Docunent of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 7217

PROJECT COMPLETION REPORT

BURKA

GRAIN STORAGE PROJECT(CREDIT 1092-BA)

April 28, 1988

Asia Regional Office

This document has a restricted distributlom and may be used by recipients only In the performance oftheir official dudes. Its contents may not otherwise be disclosed witbout World Bank authorization.

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CURRENCY EQUIVALENTS

US$l - K 6.5

WEIGHTS AND MEASURES

Metric System

GLOSSARY OF ABBREVIATIONS

AFPTC m Agricultural and Farm Produce Trade CorporationBRC = Burma Railways CorporationCC = Construction CorporationGOB - Government of BurmaHYV = High-Yielding VarietiesICB International Competitive BiddingOECF - Overseas Economic Cooperative FundPAS Procurement and Sales Department, AFTPCPCC Project Coordination CommitteePIU - Project Implementation Unit, AFTPCRTC = Road Transport CorporationTD Transport CorporationTon Metric TonTPH = Tons of White Rice Milled per Hour

GOVEW ,NT OF BURMAFISCAL YEAR

April 1 to March 31

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April 26, 19 U

HIORADU4 TO THE =QECUTIVI DIRICTORS MD TE MESTDhKT

SUBJECT, Project Completion Report on surm GrainStoren Project (Credit 1092-IA)

Attached, for lo£fomtlon Is a copy of a report entitled"Project Completion Report on Du:ma Graln Storge Project (Credit 1092-NA)'prepared by the FAOIZNUD Cooperatfve Progren together wLth an Overviewprepared by the Asia Regional Office. Further evaluation of tis projectby the OperatiAos Evaluation Department Me not been made

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PROJECT CWIPLETION REPORT

GRAMI STORAGE PROJECT(Credit 1092-IA)

PRACZ

Thia Project Completion Report (PCR) reviews lmplemetattion of theGrain Storage Project in Buna, for which Credit 1092-BA In the *uat ofSDR 17.9 million (US$23.0 million) ws approved In January 1981. Thecredit closutg date was originally September 1985, but this was extended toSeptember 1986. The final disburement was sade on January 8, 1987. Theundisbuu -d balnce of SDR 1.7 (US$2.2) million ws cancelled at that tim.

The PCR was prepared by the FAOICP. An Overview, prepared by theAsia Region, Is based on the PCR, the Staff Appraisal Report (SAR) No.2395b-BA, datei November 26, 1980, the President's Report (No. P-2922-BA)dated December 3, 1980, the Credit Agreemnt dated February 6, 1981, andBank supervision ission vreports. The BAR of the follow-on project--Burma

Grain Storage and Processing Project (Report No. 5227-BA, dated April 28,1986) ws also consulted.

The draft report was sent to the Borrower on February 22, 1988,for comnts . However, no coments have been received.

This project was not subjected to audit by tbo OperatiosEvaluation Departuent.

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PROJECT COMPLETION REPORT

IURMA

GRAIN STORAGE PROJECT(Credit 1092-BA)

EVALUATION SUINARY

ObLoctives

The project was to develop an integrated program for upgradingpaddylrice marketing operations of the Agricultural and Farm ProduceTrading Corporation (AFPTC) mainly by providing Improved storage andtransport facilities; drying, grading and pest control equipment; andtraining and technical assistance. The main component, accounting forabout 902 of project costs, vas construction of 20 new paddy stores, ofwhich 15 were to be constructed from local timber and the rest from

imported prefabricated steel structures.

Implementation Experience

The project had a slow start, mainly due to problems with supplyof building materials. This led to a 2-3 year delay in new storageconstruction and the credit closing date had to be extended from September1985 to September 1986. The project eventually met or exceeded allappraisal targets except for pilot drying plants, which were not installeddue to high costs, and training, which was far short of expectations due tolate formulation of the training program by APPTC, lack of sufficienttailor-made courses abroad and the shortage of local training facilitiesand staff. The project has contributed to roduction in paddy end ricestorage losses and transport cost savings.

Results

The reestimated economic rate of return (ERR) of the whole projectis attractive at about 222 compared to the opportunity cost of capital of10. However, this is due to high ERRs (over 502) of storagerehabilitation and rice wagon rohabilitation. The ERR for the now storagecomponent, which accounts for about 902 of project investments atcompletion as at appraisal, is much lower at about 142.

sustai4 Ailit

Provided reasonable standards of operation and maintenance aremat, sustainability is virtually assured throughout the assumed economiclife of the storage facilities and oquipment.

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Findlns

The main lessons which emerge from the proj-et's impleme_ ttlonexperilee are as followsi (a) the problem of shortages of buildingmaterials, partly due to the econamy-wide problem of foreign exchangescarcity, and complicated procurement procedures In the country, both ofwhich delayed construction of new storage, ws much greater than envisagedat appraisal; (b) the problem of shortage of technical personnel,particularly In construction and peat control activities, also turned outto be greater than envisaged at appraisal; (c) such greater attention meedsto be given to training componenta both during appraisal and supervision;(d) pricing refozm continues to be a difficult area as evidenced by lack ofadjustmont in the grain price structure to give farmers greater incentiveto deliver drier, botter quality paddy, though the Government agreed to dothis under the project; and (e) adequato provision should be made forofficiont Integration between storage and milling

Other points of Interest aroe

- Pilot mechanical grain driers were not purchased due to costsconsiderably exceeding SAR estimates and doubts about theimportance of mechanical drying as most of the paddy is bought Inthe dry season and moisture content Is within tho prescribedlimits.

- Private stores rented by AFPTC did not utilize project funds forImported wire netting (bird screens).

- The project has Introduced new and Improved technologies wilchhave facilitated better storage management and continuous millingoperations.

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SURMA

GRAUI STORAGE PiOJtECT (CREDIT 1092-BA)

PROJECT COMPLETION REPORT

Overview

1. This overview is primarily based on the PCR for the Grain StorageProject (Cr. 1092-BA) prepared by FAO/CP and submitted to the Bank in November1987. The PCQ presents a detailed review of project implementation and impactand the Region agrees with the PCi's findings and conclusions. This overviewis divided into two sections: Section A, which is based on the PCR,summarizes the important aspects of project implementation and impact; andsection B, which complements and elaborates some parts of the PCR relating toimplementation issues and lessons learned, utilizing information fromdocuments (listed in the Preface) other than the PCR.

A. Project Implementation and Impaect

2. Proiect Ob3ectives and Components. The project was designed toreduce paddy louses, improve rice transportation, and improve rice quality byreducing paddy quality deterioration, thus helping to lower paddy marketingcosts and increase rice export volume and price. The project was to be imple-mented in three divisions of lower Burma-Irrawaddy, Rangoon and Peg". Themain project components were: (a) construction of new paddy stores at 20sites totalling 100,000 tons to increase permanent storage capacity in theproject area; (b) rehabilitation of 500 paddy and rice stores owned byAgricultural and Farm Produce Trade Corporation (APPTC) with a total capacityof about 500,000 tons, 120 small wooden jetties, and 60 railway rice wagons;(c) provision of grading and storage management equipment for 600 procurementcenters and new stores; (d) implementation of a drying pilot project in threetownships to establish feasibility of further mechanization procedures inpaddy processing; (e) provision of pest control equipment and supplies;(f) provision of a transshipment store for rice to facilitate shipment byrail; (g) provision of technical assistance and in-service and overseastraining; nd (h) monitoring and evaluation. The first component was the mostimportant, accounting for about 90S of project costs.

3. Project Cost and Financing. The project was to be implemented overa four-year period fr'u 1981 through 1984. Total project cost was estimatedat K 258 million (US$39.1 million equivalent) with a 30S foreign exchangecomponent. Excluding taxes and duties, the project cost was US$30.4 millionequivalent, of which IDA credit of SDR 17.9 (USW23.0) million was to financeabout 751 and COB the rest.

4. Project Implementation. Tke project had a slow start mainly due toproblems with supply of building materials, delays in recruitment of

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consultants and lengthy internal procedures for procurement of importedconstruction materials and equipmnt. Although IDA Credit becam effective inMai 1981, construction of major civil works did not begin until the end of1983. By September 1985, the original credit closing date, disbursement wasonly about S02 of the appraisal estimate. The credit closing date wasextended to September 1986. Disburseent picked up rapidly in this period.By January 8, 1937, the date of final disbursement, SDR 16.2 (Us$20.8) million(902) of the Credit had beet disbursed; the rest was cancelled. Delayedconstruction of new stores due to problems in availability of buildingmaterials and delays in equipment procurement were the principal reasons forslower than anticipated project implementation. However, the projecteventually achieved mcst of its targets (see Table 1).

5. Chanses in Project Scope and Dersign. Relatively minor changes weremede in the project during implementation. Of these, the deletion of thepilot drying project was significant. At appraisal, pilot drying plants wereto be provided for three townships. A the cost of the equipment turned outto be three times higher than appraisal estimates, the OS decided to cancelthe component. Other changes included non-importation of screening material(bird proofing) for about 150 private stores due to a lack of demand and non-purchase of 600 handwinnowers at procurement centers due to high imported andlocal prices.

6. Status of the Proiect ot Completion. The total project cost atcompletion was K 243 million (US$30.6 million equivalent) or 94X of theappraisal cost estimate in Kyat terms and 78Z in dollar terms. Major factorscontributing to lower costs were lower unit costs of new stores and storagerehabilitation, shortfalls in overseas training and technical assistance, anddeletion of drying pilot project and of bird proofing materials for privatestores. Costs in dollar terms were lower than those in Kyat terms due to thedevaluation of the Kyat by about 172 during the project period (FY 81/82 to86/87).

7. Despite the implementation delay and shortfalls in some appraisaltargoets, the project has achieved some successes. It has contributed toreduction in paddy and rice storage losses and transport costs savings. Basedon surveys carried out by the Post-Harvest Technology Application Center, itis estimated that new storage under the project has led to savings inquantitative storage losses of 4.3Z (compared to 1.89S expected at appraisal)and qualitative storage losses of 12.152 (compared to 8.5Z expected atappraisal). Storage rehabilitation has reduced quantitative and qualitativelosses from 62 to 42 and from 42 to 32 respectively as expected atappraisal. The project has also helped introduce a number of new and improvedtechnologie and upgraded through training staff capabilities to sustain thehigher level of technology. The reestimated economic rate of return (ERR) ofthe whole project is attractive at about 222 (see further paro. 20). Thestatus of major individual components of the project at completion is brieflydiscussed below and shown in Table 1.

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Table 1: PROJECT PHYSICAL DEVELOPMMIT

AppraisalItem Unit estimate Actual

(- FY81/82-86/87-)

New storage construction (Units) 20 20Storage rehabilitation ( " ) 500 613Jetty rehabilitation ( ' ) 120 150Rice wagon rehabilitation ( " ) 60 60Transshipment store ( " ) 1 1

Grading and storage managementequipment ( " ) 600 600/a

Pilot drying plants C " ) 3 -

Establishment of pest controlsquads (number) 28 28

Overseas training (trainees) 38 1SLocal in-service training C n ) 1,280 371Technical assistance (man-months) 30 22

/a Except hand winnowers.

8. New Storage Conatruction. Of the 20 paddy stores to be constructed,15 were to be constructed from local timber and the rest from importedprefabricated steel structures. The shortage of cement, timber and iron rodsrequired for foundation works hampered construction progress and by end 1984,the original project completion date, only 10 timber stores had beenconstructed requiring the extension of the project. By end of 1986, however,all 20 stores had been couissioned. One of the main criteria for siteselection of thp storage depots was closeness to the new rice mills which wereto be constructed under ADS (12 mills) and OECF loans (8 mills) in order toallow integration of storage and milling. After considerable delays of theADD project due to procureont probles, all 20 new rice mills wereoperational by end 1986 (see further par&. 24).

9. At appraisal, tht financial cost per ton for new storage under theproject wes estim-ted at US$241 and US$310 equivalent. for the timber andprefabricated steel godowns, respectively. Actual average construction costfor the timber godowne, however, amounted to US$147 equivalent per ton, mainlydue to lower than expected cost of civil works. Actual average cost per tonfor the prefabricated steel godowns aounted to about US$330 equivalent.

10. Rehabilitation of Storage. Jetties and Rice Wagons. The targets forthis component were exceeded (see Table 1). The actual average rehabilitation

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cost of paddy stores was K 14,800 per store or about K 15 per ton compared tothe appraisal estimate of K 13,200 (1980 prices) per store. A significantfeature of impleuntation of this component was the non-utilization of fundsfor improvement of 150 private owned stores rented by AFPTC. AFPTC had agreedto advance one year's rent to enable the owners to obtain the required localbuilding materials while the project was to provide about US$650 per store forimportation of wire netting (bird screens). The private owners, however, didnot make use of this facility and no funds were disbursed under thecomponent. Another significant feature was that due to delays in thereallocation of funds by the Covernment, project funds financed rehabilitationof only 78 of 120 wooden jetties and 30 of the 60 rice wagons envisaged atappraisal. The rest (see Table 1) were financed by AFPTC and Surma RailwaysCorporation (sRC) respectively from their own resources.

11. Grading, frying and Pest Control. By January 31, 1982, the COB wasto review the paddy grading criteria to give farmers adequate financialincentives to deliver paddy of better storability and quality. Action on thiswas delayed until December 1985 when AFPTC propesed a sharp increase in flatrate deductions for excessive moisture and impurity levels and an upwardadjustment of prices for cleaned and properly dried paddy. But this proposalwas not approved at the ministerial level. As a result, the quality of paddypurchased by AFPTC is not considered to have improved over the pre-projectlevel. However, all grading and storage management equipment, except handwinnowers, whose cost was considered to be too high, were bought as envisagedat appraisal.

12. The appraisal aim of testing the economic and social acceptabilityand effectiveness of mechanical drying through three pilot drying plants wasnot met. The price quoted for a continuous flow drier by the acceptablebidder was over US$200,000, which was three times more than the projectallocation for the component. Though IDA agreed to finance the purchase, theCOB deoided against it since there were doubts about the importance ofmechanical drying as most of the paddy is bought in the dry season andmoisture content is within the prescribed limits.

13. Though pest control equipment and supplies were purchased for 28central squads in the pro ct area, the establishment of squads ezpected byJune 1, 1982 was delayed until January 1984 due to nonavailability oftechnicians, and this delay in posting had some adverse effects on the paddyloss reduction progrem during this period.

14. Transshipment Store. Due to late arrival of materials and shortageof technicima, the construction of the store was completed by October 1985,about two years behind schedule.

15. Technical Assistance and Trainin8. Only 22 of the 30 man-months oftechnical assistance envisaged were urilized for preparation of detaileddesign and specifications, tender documents and bid evaluations; supervisionof the construction of prefabricated steel stores; and installation andtesting of mechanical equipment in storage depots. The structural engineercompleted his task over a 12-month period but the mechanical engineer leftafter 10 months having only completed the test run for the first site. The

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other sites were successfully completed by the AFPTC engineers incollaboration with the engineers and foremen of the equipment suppliers.

16. The implementation of the training component was disappointing(Table 1). The formulation of the training program by AFPTC was delayed bytwo years. Later, the main reasons for shortfall in overseas training wereapparently the lack of fluency in English of the staff to be trained anddifficulties in identifying appropriate overseas institutions and courses.Local training has hampered by a shortage of teaching staff and facilities andthe failure of AFPTC to organize specific courses prior to credit closingdate. Training given by supplier representatives was mostly carried out asspecified. Scarcity of sufficiently trained storage managers and pest controlofficers remains a problem added to the produce quality problems faced byAFPTC.

17. Kanagement and IDA Performance. Overall, the performance of AFPTC,the main executing agency, was satisfactery. The shortfall in the trainingcomponent, however, militated against adequate upgrading of staff capabilitiesin pest control and storage management. The Construction Corporation (CC),which carried out the construction of new stores under contract with AFPTC,was not always able to cope with the additional workload in a timely manner,which delayed project implementation. In particular, construction of thetransshipment store suffered a long delay (par&. 14), partly due to the CC'slack of technical expertise in erecting structures of this nature. Theperformance of BRC was fully satisfactory. Though some delay in equipmentdelivery occurred, the Thai contractors performed to the full satisfaction ofAFPTC.

18. Both unaudited and audited financial statements lagged far behindschedule. The audited report for FYm1/82 was delayed 27 months and those formY2183 and FY83/84 32 and 23 montus, respectively. The reports for FY84/85to 86/87 have not yet been completed. The main reason for delay has been theworkload in AFPTC and Central Auditor General's office.

19. While the project concept was sound, ezpectations of IDA staff atappraisal relating to speed of storage construction and training programproved to be over optimistic. IDA supervision of the project was alsoirregular. Over the five-year project period, only seven supervision missionstook place. The interval between the first and the second mission was nearly16 months and another gap of 14 months occurred between missions 4 and 5.More frequent missions in the early stages of the project may have reducedimplementation delays.

20. *kono hc Impact. The PCR reestimates the ERR in 1987 constantprices. Tbi for storage rehabilitation and vice wagon rehabilitation areover 502 as estimated at appraisal but substantially lower for the new storagecomponent (142 vs 282 at appraisal) and for the whole project (about 222 vs29Z at appraisal). Despite substantially greater quantitative and qualitativestorage losses saved (para. 7), delayed benefits by 2-3 years and 502 lowerpaddy equivalent economic prices have reduced ERRs at completion compared tothose at appraisal. While the ERR for the whole project (about 22Z) is quiteattractive compared to the estimated opportunity cost of capital of 102 in

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Burma, this ERR is heavily influenced by very high ERRs for storage and ricewagon rehabilitation. The ERR for the new storage component, which atcompletion accounts for about 90X of project investments as envisaged atappraisal, is much lower at 14S. Undoubtedly, the dramatic decline in worldrice prices (Thai 52 brokep; f.o.b. Bangkok) from about US$ 553/tonne in 1981to US$ 210/tonne in 1987 and projected US$ 249/tonne in 1990 (the price usedin the PCR) in 1987 constant values has been the major reason. However, theimpact of this factor was pronounced because of 2-3 years' delay inconstruction of new storage. By the time the new stores were operational(1985/86),the dramatic decline in rice prices had occurred. If theconstruction program had been on schedule, project economics would havebenefitted from the relatively higher prices in 1982-84.

B. Implementation Issues and Lessons Learned

21. Macroeconomic Issues. The shortages of both imported and localbuilding materials considerably affected the new storage construction program(paras. 4 and 8) and reduced its economic viability (para. 20). This waspartly the result of the economy-wide problem of foreign exchange scarcity.Complicated procurement procedures in the country were another factor. Boththese problems turned out to be greater than envisaged at appraisal. Learningfrom this experience, provision for directly imported construction materialsis included in the follow-on project-Burma, Grain Storage and ProcessingProject (Cr. 1707-BA). The problem of availability of technical personnel inthe country also turned out to be greater than anticipated at appraisal. Thiswas demonstrated by the delay in construction activities by the CC (para. 17)and in posting of pest control squads (para. 13).

22. Training Component. The disappointing implementation of thetraining component (para. 16) underscores the need for much greater attentionto this activity both during appraisal and supervision. At projectcompletion, there is an urgent need for a su'. cantial steppinr up of AFPTC'straining effort in store management, grain ijfestation and pest control andmaintenance of mechanical grain handling equipment.

23. Grading Price Structure. The adjustment in the grain pricestructure to give farmers greater incentive to deliver paddy of betterstorability and quality was not done by the Government (para. 11). Thus paddypurchased by AFPTC continues to have a relatively high foreign matter orima_ture grain content, a factor contributing to the discounts applied toexport prices.

24. integration of Storage and Milling. Although the SAR had stressedthe integration between rice storage and milling (para. 8), adequate physicallinkages between the two had not been provided for. Paddy had to be manuallytransferred to the mills. While this practice has some merits in the Burmesecontext due to its labor-intensiveness, the wage cost per ton for porterageamounted to K 2 while costs for conveyor belt transport were estimated to beonly K 0.3-0.5. Moreover, transfer has to take place often in heavy rains andwith manual operation the paddy gets wet causing qualitative deterioration.

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Vbstly out of its own funds, APPTC hea now installed mecanical transferequipment at most sites. Finncial constraints, however, have impeded thecompletion at the remaining sites. Therefore, in future projects of a similarnature, funds for mechanical transfer system should be included from thestart. This was implemeted in the follow-on project- Burma, Grain Storageand Processing Project (Cr. 1707-BA).

BURMA

GRAIN STORAGE PROJECT (CR.1092-BA)

PROJECT COMPLETION REPORT

I. BACKGROUND

A. Introduction

1.1 The Grain Storage Project, for which Credit 1092-BA for USS23.0million was approved on Jan 6, 1981, was to be implemented over a four-yearperiod. The proJect was identified during appraisal of the Lower BurmaPaddyland Development I Project (IDA Credit 642-BA) and was intended toenhance the benefits from rice production in the project area by helping toovercome post-harvest constraints affecting public sector graln procurementand handling.

B. Aariculture in Burma

1.2 Burma has a population of about 36.8 million (1985) which Isgrowing at a rate of around 2.2%. Since 1973, GNP per capita has risen at anannual rate of about 3.8% and reached US$190 in 1985. Agriculture is thedominant sector of the economy; it contributes about 44% of GNP and engagesabout two-thirds of the labour force. Agricultural production accounts forabout 80% of the country's merchandise exports (1984).

1.3 During the 1960s and early 1970s, the agricultural sector developedrather slowly with output increasing at only 1.6% per tnnum. Oue to a numberof policy reforms in 1973/74, which improved incentives to farmers andreduced the Influence of public sector planning in the farming sector,agriculture gained omentum and grew at an average annual rate of 7.5%betweeN1974175 and 1985/86.

1.4 About 10.4 million ha, equivalent to 15% of the country's totalarea, are under cultivation of which about 1.2 million ha are underirrigation. Approximately 9.7 million ha are classified as fallow andcultivable waste land and 32.2 million ha (about 50% of the total) areforests. Foodgrains occupy the major proportion of the cropped area.

1.5 Paddy production increased substantially from just over 8 milliontons In 1970 to 14.4 million tons In 1985/86. The main reason for thisconsiderable growth was GOB's successful paddy intensification programme,known as the Whole Township Prograume (VTP) which had been launched in1975/76. At present (1986/87), there are nearly 5 million ha under ricecultivation of which 0.8 million ha or 16% are under irrigation.

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1.6 Within the framework of this programme, sufficient productiveinputs, mainly improved seeds and fertilizers, were made available in atimely manner and the extension service was considerably strengthened andexpanded. As a result, HYVs now cover over 50X of the country's paddy areaand yields in townships covered by WTP reached 3.2 tons/ha in 1984/85compared to 2.4 tons/ha of paddy in non-programme townships.

1.7 Practically all paddy is grown in the wet season (mid-May to mid-October) and harvested and threshed during the dry months between Novemberand January. After drying the paddy for one to two weeks, farmers storepaddy for their own use in bamboo cages or bins. The marketable surplus issold either to the Agricultural and Farm Produce Trade Cotforation (AFPTC)or in the open market, normally within the farmer's township.

C. Agricultural and Farm Produce Trade Corporation

1.8 AFPTC is the Goverment's paddy procurement agency and every farmeris obliged to sell a minimum quota to this agency at a fixed price. Thequota for each farm family is negotiated and fixed at village level, basedon GOB guidelines. As a result, approximately 60% of the marketable surplusis bought by AFPTC and 40% is sold on the open market.

1.9 In the past years, AFPTC's paddy procurement price was on averageabout 40% below the free market price. The difference between the fixedprocurement price and the free market price is, however, much higher (over501) for better quality rice. Consequently farmers tend to sell only thepoorest quality rice to AFPTC. Since the agency is also in charge of riceexportation, the generally low quality produce affects its chances tosuccessfully compete on export markets.

1.10 Differential procurement prices are applied according to qualityand moisture content. Overall quality control and grading performance,however, Is still fairly low due to lack of adequately trained personnel andgrading equipment. In addition, price discounts for quality/moisture contentare apparently not strong enough to encourage farmers to deliver pawdy ofhigher quality and storability to AFPTC.

1.11 Locally the GOB sells rice through cooperative stores at fixedprices in rationed quantities of 13 kg per adult and 6.5 kg per child permonth, mainly in rice deficit townships. In 1985/86, over 1.6 million tonsof controlled rice were sold. Higher income families procure better qualityrice on the open market, whilst farmers retain their own production andtherefore do not buy in the ration shops.

1.12 Exported rice fetches fairly low prices mainly due to its highproportion of brokens. Better storage ard grading would improve thesituation. In 1985/86 a total of 0.75 million tons have been exported at anaverage price of USS154.8 per ton as compared to world market prices ofapprox. USS210.

1.13 AFPTC's permanent storage capacity Is still rather limited,amounting to less than 45% of procurement. Therefore the agencyrequisitioned in the past - for very low annual rents - private storagegodowns for another 35% of its requirements whilst the remainder of the crophad to be stored in temporary sheds which do not protect paddy adequatelyfrom moisture and pests.

1.14 Transportation of paddy/rice is by water and land in nearly equalproportions. Water movement is carried out mostly by private barges andsampans whilst land move-ient is mainly by private truck and the RoadTransport Corporation (RTC). Rail transport, although cheaper, still suffersfrom numerous constraints.

0. PCR Information Source

1.15 An FAOfWorld Bank Cooperative Programme mission visited the countryIn June 1987 to assist with the revision of a draft PCR prepared by AFPTC.This report is based on the findings of the mission and on project documentsand reports prepared by GOB and the World Bank during project preparation,appraisal and implementation.

11. PROJECT FORMULATION

A. Preparation and Appraisal

2.1 The project was identified durin the appraisal of the Lower BurmaPaddyland Development I Project (IDA Credit 642-BA, June 1976) and financingfor project preparation was provided under the same project. For detailedproject preparation, the GOB engaged Sanyu Consultants, Nagoya, Japan, inDecember 1977. By October 1978 the consultants submitted their draft finalreport. The proposed project complemented three earlier projects implementedwith IDA support, namely, the Seed Development Project and two Lower BurmaPaddyland Development Projects. It aimed at reducing paddy losses and theImprovement of rice transportation and of rice quality mainly by improvingpublic swetor marketing facilities and operations.

2.2 The project was located in the southern part of the country andcovered the Irrawaddy, Rangoon and Pegu Divisions which are together knownas the Lower Burma Region. Public sector rice procurement in the areamounted to 2.4 million tons in 1979/80, which represents 35% of production

in this area, and was expected to increase to 2.6 million tons by 1982/83.

2.3 Although IDA provided guidance to the consultants throughoutpreparation, their report still left a number of open questions which had tobe resolved at appraisal, which was carried out by IDA In November/Oeceer1978. The concept of the project as conceived at appraisal was similar tothe one prepared, but differed in various technical aspects. Diverseopinions between IDA and GOB on the design of paddy stores required two IDAfollow-up missions to prepare the final SAR which was presented in November1980.

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2.4 At appraisal, the permanent storag* capacity In the area was1,277,000 tons, most of it in poor condition, resulting in physical andqualitative losses which were estimated to result in a loss of about 10% peryear in the value of rice stored. In non-permanent stores, financial losseswere estimated to reach 20% over a five month storage period.

2.5 Increasing procurement by AFPTC was estimated to require additionalnew storage capacity of 228,000 tons by 1982/83. Rice milling capacity wasfound to be adequate in the Rangoon and Pegu Divisions whilst new ricemilling capacity of about 19 TPH would be required in the IrrawaddyDivision. AFPTC planned projects with ADB and bilateral financing wouldprovide this capacity.

2.6 Due to an improvement in the logistics operation, it was expectedthat paddy transport requirements of AFPTC would not change despiteincreased procurement. Rice transport requirements, however, would beaffected by the increased procurement and were estimated to increase byabout 190,000 tons.

B. ProJect Description

2.7 The project was to devetop an integrated prograume for upgradingAFPTC's paddy/rice marketing operation mainly by providing improved storageand transport facilities, drying, grading and pest control equipment, aswell as training and technical assistance.

2.8 The project as appraised included the following components:

a) new storaLe capacity of 100,000 tons at those 20 sites in 10townships wnere also new rice mills would be installed with ADB orOverseas Economic Cooperative Fund (OECF) support;

b) rehabilitation of about 500,000 tons of storage capacity owned byAFPTC ain about 120 small wooden jetties;

c) qradina and storage mana ement i t for 600 procurementcentres and the new stores;

d) Dest control equipment and supplies;

e) a Oryina Pilot ProJect in three townships;

f) traininq in Burma for 1,280 persons (305 man-months) and overseasfor 38 persons (70 man-months);

g) rehabilitation of 60 rice wagons;

h) a trans-shinment store for rice with 3,000 ton capacity;

i) monitorina and evaluation; and

j) technical assistance In finalisation of new storage design and inearly project implementation.

2.9 Project costs were estinmted at US$39.1 million over a 4-yearperiod. The AFPC would be the main executing agency and the ConstructionCorporation (CC) would be the main construction contractor. The economicrate of return for the whole project was estimated at 29X.

C. Neootiations and EffectivMss

2.10 Loan negotiations were initially scheduled to take place In April1979. Nainly due to the need to reformlate the storage component,negotiations were delayed and finalised only in November 1960. As particulareonditions for credit effectiveness, it was specified that:

a) A Project Coordination Comittee had to be established.

b) A Project Implementation Unit had to be established by AFPTC and aProject Director appointed.

c) The Sorrrower was to cause the Construction Corporation (CC) toassign the responsibilitles for coordinating all aspects of thecivil wor*s of the new paddy stores and of the rice trans-shipmentstore to a Project Coordinator with qualifications acceptable tothe Association.

d) The execution and delivery of the Subsidiary Loan Agreement, onbehalf of the Borrower and AFPTC respectively, had to be dulyauthorised or ratifi d.

2.11 No special difficulties arose at negotiations and the Credit becameeffective on 4 Nay, 1981.

III. IMPLEMENTATION

A. ProJect Start-up

3.1 The project had a slow start mainly due to the difficulties in thesupply of building materials. Although the Credit becam effective in My1l96, construction of nmjor functional works did not begin until the end of193.

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B. Chanmes in Prolect Resign

3.2 There was no formal aid-term review of the project. However, duringthe course of project implementation, several technical changes took place:

- In the case of one godown, the location had to be changed. The lowsoil bearing capacity at Ngapudaw required a shift of site toLetpadan which was agreed to by IDA during Septeber 1985.

- Provision was made for importation of screening material for about150 private stores. Due to a lack of demand, no such improvementstook place.

- Due to delayed disbursements by Boverruent to AfPTC, only 78 out ofthe 120 jetties earmarked for rehabilitation were improved underthe project. AFPTC, however, out of its own funds, rehabilitatedapproximately 70 additional ones.

- Pilot drying plants were to be provided for three townships.Subsequentlys it was decided to purchase only one continuous drierwhich was approved by IDA in October 1983. As the cost of theequipment was three times higher than appraisal estimates, BOBdecided to cancel the component.

- The project provided for 600 hand winnowers at the variousprocurement centres. Prices, both imported and local, wereconsidered to be too high. The item has subsequently beeneliminated from the project and funds reallocated.

C. General Imlementation Exgerlence

3.3 Appraisal estimated that the main physical components would becompleted by September 1984 with a project closing date of Septem6er 1985.Due to the initial delays in implementation, by that time only USS11.3million of the envisaged US$23.0 million had been disbursed and only aboutSO% of the main components were completed.

3.4 With increasing availability of construction material and improvedexperienc of the Construction Corporation, work progress acceleratedconsiderably thereafter and the project achieved most of its physicaldevelopment targets. However, the local and overseas training of AFPTCpersonnel still fell substantially short of schedule. The Implementationachievements are summarized below:

ProJect Physical Develogmmnt

Item SAR ActualEslTEate

New storage construction (units) 20 20Storage rehabilitation 500 613Jetty rehabilitation 120 150Trans-shipment store 1 1Rice wagon rehabilitation * 60 60

Grading and storage management equipment (units) 600 600 1/Pilot drying plants 3 3 -Establishment of pest control squads (number) 28 28

Overseas training (trainees) 38 15Local in-service training * 1,280 371Technical assistance (man-months) 26 22

j./ Except hand winnowers.

3.5 Because of the delays in implementation, the project was extendedby one year and closed in September 1966 and the accounts closed in January1987.

0. Iwlementation of Nain Comoonents

New Storaqe Construction

3.6 It was envisaged that twenty paddy stores with a total capacity of100,000 tons would be constructed over a 3-year period, increasing thepermanent storage capacities in the project area by about 8%. Fifteen ofthese stores would be constructed from local timber and another five fromimported prefabricated steel structures.

3.7 Timber codown. Each depot would consist of two buildings,adequately spaced, each with a storage capacity of 2,500 tons, sub-dividedinto five equally-sized coipartments. According to the SAR schedule, theconstruction of a first batch of six timer godowns was to be started InFY81/82. However, the CC could only manage to collect some of theconstruction material. Thus, by October 1982 only the foundation work forfive sites had been initiated.

3.8 The shortage of cement, timber as well as iron rods required forthe foundation works, continued to haper construction progress. Thus byMarch 1985, civil works for only ten timber godowns had been completedrequiring the extension of the project. Subsequently, considerable effortswere made to obtain the outstanding quantities of cement and timber locally.Furthermore, IDA approved the purchase of iron rods from abroad as these

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were not available locally. Consequently, it was possible to finalise allcivil works within the extended deadline as shown below:

Construction Programme - New DeDots (Timber)

Villace Div_ision CoMletion Date

Civil Mechanical Comissioning

Thinbawgyin Irrawaddy Oct. 83 Jan. 85 June 85Yetwinkone Irrawaddy March 84 June 85 Sept. 85Maggyigone Pegu June 84 April 86 April 86Ohnne Pegu March 84 July 85 Oct. 85Tawpalegwin Rangoon March 85 Jan. 86 Feb. 86Tha Kut Rangoon June 85 Feb. 86 March 86Kandyidaunt Irrawaddy Nov. 84 Nov. 85 Jan. 86Shanywa Irrawddy Nov. 83 March 85 Aug. 85Abut Irrawaddy March 84 Oct. 85 Feb. 86Talokkone Irrawaddy May 85 Oct. 85 Feb. 86Naukpyandoe Irrawaddy Oct. 83 Jan. 86 April 86Letpadan Irrawaddy Sep. 86 Sept. 86 Oct. 86Aleyskyaw Irrawaddy March 86 March 86 May 86Tu yaung Irrawaddy March 85 Sept. 85 Oct. 85Thonegone Irrawaddy Dec. 85 Jan. 86 March 86

3.9 Steel codowns. Besides these fifteen storage depots locally builtIn timber.ftie pr`ifabricated steel depots were imported which were Indesign and dimension similar to the timber. structures. The SAR states:Experience gained from the construction and use of a limited number of

steel godowns under this project may prove useful for future projects when,because of timber shortage or other reasons, this technology becomespreferable".

3.10 It was foreseen that two of these pilot steel stores would becompleted in FY 1982/83 and the remaining three in FY 1983/84. However, workwas considerably delayed mainly due to shortage of building materials forfoundation works an initial problms with the foreign supplier. Completiondates of the godown and the coumissloning dates of the mechanical handlingand preclaning equipment is shown below:

Construction Pror_ame - New Depots (Steel)

Villace Division Copletion Date

C .vil Mechanical CommissjonignWorks FEu pin

H1Wtegon Rangoon March 85 Jan. 86 Feb. 86Kyungale Rngoon Jan. 85 Sept. 85 Oct. 85Mukhayan Pegu July 86 Aug. 86 Aug. 86Thetaygon Pegu MAy 86 June 86 July 86Khanaungtoe Rangoon March 85 Nov. 85 NoV. 85

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3.11 As specified, each of the 20 stores was provided with mechanicalequipment for loading and unloading of paddy through belt conveyors. Inaddition, pre-cleaning equipment was installed at the intake side as well asa system of forced aeration to help control temperature and moistureconditions and reduce the risk cf quality deterioration. A diesel generatorhas been installed on all twenty sites to supply the required electricityfor the equipment and the aeration system.

3.12 One of the main criteria for the site selection of the storagedepots was to locate them side-by-side with the new rice mills which wouldbe constructed unler ADB and OECF loans, In order to allow Integration ofstorage and milling. At appraisal it was understood-that under an AOB loan,twelve new rice mills would be sited at some of the IDA-financed godownsites whilst in the remaining eight, OECF-financed mills would be located.

3.13 Whereas no difficulties were encountered concerning the jointoperations with the OECF, procurement probl-ms resulted in considerabledelays of the ADB project. As a result, the ADO loan had to be extended to31 December, 1986. The last delivery of ADB milling equipment took place inNovember 1985 and all new mills were operational by the end of the project.

3.14 Although the SAR had stressed the integration between storage andmilling, no attempts were made to provide for adequate physical* linkagesbetween the godowns and the mills. Therefore, paddy had to be manuallytransferred to the mills. Within the soclo-economic content of the country,this highly labour intensive practice has been acceptable. On a per tonbasis, however, wages amounted to K2 for porterage whilst costs for conveyorbelt transport for the same operation were estimated to be only in the rangeof K0.3 to KO.5. Moreover transfer often takes place in heavy rain so thatthe paddy gets wet causing qualitative deterioration. Mostly out of its ownfunds, AFPTC has now installed mechanical transfer equipment at most sites.Financial constraints, however, have impeded the completion at the remainingsites. Therefore, in future projects of a similar nature, funds formechanical transfer systems should be Included from the beginning.

3.15 The financial cost per ton of storage capacity for the new storageunder the project was estimated to be USS241 and USS310 for the timber andprefabricated steel godowns, respectively. Average construction cost for thetimber godowns, however, amounted to only USS147 per ton, mainly due tolower than expected cost of the civil works component, especially thefoundations. The final averag e cost per ton for the prefabricated steelgodowns munted to about US$330. Annual paddy throughput is estimated to beabout 10,000 tons per store.

Storage and Jetty Rehabilitation

3.16 The project was to rehabilitate about 500 AFPTC-owned paddy storeswith a total capacity of 500,000 tons, mainly by providing imported roofingsheets, wire netting and local hardwood, at an average cost of USS2,000(K13,200 - 1980) per store. By the end of the project, 621 paddy stores witha total capacity of approx. 540,000 tons had been rehabilitated at anaverage cost of about K14,800 per store or about K1S per ton.

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3.17 This increase in the storage rehabilitation component was agreedupon by IDA. The progranme was carried out by AFPTC's storage rehabilitationgroups and the overall quality of work was found to be good. Operators ofrehabilitated stores Indicated that their quantitative losses were reducedfrom about 6% before rehabilitation to about 4X.

3.18 About 150 AFPTC rented project stores were to be improved under theproject. AFPTC had agreed to advance one year's rent to enable the owners toobtain the required local building materials, whilst the project wouldprovide the imported wire netting for approximately USS6SO per store. Theprivate owners, however, did not make use of this facility and no funds weredisbursed under the component. It is not clear why this facility was notused.

3.19 AFPTC was also entrusted with the rehabilitation of about 120wooden jetties which provide river access to stores and paddy procurementcentres. Over the project period a total of 150 jetties were built, of which78 (5 in Rangoon and 73 in Irrawaddy Division) were financed with projectfunds and the remainder directly by AFPTC.

Grading and Storage Manaoement

3.20 At negotiations it was agreed that by January 1982, 608 wouldreview the grain price structure to give farmers a greater incentive toimprove the quality of paddy. Unfortunately action on this issue was delayeduntil December 1985 when AFPTC proposed a sharp increase in flat ratedeductions for excessive moisture and impurity levels and an upwardadjustment of prices for cleaned and properly dried paddy.

3.21 These measures were, however, not approved at ministerial level. Asa result, the quality of paddy purchased by the organization remained at thepre-project level. The situation was aggravated by the lack of propergrading at procurement.

3.22 To increase grading efficiency, a hand huller, a hand winnower anda sample board were to be provided for 600 procurement centres. The hullersand sample boards were purchased. However, international and local costswere found too high to warrant the purchase of hand winnowers and the itemhas been dropped from the protect and monies reallocated. All storemnag_ment equipment was bought. Also as envisaged, pest control equipmentfor 28 central squads in 14 consolfdated townships in the project area weresupplied and used once the squads were established.

3.23 As per appraisal report by May 1, 1981, at least one pest controlsquad, consisting of one inspector and two technicians, would be stationedin each of the 14 consolidated townships in the project area; and by June 1,1982, two such squads would be stationed in these townships. Only inJanuary, 1984 28 squads were stationed in the consolidated townships. Thisdelay in posting the squads wad due to non-availability of technicians intime and has negatively affected the loss reduction progrme during thisperiod.

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3.24 In order to ter, the economic and social acceptability andeffectiveness of artificial drying, the project provided pilot drying plantsin three selected townships, to be located one each in the upper, middle andlower delta area. In each location, two alternative designs of driers, i.e.a cup and cone continuous flow drier and a bin type batch drier, would betried. Both would be husk fired.

3.25 With IDA concurrence, it was subsequently decided to concentratethe pilot drying sub-proJect in Nyaungmya rather than installing small pilotdriers at three different locations and only instal a continuous flow drier.ICS for the equipment was floated on 1 October, 1984 and closed on 29October, 1984. The price quoted by the acceptable bidder was over US$200,000which was three times more than the project allocation for the component.Although IDA agreed to provide the additional funds, GOB at ministeriallevel finally decided against the purchase of the drier, as high moisturelevels in paddy are mostly due to poor post-harvest techniques at fam.u leveland can be remedied more cost effectively by simple sun drying.

Transportation

3.26 To improve rice transportatior and reduce transport costs, therehabilitation of sixty rice wagons and the operation of four unit trainswere included in the project. AFPTC was to purcho'te the required spare partsand provide them to the Burma Railways Corporation (BRC) which would carryout the repairs and be responsible for the operation of the trains.

3.27 A total of USS223,600 had been allocated, mainly to provide newbrakes and bearings for the double bogie wagons. During implementation, itwas found that additional parts such as buffers and draw gears, brakecylinders, beams and rods would be required and that funds would be onlysufficient to refit thirty wagons. The shortfall wis made up by BRC's ownresources.

3.28 The first unit train went into operation on 15 February, 1983, thesecond on 1 June, 1983, the third on 15 July, 1983 and the fourth on 1stSeptember, 1983. The contract between AFPTC and BRC expired In September1985. During this period, approximately 134,000 tons of rice weretransported annually compared to less than 100,000 tons without the project.Annual transport savings were calculated to be about K4.5 (USS0.7) per ton..After expiry of the contract, trains no longer operated as unit trains on afixed schedule, but rather on an ad hoc basis whenever required. This changedid not seriously affect the efficiency of the operation.

Trans-shipment Store

3.29 A rice trans-shipment store with 3,000 tons capacity was to becon#-*ucted under the project. The work was to be carried out by theCont.ruction Corporation (CC). Bids for the procurement of constructionmaterial and steel structures were floated in July 1982 and the contractwith the successful bidder signed In April 1983. The first consignment ofmaterials arrived in November 1983 and the last in July 1984. Due to thelate arrival of materials and the lack of technicians, the construction ofthe store could only be completed by October 1985.

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Training

3.30 The SAR envisaged that 38 staff from AFPTC would receive overseastraining for a total of 70 man-months and that local in-service trainingwou1d be provided to 1,280 persons through 80 courses of one week'sduration. In fact, only 15 staff were trained abroad and 371 received localtraining.

3.31 Initially AFPTC was slow in utilising the training component, lateron, however, serious attempts were made to expose staff to overseastraining. The main reasons for the short(all In training were apparently thelack of fluency in English of the staff to be trained and difficulties inidentifying appropriate overseas institutions and courses. Local traininghas been hampered by a shortage of teaching staff and the failure of AFPTCto organize specific courses prior to credit closing date; training given bysupplier representatives, however, was mostly carried out as specified.

3.32 Scarcity of sufficiently trair*d s,sorage managers and oest controlofficers has added to the quality problem f ed by AFPTC.

Technical Assistance

3.33 Thirty man-months of technical assistance in structural andmechanical engineering were foreseen under the project. The purpose was toassist in the preparation of tender documents, specifications and bidevaluation and to help supervise the construction of the first prefabricatedsteel godowns as well as the installation and test operation of themechanical equipment in storage depots. The consultants were to be engagedby AFPTC by 1st July, 1981.

3.34 The experts took up their assignment in November 1981. Whereas thestructural engineer completed his task over a 12-month period, themechanical engineer left after 10 months having only completed the test runfor the first pilot site. At the time of his departure, the other four siteswere under installation. These sites were successfully completed by theAFPTC.engineers in collaboration with the engineers and foremen of theequipment suppliers (Serli Jucker - Bangkok). Thus only a total of 22 man-months of technical assistance had been utilised.

E. Prolect Cost. Financina and Disbursement

ProJect Costs

3.35 Total project costs were estimated at K258 million (USS39.1million). Actual total project costs were K243 million, or 94% of theappraisal cost estimates. Tables 1 and 2 show total project expendituresduring FY81/82 to 86/87 and the comparison between project cost estimatesand actual costs. The cost comparison by components is given below:

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Total Proiect Costs

Appraisal Actual Pe_rcentaeEstimate chan_es in

Kyat USS Kyat USS KYtt USSm11. WTIl iITE. IT. terms To-rms

New stores 234.2 35.5 222.4 28.0 9S 79Rehabilitation of 12.6 1.9 10.5 1.4 83 74store & jetties

Grading and storage 0.6 0.1 0.1 0.02 17 20managementDrying pilot project 0.8 0.1 - - - -Pest control 0.3 0.05 0.4 0.06 133 80Rice wagon rehabilit. 1.7 0.3 1.7 0.2 100 67Trans-shipment stores 4.0 0.6 4.0 0.5 100 83Training 1.5 0.2 0.9 0.1 60 SOTechnical assistance 1.9 0.3 1.6 0.2 84 67Monitoring & evaluation 0.4 0.06 1.3 0.17 325 283

TOTAL 258.0 39.1 242.9 30.6 94 78"mu m. mu mu

3.36 Major factors contributing to the reduced costs were lower unitcosts of the prefabricated stores and storage rehabilitation, reducedoverseas training and technical assistance, and the deletion of the birdproofing material for private stores and of the drying pilot project. Totalsavings were K15 million. Due to the above cost reductions and thedevaluation of the Kyat by about 17% during the project period (FY81/82 to86/87), total costs in USS terms were 30.6 million, or 78% of the appraisalcost estimates.

Financino and Disbursements

3.37 The proposed IDA credit was USS23 sillion (SOR17.9 million) whichwould finance 100% of foreign exchange costs (USS11.6 million) and 61% oflocal costs (USS11.4 million), net of duties and taxes. Total IDA financingwould cover 76% of the total cost estimates net of duties and taxes (US$30.4million) nd 59% of project cost estimates Including duties and taxes(US$39.1- million). Because of the reduced project costs, the Kyatdevaluation and an unused balance of USS2.2 million, actual IOA financingwas only US$20.8 million, or 90% of the appraisal cost estimates as shownbelow:

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financing (USS million)

Appraisal Estimate Actual

Equipment, material including 10.55 11.78prefabricated steel

Civil works and other local materials 11.77 8.34

Technical assistance, training, 0.68 0.64monitoring and evaluation

Unused balance - 2.24

TOTAL 23.00 23.00

3.38 Actual total IDA financing was 82 X of total project costs net ofduties and taxes (USS25.3 million) and 68X of total project costs includingduties and taxes (USS30.6 million). However, in terms of SOR, total IDAfinancing was 16.2 million or 91% of the appraisal estimates, and theundisbursed portion of the credit cancelled.

3.39 Due mainly to delayed construction of new stores and procurement ofequipment, disbursements lagged far behind the appraisal estimates during1981/82 - 1983/84. However, they picked up rapidly during the remainingproject period as shown below:

Disbursements (USS million)

FY Appraisal Estimate Actual Actual as Percentaueof Appraisal Estimate

80/81 - - -81/82 5.80 0.06 182/83 13.60 0.55 483/84 21.80 7.90 3684/85 23.00 11.87 5285/86 - 15.10 6686/87 - 20.76 90

F. CoLMllance With Covenants

3.40 SOB did not comply with covenants in the Development CreditAgreement (OCA) in the following respects:

i) Under Section 3.07 (A+B), it was stipulated that by 1 June. 1982,two adequately staffed and equipped pest control squads would bestationed in each of the 14 consolidated townships in whichfacilities were to be located. It was not until January 1984 thatthis condition was complied with.

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II) By May 1981, AFPTC was to furnish IDA, for review, an annual planfor overseas training (Section 3.08 OCA). The submission andsubsequent review by IDA was delayed until June 1983 reflecting theslow implementation of the training programme.

iii) AFPTC was held to review by January 1982 Its current paddy gradingcriteria and make recomuendations so as to ensure that farmers hadadequate financial incentives to deliver paddy of betterstorability and quality (Section 3.09 OCA). IDA agreed to extendthe date for compliance to July 1983. However, it was not until theend of 1985 that IDA was provided with the required review whichincluded recommendations for revised discounts on a variety andgrade basis and, in fact, no price adjustments took place over theproject period to improve financial incentives to farmers.

iv) Other delays it complying with covenants were encountered inrespect of the agreement between AFPTC and BRC on the operation ofunit trains (Section 3.13A, OCA), the agreement between AFPTC andCC on the construction of stores Section 3.14 OCA), and therecruitment of engineering consultants Section 3.16 OCA).

IV. PROJECT IMPACT

A. Intended Impact

4.1 The major Impact Intended by the project was a reduction inquantitative and qualitative storage losses. It was assumed that the newstores constructed under the project would replace temporary storagefacilities thus reducing quantitative losses from 2.5% to 0.61% andqualitative losses from 9.5% to 1% resulting in savings of 1.89% and 8.5%respectively, equivalent to annual savings of USS5.1 million at fulldevelopment. The rehabilitation of existing paddy stores would reducequantitative losses from 6% to 4% and qualitative losses from 4% to 3% whichwould result In additional storage loss reduction valued at US$1.2 million.These reductions In losses would result in enhanced export earnings ofUSS6.7 million per year from 1985 onwards.

4.2 - The rehabilitation of rice wagons and the construction of a trans-shipment store at Thazi would contribute net savings of US$0.7 million peryear from 1982-86. In addt.ion, the location of the new stores would help toreduce uneconomic transport of rice and thus result In indirect savings oftransportation costs. Other benefits, which, however, had not beenquantified, were expected to arise from improved short-tern storage of rice,infrastructural Improvements, staff training, investdmnt in equipment forgrading and a paddy drying pilot project. In addition, it was anticipatedthat gradually the quality of rice would improve, which would help secureexport markets for the country.

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B. Actual Impact

4.3 AFPTC procurement considerably exceeded appraisal expectations.mainly due to higher than expected production as shown below. AFPTC paddypurchases In the project area amouhted to an average of 79% of total AFPTCprocurement during the project period.

Project Area AFPTC Procurement (1981/82 - 1985/86)(- 000 tons)

Division 1980/81 19818/2 1982f83 1983/84 1984/85 1985/86SRI-&hWual SAR- Aetua~l SAR ACtual . . . . . Actual.....

Irra- 1,176 1,493 1,201 1.421 1,238 1.525 1,486 1,181 1.477waddy

Rangoon 441 685 454 693 467 647 586 503 551

Pegu 862 1.175 874 1.277 885 1.106 1.155 1.128 1.129

TOTAL 2,429 3,353 2,529 3,391 2,590 3,278 3,227 2,812 3,157ma_se _a_a a maa #us mesas= mans 2Sem

4.4 Major benefits attributable to the project were the reduction Instorage losses resulting from the construction and rehabilitation of paddystores and transport cost savings due to the rehabilitation of rice wagonsand the construction of a trans-shipment store at Thazi. The reduction instorage losses is measured in both quantitative and qualitative terms and isbased on results of surveys carried out by the Post Harvest TechnologyApplication Centre and experience gained in Burma. Because grading atprocurement centres, storage management and pest control have beenrelatively poor, storage losses remain high. Over the average storage periodthe estimated quantitative losses range from about 2.2% in permanent storesto 6.5% for temporary stores and up to 8.5% in open pile stores, while theestimated qualitative losses range from 1.35% for paddy in permanent storesto 13.5X In temporary stores and 211 in open pile stores. The impact of thestorage rehabilitation component confirmed SAR assumptions.

4.5 Based on the revised figures quantitative storage losses have beenreduced through the construction of new stores from 6.5% to 2.2% andqualitative losses from 13.50% to 1.35% resulting In savings of 4.3% and12.15% respectively. As anticipated the rehabilitation of existing paddystores resulted im a quantitative reduction of losses from 6% to 4% and ofqualitative losses from 4% to 3% as shown below:

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Storage Losses

uantitative Losses Oualitative Losses NewStore SAR PCR SAR PCR

Temporary store 2.50 6.50 9.50 13.50ProJect store 0.61 2.20 1.00 1.35(permanent)

Savino 1.89 4.30 8.50 12.15

Storaae Rehabilitation

Without project 6.00 6.00 4.00 4.00With proJect 4.00 4.00 3.00 3.00

saving 2.00 2.00 1.00 1.00

4.6 Based on 100,000 tons of new storage capacity nd 540,000 tons ofrehabilitated storage capacity, and, an annual stock turnover of 2 times and1.5 times respectively total quantitative losses saved are estimated toreach 24,900 tons per year and total qualitative losses seved to reach32,450 tons per year. Thi: is more than double the appraisal estimates of12,000 tons for annual quantitative losses and 14,900 tons for annualqualitative losses saved.

4.7 Quantitative losses are valued at the ex-godown paddy price whichis presently estimated at K588.4/ton (Table 3). The value of qualitativelosses are based on present AFPTC's transferred price f.o.b., Rangoon, at apaddy equivalent of K819/ton. The above prices are 50% lower than thoseestimated at appraisal. The total value of savings is estimated at K41.2million annual'y, or about 20% lower than the appraisal estimate of K50.2million mainly due to the 50% reduction in f.o.b. and ex-godown prices forrice and paddy.

4.8 In ddition to the reduction in storage losses, the rehabilitationof rice wagons and the construction of a trans-shipment store at Thazi hasall%cV"V AIM-1C 6; ssift ant 134,00 tians of rice from road to railtransport resulting in transport cost savings which are estimated at aboutK4.5 million during FY83/84 to FY84/85 (see Table 9).

C. Technological Chanue

4.9 The project has introduced a number of new and improvedtechnologies. The introduction of newly designed timber stores with anenlarged capacity of 2,500 tons sub-divided into five compartmentsfacilitated considerably -storage management, secured continuous millingoperations over an extended period and together with the appropriatelocation of the stores has contributed substantially to transport costsavings.

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4.1 Trhe installation of forced aeration systems has proved to beeffective in reducing quality deterioration even under adverse climaticconditions with elevated paddy moisture. The provision of mechanicalhandling equipment has eased labour constraints during the peak procurementseason and allowed speedy loading of the stores. Store floors, howevershould have been sloped towards the discharge chutes to facilitate feedingof the conveyor.

4.11 The provision of prefabricated steel godowns has reduced demand forscarce local timbers. The new construction technology however requiredspecially trained manpower which was not available. Operational experienceso far has been very limited, but indications are that storage losses aremarginally lower than in the case of the new timber structures. There Ishowever concern that temperature build-up in steel structures, especiallynear the outside walls might lead to heat damage of paddy.

4.12 A number of staff were trained in new technologies and theirapplication. Although staff training fell short of SAR estimates, it isconsidered that some upgrading of staff capabilities has been achieved.

4.13 The concept of 'Unit Trains' in combination with the establishmentof a rice trans-shipment store has substantially enhanced the efficiency andcost-effectiveness of the operation. The flow of rice from surplus todeficit areas has improved and substantial transport cost savings have beenachieved.

V. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT

A. Imlementino Agencies

5.1 As envisaged at appraisal, the AFPTC - the main beneficiary - hasbeen the main executing agency. In compliance with the agreement theCorporation had established a Project Implementation Unit (PIU) andappointed the Construt1ion Corporatioas e main cuntracwr.

5.2 Overall, AFPTC's performance was satisfactory. The initial delaysin projtect implementation were mainly due to factors outside the agency'sarea otflufluence and were partly compensated by a speedy implementationprogram in the subsequent years. The agency succeeded ir building up asustairAble prograe of paddy/rice procurement, storage and transportationbased on the improved assets provided under the project. The lack oftraining, however, 'eft AFPTC with insufficient staff adequately qualifiedin such important fields as pest control and storage management andoperations.

- 19 -

S. Contractors and Suppliers

5.3 As envisaged at appraisal, the Construction Corporation (CC)carried out the construction of new stores under contracts with AFPTC.

5.4 Although CC had recruited a Project Coordinator and hadstrengthened its workforce, the agency was not always able to cope with theadditional workload in a timely manner, which delayed projectimplementation. Especially the trans-shipment store in Thazi suffered a longdelay, partly due to CC's lack of technical expertise to erect structures ofthis nature.

5.5 As agreed at appraisal, the Burma Railways Corporation (BRC) was torehabilitate 60 rice wagons and operate them as contractor for AFPTC as unittrains for rice haulage between Rangoon and Thazi/Mandalay. BRC repaired thewagons as stipulated and even supplied spares, for which project funding wasinsufficient, from its own stocks. In the two year contract period unittrains were operating on schedule and rolling stock well maintained. Theperformance of the contractor has been good throughout.

5.6 For the supply of mechanical equipment for all godowns and theprovision of prefabricated steel structures for the five steel godowns acontract had been signed between AFPTC and the suppliers Berli Jucker Co.Ltd., Bangkok. Due to late delivery of components from sub-contractors,however, equipment was delivered late and the flooding of the productionplant caused delays in the delivery of prefabricated stock elements.

5.7 Although the Contractor agreed to provide technical superfisorsfrom Western countries for the entire installation period, these supervisorscame only during the beginning of the installation works and the trainingperiod. Most of the actual installation works were carried out by the Thaisupervisors and local Burmese engineers, to the full satisfaction of AFPTC.

C. Auditina and Reporting

5.8 A small unit headed by the Project Director was set up under theproject for overall administration, including reporting. The quarterly andannual reports have been prepared with some delay. Accounting was theresponsibility of the AFPTC Finance Department and the auditing was done bythe Central Auditor General's Office (CAGO). Special accounts wereestablished under the project. However, both the unaudited and auditedfinancial statements lagged far behind schedule, particularly the latter.The main reason has been the work load In AFPTC and CAGO. The audited reportfor FY81/82 was delayed 27 months and those for FY82/83 and FY83/84 weredelayed 32 and 23 months, respectively. The remaining audited reports forFY84/85 to 86/87 have not yet been completed.

- 20 -

VI. IDA PERFORMANCE

6.1 The basic concept of the project, i.e. to reduce paddy/rice storagelosses and transportation costs through the provision of improved storagefacilities and rolling stock was sound, as was the project design tointegrate storage and milling to the optimu degree possible.

6.2 It was however too optimistic to assume that the storageconstruction prograime could be completed within three years after projectstart-up. It should have been realised at appraisal that local buildingmaterial constraints were too serious to allow speedy implementation of thecomponent. Furthermore, the cumbersome tendering and ordering proceduresshould have been taken into account contributing to delays especially inICB. Also, the training progr_e has been too ambitious considering theprevailing language difficulties and shortage of local training facilities.More emphasis should have beedn given to a training progra_me for trainers.

6.3 Supervision of the project from IDA has been irregular. Over thefive-year project period, only seven supervision missilns took place. Thetime span between the first and the second mission was nearly 16 months andanother large gap of 14 months occurred between missions 4 and S. Especiallythe lack of guidance in FY81/82 might have contributed to the slower thanexpected start of the storage construction progra_e.

VII. FINANCIAL AND ECONOMIC RE-EVALUATION

A. Financial Analysis

7.1 The internal rates of return (IRR) have been re-calculated for thetwo typical new storage models, the individual components and the wholeproject. The analysis has been carried out in 1987 constant prices. Pastexpenditures were adjusted to 1987 prices by using 6DP s deflator factors.Present costs of road/rail transport and handling were used. Presentestimated prices of ex-godown paddy at K588.4 per ton and AFPTC's transferprice for f.o.b. at K819 per ton paddy equivalent (see Table 3) were usedfor the calculations of quantitative and qualitative storage lossesrespectively. The financial cost and benefit flows are presented in Tables 4to S. The re-estimated IRRs are suarised below:

IRR ()SAR PCR

Whole project 21 12.4New storage component 14 8.8Typical new timber store 15.5 9.7Typical new prefabricated store 11.1 6.7Storage rehabilitation over 50 over 50Wagon rehabilitation over 50 over 50

- 21 -

7.2 The re-estimated IRRs range from only 6.7% and 9.7% for the twotypical new stores, and 8.8% for the new storage component, but to over SOXfor the storage and wagon rehabilitation components. IRR of the wholeproJect is only 12.4%. Negative factors contributing to low IRRs are mainlythe dolay in benefits by about 3-4 years for the new storage component and a50% reduction in the equivalent paddy prices at ex-godown and f.o.b.

B. Economic Analysis

7.3 The analysis has been carried out in 1987 constant prices. Pastexpenditures excluding taxes and duties were adjusted to 1987 constantprices by using GOP deflator factors. Foreign exchange costs were valued atthe official exchange rate of USSl.0 a K6.5 and the local costs wereconverted into border prices by using the SCF of 0.80. Unskilled labour wasvalued at the weighted average of seasonal wage rates of K6.5/man-day.Conversion factors (CF), calculated on the basis of foreign exchange andlocal costs, have been used in the analysis which are presented in therelevant tables. For the projected 1990 equivalent paddy prices, (in 1987constant paddy equivalent) values of K790/ton ex-godown and KB14.9/tonf.o.b., Rangoon, were used to assess the quantitative and qualitativestorage losses respectively (Table 11). These prices are SOX lower than theappraisal estimates of Kl,455/ton and Kl1,652/ton respectively.

7.4 Tables 12-17 present economic cost and benefit flows of the twotypical new paddy storage models, the individual project components of newstores, storage rehabilitation, rice wagon rehabilitation and the wholeproJect. The re-estimated economic rates of return (ERR) are sumharisedbelow:

ERR (OSAR PCR

Whole project 29 21.6New storage component 28 14.1Typical new tiaber store 29.4' 15.3Typical new prefabricated store 23 11.4Storage rehabilitaiton over 50 over 50Rice wagon rehabilitation over 50 over 50

7.5 The re-estimated ERR of the whole project is good at 21.6% comparedwith the estimated opportunity cost of capital at 10. The ERRs of thestorage rehabilitation and rice wagon rehabilitation are very satisfactoryand the ERR of the new storage ccponent is acceptable at 14.1%. Despite thesubstantial increases in the quantitative nd qualitative storage lossessaved., delayed benefits and 50% reduction in prices of paddy are majornegative fctors contributing to the lower ERRs.

- 22 -

VIII. SUWMARY AND CONCLUSIONS

8.1 The project aimed to improve rice storage and tra.sportetion wW"the main objective of reducing quantitative and qualitative losses '.f pfyand rice, thus enhancing local availability and improving export eornThe project included the construction of rew paddy stores of ?.00,000 or-S :;t20 sites in Lower Burma, of one 3,000-tcn trans-shipment store, af tihrehabilitation of 500 stores with a total capacity of 500,000 tons owAm-c byAFPTC, and 120 small wooden jetties as well as the repair of 60 railway ricewagons.

8.2 The project was also to provide grading, storage management andpest control equipment and supplies, as well as technical assistance, in-service and overseas training, and project monitoring and evaluation. Adrying pilot project in three townships aimed to establish the feasibilityof further mechanization procedures in paddy processing.

8.3 Although with considerable delays, due mainly to late delivery ofconstruction materials, the project achieved most of its physicaldevelopment targets. However, the training component has fallen considerablyshort of expectations. This can be partly attributed to the lack ofsufficient tailor-made courses abroad and the shortage of local trainingfacilities and staff. However, the shortfall did not seriously affectoverall project performance. Pilot grain driers were not purchased due tocosts considerably exceeding SAR estimates. Furthermore, it was felt thatthese driers are not essential as most of the paddy is bought in the dryseason ana thus moisture content is within the prescribed limits withoutrequiring additional drying. The Government failed, however, to adjust paddyprices to provide stronger incentives for quality paddy production. Thus thequality of the paddy purchased by the Corporation remained belowexpectations, affecting export market performance.

8.4 Due to the delayed construction/rehabilitation of stores,experience with these facilities has been limited. However, a re-evaluationof the losses incurred in the 'without' and 'with' project situation showsthat estimated losses saved are higher than the appraisal estimates. Totalvalue of the reduction of storage losses is estimated at K41.2 millionannually or about 20% lower than the appraisal estimates of K50.2 million,due mainly to a 50% reduction in f.o.b. and ex-godown prices of paddy andrice.

8.5 At appraisal, total project costs were estimated at US$39.1million. The IDA Credit was to provide SOR 17.9 million (US$23 million).Because of the reduced project cost and a Kyat devaluation, IDA financingwas only US$20.8 million or 90% of the SAR estimates.

8.6 Due mainly to delayed benefits by about 3-4 years for the newstorage construction and 50% reduction in the equivalent paddy prices at ex-godown and f.o.b., the IRR of the whole project is only 8%. The re-estimatedEERs range from 6.7% for a typical prefabricated store, over 8.8% for a newtimber store, to over 50% for storage and rice wagon rehabilitation. The re-estimated ERR of the whole project is acceptable at 14.6%.

- 23 -

Lessons Learned

8.7 The principal lessons learned from the implementation of theproject were the following:

a) Prior to project inplementation, assurances should have beenobtained frou the various Government agencies to procure and/orprovide equipment and construction material of appropriate qualityand quantity and complete civil works In a timely manner. Projectbenefits would thus have been achieved much earlier.

b) In projects of this nature, high priority should be given tostorage manage-ent including grading and pest control, to reducesubstantial quantitative and qualitative losses and institutionsinvolved should ensure a timely and proper implementation of thecomponent through properly trained staff.

c) Price discounts have a strong influence on the quality of producedelivered. Assurances should have been obtained that the requiredfinancial incentives would be provided from the beginning of theproject to ensure adequate supply of quality grains.

rf- * * ,

U-

A. Mm N Cb- su (b. rn-mFT 8^2j FT1 r VA nT 6w FT MA F 7 1l* Ihtln

^61-m - ummzwxam264 1.83 16.UD 16.6WD 5.6 1.6 X, ' 75,3 9.1W 5.1W 3.23- _^:t - - 29.DD 29.06 7.10 5,3 3.72 4t.60 71.0 2L.0

9 l'll"d- I aSm 8 .6 9.64 8.3 1540 MD 3B.131 4.3 429.40 9.60- _ . - - 9.75 .9,75 2,.3 1.75) 8.70 14.6 2.53 7.*D

9 aaAd ati0 *. 6.30 21,SD 9,630 27520 m.M 4.,I3

- - - ZIG g 30 15)203 2 - 1.03D -_ am - 16 2 310 400 - -2) ls 7,W -

- _ - - 1.0 4,2 30 2.22 6.8 1,64 *.tm 90_Sx __-a - - _

_dpirAtel 4. 78.010 2.= ___ 1.90 3O.6 960

C. a_d" & M rA t - .-0 14 40

D. IkiJaw -h1 hJ - - - - - - - - -

,d_t ~ ~~- - 2210 - - - OD 110 23 6eadt 21013- - - - - 10 140 -

~-Thta - - 3 D - - - 110 200 35!D 6

F. Rim 0 1.0 110 - - MD 1'M 1.720 290

0. -100 1.gO 17 1 160 - 3.!DD 45 3,90 23*

H. O 1 _ - 290 - - - 65D - 940 940 -

1. Thidua1o2 Ao 63OD0 26I 540 1SW - 20 2.320 2,570 -

J. ratrtizh & Sa iaon 10 30 W7 10 520 m 2300 10 2.3W0 -

Tltl 24,6960 29.55 70.020 69.640 75.630 13,15) 263.23F 79.baD 242.9ff) 42.350_ , _ = -. -_

mmgmg mum - (U. urn- m

_imbw 1b. 15 13.1 15.6 is 15.3 19.7 23 lZ 1ilUt Uti lb. 5 11 19.9 5 46.1 5.3 30 ID 43

______ 23 311.2 35.5 __ 2.4 2.0 30 is 75

_j_1t*Im ,b. 3 I23 1.5 0.2 # 2 1.3 0.16 aS 7 U2Ubinu J t*Uua 3b. am 2 ! 2.4 0.4 0.7 0.1 114 29 25

kIla I1b. M 3 7.8 1.2 S 35 5.5 1.1 13 mm 92ai ^i ~Ia fi -oo _~ 1b. 12D 0.9 0.1 - - - - -

_______ 12.6 1.9 10.5 1.4 53 74

0.6 0.1 0.1 0.A2 17 23b7imi Pt FtkJ.t lb. 4 3 0.5 0.1 - - - - -tea hL lb. 21 25 0.3 0.3 25 0.4 0.01 MD 13 1

WAn WS lb. i*/ 60 1.7 0.3 6D 1.7 0.2 SW0 100 67I__pntb_ a hm 3.GD 4.0 0.6 3WM30 4.0 0.5 200 100 53

TidJm 7/ WE 310. 70 1.5 0.2 3n . 3D / 0.9 0.1 12, 43 SD 151 -lbmIadmftbm am 30 2.9 0.3 22 1.6 0.2 73 a 67

3aitmh& £ -.II.a k.. 0.4 0.a6 1.3 0.17 325 23

Tlaw 25B.0 39.1 252.9 30.6 91 75

2/ b=bumDh prim d pbwuila O*Anaioim.sI/ 5,000 to dt.S/ 1.O0 t~ cbot;w in mdi _ mt d. tTI lb. of t_mdiam.

l b.3. o-adb.;l b. of _o=. Nv36/ a-mitto (1,255 ofwuu "ioam' tUsada miS 70 na-mu*dt of w b~U1nUaM.

3" p11 ad30 woxhy1 3,. or .

1/

- 27 -

Table 3

BURMA

BRAIN STORAGE 'ROJECT (CR. 1092-BA)

Financial Prices of Rice/Paddy (1987)

f.o.b. LocWl Sale

(K/ton)

AFPTC's transferred price 1,300 920

Actual f.o.b. j and retail price 930 1,125

Average cost of rice at port 1,144

Transport and handling and export 162expenses

Cost of rice ex-mill 982 982

AFPTC's profit/loss per ton + 318 - 62

Milling cost (net of by-products 48 48value)

Cost of rice ex-godown 934 934

Cost of paddy ex-godown (63%) 588.4 588.4

SJ Average January-April 1987.

tiNTm im ( ur-M

FnEKjdal &1ass - A ame 11*Wb 51

_ - - b- g - mTow On~~~~~~~~~~~~~~~to 3t Z

I (I Sam) 3,9D - 6 - 3.3 - (3.6)2 2,30 - 8 180 2,115 (2.11=)3 48 - O 1 4U - (4.=)4 2- M 18 (66 1.26 I'3

S-6 -1 U 180 1C 1.1 1.267 Ns t6 180 (n6) 1.261 Im3 I

5-9 215 Ua 1 16 Im25 126,- 15 3J 1S (661 126 1'm

11-12 - Oa 18 l6 1'm 1=2613 - 3M tD 10 (66) 1, 26 131

1- - we a an 16 1'm 1.2i6 - m5 I t1o (66) 12, 1.314D - a2s 1n0 16 1,26 1'215 - 215 a 180 16 1,2 1,'219 4.1 25 16 ISO 4.75 126 (3.=)

MM-21 - is U lll X 1'm 1.M222 -5 16 (6D) 12m 13M

23- - 258 U 1 26 1. 2 1,2as _15 I" 1MD (66) 126 1.14

25-2 21 U- 2 S8 16 126 1.2as - I"Z# 161 1 (66) 126 1.31429 - an 1JD 16 1.2 1.2630 (1.33 218 a 1lo (1.212) 126 2.W5

- U 9.7w

-4/ Tae 1. svr, actua t a&jmd d 19MP agut.mum prwal by uslo Fs &gflar Jdx of .93, 0.95. 0.97 dwivg

Fi a1/5243/m ad 0.99 dwing iT s4/W- . umming £xuruucmu in y1s aId 2 ad pssmauu* ad kmtaUaUmu oftuuaiit. in yur 3.

2/ Tddo 10./ Eontes in Igo tqAl a. prIas./ Pama 4.6 au asmang tInaIqt of 10,1W Lwz over a starug pmriml of 3 u.mtlu.

m m- s

-- - S= Si

_ m Yg Y M _ So Is

s- -lV -F - U -~

aa - a ._ t - _

3i- 42 a 4,2 is i

4 S a. US I3 (U .3lff - us a 1 , a . l.ai - us a U31 So= l.=.34 - S a" 1.23t

O-Is _ a a4 tins ismt - ' I Us 23 (U) 1.2 *n 3W no t 301 Si iN- - a us a Z sam an t_D - - us am gu ,..aa17 SU a So= Sim I_

to 4,3 a. at a 4,3 SimS (3.30u-is - I n a Sam tin* at a us.m W .E.Soal- 3W a n a 1. =tam

If- a.de_ _ Ui r._ ( 1-313~~~a 1 2m a d l d ia3.a * 2 t liso= m OI i ,a im sua eNWiu.pm - b I..f Ism L.

ytuSS I ad 2 ad I tbAm oru I to im r 3.

26 16o. ../ 1W 4.6 ad muiru LIJ-uaiuu Ut U.m 1w.

(a.,o0) ~ ~ ~ ~ ~ ~ ~ ~ ~~~2,20

9 0/3 ags,. IS -2 16460 -'" 13.600 (so600)

a 1.600 40 S.age t1.300 34.6 so. "

7 Is4*700 S.040 3.600 460 34.09"606* l 3.100 3.10 300 (1.160IS) 14.940 16.1402-10 tA.700 Its0 3.600 400 24.900 24500"I "I.Too 3.30 3.000 ties) 214.60 so.I40t-o to 100 1.040 I.000 400 14.090 34.0094 Soy00 8.160 3,000 (9600) 14.060 36.940 IS-I9 6. 7 10.640 3.00 40 24.000 34.S00

IT S.o06 360 - .30 -0 19 14.006 -t,*)02 -90670 - 04-0 3.600 400 1d.60 14.50020 66.610 *.7no 86 14t00 4.4Sl80 24.° (1.4410)

292l@ 1.10 5.700 9.040 .6OO' 7.096O 34.060 *,1ss

12 .1700 I t40 3.000 400 24.306 94.50

23 1.100 3.160 *.0OO (1t.960) 24.060 30.940

14-25 5^.100 9.040 3.600O 460 14.060O 34.666

t4 o.100 S.o"0 3.600 (9960) 24.000 2. 40 o3y-to *1.00 1,t40 3.600 46 24.000 24.s0010 6.700 8.300 3000 (a.G00) 24.1060 "I 40s0 (350t S.ol0 0.0 .000 (32140) 14,000 570040

L* soo 09 g In wo 4 Is 9I 6/ S$ ilSo hera9*er. "*"I cost as per Table *4

tt~ ~ Wf-0 ogart0a Costs (lobS. 90).}2.a0".

ds *a late 367 tur cf-t prlc6.".*ti Moe Opeating Cents iTable 10 .Am"t,gtion of Tables 4 anES (15 tioer stores 6nd5 prefabricated stores).

1!

BRAEM staaaom PROJECT {CR. 1ppa-p

Pinane4a1 Analva1a - Stars.. P-h-bSI tpIann1/ ~ ~ ~ ~ ~ T1CM/Q2~

Ie±MaJ..Jz.L J.AX*V"r9gL S LD mount a°sttrm. Lea.° Not fkat

1 - (203) 1,100 - (1700)

2 2.430 315,000 0.20?7 3.50

3 4.830 546.000 10.937 6.107

4 1,340 744,000 14.049 13.SO

s 2,290 615.000 1O,268 13,076

6 440 '/ 3 15000 16.26 5S.026

7 440 015.000 10.266 15,26

ton * >0%

1/ Table I adjusted Into 1907 conotant prices. Coats Including post control *upenses.

I Dosed on physical prooress at rohob1litetlon progromm and assuming storage ut1llsatlon of l.5 times of thestoraescapacity.

I t atlmeted at 3.8% of the Investment costs.

Al Paro 4.6.

Ie

Nll STORAGE PAelrgtLQls

mu&

Is, 0*1 L0WAE OEC IlaI0~3A

Tan t nd M4 Ct ( Int*la C Sao 1 9 a40

| -(61/62) 1|.302 10 ttO 16.02

2 15et02 pc7b0 2,000 1g.P02 (8.7r0e

s 1R I0d lS o3a0 n at.lto of,r

4 15.002 10 120 11.861 4.408

e II o* 00 160 5.002 (1601

6 15.902 -1 1.602-

7 16.602 -(8t.620) VS 16.02 8.620

jJ Table t, adtjusted into 19 7 constant prices by using OPs deflator ndex.

V Resdual vlue is base on ecengoic life of 30 years maJ O utilisettn of 1 vers.

I!

- 33 -

Table 9

GRAU STORAG3 P9O30JT tCR.1092-3A)

Financial Transport and Trans-saident Eandlina Costs

Without Progect Witb troiect NotSavina

(tons) (S'000) (tons) (1000) (a 000)

Road Transport

To Nandalay / 44,882 8,222 20,175 3,696To Thazi 2/ 19,197 2.664 85646 1,290

Sub-total C4.079 11.036 28.821 4.L96 6.100

Rail Transport

To Nandalay 3 67,136 2,882 69.030 2,963To Thazl 4/ 31,686 1.144 65,050 2,348

Sub-total 98.822 4.026 134,010 S.311 - 1.285

sand ins

At Mandalay 67,136 537 69,030 552At Tha i 31,666 253 65,050 S20

Sub-&gMIl 98.822 790 1342080 1.072 282

TOTAL MM 11,369 4.533

...................... sua...munmu...suu...iuuum.i_ aaumam.-.

l 1183.2/ton.9 1149.2/ton.

I/ 142.93/ton.3/ 636.09/ton.

2/ 16.0/ton Lor haullog, loss w*o damags to rice.iA Actual average.

- 34 -

Table 10

GRAIN STORAGE PROJCT (CR.1092-BA)

Annual Operating Costs

Timber Store Prefabricated TeaoorarvStore Store

Wages and (No.) K/montb) (K/year) (K/year) (K/year)Salaries

Depot Supervisor 1 405 4.860Storekeeper 1 290 3,480Operator 2 580 6,9603lectrician 2 580 6C960Aest. operator 2 480 5,760Accounting clerk 1 225 2,700Tallymen 2 390 4,680Watchman 2 3450 4680Mehanic 2 410 4,920Weighing clerk 2 410 4,920Casual labour S 975 11,700

Sub-total 61.620 61.620 180,000

Diesel 1/ 10,625 10,625 -Fumigation 3/ 1,200 1,200 -

Maintenance and

Suildiugs (1%) 59,000 86,800 -Uqui nmt (30) 145.500 145.500 -

TOTAL INIUCAL CoSTS 277.945 305,745 180.000

TOTAL cOoaNKc COSTS I/ 221.115 241.M 85 144.000

V 1,700 hours x 2.5 gallons/hour at K2.5/gallon.

3/ IstimaUtes (technician and chbeicals.

L/ local costs x 8C of 0.50. Diesel x CF of 2.5, fumigation x Cl of1.00, building x CF of 0.74 and equipmnt x Cl of 0.69.

- 35 -

Table 11

,WNA

GROIN STORM PROJECT (CR. 1092-2A)

Economic Price Structure of Rice/Paddy(1990 in 1987 constant value)

World price, Thai St broken rice 249f.o.b. Bagkok (WS$/ton) /

Quality discount (20%) I/ S0

F.o.b. Rangoon (US$/ton) 199'

(KRton) . 1,293.S

Transport, handling and export expenes h/ 144.0

Price of rice ex-uill 1,293.8

Killing costs (net of by-product value) y 38.5

Price of rice, ex-godown 1,2S5.3

Price of paddy. ex-godown (630) 790.8

Al World Bank's commodity ptice forecasts, January 1987.1/ Based on historical prices.V/ U8S1 a 6.S.j/ Transport of R46/ton adjusted by Ci of 1.OS and bandling of

116/ton, export expenses of 1100/ton adjusted by SC! of 0.80.A/ Adjusted by SCY of 0.80.

- m w U.Nmrnsaame Amgsla - A NW T1dr S

law q!Sj y Owto '~ ~~~SH2

1 (N S ) 2, - 21 _ 2,4 (2.43}2 . ,71 - 61 14 1,s * (I.M#i3 3,3 - 61 14 3.UI (3.14114 U 1n la (441 1,310 1,374

56 m 6 144 16 1,330 1,3147 U m 14 (41 1,330 1,374

2 2 61 4 16 I'm 1.3.4 wD Um in 1 (443 1m 1*37411-12 m a 4 16 1631D 1.314

n U 61 144 (441 1 31 1 M4Wu5 m 61 14 6 1.33D 1,341 m 1 la (4) 1,,0 1,3741 m 61 16 is 1,330 I.3u U 61 1 I6 Im 1.31H 3.31C U m 14 3,31 1.330 (1.W2)a0-2n Um 61 4 16 I'm 1.3I4g m in me (44) 130 1.3VWZ3-2 3x 61 144 K6 1.330 1.34a 2 m 144 (44) 1'm 1,374

26-21 '31 61 144 16 1'm 1.31U ZZI m 44 (443 1.310 1.374U m 61 14 16 I'm 1.3143D (|Z(I) m 61 1 (PS) 1.33 2,206

MI i 15.3-

I/ Tabem 1t, 4, Iail ding caseet x (V of 0.74 and qupaImud ax4n; x (V of O(.M. [ob' Tdole 120./ Tujili 4 ad.0JtAu tw rxwfic ;rlwt in Tuabh 11.

Omcd hwdLu1s - A£m I, fd ,I aM

19--w_ ur- -

I (W WN) 3 1 3,712 - (3.71232 2,&M St 6 1 2.3 MM2.53 3,3 Gs 14" 3,141 (-3.14)4 262 * 144 1n3 1.130

54 20 61 14" D 12330 1.27 aa U2 4 (Z3) 1.21 1.353

a2 61 1a 37 1.210 1J'mto 22 i21 144 (213 1.20 I'm

11-12 au 61 14 37 1,32 1US3123 2 121 14 123) 1'm 1'm

1415 2a 61 t4 37 U, 1.16 22 121 14 (213 1.33D 1.321D 262 61 S1 37 1, 1,20* a2 61 4 37 1,23 1.,019 3.36 202 2I1 3,33 1.23 (1.gu3

23-3 2a 61 I" 37 1,,0 1'ma an2 121 1 (313 1,330 1.35

26-2 202 61 1" 37 1,210 1.29as 202 m 14 (213 1'm 1'm

26-21 an U 144 37 .'m 1,26 a2 1in 4 (231 .2m 1,20

a 2au 61 . 4 37 1,20 1.2933D 1(2) 20 61 la (1I .2m 2.U1

03 * 11.4w

I/ TOal 1. 5. iaai MON uutn x G of 0.74 al awpuit- uimtt x tF of 0.(9.WT 1T1ii 10.

3,smoic h.3bu1A - FAe mtn

1K'in

WUm hys WiUNa ft'j.t 1ounm* a Em Vt

1 (Wi u3 3.479. - t.0 - .im - (17.61)2 19,3" - am0 - 3,744 - (U.7443 43.00 - 1.220 2.81D 43.92 - (0.91234 46,06 1' 2.0 4%W.9 - (41.635 21,14 3.1 2.420 2, 29,442 (1 3.6 6.0 4,95 1,210 2.81 7. 5. 613 9.3157 4,95 1,21D 2,SW 435 S10.60 1.165 wa 4,.9 2,40 2,W (715) 10.60 2,35 5

9-10 4,5. 1,210 2,.0 435 1061 25,.15is 4,5 2.420 2.SW (7153 aglow 275

22-13 4,5 1'm 2.80 435 10600 26,1514 4,.5 2,420 2, (7153 2,6M 2V.375

1Wi 4.95 1.210. 2.00 435 26.61 10,.11 4.523 2.421 2D (7753 S.600 21.35

1-39 4, 1,210 2_10 435 10.61 10.150 1.10 4.9 2,41 2,80 61,5 aglow (36.4153

22 4.1 4,W5 1'm 2.80 5.3X 10.61 212122 4,5 1.210 2.10 435 10.61 10.1523 . 4, 2,45 2,0 (7515 10.61 21W5

26-25 4.9 1.21 2,10 435 aglow 10,.10 4.9 2.40 2.0 (731 1061 2V,375

27-2 4.95 2.210 280 435 10.60 1l0.129 4.5Z 2,420 2.14W (7153 10613 2V,3753D (22,56 4.9 1.21I 2.10 (22.143 10,61 .,74

O - 24.1%

-eI/ TadeU 1. 12 md 23. xa uni.riue mLn u 0 if 1.74 0.4s upeird atu . ( a i 0.69. 1jW li4da smvio- .Ip¶hId iarl a£i¶s. (TdIM 101. S:it iMpgwtscu cif Ts"ii 12 au 13 115 U.Ixur Mium mu. Si juo'iutwicst a Idtum3. -

- 39 -

Tabl, 1S

GRAIN 8ORaGI POJCST (CR.1092-3&)

Deonomie Analysis - Stoz Robabilitation Caomonant(I '000)

riscal T"at Investment Costs Storage Losses not* Saved 4/ Uenef Its

I - (62/83) 1,300 (11.300)

2 1,S90 7.549 5.959

3 3,985 3/ 13,133 9,148

4 1,030 17,830 16.800

5 1,760 19,s532 17v772

6 300 L/ 19,532 19,232

7 300 19,532 19,232

m *_s ,_- .o.

/ Tables 1 and?, adjusted by Cl of 0.77.

t3 including costs of pest control, adjusted by CP of 0.74.

I/ 3stLated at 3.5% of the Ivestsent costs.

j/ Table 1 adjusted by *ccmxi s prices of rice (f.o.b. Rangoon)a"d*x-godowm of paddy in Table 11.

- 40 -

Dcoonoic Analysis - Wagon leWhailitation auG tvgau-iggMn Stoic(5 10001

ea r Investment Costa EliUM Cst ISaAM j/ MUZIM

Rei- ahiMPtlitation j/ Stoic 3/

l - VTIL2 8 SI - CSI)

2 1.424 1.540 - (1.540)

3 8 1.345 4.780 3.432

4 8 92 4.7S0 4.688

5 - 123 - (123)

6 - _ _

7 - (2,668) - 2.z66

- - - - - - - - - - - - - - - - - - - - -

a * so

Tables 1 a,d . adjusted by CW ot 0.60.

T fables 1 ad l, adjuste by C of 0.77.

/ able 9. f:auso:t costs aGjuste4 by CV of 1.05 &A hasUlicosts by gm of 0.80.

%@-ig 'uJfl;,uj *O @;u a1u.ta1

9L99 0093*9 - - 0093 N S1'et) - - (?1*-3) 0CLt'Lt 000 N ' 000N'O (ILL) - - (ILL) 6

g*sg9g 0oo,gg - - £3? - 135v St-L1L3L19 00391 - - 009 %ILL) - - (SLe) 19361 s : - -0099 see Oct _ _ * estSLC'Lg 0093' e - 0533 (ILL) _ - (SLL) ass1,1gs 001* -$- 0039' 3et3 _ _ 1e3 -

Utt g 009'0 9 000'@t (ol ('9 f o*t§ 11g309 sON 9 - o uselo 6319 - - 9019 OiL ? 00@03' - - 003933 (01 - - 1C10. it£3..:G OoN ': - - 0033 13?{s& - - 13?} .1-

*11 90 00033 - - 00033 913 - - st? el-Is1693U0 00933 - - 009.3? (Isaw - _ (IL) 5III '03 000'0? - - O N '0 13? - - 13? 31-160 g0 Lt oeaow - - 009, (Iol) - _ (ILL0 Ia19013 0093? - - 00113 913 - - Its OR-I

w IlOs) 3313?1 - t1l361 000'? (Itt) 00U (I tl, Ir' 03009 335'S? - 33I61 000'9? (356') (33903 003 voe O

I L90'L 33139 - ISdI 009'9t 50'- 3lS NLl9t'L O113.11 015'33 - 0331 03I'36 161'S? 336 *w0'S ??3 9

TLWSt OIL? tl'S3 - 1103? 001 1K63 I lS?

(800'33) -G't -t' -t' - 690003 *9C'1 003'1 ??lIlt t

- -wt8) _wr _-_ _ OO'Ct t't OOC'I *tO'@1

*Wwiud wluqm - *- puw 419a WIWW"W

tIv-gSoI U1J.33ruOd NUvofs5 nIvUD

U-