Third Power Transmission (Sector) Project and Fourth Power Transmission (Sector) Project (Loans 1170...

7/31/2019 Third Power Transmission (Sector) Project and Fourth Power Transmission (Sector) Project (Loans 1170 & 1245-THA)

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ASIAN DEVELOPMENT BANK PPA: THA 26370

PROJECT PERFORMANCE AUDIT REPORT

ON THE

THIRD POWER TRANSMISSION (SECTOR) PROJECT(Loan 1170-THA)

AND

FOURTH POWER TRANSMISSION (SECTOR) PROJECT(Loan 1245-THA)

IN

THAILAND

September 2002


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CURRENCY EQUIVALENTS

Currency Unit baht (B)

At Appraisal(Loan 1170)

At Appraisal(Loan 1245)

At Completion At OperationsEvaluation

March 1992 April 1993 October 1999 June 2002

B1.00 = $0.0386 $0.0392 $0.0257 $.0238$1.00 = B25.89 B25.48 B38.85 B42.18

ABBREVIATIONS

ADB Asian Development BankEGAT Electricity Generating Authority of ThailandEIRR economic internal rate of returnFIRR financial internal rate of returnICB international competitive bidding

MEA Metropolitan Electricity AuthorityMOF Ministry of FinanceOEM Operations Evaluation MissionPCR project completion reportPDP power development planPEA Provincial Electricity AuthorityPPAR project performance audit reportPT3 Third Power Transmission (Sector) ProjectPT4 Fourth Power Transmission (Sector) ProjectTS.8 Transmission System Expansion Plan No. 8TS.9 Transmission System Expansion Plan No. 9

WEIGHTS AND MEASURES

GWh gigawatt-hour (1 million kWh)kV kilovoltkW kilowattkWh kilowatt-hourMVA megavolt-ampereMW megawattm3 - cubic meter

NOTES

(i) The fiscal year (FY) of the Government and EGAT ends on 30 September.The notation FY1992 refers to the fiscal year ending on 30 September 1992.(ii) In this report, $ refers to US dollars.

Operations Evaluation Department, PE-603


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CONTENTS

Page

BASIC DATAEXECUTIVE SUMMARYMAP

iiiiiv

I. BACKGROUND 1

A. Rationale 1B. Formulation 1C. Purpose and Outputs 2D. Cost, Financing, and Executing Arrangements 2E. Completion and Self-Evaluation 3F. Operations Evaluation 3

II. PLANNING AND IMPLEMENTATION PERFORMANCE 4A. Formulation and Design 4B. Achievement of Outputs 4C. Cost and Scheduling 6D. Procurement and Construction 6

E. Organization and Management 7

III. ACHIEVEMENT OF PROJECT PURPOSE 7A. Operational Performance 7B. Performance of the Operating Entity 8C. Financial and Economic Reevaluation 9D. Sustainability 10

IV. ACHIEVEMENT OF OTHER PROJECT IMPACTS 10A. Socioeconomic Impact 10B. Environmental Impact 11C. Impact on Institutions and Policy 11

V. OVERALL ASSESSMENT 12A. Relevance 12B. Efficacy 12C. Efficiency 12D. Sustainability 12E. Institutional Development and Other Impacts 12F. Overall Project Rating 13G. Assessment of ADB and Borrower Performance 13

VI. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS 13A. Key Issues for the Future 13

B. Lessons Identified 14C. Follow-Up Actions 14

APPENDIXES1. Estimated and Actual Project Costs 152. Actual Project Scope 183. Implementation Schedules 224. Financial Performance of Electricity Generating Authority of Thailand 245. Financial and Economic Performance of Projects 25


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BASIC DATA

Third Power Transmission (Sector) Project (Loan 1170-THA) andFourth Power Transmission (Sector) Project (Loan 1245-THA)

Key Project Data ($ million) Loan 1170-THA Loan 1245-THA

As per ADB LoanDocuments Actual

As per ADB LoanDocuments Actual

Total Project Cost 349.10 213.21 405.80 317.45

Foreign Exchange Cost 150.40 107.79 205.70 125.03ADB Loan Amount/Utilization 94.25 87.92 115.60 96.03ADB Loan Amount/Cancellation 6.33 19.57

Key Dates Loan 1170-THA Loan 1245-THA

Expected Actual Expected Actual

Appraisal 618 Feb 1992 823 Feb 1993Loan Negotiations 1011 Jun 1992 2024 Jun 1993Board Approval 16 Jul 1992 19 Aug 1993Loan Agreement 16 Sep 1992 22 Sep 1993Loan Effectiveness 16 Dec 1992 16 Dec 1992 22 Dec 1993 21 Dec 1993First Disbursement 18 Mar 1993 3 May 1994Project Completion 31 Mar 1995 31 Sep 1998 31 Sep 1996 31 Jul 1998

Loan Closing 30 Sep 1995 2 Jul 1998 31 Mar 1997 9 Jul 1999Months

(effectiveness tocompletion)

27.5 69.5 33 55

Key Performance Indicators Loan 1170-THA Loan 1245-THAAppraisal PCR

1PPAR

1Appraisal PCR

1PPAR

1

Financial Internal Rate of Return (%) 8.5 13.4 16.2 11.7 13.4 16.2Economic Internal Rate of Return (%) 15.8 20.9 20.2 13.1 20.9 20.2

Borrower Electricity Generating Authority of Thailand

Executing Agency Electricity Generating Authority of Thailand

Mission Data Loan 1170-THA Loan 1245-THA

Type of Mission No. of Missions Person-Days No. of Missions Person-DaysConsultation

Fact-Finding 2 1 19Appraisal 1 13 1 16

Project AdministrationReview 9 24 10 18Project Completion 1 12 1 12

Operations Evaluation3 1 30 1 30

ADB = Asian Development Bank, PCR = project completion report, PPAR = project performance audit report.1 Combined result of Loans 1170-THA and 1245-THA.2

Fact-Finding for Loan 1170-THA was done in February 1992 and later upgraded to appraisal.3

The Operations Evaluation Mission comprised H. Wang (Evaluation Specialist/Mission leader), J. Wilson (StaffConsultant), and V. Ramos (Evaluation Analyst). The Mission visited Thailand from 29 May to 7 June 202.


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EXECUTIVE SUMMARY

In the early 1990s when the loan projects1 were appraised, Thailand was experiencing aperiod of rapid growth in electricity demand. This growth was matched with Thailands strongeconomic performance, leading to a higher than projected demand for electricity, and strainingthe countrys power system. The principal objective of the projects was to support the

implementation of Transmission System Expansion Plan No. 8 (TS.8) formulated by theElectricity Generating Authority of Thailand (EGAT) in line with the Governments SeventhNational Economic and Social Development Plan (FY1992FY1996) and thereby to ensure thatpower transmission restrictions would not become a constraint to future economic growth.

TS.8, as an integral part of EGATs power development plan, comprised 32 components,each of which represented the least-cost method of meeting the projected demand andtransmission system power flows. Some components provided capacity to rural areas wherepower was distributed by the Provincial Electricity Authority (PEA) of Thailand; one componentprovided an in-feed to the Metropolitan Bangkok area where power was distributed by theMetropolitan Electricity Authority (MEA) of Thailand; in other cases, the components providedpower to industrial estates. Other objectives were to reduce transmission losses and improve

the reliability of supply to each area concerned. The Third Power Transmission (Sector) Project(PT3) was to help implement those components of TS.8 physically commenced at the siteduring FY1992FY1993, and the Fourth Power Transmission (Sector) Project (PT4)those during FY1994FY1996. In addition to the project components under TS.8, PT4 alsofinanced a mobile air quality monitoring system and the 500-kilovolt (kV) transmission systemextension component associated with power delivery from units 12 and 13 at EGATs Mae Mohthermal power plant. The 500 kV transmission line also played an important role in improvingthe overall stability and reliability of the transmission grid.

The Operations Evaluation Mission (OEM) visited Thailand in May and June 2002 andconfirmed that the principal objectives of the two projects to provide additional powertransmission capacity to match load growth, remove power transmission constraints, andimprove system reliability had been achieved. There were significant improvements in systemreliability as well as a noteworthy reduction in losses during execution of the projects,particularly since the completion of the first components in 1995, part of which can be attributedto the projects. The System Average Interruption Frequency Index decreased from 2.9 times persupply point in FY1994 to 0.7 in FY2001. The System Average Interruption Duration Indeximproved from 203 minutes per supply point in FY1994 to 38 in FY2001. Transmission systemlosses were reduced from 3.7% in FY1994 to 2.3% in FY2001. The load growth for which theprojects were designed substantially materialized. The projects also supported the expansion ofPEAs distribution system in provincial areas, where the village electrification ratio increasedfrom 97.7% in FY1994 to 99.0% in FY2000, and MEAs expansion of the supply to MetropolitanBangkok where demand also continued to increase.

The actual cost of PT3 at loan closing was $213.2 million, 39% below the appraisalestimate of $349.1 million. The actual cost of PT4 upon completion was $317.45 million, 22%below the appraisal estimate of $405.8 million. The underruns were attributed to overestimationof total project costs including contingencies at the time of project design, lower procurementcosts, and lower value of local currency costs in dollar equivalent terms because of bahtdepreciation.

1Loan 1170-THA: Third Power Transmission (Sector) Project, for $94.25 million, approved on 16 July 1992; Loan1245-THA: Fourth Power Transmission (Sector) Project, for $115.6 million, approved on 19 August 1993.


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PT3 and PT4 were to be completed by March 1995 and September 1996, respectively.Actual completion was achieved for the individual subprojects between 1994 and 1998. Themain reasons for the delays may be summarized as follows: (i) in some cases, there weredelays in land acquisition and securing the rights-of-way necessary for the construction oftransmission lines; (ii) in several cases, flooding delayed the work and contract extensions wereapproved by EGATs board as a result; (iii) in several cases, delays were attributed to a lack ofskilled labor as a result of the then boom in construction activity; and (iv) a lack of liquidity after

the financial crisis in mid-1997 meant that some or all subcontractors were unable to financetheir ongoing work commitments in a timely manner.

PT3 and PT4 had no unintended socioeconomic impacts during construction andoperation. No significant project-specific environmental issues arose during implementation.EGAT made considerable efforts to address the environmental issues associated with lignitemining and power generation at Mae Moh. The mobile air quality monitoring system financedunder PT4 is in use, in addition to which stationary air quality monitoring systems are inoperation.

Using the same time-slice approach as adopted in the appraisal report and projectcompletion report (PCR), the financial internal rate of return (FIRR) and economic internal rate

of return (EIRR) were reestimated for the two projects combined. The reestimated FIRR of16.2% is above appraisal and PCR estimates while the EIRR of 20.2% is above the appraisalestimate and only slightly below the PCR estimate. The higher reestimates are attributed tolower capital expenditure and faster growth in sales in the years up to mid-1997.

The project objectives and outputs were consistent with the countrys overalldevelopment needs, ADBs assistance strategy for the country, and ADBs strategic objectivesat the time of appraisal; they continue to be relevant. In terms of efficacy, the projects achievedtheir objectives and intended outputs in physical, financial, and economic terms. The projectswere the least-cost solutions for implementing the various components and were completedefficiently with cost savings. Both projects are considered sustainable technically, operationally,and financially. Overall, the OEM rates both projects as highly successful.

The OEM identified two lessons relevant to future ADB operations in the power sector.First, the sector lending approach has resulted in highly successful power projects in Thailand.Clear ownership of the projects, matched with satisfactory institutional capacity of the executingagency, is crucial for achieving this kind of success in other developing member countries.Second, flexibility in the timing of implementation of such projects that are designed to supportongoing power system development requirements is essential for achieving efficient capitalinvestment. ADB should recognize the desirability of project deferrals, if required.


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I. BACKGROUND

A. Rationale

1. In the early 1990s, when the Third and Fourth Power Transmission (Sector) Projects(PT3 and PT4, respectively) 1 were appraised by the Asian Development Bank (ADB), Thailand

was experiencing a period of rapid growth in electricity demand. While this growth hadslackened to slightly less than 8% per annum during FY1982FY1987, sales duringFY1987FY1991 resumed their previous rapid rate of increase, rising at 15.3% per annum;areas outside Metropolitan Bangkok experienced a higher rate of growth at 18.1%. This growthwas matched with Thailands strong economic performance during the period, leading to ahigher than projected demand for electricity, straining the countrys power system. Transmissionsystem restrictions were considered constraints to future economic growth and the principalobjective of the two projects was to help overcome them.

B. Formulation

2. PT3 and PT4 helped fund the Transmission System Expansion Plan No. 8

(TS.8) (FY1991FY1995) of the Electricity Generating Authority of Thailand (EGAT), as well asplanned 500-kilovolt (kV) additions to the transmission system for the delivery of power fromunits 12 and 13 at Mae Moh thermal power plant.

3. EGAT formulated TS.8 in January 1991 as part of its integrated long-term transmissionsystem development planning process to meet load growth and thereby support economic andregional development. TS.8 consisted of 32 components, each of which comprised substationsand/or transmission lines. Each component was prepared in response to projected loadincreases and was tested to establish that the final proposals represented the least-cost methodof meeting the projected demand and transmission system power flows. Some componentsprovided capacity to rural areas where power was distributed by the Provincial ElectricityAuthority (PEA) of Thailand; one component provided an in-feed to the Metropolitan Bangkok

area where power was distributed by the Metropolitan Electricity Authority (MEA) of Thailand;and in other cases, the components provided power to industrial estates. Other objectives wereto reduce system losses and improve the security of supply of the transmission system. TS.8was submitted to the Government for approval in February 1991 with a time frame forimplementation to cope with the power demand projected for FY1992FY1996. Approval wasobtained from the Government in April 1991.

4. EGAT also formulated the 500 kV transmission system extension component associatedwith power delivery from units 12 and 13 at Mae Moh thermal power plant. This componentplayed an important role in improving the overall security and power delivery capacity of thetransmission system as a whole.

5. The map shows the scope of TS.8 and the project components financed under PT3 andPT4. EGATs project formulation reports were prepared competently, using modern powersystem planning and analysis methods, and formed a satisfactory basis for appraisal.

6. Since the two projects were to be implemented using the sector lending approach, thesubprojects were prepared by EGAT on the basis of specific criteria agreed to by EGAT and

1Loan 1170-THA: Third Power Transmission (Sector) Project, for $94.25 million, approved on 16 July 1992; Loan1245-THA: Fourth Power Transmission (Sector) Project, for $115.6 million, approved on 19 August 1993.


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ADB. These criteria included (i) least-cost nature and technical appropriateness, (ii) systemstability and reliability, (iii) system maintainability, and (iv) system loss reduction. During theappraisal of PT3, it was confirmed that these criteria were fully adopted in the preparation ofTS.8. Therefore, the general criterion for selection of subprojects was that they formed part ofTS.8 approved by the Government in 1991. All subprojects for each project were alreadyidentified at the time of appraisal. In case that subprojects did not form part of TS.8, appraisal

reports prepared by EGAT demonstrating that the subprojects satisfied all the criteria were to besubmitted to ADB for prior approval. However, because both loans were sector loans, thecombination of subprojects could be changed. No project preparatory technical assistance wasrequested or considered necessary as EGATs Power System Planning Department wascapable of preparing the projects itself. It had considerable experience in this area, including theformulation of previous transmission expansion projects financed partly by ADB.

7. Policy dialogue during the processing of the two projects focused on (i) the extent andtiming of private sector participation in power system development, (ii) desirable adjustments inthe level and structure of electricity tariffs for sales to MEA and PEA, and (iii) development ofenvironmental standards for transmission planning.

C. Purpose and Outputs

8. As already outlined, the two loans helped fund the construction of transmission facilitiesto convey electricity to provincial areas, strengthen the power supply to Metropolitan Bangkok,strengthen supply to industrial areas, and overcome constraints in the delivery of power fromunits 12 and 13 at the Mae Moh thermal power plant. The main purposes of the projects were toimprove the efficiency and reliability of power supply as well as to support system expansionand rural electrification. The beneficiaries were to include all electricity customers, includingrural customers.

9. The project scope consisted of construction of 500 kV, 230 kV, and 115 kV transmissionlines; expansion of 500 kV substations; construction of 230 kV and 115 kV substations;

reinforcement of 230 kV and 115 kV substations; and provision of an air quality monitoringsystem for Mae Moh thermal power plant. The scope was consistent with the purposes of theprojects by supporting increased transmission system service capability and a resulting increasein the provision of power for Thailands future growth; improved reliability of power supply,particularly in the new industrial and commercial areas; PEAs rural electrification program; andenvironmentally sound operation of the Mae Moh thermal power plant.

D. Cost, Financing, and Executing Arrangements

10. For PT3, the estimated project cost at loan appraisal was $349.1 million equivalent, witha foreign exchange component of $150.4 million. The ADB loan of $94.25 million was to beused to finance 63% of the foreign exchange cost of the project. The financing of the remaining

foreign exchange expenditure ($56.15 million) was to be arranged by the Government andEGAT from commercial sources. The entire local currency cost ($198.7 million equivalent) of theproject was to be financed by local borrowing and EGATs internal resources . For PT4, theestimated project cost at loan appraisal was $405.8 million equivalent, with a foreign exchangecomponent of $205.7 million. The approved ADB loan of $115.6 million was to be used tofinance 56% of the foreign exchange cost of the project. The financing of the remaining foreignexchange expenditure ($90.1 million) was to be arranged by the Government and EGAT fromcommercial sources. The entire local currency cost ($200.1 million equivalent) of the projectwas to be financed by local borrowing and EGATs internal resources. Taken together, the ADB


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loans were to finance 59% of the foreign exchange cost and 28% of the combined cost of theprojects. Details of the cost estimates for the two loans at the time of appraisal are given inAppendix 1.

11. EGAT implemented PT3 and PT4 in accordance with arrangements agreed with ADBduring appraisal. Principal responsibility for implementation lay with the Transmission System

Planning and Project Division.

E. Completion and Self-Evaluation

12. The last subproject under PT3 was completed in September 1998, 3.5 years later thanoriginally planned. The last subproject under PT4 was completed in July 1998, 1.8 years behindschedule. Supported by quarterly progress reports for the two projects together, EGAT prepareda comprehensive project completion report (PCR) for each project.2 ADBs PCR was circulatedin September 2000. It contained the required ingredients and was generally satisfactory. Inattempting to consolidate facts and conclusions relating to the numerous separate subprojects,each of which had its own history, the reasons given in the PCR for the delay in completing thetwo projects as a whole were not convincing. However, when the details of each component

were considered separately, as in EGATs PCRs for example, the reasons for the delays werereadily understandable.3 The PCR noted that in hindsight it might have been more expedient todevelop a single project at the outset rather than separating TS.8 into two projects processed in2 consecutive years.

13. Overall, the PCR satisfactorily evaluated all aspects of the projects and supported itsconclusions with sufficient evidence. The overall rating of generally successful for both projectsgiven in the PCR was based on a balanced evaluation.4

F. Operations Evaluation

14. This project performance audit report (PPAR) examines the findings of the PCR and

assesses the operating performance of the projects in terms of relevance, efficacy, efficiency,sustainability, and institutional and other development impacts. The Operations EvaluationMission (OEM) visited Thailand from 29 May to 7 June 2002 and met with representatives fromEGAT, MEA, PEA, the Ministry of Finance (MOF), and the National Energy Policy Office. EGATand other parties concerned provided the information needed by the OEM. 5The views of ADBsconcerned departments and those of EGAT have been taken into account in finalizing thePPAR. Copies of the draft PPAR were forwarded to MOF and EGAT on 5 July 2002 with arequest that comments be provided within 2 weeks. Although the request was followed upsubsequently, no comments were received; it is, therefore, assumed that MOF and EGATendorse the PPAR.

2EGATs PCR for Loan 1170-THA was submitted in March 1999 and its PCR for Loan 1245-THA, in September1999. The last quarterly progress report on ADBs project file is dated 30 June 1999.

3There were two other inaccuracies in the PCR: (i) it stated that TS.8 included the 500 kV component but thatcomponent was part of the Mae Moh project; (ii) it highlighted a change in design at Chaeng Watthana substationfrom an outdoor design to gas -insulated indoor switchgear but the driving change was upgrading of the designvoltage level from 230 kV to 500 kV for later operation at the higher voltage level.

4Before September 2000, a three-category rating system was used (generally successful, partly successful, andunsuccessful).

5Chosen on a random basis, facilities visited included subprojects at Chiang Mai, Chiang Rai, and Mae Moh as wellas the 500 kV substation and lines at Sai Noi.


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II. PLANNING AND IMPLEMENTATION PERFORMANCE

A. Formulation and Design

15. EGATs power development plan (PDP) is a 15-year rolling plan covering both powergeneration and transmission system development. PT3 and PT4 as integral parts of EGATs

TS.8 conformed with the Governments Seventh National Economic and Social DevelopmentPlan (FY1992FY1996) and EGATs PDP 92-01.6 They were formulated using appropriatetechniques and modern technology and their design was, and remains, consistent with andrelevant to Thailands overall development objectives. Both projects were also consistent withADBs sector strategy at the time for Thailand in terms of improvements in transmission anddistribution systems to ensure effective power utilization and to support rural electrification.

16. In line with the lending approach followed, relevant power sector issues were reviewedduring project processing. The policy dialogue focused on private sector participation and tariffreform as important sector issues.

B. Achievement of Outputs

17. The principal outputs of the TS.8 and the 500 kV component were to provide additionalpower transmission capacity to match load growth, remove transmission constraints, andimprove system reliability, as well as to enable power delivery from Mae Moh units 12 and 13.Almost all subprojects of PT3 and PT4 were implemented as planned at appraisal (Table 1 andAppendix 2).

Table 1: Combined Project Scope

Item Planned Actual

500 kV, 230 kV, and 115 kV transmission line

construction (circuit-kilometers) 2,563 2,549230 kV and 115 kV substation construction (number) 18 17230 kV and 115 kV substation reinforcement (number) 39 37500 kV switchyard expansion (number) 1 1500 kV substation expansion (number) 3 3Air quality monitoring system (number) 1 1

kV = kilovolt.Source: Electricity Generating Authority of Thailand.

18. There was no change in project purpose or planned outputs for either project. Neitherwere there any major changes in project scope. Two subprojects, namely construction of the115 kV Thoeng substation and supply of basket truck, were transferred from PT3 to PT4, and

two additional contracts for supply of aluminum ingots were included in PT4 to utilize savingsunder Loan 1245-THA. One subproject, the transmission line from Rajjaprabha to Phangngaunder PT3, was dropped from ADB financing because of delays arising from the need to carryout an environmental impact assessment and studies to secure construction approvals.7 Somedesign changes were made during the course of the work. These included a change in theproposed voltage at Chaeng Watthana substation financed under PT3 from 230 kV to 500 kV to

6PDP 92-01 covering FY1992FY2006 was approved by the Government in September 1992.

7 The line was eventually built in accordance with the Governments environment all regulations.


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better fit in with EGATs least-cost transmission system development program. The OEMreviewed the design changes and considered them to be appropriate. Under the sector lendingapproach, such changes are allowed in order to reflect evolving transmission requirements.

19. The projects supported the expansion of PEAs distribution system in provincial areasand MEAs expansion of the supply to Metropolitan Bangkok. Table 2 illustrates the growth in

MEA and PEA supply that took place during implementation of the two projects, despite theeffects of the Asian financial crisis.

Table 2: MEA and PEA Power Supply Growth

Item MEA % per annum PEA % per annum

Number of CustomersFY1995 1,818,808 9,034,872FY1998 2,046,594 4.0 10,583,054 5.4FY2001 2,233,814 3.0 11,549,581 3.0

Sales in GWh

FY1995 29,106 37,862FY1998 30,987 2.1 48,003 8.2FY2001 33,847 3.0 56,428 5.5

GWh = gigawatt-hour , MEA = Metropolitan Electricity Authority, PEA = Provincial Electricity Authority.Source: MEA and PEA annual reports.

20. Significant improvements in transmission system reliability, as well as a noteworthyreduction in system losses over the period of execution of the projects, were also achieved asshown in Table 3. The System Average Interruption Frequency Index decreased from 2.9 timesper supply point in FY1994 to 0.7 in FY2001. The System Average Interruption Duration Indeximproved from 203 minutes per supply point in FY1994 to 38 in FY2001. Transmission systemlosses were reduced from 3.7% in FY1994 to 2.3% in FY2001. The improvements areparticularly evident from the time of completion of the first project components in 1995. Part of

these improvements can clearly be attributed to the projects.

Table 3: Transmission System Improvements

FiscalYear

SAIFI(times/supply point)

SAIDI(minute/supply point)

System MinutesLost

a

TransmissionSystem Losses (%)

1994 2.9 203 72 3.71995 1.9 105 30 3.21996 1.5 105 29 3.21997 1.5 95 19 3.11998 1.4 79 19 2.71999 0.9 84 19 2.62000 0.9 51 16 2.42001 0.7 38 11 2.3b

SAIDI = System Average Interruption Duration Index, SAIFI = System Average Interruption Frequency Index.a

System minutes of supply lost per megawatt of demand.b

Estimated.Source: Electricity Generating Authority of Thailand.


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C. Cost and Scheduling

21. The actual cost of PT3 at completion was $213.2 million, 39% below the appraisalestimate of $349.1 million. The actual cost of PT4 upon completion was $317.5 million, 22%below the appraisal estimate of $405.8 million. The major underruns were attributed to severalfactors: (i) overestimation of total project cost including contingencies at the time of project

design, (ii) lower procurement costs, and (iii) lower value of local currency expenditures in dollarequivalent terms as a result of baht depreciation during project implementation. Details ofestimated and actual project costs are given in Appendix 1.

22. Given the significantly lower costs and the sector lending approach followed, EGATadded some components with the approval of ADB (Appendix 2). Final loan savings of$6.3 million and $19.6 million, respectively were cancelled at loan closing.

23. PT3 and PT4 were to be completed by March 1995 and September 1996, respectively.8Actual completion was achieved for the individual subprojects between 1994 and 1998 asshown in Appendix 3. The reasons for the delays may be summarized as follows: (i) in somecases, there were delays in land acquisition and securing of the rights-of-way necessary for the

construction of transmission lines;9

(ii) in several cases, flooding is reported to have delayed thework and contract extensions were approved by EGATs board as a result; (iii) in several cases,delays were attributed to a lack of skilled labor as a result of the then boom in constructionactivity in Thailand; and (iv) a lack of liquidity after the financial crisis in mid-1997 meant thatsome or all subcontractors were unable to finance their ongoing work commitments in a timelymanner. Additionally, some delays arose as a result of design changes.

24. Because of the financial crisis and the resulting fall in electricity demand during FY1998and FY1999 (Table 4), the delays did not adversely affect the project outputs. However, it wasrecognized that the original schedule prepared by EGAT was too optimistic with regard to landacquisition and rights-of-way, especially when the practice of having the Government approveproject expenditures in a total package was taken into account. 10

D. Procurement and Construction

25. EGAT agreed at appraisal that bid packages would be structured to make them suitablefor international competitive bidding (ICB) wherever appropriate. In accordance with ADBssector lending policy, special procurement actions were agreed under both loans to simplifyprocurement actions: (i) exemption from prior approval of ADB for standard bidding documentsfor contracts to be awarded under ICB; (ii) authorization to award by EGAT contracts up to$1.0 million for all contracts, and contracts up to $3.0 million for all contracts where the lowestpriced bidder was also the lowest evaluated bidder, without prior approval from ADB; and(iii) use of international shopping for contracts below $0.5 million. The preparation of biddingdocuments, bidding, contract award, construction, installation, and contract administration

8 EGATs original documentation for TS.8 foresaw its completion by early 1995. At the time of appraisal of Loan1245-THA, completion of TS.8 was expected by September 1996.

9 The projects were prepared before the formal incorporation of social dimensions in ADB operations in 1993 andintroduction of the mandatory requirement for resettlement plans in 1995. In accordance with the governmentprocedures and ADB policy at the time, land acquisition for substations was done through open market transactionand owners of the rights -of-way for transmission lines were sufficiently compensated. Apart from some initialdelays, no significant issues regarding land acquisition and rights -of-way arose during the implementation of theprojects.

10 Advance procurement of land is not possible under this practice.


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Table 4: Projected and Actual Load Growth

FiscalYear

Projected(MW)

Actual(MW)

Actual/Projected(%)

1992 9,000 8,877 98

1993 9,924 9,730 981994 10,892 10,709 981995 11,946 12,268 1031996 13,075 13,311 1021997 14,205 14,506 1021998 15,354 14,180 921999 16,531 13,712 832000 17,765 14,918 842001 19,000 16,126 85

MW = megawatt.Source: Electricity Generating Authority of Thailand.

31. The performance of EGATs transmission system in terms of reliability improvementsand loss reduction has been very good (para. 20). Since EGAT retains competent staff andprovides the necessary resources to adequately operate and maintain the project facilities andhas maintained a sound financial position to date, the operational performance of the projects isjudged satisfactory.

B. Performance of the Operating Entity

32. A summary of EGATs financial performance during the period FY1992FY2001 is givenin Appendix 4. EGAT maintained a strong financial performance in most years. Its totalrevenues doubled during FY1992FY1997 and, after deducting interest, bonuses, andgovernment remittances, net incomes were positive each year.

33. EGATs financial performance deteriorated markedly with the onset of the financial crisisin mid-1997. In addition to the decline in energy sales in FY1998 and FY1999, significantexchange losses on foreign debt were incurred after the flotation of the baht, despite theGovernments permission to EGAT to amortize a portion of these over a longer period. Incomefrom the sale of shares in EGATs associated generating company and lower remittances paidto the Government in lieu of taxes offset these losses slightly. In FY1999, EGAT incurred asubstantial deficit as a result of expensing through the income statement all the foreignexchange losses incurred from FY1997 to FY1999. 12 This change in policy reflected anagreement with the World Bank in 1998 that EGAT should in the future comply with internationalaccounting standards in respect of the treatment of foreign exchange gains and losses, andother areas. This was the first deficit incurred by EGAT in more than 10 years of operation.From FY2000, EGAT resumed its strong financial performance. Sales revenue increased at20% and 15%, respectively, in FY2000 and FY2001 and net income became positive again.However, EGATs debt service coverage deteriorated from FY1998 to FY2001 as debtrepayment rose sharply from B7.6 billion to B41.1 billion during that period. The restructuring of

12 EGATs annual report and financial statements for FY1999 note a change in accounting policy in this respect asfollows: In 1999, EGAT has changed the accounting policy for the treatment of losses from the introduction ofmanaged float exchange rate system in 1997. Previously, these had been recorded as deferred expenses andwritten off over the remaining term of each loan. In 1999, the remaining deferred amount of Baht 18,679.70 millionhas been charged to the net loss of the year.


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the power sector in coming years, when implemented, is likely to lead to a change in EGATsrole and further changes in its financial position. Having said that, the OEM is satisfied thatEGATs solid financial performance to date indicates its ability to sustain the operations of theprojects.

34. As far as ADBs loan covenants are concerned, two of particular importance were

agreed at the time of appraisal: (i) a self-financing ratio requiring EGAT to generate for eachfiscal year, funds from internal sources equivalent to not less than 25% of the annual average ofcapital expenditures incurred in the previous, current, and following fiscal years (20% up to andincluding FY1993); and (ii) a debt-equity ratio requiring EGAT to maintain a ratio of debt toequity of less than 2:1 in all years. EGAT complied with the covenanted self-financing ratio in allyears since loan approval except FY1997 and FY2000 when the ratio was 14% and 24%,respectively. EGAT complied with the covenanted debt-equity ratio in all years since loanapproval.

C. Financial and Economic Reevaluation

35. The financial internal rates of return (FIRRs) of the two projects were calculated at

appraisal by comparing the incremental capital and operating costs of EGATs PDP over a 5-year period (FY1992FY1996) with the projected incremental revenues. This time-slice wasexpected to include the projects. Although the same methodology was used, FIRRs wereestimated separately for the two projects because the appraisal for PT4 was done 1 year laterthan PT3 and data update was necessary. In its PCRs, EGAT adopted the same approach buttook a longer time-slice, FY1992FY1998, matched with the actual implementation periods ofthe projects. Also since both projects were completed at about the same time in 1998, the FIRRwas recalculated for the two projects as a whole. ADB adopted the same approach as EGAT inits own PCR and the longer time-slice has again been used for the reevaluation carried out bythe OEM.

36. The results of the analyses undertaken are presented in Table 5 below. The

methodology used in the OEM reevaluation was the same as that used in the PCR, withnecessary adjustments. Details are given in Appendix 5. The higher FIRR reestimate isattributed mainly to lower capital expenditure and faster growth in sales in the years up tomid-1997.

Table 5: FIRR Estimates(%)

Item PT3 PT4 Both Projects

Appraisal 8.5 11.7 PCR 13.4

OEM 16.2

= not available, FIRR = financial internal rate of return, OEM = Operations Evaluation Mission, PCR = projectcompletion report, PT3 = Third Power Transmission (Sector) Project, PT4 = Fourth Power Transmission (Sector)Project.

37. The principal economic justification for each project component at the time of appraisalrested on establishing the need for its implementation in the context of EGATs overall powersystem development strategy; and demonstrating that the proposed works represented the


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10

least-cost solution in each case. Details of the forecast demand, network analyses, and theleast-cost calculations were given in EGATs project formulation report for TS.8 of September1991. In the case of the 500 kV transmission extension component for Mae Moh units 12 and13, they were summarized in EGATs PCR of September 1999. The calculations were reviewedby the OEM and were considered appropriate. It was also confirmed that the power demand forwhich the projects had been designed had substantially materialized (para. 30).

38. As in the case of the FIRR, the economic internal rates of return (EIRRs) of the twoprojects were calculated at appraisal by comparing the incremental capital and operating costsof EGATs PDP over a 5-year period with the projected incremental revenues. The time-slicechosen in each case was expected to include the projects. In its PCRs, EGAT adopted thesame approach but took a longer time-slice, FY1992FY1998, matched with the actualimplementation period of the project. Since both projects were completed at about the sametime in 1998, the EIRR was reestimated for the two projects as a whole. ADB adopted the sameapproach as EGAT in its own PCR and the longer time-slice has again been used for thereevaluation carried out by the OEM.

39. The results of the analyses undertaken are presented in Table 6 below. Details are given

in Appendix 5. The high reestimate confirms the economic viability of both projects.

Table 6: EIRR Estimates

(%)

Item PT3 PT4 Both Projects

Appraisal 15.8 13.1 PCR 20.9OEM 20.2

= not available, EIRR = economic internal rate of return, OEM = Operations Evaluation Mission, PCR = projectcompletion report, PT3 = Third Power Transmission (Sector) Project, PT4 = Fourth Power Transmission (Sector)Project.

D. Sustainability

40. Although EGATs future role and financial position are expected to change for thereasons noted in para. 33, its sound technical and financial performance provides considerableassurance of the future availability of sufficient funds and other resources for project operationand maintenance. Taking also into account EGATs undoubted ownership of the projects, theOEM does not have any doubts about their sustainability.

IV. ACHIEVEMENT OF OTHER PROJECT IMPACTS

A. Socioeconomic Impact

41. Indirectly, the projects supported the economic development of the country, both inurban and rural areas, as evidenced by the growth in sales and number of customers (para.19). The projects had no significant direct socioeconomic impacts during construction; nor didthey have any unintended impacts.


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11

B. Environmental Impact

42. At the time of appraisal, after ADBs review of the possible environmental impacts of therouting of transmission lines and the location and type of substations, it was concluded that nosubproject would raise significant environmental issues. The Government confirmed TS.8 as aB category project not requiring an environmental impact assessment. During implementation,

EGAT set its criteria for site selection in accordance with the Governments environmental policyand planning regulations. Subsequently, however, during the detailed planning and designstage for the 115 kV transmission line from Rajjaprabha to Phangnga, it was found necessaryfor the line to pass through a national forest reserve for a length of about 6kilometers. Anenvironmental impact assessment was required and a significant delay in construction wasforeseen. As a result, this subproject was withdrawn by EGAT from ADB funding under PT3. 13

43. EGAT has made considerable efforts during recent years to address the environmentalissues associated with lignite mining and power generation at Mae Moh. Flue gasdesulfurization systems for all operating units at Mae Moh thermal plant (units 4 to 13) had beeninstalled by February 2000 and other measures taken. The mobile air quality monitoring systemfinanced under PT4 is in use, in addition to which there are stationary air quality monitoring

systems in operation, some of which belong to EGAT and some to the Pollution ControlDepartment of the Government. A report of air quality is issued weekly by the latter to the public.A comprehensive study of environmental impacts at the station and mine has been preparedunder ADBs technical assistance,14 and its recommendations were under consideration byEGAT at the time of preparation of this PPAR. At the time of the OEM, the 24-hour average ofthe sulfur dioxide ambient level at Mae Moh was around 160 micrograms/cubicmeter (m3), belowthe national standard of 320 micrograms/m3 and much lower than the 400 micrograms/m 3recorded in October 1992. No other significant project-specific environmental issues aroseduring the projects implementation.

C. Impact on Institutions and Policy

44. Power sector restructuring in Thailand continues to progress. In October 2000, theGovernment resolved issues related to the Guidelines on Electricity Supply IndustryRestructuring and Establishment of the Power Pool, but various international events in theelectricity supply industry raised concerns over the appropriateness of introducing a power poolin Thailand.15Its establishment has, therefore, been postponed. As an intermediate step towarda competitive power market, large consumers will soon be allowed to purchase power directlyfrom power producers through contractual arrangements at an agreed price plus wheelingcharges.16 In March 2001, the Prime Minister approved a plan for listing qualified state-ownedenterprises on the Stock Exchange of Thailand. Under this plan, EGAT would become a publiclylisted company by the second half of 2003. In the meantime, a study has been carried out byEGAT on other suitable models for Thai power sector restructuring. The result of the study wasnot available at the time of preparation of this PPAR.

45. Other than policy dialogue, the projects did not directly address institutionalstrengthening and policy issues through loan covenants. They did, however, further enhanceEGATs internal capabilities in the areas of project preparation, implementation, and monitoringand, to that extent, furthered ADBs institutional-strengthening aims.

13Environmental approval was subsequently obtained by EGAT and the line was built.

14TA 3583-THA: Mae Moh Environmental Evaluation Study, for $500,000, approved on 14 December 2000.

15The Californian power crisis in early 2001 was one such event cited by EGAT.

16 They may already do this in industrial estates.


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12

V. OVERALL ASSESSMENT

A. Relevance

46. Both projects purposes and outputs were consistent with the countrys overalldevelopment needs, ADBs assistance strategy for Thailand, and ADBs strategic objectives for

the energy sector at the time of appraisal and have continued to be relevant since then. None ofthe design changes made during implementation altered the relevance of the projects, otherthan to improve it. There has been a recovery in the growth in demand after the financial crisis.Both projects are assessed as highly relevant.

B. Efficacy

47. Both projects achieved their purposes (i.e., immediate objectives) and intended outputsin physical, financial, and economic terms as specified at appraisal and as described earlier inthis PPAR. Both projects are assessed as highly efficacious.

C. Efficiency

48. Both projects were the least-cost way of implementing the various components and werecompleted with major cost underruns but with delays. Although the delays did not adverselyaffect the project outputs, at 1.8 to 3.5 years, they were nonetheless significant. With thereestimated FIRR at 16.2% and EIRR 20.2% for PT3 and PT4 combined, both projects areassessed as efficient.

D. Sustainability

49. Given the strong technical and financial performance of EGAT, MEA, and PEA, thesustainability of both projects is assessed as most likely.

E. Institutional Development and Other Impacts

50. Neither project was designed to have a direct institutional or policy developmentcomponent.17 They did facilitate economic growth before and after the 1997 financial crisis,especially in rural areas. The consumption of electricity by businesses and industries servicedby PEA increased by 68% from 23,895 gigawatt-hour (GWh) in FY1994 to 40,200 GWh inFY2000.18 Also attributable to the implementation of the projects, the village electrification ratioin rural areas of Thailand increased from 97.7% in FY1994 to 99.0% in FY2000. The number ofcustomers in Metropolitan Bangkok serviced by MEA grew by 24% from about 1.7 million inFY1994 to 2.1 million in FY2000. Further, PT4 helped improve management of environmentalperformance of the Mae Moh thermal power plant. For these reasons, other developmentimpacts are assessed as significant for both projects.

17The classification for Loan 1170-THA was not given at the time of approvals while Loan 1245-THA was classifiedas serving primarily economic growth and secondarily environmental protection.

18Theelectricity sales of PEA given in Table 2 include electricity consumption for residential, business, and industry.


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13

F. Overall Project Rating

51. Overall, both projects are rated as highly successful.19 By comparison, EGAT alsoconsidered the projects highly successful to the extent that almost all project objectives hadbeen achieved and subprojects had been completed as planned.

G. Assessment of ADB and Borrower Performance

52. The performance of ADB and the Borrower, EGAT, is judged as highly satisfactorybecause both organizations handled their roles in project formulation, appraisal, procurement,and implementation appropriately and in a timely manner in regard to the matters within theircontrol. ADB had considerable prior experience of working with EGAT and was familiar with thepower sector in the country and EGATs development needs. Additionally, ADB had funded theintroduction of modern power system analysis tools for the power transmission agencies inSoutheast Asia in the early 1980s and, by the time of project formulation, EGATs PowerSystem Planning Department had developed comprehensive power system modelingcapabilities on which ADB was able to rely. Subsequent ADB actions and approvals were

generally carried out in a timely manner. A total of 10 and 11 inception and review missionswere conducted for PT3 and PT4 respectively, although most of them dealt also with otherprojects. The frequency, composition, and length of the missions are considered to have beenappropriate for the type of project and the Executing Agency concerned.

VI. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS

A. Key Issues for the Future

53. The OEM found no issues arising in respect of EGATs ability to operate the projects inthe future. Nor did the OEM identify any significant issues in respect of the implementationphase, other than to note that, as the sector lending approach was followed, there was enough

flexibility to utilize the loans fully. On the other hand, the essence of efficient capital investmentis its deferral for as long as possible, consistent with meeting the relevant need in a least-costmanner. In fact, it is the mark of a mature organization that it moves away from the rigidities ofproject and plan funding and adopts, instead, a continuous and flexible process for itsincremental capital investment, constantly adjusting the nature, timing, and extent of itsexpenditure program to maximize investment effectiveness.

54. The fact that major savings arose during implementation suggests that the costs of thevarious components may have been overestimated during the initial phases. The OEM noted inthis regard that EGATs project estimates included a 10% allowance in the foreign currency costfor physical contingencies. It may be appropriate to review this percentage in future estimatesfor transmission system works, reducing it to reflect the relatively low risk entailed in the design

and implementation of such projects.

55. As far as the future operations of EGAT are concerned, in the OEMs opinion, EGATspower system planning processes could be improved by reconsidering the security of supplycriteria used. At present, the main criterion is a (n-1) level of security of supplythat is, supplyis maintained during a fault on a single piece of equipment. Modern thinking is based on more

19Based on the revised four-category project rating system (highly successful, successful, partly successful,and unsuccessful).


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14

comprehensive criteria that take into account the magnitude of the load interrupted and theconsequential economic cost of demand not served during an interruption in supply. Theadoption of such criteria could help optimize EGATs future capital expenditures on thetransmission system by emphasizing service outcomes. This point was discussed with EGATduring the OEM.

B. Lessons Identified

56. From the viewpoint of ADBs operations as a whole, one lesson is the need for flexibilityin the timing of implementation of projects such as these, designed to fund an ongoing andevolving development program. This flexibility needs to recognize the desirability of projectdeferrals if the need arises. With transmission and distribution projects, this is generally possiblebecause of their relatively short lead times.

57. Second, the sector lending approach has resulted in highly successful power projects inThailand. Clear ownership of the projects, matched with satisfactory institutional capacity of theexecuting agency, is crucial for achieving this kind of success in other developing membercountries.

C. Follow-Up Actions

58. No follow-up actions are needed.


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Actual

ADB EGAT

Component Foreign Local Total (FC) (FC) Local Total

Extra-High Voltage

Transmission Lines 0.00 0.00 0.00 2.30 0.00 0.00 2.30

Substations 0.00 0.00 0.00 18.30 0.00 17.49 35.79

High Voltage


Substations 62.60 41.10 103.70 43.77 1.37 20.89 66.03

Additional Transformers 22.50 7.20 29.70 0.00 8.50 6.10 14.60

Reactive Power Equipment 7.50 2.70 10.20 7.47 0.00 5.39 12.86

Communications 6.50 1.90 8.40 1.01 0.00 3.34 4.35

Miscellaneous Expansion 7.80 7.70 15.50 3.43 0.00 6.11 9.54

Engineering Service 0.00 19.60 19.60 0.00 0.00 9.03 9.03

Subtotal 150.40 181.10 331.50 87.92 19.87 92.74 200.53

IDC 0.00 17.60 17.60 0.00 0.00 12.68 12.68

Total 150.40 198.70 349.10 87.92 19.87 105.42 213.21

ADB = Asian Development Bank, EGAT = Electricity Generating Authority of Thailand, FC = foreign

currency cost, IDC = interest during construction.

Appraisal Estimate

Table A1.1: Cost of Transmission S stem Ex ansion Plan No. 8 Covered bLoan 1170-THA for Time-Slice 19921993

ESTIMATED AND ACTUAL PROJECT COSTS

$ million

Appendix 1 15


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Appraisal Estimate Actual

ADB EGAT


Extra-High Voltage


Substations 39.00 8.60 47.60 17.49a

0.00 0.00 17.49


High Voltage

Transmission Lines 22.10 50.40 72.50 26.33 b 14.00 39.70 80.03

Substations 40.00 31.70 71.70 31.54 2.00 55.04 88.58



Communications 8.10 2.30 10.40 0.08 0.00 3.38 3.46



Environment

Environment Monitoring System 1.00 0.10 1.10 0.58 0.00 0.10 0.68

Subtotal 182.90 160.40 343.30 96.03 29.00 167.72 292.75

Duties 0.00 28.40 28.40 0.00 0.00 4.70 4.70

IDC 22.80 11.30 34.10 0.00 0.00 20.00 20.00

Total 205.70 200.10 405.80 96.03 29.00 192.42 317.45



a Amount for Sai Noi Substation is not included.

Cost of transmission conductor amount $11.14 million is included.

$ million

Table A1.2: Cost of Transmission S stem Ex ansion Plan No. 8 Covered bLoan 1245-THA for Time-Slice 19941996

16 Appendix 1



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Appraisal Estimate Actual

ADB EGAT


Extra-High Voltage


Substations 39.00 8.60 47.60 35.79 0.00 17.49 53.28


High Voltage


Substations 102.60 72.80 175.40 75.31 3.37 75.93 154.61



Communications 14.60 4.20 18.80 1.09 0.00 6.72 7.81



Environment

Environment Monitoring System 1.00 0.10 1.10 0.58 0.00 0.10 0.68

Subtotal 333.30 341.50 674.80 183.95 48.87 260.46 493.28

Duties 0.00 46.00 46.00 0.00 0.00 17.38 17.38

IDC 173.20 210.00 383.20 87.92 19.87 125.42 233.21

Total 205.70 200.10 405.80 96.03 29.00 192.42 317.45



$ million

Table A1.3: Cost of Transmission S stem Ex ansion Plan No. 8 Covered bLoans 1170-THA and 1245-THA

Appendix 1 17



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18 Appendix 2

ACTUAL PROJECT SCOPE

A. Third Power Transmission (Sector) Project (PT3)

1. The subprojects financed under PT3 were as follows.

Related to Time-Slice 19921993 of the Power Transmission System ExpansionProject No. 8 (TS.8)

(i) Construction of a new 500-kilovolt (kV) Chaeng Watthana substation and 230 kVline termination

(ii) Construction of a new 230/115 kV Hua Hin substation and 230 kV linetermination

(iii) Construction of a new 230/115 kV Bang Saphan substation and 230 kV line

termination

(iv) a. Modification of 115 kV Rayong 1 substation to accommodate theadditional line

b. Expansion of 115 kV Rayong 3 substation for one more circuitc. Expansion of 115 kV Chanthaburi substation for two incoming linesd. Expansion of 115 kV Samut Sakhon 1 substatione. Expansion of 115 kV Samut Sakhon 2 substationf. Expansion of 115 kV Ao Phai substationg. Expansion of 115 kV Bang Lamung substation

(v) Expansion of 115 kV Thalan 3 substation

(vi) Expansion of 115 kV Saraburi 4 line and substation

(vii) Expansion of Nakhon Si Thammarat and New Ranot

(viii) Construction of a new 115 kV Chom Thien substation

(ix) a. Expansion of 115 kV Kalasin substation for two outgoing linesb. Construction of a new 115 kV Somdet substation

(x) a. Expansion of 115 kV Buri Ram substation for one outgoing lineb. Construction of a new 115 kV substation for one outgoing line

(xi) Expansion of 115 kV Patthani substation for one incoming line

(xii) Construction of a new 115 kV Ranot substation

(xiii) a. Expansion of 230 kV Mae Moh switchyard


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Appendix 2 19

b. Expansion of Mae Moh 3 substationc. Construction of 230 kV Chiang Mai substation

(xiv) a. Expansion of 115 kV Mae Moh switchyardb. Expansion of 115 kV Chiang Rai substation

(xv) Expansion of 115 kV Nakhon Sawan line and substation

(xvi) Expansion of 115 kV Manorom line and substation

(xvii) Expansion of 115 kV Takhli 2 substation

(xviii) Expansion of 115 kV Chiang Rai substation for 115 kV Chiang Rai-Mae Chanline

(xix) a. Expansion of 115 kV Chiang Rai substation for 115 kV Chiang Rai-Thoeng line

b. Construction of a new 115 kV Thoeng substation

2. On 30 July 1993, the Electricity Generating Authority of Thailand (EGAT) submittedadditional subprojects under TS.8 for Asian Development Bank (ADB) consideration and ADBapproved them on 3 August 1993. The additional subprojects comprised the supply of shuntcapacitor banks, supply and construction of a new control building at South BangkokSubstation, and supply of basket truck.

3. In November 1994, EGAT realized that the completion date of the 115 kV lineRajjaprabha-Phangnga would have to be postponed as two parts of the line would penetrateforest conservation areas and EGAT had to carry out an environmental impact assessmentstudy for submission to the relevant government agencies. Final approval was expected to takea minimum of 2 years and EGAT was uncertain as to when resumption of the construction work

on the line would be permitted. Under the circumstances, EGAT decided to withdraw thissubproject from funding by ADB.

4. In February 1995, considering that the disbursement under Loan 1170-THA had not yetbeen completed and that a large portion of uncommitted loan balance was still available, EGATproposed and ADB agreed to shift one package from Loan 1245-THA (transmission system forMae Moh power project units 12 and 13) to Loan 1170-THA. This package was the constructionof the new 500 kV Sai Noi Substation near Bangkok and a 500 kV line from Sai Noi to NongChok.

5. In addition, as implementation was delayed, EGAT proposed and ADB agreed in March1995 to transfer two subprojects from Loan 1170-THA to Loan 1245-THA, namely construction

of the 115 kV Thoeng Substation and supply of basket truck.

B. Fourth Power Transmission (Sector) Project (PT4)

6. The subprojects financed under PT4 were as follows.


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20 Appendix 2

Related to Time-Slice 19941996 of TS.8

(i) a. Expansion of the 230 kV Bang Pakong switchyard for two outgoing linesto Prachin Buri 2 substation

b. Expansion of Bang Pakong and New Prachin Buri 2

b. Construction of a new 230/115 kV Prachin Buri 2 substation

(ii) a. Construction of 230 kV Rayong 2-Chanthaburi transmission lineb. Construction of 115 kV Rayong 3-Rayong 1 transmission linec. Expansion of the 230 kV Rayong 2 substation

(iii) a. Expansion of the 115 kV Sakon Nahon substationb. Construction of 115 kV Nam Pung substation

(iv) Construction of 115 kV Buri Ram-Prakhon Chai transmission line

(v) a. Construction of 115 kV Roi Et-Phayakkhaphum Phisai transmission line

b. Expansion of 115 kV Roi Et-Phayakkhaphum Phisai substationc. Construction of a new 115 kV Phayakkhaphum Phisai substation

(vi) a. Construction of 115 kV Yasothon-Amnat Charoen transmission lineb. Expansion of 115 kV Yasothon substation

(vii) Construction of a new 115 kV Amnat Charoen substation

(viii) a. Construction of 115 kV Roi Et-Phon Thong transmission lineb. Expansion of 115 kV Roi Et- Phon Thong substationc. Construction of a new 115 kV Phon Thong substation

(ix) Expansion of Rajjaprabha substation

(x) Expansion of Phangnga substation

(xi) Expansion of 115 kV Hat Yai 2 substation for 115 kV Hat Yai 2-Songkhlatransmission line

(xii) Expansion of Songkhla substation

(xiii) Expansion of 115 kV Hat Yai 2 substation for 115 kV Hat Yai 2-Pattanitransmission line

(xiv) Construction of a new 115 kV Lang Suan substation

(xv) a. Construction of 115 kV Narathiwat-Sungai Kolok transmission lineb. Expansion of 115 kV Narathiwat substationc. Construction of a new 115 kV Sungai Kolok substation


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Appendix 2 21

(xvi) Expansion of 115 kV Chiang Mai 1 substation

(xvii) Expansion of Mae Moh 3 substation

(xviii) a. Construction of 115 kV Tha Tako-Bang Mun Nak transmission lineb. Expansion of 115 kV Tha Tako-Bang Mun Nak substation

c. Construction of a new 115 kV Bang Mun Nak substation

(xix) a. Construction of 115 kV Chiang Rai-Mae Chan transmission lineb. Expansion of 115 kV Chiang Rai substationc. Construction of a new 115 kV Mae Chan substation

(xx) a. Construction of 115 kV Tha Tako-Bung Sam Phan transmission lineb. Expansion of 115 kV Tha Tako-Bung Sam Phan substationc. Construction of a new 115 kV Bung Sam Phan substation

(xxi) a. Construction of 115 kV Chiang Rai-Thoeng transmission lineb. Construction of a new 115 kV Thoeng substation

C. Transmission System for Mae Moh Units 12 and 13

(i) Construction of 500 kV Sai-Noi-Nong Chok transmission line and associatedsubstations

(ii) Installation of one 200/230 kV interbus transformer rated 450/600/750megavolt-ampere (MVA) at Tha Tako substation

(iii) Installation of two 200/230 kV interbus transformer each rated 450/640/750 MVASai Noi substation (consisting of seven single-phase units inclusive of one spareunit each rated 150/200/250 MVA)

(iv) Installation of two 75 MVA shunt reactors, one at each end of 500 kV Tha Tako-Nong Chok line

D. Environmental Protection Component

Provision of a mobile air quality monitoring system at Mae Moh power plant

7. Two additional contracts for supply of aluminum ingots belonging to EGATs subsequenttransmission expansion plan, TS.9, were included later to utilize the available loan savings.


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22 Appendix 3

IMPLEMENTATION SCHEDULES

A. Loan 1170-THA

1990 1991 1992 1993 1994 1995 1996 1997 1998

Description

Planning StageFeasibility Study

Approval byEGAT Board

Appraisalby NESDB

Approval

by NESDB

FinancingArrangements

Preliminary WorkLand Procurementand Rights-of-Way

Line Route Survey

Plan Profile andLine Design

Substation

Design

Specifications andBidding Documents

Implementationand Construction

Bidding Period

Bid Evaluationand Negotiation

Letter of Intent

Manufacturing andTransportation

ConstructionTransmissionLines

Substations

CommissioningTransmissionLines

Substations

Original Schedule Actual Schedule

EGAT = Electricity Generating Authority of Thailand, NESDB = National Economic SocialDevelopment Board.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q4 Q1 Q2 Q3


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Appendix 3 23

B. Loan 1245-THA

1991 1992 1993 1994 1995 1996 1997 1998Description

Planning StageFeasibility Study

Approval byEGAT Board

Appraisalby NESDB

Approval

by NESDB

FinancingArrangements

Preliminary WorkLand Procurementand Rights-of-Way

Line Route Survey

Plan Profile andLine Design

Substation Design

Specifications andBidding Documents

Implementationand Construction

Bidding Period

Bid Evaluationand Negotiation

Letter of Intent

Manufacturing andTransportation

ConstructionTransmissionLines

Substations

CommissioningTransmissionLines

Substations

Original Schedule Actual Schedule

EGAT = Electricity Generating Authority of Thailand, NESDB = National Economic Social Development Board.

Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4


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24

Appendix4

Item 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Balance Sheets:

Assets

Current assets 15,909 16,277 17,310 30,337 48,280 38,407 46,361 54,690 66,010 65,196

Fixed assets - Net 164,915 189,839 209,288 216,869 220,685 249,698 285,274 308,388 318,661 283,613

Net assets of specific sinking funds 4,437 4,917 5,389 5,948 6,804 8,376 9,128 11,321 12,062 0

Intangible assets 21,773

Other assets 7,799 9,692 13,110 16,150 20,207 19,579 17,682 21,963 37,678 38,749

Total Assets 193,060 220,725 245,097 269,304 295,976 316,060 358,445 396,362 434,411 409,331

Liabilities and Equity

Liabilities

Current liabilities 20,300 24,046 34,007 35,929 45,419 52,924 63,744 66,763 93,592 89,421

Long-term liabilities 99,461 117,237 126,125 131,326 126,731 153,310 164,217 210,560 216,410 183,722

Other liabilities 212 199 179 173 198 404 849 1,377 2,089 2,089

Deferred foreign exchange adjustment (13,631) (14,124) (14,674) (9,570) 0 0 0 0 0 0

Sinking funds 4,437 4,917 5,389 5,948 0 0 0 0 0 0

Total Liabilities 110,779 132,275 151,026 163,806 172,348 206,638 228,810 278,700 312,091 275,232

Equity

Capital contribution (government, surplus, royalties 12,820 12,978 13,123 13,293 13,369 13,505 13,715 13,778 13,824 13,842

Retained earnings 69,461 75,472 80,948 92,205 108,836 111,594 123,997 92,563 96,178 108,486

Specific purpose funds 6,804 8,376 10,603 11,321 12,318 11,771

Foreign exchange losses (5,381) (24,053) (18,680) 0 0 0

Total Equity 82,281 88,450 94,071 105,498 123,628 109,422 129,635 117,662 122,320 134,099

Total Liabilities and Equity 193,060 220,725 245,097 269,304 295,976 316,060 358,445 396,362 434,411 409,331

Income Statements and Performance Ratios:

Electricity generated and purchased (kWh, millions) 56,006 62,180 69,651 78,880 85,920 92,725 92,134 90,414 96,781 103,165

Electricity sales (kWh, millions) 50,771 56,558 63,643 72,780 79,451 85,896 85,598 84,512 90,725 97,412

Electricity sales 61,860 67,798 76,190 95,247 108,835 125,376 146,572 134,335 160,992 185,072

Operating expenses 45,779 51,072 58,400 72,717 80,745 105,716 124,085 149,510 132,168 166,157

Net income (loss) before interest charges 16,923 17,391 18,455 25,854 35,396 21,420 31,422 (13,023) 31,289 26,207

Interest charges 4,584 6,048 6,422 6,894 8,303 8,592 11,112 11,238 11,114 9,984

Net income (loss) 12,339 11,343 12,033 18,960 27,093 12,828 20,310 (24,261) 20,175 16,223

Remittance to Ministry of Finance (paid) 2,614 2,468 4,637 4,099 6,387 8,449 2,000 5,837 7,975 16,620

Net income (loss) as a % of sales 20.0 16.7 15.8 19.9 24.9 10.2 13.9 -18.1 12.5 8.8

Net income (loss) before interest as % of sales 27.4 25.7 24.2 27.1 32.5 17.1 21.4 -9.7 19.4 14.2

Net income (loss) as a % of equity 15.0 12.8 12.8 18.0 21.9 11.7 15.7 -20.6 16.5 12.1

Net income (loss) before interest as % of total assets 8.8 7.9 7.5 9.6 12.0 6.8 8.8 -3.3 7.2 6.4

Debt-equity ratio 1.21:1 1.33:1 1.31:1 1.24:1 1.04:1 1.23:1 1.19:1 1.98:1 1.77:1 1.37:1

Debt service coverage 1.72 1.40 1.53 1.64 1.91 1.05 2.55 1.23 1.07 0.86

Self-financing ratio (%)

- annual 33.5 31.9 35.9 36.5 61.5 14.3 43.6 29.6 23.5 25.9- 3-year average 26.6 32.6 27.3 31.0 50.1 13.9 50.2 27.1 18.6 24.3

kWh = kilowatt-hour.Source: Annual report of the Electricity Generating Authority of Thailand.

FINANCIAL PERFORMANCE OF ELECTRICITY GENERATING AUTHORITY OF THAILAND

(B million)


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Appendix 5 25

FINANCIAL AND ECONOMIC PERFORMANCE OF PROJECTS

1. The financial and economic evaluation of the Third Power Transmission (Sector) Project(PT3) and the Fourth Power Transmission (Sector) Project (PT4) at appraisal was undertaken inthree steps: (i) review of the demand forecast of the Electricity Generating Authority of Thailand(EGAT); (ii) confirmation of each subproject as the least-cost solution to meet the need; and

(iii) determination of the financial internal rate of return (FIRR) and the economic internal rate ofreturn (EIRR) of the total project. Although the same methodology was used, FIRR and EIRRwere estimated separately for the two projects because the appraisal for PT4 was done 1 yearlater than PT3 and data update was necessary.

2. The FIRR estimates included the costs and benefits associated with EGATs powerdevelopment plan as a whole and compared incremental capital and operating costs of a5-year period with EGATs projected incremental revenues. The EIRR estimates included costsand benefits for the power sector as a whole over the same 5-year period.

3. The beneficiaries of the projects were identified as industrial, commercial, and residentialelectricity consumers in the provincial and rural areas of Thailand and customers in Bangkok

and in industrial estates.

4. The power system analyses undertaken by EGAT demonstrated that the projectsconstituted an integral component of EGATs least-cost power development plan. FIRRs orEIRRs for individual project components were not calculated as the separation of suchintegrated power system components is generally arbitrary and of only limited value. It is verydifficult to separate costs and benefits of such components from those of other complementaryinvestments in generation, transmission, and distribution. This is especially the case for a widelyspread transmission investment of the nature of Transmission System Expansion Plan No. 8(TS.8).1

5. The FIRR and EIRR for the projects were therefore estimated at the time of appraisal

covering all the investments expected to take place during the 5-year time-sliceFY1992FY1996. The FIRR was calculated for EGAT alone. The EIRR was calculated for thesector as a whole.

A. Financial Internal Rate of Return

6. The FIRRs calculated at appraisal were 8.5% for PT3 and 11.7% for PT4, exceedingEGATs estimated weighted average cost of capital of about 6%.

7. Since both projects were completed in 1998, it was not necessary for the projectcompletion report (PCR) and the project performance audit report (PPAR) to recalculate theFIRR separately for the two projects. At the time of preparation of the PCR, the FIRR for the two

loans taken together was reevaluated using the same methodology as at appraisal but with thetime-slice extended to cover the period until FY1998 as well as to include all relevantpreparatory expenditures prior to FY1992 and minor completion works until FY2000. The capitalcosts of EGATs overall investment program during this period were lower than appraisalestimates for the reasons explained in the main text. Although fuel costs were considerablyhigher than envisaged at appraisal, this had no significant effect on the FIRR because of the

1Separation would be more readily undertaken if a comprehensive analysis of nodal pricingthe cost of supply toeach node in the networkwere available.


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26 Appendix 5

automatic pass-through of increases in fuel prices on consumer tariffs. The incremental salesattributable to the investment made during the time-slice were higher than projected at appraisalboth because of the extended period of coverage from FY1992 to FY1998 and because of thefaster growth in sales during the 3 years from FY1995 to FY1997. A 25-year period of operationfor the assets was assumed in line with the assumptions during appraisal, and the incrementalsales were valued at EGATs average tariff of B1.5894 per kilowatt-hour for FY1999. The capital

costs for the FIRR included taxes and import duties, but excluded interest during construction.All costs and benefits were valued in 1998 constant prices by applying factors reflecting theofficial rates of inflation. Incremental working capital costs were not material. The relativelyminor operating and fuel costs of the two power stations constructed during the time-slice butsold to EGATs associated generating company toward the end of the period were retainedwithin the existing cost framework.

8. The FIRR was recalculated for the PPAR using the same methodology as in the PCRwith adjustments made with respect to incremental sales in the years FY1996FY2001;matching operation and maintenance costs to capital expenditure; updating the data for sales inthe years FY2000 and FY2001 to actual data; and making consequential changes in fuel costs.The resulting FIRR for the combined projects increased from 13.4% to 16.2%.

B. Economic Internal Rate of Return

9. The EIRRs calculated at the time of appraisal were 15.8% for PT3 and 13.1% for PT4.

10. Since both projects were completed in 1998, it was not necessary for the PCR andPPAR to recalculate EIRR separately for the two projects. The EIRR for the two projects takentogether was reevaluated at the time of preparation of the PCR by employing a methodologysimilar to that used during appraisal. The assessment included the economic costs and benefitsfor the power subsector as a whole, not just for EGAT, since the beneficiaries of the investmentwere the final electricity consumers served by the Metropolitan Electricity Authority (MEA) ofThailand and the Provincial Electricity Authority (PEA) of Thailand as well as by EGAT. The

economic viability of the investment was, therefore, assessed by widening the scope of thecosts and benefits to include (i) on the cost side, all investments undertaken during the yearscovered by the time-slice (FY1992FY1998) by EGAT, MEA, and PEA together with theirassociated operating costs; and (ii) on the benefit side, the benefits accruing to all final retailconsumers.

11. With regard to the costs, an approach similar to timing and asset utilization previouslydescribed for the calculation of the FIRR was also used for the EIRR but taxes and import dutiesand other transfer payments were excluded. Local currency expenditures relating to nontradedgoods were expressed in terms of border-price equivalents by applying a standard conversionfactor of 0.92.

12. The economic benefits arising from the consumption of electricity included thecalculation of the consumer surplus based on the calculated cost of alternative sources ofenergy displaced by the use of electricity. Private diesel generator sets of 40 kilowatt capacitieswere assumed for this purpose.2

2The appraisal of the first loan included a rough estimate of the consumer surplus associated with incremental salesbased on the avoided cost of eff icient kerosene lamps (residential) and diesel generators (commercial andindustrial).


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Appendix 5 27

13. The EIRR was reestimated for the PPAR using the same methodology as in the PCRwith adjustments made with respect to incremental sales in the years FY1996FY2001 andmaking other changes as for the FIRR recalculation. In addition, the calculated value ofconsumer surplus was reduced since the avoided cost calculations at the time of preparation ofthe PCR were considered to be appropriate only in rural areas accounting for about 15% of totalretail sales in the country. The resulting EIRR for the combined projects decreased slightly from

20.9% to 20.2%.

14. The following table summarizes the results obtained from both financial and economicreevaluation. Details of the reevaluation are presented on the following pages.

Table A5.1: Summary of Financial and Economic Reevaluations(%)

Item PT3 PT4

Appraisal PCRa

PPARa

Appraisal PCRa

PPARa

FIRR 8.5 13.4 16.2 11.7 13.4 16.2EIRR 15.8 20.9 20.2 13.1 20.9 20.2

EIRR = economic internal rate of return, FIRR = financial internal rate of return, PCR = project completion report,PPAR = project performance audit report, PT3 = Third Power Transmission (Sector) Project, PT4 = Fourth PowerTransmission (Sector) Project.a

The two projects combined.

C. Sensitivity Analysis

15. Sensitivity analyses were carried out for four different scenarios: (i) increase in operationand maintenance cost; (ii) increase in fuel cost; (iii) decrease in electricity sales; and(iv) decrease in tariff in real terms. Overall, the reestimated FIRR and EIRR are relativelysensitive to changes in electricity sales. EIRR is also sensitive to changes in electricity tariffs.

Table A5.2: Sensitivity Analysis(%)

Item FIRR EIRR

Project Reevaluation (base case) 16.2 20.2

For a 10%Increase in O&M Cost 16.0 20.0Increase in Fuel Cost 13.9 19.5Decrease in Electricity Sales 6.0 15.7Decrease in Real Tariff 11.9 16.1

EIRR = economic internal rate of return, FIRR = financial internal rate of return, O&M = operation and maintenance.


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28 Appendix 5

Table A5.3: Financial Internal Rate of Return on EGAT's PDP Time-Slice FY1992FY1998

Incremental Costs Sales (GWh) Revenues

FY Capital O&M Fuel Total Total Increm'tal B/kWh Increm'tal Net

1989 5,249 5,249 36,611 2.131 (5,249)

1990 29,757 29,757 39,368 1.888 (29,757)

1991 23,040 23,040 44,762 1.768 (23,040)

1992 17,584 1,891 231 19,705 50,772 6,010 1.628 9,782 (9,924)

1993 27,087 2,568 6,116 35,771 56,559 11,797 1.539 18,157 (17,614)

1994 32,466 3,380 12,932 48,778 63,644 18,882 1.489 28,120 (20,658)

1995 23,738 3,973 13,601 41,311 72,780 28,018 1.550 43,416 2,105

1996 21,766 4,517 16,442 42,725 79,451 34,689 1.540 53,410 10,685

1997 21,001 5,042 23,201 49,244 85,898 41,136 1.543 63,487 14,243

1998 3,650 5,133 29,310 38,093 85,395 40,633 1.717 69,755 31,662

1999 4,429 5,244 27,137 36,810 84,517 39,755 1.589 63,187 26,3772000 1,393 5,279 29,048 35,720 90,726 45,964 1.589 73,055 37,335

2001 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2002 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2003 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2004 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2005 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2006 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2007 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2008 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2009 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2010 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2011 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,7282012 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2013 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2014 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2015 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2016 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2017 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2018 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2019 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2020 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

2021 5,279 29,048 34,327 90,726 45,964 1.589 73,055 38,728

211,159

FIRR: 16.2%

FIRR: at Loan 1245-THA appraisal, 11.7% and at PCR, 13.4

EGAT = Electricity Generating Authority of Thailand, FIRR = Financial internal rate of return, GWh = gigawatt-hour,

kWh = kilowatt-hour, O&M = Operation and maintenance, PCR = project completion report, PDP = power development plan.

(B million 1998 Prices)


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EGAT, MEA and PEA

FY Capital O&M Other Total GWh B/kWh Total

1989 5,065 5,0651990 26,210 26,2101991 21,004 21,004 1992 31,430 1,992 962 34,384 5,891 2.232 13,1461993 40,571 7,638 2,228 50,437 12,353 2.172 26,8341994 47,195 14,203 2,771 64,169 18,384 2.086 38,3581995 42,169 15,335 4,815 62,318 27,047 2.112 57,1271996 43,107 18,267 5,936 67,310 33,612 2.072 69,6441997 48,953 24,511 6,297 79,761 39,241 2.046 80,279

1998 33,041 29,790 6,032 68,863 38,465 2.168 83,3851999 4,429 28,048 6,032 38,509 37,534 2.168 81,3662000 1,393 29,706 6,032 37,131 43,135 2.168 93,5082001 29,706 6,032 35,737 43,135 2.168 93,5082002 29,706 6,032 35,737 43,135 2.168 93,5082003 29,706 6,032 35,737 43,135 2.168 93,5082004 29,706 6,032 35,737 43,135 2.168 93,5082005 29,706 6,032 35,737 43,135 2.168 93,5082006 29,706 6,032 35,737 43,135 2.168 93,5082007 29,706 6,032 35,737 43,135 2.168 93,5082008 29,706 6,032 35,737 43,135 2.168 93,5082009 29,706 6,032 35,737 43,135 2.168 93,5082010 29,706 6,032 35,737 43,135 2.168 93,508

2011 29,706 6,032 35,737 43,135 2.168 93,5082012 29,706 6,032 35,737 43,135 2.168 93,5082013 29,706 6,032 35,737 43,135 2.168 93,5082014 29,706 6,032 35,737 43,135 2.168 93,5082015 29,706 6,032 35,737 43,135 2.168 93,5082016 29,706 6,032 35,737 43,135 2.168 93,5082017 29,706 6,032 35,737 43,135 2.168 93,5082018 29,706 6,032 35,737 43,135 2.168 93,5082019 29,706 6,032 35,737 43,135 2.168 93,5082020 29,706 6,032 35,737 43,135 2.168 93,5082021 29,706 6,032 35,737 43,135 2.168 93,508

MEA = Metropolitan Electricity Authority, O&M = operation and maintenance, PEA = Provincial Electricity Authority.

Continued on next page

Table A5.4: Economic Internal Rate of Return

Appendix 5 29

Incremental Costs

(B million 1998 Prices)

344,568

EGAT = Electricity Generating Authority of Thailand, FY = fiscal year, GWh = gigawatt-hour, kWh = kilowatt-hour,

Incremental Revenue


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Consumer Benefits

FY B/kWh Volume

1989 (5,065)1990 (26,210)1991 (21,004)1992 0.23 1,368 (19,870)1993 0.24 2,979 (20,625)1994 0.25 4,670 (21,141)1995 0.25 6,767 1,5751996 0.26 8,611 10,9461997 0.26 10,208 10,726

1998 0.24 9,302 23,82419

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