Report No. 335a-IVC

Appraisal of a FILETelecommunications ProjectIvory CoastApril 9, 1974

Regional Projects DepartmentWestern Africa Regional Office

Not for Public Use

Document of the International Bank for Reconstruction and DevelopmentInternational Development Association

This report was prepared for official use only by the Bank Group. tt may not be published,quoted or cited without Bank Group authorization. The Bank Croup does not acceptresponsibility for the accuracy or completeness of the report.

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CURRE»CY EQUIVAIE:NTS WEIGHTS AND MEJSURES

US$1 CFA1250 1 km 0.62 mileCFAEt = US$o.oo4 2CFAF1 ,00,0OO = US$49000 1 hn 0 0.386 squzare mile

FISCAL YEAR

July 1 - June 30

ABBRt-VIUTIOÇS, ACRTYMS N)D DEFINITIOe4S

APT - Administration des Postes et Télécomaunicatibns(Posts and Telecommunications Administration)

CCCE - Caisse Central de Coopération Economique(French lending agency)

Carrier - A system providing several chamnels through onetransmission mode

Charmel - Frequency band of a carrier system carrying telephone,telegraph or data signals

CCITT - Comité Consultatif International Téléphonique etTélégraphique (International Telephone andTelegraph Consultative Committee)

CGPTEAO - Conférence Administrative des Postes et,Téléconnunications de l'Afrique de l'Ouest(West Africa Post and Teleconmnmications Organization)

FAG - Fonds d'Aide et de Coopération (Development AidAgency of the French Government)

7CR - Compagnie France Cables et RadioHF - High frequency (3-30 MH)IDET-CEGOS - French Management ConsultantsINTELCI - Société des Tlécommunications Internationales de

Côte d'Ivoire (International TelecommunicationsCompany of Ivory Coast)

ITU - International Telecommunication UnionMHz - MegahertzMicrowave - Radio system vorking at frequencies above 300 MHz

but normally applied to systems working at frequenciesabove 1,000 MHz

Multiplex - Part of the equipment in a carrier system (see above)which shifts and stacks the different circuits in thefrequency spectrum appropriate to the particularcarrier system

OPTCI - Office des Postes et Télécommunication de Côte d'Ivoire(Ivory Coast Posts and Telecommunications Office)

SOFREcoM - Sociéte Française d 'Etudes et de Réalisationsd'Equipements de Tél6communications (French consultingfirm for telecommunications studies and equipmentconstruction)

STET - Societa Finanziaria Telefonica (Italian financialconsultants for telecommunications)

Telephone Stations- Locations where telephone instruments on directexchange lxnes or extensions are fitted

Telex - Teleprinter Exchange ServiceUNDP - United Nations Development ProgramVHF - Very high frequency (30-300 Hiz)VF - Voice frequency (300-3,400 Hz) .

IVORY (OAST

AIs114ISTRATION DES POSTES ET TELECOMeiUNICATIONS (APT

APPRAISAL OF A TELECONMUNICATICNS PROJECT

TABLE 0F CONTENTSPage No.

SUMUQ,EU AND CONCLUSIONS .... *.........***........*......... i-ii

1. DINTRODUCTION ................................... ......... ....... 1

2. THE ECONOIY AND THE TELECCMaMIICATIONS SECTOR ............. 1The Economy .................. ......... 1The Telecommunications Sector 2Existing Telecommunications Facilities .... 2Sector Development Objectives ........................... 3

3. TH ROJECT ..............o........................................ 4Cost of the Project ... S............... . .................. 5Project Flnancing Arrangements ........................... 6Procurement ............................................. 7Implementation ................................. 7Lisbursement .*...... .. * .a *. *. . ... .... * 7

h. JUSTIFICATION ......*....................**............. 8Support of Country's Economic Development ............... 8Support of Institutional Improvement in the

Telecammunications Sector ........... ..... 9Market Demand ....... .............. ..... .. 9Least-Cost Solution-and Optimization of Project

Construction Period ... *.....*.................. 10Ret1urn on Investiment i........... ........... *....... il

5. THE BENEFICIARY (APT) ....... i...* ....... ..*..........*. ilOrganization and Management ... i.........l... .............. 11Staff and Training ................ *...... 12Investment Planning 13Subscribers Installation and Maintenance Services 13Accounting ...... 13.Telecommunications Billing and Collection ............ 1hAudit . 15Tariffs 15Postal/Financial Department ..... 16

6. FINANCES ................................. 16Telecommunications - Past Finances ... 16Telecommunications - Financing Plan 18.............. .. 18Telecommunications - Future Finances 20Fiscal Impact ....... ...****e@*@*...... *-** 21

7. REC- C J*dZENDATIONS ............................ ............. 21

This report is based on information provided by APT and on the findings ofthe mission composed of Messrs. J. G. Davis and G. A. V. Buttex which visi-ted Ivory Coast in July/August 1973.

LIST 0F ANNEXES

1. International Statistical Data

2. Organization Chart

3. Basic Data )

h. Existing Telecommunications Facilities )

5. The Project - Cost Estimates )

6. Construction Schedule of the Project )

7. Estimated Schedule of Disbursements of Bank Loan)

8. Economic Analysis of the Project )

9. Summary of Tariffs )

10. Income Statements - 1970-1980 ) Telecommunications Department

11. Balance Sheets - 1970-1980 }

12. Sources and Applications of Funds - 1970-1980 )

13. Notes and Assumptions on Financial Statements )

1h. Financial Rate of Return - 1979-1983 )

15. Long-term Debt )

16. Performance Indicators )

17. Telecommunications Billing and Collection )

18. Financial Aspects - 1970-1980 )

19. Income Statements - 1970-1980 ))Postal/Financial Department

20. Balance Sheets - 1970-1980 s

21. Sources and Applications of Funds - )1970-1980 )

Maps

Telephone Exchanges and Long Distance Links I9RD-10684(R)

Abidjan's Urban Telephone Network IBRD-1 0685 (R)

IVOtY COAST

AKZI 3TRATION DES POSTES ET TEL3CO&MUNICATIONS (APT)

APPRAISAL OF A TELECOMMTJNICATIONS PROJECT

SUIARY AND CONCLUSIONS

i. The project is the 1974-1978 telecommunications developmentprogram of the Administration des Postes et Tlécommunications (APT),a Government entity under the Ministry of Posts and Telecommunicationsresponsible for all postal and domestic public telecommunicationsservices in the Ivory Coast. The project, estimated to cost US$53.6million, aims to improve the present poor quality of service and meetdemand until 1980 in Abidjan and in 39 provincial towns by expandinglocal and long distance facilities; in addition, service will be extendedto 21 rural localities that presently have inadequate or no communications.

ii. A Bank loan of US$25.0 million is proposed, which would coverabout 63e of the foreign and 47% of the total cost of the project.

iii. This would be the Bank's first telecommunications project inthe Ivory Coast. The borrower would be the Government, and the projectwould be executed by APT with the assistance of consulting engineers.

iv. Since 1971, APT has been carrying out the first phase of adevelopment program originally intended to cover the period 1971 through1975; the foreign costs of these works have been financed by supplierscredits, French bilateral assistance, and APTts on>m resources. APT hasnow revised its requirements and established a program of works to beexecuted from 1974 through 1978. The 1974-1978 program comprises ongoingworks carried over from the earlier development program and new works tobe undertaken through December 1978.

v. In the past APT has purchased its imported equipmenit either ona negotiated contract basis or after limited competitive bidding. How-ever, with the exception of contracts already awarded or equipment which,for reasons of technical compatibility must be obtained from existingsuppliers, the Government has now decided to go to international competi-tive bidding, with Bank financing, for all other equipnent to be importeddirectly for the project. This is expected to result in decreases inswitching equipment prices compared iwith the high prices previously paidand also have a downward influence on prices for equipnent to be procuredunder negotiated contracts with existing suppliers.

vi. The institutional development of APT has been allowed to lagand at present the entity's internal organization is not equipped to meet

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the demarids being made upon it. With the failure to progressively developits orgarization by way of experienced and adequately qualified managerial,technical and financial staff, satisfactory planning systems, operationalroutines and controls, APT now finds itself with many institutional pro-blems, some of which are serious. APT requires long term institutionalassistance and policy guidance. The proposed project, supported by theBank, will help to bring about the improvements that are critical if theentity is to adequately fulfil-1 its role in the telecoamunications sector.

vii. Although postal operations are carried out at a loss, becauseof its profitable telecommunications operations APT is earning a surplusfrom its overall operations. However, owing to delays in subscriberbilling, poor collection procedures, non-payment of Government bills andlack of adequate financial and budgetary control, APT has a serious liqui-dity problem and is relying heavily on the overdrâft facilities availablefro-m the National Treasury.

viii. The project is technically sound and financially and economicallyjustified; it would provide support for the Government's development schemesfor industry, commerce, agriculture and tourism. The project would alsocontribute to the expansion of administrative, public health and socialservices in rural areas and the integration of remote areas into the nationaleconormy. The return on investment is estimated to be at least 22%. Owingto the time lag between the commissioning of new plant and the buildup ofrelated revenues, APT's financial rate of return on net telecommunicationsassets, presently about 20%, is expected to decline considerably until 1978.Thereafter, with the additional revenue accruing from plant installed underthe project the rate of return should improve again.

ix. The proposed project provides a suitable basis for a Bank loan ofUS$25.o million having a terzm of 20 years vith a five-year grace period.

IVOiY COAST

AMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

APPRAISAL OF A TELECOMMLNICATIONS PROJECT

1. INTRODUCTION

1.01 The Government of the Ivory Coast has asked the Bank to helpfinance the 1974-1978 telecommunications development program of itsAdministration des Postes et Télécommunications (APT), the entity res-ponsible for postal and domestic telecommunications in the Ivory Coast.

1.02 In 1970, following studies carried out by the French engineer-ing consultants, Societe Française d'Etudes et de Réalisations d'Equipe-ments de Télécommunications (SOFRECOM), and the Italian financial con-sultants, Societe Finanziaria Telefonica (STET), APT established a five-year, 1971-1975, development program. A first phase of that program,financed by supplier credits, French bilateral assistance, and APT's ownresources is now under construction. In 1971 a Bank mission identifieda project within that program suitable for Bank financing however, APTsubsequently revised its requirementa and established a new 197h-1978program to meet demand until 1980. This program, which is the projectproposed for Bank financing, would be the first telecommunications projectfinanced by the Bank in the Ivory Coast. As APT is a branch ofthe Ministry of Posts and Telecommunications, the Government would be theborrower.

1.03 Preappraisal took place in December 1972, and was followed byan appraisal mission composed of Messrs. J. G. Davis and G. A. V. Buttexthat visited the Ivory Coast in July/August 1973.

2. THE ECONÇWY AND THE TELECOIHMUNICATIONS SECTOR.

The Economy

2.01 The Ivory Coast, with a land area of 324,000 km2, has a popula-tion of about 5.4 million. Over the past six years the annual populationgrowth has been 3.3%; immigrants fram neighboring countries, attracted byjob opportunities, account for part of this high growth rate. Twenty-threepercent of the population is urban, of whom about half (600,000) live inAbidjan, the capital and principal town. The 1970 GDP per capita was aboutUS$310; this was surpassed by only a few countries in Africa. Ivory Coasteconomic growth in the first decade of independence has been spectacular;to 1970 the average annual increase of GDP in real terms has been about7.5%. Although it is estimated that there has been some slowdown in thegrowth of the economy since that time the prospects for a sustained 6%annual growth remain good.

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The Telecommunications Sector

a) The Institutions

2.02 At independence in 1960, the autonomous Office des Postes etTélecommunications de Cote d'Ivoire (OPTCI) was created to take overdomestic telecommunications and postal services from the French adminis-tration. Responsibility for international telecommunications was retainedby France Cable et Radio (FCR). In 1964 OPTCI became Administration desPostes et Télécommunications (APT), a branch of the Ministry of Posts andTelecommunications. International telecommunication services were oDeratedby FCR until 1969 when transferred to Société des Téléecommunications Inter-nationales de Cote d'Ivoire (INTELCI) owned, 52% by the Government and 48,by FCR. The present arrangement, APT for domestic, and INTELCI for inter-national services is satisfactory. With the exception of the military,Ministry of the Interior, civil aviation, and the railway and broadcastingservices, which have their own telecommunication networks, APT provides alldomestic telephone, telegraph and telex services. APT also operates theusual postal services, a nationwide public checking account service andthe national savings bank. The operation of the highly technical domestictelecommunication service jointly with the postal service is not entirelysatisfactory and should be reviewed at an appropriate time (see para. 5.02).The internal organization of APT, so far as it concerns telecommunications,is unsuited to meet operational demands; telecommunications tariff policyrequires review. Consequently APT needs considerable help in institutionbuilding and policy making; its problems and deficiencies are such, however,that to be effective this would have to be provided on a continuing long-term basis.

2.03 Telecommunications policy is formulated by APT and approved bythe Minister of Posts and Telecommunications and the Council of Ministers.The Ministry is the licensing authority for the sector and also has repre-sentatimn on the Board of INTEIC I. The institutional structure of APT isdiscussed in paras. 5.01 to 5.04.

b) Existing Telecommunications Facilities

2.0 Local Telephone Service - As of January 1, 1973, the Ivory Coasthad some 45,00o telephone stations connected to about 20,000 direct exchangeUnes of which about 60% were for business, 28% for residential and 12& forother purposes,including administration. The telephone density of 0.8 perpopulation is higher than in most African countries and reflects the stateof development in the Ivory Coast particularly that in the Abidjan regionwhere about 74% of the country's direct lines are located and where thetelephone density is about 5.5 per 100. Annex I gives the comparative sta-tistics for other countries, and basic data on APT's facilities are set outin Annexes 3 and 4 and Maps IBRD 10684(R) and 10685(R). Ivory Coast has 22automatic exchanges (12 in the Greater Abidjan area, 10 in provincial towns)and 79 small manual exchanges in the provinces. Total effective terminalcapacity of the Abidjan exchanges is about 177,400 lines, and tne total nuumberof connected direct lines about 15,000 lines. This is a high rate of exchange

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fill and leaves little margin for expansion. Total capacity of the pro-vincial exchanges is 7,700 lines (4,500 automatic, 3,200 manual) and5,100 direct lines are connected. Owing to lack of switching, junctionand local distribution facilities, local telephone service is generallypoor.

2.05 Long Distance Service - APT has a long distance network con-sisting of about 110,000 channels-km. High-capacity microwave links (53o')and overhead lines supplemented with carrier equipmnt (39v), providethe greater part of the network, the remainder consists of HF links andlong distance cable. AIl the principal regional centers have long distanceservice with Abidjan, but due largely to lack of switching equipment ser-vice is only fair. Service to rural areas is poor and many areas are with-out telecommunications facilities.

2.06 Telegraph and Telex Services - APT has no separate telegraphnetwork and domestic telegraph service is provided through the telex andtelephone facilities. Telex service is provided by a 500-line exchangelocated in Abidjan; as of January 1, 1973, APT had 400 telex subscribersin Abidjan and 36 in the provinces.

2.07 International Services - International telephone, telegraph,telex and eata transmission services are provided by INTELCI, either throughearth satellite station or by HF radio circuits.

Sector Development Objectives

2.08 Principal sector objectives during the construction period ofthe proposed project, 1974-1978, are to:

(i) expand and improve the facilities in Abidjan and the principalurban areas in order to provide an adequate level of serviceand to Teet demand, particularly that froin commerce andindustry, until 1980;

(ii) improve the facilities in regional areas to provide necessarysupport for the Government's regional development efforts;

(iii) extend and improve services to rural communities, in orderto support agricultural diversification and the integrationof remote areas into the economy;

(iv) improve the quality of transmission and speed of connectionin long distance service; and

(v) establish and commence to inplement a long-term program forimproving the internal organization and operational policiesof APT's telecommunications services.

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3. TF{Ž PROJECT

3.01 The project would be carried out in the period 197h-1978, andwould represent a first step towards attaining the sector objectives des-cribed in Chapter 2. lain project items would be:

Local Telephone Service

(i) installation of automatic switching equipment for about29,000 exchange lines in Abidjan and about 10,000 exchangelines in provincial areas; and removal and redeploymentof 4,700 lines of switching equipment from existingexchanges;

(ii) extension and rehabilitatîior of existing local distributionnetworks, and installation of new local distribution net-works, inter-exchange cables and subscriber apparatus tocover projected development;

Long Distance Service

(iii) nine high-capacity microwave links with associated multi-plexing equipment, and switching equipment to providesubscriber trunk dialling;

(iv) two VHF links between S. Pedro, Soubré and Buyo and betweenTabou and Grabo, and one microwave link between S. Pedroand Tabou;

(v) carrier equipnent on existing open-wire routes to providean additianal 170 channels, and 1,250 km of new open-wireroutes in rural areas;

Telex Service

(vi) extension of the Abidjan telex exchange by 400 l'nes, twoautomatic telex exchanges in S. Pedro and Bouake', each witha capacity of 100 lines, and 400 teleprinters for the overalltelex network;

Land and Buildings

(vii) six new exchange buildings in the greater Abidjan area and24 in provincial towns;

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Miscellaneous

(viii) power plants, technical equipment, tools, materials,vehicles and miscellaneous minor capital works;

(ix) consultant services for the project's detailed engineer-ing, for institutional, internal organization, telephoneusage, and tariff studies, and expert's services forcoordinating the engineering services; and

(x) training for technical and accounting personnel.

Details of the project are given in Anlex 5.

Cost of the Project

3.02 The project is expected to cost US$53.6 million with a foreigncomponent of UJ$39.8 million. Costs are detailed in Annex 5 and summarizedbelow.

Local Foreign Total Local Foreign Total Total---- CFAF million----- ----USe million----

Local telephoneservice 1,223.0 5,o89.4 6,312.4 4.89 20.36 25.25 47

Long distanceservice 362.4 1,947.8 2,310.2 1.45 7.79 9.24 17

Telex service 11.0 550.0 561.0 0.04 2.20 2.24 4Land and buildings 365.o - 365.o 1.46 - 1.46 3Miscellaneous:

Power plant &minor works 657.1 714.5 1j371.6 2.63 2.86 5.49 10

Consultants 24.3 332.0 356.3 0.10 1.33 1.43 3Training ._- __ 112_5 112.5 - 0.45 0.45 1

2,642.8 8 746.211,359.0 10.57 34.99 45.56Contingencies-1 _- -Physical 120.7 286.7 407.4 0.48 1.15 1.63 3Price 706.0 906.8 1,612.8 2.82 3.63 6.45 12

Total project 3.469.5 9,939.713,409.2 13.87 39*77 53.64 100

3.03 Costs for items proposed for Bank financing are based on pricescurrently obtained under international competitive bidding for switchingequipment in West Africa,and for other items of equipment outside WestAfrica. Costs for items to be financed from sources other than the Bankare based on the prices included in firm contracts made by APT, or oncurrent prices in West Africa. Contingencies have not been added toitems which are to be procured under firm contracts or extensions toexisting contracts; the cost estimates for these items, whi¢h totalUS$13.0 million, include escalation provisions. For all other items, a5% physical contingency has been provided to cover unforeseen design and

/1 See para. 3.03 re contingencies on firm contracts or extensions toexisting contracts.

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engineering modifications, and price contingencies of between 9% and 46%,depending on the purpose and year of expenditure, have been added to coverunforeseen increases in prices. During negotiations Governaent oonfirmedthat APT would be relieved of customs duties and import taxes on equipmentimported for the project. APT vill however pay local taxes aaountzng toabout US$1.6 million on vorks related to the project; this exjpees eWhichhas been included in the financial plan, vill be met from APT s own resources.

?roject Financing Arrangements

3.014 The project would be financed as follows:Us$ Us$-million--

(a) Proposed Bank loan (see para. 3.05) - 25.0

(b) Bilateral assistance and suppliers creditsEquipment and services procured under

firm contracts - 5.7

(c) APT - internal resourcesCounterpart funds for works under (a) 8.5Counterpart funds for works under (b) 2.9Equipment to be procured under exten-

sions to agreed contracts 4.4Other works 7.1 22.9

Total project cost 53.6

3.05 The proposed Bank loan of US$25.0 million with a period of 20 years,including five years grace, would finance:

US$ US$Local service -million--21,000 lines of automatic telephone

exchange equiprment 6.36Local networks and subscriber plant 6.11 12.147

Long distance serviceThree microwave links 1.78Two VHF links 0.18Trunk switching equipment 0.25Multiplex and carrier equipment 1.49Long distance overhead lines 0.96 4.66

Telex serviceTelex exchange equipment 0;42Teleprinters 1.08 1.50

Power plant, vehicles, tools, etc. 0.61

ConsultantsEngineering 0.70Studies - Institutional 0.05

- Internal organization 0.20- Usage and Tariffs 0.05 1.00

Training - technical and accounting 0.4520.69.

Contingenciesl'hysicali'rice

Total

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Procurement

3.06 Bank-financed items - All goods financed by the Bank would beprocured through international competitive bidding in accordance with theGuidelines for Procurement.

3.07 Other items - 7,100 lines of automatic switching equipment, sixmicrowave links, and telex equipment have already been ordered under firmcontracts through bilateral assistance arrangement or suppliers crodits;9,900 lines of automatic switching equipment to be installed in 1977 and1978, and financed from APT's internal resources will, for rea.ons ofstandardization, be procured from the suppliers of the 7,100 lines on anegotiated contract basis. Contracts fqr project buildings and civil workswould be awarded under the Governient's standard tendering procedures whichare acceptable.

Implementation

3.08 APT would require assistance for the detailed engineering, pro-curement and supervision of installations involved under the project.Consequently, during negotiations Government agreed that APT would appointexperts, employed either directly or through consulting firms, in accordancewith ternms of reference acceptable to the Bank, to advise on the detailedengineering and preparation of specifications and bidding documents, to assistin the evaluation of bids, and to supervise construction; furthermore, it wasagreed that if the Government and the Bank deem it necessary an experiencedengineer wolild be appointed to assist APT's management in the coordinationane implementation or the project.

3.09 Suppliers would install the main equipment (exchange installa-tions, microwave links) under the supervison of the experts. The suppliers'contracts would specifically provide for APTts staff to be trained ininstallation, testing and maintenance. Larger civil works and buildingswould be constructed by contractors, smaller works and buildings by APT'sbuilding division. Gable laying would be undertaken by local contractorsand APT force account. Subscriber installations would continue to be under-taken partly by APT directly and partly by local contractors-until theseoperations are entirely taken over by APT's staff (see para. 5.10).

3.10 A construction schedule for the project is at Annex 6. Theproject is expected to be completed by December 31, 1978.

Disbursement

3.11 The proposed loan would be disbursed against the CIF cost ofimported equipment and the foreign cost of consultant services and training.An estimated schedule of disbursement is at Annex 7. The use of any unusedloan funds would be subject to agreement with the Bank; in view of APT'sexpansion requirements it would appear that a case could be made for usingthem in the purchase of additional goods and services similar to thoseprocured under the proposed loan.

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h. JUSTIFICATION

Support of Country's Economic Development

4.01 In order to sustain the current momentum of economic growthGovernment is proceeding with a number of important development schemes;several of these are supported by the Bank. Many schemes are aimed atthe further diversification of agriculture and involve opening up newareas such as the southwest; others are concerned with developing thenorth which in the past has benefitted less than southern areas fromC-overnment's development efforts. Other schemes are directed at indus-trialization with emphasis on exports, and the expansion of tourism. Agood telecommunications service is an essential to the success of theseprojects. Unfortunately, in recent years domestic telecommunicationsservices in the Ivory Coast have failed to keep pace with the demandsof a booming economy and the lack of good telecommunications is becominga serious development constraint. The project, by providing the facil-ities necessary to meet present and anticipated demand through 1980,would remove this constraint. The project would improve and extend longdistance services and provide new rural development areas with service;mainly improving administrative and social services in these areas andgenerally helping to assimilate and integrate the remote areas into themainstream of the economy.

h.02 About 71&% of the 39,000 local service lines to be provided underthe project would be installed in the Abidjan area and would mainly meetthe needs of coamerce, industry, tourism and administration (see para. h.06).The new microwave links which would connect Abidjan with the northern,eastern and western regions would later be extended to form part of thePan-African links with Liberia, Guinea and Ghana. Current Governnent plansprovide for the large hinterland to the new port of San Pedro, situated inthe west of the country, to be extensively developed for palm oil, cocoa,rubber, fruit, mining and timber. To meet the needs of this area localtelephone service in 13 important regional centers is to be automatizedand expanded, regional long distance services upgraded, and new routes to6 rural areas built; a small telex exchange is to be installed at theport of San Pedro. To meet the development needs of the cotton, and sugargrowing areas and the expanding textile industries in the northern andcentral regions, major microwave links from Abidjan are to be brought intoservice in 1974, local telephone service in ten regional centers is to beautomatized and expanded, regional long distance routes upgraded, and newroutes to seven rural areas built; a small telex exchange is to be installedat the important textile center of Bouaké. To serve the needs of the southernand eastern regions, where there is extensive cocoa and coffee productionin addition to an expanding textile industry, a microwave link to Abidjanis to be built, local telephone service in 11 provincial towns is to beautomatized and expanded, the capacity of five important regional longdistance routes expanded, and new routes to three rural areas built. In thetourism areas of' the northwest and south, local services are to be automa-tized and expanded, and new routes to four rural areas built.

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Support of Institutional Improvements in the Telecommunications Sector

4.03 The proposed Bank loan of U $125.0 million would finance about6_- of the foreign cost of the project and would bring about major benefi ialchanges in APT procurement policy, since a substantial portion of importedplant would be procured through international competitive bidding in accordancewith the Bank's Guidelines; previously APT had purchased its imported equip-ment either on a negotiated contract basis or after limited competitive bidding.it is expected that the changes would result in significant decreases inswitching equipment prices compared with the high prices previously paid,and also have a downward influence on prices for equipment to be procuredunder negotiated contracts (see para. 3.07).

4.oh APT requires long term institutional assistance and policyguidance. The proposed project supported by the Bank will help to bringabout the institutional improvements that are critical if APT is to meetthe Ivory Coast ts telecommunications need.

hlarket Demand

4.05 Demand forecasts are based on APT's block-by-block detailedsubscriber network development plan for the Abidjan region and a SOFRECCHlten-year demand study for the provincial urban areas that was completed in1970. Tlhese provide a satisfactory basis for projecting demand forecasts.tWhile the study showed that there exists in the provincial urban areas apotential growth of 14-15% per year, owing to the high tariffs and poorservice, actual growth has only been about 10-11% per year.

4.06 Local Service - Although projected demand in the Abidjan regionvaries between exchange areas it is forecast that demand in the region willincrease by an average of about 14% per year until 1980. This compares witha growth of 13% per year over the last decade. Review of the exchange areasindicates that about 65-70% of the 29,000 lines proposed for installationunder the project will be for industrial, commercial and tourism purposes,25-30,' for residential and 5% for administrative and other purposes. APTtshigh tariffs are a constraint to any significant increase in the proportionof residential subscribers.

4.07 With the conversion of local automatic services from manual toautomatic working, the provision of high quality transmission links toAbidjan and subscriber trunk dialling, demand in the 31 provincial urbanareas concerned is expected to increase to 12% per year. Local service

would be provided under the project to 21 new rural areas; the installa-tions would be minimal and provide mainly for administration, socialservices, requested lines, and a public telephone. Exchange capacitiesin cach area will generally not exceed 10 lines.

h.o8 Long Distance Service - Forecasts of the traffic and circuitrequirements of the new microwave and VHF links and for the carriersystems on open-wire routes were made by S(FRECCM in 1970 and were basedon trafiic studies. Taking into account the effect of improved qualityof service following installation of the new equipment, it is estimatedthat long-distance traffic will increase annually through 1980 by about

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15$. This estimate is in conformity with experience under similar cir-cunstances irn other developing countries. The expansion program is designedto meet this traffic growth. Five of the new microwave links included inthe project (three are nearing completion), are to form part of the Pan-African network.

Least-Cost Solution and OPtimization of Pro.ject Construction Period

4.09 APT's furdamental network plans, which are satisfactory, weredr&wn up some years ago to provide for continuous expansion based on long-term demand. Numbering, transmission, and routing plans have been care-ful-Ly considered and are appropriate for the country. The choice of thecommon control systems, made in 1961, is sound and the principal longdistance routes are being established to provide for easy and economicexpansion.

4.10 The planning of the local network and local exchanges in theAbidjan region has been based on a study of telephone demand (see para.h.05) to provide the least combined cost for local network and switchingeouipment. The size and timing of the additions to the switching systemhave been related to the demand and to the lead time required before furtheradditional equipment can be installed under a next phase of development.The small exchanges for provincial towns have been designed in accordancewith standard plant practices to provide for least cost.

h.11 Automatic service offers economy in operations, speed in connec-tion and constant day and night service; automatic local switching systemsin the range of exchange sizes required for the principal towns, while re-quiring an additional 10% investmnent as compared with manual systems, havelower operating costs which more than compensate for the higher initialinvestment, in addition they have greater flexibility. Automatic long dis-tance switching systems require lower overall investment (including buildings)than a manual system; in addition, operating costs are lower. Manual systemsrecuire skilled and reliable operating and supervisory staff, which is some-times scarce, and when available could be better utilized in other fieldsof activity. Costs of ticketing manual calls are higher than metered callsand losses of revenue through unrecorded calls are not infrequent.

4.12 The choice of microwave systems for the ten routes, comparedwith the alternative system (coaxial cable), represents the least-costsolution after considering such factors as physical features along theroutes, future capacity requirements and maintenance difficulties in theareas concerned. For similar reasons, the choice of VHF for the newS. Pedro/Buyo and Tabou/Grabo routes, as compared with open-wire line,represents the least-cost solution.

h.13 The length of the construction period, size, and cost of theproject have been determined after review of APT's technicaland financial resources, demaznd, the time required to order, manufacture;and instaIl the plant, and prices. The-proUect has been drawn up tozchieve both a lowering of -unit costs through the benefit of bulk buying;

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and the optimization of the project construction period with equipment use.As regards the latter, the five-year period selected achieves this balanceand is consistent with normal telecommunication planning practice.

Return on Investment

4.14 The internal rate of return on the project, defined as the dis-count rate which equalizes the stream of expected revenues.attributableto the project with the capital and operating costs excluding taxes, is22p (Annex 8). A sensitivity analysis shows that the rate of return wouldbe 21% if a one year delay occurs in project completion, and 17% if cons-truction costs increased and revenues decreased by 15%. Should a variationof +10% in revenues occur the rate of return would be between 20' and 24%.

4.15 The true economic return on the project is however undoubtedlyhigher than the foregoing suggest since (a) the prices charged,even thoughhigh,do not adequately measure the full benefits to subscribers, particu-larly those obtaining access to service for the first tiTme, (b) there areexternal benefits which accrue to parties other than those who pay direct-ly for use of the facilities, and (c) the costs include the full cost ofextending service to new areas even though the full benefits will be ob-tained only in the future when additional lines are connected in those areas.

5. TIE BENEFICIARY (APT)

Organization and Management

5.01 APT was established on February 20, 1964 and is a branch of theMinistry of Posts and Telecommunications. APT's crief executive is theDirector-General and he is responsible to the Minister. APT has six de-partments, Postal/Financial and Telecommunications are operational, andthe remainder - Buildings/Transport, Budget/Accounts, Personnel and In-struction - provide support services; each is headed by a director. Anorganization chart is at Annex 2. The Postal/Financial Department providesroutine postal services and offers quasi-banking services through itsmoney order (national and international), and checking account operations;it also operates the National Savings Bank.

5.02 In the case of Ivory Coast the close integration of postal/fi-nancial and telecommunications services appears not to work well. Thedomestic telecommunications service promises to become a large enterprisewhich, to obtain the maximum benefits, should as far as possible be operatedon commercial principles; for this, the service needs considerable expertisein telocormunications management and a greater degree of financial autonomythan at p;resent. During negotiations, the Government agreed to undertakea study by qualified and experienced consultants not later than December 31,

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1976, in accordance with terms of reference approved by the Bank., andconsult with the Bank on any desirable institutional changes for thenational telecommunications services. A sum of US$50,o000 has beenincluded in the proposed loan to cover the estimated foreign costs ofthe study.

Staff and Training

5.03 on the top management level, the Director and the two seniorengineers of the Telecommunications Department are Ivorians; a further twoIvorian engineers are receiving training abroad. While academically qua-lified, this senior staff lack experience, particularly in management.The Department would thus need during the projectts construction periodthe technical assistance described in para. 3.08.

5.o4 At the operational level APT has 60 supervisory staff; 36 areIvorian and 24 French expatriates; the latter also perform advisory func-tions. This level of supervisory staff is appropriate for the scale ofAPT operations and given the proposed expansion of operations and develop-ment will have to be maintained. Considering the scarcity of qualifiedIvorian staff, it would therefore be prudent during the construction periodof the project that the present level of expatriate assistance be retained.During negotiations Government agreed that APT would (a) maintain a levelof qualified staff in adequate proportion to its operations,and (b) byDecember 31, 1975 prepare and thereafter implement a program for the selec-tion and training of Ivorian staff to tale over supervisory duties now per-formed by expatriates.

5.05 The permanent staff of APT's Telecormunications Department numbersabout 1,370 (or 30 per 1,000 telephones) and another 300 are employed on adaily basis. Even after taking into account that a number of services,including PBX and extension telephone installation and maintenance, somecable laying and jointing, are undertalcen by private contractors, the overallnumber of staff employed by APT on telecommunications compares favorably withsimilar entities in other developing countries. Analysis of staff categoriesindicates, however, that to meet the needs of the project APT will have torecruit additional skilled staff particularly in the technical and accountingfields (see paras. 5.13 to 5.15).

5.06 APT engineers and senior technicians are trained outside the IvoryCoast, mostly in France. Junior technicians are trained at the Abidjannational telecommunications school and the multi-national UNDP-financedschool in Rufisque, Senegal. Generally speaking the facilities availablefor training technical staff in West Africa are adequate, although it willbe necessary to send staff overseas for specialized technical courses.

5.07 Provision has been made in the proposed loan to cover the foreigncosts of needed additional overseas training (see Annex 5). Such trainingwould include investment and network planning and financial management andplanning. Provision has also been made for the foreign cost of traininggiven to APT staff by the firm engaged to establish APT's new accountingdepartment (see para. 5.13).

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5-08 APT salary levels for certain supervisory staff, especiallyaccountants and skilled technicians, are not competitive with those ofsimilar staff in the private sector. Xoreover, promotion prospectswithin sorme APT services are less favorable than in other branches of thepublic sector, and these deficiencies have caused APT difficulty in re-cruiting and retaining staff. During negotiations Government agreed thatwithin one year of loan signing APT would review the grading and promotionpolicies for APT telecommunications staff, following which the Governmentwould consult with the Bank, and within a reasonable period of time takesuch necessary measures regarding the policies required to attract andretain qualified personnel for APT.

Investment Planning

5.09 APT's telecommunications investment planning requires improve-ment. During negotiations, the Government agreed that APT would strengthenthe Planning and Studies Office of the Telecommunications Department.

Subscribers Installation and Maintenance Services

5.10 Presently, the installation and maintenance of extension linesand private branch exchanges (PBXs) is carried out partly by APT and partlyby private contractors; such work is highly remunerative. Since APT could under-take all this work, with the exception of medium and large-sized PBXs, with-out major new investment, the Bank has advised APT to progressively take overthe installation and maintenance of all subscriber extension lines and smallPBXs/1 (see para. 3.09).

Accounting

5.11 APTts general accounting and budgeting is unsatisfactory. APThas no qualified accounting staff and its financial accounts are delayed,incorrect and incomplete; operating accounts for individual services arenot maintained, and the basic essential information for good financialcontrol is not available. Methods of budget preparation, presentation andcontrol are equally unacceptable.

5.12 After Government became aware of the above deficiencies it engageda French firm, IMessrs. Guerard and Vallas in early 1973, to prepare the 1971and 1972 accounts. Government has also engaged, with French bilateral assist-ance,and in consultation with the Bank, French management consultants, IDET-CEGOS, to prepare and implement a new accounting system suitable for APTtsmultiple operations which will provide separate operating results for eachof AI'T's services. The work of IDET-CEGOS will cover only a part of therequired improvements, however, complete reorganization of AI'T's accountingoperations on a commercial basis is required urgently. To provide for sucha reorganization, during negotiations, Government agreed that APT would:

/1 Up to ten lines.

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(î) reinforce no later than December 31, 1974 its accountingdepartment to be headed by a qualified professional assistedby an adequate number of suitably trained staff to take res-ponsibility for implementing and operating satisfactoryaccounting and budgeting systems;

(ii) engage professional accountants to set up and maintain theaccounting systems until the arrangements in (i) are fullyoperative, including:

(a) establishing as from January 1, 1975, accountsshowing separate operating results and financialpositions of the postal/financial and telecommu-nications services;

(b) recording, valuing and where necessary apportion-ing between postal/financial and telecommunicationsservices all fixed assets existing as of January 1,1975;

(c) establishing in APT satisfactory systems for budgetpreparation and control by December 31, 1975;

(d) establishing in APT appropriate systens of inventoryaccounting by December 31, 1976; and

(e) assisting in the establishing of the new department,including the training of staff.

Telecomnunications Billing and Collection

5.13 The problems of APT's telecommunication billing and collectionare set out in Annex 17. Unsatisfactory telecommunications billing hasbeen creating serious liquidity problems and is the main cause for theheavy borrowing by APT of Treasury funds. Recent information indicatessome improvement in this field, however during negotiations Governmentagreed that APT would:

(i) within six months of loan signing employ experts satis-factory to the Bank to review the computer progran forAPT's billing operations to ensure correct and efficientbilling and accurate revenue accountiing;

(ii) within six months of loan signing employ an expert, satis-factory to the Bank, to (a) supervise and improve billing,collection, and revenue accounting at APT's headquarters,and (b) prepare for agreement with the Bank a timetablefor effecting the required improvements in APT's revenueoperations; and

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(iii) within one year of loan signing take measures, satisfactoryto the Bank, to strengthen and then maintain qualified staffin charge of APTts billing, collection and revenue operations.

Audit

5.14 Financial control is weak; the internal audit is unsatisfactoryand an external audit of the accounts has never been made. During nego-tiations Goverrment agreed that APT would (i) establish by December 31,1975, an independent internal audit unit, satisfactory to the Bank,whose chief would report directly to APTts Director-General; (ii) engageindependent auditors, acceptable to the Bank, to conduct annual auditsof APT's accounts; and (iii) submit to the Bank certified financial state-ments and auditors' report within six months of the end of each fiscalyear.

Tariffs

5.15 APT tariffs are recommended by the Minister of Posts and Tele-cormmunications and fixed by the Council of Ministers. APT's telecommuni-cation tariffs (see Annex 9) are generally comparable with those of theother francophone West African countries, but very high compared withtariffs elsewhere; for example, the charge for local telephone calls isUS012 compared with US02-6 in most developing countries. Tariffs includea number of unusual features, including anomalies in the call charges andexceedingly high connection fees for manual subscribers. Since manualsubscribers are located in the provincial towns and rural areas the highcharges are not conducive to development in those areas. With respect tointerstate traffic within the francophone zone APT foll._ows tariff policiesrecommended by the Confd'rence Africaine des Postes et Télécommunicationsdes Etat3 de L'Afrique Occidentale (CAPTEAO).

5.16 APT tariffs need early review but before this is possible Govern-ment must agree the objectives of any new telecommunications tariff policy,and APT must have established accurate telecommunication service accountsand collated information on the pattern of telephone usage, including theeconomic status of users, the purposes for iwhich calls are made, and theimportance of communications for regional development. As the 1975 auditedaccounts for APT's telecommunication services could be available by June 30,1976, Goverruent agreed during negotiations that APT would undertake andcomplete a study of telephone usage and the economic benefits of the tele-communication services, not later than December 31, 1976 and a tariffstudy not later than June 30, 1977; and that both studies would be inaccordance with terms of reference acceptable to the Bank. The Governnentalso agreed that no changes would be made in APT's telecommunicationtariffs until the tariff review had been completed and a course of actiondiscussed and agreed with the Bank.

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Pôstal/Financial Department

/15.17 APT's Postal/Financial Department operates at a loss- ; one ofthe main reasons for this is the heavy costs of operating the publiccheeking account service. In addition, the Departioent has other finan-cial problems not least of which are an unusually large amount of unpaidreceivables and a shortage of working capital. A comprehensive review,covering operations, staffing, financial arrangements, unpaid receivables,the use and deposit of funds, and the cash cover required for public check-ing account and money order transactions would appear to be long overdue.During negotiations, the Government agreed that APT would employ qualifiedand experienced consultants to complete a review of APT's postal/financialservices by December 31, 1976, and then after consultation with the Bankimplement the measures necessary for improving the operations and financesof those services.

6. FINANCES

6.01 With an estimated financial rate of return of about 20% APTIstelecommunication services are very profitable and contrast with itspostal/financial services which are operated at a loss. In recent yearstelecommunication surpluses have more than covered the losses and invest-ment requirements of the postal/financial services. Nonetheless, APT'soverall financial position is unsatisfactory; the entity has a seriousliquidity problem and has had to take up large overdrafts from Governmentto maintain operations and carry out modest development. This sitiùationbas been caused by delays, o! as much as one yeare in billing telecommu-nications subscribers, poor collection procedures, non-payment by theGovernment of its bills, and generally poor financial and budgetary con-trols. APT urgently needs additional long-tenm capital to implement itsprograms of administrative and institutional improvement as well as amajor physical development program.

Telecommunications - Past Finances

6.02 In the absence of accurate and separate accounts, the estimatedIncome Statements, Balance Sheets, and Sources and Applications of FundsStatements for APT's Telecommunications Department for the period 1970-1973

/1 Financial aspects of APT's postal/financial operations are dealt within Annexes 18 to 21.

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and which appear irn Annexes 10, 11 and 12 were prepared on a pro-eormabasis from existing financial data, supplemented and amended by îiiforma-tion received from ?enior staff. Between 1970 and 1973 APT's overalltelecommunications revenue increased by about 13% per year, and aVerL._gross plant added wâs about 11% annually. In the same period net incomefrom operations rose from CFAF 807 million to CFAF 1256 million, the tele-communications operating ratio fell from 68 to 64, and the estimated rateof return on telecomunications net fixed assets increased from about 17%to 20%.

6.03 In contrast to the above, the Department's Balance Sheet reflectsAPT's serious liquidity problem. As of December 31, 1973, unpaid subscriberaccounts alone amounted to about CFAF 7.4 billion (US$30 million), equiva-lent to about two and a half years of telephone revenue, and of which about50% was due from the Government. Delayed billings are expected to resultin collection losses amounting to about CFAF 1 billion (US$4 million) inprivate subscribers debts. APT's Governrnent overdraft pertaining to tele-communications as of end-1973, amounted to about CFAF 4.8 billion (US$19million), although as telecommunications accounts are not kept separatelythis figure does not show independently in APT accounts.

6.oh Below, the financing of APT's telecommunication services duringthe four years 1970-1973 is summarized:

OFAF CFAFUses of Funds (millionsTCapital investment 4,627Less: financed from borrowings,

grants, etc. 1L28 3,339

Subscriber receivables - increase 3,015Debt service 336Postal/financial losses & investment 1 419

Less: internally generated funds 6,048 722

TOTAL 4.061

Financed from:Increase in short-term Treasury borrowings 3,513Increase in short-term creditors 548

TOTAL 4,o61

In the past four years about 25% of telecommunications development has beenfinanced by long and medium term borrowings; as telecommunication serviceswere highly profitable APT should have been able to finance the remaining75% of capital investment as well as debt service and postal/financiallosses from its own resources and still have shown reasonable surplus.However, owing to poor billing and collection described above, APT wasforced to resort to Government overdrafts to meet operational and develop-ment requirements.

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6.05 Government is APTts principal debtor due both to billing delaysand failure to pay fully the bills subnitted for settlement. Therefore,d-ring negotiations, Governrent agreed that it would settle its telecom-munication debts as of December 31, 1973 by four equal annual install-ments terminating in 1977 and settle all bUils for future telecomnunica-tions services within 90 days of their presentation.

6.06 The APT practice of automatically charging the losses and invest-ment requirements of the Postal/Financial Department against telecommuni-cation surpluses militates against operational and development efficiencyand good financial management. It is essential that the two Departmentsbe financially autonomous and transfers of funds between the two be thesubject of properly prepared action the implications of which are criticallyanalyzed. During negotiations Government agreed that (i) APT would usetelecommunications funds for other purposes only when those funds weresurplus to telecommunications operational, debt service, and investmentrequirements and (ii) in the event of lisufficient funds being aviilablefor any of APT's operations and inves tuant it Yould take steps,8 satisfactoy-to the Bank, to cover the deficit.

6.07 The capitalization of APT's Telecommunications Department as ofDecember 31, 1973, has been estimated conservatively as follows:

CF»A U5$ %-:-millions --

Equity 8,361 33.4 90

Long-term debtSavings bank loan 12FAC loan 118CCCE loan 199Supplier credits 881 10

Total capitalization 9,212 37.0 100

Telecommunications - Financing Plan

6.08 APT's capital investiment and working capital requirements fortelecommunications during the FYs 1974-1978 period, along with the sourcesfrom which they would be met, are summarized below. Further details aregiven in Annex 12.

/1 Excluding current maturities. Details are in Annex 15.

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Financing Flan 1974-1978

CFAF CFAF UsI- millions-----

Requirements1974-1978 Program 13,1409 53.6 88Future Program/1 200 0.8 1Working Capital 1,66 6.7 -il

Total Requirements 15,2714 61.1 100

SourcesInternal Cash Generation 11,741Less: Debt Service (2,256)

Contribution to Postal/FinanciJ,l Dept./2 (2,058) 7,427 29.7 49

Grants 197 0.8 1

Subscriber Deposits 170 0.7 1

Borrowings:Supplier Credits 730 2.9 5Caisse Centrale 500 2.0 3IBRD Loan 6,250 7,480 25.0 41

Total Sources 15,274 61.1 100

6.09 Analysis shows that APT would require continued financingassistance from Government until 1976. During negDtiations, the Govern-ment agreed to continue to give Treasur7 support to APT to enable it tomeet cash requirements for day-to-day operational and development needsuntil the entity has established a cash position satisfactory to the Bankc.Furthermore, at negotiations the Government agreed that during the projectconstruction period APT will undertake no capital expenditure for telecom-munications, in addition to that included in the 1974-1978 program, in anyone year in excess of US$400,000 without a financing plan approved by theBank.

6.10 Initially, APT's 1974-1978 program provided for the constructionof a high-rise building to accommodate postal/financial and telecomunica-tions technical and administrative staff in Abidjan; the estimated costof CFAF 1 billion (US$4 million) was to have been met from APT's internalresources. During negotiations Government asked that the building betaken out of the program since it had no immediate intention of startingconstruction and that completion of it within the project period was uncer-tain. The Government however agreed that it would consult with the Bankbefore deciding on the construction of the building and also present afinancing plan for it if construction is to be undertaken prior toDecember 31, 1975.

1 Initial costs of program to start in 1978.Î-2 Equivalent to 4% dividend on notional equity of Telecommunications Dept.

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Telecommunications - Future Finances

6.11 Forecast Income Statements and Balance Sheets for 1974-1980 forthe Telecommunications Department are given in Annexes 10 and 11 vith rela-ted notes in Annex 13. As shown below, net income is forecast to grow ata satisfactory rate throughout the period; thereafter, further imp.rovementshould occur follawing commissioning of new facilities. Liquidity isestimated to show significant improvement after 1975 and should reach asatisfactory level by the end ôf FY 1978.

1974 1975 1976 1977 1978Net income (before interest) -

CFAF millions 1,360 1,143 1,523 1,646 1,790

Operating ratio % 65 67 68 69 70

Rate of return % 18 17 15 13 12

Debt/equity ratio 15/85 19/81 25/75 33/67 35/65

Current ratio 0.8:1 1.2:1 2.0:1 1.9:1 2.0:1

6.12 Major assumptions used in the forecasts are that in the five-yearperiod through 1978 telephone revenue would increase by about 12% annually;telex service revenue by 12v;3 and because of improved telephone facilitiestelegraph revenue increases would be liuited to 1% and 3%, respectively,for 1975 and 1976. Salaries are projected to increase at 10-12'M per yearthrough 1978 and other operating expenses by 12½-15%. On this basis theoperating ratio is expected to increase froin 64 in 1973 to 70 in 1978, afterwhich, with higher revenues the ratio should improve to 66 in 1980.

6.13 The rate of return on telecommunications net fixed assets inoperation is expected to fall from about 20% in 1973 to 12% in 1978 and thenrise to an estimated 14% in 1980 and to higher levels thereafter. The tem-porary downward trend is due to the time lag between the commissioning ofnew plant and the build-up of related revenues. Returns during the projectconstruction period, which would average 15% on net fixed assets, would beadequate to generate the cash needed for this period of heavy investment.After 1978, assuming an annual growth of gross fixed plant investment of

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about 10% and yearây surpluses, after meeting telecomunications :requiro-ments, equivalent to the postal/financial services operational deficitand investment requirements, a rate of return of not less than 10% wouldbe needed (see Annex 1h). During negotiations the Government agreedthat, unless otherwise agreed with the Bank, APT would achieve a rate ofreturn of at least 10% per year after 1978. On the basis of presenttariffs,projections indicate that the rate o return would exceed 10%after 1978 and surpluses would be available for transfer to Governmentor the reduction of tariffs. Indicators which will help monitor APT'sperformance are given in Annex 16.

6.14 Although throughout the program construction period debt servicecoverage is expected to remain satisfactory, Government agreed during nego-tiations that no new long-term debt for telecommunications would ke incurredby APT without consulting with the Bank, unless the maximum future debtservice for telecommunications is covered by 1.5 times by net telecomiuni-cations revenue before charging depreciation. Furthermore, Governmentagreed that once APT establishes a satisfactory liquidity position, tobe defined in agreement with the Bank, short-term borrowing will be usedonly for financing the normal working capital of telecommunications opera-tions and will not exceed four monthst telecomnunications cash operatingexpenses for the preceding fiscal year or for any 12-month period, which-ever is the greater.Fiscal Impact6.15 Although during the five year period 1974-1978 APT's Telecom-municatiqns Department would not pay customs duties on equipment importeddirectly for the project it would contribute to Government revenues aboutCFAF 405 (Us$1.6) million for local taxes related to construction worksof the project; in addition, it would contribute CFAF 2.0 billion (US$8million) towards Postal/Financial Departxent deficits and investmentrequirements. Purthermore, by 1976 the telecommunications services wouldno longer require short-term borrowing from the Treasury. Taking intoaccount the settlement of overdue Goverment debts, it is estimated thatbetween 1974 and 1978 there would be a net inflow to the Treasury of aboutCFAF 2.7 billion (US$10.8 million) and the telecommunications serviceswould finance about 49% of a major progrun without recourse to the nationalbudget.

7. REC0MM2DATICNS

7.01 During negotiations, Government agreed that:

(i) qualified and experienced experts will be employed for thedetailed engineering of the project, and should the Govern-ment and the Bank find it necessary, an experienced engineerwill be employed to assist in the coordination and implementa-tion of the project (para. 3.08);

(ii) a review will be made by qualified and experienced consul-tants of any institutional changes required for the telecom-munication services (para. 5.02);

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(iii) the level of qualified staff, in adequate proportion to opera-tions, will be maintained; a program wiii be prepared andimplemented for local staff to take over the supervisoryduties carried out by expatriate staff; (para. 5.04);

(iv) a review will be made of APT's grading and promotion poli-cies for the telecommunications staff (para. 5.08);

(v) the investment planning service for telecommunicationsdevelopment will be strengthened (para. 5.09);

(vi) accounting services will be improved by and from specifieddates (para. 5.12);

(vii) a review of computerized billing operations will be made andsteps taken to strengthen and buprove the revenue accountingand collection staff operationTiff para. 1i3;

(viii) an internal audit unit satisfactory to the Bank will be esta-blished and independent auditors satisfactory to the Bankwill be appointed (para. 5.14);

(ix) a telephone usage study and a satisfactory review of APT'stelecommunications tariffs wili be undertaken; no change inAPT's telecommunicatians tariffs will be made until a tariffreview has been completed and the Bank has been consulted(para. 5.16);

(x) a review of operations, staffing and finances of APT's postal/financial services viii be undertaken by qualified and expe-rienced consultants (para. 5.17);

(xi) satisfactory arrangements will be made for the settlement ofGoverninent buls for telecommunication services by 1977 (para.6.05);

(xii) telecommunications funds wili only be used for other purposeswhen those fbmds are surplus to telecoemunications require-ments; in the event of insufficient funds being availablefor any of APT's operations and investment steps wll be takento cover the deficit (para. 6.06);

(xiii) Treasury overdraft facilities vill continue to be made avail-able to APT's telecommunication service until a satisfactorycash position has been established and during implementationof the project no additional capital expenditure aboveUS$40o,000 will be lncurred without a financing plan agreedwith the Bank (para. 6.09);

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(xiv) a decision on the construction of an administration buildingwill only be taken after consultation with the Bank and afinancing plan wvuld be presented to the Bank if constructionis to be undertaken before December 31, 1975 (para 6.10);

(xv) unless otherwise agreed, a rate of return of 10% per yearwill be achieved after 1978 (para. 6.13); and

(xvi) limitation on long and short-term borrowings for tele<sommu-nications operations will be observed (para. 6.14).

7.02 On the basis of the above arrangements, the project would besuitable for a Bank loan of US$25.0 million.

April 9, 1974

IVrOR? COST

AnTISIATION DnI POSTB5 ET TBItMiNrCATIONS (APT)

International Statisticul Data

'rosa National Product Population TELEPHONESPer Capita NATIONAL PRINCIPAL CITIES b} National International ServiceJ/C aINSTT Per Capita Grovth Rate Total No. Par 100 Fop. Grost ERate % sAtoaatic Staff par1,000 of Total 209. of Total Tel. LoaaeOistance Direct Access to:

1970 1965-1970 1970 1970 1970 196551970 tel.,lVUS S 000' 000'a No. * S No. % 1 g 9iaty Satellite Subarine Cable

U.S.A. 4,235 3.4 206,800 115,222 56.38 5.4 99.9 9 45 51 E Atl. Pac. XSeden 2,788 3.2 8,050 4,307 53.74 4.9 99.7 n.a. 34 43 R - xPaitaerlas:d 2,610 2.4 6,350 2,8417 45.38 6.o 100.0 4 37 50 E _ XCaak 2,720 2.8 21,700 9,753 42.28 5.5 98.8 n.a. 41 49 E Atl. XFruece 2,288 3.7 51,000 8,114 16.05 7.3 80.1 19 25 50 E Ati. XAustrulie 2,169 2.4 12,500 3,599 29.27 6.1 89.7 22 64 67 E Pac. Ind. XGEZ9V (Yed.R.ep.) 2,270 3.7 61,800 13,835 22.39 9.4 100.0 n.a. 29 46 E Ati. Ind. XlUe za_1d 2,o68 1.7 2,950 1,203 42.63 4.6 86.7 18 54 63 F _ XV.b. 1,862 2.0 56,o00 13,947 24.96 7.0 98.6 20 33 43 E Ati. Id. XItaiy 1,343 4.6 53.600 8,528 15.98 9.0 100.0 n.a. 23 53 E Ati. XYUoal.aVia 553 4.2 20,600 623 3.05 11.0 95.9 19 12 49 G _ _Japez 1,40 10.0 _102,800 23,132 22.50 13.4 91.8 n.a. 36 48 E Id. Pac. XVYez,la 977 1.4 10 650 378 3.70 7.8 97.6 18 35 83 G Atl. XArgentins 836 1.0 244o00 1,668 6.90 2.5 92.7 24 47 86 G Atl. -Chile 487 1.8 9,800 348 3.60 6.8 87.2 16 35 76 F Atl _Coloebia 319 1.4 21,350 546 2.63 7.4 96.8 n.a. 26 77 G Atl. -Erazil 258 1.6 93,500 1,787 1.94 7.2 93.3 n... 20 66 F Atl. -Nicoe 566 3.4 50,950 1,328 2.67 12.9 93.0 n.a. 27 75 G Atl. -Co.ta Ric- 469 2.1 1,750 56 3.26 20.5 95.9 13 19 80 G Atl. -O'Gatla 331 1.7 5,150 38 o.76 10.6 95.9 20 15 91 P _ _ElwSlvaor 292 2.1 3,500 35 1.03 9.7 95.5 33 28 84 GNai 67 0.4 10,800 6 o.06 19.2 83.9 120 5 91 _ _SJeapore 753 3.8 2,100 136 6.70 11.5 100.0 14 100 100 - - Xn4i 400. 2.7 500 17 3.40 7.9 85.5 33 14 53 G _ XH1lffli- 358 4.3 11,050 169 1.58 6.9 89.8 45 3 34 E Ind. -Chim (Tivn) 3G5 6.5 14,250 339 2.37 18.0 82.2 39 26 72 F Pac.I-q 275 2.9 9,100 120 1.25 14.1 81.8 47 54 74 pPa4a, & F.G. 221 2.5 2,400 19 0.79 16.1 85.4 34 4 78 P - _Ceyloo 188 2.3 12,550 61 0.49 7.7 98.7 n.a. 5 57 PPaist n 106 3.1 129,550 193 0.17 9.8 78.2 140 7 75 FIDdi& 102 1.0 550,100 1,160 0.21 8.8 75.7 129 4 50 F _ _Inaaeaia 1972 102 0.8 118,250 241 0.20 6.7 7.0 72 8 53 F Ind.Iran 370 4.9 29,800 307 1.03 8.1 86.1 20 24 82 F Atl. -Zambia * 236 3.6 4 300 52 1 28 10.9 98.0 50. 13 62 P - -Ghn. 1971 168 0.7 9,000 47 0.53* 10.3 83.9* 127 14 76 F - _Kapa 134 1.4 10,8w0 72 0.69 7.1 85.1) (7 73)Uganda 112 1.1 8,550 28 0.29 9.2 79.6) 419! (5 61) G Ind. -(Tansania 82 1.2 13,150 32 0.24 8.8 74.4) (3 43)Nigeria 70 0.3 65,650 81 0.13 6.2 79.2 n.a. 3 57 F Atil.blavi 52 2.2 4,500 12 0.26 11.4 89.8 n.a. 3 57 P

Upper Volt. 56 0.1 5,200 3 0o.6 6.o 82.5 70 3 82 PKali 50 1.2 5 000 5 0.10 3.0 57.0 117 6 *72 P - -Senegal 194 1.4 3,800 28 0.73 2.0 92.0 50 31 93 P Ati. -Thafland 180 6.6 36,200 145 0.54(1972) 12.0 97.0 27 8(Razwok on0y) 74 F Atl. Ind.Ethiopia 80 2.0 25,200 46 0.18 13.1 89.3 59(1972) 4 81 P _ -TrinidAd , Tobago 750 4.8 1,000 56 5.60 8.0 99.8 n.a. il 63 G Atl.Ivory CoEat 310 7.5 5,100 38 0.75 12.0 89.0 30 23 83 F Ati.

SourcesPopu.lation & G.N.P. World Bank Atlas (1970)

Telepbonse Statictics The World'a Telephones by A.T.&T. (1970)

Iog Distance andIat.r,ational Service Division Records

These figures are not strictly comparable. In soae cnses international, local and long distance services are provided by different orrgninationa in f zss e country.Telegraph staff may or may not be included and there are vide variations in the ase of contrant labor for both anintenadce nd co,ntrmction work. The ouater oftelephone operators required alao varies vith the proportion cf aansal to autoatic service.

e.g. In tle U.S.A., 45% of the population live in the principal cities and hae 51% of the country's telephones.

1/ E = lccelient. Moat cities nd centers connected by nicrovave or coaxial systems vith extensive Subscriber Trunk Dialling.G - Good. Principal cities connected by mlcrowave or coazial sy.tsme vitb Subscriber Trcnk Dialling.

Fair. Principal cities con-ected by microwave or coxioJ nytems. bot colla handled ceai-actonatlcalo' or sucily. 1yP - Poor. Little or no microvave or coaxial. Cells bet-een inter connectei cities handled manualy.

Countries which have satellite earth ntation or ucbbarir. clb1e ter-inals vithin their borders.

Service provided by a cosrson nrgenicatio*.

Nov_ber 8, 1973

IVORY COASTADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

ORGANIZATION CHART

|Minister of Posts &

CENTRAL ADMINISTRATION - _

_Director Genierail

Deputy Director Genra

nne Budget Accounting ~~Postal & Financial jTelecommunications Buildings & Tre'nsportato Pi ShoD r ~ o n n e |[ B udget & A cco u nt,n g | ______3_rd _Idi _B _r; ____ I ji9

* Budget * Postal Operation Planning & Studies Bulding

Aecounting Financial Services | Local Networks | Transportation

Organization & Long DistaneStudies

Telecommunieations|Opereticn

EXTERNALSERVICES

Regional st Offices Regio1 TelecommunicationiCenters

WNorld Ban k-81 15 (FI)

ANNEX 3

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

Basic Data

December 31:1972 1980Actual Forec~ast

1. Local Telephone Service

Number of telephone stations (estimated) 45,000 99,500Number of telephone connections 20,100 55,300

.Annual. growth in subscriber connections (Abidjan 13% (1963-1972)(Provinces 11% (1969-1972)

Expected growth in subscriber connections (Abidjan 14% )(1974-1980)E~~cpected growth ~~~(Provinces 12% ) 1-90

(Total 101 148Number of telephone exchanges (Automatic 22 57

(Manual 79 91

(Total 27,640 65,700Installed capacity (Autoaatic 24,400 61,950

(Manual 3,240 3,750

2. Long Distance Telephone Service

Number of large-capacity microwave links 5 1hNumber of VHF/UHF links 25 28Overhead lines 6,000 km 7,500 km

3. Telegraph and Telex

Telex subscribers 436 800

Telex exchianges (number 1 3(capacity 50O 1,100

April 5, 1974

ANIOEX 4Page 1 of 4

IVORY COAST

ADMINISTRATION DES POSTES ET T=ECO14MUNICATIONS (APT)

Existing Telecommunications Facilities

1. Local Telephone Service

(i) The total switching capacity and number of connected telephonelines in the Ivory Coast as of December 31, 1972, were as follows:

Number of ConnectsdExcchanges Capacity Lines

Automatic service:Abidjan 12 19,900 14,942Provinces 10 4.500 2x82

Sub-total 22 24L,h00 17,774

Manual service:Provinces 79 3,24o 2,321

Total Ivory Coast 101 2742095

(ii) The 22 automatic exchanges are as follows:

Location Ehcchange CcnnectedCaapacity Direct Lines

Abidjan:Plateau I R6 6,500 4,079Plateau II Pentaconta 2.500* 2,463Canebière 1,500 1,427M4 5>,500 3,403

Koumassi *

KK9 11,000 744Cocody .1,450* 1 ,413Adjame 950* 948Binge rville 100 93Grand Bassan 200 182Bonoua 50 45Dabou 145

Total Grea.ter Abidjan Area 19,900 14,942

Provinces:Abengourou 300 272Agboville 200 156Bouaké 1 ,600 821Daloa 800 392Dimbokro 200 180Gagnoa 400 344Korhogo 200 144Man 300 249Sassandra 200 91Yamassoukro 300 183

Total Provinces ___ 2.832Total Ivory Coast 2h.400 17 774

ANNEX 4Page 2 of 4

*The following switching equipment is to be added in 1973:

Lines

Plateau II 1,500Cocody 350Adjamd 300Koumassi 500

2,650

(iii) The Abidjan Plateau I exchange is of the old French R6 system,and because of its low traffic capacity, not more than 4,000 of the6,500 installed lines will be connected in the future. This equip-ment, which is of a type no longer manufactured, will probably be sub-stituted in APT's next development program (after 1978). The urbanexchanges, Abidjan Plateau II and its satellite Canebière, KM4 and itstwo satellites EM9 and Koumassi, Adjamé and Cocody use the Pentacontacommon control system. The suburban exchanges Bingerville, Bonoua,Dabou and Grand Bassam are of rural type and have been installed inrecent years. The Pentaconta exchanges which were installed between1962 and 1972 are in good order. The satellite exchanges, althoughadequate for the earlier stages of APT's development, are unsuitablefor present traffic conditions and are the cause of switching diff'i-culties in the Abidjan region. Traffic per line is higher than thatfor which the equipment has been designed, exchanges are overloaded,and consequently service is poor, particularly during the busy hours.The present facilities are insufficient to meet the requirements ofthe expanding capital city particularly because of the poor conditionand insufficient capacity of the urban cable distribution network.

(iv) The provincial automatic exchanges are all of the common controlsystem and have been installed within the past ten years. In accordancewith Ivory Coast Telecommunications Plan, the provincial exchanges atAbengourou, Agboville, Dimbokro, Korhogo, Man and y-amassoukro should beequipped as transit exchanges. However, at the time of procurement, andmainly to reduce costs, APT ordered local exchanges with limited functionsfor long distance traffic and without transit facilities. This solutionis now seen to be inadequate and regular exchanges including transitfacilities must be installed to provide long distance dialling and topermit the development of traffic with adjacent areas. Existing switch-ing will be redeployed to other exchanges (see Annex 5).

(v) Manual telephone service is offered in the provinces as follows:

Number of Exchange Total ConnectedExchanges Capacitv Capacity Lines

2 150 300 22413 100 1,300 93218 50 900 57112 25 300 21>34 under 25 r279 3,2 2,321

ANNEX 4Page 3 of h

(vi) The evolution of the number of main telephone lines and theyearly growth duding the past few years has been as follows:

Provinces andAbidJan Urban Network Abid.lan Suburbs Total Ivory Coast

1963 4,831 ) )1964 5,702 18% ) )1965 6,383 12% ) n.a.) n.a.1966 7,455 17% ) )1967 8, 581 15% ) )1968 9,713 13% 3,699 13,4121969 10,657 10% 4,293 16% 14h,950 12%1970 12,366 16% 4,774 11% 17,240 15%1971 13,794 12% 5,111 7% 18,905 10%1972 14,477 5% 5,618 10% 20,095 6%

Yearly growth of connected main lines in the Abidjan area averaged about13% between 1963 and 1973. However, owing to the saturation of thelocal distribution network and to delays in the execution of developmentworks growth fell to only 5% in 1972. In suburban Abidjan and in theprovinces annual growth of connected lines has averaged about 11%since 1968.

2. Long Distance Service

(i) The following large-capacity microwave links are in service:

Abidjan - AgbovilleAbidjan - Digo - Gagnoa,Digo - Dotenzia (Bouafle) - Bouaké'Dotenzia (Bouaflé) - DaloaMan - Odienne

(ii) The undermentioned large-capacity microwave links are underconstruction and should be brought into service early in 1974:

Digo - San PedroBouake - Kohrogo - Upper Volta BorderAgboville - AbengourouAgboville - BouakéAbidjan - Dabou - Jaqueville

(iii) The transhorizon link Daloa - Man which provides inadequatetransmission quality will be reinstalled on a shorter distance aftercompletion of the proposed project.

(iv) Present long distance facilities (see Map IBRD 1068 4R)consist of:

Microwave links - 58,000 channel-kmCarrier equipment on overhead lines - 43,200 channel-kmVHF links - 6,,60o channel-kmLong distance cables - 2,200 channel-km

ANNEt 4_Page 4 of

3. Telegraph and Telex Services

Demestic telegraph service is provided through the telex andtelephone facilities and HF links with the remote areas.

A 50O-line automatic telex exchange located in Abidjan providestelex service to 400 subscribers in Abidjan and 36 in the provinces.

4. International Services

International telephone, telegraph, telex and data transmissionservices are provided by INTELCI either through its own recently inaugu-rated (November 1972) satellite earth station or by HF radio circuits.

koril 5, 1974

ANNEX 5Page 1 of 6 pages

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMMNICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

The Project

The principal items of the project to be realized during thefive-year period 1974 through 1978 are given below. A table of costs ison page 6 of this Annex. The project construction schedule is inAnnex 6.

A. Local TeleDhone Service

1. The installation of switching equipment for 38,250 automatic ex-change lines at the following locations:

Supplier Credits orBilateral Assistance Extensions To be

Bank (Orders placed or to existing Commis-Location Financed to be placed) Contracts sioned

AbidjanBanco - 1,000 - 1975Plateau II - 3,000 3,000 197ht-1977KM9 - 1,000 1,000 1974-1977Koumassi - 50O 500 1974-1977KM4 - - 4,5oo 1976Adjam3é 3,500 - - 1977Cocody 7,000 - - 1976Deux Plateaux 2,000 - - 1977Riviera 1 700 - - 1977

Total Abidjan 1 iI-00 9,000

ProvincesAbengrourou 1,000 - - 1976Agboyille 600 - -

Dimb6kro 700 -Korhogo 1,000 - _Man 1,00o -Yamassoukro 600-Béoumi 100 - _ 1977-1978Bouna 100 - -l

Boundiali 100 - -Duékoue' 100 - -IGuiglo 200 - -Issia 150 - '

M'Bahiakro 100 - -N'Douci 100 - -Odidnne 400 - -Oumé 200 - - "Seguéla 200 - -Soubré 100 - -Touba 100 - -

ANNfEX 5Page 2 of pages

Supplier Credits orBilateral Assistance Ectensions To be

Bank (Orders pla.ced or to existing Commis-Location Financed to be placed) Contracts 9ioned

Provinces (Con't.)Tiebissou 100 - 1 1977-1978Touba 100 - - - 1977-1978Gagnoa - - 400 1977-1978San Pedro 500 500 1975-1977To be allocated

see para. 2(b) -1100

Total Provinces 227,00 1 _90.TOTAL 7,100 9°90

Abidjan 28,700Provinces 9,55o

Total lines 3SP25(

2(a) Redeployment of 3,200 lines of switching equipment presentlylocated in the Cocody, Adjamé and Canebière exchanges to the followingexchanges in the Abidjan area:

LocationBanco 1,000 1978Konmassi 500 1977Abobo 1,000 (new location) 1977.Anyama 700 (new location) 1977

Total lines 3.200

(b) Installation of 1,500 lines of switching equipment redeployedfrom the Abengourou, Agboville, Dimbokro, Korhogo, Man and Yamassoukroexchanges and 1,100 new lines to be ordered under bilateral assistancearrangements (see para. 1) in the undezmentioned 16 provincial exchanges:

LocationAboisso 200 1977Adiake 50 1977Adzope 300 1977Agnibilékrou 100 1977Ayamé 50 1977Azaguié 50 1977Bondoukou 200 1977Bongouanou 200 1974Bouaflz 200 1974Danand 200 1977Digo 300 1977Ferkessédougou 200 1977Grand Iahou 50 1977Katiola 200 1974Lakota 100 1977Toumodi 200 1977

Total lines

ANNEX 5Page 3 of 6 pages

3. Extension of local distribution and inter-exchange networks in Abidjan,rehabilitation and extension of local distribution networks in theprovinces and provision of subscribers' apparatus to cover projecteddevelopment.

. The number of connected direct exchange lines is expected to developas follows:

January 1: 1974 1975 1976 1977 1978 1979 1980 1981

Abidjan 17,000 19,400 22,100 25,200 28,700 32,800 37,400 42,600Provinces 5,800 6,500 7,200 8,200 9,100 10,200 11,LO0 12,700

Total 22,800 25,900 29,300 33,400 37,800 h3,000 48 800 55,300

B. Long Distance Service

The long distance routes in course of construction or to be constructedare shown on the map.

1. Completion of the construction of the 960-channel capacity microwavelinks on the Agboville-Bouake', Bouake-Korhogo, Korhogo-Upper Volta, Agboville-Abengourou, Abidjan-Dabou-Jacqueville, Digo-Sassandra-San Pedro routes.

2. Construction of three 960-channel capacity microwave links, each provi-ded with multiplex equipment for 120 channels on the Abengourou-Boudoukou,Daloa-Mt. Tonkui-Danané and Abidjan-Aboisso routes.

3. Construction of two VHF links with associated multiplex equipment for12 channels each on the routes: San Pedro-Soubre-Buyo and Tabou-Grabo, andone nicrowave link between i. redro and Tabou.

4. Installation of carrier equipment on the existing open-wire routes:

Seguéla-Bouaké 12 channelsN'Douci-Abidjan 12Guiglo-Man 12Issia-Daloua 12Bouna-Bondoukou 12Beoumi-Bouaké 6Boundiali-Korhogo 3Korhogo-Odienné 3Tiebissou-Bouaké 6Man-Touba 6Toumodi-Yamassoukro 6Toumodi-Dimbroko 6Digo-Abidjan 12Ferkessedougou-Korhogo 6Adzop ;-Agboville 12Azaguie -Agboville 12 "Katiola-Bouakd 12Bongouanou-Dimbroko 12Danané-Zouan 1 ChannelFerkessédougou-Nielle 1Toulepleu-Guiglo 1Boniéredougou-Katiola 1Dikodougou-Korhogo 1Sirasso-Jorhogo 1Logouale-Man1Maninian-Odienne 1

Total channels i170

ANNEX5Page h of 6 pages

5. Extension of the national transit exchange in Abidjan and instal-lation of trunk switching equipment in the new automatic exchanges toextend subscriber trunk dialling. APT proposes to substitute thepresent s4gnalling system by the R2 system recommended by the Inter-national Telephone and Telegraph Consultative Committee (CCITT)

6. Construction of the following new open-wire line routes to providenew service to rural areas:

Akoupe-Afferi 12 kmGbone-Man 31 "

Biankouma-Sipilou 63 "Bouna-Tehini 91 "Bodokro-B4oumi 27Prikro-OullJ 43Ferkessédougou-Kong 12h '

Blolequin-Guiglo 66 "Guiglo-Tai 90 "Toulepleu-Blolequin 54Satam Sokura-Dabakala 74 "Napieoledougou-Dikoudougou 44Niofouin-Korhogo 111 "Sirasso-Niofouin 44Korhogo-M'Bengue' 75 "Pokaha-Korhoîo 20 "Odienne-Seguelon 82 nTienko-Goulia 42 "Maninian-Tienko 43 "Dienra-Mankono 87 "Ouaninou-Touba 23

Total 1.246 n

C. Telex Service

1. Completion of the 400 line extension to the Abidjan telex exchange.

2. Installation of two 100-uine exchanges in Bouaké and San Pedro.

3. Provision of 400 teleprinters to replace worn out apparatus andcover the future development.

D. BuilÈMns

Construction of six new automatic exchange buildings in the GreaterAbidjan area,(Adjamee, Anyama, Banco, Cocody, Riviera, Deux Plateaux)and 24in provincial towns.

ANNEX 5Page 5 of 6 pages

E. Miscellaneous

Installation of power plants in 15 new provincial automaticexchanges; purchase of trucks and miscellaneous technical equipment andmaterials for cable laying and construction of open-wire lines; miscel-laneous minor works.

F. Consultants' Services, Engineering and Other Studies

1. Consultants' services to advise on the detailed engineering andthe preparation of specifications and bidding documents, to assist inbid evaluation, and to supervise execution of the works.

2. A Project Coordinatorts services to advise and assist APT'ssenior engineers in the execution of the project.

3. Consultantst services for accounting organization, studies onusage and tariffs, review of the Postal/Financial Department, andinstitutional review.

G. Training

The foreign exchange costs of training technical and financialstaff are as follows:

Training for: US$

Technical staff by courses 175,000

Financial staff

- by courses 50,000

- by professional accountants 225,000

450,000

April 5, 1974

IVORY COAST

AhMINISTRATION DES POSTES ET TELECOMIUNICATIONS (APT)

TELECO9ISYNICATION DIVlSlON

The Pro.ett (1974-1978) - C-t EstiEeate(in ailli.ox if CFA Fr nc-)

1974 1951976 1977 1978 TOTALLo-l F-orelin Tota1 Total Lun Fortim otal Lo..l Foteigo Total L_..l Foretie Tetal L Fri Total

IBRD OtherA. Lotal Telpho.. Ser.ie

7 100 line. *toutic exnb-o.e. 1/ 55.8 503.0 558.8 41.5 373.8 415.3 21.7 195.0 216.7 - - - - - 119.0 - 1071.8 1190.89,900 lie. extoxelo, equip.ent Z/ - - - 18.2 163.6 181.8 2.8 24.5 27.3 42.7 384.6 427.3 36.3 327.3 363.6 100.0 - 900.0 1000.021.000 Il.. .. to.Etic oech-g.e. 3/ - 80.0 80.0 - 80.0 80.0 58.0 580.0 638.0 70.0 650.0 720.0 25.0 200.0 225.0 153.0 1590.0 - 1743.OLoa1 ,,eto,ok.a d ebolr ploot 21- 84 104.0 94.0 107.5 201.5 260.0 392.0 652.0 320.0 567.8 887.8 157.0 376.3 533J3 851.0 1527.6 - 2378a6

75.8 667.0 742.8 153.7 724.9 mu 3425 1191.5 1534.0 432.7 1602.4 20 3. 28.3 903.6 1121.9 1223.0 3117.6 1971.8 6312t23B. Lot2 Dista-oe SLrvite

SeVe" elrra,ve l11k- 1/ 55.7 501.4 557.1 10.0 10.0 20.0 5.0 30.0 35.0 2.0 10.0 12.0 - - - 72 7 - 551.4 624 1Mi-o-ae 10,-hootoOooko-- 3.0 12.0 15.0 3.0 12.0 15.0 5.0 58.0 63.0 2.0 38.0 40.0 13.0 120,0 - 133.0Micorov,îoa v tek-SolinkD Ab -Bo-8- 8.0 16.0 24.0 8.0 16.0 24.0 5.0 75.0 80.0 2.0 49.3 51.3 23.0 156.3 179.3Ml-tro.ve lik-àAbdj;.-Ab.oi,o - - - S.0 17.0 25.0 8.0 17.0 25.0 10.0 80.0 90.0 4.0 54.8 58.8 30.0 168.8 - 198.8VHF li 45 45 40 .5 8.5 2.0 27.0 29.0 2.0 9.0 11.0 8.0 45.0 - 53.0t6.u1ttip1u nid oarri,r eqmtpm et - 15.0 15.0 7.0 40.0 47.0 4.0 80.0 84.0 16.0 197.5 213.5 5.0 40.0 45.0 32.0 372.5 - 404.5Trun} atit.hi.8 qi.p_et I/ 7.5 67.0 74.5 5.4 48.8 54.2 2.8 25.5 28.3 - - - - - - 15.7 - 141.3 157.0T-nk a,atthi.9g equipant 2/ - - - 1.8 16.4 18.2 0.2 2.5 2.7 4.3 38.4 42.7 3.7 32.7 36.4 10.0 - 90.0 100.0Tr-nk writ.hig eq.1pmnt 3/ - - - - 6.0 6.0 - 6.0 6.0 3.0 30.5 33.5 3.0 20.0 23.0 6.0 62.5 - 68.5Lons d _etocre overheod 0l.e. 20.0 30.0 50.0 - - - 44.0 70.0 114.0 44.0 70.0 114.0 44.0 70.0 114.0 IS2. 240.0 - 392.0

83.2 613.4 696.6 43.2 170.7 213.9 70 63.5 325 91.3 864 677.7 65.7 313.8 3 6 7S2.7 2310.2C. Telex Senti-

Abidjae eSohotsgo eoreîsloo fl - 175.0 175.0 - - - - - - .- - - - - - 175.0 175.0Tvo telex e,hage. - - 1.0 10.0 11.0 1.0 10.0 11.0 6.0 60.0 66.0 3.0 25.0 28.0 11.0 105.0 - 116.040v telepinhtero _ - - - 67.5 4Y2 - 67.5 67.5 -667.5 67.5 - 67.5 -67.5 270.0

T7~~~ ~ 7s~ ~~ ~77~ -TU *77~~ 79! ~~T0 I37~~ TTJ5757 9%3 9375 11 33U T77 0D. Laid aid kOldios 125 0 125.0 120.0 - 120.0 120.0 _ 120.0 » - - 3_5.0 - - 365.0

E. MitatllneouSPuer plaxtî _ _ - - 10.0 10.0 - 10.0 10.0 - 60.0 60.0 - 20.0 20.0 - 100.0 - 100.0Vehicl s totl., quip-ont _ 25.0 25.0 - 27.5 27.5 - - - - - .- - 2 S - 52.5Minor sork: 87.0 93.0 180.0 67.0 103.0 170.0 67.0 103.0 170.0 65.0 143.0 208.0 65.0 120.0 185.0 351.0 562.0 913.0Local Etfres 125.4 II. ;a±, t,,, le9 ___ __ _

F. Coesult8ots

(4/ ~ ~ ~~~~ ~~~- 9.0 9.0 - 36.0 36.0 37.0 37.0 - --- - - 82.0 82.0Detail.d .eSie...riee <r 2.0 20.0 22.0 3.0 25.0 28.0 4.0 40.0 44.0 4.5 45.0 49.5 4.5 45.0 49.5 18.0 175.0 193.0

Other etodits 1.8 18.0 19.8 2.0 18.0 20.0 2.0 22.0 24.0 0.5 17.0 17.5 6.3 75.0 81.33.8 47.0 50O.8 5.0 O 6-0 99.0 105.0 3.0 62.0 67.0 .5 45.0 49.5 24.3 250.0 82.0 356j3

G. Triet,oi - TehnIoial *nd Accoueting 12.5 12.5 _ 20.0 20.0 - 27.0 27.0 - 27.0 27.0 _ 26.0 26.0 _ 112.5 - 112.5

Hi. CODt inRinO iOFPhyelal 14.7 18.9 33.6 18.1 28.2 46.3 33.5 72.9 106.4 31.7 108.7 140.4 22.7 58.0 80.7 120.7 258.6 28.1 407.4Pri-es 35.3 49.6 84.9 78.3 90.3 168.6 191.8 2 331 424.9 241.7 348.1 589.8 158.9 185.7 344.6 706.0 818.7 88.1 1612.8

50.0 68.5 118.5 96.4 118.5 214.9 225 36 31.3 273.4 456.8 . 81.6 243.7 42.3 .826.7 1077 T 2020.2

TOTAL PROJECT 463.2 1701.4 2164.6 534.2 1331.1 1865.3 928_1 2077.5 3005,6 957, 3 3065.1 4022.4 506.7 1764.6 2351.3 389".0 6250.0 1689,7 13409.2

}t Ordera placed or to be placed moder Bilat.r.l Aaei.tetac or S.ppliera Credits.

2/ .e.et.oxa t, fJ,êttng coetractr.

1/ ItEu, tE bh fi toaxed by the Saek Lia-,. ke

_t Serit... relettn t to ontraot. a1redy pla..d

April 4. 1974

IVORY COASTADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

PROCUREMENT AND CONSTRUCTION SCHEDULE OF THE MAIN ITEMS OF THE TELECOMMUNICATION PROJECT

T 1974 1975 1976 1977 1978

ITEMS FIM A J AS IND JI MAMIJJASC ND J FMA VJ JAS ND JMA M J J A 5 0 NI D

LOCAL NETWOF1KS -S~~~1

DesignBidding

Buildings Evaluation & AwardConstruction Ui

DesignIl Bidding

Exchanges Evaluation & AwardInstallation & Commissioning 1 MM

Design Outside & Bidding m mSubscriber Evaluation & Award onI IPlants Installation & Commissioning I _

LONG DISTANCE NETWORK

1/ DesignMicrowave & BiddingVMF Links Evaluation & Award

Installation & Commissioning

Des ignTrunk & -Il BiddingSwi tch ing Evaluation & AwardEquipment Installation & Commissioning oB

DesignOther BiddingTransmission Evaluation & AwardEquipment Installation & Commissîorning

DesignOver Head BiddingLines Evaluation & Awardi

Installation & Commissioning [ miuuei.I* I

Svicigequipment and microvvave links financed by the Bank. Dates of commissioning of telephoneWolBak792R

exchanges are given nr pages 1 and 2 of Annex 5.

ANNEX 7

IVORY COAST

A1MINISTRATION DES POSTES ET TELECOMUNICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

Estimated Schedale of Disbursements of Bank Loan

Cumulative DisbursementsIBRD Fiscal Year at End of Quarter

and Quarter US$ thousands

1974/1975

September 30, 1974December 31, 1974 500March 31, 1975 800June 30, 1975 1,300

1975/1976

September 30, 1975 1,800December 31, 1975 1,800March 31, 1976 2,800June 30, 1976 3,300

1976/1977

September 30, 1976 4,300December 31, 1976 5,oooMarch 31, 1977 6,OO0June 30, 1977 8,000

1977/1978

September 30, 1977 11,000December 31, 1977 12,000,March 31, 1978 15,000June 30, 1978 16,000

1978/1979

September 30, 1978 19,000December 31, 1978 21,000March 31, 1979 23,000June 30, 1979 25,000

Disbursements are expected to end June 30, 1979.

Âpril 5, 197h

ANNEX 8Page 1 of 2 pages

IVORY COAST

ADMINISTRATICN DES POSTES ET TELECCMMUNICATIONS (APT)

TELECoeMUNICATIONS DEPARTMENT

Economic Analysis of the Project

1. A conservative estimate of the rate of return on the projectis 22%. This rate is the discount rate which equalizes the stream ofAPT's expected revenues from the project with its capital costs, freeof taxes and duties, and related operating costs.

2. A sensitivity analysis using the variables mentioned belowgave the following results:

Rate of Return )

15% increase in construction costsand 15% decrease in revenues 17

25% increase in operating costs 2110% increase in revenues 2410% decrease in revenues 20One-year delay in project completion 21

3. A suimary of revenues and costs at constant prices (in CFAFmlillions) that have been allocated to the project is given below.

Capital Costs Operating Costs Revenues

1974 2120 12 591975 180h 68 2101976 2891 138 6591977 3908 172 11041978 2281 239 16h71979 300 23041980 - 370 30691981 - 366 38781982 - 4ol 47251983 - hol h8301984 -40 h9231985 - 401 497h1986 - 4o1 50091987-92 - 401 50271993 (420) 401 5027

ANNEX 8Page 2 of 2 pages

4. The revenue forecaste are based on demand and.capacities. Therevenues attributable to the project vere derived from an apportionmentof the revenues shown in the income statements (Annex 10) and theirfurther projections for 1981 th-rough 1993. The operating costs for theproject have likewise been obtained by the apportionment of the operatingexpenses (excluding depreciation) given in Annex 10 and the expensesprojected from 1981 through 1993. The capital costs are free of taxesand duties and are the estimated project coats shown in Axnex 5. Anadjustment has been made in 1993 for the residual value of the project.

Avril 5. 1974

ANNEX 9Page 1 of 3 pages

IVORY COAST

ADMINISTRATION DES POSTES ET TELECO<MUNICATIONS (APT)

TELECCWMUNICATIONS DEPARTMENT

Summary of Tariffs

1 * General

(i) Although APT's tariffs are in line vith those in the French

speaking West African countries, they are very high when com-pared with tariffs for similar services in other developingcoumtries. Local calls are charged at about US¢12 in IvoryCoast as compared with US02-6 in most countries.

(ii) Billing to subscribers îs on a two months' cycle. Automaticsubscribers and some manual subscribers are subject to a two-part tariff comprising a rental for each line, which varieswith the size o! the local calling area, and a charge perlocal call. Subscribers in manual exchange areas of up to100 lines are subject to a bi-monthly rental charge includingall local calls. Long distance calls are charged on a unitbasis of a three-minute call, the charge varying according todistance by multiples of the base rate for a local call. Addi-tional surcharges are applied on long distance calls originatingfrom public call boxes and for person-to-person and collectca*ls.

2. Principal Tariffs

(i) Telephone Local

(a) Autcmatic service CFAF

Installation fee 15,000

Rental

Local network 0-2,000 main lines 6,750 per annum

Local network over 2,000 main lines 9,000 per annum

Local Calls (including thosemade from call boxes) 30 per call

ANNEX 9Page 2 of 3 pages

(b) Mamial Service CFAF

Installation fee 15 ,000

exchange system 0-50 main lines 9,000 p/a incl. local callsexchange system 51-100 main lines 11,250 p/a inci. local callsexchange system over 100 main lines 6,750 p/a plus local calis at

the unde mentioned ratesLocal cal1s

for a monthly traffic of0-50 calls 900 per month51 -100 canel 1.,800Il i101-200 cals 3,600 " "201 -l400 calis 7,200 " If401-600 cals 13,5°0 "601-800 cails 19,"0 " fi801-1 ,000 cals 25,500 n ht

over 1i,000 calis 33,000 " t

(ii) Televhone - long Distance (Rates for three-minute cals)

(a) From subscribers' lines:

Multiple ofDistance Bese Rate CFAF

(CFAF30)

0-50 km 2 6051-80 km 4 12081-120 km 6 180

121-180 km 7.5 225181-270 km 10 300271-400 km 12 360

over 400 km 15 450

(b) From public call boxes:

Unit charges are the same as those for subscribers' lines,but in addition there is a surcharge on each call.

Surcharge: CFAF

1) when rate for three-minutecall is CFAF150 or less 15

2) when rate for three-minutecall is over CFAF150 30

ANNEX 9Page 3 of 3 pages

(iii) Telephone - International

The following are sample rates for three-minute station-to-station cails:

Ivory Coast to: CFAFSenegal 91Mali 912France 1,821Kerna 4,179USA 3,276USSR 3'5

(iv) Telex

(a) Installation fee 15,000

(b) Guarantee deposit 200,000

(c) Basic monthly rental (for stationsconnected directly to telexexchange equipment) 16,200

(d) Communications

1) same zone (unit of 90 seconds) 302) different zone (unit of 30 seconds) 30

(v) Telegraph

(a) Ordinary telegrams per word (any destination) 20Mini.mum charge (10 words) 200

October 24, 1973

ANNEX 10

IVORI COAST

ADMINISTRATION DES POSTES ET TELECOtMIUNICATIONS (APT)

TELECOMMUNICATIWNS DEPARTMENT

Statement of Inocie - '1970-1980(in millions of CFA Francs)

E s t i m a t e d Fo r e. c a s t ForecastYear ending Decenhber 31: 1970 1971 1972 1973 1974 197i5 19t 1'77 -19715 1979 1950

REVENU IE

Tclephone - installation fees 24.5 28.3 30.0 29.0 33.0 42.0 46.0 52.0 58.0 65.o 73.0_ rentai 202.2 216.8 230.0 250.0 271.0 296.0 325.0 357.0 393.0 434.0 480.0- local and long distance calls 1606.1 1862.2 2050.0 2255.0 2480.0 2778.0 3112,0 3485.0 3937.0 4490.0 5120.D- international calls 130.1 16L.6 180.0 300.0 337.0 379.0 426.o 478.0 538.0 606.0 696.o- other 32.6 47.8 2.0 3.0 36.0 25.0 25.0 25.0 25.0 25.0 25.0)

Telegraph - rational 144.3 161.7 1l'5.0 190.0 210.0 210.0 215.0 215.0 215.0 210.0 210.0- international 124.6 118.9 1'0.0 145.0 150.0 155.0 16c.0 160.0 160.0 160.0 165.0- other 12.3 12.0 10.0 10.0 12.0 10.0 10.0 10.0 10.0 10.0 10.0

Teies - cental 62.6 72.6 50.O 90.0 100.0 110.0 125.0 145.0 165.0 180.0 1J.0- national calls 44.0 56.8 63.0 70.0 77.0 84.o 96.0 110.0 125.0 137.0 10C°.- international calls 137.3 150.4 165.0 180.0 198.0 218.0 249.0 285.0 327.0 359,0 3y4.U- cther - - 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0

TOTAL OPERATING REVENUE 2520.6 2892.1 3117.0 3524.0 3906.0 4309.0 4791.0 5324.0 5555.0 6678.0 7523.

EXPENSES

Salaries 974.0 102C.4 1037.0 1165.0 1336.0 1470.0 1654.0 1819.0 2CO0.0 2150.0 2310.0

Other expenses 434.2 553.8 6C3.o 700.0 752.0 865.o 993.0 1118.0 1257.0 1413.0 i554.c.Depreciation 305.5 336.6 366.3 403.3 458.5 531.2 620.9 741.5 907.9 1034.1 U119.3

TOTAL OPERATING EXPENSES 1713.7 1910.8 2056.3 2268.3 2546.5 2866.2 3267.9 3678.5 4164.9 4597.1 4983.3

ENET INCOME (befr-e interest) 806.9 981.3 1060.7 1255.7 1359.5 1442,8 1523.1 1645.5 1790.1 2080.9 2539.7

Less: interest 12.6 24.1 31.4 43.4 67.0 128.0 182.7 268.4 389.6 _529.4 577.9

NET PROFIT 794.3 957.2 1029.3 1212.3 1292.5 1314.8 1340.4 1377.1 1400.5 1551.5 1961.8

Add: non.operating revenue 135.8 142.5 126.0 127.0 160.0 140.D 140.0 140.0 140.0 140.0 l4o.0

930.1 1099.7 1155.3 1339.3 1452.5 1454.8 1480.4 1517.1 1540.5 1691.5 7101.R

Less: contribition to Postal/Financial Departrent 303.7 353.6 305.4 455.9 372.1 383.6 406.5 436.0 460,2 485.0 509-.

SET SURPLUS 626.4 746.i 84_L 9 883.4 1080.4 1071.2 1073.9 1081.1 1080.3 1206.5 1592.8

Rate of return- 17.5% 18.5% 13.5% 19.7% 18.37. 16.6% 14.87. 13.3% 11.67. 11.9% 13.77

Operating ratio/ 68 66 6s 64 65 67 68 69 70 69 66

Average net telecommunications plant in service 4618.0 5307.0 571Y.0 6390.0 7415.0 8710.0 10269.0 12402.0 15434.0 17469.0 18514.0

Average telephore lines in operation 16095 18072 19500 21447 24350 27600 31350 35600 L0400 45900 52050

Telephone lines added in year 2290 1665 1190 2705 3100 3400 4100 4400 5200 5800 6500

Rat:o sf net incoae (before interest) to average net telecocmunications plant in service.Ratio si total operating expenses to total operating revenue.

April 4, 1974

ANNEX il

IVORY COAST

AE4fNISTRATION DES POSTES ET TELECOMMUIICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

Balance S&eets - 1970.198

(in millions of C rancs)

E s t i m a t e d F or e c a S t ForecastAs of December 31: 1970 1971 172 1973 1974 1975 l 1977 1 19 1980

ASSETS

Gross fixed assets 7234.7 7754.4 8527.3 9396.9 10981.4 12626.7 14967.3 17989.7 22361.0 23601.0 26145.0

Less: depreciation 2019.7 2355,8 2492.1 2640.4 2908.9 3280.1 3776.0 4377.5 5105.4 5919.5 6798.8

Net fixed assets 5215.0 5398.6 6035.2 6756.5 8072.5 9346.6 11191.3 13612.2 17255.6 17681.5 19346.2

Work in progress - 200.0 668.6 749.9 1?40.0 1200.0 1740.0 2600.0 600.0 1640.0 1856.0

Other assets:Inventories 32.6 46.3 56.o 66.o 76.o 130.0 190.0 250.0 310.0 410.0 510.0Government receivables - long-term - - - 2550.0 1700.0 850.0 _ _ _ _ -

Total other assets 32.6 46.3 56.0 2616.0 1776.0 980.0 190.0 250.0 310.0 410.0 510.0

Current assets:Treasury balanoe - - - - - - 94.2 722.4 953.4 1142.9 1074.9Cash & bank 298.3 7.9 - -Receivables - Traffic - Gover-xent 4 ( 2200.0 3400.0 1350.0 1400.0 1455.0 1515.0 735.0 808.0 888.0 976.o

Il - Private *6 ( 3040.1 3727.0 3500.0 2390.0 1122.0 1234.0 1352.0 1492.0 1641.0 1805.0Other 307.2 285.8 300.0 300.0 315.0 330.0 348.o 365.0 388.o 400.0 420.0

5569.2 5533.S 7427.0 5150.0 4105.0 2907.0 =- 3T7Z7 6 47i. 4275.Les.: reserve for bad debts - - - - 1000.0 50.0 50.0 50.0 55.0 50.0

Total current assets 5569.2 5533.8 7427.0 5150.0 3105.0 2857.0 3141.2 3124.4 3591.4 4021.9 4225.0

TOTAL ASSETS 10816.8 11178.7 14186.8 15272.4 14093.5 14383.6 16262.5 19586.6 21757.0 23753,4 25937.2

LIABILITIES

Capital 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7 1340.7

Ssants 1241.1 1241.1 1241.1 1305.1 1429.1 1465.1 1502.1 1502.1 1502.1 1502.1 1502.1

Surplus 3258.8 .8 4831.7 5715.1 5795.5 6866.7 7940.6 9021.7- 10102.0 11308.5 12901.3

Total equity 5840.6 6563.6 7413.5 8360.9 8565,3 9672.5 10783.4 11864.5 12944.8 14151.3 15744.1

Long-term debt:Savings Bank 28.1 23.0 17.7 12.1 6.2 - - - - - -FAC 132.3 127.4 122.5 117.6 112.7 107.8 102.9 98.0 93.1 88.2 83.3Suppliers credits 92.4 53.7 212.4 199.2 343.8 381.6 424.6 260.4 139.5 41.0 -CCCE 378.0 378.0 616.0 552.4 753.8 925.2 826.o 726.8 661.2 495.6 S30.0IBRD - proposed loa- - - 335.4 893.2 2351.5 4990.6 6131.3 5881.3 5612.6Future borrowings - - - - _ - - - - 1000.0 2000.0

Total long-term debt 630.8 582.1 968.6 881.3 1551.9 2307.8 3885.0 6075.8 7025.1 7506.1 8025.9

Current liabilities:Treasury overdraft 3371.2 2874.2 4644.7 4774.0 2643.8 952.9 - - - -Sundry creditors 828.9 986.4 900.0 900.0 945.0 990.0 1040.0 1090.0 1145.0 1200.0 1260.0Subscribers deposits 109.3 123.7 143.0 162.0 184.0 212.0 248.0 288.o 332.0 377.0 427.0Current saturities 36.o 48.7 117.0 194.2 203.5 248.4 306.1 268.3 310.1 519.0 480.2

Total current liabilities 4345.4 4033.0 5804.7 6030.2 3976.3 2403.3 1594.1 1646.3 1787.1 2096.0 2167.2

TOTAL LIABILITIES 10816.8 11178.7 14186.8 15272.4 14093.5 14383.6 16262.5 19586.6 21757.0 23753.4 25937.2

Debt/equity ratio 10/90 8/92 12/88 10/90 15/85 19/81 26/74 34/66 35/65 35/65 34/66

Current ratio 1.3:1 1.4:1 1.3:1 0.9:1 0.8:1 1.2:1 2.0:1 1.9:1 2.0:1 1.9:1 1.9:1

Traffic receivables/revenue 5t 197 181 229 210 141 80 57 39 39 38 37

April 4, 1974

ANNEX 12

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (AFT)

TELECOMMUNICATIONS DEPARTMENT

Statement of Sources and Apolications cf Funds - 1970-198D(in millions of CFA Francs)

E s t i m a t e d F ore as t ForecastYear ending December 31: 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

SOURCES OF FUNDS

Internai cash generatioNet inc.e before intereot 806.9 981.3 1060.7 1255.7 1359.5 1442.8 1523.1 1645.5 1 90.1 2080.9 2539.7Deproeiation 305.5 336.6 366.3 403.3 458.5 531.2 620.9 741.5 907.9 1034.1 1119.3

Total internal cash genecation 1112.4 1317.9 1427.0 1659.0 1818.0 1974.0 2144.0 2387.0 2698.0 3115.0 3659.0

Sobhcribers deposits 16.4 14.4 19.3 19.0 22.0 28.0 36.0 40.0 44.0 45.0 50.0

Other nnn-operarisg revenue 135.8 142.5 126.0 127.0 160.0 140.0 140.0 140.0 140.0 140.0 140.0

Gr-ts 35; - - 64.0 124.0 36.0 37.0 - - - -

Borrowi.g.:Suppliers credits 132.0 - 235.0 106.9 273.7 211.5 245.0 - -CCCE 378.0 - 268.0 - 265.0 235.0 - - - - -IBRD - proposed luoe - _ _ - 335.4 557.8 1638.3 2459.1 1259.4Future borrovings _ -_ - -_ - 1000.0 1000.O

Total bocroring. 510.0 - 503.5 106.9 874.1 1004.3 1883.3 2459.1 1259.4 1000.0 1000.0

TOTAL SOURŒCS OF FENDS 1809.6 1474.8 2075.8 1975.9 2998.1 3182.3 4240.3 5026.1 4141.4 4300.0 4849.0

APPLICATIONS OF FUNDS

Capital construction1970-1973 construction sorks 1199.6 720.2 1471.5 1205.9 - - - -1974-1978 program - - - - 2164.6 1865.3 3005.6 4022.4 2351.3 - -Future program n _ - - - - - 200.0 2500.0 3000.0

Total construction 1199.6 720.2 1471.5 1205.9 2164.6 1865.3 3005.6 4022.4 2551.3 2500.0 3000.0

Inventories - iecrane (decrease) (3.8) 13.7 9.7 IO.0 10.0 54.0 60.0 60.0 60.0 100.0 100.0

Gvecnrcent debts transfer to long-tern - - _ 2550.0 (850.0) (850.0) (850.0) -

Dobt service - emortizationSuvingo baok 4.8 4.7 5.1 5.3 5.6 5.9 6.2 - - - -FAC 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9Suppliera credits 13.2 26.4 38.7 76.8 120.1 129.1 173.7 202.0 164.2 120.9 98.5CCCE - - - 30.0 63.6 63.6 63.6 99.2 99.2 65.6 165.6IBRD - proposed loan -- - - - - .7 250.0

22.9 36.0 48.7 117.0 194.2 203.5 248.4 306.1 268.3 310.1 519.0

Debt service - interestSa2ings bock 1.8 1.7 1.4 1.2 0.9 0.6 0.3 - - - -Supplier c-edits 4.6 7.9 10.4 19.9 29.4 28.8 39.3 39.9 26.3 15.2 7.4CCCE 6.2 14.5 19.6 22.3 23.0 28.7 34.0 31.4 28.1 24.8 21.7IBRD - proposed lban - - - - 13.7 69.9 109.1 197.1 335.2 453.2 440.1Future borrowings _ - - - 36.2 108.7

12.6 24.1 31.4 43.4 67.0 128.0 182.7 268.4 389.6 529.4 577.9

Total debt service 35,5 60.1 80.1 160.4 261.2 331.5 431.1 574.5 657.9 839.5 1096.9

Contribution to Postal/Financial Departsent deficit 303.7 353.6 305.4 455.9 372.1 383.6 406.5 436.0 460.2 485.0 509.0

Increase (decrease) is working capitalCash and Treasury (1811.7) 206.6 (1778.4) (129.3) 2130.2 1690.9 1047.1 628.2 231.0 189.5 (68.9)Receivables and advance paynents 2586.3 255.0 1901.1 (2277.0) (1045.0) (1198.0) 190.0 (645.0) 236.0 241.0 272.0

Slndry creditors, reserves (500.0) (134.4) 86.4 - (45.0) 905.0 (50.0) (50.0) (55.0) (55.0) (60.0)

274.6 327.2 209.1 (2406.3) 1040.2 1397.9 1187.1 (66.8) 412.0 375.5 143.1

TOTAL APPLICATIONS OF F 1809. 6 1474 207.8 1975.9 2998.1 3182.3 4240.3 5028. 1 4141.4 4300.0 4849.0

Debt service coverage 31.3 21.9 17.8 10.3 7.0 6.0 5.0 4.2 4.1 3.7 3.3

April 5, 1974

ANM!IEX 1 3Page 1 of 3 pages

IVOMff COAST

ADMIfTISTlRTIONT DES POSTES ET TELECOMIUNICATIONS (APT)

TELEC alUlTICAT IONS DEPARTMEVT

Notes and Assumptions on Financial Statements

1 . General

APT's accounting arrangements are unsatisfactory. The financialaccounts, which are delayed, are incorrect and incomplete. The accountsdo not show the operating results and financial position for the respectivepostal/financial and telecommunication services. The financial statementsin the report have been drawn up on a pro-forma basis from existing finan-cial data supplemented and amended by information received from seniôr staff.

The following data relates to the main items of the Telecommuni-cations Department's accounts shown in Annexes 10 and 11.

2. Statements of Ichome - Annex 10

(i) Telephone revenue

(a) Forecasts of revenue from domestic services in the period1974-1980 have been prepared after taking into account(i) the average number of telephone lines estimated to beput into service, and (ii) the estimated effect on revenue,in the related regions, of the new long distance facilitiesto be brought into service.

(b) International call revenue relates to terminal fees receivedfrom INtTEICI. In general, APT receives 20% of the totalrevenue from international calls made over the INTEIXnetwork.

(ii) Telegraph revenue is expected to remain relatively stable duringthe next four years and small overall increases of 1% and 3%have been provided for in 1975 and 1976, respectively.

(iii) Telex revenue has been forecast to increase at the following rates:

1974 - 1975 - 10%1976 - 1978 - 15%1979 - 1980 - 10%

(iv) Salaries have on average been estimated to increase at about10-12A per year through 1980.

ANNEX 1 3Page 2 of 3 pages

(v) Other Expenses are expected to increase i - 15% per yearthrough 1960.

(vi) Depreciation - a composite rate of 41& per annum on averagegross fixed assets has been assumed.

(vii) Interest - charges i:clude interest on contracted loans andsupplier credits together with the estimted interest chargeson the proposed Bank loan. A provision has also been includedfor interest on further borewiçin 1972 and 1980. APT doesnot capita ize interest during câstruction.

(viii) Non-operatila revenue relates mainly to license revenues.

(ix) Contribution to Postal/Pinancial Department - the estimatedprofits from telecommiunicatiÏos operations from 1970 through1980 have been charged with thie estiznated deficits from postaloperations in those years.

3. Balance Sheets - Armex 11

(i) Work in progress at the end of each year during the constructionperiod of the project has been related to the construction sehedule.

(ii) Inventories have been gradually brought to a higier and morereasonable level to moet the requireuents of expanded operations.

(iii) Government receivables - long-term - relate to the rescheduledGovernment receivables (see para. 6.08).

(iv) Treasury balance relates to the funds deposited by APT with theNational Treasury.

(v) Receivables - Waeff ic Mt-relate to teleconmunicationsservices rendered to the Goeenwrnnt by APT's TelecommunicationsDepartment. From 1973 to 1976 the figures iacnlude the currentportion of rescheduled long-tern GoverTiment receivables.

(vi) Receivables - Trai - Pvatrelate to telecommunicationsservices rendered to private subscribers. *n estimating thefigures it has been assvmed that APT will upd.ate its subscriberbilling by mid-1974 and that considerable imnprovement wibl bemade in private subscriber collections during 1974.

(vii) Receivables - Other-aiclude paymonts in advance, dowri paymentson contracts, and othee imiscellaneous debts such as those forsale of materials.

(viii) Reserve for Bd Debte - a provision of CPAF 1 billion (US$5million) has been set up in 1971 to cover estimated collectionlosses arising from delayed billing. It is expected that thegreater part of the sum wil-l be applied in 1975 to writing-offbad debts.

ÂNk'EX 13.Page 3 of 3 pages

(ix) Subsidies relate mainly to contributions from FAC and theIvory Coast Government towards capital equipment purchases.

(x) Long-term debt - details of APT's long-term debt are givenin Annex 15.

(xi) Treasury overdraft - COing to delayed billing and lack offinancial and budgetary control, APT has in recent yearsincurred substantial overdrafts with the National Treasuryfor its telecommunication services. It is expected thatwith updated billing, an improved collection effort and thesettlement of Government debts, the overdrafts will beeliminated by 1976.

(xii) Sbundry Creditors include accounts payable and receipts inadvance; the forecast figures provide for an increase of 5%

per year on these items.

(xiii) Subscriber deposits relate to deposits payable by privatesubscribers as security for the payment of biU s. Thedeposits are refundable on termination of service.

Yovember 8, 1973

ANNEX 14

IVORY COAST

ADMINISTRATION DES POSTES ET TELECWMUNICATI0NS (APT)

TELECÇOU? ICATIOTS DEPARTMENT

Financial Rate of Return - 1979-1983

1. *Based on available information and on present tariffs and aftermaking reasonable assumptions for APT's financial requirements during theperiod 1979-1983, it is estimated that a rate of return of 10% on nettelecommunications fixed assets in operation would be required after 1978.

2. In making these calculations it has been assumed that:

(i) development over the five-year period 1979-1983 would providefor an average growth of about 10% per year on gross fixedplant in operation as of December 31, 1978;

(ii) further borrowing of CFAP « .7 billion (US$23.0 million) wouldbe available; this would be equivalent to about"'k4 of totalinvestment requirements for the period 1979-1983; and

(iii) the annual surplus, after meeting telecommunications require-ments, would be equivalent to the Postal/Financial Department sdeficit and investment.

3. On this basis a 10% rate of return would yield about CFAP 9,1400billion (US$47 million) during the five-year period 1979-1983. Theestimated financing plan for the period would be as follows:

cFAF CFAFRec~uiements~ roen(1979-983) --- (millions)---Requirements

Construction progrm (1979-1983) 13,1400t;ew program (19814-1988) 200Working capital 500 14,100Debt service 5,100Surplus 2,500

Total requirements 21.700

SourcesFuture borrowings (US$23 million) 5,700Depreciation 6,100Vet income after depreciation (10% rate of return) 9,900

Total sources 21 * 700

APT would be financing about 60% of its program requirements, which compareswith 49% of the 1974-1978 program.I4. Present indications are that the net income would be in excess ofthe above-mentioned requireuents after 1978; the rate of return would beabout 12% in 1979 and 14% in 1980. It would therefore remain for theGovernment to decide whether to withdraw funds frorn APT or to reduce thepresent high tariff level.

April 5s,i974

ANEX 15Page 1 of 2 pages

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMEATIONS (APT

TELECOMMNICATIONS DEPARTMENT/1

Iong-Term Debt-

1. Long-term debt as of December 31, 1973.

RepaymentDate Loans CFAF uiiUions Years

1965 FAC 122.5 1969-19981966 National Savings Bank 17.7 1957-19761967 0CCE (1) 168.0 1974-19781969 (2) 270.0 1973-19821970 (3) 178.0 1977-1981

616.0

Total loans 756.2

Supplier Credits

1967 CGOT (1) 39.6 1970-19751970 (2) 139.2 1973-19771971 (3) 29.4 1973-1978

208.21969 Ericsson France (1) 36.9 1972-19761972 CIT 17.8 1974-19781972 Thompson CSF (1) 56.4 1974-1978

Total supplier credits 319.3

Total long-term debt 1,075.5

2. Further debt commitments made as of December 31, 1973

Loans

1972 CCCE (4) 500.0 1980-1984

Supplier credits1969 CGCT (4) 39.3 1974-19781972 " (5) 46.o 1974-19791973 " (6) 160.0 1976-19811973 " (7) 245.0 490.3 1976-1981

/1 Interest:Loan - NatiQnal Savings Bank - 4% per year

-FAC -nil- CCCE - 3½S per year

Supplier credits - 6.5%-7.2% per year

ANNEX 15Page 2 of 2 pages

RepaymentSupplier Credits CPAF millions Years

1970 TRT (1) 63.3 1974-19781973 Ericsson France (2) 51.5 1975-19811973 Telettra (1) 31.8 1975-19801973 (2) 30.0 61.81973 Thompson CSF (2) 63.3 1975-1981

Total supplier credits 730.2

Total commitments 1,20.2

October 24, 1973

l EZ X~~~~'1FX 16IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

Performance Indicators

1. A set of target indicators and dates which will help monitor APTIsperformance has been established. APT will be asked to report on actual aswell as projected/budgeted achievements related to the performance targets.

2. Target indicators:1974 1975 1976 1977 1978 1979 1980

Telephone subscribers added(numaber) 3100 3400 4100 4400 5200 5800 6500

Gross telephone revenue peraverage subscriber line(CFAF thousands) 130 127 125 123 122 122 123

Rate of return (%) 18.3 16.6 14h8 13.3 11 .6 11.9 13.7Operating ratio 65 66 68 69 70 69 66Traffic receivables/revenue (%) 1h1 80 57 39 39 38 37

3. Target dates: para. 1974 1975 1976 1977 1978 1979 1980

Institutional study completed 5.02 Dec.Training program prepared 5.0I Dec.Salary and promotion policies

reviewed 5.o8Investment planning improved 5.09 -during construct(ion

period-

Accounting Departmentreinforced 5.12 Dec.

Separate accounts established 5.12 Dec.Plant inventories updated 5.12 Dec.Budget system established 5.12 Dec.Inventory accountingestablished 5.12 eec.

Telecommunications billingand collectionsa) Computer operations

reviewed 5.13 /1b An expert employed 5.13 71c) Incoime accounting and

collection staff im-provements completed 5.13 /2

Internal audit established 5.1 Dec.Independent auditors

appointed 5.14 Dec.Telephone usage studiescompleted 5.16 Dec.

Tariff structure and levelreviewed 5.16 June

Postal/financial servicesreviewed 5.17 Dec.

Goverrnment debts settled 6.05 Dec.Treasury overdraft eliminated 6.09 Dec.

/1 Within six months of loan signing.72 Within 12 months of loan signing.

April 5, 1974

ANNEX 17Page 1 of 2 pages

IVORY COAST

ADMINISTRATION DES POSTES ET TELECXMMUNICATIONS (APT)

TELECOMMUNICATIONS DEPARTMENT

Telecommunications Billing and Collection

In 1969, following delays and inaccuracies in APT's manualbilling system, the then Director-General decided to undertake an imme-diate computerization of telecommunications billing. The changeover,which lacked adequate study, planning and preparation, was a failureand a reversion to manual billing was made; as a result, billing delaysincreased. Subsequently, the Minister of Posts and Telecommunicationsasked INTELCI, the entity responsible for international communicationsin the Ivory Coast (see para. 2.02) to provide a special computer unitto deal with APT's telecommunications billing. A new building wasconstructed and the hardware was installed in April 1972; after the studyand planning stage, INTELCI commenced to bill APT's subscribers inJanuary 1973. At that time billing was one year in arrears. By dispatch-ing to the subscribers each month a two-monthly bill for past servicesit was hoped to update billing by September 1973. INTELCI and APT havebeen unable to meet that date and a revised date of end-March 1974 hasnow been extended to July 1974. Various reasons have been put forwardfor the present delay; they inulude poor computer programming and lackof accuracy in the data supplied by APT to the INTELCI computer unit.Sound telecommunications billing depends above all on a good subscriberorder system operated by qualified staff havi.ng a good knowledge of ope-rations and tariffs. APT's ordgr system is acceptable, but the group ofemployees responsible for supplying the information to the computer unitneeds to be considerableâstr-engthened. The idéI-ôolutiôiYwouild be-forAPT to create a new group, much smaller in number but of better qualityand with higher remuneration; most of the present staff could be assignedto other duties. This unsatisfactory telecommunications billing is themost serious problem facing the APT management at the present time and isthe main reasons for the heavy borrowing of Treasury funds. -Fbrthermore,

until billing and collection are normalized APT will continue to sufferheavy collection losses (see para. 6.03). During negotiations, the Govern-ment agreed that APT would:

(i) within six months of loan signing qmploy expertssatisfactory to the Bank to review the computer programfor APT's billing operations to ensure correct and efficientbilling and accurate revenue accounting;

(ii) within six months of loan signing employ anexpert, satisfactory to the Bank, to (a) supervise andimprove bilhing, collection, and revenue accounting at

ANNEX 17Page 2 of 2 pages

APT's headquarters, and (b) prepare for agreement viththe Bank a timetable for effecting the required improve-ments in APT's revenue operations; and

(iii) within one year of loan signing take measures, satis-factory to the Bank,, to strezgthen and maintain qualifiedstaff in charge a£ APT's billing, collection, and revenueaccounting operations.

April 5, 1974

ANNEX 18Page 1 of 2 pages

IVORY C0AST

AIMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

POSTAL/FINANCIAL DEPARIMENT

Financial Aspects

1. Following the pattern adopted in France and in other countriesin French-speaking West Africa, APT's Postal/Financial Department carrieson the usual postal services, including the quasi-banlking service ofdomestic and international money orders and a public checking accountservice; in addition it administers the National Savings Bank.

2. Separate accounts are not kept for the department. However, itis estimated that the postal/financial operations have been, and continueto be., careied on at a loss. Operational losses since 1969 are estimatedto have been as follows:

Fiscal Year: 1970 1971 1972 1973

CFA francs (millions) 237 278 141 395

Postal/Financial Department's losses, together with its investment require-ments, have in the past been met from telecommunication surpluses. It isestimated that during the 14 years since the country's independence, annualpostal/financial investment has averaged CFAF 60 million.

3. As regards the financial position of the postal/financial ser-vices, the estimated balance sheets show an unusually large amount ofunpaid receivables; working capital requirements, in particular the cashcover for suns due public-cheeking account depositors and foreign entitiesfor money order transactions require to be examined. A review of thePostal/Financial Department's services is therefore an immediate require-ment. The review should be comprehensive and cover not only operationsbut also financing arrangements, in particular the use and deposit of fundsand settlement of receivables. To ensure the maximum efficiency of APT'spostal/financial services, during negotiations the Government agreed thatAPT would employ qualified and experienced consultants to complete a reviewby December 31, 1976, and then after consultation with the Bank, implementthe mwasures necessary for improving the operations and finances of thepostal/financial services. Given the interrelationship between telecommuni-cations and postal/financial. services in the Ivory Coast, US$50,000 has beenincluded in the proposed loan to cover the foreign coste of the review.

4. Although the Government is entitled to withdraw surplus telecom-munications funds from APT over and above those required for operations anddevelopment, it should not continue the practice of automatically charging

ANNEX 18Page 2 of 2 pages

Joses and investment requirements of the Postal/Financial Departmentagainst telecommunication surpluses. For reasons of operational and de-velopment efficiency and good financial management the postal/financialand telecomunmication services should be considered as separate. Therefore,in addition to APT maintaining separate accounts for postal/financial andtelecommunications operations, during negotiations the Government agreedthat before applying any surplus telecommunications funds for other pur-poses APT will ensure that sufficient funds are available to meet the opera-tional, debt service and investment requirements of APT's telecomnunicationservices* Fhrthermore, the Government also agreed that in the event of in-sufficient funds being available for APT's operations and investment it willtake such steps, satisfactory to the Bank, as may be necessary to cover thedeficit.

April 5, 1974

ANNEX 19

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMUIECATIONS (APT)

POSTAL/FINANCIAL DEPARTMENT

Statements of Income - 1970-1980(in millions of CFA Francs)

Year ending Decemsber 31: 1970 E s t i m a t e d 4 o r e c a s t 197 Forecast

REVENUE

Postal services 1013.4 1153.2 1288.0 1457.0 1527.0 1650.0 1750.0 1850.0 2035.0 2157.0 2287.0

Pinancial services 130.8 134.0 182.0 202.0 192.0 190.0 .92.. 190.0 190.0 190.0 190.0

TOTAL OPERATING REVENUE 1144.2 1287.2 1470.0 1659.0 7e.0 1840.0 1940.0 2040.0 2225.0 2347.0 2477.0

EXPENSES

Salaries 1055.1 1105.3 1188.0 1262.0 1550.0 1643.0 1741.0 1846.0 2030.0 2152.0 2281.0

Other expenses 343.4 496.42I 477.0 520.0 536.o 550.0 575.0 600.0 625.0 650.0 675.0

Depreciation 43.4 46.5 50.1 55.1 59.0 63.1 67.0 70.9 74.8 78.2 82.6

TOTAL OPERATING EXPENSES 1441,9 1648.2 1715.1 1837.1 2147.0 2256.1 2383.0 6. 2729.8 2380.7 3038.6

NET INCOME (before interest) (297.7) (361.0) (245.1) (178.1) (426.o) (416.1) (443.0) (476.9) (504.8) (533.7) (561.6)

Less: interest 1.9 1.6 1.4 1.2 o.9 o.6 0.3

(299.6) (362.6) (246.5) (179.3) (426.9) '(416.7) (443.3) (476.9) (504.8) (533.7) (561.6)

Add: non-operating revenue 62.5 84.7 105.0 71.0 139.0 100.0 100.0 100.0 100.0 100.0 100.0

(237.1) (277.9) (141.5) (108.3) (287.9) (316.7) (343.3) (376.9, (404.8) (433.7) (461.6)

Less: losses written-off - - - 286.5 - - _ _ - -

NET SURPUJS (Deficit) 23a7.1) (79) ( 3,) 39.) (2 ) 3 ) (33.) ( 2 04.) ) )

J includes provision for doubtfui debt - CFAF65 million.

April 3, 1974

ANNEX 20

IVORY COAST

ADMINISTRATION DES POSTES ET TELECOMMUNICATIONS (APT)

POSTAL/FINANCIAL DEPARTMENT

Balance Sheets _ 1970-1980(in millions of CFA Francs

E s t i m a t e d F o r e c a s t ForecastAs of December 31: l 1971 1972 193974 1975 1 1977 1978 1979 1980

Oross fixed assets 1443.5 1565.4 1779.4 1895.4 2038.4 2168.4 2298.4 2428.4 2558.4 2688.4 2818.4

Leso: depreciation 316.0 362.2 412.3 467.4 526.4 589.5 656.5 727.4 802.2 880.9 963.5

Net fLxed asoets 1127.5 1205.2 1367.1 1428.0 1512,0 1578.9 1641.9 1701.0 1756.2 1807.5 1854.9

Other assets 1.2 1.2 1,2 1.4 1.6 1.6 1.8 1.8 2.0 2.0 2.0

curoent assets:Cash 184.7 273.6B.k -CaM 1509.3 15604.1 2583.0 2877.6 3072.0 3006.1 3100.0 3100.0 3100.0 3100.0 3100.0

- ,leasury 2354.i 904.7)_ Others 1123.7 136.7

Accounto receivsbles - Trffic 298.8 374.1 400,0 4o0.0 400.0 400.0 400. 4o0. 400.0 400.0 400.0 40o.o- Foreign entities 681.3 670.7î 700,0 700.0 700.0 700.0 700.0 700.0 700.0 700.0 700.0- (ither (net) 582.0 14 3 8 4.1J 1440.0 1140.0 1040.0 1100.0 1100.0 1100.0 1100,0 1100.0 1100.3

Total c-rrent asoets 6733.9 5358.3 5123.0 5117.6 5212.0 5206.1 5300.0 5300.0 5300.0 5300.0 5300.0

TOTAL ASSETS 7862.6 6562.7 6491.3 6547.0 6725.6 6786.6 6943.7 7002.8 7058.2 7109.5 7156.9

LIABILITIES

Capital 526.5 526.5 526.5 526.5 526.5 526.5 526.5 526.5 526.5 526.5 526.5

Subsidies 59.9 59.9 59.9 59.9 59.9 59.9 59.9 59.9 59.9 59.9 59.3

Contributions from Telecommunications Department 542.3 618.0 781.9 843.0 927.2 994.1 1057.3 1116.4 1171.8 1223.1 1270.5

Total equity 1128.7 1204.4 1368.3 1429.4 1513.6 1580.5 1643.7 1702.8 1758.2 1809.5 1856.9

Long-ter.r debt - Savingo Bank 28.0 23.0 17.6 12.0 6.1 -

C,rrent liabilitieo:Public checking acco-nts 4662.5 2965.0 2800.0 2800.0 2900.0 2900.0 3000.0 3000.0 3000..0 3000.0 3000.0Accounts payable - Foreign entities 1310.1 1452.2 1'400.0 1400.0 1400.0 1400.0 1400.o 1400.0 1400.0 1400.0 140D.()

- Other 728.4 913.1 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0Cuorrert maturitios 4.9 5.o 5.4 5.6 5.9 6.1

Total current liabilities 6705.9 5335.3 5105.4 5105.6 5205.9 5206.1 5300.0 5300.0 5300.0 5300.0 5300.0

TOTAL LIABILITIES 7862.6 L6562. 7 13 2 7 7002.8 705.2 7109.5 715.9

net after allowance of CFAF65 million for doubtfol debt.

April 3, 1974

ANNEX 21

IVORE' COAST

ADMINISTRATION DES POSTES ET TELECOIMUNICATIONS (APT)

POSTAL/FINANCIAL DEPARTMENT

Statement of Sources and Applications of Fands - 1970-1980lin millions of CFA Francs)

E s t i m a t e d F o r e c a s t ForecaztYear endi.g Decenmber 31: 1970 191 1972 W3 194 175 W6 1977 1978 1979 1940O

SORCES OF ISOiNDS

Internai cash generation

Net income before interest (297.7) (361.0) (245.1) (178.1) (426.o) (416.1) (443.0) (476.9) (504.8) (533.7) (561.6)Depreciation 43.4 46.5 50.1 55.1 59.0 63.1

67. ( 70.9 74.8 78.7 82.6

Total internal cash generation (25. 3) T31 5) 150) 2 37.0) 33.0) 7 .0) ) 3455.0) (7.

Other ron-operating revenue 62.5 84.7 105.0 71.0 139.0 100.0 100.0 100.0 100.0 100.0 100.0

Contribution from Telecosmunications Department 303.7 353.6 305.4 455.9 372.1 383.6 406.5 436.0 460.2 485.0 509.0

TOTAL SOURCES OF FUEDS 11. 123.8 215.4 403.9 144.1 130.6 130.5 130.0 130.2 130.0 130.0

APPLICATICFS OF FOEUlllS

Capital construction 110.0 122.2 214 0 116.0 143.0 130.0 130.0 0 130 130.0 130.0 130.0

Inventories _ _ 0.2 0.2 - 0.2 - 0.2 - -

Dect service - Amortization 4.6 4.9 5.0 5.4 5.6 5.9 6.1- Interest 1.6 1.4 1.2 O 0.6 0.3

Total Aebt service 6.5 6 , 6 T -

Exceptional loss - written off _ - - 286.5 - _ _ - - _ -

Increae (decrease) in working capital

Cash, Bank; Treasury balances (143.8) (2296.7) (292.1) 294.6 194.4 (65.9) 93.9Public checking accounts 885.0 1697.5 165.0 - (100.0) - (100.0)Feceivables (1055.7) 921.1 56.8 (300.0) (100.0) 60.0Corrent liabilities 309.9 (326.ô) 65.3

(4-6) (4= ) (5,o) (.) T 59

TOTAL APPLICATIONS OF FUNDS 111.9 123 215.4 403.9 144.1 130.6 130.5 130.0 130 2 130.0 130.0

April 3, 1974

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Ib5KU WOC3iK

IVORY COAST JANUARY 1974

POSTS & TELECOMMUNICATIONS ADMINISTRATION, PLAEAUX -DEVELOPMENT PROGRAM 1974-1978'" X ~ t_ 1600 1 ABIDJAN'S URBAN TELEPHONE NETWORK

() § ADJAME t, O : EXCHANGES CAP*ACITY AFTER PROJECT COMPLETION

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