ReportNo. 327a-PNG FILE COPY Papua New Guinea Appraisal of the Second PowerProject (Electricity Commission of Papua New Guinea) May 15, 1974 Asia ProjectsDepartment Public Utilities Division Not for Public Use Document of the International Bankfor Reconstruclion and Development InternationalDevelopment Association Thisreport wasprepared for official use only by the Bank Group. IL maynot he published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Report No. 327a-PNG FILE COPYPapua New GuineaAppraisal of the Second Power Project(Electricity Commission of Papua New Guinea)
May 15, 1974
Asia Projects DepartmentPublic Utilities Division
Not for Public Use
Document of the International Bank for Reconstruclion and DevelopmentInternational Development Association
This report was prepared for official use only by the Bank Group. IL may not he published,quoted or cited without Bank Group authorization. The Bank Group does not accept responsibilityfor the accuracy or completeness of the report.
kW - KilowattMW - Megawatt (1,000 kW)kWh - Kilowatt hourMWh - Megawatt hour (1,000 kWh)GWh a Gigawatt hour (1 million kWh)kV = Kilo volt (1,000 volts)
cro rs and Abbreviations
Commonwealth - Commonwealth of AustraliaTerritory - Territory of Papua and New GuineaAdministration - Administration of Papua and New GuineaPNG - Papua New GuineaELCOM - Electricity CommissionCONWORKS - Commonwealth Department of WorksOffshore - OverseasOnshore - Domestic
ELCOM's Financial Year - Year beginning July 1 and ending June 30
(Unless otherwise stated, the year quotedin the text refers to the financial year.)
PAPUA NEW GUINEA
PAPUA NEW GUINEA ELECTRICITY COMMISSION
APPRAISAL - SECOND POWER PROJECT
TABLE OF CONTENTS
Page No.
SUMMARY AND CONCLUSIONS ..... ................... i-ii
I. INTRODUCTION ........ ................................ 1
II. THE ECONOMY AND THE POWER SECTOR .................... 2
The Country and its Economy ......... 2Energy Resources ............. .............. ... 3The Power Sector ....................... .. ..... 4
III. THE BORROWER AND THE BENEFICIARY .............. ...... 5
Elcom's Management and Organisation .. .......... 5Existing Facilities ..... ....................... 6Future Development Plans ...................... 7
IV. THE POWER MARKET . .................................. 7
V. THE PROJECT ............................... ....... 8
In-Service Training ..... .............. 8Distribution Expansion ..... .................... 10Foreign Exchange Shortfall of Loan 737-PNG ..... 10Procurement and Disbursements ................ .. 11Construction Schedule ..... ..................... 11Consulting Services ............ . ...........e. 11
VI. JUSTIFICATION OF THE PROJECT ..... ................... 11
In-Service Training ............ .. .............. 12Distribution Expansion ..... .................... 12Foreign Exchange Shortfall of Loan 737 PNG ..... 12
This report was prepared by Messrs. E. A. Minnig (Power Engineer) andS. S. Scales (Financial Analyst).
-2-
Page No.
VII. FINANCIAL ASPECTS ...... ............................. 13
Past and Present Earnings ...................... 13Present Financial Position ..... ................ 13Sinking Fund .......... 1 4......... 14Insurance ........... ...................... 15Audit .......................................... 15Proposed Financial Plan ...................... . 15Future Financial Position ..... ................. 16
VIII. AGREEMENTS REACHED AND RECOMMENDATION .... ........... 18
LIST OF ANNEXES
1.1 Diagram Economic Data - Chart (8026)1.2 Gross National Product (Current Prices)2. Diagram Organisation Chart - Chart (8027)3. Power Plant as Installed June 30, 19734. Overhead Line Statistics at June 30, 19735. Supply Point Transformer Statistics at June 30, 19736. Distribution Substation Statistics at June 30, 19737. Future Development Plans8.1 Generation, Sales and Maximum Demand 1964-19738.2 Generation, Sales and Maximum Demand 1974-19809. Consumer Statistics 1966-197210.1 Sales and Revenue per Tariff Classifications 1964-196810.2 Sales and Revenue per Tariff Classifications 1969-197210.3 Sales and Revenue per Tariff Classifications 1973-197610.4 Sales and Revenue per Tariff Classifications 1977-198011. Review of Economic Trends and Prospects in the Area to be served
by Upper Ramu Hydroelectric Project12.1 Diagram - Actual & Forecast Maximum Demand (MW) (Chart 8025)12.2 Diagram - Actual & Forecast Generation (GWH) (Chart 8028)12.3 Diagram - Actual & Forecast Sales of Energy (Chart 8030)13. Distribution Expansion Program 1975-197814. Upper Ramu No 1 - Hydro Plant Cost Estimates15 Diagram - Staff and Consumers (Chart 8029)16. Training17. Schedule of Estimated Disbursements18. Schedule of Monthly Tariffs19. Condensed Balance Sheets for 1970 thru 198020. Statement of Outstanding Debt - Repayment of Principal - 1973-198021. Source of Application of Funds for 1973 thru 198022. Construction Expenditure for 1973 thru 198023. Income Statements for 1970 thru 198024. Estimated Interest for 1973 thru 1980
MAP
PAPUA NEW GUINEA
PAPUA NEW GUINEA ELECTRICITY COMMISSION
SECOND POWER PROJECT
SUMMARY AND CONCLUSIONS
i. This report appraises the Second Power Project for Papua NewGuinea and aims at helping PNG to strengthen and localize ELCOM. The projectconsists of two main items: a) technical assistance for ELCOM's in-servicetraining program during the period 1974-79, and b) expansion of ELCOM'sdistribution network in 13 different centers. The project will also includefinancing to cover the cost over-run under the first power project (Loan737-PNG) which is attributable to exchange rate adjustments. The estimatedtotal cost of the project is US$17.25 million equivalent. A loan of US$10.8million is proposed.
ii. The loan was requested by the Commonwealth of Australia (Guarantor)on behalf of the Government of Papua New Guinea (Borrower) and the Papua NewGuinea Electricity Commission (ELCOM) (Beneficiary).
iii. ELCOM was established in July 1963 as a statutory corporation, withadequate powers to conduct its affairs in accordance with sound publicutility practices. It was responsible to the Commonwealth Minister of ExternalTerritories through the Administrator, but the Minister and the Administratorhave de facto transferred their powers relating to ELCOM to the cabinet ofthe newly formed PNG Government, and ELCOM now reports to the PNG Ministerof Mines and Energy. PNG achieved self-government on December 1, 1973. Itis expected to become independent in December this year.
iv. The country's economy is based essentially on primary production.GNP growth declined from a previous annual rate of 11% between 1969 and 1971to 2.1% in 1972. ELCOM's power market, being susceptible to changing anduncertain economic conditions, is projected to grow at a reduced rate of 8.6%as against 21% forecast in 1970 for the period 1969 through 1978. The factorscontributing to the recession are the transient political situation and theuncertainties of the future. Because of this ELCOM has eliminated all add-itional generation expansion projects from its 1974-1980 investment program,since available capacity will meet forecast demand. Its expansion program,therefore, includes only the Upper Ramu No. 1 Hydro Project under construction(financed by Loan 737-PNG) and modest distribution facilities.
v. ELCOM has a good record for reliable supply and service. Althoughthe recession is affecting its growth, ELCOM's forecast financial positionwould continue to be satisfactory with an operating ratio varying between 59%and 65%; a net debt/equity ratio improving from 76/24 in 1976 to 73/27 in1980; and internally generated funds after debt service financing 35% ofcapital requirements during 1974/79.
- ii -
vi. ELCOM presently supplies power to 10 centers of population. Ithas a generating capacity of 70 MW consisting of 37.6 MW of hydroelectricplant and 32.4 MW of diesel. ELCOM is also responsible for the operation andmaintenarnce of generating and distribution facilities at 142 centers ownedby the PIG Government with a total capacity of 8.9 MW. Three of these centerssituated in the area of the Upper Ramu hydroelectric project will be trans-ferred to ELCOM in 1976 and incorporated into the system.
vii. ELCOM's management is able, and its staff is competent. It wasthe first organisation in PNG to appreciate the need to train local staffand it has had a training program in operation since 1964. At June 30, 1973,its operating staff totalled 1,247 of which 264 were expatriates. Inaddition it had 365 local apprentices, trainees and cadets under training.The degree of indigenisation (excluding apprentices, etc.) is now 79% asagainst 64% in 1970, with a target set for 1980 of about 98%. By thenmost of the 25 expatriates still considered essential would be in the moresenior positions.
viii. The proposed project would be a suitable basis for a Bank loanof US$10.8 million equivalent for a ?eriod of 20 years including a 5 yeargrace period.
PAPUA NEW GUINEA
PAPUA NEW GUINEA ELECTRICITY COMMISSION
SECOND POWER PROJECT
I. INTRODUCTION
1.01 The Government of the Commonwealth of Australia on behalf of theGovernment of Papua New Guinea and the Papua New Guinea Electricity Commis-sion (ELCOM) has requested a Bank loan of US$10.8 million equivalent tofinance the off shore cost element of salaries of expatriates exclusivelyengaged in training local staff (44%) modest distribution investments (21%);and the foreign exchange short-fall on Loan 737-PNG resulting from recentcurrency adjustments (35%). The principal element of the proposed loanwould support a soundly conceived training program which would otherwisehave to be curtailed since no alternative financing is in sight.
1.02 Under the UN Trusteeship Agreement (New Guinea) and the Common-wealth's Papua New Guinea Act, the Commonwealth was responsible for govern-ing and developing the Territory up to December 1, 1973. An Administrator,appointed by the Commonwealth Governor-General, administered the Territorywith the assistance of an Executive Council (AEC). Originally self-government was anticipated in the mid 1970's and independence in the 1980's.The Commonwealth has accelerated the time-table, and self-government wasachieved on December 1, 1973. Papua New Guinea is expected to become indepen-dent in December this year. A legislature has been elected, a Governmentformed, and the functions of the AEC have been taken over by the Cabinet.
1.03 ELCOM was established as a Statutory Corporation on July 1, 1963,when it took over the functions of the Administration's Electrical Under-taking Branch. On establishment, nine separate electric supply systems,each serving a center of population, were transferred to ELCOM. Thepresent number of 10 will increase to 13 when the Supply Systems at Mt.Hagen, Kainantu and Kundiawa are transferred to ELCOM in 1976 on the com-missioning of the Upper Ramu No. 1 Hydroelectric Scheme (Loan 737-PNG).ELCOM also operates and maintains generation and distribution facilitiesat 142 other centers owned by the Government, with funds provided bythe Government. In time these would be transferred to ELCOM, if transferdoes not impose any financial burden on ELCOM.
1.04 As a result of the present transient political situation,business and industrial activity has appreciably slowed down throughoutthe country. Current power market growth is predicted at an average annualgrowth rate of only about 8.6% over 1974-1980 as against 21% forecast in1970 over 1969-1978. Actual results in 1973 were about 25% below the 1970forecast. Business is waiting for the situation to stabilize and for thenew Government to clarify and publish its economic policies. This climateof uncertainty, the declared policy of the new Government to replaceexpatriates with indigenes, and the announcement of its intent to issue its
- 2 -
own currency, is expected to result in the departure of a great number of thenon-indigenous population.
1.05 Progress on the Upper Ramu No. 1 Hydroelectric Project financedthrough Loan 737-PNG is satisfactory. The present estimated A$ cost of theproject still corresponds to the original estimate althougn it exceeds theoriginal est mated US$ costs by 27% at today's exchange rates. Thiscorresponds to a shortfail in the foreign currency elenent financed byLoan 737-PNG of about US$3.8 million equivalent or about 16%. The projectis still economically justified even with the changed economic situation(paras 6.01 - 6.06).
1.06 This report was prepared by Messrs E. A. Minnig (Power Engineer)and S. S. Scales (Financial Analyst) from information prepared by ELCOM,economic data provided by the Territory Office of Programming and Co-ordination,and information obtained during a supervision mission in June/July, 1973.
II. THE ECOhsOMY AND THE POWER SECTOR
The Country and its Economy
2.01 Papua New Guinea extends over 800,000 sq miles of tropical seasnorth of Australia. The eastern half of New Guinea and the three largestislands - New Britain, New Ireland and Bougainville - comprise most of theland surface of 180,000 sq miles (about 475,000 km2 ). It is an area ofunusual diversity with extremely rugged mountain ranges, wide valleys, largeriver systems, extensive jungles, and vast swamps.
2.02 Population in mid-1972 was estimated at about 2.58 million, ofwhich 2% or about 50,000 are non-indigenous. The rate of growth of theindigenous population between 1969 and 1972 has been 2.7% p.a., butgrowth of the non-indigenous population, because of changing economicconditions and forthcoming independence, changed from net increases of2,026 in 1969; 4,478 in 1970; and 3,024 in 1971, to a net decrease of 5,286in 1972 accelerating to a decrease of 5,485 for the first six months of1973. Population density averages 14.3/sq mile (5.4/sq km) but ranges from1.5 to 60 according to district.
2.03 At the time of appraisal of Loan 737-PNG in 1970, the GrossMonetized Sector Product (GMSP) was forecast to increase on average at10% for 1969-1973 compared to an average growth rate of 12% achieved since1966. In 1970, however, self-government was not expected before 1975and independence not before the early 1980's. Papua New Guinea has nowachieved self-government and it is expected to become independent at the endof this year. Because of the transient political situation there is ageneral slowdown of business and industrial activity, since prospectiveinvestors found that they had to deal with two governments, one in Canberraand one in Port Moresby. Together w-ith this, but also because of the uncertaintyof the PNG Government's future plans, plus the Government's intention to
drastically reduce the number of expatriate public servants and toissue a PNG currency, an increasing exodus of expatriates is anticipated.
2.04 Faced with these uncertainties GMSP projections are continuallybeing revised. The Bank's May 1972 Economic Mission forecast a growthrate of 9% p.a. from 1973 to 1978; a revised forecast prepared in September,1972, by the Territory Office of Programming and Coordination estimated a
growth rate of 6.7% p.a. for the same period.
2.05 Papua New Guinea has a dual economy; a large indigenous subsistencesector based on traditional agriculture (41% of GNP) and a modern monetizedsector which includes export oriented plantation agriculture, Governmentoperations and services and lately, mining (58.0% of GNP). GNP whichhad grown at the rate of 11.1% per anntm between 1969 and 1971 declinedto a rate of 2.1% in 1972. Per capita GNP rose from US$217 in 1969 toUS$295 in 1971 and then receded to US$293 in 1972. Since mid-1971 theeconomy has in fact, been passing through a recession, and real GNP declinedby 4%. This slowdown is attributable to the political factors already mentioned,a general decline in world market prices of PNG's major export crops (copra,cocoa, rubber, palm oil and coffee) and to a sharp drop of investment outlaysafter the completion of the Bougainville Copper Mine. However, export priceshave started to recover, and when the political situation has stabilized, longterm prospects for PNG's economic development will be more favorable; oneindication is the obvious interest shown by other countries and industries inthe development of the country's natural resources (hydro and copper).
2.06 The recent economic recession is reflected in ELCOM's energysales which have fallen substantially below predictions. Historic growthrates during the period 1964 to 1970 were 25.4% for the Upper Ramu ServiceArea (to be served by the project financed under Loan 737-PNG) and 19.2% forits other service areas. In 1970 these were forecast to continue at thehigh rates of 25.8% and 18.9% respectively during the period 1970/78.However, the latest forecast (June 1973) projects growth rates of only8.6% for the period 1974/80. In 1973 per capita consumption of electricityamounted to 322 kWh, which includes the energy produced by BougainvilleCopper Ltd. Excluding this enclave project, per capita consumption wouldhave been about 100 kWh. Further details on the economy and the powermarket are given in Annex 1.
Energy Resources
2.07 Papua New Guinea has a vast hydro potential totalling some 11,000MW at sites each capable of producing 300 MW or more. Recent investi-gations have concentrated on two rivers (i) Purari River flowing into the Gulf,
of Papua (potential 7,200 MW, 6,100 MW firm; and about 53,000 GWh per annum) and
(ii) Musa River flowing into Oro Bay in NE Papua (potential of 400 MW and
about 2,800 GWh per annum). Japan and Australia have shown an interest indeveloping and utilizing some of this energy potential to support power
intensive industry, mainly metallurgical, but it is unlikely that any devel-
opments will materialize before the late 1980's. The changing world energysituation may accelerate the development of PNG's hydro resources.
- 4 -
2.08 There are no known economic deposits of coal. Prospects for oiland gas of commercial value are considered favorable following an off-shoregas strike in the Gulf of Papua and further prospecting is under way. Fuelimports in 1972 totalled about A$ 12.8 million, of which ELCOM's share forelectricity generation was about 5.7%.
Tae Power Sector
2.09 Virtually all power facilities were destroyed during World War II.The Commonwealth Department of Works (COMWORKS) was made respDonsible forreconstruction, and in 1957 the Territory Administration accepted thisresponsibility by creating the Electrical Undertaking Branch. On July 1, 1963,ELCOM was established and assumed full responsibility for nine centers.ELCOM was also required to provide services at 128 other centers owned bythe Administration.
2.10 The centers presently served by ELCOM and their population(1970) are: Port Moresby (56,200); Lae (24,300); Rabaul (20,300); Madang(11,200); Goroka (7,900): Samari (2,200); Wewax (8,945); Kavieng (2,140);Kokopo (537). In October 1972, Kieta-Arawa (755), which is the headquartersfor the Bougainville Copper Ltd., was added to ELCOM's system, and on com-pletion of the Upper Ramu Hydroelectric Scheme (45 MW) in mid 1976, Kundiawa(1,590); Kainantu (1,200); and Mt. Hagen (3,315) will be transferred toELCOM by the Government. The locations of these centers together with theAdministration centers are shown on the attached map.
2.11 Outside the centers served by ELCOM (now 10) and by the Administra-tion (now 142), private generating equipment is generally installed bymissions and plantations. The largest private generating facility is ownedby Bougainville Copper Ltd. (135 MW in three oil-fired steam units), whichalso sells power to ELCOM for distribution in Kieta-Arawa. A small hydroplant with an installed capacity of 5.5 MW is owned by Placer Development Ltd.near Baiune to the south of Lae. This company, previously engaged in goldmining operations, has virtually ceased mining activities and now sells abouttwo-thirds of its output to ELCOM for distribution in Lae with which it isconnected by a 66kV transmission line. !
2.12 As of June 30, 1973, the installed capacity and generation in1973 in Papua New Guinea were as follows:
Installed Capacity (MW) Annual Generation % of TotalHydro Thermal Total GWh Generation
Of all power generated in the Territory in 19;?3, ELCOM's share amounted toabout 24%.
III. THE BORROWER AND THE BENEFICIARY
3.01 The Borrower would be the Government of Papua New Guinea, theGuarantor Australia, and the Beneficiary ELCOM. A Guarantee Agreement wouldbe entered into between the Bank and Australia, a Loan Agreement between theBank and the Government of PNG, and a Project Agreement between the Bank andELCOM.
3.02 Various Ordinances governing the use of water for agriculture,forestry, mining, conservation, water supply and power generation containconflicts which neither the Commonwealth nor the Territory Administrationwanted to change while the Territory was moving rapidly towards self govern-ment as they considered the changes should be made by the newly electedGovernment. In the interim, and as a condition of Loan 737-PNG ELCOM wasprovided with all the rights to use land and water necessary for itsoperations.
3.03 To safeguard ELCOM's interests a default condition was negotiatedunder Loan 737-PNG whereby the Bank could suspend or cancel the loan shouldlegislation be enacted which would materially and adversely affect ELCOM.This default condition has been incorporated in the loan documents of theproposed loan.
ELCOM's Management and Organisation
3.04 ELCOM has an able management, and its staff is competent in bothoperation and planning. It is governed by a full-time Commissioner andfive part-time Associate Cormissioners who were appointed by the CommonwealthMinister of External Territories. With self-government, the Commissionerswill in future be appointed by the PNG Cabinet on the recommendation of thePNG Minister of Mines and Energy. Senior staff are appointed by the Commis-sioners, and their terms and conditions of employment are determined by theMinister. However, in the present transitionary period, ELCOM is requiredto consult with the Public Service Board (PSB) before renewing expatriatecontracts. Although empowered to process ELCOM's proposals the PSB submitsthem to the Cabinet for decision because of implications on other statutoryauthorities. As contracts expire and the terms of new contracts remainundecided the Commission risks losing staff essential to operations, andbecause of this, it was agreed during appraisal that the Cabinet wouldconsider ELCOM's proposals expeditiously. As a result ELCCM was permitted toextend existing contracts by two years. Nevertheless, ELCOM lost 56 ex-patriates during the past 6 months and has been unable to recruit replacements.Recruitment efforts for operational staff are currently underway in Malaysiaand the Philippines. Contracts to be offered to new staff will, however, besubject to the Public Service Board's guidelines.
- 6 -
3.05 Wnen the last loan was considered in 1971, assurances wereobtained that ELCOM would consult with the Bank before making appointmentsto the positions of General Manager, k.ss stant General Manager (Finance andAdministration) and Assistant General Manager (Engineering). This covenanthas been repeated.
3.06 At June 30, 1970, ELCOM's staff totalled 1,556 of which 388 wereexpatriates, 677 local staff and 491 iocal apprentices, trainees and cadets.At June 30, .973, staff totalled 1,612 of which 264 were expatriates, 983locals, ana 365 local apprentices, trainees and cadets. Of the local staff221 were seconded by ELCOM to administration owned Centers. The degree ofindigenisation (excluding apprentices, trainees and cadets) is now 79% asagainst 64% in 1970, with a target set for 1980 of about 98%. By then,only about 25 expatriates are expected to remain. Annex 2 shows ELCOM'spresent organisation chart.
3.07 ELCOM was the first organisation in Papua New Guinea to appreciatethe need to train local staff. It built and staffed its own TrainingSchool and provided courses in power plant operation for mechanics, electri-cians, linesmen and also for clerical staff. It is currently sponsoring 97high school graduates as cadets to the University of Papua New Guinea (PortMoresby) and to the Technical University of Papua New Guinea (Lae) to receiveeducation as lawyers, economists, civil, mechanical, and electrical engineers,and as surveyors. At the peak in 1972, 517 locals were under training. Thecost of training reached a high of A$ 670,000 in 1970 (US$750,000 at thenprevailing exchange rates) representing nearly 15% of revenues. Duringnegotiations of Loan 737-PNG the Administration agreed to proviile ELCOMwith at least A$ 90,000 annually up to 1978 towards the cost of training,because after completion of their courses some trainees find employment inthe private sector, whilst others are seconded to Administration ownedCenters. This covenant in the Loan Agreement of Loan 737-PNG has beenrepeated.
3.08 ELCOM's foresight in training has given it a good start towardsimplementing the government's policy of accelerated indigenisation.
Existing Facilities
3.09 To serve its present centers, which are not interconnected becauseof the transmission distance involved, ELCOM had available at June 30, 1973a total of 70 MW of generating capacity of which 38 MW was hydro and 32 MWdiesel. Annex 3 lists the individual power plants with their installedcapacity. Annex 4 lists ELCOM's transmission and distribution facilitiesand Annex 5 provides supply point transformer statistics whilst Annex 6gives distribution substation statistics.
3.10 Existing facilities are adequate, and because of the rapid dropin the growth rate, generating facilities, especially in Port Moresby, areat the moment excessive. Plant is generally well maintained and serviceinterruptions are few and not related to design defects or poor operations.
-7-
Future Development Plans
3.11 Investigations are proceeding on a continual basis to ensure thatwhen the need arises, new generat:ing facilities can be built economicallyand with the least possible delay. ELCOM's consultants, CommonwealthDepartment of Works (COMWORKS), are currently investigating several alter-native hydro sites which could supplement the Upper Ramu Project shouldELCOM be called upon to serve the demand of potential mining developments.Further details of ELCOM's future development strategy are given in Annex 7.
IV. THE POWER MARKET
4.01 The tables below showing ELCOM's average annual growth rates and loadforecasts demonstrate the changed market situation. Detailed information isgiven in Annexes 8 thru 12.
Table I
1970 Forecast 1970 Forecast Current ForecastActual 1973 for 1973 for 1978 for 1978
4.02 The current sales growth projections average 8.5% per year for theperiod 1974/80 as against 20.9% forecast in 1970 for 1969/78. Actual resultsin 1973 were about 25% below the 1970 forecast. In view of this, ELCOM haseliminated all generation expansion projects from its 1974/80 investmentprogram since available capacity would meet forecast demand.
4.03 The loads associated with certain projects presently under dis-cussion have not been included in the forecasts because of uncertaintywhether they will be constructed before 1980. Inclusion of such loadscould increase ELCOM's demand by 3 MW (8%) in 1974 and about 10 KM (17%)by 1976. These could be served by the Upper Ramu Project financed throughLoan 737-PNG, investments would be minimal, consisting mainly of extensionsto existing transmission facilities presently under construction.
- 8-
4.04 When ELCOM was established in 1963, it was serving 7,410 consumers,and arnual consumption per consumer was about 6,270 kWh. At June 30, 1973,the number of consumers served had increased to 22,853 and consumptionaveraged 9,050 kWh/consumer. Thus the average annual growth rate of con-sumers was 13.2Z for the period and of consumption per consumer about 4.2%.By 1980 it is estimated that ELCOM would serve about 33,700 consumersincluding consumers at Mt. Hagen, Kundiawa and Kainantu centers presentlyserved by the Administration but scheduled for takeover by ELCOM on December31, 1975. Average consumption per consumer in 1980 is estimated at 11,800kWh, which is high reflecting the low degree of electrification (only about7% of the population presently benefit from the use of electricity). Thusthe forecast average annual growth rate of consumers from 1973 to 1980 isonly 5.8% (despite the takeover of the three additional centers by ELCOM) andof consumption per consumer about 3.8%.
4.05 In 1973, of total sales of 204.8 Gwh, 26.5% were for domestic purposes;56.2% for commercial and small industrial enterprises, 17.0% for largerindustries, and about 0.3% for public lighting. In 1980 with forecast salesof 356.8 Gwh, 29% would be for domestic purposes; 55.6% for commercial andsmall industrial enterprises; 15% for larger industries; and about 0.4% forpublic lighting. The share of domestic load thus increases whilst that ofcommercial and industrial enterprises decreases reflecting again the changedpolitical and economic situation.
V. THE PROJECT
5.01 The proposed project aims at helping PNG to strengthen andlocalize ELCOM and consists of two main items: a) technical assistancefor ELCCt's in-service training program during the period 1974-79, andb) expansion of ELCoM's distribution network. The project would alsoinclude financing to cover the cost over-run under the first powerproject (Loan 737-PNG) which is attributable to exchange rate adjustments.
5.02 In-Service Training. ELCOM's objective is to accelerate in-servicetraining of local staff to permit an early and rapid reduction of expatriates.To achieve this two alternatives are possible: (i) the counterpart system,whereby a particular establishment function would be filled by a local andan expatriate. The duties of the expatriate, in addition to his functionalduties, would be the training of his local counterpart: and (ii) the transferof full responsibility to the local with one expatriate supervising andproviding in-service training to more than one local. The first alternativeis considered not only costly but ineffective, because locals are generallyreluctant to press for responsibility and expatriates seldom take the timeor the patience to properly train their local counterparts. The more effectivetheir training, the sooner they lose their jobs. The second alternativehas the advantage of clearly establishing the function and duties of theexpatriate trainer, his term of employment is clearly defined, and the moreeffective he is, the greater the possibility of contract renewal. The effecton the local is also positive, because of increased motivation and pride.ELCOM rightly selected the second alternative; its foresight in having an
- 9 -
intensive training effort underway allows it to do so. The diagram attachedas Annex 15 shows its past manpower development, its forecast manpowerrequirements, and its targets for indigenisation. Annex 16 describes indetail its Training Center, the type of training provided and its futuretraining plans.
5.03 ELCOM's plans for in-service training and the utilisation ofexpatriate staff can be summarized as follows,
Locals ReceivingExpatriate Staff In-Service Training
Operational Trainers Total Technical Commercial Total
5.04 The in-service training envisaged would cover a period of fiveyears. The program provides for 385 trainer man years and 1038 traineeman years involving a total of 528 locals. Thus, by 1980 about 1/3 of localstaff will have benefitted from this in-service training program. The ratioof trainers to locals would be about 1:3. Promising local tradesmen alreadytrained or in training would be selected for in-service training as super-visors (Senior Artisans, Senior Power Station Operators, Technicians).Qualified technical and commercial officers would be promoted to more seniorpositions. Graduate cadets (engineers, accountants) would be given immediateresponsibility at smaller centers. The necessary supervision and trainingwould be provided by selected expatriates relieved of operational responsibilityand administratively attached to the Education and Training Branch. Tosupplement and complement this effort it will be essential for ELCOM tocontinue its classroom training program. Accordingly ELCOM has agreed that(a) the Hohola Training School will continue to operate to meet ELCOM'srequirements; and (b) any subsequent appointment to the position of Principalof the Hohola Training School be made only after prior consultation with theBank. (The present Principal is well qualified, dedicated, and competent).
5.05 The technical assistance program will cost about US$7.8 millionof which the Bank would finance the off-shore element of expatriates'salaries (US$4.7 million) which is basically the difference between the ex-patriate and local salary of equivalent grade and represents about 60% ofthe gross salary. It also corresponds to gross salaries including benefitsreduced by expected expenditures in PNG for subsistence, housing, localtaxes, etc. Since training provides long-term benefits, costs can reasonably
- 10 -
be termed long-term capital investments and depreciated over a reasonableperiod (10 years is proposed). The costs associated with this programtotal A$ 5.26 million or about $5000/trainee tian year, a not insignificantamount, but justified in view of the subsequetit benefits to be realized.
5.06 Distribution Expansion. The modest distribution program coveringthe 13 new centers ELCOM will be servicing after 1975 is sufficient to meetELCOM's needs through 1979. The program consists of 150 distribution trans-formers totalling about 15 MVA; 47 km of 11 kV and 22 kV primary distributionlines; 119 km of secondary distribution lines; about 8000 service connections;about 900 street lights; and about 9,000 meters (Annex 13 gives furtherdetails). The total cost of the distribution program is estimated atUS$5.7 million of which the Bank would finance US$2.3 million.
5.07 Foreign Exchange Shortfall of Loan 737-PNG. The Upper RamuHydroelectric Scheme is presently under construction in the Highlands byELCOM. The project consists of a run-of-the-river underground power stationwith an initial installed capacity of 4.5 MW. Included in the project are320 miles of transmission lines linking centers previously served by smalldiesel units. At the beginning of 1976 the project will provide electricityfor the favorably endowed Highland regions and constitute a major elementin ELCOM's plan to establish a national transmission grid. Constructionof the project is proceeding without any major difficulties. The projectfinanced by Loan 737-PNG (US$23.2 million equivalent) is still within theoriginal cost estimate as expressed in current A$ or in US$ using pre-March1971 exchange rates. However, foreign exchange requirements expressed inUS$ at current exchange rates are now estimated at US$27.1 millionequivalent (Annex 14), an increase of about US$3.9 million of which aboutUS$3.8 million is directly attributable to exchange rate variations. Theexisting loan agreement contains the usual covenant requiring the Administra-tion/Government to cover project cost overruns but the level of assistanceto be given by Australia will be limited and diversion of funds tothe Ramu Project would mean a shortfall elsewhere. Because the shortfallis not attributable to cost overruns but to other circumstances notforeseen (exchange variations) at the time of appraisal, the inclusion ofUS$3.8 million in the proposed loan to cover the shortfall would bereasonable.
- itb -
5.08 The table below suimrarizes the cost of the proposed project:
A$ '000 USV0O0OOn shore Off shore Total On shore Off shore Total
I. TechnicalAssistance 2,104 3,156 5,260 3,111 4,700 7,811
III. Ramu ProjectShortfall - 2 535 2,535 - 3,753 3,753
Total 4.361 7,276 11,637 6,450 10,800 17,250
The physical contingency of 10% on estimated distribution costs is ampleto allow for increased quantities and unestimated items. The price increasecontingency is based on an escalation of about 5% p.a. for local costs andfor the cost of imported materials. Engineering and overhead represents about20% of total costs, which given the large area served by ELCOM, is not un-reasonable. The proposed Bank loan would cover the off shore cost componentof the project amounting to US$10.8 million equivalent. If there are anysavings in the project, such savings would be cancelled.
5.09 Procurement and Disbursements. All procurement, except services,would be on the basis of international competitive bidding in accordancewith the Bank's Guidelines dated April 1972. Disbursements for technicalassistance would be on a reimbursement basis equal to 60% of expenditure byELCOM on gross salary and benefits of expatriate trainer staff and wouldinclude retroactive financing for payments made after January 1, 1974equivalent to about US$300,000. Disbursement of the distribution elementwould be made only for the actual c.i.f. cost of equipment and materialsand for the off shore cost of services. Disbursements of the foreign ex-change shortfall of Loan 737-PNG would be made against contracts alreadyapproved and awarded.
5.10 Construction Schedule. Construction of the distribution systemextension would be carried out in 1975 to 1979 by ELCOM's own force, whichis capable of carrying out work of this nature.
5.11 Consulting Services. No consultants are required for the dis-tribution element of the project. ELCOM staff is capable and adequatelytrained for design, construction and supervision of transmission anddistribution work.
- 12 -
VI. JUSTIFICATION OF THE PROJECT
6.01 As the project contains three separate and distinct items, an
overall economic evaluation has not been attempted. Each item is dealt withseparately.
In-Service Training
6.02 Accelerated indigenization is a government policy introduced toenable the local population to play a greater part in the economy and to
encourage greater self reliance, independent of any financial advantageswhich this may involve. The benefits are difficult to quantify. Thejustification of this item of the project is based on the financial savingsdue to the salary differential between expatriate and local staff of equiva-lent grade and responsibility. To test this a discounted cash flow analysiswas carried out over a period of 20 years of two cost streams, one representingELCOM's cost without the proposed training (continued employment of expatriates)and the second representing ELCOM's costs with in-service training reducingthe number of expatriates over time as local staff accept full operationalrespons.bility. The discount rate which equalized the two streams was foundto be in excess of 48%.
Distribution Expansion
6.03 This modest expansion covers the five years through 1979. Rehabil-itation, strengthening of existing systems and expansion are involved. Arate of return on this element of the project has not been estimated due to
the problem of allocating incremental revenues to existing and new facilities.
Foreign Exchange Shortfall of Loan 737-PNG
6.04 The Upper Ramu Hydroelectric project was planned for two stages:No. 1, a 45 MW run-of-the-river plant and No. 2, installation of two additional15 MW units plus the construction of a storage dam to provide regulation fora firm output of 60 MW at the system load factor.
6.05 A probability analysis comparing the project to the mosteconomical thermal alternative was made at the time of original appraisal.Three values were introduced for the variables: load forecasts, capital costsfor the hydro and thermal alternative, and fuel prices. The resulting meanvalue of the discount rate which equalized the present value of the coststreams was 17.6%. This analysis was repeated based on information availablein July 1973. The resulting mean vaiue of the discount rate was 18.8%. If
today's fuel costs were introduced into the analysis the discount rate wouldbe at least 25%.
6.06 This surprising result is attributable to three factors:
(a) .he basic cost estimate of the Upper Ramu Hydro Projectexpressed in Australian dollars made in 1970 proved to be
- 13 -
accurate; thus a probability of I could be assigned to thehydro capital costs in the revised analysis;
(b) fuel costs for the thermal alternative were, already inJuly 1973, higher than the most probable value assignedin the 1970 analysis;
(c) because of the lower load forecast there is now no immediateneed for existing diesel equipment to firm up output, thussaving fuel expenses in the earlier years which originallyhad to be allocated to the hydro cost stream.
VII. FINANCIAL ASPECTS
7.01 ELCOM has a good record for reliable supply and service andits financial position has been sound. However, since 1971 ELCOM'smarket has suffered from business and industrial activity slowdown dueto the transient political situation (para 2.03). ELCOM's financialforecasts have therefore been proje:ted conservatively.
Past and Present Earnings
7.02 When ELCOM was established in July 1963 it became responsible fornine central supply systems. Its revenues were based on a tariff structurewhich remained unchanged until 1968. At that time the structure was revisedto remove certain inequities and as a result revenue per kWH sold declined byabout 7%. Partly for this reason, but mainly due to a substantial increasein expatriate staff for operations to cope with the rapid expansion offacilities (a growth of 3MW/year in the past increasing to about 14MW/year).ELCOM's rate of return fell from 8.4% in 1968 to 4.7% in 1969. This lowreturn continued until a 5% tariff increase became operative in November 1970.On the basis of forecasts which incorporated this tariff increase, ELCOMagreed in 1971 in connection with the Loan 737-PNG to maintain tariffs suf-ficient to produce an annual rate of return of not less than 9% on its averagednet fixed assets in service in 1972 through 1976 and not less than 10% there-after. The slowdown in business and industrial activity starting in 1971resulted in a rate of return of 7.3% for 1972 and 8.5% for 1973, comparedto the 9% required by the Loan Agreement.
Present Financial Position
7.03 ELCOM's financial position at June 30, 1973 was sound with net longterm debt representing 73% of capitalisation; the value of current assetsexceeding by four times the value of current liabilities; the Sinking Fundsand Insurance Funds sufficiently liquid to meet the purposes of the funds;and internal cash generation covering debt service for the year by 2.3 times.
7.04 Condensed balance sheets as at June 30, 1970, through 1980 areshown in Annex 19. The estimated 1973 balance sheet shows ELCOM's currentfinancial position. Gross plant of A$ 37.4 million consists of the original
- 14 -
fixed assets transferred froa the Administration for a net value of A$ 5.8million when ELCOM was estab;ished, subsequent additions at historic costand plant taken over from the Administration during 1973 having a net valueof A$ 0.9 million. Work in progress of A$ 13 million includes A$ 10.5 millionin respect of the construction of the Upper Ramu hydroelectric Plant No. Iand the Rouna hydroelectric Plant No. 3.
7.05 Tne current ratio of 4.1/1.0 (Including current maturities oflong-term debt) is satisfactory. Cash on hand is adequate to meet normalworking capital requirements.
7.06 ELCOM's capitalization at June 30, 1973 is sunnarized as follows:
Equti ; A$ Million % of Total
Administration's Equity 6.7General Reserve 3.7Insurance Fund 1.7
7.07 Total equity represents 27% of capitalization. The Administration'sequity represents the agreed value of the original assets transferred togetherwith the value of A$ 0.9 million for plant at Kieta and Keravat transferredduring 1973.
7.08 Long-term debt is detailed in Annex 20. The Administration's 1/loans carry interest rates of between 5-1/8% and 7-3/4% and are repayableafter periods of 20, 25 and 40 years. The IBRD loan of A$ 4.5 million isthat part of Loan 737-PNG drawn to date to finance the Upper Ramu hydro-electric project. The loan should be fully withdrawn by the end of 1975.Other debt consists of supplier credits which will be repaid by 1977.
Sinking Fund
7.09 Sinking funds have been established to repay Government loansupon maturity. As they complicate unnecessarily the servicing of debt,
1/ As from December 1, 1973 the Government of PNG took over the formerAdministration's equity and loans.
- 15 -
future Government loans should require normal level debt service. ELCOMmay desire to go further and substitute a similar method for servicingexisting Government debt. In such an event, the arrangements made betweenELCOM and the Government woull be discussed with the Bank.
Insurance
7.10 ELCOM is accumulating an Insurance Fund to cover various risksfrom fire, explosion, and other damage and loss. The annual premia assessedby ELCOM's insurance consultant are properly charged as an operating ex-pense. The fund amounted to A$ 1.75 million, or US$2.6 million equiv-alent as at June 30, 1973. Apart from possible catastrophic loss, theforecast annual premia together with interest on the Fund's investmentsexceeds the forecast annual claims. However, after independence and thecreat:ion of a new PNG currency, the Fund may not provide foreign exchangeto pEy for replacement or repair of plant. The Borrower has thereforeundertaken to use its best efforts to convert funds held by ELCOM in itsinsurance fund into currencies freely usable by ELCOM to replace or repairassets in the event of loss or damage.
Audit
7.11 The existing Project Agreement requires annual audits byindependent auditors acceptable to the Bank and audited statements within4 months of the end of the financial year. This covenant has beenrepeated. The last audit was made by the Auditor General for the Common-wealth of Australia. This arrangement will likely cease when Papua NewGuinea achieves independence. The new PNG Government is expected toestablish a PNG Auditor General's Office to undertake, inter alia, ELCOM'sannual audit as required by Sec. 23 of the Electricity Commission Ordinance.This was discussed during negotiations and it was agreed that, in the eventthe PNG Auditor General should not have personnel with the necessaryqualifications to carry out the commercial audit, ELCOM would employ anindependence firm of professional accountants to either assist the AuditorGeneral in the audit or alternatively to provide the Bank with an independentcommercial audit.
Proposed Financing Plan
7.12 Annex 21 presents sources and application of funds for 1973-80.It is based on sales forecasts discussed in Chapter 4 and the income state-ments in Annex 23. A summary of .he proposed financing plan covering thesix-year period 1974 through 1979 is shown below:
- 16 -
A$ Million A$ Million %
Funds Required
Capital Expenditure 34.9Deferred Charges In-Service Training 5.1Working Capital Increase 1.3Capitalized Interest 4.2
Total Requirements 45.5 100
Source of Funds
Internal Cash Generation 42.8Less: Interest charged to operations (18.5)
Debt Amortization (3.0)Sinking Fund Contributions (2.7)Provision for employees benefits (1.9)Dividend (0.6)
7.13 Net internal cash generation would finance 35% of ELCOM's capitalrequirements. Borrowing detailed in Annex 20 would finance the remaining65%, and would consist of the balance of Bank Loan 737-PNG, the proposedBank loan of US$10.8 million equivalent or A$ 7.2 million, local loans ofA$ 9.8 million of which A$ 8.8 million represents loans which the Admini-istration has already agreed to provide and estimated advances of A$ 1.1million from consumers. A short-term bridging loan of A$ 3 million wouldbe required in 1974 repayable in early 1975, and an additional A$ 1 millionlater in 1975 repayable in 1976. ELCOM has indicated that these funds wouldbe made available by either the Government or the Bank of Papua New Guinea.Additionally ELCOM's present undertaking to provide a financial plan satis-factory to the Bank before committing itself to any future constructionproject costing in excess of A$ 10 million has been repeated in the proposedloan agreement.
Future Financial Position
7.14 Revenues are based on forecast sales growth of 8.5% through 1980(para 4.01). Projected operating expenses (Annex 23) assume that thecost of those expatriates wholly engaged in training during the five-yearperiod from mid-1974 through mid-1979 would be deferred and written offover 10 years. On this basis, the 9% return required by the existing
- 17 -
loan agreement would be achieved in 1974 and 1975. Subsequently, returnsof 8.4%, 6.9%, 7.4%, 7.6% and 7.9% for 1976 through 1980 are forecast,which would be below the targets of 9% until 1976 and 10% thereafter setforth in the existing covenant. This forecast failure to meet the agreedreturns results principally from the low rate of market growth adopted forthis report; the agreed returns would be met should the additional loaddescribed in para 4.03 maternalize. Paradoxically, the financial situationis forecast to remain sound even with low market growth: the operatingratio would vary between 59% and 65%, the net debt equity ratio wouldimprove from 76/24 in 1976 to 73/27 in 1980 and internal cash generationnet of debt service would cover 35% of capital reuqirements during 1974-1979.Given these circumstances, the existing earnings test covenant has beencontinued in the proposed Project Agreement, recognizing that it may be waivedfor some years after 1975 provided ELCOM's financial situation for the yearin question remains satisfactory to the Bank. The existing covenant preventingpayment of dividends before July 1978 without the Bank's approval has alsobeen continued.
7.15 The Administration agreed in connection with the last loan thatin transferring any of its assets to ELCOM it would: (a) accept in paymenttherefor a suitable form of equity corresponding to the agreed value ofsuch transfer; and (b) make available annually to ELCOM amounts sufficientto cover the losses on any power systems transferred. These undertakingswere repeated in the proposed Loan Agreement.
7.16 Estimated gross assets in service are forecast to increase fromA$ 40 million (US$59 million equivalent) at the end of 1974 to A$ 83 million(US$123 million) by 1976 after the Rouna No. 3 hydroelectric plant and theUpper Ramu hydroelectric plant No. 1 are commissioned (Annex 19). Sub-sequently investment in distribution accounts for the increased plant valueto A$ 90 million (US$133 million) by the end of 1980.
7.17 Long-term debt net of sinking funds represents 77% of totalcapitalization in 1974 rising to 79% in 1975 then declining gradually to76% in 1980. The current ratio drops from 4.1 in 1973 to 1.2 in 1974 dueto the short-term bridging loan of A$ 3 million. Subsequently the ratiorises to 3.5 by 1978. The reduction to 3.2 in 1979 and 1980 reflects thebeginning of the payment of dividends.
7.18 ELCOM's internal cash generation would cover annual debtservice 1.9 times on average, a satisfactory coverage on a year to yearbasis. However, the existing covenant of Loan 737-PNG provides that ELCOMshall not incur any long-term debt, except as the Bank may otherwiseagree, if its net revenue for the fiscal year next preceding the date ofsuch incurrence shall be less than 1.5 times the maximum debt servicerequirement for any successive year-on all the debt of ELCOM including thedebt to be incurred. The 1.5 times coverage, which is strict, was basedon ELCOM's previously provided high market growth and high earnings. Itcannot reasonably be achieved in the next few years unless loan growth(para 4.03) and increased revenues (para 7.14) materialize. ELCOM's netrevenues would then exceed 1.5 times the maximum debt service for anysucceeding year. In the circumstances the covenant was continued.
- t8 -
VIII. AGREEMENTS REACHED AND RECONKENDATION
8.01 During loan negotiations agreement was reached on the fo}lowingpoints and appropriate covenants included in the legal documents for theproposed Loan:
(a) an earning test (para 7.14);
(b) debt control (para 7.18); and
(c) training program (para 5.04).
8.02 The project is suitable for a Bank loan of US$10.9 millionequivalent for a term of 20 years including a grace period of five years.
(1964/65-1971/72) (1971/72-1977/78)Average Annual Growth Rate (%) including Bougainville 24.0% 14.3%
(%) excluding Bougainville 12.0% 8.0o
PAPUA NEW GUINEAPAPUA NEW GUINEA ELECTRICITY COMMISSION (ELCOM)
ORGANIZATION CHART
|-BOARD OF COMMISSIONERS.IAI" MAN "
5PART -TIMEASSOCIATE COMMISSIONERS
ADVISORY COMMITTEESEducation & TrainingTransport SuTrestions MANAGEMENT COMMITTEEVocabulary & Forms …………COMMISSIONERSafety j I ICost Study J
(ENGINEERING _
BUDGET PBI BRANCHREAIN
EDUCATION &
l I . I~~~~~~~~~~~~~~~~~~~~~.A INI
__ FINANCE ADMIN t S & T l SECRETARIAL GENERATION CI
_ DtVtStON _ DtVtStON l _ DIVISION l _ SERVICES ENGtNEER _ l _ ELECTRICAL~~~~IAECHNICA ELECRICA
EXECUTIVE OFFICER EXECUTIVE OFFICER EXECUTIVE OFFICER EXECUTIVE ENGINEER EXECUTIV ENGINEERFiNANCE ADMIN STORE & TRANSPORT GENERATION A NA IONN ELECTRICAL
Madang 2 1,500 Niigata/Toshiba1 1,340 English alectric/English Electric2 530 English F,Lectric/G.E.C.I 500 English Electric/English Electric 5,900 (5-9 NW)
Wesak 3 530 English Electric/G.E.C.2 250 National,Brush 2,090 (2.1 MW)
TOTAL -CIRCUIT/ROUTEIILES o106.3 10. 4 2 115 241 288 10
PAMk NEW GUINEA
PAPUA NEW GUINE ELRCTAICITX? COM SSION
SUPPLE POINT TRANSFORMER STATISTICS AT 30/6/73
MAIN TRANSFORMERS AUXILIARY TRANSFORMLRS
PORT MORESBY MVA Vol.tate ttio kVA Vol':s-e Ratio FeederSt
Rouna No. 1 P.S. 3 x 2.5 3.3/33kV 2 x 30 3.3kV/415V 2 x 33kV
Louna No. 1 P.S. 2 x 0.5 33/22kV I x 1 22kV
Rouna iuto S/S 2 x 5.0 33/66kV _Rouna No. 2 P.S. 5 x 7.5 11/66kV 2 x 300 66kV/433V 3 x 66kV
Boroko S/S 2 x 5.0 66/llkV 1 x 50 llkV/415V 6 x llkV
boroko S/S 1 x 10 66/}lkV -
Boroko S/S 2 x 23 66/llkV -
Konedobu. S/S 2 x 7.5 66/llkV 1 x 100 llkV/433V 7 x llkV
bomana S/S 2 x 2.5 33/11kV 1 x 100 llkV/433V 3 x llkV
LuE
Baiune Auto S/S 2 x 2.5 33/66kV 1 x 25 33kV/433V 1 x 66kV
Lae S/S 2 x 2.5 66/llkV _
Lae P.S. 3 x 0.4 415V/IikV 2 x 500 llkV/433V 6 x IllcV
MADANG
KMadang P.S. 3 x 0.75 415V/llkV - - 3 x llkVMadang P.S. 3 x 0.5 415V/llkV
WAEW-AK
Wewak P.S. 3 x 0.75 415V/llkV _ 4 x rkV
Wewak P.S. 3 x 0.4 415V/llkV
GOPOKA
Hydro P.S. 2 x 0.3 415V/22kV _ _ 1 x 22kV
Diesel P.S. 4 x 0.3 415V/22kV . 2 x 22kV
RABAUL
Rabaul P.S. 4 x 0.4 415V/IlkV 2 x 50 llkV/433V 4 x llkV
Rabaul S/S 2 x 0.75 11/22-33kV - _ 2 x 22kV
Keravat P.S. 2 x 0.3 415V/22kV 2 x 22!kV
KAVIENG
Kavieng P.S. 2 x 0.3 415V/llhV - _ 2 x 11ik
KIEiMA 2 x22kV
P.S. - Power StationS/S - Substation
PAP1TA NEW GUINEA
PAPUA NEW CUINEA ELECTRICITY COMMISSION
DISTRIBUTION SUBSTATION STATISTICS AT 30/6/73
NUMBER OF SUBSTATIONS SUBSTATIONCOMMISSION H.V. BULK METERED CAPACITY KVA
Ground GroundTransf. 1 Pole 2 Pole Tranaf. 1 Pole 2 Pole H.V. Bulkor Kiosk Indoor Hounted Mounted Total or Kiosk Mounted Hounted Total Cok 9ilh n Metered
Lower than anticipated load growth in this area has indefinitelypostponed the iouna No. L (9 M{) hydroelectric plant on the Laloki River-riginally scheduled for commissioning in 1976. Rouna No. 3 (12 MW) ispresently under construction and scheduled for commissioning in 1974.Because developments on other rivers are too large or too far away fromthe service area ELCOM's intention was to establish a large diesel powerstation (30 NW) at Baruni of which the first phase (12 MW) would be(oommissioned in 1976. This project has also been deferred into the 1980's.
The Musa diver 1gjdroelectric Scheme
This hydro project which could serve a large industrial loadis located in North East Papua and has a potential of 400 MW and about2300 Gdh annually. Various developments are possible ranging in sizef um u3-400 INW with costs from A" 50-125 million. The cost of energy-varies from about 0.9 A cents/kWh to about O.45 A cents/kWh depending on"he size of the installation.
Upper Uamu Area (New Guinea)
With the Upper iRamu No. 1 hydro project (15 MW) presently underconstruc-tion and scheduled for commissioning in FY 1976 no furtherg,enerating facilities will be required in this area to serve the presentload forecast. As load increases, the construction of the dam to firmup £amu No. 1 output and the installation of two additional 15 IL unitswould be the next stage of development. This would be undoubtedly thera)st economic solution and would require an investment of about A$ 14,nillion. Additional transmission would be unnecessary. The next stepwould be the construction of a second Rlamu hydro plant (75 MW) below"lo. 1, costing about Aki23 million also benefiting from the storageprovided. fRamu No. 3 of 100 NW downstream of No. 2 costing about A$ 32,illion including transmission would -,hen follow thus fully utilisingthe potential of the Upper Ramu River (250 IW).
Ai potential industrial load that M1COM could be required tozirve is for the OK Tedi Copper Developmen-t near the border with West
irOlLan ir Papua. Prospects that this development T-ill materialize aregood. Unfortumately a possible hydro development on the OK Tedi rivernear the development, is both costly and requires standby diesel powerLa firm up output.
Annex 7page 2 of ? pabze<
An alternative would be to connect thiis load (29 MW) to the itamu sa2teuat Mt. Hagen, but because of the lon! transmission required systemstability problems could arise. ELCDM's consultants have thereforenvestigated other hydro sites. One possible development exists on theWaga river, a tributary of the Kikori river which flows into the Gulfof Papua. The scheme itself is about 35) km west of Mendi and would lenditself to a staged development with an ultimate capacity of about 500 li.The first phase as presently envisaged would consist of a 75 MW run-of-the-river plant with a firm output of about SO MW. Geological difficuli;iesexist, however, and field investigations are underway. The investmentsrequired for a first stage development are tentatively estimated atA$ 28.0 million of A.T 375/KW installed Transmission facilities to connectthis scheme to the ±amu system now under construction, would re(quire afurther A$ 7.5 million. Should the Frieda iRiver Copper Development tothe North of OK Tedi but on the New Guinea side eventuate, theincremental costs to connect this additional load of about 25 Mv wouldbe about AD 2.0 million.
Purari River Development
Investigations of the hydro potential of this river which flowsinto the Gulf of Papua have identified six sites with a possible installedcapacity of 7200 MW of which o100 MW would be firm. Annual energygeneration would be about 53,000 GWh. One particular site -- the Wabosite -- has been the subject of detailed investigation. A 110 m high nwould create a storage of about 13,500 million ml of which 5,300 million mwould be active. Firm discharge would be 100 m3/sec, 15L0 NW could beinstalled and firm output would be 1320 MW with 11,000 GWh generatedannually. The cost of this scheme has been estimated at about US'.330million (1972 price and currency exchange levels) and the cost of energy a-tabout US mills 3.5/kwh.
The new Government of Papua New Guinea has taken an activeinterest in this developaent and is seeking power intensive industries toabsorb the available energy. Japan and Australia have shown some interestand investigations are proceeding but construction is not an-ticipatedbefore the early 1980's. With a construction period of 5 -5 yearscommissioning of such a plant would be in the late 1980's.
PAPUA NEW GUINEA
PAPUA NiSW GUINEA ELECTRCITY COMMISSION (EL=OW
ACTUAL GEREPATION, SALES AND MAXDMUM4 DEMAND 1963/64-1972/73
Average Average AverageAnnual Grovwth Annual Growth Annual GrowthRate 199l/70 Rate 1969/7? Rate 1970/73
FISCAL YEAR ENDS JUNE 30 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971/72 2 n inn in
60kV=0N (MWh)
Upper Ramu Service Area 9/ 11,974 14,666 17,628 22,481 28,702 36,725 45,572 56,729 65,599 67,526 25.0 21.89 15.97Other Service Areas 3/ 43,484 51,293 60,511 71,723 81,331 94,488 114,793 125,707 333,026 i59,443 17.6 15.38 11.17
Sales Revenues kWh Sales Revenues kWh Sales Revenues kWh Sales Revenues kWh Sales Revenues kWhMWh IA A cents/ MWh $A A centa/ Mwh UA A cents/ MWh 8A A cents/ Mwh 8A A cents/
1. On July 1, 1968, Elcom revised tariffs (reduction in general) and changed its Tariff Structure.
2. From July, 1966 onwards metering of public lighting was abolished and replaced by a fixed monthlycharge which includes not only energy consumed but also reimburses Elcom for maintenance and services of the facilities.
3. The special load category was abolished on July 1, 1968. The revenue in 1968/69 and 1969/70 is for a waterpumping load at Port Moresby. This load was discontinued after 1969/70.
Any differences in addition due to rounding off.Derived from Energy Sales and Revenue Forecast dated April 11th, 1973 on File E79-7-2May 31, 1973.
Annex 11
PAPUJA NEW GUINEA page 1 of 3 pagesPAPUA NEW GUINErA ELECTAICITY COMMISSION
RISVIE OF EC0NaC TREiNTD" A"D PROSP94CTS TN THEAREA TO BE SERVED 3Y THJ UPP&E R UJ HY-DROELTKIPIC PROJECT
Papua New Guinea is scheduled to achieve self-government on the1st December, 1973, or soon thereafter and the date of independence isexpected to follow very closely. In the present transient politicalsituation there is a general slowdown of business and industrial activitythroughout the country. Prospective investors find. they have to deal withi
two governments, one in Canberra and one in Port Moresby. Everybody iswaiting for the situation to stabilise and for the new Government topublish its investment guidelines. This climate, coupled with the PapuaNew Guinea Government's declared policy of indigenisation, is expected toresult in th.e departure of at least half of the non-indigenous population.
It is expected that activities will start up again once the above changeshave taken place. In the past ten years there has been an increa.se in the
use of air conditioning and night time security lighting, resulting in an
increased night load and a greatly improved load factor. The evening peakis expected to decrease due to the expected reduction of domestic cooking.
LAE
This is the main town served by the Ramu Scheme and the size of
the town and its industry is second only to Port Moresby. Half of the
population of Papua New Guinea is connected to Lae by the Highlands Highway,
thus it is a very important service centre.
In 1970 the total number of inhabitants was 2)4,339 including4.G75 non-indigenous. The total inhabitants increased to 31!,,99 by 1971,of whom 6,205 were non-indigenous. 52 GWh were sold in Lae in 1972/73
(lst May, 1972 to 31st May, 1973) compared with 23.8 GWh in 1958/69,representing an average annual increase of 21.6%. The maximum demand in
1972/73 was 8.63 MW as against 4.15 MW in 1968/59, an increase of 18'.
The largest increase in consumption in the next two or threeyears is expected to come from the expansion taking place at the PapuaNew Guinea University of Technology. There are plans for the establishmen_,of a wood pulp mill at Finschhafen. This prospective load of 10 to 1, FE
would also be supplied from the Ramu Scheme. If the extensive prospectingresults in the discovery of crude oil, it is expected that a refinery wil')be established in Lae. There are good signs that the town's serious landproblem will be solved as a workable leasing arrangement has been proposedby the indigenous owners.
MADANG
Madang has the advantage of an excellent deepwater harbour, thatis regarded to be the best on the northern coast of the mainland. Inaddition to the Japanese owned chip mill and sawmill that is scheduled t(o
begin operation in February, 197)4, a New Zealand company has establisned
a sawmill which will be augmented by the addition of a chip mill early
next year.
.../2
Annex 11page 2 of 3 pales
Recently it has been announced that a flou.r mill will beestablished in Madang and there are hopes for the establishment of a fishcannery. The good harbour mentioned above is expected to attract aJoint Forces base/naval base. The confidence of Madangrs touristpotential is being demonstrated by the present expansion of its leadinghotel. The access road to be built for the transmission 'ine constructionwill be gradually upgraded and this connection of the town to the inlandareas is expected to increase commercial activities in Madang.
Electricity generated in 1972/73 was 14 GWh compared with 8.': GvJhnin 1968/69, representing an average annual growth rate over the period of13.7%. Maximum demand rose from 1.79 M to 2.21 MW during the period, anaverage increase of 5.4% per annum. The total population in 1971 was15,751 persons, including 2,279 expatriates.
G0R0OKA
The further development of Goroka is likely to be restricted bythe lack of suitable land for building purposes. This town will mostlikely be the centre of a basically agricultural community with somecottage industries. Its electricity requirements will come from thecommercial and service establishments and from a number of coffee factorieslocated five to ten miles from the town.
Power requirements have increased from 4.5 GWh in 1968/69 to,10.h GWh in 1972/73, an increase of 23.4%. Maximum demand rose from T.V) 14dto 2,025 MW in 1972. Population in 1971 was 10,75•; persons, including1,518 expatriates.
MOUNT HAIGEN
The population in 1971 was 9,609 persons, of which 1,211 werenon-indigenous. In 1972/73 6.1 GWh had been generated in Mt. Hagencompared with 1.8 GWh in 1968/69 representing an average annual growth rat.eof 35.7% while the growth rate of the last twelve months was 27%.
KAINANTU AND KUNDIAWA
These towns have very little industrial activity and they willappear to remain service centers apart from the coffee factories. Acontinuing high growth rate therefore appears unlikely. There are anumber of prospective loads, some of them at a distance from the towns,which may be connected to the Ramu supply provided the charges will beacceptable. Both towns have 3 x 100 kW generating capacity and supply isavailable for 24 hours a day.
In 1971 the population of Kainantu was 1,2!5 persons (17.expatriates) and that of Kundiawa was 2,055 persons (245 expatriates).
Annex 11pge_3 of 3 pages
PROSPECTIVE MAJOR LOADS
(a) Ok Tedi Copper Project maximum demand 29 MW, yearly energyrequirement 180 GWh expected in 1980.
(b) Frieda River Copper Project maximum demand 25 MW, yearlyenergy requirement 150 GW4h expected in 1982.
(c) Bundi Mining Project estimated maximum demand 20 MW,yearly energy 120 GWh - possible connection date 1985.
(d) Paper Pulp Project in Finschhafen (listed previously underLae) 3 MW for construction from 197h and 10 - 15 MW' for 197,,.
The above loads are expected to be connected to the Ramu trans-mission system and studies are presently being made to determine the mosteconomic alternative of generation expansion (i.e. Yonki Dam and itamu 2 oranother power station on the Lower Waga River, near Mendi).
PAPUA NEW GUINEAPAPUA NEW GUINEA ELECTRICITY COMMISSION (ELCOMJ
ACTUAL AND FORECAST MAXIMUM DEMAND (MW)
150
140
./
130j
120k
Ito!
100
TOTAL MAXIMUM DEMIAND ALCOMO/ FORECAST O3CT. 1072sol_!
3 / ~ ~~~~~~~~~~~~~~~ /.'
TOTAL MAXIMUM DEMAND ELCOM/ /z FORECAST JLILY 1970 j.' TOTAL MAXIMUM
X OUMAND ELCOMFORECAST
/ / lU FOREDAST 1J73
70/
f ~~~~~~~~~~~MAXIIMUM OUMARI)OTHEH SERVICE ARAEAS
EO / # / LFORECAST JUNE 107340 MAXIMUM DEMAND
OTHERI SERVRERI AREAS
// / . 0 KE RORECAST OCTiO
O,AUMO RVC ~ AREAUISlTAILEU 00000D'
40 MAXIMUM O£MANO CAPSTY .1:,OTH SERVICE AREAS MO S-AMARRI _I ARJ J E'7 0 '0 OFIOCAST JULY 1970 RARAULI, OOVf
1. After its formation in 1963, ELGOM's first major step to improvetraining was the establishment of a Training Center at Hohola near PortMoresby. In 1965, the Center catered for 40 trainee power station operators
and 40 trainee linesmen who lived and trained at the Center.
2. In-1966, the Apprenticeship Board agreed to recognize powerstation operators, linesmen and commercial trainees as apprentices. Soonafter, when additional dormitories, classrooms, and a workshop werecompleted, new courses for commercial and technical apprentices were drawnup. By February 1967, the Training Center offered continuous courses for
apprentice power station operators, linesmen, clerks, electricians, dieselmechanics and draftsmen.
3. The first Commission sponsored cadet to the Institute of HigherTechnical Education in Lae (now Technical University of Papua New Guinea
(Lae)) began his studies the same year. A Commission cadetship entitlesthe holder to free education at a tertiary institute, allowances for text-books, food and accommodation) pocket money, free air travel to and fromthe Institute on leave, employment during holidays at full pay, and arewarding career on graduation.
4. An expert on technical education was brought to the Territory by
ELCOM to examine the existing scheme and recommended directions for futureoperations. As a result of this assessment eleven extra overseas trainingofficers were recruited, two additional workshops, extensions to otherworkshops, and three new dormitories were completed and detailed plans fora mess-kitchen with a 260 man capacity were drawn up.
5. The 1969 apprentice intake totalled 185 (electricians, dieselmechanics, linesmen, clerks, welders, motor mechanics, printers, and
cooks). 21 cadets began courses at the University of Papua New Guinea (PortMoresby) and the Technical University of Papua New Guinea (Lae), while 23trainees started at Lae Technical College.
6. New courses for apprentice electricians, diesel mechanics and
clerks, and extra general courses in the use of handtools were added to
the curriculum.
7. In 1970 a new mess-kitchen and dining hall building, library,study room and recreation room were added and in 1972 an assembly hall and
theatrette together with additional dormitories were completed.
ANNEX 16Page 2 cf 10
Education and Training Committee
8. The Education and Training Committee comprises the followingmembers: Assistant General Manager (Administration and Finance); ChiefEngineer (Operations); Power Production Engineer; Chief AdministrativeOfficer; Engineer/Manager (New Guinea); Principal Hohola Training Center;and Master of Apprentices. The Committee meets regularly to plan and discussthe Commission's training policies. Its decisions are placed before theCommissioners for approval.
Recruitment
9. Each year an officer of the Commission's Training Branch visitsevery center in the Territory to inform students about the Commission andthe careers available to them through the Hohola Training Center. Theofficer again visits students who apply for apprenticeships or cadetships.All applicants undergo extensive aptitude tests which are given to allapplicants - local or overseas.
Apprenticeships
10. The Commission's Apprenticeships offer students a way in which totrain to become qualified tradesmen. To qualify as a tradesman, a person hasto undertake training usually from three to four years. Apprenticeshipsin the following trades are offered:
1. Electrician;
2. Diesel Mechanics;
3. Clerk (Commercial Apprenticeship);
4. Linesman; and
5. Cook/Caterer.
11. To become an Apprentice a good pass at either Form III or Form IVlevel (Intermediate or School Certificate) in Maths, English and Science isrequired. The first two years are spent in full-time training at theHohola Training Center studying such subjects as Trade Theory; Trade Practice;Maths; Science; Technical Drawing; First Aid. The following two years arespent on in-service training.
12. Upon completion of Apprenticeship, the following promotion opportu-nities are available:
ANNEX 16Page 3 of 10
Apprentice Electrician Electrician;Technician;Leading Hand Electrical;Foreman Electrical; andSupervisor Electrical
Apprentice Diesel Mechanic Diesel Mechanic;Shift Fitter;Power Station Foreman; andPower Station Supervisor
While training, apprentices are also engaged in correspondence courses ingeneral subjects to improve their standard of education.
Traineeships
13. The Commissioner's Traineeships provide courses for TraineeTechnical Officers and Trainee Commercial Officers at the Lae TechnicalCollege. The courses for Trainee Technical Officers last four years andfor Trainee Commercial Officers three years. The Trainee attends a courseof 14-20 week's duration each year with the remainder of the time spenton "in-service" training. Trainees are periodically transferred to providefor the greatest variety of job experience.
14. On completion of his studies, a Trainee will receive either aCertificate of Commerce or a Certificate of Engineering and is then known aseither a Technical Officer or Clerk Grade C depending on whether he is aTechnical or Commercial Trainee.
15. A graduate Trainee Technical Officer may specialize in eitherElectrical or Mechanical Engineering as a Draftsman or a Station Controller.The initial appointment of a Technical Officer, Electrical, could be as anassistant to a Branch Manager or to an Electrical Engineer. A TechnicalOfficer, Mechanical, could initially be appointed as an assistant to a BranchManager or to a Mechanical Engineer.
ANNEX 16Page 4 of 10
16. A graduate Trainee Commercial Officer may be appointed to eitherthe Finance, Administrative, Stores or Sales Branches of the Commission.Promotion could be to Clerk Grade D and then to Finance, Administrative orStores Officer-s Grade 1. For the exceptional officers, opportunities areprovided to ur4dertake special management courses.
Cadetships
17. The Commission's Cadetships provide courses in higher studies atthe University of Papua New Guinea (Port Moresby); at She TechnicalUniversity of Papua New Guinea (Lae); and in some cases at Australian Insti-tutes and Universities. Cadetships offered are in both Engineering andCommercial fields as well as Economics, Law and Government.
18. On completion of an engineering cadetship, graduate cadets areappointed as Engineers Grade 1. On completion of cadetships in Accountancy,Business Studies, Law or Economics, cadets are appointed to the Finance,Administrative, Stores or Sales Branches as Officers Grade 1. Promotionsare available to Section and Branch Heads.
Grade A 85Power Station Oper: 164Plant Attendants 37Technical Officers 3Commercial Officers 11Graduates-TUPNG (Lae) 3
UPNG (POM) 1
Total 494
Situation at June 30, 1973
22. The Hohola Training Center employs 21 overseas officers and 27locals. 310:locals were in training as of this date (6/30/73) of which 175at the Center and 135 in-service. In the year 1972/73, 123 trainees graduatedincreasing the number of qualified graduates to 617. A total of 84 localstrained by the Commission left the services of the Comaission to take upemployment with private firms, other statutory authorities, the Administration,and Local Government.
Future Training Plans
23. Training will continue to be given high priority by ELCOM. Thenumber of persons receiving training at the Rohola Training Center will,however, be reduced in line with ELCOM's presently forecast needs. Thusapprentices and trainees will be gradually reduced to about 150 by June 30,1976 and maintained at this level thereafter.
ANNEX 16Page 6 of 10
24. With cadets graduating in increasing numbers a change in emphasisof training will result. Graduated cadets will be given immediate and fullresponsibility, thus reducing expatriate operational staff. Of the ex-patriates freed, qualified individuals will be retained by ELCOM to providetraining services. It is foreseen that such selected expatriate wouldsupervise two or more locals and provide for guidance and training.
25. Under more normal circumstances the "counterpart" system wouldhave been adopted whereby one local would work with and receive trainingfrom his expatriate colleague. The duration and success of such trainingis, however, dependent not only on the capability of the local and hiswillingness to accept responsibility, but also on the attitude and capabilityof the expatriate as a trainer. The costs involved would also be high,because of the virtual doubling of staff.
26. Because of the appreciable slowdown in construction activity theapproach outlined in paragraph 24 is not only feasible but also less costly.There is no doubt that a certain risk, insofar as system reliability isconcerned, would be involved. Nevertheless, given the circum tances, theproposed plan is not only justified, but in the long run will prove to bemore beneficial.
27. Technical cadets presently in training are scheduled to graduate asfollows:
29. The primary training functions of Engineers Grade 3 would be tosupervise, provide guidance and train graduate technical cadets. On theassumption that a three year in-service training period is appropriate,cadets receiving training would be as follows:
30. Whilst the above ratio for 1974-1976 indicates an apparent excessof trainers, this is not the case since an additional function of these trainerswould be the supervision of Senior Technical Officer Trainers during thethree years to ensure satisfactory execution of the proposed program.
31. The situation with regard commercial staff in similar. Commercialcadets would graduate as follows:
33. The primary training function of commercial professional staffwould be the provision of supervision, guidance and training of commercialcadets and local commercial officers. The number of these receiving in-servicetraining is summarized below:
Ratio Trainer/Trainees 1/1 1/1 1/1.5 1/1.5 1/4 1/5
/1 Professional and Sub-professional staff.
34. As in the case of technical staff, the ratios 1974-1977 indicatesan apparent excess of trainers. Again this is not the case since an addi-tional function of "professional" trainers is the supervision of the train-ing provided by "sub-professional trainers and the in-service training ofclerks of which 131 are currently receiving classroom training at theHohola Training Center.
ANNEX 16Page 9 of 10
Surnary Trainees and Trainers
35. The training foreseen can be summarized as follows:
Mbnthly Tariff Schedules(Australian cents per unit)
-- The rates set out below apply to all meter reading periods comencingafter let November, 1970 for accounts issued against the Administration, andafter 10th December, 1970 for all other accounts.
Domestic Tariff Zone1 2 3 4 6
First 10 units 13.0 13.0 13.0 13.0 14.o 14.0
Next 30 units 7.0 7.0 8.0 8.o 9.0 9.0
Next 150 units 4.0 4.5 5.0 6.o 7.0 8.o
Balance 2.6 3.2 3.9 4.7 5.5 6.3
General SupplyTariff Zone
1 2 3 4 5 6
First 50 units 13.0 13.0 13.0 13.0 14.0 14.0
Next 200 units 7.0 7.0 8.0 8.o 9.0 10.0
Next 400 units 5.3 5.6 6.3 7.5 8.9 9.1
Next 4000 units 3.2 4.3 5.2 6.o 6.7 7.6
Balance 3.2 3.5 3.9 4.7 5.5 6.3
NOTES: 1. Tariff Zone I applies at Port Moresby and Kieta/Arawa.
Tariff Zone 2 applies at Rabaul, Goroka, Lae, Madang,Kokopo and Keravat.
Tariff Zone 3 applies at Kavieng, Wewak and Samarai.
Tariff Zones 4, 5 and 6. No Commission consumers connectedat these Tariff Rates. As the Commission "takes over" minorCentres from the AdminiEtration, Zones 4, 5 and 6 will comeinto effect.
The electricity supply assets and functions of Keravat andKieta/Arawa were taken cver from the Administration on lstOctober, 1972.
The electricity supply assets and functions of Mount Hagen,Kundiawa and Kainantu were taken over from the Administrationon 1st August, 1971 on a management basis only. Zone 6 TariffRates apply in these Centres.
June 1, 1973
PAPLUA NEW GUINEA
PAPUA NEW GUINEA ELECTRICITY CaOMISSION
Condensed Balance Sheets at end of Fiscal Years 1970 to 1972 (Actual) & 1973 through 1980 (Forecast)
Working Capital Increase or (Decrease) 956 (446) (463) (663) 1465 1402 (6) 124TOTAL APPLICATIONS 14529 22702 16047 9259 9532 9718 9160 9270
Times Cash Generation coversDebt Service 5/ 2.3 2.5 2.1 1.9 1.6 1.6 1.6 1.6
1/ Depreciation charged to Motor Vehicle Hire account2/ Issued to cover capitalisation of deferred interest3/ A$ 312000 deferred interest capitalised and included as
Administration Loan4/ Loan Agreement No 737 PNG provides for dividend until
July 1, 1978 unless the Bank may otherwise agree. An8% dividend is assumed in Fiscal Years 1979 and 1980.
5/ Including Sinking Fund Contributions.
PAPUA NEW GUINEA ELECTRICITY COMMISSION
Construction Expenditure (Prime Cost Plus Overheads) for FY 1972/73 Through FY 1979/80
(2) Annual interest is treated as a repayment of principal in ELCOM Accounts 1972
icr tar 44' - few. ISO. ISO lEAD 10712~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~8R 771142' Iit' _ 146 - _ _ 48' 2 _ _ _ _ 15i- I,iZ' PAPUA-NEW GUINEA P1b 01974
PAPUA-NEW GUINEA ELECTRICITY COMMISSION (ELCOM)
i U MAGANGO ELCOM renerso Adfrlniatroton clen opcd by publi0 Ad-istrftlen Penter Papos td i-fit, e ELCOMiIt resiEUio ELCOM peofersl toe over 1971-1975)* ELCCM hydro power plontsE3AdeliWst,etiee hydro pewer plenis
' Re A N U M - A Nl u,trdro hydpower plesntPA Propsed redflsnstrlen diesel MOefesLi ENRAO NEW IRE LAND A CAR,ioppnnftoerrol psower penet-2 -- - - - - -' I ,e o-- Existlng t-cns'nssiefn fines 2-
Spiel ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~[130/69 KV fosieIpo es onder Qstructitooi W E S T S E P I K
F u t u m p o s s ib lem l I 'i 2 / G 9 Po ts tr e o s is in i nn li ne s u r d e r p ib l t e s i i l in ,I " Took)> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~KAVIENO RapdI_ EKdrIMO I I ArIsCt E N E i => sterrifenil MOWbndenies
EAST SEP0 i _--' ' - i An-lou Kt __-.= felenioffooAl boundoeiesJegei olIond Airg'pr~ _ j -_ B i s m qar c k 5Se o 0 SO< o00 ISIDD 150 200
I ofoonde I I --- '- wane~~~~~~~~~~~~~~~~~~~~~~~ke g mo 1502Air& P.
tiilrI 'wEzWAK 'e. I9 3 100 ISO 290) 290 310
0oeonee jDnxIk,-pMAPRIK 0 Amc~~~~~~~~noo D kkrlA I |'| O50 KlLOMiEr'RS
i o G s lverR - ep p Tor~eru BAINYIK yia,g. | "" _ v -( ' ' S Am- -f- I7 e --- ------- /_ - - - - - -4
I -, * -r - 4.| Xri9 talithsten 0 oP W E S T N E W iB R I T A I N \\ SE;ALVAi WE TNE,BITI
'-*oLootrep lni t HIHANBS -< { ycj-214 |2 IN5ETMAPA|1
-r1
| jS
I L …PPrrl I : fi > s r M A h D A N G = - S xS x/ : f | 3 O U A I N VDLALNtGE
NW5ERlt~~~~~~~~~~~~~~~~~ F' <S _ -'--tS ' t2 '' ' 2
2 L---- - ---- - -- er
1M ~~~~~~~ \',) g I tr~~~~~~~~~~~~~~~~~ 9 1-f<rierge A
50800V sipe AIEsPI N. AUNS~~AOv4 Ol I roneECN TAR NwLI hydro eleplric gesojr I -'-.
'.I ' $Sta o, i>
A U S T R A L I A IN0 i l t r o1 W M O 0 B E I C A R.NOm IJHEN, _C/'jESEO0 wees KIETA
