Embed Size (px)
Citation preview
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 8407
PROJECT COMPLETION REPORT
YUGOSLAVIA
KOSOVO RAILWAY PROJ3CT(LOAN 19?7-YU)
FEBRUARY 28, 1990
Infrastructure Operations DivisionCountry Operations Department IVEurope, Middle East and North Africa Regional Office
This document has a restrcted dstibution and way be used by only In the pedormance ofthei ofIciI dutie Its contents may not othrwie be dislsed World Bank iez1
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
FISCA,L YEAR
January 1 to December 31
CURRENCY EXCHANGE RATES
Name of Currency: Dinar
1980 (Appraisal) US$1 - 24.911981 US$1 - 35.511982 US$1 - 51.321983 US$1 - 94.111984 US$1 - 152.711985 US$1 - 244.461986 (Closing Date) US$1 - 378.761987 US$1 - 769.09
ABBRMEVATIONS
COI - Community of InterestCYR Commnity of Yugoslav RailwaysER - Economic Rate of ReturnICB - International Competitive BiddingIDRs - Less Developed RegionsNTKI- Net Ton-KilometerPKM - Passenger-KilometerPPI - Producer Price IndexRTO - Railway Transport OrganizationSAP - Socialist Autonomou. ProvinceSDK - Social Accounting ServiceSS & TT - Signalling and TelecommunicationsTU - Traffic Units (millions of NTKM
WnE WOSLD BANK YWashmgon. O.C. 20433
USA
February 28, 1990
M_EMORANDUM TO THE EXECUTIVE DIRECTORS AND-THE PRESIDENT
SUBJECT: Project Completion Report on Yugoslavia Kosovo RailwayProject (Loan 1977-YU)
Attached. for information is a copy of a report entitled"Project Completion Report on Yugoslavia - Kosovo Railway Project(Loan 1977-YU)" prepared by the Europe, Middle East and North AfricaRegional Office. No audit of this project has been made by theOperations Evaluation Department at this time.
Attachment
Yves Rovani
By Ram K. Chopra
This document has a nsticted dibution sa may be used by ecipints o* In de pefotm_eof dhcir oMcbWdutLs Its contents may no ot efwe be diosed wihout Wod Dank authoD oS.
FOR OFFICIL USE ONLY
PROJECP COMPJ.ETI0N RzPORT
YUGOSIAVIAKOSOVO RAILWAY PROJECT
(LOAII 1977-YU)_
TABLE OF COTS
Dob.
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Basic Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . -iEvaluation Summary ..................... ... iv-vi
I. INTRODUCTION .... . . . . . . . . . . . . . . . . . . . . . . 1-1. PROJECT PREPARATION AND APPRAISAL . . . . . . . . . . . . . . . 2III. PROJECT IMPLEMENTATION AND COSTS . . . . . . . . . . . . . . . 6IV. OPERATING PERFORMANCE . . . . . . . . . . . . . . . . . . . . . 13V. FINANCIAL PERFORMANCE .... . . . . . . . . . . . . . . . . . 15VI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT . . . . . . . . . . . 18VII. ECONOMIC EVALUATION . . . . . . . . . . . . . . . . . . . . . . 19VIII. CONCLUSIONS .... . . . . . . . . . . . . . . . . . . . . . . 21
1. Actual and Expected Physical Completion . . . . . . . . . . . . 242. Actual and Original Estimates of Project Costs . . . . . . . . . 253. Selected Operating Statistics, 1981-1987 . . . . . . . . . . . . 264. Actual and Forecast Traffic, 1979-1996 . . . . . . . . . . . . 275. Actual and Forecast Traffic of Major
Commodities, 1979-1988 . . . . . . . . . . . . . . . . . . . . 286. Appraisal Forecast and Actual Income Statements 1979-1987 . . . 297. Appraisal Forecast and Actual Cash Flow Statements 1979-1987 . . 308. Appraisal Forecast and Actual Balance Sheets 1979-1987 . . . . . 319. Ex-post Estimates of Economic Rates of Return. . . . . . . . . . 32
-AITACEMEHT
1. Ca._n.ts from the Borrower .................. . 33
IBRD 13136R - Yugoslavia - Transportation InfrastructureIBRD 15417 - Yugoslavia - Transportation Infrastructure Kosovo
This document has a ickd distbutin and may be s by rcipent only in th performanceof thdr offical dutWe Its contents may not otherwise be dbcod wbwut Wodd Book authotn.l
. i -
PROJEC CQHPL2 ON REPORT
YUGOSLAVIAKOSOVO RAILWAY PROJECT
(WOAN 19T7-YU)
This iS the P-ject Completion Report (PCR) for the KosovoRailway Project in Yugo lavia, for which Loan 1977-YU in the amount ofUS$34.0 million was approved on Nay 15, 1981. The loan was closed inDecember 1986, after three extensions of the Closing Date, and a totalamount of US$4.03 million was cancelled on October 28, 1985 and July23, 1987.
The PCR was prepared by the Europe, Middle East and NorthAfrica Regional Office and is based, inter alia, on the StaffAppraisal Report; the Loan, Guarantee, and Project Agreements;supervision reports; correspondence between the Bank and the Borrower;and internal Bank memoranda.
This PCR was read by the Operations Evaluation Department(OED). The draft PCR was sent to the Borrower for comments and theseare attached to the Report as Attachment 1.
- it -
PRDUjECT CQEffitx ggfiO
YUGOSLAVIAKOSOVO RAILWAY PROJECT
(WAN 1977-Y[)
BASIC DATA SHEET
KEY PROJECT DATAActual or
Appraisal CurrentItem Estimates Eltimates
Total Project Cost (US$ million) 66.8 77.4Loan Amount (US$ million) 34.0 29.97 '/Disbursed 34.0 (6/30/85) 29.97 (7/23/87)Cancelled 4.03 1/Repaid 11.72 v/Outstanding 18.25 2/
Physical Completion Date 12/84 5/89Proportion Completed by 12/84 (X) 100 55Proportion of Time Overrun (X) 133Economic Rate of Retutrn (X) 22 10
OTHER PRW ECT DAtA
QriginaLPlan Acual
First Mention in Files 01/20/78Government's Application 02/17/80Negotiations - 02/18-25/81Board Approval 04/30/81 04/30/81Loan Agreement Date 05/15/81 05/15/81Effective Date 09/15/81 11/10/81Closing Date 12/31/84 12/31/86Borrower :Railway Transport Organization PristinaGuarantor :Socialist Federal Republic of YugoslaviaExecuting Agency :Railway Transport Organization PristinaFollow-on Project :None
V/ US$2,900,000 was cancelled on October 28, 1985 and US$1,128,322.40 onJuly 23, 1987.
2t As of April 30, 1989.
iii-
STAFF INYSf(staff weeks)
FY80f EY£1 flU2 FYt FY84~ flk FY86 FY87 FY8TOTL
Preappraisal .3 .3Appraisal 6.3 63.3 69.6Negotiation 19.1 19.1Supervision .5 12.8 6.6 9.7 9.1 11.8 7.2 2.0 59.7Other 2.3 .1 .1 2.6
Total 6.5 84.9 12.8 6.6 9.8 9.1 11.9 7.2 2.0 150.9
MISSION-DATA
No. ofMonrh/ No. of Mission Man- Date of
Missign a Reeks '/ Mabers Weeks enort
Identification 01/79 0.7 1 0.7 01/31/79Preparation 04/79 1.0 3 3.0 06/21/79Appraisal 02/80 L.Q 3 3 02/12/80
p2 6.7
Supervision 07/82 2.3 2 4.6 08/05/82Supervision 03/83 2.3 2 4.6 04/14/83Supervision 08/83 2.6 1 2.6 08/29/83Supervision 10/83 1.4 1 1.4 10/31/83Supervision 01/84 1.4 1 1.4 01/20/84Supervision 07/84 2.1 1 2.1 08/06/84Supervision 03/85 2.7 3 8.1 04/16/85Supervision 10/85 2.2 2 3.2 11/05/85Supervision 07/86 1.3 1 1.3 07/31/86Supervision 10/87 _01 1.0 12/16/87
1.9.3 ! Yos
'l Each mission included supervision of other Yugoslav railway projects.
i iv -
PROtEC COMPEION RlR
YUGOSIAVIAKOSOVO RAILWAY PRWOECT
(LOAN 1977-YU)
Em=LATIN SUMMAY
INTRODUCTION AND BACKGROUND
1. The socio-economic setting against which the project wasidentified and prepared is discussed in paras. 3-18 of the April 7, 1981President's Reoort (PR). Paras. 3.01-3.09 of the March 30, 1981 StafffDpraisal Renort (SAR) describe the status and prospects of the YugoslavRailways, and oaras. 2.01-2.09 describe the transport sector in Kosovo.
OBJECTIVES
2. Intgnded: RTO Pristina's Investment Plan was part of Kosovo'sProvincial Development Plan for 1981-1985 and its principal objective was tomodernize railway facilities in Kosovo so as to improve efficiency, capacityand the competitive position of the railway, and to provide for thesubstantial increase in traffic which would arise from the planned developmentof Kosovo's mineral and industrial potential (PR, paras. 55-56). Achieve:The project works, originally planned to be completed in three years, tookover seven years (PCR para. 5.05). Operational targets were not achieved andstaff increased slightly, contrary to targets agreed at negotiations (PCRparas. 4.01 and 4.03). In addition, financial performance fell far short ofthe targets set at appraisal (PCR para. 5.02). Nevertheless, the projectachieved its basic physical objectives (PCR 8.08) albeit at a higher cost andlong delays leading, in combination with reduced benefits, to a marginal ERR(PCR, para. 7.05).
IMPtEENTATION EXPERIEN
3. The appraised project (SAR, para. 3.03) consistefd of the followingcomponents:
(a) Reconstruction of Kosovo Junction:(b) Procurement of traction. rolling stock and integrated transport
euui?ment;(c) Procurement of signalling and telecommunications systems; and(d) Technical Assistance.
v
4. At the Borrower's request, the Loan Agreement was amended byletters of June 28, 1982, October 5, 1982, and January 3, 1983 (PCR, para.2,09). Comparison between the appraLsed project and the project which emergedafter these amendments is not easy to astablish because the latter consistedof the following Bank-financed components:
(a) Siaalling and telecommunications eauiument on the Lesak-KosovoPolJo-Dieneral Jankovic line and at Kosovo Polie Jtinction.Completion delayed over four years because of problems witnbidding qualification, choice of contractor, and system redAsign(PCR, para. 3.04);
(b) Freight wagpns. diesel motor trains and shunters. snare parts andequinment for diesel depot. Delivered after delays of up to twoyears (PCR, paras. 3.13, 3.14, and 3.15).
(c) Technical assistance. Contract signature delayed until April1984. Two studies completed satisfactorily (PCR, paras. 3.16-3.18).
RESULTS
5. The estimated project cost was US$67..5 million, with about US$34.3million representing foreign costs (SAR, para. 5.07). Actual nrolect cost isUS$77.4 million (PCR, para. 3.19). Comparison of the two figures is notmeaningful because of project scope modifications during implementation (PCR,para. 3.02). Estimated project gompletion (as well as the estimated ClosingDate) was December 31, 1984 (SAR, Annex I, Table 5). Actualpxaiascsj=jtion took place in May 1989 (PCR, para. 3.03), two and a half yearsafter the Closing Date which, after three extensions, had been set at December31, 1986. Thus, the project registered a delay of over four years whoseprincipal causes were an optimistic implementation schedule, procurementproblems and difficulties with land acquisition. Financial Rerformance fellshort of the targets set at appraisal (PCI, paras. 5.02 - 5.04). Asappraised, the project had an eseimted E of 22X (SAR, paras. 4.09). Theamended project has a re-estiated ERR of 10.11 (PCR, rara. 7.05). IeehndcalAssistance In freight operations was successfully implemented while managementreorganization was not implemented until 1988 (PCR, paras. 6.03 and 6.04).
6. The physical equipment provided under the project is expected tobe suitable for RTO Pristina's requirement for the next 15 to 20 years. Thenewly established Planning Department and organization structure shouldprovide a firm base for future development (PCR, para. 8.09). The ex-posteconomic evaluation of the ERR is based on conservative assumptions whichshould be achieved (PCR, para. 7.03).
-vi-
FIDINGS An L&SSMI
7. The PCR confirms the lessons drawn from previous railway projectsin Yugoslavia (ORD Reports no. 563, 3638, 5654, arnd 616$) which demonstratedthe need for allowing sufficient time for implementation. Like previousprojects, this too illustrates the difficulties in securing compliance withcovenants to improve operating efficiency and financial objectives and inrecruitment of qualified staff. Finally, it shows that institutionaldevelopment ought to be undertaken during a time frame much longer than thatof one Bank-financed project.
v 1 -
PROJEcT COMLETION REPORT
YUGOSlAVIAKOSOVO RAIUAAY PROJECT
(LOAM 1977-yM)
1. INTODUC-TIQE
1.01 Yugoslavia is located at a strategic crossroad betweeneastern and western Europe, bounded by seven other countries and the AdriaticSea. As a rasult, Yugoslavia's transport system provides access to the seafor a number of central European countries, as well as connections forinternational traffic between Western Europe, Greece and the Middle East. Thetransport system comprises 9,245 km of railways, 130,000 km of roads of whichabout 48,000 km are primary and regional roads, a sizeable network of inlandand costal waterways, 5 major ports on the Adriatic Sea and 15 airports. Themain trunk railway route, as well as the Trais-Yugoslav Highway, run northwestto southeast in the Sava and Danube valleys where most of the centers ofpopulation and economic activity are located, while the regions to the south,with difficult terrain, have remained underdeveloped in their transportnetwork.
1.02 The Socialist Autonomous Province of Kosovo (SAP Kosovo) issurrounded by mountainous ridges rising to about 2,500 meters. Partly due tothe isolation caused by the difficult terrain, and partly due to economicfactors, the SAP Kosovo remains the poorest and least developed region inYugoslavia. It has the lowest per capita income which is only about one-thirdof the national average, making it part of the officially designated LessDeveloped Regions (LDRs), which receive special attention in channelingnational and external assistance.
1.03 The transport network of the SAP Kosovo consists of 333 kms ofsingle-track railway lines which form only about 3.5X of the national network,about 3,800 km of roads and one airport. Kosovo's railways were operated bythe Railway Transport Organization Belgrade (RTO Belgrade) until the beginningof 1978, when the Railway Transport Organization Pristina (RTO Pristina) wasformed.
1.04 A major policy objective in Yugoslavia's economic planning hasbeen to transfer income from the richer regions, through the Federal budgetand special funds, to the LDRs to accelerate their development to achieve amore balanced regional growth in the country. Other objectives of thepost-war transport policy were: (i) to provide better access to the lesserdeveloped regions in the south; (ii) to increase the capacity of the existingsystem; and (iii) to improve the quality of services. In an effort to helpthe Government achieve some of these sector objectives, the Bank has financed24 transport projects in the last 25 years. These include eight loans for the
-2-
railway sub-sector, thirteen loans for the highway sub-sector, one loan forche Port of Bar, and a multi-modal loan for earthquaske rehabilitation.
1.05 RTO Belgrade had benefited from four Bank railway loans made toYugoslavia but only in the Fifth Railway Project (Loan 1534-YU) was a portion(US$9.0 million) of a US$100 d illion loan alloceated to Kosovo. The KosovoPailway Project aimed at strengthening the newly formed RTO Pristin8, byimproving the capacity and efficiency of its railway network to facilitateexploitation of the mineral resources which were anticipated to generate longdistance bulk traffic.
1.06 This Project Completion Report is based on a report provided bythe Community of Yugoslav Railways (CYR), information collected during amission, supervision reports and a review of Bank files.
II. PROJECT PREPARATION AND APPRAISALOrigin
2.01 Proposals for the Kosovo Railway Project were first made by RTOPristina through the Community of Yugoslav Railways (CYR) in 1978 duringnegotiations of the Fifth Railway Project. It was the Provincial Government'sopinion that RTO Pristins had, in the past, recelved a low share ofinvestments despite growing demand for railvay transport. Obsolete railwayfacilities not only lacked the capacity needed to carry existing and newtraffic, but the newly formed RTO Pristina needed also support forinstitutional improvement in planning and operations. During negotiations forthe Fifth Railway Project, an understanding was reached that the Bank wouldmake every effort to respond to Kosovo's needs and, with Federal andProvincial authorities' cooperation, would ensure that projects whichaddressed the critical development constraints faced by the Province and whichmet the test of economic, financial and technical viability, were broughtforward and financed.'1 In this context, the Kosovo Railway Project wasborn.
Prenaration and A&praisal
2.02 The preparation work addressing the major capacity bottlenecks inKosovo's railway system was undertaken by RTO Pristina. The RTO proposed anInvestment Plan based on the 1981-85 Provincial Developme< Plan and onFeasibility Studies for the reconstruction of the Kosovo Polje Jinction andfor modernization of signalling and telecommunications (SS & TT) equipment onthe lines Lesak-Djeneral Jankovic and Kosovo Polje-Pec-Prizren, and anOperational Plan to serve as a basis for designing the scope cf the project.
M Iemorandum of Understanding dated January 20, 1978.
- 3 -
2.03 An appraisal mission visited Yugoslavia in February 1980 andrecommended that:
- the construction of the proposed passenger station building of theKosovo Polje Junction be postponed beyond 1985 because otherinvestments were regarded as higher priority;
- the design for the diesel depot which appeared unduly costly berevised and construction of the depot in stages match the size ofthe fleet oE locomotives and multiple units;
- the studies on SS & TT address the question of surplus staff whowould be made redundant by modernization of signalling andtelecommunications.
2.04 At the requast of the Bank, representatives from CYR and RTOPristina visited tbe Bank in August 1980 and brought revised Investment andFinancing Plans, Operational Plans, Traffic Forecasts and Feasibility Studiesfor SS & TT on the lines Lesak-Djeneral Jankovic and Kosovo Polje-Pec-Prizren.The visit was necessary because of the need to revise cost and financial datafollowing the June devaluation of the Yugoslav dinar and because ofconflicting and incomplete data which had been supplied during the appraisalmission. The revised documents were discussed at length with the delegation.As a result of Bank advice during preparation and appraisal, the InvestmentPlan was reduced substantially by postponing to the period of the nextinvestment plan the construction of a new station building in Kosovo Polje andacquisition of a motor train and seven coaches. Modernization of signallingand telecommunications on the line Kosovo Polje-Pec-Prizren was postponed bytwo years to be carried out after the proposed SS & TT investments on the mainline Lesak-Djeneral Jankovic. These changes contributed to a more balancedInvestment Plan. All major components for the project were selected on thebasis of their economic and financial viability (paras. 2.07 and 7.05).
2.05 Difficulties in obtaining adequate and consistent data during theappraisal led to the proposal for a study to be undertaken, with the help ofconsultants, for the improvement of the RTO's management structure. The studywas proposed to include relationships with other organizations which providedservices to the RTO on a regular basis. Consultancy assistance was alsoproposed for assistance in planning and controlling freight operations.
2.06 The Kosovo Railway Project was negotiated in Washington inFebruary 1981. The project was again slighl1y redesigned by postponing someelements to be carried out later than scheduled, however, this revaluationresulted in an increase of foreign costs from US$32.5 million to US$34.4million due to the necessity to provide higher price contingencies. TheYugoslav delegation requested and the Bank agreed that the proposed loan beincreased from US$30.0 million to US$34.0 million, to meet estimated projectcost. During negotiations agreement was also reached on the text of a letterunder which CYR would provide the Bank with proposals on appropriate levelp oftariff increases and compensation payments for RTO Pristina. *The loan was
- 4 -
approved by the Board on April 30, 1981 and the Loan Agreement signed on May15, 1981. The loan became effective on November 10, 1981 after a two monthdelay caused by the late formation of the necessary Community of Interest(COI) as a provider of compensation payments. A COI is required in eachRepublic/Province and comprises the RTO and its principal users. The COI'sresponsibilities cover the development and implementation of railway policiesin addition to the provision of compensation payments.
Proiect Descriotion
2.07 The project comprised the 1981-83 slice of the 1981-85 InvestmentPlan of RTO Pristina. The principal components of the project vere:
a) reconstru2tion of the Kosovo Junction which included afreight yard, a diesel locomotive depot, a passenger station,diesel shunters and SS & TT and lightir.g;
b) installation of modern SS & TT on the line Lesak-Djeneral Jankovic(140 km) and the preparation of a system for SS & TT on the lineKosovo Polje-Pec-Prizren linie (110 km);
c) procurement of 4 diesel motor trains and 40 freight wagons; and
d) technical assistance aimed at improving management planning andfreight operations.
2.08 Summaries of the cost estimates are shown below:
a) Cost Estimate - 1981-85 Investment Plan
local Foreign Total------- US$ million--------
Infrastructure 21.4 24.9 46.3Traction & Rolling Stock 6.2 8.4 14.6Other Investments 0.5 0.5 1.0Sub-Total 28.1 33.8 61.9Contingencies 20. 1 1Total Cost 48.2 48.0 96.2
Completion of tho 1976-80 Plan" 3.0 1.8 4.8Grand Total 51.2 49.8 101.0
1/ Completion of track overhaul from the previous plan but financed under theFifth Railway Project.
- -
b) Cost Estimate - 1981-83 Proiect
Local Foreig T,otal----- US$ million-------
Infrastructure 18.0 21.2 39.2Traction and Rolling Stock 2.1 3.6 5.7Other Investments 0,3 O.2 _.5Total 20.4 25.0 45.4Contingencies iLi .8 2.L4Total Project Cost 66.8
Technical Assistance & Training 0.2 .5 O.7Grand Total 33.2 34.3 67.5
2.09 Originally the Bank loan was to finance: (i) 95X of the foreigncosts (US$31.3 million) of signalling and telecommunications equipment andinstallation on the line Lesak-Djeneral Jankovic and for the Kosovo PoljeJunction; (ii) 801 of foreign cost (US$2.0 million) of 40 freight wagons; and(iii) 1001 of foreign costs (US$0.7 million) of technical assistance andtraining. Upon the Borrower's requests the Loan Agreement was amended byletters of June 28, 1982, October 5, 1982 and January 4, 1983, and the Bankfinanced eventually the following items:
PercentLoan Allocation financed(Dollar Eauiv.) bv Bank
SS & TT on the line Lesak-KosovoPolje-Djeneral Jankovic and atKosovo Polje Junction, including 15.93 1001 Fequipment and installation 951 L
Freight Wagons 3.40 1001 F801 L
Diesel Motor Trains 7.98 1001 FDiesel Shunters 1.26 1001 F
801 LSpare Parts 0.41 1001 FEquipment for Diesel Depot 0.81 10O1 FTechnical Assistance 0.08 1001 FTraining 0.10 1001 FCancelled"/ 4.03
F - foreign costs, L - local costs
The US$4.03 million was cancelled as follows - US$1.13 million onon July 23, 1987 and US$2.9 million on October- 28, 1985.
- 6 -
2.10 All goods to be financed under the Bank loan were procured throughInternational Competitive Bidding (ICB) and in accordance with the Bank'sguidelines.
III. PROJECT IMPLEMENTATION AND COSTS
Start-mp
3.01 There was a two-year start-up delay due to: (i) procurementproblems with the supply of SS & TT equipment on the line Lesak-DjeneralJankovic; and (ii) extraordinary difficulties in acquisition of land earmarkedfor the freight yard. These delays affected the construction of the yard,installations of signalling and telecommunications equipment on the lineLesak-Djeneral Jankovic and subsequent reconstruction of track facilities inthe Kosovo Polle passenger station.
Revisions
3.02 When the Railway Transport Enterprise Belgrade was reorganizedinto four separate RTOs in 1978, and its assets divided between the four, RTOPristina was allocated traction and rolling stock which was among the ol& dston the network. Due to lack of foreign exchange to purchase spare parts, RTOPristina suffered from a permanent shortage of traction and rolling stock. InJune 1982, at the request of the CYR and RTO Pristina, additional priorltyitems, most of which had been deleted from the initial Investment Plan due tolack of funds, were re-introduced as a result of a later appreciation of theUS dollar and advantageous prices obtained on the main contract forsignalling. These items were: (i) traction and rolling stock including 3passenger coaches, 2 diesel shunters, 6 diesel locomotives, 141 freightwagons, track maintenance machines and spare parts; (ii) points heatingequipment on the line Lesak-Djeneral Jankovic; and (iii) supervision of thesignalling and telecommunications installations. The purchase of thisadditional equipment was justified on technical and economic grounds and wasmainly for replacement purposes. Despite these revisions, the total estimatedproject costs remained virtually unchanged (US$65.7 million), but theestimated foreign costs component increased by US$1.7 million.
Imolementation Schedule
3.03 General: The Project Implementation Schedule is shown in Table I.Only 55Z of the project was completed by the original Closing Date. It wasrecognized at appraisal that previous projects suffered from lengthy delaysand that the newly established RTO Pristina was the weakest in facilities,operational capability and management. However, the Government of Yugoslaviahad given high priority to assisting Kosovo to developing its infrastructure.To promote this development, it had secured financial and other assistancefrom all Republics to develop a project and requested the Bank duringnegotiations of the Fifth Railway Project to provide additional loan funds forthis purpose. In this climate it was felt that with the technical assistanceto be provided under that project, the Implementation Schedule was reasonable.
- 7 -
This was overly optimistic. The institutional improvements took much longerthan anticipated and the delay in bringing ahotv this strengtheningcontributed to a great extent to the delay ia project implementation (paras.6.01-6.02). This situation was exacerbated by regional political problemswhich made it very difficult to recruit and retain experienced staff. Othermajor causes for the delay which are discussed below, would have resulted,however, in a substantial time overrun even of a reasonable ImplementationSchedule. The project was finally completed in May 1989, four and a halfyears later than planned.
Bank% Fianced Items
3.04 SS & TT: The installation of SS & TT on the line Lesak-DjeneralJankovic experienced a delay of over four ),ars and was completed in 1988while works on connecting the outdoor and indoor signalling equipment in theJunction was estimated to be completed by end-March 1989 and trial operationscarried out by end-May 1989. The major reasons for the delay in the SS & TTinstallations were:
(i) job qualification of a local bidder proved to be very timeconsuming, because the post qualification criteria of the biddingdocuments had been drafted in anticipation that only establishedsignalling companies would bid.
(ii) choice of the contractor on the basis of station track layoutsinstead of complete design documents.
(iii) redesigning of the SS & TT.
a) in the preparation phase, buildings were not preciselylocated and some were placed on difficult locations withrespect to supply facilities and required new buildingpermits due to alterations;
b) change in quantities due to actual topography;
c) new industrial sidings were built after the planning phasein Obilic, Vucitrn and Titova Mitrovica requiringalterations of the signalling design and provision ofadditional equipment;
d) higher protection than planned had to be provided for levelcrossings on existing roads due to higher than expected roadtraffic;
e) after field inspections, the commission in charge ofapproving new railway installations requested additionalsignalling; and
f) when the designs for SS & TT installations in the KosovoPolje passenger station and the freight yard were sent to
the Traffic Institute, Belgrade, for official approval atthe end of 1985, the Institute recommended a change in thetechnique of the indoor equipment from free wiring to astat.dard relay system in order to improve the safety levels.
The requests (d, e and f) were made after the design which was part of thecontract had been completed.
(iv) the main contractor encountered problems with one of its ownsubcontracting units which had run into financial difficulties andstopped carrying out works.
(v) the main contractor did not adhere to his detailed ImplementationSchedule with regard to the time needed to assemble the signallingequ4pment on his premises.
3.05 Freight Yard: Implementation of works on the freight yardsuffered an eighteen-month delay because of extraordinary difficulties in landacquisition. In 1979 the Assembly of the City of Pristina pronounced that theland planned for location of the freight yard and diesel depot was of generalinterest and expropriated the land. When plans for the new freight yardbecame known, local inhabitants built dwellings overnight on the land on whichthe yard was to be situated. The farmers did not allow the contractor tocommence construction until several months later when they received land inexchange for that needed by the RT0 instead of a financial compensation asearlier planned. The revised implementation schedules as agreed with thecontractor provided the completion of the freight yard by May 1984. Worksstarted in July 1983. The freight yard was opened for traffic in November 1984with an auxiliary signalling but a long and severe winter interrupted work onthe new signalling system and the yard's combined station and signallingbuilding. The freight yard was finally completed in 1987.
3.06 Diesel Depot: Two exceptionally long winters impeded generalground works with extensive water supply and drainage as well as thecanalization of a small river. In addition, procurement for the depotmachinery was quite slow and its installation took an unusually long time.Therefore, the depot came into full operation as late as 1987.
3.07 Passenfer Station: Noving freight operations to the new yard inNovember 1984 enabled the reconstruction of the Kosovo Polje passenger stationwhich was partially taken into operation in 1985 and completed in 1987. Thepassenger station building, which was postponed at appraisal and, therefore,not part of the project, was built from late 1984 to 1987 with grants from theProvince of Kosovo.
Other Items
3.08 SS & TT installation on the line Kosovo Polje-Pec-Prizren was notcarried out because feasibility studies presented by the RTO were notsatisfactory to the Bank with regard to the economic and financial viabilityof the planned investments.
-9-
3.09 Clgaing Date Extensions: The initial Project Completion Date wasDecember 1984 but due to the above mentioned delays, the RTO through CYRrequested the Bank and the Bank agreed to three Closing Date extensions inJune 1985, December 1985 and December 1986. The major part of the projectconsisted of the installation of the signalling system. By mid-1985 about 55Zof this work was completed. Due to the nature of signalling works and to thenecessity to maintain compatibility of equipment, the only option available toRTO Pristina was to continue pressure on the contractor to complete the workas soon as possible. This also precluded the Bank from taking remedialactions. The contractor, however, a reputable firm, failed to adhere to aseries of agreed time-tables. The financial situation of the RTO had alsodeteriorated so that granting the extensions was vital to assist thecompletion of the project and to gain, even if delayed, the benefits from theinvestments. At the end of the third extension, some contract work stillremained to be completed. At this stage the undisbursed loan funds werecancelled (para. 3.21) and the RTO continued completion of the project withthe financial assistance of the Province.
Reporting
3.10 Audit reports, submission of certificates of expenditure andprogress reports were constantly delayed. Tne latter were mostly rather poorin quality. The intended role of CYR in providing technical assistance inreporting did not show any results.
Procuremene
3.11 Procurement of all Bank financed items was carried out underInternational Competitive Bidding. Domestic firms were permitted toparticipate in the bidding and accorded a preference of 151, or the customsduties, whichever was lower.
3.12 SS & TT Equipment for Lesak-Dieteral Jankovic Line includingKosovo Polle Junction. The Loan Agreement provided US$31.0 million fordesigning, supply of equipment and its installation. Bids were opened onAugust 20, 1981. Only two Yugoslav covpanies made a bid. However, as bothbids were not responsive and in agretment with the Bank's procurementguidelines, both bids were rejected and the firms were invited to resubmittheir bids on the basis of revised technical specifications and conditions.Both bidders resubmitted their bids and the bid opening was again heldpublicly on November 2, 1981. The evaluation report for the second round atbidding was submitted for Bank's approval by the end of November 1981 and theBank agreed to the proposed award of contract to the lowest evaluated bidderby telex of March 18, 1982. The contract amount was US$22.4 millionequivalent. Prices were fixed for one year and then were to be adjusted forinflation. Repeated requests of the RTO to finance additional equipment(para. 3.02) were accepted by the Bank on the ground that they wereunforeseeable and inevitable adjustments to the basic contract.
- 10 -
3.13 Er,2igt agg.M. The Bank financed 100l foreign costs and 80Xlocal costs for procurement of the freight wagons estimated to cost US$2.2million. The contract to purchase 40 wagons was awarded in June 1982 to aYugoslav firm, which offered better delivery and which, according to the RTO,had a sound record of similar supplies. The price offered was so low that 90wagons could be purchased for the planned expenditure, which the RTOrequested. In July 1982, the Bank aZreed to finance the additional 50 freightwagons which would cover most of the planned purchases for 1984. In October1983, at a time of substantial freight traffic increase and suffering frompermanent shortage of wagons, the RTO requested and the Bank agreed to financeadditional 150 freight wagons. The need was well justified on operationalgrounds and continuing traffic increase. Loan funds were available due to avery advantageous price obtained for the SS & TT contract and the depreciationin the value of the dinar. Contracts for a total of 150 wagons were awardedto one foreign and three Yugoslav bidders in December 1984. All 240 freightwagons were delivered by the end of 1985.
3.14 Diesel Shunters. Equipment for Diesel Denot and Snare Parts. InOctober 1983, RTO Pristina also requested Bank financing of 2 diesel shunters,equipment for the diesel depot and spare parts for locomotives. All of theseitems, with the exception of the spare parts, were included in the projectdescription. The Bank agreed to the proposal in its telex of April 25, 1984.International competitive bids were called for all items except for spareparts. Bid evaluations, awards of contracts and deliveries were carried outwithout any problems. Bid opening for procurement of 2 diesel shunters washeld in August 1984 and contract with a value of US$1.3 million awarded to aforeign bidder, in January 1985, despite applying domestic preference to localbidders. The shunters were delivered in August 1985. With regard to theprovision of spars parts at a total value of US$400,000, the RTO requested andthe Bank agreed by telex of August 13, 1984, to purchase the parts as far aspossible directly from those firms, which were awarded contracts under ICBcarried out as part of the Sixth Railway Project (Loan 2336-YU) provided thatthe firms were willing to sell under unchanged conditions and price. Thesmall amount of the part not covered by this arrangement was purchased after adirect call for bids from all bidders who had participated in the previousICB. The spare parts were delivered in 1985. Bids for the supply of dieseldepot equipment were opened in November, 1984. Contracts were awarded to oneYugoslav and four foreign firms in February 1985 for a total value of US$1.4million. Delivery of equipment was completed by December 1986.
3.15 Diesel Wult2le Units. Because of the favorable pricereceived on the SS & TT contract and the lower dollar/dinar rate, US$10.9million remained unallocated in the Loan Agreement under the signallingcategory. For this reason, the RTO requested in June 1982 that the Bankallocate US$5.0 million to a new category for diesel multiple units (DMUs) towhich the Bank agreed. Bids to supply 4 three-unit diesel multiple units wereopened on February 7, 1983. The Bank agreed to the proposed award of contractto a local bidder by telex of May 12, 1983. The value of the contract wasUS$4.3 million. In September 1984, the RTO made proposals for the use of theloan balance, one of which was to purchase passenger coaches. In December1984 the Bank suggested to purchase instead diesel multiple units because the
- U1 -
Bank had doubts that procurement of coaches under ICB could be accomplishedwithin the time available, while bidding documents for the diesel multipleunits were available. In June 1985, the bid evaluation commission of the RTOproposed award of contract for 4 two-unit sets to a local bidder. Afterreview of the bid evaluation report, the Bank reached the conclusion that thelocal bidder was not the lowest evaluated bidder and that none of the bidsreceived met all technical conditions. The RTO decided, with the Bank'sagreement to invite re-bid with modified technical specifications for 3 four-unit sets instead of the three-unit sets. Conditions about delivery and speedof 120 km/h were the main issues that required clarification. The contractwas awarded to a local bidder on August 18, 1986. Covered by a bankguarantee, the Bank disbursed fully against this contract by June 30, 1987,with the remaining two sets of DMUs to be delivered after that date. The costof these units was US$3.8 willion, including spare parts up to about 10% ofthe value of the 3 sets.
Tecbnical Assistance
3.16 At negotiations, it was agreed to appoint consultants by January1982, to carry out two studies to improve management and organization of theRTO and to assist in better planning and controlling freight operations.Inadequate staff in numbers and capability (para. 6.02) delayed conclusion ofa contract for both studies with a Yugoslav university institute incollaboration with a foreign consultancy firm, until April 1984 (para. 6.03).
3.17 StWdy on Manajementand Organization of the RTO. Recommendationswere presented in autunm 1985. Their major thrust followed organizationalchanges introduced in a few other RTOs and provided the basis for asubstantial restructuring. When the new organization became effective afterintensive consultation with staff on January 1, 1988, an organizationconsisting of 6 Basic Organizations of Associated Labour (BOALs) each with itsown workers' council that enjoyed yrime sources of authority and a largemeasure of autonomy, was transformed into one working organization withoutBOALs. One major effect of the reorganization is a reduction of the number ofmanagers. This and specific recommendations to streamline the internal flowof information is expected to improve over time management's ability indecision making, and lead to higher productivity and operational efficiencyand better communications with CYR and other RTOs.
3.18 Study on Freiaht ODerations. The study, completed in February1986 provided a detailed review of actual freight operations in the RTO andproposed quite drastic measures for increasing their efficiency. They wererelated to reduction of waiting time for freight wagons and increase in speedof train, increase in traffic safety, up-grading of lines for higher axle-loads, increase in line capacity, improvement of quality services and henceincrease in traffic volume. The Bank reviewed the recommendations made in thestudy and agreed with the recommendations but cautioned on investments andurged the RTO to reconsider them in the light of the present low traffic andexpected moderate growth. Most of the study recommendations on operationshave been implemented by the RTO quickly (paras. 4.02 - 4;04).
- 12 -
Costs
3.19 Total investments for the five year period (1981-85) were estimated atDin 2633.8 million (US$ 96.3 million equivalent). The appraisal project costestimate for the 1981-83 three-year slice was Din 1845.9 million (US$67.5million equivalent), with a foreign component of Din 938.3 million (US$34.3million equivalent) or 511 of total project costs. Of this amount Din 19.2million (US$0.7 million equivalent) was on technical assistance and training.Comparison of estimated and actual project costs is shown in Table 2 andsummarized below. The actual costs were Din 19,378.3 million (US$77.44million equivalent) with a foreign component of Din 7,481.7 (US$29.98 millionequivalent) or 401 of total project cost.
LOWa l..i oal LoclPol, TOWa_ _ i" A _-
b__~~w 301.3 28.39 570 6.?J t68 44.16 (1844
sW amea0 12 31.1 2"1
TtA< a40 om law am OAS
=...... . .. ..... ..... .. ......... ..... . ...... . ...... ..... .... . ..- ..
3.20 With an underrun of US$13.44 million for infrastructure investments andan overrun of US$23.51 million for rolling stock purchases, together withother minor items the :roject costs increased by about 151 (US$9.9 million)over appraisal estimate. Costs were influenced by the delay in projectimplementation and an increase of local inflation, especially in later yearsduring which a decrease in inflation had been estimated. In addition therewas a moderate increase in quantities in relation to the total volume.Expressed in US dollar however, unit costs were substantially lower thanestimated because of the depreciation of the Yugoslav dinar. In addition,actual costs for infrastructure were affected by a SS and TT contract valuemuch lower than estimated at appraisal. Expenditures for rolling stock, onthe other hand, were high because quantities more than doubled being stockrequired for a 7-year period while the appraisal estimate covered thequantities for only 3 years (Table 1).
Disbursements
3.21 Due to delays in completing the project, disbursements laggedbehind the appraisal estimate. At the end of the three-year project period,only 471 of the loan proceeds was disbursed. However, by the December 1986closing date, 751 of the loan proceeds had been disbursed. To allow fordisbursements for eligible expenditures incurred uneer existing commitments,the loan account was kept open until July 1987 when the last disbursement wasmade. The undiabursed amount of US$2.9 million was cancelled, making the
- 13 -
total amount cancelled under the project US$4.03 million. Planned and actualdisbursements are shown below:
Gumulative Loon Dis,brsements(US$ million)
EY Planned X htuac X
1982 9.5 51 2.1 171983 24.5 93 9.2 371984 34.0 100 14.6 471985 17.1 581986 22.1 751987 29.9 88
IV. OPERATING PEQBORMANCE
4.01 RTO Pristina's selected operating statistics for 1981-87 are shownin Table 3 and summarized below. In general, operational targets as set outin the Loan Agreement (Annex 1 of Schedule 5) were not achieved. This failureis attributable to delay in completing the project and decline in freighttraffic (paras. 3.03-3.07 and 7.01-7.03).
AMafsNW AdUa COJrlu Tamse
-1981- -1963- -198- 1SS 1087Miw!d A di FM, ,°1 f aCi
tdedIooamadm(W 83 72 so 8as e 84 79 760igb~ per dat pm
a~bb Iocamal^aQ.~) 301 33D 30 340 258 3S0 254 284Cce~ per da
si. 2 dl 289 390 252 3no 286 300 220 22m4.84 32Xs as06 so0 86 38 431 438
Ss a of a 82 s9 82 O2Nkmn r xn
mPei%t 4 O0w 6.8 6es 6.6 8.4 6.Y 7.3 4.8
44 3.6 3A 2.9 36 27 3a 3.2
isO 159 18O 254 183 302 206 179
4.02 The availability of diesel locomotives was better than planned in1981 and 1983, but the trend declined from 1984 onwards. The diesel depot wascompleted in 1987 compared to appraisal estimate of 1983, but machinery wasnot installed until 1988 (para. 3.06). The RTO was also short of foreignexchange needed to purchase spare parts for the locomotives, especially since1984. Net ton-km per ton in 1981-84 was better than planned, but declinedthereafter. Although 240 freight wagons were delivered by the end of 1985,and old wagons scrapped in substantial numbers, the planned utilization offreight wagons was not achieved. Freight traffic had increased up until 1984,and then declined to about 45X of appraisal estimate by 1988, mainly due to ageneral decline of the economy (para. 7.03). One of the reascons for the
- 14 -
anticipated freight increase was the intended shift of trains from the lineBelgrade-Nis-Skopje to the line via Kosovo Polje. When traffic declined frrli1985 onwards, the RTOs' Belgrade and Skopje reaction was to protect theirrevenue by keeping traffic on their lines (para. 7.01 and 7.02). Althoughwagon turnaround targets were not achieved, delays in freight trains have -
improved due to completion of the freight yard, reducing the wagon turnaroundtime from 4.4 days in 1981 to 3.2 days in 1987. The productivity targets wereby far not achieved despice increasing traffic until 1984. Traffic was lowerthan expected (paras. 7.01 - 7.02) and staff numbers increased (para. 4.03).
4.03 The RTO's staff increased slightly contrary to targets agreed atnegotiations. Although staff reduction was expected to be realized,especially in the signalling and telecommunications component of the project,the number increased from 2,528 in 1981 to 2,597 employees in 1987. Althoughcomposition of staff improved slightly by 1986, levels of qualification andespecially experience were not raised sufficiently to make a significantimpact on management's performance. Delay in completing the passengerstation. freight yard and SS & TT installations on the Lesak-Djeneral Jankovicline forced the RTO to recruit more experienced staff and retain the numberand structure of SS & TT employees. The targets set at appraisal appear, inrestrospect, unrealistic in that there had been a high unemployment rate inthe province and that management's ability to take decisive actions had beenover-estimated. Government regulations were introduced which required the RTOto employ one school leaver for every 50 railway employees. A new regulationwhich became effective in 1985 requiring everyone with 40 years of service toretire irrespective of age was not enacted early enough to have a positiveeffect on staff reduction. The RTO is retraining workers to fill in positionsof about 135 workers who were due for retirement in 1987 and 1988.Productivit.y measured in traffic units'/ per employee improved from 165,000 in1981 to 205,000 in 1986 or by 241 mainly due to an increase in passenger-kmbut fell in 1987, in parallel with all other RTOs in Yugoslavia, to the lowlevel of 179,000 units.
4.04 At the 1987/88 timetable change, the RTO implemented most of therecommendations made in the study in order to improve freight operations. Newintermediate stations with shunting locomotives were introduced with pick-uptrains stopping only on basic intermediate stations. The concept of circulartrains in the Kosovo Polje Junction has been fully implemented. As a result,commercial speed of pick-up trains increased from 10 km/h to 13-14 km/h duringthe 1987/88 timetable. However, the recommendation to close 30X of wagon-loadservice stations because of low traffic volume which did not justify theirexistence, has not been implemented but is under consideration.
'/ One traffic unit - 1 ntkm + 1 pkm
- 15 -
V. FINZACIAL..ZUEQ3MICE
FEinan¢cial bi ectives
5.01 The major finan¢ial objective of the project was to improve RTOPristina's financial viability and to reduce its dependence on Governmentsubsidies. To achieve this objective Section 5.04 of the Loan Agreementprovided that: (i) the operating ratio (operating expenditure expressed as apercentage of operating revenue including subsidies) would be r'ddvtted from1151 in 1979 to 901 in 1981 and 89% from 1983 onwards. In addirion,subsidies as a percentage of revenue were to be reduced from 351 in 1979 to301 in 1981, 22.51 in 1983 and 101 in 1985.
Income Statement
5.02 Comparison of actual and forecast Income Accounts, Cash FlowStatements and Balance Sheets for RTO Pristina from 1979 (first year ofoperation) through 1987 are shown in Tables 6, 7 and 8. Summarized IncomeAccount results for 1981, 1983 1985 and 1987 are shown below:
Summary of Actual and Forecast Income Accounts
=-1981-- -- 1983-- -- 1985-- 1987Fors Atual ZFor. Acal Fren. Actual Actul
(Din million)
Operating Revenue 972 739 1351 1684 1658 4212 14500Subsidies 261 200 224 659 45 950 4000
Net Surplus (Deficit) 0 (423) 0 (125) 0 (846) (9,000)
Ratios:Operating Ratio 90 150 89 101 91 111 144
Compensation as 1 ofTotal Revenue 27 27 17 39 3 23 28
While progress was made in improving RTO Pristina's financial performanceduring the period 1981 through 1985, it fell far short of the targets setunder the Loan Agreement. The Operating Ratio was 1501 in 1981 compared tothe target of 901 but improved to 111 in 1985 compared to the target of 89X.Compensation as a percentage of revenue in 1981 at 271 was less than thetarget of 301 but the position deteriorated afterwards and in 1985compensation was 231 of revenue compared to the target of 10X. In addition,the RTO incurred substantial annual net deficits during the period compared tothe break-even position forecast. After 1985, the financial position
- 16 -
continued to deteriorate with the operating r4tio reaching 144X in 1987 andcompensation 28X, resulting in a deficit of )iu 9.0 million or 621 ofoperating revenue.
5.03 The major reason for the poor financial performance was thattariff adjustments did not keep in line with inflation which eccelerated from401 in 1981 to 1591 in 1987. Railway tariffs for freight and passengertraffic in Yugoslavia are applied and adjusted uniformly. Tariff adjustmentswere governed by the provisions of the Sixth Railway Project (Loan 2336-YU)which provided for tariffs to be adjusted annually in line with inflation plus61 in real terms. The tariffs were increased in line with inflation plus the61 as required. These adjustments, however, lagged behind in their impact asthe increases were made about twice a year with the major adjustment cominglate in the year. With inflation increasing to triple figures in 1987, thisdelay in tariff adjustments had a major impact on the RTOs financialperformance. Under the Seventh Railway Project (Loan 3068-YU) a revisedtariff covenant to eliminate this delay in tariff adjustments has been agreed.
5.04 Two other factors contributed to the woor financial performance:Mi) traffic did not increase as forecast; and (i.) projected staff reductionswere was not achieved. Freight traffic handleu by RTO Pristina in 1988 wasonly 451 of the level forecast (para. 7.01). Staff was projected to decreaseby about 101 during the project period but actually increased slightly (para.4.03).
cash Flow
5.05 Due to delays in construction, the original project works whichwere planned to be completed in 3 years took over 7 years to complete. Asummary of the original Financing Plan for the period 1981-83 as compared tothe actual Financing Plan for the period 1981-87 is shown below. The figuresshould be treated with caution as the conversion from dinars to US dollarswere made at annual average rates during a period of high domestic inflation.
Summary of Project Financing
----1981-83----- 1981-87----Appraisal Actual
US % of Tal
Internal Sources 7.80 12 19.93 25
External Sources:Grants 23.70 35 9.25 12Suppliers Credits 2.00 3 8.28 24IBRD Loan 34.00 50 29.97 39Total 67.5 100 77.43 100
- 17 -
The overall investment cost increased by US$9.9 million or about 15%.Internal cash provided about 25S or double the original estimate of 12X. Asthe project took twice as long to construct, the annual percentage level ofinternal cash generation was about in line with the original projection.Grants and Suppliers Credits combined provided about 36X of cost compared toappraisal estimate of 381. The Bank loan percentage contribution was reducedfrom 501 to 39X due to a combination if increased costs and cancellation ofpart of the loan (US$4.03 million).
,Balance Sbeet
5.06 A sumary of the actual and forecast Balance Sheet for 1985 isshown below:
Summary Balance Sheet. December 31. 1985
----- (Din Million)-------
Fixed Assets (net) 25040 4679Other Assets (net) 2961 L61Total 28001 5244
Debt 13857 2006Equity 14144Tccal 2001 524A
Ratios:
Debt Equity Ratio 49/51 38/62
It was estimated at appraisal that the debt/equity ratio would be 38/62 by1985. The actual results show a debt/equity ratio of 49/51 in 1985 due to thereduced level of Grants received and the increased use of Suppliers Credits(para. 5.05).
Audit
5.07 There were considerable difficulties in instituting an annualaudit, due to a reluctance on the part of RTO Pristina to engage anindependent auditor. Eventually in 1984, a contract was made with SocialAccounting Service (SDK). There were recurrent delays in submitting the auditreports as the RTO did not provide the necessary staff to assist the auditors.The first audit report received was for fiscal year 1984 and the auditorexpressed serious reservations mainly due to lack of accounting expertise inthe RTO and failure to apply Yugoslav rules regarding valuation of fixedassets and foreign loans. The auditor issued a disclaimer on the IncomeStatement of the 1985 accounts and the Income Statement and Balance Sheet for1986. The main reason for the disclaimer on the Income Accounts was the
- 18 -
inability of the auditors to verify the fairness of the distribution by CYR ofthe commonly generated income. To resolve this problem, agreement was reachedunder the Seventh Railway Project that the CYR accounts would be audited bySDK to the extent necessary to satisfy SDK as to the accuracy of revenueallocated to the RTOs. A major management reorganization of the RTO wasimplemented in 1988 (para. 3.17). As part of this reorganization, theaccounting function, which was formally undertaken by each of the six BOALswithin RTO Pristina, was centralized with a view to achieving maximumutilization of the limited accounting expertise available. Training was alsoprovided under the Bank loan. It is expected that this reorganization andtraining will over time result in the establishment of an acceptableaccounting system.
VI. INSTITUTIONAL PEROME AND DVLPM
6.01 Management strength and capability of the newly created RTOPristina was limited at the time of appraisal. This was recognized and led tospecific recommendations by the Bank team such as to strengthen the PlanningDepartment by two additional professional posts, and to study, with the helpof consultants, the top level organization and the planning and controlling offreight operations.
6.02 The RTO was unable to attract qualified professionals until 1986,when the post of an engineer in the Planning Department could be filled. Thamajor reasons were unattractive pay conditions, housing problems, and,therefore, the unwillingness of professionals from other republics to moveinto this region. This was later exacerbated by political developments. Inaddition, there were no young professionals from within the region who hadgained some experience elsewhere. As a result, management had to cope withthe staff present at the formation of the RTO, whose capabilities were barelyadequate for the complex processes of operating a railway system under ownresponsibility. In addition, management was faced with the planning andexecution of large and technically complex investments. Project managementwas not organized in a separate unit as agreed at negotiations because the RTOcould not find the necessary additional staff. Therefore, project tasksincluding the follow-up of obligar.ions laid down in the Loan Agreement andreporting were performed by several departments. The submission of auditreports was recurrently delayed due to management's attitude (para. 5.07).Consequently, while management's overall performance was quite good, given theadverse circumstances, the results were less satisfactory than expected atappraisal, especially after 1984 when problems were exacerbated by adeteriorating economy.
6.03 The studies (paras. 3.16 and 6.01) were intended to assistmanagement in better conducting its affairs. However, being challenged by thetask of getting the investments underway, management found that it did nothave the capacity to also deal with these studies, which required substantialcooperation and staff time, until 1984. Once the studies were carried out,most of their recommendations (paras. 3.16 and 4.02-4.03) were quickly adoptedand produced, in the case of freight operations, remarkable results. The
- 19 -
reorganization of RTO became effective on January 1, 1988, and, therefore, theexpected benefits including staff reductions through attrition could not yetbe assessed.
6.04 The consultants' performance was very good. They provided withtheir recommendations a good organizational basis on which management canconduct its affairs and operate the railways more efficiently.
VII. ECONOMIC EYALUATION
7.01 At appraisal, freight traffic in RTO Pristina amounted to 2.9million tons and 248 million ton-kilometers (tkm) in 1979, comprising mostlybulk commodities generated by mining, metallurgical and chemical activities(Table 5). Passenger traffic totaled 2.0 million passengers and 363 millionpassenger-kilometers (pkm) in the same year, including a significant amount ofcommuter traffic. The appraisal anticipated that freight traffic would growto 559 million tkm by 1990 due to the completion of several heavy industryprojects that were planned at that time, and thtat passenger traffic would growto 198 million pkm. It was also intended to shift freight trains from thecongested main trunk line Belgrade-Nis-Skopje to the line vis Kosovo Polje,which would have sufficient capacity after the construction of the new freightyard and the modernization of the SS & TT installations on the line Lesak-Djeneral Jankovic. Freight traffic initially increased to 304 million tkm in1984, but then declined to 237 million tkm in 1988, which amounted to 451 ofthe appraisal estimate (Table 4). Passenger traffic, on the other hand,increased fairly steadily to 219 million pkm in 1988, or 113X of the appraisalestimate.
7.02 The principal reason for the lower than expected growth of freighttraffic was the decline in economic activity which began in the 1980's, andwhich contrasted with the economic expansion which took place in the 1970's.The volume of rril freight traffic is highly correlated with economicactivity, with rail freight traffic throughout Yugoslavia growing at about 55Xof the rate of growth of gross domestic product (GDP) during 1963-85.Yugoslavia followed an inward oriented development strategy at the time ofappraisal, and planned a number of investments in Kosovo in intermediate inputand extractive industries. These investments were not carried out due to ashortage of investment funds after about 1983, and more recently due to ashift towards an outward oriented development strategy which places lessemphasis on these industries. In particular, iron ore traffic stagnatedbecause the planned expansion of the 0 Trepca" mines did not take place. Amajor expansion of local coal production, planned in conjunction with the highcrude oil prices of the late 1970's did not materialize due inter alia to thegradual reduction of oil prices during the 1980's. Non-metals trafficstagnated due to the permanent loss of lime traffic caused by a shift intechnology at a local ferro-nickel smelter. Cement traffic declined due toincreasing road competition, and petroleum traffic patterns changed when thePort of Bar opened in 1981. In addition, when freight traffic began decliningfrom 1985 onwards, the RTOs' Belgrade and Skopje reaction was to protect their
- 20 -
revenue by keeping traffic on their lines. Passenger traffic grew close toappraisal expectations, due in part to low passenger tariffs.
7.03 It is now particularly difficult to forecast future rail trafficin Kosovo because of uncertainty about the timing of Yugoslavia's economicrecovery and probable changes in the structure of the economy and trade.Yugoslavia is a transport intensive country at present, generating about threetimes the volume of both freight and passenger traffic relative to GDP asWestern European countries. Yugoslavia is embarking on a reform program toincrease the market orientation of the economy, which if successful is likelyto result in a relative decline in rail traffic, as the economy deemphasizessome extractive and heavy industries which are important in Kosovo at present,in favor of activities in which it has a comparative advantage. However, thiswill be partly offset by faster economic growtih, aaid by an increase ininternational traffic for which railways have a comparative advantage.Freight traffic in Kosovo is therefore forecast to grow at a modest 0.5X p.a.during 1989-91 and 1.71 p.a. during 1992-96, the average rate of trafficgrowth anticipated for four other RTOs under the recently prepared SeventhRailway Project. Passenger traffic in Kosovo is similarly forecast to grow0.5s p.a. during 1989-91 and 2.21 p.a. during 1992-96.
Ex-Post Economic Evaluation
7.04 The internal economic rate of return for the project wasreestimated by updating the evaluation carried out at the time of appraisal.The following changes were made in the parameters estimated for the appraisal:
(1) Actual project costs, expressed in Yugoslav Dinars, were adjustedto 1988 price levels, on the basis of changes in the YugoslaviaProducer Price Index, and expressed in US dollars at the average1988 exchange rate. US$ 1.5 million was added to the cost of theKo-s0vo Junction improvements reported through 1987, to allow forcompletion of the signalling installation in 1988.
(2) All costs and benefits were estimated net of tax, in 1988 prices.
(3) The Kosovo Junction was assumed to be open to traffic in 1985, theyear after the freight yard was taken into operation. Othersignalling improvements and the diesel depot were assumed to beavailable for use in 1988. Rolling stock was assumed to beavailable in 1985, the mid-point of its procurement.
(4) Benefiz and operations/maintenance cost streams were initiallyadjusted to 1988 price levels in the same manner as investmentcosts, and shifted to correspond to the revised project openingdates. The appraisal estimate of project benefits which did notvary significantly with traffic levels were not adjusted further(avoided maintenance/rehabilitation of the Kosovo Junction, dieseldepot, and signalling systems; staff savings from signallingimprovements). Other infrastructure benefits were reduced 25% dueto the actual and expected shortfall in traffic. In particular,
- 21 -
the appraisal estimates were that traffic would increase from 605to 757 million traffic units (tkm + pkm, TUs) during the firstseven years of project operation (1983-90), whereas it is nowanticipated that traffic will decline from 533 to 482 million TUsduring the first seven years of operation (say 1986-93). Thiscorresponds to a 25X reduction in average traffic levels duringthe period of analysis. Benefit and cost streams were generallyheld constant after 10 years (no further traffic growih assumed)
(5) More traction and rolling stock was procured under the projectthen anticipated at appraisal. Since traction and rolling stockwas procured primarily for replacement purposes, the appraisalanalysis of the benefits of traction and rolling stock procurementwas retained. Benefit streams were adjusted in proportion to thevolume purchased.
7.05 The economic rate of return for the project is reestimated to be14.7X for traction and rolling stock investments and 5.01 for infrastructureinvestments, or an average of 10.11 for the project (Table 9). This compareswith an appraisal estimate of 221 for rolling stock investments and 17-40X forinfrastructure investments, or an average of 221 for the project. Theprincipal reason for the lower than expected economic return for the projectis the shortfall in freight traffic (para. 7.02). The economic rate of returnwas also lower than expected due to the delay in project implementation.
7.06 In aggregate, the project is estimated to remain marginallyjustified. If it had been possible at the time of appraisal to anticipate theextent and duration of the economic recession which took place in the 1980s,and the corresponding decline in rail freight traffic which began after 1984,it would have been more economic to carry out a lower level program ofrehabilitation and improvements to relieve the capacity constraints andimprove the flow of traffic in the Kosovo Junction.
VIII. CONCLUSIONS
8.01 The project was prepared at a time of optimism with regard to thedevelopment of the Province of Kosovo, rapid growth of its economy, and ofrail traffic. The newly created RTO had inherited an obsolete infrastructureand old traction and rolling stock, and this contributed to a certainenthusiasm of management in seeking to achieve substantial changes within one5-year development plan.
8.02 The project emphasized investments in replacing and expanding theRTO's Infrastructure. The Bank had a major impact in reducing the originallyproposed investment plan. Traffic, which at that time increased sharply fromyear to year, was forecast to grow at quite high rates. While it was probablyreasonable to assume that coal mining and coal transport would grow rapidlydue to continued high oil prices, other assumptions were too optimistic,leading to an overly ambitious program.
- 22 -
8.03 Too much reliance was placed on the RTO's ability to appointadditional qualified staff. It appears that the conditions to attractprofessionals were not explored in the necessary detail. Limited managementcapability, which was known at the time of appraisal, continued to show itseffect throughout the whole project implementation because additional and wellqualified staff could not be hired. This, in turn, was one of the majorreasons for delays in project implementation and for not achieving some of theagreed project targets. Political problems in the region exacerbate theproblem of recruiting qualified staff.
8.04 The investment plan of the RTO was carefully reviewed atappraisal, and appropriate adjustments were made. Accordingly, the size ofthe project per se was not unreasonable but its Implementation Scheduleclearly was. Based on experience with earlier projects, substantial delaysshould have been anticipated, especially in the absence of proven experienceof the management of a new organizational entity (para. 3.03). The RTO wasbarely three years old at negotiations, and, therefore, had no time to buildup institutional knowledge sufficient for carrying out such large investmentsin a relatively short time.
8.05 Technical assistance, which was to improve conditions at an earlystage of the project, came too late (para. 6.03). Therefore, projectadministration suffered; auditing was carried out reluctantly and mostly late(para. 5.07) and reporting was mostly inadequate (3.10). Frequent Banksupervision had to be used to gain full information. They regularly pointedat deficiencies but, in the end, could only monitor the events (para. 3.09).
8.06 Traffic forecasts for passenger traffic were well achieved, butthose for freight traffic were severely affected by a general decline in thewhole country's economic activity. The project's economic justification,unfortunately, depanded on achieving the forecast freight traffic growth withthe result that the project did not yield the expected economic returns butremains nevertheless marginally justified.
8.07 As in many other railway projects, the Bank's expectations on thefinancial performance were too optimistic. One of the main causes of the poo.financial performance has been the Government's reluctance to raise railwaytariffs to compensate for rising costs at a time of rapid domestic inflation(para. 5.03). As a result, financial covenants for the Seventh RailwayProject (Loan 3068-YU) have been made very specific to ensure timely tariffadjustments.
8.08 The project results may be summarized as follow.: The projectachieved its basic objectives of modernizing the railway facilities of Kosovo,however, the time taken to complete the project was over seven years comparedto the original timetable of three years. On the management side,improvements were successfully implemented in freight operations. Themanagement reorganization was completed at the end of the project period so itis too early to evaluate its impact. Most of the operational and financialtargets set under the loan were not achieved due mainly to: (i) delays inproject implementation; (ii) a fall in freight traffic; and (iii) Government
- 23 -
failure to authorize adequate tariff increases during a period ot highinflation. Lower than expected traffic resulted In reducing the economic rateof return to 10% compared to the appraisal estimate of 22%. The disappointingperformance under the project compared to appraisal estimates is due to bothunrealistic tarEets and poor project implementation.
8.09 The signalling, traction and rolling stock equipment providedunder the project are expected to be suitable for RTO Pristina's requirementsfor the next 15 to 20 years. The newly established Planning Department andthe reorganization of management provides a firm base for the futuredevelopment of RTO Pristina. Financial performance is expected to improve astariff agreement with Yugoslav railways under the Seventh Railway Project(Loan 3068-YU) are being implemented.
8.10 Our overall evaluation of the project is that it was marginallysuccessful and that the benefits will be sustained in the future.
PROJECT COMPLETION REPORT
YUGOSLAVIA
KOSOVO RAILWAY PROJECT (LOAN 1977-YU
Actual and Expected Physical Completion
Units of completion of major works or Date of units of conple Pe eotat of Orin&iNajor works or components Units components . tion or major O mae ecte a plet
Actual 8t r gar-t d 1981-Rh Actual Expectedtoopletion Actual Expected _
a) Reconstruction of the Junction- freight yard 100% 902 1002 04*/-860* 1983 62- Passenger station 100801 100% US*/87** 1983 12- Diesel depot 100t 752 1002 85*/87** 1982 28
b) Signalling & Telecom.- on LeWa& -G.Jankowil line 94% 732 100% 87*/88** 1983 22- in KosoVo Polje Junction 74% O0 100% 87*/89** 1983 32
c) fraction and Rolling Stock- Diesel locomotives Pcs 6 2 _ 84 1983 33- Diesel shunters PCs 2 - _ 84 1983- Passb;.ger coaches PCs 3 3 - 84 1983 100- Freight wagons pc8 240 210 110 85 1982 85- Diesel oultiple units sets 5 6 87 1981 84
d) Integrated transport - - - 1983 -
* Placed in operation Incoepleteem Fully completed
cr
- 25 -
?AOML Md OR2g1= UstWA of P=J" NtIt
fbilo* 4xw ........... inCAt cow .......... ....... @1iw m .......... t.a GM. a1 FGsip T" LeS FGtOUI TOW p d o
........... oh I lb WUS to I H_Ubw uS ll m r tio
zIi. . dtl. t4A adll. adtt. s*d% of t4 ao1. n i iids fit t ...... .. . . .. ....
.........................
A. i*Pgt d gm19M.S P 1p /.................................
1. Tr* ota 3 0 9.# 0.m 0.00 0.0 0
II. limto ildciV,mw.uLaiws AUottSt
~~~~~~~~~~~~~,,......_.................... ...... ........ ......
L 19140 2aw Pb a
1. 0 £T *4 JA0 64 71 0 110 1. 32. 110 bla 7KS Wam Pl 0 0.A 0. 6. O0D o0.o0 03. SI & * Km Arnien IA L.a 90 53.0 3A 50 114
S. _4 Tod SUi 0.71 1. L110 3.10 7.10 106. ON" Oqtl 14 01A 61 1010 1.50 f7. LtI 21 22 7.V 0.10 0.40 0~~~~~~~~~~~...... ...... ...... ....... ....... ...... ....... .......
'd11. 161 416 43. MA 3 L.O a1
C. Rati eStock.............
1. Dd su.A 0.15 5.n 7.0o 0a 1.10 4172 Di iialt 19 o. CA 0.11 OAO 0A. .3. f tlIlwt timi 9s5,D $A 11.6 am8 2AO 3.10 w4. "Mm., 0.0 5.% 9 oA om OAS. F101t 900 4.13 U 2VA 1.00 2.M X 36. Lvem u S Puw 0 0.41 0b1 0 0 0
t ~~~~~~~~5099.90 13.7 31.91 6.10 4.40> 6*I S09
0. 0hm tnw_.................
1. I d Tnrt 18.3 0.0 0A. 7.10 O0a 0.50 60.2. TouIC AlSt & Tranb .1 03 0A 50 0.50 0.10 IV°~~~~~~~~~~~...... ...... ...... ....... ....... ....... .......... ... ...
9baWte" t*1 124 0.0 o la 91
Tetd _ am l1o 3.01 WA a3.50 46.10RSl~i h ei,qmgta 0.00 00 0A 4920 2.10 3.90
oA 0A oA 5.30 6.70 1V.50
TOtIL F1 mt u 3.3 77.0 9.50 115
U/ *lmed " r th fifth hidl proJgt (Lam lftr)
21 lekddd fn Ptmr _ sIan
WdIrn F, ttmt EaUImw Rets to 51 a *In V7Jb w for caaiCam isat 1M1 * 15.51; 1W * 51UZ a 19.11; 191 152.71; 115. a 1153 1.1Y* IW a 18.
- 26a - ~~~~~Table 3- 26a - oFage 0 f 2PROJECT CLETION MRORT
rOSOVO RAILWAY PROJECT (I)OAN 1977-lu)S, ected Ope?atls StatistI 198187
Unit ef 1961 1982 193 1984 1985 1986 1987
I Total route (he) 332 332 332 332 332 332 332
It Traffic volate- pasenger he lzo 144 189 203 220 202 280 245- net to ke a 274 256 278 304 273 253 220- patssnger gross cn km 24S 250 261 251 233 351 332
- freight greestom ko 5 ;64,8 554 608 633 .600 478 4'9Total greiston km 810,6 804 869 884,S 823 829 301
total grosstos km/i ks of iine " 2,44 2,42 2,62 2,67 2,48 2.5 2,41
Gross ton km by type of tracti:n- stae 45,8 17,6 48 44,8 4,3 - -
- diesel " 740,4 763 795 795 767 735 710
- diesel-otor o 24,4 23,4 26 44.7 51,7 93,7 91
III Traction stock- steag locov-tives units 4 4 4 4 - availability G6S 57 33 83 51 - -- diesel locomotivos mnits 21 21 21 23 23 25 25- availability % 83 8I 89 75 81 79 76
-diesel NU train$ sets - - - 2 6 6 3
-railbuses sets 9 9 9 7 S S- vailsaility S 64 67 59 44 60 78 40
IV Rolling stock
49 49 49 49 49 49 49.- passoenger coaches pcs_ number of seats ooa 31S4 3154 3154 3154 3154 31S4 3154
- availability % 81 81 82 82 82 82 32- freight wsgont oss. 1362 1404 1388 1463 1S03 1537 1544- espaitV 00Ot 40,S 42,3 42,6 43,7 45,2 4;,2 47,0
- verage wgon capacity t 29,7 29,8 30,1 29.9 30,1 29,4 29,3
_ availability 86,4 86 86 91 32 82 R2
- 26b - Table 3
PROJECT COMPLETION REPORT Pag 2 of 2YUGOSLAVIA
KOSOVO RAILWAY PROJECT (LOAN i977-YU)
Selected Operating Statistics 1981-87
U"it of 1.981 1982 1983 1.984 196S 1986 1987
utilization of tr tions andPolof Sattoco
- *tea locomotives km/day 194 184 1;8 161 lS9 - -- diesel locootives ka/da 3:0 32S 343 342 338 360 368
- iosol Nu train$ kl13yw 379 382 394 420 430 440 *:442
Freight traffiC
- StoUs locomotives o/8,av 156 166 140 ;43 _ _ _
- diesel locasotiwes in/day 301 334 34S 284 298 254 294
PIN per passenger coach il:.ka. 2,9 3,9 4,1 4,0 4,1 5,7 5.0
PIN per seat * %§ . 45.7 59,9 64,4 71,0 64.0 88,8 77,8UrN par freight wagon 3Z sa 201 180,4 196,7 205,7 182 164,6 142,0
4Sf1 per capacity COI ks 6,8 6,1 6,5 6,9 6,0 5.6 4.8Static loading of freight wagons t 22,1 25,1 24,4 24,1 24,5 27,0 27,4
Vegoa tuwuround time km/day 4,4 3,7 3,6 3,6 3,45 3*4 3,2
Staff
- OTO seaff excludina?OALs ith separate accouNtieng 2528 2537 2558 2S87 2534 2596 2597
- employed per ke of line 7,61 7,64 7,7 7.7 7,8 7,8 7,8
- traffic units per employee 165 175 188 253 182 205,3 179
- ,Tg staff elcluding IOALswIt soarate accounting 2603 2634 2657 2781 2952 2979 2980
-27- Table 4
PROJECT CONPLTION REpORT
YUGOSLAVIA
xOSOVO RAILWAY PROJECT (LOAN 1977-YU)
Aetual and Fgrecast Traffic. 1979-1996
Totalisa FrigtZf T f fL
(tki millions) (pkm milllons) (tkm + pkm millions)
1979 - Actual 248 163 411
1983 - Actual 278 203 481- Appraisal Forecas: 421 184 605
1988 - Actual 237 219 456- Appraisal Forecast 528 194 722
1991 - PCR Forecast 241 222 463
1996 - PCR Forecast 262 248 510
Growth Rates ( D.a&)
1979-88 - Actual -0.5 3.3 1.1- Appraisal Forecast 8.8 2.0 6.5
1988-91 - PCR Forecast 0.5 0.5 0.5
1991-96 - PCR Forecast 1.7 2.2 2.0
03"30uw PSSOU ps O w S
Se g
- I ai I a 32 a II WM * P =idW
at Z gm SW e o IE Ka ? an 92 qWal A*PWIa19 in in -SO in i A"
a a on .5 zn a 15t C it f1,Oa a z s a as z 2 Oz z 1P
a a Oa? AN St 12 0E K 941 25 05t fl *IV a OK in @50 6 U ZEna W WJUaIIPpW
a ci at as Vf It I UZ- 9 a1 0PoW A 0n a 5 1 Is a ff K It U 2SPZ it OmZ LI as 91 1I 0Z 1a1 a U1300iP
51 I n aOW oU 61 91 n 31 K 0(5 n5 . ~ I
K a mg 6s d ou 6 5 a a 3 I 13S'sFom ISloWdZ ~ ~~~~ ~~ W Go 6 opt 6 a 21 ea 9£ SW30A 1 WOJ
* f6 es in is aW Ks U 6e 61
-. s" St &ow "I 5z 9 m o w at
" ̂ " w ^ ̂ z.... .... ... .... .... .... ... .... .... t ...
6 2 if I A a 2 i I It UJSS3
.... ........ ........ ...... ........ .... ......... ......... ..... ........ ....5..... ........ ...........pnM slow" pim q.g Mm q0 e Zw qu prom Po "9 .
.sue wnz.n ........ . .. 0.... .......... .....-Ar~~~:am l
mF- zF- -nu
eACI 'sd Urue2 TuOftic of lbIwer athsv 519†1W - - I.
.................................... ....................
........ ... ............ " ................... ........... lg ..... ...... .........TW 1ww ta w T.wW TwmW
ftaage,wI ta~ _@1 Ta. _ * IS Tum. ~b TiuRm. &b bmI. Pt.-*Atut kUu AtuuI fw=W inFOt *eu Md &ad Agcbd kSM b
t_tX~~~~~ _.1Ac.lf htcl a l z ........... ...... ......... ,,,,,,,,,,,,,,,,,,. ,.,,,......... ......... ............ ........ ........... .... ... ... . ....... ...... --------.. ------ -....... --------
1. m_ UFW................
etfe 4UD 2 s 3wW 1 *9 - Na 479 U6 413 w3MStdw U KI 8 9 12 9 3 13 5 n1 U U
TOW 6~~~~~U 1 8W, 4 5 2~~~~~~~~~.... ... .... .... .... .. .... ....... .. ..... ..* ..-..
out Mr 64 is 115 a 61 so 29 aPotr.Iaa& whotha 11 VA a3 a3 *1 la U 0 N 1?du aa wmuamw. 41 29 a2 23 423 03 -g U 5.NMBWmSt a. wf a 11 I" 90 la 12 14
Notdo & podctB 3U N0 4St 131 a 45 40 231 73 lGoMMSp 6 ?I 13 7 12 de 7 so 6w
Stdlirm*tsil W 1 35 13 11 & 15 9 1 5 7 Iis Ws 11 5 1 4 In 85 4 35 4 4 81
Fetilhas 211 is i 2 a aa1in .53 iowed$ Is~~7 10 5 is 7 7 02 5 5 4 (A 6
Odro "tf m lw 9 Is m0 4 so1 40 &A
vata m Le 3aS 3l ob S 5 zn 44 w at aw s a aLu martm I l14i 3 14 a is 5aI
rota _b 313 II -U 5N131 273 48 ME 9 US 1S U N
imwac w 3i 41 612 so 4S *0
smvc Mr ad salac4 stia a
0~~ 0uz " ^ w 1S s tt9 s U " 4 Z @~~~~~~~~~~.... ....... ... .... .... ... .... ... ......... .... , .... .... .... ... ..... . . _ . ... .... .. .
TR. 6
-....... .W....... ...
JCb~sqmaI r d fci hr kS w 191Sin W1ill"
q4~~~~~~~W ..... ....... *----m *--- .... IS... f .... ...
. ........ ......... * * mi Sr.1 to 20 36 45 4 4 11w lm 1m 37 mPuu 8 3 a Is la Is la mB m mmSu n1 12 to 29a 1 46 1131 2? an
NI 3n 519 711 101 1,U 1.1? 1a, 1613 me mmCx_natkn w aa - a. u a a 1 * iam 40
.................. ... ....... .. ... ... ...1Ta C4urut1 "mmi In l 73 932 5 1.49 1351 541 OR212 US 1mm
Sdald_ a n 3 33 4 577 4 69 2U 40 US 8m
Sluer Ibtuia!o D a s S s so3 a IV5 1 a S4 * SSwlu -wkr - Zs 214 188 - 22S 43 4w 33 tscs 4A 5m um
..... .... . ..... ..... . ..... ..... . ..... ..... . ..... ... .. ......... .. ......... .. ......... ..Mau s5 65 9W 47? 15 11 919 336 335 110 15 10TO* g1a% 1e44 8 Ila 33 39 }0 3m Sn m 1 4m
N qautkli t m t a) 214) 33 (418) (a) 150 (13) (47!) 1at (I1) 641D)
karatunt tw o s 1 72 0 13 a 35 In 1W1 US
m ina. Raict) (an (21) (43) o (490 413) 0 ,(25) (S) 0 o . (9.0W)
Not affb wtio
(iIb*ainuutat§)2 50 115 1G 10 118 18 t8 II 3 5 16l 1t6
mAe f " o
(ukd vmt W 1a*% 13 12 Is 25 1 121 8Z 1s is 1 In
Ikdurfret 15 %li 16 150 go 146 101 3P I III 91 IVV
(wurg feuRtio(amuhdb m -Wta % 2 18 K as 1n 1us SQ 1w 14A 1VA 6 as
CM*pMmta - a PrqurticnOf quratkuaaura 35 32? 2? 72 1 30 3 3
tdi. 7am l - r .......
PAfJ W (1S : 1977-N)
larht hc'it ad DttAl CaS FltU SWa_t, WV-"W
Ofn IlitiaO
lAlld AtkI Ab:tu f t =, AW ku ac Acttul Actud f<t kemlJIO AeS f aUt...... ...... . ...... ........ ...... ...... . ........ ...... . .. ...... ........ ...... ................. ....... ....... .......... ....... ...
.............
_wmuu 37 42i 371 406 sa 119e s7s 2,9 1AN81 196 31.2 61
Ift hMo 1*01t n 11 3 o 9 72 l 1 do 316 Is I'M 2p13Rmmu. a 1 U la 15 Is le 101 1M as 2.4u SaD
..... ..... ..... ..... . ..... ............ ............ .... ............... .........
lotwa 0 entv 77 t0 UD 1Z a 218 23 I'm 179 U 4,11 SAM
AMs (DsW) fl I ft CQit at3 3 (19 2V (611) (a3) 1 (IS) (a7) 41 05.480) G.1O0f cMh Awl Mt Is a a 161 Zs 1 (141) (a3) 1 35D 46I
T1tt Xb RqIiit 4d t5 877 5f i dIP al 2,3C2 t,l95 1,61 2,41 03 2.46 5.1 an aUCb
q;azI,u ~ (U) 0M) (345) s (413) (25) 1 (136) (471) 15 (8,) (6.4W)~~M 1., 144~~~~~V w 1(6 "a as NO UR 511 93 23 1. 4.300
0 0 0 a 0 0 a 0 0 0 0 7ADT*t an n56 () () 215 1mm) 319 42 315 509 s) S,IM
36 152 48 158 23 SW V 144 0 1a 0 0NoIDme 0 0 0 52 du 0 0 0 Obw LB as 471 210 51 29 t8 4S1 1,519 t,Z T1 3.011 2,91aWtbi ficft le 241 a 8) 1as a 40 43 is 77 23a flow
, ..... ..... ..... ..... ..... ~~~~~ ~~~~~..... ..... ..... ..... ..... ..... ...
t*l f t Fww 3M 6 344 471 1.6 773 2,TOI 1.30 315 3SW 9o41O
btal fink *.I11lA 48 8 w 63 311 21111 I210 2,46 3.31 814 2.95 1S1WM
Cad Sqko)fd cit far Yewr (3) () (18) (2D) 6 (511) 15 s1 t90 13 SI9 0
Cob Al 90Bbv of Year t9 so1 II dS 4e 5utt) T27 do D S49o
XhAt Bd of Yew 13n 8 4 46 1 (la) 5s 7. le 7n se S19
oftServie er e (Times)(On Fwhntat favki) (.7 .0.3 -1.3 1.3 -0.8 1.7 1.5 2.2 0.2 IA -0.1 1.0
TtZe a
- -
am AZXJW M= cZw 1977 lu
4spafsg fUrns ad AcBal b4 * gits, 19-U...................... *o.*......*..*.................
tM ..m ..- so ..- 19 8.. . . t 19-ACA t" Acta aiAMu gta famo.. DI MA~ foat AM FM lm I,l
fid s ..... . .. ...... .. ..... . . .. ...... ....................
ems flaw IIIts 49 011 8a 6e IM 1rm MO a1 44995 9 I=0LIm_mm Ow isatim 34 415 5717 356 am19 10 40 1m1 a 472 481 am
..... ..... . .... ..
ont Fix edlb 154A 17 De 29V6 316 4e9 37 7Zli u134 4IVA RnPWs 35 Ss 46 1t59 110 5) 65 5175 213 19 319
Ssidttwahd Ago" a 0 0 0 0 0 0 0 7 0 7 0
Iltal FlIEd2 MaSt 1UZi4 15 45 5 5S29 429 11432 250 4679 4111) tl
Odorw mxaaswt Ast 32 1tI 131 253 19 an 51 21 31 116m
.......... 9..*v...
Cob t311 8) 42 A6 1) (15) 511 73 3 75s soIuterIe 78 3 so 31 w 12 40 19 346 52 810 "OOdoms a Ollu Orrut Ittm fi8g 121 69 17'm am3 749l1 3M
oet OWt Mats ii t 1 1 10 219 81 312 41 161tweXrodUs & IIoN Oarat Liht. 6 tS 338 3Z 3560 45 317 14 445 a14m
..... . . .. . . . .. . .. . ... . ... ..... ... ..... ..... ... ..... .... ..... ... ..... ... ., ... ... . .. .....
TiM Not Ouiut Asts .t60 tl 152 371 (416) (.1) 444 (61) 279 546A tt) O6Al
Tiotal Mala 2m1 21741 343 3st 41 5619 4s Is am10 g1ml 330 114
C S~~~ ~~~ . ._ _ . . . ._
...........
oft 156 274 134 mm 48 61 260 111 11ON 34 3tO 474
fdty t21 t CS t 1 2 2172 2211. al d 25Z S WYZ DCO4 SW ib S
_ r _ , * ll_ _ l_ ~ ~ ~~~~~_ I != Mat to quty Raw 4 42 4742 a35 " 49U41 W4 41 no SW 41*5mb to 0 b u mb 27 1 t r tO (9) 6 3 t 6 7 . 3
NM Ctrit Amats (tCr co) toCdi QEbr aprons 1.t 3.9 2 8.13 (123) (1.0 82 (2) 9 9 (
- 32 -
PRWOJECT COMPLETION REPORT Table 9,. ....................................... .......
YUGOSLAVIA..........
KOSOVO RAILWAY PROJECT (LOAN 1977-YU).................................... ..................
Ex-Post Estimates of Economic Rates of Return.............................................
(988 US millions)
Other Rolling Other 01esel Rotting met Net N*tJunction SS & TT Stock Project SS & TT Junction Depot Stock Infrast. R. Stock Project
Year Cost Cost Cost Costs Benefits Benefits Benefits Benefits Benefits sanefIts Benefits
1981 0.73 0.05 0.64 0.20 -0.98 *0.64 -1.611982 5.15 2.11 2.23 0.20 -7.45 -2.23 -9.691983 12.09 2.79 6.70 0.20 -15.08 -6.70 -21.781964 9.79 0.75 7.02 0.20 3.07 -7.67 *7.02 -14.691985 2.15 0.49 5.11 0.20 1.12 2.49 0.77 -5.11 -4.341986 5.73 0.91 6.38 0.20 0.90 1.19 2.22 -2.53 -6.38 -8.911987 2.43 0.43 3.83 0.20 1.43 1.29 0.34 1.25 0.01 -2.S8 -2.S71988 0.38 0.19 3.2? 1.28 1.37 O.15 S.47 2.24 . 0 4.441989 0.39 0.20 3.27 1.40 1.44 0.35 10.69 2.60 7.43 10.031990 0.40 0.21 3.27 1.43 1.52 0.25 10.69 2.59 7.43 10.021991 0.40 0.22 3.27 1.47 1.58 0.16 10.69 2.59 7.43 10.011992 0.43 0.23 3.27 1.51 1.63 0.16 10.69 2.65 7.43 10.081993 0.44 0.24 3.27 1.55 1.66 0.55 10.69 3.08 7.43 10.511994 O.4 0.26 3.27 1.60 1.70 0.24 10.69 2.82 7.43 10.241995 0.47 0.26 3.27 2.16 1.73 0.24 10.69 3.41 7.43 10.831996 0.48 0.26 3.27 1.60 1." 0.25 10.69 2.88 7.43 10.311997 0.71 0.26 3.27 1.60 1.81 0.25 10.69 2.69 7.43 10.121998 0.50 0.26 3.27 1.60 1.81 0.25 10.69 2.90 7.43 10.331999 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322000 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322001 0.51 1.06 3.27 1.60 1.81 0.25 10.69 2.09 7.43 9.S12002 0.51 0.26 3.2? 1.60 1.81 0.25 10.69 2.89 7.43 10.322003 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322004 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322005 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322006 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322007 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322008 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322009 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322010 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322011 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322012 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.322013 0.51 0.26 3.27 1.60 1.81 0.25 10.69 2.89 7.43 10.32
06/16/89 Internal Rate of Return: 5.0X 14.7X 10.1Z
- 33 -
BO S OER OS OOIIT ATTAClHlET 1
VORODNI ThS6
ZCZC 41P0220 U1U7980E641W E%4CO.TCP SD
* MINW
90.02.01.0830 7980 9.02.01.0030
197689 VORLURAW
12495 ZJZ YU
SERV 861 DE JUBOFER 11 CYR BEOGRAD JANJARY 31.1990
-- tORLDBAW.FOR MR HAMS J. APITZ DIVISION CHIEF EN 4 IEVASHiNOTON DC
SUBJECT : KOSOW RAILUAL PROJET.RE YOUR LETTER OF DECENERP 15. 198
PLEASE BE INFORMED THAT PRO PRISIN1A T06ETHER 1ITH THE ATHOOF THE DRAFT REPORT, HE REVIEUED YOUR PROPED COMPLETION REPORT
D FOUND THAT YOUR REPORT uAS CORRECTLY AND OBJECTIVELY PREPARED ANDH7A THE COkE MPRBLENS WHICH ARSE DUING THE COR
SE OFTHIS PROJECT IIPLENNATION IN RIQ PRISIINA ANDJ IOSOVOTHOROU°:LY COVERED.IN VIEU OF THE CONDITION OF RAILUAh- IhRASTRtCIURE ANDROLLIN6
STOCK IN RTO PRXSTINA BEFOERE THE PROJECT, AS HELL ASTHENEU ECONOMIC REFORM IN YUGOSLAVIA UNISH APE FORIYHOMING.UE ARE OF THE OPINION THAT THIS PROJECI iS JUSTIFIED.BUTAS EVALUATED TODAY. UItH SIGNIrICANTL) LOkR RATES OFRETVJRNTHAN ORIGINALLY EVALUATED. THE PROJECt MAIDE POSSIELE THE OF RTO PRISTINA ITO THE 7RN5PORIA11OY StSTEN M4 THEYUGOSLAV
RAILWAYS NETUORk.KEST REGARDSDIRECTOR GENERAL OF RTO PRISTINh MEMBER OF THE MANAGIN6 BOARDMILAN DJUROVIC OF CYR - DR SRETENVUKOVIC
01 02.90.
1430+
197608 VORLDBAN
iST , I / i i /OI A R RR OTA ;
iOii UIJ
A'~ ~ ~ ~ ~ ~~~~~~AQ
KLRERUR
-@~~~48M .IAIit X< O Itk ifl 5nO11 1GAiN |
TO^SHA r'o.3CAe I A 3'
REsin I FEKIK k"' ii S'IK" /GTil~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o
M S wash {(/( 0;;; 3 V .- A Z A * g
toots A0
, * lARtEL~~~~~~~~~~~~~~~~~~~~~~~~~~~~OZf6 I
IUFTOIA.~ ~ ~~ ~ ~~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~TZFV
P. LA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
,_' L B ) A
-43- Y U GOSAI 0 S L A V I)X" A
TRANSPORTATION INFRASTRUCTUREqAILAfAVS, lOR/ KIC .
INTERNATIONAL STAND" N0 GAUGE
OTHER STAVDARD GAUGE
C.r0- RAILWAYSTATIONS PNI A2 SR§PJ A;
- - IOOPCSED NEW LINES Ai.<S5R AlOE-
. . . . . . . 3 kV OC ELECTRIC TRACTION M A_ 2V AC ELECTRIC TRACTION ALBANIA RAM.
-NAVIGAAtLECRALSR ALAIRACOIRUCnO UAS iL /X ,
-SAPORITS I Cr/lEP r- IRUASlPRRTS L ( s,POTriC_4 AIRPORTS w Oln ... /\s..
. UR09AIN ROIRAS la 20D ao so sO jD OAF "LA
OTE l OUeDR iS 4FuLLSRAn3040$SLRVll .. _...* --... .,...,o. 11 tC."ROUNDARIES OF REPUBLICS MDOAUTONOMOUS PROVINCE10 KIOEERSt±Z..rNtiO
_ - AINTERNATIONAL BOUROARIES
1r 2i' its 2o GEPIEMUER 19%2
