RESTRICTED Report No. AE-26 rmLE COPfY This report is for of ficial use only by the Bank Group and specifically authorized organizations or persons, It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE ECONOMIC DEVELOPMENT AND PROSPECTS OF TANZANIA (in four volumes) VOLUME IV A PROGRAM OF PREINVESTMENT STUDIES POWER - TOURISM - URBAN/REGIONAL DEVELOPMENT AND HOUSING June 22. 1972 Eastern Africa Department CURRENCY EQUIVALENTS 1 Tanzanian Shilling = U.S.$0.14 1 U.S. Dbllar S 5h 7.14 This report is based on the findings of a mission which visited Tanzania during August/September 1971. The mission consisted of the following: Messrs. Lyle M. Hansen (mission Chief); Pieter Bottelier (general economics); John Cleave (agriculture); Andrew Hayman (tourism); Esref Erkmen (power); Raimundo Guarda (consultant on housing and urban development). TABLE OF CONTENTS VOLL-E IV A PROGRAM OF PREIUNESTMEWT STUDIES POg.WER - TOURISM1 - URBAN/REGIONAL DEVELOP'ENT AND HIOUSIN3C Pa, e wNo INTRODUCTION ............ I 1. PO2TR .................2 Background .................................................... 2 Developmcent Strategy and Initiated Preinvestment Stulies ...... Proposed Preinvestnent Study - Kidatu Second Stage Development. 4 Alter-native I ............5 . 5 Alternative II ................................................ Preinvestment Study Proposal Data Sheet ....................... 6 II. TOUIRISM ...8................................................... Backgroundi and K'ey Isstues ..................................... 8 Proposed Preinvestment Stuidies ................................ 9 List of Proposec. StudiCs ....... . . . 10 Preinvestment Stud'-y Proposoal Data. SheCLs ...... . . . . . . . . . . . . . . . 11 ITI. UIVR7AT/RKCIONAL DvEVELO?"'T.T A'TD E'OUSI`IC ........................ 23 3ackgrounm ................................ ........... . . 23 Government PolicV ar,d Prau-^rar!s .............................. 24 Centrtl Issus ............................................ 24 Thle Prooscr' Stuv d.................................... 24 Prirnvestrneat Stud", Propost:- Data Shcets ...... ................ 26 INTRODUCTION 1. This volume presents a program of preinvestment studies for three sectors in Tanzania. The program has been prepared by a Bank mission in cooperation with the Ministry of Finance, the Ministry of Development Planning, various ministries and agencies of the Government of Tanzania, and the Resident Office of the UNDP in Dar es Salaam. This report on three sectors completes the design of preinvestment studies for ten sectors in Tanzania initiated in 1970. The conclusions for the first six sectors were reported in the Bank report entitled, "Economic Development in East Africa", volume III (dated July 30, 1971). That report also outlined the objectives, methods and criteria of selection for preinvestment studies, and the reader interested in the details should refer to that volume. 2. There is no formal report being made on preinvestinent studies on the water supply and sewerage sector as it was the judgment of the Hank mission, concurred with by the Tanzanian authorities, that past, existing and planned studies adequately cover the requirements in this sector. - 2 - CHAPTER I POWER (Sector No. 5) Background 1. In Tanzania the public power supplies dominate the sector account- ing for more than 80% (i.e. 122 MW) of the total installed generating capac- ity. The remaining 28 M4 of total installation is owned by various indus- tries mostly situated in remote parts of the country, far from any public sources of supply. The Tanzania Electric Supply Company Limited (TANESCO), all of whose shares are owned by the Government, holds licences for the public supplies of power in all the electrified regions which cover most of the important population centers of the country. These licences are being extended from time to time to cover other and less important, regions as the electric service is extended to such areas. TANESCO is an efficiently run organization, enjoying a high degree of autonomy. 2. TAINESCO has an interconnected power system operating at 132 kV in the coastal region between Dar es Salaam, Tanga and Morogoro. This system accounts for 71% of the company's installed generating capacity, 63% of its 54,000 electricity consumers and 78% of its total 1970 sales of 341 million kWh. These figures reflect the concentration of urban population and gen- eral economic activity in the coastal region. Other population centers with considerable economic activity include the Moshi-Arusha area in the foothills of Mount Kilimanjaro with an installed capacity of 15 M;4, and the Mwanza area in the Lake Victoria region (7.5 MW). The Mbeya-Tukuyu area in the South-Western region (0.66 M;) is a center with considerable development po- tential. Twelve other population centers have public supplies of electric- ity, with generating equipment ranging from 145 to 2175 kW of installed capacity. 3. Hydroelectric power plant owned by TANESCO has a total capacity of 48 11J, consisting mainly of 17.5 MW at Pangani Falls, 21 MW at Hale and 8 !SI at Nyumba-ya-Mungu. All these stations are on Pangani River, the first two feeding into the coastal system and the other into the Moshi-Arusha system. A small hydroelectric station of 1.2 MW located at Kikuletwa on a tributary of the Pangani River also supplies Moshi-Arusha system. Another small hydroelectric plant of 0.34 MW on the Mbeya River is supplying Mbeya town. The remaining 71.8 MW capacity owned by TANESCO is provided by about 85 diesel generating sets, at 19 different locations. These units varv in size from 35 kW to 6100 kW. Under a Bank Loan the Ubungo diesel station in Dar es Salaam is now being extended by two 7.5 MN units, and a hydroelectric station comprising two units of 50 MW capacity is being constructed at Kidatu on the Great Ruaha River as the first stage development of the total scheme. Further development of the scheme involves the addition of two other units of the same size at two stages, one to be commissioned in 1979 and the other in 1982. Development Strategy and Initiated Preinvestment Studies 4. The development strategy for the public supply of electricity for the next 15 years is set out and most of the preinvestment studies necessary for the major investment decisions in the next five years are identified and initiated by TANESCO. In the following paragraphs the salient features of this strategy will be given together with a short review of the already initiated major studies. 5. TANESCO completed in 1970 a study covering the technical, econo- nLical and financial feasibility of an interconnection between the Coastal and the Moshi-Arusha Systems. On the basis of that study it has already negotiated a loan from CIDA to cover the construction of this interconnection. The final studies leading up to the detailed designs and to the preparation of contract specifications are planned to be started by TANESCO immediately following the effectiveness of this loan. 6. The increasing power demand in the large interconnected power sys- tem formed by this interconnection will be met, up to the year 1979, by the existing power generation facilities in the two regions and by the output of the Kidatu First Stage Development under construction. According to the present plans, further needs of this system beyond that date are to be cov- ered by constructing the second and third stages of the Kidatu Scheme for which only a preliminary investigation was included in the preinvestment study undertaken in 1969 for the first stage of the development. A final study for the second stage is hereby recommended and it should be completed within the following three years if a shortage of power in the Coastal System is to be avoided beyond 1979. (See paragraph 13). 7. The future power requirements of the Lake Victoria region includ- ing the towns of Mwanza, Bukoba, and Musoma and the available means of meet- ing these requirements are being investigated under the Kagera River Basin Study recently started under U.N.D.P. Technical Assistance Project. This project jointly undertaken for the Governments of Rwanda, Burundi and Tanzania is a predominantly irrigation scheme, but also contains the devel- opment of a very important hydroelectric element. 8. The requirements of the Mbeya and Tukuyu region are planned to be covered by the proposed Kiwira Project for which the final studies are ex- pected to be started by a team from USSR in a very short time. 9. Finally, an important preinvestment study is already underway for a hydroelectric scheme at the Stiegler's Gorge on the Rufuji River intended mainly for the development of power intensive industries in the country by making use of the tremendous power potential (estimated to be about 600 MW firm) at the mentioned site which can economically be developed only for very large consumption levels presently beyond Tanzania's normal require- ments. 10. The requirements of the remaining regions are being regularly surveyed and reviewed by TANESCOts own staff, and the necessary provisions - 4 - are being included in the yearly investment programs. These surveys include also the extension of electric service to some smaller townships or villages, but within the limitations of the Government's Directive for operating under commercially and economically viable conditions, and in accordance with the exigencies of the national economic plan. Proposed Preinvestment Study - Kidatu Second Stage Development 11. A Study Sheet for the recommended preinvestment study is attached. Brief coTments on this Study are the following. 1;2. The civil engineering works presently under construction for the Kidatu First Stage Development are adequately dimensioned to accommodate the requirements of the second and third stage development. The second stage therefore involves only the construction of a low head regulating dam at Mtera, about 175 km upstream of Kidatu, and the installation of further turbo-alternator sets at the Kidatu Power Station. 13. The preinvestment study prepared in 1969 for the first stage dev- elopment includes only the preliminary investigations for the second stage development. An advanced study has therefore to be undertaken to update and complement this study so that the detailed designs and cost calculations can be prepared before the financial arrangements can be undertaken. Allow- ing about four years for these arrangements and the construction of the proj- ect would make it advisable for the advanced study to be completed before 1975. (See paragraph 5). 14. This advanced study involves the consideration of two different sclutions for Mtera dam as explained below: The original dam site at Mtera proposed in the preliminary investi- gations was selected on the basis of the geologic and topographic conditions which would give the required volume of reservoir for over-yearly regulation at the cheapest possible cost. However, the topographic conditions around this site are such that an alter- native site about 10 -- 12 km downstream may be chosen resulting in somewhat greater cost due to the relocation of about 40 km of the Dodoma-Iringa road, but providing the benefit of creating a possi- bility for the future use (beyond second and third stage development) of a sudden drop in the river bed elevation for the generation of about 100 MW of power at the Mtera dam area. This possibility can be ascertained by a small study (initial check) which would cost about 50,000 Tanzanian Shillings and should be undertaken as soon as possible with finances from TANESCOTs own resources. This initial check would show whether the alternative site may be discarded at the outset or whether it is worthy of further investigation in de- tail together with thie original site to lead to the selection of the most attractive solution. Therefore, the proposed preinvestment study for the second stage development of the Kidatu Project may consist of one of the two alternatives described below, depending on the outcome of the initial check mentioned above. -5 Alternative I Updating the existing study in relation to initially selected site and completing the necessary borehole drillings, aerial surveys, ground survevs and soil investigations, anti updating the designs and cost calculations in sufficient detail to enable the prepara- tioti of contract specifications. Alternative II In addition to the above work, conducting the necessary field investigations in relation to topography, geology and soil mechanics, including aerial and ground surveys, borehole drill- ings, seismic measurements, road relocations, transmission line routings, etc. for a darn and power station at Mtera alternative site; comparing such a development with the originally conceived arrangement, and preparing the designi of selected solution with sufficient detai.l. and accuracy required for the prepiration of contract specifications. Fopm Na. 386 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE Ilt-691 ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORAT ON PREINVESTMENI PROGRAM - STUDY DATA SHEET NO: 5 -1 i. IArea: Countr y: Sector(s): TAPZSANTA POTER 1. NAME OF PROPOSED STUDY: Final Feasibility Study for the Second Stage Kidatu Hydroelectric Devel. 2. PURPOSE: To determine the detailed technical, economic and financial feasibility of the Second Stage Development of the Kidatu Hydroelectric Scheme and to recommend ortimum design for the developrnent based on detailed cost estimates. '3. SCOPE: The Study should complete the necessary borehole drillings, aerial surveys, ground sur-veys, and soil investigations for the constraction of a low head dam at MItera, at the site already selected during the initial study ccnpleted in 1963, and should update this Study, the design and the cost calculations in sufficient detail to enable the preparaticn of the contract specifications. The scope may however, be enlarged to include the detailed| sLtudy of an anternative dam site and the determination of the least cost solution and its d resign pending the outcome of an initial small check to be undertaken by the Tanzanian Blectric Supply Company Limited wituhin the next few months. 4. BACQGROUND: (a) Related Studies (b) Other AvailaVe Data (c) Expected Data Problems '- Report on Mar'et for Electri- city iHterz Mc McLellan March 1 66 Supplementary Report May I968 ii) Electricity Dev. in Tanganyi`ka Coyne et Bellier 1966 (iii) Preliminary Study Balfour Peatty & Co. ct. 1967 Feasibility of Steam Generating Station 'lay 1967 7 TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date --ne yrear Second cart rC -?7 6. COh*WENT ON POTENTIAL STUDY SPONSORS: 7. PROJECT(S) EXPECTED TO RESULT FROM STUDY (If known): (a) Description (b) Estimated Investment (US$ equivalent) 5$'i M'Tt Second Stage Develcpment of' Yidatu ;ydroelectric Scheme (c) Financing Need and Potential Source 8. ORDER OF MAGNITUDE OF STUDY COST (US$ equivalent): 1 Sheet Prepared by: PE. Erti:e 1t255.000 or $535,000 depending on the *cce o work Dept. or Agency: ublic Utilities Projects described under (3) above Date: Niovember 1w 2 1I71 9. STAFF'S COMMENT ON PRIORITY RANKING OF STUDY: Sheet Revised by: The Study is of the highest priority sinice it is Item(s) Revised: l related to the most important power consuming region Dept. or Agency of Tanzania. _ _ Date: - 7* - .Rv No. 386.01 INTERNATIOtJAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE 1-691 ASSOCCI 4r' yu RECONSTRUCTIrO AND DEVELOPMENT CORPORATION PREINVESTMENT PROGRAM - STUDY DATA SUPPLEMENT No. 552(I } (to be filled in when possible) 1. TENTATIVE STAFFING Type of Specialist Number on Tear -otal Man-hbrtins (a) Foreign Professional Staff: Alt. fIt. lr TKappi ng _ - Hydrology 2 2 Geology 1 3 Seismic Investigation . 6. Soil Mechanical Investigation 4.... 1 Road Studies ..................... Transmission line studies ........ Project k Design work ............____________ I 1_- I t i Total _ 20 26 (b) Local Professional Staff (c) Local Supporting Staff 2. TENTATIVE STUDY BUDGET (US$ equivalent) Foreign Local Total () Equipment&.00Currency Currency (a) Professional Staff Costs Cu c C300 285. ED&Y| (b) Equipment 2 Drilling 6a' Coo 8, | (c) Other (Travel, non-prof. staff, etc.): 25,0oc0 1 70J.0r0| (d) Total 1 55 S '4(419 3. OTHER COMMENTS Continued from.... 1(1~ - Item b - Dackwrcund (iv) Wariu River Poer Development - S1ICED - Oct. i'6 (v) Hydroelectric Development on Great Ruaha River - Balfoaur Peattv% - Nay 1 6,!) 7 r (vi) Comparative Study - SWECO & Balfcur Beatty - JuLy 1.'y63