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         Telecommunication project

The Togo Telecommunications Project, supported by Credit 2056-TG for US$16.0 million equivalent, was approved in FY89. The credit was closed in FY95, six months behind schedule, and US$1.6 million equivalent was canceled. Cofinancing totaling US$18.2 million equivalent was provided by the European Investment Bank, the African Development Bank and France. The Implementation Completion Report (ICR) was prepared by the Africa Regional Office. The Borrower's report is included as an appendix.

The project's objectives were to: (i) strengthen the institutional capability of the sector, in particular the finances of OPTT, a major contributor to Government revenues and (ii) improve the overall quality of telephone services while extending their reach in Togo's two main economic regions. Project components comprised: (i) extending and modernizing local telephone networks in the Lomé and Kara areas, amounting to a doubling of system capacity (to 25,000 lines); (ii) installing a digital microwave link between Lomé and Kara; (iii) developing 15 rural communications systems; (iv) upgrading operation and maintenance facilities; and (v) providing technical assistance for staff training, institution building, and project implementation.

Until 1992, when OPTT was transformed into a state corporation, the project was executed under a performance contract ("contrat-plan") between the Government and OPTT. The operation exceeded its original physical objectives by far (almost twice the original targets for 1996), as a result of the rapid development of digital technology and the associated dramatic decrease of equipment prices at the turn of the decade. Rural communications systems were installed in 23 areas. Despite political instability during 1992-93, the items included in the original project were completed only about one year late. The ERR, estimated at 32 percent at appraisal, was re-calculated at completion at 25 percent.

Progress towards the project's institutional goals was partial, mainly because of the impact of the 1992-93 political instability and the 1994 devaluation of the CFA Franc. In particular, at the time of ICR preparation, OPTT's financial performance could not be precisely assessed but was judged to be broadly satisfactory. The institutional improvements achieved under the project nevertheless provide a sound basis for the restructuring of the sector, which is to include in particular the full separation of postal and telecommunications services and the corporatization of the latter, possibly followed by privatization.

The Operations Evaluation Department rates project outcome as satisfactory, sustainability as likely and institutional development impact as modest. Bank performance is rated as satisfactory, as continuously good relations between OPTT and Bank staff played a substantial role in the sector's good performance, particularly when compared to that of other similar organizations in the country. These ratings are consistent with those in the ICR.

The quality of the ICR is satisfactory. The document presents a concise yet reasonably comprehensive account of project implementation and results, except for the financial analysis (due to a lack of data). The ICR includes an appropriate set of indicators for future operation of the system including project-financed items.

No audit is planned.

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