Document of The World Bank FOR OFFICIAL USE ONLY MICROFICHE COPY Report No. 10644 Report NO. 10644-BD Type: (PCR) MAUPRIVtZ,/ X31709 / T9 069/ OEDD3 PROJECT COMPLETIONREPORT BANGLADESH THIRD TELECOMMUNICATIONS PROJECT (CREDIT1321-BD) MAY 7, 1992 Energy and Infrastructure Operations Division This document hasa restricted distribution and may be used by recipients only in the performance of their official duties. Its contentsmay not otherwisebe disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
FISCAL YEAR (FY)
July 1 - June 30
Currency Equivalents
Rates Used in Appraisal ReportUS$ 1 - Taka 22.0SDR 1 - US$ 1.077
Current RatesUSS 1 - Taka 39.0SDR 1 - US$ 1.36
PRINCIPAL ABBREVIATIQNS AND ACPONYMS USED
DEL - Direct Exchange LineGOB - Government of the People's Republic of BangladeshHF - High FrequencyMOPT - Ministry of Posts and TelecommunicationsOECF - Overseas Economic Cooperation Fund (Japan)PCO - Public Call OfficePCM - Pulse Code ModulationTk - TakaTTB - Bangladesh Telegraph and Telephone BoardUHF - Ultra High FrequencyUNDP - United Nations Development ProgramVHF - Very High Frequency
FOR OFFCIAL USE ONLYTHE WORLD BANK
Washaington. D.C. 20433U.S.A.
Oiyice of DirectoeCcwralOpefatian Evakullim
May17, 1992
MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT
SUBJECT: Project Completion Report on BANGLADESHThird Telecommnunications Proiect (Credit 1321-BD)
Attached, for information, is a copy of a report entitled "ProjectCompletion Report on Bangladesh - Third Telecommunications Project(Credit 1321-BD" prepared by the South Asia Regional Office. No audit of thisproject has been made by the Operations Evaluation Department at this time.
Attachment
I This document has a restricted distribution and may be used by recipients only in the perfonnanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
IThis document has a restricted distribution and may be used by recipients only in the performance|of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
1. 'T&f' Historical Financial Statements and Performance Indicators showingcomparison between appraisal estimates and actuals.
2. Borrower's and TTB's comments on the Project Completion Report.
PROJECT COMPIuETION REPORT
BANGLADESH
THIRD TELECOMMUNICATIONS PROJECT (CREDIT 1321-BD)
Preface
This is the Project Completion Report (PCR) for the ThirdTelecommunications Project in Bangladesh, for which Credit 1321-BD in the amountof SDR 32.5 million was approved on January 25, 1983. In October 1989 IDA'sBoard approved amendment to project scope and reallocation of the IDA credit.The credit was closed on June 30, 1991, three years behind schedule. The lastdisbursement was made on October 16, 1991 and the undisbursed balance of aboutSDR5.6 million was canceled.
The PCR was prepared jointly by the Energy and InfrastructureOperations Division, Department 1, South Asia Region and Industry and FinanceDivision, Technical Department, Asia Region (Preface, Evaluation Summary, PartsI and III), and the Borrower (Part II). Preparation of the PCR is based oninformation in the Staff Appraisal Report (SAR), the Development CreditAgreement, supervision reports and correspondence between IDA and the Borrowerand the Bangladesh Telegraph and Telephone Board (TTB) and internal Bankmemoranda.
- ii -
PROJECT COMPLETION REPORT
THIRD TELECOMMUNICATIONS PROJECT (CREDIT 1321-BD)
EVALUATION SUMMARY
Obiectivee
(i) The project's main objectives were to: (a) improve the quality oftelecommunications services and increase access; (b) improve 'TB's institutionalcapacity; and (c) facilitate the trarafer of know-how and introduction of modernelectronic technology in the nationa.L telecommunications system.
Imnlementation Exoerience
(ii) The project was originally scheduled to be completed by March 31, 1987.It was substantially cc2pleted by December 31, 1991, a delay of over four and ahalf years from the original scheduled completion date. This was mainly due to:
(a) the Government's indecision with regard to the use of bilateral fundsrather than IDA funds for telephone switching equipment, a majorcomponent of the IDA financed project; it took the Government aboutthree years to resolve this issue;
(b) major delays in bid document preparation, bid evaluations and contractawards; on average, it took over one year between receipt of bids andobtaining the Government approval of contract avards, because ofextremely protracted procedures in review and contract award approval;
(c) weakness in TTB's planning and development directorate, especially inits capability for effectively preparing ana coordinating all stepsessential for successful project implementation;
(d) delay in hiring the technical consultants required for the project dueto the Government policy of seeking and using grant funds for thetechnical assistance before approving the use of IDA funds; and
(e) delay in completing the training component with a lag of about threeyears.
(iii) The actual project cost was higher than appraisal estimates due to themuch larger local telephone exchange capacity installed than originally plannedand the provision of related expansion of the complementary network to utilizethe additional capacity.
(iv) The credit was closed on June 30, 1991 after three one-year extensions.Disbursement lagged about three years behind the original schedule.
- iii -
Pgoiect Result.
(v) Even with three one-year extensions of the ̂ redit closing date, theproject objectives, particularly institutional development, were not fully met,especially implementation of the covercial accounting system, improvement ofoperations and maintenance and program planning and implementation.
(vi) Though with delays, the project's physical results were largelyexceeded. Digital switching system, which was originally planned under IDAfunds, was introduced in the nationpl network with bilateral financing. Theswitching capacity added both from bi-lateral and Government funds was muchhigher than originally plo,' ed but it was still below the unmet demand forservice. IDA funds we-re reallocated to finance the complementary networks foreffective utilization of the additional switching capacity. TTB s overallfinancial performance has been satisfactory, and the estimated economic rate ofreturn of 21S is comparable to the appraisal estimate of 242.
Proiect Sustainabilitv
(vii) The modernization of the network achieved by digitalization in thisproject will help to achieve greater efficiency and to improve quality ofservice. The physical investments under the project improved the access totelephone service. The technical assistance and training provided under the IDAand bi-lateral funds ensures that TTB has sufficient operations and maintenancecapacity so that the benefits from the installed facilities will be sustainable.In contrast, the institutional improvements under the project were limited withmost of the institutional objectives not being met and thus TTB is not muchstronger than at the start of the project.
Findints and Lessons Learned
(viii) The main lesson learned from this operation is that for acceleratedfuture sector development, it is important to overcome the following factors:(a) lack of clearly articulated government policy, effective regulation andsupervision; (b) TmB's status as a government board with inadequate autonomy tooperate on a commercial basis; and (c) management constraints compounded byinefficiencies within TTB; and (d) lack of adequate human resource skills. Inthe context of this project IDA initiated a dialogue with the Government and TTBon the need for sector reform to address the above issues. As a result, theGovernment has agreed to review strategic options to ensure sustained andefficient development of this sector; the Government's commitment to adoptfundamental reforms however remains to be seen.
(lX) Other major lessons learned are that the following should have beenaddressed as part of the project preparation:
(a) creation of a Project Implementation Unit (PIU) to ensure timelyimplementation;
(b) coordination with bilateral agencies to avoid duplication oL effortsand optimize resource utilization;
(o) Government'a prior commitment to allccate adequate local funds neededfor project components to be made condition of credit processing;
(d) advance procurement action for all major project cpmponents andappointment of consultants to be made conditions of crediteffectivenessi and
(e) all major project components to be executed on a turnkey basis, withsuppliers being made responsible for supply and installation.
PROJECT COMPLETION REPORT
THIRD TELECOMMUNICATIONS PROJECT (CREDIT 1321-BD)
DART I: Proiact Review from Bank's Perspective
1. Project Identity
Namne :Third Telecommunications ProjectCredit Number : 1321-BDRVP Unit : South AsiaCountry : BangladeshSector Infrastructure
2. Backergund
2.1 The telecommunications rector in Bangladesh is comprised of theBangladesh Telegraph and Telephone Board (TTB), a small telecommunicationsindustry consisting of two companie" owned jointly by the Government (921) andSiemens A.G. of the Federal Republic of Germany (8X) which manufacturetelecommunications equipment and cables, and TTB's "telegraph workshop; whichproduces tubular steel poles and local cable network materials. Thetelecommunications sector is under the -ontrol of the Ministry of Post andTelecommunications (MOPT).
2.2 TTB was established as an independent corporation in 1976 to provideit with greater fiscal and administrative autonomy, but reverted to aGovernment Board within MOPT in 1979. TTB is closely controlled by MOPT andhas little scope for autonomous decision-making. TTB operates all publictelecommunications servic.as within Bangladesh and to other countries, as wellas specialized services such as maritime radio and transmission facilitieu forthe Bangladesh Broadcasting and Television Department (BTV), BangladeshRailways, Civil Aviation and other Government agencies. TTB also licenses allindependent private networks. TTB is managed by a Board of Directorsconsisting of a Chairman and Board Members. The Chairman and the Boardmembers are appointed by the Government. Ail revenue goes directly to theGovernment, which provides TTB with annual budgetary allocations. Theaccounting function is under the control of the Comptroller and AuditorGeneral (CAG) which proved to be a major impediment towards the efforts underthe project to implement a commercial accounting system in TTB. The primaryaccounting system used is still the Government's single entry cash-basedaccounting system.
2.3 Since 1972 IDA has provided assistance for development of thetelecommunications sector in Bangladesh through the financing of threeprojects and through sub-components of other projects, as indicated in Table
-2-
1, Part III. The First and Second Telecommuni.eations Projects (Cre:lt 343-BDand Credit 487-BD, respectively), were taken w_ soon after Bangladesh gainedindependence. The projects funded network expansion by providing linksbetween Dhaka and the regional centers, substantial expansion of the longdistance network along with facilities for nationwlde dialling and semi-automatic handling of international traffic. The Projects resulted in overtwofold increase In telephone exchange capacity and working conne tions, and amodest extension of telephone facilities into rural and semiurban areas.Credit 343-BD became effective on January 17, l973; and was closed on June 30,1980, four and hali years behind schedule. Credit 487-BD became effective onJuly 23, 1974, and was closed on June 30, 1983, also four and half yearsbehind schedule. The Third Telecommunications roject was first identified in1978; appraised in May 1982 and negotiations concluded in December 1982. Theproject was approved by the Board in January 1983.
3. Project Obiectives and DescriRtion
3.1 Project Objectives: The project objectives were based on theGovernment's objectives for the Telecommunications Sector in the Second FiveYear Plan (1981-1985) which were to:
(a) initiate immediate imDrovement of telecommunications services andincrease access to telephone services;
(b) improve TTB's organization and efficiency, particularly for projectplanning and implementation, organization of TTB's finances andcommercial accounts, and for related overseas training of staff; and
(c) introduce modern and appropriate electronic switching system for thenational telecommunications system.
3.2 Prolect Description: The project's major components as defined inthe SAR were as follows:
(a) supply and installation of telephone exchanges for about 16,000lines of electronic switching equipment and pulse code modulation(PCM) transmission systems on existing and new junction cables;
(b) rehabilitation, reconstruction and expansion of local cable networksto enable redistribution and connection of new subscriber lines;
(c) supply and installation of lo., distance transmission facilities,includin,g completion of a 960-channel microwave radio telephonesystem bttween Dhaka and Chittagong, and additional multiplextransmission equipment for about 2,800 channels on existing primaryand secondary links;
(d) supply and installation of 16 base stations for multi-access VHFradio systems to expand telephone service to new rural and isolatedzones, together with 20 UHF radio llnks on tertiary routes, smallexchanges and long distance Public Call Offices (PCO) to provide and
-3-
improve access to telephone service for about 2,600 ruralsubscribers and 90 long distance PCOs;
(e) supply and installation of equipment to enable the existing earthstation to work with the INTELSAT V communications satellite toincrease international telecommunications services;
(f) construction of technical buildings for telephone exchanges andtransmission centers at 24 locations, and provision and installationof air conditioning and ancillary building equipment, testingequipment for local network const-ruction and operation;
(g) construction and equipping of a small regional telecommunicationstraining center at Bogra for about 120 technicil.n trainees; and
(h) provision of (i) technical assistance for program and projectimplementation and for organization of TTB's finances and commercialaccounts; and (ii) overseas training for TTB staff.
4. Project Design and Oroanization
4.1 The project components represented about 50X of TWB's totalinvestment program and about 751 of proposed nzw works including the workswith higl. priority. The project's design and scope were appropriateconsidering: (a) the limited foreign exchange available for investment whichcould meet only a part of the demand for service; and (b) the rueed tointroduce a modern digital switching system in the network.
4.2 The project's technical assistance component which included fundingfor assistance to introduce digital switching siystem; strengthen and improveoperation and maintenance, rural telecommunicauions, frequency management andprogram planning and implementation; and introduce commercial accounts; aswell as overseas training of TTB staff was also appropriate. Due to theimportance of the technical assistance, appointment of all the consultantsunder the project should have been made a condition of credit effectiveness.The technical consultants to strengthen and improve operation and maintenance,rural telecommunications, frequency management and program planning andimplementation were appointed only in 1988 after it was made a condition ofthe credit closing date extension. The delay in appointment of theseconsultants was due to the Government's policy of using IDA funds fortechnical assistance only if grant financing was not available.
4.3 During project implementation, the Government received attractivebi-lateral offers from two sources, Germany and Japan, for supply andinstallation of digital local telephone exchange systems. However, due to thelack of competent technical advice from TTB, the Government could not -take atimely decision with regard to the acceptance of the offer from bi-lateralsources. After a delay of about three years, the Government decided on theJapanese offer for the supply and installation of 30,000 digital localexchange lines and associated junction network in Dlhaka North. This capacity,while still below the unmet demar,d estimated at 50,000 lines, was much higherthan the 16,000 lines provided under the project to introduce digital
-4-
switching technology in Dhaka. With this decision, IDA informed theGoverrment that IDA would not finance the digital local exchange to avoidproliferation of switching systems in one region, which could have led todifficulties in operations and maintenance. Since bi-lateral funds wereprovided primarily for switching equipment, IDA ensured that there wasadequate funding available for complementary network to fully utilize theadditional *-apacity to be installed. Thus, in October 1989, the projectdescription was amended to include expansion of the long-distance trunk andinternational exchanges and esynansion of the long-distance transmissionsystems. The resulting unutilized credit proceeds of SDR 7.5 million (US$ 10million) was reallocated to procure the additional items. The reallocatior.was also necessary to improve the quality of service on both long-distance andinternational networks.
4.4 Due to TTB's limited capabilities in project implementation, IDAshould have insisted that all major project components be carried out underturnkey, with the supplier responsible for supply and installation. Inretrospect, IDA should have also made advance procurement action for all majorproject components a condition for credit effectiveness and required creationof a Project Implementaticn Unit (PIU).
5. Project Implementatio'
5.1 Credit Effectiveness and Project StartuR: The IDA credit wasapproved on January 25, 1983 with a target effectiveness date of June 28,1983. There were four conditions for effectiveness: (a) approval of theproject proforma by Government; (b) issuance of an administrative order forthe transfer of credit proceeds to TTB; (c) effectiveness of Japanese credit;and (d) floating of tenders for 2CZ of the credit amount. There wasconsiderable delay in the fulfillment of conditions, particularly the approvalof the project proforma by the Government and the credit did not becomeeffective until December 1, 1983.
5.2 Implementation Schedule: The project was originally scheduled to becompleted by March 31, 1987. However, most of the project had not evenstarted by this date, and the project was substantially completed only byDecember 31, 1991, a delay of over four and a half years. The main reasonsfor the delays were:
(a) the Government's indecision with regard to the use of bilateralrather than IDA funds for telephone switching equipment which was amajor component of the IDA financed project; it took the Governmentabout three years to resolve this issue;
(b) major delays in bid document preparation, bid evaluations andcontract awards; on average, it took over one year between receiptof bids and obtaining the Government approval of contract awards,because of extremely protracted procedures for review and contractawards approval;
.5-
(c) weakness in TTB's planning and development directorate, especiallyin its capability for effectively preparing and coordinating allsteps essential for project implementation; and
(d) considerable delay in hiring the technical consultants due toGovernment policy of seeking grant fundsl for technical assistancebofore approving the use of IDA funds.
5.3 In view of the slow disbursements and implementation delays, aspecial IDA mission was sent to Dhaka in November 1985 to carryout a detailedreview of the project implementation. The mission reported that the projectimplementation was in a very poor state and recommended that some 40X to 50Xof the unutilized credit proceeds resulting from the substitution of Bank-financed items by bilateral financing be canceled if there were no actions bythe Government to improve sector performance. This state of the project wasbrought to the notice of the GOB and TTB and they were urged to take action to(a) significantly improve TTB's autonomy and management, (b) accelerateprocurement process and implementation, and (c) recruit the remainingtechnical consultants.
5.4 With persistent efforts by IDA, mainly through intensivesuporvision missions, the main problems were sorted out. A change in TTB'sleadership in 1988 also contributed to substantial improvement in projectimplementation. Because of that improvement, a strong management at TTB andthe TTB's concurrence with IDA's recommendation to standardize on a singledigital switching system for the development of the Dhaka network, in October1989, the project description was modified. Credit proceeds were reallocatedwith IDA's Board approval to finance digital switching for the long distanceand international exchanges for optimum utilization of the additional localexchange capacity. During 1989 and 1990 project implementation improvedconsiderably, but slowed considerably toward the end of 1990 due to politicalunrest in the country and a leadership change in TTB. By the closing date ofJune 30, 1991, delivery of goods on all contracts were completed except forthe installation of PCM equipment and network materials which were agreed tobe funded from the Flood Rehabilitation Project (Credit 2048-BD).
5.5 The original closing date was June 30, 1988. The closing date wasextended three times to June 30, 1991. The first extension to June 30, 1989was conditional on TTB appointing a Chief Accounts Officer and technicalconsultants; the second extension to June 30, 1990, was conditional upon TTBpresenting a plan for improving the quality of service. The third and finalextension to June 30, 1991, was conditional on TTB implementing the quality ofservice plan.
5.6 Prgcureent. TTB's overall performance on procurement under theproject was poor. Initial procurement action on the project was encouragingand, as required before the credit effectiveness, bid invitations representing20X of the credit amount had been issued. However, after that there was verylittle procurement progress until 1988. The main reason was the Government'sindecision on the use of bi-lateral funds to substitute IDA funds to procureelectronic digital exchanges (para 4.3), the major project component. The IDAfunds originally allocated for this item were reallocated to provide the
-6-
procurement of complementary equipment to optimize the overall switchingnetwork. Procurement of the earth station equipment originally to be fundedunder the IDA credit was also done under bilateral financing. The procurementof the PCM transmission was delayed considerably and part of its financingultimately transferred to the Flood Rehabilitation Project (Credit 2048-BD).The procurement of distribution network materials, multiplex equipment, toolsand test equipment, cable laying and jointing material as well as the ruralmulti-access VHF systems was carried out satisfactorily, although muchdelayed.
5.7 Other reasons for major delays in the procurement process were: (i)the delays in finalization of bidding documents due to lack of adequatequalified TTB staff; and (ii) delays in bid evaluations and contract awards,On average, it took over one year between receipt of bids and the Government's.approval of contract awards because of the extremely protracted procedures inreview and approval of contract awards.
5.8 Projict Costs. The project's estimated cost at appraisal wasUS$69.7 million with a foreign cost of US$29.0 million. Table 5A in Part IIIdetails the costs of the project as completed. The actual project cost wasUS$174.8 million, with a foreign cost of US$81.3 million. The higher cost wasmainly due to the much larger local telephone exchange capacity financed frombi-lateral source (para 4.3) and Government funds and the provision of relatedexpansion of the complementary network to utilize the additional capacity.
5.9 DLsbursements. The disbursement performance on Credit 1321-BD isgiven in Table 3A, Part III. Disbursements against commitments were madeuntil October 16, 1991, and an outstanding balance of about SDR 5.6 million(equivalent to about US$7.8 million) was canceled. This balance resulted fromthe increase in exchange rate of the SDR to the dollar as compared to the timeof appraisal and the funding of some items under the project under bi-lateralsources and Credit 2048-BD.
5.10 Credit Allocations. The original and revised allocations andactual disbursements for Credit 1321-BD are shown in Part III, Table 3B. Theoriginal allocation was revised in June 1990 after Board approval was obtainedin October 1989 to take into account the increase in expenditures under thetransmission and network materials to be met from the unallocated funds andsavings in other categories. However, as shown by actual disbursements, aboutSDR 5.6 million was canceled after the credit was closed.
6. Project Results
6.1 Project Objectives. Even with three one-year extensions of thecredit closing date, project objectives, particularly the institutionaldevelopment objectives to improve TTB's organization and efficiency forproject implementation, have not been fully realized due to institutional andmanagement weaknesses, cumbersome Government regulations and lack of adequatehuman resources and skills.
6.2 Phvsical Results. There were delays in completion of projectcomponents as indicated in Part III, Table 4. The project's physical targets
-7-
however were largely exceeded as indicated in Part III, Table 6A due to theincreased size of the project during execution.
6.3 Technical Assistance. The project included an important technicalassistance component for project planning and implementation support and TTB'sinstitutional building. The project's results in technical assistance weremixed. Despite the fact that consultants were employed early in the Projectfor the implementation of commercial accounts in TTB, their recommendationshave not been implemented. The main reason is that the accounting function isstill under the control of the Comptroller and Auditor General (CAG) and hasyet to be transferred to TTB as agreed by GOB in July 1980. Technicalconsultants assisted satisfactorily in inducting TTB in the digital switchingtechnology. However, there were considerable delays in appointing thetechnical consultants to assist TTB to improve its operation and maintenance,project planning and implementation, and their recommendations were notconsidered until early 1990.
6.4 The overseas training of TTB staff as provided in the project wascompleted, although the process was delayed. The construction andinstallation of the Regional Telecommunication Training Center in Bogra wascompleted on June 30, 1990.
6.5 Financial Performance: Annex 1 compares TTB's actual financialstatements and key performance indicators with appraisal estimates, for FY83-87 and provides actual financial data for FY88-90. The financial performanceof TTB during the FY83-87 compared well with the appraisal estimates, withprofits and returns higher than appraisal estimates. TTB continued togenerate enough profits to comply with the covenanted return of 15% onrevalued assets during FY88-90. During FY83-90 revenue per main lineincreased on average by about 13% per annum, whereas the operating cost permain line increased on average by only about 7% per annum. This has beenmainly due to tariff increases, growth in traffic and reduction in staffingratio. TTB's financial position remained sound during FY83-90.
6.6 Economic Rate of Return: Due to the close relationship between theproject and the other investments in the total investment program, any attemptat separating the operating costs and benefits of the project components fromTTB's overall program would be arbitrary. Therefore, during appraisal theinternal rate of return for the total program was estimated. Similarly, theinternal economic rate of return for the program as executed over the 1984-90period has been estimated for comparison. The underlying assumptions used arelisted in Part III Table 6 C. The project's actual economic rate of return isestimated to be about 21%, compared with the estimated return of 24% at thetime of appraisal. Even with delays in project implementation the rate ofreturn was comparable to appraisal estimates due to tariff adjustments, growthin traffic and improvement in staffing efficiency.
6.7 Institutional Impact: The project did not provide for any majorinstitutional reorganization following the constitution of TTB under OrdinanceNo. XII/79. It provided, however, specific measures to improve TTB'sinstitutional capacity in the fields of project planning and implementation,operations and maintenance, financial accounts and management information
through technical assistance. The results of these measures were poor. Therewas very little improvement in TTB's project planning and implementation asevidenced by the poor performance on this project, mainly due to the inherentweakness in TTB's skills and leadership apart from Government's cumbersomeprocedures for approval of project items and was compounded by delays inappointment of consultants. Similarly, in the finance and accounts areas, TTBhas yet to obtain the needed real fiscal and administrative autonomy. Thefact that TTB's accounts are still kept on a cash basis as part of GOB'saccounts demonstrates the need to address seriously the issue of Governmert'spolicy and extent of control over this sector.
7. Project SustAinabilWS
7.1 The modernization of the network achieved by digitalization in thisproject will help to achieve greater efficiency and to improve quality ofservice. The physical investments under the project improved the access totelephone services. The technical assistance and training provided under theIDA and bi-lateral funds ensures that TTB has sufficient operations andmaintenance capacity so that the benefits from the installed facilities willbe sustainable. In contrast, the institutional improvements under the projectwere limited with most of the institutional objectives not being met and thusTTB is not much stronger than at the start of the project.
8. IDA's Performance
8.1 Overall IDA performance was satisfactory and IDA's supervisioneffort for this project was appropriate. IDA has been particularly effectivein advising TTB on the broad thrust of its policy and steps towardsdigitalization of Its switching network. In particular, IDA's advice on themakeup, design and standardization of the switching system and avoidingproliferation of different systems and insistence on training of staff in thenew technology for the greater Dhaka area has been very effective. IDA hasalso, when necessary, given forthright advice on actions needed for speedingup the slow implementation and the need for TTB to have greater effectiveautonomy to deal with its responsibility of providing telecommunicationservices. IDA has shown flexibility in its agreement to modify the projectcomponents and for the reallocation required in the credit. IDA has beenextending a very constructive and effective help in procurement and financialissues.
8.2 The main lesson learned from this operation is that for acceleratedfuture sector development, it is important to overcome the following factors:(a) lack of clearly articulated government policy and effective regulation andsupervision; (b) TTB's status as a government board with inadequate autonomyto operate on a commercial basis; (c) management constraints andinefficiencies within TTB; and (d) lack of adequate human resource skills.IDA has, in the context of this project, initiated a dialogue with the GOB andTTB the need for basic sector reform to address the above issues. As aresult, GOB has agreed to review strategic options to ensure sustained andefficient development of this sector; the Gov.rnment's commitment to adoptfundamental reforms remains to be seen.
.9-
8.3 Other major lessons are that the following should have beenaddressed as part of project preparation:
(a) creation of a Project Implementation Unit (PIU) to ensure timelyimplementation;
(b) coordination with bilateral agencies, to avoid duplication ofefforts and to optimize resource utilization. However, the Bankensured that there was no proliferation of telephone switchingsystems whic.a could have led to difficulties in operation andmaintenance, and provide financing for the interface equipment toenable optimum use;
(c) Government's prior commitment to allocate adequate local fundsneeded for project components to be made condition of creditprocessing;
(d) advance procurement action for all major project components andappointment of consultants to be made conditions of crediteffectiveness; and
(e) all major project components to be executed on a turnkey basis,with suppliers being made responsible for supply and installation.
9. Borrower's Performance
9.1 Initial start-up of the Project was satisfactory. However, for asubstantial period from 1984 until 1988, TTB's planning and project controlwas sluggish, resulting in inordinate delays in the pace of procurement,construction and consultant recruitment. GOB's delayed decision to usebilateral financing for telephone switching equipment also contributedsignificantly to the implementation delays. After mid-1988, TTB's performanceimproved with a change in its leadership. Several measures were also taken toimprove the quality of service, and project implementation improved by 1989.In addition, MOPT and TTB also prepared proposals for improvement in theperformance of this sector such as creation of the BangladeshTelecommunication Corporation (to replace TTB) and introduction of the privatesector in rural and international services. However, due to lack of a clearpolicy framework and restructuring plan, these proposals weax not approved bythe Cabinet. The Government has recently agreed to appoint consultants toreview the strategic options available for restructuring the sector to improveefficiency and expand services to meet the demand.
10. Prject Relationship
10.1 IDA's relationship with Government and TTB during the project wasgood.
11. Consulting Services
11.1 TTB employed technical consultants to prepare the design andspecifications for the introduction of electronic digital telephone switching
-10-
system. TTB also employed consultants to assist in the strengthening andimprovement of TTB's management and administration on (a) maintenance andoperations; (b) rural telecommunications; (c) frequency management; and (d)planning. The consultant's report with recommendations in the above areas wasconsidered in early 1990 by TTB and broadly accepted; implementation iscurrently in various stages. The work of the technical consultants wassatisfactory. TIB also employed a financial consultant who assisted in thepreparation of xs8 accounts on a commercial basis and in establishing afinancial management information system. The basic recommendation of theconsultant was the need to transfer the accounting function from the CAG toTTB; this recommendation has not been implemented.
12. Proiect Documentation and Data
12.1 The Staff Appraisal Report and Development Credit Agreementprovided the framework for monitoring project implementation. The periodicalprogress reports of TTB provided information between supervision missions.The data provided by TTB in the reports and during missions was satisfactory.
-11-
PROJECT COMPLETION REPORT
BANGALDESH
THIRD TELECOMMUNICATION PROJECT (1321-BD)
PART II: BORROWER'S PERSPECTIVE OF THE DESIGN, IMPLEMENTATIONAND DEVELOPMENT IMPACT OF THE PROJECT
(Prepared by the Borrower)
1. The Third Telecommunication Project (Credit No. 1321-BD) financed bythe World Bank was approved in 1982 and Development Credit Agreement (DCA) wassigned between the Government of Bangladesh and the World Bank on March 28,1983. The total credit amount was SDR 26.927 million was disbursed and theremaining 5.572 was canceled. Original closing date of the credit was June30, 1988 but it had been extended thrice and the credit closed on June 30,1991. The following were the main components of the project:
(a) Electronic exchange and urban junction facilities in Dhaka;
(b) Manual exchanges (rehabilitation and reuse of manual exchange andswitchboards);
(c) T ocal cable networks replacement and expansion;
(d) Subscriber installations;
(e) Long distance and transmission system (domestic and international);
(f) Long distance rural telephone;
(g) Building, training center and miscellaneous equipment;
(h) Technical assistance in training.
2. The components of the project as envisaged in the Staff AppraisalReport (SAR) and DCA have been maintained.
The total disbursement of SDR 26.927 million were made until October31, 1991 in the following components:
-12-
Name of Component Name of Project
(1) Procurement of N.W.D. ITX and Nation wide Trunk Dialling ininterface equipment. Bangladesh.
(2) Procurement of microwave and MUX Expansion of Microwave System inequipment. Bangladesh.
(3) Cable joints and jointingmaterials.
(4) Procurement of P.C.M. equipment. Expansion of Local Telephone by60,000 Lines.
(5) Procurement of testing and Construction of two TTCs.training equipment for two TTCs(Bogra).
(6) Construction of building and Establishment ofprocurement of equipment for Telecommunication Staff CollegeTelecommunication Staff College (Joydevpur).(Joydevpur). l
(7) Construction of exchange Construction of Telecommunicationbuilding (35 places) and Buildings in Bangladesh.telegraph building (19 places)earth filling, side development
___- _ boundary wall etc.
(8) Construction of expansion of big Expansion of Greater Dhakaexchanges at Dhaka, (Moghbazar, Telephone System (Phase I).Chawkbazar, Faridabad, Uttara,Savar), procurement of fivelifts for Dhaka and Chittagong.
(9) Construction of exchange Expansion of Local Telephone bybuilding at Dhaka, Bogra Sharsha 60,000 Lines.(Jessore) Chandpur, Cox's Bazar,Kalurghat, Satkhira & Rangamati.
(10) Construction of technical Establishment of two TTCs inbuilding, academic building, Bangladesh.hostel building ane otherrelated works, boundary wall,approach road, deep tube well,power supply and furniture, etc.
(11) Installation of multiplexing Expansion of Long Distanceequipment in 28 radio stations, Telecommunication System.purchase of TDM equipment at 8radio stations, procurement of40 number S+3DX, procurement ofradio MUX for UHF equipment,establishment of VHF base PCOs.
-13-
(12) Replacement rehabilitation of Expansion of Local Telephone bynetwork by laying new cable and 60,000 Lines and Expansion ofjunction cable at Dhaka and Greater Dhaka Telecommunicationother places of Bangladesh. System (Phase I).
(13) Installation of auto exchanges Small Auto Exchange in Ruralin various piaces of Bangladesh Areas.replacing manual ones.
(14) Service charge of Appointment of Technicaltelecommunication consultants Consultants.(DETECON). .-
(15) Training of Officers in Ireland. Nationwide Trunk Dialling.
3. IDA Credit No. 1321-BD in reality, played a significant role towardrehabilitation and development of telecommunication facilities in Bangladesh.Many donor countries, as has been observed, do not finance the whole cost ofthe development project. They usually provide the cost of machineries,equipments and services, but not the cost of physical infrastructure that isneeded for successful implementaticn of the project. On the other hand IDAproject, supported project with financing of machineries and equipment andcivil works. This has helped successful completion of the project. Intelecommunication sector because of its nature of services, efficientoperation is only possible when a project is totally completed. IDAtherefore, played an important role enhancing telecommunication services inthe country.
Further IDA's credit for procurement of goods and services was notrestricted to any particular country or countries. The procurement process isbased on international competitive bidding, which ensures competitive priceand quality of equipment and services. This hrs helped to reduce the overallcosts of development projects. Through Credf'. No. 1321-BD many equipments andmachineries, have been procured and in general, prices were very competitiveand reasonable.
4. The implementation of the project was delayed, mainly, because thecredit did not have readily corresponding counterpart fund in the AnnualDevelopment budget. The credit fund was available both for new capital worksas well as for rehabilitating existing network. While corresponding localsupporting funds could be arranged through Annual Development budget for thenew capital type works, there has been problem in utilizing these funds forrehabilitation works, as IDA credit could provide foreign exchange component;only when counterpart fund is available. Thus, the credit provided onlyforeign exchange component and not additional resources for the rehabilitationworks.
5. IDA did not discourage procurement of local manufactured equipmentand services. This helps growth and sustenance of local industry. In theThird Telecommunication Project IDA financed procurement of exchange equipmentfrom Telephone Shilpha Sangstha (TSS). This industry is required to berehabilitated and modernized.
-14-
6. Bangladesh T&T Board recently procured cable joints and jointingmaterials under IDA credit. Use of these materials will improve quality ofservice as well as create additional employment. Use of these equipment willincrease skill of the local technicians.
7. The IDA's coordination both on physical and financial progress fromIDA's headquarters as well as by the local mission havs been very useful forproject implementation. Close IDA's monitoring helped on executing agenciesin minimizing or avoiding delay in implementation as they tried to solveadministrative, financial or other difficulty that the agencies may face.Also the mission's visit to Bangladesh once or twice a year provided valuablesource of spot-decision on important matters.
8. Expert services provided through IDA's credit produced comprehensivereport as per their terms of reference. The report contained valuablerecommendations which were useful to improve efficiency and technical andmanagement know-how of BTTB. However, the recommendations were not adequatelyfollowed due to procedural bottleneck that was beyond the agencies control andsome time lack of financial allocation.
Before any such consultancy service is undertaken, proper provision andselection of counterpart personnel needs to be assured. The counterpartpersonnel's remuneration also may be decided in a reasonable matner and ifpossible, be funded from IDA's allocation as a part of the said consultancyservice.
9. A good number of BTTB personnel were trained in technical mattersabroad. Such training improved the efficiency of the personnel of BTTB.Short technical training of mid-level and top-level officers in IDA's creditappears to be a costly proposition. Training in local institution throughforeign trainers will result in more number of trained personnel. In thatcase trainers may have better ideas of equipment in use, level and extent oftraining required. It will be better to provide financial support in respectof improvement of training management, training expansion, import-of trainingaids, preparation of training hand out and literature, books, computer, etc.,in the existing training institutions.
10. IDA's assistance should be extended to increase in-house capabilityfor preparation of technicai specification and tender document. Preparationof technical specifications by in-house staff will enable us to meet queriesfrom bidders on technical, financial and local aspects of the tender.Further, it will be easier for BTTB personnel to conduct technical andfinancial evaluation. This will help reducing procurement delay.
11. During the credit validity of Credit 1321-BD Continuous Reporting ofProject Status (CROPS) and Monthly Disbursement Summary were regularlyreceived. These reflected implementation status of the different works anddisbursement position of the credit amount, which otherwise, helped BTTB toadopt measures necessary to execute works in a prescribed manner and withinthe time schedule as far as it was practicable.
-15-
12. Through "ionthly Disbursement Summary" however, only thedisbursement position under description such as "EXSMAT PCM TRNS Al" DISTRNETWORK A2" ete., are known. This does not readily show the expenditureposition of individual work under execution or executed. Since under the samehead of description, a good number of works may be at different stages ofexecution and at different payment position, the officer at the World Bankdesk (at recipient and) finds it difficult to co-relate or reconcile WorldBank disbursement position with that borrower. It would have been convenientif in the summary statement under a common description, disbursement positionof individual work as sub-head are mentioned if not regularly but at leastonce a year. This may result in better account reconciliation. Credit periodcontinues for two to four years or more. Periodical reconciliation mayhowever save enormous file work.
-16-
1. W T8D CBRAbs
Year of Credit amountCredit Title Purpose Approval in USS mill Status
1. Credit 339-BD Cocstal Telecommmication Sub- 1972 - $25 million Zg Project complet-area Rehabilitation project of the main coastal ad by end ofProject area rehabilitation and 1979
cyclone protection projectwas to help telecommunica-tion Infrastructure damagedby cyclone and providewarning of cyclones andprotection
2. Credit 339-BD Reconstruc- A part of this program 1972 - $50 miltiolon& Coptleted intion Imports Program credit was for telecommuni- 1975credit cat ions goods to recon-
struct the Bangladesh Econ-Cfly.
3. Credit 339-BD-First Tale- To install 4 long distance 1972 - $7.3 million Coptleted Inco fnications Project microwave systems Dacca- 1980
Sylhet, Bogra, Nymensinghand Kushtfa-Rajshahi
4. Credit 487-BD Sacond Expansion of local tele- 1974 - $20.0 million 1983Telecoummications Pro- phone exchangs end longJect distance system and con-
suitant services for com-mercial accounting.
S. Credit 2048 Third Flood To restore priority Infra- 1989 - USS10.5 mil- In progress forRehabilitatfin (Emergen- structure including tele- lion telecomnmuicat-cy) Project communications damaged by ions
flooding.
/a An amount of USS6.2 mililon was allocated for the telecommunications subproject.
/b The telecommunications component was $6.4 milion.
La There were three closing date extensions and the final closing date of06/30/91 was agreed on 04/10/91.
a The project was Eubstantially completed by December 31, 1991.
-18-
3 A CRDIT DISBURSEMENTSAccumulated Disbursements
(in US$ thousands)
IDA FY and sLx-month Actual asperiod Actual Estimate X of appraisal estimates
January - June 1983 - 1,500 0
July - December 1983 - 6,500 0January - June 1984 - 11,500 0
July - December 1984 199 16,500 1January - June 1985 4,232 21,500 20
July - December 1985 11,318 26,500 43January - June 1986 14,135 31,500 45
t987July - December 1986 14,268 35,500 40January - June 1987 15,131 43
July - December 1987 15,658 44January - June 1988 15,875 45
July - December 1988 18,383 52January - June 1989 19,320 53
July - December 1989 20,950 54January - June 1990 21,670 61
1991July - December 1990 26,630 75January - June 1991 30,030 76
July - December 1991: 32,216 La
A Credit 1321-BD was disbursed until October 16, 1991 against commitments made.SDR 5,572,923.12 (equivalent US$7,797,689) remaining undisbursed was canceled.
-19-
3B: CREDIT ALLOCATIONAmounts in SDR
Original Revised FinalCategory allocation allocation allocation
(a) Foreign consultants 460,000 2,295,000 1,418,992(b) Local consultants 190,000
4. Unallocate 6,090,000 240,000
Total 32.500.000 32.5.00.000 26,927,077/a
JA An amount of SDR 5,572,923 remaining undisbursed by October 16, 1991 wascanceled.
-20-
4. COMPLEXION DATES
Name of Component Date of Completion
(1) Procurement of N.W.D. ITX and June 1991interface equipment. l
(2) Procurement of microwave and WUX September & November 1990equipment. l
(3) Cable joints and Jointing June 15, 1991materials.
(4)_ Pi-ocurement of P.C.M. equipment. June 1991
(5) Procurement of testing and June 6, 1991training equipment for two TTCs(Bogra). l
(6) Construction of building and June 6, 1990procurement of equipment forTelecommunication Staff College(Joydevpur).
(7) Construction of exchange June 6, 1990building (35 places) andtelegraph building (19 places)earth filling, side developmentboundary wall etc.
(8) Construction of expansion of big August 8, 1990exchanges at Dhaka, (Moghbazar, December 12, 1998Chawkbazar, Faridabad, Uttara,Savar), procurement of fivelifts for Dhaka and Chittagong.
(9) Construction of exchange April 4, 1989building at Dhaka, Bogra Sharsha(Jessore) Chandpur, Cox's Bazar,Kalurghat, Satkhira & Rangamati.
(10) Construction of technical June 30, 1990building, academic building,hostel building and otherrelated works, boundary wall,approach road, deep tube well,power supply and furniture, etc.
(11) Installation of multiplexing June 1986equipment in 28 radio stations,purchase of TDM equipment at 8radio stations, procurement of40 number S+3DX, procurement ofradio MUX for dHF equipment,establishment of VHF base PCOs.
-21-
Replacement rehabilitation of June 30, 1991network by laying new cable andjunction cable at Dhaka andother places of Bangladesh.
(13) Installation of auto exchanges June 1990in varLous places of Bangladeshreplacing manual ones.
(14) Service charge of June 30, 1991telecommunication consultants(DETECON). of_OfLc_s_i_Ireand_Febuar_26_199
(15) Training of Officers in Ireland. February 26, 1992
-22-
5. PROJECT COSTS AND FINANCING
.SA: PROJECT COSTS(in US$ million)
Appraisal Estimate Actual _1/Multi access radio systems Foreign Local Total Foreign Local Total
Local Swltching NetworksElectronic exchanges 6.90 5.19 12.19 54.51 49.25 103.76
Local Cable NetworksCivil works and outsideplant material - 8.41 8.41 - 8.60 8.60
PCM junction 2.30 1.63 3.93 2.30 1.63 3.93
Long Distance NetworkMicrowave link 3.60 2.13 5.73 9.77 17.20 26.97Multiplex equipment 1.40 0.85 2.25 3.15 2.68 5.83
Rural Telephone NetworkMulti-access radio systems 4.80 3.74 8.54 2.08 1.96 4.04and PCOS
UHF links 2.70 2.00 4.70 4.05 3.53 7.58
Internation,l NetworksEarth station equipment 0.70 0.40 1.10 0.29 0.87 1.16
Buildings and SuRDort
Technical buildings - 4.00 4.00 - 3.84 3.84
Building equipment, toolsand operational aid 0.80 0.33 1.13 2.16 0.92 3.08
Training center equipments 0.40 1.07 1.47 0.84 2.84 3.68Technical assistance and
training 0.70 0.29 0.99 2.13 0.23 2.36
Total Base Cost 24.30 30.04 54.34 - - -
Price contingencies &JZQ 10.63 15.33 - -
Project Cost 29.00 40.67 69.67 81.28 93.55 174.83
1,U The size of the actual Project was much larger than appraised. Muchlarger local exchange capacity was installed through funding from bi-lateralsource and Government own funds. In addition, complementary t.otwork were alsoexpanded to utilize the additional capacity.
-23-
5B. PROJECT FINANCING(in US$ million)
AUgraisal Estimate Actual 1/Source Local Foreign Total Local Foreign Total
I/ The size of the actual Project was much larger than appraised.
6. PROJECT RESULTS
A. Direct Benefits
Actual atAppraisal estimate
84/85 June 309 1991
Exchange capacity 185,700 248,505
DELs in service 139,400 216,327
Telex lines in service 880 2,650
B. STUDIES
Studies Status Impact of Studies
None
-24-
C. Economic Impact
Appraisal ActualEstimate (At Final Development)
EconomicRate of Return 24 21
UnderlyingAssumDtions
1. Due to close relationship between the project and non-projectinvestments during the period, any attempt at separation of coets and benefitswould be arbitrary. Consequently, the rate of return calculation is made onthe total program during the p6eiod.
2. The benefit period of the program extends from 1986 to 2006, when onaverage, the equipment provided under the program is expected to havesubstantially completed its useful life.
3. Capital cost streams are based on the programs as actually implementedfrom 1984 to 1990.
4. The operating benefits and costs attributed to the program are based onthe benefits and costs fo. additional telephone and telex connections whichwere commissioned during 1986 through 1990 period.
5. From 1991 on,.the benefits and operating costs are constant.
6. No residual value of fixed assets are taken into account as the presentvalue of those in real terms would be minimal.
7. All 'bsfits and costs streams have been expressed in 1984 prices.
-25-
7. Status of Covenants
Agreement Brief description of covenant Status
3.03(b) Financial and technical con- There were extensive delayssultants required under the in employment of consultants,project shall be employed not especially the technicallater than June 30, 1983. consultants. Both the finan-
cial and technical consult-ants have submitted theirrecommendations to improvethe financial and operationand maintenance systems.Implementation of the recom-mendations by TTB has beenprogressing slowly.
4.01(a) TTB to develop and maintain Primary forms of accountingrecords in accordance with con- system is still Governmentsistently maintained appropriate single entry system. Commer-commercial accounting practices. cial accounting system is yet
to be fully implemented.
4.02(b) Audited FY 89/90 accounts Cu1~e Audits of financial accountsDecember 31, 1990. continues to be late. Audi-
ted FY89/90 accounts werereceived in June 1991.
4.05(b) TTB to produce, commencing with In compliance.FY83/84 and each year thereafter,an annual return of not less than15Z on revalued assets.
-26-
BANGLADESH
THIRD TELECOSUUNICATIONS PROJECT (CREDIT 1321-RD)
PROJECT CONPLETION REPORT
8. Kul=aj
Stage of No of SW SpeciaLizstionL Performenceproject cycle Month/year persons in field represented rsting TMe of probLem
1st Identification 03/1978 2 Eng, Fin A
Preappraisal 08/1978 2 Eng, Fin A
let Apprafsal /1978 2 Eng, Fin A
2nd AppraIsal 05/29/1981 2 Eng, Fin A
ReappraIsal 04/05/1982 2 Eng, Fin A
SuDeryfoionSupervision 1b 03/1983 1 1 Fin ASupervisfon 2 06/1983 2 1.5 Eng 1, Fin A 1 1Supervision 3 03/1984 2 1 Fin A, 2 1Supervision 4 05/1984 1 1 Eng ISupervisfon 5 08/1985 1 1 Eng 4 Project Nanage-
ment weak. Theconsuttants nothired. Pro-cureent pro-Ject implemen-tetion slow.
Suervision 6 11/1985 2 1 Econ 1, Proc Sp 4 Acdhc nce Lb to1 Fin covernnts
usantisfactory.
SupervisIon 7 08/1986 2 1.5 Eng 1, Fin A 4Supervision 8 09/1987 2 2 Eng 1, Fin A 4Supervision 9 03/1988 2 1.5 Eng 1, Fin A 4supervision 10 08/1989 3 2 Eng 2, Ffn A-1 2Supervision 11 05/1990 3 1.5 Eng 2, Fin A 4Supervision 12 09/1990 3 2 Eng 1, Fin A-1i
LegS-1 2Supervision 13 06/1991 3 2 Eng 1, Fin A-1,
LegS-I 2
Li Abbrsvietions: Eng - Engineer; Fin A Financial Analyst; Econ - Economist; Pror Sp - ProcurementSpeceflist; Leog Sp - Legl Specialist.
ik This was an initial Financial Supervision misson.
Tear Ending Jure 30 -----1982-83--- -----1983-84---- -----1984-85---- ---- 1985-86---- -19B6-87--1987-88--1988-89-*1989-90-AppraisaL Actual Appraisal Actual Appraisal Actual Appraisal Actual Actual Actual Actual Aetual.......................................................................................................................................
Appratsal Actual Appralial Actual Appraisal Actual Appraisal Actual Actul Actual Actual ActaL...... .......... _...................................... ................................... ....................................................................... .................. _........... ........ .. .........Assets
tear Ending June 30 -----1982-83---- -----1983-864--- ---- 1984-85---- -----1985-86---- -1986-87--1987-88--1988-89--1989-90-Apprafsal Actual Appraisal Actual Appraisal Actual Appraisal Actual Actual Actual Actul Actual...................................................
Third Telecomminication Project(credit no. 1321-3D).
PZease refer to IDA's letter dated 27 February,
1992 on the above mentioned subject. A copy of the comments
on the Project completio" Report regarding the Third Tele-
co5 menication profect credit no. 1321-SD is fnclosed here-
with.
You are, therefore, requested to take necessary
action in this regard.
Enc7 t as stated above Yours sincerely,
(13egum MekeusaZma4)
Mr. Reazml IslamProgramme officer,The World Bank Resident Missionin sangladesh,3A, Paribagh,Dhaka.
01'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~Annex 2TO% ~~~~~Page/ 2 of 3
Commentof,.::inistry of 'P' o r ' TelecomunicationProject (CH 1321 -. BD)
Reference fromDraft PCI.
1. Item (b) This problom needle to be nadressed annd roculurnl adjust-lPnge - IV, ment is required1 to be marde by all parties to improveEvaluation the timing to procoss a case.Summary.
2. Ibem - C BTTO Planninn Coll particulRrly needs 2 bo up gradedPage - IV with more knowlodgeahle expertise thatpavailable within a
BTTB. In some high-tech aroam short tirm consultants rwith full time counterpart qtaff may be required forspecific projocts. Such consultants shotild be'made uvai1.
-ahle undergrant 2, failing which Il) assistance can betaken. More modern Technotogy in project manar:ement(computeraidel) should be implemented.
3. Item - DPage-VI It is a general Government policy to nvail coiititants oJ'
on grants. But efrortq should ho mado to avail tilhmprior to use of IDA Fund. As ahexample this is beingdone for the pro;osed Satellite Enrth Station unridr XKJapanese grant with the aQsistance of IDA.1fihnt isperhaps ne&ded in well co-ordinated and timely action byboth the Donor and the Government.
Prolect Sustainability: The Ministry of 1.TkT has alrendy adl1r,s.;ed thio; !S9uePage(V) & (VI) and some ir.tittitional changces are bein- taken to improve
the overall performance of this sector.
Item - 3(a) PILU Perhap, in nocesmnry but implementiltinn i't bePage (VI) difficult nt this mt~,e bolt efrort.a witl be m:deI La this
end.
Item-3(c) In some casem thic is a valid problem in renpect of time'-ly implementation or proiect^. l!owevor, if r&r could useits own sur,-lni onrning the problem could have beeneased further.
Item-31d) GOB doea ndt agree that there sliould be consultant for(Page - VI) each pro,jec' implementation unless the pro.ject'fof very
sopihisticated nature. In-country experts should beutilised as f as preferable.
Item-3 (e) GCBI does not agree to this point. IDA assistance projecti(Page-VI) se'ould aim to develop local expertise rather than to
depend on foreign consultants. N o project should begiven on tupnkey basis where the capability of installa-.tion of equipments is available within BTTB or in thecountry. Only top supervision and durlnn acceptance test--inL. for few sophisticated technology, foreign expertisemay be requirod.
iarn 2.1. Shares of "Government and Siemenas should be 92%o and 8%(P-l)(Part-l) vice 82% anal 18$
Annex 2- 32- Pate 3 of 332 -
4. Para-4.3 of Regarding avoidance of proliferation of switchingpart-It systems in onieregion this may not hc ptos¢4hl.o to bepages-3-4. avoided in the interest of a pragm.tic appnoach in
view of world trend of competition in genoral aindfor a resource starved developing country ratiheran LDC toolcing for multiple funding sources'on grant/softloan basis in particular. In fact4 the presentbilateral appronch d tinder OMCF fund for sou#prnDhaka does not guarantoe that a different systemmanufacturer will not he awarded 4a the contract.
5. "ara 6.7, It has been experienced that projedts implementedPnge 7 of through bilateral finances could be implemented morePart-I. or less within the time schedule, under the same
environment in ITTB, whereas substantial delay eoccurred only in case of IDA financed project* Thusthe observation of World Bank needs to be criticallyreviewed. A study may be undertaken to asses theactilt cost of IDA assisted project VIS -a -VISthat of a bitateb.Lproject beeaus# of theinstitutional delays in inplementing IDA ao*#edprojects.
6. Para 8.3 (d) Some agreed methodology need to be chalked out.Page-9
7. Part-11, Page-II Original closing date of t1,e credit wasPara-I from June$ 30, 1087 but it has been extended thriceline 5. ( This sentence is to be re-written ).
