RURAL ELECTRIFICATION IN PAPUA NEW GUINEA: AN ASSESSMENT OF A PILOT

MICRO-HYDROELECTRICITY PROJECT

by

Kaye Bowman

August 1985

P a c i f i c Islands Development Program/Resource Systems I n s t i t u t e 1777 East-West Road East-West Center Honolulu, Hawaii

KAYE BOWMAN i s a Ph.D. candidate at the A u s t r a l i a n N a t i o n a l U n i v e r s i t y i n Canberra. P r i o r to her f e l l o w s h i p at the East-West Center, she worked e x t e n s i v e l y i n Papua New Guinea on research sponsored by the U.N. Man and the Biosphere Program and by the Papua New Guinea government. She has p a r t i c i p a t e d i n numerous r u r a l e l e c t r i f i c a t i o n conferences and prepared a r u r a l e l e c t r i f i c a t i o n paper on e i g h t South P a c i f i c c o u n t r i e s f o r the Asian Development Bank.

The P a c i f i c Islands Development Program i s p u b l i s h i n g t h i s r e p o r t f o r use by P a c i f i c i s l a n d governments. To ensure maximum dissemination of the m a t e r i a l contained i n the r e p o r t , i t i s not copyrighted and i s l a n d governments are encouraged to copy the re p o r t or p o r t i o n s of i t at w i l l . PIDP requests, however, that o r g a n i z a t i o n s , I n s t i t u t i o n s , and i n d i v i d u a l s acknowledge the source of any m a t e r i a l used from the r e p o r t .

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CONTENTS

Foreword v i l

Preface v i i i

Acknowledgments i x

CHAPTER 1 FOCUS OF THE RURAL ELECTRIFICATION CASE STUDY 1

Papua New Guinea's Approach to Rural E l e c t r i f i c a t i o n 1 Issues In v e s t i g a t e d i n the Case Study • ••• 1 Parameters I n v e s t i g a t e d 2 Fieldwork Methods 4 Organization of the Report 5

CHAPTER 2 RURAL ELECTRIFICATION CONTEXT: PAPUA NEW GUINEA 6

Papua New Guinea under A u s t r a l i a n A d m i n i s t r a t i o n : 1950-75 .... \ 6 Consequences of A u s t r a l i a ' s P o l i c i e s and Programs 8 Independent Papua New Guinea's P o l i c i e s on Development,

Energy, and Technology 13 The Question of Rural E l e c t r i f i c a t i o n 14 Summary 17

CHAPTER 3 UMBANG-BAINDOANG MICRO-HYDROELECTRIC PROJECT: STAGE 1 18

The Umbang Region of Morobe Province: The S e t t i n g f o r Stage 1 18

Goals and Objectives f o r Stage 1 21 P r o j e c t Design 26 F e a s i b i l i t y Studies and P r o j e c t A p p r a i s a l 26 Front-end P r o j e c t Requirements and How They Were Met 28 P r o j e c t Implementation 28 P r o j e c t Operation and Management 29 Summary of the I n s t i t u t i o n a l Arrangements f o r Stage 1 30 E l e c t r i c i t y Use i n Umbang 30

CHAPTER 4 EVALUATION OF STAGE 1 OF THE UMBANG-BAINDOANG MICRO-HYDROELECTRICITY PROJECT 35

UNITECH'S Objectives and P r o j e c t Outcomes 35 The V i l l a g e r s ' Expectations and P r o j e c t Outcomes 42 Summary of P r o j e c t Outcomes i n R e l a t i o n to the P a r t i c i p a n t s *

Objectives and Expectations 44 Na t i o n a l Government I n t e r e s t s and P r o j e c t Outcomes 45

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CHAPTER 5 DESCRIPTION OF STAGE 2 OF THE UMBANG-BAINDOANG MICRO-HYDROELECTRIC PROJECT 54

Background Information on the V i l l a g e of Baindoang 54 RE P r o j e c t Goals and Objectives 67 F e a s i b i l i t y Studies and P r o j e c t A p p r a i s a l 67 T e c h n i c a l Surveys and P r o j e c t Design 67 Front-end P r o j e c t Costs and How They Were Met 6 8 P r o j e c t Implementation 70 P r o j e c t Handover and Operation 72 E l e c t r i c i t y Use i n Baindoang 73

CHAPTER 6 EVALUATION OF STAGE 2 OF THE UMBANG-BAINDOANG MICRO-HYDROELECTRIC PROJECT 76

The Baindoang Peoples 1 Expectations and P r o j e c t Outcomes 76 The Government's Objectives and P r o j e c t Outcomes 7 8 Summary and Conclusion 83

CHAPTER 7 POLICY IMPLICATIONS OF THIS ANALYSIS OF THE UMBANG-BAINDOANG MICRO-HYDRQELECTRICITY PROJECT 84

A Seven-Phase Planning and Management Framework f o r RE 84 I n s t l t u t i o n n a l Support f o r Future V i l l a g e

M i c r o - h y d r o e l e c t r i c i t y P r o j e c t s 91

Appendix

Table A . l Comparison of the L i f e - c y l e Costs of a Microhydro Scheme and a P h o t o v o l t a i c System f o r the Umbang Regional Center 93

Table A.2 Net Present Value and Annual Expenditure of an Eight KVA Microhydro F a c i l i t y . Kina 1984 P r i c e s . Case A U n s k i l l e d Labor Valued at Zero 97

Table A.3 Net Present Value and Annual Expenditure of an Eight KVA Microhydro F a c i l i t y . Kina 1984 P r i c e s . Case B U n s k i l l e d Labor Valued at F u l l Market Wage Rate 98

Table A.4 Breakdown of Costs of a S i n g l e P h o t o v o l t a i c Household K i t . Cost, Kina 1984 P r i c e s 99

Table A.5 Net Prevent Value and Annual Expenditure of a S i n g l e P h o t o v o l t a i c K i t . Kina 1984 P r i c e s 101

References 102

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LIST OF TABLES

2.1 C i t i z e n households i n r u r a l sector (%) by p r i n c i p a l

cash earning a c t i v i t i e s : Papua New Guinea, 1980 .. 9

2.2 Urban population changes, 1966-80 12

2.3 NPEP s e c t o r a l program fund a l l o c a t i o n s : f i s c a l 1981 14

3.1 Main events i n the recent h i s t o r y of the Umbang region 20 3.2 Requests made to and as s i s t a n c e received from no n - l o c a l

o r g a n i z a t i o n s f o r community p r o j e c t s i n Umbang, 1971-81 i n c l u s i v e 23

3.3 Recent population data f o r the fourteen v i l l a g e s o f the Umbang region 27

3.4 I n s t i t u t i o n a l arrangements f o r Stage 1 of the Umbang Baindoang m i c r o - h y d r o e l e c t r i c l t y p r o j e c t 31

3.5 Uses of e l e c t r i c i t y i n Umbang: January 1982 two and one h a l f years p o s t - e l e c t r i c i t y supply 33

4.1 A t t r i b u t e s required by host p r o j e c t manager and l o c a l p r o j e c t manager 37

4.2 Annual operating and maintenance costs of Stage 1 of

the p r o j e c t 40

4.3 Revenues r a i s e d from Stage 1 41

4.4 Summary of costs of an 8 kVA m i c r o - h y d r o e l e c t r i c i t y system 48 4.5 Summary of Net Present Values (NPV) of a 8 kVA

m i c r o - h y d r o e l e c t r i c i t y system In Kina, 1984 p r i c e s 49

4.6 Summary of costs of a s i n g l e p h o t o v o l t a i c l i g h t i n g k i t Kina 1984 p r i c e s 50

4.7 Summary of Net Present Values (NPV) of a s i n g l e p h o t o v o l t a i c l i g h t i n g k i t , Kina 1984 p r i c e s 52

5.1 Baindoang p o p u l a t i o n : A p r i l , 1980 57

5.2 A c t i v i t i e s of the Baidoang v i l l a g e r s 58

5.3 Coffee trees and income by Baindoang household (1979) 63

5.4 G i f t s , i n cash or k i n d , received from urban r e l a t i v e s by 37 Baindoang households: August 1980 to J u l y 1981, I n c l u s i v e 64

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5.5 O r i g i n of money spent on kerosene 66

5.6 Costs of the 2 km high-voltage transmission l i n e between Umbang and Baindoang 6 9

5.7 Cost of the low-voltage g r i d system w i t h i n Baindoang v i l l a g e 71

5.8 E x i s t i n g l i g h t i n g loads i n Baindoang at January, 1982 74

6.1 Responses by Baindoang people to an open-ended question on use p r i o r i t i e s f o r e l e c t r i c i t y , A p r i l 1980 77

7.1 L o c a t i o n a l c o n d i t i o n s under which m i c r o - h y d r o e l e c t r i c p r o j e c t s would be recommended 86

7.2 Planning and management of s e l f - h e l p m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s i n Papua New Guinea: main tasks and recommended d i v i s i o n s of r e s p o n s i b i l i t y 88

LIST OF FIGURES

2.1 F u e l imports: Papua New Guinea 1956-76 10

3.1 Morobe province, with the Nawae census d i v i s i o n and s u b d i v i s i o n s , Kasanombe and Umbang a i r s t r i p s , and Baindoang v i l l a g e i n d i c a t e d 19

3.2 Map showing the fourteen v i l l a g e s of the Umbang region 22

3.3 Umbang Regional Centre showing water and power r e t i c u l a t i o n (December 1981) 32

4.1 T y p i c a l d a l l y p a t t e r n of e l e c t r i c i t y use i n Umbang 47

5.1 Schematic map of Baindoang V i l l a g e 56

5.2 S o c i a l S t r u c t u r e of Baindoang V i l l a g e 60

6.1 Resources flows through the Baindoang v i l l a g e system 82

7.1 A seven-phase planning and management framework f o r r u r a l e l e c t r i f i c a t i o n p r o j e c t s 85

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Foreword

During the 19th century, the P a c i f i c i s l a n d s were net exporters of energy. Times have changed, however, as the export of whale o i l has given way t o the

import of f o s s i l f u e l s . Although wood i s commonly used f o r cooking and some of the l a r g e r i s l a n d nations have developed h y d r o e l e c t r i c schemes, Imported f o s s i l f u e l s provide the bulk of the energy used f o r t r a n s p o r t , manufacturing, and e l e c t r i c i t y . With f o s s i l f u e l s commonly rep r e s e n t i n g 20 to 25 percent of a nation's t o t a l import b i l l , the development of the P a c i f i c i s l a n d s i s constrained by the use of scarce f i n a n c i a l resources t o the purchase of imported energy and i s thus v u l n e r a b l e to both i t s p r i c e f l u c t u a t i o n s and b a s i c supply.

Recognizing the Impact of imported f u e l s on t h e i r nation's economies, the need to more f u l l y e x p l o i t indigenous resources, and the n e c e s s i t y of c o s t - e f f e c t i v e uses of f o s s i l f u e l s . P a c i f i c i s l a n d leaders at the March 1980 P a c i f i c Islands Conference d i r e c t e d that a comprehensive P a c i f i c energy program be e s t a b l i s h e d t o provide p o l i c y advice, t r a i n i n g , and t e c h n i c a l a s s i s t a n c e to r e g i o n a l governments. The P a c i f i c Energy Program i s supported by the United Nations Development Programme (UNDP), the European Economic Community (EEC), the South P a c i f i c Bureau f o r Economic Co-operation (SPEC), and the East-West Center (EWC). The EWC p o r t i o n of the program i s p r i n c i p a l l y concerned w i t h four p o l i c y areas:

. Petroleum s e c u r i t y

. Planning and p o l i c y advice to Micronesian Governments

. Rural e l e c t r i f i c a t i o n

. Energy education/curriculum development

W i t h i n the four areas of emphasis, the East-West Center Energy Program has two o b j e c t i v e s : (1) t o provide d e c i s i o n makers w i t h i n f o r m a t i o n and methodological t o o l s f o r analyzing domestic energy problems and (2) t o a s s i s t w i t h the f o r m u l a t i o n of energy p o l i c y a l t e r n a t i v e s t h a t can be considered w i t h i n a framework of r e g i o n a l cooperation. To ensure that the EWC p r o j e c t i s responsive to the needs of the i s l a n d s t a t e s , l i a i s o n i s maintained w i t h other p a r t i c i p a t i n g o r g a n i z a t i o n s and, through the P a c i f i c I slands Development Program (PIDP), d i r e c t l y w i t h p o l i t i c a l leaders from the r e g i o n .

The people and leaders of the P a c i f i c i s l a n d s recognize the value of e l e c t r i c i t y i n improving the q u a l i t y of l i f e . But e l e c t r i c i t y cannot be a c o n t r i b u t i n g f a c t o r to the growth of an urban "consumer s o c i e t y " that the P a c i f i c nations can i l l a f f o r d . By "consumer s o c i e t y , " we mean the import o f , f o r example, n o n e s s e n t i a l e n e r g y - i n e f f i c i e n t appliances and n o n - n u t r i t i o u s processed foods that d i s p l a c e t r a d i t i o n a l f o o d s t u f f s . These do not have productive uses i n the P a c i f i c i s l a n d s , and t h e i r o p portunity c o s t s t o the development of r u r a l areas i s high because scarce f o r e i g n exchange i s d i v e r t e d to pay f o r such imports. Knowing these negative impacts beforehand enables the planning of c o r r e c t i v e measures. Thus, we welcome assessments t h a t suggest measures to use e l e c t r i c i t y e f f e c t i v e l y i n the context of our P a c i f i c c u l t u r e s and i n d i c a t e whether e x p l i c i t l y or by i n f e r e n c e , why these i n i t i a t i v e s are necessary.

F i l i p e Bole, C.B.E. D i r e c t o r

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Preface

This paper i s one of a s e r i e s of case s t u d i e s undertaken f o r the Rural E l e c t r i f i c a t i o n a c t i v i t y of the P a c i f i c I s l a n d Energy Studies P r o j e c t . The case study m a t e r i a l was designed t o form an e m p i r i c a l background f o r the a n a l y s i s of broader p o l i c y aspects of r u r a l e l e c t r i f i c a t i o n , which are summarized i n a PIDP/RSI document e n t i t l e d Rural E l e c t r i f i c a t i o n P o l i c y Issues Papers, a v a i l a b l e from the East-West Center.

The Papua New Guinea case study was conducted over a number of years and represents a r a r e opportunity to consider the "before" and " a f t e r " consequences of v i l l a g e e l e c t r i f i c a t i o n . In a d d i t i o n , i t provides i n s i g h t s i n t o the d i f f i c u l t i e s of i n v o l v i n g v i l l a g e r s w ith a development s e r v i c e about which they have l i t t l e understanding. F i n a l l y , the study c l e a r l y i l l u s t r a t e s the i n t e r p l a y between community d e c i s i o n making and p r o j e c t implementation and suggests the Importance of understanding the s o c i a l context w i t h i n which development i n i t i a t i v e s are taken.

While Dmbang-Baindoang Is a remote place i n which unique circumstances combined to provide e l e c t r i c i t y s e r v i c e s , the lessons of c o n s u l t a t i o n and o p i n i o n formation have p a r a l l e l s elsewhere i n the developing world. In any d e s c r i p t i o n of r u r a l e l e c t r i f i c a t i o n , d e s c r i b i n g the Dmbang-Baindoang experience, i t i s important not to l o s e s i g h t of the remarkable s p i r i t of cooperation and s e l f - s a c r i f i c e that o f t e n c h a r a c t e r i z e r u r a l people i n the T h i r d World as they s t r i v e f o r a b e t t e r l i f e .

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Acknowledgments

This report has been w r i t t e n with the a s s i s t a n c e of W. Sam F i n t z and T i t l l i a Barbour. Sam read and commented u s e f u l l y on my d r a f t . T i t i l l a d i d the t y p i n g and helped w i t h the e d i t i n g . Thank you Sam and T i t i l l a and the other members of P a c i f i c Islands Development Program who provided me w i t h a warm and encouraging place to work. I am Indebted a l s o t o US(AID) f o r p r o v i d i n g f i n a n c i a l support throughout my c o n t r a c t w i t h P a c i f i c Islands Development Program.

The f i e l d w o r k on which t h i s report i s based was j o i n t l y sponsored by the Papua New Guinea Department of M i n e r a l s and Energy, UNESCO and the United Nations Environmental Program (UNEP). I thank them f o r t h e i r f i n a n c i a l support. The report I t s e l f formed the b a s i s of my Ph.D. t h e s i s , a more comprehensive work of the same t i t l e , which was undertaken at the A u s t r a l i a n N a t i o n a l U n i v e r s i t y (ANU) w i t h i n the Centre f o r Resource and Environmental Studies (CRES). I acknowledge g r a t e f u l l y the a s s i s t a n c e and cooperation of the ANU and CRES, and I would l i k e to thank the f o l l o w i n g people i n p a r t i c u l a r : my s u p e r v i s o r s , Stephen Bonden, Ken Newcombe and Peter Greenwood; my colleagues who o f f e r e d u s e f u l advice, Mark Ramsey, Marlon C h r i s t i e , Monica McDonald and Peter Dawson; my computer operations a s s i s t a n t s , Tony Bayes and Paul Parker; my t y p i s t Fay Goddard; and my graphics a s s i s t a n t , A l i s o n Pomroy.

My many thanks go t o the people w i t h i n Papua New Guinea w i t h whom I worked and shared many memorable experiences. They Include, f i r s t and foremost, the people of the v i l l a g e of Baindoang and the teachers at the Umbang Community School who were the w i l l i n g p a r t i c i p a n t s of t h i s study and a constant source of warm h o s p i t a l i t y and companionship. S i m i l a r l y , I am g r a t e f u l to the people i n Lae and Port Moresby who provided me w i t h a 'home away from home,' Hartmut, Sue and M a r t i n Holzknecht, Ra and Steward Forsythe, the M i l l e r f a m i l y and the Newcombe f a m i l y . The t e c h n i c a l a s s i s t a n c e I received from the U n i v e r s i t y of Technology (UNITECH), Lae, was a l s o much appreciated. The members of UNITECH who gave f r e e l y of t h e i r time and were e x c e l l e n t and constant sources of i n f o r m a t i o n and ideas were A l l a n I n v e r s l n , Jack and Mary Woodward, d i v e P e r r e t t , Paul Robinson, Herb Eadle and Jean Anneaux-Clarke.

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CHAPTER 1

FOCUS OF THE RURAL ELECTRIFICATION CASE STUDY

In developing c o u n t r i e s the use of e l e c t r i c a l power has grown at a pace of 10 percent a year from 1950 t o 1975 and 8 percent a year s i n c e then (World Bank 1980). E l e c t r i c i t y c u r r e n t l y accounts f o r between 60 and 80 percent of the t o t a l energy Investments i n developing c o u n t r i e s (Friedmann 1976). A s i z a b l e but unknown p r o p o r t i o n of these t o t a l expenditures has been f o r r u r a l e l e c t r i f i c a t i o n (RE) programs. Unfortunately, however, RE programs i n developing c o u n t r i e s have o f t e n f a i l e d t o l i v e up to i n i t i a l e x p e c t a t i o n s .

C r i t i c s of RE have made four main p o i n t s : (1) past RE programs i n developing c o u n t r i e s have l e d t o increased dependence on f o r e i g n f i n a n c i n g , s k i l l s , and technologies (Gustafson 1979; E p s t e i n and Mirow 1977; Hoffman 1978); (2) RE has f r e q u e n t l y been at the expense of goals f o r e q u a l i t y (Mahkijani 1976; Hayes and B e l l o 1979; Hayes 1979); (3) RE has f a i l e d t o increase s i g n i f i c a n t l y e i t h e r r u r a l p r o d u c t i v i t y (Mahkijani 1976) or r u r a l w e l f a r e ; (Tendler 1979); and (4) RE does not address the r e a l b a s i s of the r u r a l energy problem — namely, that of the Increasing shortages of fuelwood, the p r i n c i p l e r u r a l energy resource; (Weatherly 1980). On the b a s i s of these observations, n a t i o n a l energy planners and donor agencies have been urging cautious and c a r e f u l study before committing funds f o r RE ( f o r example, see Smith et a l 1983). While they acknowledge that RE holds out the promises of modernity and of economic and s o c i a l dynamism, they recognize that the r e l a t i v e sequencing of RE and other r u r a l development programs i s c r u c i a l .

Papua New Guinea's Approach to Rural Elec t r i f i c a t i o n

Papua New Guinea Is among the developing c o u n t r i e s t h a t have adopted a cautious approach to RE. Papua New Guinea's f i r s t White Paper on Energy, prepared by the Energy Planning U n i t (EPU) of the Department of Minerals and Energy, (DME) and adopted by the government i n 1979, s t a t e s t h a t : "a great deal of t h i n k i n g must be ap p l i e d t o each request f o r e l e c t r i c i t y i n r u r a l areas t o see whether the p r o v i s i o n of e l e c t r i c i t y i s indeed the best way, both economically and e c o l o g i c a l l y , t o s a t i s f y that p a r t i c u l a r demand, and t o f u l f i l our development goa l s . " (Department of Miner a l s and Energy, 1979a, p.28.)

This cautionary note a r i s e s because In Papua New Guinea RE i s s t i l l at the experimental stage. Only demonstration or p i l o t v i l l a g e - l e v e l RE p r o j e c t s have been implemented so f a r . By c a r e f u l l y monitoring these p r o j e c t s and r e f i n i n g I t s RE p o l i c i e s on the b a s i s of each completed p r o j e c t , Papua New Guinea i s hoping t o develop a sound planning framework f o r RE and to avoid the mistakes that have been made i n RE programs In other developing c o u n t r i e s . The p r o v i s i o n of informat i o n on the scope of one of these p i l o t v i l l a g e RE p r o j e c t s and on i t s associated s o c i a l and economic impacts i s a p r i n c i p a l o b j e c t i v e of t h i s study.

Issues Investigated In the Case Study

The RE p r o j e c t that Is the subject of t h i s case study i s l o c a t e d i n the i s o l a t e d Nabak region of Morobe province and i s known as the Dmbang-Baindoang

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p r o j e c t . I t i s a two-stage, v i l l a g e s e l f - h e l p , m i c r o - h y d r o e l e c t r i c i t y p r o j e c t . Stage 1 included the c o n s t r u c t i o n of a micro-hydro f a c i l i t y and the d i s t r i b u t i o n of e l e c t r i c i t y to a nearby r e g i o n a l center c a l l e d Umbang. Stage 2 included the extension of the e l e c t r i c i t y g r i d from Umbang to Baindoang, one of fourteen v i l l a g e s s e r v i c e d by Umbang. By the time f i e l d w o r k f o r the author's study began i n May 1979, Stage 1 was almost completed and Stage 2 was i n i t s planning stage. Consequently, the c e n t r a l aim of the study was t o conduct a before and a f t e r assessment of the i n t r o d u c t i o n of e l e c t r i c i t y to Baindoang v i l l a g e , but i t could a l s o provide a framework f o r the events at Umbang as they r e l a t e d to the RE p r o j e c t . This report thus presents data on both stages of the Umbang-Baindoang p r o j e c t . These data i n c l u d e i n f o r m a t i o n on how i t was planned. Implemented, and managed and on how and by whom e l e c t r i c i t y was used i n the f i r s t two years a f t e r i t became a v a i l a b l e .

This case study i n v e s t i g a t e d the f o l l o w i n g Issues:

The s o c i a l and economic c o n d i t i o n s in-Umbang and Baindoang before the advent of e l e c t r i c i t y and the most p r e s s i n g requirements of the community as perceived by i t s members and the author.

The s o c i a l and economic changes associated w i t h the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t .

The v i l l a g e c h a r a c t e r i s t i c s and b a s i c features of planning and management that determined these changes.

Whether a m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was the best development op t i o n t o meet the most p r e s s i n g requirements of the community.

The i m p l i c a t i o n s of the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t f o r n a t i o n a l p o l i c y making.

Parameters Investigated

Methodologies f o r v i l l a g e - l e v e l energy s t u d i e s must include the c o l l e c t i o n of data at three l e v e l s : n a t i o n a l , community, and household or i n d i v i d u a l . The f a c t o r s at the n a t i o n a l l e v e l i n c l u d e :

S o c i e t a l events during recent decades that have c o n t r i b u t e d to the c u r r e n t s o c i a l and e c o l o g i c a l c o n d i t i o n s and p a t t e r n s of energy use.

Current n a t i o n a l aims and o b j e c t i v e s and the consistency of RE goals w i t h other major socioeconomic goals.

The p r e v a i l i n g l e v e l of i n d u s t r i a l , commercial, a g r i c u l t u r a l , and s o c i a l s e r v i c e a c t i v i t y i n r u r a l areas and the extent to which e l e c t r i c i t y can c o n t r i b u t e to the energy requirements of e x i s t i n g r u r a l t a s k s .

The country's p h y s i c a l resource endowment and the a v a i l a b i l i t y of resources from which e l e c t r i c i t y can be generated.

The p r e v a i l i n g r u r a l a d m i n i s t r a t i v e s t r u c t u r e and the a v a i l a b i l i t y of s k i l l e d people to administer RE p r o j e c t s .

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These f a c t o r s w i l l Influence d e c i s i o n making on three b a s i c i s s u e s : (1) the p r i o r i t y that should be placed on RE as part of a balanced r u r a l (energy) program; (2) the choice of RE technology; and (3) the choice of i n s t i t u t i o n a l arrangements f o r the planning and management of RE p r o j e c t s and programs. These issues determine the ground r u l e s and d i r e c t i v e s f o r RE that are common to a l l r u r a l communities i n Papua New Guinea (see chapter 3 ) .

At the community l e v e l of a n a l y s i s , the aim was t o describe the Dmbang-Baindoang region and t o document how socioeconomic c o n d i t i o n s both i n f l u e n c e d and were in f l u e n c e d by the m i c r o - h y d r o e l e c t r i c p r o j e c t . For convenience, the community c o n d i t i o n s r e q u i r i n g a t t e n t i o n can be d i v i d e d i n t o two s e t s of i n t e r r e l a t e d components: (1) community o r g a n i z a t i o n and communication channels; and (2) s o c i e t a l a c t i v i t i e s and products of l a b o r .

The nature and l e v e l of community o r g a n i z a t i o n i n the Umbang regi o n and i n the v i l l a g e of Baindoang before e l e c t r i c i t y was Introduced r e q u i r e a t t e n t i o n because a m i c r o - h y d r o e l e c t r i c p r o j e c t , by i t s nature, Is a community-scale p r o j e c t , and the p r o b a b i l i t y of p r o j e c t success t h e r e f o r e w i l l be dependent on the existence of the necessary community o r g a n i z a t i o n f o r p h y s i c a l and some f i n a n c i a l resources. The chances of p r o j e c t success w i l l be dependent a l s o on the existence of f r i e n d l y , cooperative, and strong r e l a t i o n s w i t h nonlocal i n s t i t u t i o n s because the community alone cannot perform the complex tasks a s s o c i a t e d w i t h a m i c r o - h y d r o e l e c t r i c i t y p r o j e c t . In consequence, d e t a i l e d a t t e n t i o n i s paid t o the r o l e s t h a t v a r i o u s i n s t i t u t i o n s and i n d i v i d u a l s played i n the RE p r o j e c t and t o the communication channels that were e s t a b l i s h e d to coordinate i n p u t s , thereby i d e n t i f y i n g strengths and weaknesses i n the i n s t i t u t i o n a l arrangements f o r planning, c o n s t r u c t i n g , and running the p r o j e c t .

D e t a i l e d a t t e n t i o n i s paid a l s o t o the a c t i v i t i e s performed by the r u r a l community i n each of the f i v e main components of i t s comtemporary v i l l a g e system: the domestic, a g r i c u l t u r a l , commercial, s m a l l - s c a l e I n d u s t r i a l , and ba s i c s e r v i c e s e c t o r s . Information was c o l l e c t e d on each of the a c t i v i t i e s performed by the r u r a l community i n each of these s e c t o r s f o r two reasons: f i r s t , t o determine the nature of the changes i n a c t i v i t i e s t h a t r e s u l t from the use of e l e c t r i c i t y once provided and, second, to i d e n t i f y the needs of the community and t o assess whether the RE p r o j e c t was the best development op t i o n t o s a t i s f y the most p r e s s i n g requirements of the r u r a l people.

A d e s c r i p t i o n of the l o c a l region and the community as a whole w i l l not be s u f f i c i e n t , however, i f the f u l l impact of the changes as s o c i a t e d w i t h the RE p r o j e c t are to be understood. E l e c t r i c i t y a f f e c t s d i f f e r e n t s o c i a l and economic groups and i n d i v i d u a l s w i t h i n a v i l l a g e In d i f f e r e n t ways. The f a c t o r s that may i n f l u e n c e the extent to which e l e c t r i c i t y impinges on the i n d i v i d u a l and that the I n d i v i d u a l ' s resource endowment, l i f e - s t y l e , previous l e a r n i n g experience and perceptions of RE, and s o c i a l s t a t u s . These f a c t o r s i n t e r a c t and determine the l e v e l of adoption of RE by the i n d i v i d u a l and, i n t u r n , the Impact of RE on him or her.

Access to r e s o u r c e s — l a n d , l a b o r , c a p i t a l and m a r k e t s — i s o f t e n unevenly d i s t r i b u t e d among the members of a r u r a l community, and f a i l u r e t o take t h i s f a c t Into account can r e s u l t i n p o l i c i e s t h a t e i t h e r maintain the s t a t u s quo or e l s e f u r t h e r r e i n f o r c e e x i s t i n g economic d i s p a r i t i e s among v i l l a g e r s . In

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p a r t i c u l a r , the l e v e l of income, i n r e l a t i o n to e l e c t r i c i t y connection changes and monthly t a r i f f s , has been s i n g l e d out as an important determinant of whether an i n d i v i d u a l adopt RE.

Whether an i n d i v i d u a l adopts e l e c t r i c i t y , i n p a r t , w i l l be a f u n c t i o n of h i s or her previous l e a r n i n g experience ( i n c l u d i n g both formal and in f o r m a l education) and knowledge of e l e c t r i c i t y (what i t i s , how i t works, i t can be used, and how i t can a f f e c t h i s or her l i f e ) . Obviously, those i n d i v i d u a l s who come i n t o d i r e c t contact w i t h the new energy form w i l l l e a r n from experience and may, at a l a t e r date, adopt a view d i f f e r e n t from the one they held at the beginning of the p r o j e c t . I n d i v i d u a l s a l s o adopt RE f o r p s y c h o l o g i c a l reasons such as enhancing s e l f - i d e n t i t y and s t a t u s .

Indeed s o c i a l s t a t u s , here taken t o mean the p o s i t i o n s t h a t the i n d i v i d u a l holds i n the p r e v a i l i n g p o l i t i c a l system, a l s o may be an Important f a c t o r I n f l u e n c i n g the extent to which e l e c t r i c i t y impinges on the I n d i v i d u a l . I n d i v i d u a l s of high s o c i a l s t a t u s are l i k e l y t o have more i n f l u e n c e over d e c i s i o n s regarding the e l e c t r i c i t y p r o j e c t than are I n d i v i d u a l s of low s o c i a l s t a t u s . This need not be of concern i f the people i n a u t h o r i t y r e f l e c t the i n t e r e s t of the community i n making t h e i r d e c i s i o n s about e l e c t r i c i t y . However, the p o s s i b i l i t y e x i s t s e i t h e r that v i l l a g e l e a ders w i l l manage RE to t h e i r own ends or that they might not be i n the best p o s i t i o n t o make d e c i s i o n s regarding t o RE. Whether such concerns are warranted Is best answered by paying a t t e n t i o n t o s o c i a l s t a t u s and t o how i t Influences the extent to which the i n d i v i d u a l has access t o and use of e l e c t r i c i t y .

The p a r t i c u l a r end-use a p p l i c a t i o n s f o r e l e c t r i c i t y t h a t are chosen by an i n d i v i d u a l w i l l be a f u n c t i o n of h i s or her l i f e - s t y l e . In Papua New Guinea as i n most t r a d i t i o n a l s o c i e t i e s , the t o t a l mix of a c t i v i t i e s c a r r i e d out by the l i f e - s t y l e of a man d i f f e r s s i g n i f i c a n t l y from that of a women. In a d d i t i o n , a l i f e - s t y l e d i f f e r e n c e g e n e r a l l y e x i s t s by age, as w e l l as by gender. In p a r t i c u l a r , v i l l a g e youth tend to engage i n l e i s u r e p u r s u i t s d i f f e r e n t from those of t h e i r e l d e r s . RE thus i s l i k e l y to a f f e c t men d i f f e r e n t l y from women and younger people and d i f f e r e n t l y from o l d e r people.

Fleldvork Methods

I t was c l e a r from the beginning t h a t no s i n g l e f i e l d work methodology would be adequate to assess the broader impacts of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y scheme. Indeed, seven f i e l d w o r k techniques were used t o o b t a i n data on a l l of the s e l e c t e d , community, and i n d i v i d u a l socioeconomic v a r i a b l e s . The seven f i e l d w o r k techniques were:

1. Studying n a t i o n a l p o l i c i e s on energy, technology, development, and i n p a r t i c u l a r RE.

2. Compiling an inventory of a l l the a c t i v i t i e s performed by the l o c a l and a n a l y z i n g them.

3. C o l l e c t i n g q u a n t i t a t i v e data on the energy requirements of those a c t i v i t i e s t h a t were expected to change when e l e c t r i c i t y became a v a i l a b l e .

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4. c o l l e c t i n g cash income, expenditure, and Investment p r o f i l e s f o r households and businesses.

5. Interviewing r u r a l r e s i d e n t s t o gather i n f o r m a t i o n about changes i n t h e i r circumstances over time and to a s c e r t a i n t h e i r perceptions of t h e i r current l i f e - s t y l e , t h e i r expectations, and the r o l e that the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t might play i n changing v a r i o u s aspects of t h e i r l i v e s .

6. Compiling notes on d i s c u s s i o n s with v i l l a g e r e s i d e n t who were a c t i v e i n p u b l i c a f f a i r s .

7. Using p a r t i c i p a n t observation method—that i s , becoming aware of and l e a r n i n g about the experiences of the v i l l a g e r s by l i v i n g alongside them.

1 Obviously, these seven components of f i e l d w o r k were not mutually e x c l u s i v e ; data c o l l e c t e d w i t h i n one component served at times as a check on data w i t h i n another.

When a f i e l d w o r k methodology was considered, i t was c l e a r from the beginning, p a r t i c u l a r l y f o r Stage 2, that repeated observations over an extended period of time would be necessary because the s o c i a l adaptation would be a r e l a t i v e l y gradual process. In consequence, f i e l d w o r k i n Umbang-Baindoang was begun i n May 1979, when Stage 1 of the p r o j e c t had j u s t entered I t s o p e r a t i o n a l phase and Stage 2 was i n i t s planning phase; f i e l d w o r k continued at i n t e r v a l s u n t i l December 1981, when Stage 2 had been completed and e l e c t r i c i t y had been a v a i l a b l e In the v i l l a g e of Baidoang f o r 18 months and i n the Umbang Regional Centre f o r two and one-half years.

Organization of the Report

The f o l l o w i n g chapter, chapter 2, i s a background d i s c u s s i o n of RE as a development option f o r Papua New Guinea. Chapter 3 describes the r e g i o n i n t o which the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t was Introduced and reviews Stage 1 of the p r o j e c t . This stage of the p r o j e c t i s evaluated i n chapter 4. In chapter 5 the v i l l a g e of Baindoang, which received e l e c t r i c i t y during Stage 2 of the p r o j e c t , i s described, and information i s presented on the second stage of the p r o j e c t . Stage 2 Is evaluated i n chapter 6. F i n a l l y , chapter 7 discusses the p o l i c y i m p l i c a t i o n s of the case study and presents conclusions and recommendations.

One important and concrete way i n which p a r t i c i p a n t o bservation was used i n t h i s study was with regard to decision-making matters. I attended numerous meetings i n the l o c a l region where I recorded the major is s u e s and concerns that were discussed and kept d e t a i l e d records of those meetings i n which the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s p e c i f i c a l l y was discussed. Information from these meetings i s used throughout t h i s r e p o r t .

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CHAPTER 2

RURAL ELECTRIFICATION CONTEXT: PAPUA NEW GUINEA

Papua New Guinea i s l o c a t e d i n the South P a c i f i c about 100 miles north of eastern A u s t r a l i a . I t has a t o t a l p o p u l a t i o n of about 3 m i l l i o n of whom 15 percent are urban dw e l l e r s and 85 percent r u r a l . Papua New Guinea's t o t a l land area Is 462,840 sq km comprising a mainland (85%) and some 600 t i n y i s l a n d s . Although Papua New Guinea was c o l o n i z e d by the Europeans i n the l a t e 19th century, i t was not u n t i l a f t e r World War I I th a t r a p i d and permanent transformation of the s o c i e t y began t o take e f f e c t .

This chapter b r i e f l y examines the major s o c i a l and economic changes that have taken place In Papua New Guinea s i n c e the 1950s and i d e n t i f i e s the energy, technology, and development p o l i c i e s underlying changes. I t o u t l i n e s the nature of the new p o l i c i e s that have been formulated s i n c e Papua New Guinea gained Independence i n 1975, and i t considers t h e i r i m p l i c a t i o n s f o r the e l e c t r i f i c a t i o n of r u r a l areas.

Papua New Guinea under Australian Administrationi 1950-75

Papua New Guinea's patterns of i n s t i t u t i o n a l and economic growth have u n t i l r e c e n t l y been determined by A u s t r a l i a , which i n t e g r a t e d the thousands of v i l l a g e s i n Papua and New Guinea i n t o a p o l i t i c a l s t r u c t u r e modeled on i t s own. I t chose a development path f o r the newly formed n a t i o n t h a t depended on imported petroleum products f o r economic growth and th a t emphasized the i n t e r n a t i o n a l , i n d u s t r i a l , and urban sector s of the n a t i o n a l economy. A u s t r a l i a l i m i t e d i t s e f f o r t s i n r u r a l development to the i n t r o d u c t i o n of b a s i c s e r v i c e s and cash crops f o r export.

Changes In Sociopolitical Organization

Before World War I I the two t e r r i t o r i e s of Papua New Guinea were administered s e p a r a t e l y . Moreover, the few small c o l o n i a l a d m i n i s t r a t i v e centers t h a t had been e s t a b l i s h e d were confined t o the c o a s t a l regions of the t e r r i t o r i e s . I t was not u n t i l a f t e r World War I I that systematic p e n e t r a t i o n of the highlands regions of the mainland occurred and t h a t the thousands of autonomous, c u l t u r a l l y d i s c r e t e , and economically s e l f - s u f f i c i e n t Papua and New Guinea v i l l a g e s were i n t e g r a t e d i n t o l a r g e r p o l i t i c a l u n i t s under the c o n t r o l of a c e n t r a l a d m i n i s t r a t i o n .

The p o l i t i c a l I n s t i t u t i o n s that were e s t a b l i s h e d i n Papua New Guinea were modeled on t h e i r prototypes i n A u s t r a l i a . The Papua New Guinea Parliament had a cabinet composed of m i n i s t e r s who presided over m i n i s t r i e s run by c i v i l servants. L o c a l government c o u n c i l s , made up of one to a few v i l l a g e s , a l s o were e s t a b l i s h e d , but i t was not u n t i l 1975 that 95 percent of the l o c a l p o p u l a t i o n was w i t h i n the j u r i s d i c t i o n of such c o u n c i l s (World Bank 1978). These c o u n c i l s were, u n t i l independence, l i n k e d t o the Ce n t r a l Government through a d i s t r i c t a d m i n i s t r a t i v e s t r u c t u r e : t h i s s t r u c t u r e c o n s i s t e d of separate v e r t i c a l l i n k s t o each of the vario u s departments and f a i r l y loose h o r i z o n t a l l i n k s among them (see Colebatch 1979). Because these h o r i z o n t a l l i n k s among the vario u s departments inv o l v e d i n r u r a l

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development were not strong; the s e c t i o n a l p r o j e c t s run by the appropriate departments i n i s o l a t i o n t o one another that were most common and important element.

Changes In Social and Econoalc Activities

Immediately a f t e r World War I I the A u s t r a l i a n a d m i n i s t r a t i o n I n i t i a t e d program f o r r u r a l areas i n education, h e a l t h , p u b l i c works, and a g r i c u l t u r e . In c o n t r a s t , commercial and i n d u s t r i a l p r o j e c t s were e s t a b l i s h e d mainly by expatriates,2 i n the towns that they had cre a t e d . The main exception was the B o u g a i n v i l l e copper and gold mining p r o j e c t that was a j o i n t venture between the a d m i n i s t r a t i o n and f o r e i g n companies.

U n t i l World War I I education remained l a r g e l y i n the hands of C h r i s t i a n missions (see Biskup et a l 1970). Beginning i n 1951, however, education was promoted by the A u s t r a l i a n a d m i n i s t r a t i o n t o e s t a b l i s h s c h o o l i n g In the E n g l i s h language as q u i c k l y as p o s s i b l e . F i r s t primary schools and then secondary and t e r t i a r y f a c i l i t i e s were b u i l t . The A u s t r a l i a n a d m i n i s t r a t i o n placed high p r i o r i t y on formal education f o r wage workers i n the modern s e c t o r . In 1975, f o r example, Papua New Guinea's expenditure per p u p i l over a l l three l e v e l s of education was US$283, which was second highest among Singapore ($309), Malaysia ($171), Thailand ($66), S r i Lanka ($43), P a k i s t a n ($34), Nepal ($28), and the P h i l i p p i n e s ($23). U n i v e r s a l primary education, however, has not yet been achieved i n Papua New Guinea (Anderson 1981).

Beginning i n the 1950s the a d m i n i s t r a t i o n I n i t i a t e d an ambitious h e a l t h program. I t was a "barefoot" doctor system that included the c o n s t r u c t i o n of v i l l a g e h e a l t h a i d posts and the t r a i n i n g of v i l l a g e v o l unteers i n primary h e a l t h care. As a r e s u l t of t h i s program, a i d posts are now l o c a t e d throughout the country. In some pl a c e s , however. I n c l u d i n g the r e g i o n t h a t i s the s e t t i n g f o r t h i s study, the people are d i s s a t i s f i e d w i t h t h e i r h e a l t h s e r v i c e .

Beginning i n 1967-68 the A u s t r a l i a n A d m i n i s t r a t i o n made funds a v a i l a b l e t o l o c a l c o u n c i l s f o r p u b l i c works programs through i t s Rural Development Program (RDP), which i n 1973-74 was renamed the R u r a l Improvement Program (RIP). The a l l o c a t i o n t o the RDP, and t o the RIP i n p a r t i c u l a r , increased c o n s i d e r a b l y over the years. Nevertheless, the funds represented only 1.4 percent of t o t a l government expenditures i n the f i r s t h a l f of 1977 (Colebatch, 1979). The pa t t e r n of RIP p r o j e c t c h o i c e , the a d m i n i s t r a t i o n ' s p r i n c i p a l r u r a l development program, has emphasized roads. In 1969-70, f o r example, roads were a l l o c a t e d 71.7 percent of t o t a l RD funds; other t r a n s p o r t s t r u c t u r e , a f u r t h e r 10.1 percent; water supply p r o j e c t s , 15.9 percent; and a l l other p r o j e c t s , 2.3 percent. Under the Influence of the Papua New Guinea dominated parliaments of the 1970's, a g r i c u l t u r e and s o c i a l p r o j e c t s — h o u s i n g , telecommunications, were given higher p r i o r i t y . However, i n 1974-75, some 55 percent of t o t a l RIP funds were s t i l l being spent on roads and bridges (Colebatch 1979).

S t r i c t l y speaking e x p a t r i a t e s are a l l r e s i d e n t s of Papua New Guinea who are not c i t i z e n s of that country. I use the term to Include a l l nonlndigenous r e s i d e n t s whether or not they have gained c i t i z e n s h i p .

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In the a g r i c u l t u r e the A u s t r a l i a n a d m i n i s t r a t i o n concentrated on the production of cash crops f o r export. Cash cropping for domestic markets received l i m i t e d a t t e n t i o n , and subsistence a g r i c u l t u r e received no a t t e n t i o n because of i t s apparent inherent strength ( M c K i l l o p 1981).

The a d m i n i s t r a t i o n promoted s i x cash crops f o r e x p o r t — c o c o n u t s , rubber, t e a , cocoa, c o f f e e , and palm o i l — a n d followed a dual p o l i c y of a c t i v e l y encouraging an expatriate-owned p l a n t a t i o n sector on the one hand and of promoting a small-holder peasant p r o p r i e t o r s h i p on the other. The expatriate-owned p l a n t a t i o n s produced most of the coconut, rubber, tea and cocoa, w h i l e Papua New Guineans produced most of the coffee and palm o i l (see World Bank 1978, Table B3, p.156).

Papua New Guinea had no t r a d i t i o n of s m a l l - s c a l e i n d u s t r i e s , and the A u s t r a l i a n a d m i n i s t r a t i o n d i d not promote them* In consequence r u r a l Papua New Guineans' commercial and i n d u s t r i a l a c t i v i t i e s are l i m i t e d t o the growing and s e l l i n g of cash crops mainly for export and the running of tradestores and t r a n s p o r t a t i o n s e r v i c e s * Table 2.1 l i s t s the p r i n c i p a l cash-earning a c t i v i t i e s of r u r a l households as determined i n the 1980 N a t i o n a l Population Census.

Most of the growth i n commercial and I n d u s t r i a l a c t i v i t i e s occurred i n the European-created towns of Papua New Guinea. The number of establishments r e g i s t e r e d as f a c t o r i e s Increased from 123 i n 1956 t o 738 i n 1974 (World Bank 1978). These f a c t o r i e s and other urban commercial a c t i v i t i e s were e s t a b l i s h e d and run by e x p a t r i a t e s . For example, i n a recent survey of commercial and i n d u s t r i a l a c t i v i t i e s i n Lae, the foremost i n d u s t r i a l c i t y of Papua New Guinea, a l l the f a c t o r i e s except f o r one small Ice-block manufacturing company were owned by A u s t r a l i a n s , Germans, and other Europeans (see Newcombe et a l . 1980).

In a d d i t i o n t o urban-based commercial and i n d u s t r i a l p r o j e c t s , a copper and gold mining p r o j e c t was e s t a b l i s h e d at Parguna on the i s l a n d of Bouganville by Bouganvllle Copper Limited (BCL). The A u s t r a l i a n a d m i n i s t r a t i o n decided to proceed with the BCL mine In l a t e 1969, and the mine began operation i n 1973-74. Although the BCL mine has c o n t r i b u t e d s u b s t a n t i a l l y to Papua New Guinea's s e l f - r e l i a n c e , I t s current economic s i t u a t i o n i s s t i l l p r e c a r i o u s .

Consequences of Australia's Policies and Programs

The consequences of A u s t r a l i a ' s p o l i c i e s i n Papua New Guinea include (1) an extreme dependence on imported petroleum products, which are mainly used i n urban a c t i v i t i e s ; (2) dramatic and r a p i d s h i f t s i n p opulation from r u r a l areas t o underserviced and job-short urban areas; and (3) a growing and predominantly r u r a l population whose members are i n c r e a s i n g l y conscious of the f a c t that they have not received a f a i r share of the b e n e f i t s of previous n a t i o n a l development p r o j e c t s .

Dependency on O i l Imports

As shown i n Figure 2.1, an almost exponential growth occurred i n the importation and use of petroleum products during 1956-76. In absolute

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Table 2.1. C i t i z e n households In r u r a l sector (%) by p r i n c i p a l cash earning a c t i v i t i e s : Papua New Guinea

Response Cash earning a c t i v i t y " "

Yes (%) No (%) Not s t a t e d (%)

Growing c o f f e e 47.9 51.5 0.6 Growing tea 0.1 99.4 0.6 Growing cocoa 12.7 86.7 0.6 Growing rubber 1.4 98.0 0.6 Growing sp i c e s 21.2 78.2 0.6 R a i s i n g p i g s 58.0 41.5 0.6 Ra i s i n g c a t t l e 3.1 96.2 0.6 S e l l i n g a r t i f a c t s 16.7 82.6 0.7 S e l l i n g c o p r a b 19.3 80.0 0.6 S e l l i n g food 52.5 46.9 0.6 S e l l i n g f i s h 11.1 88.3 0.6 Running a t r a d e s t o r e 8.3 91.1 0.7 Running a PMVC 2.0 97.4 0.6 Running canoes 2.1 97.2 0.7 Other 20.6 71.4 8.0

Source: 1980 N a t i o n a l P o pulation Census, N a t i o n a l S t a t i s t i c a l O f f i c e , Port Moresby.

Notes: a. T o t a l households = 556,519

b. From coconuts

c. P u b l i c motor v e h i c l e f o r t r a n s p o r t a t i o n of both passengers and f r e i g h t

terms, the volume of petroleum Imports grew seven-fold, representing a doubling time of seven years (Newcombe et a l . 1980). Papua New Guinea a l s o Imported l a r g e q u a n t i t i e s of food and manufactured goods t h a t were consumed mainly by e x p a t r i a t e s but a l s o by wealthy n a t i o n a l s . In c o n t r a s t , c a p i t a l goods accounted f o r only a small p r o p o r t i o n of Papua New Guinea's t o t a l imports (World Bank 1978).

U n t i l 1972 the value of Papua New Guinea's imports exceeded the value of i t s (predominantly a g r i c u l t u r a l ) exports by at l e a s t 50 percent. The other h a l f of Papua New Guinea's import b i l l was paid out of A u s t r a l i a ' s budget. In 1973-74, however, the B o u g a i n v i l l e copper mine s t a r t e d production and more than doubled Papua New Guinea's t o t a l exports; consequently, the f u t u r e balance of payments appeared to be reasonably good. A f t e r 1979, however, the balance of payments s i t u a t i o n d e t e r i o r a t e d r a p i d l y as a r e s u l t of plummeting world commodity p r i c e s (see

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9.0

Figure 2.1 Fuel imports: Papua New Guinea, 1956-76.

10 PIDP/RSI

Federman 1982) and alarming f a l l s i n BCL r e c e i p t s (see Sydney Morning Herald 1982), accompanied by a second sharp r i s e i n the p r i c e of o i l imports (the f i r s t one occurred i n 1973).

Estimates made i n 1981 suggested that o i l imports were demanding about 26 percent of f o r e i g n exchange earnings (Newcombe et a l . 1982). Most of these o i l imports were used i n urban-based a c t i v i t i e s , i n 1976 the r a t i o of urban t o r u r a l per c a p i t a consumption of imported petroluem products was almost 20 to 1 (139 MJ/capita/day compared w i t h 7 MJ/capita/day) (Newcombe et a l . 1980, t a b l e 9, p.18).

Sapid Urbanisation

Papua New Guinea has experienced s i g n i f i c a n t r u r a l - u r b a n p o p u l a t i o n s h i f t s i n part because of the urban b i a s i n A u s t r a l i a ' s p o l i c i e s and programs. In 1960 fewer, than 5 percent of Papua New Guineans l i v e d i n urban areas; by 1971, however, t h i s f i g u r e had r i s e n t o 10 percent and by 1980 to 13 percent. When the f a c t i s taken i n t o account t h a t Papua New Guinea's t o t a l p o p u l a t i o n has grown at an average annual rate of about 2.3 percent during the pe r i o d 1966-1980, I t becomes apparent that i t s urban population has grown at a phenomenal r a t e during these 14 years. The compound growth rates of each of the main urban centers of Papua New Guinea f o r the periods 1966-1971 and 1971-1980 are d e t a i l e d i n Table 2.2.

Rapid u r b a n i z a t i o n has r e s u l t e d i n at l e a s t three problems: urban unemployment, s o c i a l unrest, and a narrowing of the e c o l o g i c a l base i n and around the l a r g e r urban settlements. As e a r l y as 1973-74 there was a s i g n i f i c a n t p r o p o r t i o n of Involuntary urban unemployment (Garnaut and c u r t a i n 1977); s i n c e then the modern urban sector has f a i l e d t o grow anywhere nearby as f a s t as has the s i z e of Papua New Guinea's work f o r c e . Many of Papua New Guinea's out-of-school youth are among the growing pool of urban unemployed. Having been through a we s t e r n - s t y l e educational system, i n which a s p i r a t i o n s have been focused on modern sector wage employment the young educated Papua New Guineans tend to be d i s i l l u s i o n e d w ith subsistence a g r i c u l t u r e as a way of l i f e . Some have r e s o r t e d t o crime i n order to remain i n towns. Others have sought the support of urban-based r e l a t i v e s who have jobs. Many of these people, however, no longer welcome i n d i s c r i m i n a t e v i s i t i n g and use of t h e i r homes and possessions by t h e i r unemployed r e l a t i v e s (Oeser 1969; Whiteman 1973).

The steady flow of people i n t o towns has a l s o imposed heavy s t r a i n s on c i t y s e r v i c e s and f a c i l i t i e s and a l s o on i t s h i n t e r l a n d . Indeed, many low-income urban migrants have begun t o grow food f o r themselves i n the o u t s k i r t s of towns because they are unable to f i n d wage employment. They have a l s o continued to r e l y on firewood f o r cooking, which they scavenge from i n d u s t r i a l s i t e s and the surrounding h i l l s . These p r a c t i c e s have l e d to severe d e f o r e s t a t i o n i n and around the two l a r g e s t urban areas of Port Moresby (Gamser 1979) and Lae ( H a r r i s 1978).

Growing Inequalities Between Urban and Rural People

The A u s t r a l i a n a d m i n i s t r a t i o n of 1950-75 adopted a macroeconomic planning approach i n which o v e r a l l growth and s e c t o r a l development

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Table 2.2. Urban p o p u l a t i o n changes: Papua New Guinea 1966-80

Urban center 1966-71 (% change)

1971-80 (% change)

Port Moresby 10.8 5.9 Lae 15.9 6.7 Madang 10.4 3.4 Kieta/Arawa/Panguna 78.4 4.9 HewaX 5.8 4.2 Goroka , 9.8 4.4 Rabaul 2.9 2.5 Mt. Hagen 12.1 7.3

Average a 18.0 4.9

Source: N a t i o n a l S t a t i s t i c s O f f i c e , Port Moresby, Research Monograph No. 1, 1980*

a. Census Analyst John Harding considered t h a t there were major l e v e l s of underenumeration i n the 1971 Census r e l a t i v e t o the 1966 Census. I f the 1971 f i g u r e s are adjusted a c c o r d i n g l y the 1966-71 annual growth rate shown here I s reduced by up t o a few percentage p o i n t s and the 1971-81 annual growth r a t e i s r a s i e d by up t o a few percentage p o i n t s . Harding concluded t h a t i n the t o t a l urban boundary used i n 1980, the average growth rate was 7.3 percent f o r the p e r i o d 1976-80.

c o n s i d e r a t i o n s were paramount. This approach to development l e d to growing I n e q u a l i t i e s between the urban and r u r a l areas of Papua New Guinea. The people who were l e f t out of A u s t r a l i a ' s development e f f o r t s — t h e r u r a l p e o p l e — h a v e become i n c r e a s i n g by conscious of t h i s d i s p a r i t y and have begun t o e x e r c i s e the s i g n i f i c a n t p o l i t i c a l power that they possess as landowners.

In Papua New Guinea most of the land i s owned by Papua New Guineans under t r a d i t i o n a l land tenure systems. These systems have o f t e n delayed pro d u c t i v e use of l a n d , p a r t i c u l a r l y f o r major n a t i o n a l development p r o j e c t s , because r u r a l people have demanded l a r g e amounts of money i n land compensation claims from the government. Rural people apparently perceive these claims as one of t h e i r few means of o b t a i n i n g a share of the b e n e f i t s of n a t i o n a l development p r o j e c t s , which have been denied them i n the past. Yet, according t o current government p o l i c y , r u r a l development i s t o be given a high p r i o r i t y i n the f u t u r e as a means of redre s s i n g u r b a n - r u r a l economic imbalances and of curbing urban d r i f t .

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Independent Papua Rev Guinea's Policies on Development, Energy, and Technology

Rational Development Goals and Objectives

When Papua New Guinea achieved self-government In December 1972, the government released a paper o u t l i n i n g e i g h t alms that emphasized s e l f - r e l i a n c e . A prime need was considered to be greater p a r t i c i p a t i o n by n a t i o n a l s i n a wide range of economic a c t i v i t i e s that was p o s s i b l e i n the preindependence era.

A more comprehensive statement of Independent Papua New Guinea's intended development path was made i n i t s N a t i o n a l Development Strategy (NDS) of October 1976 ( C e n t r a l Planning O f f i c e 1976). At the core of the NDS was the o b j e c t i v e of r u r a l development, e s p e c i a l l y i n l e s s developing areas. The NDS c a l l e d f o r an i n c r e a s i n g p r o p o r t i o n of the nation's resources to be d i r e c t e d t o r u r a l areas and advocated an enabling s e l f - h e l p approach to be taken toward r u r a l development p r o j e c t s . In f a c t , the o v e r r i d i n g p o l i c y goal of Papua New Guinea i s d e c e n t r a l i z a t i o n .

At independence the d i s t r i c t s i n t o which Papua New Guinea had been d i v i d e d by A u s t r a l i a f o r a d m i n i s t r a t i v e purposes were renamed pro v i n c e s , and arrangements f o r p r o v i n c i a l government were formulated i n 1977. The present p o l i t i c a l s t r u c t u r e thus includes three main t i e r s : a c e n t r a l government, a p r o v i n c i a l government, and some 150 to 200 l o c a l c o u n c i l s . With the i n t r o d u c t i o n of p r o v i n c i a l governments, the RIP disappeared as a separate c e n t r a l government program and was replaced w i t h a s e c t i o n a l program w i t h i n i t s N a t i o n a l P u b l i c Expenditure Plan (NPEP) f o r p r o v i n c i a l - l e v e l p r o j e c t s t h a t are of mutual I n t e r e s t to n a t i o n a l and p r o v i n c i a l governments. Table 2.3 shows how NPEP s e c t o r a l program funds were a l l o c a t e d i n 1981. Roads received the l a r g e s t p r o p o r t i o n of the funds; nonformal education took the smallest p r o p o r t i o n . Many researchers i n the education f i e l d b e l i e v e , however, that more emphasis should be placed on nonformal education. They argue that the need Is urgent to r e d i r e c t the a s p i r a t i o n s of the people and the educational system away from the formal education f o r wage employment toward Informal education f o r work i n t h e i r own communities (see Anderson 1981). The f i n d i n g s of t h i s study support t h i s argument and show that nonformal education programs are e s s e n t i a l complementary inputs t o v i l l a g e m i c r o - h y d r o e l e c t r i c i t y schemes.

Science and Technology Policy

Papua New Guinea does not yet have a c l e a r l y defined p o l i c y on science and technology. A p o l i c y can only be i n f e r r e d from documents such as the NDS that d e f i n e appropriate t e c h n o l o g i e s — " a p p r o p r i a t e i n the sense of being adaptable to l o c a l s k i l l s ; f i t t i n g i n w i t h l o c a l customs; using p r i m a r i l y l o c a l m a t e r i a l s ; r e l y i n g on l o c a l c o n t r o l and i n i t i a t i v e s " (NDS, p. 2 5 ) — a n d advocate t h e i r use.

The task of t r a n s l a t i n g the NDS d e f i n i t i o n of appropriate technology f e l l to the v a r i o u s o r g a n i z a t i o n s i n v o l v e d i n science and technology a c t i v i t i e s . The way i n which one of these o r g a n i z a t i o n s , the Energy Planning Unit (EPU) of the Department of Minerals and Energy, has

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Table 2.3. NPEP s e c t o r a l program fund a l l o c a t i o n s : f i s c a l 1981

S e c t o r a l Program T o t a l Expenditure %

Rural Transport - Roads Primary Education Health A g r i c u l t u r e / L l v e s t o c k / F i s h e r y / F o r e s t Secondary Education Border Development Less Developed Areas Small Business Food Crops Improved A d m i n i s t r a t i o n Non-formal Education

3,500,000 3,068,000 3,000,000 2,298,263 1,331,900 1,232,000 1,000,000

882,500 500,000 500,000 300,000

19.9 17.4 17.1 13.0 7.6 7.0 5.7 5.0 2.8 2.8 1.7

T o t a l 17,612,663 100.00

Source: Anderson 1981.

subsequently Interpreted t h i s d e f i n i t i o n of appropriate technology i s described below.

Energy Policy

Papua New Guinea's f i r s t White Paper on Energy, prepared by the EPU and adopted by the government i n February 1979, s t a t e s three b a s i c o b j e c t i v e s : (1) improved management of imported petroleum products to maximize b e n e f i t s of t h e i r use, (2) economic production of l o c a l l y a v a i l a b l e petroleum and renewable energy sources i n l i n e w i t h n a t i o n a l development goals, and (3) e f f e c t i v e i n t e g r a t i o n of a l l energy development and management (Department of Minerals and Energy 1979a).

Because the development and use of l o c a l l y a v a i l a b l e and mainly renewable energy resources was i d e n t i f i e d as being i n accordance w i t h Papua New Guinea's N a t i o n a l Alms and Development Strategy, the White Paper on Energy examined s y s t e m a t i c a l l y the energy options f o r each of the main s e c t o r s of the economy. With regard to r u r a l areas the paper devoted extensive a t t e n t i o n to RE because i n recent years p o l i t i c i a n s have f r e q u e n t l y requested that a master plan be formulated f o r RE and Implemented immediately.

The Question of Rural Electrification

P o l i t i c i a n s have argued that RE i s c o n s i s t e n t with Papua New Guinea's NDS and. In p a r t i c u l a r , with the t h i r d and f o u r t h aims of the eight aims i t s development goals. Aims three and four can be summarized as f o l l o w s : d e c e n t r a l i z e d economic a c t i v i t y with an emphasis on a g r i c u l t u r a l development and v i l l a g e i n d u s t r y and improvements i n s o c i a l f a c i l i t i e s and

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hence the q u a l i t y of l i f e of r u r a l people. When the EPU examined RE goals with respect to n a t i o n a l goals, however, i t was not convinced that e l e c t r i c i t y , p a r t i c u l a r l y at the v i l l a g e l e v e l , was a high p r i o r i t y development o p t i o n . The EPU'6 t h i n k i n g on RE, as o u t l i n e d i n the White Paper on Energy, i s summarized below.

RE and National Development Goals

In c o n s i d e r i n g the question of what RE should achieve i n r e l a t i o n t o the country's n a t i o n a l development s t r a t e g y , the EPU kept two t h i n g s i n mind. F i r s t , RE i s a c a p i t a l extensive development o p t i o n , and second, i t i s l i k e l y to be a c o n t i n u i n g expense to the government because the incomes of r u r a l people are low and they w i l l not be able to repay a s u b s t a n t i a l p r o p o r t i o n of the Investment.

The f i r s t o b s ervation i n the White Paper on energy was t h a t i n r u r a l areas few tasks are c u r r e n t l y being performed f o r which e l e c t r i c i t y i s a t e c h n i c a l l y and economically e f f i c i e n t energy form. E l e c t r i c i t y i s i n a p p r o p r i a t e f o r use i n cooking, heati n g , and t r a n s p o r t a t i o n — t h e three main energy requirements i n r u r a l Papua New Guinea. Apart from cooking, heating, and t r a n s p o r t a t i o n uses, the p r e v a i l i n g demand i n r u r a l areas f o r a l l types of energy i s low. Few i n d u s t r i e s are l o c a t e d i n r u r a l areas. In Papua New Guinea, t h e r e f o r e , RE w i l l probably need t o be p a r t of a comprehensive development program f o r r u r a l i n d u s t r i e s i f i t i s t o be used f o r productive purposes. The experience of other developing c o u n t r i e s i n A s i a and C e n t r a l America shown t h a t the mere a v a i l a b i l i t y of RE seldom s t i m u l a t e s r u r a l i n d u s t r y where none had p r e v i o u s l y e x i s t e d .

The second observation was that problems regarding marketing, c r e d i t , and l e v e l of s k i l l s might need t o be res o l v e d before a RE p r o j e c t could become a wise investment because these f a c t o r s appear t o hamper r u r a l i n d u s t r i a l development at l e a s t as much as the l a c k of an RE power source.

The t h i r d observation was that many r u r a l areas s t i l l l ack adequate b a s i c s e r v i c e s i n the areas of h e a l t h , education, communication, and t r a n s p o r t a t i o n and that that r u r a l people, i f given the choice, might pla c e a higher development p r i o r i t y on p r o j e c t s d i r e c t l y designed t o improve these s e r v i c e s than on e l e c t r i f i c a t i o n p r o j e c t s .

On the b a s i s these observations the White Paper on Energy recommended ca u t i o n w i t h regard to the RE o p t i o n , a recommendation which i s r e a f f i r m e d by the f i n d i n g s of t h i s case study.

RE: Choice of Technology

The White Paper on Energy emphasized the use of renewable energy resources i n RE p r o j e c t s . I t gave a t t e n t i o n t o s i x techniques f o r generating e l e c t r i c i t y from renewable energy resources: (1) biogas, (2) wind s e t s , (3) s o l a r t u r b i n e s , (4) g a s i f i c a t i o n of wood f u e l s , (5) p h o t o v o l t a l c s , and (6) micro-hyrdopower systems. The biogas o p t i o n was dismissed because experience i n Papua New Guinea has shown a range of t e c h n i c a l b a r r i e r s to the use of biogas at the v i l l a g e l e v e l (see Newcombe 1981). (Option Wind Sets 2) were not considered to be l i k e l y t o make a

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major c o n t r i b u t i o n t o the country's RE program because wind i s comparatively l o c a l i z e d i n Papua New Guinea. Option 3 — s o l a r t u r b i n e s — w a s considered s e r i o u s l y but thus f a r has not been ap p l i e d i n Papua New Guinea. The g a s i f i c a t i o n of wood and coconut residues (option 4) t o produce gas t o s u b s t i t u t e f o r d i e s e l f u e l i n small d i e s e l sets was encouraged as part of a diesel-replacement program. Option 5 — p h o t o v o l t a i c s (PVs)—was considered the most a t t r a c t i v e of the options f o r use In v i l l a g e s because the c h a r a c t e r i s t i c s of PVs are w e l l s u i t e d t o l o c a l c o n d i t i o n s and can meet the a n t i c i p a t e d s m all demand f o r e l e c t r i c i t y i n r u r a l v i l l a g e s . Option 6 — m i c r o hydropower—was a l s o considered to be h i g h l y a p p l i c a b l e . However, desp i t e Papua New Guinea's l a r g e hydropower p o t e n t i a l , the White Paper on Energy expressed c a u t i o n with regard to micro-hydro technology u n t i l i t s c o s t s had been determined under l o c a l c o n d i t i o n s .

RBz Choice of Institutional Arrangements

Although the Papua New Guinea government has recognized the need f o r c o o r d i n a t i o n o f energy plans and p o l i c i e s , and toward t h i s end has e s t a b l i s h e d the EPU w i t h i n i t s Department of Minerals and Energy, i t does not yet have a s i n g l e i n s t i t u t i o n that i s p r i m a r i l y r e s p o n s i b l e f o r RE. Rather, the i n i t i a t i v e f o r RE has been assumed separately by four government-related i n s t i t u t i o n s : the Department of Finance, the Papua New Guinea E l e c t r i c i t y Commission (ELCOM), the U n i v e r s i t y of Technology (UNITECH), and, most r e c e n t l y , the EPU i t s e l f , which has i n i t i a t e d many of the demonstration RE p r o j e c t s based on renewable energy resources. In a d d i t i o n , many p r i v a t e o r g a n i z a t i o n s (and mainly missions) have planned, b u i l t , and run RE p r o j e c t s f o r t h e i r own use.

The Department of Finance's RE program began about 35 years ago. I t attempted t o provide some home comforts t o i t s c o l o n i a l o f f i c e r s s t a t i o n e d then i n r u r a l areas and to supply e l e c t r i c i t y t o h o s p i t a l s and a g r i c u l t u r a l and f o r e s t r y s t a t i o n s . There are now 132 RE systems, a l l but one of which i s based on d i e s e l power, loc a t e d at d i s t r i c t and s u b d i s t r l c t a d m i n i s t r a t i v e centers throughout the country; they are the r e s p o n s i b i l i t y of the Department of Finance but are designed, constructed, and maintained by ELCOM with the as s i s t a n c e of the Department of Works and Supply.

In 1975 ELCOM became d i r e c t l y Involved i n RE, and, as a r e s u l t of p o l i t i c a l i n t e r e s t i n RE, ELCOM sponsored an RE study i n the P h i l i p p i n e s and i n Taiwan as a b a s i s f o r formulating p o l i c y g u i d e l i n e s f o r Papua New Guinea's own program (Dwyer 1975). Subsequently i n 1977 a p r o v i n c i a l minl-hydropower p r o j e c t was begun, with ELCOM as the executive agency. In 1981, however, ELCOM reviewed i t s p o s i t i o n i n r e l a t i o n t o m i n i - h y d r o e l e c t r i c schemes and to RE i n general. ELCOM noted that by undertaking t o design and construct mini-hydro schemes, i t s l i m i t e d resources had been severely constrained. Thus i n the Commissioner's P o l i c y Paper of J u l y 1981, ELCOM reversed i t s stand and suggested that i t would l i m i t i t s involvement i n RE to p r o v i d i n g maintenance s e r v i c e s and c o l l e c t i n g revenues on a f e e - f o r - s e r v i c e b a s i s . Even the p r o v i s i o n of maintenance s e r v i c e s on RE p r o j e c t s , however, presents d i f f i c u l t i e s f o r ELCOM. Despite i t s recruitment and t r a i n i n g programs, ELCOM has experienced d i f f i c u l t y i n keeping pace with the maintenance and upgrading required on i t s urban e l e c t r i c i t y systems, which have developed at a f a s t

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pace due to r a p i d u r b a n i z a t i o n during the 1960s and 1970s (see Asian Development Bank, 1977a & 1977b).

In l a t e 1975 f o l l o w i n g a one-day seminar on RE UNITECH a l s o took up the i n i t i a t i v e f o r RE. UNITECH decided to focus I t s a t t e n t i o n on the supply of e l e c t r i c i t y to I s o l a t e d r u r a l v i l l a g e s w i t h no p o s s i b i l i t y of r e c e i v i n g an ELCOM supply and, s p e c i f i c a l l y on the micro-hydro t e c h n o l o g i c a l a l t e r n a t i v e and the l o c a l management or s e l f - h e l p approach to RE. A group of 14 v i l l a g e s i n the remote Nabak region of Morobe province was the f i r s t to respond to UNITECH's proposal. They e v e n t u a l l y became invol v e d i n Papua New Guinea's f i r s t demonstration m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , known as the Umbang-Baindoang p r o j e c t , the focus of t h i s study. UNITECH, l i k e ELCOM, has had d i f f i c u l t y meeting the s k i l l e d manpower requirements of RE w i l l be c l e a r l y shown. To be s u c c e s s f u l , f u t u r e RE p r o j e c t s w i l l r e q u i r e the coordinated Inputs of many government and non-government agencies.

Summary

Papua New Guinea's general p a t t e r n of economic and s o c i a l development has been biased toward urban areas, however, si n c e independence, r u r a l development has been emphasized. Many p o l i t i c i a n s i n Papua New Guinea b e l i e v e that RE i s an important component of a balanced r u r a l development s t r a t e g y , and those i n s t i t u t i o n s p r e s e n t l y involved i n RE p r o j e c t s have tended t o favor the d i e s e l and hydropower t e c h n o l o g i c a l a l t e r n a t i v e s — w i t h the exception of the Department of M i n e r a l s and Energy's EPU. Having reached fundamentally d i f f e r e n t conclusions w i t h regard t o RE, the EPU has urged cautious and c a r e f u l c o n s i d e r a t i o n of each request f o r RE because i t i s not convinced that RE i s v a l i d i n the context of r u r a l Papua New Guinea. The EPU a l s o has expressed c a u t i o n regarding hydropower technology.

To help planners i n Papua New Guinea t o determine the r o l e that RE, and micro-hydro power i n p a r t i c u l a r , can p l a y as part of a balanced r u r a l energy development p o l i c y , t h i s report provides information on the scope of Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t and i t s a s s o c i a t e d s o c i a l and economic impacts.

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CHAPTER 3

UMBANG-BAIHDQANG MICRO-HYDROELECTRIC PROJECT: STAGE 1

Stage 1 of the Dmbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was a j o i n t venture between UNITECH, Lae, and the people of the fourteen v i l l a g e s of the Umbang re g i o n . Lae and Umbang are both i n the province of Morobe. Although they are 40 km apart, they are not l i n k e d by road.

The fourteen v i l l a g e s of the Umbang region l i e i n a c e n t r a l p o s i t i o n among a t o t a l of t h i r t y - t h r e e v i l l a g e s of the Nabak language group. The Nabak Region i s one of four census d i v i s i o n s of the Nawae L o c a l Government Co u n c i l centered on Boana (see Figure 3.1). The main events t h a t have taken p l a c e i n the recent h i s t o r y of the Umbang region are l i s t e d i n Table 3*1. I t I s necessary t o e s t a b l i s h how the f i r s t stage of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t r e l a t e d t o other events t h a t had occurred and were o c c u r r i n g i n the Umbang region because the timi n g of RE v i s - a - v i s other community development p r o j e c t s i s c r u c i a l .

The uabang Region of Morobe Provinces The Setting for Stage 1

As i n d i c a t e d i n Table 3.1, Lutheran mission workers, the A u s t r a l i a n c o l o n i a l a d m i n i s t r a t i o n , and l o c a l innovators have been the main agents o f change I n the Nabak r e g i o n . Lutheran m i s s i o n workers a r r i v e d around 1917, and t h e i r i n f l u e n c e has remained strong t o the present. The Lutherans, i n p a r t i c u l a r a German Lutheran missionary who was appointed t o Nawae i n 1935, e f f e c t e d major s o c i a l and economic changes i n the re g i o n . The missionary organized the c o n s t r u c t i o n of Boana a i r s t r i p w i t h the help of l o c a l l a b o r . He Introduced and advised on the production of European vegetables and Arabian c o f f e e as cash crops and arranged markets f o r these crops f o r

A f t e r the war, the A u s t r a l i a n a d m i n i s t r a t i o n entered the reg i o n and, through i t s r u r a l extension programs, began t o promote f u r t h e r s o c i a l and economic changes. However, the economic programs of the a d m i n i s t r a t i o n ( c o f f e e as a cash crop) had minimal e f f e c t s on the region u n t i l the mid-1960s when the l o c a l people began t o i n i t i a t e community development p r o j e c t s at the r e g i o n a l l e v e l .

In 1965 the Nabak people were f o r m a l l y i n t e g r a t e d i n t o a l a r g e r p o l i t i c a l system, the Nawae L o c a l Government C o u n c i l . This event marked the s t a r t of l o c a l t a x a t i o n and formed the f i r s t formal channel through which the Nabak people could seek f i n a n c i a l a s s i s t a n c e f o r community development p r o j e c t s . The people took advantage of t h i s o p p o r t u n i t y immediately and began t o b u i l d a i r s t r i p s and r e g i o n a l c e n t e r s . Their involvement i n the establishment of Boana had provided them w i t h the r e q u i s i t e work experience; In f a c t , Boana provided a u s e f u l model.

The people of the Umbang region were the le a d i n g group i n these r e g i o n a l developments. As noted i n Table 3.1, between 1965 and 1967 they helped t o b u i l d Kasahombe a i r s t r i p , and then i n 1971 the people of the fourteen v i l l a g e s l o c a t e d i n the Yanem River V a l l e y s t a r t e d work on an a i r s t r i p i n Umbang (see Figure 3.1).

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Nawae Census Division

Subdivisions: 1 Wain 2 Erap 3 Nabak 4 Momalili

Table 3.1. Main events i n the recent h i s t o r y of the Umbang region

1917 F i r s t contact by PNG Lutheran e v a n g e l i s t s .

1930s A few f l e e t i n g v i s i t s by labor r e c r u i t e r s .

1933 A German Lutheran missionary i s appointed t o Nawae. Boana i s e s t a b l i s h e d as the mission's headquarters.

1935 Boana a i r s t r i p i s b u i l t . European vegetables and c o f f e e are Introduced as cash crops.

193 9-45 Japanese and A u s t r a l i a n s o l d i e r s t r a v e l through the reg i o n .

1954 s t a r t of the A u s t r a l i a n a d m i n i s t r a t i o n ' s r u r a l development program. Coffee i s introduced as a cash crop. Health f a c i l i t i e s are e s t a b l i s h e d .

1965 The Nawae L o c a l Government Council Is e s t a b l i s h e d . The people begin work on Kasanombe a i r s t r i p .

1967 Kasanombe a i r s t r i p opens.

1971-72 A government primary school Is e s t a b l i s h e d i n Baindoang v i l l a g e *

1972 The people begin work on Umbang a i r s t r i p .

1975 Umbang a i r s t r i p opens, and Baindoang's government primary school i s r e l o c a t e d to Umbang. The people begin t o e s t a b l i s h t r a d e s t o r e s adjacent to the s t r i p . They a l s o I n i t i a t e Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t .

1979 Umbang Regional Centre r e c e i v e s e l e c t r i c i t y . Plans are l a i d t o transmit e l e c t r i c i t y t o Baindoang v i l l a g e .

1980 Baindoang v i l l a g e r e c e i v e s e l e c t r i c i t y .

1981 An a g r i c u l t u r a l depot i s e s t a b l i s h e d at the Umbang Regional Centre.

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The fourteen v i l l a g e s of the Yanem River V a l l e y are Baindoang, Ankamap, Arkandar, Awen, Hanobman, Ko t i e n , Tukwambet, Kiakum, Mogom, Sakarang, S i l i m b i n g , Seperangabeng, Tuwep, and Quamben. These v i l l a g e s l i e i n the rugged mountain ranges on e i t h e r s i d e of the Yanem River and are l i n k e d by a network of footpaths and f o o t b r i d g e s . The walk from Umbang t o Baindoang, the c l o s e s t v i l l a g e , takes from 45 t o 60 minutes; the walk across the Yanem Roiver to the most o u t l y i n g of these v i l l a g e s taks from three to four hours (see Figure 3.2).

Not only i s Baindoang the c l o s e s t v i l l a g e to Umbang but i t i s a l s o the home of the leaders who i n i t i a t e d the a i r s t r i p p r o j e c t i n Umbang and of the t r a d i t i o n a l landowners i n Umbang. Umbang was chosen as a s i t e f o r an a i r s t r i p because i t i s the only f l a t land i n the whole of the Yanem River V a l l e y . In e f f e c t , the t r a d i t i o n a l landowners of Umbang f o r f e i t e d the land to serve the i n t e r e s t s of the fourteen v i l l a g e r s ( h e r e a f t e r r e f e r r e d t o as the Umbang Community Group. These f a c t s are mentioned here because they Influenced the Baindoang peoples' perceptions of the r o l e they should p l a y i n community p r o j e c t s i n Umbang, i n c l u d i n g the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t .

The Umbang Community Group spent three years (1972-75) b u i l d i n g an a i r s t r i p at Umbang. In 1975 the l o c a l people undertook t h e i r second community s e l f - h e l p development p r o j e c t , the establishment of a government primary school on a s i t e adjacent to the s t r i p . In e f f e c t , the b u i l d i n g of the Umbang Community School marked the establishment of the Umbang Regional Centre. I t was i n 1975 that r e p r e s e n t a t i v e s of the E l e c t r i c a l and Communication Engineering Department (ECED) of UNITECH a r r i v e d i n Umbang and were t o l d by the leaders of the Umbang Community Group t h a t one of t h e i r primary needs was the p r o v i s i o n of e l e c t r i c i t y t o t h e i r r e g i o n a l center. The center then included two tr a d e s t o r e s i n a d d i t i o n t o the Umbang Community School, but i t was expected e v e n t u a l l y to Include a h e a l t h a i d post, an emergency r a d i o , an a g r i c u l t u r a l depot, and a community workshop or v o c a t i o n a l center. The community development p r o j e c t s that the Umbang Community Group wished t o e s t a b l i s h i n Umbang are l i s t e d i n Table 3.2.

Goals and Objectives for Stage 1 of the El e c t r i c i t y Project

The Villagers" Expectations

Although the people of the Umbang Community Group proved t o be e n t h u s i a s t i c about a m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , i t i s noteworthy that they would not have requested i t of t h e i r own accord. They had given no thought to e l e c t r i c i t y as a development o p t i o n f o r themselves u n t i l t h e i r schoolteacher f r i e n d , Mr. Y, explained to them that i t was p o s s i b l e to generate e l e c t r i c i t y from t h e i r water resources and th a t he had heard on the r a d i o t h a t the ECED was o f f e r i n g t e c h n i c a l a s s i s t a n c e f o r the p r o j e c t . The conception o f Stage 1 of the p r o j e c t can be a t t r i b u t e d wholly to Mr. Y. He understood the p r i n c i p l e s of e l e c t r i c i t y , owned a r a d i o t h a t had provided him with inf o r m a t i o n on r e l e v a n t events i n the ou t s i d e world, had a b r i g h t i n n o v a t i v e p e r s o n a l i t y , and was e d u c a t e d — a t t r i b u t e s t h a t enabled him to w r i t e to the ECED on behalf of the v i l l a g e r s .

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H

Figure 3.2 Map showing the fourteen villages of the Umbang region.

Table 3.2. Requests made to and as s i s t a n c e r e c e i v e d from non-local o r g a n i z a t i o n s f o r community p r o j e c t s i n Umbang, 1971-81 I n c l u s i v e

I n s t i t u t i o n t o whom the

Assistance request was Ass i s t a n c e P r o j e c t Year sought made rece i v e d L o c a l input

A i r s t r i p 1971-72 Equipment food

Nawae C o u n c i l , Boana, Morobe province

Kl,600 Labor f o r c i v i l works

Aid post On many occa­sions s i n c e 1972

Permanent m a t e r i a l s a i d post plus a i d post order­l i e s

Nawae None A bush m a t e r i a l s -house f o r nurses was donated In 1980—not approved by Nawae L o c a l C o u n c i l

A i r s t r i p 1976 on­wards

Lawn mower Nawae None

Land on which r e g i o n a l centre b u i l t *

s i n c e 1976 on many occa­sions

Compensa­t i o n t o t r a d i t i o n a l landowners

Nawae Only a survey was done

In e f f e c t , the land f o r f e i t e d f o r Umbang a i r ­s t r i p and Umbang Regional Centre

School 1975 Double per­manent m a t e r i a l s classroom

Nawae R2,000 + s k i l l e d labor

Labor + perhaps some money

E l e c t r i c i t y 1976 Micro-hydro- U n i v e r s i t y f a c i l i t y t o of Techno-e l e c t r i f y Umbang

logy (UNITECH), Lae

K10,000 + s k i l l e d labor

K1,000 p l u s un­s k i l l e d l a b o r

A i r s t r i p 1976 Government chartered planes

UNITECH None

School 1976 Reaffores­t a t i o n pro­gram

UNITECH seedlings

Advice and Labor

(cont.)

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Table 3.2. (contd.)

I n s t i t u t i o n t o whom the

Assistance request was Assistance P r o j ect Year sought made received L o c a l input

School 1978 1 Permanent Nawae K1000 p l u s R1,000 p l u s labor m a t e r i a l s s k i l l e d classroom labor

School 1980 1 Permanent Nawae K1000 p l u s K1000 p l u s labor m a t e r i a l s s k i l l e d classroom labor

V o c a t i o n a l 197 9 B u i l d i n g & UNITECH None center t r a i n i n g

s t a f f Yanem River 1980 Permanent Nawae M a t e r i a l s Some m a t e r i a l s + Bridge m a t e r i a l s + s k i l l e d u n s k i l l e d l a b o r

bridge labor

A g r i c u l ­ 1981 Permanent Department K2,000 p l u s Labor t u r a l * depot m a t e r i a l s of Primary s k i l l e d

house f o r a Industry labor f o r new region­ Port house and a l a g r i c u l ­ Moresby wages f o r t u r a l agr i c u l -o f f i c e r t u r a l

o f f i c e r E l e c t r i c i t y 1979 Assistance Department K12,000 + U n s k i l l e d labor

given f o r of Mi n e r a l s s k i l l e d Hv + Lv and Energy, labor transmis­ Port s i o n l i n e s Moresby + f o r UNITECH Baindoang v i l l a g e

E l e c t r i c i t y * 1980 Money f o r Nawae None l i g h t i n g w i t h i n Baindoang v i l l a g e

Youth group 1979 Sports Rural Youth None equipment

1980 Proj ector Movement None 1980 Lawnmower Program, None

Dept. Com­munity & Family Services

Source: Interviews w i t h members of the Umbang Community Group and the r e l e v a n t n o n l o c a l I n s t i t u t i o n s .

•Requests made by one Baindoang community alone.

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The presence of an i n d i v i d u a l l i k e Mr. Y i n the Umbang region was a necessary p r e c o n d i t i o n f o r the d i f f u s i o n of micro-hydro technology. The v i l l a g e r s t r u s t e d Mr. Y; t h i s was important because they were to r e l y on him f o r i n f o r m a t i o n on p r o j e c t requirements. They themselves had l i t t l e understanding of what the p r o j e c t was t o encompass and consequently of what i t s impacts might be. During the course of f i e l d w o r k f o r t h i s study, the author found that the v i l l a g e r s had become e n t h u s i a s t i c about Stage 1 of the p r o j e c t f o r at l e a s t f i v e reasons, because:

They respected Mr. Y.

They perceived e l e c t r i c l i g h t i n g f o r t h e i r school ( f i r s t p r i o r i t y use) as being b e n e f i c i a l to t h e i r c h i l d r e n ' s education and t o the community i n general; they hoped t h i s amenity would encourage good teachers ( l i k e Mr. Y) who helped the community to stay In Umbang.

They b e l i e v e d the p r o j e c t would be p r o f i t a b l e .

They had a p r e d i s p o s i t i o n t o take r i s k s and commit themselves t o a new p r o j e c t on a long-term b a s i s ; i n other words, t h e i r group s p i r i t which had become an e f f e c t i v e f o r c e f o r s o c i a l change, and

The people perceived e l e c t r i c i t y to be a p r e s t i g e commodity: I t was European i n o r i g i n and g e n e r a l l y only a v a i l a b l e to a few p r l v i l i g e d Papua New Guineans l i v i n g i n the main towns of the country.

According to R. Okona (1978, p. 12), "the v i l l a g e people say t h a t i f i t were not f o r the power p r o j e c t , Baindoang would s t i l l be an i s o l a t e d and l i t t l e - k n o w n v i l l a g e up In the mountains. They are very proud of the f a c t that Baindoang i s now one of the best-known v i l l a g e s i n the country. Some say that they want t o show others what i t i s p o s s i b l e to do through t h e i r own e f f o r t s . They are a l s o very g r a t e f u l f o r the f a c t that the U n i v e r s i t y of Technology i s i n Lae. They b e l i e v e that i f the U n i v e r s i t y was i n some other area, then they might not have had the change to b r i n g e l e c t r i c i t y i n t o t h e i r v i l l a g e . "

The UNITECH's Objectives

From the p e r s p e c t i v e of the s t a f f of the UNITECH, stage 1 of the Umbang-Baindoang m i c r o - h y d o r e l e c t r i c l t y p r o j e c t was a research and development p r o j e c t . They agreed to provide t e c h n i c a l a s s i s t a n c e f o r the p r o j e c t based on the f o l l o w i n g s i x f a c t s :

The v i l l a g e r s had requested the p r o j e c t .

The v i l l a g e r s were e n t h u s i a s t i c about i t .

The v i l l a g e r s had already demonstrated t h e i r a b i l i t y to work c o o p e r a t i v e l y .

25

PIDP/RSI

The v i l l a g e r s were w i l l i n g t o c o n t r i b u t e both money toward the p r o j e c t ' s c a p i t a l c o s t s and f r e e labor f o r i t s Implementation and eventual management.

The p r o j e c t was t o be part of an Integrated l o c a l r e g i o n a l development program. This s a t i s f i e d the aim that the b e n e f i t s of the p r o j e c t be shared by as many people as p o s s i b l e , t h a t i s , by a l l f ourteen v i l l a g e s s e r v i c e d by Umbang. As shown i n Table 3*3, the t o t a l p o p u l a t i o n of the fourteen v i l l a g e s was approximately 4,700, of whom about 2,700 l i v e d i n t h e i r r e s p e c t i v e v i l l a g e s and about 2,000 l i v e d elsewhere, mainly i n the three towns of Lae, Port Moresby, and Rabaul.

The p h y s i c a l c h a r a c t e r i s t i c s of the s i t e were such t h a t the s t a f f members of ECED were able to design a micro-hydro scheme i n accordance w i t h t h e i r p r e v i o u s l y determined design c r i t e r i a (Woodward and Woodward 197 5 ) .

Project Design v

Stage 1 of the Umbang-Baindoang r u r a l e l e c t r i f i c a t i o n had the f o l l o w i n g design f e a t u r e s : the high-head r u n - o f - t h e - r i v e r micro-hydro scheme had an estimated continuous output of 7.2 kW. The storage dam was a small earth dam f i l l e d w i t h a suction-type scour d r a i n t o f a c i l i t a t e removal of s i l t . The c i v i l works were simple, and the penstock, which conveyef the water from the dam to the powerhouse, was constructed of FVC p i p i n g . The powerhouse was l o c a t e d c l o s e to the p o i n t of demand, the Umbang Regional Centre. Consequently, low-voltage d i s t r i b u t i o n l i n e s o nly were r e q u i r e d and were i n s t a l l e d underground. The t u r b i n e and generator were imported from a reputable overseas manufacturer ( G i l k e s , England). The conventional mechanical governor was omitted i n favor of a much cheaper unconventional governing system, u t i l i z i n g a hot water system (see I n v e r s i n , 1981, f o r d e t a i l s ) . This unconventional governing system was a short-term measure. I t was l a t e r replaced by a low-cost l o c a l l y designed e l e c t r o n i c governor.

F e a s i b i l i t y Studies and Project Appraisal

The f e a s i b i l i t y s t u d i e s conducted by UNITECH were designed t o demonstrate that the p r o j e c t was t e c h n i c a l l y v i a b l e and met t h e i r design c r i t e r i a , and determine that had a high l e v e l of enthusiasm f o r the p r o j e c t .

The s t a f f of UNITECH were concerned s o l e l y with keeping the i n i t i a l c o s t s of the f i x e d equipment to a minimum. They d i d not undertake an economic assessment of a l t e r n a t i v e s to the proposed microhydro scheme, but they d i d mention two t e c h n o l o g i c a l a l t e r n a t i v e s : (1) d i e s e l - g e n e r a t i n g s e t s and (2) p h o t o v o l t a i c c e l l s . Diesel-generated e l e c t r i c i t y was r e a d i l y dismissed as an o p t i o n the r i s i n g costs of d i e s e l f u e l and the problems a s s o c i a t e d w i t h m a i ntaining t h i s technology i n a remote r u r a l s i t u a t i o n . P h o t o v o l t a i c s were recognized as a p o s s i b i l i t y , but at the time the microhydro p r o j e c t i n Umbang was s t a r t e d i n 1975, the cost of PVs was considered t o be p r o h i b i t i v e . In any case, PVs were not a v a i l a b l e commercially at that time i n Papua New Guinea (Arata 1979).

26

PIDP/RSI

Table 3.3 Recent po p u l a t i o n data f o r the fourteen v i l l a g e s of the Umbang region

V i l l a g e P o p u lation

1978 Resident

1978 Absent

1980 Resident

South Yanem River Valley

1 Arkandar 2 Awen 3 Ankamap 4 Baindoang 5 Hanobman . 6 Kotien or Kwambaleng 7 Tukwambet

128 298 305 369 93

172 164

148 197 192 189 135 161 160

104 283 228 308 84

139 125

North Yanem River Valley

8 Kiakum 9 Mogom

10 Sakarang 11 Sillmbeng 12 Seperangabeng 13 Tuwep 14 Quamben or Yalumbeng

224 110 26 2 171 291 174 138

92 51

115 55

144 90 69

202 84

224 140 286 150 133

T o t a l 2,899 1,798 2,498

Source: N a t i o n a l Population Census, 1980; Morobe Province P o p u l a t i o n Census, 1978.

From the beginning of Stage 1, the 7.2 kW of e l e c t r i c i t y t o be supp l i e d t o the r e g i o n a l center i n Umbang was envisaged by the UNITECH s t a f f t o be used mainly f o r s o c i a l purposes (and b e n e f i t s ) I n c l u d i n g l i g h t i n g , r e f r i g e r a t i o n and heating water but p o s s i b l y a l s o f o r pro d u c t i v e purposes, such r e f r i g e r a t i n g commercial goods. In p r e d i c t i n g the f u t u r e demand f o r e l e c t r i c i t y i n the umbang Regional Centre they took i n t o account the l o c a l peoples a n t i c i p a t i o n that the center e v e n t u a l l y would i n c l u d e . extension s e r v i c e s i n the areas of education, h e a l t h , and a g r i c u l t u r e . In a d d i t i o n t o the commercial operations run by the tr a d e s t o r e cooperatives (Woodward and Woodward 1975). The UNITEQI s t a f f , however, d i d not attempt to a s c e r t a i n when each of these proposed r u r a l i n f r a s t r u c t u r e p r o j e c t s would be e s t a b l i s h e d i n the f u t u r e and thus when the f u l l r e venue-raising p o t e n t i a l of the microhydro scheme would be r e a l i z e d . In a l l p r o b a b i l i t y UNITECH was In t e r e s t e d only that the scheme generate s u f f i c i e n t revenue to

27

PIDP/RSI

cover i t s r e l a t i v e l y s m all o p e r a t i o n a l and maintenance c o s t s . However, the p r o j e c t f e a s i b i l i t y s t u d i e s d i d not assess the f i n a n c i a l performance of the proj e c t .

Front-end Project Requirements and How They were Met

A m i c r o - h y d r o e l e c t r i c i t y p r o j e c t has two n a t u r a l resource requirements: land and water. I t a l s o r e q u i r e s c a p i t a l t o cover equipment cos t s and s k i l l e d and u n s k i l l e d l a b o r f o r planning and implementation. Of these front-end p r o j e c t requirements the Umbang Community Group agreed t o provide the land and water, a monetary equivalent of 10 percent of equipment co s t s ( o n e - t h i r d of which was donated by v i l l a g e - b a s e d people and the r e s t as remittances from urban r e l a t i v e s ) and a l l the u n s k i l l e d l a b o r r e q u i r e d f o r the associated c i v i l works. Of these inputs the people from one v i l l a g e , Baindoang, c o n t r i b u t e d the land and the water and a p o r t i o n of the money and the u n s k i l l e d l a b o r , while t h e i r t h i r t e e n neighbors c o n t r i b u t e d money and labor only. The t a c i t agreement reached between the ECED and the v i l l a g e l e a d e r s , however, was that a l l fourteen v i l l a g e s of the Umbang Community Group would own, c o n t r o l , and have access t o the f u t u r e power supply w i t h i n t h e i r r e g i o n a l center.

UNITECH provided the s k i l l e d l a b o r f o r planning and implementation at no cost t o the v i l l a g e r s . UNITECH a l s o provided money equivalent t o 90 percent of the equipment c o s t s , which was r a i s e d from overseas donors.

Project Implementation

Two p r o j e c t managers, one from UNITECH (Mr. A) and the other from the l o c a l community (Mr. Y ) , c a r r i e d the burden of p r o j e c t implementation. The two p r o j e c t managers communicated v i a an information exchange program of the l o c a l commercial r a d i o . UNITECH s t a f f members and f i n a l - y e a r students provided the s k i l l e d and s e m i s k i l l e d l a b o r , r e s p e c t i v e l y , required f o r implementation. The l o c a l work p a r t i e s included men, women, and c h i l d r e n from the fourteen v i l l a g e s of the Umbang Community Group. At a l l times during implementation o n - s i t e s u p e r v i s i o n was provided by Mr. A or by Mr. Y with whom Mr. A had l e f t i n s t r u c t i o n s .

Mr. A and Mr. Y d i d not work t o a pre-determined timet a b l e but rather adopted an easy going p o l i c y to enable them to take stock of the process and problems t o date, and t o consider new f a c t o r s i n the planning f o r the p r o j e c t s c o n s t r u c t i o n . From the l o c a l peoples' p e r s p e c t i v e , however, the p r o j e c t was considered t o have proceeded at a r a p i d pace. According t o Okona (1978, p.12).

The a b i l i t y t o respond, however, sometimes f a l l s short of the w i l l i n g n e s s . Some of the v i l l a g e r s Indicated t o me that the r a t e of work adopted by Mr. A and Mr. Y i s j u s t too f a s t f o r them to keep up w i t h . They s a i d that although they know that hard work i s the key to success i n the p r o j e c t , at times they found i t d i f f i c u l t to cope. Despite t h i s , they s a i d t h a t they had gained a l o t from the example that these two men

had set them.

28

PIDP/RSI

The implementation phase of the p r o j e c t , i n c l u d i n g the d i s t r i b u t i o n of the e l e c t r i c i t y t o the r e g i o n a l center, took two and one-half years t o complete, from November 1976 to May 1979.

Project Operation and Management

The tasks a s s o c i a t e d w i t h operating and managing the completed p r o j e c t — p l a n t operation and simple r e p a i r s , p l a n t maintenance, t a r i f f p o l i c y f ormulation, c o l l e c t i o n and recordkeeping, and load promotion and management—were the primary r e s p o n s i b i l i t y of the l o c a l people. Once Stage 1 of the p r o j e c t became o p e r a t i v e , the ECED kept i t s involvement i n the p r o j e c t to a minimum.

Plant Operation and Simple Repairs

During the implementation phase of Stage 1 Mr. Y gained c o n s i d e r a b l e inf o r m a l on-the-job t r a i n i n g w ith regard to opera t i n g , maintaining, and making simple r e p a i r s t o the e l e c t r i c i t y scheme. The one l o c a l man among the school teachers at Umbang, Mr. D (Mr. Y was a n o n l o c a l ) , had a l s o been taught by UNITECH how to operate the p l a n t . - Mr. D and a man from the v i l l a g e of Baindoang, who had been chosen and t r a i n e d by Mr. Y, thus became the p l a n t operators and (simple) r e p a i r s o f f i c e r s . They knew only how to tu r n on and shut down the p l a n t , grease the bearings, and cl e a n the water i n t a k e areas.

Financial Management

At p r o j e c t completion (May 1979), Mr. Y a l s o accepted the r e s p o n s i b i l i t y f o r a l l aspects of the f i n a n c i a l management of the p r o j e c t , that i s , s e t t i n g and c o l l e c t i n g t a r i f f s and admin i s t e r i n g of these funds and the donations r e c e i v e d from the v i l l a g e r s . The p r o j e c t manager from UNITECH provided some a s s i s t a n c e i n these matters, he opened a savings account i n Lae and helped to formulate a simple accounting system. A l l of the other tasks were l e f t to the l o c a l people because s h o r t l y a f t e r p r o j e c t completion Mr. A l e f t Papua New Guinea: h i s c o n t r a c t had expired, and UNITECH d i d not replace him.

Mr. Y had d i f f i c u l t y t r a n s f e r r i n g h i s f i n a n c i a l manager's d u t i e s t o l o c a l people. When asked why they would not take on t h i s r o l e , the people s a i d that they were a f r a i d t o accept r e s p o n s i b i l i t y f o r monies belonging t o the wider Umbang community. E v e n t u a l l y , however, the executive members of the already e s t a b l i s h e d parent and teachers committee of the Umbang Community School agreed to act as the f i n a n c i a l managers. They set t a r i f f s according to both people's a b i l i t y to pay and t h e i r current cost of kerosene for l i g h t i n g , which was s u b s t i t u t e d by e l e c t r i c l i g h t i n g , but not according to the need to generate s u f f i c i e n t revenue to cover the f u l l o p e ration and maintenance (O+M) cos t s of the scheme. They had n e i t h e r the information on p r o j e c t costs nor the r e q u i s i t e s k i l l s t o c a r r y out a f i n a n c i a l assessment of the p r o j e c t , and, i n any case, i t was not u n t i l l a t e 1981 that the UNITECH t o l d the l o c a l people that they would have to cover the operation and maintenance costs i n the f u t u r e .

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PIDP/RSI

Summary of the Institutional Arrangements for Stage 1

Table 3.4 summarizes the way i n which UNITECH and the Umbang Community Group shared the tasks a s s o c i a t e d with planning and managing the f i r s t stage of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t .

UNITECH was r e s p o n s i b l e f o r designing the p r o j e c t , s e l e c t i n g and purchasing equipment, p r o v i d i n g the s k i l l e d manpower necessary f o r Implementation and t r a i n i n g l o c a l people to manage the p r o j e c t once i t became o p e r a t i v e , and s u p e r v i s i n g and maintaining the p l a n t . UNITECH*s t r a i n i n g program was d e f i c i e n t , however, with respect t o the t r a i n i n g needs of the l o c a l people.

The Umbang community was res p o n s i b l e f o r ensuring t h a t the p r o j e c t design met the community's development goals and p r i o r i t i e s , c o l l e c t i n g the people's cash c o n t r i b u t i o n s t o the p r o j e c t , o r g a n i z i n g l o c a l labor f o r implementation, and i d e n t i f y i n g l o c a l people who would subsequently operate and manage the scheme. The l a s t task proved d i f f i c u l t e s p e c i a l l y with regard t o f i n d i n g people t o act as f i n a n c i a l managers of the completed p r o j e c t .

E l e c t r i c i t y Use i n umbang

The stage 1 design of the p r o j e c t included the d i s t r i b u t i o n of e l e c t r i c i t y t o : a communal wash house, b u i l t as p a r t of the p r o j e c t ; an emergency r a d i o , purchased and i n s t a l l e d by the ECED as a separate e x e r c i s e to the RE p r o j e c t ; and the Umbang community scho o l , i n c l u d i n g a double classroom b u i l t of permanent m a t e r i a l s and f i v e teachers' houses. A l l other connections were made according t o l o c a l demand and a b i l i t y t o meet connection c o s t s . As of December 1981 they Included three t r a d e s t o r e s , one l o c a l v i l l a g e r ' s house, and two s t r e e t l i g h t s i n the v i c i n i t y of the school grounds. Thus, as shown i n Figure 3.3, by the end of 1981 n e a r l y a l l e x i s t i n g f a c i l i t i e s i n the r e g i o n a l center l o c a t e d adjacent t o the d i s t r i b u t i o n g r i d were connected t o the power supply.

By the end of 1981, three years a f t e r e l e c t r i c i t y had become a v a i l a b l e In Umbang, the t o t a l connected load was 6,477 watts, of which 2,852 watts were used f o r l i g h t i n g , 3,600 watts were used t o heat water at the wash house, and 25 watts were used to t r i c k l e charge a b a t t e r y t o run an emergency r a d i o (Table 3.5). O c c a s i o n a l l y power was used a l s o t o run school r a d i o s , a p r o j e c t o r (borrowed from UNITECH), and, f o r a short time, a jug (owned by one of the school teachers who was i n Umbang i n 1979-80). The p r i n c i p a l users of the e l e c t r i c i t y i n Umbang were the people who l i v e d there - schoolteachers, two l o c a l f i n a n c i a l managers of the p r o j e c t and t h e i r f a m i l i e s , and one v i l l a g e r who managed one of the t r a d e s t o r e s and h i s f a m i l y . The f a c i l i t i e s at the washhouse were a l s o used by the school c h i l d r e n (showers), the v i l l a g e women (washing c l o t h e s and showers) and the v i l l a g e men (showers). In t h a t order of frequency. However, the term " v i l l a g e people" i s not meant to inc l u d e the people from a l l fourteen v i l l a g e s i n the Umbang region. Because of dista n c e the people of seven of the v i l l a g e s i n the region (on the north s i d e of the Yanem River V a l l e y ) , r a r e l y came to Umbang, and they were not w e l l represented at the Umbang Community School. Everyone, however, b e n e f i t e d e q u a l l y from the use of the emergency r a d i o .

30

PIDP/RSI

Table 3.4. I n s t i t u t i o n a l arrangements f o r Stage 1 of the Umbang-Baindoang M i c r o - H y d r o e l e c t r i c i t y P r o j e c t

Umbang Task UNITECH Community Group

P r o j e c t i d e n t i f i c a t i o n X X

P r o j e c t f o r m u l a t i o n and design X X

F e a s i b i l i t y s t u d i e s and p r o j e c t a p p r a i s a l s

X

Financing to cover i n i t i a l c osts X X

Equipment procurement X

Implementation X X

Worker i d e n t i f i c a t i o n and t r a i n i n g X X

Plan t operation and simple r e p a i r s X

Pl a n t maintenance X

F i n a n c i a l management

T a r i f f p r i c i n g and p o l i c y Accounting, recordkeeping, and b i l l i n g Consumer r e l a t i o n s

X X X

Load management and promotion X X

Making extensions to the g r i d X

P r o j e c t monitoring and e v a l u a t i o n X

Research and development X

Note: An X i n both columns i n d i c a t e s that the task was performed j o i n t l y .

31

PIDP/RSI

Power house

Settling tank

lages in South Yanem River Valley

Wash house

0 20 40 60 80

(metres)

• •

UMBANG COMMUNITY SCHOOL

o

s s s

I I

classrooms

\ \

S I

teachers' houses

• •

\

tradestores

• airstrip m

• I | villagers' houses

•

•

Permanent buildings

— Water pipeline

Power cables

y Street lights

regional agricultural depot A*

to 7 villages in North Yanem River Valley

Figure 3.3 Umbang Regional Centre showing water and power reticulation (December 1981).

32 PIDP/RSI

Table 3.5. Uses of e l e c t r i c i t y i n Umbang: January 1982, two and one h a l f years p o s t - e l e c t r i c i t y supply

T o t a l connection T o t a l con-l i g h t i n g load nected non-

l i g h t i n g Connection Sub- load

Use date Load d e s c r i p t i o n Hatts t o t a l % watts

Wash-house' Nov 1978

Emergency r a d i o 1

School Classroom

S t r e e t l i g h t s

Teachers houses

Tradestores

3.6 kW heating element immer­sed

1 x 60W e x t e r n a l l i g h t

June 1979 25 watt b a t t e r y

Nov 1979

Nov 1981

Feb 1979

June 1979

June 1979 rewired

Sept 1980

June 197 9

June 197 9

Nov 1978

Nov 1979

60

14 x 60W bulbs 840 2 double power poi n t s

2 x 20W f l u o r e s c e n t 40

8 x 60W bulbs,

2 power p o i n t s 480

4 x 60W bulbs 240

2 x 60W bulbs

3 x 60W bulbs, 1 power switch

2 x 60W bulbs

2 x 60W bulbs

6 x 60W bulbs, 1 double power p o i n t

60 2 3600 (base load)

25

880 31

180

120

120 1130

360

40

6 x 60W bulbs, 360 1 double power p o i n t

33

PIDP/RSI

Table 3.5 contd.

T o t a l connection T o t a l con-l i g h t i n g l o a d nected non-

l i g h t i n g Connection Sub- load

Use date Load d e s c r i p t i o n Watts t o t a l % watts

3 Sept 1980 2 x 13W f l u o r e - 26 746 26 scent 1 double power p o i n t

L o c a l v i l l a g e r ' s house 1 Sept 1980 2 x 13W f l u o r e - 26 26 1

scent

T o t a l Load L i g h t i n g 2,852 N o n - l i g h t i n g 3,625

Source: O r i g i n a l f o r m u l a t i o n , a Connection c o s t s f o r . t h e s e uses were met out of the funds r a i s e d f o r Stage 1 from the v i l l a g e r s and overseas a i d donors.

34

PIDP/RSI

CHAPTER 4

EVALUATION GF STAGE 1 CP THE UKBARG-BAIHDOABG HTCRO-HZDRQELBCTRICITT PROJECT

This chapter evaluates Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t from the p e r s p e c t i v e o f , f i r s t , UNITECH, and second, the Umbang Community Group.

UNITECH's Objectives and Project Outcomes

The UNITECH 1s f i v e o b j e c t i v e s f o r Stage 1 of the p r o j e c t were:

1. To develop a microhydro scheme s u i t a b l e to l o c a l c o n d i t i o n s i n Papua New Guinea,

2. To adopt a l o c a l management approach to RE t o achieve l o c a l s e l f - r e l i a n c e ,

3. To use the p r o j e c t to provide f i n a l - y e a r engineering students w i t h p r a c t i c a l experience i n microhydro technology,

4. To promote r e g i o n a l cooperation, that i s , t o Integrate the p r o j e c t i n t o l o c a l r e g i o n a l development and to have the ( s o c i a l ) b e n e f i t s of the p r o j e c t shared by a l l fourteen v i l l a g e r e s i d e n t s i n v o l v e d i n i t ,

5. To r a i s e revenues from the p r o j e c t t o cover at l e a s t i t s o p e r a t i n g and maintenance c o s t s .

Adapting Microhydro Technology to Local Conditions

The four design c r i t e r i a that the ECED adopted were (1) maximum t h r i f t , because the income l e v e l s of the v i l l a g e r s werer low; (2) s i m p l i c i t y , because v i l l a g e r s had not had the opportunity t o acquire t e c h n i c a l s k i l l s ; (3) r e l i a b i l i t y ; and (4) acceptable, but not n e c e s s a r i l y maximal, standards of e f f i c i e n c y . While the aim of achieving higher and higher conversion e f f i c i e n c i e s makes sense i n l a r g e hydro schemes where 1 percent more or l e s s may mean s e v e r a l MW of c a p a c i t y , i t does not make sense i n microhydro schemes where a decrease i n conversion e f f i c i e n c y can br i n g about considerable savings w h i l e the amount of reduced generating c a p a c i t y remains small In absolute terms (Meier 1981).

In Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , maximum t h r i f t was p r a c t i c e d by r e l y i n g on l o c a l labor f o r the c i v i l works, by using l o c a l m a t e r i a l s wherever p o s s i b l e , by o m i t t i n g the expensive conventional h y d r a u l i c governor, and by using PVC pipe f o r the penstock (which reduces the weight of the system and hence I t s a s s o c i a t e d t r a n s p o r t a t i o n c o s t s ) . Costs were a l s o reduced by l a y i n g the d i s t r i b u t i o n l i n e s underground w i t h i n the r e g i o n a l center; underground cables proved l e s s c o s t l y than overhead cables because the v i l l a g e r s dug the trenches.

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The omission of the h y d r a u l i c or mechanical governor a l s o served to s a t i s f y the second c r i t e r i o n of s i m p l i c i t y .

R e l i a b i l i t y , however, was considered t o be the most important design c r i t e r i o n — f i r s t because c o s t s of r e p a i r s are so high i n remote l o c a t i o n s and, second, because the Image of t h i s f i r s t v i l l a g e microhydro scheme was so Important (Greenwood and P e r r e t t 1979). R e l i a b i l i t y was a l s o seen as an e s s e n t i a l p r e r e q u i s i t e to achieving s e l f - s u f f i c i e n c y . The ECED s t a f f t h e r e f o r e s e l e c t e d and purchased a conventional t u r b i n e and generator from a reputable overseas manufacturer, a choice that s i g n i f i c a n t l y increased the t o t a l c o s t s f o r Stage 1. In f a c t , the imported t u r b i n e and generator amounted t o one-half the t o t a l cost of the e n t i r e microhydro water system, causing the UNITECH s t a f f to comment:

" I f micro-hydro's are to become more a r u l e than an exception i n Papua New Guinea, c o s t s would r u l e out the use of a u n i t as was used In Umbang. At the time of that scheme, no other low-cost time-tested u n i t s were r e a d i l y a v a i l a b l e . " ( I n v e r s l n 1981, p. 4)

Thus the ECED admitted to not having s a t i s f i e d completely I t s f i r s t o b j e c t i v e : the development of a simple, r e l i a b l e , and low-cost microhydro scheme•

However, a f t e r Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t had begun, low-cost turbo-generating equipment and r e l a t i v e l y Inexpensive e l e c t r o n i c governors were developed by manufacturers i n some Asian c o u n t r i e s and a l s o i n A u s t r a l i a . The c o s t s of v a r i o u s RE technology a l t e r n a t i v e s t o microhydro energy a l s o changed. Thus the planners of f u t u r e m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s w i l l have to determine the c o n d i t i o n s under which the microhydro t e c h n o l o g i c a l o p t i o n i s the l e a s t - c o s t o p t i o n .

Enhancing Local Self-Reliance

The ECED's second o b j e c t i v e was t o adopt a l o c a l management approach to the p r o j e c t and t o achieve l o c a l s e l f - r e l i a n c e . In p r a c t i c a l terms, t h i s meant i n v o l v i n g the l o c a l people i n the p r o j e c t to the f u l l e s t extent p o s s i b l e w h i l e s t i l l m aintaining an e f f i c i e n t o p e r a t i o n . This o b j e c t i v e was met during the implementation of the p r o j e c t but not during the o p e r a t i o n and management.

UNITECH provided the s k i l l e d l a b o r , and the l o c a l people provided the u n s k i l l e d labor to implement the p r o j e c t ; together they s u c c e s s f u l l y performed a l l the tasks associated with the implementation phase. The two p r o j e c t managers who were appointed t o oversee t h i s phase acted as e f f e c t i v e l y l i n k s between UNITECH and the l o c a l people. They provided the l e a d e r s h i p and d e d i c a t i o n t o the hard work r e q u i r e d t o keep the p r o j e c t moving at a reasonable pace w h i l e a l l o w i n g time f o r considerable thought to be given t o each new step taken. The s k i l l s and a t t r i b u t e s that each of the two p r o j e c t managers required t o perform t h e i r jobs are l i s t e d i n Table 4.1.

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PIDP/RSI

Table 4.1. A t t r i b u t e s r e q u i r e d by host agency p r o j e c t manager and l o c a l p r o j e c t manager

The Host Agency P r o j e c t Manager

Managerial s k i l l s , to assign tasks t o i n d i v i d u a l s and needs t o maintain a good mix between p a r t i c i p a t i o n and l e a d e r s h i p .

Bureaucratic s k i l l s , to l i a i s e w i t h the r u r a l e l e c t r i f i c a t i o n program planners,

Business a d m i n i s t r a t i o n s k i l l s , to manage the f i n a n c i a l aspects of the p r o j e c t and to procure the equipment.

Tech n i c a l s k i l l s , to work on the p r o j e c t as the need a r i s e s .

L o c a l P r o j e c t Manager

The a b i l i t y to communicate with both the v i l l a g e r s and the host agency p r o j e c t manager; In p r a c t i c e , the l o c a l p r o j e c t manager might have to be f l u e n t i n more than one language,

A b a s i c understanding of the scope of the p r o j e c t and the c a p a b i l i t i e s of the v i l l a g e r s .

The a b i l i t y to g a i n the a c t i v e support of the v i l l a g e r s ,

A high l e v e l of enthusiasm f o r the p r o j e c t , such that he/she i s w i l l i n g to stay i n the v i l l a g e at l e a s t u n t i l the completion of the implementation phase.

The implementation phase of Stage 1 d i d not Include a t e c h n i c a l and management t r a i n i n g program f o r the l o c a l people. Consequently, handover of the completed p r o j e c t to a s u i t a b l y t r a i n e d l o c a l team was not p o s s i b l e . While t h i s was not a problem i n the shorter term because of the presence of the l o c a l p r o j e c t manager, Mr. Y, i t became a problem a f t e r 1980 when he l e f t the Umbang re g i o n . By l a t e 1981 i t became evident that the l o c a l f i n a n c i a l and t e c h n i c a l managers re q u i r e d a d d i t i o n a l t r a i n i n g .

Four complementary nonformal education programs are needed to s u s t a i n r u r a l e l e c t r i f i c a t i o n p r o j e c t s at the l o c a l l e v e l . In b r i e f , they are

1. A t e c h n i c a l t r a i n i n g program f o r l o c a l operators that equips them to r e p a i r e l e c t r i c a l equipment and make simple extensions t o the d i s t r i b u t i o n system i n a d d i t i o n t o keeping the hydro f a c i l i t y running smoothly. Routine maintenance, of course, w i l l s t i l l need to be c a r r i e d out by an o u t s i d e s k i l l e d engineer.

2. An accounting course f o r the f i n a n c i a l managers t h a t focuses on t a r i f f p r i c i n g and c o l l e c t i o n procedures and a l s o on aspects of simple c r e d i t schemes. Moreover, i t i s d e s i r a b l e that

37

PIDP/RSI

arrangements be made f o r an o u t s i d e a u d i t o r t o v i s i t s i t e s at r e g u l a r i n t e r v a l s and check f i n a n c i a l records because a r i t h m e t i c mistakes have been made i n the past. The o u t s i d e a u d i t o r should be r e s p o n s i b l e a l s o f o r t a k i n g measures t o ensure that outstanding b i l l s are p a i d .

3. A l o c a l management program f o r the community as a whole that provides i n f o r m a t i o n on the l i m i t a t i o n s of the power supply and on the e f f i c i e n t cuses of e l e c t r i c i t y through purchases of t e c h n i c a l l y appropriate, s a f e , and r e l i a b l e equipment.

4. A small I n d u s t r i e s s k i l l - t r a i n i n g program i n l o c a t i o n s where the e l e c t r i c i t y Is t o be used f o r productive purposes.

Training of Final-year Engineering Students

While the implementation phase of the p r o j e c t d i d not i n c l u d e a t e c h n i c a l and management t r a i n i n g program f o r the l o c a l people and, consequently, l o c a l s e l f - r e l i a n c e was not achieved, the implementation phase d i d i n c l u d e a t r a i n i n g program f o r f i n a l year survey and engineering students from the UNITECH. In other words, UNITECH f u l f i l l e d I t s t h i r d o b j e c t i v e f o r Stage 1 of the p r o j e c t . Should v i l l a g e s e l f - h e l p microhydro schemes proceed beyond the p i l o t stage, then these students, who have s i n c e become q u a l i f i e d surveyors and engineers, w i l l be w e l l placed t o become part of microhydro host agency teams.

Promoting Regional Cooperation

UNITECH*s f o u r t h o b j e c t i v e was t o promote r e g i o n a l cooperation, t h a t I s , to I n t e g r a t e the p r o j e c t i n t o l o c a l r e g i o n a l development and t o have p r o j e c t b e n e f i t s shared by the people of a l l fourteen v i l l a g e s Involved i n i t . This o b j e c t i v e was not met. Because of d i s t a n c e , the people of the seven v i l l a g e s on the north s i d e of the Yanem River V a l l e y r a r e l y came to the Umbang Regional Center. From t h e i r p e r s p e c t i v e , t h e r e f o r e , the emergency r a d i o was the p r i n c i p a l b e n e f i t they received as a r e s u l t of Stage 1 of the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , a f a c t that the people of the other seven v i l l a g e s were w e l l aware of and that they used t o advantage.

In 1980 the ownership aspect of the o r i g i n a l agreement was a l t e r e d so that the people from the seven v i l l a g e s on the south s i d e of the Yanem River V a l l e y became the new owners of the scheme. As shown i n F i g u r e 4.2, these seven v i l l a g e s are Baindoang, Ankamap, Tukambet, Hanobman, Awen, Arkandar, and K o t l e n . According to the l o c a l f i n a n c i a l managers, t h i s change i n the ownership aspect of the p r o j e c t was by mutual agreement. Residents of seven v i l l a g e s of the north s i d e of the v a l l e y were s a i d t o have been s a t i s f i e d w i t h the proposal to withdraw from the scheme i f equivalent to t h e i r o r i g i n a l c o n t r i b u t i o n were channeled i n t o another p r o j e c t a t the r e g i o n a l center, that i s , the emergency r a d i o p r o j e c t . I f i t i s borne i n mind that the l o c a l f i n a n c i a l managers of the p r o j e c t are from two of the seven v i l l a g e s that s u c c e s s f u l l y assumed c o n t r o l of the p r o j e c t , then t h e i r s t o r y needs to be v e r i f i e d . Whether or not t h i s change

38

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i n the ownership of the p r o j e c t occurred by mutual agreement, i t i s nonetheless I n t e r e s t i n g t o consider why t h i s change was made.

I t i s h i g h l y probable that the people of one v i l l a g e , Baindoang, played a major r o l e . In 197 9 the Baindoang people, who were the t r a d i t i o n a l owners of the land and water used i n the p r o j e c t , asked the leaders of the other v i l l a g e s and a r e p r e s e n t a t i v e of the ECED whether a business group could take over the scheme. They make t h i s request because they thought the arrangement would be p r o f i t a b l e . This idea was not w e l l received and thus dismissed without f u r t h e r d i s c u s s i o n . Given the b e n e f i t of h i n d s i g h t , d i s m l s a l of t h i s idea may not have been the most s e n s i b l e long-term approach.

The Baindoang people, who had c o n t r i b u t e d more to the p r o j e c t than t h e i r neighbors, received no s p e c i a l compensation or concessions. They f i r s t asked f o r these i n 1979, when the scheme entered i t s o p e r a t i o n a l phase. At t h i s p o i n t , they made a b i d f o r a greater p r o p o r t i o n of i t s perceived b e n e f i t s . Had the greater c o n t r i b u t i o n of the Baindoang people t o the p r o j e c t been recognized e a r l i e r and had they been asked t o c o n t r i b u t e r e l a t i v e l y l e s s money or labor to the scheme, t h e i r subsequent i n t e r e s t i n c o n t r o l l i n g the p r o j e c t would have been u n j u s t i f i e d . Thus 1980 they were s u c c e s s f u l i n l i m i t i n g the ownership and c o n t r o l of the p r o j e c t to themselves and t h e i r immediate neighbors.

On the b a s i s of t h i s f i n d i n g , i t i s suggested that the r e s p e c t i v e i n p u t s , o b l i g a t i o n s , and r i g h t s of a l l p a r t i c i p a n t s i n f u t u r e microhydro schemes need to be c a r e f u l l y considered and the f o r m a l i z e d i n a w r i t t e n document. A formal agreement can be changed l a t e r , of course, as circumstances change. I t s u t i l i t y l i e s i n i t s tendency to cause everyone to g i v e s e r i o u s thought to what they are agreeing t o w i t h regard t o the inputs and outputs of a proposed e l e c t r i c i t y scheme.

Raising Revenues to Cover at Least Operation and Maintenance Costs

The ECED a n t i c i p a t e d t h a t the revenues r a i s e d from the p r o j e c t would at l e a s t cover i t s o p e r a t i o n and maintenance co s t s i n f u l l . This e xpectation was not achieved.

Table 4.2 Is a breakdown of the estimated short-term annual o p e r a t i o n and maintenance costs i n 1981 p r i c e s . These costs amounted t o K252, i n c l u d i n g K64 f o r m a t e r i a l s , K60 f o r a s k i l l e d maintenance o f f i c e r p l u s r e l a t e d t r a v e l expenses of K68, and a nominal wage of K60 f o r the l o c a l p l a n t operator.

The a c t u a l revenues r a i s e d from Stage 1 of the p r o j e c t during the years 1979 (from June), 1980, and 1981 are shown i n Table 4.3. They were, r e s p e c t i v e l y , K77.50, K147, and K131. They do not cover the estimated annual operation and maintenance costs of K126 i n 197 9 (from June) and K252 t h e r e a f t e r . C e r t a i n of the t a r i f f s set by the l o c a l people, however, were not c o l l e c t e d i n 1980 and 1981. Table 4.3 a l s o shows the a n t i c i p a t e d f u l l revenue from Stage 1 of the p r o j e c t i n 1981: K192, which i s l e s s than the estimated f i n a n c i a l c o s t s .

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Table 4.2. Annual operating and maintenance costs of Stage 1 of the p r o j e c t

Component Kina (1981 p r i c e s )

B e l t a 9

Brushes and Bearings^ 15

Miscellaneous R e p a i r s 0 40

A i r f a r e — s k i l l e d maintenance o f f i c e r * 3 68

L a b o r — s k i l l e d maintenance o f f i c e r * 3 60

L a b o r — l o c a l operator* 60

T o t a l 252

Source: O r i g i n a l Formulation.

Notes: a Replaced every year,

Replaced every four years ( I n v e r s i n 1981) at estimated c o s t of K60 In Lae (Fore 1980).

Includes grease f o r bearings, t o o l s , and any unforeseen t e c h n i c a l problems.

S t a f f at UNITECH recommended th a t a r e g u l a r six-month i n s p e c t i o n be made by a s k i l l e d engineer; thus t r a v e l c o s t s = R34 Lae-Umbang r e t u r n x 2 <= K68.

Sa l a r y f o r a n a t i o n a l engineer of K5,000/annum or K15/day, assuming each v i s i t takes two days; thus annual c o s t i s K15 x 2 x 2 a K60.

Nominal s a l a r y only f o r K60/yr, which i s comparable w i t h monies re c e i v e d by part-time church leaders In Baindonag.

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PIDP/RSI

Table 4.3. Revenues r a i s e d from Stage 1

Source

Kina 197 9 a c t u a l 1980 1981 (from June) a c t u a l a c t u a l

1981 a n t i c i p a t e d ( i . e . assuming a l l t a r i f f s are

c o l l e c t e d )

Nonlocal school teacher

L o c a l schoolteacher

Community school

L o c a l v i l l a g e

Tradestores

Community hot-water system

Community emergency r a d i o

60

17.50

100

30

15

82

33

15

109

33

15

33

2

77.50 147 141 192

Note: T a r i f f l e v e l s and s t r u c t u r e as set by the l o c a l people are as f o l l o w s :

Kina per month

Use 1979 1980 1981

R e s i d e n t i a l — s c h o o l t e a c h e r s and l o c a l v i l l a g e r

S c h o o l — d o u b l e classroom and s t r e e t l i g h t s

Tradestores

Wash house

Emergency

2.50

n i l

n i l

2.50 2.73

1.25

v a r i a b l e

n i l

n i l

1.25

n i l

n i l

I f the ECEO's f i f t h o b j e c t i v e f o r Stage 1 of the p r o j e c t i s e v e n t u a l l y to be s a t i s f i e d and the p r o j e c t i s t o recover i t s o p e r a t i o n and maintenance c o s t s , e i t h e r the l o c a l operator w i l l have to continue to work without pay, which i s not recommended, or the 1981 t a r i f f s must be changed and an

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a d d i t i o n a l K70 r a i s e d from e l e c t r i c i t y users. Two suggestions come to mind. F i r s t , the t a r i f f l e v e l f o r the schoolteachers, the main users and b e n e f i c i a r i e s of the e l e c t r i c i t y , could be r a i s e d , e s p e c i a l l y because the schoolteachers thought that the e l e c t r i c i t y was cheap. Second, the t a r i f f s t r u c t u r e could be changed t o inc l u d e a t a r i f f f o r the use of the hot-water system. As shown i n Table 4.3, during the 197 9-81 p e r i o d the v i l l a g e r s d i d not pay f o r the use made of the hot-water system. These suggestions should be evaluated by members of the UNITECH or by re p r e s e n t a t i v e s of another out s i d e RE agency who should be p r i m a r i l y r e s p o n s i b l e f o r t a r i f f p o l i c y f o r m u l a t i o n r a t h e r than the l o c a l people as occurred Stage 1. Of course, t a r i f f s w i l l a l s o have to be c o n t i n u a l l y r e v i s e d to keep up w i t h the r a t e of i n f l a t i o n i n Papua New Guinea, c u r r e n t l y about 10 percent per annum.

There i s a l s o the question of how the long-term c o s t s a s s o c i a t e d w i t h upgrading the c i v i l works and r e p l a c i n g worn-out equipment i n Umbang are to be fin a n c e d . I t i s u n l i k e l y t h a t the p r o j e c t I t s e l f w i l l be able to pay for these c o s t s because i t s revenue-raising base Is l i m i t e d . As shown i n Figu r e 3.3, a l l of the e x i s t i n g f a c i l i t i e s and houses i n the r e g i o n a l center In Umbang that are l o c a t e d adjacent to the e l e c t r i c i t y supply are already connected t o i t . Further growth i n e l e c t r i c i t y demand and, i n consequence, i n revenues r a i s e d from the p r o j e c t w i l l occur only i f the other I n f r a s t r u c t u r e p r o j e c t s In which the v i l l a g e r s have shown an I n t e r e s t ( f o r example, a h e a l t h a i d post and a community workshop and v o c a t i o n a l center) become a r e a l i t y . I t i s a n t i c i p a t e d , however, that these p r o j e c t s w i l l not be e s t a b l i s h e d i n Umbang during the 1980s because the v i l l a g e r s w i l l be con c e n t r a t i n g t h e i r e f f o r t s on r a i s i n g money f o r b u i l d i n g m a t e r i a l s f o r the Umbang Community School as they have been doing s i n c e 1975 (see Table 3.2). In sh o r t , t o continue o p e r a t i o n , Stage 1 of the p r o j e c t w i l l represent a c o n t i n u a l expense to the n a t i o n a l government.

The Villagers' Expectations and Project Outcomes

The v i l l a g e r s expectations w i t h regard t o Stage 1 of the e l e c t r i c i t y p r o j e c t In summary were: (1) th a t i t would be p r o f i t a b l e ; (2) t h a t i t would be b e n e f i c i a l t o t h e i r c h i l d r e n ' s education; (3) th a t i t would encourage 'good' teachers t o stay i n the Umbang Region. In a d d i t i o n , (4) the owners of the Umbang tr a d e s t o r e s i n d i c a t e d that they intended to use the e l e c t r i c i t y f o r productive purposes; and (5) the v i l l a g e r s hoped that the ECED of UNITECH would provide them w i t h an emergency r a d i o t o f a c i l i t a t e communications between Umbang and Lae.

That the Project Would be Profitable

The v i l l a g e r s b e l i e v e d that the p r o j e c t would be p r o f i t a b l e ; and on the b a s i s o f t h i s b e l i e f the people of seven of the fourteen v i l l a g e s i n the Umbang region took c o n t r o l of the p r o j e c t i n 1980. As explained p r e v i o u s l y , t h i s assumption was f a l s e . Stage 1 was not a f i n a n c i a l success because the ECED paid i n s u f f i c i e n t a t t e n t i o n t o the task of t a r i f f p o l i c y f o r m u l a t i o n and s u p e r v i s i o n .

That the Project Would be Beneficial to their Children's Education

Although the Umbang Community Group was anxious t o improve the educ a t i o n a l f a c i l i t i e s a v a i l a b l e to t h e i r c h i l d r e n , the way i n which

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e l e c t r i c i t y was to c o n t r i b u t e to t h i s goal was not c l e a r l y s t a t e d . In attempting t o answer t h i s q u estion, the author examined the ways In which e l e c t r i c i t y was used at the school. E l e c t r i c i t y d i d not have a s i g n i f i c a n t p o s i t i v e , d i r e c t impact on the education the c h i l d r e n were r e c e i v i n g f o r three reasons. F i r s t , only two of the f i v e classrooms t h a t make up the Umbang Community School were connected to the power supply, and, i n consequence, only a m i n o r i t y of c h i l d r e n had access t o e l e c t r i c l i g h t i n g by which to work i n the morning when the classrooms were dimly l i t by n a t u r a l l i g h t . The l i g h t s In the classrooms were not used at n i g h t , as might have been expected, because the school was l o c a t e d too f a r away from the fourteen v i l l a g e s f o r i t to be a convenient venue f o r nighttime a c t i v i t i e s . Moreover, i t was common, p a r t i c u l a r l y by 1981, to f i n d o nly three out of the s i x p o s s i b l e l i g h t s i n each classroom i n f u n c t i o n i n g order, d e s p i t e the a v a i l a b i l i t y of Incandescent bulbs i n Umbang. Second, the power p o i n t s i n the classrooms were r a r e l y used because the school d i d not have funds a v a i l a b l e to buy e l e c t r i c a l equipment. T h i r d , no one except Mr. Y, who l e f t Umbang i n 1980, knew how to operate the main piece of e l e c t r i c a l equipment i n the s c h o o l , a p r o j e c t o r borrowed from UNITECH, Lae.

An assessment of the net b e n e f i t of e l e c t r i c i t y to the school c h i l d r e n must take i n t o account the a v a i l a b i l i t y of e l e c t r i c l i g h t i n g i n the schoolteachers' houses and on school grounds. The Umbang people e l e c t e d t o provide the schoolteachers 1 houses with e l e c t r i c i t y f o r l i g h t i n g t o enable the teachers to prepare lessons at night and consequently to improve the q u a l i t y of education received by t h e i r p u p i l s . Indeed, the teachers sometimes d i d prepare lessons at n i g h t . However, t h i s was not a new a c t i v i t y : the school teachers had simply s u b s t i t u t e d e l e c t r i c f o r kerosene l i g h t i n g . Thus, the a v a i l a b i l i t y of e l e c t r i c i t y In the schoolteachers' houses d i d not i n I t s e l f enhance the q u a l i t y of the c h i l d r e n ' s education.

In l a t e 1981 the Umbang Community Group e l e c t e d to i n s t a l l two s t r e e t l i g h t s w i t h i n the school grounds that could be used on the few occasions of nighttime a c t i v i t i e s . Unfortunately, however, one of these two l i g h t s was i n c o r r e c t l y p o s i t i o n e d by the ECED s t a f f because they consulted the wrong person when they I n s t a l l e d them; consequently, t h i s l i g h t served no u s e f u l purpose. The other l i g h t was used o c c a s i o n a l l y , but school f u n d - r a i s i n g a c t i v i t i e s were not dependent on the a v a i l a b i l i t y of t h i s e l e c t r i c l i g h t .

That Good Teachers Would be Attracted to the Umbang Region

The Umbang community had hoped that the a v a i l a b i l i t y of e l e c t r i c i t y would encourage good teachers t o continue teaching at the school (and thereby improve t h e i r c h i l d r e n ' s education) and a l s o t o continue to provide t h e i r I nvaluable a s s i s t a n c e w i t h community development p r o j e c t s . This d i d happen.

In 1980 the most h i g h l y respected of the school teachers, Mr. Y, l e f t Umbang. In 1981 PNG's Department of Education i n was short of primary school teachers, and the Umbang Community Group was a l l o c a t e d three teachers i n s t e a d of f i v e . Once In Umbang the schoolteachers were e n t h u s i a s t i c about the a v a i l a b i l i t y of e l e c t r i c i t y f o r l i g h t i n g , but the d e c i s i o n to come to or stay i n Umbang i s r e s t s e n t i r e l y w ith the Department of Education.

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that the Umbang Tradestores Would Use El e c t r i c i t y Productive Purposes

By 1981 three of the e i g h t tradestores then l o c a t e d adjacent t o the a i r s t r i p i n Umbang were connected t o the power supply* The owners of these three s t o r e s p r e v i o u s l y had t o l d the ECED s t a f f that they would use e l e c t r i c i t y t o run r e f r i g e r a t o r s and f r e e z e r s . In consequence, UNITECH i n s t a l l e d power p o i n t s i n a d d i t i o n t o l i g h t f i t t i n g s i n these s t o r e s . None of the power p o i n t s was used, however, because the s t o r e owners d i d not buy any e l e c t r i c a l equipment f o r two reasons: (1) they d i d not have the c a p i t a l , and indeed two of the three were f i n a n c i a l l y bankrupt and (2) they were concerned about the r e l i a b i l i t y of the power supply. In b r i e f , the l i g h t s i n the s t o r e s were r a r e l y used, and the p r o v i s i o n of e l e c t r i c i t y t o the t r a d e s t o r e s served no apparent u s e f u l purpose.

That the El e c t r i c i t y Would be Used to Run an &ergency Radio

At the request of the v i l l a g e r s , UNITECH made funds a v a i l a b l e f o r an emergency r a d i o , and thus the v i l l a g e r s f u l f i l l e d t h e i r a s p i r a t i o n s f o r improved communications between Umbang and Lae In case of an emergency.

Summary of Project Outcomes in Relation to the Participants' Objectives and Expectations

Stage 1 of the p r o j e c t was not an u n q u a l i f i e d success. The p r o j e c t Increased the v i l l a g e r s ' dependence on outs i d e s k i l l s r a t h e r than on t h e i r s e l f - r e l i a n c e as was the i n t e n t i o n o f UNITECH; t h i s occurred because UNITECH f a i l e d t o provide the e s s e n t i a l complementary t r a i n i n g programs t o Bustaln the completed p r o j e c t . Stage 1 a l s o had a negative impact on i n t e r v i l l a g e r e l a t i o n s because the land and water r i g h t s i s s u e , which a m i c r o - h y d r o e l e c t r i c i t y p r o j e c t n e c e s s a r i l y r a i s e s , was not s a t i s f a c t o r i l y r e s o l v e d . Moreover, the p r o j e c t f a i l e d t o r e t u r n a p r o f i t , as expected by the v i l l a g e r s , because demand f o r e l e c t r i c i t y i n the r e g i o n a l center was sma l l and a l s o because inadequate a t t e n t i o n was paid t o the task of t a r i f f p o l i c y f o r m u l a t i o n .

Despite these shortcomings. Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was a va l u a b l e exercise f o r three reasons.

F i r s t , i t proved t h a t v i l l a g e r s were w i l l i n g to make time and resource adjustments i n order t o Incorporate a new technology i n t o t h e i r s o c i e t a l c o n d i t i o n s . Those v i l l a g e c h a r a c t e r i s t i c s t h a t were Important determinants of t h i s p r o j e c t outcome have been s t a t e d p r e v i o u s l y i n chapter 3; i n b r i e f , these c h a r a c t e r i s t i c s Include (1) the v i l l a g e r s ' p o s i t i v e a t t i t u d e t o change, (2) t h e i r previous s u c c e s s f u l involvement i n community development p r o j e c t s and t h e i r confidence i n t h e i r a b i l i t y t o e f f e c t major d e s i r e d changes I n t h e i r l i f e c o n d i t i o n s , (3) t h e i r cohesive s o c i a l o r g a n i z a t i o n , and (4) The a v a i l a b i l i t y of a s u i t a b l e person among the l o c a l people to serve as the l o c a l p r o j e c t manager. However, I t i s d i f f i c u l t t o e x p l a i n the v i l l a g e r s ' enthusiasm f o r Stage 1 i n terms of the t a n g i b l e b e n e f i t s . The evidence suggests that researchers and planners should not underestimate the importance of perceived s t a t u s and p r e s t i g e as determinants o f v i l l a g e r s ' d e s i r e f o r e l e c t r i c i t y . In a d d i t i o n , planners need t o consider c a r e f u l l y whether each and every proposed end-use of the

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e l e c t r i c i t y i s j u s t i f i e d . An e l e c t r i c i t y p r o j e c t j u s t i f i e d f o r Umbang i s one that aims to provide (1) the teachers with e l e c t r i c i t y f o r nighttime l i g h t i n g and (2) the community with e l e c t r i c i t y t o run an emergency r a d i o .

Second, Stage 1 enabled the I d e n t i f i c a t i o n of the i n s t i t u t i o n a l requirements of v i l l a g e - l e v e l m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s . In p a r t i c u l a r , the f i n d i n g s i n d i c a t e that c e r t a i n tasks should be the r e s p o n s i b i l i t y of the executing agency and not of the l o c a l people; these tasks are (1) t r a i n i n g l o c a l f i n a n c i a l and t e c h n i c a l o f f i c e r s , (2) formulating and s u p e r v i s i n g t a r i f f p o l i c y , and (3) t r a n s f e r r i n g s k i l l s f o r e l e c t r i c i t y - b a s e d a c t i v i t i e s .

T h i r d , Stage 1 provided Papua New Guinea with i t s f i r s t data on the cost s and l i k e l y impacts of microhydro schemes that can be compared w i t h the c o s t s and l i k e l y impacts of a l t e r n a t e RE technologies and other r u r a l i n f r a s t r u c t u r e p r o j e c t s . The remainder of t h i s chapter addresses i s the issue of whether a m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was the best development o p t i o n t o meet the most p r e s s i n g requirements of the community.

National Government Interests and Project Outcomes

This s e c t i o n addresses b r i e f l y two I n t e r r e l a t e d q u e s t i o n s : f i r s t , whether microhydro was the best choice of RE technology f o r the Umbang Regional Centre and, second, whether an e l e c t r i c i t y p r o j e c t was the best choice of a community development p r o j e c t f o r the Umbang r e g i o n .

In 1976 the planners of Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t concluded, without d e t a i l e d a n a l y s i s , t h a t microhydro was the l e a s t cost o p t i o n and best choice of RE technology f o r the Umbang Regional Centre. Although t h e i r assumption was w e l l founded, s i n c e then the r e l a t i v e economic co s t s of the va r i o u s RE technologies have changed c o n s i d e r a b l y . In consequence, I t i s u s e f u l to reappraise the c o s t s and a n t i c i p a t e d s o c i a l Impacts of those RE technologies are f e a s i b l e f o r the generation of e l e c t r i c i t y i n the context of the r e g i o n a l center i n Umbang. This a p p r a i s a l , a l b e i t a t h e o r e t i c a l e x e r c i s e now, can i l l u m i n a t e the i s s u e of choice of technology for f u t u r e RE p r o j e c t s .

The a p p r a i s a l Is not comprehensive. I t i s l i m i t e d t o c o n s i d e r a t i o n of the c o s t s i n 1984 p r i c e s of a 7.2 kW micro-hydro f a c i l i t y and an underground d i s t r i b u t i o n g r i d as was I n s t a l l e d i n Umbang compared w i t h the costs of a t e c h n i c a l l y e f f i c i e n t RE p r o j e c t — o n e that can meet the end-use a p p l i c a t i o n s f o r e l e c t r i c i t y i n Umbang at the end of 1981 t h i s case study has determined to be j u s t i f i a b l e . 3

A comprehensive a p p r a i s a l of the economic costs and as s o c i a t e d s o c i a l Impacts of the micro-hydro a l t e r n a t i v e compared w i t h other f e a s i b l e RE t e c h n o l o g i c a l a l t e r n a t i v e s i n the context of the r e g i o n a l center i n Umbang can be found i n the author's d i s s e r t a t i o n (see Bowman 1985).

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Economic Costs of the Microhydro Alternative as was Installed i n Unhang

In January 1982 the peak demand f o r e l e c t r i c i t y i n Umbang was 6.5 k i l o w a t t s (see Table 3.5), and the t y p i c a l d a i l y p a t t e r n of e l e c t r i c i t y use Is shown i n Figure 4.1. In 1976 to meet t h i s p r e d i c t e d demand, the ECED s t a f f i n s t a l l e d an 8 kVA (7.2 kW) microhydro f a c i l i t y t hat was composed of some r e l a t i v e l y expensive Imported manufactures and an underground d i s t r i b u t i o n g r i d . A d e t a i l e d breakdown of the costs i n 1984 p r i c e s of a microhydro system of the same s i z e as the one I n s t a l l e d i n Umbang, but I n c l u d i n g r e c e n t l y a v a i l a b l e low-cost and time-tested Imported manufactures. Is provided i n Table A . l i n the Appendix and summarized i n Table 4.4.

The equipment c o s t s of the system, which are accurate to w i t h i n p l u s or minus 10 percent, have been d i v i d e d i n t o three p a r t s : (1) the f a c i l i t y i t s e l f composed of Imported t u r b i n e , generator, and e l e c t r o n i c governing system and shunt load water heater from Tamar Designs, Tasmania;4 (2) the d i s t r i b u t i o n ; and (3) the i n t e r n a l w i r i n g . The labor c o s t s , which are accurate to w i t h i n plus or minus 25 percent, have been d i v i d e d i n t o two p a r t s : (1) s k i l l e d labor c o s t s based on information provided by the planners of Stage 1 of the p r o j e c t and (2) u n s k i l l e d l a b o r c o s t s . The u n s k i l l e d l a b o r c o s t s have been valued at zero (Case A), as they were i n Stage 1 of the p r o j e c t and a l s o at the f u l l market wage r a t e of u n s k i l l e d labor In r u r a l areas of K3 per day per worker (Case B). A cash value has been placed on l o c a l l a b o r . However, the assumption i n Case A ( t h a t the time the v i l l a g e r s spent working on Stage 1 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t could not have been b e t t e r spent working on other community development p r o j e c t s ) i s open t o q u e s t i o n . A c a l c u l a t i o n of the net present value of the microhydro scheme twice, i n the f i r s t i n s t a n c e , with u n s k i l l e d labor valued at zero and, i n the second i n s t a n c e , with a l l labor valued at the f u l l market wage r a t e shows the minimum and maximum expenditure l i k e l y to be associated with the scheme. The annual o p e r a t i o n and maintenance costs of the scheme have a l s o been estimated w i t h i n p l u s or minus 10 percent and included i n the net present value c a l c u l a t i o n s . In r e l a t i o n t o these c o s t s , i t i s noteworthy that no major r e p a i r s on the c i v i l works are a n t i c i p a t e d , nor i s i t a n t i c i p a t e d t h a t the p r i n c i p l e components of the e l e c t r i c a l system w i l l r e q u i r e replacement over the 20-year l i f e t i m e assigned t o the system. Although these assumptions could be challenged and major c o s t s included i n about the 10 year bracket f o r c i v i l workB and mechanical and e l e c t r i c a l systems overhaul, the a d d i t i o n of these c o s t s w i l l not g r e a t l y a f f e c t the p r o j e c t ' s net present value. Hence these costs have not been Included here.

The net present value c a l c u l a t i o n s f o r the microhydro system are d e t a i l e d In Table 4.2 In the Appendix and summarized i n Table 4.5. As shown i n Table 4.5 at the t e s t discount r a t e of 10 percent over 20 years set by the N a t i o n a l Planning O f f i c e i n Port Moresby f o r the 7.2 kW microhydro scheme has a net present value (NPV) on the one hand, of K29, 515 when u n s k i l l e d labor i s valued at zero (Case A). When the a n t i c i p a t e d

This turbo-generating equipment meets the design c r i t e r i a s e t by the ECED. I t i s simple, r e l i a b l e , robust, low weight, and low c o s t .

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7000-t THEORETICAL MAXIMUM LOAD AT FULL FLOW

6500 4 PEAK ELECTRICITY LOAD

60004

55004

50004

45004

40004

Lights in

[Teachers' Lights in & School

Villager's Classrooms Houses

Porch lights W a s h h o u s e

T/ stores

Lights in

Teachers' &

Villagers Houses

Porch lightsWash house T /s tores

35004

30004

25004

20004

1500 4

10004

5004

CONSTANT BASE LOAD = THE HOT WATER S Y S T E M

12 6

A M

i 1 1 r 12 6

PM

Figure 4.1 Typical daily pattern of electricity use in Umbang.

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Table 4.4. Summary of co s t s of an 8 kVA M i c r o - h y d r o e l e c t r l c l t y system a

Cost, Kina 1984 P r i c e s

Case B ( l o c a l labor at

Case A f u l l market Component ( f r e e l o c a l l abor) wage r a t e )

Equipment . f o r the f a c i l i t y 9,766 9,766 . f o r d i s t r i b u t i o n 2,916 2,916 . f o r i n t e r n a l w i r i n g 750 750

B. Labor s k i l l e d 14,577 14,577 u n s k i l l e d n i l 7,800

Annual o p e r a t i o n and maintenance 345 345

Rotes; a A d e t a i l e d breakdown of co s t s i s provided i n Appendix Table A . l .

b 1 Kina - A0S$1.26 - US$1.17.

margins of e r r o r i n the v a r i o u s cost components are taken i n t o account the NPV ranged from K24,700 t o K34,330. When u n s k i l l e d labor i s valued at the f u l l market wage r a t e , on the other hand, the system has a NPV of K36,960 (Case B) and a minimum of K30,284 and a maximum of K43,636. Thus the NPV of t h i s a l t e r n a t i v e ranges between K24,700 (Case A, minimum) and K43,636 (Case B, maximum).

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Table 4,5. Summary of Net Present Values (NPV) of an 8 KVA m i c r o - h y d r o e l e c t r i c i t y system i n k ina 1984 p r i c e s a

Case B Case A ( l o c a l labor valued

( l o c a l labor at f u l l market valued at zero) wage r a t e )

T o t a l expenditure 34,735 42,535

NPV* 29,515 36,960

Minimum expenditure 29,309 35,159

NPV 24,700 30,284

% v a r i a t i o n -15 -17

Maximum expenditure 40,161 49,911

NPV 34,330 43,636

% v a r i a t i o n +15 +17

Notes: a 1 Kina - AUS$1.20 - US$1.17. See Table A.4 i n the Appendix f o r d e t a i l s .

b NPV at discount r a t e of 10 percent and over 20 years.

Economic Costs of a Justifiable Technically Efficient RE Project for Umbang

As explained p r e v i o u s l y , not a l l of the end-use a p p l i c a t i o n s f o r e l e c t r i c i t y i n Umbang can be economically j u s t i f i e d . The 3.6 kW e l e c t r i c a l hot-water system, f o r inst a n c e , was not among the perceived energy needs of the Umbang people as they were explained t o the ECED s t a f f i n 1975. Rather the hot-water system was i n s t a l l e d at the suggestion of the ECED t o serve a t e c h n i c a l purpose, to act as a nonconventional governing system f o r the microhydro f a c i l i t y . From the v i l l a g e r s ' p e r s p e c t i v e , the hot-water system was a bonus use of the e l e c t r i c i t y i n Stage 1. Their expectation was t h a t the e l e c t r i c i t y s u p p l i e d t o t h e i r r e g i o n a l center would be used only f o r l i g h t i n g and f o r running an emergency r a d i o . Thus t o s a t i s f y the v i l l a g e r s ' s t a t e d o b j e c t i v e s f o r Stage 1, an RE p r o j e c t smaller than the one a c t u a l l y i n s t a l l e d i n Umbang could have been considered.

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Table 4.6. Summary of cos t s of a s i n g l e p h o t o v o l t a i c l i g h t i n g k i t i n kina 1984 p r i c e s

Component Kina 1984 cost p r i c e s

Equipment f o r the k l t a

f o r i n t e r n a l w i r i n g 565 50

Labor S k i l l e d U n s k i l l e d

100 Not r e q u i r e d

Annual operation and maintenance 100

Notes: a In c l u d i n g a 35-Watt peak ARCO s o l a r panel, Delco 105-110 ampere hour b a t t e r y , 12-20 v o l t r e g u l a t o r , 1 x 13 W and 1 x 8 W f l u o r e s c e n t l i g h t s , and f r e i g h t .

b For d e t a i l s , see Table A.4 i n the Appendix.

Moreover, t h i s present study has e s t a b l i s h e d that not a l l of the perceived e l e c t r i c a l l i g h t i n g needs of the Umbang people were j u s t i f i e d . In p a r t i c u l a r , the e l e c t r i c i t y provided to the three t r a d e s t o r e s and one of the two s t r e e t l i g h t s (the one i n c o r r e c t l y p o s i t i o n e d by the ECED) served no u s e f u l purpose. Running the other s t r e e t l i g h t a l l n i g h t , as was the h a b i t of the Umbang people (see Figure 4.1) a l s o was not j u s t i f i e d ; t h i s l i g h t was not used by the people on a re g u l a r b a s i s . Furthermore, the l i g h t s the two school classrooms were used mainly during the day because these rooms had inadequate windows l i g h t i n g . A change i n the design of the school b u i l d i n g s could have e l i m i n a t e d the need f o r e l e c t r i c i t y t o be used t h i s way. S i m i l a r l y , the i n c l u s i o n of more windows i n the teachers' houses could have e l i m i n a t e d t h e i r need t o use l i g h t s f o r an average of two hours i n the morning and four hours at n i g h t .

The e l e c t r i c i t y needs of the teachers f o r nighttime l i g h t i n g and of the community f o r running an emergency r a d i o could be s a t i s f i e d by p h o t o v o l t a l c s .

A p h o t o v o l t a i c k i t comprising a 35-Watt peak panel b a t t e r y , r e g u l a t o r , and one 13-Watt and one 8-Watt f l u o r e s c e n t tube i s capable of p r o v i d i n g about four hours of l i g h t f o r each of the 8- and 13-Watts l i g h t s f o r the school , teachers, a p h o t o v o l t a i c k i t comprising a 35-Watt peak panel b a t t e r y and a re g u l a t o r i s capable of charging the emergency r a d i o . Fluorescent tubes have been s u b s t i t u t e d f o r incandescent globes i n the teachers' houses i n Umbang because the peak e l e c t r i c i t y load f o r each house can be reduced co n s i d e r a b l y without causing s i g n i f i c a n t r e d u c t i o n i n the

50

PIDP/RSI

l i g h t output of the RE system. The reason i s t h a t f l u o r e s c e n t tubes produce more l i g h t per watt than incandescent globes; a 13-Watt f l u o r e s c e n t tube produces approximately the same amount of l i g h t (900 lumens) as does a 60-Watt incandescent globe. Thus i f maximal end-use e f f i c i e n c y i s Included among the RE design c r i t e r i a and the aim i s t o f i n d an RE technology t h a t s a t i s f i e s the j u s t i f i a b l e end-uses an RE p r o j e c t as requested by the Umbang people themselves, a f e a s i b l e RE p r o j e c t i s one that Is made up of 35-Watt peak p h o t o v o l t a i c k i t s .

A d e t a i l e d breakdown of the c o s t s of a s i n g l e 35 watt peak p h o t o v o l t a i c k i t p l u s a 13-Watt and an 8-Watt incandescent l i g h t f i t t i n g , i s shown i n Table A.4 i n the Appendix and summarized i n Table 4.6. As shown In t h i s t a b l e , the t o t a l equipment cost i n s t a l l e d i s K615, labor cost f o r i n s t a l l a t i o n i s K100, and annual operation and maintenance cost I s R100. The net present value of t h i s k i t I s a l s o d e t a i l e d i n Table 1.4 In the Appendix and summarized i n Table 4.7. The net present value i s K2,125 with a range of Kl,913 to K2,338 when the margins of e r r o r s i n the cost components are taken i n t o c o n s i d e r a t i o n . F i v e of these k i t s , which would meet the nighttime e l e c t r i c l i g h t i n g demands of the schoolteachers, would be about K10,625 or l e s s i f the schoolteachers scheduled the r o u t i n e maintenance on t h e i r i n d i v i d u a l p h o t o v o l t a i c systems at the same time. The p h o t o v o l t a i c k i t f o r the community emergency r a d i o would co s t an a d d i t i o n a l K2,000.

A Comparison of the Costs of the Microhydro Alternative and the Photovoltaic Cell Alternative

An RE system based on p h o t o v o l t a i c s t o serve the r e a l e l e c t r i c needs of the people i n the Umbang region i s considerably cheaper than the microhydro f a c i l i t y t hat was I n s t a l l e d In Umbang.

As determined above, at the t e s t discount r a t e of 10 percentage and over 20 years, the net present value of the l i f e - c y c l e c o s t s of the p h o t o v o l t a i c system i s approximately K12,625. In comparison, the net present value of the l i f e - c y c l e costs of the m i c r o - h y d r o e l e c t r i c system i s about K29,500, when l o c a l labor i s valued at zero, and about K36,900 when l o c a l labor i s value at the f u l l market wage r a t e .

An E l e c t r i c i t y Project Versus Other Community Development Projects for the umbang Regional Centre

One important f i n d i n g of t h i s case study has not been e x p l i c i t l y mentioned thus f a r : the perceived needs of the Umbang Community Group i n r e l a t i o n t o t h e i r r e g i o n a l center i n Umbang were not l i m i t e d t o an e l e c t r i c i t y supply. Rather they included, but were not l i m i t e d t o , the f o l l o w i n g items, as s t a t e d by i t s members (see Table 3.2):

Improved educational s e r v i c e s . In p a r t i c u l a r the v i l l a g e r s d e s i r e d a school b u i l t of permanent m a t e r i a l s because such b u i l d i n g s r e q u i r e l e s s maintenance than b u i l d i n g s constructed of bush m a t e r i a l and a l s o because a shortage of l o c a l timber e x i s t s i n the Umbang region w i t h which t o continuously renovate bush b u i l d i n g s . The Umbang Community Group was a l s o concerned t h a t

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Table 4.7. Summary of Net Present Values (NPV) of a s i n g l e p h o t o v o l t a i c l i g h t i n g k i t a

Kina, 1984 P r i c e s

T o t a l expenditure NPV

3,780 2,125

Minimum expenditure NPV % v a r i a t i o n

3,402 1,913

-10

Maximum expenditure NPV % v a r i a t i o n

4,158 2,338

+10

Notes: a NPV at a discount r a t e of 10 percent and over 20 years as f o r micro hydro a l t e r n a t i v e .

b For d e t a i l s , see Table 1.2B i n Appendix 1.

t h e i r school d i d not always.have a f u l l complement of teachers and th a t t h e i r out-of-school youth could not f i n d j o bs. The primary schoolteachers' f i r s t p r i o r i t y goal f o r the school was more books f o r the c h i l d r e n t o read.

J. Improved h e a l t h f a c i l i t i e s . Since the e a r l y 1970s the v i l l a g e r s had wanted a new permanent m a t e r i a l s A i d Post t o be b u i l t In Umbang, and s k i l l e d medical workers from Lae to v i s i t once a month to t r e a t the s e r i o u s l y i l l and t o run a baby h e a l t h c l i n i c . T h e i r e x i s t i n g h e a l t h s e r v i c e s included two A i d Posts b u i l t of bush m a t e r i a l s ( f o r 2,700 people) that were Inadequately stocked w i t h medical s u p p l i e s . Moreover, the two A i d Post o r d e r l i e s who ran these c l i n i c s had re c e i v e d only b a s i c t r a i n i n g i n h e a l t h care and were f r e q u e n t l y absent from the v i l l a g e .

Improved t r a n s p o r t a t i o n s e r v i c e s and business management p r a c t i c e s . In p a r t i c u l a r , the Umbang people were anxious f o r government charter planes t o come to Umbang. As i t was, they were dependent upon two p r i v a t e l y owned commercial a i r l i n e s f o r unpredi c t a b l e and expensive t r a n s p o r t a t i o n s e r v i c e s . In a d d i t i o n , the commensurate sharp r i s e s i n the a i r f r e i g h t t r a n s p o r t a t i o n c o s t s t h a t had occurred s i n c e the Umbang a i r s t r i p had opened, from K0.05/kg i n 1976 to K0.17/kg i n 1981, had r e s u l t e d i n incoming goods being expensive and outgoing p r o f i t s from c o f f e e (the main cash-earning a c t i v i t y i n the Umbang region) being low.

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PIDP/RSI

In a d d i t i o n t o these needs as perceived by the v i l l a g e r s themselves, the author noted that firewood was no longer a v a i l a b l e i n the v i c i n i t y of the and Umbang Regional Centre and th a t the people who l i v e d i n Umbang were dependent upon the people from the surrounding v i l l a g e s f o r t h e i r firewood s u p p l i e s f o r cooking.

These immediate requirements of the Umbang Community Group f o r cheaper t r a n s p o r t a t i o n s e r v i c e s , Improved business management p r a c t i c e s . Improved educational s e r v i c e s f o r both primary school c h i l d r e n and ou t - o f - s c h o o l youth, f o r new and improved h e a l t h f a c i l i t i e s , and f o r more timber f o r housing and f o r firewood were apparent i n 1975 when Stage 1 of the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was begun. These needs were not met by t h i s stage of the p r o j e c t and are not as yet s a t i s f i e d . Because the money spent on the RE p r o j e c t may have been b e t t e r spent on other community development p r o j e c t s i n Umbang, I t i s suggested t h a t i n the f u t u r e planners should consider the developmental opportunity costs t o the r u r a l people of proposed RE p r o j e c t s before they commit funds t o them.

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CHAPTER 5

DESCRIPTION CP STAGE 2 CP THE OHBAHOBAIHDQAIIG III CRO-BTDROELECTRICITT PROJECT

The second stage of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t — t h e supply of e l e c t r i c i t y t o the v i l l a g e of Baindoang—was a j o i n t venture between the Government's Department of Minerals and Energy (DME) and the people of Baindoang. The Energy Planning U n i t (EPU) of the DME decided t o o f f e r t o make funds a v a i l a b l e t o extend the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t i n Umbang and to provide e l e c t r i c i t y t o the v i l l a g e of Baindoang In e a r l y 1979. The UPU wanted t o undertake a "before and a f t e r " study of the i n t r o d u c t i o n of e l e c t r i c i t y t o a v i l l a g e environment, a study that could be used as a b a s i s f o r r e f i n i n g the country's p o l i c y on RE at the v i l l a g e l e v e l . The second stage of the p r o j e c t , however, was not Imposed on the Baindong people, r a t h e r , they had p r e v i o u s l y expressed I n t e r e s t i n r e c e i v i n g e l e c t r i c i t y f o r l i g h t i n g i n t h e i r church i n 1975, when the f i r s t stage of the p r o j e c t was i n i t i a t e d . At that time UNITECH s t a f f members had determined that the best s i t e f o r a microhydro f a c i l i t y was a stream c l o s e to Umbang, and, f o r reasons of c o s t , they had decided not to Include the trans m i s s i o n of e l e c t r i c i t y t o Baindoang w i t h i n the Stage 1 design.

The DME'8 proposal t o finance the extension of the g r i d i n Umbang t o Baindoang was discussed by the leaders of the fourteen v i l l a g e s In the Umbang reg i o n a t a meeting held i n Umbang i n A p r i l 1979. At t h i s meeting a re p r e s e n t a t i v e from UNITECH, on behalf of the newly formed EPU of the DME, explained t o the v i l l a g e leaders t h a t Baindoang would be the only v i l l a g e to r e c e i v e e l e c t r i c i t y because the power at Umbang was l i m i t e d and because co s t s a s s o c i a t e d with t r a n s m i t t i n g power to v i l l a g e s more d i s t a n t from Umbang were p r o h i b i t i v e . The leaders of the other t h i r t e e n v i l l a g e s i n the Umbang reg i o n viewed t h i s proposal as more than s u f f i c i e n t compensation t o the Baindoang people f o r t h e i r a d d i t i o n a l inputs t o stage 1 of the p r o j e c t . They were quick t o p o i n t out that they t h e r e a f t e r considered the Baindoang people to be o b l i g e d t o help them w i t h both finances and labor should they decide t o b u i l d another microhydro f a c i l i t y and t o e l e c t r i f y t h e i r own v i l l a g e s i n the f u t u r e . The leaders of Baindoang shared the sentiments o f t h e i r neighbors. Having reached t h i s understanding, the leaders o f a l l fourteen v i l l a g e s i n the Umbang region agreed unanimously t h a t Baindoang should be the f i r s t v i l l a g e t o r e c e i v e e l e c t r i c i t y . Subsequently, the s t a f f of the E l e c t r i c a l and Communications Engineering Department (ECED) of UNITECH agreed t o act as the implementing agency f o r Stage 2 of the p r o j e c t .

Background Information on the Village of Baindoang

The Village Setting

The v i l l a g e of Baindoang i s l o c a t e d at an a l t i t u d e of 1,500 meters c l o s e t o the top of and mid-way along the steep mountain range that i s b i s e c t e d by the Yanem and Tuembl R i v e r s (see Figure 3.2). I t i s ge o g r a p h i c a l l y d i v i d e d i n t o two areas known as Main Baindoang and

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Norkalang. Main Baindoang the l a r g e r of the two settlements, c o n s i s t s of about seventy occupied bush m a t e r i a l houses and one permanent house, a bush m a t e r i a l Health Aid Post, and a permanent church that I s l o c a t e d at the Norkalang end of the main settlement. Norkalang, about 500 meters from Main Baindoang, c o n s i s t s of about seven occupied houses. Both Main Baindoang and Norkalang c o n t a i n a few unoccupied houses that are not included In the schematic map of the v i l l a g e shown i n Figure 5*1. Also w i t h i n the v i l l a g e boundaries (which, unless otherwise s t a t e d , Include both Main Baindoang and Norkalang) there are two b a s k e t b a l l c o u r t s and a soccer f i e l d used by the v i l l a g e youth, as w e l l as a l a r g e open area where the people gather r e g u l a r l y f o r meetings. At each end of the v i l l a g e a permanent stream meets the v i l l a g e r s ' water requirements.

The Village People

Baindoang i s l a r g e In comparison t o neighboring communities (see Table 3.2). In A p r i l 1980 a t o t a l of 337 people r e s i d e d w i t h i n the v i l l a g e boundaries. These v i l l a g e r s l i v e d as seventy-four nuclear f a m i l y groups or households, of which twenty-one households (28 percent) lacked a c t i v e male members. Table 5.1 provides census data on the Baindoang p o p u l a t i o n , by age and sex. As can be seen from t h i s t a b l e , the Baindoang community i n t o three age groups of roughly equal s i z e : c h i l d r e n below 16 years of age (38 perc e n t ) ; young men and women between 16 and 40 (30 p e r c e n t ) , the m a j o r i t y of whom are i n the 16 to 25 age group (21 p e r c e n t ) , and o l d e r men and women above 40 years of age (32 pe r c e n t ) . Of the a d u l t p o p u l a t i o n women outnumber men by a r a t i o of almost 2 to 1. This d i s p a r i t y between the number of the productive men and women i n the v i l l a g e 16 because more men than women have migrated to c o a s t a l towns.

The Activity Patterns of the People

Table 5.2 summarizes the y e a r l y and weekly events i n Baindoang. From the beginning of the dry season i n August through December, the dominant a c t i v i t y i s preparing yam gardens. The main c o f f e e f l u s h , the people's p r i n c i p a l cash-earning a c t i v i t y occurs between November and February when yam garden preparations are s t i l l underway. By March a l l of the new food gardens, i n c l u d i n g yam, mixed vegetable, and sweet potato gardens, are planted. Because the end of the dry season i s approaching, the time i s spent r e b u i l d i n g and r e p a i r i n g houses. By J u l y d a i l y r a i n f a l l s preclude outdoor a c t i v i t i e s . Firewood, which i s used f o r cooking and space h e a t i n g , and food s u p p l i e s are fetched between downpours; on c l e a r days the minor f l u s h of co f f e e i s harvested, the co f f e e t r e e s are pruned, and new sweet potato gardens are cu t . Thus, peaks and troughs occur i n the annual, e s s e n t i a l l y subsistence work pa t t e r n s of the Baindoang people.

Apart from the s h i f t i n g seasons, the f i x e d days of the church calendar p a r t l y determine both f e s t i v e and work days i n Baindoang. During a t y p i c a l week, however, the people spend approximately f i v e days working f o r themselves, engage i n community a c t i v i t i e s on F r i d a y s In Ombang, and on Sundays they attend church i n the morning and a community meeting In the afternoon.

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to water supply

v

to Umbang Regional Centre

Aid post to Tuembi River Valley &

Kasanombe

Permanent materials building

N O R K A L A N G

to water supply

Figure 5.1 Schematic map of Baindoang village.

56 PIDP /RS I

Table 5.1. Baindoang p o p u l a t i o n : A p r i l 1980 a

Sex

Pre­school School

c h i l d r e n c h i l d r e n

Young Unmarried Adults

Young married a d u l t s

A c t i v e mature married a d u l t s

I n a c t i v e e l d e r l y men and women

age 0-7 age 7-15 age 16-25 age 26-40 age

41-60 Over 60 T o t a l

Hale Females

35 35

32 26

19 54

14 15

35 52

10 10

143 194

T o t a l %

70 21

58 17

73 21

29 9

87 26

20 6

337 100

Note: a I n c l u d i n g seventy-four nuclear f a m i l y groups or households o f which twenty-one were without a c t i v e male members.

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T a b l e 5.2. A c t i v i t i e s o f the Baindoang v i l l a g e r s

Yearly events

Month

Season

Church c a l e n d e r ( S c a l e o f a c t i v i t y )

Hen 's s u b ­s i s t e n c e a c t i v i t i e s

Women's s u b s i s ­tence a c t i v i t i e s

Hen and women's a c t i v i t i e s

I n t e n s l t y o f work l o a d (nature o f work)

January jFebruary j March A p r i l May

F i r s t r a i n s

' E a s t e r ( V i l l a g e )

House c o n s t r u c t i o n I I

Weeding & s t a r t i n g yam gardens I

Weeding I

Fence r e p a i r s

I-

Cut r o o f -j i n g m a t e r i a l ' f o r houses i i

Heme Duties

I I ' C o l l e c t i o n ( f i rewood I I s tocks I I I

June

Yam h a r v e s t ­i n g and hunt ! ng

He lp w i th yam

harves t

J u l y J August 'Septemberj October

I I C o n f i r m a t i o n c e r e - ' monies ( i n t e r v i l l a g e )

Wet/dry

I I. I I t I

I n t e r m i t t e n t c l e a r - ' i n g o f new garden ' s i t e s I S o c i a l v i s i t s away I

I I. I I I I

C o l l e c t i n g food & ' f i r e w o o d , i n t e r m i t - ' t e n t c l e a r i n g o f ' new gardens '

November ' December

Dry

'Chr is tmas ' ( r u r a l & ' v i l l a g e )

C l e a r i n g and p l a n t i n g yam gardens C l e a r i n g o ther s u s b s i s t e n c e gardens and b u i l d i n g f i rewood house i f necessary

I . . '_ .

I I

P l a n t i n g yam gardens H e l p i n g w i t h yams, p l a n t mixed c r o p s . C l e a r i n g and p l a n t i n g o t h e r s u b s i s t e n c e gardens

WEEDING OLD GARDENS f 1 f ,

jPrune/weed c o f f e e ' Minor Peak c o f f e e ' gardens I ha rves t ' I ' I

Livestock Maintenance

t f-I Prune/weed c o f f e e ' ' gardens I 1 I '

t + -'Peak c o f f e e ' h a r v e s t ' I I

Median ( V a r i e t y i n d a i l y

exper ience ) _] [ Low

(Hardsh ip due to r a i n )

I 1 J

High (Subs is tence gardening and main peak

c o f f e e ha rves t p r e s s u r e s ) [___ \ I Weekly events (1979-80)

Day

Regular i n t e r ­a c t i o n group(s)

Monday

Household ex ­tended f a m i l y

Tuesday Wednesday

Household ( e x - l Household ex ­tended f a m i l y ) ' tended fami ly v i l l a g e youth I work groups '

Thursday

Household ex ­tended fami ly

1_.

F r i d a y j Saturday

I n t e r - v i l l a g e ' Household community ' youth s p o r t work p a r t i e s ' days

I ( o c c a s i o n a l ) I t

Sunday

V i l l a g e church and p o l i t i c a l meet! ngs

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A More Detailed Socioeconomic Profile of Baindoang Village

Chapter 1 argued t h a t the advent of e l e c t r i c i t y would a f f e c t d i f f e r e n t s o c i a l and economic groups i n the community In d i f f e r e n t ways and t h a t the extent to which e l e c t r i c i t y Impinges on any one I n d i v i d u a l would depend on the f o l l o w i n g f a c t o r s : the i n d i v i d u a l ' s previous l e a r n i n g experience, s o c i a l s t a t u s , l i f e - s t y l e , and income l e v e l * Before e l e c t r i c i t y was made a v a i l a b l e to Baindoang, surveys were c a r r i e d out at the household l e v e l t o c o l l e c t i n f o r m a t i o n on each of these v a r i a b l e s . The main f i n d i n g s of these surveys are now described here, before Stage 2 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t Is described i n some d e t a i l .

Previous Learning Experience. D i f f e r e n c e s among the community members i n work experience, l i t e r a c y , and education were apparent by both age and sex. Due to l a c k of economic o p p o r t u n i t i e s at home, f o r t y - t h r e e of the f i f t y - n i n e men over twenty-five years of age had l i v e d elsewhere f o r the purpose of wage employment. The work experience of the Baindoang men most commonly c o n s i s t e d of u n s k i l l e d l a b o r i n g jobs on p l a n t a t i o n s and i n the gold f i e l d s and of teaching work w i t h the Lutheran m i s s i o n . The men's f a m i l i e s u s u a l l y had not accompanied them to town. In consequence the women of Baindoang g e n e r a l l y d i d not have wage employment experience.

The d i f f e r e n c e s i n the m i g r a t i o n h i s t o r i e s of the men compared t o the women produced an important l i n g u i s t i c d i f f e r e n c e between. A l l the Baindoang men spoke Melaneslan P i d g i n which i s the main form of communication w i t h people o u t s i d e of the immediate area but only a s m a l l m i n o r i t y of women spoke t h i s language. In a d d i t i o n t o t h i s l i n g u i s t i c d i f f e r e n c e by sex, there was a l i n g u i s t i c d i f f e r e n c e by age. The government primary school had r e c e n t l y replaced the mission schools i n the Baindoang area. In consequence, the youth (under 20 y e a r s ) , but not the o l d , spoke E n g l i s h ; and the o l d , but not the young, spoke the mission language of Kote. Everyone, however, shared the same f i r s t language, Nabak. In a d d i t i o n , everyone spoke at l e a s t two languages, but only f i v e people, four men and one woman, could read and w r i t e w e l l i n Melaneslan P i d g i n , and only one of these people, a young man, was l i t e r a t e In E n g l i s h . In s h o r t , the most h i g h l y educated and w o r l d l y members of the community were young men i n the 20 to 40 years of age group, and the l e a s t educated and w o r l d l y members were the women.

S o c i a l Status. The i n t e r n a l s o c i a l s t r u c t u r e of Baindoang i s s c h e m a t i c a l l y shown i n Figure 5.2. A l l of the Baindoang people were Lutherans. The v i l l a g e l e a d e r , known as the "boss mission man" was about 65 years o l d . He had no formal education or wage employment experience. Although not notably wealthy i n cash, he had a l a r g e yam garden and p i g herd, the t r a d i t i o n a l valuables of a "big man," and he owned two houses, one i n the v i l l a g e , which was maintained by the people and used f o r community a c t i v i t i e s , and the other i n the bush (20 minutes' walk), where he and h i s f a m i l y l i v e d most of the time i n order to look a f t e r t h e i r p i g herd.

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VILLAGE

COMMUNICATION CHANNELS

^H^H Strong

Intermediate

Weak

Figure 5.2 Social structure of Baindoang village.

60 PI D P / R S I

The v i l l a g e r leader was always consulted on matters that a f f e c t e d the community as a whole, and he supervised the work of the church leaders who were young educated men and women In the 20 to 40 yeare of age group* The boss mission man a l s o supervised the community's work programs t h a t were run by the government le a d e r s .

The foremost government leade r , known as the c o u n c i l l o r , acted as l i a i s o n between the people and the Nawae L o c a l Council on p o l i t i c a l , economic, and s o c i a l issues and rece i v e d a small bimonthly wage. In 1979-80 the Baindoang c o u n c i l l o r was a man about 65 years o l d who was r e l a t i v e l y wealthy i n cash terms as w e l l as i n t r a d i t i o n a l terms* In 1981 he r e t i r e d a f t e r 13 years of s e r v i c e and was replaced by a younger man of about 35 who was notable f o r h i s superior education as compared w i t h the maj o r i t y of the members of the Baindoang community. The c o u n c i l l o r s had two male a s s i s t a n t s who were v i l l a g e e l d e r s appointed t o these p o s i t i o n s by the people, as were a l l of the v i l l a g e l e a d e r s . The government, through i t s r e l e v a n t departments, a l s o employed two v i l l a g e men as the v i l l a g e ' s a g r i c u l t u r a l o f f i c e r and v i l l a g e h e a l t h a i d post o r d e r l y , both were of whom about 55 years o l d .

Among the other male members of the community was a group of between f i v e and ten older men who, along w i t h the Church, youth, and government lead e r s , formed the c o n s u l t a t i v e group on v i l l a g e a f f a i r s , under whose purview f e e l Stage 2 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t . However, the other male members of the v i l l a g e could v o i c e t h e i r opinions by e n t e r i n g I n t o the debates t h a t arose at community meetings.

The v i l l a g e women lowest s o c i o p o l i t i c a l s t a t u s . They r a r e l y spoke a t meetings; t h i s i s not to say that they had no i n f l u e n c e on community d e c i s i o n s but rather that t h e i r i n f l u e n c e was d i f f i c u l t t o observe.

In summary, the Baindoang community was organized along cooperative l i n e s but wi t h two d i s t i n c t forms of l e a d e r s h i p the Lutheran church and the l o c a l government. During the 1979-81 p e r i o d the l e a d e r s h i p p a t t e r n underwent one change, i n v o l v i n g the replacement of an o l d e r man by a younger man. In a d d i t i o n , the v i l l a g e youth grew i n prominence through the formation of the Baindoang Youth Group, made up of a l l the young men and women between the ages of 16 and 30, which held an intermediate s o c i o p o l i t i c a l p o s i t i o n between the ol d e r men who were not v i l l a g e l e a d e r s and the ol d e r women and c h i l d r e n .

L i f e s t y l e . Except f o r the tasks a s s o c i a t e d w i t h growing c o f f e e and c a r r y i n g f o r l i v e s t o c k , the a c t i v i t y patterns were d i f f e r e n t f o r men and women (Table 5.2). Women were r e s p o n s i b l e f o r meeting the d a l l y food and firewood requirements of the household, performing of a l l home d u t i e s , and c o l l e c t i n g r o o f i n g m a t e r i a l f o r house c o n s t r u c t i o n . Both men, on the other hand, were r e s p o n s i b l e f o r c l e a r i n g and c u t t i n g the bush f o r new food gardens, f o r p l a n t i n g yams, and f o r c o l l e c t i n g of timber f o r house c o n s t r u c t i o n . Both men and women spent a s i g n i f i c a n t p r o p o r t i o n of t h e i r time involved i n community a c t i v i t i e s of both a r e l i g i o u s and n o n r e l i g l o u s nature, but men p a r t i c i p a t e d more a c t i v e l y i n community meetings and work of a s o c i o p o l i t i c a l nature than women.

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In a d d i t i o n t o these l i f e - s t y l e d i f f e r e n c e s by sex, there were c e r t a i n l i f e - s t y l e d i f f e r e n c e s by age- The young people of Baindoang, and e s p e c i a l l y the young men (under age 30), were g e n e r a l l y d i s i l l u s i o n e d w i t h the l i f e s t y l e . I n an attempt to change t h i s , they formed the Baindoang Youth Group i n A p r i l 1979. This group was i n v o l v e d i n s e v e r a l s o c i a l and economic p r o j e c t s i n c l u d i n g a a weekly wage employment scheme, B i b l e c l a s s e s , sports events, and evening s o c i a l events. The Baindoang Youth Group was s t r o n g l y supported by the community at l a r g e because I t recognized t h a t the young people needed a sense of common purpose and a channel though which they could seek t o s a t i s f y t h e i r goals and A s p i r a t i o n s . The youth group, however, f a i l e d t o s u s t a i n i t s involvement i n any of I t s new a c t i v i t i e s because i t s members lacked l e a d e r s h i p , knowledge, and resources f o r t h e i r p r o j e c t s — d e s p i t e i t s high m o t i v a t i o n .

Income L e v e l by Household. The people of Baindoang could o b t a i n money from n o n l o c a l sources In only four ways:

1. Through the r e c e i p t of regular wages. This a p p l i e s t o only two of the t o t a l of seventy-one households, those belonging t o the v i l l a g e A g r i c u l t u r a l O f f i c e r and Health Aid Post Orderly, r e s p e c t i v e l y . They each received K40-45 per f o r t n i g h t or about K1,000 per year.

2. By growing c o f f e e . As shown i n Table 5.3, f i f t y - s e v e n households (80 percent of t o t a l households) engaged i n coffee cash cropping. For a l l but nine of these f i f t y - s e v e n households, however, t h e i r c o f f e e returns t o t a l e d K120 or l e s s per annum. Not s u r p r i s i n g l y , the Baindoang community as a whole (about 350 people) had a modest annual income from c o f f e e of approximately K5,000. Moreover, the c o f f e e was marketed by the growers i n a number of small l o t s , and i n consequence, t h e i r incomes from c o f f e e were obtained i n a number of small i n s t a l l m e n t s (commonly of l e s s than K5 each), w i t h perhaps some 25 percent of t h e i r t o t a l income being obtained during the months from October to December, the peak of the c o f f e e season.

3. By operating a t r a d e s t o r e . Despite a high l e v e l of i n t e r e s t i n thl6 a c t i v i t y among Baindoang households only one of a t o t a l of t h i r t e e n t r a d e s t o r e cooperatives c o n s i s t e n t l y made a p r o f i t . This c o o p e r a t i v e , l o c a t e d at Umbang, was owned by 5 Baindoang households, a l l of which were i n Norkalang and one of which, the one belonging t o the o l d c o u n c i l l o r of Baindoang, a l s o owned one of the l a r g e s t c o f f e e gardens (with an annual income greater than K120).

4. By r e c e i v i n g money and goods from urban r e l a t i v e s . As shown i n Table 5.4, urban r e l a t i v e s proved t o be a major source of goods and cash. This t a b l e shows the g i f t s , In cash or k i n d , r e c e i v e d by a random sample of t h i r t y - s e v e n Baindoang households (50 percent of the t o t a l households) during the twelve months August 1980 to J u l y 1981.

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Table 5.3. Ooffee trees and Incomes by Baindoang household (1979)

Annual income range No. t r e e s a Households ( K i n a ) b ' c

No. %

N i l 14 20 N i l 1 - 200 33 46 0.84 - 60

201 - 400 15 21 61 - 120 401 - 600 5 7 121 - 180 601 - 800 2 3 181 - 240

1001 - 1200 2 3 301 - 360

7 1 u 100

Notes:

a Altogether the community owned 14,385 mature c o f f e e t r e e s which from records of c o f f e e s a l e s kept at the l o c a l t r a d e s t o r e , y i e l d e d a t o t a l of 7017 kg of c o f f e e beans p r i c e d at K4,900.

b 0.48 kg y i e l d per t r e e (7,017 -I 14,385) and 70t per kg.

c 1 Kina - AUS$1.26 - US$1.17 ( i n 1984 p r i c e s ) .

d In three i n s t a n c e s , a household owned c o f f e e t r e e s j o i n t l y w i t h another household, made up of c l o s e r e l a t i v e s of the former household. Consequently the t o t a l sample s i z e I s 71 rather than 74.

S i m i l a r l y , the m a j o r i t y of the other t h i r t y - s e v e n households i n Baindoang whose members were not included i n the u r b a n - t o - r u r a l exchange survey sample were a l s o found t o maintain ad hoc exchange r e l a t i o n s w i t h t h e i r urban r e l a t i v e s . In consequence, urban r e l a t i v e s were a means by which cash income d i f f e r e n c e s were minimized between the aforementioned r e l a t i v e l y w e l l - o f f households (the two wage earning households and f i v e t r a d e s t o r e owners) and the other households i n Baindoang, urban r e l a t i v e s c o n t r i b u t e d as much as K2,7505 per year to the Baindoang peoples' m a t e r i a l wealth.

This f i g u r e i s the t o t a l value of the g i f t s r e c e i v e d by the 37 Baindoang households that were sampled. R2,375 (see Table 5.4) minus the e x c e p t i o n a l b r i d e p r i c e payment t o one household of K1,000 and m u l t i p l i e d by a f a c t o r of two t o provide a f i g u r e that i s r e p r e s e n t a t i v e f o r the Baindaong community as a whole.

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T a b l e 5 . 4 . G i f t s , i n cash or In k i n d , r e c e i v e d from urban r e l a t i v e s by 37 Baindoang househo lds : August 1980 to J j l y 1981, i n c l u s u v e

Household No. I Cash r e c e i v e d

(K)

] T r a v e ^ I c o s t s j (K) t Good ( i tems) I

E s t i m a t e 3

value o f goods (K)

1 Es t imate • t o t a l value 1 o f a l l g i f t s j (K)

1 E s t i m a t e 1 annual incomg 1 from c o f f e e | (K)

1-15 i n c l . 16 17 18 | 20.00

I 34.00 I 51.00

1 ! -1 34.00 1 51.00 I 20.00

1 23 49

1 109

19 20 21

I 17.00 I 34.00

I 51.00

1 axe, 3 t r o u s e r s I I c l o t h e s I

22.50 10.00

! 73.50 I 10.00 I 51.00

1 0 ' 103

0

22 23 24

I 34.00 I 103.00

| 1 axe I I c l o t h e s I j 3 s h i r t s , 2 t r o u s e r s j

7.50 10.00 20.00

! 7.50 i 44.00

123.00

! 30 132 34

25 26 27 28

1 100.00 1 68.00

1 34.00

I 1 r a d i o , 1 k n i f e , c l o t h e s 1 1 c l o t h e s 1 1 food 1

61.00 10.00 5.00

I 61.00 1 178.00 1 5.00

34.00

1 60 ! 91

99 157

29 30 31

I 20.00 1 2 power c a b l e s , c l o t h e s 1 I t r o u s e r s , 2 k n i v e s 1

3 c h i c k e n s , c l o t h e s 1

25.00 12.00 13.00

1 25.00 l 32.00 1 13.00

1 0 I 511

32 I . 1,000.00 I ( e x c e p t i o n a l I b r i d e p r i c e )

1 c l o t h e s 1 10.00 1 1,010.00 1 60

33 34 35 36

| 100.00 1 68.00 1 17-00

1 17-00

1 c l o t h e s 1 1 c l o t h e s , food 1 ' c l o t h e s , food 1 1 1 k n i f e , k i tchenware , c l o t h e s 1

10.00 15.00 15.00 24.00

I 178.00 I 32.00 I 15.00 I 41.00

1 0 ! ^ 1 84

37 [ 237.00 1 2 k n i v e s , 1 axe, 2 s c y t h e s , I 1 2 spades, 1 s u i t c a s e , 1 l a m p , ' 1 4 s h i r t s , 5 l a p l a p s , 1 < 4 b l o u s e s 1

100.00 j 337.00 1 3 *

TOTAL 1,257.00 748.00 370.00 2,375.00 T o t a l minus e x c e p t i o n a l cash g i f t 257.00 748.00 370.00 1,375.00 % t o t a l value 19 54 27 1 00

Notes:

a Household 37 gave p r i c e s f o r each o f the goods i t s members had r e c e i v e d . These and the o ther p r i c e s used per i tem a r e : axe K7.50; bushkn i fe 3 -50 ; s c y t h e 1.50; spade 5 .50 ; t r o u s e r s 5 .00 ; s h i r t 3 .00 ; l a p l a p 3-00; b louse 3-00; r a d i o 40 .00 ; s u i t c a s e 30 .00; lamp 2 . 5 0 ; power c a b l e 5 .00 ; c h i c k e n 1.00. In those i n s t a n c e s when the response merely was c l o t h e s and f o o d , very c o n s e r v a t i v e f i g u r e s were u s e d ; K10 and K5, r e s p e c t i v e l y .

b A l l a i r f a r e s r e p o r t e d a s having been paid f o r by urban r e l a t i v e s were conver ted i n t o monetary va lues u s i n g the a i r l i n e ' s a i r f a r e p r i c e l i s t s f o r tha t p e r i o d .

c Based on census data c o l l e c t e d on mature c o f f e e t r e e s owned by each household and on the assumption tha t each t r e e y i e l d e d 0.48 kg o f c o f f e e f o r which the grower r e c e i v e d K0.70 c o f f e e t r e e s and income by Baindoang household (see T a b l e 6.3, f o o t n o t e 2).

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O v e r a l l , the Baindoang people (and t h e i r neighbors), however, had very small cash incomes. Moreover, what money the people had was spent q u i c k l y and mainly at the one p r o f i t a b l e t r a d e s t o r e .

Expenditure on and Use of Kerosene by Household. One item on which the Baindoang people spent money which was kerosene, which was used s o l e l y f o r l i g h t i n g . A survey was conducted on the Baindoang people's expenditure on and use of kerosene because i t was a n t i c i p a t e d t h a t they would s u b s t i t u t e e l e c t r i c f o r kerosene l i g h t i n g once e l e c t r i c i t y became a v a i l a b l e .

Four surveys were c a r r i e d out i n the s i x t y - s e v e n households t h a t l i v e d i n Main Baindoang during two weeks i n September 1979, and four weeks In March and May 1980, and one week i n J u l y 1980, y i e l d i n g a t o t a l of seven weeks of records. The hypothesis was th a t kerosene usage would f l u c t u a t e throughout the year according t o the peaks and troughs of the c o f f e e season because money from c o f f e e s a l e s was the p r i n c i p a l l o c a l source of income In the v i l l a g e . This hypothesis proved t o be i n c o r r e c t , however, as i s explained below.

The o r i g i n s of the money that the Baindoang households spent on kerosene purchases w i t h i n the seven weeks i n which the surveys were conducted are summarized i n Table 5.5. The l a r g e s t percentage of kerosene purchases, some 28 percent, were made with money obtained from l o c a l vegetable s a l e s . As vegetable marketing i s e x c l u s i v e l y women's work, t h i s f i n d i n g suggests that women have strong preferences f o r r e s i d e n t i a l l i g h t i n g 6 and indeed women were observed commonly to have purchased kerosene and u s u a l l y to have c o n t r o l l e d the burning of lamps. Also apparent from Table 5.5 i s that r e l a t i v e l y few kerosene purchases were made with money obtained from c o f f e e s a l e s . Consequently, kerosene use was not found to vary according t o the peaks and troughs of the c o f f e e season but rather was found t o be f a i r l y uniform throughout the year, a l b e i t at a very low l e v e l .

Because of the Baindoang people's small cash incomes, i t was not s u r p r i s i n g t o l e a r n t h a t Baindoang households bought kerosene at only i r r e g u l a r i n t e r v a l s and i n small amounts, c o s t i n g between K0.10 and K1.0, with K0.2 being by f a r the most common sum. In consequence, the Baindoang community as a whole used uniformly small amounts of kerosene throughout the year w i t h a mean of 4.4 l i t r e s / w e e k and a range from 4.0 t o 4.8 l i t r e s / w e e k . Kerosene was consumed i n small standing lamps by a t o t a l of t h i r t y - t h r e e d i f f e r e n t households, of the remaining households, two-thirds d i d not use kerosene ( s p l i t bamboo being t h e i r s o l e source of l i g h t i n g ) and the remainder were excluded from the survey because t h e i r members d i d not sleep i n the settlement on every night that the survey was conducted.

The women from 43 of the 74 households reported t h a t they r e g u l a r l y attended the l o c a l weekly market i n Umbang to s e l l food but that t h e i r Incomes from t h i s cash-earning a c t i v i t y , which was a means by which money was r e d i s t r i b u t e d among Baindoang households, were l i m i t e d t o l e s s than K1.00 per week. Nevertheless, the women c o n t r o l l e d the money they made from t h e i r vegetable marketing.

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Table 5.5. O r i g i n of money spent on kerosene 3

O r i g i n No. households % T o t a l responses

1. L o c a l vegetable s a l e s 17 28 2. L o c a l business 12 19 3. G i f t from town-based k i n 9 15 4. Wages 8 13 5. Coffee 7 11 6. G i f t from v i l l a g e - b a s e d k i n 7 11 7. Savings 2 3

a Each purchase was u s u a l l y between 20 and 100 toea with the exception of two households t h a t bought t h e i r own 2 0 - l i t r e drums of kerosene, l a r g e l y f o r personal comsumption.

Of the 50 percent of households that using kerosene f o r l i g h t i n g , 42 percent used an average of no more than about 0.5 l i t r e s of kerosene per month and re c e i v e d no more than 46 hours of l o w - l e v e l l i g h t i n g , t h a t i s , an average of 1.6 hours of l o w - l e v e l l i g h t i n g per day. Of the remaining 7 percent of households, 5 percent used twice t h i s amount of kerosene per month, t h a t I s about one l i t r e , and 2 percent used two l i t r e s or more. These l a t t e r households were the two wage-earning households. They received an average of s i x t o ei g h t hours of l o w - l e v e l l i g h t i n g per night because they o f t e n simultaneously ran two small standing lamps. Because of the r e l a t i v e l y high regular use of kerosene by these two households, kerosene consumption f o r the v i l l a g e as a whole d i d not vary s i g n i f i c a n t l y throughout the year.

Summary of Background Information on Baindoang

The Baindoang people were e s s e n t i a l l y subsistence gardeners. Poor access to markets was a c o n s t r a i n t on economic development i n Baindoang. The community's l e v e l of Involvement i n the cash economy was low. Consequently many of the people had l e f t the v i l l a g e f o r the c o a s t a l towns, and the v i l l a g e was f a s t becoming a home f o r the aged, young unmarried women, and c h i l d r e n . The leaders of Baindoang were keen, however, t o Improve the socioeconomic c o n d i t i o n s i n the v i l l a g e and- In the l o c a l r e g i o n . As explained i n chapter 3, they had i n i t i a t e d the community development p r o j e c t s In the v i c i n i t y of Umbang i n the e a r l y 1970s. Moreover, i n 1979 they had supported the formation of a Baindoang Youth Group out of r e c o g n i t i o n of the f a c t that t h e i r young people were not content w i t h t r a d i t i o n a l v i l l a g e l i f e - s t y l e s and a c t i v i t i e s . In 1979 the leaders of Baindoang q u i c k l y accepted the opportunity to have e l e c t r i c i t y introduced Into t h e i r v i l l a g e . With regard t o t h i s development o p t i o n , i n f o r m a t i o n c o l l e c t e d at that time on the l i f e c o n d i t i o n s of the Baindoang people I n d i c a t e d t h a t c a r e f u l a t t e n t i o n must be p a i d to three s o c i a l g r o u p s — o l d e r men, younger men, and women—because these three groups have

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d i f f e r e n t l i f e - s t y l e s , e d u cational backgrounds, and outlooks on l i f e and s o c i a l p o s i t i o n s i n the community. As a r e s u l t , they were l i k e l y t o be a f f e c t e d d i f f e r e n t l y by Stage 2 of the Dmbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t .

RE Project Goals and Objectives

The Villagers Aspirations

In 1979 when Stage 2 of the p r o j e c t was discussed by the leaders of the Umbang region and a r e p r e s e n t a t i v e from the ECED on behalf of the government (the EPU), the Baindoang leaders i n d i c a t e d t h a t they would use e l e t r l c i t y i n Baindoang i n three ways: t o l i g h t t h e i r church and perhaps t h e i r houses, to run a small saw and plane (60 that l o c a l timber could be be t t e r cut f o r use i n house c o n s t r u c t i o n ) , and t o run a grinder ( t o sharpen knives and axes, the main t o o l s used by community members).

The Government's Objectives

From the pe r s p e c t i v e of the government. Stage 2 was a d e l i b e r a t e attempt to t e s t I t s theory t h a t RE, e s p e c i a l l y at the v i l l a g e l e v e l , was not l i k e l y to be v a l i d i n the o v e r a l l context of Papua New Guinea. Indeed, f o l l o w i n g i t s 1979 the debate on Papua New Guinea's f i r s t Energy P l a n , the Papua New Guinea Parliament endorsed the f o l l o w i n g view:

The government should only s u b s i d i z e r u r a l e l e c t r i f i c a t i o n , e s p e c i a l l y at the v i l l a g e l e v e l . I f and when i t has been determined that the b a s i c needs of the community, p a r t i c u l a r l y the supply of food and firewood, are being met, and th a t the expenditure proposed could not provide more e q u i t a b l e b e n e f i t s t o the community i f invested on other v i l l a g e l e v e l developments. Funding of r u r a l e l e c t r i f i c a t i o n should only be considered i f t h i s assessment has been made and the p r o j e c t i s s t i l l , on balance, supported. (Department of Minerals and Energy 1979b, p. 61)

F e a s i b i l i t y Studies and Project Appraisal

D e t a i l e d f e a s i b i l i t y s t u d i e s were not conducted by the EPU or by the ECED, the Implementing agency of Stage 2. Rather the EPU commissioned the author of t h i s paper to c a r r y out a broad-based e v a l u a t i o n of the p r o j e c t . This e v a l u a t i o n was i n the nature of methodological research that was completed too l a t e t o i n f l u e n c e the d e c i s i o n t o proceed w i t h t h i s stage of the p r o j e c t .

Technical Surveys and Project Design

There was some confusion as t o what Stage 2 of the p r o j e c t was t o encompass because the communication was poor among the EPU, the ECED, and the v i l l a g e r s and a l s o because the design of Stage 2 was formulated by the EPU without d e t a i l e d i n f o r m a t i o n on the p h y s i c a l layout of Baindoang v i l l a g e . The misunderstandings among the EPU, the ECED, and the v i l l a g e r s

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were not reso l v e d u n t i l April-May 1980, when a high-voltage (H-V) tra n s m i s s i o n l i n e from the powerhouse i n Umbang to the edge of the v i l l a g e of Baindoang had been constructed.

This H-V l i n e , the £PU*s o r i g i n a l design f o r Stage 2, then was a l t e r e d t o i n c l u d e the c o n s t r u c t i o n of a low-voltage (L-V) g r i d w i t h i n the v i l l a g e i t s e l f . This design change was made by re p r e s e n t a t i v e s of the EPU a f t e r they had v i s i t e d Baindoang and r e a l i z e d that the H-V l i n e , ending as i t d i d adjacent to the Baindoang A i d Post, d i d not meet t h e i r o b j e c t i v e f o r Stage 2, that I s , to provide v i l l a g e r s with an e l e c t r i c i t y supply network. During t h e i r v i s i t to Baindoang the r e p r e s e n t a t i v e s of the EPU a l s o had discovered that the o b j e c t i v e s of the EPU and of the ECED and of the v i l l a g e r s d i f f e r e d . The s t a f f of the ECED had understood that Stage 2 was to i n c l u d e r e t i c u l a t i o n t o some f o r t y Baindoang households f o r r e s i d e n t i a l e l e c t r i c l i g h t i n g , and, because the ECED s t a f f were the l i n k i n g people between the EPU and the Baindoang people, the people had i n i t i a l l y understood t h a t some of them would r e c e i v e e l e c t r i c l i g h t f i t t i n g s f r e e . Upon r e a l i z i n g t h i s , the EPU o f f e r e d the v i l l a g e r s two choices as t o how the a d d i t i o n a l funds f o r Stage 2 could be spent: (1) t o leave Norkalang out of the L-V g r i d system i n i t i a l l y and t o use the money thus saved f o r housewlrlng i n Main Baindoang or (2) t o inc l u d e Norkalang i n the L-V g r i d and l e t the v i l l a g e r s meet a l l housewlrlng c o s t s themselves. A f t e r a short d i s c u s s i o n the Baindoang leaders chose the l a t t e r o p t i o n because i t was more e q u i t a b l e to everyone.

The v i l l a g e leaders made t h i s d e c i s i o n without c o n s u l t i n g the wider Baindoang community, and Indeed they d i d not t e l l the people of t h e i r d e c i s i o n f o r s e v e r a l weeks because they knew the people would be extremely disappointed because most of them had l i t t l e money with which to pay housewlrlng c o s t s . The disappointment of the v i l l a g e r s was r e f l e c t e d i n t h e i r r e f u s a l t o help the ECED par t y , which came to work i n Baindoang on the p r o j e c t i n September 1980. This a t t i t u d e was n o t i c e d by the ECED s t a f f because i t contrasted markedly with the high l e v e l of cooperation they had recei v e d i n the past. By J u l y 1981, however, a f t e r many d i s c u s s i o n s the v i l l a g e r s had begun t o a l t e r t h e i r a s p i r a t i o n s regarding the p r o j e c t and t o accept community s t r e e t l i g h t i n g as an a l t e r n a t i v e to r e s i d e n t i a l l i g h t i n g .

Front-end Project Costs and Hov They Were Net

Both the H-V and L-V transmission l i n e s were overhead systems. The transmission poles were made of s t e e l , with a height of 9 m and th i c k n e s s of 5 cm; they were h e l d up by three stay fencing wires anchored about 3 m from the base of the pole by 1 m ground stakes made of 1 cm galvanized p i p e . The two transformers w i t h i n the H-V transmission l i n e were mounted on two of these poles, r e i n f o r c e d w i t h s t e e l brackets, and s t a b i l i z e d w i t h four stay ways. The government pai d f o r t h i s equipment and provided a nominal sum to the ECED f o r the time i t s s t a f f and students spent working on the p r o j e c t . The u n s k i l l e d labor was provided f r e e by the Baindoang people. The a c t u a l , and f u l l commercial, c o s t s i n 1980 p r i c e s of the HV and LV transmission l i n e s are shown i n Tables 5.6 and 5.7, r e s p e c t i v e l y . Altogether the government spent Rll,973 on Stage 2 of the p r o j e c t . The estimated f u l l commercial cost would have been K12,603.

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Table 5.6. Costs of the 2 km high-voltage transmission l i n e between Umbang and Baindoang

A c t u a l Cost F u l l Commercial Cost Item Kina, 1980 p r i c e s Kina, 1980 p r i c e s

A. Equipment

2 transformers (240v, l l k V , 3-5kW) 200 a 400 18 s t e e l p o les, cross-bars, b o l t s l , 5 0 0 b 1,500 Stay w i r e s , e a r t h i n g stakes, I n s u l a t o r 890 890 Cable w i r e c 330 500 E l e c t r i c a l f i t t i n g s 377 377 d A i r f r e i g h t " 574 574 S p e c i a l t o o l s e 1,183 1,183 A e r i a l survey 17 2 172

T o t a l equipment cost 5,226 5,596

B. Labor

S k i l l e d f surveyor 94 Engineer (Class 1) 72 Electro-mechanical 2,800 448 Engineer (Class 2)

Technician 1,193

T o t a l s k i l l e d labor cost 2,800 2,464

U n s k i l l e d 9 N i l 450

T o t a l cost i n s t a l l e d 8,026 8,510

Notes;

a Reconditioned e x - A u s t r a l i a and obtained second-hand from elcom.

b The s t e e l poles cost K80 each; they were s p e c i a l l y b u i l t by St. Joseph's T e c h n i c a l College, Lae.

c Purchased second-hand from Elcom.

d K0.17 per Kg.

e In c l u d i n g an extension ladder, top h o i s t , s a f e t y b e l t s and s t r a i n e r .

f A c t u a l c o s t . A ground survey was performed by students and s t a f f of the surveying department, UNITECH, at no c o s t . Work on the transmission l i n e I t s e l f was performed by s t a f f and students of the

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ECED of UNITECH. The ECED kept work records of the o n - s i t e l a b o r requirements. I t s s t a f f spent a t o t a l of 1,400 hours and the students spent a t o t a l of 7 4 hours on the p r o j e c t . The ECED charged the government K2,800 f o r t h e i r s t a f f l a b o r , that i s , a nominal r a t e of K2 per hour. A l l a i r f a r e s of s k i l l e d labor were met by UNITECH. F u l l Commercial Cost. The time spent by the ECED of UNITECH on the p r o j e c t included research and development work, i f the p r o j e c t had been implemented as a commercial op e r a t i o n , then the head of the ECED of UNITECH of 1980 has suggested that the f o l l o w i n g s k i l l e d l a b o r would have been r e q u i r e d : (1) a surveyor required to c a r r y out ground survey over 1 week at K60 per week pl u s a i r f a r e of K34 Lae-Umbang r e t u r n . Thus t o t a l cost i s K94; (2) an e x p a t r i a t e engineer Class 1 to act as p r o j e c t s u p e r v i s o r . Here the e x p a t r i a t e engineer i s - assumed to be r e q u i r e d f o r 2 hours per week f o r the 11 weeks t o t a l that i t takes t o complete the p r o j e c t at a consultancy fee r a t e of K30 per hour. Thus cost of labor i s 2 x 30 x 11 = K660 plus 2 a i r f a r e s r e t u r n Lae-Umbang t o check work progress at K34 each. Thus t o t a l cost i s K660 + k34 x 2 «= k728; (3) a n a t i o n a l electro-mechanical engineer Class 2 r e q u i r e d f o r 85 hours, that i s , f o r 2 weeks at the then market annual wage r a t e of RIO,000. Thus labor cost i s K10,000, 52 x 2 - K384 pl u s t r a v e l . T r a v e l assumed to i n c l u d e 2 a i r f a r e s r e t u r n Lae-Umbang at t o t a l c o s t K34 x 2 = K64. Thus t o t a l cost i s K384 + K64 = K448; (4) a n a t i o n a l t e c h n i c i a n required f o r 478 hours, that i s , 11 weeks at annual market wage r a t e of K5,000. Thus labor cost i s K5,000, 52 x 11 = Kl,057 p l u s 4 a i r f a r e s Lae-Umbang r e t u r n at K34 each. Thus t o t a l cost Is K1057 + 4 x K34 o K1193.

g Provided f r e e by the v i l l a g e r s who spend a t o t a l of 1,800 hours, t h a t i s , 225 work days on the p r o j e c t , about h a l f of which were spent on one a c t i v i t y , p u l l i n g the e l e c t r i c i t y cable the 2 km d i s t a n c e from Umbang to Baindoang. Market wage r a t e f o r l o c a l labor I s K2 per day i n 1980 p r i c e s . Thus f u l l commercial cost of u n s k i l l e d labor Is 225 x 2 -R450.

Project Implementation

Because the p r o j e c t was government sponsored, the ECED s t a f f were o b l i g e d to execute i t i n the s h o r t e s t p o s s i b l e time. Stage 2 proceeded according t o a s t r i c t , although s t i l l reasonably f l e x i b l e , t i m e t a b l e compared w i t h that f o r Stage 1. In l a t e 1979 i n p r e p a r a t i o n f o r f i e l d w o r k on the H-V transmission l i n e , the ECED s t a f f conducted ground and a e r i a l surveys of the Baindoang area, s e l e c t e d a route f o r the H-V t r a n s m i s s i o n l i n e , and ordered the necessary equipment. In e a r l y 1980 they devised, an e f f e c t i v e method of e r e c t i n g the poles f o r the l i n e . In March 1980 the work on the H-V l i n e to Baindoang begun, t h i s work was completed and e l e c t r i c i t y became a v a i l a b l e i n Baindoang on 19 A p r i l 1980, an event that the ECED marked by i n s t a l l i n g f r e e of charge two demonstration l i g h t i n g s i n Baindong's bush m a t e r i a l s A i d Post. Soon afterward the d e c i s i o n was taken to extend the Stage 2 design t o i n c l u d e the L-V g r i d . The f i r s t s e c t i o n of t h i s g r i d was b u i l t w i t h i n Main Baindoang i n J u l y 1980, and the Baindoang people then pa i d f o r l i g h t s t o be i n s t a l l e d i n t h e i r church.

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Table 5.7. Cost of the low-voltage g r i d system w i t h i n Baindoang v i l l a g e

A c t u a l cost F u l l commercial k i n a , 1980 cos t k i n a , 1980

Item p r i c e s p r i c e s

A. Equipment - for line 1 In main Baindoang

• 12 s t e e l poles 960 960 I n s u l a t o r s and wire 552 552

. C i r c u i t breakers 192 192

. E l e c t r i c a l f i t t i n g s 310 310 Hardware 76 76

. A i r f r e i g h t 400 400

. S p e c i a l t o o l s 106 106

T o t a l equipment cost L-V l i n e i n main Baindoang 2,596 2,596

B. Equipment for line 2 to Borkalang

. 4 s t e e l poles 320 320

. Wire and i n s u l a t o r s 361 361

. A i r f r e i g h t 160 160

T o t a l equipment cost L-V

l i n e t o Norkalang 841 841

C„ Labor . S k i l l e d 510 a 606 b

. U n s k i l l e d N i l 5 0 c

Total labor cost 510 656

Total cost L-V distribution system 3,947 4,093

Notes;

a The ECED of UNITECH kept records of the time i t s members spent working on the L-V l i n e s . S t a f f members spent a t o t a l of 60 hours and students spend 78 hours, f o r which the ECED charged the government a nominal amount of K510.

b I f the L-V g r i d system had been b u i l t on a commercial b a s i s , the f o l l o w i n g people would have been r e q u i r e d : (1) an e x p a t r i a t e engineer Class 1 to act as superv i s o r , (2) a n a t i o n a l electro-mechanical engineer Class 2 to act as p r o j e c t manager, and (3) a t e c h n i c i a n t o c a r r y out most of the work w i t h the help of l o c a l l a b o r . I f i t i s

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assumed t h a t the L-V l i n e s can be constructed w i t h i n two weeks (based on own o b s e r v a t i o n ) , then the engineer c l a s s i s required 2 hours per week x 2 weeks x K30 per hours = K120; the electro-mechanical engineer c l a s s i s required f o r one week t o t a l at annual wage r a t e RIO,000 and thus labor cost i s 10,000, 52 = K192 plus two r e t u r n a i r f a r e s Lae-Umbang = R68; and the t e c h n i c i a n i s r e q u i r e d f o r 2 weeks on s i t e a t annual wage r a t e R5,000 and thus labor cost i s R5,000, 52 x 2 «= R192 p l u s one a i r f a r e r e t u r n Lae-Dmbang at R34. T o t a l s k i l l e d labor cost thus I s R120 + K192 + K68 + R192 + R34 « R606.

U n s k i l l e d labor of the v i l l a g e r s Is r e q u i r e d t o erect the s t e e l p o l e s . In Stage 2 of the p r o j e c t i t took an average of f i v e v i l l a g e r s and the host agency t e c h n i c i a n one day to construct three poles (own o b s e r v a t i o n ) . Thus t o t a l days to c o n s t r u c t poles i s 16 p o l e s , 3 = 5.3 days, taken as 5, and t o t a l days of u n s k i l l e d l a b o r r e q u i r e d i s 5 x 5 » 25. The f u l l market wage r a t e of u n s k i l l e d labor i n r u r a l areas i s K2 i n 1980 p r i c e s . Thus t o t a l u n s k i l l e d labor cost i s R25 x 2 = R50.

Project Handover and Operation

From the time e l e c t r i c i t y became a v a i l a b l e i n the v i l l a g e , the r e s p o n s i b i l i t y f o r the p r o j e c t became almost e n t i r e l y that of the baindoang people. Thus, as had occurred In Stage 1 of the p r o j e c t , the host agencies kept t h e i r Involvement i n Stage 2 to a minimum—once i t became o p e r a t i v e .

L o c a l d e c i s i o n making on e l e c t r i c i t y matters was slow. Only a f t e r much d i s c u s s i o n and some argument between the o l d e r and younger male members of the community d i d the people agree on a comprehensive course of a c t i o n w i t h regard t o Stage 2 of the p r o j e c t — a f u l l one year a f t e r the e l e c t r i c i t y supply became a v a i l a b l e to the v i l l a g e . Women were e f f e c t i v e l y excluded from t a k i n g an a c t i v e r o l e i n d e c i s i o n making e l e c t r i c i t y because, having tended t o stay i n the v i l l a g e , they knew l e s s about e l e c t r i c i t y than the men. The men's knowledge of e l e c t r i c i t y , however, w3as not g r e a t . Consequently, they were slow to agree on important matters (such as who would be r e s p o n s i b l e f o r the f i n a n c i a l management of the p r o j e c t ) , how connection c o s t s could be financed, and how the e l e c t r i c i t y would be used. The f i n a l d e c i s i o n s t h a t the Baindoang leaders took i n r e l a t i o n t o these are described below.

With regard t o the f i n a n c i a l management of Stage 2, most of the v i l l a g e l e a d e r s i n i t i a l l y favored s p l i t t i n g - o f f from Stage 1 of the p r o j e c t and forming a Baindoang management committee that would open a new bank account and record keeping system. Stage 1 of the p r o j e c t , they s a i d , belonged t o the wider Umbang community whereas Stage 2 belonged t o the baindoang people alone. E v e n t u a l l y , the Baindoang leaders were persuaded by the f i n a n c i a l managers of Stage 1 not to account separately f o r the e l e c t r i c i t y used In Baindoang and Instead t o have the finances f o r Stage 1 and Stage 2 of the p r o j e c t managed j o i n t l y by them because they had the necessary t r a i n i n g took a f t e r the finances p r o p e r l y . The Baindoang people, however, remained r e s p o n s i b l e f o r determining how money was t o be used and spent during Stage 2.

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To finance community uses of the e l e c t r i c i t y , the v i l l a g e l e a d e r s took four steps: (1) they u n s u c c e s s f u l l y sought the a s s i s t a n c e of t h e i r Nawae l o c a l c o u n c i l ; (2) they decided to take over the weekly market h e l d i n Umbang and owned by the Umbang community sc h o o l ; as no one from the school or the other t h i r t e e n v i l l a g e s commented openly on t h i s change, i t can o n l y be assumed t h a t they agreed t o i t ; (3) they asked f o r donations from the people, c o l l e c t e d K 8 0 — s u f f i c i e n t money to purchase two s t r e e t l i g h t s (see below); and (4) they obtained money from the Umbang E l e c t r i c i t y Fund Account, which contained money donated to Stage 1 of the p r o j e c t by town r e l a t i v e s from a l l fourteen v i l l a g e s i n the Umbang reg i o n but mainly from the seven v i l l a g e s south of the yanem r i v e r v a l l e y that had taken over Stage 1 of the p r o j e c t i n 1980. Most of the money subsequently spent on e l e c t r i c i t y uses In Baindoang was obtained from t h i s fund.

While the Baindoang leaders decided t o finance communal uses of e l e c t r i c i t y on a communal b a s i s , they decided t h a t the household should pay fo r t h e i r domestic uses of e l e c t r i c i t y . However, because the K50 c o r r e c t i o n cost f o r r e s i d e n t i a l e l e c t r i c l i g h t i n g was beyond the economic means of most households, the demand f o r e l e c t r i c i t y f o r domestic purposes grew slowly w i t h i n Baindoang during the f i r s t 18 months a f t e r e l e c t r i c i t y became a v a i l a b l e ( t h a t i s , between J u l y 1980 and December 1981).

E l e c t r i c i t y Use In Baindoang

During the 1979-81 p e r i o d , the Baindoang people discussed end-use a p p l i c a t i o n s f o r e l e c t r i c i t y on s e v e r a l occasions, on one occasion a r e p r e s e n t a t i v e from the epu explained the market a v a i l a b i l i t y and c o s t of the v a r i o u s kinds of e l e c t r i c a l equipment i n which the Baindoang people had expressed an i n t e r e s t — l i g h t s , g r i n d e r s , planers, saws, and, t o a l e s s e r extent, p r o j e c t o r s , r e f r i g e r a t o r s and hot water systems. This meeting f a c i l i t a t e d extensive d i s c u s s i o n among the people. Indeed, at i t s completion, an argument developed between the older and younger male members of the Baindoang community. The v i l l a g e leaders and e l d e r s argued that everyone should b e n e f i t from the e l e c t r i c i t y , t h e r e f o r e that communal uses of e l e c t r i c i t y should be uppermost on the l i s t of end-use p r i o r i t i e s , and, i n any case, that people would have to pool t h e i r money i n order t o buy e l e c t r i c a l equipment because I t was expensive compared w i t h t h e i r i n d i v i d u a l economic means.- Although the young men expressed greater i n t e r e s t i n using e l e c t r i c i t y f o r t h e i r own purposes, the v i l l a g e l e a ders won t h i s debate: the people agreed to concentrate on using e l e c t r i c i t y f o r l i g h t and to consider purchasing e l e c t r i c a l equipment at a l a t e r date.

Thus during the f i r s t 18 months a f t e r e l e c t r i c i t y became a v a i l a b l e , the Baindoang people used i t only for l i g h t i n g purposes. By 1982 the t o t a l connected l i g h t i n g loads 612 Watts (see Table 5.8). Community l i g h t i n g accounted f o r 82 percent of the t o t a l l o a d , with l i g h t s I n s t a l l e d In three l o c a t i o n s : (1) the A i d Post (20 p e r c e n t ) , (2) the church (39 p e r c e n t ) ; and (3) the s t r e e t s (23 p e r c e n t ) . R e s i d e n t i a l l i g h t i n g accounted f o r the remaining 18 percent of the t o t a l load, In four out of a t o t a l of 74 houses.

The l i g h t s i n s t a l l e d i n s i d e the a i d post by the ECED, however, were not used. In c o n t r a s t , everyone i n Baindoang, and the v i l l a g e youth i n p a r t i c u l a r , used the l i g h t s i n the church and the s t r e e t s . The church

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T a b l e 5 . 8 . E x i s t i n g l i g h t i n g l o a d s i n Baindoang a t January , 1982

T o t a l connected l o a d

Use Connect ion date L o c a l d e s c r i p t i o n Watts S u b t o t a l % t o t a l

Community

A i d Post A p r i l 1980 2 x 6OH b u l b s , i n t e r n a l 1 power swi tch

120 120 20

Church J u l y 1980 J u l y 1980 J u l y 1980 A p r i l 1981

4 x 40W f l u o r e s c e n t , i n t e r n a l 1 x 60W b u l b , porch 1 double power swi tch 1 x 20W f l u o r e s c e n t

160 60

20 210 39

S t r e e t l i g h t s

Power box

A p r i l 1981 Sept & Dec 1981 September 1980

1 x 20W f l u o r e s c e n t 3

6 x 20W f l u o r e s c e n t 1 power po in t

20 120 140 23

Residential

House 1 v i l l a g e l e a d e r 2 a g r i c u l t u r a l o f f i c e r 3 c o u n c i l l o r 4 e l d e r 5 A i d - p o s t o r d e r l y

A p r i l 1981 Apr U 1981 November 1981 November 1981, Apr -Sept 1981

1 x 60W b u l b , 1 x 13W f l u o r e s c e n t 73 1 x 13W f l u o r e s c e n t 1 x 13W f l u o r e s c e n t 1 x 13w f l u o r e s c e n t 2 x 60W bulb

T o t a l connected l o a d

13 13 13

612

112 18

Notes:

a T h i s was o r i g i n a l l y on the porch of the A i d - p o s t .

b D isconnected by UNITECH s t a f f because i t d i d not meet sa fe ty s tandards .

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l i g h t s were used by the community f o r Sunday morning s e r v i c e s , week day nighttime s e r v i c e s , and o c c a s i o n a l n o n r e l i g l o u s meetings. In a d d i t i o n , the Baindoang Youth Group sometimes used the church as a venue f o r B i b l e study sessions and l i t e r a c y c l a s s e s . The 6treet l i g h t s enabled everyone t o move f r e e l y about the settlement at night and the v i l l a g e youth to p l a y sports i n the evenings and t o hold outdoor s o c i a l a c t i v i t i e s at n i g h t s . Two other reasons the people chose to i n s t a l l s t r e e t l i g h t s were that (1) they f e l t an o b l i g a t i o n t o t h e i r town r e l a t i v e s (who had c o n t r i b u t e d money to Stage 1 of the p r o j e c t ) to make use of the e l e c t r i c i t y and (2) they wished t o avoid the r i d i c u l e of the people from neighboring v i l l a g e s who had been making fun of Stage 2 of the p r o j e c t , suggesting t h a t the g r i d poles were j u s t decoration f o r t h e i r homes.

The four households which has r e s i d e n t i a l l i g h t i n g were: two of the most wealthy households i n cash terms, that of the v i l l a g e a g r i c u l t u r a l o f f i c e r and that of the o l d c o u n c i l l o r , one of the most powerful households, that of the v i l l a g e leader and one household belonging t o a v i l l a g e elder who was n e i t h e r noteably wealthy i n cash terms nor i n f l u e n t i a l i n decision-making In community a f f a i r s .

I t i s important to note, however, that the l i g h t s i n the house b u i l t of permanent m a t e r i a l s belonging to the v i l l a g e a g r i c u l t u r a l o f f i c e r were used only by the o f f i c e r h imself because h i s f a m i l y l i v e d elsewhere. The l i g h t s i n the house of the o l d c o u n c i l l o r were used by h i s daughter and son-in-law who l i v e d ther and not by himself and h i s w i f e because they l i v e d i n the bush. F i n a l l y , the l i g h t s i n the house belonging t o the v i l l a g e leader were not used o f t e n because the house was a guest house and thus vacant most of the time.

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CHAPTER 6

Evaluation of Stage 2 of the Umbang-Baindoang Micro-Hydroelectric Project

This chapter contains an a p p r a i s a l of Stage 2 of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t from two p e r s p e c t i v e s : the Baindoang people's and the government energy planners.'

The Baindoang Peoples* Expectations and Project Outcomes

The two main expectations of the Baindoang people w i t h regard t o Stage 2 of the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t were that the e l e c t r i c i t y would be used (1) t o l i g h t i n g f i r s t t h e i r church and then t h e i r houses and (2) t o run e l e c t r i c a l equipment, s p e c i f i c a l l y , a saw and plane to c o n s t r u c t houses and a grinder to sharpen axes and knives.

Lighting in Church and Houses

The Baindoang people pooled t h e i r money and purchased e l e c t r i c l i g h t s f o r the church, thereby f u l f i l l i n g t h e i r f i r s t goal f o r the Stage 2. On the other hand, very few r e s i d e n t s , four households out of a t o t a l of seventy-four, acquired r e s i d e n t i a l l i g h t i n g w i t h i n the f i r s t eighteen months a f t e r the e l e c t r i c i t y became a v a i l a b l e i n the v i l l a g e .

Although r e s i d e n t i a l l i g h t i n g was a h i g h - p r i o r i t y use f o r e l e c t r i c i t y among Baindoang households, responses of members of a l l s i x t y - e i g h t households In Main Baindoang t o an open-ended question on use p r i o r i t i e s f o r e l e c t r i c i t y revealed t h a t the members of most households considered r e s i d e n t i a l e l e c t r i c l i g h t i n g t o be c o n d i t i o n a l on three t h i n g s : (1) secu r i n g the money to meet connection c o s t s and pay f o r u n i t s of e l e c t r i c i t y used, (2) the s a t i s f y i n g of concerns about s a f e t y and about smoke blackening the l i g h t f i t t i n g s and reducing t h e i r b r i l l i a n c e , and (3) completing improvements to t h e i r houses (see Table 6.1).

The f i n a l design of Stage 2 d i f f e r e d from that of Stage 1 i n that i t d i d not i n c l u d e the connection of any b u i l d i n g s t o the e l e c t r i c i t y supply. Connection c o s t s were to be paid i n f u l l by the v i l l a g e r s . U n f o r t u n a t e l y , however, the K50 connection cost per b u i l d i n g was beyond the economic means of the m a j o r i t y of Baindoang households. In a d d i t i o n t o l a c k of money, the people's a t t i t u d e t o t h e i r housing was a c o n s t r a i n t on t h e i r o b t a i n i n g r e s i d e n t i a l e l e c t r i c l i g h t i n g . Despite the f a c t s that the ECED suggested ways of w i r i n g houses b u i l t of bush m a t e r i a l s to overcome s a f e t y and smoke problems and t h a t the people had seen e l e c t r i c l i g h t s i n s t a l l e d i n houses belonging t o the teachers i n Umbang, they considered the lmpermanency of these houses to be incongruous beside the permanency of e l e c t r i c l i g h t i n g . Many household members i n d i c a t e d that they intended t o wait u n t i l they had renovated t h e i r bush m a t e r i a l s ' houses, or indeed had b u i l t themselves houses of permanent m a t e r i a l s , before connecting them to the power supply. Thus, s o c i a l perceptions played a s i g n i f i c a n t r o l e i n the i n t r o d u c t i o n of household RE use.

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Table 6.1. Responses 3 by Baindoang people to an open-ended question on use p r i o r i t i e s f o r e l e c t r i c i t y , A p r i l 1980

Response %_ of t o t a l responses

1 R e s i d e n t i a l l i g h t s but house improvements f i r s t 2 R e s i d e n t i a l l i g h t s but no money 3 Do not know. I d i d not understand 4 Ask blk men a

5 Do not want r e s i d e n t i a l l i g h t s 6 Do want r e s i d e n t i a l l i g h t s 7 R e s i d e n t i a l l i g h t s but smoke and s a f e t y concerns 8 P r e f e r other personal uses of the e l e c t r i c i t y 0

37 25 21 13 12 12 10

7

Notes:

a When more than one response was given by one person, they were a l l noted. The percentages shown i n the t a b l e against each response thus r e f l e c t s i t s frequency i n the t o t a l responses recorded.

b Prominent men i n community a f f a i r s .

c These uses included purchasing power equipment: a g r i n d e r , a s m a l l , saw and planes.

E l e c t r i c a l Equipment, Principally for Use in House Construction

In Baindoang a l l but one of the houses were constructed of bush m a t e r i a l s . They were rectangular i n shape, had an average s i z e of 33 sq m, and stood approximately 1 m above the ground on wood posts. The w a l l s were made of wooden planks n a i l e d i n t o pole u p r i g h t s that were lashed t o foundation posts w i t h bush ropes. The f l o o r s were made of woven s p l i t bamboo and included a c l a y hearth f o r i n t e r n a l f i r e s . The r o o f i n g m a t e r i a l was " p l t p i t " (Saccharum spontaneum) through which the smoke from I n t e r n a l f i r e s escaped e a s i l y , l e a v i n g a l a y e r of t a r on the I n t e r i o r s i d e that provided added water p r o o f i n g against r a i n . These bush m a t e r i a l s ' houses re q u i r e d r e g u lar maintenance. The l e a s t durable component was the bamboo f l o o r , which required replacement every three to f i v e years; the second l e a s t durable component was the " p l t p i t " r o o f , which began t o leak a f t e r about f i v e to seven years. Although not treated c h e m i c a l l y , the timber was the most durable component. In time, however, the wooden po l e foundations began t o r o t , and the e n t i r e house had to be r e b u i l t every f i f t e e n t o twenty years.

To reduce the time spent on house c o n s t r u c t i o n , s e v e r a l of the Baindoang people and the house b u i l d e r s i n p a r t i c u l a r the men, i n d i c a t e d that they would l i k e to acquire an e l e c t r i c saw and a plane t o b u i l d houses of permanent m a t e r i a l s , an a s p i r a t i o n t h a t was heightened by the i n t r o d u c t i o n of e l e c t r i c i t y to the v i l l a g e . The house of permanent m a t e r i a l s belonging to the a g r i c u l t u r a l o f f i c e r was the same design as the other houses but included s t e e l post foundations f i x e d In cement, a timber

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t i n r o o f , and wooden plank w a l l s and f l o o r s made from a mix of imported w e l l - f i n i s h e d timber and l o c a l l y a v a i l a b l e , roughly hewn timber. However, lack of money with which to buy e l e c t r i c a l equipment and other b u i l d i n g m a t e r i a l s and of l o c a l timber to use In house c o n s t r u c t i o n prevented the Baindoang people from f u l f i l l i n g t h e i r a s p i r a t i o n s f o r permanent houses.

Although wood f o r use i n cooking was not reported t o be In short supply i n the Baindoang area, timber f o r use i n house c o n s t r u c t i o n was not r e a d i l y a v a i l a b l e . For example, twenty-three of a sample of t h i r t y - t h r e e Baindoang men reported that f i n d i n g timber to b u i l d houses was d i f f i c u l t and took one year or more of i n t e r m i t t e n t work, seven reported that timber s u p p l i e s were b a r e l y adequate, and three reported that timber s u p p l i e s were not a problem. The l a t t e r three men obtained t h e i r timber from r e l a t i v e s who l i v e d In the neighboring v i l l a g e of Tukwambet. Due to l a c k of l o c a l timber f o r housing, a few Baindoang men had considered n e g o t i a t i n g f o r timber w i t h people from neighboring v i l l a g e s , l i k e Tukwambet, with the o b j e c t of running a business venture whereby timber would be sent to Baindoang f o r sawing w i t h an e l e c t r i c saw and then r e d i s t r i b u t e d w i t h some of the money remaining w i t h Baindoang people as payment f o r the s a w - m i l l i n g o p e r a t i o n and some of i t r e t u r n i n g to i t s o r i g i n a l owners as w e l l - f i n i s h e d planks. However, the w i l l i n g n e s s of t h e i r neighbors t o enter i n t o t h i s k i n d of r e l a t i o n s h i p w i t h the Baindoang people had not been determined by the end of 1981 when f i e l d w o r k f o r t h i s study was completed.

Furthermore, the e l e c t r i c i t y supply would not have been s u f f i c i e n t to operate an e l e c t r i c saw unless an o v e r a l l e l e c t r i c i t y management p l a n had been adopted. I f the people had been i n a p o s i t i o n t o buy e l e c t r i c a l equipment, a t r a i n i n g program i n uses of e l e c t r i c i t y f o r the e n t i r e community would have been necessary because the small amount of e l e c t r i c i t y t hat was a v a i l a b l e d i d not lend i t s e l f to f l e x i b l e usage, about which more i s s a i d s h o r t l y .

The Government's Objectives and Project Outcomes

From the p e r s p e c t i v e of the government energy planners, Stage 2 of the p r o j e c t was a d e l i b e r a t e attempt to o b t a i n information on a v i l l a g e RE program that could be used i n f u t u r e p o l i c y f o r m u l a t i o n . The i s s u e s t h a t the government was I n t e r e s t e d In i n v e s t i g a t i n g were (1) the c h a r a c t e r i s t i c s of the v i l l a g e and b a s i c f e a t u r e s of the planning and management of the p r o j e c t , which determined i t s s o c i a l and economic impacts and (2) the developmental opportunity costs a s s o c i a t e d with the p r o j e c t , that i s , whether RE was the best development o p t i o n t o have been chosen t o meet the most p r e s s i n g requirements of the Baindoang people at that time.

Determinants of Project Outcomes

Three f a c t o r s have been i d e n t i f i e d as important determinants of the outcomes of Stage 2 of the Dmbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t : (1) the v i l l a g e r s ' l e v e l of income, (2) the p r o j e c t design, and (3) the v i l l a g e r s ' knowledge of e l e c t r i c i t y i n r e l a t i o n t o the approach taken by the government to RE technology t r a n s f e r .

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V i l l a g e r s ' L e v e l of Income. Without the government's f i n a n c i a l support, the Baindoang people would not have rec e i v e d an e l e c t r i c i t y supply i n 1980. As explained p r e v i o u s l y , t h e i r incomes were s m a l l , e s p e c i a l l y compared w i t h the costs of the transmission l i n e s that were b u i l t t o and w i t h i n t h e i r v i l l a g e and a l s o with the cos t s of connection t h a t were to be paid by the v i l l a g e r s i n f u l l . Unfortunately, however, the K50 connection cost per b u i l d i n g was beyond the economic means of the ma j o r i t y of the Baindoang households. Moreover, t h i s f e a t u r e of the design o f Stage 2 had an i n d i r e c t negative impact on i n t e r v i l l a g e r e l a t i o n s i n the Umbang area i n the f o l l o w i n g way.

P r o j e c t Design. Stage 2 of the p r o j e c t was designed by government energy planners i n the absence of information on the p h y s i c a l layout of Baindoang v i l l a g e . In consequence, t h e i r i n i t i a l design f o r the p r o j e c t , which included an H-V transmission l i n e only, d i d not s a t i s f y t h e i r i n t e n t i o n that the p r o j e c t provide the people of Baindoang with an "equal access" power d i s t r i b u t i o n network. Upon r e a l i z i n g t h i s , the energy planners reviewed t h e i r p r o j e c t design and decided to provide a d d i t i o n a l funds f o r a comprehensive L-V g r i d w i t h i n the v i l l a g e i t s e l f . The v i l l a g e r s u n t i l t h i s time had thought that the government's i n i t i a l p r o j e c t design Included s u b s i d i z e d r e s i d e n t i a l l i g h t i n g ; as a r e s u l t of the redesign expenses, the government o f f e r e d the v i l l a g e r s two choices: (1) t o omit Norkalang from the L-V g r i d i n the i n i t i a l Instance and to use the money saved f o r house w i r i n g i n Main Baindoang o r , (2) t o i n c l u d e Norkalang i n the L-V g r i d and to meet a l l house-wiring costs themselves. The Baindoang people chose the second o p t i o n .

When the Baindoang people learned that they would have to meet connection costs themselves, they began t o e x e r c i s e t h e i r Influence over a c t i v i t i e s i n the r e g i o n a l center i n Umbang t o o b t a i n the money to meet these c o s t s . In p a r t i c u l a r , they took over the weekly vegetable market run by the Umbang Community School, and they appropriated money from the Umbang E l e c t r i c i t y Fund Account.

These events d i d not go unnoticed by the leader of the v i l l a g e of Kotlen. Most of the money i n the Umbang E l e c t r i c i t y Fund Account i n mid-1981 had been donated by urban r e l a t i v e s of r e s i d e n t s of the seven v i l l a g e s on south s i d e of the Yanem River V a l l e y ( i n c l u d i n g the v i l l a g e of K o t l e n ) . In 1981 when the l a r g e r p a r t of t h i s money was spent on s t r e e t l i g h t i n g i n Baindoang, the leader of Kotlen began t o di s c u s s w i t h the f i n a n c i a l managers of both Stage 1 and Stage 2, the p o s s i b i l i t y of h i s v i l l a g e withdrawing f i n a n c i a l l y from the scheme. Although the v i l l a g e of Kotlen had not withdrawn i t s support by the end of 1981, the f i n a n c i a l managers were worried that t h i s v i l l a g e , and p o s s i b l y the other remaining v i l l a g e s i n the p r o j e c t , would do so i n the f u t u r e . I f that happened, the l o c a l f i n a n c i a l managers b e l i e v e d that the p r o j e c t would c o l l a p s e .

In b r i e f , Stage 2 of the p r o j e c t caused the Baindoang people to become more s e l f - o r i e n t e d i n t h e i r t h i n k i n g . They began t o focus t h e i r e f f o r t s l e s s on the development of t h e i r r e g i o n a l center and more on the

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development of t h e i r v i l l a g e alone—much to the annoyance of c e r t a i n of t h e i r neighbors. This outcome might have been avoided had c l o s e r a t t e n t i o n been p a i d t o the question of whether Baindoang people would be ab l e to pay house-wiring c o s t s .

Indeed, had the Baindoang people agreed t o the f i r s t o p t i o n o f f e r e d by the government, namely, o m i t t i n g Norkalang from the L-V g r i d system, they would have s a t i s f i e d more q u i c k l y t h e i r second p r i o r i t y goal f o r Stage 2 — t h e attainment of r e s i d e n t i a l l i g h t i n g — a n d thereby r a i s e d more revenue from the p r o j e c t w i t h which t o cover i t s o p e r a t i o n and maintenance c o s t s and make f u r t h e r extensions t o the g r i d . For example, the cost of the L-V g r i d between Main Baindoang and Norkalang was K841, which i s s u f f i c i e n t money t o wire s i x t e e n houses or 23 percent of a l l homes i n Main Baindoang. The annual revenues that would have been r a i s e d from these s i x t e e n households would have been R96, I f i t i s assdumed that each household p a i d the t a r i f f of K0.50 per month set by the people themselves. An a d d i t i o n a l K6 per annum would a l s o have been r a i s e d from the use of the e l e c t r i c l i g h t s i n the church. I f t h i s o p t i o n had been taken, the Baindoang people would not have s e r i o u s l y considered the s t r e e t l i g h t i n g o p t i o n . Instead, i t i s l i k e l y they would have decided that the s i x t e e n households t h a t had been provided w i t h r e s i d e n t i a l e l e c t r i c l i g h t i n g should p o o l money to h e l p pay the house-wiring c o s t s of t h e i r l e s s f o r t u n a t e r e l a t i v e s and, i n t u r n , that the owners of the next set of houses connected to the power supply should pool money to a s s i s t t h e i r l e s s f o r t u n a t e r e l a t i v e s u n t i l u n i v e r s a l r e s i d e n t i a l e l e c t r i c l i g h t i n g had been achieved. In 1979 the v i l l a g e r s considered j u s t such a p l a n , but they decided t o choose the second o p t i o n , Include Norkalang i n the L-V g r i d system, and pay connection c o s t s i n f u l l .

As a r e s u l t , the Baindoang people r a i s e d K30 from four e l e c t r i f i e d households and the church but not from, the s t r e e t l i g h t s because the people could not agree on a method f o r payment of the t a r i f f of K0.50 per month f o r each of the seven s t r e e t l i g h t s . The r e a l i t y was that the Baindoang people knew l i t t l e about e l e c t r i c i t y and thus had d i f f i c u l t y reaching a consensus on t a r i f f p o l i c y and uses of the e l e c t r i c i t y other than f o r l i g h t i n g . To ameliorate t h i s s i t u a t i o n , a promotion and management t r a i n i n g program was r e q u i r e d f o r the community as a whole, not one such as t h a t a c t u a l l y conducted by the government energy planners.

V i l l a g e r s ' Knowledge of E l e c t r i c i t y and the Government's Approach to Technology Transfer. Whereas the older men In Baindoang had the recognized a u t h o r i t y to make d e c i s i o n s on e l e c t r i c i t y matters, they knew l e s s about e l e c t r i c i t y than the younger men. Moreover, the p o l i t i c a l c o n f l i c t , which at times arose between these two groups of men, e s p e c i a l l y over the uses of e l e c t r i c i t y , d i d not r e f l e c t c l e a r l y the i n t e r e s t s and requirements of the women. The women were r e s p o n s i b l e f o r the performance of a l l home d u t i e s , were the main users of t r a d i t i o n a l energy forms, and, consequently, would be most a f f e c t e d by the new energy form.

The government energy planners undertook the task of e x p l a i n i n g t o the Baindoang people the var i o u s ways i n which they might use e l e c t r i c i t y and the cost and a v a i l a b i l i t y of e l e c t r i c a l appliances. However, t h e i r

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promotion campaign consisted of only one t a l k , which proved t o be of l i m i t e d value to the Baindoang people. Although a great deal of Information was communicated to the people i n t h i s meeting, they r e t a i n e d l i t t l e . No one could l a t e r r e l a t e with any p r e c i s i o n what they had been t o l d by the government representatives except that they d i d not have enough money to buy e l e c t r i c a l equipment. Few people were able to r e f r e s h t h e i r memories by r e f e r r i n g to the f a c t sheet on uses of e l e c t r i c i t y , which had been d i s t r i b u t e d by the government r e p r e s e n t a t i v e , because they could not read E n g l i s h . I f the r e p r e s e n t a t i v e had brought photographs of v a r i o u s pieces of e l e c t r i c a l equipment and l e f t f a c t sheets w r i t t e n i n P i d g i n , t h e i r promotion campaign would have had a greater impact.

Developmental Opportunity Costst HE Versus Other Projects for the Village of Baindoang

The advent of e l e c t r i c i t y i n Baindoang r a i s e d many issues and prompted the v i l l a g e leaders to send a message to one of t h e i r Lae-based r e l a t i v e s , a school teacher responsible f o r the establishment of an a g r i c u l t u r a l depot i n Umbang i n 1981, asking him to l e a d a d i s c u s s i o n on the f u t u r e of Baindoang. The school teacher's opinions were respected by the v i l l a g e people because he was b e t t e r educated than they. He came to Baindoang i n June-July 1980 and c h a i r e d a meeting at which he suggest that the e l e c t r i c i t y had been introduced to Baindoang somewhat prematurely because no one had the r e q u i s i t e c a p i t a l and resources to use i t . He used the b u i l d i n g of a house as an analogy and t o l d the leaders of Baindoang that the advent of e l e c t r i c i t y i n the v i l l a g e was akin t o having put the roof on a house before i t s foundations were l a i d . . He asked r h e t o r i c a l l y , The foundations, what are they? Improved a g r i c u l t u r a l p r a c t i c e s , he answered, to conserve the n a t u r a l environment on which everyone depended, to provide food and a d d i t i o n a l meat p r o t e i n from money earned from a g r i c u l t u r e - r e l a t e d commercial p r o j e c t s . (Meeting i n Baindoang between v i l l a g e l e a d e r s , a Lae-based r e l a t i v e , and the author i n J u l y 1980).

The author's views are s i m i l a r to those of the school teacher* .The most pr e s s i n g need of the Baindoang people (and t h e i r neighbors was) an in t e g r a t e d fuelwood cropping, gardening, and l i v e s t o c k p r o j e c t . A close examination of the m a t e r i a l s and resources flows through the v i l l a g e system showed that the Baindoang people depended p r i n c i p a l l y on tre e s the trees f o r t h e i r h e a l t h and we l l - b e i n g . Trees served at l e a s t f i v e important f u n c t i o n s : (1) they helped to maintain s o i l s t a b i l i t y and f e r t i l i t y f o r the production of food crops; (2) they provided a h a b i t a t f o r f l o r a and fauna, some of which were a d d i t i o n a l sources of food; (3) they were used f o r fencing food and c o f f e e gardens against attack by p i g s ; (4) they were a d i r e c t source of f u e l energy for cooking, space heating, and minimal l i g h t i n g ; and (5) they were a source of timber f o r housing (see Figure 6.1).

Since f i r s t contact i n 1971, f i v e major changes have occurred i n the set of human-natural environment r e l a t i o n s h i p s i n the Baindoang area. F i r s t , the people changed from l i v i n g i n small dispersed settlements t o l i v i n g i n a l a r g e permanent settlement or v i l l a g e . Second, the v i l l a g e population s t e a d i l y increased. T h i r d , the t o t a l land area a v a i l a b l e f o r subsistence crop production was reduced permanently as a r e s u l t of the

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igure 6.1 Resources flows through the Baindoang village system.

I n t r o d u c t i o n of the p e r e n n i a l cash crop, c o f f e e . Fourth, the people acquired new, more e f f i c i e n t t o o l s : they replaced t h e i r stone t o o l s with s t e e l axes and knives f o r gardening and with axes, saws, planes, and hammers for c o n s t r u c t i n g houses. F i f t h , the people, i n s t r u c t e d by the Lutherans, a new technique f o r house c o n s t r u c t i o n such that A-frame houses with bamboo w a l l s were replaced by houses with f u l l wood-plank w a l l s .

The o v e r a l l d i r e c t i o n of these changes was from a lower t o a higher l e v e l of environmental e x p l o i t a t i o n by an i n c r e a s i n g number of people. C e r t a i n l y the high rate of out-migration of Baindoang people had helped to a l l e v i a t e population pressures on the land but not before the Baindoang area showed s e v e r a l signs of environmental overload. Indeed, population pressure on the land has l e d to extensive d e f o r e s t a t i o n f o r gardening. The most obvious cummulative Impacts of the l a c k of trees i n the Baindoang area were that s o i l erosion was o c c u r r i n g on a l a r g e s c a l e , fauna was no longer r e a d i l y a v a i l a b l e as a source of meat p r o t e i n , and timber f o r houses was i n short supply. The s i t u a t i o n at Umbang was even worse because trees were no longer a v a i l a b l e e i t h e r f o r firewood or f o r timber.

The approximate K12,000 ( i n 1980) spent by the government on Stage 2 d i d not solve any of these problems; i n f a c t , i t created a d d i t i o n a l problems.

Summary and Conclusion

Stage 2 of the Baindoang m i c r o - h y d r o e l e c t r i c p r o j e c t should not have been undertaken In 1979, i t was too e a r l y for the Baindoang people to make f u l l use of the r e s u l t a n t power. Their a s p i r a t i o n s f o r r e s i d e n t i a l e l e c t r i c l i g h t i n g , p r e f e r a b l y i n newly acquired houses b u i l t of permanent m a t e r i a l s , could not be met. They had no money with which to buy e l e c t r i c a l equipment. They had few trees f o r timber f o r sawmilling and f i n i s h i n g f o r use i n house c o n s t r u c t i o n . As a r e s u l t , they r e s o r t e d t o using the e l e c t r i c i t y f o r community s t r e e t l i g h t i n g , i n l a r g e part to avoid the r i d i c u l e of t h e i r jealous neighbors. These neighbors became angry neighbors, however, when the s t r e e t l i g h t s were i n s t a l l e d because the Baindoang leaders had purchased most of these l i g h t s with money belonging to the wider umbang community. To avoid these negative impacts, a l t e r n a t i v e d i s t r i b u t i o n systems and f i n a n c i n g schemes f o r e l e c t r i c a l other equipment other than those included i n the Stage 2 design of the p r o j e c t , would have been necessary. An i n t e g r a t e d fuelwood cropping, gardening, and l i v e s t o c k p r o j e c t , not RE, was the most pressing need of the Baindoang people and t h e i r n e i g h b o r s — a s witnessed by the however a Baindoang man l o c a t e d i n Lae, who recognized t h i s f a c t and asked the Department of Primary Industry to e s t a b l i s h a r e g i o n a l a g r i c u l t u r a l s t a t i o n i n the v i c i n i t y of Umbang.

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CHAPTER 7

POLICY IMPLICATIONS OF THIS ANALYSIS OF THE UMBANG-BAIHDQABG MICRO-HYDRGBLECTRIClTY PROJECT

As a r e s u l t of the f i n d i n g s of t h i s case study of the Dmbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t and the informat i o n c o l l e c t e d by the author on other RE p r o j e c t s i n Papua New Guinea, i t has become apparent that p l a n n i n g , management, and i n s t i t u t i o n a l f a c t o r s , rather than t e c h n i c a l Issues and f a c t o r s , w i l l be the c r i t i c a l determinants of the success of fu t u r e v i l l a g e m i c r c — h y d r o e l e c t r l c i t y schemes and RE p r o j e c t s i n g e n e r a l . Consequently, t h i s chapter summarizes the planning and management requirements of RE p r o j e c t s .

A Seven-Phase Planning and Management Framework for RE

A seven-phase planning and management framework i s suggested f o r use by planners of fut u r e RE p r o j e c t s . These phases are (1) program p l a n n i n g , (2) p r o j e c t i d e n t i f i c a t i o n and a p p r a i s a l , (3) p r o j e c t s e l e c t i o n (or r e j e c t i o n ) and a c t i v a t i o n , (4) p r o j e c t implementation and handover, (5) p r o j e c t sustainment, (6) p r o j e c t monitoring and e v a l u a t i o n , and (7) program refinement. The main tasks a s s o c i a t e d w i t h each of the seven phases of the proposed framework have a l s o been i d e n t i f i e d and are shown i n Fig u r e 7.1. Each of those tasks and phases i s discussed below. S u f f i c e i t t o say that the main lessons learned from the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t are that more emphasis should be given t o phase 2 ( p r o j e c t i d e n t i f i c a t i o n and a p p r a i s a l ) and phase 5 ( p r o j e c t sustainment) In the f u t u r e and th a t RE p r o j e c t s w i l l r e q u i r e the coordinated inputs of the v a r i o u s o r g a n i z a t i o n s i n v o l v e d i n r u r a l development.

Phase Is Program Planning

As s t a t e d p r e v i o u s l y , RE i n Papua New Guinea i s at the experimental stage. Three b a s i c Issues are under I n v e s t i g a t i o n : (1) the p r i o r i t y t o be placed on RE as p a r t of a balanced r u r a l development program, (2) the choice of RE technology, and (3) the choice of i n s t i t u t i o n a l arrangements f o r the planning and management of RE p r o j e c t s .

With regard t o the f i r s t i s s u e , t h i s a n a l y s i s of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t i n d i c a t e s that e l e c t r i c i t y may not be a high p r i o r i t y need among r u r a l communities and th e r e f o r e that RE should be funded only a f t e r the developmental opportunity c o s t s have been considered. With regard t o the second i s s u e , (the choice of RE technology), t h i s case study has i d e n t i f i e d the p h y s i c a l , s o c i a l , and economic c o n d i t i o n s under which the micro-hydro t e c h n o l o g i c a l a l t e r n a t i v e most probably would be recommended. These c o n d i t i o n s are d e t a i l e d i n Table 7.1. Regarding the t h i r d i s s u e , (the choice of I n s t i t u t i o n a l arrangements f o r the planning and management of RE p r o j e c t s ) , t h i s case study i n d i c a t e s t h a t the c o n v e n t i o n a l engineering approach to RE i s inadequate. I f t r e a t e d as ah i s o l a t e d a c t i v i t y , RE i s u n l i k e l y t o have a major p o s i t i v e impact. The ti m e l y

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1 Program Planning

2 Project Identification + Appraisal

3 Project Se lec t ion + Activation

4 Project Implementation + Handover

5 Project Sustainment

6 Project Monitoring + Evaluat ion

7 Program Ref inement

Figure 7.1 Seven-phase planning and management framework for rural electrification projects.

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Table 7.1. L o c a t l o n a l c o n d i t i o n s under which m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s would be recommended

Physical Criteria

1. Adequate s u p p l i e s of fuelwood f o r cooking and space heating.

2. Adequate food s u p p l i e s .

3. Access i s by road or a short d i s t a n c e by a i r .

4. Access t o communication f a c i l i t i e s .

5. P o s s i b i l i t y of a high-head r u n - o f - t h e - r i v e r scheme.

6. Water d i v e r s i o n f o r micro-hydro without i n t e r f e r e n c e w i t h a l t e r n a t i v e uses of the water, i n p a r t i c u l a r a g r i c u l t u r a l uses.

7. Simple c i v i l works.

8. L o c a t i o n of the the power house can be l o c a t e d c l o s e t o the p o i n t of e l e c t r i c i t y demand such that low voltage transmission l i n e s only are r e q u i r e d .

9. A v a i l a b l e resources f o r use i n productive a c t i v i t i e s t h a t s p e c i f i c a l l y r e q u i r e e l e c t r i c i t y .

Social Crite r i a

1. V i l l a g e r s who have requested a micro-hydro f a c i l i t y and, a f t e r v i s i t i n g an e x i s t i n g micro-hydro scheme, who s t i l l consider i t a high p r i o r i t y development g o a l .

2. A s u i t a b l e l o c a l person a v a i l a b l e t o act as p r o j e c t l e a d e r .

3. A demonstrated a b i l i t y of the l o c a l people to work c o - o p e r a t i v e l y .

4. The owners of the resources r e q u i r e d by the scheme agree with i t ; r e s o l u t i o n of the issue of compensation.

5. Mutual agreement regarding ownership of the scheme and access to f u t u r e power.

6. P r o j e c t goals b e n e f i c i a l to the community as w e l l as to i n d i v i d u a l s .

7. C o n t i r b u t l o n of money by v i l l a g e r s toward equipment costs and l a b o r .

8. The a v a i l a b i l i t y of community members who have an a p t i t u d e f o r a c q u i r i n g the necessary mo t i v a t i o n and s k i l l s t o manage the completed p r o j e c t remain i n the v i l l a g e .

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Economic Criteria

1. A f i r m demand f o r e l e c t r i c i t y of 5kw or more.

2. V i a b l e productive uses f o r the e l e c t r i c i t y and the necessary complementary i n p u t s — c r e d i t , markets, s k i l l s , and t r a i n i n g schemes.

3. The a b i l i t y of the community and i n d i v i d u a l households t o pay connection c o s t s — e i t h e r i n a lump sum or through a predetermined c r e d i t scheme—and a l s o t o pay the t a r i f f s set f o r each use of the e l e c t r i c i t y .

4. The set t a r i f f s generate s u f f i c i e n t revenue to cover i n f u l l at l e a s t operation and maintenance c o s t s .

5. Agreement of the community that i t s members ( e i t h e r as a group or as i n d i v i d u a l s ) w i l l meet a l l end-use e l e c t r i c a l equipment replacement costs and the f u l l c osts associated with any f u r t h e r extensions made to the g r i d a f t e r the p r o j e c t becomes operative and t h a t they w i l l be r e s p o n s i b l e f o r l o c a t i n g an e l e c t r i c i a n to c a r r y out these extensions.

p r o v i s i o n of complementary Inputs w i l l be r equired i f the f u l l p o t e n t i a l of RE i s t o be r e a l i z e d and a RE p r o j e c t i s to be sustained.

RE p r o j e c t s are best seen as part of an i n t e g r a t e d r u r a l development program because they r e q u i r e the coordinated inputs of v a r i o u s o r g a n i z a t i o n s . Table 7.2 summarizes the way i n which planning and management of RE p r o j e c t s could be shared among n a t i o n a l , r e g i o n a l , and l o c a l o r g a n i z a t i o n s . S p e c i f i c conclusions and recommendations f o l l o w .

Phase 2: Project Identification and Appraisal

The d e c i s i o n t o proceed with the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t was made on the b a s i s of l i m i t e d Information on, and a n a l y s i s o f , l o c a l socioeconomic c o n d i t i o n s . In consequence, neither Stage 1 nor Stage 2 of the p r o j e c t have been an u n q u a l i f i e d success; thus more time and e f f o r t should be paid t o p r o j e c t a p p r a i s a l i n the f u t u r e . The three tasks associated w i t h t h i s phase of a RE p r o j e c t are (1) a resource needs assessment, (2) a s o c i a l assessment, and (3) an economic and f i n a n c i a l assessment. To perform these tasks s a t i s f a c t o r i l y , the RE p r o j e c t a p p r a i s a l team needs to cover a wide range of t e c h n i c a l d i s c i p l i n e s i n c l u d i n g not only engineers but a l s o economists and s o c i o l o g i s t s .

Task one, the resource needs assessment, must in c l u d e an examination of a l l of the v i l l a g e r s ' a c t i v i t i e s and products of l a b o r . Two I n t e r r e l a t e d questions need to be given close a t t e n t i o n . F i r s t , should r u r a l e l e c t r i f i c a t i o n or some other r u r a l i n f r a s t r u c t u r e p r o j e c t be given highest p r i o r i t y i n terms of maximally enhancing l o c a l economic and s o c i a l development? Second, would r u r a l e l e c t r i f i c a t i o n or some other r u r a l energy p r o j e c t best s a t i s f y the energy requirements of e x i s t i n g and planned r u r a l a c t i v i t i e s ? This case study of the Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t shows that these two questions should not be

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Table 7.2. Planning and management of s e l f - h e l p m i c r o - h y d r o e l e c t r i c i t y p r o j e c t s i n Papua New Guinea: main a c t i v i t i e s and recommended d i v i s i o n s of r e s p o n s i b i l i t y

Main R e s p o n s i b i l i t y o f : a

A c t i v i t i e s Regional P u b l i c Implement- L o c a l sector i n g agency community

Program d i r e c t i v e s and ground r u l e s x P r o j e c t i d e n t i f i c a t i o n x x x P r o j e c t f o r m u l a t i o n x x

P r e l i m i n a r y p r o j e c t design x x F e a s i b i l i t y s t u d i e s x x b x P r o j e c t a p p r a i s a l x x x

P r o j e c t s e l e c t i o n or r e j e c t i o n x

Finance to cover equipment costs x x Procurement of equipment x Construction x x T r a i n i n g of l o c a l managers and s k i l l e d x

personnel f o r f u t u r e p r o j e c t s

P l a n t o p e r a t i o n and simple r e p a i r s x P l a n t maintenance x x T a r i f f c o l l e c t i o n and record keeping x Account a u d i t s & t a r i f f - p o l i c y s u p e r v i s i o n x x Load promotion and management x x x Transfer of s k i l l s f o r small I n d u s t r i e s x x

P r o j e c t monitoring x x b x P r o j e c t e v a l u a t i o n x x x Refinement of p o l i c y and p l a n x Research and development work x x

Notes:

a An x i n more than one column i n d i c a t e s that the task may be performed j o i n t l y or by any one of the i n s t i t u t i o n s .

b I n i t i a l c e n t r a l i z a t i o n of pre- and p o s t p r o j e c t a p p r a i s a l teams would enable a u n i f i e d approach to Papua New Guinea's emerging r u r a l e l e c t r i f i c a t i o n program. E v e n t u a l l y , as the program matures, however, i t seems d e s i r a b l e that these f u n c t i o n s be d e c e n t r a l i z e d to the r e g i o n a l or p r o v i n c i a l l e v e l .

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overlooked even when the v i l l a g e r s are e n t h u s i a s t i c about e l e c t r i c i t y . The v i l l a g e r s i n the Umbang region chose the m i c r o - h y d r o e l e c t r i c i t y p r o j e c t on the b a s i s of l i m i t e d (and sometimes i n c o r r e c t ) knowledge of what i t was designed to encompass and achieve. This study has shown that e l e c t r i c i t y was not the best development option t o have been s e l e c t e d at that time to meet the most pre s s i n g requirements of the people of the Umbang Community Group and Baindoang v i l l a g e . Their requirements Included more timber f o r housing and fuelwood, Improved a g r i c u l t u r a l p r a c t i c e s , b e t t e r h e a l t h and education s e r v i c e s , and cheaper goods f o r purchase. A e l e c t r i f i c a t i o n p r o j e c t f o r s o c i a l purposes should be funded only a f t e r a c o n s i d e r a t i o n of the developmental opportunity c o s t s .

Task two, the s o c i a l assessment, should determine s u i t a b l e forms of community p a r t i c i p a t i o n . The Umbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t i l l u s t r a t e s the importance of i d e n t i f y i n g the owners of the resources required by the p r o j e c t and I t s p o t e n t i a l b e n e f i c i a r i e s . I f they are not one and the same group, then a t t e n t i o n w i l l need to be p a i d t o the question of compensation t o redress perceived Imbalances. The s o c i a l assessment should a l s o i n v o l v e an examination of the l i k e l y and a c t u a l Impacts of RE on the community. Based on the Information on Stage 2, i t i s evident that any determination of the l i k e l y and a c t u a l Impacts of r u r a l e l e c t r i f i c a t i o n should pay c a r e f u l a t t e n t i o n t o three s o c i a l groups: women, younger men, and older men. These three groups have d i f f e r e n t s o c i a l p o s i t i o n s w i t h i n the community, educational backgrounds, and l i f e - s t y l e s , and, as a r e s u l t , are l i k e l y to be a f f e c t e d d i f f e r e n t l y by the i n t r o d u c t i o n of a new energy form. Stage 2 of the p r o j e c t a l s o suggests that whether an i n d i v i d u a l s w i l l adopt or r e j e c t e l e c t r i c i t y f o r use In domestic a c t i v i t i e s i s dependent on t h e i r income l e v e l s and a l s o on t h e i r perceptions of the environment. Many Baindoang v i l l a g e r s considered the impermanency of a house b u i l t of bush m a t e r i a l s as being incongruous next to the permanency of e l e c t r i c l i g h t i n g . Their proposed s o l u t i o n was t o b u i l d permanent houses f i r s t , before considering connecting them to the power supply. In a d d i t i o n , the study found that v i l l a g e r s adopted e l e c t r i c i t y f o r i r r a t i o n a l reasons such as to provide t h e i r neighbors w i t h v i s i b l e proof that they were of the power.

Task three, the economic and f i n a n c i a l assessment, must include an examination of the costs associated with each of the f e a s i b l e energy technology a l t e r n a t i v e s , p r e f e r a b l y by r u r a l task or end-use. I t should not be assumed that one or another of the renewable technology a l t e r n a t i v e s i s the l e a s t cost option because r e l a t i v e costs change r a p i d l y . The economic assessment should a l s o examine the costs of the complementary inputs necessary to r e a l i z e the assumed b e n e f i t s .

Phase 3: Project Selection (or Rejection) and Activation

The d e c i s i o n to accept or r e j e c t the proposed RE p r o j e c t should be made on the b a s i s of the above three assessments. I f the d e c i s i o n i s i n favor of the RE p r o j e c t , I t w i l l be necessary to determine how I t s associated c o s t s are to be shared between the l o c a l people and the government. The l o c a l people's a b i l i t y to cover p r o j e c t costs i s e n t i r e l y determined by t h e i r l e v e l of involvement i n the cash economy. Experience suggests, however, that a subsidy i n some form w i l l be r equired f o r RE and

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that c r e a t i v e c r e d i t schemes w i l l be necessary to help v i l l a g e r s meet connection c o s t s .

Phase 4: Project Implementation and Handover

I t i s recommended that two p r o j e c t managers be appointed t o oversee the implementation phase of an RE p r o j e c t and that they have q u a l i f i c a t i o n s s i m i l a r to the two managers of the Dmbang-Baindoang m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , who were c e n t r a l to the success of t h i s phase of the p r o j e c t . They provided o n - s i t e s u p e r y i s i o n at a l l times and they c a r r i e d out some of the manual work themselves. Their demonstrated d e d i c a t i o n t o hard work motivated the v i l l a g e r s t o work e q u a l l y hard. The s k i l l s and a t t r i b u t e s r e q u i s i t e of p r o j e c t managers have been l i s t e d p r e v i o u s l y In Table 4.1.

Phase 5s Project Sustainment

The implementers of the Dmbang-Baindoang RE p r o j e c t f a i l e d t o perform the c r u c i a l task of i d e n t i f y i n g b r i g h t and i n n o v a t i v e l o c a l people at the beginning of the implementation phase of the p r o j e c t and then t r a i n i n g them f o r eventual t e c h n i c a l and managerial p o s i t i o n s In the completed p r o j e c t . In summary, the complementary programs required to ensure p r o j e c t success Include,

a t e c h n i c a l t r a i n i n g program f o r the l o c a l operators and maintenance o f f i c e r s t h a t equips them to r e p a i r e l e c t r i c a l equipment and t o keep the hydro f a c i l i t y running smoothly;

an accounting course f o r the f i n a n c i a l managers t h a t focuses p a r t i c u l a r l y on t a r i f f p r i c i n g and c o l l e c t i o n procedures, as w e l l as a l l aspects of c r e a t i v e c r e d i t schemes;

a load promotion and management program f o r the r e c i p i e n t community as a whole;

a small i n d u s t r i e s t r a i n i n g program i n those l o c a t i o n s where the e l e c t r i c i t y i s t o be used f o r productive purposes.

I t I s recommended that these inf o r m a l education programs be formulated at the planning stage of f u t u r e RE p r o j e c t s .

Project Monitoring and Evaluation

Only a f t e r RE becomes a r e a l i t y do v i l l a g e r s begin to appreciate f u l l y the kinds of time and resource adjustments that they must make to b e n e f i t maximally from i t . During the f i r s t year a f t e r the e l e c t r i c i t y supply became a v a i l a b l e In Baindoang, the v i l l a g e r s suddenly found answers t o many e l e c t r i c i t y - r e l a t e d questions. This o b s e r v a t i o n leads t o the recommendation that a v i l l a g e s e l f - h e l p microhydro scheme be supervised c l o s e l y i n i t s f i r s t year and t h a t a f u l l p o s t - p r o j e c t e v a l u a t i o n be undertaken w i t h i n the f i r s t f i v e years. Inc l u d i n g i t s t e c h n i c a l , economic, and s o c i a l aspects.

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PIDP/RSI

Program Refinement

The n a t i o n a l master plan f o r RE should be r e v i s e d In the l i g h t of the f i n d i n g s of each completed RE p r o j e c t . Perhaps the most Important p o l i c y question regarding RE that Papua New Guinea needs t o address i s I t s c a p a c i t y to provide the r e q u i s i t e i n s t i t u t i o n a l support f o r RE and f o r the v i l l a g e m i c r o - h y d r o e l e c t r i c i t y p r o j e c t i n p a r t i c u l a r .

I n s t i t u t i o n a l Support f o r Future V i l l a g e M i c r o - h y d r o e l e c t r i c i t y P r o j e c t s

In 1975 the ECED s t a f f of UNITECH became in v o l v e d i n t h e i r f i r s t v i l l a g e c o n t r o l l e d demonstration m i c r o - h y d r o e l e c t r i c i t y p r o j e c t , the Umbang-Baindoang p r o j e c t . By 1981 when the s t a f f numbered f i v e teachers and f i v e t e c h n i c i a n s , they were r e s p o n s i b l e f o r a t o t a l of s i x p r o j e c t s , and they were r e c e i v i n g an i n c r e a s i n g number of requests f o r m i c r o - h y d r o e l e c t r i c schemes from r u r a l groups throughout the country. This r a p i d expansion of t h e i r microhydro program l e d the ECED s t a f f to consider s e r i o u s l y the question of which i n s t i t u t i o n s should best be i n v o l v e d In the program. They r e a l i z e d that ECED was not s u i t e d to a c t i n g as the host agency f o r such a program and t h a t they would have to l i m i t t h e i r involvement i n f u t u r e v i l l a g e s e l f - h e l p m i c r o - h y d r o e l e c t r i c p r o j e c t s to that of performing the f o l l o w i n g t a s k s : (1) being a v a i l a b l e f o r c o n s u l t a t i o n , (2) p r o v i d i n g students as s e m i s k i l l e d l a b o r f o r implementation and on-the-job t r a i n i n g i n the a p p l i c a t i o n of microhydro technology, and (3) conducting research and development work i n c l u d i n g the design of s u i t a b l e microhydro equipment and a s s i s t i n g i n the s e t t i n g - u p of a small foundry manufacture some equipment. As p a r t of an academic i n s t i t u t i o n , the ECED s t a f f do not have the time and resources t o continue to c a r r y out the planning and management tasks d e t a i l e d above. I f f u t u r e RE p r o j e c t s are to be a success these tasks w i l l have to be taken up by other i n s t i t u t i o n s i n Papua New Guinea.

One p o s s i b l e , common o r g a n i z a t i o n a l s t r u c t u r e f o r the a d m i n i s t r a t i o n of a RE p r o j e c t i s to r e l y on a n a t i o n a l u t i l i t y . Papua New Guinea's E l e c t r i c i t y Commission (ELCOM), however, i s not w e l l placed to assume r e s p o n s i b i l i t y f or an RE program f o r three reasons: f i r s t , because i t p r e s e n t l y has d i f f i c u l t y keeping pace with i t s r a p i d l y expanding urban power systems, l e t alone with an expanding r u r a l power system; second, because i t must operate as a f i n a n c i a l l y s e l f - s u s t a i n i n g o r g a n i z a t i o n and cannot a f f o r d the heavy f i n a n c i a l costs of RE; and, t h i r d , because i t has an e l e c t r i c i t y - c e n t e r e d p e r s p e c t i v e to r u r a l energy planning. Elcom i s l i k e l y to take a conventional engineering approach to p r o j e c t a p p r a i s a l s , as opposed to the broad-based systematic approach recommended by t h i s study.

An a l t e r n a t i v e o r g a n i z a t i o n a l framework f o r RE might i n v o l v e Papua New Guinea's Energy Planning U n i t (EPU) of the Department of M i n e r a l s and Energy (DME). The EPU has people a v a i l a b l e with the r e q u i s i t e s k i l l s t o c a r r y out broad-based a p p r a i s a l s of energy p r o j e c t s . Perhaps the EPU could be strengthened to i n c l u d e a recognizable r u r a l energy d i v i s i o n that could be r e s p o n s i b l e f o r planning a r u r a l energy program and conducting r u r a l energy pre- and p o s t p r o j e c t e v a l u a t i o n s . This i n s t i t u t i o n a l arrangement would enable Papua New Guinea to achieve a u n i f i e d approach to i t s emerging

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PIDP/RSI

r u r a l energy and e l e c t r i f i c a t i o n programs. Of course, the cooperation of p r o v i n c i a l - l e v e l o r g a n i z a t i o n s would be r e q u i r e d .

With regard to microhydro schemes, i t i s conceivable that the P r o v i n c i a l Department of Works and Supply could act as the implementing agency and a l s o provide s k i l l e d engineers t o c a r r y out the r o u t i n e maintenance work on completed p r o j e c t s . This i n s t i t u t i o n a l arrangement has been considered by the Morobe P r o v i n c i a l Government, where most of the e x i s t i n g v i l l a g e microhydro p r o j e c t s are l o c a t e d . I t has a l s o r e c e i v e d support from the North Solomons P r o v i n c i a l Government. Indeed, the Morobe P r o v i n c i a l Government has a s s i s t e d the ECED of UNITECH wi t h the a d m i n i s t r a t i o n of i t s second m i c r o - h y d r o e l e c t r i c i t y p r o j e c t ( i n the v i l l a g e of Romsis) by p r o v i d i n g a c i v i l engineer from i t s Department of Works and Supply to act as p r o j e c t manager during the implementation phase.

The question of who i s t o perform the f i r s t four a s s o c i a t e d w i t h s u s t a i n i n g the p r o j e c t a t the l o c a l l e v e l i s a question t h a t has not y e t been given much a t t e n t i o n . However, Armstrong-Evans (1979) has noted t h a t there are three p r i v a t e o r g a n i z a t i o n s i n Papua New Guinea have a long h i s t o r y of involvement i n microhydro technology and i n s e t t i n g up t e c h n i c a l t r a i n i n g c o l l e g e s , these are the C a t h o l i c Church, the Lutheran Church and the Summer I n s t i t u t e of L i n g u i s t i c s . These three p r i v a t e o r g a n i z a t i o n s could p o s s i b l y become invo l v e d i n government-sponsored RE p r o j e c t s based on microhydro technology. The Appropriate Technology Development I n s t i t u t e (ATDI) w i t h i n the U n i v e r s i t y of Technology, Lae, might be able to help v i l l a g e s to e s t a b l i s h small I n d u s t r i e s based on e l e c t r i c i t y although i t would f i r s t have to increase i n s i z e . 7 The p o s s i b i l i t y a l s o e x i s t s t h a t the P r o v i n c i a l O f f i c e s of Business Development could provide accountancy courses f o r l o c a l f i n a n c i a l managers. These and other i n s t i t u t i o n a l arrangements f o r RE should be explored, and no new m i c r o - h y d r o e l e c t r i c i t y schemes should be s t a r t e d u n t i l a s o l u t i o n has been found t o these s i g n i f i c a n t problems.

The ATDI was s p e c i f i c a l l y set up t o perform the f u n c t i o n of s e l e c t i n g and applying new technologies s u i t a b l e to r u r a l v i l l a g e s .

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PIDP/RSI

Table A.l Comparison of the Life-cycle Costs of a Micro-hydro Scheme and a Photovoltaic System

for the umbang Regional Centre

a

Breakdown

A. Equipment"

( i ) For the f a c i l i t y

Penstock and Dam c Power house Turbine and Generator d

Governing System e

Miscellaneous Hardware £

A i r t r a n s p o r t of equipment

Total Cost of F a c i l i t y

( i i ) For d i s t r i b u t i o n 9

L-V l i n e 1 - powerhouse to school L-V l i n e 2 - school to a i r s t r i p Transport of equipment

Total distribution cost

( i l l ) For I n t e r n a l w i r i n g of the b u i l d i n g s 1

Total equipment cost Installed

Cost, Kina 1984 P r i c e s (lK=Aust $1.26 =US $1.17

3,596 355

4,022 628 449 716

9,766

1,846 916 154

2,916

750

13,432

Labor

( i ) S k i l l e d

S u p e r v i s i o n Survey Design Construction

Engineer (Class 1 ) J

Survey t e c h n i c i a n Draftsperson ( c i v i l ) 1

Electromechanical engineer (Class 2)' D i s t r i b u t i o n / c o n n e c t i o n Licensed e l e c t r i c i a n / f i t t e r A i r t r a v e l expenses of s k i l l e d l a b o r 0

Total Cost of Skilled Labor

( i i ) U n s k i l l e d

C o n s t r u c t i o n / d i s t r i b u t i o n V i l l a g e r s p

Total Labor Cost Installed

A

NIL

14,577

2,400 300 140

9,615 1,442

680

14,577

B

7,800

22,377

93 PIDP/RSI

Table A.l (contd)

C. Annual Operation and Maintenance

Operation and simple repair* 3 149 Labor f o r s k i l l e d maintenance 1" 116 A i r t r a v e l expenses of s k i l l e d l a b o r 8 80

T o t a l Annual Operation and Maintenance 345

Botes:

a Equipment costs are based on 1978 costs of Stage 1 of the

Umbang-Baindoang M i c r o - H y d r o e l e c t r i c i t y P r o j e c t (see Table 5.3) with

the f o l l o w i n g m o d i f i c a t i o n s ,

b Penstock assumed to be purchased at f u l l r e t a i l p r i c e , adjusted f o r

I n f l a t i o n 6 percent i n 1979 and 10 percent per annum t h e r e a f t e r ,

c Powerhouse as f o r Stage 1 adjusted f o r i n f l a t i o n as noted i n b above,

d Imported t u r b i n e and generator as a v a i l a b l e from Tamar Designs,

Tasmania, A u s t r a l i a . High head tu r b i n e K2,821; 8kVA generator K835

pl u s 10 percent f r e i g h t landed i n Lae.

e Imported e l e c t r o n i c governor (up to 6 kW) at K600 and shunt l o a d water

heater (3.6 kW) at K28 from Tamar Designs, Tasmania, A u s t r a l i a ,

f A i r f r e i g h t i s a i r f r e i g h t cost of Stage 1 adjusted f o r i n f l a t i o n as

i n b above and reduced by 10 percent to allow f o r the f a c t that the

imported t u r b i n e and generator i s a l i g h t weight u n i t , designed

s p e c i f i c a l l y to use i n i s o l a t e d r u r a l areas,

g As f o r Stage 1, that i s , l i n e s i n s t a l l e d underground, and adjusted f o r

i n f l a t i o n as o u t l i n e d i n b above,

h I n t e r n a l w i r i n g cost as K250 f o r the school classrooms and K50 f o r

each of the f i v e teachers' houses, one l o c a l v i l l a g e r ' s house, the

94 PIDP/RSI

Notes to Table A.l (contd)

three t r a d e s t o r e s , and the emergency r a d i o . This t o t a l cost i s K250 + K50 x 10 = K750. (Taken from f i l e s kept by the ECED of UNITECH).

i Assuming p r o j e c t l i f e t i m e of 40 weeks (estimated e r r o r f 25 p e r c e n t ) .

j E x p a t r i a t e , required f o r two hours per week f o r t o t a l of f o r t y weeks

at consultancy fee r a t e of K30 per hour taken from 1979 So c i e t y of

P r o f e s s i o n a l Engineers Handbook and adjusted f o r i n f l a t i o n of 10

percent per annum. T o t a l cost thus i s K30 x 2 x 40 = R2,400.

k N a t i o n a l , required f o r f i v e weeks at K60 per week - K300.

1 N a t i o n a l , required f o r seven days at K20 per day = K140.

m N a t i o n a l , as a r e s u l t of on-the-job t r a i n i n g obtained from Stage 1 of

the Umbang-Baindoang M i c r o - H y d r o e l e c t r i c i t y P r o j e c t , required f u l l

time, that i s , f o r t y weeks at p r i v a t e sector s a l a r y of K12,500 per

year. Thus t o t a l cost i s 12,500 52 x 40 = K9,615.

n N a t i o n a l , required f o r ten weeks on p r i v a t e sector s a l a r y of K7,500

per annum. Thus t o t a l cost i s K7500 52 x 10 = Kl,442.

o Assuming a t o t a l of seventeen r e t u r n t r i p s Lae-Umbang i n c l u d i n g : two

t r i p s by Engineer Class 1, two t r i p s by surveyor, ten t r i p s by

Engineer Class 2, and three t r i p s by the e l e c t r i c i a n / f i t t e r . T o t a l

cost thus i s 17 x K40 = K680.

p V i l l a g e r s — C a s e A provided f r e e at no opportunity c o s t . Case B at

f u l l market r u r a l u n s k i l l e d wage r a t e of K3 per day. In Stage 1 of

the Umbang-Baindoang p r o j e c t , v i l l a g e r s worked at l e a s t every F r i d a y

f o r two and one-half years, that i s , 130 t o t a l days. By f a r the

l a r g e s t percentage of these days was spent on the c i v i l works. Here

95 PIDP/RSI

Notes to Table A.l (contd)

I t i s assumed that 120 days (that i s , four days per week f o r t h i r t y weeks of p r o j e c t l i f e t i m e ) were spent on c i v i l works f o r c o n s t r u c t i o n , and ten days (that i s , one day per week f o r the other ten weeks of f o r t y weeks of p r o j e c t l i f e t i m e ) were spent d i g g i n g trenches f o r underground d i s t r i b u t i o n g r i d , with an estimated average of twenty people working at any one time. Therefore t o t a l wo/man days f o r c o n s t r u c t i o n 12 days x 20 wo/man = 2,400 and f o r d i s t r i b u t i o n i s 10 days x 20 wo/man = 200 and t o t a l cost f o r c o n s t r u c t i o n i s 2400 x K3 = K7200 and f o r d i s t r i b u t i o n i s 200 x K3 = R600. Thus t o t a l cost of u n s k i l l e d labor i s K7,200 + K600 = K7,800.

q Includes K12 f o r replacement of b e l t every year (Fore 1980); K20 f o r

replacement of brushes + bearings (every four years at t o t a l cost K80

( I n v e r s i n 1980a); K57 f o r miscellaneous r e p a i r s , i n c l u d i n g grease,

t o o l s , and any unforeseen t e c h n i c a l problems; and R60 as nominal wage

f o r l o c a l operator, which i s comparable to monies re c e i v e d by l o c a l

part-time community workers.

r S k i l l e d engineer v i s i t s every s i x months. Sal a r y i s K7500 per annum

or K29 per work day. Asummlng each v i s i t takes two days, then annual

s k i l l e d l a b o r cost Is K29 x 2 x 2 v i s i t s = K116.

s T r a v e l Lae to Umbang r e t u r n i s K40 x 2 v i s i t s per year = K80 per year.

96 PIDP/RSI

Table A.2 Net Present Value and Annual Expenditure of an Eight KVA Microhydro F a c i l i t y . Kina 1984 P r i c e s . Case A — U n s k i l l e d Labor Valued at Zero

S k i l l e d S k i l l e d labor labor Operation

Equip­ cons­ d i s t r i ­ mainte­ T o t a l Minimum Maximum Year ment t r u c t i o n b u t i o n nance Expend. Expend• Expend.

0 6,716 6,507 781 14,004 11,628 16,380 1 6,716 6,507 781 172 14,167 11,782 16,570 2 - - - 345 345 311 380 3 - - - 345 345 311 380 4 - - - 345 345 311 380 5 - - - 345 345 311 380 6 - - - 345 345 311 380 7 - - - 345 345 311 380 8 - - - 345 345 311 380 9 - - - 345 345 311 380

10 - - - 345 345 311 380 11 - - - 345 345 311 380 12 - - - 345 345 311 380 14 - - - 345 345 311 380 15 - - - 345 345 311 380 16 - - - 345 345 311 3 80 17 - - - 345 345 311 380 18 - - - 345 345 311 380 19 - - - 345 345 311 380 20 — — — 345 345 311 380

To t a l 13,432 13,014 1,562 6,727 34,735 29,309 40,161

Net 12,821 12,422 1,491 2,7 80 29,515 24,700 34,330 Present Value at 10% percent v a r i a t i o n -15.62% 15 .62% discount rate

97 PIDP/RSI

Table A«3 Net Present Value and Annual Expenditure of an Ei g h t KVA Microhydro F a c i l i t y . Kina 1984 P r i c e s . Case B — U n s k i l l e d Labor Valued at F u l l Market Wage Rate

S k i l l e d labor construc­ S k i l l e d t i o n & labor Operation

Equip­ u n s k i l l e d d i s t r i ­ mainte­ T o t a l Minimum Maxlmui Year ment labor bu t i o n nance expend. expend. expend

0 6,716 10,407 781 7,904 14,553 21,255 1 6,716 10,407 781 172 18,076 14,707 21,445 2 - - - 345 345 311 380 3 - - - 345 345 311 380 4 - - - 345 345 311 380 5 - - - 345 345 311 380 6 - - - 345 345 311 380 7 - - - 345 345 311 380 8 - - - 345 345 311 380 9 - - - 345 345 311 380

10 - - - 345 345 311 380 11 - - - 345 345 311 380 12 - - - 345 345 311 380 14 - - - 345 345 311 380 15 - - - 345 345 311 380 16 •- - - 345 345 311 380 17 - - - 345 345 311 380 18 - - - 345 345 311 380 19 - - - 345 345 311 380 20 — — — 345 345 311 380

T o t a l 13,432 20,814 1,562 6,727 42,535 35,159 49,911

Net 12,821 19,868 1,491 2,780 36,960 30,284 43,636 Present Value a t 10% percent v a r i a t i o n -17.34% 17.34% discount r a t e

98 PIDP/RSI

Table A.4 Breakdown of Costs of a S i n g l e P h o t o v o l t a i c Household K i t . Cost, Kina 1984 P r i c e s .

Equipment

(1) For K l t a

Solar panel Arco 16 - 200 35 Watt peak 270

B a t t e r y b Delco 105 - 110 ampere hour 110

Regulator 12 - 20 v o l t , with low voltage cut-out 75

Fluorescent l i g h t 1 x 13 W tube and f i t t i n g 30

Fluorescent l i g h t 1 x 8 W tube and f i t t i n g 0 28

F r e i g h t 52

Total Cost Of PV Kit 565 d

( i i ) For I n t e r n a l Wiring 50

Total Equipment Cost Installed 615

B• Labor

C o n s t r u c t i o n / i n s t a l l a t i o n l i c e n s e d e l e c t r i c i a n e 58

T r a v e l expenses 40

Total Labor dost Installed 100

C. Annual operation and maintenance^ 100

Notes:

a Bulk p r i c e s (>100) from Solar Systems Pty L t d . , Boroko, Port Moresby.

b B a t t e r y contains e l e c t r i c socket to run 12-voIt r a d i o .

c A p o r t a b l e 8-W f l u o r e s c e n t l i g h t w i t h rechargeable b a t t e r i e s i s now

a v a i l a b l e that s u i t s r u r a l peoples' nighttime a c t i v i t y p atterns of

moving about the house and v i l l a g e ,

d This system w i l l give about four hours' l i g h t per day from each of the

eight Watt and 13-Watt f l u o r e s c e n t tubes.

99 PIDP/RSI

Required f o r two days at cost of K7,500 per annum, 260 workdays = K28,8

per day x 2 = K58.

One t r i p per year by n a t i o n a l e l e c t r i c i a n assuming two day v i s i t at K30

per day at t r a v e l cost K40 Lae-Umbang r e t u r n . Thus t o t a l cost i s K30 x

2 + K40 = K100.

100 PIDP/RSI

Table A.5 Net Present Value and Annual Expenditure of a S i n g l e P h o t o v o l t a i c K i t . Kina 1984 P r i c e s

Year Equipment Labor Operation maintenance

T o t a l expend.

Minimum expend.

Maxlmux expend

1 16 5 100 100 815 734 897 2 - - 100 100 90 110 3 - - 100 100 90 110 4 - - 100 26 8 241 295 5 168 100 100 90 110 6 75 - 100 175 158 193 7 16 8 - 100 26 8 241 295 8 - - 100 100 90 110 9 - - 100 100 90 110

10 243 - 100 343 309 377 11 - - 100 100 90 110 12 - - 100 100 90 110 13 - - 100 100 90 110 14 168 - 100 26 8 241 295 15 - - 100 100 90 110 16 75 - 100 17 5 158 193 17 16 8 - 100 268 241 295 18 - - 100 100 90 110 19 - - 100 100 90 110 20 — - 100 100 90 110

T o t a l 1,680 100 2,000 3,780 3,402 4,158

Net 1,089 100 936 2,125 1,193 2,338 Present Value at 10% Percent v a r i a t i o n -10.00% 10.001 discount r a t e

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REFERENCES

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A r a t a , E., 1979. M i c r o - h y d r o e l e c t r i c p r o j e c t s f o r r u r a l development i n Papua New Guinea. Paper prepared f o r Appropriate Technology Development U n i t , U n i v e r s i t y of Technology, Lae (unpublished).

Armstrong-Evans, R.J., 1979. Microhydro c a p a b i l i t y . Report V i s i t to Papua New Guinea from ITDG, 9 King S t . , London. Unpublished. 18pp.

Asian Development Bank, 1977a. A p p r a i s a l of Four M i n i - H y d r o e l e c t r i c Schemes i n Papua New Guinea. Manila, P h i l i p p i n e s .

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C e n t r a l Planning O f f i c e , 1976. N a t i o n a l Development Strategy. Port Moresby.

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Department of Mine r a l s and Energy, 1979a. White Paper. Energy i n Papua New Guinea's Future. Port Moresby, 59pp.

Department of Minerals and Energy, 1979b. Energy P o l i c y and Planning f o r Papua New Guinea. Port Moresby, 64pp.

Dwyer, E.S., 1975. Rural E l e c t r i f i c a t i o n i n Papua New Guinea. Port Moresby: Papua New Guinea E l e c t r i c i t y Commission.

E p s t e i n , B., and K.R.U. Mirow, 1977. Impact on Developing Countries of R e s t r i c t i v e Business P r a c t i c e s of Transnational Corporations i n the E l e c t r i c a l Equipment Industry. A Case Study i n B r a z i l . UN Conference on Trade and Development.

Federman, A., 1982. Commodities C r i s i s : The Year i n Review. South. February: 16:9-12.

Frledmann, E., 1976. Financing energy i n developing c o u n t r i e s . Energy P o l i c y March: 37-49.

Gamser, M.S., 1979. Household Energy Consumption i n Port Moresby. Report 8-80. Port Moresby: Energy Planning U n i t , Department of M i n e r a l s and Energy. 43pp.

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Garnaut, R., M. Wright, and R. C u r t a i n , 1977. Employment, Incomes and Mi g r a t i o n i n Papua New Guinea Towns. Monograph 6. Port Moresby: I n s t i t u t e of Applied S o c i a l and Economic Research, 213pp.

Greenwood, P. and C.W. P e r r e t t , 1979. Baindoang H y d r o - E l e c t r i c Scheme. A Case Study. E l e c t r i c a l and Communications Engineering Departmental Report No. 12/79, Lae, Papua New Guinea.

Gustafsson, H., 1979. E l e c t r i c i t y f o r development: Problems and prospects i n equipment a c q u s i t l o n . Economic and P o l i t i c a l Weekly. 14 (27): 1127-31.

H a r r i s , J . , 1978. The Atzera P r o j e c t . E c o l o g i c a l Management of the Atzera Range A d j o i n i n g Lae, Papua New Guinea: An I n i t i a l Proposal. PNGE/T4• Papua New Guinea Human Ecology Programme CRES, AND. (Unpublished).

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Hayes, P. and W. B e l l o , 1979. The power of power: E l e c t r i f i c a t i o n i n the P h i l i p p i n e s . S o c i a l A l t e r n a t i v e s 1(5):67-71.

Hoffman, H.K., 1978. A l t e r n a t i v e Energy Technologies and T h i r d World Rural Energy Needs: A Case of Emerging Technological Dependency. United Kingdom. Science P o l i c y Research U n i t . U n i v e r s i t y of Sussex. 29pp.

I n v e r s i n , A., 1981. Technical Notes on the Baindoang Micro-hydro and Water Supply Scheme. Appropriate Technology Development I n s t i t u t e Research Se r i e s 2. May. U n i v e r s i t y of Technology, Lae.

Makhij a n i , A., 1976. Energy P o l i c y f o r the Rural T h i r d World. I n t e r n a t i o n a l I n s t i t u t e f o r Environment and Development.

M c K i l l o p , R.F., 1981. A g r i c u l t u r a l policy-making. In Policy-Making i n a New State 1972 to 1977, e d i t e d by J . B a l l a r d . St. L u c i a : U n i v e r s i t y of Queensland Press, p. 23 8-53.

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Oeser, L., 1969. Hohola: The S i g n i f i c a n c e of S o c i a l Networks i n Urban Adaptation o f Women. B u l l e t i n Number 29. New Guinea Research U n i t . ANU, Canberra. 120pp.

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Smith, D.V., Mehta, D.B., and Hayes, P.J., 1983. Report of the Regional Rural E l e c t r i f i c a t i o n Survey to the Asian Development Bank. October. Asian Development Bank, Manila.

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woodward, J . , and Woodward, M., 1975. A P o s s i b l e Small H y d r o - E l e c t r i c Scheme and Other Developments at Umbang S t a t i o n Near Baindoang V i l l a g e . Unpublished. Community Development Report to the Papua New Guinea U n i v e r s i t y of Technology, Lae. On F i l e In the E l e c t r i c a l and Communications Engineering Department.

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World Bank, 1980. Energy i n the Developing Countries. Washington, D.C., 91pp.

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DEMCO

EAST-WEST CENTER The East-West Center is a public, nonprofit educational institution with an international board of governors. Some 2,000 research fellows, graduate students, and professionals in business and government each year work with the Center's international staff in cooperative study, training, and research. They examine major issues related to popu­lation, resources and development, the environment, culture, and communication in Asia, the Pacific, and the United States. The Center was established in 1960 by the United States Congress, which provides principal funding. Support also comes from more than 20 Asian and Pacific governments, as well as private agencies and corporations.

Situated on 21 acres adjacent to the University of Hawaii's Manoa Campus, the Center's facilities include a 300-room office building housing research and administrative offices for an international staff of 250, three resi­dence halls for participants, and a conference center with meeting rooms equipped to provide simultaneous transla­tion and a complete range of audiovisual services.

The Pacific Islands Development Program helps meet the special development needs of the islands through coopera­tive research, education, and training. Its analytical research provides Pacific island leaders with detailed information on alternate strategies for reaching development goals.

PIDP also serves as the secretariat for the Pacific Islands Conference, a regional heads of government organiza­tion, and its Standing Committee, composed of eight island leaders. PIDP initiates its activities in direct response to requests from the Standing Committee and works in close cooperation with the Pacific island governments, ensuring that the focus of each project addresses the islands' needs.

Since 1980, PIDP has conducted research in eight project areas: energy, disaster preparedness, aquaculture, government systems, nuclear waste disposal, indigenous business development, roles of multinational corporations, and regional cooperation.

The Resource Systems Institute (RSI) carries out policy-oriented research on issues in energy and minerals resource assessment, development policy, trade, and economic growth in the Asia and Pacific region. RSI's projects are con­ducted within the context of three major programs: Energy, Minerals Policy, and Development Policy and Inter­national Studies. The current research agenda includes projects on regional energy security, technical and economic assessment of land and marine resources, rural development, and trade and investment patterns. Projects are also under way that examine Pacific Basin economic cooperation, ASEAN regional cooperation, and international relations issues.

Research and related activities are undertaken by RSI project teams consisting of an international research staff, invited scholars, and graduate students. These project teams, working in cooperation with regional research groups, help realize the Center's goals of promoting better relations and understanding among the nations of the region through cooperative study, training, and research.

PACIFIC ISLANDS DEVELOPMENT PROGRAM

RESOURCE SYSTEMS INSTITUTE

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