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The World Bank

FOR OmCIAL USE ONLY

Rqport No. 12935

PROJECT COMPLETION REPORT

THAILAND

POWER SYSTEM DEVELOPMENT PROJECT(LOAN 3027-TH)

APRIL 5, 1994

Industry and Energy Operations DivisionCountry Department IEast Asia and Pacific Regional Office

This document has a restricted distribution and may be used bY recipients only in the performance oftheir official duties. Its contents may not otberwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = BahtUS$ 1.00 = B 25 (SAR)

= B 25.0 (Current)

WEIGHTS AND MEASURES

km - KilometerKv - Kilovolt (1,000 volts)KVA - Kilo Volt-Ampereckm - Circuit KilometerKw - Kilowatt (1,000 watts)MW - Megawatt (1,000 kilowatts)GW - Gigawatt (million kilowatts)Kwh - Kilowatt hour (1,000 watt-hours)Gwh - Gigawatt hour (million kilowatt-hours)ug - Microgram

ABBREVIATIONS

ADB - Asian Development BankADAB - Australian Development Assistance BureauEGAT - Electricity Generating Authority of ThailandERR - Economic Rate of RetumIDC - Interest During ConstructionMEA - Metropolitan Electricity AuthorityMOF - Ministry of FinanceNREP - Normal Rural Electrification ProgramOECF - Overseas Economic Cooperation Fund (Japan)ONEB - Office of National Environmental BoardTPA - Tonnes per AnnumPDP - Power Development PlanPEA - Provincial Electricity AuthorityPTT - Petroleum Authority of ThailandRTG - Royal Thai GovemmentRVP - Regional Vice PresidentSAR - Staff Appraisal Report

FISCAL YEAR

October 1 to September 30

FOR OFFICIAL USE ONLY

THE WORLD BANKWashington, D.C. 20433

U.S.A.

Office of Director-GeneralOperations Evaluation

April 5, 1994

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on ThailandPower Svstem Development Project (Loan 3027-TH)

Attached is the "Project Completion Report on Thailand - Power System DevelopmentProject (Loan 3027-TH)" prepared by the East Asia and Pacific Regional Office, with Part IIprovided by the Borrower.

The project achieved its main objectives which were to: (i) help meet a growing powerdemand at least cost; (ii) reduce the country's dependance on imported fuel by supporting thedevelopment and use of local lignite and gas; and (iii) continue the strengthening of the power utility(EGAT)'s operational performance through improved management systems and training. The mainproject components were completed on time except for the steam turbines which were commissionedone year late due to adverse weather conditions and a shortage of cement in the country. Satisfactoryprograms were undertaken at the lignite plant to mitigate air and water pollution and resettle affectedpeople.

The introduction of time-slice (2-year) financing under this operation provided addedflexibility to EGAT in the financing of its overall investment program and allowed for fastdisbursement of Bank loan funds. It proved appropriate in this case given the maturity of the Bank'soperational and policy dialogue with the sector and of EGAT's proven project implementation andfinancial track record.

Accordingly, the project's outcome is rated as satisfactory, its institutional impact as substantialand its sustainability as likely. The performance of both the Borrower and the Bank was satisfactory.

The Project Completion Report is thorough and informative. No audit is contemplated atthis time.

Attachment

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OFFICIAL USE ONLYTHAILAND

POWER SYSTEM DEVELOPMENT PROJECT (LOAN 3027-TH)


TABLES OF CONTENTS

Page No.

PREFACE .....................................................

EVALUATION SUMMARY .......................................... ii

PART I - PROJECT REVIEW FROM BANK'S PERSPECTIVE ................... I

Project Identity ............................................ 1Background .............................................. 1Project Objectives and Description ................................ 1Project Design and Organization ................................. 2Project Implementation ....................................... 2Project Results ............................................ 3Project Sustainability ........................................ 4Environmental Aspects ....................................... 5Resettlement .............................................. 6Bank Performance ............ 7Borrower Performance ....................................... 8Project Relationship ......................................... 8Project Documentation and Data ................................. 9Findings and Lessons Learned .................................. 9

PART II - PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ............... 11

PART III - STATISTICAL INFORMATION ................................ 23

Related Bank Loan .......................................... 23Project Timetable .......................................... 23Loan Disbursement ......................................... 24Project Implementation ....................................... 24Project Cost and Finacing ..................................... 25Project Results ............................................ 28

Financial Impact ........................................ 28Economic Analysis ...................................... 29

Status of Covenants ......................................... 31Use of Bank Resources ....................................... 32

Staff Inputs ........................................... 32Missions ............................................. 33

This document has a restricted distribution and may be used by recipients only in the performanoe of theirI official duties. Its contents may not otherwise be disclosed without World Bank authorization. J

Table of Contents (Cont'd.)

ANNEXES

1. Implementation Schedule, Blocks 3 and 4 ........................... 342. Bang Pakong Air Quality Monitoring Results ........................ 353. Project Cost Estimate ........... .............................. 374. Financial Performance, 1988-1991 ................................. 395. Fmancial Statements 1988-1991 - Sources & Application of Funds .... .... 406. Fmancial Statements 1988-1992 - Balance Sheet ...................... 417. Lignite Mine Operations - Income Statements FY88-91 ..... ........... 428. Lignite Mine Operations - Balance Sheet FY88-91 .................... 439. Data for Economic Evaluation of EGAT PDP ....................... 4410. Rate of Return on EGArs PDP .4511. Rate of Return of Bang Pakong Combined-Cycle Power Project .4612. Calculation on Netback Value of Lignite .4713. Rate of Return of Mae Moh Lignite Expansion Projects Units 8-9 .4814. Actual Investment Cost of Project .49

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THAILAND



Preface

This is the Project Completion Report (PCR) for the Power System Development Projectin Thailand for which Loan 3027-TH in the amount of US $90.0 million was approved on March 21,1989. The loan was closed on March 31, 1992, six months later than the originally scheduled closingdate of September 30, 1991. It was fully disbursed with the last disbursement of US$0.47 millionequivalent in March 1992.

The PCR was prepared by the Industry and Energy Operations Division, Asia CountryDepartment I, East Asia and Pacific Regional Office (Preface, Evaluation Summary, Parts I and III) andthe Borrower, the Electricity Generating Authority of Thailand (EGAT) (Part II).

Preparation of the PCR was started in March 1992 when the Borrower was requested toprovide statistical data for Part III. The PCR is based on the Staff Appraisal Report, the Loan andGuarantee Agreements, supervision reports, correspondence in the Project Files, and a comprehensivedata compilation provided by EGAT.

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THAILAND



Evaluation Summary

Objectives:

1. The main objectives of the project were to: (a) help meet the growth in power demandexpected over the medium term at least cost; (b) reduce Thailand's dependence on imported fuel bysupporting the development and use of domestic lignite and natural gas for power generation; and (c)strengthen EGAT's operational performance through the introduction of a computerized maintenancemanagement system for thermal and hydro generating units, the acquisition of environmental monitoringequipment, and the provision of specialized training for its environmental division (para 3.1).

Implementation Experience:

2. EGAT's implementation effort was staffed with its own competent teams, assisted by foreignconsultants where needed. Except for eleven-month and twelve-month delays in commissioning the twosteam turbines belonging to Bang Pakong combined cycle blocks 3 and 4, the project was completed ontime in the face of a tight implementation schedule (para 5.1).

3. A part of the delay in commissioning of the steam turbines was due to adverse weatherconditions at site and delays in delivery of equipment and material. A major portion of the delay inconstruction was due to the acute shortage of cement in Thailand resulting from a construction boom.The RTG had to resort to granting extensions to contractor peformance schedules to alleviate the situation(para 5.2).

4. The Mae Moh mining expansion operations were well planned and efficiently executed.Some of the credit for the excellent implementation performance should be given to the foreign miningexperts who have guided EGAT's mining endeavors from the beginning of lignite production. Thepractice of contracting out overburden and other mining operations continues to be a success. EGATconcentrates on turning over to the private sector its technical expertise in pit mining thus promoting asafe, technically and environmentally sound mining operation (para 5.3).

Results:

5. The project achieved its main objective of increasing the Bang Pakong power generatingcapacity and thus the total power availability in the country. Between FY88 and FY91, energy generationregistered an increase of 54% while lignite production registered an impressive 88% increase Becauseof delays in commissioning of the Bang Pakong steam turbines, the full flow of the project benefitscommenced about twelve months after the target date. However, the 4x100 MW combustion turbinegenerators were ready as scheduled and this incremental power was available on time. In the case of thecombined cycle blocks, a cost overrun of 30% has resulted on account of the very tight internationalmarket situation for gas turbines prevailing at the time of project implementation (para 6.1).

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6. EGAT's financial and economic performance during FY87 to FY91 was satisfactory andcompared favorably with the appraisal forecasts. EGAT's net income increased by 54%, from Baht 3.6billion in FY88 to Baht 5.5 billion in FY91. During the same period, the net profit from the LigniteMine Sector increased by 85%, from Baht 0.8 billion to Baht 1.4 billion. All financial covenants werecomplied with, except the covenant on return on investment on revalued assets for FY91, which wasmarginally less than 8%, primarily due to the increase in the fuel cost in the wake of the Gulf War. Thesituation has since been remedied by applying the automatic fuel cost adjustments provided in EGAT'stariff structure. The re-evaluated economic rates of return for the combined cycle and the Mae Mohcomponents, respectively, were 24.5 % and > 150 %, while the corresponding SAR values were 25 % and29% (paras 6.2-6.5).

Project Sustainability:

7. Benefits from the project should be sustainable into the foreseeable future given the factthat: (a) EGAT has developed a proper preventive and corrective maintenance system, and hasdemonstrated technical and administrative capability to maintain and operate its facilities; (b) PTT hasconfirmed the availability of natural gas supply for the full 25 year lifetime of the combined cycle blocksat Bang Pakong, the transmission system has been adequately reinforced, and the capacity of the MaeMoh Lignite Mine has been augmented to meet the fuel needs of the installed capacity; (c) an agreementhas been reached on power tariffs which will not only ensure adequate return on capital investment, butalso generate funds from internal resources to finance 25 to 30% of EGAT's power developmentprogram; (d) great emphasis is being placed on the job-performance-based training aimed at developingstaff; and (e) EGAT has undertaken a study to evaluate operating efficiency, which is a first step towardsreshaping its operations in preparation for its commercialization and privatization (para 7.1).

Findings and Lessons Learned:

8. Implementation of project components proceeded smoothly and was achieved on schedule.However, there was a delay in the completion of the Bang Pakong steam turbine generator units duemainly to conditions which could not have been forseen at the time of project preparation. The combinedeffects of adverse weather conditions, delays in equipment delivery and supplies, and the cement shortagethat occurred in the country during project implementation resulted in delays in project completion. Tothe extent that a lesson could be learned, the completion delay underscores the need for more detailedmaterials supply planning to ensure that the implementation schedule is not adversely affected. The verytight international market situation for gas turbines resulted in a 30% underestimation in the cost of thecombined cycle blocks. (para 14.1).

9. The main lessons to be drawn are: (a) Greater market intelligence is needed to predict morerealistic cost figures; (b) The concept of time-slice lending has proven to be a sound policy providing theborrower flexibility; (c) the successful project implementation in the lignite mining sector has resultedfrom substantial involvement of the private sector in mine operations; and (d) a combination of stafftraining and professional assistance is a valuable asset in successful implementation (paras 14.1-14.5).

THAILAND



PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE

1. Project Identification

Project Name: Power System Development ProjectLoan No: 3027-THRVP Unit: East Asia and PacificCountry: ThailandSector: EnergySubsector: Electric Power

2. Background

2.1 The Bank has been involved in financing EGAT's power generation, transmission and lignitemining investments in the past largely on a project-to-project basis. At the request of the Royal ThaiGovernment (RTG), the Bank agreed to modify the concept of financing specific project investments tofinancing a two year (FY89-90) time-slice of EGAT's development plan. The rationale of the RTG'srequest was its concern over the magnitude of public sector indebtedness, particularly in view of EGAT'sinvestment program which required US$ 2.0 billion during the above period; and the RTG's efforts tominimize up-front borrowing commitments by public enterprises. A time-slice approach to Bankfinancing was also intended to accelerate disbursements, provide added flexibility in the use of Bankfunds, and facilitate the RTG's efforts to identify co-financing opportunities for each specific investmentproject so as to minimize the borrowing costs.

2.2 Time-slice financing of EGAT investments was justified as: (a) the Bank had reviewed andappraised EGAT's Power Development Program (PDP); (b) EGAT had demonstrated capabilities toimplement large investment programs; and (c) the Bank had reached general agreement with the RTG onsector policies, particularly on power tariff.

3. Project Obiectives and Description

3.1 The main objectives of the project were to: (a) help meet the growth in power demandexpected over the medium term at least cost; (b) reduce Thailand's dependence on imported fuel bysupporting the development and use of domestic lignite and natural gas for power generation; and (c)strengthen EGAT's operational performance through the introduction of a computerized maintenancemanagement system for thermal and hydro generating units, the acquisition of environmental monitoringequipment, and the provision of specialized training for its environmental division.

3.2 The loan financed a 2-year (FY1989-90) time-slice of EGAT's investment program duringThailand's Sixth Five Year Plan Period (FY1987-91). It was permissible to use the loan proceeds tocover the cost or part thereof, of any component of EGAT's investment program during the 1989-90period, provided the project components were technically sound and economically justified and had beenapproved by the RTG. At appraisal, the following two major components of the 2-year time-slice were

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selected by EGAT for financing: (a) construction of the combined cycle power blocks 3 and 4, rated 300MW each at the existing Bang Pakong Thermal Station site, including expansion of the 230 KVsub-station at Bang Pakong, and reinforcement of the transmission line from Bang Pakong to Bang Phli;and (b) expansion of Mae Moh Lignite Mine to meet the requirement of power units 8 and 9.Subsequently, however, EGAT decided to apply the loan proceeds entirely to the Bang Pakongcomponent.

4. Proiect Desien and Organization

4.1 The project was well conceived, designed and organized and project preparation wasthorough. The project components and responsibilities for implementing them were clearly defined inthe project documents and understood by all concerned.

4.2 The existing Bang Pakong site was the least cost location among several feasible alternativesfor the construction of additional thermal units in the Bangkok area. Before firming the site, hydraulicstudies were performed by EGAT at the Asian Institute of Technology which confirmed that there wouldbe no pronounced disturbance of tidal flow or water re-circulation with rising temperature at this location.The nominal block rating of 300 MW was selected for the Combined Cycle Plant primarily because ofthe availability of proven 100 MW nominal rated turbines from several manufacturers so as not to restrictcompetition. The combined cycle plants were designed to achieve efficiency which compared favorablywith the efficiencies of modern large conventional units with ratings of 500 MW and above.Confirmation was obtained from the Petroleum Authority of Thailand (PTT) about the availability ofnatural gas for the full 25 year lifetime of the proposed combined cycle blocks. The combustion turbineswere specified for burning gas or distillate oil and the capacity of oil tank farms at site was augmentedwith the provision for automatic switching from gas to oil in the event of a gas supply failure. Toevacuate additional power from Bang Pakong, the existing Bang Pakong to Bang Phili transmission linewas reinforced. This, apart from being the least cost option, also eliminated right-of-way problems. Theproject components were designed to keep the potential impact on environment from the standpoint ofatmospheric emissions, thermal discharge and noise within acceptable limits (complying with World Bankand RTG standards).

4.3 To meet the fuel needs of the entire installed generating capacity, the capacity of the MaeMoh Lignite Mine was augmented from 5.6 million tons per annum (TPA) to 9.5 million TPA. Themining method chosen at Mae Moh is by truck and shovels with in-pit crushing of both lignite andoverburden, followed by belt conveyor to either waste dumps or coal stock yards. It was the optimumsolution considering Mae Moh geological conditions, with the relatively hard overburden, dipping scamsand tectonic faulting, and was finalized after intensive studies of alternative methods.

5. Project Implementation

5.1 EGAT's implementation effort was staffed with its own competent teams, assisted by foreignconsultants where needed. Except for eleven-month and twelve-month delays in commissioning the twosteam turbines belonging to Bang Pakong combined cycle blocks 3 and 4, the project was completed ontime in the face of a tight implementation schedule. Annex 1 details the actual implementationperformance as compared to original plans for the combined cycle and Mae Moe mining components,respectively.

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5.2 A part of the delay in commissioning of the steam turbines was due to adverse weatherconditions at site and delays in delivery of equipment and material. A major portion of the delay inconstruction was due to the acute shortage of cement in Thailand resulting from a construction boom.The RTG had to resort to granting extensions to contractor peformance schedules to alleviate thesituation.

5.3 The Mae Moh mining expansion operations were well planned and efficiently executed.Some of the credit for the excellent implementation performance should be given to the foreign miningexperts who have guided EGAT's mining endeavors from the beginning of lignite production. Thepractice of contracting out overburden and other mining operations (introduced under the Second MaeMoh Project, Loan 2407-TH) continues to be a success. EGAT concentrates on turning over to theprivate sector its technical expertise in pit mining thus promoting a safe, technically and environmentallysound mining operation.

6. Project Results

6.1 The project achieved its main objective of increasing the Bang Pakong power generatingcapacity and thus the total power availability in the country. Between FY88 and FY91, energy generationregistered an increase of 54% while lignite production registered an impressive 88% increase (FY88: 5.86million tons; FY91: 11.01 million tons). Because of delays in conmmissioning of the Bang Pakong steamturbines, the full flow of the project benefits commenced about twelve months after the target date.However, the 4xlOO MW combustion turbine generators were ready as scheduled and this incrementalpower was available on time. In the case of the combined cycle blocks, a cost overrun of 30% hasresulted on account of the very tight international market situation for gas turbines prevailing at the timeof project implementation.

6.2 EGAT's financial performance during FY87 to FY91 was satisfactory and comparedfavorably with the appraisal forecasts. EGAT's net income increased by 54%, from Baht 3.6 billion inFY88 to Baht 5.5 billion in FY91. During the same period, the net profit from the Lignite Mine Sectorincreased by 85%, from Baht 0. 8 billion to Baht 1.4 billion. All financial covenants were complied with,except the covenant on return on investment on revalued assets for FY91, which was marginally less than8%, primarily due to the increase in the fuel cost in the wake of the Gulf War. The situation has sincebeen remedied by applying the automatic fuel cost adjustments provided in EGAT's tariff structure.

6.3 Prior to 1991, EGAT has complied with the tariff covenant because a rate adjustment toreflect fuel cost variation existed in the tariff structure. This adjustment, however, has not beenautomatic, was subject to RTG review, and at times delayed. Following the study comnissioned by theNational Energy Policy Office, a new tariff structure came into effect in December 1991 that includedan automatic adjustment in the tariff (with effect from October 1991) to account for changes in fuelprices, land and property taxes, demand side management costs and the VAT.

6.4 EGAT's bulk supply tariffs to PEA and MEA and the retail tariffs to the consumers werefixed to ensure that they: (a) covered the full production cost and included a further margin for debtservicing and replacement of fixed assets; (b) were adequate to meet the financial covenants for EGATand for the power sub-sector; (c) accomplished the required cross-funding between MEA and PEA; and(d) provided for automatic fuel cost adjustments.

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6.5 The economic rate of return (ERR) calculated in the SAR and re-evaluated in this PCR aretabulated below. The basis of the calculation and the variance between the SAR and PCR are explainedin Part III (paras. 7.1 - 7.5).

Economic Rate of Return(%)

SAR PCR

EGAT's Power Development Program 14.0 15.8Bang Pakong Combined Cycle PowerProject 25.0 24.5

Mae Moh Lignite Mine Extension only 29.0 > 150.0Mae Moh Combined Mine and Power Extension 13.0 23.2

7. Proiect Sustainability

7.1 Benefits from the project should be sustainable into the foreseeable future for the followingreasons:

(a) EGAT has developed a proper preventive and corrective maintenance system -- a key factorcontributing to reliability and efficiency for any power system -- of its power sources aswell as the transmission network, using advanced technological equipment and skills; andhas amply demonstrated that it has the technical and administrative capability of a very highorder to continue to maintain and operate its facilities. EGAT's mine operations have alsobeen vigorously developed using the state-of-the-art technology and equipment, which hasenabled it to raise lignite productivity within a short time to meet the rapidly expandingneed;

(b) PTT has confirmed the availability of natural gas for the full 25 year lifetime of thecombined cycle blocks at Bang Pakong; the transmission system has been adequatelyreinforced to take the additional load; and the capacity of the Mae Moh Lignite Mine hasbeen augmented from 5.6 MTPA to 9.5 MTPA to meet the fuel needs of the installedcapacity;

(c) An agreement has been reached between the Bank and the RTG on power tariffs which willnot only ensure adequate return on capital investment, but also generate funds from internalresources to finance 25 to 30% of EGAT's power development program for a sustainablefuture;

(d) A great emphasis is being placed on the job-performance-based-training aimed at developingthe staffs knowledge, skills and experience; and

(e) EGAT has undertaken a study to evaluate its operating efficiency in comparison with powerutilities of other countries and identify areas for improvement. This study is a first steptowards reshaping of its operations in preparation for its commercialization and subsequentprivatization.

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8. Environmental Aspects

8.1 Environmental aspects received increased emphasis from EGAT and the RTG.Environmental and strategic plans were clearly stressed in EGAT's Corporate Plan for development ofits mine and power systems; and environmental measures have been taken into account to achievesustainable development. Both major components of the project, namely, the combined cycle blocks atBang Pakong and Mae Moh Lignite Mine expansion, provide satisfactory environmental safeguards.Ecological and environmental programs were formulated at every stage of the project to preserve andmaintain environmental balance. The major environmental activities concerning the project includedmitigation and monitoring programs for Bang Pakong Power Plant and Mae Moh Lignite Mine, and anEnvironmental Impact Examination for power transmission projects. EGAT also proceeded during thisperiod with mine reclamation, resettlement and compensation of displaced persons for the Mae MohExpansion Project.

Bang Pakong Power Plant

8.2 Environmental monitoring of air and water quality and thermal diffusion is being regularlyconducted with the aim of detecting impacts from the Bang Pakong Power Plant construction andoperation upon ambient air quality, water quality of Bang Pakong river and the dispersion pattern ofwarm water discharged from the cooling system into the Bang Pakong river (Details of monitoring airand water quality and thermal diffusion undertaken by EGAT is given in Annex 2).

Mae Moh Lignite Expansion Comnonent

8.3 EGAT has produced Environmental Impact Assessment and Resettlement reports dealingwith the Mae Moh expansion component. Mae Moh lignite has a comparatively high sulphur content ofabout 1.5-3%. S02 ground level concentrations were continuously monitored at many stations. Theresults showed that their concentration were below the maximum.permissible levels. In October 1992,however, unprecedented weather conditions led to high ambient concentrations of SO2 in nearby villagescausing adverse impacts on the health of the villagers and vegetation. Several foreign and local agencieshave investigated the matter and the National Environmental Board of Thailand has set up an Air QualitySub-Committee to look into the recommendations made by the foreign agencies. As a long-term measure,EGAT has decided to retrofit wet Flue Gas Desulfurisers on four units at Mae Moh and hascommissioned a Mae Moh Clean Air Study that would form the basis for its decision to retrofit SO2control equipment on four other units. The RTG has directed EGAT to provide Flue Gas Desulfuriserson all its future lignite and coal fired units.

8.4 Water quality in the Mae Moh basin impacted both by the power plants and by mine sumpdischarges was constantly monitored, and it was found that both required mitigation in order to arrestdegradation. Accordingly, action was initiated for recycling the waste water at the mine where sumpwater is utilized to the maximum extent for dust suppression. Further, in order to control the quality onrunoffs from waste dumps into the natural drainage system, a system of wetland areas is beingimplemented together with re-vegetation provided in the mine development program. EGAT hasestablished a re-vegetation fund for this. The cost of re-vegetation of overburden dumps is met from thisfund and aims at ensuring land reclamation during the mine's lifetime and thereafter. Inspite of effortsmade by EGAT, there has been little improvement in the quality of water with regard to conductivity,total dissolved solids, sulfate and hardness in the Mae Moh reservoir. EGAT is aware of thisunsatisfactory progress in water quality improvement and has prepared a time-bound program of

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implementation and expects improvements in water quality. The whole issue of water quality is beingpursued by the Bank under the Third Power System Development Project (Loan 3423-TH).

9. Resettlement

9.1 The expansion of the Mae Moh lignite mine affected residents of the whole village of Moo1 and parts of Moo 3 and 8, in the Mae Moh district, Lampang province. The program involved theresettling of the villagers to new areas provided by EGAT. On February 23, 1988, committees wereconstituted to carry out necessary and appropriate actions on lands and properties compensationassessment, and on resettlement. The committees were headed by the Governor of Lampang provinceand made up of representatives of government agencies.

Compensation

9.2 The compensation principles were based on the following:

(a) Land. Where ownership is evidenced by a title deed, compensation was made at the rateset up in accordance with the Capital Asset Fixing Account under the Land Right and LegalAct Registration of January 1988. Where title is evidenced by Sor Kor 1, compensationwas made according to areas actually exploited at the lowest rate in accordance with theabove Act. And where there are other or no evidence of title, compensation was made forland possessed and actually exploited before 1986.

(b) Residences and Buildings. Compensation was made for structures constructed on the projectsite before the date of announcement of the properties survey of May 10, 1988 and on thebasis of the highest compensation rate applied by government agencies.

(c) Tlees. Compensation was made for trees that have grown in the area of the project sitebefore the date of announcement for the properties survey and on the same basis ascompensation for residences and buildings.

Resettlement Programs

9.3 The Resettlement Committee resolved to make use of the lands of 7,500 Rai at Ban TaPatun-Nakhaem village, Moo 7, in Mae Moh District, Lampang Province as resettlement area. The areawas divided as follows: (a) 1,000 rai allocated for 400 households (2,000 people) who lived in themining area and then relocated into the resettlement area; (b) 5,500 rai for new relocated people; and (c)1,000 rai for government and public centers and other facilities.

9.4 Three alternatives were provided to the affected people: (a) a residence and farm plot inthe area of 1 Rai 3 Ngan (2,800 sq. m) in the same land plot in the resettlement area; (b) a commercialarea of 8 x 20 m in the resettlement area and additional compensation of Baht 46,200; and (c) additionalcompensation of Baht 120,000 but with no provision for any land plot. EGAT provided assistance andadvice to the qualified affected people in their selection of resettlement alternatives.

9.5 Development of the 5,500 rai area for newly relocated people started in September 1988 andwas completed after four years. The activity involved the following: forest clearing, land adjustmentand allotment of land plots and commercial areas; and construction of the following: 67.8 km of asphalt

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roads, 62.6 km of electrical systems, 200 cu.m/hour water supply system with a three water tankcapacity, 7 x 12 m water pumping plant, and three water sources for agricultural supply.

9.6 The following government and public buildings were also constructed by EGAT in theresettlement area: a district office and housing for government employees, a regional police station andhousing for police, hospitals and houses for employees, a public health office, a forestry developmentoffice, an agricultural office, land office, primary schools, Moh Luang Suksa School and housing forteachers, Moh Luang and Tung Kluay Photaram Temples, and other public buildings.

9.7 Besides compensation for land and properties and provision of necessary facilities, EGATin association with governmental agencies also provided employment opportunities to the affected people.An Occupation Promotion and Development Center was established with the aim of training, developing,supporting and demonstrating agricultural and marketing promotion techniques. To serve this purpose,several buildings were erected including a training and administrative hall, multipurpose exhibition hall,an industrial and handicraft training plant, a green house, an agricultural products store, a milk-cowfeeding plant, a storehouse, three units of government housing for its employees, and a weir.

9.8 EGAT also collaborated with the Department of Cooperatives in the establishment ofagricultural cooperatives. To this end, the Mae Moh Agricultural Development Cooperatives, Ltd. wasorganized and registered on August 28, 1991 with 230 members. The creation of the Cooperative wasfunded by EGAT at a total cost of Baht 18 million, as follows: (a) Baht 55,000 for expenditures, andcost of materials and inventories of Cooperative officials; (b) Baht 2.9 million for the cost of constructionof office, storage and other inventories; and (c) Baht 15 million for seed capital to cooperative members.

9.9 EGAT set up a demonstration land plot of 1 Rai 3 Ngan showing the residence areaadjacent to the individual farm plots, farming animals and growing plants. Grassland for cattle projectswas provided in an area about 1,050 rai with the technical support of the Animal Food Research Centerof Lampang. An investigation, analysis and improvement of the soil condition for growing crops werealso undertaken by EGAT with the assistance of the Land Development Station of Lampang.

Progress of the Comnensation and Resettlement Programs

9.10 At the end of October 1993, EGAT has made substantial progress with about 98.9% of theprogram completed. Compensation to 6,151 affected residents and 6,796 farm plots amounting to Baht470.2 million have been awarded. The compensation program has therefore been 99.9% completed.

9.11 Progress of the resettlement program, particularly that pertaining to the reallocation of landand construction of infrastructure is 100% complete. Remaining work is needed for the relocation andoccupational promotion activities. Progress of EGAT relocation program is 97.2% complete with allqualified households (1,796 families) opting to reside in the resettled area (1,483 families) and the rest(313 families) seeking financial compensation instead of land plots.

10. Bank Performance

10.1 The Bank has performed well throughout the project cycle. EGAT has been borrowing fromthe Bank since 1957 and in the last several years, EGAT completed several Bank financed projects forpower generation and lignite mine expansion. Through its participation in a 2-year time-slice of EGAT'sinvestment program, the Bank, apart from providing the much needed external finance towards the large

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sectoral investment program, was able to make positive institutional and project related contributions.By providing regular reviews of EGAT's PDP, the Bank ensured that optimum decisions were made bothin regard to the PDP's composition and overall magnitude; as well as in areas of demand managementand capacity reserves. Bank's involvement in both the petroleum and power sub-sectors resulted inimproved inter-sectoral coordination. Two separate program components pertaining to maintenancemanagement and environmental monitoring were critical to the future strengthening of EGAT's overalloperational performance. Their implementation was monitored closely in the course of supervision. TheBank also assisted the RTG in monitoring the continued orderly development of the lignite mining sectorand provided vital inputs in addressing crucial long term environmental concerns. Over all, the Bank'spresence in the power sector helped EGAT develop into a technically competent and efficient powerutility.

10.2 In view of the Bank's long association with an experienced Borrower, project preparationand appraisal were carried out in a cordial manner with minimal areas of disagreement. Threesupervision missions were fielded during the implementation period. These missions, along withquarterly reports submitted by EGAT and a continuous exchange of views and information, were foundto be adequate for effective supervision of the project.

11. Borrower Performance

11.1 EGAT is a well-run organization, capable of managing substantial growth in investment,and it has developed the sound organization structure required for its operational needs. The credit forthe successful execution of this project is due, in most part, to the skill and commitment of EGAT'sDirectorate of Thermal Power Development and Directorate of Mine Development, both in their BangkokHeadquarters and at the project sites. The experience gained in carrying out the earlier Bank financedprojects also contributed very largely to this relatively good performance. EGAT's intense efforts indeveloping the country's power and transmission systems, coupled with the promotion of energyconservation and efficient use of electricity have led to adequate and reliable electricity service whichsubstantially contributes to the smooth development of the Thai economy. In EGAT's operations, thedemand side management programs and environmental measures have come to play an important role ingenerating the most cost effective investment for a sustainable energy future.

11.2 EGAT was given a tight schedule for implementing the project. It nevertheless completedthe 4x100 MW turbines at Bang Pakong on schedule. The delay in the implementation of the 2x100 MWsteam turbines was due to causes beyond EGAT's control. In fact, EGAT has generally kept tightschedules on the construction program so as to augment power supply for the rapidly rising demand.EGAT has effectively employed local and expatriate consultants to assist with design, engineering andconstruction supervision of various components of the project. Emphasis was also placed on the job-performance-based-training aimed at developing staff, skills and experience. The project demonstratedthat the combination of staff training and professional assistance can be a valuable asset for successfulimplementation.

12. Project Relationship

12.1 The relationship between EGAT and the Bank has been and continues to be cordial andmutually beneficial. In the course of the Bank's extensive loan operations in the Thailand electric powersector, Bank staff have established an excellent rapport with EGAT and RTG officials concerned withthe sector. The atmosphere of mutual respect developed by long association of the Bank, the Borrower

-9-

and the RTG has made it possible to amicably resolve various issues which arise throughout the lendingoperations. It was against this background that the Bank readily agreed to modify, at the RTG's request,,he originai concept of financing specific projects to financing a time-slice of EGAT's PDP duringFY89-90.

12.2 EGAT confirmed that the recommendations and the suggestions from the Bank duringimplementation of the project were helpful; and neither the Bank nor the Borrower had any adverseconmments regarding their relationship throughout the project cycle.

13. Project Documentation and Data

13.1 The Staff Appraisal Report was comprehensive and well prepared. It gave a thoroughaccount of the institutional and sectoral background of the project and its objectives. The legal documentsprovided the necessary legal framework for project implementation and no difficulty was experienced ineffecting the eligible disbursements within the intent of the Loan Agreement. No problem wasencountered in project implementation. In addition, EGAT's computerized MIS was instructional in itsability to provide essential information on all aspects of technical and financial management wheneverit was requested or required. Information provided by EGAT at the request of the Bank, for the powergeneration facilities at Bang Pakong, and for Mae Moh lignite mines expansion, provided most of theessential data for Part III of the PCR.

14. Findings and Lessons Learned

14.1 Implementation of the components of the project -- the 4xl00 MW Bang Pakong combustionturbine generator units and the Mae Moh Lignite Mine Expansion -- proceeded smoothly and wasachieved on schedule. However, there was a delay in the completion of the 2xlOO MW Bang Pakongsteam turbine generator units due mainly to conditions which could not have been forseen at the time ofproject preparation. The combined effects of adverse weather conditions, delays in equipment deliveryand supplies, and the cement shortage that occurred in the country during project implementation resultedin delays in project completion. To the extent that a lesson could be learned, the completion delayunderscores the need for more detailed materials supply planning to ensure that the implementationschedule is not adversely affected. The very tight international market situation for gas turbines resultedin a 30% underestimation in the cost of the combined cycle blocks. Greater market intelligence is neededto predict more realistic cost figures.

14.2 The concept of time-slice lending which allows the use of Bank loan proceeds for anycomponent of an appraised and approved program, has proven to be a sound policy. Such an approachprovides the borrower flexibility in the scope of the project.

14.3 In the lignite mining sector, the successful project implementation has resulted fromsubstantial involvement of the private sector in mine operations. The decision to award an increasingquantity of work of overburden removal to private contractors, while EGAT retained control of long andshort term pit planning, pit stability, water management, environment and reclamation, as well as allaspects of lignite production, has proved an efficient one. While it gives the private sector considerableparticipation in the mining operations, the project utilizes EGAT's technical expertise in open pit miningthus ensuring a safe, and technically and environmentally sound mine development. Simultaneously, itincreases equipment availability and consequential reduction in EGAT's future requirements forreplacement shovels, trucks, bulldozers, etc.

-10-

14.4 The project illustrates that a combination of staff training and professional assistance is avaluable asset in successful implementation. EGAT's sustained operational achievements rely significantlyon its people. EGAT makes strategic plans in accordance with its corporate plan, to recruit, develop andretain the right caliber of human resources, and lays great emphasis on the job-performance-based-trainingaimed at developing staff knowledge, skill and experience. This has enabled EGAT to keep tightschedules on its construction programs and ensure power supply to meet rapidly rising demand.

14.5 While EGAT has developed into an efficient utility, there is scope for further improvementin its operations through fine tuning and adopting more commercialized approaches towards management.Commecialization of EGAT followed by privatization are foreseen as major challenges for EGAT in thefuture and the Bank could provide assistance in achieving these objectives.

- 11 -

W'ER .': 5 £VIELOPHEMYT -?OJECT

JAN '%;C 0. 7 -7- T.

rROJECT "'^1LE7..vN' REP_ORT

'ART '

Pr^.2ect Backfrotina

1.1 In 1987. :?suitea from the econoaic recovery of the country and

the growth of industrial sectors. Thaiiana has attributed a raDid arovtk

in eiectricity consumotiOn. Then. .he estimatea power demand. during the

lear of 1388-2001 reoresent an averace annual ncrease anout 480 Yv.

an5L the ±laC ot cower occurr:nq in 1390-1993. Thus. .he-'urcent projects

;ere s'lt into EGAT'- P,wer w,eveiooment Plan. sne of them was Bani Pakone

'omnined Cvcie Power !Kant Pro.iecr.. 3loctis J i 4.

I.2 Bang ,akonu 'mbinea Cycle Power Plant Blocks 3 '. 4 planned to

::onstruct in the same area of the existing Bang Pakong Power Plant which

the installed caacilty about 1820 (V. The pover plant blocks 3 & 4 shall

each be rated at 307 MW., consist of 2 combustion turbine generators and

a common steam t.urbine 7enerator and use the natural gas from tulf of

Thailand as a main fuel. L. is expected that the construction of

comoustion furbine jenerators tor blocks L h and steam turbine

generators for blocKs 3 L 4 will be completed in June 1990. September

1990. June 1991 ana August 1991 respecLively.

1.3 Finacial 'or this project came from various sources of fund such

as the International Bank for Reconstruction and Development 'IUtD).

the Export-Import Bank of Japan 'Exim Bank of Japan,. EGAT revenue and

commercial banks. For !BRD'S Loan. it was financed in two seDarate lonsa

i.e Loan Nos. 027-TH ana 3138-TH. 'he Loan No.3027-TH. at a total of

LSD 90.0 million. u;as agreed on larch 31. 1389 covering the installation

of Bang Pakona Combined Cvcle Power Plant Blocks 3 L 4 and. Mae Hoh Hine

Expansion Project for Mae .oh Power Plant lnits 8 L 9. Stare [.

- 12 -

Z. Project Resuit

. The project Icaieved -s objecr.;e ro increase anou. 614 SV

generating f-apacitv ;.Or. EGAT's power sysreu. eventhough the overail

compietion of Bang Pakong Combined Cycle Power Plant. 3locks 3 LZ 4 were

11.'Z months behind the schedule. Actually, by the most efficiency

effort. :he our zomousrion turbine generators with total capacity of

416 KW. Were completed during July-October 1990 Which were on schedule.

Only :he two steam rurbine generators delayed because of uncontroled

cause, that maae the compietion of Blocks 3 L 4 finish in May and August

1992 respectively. -he major cause was the Government's policy wbich

granted the total 200 days extension to the civil local contractors due

to the probles of lick of cement in Thailand during 1989-1990. In

generaily, with the most efficiency and strong effort. the output of the

project '-as satisfactorv and did not cause any effect to the EGAT's

pover system.

2.2 For the Mae Moh Mine Expansion Project for power plant units 8 L

9, the project implesentation was performed successfully as scheduled.

The saior and auxiliary equipaent was put into operation as scheduled,

while other mine activities concerned were physically completed Ls

planned.

Z.3 The disbursement for mine equipment could not be made from Loan

Nos. 3027-TH, due to the delayed in procurement procedures. All

expenditures of Mae Moh Mine Expansion Project were transferred to Loan

No. 3138-TH which financed by IBRD, while the Bang Pakong Combined

Cycle Power Plant Project Blocks 3 L, 4 has fullly disbursed of the loan.

Hovever, the transferred with draval of the loan., did not bring an

effect to the mine operations since the major and auxiliary equipaeat

were put in to operation as planned.

- 13 -

'Dv BY ;e economic anaiysis , The caicuiation of E5AT's Power

DeveioDuent Plan wnicn is baseao on 1992 price levei shows the economic

interna± rate of return 'EIRR) of 15.8% compared with 14% appeared

in SAR The sensitivity studv inich assumed 5% reduction in sales of

electricity :s also perforrea to compare with the test in SAR The

sensitivity study snows 'he 13.4% rate of return compared with 12% in

SAI

2.5 The economic .nternai rate of return 'EIRR) of the Bang Pa&koag

Combined Cycle Power Plant is also calculated based on the same

assumptions as used for EGAT's PDP. The capital cost of the project is

also included t;ith the cost of associated transmission systes. The re-

evaluated EIRK ,f the project is 29.5% compared with 24% in SAR

Sensitivity tests are also carried out for the purpose of comparison

Wlth Lae resuits in SAR The resuits of the base case and sensitivity

tests are tabulated as below

RATE OF RETURN OF BANG PAKONG COMBINED CYCLE

BLOCKS 3-4

Rate of Return (%)

SAR PCR

1. Base case 24 29.5

2. Capital andi operating knon-fuel) costs 20 27.3

increased by 10%

3. Natural gas priced at fuel-oil equivalent 20 29.1

after 10 years

4. 2. and 3. 16 26.9

- 14 -

an.Ks -erf )rmance

_ecause ! e an s -OODeratlon . enLinv us a r ime-Slice

.etfoa : Financinc. _7AT ouia borrow tr.e amounts exDectoa wihout. any

iifficu t. .n aeoet -?IIin LroDiem sna Dala less ror the commitment.

.narges. -oreover rne canK nas been eccoerative in procurement oroceaiure

Ia disbursements .:or czntracts, iin3near hv rnrh Inn u<O27-- n ?i

QHa :GAT aDpreciatea t.:s COODeraLlon.

4. Borrower Performance ana Pro.ect RelationsniD

EGAT's Performance

This is the first '>me-Slice Aethoa of Financing given to EGAT by

the Bank. ZGAT sometimes 6as confusea with the Bank's proceaure.

Due to some :isunaerstanaina in Droceaure for aisbursement from

L/C For .he ^ntras .,aLt tfinancea c'; t.o ioans. _GAT was unaoie to

use up tLe tirst ..an a.na nave ro reauest :'cr extencing the ciosing aate.

EGAT hopes tL.a .,. the future EGAT couid manage to have each loan

signed at the aDprooniatea Lime and couid fully withdraw from the first

loan before asicing for aisbursements from the second loan.

5. Co-financiers Performance

Co-f inanciers

The Export-Import Bank of Japan is the co-financier for Bang

Bakong Combinea Cycle Power Plant BlocKs 3 L 4 by providinq us the loan

for 85% of the total Contract Price of Janpanese Yen's Portion equivalent.

to Japanese Yen 9.753.891,232.

The Export-Import Bank of Japan is very cooperative. They also

allowed us to reimnurse for the amount paid before loan Agreement becaze

effective which enable us to utilize the loan as expected.

- 15 -

SUMMARY SHEET FOR PRoJECT REVIEW

AND COMPLETION REPORT

ProjecL Title Power System Development Project tBans Pakong Combined

Cycle Blocks 3 L 4;

ExecuLing and Implementing Agency ELECTRICITY GENERATING AUTHORITY OF

THAILAND Ori

Loan Agency I NTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBUD)

Investment Cost (USD million)

Funding Sources

Original Planned Actual

IBRD 3027-TR 90.0 90.0

IBRD 3138-TH 94.0 94.0

EZIM JAPAN 81.77 81.77

ECAT L GOVERNMENT* 105.0 127.65

TDP GRANT 0.35 0.35

Total 371.1Z 393.77

Project Co* encesent Project Completion

Block Planned Actual Original Actual 4kb

March 1989 March 1989 June 1991 8 May 1992

April 1959 April 1989 August 1991 20 August 1992

- 16 -

.OVERALL :.',`M0AR'f -ROJECT FERFORNANCE%

rro.iecr. P!rnose. *oa ana AzcomDlisnmenr.

UAT'S ourpose is Lo exoand the existint BFng Pakone tower Plant b7

,onstrucana rhe 5ang Pakonf combinea CYcie Power Planc. Block 3 4 4 with

tOta1 .^IDaCltV aOoUL 614 4W. to 1rooecr rho oroblem of lick ot pover

demana ;hich ;ill occur during 1990-1993. The goai to complete 4

comDusLion turDines Ja 1290 was accomplished on schedule. For steam

turbine zeneracors. h hey were schedule to complete in 1991.

the accomplishmenL ~n this portion was approxinately 1 year bebind the

schedule.

2. Financinv Soending

Because of Thailana annuai limited debt ceiling, the Bank agreed

to accommoaate a rime-slice lethoa of Financing tor EGAT's Power System

DeveiopmenL Froject; an o. .027-TH. available at USD 90 million in

larch !989 'nile the rest. of USD 94 million under Loan No. 3138-TI

available in January 1990.

As this Project Completion Report is made after Loan No. 3027-TH

has been used up, therefore only Loan 3027-TH will be reported hereunder:

The retroactive disbursement of only USD 2,200.000 has been used

out of USD 6,000.000 as stipulated in the loan Agreement. The

disbursements of this Loan 30Z7-TH have been made only for parts of Bang

PakonE "ombinea. cycle Pover Plant Blocks 3 and 1. and 230 KV

Transmission System Expansion. The Mine Equipment contracts which were

awarded in Novemoer 1989 and thereafter, together with Accelerated

Transmission Project and the balance of Bang Pakong Combined Cycle Power

Plant Block 3 and 4 as well as 230 KV Transmission System Expansion are

financed by Loan No. 3138-TH and EGAT's own fund. No disbursement for

environment was made since the procurement could not be made within the

loan closing date.

The loan closing date of September 30, 1991 has been extended to

flarch 31, 1992 for the payments through letters of credit committed by

IBRD.

- 17 -

Lesson Learnea

EGAT zontracsea 3uL ;te suppiy and erection vort as veil as the

civil .orx to private coapanies, either in locai or foriegu. aay

contracts have oeen execuced. t.hen EGAT has iearned about the method for

the contract administration such as the advantage of contracting,

7arious problems and soiution.

Especially, the staff at site have learned to cooperate with

the consultant in a role of inspector to proceed the project in the most

efficient way.

4. Conclusion

The project achieved its objective and increased the total generating

capacity of Bang Pakong Power Plant which operated as a base load plast.,

at the ievel of 2423 V. This achievemenc caused EGAT's power systes

aore reliable. -GAT. ..ith regard to the privatization's policy, has got

advantage in contracting out the work to private sectors such as

anagement cost and man-power reduction. Furthermore, the vork vas built

up and created the growth in economics in the area around the project

site.

Financing spending under this loan has been vell managed. though

the disbursesent were made after the loan closing date of september 30.

1991. The Time-Slice method is the proper way of financing for the

countries that are controlled by debt ceiling.

It can be seen from the re-evaluation that the econosic rate of

return of -EGAT's PDP and Bang Pakong Combined Cycle cosponents were still

in the same range as studies in SAR and econosically justified a

conclude in the appraisal stage

- 18 -

9. EVALUATION AND A:SESSMENT nF t&-FORMANCE. OF THE BORROWER

'ND THE HANK AND EFFECT.VENESS CF THJEIR RELATIONSHIP

Evaluation and Assessment

Analysis Inaaeauate Adeouatel not tinelylGood Excellent

timely

1 Project DesiLn and

lDlementation

- Project activities X

conmensurate iith

inputs,

- Project outpue X

commensurate with

activities

-Design of the project X

logical. impact-

oriented

-Timeliness of project X

implementation

-Compliance of project X

implementation with

plan

-Colla.boration between X

institution involved

in the preject

implementation

-19-

Evaluation 3nd Assessent.

AnalYsis Inadequate Adequatel not tinely Good Exoelleat

tingly - -

2. Staff Inputs

- Sufficient EGAT staff X %

involved

-Sufficient IBRD staff X X

involved

-Collaboration between

Project staff and

staff of IBR.D

-Timeliness of

availability of IBRD

assistance

3. Consultancv Service

- Sufficient consultant X X

input

-Adequacy of job X X

description performed

-Consultant technically S

qualified for task

-Quality and quantity S

of York of consultant

-Collaboration between X

Project staff and

consultant

-20-- - ,h.

Evaluation and Assessment

Analysis ilnadequatelAdecuate not ti3eiv GoodlExcelle

tingly

F inanCing

- Availability of loan X

at schedule !- Timeliness of loan X

disbursei to the

- Flexibility of loan X

given to the project.

S. .'aterials and EauiDnent

- laterials requirement Y

planned

- Quality of project X

materials and

equipsent

- Availability of X

project aaterials and

equipment acquired

- rimeliness of delivery X

of proiect materials

and equipaent

- Tiaeliness of use of X

project materials and

equipment

- 21 -

Evaluation ana Assessment

Analysis Inadequate Adequatel not Itimeiy Good Excelle

| I ~tinglyII

6. Project Relationship

- Collaborative

relationship between

the IBRD and EGAT

- Collaborative

relationship between

EGAT and. the assianed

- CooDeration in X

tecnnical aspect

resolution solving

7. Project Environment

- Policy support from X X

the Government

- Implementational X X

support and assistance

from IERD and the

assigned consultants

- Co-ordination with %

related government

programs

- Integration in %

economic/social policy

*~~ ~ ~~ @ i; .*

-22-

Eva±uatioR ana Assessment

Analysis InaequaLe AdequaLe not tiiseiy Good Excelle

tinely

S. Project Outouts |

- Ti$eliness of outputs X

produced I- Availability of and x -_ ' -

accessibility to the

outputs produced

- Project objectives x

achieved as compared

to the outputs

- Commensurativeness of

planned project target

vith outputs produced

9. Project Sustainability

Adequacy of technical X

and administrative

capubility to continue

maintaining the

project.

Government's continued x

power epansion and

development policies

Beneficiaries

receptiveness to the

project* ,

-23-

THAILAND

POWER SYSTEM DEVELOPMENT PROJECT (LOAN NO. 3027-TH)


PART HI - STATISTICAL INFORMATION

1. Related Bank Loan:

1.1 Loan 3027-TH financed a two year time-slice of EGAT's investment program and wasdirectly related to further Bank lending in the energy sector.

Loan No. Loan 3138-TH

Loan Title Second Power System Development Project

Year of Appraisal: 1989

Purpose: To continue the current project's assistance in helping EGATdeal with the high rate of growth in power demand.

Status: Being implemented as scheduled.

Comments: A Third Power System Development Project was approved onJanuary 8, 1992.

2. Proiect Time Table:

Item Date Planned Date Actual

First Presented to the Bank December 1987Preparation June 1989Appraisal Mission August 1988 April 1988Negotiations October 1988 January 1989Board Approval November 1988 March 1989Loan Signature January 1989 March 1989Loan Closing September 1991 September 1991Project completion July 1991 July 1992

-24-

3. Loan Disbursements

Cumulative Estimated and Actual Disbursements(US$ Million)

IBRD Actual Appraisal Actual as % ofFiscal Year Disbursement Estimate Appraisal

1989

June 1989 16.30 - -

1990

September 1989 32.45 10.0 326

December 1989 55.33 20.0 277

March 1990 69.08 30.0 227

June 1990 89.04 40.0 210

1991

September 1990 86.99 50.0 174

December 1990 87.61 60.0 146

March 1991 88.39 70.0 126

June 1991 88.80 80.0 111

1992

September 1991 89.14 82.5 108

December 1991 89.45 85.0 105

March 1992 89.52 87.5 102

June 1992 90.00 90.0 100

Closing Date: 03/31/92 9/30/91(at appraisal) (actual)

The last disbursement was made in March 1992.

4. Project Implementation

4.1 Annex 1 compares the scheduled project activities with the actual accomplishments.Implementation performance was satisfactory except for the delays in installing the two 100 MW steamturbine generator sets for Bang Pakong combined cycle blocks 3 and 4.

-25-

5. Project Costs and Financing

5.1 The table below compares the SAR and final project cost of a two year time-slice (FY 1989-1990) of EGAT's Power Development Program.

(US$ Million)SAR Actuals

Locta Foreien Total Local Foreign Total

EGAT's Investment ProgramFY (1989-90)

Generation

Thermal 224.7 790.4 1035.1 222.5 758.8 981.3

Hydro 25.3 30.4 55.7 0.3 26.0 26.3

Sub-Total 270.0 820.8 1090.8 222.8 784.8 1007.6

Transmission 80.8 139.6 220.4 86.2 163.0 249.2

Lignite Mining 60.1 28.1 88.2 15.7 29.8 45.5

Miscellaneous 54.2 8.0 62.1 119.1 86.7 205.8

Taxes and Duties 186.6 - 186.6 - - -

Total Base Cost 651.7 996.5 1648.1 443.8 1064.3 1508.1

Contingencies

Physical 47.5 86.4 134.0 - - -

Price 40.3 63.2 103.5 - -

Total Cost 739.6 1146.2 1885.7 _

Interest Dunng 22.4 151.7 23.9 34.4 58.3Construction 129.3

Total Financing 868.9 1168.5 2037.4 467.7 1098.7 1566.4

-26-

5.2 The following table compares the SAR and actual project costs for Bang Pakong CombineCycle Component and miscellaneous items.

SAR Estimates Final Cost

Local Foreign Total Local Foreign Total

2x300 MW Combined CyclePower Blocks:

Base Cost 85.10 180.50 265.60 108.30 298.05 406.35

Physical contingencies 8.50 18.00 26.50 - - -

Price contingencies 5.20 10.70 15.90 - - -

TOTAL 98.80 209.20 308.00 108.00 298.05 406.35

230 KV Transmission PlanExtension:

Base cost 4.90 5.40 10.30 19.29 6.75 26.04



TOTAL 5.70 6.30 12.00 19.29 6.75 26.04

Consultine Services:

Base cost - 10.50 10.50 0.02 0.02 0.04

Physical contingencies - - - - - -

Price contingencies - 1.10 1.10 - - -

TOTAL - 11.60 11.60 0.02 0.02 0.04

Computerized MaintenanceManagement System:

Base cost 0.30 - 0.30 0.20 - 0.20

Physical contingencies 0.10 - 0.10 - -

Price contingencies - - - -

TOTAL 0.40 - 0.40 0.20 - 0.20

Environment MonitoringEquipment and Training:

Base cost 0.10 0.80 0.90 0.04 0.52 0.56

Physical contingencies - 0.10 0.10 - - -

Price contingencies - - - - - -

TOTAL 0.10 0.90 1.00 0.04 0.52 0.56

Total Proiect Cost:

Base cost 90.40 197.20 287.60 127.85 305.34 433.19



TOTAL 105.00 228.00 333.00 127.85 305.34 433.19

Note: The itemized details are presented in Annex 3.

-27-

5.3 The following table presents the SAR and actual project costs for the Mae Moh LigniteExpansion Component:

(US$ Million)SAR Actuals

Local Foreien Total Local Foreion Total

Minine EauiDment:

Lignite-handling 23.30 5.35 30.53 35.83system 2.00 21.30

Mining equipment 3.00 5.00 8.00 2.68 3.12 5.80

Duties & taxes 5.30 - 5.30 8.03 - 8.03

Sub-total 10.30 26.30 36.60 16.06 33.65 49.71

Social Works:

Civil Works 3.80 - 3.80 5.23 - 5.23

Resettlement & Land 32.60 - 32.60 32.30 - 32.30

Water diversion 33.80 - 33.80 42.72 - 42.72

Sub-total 70.20 - 70.20 80.25 - 80.25

Eneineering & Trainine 2.20 0.40 2.60 0.84 0.33 1.17

Total Base Cost 82.70 26.70 109.40 97.14 33.98 131.12

Physical contingencies 8.30 2.70 11.00

Price contingencies 5.00 1.60 6.60

Interest during construction - - - 1.86 - 1.86

TOTAL 96.00 31.00 127.00 9. 33.98 132.98

5.4 The following table presents the financing for EGAT's Power Development Program:

(USS Million)SAR Actuals

Local Foreigm LoW 9 Loc Eoreien Total 9G

World Bank: - 200 200 9 - - 225.4 14

Loans Outstanding 110 - 110 - - - 135.4 -

3207-TH 90 - 90 - - - 90.0 -

Other Official Sources - 75 75 4 - - 184.7 12

Export Credits - 519 519 26 - - 432.2 28

Commercial Borrowing 317 374 691 34 - - 101.6 6

International cash generation 552 - 552 27 - - 622.5 40

TOTAL 1168 896 2037 100 - - 1566.4 100

* Includes ADB, OECF, MOF & EGAT Bonds.

-28-

6. Project Results

A. FINANCIAL IMPACT

6.1 EGAT's financial performance comparing actual results with appraisal forecasts for theperiod FY88 to FY91 is presented in Annex 6,7 and 8 and is summnarized in the following Table:

1988 1989 1990 1991

Actual SAR Acgila SAR AcUtua SAR Acz. SAR

Energy Sales (GWH) 29494 29386 33611 33749 39369 37727 44773 41724

Avenge Reveame (B/KWH) 1.27 1.26 1.26 1.26 1.26 1.45 1.24 1.46

Operating Reveme 37474 37118 42649 42589 50410 54726 MM6 61304

Opetin Expeme 28097 28184 31966 31583 38677 38966 47258 47280

Operating e 9377 8934 10653 11006 11733 15760 9957 18524

Net Inmae 3565 2564 5583 3616 6606 8970 5470 10977

Averap Rate Baw 93642 90034 101266 92837 114381 99782 113487 114316

Long-term Debt (Net) 61903 67507 62141 70376 74205 89663 105710 104968

Prhar Rti

Rate of Rel (%) 10.01 9.90 10.51 11.90 . 10.26 15.80 7.46 16.20

Debt-wervce coverae 1.45 1.40 1.47 1.40 2.12 1.60 2.20 1.60

Operating ratio(%) 75 76 75 74 77 71 82 70

curret rtio 0.96 1.01 1.13 0.89 0.90 0.83 0.97 0.84

Debt as f%of TotCapitalization 45 51 40 49 41 52 43 52

SeIf-Ftmiing Ratio 3 yer avernge 47.90 47.oD 57.90 28.00 44.80 25.00 31.30 26.00

6.2 Data relating to Lignite Mine Sector is given in Annex 7 and 8 and is summarized in thefollowing table:

LIGNITE MINE DIRECTORATESUMMARY OF FINANCIAL PROJECTIONS

(Baht Million)FY 1988 FY 1989 FY 1991

Actual SAR Actual SAR Actual SARLignite Sales (MMt) 5.59 5.93 6.16 6.52 11.33 9.0Transfer Price (Baht/t) 464 464 497.90 487.2Total Revenue 2691 2752 3184 3176 5369 4700Generating Expenses 1491 1743 1690 2047 3419 3118Interest 153 67 153 91 203 410Other Expenses 152 356 243 383 1201 477Net Incomne 751 513 928 517 1391 478

RatiosReturn on Assets /a 11.2 7.4 13.4 /b 20.5 4.6Debt as % of Total Capitalization 47 52 46 /_ 52 44

/a Average net revalued assets in operation./b No figures are available in SAR.

6.3 The financial performance of EGAT during FY88-91 compares favorably with projectappraisal forecasts and was within the covenanted parameters. The electricity sales, projected

-29-

at appraisal to increase by 42%, registered an actual increase of 52%; and except for FY91, therate of return on revalued assets was more than 10% (substantially exceeding the figure of 8%generally expected from this sector). For FY91, the rate of return dipped marginally to less than8 % primarily due to an increase in the fuel cost in the wake of the Gulf War. To achieve a 14%increase in electricity sales in FY91 over FY90, the fuel cost increased by over 26%. The costof fuel per unit of electricity generated increased from Baht 0.55/Kwh in FY90 to Baht 0.62/Kwhin FY91 -- an increase of 13 % -- without a corresponding increase in the unit sale price ofelectricity. Until September 1991, EGAT's tariff schedule contained a fuel cost variation chargeclause but adjustments under this were not automatic, were subject to RTG review, and at timesdelayed. From October 1, 1991, the RTG has allowed EGAT to automatically change the tariffrates corresponding to changes in prices of fuel and uncontrollable factors.

6.4 As stipulated in the financial covenants, for each of its fiscal years 1988 to 1991EGAT produced sufficient funds from its internal resources to meet more than 25 % of its annualaverage capital expenditure incurred for that fiscal year, the previous fiscal year and the nextfollowing fiscal year. Its debt service coverage during these years was more than 1.45 times, andin each of these years the total outstanding debt of EGAT was less than 1.5 times its capital andsurplus (including revaluation reserves). As EGAT needs to make a very large investment, andits financial health is sound, the Bank has given a relaxation of SFR covenants down to not lessthan 20 percent during 1991-93 with the condition that ROR shall not fall below 8%.

6.5 EGAT's financial performance should continue to be satisfactory over the foreseeablefuture, particularly in view of the fact that the RTG has already permitted EGAT to introduce inits tariff schedule a formula for automatic adjustment mechanism for variations in fuel and otheruncontrollable costs. It will, however, be necessary for EGAT to increase its tariff by about25% in FY95, 10% in FY96 and 5% per annum thereafter up to 2001 so that the target of aminimum self-financing ratio of 25 % could be maintained. This will also enable EGAT to earna rate of return of more than 8 % on revalued assets. The present basic tariff structure of EGATis effective up to 1994. In the power development program of EGAT for 1992-2006 (finalizedin September, 1992), the basic tariff is proposed to be increased adequately from FY95 onwardsto achieve these targets.

B. ECONOMIC ANALYSIS

EGAT's Power Development Plan (PDP)

7.1 The project forms a part of EGAT's least cost expansion plan. To reconfirm theeconomic viability of this plan, an adjusted Internal Financial Rate of Return is re-evaluated asan approximation of the Economic Rate of Retum (ERR), on the basis of the incremental costand benefit streams associated with the 1988-97 time slice of EGAT's overall investmentprogram.

7.2 The methodology used in re-evaluating the rate of return is similar to that used in theSAR. Capital costs are the investment costs of power plants and transmission system expansionswhich will be completed by 2000. Fuel prices are based on actual values for 1988-92 andprojected values from 1993 onwards. Economic costs of natural gas are based on estimates bythe Petroleum Authority of Thailand considering contract terms for the purchase of gas. Theeconomic price of lignite is based on the transfer price calculated on present estimates of

-30-

reserves. Economic prices of other types of fuel, such as heavy oil and imported coal, are basedon international prices. Details of fuel consumption, economic prices of different types of fuel,and the total fuel costs are given in Annex 9. Operation and maintenance costs are based onstatistical records of these costs for existing plants. Transmission costs are based on unit costsand the projected lengths of transmission lines and capacities of transformers. Estimates foradministrative and general expenses are based on the actual costs in the first year and escalatedat 3 % per annum in real terms. Power purchase from Laos is at a cost of 0.9413 Baht/Kwh, andfrom Malaysia at a cost of 1.53 Baht/Kwh, throughout the projection.

7.3 On the benefit side, EGAT's energy sales are projected to increase at an average rateof 9% p.a. from FY92 to FY2001, in line with the Working Group Load Forecast adopted bythe RTG in September 1992. For 1988-91, energy sales are valued at the actual EGAT'saverage selling price. For 1992-94, energy sales are based on the 1991 tariff structure. From1995 onwards, the projected selling price is based on realizing a self financing ratio of 25 % onthree year average investments. All prices are in 1992 price levels. On the above bases, the re-evaluated economic rate of return (ERR) is 15.82% which compares favorably with the SARvalue of 14%. The higher ERR reflects much greater than forecast energy sales and a moreefficient operation of the system. Details of the calculations are in Annex 10.

Bang Pakong Combined Cycle Power Component

7.4 The ERR of the Bang Pakong Combined Cycle Power Plant is re-evaluated on asimilar basis as the SAR with the same set of assumptions (as for the PDP) for the economic costof natural gas and the electricity tariff. The investment stream of the project includes the cost ofthe associated transmission system. The other important parameters used in the re-evaluation are:Plant Factor: 82%; Efficiency: 45%; Generation Loss: 2%; and Transmission Loss: 1 %. Theoperation and maintenance cost is based on actual figures for the years 1990 to 1992 and isassumed at 2.8% of the investment cost from 1993 onwards. The re-evaluated ERR of theproject is 24.5% which is slightly lower than the figure of 25% in the SAR. The results of theanalysis are at Annex 11.

Mae Moh Mine Expansion Component

7.5 The re-evaluation of the ERR for the Mae Moh Mine expansion compornent is carriedout on a substitution basis as used in the SAR. The analysis considers two variants: first, byassessing the economic rate of return on the combined investment in lignite mining and powergeneration for Units 8 and 9; second, by considering the investment in mining only. In theformer, the cost of power plants and the lignite mine development costs have been combined andthe benefits measured in terms of electricity sales. In the latter, the benefits represent the netback value of lignite calculated by the same methodology as in the SAR. The detailed calculationof net back value of lignite is given at Annex 12. The re-evaluated ERR considering the mineand power plant is 23% compared to an SAR value of 13%. The difference is largely due to ahigher plant factor and a higher plant efficiency for lignite fired units (based on EGAT currentexperience), and a higher tariff for valuation of electiricity benefit. The significantly higher netback value of lignite compared to the SAR figure (due to a much higher capital cost of coal plants

-31-

compared to lignite plants) has resulted in a very high ERR for the mine operation alone. Detailsof the calculations are at Annex 13.

8. Status of Covenants

Section Covenant Description Status &ProposedAction

1. Adult

5.01 (b) (a) Have accounts and financial statements audited each financial year. Compliance

5.01 (b) (b) Furnish certified copies of financial statements to the Bank six months Complianceafter end of each fiscal year.

5.01 (b) (c) Employ qualified auditors. Accounts are auditedby Coopers andLybrand and by theoffice of the AuditorGeneral.

2. Self-Financine Ratio (SFR)

5.03 (b) (a) Not less than 25% Compliance (48%for FY88; 58% forFY89; 45% forFY90; 31% forFY91; and 27% forFY92.)

5.03 (b) (b) Review and inform the Bank whether EGAT will meet the Compliancecovenanted SFR for the current fiscal year and the next following fiscal year.

3. Tariff

5.03 (a) (a) Maintain a provision for fuel adjustments in the tariff schedule. Compliance.Provision for this wasintroduced in thetariff structures ofEGAT with effectfrom October 1991.

4. Debt Service

5.04(a) (a) Shall not incur debt greater than 1.5 times capital surplus. Compliance. In eachFinancial year FY88to FY91, EGAT'soutstanding debt wasless than 1.5 times itscapital and surplus(including revaluationreserves).

5.04 (a) (b) Shall not incur short and medium term debt exceeding 15% of all debt. Compliance.

-32-

Section Covenant Descriion Stu &Prooose Acdon

5. Insurance4.03 (a) Make appropriate provisions for insurance. Compliance. Status

of sinking fund wasreviewed by RoyalInsurance and foundadequate.

6. Lisnite Deortment

3.03 (a) Continue lignite exploration and submit related annual report to the Bank. Compliance.5.02 (a) (b) Operate lignite department as a separate profit center, with separate Compliance.

accounts and financial statements.5.02 (b) (c) Continue to set lignite transfer price in accordance with Bank-agreed Compliance.

methodology.

5.05 (a) (d) Maintain lignite department debt/equity ratio of no more than 60:40 and Compliance. Thedebt service coverage of at least 1.3 times. debt/equity ratio was

47:53 in FY88; 45:55in FY89; 47:53 inFY90; 52:48 inFY91; and 42:58 inFY92. Debt servicecoverage was alsomore than 1.3 timesas covenanted duringthe period.

7. Subproiect ADurova3.01 (a) Submit to the Bank for approval an evaluation of all Compliance. All

subprojects to be financed under the loan. components havebeen identified andapproved by theBank.

9. Use of Bank Resources

A. Staff Ipt(Staff Weeks)

Tak FY85 FY86 FY87 FY88 FY89 FY90 mY91 FY92 FY93 TOal

Projc PrWea .0 .5 1.6 .8 3.0

PfojeAp - 7.8 3.0 10.8

LoIn Negodon 21.4 21.4

LA Prccukt .7 .3 .3 18.7 .9 20.9

Projec CMetti- Raept .6 15.4 16.0

Proje &*iW9 4.3 10.9 1.8 2.3 19.3

.7 .3 .8 28.0 30.4 10.9 1.8 2.9 15.4 91.3

-33-

B. Missions

Month/Year No. of Persons Days in Field Specialization /a Performance Rating Lk Type of Problem

05/89 1 5 E I None

07/89 2 4 E. F I None

03/90 2 4 E, F 1 None

/a E = Engineer, F = Financial Analyst/b I = No or minor problems

- 34 -

ANNEX 1

THAILAND


IMPLEMENTATION SCHEDULE

EGAT - COMBINED CYCLE BLOCKS 3 and 4

Schedule Actual

Bang Pakong CombinedCycle Block 3

Combustion TurbineGenerator Unit 1 May 1990 July 1990

Combustion TurbineGenerator Unit 2 June 1990 August 1990

Steam TurbineGenerator June 1991 May 1992

Bang Pakong CombinedCycle Block 4

Combustion TurbineGenerator Unit 1 August 1990 Sept. 1990

Combustion TurbineGenerator Unit 2 Sept. 1990 Sept. 1990

Steam TurbineGenerator August 1991 August 1992

- 35 -

ANNEX 2Page 1

THAILAND


Bane Pakong Air Ouality Monitoring Results. 1991

Monitoring January April AugustSites Parameters

Max. 24 hr. Concentration (ug/m3)

1. Old Petrolized Plant SO2 0 0 <25NOx 30 46 15TSP 252 79 50

2. Worker Housing S2 2 6 0NOx 20 19 12TSP 401 184 129

3. Public Relation SO2 0 0 0NOx 22 37 129TSP 267 124 100

ONEB Ambient Air Quality Standard:

SO2 in 24 hr. - 300 ug/m3

NOZ in 1 hr. - 320 ug/m3TSP in 24 hr. - 330 ug/m 3

- 36 -

ANNEX 2Page 2

Bang Pakonz Thermal Power Plant

Air Ouality Monitoring

I. Measurement of S02, No,, and total suspended particulatesconcentration in the ambient air are made three times annually from threesampling stations. The location of sampling stations have been adjusted fromtime to time. As of 1991, the three sampling stations are located at the publicrelations building, worker housing and the existing petrolized plant. Monitoringresults indicate that the concentration of SO2, NO,, and suspended particulatesare well below allowable limits (See table on page 1).

Water Ouality Monitoring

II. Regular monitoring has been done to detect the changes in thephysical and chemical characteristics of the Bang Pakong river, which is thewater resource for power plant cooling system as well as the receiving water bodyfor the discharged cooling water and treated waste water. A total of sixsampling points were established along the course of the river within the areaof influence of the power plant. Monitoring is done twice a year (wet and dryseason) and parameters sampled follow NEB guidelines.

III. Based on the data analysis, water quality at the Bang Pakong riverwithin the range of influence of the power plant is of acceptable quality fornatural surface water with salinity influenced from the sea water reaching as faras the central district of Chachoengsao (approx. 50 km from the river mouth).Physical and chemical properties vary reasonably with seasonal and tidal effectsbut within the criteria acceptable for aquatic life. However, the historicaltrend indicates that water quality of the lower Bang Pakong river deterioratesconsiderably due to the rapid growth of agricultural and industrial activitiesalong the river upstream. Impacts contributed by the construction and operationof the Bang Pakong Power Plant are small since effluent discharged from the powerplant has been processed through a complete waste water treatment system incompliance with the effluent standards of the Ministry of Industries. Dissolvedoxygen and salinity levels of 5% were measured at six sampling stations along theBang Pakong river.

Thermal Diffusion

IV. Measurement of temperature distribution of the warm water dischargedfrom the cooling system of the Bang Pakong thermal and combined cycle power plantis performed twice annually. Isotherms are developed to depict the pattern ofthermal diffusion and area coverage in the Bang Pakong river. A general trendhas been that the temperature of discharged cooling water decreases about 2-5°Cwithin a 150 meter radius from the outfall and isotherm of 1°C warmer than theambient water temperature covers the river area in the range of 100-144,900 m.Monitoring results lead to the conclusion that the thermal diffusion pattern forwarm water dissipation and area coverage is significantly affected by the tidaleffect and wind speed.

AM=E 3Page 1 of 2

Th&ILAW

POWER Sx11 DCvCLoFrC8T PSDJ3CT (ILoA 3207-TH)

A. Cost Estimate for Bm- Pskmaz Combined Cycle Cn Daat(In US million)

Itm_ SAR A ICTUALLocal Foreign Total Local Foreign Total

2 x 300 MW Bank Pakons Combined Cycle Pomer BlocksLand and land rights 3.48 _ 3.48 0.84 - 0.84

Civil works 14.23 - 14.23 42.44 0.28 42.72

Structural steel - 7.36 7.36

4 x 100 MW combustion turbine generators - 30.04 80.04 0.45 132.70 133.15

2 x 120 MW stem turbine generators andassociated beat recovery boilers - 52.24 52.24 2.37 102.45 104.a2

Plant mechanical syst.m - 19.40 19.40

Plant electrical systess - 12.10 12.10

Instrumentation and controls - 6.31 6.31

Water treatmant plant - 0.35 0.35

Mechanical construction 16.27 2.00 18.27 22.66 29.40 52.06

Electrical construction 5.89 0.70 6.59

Construction supervision 5.13 - 5.13

Engineering and administration overhcada 1.00 _ 1.00 5.33 10.24 15.57

Local transport 1.78 _ 1.78 0.46 0.46

Duties and taxes 37.32 _ 37.32 33.14 33.14

Miscelloanous quipment 0.61 1.23 1.84

Interast during construction 21.75 21.75

Base Cost 37 32 180 502660 108.30 298.0 406 35

Physical contingencies 8.50 18.00 26.50

Price contingencies 5.20 10.70 1S 90

Total 98 80 209.20 308 00

230 kV Transmission System ExpansionReinforcament of the 230 kV Bang Pakong-Bang Pbli transmiscion line 2.58 3.84 6.42 16.24 0.33 16.57

Expansion of 230 kV switchyard at Bang Pakong 0.44 1.56 2.00 1.25 5.53 6.78

Engineering and administration ovarheada 0.53 - 0.53 0.11 0.11

Local transport 0.05 O 0.05

Duties and taxes 1.30 - 1.30 1.80 1.80

Interest during construction 0.78 0.78

sCost 4 90 5.40 10 30 19.29 2675 Z 6.04

* sica3l contingencies 0.50 6.50 1.00

* co contingencies 0.30 6.40 0.70

Total 5 70 6.30 12 H0

A=3Page 2 of 2

Item SAR ACTUAL

Local Foreign Total Local Foreign Total

Consulting ServicesBase cost _ 10.50 10.50 0.02 0.02 0.04

Physical contingencies 1.10 1.10 _

Price contingencies _ _

Total : 11.60 11.60 0L .020

C50 utorized Maintenance Manamsownt S_ste.

B s. Cost 0 30 - 0.30 0.20 0.20

Physical contingencies 0.10 _ 0.10

Price contingencies _ _

Total 040 _A! 0 02& 03

Environmental MInitorina Eauipmnt end Training

Air. wat-r and noise monitoring equipments for Bang Pakong _ 0.45 0.45 0.04 0.52 0.56

Data acquisition system for Mae Mbh 6 0.03 0.03

Sampling equipoent for Khanoo - 0.01 0.01

Mobile Leboratory - 0.21 0.21

Duties and tazes 0.10 - 0.10

base Cost 0.10 L.ao 0o. 0L04 0.52 056

Physical contingencies _ 0.10 0.10

Price contingencies _ _ _D

Total 01 .90 1Li!

Total Proiect CostBase cost 90.40 197.20 287. 60 127.65 305.34 433.19

Pbysical contingencies 9.10 19.70 26.04 - - -

Price contingencies 5.50 11.10 16. 60

Total Proiect Cost 105.00 226.00 333.oe 127.8 305334 U33.19

ANNEX 4

TEAILAND

KUM SYST DEVEU. NT PJECT (LOAM 3207-TH)

EGAT'S PAST FINANPIEL FPERMAPE - FDAMCIAL STATEMEUTS 1988-1991

(in Baht .ilion)

1988 1989 1990 1991

Actual SAR Actual SAR Actual SAR Actual SAR

Energy Sales (GWh) 29.494 29,386 33,611 33,749 39,369 37,727 44,773 41,724

Increase (1) 14.44 14.00 13.96 14.18 17.13 11.80 13.73 10.60

Average price (B/KWh) 1.27 1.26 1.26 1.26 1.26 1.45 1.24 1.46

OPERATBIG REVENUE

Sales of Electricity 37,124 36,898 42,114 42,389 49,296 54,516 56,184 61.084

Others 350 220 535 200 1,114 210 1.031 220

TOTAL OERATING REVENUE 37 474 37,118 42,649 42.589 50.410 54,726 57,215 61.304

OPERATING EPEINSES

Fuel/Bulk Power Purchase 17,510 17,787 19,544 20,778 24,138 25,666 30,499 26,985

Operations 4,773 5,508 5,545 5,330 6,434 6.360 7,525 7,444

Depreciation on Re-valued Assets 4,753 4,233 5,343 4,601 6,247 7.478 6,002

Remittances to Government 1.061 656 1,564 874 1,858 1.879 1,756 2,350 )

TOTAL t AXING EXPENSES 28.097 28,184 31.996 31.583 38.677 38,966 47.258 42,780

OPERATDfG INCO 9,377 8.934 10.653 11.006 11,733 15.760 9,957 18,524

Interest charged to operations 4,621 4.659 4.321 4,954 4.340 5,522 4,288 6,359

Foreign exchange loss 1,942 2,228 1,677 3,073 1,670 1,919 1,590 1.772

Mining Income (-) -751 -517 -92 -637 -883 -651 -1,391 -584

TOTAL WM-OPERATNG EXNS (net) 5.812 6,370 5.070 7,390 5,127 6.790 4.487 7,547

NET D0HC 3,565 2.564 5_583 3,616 6.606 8.970 5,470 10.976

Rate base 93,642 90,043 101,266 92,837 114.381 99,782 133,487 114.316

Rate of return (X) 10.01 9.9 10.51 11.9 10.26 15.8 7.46 16.2

Operating ratio (X) 75 76 75 74 77 71 82 70

ANNEX 5

THAILnAD

POW= SYSTEM DEVELOPMefT PRoJEeT (LOGA 3207-TH)

EG*T'S PAST FIANCIAL PERFoRWANEZ - FINAEIAL STATEMET 1988-1991 - SOURES AND APPLICATI(M OF FUNDS

Sources 1988 1989 1990 1991

Actual SAR Actual SAR Actual SAR Actual SAR

INTERNAL CASH GENERATION

Operating income 9,377 8,934 10,653 11,006 11,733 15,759 9,957 18,524

Non-operating incnme 751 517 928 637 883 651 1,391 584

Depreciation 4,753 4.233 5,343 4.601 6,247 5,061 7,478 6,002

Other itma not involving cash 992 -484 -1.123 -671 1,146 -549 2,612 -1,161

TOTAL 15.873 13.200 15 801 15.573 20,009 20.922 21.438 23.949

Borrowings (not) 3,767 3,683 6,481 9.737 16,661 27,982 20,443 27,144

Governoent equity 114 24 195 82 152 125

Disposal of assets 224 675 91 236

Unpaid bonus & Government remittances 140 749 501 687

TOTAL SOuRCES OF FUYDS 20.118 16,907 23 901 25.392 37.414 48,904 42.929 51.093

APPLICATION

Capital expenditure:

a) Power 7,688 6,497 11,805 13.853 27,566 33,485 31,990 33,742

b) Irrigation, mine & development expenditure 1,264 569 1,032 1,307 1,111 2,290 1.522 1,912

Total capital expenditure 8,952 7,066 12,837 15,160 28,677 35,775 33,512 35,654

DEBT SERVICE

Principal (not) 5,694 5,078 5,414 6,566 5,634 6,864 5,725 6,695

Interest 4,621 4,659 4.321 4,954 4,340 5,522 4,288 6,359

Increaxe (-)/Decrease in deferred interest -89 91 -83 90 -61 87 -8 70

Increase/Decrease (-) in working capital 941 13 1,412 -1,378 -1,174 656 -588 314

TOTAL APPLICATION OF FUNDS 20.,119 16,907 23901 25.392 37.416 486904 42.929 51.092

Debt service coverage (tims) 1.45 1.40 1.47 1.40 2.12 1.60 2.20 1.60

Self-financing ratio 47.93 47.00 57.87 28.00 44.81 25.00 31.35 26.00

meem.m** .smmm.. ~eseoem... ... m.... oe.m...o esem.... 000.m... gee......

wo £0ro o UUfro t ill Iro ue0 - o

wo WO tro iwo *o we iro Ig I1"

IS SI t1t MI UZ L1K 1 1"1 lqaqW_ . _ _ _ ~ ~ ~ ~ P

twi "61 $Ml is1f awl Mai LF1e9 _-

*U.I0 1 LUSt 3813N 11i1 1 SItl gm6 1 £l 6811 sJ.

_lt ISV 503! Utl SKI 6fl1 £8l E! _ _

mm mlw t 0 l gm an Ms f It" E kw01NM Kill US 55 f 11ftf ISI 86

lal omt on OWL Kw toc tw _ ___

K"ml 611 am363 IllUI 1IOt1 mmti fit" OWL _

ewD NM c au NMs bff Ilt _,sK&N0 a ll am3gm USD1111111 131 Lot it 6 3 5 0

lous me gm FW a no m O§WA111111 me8611 KS ani 8631 a"!! "a61 IwO

551~~ 11* SK 19 p us gg

mu = r - 55 - me is aqWImirMuwi VA,iv um

mm1 Now85 3UI _IlltM 3_11I WILI "lot NUMI ILVRWJDAL

msit &d0l #ml 0ig 11410S 1LIt &5I £658! _ _pe *- eeW

aw 661 U11l Ul1 fft owl 3tl 1UI 1-1

"001 am U " am nu UK __iL

sit Ka 5IUt l9 C M 869 6161 6t

owl m oWl ml ot pull clt ulMogm 1. IIU Kwl t Pt 9 l l t * t *IVgoVW&

,161 awl semi 6=1 ,tl pstlt tins IVW tl __1l £8651 6180 SEP3 38865 55W1 U!! USl -IC

_686! £881 6! I N!I COt 4ltl 8111!m11 l tMSii81j19 8801 1! 8tl 3 I I "I £1.8l !n 55! I&S

-TV -

1 IU l Sl tla SUllZtl 11t |

m~~~~~~~~3NuavU 1 3UDV m mvCmSnvU

9 X31'R ~

- 42 -

AMI 7

THAILAND

POWER SYSTE DZVELOBT PSJECT (LOAN 3207-TN)

PIRNAE= STA!DUNTU

EYM - LIGBITZ HMN OPERAF ICfl

A. IOH STA!ZZM TSU FBSS-91

FT 1986 Fl 1989 FT 1990 FTy 1991

Actual BAR Actual SAR Actual SAR Actual SAR

Lignite sales (MMT) 5.8 5.93 6.39 6.52 5.89 11.58transfer price (B/ton) 464.1 464.1 497.9 487.2 442.7 463.6

Revenue 2691 2752 3184 3176 3936 5369

Generetinx Expense.

Overburden remaval 1036 1349 1214 1594 1891 2585Reclamation 22 25 25 27 36 61Others 433 369 451 426 542 770

Subtotal 1491 1743 1690 2047 2469 3419

Bead Office 114 126 119 140 152 135Amount of Preliminary

expenses 14 185 83 203 16 15Inventory adjustment 26 24 2Depreciation 153 73 153 139 178 203rnterest charge 144 67 170 91 171 155Foreign exchange losses 50 45 65 40 67 50

Net Oneratina Expenses 1940 2239 2256 2660 3053 3978

Not Profit 751 513 928 516 883 1391

- 43 -

PM 3S1T3 DmIOU! PJZT (LOAM 3207-U)

FrZIAL STA3

U!- L115-OUf

U. 3AL gm=, 15-l9(at iniIe)

FT 1.988 FY 1909 FT 1990 FTY 1991

Actual SAR Actual SAR Actual 3*1 Actual T *1

Assets

Property, plant L equip.At cost 3722 4086 3852 4485 4143 4225Less Acc. Dept. 1029 2086 2068 2352 2325 2579

Not 1692 1999 1784 2137 11 1646

Under construction 142 540 345 1189 599 1473Developsent expenses 4623 4513 4645 4786 4067 3305Reclm ation sinking fund 178 173 213 202 264 350Deferred expenses 26 - 16 0 16 16

Current Assets

Inventory 291 336 311 399 305 350Receivables 74 83 49 95 205 63

Subtotal 365 419 360 494 510 413

Total Assh t 7232 7644 7363 6809 7274 7204

Liabilitiea & Eauity

Equity 617 610 574 691 727 738Retained earnings - 2496 - 2848 _Internal funding 3713 1605 3641 1639 3448 2941Deferred foreign

exchange adjustment 817 873 706 845 603 683

Subtotal 3512 3838 3609 4334 3372 2996

Long-term debt 3345 3384 3226 3935 3401 3557Less current mat. 278 277 232 416 354 34f

fg 3067 3107 2994 3519 3047 3211

Reclamation sinking fund 178 173 213 202 264 350

Current LiabilitiesPaysbles 160 182 278 219 197 263Current portion of LTD 278 277 232 416 354 346Interest due 37 67 36 118 40 37

Subtotal 475 526 547 753 591 647

Sotcl Liabilities & 7232 7644 7363 6809 7274 7204. ....t_

THAAND Am&9POWER SYSTEM DEVELOPA Nfl PROJECr

Data fir Ecmmic Evalai of EGAT PDP

Yew Nlbww ammo~ C_ Noy Diee Lignite Nelil Gm G9dCF H_W Dioel Linite Nlurdi ae (HSUM He"n Diell U

a Ln O0 1 Off Nwn ONa Lan ON1 ONl Oil OiN

s_ar K ehu (ML) Shae K b (ML) () Krebu H HL . *1

1937 3363 21.8 664.6 1 .3 . 0.7 _ U.0 2.1 3.4 14.2

1 4332 22.6 754.4 0.6 6.3 102.0 0.3 90.3 -0.7 0.0 60.7 24.7 2.3 3.6 13.0 2227.3 231.3 -2.4 -70 252

16 467.4 20.6 1045.8 3A 6.4 132.1 -1.2 391.2 23 0.6 60.7 23.3 2.3 3.5 14.0 2914.3 2. 7.9 222.3 40373

low 443.3 24.0 2318.2 114.3 8.0 104.0 3.1 16S.6 113.0 s.1 6o.7 24.6 2.7 4. 13.2 2424.3 4186.6 6S6.S 1066.0 3o2.

1901 820.5 333 27.3 2027.6 72.0 11.6 136.2 33A 5.5 2273.1 71.7 5.8 80.6 23.7 26.6 3.5 5.6 13.6 4401 3046.6 30.2 2074.5 16012.2

10o2 "O.4 51. 82.6 230W.3 14.6 12.3 214.1 51.0 10.3 2244.2 13.3 6.5 6.1 43.4 33.0 32 4.2 14.0 56.3 7136.6 55.8 2348.1 164263

193 644.0 660 32.6 4060.8 15.1 12.6 200.3 568. 10.0 3400.2 13.3 6.7 63.6 43.6 36.3 3.3 4.3 14.1 6016.6 11070.2 50.7 2454.1 1040A

1904 670.0 6o6 32.0 4304.5 12.2 343.7 60.0 10.2 3040. -1.s 6.4 66.2 45.6 30.4 3.3 4.5 14.2 D00.0 12117.7 -6.0 2361A 23042.2

1011 2 02.0 6o.0 32.0 566.0 Go 13.0 200.7 60.0 102 4054.4 e4.7 7.1 67.6 46.4 42.2 3.4 4.6 14.3 S355 16706.4 206. 25463 23096.Y

1096 67n.0 60.0 32.0 6171.6 1303 15.4 342.7 60.0 10.2 5517.0 133.5 9.6 67.7 46.6 46.3 3.6 4.8 14.4 96712 10O6 6o. 3541. 3309.

"97 671.0 60.0 32.0 7650.7 213.0 16.6 335.7 60.0 10.2 O63.1 211.7 10.7 71.3 40.0 48. 3A.6 4.0 14.6 100062 24348.3 1043.6 4132.0 39624A

Iw9 671.0 60.6 32.0 7660.7 213.0 16.6 336.7 60.0 1012 60.1 211.7 10.7 713 40.0 48.8 3.6 4. 14.6 10W062 24343.3 1043.6 4132.0 30124A

199 671.0 60.6 32.0 7560.7 213.0 16.6 336.7 60.0 1012 60.1 211.7 10.7 713 40.0 48.8 3.6 4.0 14.6 100062 24343.3 1043.6 4132.0 362430

2000 671.0 60.0 32.0 7660.7 2130 16.6 336.7 60.0 1012 6.1 211.7 10.7 712 40.0 48. 3.5 4.0 14.6 100061 24348.3 1043.6 4132.0 30643

200 671.0 60.0 32.0 7660.7 213.0 16.6 336.7 60.0 10.2 601 211.7 10.7 71.3 40.0 48.6 3.5 4.0 14.5 100052 24S43.3 1043.6 4132. 3624*

2005 671.0 0. 32.0 7560.7 213.0 16.6 336.7 60.o 1012 6361 211.7 10.7 71.3 40.0 4.3 3.6 4.0 14.6 100062 24343.3 1043.6 4132.0 39243

2004 671.0 60.0 32.0 7560.7 213.0 10. 336.7 60.0 1012 6.1 211.7 10.7 71.s 40.0 48.8 3.5 4.0 14.6 100012 243433 1043.0 4132.0 6243

2096 671.0 60.0 32.0 7560.7 2130 16.o 335.7 60.o 1012 63.1 211.7 10.7 713 40.0 43.8 3.6 42 14.6 100052 24343.3 1043.3 4132.0 3964

2000 671.0 60.0 32.0 7560.7 2133 16.6 338.7 6D.0 102 6806.1 211.7 10.7 713 40.0 43.8 3.6 43 14.6 100052 24343.3 1043.6 4132. 3106143

207 671.0 60.O A2.0 7660.7 213.0 16.6 336.7 60.0 10.2 30s.1 211.7 10.7 713 49.0 4.3 3.6 4. 14.6 100062 24343.3 10433 4132. 396243

2006 671.0 60.0 32.0 7660.7 2130 16.6 336.7 60.0 10.2 6806.1 211.7 10.7 713 40.0 48.8 3.0 4.0 14.6 100052 24348.3 104S3 4132.0 36243

2000 671.0 60.0 32.0 7660.7 213O 16S. 336.7 60.0 1012 6S8.1 211.7 10.7 71.3 40.0 48.8 3.6 4.0 14.5 100062 24343.3 1043.6 4132A 39624

20o 671.0 60.0 32.0 7660.7 2133 16.6 336.7 60.0 101 680.1 211.7 10.7 713 40.0 48.8 35 4.0 14.6 100052 24343.3 1043.6 4132.0 36243

20,11 6713 6.03 3S2.0 7550.7 2133 16.6 J36.7 60.0 10o2 69.1 211.7 10.7 713s 40.0 43.8 3.6 42 14.5 100062 24343.3 1043.6 4132.0 3354.2012 67130 60.0 32.0 756.7 2133 163 335.7 60.0 101 6306. 211.7 10.7 71.3 40.0 4338 3.5 439 14.5 1000512 24343.3 11043.6 4132. 3663432012 e71A MA o o 7Me.7 21ao 10S MY 0 O.O 10.2 WWI 211.7 10.7 71J 40.0 48 - SA. 4n 14.5 10D00612 24a4& 104ao 41SLO UN

"DEAl ooesew ie ut 10pd.eleI&arw: EBAT

Aowx 10- 45 -

THILANDPOWER SYSTEM DEVELOPMENT PROJECT

RATE OF RETURN ON EGAT'S POWER DEVELOPMENT PLAN(US.$ Million)

Fiscal Cost Stream Benefit Stream A_ i,tomade 1Year Capital O&M Fuel Tobl -icrema2a Avenge Sellng Price Sale XdJugmm

Cost Cost Coat coo Enrgy (c/kWh) Revenue oA . MM

Sales Current onstantIpcto _______ _______ _______(GWh) Price rPriceVA

198319841985 26.7 26.7 (26.7)1986 48.0 48.0 (48.0)1987 160.0 160.0 (160.0)1988 195.5 96.5 292.0 3,648.7 4.87 5.93 216.4 (75.6)1989 440.1 9.8 155.3 605.2 7,766.4 4.85 5.69 441.3 (10.3)1990 940.3 24.8 329.0 1,294.0 13,524.0 5.06 5.63 761.3 (S32.3)1991 1,198.5 57.1 577.4 1,833.1 18,928.4 4.83 5.07 959.1 (874.0)1992 988.0 72.1 593.3 1,653.4 24,950.2 4.70 4.70 1,172.4 (431.1)1993 1,157.6 91.0 750.0 1,998.5 30,488.2 4.73 4.50 1,372.9 110.4 (515.2)1994 1,349.8 113.9 920.9 2,384.5 36,291.2 4.77 4.32 1,569.0 150.7 (664.3)1995 1,183.5 132.2 1,080.6 2,396.3 42,684.2 6.00 5.18 2,212.9 (183.4)1996 532.7 157.2 1,271.6 1,961.5 49,368.2 6.37 5.24 2,585.5 624.01997 339.7 233.2 1,520.2 2,093.1 55,791.2 6.97 5.46 3,046.8 953.71998 337.7 235.9 1,520.2 2,093.8 55,791.2 6.97 5.46 3,046.8 953.01999 185.6 235.9 1,520.2 1,941.7 55,791.2 6.97 5.46 3,046.8 1,105.12000 62.1 235.9 1,520.2 1,818.1 55,791.2 6.97 5.46 3,046.8 1,223.72001 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72002 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72003 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72004 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.7

2005 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72006 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72007 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,WO.72008 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72009 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,2.72010 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72011 235.9 1,520.2 1,756.1 55,791.2 6.97 5.46 3,046.8 1,290.72012 (2,265.9) 235.9 1,520.2 (509.8) 55,791.2 6.97 5.46 3,046.8 3,556.6

Tota 6,879.9 4,430.1 30,097.0 41,407.0 - 60,040.3 261.1 18,394.5

P.V.2 10 8,320.8 1,820.5 13,221.0 23,362.3 26,308.0 224.9 3,170.7

Economic Internal Rate of Return = 15.82%Noto ad Automatic adjuamit mechanm of prums uriff ucturs Is allowed for the adjuman on the impac of VAT.

b/ All costs am baed on 1992 price level.c/ Preem value is caculated with 1992 ban year.d USD 1.0 - 26.0 THB.

Source: EGAT

-46 -

THAIIANDPOWER SYSTEM DEVELOPMENT PROJECr

RATE OF RETURN OF BANG PAKONG COMBINED CYCLE POWER PROJECT(US.$ Million)

_ _ _ _ _ _ _ .1 aI _ _ _ _b/

Fical Investment Costs O&M Fuel Total Energy Enorgy Average Total i A bYear Power Trans. Total Cost Cost Cost enerution Sale SeHing Revenue

Plant System (GWh) (GWh) PnceBlocks (c/kWh)#3-4 _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _

19841985198619871988 1.7 1.7 1.7 (1.7)1989 57.8 4.9 62.7 62.7 (62.7)1990 239.4 21.3 260.7 0.8 12.1 73.6 326 316.4 5.63 17.8 (5.8)1991 71.3 71.3 4.5 67.3 143.1 2,236 2,168.8 5.07 109.9 (333)1992 13.6 13.6 7.8 80.2 101.6 3,070 2,977.9 4.70 139.9 3831993 11.1 62.0 73.2 3,345 3,244.7 4.50 146.1 72.91994 11.1 83.2 94.3 4,300 4,171.0 4.32 1803 8601995 11.1 84.8 96.0 4,300 4,171.0 5.18 216.2 120.31996 11.1 85.0 96.1 4,300 4,171.0 5.24 218.4 122.31997 11.1 89.5 100.6 4,300 4,171.0 5.46 227.3 127.11998 11.1 89.5 100.6 4,300 4,171.0 6.01 250.7 150.11999 11.1 89.5 100.6 4,300 4,171.0 6.88 237.2 136S2000 11.1 89.5 100.6 4,300 4,171.0 7.27 303.2 2252001 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32002 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.82003 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32004 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32005 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.12006 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32007 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32008 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.12009 11.1 89.5 100.6 4,300 4,171.0 7.73 322.4 221.32010 (10.3) (10.3) 11.1 89.5 90.3 4,300 4,171.0 7.73 322.4 232.1

P.V.10 461.2 30.5 491.7 105.1 866.0 1,462.8 1 _ 2,371.9 909.2

Economic Rate of Retun = %Note.: a/ O&M and fud co of fiscal year 1990 to 1992 are bsd oac ul record of powr plants. Deembe 9.1993

b/ Assumed matim sevice low of 2% and transmsi losa of 1%.cl All coat ar b_don 1992 price leveld/ Premt value is calulated with 1992 ba year.e/ USD 1.0 - 26.0 THB.

Source: EGAT

- 47 -

Amx 2

THAILANDPOWER SYSTEM DEVELOPMENT PROJECT

CALCULATION OF NETBACK VALUE Of LIGNITE

Fiscal Coal-Based Genertion Costs ignito-Eauot Genertion CostsYoar Coal Energy Capacity Total Capacity Infored Noi*ick

Price Charge Charge Gen. Charge Energy V4,w(USDiTo) (c/kWh) (c/kWh) Cost (c/kWh) Charge of

(c/kWh) (c/kWh) (aL

1987 Plant Cintal Cost (USD/lkcW1988 - Coal 112S.01989 52.58 1.80 1.89 3.68 1.49 2.19 27.32 - Lignite 888.01990 53.05 1.81 1.89 3.70 1.49 2.21 27.52 Pbnt Heat Rate (kal/kWh)1991 53.52 1.83 1.89 3.72 1.49 2.23 27.72 - Coal 2274.01992 54.00 1.85 1.89 3.73 1.49 2.24 27.92 - Lignite 2410.01993 54.48 1.86 1.89 3.75 1.49 2.26 28.13 Hoatin Valuo&1kE)1994 54.96 1.88 1.89 3.76 1.49 2.28 28.33 - Coal 6653.01995 55.45 1.90 1.89 3.78 1.49 2.29 28.54 - Lignite 3000.01996 55.95 1.91 1.89 3.80 1.49 2.31 28.751997 56.45 1.93 1.89 3.82 1.49 2.33 28.97 IEd Factor 75%1998 56.95 1.95 1.89 3.83 1.49 2.34 29.181999 57.46 1.96 1.89 3.85 1.49 2.36 29.39 O&M Cost (X of Plant Cost)2000 57.98 1.98 1.89 3.87 1.49 2.38 29.62 - Coal and Lignite 3.02001 58.50 2.00 1.89 3.89 1.49 2.40 29.84 - Transmision Systm 1.52002 59.02 2.02 1.89 3.90 1.49 2.41 30.062003 59.55 2.04 1.89 3.92 1.49 2.43 30.28 Lismite Mine Loss Factor 3 %2004 60.09 2.05 1.89 3.94 1.49 2.45 30.512005 60.63 2.07 1.89 3.96 1.49 2.47 30.742006 61.17 2.09 1.89 3.98 1.49 2.49 30.97

Note: a/ Excluding taxes and IDC .b/ All costs are based on 1992 price level.c/ Present value is calculated with 1992 base year.

Source: EGAT

- 48 -

mx 13

TNRADPOWER SYSTEM DEVELOPMENT PROJECr

RATE OP RETURN OF MAE MOH UGNITE EXPANSION PROlECl UNITS 89(USD MilLion)

Fiscal C and O&M Cost Electricity Lignite Tranfer Value Total Benefit Not Cas FlowYear Lignite Power Toal Gmorated Rquirem Price of Mine Mine an Mine Min and

Mine Plants (OWh) (MTon) of Electricity Alone Power Almo Power& Lipite Generated Plant Plat

_ ____ Trans.Sys. (USD/Tra) (c/kWh) a/191419t5 1.00 1.00 (1.00)19U 10.03 10.03 (10.03)19t7 74.36 74.86 (74.16)191 1.93 229A1 231.34 (1.93) C231.34)1919 6.01 195.20 201.21 525 0.42 27.32 5.69 11.36 27.48 5.35 (173.73)1990 30.41 30.34 60.75 3,300 2.71 27.52 5.63 74.49 170.90 44.0 110.151991 66.26 51.53 117.79 4,321 3.67 27.72 5.07 101.78 201.42 35.52 U3.631992 25.43 15.16 41.30 4,353 3.56 27.92 4.70 99.27 18.16 73.33 14.861993 44.98 15.86 60.85 4,381 3.58 28.13 4.50 100.64 181.49 55.66 120.6S1994 42.06 15.56 57.92 4.205 3.43 28.33 4.32 97.29 167.25 55.23 109.331995 38.22 15.56 54.08 4,205 3.43 28.54 5.18 98.01 200.57 59.79 146.491996 36.57 15.56 52.43 4,205 3.43 28.75 5.24 98.74 202.60 62.17 150.171997 41.69 15.56 57.55 4,205 3.43 28.97 5.46 99.47 211.27 57.73 153.711998 43.52 15.56 59.38 4,205 3.43 29.18 6.01 100.20 232.56 56.6 173.171999 31.82 15.36 47.68 4,205 3.43 29.39 6.88 100.94 266.35 69.13 215.672000 37.12 15.86 52.98 4,205 3.43 29.62 7.27 101.70 281.20 64.5 228.222001 48.46 15.36 64.32 4,205 3.43 29.84 7.73 102.46 299.07 54.00 234.742002 41.33 15.86 57.19 4,205 3.43 30.06 7.73 103.22 299.07 61.90 241.U2003 40.23 15.36 56.09 4.205 3.43 30.28 7.73 104.00 299.07 63.77 242.972004 38.03 15.36 53.90 4,205 3.43 30.51 7.73 104.79 299.07 66.75 245.172005 39.13 15.56 54.99 4,205 3.43 30.74 7.73 105.57 299.07 66.44 244.072006 39.56 15.86 55.73 4,205 3.43 30.97 7.73 106.36 299.07 66.50 243.342007 33.83 15.56 49.69 4,205 3.43 30.97 7.73 106.36 299.07 7253 249.37200 30.35 15.t6 46.22 4,205 3.43 30.97 7.73 106.36 299.07 76.01 252.852009 28.53 15.86 44.39 4,205 3.43 30.97 7.73 106.36 299.07 77.34 254.f2010 28.71 15.86 44.57 4,205 3.43 30.97 7.73 106.36 299.07 77.65 254.492011 26.88 15.86 42.74 4.205 3.43 30.97 7.73 106.36 299.07 79.48 256.322012 25.42 15.86 41.28 4.205 3.43 30.97 7.73 106.36 299.07 80.95 2S7.78315 23.95 15.86 39.82 4,205 3.43 30.97 7.73 106.36 299.07 8241 259.25

Economic Rate of Return iJNj"j a/ Asumed tatce service ton of S % and nramissicatu of 3 9. Deoer 14,1993

b/ AU coct ae based an 1992 pri.m levl.

c/ Premz value i clcuad with 1992 baa year.Source: EGAT

- 49 -

Annex 14

ACTUAL INVESTMENT COST OF PROJECT(Based on Economic Cost Without Taxes and IDC.)

Bana Pakona Combined Cycle Blocks 3-4Unit: USD Million

Fiscal Current Price 1992 Price Level IndexYear F.C. L.C. Total F.C. L.C. Total F.C. L.C.

1988 0.02 1.38 1.40 0.02 1.68 1.70 1.163 1.2171989 37.48 10.40 47.88 45.58 12.19 57.77 1.216 1.1721990 174.56 46.12 220.68 188.11 51.32 239.42 1.078 1.1131991 54.06 14.61 68.67 56.01 15.34 71.35 1.036 1.0501992 10.72 2.91 13.63 10.72 2.91 13.63 1.000 1.000Total 276.84 75.42 352.26 300.43 1 83.44 383.87 _

Transmission System for Bana Pakona Combined Cycle Blocks 3-4Unit: USD Million

Fiscal Current Price 1992 Price Levei InreXYear F.C. L.C. Total F.C. LC. Total F.C. LC.

1988 0.00 0.00 0.00 0.00 1.163 1.2171989 1.05 3.09 4.14 1.28 3.62 4.90 1.216 1.1721990 4.92 14.40 19.32 5.30 16.02 21.32 1.078 1.1131991 0.00 0.00 0.00 0.00 1.036 1.0501992 0.00 0.00 0.00 0.00 1.000 1.000Total 5.97 17.49 23.46 6.58 19.64 26.22 _ _

Mae Moh Mine Expansion for Units #8-9Unit: USD Million

Fiscal Current Price 1992 Price Level IndexYear F.C. L.C. Total F.C. L.C. Total F.C. LC.

1988 1.58 1.58 0.00 1.93 1.93 1.163 1.2171989 5.13 5.13 0.00 6.01 6.01 1.216 1.1721990 7.28 20.28 27.56 7.84 22.57 30.41 1.078 1.1131991 21.37 42.02 63.39 22.14 44.12 66.26 1.036 1.0501992 5.33 20.11 25.43 5.33 20.11 25.43 1.000 1.000Total 33.98 89.12 123.10 35.31 94.73 130.04 _

Source: EGAT

- 49 -

Annex 14

ACTUAL INVESTMENT COST OF PROJECT(Based on Economic Cost Without Taxes and IDC.)

Bana Pakona Combined Cycle Blocks 3-4Unit: USD Million

Fiscal Current Price 1992 Price Level IndexYear F.C. L.C. Total F.C. L.C. Total F.C. L.C.

1988 0.02 1.38 1.40 0.02 1.68 1.70 1.163 1.2171989 37.48 10.40 47.88 45.58 12.19 57.77 1.216 1.1721990 174.56 46.12 220.68 188.11 51.32 239.42 1.078 1.1131991 54.06 14.61 68.67 56.01 15.34 71.35 1.036 1.0501992 10.72 2.91 13.63 10.72 2.91 13.63 1.000 1.000Total 276.84 75.42 352.26 300.43 83.44 383.87 _

Transmission System for Bana Pakono Combined Cycle Blocks 3-4_Unit: USD Million

Fiscal Current Price 1992 Price Level IndexYear F.C. L.C. Total F.C. LC. Total F.C. LC.

1988 0.00 0.00 0.00 0.00 1.163 1.2171989 1.05 3.09 4.14 1.28 3.62 4.90 1.216 1.1721990 4.92 14.40 19.32 5.30 16.02 21.32 1.078 1.1131991 0.00 0.00 0.00 0.00 1.036 1.0501992 0.00 0.00 0.00 0.00 1.000 1.000Total 5.97 17.49 23.46 6.58 19.64 26.22 _ _

Mae Moh Mine ExDansion for Units #8-9Unit: USD Millon

Fiscal Current Price 1992 Price Level IndexYear F.C. L.C. Total F.C. L.C. Total F.C. LC.

1988 1.58 1.58 0.00 1.93 1.93 1.163 1.2171989 5.13 5.13 0.00 6.01 6.01 1.216 1.1721990 7.28 20.28 27.56 7.84 22.57 30.41 1.078 1.1131991 21.37 42.02 63.39 22.14 44.12 66.26 1.036 1.0501992 5.33 20.11 25.43 5.33 20.11 25.43 1.000 1.000Total 33.98 89.12 123.10 35.31 94.73 130.04 _ -

Source: EGAT

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