Fifth wapda power project.
Report No: ; Type: Report/Evaluation Memorandum ; Country: Pakistan; Region: South Asia; Sector: Distribution & Transmission; Major Sector:
                                           Electric Power & Other Energy; ProjectID: P010219
 Pakistan: Fifth WAPDA Power Project (Loan 2556-PAK)

 The Implementation Completion Report (ICR) on the Pakistan Fifth WAPDA Power Project (Loan 2556-PAK,
 approved in FY85), prepared by the South Asia Regional Office, including the Borrower's contribution, was
 reviewed by the Operations Evaluation Department (OED). The loan, in the amount of US$ 100 million, was
 closed in December 1993, about three years behind schedule, at which time US$ 0.2 million was canceled.

 The project's objectives were to assist the Water and Power Development Authority (WAPDA)-the state-owned
 utility responsible for generation, transmission and distribution of all electric power in Pakistan outside the
 Karachi area-with the least-cost development of its 500 kV transmission system and to support its institutional
 strengthening. The main project components were: (i) the construction of 1100 km of 500 kV lines (from Lahore
 to Jamshoro) and of associated switching facilities; and (ii) three technical studies (of collection and retrieval of
 data on the power system, system load management, and feasibility of a coal fired steam plant).

 The project met its primary physical objectives to reinforce the capacity of the north-south transmission system
 and enhance its reliability. However, completion of the last section of the transmission line (from Guddu to
 Jamshoro) was delayed by 5 years because of delays in the construction of the Jamshoro power station and civil
 unrest in Sindh province. Because of these delays, costs were 34 percent higher than estimated at appraisal. The
 ERR on WAPDA's overall investment program (estimated at 15.1 percent at appraisal) was reestimated at 10.4
 percent, mostly due to lower-than-forecast tariffs. The studies financed by the project contributed to the
 institutional strengthening of WAPDA, as part of a broader Bank strategy to support sector restructuring with
 major involvement of the private sector, pursued more directly under parallel operations (including a
 contemporaneous Energy Sector Loan). Both WAPDA and the Government complied with the main loan
 covenants on losses reduction, revenues, debt service coverage, and reduction of WAPDA's receivables from
 Government entities.

 OED rates project outcome as satisfactory and institutional development impact as substantial. Sustainability is
 rated as likely in view of the sector's prospects for continued efficiency improvements in the context of the
 ongoing sector restructuring. Bank performance is rated as satisfactory. These ratings are consistent with those in
 the ICR.

 A key lesson from this project is that detailed technical design for "blue-print" projects or components of this type
 should be firmed up before loan approval: the changes in project design that WAPDA had to make during
 implementation, while they were technically justified, led to major delays due to the need to obtain the required
 additional Government authorizations. The ICR is generally satisfactory. In particular, it includes a clear and
 concise detailed operation plan for the project. An audit of the project is currently underway.