exchange costs of US$6.2 million. ii. The proposed Bana loan of US$3.0 million would cover those items in the program which can be procured under internationai bidding procedures satisfactory to the Bank. The balance of the funds required for the Pro- gram would be met from STB's own resources, iii. The borrower would be the Singapore Telephone Board,a fully Governmment owned corporation. The loan would be guaranteed by the Government of Singapore. iv. The construction program proposed for Bank financing is technically sound, th,e estimated cost is reasonable and STB is capable of carrying out the work. The principal items are: (a) the instaLlation of 36,000 lines of new automatic telephone exchange equipment; (b) the extension of the outside telephone plant including underground cables, distribution wires and telephones to connect new subscribers; (c) the installation of an automatic trunk exchange to handle toll traffic between Singapore and MIalaysia; (d) the construction of new buildings and building extensions. v. The program is well justified by the high demand for telephones on the island and would meet this demand by the most economical means. vi. All materials and equipment to be financed under the proposed Bank loan would be purchased through international competition and in accordance with plans and specifications prepared by competent engineering personnel. vii. STB is well managed and operated.  viii. The financial position of STB is sound and financial forecasts show a satisfactory position in the future. It is estimated that during the years 1967-69 earnings will contribute about three quarters of the total capital requirements of STB during this period. ix. The program forms a suitable basis for a proposed Bank loan of US$3.0 million for a term of twenty years including a grace period of three years.  APPRAISAL OF THE TELECOMMUNICATION PROJECT SINGAPORE TELEPHONE BOARD 1. INTRODUCTION 1.01 The Singapore Telephone Board (STB) originally asked the Bank for a loan to cover part of the foreign exchange needed to carry out a five-year program for the expansion of its telephone facilities. Before appraisal STB had worked out expansion plans only for two years in sufficient detail to serve as a basis for Bank financing. This twio-year program, however, is technically sound and justified to meet the most essential needs for improved telephone service in Singapore. Disbursement of the proposed Bank loan is expected to commence during the second part of 1967 and continue to the end of 1969. 1.02 The total cost of the two-year construction program which will be completed toward the end of 1969 is estimated at US$9.5 million of which US$3.0 million would be met by the proposed Bank loan representing about half of the foreign exchange requirement. The balance of the funds required would be met from STB's own resources. 1.03 The borrower would be the Singapore Telephone Board which was established by the Government in 1953 for the purpose of taking over the telephone system of the island of Singapore from the Oriental Telephone and Electric Company Limited (OTE). The stock of STB is completely owned by the Government of Singapore which would be the guarantor of the loan. 1.04 This report is based on the findings of Messrs. R.L.C. Grant and F.S. Elofson who visited Singapore during late November 1966 for an appraisal of the program and operations of STB and additional information received from the Borrower in July 1967. 2. SINGAPORE TELECOMMUNICATIONS 2.01 The telephone operaticns were started in Singapore in 1882 by the Oriental Telephone and Electric Company Limited (OTE), the predecessor of STB. In 1955 the assets and liabilities of OTE were taken over by STB which assumed the responsibility for providing telephone services. The Board is a fully Government owned corporation. The statutes are incorporated in the Telephone Ordinance of 1953. 2.02 In addition to the Board two Government departments operate telecommunication facilities in Singapore. One, Telecommunications (internal), is responsible for internal telegraph and telex services operated principally over circuits leased from STB. In addition this department operates services for civil aviation and shipping and the terminal station of the microwave link with Malaysia. The other department, Telecommunications (external), is  - 2 - responsible for international services including the operations of the high frequency radio station, the terminaL of the submarine telephone cable providing connections to Hong Kong, Australia and the United Kingdom as well as the overseas exchange facilities. There is good coop- eration between STB and the Government telecommunications departments. 3. THE BORROWER Organization and Management 3.01 The Board consists of seven members, including a Chairman and a Deputy Chairman. They are appointed by the Deputy Prime Minister, usually for a term of two years which can be renewed. The present members hold responsible positions in Government and private organizations. The Board meets regularly once a month and is responsible for establishing the policies governing the operation of STB, 3.02 The chief executive of STB is the General Manager who is responsible for the day to day operation. He is assisted by three chief engineers, each head of a technical department, and the chief accountant. During the period since the establishment of STB in 1955 local personnel have gradually replaced expatriates in the senior management positions. The present General Manager assumed his duties in 1966. He and the other senior officials are well qualified and trained and have gained the neces- sary experience to manage effectively the affairs of STB. An undertaking has been obtained that the Bank will be consulted prior to any changes in the appointment to these positions. (An organization chart is shown in Annex 1.) 3.03 At the end of 1966 STB had a total staff of 1,300. During the past five years the total increase has been limited to 12% while plant capacity has increased by 85% indicating a substantial improvement in efficiency and personnel utilization. 3.04 STB has an able staff of technicians and skilled workers capable of carrying out all current installation work without outside assistance. The training of this staff is carried out through an apprentice program which has worked very successfully. The difficulty of using four different languages is being overcome. 3.05 Many of the senior technicians have received training with the British and Australian teLecommunication administrations and this arrange- ment will continue in the future. In addition arrangements are being made to permit STB to send a limited number of engineers and technicians to the training center in Kuala Lumpur which has recently been established with the assistance of the International Telecommunication Union.  14. EXISTING FACILITIES 4.01 At the present time, STB operates a fully automatic telephone system serving the Singapore Islard. At the end of 1966 it had a capacity of 77,000 lines consisting of mostly step-by-step equipment of British manu- facture and uses a mixed numbering system of 5 and 6 digits. Based on international tenders invited originally in 1963 STB decided to adopt cross- bar equipment for ttwure extensions of large capacity and an order was placed with L.M. Ericsson of Sweden in 1965. This equipment was installed in the new exchanges at Bukit Timah and Jurong and is now in service. Annex 2 gives details of the quantity and type of existing automatic exchange equipment serving the Island of Singapore as well as proposed extensions. 4.02 Apart from the new crossbar exchanges the remaining equipment is overloaded due to high plant utilization and heavy traffic. Maintenance of the automatic switching equipment is reasonably good and the incidence of faults is quite low. Complaints received regarding the service are caused principally by the overloading problem. 4.03 Private automatic branch exchanges are installed both by private enterprise and by the Board but are all maintained by the Board. Telephone instruments have been obtained on the basis of competitive tender from the five main manufacturers in the United Kingdom. 4.04 Existing outside telephone plant consisting of cable, open wire and subscribers' telephone installations is maintained in good condition and design and installation procedures appropriate for the heavy rainfall con- ditions have been developed by the staff. Wooden poles are subject to severe termite attack in Singapore and for this reason steel poles are used. All the construction work carried out by STB is done using its own outside plant staff with the exception of laying underground pipes and the pulling in of cables which are done by local contractors. 4.05 Although local telephone service in Singapore is on a flat rate basis, multimetering has been introduced into most of the telephone network where this is technically possible and meter registrations are recorded by the subscriber's individual meter for long distance calls to centers in Malaysia. About 80% of these toll calls are dialed direct by Singapore subscribers. The balance of toll traffic and other miscellaneous services are handled at a 35-position operators' trunk type switchboard. Overseas calls are handled by Telecommunications (external) through their inter- national switchboard.  - 4 - 5. DEMAND FOR TELEaPION SERVICE 5.01 The island of Singapore covers a small area of 225 square miles and carries a population of 1.9 million. A good telephone system is important for the efficiency of the commerce and administration of this relatively well developed although diverse community. The present diffi- culty in obtaining good telephone service is one of the important problems facing the country and the situation will be aggravated unless present plans are carried out to enable STB to meet the increasing demand for telephone service. 5.02 Compared to most countries in the Far East, Singapore has a relatively high telephone density. Figures relating to the densities in Singapore and some other countries are shown below: Singapore 4060 telephones per 100 persons Hong Kong 6.84 "' i " Malaysia 1.38 I t it Thailand .25 " " " Japan 18. " " * Philippine Republic .50 " " " The equipment capacity when STB took over from OTE in 1955 was 24,000 lines and since then the capacity has tripled. Durirg the past five years the average growth in telephone subscribers has been 8% per annum. STB estimates a continuing annual growth rate of 8% for the next five years. This is reasonable, but the rate may well be exceeded. 5.03 Waiting telephone subscribers at the end of 1966 totaled 1,300. This is a large number taking into account the size of the existing system. They are mostly located in areas of rapid land-development and building construction where it has not been feasible for STB to expand its facilities sufficiently to meet the heavy demand. These potential subscribers there- fore are mainly held up pending the necessary expansion of outside plant. 6. THE PROJECT 6.01 The two-year construction program which constitutes the Project has been designed both to reduce the present waiting list and to meet an estimated growth rate of 8% per annum in exchange lines. The program includes the expansion of existing automatic telephone exchanges by 36,000 lines from a capacity of 86,000 lines to a total of 122,0CO lines. (For details see Annex 2.) Building additions and alterations will be required at the North and Queenstown exchanges to provide increased floor space but at the other exchanges the present buildings are adequate. A new exchange, named Orchard, is being planned to relieve Central exchange and construction of the building to accommodate the equipment will be commenced in 1968 but the equipment installation will not be carried out in the present program under consideration.  6.02 STB plans to continue to use crossbar equipment wherever possible for the main expansion of its switching system particularly where new exchanges are involved. To avoid interworking problemns step- by-step equipment will be used for the extension of existing step-by-step automatic exchanges. This policy is sound. 6.03 Automatic exchange equipment installation for both crossbar and step-by-step equipment will be carried out by STB technicians working under a supervisor supplied by the manufacturer and the capacity of the Board's staff to undertake the program on this basis has already been tested and is adequate. 6.o0 The expansion of outside plant consisting of underground pipes and cables and distribution wires to telephorne subscribers' premises has been planned in detail as shown in Annex 3. Cost estimates for the works involved are based on the experience of recent years and are realistic. 6.05 During the second year of the program STh proposes to install a 500 line automatic trunk exchange to translate the impulsing and signalling elements originating in the step-by-step and crossbar exchanges of the switching systems in Singapore and also Malaysia. This exchange is neces- sary to improve transmission as well as to coordinate the signalling systems ,of both countries. Cost of the Program 6.06 The estimated cost of the construction program is as follows:  - 6 - Foreign Exchange Cost Class of Plant Materi-al-s an ipent (C.I.F.) Local Cost Total Cost 9R_D Other (in thousands of Malayan Dollars) Telephone Exchange Equipment 3,140 5,240 423 8,803 Installation of Trunk Exchange 500 - 17 517 Outside Plant 3,900 4,380 2,730 11,010 Subscribers' Apparatus 1,110 - 650 1,760 Air Conditioning Exchanges 350 350 Tools and Trans- port - 420 420 Land, Buildings and Fittings - 2,740 2,740 Overhead - - 2,961 2,961 Total 9,000 9,620 9,941 28,561 US$ Equivalent in Millions (3.0) (3.2) (3.3) (9.5) 6.07 Engineering estimates are based on up-to-date costing data and contingencies amounting to about 5%, which is normals have been provided in individual estimates. In addition flexibility in the program is achieved by provisions under the above headings amounting to M$2.0 million for small unforeseen construction works. Procurement and Disbursement 6.o8 STB in general follows the policy of procuring equipment and materials required for the expansion of its system on the basis of inter- national competitive tenders. For the procram now planned there are three exceptions to this policy, but these orders are not to be financed by the proposed Bank loan. 6.09- The first exception relates to the procurement of step-by-step equipment for extensions of existing exchanges. In this case there are sound engineering reasons for standardization and the equipment will, therefore, be purchased through negotiated contracts. The second excep- tion relates to the initial purchase of 16,000 lines of crossbar exchange equipment which is urgently required. In this case STB intends to make use of the option included in its earlier contract with L. M. Ericsson and place the contract directly with this supplier. The third exception relates to purchases of distribution cables. In this case STB has an existing contract with a British supplier and a nine-month notice is required to exercise the right to discontinue this contract. For the remaining part of the program cables would be purchased on the basis of international tender and would be financed under the proposed loan. The total amount of foreign exchange excluded from the loan under the above exceptions is of the order of US$3.2 million.  6.1o During negotiations the Bankts requirement of international tendering for subsequent cable purchases and for the additional purchase of crossbar equipment was confirmed with the Borrower. 6 UI The Government has preliminary negotiations underway for establish- ing-a factory to assemble telephone instruments and small telephone exchanges. In addition, certain types of small capacity polythene distribution cables are already being produced in Singapore. In view of the-importance of indus- trial production to Singapore, the Bank agreed that local manufacturers shoald be allowed to participate in international tendering for the above items and that the foreign exchange content of locally manufactured goods would be eligible for Bank financing. Arxy degree of protection for local manufacture will be subject to agreement between the Board and the Bank before tenders are invited and will be applied in evaluating the bids. The total amount in- volved in local manufacture is estimated to be less than US$200,000. 6.12 Disbursements of the proposed loan would be made against the actual cost of equipment and services. In the unlikely event of there being any savings over estimated costs, the Bank would have the right to cancel the unused balance of the loan. 7. FINANCIAL ASPECTS Tariffs 7.01 Under the Ordinance of 1953, the STB has autonomy in setting its tariffs for island-wide service.' Tariffs for service to points in Malaysia are set by the Director, Telecommunications, Malaysia, and tariffs for other international points are the responsibility of the Singapore Telecommunications (external) department. 7.02 Charges for island-wide service are on a flat rate rental basis. A summary of the present tariffs of STB is shown in Annex h. Meters are used only for calls into M4alaysia. The revenues for this service are remitted to the Malaysian Telecommunications after deducting the estimated costs of handling the traffic, including depreciation on the plant dedicated to this service. 7.03 The Singapore Telecommunications (external) department bills the subscribers directly for all international calls to points other than Malaysia. STB performs no service on these calls and therefore receives no commission. 7.04 The present level of tariffs has enabled STB in recent years to maintain satisfactory earnings and achieve a rate of return on average net fixed assets in operation of more than 14%. This high return was due to the high degree of utilization of telephone plant. The return in 1966 was 12.5% and the financial forecasts prepared for this report indicate that during the period 1967 through 1969 the rate of return would be about 12% which is satisfactory.  - 8 - 7.05 In order to assure that STB would maintain satisfactory earnings, agreement has been reached during negotiations that tariffs would be maintained at a level sufficient to produce a rate of return on net fixed assets in operation of not less than 10%. Accounts and Audit 7.06 The accounting staff of STB is well qualified and an adequate accounting system based on commercial concepts is in use. A data proces- sing system has been installed and the accounting system is being gradual- ly mechanized. 7.07 In past years the accounts of STB have been audited by the Director of Audit, Singapore. In order to expedite future auditing work it was agreed during negotiations that STB will appoint indeoendent out- side auditors satisfactory to the Bank. A similar understanding had previously been reached in connection with Bank lending to the Singapore Public Utilities Board. Present Financial Position 7.08 Balance sheets for the years 1961 through 1966 are shown in Annex 5. A summary of the December 31, 1966 balance sheet is shown below (in thousands of Malayan dollars): ASSETS Telephone plant in service 91,325 Less: Depreciation reserve 33,075 Net telephone plant 5O ,250 Investments 1,529 Current Assets 6,850 Total Assets 66,629 LIABILITIES Equity: ordinary stock 20,000 Reserves 35,069 Total equity 55069 Long-term debt: Singapore Government loan 4,835 Bank overdraft 2,105 Current Liabilities 4,620 Total Liabilities 66,629  9 - 7.09 Although STB took over the assets of the Oriental Telephone and Electric Company Limited in 1955, the amount payable by the Govern- ment to OTE was not agreed upon until 1962. The assets taken over, valued at M$12.6 million were then recorded in the accounts of STB. All plant additions made by STB since 1955 have been recorded at historical cost. Investment consists of 1M$500,000 in Government Securities and M$1,029,000 in a fund for employees housing loans. 7.10 From 1955 to 1962 no depreciation was charged against operations and the equity of the Government in STB was recorded as an Accumulated Fund. In 1962 part of this Fund, M$16.7 million, was transferred to a Depreciation Reserve and annual accruals for depreciation were started, computed on a straight-line basis which has averaged about 4.9% of fixed assets in operation. This is satisfactory. 7.11 on July 1, 1963, the Board issued M$20 million ordinary stock to the Government against Accumulated Fund and other reserves. The Government is the sole stockholder of STB. Under the provisions of the 1953 Ordinance, the Board may, with the apprcval of the Minister of Finance, issue shares or stock in such amounts and at such times as it deems prudent. No issues have been made since July 1, 1963. 7.12 To finance development, the Government agreed in 1956 to lend STB M$15 mil'lion at 5-1/4% interest repayable in equal semi-annual install- ments over a 20-year period. This loan is secured by a statutory mortgage on only land and buildings issued September 28, 1962. Substantial pre- payments have been made on this loan reducing the outstanding balance to about M$4.8 million at December 31, 1966. In the negative pledge clause of the proposed loan agreement this relatively small prior lien has been noted as an exception. 7.13 In the past years STB has used overdraft facilities to a vary- ing degree for the prefinancing of capital expenditure. By December 31, 1966, the outstanding balance reached N$2.1 million. Interest rate was 7% per annum on day-to-day balance. Past Earnings 7.14 The Board's financial earnings record is good. operating state- ments for the years 1961 through 1966 are shown in .tnnex 6. The returns in the years 1963-1965 were between 14% and 15; reflecting the intensive use of existing facilities; the operating ratios were about 52%. In 1966 the availability of new facilities and a change in the accounting concepts regarding the cost allocations of overhead expenses reduced the rate of return to a more normal level of 12.5%; the operating ratio in 1966 was 59%. These results are satisfactory.  - 10 - Dividends 7.15 In 1963 the Board started to pay dividends on its outstanding ordinary stock at the rate of 6%. This rate has been maintained in subsequent years. The Ordinance, as amended, specifies that the Board shall pay "isuch interest (dividends) on shares and stock issued by the Board as the state of the undertakings and the financial position of the Board appear, in the opinion of the Board, to warrant". Financing Plan 7.16 A forecast of sources and applications of funds for the five years 1967-1971 is shown in Annex 7. The financial requirements for the three years 1967 to 1969 during which the Bank Project would be executed, and the forecast financing sources to meet these requirements can be summarized as follows: Financial requirements: (in thousands of M$) Percent Construction expenditures: Bank Project 28,561 Other expenditures -9,774 Total Construction Expenditures 35,337 95.o Net increase in working capital 2,000 5.0 Total requirements 40,335 100.0 Would be met from: Internal cash generation 41,o96 Less: Debt service 6,234 Dividends 3,527 Net internal cash generation 31,335 77.7 Proposed IBRD loan 9,000 22.3 Total sources 40,335 100.0 7.17 The total financial requirements for the period of M.$40.3 millicn include a net increase in working capital of M$2.0 million which represents in essence the repayment of the overdraft and some adjust- ments in the current accounts. From its own resources after meeting debt service and dividend-payments STB would finance about 78% of the total financial needs while the remaining 22% would be covered by the proposed Bank loan.  - 11 - 7.18 The proposed Bank loan, of US$3.0 million is assumed to be for a term of 20 years, including a grace period of 3 years, and to carry a 6% interest rate. 7.19 In view of STB's favorable financial situation the Government had suggested that STB prepay the balance of the Government's 1956 M$15 million loan and increase its annual dividend payments in the near future. After a review of the financial prospects of STB it was however agreed during negotiations that certain limitations should be put on tnese requests in order to assure an orderly completion of the Project without jeopardizing STB's present satisfactory financial position. It was agreed that the balance of the Government loan should be repaid by 1968. Dividends declared in 1967 and 1968 will be limited to M$1.2 million or 15% of net earning wAhichever is less and for 1969 they will be limited to M$2.4 million or 30% of net earning whichever is less. Financial Prospects 7.20 A forecast of earnings for the 5-year period 1967-1971 is given in Annex 6. In preparing these forecasts STB used the following reason- able assumptions: (a) Operating revenues would increase at an annual rate of about 8%, corresponding to the expected growth in the number of telephone lines; (b) present tariff rates would be maintained; (c) maintenance, administration and other costs of operation would increase at an annual rate of about 5% resulting both from the substantial system growth planned and from expected wage and salary increases during the period; (d) cash dividends would continue to be paid at the present level of 6% taking into account the restrictions mentioned in paragraph 7.19; (e) share capital would be doubled in 1969 by a transfer from the general reserve, and in each of 197C and 1971 a $10 million bonus share issue would be made by transfer f-rom the reserves, cash dividends would increase correspondingly; (f) depreciation would be computed at an average annual composite rate of 4.9%. 7.21 The forecasts show that the operating ratio will remain in the order of 56%. The rate of return (see Annex 6) would average about 12%.  - 12 - 7.22 The interest and debt service coverages are more than adequate at present due to the small amount of outstanding long-term debt of STB. Under the debt limitation covenant in the proposed loan agreement STB would not incur any new debt unless service on all debt in any given year, including the debt to be incurred, will be covered not less than 2.0 times by internal cash generation during the twelve months preceding the date on which the new debt would be incurred, after adjusting internal cash generation to take account of any rate increase effective at the date of such incurrence. 7.23 Forecast balance sheets as of the end of 1967 through 1971 are shown in Annex 5. Net telecommunication plant would increase from M$58.3 million in 1965 to I$80.9 million in 1969 and Ml$95.1 million in 1971. The ratio of long-term debt to equity would range between 4/96 when Government loan is repaid and 11/89 after full disbursement of the proposed Bank loan. 7.24 It has been assumed that development will continue after completion of the project at about the same level. On the basis of the present forecast it would appear that STB will be able to finance its capital expenditure in these years from its own resources. 8. CONTCLUSIONS 8.01 The Project is technically sound and well designed to meet the immediate and the most essential expansion needs of STB. STB is well organized and its operations are efficient. 8.02 Estimates of costs are reasonable, procurement procedures and financing proposals are satisfactory. 8.03 STB's financial position is sound and is expected to remain so. The arrangements for financing the program are satisfactory and STB would be able to meet a substantial proportion of the cost out of earn- ings. 8.oh The Project is suitable for a Bank loan of US$3.0 million with a term of twenty years including a grace period of three years. During negotiations assurances were received that: (a) STB will maintain its tariffs at a level sufficient to produce a rate of return on average net fixed assets in operation of not less than 10% (paragraph 7.05); (b) the level of dividend payments to Government during 1967-1969 and the prepayment of the Government loan would be subject to specific restrictions (paragraph 7.19). (c) the incurrence of future long-term debt by STB will be subject to the provisions of a debt limitation covenant (paragraph 7.22). August 22, 1967  SINGAPORE TELEPHONE BOARD ORGANIZATION CHART | GENERAL MANAGER l SECRETARY PERSONNEL CHIEF CHIEF ENGINEER* CHIEF ENGINEER CHIEF ENGINEER* OFFICER l | ACCOUNTANT EOUIPMENT DEVELOPMENT LIES STORES AND INSTALLATION WORK SHOPS DEVELOPMENT MANAGER PURCHASING ENGINEER EXCHANGE SUBSCRIBERS AND CONTRACTS UNDERGROUN OVERHEAD MAINTENANCE PABX MAINTENANCE CNRCSUDRRUDOEHA EXCHANGE EXCHANGE ACCOMMODATION PLANNING CONSTRUCTION AND SERVICES z * One of these officers octs as Deputy Generol Manager z xm IBRO - 33T5  ANNEX 2 SDEGAPOUE TEIMPHONE BOARD Summary of Existing and Programmed Telephone Exchange Equipment Provision, S inapore Network Name of Existing Type Capacity Proposed Additions Exchange of EgqipEient (1967) Step-by-step Crossbar Bukit Panjang Strowger - Step-by-step 1,000 lines 1,000 lines - B.P.O. 4000 Type Bukit Timah L.M. Ericsson ARF 102 6,000 " Crossbar MFC Signalling Central Strowger - Step-by-step 17,640 " 1,000 " 4,300 B.P.O. 2000 & 4000 Type (DSR) lines* Changi Strowger - Step-by-step 1,000 " 1,000 " B.P.O. 4000 Type (DSR) City Strowger - Step-by-step 18,000 " 2,000 4 4,000 B.P.O. 4000 Type Jurong L,M. Ericsson ARF 102 2,000 "- Crossbar MEC Signalling Nee Soon Strowger - Step-by-step 1,000 " 1,000 " B.P.O. Pre-2000 Type-and 2000 Type North Strowger - Step-by-step 7,410 " 2,000 " 4,000 B.P.O. 4000 Type Paya Lebar Strowger - Step-by-step 10,910 " - 4,000 B.P.O. 4000 Type Queenstown Strowger - Step-by-step 8,000 " 2,000 " 4,000 B.P.O. 4000 Type Tanjong Katong Strowger - Step-by-step 13,000 " 2,000 " 4,000 B.P.O. Pre-2000 Type (DSR) and 4000 Type _ TOTAL 85,960 12,000 2L,300 lines lines lin5s* * Includes 300 lines of trunk equipment.  ANNEX IM (Page 1) SINGAPORE TELEPHONE BOARD OUTSIDE PLANT WORKS PROGRAM, FIRST YEAR SCHEME MONTHS * STILL RD./UPPER CHANGI 2 * UPPER SERANGOON "PM" 2 2 *P. LEBAR-KATONG JUNC. NO. I 3 3 3 * BALESTIER/TOWNER 3 * MOULMEIN RD. EXTENSION 2 2 * CITY/ANSON RD 2 * LENG KEE/TIONG BAHRU 2 2 * NEW WEST COAST RD. 2 2 2 *TAMAN JURONG 2 2 3 3 3 * THOMSON RD. NORTH - 3 CEN-KTG. JUNCTION NO. 4 D 4 4 4 4 4 4 2 2 TANGLIN G.H.Q. D HOLLAND RD. D 2 2 2 2 2 2 2 2 LIM CHU KANG D -2- 3 3 3 CEN-CITY JUNCTION NO. 6 D _ 3 - COLEMAN ST. TRANSFER D - 2 - COMMONWEALTH AVENUE D - - - - - 2 4 4 4 4 4 CEN-OT NO 3 D 4 4 4 4 2 2 2 2 2 SERANGOON/UPPER ALJUNIED D 2 2 2 * LOAD EXTG. 10 LB. JUNCTIONS - - - . ~ ~ ~~~~~~~~~~2 2 2 "PA" REDISTRIBUTION 2 -2 2 2 WOODLANDS VILLAGE 2 2 TAMPINES RD.RD_ DUNEARN RD. 2 2 2 2 2 2 STIRLING ROAD D 3 3 3 3 NEW BRIDGE ROAD D - 4 4 4_ NORTH - PYA JUNC. NO.1 - - 2 2 2 BRADDELL RD./LOR. CHUAN 2 2_ LAVENDER ST. TRANSFER 3 3_ TAO PAYOH CENTRAL M.D.F IE ESTATES a MINOR WORKS 8 8 8 10 10 8 II I 10 12 I 13 TOTAL NO. OF GANGS 30 30 30 30 30 30 30 30 30 30 30 30 (INCL. MAINTENANCE) 30_____ _ *1966 SCHEME CARRY-OVER. D-EXPECTED CABLE DELIVERY DATE (2R)I1RD-3376  ANNEX DII (Page 2) SINGAPORE TELEPHONE BOARD OUTSIDE PLANT WORKS PROGRAM, SECOND YEAR SCHEME MONTHS PAYA LEBAR-NORTH JUNCTION 3 3 NO. I *NEW BRIDGE ROAD 3 3 * LAVENDER ST. TRANSFER * TOA PAYOH NEW TOWN 3 3 3 3 B.TIMAH-NORTHWARDS 3 - - - TANGLIN RD. 00 CABLE 3 3 3 3 B TIMAH-NORTH JUNCTION 4 4 4 4 4 NO. 2 PAYA LEBAR SOUTH 3 3 .3. 3 BEDOK/U. EAST COAST 4 4 4 4 JURONG WEST 3 3 3.3 YIO CHU KANG 3 3 3 BATTERY RD./COLLYER 3 3 3 QUAY JALAN KAYU RELIEF SCHEME 2 2 2 CHANGI NORTH 2 2 ORCHARD M.D.F AND CABLE 2 2 2 2 2 TRANSFER 2 2 2 CHANGI SOUTH RELIEF - - - QUEENSTOWN -NORTH 4 4 4 4 4 JUNCTION NO. I BUKIT PANJANG SOUTH 2 2 UPPER PONGGOL RD. 2 2 2 DISTRIBUTION CHANGI/GEYLANG SERAI NEE SOON NORTHWARDS M.D.F RE-TERMINATION (CEN. i AND FOLLOWED BY CITY EXCH.) ESTATES a MINOR WORKS 15 12 12 12 9 9 12 10 12 l 13 17 (INCL. MAINTENANCE) TOTAL NO. OF GANGS 30 30 30 30 30 30 30 30 30 30 30 30 * 1967 SCHEME CARRY-OVER. (2R) IBRD-3377  ANIWEX h SInGAPORE TELEPHONE BOARD SUMMARY OF TELEPHONE TARIFFS Annual Installation Class of Service Rental Fees Business line M$ 250.00 M$ 50.00 * Residential line 180.00 50.00 * Internal extension 52.50 20.00 External extension 52.50 50.00 * P.A.B.X. internal extension 82.50 20.00 P.A.B.X. external extension 82e50 5000 * Colored telephone 12.00 35.00 Private wire - first 2 miles airline distance 240o00 50.00 Each additional 1/4 mile or fraction 12.50 _ * An excess installation charge will be applicable when long overhead lines are required. The first year's rental and the installation fee must be paid in advance of the installation. Thereafter, rental for business and residential lines and private wires are paid quarterly in advance. Extensions and colored telephone rentals are always paid yearly in advance. PAIVATE AUTOTATIC RANCH EXCHANGE (P.A.B.X.) Installation fees: Contractors' charge + 20% + 10% + any STB costs. Annual Rental fees - Non-Government Subscribers: Nil. - P.A.B,X. is purchased by subscriber. Annual Rental fees - Government Departments: Capacity to 30 extensions - 26.42% of capital cost for minimum of 5 years Capacity to 400 extensions - 20% of capital cost for minimum of 7 years Capacity over 400 extensions - 13,15% of capital cost for minimum of 12 years The above charges are to recover the capital costs of the P.A.B.X. In addition to these charges, P.A.B.X. subscribers pay the above listed costs for trunks (business lines) and P.A.B.X. extensions.  ANK BX S SIN(OAPm.E THE SINGAPOHE TLELPHGONE BOARD Actual and Forecast Balance Sheets (Expressed in thousands of Malayan dollars) ACTUAL FORECAST 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 ASSETS Fixed Assets Telephone Plant in Service 44,477 61,265 67,605 73,341 82,124 91,325 101,417 3l3,837 125 072 136,572 1,9,072 Less: Depreciation Reserve 21.279 23,845 26,523 29.556 33 075 36.612 40,081 -44 159 48,788 53.980 Net Fixed Assets in Operation 44,,77 39,986 43,760 46,818 52,568 58,250 64,805 73,756 80,913 87,784 95,092 Invest,ents 1,529 1,529 1,529 1,529 1,529 1,529 Current Assets Cash 2,258 4,778 6,594 9,864 3,885 3,291 1,000 1,073 2,918 2,923 2,509 A/C Receivables Less Advance Billing 573 464 816 *872 984 1,065 1,115 1,233 1,333 1,433 1,538 Material and Supplies 1.677 1.861 1,582 1.571 1.378 2.,494 3.051 3.055 3.255 3,o05 3.605 Total Current Assets 4,508 7,103 8,992 12,307 6,247 6,85o 5,3p6 -$.5, 7,50 7,761 7,652 TOTAL ASSETS 48,985 47,009 52,752 59,125 58,815 66,629 71,530 80,61,6 89,948 97,074 104,273 LIABILITIES Equity Aceulated Fund 28,317 16,035 Ordinary Stock 20,000 20,000 20 O,O 20 000 20,000 20,000 40,000 50,ODO 60,000 Oeneral Reserve and tln.ppropriated Surplus 7,649 12,063 16,984 22,209 28 069 34,453 41,471 27,921 241,153 21,173 Other Reserves 8.768 S,589 6.000 7,000 7,000 7.000 7,000 7.000 7.000 7.000 Total Equity 28,317 32,452 37,672 42,984 49,20o 55,069 61,153 68,171 74,924, 81,453 88,173 Long-tene Debt Singapore Oover,uent Loan 12,841 12,290 11,698 11,083 0,765 4,835 2,1435 Proposed I