f'. - Document of The World Bank FOR OFICIAL USE ONLY MICROFICHE COPY Report No. P- 5673-NEP Type: (PM) RepstNo. P-5673-NEP CRUZAT, A / X82675 / F9041/ ASTIF MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION/IDA TO THE EXECUTIVE DIRECTORS ON A PROPOS- CRIT IN THE AMOUNT EQUIVALENT TO SDR 40.1 MILLION (US$55.0 MILLION EQUIVALENT) TO HIS MAJESTY'S GOVERNMENT OF NEPAL FOR A FIFTH TELECOMMUNICATIONS PROJECT APRIL 9, 1992 Th s document has a restricted disribution and may be used by reciplents only Is the performance of th-ir official duties. Its contents may not otherwise be dicosd without World Bank authoriztion. (As of September 1991) Currency Unit - Nepalese Rupee (Nrs) US$1.00 Nra 42.3 Nra 1,000 - US$ 23.6 Nra 1 - 100 paisa * AL Y} July 16 - July 15 sSBBlEVANDM ACRONY DANIDA- Danish International Development Agency EIRR - Economic Internal Rate of Return FINNIDA - Finnish International Development Agency FIRR - FinaWcidl Internal Rate of Return IBR - International Bank for Reconstruction and Development ICB - International Competitive Bidding ITU - International Telecommunications Union ISD - Internsational Subscriber Dialing HP - High Frequency (3 - 30 mhz) JICA- Japan International Cooperation Agency LCB - Local Competitive Bidding MARTS - Multiple Access Radio Transmission Systems MoC Miniatry of CommumLcations NTC - Nepal Telecommunications Corporation 06M - Operations and Maintenance PABX - Private Automatic Branch Exchange PCO - Public Call Office STD - Subscriber Trunk Dialing UNDP - United Nations Development Program VHF - Very High Frequency (30 -300 Mhz) FOR OMIcL USE ONLY FIFTH TELECOMKUNICATIONS PROJECT Credit and Project Summary Borr2VAXL His Majesty's Coverrment of Nepal (10G) Beneficia: Nepal Telecommunications Corporation (NTC) Amount-, SDR40.1 million (US$55.0 million equivalent) Lending Terms; Repayable over 40 years, including 10 yeais of grace on repayment of principal. Reland4La Terma. HMG would relend the funds to NTC in US$ terms at a variable interest rate based upon the six month LIBOR plus a spread uf 3.5X Financing Plan: (US$ million) LocaR Foreiin lowl Denmark 0.0 18.0 18.0 Finland 0.0 11.0 11.0 Japan 0.0 8.5 8.5 Nepal (NTC) 25.5 6.0 31.5 IDA 0.0 55.0 56.0 Tot Fnancing aL u 1J2U Rate of return: 22X Staff Appraisal Reort: 10062-NEP IBRD No. 23473 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. EKORANDWM AND RECOMMENDATION OF THE PRESIDENT OF IDA TO THE EXECUTIVE DIRECTORS ON A PROPOSF0 CREDIT TO NEPAL FOR A FIFTH TELECOMMUNICATIONS PROJECT. 1. I submit for your approval the following report and recomndation on a proposed development credit to Nepal for SDR40.1 million (US$55.0 million equivalent), on standard IDA terms with maturity of 40 years to help finance a fifth telecommunications project. The proceeds of the credit would be relent to the Nepal Telecommunications Corporation (NTC) for 15 years, including five years of grace, with variable interest based upon the six month LIBOR plus 3X per annum. DANIDA, FiRNIDA and JICA are co-financing this project through grants to His Majesty' s Government (HMG). DANIDA and FINNIDA grants will be on-lent to NTC on terms similar to this IDA credit; the JICA grant will be passed on as an HNG equity contribution. 2. CguUtr/eotor Backg Over the past decade HMG has increasingly recognized the important role which effective telecommunications play in political, social and economic development. Given Nepal's mountainous terrain and Xathmandu Valley's separation from the densely populated areas of the Terai near the India Border, telecommunications has become a vital element in govern- ment administration and commercial operations. Furthermore, during the late 1980's, an estimated 9X-10 p.a. of Nepal's foreign exchange earnings (excluding foreign aid) was derived from tourism for which telecommunications is of primary importance. Currently Nepal has one of the lowest densities of telecommunications service in Asia, although from 1985 to 1990 services grew at a rate of 221 p.a. This relatively high growth was snainly the result of the low starting base. Despite low service penetration, the facilities provided are generally modern and perform reasonably well because of the sector's relatively recent development. 3. The Ministry of Communications (MOC) is responsible for communications in Nepal. Under this Ministry different services are provided by the Nepal Television Corporation (ITVC), the Postal Service Department, the Broadcasting Services Development Committee (BSDC), and the Nepal Telecouuunications Corporation (NTC). NTC is responsible for all public telecommunications services. While dedicated networks by other public sector entities are not prohibited, no other entity owns or operates dedicated network facilities of significant size. NTC's operational and project performance has been gradually improving, primarily due to the efforts of top management and support from HMG. NTC has consistently met or exceeded its covenanted target of achieving a 121 financial rate of return; increases in telephone tariffs adopted in November 1991 in accord with IDA recommendations are expected to provide a basis for NTC's continued satisfactory financial performance. However, there is still much room for further improvement, and consultants contracted under the ongoing IDA telecommunications project have highlighted the need for: (a) extensive improvements in management techniques and systems because of the sixfold increase in assets and the rapid change in technology; and (b) reviewing the existing tariff structure and level, because domestic rates have been virtually unchanged for five years, while the relatively high international rates have been adjusted wlth the exchange rate variation, leading to low local and high international rates. -2- 4. Against this background MMG has tentatively set two major targets for telecommuications development in Nepal: (a) to significantly extend reliable telecommunicatLons services to all districts, and (b) to Increass telephone density to one telephone (about 0.8 telephone lines) per 100 population by the year 2000. AlthouAgh their achievement is unlikely to satisfy demand fully, these appear to be resonable, viablQ targets. The targeted density of 0.8 telephone lines per 100 population would require installation of 129,000 lines during 1991- 2000. 5. Prolect Objectlves. In preparation of its Eighth Five Year (1992-1997) development plan HllO has proposed an investment project that would support the expansion of the country's telecommunicatlons system, strengthen NTC's institutional capacity and fund NTC's investment program for Ml-FT95. To achieve this the project aims to: (a) increase the proportion of telecommunications services demand met in urban areas; (b) provide modern telecommunications facilities in all 75 districts and some 30 sub-districts and provide 60,250 new llnes by 1996; (c) improve the perforance quality of the telecommunications services; (d) further strengthen TC,' s management capabilities and system; (e) maintain and improve NTC's financlal performance; and (f) assist MG to review the appropriateness of the sector structure and develop a plan for reform. 6. Prolect Descriytion. The proposed project, to be implemented over six years, would consist of two components. The irvstment comuone=t (US$112.5 milllon, including contingencies) and ineludes provision of Equipment & Serviees and Civil Works, in partieular: (a) telephone switching exchange, outside plant and ancillary equipment to connect about 60,000 new telephone lines, in both urban and rural areas, (b) digital transmission links to replace the old Pokhara- Nepalgunj analog link in the main transmission network and to extend secondary and rural transmission links to new distriets, (c) equipment to extend data and text services as appropriate throughout Nepal and potentially to all 75 distriets, and (d) switching and transmission equipment to extend nation-wide and internattonal subscriber trunk dialing. The second component would provide t=chnical aLstance funding of US$4.0 million (ineluding contingencies) for (a) NTC instltutional strengthening (US$2.7 million, of whieh US$0.2 million are financed by IDA, remaining amount is financed by DANDA and FIVNIDA), ineluding consultant services to support improving the integration between technical and financial areas, creating a corporate data base which would form the base for billing, accounting and operational processes, and strengthening corporate management through appropriate training, und (b) a sector organization sub- component (US$0.3 milllon) in which the sectoral structure would be analyzed by consultants, following which IDA would assist }BIG to develop and implement an appropriate sector reform program. Key sectoral issues to be reviowd include: the institutional framework for developing; and reviewing sector policy and structure; private and public sectors' roles in delivering telecommunications services; sector regulation; and provision of social and remote area services. 7. The total project cost is estimated at US$116.5 million equivalent (including contingencies and excluding interest during construction), with a foreign exchange component of US$97.5 aillion (841). A breakdown of costs and . 3 - financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements, and the disbursement schedule, are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in Nepal are given in Schedules C and D, respectively. A map highlighting the project areas, IBRD No. 23474, ts attached. The Staff Appraisal Report No. 10062-NEP dated April 8, 1992 is being distributed separately. 8. Prioect Ilam . As with previous projects, NTC will undertake all technical construction related to the project. Where equipment installation and operations procedures are new to NTC, suppliers will be contracted to provide training to NTC staff and to supervise the installation and initial operation of their respective equipment. NTC will contract out civil works for buildings, outside plant ducts and some transmission tower works. NTC will be assisted in detailed engineering by suppliers and consultants. For switching equipment, suppliers will undertake detailed engineering, and IDA/NTC have already engaged an independent consultant, funded under IDA's Trust Fund, to help with tender preparation, evaluation and technical contract negotiations. FINNIDA will engage a consultant to help NTC with specifications and path designs for the more complex transmission systems. Consultant support is already being provided by DANIDA to help NTC with detailed planning and engineering of outside plant; additional consultant support is to be provided to help supervise construction. Furthermore, a project supervision consultant engaged by DANIDA and managed by IDA would assist NTC to develop and integrace its implementation plans and undertake detailed technical supervision of the project to supplement IDA, DANIDA and FINNIDA supervision resources. 9. Goods and services to the value of 87X of the credit would be procured using IDA's ICB procedures; for the remainder, direct purchase would be used to procure proprietary equipment and international and local shopping for minor items. Consultants would be engaged under IDA's Guidelines. 10. Project Sustainabilitv. The project is expected to be fully sustainable because (a) tariffs have been set to realize a satisfactory rate of return above the cost of capital, (b) it is one of a series of previously successful projects, (c) the now networks will be built on a sound, modern infrastructure base with proven technology, (d) NTC is a relatively competent organization, and (e) related institutional development will further enhance WTC's ability to operate and maintain the project's facilities. 11. Lessons Learned from Previous IDA Involvement. IDA' s involvement in Nepal's telecommunications sector began in 1969 with a credit of $1.7 million (Credit 166-NEP of November 1969). Since then IDA has financed three more operations: Credit 397-NEP for $5.5 million in June 1973, Credit 799-NEP for $14.5 million in August 1978 and Credit 1588-NEP for $22 million in April 1986 (the ongoing Fourth Project). The June 1988 PCR for Credits 397-NEP and 799-NEP rated these projects as successful, with significant contributions to the development of physical facilities, improvements of the quality of the telecommunications services and institutional development of NTC. The main implementation constraints were delays in start-up, in deciding on new technologies, in arranging financing and in the commissioning of some systems. From the earlier projects, important lessons incorporated into the design of the -4 proposed project were to (1) make more realistic implementation schedules, (ii) assist NTC in making organizational changes before the project starts, (iii) advance planning for procurement to facilitate timely implementation, and (iv) help NTC finalize financing arrangements in time for project implementation. 12. Rasionale for IDA Involvement. Under the earlier projects IDA played a significant role in the sector's evolution and provided a coordinating focus for assistance from other sources. H10 values this leadership role (in both assisting NWG to develop sector policy and mobilUzing funds). Thus IDA's continued involvement would help achieve several important objectives in the development of Nepal's tolecommunications sector. First, it would broaden the focus of reform to examine the sector's overall organization. The proposed project is part of IDA's proposed 1-ng-tera involvement ln the sector intended to make it a contributor to sustained economic growth, a positive agent in the country's socio-economic development and largely self-reliant for meeting its investment needs. IDA's cross-country experience in the tolecommunications sector in developing countries is directly relevant in advising HNC on sector structure, management and organization, financial relations with the operating entity, tariff structure, level and adjustment policies, and the timing and opportunity for introducing elements of competition and private sector participation. Second, IDA involvement would assist HNG maintain a necessary balance between physical and institutional development of NTC. IDA involvement would provide NTC with assistance for its institutional development -- in particular, strengthening of planning and project management, management training, extension of the use of computers for daily operations, and general strategic-technical guidance. Finally, IDA involvement would also contribute to economy in investment costs of equipment through procurement pro-planning and the use of ICB for IDA-financed items and ICB prices as a benchmark for other procurement. 13. Agreed Actipns. NTC has agreed to (a) implement, December 15, 1993 a revised organization structure and review and improve its human resource management arrangements; (b) appoint by June 30, 1993, management consultants, acceptable to IDA, for initiating and implementing a management development program; (c) furnish to IDA for each year beginning 1993, unaudited financial accounts by January 15, and audited financial statements and accounts by July 15 of the following year; (d) review annually with IDA progress on its institutional development program (IDP) and performace against agreed operational targets and take appropriate easures identified in those reviews to improve the IDP or its operational performance; and (s) ensure its annual rate of return on revalued assets is at least 12X after tax and before interest. Additionally, HMO has agreed to (a) implement a detailed action plan for preventing the accumulation of new arrears and eliminate arrears annually through a credit arrangement in relation to NTC's payments to HMG and (b) engage consultants, by December 15, 1992, to review the sector's structure and policies and, based on the consultants' report and with IDA assistance, develop and implement an appropriate sector reform program. During negotiations, the understanding was reached that, HNG/NTC will engage a consultant in time to prepare a report reviewing the tariff structure by December 15, 1993, and that the joint review, by IDA and HNG/NTC, of the consultant's recommendations will take place during the first quarter of 1994. Conditions of effectiveness are (a) the signing of a Subsidiary Credit Agreement bftween H1G and NTC ecceptable to IDA, Including on-lending arrangements for the proceeds of the IDA credit to NTC; and (b) that IDA should have receLved for its approval bid documents for the procurement of swLtchLig equipment. 14. FAMLAA W WEXa Aggets. The proposed project would not have a significant onvironmental i4maet, as construction would be lilmted to same minor site clearing and access roads needed to reach transmission tower sites. Road and verge surfaces will be effected by the laying of ducts for underground cable, but IDA will ensure that civil works contracts require full surface restoration. The disruption of virgin land is expected to be minimal. 15. Project Benefits. The proposed project's benefits would accrue to all sectors of the economy through improved access to telecommunications facllities and improved service quality. Users would benefit from the almost doubling in access, from 77,700 installed lines to 138,500 installed lines, and around 50,000 new subscribers would gain access to the network. Additionally, business activities would benefit from expanded transmission facilities for data and information. Extended facilities would widen the reach of emergency and government services and add to the quallty of life. HKG would also benefit, first as a user of the services, and second through increased transfers from the sector. Grants from DANIDA and FINNIDA would be on-lent to NTC on commercial terms, generating an inflow of funds to HMG. Furthermore, increased payments from NTC to HMG for sales tax and income tax would add to total net transfers of around US$104 million in the period 1992-2000 (equivalent to 2.5 years of NTC revenues). Continued emphasis on NTC's institutional strengthening would improve its performance as an effective telecoumunications entity operating on a sound commercial basis, increasing its responsiveness to users and the cost effectiveness of its investment, as shown by a projected economic internal rate of return of 222. 16. Laka. The project has been designed to minimize toehnical risks. However, implementation, and hence project benefits, would be impacted by delays in procurement and shortfalls in NTC's institutional capacity to implement the project. These risks have been recognized and actions initiated to minimize their impact: the various cotsultancies referred to in para. 8. 17. Re ion. I am satisfied that the proposed credit would comply wlth the Articles of Agreement of the Association and recom_end that the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C. April 9, 1992 -6- Schel&e A NEPAL Fifth Tel,communicatLons Project Estimated Costs and Flnance Plan EgeLsated Costs: MS Millon Loca Foreign TOW Equipment & ServIe 5.4 30.0 83.5 cii Wo*8 9.0 5.0 14.0 conhule'my 0.0 3.0 3.0 _ C SBMRM 14.5 68.0 102.5 Physiocl Confingefyo 1.5 4.5 6.0 Prie ConIgey 3.0 5.0 8.0 imeuimsggLa h19.0 97.5 116.5 Int. Durin ConstrutIon 6.5 1.0 7.5 (DC) || 8 Rnone< 251. 96 124.0 jg The proet coost Incdes an es_imated US41.8 uvuln euiaent In dute. Financing Plan: US$ Minl- Source of Financing Local Foreign Totl Denmark 0.0 18.0 18.0 FInlan 0.0 11.0 11.0 Japan 0.0 8.5 8.5 Nepal (NTC) 25.5 6.0 31.5 IDA 0.0 55.0 55.0 Total FRnilg 25.5 S8. 124.0 .7 Schedulg IL Page 1 of 2 NEPAI Fifth Telecoumunications Project Smary og Procurement Arrants (US$ million) Auawwnnmsthodm ProJet Eme Ct LcC Oth AF rOt 1.EO. Tephone Exchwne 24.5 3.0 2.5 30.0 (24.) (3.0) (27.5) T _wransIon Eq4wum 4.0 2.1* 21.0 27.s (4.0) (2.) (6.) Outd Plnt 13.0 17.0 ao.o (13.0) (13.0) Custme Powdson Equpmen 2.5 2.5 (2.5) (2.) OMc & Treain Equdpme 1. 1.0 (1.0) (1.0) Po%Equpment. Vee 4.0 4.0 & oeilae (4.0) (4.0) 2. CIvI MAW,* Out& PIan Dusdng 7.0 7.0 Dudig and SUs 10. 10.5 3. C4asudtmaIw Tehalod Asltorce 0ox 3.5 4.0 (0.5) (0.) Totl 4.0 0.0 7.0 61. 116.5 (46.0 0.0 (1.0) (56.0) NOJ:. Rpm In pmnthes am the respove m11nts firncd by the IDA edt NSF.: Not Be* Fnanod. Costs ae &d to neest 0.5 n OmlIon. enginceeringand atministrative overhea* . end ct the or O de f US1. millon. b. Indsdirot purchas pop yMi Aeoes Me(US$1.2 mlon). equpnt to eted exstn PCM microwaveusystem d We etatlon facide (Us a 1.6 u. O. Incudoeo.mputers, copr, pdnters and othemiscous offic en tdrn equ_ment to be proured unde inentoa and loc shoppbn (US$0*. milion. Page 2 of 2 DimburmgM= cat t oE f Enwh la be P§uunce (1) quipamt and mulas 32.9 100% of fein exditues, 100% of lold expmdtue (ex- Otay cam) and 80% of loea expndtuesfor oier ikem (2) Cladk' AM 0.3 100% Tota 33.2 Estimated IDA Disbursement M-A PXcAl Yew -((U$ __U*n) A1ul p.5 11.0 13.5 11.0 6.0 8.0 CQnuaiw 5.5 16.5 30.0 41.0 47.0 55.0 -9. NEPAL Fifth Telecomiunications Project Thuatable of Kae Project Procesgsing Eventg (a) Time taken to prepare the project. 18 months (b) Prepared by: NTC with IDA, DANIDA, FUINIDA, JICA and ITU assistance (c) First IDA mission: November 1989 (d) Appraisal mission departure: June 30, 1991 (e) Negotiations: January 1992 (f) Planned date of effectiveness: September 1992 (g) List of relevant PCRs and PPARs: credit Ng. ZRiecL ML= YRPRaDte 166-NEP First Telecom. PPAR No. 1843 December 29, 1977 397-NEP Second Telecom. PCR No. 7757 April 28, 1989 799-tP? Third Telecom. PCR No. 7757 April 28, 1989 Schdle 9 - 10 - P _ lf rIE STATUS OF DAW OW WERATIOU N NWPAL A. STATOE OF uI LOANS AND IA CRIM * (As of December 81, 1991) Amant to US$ illilen (lee canellatilons) Fletzl UftndI*- Credit No. Veer Borrowr Purpoe Bank IDA borwe 36 credit. hew bee fully disbursed 877.96 Of which SECAL., SAL* ard Prosr Loans b) Cr. 1769-N 1097 No" l Structural AdJustment 0.00 50.00 Sub-Total 0.00 50.00 Cr. 1198W 1082 Nel Education 2S 14.30 4.11 Cr. 14004W 19" Nepl Forestry II (ToTrl) 7.8 5.52 Cr. 1488-NE 190 Neal Education III (P.imery) 9.61 5.21 Cr. 1476-N 10 Nepl Pwer tU (Marsysegd) 107.00 51.11 Cr. 1C15-N 190 Nepal Highways 1II 47.50 80.20 Cr. 1634-E 10" Nl Aricultural Manpowr 8.40 6.S3 Cr. 1t58-NE? 1900 Nl Industrial Developmnt ?.so 3.80 Cr. 1570-N 1is5 Ipl Agricultural Extenslon I. . 7.20 7.16 Cr. 1588-NEP 1900 Npal t lecommunicatlone IV 22.00 17.81 Cr. 169W-NE 1900 Nepal Cottag A Small Indu trise 10.00 6.41 Cr. 1716-NE? 1906 Nepl Narynl Irrigation III 24.60 22.44 Cr. 1727-NE? 1907 Nepl Rural DOvelopment SS 19.10 19.67 Cr. 1814-NEP 1907 Nepal Sunsary-Moran US 40.00 26.98 Cr. 1902-NE? 1900 Nepl Third T.A. (Panohowear) 14.40 8.82 Cr. 1922-W 198 NLp l Road Flood Rehabiltt.tion 16.50 1S.02 Cr. 1924-NEP 1908 Npl mahakali Irelration It 41.30 27.10 Cr. 1986-NE? 1969 Nep l Municipal Dov & Earthquake 41.S0 22.80 Cr. 2028-NEP 199 Nepnl Hill Community Forestry 80.50 29.67 Cr. 2029-NEP 1969 Nepal Arun III Acces Road 32.80 84.69 Cr. 2044-NEP 1009 Nepal Engineering Education 11.40 11.90 oCr. 2048-NE? 1909 Nepal Structural Adjustment tS 00.00 22.17 Cr. 2047-NE? 1969 Nepal Earthquake School Rehab 22.80 21.20 v.P. 2144-NE? 1990 Nep Shairawa Lumbini III 47.20 49.70 Cr. 2289-4 c) 1991 Nepl Urban Water and Sanitatton Rehab. 60.00 66.06 Total 0.00 1079.84 d) 607.16 d> of which has been rep Id 11.42 Total now held by Bank and IDA 0.00 1066.42 Amount old of which repald Total undisbureed 57.21 a) Po Dank loans have ben made to Nepal. b> Approved dur1 ng or after FY.0. c> Not yet effective. d> Tho principal amoun0t of IDA credits nr* shown In US Dollar equivalnto at date of negotiation., as shown In the ProWenont', Report. Undlsbured ounts shown IInUs Dollar equivaIent are valued at the exchange rate appllcable on the date of this etatem*t. In com case therefore, the undisburned balanie Indicates a dollar amount rater than the originol prlncipal credit amount expressod In dollare. * SAL, SECAL or Progrm Loan. - 11 - STAMPr OF MF hST-" Znv.e mot Fical TYp ot Lan EquIty Total Number _Ys Lr Obl loor fusLeSn. am _ f I iioo 312 1907 S"lt.* Hotel (Private) Ltd. Hotel 2.70 0.48 8.18 024 1982 Nepal Orind magneite Nine and Proces (Privat) Ltd. Naesitt Ore 4.07 - 4.97 Tota I Qto Commite"to n7.67 0.48 *.10 Lees Cance llttons, termiations, repayment and soles 8.2U - 8.26 Total Co.mitm.nta now held by IFC a) 4.29 0.48 4.72 Total Undisbursed (Includlgg Partcloata'portion) a) Exchange adjustments account for variation In toal gros commitmetst, loe cane llotions, oec., and total comml_tmte now held by DC. MAP SECTION 4 IBRD 23473 N E P A L FIFTH TELECOMMUNICATION PROJECT Humel PROPOSED PROPOSED __nN I TH(NSION) E(N1NG ASY Dorchulo '1> O R o R * EXCHANGES U N / t / JN TRANSMISSION UNES, - ~~~~~~~~~DIGIrAL stig | T g S E T I Mugu AV ANAiLTOtG e M ~~~Sisgodhi KA RN A LI SMv AtLLSATELLITE TERMNALS MSA SERVICE) Mohd gor NATIONALCAPtAL \ t < > O / \ O X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~INTERNATIONAL BOUNDARJES )DhHEng wr S M ongin Kathmand III,mi, hdrkli,Centr Ill.IGongabu, This snap hoe bees, prepared by The World Bank's staff ealleyaehidusChhunisNaxetynd fotr the oonr.n,e,,o of readers and i for the ter usGAND o Kh end Cenral 11 n,ap do not tn,pt on the port .f ThelWirld Baunk Grop,aanylun P jkha AlchTrondaries SI. -o Srs th. i .S &~V. Im.-1 The WbA 1 992 ->smp d. ..t -pry noeb Th. =Ird B..kG-.p anyf j.dg-us/tfo ur or\ N f / \ h9ii mrpd thml. 1o.1woro TWo/stt- oup any juget.hrit.,Y - hond.srnn -6i -ptho Bhdfpu APRIL 1 992