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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL Industry and Energy Operations Division Country Department III East Asia and Pacific Region USE ONLY IMPLEMENTATION COMPLETION REPORT INDONESIA RURAL ELECTRIFICATION PROJECT (LOAN No.3180-IND) DECEMBER 28, 1995 Report No This document has a restricted distribution and may be used by recipients only in the performance of their official dulies. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS Currency Unit = Indonesian Rupiah (Rp) US$ Rp 2,246 Rp 1,000 - US$ 0.45 WEIGHTS AND MEASURES I metric ton (t) 1.00 kilograms (kg) I liter (1) = barrels (bbl) I kilometer (km) miles (mi) I kilovolt (kv) = 1,000 volts (V) 1 Megavolt-ampere (MVA) = 1,000 kilovolt-amperes (kva) 1 Megawatt (MW) = 1,000 kilowatts (kw) I Gigawatt hour (GWh) = 1 million kilowatt hours (kwh) FISCAL YEAR OF BORROWER April I - March 31 BAKOREN BAPPEDA BAPPENAS DBUK DGEED DIVDES ESMAP GOI IERR KUD LNG MIS MME MOCSE MSA MOF NGO PERTAMINA PLN POLA PMU PUSDIKLAT RE REPELITA REPS SBS USAID ABBREVIATIONS AND ACRONYMS National Energy Board Provincial Planning Commission National Development Planning Agency Directorate General of Cooperatives Business Promotion Directorate General of Electric Power and Energy Development PLN's Rural Electrification Division Energy Sector Management Assistance Program Government of Indonesia Internal Economic Rate of Return Village Cooperative Liquefied Natural Gas Management Information System Ministry of Mines and Energy Ministry of Cooperatives Management Services Agreement Ministry of Finance Non-Government Organization National Oil and Gas Company State Electricity Corporation (P.T. PLN (Persero)) Subcontracting Scheme Project Management Unit PLN's Center for Education and Training Rural Electrification Five-Year Development Plan Rural Electrification Planning System Small Business Service United States Agency for International Development

3 FOR OFFICIAL USE ONLY Table of Contents Preface Evaluation Summary.... I Part I Project Implementation Assessment.4 A. Statement/Evaluation of Objectives.4 B. Achievement of Objectives.6 C. Major Factors Affecting the Project.8 D. Project Sustainability.9 E. Bank Performance.10 F. Borrower Performance G. Summary Assessment of Outcome.II H. Future Operations.11 I. Key Lessons Learned.12 Part II Statistical Tables Table 1: Summary of Assessments.14 Table 2: Related Bank Loans/Credits.15 Table 3: Project Timetable.16 Table 4: Loan Disbursements.17 Table 5: Key Indicators for Project Implementation.17 Table 6: Key Indicators for Project Operation.17 Table 7: Studies included in the Project.18 Table 8A: Project Costs.19 Table 8B: Project Financing 20 Table 9: Economic Costs & Benefits (IERR) 21 Table 10: Status of Legal Covenants 22 Table 11: Bank Resources: Staff Inputs.24 Table 12: Bank Resources: Missions.25 Appendices A. Mission's aide memoire B. Operational Plan C. Borrower's contribution to the ICR D. Appendices 1. Intemal Economic Rate of Return E. Map - IBRD This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wilhout World Bank authorization.

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5 Preface IMPLEMENTATION COMPLETION REPORT INDONESIA RURAL ELECTRIFICATION PROJECT (Loan No IND) This is the Implementation Completion Report (ICR) for the Rural Electrification Project in Indonesia, for which Loan No IND, in the amount of US$ 329 million equivalent was approved on March 22, 1990 and made effective on July 30, In addition, under a Japanese Grant Agreement (TF 27280), a Yen 180 million grant was provided to supplement loan funds available for technical assistance. The loan closing date was extended by one year, to June 30, 1995 (original closing date was June 30, 1994). About US$ 67.7 million was canceled, and the last disbursement was on November 28, Under the Japanese Grant Agreement, about Yen 33.1 million was canceled. The ICR was prepared by Arun P. Sanghvi (Sr. Energy Economist, Task Manager), Industry and Energy Division, East Asia and Pacific Region, assisted by Dawn Vermilya, Voravate Tig Tuntivate and John Tulloch, and reviewed by Peter R. Scherer, Chief, EA3IE, and Richard A. Calkins, Operations Adviser, EA3DR. Preparation of this ICR was begun in July, 1995 prior to the Banlk's ICR mission to Indonesia from October 15 to November 7, It is based on material in the project file, and interviews with the task managers and implementing agencies. The aide memoire of the ICR mission is attached as Appendix A. The borrower's contribution is attached as appendix C.

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7 1 EVALUATION SUMMARY INDONESIA RURAL ELECTRIFICATION PROJECT (Loan 3180-IND) A. INTRODUCTION 1. By the late 1970s, rural electrification (RE) emerged as a specific objective of the Government of Indonesia's (GOI) development strategy, with the long-term goal to electrify all villages, and enable the basic service provided by electricity and to reduce the disparity between urban and rural areas. To assist GOI with its rural electrification program, the Bank completed its first rural electrification initiative in Indonesia in 1986, by preparing the Rural Electrification Review (Report No IND), which laid the groundwork for the continuing dialogue with the Government on policy issues. Specifically, the report recommended a program strategy and design which would, over a period of time through continual interventions, successively decrease the costs of rural electrification delivery, increase benefits of rural electrification, and increase the extent of cost recovery, by a combination of policy, technical and institutional measures. These recommendations became the basis for the project under review which was the Bank's first rural electrification loan for Indonesia. The total amount of the loan was US$ mnillion. The loan was signed on April 30, 1990, and became effective on July 30, 1990, and the loan closing date was extended by one year to June 30, B. PROJECT OBJECTIVES 2. The project had two overall objectives. The first objective was to support the construction of facilities to electrify rural villages. The second objective, which was envisioned as being achieved overtime through a continuous process, was to create a basis for and support the development of an efficient and sustainable rural electrification program in Indonesia. The specific objectives of the project were: i. To construct facilities to electrify about 4,500 new villages during 1990/91 and 1991/92; ii. To improve the planning of rural electrification subsector developmenthrough strengthening of the planning capability of sectoral organizations; iii. To reduce the unit cost of electricity distribution in rural areas through the revision and adoption of appropriate technical design and construction standards and improved procurement and construction procedures; iv. To maximize the economic benefits of rural electrification by increasing productive uses of electricity by small businesses and by increasing in-village connections; v. To reduce costs through enhancement of the role of village cooperatives/organizations implementing and operating the rural power systems; and vi. To strengthen PLN's and MOCSE's organizational units responsible for rural electrification.

8 2 C. IMPLEMENTATION EXPERIENCE AND RESULTS 3. The overall project implementation results have been satisfactory for both the physical (short-term objective), and the developmental (long-term) objective. The physical program targets were exceeded. Actual costs of equipment and materials tumed out to be about 37% lower than the SAR estimate, in-part because PLN employed lighter and cheaper equipment designs. As a consequence, upon PLN's request the original scope of the project was expanded in 1992 to finance 6,000 villages in total, and over the period 1990/ /94, taking into account PLN's implementation capacity and available financing from other sources. 4. The SAR estimate of time from loan signing to physical completion was about 48 months. This implementation period had to be extended by 12 months, the primary reasons being: (i) expansion of project scope, from 4,500 villages to 6,000; and (ii) delays in selecting consultants, and protracted and inefficient procurement procedures for equipment and materials to be used for the original project scope. 5. The revised intemal economic rate of return (IERR) for the time-slice (1990/ /95), financed in-part by the Bank, is 15%. By comparison, the SAR estimate of IERR for PLN's five-year Repelita V rural electrification investment program (1989/ /94), was 12%. The higher ex-post rate of return is due to lower equipment and material costs realized and a much higher proportion of households connected relative to the number of villages connected. 6. The cost savings and changes resulted in a loan cancellation of about US$67.7 million, of which about US$54.4 million was formally canceled in September 1994 upon the request of the Borrower, and the remaining undisbursed balance of about US$12.3 million was canceled on November 28, D. SUMMARY OF FINDINGS, FUTURE OPERATIONS, AND KEY LESSONS LEARNED 7. The results of the project have been satisfactory; it met or exceeded most of the major development objectives, though its implementation experienced delays in procurement and hiring of consultants in the early stages, and the extent of "absorption" by PLN, associated with the institutional strengthening objectives of the TA component was below expectation. The project initiated and enriched a policy dialogue on rural electrification, that has paved the way for more efficient extensification and intensification of rural electrification in Indonesia under a follow-on project (para 8). 8. The achievements generated from the project are highly likely to be sustainable. These achievements have to be seen in the context of a gradual and continuous learning process leading toward the goal of creating an efficient and sustainable rural electrification program. For example, changes in equipment standards and performance specifications and in network design, facilitated by the project, provide the basis for realizing significant cost reductions in the equipment and material costs of the physical program in the next stage of rural electrification which is now being carried out under the Bank financed Second Rural Electrification Project (Loan 3845-IND), that became effective in July Also, the positive experience gained with local participation -- in the form of Pola schemes -- and in a pilot program on productive use promotion, has provided the basis for seeing more ambitious and large scale promotion of these concepts in the Second Rural Electrification Project.

9 3 9. Several key strategic lessons can be drawn from this project that have implications for the design of future rural electrification projects. These are: (i) Properly structured local participation can help to significantly lower the cost of rural electrification: PLN's sub-contracting out a range of mainly labor intensive activities related to the distribution and customer services functions, to village level organizations on a fee-for-service basis (the 'Pola program'), has proven to be beneficial for all parties involved. This positive experience underpins the conclusion that an effective strategy for increasing the efficiency of RE delivery and its developmental impact is to incorporate in RE projects, programs that will directly help increase local participation. Under such programs, private sector village electricity organizations would assume management responsibility for a wider range of distribution functions in a given area, which if successful in the ultimate, could entail takeover of all distribution in an entire service area, including asset ownership. (ii) PLN must be made financially accountable for its rural electrification program: To facilitate that PLN achieves rural electrification delivery in an efficient and least cost manner, while at the same time working to maximize rural electrification benefits and the household connection rate, it is necessary to establish transparency and financial accountability for the rural electrification program. Further over a period of time, the Government's financial contributions to PLN should be phased down and ultimately limited to: (i) cost recovery for efficient expansion of rural electrification coverage; and (ii) coverage of operating losses, to the extent the Government's mandated retail tariffs to end users do not cover such costs of efficient and least cost provision. The Government's effort underway to corporatize PLN while also creating a multi-operater environment with private sector participation on a major scale, is expected to bring about the conditions under which the need for substantially eliminating tariff distortions will become unavoidable; conditions under which the Government will also find it politically easier to introduce such changes.

10 4 I. PROJECT IMPLEMENTATION ASSESSMENT A. Statement/Evaluation of Objectives 1. The Bank's involvement in Indonesia's rural electrification program began in 1986 with the preparation of the "Rural Electrification Review" (Report No lND). The sector report laid the groundwork for an ongoing dialogue with GOI to assist in its rural electrification policy formation and to assist implementation by PLN of an efficient and sustainable rural electrification program based on grid extension. Specifically, the report recommended a program strategy and design which would over a period of time through a series of interventions: (i) successively decrease the costs of rural electrification delivery, bringing them closer in line with best practices; (ii) increase the benefits of rural electrification; (iii) increase the mobilization of non-governmental resources; and (iv) increase the extent of cost recovery, all through a combination of policy, technical and institutional measures. These recommendations became the anchor for the Bank's first rural electrification lending operation -- the Rural Electrification Project ("RE I", Loan 3180-IND). 2. The overall objective of the RE I project was to support the development and implementation of an efficient rural electrification program in Indonesia. This objective was envisioned as being achieved through a continuous process of improvements, with the RE I project helping trigger the first phase of this process. All of the specific project objectives to be accomplished during the implementation period, listed in the following, were clearly stated and each directly supported the overall objective of the project: i. To construct facilities to electrify about 4,500 new villages during 1990/91 and 1991/92; ii. To improve the planning of rural electrification subsector development through strengthening of the planning capability of sectoral organizations; iii. To reduce the unit cost of electricity distribution in rural areas through the revision and adoption of appropriate technical design and construction standards and improved procurement and construction procedures; iv. To maximize the economic benefits of rural electrification by increasing productive uses of electricity by small businesses and by increasing in-village connections; v. To reduce costs through enhancement of the role of village cooperatives/organizations in implementing and operating the rural power systems; and vi. To strengthen PLN's and MOCSE's organizational units responsible for rural electrification. 3. The physical targets were achievable since they were in line with PLN's implementation record at the time of connecting over 2,000 villages annually. Realization of the broader developmental objectives was well within PLN's ability to achieve over time. However, several factors created weak incentives for top management as well as rural electrification managers to seek increases in efficiency and reduce costs for rural electrification delivery, while aggressively expanding rural electrification coverage and household connections. The major factors potentially inhibiting achieving success were: (i) PLN's organizational structure that was highly centralized, functionally vertically integrated, and had commingled responsibility 4

11 5 for urban-industrial electrification operations, which were largely commercial in nature and profitable, as well as for the subsidized rural electrification operations; (ii) a management approach best characterized as 'top down command and control', that provided little autonomy and accountability and weak incentives for line managers to seek out efficiency improvements; (iii) a corporate culture overly focused at the time on power generation; (iv) the extemal environment within which PLN had to function was one in which the Govemment established new village electrification targets and allocated budget for new investment without much regard for efficiency; and (v) the Govenmment's policy of nationally uniform retail tariffs resulted in PLN incurring financial operating losses, especially on RE operations outside Java. B. Achievement of Objectives Overall Results 4. The overall objective to support the development and implementation of an efficient rural electrification program in Indonesia was substantially achieved and formed the basis for establishing a sustainable rural electrification program. The physical program targets were exceeded. In addition, the key project interventions to help steer the rural electrification program design and implementation in the direction of increasing the efficiency of investment, increasing other benefits of rural electrification, and pilot efforts to increase resource mobilization from non-govemmental sources, were largely successful. 5. Rate of return. The intemal economic rate of return (IERR) of PLN's REPELITA V (1989/ /94) rural electrification investment program was estimated in the SAR at 12%. Revised estimates show the IERR of the five year time-slice financed in-part by the Bank (1990/ /95), to be 15%. Tlhe ex-post IERR calculation is presented in Annex D Cost savings and changes. Actual costs of equipment and material for the original project scope of 4,500 villages tumed out to be about 36% lower than the SAR estimate (US$203 million compared to US$320 million). These savings and cost changes of about US$117 million, can be largely attributed to the following factors. * Smaller poles and lighter conductors than those previously used for rural electrification were used in the project, whereas the appraisal estimate was based on PLN conventional construction. * As RE I was the first large rural electrification project undertaken by PLN, the SAR estimates of unit costs were not able to take into account economies of scale effects brought about by the large volumes of materials ordered and under an ICB tendering process. * Physical quantity estimates in the SAR were based on limited information, since at the time of project preparation PLN's experience with rural electrification was limited and reliable data for estimating material requirements for electrifying villages were not available. In the two year period between the preparation of SAR estimates and issuance of tender documents for distribution network materials under this project, PLN was able to collect more up to date data and accounts information which enabled it to sharpen the estimates of materials required. * intemational inflation was lower than projected in estimates of the price contingencies

12 6 7. During mid-year 1992, PLN requested and the Bank approved utilization of a portion of the cost savings (para 6) to finance the electrification of an additional 1,500 villages that represented a portion of the Repelita V target for years 1992/93 and 1993/ Implementation Schedule. The SAR estimate of time from loan signing to physical completion was about 48 months. This implementation period had to be extended by 12 months, from June 30, 1994 to June 30, 1995, the primary reasons being: (i) expansion of project scope, from 4,500 villages to 6,000; and (ii) delays in selecting consultants, and (iii) protracted and inefficient procurement procedures for equipment and materials. 9. Cancellation. The appraisal cost estimate for the original project scope, including contingencies, was US$329 million (US$325 million being PLN's share, and US$4 million being MOCSE's allocation). The total disbursed, taking into account the expanded project scope and implementation period discussed above, was about US$261.3 million (US$257.7 million for PLN, and US$3.6 million for MOCSE). About US$55.4 million was formally canceled in September 1994 upon request of the Government and PLN, and the undisbursed balance of about US$12.3 million, as of November 28, 1995 was canceled at that time. On the grant side, the undisbursed balance of about Yen 33.1 million was canceled at the time of closing the grant on November 13, Objective-specific results 10. To construct facilities to electrify about 4,500 new villages during 1990/91 and 1991/92, a project objective that was expanded in 1992, because of cost savings (para 6), whereby the Bank agreed to provide partial financing for PLN's rural electrification investment program for four years, 1990/91 through 1993/94. Under the expanded scope, Bank financing was provided to connect 6,000 villages in total, out of the Repelita target of 9,280 villages over the same period (1990/ /94). This target was exceeded bv about 20 percent. 11. To improve the planning of rural electrification subsector development through strengthening of the planning capability of sectoral organizations: This institutional development objective was substantially achieved in PLN. A Rural Electrification Master Plan was developed and a customer information system was installed to help in planning and monitoring rural electrification activities as well as assisting in economically justifiable village selection and prioritization. Further implementation of recommendations under the Master Plan is required to operationalize and mainstream the use of these systems, especially in the regions. 12. The sub-objective of pilot testing a financial reporting system for segregating PLN's accounts -- the preparation of financial information specific to PLN's rural electrification operation -- was only partially achieved. The rural electrification cost tracking system database software developed by consultants was to be pilot tested in Wilayah XI. However, formal testing was only begun after loan closing. Contributing factors that limited success include: (i) inadequate emphasis and priority accorded to the execution of this task as well as inadequate supervision of the consultant efforts; (ii) a late finish by the consultants which left no time for pilot testing; (iii) the lack of computerized accounting system in the pilot test region; and (iv) failure to actively involve PLN's accounting and financial staff in the design and testing phase. 13. To reduce the unit cost of electricity distribution in rural areas through the revision and adoption of appropriate technical design and construction standards and improved procurement and

13 7 construction procedures: This objective was substantially achieved. Adopting new technical designs and construction standards has been a learning process for PLN with evident success. For example, lighter poles and smaller conductor sizes from those conventionally used by PLN were adopted. Whereas PLN had previously used 11 meters poles for MV construction, for this project, 75 % of the poles were 9 m only. Similarly for LV construction, 75 % of the poles were 7 m instead of the conventional 9 m. For MV, 35 nun and 70 mm 2 AAAC conductor was used instead of the conventional 150 mm 2 and 210 mm 2, and for LV, 35 mm 2 conductor was erected instead of the previous mix of 35 mm 2 and 70 mm To maximize the economic benefits of rural electrification by increasing in-village connections and by increasing productive use of electricity by small businesses: Increases in in-village connections and productive use of electricity by small businesses through a pilot effort were substantially achieved. The number of households electrified over the four year period 1990/ /94, financed in part by the project, far exceeded the pro-rated Repelita target. Specifically, about 3.5 million households were connected over this period, in comparison to a target of about 2 million households. 15. A pilot program component under the project, designed to test ways to enhance the economic benefits of RE by increasing the productive uses of electricity by small businesses, yielded very encouraging results. In this pilot effort, PLN contracted NGOs in five areas to inform rural small businesses about the price, convenience and competitiveness of PLN electricity and about technological options in their business. As a result, over the project period nearly 9,000 small rural businesses have developed productive uses for electricity, which led to an increase in their employment levels from an average of 2.02 full-time and 0.93 part-time employees per enterprise, to 2.6 and 1.4 respectively, following the development of productive uses utilizing electricity. Capital for making the change over to electricity using equipment, was raised entirely from private sources. 16. To reduce costs through enhancement of the role of village cooperatives/organizations implementing and operating the rural power systems: This objective was substantially achieved. Prior to project implementation, the Pola I and Pola II program achievements were lagging behind REPELITA IV targets. At the project closing date, an estimated 2,260 KUDs were operating 1,800 Pola I and 460 Pola I & II schemes covering 11,000 villages of which 60% are situated Outside Java. Furthermore, approximately 90 MSA-gnrd and 20 MSA-diesel agreements were in operation, slightlv above of the target set in the REPELITA V. 17. The Pola program experience confirms that labor intensive distribution service activities can be effectively managed by KUDs and mitigate the need for PLN to expand its staff and organizational resources. PLN regional managers and staff generally view the Pola Program in a very positive light though they were unable to provide quantitative estimates of the cost savings because of limitations in the present cost accounting systems. Direct benefits also accrue to the VEOs such as, increased fee income and membership fees, while at the same time increasing local community employment and participation. 18. To strengthen PLN's and MOCSE's organizational units responsible for rural electrification: Overall this institutional development objective was substantially achieved with respect to PLN. In the case of PLN, this capacity building largely centered around the development of the Rural Electrification Master Plan and related training of staff for its Rural Electrification Division (DIVDES), by consultants. 19. MOCSE's regional offices demonstrated their capacity to coordinate and promote Pola I and II schemes. However, with regard to promotion of grid-msa schemes which are key to achieving major cost reduction through local participation by VEOs the record could have been better. Major constraints to expanding the Pola/MSA Programs are the weak skills base of KUD personnel, a fee structure that in many

14 8 instances is inadequate to attract qualified personnel and inadequate effort and facilitation by MOCSE staff from headquarters, from provincial (KANWIL) and district (KANDEP) levels. C. Major Factors Affecting the Project C.1 Factors not generally subject to government control 20. Consultant performance: Consultant performance partially affected achievement of project institutional development goals. Specifically, completion of the Rural Electrification Master Plan was delayed approximately one year due to a combination of the following: (a) delays in hiring of consultants; and (b) the consultant being unable to deliver the final product on time. With respect to the MOCSE, the institutional development study focused on conversion of rural electric cooperatives to electric utilities, rather than providing specific guidelines for structuring implementable strategies to improve MOCSE's capability to support the existing sectoral and institutional framework for rural electrification expansion. 21. Change in international inflation rates: International inflation rates leveled off toward the end of the 1980's and therefore, the price contingencies calculated for the project were overestimated, leading partially to overestimation of project costs and cancellation of loan funds. C.2 Factors generally subject to government control 22. Government policy imposed cumbersome and lengthy procurement procedures: Substantial delays in project implementation, partly due to compliance with lengthy Government procurement procedures, were a significant factor contributing to the one year project extension. 23. Allocation of GOI budget to PLN's rural electrification program: Thus far, the GOI's sector policy has not inhibited PLN's ability to achieve the project's objectives; however if not corrected, some aspects of the government's policy and practice will undermine the long term sustainability of the rural electrification program. Specifically, the GOI's process for allocating budget funds is based on a target number of villages connected. The budget allocation and oversight process continues to be driven by village (not household) electrification targets, and provide very weak incentives for PLN to expand beyond the target number of villages by aggressively seeking and implement efficiency improvement and cost saving measures. 24. Electricity pricing policy: The Government has a controlling say in the setting of retail electricity tariff, levels and structure. A key feature of this policy has been the subsidization of small residential & commercial users, that represent the overwhehting number of rural connections. This policy of the Government is intended to increase the benefits of electricity to rural communities by making it more widely affordable. However, its practical effect is to largely undermine the Government's objective. Despite the subsidies, the rural household electrification remain low at under 30 percent. The high lump sum payment required for the initial connection as well as the fixed monthly demand charge serve as barriers to increasing household connections. There is clear evidence that the household electrification ratio in rural areas can be increased significantly and quickly, by rolling these fixed charges into the energy Other constraints are due to: (i) PLN's administrative procedures and managementhat occasionally causing excessive delay in identifying, preparing the groundwork and implementing Pola schemes; and (ii) limitations in PLN's training capacity to train the necessary number of KUDs personnel for the very activities they will subsequently takeover.

15 9 charges. A second adverse impact of the Government tariff policy stems from the fact that the energy charge has been set below the variable cost of supply, a problem that is particularly acute in the smaller regional grids and isolated diesel operations outside Java. This policy leads to financial operating losses on PLN for any additional rural households connected, and therefore creates a strong dis-incentive for PLN to connect more rural households C.3 Factors generally subject to implementing agency control 25. Technical assistance supervision: The Institutional Development Study of MOCSE's Directorate General of Cooperatives Business Promotion did not provide specific practical recommendation on how to improve MOCSE's institutional capabilities to support the national rural electrification program. Instead, the study's recommendations called for a switch to a totally new sector organizational model for RE delivery; a model that was at substantial variance with the prevailing policy consensus across a broad spectrum of Government agencies -- DGEED, BAPPENAS, PLN, MOF --and that was also reflected in the Bank's Rural Electrification sector report. 26. Substantial delays in completion of the Rural Electrification Master Plan are attributable to a combination of factors, including the delay contractor selection by PLN which resulted in a late start, and consultants' inability to deliver all the final product on time. Testing a system for a separate rural electrification financial reporting system was a key pilot component in the Rural Electrification Master Plan, which was not delivered fully. 27. Construction supervision and monitoring: Construction supervision was undertaken by PLN's Wilayah or Distribusi Staff with no formal mechanism for centralizing progress or performance reporting. These deficiencies have been recognized by PLN, which has now institutionalized a Project Management Unit (PMU) with responsibility for tracking and monitoring progress and recommending corrective steps as necessary. C.4 Implementation delays also subject to implementing agency control 28. Procurement of goods and consulting services: Procurement practices and consultant selection procedures substantially delayed procurement of goods and hiring consultants. The overall slippage in procurement was 12 months and this was a key contributing factor in the one year project extension. There were lengthy delays between bid closing date and bid evaluation, delays between receipt of Bank NOL and preparation of final contract document, and in posting of the performance bonds by contractors. D. Project Sustainability 29. The achievements brought about by the project are highly likely to be sustainable. These achivements have to be seen in the context of a gradual and continuous learning process leading toward the goal of creating an efficient and sustainable rural electrification program. For example, changes in equipment standards and performance specifications and in network design, facilitated by the project, provide the basis for realizing significant cost reductions in the equipment and material costs of the physical program in the next stage of rural electrification which is now being carried out under the Bank financed Second Rural Electrification Project (RE II), that became effective in July Furthermore, as a direct consequence of the capacity building component of the project, the resulting advanced knowledge coupled with PLN's evolved state of readiness sets the stage for testing pilot distribution projects in the RE

16 10 II project that would form the basis for further cost reductions in the following stage of rural electrification. Also, the positive experience gained with local participation -- in the form of Pola schemes -- and the productive use pilot promotion, has provided the basis for seeking more ambitious and large scale promotion of these concepts in the Second Rural Electrification Project. 30. Operational Plans to ensure the sustainability of results achieved under the project have been discussed and agreed with PLN's management and with MOCSE, during the ICR mission. These plans are presented in Appendix B. E. Bank Performance 31. Overall, the Bank's performance has been highly satisfactory. In particular, the Bank has successfully maintained good working relations with PLN and MOCSE, identified and appraised the project, assisted PLN and MOCSE in project preparation, and supervised the project over a five year period. Project preparation included all necessary conditions to ensure sustainability of results as well as enhance the counterpart's rural electrification management, planning and implementing capacity. A total of seven supervision missions were fielded during the project implementation period. Problems encountered were clearly identified; solutions, agreed actions, and advice to problems were promptly provided to those concerned. Suitable follow-up actions were taken and where needed, mid-course corrections were made. The project was supervised by three task managers,with no discernable negative impact on project continuity and outcome. 32. There were a few weaknesses in the project design as it pertained to monitoring. The project lacked simple and specific requirements for progress reporting from the Borrower. Although PLN dedicated a lot of time and resources to preparing and submitting progress reports, most of the information contained therein was not useful to assess the status of the project. In the absence of a central project management unit (PMU), no single management unit within PLN was responsible for coordinating and monitoring the outcome of the project and undertaking timely interventions and corrective actions as necessary. This also made it difficult for Bank staff to supervise and monitor progress of the project, while requiring additional time and financial resources to supervise the project. F. Borrower Performance 33. The overall assessment of PLN's and MOCSE's performance is satisfactory. All commitments made during the negotiations and covenanted under the loans were fulfilled. Given the fact that the project was Indonesia's first rural electrification loan with the World Bank, it did lay the foundation for PLN to bring its rural electrification operation closer in line with good practice. Despite the favorable outcomes, there were a few deficiencies on the Borrower's part in the execution of the project including: * The project suffered from substantial delays in implementation due to lengthy procurement times driven by requirement imposed by GOI procurement procedures, as well as cumbersome, lengthy and inefficient procurement procedures and practices internal to PLN. Both of these were significant contributing factors to the one year loan closing date extension.

17 11 * Supervision efforts by PLN of the key technical assistance (TA) elements of the project, appear to have been directed more to process related matters and to a lesser degree to the substance. Considerably more attention and emphasis needed to be paid to learning directly from the project consultants, especially regarding the Master Plan and related models and methodologies. There has been a lower than expected "absorption" associated with the skills transfer and instititutional strengthening objectives of the TA, and the net result is a continued and high dependency on consultants. * Inadequate emphasis and priority were accorded to the task of designing and pilot testing of a system for segregation of RE accounts, with a view to setting the stage for mainstreaming the approach within PLN. The resultant lack of progress sets back achievement of a key goal of the Government; establishing financial accountability for, and transparency in PLN's RE operations. As a consequence, PLN's efforts to restructure its organization and effectively separate its commercial operations from its socially mandated operations, as well as the Government's push to achieve further efficiency gains and measurable cost reductions in RE delivery, to reduce its contributions to PLN financing, will be significantly hampered. G. Summary Assessment of Outcome 34. The results of the project have been satisfactory; it met or exceeded most of the major development objectives, though its implementation experienced delays in procurement and hiring of consultants in the early stages, and 'babsorption" by PLN associated with the institutional strengthening objectives of the TA component, was below expectation. In terms of physical achievement, the project electrified a total of 6,000 villages, one third more than the original target. Furthermore, PLN electrified these villages at lower costs than originally estimated, and was able to reduce equipment and material costs by employing "lighter" and more appropriate designs. H. Future Operations 35. The Bank's Second Rural Electrification Project (Loan 3845-IND - 'RE II Project'), builds on the foundation set by the RE I project. The RE II project, which was declared effective in July 1995, has a physical component comprising the electrification of 7,000 villages and 2.1 million rural customers, over the years 1995/ /97. Key policy components of the RE II project are: a) irnplement institutional changes required to enhance the organizational and management efficiency of undertaking RE within PLN, consistent with the ongoing restructuring of PLN; b) establish incentives for private sector and local cooperatives to take an increasingly larger share of RE distribution and alternative energy development within the framework of a leastcost RE Master Plan, specifically by implementing: (i) a published power purchase tariff based on PLN's "avoided cost of supply" and standard contract for power purchases by PLN from small power producers; (ii) a bulk supply tariff for wholesale sales of power by PLN to potential retail distributors of electricity based on PLN's economic cosst of supply; c) continue PLN's institutional development to undertake RE planning and implementation, especially at the regionalevel;

18 12 d) substantially increase the base of local participation in rural electrification by expanding the Pola Program, in terms of numbers, scope of services, and regional coverage; e) expand, with a view to mainstreaming the small rural business services component to promote productive uses of electricity, including participation by NGOs; and f) undertake pilot projects to test the adaptability of low cost 'low tech" equipment designs, low cost network reticulation designs and more efficient construction management methods for full scale implementation at a subsequent stage, possibly supported by a future Bank loan. 1. Key Lessons Learned 36. Several specific key lessons, which have operational and strategic implications for the design of future rural electrification projects, can be drawn from this project. These are discussed in the following. Strategic Lessons 37. Properly structured local participation can help to significantly lower the cost of rural electrification: PLN's experience of contracting out a range of mainly labor intensive activities in distribution and retailing to village level organizations on a fee-for-service basis, the 'Pola program"-- has proven to be beneficial for all parties involved. This positive experience underpins the conclusion that an effective strategy for increasing the efficiency of RE delivery and its developmental impact is to incorporate in RE projects, programs that will directly help increase local participation. Under such programs, private village electricity organizations would assume management responsibility for a range of distribution functions in a given area, which if successful, could ultimately, entail takeover of an entire service area, including asset ownership. 38. PLN must be made financially accountable for its rural electrification program: To facilitate that PLN achieves rural electrification delivery in an efficient and least cost manner, while at the same time working to maximize rural electrification benefits and the household connection rate, it is necessary to establish transparency and financial accountability for the rural electrification program. Further over a period of time, the Government's financial contributions to PLN should be phased down and ultimately limited to: (i) cost recovery for efficient expansion of rural electrification coverage; and (ii) coverage of operating losses, to the extent the Government's mandated retail tariffs to end users do not cover such costs of efficient and least cost provision. The Government's effort underway to corporatize PLN while also creating a multi-operater environment with private sector participation on a major scale, is expected to bring about the conditions under which the need for substantially eliminating tariff distortions will become unavoidable; conditions under which the Government will also find it politically easier to introduce such changes. Operational Lessons 39. Central Project Management Unit (PMU) benefits overall project coordination and accountability. The project did not require PLN, the implementing agency, to establish a central project

19 13 management and implementation supervision unit. As a result, no senior PLN manager was responsible for monitoring progress and the outcome of the project, and for initiating corrective actions in a timely manner. This made it difficult for Bank staff to supervise the project while also adding to the time and financial resources devoted to the supervision activity. 40. Technical audits could be a powerful aid in monitoring the efficiency of rural electrification delivery. Cost reductions in equipment and material costs were realized in the project. However, the project did not incorporate any means to verify that the resources were used efficiently and maximized the intended developmental impact on the ground, for example by conducting a technical audit on a sampling basis. Inter alia, a technical audit would focus ex-post on quality assurance and efficiency as it relates to program aspects such as hardware utilized, network design implemented, erection, inventory management, speed of customer connections following village access to electricity, operations and maintenance procedures and actions to ensure that the equipment performs to standards throughout its intended life. 41. Cumbersome procurement processes are a leading cause of project implementation delays. PLN's procurement process results in a lengthy procurement cycle which adds delays and unnecessary costs to projects 5 that it undertakes. Speedier procurement processing and more efficient inventory management and materials handling are key to increasing the efficiency of the rural electrification investment program. Adoption of performance based specifications for new equipment, standardized bidding documents and a just-in-time procurement, inventory and installation policy could significantly reduce construction and equipment procurement costs. M:\ICR-REI\PLNICR3.DOC December 28, 19952:43 PM The problem of extended procurement cycle can be found in the systemic inefficiency endemic not only to the power sector at large but also country wide.

20 14 Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not applicable Macroeconomics policies O D O N Sector policies O 0 0 U/a Economic objectives * 0 Institutional development U PLN U MOCS 0 0 Physical objectives *0 0 0 Poverty reduction U Gender concems Other social objectives N Environmental objecti.'es n 0 0 Public sector management 0 * 0 0 Private sector development 0 * 0 0 B. Project sustainability Likely Unlikely Uncertain * 0 0 C. Bank perfomiance Highly satisfactory Satisfactory Deficient Identification *0 0 Preparation assistance 0 a3 Appraisal *0 0o Supervision 0 N 3 D. Borrower performance Highly satisfactory Satisfactory Deficient Preparation 0 * PLN * MOCSE Implementation: Physical U PLN * MOCSE 0 Institutional 0 * PLN * MOCSE Covenant compliance * 0 0 Operation 0 U 0 E. Assessment of outcome Highly satisfactory Satisfactory Deficient * 0 0 /a A sector policy dialog was carried on with GOI in parallel to project preparation and implementation, but policy changes were not an objective of the project.

21 15 Table 2: Related Bank Loans/Credits Loan/credititle Purpose Year of approval Status Preceding Operations 1. none * Reduce the cost of and Following Operations increase the efficiency of RE 1. Second Rural Program by (i) least-cost 1995 Under implementation Electrification Project planning, restructuring (Loan 3845-IND) PLN's RE operations, (ii) Scheduled for strengthening local completion in 1998 participation, (iii) promoting productive uses of electricity in rural areas. * expand coverage & supply of electricity * encourage private sector to share in RE distribution

22 16 Table 3: Project Timetable 1 1 Date actual/ Steps in project cycle Date planned latest estimate Rural Electrification Review 11/86 Initial Executive Project Summary 12/86 Identification 2/87 2/87 Initial Project Brief 4/87 Preparation 5/87 5/87 Preparation 9/87 9/87 Preparation 12/87 12/87 Revised Executive Project Summary 2/88 Preparation 5/88 Preparation 10/88 Pre-appraisal 4/89 Revised Executive Project Summary 5/89 Final Executive Project Summary 6/89 Appraisal' 8/88 7/89 Negotiations 1/ Letter of development policy (if applicable) n.a. n.a. Board presentation 4/ Signing 5/ Effectiveness 8/ Supervision 9/90 Supervision 3/91 Supervision 11/91 Supervision 7/92 Supervision 4/93 Supervision 10/93 Supervision 1/94 Project completion Loan closing l Preappraisal mnission was converted to appraisal mission.

23 17 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ millions) Bank FYI' '90 '91 '92 '93 '94 95 Appraisal estimate Actual " / Actual as % of estimate Date of final disbursement 10/31/95 ' US$ 55,440,000 was canceled from the Loan effective Dec. 2, 'US$ 261,264, Undisbursed balance effective November 28, 1995 of US$12,295, was cancelled. Table 5: Key Indicators for Project Implementation 1. Key implementation indicators in SAR Estimated Actual 1. none n.a n.a II. Modified indicators (if applicable) 1. none n.a n.a III. Other indicators (if applicable) none n.a n.a./ Table 6: Key Indicators for Project Operation 1. Key operating indicators in SAR/President's Report Estimated Actual 1. none n.a n.a II. Modified indicators (if applicable) 1. none n.a n.a III. Other indicators (if applicable). none n.a n.a

24 18 Table 7: Studies Included in Project Study Purpose as defined at Status Impact of study appraisal/redefined I Institutional assess MOCSE's DG of Completed No impact on the RE I Development Study Cooperatives Business because the study largely for the DG for Promotion capabilities focused on switching to a Cooperatives with respect to its rural totally new model of Business Promotion electrification functions delivery of RE services, in implementing rather than incrementally management services arrangements with PLN improve MOCSE's capacity in a gradual manner to achieve sustainable results. 2 (i) Master Plan for (i) upgrade PLN's Completed Enable PLN to (i)establish rural electrification planning capability on for each region a (ii) Computerize RE RE computerized RE Planning distribution system (ii) standardize/ System (REPS), the yearplanning and design computerize technical bv-year electrification, cost (iii) Establish MIS specs. & construction effective villages selection & Database for RE standards on bid and prioritization (ready to documents be used in 4 regions);- (iii) monitor countrywide RE activities (ii) MIS to efficiently manage its RE expansion program (Ready for 4 regions); (iii) tracking of RE costs (ready for 1 region).

25 19 Table 8A: Project Costs Appraisal estimate Actual/latest estimate (US$ million) (US$ million) Item { Local Foreign Local Foreign costs costs Total costs costs Total I. PLN Component Line material and poles Transformers & equipment Diesel sets Construction costs Houseconnections Productive uses Technical assistance Training Planning & construction Operations Engineering/supervision Base Cost Physical contingencies n/a n/a n/a Price contingencies n/a n/a n/a Total Project Cost PLN Interest during construction TotalFinancingPLN II. MOCSE Component Institutional development Training (plan. & construct.) Equipment for training Base Cost Physical contingencies Price contingencies Total Project Cost MOCSE Interest during construction Total Financing MOCSE Total base cost Total physical contingencies n/a n/a n/a Total price contingencies n/a n/a n/a Total Project Cost Total interest during construct TOTAL FINANCING REQ

26 20 Table 8B: Project Financing Appraisal estimate Actual/latest estimate (US$ million) (US$ million) Foreign Foreign Local costs Costs Total Local costs costs Total PLN Component IBRD PLN Internal Sources 'a GOI Equity Contribution Japanese Grant Facility Subtotal MOCSE Component IBRD GOI Equity Contribution ' Japanese Grant Facility Subtotal Total F nancing h : \ainterest during construction on the proposed Bank loan.

27 21 Table 9A: Economic Costs and Benefits (IERR) Appraisal Estimate (Rp billion) Re-estimate (Rp billion) Base Case IERR (%) 12% on PLN's Repelita V Development 15% for the development Program 1989/ /94" program 1990/91-through June 30, 19952/ Base Case NPV(Rp billion 1993) Major Costs n.a. 1. Investment 2,579 2, O&M Costs 476 1, Grid Supply 2,871 5, Diesel Supply Total 5,969 9,285 Major Benefits 1. Residential 7, Non-residential Total 6,102 9,722 Number of villages electrified = 11,600 Number of households connected 2.5 million Number of villages electrified = 15,880 Number of households connected = 5.7 million

28 Table 10: Status of Legal Covenants Agreement Section Type of Original Revised Description of Covenant Current Comments Covenant Fulfillment Fulfillment Covenant Status Date Date Description Loan 1.02(b) General Subsidiary loan agreement between GOI In Compliance Condition of l Conditions and PLN. effectiveness 3.01(d) GOI, through MOCSE, would Project implement an action program for: Complied Implementation A) institutional dcvelopment of DG Arrangements Cooperatives Business Promotion Complied B) staff training Complied C) strengthening village cooperates in l rural electrification Complied 3.01(b) GOI would onlend US$325.0 million Flow and equivalent of the loan proceeds to PLN Authorization of for 20 yrs. including a grace period of 5 In Compliance Project Fund yrs., at the Bank's standard variable interest rate plus fees of 2.50%. 4.01(b) (ii) PLN to submit audited financial Accounting/ accounts for Part B of the project within Complied Audits 9 mos. after the end of each FY. 4.02(a) Monitoring/ PLN/GOI would review with Bank its Reviews annual investment plan for the next FY. In Compliance l 4.02(b) Review annual PLN's development plan Monitoring/ and associated financial forecast and In Compliance Reviews financing plan 4.04 GOI would review with Bank by Jan 31 Monitoring/ of each year, until project completion, Reviews PLN's RE investment plan for the next Complied l fiscal year before its final approval.nal_approval. Project 2.06 Monitoring/ PLN would review with Bank its action Reviews of plan for efficiency improvement for all Being Performance of its operations Implemented 4.01(b) (iii) Provision of segregated financial and Accounting/ operating information on RE activities Being l Audits along with PLN's annual accounts Implemented 4.02 Monitoring/ PLN will periodically review its LRMC Reviews and tariff structure and discuss with the In Compliance Tariff Structure Bank

29 Table 10: Status of Legal Covenants (cont.) Agreement Section Type of Original Revised Description of Covenant Current Comments Covenant Fulfillment Fulfillment Covenant Status Date Date Description Project 4.03 Accounting/ PLN should revalue annually its fixed (cont.) Audits assets and accumulated depreciation. In Compliance 4.04 PLN cannot take on new debt that would Financial reduce its debt coverage ratio below 1.5 In Compliance 4.05 PLN should prepare annually a 10-yr. Monitoring/ financial forecast based on the dev. plan Reviews & a corresponding 5 yr. financing plan In Compliance and review with the Bank 4.06(a) (i) PLN shall take measures to achieve a Financial ROR of at least 8% for its Java Complied operations beginning FY89/ (a) (ii) PLN shall take measures to achieve a n.a: covenant Financial break-even on its Non-Java operations Being superseded by beginning FY92/93 Implemented 8% on countrywide operation 4.06(b) Monitoring/ Before Dcc. 31 each year, PLN will Reviews review the adequacy of its tariffs to meet In Compliance. the ROR covenant Schedule 2 Project PLN would select villages to be Item I Implementation electrified based on criteria acceptable to Complied Arrangements the Bank Schedule 2 PLN would review with Bank by Nov. 15 Item 2 Monitoring/ of each year its annual RE investment Complied Reviews plan Schedule 2 PLN would implement an action Item 3 program for: A) the pilot demonstration program for promoting productive uses Complied Project B) upgrading its planning capability for Implementation optimizing long-range RE Development Being Arrangements Plan Implemented C) appropriate RE technical & construction standards Complied D) database & MIS for RE operations Being Implement. E) RE staff training Complied l

30 24 Table 11: Bank Resources: Staff Inputs Stage of project cycle Planned Revised Actual Weeks US$ (000) Weeks US$ (000) Weeks US$ (000) Through appraisal 23.0" n.a 45.51" n.a Appraisal--Board 23.0" n.a 30.01' n.a Board--effectiveness " n.a Supervision 25.02' 102.l l 26.32w 98.91/ Completion TOTAL Note: " Indicated in the Final Executive Project Summary (FEPS) dated June / Only include planned and revised staff weeks and costs for fiscal year 1994 to 1996

31 25 Table 12: Bank Resources: Missions Number Weeks Specialized Implemen- Develop Stage of Month/ of in staff skills tation -ment Types project cycle year persons field represented status Impact of problems (i) MME./PILN Through Power Eng. Identitication n/a opposed to appraisa 2/ Power Econ. creation of new appraisal Fin. Analyst agency for RE; (ii) MIME reluctant to play an active roles for RE project, (iii) agreed to pilot of VEO program & time slice of PLN' s RE program (i) MME & PLN 5/ Power Eng. Preparation n/a opposed to using a Fin. Analyst I differential tariff structure in contiguous areas for rural customer; (ii) MOCSE's weakness & slow in preparing VFO pilot project. (i) PLN and 9/ Power Eng. Preparation n/a MOCSE made no Power Econ. 1 progress to prepare Fln. Analyst prolect, (ii) MIME & PLN could not accept the bulk supply tariff for VEO as recommended in the Sector Review MOCSE's VEO 12/ Power Eng. Preparation n/a pilot project made Power Econ. III iittle progress due Fin. Analyst mainly to the lack of cooperation between MOCSE & NMM (i)djleb, MME 5/ Power Econ. Preparation n/a continued to be Fin. Analvst IV slow in preparing Inst. Special. and coordinate Prod Uses with PLN and SpecialisL.(con) 10/88 Power Eng. 4 3 Power Distri. Preparation n/a Plan.(con) V Power Econ. Fin. Analyst MOCSE regarding VEO component of the project.

32 26 Table 12: Bank Resources: Missions (cont.) Number Weeks Specialized Implemen- Develop Stage of Month/ of in staff skills tation -ment Types project cycle year persons field represented status Impact of problems Concern regarding Appraisal 4/ Fin. Analyst Reappraisal n/a the availability of thproughboar through Boar Power Eng. Prod. Uses fund to cofinance the project approval Spec. (con) (financing gap). (i) financing gap; 7/ Fin. Analyst Appraisal n/a (mission Power Econ. recommended to Power Eng. increase Bank Prod. Uses financing to cover Spec,con) all foreign exg. Board approval n/a through effectiveness Suner.ision 9/ Power Eng. Supervision n/a Superv-s'on Proc. Spec. Power Eng. Supervision I (i) local 3/ Power Eng. consortium Institut. Spec. bidding; (ii) PLN/MOCSE taking steps to finalize consultant contracts; (iii) J. Irving replaces N. Tin as task manager (i) progress 11/ Power Eng. Supervision I appointing Proc. Spec. consultants very slow (i) consultant 7/ Power Eng. Supervision I contracts for Proc. Spec. Master Plan & Fin. Analyst Productive Uses Fin. Analyst held up by BAPPENAS; (ii) further scope for RE cost reductions; (iii) little progress in RE monitoring and control facilities

33 27 Table 12: Bank Resources: Missions (cont.) Number Weeks Specialized Implemen- Develop Stage of Month/ of in staff skills tation -ment Types project cycle year persons field represented status Impact of problems Supervision 11/ Power Eng. Supervision n/a same 590 form as (cont.) previous mission (i) further scope 4/ Energy Econ. Supcrvision I for RE cost Power Eng. reductions; (ii) Proc. Spec. monitoring & Prod Uses Con control of RE construction costs; (iii) SBS program needs strengthening; (iv) A. Sanghivi replaces J. Irving I as task manager (i) mnid-course 1/ Energy Econ. Supervision 1 correction & Power Eng. program Prod Uses Con strengthening for SBS required, (ii) Master Plan critical path activities behind schedule Completion 10/95 3 Energy Econ ICR mission ENTER YOUR NAME HERE M:ICR-REI\PAGEI 5.DOC January 5, :16 PM

34 28 ANNEX A AIDE MEMOIRE Indonesia: RE I - Implementation Completion Report Aide Memoire - World Bank Mission Jakarta, November 3, INTRODUCTION 1.1 This Aide Memoire records the findings of a World Bank Power Mission comprising Mr. Arun P. Sanghvi (Mission Leader), and Messrs. John Tulloch and Tig Tuntivate, who visited Indonesia during October 15 through November 7, 1995, for preparation of the Implementation Completion Report (ICR) for the Rural Electrification Project, Loan IND ("RE I" Project). The mission records its thanks to PLN, MOCSE and GOI officials for the assistance provided in ICR preparation and acknowledges the courtesies and cooperation extended. 2. ACTIVITIES UNDERTAKEN 2.1 The mission: (i) collected the data necessary to prepare the Statistical Tables in the ICR, and (ii) reviewed other background data considered essential to developing the mission's analysis. Extensive discussions were held with PLN and MOCSE staff and management to better understand and interpret the available data, before arriving at the assessment of the RE I Project as regards the degree of achievement of project objectives, prospects for the project's sustainability, assessment of project outcome as well as assessment of Bank and Borrower performance, and the lessons leamed. In addition, the mission provided considerable support to the Borrower for preparing their contribution to the ICR. 3. ACHIEVEMENT OF OBJECTIVES -- OVERVIEW OF FINDINGS 3.1 In summary, the mission's major findings are * The RE I project substantially achieved its main objective to support the phased development and implementation of an efficient and effectve rural electrification program in Indonesia and strengthening key sector institutions. Key project interventions aimed at increasing efficiency of RE investment - design and construction -- increasing the benefits of RE, and increasing resource mobilization from non-governmental sources were largely a success. * The number of villages electrified over the four years of REPELITA V (1990/ /94), and financed in-part by the project, exceeded the target by about 20%; the number of households electrified over this period exceeded the target by 35%. Specifically, about 2.7 million households were connected to the gnrd over this period, in comparison to a target of about 2 million households. * Savings in equipment and matenal costs incurred for the project, amounted to about 30% as compared to costs expenenced bv PLN under pre-project practices, i.e., the reahzed costs were

35 29 ANNEX A about $45,000 per village electrified as compared to SAR estimates of about $65,000 per village, which were based on pre-project experience. * PLN prepared a Rural Electrification Master Plan together with supporting management information system and models, to facilitate economically justifiable village selection and prioritization. The completion of this Master Plan represents a significant milestone and a major step in helping rationalize RE planning and in identifying a least cost strategy for electrifying the approximately 30,000 remaining un-electrified villages in rural Indonesia, including the determination of village electrification targets by region. * A pilot program component under the project, designed to test ways to maximize the economic benefits of RE by increasing the productive uses of clectricity by small businesses, yielded very encouraging results. In this pilot effort, PLN contracted NGOs in five areas to inform rural small businesses about the price, convenience and competitiveness of PLN electricity and about technological options in their business. As a result, nearly 9,000 small rural businesses have developed productive uses for electricity, which has led to an increase in their employment levels from an average of 2.02 full-time and 0.93 part-time employees per enterprise, to 2.6 and 1.4 respectively, following the development of productive uses utilizing electricity. Capital for making the change over possible to electricity using equipment, was raised entirely from private sources. - The "Pola program" experience under the project-- wherein PLN sub-contracted out a range of mainly labor intensive activities im distribution and retailing to village level organizations on a fee-for-service basis-- has proven to be beneficial for all parties involved. As of the closing date of the project, an estimated 2300 village level organizations - cooperatives - compared with about 817 organizations at the time of appraisal, were contracted by PLN to operate nearly 2,500 different schemes covering 11,000 villages. This experience confirms that many labor intensive distribution service activities can be effectively undertaken by properly trained local organizations with resultant cost savings for PLN, while also benefiting local organizations through the provision of fee income, technical training as well as local community employment participation. * Changes in equipment and performance standards and in network design developed during the course of the RE I project, have provided the basis for achieving significant cost reductions in equipment and material costs of the physical program in the next stage of the RE program under the Bank's ongoing lending operation, the Second Rural Electrification Project ("RE II", Loan 3845-lND). * Collection of data necessary for computing the ex-post EIRR was still ongoing at the time of preparation of this aide memoire. PLN assured the mission that the remaining data will be made available to the mission, pnror to its departure from Indonesia. Based on the preliminary data available at this stage, it is estimated that the project ex-post EIRR is expected to exceed the appraisal estimate. 3.2 Measured against most yardsticks, the "scorecard" for project performance vis-a-vis its objectives is favorable. However, there were three significant deficiencies in project execution on the Borrower's part:

36 30 ANNEX A * The project suffered from substantial delays in implementation due to lengthy procurement times driven by the requirements imposed by GOI procurement procedures, as well as cumbersome, lengthy and inefficient procurement procedures and practices internal to PLN. Both these were significant contributing factors to the one year loan closing date extension; * Supervision efforts on part of PLN related to the key technical assistance (TA) elements of the project, appear to have been directed more to process related matters and to a lesser degree to the substance. Considerably more attention and emphasis needed to be paid to learning directly from the project consultants, especially regarding the Master Plan and related models and methodologies. There has been a lower than expected "absorption" associated with the skills transfer and institutional strengthening objectives of the TA, and the net result is a continued and high dependency on consultants. * Inadequate emphasis and priority were accorded to the task of designing and pilot testing of an automated system for segregation of RE accounts, with a view to setting the stage for mainstreanung the approach within PLN. The resultant lack of progress sets back achievement of a key goal of the Government; establishing financial accountability for, and transparency in PLN's RE operations. As a consequence, PLN's efforts to restructure its organization and effectively separate its commercial operations from its socially mandated operations, as well as the Government's push to achieve further efficiency gains and measurable cost reductions in RE delivery, to reduce its contributions to PLN financing, will be significantly hampered. 4. OPERATIONAL PLAN 4.1 A plan was agreed with PLN for the operational phase of the RE I project (1995 to 2010). PLN's Operational Plan ensures that the materials and equipment installed under the project will function in accordance with performance expectations and over the useful economic life. The plan calls for the utilization of established procedures for operations and maintenance that PLN staff must use. These procedures, which are defined in comprehensive documents, were reviewed by the mission and found to be in line with good practices worldwide. The operational plan also identifies the qualifications and skill levels of personnel to be assigned to undertake the required operations and maintenance as well as any special training requirements. As regards the TA component, the RE Master Plan, the village selection economic model and the management information system, that were developed under the project, are being operationalized under the ongoing RE II project. PLN's Operational Plan also outlines the strategy for increasing productive uses of electricity as a follow on from the lessons leamt in the Small business Services (SBS) program in the RE I project. 5. NEXT STEPS 5.1 The mission's draft final ICR report, reflecting the above findings is expected to be sent to GOI, PLN and MOCSE by no later than November-end. Since the findings noted above as well as the underlying analysis have been discussed at length with the Borrower and implementing agencies during the course of the ICR mission, and an advance draft of the draft final ICR report was also provided and discussed. It was agreed that the Borrowver and implementing agencies concerned would forward remaining comments if any, to the Bank, as well as anv comments on the draft final ICR report by no later than December 10, 1995.

37 31 ANNEX B OPERATIONAL PLAN RURAL ELECTRIFICATION PROJECT (LOAN 3180-IND) A. P.T. PLN (PERSERO): OPERATIONAL PLAN I Physical -- Distribution Network and Isolated Diesel Generation 1. Background. Through the RE I Program, PLN has made substantial investment in distribution networks and isolated diesel generation sets. This plan sets the basis upon which PLN will ensure it maximizes the return on investment over the economic life time of the materials and equipment installed 2. Maintenance Program 2.1 Isolated Diesel Generation Sets. PLN has established comprehensively documented maintenance procedures for isolated diesel generation sets. These procedures entitled guidance and instruction of maintenance of diesel power plant and dated March 17, 1995 have been distributed to all regions where isolated diesel generation sets have been installed. The procedures detail the type and frequency of maintenance to be provided and have an established reporting system to monitor adherence to procedures. The reports are submitted to Operation Division in the Head Office quarterly. maintenance is carried out in accordance with manufacturers specifications a copy of which is held for each set. 2.2 Distribution Network. Maintenance on the distribution network in rural areas is managed by the regional office (Wilayah). Regular patrols of lines takes place and any deficiencies are noted and corrected. In addition, a faults service is provided to provide rapid response to faults as they occur. The maintenance and faults are conducted in accordance with procedures entitled Quality, Reliability and Efficiency Indicator of Electric Supply (Circular letter No. 006/PST/88) dated 31, March These provide for regular reporting and monitoring with reports being presented quarterly to Customer Services Division. 3. Operation Procedures 3.1 Isolated Diesel Generation Sets. Currently, PLN is prepanrng detail operation procedures for isolated diesel generation sets. These are expected to be completed and made available to the region by In the meantime, operational personnel are provided with manufacturers handbook manuals and required to operate the set, strictly in accordance with these. 3.2 Distribution Network. Personnel operating the distribution network are provided with manufacturers handbook manuals as appropriate i.e., for switch gear and operational equipment. They are required to operate the equipment strictly in conformity with the manual. 4. Qualification of Personnel 4.1 Isolated Diesel Generation Sets. All personnel maintaining or operating isolated diesel generation sets are required to be trained to have the following qualifications: (a) Diesel Operator II; (b) Diesel

38 32 ANNEX B Technician II; (c) Diesel Electrician II; (d) Diesel Operator I; (e) Diesel Technician I; (f) Diesel Electrician I. Training is provided at PLN Training Center. 4.2 Distribution Network. All personnel under taking operational or other works on distribution network lines are required to be trained and qualified as follow: (a) Hot Line Maintenance; (b) Jointing Supervision; (c) LV and MV Stringing; (d) Switching (LBS, CBS) Operation. 5. Master Plan for Future Development As part of the project a RE Master Plan was developed to enable PLN to select and prioritize villages for electrification. To date, data bases have been established in all of the region and hardware have been installed in four of the regions. It is PLN's plan to extend this to cover all regions and to fully train sufficient staff in the regions to enable its full usage throughout Indonesia on future rural electrification projects. II. Increase Productive Uses of Electricity 1. Objective. PLN's Operational Plan to increase revenue from its rural electrification program concentrates on increase productive uses of electricity among potential and existing business enterprise customers. The Plan is based on experience gained from Small Business Services pilot program under the RE I. The Plan and implementation activities are in 25 areas covering all of PLN's 14 regions, to be carried out under the RE II project. PLN's ultimate goal is to increase up to 100% its share of productive uses kwh energy market of the rural industries in the targeted sub-sectors. 2. Focus/Targeted Approach. In general, the opcration Plan focuses on attracting the initial group of small businesses in the targeted area to change over from manual or diesel energy to PLN services through short, intensive information and advisory campaigns. Second, the enterprise selection criteria emphasizes enterprises in industrial sector with potential for high increase in kwh sales rather than all small business. Third, implementation will have an increased involvement of PLN's branch and subbranch staff, more effective screening, improved monitor and reporting, standardized promotional materials, and a central NGO training capability for NGO and PLN field staff. The approach is designed to maximize potential benefits of the promotion activities, while at the same time minimizing the unit costs of the activities. 3. Strategies. Specifically, the Plan employs the following strategies: * First, as the key of marketing strategy the Plan addresses infor-mation constraints to productive uses by utilizing local NGOs to actively advise customers and potential customers on price and technical aspects of PLN services and technology options for electric motors. The Plan will utilize NGOs to organize intensive promotional campaigns carried out for approximately 10 months in each area to attain the most cost effective results. * Second, reduce tariff administration barriers to increased productive uses by: (a) providing clear and possibly revised guidance to field staff on the criteria to be applied in classifying small industry under the Il or 12 tariff code; (b) correctly classifying new small industry customers under the II or 12 tariff code; and (c)reclassifying as I1 or 12 small industries presently assigned an RI/R2 tariff code.

39 33 ANNEX B * Third, strengthen PLN corporate capabilities to provide services to rural business by for example: (a) training PLN staff responsible for business promotion ensuring that logistical, supplies, administrative and other support are adequate; and (b) issuing operational directives setting out PLN's policies and promotion efforts for rural businesses. * Fourth, the implementation of productive uses promotion will be monitored and the outcome will be evaluated on a regular basis. * Fifth, the Plan recognizes that the quality of PLN's electricity services to rural business is key to the success and sustainability of the program. Good quality of service also ensures: (a) loyalty and increased sales among and business customers, and (b) increase in business customer connections. Therefore, the Rural Electrification Office and the designated offices in every Region will also monitor the quality of services. B. MINISTRY OF COOPERATIVES AND SMALL ENTERPRISES DEVELOPMENT (MOCSE): OPERATIONAL PLAN 4.1 Pola I, II and MSA arrangements are being expanded in the RE II project. Also a key features of the RE II project is to prepare for the development of Pola III services under which the cooperative purchases electricity in bulk from PLN and takes over all distribution function as well as ownership of all related assets. 4.2 The next operational phase of the Pola program calls for a near doubling of the total number of Pola I, II and MSA programs (5,700 by the end of FY 1997/98), with a 2.5 fold increase in the MSA-grid contract to about 600 by the end of FY 1997/98. Success in expanding the Pola program will depend on MOCSE and PLN's ability to work together to address the major constraints to expand efficiently and rapidly. 4.3 Further, the operational plan will entail: (i) strengthening of the skill base of KUD personnel, through a nation-wide Pola I, II and MSA training Program; (ii) reduction in the excessive delays in implementing PolaJMSA programs caused by administrative procedures at PLN, by incorporating better trouble shooting capability in the program management structure; (iii) enhancement of MOCSE's ability to support KUD, by providing program promotion, orientation and managementraining at the Pusat, Kanwil and Kandep levels. 4.4 Provision has also been made in MOCSE's Operational Plan to study the feasibility of preparing two areas with a substantial number of KUD's involved in Pola I, 11 and MSA activities to form Pola III. The two candidate areas are South Sulawesi and East Java.

40 34 ANNEX C A. P.T. PLN (PERSERO) BORROWERS' CONTRIBUTIONS 1. EVALUATION OF THE BANK'S PERFORMANCE 1.1 Bank's performance during the evolution and implementation of the project was generally satisfactory. The efforts were very constructive in every salient matters during the process of project implementation. Bank's involvement was diligently maintained through the whole phases. In negotiation phase, Bank had sent qualified and competent mission so the scrutinizing process in establishing the project objective, and also in assessing of the projcct cost, scope of work, financing plan and time schedule of the project could be accomplished successfully in relatively short time. In Appraisal phase, Bank fully involved in establishing Staff Appraisal Report (SAR) particularly in the assessment of cost planning, scope of work, source of finance, time schedule, and delivered constructive suggestions during cost revision and scope of 'work negotiations. During construction phase, Bank persistently assisted PLN in supervision of procurement, project time schedule, cost, disbursement and PLN got some advises in solving the pending items prior to the date when the loan was nearly closed. Bank extended the period of the loan which reflected the mutual understanding between the Bank and the Borrower (PLN). 1.2 Based on the experience, PLN has acknowledged that 3 (three) major points need to be pondered: (i) processes for procurement need to be improved in order to avoid delays; (ii) determine suitable least cost solutions for materials and construction; and (iii) implement better project monitoring through a Project Management Unit. The Bank assisted PLN mi these areas. 2. EVALUATION OF THE BORROWER'S OWN PERFORMANCE 2.1 During project implementation, PLN has made endeavor to improve the process. However, delays occurred due to procurement processes. 2.2 Delays in procurement processes were because of the following: (a) For concrete poles, initially only one bid was received. This was deemed non competitive and a re-bid was called. The rebid prices were higher than PLN ceiling and so protracted negotiations were necessary. (b) The highest ranked bidder for insulators was from China. Type tests were from a national institution which was not intemationally recognized. As a result considerable time was spent ascertaining their suitability for PLN purposes. 2.3 Separation of rural electrification accounts proposed to get profit/loss statement of rural electrification was based on PLN Circular Letter No. 13, It is an principle to extract from general PLN Wilayah account statement, the share of rural electrification component. To improved this separation of rural electrification accounts, it was included in Rural Electrification Master Plan. Its application is only at selected pilot location, PLN Wilayah XI. It is not for the whole PLN yet. 2.4 During the preparation of Rural Electrification Master Plan, to facilitate knowledge transfer from the consultant, PLN DIVDES arranged for the following:

41 35 ANNEX C * Asked the Consultant to present its work progress to PLN, and discuss it together in meetings. These meetings took place at least once a month. * Consultant provided adequate training to PLN staffs from Head Office and four Regions as well. The training subjects included 4 topics: (a) Topic 1: Computer Systems, (b) Topic 2: Data Management & Processing, (c) Topic 3: Systems Planning, (d) Topic 4: Project Analysis & M.I.S. This training was implemented in: 1. Denpasar, for PLN Region VIII, XI and Distribution East Java. (November 28, January 28, 1995 No. of trainee: (28); 2. PLN Head Office in Jakarta, for PLN Region IV and Head Office as well, and additional training for PLN Region VIII, XI & Distribution East Java. (March 13, April 28, 1995 No. of trainec : 54) * On site training for the computer operators in respective Regions during, installation of hardware, software and data, for around 2 weeks in each Region and PLN Head Office. * And to leam more from the Consultant and intensive preparation to hand over the Consultant product, the staffs, two power engineers and one computer engineer, studied in Consultant office for about one year. 2.5 Although the project was the first rural electrification loan with the World Bank, PLN's performance was satisfactory. All comnmitments made during negotiations and covenanted under the loan were fulfilled. PLN expects that the second rural electrification loan will reinforce the foundation started by this project. However, PLN recognizes that there is room for improving its perfornance in order to meet the target dates regarding the overall project schedule. 3. THE EFFECTIVENESS OF THE RELATIONSHIP BETWEEN THE BANK AND THE BORROWER DURING THE EVALUATION AND IMPLEMENTATION OF THE PROJECT 3.1 The relationship between the Bank and PLN was generally good. Most of the problems encountered were clearly identified by both parties and advice to problems were promptly agreed and provided to those concern. 3.2 In particular, good mutual understanding was achieved in selecting least cost materials and processes, developing monitoring and tracking processes and overcoming procedural problems likely to cause potential delays. 4. THE PERFORMANCE OF CO-FINANCIERS AND THE EFFECTIVENESS OF THE RELATIONSHIP BETWEEN THE BORROWER AND COFINANCIERS DURING THE EVALUATION AND IMPLEMENTATION OF THE PROJECT. 4.1 There were no direct dealings between the Co-financier for this project and the borrower.

42 36 ANNEX C 5. ASSESSMENT OF THE OUTCOME 5.1 The main objectives of the project are not only electrify villages and connect rural household but also to build PLN capacity to efficiently carry out rural electrification program. 5.2 With regards to the physical objective, PLN was able to electrify more villages than target. On the capacity building side, PLN's staff gained significant experience from the project. PLN's capacity to carry out rural electrification program efficiently has improved. 5.3 PLN is a very large organization responsible for Generation, Transmission and Distribution for both urban and rural area throughout the country. In the past PLN emphasized Generation, Transmission and urban Distribution. However the project help PLN develop the know-how to carry out rural electrification in most efficient manner and PLN is now in a good position to proceed with future rural electrification projects in the full knowledge that they will be undertaken economically and in accordance with a program which best meets PLN and Indonesia objectives. 5.4 In this respect, PLN will be using Rural Electrification Master Plan to aid in REPS to help in least cost system design, select and prioritize villages. Since PLN for the time being using REPS with sufficient data to immediately carryout all Regions. But only 4 Regions have Rural Electrification Master Plan computer facility already. 6. KEY LESSONS LEARNED 6.1 To maintaining PLN financial health, it's important for PLN to minimizing construction and service cost and at the same time maximizing revenue. 6.2 Other main lessons leamed were the need to improve procurement procedures and develop systems criteria to prioritize for village electrification selection. Through the project, PLN has developed systems through the PMU, PMIP manual and MONMAN to monitor and track progress on large projects in isolated locations throughout Indonesia.

43 37 ANNEX C B. MINISTRY OF COOPERATIVES AND SMALL ENTERPRISES DEVELOPMENT (MOCSE) 1. Borrower's Performance 1.1 The performance of MOCSE on project implementation is satisfactory. This could be described by: a. Implementation of training for KU]D staff as well as field staff of MOCSE was satisfactory. b. Implementation of procurement of equipment for KUD aiming at improving administration management and increasing services to rural electrification customers was satisfactory. c. Procurement of consulting services for Pola I and II and MSA was satisfactory. d. Cooperation between PLN and KUD in handling rural electrification was improved. 2. Borrower's Assessment of Outcome 2.1 The outcome of MOCSE's component of project is satisfactory. Project achieved most of its major objectives and has achieved satisfactory development results. Only a few shortcomings which can be notified as the following points. a. Delay in procuring consultant for institutional development and equipment for KUD's b. Training on Pola I, Pola II and MSA did not cover all the existing KUD's which are already managing Pola I, Pola II and MSA. c. Equipment procurement (such as computers for 400 KUD's and electrician tools for 100 KUD's) was insufficient to cover all KUD's which are managing the Pola I, II and MSA. ENTER YOUR NAME HERE M:\ICR-RE1\ANNEX.A January 5, :58 PM

44 38 ANNEX D. 1 Page 1 INDONESIA RURAL ELECTRIFICATION PROJECT INTERNAL ECONOMIC RATE OF RETURN (IERR) Benefits 1. Residential Consumers. The methodology used to estimate economic benefits for residential consumers can be explained with the help of Figure 1, which shows a demand function for a household defined by two points. One end of the function is anchored by the price-quantity pair (Q,P 1 ), where Q, denotes household consumption of electricity at PLN's average price, PI, to this consumer class. To anchor the "upper end" of the demand function, which represents consumer willingness to pay for higher valued uses of electricity, the pricequantity pair (Qo,Po) is estimated assuming that kerosene would be used for lighting absent availability of electricity. Household survey data on kerosene consumption and expenditure for lighting and other data were utilized to establish the monthly kwh consumption (Qo) that would yield an equivalent amount of lighting intensity (lumens) prior to the availability of electricity; as well as to convert the unit financial price of kerosene to an equivalent financial cost per kwh of lighting (Pk). Thus, prior to electrification, Qo units of kerosene (in kwh equivalence) are consumed at a financial price of Pk. Following electrification, Qi units of electricity are consumed at a price of PI. 2. The net economic benefit associated with released resources is estimated as (Pke,Ple)QO, where Pke represents the economic price of kerosene per kwh of equivalent lighting, Ple is the economic cost of electricity supply, and Qo is defined above. 3. The incremental consumer surplus on the diverted market is represented by the shaded area in Figure 1. A linear demand function is postulated between the points (Ql, PI) and (Qo, Pk) for the purpose of estimating the consumer surplus. This specification tends to underestimate the willingness to pay since it does not account for the additional value of the higher quality of light obtained from electricity. 4. Using the method outlined in the preceding paragraphs, the average willingness to pay for residential consumers is estimated to be 19 UScents/kWh. These estimates assume average monthly consumption of 45 kwh per residential consumer in Java-Bali, and 40 kwh per residential consumer Outside Java.

45 39 ANNEX D. 1 Page 2 5. Non-residential consumers. For non-residential consumers, the basis used for establishing willingness to pay is the cost of self generation; which has been estimated to be about 16 c/kwh. Non-residential consumption is assumed to be 125 kwh per month. Costs 6. Supply cost. Energy supply cost are calculated on the basis of the economic cost of bulk power incoming into the 20 kv network; and have been estimated on the basis of PLN's LRMC study for Java and Outside-Java. For the Java-Bali system, the LRMC for power delivered to the 20 kv network (excluding losses and investment in the MV network), is estimated at 9.20 UScents/kWh for residential consumers, and 8.40 c/kwh for nonresidential consumers. Corresponding estimates for the LRMC of slipply in the Outer- Islands are, c/kwh for residential consumers, and 9.70 c/kwh for non-residential consumers. LRMCs for supply from mini-grids with diesel generation only are estimated to be c/kwh for residential consumers, and 11.7 c/kwh for non-residential consumers. 7. These estimates of LRMC are not system average costs. Rather, they are derived from the underlying regional marginal cost structure of PLN --as defined by marginal capacity cost, marginal energy cost on-peak, and marginal energy cost off-peak at 20 kv -- and by further applying the following load characteristics of the residential and nonresidential rural customers, developed from available PLN load research data. For rural households, the class average monthly load factor is assumed to be 0.35, and the peak energy share is 0.53 in Java-Bali and 0.45 outside Java. For non-residential customers, the class average monthly load factor is assumed to be 0.40, and the peak energy share is assumed to be at 0.35, in Java and Outside Java.

46 40 ANNEX D. 1 Page 2 INDONESIA RURAL ELECTRIFICATION PROJECT Figure 1: Household electricity demand function and benefits from electrification Rp/kWh Pk Shaded Area = consumer surplus from incremental consumption P 1..~~~~~~~~~~: o Q'. ~~~~~kwh/month

47 INDONESIA RURAL ELECTRIFICATION PROJECT (Loan 3180-IND) COSTS Re-calculation of Economic Rate of Return: INDONESIA PLN's RE Investment Program 1990/91 - June 30, 1995 [Billion Rp., 1993 Pricesl BENEFITS Supply Cost Residential Non-Residential Tariff Tariff NET Distribut Connection Total 0 & M Supply Cost EHV Supply Cost TOTAL Energy Revenue + Revenue + Connection TOTAL CASH YEAR ion CooInvestment Cost EHV GRID GRID DIESEL DIESEL COSTS Sales Consumer Energy Sales Consumer Fee BENEFITS FLOW Cost I surplus Surplus BRp BRp BRp BRp Gwh BRp Gwh BRp BRp Gwh BRp Gwh BRp BRp BRp BRp 1990/ / / , / , , , / , , , , / , , , , , / ,833 74~ , , , , / , , , , , / , , , , , / , , , , , / , , , , , / , , ,9600 1,1737 1, , / i70.4 4, , , , , , / , , ,9770 1, , , / , , , , , , / , , , , , , / , , , , , , / , , , , , , / , , , ,1820 1, , A 2009/ , , , , , , / , , , , , , , , , , , , / , , , , , , , , , , , / , , , , , , , , , , , , IERR 15% 12/14/95 File. REI-EIRR.XLS Tab TSLICE-lnten