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         Post and telecommunication technical assistance project
  


The Guinea Post and Telecommunications Technical Assistance Project, supported by Credit 2444-GUI for US$14.6 million equivalent, was approved in FY93. The credit was closed in FY95, four months behind schedule, and US$3.1 million equivalent was canceled. There was no cofinancing. The Implementation Completion Report (ICR) was prepared by the Africa Regional Office. A summary of the Borrower's comments is included as Appendix B.

The project's objectives were to assist the government in continuing the restructuring of the sector following the recent split of the Ministry of Post and Telecommunication (formerly responsible for all sector activities) into two public corporations–Office de la Poste Guinéenne (OPG) and Société des Télécommunications de Guinée (SOTELGUI). The project consisted of technical assistance for (i) the revision of the sector's regulatory environment; (ii) the reorganization of the Ministry; (iii) the actual launching of OPG's and SOTELGUI's operations and strengthening of the companies' management; and (iv) preparatory work for SOTELGUI's divestiture, in particular the search for private partners; as well as material and equipment for operations and maintenance, and training.

Achievement of project objectives was mixed. An improved regulatory framework was put in place, although the Government still retains too much control. The Ministry was reorganized, but its regulatory capability has remained weak because, by project completion, staff had not yet developed adequate expertise. A consulting firm successfully helped to set up SOTELGUI, managed the company for 18 months and subsequently transferred management to the designated local team. Similarly, a consulting firm supported and temporarily managed OPG; progress was substantial but slower than in SOTELGUI. Financial performance of both SOTELGUI and OPG improved, albeit at a slower pace in OPG. However, the finances of both organizations are still adversely affected by excessive public sector arrears. The Government changed the divestiture process for SOTELGUI prepared under the project but still privatized the company, albeit following a procedure that lacked transparency. The physical and training components were implemented satisfactorily.

The Operations Evaluation Department (OED) rates project outcome as satisfactory, and institutional development impact as substantial. However, sustainability is rated as uncertain at this point as the success of sector reform hinges on the future strengthening of the companies’ finances and the implementation of an effective regulatory framework. Bank performance is rated as satisfactory. These ratings agree with those in the ICR.

The main lessons are: (i) an entity with a large vested interest in a public enterprise should not be responsible for the divestiture of that enterprise, and (ii) the best way to improve service quality and coverage in the telecommunications sector is to open it to competition, regardless of whether the sector companies are public or private.

OED rates the ICR as satisfactory, as it presents a reasonably comprehensive account of the project's preparation and implementation as well as a set of indicators adequate for monitoring future operations of OPG and SOTELGUI. However, it fails to comment on the harsh criticism leveled at the Bank by the Borrower in its contribution to the ICR.

No audit is planned.




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