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Implementation Completion Report (ICR) Review - Telecommunications


  
1. Project Data:   
ES Date Posted:
08/10/2000   
PROJ ID:
P008322
Appraisal
Actual
Project Name:
Telecommunications
Project Costs(US $M)
 301.4  265.1
Country:
Bulgaria
Loan/Credit (US $M)
 30.0  28.1
Sector, Major Sect.:
Telecommunications & Informatics,
Telecommunications & Informatics
Cofinancing (US $M)
 114.5  120.9
L/C Number:
L3592      
   
Board Approval (FY)
  93
Partners involved
EIB, EBRD 
Closing Date
06/30/1999
         
Prepared by: Reviewed by: Group Manager: Group:  
Alain A. Barbu
Roy Gilbert Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives
(a) improve the quality of service, particularly for business customers, and expand access with a modern digital infrastructure;

(b) improve BTC's (Bulgaria's telecom utility) financial performance through the adoption of appropriate tariff policies and the elimination of postal subsidies;
(c) strengthen BTC through its corporatization and the introduction of modern management practices and systems;
(d) introduce new services and encourage private sector participation in the sector; and
(e) promote policy and regulatory reform, incl. the establishment of a separate regulatory entity and the enactment of a legal framework to expand private sector participation (this objective was subsequently expanded to include the privatization of BTC, with support from the Bank under a parallel TA loan)

b. Components
(a) implementation of BTC's Digital Overlay Network (DON) for the period 1993-97;
(b) design and implementation of an operational support system/management information system (OSS/MIS) for BTC; and
(c) TA for BTC's corporate development, incl. for its accounting, auditing, financial management and planning functions.

c. Comments on Project Cost, Financing and Dates
Significant cost savings under the project's original components were used to finance an expansion of project scope (within the original project objectives), incl. additional switching and transmission facilities to increase access in Sofia and seven other large cities, and a second earth satellite station. Even with this expanded scope, final project cost was 12 % below the original SAR estimate. Project was completed in June 1999, six months behind schedule.


3. Achievement of Relevant Objectives:

Physical objectives were substantially exceeded thanks to cost savings obtained from ICB. In spite of initial political and macroeconomic instability in the early years (through 1997), institution-building and financial objectives were fully met with BTC's development as a strong telecom operator attractive to potential foreign investors and the creation of State Telecommunications Council (STC) as an independent and effective regulator. Sector reform objectives have been exceeded with the imminent privatization of BTC and the Government's commitment to introduce full competition in the sector by 2003, in accordance with Bulgaria' WTO goals.

4. Significant Outcomes/Impacts:

See above.

5. Significant Shortcomings (include non-compliance with safeguard features):

No significant shortcoming. Better monitoring of the impact of TA activities would have been useful.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
Outcome:
Highly SatisfactoryHighly Satisfactory
Institutional Dev.:
HighHigh
Sustainability:
Highly LikelyHighly Likely
Bank Performance:
SatisfactorySatisfactory
Borrower Perf.:
SatisfactorySatisfactory
    Although BTC's performance was highly satisfactory throughout project implementation, that of the Government was below par during the initial years (mostly the result of rapid Governement turnover)
Quality of ICR:
Exemplary

7. Lessons of Broad Applicablity:

(i) a comprehensive sector approach pays: in this case the Bank's involvement in all aspects of sector strengthening gave it credibility and allowed it to promote additional sector reforms not originally planned, incl. BTC's privatization; (ii) effective donor coordination (with EBRD and EIB) was critical in promoting tariff reform when the political environment was not fully supportive (iii) targets for achieving sector reform should be both specific and realistic, particularly in an unstable political environment; and (iv) appropriate indicators should be provided to measure the impact of TA activities.

8. Audit Recommended?  No

          Why?  

9. Comments on Quality of ICR:

Quality is exemplary, considering this is a core ICR. Coverage is very thorough and fully supports the ICR conclusions and ratings. Lessons are insightful. Data in Annexes is both detailed and relevant. And Borrower' s contributions are to the point. The ICR would have gained from incorporating comments from EIB, the main co-financier

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