Docmntet of The World Bank FOR OFFICLAL USE ONLY Report No. 13764 PROJECT COMPLETION REPORT THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) DECEMBER 9, 1994 Infrastructure Operations Division Country Department I East Asia and Pacific Region 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. CURRENCY EQUIVALENTS Currency Unit = Thai Baht (B) Loan 2894-TH US$1.00 = B 26 (at appraisal, January 1987) US$1.0 - B 26 (at closing date, December 1992) Loan 3008-TH US$1.0 = B 26 (at appraisal, June 1988 ) US$1.0 = B 25 (at closing, December 1993) FISCAL YEAR October 1 - September 30 MEASURES AND EQUIVALENTS Metric System ABBREVIATIONS ADB - Asian Development Bank DOH - Department of Highways LTD - Department of Land Transport MOTC - Ministry of Transportation and Communications MOF - Ministry of Finance NSC - National Safety Council OECF - Overseas Economic Cooperation Fund (Japan) FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation December 9, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Thailand Railway Efficiency Improvement Project (Loan 2872-TH) Attached is the Project Completion Report on Thailand - Railway Efficiency Improvement Project (Loan 2872-TH), prepared by the East Asia and Pacific Regional Office. The Borrower did not contribute Part II. The main project objective was to achieve immediate improvements in the railway's operations and finance. Together with follow-up initiatives, the project was expected to make the railway operationally efficient and financially viable. Project benefits were to become apparent within two years. Further, the project was to demonstrate the impact of operational improvements on railway finances and to become the foundation for a major railway reorientation. Project components were technical assistance, training and procurement of diverse goods. Implementation lasted more than six years. There was a time over-run of 100%. While most project items were implemented, actual project costs are not available. Regarding the railway's financial position, the PCR has nothing positive to report. The PCR notes increases in traffic and productivity. There is little evidence that such improvements were attributable to the project. But these are signs that project components such as Technical Assistance in marketing and Operations Control Systems were timely and also that management's will and capability exist to reorient the railway towards solvency. Project outcome is rated as marginally satisfactory on balance. The institutional development impact is modest. Sustainability is uncertain due to the railway's policy environment and road competition. No performance audit is planned. Attachment 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.| FOR OFFICIAL USE ONLY THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table of Contents Preface ....................................... i Evaluation Summary ....................................... ii PART I. BANK'S REVIEW Summary Project Data ............................ I Background .............................1 Previous Bank Inivolvement .......................... 2 Project Objectives ............................ 2 Project Design ............................ 3 GTZ Project ............................ 4 Project Implementation ............................ 4 Project Results ............................ 8 Project Sustainability ............................ 8 Bank Performance ............................. 8 Borrower Performance ............................ 9 Project Relationshiip ............................ 9 Consulting Services ............................ 9 PART 11. BORROWER'S EVALUATION ...................... 10 PART III. STATISTICAL INFORMATION: TABLES Table 1: Project Timetable .............11............... 1 Table 2: Related Bank Loan and/or Credits ...... .. .......... 12 Table 3: Bank Resources ............................. 13 Table 4: Cumulative Disbursement Schedule ..... .. .......... 14 Table 5: Status of Covenants ........................... 15 Table 6: Procurement of Goods ......... .. .............. 16 Table 7: Summary of Technical Assistance & Training Components . . . 17 This document has a restricted distribution and may be used by recipients only in the performance oŁthir official duties. Its contents may not otherwise be disclosed without World Bank authorization. ' - i - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Preface This is the Project Completion Report (PCR) for the Thailand Railway Efficiency Improvement Project for which Loan 2872-TH in the amount of US$13.0 million was approved on September 15, 1987. The loan was closed on December 31, 1993, three years behind schedule. The undisbursed balance of US$1,568,070.25 was caniceled on May 6, 1994, whichi was the date for the last disbursement. The PCR was prepared by the Infrastructure Operations Division of the East Asia I Department (EAIIN) with the assistance of a consultant. Preparation of this PCR was started during the Bank's final supervision missioni of the project in May 1993, and is based, inter alia, on the Loan and Project Agreemenits; the Memorandum of the President; supervision reports; correspondence between the Bank and the Borrower; and internal Bank memoranda. There was no Staff Appraisal Report prepared since this was a Technical Assistance Project. - ii - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Evaluation Summary Obiectives The immediate objective of the Project was to assist the State Railway of Thailand (SRT) in achieving certain improvements in its operations and financial position. It was reasoned that if it could be shown through such a relatively small project (in terms of cost) that tangible operational and financial benefits were possible, then the Government and SRT would be more receptive to a larger project with a longer term objective. This objective would be to turn SRT into an operationally efficient and finanlcially viable railway. Implenientation Experience Implementation was, with one exception, routine. The Project initially included a component to develop and implement a passenger "Seat Ticketing and Reservation System" (STARS), and for tile necessary hardware procurement. The SRT decided during implementationi, however, to contract the system on a "turn-key" basis. This decision, and the subsequent pre-qualified bidders received no objection from the Bank. However, as a result of representations made to the Bank on behalf of a firm, the Bank requested that SRT pre-qualify that firm. SRT did not agree to this request, and the component was removed from Bank financing. These events considerably delayed the implementation of STARS. A further decision was made by SRT to use the STARS mainframe computer as the mainframe for the Bank sponsored Operations Control System (OCS) development. This meant that contracting specifications for OCS could not be finalized until the STARS system had been contracted. As a result, OCS development was delayed significanltly, however, the introduction of both the STARS and OCS systems is expected to have significant long term benefits to the operational efficiency of the railway. Since the Bank's long term objective was to improve the operational and finanicial performance of SRT and to set the stage for a larger project whichi would assist in making SRT more commercially oriented and financially viable, the Bank agreed to extend the Project's loan closing date for a third time in order to have the opportunity - iii - to work with the Government and SRT in the development of a Long Term Master Development Plan Study for the railway. This Study attempted to forecast the role of the railway in the Thai transport system in the next century. While the Bank did not agree with some aspects of the Study, there was agreement with the conclusion conceriniig the need for chaniges in the SRT organization and the way in whichi the railway is regulated. Further analysis is needed to determine the specific changes that should be made, but the implementation of the agreed upon chaniges would form the foundationi for any future Bank lending program to SRT. Stistainability All of the goods procured should maintaini an acceptable level of net benefit during their economic lives. Sustainability of the technical assistance and training componenits will vary. Long term benefits should be realized from the MIS assistance. Freight marketing techniques learned by SRT should have long-ranginig effect. Withill the Civil Engineering Department, certain maintenance techniques learned should have similar effect, but the planniniig systems introduced have questionable long-term impact. Findings and Lessons Learned There were a number of findings and lessons whicih resulted from this Project. These included: (a) Althoughi relatively small in cost, this Project was very diverse in nature. It included technical assistance, traininig and goods procurement whici involved a great number of SRT offices. To ensure that these components were implemented in full concert with one anothier, and with the Project objectives in mind, was too great a task for periodic visits by Bank personiel. Furthermore, it may be too muchi to expect that the Borrower could effectively manage the project along these lines witilout a prior firm commitment. As a result, componenits were implemented to a large degree as separate sub- projects, with relatively little coordination. This led to a lack of highi level direction withiln the components, resulting, in certain instances, in less thani fully effective implementationi (vis a vis the objectives). Such projects require an active management organizationi to oversee implementationi. This function should be assigned to a senior level manager withini the Borrower's organization, who has the time in his work schedule to do justice to the assignment. Consideration might also be given to providing techilical assistance to this manager. (b) The Project was designed in concert with a Gesellschaft fur Techliischle Zusammenarbeit (GTZ) project, with the two being complementary and carried out at the same time. While relations between the Bank and GTZ - iv - personnel were good, there may have been better cooperation between the implementing parties. Consultants working under GTZ financing had no reason to be cooperative with Bank staff. Although such cooperation oftentimes did exist, the Bank's and GTZ's projects were, in large measure, run as separate projects rathier thani as parts of a whole. There may have been improved success overall if one of the lending agencies had some degree of responsibility for the whole project, but at the time, SRT did not want either the Bank or GTZ to have that function and insisted that it be done by SRT. (c) In certain cases, some of the technical assistance consultants on this project attempted to introduce techniologies witliout adapting such technologies fully to meet SRT's conditions and environment. In the worst case, this can have a negative effect on project objectives, althoughi in this case the results were not quite as dramatic. Improved project managemenit as outlined in a) above would have helped this situation. In addition, techniical assistance and traininig terms of reference must be prepared in such a way so as to minimize the potential of this problemr. THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PART I - BANK'S REVIEW Suminary Project Data Project Name Railway Efficiency Project Loan Number 2872-TH RVP Unit : East Asia and Pacific Country : Thailand Sector : Transport Subsector : Railways Board Date : September 15, 1987 Signing date : December 11, 1987 Effective Date May 10, 1988 Closing Date December 31, 1993 Loan Amount US$ 13.0 million Disbursed Amount US$ 11.4 million Backlgrou nd 1. SRT has recently celebrated its centeninial anniversary. During most of its Ihistory, it has served the people of Thailand well while generatinig sufficient profit to sustain its operations. As with the world experience, SRT experienced virtually a monopolistic position in the transportation sector in Thailanid during the earlier years. As a result, the Royal Thai Government highly regulated the operations of SRT. The railway became an instrument of Government policy. 2. Again following the world experience, SRT began receiving formidable competitioni from the highiway sector. Small and efficient trucking and bus operations began offering service-oriented transportation alternatives, which were financially viable. It became evermore difficult for SRT to compete withi these companies, largely due to two problems. Firstly, the Railway was handicapped by the Governmenit regulations in place, especially related to tariff and wage rate setting. Secondly, SRT remained an instrumenit of Government policy, with considerable interference from the Government -2- in its operations, and without the incentive or experience to operate efficiently from a financial point of view. 3. In 1974, SRT experienced an operating loss. Its operating ratio (expenses/revenues) rose from 88.6 % in 1973 to 106.1 % in 1974. For the twenty years henice until today, SRT has been operating in a loss position. Unider legislation, the Government must make payment each year to SRT in an amount eqjual to its operatiig loss from the previous year. 4. Third class passenger service represents more tlhan 70% of SRT's business in terms of train kilometers. During the period 1970 to 1990, third class passenger fares decreased (on a constant Baht basis) by almost 50% (based on a trip distance of 500 km.). Similarly, freight tariffs fell almost 50% (Class 4 freight over a distance of 500 km.). These tariff rates are largely due to Governmienlt regulation. 5. During this period (1970-1990), SRT received, and continiues to receive, contlictinlg directives from tile Governmenlt. On the one hanid, land transport bureaucrats require services for the public good, at rates perceived as politically acceptable (but at lower thani cost). On the other hand, the financial bureaucrats insist thlat SRT lower its operating losses. In the world context, SRT has met the service demanlds quite well. By most measures, its productivity levels are acceptable. Efforts at decreasing operatiig losses have concentrated mostly on staff reductions. During this twenty year period numbers of employees fell by about 22%, while over the same period numbers of passengers transported rose 64% and freight tonnage transported grew by 80%. 6. SRT continues its attempts at balancing these contlicting signals from Government today. It was withill this context that the Railway Efficienicy Improvemenit Project was developed. Previous Bank Involvemenit 7. The Bank has been involved with railway developielint in Thailand through five previous loans. The last project, Railway Project V, closed during 1984 (PCR #6163, April 1986). A planned sixth railway project was shelved at the green cover stage in 1983, primarily because the Government would not agree to substantial tariff increases proposed by the Bank. The Bank considered these inicreases necessary to improve SRT 's financial position. Proiect Objectives 8. The immediate objective of the Project was to assist SRT in achievinig certain inprovements in its operations and financial position. It was reasoned that if it could be showin through such a relatively small project (in terms of cost) that tangible operational and financial benefits were possible, theni the Governiiiiet and SRT would -3- be more receptive to a larger project with a longer term objective. This objective would be to turn SRT into an operationally efficient and financially viable railway. 9. Within the immediate objective of this Project was included the need to identify those market segments which SRT could effectively and profitably serve, and to strengthieni SRT's ability to compete with other modes. The Project was aimed at: (a) realigninig railway services to match changing demand; (b) increasinig marketing and sales efforts; and (c) reducing costs per traffic unit through cost reduction and efficiency improvements. Project Design 10. Following is a summary list of the major project componienits whicih were planiied: (a) Technical Assistance and Training: i. Freight traffic marketing skills; ii. General Management Information Systems planining; iii. Operations Control System development; iv. Invenitory & Materials Managemenlt System development; v. Seat Ticketing and Reservations System development; and vi. Civil Engileerinig methodology and plannilng. (b) Procurement of Goods: i. Yards and line radio systems; ii. Computer Equipment (associated with Techinical Assistance packages); iii. Passenger coach bogies; iv. Track maintenance equipment; v. Mobile Wagon Repair Truck; and vi. Diesel engines and turbo chargers. - 4 - 11. By design, the Project was fragmented according to SRT's immediate needs. Each component was relatively well defined, with specific goals in mind. The goods procurement componenits were aimed at meeting immediate operational needs. The largest of the technical assistance/training packages was in the area of managemenlt information systems, aimed primarily at the development of systems to improve operational efficiency. The remainder of the technical assistance/trai niing componenits were designed to improve specific management skills. 12. In general the packages were well designed and defined. For the techilical assistance program, there was a slight deficiency in defining the level of techilology adaption required to suit the organizational environmenit. Also, in the managemenit systems area, there was not enoughi effort to define implementatioll organizationi. GTZ Proiect 13. The Bank's Project was designed in concert with a technilcal assistance project carried out under German fundinig. This project provided assistance to SRT in the following areas: (a) Passenger marketing; i. Marketing planniniig & policy; ii. Mechaniical shop maniagemenit; iii. Air brake conversion program; and iv. Stores maniagemenit. 14. The Bank and GTZ projects were not designed with major organizationial interfaces between the two. In retrospect, it. would have been beneficial if a new organizationial unit such as a project office had been defined to ensure close cooperation between the two projects. Instead, both projects were maniaged and coordination was to be provided by the Policy and Planning Bureau. This coordination was at times not as effective as it could have been. Proiect Implemenitation Technical Assistance and Training 15. Freight Traffic Marketing Skills. The consultant worked well with tile Freight Marketing personnel, and there was a higih degree of techilology transfer. Significanit gains were realized in the effectiveness of the freight marketing organizationi, includinig its ability to assess customer needs and to plan for future requirements. A unit - 5 - (block) train container operation was created and continues to operate satisfactorily. Training programs for 100 Traffic and Marketing personnel were carried out with a perceived higih degree of success. 16. General Management Information Systems Planning. This componenit was largely aimed at defining management reporting from the STARS and OCS systems (below). Implementationi will be done by SRT subsequent to full implementation of these two systems. 17. Seat Ticketing and Reservations System Developmenit. This system developmenit was originally designed to provide for computer hardware purchase and technical assistance in developing the software. SRT subsequently decided, however, to contract "STARS" on a "turn-key" basis. This was accepted by the Bank, but later there was disagreement on the firms to be pre-qualified. This conflict resulted in the STARS package being removed from Bank financing whicih caused considerable delay in contractling for STARS. 18. Subsequently, SRT decided to use the mainframe computer to be supplied under STARS as the mainframe for the Operations Control System (OCS) and tile Inventory and Materials Management System (IMMS), both of whiclh were under Bank filancing. This lead to considerable additional delay to the contracting of these latter two systeis, as an agreement with the STARS contractor had to be signed before specifications for the other two systems could be finalized. The net result was a delay of over tllree years to the OCS system development. 19. At thle time of writing this report, the STARS system hias been implemilented at all of SRT's stations. There remain some data communications problems, andcl not all of the batch reports have been implemented. 20. Operations Control System Development. After the considerable delay in contracting for this system, the software is now complete and tested, and field impleimentationi is underway. Several hardware problems are being experienced, but shoul(d be resolvable by SRT. This system should lead to considerable operational efficiency gains, but it is too early to evaluate the results. 21. Invenitory & Materials Management System Development. Because of the lengthy delays withini the MIS development area, caused by the STARS delays noted above, and because of the lack of sufficient SRT resources to support simultaneous developmenit of STARS, OCS and IMMS, it was decided by SRT to defer IMMS developienit, and therefore to delete IMMS development from the Bank's project. The Bankl supported this decision. 22. Civil Engineering Methodology and Planning. This program concentrated on four major areas: a) track and track maintenance standards; b) track -6- maintelalace planning; c) machilnery requirements and usage planinilig; and d) bridge maintenance planning and procedures. Althiough some useful techniology transfer took place, the overall benefits of this package are limited. It appears tilat in many cases techinologies introduced were not adapted well enough to suit the local organizatiolial env ironniienit. Procurement of Goods 23. Railway Line Radio System. It had been originally planined to introduce a tull train radio system on one or two selected test track sections. The intentioni was to proviide SRT withi experience on such a system, in order for thern to evaluate the potential of a full (system-wide) train radio system. During the project period, however, SRI' decided it wanted full implementationi immediately. The Banlk tully endorsed this positioln. 24. At the time of writing, 400 base radios have been installed (mainly at stations), and 337 mobile radios are being installed on locomotives and diesel rail cars. Althiough too early to measure, it is anticipated there will be significanit improvemelits realized in train operating efficiency and safety. 25. Yard Radio Systems. Base radio stations and hanid-portables have been installed at Bangkok, Bang Sue and Mae Nam yards, to improve yard operating capability. Impleimentationi went well, and no problems were reportedl. SRT reports that a decrease in accidents at these yards has been noted, and that there is an increase in the capacity and throughiput times at these yards (quantifiable data not available). There are no plans, however, to introduce the systein at other (smaller) yards. 26. Computer Equipment. This componienlt included procuremenlt of terminials and data communlications equipmenit required by the OCS system. There were significanlt changes from the original specifications caused by the decision to contract STARS on a turn-key basis, and by the earlier than anticipated implemlienitationi of the fiber optics line on SRT's right-of-way. The success of this componienit canilot be evaluated until the OCS system has been fully operational for a period of time. 27. Passenger Coach Bogies. 178 passenger coachi bogies hiave been purchased and installed on older 3rd Class coaches. This has resulted in extended coacil life, amid has elevated the maximnum speed capability of these coaches from 70 kph to 100 kphi (imax. 120 kph). 28. Track Mainteniance Equipment. Three ballast regulators and one ballast tamper have been procured and are in service. These have lead to imnprovements in track maintenance productivity and quality. Corresponding procurement of track maintenlanice workshop equipment, planined under the project, was carried out locally by SRT using thieir owIn funds. 29. Mobile Wagon Repair Truck. This vehicle, and its equipment, is intended to effect more timely repairs of locomotive break-downs in service, or of accidents. The result is improved operating efficiency and gains in locomotive in- service times. The truck is operational, but has not yet been licensed for road transport. 30. Diesel Engines & Turbo Chargers. SRT has purchased and installed 106 new diesel engines for locomotives, of which 18 were financed by the Project. The life of the corresponding locomotives has been increased accordingly by at least 10 years. 31. The Bank also financed the purchase of 50 turbo- clharger units, which have now been installed. This has put back into service several locomotives whiclh had been awaiting these parts. Other Project Work 32. In addition to the planned work, the Bank assisted SRT in other ways during the project period. Firstly, the services of a railway consultant was provided for 4 monitils to assist in project implementation and to act as an adviser to the General Manager. Secondly, the project review missions assisted SRT in future strategic planninilg. Thirdly, the Bank lent good support to the Long Range Master Developmenit Plan Study carried out by the Thailand Development Researcil Institute for SRT. This latter study was aimed at a partial restructuring of SRT, and at this tine is still under active review by SRT Executive Management. All of this additional work has proved valuable in progressing the project's objectives. 33. Since the objective of this Project was to begin to improve the operational and ftinanicial performance of SRT and to set the stage for a larger project whichi would assist in m1akinig SRT more cominercially oriented and finanicially viable, the Bank agreed to extend the Project's loan closing date for a third time in order to have the opportunity to work with the Goverinenit and SRT in the development of a long term master plan for the railway. Both the Govermnenlt and the Bank believed that SRT was important to the Thai economy, but each wanted to study the issue to determine the specific role that the railway should play in the Thai transport system in the next century so that future railway investments would be properly focused. 34. The Long Term Master Development Plan Study concluded that there would be a very sharp increase in SRT passenger demand over the next 20 years, and a lessor but still significant increase in freight demand over the same period. The Study also concluded that there must be some fundamental chaniges in the SRT organization and environimiienit if SRT is to benefit from this increased demand. While the Bank does not completely agree with the conclusions reached concerninlg the increased demand for rail traffic, we are in complete agreement on the need for changes in the SRT organizatioln and the way in which the railway is regulated. Further analysis is needed to determine the specific changes that should be made, but the implementation of the agreed upon chianges would form the foundation for any future Bank lending program to SRT. Project Results 35. Both passenger and freight traffic continues to grow on SRT in terms of passenger-km and ton-km in the range of 2% and 5 % respectively. Staff productivity in terms of traffic units per employee has also grown at an annual rate of about 5 %. Thlese improvements are due in part to the Project. The first component of the immediate objective (improvement in operations) has been met. There as yet is no significant improvement in SRT's financial position, although in time sucIl items as operational efficiency improvements due to the OCS system should assist this position. It is not possible at this time, however, to confirm that the second componenit of the immediate objective (improvement in finanlcial position) has been met, but this is largely the result of the Government not being willinig to provide the management of SRT with significant control over either the operating revenue (tariff setting) or operating costs.. 36. It is likewise too early to determine if the long-range objective of turnilig SRT' into an operationally efficient and financially viable railway can be met. It is discouraging to note, however, that the momentum towards financial reform has all but ended. Whereas the Thai Cabinet previously agreed on a policy of having the Govermnent compensate SRT for the cost to provide the non-commilercial services that the Government requests (through a mechanism called Public Service Obligations (PSOs)) for this policy has not been implemented. There does not appear to be any significaiit effort at this time to implemenit a PSO for SRT. Proiect Sustainability 37. All of the goods procured should mainitain an acceptable level of net benefit during their economic lives. Sustainability of the technical assistance and traininig componienits will vary. Long term benefits should-be realized from the MIS assistance. Freight marketing techniques learned by SRT should have long-raniginlg effect. Within the Civil Engineering Department, certain maintenance techniques learned should have similar effect, but the planning systems introduced have questionable long-term impact. Banlk Performance 38. The Project was well-conceived, and the Bank's personinel performed well during implementation. This was a difficult Project to supervise, however, due to the nuinber of technically unrelated components. There was perhaps not enough time spent on supervising the individual components, and as such some components were designed and implemented without due regard to the Project's objectives. An example is the Freight Marketing technical assistance, where the consultant worked closely with SRT in setting up a unit (block) train operation for containers. Operationally this has - 9 - proven very successful, with the customer's needs being met to a high degree of reliability. There is good cause to question, however, if SRT is recovering costs from this operation. Borrower Performance 39. The Borrower performed well throughout the life of the Project. SRT persoinel were very cooperative with Bank personiel, and SRT staff assignment for implementation was adequate. Because of the fragmented project, however, and the large number of SRT departments involved, the Borrower might have been more diligent in overall maniagement of the Project. Project Relationship 40. As noted above, relations between the Borrower and the Bank were good throughiout the Project. The Bank personnel reacted well to SRT's needs, and SRT personilel were always cooperative with supervision missions. 41. The Project was designed in concert with a GTZ project, with the two being complemenitary and carried out at the same time. While relations between the Bank and GTZ personnel were good, there may have been better cooperation between the implemilenltinig parties. Consultants working under GTZ financing had no reason to be cooperative with Bank staff. Although such cooperation oftentimes did exist, the Bank's and GTZ's projects were in large measure run as separate activities, rather than as parts of a whole. There may have been improved success overall if one of the lending agencies had some degree of responsibility for the whole project, but at the time, SRT did not want either the Bank or GTZ to have that function and insisted that it be done by SRT. Consultinig Services 42. Generally, the consultants involved in the Project performed well. in some cases, however, there was not enoughi effort made by the consultant to adapt his techniology to suit SRT conditions. This was especially true in the MIS and Civil Enginieerinlg componenits. In the Freight Marketing component, there was some deviation from the defined terms of reference, which required contract extensionls to rectify. - 10 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT PART 11. BORROWER'S EVALUATION The Borrower did not provide Part II of the Report. - 11 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 1. Proiect Timetable ftem Date Identification December 1984 Preparation October 1986 Appraisal Mission No appraisal mission. Negotiations April 1 987 Board Approval Setember 15, 1987 Loan Signature December 11, 1987 Loan Effectiveness May 10, 1988 Loan Closing: Original December 31, 1990 Revised December 31, 1993 Comments: There was no appraisal mission. Preparatory work done for the Railway VI project, which did not materialize, was used to formulate the Memorandum of the President. - 12 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 2. Related Bank Loans and/or Credits Year of Loan/Credit Purpose Aooroval Status Comments Loan 898 To assist State Railways of 1973 Completed PPAR #2611 Fourth Railway Thailand (SRT) to increase their July 1979 transport capacity, modernize operations and reduce transport costs by investing in diesel locomotives, rolling stocks, tracks, yards and station improvements. Loan 1662 To assist the SRT in the 1979 Completed PCR #6163 Railway V financing of their investment Arpil 1986 plan for 1977-1981 and to improve efficiency by replacing obsolete and worn-out assets and expanding capacity to serve projected taffic needs. - 13 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 3. Bank Resources A. Staff Invut Staae of Proiect Cycle Number of Staffweeks Through Appraisal 10.6 sw Appraisal through Board Approval 7.4 sw Board Approval through Effectiveness 19.7 sw Supervision 75.1 sw Total: 112.8 sw B. Missions Month/ No. of Days in Special- Performance Type of year persons field ization rating problem Feb. 1985 3 14 EC/RE/CONS n/a n/a Oct. 1985 2 6 EC/FA n/a n/a Oct. 1986 2 14 EC/FA n/a n/a March 1 987 2 1 2 EC/FA n/a n/a May 1987 1 2 EC n/a n/a July 1987 1 14 LO n/a n/a Sept. 1 987 3 7 EC/FA/CONS n/a n/a Feb. 1988 3 10 EC/FA/CONS 1 n/a Sept. 1 988 3 10 EC/FA/RE 1 n/a Feb. 1989 3 14 EC/FA/RE 1 n/a Sept. 1989 3 10 EC/FA/RE 2 P/F Jan. 1990 3 18 EC/RE/CONS 2 P/F Sept. 1 990 2 1 5 EC/CONS 2 P/F Sept. 1991 3 7 EC/FA/CONS 2 P/F Jan. 1 992 3 7 EC/FA/CONS 2 P/F June 1992 2 7 FA/CONS 2 P/F Nov. 1992 2 2 FA/CONS 2 P/F May 1993 2 4 FA/CONS 2 P/F Note:EC - Economist FA - Financial Analyst RE - Railway Engineer LO - Loan Officer P - Procurement F - Financial Performance -- 14 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 4. Cumulative Disbursement Schedule Fiscal Quarter Actual Disbursement (in US$ million) Year Ending Quarter Cumulative 1988 Sep. '87 0.00 0.00 Dec. '87 0.00 0.00 Mar. '88 0.00 0.00 Jun. '88 0.04 0.04 1989 Sep. '88 0.08 0.12 Dec. '88 0.08 0.20 Mar. '89 0.13 0.33 Jun. '89 0.85 1.18 1990 Sep. '89 0.13 1.31 Dec. '89 0.71 2.02 Mar. '90 0.14 2.16 Jun. '90 0.07 2.23 1991 Sep. '90 0.75 2.98 Dec. '90 1.37 4.35 Mar. '91 1.17 5.52 Jun. '91 0.03 5.55 1992 Sep. '91 0.06 5.61 Dec. '91 0.29 5.90 Mar. '92 3.43 9.33 Jun. '92 0.30 9.63 1993 Sep. '92 1.08 10.71 Dec. '92 0.22 10.93 Mar. '93 0.08 11.01 Jun. '93 0.30 11.31 1994 Sep. '93 0.00 11.31 Dec. '93 0.05 11.35 Mar. '94 0.00 11.35 Jun. '94 0.08 11.43 - 15 - THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 5. Status of Covenant Section of Loan Agreement Agreed Actions Status 3.02 (a) The Government will provide annual The Government is providing budget provisions and timely payments to a portion of the year's SRT to compensate for losses incurred in estimated loss in the annual operating uneconomic lines and services. budget. Final compensation is paid after completion of the audit. 3.02 (b) Payments will be made by the Complied with. Government to cover SRT's losses incurred in FY1 985 and 1 986 by September 30, 1989. 5.01 Ib) SRT will forward its audited financial 1991 received 11/92; 1992 statements to the Bank within nine report due 6/93 not yet months of the end of each fiscal year. received. 5.02 SRT will consult with the Bank before Complied with. finalizing the annual investment program. 5.03 SRT will complete a detailed review of its Complied with 9/1/88. capital structure and prepare a plan by June 30, 1 988 which will enable SRT to finance future investments and to service residual debt. 5.04 SRT will adjust its tariffs on an annual Partially complied with. basis to at least compensate for inflation. Government has not been willing to increase passenger tariff s. 5.05 SRT will develop an action plan to review Action plan prepared its entire tariff structure by December 31, implemented for freight. 1988. THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 6: Procurement of Goods FINANCE NEXT CRITICAL STEP COMPL. ITEM SOURCE CURRENT STATUS ACTIVITY TARGET DATE 1. Radio -Line IBRD Installation (Stations & Locos.) Completion 12/93 12/93 -Yard IBRD Complete __ _ _ Compl. 2. "STARS' hardware (SRT)_ Complete _ _ 11192 3. Computer Peripherals -Inventory control IBRD Cancelled -Operations control 1_ BRD_- Supplier negotiations Purchase/Install 03/94 03/94 0" 4. Psgr. Coach Bogies IBRD Complete_ _ _._____09/91 5. Trk. Mtce. Equip -Tampler(1) IBRD Complete 12/90 -81st. Regulators(3) IBRD Complete 12190 -Workshop equip. (SRT) Comple!e _ 09/90 6. Mobile Wagon IBRD Complete 12/92 Repair Truck _ 7. Turbo chargers _ _IBRD_ Complete Compl. 8. Diesel engines IBRD Complete _ _ . Compl. THAILAND RAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 7: Summary of Technical Assistance and Training ComDonents FINANCE NEXT CRITICAL STEP PROJECT AREA _ SOURCE CONSULTANT M/M START CURRENT STATUS ACTIVITY TARGET COMPL. 1. TECHNICAL ASSISTANCE 1.1 Marketing - psgr. traffic GTZ DE-Consult 14 08/87 Completed 04190 - Irl. trallic IBRD Transmark 36 04188 Completed 10190 - product policy & plan. GTZ DE-Consult 16 - Compleled ___ _ 08192 1.2 Operations - time-tabling GTZ DE-Consull 20 03/87 Completed 07/90 1.3 Information Systemsms .. (Systems Design) - General MIS IBRD Transurb 12 12187 Completed 03/90 - OCS IBRD Transuib 17 07/88 Completed 03/90 - IMMS TDP SRI 10 09/88 Completed 04/90 - STARS GTZ DE-Consult 5 11187 Completed 07190 - Network I8RD Transturb 4 03/89 Completed 03/90 (Systems Implementalion) - OCS IBRD SinobritiPST 01/91 Program coding complete Train/Document 03/94 03/94 - OCS Tech.Assisl.(part time) IBRD Transurb 8 01/91 On-going 03/94 - IMMS IRD Project cancelled - STARS (SRT) Prime/Korean 08/90 Hardware/Software installed Implement 09/93 09/93 1.4 Mechanical Shops - General GTZ DE-Consull 67 02187 Completed 06/92 - Air-brake Conversion _ GTZ DE-Constilt 20 _ Completed _ ____ __ 03/92 1.5 Stores GTZ DE-Consull 6 09/87 Completed 18_ _ __ __ /8B 1.6 Civil Engineering -- IBAD Sofrerail 16 10/88 Completed ___ _______03/91_ 1.7 Traffic Costing IBRD Transmark 15 07/90 Completed _12/91 1.8 Project Coordinator RIBD W.Thompson _ 04/88 Completed . _ 12/89 THAILAND fRAILWAY EFFICIENCY IMPROVEMENT PROJECT (LOAN 2872-TH) PROJECT COMPLETION REPORT Table 7: Stjinrnary of Technical Assistance and Trainini( Components FINANCE NEXT CRITICAL STEP PROJECT AREA SOURCE CONSULTANT M/M CURRENT STATUS ACTIVITY TARGET COMPL. 11 TRAINING 1. Management Level -general seminars (Step 1) GTZ DE-Consult 1 Completed 07/90 -general seminars (Step 2) GTZ DE-Consult 16 Compleled 08/92 -management improvement. GTZ DE-Constill 14 Compleled 08/92 (corp.planning,PSO) 2. Mechanical Engineering -IMMS IBRD W Thompson 1 Completed 06/89 -Coach mtce. GTZ DE-Consult 8 Compleled 07/89 -Loco. mtce. GTZ DE-Consull 8 Completed 07/89 -Mtce. management GTZ DE-Constilt 3 Completed _ 08/92 3. Civil Engineering -Track Std's & Mtce. IBRD Solfefail 11 Compleled 06/89 -Trk. Mice. Planning IORD Sofreiail 6 Completed 06/89 -Machinery IBRD Solretail 6 Cornpleted 06/89 -Bridge Mtce. IBRD Solrerail 4 Compled _ 06/89 4. Trahic (OCS) IBRD Transurb 2 Comple!ed 01/89 5. Markellng -Specific skills IBRD Transiirb 22 Compleled 12/89 -Seminar/Cntrpart train g GTZ DE-Consiilt 6 Compleled _ __._ 12/89 6. Informalion Systems -OCS IBRD Transurb 2 Compleled 01/89 -IMMS IBRD W Thompson 2 Completed . 06/89 7. Stores Bureau (IMMS) IB3lRD W Thompson 1 Completed _ _ _ 6/89 8. Operational Safety _ GTZ DE-Consull 15 Completed 08/92