THE WORLD BANK GROUP ARCHIVES PUBLIC DISCLOSURE AUTHORIZED Folder Title: Guri Hydroelectric Project - Venezuela, Republica Bolivariana de - Loan 0353 - P008181 - 1967 / 1962 Negotiations - Volume 1 Folder ID: 1614829 Project ID: P008181 Dates: 3/26/1957 - 12/27/1962 Fonds: Records of the Latin America and Caribbean Regional Vice Presidency ISAD Reference Code: WB IBRD/IDA LAC Digitized: 9/17/2019 To cite materials from this archival folder, please follow the following format: [Descriptive name of item], [Folder Title], Folder ID [Folder ID], ISAD(G) Reference Code [Reference Code], [Each Level Label as applicable], World Bank Group Archives, Washington, D.C., United States. The records in this folder were created or received by The World Bank in the course of its business. The records that were created by the staff of The World Bank are subject to the Bank's copyright. Please refer to http://www.worldbank.org/terms-of-use-earchives for full copyright terms of use and disclaimers. M THE WORLD BANK Washington, D.C. @ International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org PUBLIC DISCLOSURE AUTHORIZED .. ..... .. ... . ...... I... .. 1614829 A1995-113 Otherk 17 '1170000B Hydroelectric Project - Venezuela, Republics Bolivariana de - Loan 03 Volume i Elm siga .. .. .... .. .. .. .. .. .. ... .... ...... P M M ai . .. jis ........ .. .. ... .. .. .. . .. ... ag sa-: . ...... M.................. ........... ... ......... . . ...... ... . . ..... . . .. -_-_-_-- . ....... ................ ...... . .......... .... ... .. jo; ........... .. .. . ... . .. ........... iff _ I g a l: ........... 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VOLUME I - to December 1962 If lacking in power, please see file - VE - CADAFE Expansion Program (including transmission line) T- CORPORACION VENEZOLANA DE GUAYANA Caracas, Venezuela 27 December 1962 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D.C. Gentlemen: Early in November 1962, three copies of the confidential draft report on the Guri Project that was prepared by your Technical Operations Department were delivered to our offices. At that time, the Bank stated that it wished to know our reaction to the opinions expressed by the Technical Operations Department on the Guri Project. We greatly appreciate this opportunity to comment on the above-mentioned report. We feel that, on the whole, the economic evaluation of the Guri Project that was prepared by your technical experts is reasonable and correct. There is, however, one basic point on which we do not agree. We refer to the Caracas load. I. THE CARACAS LOAD (1) Under "Conclusions", (Chapter V, paragraph 59, page 16) you state that the Ouri Project should not be started until a definitive agreement has been reached regarding standardization of the Caracas frequency and integration of the Caracas load with the national systems. (2) Nowhere in the report have we been able to find any justification for such a conclusion unless exclusion of the Caracas load were to result in interest rates lower than those indicated in your report, which would then be insufficiently attractive. (On page 15 of the report you estimate the interest for the higher loads at 8t%, and that for the lower loads at 7J%). (3) The 3/4% difference between the yield on the estimated higher and lower loads, gives some idea of the differences to be expected in the interest rates if the Caracas load is excluded. Indeed, as the difference between estimates of the higher and lower loads is approximately equal to the Caracas load (the increase envisaged for Caracas for the 1968-1980 period), it may be assumed that the reduc- tion in yield would be the same in both cases. In other words, exclusion of the Caracas load will lead to a decrease of some 3/4% in the yield. -2- (4) We note that, in your comparison, you did not include the cost of the spillway at 53 meters altitude (Bs. 60,000,000 at the rate of 3.35 bolivars to the dollar) in the alternative of thermoelectric plant. We think this item should be included if the comparison is to be based on a firm capacity 100% of the time, rather than only 90% of the time. This item alone would, at present valueg, in- crease the thermoelectric plant by Bs. 64,OOOO00 at an interest rate of 6% and by Ba. 58,000,000 at 10%. This presupposes that 25% of the investment in the spillway would be in the form of foreign exchatige to be paid during 1964, the second year of construction, and that the costs of operating and maintaining the spillway are those indicated in volume 1, Annex 8, of the Harza report. (5) Although it is difficult to ascertain exactly wh:t effect the spillway would have on the output as the work sheets are not yet available, we are inclined to believe that it would increase the yield from the Guri Project by approximately the same percentage (3/4%) as would be lost if the Caracas load were eliminated. The final result would be identical with that which you found. (6) Consequently, on the hypothesis that the yields that you have estimated are satisfactory, and aside from other considerations, we reach the conclusion that there is sufficient reason for the project, without including the Caracas load. (7) You yourselves confirm this condlusion indirectly when you infer, on page 17 of your report, that no appreciable difference would result if the loads were not increased markedly. In our opinion, the Caracas load would not contribute that increase. (8) We do not want you to infer from what we state above that the Caracas load is not important for the Guri Project and that we are not interested in it, as such an attitude would be absurd. The Caracas load is, indeed, important for the Guri Project, and we are very interested in it. We cannot agree, however, with the principle that the Caracas load should be the detisive factor in deciding whether to carry out the Guri Project. We believe that there are sufficient reasons for the latter, even without the Caracas load, although that load would render it even more desirable, which is a totally different matter. Such a conclusion becomes even more evident and correct if one considers the other factors which favor the alternative of a hydroelectric plant, such as: II. GAS PRICES, LOAD ESTIMATES AND COSTS OF A THRMOELECTRIC PLANT (a) Gas prices. On page 15 of Annex 1 of your report, you yourselves admit that the yields from the alternative of a hydroelectric plant would be apreciably higher -- from 8}% to 10% -- if the present sales price of gas is taken into account. Although we agree that the current price should not be considered in estimates and that, from a national standpoint, there may be some lgic in excluding from the estimate the cost of transportation to the central region, the statement on page 1 of Annex 2 is none- theless true, namely, that, for long-term contracts, it will be necessary to drill new gas wells inasmuch as it will not be possible to meet future gas needs from eTstent wells. Such being the case, and considering the problem from a national standpoint, it should be noted that gas, because of its alternative uses and the fact that it can be stored, has more value than that attributed to it in the report. - 3 - (b) Loads. We should like to explain that, although we submitted an estimate of loads =tough Harza (which agrees with your estimate), we believe that your projections are on the low side with regard to both the Central and Guayan Regions. (i) Central Region. We do not agree entirely with the mainer in which you prepared your estimate of the general load (Annex 1, pace 2) as you did not take into account the figures for historic growth. The following table will illustrate our comments. RATES OF GROWTH (1) Adopted by the World Bank SECTOR 1958-1961 1960-70 1970-1980 Residential 18 9 7 Commercial 17 6 6 Government & others (excluding INOS) 38 h h Sub-Total 25 6J 6 Industrial 18 10 10 (2) 12 12 (3) Notes: (1) the above data was obtained from Resumen de Estadisticas Anuales (Annua4 Statistical Summary) of CADAFPE and is applicable to sales in the Central and Carabobo regions. (2) Lower estimate. (3) Higher estimate. Average growth in the residential, commercial and governmental sectors (excluding INOS) for the three periods (1958-1959; 1959-1960; 1960-1961) was of the order of 25%. You estimated a rate of growth of oily 6i% for the 1960-70 period, and of 6% for 1970-1980. In the industrial sector, although average growth during the above three periods was 18%, your highest estimate indicates only 12%. Considering that the present growth ocdurred during a period of economic depression, one must conclude that your figures are obviously low. (ii) Guayana Region Aluminum. From October to the present, some progresa has been made in expanding the intial capacity of the aluminum reducing plant. Indeed, positive steps have been taken for the construction of a plant with a capacity for 100,000 tons, i.e. a demand of 200,000 kw. The enclosed letters in Annex I indicate the present status of those negotiations. (c) Costs of the Thermoelectric Plant. The unit cost of the thermoelectric plant seem low to us. You may be intereted to know that, at the Round Table, officials of Electricidad de Caracas expressed the opinion that the thermoelectric plant cost estimates of Sargent & Lundy are too low. The following points should also be mentioned: III. 230 KV MACAGUA-CARACAS POWER LINE Although we consider this matter settled, we should like to clarify the follow- ing points: (9) Under "Conclusions" (item 61, page 16) we do not see a very clear relation- ship between construction of the power line and the interconnection of the CADAFE/cvg systems with those of Electricidad de Caracas. (10) We refer to your Note No. 1 regarding the power line (page 10) which states that the reasons for the project are justified. (11) The reasons for the 230-kv power line project that have been submitted to the Bank up to the present, and with which we believe that you agree, do not envisage relating the power line with the Guri Project nor with the Caracas power load. (12) A previous report that was prepared by CVG, of which you have a copy, showed that, with or without the Guri Project, construction of the power line is fully justified. (13) On the other hand, the report of CADAFE dated 30 May 1962 also explained fully the advantages of interconnection. In the latter study, CADAFE did not even consider development of a hydroelectfic plant. (l) We are someihat surprised, therefore, to see that you make construction of the power line conditional upon integration of Electricidad de Caracas in the national systems. We would be pleased to try to dispel any doubts that you may feel regarding the power line, and the reasons which justify it with regard to the iuri Project or inclusion of the Caracas load. IV. STANDARD FREQUENCY (15) We should like to stade for the record that we consider interconnection of the CADAFE/CVG/Caracas systems to be desirable, and that interconnection should be made through a standard frequency of 60 cps. We also wish to state that we recognize the advantages offered by the additional Caracas load, provided that this is not considered as the justificatio of the Guri Project but, rather an additional advantage. - 5 - (16) We want to solve the problem of frequency withi Caracas as soon as, possible, and, to that end, we have met with the directors of CVG, Electricidad de Caracas, Cordiplan and CADAFE. A comrnission has been established to study the problem, and we are confident that we will succeed in working out an agreement on that question. For obvious reasons, all the parties are eager to arrive at a satisfactory solution, and, in View of that attitude, we do not foresee any difficulties. (17) The preliminary studies indicate that the savings that can be achieved by operating the CADAFE/CVG systems through interconnection with that of Electricidad de Caracas would be 2 to 4 times the estimated cost of a change of frequency in Caracas. The exact amount of savings will depend on the interest rate selected in order to defray the total investment and operating costs during the next 40 years. In other words, there appears to be very good reason for investing in a change of frequency. (18)We expect to confirm t ose results within about one month, inasmuch as, up to now, we have only completed in final form the individual study of the systems, a draft of which is enclosed as Annex 2, and we have not yet completed our study of the over-all interconnected system. We intend to take the following steps con- currently: (a) Study of a contract for sale of power to Electricidad de Caracas by CVG (b) Technical study of interconnection, of the distribution of resultant benefits, of detailed information on how the CADAFE/CVG systems can help the Electricidad de Caracas systems (which are changing over to a reserve of 60 cps), which plants will operate in the region after the Guri Project goes into operation, stability of the over-all system, etc. (19) You may be interested to know that we have re-examined the question of the location of the substation in Santa Teresa with the Chief Engineer who is in charge of the Electricity Department of the Harza Engineering Company and with engineers of CADAFE and Electricidad de Caracas, for the purpose of determining whether it shoi4d be relocated closer to Caracas now that an interconnection seems probable. As a result of that study, it has been decided that the present location of the sub- station at Santa Teresa is satisfactory. (20) You will no doubt appreciate that we are working very hard on the problem of interconnection with Caracas. We shall keep you informed of the progress of the studies that are under way, and would greatly appreciate your comments. V. INVITATICN TO 9ID FOR CONSTRUCTTDN OF THE G:JRI DAM (21) As you know, invitations were tendered for bids for constructiun of the Guri Dam, and considerable interest was expressed by well-known construction firms. Analysis of the firms which submitted bids was entrusted to a Commission con- sisting of four representatives of CVG, one representative of the Colegio de Ingenieros de Venezuela, one representative of the Venezuelan Chamber of Construction Industries, and one representative of the Office of the Comptroller General of the Republic. -6- The Harza Engineering Company will provide advisory services to the Commission. Annex 3 contains a list of firms which have submitted documents. We expect to contact the firms selected 1or submission of bids during the first week of Janrary. VI. ESTABLISHIENT 02 THE ELECTRIC POWER EIlTERPRISE Annex 4 contains a co:py of the draft statutes of the above-mentioned enter- prise that are being discussed at present. Very truly yours, (signed) Col. Rafael Alfonzo Ravard President Annexes: (1) 3 letters from Reynolds International, Inc. (2) Draft study of individual costs (3) List of firms bidding on Guri Project (h) Draft statutes of the Electric Power Enterprise. CORPORACION VENEZOLANA DE GUAYANA AVDA. LA ESTANCIA NO. 10 - PISOS 18 Y 14 AL CON~TSOAN SUPKRRRSU A: CIUDAD COMERCIAL TAMANACO TELEFS. 32.43.20 AL29 - DIR. CABLE. INVEHIERRO No - APARTADO 7000 CARACAS - VENEZUELA -- R Caracas 27 de Diciembre de 196 International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. Internat ation U. S. A. cnd Develo L IJL _ En los primeros dfas de noviembre de 1962 nos fueron entregados, en las oficinas de la CVG, tres copias del borrador confidencial sobre el proyecto de Guri, ela- borado por su Departamento de Operaciones Tdcnicas. En aquella oportunidad el Banco mencion6 su de- seo de conocer las impresiones de la C. V. G. sobre las opiniones que tiene el Departamento de Operaciones Tdcniv cas acerca del proyecto de Guri. Queremos agradecerles mucho la oportunidad de permitirnos darles nuestros comentarios al antes mencio- nado informe. En lineas generales creemos que la evaluaci6n econ6mica del proyecto de Guri, hecho por sus tdcnicos, es razonable y justa. Existe, sin embargo, un punto bdsico sobre el cual no estamos de acuerdo, y es el relativo a la carga de Caracas. I. CARGA DE CARACAS 1) Uds. dicen en la pig. 16, pdrrafo 59, capftulo v, Conclusiones, que el proyecto de Guri no debe co- menzarse hasta tanto no exista un acuerdo en firme para efectuar la unificaci6n de frecuencia de Cara- cas y la incorporaci6n de esta d'ltima carga a las redes nacionales. 2) En ninguna parte del informe hemos podido ver una justificaci6n que nos lleve a esta conclus16n a me- nos que sin Caracas se obtengan tasas de interds inferiores a las que se indican en el Informe (en la pig. 15, Uds. citan las cifras de 8 1/ 4 % y 7 1/2 %, para la estimaci6n de cargas superior e inferior respectivamente) y por consiguiente que no sean su- ficientemente atractivas. ~A~jk 14 )9 IE3 S3A S38 03A613 -2- 3) La reducci6n de 3/4 % entre los rendimientos obtenidos para las estimaciones de cargas superior e inferior, dan una idea acerca de la diferencia en las tasas de interds a esperarse si se excluye la carga de Caracas. En efecto, como la diferencia entre las estimaciones superior e inferior es aproximadamente igual a la car- ga de Caracas (la carga incremental de Caracas en el perodo 1968-1980) es de esperarse que se obbendrd una disminuci6n en el rendimiento del mismo orden de mag- nitud en ambos casos; Eaotras palabras, los rendimien- tos disminuirdn en aproximadamente 3/^ % al excluir la carga de Caracas. 4) En la comparaci6n hecha por Uds., hemos notado que no incluyeron el costo del vertedero a 53 m (BI 60 millo- nes con el $ @ 3,35) en la alternatva tdrmica. Consi- deramos que este rengl6n debe incluirse si se quiere hacer la comparaci6n basada en un criterio de potencia firme el 100 % del tiempo y no el 90 % del tiempo. Ese rengldn por sl solo essuficiente para afadir a la al- ternativa tdrmica entre 10 64 y 58 millones en valor ac- tualizado para tasas de interds del 6 al 10 % respecti- vamente (suponiendo que el 25 % de la inversi6n en el vertedero sean divisas, pagaderas durante el segundo afto de construccidn, 1964, y que los costos de opera- ci6n y mantenimiento del mismo son los que indica la Harza en su voldmen 1, anexo 8). 5) Aun cuando es dificil precisar el efecto que tiene el vertedero sobre los rendimientos, ya que no disponemos de sus hojas de trabajos, nos parece a primera vista que dicho efecto aumentard el rendimiento de Guri en apro- ximadamente el mismo porcentaje (3/4 %) en que puede ser disminuido debido a la eliminaci6n de la carga de Cara- cas. El resultado en definitiva, seria igual al que Uds. encontraron. 6) Si suponemos, por tanto, que los rendimientos obbenidos por Uds. son lo suficientemente buenos, independiente- mente de otras consideraciones, llegamos a la conclu- sidn de que el proyecto se justifica sin incluir la car- ga de Caracas. 7) Uds. mismos, de una manera indirecta, corroboran esa conclus16n al inferir en la pdg. 17 que no se obtendrIan diferencias apreciables en los rendimientos, si no se aumnentan sensiblemente las cargas. A nuestro entender, no es la carga de Caracas que aportarfa ese aumento sensible. 8) No queremos de lo antes expuesto, dejar en Uds. la im- presidn de que la carga de Caracas no es importante pa- ra Guri, y que no nos interesa, ya que eso serla absur- do. La carga de Caracas sf es importante para Guri, y nos interesa muchisimo, pero no podemos aceptar el prin- cipio de que ea la carga de Caracas la que decida en de- 0../ finitiva si Guri se hace o no. Creemos que el proyecto de Guri se 3ustifica sin la carga de Caracas, y que esa justificaci6n se acentda con dicha carga, lo que es una cosa totalmente diferente. Esa conclus16n se hace todavia mds palpable y acer- tada cuando uno considera los otros factores que afec- tan favorablemente la soluci6n hidroeldctrica, como: II. PRECIO DEL GAS, ESTIMACION DE CARGAS Y COSTOS TERMICOS a) El gas.- Uds. mismos reconocen (pdg. 15, anexo 1) que los rendimientos de la alternativa hidroeldctri- ca se mejorarfa sensiblemente -del 8 1/2 % al 10 %- si se considera el precio del gas al precio de venta actual. Adn cuando compartimos su criterio de que no debe emplearse el precio actual en la evaluacidn, y que posiblemente, desde el punto de vista nacional hay cierta l6gica en no incluir el precio de trans- porte a la region Central, no es menos cierta la afir- maci6n hecha en su pig. 1, anexo 2, de que serd nece- sario, para contratos a largo plazo, perforar nuevos pogos de gas, ya que no se podrdn obtener los futu- ros requerimientos de gas de los actuales pozos de petroleo. Siendo asf, y mirando el asunto desde el punto de vista nacional, deberfa considerarse que el gas, por tener usos alternativos y porque puede ser almacenado, tenga un valor superior al que fu6 esco- gido en el informe. b) Las cargas.- Aquf deseamos aclararles que, a pesar de haberle presentado, por intermedio de la Harza, una estimaci6n de cargas que concuerda con la que Uds. prepararon, es nuestra opini6n que ambas pro- yecciones son bajas tanto para la regi6n Central, como para la regi6n de Guayana. 1) Regi6n Central.- No estamos completamente de acuerdo con la forma en la cual Uds. hicieron su estimaci6n (anexo 1, pig. 2) para la carga general debido a que no se consideraron las ci- fras de crecimiento hist6rico. La tabla que skue ilustra nuestros comentarios. TASAS DE CRECIMIENTO % SECTOR (1) Adoptados por Bco. Mundial Perfodo Periodo Periodo 1958-1961 19b6-1970 1970-1980 Residencial lb 9 7 Comercial 17 6 6 Oficial y otros (Exce. el INOS) 38 4 4 Sub-Total 25 6 1/2 6 Industrial 18 10 10 (2) 12 12 (3) Notas: (1) Estos datos fueron obtenidos del "Resumen de Estadisticas Anuales" CADAFE y son aplicables a las ven- tas en las regiones Centro y Cara- bobo. (2) Estimaci6n inferior. (3) Estimaci6n superior. El crecimiento promedio en los sectores Residencial, Co- mercial y Oficial (excluyendo el INOS) para los tres pe- rfodos (1958-1959, 1959-1960, 1960-1961) fu6 de 25 %. Uds. adoptaron un crecimiento de solo 6 1/2 % para el perfodo 1960-1970 y de 6 % para el perfodo 1970-1980. Para el sector Industrial, mientras que el crecimiento anual promedio durante el mismo periodo fud de 18 % su cifra en la estimaci6n mds alta, es de solo 12 %. Cuando uno considera que los crecimientos actuales tu- vieron lugar durante un perfodo de depresi6n econ6mica, hay que concluir que sus cifras son francamente bajas. i) Regi6n Guayana.- Aluminio: De octubre a la fecha, han habido ciertos adelantos relativos a la ampliaci6n de la capacidad inicial de la planta reductora de aluminio. Al efecto, se han dado pasos en firme para la construccidn de una planta con capacidad para 100.000t., lo que significa una demanda de 200.000 Kw. El estado actual de estas negociaciones puede observarse en las cartas adjuntas marcadas como anexo 1. )b )) ) ) x - - -5- c) Los costos tdrmicos.- Los costos de unidades nos pa- recen bajos. Les puede interesar conocer que la opi- ni6n de directivos de la Electricidad de Caracas, ex- presada en la Mesa Redonda promovida por la Cdmara de Industria Elctrica, fu4 la de que los costos t6rmicos estimados por Sargent & Lundy les parecfan muy bajos. Existen ademis, otros puntos que merecen mencionarse: III. LINEA DE TRANSMISION 230 KV MACAGUA-CARACAS Aun cuando la consideramos resuelta, deseamos aclarar los siguientes puntos: 9) Con respecto al rengl6n 61, pdg. 16, Conclusiones, no ve- mos muy claramente la relaci6n que tiene la construccion de la l1nea de transmisi6n con la interconexi6n de las redes de la CADAFE/CVG con las de la Electricidad de Ca- racas. 10) En realidad nos permitimos referirnos a su propia nota 1 sobre la linea (Pig. 10) y que dice que 4sta se justifi- ca. 11) Las justificaciones de la l1nea a 230 KV presentadas hasta ahora al Banco y en las cudles creemos estgn de acuerdo, no pretenden relacionar la linea ni con Guri ni con la carga de la Electricidad de Caracas. 12) En un informe anterior, preparado por la CVG y copia del cual tienen Uds., qued6 demostrado que con o sin Guri, la linea se justificaba plenamente. 13) La CADAFE, por otra parte, en su informe del 30 de mayo de 1962, justific6, tambidn penamente, las ventajas de la interconexi6n. En ese dltimo estudio la CADAFE ni siquiera consider6 un desarrollo hidroeldctrico. 14) Por eso, nos extrafta un poco ver que Uds. condicionan la construcci6n de la linea a la integracion de la Elec- tricidad de Caracas a las redes nacionales, y estamos a su disposicidn para tratar de resolver cualquier duda que pueda quedar pendiente con respecto a la lfnea y su justificaci6n con respecto a Guri o a la inclusi6n de la carga de Caracas. IV. UNIFICACION DE FRECUENCIA 15) Deseamos dejar expresa constancia que creemos conveniente la interconexi6n de las redes CADAFE/CVG/Caracas y que esa interconexi6n debe efectuarse mediante una unifica- ci6n de frecuencia a 60 cps. Tambisn que reconocemos plenamente las ventajas de la carga adicional de Cara- cas, siempre y cuando esta 'ltima no sea considerada co- mo la justificaci6n del proyecto de Guri sino como un atractivo adicional. 16) Estamos muy interesados en resolver el problema de la -6- frecuencia con Caracas lo antes posible, y a ese fin han habido reuniones de las directivas de la CVG, Electrici- dad de Caracas, Cordiplan y CADAFE. Se ha formado una comisi6n para estudiar el problema y tenemos la seguri- dad de que llegaremos a un acuerdo sobre el particular. Todas las partes estdn muy interesadas en llegar a una conclus16n satisfactoria, por razones que son obvias y animados por ese deseo no creemos haya problema. 17) Los estudios preliminaresrmuestran que los ahorros ob- tenibles operando los sistemas CADAFE/CVG interconecta- dos con el de la Electricidad de Caracas, son entre 2 y 4 veces el costo estimado para un cambio de frecuencia en Caracas, el monto exacto de los ahorros dependeprf. de la tasa de interds que se escoja para efectuar la ac- tualizacidn de todos los costos de inversiones y opera- ci6n, durante los pr6ximos 40 affos. En otrax palabras, la inversin en un cambio de frecuencia parecerfa ser muy justificada. 18) Despuds de confirmar estos resultados, 10 que se espera hacer dentro de un mes aproximadamente,--ya que hasta la fecha hemos terminado en su forma final el estudio de los sistemas aislados unicamente, borrador del cual ad- juntamos como anexo 2, y no el estudio del conjunto in- terconectado- nos proponemos efectuar paralelamente los siguientes dos pasos: a) Estudio de un contrato de venta de energfa a la Elec- tricidad de Caracas por parte de la C. V. G. b) Estudio tdcnico de la interconexi6n, repartici6n de los beneficios que esta aportard, detalles sobre co- mo las redes de CADAFE/CVG pueden ayudar las de la Electricidad de Caracas que se van canbiando a 60 cps para reserva, cudles plantas operardn en la regi6n Central despuds que Guri comience a funcionar, la es- tabilidad del sistema conjunto, etc. 19) Le puede interesar saber que hemos reestudiadola ubica- ci6n de la subestaci6n en Santa Teresa, con el Ing. Je- fe del Dpto. Eldctrico de la Harza Engineering Co. y con ingenieros de la CADAFE y la Electricidad de Cara- cas, para ver si no convenia reubicarla mds cerca de la capital ahora que una interconexi6n parece probable, y que el resultado de ese estudio es que la localizaci6n actual de la subestaci6n, en Santa Teresa, es satisfac- toria. 20) Uds. pueden ver que estamos trabajando muy en firme el problema de la interconexidn con Caracas; les manten- dremos al tanto del progreso de los estudios que se estgn efectuando y al mismo tiempo les agradecerfamos mucho sus comentarios. V. LICITACION PRESA DE GURI 21) Como Uds. estgn informados, se abri6 la licitaci6n para la selecci6n de las firmas que deben concurrir a la pre- sentaci6n de ofertas para la construcci6n del dique de -7- Guri, habidndose notado un gran interds por parte de fir- mas constructoras de reconocida reputacidn. El andlisis de las firmas que concurrieron estA en manos de una Comision integrada por cuatro representantes de la CVG, un representante por el Colegio de Ingenieros de Venezuela, uno por la Cdmara Venezolana de la Indus- tria de la Construcci6n y otro por la-Contralorla General de la Naci6n. Esta Comisi6n cuenta con la asesorfa de la Harza Engineering Co. En el anexo marcado con el nu'mero 3 podrdn encontrar la lista de las firmas que presentaron su documentaci6n. Se espera llamar a las firmas seleccionadas para la presentaci6n de ofertas en la primera semana de enero. VI. CONSTITUCION DE LA EMPRESA ELECTRICA En el anexo No. 4 encontraran copia del borrador de los estatutos de dicha Empresa, los cudles estdn actualmen- te en discusi6n. Atentamente, Coronel fonzo Ravard Presidente Anexos: 1 3 cartas de la firma Reynolds International Inc. 2 Borrador estudio sistemas aislados. 3 Lista firmas licitacion Guri. 41iBorrador estatutos empresa eldctrica. RTV/rek. Films December 26, 1962 Wolfgang Kaupisoh VENEZURIA - Progress on Projects Mr. Schmidt called Col. Rafael Alfbnso Ravard on the telephone and discussed the following questions: L. Highway ProJect Col. Alfonso agreed that we should send a letter to the Minister of Finance with copy to the Minister of Public Works indicating that we would be prepared to send out a mission early next year to appraise a highway project which would include the bridge over the Orinoco and the Barinas .igbw. 2. Cmts by the MYG staff en the prmvisinal assessmnt ef ths Qu$. witja Work is proeseding, but Alfonso hopes to add a report on the good progress being made - in respect of frequency onversion in Caracas so as to give us a more complete picture. 3. Bidding for Guri 33 firms have presented their applications in response to an invitation to prequali4r. 4* Organisation of subsidiary to own and operate CVG per fad# gm , Drafting of bylaws and table of organisation is proceeding well. Alfonso does not anticipate any difficultr. 5. afnoldS Aluminum Prpject Allonso was aware of the agreement reached between the U.S. and the Venesuelan governments that will enable the U.S. government to issue a specific risk guarantee to Reynolds for its share of the investment. He had received a few days ago a letter from louis Reynolds to the effect that Reynolds wanted to move fast and have 50,000 tons of annual smelting capacitr in operation by 1965 and 100,000 tons in 1968 if Guri would be in operation by then. cleared with and cc. Xr, Schmidt coc Messrs. Spottswood (3) van Helden Rardy Straut FORM No. 57A INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION I RECONSTRUCTION AND DEVELOPMENT CORPORATION OFFICE MEMORANDUM TO: Files DATE: December 1962 FROM: . Kaupsch SUBJECT: Venezuela - -Visit to Planta Siderurica del Orinoco 1. in the process of firming up the demand forecasts for the Guri project, a mission headed by Ar. atter and including Mr. Kaupisch and 11r. Straut, paid a brief visit to the Planta Siderurgica del Orinoco nd tried in ensuint tals with the mana ement and the consultants in Caracas: a) To fir- Ip the provisimnal load forecasts; b) to receive some informatin on the po,,er rrices to be paid by the steel plant, and c) to obtain an impression of the future financial results of its operationsand thliir probable impact on the Corporacion Venezolana de Guayana. The tentative conclusions reached are summarized hereunder; more detailed information to support these conclusions are given in the Annex. 2. This steel plant, at present owned and operated by the Corporacion Venezolana de Guayana (Kilo), is about to be leased to ard operated by a fully owned subsidiary of CVG. The power generating facilities of CkG (the present Iacagua hydroelectric plant and the future Gurl plant) will equally be brought into a seoarate company fully owned by CVG but with its own management, capital and budgeL. The steel company and the power company would then be sister companies, their financial status having repercussions on the Darent comoany and in particular on its abili ty to contribute to the expansion of either. The price at -hich the poer comway would supply pcwer to the steel conpany ,!ould enable GV3 to manipui te (though Lo a rather limited extent only) the earnin; capacity of both ubsid!8ries. 3. It curn be ass;umed that up to tho end of 1963 the pre sent load of 9;Y J will reach 150-160 Av with a total of 8 electri c low-shaft reduction furnaces in operation though not necessarily work-in at full capacity. According to Lhc mana-ement full loaJ of 225 A will then he ,radually reached up to thl end of 19C4. The writer doubts thi s even assuning that the market conditions in Venezuela and the abiliby to compete abroad would permit full use of the existing capacity - unless of course pig Iron exports were considerably increased. In addition to unavoidable runninT in diffi- ciilties and teething troubles the Plant has some features vhich, in the writer's opinion, unnecessarily complicate operations and require time and some additional investment to be set right. They are dealt with in Annex 1. Full load should not be expected before the middle of 1960 at the very best. An expansion of the plant to l.2 million tons of ingot capacity would not materially increase the powcr load. Mo further electric low-shaft furnaces are contemplated. The addition of cold rollin, facilities for imported coils, of a blast furnace plant and L convcrters in the steel me Ltin g shop might increase the load by 25-30 L4 at the utmost. P hot strip mill might add another 30 MW. Files - 2 - December 3, 1962 4. The steel plant pays at present 1.5 centimos per kwh. .This equals at the rate of lEs. 4.54 for the JS dollar 3.3 mill. Pt a con- sumption of 2,300 kwh. per ton of basic iron this amounts to USq7.50 or ns. 34 per ton. The management proposes a power price of 2.6 mill. for electric furnace power arid of 5.2 mill. for all other power consumed at the plant. This would cut the power component of the basic iron production cost from Es. 34. to Bs. 27. The total cost of production for finished steel pro- ducts has been calculated at an average of Es. 725 per ton including Es. 1CO for amortization and bs. 135 for interest. (Details are given in Anney 2.) The change in power rates would thus constitute a saving of less than 1' and would not affect materially production cost. The offer to double the rate for all poiwer consumed outside the electric furnaces would by no means compensate the power company for their concession con- sidering that the furnaces consume much more po'xer than the rest of the plant. There does not appear to be any need to lower the power rate from the present level and even the possibility to increase it slightly if the cost situation of the power company should make this necessary. 5. The average sales revenue has been assumed to be Bs. '740 per ton based on the prices of imported steel but without considering duties and assuming that the production program for which the plant has been designed can be implemented. A breakdown is given in Annex 3. The margin is rather small considering that the cost calculation is based on operations at 90% of capacity which will not be reached for a considerable time to come. The growth of demand, the establishment of an effi cient marketing organiza- tion, the elimination of built-in shortcomings described in Pnnex 1 require time and some additional investment. The steel plant is on the other hand free of debt. It has been fully paid for (except for some amounts still under dispute with Innocenti, the general contractors.) shortfall of earnings could to a good deal be absorbed by the interest payment of Hs. 135 per ton provided for in the calculations. 6. The management stated that it expected to fully cover its opera- ting cost in 1963 which would be quite an achievement considering that the plant is still very much in the process of running in. There seem, however, to be good prospects to cover operating costs in 1964, to earn some amorti- zation in 1965, and some interest on capital invested by 1967. Whether this comes to the rate of Es. 135 seems doubtful but it can be assumed that the steel company will not require financial support from the Guayana Corporation beyond 1964. cc: Ar. Schmidt/Ar. Matter, Ar. Spottswood, Ar. Straut, ,r. Sadove, Mr. Lithgow WKaupisch/mv Annex 1 1. The important question we had to sk ourselves from a power consumpLion and rentability point of view was whether and in what time the steel plant would achieve its rated capacity. W4 spent about l-p hours going around the plant and the writer had the oppor"unity to discuss his impressions with the General ianager, Dr. Alamo, and with the consultants Koppers, Pittsburgh, briefly at Caracas. All this is hardly sufficient to obtain more than a superficial impression. Still, there are certain characteristics of the plant which attract attention even at a perfunctory glance. (A description of the main unit of the plant is given at the end of the Annex). The general layout implements the accepted principle of one-way traffic and provides some space for extension but is rather compact. The bays aPpear to be rather narrow to allou for easy operation. 2. The basic iron plant is the big,,est of its kind in the world and nobody can claim operation experience with such a plant at full capacity. With this reservation the writer feels that the number of ladles (12 for 9 furnaces) is insufficient. With only five furnaces in operation, most ladles were heavily skulled. One ladle repair pit and two drying stands are certainly insufficient. Additions are planned. 3. Each furnace is tapped every four hours. ,ith 9 furnaces this means one tap every 26 minutes. Attempts are being made to change the tapping holes to allow for bigger taps so as to extend the tap to tap time. But even with the two 120/40 overhead cranes available it will require excellent coordination and a very experienced crew to keep all furnaces at full capacity. 4. No mixers have been provided in the steel melting shop. This is difficult to understand because with a 9 furnace basic iron plant and comnaratively small taps per furnace one would assume that collection of hot metal under heat in a mixer would be an indispensable buffer between basic iron shop and steel melting shop operation. Five mixer wagons of 250 ton capacity each have been provided instead. The writer feels that this will 1ggravate the problem rather than solve it. Mixer cars cannot be heated. The hot metal has to be promptly discharged and a minimum of 50 tons has to be left (if the mixer cannot be completely emptied) to prevent freezing down. The writer has heard about plants where after a few weeks of operation the mixer cars were all frozen down and useless. At present, no mixer cars are used with five furnaces in operation. The heat metal is transferred in pouring ladles. 5. The basic iron shop superintendent felt that the mixer was not needed and that he would be able to manage with his mixer cars using the pig casting machine as an emergency exit. It is true that the pig casting machine offers an outlet if the steel melting shop cannot accept the hot metal, but this cuts steel output if it happens frequently. In ensuing talks with the consultants it transpired that they feel an obligation to give this operation as devised by Innocenti a try-out. At the same time offers for the mixer have been obtained. Full operation of the plant does not seem possible without a mixer. 6. The actual capacity of a two-strand pig casting machine ds certainly lower than the 2,500 tons per dar claimed by the general con- tractor. 100 tons per hour can be achieved but not be maintained over any length of time. It should, however, be sufficient to cover any emergency situations. 7. The steel melting shoo should be able to process up to 750,000 tons of ingots per year. For the first two -ears of operation, the figure might be closer to 60-,00 tons. The figure of 850,000 hoped for by the management assumes optimum hot metal/cold charge re- lation (which cannot always be maintained in Practical opcration) and does not provide, in the writer's view, for sufficient time to repair and reline the furnaces. At the time of our visit one open hearth furnace was in oueration, the second furnace in the process of being heated up. bo figures were available on the number of heats the lining would give. To uhat extent oxygen blowing contemplated by the manage- ment to increase capacity would actually bring u- the production to a considerable extent over a longer 3eriod is a hotly disnuted issue. 8. The stripper bay is under the same roof with the soaking pits. This is a rather unusual combination which may complicate future ex- pansion. The consultants agreed that a strinoer hall might have to be built between steel melting shop and rollins mill. 9. The soaking pit capacity may be theoretically sufficient but should be extended by at least two furnaces to allow the handlin.- of more cold ingots. 10. We have only seen the seanless tube plant in operation. A combination of piercing press, elongator and pilger-ill is certainly not the latest word in seamless tube manufacture. The layout makes for rather congested operations and the Innocenti-suplied equipment seemed rather light in construction. The management and the consultants felt that this was not only the first, but probably also the last tube plant of this type. Additional demand for tubes if it materializes would probably be filled with welded tubes. 11. The extension of the nlant to anything between 1.2 and 1.5 million tons ingot capacity would be based on different techniques. Basic iron capacity would be increased with blast furnaces using petro- cole or gas if present exoeriments lead to workable industrial nrocesses. The steel melting shop would probably get two 1,D converters. 12. All this could only materialize as and when a continuous or semi- continuous hot strin mill can be added. The existing mills have, with the exception of the blooming mill, little spare capacity to offer. No guess can be made at present when the market development will allow for the installation of a hot strip mill. As an intermediary step the addition of 150,000 to 200,000 tons of cold rolling capacity based on imported coil is contemplated. - 3 - 13. The main units of the steel plant are: a) A sinteingolant with oru mixing bins and 1 rotary kiln - rated capacity 780,000 tons annualJy. b) A basic iron plant consistinv of: 9 low-shaft electric reduction furnaces of 200 tons daily capacity each giving an annual output of 630,000 tons basic iron; 1 two-sLrand pig casting machine - rated capacity 2,500 tons of pig iron a day. c) A steelsmelting shoo consisting of 4 fixed open hearth furnaces of 250 tons charge capacity each. No mixer, hot metal transfer by 5 mier cars with 250 tons capacity each. d) A rollin mill with 3 soaking pits of 125 tons capacity each. Stritpper bay attached to soaking pit bay. One 44" blooming - slabbing - mill and hot shear 1.2 million tons annual capacity. A 31.4 inch two high three stand billet mill, also used for rails, heavy structures and sections. P. 19.6 inch three high four stand mcrchant mill. 1 rod and wire mill, with a six stand roughing train, a six stand intermediate train, 4 open finishing stands and 6 finishing tandem stands. e) A seamless tube mill with 1 push bench for tubes - in. diameter - capacity 100,000 tons; 1 medium 2 stand pil or mill for tubes 2 3/8-7 in. - capacity 60,000 tons; 1 large 2 stand pilger mill for tubes from 6 5/8-16 in. - ca-pacity 135,000 tons; hot tube expanding equicmnnt to expend 16" tubes to 24'" reheating furnaces (mainly rotary type with automatic discharge) as required by flow of aterial. f) A wire drawint plant for black wire galvanized wire barbed wire and naias - total capacity 30,000 tons. g) A grey iron foundry for ingot and pig casting molds and spun cast iron pipe equioment. h) Central repair shoo with extensive machining facilities and electric steel furnace. Annex 2 Cost of oroduction The cosL of production is assumed as follows: iron ore, coke, fluxes and electrodes ........... .s. 95 Power and fuel .......... 00 .. ................ " 55 Tools, spares, refractories and other material .. 95 Cost of transportation and sales ................ ". 50 Overheads .. ............................... 35 Wages and salaries ........ ................ 170 Interest .......... * .................. ......... I" 135 Amortization ...... ...... ......... " 100 Total os. 735 The wage component is very high when compared wil1h Germany (roughly Es. 90). This is mainly due to the fact that the plant is in a way labor intensive. 25 man-hours are assumed for a ton of finished product against 15-17 in Europe. The cost of a man-hour has not been finally determined yet, but the management expects to come out of its present negotiations with the Trade Union with a rate of 13s. 6.4 in- cluding fringe benefits and social charges. Annex-3 Sales revenue per ton is calculated at Bs. 740 if the following product mix is achieved: Seamless tubes: 360 kg. at Be. 1,090 per ton = Be. 392 Wire: 95 kg. at Be. 640 per ton = Bs. 61 Rods: 245 kg. at Bs. 395 per ton = Be. 97 Structural steel: 180 kg. at Bs. 495 per ton = Be. 89 Spun cast iron tubes: 120 kg. at Bs. 845 per ton = Be. 101 Total 1000 kg. Be. 740 A sales forecast prepared by the management for 1964/65 based on present prices and demand assumed, envisaged a total of 385,000 tons of products for the internal market and an export of 105,000 tons at world market prices to give a total revenue of $78,625 million. This would amount to an average price of Bs. 735 per ton. If the capacity for seamless tubes could be fully used the average sales revenue per ton may go up to Be. 770 per ton. The competitive situation of the plant has been improved by the virtual devaluation of the Bolivar from Bs. 3.20 to 4.54 per U.S. dollar. Pig iron is at present exported at about $50 per ton and some seamless tubes have been sold at US$225 per ton. The growth of the internal market depends of course on the over-all growth of the econonyr. If the growth rate anticipated in our reports materializes, the company should be able to sell its production as and when it becomes available with the exception of tubes which depend on the investment and exploration pattern of the oil companies. V4 o (b TO: Mr. A.D. Spottswood November 23s 1962 FROM: J.C. Lithgow and F.H. Howell SUBJECT: Back to Office Report -- Mission to Venezuela: CADAFE and CVG 1. In accordance with its October 19, 1962 Terms of Reference, the Mission arrived in Venezuela October 22. Mr. Howell returned November 14 and Mr. Lithgow returned November 20, 1962, C.A. de Administracion y Fomento Elctrico: CADAFE 2. CADAFE has drawn up a program of system expansion, reinforcement, and rehabilitation covering in detail estimates of expenditures during the period 1963-1968. Expenditures for 1969-1972 have been estimated only in the aggregate. This 1963-68 program is based largely upon the 1960 Electricit6 de France planning report, modified suitably to reflect changes which have taken place in power consumption patterns since 1960, and the capacity in the privately-owned La Electricidad de Caracas system which conversion of that system to 60 cycle operation will make available for bulk supply to CADAFE. The program includes some additions to diesel capacity, the Aacagua- Caracas 230-kv line, reinforcement and extension of the ll5-kv system, and extensions to subtransmission and distribution. Construction for a new 24 IMW hydroelectric plant at Mucujum, for which plans are now being completed, is expected to start in 1963. Studies are also being made for a hydroelectric plant with an ultimate capacity of 170 An at Santo Domingo, tentatively scheduled for construction to start in 1965. Both of these projects are in the Western Andean area of Venezuela at present served by a number of small thermal power stations depending on road transport for their fuel requirements. Extension of the Guanta Plant near Puerto La Cruz is no longer being considered since additional power requirements of this area are to be met by supplies from the proposed Macagua-Caracas 230-kv transmission line. A preliminary review of CADAFEfs cash position over the next several years indicates that the period 1963-64 will be critical in terms of ability to finance the proposed construction program. 3. The major items in the 1963-1964 program for which definitive and detailed planning, design, and cost estimates are well advanced are the Aacagua. Caracas 230-kv line, and associated work on the 115-kv system. These items are: (a) The 638 km double-circuit Aacagua - Caracas 230-kv transmission line, and five 230-kv stations. It is expected contracts for this work will be executed shortly, and if so, completion by early 1965 can be expected. Estimated Cost: Bsl8.h million + US$11.5 million, equivalent to us 15.5 million. -2- (b) Fe inorcement (including improvements to switching and protection) of tqe 115-kv system which interconnects the three major thermal rlants in the Puerto Cabello - Caracas area, and which will be tied into the 230-kv line at Caracas. Estimated Cost: Bs2 million + US$1.5 million, equivalent to US 1.9 million. (c) 115-kv tie between the Puerto La Cruz terminus of the Macagua - Caracas 230-kv line, and existing Guanta Station. Estimated Cost: Bs250,000 + us$16o,O00, equivalent to US$215,OOO. 4. The estimated cost of the three items above is approximately Bs20.7 million and USj13.2 million, equivalent to a total of US$17.8 million, out of a total construction budget of Bs72 million and US$31 million, equi- valent to US*47 million for 1963-1964. Projected internal cash generation and CVF contributions during 1963-1964 should be equivalent to USY37 million, leaving a shortfall equivalent to about US10 million. If thi program is found to be suitable for Bank participation, financing the foreign exchange costs of the three items outlined in paragraph 3 above should assure adequate funds for carrying out the proposed work. 5. CADAFEt s Net Operating Revenues after taxes on income and depreciatioi will continue to be low in relation to net investment in plant, ranging from about 2% in 1963 to 7% by 1972. This estimate is based on energy sales fore- casts consistent with the projections made by the June/July 1962 Bank itission, and at current rates, except in the case of INOS, whose rate will shortly be doubled. This situation is, in the mission's opinion, indicative of the large amounts of money invested in the recent past to rehabilitate and expand run-down properties taken over by CADAFE, rather than of a rate structure basically inadequate when viewed over the long-range. An increase in rates in general sufficient to raise return to, say 8% in the immediate future would tend to produce unnecessarily large surpluses within several years and would provide funds at a rate greater than the system's ability to invest them. 6. Following discussions with the Bank, the award of contracts for the Caracas - Macagua 230-kv transmission line is expected to be made in the near future. Corporacion Venezolana de Guayana: CVG 7. The Bank's October 10, 1962 confidential draft report on the economic aspects of the proposed Guri Project was discussed in detail with the CVG management and staff. A critique is currently under preparation by CVG, and will be sent to the Bank. The principal factors in the Bank's analysis with which CVG is not in agreement are: the load forecast; the gas price; and the treatment of iacaguals capability. 8. Colonel Alfonzo, president of CVG, reported to the mission that negotiations with Reynolds are essentially complete; the major impediment is still apparently some type of U.S. Government guarantee to Reynolds against expropriation of its equity in the joint Reynold-CVG subsidiary, Aluminio del Caroni, S.A. (ALCASA). CVG's equity of Bs5 million has been available 3- for some time, Although the general discussions now indicate a faster build-up from 25,00) mtetric T/year to 100,000 metric T/year to be probable, definitive steps to begi- construction have not yet been taken. 9. The CVG management has underway the drafting of by-laws for a separate corporate organization to build Guri, and operate both Guri and Macagua This organization would be a wholly owned subsidiary of CVG with a 3-5 man board, probably identical with the CVG board. The charter and by-laws of CVG itself contain the authority for the creation of such a subsidiary. Under study is the question of whether or not the new organization should actually have title to the two power plants, or whether ownership should be retained in CVG. In the first case, net income of the subsidiary would, of course, accrue to CVG, but would not enjoy the tax freedom CVG itself does. In the second case, CVG would charge its subsidiary a rental for the use of the plants, adjusted to be equal to net income, with the intent of avoiding taxes. CVG contemplates sending draft articles for the new subsidiary to the Bank, for comment, before the end of the year. Frequency Unification 10. A Comision to study the need for, and ways and means of accomplishing, frequency unification Aas been constituted, with representatives from La Electricidad de Caracas, CADAFE, and CVG. Several meetings have already taken place, at which the principle of unified frequency operation at 60 cycles was agreed upon by all parties. cc: Messrs. Aldewereld Ripman Matter Kaupisch Straut Operational Files/ November 20, 1962 Harsa Ungimeering COMPSi 40M W. Madison Street ROsM 902 Chicago 6, flinois Gentlement Res Guri Projat The attached o, whish was apparesty intended for maling to enessaels, was enlosed in th envelope in which the Bank's copy arrived. It is being retownd for whatever disposition you wish to maie of it, Sinseely yours, Mario PIfOagli Assistant Chief, Public Utilities Division Departmen of Techuica1 Operatins MP:bli Xovember 16, 1962 Coopers & Lybrand Abaeus House 33 Odtter Lane Cheapide London, England gURI MaaEC Dear Sirss We confirm our oral oonversations with you and agree your terms of reference as follows: To review the capital oosts of Stage I of the Ouri project contained in the project report dated 30th April.1962 prepared by the larza Engineering Company International, Chioago. You should review all factors pertaining to this matter and particularly the cost and availaW.1ity of labor and materials such as steel and owwmet and other associated costs in Venesuela, and to draw on the experience of the Yboagua project. This review will not include (a a market survey and demand forecast; b the eapital cost of the transmission system Sc the cost of the thermal alternative; the economic eaparison between bpdro and thermal; (o) the operating costs of the project. It is contewplated that you would have a preliminary draft report available for discussion with us in mid-January 1963. Very truly yours., FTIgnel)Y H. U. RpiwYa H, B. Riman Assistant Director nt of Technical Operation MPiccagli:sDepar November 2, 1962 Mr. S. John Fears Coopers & Lybrand Abacus )Guae 33 Gutter Lane Cheapside London, E.C.2 Dear Mr. Pears: Thank you for your letter of October 30. I had already written to Messrs. Lithgow and Howell to remain in Caracas until the 19th in order to give you an opportunity to talk with them before they return to Washington. Yours very truly, A. D. Spottvoed Chief, Publie Utilities Division Department of Technical Operations ADS: jak cc: Op. Files with i/cuAing Div. Files 1 i4tter No.3 November , 1962 Mr. John C. ithme 0/0 Tamanaoa Hotel Cararn., Vansauela Dear Johns I m enelosing a coi' of a letter bioh I received from Mr. Near regarding his visit to Vesnmmla. You will note that be would like for you and Fred to wait over in Caracas at least until the 18th so that you eould spend that day with him and his te= dsaassing the Guri project. Unles I hear to the contrary, I assume that you wi3l rmain for discussion with Mr. Fears. When I learn of his specific time of arrival in Caracas I shall cable you. Sncerely yours, A. D. Spottaood Inclmasu oo: Mr. Weiner ADS:bli Novmber 1, 1962 Mr. S. John Fears Coopers & Iqbrand Abeaus House 33 Gutter Lane, Cheapside London I.C.2, England Dear Mr. Pears: In my letter of October 31 to ym I incerreetly stated that I would look forward to seeing you in Washington on the afternoon of November 17. I have since noted you plan to be in Washington on November 16 and will leave for Venesanela on the afternoon of the 17th. This lottsr is merely to clear up any possible misunderstand- ing. Sincerely yours, A. D. Spottswood Chief, Public Utilities D1vision Deparieent of Tedhnical Operations AirA Tim Viald fak Group l~ives Record Removal Notice File Title Barcode No. Guri Hydroelectric Project - Venezuela, Republica Bolivariana de - Loan 0353 - P008181 - 1967 1614829 / 1962 Negotiations - Volume 1 Document Date Document Type 31 October, 1962 Letter Correspondents I Participants To: Mr. S. John Pears From: A.D. Spottswood Subject / Title Venezuela - Guri Hydroelectric Project (Loan 353-VE) Exception(s) Personal Information Additional Comments The item(s) identified above has/have been removed in accordance with The World Bank Policy on Access to Information or other disclosure policies of the World Bank Group. Withdrawn by Date Tonya Ceesay 9/5/2016 Archives 01 (March 2017) latter No.2 October 30, 1962 Mr. John (. Lithgow e/* Twaanaee Hotel Caracas, Venesuela Dear John& On Friday afternoon I had a visit fram Mr. do Lieven of Alston Campaiy Paris, who mentioned that his ampany had received from Venesuela a request for prw-qualification, apparently for the equip- ment to be installed in the Guri projset. He was pussled because the pre-qamlification request suggested that coansortia should be formed to subit proposals for both the civil works and the equip- ment for the Guri project. It seems strange to me that the Guri people should ask for pre- qu&3fication on these terms. I do not understand why the equipment suppliers should be inclwded in a consortium for this project. Obviously, civil works is going to require mnuh longer to complete than the equipment for the project and by putting the equipment in with the aivil works, uri will lose the opportunity to obtain the best prices for equipment and eartainly they will lose a certain smount of flexibility in awarding contracts. I wonder if the Guri people realise that it costs large sas of money far firms to organ- ise eonsortisa and prepare bids. It would nm to me that at this early stage many equipment firms would not be particularly interested in participating in pre-qualification in consortia because it ties their hands sine. Vhy would be unable to have any assurance that if their bids were low they would be selected since the civil works contractor might be high. I wish you would discuss thse points with the appropriate officials and obtain a copy of their invitatian for pre-qualification. It is not too late for supplementary pre-qualificatAns to be sent separately to equipment manufacturers. If we should agree to finance the project, I think we might insist on this prooedure. Mr. John C* Lithgow - Veaesuala - 2 - October 30 , 1062 Please let m have a little note on yeur progress on th CADAPS progrm if you have not alred dam s*e, and also on the pre-qualifie- atiaquestian after you have diasussed it with the appropriate offieials. I An .nelowing copy of Schmidt's letter to Col. Ravard regarding Mr. ears' fortheming visit to veleseula. Sinoerely youru, A. D. Spottsoed Chief, Public Utilities Divisiom ADS:bli COOPERS & LYBRAND BIRMINGHAM, GLASGOW, LEICESTER, LIVERPOOL, MANCHESTER, CHARTERED ACCOUNTANTS TELEPHONE: MONARCH 4040. SHKPPIELD1-. TELEGRAMS; COOPERS, LONDON. S.JOHN PEARS RONALD . SUMNER ENRY A ENSONC,.E. BRIAN A. MAYNARD VIVIAN R.V.COOPER CAVID C.HODSON BRIAN W RAVES GREVILLE C.S.GIDLEY-KITCHIR j OHN PERFECT a d. DAVID CORSANABCSHUE WEDMUND CARNELLEY JFRANCIS SHEARER,O.B.E. T. ANTHONY ANSLEY A SA CU S HOUSE, DONALD R.d!HILVERS ROBERT PHILP ALEXANDER 0. GORDON 33, GUTTER LANE, UNITED STATES OF AMERICA, CANADA, MEXICO, BERMUDA, AUSTRALIA, NEW ZEALANO. IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGER J, P. SMITH C H E A PS I D E, SOUTH 'AFRICA,CENTRAL,EAST AND WEST AFRICA, AIRMA-M BELGIUM, FRANCE, GERMANY, HOLLAND, ITALY, SWITZERLAND. LO N D O N, E.C.2. OUR REFERENCE 6o6 30th October 1962 A.D.Spottswood Esq. International Bank for Reconstruction and Development, 1818H Street, N.W. Washington 25, D.C. Dear Mr Spottswood, ANS' A Guri Project DATE After I had written my letter yesterday I saw Aldewereld and mentioned the matter to him. He is leaving for Spain today and he asked me to write to you to say that under the circumstances he much supports my suggestion that Lithgow and Howell should delay their return to Washington by a day so that we could meet them on the spot in Caracas on the 18th November. I must say the more I think of it the more sensible it seons to me to be as they could let us have their re-actions and give us help as to the general atmosphere as a result of tpir visit. Yours sincerely, bb aWASSYJ A eR3qOOO AAOA MONAMON ? Ma JAT *T14ATUOnOA 1- 3TRAMH MST& MA.JOOUVI. MsOl WOoCAJO,MAHOWMiM .M 8f t,43%CO, MANOU3 3T~ NSMMUS. O JAMO 2MA32 M4U A OXAHYAM A WAIMR I *.D,4O$IS.A YaM w 60.2Tr-YSJOI .6.3 3J4INO SSVAO . .. - ,38 U0OH S UZ A SA t " YJSMAT Y ONMA:AT'M ,T O4VAO Y3,JJZMNAO O.UMQ2 w dM3VJiMb M C*A*COC U. O, MAe " OWA TU . Tol"*" ,3 hI AJ0 0" , *"A Aqjlq A 'uMf3a ,000*M,AOAMAO .AdXWUA i0 esTATe 3TIu ,3 I SAA3 H 3 OMa MOAMAM JAqI0MI iMOqAOMA A--AM .MAR OWAJAX W3" ,AI.JANeUA A JIA *XW CMA HAT3 ,JA 0,A3 A ATUO .s.o. , M OaIo M J a aT * 4 YAA? QgMA*J04 ,Y*AM"3C .3M . MUl.J3 - a ait ogL.A fl s 8MA be: 1 bna b 5,E Ba b- . J- e - 2 I txw ba I -ei.A CzbLi'w J Laa ba bLZa tvael al 9 .1 - zeJ- a# dd.a '84 a . da a ft - qugM Dss 9, t -s5 iiut * z1 'as vU, J+eS; blur I aos P.a .... :. '+ sjf :b .*u a lUe .196 ft sir 1 D ul *, J-a , ;i* weos6 ed 0c* oi aiwfsa 9 E1danoa gs f Ar J aldt - om 9E 1 +..38 *aM:7 istse sd as evazr bi a -- e s "+ am * blucn as .aih ts ir Jt o iluasg a s mr qa Ma "133 'd COOPERS & LYBRAND BIRMINGHAM, GLASGOW, LEICESTER, LIVERPOOL, MANCHESTER, CHARTERED ACCOUNTANTS TELEPHONE: MONARCH 4040. SHEFrIELD. TELEGRAMS: COOPERS, LONDON. S.10MM PEARS RONALD rF.uS NER HENRY A.*ENSON,C.B.E. BRIAN A. MAYNARD VIVIAN R V. OOPER DAVID C HOBSON BRIAN W.O RAVES OREVLLE C.*.OIDLEY-SITCHIN JOHN PERFECT .. DAVID CORSAN W.EDMUND CARNMILLEY T. ANTHONY TANSLEY ABACUS HO10USE, .FRANCIS SA4EARERO.B.E. DONALD R.dHILVERS ROBERT PH ILP ALESANDEMR 0. GORDON 33, GUTTER LANE, UNITED STATES OF AMERICA, CANADA, MEXICO, BERMUDA, AUSTRALIA, NEW ZEALAND, IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGkR J. P. SMITH C H EA PS I D E, SOUTH AFRICACENTIAL,EAST AND WEST AFRICA, BELGIUM, FRANCE, GERMANY, HOLLAND, ITALY, SWITZERLAND. AI KIAIL LONDON, E.C.2. OUR REFERENCE 29th October 1962 A.D.Spottswood Esq. International Bank for Reconstruction and DevelopmentR 1818H Street, N.W. ___ CORRES. Washington 25 D.C. ANSID Dear Mr Spottswood, DATE Guri Project------ Thank you for your letter of 26th October and for making tentative arrangements for Armour and I to see the various officials of the Bank on our forthcoming visit to Washington. I am looking forward to seeing you at that time. My present plan is to leave for Venezuela on the afternoon of 17th November. Although I do not know if there is anything special we would like to talk to LiJhgow and Howell about, it seems rather a pity we should miss them by one day either end and I am wondering if it would be possible for them to wait over on the 18th so that we could spend that day with them in Caracas and for them to return on the 19th. Alternatively, perhaps they could come back to Washington one day sooner. I am making the iuggestion on this occasion that they should make the alteration in their programme as my visit to Venezuela is fairly short and I cannot unfortunately extend it either end. Yours sincerely, bb October 29s 1962 Dr. Manuel Peres GCerrero Cordiplan Palacio Blano Caracas, Venezuela Dear Dr. Peres Gerreros I am sending you for your information oepy of a letter I have written today to Col. Rafael Alfonso Ravard. Sincerely yoUrs, Orvis A. Schmidt Director of Operations Western Hemisphere Attachment MLWeinertmh October 29, 1962 Dr. German Otero Minister of Finance Ministry of Finance Caracas, Venezuela Dear Dr. Oterot I an sending you for your information copy of a letter I have written todw' to 0.1. Rafael Alfonso Ravard. Sinaerel.y yours, Orvis A. Schmidt Director of Operations Western Heiasphere Attachment MLWeiner: October 29, 1962 ol. Rafael Alfbns. Ravard Presidect Ceoparasion Vanesol aaa do Ouagna Caracas, Vetnesuela Deer Rafaeld To will recall that during our diaciwians auaan -,ton in 1 ep- teber we indicated our intentien to retain a suitable qualified firm to Xaa on indepidit revisew of the investamnt cost estimates of Ve Gui prosjet. Ias writing to inera ou that we have now retained the servi.e. of Coopew and IbroW* Chartered Aeoountamas, of Londo I, lgland, for this purpose and that their mission should arrive in Veaesula soon. The misaief which idJX consist of Mr. 3. Joa Pears, senior partnerl M. K. H. Armur, one of the firm's prinsipal maksgere. Mr. T. Slater of their London offtoei and Mr. Arunner of their Sew Tork ffice, is na meeting in Chicago with the iarsa -ineIng pepLe. The aiseica plans to arrive in Carawas on Novenber 1.7 and to remain there about two weeks. Mr. Pears hopes that he may meet with you sometime during Mevember 19 which would be his first working day in Vanesuela, and that you would be able subsegu*2ly to help arrange for his mission to male whatever other visits may be necessary for their purposes. We would appreciate whatvr assistance you may find it convenient to furnish to this mission. We would also very mah appresiate your hewing suitablo hotel aconimedatie arranged for them. I am nding espies of this letter to Dr. D3rman Otero and Dr. Manuel Peres uerrere for their infnsmation. With best personal regards. Sineerely yaurs. Oris A. Schnidt Director of qeratens Western Namisphere Cleared with Mr. Alod 2 cc. to Mr. Spottswood (1 for Mr. Lithgw in Caracas) 1 cc. to Messrs. Kaupisch and Straut MEWeiner:mh Oeteber 26, 1962 Mr. . John Poars Coopers & fyraid Abmous House 33 Gutter Lane Ghead London I.0.2, &agind Dear Xr. Poars. PeA Qri Pojeeet Mr. Aldoemreld has asked - to write you in response to your letter of Ootaber 16 (Reto. ), sines he will nt be in Washingtmn on November 16, Vw date yon expeet to *mm to the ShAk to disemss the Guri Project. W shAell he very pleased to arrange for you to met with the various people 00eormad wit this projet as you suggest, and also to have amtfngs with people to disuss te *iger P*oJeot. On October 22 we sent a smUl mission to Veunsla to appraise a projewt snsixtng prlanrily of a tranmission lim oenemhing the Masaga Projeat with Oarsas. This mission is xpeoted to rebtn to WashIngton about Neomber 18. It consists of Muem. Litbgu and Hawl who have spent mestime reomuty in Vonesmala in cenrnotiin with jur eham r review of the Ou froIet. Unless you think these gsctlmn am Sontzmibute to your InspecUou of the Guti hraest, I shall .. t ask the to delay their return to Washington so as to be in Veassaasla when yox arrive. I have nesa to suggest to add to the list in your letter. We shall write to the appropriate offials In manesmala regarding your visit and ask them to make awmngenmts for your aooamaodatiomn there. We shall look forward to seeing you on Nomenber 16 and at that thrn we can review with yea the remainder of your program. am el7 yod", A. D. Spotaseod odt, Poblio Utlities JxvisiP Department of Technical Operations Cleared with & a*, Messrs.Ssbm0idtAsiMr ADSsbi ct Mr.Lithgw -Vuema -ac 4- 1- & Letter No. 1 October 26, 196t Mr. John C. Li~tb$ 4/* 2WaD~ce Bftel -/V H*el lama Dear John. I trust that you reaeived the two sbles whiah we sent on liarsdAy, Oetober 25, with rsfewrsaa to the Ouri report and to agreeing to the em- promise on the mard at oAract for the CADAJ treumisgim has. AepIa of the cables are enolesAd. I hope the delay in emblig you regwrding release of the Ori ropert did not aums any difftiult. I had apeeted same anarer at least br Masday when Mr. Aldemoreld returned tra Priramtom but he told me that he bad been wmabl to talk with Orvis and Bowur about this matter during the veokend but ha thought that Orvis bed bad diseussions with *rwin. When I salled Orvis, I tand that he was out of town. When he returned I disemored that he had a tAd us Amssion with 'tief, who had agreed that if he and Sim were in agromment, the x prt eould be released. Nwrhaps Alfred had this inftonation and the eable was therefore redndant but I theught it best to send it anyway. I do not think further commat is needed regarding the ooutaost for the tranmisSan line. I am ealesing oofw at the Uatter whioh Mr. AldeIereld reoeived fra Mr. Fears of Coopers, and mW reply. I believe you earthis letter before you left. I shal let you km what reaction we receive fram Mr. Pears. Mr. Schmidt shall write to the appropriate ffticials in Vneswela regarding Peae' visit. I aseme these will inclUde 0.1. Ravard4 President of M, Dr. Oter, Minister of llasmas, and perhaps Dr. Guerrero Cordi- plan. Ib will ask Col. Ravard to make arra ments for Fears' asesamoda- tions but you should be*k into this and make sure there will be no slip-up. I shall send you captes of Mr. SohmiAt's letters as soon as they are available. I trust everything is going along well and that you and Fred are retaining yeor god health. ierely yours, A, D. Spowtad P.S. Please advise Haers-'s representative of the visit of Mr. Noat and his associates. ADS th Mr.Weiner COOPERS & LYBRAND CHARTERED ACCOUNTANTS TELEPHONE: MONARCH 4040. SIRMINGHAM, GLASGOW, LEICESTER, LIVERPOOL, MANCHESTER, SHEFFIELD. TELEGRAMS: COOPERS, LONDON. S.JOHN PEARS RONALD r.SUMNER HENRY A.SENSON,C.n.E. BRIAN A.MAYNARD VIVIAN R V. COOPER DAVID C. HOSON 8RIAN W. GRAVES GREVIE C-. .GIDLZY-ITCIIN JOMN PERFECT s .". DAVID CORSAN W. EDMUND CARNELLEY T. ANTHONY TANSLEY jABACUS HOUSE, j.FRANCIS SIEARES,O.S.E. DONALD R.dHILVERS ROBERT PHILP ALEXANDER D. GORDON 33,G UTTER LANE, UNITED STATES OF AMERICA, CANADA, MEXICO, BERMUDA, AUSTRALIA, NEW ZEALAND, IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGER J. P. SMITH , H E AP S I D E, SOUTH AVRICACERTRALEAST AND WEST AFRICA, BELGIUM, FRANCE, GERMANT, HOLLAND, ITALY, SWITZERLAND. AIRMA[ LONDON, E.C.2. OUR REFERENCE 505 25th October 1962 The International Bank for Reconstruction and Development, Public Utilities Division, 1818 H Street, Washington D.C., U.S.A. For the attention of Mr F.H. Howell Dear Sirs, Guri Project We are returning to you under separate cover the following documents loaned to Mr J.F. Shearer on his recent visit to Washington. 1. Guri Project Report (Volumes 1, 2 and 3) 2. Technical report by Electrici$, de France. We are retaining for the time being the remaining documents you loaned to Mr Shearer. Yours truly, ahf QL1AReYJ A 8R.qOOO eo MRAm U .2MO)4~ flY aqaYruuosOa 02:3TAma MRYSZNOMA.JOCsVU sReaUY@J ,woAJO ,MAfrt*MIM M .ART"000 a-fAvlmjT .allmase M30Mua 1 OJA"Ov eAS. MM0L a 0MAMYA. A MAI" 3 0 MOMXS.A YUMMMN MO0UCI. z "WAG .3.00 V " MAWIV MMWOTM V.J040 50 S JJNflC UBVAUQ.-W MAINS ,3 8 U OH 8 U OA8 A AT YO"AY ' ' 1k M A406 0N3vJlMb U q JAMOC .3 *.O.M2AZMa - - 4 t ,3MAJ q3TTUO, CP c M"VG"AOJA qjaV 3aop ---- -l' OISM3 ,A0M1AO &STATO 09AU ,Aala.A ,O ,3c iaqA3HO NYINO.R.6 kA30AA JAqtDM4N 3AvqAGVIO AYAJAM *34*3 AUAJASVOAIqTSUA AlW4A SSW ONA A8AAJ JrM M0,AInA MU. .S.o.3 ,a'o4 o j 1 ,, , A..AJM ASOMaA , ,, M IJ e . & I3e 0 .0 Q93 aqj. r..U Otid a 00- B 5. '10T r. aj 9 oll 011 13 -9. - OT 4wl qqz dNI9'L i.. 29d0 a~s 0 . . .9 '. xo 9- L - T '8201 -Toy 8,-Tqn-,,- 9. - TCl -taie a.-I 91 03 .a 3 CZ .ov 6Z 0O Iris Form No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANKr FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: JOHN ITmOW DATE: *%2 196 a/* HOTIEL TAvAuA0 CARACAS CLASS OF SERVICE: 13? GO. COUNTRY: VE=ESEA TEXT: Cable No.: OM RN13EAS GURI RVMOT MO VWEZUZANS AS DRAFT APPROVED STOP YOU SHOULD OBTAIN VM r,011N OHMETS AMD MMll BACK ALL COMIS OF REPORT "P SPOTTSWOD NOT TO BE TRANSMITTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY ISTRI BUTION: tleared with Area. DEPT. TNch, 0p3. DEPT Tehe Oe, c; e Essrs. 'Aldfwereld SIGNATUREiu~ (SIGNATURE O INDI IDUAL AUTHORIZED TO ROVE) For Use by Archives Division ORIGINAL (File Copy) (IMPORTANT: See guide for preparing form) Checked for Dispatch: . . . -- - -- - -- . K~T J ~ '14~A P~'~ rTiZ4 TTi *\ ... ............ ... .. .. . . . .... .. .. . .... .. .... .. .. .. .. .. .... .. .. .... ...... .e . . ......... ...................... .. TOR18 jb:, .sesA dew IA e- INTERNATIONAL BANK FOR RECONSThUCTION AND DEVELOPMENT OFFICE MEMORANDUM TO: Messrs. J. C. Lithgow and F. H. Howell DATE: October 19, 1962 FROM: Mr. A. D. Spottswood SUBJECT: Terms of Reference . Mission to Venezuela On or about October 22 you should arrive in Caracas to appraise the CADAFE program of expansion and continue discussions with CVG regardlng the Guri Project. In making the appraisal of the CADAFE program you should pay particu- lar attention to: 1. The necessity for CADAFE to prepare a comprehensive general program of investment for say the period 1963-72, and a more detailed program ]or say the period 1963-65, that would include all its activities, including rural electrification. This program should be based on the assumption of (i) unifi- cation of frequencies and (ii) exchanges of bulk power between Electricidad de Caracas, CADAFE and CVG that would make the optimum use of the existing generating facilities and of either Guri or a thermal alternative. 2. The amounts of bulk power that could be exchanged between the three entities on the basis of these assumptions, and the nature and form of the ar- rangements that they should work out between themselves in order to achieve this exchange, both regarding the power aspects (specific commitments as to the minimum blocs available to each entity, costs, dispatching, etc.) and as re- gards the unification of frequencies (sequence of the conversion, and responsi- bility for its execution and financing). 3. CADAFE's financial structure, its plans for financing its program, and in this connection its need for an increase in rates. 4. The capability of the existing CADAFE organization satisfactorily to carry out the proposed investment program (and in this connection the suit- ability of its arrangements with SOFRELEC for assistance in reorganization, management and planning). You should discuss with CADAFE the Bank's views on its proposals for award of the 220 kv transmission line. In respect of the Guri Project, you should discuss further with CVG the following: 1. the arrangements for the review of the cost estimates by Cooper Brothers; P a & & T 6 4 . -e de i Messrs. J.C. Lithgow and F.H. Howell October 19, 1962 2. any changes in the forecast of demand for power that may appropriate in the light of developments since the mission's last visit, in particular regarding the prospective Reynolds Aluminum plant load; 3. the nature and structure of the CVG subsidiary that would build, own and operate Guri in case the Bank were to finance it; 4. the tentative plan for financing the Guri Project, assuming (i) the present load forecasts (including the prospects for exchange of bulk power mentioned above); (ii) present cost estimates and forecasts of expenditures; 5. the suitability of the contract of CVG with Harza for the detailed engineering and supervision of the project; 6. the procedures that would have to be adopted for the award of the civil works contracts and for the procurement of the equipment, in case the Bank were to finance Guri. For the initial discussions of the CADAFE program and Guri Project you should join Messrs. Matter, Kaupisch and Straut of the Area Department who will be arriving at the same time for a general review with the Government of Venezuela of all the projects presently under consideration by the Bank. The mission is estimated to take from 3 - 4 weeks and on your return you should submit a "back-to-office" memo followed as soon as possible by your final report. Distribution: Messrs. AldewervldARpman (1) Mr. P.J. Squire (2) Area Dept. (Mr. MIatter) (4) MLas Van Gasse (2) Operational Filesf2) Division Files (2) End-Use Files (2) Chron. File (1) 1t ~' ( FE- L6 FORM FORM~75N.7INTERNATIONAL SANK FOR AND DEVELOPMENT RECONSTRUCTION INTERNATIONAL FINANCE INTERNATIONAL DEVELOPMENT CORPORATI ON ASSOCI ATION Date ROUTING SLIP NAME ROOM NO. To Handle Note and F' Appropriate Disposition Note an eturn Approval Prep Reply Comment Pe Our Conversation Full Report Recommendation Information Signature Initial Send On REMARKS From COOPERS & LYBRAND BIRMINGHAM, GLASGOW, LEICESYER, LIVERPOOL, MANCHESTER, CHARTERED ACCOUNTANTS TELEPHONE: MONARCH 4040. SHEFPFELD. TELEGRAMS: COOPERS, LONDON. S.4OUN FEARS RONALD K.S.INER HENRY A-"' NC NC.B.E. BRIAN A MAYNARD VIVIAN R.V.COOPER DAVID C. HOBSON BRIAN WaRAVES GREVILLE C.B- IL-ITCHINA C jOI4N PERFECT S.4 DAVIDY COANE ABACUS HOUSE, W EDMUND CARNELLET T:A-ANTH ONT ANE "J.IRANCIS CH EABERO.B.E. DONALD R.dHILVERS ROBERT PHILP ALEXANDER D. GORDON 33, GUTTER LANE, UNITED STATES OF AMERICA, CANADA, MEXICO, BERMUDA, AUSTRAUA, NEW ZEALAND, IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGER j. P. SMITH C H EAP S I D E, SOUTH AFRICA,CENTRAL, EAST AND WEST AFRICA, BELGIUM, FRANCE, GERMANY, HOLLAND, ITALY, SWITZERLAND. AIRMAIL LO N D O N, E.C.2. OUR REFERENCt 505 16th October 1962 S. Aldewereld, Esq., Director of Technical Operations, International Bank for Reconstruction and Development, 1818 H Street, Washington D.C., U.S.A. T.o.D. CORRES ANS'D. BY Dear Simon, DATE Guri Project I have now completed our provisional arrangements for this work with which I hope you will agree. 1. M.M. Armour, one of our principal managers, accompanied by T. Slater of this office and Mr Brunner, a Spanish speaking member of our New York office, plan to travel to Chicago on Sunday 28th October to meet the Harza Engineering people. They expect to be in Chicago for some three weeks and will be staying at the Conbad Hilton hotel. I have already written Mr Fucik about this visit. 2. I shall then meet the team in Washington on Friday the 16th November having travelled overnight from Liberia. I hope to be in Washington some time Ap, after 10.30 a.m. on Friday and would like to see you and the other Bank people concerned with this project some time after that or on the Saturday morning. My visit would also be a good opportunity to discuss some of the other work we have been doing for the Bank particularly the Niger Project. 3. On Saturday afternoon we plan to travel to Venezuela arriving that evening. I expect to stay in Venezuela for the first week and the remainder of the team for three weeks. During that time I should like to visit the damsite and fly over it spending a night probably at Puerto Ordaz or San Felix so that I can meet the more important people there. 4. I enclose a note of our suggested programme in Venezuela together with some of the people we think we should meet. It may be that you can make some additional suggestions to this list. I assume that the Bank will arrange with the people in Venezuela for accommodation there and with the people we should meet to be available. 5. Thereafter the team will return to London via Chicago in order that all points of difference should as far as possible be resolved with the engineers. It may also be desirable that Armour should visit you in Washington before returning to London. CMARaYJ A 8R3qOOO 0.0A HAAOC MoM3JZ3T *TATI4UO33A 03F3TRANO 0ara*e4M ,JOOt3VJ R0To3JWOO4A*CMA.4cgli MGOOMCJ US2OO0 MMAPO J^ R3MMUs N GJAWOR WHOL.E A3q .,AMVAM A MA*IO a 1400fl@.. YM3 0aoeoH ' 0 0 av qe, , PWArVIV WH4 M-flJOOa * 3U 0 JJVICMQ l3VANO W 0Al*E 8 *' 3 8 U OH L A8 A WA0**T Y3J18AT YMOHTWM T W' & vJ3MDGiME. a Q ERVIDMGJAAtOG " oMRASwo C.D.Amm 6 3 ,HA.J F13 TT U 0 * OaO4,G RaMGAX3JA qJIMq TA31OCO ___ UIAP3U ,001X3N ,A ,A SSAMnNOETYS07M ,3 . ASr A M6AAM JA444 ,^O"A 40 ,AVAAM ,A'7 ,0HAJA3S WXM AUAMTBUA A0IN1A TaZW CPA Te3,JATMO.AOP1A MTUCO .3.0 3m IOO HO I3MMWaXW JATI ,OWAUOHAH ,s0WAUa .IUIOJB & - o - LLL r .x:xx-.:x -:xx::ssm. ..- - xx -. xx.- tit; v A '10 '0 101 c a - 4 -. .2, 0 a1- 7 aC .o.a..- . . .. jA . ... . - .. s.-0 . .J ~ 0 'S . .d. . - S oj In 1, 'q nod-, 'MB S. Aldewereld, Esq., 2. International Bank for Reconstruction and Development. 6. I would expect our draft rep ort to be ready mid January 1963 when either Francis Shearer or myself together with Armour will then visit-Chicago to discuss it with the engineers and thereafter visit Washington to see you. I shall be glad to have your comments on this programme. Yours sincerely, ahf GURI PROJECT TIMETABLE Week Commencing October 29th ) November 5th Chicago (Armour, Slater and Brunner) November 12th ) Days November 16th (Friday) Meet S.J. Pears in Washington about 10 a.m. - Visit World Bank 10.30 a.m. onward. November 17th (Saturday) World Bank in morning - Fly Venezuela (via New York) in afternoon. November 18th (Sunday) Free day. November 19th (Monday) Meet officials. (a) Col. R.A. Ravard (President C.V.G.). (b) Dr. M.P. Guerrero (Cordiplan). (c) Dr. H. Otero (Minister of Finance). (d) Harza representative. November 20th (Tuesday) Fly Macugua, also over the damsite. Meet officials :- (a) Mr Eakin (Kopper Steel Co.). (b) Mr Batista (Petroleum (c) Mr Ledesma (Cordiplan). . Night stop in M&cugua. November 21st (Wednesday) (a) Visit damsite by road. (b) Tour of Macagua hydro-electric scheme. (c) Fly Caracas. November 22nd (Thursday) Meet officials :- a) Head of Caracas Electricity Corporation. b) Head of Venezuelan Development Corporation. (c) Ministry of Transport. November 23rd (Friday) Meet :- (a) Representative of Venezuelan Railways Corporation. (b) Ministry of Health. (e) Ministry of Works and Surveys. (d) Ministry of Labour. (e) Ministry of Education. November 24th (Saturday) Second meetings with :- (a) President C.V.G. (b) Cordiplan. (c S.J. Pears flies to London. 2. GURI PROJECT TIMEIABLE - Continued Da November 25th (Sunday) Free day. November 26th (Monday) Meetings with contractors etc. 27th (Tuesday) Meet withntc 28th (Wednesday) Report writing. 29th (Thursday) Return to Chicago. ahf COOPERS & LYBRAND SIRMINGHAM, GLASGOW, LEICESTER, LIVERPOOL, MANCHESTER, CHARTERED ACCOUNTANTS TELEPHONE: MONARCH SHEFFIELD. TELEGRAMS: COOPER LONDON. S.JOHN PEARS RONALD F. SUMNER HENRY A.BENSON,C.B.E. BRIAN A. MAYNARD VIVIAN R.V.COOPER DAVID C.HOBSON BRIAN W.o RAVEB GREVILLE C.B.GIDLEY--ITCHIN JOHN PERFECT S.,J.DAVIO CORSAN W EDMUND CARNELLEY T ANTHONT TANSLE ABACUS HOUSE, J. FRANCIS SHEAR$t,O.B.E. DONALD R.dHILVERS ROBERT PHILP ALEXANDER D. GORDON 33, GUTTER LA N E, UNITED STATES Or AMERICA, CANADA. MEXICO, BERMUDA, AUSTRALIA, NEW ZEALAND, IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGER J. P. SMITH C H EA PS ID E, SOUTH AFRICA.CENTRAL,EAST AND WEST AFRICA, I E.C.2. LONDON, BELGIUM, FRANCE, GERMANY, HOLLARD,ITALY, SWITZERLAND. A L OUR REFERENCE 505 16th October 1962 M. Piccagli, Esq., International Bank for Reonnstruction and Development, 1818 H Street, Washington D.C., 10 U.S.A. Dear Mr Piccagli Guri Project I enclose a copy of a letter I have today written to Mr Aldewereld concerning our plans for reviewing the, capital estimates of the above project. Yours truly, ahf. aWARSYJ A aq39qOO $0-AAZ1 8TOWMr3J5T 8T&AY&UOO3A 0313TRAHO *53TEw DMAM ,JOOWc MJJA.5UTS30W. , A ~ @qO MAAO.3T ASMMUSI 0 JAM5 O.A3q .M0%, a Ois 112"a C vAMYAM.A MAMSE 3 .0 - A @.A Y1A.3 e 60 0* 0 5350 V A SAIVIV Mm*TI,-53.Oc a a Aso 4 m Me 5 ,38U ON 8 UO A A Y'M*55 BJ*MAT YMHT.A .r a '0'., "JJJMNA:) amumO Iw 5"O W essVa4.b S 0JA500 3.A.omAsa -01, M* T03R05 1314AJ 3TTUO ,CC "05"0 0 " 505*534* aum"S*.5 ,OI. A CS-.HAD ,Aoo " 035*4o 031Mu , a I eq A3 N HM0 . A 53CAMA J- i*5 II ,35 . MIS AYAJAM .A*5 ,00ACA31 IWE1 ,AUA5A U AW04A T3W <0A TeA3,JAA*T5OAf^l* mTu*4 .S.0J3,140 OWS 0 a K0A.J 33mmmum Flu JY 't 'I. J ~~ B eu,~ V' .. j j3' ila., 006 1 130 Zql JJ COOPERS & LYBRAND BIRMINGHAM, OLASOOW, LEICESTER, LIVERPOOL, MANCHESTER, CHARTERED ACCOUNTANTS TELEPHONE: MONARCH 4040. SHEFFIELD. .ELEGRAMS: COOPERS, LONDON. S.,JOHN PEARS RONALD P SUMNER MENRY A BENSON C.B .E. BRIAN A MAYNARD VIVIAN R.V.COOPER DAVID CUHOBSON BRIAN W. RAVES OREVILLE C.B. GIDLEY-KITCHIN JOHN PERFECT J. DAVID CORSANAB C W.EDMUND CARNELLEY a T. ANTHONY TANSLEYA AC S S H U H0U E E J.FRANCIS SHEABKRO.B.E. DONALD R. dHIL VERS ROBERT PHILP ALEXANDER 0. GORDON 33, GUTTER LANE, UNITED STATES OF AMERICA, CANADA, MEXICO, BERMUDA, AUSTRALIA, NEW ZEALAND, IRAN, MALAYA, SINGAPORE, PRINCIPAL MANAGER J.P. SMITH C H EA PS I D E, SOUTH AFRICACENTRAL,EAST AND WEST AFRICA, BELGIUM, FRANCE, GERMANY, HOLLAND, ITALY, SWITZERLAND. ALJn LONDON, E.C.2. OUR REFERENCE 16th October 1962 S. Aldswerelt, Rsq., Director of Technical Opeticms, International Bank for Reconstruction and Development, 1818 H Street, Washington D.C., U.S.A. Dear Simon, Guri Project I have now completed our provisional arrangements for this work with which I hope you will agree. 1. X.M. Armour, one of our principal manaers, acmapnied by T. Slater of this office and Mr Brinner, a Spanish speaking member of our New York office, plan to travel to Chicago on Suaay 28th October to meet the Harsa &igineering people. They expect to be in Chicago for some three weeks and will be staying at the Conad Hilton hotel. I have already written Mr Fucik about this visit. 2. I shall then meet the team in 'RAshington on Friday the 16th November having travelled overnight from Liberia. I hope to be in Washington some time after 10.30 a.m. on Friday and would like to see you and the other Bank people concerned with this project some time after that or on the Saturday morning. My visit would also be a good opportunity to discuss some of the other work we have been doing for the Bank particularly the Niger Project. 3. On Saturday afternoon we plan to travel to Venezuela arriving that evening. I expect to stay in Venezuela for the first week And the reminder of the team for three weeks. During that time I should like to visit the dsmsite and fly over it spending a night probably at Puerto Ordas or San Felix so that I can meet the more important people there. 4, I enclose a note of our suggested programwe in '7A.em.ala together with *am1 of the people we think we should meet. It may be that you can make some additional suggestions to this list. I assume that the Bank will arrange with the people in Venezuela for accommodation there and with the people we should meet to be available. 5. Thereafter the teem will return to Lordon via Chicago in order that all points of difference should as far as possible be resolved with the engineers. It may also be desirable that Armour should visit you in Washington before returning to London. 8. A34gimv#A Nmq., 2. Internat*iOl bSmk for boa trUCtUon anA Dsmlopznt. 6. w uou3A expoet ,ur 4ftt rzort to be rgy m14 Juary 196) *an sithwr Franis Swez'er or rssif together with Armeur vil tbem visit -iloeso to disauss it with the ersiwrsm AnA thereafter visit i"OhInztan to see you. I shall be gl to have your commute an this progrsme. Yours sincerely, JOHN sht QUBI PxOJNCf TIMYTABLE Week Cgwnacins October 29tA November 3th Chicago (AzuoMw Slator and Brunnr) November 12th November 16th (Friday) Meet a.J. Pears i Washington about 10 a.m. - Visit World Balk 10.30 am. onmamd. November 17th (8atUr4*Y) World Bank in morning - Wny Veaenuela (via New York) in afternoon. November 18th (SWOAy) pre. day. November 19th (Mwnday) Meet offioials. a Col. I.A. Ravard (President C.V.G.). b Dr. N.P. Glurrerv (Cordiplan). c) Dr. E. Otero (Minister of ince). e d) Harza representative. November 20th (Tuesday) Ply Mecugaa, also over the damaite. Yet officials I- &I Mr lakin (Kopper Steel Co.). b Mr Bat ista (Petroleum)" 0 Mr L*des* (Cordiklan.i Night atop in MMougua. November 21st (Wedneaday) (a) Visit dea"its b road. (b) Tour of ywasgua hydro-eleatrie scheme. (0) FlY Caracas. November 22nd (Thursday) keet affioials i - (a) Head of Caracas 12*ctriaity Corporation. b) Noad of Venesuelan Develoymont Corporation. o Ministry of Transport. November 23rd (Friday) Meet : - (a flepresentative of Venezuelan Railways Corporation. (b Ministry of Health. () Ministry of Works arA Curveysk (d Ministry of Labour. (,) Ministry of ducation. November 24th (Satmfay) Seeond meetings with 3- (a President C.V.G. b Cordiplan. (c 8J. Pears flies to London. 2. GMRX PROJ=T TDMABIE - Continead No ber 2 th (&=n"Iy) Free Ya'. 2t Meetings with oontrators et. ahf R 48 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OFFICE MEMORANDUM TO: Files DATE: October 12, 1962 FROM: W. Kaupisch SUBJECT: Meeting with Venezuelan Delegation re CADAFE and Guri The management met with the Venezuelan delegation to the Annual Meeting twice, first for a short preliminary exchange of views on September 21 and subsequently, on September 25, for a more substantial discussion. The following is a summary of the second meeting. Present were: From the Bank: Mr. Knapp Mr. Schmidt Mr. Matter Mr. Piccagli Mr. Kaupisch From the Government of Venezuela: Dr. German Otero, the Minister of Finance Col. Rafael Alfonso Ravard, Chairman of the Guayana Corporation Dr. Manuel Perez Guerrero, Head of Cordiplan Mr. Vallenilla, Chairman of the Venezuelan Development Corporation. Mr. Knapp informed the delegation of the Bank's position regarding both the CADAFE Investment Program and the Guri Hydro-electric Project, following the lines of the attached position paper. Mr. Knapp continued by stressing the importance of our getting an independent check of the cost estimates of the Guri project before finally making up our mind regarding its economic justification. He said that we had already approached Cooper Brothers for such a review of the estimates and that we would expect to make final arrangements with them shortly. He said that assuming this review were to confirm, within a reasonable margin, the original estimates by Harza, he saw no unsurmountable difficulties in the Bank financing the Guri project. Mr. Knapp then expressed the hope that, in case we were to finance Guri, we would be able to obtain participation from other sources, not because we were frightened by the amount or by its risk, but because he thought Guri could well be a very convenient vehicle for establishing the credit of the Venezuelan Government in the private capital market. Files -2- October 12, 1962 Dr. German Otero raised the question of whether it was realistic to separate the appraisal and discussion of the CADAFE and Guri projects, since the Bank seemed to make the financing of the CADAFE program con- ditional upon unification of frequencies, to which the private company serving Caracas was, however, not likely to agree unless it saw the prospects of being able to buy large blocks of power from the Guri project at the latest in 1967 or 1968. After considerable discussion, it was agreed, however, that if Guri were not built the private company could probably count on the same amounts of power becoming available from large thermal plants that the Government would have to build as an alternative;: to Guri, and that the company should, therefore, in either case have an incentive to convert. The conclusion was that the Bank should proceed according to its original concept of appraising nd financing CADAFE and Guri separately. Mr. Vallenilla indicated that CADAFE was very anxious to place its orders for the transmission line without further delay, and he asked whether the Bank would see any objection to this. Mr. Knapp replied that this was up to them, but that, if they were planning to ask the Bank for reimbursement of past expenditures on the line in case of a possible loan, they should not decide on the award and sign the contract before the Bank had reviewed the bids and was satisfied that its requirements of inter- national competitive bidding had been satisfactorily complied with. Mr. Vallenilla said that he would have all the bid comparison sent to the Bank immediately, and he would very much appreciate receiving the Bank's comments on it in the very near future. Attachment Cleared with Mr. Matter cc: Mr. Schmidt Mr. Alter/Dominguez Mr. Straut WKaupisch/AEMatter/mv 6, A' VE N E Z U E L A Guri Hydroelectric Project and 230 kv Transmiss n Line Recommendations of a Bank position and of the next steps to be taken A. Background The Government of Venezuela requested early last year that the Bank finance a 230 kv transmission line from the Managua hydro plant in Guayana to Caracas. Early this year the Governmnent asked for financing of the Guri hydro project and reiterated at the same time its request for financing of the transmission line. A TOD mission appraised the two projects in the field in June and has so far prepared two preliminary memos, one dated August 1)4 and the other September 10, 1962. A Venezuelan delegation consisting of the Minister of Finance, German Otero, and the Head of the Corporacion Venezolana de Guayana (CVG), Rafael Alfonso Ravard, is presently visiting the Bank to obtain an indication of the prospects of Bank financing for these projects. The purpose of this memo is to formulate our present position in this regard and to suggest the next steps to be taken. B. Creditiorthiness A now economic report on Venezuela is nearing completion. It concludes that Venezuela is creditworthy for such large amounts that creditworthiness vould be no obstacle to Bank lending for these projects. C. The 230 kv Transmission Line Tha appraisal so far indicates that this line is economically justified, whether electric power will be supplied to its service area by the Guri hydro- electric project or by a thermal alternative, provided that the Caracas system is promptly converted to 60 cycles. We suggest, therefore, that we proceed promptly to complete the appraisal of this project, by sending a mission to Venezuela in October. We assume that CADAFE would be the prospective borrower, in which case we suggest that our appraisal and possible financing include not only the line but the entire investmnt program of CADAFE during, say 1963-1965, and that CADAFE would in turn be limited to this program during the period. VEUIN-ZUE iA -2- transmission line and the One of the conditions of our financing the 230 kv of frequencies in its service rest of CADAFKL's program would be standardization consideration of the area and in Caracas. At a certain stage of our further to see an agreement between all the proposed financing we would want, therefore, and by whom the conversion would parties concerned that would spell out how, when be carried out, and who would pay for it. D. The Guri Hydroelectric Project from the view- The appraisal to date indicates that the project is feasible good case can be made for it from point of engineering, and that a reasonably the viewpoint of Venezuela's economy, provided that the cost estimates prepared by Harza for the civil works are valid. A substantial overrun of the cost of the civil works would, however, considerably affect the economic justification of the project. We suggest, therefore, that the present estimates be checked by an independent consultant before we reach a definite conclusion in this regard. We expect that such a check can be made by the end of this year. We assume that the borrower in the case of the Guri project would be a subsidiary of CVG owning and operating all of CVG's present and future power facilities. We suggestthat the mission that would visit Venezuela for a completion of the appraisal of CADAFE would also discuss with CVG the forma- tion of this subsidiary and a number of other aspects that would affect our final judgment of the project, such as the organization and administration, arrangements for detailed engineering, procedure for inviting bids for the civil works, etc., always with the clear understanding that the final decision on Bank financing of the project would have to await the outcome of the check on the cost estimates. E. Some General Asects Relating to Both Projects We would want to inform the Venezuelan delegation already now of two basic requirements that would have to be met in case of Bank financing, namely: (i) All contracts to be financed out of possible Bank loans would have to be awarded on the basis of international competitive bidding. In order to avoid all possible misunderstandings on this point, we suggest that no.awards be made for any major item for which Bank financing might later be sought before the Bank has reviewed the bid comparisons (starting with the comparisons of those already received for the transmission line). Likewise we suggest that the procedure for inviting bids for the civil works for Guri be discussed with the Bank staff before any invitations are issued. Again, we are prepared to discuss these matters with the clear provision that this does not in any way engage the Bank in financing the project. VENEIZUEIA -3 - (ii) All planning, designs and comparisons of bids would have to be reviewed, and construction supervised, by consultants acceptable to the Bank. In the case of CADAFE this assistance by consultants would have to be extended to its organization and administration, and to long-range technical and financial planning. Department of Operations Western Hemisphere October 12., 1962 FORM No. 57 INTERNATIONAL DEVELOPMENT I INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT I CORPORATlON OFFICE MEMORANDUM TO: Files DATE: October 11, 1962 IF -Mario Piccagli EBJ : Venezuela - Guri Cost Estimate Review When Mr. Pears of Cooper Brothers visited the Bank during the week of October 1, the question of investigating the cost estimates for the Guri Project was discussed with him in detail. As a result of these conversations, it was agreed that Cooper Brothers would undertake a review of the cost estimates prepared by Harza for the Guri Project in a manner similar to that followed for other projects such as Kariba, Volta, Niger etc. Cooper Brothers will begin work on this review on or about November 1 and it was agreed that they would begin with a short visit with Harza in Chicago to last up to a week. On this occasion they would obtain from Harza detailed background on the work dane by the consultants in preparing their own estimates. After completing work in Chicago, the Cooper Brothers team on its way to Venezuela would stop briefly in Washing- ton for a briefing at the Bank. Mr. Pears tentatively estimated that Cooper Brothers might reach preliminary conclusions in about three months after beginning work. It was agreed with him that specific terms of reference for the firm covering this work would be drafted after the firm's team had had an opportunity to discuss the detail of the estimates with Harza in Chicago. Mr. Pears was given copies of the principal reports dealing with the Guri Project to use as an initial briefing of the Cooper Brothers team. MP: jak cc: Messrs. Aldewereld Lithgow Schmidt Kaupisch Div. Files October 3, 1962 Hi. 3useflency The British Ambassador Sir Douglas hunk, .C.M.G. British obhassy Caracas, Venesuela Dw Sir Doulassi \V 9[-x Mr. Diawnd has forwarded to as your inquiry about the status of the Gwri projct and a copy of his reply to you. We are surrently planning to have a mission go to Caracas the latter part of this month, Mr. Alfred 1. Matter, i* has suaeseded Mr. Diamond as Assistant Director of this Department, will be with the mission and 1Ill call an you to let you know how matters stand. Sincerely yours, Orwis A. Schmidt Director of Operations Western Hemisphere S/afp ot Messrs. Matter, Kaupisch/Straut Ootober 1, I96e Sir Douglas Bun hritish Ishassy Apartado 126 c&rsOas, VRNEZUELA Mr dear Sir Dwlass tank yOU V$07 .ah for yaw letterof Setmber a. You are quite right in your wanwstamtng about an official Yenesnelan visit to the Dank last week. MNmVr I an no longer privy to suh mtters. Since last I sem you I have boa sidtbeod from the Bank to the International ?ince Corpoatiam ihere, as you will see from the signature belw, I deal Wlusiv.3p with Development Bank sffatrs. I am taking the liberty of passing your note on to Orvis SchdbM, the Sank's Director of Operatimse for the Western NespheOe, It was a delight to see you again last suier, and I hope I shall have the opportunity again before long. With best regards to La4Y Busk and yourself, inrr yours, Director Devolnput Bank Services ce: Mr. Schmidt (with Sir Douglas Busk's letter) September 27, 1962 Dear Dr. Peres Quorreros I am sending you herewith a copy of the memorandum on your talks with Ilectricidad de Caracas as drawn up by the private company. We hope o be in Venesuela sometime during the second half of October but I shall let you know about our precise dates. With best regards, Sincerely yours, Wolfgang Kaupisch Departmnt of Operations Western Nenisphere Enc. Dr. Manuel Pere Guerrero Cordiplan Palacio Blanco Caracas, Venesuela h/4WKaupisch/mv DLB4,2 From Sir Douglas Busk, British Embassy, Apartado 1246, Caracas, Venezuela September 24, 1962 My dear Bill, We understand that the Minister of Finance will shortly be with you to discuss the financing of the Guri project. Needless to say any information you feel able to let me have in confidence about the outcome of your talks will be very much appreciated. Yours ever, (D.L. Busk) W. Diamond, Esq., International Bank for Reconstruction and Development, 1818 H. Street, Washington 25, D.C. U.S.A. ) \ -- x 1 I- * aa.M, ik.G.. OS. r. ebedt, ~ Jtr. L.t~ -. 1K. 12, 1gumind iLattor, u.be L 1962 The analmd usuend 1Ystalument ad he lor atwwy 4 o t afoct tw vUbstnew Of our pasitini as give in thw !rilfin #.rea, It underine tha bWportwuw of huving Mersea's oist astimata aheaked. 4. Aldeamro seomo to have fotmwt a firm with suff tlent aperIiene in large-soal Vdre prjosets. The study alms dImeloswm the fast that aceptvd Metheda f evaluatien lead to absrad reouits when used on the basis of prmisoe th aro not n t for. Thw nsent wortb method employed is -vsnt an the uosfmal lifetim of a p"Je.t. Applied to leo than one-third of this urwfu1 lifetilm and the rv.eai vale at the Inve1tmnmt being sogLoeted the result. be*es wna ing . Thim app is to the period of eamari irIV 1%2 to 9. I do not know vhat aspumpticns nrnom t ed thbs orlod -f omparsen. If there is Mrass tO "eSM electric pwsr wwald or amuM iA that 17dr- abeut 2 yenrs, time be sbstitute4 by anoher 5,1es Of r gy so m.1h obasrr that srdro eflotric Istallations would ha~v silply to be ebandon4d, none should be bplt a15where in the wrld. I find it much mrn r* maabL to asum that such wlturnAtIVe Us*s woLud be faind for efs as to Iserase the premnt irtas - a pms"obllity iseh )as not Lean teea Inte aseewt. The f lst stiuy point4d out that gam Ou&M not esseveably be ahegper them assurad fer TOD'. loulatinM. I do Met see Wint asorame*s we have that It wili rt be mre expeaive them assumed and posesby evon mere .pnmiv thew It Is ted*. The Otr--aU lImps'siin of this 4udy Is that some advntme has be=m gives te the theral eltaruativw in ohesig paIses. Suah an aptroeh uppmey to be fully Justified esasideriag the ordr Of Investaut Iav.ved beesmes it provies a esued sfsey margin in esm ing the sonmmie justifi- satiem of Gui. I esasider lurt an attrastivs proposition If we meWm te got an sa- eb~e f mquencW aenv~e*ion, s q.Uw u4nifionti-in phd a prwrcor setup Of . DMInguas is 13akiftA it the questIeM Of alteomative elaysmet Of f4unde " the Imfauense the finanoing of Gr woald haw en exterml debt nd Int al pulaic Invorstmt and hopes to provide some etes by tmrrsow. WKaUiMeb/y FORM No. 57 (5- 48) INTERNATIC - BANK FOR RECONSTRUCTION AN- DEVELOPMENT FICE MEMORANDUM TO: Mr. Mario PiC gil DATE: September 12, 196a FROM: J. C. L and F SUBJECT: Guri Project - Venezuela We refer to Mr. Knappts September 10 memo to Mr. Aldewereld Y querying the correctness of the cost, given ih our September 6 memo to you, of 6.5 mills per kwh for hydro power in the year 1968. The figure is correct and reflects the heavy investment in the Guri proj- ect up to 1967, coupled with the fact that the capacity of the first stage would only be utilized gradually. The total investment in the Guri hydro facilities, up to 1968, would be Bs 528 million for a firm power output of 297 MW. This represents a cost of $390/kw which com- pares with a cost of $100/kw for thermal power. As to depreciation, it does not have a very important bearing on the "excess" cost of the hydro, and this is partly due to the fact that, as stated in para.2, annual capital charges were computed as level annual payments for the 60-year life. In fact, the 6.5 mill cost for the year 1968 breaks down as follows: - Capital charges previously existing generating facilities 2.85 - Capital charges Guri 2.11 - Capital charges Transmission 0.38 - Operating expenses, excl. fuel 0.66 - Fuel o.49 Total - 6.49 If anything, the method used understates depreciation in the early years, as compared to straight line depreciation. This can be shown as follows: Straight Line 1st year - Interest 0.1000 Deprec.(60 yrs.) 0.0167 Total - 0.1167 Level Annual Any year - Interest) 0.1003 Deprec. ) JCL: FH/bli Mr. W. Kaupisch September 32, 1962 L. K. Domingues VENEZUEIA - Gui Proifect In line with your request this memorandum elaborates the cuments on T.O.D. Is appraisal of Guri which I advanced to you yesterday. Technical Computations 1. Until T.O.D.'s final report shaving the detailed computations is available dur comments should only be tentative. 2. There may be some questions regarding shadow prices for gas. In addition to the justification of assuming that gas may eventually become a valuable raw material, instead of a permanent free good at the source, as assumed by TOD, it seems that the price of gas delivered in Caracas may be understated. TOD's memo of August 14 states (p. 9) that this price includes only the operation and maintenance costs of the existing pipeline until such time -- around 1975 - when its full capac- ity will be reached. I would think that depreciation of the pipeline investment should also be charged. 3. In connection with the argument that higher shadow prices should not be charged for gas because of the possibility that, say, atomic energy may substitute in the future present forms of energy generation I would point out that such developuent would probably affect *heral generation more than hydro. After all, the unit cost of hydroelectric generation after 297T is estimated by TOD to become lower than that of thermal generation. 4. I see no reason to raise Harsals estimate of Gurits con- struction costs if, as indicated in the same TOD report (p. 5) the estimate was found to be "rasonable for the purpose of economic studies". If "reasonable", the estimate must already make allowances for possible increases in real costs. Nature of Estimated Return 5. All factors M W it seems that the return on the additional investmen iy bj -- as opposed to the thermal alternative - will be of the order of $%; 10%. This is a reasonable long-term return on a safe investment in a country where the saving rate has been traditionally high. As evidence of the reasonableness of this rate it may be pointed out: 2 .. September 12, 1962 1. IkLidends on shares of business corporations quoted in the stock exchange averaged about 9% of market prie in 1961. The spread, dopending on the industry was from 6% (textiles) to 1% (construction materials). Yields have tended to go up since 1956 when they averaged 5.3, with a range of 4% to 8%. ii. Yields of private bond issues ranged from 6% to 10% in 1961. iii. The bulk (35%) of private bank mortgage lending in 1960 was at the rate of 12% per annum (legal maziumu). Approxi- mately 60% of the mortgages were for periods up to 2 years. iv. Profits of foreign capital as a percentage of not invest- ment in 1959 were estimated by the central bank as follows: Banking 7.67% Services 10.23% Gonstruction 10.33% Insurance 11.19% Trade 14.04% Petroleum 16.12% Xining 17.19% Manufacturing 17.76% v. Government Treasury Bills (placed with the banking system, insurance companies and the oil industry) and bonds of some autonomous institutions carry interest rates of between 4% and 6%. Given the placment circumstances these rates are probably not representative of the cost of capital to Government under free market conditions. Relative Magnitude of Guri Investment 6. Investmut in the first stage of Guri - to be carried out between 1962 and 1968 - is estimated at Be. 1,100 millon (us$241 milion) of which US$175 is in foreign eowhange. The second stage (1975-1979) would require an investment of Be, 725 million (TS$160 million). The following estimates of relative magnitude can be made The total cost of the first stage (Be. 1,100 million or B. 160 million per year) during the construction period would represent approximateLy i. 6/10th of 1% of average GNP during each of the construction years -- even assuming that GNP increases at the rate of only 3% per year. 3 --- September 12, 1962 11. 2,7% of Central Government revenues -- even if the budget is frozen at its present level. iii. 2% of the net value of exports in each of the con- struction years - assuming that exports remain at their present level. Since only about two-thirds of the total construction cost represents imported items the actual burden an annual current exchange receipts is less than 1*5%. iv. If the full cost were financed through an 18 year, loan the annual debt service would be about lj% $21 million or 1.2% of current exchange receipts. Since Guri is only an alternative to investing in thermal facilities it becomes obvious that whatever additional -- As nr be involved becomes insignifimnt in terms a potential of Venesuela. Development of the Oaysna Region 7. There are also important extra-financial arguments in favor of the development of the Guri site, visa a) The growth and industrialiation of the Guayana region will be facilitated by the certaintV of an abundant and inexpensive supply electric power. This may influence industry - both domestie and foreign - to take the initiative and plan investments in the area. The case would not be as favorable even if potential investors were assured that thermal power will be available as required. b) From a political point of view the formal initiation of work on Guri and the assurance of the necessary financing for its completion will strengthen the Government and help to raise confidence in the future of the country. Conclusion 8. In brief, everything indicates that Guri is a worthwhile project and that it deserves the support of the Bank. The case for such support is strengthened by the fact that the Venezuelan Government will in- aW case undertake it and that our participation will contribute to make it a better project by preventing mistakes and insisting on appropriate technical safe- guards. cc. Messrs. Schmidt Matter Alter LDomiogues smor TO: Mr. M. Piccagli 10 September 1962 FROM: J.C. Lithgow and F.H. Howell SUBJECT: Guri Project - Venezuela 1. Since the August l4 memorandum on this subject was written, the studies which resulted in a discount rate of about 9% have been refined. These refinements indicate that, over the full 60-year physical life of the Guri Project, the present worth of the investment and operating costs of the two alternatives would be equal at annual discount rates of 7.5% in the case of the lower load forecast and 8.25% in the case of the higher load forecast. 2. Studies were also made for shorter periods of comparison up to and including the year 2,000. (In these studies no account was taken of the remaining lives of the investment at the end of each period.) These periods and the respective discount rates are summarized in the following table: Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast "Shadow" prices for gas 1962 - 1980 0.25% Minus 1% and operating labor; and Harza estimate of cost 1962 - 1990 6.0 5 for Guri 1962 - 2000 7.5 6.5 3. Similar studies were made to find the effect on the discount rate of an increase in the estimated cost of the Guri Project and the use of current market prices for gas and operating labor. The results of these studies are tabulated below: Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast Harza cost estimate 1962 - 1980 Minus 3.75% Minus 5% increased by 20% "Shadow" prices for 1962 - 1990 3.875 3 gas and labor - 1962 - 2000 5.625 5.25 1962 - 2028 6.5 6 -2 Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast Current market prices 1962 - 2028 10 for gas and labor; Harza estimates for Guri. 4. COST OF P0mR a. It was also suggested that it would be of interest to determine the differential in the cost of providing power by each of the two alternatives if it was assumed that whatever investment was required would receive an equal return, say 10%. This was done by estimating the costs to generate and transmit the amounts of power indicated by the higher load forecasts in alternative system developments: one based on thermal generation, the other based on the development of the first two stages of Guri, i.e., to about 3,000 Al. The results of the study are presented in the attached graph, and summarized in the table below. The underlying assumptions are discussed in paragraph g. Estimated Cost of Electricity (at the demand end of HV transmission) Higher Load Forecast 1962 - 1995 Maximum Cost to Generate Year Demand Generation and Transmit MW Mil. kwh Major Guri Developments U.S. Mills per kwh Thermal Hydro 1962 675 4,ooo 6.5 1967 1,025 6,100 4.6 4.7 1968 1,100 6,600 1st stage in operation 4.7 6.5 1973 1,700 9,700 h.h 5.0 1978 2,650 15,000 1st stage fully loaded 4.1 3.9 1979 2,950 17,000 2nd stage in operation 3.9 3.5 1983 3,950 23,000 2nd stage fully loaded * 4.2 3.7 1988 5,300 30,000 4.0 3.4 1993 7,200 41,oo0 3.8 3.5 1995 8,100 h7,000 3.7 3.5 * Load growth beyond 1983 served by new steam additions. -3- b. The first stage of Guri would be fully loaded by 1978. It has been assumed that construction of the second stage would begin in 1975, and be in initial operation by 1979. The second stage consists of raising the dam 25 meters, which would inmediately increase the firm capability of the first stage by 400 MW, and permit the installation of a further 1100 id, to bring the total capability of the project to 3000 NW. According to the load forecast used, the first two stages of Guri would be fully loaded by 1983. c. In this tudy, expansion beyond 1983 of the nominally hydro system has been carried out with thermal installations, since no informa- tion on the third stage of Guri is available. d. Harza has estimated the cost of raising the dam for the second stage of Guri at Bs 400 million; the Mission has estimated the cost of additional generating units at Bs 325 million for the 1100 1W which would be installed. The total cost cf Guri at the completion of the second stage would be about Bs 2 billion including 400-kv transmission facilities. The average unit cost of the 3000 MW Guri Project, exclusive of 400-kv transmission, would be about Bs 550 per kw (US $121 per kw at the current rate of exchange). e. The higher costs per kwh estimated' in the earlier years of the period studied are attributable principally to the fixed charges on the large amount of reserve generating capacity which now exists in the private La Electricidad de Caracas system. Frequency conversion and interconnection of this system with CADAFE were assumed to have been accomplished by 1965 year-end. f. The study shows that for the first 10 years of operation after the completion of the first stage of Guri, annual system operating costs would be higher than those of alternative thermal generation. Hydro power would cost about U.S. mills 0.9 per kwh more than thermal power in 1968, would be equal in cost to thermal power by 1977, and would be lower in cost thereafter. The cumulative amount by which hydro power costs would exceed thermal power costs over the 10 years 1968 - 1977 would be approximately US $63 million. g, Assumptions Used in Determining Costs of Generation and Transmission (i) Operating and Fuel Expenses The shadow prices for operating labor and gas which were employed in the earlier economic studies previously reported upon were also used in the current study. (ii) Capital Costs Mission estimates of the cost of new steam plant and Harza estimates of the cost of Guri were used. The annual capital charges were estimated on the basis of 30-year lives for steam and transmission plant, and 60 years for hydro plant, with 10% per annum interest, computed as level annual payments. (iii) Investment in Existing Facilities An estimate was made of the value of generation and transmission plant in service in the La Zlectricidad system, and that portion of the CADAFE system included in the market area. Additional investment in general 115 kv transmision facilities was asumed to bear a constant relationship to investment in new generating facilities. h. Calculation of Cost of Power The total of all annual capital charges, and annual operating and fuel expenses was divided by the total system generation to yield an average year-by-year cost of energy. These costs do not include the costs of distribution, overheads, and administration, and so are not comparable to the average prices received for power sold. FORM No. 58 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (5.48) OFFICE MEMORANDUM TO: Mr. S. Aldewereld DATE: September 10, 1962 FROM: J- Burke Knapp SUBJECT: Guri Project - On suola Many thanks for sending me the attached. Am I correct in thinking that the figure on Page 1 for 1968 (last column) has been mis-typed? Also note my comment on the last paragraph of the paper. It would be interesting to know how much of the "excess" thermal costs is attributable to depreciation. This raises the question whether it would be reasonable to defer full. depreciation on the installation until it in fully loaded. What do you think? Att. September 10, 1962 Dear John: Upon ny return from London last week we have been developing bur ideas about a check on the investment cost esti- mates of the Guri project a bit further so that we are likely to be in a position to finalize arrangwmnts when you visit me on October 1. With best regards, Sincerely yours, Mr. S. John Pears Coopers & lGrbrand Abacus House 33, Outter Lane Cheapaide London, 1. C. 2 England SAldewereld:anf FORM No. 337D Mr. Kaupisnh Boom 51, IVOWRANDUM ON THE ONVERSATIONS HELD BY COL. RAFAEL ALFONZO RAVARD, DR. ANDRES 3ERMLN OTERO AND MR. MANUEL PEREZ GUERERO WIT H DR. NICOMEDES ZULOAGA AND DR. OSCAR MACHADO ZUw4cAG At the invitation of Col, Rafael Alfonso Ravard, Dr. Nicomedee Zuloaga and Dr. Oscar Machado Zuloaga were present at the Offie of the Minister of Finance on 6 September 1962 with a view to discussing the possibility of placing at the disposal of CADAFE (M.A, de Administracion y Fomento Eloestioo) through the Corporaoton de Guaywa, electrie power at present available in its system' for use in the Central System. Col. Rafel Alfonso Ravard indicated the benefits that the Venesuelan State would obtain if it were possible to purchase electric power from Electrioidad de Caracas in the period oaemmucing with the present and extending to 1968 or 1969, by when it is estimated that the Guri power station would have been eompleted, provided work on it would begin within a relatively short time. The purpose of this purshase of power would be to meet the shortfall expected in coming years in the Central Region system and to supply power to the Caroni region to meet the shortiall that will also arise in that region in the period in question, It was estimated that the capacity available over and above the present reserves of Ileatricidad de Caracas was of the order of 120,000 kilowatts at the present time and that this would have fallen to 100,000 kilowatts by the month of December of this year and would also have to meet an estimated annual rate of growth in the electricity system of 7%. Moreover, if the connection was made with the Caroni 'system, the technical reserves of Ilectricidad de Caracas could be reduced by 40,000 kilematto, which would increase the capacity available for Punta by an equal amount. To enable this purehase of electric power to be made by the Corporation de Ouayana, it will be necessary to change the frequency of some of the generating units of Electricidad de Caracas and possibly to make a change of frequency throughout the entire system, To change the frequency of a group of generating units, to meet part of this lead sa~ithout modifying the system used by Ilectricidad de Caraeas, is a relatively simple task that can be carried out in a short period of time but, on the other hand, it would remove all the advantages obtained from the interconnection of two major electrical * T .N.O ambiguous in thegAEAW N9 SECTION 1097/62 Translated From: Spanish 1/41/62 By: JHH,aAL systems, as adequate reserves of capacity have to be maintained in both systems, thus reducing the additional supplies available referred to above. The purchase of electric power referred to here would make it unnecessary for the Corporasion do Ouayana to instal the thermal power station to be known as Ouanta t, who.. capecity has been estimated as between 60,000 and 70,000 kilowatts. Part of this agreement would be, if the frequency conversion were to be carried out in the Electrioidad de Caracas system, that when it had completed the sale of electric power to the Corporacion do Gusyanas system and had absorbed by increases in its load the capacity from which it had been supplying the Coqporacion de Ouayanas, it would purchase from the Ouayanas system the additional power required to meet increases in consumption within its system, in - It was very clearly established that the cost of t f ency change should in no event be borne by Electricidad de Caracas, since the change in question is undoubtedly non-self. liquidating. It was recognised however that it would bring certain advantages of a largely intangible nature although an effort would be made to evaluate then in subsequent studies. Moreover, neither the company nor the users of its services were responsible for the change nor would they benefit from it; the Central Government, if it considered the project necessary would therefore have to meet the expenditure it involved, estimated at approximately Be. 100,000,000. It was stated by the representatives of Electricidad de Caracas that until very recently, it would have been more economical to change systems operating at 60 cycles to a frequency of 50 eydles. This was not only because such a conversion was much more simple and economical as it affected a very limited number of industrial customers, but also because the 50 cycles system was, generally speaking, better suited to Venesuela, since the future layout would principally involve long-. distance transmission and hydroelectric generating facilities with small or medium heads of water. In long-distance transmission control problems and losses at 50 cycles are substantially fewer than at 60 and in hydroelectric power generation the cost of the plant for 50 cycles is the same or less. There was an extensive discussion of various methods of making the State's contribution to the frequency change in the Electricidad do Caracas system. Among these were mentioned: A higher charge for electricity to be purchased in the 1963-1968 period. A lower and almost nominal charge for the power that Slectricidad de Caracas would purchase subsequent to 1968. An exemption of Electricidad de Caracas from Income Tax to compensate for expenditure on frequency conversion, -3 It was emphasised that a change in the frequency in the Elect'icidad de Caracas system would be a major undertaking and that the greater part of the ependiture would arise in connection with conversion by industrial and residential consumers and in the prograinung of the changes in such a way that they would not lead to difficulties with industrialists and other users of the electricity services, The representatives of Xlectricidad de Caracas stated that they would be prepared to consider the acceptance of the direct osts of the conversion of the generating units always, provided that the balance was met by the Central Government which was in favour of and had resolved to make the change. Among the factors that were of decisive importance to Electricidad de Caracas and that should be embodied in the agremuent to be made were the following, FirstY - That it should in some way be implicit in the agreement that the URRiking should remain a private firm while continuing to provide service on the terms to which it had up to the present been accustomed. SecondlY - That sales of electric power in the 196348 period should M in any way affect its services to its customers nor should they reduce its reserve capacity beyond the limits laid down previously. To this end the Corporacion de Guayana could reducs the lead on its iron and stel plants during such period as this might prove necessary and Electricidad de Caracas should retain the right to complete the instal- lation of its Taoa No.6 turbine should estimates of the future load indicate that it was necessary. Third~ - The pries paid by Electricidad de Caracas to the Corpo- racion re Zyiana for future purchases of electric power should be the subject of a contract couched in sufficiently broad terms and with sufficiently flexible clauses to ensure that it was able to purchase electric power at lower prices than those at which it could produce it by the methods available to it at the time. Caracas, 10 September 1962 TRANSLATED OCT 41962 I.B.R.D. MEMORANDUIM SOBRE LAS CONVERSACIONES SOSTENIDAS POR EL CORONEL RAFAEL ALFONZO RAVARD, EL DR. ANDRES GERMAN OTERO Y EL DR. MANUEL PEREZ GUERRERO CON LOS DRES. NICOMEDES ZULOAGA Y OSCAR MACHADO ZULOAGA Por invitaci6n del Coronel Rafael Alfonzo Ravard, se reunieron los Dres. Nicomedes Zuloaga y Oscar Machado Zuloaga, en el Despacho del Ministro de Hacienda, el dra 6 de Setiem- bre de 1962, con el objeto de conversar las posibilidades de poner a la disposicidn de CADAFE, a travos de ]a Corporacidn de Guayana, energra de la que tiene disponible actualmente en su Sistema, para el uso en el Sistema Central. El Coronel Rafael Alfonzo Ravard, expuso [a conveniencia que par el Estado Vene- zolano, significarra la posibilidad de comprar energra electrica de La Electricidad de Caracas en el perrodo que vd desde ahora hasta 1968 6 69, para el cual estiman estarra terminada la Central de Gurr, en caso de que fuere comenzada dentro de un perrodo relativamente corto. Esta compra de energra se destinarr a cubrir el deficit que contemplan para los prdxi- mos aflos en el Sistema de la regi6n Central, y para trasportar a la regidn del Caronrilos deficits que tambign ocurrirdn en dicha regin durante el perrodo. Se estim6 que la capacidad disponible por en- cima de las reservas actuales de La Electricidad de Caracas serran del 6rden de 120.000 kilowatios en la actualidad, que se reducirdn a 100.000 kw. pam el mes de diciembre de este aflo y que debe- rdn cubrir tambi6n un crecimiento estimado de 7% anual del Sistema de La Electricidad. Par otra parte si se realiza la interconexi6n con el sistema del Caronr, ]a reserva tecnica de La Electricidad de Caracas podrra reducirse en 40.000 kilowatios, lo que aumentarra la disponibilidad de [a capa- cidad para Punta en igual cantidad. (cont.) - 2 - Para hacer posible esta compra de energra por parte de la Corporaci6n de Guayana, se- rra necesario un cambio de frecuencia en algunas unidades generadoras de La Electricidad de Co- racas, y eventualmente un camblo de frecuencia en todo su Sistema. El cambio de frecuencia en un grupo de Unidades Generadoras para suplir parte de esa carga sin modificar el sistema de la Electricidad de Caracas, es relativamente sencillo y realiza- ble a corto plazo, pero en cambio, elimina todas las ventalas que se derivan de la interconex16n de dos Sistemas electricos importantes, debiendo mantenerse capacidades de reserva adecuadas en ambos sistemas, lo que reduce la disponibilidad adcional anota arriba. La compra de energra aqurpropuesto evitarra a la Corporaci6n de Guayana la instola- cidn de la Central TUrmica denominada Guanta 2, cuya capacidad ha sido estimada entre 60.000 y 70.000 kilowatios. Parte de este convenio serra,en caso de realizarse la conversin de frecuencia en el Sis- tema de La Electricidad de Caracas, el que 6sta una vez terminada la venta de energra al Sistema de la Corporaci6n de Guayana, y absorbida por sus aumentos de carga la capacidad de la cual le habra venido sirviendo, procediera a adquirir del Sistema de Guayana, la energra adicional para los aumentos de consumo en su Sistema. Combio de Frecuencia.- Se estableci6 muy claramente que el costo del cambio de fre- cuencia 'no debra ser en ning6n caso soportado por la Electricidad de Caracas, toda vez que dicho cambio de frecuencia no es otra cosa que un gasto a fondo perdido. Se reconoce que habrra certas ventalas de cordcter mds bien intangibles, pero que-tratarran de ser evaluadas en estudios ulterio- res. Fuera de ello ni la Compaila, ni los suscritores son responsable par el cambio, ni se benefi- clan de 61; par lo tanto corresponderra al Gobierno Nacional si lo considera conveniente afrontor los gastos que implica, y que se estiman en una suma de aproximadamente 10 100.000.000,oo. (cont.) -3- Se establecid por parte de los representantes de La Electricidad de Caracas, que, hasta la fecha muy reciente, hubiera sido mrs econ6mico el cambio de los Sistemas que operaban a 60 ciclos a la frecuencia de 50 ciclos. No solamente por el hecho de que la conversldn era mucho mds sencilla y econ6mica, al afector a un grupo muy reducido de clientes industriales, sino por que el Sistema de 50 clclos es de una manera general, mds conveniente a Venezuela, puesto que su configuraci6n futura serd fundamentalmente de trasmisidn a largqs distancias y generac16n hidro- elctrica con cardas de bala o media altura. En la trasmisi6n a largo distancia la regulacidn y las p6rdidas en 50 ciclos son sustancialmente menores que en 60, y en la generacin hidro-eledtrica descrita, el costo de los equipos es igual o menor en 50 ciclos. Se discutieron extensamente distintos medios para realizar la contribucidn estatal al cam- bio de frecuencia del Sistema de la Electricidad de Caracas. Entre ellos se mencion6: Un pago mds alto por la energra que adquirir6n en el perrodo 1963-1968. Un costo menor casi insignificante para la energra que la Electricidad adquiriera despus de 1968. Un desgravamen del Impuesto sobre la Rento de la Electricidad de Caracas para compensar los gastos de conversidn de frecuencia. Se insistid mucho en que un cambio de la frecuencia en el Sistema de La Electricidad de Caracas, era una labor de gran magnitud, que su mayor costo residra en la conversi6n de los clientes industriales y residenciales, y en la programacin de dichos cambips, en forma tal que no se crearan conflictos a los industriales y a los usuarios del serviclo eloctrico. Los representantes de La Electri- cidad dijeron que inclusive podrran contemplar que el costo directo de la conversi6n de las Unida- des Generadoras podrra ser hecho por cuenta de la Electricidad de Caracas, siempre y cu6ndo todo el resto fuero cubierto por el Gobierno Nacional que propicia y determina el cambio. (cont.) -4- Serran elementos de fundamental importancia para la Electricidad y que deberran quedar consignados en el conyenio a realizarse, entre otros los siguientes: Primero.- Que se dele en alg'n modo sobre entendido la continuidad de la Empresa como Entidad Privada mientras continue prestando un servicio en las condiciones que hasta ahora tiene acostumbrado. Segundo.- Que las ventas de energra en el perrodo 1963-1%8 no afecten en manera alguna el servicio a su clientela, ni reduzcan su capacidad de reserva mds ali1 de los limites antes establecidos. A ese.fin la Corporacidn de Guayana podrra reducir la carga de sus instalaciones si- derargicas durante los periodos en que ello fuera necesario, y la Electricidad de Caracas debra con- servar el derecho a completar la instalacidn de su turbina Tacoa No. 6 en caso de que las previslo- nes de carga asr to indicaran coma necesario. Tercero.- El precio de adquisici6n de energra eldctrica par parte de La Electricidad de Caracas a la Corpq aci6n de Guayana en el futuro, debra ser obleto de un contrato suficientemente largo, con cidusulas suficientemente flexibles para asegurarle la compra de energra a preclos me- nores que la que ella pueda producir par los mtodos entonces a su alcance. Caracas: 10 de setiembre de 1962 FORM No. 337D (12.61) Mr. EKauisoh Boom MEMORA NDUM- E(CHANGE OF VIEWS ON A POSSIBLE AGREREMT FOR THE CCUVERSION TO 60 C=L OF THE FREQUNCY OF THE POWIR G!NEATED BY ELECTRICIDLD DE CARACAS CA. AND FOR ITS DISTRIBUTION AND CISUMPTION IN THE METROPOLITAN ARNA, IN MSDER TO HAVE A WIFOM FREQUE(CY SISTK IN VMEZUELA. For the purpose of ezshangi g view an the above, Dr. Mionedes Zuloags and Dr. Osear Mashad. Zulsaga were invited to meet with Dr. Andrds Gerada Otaro, Minister of Fiame,, with Colonel Rafael Aloeso Ravard, President of the Corporalids Veneelana do OsMtama, and with Dr. Xhmael Pdres Onerre., 1nd of the Ce*tral Offise for Coerdination and Planning. The soeting was held in the Offiee of the Minister of Finance on 6 September 1962. After a preliminary disussion ef the various asposts of this psoWiM, som points were al the following cafelusioa alarified were reashed: 1. It is essem"l &av urgent to votty the frequaiy system of the sountry - a fast whieh ill gr*e&Y benefit the Nation - within the fran.- work ot the hyd&velectris development of the Carcmt. Siie the easeution of this somplea task will affect large sgments of the pepulat4a of the astropolitas area, It should be very earefully planned so that it can be oar$id out with a iniumn of ineenveniesso to the cessuers. 2. Electrie dad de Caracas is, in pfitwiple, willing on a mutually advantageose basis to enter into the noessary agreinmnts with the National GovernsaMt to onvert the frequemay of the pomw in the area it serves from 50 to 60 oyales, a oeoversion that would require the approval of the appropriate authorities of the eampany. 3. Elestricidad do Careass has at present a surplus installed spealty of some 120,000 IN, whith by the end of the year will be reduced to 100,000 KW. This surpubs is esnted over and above the wesessry reserve, at present 100,000 KW (one 60,000 K uit and one 40,000 KW unit). one the generating systms of Eleotricidad de Caracas and of Caront are intemmeosated, naly the 60,000 KW imit will be needed as a reserve. Eleotrioidad de Caraeas may therefore have a surplus of up to 140,000 KI, it being andersted that EleetriIdad de Caracas mist meet the increase in demad that has lately been 1 a year, but that in previvin years had reached 20% a year. 4. Conversion would start as soon as possible and would be carried out over a maxitom period of four years, the completion of the work to 'TRANSLATIONSECTION Translated From: By: 0 100/62 - Spanish 10-3-62 EA nur -2. sosi" Ath twe beginmg at opOrAtiNe othe RQw &**StJ*W Plant ot the Owi Due Is its iWiial atp (350,000 D)l tis woul be oa44 to thm sommtia o qstty Of twe Nasapa 11 N m*eats Punt In te sa , ush Italot behag seeol In te tid yew ofthe e- strustia or the *aft DM. . aift pgBa ly sS* mathe aftw the areemets are teaom).y .. m&ln, Rleeteid.g 4. Canes .. u.4 p"t at the fIspts. of AMME tW pomw gomvtad by ta uate of Arme.tto uitt 20,O0 XV emh. 6. The N*At* s1 oovmrfnut end E-stwiada d csaes WM24 wiwthale ajoiatly te floamsmhg Ot the -awsruimo. mWieA ws a"* of the poesib2ty tbat the NatSamal Gom-.auvam ay imefat to fbasase the eminses IiftIoved i a4Ptiag the msehiaNWy ad 4lsti qplisa" Ot Me "W"n~ of te u wtaking. Rletrisi4 Ie owases, a te, wal dEthy the uqpeneem isurred Is the omevwoim ts u s g pmwtiug mite ad the lpoS R. inwaved in the standr Md pmpg&=Ltng of the projest. ?be altentie of *bteaimlxg s al fisaming was also mtmiadm a ocammst ith te pMauoiloy %a the omersia n he pow for out of te prtits to be derisud a the we of the ehap pwar tftm the coreut. 7. "leeta4*14s4 VE Mmas will, vith the hataim Govsint, i--Aits*4y taka the seau sy stq ftr mereitifg Me t51i*StA1 stttthot will help In the pre atm of this pojest, - AeVt " sast"A. S he pT I telo iry t%"dio wulE tus t basis em n iaI to eamla4 te fimal age l-, w4eb yuld hare to be p"wood by the s t awtherwi&L e ot tbe Natiemul ooweammt and of e Elts" wetmma It was aeed to koep i eteet for tie "pee ot awmeftu the ue~tlatIma eUenlag to the eomsuieu ad to wet with the Nlaistews or Deuvleommt and of Xams and Ispe ewbms, assli as with offteales trea the -'Does .a Vmullma 4. Pmste (Tomes3eua Deks-aest Capswtiam) Caswses, 7 8eptsum 2968. MFQ/eb, TRANSLATED OCT 31962 I.B,R.D. MEMORANDUM. CAMBIO DE IDEAS SOBRE UN POSIBLE ARREGLO PARA LA CONVERSION DEL CICLAJE DE LA ENERGIA ELECTRICA GENERADA POR LA ELECTRI CIDAD DE CARACAS C. A. Y DE SU DISTRIBUCION Y USO EN EL AREA METROPOLITANA A 60 CICLOS, CON EL PROPOSITO DE LOGRAR LA UNI- FICACION DEL CICLAJE EN EL PAIS. - Con este prop6sito se invit6 a los sefnores, doctor Nicomedes Zuloaga y al doctor Oscar Machado Zuloaga, a un intercambio de ideas con el doctor Andr6s Germin Otero, Ministro de Hacienda, Coronel Rafael Alfon zo Ravard, Presidente de la Corporaci6n Venezolana de Guayana y el doctor Manuel Perez Guerrero, Jefe de la Oficina Central de Coordinaci6n y Plani- ficaci6n. La reuni6n se efectu6 en el Despacho del Ministro de Hacienda el dia 6 de septiembre de 1962 . Despu6s de tratar en forma preliminar los distintos aspectos que presenta esta tarea, se establecieron algunos hechos y se llegaron a al. gunas conclusiones, a saber : 1) La unificaci6n del ciclaje en el pars es tarea esencial y ur- gente . de la cual la Naci6n va a derivar amplios beneficios - dentro del marco del desarrollo hidroelectrico del Caronf. En vista de que es una tarea compleja cuya ejecuci6n afecta amplios sectores de la poblaci6n de la zona metropolitana , su programaci6n debe hacerse en forma muy cuidadosa a fin de que se lleve a cabo con el mfnimo de molestias posibles. para los consumidores. Z) La Electricidad de Caracas esta en principio dispuesta a hacer los arreglos necesarios con el Gobierno Nacional sobre bases mutuxamente satisfactorias, para llevar a ca. bo la conversi6n del ciclaje de su energfa el6ctrica en la zona que estA sirviendo, de 50 a 60 ciclos, para lo cual re querirra la aprobaci6n de las autoridades competentes de la companfa . 3) La Electricidad de Caracas cuenta actualmente con un exce dente de capacidad instalada de unos 120. 000 KW , los cua- les quedarin reducidos a 100. 000 KW para fines de ano. Este excedente se calcula por encima de la reserva que debe mantener y que en la actualidad alcanza a 100. 000 KW (Nna unidad de 60. 000 KW y otra de 40. 000 KW Al quedar interconectado el sistema de generaci6n de la Elec tricidad de Caracas con el del Caronf, s6l se requeriri la unidad de 60. 000 KW como reserva. Por lo tanto, la Electri- cidad de Caracas podrfa llegar a disponer de un excedente de hasta 140. 000 KW, quedando entendido que deberi atender a un crecimiento de la demanda que illtimamente se ha verifi. cado a la tasa de 7% anual pero que en afios anteriores habra llegado al 20% anual. 4) La conversi6n se empezarfa lo mas pronto posible y se lleva rA a cabo en un perfodo maximo de cuatro alios, coincidien. I.. .3- do la terminaci6n de los trabajos con la puesta en marcha de la Planta Hidroel6ctrica de la Presa de Guri en su etapa inicial (350. 000 KW), que vendrra a agregarse a la capaci- dad de generaci6n de la Planta Hidroel6ct rica de Macagua II de un monto equivalente, la cual quedara afirmada al tercer afio de la construcci6n de la Presa de Guri. 5) La Electricidad de Caracas podra poner a disposici6n de CADAFE, dentro de unos seis meses a partir de la formali- zaci6n de los acuerdos, la energfa de dos unidades de Arreci fe de 20. 000 KW cada una. 6) El financiamniento de la conversi6n se compartirra entre el Go bierno Nacional y la Electricidad de Caracas. Se aludi6 a la posibilidad de que el Gobierno Nacional tomara a su cargo los gastos relativos a la adaptaci6n de las maquinarias y aparatos eldctricos pertenecientes a los clientes de la empresa. Esta tomarra a su cargo los gastos relativos a la conversi6n de sus unidades de generaci6n y los gastos relativos al estudio y pro- gramaci6n de la tarea. Se insinu6 tambi6n la idea de un finan- ciamiento externo en relaci6n con la posibilidad de que el pa- go de la conversi6n se efectdie con cargo a las utilidades que se derivara'n de la utilizaci6n de la energra barata del Caronf. 7) La Electricidad de Caracas, en consulta con el Gobierno Na- cional, iniciari de una vez las gestiones tendientes a conse - guir el personal t6cnico que ayudara. en la tarea de programa- S4 /. . .. 4 ci6n, incluyendo la estimaci6n del costo de la conversi6n. 8) Como resultado de los estudios preliminares se asentarfan las bases sobre las cuales se concertarfan los arreglos definitivos, los cuales habrin de ser aprobados por las auto ridades competentes del Gobierno Nacional y las de la Elec tricidad de Caracas. Se qued6 en permanecer en contacto con el prop6sito de ade- lantar las gestiones encaminadas a la conversi6n y de celebrar una reuni6n con asistencia de los Ministros de Fomento y de Minas e Hidrocarburos, as7 como tambi6n con las autoridades de la Corporaci6n Venezolana de Fomento y de CADAFE. Caracas, 7 de septiembre de 1962 MPG/cbi. - FOR 5.48) INTERNATIOI BANK FOR RECONSTRUCTION AI )EVELOPMENT OFFICE MEMORANDUM TO: Mr. M. Piccagli DATE: September 6, 1962 FROM: J. gow and F. SUBJECT: Guri Project - Venezuela In connection with the continued investigations of the economic feasibility of the proposed Guri Project, a study has been made of the probable costs to generate and transmit electric power in Venezuela over the period 1962 - 1995. Two alternative power system developments were compared: one based on thermal generation, the other based on the development of the first two stages of Guri, i.e. to about 3,000 1'M. The results of this study are presented in the attached graph, and summarized in the table below. The underlying assumptions are dis- cussed later. Estimated Cost of Electricity (Higher Load Forecast) 1962 - 1995 System Size Maximum Cost to Generate & Transmit Demand Generation U.S. Mills per kwh Year 1W Million kwh Major Guri Developments Thermal Hydro 1962 675 4,000 6.5 1967 1,025 6,100 h.6 1968 1,100 6,6oo lst stage in operation 4.7 65 i 1973 1,700 9,700 4.h 1978 2,650 15,000 1st stage fully loaded 4.1 .9 1979 2,950 17,000 2nd stage in operation 3.9 1983 3,950 23,000 2nd stage fully loaded * 4.2 3.7 1988 5,300 30,000 4.0 3.4 1993 7,200 41,000 3.8 3.5 1995 8,100 47,ooO 3.7 3.5 Load growth beyond 1983 served by new steam additions. -2- The higher costs experienced in the earlier years of the period studied are attributable principally to the fixed charges on the large amount of reserve generating capacity which now exists in the private La Electricidad de Caracas system. Frequency conversion and interconnection of this system with CADAFE were assumed to have been accomplished by 1965 year-end. The first stage of Guri would be fully loaded by 1978. It has been assumed that construction of the second stage would begin in 1975, and be in initial operation by 1979. The second stage consists of raising the dam 25 meters, which would immediately increase the firm capability of the first stage by 400 NW, and permit the installation of a further 1,100 MW, to bring the total capability of the project to 3,000 NW. According to the Missionts load forecast, the first two stages of Guri would be fully loaded by 1983. In the studies, expansion beyond 1983 of the nominally hydro system has been carried out with thermal installations, since no information on the third stage of Guri is available. Harza has estimated the cost of raising the dam for the second stage of Guri at Bs 400 million; the Mission has estimated the cost of additional gener. ating units at Bs 325 million for the 1,100 MW which would be installed. The total cost of Guri at the completion of the second stage would be about Bs 2 bil- lion, including 400 kv transmission facilities. The average unit cost of Guri, exclusive of 400 kv transmission, would be about Bs 550 per kw (US $121 per kw at the current rate of exchange). Assumptions Used in Study 1. Operating and Fuel Expenses The shadow prices for operating labor and gas which were employed in the earlier economic studies previously reported upon were also used in the current study. 2. Capital Costs Mission estimates of the cost of new steam plant and Harza estimates of the cost of Guri were used. The annual capital charges were estimated on the basis of 30-year lives for steam and transmission plant, and 60 years for hydro plant, with 10% per annum interest, computed as level annual payments. 3. Investment in Existing Facilities An estimate was made of the value of generation and transmission plant in service in the La Electricidad system, and that portion of the CADAFE system included in the market area. Additional investmen-t in general 115 kv transmission facilities were assumed to bear a constant relationship to invest- ment in new generating facilities. -3. Calculation of Cost of Power The total of all annual capital charges, and annual operating and fuel expenses was divided by the total system generation to yield an average year- by-year cost of energy. These costs do not include the costs of distribution, overheads, and administration, and so are not comparable to the average prices received for power sold. Results of Study For the first 10 years of operation after the conpletion of the first stage of Guri, annual system operating costs for generation and transmission would be higher than those of alternative thermal generation. Hydro power would cost about U.S. mills 0.9 per kwh more than thermal power in 1968, would be equal in cost to thermal power by 1977, and would be lower in cost thereafter. The cumulative amount by which hydro power costs would exceed thermal power costs over the 10 years 1968 - 1977 would be approximately US $63 million. JCL:FHH/mms I4 IN zxi N N s 9 dN FORM No. 57' INTERNATIONAL DEVELOPMENT I INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION I RECONSTRUCTION AND DEVELOPMENT CORPORATION OFFICE MEMORANDUM TO: File s DATE: September 6, 1962 FROM: S. Aldewereld SUBJECT: Guri Project While I was in London last week I had a long discussion with John Pears, senior partner of Cooper Brothers, to establish whether that firm could do a satisfactory job in checking the investment cost estimates of the Guri Project along the same lines as they did on the Kariba, Volta and Niger Dam Projects. Although Cooper Brothers' experience in this special field is only in Africa, I am satisfied that they could carry out such an assignment in a competent manner. Mr. Pears told me that he ill be in New York late in September and early October and that he planned to pay us a visit at that time. I propose that we can then have further discussions about the as- signment with him. cc: Mr. Knapp Mr. Schmidt Mr. Piccagli er. . Picoa11 August 240 1962 4.0. and F.H. 1. In the ission's August 11th w-rahau on this subject to r. A.D. Spetsoed, the last Conelusion stateds *As to the oconomie JstiaUtin of Ouri, the Niosion has, so far, emmplted its 'total eash flow" Oeparison of the two alternative systess. It has found that, ever the 60-ymar period taken into asoownt, the present wrth of Ue investment and operating easts of the two alternatives ean be made equal at a diseount rate of 9% per anmm, This figure is not particularly attractives but is high enough to warrant further studies, with partieslar referenee to the eash flow of the early years and the ealculation of the return on additional Investment for Stage I of Qurl.* 2. The 9% referred to above was arrived at on the basis of load forecasts developed in the field by the Mission. 3. It has now been possible to refine those foreeaste and when the resulting sorrestions are intredaeed in the ealeulations the results for the full physical life of the hydro-projeet (3362.2028) arts a) 7j% on the basis of the lever lead growth referred to in Table 1 p. 4 Of the msImraNAdum of August 1 b) S0 on the basis of the higher load forecast referred to in Table UA on the sa page, 4. We have now ealculated the disormt rates eorresponding to shorter periods. The results are as followss Riesmalt MHt Period of 0aparison m"W'" zrad .1= yOrs;aa 1962-V80 minus 1% 1962-1990 r% 5% 1962-2000 70 60 5. In all studies the alternative systems were not expanded beyond the point at whiah the first stage of the Guri projeet became fully loaded. J0WMu/mw *at Mr. Aldwereld soi Area Dept. WW Ye it so ( * TO: Mr. M. Piccagli 10 September 1962 FROM: J.C. Lithgow and F.H. Howell SUBJECT: Guri Project - Venezuela 1. Since the August 14 memorandum on this subject was written, the studies which resulted in a discount rate of about 9% have been refined. These refinements indicate that, over the full 60-year physical life of the Guri Project, the present worth of the investment and operating costs of the two alternatives would be equal at annual discount rates of 7.5% in the case of the lower load forecast and 8.25% in the case of the higher load forecast. 2. Studies were also made for shorter periods of comparison up to and including the year 2,000. (In these studies no account was taken of the remaining lives of the investment at the end of each period.) These periods and the respective discount rates are summarized in the following table: Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast "Shadow" prices for gas 1962 - 1980 0.25% Minus 1% and operating labor; and Harza estimate of cost 1962 - 1990 6.0 5 for Guri 1962 - 2000 7.5 6.5 3. Similar studies were made to find the effect on the discount rate of an increase in the estimated cost of the Guri Project and the use of current market prices for gas and operating labor. The results of these studies are tabulated below: Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast Harza cost estimate 1962 - 1980 Minus 3.75% Minus 5% increased by 20% "Shadow" prices for 1962 - 1990 3.875 3 gas and labor - 1962 - 2000 5.625 5.25 1962 - 2028 6.5 6 -2- Equalizing Discount Rate Basic Conditions Period of Higher Load Lower Load of Comparison Comparison Forecast Forecast Current market prices 1962 - 2028 10 for gas and labor; Harza estimates for Guri. 4. CoST OF PoWER a. It was also suggested that it would be of interest to determine the differential in the cost of providing power by each of the two alternatives if it was assumed that whatever investment was required would receive an equal return, say 10%. This was done by estimating the costs to generate and transmit the amounts of power indicated by the higher load forecasts in alternative system developments: one based on thermal generation, the other based on the development of the first two stages of Guri, i.e., to about 3,000 161. The results of the study are presented in the attached graph, and summarized in the table below. The underlying assumptions are discussed in paragraph g. Estimated Cost of Electricity (at the demand end of HV transmission) Higher Load Forecast 1962 - 1995 Maximum Cost to Generate Year Demand Generation and Transmit MW Mil. kwh Major Guri Developments US. Mills per kwh Thermal Hydro 1962 675 1.,ooo 6.5 1967 1,025 6,100 4.6 4.7 1968 1,100 6,600 1st stage in operation 4.7 6.5 1973 1,700 9,700 4.h 5.0 1978 2,650 15,000 1st stage fully loaded h.1 3.9 1979 2,950 17,000 2nd stage in operation 3.9 3.5 1983 3,950 23,000 2nd stage fully loaded * 4.2 3.7 1988 5,300 30,000 4.o 3.4 1993 7,200 41,000 3.8 3.5 1995 8,100 47,000 3.7 3.5 * Load growth beyond 1983 served by new steam additions. -3- b. The first stage of Guri would be fully loaded by 1978. It has been assumed that construction of the second stage would begin in 1975, and be in initial operation by 1979. The second stage consists of raising the dam 25 meters, which would immediately increase the firm capability of the first stage by 400 MW, and permit the installation of a further 1100 iW, to bring the total capability of the project to 3000 1W. According to the load forecast used, the first two stages of Guri would be fully loaded by 1983. c. In this tudy, expansion beyond 1983 of the nominally hydro system has been carried out with thermal installations, since no informa- tion on the third stage of Guri is available. d. Harza has estimated the cost of raising the dam for the second stage of Guri at Bs 400 million; the Mission has estimated the cost of additional generating units at Bs 325 million for the 1100 jW which would be installed. The total cost of Guxi at the completion of the second stage would be about Bs 2 billion including 400-kv transmission facilities. The average unit cost of the 3000 MW Guri Project, exclusive of 400-kv transmission, would be about Bs 550 per kw (us $121 per kw at the current rate of exchange). e. The higher costs per kwh eetimated' in the earlier years of the period studied are attributable principally to the fixed charges on the large amount of reserve generating .capacity which now exists in the private La Electricidad de Caracas system. Frequency conversion and interconnection of this system with CADAFE were assumed to have been accomplished by 1965 year-end. f. The study shows that for the first 10 years of operation after the completion of the first stage of Guri, annual system operating costs would be higher than those of alternative thermal generation. Hydro power would cost about U.S. mills 0.9 per kwh more than thermal power in 1968, would be equal in cost to thermal power by 1977, and would be lower in cost thereafter. The cumulative amount by which hydro power costs would exceed thermal power costs over the 10 years 1968 - 1977 would be approximately US $63 million. g. Assumptions Used in Determining Costs of Generation and Transmission (i) Operating and Fuel Expenses The shadow prices for operating labor and gas which were employed in the earlier economic studies previously reported upon were also used in the current study. (ii) Capital Costs Mission estimates of the cost of new steam plant and Harza estimates of the cost of Guri were used. The annual capital charges were estimated on the basis of 30-year lives for steam and transmission plant, and 60 years for hydro plant, with 100 per annum interest, computed as level annual payments. (iii) Investment in Existing Facilities An estimate was made of the value of generation and transmission plant in service in the La Electricidad system, and that portion of the CADAFE system included in the market area. Additional investment in general 115 kv transmision facilities was asumed to bear a constant relationship to investment in new generating facilities. h. Calculation of Cost of Power The total of all annual capital charges, and annual operating and fuel expenses was divided by the total system generation to yield an average year-by-year cost of energy. These costs do not include the costs of distribution, overheads, and administration, and so are not comparable to the average prices received for power sold. 6,c--' rwrrvw f wofragjrrvrr asA 1 a NI _J_ qlu _ we, ~C$A# N August 14, 1962 TO: Mr. A. D. Spottswood FROM: Guri Mission SUBJECT: Preliminary Conclusions - Guri Project, Venezuela In accordance with the terms of reference dated May 29, 1962 a Mission consisting of Messrs. J. C. Lithgow, K. A. Bohr, H. G. van der Tak and F. H. Howell reviewed the public power supply situation in Venezuela to determine whether an early development of the proposed Guri project is justified from both an engineering and an economic viewpoint. The Mission was in Venezuela from June 5 to July 13. Mr. R. Sadove was with the Mission from July 4 to July 11. Description of Proposed Guri Project The site of the proposed Guri project is on the Caroni River about 90 river kilometers upstream of its confluence with the Orinoco River at Matanzas. It is about 80 airline kilometers SSW of Matanzas, and about 500 airline kilometers SE of Caracas. A preliminary study of the project was made by Electricite de France in 1960, and a detailed study was completed by Harza Engineering Company in April 1962. The Harza report concluded construction of the first stage of the project should be the next step in the development of power resources in Venezuela and if commenced in 1962, could be in operation with an initial capacity of 350 m by 1968. This stage would in due course be expanded, by the installation of eight additional units, to an ultimate capacity of 1750 MW. The initial installation, consisting of a concrete gravity type dam 100 meters high and about 660 meters long at the crest, two 175 FN generating units, and a 230 kv transmission line about 90 km long from Guri to the existing Macagua hydroelectric station, is estimated by Harza to cost about BS200 million (US $h million) in local currency and US 370 million in foreign exchange. The first stage would be increased to its full capacity by about 1980 and together with a 400 kv transmission line constructed from Guri to Caracas, would cost an estimated total of Bs300 million (us $66 million) in local currency and US $175 million in foreign currency. When the forecast power market requirements show that the capability of the first stage would be exceeded (about 1980), the dam could be raised 25 meters, and the installation of additional generating units could increase the capability of the project to about 3,000 1DDT. .5e Cr41 9, -. cc Memo)fln A final raising of the dam by 20 meters, together with still more generating units, could develop the site to its maximum potential of 6,000 mN. When the first stage of the project has been developed to its full capacity, it would then be prudent to give consideration as to whether further concentra- tion in one site of the countryts power generating facilities would be in the best national interests. The construction program has been prepared after careful investigation of six alternative sites and that chosen would be satisfactory for the proposed project. Agency in Charge of the Project The Corporacion Venezolana de Guayana (CVG), an autonomous agency respon- sible for the industrial development of the Guayana (the State of Bolivar), will be in charge of project construction. Guri power will probably be sold in bulk to CADAFE, the government power system owned by Corporacion Venezolana de Fomento. Status of Construction All preliminary engineering and spillway model tests have been completed. The consulting engineers are now preparing final designs and documents needed to call bids for the construction of the project. A good all-weather dirt road gives access to the site. A preliminary camp is in operation and a location for the main construction camp has been cleared. Market Area for Guri Power The government-owned CADAFE (C. A. de Administracion y Fomento Electrico) serves over 150 towns and cities in various parts of Venezuela. The largest CADAFE systems are in the central region serving part of the Caracas area, Valencia, Maracay and Puerto Cabello, and the eastern region serving Puerto La Cruz, Barcelona, El Tigre and Maturin. These two areas have peak loads of 122 H4 and 24 MW and installed generating capacity of 210 Nd and 50 W respectively. The Guayana area including Ciudad Bolivar is served by CVG and several iso. lated private companies. The area peak load is now about 125 YN, mainly the steel works complex at Matanzas, and the installed capacity is about 400 W, of which 370 W is installed in the CVG run-of-river hydroelectric plant at Macagua. The largest private company is La Electricidad de Caracas with a present peak load of 270 W and installed generating capacity of 450 W. The excessive amount of spare generating capacity available to this company has been brought about partly because demand has recently expanded at a lower rate than forecast but mainly because of a very conservative policy of the company regarding stand- by capacity which requires that the largest unit plus the next largest unit must be maintained in reserve against service failures. -3- The privately-served city of Caracas and the three government-served areas, Central, Eastern and Guayana, form the possible market for Guri power. At present these areas are not interconnected, although CADAFE has proposed the construction of a 500 km double-circuit 230 ky transmission line from the Macagua I hydroelectric plant, via Puerto La Cruz to the Central area. With the completion of this line, tentatively scheduled in service by year-end 1965, the Central, Eastern and the Guayana areas would be operated as an inte- grated system. In summary, the current peak loads in the four areas which could be served by the Guri project are: (1W) Caracas 270 Central 122 Eastern 24 Guayana 125 31 Load Forecasts made by the Mission The Mission made independent forecasts of the load and energy requirements for the four areas discussed above. For the first three regions, forecasts were made on the basis of a continued growth of urban population (more rapid in the Central than in Caracas or Eastern), a modest increase in the level of non-industrial consumption in urban areas, and an increase in industrial con- sumption consistent with the 5-6% annual rate of GNP growth estimated by the Economic Mission to Venezuela in 1959. In the Guayana area where the present and prospective load is based on power-intensive industries, and where the future load growth is entirely de- pendent on specific decisions and developments which may or may not take place, two forecasts have been made. The lower forecast assumes some expansion in steel production but no expansion of electrical smelting, an expansion of aluminum production from 25,000 tons annually by 1970 to 100,000 tons annually by 1980. It is assumed that with the exception of marginal amounts, aluminum will not be produced for export until the late 1970's. The higher Guayana forecast assumes a more rapid growth of steel production with no expansion of electrical smelting but a substantal development of aluminum for export in the 1970's and, in addition, a more rapid growth of general industrial load. The forecasts prepared by the Mission compared with current demand are shown in Table 1 below. -4- TABLE 1 Load Forecasts Peak Demand at Plants in Megawatts Moderate Guayana Development 1962 1968 1975 1980 Central 137 234 h18 556 Eastern 24 45 80 110 Guayana 201 720 CADAFE 365 620 1,015 1,386 Caracas 304 467 818 1,226 TABLE 1-A Load Forecasts Peak Demand at Plants in Megawatts Rapid Guayana Development 1962 1968 1975 1980 Central 137 234 418 556 Eastern 24 45 80 110 Guayana 204 341 605 1,298 CADAFE 365 620 1,103 ,964 Caracas 304 467 818 1,226 System Supply Frequency Integration of the power systems operating in Venezuela has been compli- cated by the use of supply frequencies of 50 and 60 cycles. Modification to unify the CADAFE systems for 60 cycle operation are now almost complete. The private Caracas system, however, is still operated at 50 cycles. With the completion of the CADAFE conversion to 60 cycles, there is no longer a reason- able choice of frequency for the country in general. Therefore, the conversion of the Caracas system to 60 cycle operation should be undertaken as soon as possible. Generating plant in the Caracas system has been designed to operate at 60 cycles when necessary. Consulting engineers have prepared a detailed report setting out the work necessary for conversion of Caracas to 60 cycles supply and have estimated the cost at Bs90 million. -5- Caracas System Integration The conversion of the Caracas system to 60 cycles and its integration with the general power system of the country is of the utmost importance to the electric supply industry of Venezuela irrespective of how the systems' capacity may be expanded in the future. The integration would enable the most economic use of existing capacity, defer the installation of new capacity, and to a large extent justify the immediate construction of the 230 kv transmission line, from Caracas to Macagua. In fact, the ability to utilize the 350 MW output from the proposed Guri project during the next ten years depends on the inclusion of the Caracas system as part of the power market. Basic Alternatives of System Development Two basic alternatives in the development of generating facilities to supply the forecast demand were studied by the Mission. These were: a) A fully interconnected system in which only new thermal plant would be added to existing generating facilities; b) A fully interconnected system in which the proposed Guri project would be added to the existing generating facilities. In both instances, the Mission has assumed that the proposed Matanzas - Santa Teresa 230 kv line would be constructed and in operation by 1965. The line was included in the studies at a cost reflecting the bids recently received by CADAFE for its construction. Hydroelectric Alternative The engineering planning for the Guri project has been prepared by Harza. Harza t s estimate of construction costs, construction schedule, peaking capa- bility and energy availability of the Macagua - Guri project have been re- viewed by the Mission. After a critical review of these estimates, they were accepted as being reasonable for the purpose of the economic studies, The capability of the 370 Md (installed in 6 units) run-of-river Macagua hydroelectric plant depends, prior to regulation by Guri dam, both on Caroni River flow, and on tailwater elevation, the level of the Orinoco River. If Guri construction were started in 1962, the Caroni River could be regulated by 1966 to provide flows adequate to maintain a firm continuous output from the Macagua station of 325 IT. During the period 1962-65, Macagua capability would be dependent upon unregulated stream flow. Hydrological data (admittedly meager, since records extend over only 11 years) indicate that 5-day average flows equal to or greater than the flow required to produce 330 NJ at Macagua may be expected for at least 901o of the time. The Mission, therefore, having .6. regard to the fact that the Matanzas - Santa Teresa transmission line has been assumed in operation by 1965, has used a value of 325 W (5 out of 6 units carrying 65 FN each) for the capability of Macagua during the period prior to Guri regulation, 1962-1965. Thermal-Electric Alternative The Mission has assumed development of the system in the areas under study in such a manner as to minimize both investments in new plant and production expenses. As in the case of the hydroelectric development studies, it has been assumed that the proposed Matanzas - Santa Teresa 230 kv line could be avail- able by the 1965 year-end system peak, and the thermal system development was charged with its costs. Thermal unit sizes were selected to approximate 10% of system demand in the year brought into service. The criterion for system reserve was taken as the largest steam unit. This requirement was, in general, served except that reserve shortages were accepted in some years in order to avoid installing a new unit. This approach is believed to be in accord with good utility practice. At no time was the system gross peaking capability allowed to fall below 105% of system peak demand. New capacity was apportioned between the "coast" (Caracas - Puerto La Cruz area) and the Guayana in such manner that maximum advantage of fuel price dif- ferentials was taken, within the limits of the power transfer capability of the Matanzas - Santa Teresa 230 kv line. It is possible to construct a spillway in connection with the existing Macagua I hydroelectric station to increase its peaking capability. The con- struction of a spillway at Macagua did not seem desirable on the basis of the capability (325,000 kw) assigned to the existing Macagua plant in studies. The spillway would add at most 40,000 kw of peaking capability with no increase in energy production, at a cost of Bs60 million, or an incremental cost of Bs1500 per kw. Steam plant can be built for much less, and would have to supply the energy in any event. Values used by Mission in its Calculations (a) Load Forecasts These data were developed independently by the Mission. (b) Capital Costs i) Hydroelectric Development Harza estimates of construction costs and timing of expendi- tures were used throughout. -7- ii) Theral-electric Development Construction costs of new steam plant were developed by the Mission on the basis of CADAFE estimates for the proposed Guanta extension, recent United States experience with similar gas-fired plant in the Gulf area, and the actual cost to C. A. La Electricidad de Caracas to build the 60,000 kw (nominal) Tacoa No. 5 unit, which came into commercial operation in April this year. Mission estimates of construction costs for new plant in Venezuela are set out in Table 2 below. TABLE 2 Estimated Cost of New Gas-Fired Steam Plant Nominal Rating Bs per Total Cost kw Nameplate kw (Bs x millions) 60,ooo 610 37 75,000 570 43 125,000 490 61 200,000 450 90 iii) Costs of Transmission a) hoo kv Harza estimates of construction costs and timing of expendi- tures were used throughout. b) 230 kv Construction costs were estimated from recent international proposals received by CADAFE. Timing of expenditures was estimated by the Mission in conjunction with CVG. (c) Operating Costs - Other than Fuel i) Hydroelectric Plant The Harza estimates were considered reasonable for the Guri project and the actual operating experience of CVG was utilized for the existing Macagua power station. -8- ii) Steam Plant The Mission developed its own estimates of operating costs for new steam plant, based on current experience in Venezuela, and discussions with appropriate personnel of CVG, CADAFE and C. A. La Electricidad de Caracas. These estimates are shown in Table 3, below. TABLE 3 Estimated Operating Cost of Gas-Fired Steam Plant Plant Class Bs/kw year Existing 20 New 13 iii) Transmission Harza estimates were used throughout. (d) Fuel Costs Current fuel costs to C. A. La Electricidad de Caracas are about Bs22 per 1,000 cubic meters (clean, dry gas, heating value 1080 B.T.U. per cubic foot, delivered to Arrecifes - Tacoa complex at about 1,000 p.s.i.). The corresponding price to CADAFE averages about Bs20 per 1,000 cubic meters. Harza have used an average gas price of Bal4.2 per 1,000 cubic meters in their calculations of the hydro-thermal comparison. This price was applied in the form of a variable component of BS10 per 1,000 cubic meters and a fixed component of B-S.50 per year per kw of installed capacity. The cost to the generating plant thus varied with the load factor but was constant with respect to location. The Mission developed estimates of gas prices to be used in the eco- nomic appraisal calculations on a somewhat different basis. The price was assured to vary with location but not with the amount used. Prices were built up from two major elements: The first including the "intrinsic" value of the gas and the cost of collection, cleaning and compression, where necessary, which together give the value of the gas delivered to the pipeline; the second element comprised the cost of delivering the gas by pipeline to the point of consumption. Estimates used were based on infor- mation supplied by the Venezuelan Government petroleum corporation and by the private oil companies. The estimate used in the cash flow runouts assumed the price of gas delivered to the pipelines to be BslO per 1,000 cubic meters (at Bsl.54 - $1.00 this would be equivalent to 6.3# per 1,000 cubic feet). Then -9- because of the existence of large unused capacity in the Anaco - Caracas pipeline, it was assumed that the cost to the economy of delivering gas to the Caracas area would include only the operation and maintenance costs of the pipeline until such time - around 1975 - when the capacity of the line was reached. At that time, it was assumed that a second line would be built and its full cost charged to the gas from that time on. In the case of gas delivered to Matanzas (Guayana) the cost of transporting the gas was calculated on the basis of the pipeline investment costs used in the Harza report (adjusted for the exchange rate). In computing the costs per unit of gas transported, the pipelines were assumed to have a 20-year life; a 10% return was used and it was assumed that the average factor of utilization was 70%. The results are given in Table 4. TABLE 4 (Bs per 1,000 cubic meters of gas delivered) Caracas Matanzas Until 1975 11.23 15.25 After 1975 18.75 15.25 Another estimate was also made using slightly different assumptions and based on new information obtained at the end of the Mission mainly covering pipeline construction and operating costs. In this case, the costs were reduced by 10% except for gas delivered to Caracas, where, after 1975 on the basis of assuming that the capacity of the existing line is increased by the installation of an intermediate compressor station, the unit costs were reduced by 25% from the previous estimate. An alternative runout was made on the basis of the lower demand esti- mates using the lower fuel costs. The effect was not appreciable. In the Mission's opinion, any reasonable estimate of the gas price should probably fall within the limits used and certainly not be lower tharp the lowest estimate used. In view of the apparent limited effect on the economic calculation of variations within this range, it appears that further refinement of the fuel price estimates cannot affect the calcula- tions materially. (e) Exchange Rate Foreign currency costs were converted to local currency at the current rate Bs4.54 - US $1.00. Method of Evaluation of Alternatives The Mission's preliminary conclusions were determined by calculations com- paring the costs of alternative system development schemes, in the following manner: -10- (a) A load forecast was prepared for the period 1962-81, for the three CADAFE-served areas of study, and for the city of Caracas. (b) New plant was brought into operation to serve the forecast loads in accordance with the approach discussed earlier, for the period 1962-81. (c) A year-by-year "total cash flow" calculation was carried out for the period 1962-81, including the investment cost of new plant, and the production cost of all plant in service. (d) Guri project was assumed to have a 60-year life, i.e. until 2028. For the period 1981-2028, the system demand and operating costs were assumed to remain constant at their 1981 levels. Thermal plant was replaced 30 years after coming into operation at a unit cost equal to the unit cost of new 200,000 kw units in 1962. An extended year-by- year "total cash flow" was then calculated for the period 1981-2028. Net asset.. values of plant in 2028 were calculated by straight-line depreciation. (e) The present value of "total cash flow" was in each case then calculated to determine at what annual discount rate the hydroelectric and ther- mal-electric developments yielded equal costs. Preliminary Conclusions The preliminary conclusions of the study are: 1. From an engineering and operating viewpoint, the Guri project is feasible and the estimate of its cost is reliable as far as the order of magnitude is concerned. 2. The justification of the construction of the Guri project during the next decade, from the viewpoint of the utilization of the minimum 350 MW initial capacity, depends on the inclusion of the Caracas load as part of its market. 3. This being so, the essential first step becomes complete unification of frequency in Venezuela. The conversion of Caracas to 60 cycles, which obviously should be accompanied by interconnection with the CADAFE system, would justify the immediate construction of the 230 kv line. In this event, the important amount of spare capacity now avail- able on the Caracas system would eliminate the need for investment in the immediate future for generating facilities in the CADAFE system. 4. As to the economic justification of Guri, the Mission has, so far, completed its "total cash flow" comparison of the two alternative systems. It has found that, over the 60-year period taken into account, the present worth of the investment and operating costs -11- of the two alternatives can be made equal at a discount rate of 9% per annum. This figure is not particularly attractive, but is high enough to warrant further studies, with particular reference to the cash flow of the early years and the calculation of the return on additional investment for Stage 1 of Guri. L(7 eAnac 0 vEA/EzrL A 3 _ ojIh'iv GURI * - 40)Kv 7itssoN S3OKv ~iTRAysnuswA / / FORM No. 26 (2-62) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION INCOMING WIRE DATE OF R OU T I N G WIRE: AGT 6s 192 539 LOG NO.: R a ACTIoN coPY: Re SCHKIDT IO: IRBAFRAD OIS SCHKWT INFOFIMATION COPY: MR* AUPISCH FIOM: CARCAS DECDDED BY: TEXT: WITHERE 1CE OUR TEUM NE CONVERATION I WILL IN HNGM 1 EK MFORE ANUAL MEEMS FO #COERSATM REARDING GUF O R? FRW Te HMM ONR OCCASION O TE MIT OF HINMm OF)lES AE DOCTOR M GUERRERO TO USHING7W OAUGUST 15TH THRU E0I T L HE O& EAT HELP TO TII TO TALK WITH SM HM OWICIALS OF TI BM AVAILABL FO THTI DATEs PLEASE CONRM TNI POSSThIBI MUM UIAAEL ALOSO RAVARD DUPLICATE LH ORM-No. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OFFICE MEMORANDUM TO: Files DATE: July 6, 1962 FROM: W. Kaupisch SUBJECT: Discussions with Dr. Perez Guerrero, Head of CORDIPLAN, Caracas, Venezuela Present: Dr. Manuel Perez Guerrero Mr. G. Escobar, Ministry of Mines and Fuel Mr. Julio Gil. K consultation between the International Monetary Fund and the Government of Venezuela during the last week brought Mr. Perez Guerrero to Washington and offered an opportunity to discuss with him a number of pending problems. Mr. Dominguez used this opportunity to obtain the latest statis- tical WinfoAtioni Avgilabl reatt terpr on Vonezuela propared - by him and will use the data he obtained in this report. Other subjects discussed were: 1. Electric Power Reorganization of CADAFE Mr. Perez Guerrero stated that CADAFE was about to enter into a contract with Electricitg de France to retain them as consultants for the reorganization of its administration in all respects. He hoped that this would meet our recommendations. Rate Legislation After reviewing the parliamentary situation it had been found impractical to introduce legislation to obtain an increase of power rates. CADAFE was at present engaged in a "Coordination of Tariffs" which in practice implied that tariffs would be put up to the highest bench mark available. CADAFE, under instructions from the Ministry, was sufficiently empowered to change tariffs. The support of municipalities was being sought by consultation though their agreement was not actually required. It was in effect a piecemeal approach tactic which Mr. Perez Guerrero hoped would lead to satisfactory results. The special case of INOS was at present investigated by Electricitle de France under instructions from the President and results were expected during the next couple of months. The main problem here was that water should be made to pay its own way. An increase in water rates would also require an increase in the quality of services offered and the service right now, especially during the dry months, was simply not good enough to allow Dcc QAc\.A \JE_ ~~A *4c - A)iq Files - 2- July 6, 1962 for such increase. At present a new reservoir was filling up, new pumps were being installed and the distribution network extended so that they expected to be able to wipe out INOS' deficit of Bs. 5 to 8. million in the next year. This deficit incidentally was caused mainly by the need to distribute water by trucks during the dry season which would be eliminated by the new distribution system. A rate increase applying to the medium and higher brackets and going hand in hand with better service was under consideration and might be introduced next year. This then would enable INOS to pay more realistic power rates. The power supply to the ,new pumping system would be at 60 cycles. The Guri Project Mr. Perez Guerrero pointed out that the President and his Government had decided in principle to do the project. The President wanted during his term to push the project beyond the point of no return so as to commit future governments to an investment he con- sidered wise and very essential. This, however, did not mean, Mr. Perez Gurrero took pains to emphasize, that Guri would be built regardless of how the Bank felt about it. If the Bank mission at present in Venezuela (for whose performance and attitude Mr. Perez Guerrero had words of praise), discovered very strong and cogent reasons against Guri, the Government might decide not to go ahead with Guri but the reasons would have to be very convincing ones, not only to the expert but also to the electorate of Venezuela. (There seems to be little prospect that the mission would discover arguments against Guri meeting this latter quali- fication). Mr. Perez Guerrero had no doubts at all that the 350 M envisaged as the first stage of Guri available under present planning by 1967 would easily be taken up not only by new industries in the Guyana region but to a greater extent by the fast growing demand in the central province. People who were questioning the soundness of the Guri project did quite often not realize that figures of 4,000 to 6,000 W installed capacity were envisaged to materialize only 30 to 40 years hence. Freguency Conversion An assessment of the size of the market for Guri power involved a discussion of the conversion of frequencies from 50 to 60 cycles in Caracas. Mr. Perez Guerrero stated that new generating units installed at present in the 50-cycle area were already equipped for 60. cycles as well. He had discussed the matter extensively with the head of the Caracas Electricity Company, Mr. Cadavis, who ias not opposed to the change at all but needed some time to take his board along. Block sale of cheap Guri power would contribute finance to meet the cost of con- version. Mr. Perez Guerrero felt that little uould be achieved as long as Guri was an open question. Once the Government stated that Guri was to be built and 60 cycles power brought to the city, the private compa- nies would be willing to work out ways and means for conversion. Files - 3- July 6, 1962 2. Highway Project Mr. Perez Guerrero cabled from Washington to Professor Hawkins offering him a contract after obtaining advice from our Department of Administration as to terms and conditions. If the present schedule can be adhered to, a bankable project could possibly be discussed by the end of the year. 3. .Irrigation Project Mr. Perez Guerrero.promised to check the progress made so far in the computation of data required. 4.. Development Ban Mr. Perez Guerrero stated that at present consultation was being sought with the leading political parties to see whether parliamentary approval could be obtained. Surprisingly enough he stated that the issue as such was noncontroversial and that it was simply a matter of parlia- mentary tactics whether or not a majority could be lined up for the Govern- ment to permit it to issue a guarantee on a World Bank loan. Still, he wished to discuss alternative sources of funds. The Inter-American Development Bank could be approached and might react favorably but he assumed that the scope for lending to Venezuela by IADB would be limited. If the Development Bank should receive a loan from IADB other projects at present under discussion with IADB would suffer. Could we possibly consider taking over one of the other projects, in particular the tele- communications project? He referred to the talks he had had with Mr. Schmidt and Mr. Diamond in this connection where he received the impression that we would be prepared to discuss a telecommunications project. This switch in investment would then enable IADB to lend for the Development Bank without impairing the telecommunications project. I referred to our report on Venezuela in which telecommunications were given a high priority, emphasized that we did not at all consider IADB as actual or potential competitor for investments and gave as my personal opinion, subject to the approval of the front office, that this substitution could be done if IADB agreed, provided always that we found the telecommunications project bankable by our standards. It was also understood that IFC would retain the same position in the Development Bank Project as envisaged at present. It was then agreed that the present efforts to obtain the approval of Congress for a World Bank loan would be continued but that at the same time the possibility of a switch in in- vestment would be explored in case the approval of Congress could not be obtained. cc: Messrs. Schmidt/Diamond, Spottswood, van Helden, Dominguez WKaupisch/mv FoRm No. 26 (2.62) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION INCOMING WIRE DATE OF R 0 U TI N G WIRE: JUNE 28, 1962 725M LOG NO.: ACR 6 ACTION CDPY: TECHNICAL OPERATIONS 'IO: SPgTTSWO IgggpgR INFOfMATION COPY: FDOM: CRA DEDDED BY: TEXT: IN VIEW POSSIELE STAY UNTIL 15TH GRATEFUL ARRANGE SADOVE BRING EXTRA 800 DOLARS FOR USE OF MISSION LITHGOW FAMILY NOTIFICATIONB BEING KADE DUPLICATE 03 =orm No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: JOHN LITHGOW DATE: June 20, 1962 AVILA HOTEL CARACAS CLASS OF VENEZUELA SERVICE: COUNTRY: SOUTH AMERICA TEXT: Cable No.: 1 SADOVE PLANS CHANGED HE EXPECTS TO ARRIVE CARACAS MIDDAY JULY 3 STOP WULD APPRECIATE SHORT PROGRESS REPORT ACTIVITIES TODATE REGARDS SPOTTSWOOD NOT TO BE TRANSMITTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION: NAME A. D. Spottswood DEPT. Thy SIGNATURpE ASE47 (Sis UR Oil( ATHRIED APPIROVE) For Use by Archives Division ORIGINAL (Fite Copy) (IMPORTANT: See guide for preparing form) CJlwked for Dispatch: m *4 *S * *~ I ~ i~* V4 +++++ * May 29, 1962- TO: J. C. Lithgow, F. H. Howell, K. Bohr and H. G. van der Tak FROM: Mr. A. D. Spottswood SUBJECT: Terms of Reference - Mission to Venezuela 1. On or about June 4 you will arrive in Venezuela to undertake a review of the Guri hydroelectric project. The missiont s primary contacts in Venezuela are Dr. Manuel Perez-Guerrero and Col. Rafael Alfonso Ravard. 2. The purpose of the mission is: (a) determine whether there is engineering and economic justification for an early' development of the Guri project, or (b) alternatively to suggest what it considers to be a reasonable program of power development covering the next 10 years, including such thermal instal- lations, system expansion, and interconnections as would appear to be needed. 3. Your review will be based in part on factual information contained in the report on the Guri project prepared by Harza Engineering Company, International. You will be expected to exercise independent judgment as to the validity of the information contained in the report. 4. In the course of your review you should: a) Investigate the engineering and physical aspects of the proposed Guri project such as hydrology, geology, general topography and access to site, adequacy of water storage, siltation, unit size, availability of construction materials, accuracy of construction cost estimates and estimates of the probable cost of electricity production. b) Survey the market for power in the areas which might reasonably be connected with the Guri project. The survey will include the expansion of existing systems and the potential demand of new industries. Estimates should be made of the probable magnitude of the general investment in new power consuming facilities. In addition, the problem of frequency unification should be considered in its relation to the effect of the Caracas 50 cycle system demand on the over-all market. c) Review existing thermal resources and transmission facilities to obtain information relating to the remaining life, standards of maintenance, operating efficiency and costs of operation of power stations, the degree of integration of local power systems, as well as the need for further interconnection. tLOv 6.d V E 4 erms J r eprer -u. -2- d) Investigate the fuel situation in the country, and in particular study the problem of the value of natural gas as a fuel for gener- ating electricity. This should be in terms of its value to the economy rather than solely on the basis of current contract prices. e) Obtain information sufficient to estimate the cost of future system expansion based on thermal power. 5. While it is desired that you take note of plans for the organization to construct and operate the proposed Guri project, you will not be required to develop a final judgment of the capability of management, or the probable financial operating results of the proposed organization. 6. If, in carrying out the mission, you should find that the solution of any problems will require specialized outside assistance, you may assume that the Bank is prepared to obtain such assistance, You should notify the Bank as soon as possible if the need for such assistance is indicated. 7. At the conclusion of the review it should be possible for the Bank to determine whether or not there is justification for an early development of the Guri project and if there is, the size of the development, the systems to be supplied and the phasing of their interconnection with Guri0 8. Should there be no justification for an early development of Guri the mission should suggest what it considers to be a reasonable program of power development covering the next 10 years, including such thermal installations, system expansion, and interconnections as would appear to be needed. It is probable that there will be alternative schemes of development between which it will be difficult to choose. The definitive development of the details of such schemes, however, is not the missiont s responsibility. 9. The field work may take four to six weeks. On your return to Washington you will submit a preliminary report on your mission and a final report as soon as possible thereafter. cc: Mr. Aldewereld Mr. Squire Mr. Lithgow Mr. Howell Mr. Bohr Mr. van der Tak Mr. Diamond Mr. Dominguez Mr. Kaupisch Division Files, Operational Files Mr. Bengston I Form No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: pgURggMg DATE: AX 28, 1962 CMRDIPIAN CARACAS CLASS OF SERVICE: IBF GOVT COUNTRY: VENEZUEIA TEXT: Cable No.: THANKS YOUR CABLE MA.Y 25 STOP LITGOW HCIELL BOIR VANERTAK WILL ARRIVE CARACAS BY EL 917 JUNE FOURT AT 9Z15 PM REGARDS DIAMOND INTBAFRAD NOT TO BE TRANSMITTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION: NAME Wiim DM Messrs. Kaupisch, Pieagli, DEPT. WAitant Dix or SIGNATUiRE (SIG3NATURE OF INDIVIDUAL AUTHORZEfr TO APPROVE) For Use by Archives Dision ORIGIA (File Cooy) W~aCN.&edw &409 D-pth (IMPORTANT: See guide for preparing foren) Checked for Dispatch: *4 4+4 + 4U4 4 >4 A 3A May 28, 1962 My dear Mr. Kasjanov: You were very kind indeed to remember me, and to remember me in so nice a way. I appreciated very much the color slides you sent me, which you took on the occasion of our visit to the Guri site last January. They are a very pleasant reminder of a very pleasant day. I hope .we shall have an opportunity to meet again some time soon. Sincerely yours, b-lo William Diamond Assistant Director of Operations Western Hemisphere Mr. Michael Kasjanov Las Babas Camp Corporacion Venesolana de Guayana Caracas, Venezuela WDiimond/dea FORM No. 26 (2-62) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION IN COMI N G WI RE DATE OF R OU T I N G WIBE: 1962 M3 LOG NO. : R 3 ACIION COPY: M. 'TO: DIAMMO WINFORAATION MR COPY: FFOM: ICTA71AM DECODED BY: TEXT: inmmem amni AIM EW TO n 'i IV, '1 000=CI. umB m"V=0 DUPLICATE * 0 03dMk 'orn No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: MM = M DATE: ay 1 tieRW $ VMZAR CLASS OF IFGV SERVICE: COUNTRY: TEXT: Cable No.: EV TODA AIM FWPORT C CADAJ PROJMIT AND FURTME MRPT"A O FCRTMGENG GUM P[IC STOP BKST WISHES NOT TO BE TRANSMTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION: NAME 111lion Diand DEPT. Opera c CS*NATUR 7. (SIGNATURE OF INDIVIDUAL AUTHORIZED TO APPROVE) 1/84 For Use by Archives Division ORIGINAL (File Copy) (IMPORTANT: See guide for preparing form) Checked for DIspatch. DIGPATcHEO LEEAL ft 4 COM 4 mi {~ Si~J { J e . ";f * * A *~ :& Nay 16, 1962 Mr. Calvin V. Davis President *arva magineering Company 400 Vest Nadism Btreet ohi6ag.I, Illinois bar Mr. Davie &7 This is to aknowledge with thanks the reseipt of six opies of Volume III, Gurl Projeet RIpert. This sempletes the rseipt on our part of all final oopies of this report. I apprn.tate your plaeing ywurself at our disposal in ease any additional information is required. If this should be the ease, we ill get in toUeh with you. Sinoerely yours, A. D. Spottswood Chief, Publio Utilities Division Dapartmant of Technioal Operatione MP:abs cc: Div. File C WL^ n HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 May 10, 1962 Air Mail - In Duplicate Mr. A. D. Spottswood Chief, Public Utilities Division International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. Subject: Guri Project Dear Mr. Spottswood: Enclosed are six copies of the Guri Project Report, Volume III,- entitled "Guri Project Appendices" which we have prepared for the Corporacion Venezolana de Guayana, Caracas, Venezuela. Drafts of this volume were sent to you previously. editorial changes were made to the draft before printing; therefore, the drafts are now superseded. This volume is the last of our series of three reports on the Guri Project. We shall be glad, however, to furnish you with additional data in order to assist you in your review of the Project. Very truly yours, Calvin V. Davis President Encd: 6 copies of VolurrI Wa I VW 10. 5? cc : Dr. S. Izaguirre (w/ScU aci F18kIAED YHAqMO0 DMIF33MIVM3 ASRAH P-33MID03 OWITJU-MOD eTZ3LOqq 53VIR T3394r WOaICAM T83W OO laE-a HqJooMAi 3ioM j3J3T -IOMJ lIi ,B ODAOIH "CoaA:IH DW31RAH" ZZ30OOA 3JOAD Sapf ,01 ysM isloilquG nI - isM ziA boowajloq2 .G A .- oiaiViG asilililU oilduq tl!idD 101 Ansa 1snoilsns1In1 lnrnqolgvgG bnsE nrjouirianoogA w .z ,9ilP, H 8181 .D .G ,s nodnidasW :boowalloq? .iM !issG III 9m.UloV I-ioqg5 jostoi iDj sijt 1o asiqoa xig s!s bsoaona "eaqoibnsqqA jogto-lq i-xvo" tsasysuD sb sazsIossnV LrioBoqoD sdJ zol b5isqsq sqvd sw doidw ..slsmssnsV te.3.-1SD asgnA:d I1isolfbI .ylauoivsq uoy olI tnsa sisw smrrlov eirfl lo alwirG won 9s* q4sib td s esolIsrfJ ;ganibnhq 9iolsd llsirb sdt ol 9bsm rssw .bsbsaisque .13stoiq viimo srL no aeioqgs sxirfl lo asise !uo lo Iasl sdi ai mulov eirfT !rbso ni sisb 1snoilibbs riiw uoy ein!rul ol !rsvgwod ,bsig sd ulsda sW .1sto, sAd 10 wsiv91 !Joy Ri voy dlae6S ol teaTIoy yluxtj "v BivsG .V nivlsD jnsbiaeqss :iona I AUW IgT uloV lo asiqoa a 33NrnO4U~33W) 9sT11IugB&I .8 ,TIG : G3AlJ ' , I orm No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATiON RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: PEE GUERRERO DATE: MAY 8, 1962 MIRAFIfES CARACAS CLASS OF SERVICE: IBF GOVT. COUNTRY: VENEZUEIA TEXT: Cable No.: REURCAB REPORT ON BASIS OF CONCLUSIONS IN OUR APRIL 24 LETTER WILL BE MAILED WITHIN WEEK STOP MEANTIME ARE COMPLETING ARRANGEMENTS FOR MISSION TO MAKE COMPLETE APPRAISAL CF GURI STOP MISSION WILL CONSIST INITIALLY OF THREE BANK STAFF AND ARRIVE CARACAS APPROXIMATELY JUNE ONE STOP ADDITIONAL PERSONS TO FOLLW STOP GURI APPRAISAL WILL INVOLVE LONG TERM TRANSMISSION REQUIREMENTS AND WILL THEREFORE LEAD TO CONCLUSION ON JUSTIFICATION OF IM ITERCONNECTION ON ASSUMIPTION THAT GURI IS CONSTRUCTED AND ON ASSUMPTION THAT GURI IS POTPOIED STOP AS NOTED IN APRIL 24 LETTER AND AS WILL BE ELABOPATED IN REPOT SHORTLY TO BE MAILED DEFINITIVE BANK VIEW ON TRANSMISSION LINE MUST BE POSTPONED AND GOVERNMENT DECISION CCNCERNIWIJ IT SHOULD BE POTPONED UNTIL APPRAISAL LONG RANGE JUSTIFICATION IS COPIETED STOP PLFASE ADVISE ALFONSO RAVARD ON APPRAISAL MISSION PLANS STOP IN t CIRCUMSTANCES SUGGEST WOULD BE MORE USEFUL DISCUSSION TAKE PLACE AT IA TER DATE BUT WOULD WELCOME VISIT NOW IF YOU WISH BEST REGARDS DIAMOND NOT TO BE TRANSMITTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION: NAME Willim Diamond Cleared with and copy. Mr. Piccagli DEPT. - Western Hemisphere SIGNATURE (SIGNATURE OF D U ED TO APPROVE) For Use by Archives Divi ORIGINAL (Fole Copy) (IMPORTANT: See guide for mreparing form) Checkedt for DIsnatch: I IA II+ n4 4A~~ A A,~: 11, * -~ Al* Al Form No. 27 (7-61) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION OUTGOING WIRE TO: .JOHN 0. DI WILDE DATE: MAT 8, 1962 0/0 THE RITZ HOTEL PIAZZA EUCLIDE - PARIOLI CLASS OF ROME SERVICE: NLTR COUNTRY: ITALY TEXT:- Cable No.: ONE HAVE AGREED BOHR GO VENEZUEIA FOUR WEiES JUNEi WITH TOD MISSION EXA4INING POWER REGARDS AVRAMOVIC - NOT TO BE TRANSMITTED MESSAGE AUTHORIZED BY: CLEARANCES AND COPY DISTRIBUTION: NAME Dragoslav Avramovic DEPT. Economic Departm SIGNATURE (SIGNATURE OFINDIVIDUAL AUTHORIZED TO APPROVE) For Use by Archives DIvI ORIGINAL (File Copy) (IMPORTANT: See guide for preparing form) Checked for Dispatch: II N* 444 2 aA>i&J aA A A >A 44 > FoR* No. 26 (2.62) INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION INC 0MI N G WI IE DATE OF R O U T I N G WIRE: :AY 7, 1 LOG NO.: C3 ACTION (DPY: O: WILIA DT 1 . INFORIATION COPY: LCDECO:DDED BY: TEXT: AWAITIlf "--,ORT AN1OUNCD .1 T .UR LETT -F 24TH APil fL TLAllMI~ST&. LIIE IT C:DEU TC PLY TO IT. I.-- FC4ATION THAN C, TAIIIBD IN THAT LLTT RHICH AAS _FT US ERLEXECD TO E ATL ATE TlE 'ACTO WLI CAUSED THE TO C ITS VIWS I GADING T1E PR(JECT. A' C", S IIN VISITI YO IJITM COLOT 1 ALFQT lAV-PD AND I F. 'ALAVIZ TO -. V- I SITUATION TAJCI PCWER PRUJECTS APD wiNFrM YOI' OF~C QU SITIU AMP LELA)ED PATTER L UCH AS 1POEL IAPAGEMET POLICIES. BEST 3PAPs ORIGINAL CORPORACION VENEZOLANA DE GUAYANA ELECTRIFICACION DEL CARONI Las Babas Camp No.__ April 23, 1962 Mr. William Diamond International Bank for Reconstruction and Development Washington, D.C., Dear Mr. Diamond, You may recall that on the occasion of your visit to the Guri dam site you said that you would like to have some copies of the photos that I took of the group. I am pleased to send you these eight slides as a reminder of your trip. Very truly yours, -- Michael Kasjenov C.V.G. Geologist -A Icrt AYAUa AG AML \ OX3V3\ mOl lC09900 IMORAD MODA3 11iJlT veG bn a fxoo .'. ensnd h os$ : soxtolo 60 cd ;tad* Ilsooes oJr .L - - 'a s i o LLE - i i kfc ' o sila :,Ib ILuO seles *a a. t24 a j e .adii jmr Th e sg' eri:1 besseLg et qo olo I uc od 10j fjaui r rV . 3 11AQS~1Q 073AI03 April 13, 1962 Mr, 3. Montford FYaik Executive Vice President Harsa ftgineering Company Consulting Zngineers 400 West Madison Street Chicago 6, Illincis Dear Mr. Ftcik: This will acknovledge, and thank you for, your le April 9 with which were enclosed six copies of Volmne 1Ilt', the Guri Project Reper. We note that Volume UI of the report will be available in tro weeks and we look forward to receiving copies at that ti-e. Sinoerely yours, A. D. Spottsuwood Chief, Public ltilities Division Department of Technical Operations ADS: bli HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 April 9, 1962 Air Mail - In Duplicate Mr. A. D. Spottswood Chief, Public Utilities Division International Bank for Reconstruction and Development 1818 - H Street, N.W. Washington 25, D. C. Subject: Guri Project Dear Mr. Spottswood: \ Enclosed are six copies of the Guri Project Report, Volume II, en- titled "Engineering Aspects," which we have prepared for the Corporacion Venezolana de Guayana, Caracas, Venezuela. Drafts of this volume were sent to you with our letter of March 16, 1962. A few minor changes and corrections were made to the draft before print- ing; therefore, the drafts are now superseded. Our third - and last - volume of the Project Report is presently in the reproduction stage. Printed copies should be available within two weeks. Very truly yours, E. Montfo d Fucik Executive Vi e President Enc: 6 copies of Volume II- /" cc: Col. Alfonso Ravard (w/l enc. Dr. Izaguirre (w/l enc.) 1Marah 28, 1962 Mr. I. A. Koelsr Harza Enginsering Coepay 400 West Madismn Street Chicago 6, lnunos Re, Out ?xeieet Beporty Veneuuela Dear Mr. Koelsert Thank you for your letter of March 27 enoloesig six sets e Appendies A, 3, 0, 1, F, I and J of Vl. I of the Guri repart. Sine we had prov emy received Appendiess D, 0 and q, we now have all the section. which will make up Vol. III. We are glad to have the sopy of Dr. Straub's report e the 'Noeoins Storage Dan - Caroni River' and will return it to you as soon as we have finished with it. We very auh appreeiate yer coeperation and the promptaess with which you have forvarded the various parts of the report as they became availablo. Sinsrely yours, A. D. Spottsood Chief, Public Utilities Division Department of Technical Operations Append. - 1 set ea. to Messrs. Fins Sheehan Op.Files 3 sets in P.U.Division bli HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 March 27, 1962 Air Mail - In Duplicate Mr. A. D. Spottswood Chief, Public Utilities Division International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D.C. Subject: Guri Project Dear Mr. Spottswood: We are enclosing six (6) copies each of the seven following sections: - Bibliography of the Caroni River - Geology and Construction Materials, - Hydrology of spillway design-" c - Hydraulic Model Studies - - Macagua ProjectVC - Detailed Cost Estimates' - Economic Studies' These seven sections will be a part of Volume III of the Guri Project Report, together with the three sections sentto you earlier. These three sections were: - Alternative Project Studies ' - Power Market Survey - Thermal - Electric Power Development (Sargent and Lundy Report). Also enclosed is one (1) copy of a report by Dr. Lorenz G. Straub,entitled: "Necuima Storage Dam - Caroni River Report on Exploratory Experimental Studies of Schemes for River Diversion" Mr. A. D. Spottswood 2 March 26, 1962 Only a few copies of this report are available. The enclosed copy is our library copy and may be retained by you as long as necessary. After it has served your purposes, its return will be appreciated. We are presently preparing copies of computations made to establish the unit prices as used in our estimates. We are not planning to publish these computations in our Project Report. However, we will send you three (3) sets of these supporting computations for your information. Publication of the third (and last) volume of our Project Report is scheduled for the latter part of April. Copies will be mailed to you as soon as they are available. We shall be glad to furnish additional information as may be needed. Very truly yours, V. A. Koelzer Associate Enc: (7) sections (6) copies listed above and (1) Report t E cc: Col. Alfonso Ravard Dr. Izaquirre March 27, 1962 Mr. K. . Sorensen Haria Engineering Ccmpany WoO Went Madison Street Chicage 6, Illinois Dear Mr. Sorensen: Thank you very much for your letter of March 26,,1962 enelosing three sets of Exhibits 18-29 and 31-33 to attached to Draft Volume 11 of the Guri Project Report. Yours vewry truly, a "n' A. D. Spottaswod Chief, Public Utilities Division Department of Technical Operations HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 March 26, 1962 Air Mail - In Duplicate Mr. A. D. Spottswood Chief, Public Utilities Division Department of Technical Operations International Bank for Reconstruction and Development 1818 H. Street, N. W. Washington 25, D. C. Subject: Guri Project Dear Mr. Spottswood: Enclosed are three sets of full size prints of Exhibits 18 through 29, and 31 through 33. Preliminary, reduced reproductions of these drawings were of the drafts of Volume II, a part sent to you with our letter dated March 16, 1962. Very truly yours, K. E. Sorensen Head, Planning Department Enc: as listed cc: Dr. Izaguirre March 21, 1962 Harso hagineering Company 400 West Madison Street Chicago 6, Illinois LIhsun&ez: Mr. I.S. Sorensen Gentlemens I thank you for your letter of March 16 with enclosed drafts of Volume II and Appendix D of Volume III of your Guri Project Repert. 3.io (CT ) Sincerely yours, A. D. Spottswood Chief, Public Utilities Division Departient of Technical Operations HAR-A ENGiNEERENG COMPANY CCNSLJL1NG ENGINIEERS Kv'E_, T R, J .CT C -A' F Ypfl I r- ET T r ASL ODES- AF7ENG H:CAG C CHICAGeOC 6, ]LI NC S TF'E -E i RANDOLPH 6 -3451 March 16, 1962 Air Mail - In Duplicate International Bank for Reconstruction and Development 1818 "H" Street Washington 25, D. C. Attention: Mr. A. D. Spottswood Head, Division of Technical Operations Subject: Guri Project Dear Mr. Spottswood: Enclosed are six (6) copies of a draft of the Guri Project Report, CC olume II. Some editorial changes may be made to this draft, but we expect these to be minor. Full-size drawings of Exhibits 18 through 33, more legible than the ones enclosed, will be sent to you in a few days. Publication of Volume II in its final form is scheduled for March 30, 1962. Twelve copies will be furnished to you at that time. Also enclosed are six copies of our draft of "Alternative Project Studies". This will be incorporated in Volume III as Appendix D. Very truly yours, t 0 K. E. Sorensen Head, Planning Department enc: as listed cc: Dr. Izaguirre as ia Isw al -E MIA E4'1 VECEIAED YMAqMO: DMI33MIOM3 A194AH eFl33MIOH03 OMITJUPMOD TO3OFqq Fq3VIF1 T33AT8 MO-ICAM Ta3W OO0 Ia4E-& HqJoaMAI 2WOM4j2JT PI0MIJJI,8 OVADIH3 DOAatHs oM3SRAF4" eP3ROaA 3JSAO Saf 'al d:-rksM lsoigilqG i - lisM xiA -101 -Ansa Isnollssiftl Ineinqo18evs bus uobowilanooa.R tswxta " H " 8181 .D .G *PS nolgaidasW boowatioqB .( .A .iM :noilnoltA 10 noisivici ,bs5H afroilsisqO IsoindoeT tocI iiuD :IostduB :boowuitoq .IM -xseG ,tIoqsA jtoxc iwOD edf lo Ils-ib . lo aoiqoo (a) xis ais beaofon ,Ilsib sirft ol absm ed ysrn aegnsdo Isiiotibe smoe .II smuloV 81 alididxf lo agniwsib eaia-Iu'l .ionirn ad ol saat tosqxsw lod ol Insa ad M1kw ,bsaoons asno 9di n"I s1digsl 9siorn ,EE Aguo-idl ai rrrxol Isrfal niII1 amuloV lo noilsoilduq .aysb wel s ni uoy bodai-ul ad 111w asiqoo 9vIlwT .Sal ,C rifsM iol bshubrfeoa .smb tsrft 1s xioy o1 139toxI sviln-mst1A" lo flasib uo lo aiqoD xia .ss beaolons oaIA .G xibuqqA as III smuloV ni bsls-roq-oori ed 111w aidT ."asibul? ol 1 a-iuoy yIu-t yxsV nseansio8 a .i lasmtisqae0 Snians1q ,bssH beltil as :ons :9 Ad Siwl AN .. ON )Wye K'r-V Ic March 9, 1962 Mr. N. F. SOVInABn Harsa Engin0rin 0amp y 400 West Madison Street Oboave 6, Illinois Daw Mr. Soreens I thank you for your letter of March 7, 1962 with en- olosed espise of Appendi Volum III of your report on the Guri ProJt. Yours very truly, A. D. SpottOaoOd Chief, Public Utiliti.e Division Dopartment of Technical Operations HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 March 7, 1962 Mr. Mario Piccagli Department of Technical Operations International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. Subject: Guri Project , Venezuela Dear Mr. Piccagli: I enclose six copies of our Power Market Survey - Supporting Computations, for your use in reviewing the Guri Proje4t. This material will become Appendix G of Volume III of o xj report. Some other sections of Volume II and III are now being typed and will be sent shortly. Doc No , Very truly yours, C0 nIV(v, K. E. Sorensen Head Planning Department enc: Appendix r ( six copies)-/- . ' cc: Corporacion Venezolana de Guayana w/enc. S. Izaguirre w/enc. HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS "HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 March 6, 1962 Mr. Mario Piccagli Department of Technical Operations International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D.C. Subject: Guri Project, Venezuela Dear Mr. Piccagli: We have received your letter of February 28, 1962. It may take us several weeks to complete all the exhibits and to reproduce in final form Volumes II and III of our project report. Therefore, we will follow your suggestion, and send you drafts of the report material as they be- come available. We expect to have some sections ready this week. For your information, we enclose the proposed tables of contents of the forth- coming volumes. In the meantime, if you should have any specific questions or requests con- cerning the project, please write or telephone us. Either I or Mr. Marcel Bitoun would probably be in the best position to answer any questions by telephone. Very truly yours, K. E. Sorensen Chief Planning Engineer Enc: Tables of Contents for Volumes II and III (in dupl.) cc: CVG w/encl. Simon Izaguirre w/encl. February 27, 1962 Mr. Calvin V. Davis President Harsa Angineering Company 400 West Madison Street Chiago 6, Illinois Dear Mr. Davis: This is to acknovledge ,with thanks your letter of February 21, 1962 addressed to Mr. Black, ,with the accompanying copies of your report on the Guri Project. \ - . - If the two additional Voluues are expected to be available shortly we shall look forwvlr to their arrival. If, on the other hand, a number of weeks will elapse before they are available, it might then be desirable for you to send us one draft copy each of Volumes II and III. Should any questions arise which might call for discussions with your firm we 0(ould take advantage of your kind offer to dis- cuss the details of your studies here in Washington. Sincerely yours, ario Picoagli Asat. Chief, Public Utilities Division Department of Technical Operations MP:abs cc: Mr. Gondicas w/copy of Vol.I Div. File HARZA ENGINEERING COMPANY CONSULTING ENGINEERS RIVER PROJECTS 400 WEST MADISON STREET CABLE ADDRESS 'HARZENG CHICAGO" CHICAGO 6, ILLINOIS TELEPHONE RANDOLPH 6-3451 February 21, 1962 Air Mail - In Duplicate Mr. Eugene Black, President International Bank for the Reconstruction and Development 1818 "H" Street Washington 25, D. C. Subject: Gu i Hydroelectric Project Dear Mr. Black: Enclosed are six copi'es of the Guri Project Report, Volume I, entitled "Economics of Hydroelectric Development" which we have prepared for the Corporaci&n Venezolana de Guayana (C. V.G.), Caracas, Venezuela. Also enclosed are two copies of a report entitled "Thermal- Electric Power Development in Venezuela" prepared at the request of the C. V. G. by Sargent & Lundy, Engineers, Chicago. These reports are transmitted directly to you at the request of the C. V. G. and in agreement with the arrangements made at a conference held in Caracas on January 23, 1962. Attending this conference were members of the I. B. R. D. Mission headed by Mr. W. Diamond, members of the C. V. G. staff headed by Colonel Alfonzo Ravard, and our representatives. It is our understanding that your staff will proceed with a review of the Guri Project on the basis of our Project Report, Volume I. We can supply you with as many copies of this Volume as you may require. Two additional volumes, currently in preparation, will present the engineering studies and detailed supporting data. Supporting data can be furnished to you in draft form in advance of publication of Volumes II and III, We shall be pleased to discuss the details of our studies with your staff in Washington at your convenience. Very truly yours, C at V avis Pre&ident Encl: As listed cc: CVG, Caracas, Venezuela Y14AqMOO OWIF133MI1M3 ASAAH eR33HI043 OMITJUaWOZ) eT3U.OAlq R3VIR TE33T8 A.eIoAM T3W OO l8eC-8 HM4JOaHAS 3 sqo ajmT 810&41.JJt ,a OADIH "OCA:I+ 1 j AH" 823ROOA L8A1 slhoilqvU nI - lisM xiA insbleas-x tlsId qnsau .iM nollowitanoosl 9&i 1Q1 insa IsjnolsmnsnI i - 11 vsysG bos is9il8 "H" 8181 .D .G S irintaidasW J L/ :AIfsIl .xM issG bltiirna ,1 srnzmoV I-oq*SR lostolq phuD si 10 as kqoo xia s-s bgaolona iol bsqg-sq svsd sw doldw oilnwmqqsv50 D IqnllvYH lo akfmonooa" .sIuqrrY ,asps-xsD (.D.V .D) sahysuD sb znsIomssnY &Sasoq-roD qdi 31x3os1I-Iam1.dT" bsLtilas iioqsi lo azlgoq owi 9ss bsaolnus oslA .D .V .D Sri lo iasup5i St is b3ssqsiq "sI9umqnsV ni ianmqolsvG Iswoq .ogs-akd3 .aixsaina sybfwJ A insgxs8 yd .D.V.D 9d to lasupex 9At is uoy W* ylos-xib bsrirmans-xi 9xs at-oqsx sasdT ni blsd sonstqnoz) s is sbam ainsmsgnslis sdl dilw Insnassis ni bus gdr to aisdmsm eisw son-isilooz aifU galbs24A .Sa1 ,ES yisunsT. no asosmsZ .D.V.D sift lo axsdmsm lbnomsKG .W .-iM yd bsbssd nolaaiM .GI..R a.I .svklisns~axqsix muo bas ,b-svsR omnol1A IsnoloD yd bhbssd ulsla Pu0 sd* to wkygsm s dikw bssoomq iw 1lsta muoy iszt guibnsQasmsbw nUo al JI uo- ylqqua nso 5W .I amIoV ,imoq*R iztoxq muo lo alasd srt no lostomq lazouibbs owT .smlnpsx ysm Loy as s*rrloV alzO lo asiqoo yrwm as difw bnA agibuma gassn1eugas odi inasmq 111w enoUsmxqsq ol yln svruo ,asmulov Slsmb ni moy ot bodainmil sd uso sisb gnkimoqqu8 .ssb gnUI-oqqua bolisiab .MII bns II asmriloV lo nollsolIduq lo gznsvbs ni mmol ni Ilida sioy dMkw asibula muo lo alisisb 9M$ aavuakb ol beassIq sd Ilsda 9W .sousinsynoo muoy is 0o*8 nidasW Y(I i mIV bamuoy tkysG\V LVJD *isbiismq 1Sn 9fl$ ~as ss3 aAV :lon Mr. Erle Cooko, Jr. February 20, 1962 OrVis A. Schmidt Venemaela - Guri Dam This note is a brief reply to the inquiries made in your note of February 15 to Mr. Mondls about the Gur Dam. This project has been under study for several years 1W a nuber of firma, and most recently by arsa M.iaeermig International of hioage, who are Mareuting and evaluating the orlier studies. Thre is no doubt that a very large amount af power can be generated at this sit. an the Caresi Riverl the qestio is idihther the prespoetive market will justfy the very large investment required for even the Sinimal first step. ars. is now eampleting their study of the projeot. Their report (whikh ill run to three volumes) is espected to include an analrals of the econmie Justifiestien and a rimamandatin an possible tiwdag of proect developumet. Colonel Rafael Alfonso tavard, who is in charge of the Guayvea Development Corporation, whieh is responsible for development of this projeat, has instrpted Harsa to preSent its reports to the Bank as they becme available and we oxpoet to receive the. within the next two months. In response to a request from the President of Venasela we have agreed to study the Marsa reports and to lnfoum the Government of car views. Cleared with and *a Kr. Pisoagli @eMr. Kendels OSohidt-SWheelooksbh FoRM , 75 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Date ROUTING SLIP AlN M yROOM NO. To Handle Note and File Appropriate Disposition Note and Return Approval Prepare Reply Comment Per Our Conversation Full Report Recommendation Information Signature Initial [Send On REMARKS FEB 15 1962 From 70sM No. 58 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (5.48) OFFICE MEMORANDUM TO: Mr. M. M. Mendels DATE: Feb. 15, 162 FROM: Erle Cocke, Jr. c SUBJECT: Re: Guri Dam. I would like a little information about the Guri Dan in Venezuela. I am personally committed to at least try to find out if there is an IBRD position; is anything going on; is it alive or dead; does it have a chance? VE - Guri FORM No. 59 (2-55) CROSS REFERENCE SHEET COMMUNICATION: Letter N'o. 2 DATED: 26 January , 1962. TO: Orvis A. Schmidt FROM: illia-m iiiamond FILED UNDER: VE - General. SUMMARY: Excerpt: About Guri: I hope you agree ihitl tie line we took on -uri. i cannot visualize any alternative to the suggestioni that,. hen Larza's rejorts are in, .e appraise -he project as though we vere considering financing it. incidentally, during our talk with Alfonso iavard, I asked about his ,lans for administration and management. he considers it was t6 have curin constructed (and perhaps oPerated) as a department of the Guayan Corporution. This, I think, would be pretty bad! ,e told him about the advantageous of an independent entity, ana urged him to think again. Later, we mentioned this to ?erez-Guerrero, who said tie had no doubt of the necessity to set up a Caroni hydro. Corp.; Oe said uiris subbect taid been adiscassed witr Gevre *ooas (at er Balck's suggestion) and oods had urgea thie saie coursi. *BANK* INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET,N.W. TELEPHONE EXECUTIVE 3-6360 WASHINGTON 25, D. C. CABLE ADDRESS-INTBAFRAO Copy of handwritten letter from Mr. Diamond in Caracas delivered Jan. 29, 1962 by Mr. Christian Finne Wednesday, January 24, 1962 Letter No. 1 Dear Orvis: 1. I had hoped to complete a fuller (and briefer) report before leaving here, but could not. After days of doing little., life became hectic. I will make some more notes en route to Bogota this afternoon and will mail them from there. Chris will carry this back to Washington with him Friday. 2. Following are comments on the state of projects, and a memo from Sidney on our meeting with the President. Sidney will of course cover all the subjects more fully when you see him. Power project 3. The major hurdle in this project (involving a $24 million foreign exchange component out of a total $37 million cost) is C&DAFE and its financial position. It is only three years old and therefore has little experience; and it inherited an untidy situation when it was created by combining around 15 separate stations around the country. The result is the Bark's classical power problem in Latin American countries. 4. The line pursued has been that the staff could not recommend a loan unless actions were taken or commitments made with respect to (1) increasing tariffs to a level adequate to assure a reasonable return on assets in operation; (2) obtaining consulting services to improve accounting, financial control, for- ward planning and operations, and to reduce costs; (3) establishing a formula under which tariffs can be kept abreast of rising costs. For discussion purposes, we have insisted on achieving a return of 8% in the early future, compared with today's roughly 1% (after taxes). I do not think that, in the clinch, we need insist on going to that level, but it seemed wiser to use that figure to start with. We have told the Venezuelans that it is up to them, now, to let us know what actions they propose to take in these fields; and we have warned them that an invitation to negotiate, if forthcoming, would be conditioned on their taking or covenanting necessary actions. 5. CADAFE has reacted strongly against these views, being imbued with the idea that "a government enterprise should not make a profit" - a view which P-G said represents not government policy, but the goverment's lack of policy. Fomento, technically the owner of CADAFE, is, I think, more understanding. CORDI- PLAN is in our camp. -2- 6. I am not overly pessimistic about getting a deal satisfactory to us in due course. The real difficulty will, of course, be the tariffs and the.Govern- ment faces a difficult problem in arranging for increases sufficient to assure total revenues of a desirable level. These difficulties stem not only from the way in which (machinery by which) tariffs are set, but also from the structure of consumption (e.g. role of INDS as power-user in relation to its contribution to total receipts), and the political situation (split in the AD party and Betan court's loss oT votes in Congress.) 7. Perez-Guerrero said effective action to achieve an adequate return depends on legislation which would give the Central Government authority to regu- late tariffs, which are now fixed by (and under continuing pressure from) local bodies. He said such legislation had been under consideration for some time, as part of a program for putting order into government enterprises, and was to be presented to the next session of Congress, which opens in March. He thought it possible that the legislation could be passed by July 1. He proposed the follow- ing course: (1) immediate acquisition (with Bank help) of necessary management and accounting consultants; (2) introduction and passage of legislation establish- ing national competence over, and machinery for, tariff regulation; (3) in the meantime, articulation of a policy with respect to power, to assure an adequate return; and (4) laying out a precise program of implementation of that policy; (5) step-by-step tariff increases in accord with the foregoing, beginning with industrial consumers, then government consumers, then others. P-G felt it unwise to make ad hoc increases until legislation had been passed. We said his plan made sense, but stressed that, in the circumstances, we could not recommend (and if we did, our management would probably reject) signing a loan before some first tariff increases were effected. 8. Otero, who is not a very forthcoming person, did not react to the fore- going (put to him by Perez-Guerrero); he said he thought the problem was not tariffs, but inefficiency. While admitting that much needs to be done on the cost side, we felt this can't achieve a reasonable return in a finite time. 9. As you will see from Sidney's attached memo, the President last evening spoke hopefully and forcefully of taking effective action in the near future, but today, the Finance Minister spoke very pessimistically and doubted the Government's ability to achieve anything in the field of legislation on tariffs this year. He added an interesting thought: that the Macagua hydro plant be set up as an inde- pendent entity (which might some day cover the Guri project) and that we lend to it for the transmission line. He felt it would be feasible to put that entity on a sound basis. I haven't discussed this with Finne, but I know that a similar thought had occurred to him. 10. Finne and Jacob will probably return to Washington this weekend and will give the Bank the full story. I want, however, to call attention to one point, and I hope you will call it to Phil Squire's attention. Chris will report in detail on CADFEls need for managerial and accounting advice. Perez.Guerrero wants our help in finding the necessary people or firms and I think CADAFE would accept them. I said that we would help - although I am aware of the Bank's normal reluctance to propose consultants and its preference for reviewing lists drawn by others. In this case, the time for help is now and I fear CADAFE will continue to flounder and time will be lost unless we come up with specific suggestions. We have done this on other occasions and I hope we can do so now fairly quickly. Chris - who is more concretely aware of the needs than I - shares these views. I hope T.O.D. and you will support action along these lines. Perez-Guerrero will write us about this, formally asking assistance. a. In the case of the Orinoco bridge, the Government is asking for a study, not by independent consultants on whose approved proposal constructors would then be asked to bid; they are asking for proposals from consultant-contrac- tor teams. (13 are expected, 14 wholly foreign and 4 combined foreign-Venezuelan.) The proposals would then be turned over to the team of Swiss consultants who handled the Maracaibo bridge and it would review the proposed designs and cost estimates and recommend the best (all factors taken into account). This procedure is not conventional. However, I share Hardy's view that in these circumstances it is acceptable, so as to get the best technical solution of the problem, among the various possible alternatives. Such a practice is not unusual where special tech- nical problems are involved. I think we ought to go along with it - if we decide to finance the bridge. b. Cliff was asked by the Minister of Public Works if we could give him some help in the preparation of quantitative economic justifications for highway projects. This is the field in which the Minister's documentation is always weakest. Of course, the occasional presence of T.O.D. staff here does help the Ministry in this field. However, I think it would not be inappropriate to help in a more systematic way. Could we not send one of our transportation economists here for perhaps a month, to go step-by-step through the process of an economic justification with the Ministry? Alternatively, when the time comes for a final appraisal of the projects cited earlier, perhaps a transportation economist could come a month earlier to help the Ministry prepare the final documents for us. I realize this would be a burden on T.O.D. staff, but I think that, if it could see its way clear to giving such help, we would be providing a real service. IDA 19. When I raised the question of joining IDA, Otero said at first that Venezuela had decided long ago not to do so and this was no time to reverse the field. Sidney said his understanding had been that no decision had ever been taken one way or the other. Otero admitted he wasn't sure, but said that he saw no point in joining if Venezuela were not "eligible" for IDA credits. I argued that one. However, Otero pointed out that, with Congress no longer in the con- trol of the Executive, there was no hope of passing IDA membership for at least a year, or until there is some new alignment in the Congress. Indeed, he said, he thought there would be great difficulty in getting Congress to authorize or approve a second Bank loan. 20. Otero said he had a personal appeal from Black to buy Congo bonds, but this too could not be done without Congressional authorization and that would not be possible. 21. He particularly asked that the foregoing be told to Mr. Black for, Otero said, he could not put it into writing. Development Bank 22. We discovered that no preparations had been made for discussion of a private financiera. Contrary to our expectations, Vallenilla had apparently gone no further in his own thinking or in discussion with others, since the Vienna meeting. (The subject was new even to his Board of Directors.) We there- fore had to start, from scratch, to sound him out on his views on the desirability and feasibility of a privately controlled and operated financiera, of the kind which IFC and IBRD could finance, and on whether the Government wanted such an institution and would support it. On the Government side, we have gone over the field with him, his Board of Directors, Perez-Guerrero, Otero and the President. So far as the private sector is concerned, we have had several meetings with Rodolfo Rojas, presi dent of the Banco etropolitano, dean of the banking corn- munity, whom Vallanilla and everyone else considered should and would be the key man on the private side. Rojas, in his turn, has discussed the matter with a few of his colleagues in other banks. 23. Since so little previous thought had been given to the matter, our meet- ings and discussions have been largely educational - e.g. telling what is involved in the creation of a private fi nancicra, what its main characteristics ought to be, what the Bank's experience in other countries has been, and what the procedure for getting on with it should be, assuming there is a genuine interest. 24. Vallenilla and Perez-Guerrero, we think, are genuinely interested. Otero has been completely non-committal, even pessimistic. Rojas appeared enthu- siastic, and reports that the initial reaction of his fellow bankers is very favorable. The President appeared enthusiastic too. 25. Knowing how long it took in other countries to get assurance of public and private interest and to come up with a concrete proposal, I am not surprised that we have got no further here. What has been disappointing is (1) the complcte lack of preparation before our arrival and (2) the fact that we have made no con- tact with key private sector people other than Rojas. The latter has been the result of Rojas' and Vallenilla's own wish. They felt Rojas should take the lead in this area, and that we should come into the picture later. Not until the 16th could we get our first full-dress discussion with Vallanilla and the 17th our first with Rojas. Moreover, we wanted to be pretty sure of real government interest and support before going to others and this has not been the case, or at least was not until we spoke to the President yesterday. I think Grayson and Wheelock will probably be called on for discussion with others before the end of this week. 26. We have of course, informally and privately, discussed the proposal with a fair number of other people. Reaction has been mixed. Some have felt there was no doubt of the need for a private financiera; others, that capital was not in short supply, or that Fomento (which is expanding its activities) can dG an ade- quate job and that there will be no room for (or possibility of) competition from a private financiera, etc. 27. Mr own feeling is that there is a place in Venezuela at this time for the kind of institution we have in mind and have helped to establish elsewhere, that it could compete with Fomento in the range of financing and of technical services it could offer. But I vould not want to go ahead until the Government's position was clearer and until I knew much more about the views of the private sector and how they do business. In connection with Government support, a crucial matter is going to be long-term low interest, subordinated capital. The prospects for such funds seem dim, and the question is whether without them a financiera can procure sufficient viability and attract private equity. 28. Grayson and Wheelock will in due course report much more fully. I suspect that, at the end of the week or so they plan to remain in Caracas, they will be able to go no further than to report, with more assurance than we can do now, whether the proposal is feasible, whether it will have government support, and the shape the financiera might take. I fear that a concrete and detailed proposal may not .6- have emerged by that tine. In this event, IFC will have to send someone back later on for further talk, after the Venezuelans have put something precise on paper, or to help them put something on paper. Irrigation and drainage 29. The Government appears appreciative of the report we sent in December and we are told they are acting on the recommendations. Wheelock will check on this later. 30. This is all for now, Orvis. All the best, /s/ Bill (William Diamond) Mr. Orvis A. Schmidt IBRD 1818 H Street, N. W. Washingtcn 25, D. C. ~L4A- COPY OF MEMO FROM MR. WHEELOCK IN VENEZUE[A, RECEIVED MONDAY, JANUARY 29, 1962 FoRK, No. 57A INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ANDEEOM T (5- 48)INENTOABAKFRRCNTUTO OFFICE MEMORANDUM TO: Files DATE: January 29, 1962 FROM: Sydney P. Wheelock SUBJECT: Call on the President 1. On Tuesday, January 23, Mr. Diamond and I called on President Betancourt. Dr. Perez Guerrero acted as interpreter. 2. We began by conveying Mr. Black's warmest good wishes to the President. All of us in the Bank were glad to have made our first loan to Venezuela a month ago, and we hoped it was the beginning of a long and fruitful collaboration. We were prepared to continue lending so long as there were good projects and so long as we continued to have confidence in the prospects of the Venezuelan economy and in its management - a confidence which we had developed in the several years of the President's administration. As Mr. Black had promised, we had had people in the country, studying possible projects in the fields of power, roads and irrigation, and we wanted to inform the President of where we stood on these, but first we wanted to make some more general observations. The President said he would welcome our views. 3. Mr. Diamond said first that while we fully appreciated the important and substantial economic and financial improvements that had taken place, there were still several matters that seriously concerned us, a, First was Venezuela's fiscal effort, and whether it was adequate to support the very large investment program which the government was undertaking. The President replied that efforts were being made both to reduce expenditures and to increase revenues. Reductions had been effected in Civil Service salaries (his own salary had been cut by 38%). Expenses in the Department of Foreign Affairs had been reduced by 22%, and a general tightening up on expenditures had occurred throughout the whle civil service. On the revenues side, increases had been made in the gasoline tax and in the inheritance tax, and income taxes had been approved in Congress on the condition that they apply to the oil companies as well. This Congressional provision he had not put into effect, as he believed that the oil companies were already being taxes enough. He would try again at the coming session of Congress to get a general income tax increase which would not, however, apply to the oil companies. b. The second matter of concern was the foreign exchange position. Mr. Diamond referred to the tentative foreign exchange budget for the coming year, recently prepared in the Central Bank, which indicated that serious losses of reserves might occur this year unless effective action were taken. We reminded him that Mr. Black had spoken of this problem during his visit in April. It was true then, and was still true, that Venezuela's credit abroad, with private as well as with public lending institutions, depended in a significant degree on their willingness to work out with the IMF a program for dealing effectively with the problem. The President said that he had never thought that the present exchange controls would be a permanent feature of the Venezuelan economy. They -. 2 .- could, in fact, be regarded as a long step toward the establishment of a unified exchange rate at the level consistent with the true international value of the bolivar. However, this was a matter of national pride, and it was necessary to proceed with caution. His objective was a unified rate, but the Capir party was opposed to a devaluation, and he could not move until his friends in Congress, and "in the streets" would support him. Relations with IMF were "cordial" and he thought they understood his position. He would continue to seek their advice and assistance. c. The third matter of concern was the question of creating an investment climate of confidence. This had been stressed in the report of the General Survey Mission, and Mr. Black had particularly drawn his attention to this section of the report in transmitting a copy of it to him some nine months ago. Since we had been here, we had heard this problem stressed by people in both the public and the private sectors. The President doubted that there was much lack of confidence amongst "responsible capitalists ". The action of the World Bank in making a loan had demonstrated confidence. Venezuela was no Cuba. It was as stable as Colombia or Argentina. He was not disturbed by the action of a few extremists in the streets. People reading headlines in the United States press tonight would be surprised to see him sitting calmly discussing economic problems with representatives of the World Bank. There had been $ million of new investment in the Caracas area alone during the past year, and it was going on also in all parts of the country. We said that a Bank economic mission would be here, in early March, for a more thorough review of the economic position and prospects, and to review the quality of development programming and financial planning. 4. We then turned to the work of the present Bank mission and spoke first of CADAFE. Mr. Diamond said that our staff had examined the proposed projects, and that, subject to final review by the Bank, they appeared to be technically sound. However, our examination had revealed serious defects in the organizatio n and management of CADAFE. Admittedly, it was only three years old, but, as it stood, it did not command the confidence necessary for us to recommend it as a suitable Bank borrower. There were lacking adequate fiscal controls, effective mechanisms for forward planning, and general policy direction; costs were very high and management was faulty. Moreover, we felt the people of Venezuela would be entitled to a return of around 8% on CADAFE's operating assets, and at present the return was a precarious 1%. Mr. Diamond briefly reviewed the arguments for an adequate rate of return, and for bringing order into the operations aild finances of government enterprises and for actions to improve efficiency of operation and management - along the lines discussed during the previous week in other meetings. 5. The President had obviously been well briefed by Perez-Guerrero since our most recent conversations with the latter. He went immediately to the need for national legislation on the subject, in the interest of making Venezuelan public corporations more efficient. He thought the Federal Government should control rate-making in all public utilities through a Board or Commission on a national basis. He was not content that CADAFE should return only 1%, though he thought that perhaps 6% should be sufficient, at least at first. Raising rates to the public was a delicate business, though raising rates to INOS so as to obtain an additional Bs.5 million of revenue should be easy, and raising industrial rates not too difficult. Nor was he content that CADAFE should not be efficient. He wondered if the Bank could assist in finding or recommending consultants to help improve management and accounts. - 3 - 6. We said that we were very pleased that he shared our broad policy views, and that we would be prepared to assist CADAFE in finding suitable personnel or a suitable firm, to assist them in solving their most urgent problems. 7. The President then asked what about Guri. It was, he said, very close to his heart. Mr. Diamond said that we had visited the Guri site and had had a most impressive view of its potentialities. We realized that, because of its size, complexity and implications, it was of the utmost importance for Venezuela's future. It might make an important contribution to growth, or it could be a white elephant. It was vital that the Government have an objective view of the economy of the project, so as to be in a position to make a sound decision. 8. We had this morning spent three hours with Col. Alfonso Ravard and with Harza, his consulting engineers. Their report was almost ready. Col. Alfonso Ravard had instructed them to send their report to the Bank as soon as it was finished - the first volume within a couple of weeks, and the final two at fortnightly intervals thereafter. The Bank would put its best people immediately to work to analyse and comment on the report. It might be necessary to send a technical mission to study the project here. If the project should not be proceeded with, it was important for Venezuela to know it as soon as possible. If it should be, the Bank would be ready to say so; and it would be the first to offer its assistance in financing, either by itself, or possibly in conjunction with others. For the moment, however, our concern was to give the Government good advice. 9. The President expressed his pleasure, and said that he was in complete agreement with the procedure proposed, 10. We then discussed the Industrial Development Bank. We said that the subject had been raised by Vallenilla at the Bank-IFC meeting in Vienna, that since then there had been an exchange of correspondence leading to our visit. Since we had arrived, we had had general discussions with Vallenilla and with his Board, with Perez-Guerrero, with the Minister of Finance, and, at Vallenilla's suggestion, with Dr. Radolfo Rojas, representing the private interests who might expect to be principally concerned. 11. The President recalled that it was during his first Presidency, in 1946, that, on his initiative, the CVF had been established. Since then it had had a chequered career, but it had now reached the point where it was beginning to be of substantial service in the industrial development of the country. It could not do everything, and he was delighted to know that private initiative was now thinking of ways in which CVF's efforts might be supplemented. CVF would not compete with a private investment bank, and would even be willing to provide it with financial assistance. He was glad to know that the lead was being taken on the private side by Dr. Rojas, for whom he had the highest regard, and he personally would do everything within his power to support and encourage such an institution. 12. Mr. Diamond asked if we might quote him on this in talks with officials of the government, and he said we could tell anybody what he had said. 13. By this time we had talked for 75 minutes, and closed by saying that with respect to projects in irrigation and roads, which we had also studied, Dr. Perez Guerrero was fully informed, and could inform the President at his convenience. The President said that Perez-Guerrero was his "right hand". The United Nations had wanted him back, but he, the President, had said no. We parted with the President sending his warmest regards and thanks to Mr. Black. FORM No. 57 IFC INTERNATIONAL FINANCE (8-56) CORPORATION OFF E MEMORANDUM TO: Mr. J. Burke app DATE: January 11, 1962 FROM: Erle Cooke, Jr. - SUBJECT: Possible IBRD Loan to Venezuela Guri Hydro-Electric Project. During the recent President Kennedy visit to Venezuela, evidently the Venezuelan authorities stressed their strong desires to push ahead on a hydro-electric development in the upper Caroni area through the construction of a multi-purpose dam known as the Guri Dam project. The Venezuelans have indicated that they have made a preliminary approach to the IBRD for a loan. Are there any reactions that might be passed on to the Venezuelan Government? Is the Bank planning to take any leadership in financing the Guri Dam project? 17 TO: C. Finne and P. Jacob DATE: January 3, 1962 FROM: M. Piccagli SUBJECT: Terms- of Reference - Venezuela You will leave Washington on or about January 4, 1962 for Venezuela to carry out an appraisal of the power projects presented by CADAFE as a basis for a possible Bank loan. These projects include the Macagua-Sta. Theresa 220 kv transmission line, the Guanta II thermal plant and the Los 1iorochas and Pto. Fijo gas turbine plants. During the appraisal you will pay particular attention to the following points: 1. The operational and economic justification of the proposed facilities. 2. The detailed cost estimates of the projects proposed for Bank financing. 3. The arrangements made for consulting engineering service in particular for the construction of the transmission line. 4. The total investment program of CADAFE over the next 5-6 years and the sources of funds available to finance this expansion (a longer period would not be realistic because of the uncertain timing of the possible construction of the Guri plant). 5. The financial position of CADAFE and the actions required to improve the present low return on investment. In conjunction with Messrs. Diamond and Wheelock, you will discuss with appropriate officials the ways in which the Bank can be help- ful in the planning for, and evaluation of the Guri project. Upon your return you will submit a brief summary of your findings to be followed by a comprehensive appraisal report. cc: Messrs. Aldewereld Squire (3) Diamond Wheelock Jacob Miss Van Gasse (2) Operational Files (4) Division Files (3) s Public Utilities Division Piles AUgmst 11, 1961 Nell Bass jxnandain of Power Failities in VAneauela As a ccnaequene of an appelntmt arranged kv NO. Ed. Fusik of the Harsa fngtnwering CoipamW In Chage, tepremtatives of Harsa (Maere. Sornse* Bitoun and Irwokoem) met witni rprentatis of the Bank (eauers. Plooagli. Finme, Sad.w. and Bass) to discuss the progress of their studies of the Carou4 River Development in Venezuela. The NRusa representatives reviewed the progress of the work to date and their projected sohedule which would be carried out by a part of the uisgion meeting with the Dank. Particular ampbasis we given in the dis- cussion to the teobidques to be used in making an onesm.ei evaluation of the justification ftr earrying out the large hydreleetrio developmnt as againt thermal generating facilities. At the conclusion of the visit the Rara group left with the Bank the engineering reports listed below% 1. Project Plamniag Report - Caroni River HydrOeSeOtric Development. Needa Projet, masagua me. 2 Project, VOLu Is Coaprasion VYesolana de Foento Comision de Estudios SeUtrifiacion del Caroni, Caracas. Venesuela March 1960. 2. Projeet Planning Report Caront River 4droel..tric Develosment, Necuima Project, Managua No. 2 Project* volme U. Appendies March 1960. 3. Smmary latter; Reportg Appendices A - KI Detailed Table of Contents - tngineering / CaMpany, 1arna Chicage. Z docs*a 2-. - p1-- n port, Caroni River Rennng Rrearic Dreiesment, ~ *. p nta Planning Ueport, Caroni River Fdroeloatrie Development, Mauagus Project SpilbsAy. April 1960. 6. Supplemental Planning Report Me. a, Caron ier ydrmitris Development, \eouima Project, 3pyAw Studies, ot r o 9be . 7. Suppleental Planning Report No. 3, Caroni River Iydroeletric Development, Secuima Project Stage Development. January 1961. c Messrs. n7mm, Sadeve, Mira Operational Files v Vz June 7, 1961 Dear Iv=, Thank you very mauh for your letter af June 2p enmlosing an evaluation of the electric projects for the Central, Eastern and Guayana distriats of Venezuela with inf omation relating to the soonamia justification of these proets. This material has been transmitted to our Department of Technical Operations where it will be reviewed by Mr. hristian Finn. in preparation for his fortheoming visit to Venezuela. I have today written to Dr. Peres Guerrero eeneerning this visit, and I enclose a oopy of my letter to him for your informatioU. With best ishes, Sinerely yours, Inc. Sidney p. Wheelock Xr. Ivan A. Senior, Commiaado del Linistro de Hacienda, Oficina del Gioisionado del Hacienda, Ministerie 4. Hacienda, Caras$, VEsZUKeA. jun. 7, 196i My d.aw 1.0., Is .AW*de with the 1u4.wstandia between us resebed duriog Mr. MAck's vIAt to Teassesla and yvar subsequent visit to Us lank# I on pleased to infors yvA that the first t the teodioal oxpwb prmised have now de ano ngdmsto te visit Owasss. Mr. Obristian Pinne, a eleetrial Onginears a Mr. Peter J*Aab, finwaial A3yst, of the Dpa -t of Teo toa2. OpuSatias, viMl aIrVI* in Carfoas ab.ut JUw 17 to speW appl 1mt.3y twe weeks VItA yu COAMr and others to rwv*" Vw tehteasl infonatiam seuil- able on the pwear generating and 41staIbutig projeats inaluded in the foerwyer pVaa. T? will then to an to Pam and Chile to attend to other mattes, and return to Vemsea4a ms or about JW3r 17, at whiMh tim I hope I wan Join thia there for ffrther woo rsatiofh. As soon as .zawt dates and paane tin.. are knm I shall inform you, b sable. With reWpt to the apexrts on reads and agricultur, I shall wite you again as a fastm amiteente s be With best egrVOe, ftwserely Yomr, Sidmqy P. Whe1ook Dr. Nmamul Forea leiWW% Oft m do U A 400 Cleared with Messrs. O.A. Schmidt PIA~dG 0s W. Diamond Copies to: Mr. 0. Finns Mr, Ivan A. Senior Sl~iheqlooksIjk Aputlllh 194& Dear Awly' I unwterIM ysa alz'esy he #te latter dat" ApF'L 14 Ok addrwssed br TOD to er. eannisee Aspure.a The status of No higar projet Is isadated ia this Utter and I tnst that yes will tahe whatever isps yeW s0wid' 2n01sy to Met thin peis" Wvi". I an .n3psias for yewr imfnwmatioa a pepr giWiag TCto p'4Iadig vIews m the NIeeMINK ulroeestria Pjes. Tis PapsrWWM vPWe prspmwe6 tiy mm er aasnt one BarS Bagswiao the g basis @f the wepwet of~av Mhebyw S" pperaEd %7 Wo Ex aM* on"pW# WhIsk YOR ba$ brought bk wih 7w boa Y7w lust visit to Ve-sms , d the repi prepered %W gleteteit.i do reasue. Tou uill ntio that t power demand does not justi4f a pmJi* ot this else, end tat te east of indIad iriustsaes to pwrId the required marett fer Ne powr w lA be extrmIn lare. I bps you have a plesant t*ip mid I leek forwawd to sein you who you ge bank. Blmee2e )'WR5, ammaw. Dspsrtmsmt Of Opsratsem wimsters e rir. Gerald Alter fetel Avila This letter is to be delivered by hand by Mr, Black. Nr. A, D. SpMetAd April 1, 1961 1. a. Sheehan Pre aMry ro stInformaticmi Necui=a(ui yr lcrePo~e Cdai. River - Veneasao The baste data on this proeet was obtained from an advanee oopy of a planning repert for the project prepared by the arasa nginaeering CompoW in Jammwy of this year and from the Plan Nasional de ilectrifontion prepared by Ileetrisite do Frame. in 1940. Decriptiea of the Prejeot Neosuia formerly "no1.d Ouri, would be the *oo*ad otep is the devolop- ment of the 6&;. River. The Caront liver, the second largest in the S a ,flowes nrtbeard through the southern part at Veassuela and empiUes into Ri Orinoco, heat 70 km upstream ef the Qrinseo delta. The drain- age of the Caret is 96,000 kg and the mean annual flow is aheet i Wl/. The -astam- and niitdmi recorded flows are 17,000 a3 /e and 3/ re/peetely. The Neculua damalto is about 80 km above the sea- floo"w with the Orinso. The Xaagwa prjeet, the first step in the Caroni deveqp0nt, is lected U km ahve the eetfloense. It is essotally a run-of-river plant with an installed sapesity of 300 av and was soheduled for ceipletis in 190. The constrauetin ot the Noenia. dam will provide almst eosplote regulation of the Carant flew thereby permitting additional oapaeity to be installed at Mmeogna. The available head and flew at the Mesmina site if fully utIlised could Justify Me installation ot se five million kilowatts and would in fast make it the largest power station in the mid. The peaiery pUsM prepare* by Hara provide for stage 0miatratim of the project. The initial dam wuld have a height of about 60 meters and e.nd be raised in two steps to about 100 uter. The generating uits would be installed in four separate pewer houses. The first power house, with provision for eight ultae, would be built with t~e first stage of the dam. The raising of the dam and the eomtrution of the additianal power houses would be dens as required to meet he lad wt. grI* The dam is propeeed as a conerete gravity struture with a chate sp111- way and vith aeaveatinal power houses itat1y deumstreaa of the dom. Suffieent survoys and sub-surface expleratio have bee performed to enable preparatisa of reasonable quanUity estmates and preitlinary cost estimates. Veweer, mash additional data as well as hydraulic model studies would be required before a final design could be made. To: M b . D. Spotewod - 2 - Apiil i, 19U6 The Iits propeeed by Sares ftr the inital installaoton would be 1O m 60 esyle gamowatevs driven by Francis trnes. If tic dam is raised the generaters ouaAd be replaced by unit* of larger sapaoity. The embedded parts of the tuwbtins could be retained but it would be necessary to roplase the rnamers. Por the later iustallatims, after raising the das, Uarger sis umits would be provided. The oopaalty to be installed initially would be datermimed by trh simS of the lead to be served but the haigh cost of the dam would require that, "s a "A-- at least foir units be provided in order to keep te unit Cost per he wthin the realm of przatlality. iwever., even with this espasity, the sale of the eoergy from the wnits opirating atiims2 weuld eaver only about half of the fixed rbarges on the total investment. Th. ultiMate espoeity which oculd be installed would depend upon te final height of the dm, the avount or thermal capacity in the inter- sun0eoted sYutm, and he Syvton load factor. Assumin trt the dan was raised so as to prside an average Lross noad of a, -t 100 meter5, that the intercetmeoted system had at least one million kw ui terral capeaity, and that the system lead faster was 57% (all these eaumptions ware used by UW), a ALnm at 5 million he of adre espeity sould be justifiably imstalle. This is in eose agreement vith the planning by Marsa to provide for te ultimate imstallation of 36 units of about 150 jor each. Cost of the frejest The larsa study presents coet estimates of t.e project for various initial heights of don and for various sao ations of units. besed upe the minimus height of den at Um*v. 220 (about 60 meters of head) den east =eluding interest during eonstrestioen is 479(20)6] or 2A1J& 0)*M. ith a minim of four units and allowing an arbitrary 10 for in trest daring mestretton, the total cost would be 685(10) 6Ds or 205(l0)o s. The unit est weold therefore be 366/k. For a a -1-3e installation but vith 4-140 owr its EDV estimated a cost of 27(0)217(10)6u. This unit cost is 6 0 which is a fairly good check. The nais, installatioan for whish the 1a1sa report presents figures is ter the dam Ith top elevation at 240 wnd with 24 units (assumed , 140 - eash fu a tUsa. of 3,30 Mu). The Coat is estimated to be 1,552(lo)6ft or 338$/hW. The naxism imstallatm, for which figures are given in the AM report is for a Ain at 4ew. 260 and with 28 units totaling 6,200 x. This total Cest is 2,31W (lO)belr fs/k. The Osot per ka for the Mnoisam installation an either of these bases is of the same erder of magnitude s the OWestruotQm 4et Of thermal Ospesity. VRen if high cst tromeisolmon line. are required to abeerb part of the plant eutpat it should be easy to o.oeamaly Js100 the ultimate project. Mvket Forecasts The HMes report used an estimate of grwth of the normal load Wiaih was supplied by the CoNiiO de Estudios MIeetritisasino del Caroni (CMG) and oombimed this with various assumptiouss of demand from large new industrial plants near the projeet. Too Wir. A. D. SpeMMoed - 3 -- AWLI i , 1961 Asiemun 16. 1 considerod that there would be no large new indutWal leds. The estimate of peak lad for the eGslms sstU .ws "sOMdtO be h28 MW in 19% vow"ing to 892 me Is 17%, equivalent to a 7.5% rate. Aeswptans las. 2, 3, wtd 4 used the same rate of &rwtJ fAr the normal leads but also Veed up new industial loads Startinj in 1968 whib Srw respectively to 500 me, 1,000 wo and 2,000 aw in 1985. the oSerall rates of pW*h for these eases, froe 168 to 1965, were S.1%, S.A%, and 9.3%. The e study essmad that all of the 60 eyb statioas of the Cetral and Oriental sonea would be i"teroenaested by 16. At that time the system peak load weeld be 820 =e and would then grow at sam* annual rate between 7 aL 11$. LEonemAi Jisfat1ea"n Bth of the eenultamts prepared esomeldo analyses at the projeet in Ma same geasral manner. The vxit east of the hydrv energy frm Neouine was *oftod for a large awobr of easbinatios of installed capacity and for varises heights of the dam. This eost was ten ecmared with the east of an oquvalast am t of tksermally generated energy. Nother of the studies presented a eomparison of the aeses of alternative mans of geners- tion based opon a present wortd method whieh vaid teko into aeoint the fast that Investmente in thermal capaeity would be spread mat over a nmmbr of years. In effeat, neither of the studies traly justified the eostrus.- Ue of the preject. What thay did sho was that for any initial installa- tien of loss than about 500 me (oven if little or ao tranosisien cast is isurred) the e~st of geoujas enrgy would be ter than thermall esly for an inital installation of about 1,000 cost of Weeiaa energy be l2a~r. The methods used by both at the ecasultants to determine th east of generation iwalmed so many Lfferent aemaptions as to system demnd, the aaownt of interfcamected espeity the lead faster, type of operation of the prjet i.e. base lead, peak L , .t. that a diseot ecaparisem between result. is not possible. Sesrer, the er report does show that after abet 1,000 or is installed te aveorae oest of energy from Neovima would be (2.8 mill US) as eompared to a thermal cost of 2.4% eentiams aentino a.95 (5.0 mills Q). This east ci emrgy ceulde aseivably be lee enough to attract power intensive ladost6r. -lsoom litie of Startig the jeoJ.et The immediate PeOrequisito to onsing devlopmt of Nosu"ia is the positive asourense of a 6onand in he order of magnitude of 1,000 o. This demnd euld *em. frem a easbinatin of either nermal lead growth pus large new industrIal loads or from mew industrial leading alone. The normal sIMresse in load of te Central and OrIemta systms which *euld be met by Meims, over may a five year period would be at most about 400 aw. A major drawboek to this arran voonnt is the fhot that the p'ivately Owned systeus in Careoss are 50 spele and a large erpense wald-be entailed Tot W. A. D.S 0' 4 Apr 11 I61 In esemwmrUg these systsam to 60 syue opeiamtL. Abw, the oet of a ternasioni 11m3 to Cmsamo, nme 400 ka baga would be an additimoal Imp0 am~en"*. Even witb the normal lead Prawtiuh, b.w~, it wii still be neoissaoy to pik ap a large nuw block of daMd in the naighborh.ad of 50 w. ThIs mthot be provided by an alumiu piast uith a capAity of Sme 320,000 tame a steel mill at least twiao the Sise of tna nv plant at Matnas, large now Votao-bateal industrias or som, sambination of all of ths. RHBmmb 00 1 YWSsrO. kerM4mt \AE.esa ) !ijr.' (.41M Apra Us 196- A, . i pattoe"n ka reqtodi, tjlwo Lsa~ebdae i lad (;ju2i) ftojeft in lomO utd hch ovld be e"e to WWr14 r. Mtask an this projee6 duariji his forthoomdft VIA*% to 3ooft ANserUao * 0 __ - MCUIMA HrBOgLOTRIC PROJECT - VNEZU]LA Both the erea ingineering COMpany and SletniCLte 4. France have investigated the project. The inforaatien given below about the technical features of the project was obtained primis4ry frm the pVlmAR.g report prepared by the ama hgineering Company, dated January 1961. The eauimna Project, which was formrly called Gu is located an the Caroni River, about 100 kilmters above its oonfluence with the Orinoco River in the eastern part of Ten suel. The Orinoco River has a channal which an be navigated by ocean-going vessels as far as the Caroni River. This ohmnnml, which is 34 fet deep, was constructed to facilitate the shipoent of Iran ore frou large deposits located further inland. As envisaged by Barsa, the project would be constructed in steps. In the first stage the dan would be constructed to a he h of about 60 moters. With siU units of 110 magwatt each installed 8.0 M) in the powerhouse 1 the cost of the project is estimated to be about $220 million. The cost per kiloatt installed would be $260. The ultimate cepacity of the project with the stream flow available is estimated to be about 5,000 M. If the project should be constructed to this capacity it would be the largest generating statics. in the world. for the ultimate stage the height of the dn would be increased to about 100 meters. With 5,000 1W installed, the total cost is estimated to be $600 million. Te unit cost for this Installation would be about $120 per kv. These costs are exalusive of the tranuis sion lines which would be required to carry the energy to load centers. At the present time there is no market for such large blocks of power as could be made available fron the Seouma project. In Caracas the peak load at present is under 300 NWt. This load is served by thermal stations generating at 50 oyoles, the total capacity of which is 350 MW these static.. are privately oened. Outside of Caracas there is at present rw large interoonneoted system. The Government is planning to construct necessary transmission lines to interconnect a number of cities in the so-called Central Zumn Into a system operating at 60 sqyles. To this and the Government has constructed a nuber of thermal stations which generts at 60 crules. At the present time these stations are not fully leadedo De peak load of this interconnected system, w1ien comanetedg would be in the order of 250 M by 1965. To connect Caracas with the Central Zone system would require either very expensive frequeney changers or the conversion of motors and other facilities in Caracas frea 50 to 60 cycles. The letter is estimated to cost $30 millien. Caracas in about 600 kilometers from the project and the connection with the Central Zone would be about 400 kiloeeters from the project. It would not be egonanical or in the best interests of the country to abandon or put into stand-by all existing thermal capacity of Caracas and the Central Zone merely to provide a load for the project. The load which might be eeunom*cally suppaied by the project, however, would be the increase in demand in the Central Zone system and Caracas it it should be COUVmrt. to 60 474", this lA, boewor, at bet wOUld mont t1 350-500 M by the Um. the pftjewt e004A be mpOatMV it eostrstief wexw to start iinmeately. With this dManUd, e oust of 4*otaisli frM vhW wojeot wold be in exeess of that whiok eould be supplied ra medern theral plaUnt. The pseweqaite therogfe for the 11-1011 of onstaotie~a of the proJest shomid be an assured domand in tv order of $501,0000 . Siae the damad frat existing lead eaters might be 350500 31r industries requiring sheat 500 NW ot paver would bave to be uoistrusted to asmsua the meesswry Uadf. Smai a load might be prvid*d by an alanmin plant with a empsei of 220#000 toew per year, or a stool mii tvies the eise et the plant at Yatemams, or a largp petweP-Obmiesl iWOet, Or IM 01m astim of thw.. As an indimotion of prwobebe aimeostot sosts at tis type of L0u*stry, an a1QMiUQK m001"g plaNt whish wOld requid about 500 31 of pomer would oest in Urn gM -ber f W50 m1uli.- The total invesmt whibeh would have to be mad., heefrm, to Justil *. firs t tage at the projost wold be WO Amilli for tm prejeet, a traumisaiss line fram the projeet to the contral zone whisk might east la the order of 440-5O0 =W1mf, equipmont oonversin Ia cares $30 mmiue#, pima eostru en or pover-intnsive indesmey whisk would oust m addioel $150 &U31Imm. beause of the large esPital ost of the don (ppdasuntely 00 milie) it would be aoessmty to install at ast six mite in te poserbeuse in order to protaoe orw at a est of about 3 ille per kh. This rats weld be reqired to attraet large pwer-imtmesiw industries to leaste mzr te sits. At present it is not kam whether ow large *alumlau oempaw or ether oampaies have indiested their will- ingas to sommider snstrelemn of a lrge pleant ar the geulma pmj*st. fatl saseh ssearanees ae obtaLed4 It would net be vory PVaWt her TOeWSea to start *OnastrutStM of Me pwJ"eet4 Apri ISO 19l VE - g*A, UA& Mr. A.D. Spottsuoed March 23, 1961 HaaXWn Mir"a yonesuela - Caroni &VeI Hydroeletrio DovelopUent Mr. Gerald Alter has reoently returned frmn Vonesuela and has brought with him the attashed deament for the Caroal River Hydroelectrie Project. This report by the Harsa Engineering Company International deals with the Neoina Projeet Stage Development (previously identified as Ouri projeet). I understand that a report by Electrioite de Franoe has already been forwarded by Mr. Wheelock to you in which the demand forecast underlying this project was made. I would appreciate it if you would have the report by the Hasa Engineoring Company International and the supporting demand forecast on the Neowima Projeet Stage Developmat reviswed, so that the Bank'a comments may be sent informally to Col. Rafael Alfonse Ravard, President of the newly created Suayaaa Corporatie. I also understand that you already have a series of maps and charts on the Caroni Project. For your further information there are available in Researoh Files the following doonmentas (a) Report on the Caroni River Development by Willia J. Hayes, dated September 1957, and (b) Informalen referente al preeto Caroni, Abril do 1956. A prellfinaz7 appraisal of the project prepared by Mrj Robert Sadove of T.O.D. is seontained in the Bsnk'u Survey Mission Report, Chapter 2. '34. TH~irua :vjh FOR(5-48) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OFFICE MEMORANDUM TO: FIIES DATE: October 13, 1958 FROM: Gerald Alter ' SUBJECT: Documents on Caroni Project in Venezuela 1. The following documents on the Caroni project were obtained by the recent mission to Venezuela: (i) Series of maps and charts (sent to TOD) (ii) Report on the Caroni River Development by William J. Hayes dated September 1957 (8unt to Rose weft rU.) (iii) Informacion referente al proyesto Caroni, Abril de 1956 Csent to Reescroh File, . Ue ?- _ro ,1 2. The report by W.J. Hayes of UNTAA may be of some interest to the proposed survey mission. Chapter II, 'The Power Facilities Planning Problem*, and Chapter III, 'The Power Utilization Problem*, are of particular interest. 3. Note estimate of 3.84 mills per KWH for cost of power in a developed Caroni system - total installation of 4,"O MW and firm capacity of 3,050 MW. This figure assumes a 6% return on invest- ment (page 11-3). c.c. Messrs. Spottswood and Mason GAiter/ab T min: .ptE 1*t C 14evms .. of gmtd ! of ' Sm u ~ k ' 41 .T. c 1kI toi. v mae bw nt tri, e t- "' ele, lesn nd: pomt tu, aft; %-, V-* Ltem-t vecimn m'd V104ttd bo" tho 2.wi aa-mL A. - -ch5 :imjNW% "r the vUWel pill vhseh ; I$ teimtr krdrn-*lemtvie 1ddheLolt VOORA7. " a Wvre arI ucum ,1 thuis trp 1W p==mmeto . feel AI ftwo .,awrd who to the '"Wident of the Covv .cn do *iento. * Is Ak -"eWi4AU of r.j* .T. astd hio mvn In OhArm tt thy k:,dr--e1Octric mre- jWct (of t not LO'-e tSO Ill). '!S Uimw ,t A!! W y fa-poably, 3.T, pam% now awliv. Orwvlotln to V flmt Ottaie Ln de"-ft thig e b"r-91041&i potentaW Nn th acan Ie *q -ar the -CMin *an It ja A t J ce. T s Tqgt v im l 'S 1* v- U.t f-3 O&P04ty Ofv4W at GWnm%14g 3 Mov. of ftwwr 5 r0 thm warQt veItbe ditism (Vtm $be rimmo if hivh), ht t de0 do- Welft ae ftalgned for Wh tsq4 t1'A -? ? ra Yme U thc r1 f th* rlJW ka, bewn re*O^Wd at 1), A "ve" O *v fe( f-Ir diw vnosion x% Ulm patit In -ragmapb 5). rho firot vtae Is r mae-t- 'Nor BOOMM W, th nWMsf,* hMM of' IS ,At* a" a e b u64 iis fiomd) 3e 35 eou . nA vpinis" is **pau or 4nadtx Vp 41,00 4Cste MfftdW -4M VW-,T,. 3. 'rum Um "ly t 4ug1 I cen1&uW 1 u1i . NN" Oft Ifl rlv. mit &AISateeS hem A17 we p* v. blnew dealzneM so %th -ift Ate alroW.y 1notallod, %?- pec,"M is *-4 setdad Lhm VhiX4 411t mil IM Od tho Ung Whom tho c-f-1rdav U veg*d emm tie tem* wok Pirst O t I .smv ba tho WA of 19eew tho e us"Utmd % y Jily V"9. 'ms for the frt fl sxtj 4.1toewr Oproned Om hwawt li, 'brd thay ore *v-*etod to be insua Ied brr *M O90 f 00 *4%desse "v**fted go far the ge804Wer WW 0 pvred byA... GbF sa) Obrlk ("Wt*rjMRd), C1 Fat4tO fsy) tj lnd the 6_8 ha"e boon Str ftlamNlcrs and on the *ett*e fnatalaettees, '-Onnmo md immen. Mr. -Waft at the VIeSOKito dea* Lm (bal f arverlYr wth J.r,. vate hao 02Ms bashft ca"Ited ton amn vrmW al he ~ ~ ~ ~ ~ ~ ~~~JJ th ate efve 0 ~.ne e WnteS" 4d9jj veW% tU be abmet 1% 44LI'a t-Oliv&W (OatdVaiset fA* * ''t X"0 mIJ 10) WitOY* ne- dn intenost *4rtn- eew-mtM .rh, T et Dt of "ame US f1M A * mdd stt to *11.1 tv Ums tm 22 t tI i o ,*vjWW* I% am"te 30 at I I or )UM bme I aid oAs ;es "torssd a"d to rim **d "Oft W% fet* ls a Of rOct btetr purMtnW 044 a MVe b$NUe f 09 %ttb02001"ele of saDifes "*%Oft agse durlw it notractionj run paYvent I&A ird with &1 VV &t ie aftW V41 he" pated fOr -w mar'. "A *tatd r o. at -.-,c rodtwum at as e the C2 l t 1AW (347 a*w. I naullod) is '10 Uen 3 013AV 0U.3.) PW h.v. - ,s"Lm a ru Ot t"' IL thereeat W10- far -1&0"s Or-Ahj# *' %&Jaf $,MW houW 5., Ao e b@Wl jndrtj*d in t"O fMord*jfe tame firt etefp J$ a ru-efme~rv panat depirrmpd to ope t %e he XasL"a fajM4"%4 11*2w of the Carri.. & Me "sa nd iptasp -.. ardsinr t--,o Zr at * e .a . is that 04' vW4lttt tM Mm c te r-si, but 1A doing 06o Sm "sPWtY nr Vhe N-409% to Vilcamm= W 3,3'.,- --.e. (to )60 Q w. __wuiso t% nrt st&SW), Abemt 7 1 frwn Uw sit* of vhA ftrot stage, Owe rlvw eafw %*"o* is a er *ova% av fs m heam "=*VA& &u- sltes *me =Wr vw-t 7,r%11Mm vtoly. ; dam at am fe Wme iU*1d r .d a s *vosr Qr 1torIfn 75 eft )djqsbtWW (**WWt tiet th& 60 I thw r..) e tbo bowl* or j1f.v, r roomdl, the hsd 0now ee th* L*M4 JA 17,1,0i G*Sau - , a _ ad vW rgat" - ___%-" f-AW VOQU to )"t MWg tOed US rer.se bd. Th hmd at t" Fit& of %he 00 %v%14 b SIa UA ees. ?he Aat W" l be to 1Wftl 3wxr "s,. tO g asumdty tM, md, Ui he now or (b tmmlell" $A 00 aelil, 1 rs *1r"Sdy "IOt athe ,"trot rI,. wory w4;h dwt4mmts 4O m vt - bulldlnt the d neaded rem the ) ra U#Wo U ) 'AA'Air. es (AbU+-ePd &at %hat te beA (e tnaftby b UPW%-n MW),I~2Va t* - -nsm OU -eu "d navfli~tnblv ~ifl90 ~ al K" M atdo ,shed ___ t_ pead-blu to mvrido emramiwaly afAW Vhrval mp UFe to k 00 U" Ofteft b.s Y0sMo krw. W Vya ascomA os"g 6.v944 be umdertmknse. Ine--.na e bInth diret T Oamllaer SWr I "Jj* heIs tht t e VWspes Vjdje 0-t miar qVIO 0 the tiond #14 bis )Qgt Mr Me f "n 1 g-mg Istunm (. vf th p a". aft olng t,1 n on a ppolu that go omW #Up g m he semvs$ alny f*lhilo for samo Mms to am*e QOMe SaMM laOge esApniW OMW"40=*g UarM saMeotM of OW41gy v"Ws is)demod to UOgSA OPWOU&iNO In the ragan , fuct, thepw cipal 41MfwAVt vith 4men ** firmt mtp vil 'be the chwrecte of Ww msedWeq ad to ram-I4vw "ararxoha af this rawam-adq" v111 ba *WOUWe "a Qd0 palinto TO go* Wndseolnd thst 0* 1d4" nr M at S O n11 ste inb the "SUNei to ume Cw"ned pwAr s flrvt d% 20-46d by a r",p jr -riveto laeams bIAssmtn who remparod a -rejftt for a offidl stmel vdjj (Ifbedt Wj5, tavo a yowr beade . elmetrla fweeeaa) able% thWr ""r reasgevd to finhow, oWn ad >Testa. lihm the praoct ~en to as atleation of usPae Jimw--m fmuantpe6 ta fO~mmmmat docid to tke oer te pmjeat 0d h*k4 ft a rvgaWAerset WOMW stool FAIIt ThO Prq0+@Ct W8e Onlrted PWvMrO tiAWK ILnO It &WgaegArL y Qf, *Qdod Ust " sIW t feel its v y a3 ad 7ubmy *&Mgt ce oeestd pofitblywithst tth ~ vvjly rFn dewr, thae twvompu so"t and lpousibly !Akvjs 4ddit l IreesqmtMet t- jr!- L'- it%* tolea". TtA steel IU V1 3 1 1 PeLe 6n40tria !rmw.400 (ar hic 41ht w 9 wlklZT At WnS), 160, Of WhICh Wil t ;OtQ 41AM r-'AMA4 -e (IA Vt a d 4 a1t himp .OX t~w -, *%Ma, :to wi- be Wys1t 1T,be -. R- a. As Uia bulAMMs of tho tel will vill Uakw vwry lUtAe poamr. :1* st OM1 has a hi'Llet Nd& with a O&MW ty of 12- D* tofne A a sol urtr msamimps pipe t e prtare from 2* to af 3)x " M, - ves G yvar. keyA1,F the PA4 v1 to rotd* for ditla.1 __ dotals wbeA %hewtowl vd11 ae bodrw cbeined I., 11ameri. ".;, e&M sn M 11f 8 =i LtW in a ewpmt o nowte. 440 ,thw staej -A (a* rrnalmaoad In tho movtrkty sijid by tb* V4M4 .1fir4n . "WerMWMe W411 C"As ut' 4 i oN Alvame. Vt1:r wr=t rrA--V-r*1 was Vre&dy tiw. wsr*, and thp *u: , 0 l) w irrev*Qb2y r- ted f .4. tllg Di ned " a1 of edy rk! T rV-,Sg P0 4% be WO-Na4 i, tie -) ,aveafsoos i has no alterAtive bQA L,; pwrit the ~ t L r the sA ,i Fes t ne instald anl VT; " so wtat mn be eir bet 3. A"i frm, the wtookl ;14 hricayd at for The Cre ).eets wftteb tj taIe ab-at , ain c-, L nv - ft M- V Ito at tha p"J4t0" In n f sld CSad 1tP a" thwe to an exlettig V itw. trarowtinv :U) freao I! 'I I!n to .AturIU a sd eri*At*. Tho %1t ' 4rtn 1A Cris eld amelanv .1, thesO t) or- &Nt 3Ii -1%fotom rrm the *A%% of ve priject oovd 'taeri are a twt -bar or oil "WAl tawoe lyic, In Nywovin. Ar~ r -?Syes eticmted tha6ty b , IQhP witire rftio tcvat bearwy tos v")(-, stoma ^1.11) -- w mweide to % ulzad dof Th $- 5,S x~v. aim baumkias4tr 9. J3 *10 "leit Ama vopftwndw, It AY to polnted out that h Ver07 JiMOMe Cc-var pkn oil- Iatan orvntr;ct1&m er a ptooeie rp %Aat" WIUh cwl t Abut 71 ftillton r-ies.Fr rww,*n div s on liw o ww 4plWtit 8%M "te out In the Cftewd rm-gIftn, Vt VV0 UMatd vWet of Carsaws raor rtn L,*tpljo. liam t)Ar 500 rd 1 11Je b&UVMMe beft SjVW4JW togn Warqott. Thm 1AS sri IIon balive rq eded fto Tt 0h0 73At In a pKIN: tilln tp orto "0e &%VON* 1im"d inf Vh *oeo how** 04 00s 460"reld I ebs vitt 14wvtt., 11avy/Altor Nr. Orvis A. Sclmidt August 8, 1958 Oerald Alter U.N. tewhn4ca assimteace to V!MeMIAM J. Ae economic panning field 1. We have just learned that the VenesAelan Government has requested, and the U.N. Technical Assistance Administration has agreed to provide, technical assistance in the economic planning field to the Venezuelan Government. 2. The request was made on June 16, 1958. It involves the assignment of a general planing economist to advise the Government in the formu- lation of economic policy, and the assignment of an expert on regional development to advise the Government on the techno-economic aspects and the regional development aspects of the Caroni River Basin program. There is attached the information obtained from the ?.A.B. on the terms of reference of these experts. The project description envisages a minimum of one year for each of these experts beginning about Septem- ber 1, 19$8. 3. Upon being informed of these developments, Mr. Demuth called Mr. Myer Cohen of the T eohnieal Assistance Adinistration and was told that the U.N. is now actively recruiting the experts. Mr. Demuth told Mr. Cohen that a Bsnk mission was going to Venemusla next week partly because we understood the Venezuelan Government was interested in obtaining acme technical assistance from the Bazk--covering a similar field to the one involved in the request to the TAA.-and that upon the return of the mission we would get in touch with te U.N. c.c. Messrs. Demuth, Mason ter/ab Term c( Reference - Regiomal Developmat lfpe't Program of vork in 29581 The first expert in to advise the Government on tochno-cnomic aspects and on the regional development plans of the Caroni River Basin and to this ends I.) examine and evaluate the current studies and plane concerning the development of the Caroni River Bain, as #tel as the existing natural resources and economic possibilities; ii) advise on the setting up of an organisation to plan the oconamia development of the aforementioned region iii) assist in the preparation of a regional economic development plan includings utilization of power, mineral resourzee, agrieulture, livestock, industrial development, transport, physical planning and other social overhead investments. Terms of Reference - Planning Iconomist Program of work in 29561 The planning economist is to advise the Govwrm.nt in the formulation at an economic policy, and to this ends 1) analye the possibilities of economic development af the country in general and of certain of its more important regional 11) fomunlate plans for economic development; iii) advise concerning vays and means of implementation of the aforementioned plans; iv) study and prepare economic development plans at the level of various neaten1 of the economy especially industry and commerce and advise on the implementation of such plans; v) advise on the organisation of the Government agencies con- cerned with economic planning and assist in the training af its staff. FRM No. 57 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OFFICE MEMORANDUM TO: Files DATE: December 7, 1955 FROM: J. Burke Knapp SUBJECT: VENEZUELA Mr. David Lilienthal called me from New York to say that he was making a trip to Venezuela next week and to ask whether we had any back- ground information on the country which would be helpful to him. I told him that we had done no serious work there and that we had no studies which would serve his purpose. We went on, however, to discuss the general situation in Venezuela. It appears that Mr. Lilienthal is going down to spend a few days "having a look" at the Caroni power project in the Qronoco Valley. This is a very large hydro-electric development which the Venezuelan Government desires to carry out together with the establishment of electro-metallurgical industries, including an electric steel mill and aluminum plants. I gathered that Mr. Lilienthal was doing this on the basis of a long-standing invitation from the Venezuelan Government, but as the conversation proceeded it became apparent that he really knew very little about what he was getting into. I told Mr. Lilienthal about the Bank's past relations (or lack of relations) with Venezuela, gave him a general appraisal of the chaotic state of Venezuela's external finances, and told him something about what we had heard recently regarding large bond issues in the United States on behalf of the steel mill. I think I at least told him enough to induce him to make a lot of inquiries in New York before he gets started on his trip next week. Mr. Lilienthal said that he would get in touch with me upon his return from Venezuela and tell me everything that he found out there. cc -- Mr. Black Mr. Garner Mr. Iliff Mr. Waterston JBKnapp/e od Sr. J. Burke Knapp April 16, 1953 Albert Waterston ME=EZUELA: Caroni liver ydroeleotric ProJect. 1* I saw in the Red Book your memorandum to Dave Sommers on a possible approach by the Tonesuslan Government to finance a bydroelectrie develop- ment projecto 2. I am almost certain that the source of the rumor is the Perkins' Report. In his report, Perkins proposed that the Venesuelans make a survey of the Caroni liver and suggested that either the Aluminm Company of Canada or the Reynolds Alumina Company might be interested in establish- ing a plant in the Caroni region. ge also suggested that the International Bank might be approached to finance the construction of the bydroeletric facilities. 3. Subsequently, in the February 20, 1953-edition of 'vision', a Spanish language international review, an item appeared which seems to be based squarely on the Perkins' Report. Following is my translation of the item: OA proposal is under consideration in Venesuela to obtain funds from the International Bank to start construction on the project on the Caroni River. Eugene Black one of the managers of the Bank already has a copy of the report. When negotiations are ensummated, the Aluminum Company of Canada will import bauxite from British Guiana. If it could obtain electric pover at a low price, the Company will establish a plant to produce aluminum in Tenesuela at a low cost.' On March 23, 1953, Mr. Thomas g. Corel of the Aluminu Company of Canada called upon ma. He showed me a letter from his Compan's representative in Tenesuela which contained a translation of the item in lVision. Mr. Cevel said that neither his Company nor its represent- ative in YenessIela know anything of the matter and wanted to know if we had any information concerning it. At that time I had not yet read the saetion of the Perkins' Report in which he suggested the survey of the Caroni. I therefore told Er. Covel that I had seen the article in 'Vision* and had been equally ystitied concerning the source of the rAstr. AWaterston top W. Davlmen Samowns AwrIl 23, 1953 Thbre have ben rzcmrrent ume, though o far ithout =W rwl substanne, that the Ve-e-m=1n onln Is %Oummwn to apprvach the Bank for a larw loan to fimm bydreectric da"Japarit. In anticipation ct euh a pomdbility, would it be pmuuible for you to revse reoent polit.s dsvero-m in Veunsuoa with a view to d rsn g m aetbor them is yet a 1*01 bavis for Bank qpgmtio in that cOWA1r? SiI0 DI OliAS b1 IGO a 9 ;A DL IAS LAdjI S 2 A IZADAS DUAAITL Eb Aii l9|i. Durante el lapso a que se refiere la presente Memoria, la labor del Despacho en materia de Obras de Riego y Defensas Hidrdu- licas ha sido, en sintesis, la siguiente: En lo referente a Lstudios: Se concluyeron casi totalmente los estudios prelininares para el Control de las Inundaciones en los valles situados al Sur del Lago de Maracaibo y comprendidos entre los Rios Chama y Zulia- Catatuxbo, cuya direcci6n tecnica y administrativa fuera encomen- dada a la firma "Civisan Ingenieros C.A." mediante contrato cele- brado al efecto. Los levantamientos topogrAficos y estudios a- gron6micos prelirdnares roalizados al respecto, cubrieron una su- percicie de unas 400.000 Has. Se crncluyeron los estudios preliminares relativos al al. macenamiento de las aguas de los rios Palmar y Ap6n, para el rie- go de tierras situadas al Oeste del Lago de Maracaibo, los cuales fueron ejecutados mediante contrato de direccidn tdcnica y adminis- trativa celebrado con la "Oficina Aguerrevere". AdemAs, se terminaron los Estudios y Proyectos de las si- guientes obras: Presas de almacer.amiento de los rios Pao y Tinaco en los sitios donde cruzan el macizo montaioso denominado "Las Galeras", las cuales permitiran el riego de unas 80.000 has. de los valles de estos dos. Los proy-ectos y especificaciones de construcci6n de esta obra, fueron ejecutados por la firma Inge ;ieria de Suelos S.A., mediante contrato celebrado a tal fin. Presa de almaccnamiento del rio Motatdn en el sitio de "Agua Viva" y red de canales de distribucidn de las aguast con ob- jeto de ampliar hasta 50.000 has. el Area regable con el rio mota- tin y generar energia hidroeldctrica. Estos estudios se ejecutaron mediante contrato de direcci6n tdcnica y administrativa que fuera *e*ebrado en l "Ofleina AguerrovereW. Aprovechamiento id las aguas bajas del rio foaon6, Edo. Barinas, pars *1 riego do 8.000 bax. pr4ximas a lam poblaoiones do Voguitam y Sabaneta, lox quo fueron realizados bajo Is direg cidn tdonica y administrativa do Ia firma Igsaw.En aexeidu con estoo estudios so realizaron lax investigacionos preollins- rem sobre el almaoenaminto do los rios Booon6 y Masparro, par& ampliar en forma apreslable el Aria rigable en esta parte del pa- is. Aproveehamiento do las aguas bajas del rio Santo Domingot Edo. Barinas, pars 91 rego do 6.000 has. pr6ximas a l cludad do Barinas, los quo fueron realisados bajo la dfrecein t~enia y a& ministrativa do la Campaftla wInges". Be continuaron adems, los estudios do lam obras hidriull cas necesarias par& el.desarrqllo de los valles del rio Yaracuy y do otras zonas del pais, ast aoso os do sanalisa 6n do la rics Guairo y Valle a su paso por Is capital. En los Estudios Gooldgieos reanlados durant. el presento lapso y relacionados eon las obras antes indicadas, se ejeautaron numoross perforaeione, cuya longitud total alcanz a 3.515 at**; esta cifra inoluy. las perforaciones realizadas en estudios do so a .bras, en atenci6n a solicitudes do diversas Dependencias del Despasho y Organismos fiieale. En materia do Estudios Agrondmicos preliminarsi, la aecti- vidad prineipal durante el presente lapso consistid en 01 reoono- ciuiente del dres. por benficiarse en I& Zona al Sur del Lago de Maracaibo. En lo referents a Construeein do Obras d. Ritego so eje - cutaron la sigutentes obraso En *1 Sistoma Tagwaguayt Be eostruyd *1 enrocaniinto complemontario par& l pIsA.eiede.1 talud do aguas arriba do lam presas do almacenaiente# 61 Gual oubri un Aea do 60.395 m2. y so Wi&16 La eoastrueoin del peso do disipaeion del canal do descarga del aliviadero del embalse. Para In ejecucifn de estas obras, se celebrd un contrato con la firma Constructora Venezola. na de Obras Pdblicas e Industriales C.A. Ademoa, se construyeron por Administracidn directa del Despacho, 7.3 Irma, de canales do riego y se ampli6 el cauce del Caio Apar, que es .l drenaje prin-. cipal de la zona de riego, en una longitud do 6 kma. En el Sistema de Riego del Neveri se coneluyd la construe- cidn del canal de derivacidn, habiendose revestido en concreto - 21.180 m2. de dicho canal. Se construyeron pequeias estructuras con un volumen total de concreto de 225 m3. En lo que se refiere a Defensas Hidrhulicas la labor rea- lizada fu6 la siguiente: Ln la regi6n do Barlovento se construy6 por administra- cin directa del Desp:cho 5.86 kns. del dique marginal derecho - previsto para el control do las crecientes del rio Tuy, con un voll men ee terrapIdn de 205.000 m3. y por contrato celebrado con la fir- ma Venezolana de Trabajos Pdblicos se construyeron 5.1 Kws. con un voldnen de terrapldn de 1.100.000 m3. Se continuaron por adminristraci6n directa del Despachot las obras do canalizaci6n en tierra del rio Guaire, las quo so concluyeron en un tramo de 520 mts. aguas abajo del Puente Ve.- racruz. Se iniciaron las obras do carializacidn de este rio, re- vistiendo en concreto la parte inferior del eauce, en el trayec- to comprendido entre la Ciudad Universitawa y el Puente Mahoda- no; ellas se vienen realizanido segdn contrato celebrado con la Compa~la "Cifra". Adenas se di6 comirnzo a la Canalizaci&n del Rfo Valle deade los teirenos de la Escuela Militar hasta su do- sembocadura en el rio Guaire, la cual fug encomendiaCa a la "0- ficina do Ingenieria Gustavo Ayala C.A.". Debido a fuertes crecientes ocurridas on el mes de ju- 1o, el rio Yaracuy obstruyd casi totalmente su cauce en una lon- gitud ie 1.2 Kms. aproximadamente. Con objeto de impedir los da- tics que en otra forma so hubieran sucedido, se encomend6 a la firma "Exploraciones, Voladuras y Drenajes C.A." la apertura de un canal piloto para encauzar el rio en el trayecto obstruido. se conluyeron las obras do defensa do la poblact6in de En- contrados (Edo. Zhlia), contra ia acci6n de las aguas del rio Ca- tatumbo, las cuales .consistieron en un canal para desviar el rio frente a la poblaci6n y on la construccift de diques marginales en cortos tramos. So mejord adamls, en algunos trayectos, el d.- que marginal derecho del rio Zulia (afluente del Catatumbo) Be continud la construccidn de Obras de Defensa en las po- blaciones de San Fernando, Mdo. Apure; Barrancas, Edo. Monagas y Tucupita, Territorio Delta Amacuro. Las dltimas se vienen ejecu- tando mediante contrato celebrado con la firma "La Excavadora C-A." En materia de Hidrologia, se continud la medicidn perid- dica de los caudales y acarreos sdlidos de diversos rios cuyo estudio ha considerado el Despacho de interds, asi como tambign de los re- gistros de los pluvidmetros y evaporimtros que ha establecido en diversas zonas del territorio o euyos datos le son enviados por - parte de otros Organismos Oficiales o por particulares. Se rea- lizaron ademls, diferentes estudios relacionados con las caracte- risticas climatolgicas e hidrol6gicas de las cuencas y zonas cu- yos estudios viene realizando. Uaracas, 25 de febrero de 1.955. Fs copia. ACG. Q & MINISTERIO DE AB PULLICAS CCIO at OLAS DE RIE11 D HEMORIA DE LAS ORAS PREALIZADAS DURANTE EL ANO PE 1.953 Durante el periodo a que se refiere la presente 'Memoria, la labor realizada por el Ministerio do Obras Pblieas en materia do Obras de Riego y Defensas Hidriulicas, fud en sintesis la siguien- te: Se continuaron los estudios de los Sistemas do Riego: del-- Rio Gudrico (Edo. Gudrico); de los Rios Pao y Tinaco (Edo. Coje- des); de los Rios Cojedes y Sarare (Edos. Portuguesa y Cojedes); del Rio Guanare-2a etapa (Edo. Portuguesa); de los Rios Bocond y Santo Domingo (Edo. Barinas); y de Los Llanos de El Cenizo-2a, e- tapa (Fdos. Trujillo y Zulia), Se continuaron asimismo los estu- dios relativos al Control de las Inundaviones y Drenafe de la Re- gi6n de Barlovento (Edo. Miranea); de la Zona Sur del Lago de Ma- racaibo, comprendida entre los Rios Zulia-Catatumbo, Escalante y Chama (Edo. Zulia) y de los Valles del Bajo Yaracuy (Edo. Yaracuy). Entre las obras arriba indicadas, es de mencionarse especial- mente el Sistema de Riego del Rio Gudrico, dadas sus proyecciones sobre la economfa del pais y del Estado Gudrico en particular: De un modo general, la distribucidn de las Yluvias en los flanos centrales del pais da origen a dos estaciones bien defini- das: la estacin 'seca" comprendida entre noviembre y abril, con una duraci6n de unos 160 dias, y la estaci6n "hdmeda" entre mayo y octubre. Durante la estaci6n "seca", prdcticamente no ocurren iluvias y por ello, el riego de las tierras es necesario para su ministrarles la humedad requerida par& el creciaiento de las plan- tas; y durante la estaci6n "hmeda", la lenta evacuacion de las a- guas plvviales hace que vastas extensiones permanezcan anegadas du- rante largo periodo, como consecuencia de la magnitud de las llu- vias, la ligera pendiente de las tierras, la insuficiencia de cau- -2- ces naturales de drenaje y la relativa impermeabilidad de los suelos. Con alguna frecuencia ocurren altas crecientes de los rios y ante la incapacidad de los cauces para conducirlas, las aguas se desbordan inundando apreciables extensiones. Las condiciones anteriores hacen que, desde un punto de vis- ta de obras hidrdulicas, para la transformaci6n del medio fisico en esos llanos se requiere fundamentalmente: la construccifn de Obras de Riego, para suministrar las tierras la humedad necesaria durante la estaci6n "seca"; y det Obras de Drenaje, para unaadecuada evacua- ci6n de las aguas. Una de las zonas del pals cuyo desarrollo ha venide contem- plando el Despacho con especial interds la constituye los Valles del Rio GuArico. El reducido caudal superficial de dAste rio a su entrada en los Llanos, se infiltra casi totalmente durante la esta- cidn "seca", siendo por ello necesarlo la construccifn de obras de almacenaje para el establecimiento de sistemas de riego de cierta importancia. Las investigaciones realizadas s6bre las posibilidades de almacenaje del Rio Ou4rico revelaron la existencia de dos sitios apropiados: el primero, denominado "San Francisco", en el cruce del rio con el maciso montafioso "Las Galeras del Guarumen", a ppi cos kil6motros aguas arriba de su entrada en los Llanos; y el se- gundo, denominado "Los Angeles", a corta distancia aguas arriba do la ciudad de Calaboso, En el sitio "San Francisco", la hoya hidro- grdfica del rio mide 2.185 Kms2. y la presa de almacenaje consisti- ria en una estructura do altura moderada y reducida longitud; en el sitio "Los Angeles", la hoya hidrogrdfica alcanza a 8.150 Kms2. y la presa de almacenaje seria relativamente baja y de gran longitud. Los estudios preliminares realizados sobre la calidad de los suelos do los Valles del Rio nAfrico comprendieron gran parte de las tierras situadas entre Uamatagua y Coroso Pando. En general -3- las tierras de la zona, aunque aptas para el desarrollo bajo riego de diversos cultivos, no pueden considerarse de alta fertilidad, do- bido principalmente a sus caracteristicas fisicas. Entre Camatagua y Calabozo existen tierras cuyo riego seria conveniente, pero las mis apropiadas so encuentran al suroeste de Calabozo, en los valles de los Rios GuArico y Tiznados. Para el riego do desta Area existia la alternativa de empren- der en primer tdrmino el embalse do "San Francisco" o bien el de - "Los Angeles". Se adoptd 4sta dltima porque en caso contrario, 1*- biera sido necesario construlr en sitio pr6ximo a Calabozo costosas obras para la derivaci6n y conduccifn de las aguas a la zona de rie- go, las cuales resultarian en gran parte innecesarias al construir- -so posteriormente el embalse de "Los Angeles", pues en data obra la conduccifn de las aguas comiensa a La salida de las obras do toma del embalse. Por otra parte, de suprimirse el embalse de "San Fran- cisco" y construirse a6lo el de "Los Angeles" con mayor capacidad, no se experimentaria dis3inuci&n apreciable en el costo total do almacenaje y se eliuinaria la posibilidad de incluir posteriormente on la zona de riego, parte de las tierras situadas entre ambos em- balses y pairticularmente las pr6ximas a la poblaci1n de El Sombre- ro; asi como de producir energia hidroeldctrica continua (aprove- chando el salto al pid do la prese de San Francisco) sin mayores interferencias con el riego. Los estudios realizados para determinar las disponibilida- des de aguawy extensi6n de la zona do riego, indicaron que con el embalse de "San Francisco" so podria regar una superficie de 20.000 Has. y producirse al-rededor de 5.000 Kw. continuos; y con el do "Los Angeles" se podria reger un Area de 110,000 Has. Las conclusiones anteriores fueron obtenidas principalmente de los a- foros practicados on el rio GuAricv durante varios afios on las es- taciones do "La Puerta", "Caatagua", "E1 Sombrero" y "Calabosom y de los registros pluviomtricos on diversos sitios do su hoya hidrogr4fica. En resimen, el proyecto de aprovechamiento de las aguas del rfo Gudrico comprende: el embalse de "Los Angeles", para el riego de 110.000 !Ias. de los Valles de los Rios GuArico y Tizandos, situados al suroeste de Calabozo; y el embalse de "San Francisco", para el riego de 20.000 Has. entre Camatagua y Calabozo y la produccidn de energia hidroeldctrida en Caso que fuese conveniente. El embalse "Los Angeles" tendrd una capacidad total de 1.74+0 millones de metros cdbicos inundando un drea de 22.600 Has. La pro- sa de almacenaje, del tipo de tierras compactadas, tendrA una altura mdxima de 30 metros y una longitud en la cresta de 14 Kis. Durante el periodo a que se refiere la presente Memoria, los estudios realizados han cubierto principalmente los aspectos topogri- ficos, geol6gicos e hidrol6gicos de las obras do almaeenaje, en espe- -cial los del embalse y la presa de "Los Angeles", asi como parte do los proyectos y diseios de las estructuras anexas. Elibs hkn veni- do siendo realizados por Administraci6n Directadel Despacho. En materia de Construccifn de Sistemas de Riego, se continua- ron las obras relativas a los Sistemas do Taguaiguay-la, etapa (Edo. Aragua); Neveri-2a. etapa (Edo. Anzodtegui); y Reacondicionamiento del Sistema Guanare (Edo. Portuguesa). En el Sistema de Riego de Taguaiguay se construyeron, por Administracifn Directa del Despacho, 13 Kms. de canales secundarios, 14 Kms. de canales de drenaje y 8 Kms. de caminos, con sue respecti- vas estructura En fecha .7 do octubre se contrat6 a la firma Cons- tructora Venezolana de Obras Pdblicas e Industriales C*A# el enroca- miento complementario de proteoci6n del talud aguas arriba de lax presas de almacenaje; las obras correspondientes so encuentran on ejecuci6n# En el Sistema do Riego del Neverf ae continu6, por Adminis- traci6n Direct& del Despacho, el revestiuiento en concreto del canal de derivacidn. En el Sistema de Riego de Guanare se concluy6 el Reacondicio- namiento del Sistema, habiVndose terminado la construcci6n de 7 Krns, de canales secundarios, 8 Kms. de caminos y 3 Kms. de canales de dre- naje con las estructuras correspondientes. En materia de Defensas HidrAulicas, se continuaron las obras de Control de Inundaciones de la Regi6n de Barlovento (Edo. Miranda); de Canalizacifn del Rio Guaire en el Valle de Caracas; de Limpieza y Encauzamiento de los Rios Yaracuy y Macagua (Edo. Yaracuy); y las de defensa de las poblaciones de San Fernando (Edo. Apure); Encontrados (Edo. Zulia) y Tucupita (Territorio Federal Delta Amacuro). De las Obras para el Control de Inundaciones do la Regi6n do Barlovento se concluyeron las de Canalizaci6n y Desviaci6n del Rio Chico sobre CAR6 Copey, en una longitud de 10 Kms., que.fueron en- comendadas a la firma Venezolana de Trabajos Pdblicos y se termin6, por Administraci6n Directa del Despacho, la construccin de 2 Kms. del dique marginal derecho del Rio Tuy. Se continuaron las obras do canalizacidn del Rio Guaire; e- 11as han venido siendo ejecutadas por Administraci6n Directa del Des- pacho y mediante contrato que fuera celebrado con el Ing. Gustavo A- yala Garcia. Durante el presente periodo se canaliz6 el Rio Guaire en un trayecto de 1.720 metros y se concluyeron las obras correspon- dientes en un tramo de 1.220 metros adicionales. Las 6reas pr6ximas al rio se han venido nivelando y acondicionando mediante siembra do grama y irboles; el Area acondicionada en 6sta forma alcanz6 a ---- 14.24*0 mts2. Se continuaron las obras do Limpieza y Encauzamiento de los Rios Yaracuy y Macagua, asi como las del caf'o Marcano entre las po- blaciones de Farriar y Palmarejo, habigndose construido-2 Kms. de canalizaci6n y rectificaci6n del rio Yaracuy y 250 mts. de un dique marginal para la defensa do la poblaci6n de El Chino y de partes ba- -6- jas de los valles del rio Yaracuy. En San Fernando de Apure se continuaron las obras de protec- ci6n de las mArgenes del Rio Apure hacia el occidente do la poblaci6n y frente al aeropuerto. Se comenzaron las obras de rectificaci6n del cauce del rio inmediatamente aguas arriba de la ciudad, con el objeto de suprimir dos curvas de marcada influencia sof este problema, ha- bi6ndose excavado en una de ellas un canal piloto de 2 Kms. de longi- tud. Para la defensa do la poblaci6n de Encontrados se excavd un canal piloto de 1.600 metros de lontitud, con el objeto de desviar el rio Catatumbo en su paso frente a la poblaci6n y se realizaron, entre otras, obras de protecci6n de la margen del rio. En la poblacin de Tucupita so construyeron 50 metros do de- fensas de mArgenes, en el trayecto frente al Hospital Luis Rasettis En materia de Conservacin de Sistemas de Riego, durante .1 periodo a que ,se refiere la presents Memoria se realisaron las labo- res correspondientes en los Sistemas de Suata y Taguaiguay-la. eta- pa (Edo. Aragua); Ouataparo (Edo, Carabobo); Tuy-Cda (Edo. Miranda); San Carlos (Edo. Cojedes); Cumant (Edo. Sucre) y Los Llanos de El Ceniso-la. etapa (Edo. Trujillo). PPH/clc.- 3-2-1. - Es copia: avv. MIN IQI 12 0BAS PUBLICAS Ii D.RGO MgW)RIA DE LAS LABORES REAT.TADAS DURANTE EL PERIODO DE JULIO A DI- CIEMEtE DE 1948 Y IOS A9OS DR 1949, 1950, 1951 Y 1952. Con el objeto de orientar su labor en materia de Obras de Riego, el Despacho do Obras Pdblicas concluy6 en 1949 un estudio iniciado el afio anterior e intitulado "Consideraciones BAsicas para la Elaboraci6n de un Plan Nacional de Irrigaci6n a ser dess rrollado durante el periodo 1950-1970", relativo a nuestras nec - sidades de producci6n alimenticia para la dltima do las fechas 4i tadas. Aunque las cifras alli indicadas deberin ser modificadas segdn los resultados de las revisiones que dicho estudio deberl experimentar con base a los censos y estadisticas do aflos posteri res, no se alterarl por ello su conclusi6n principal ques una pol tica de obras de riego y saneamiento de tierras que tienda al autq abastec-imiento alimenticio del pals, deberd ser fundamentalmente basada en el establecimiento de grandes sistemas do riego o de dre naje. Dicho estudio en sistesis, comprende: La experiencia en o- tros paises aconseja considerar en 15 afios, el tiempo necesario pa ra el estudio, construcci6n y desarrollo de grandes sistemas de ri1 go (definidxdose asi, aquellos que benefician mAs de 20.000 Has.); por ello, se ha adoplado un periodo do 20 afios como base para un Plan de Irrigaci6n. Durante ose periodo, nuestras necesidades do produccifn de alimentos habrd aumentado con relaci6n a las necesidj dos actuales como consecuencia del incremento do poblaci6n y del me joramiento do sus condiciones econdmico-sociales. Sobre el incre- mento de poblacifn, so obtuvo que dsta podri aumentar de 4.740.000 habitantes que se estimaron para 1950, a.7.500.000 en 1970; y en cuanto al aumento do conaumo se obtuvo que el consumo medio anual per-cipita de nuestra poblac16n durante affos recientes fud de unos 300 Kgs., mientras que el promedio en otros palses Sur-Americanos arrojan cifras 50% mayores y anAliuis sobre dietas aconsejables pa- ra nuestra poblaci6n recomiendan consumos per-capita do 586.4 Kgs. anuales. Aceptando cifras estimativas sobre el rendimiento anual de la "hectirea racionalmente explotada", se dedujo que nuestra pro ducci6n durante 1947 fuE equivalente a la de unas 900.000 Has. "ra- cionalmente explotadas" y para satisfacer las necesidades alimenti- cias de los 7.500.000 hmbitantes que se estimaron para 1970, a base de un consumo medio anual de 586,4 Kgs. se necesitarla un voldmen de produccifn equivalente al de unas 3.00.000 Has. "racionalmente explotadas". Ello equivaldria a elevar el coeficiente de producci6n de 0.21 a 0.43 Has. "racionalmente explotadas" por habitante. La unidad "hectirea racionalmente explotada", aunque se ha considerado equivalente en producci6n a la "hectArea bajo riego", no envuelve necesariamente el concepto de la obra de riego. Gran parte de la produccifn adicional necesaria podrA obtenerse incre- mentando y mejorando los sistemas de explotaci6n en secano y reali zando obras de drenajo en zonas que gozan de buen rEgimen pluviomf trico, pero experimentan limitaciones para su cabal aprovechamien- to por la ausencia o insuficiencia de cauces naturales para la eva cuaci6n de las aguas. -2- La magnitud de nuestras necesidades de producci6n aconse- ja que la labor por realizarse sea basada en el establecimiento de grandes sistemas de riego o de drenaje, pues con pequefias.y numerosas obras, no s6lo es dudoso que se alcance a cubrir la su perficie necesaria, sino que los costos de construcci6n, adminii trac16n y conservaci6n de las obras resultarin, por unidad de su perficie, mAs elevados. Es evidente que el establecimiento de obras de menor magnitud serA necesario y conveniente, pero el grueso de la producci6n provendrA en el futuro de las grandes obras que se emprendan. En cuanto a nuestras necesidades de riego, cabe observar que en gran parte del pais la precipitaci6n pluvial anual ocurre concentrada en unos seis o siete meses, mientras que prActicamep te no ocurren iluvias en los meses restantes. El riego es por consiguiente necesario, al menos durante los 5 6 6 meses secos; y es beneficioso durante los meses lluviosos, en los cuales suce den irregularidades en las lluvias que ocasionan perdidas, dismi nuc16n o retardos en las cosechas. En cuanto al aumento de pro- ducci6n como consecuencia del riego de las tierras, estudios rea lizados al respecto indican que, en terminos generales, podrian obtenerse cosechas anuales por un valor bruto aproximado de 800 6 1.000 bolivares por hectdrea mediante mdtodos de producci6n en secano y de 1.800 6 2.200 bolivares por hectdrea en producci6n bajo riego. (El valor medio de la producci6n bruta obtenida en el sistema de riego de Suata, Edo. Aragua, durante los' afios de 1947 a 1951, es cerca de B3 3.000 anuales por hectArea). El costo medio de construcci6n de las obras bAsicas de rie go, drenaje y caminos internos se estima en k .50-0or hectArea. En gran parte de las zonas cuyo aprovechamienTo considera el Des- pacho, serA necesario realizar obras de colonizaci6n, deforesta- c16n y acondicionamiento de tierras, cuyo costo medio se estima en Bs 2.500 por hectArei; parte de estaos obras, podrian ser realiza- d'aspor-los mismos agricultores. De las cifras expuestas sobre costos y producci6n se deduce que el valor bruto medio anual de la producci6n serA cerca del 50% del costo de construcci6n de las o- bras o sea quo cada dos ahos, el valor bruto de la producci6n ser sensiblemente igual al costo de construcci6n. De esta conclusi6n, que estA do acuerdo con la experiencia obtenida en otros paises y ampliamente confirmada por la cifras del sistema de Suata, se des- prende que las inversiones necesarias podrAn recuperarse en plazo razonable, por vias directas a travds do las contribuciones de los beneficiarios de las obras, e indirectas por los beneficios econ6- mico-sociales que experimentarA el pais. La labor que ha venido realizando el Despacho en materia de Estudios, estA orientada a permitir el desarrollo de un vasto pro- grama de obras de irrigaci6n y drenaje de tierras que, de acuerdo con las-conclusiones indicadas en pArrafos anteriores, estaria ba- sado fundamentalmente en el establecimiento de grandes sistemas de riego o de drenaje. En tal sentido, se intensific6 el ritmo de e- jecuci6n de los estudios de algunas obras que se venian realizando y se emprendieron los de otras cuyos reconocimientos preliminares resultaron favorables, Fueron considerados asimismo las disposi- ciones necesarias para un adecuado aprovechamiento de las tierras por beneficiarse. s -3- La insuficiencia de personal tdcnico a su servicio, llev6 al Despacho a celebrar con firmas o ingenieros, principalmente venezolanos, contratos de direcci6n tdcnica y administrativa pa- ra ejecutar los estudios de algunas obras y a realizar otros por administraci6n directa. Para asesorar al personal tdcnico, y ag tuar en calidad de consultores o proyectistas se contrataron in- genieros o firmas de ingenieros extranjeros especializados en la materia. Y con el objeto de elevar la capacidad tdcnica de su personal venezolano, -fueron comisionados varios ingenieros civi- les, agr6nomos y geAogos a realizar en algunos casos giras de estudios y seguir en otros, cursos de especializaci6n en el ex- tranjero. Ante la necesidad de un conocimiento previo de aquellas tierras que por sus caracteristitas pudieran justificar estudios mds detallados sobre las obras hidrdulicas necesarias para su ca bal aprovechamiento, se ampliaron los reconocimientos agron6mi- cos preliminares destinados a tal fin y se realizaron luego estu dios detallados en aquellas tierras cuyo aprovechamiento fud con siderado conveniente. En este sentido, durante el periodo Julio- Diciembre de 1948 fueron reconocidas 297.000 Has. y realizados estudios definitivos sobre 6.700 Has., y durante los afios de 191+9 a 1952, los estudios preliminares abarcaron 675.000 Has. y los de finitivos 160.000 Has. La superficie total de tierras investiga- das por el Despacho hasta la fecha alcanza a 1.200.000 Has. apro ximadamente; su distribuci6n se indica en el anexo NO 1. 'En el afto 1948 fu creado un laboratorio en la Divisi6n respectiva para practicar andlisis fisico-quimicos de muestras de tierra; hasta la fecha, se han practicado 23.600 anilisis. La red hidrol6gica y pluviometrica necesaria para la deter minaci6n de los recursos hidriulicos y necesidades de riego fu4 incrementada or el Despacho. Durante el semestre de julio a di- ciembre de 19, se instalaron 10 pluvi6metros y 2 estaciones de aforos; y durante los aflos de 1949 a 1952: 59 pluvi6grafos, 191pluvj y 13 estaciones de aforos. En el anexo NO 2 se indica parte de metrc la red controlada por el Despacho, la que incluye (ademAs de es- taciones instaladas en periodos anteriores) 13 pluv16metros par- ticulares cuyos datos son periddicamente recibidos. En conjunto, la red de estaciones cuyos registros posee el Despacho comprende: 377 pluvi6metros y pluvi6grafos a cargo del Despacho; 231+ pluvik metros a cargo de otros organismos oficiales; 67 pluvi6metros a cargo de particulares; 36 evaporimetros a cargo del Despacho y 85 estaciones de aforos peri6dicos a cargo del Despacho. A titulo ilustrativo, en el anexo No 3 se indican las llu vias medias ocurridas en las cuencas del Rio Tuy y del Lago de 7a lencia durante el periodo 1949 a 1951 deducidas de los datos de las estaciones existentes. Las zonas cuyo aprovechamiento mediante obras de riego o de drenaje viene siendo materia de Estudios, so encuentra princi palmente situadas en los Llanos Centro-Occidentales, en los Va- lles de la Costa del Carib@ y en los Valles del Lago do Maracai- bo; ellas comprenden lossittemas siguientes, cuya situaci6n se muestra en el anexo NO 1+: El sistema del rio Santo Domingo (Edo. Barinas), para el riego de 8.000 Has. (pr6ximas a las poblaciones de Barinas y 0- bispos), mediante la utilizaci6n de las aguas bajas del rio San- to Domingo. Estos estudios se concluirin dentro de los pr6ximos 6 meses; El sistema del rio Bocon6 (Edo. Barinas), que aprovecha- rA las aguas bajas del rio Bocon6 para el riego de 8.000 Has. vecinas a las poblaciones de Veguitas y Sabaneta. Los estudios correspondientes han sido recientemente concluidos, y se reali- zan las investigaciones preliminares sobre el almacenaje de los rios Bocon6 y Masparro para una futura ampliaci6n de la zona de riego; El sistema del rio Guanare, 2a. etapa (Edo. Portuguesa), que consistirl en el aprovechamiento de las aguas bajas no uti- lizadas de este rio para ampliar en unas 5.000 Has. la actual zona de riego. Es'tos estudios quedarAn concluidos durante los pr6ximos 6 meses; El sistema de los rios Cojedes y Sarare (Edos. Portugue- sa y Cojedes), que mediante el almacenaje de las aguas de ambos rios, regarl una superficie de 60.000 Has. al sur de las pobla- ciones de Agua Blanca, San Rafael de Onoto y Apartaderos, y pro ducirl energia hidroelectrica con 3 unidades de 3.300 kilowatios cada una. Se encuentran pricticamente concluidos los estudios relativos al almacenaje del rio Sarare para el riego de cerca de 20.000 Has., lo cual constituirA la primera etapa para el desa- rrollo de esta obra; y se encuentran avanzados los del almacena- je del rio Cojedes para ampliar a 60.000 Has. la zona de riego, producir energia hidroeldctrica y controlar las crecientes del rio; Sistema de los rios Pao y Tinaco (Edo. Codedes), para el riego de unas 85.000 Has. situadas al sur de las galeras del Pao, mediante el almacenaje de las aguas de estos rios. Se vienen rea lizando los estudios de las obras de almacenaje y posteriormente se emprenderin los relativos a la zona de riego; Sistema del rio GuArico (Edo. Guarico), para el riego de unas 60.000 Has. situadas al sur de la ciudad de Calabozo median te el almacenaje de las aguas del rio Gudrico en sitio prximo a7 esta ciudad. Se vienen ejecutando los estudios de las obras de almacenaje y se han iniciado recientemente los de la zona de rie- go; Sistema del rio Cariaco (Edo. Sucre), para el riego de 1.500 Has. pr6ximas a la poblaci6n de este nombre mediante el aprovechamiento de las aguas bajas del rio Carinicuao o Caria- co. Los estudios correspondientes han sido concluidos, asi co mo las investigaciones preliminares sobre la posibilidad de al macenaje del rio Cariaco para ampliar en unas 2.500 Has. la zo na regable; Sistema de la regi6n de Barlovento (Edo. Miranda), que com prende: obras para el control de las inundaciones que experimen- ta la regi6n; obras de drenaje en las tierras defendidas y obras de riego en las Area que lo justifiquen. Los estudios que se vie nen realizando, comprenden principalmente los valles del bajo Tuy cruzados por los rios Capaya, Aramina, San Jose, Chico y Guapo. La superficie total bajo estudio es de 60.000 Has. aproximadamen- te, de las cuales el 50 a 60% es afectada por los desbordamientos de estos rios. Parte de las tierras por beneficiarse presentan deficiencias que la hacen s6lo apropiadas para ciertos cultivos. Be han concluido en su casi totalidad los estudios relativos a las obras de canalizaci6n para el control de las crecientes de los rios Capaya, Tuy San Josd y Chico y se vienen realizando los destinados al control del rio Guapo y las obras de drenaje y rie- go necesarias para un cabal aprovechamiento de las tierras. Asi- mismo se investigan las posibilidades de almacenaje de las aguas del rio Tuy para el riego de los valles situados entre las pobla- ciones do Ca y Santa Teresa del Tuy. La construcc16n ce las o- bras para .l control do las inundaciones del bajo Barlovento ha sido iniciada por el Despacho; Obras do Kncauzamiento do los Rios Yaracuy y Macagua (Edo* Yaracuy), con el objeto do disminuir los perjuicios que ocasionan sus deabordamientos en los valles del bajo Yaracuy. Se han ini- ciado los reconocimientos preliminares do las obras de control de inundaciones, drenaje y demAs requeridas para un cabal aprovecha- miento do estas tierras. Las obras de encauzamiento y de limpie- za de los rios Yaracuy y Macagua vienen siendo realizadas por el Despacho; Estudio preliminar para el aprovechamiento de las aguas de la hoya del rio Tocuyo (Edos. Lara y Falc6n), con destino al rie- go de sus valles. Estos estudios se encuentran pricticamente con cluidos; Sistema de los Llanos de El Cenizo, 2a. etapa (Edos. Truji llo y Zulia), para ampliar mediante el almacenaje de las aguas del rio Motatin y hasta 50.000 Has. la zona de riego de este sistema y producir energia hidroeldctrica con 3 unidades de 12.000 kilowa tios cada una. Estos estudios quedarAn concluidos durante los pr6ximos 6 meses; Estudio preliminar sobre las posibilidades de almacenaje de las aguas de los rios Lim6n, Palmar y Ap6n (Edo. Zulia), para el riego do los valles nor-occidentales del rAgo de Maracaibo, los cuales quedarin concluidos durante los pr6ximos 6 meses; Estudio preliminar de las obras necesarias para el control de las inundaciones, drenaje y demAs que fuesen necesarias para un eficaz aprovechamiento de los valles de los rios Zulia-Catatum bo, Escalante y Chama (Edo. Zulia), los cuales se encuentran en ejecuci6n. AdemAs, fueron realizados estudios e investigaciones sobre otras posibilidades de riego en los valles del Lago de Valencia, Llanos Centro-Occidentales y otras zonas del pais. Los estudios geol6gicos relacionados principalmente con las condiciones de fundaci6n en las presas de almacenaje y la si tuaci6n, cantidad y calidad de los dep6sitos naturales disponi- bles para su construcci6n, han comprendido 2.100 perforaciones, taladros y fosas do ensayo que cubren en conjunto una longitud de 27.200 metros. El 5% de esos trabajos fud realizado durante el semestre de Julio a diciembre de 1948 y el 95% durante los aflos de 1949 a 1952. En 1951 fud creada en la Divisi6n respectiva, una secci6n de geofisica, para realizar estudios del subsuelo median- te mdtodos sismicos y electricos. Los levantamientos topogrAficos de los embalses y zonas de riego cubrieron una superficie de 2.000 Has. durante el periodo julio-diciembre de 1948 y de 460.000 Has. durante los aftos de 1949 a 1952. Entre las obras cuyos estudios se encuentran mAs avanzados, son de mencionarse especialmente por sus proyecciones sobre la e- conomia de importantes zonas del pais: Las de Control de Inunda- -6- ciones de la Regi6n de Barlovento, las del Sistema de Riego de los Rios Cojedes y Sarare y las del Sistema de Riego de los Lla nos de El Cenizo II Etapa. Parte de los estudios fueron inicia dos en ahos anteriores e incrementados durante el periodo 1949- 1952. La zona baja de la Regi6n de Barlovento que comprende los valles de la margen izquierda del rio Tuy atravesados por los rios Capaya y Aramina, y los de la margen derecha cruzados por los rios San Jos6 y Chico y limitada por el rio Guapo, es inunda da frecuentemente por los desbordamientos de estos rios a causa de la incapacidad de sus cauces para conducir las crecientes, y en menor grado, por la presencia de represamientos en algunas confluencias. En los valles de la margen derecha del rio Tuy, por su mayor extensi6n, poblaci6n y grado de desarrollo, los da- fos debidos a las inundaciones son mayores que en los de la mar- gen izquierda. De las obras de control de inundaciones, drenaje y riego necesarias para un eficAz aprovechamiento de las tierras de la regi6n se han concluldo prActicamente los estudios para el con- trol de los rios Tuy, Capaya, San Josd y Chico y se realizan los del Aramina y del r:o Guapo y demds requeridos para el aprovecha miento de los valles de la margen derecha del rio Guapo. Los estudios realizados para el control de las crecientes del rio Tuy indicaron que la soluci6n mAs econ6mica y convenien- te, consiste en la construcci6n de diques marginales de altura y separaci6n entre ellos suficientes para conducir sin' desbordarse las mayores avenidas del r:o. La creciente ocurrida durante el mes de noviembre de 1949 y deducida de marcas observadas en di- versos sitios alcanz6 a 2.500 metros cdbicos por segundo aproxi- madamente, mientras que la capacidad del cauce actual del rio po cos kil6metros aguas arriba de su desembocadura en el mar es in- ferior a 500 mts3/s. Las obras de canalizaci6n proyectadas (cu- ya construcci6n ha sido iniciada) consisten en dar al cauce una capacidad suficiente para conducir sin desbordarse 4.000 mts3/s. en condiciones normales de operaci6n y hasta 6.000 mts3/s. en condiciones extremas, mediante la construcci6n de diques margina les de altura variable entre 4 y 6 mts. y separados 800 mts. a cada lado del cauce central. En cuanto al trazado, se modifica- rd parcialmente al alineamiento actual del rio desplazando hacia el Este su desembocadura en el mar tanto por la menor longitud y costo de las obras de canalizaciln, como por utilizarse para ellas gran parte de tierras bajas anegadizas y de calidad infe- rior, dejdndose libres y protegidas las fdrtiles tierras pr6xi- mas al cauce actual. Los desbordamientos del rio Capaya inundan vastas exten- siones de los valles de la margen izquierda del rio Tuy; sus a- guas van en parte al mismo Tuy y en parte al mar Caribe por di- versos caflos. Para su canalizaci6n, se conduciri el rio direc- tamente al mar y se controlarAn sus crecientes mediante diques marginales capaces para conducir 600 mts3/s. En el trayecto in ferior entre Sotillo y el mar se construirin dos diques margina les de altura media de 3.30 mts., separados 240 mts. entre si y en el superior, por la presencia de terrenos altos por la margen izquierda, s6lo serd necesario prolongar el dique de la margen derecha con una altura media de 2.30 mts. hasta las proximidades de Tacarigua de Mamporal. -7- Para el control de las inundaciones en los valles de la margen derecha del rio Tuy, se desviard el rio San Josd sobre el rio Chico, elimingndose la confluencia del primero con el Tuy, mediante un canal de unos 300 mts. de longitud; se ampli. rd el cauce del rio Chico hasta una capacidad de 150 mts3/sOo. y se desviarl sobre el cafto Copey que descarga directamente al mar Caribe, eliminAndose asi la confluencia de los rios Chico y Guapo. Se encuentra en ejecuci6n por Administraci6n Directa del Despacho la construcci6n del dique marginal derecho del rio Tuy en el trayecto superior de las obras de canalizaci6n; y mediante contrato celebrado en fecha 9 de mayo de 1952 con la firma "Venezolana de Trabajos Pdblicos", las obras de dra- gado hidrdulico para la desviaci6n del rio Chico sobre el cafto Copey y del rio San Josd sobre el Chico (recientemente fud rea lizada la desviaci6n del rio Chico sobre el cafto Copey). Fue- ron construidos por Administraci6n Directa del Despacho, un puen te sobre el cauce de desviaci6n del rio Chico sobre el cafto Co- pey para la carretera de Rio Chico a Tacarigua de la Laguna y o- tro sobre el rio Chico para la carretera Rio Chico-El Guapo. Los estudios para el desarrollo de la regi6n de Barloven- to venlan originalmente siendo ejecutados por Administraei6n Di- recta del Despacho. En fecha 3 de marzo de 1949 se celebr6 un contrato con la firma "Ingesa" para la realizacift do algunos levantamientos topogrificos; posteriormente fueron ampliados los estudios mediante contrato celebrado con el Ingeniero Rafael Ve- gas L.6n el 30 de noviembre do 19149 co1itrato Oste que el 14 de diciembre de 1950, fu4 extendido a lin do inclufr los diversos aprovechamientos hidriulicos en la cuencb del rio Tuy y valles do Barlovento. El Sistema de Riego de los rios Cojedes y Barare, consis- te en el almacenaje por desviaci6n del rio Sarare en el embalse denominado "Majaguas" y en el almacenaje directo del rio Cojedes en el sitio "Las Palmas" con destino al riego de una superficie de 60.000 Has., producciAn de energia hidroeldctrica y control de las crecientes del rio Cojedes. La construccifn de esta obra se contempla realizar en dos etapas principales: En la primera se construirin las obras de almacenaje del rio Sarare y los canales de distribuci6n, drenaje y caminos internos para el desarrollo de una superficie pr6xima a 20.000 Has.; y en la segunda, las obras de almacenaje del rio Cojedes, la instalaci6n de la planta hidroeldctrica y las obras de ampliaci6n a 60.000 Has. de la superficie regable. Be vienen realizando asimismo los reconocimientos preliminares sobre las posibilidades de utilizaci6n de las aguas de los rios Tirgua y Camoruco para una ampliaci6n futura de la zona de riego y obte- nerse mayor producci6n de energia hidroeldctrica. Se han concluldo prActicamente los estudios de la prime- ra etapa de esta obra y se encuentran avanzados los relativos a la segunda etapa. Ellos han sido ejecutados por Administraci6n Directa del Despacho y mediante contratos de Direcci6n Tdcnica y Administrativa celebrados con la "Compafita An6nima Estudios y Construcci6nes Riego" en fechas 10 de julio de 1948 y 5 de mayo de 1950. Los proyectos y e pecificaciones de construcci6n para el tdnel de toma,.vilvulas de regulaci6n, planta hidroeldctrica -8- y demAs estructuras para el control de las extracciones de agua de la presa de almacenaje del rio Cojedes, fueron encomendadas a la firma R. J. Tipton Associated Engineers, Inc. seg-1n contra to celebrado el 21 de septiembre de 1950. En lo relativo a las instalaciones hidroeldctricas los proyectos fueron elaborados de acuerdo con la Comisi6n de Electrificaci6n de la Corporaci6n Venezolana de Fomento. Las obras de almacenaje del rio Sarare en el embalse de "Majaguas" comprende nueve presas de tierra con una altura mixi ma de 19,35 mts. y una longitud total de 8.24 kms., que crearAn un embalse de 302 millones de metros cdbicos de capacidad, inun dando una superficie de 3.900 Has. Este embalse estarl alimen- tado por un canal de 20 mts3/s. de capacidad y 2,4 Kms. de lon- gitud quo desviar& las crecientes normales del rio Sarare. La red bsica de canales de distribuci6n on las 20.000 Has. que a- proximadamento serin regadas en la primera etapa de esta obra comprende 151,3 KAs. de canales con capacidades hasta de 30 Z./s. y los caminos internos para el acceso de las tierras y transpop to de los productos, tendri una longitud de 53,3 KAs. Las obras de almacenaje del rio Cojedes se encuentra ba- jo estudio ellas consistirin en una presa de tierra de unos 60 Mts. de altura, quo creart un embalse do 700 millones de metros cdbicos aproximadamente; el cual se comunicarl por medio de un canal con el embalse Majaguas, a fin de almacenar en este dlti- mo las aguas extraidas para producci6n de energia hidroeldctri- ca durante los periodos en que el riego no fuese noceario. Las obras anexas a la prosa de almacenaje, consistirin der dique de concreto de unos 8 metros de altura pare el aliviadero de de masias, quo serl construido en una depresi6n sobre la margen i quierda; tdnel de toma do 4.27 mts. de didmetro y 670 ats. de longituA provisto on su extremo aguas arriba do una compuerta deslizante do emergencia y en su extromo aguas abajo, de 'las tres unidades do la planta hidroeldctrica y do tres vilvulas pik ra regularizar las extracciones con fines do riego y mantener on el embalse el nivel do agua provisto para controlar las are- cientes; on este dLtimo aspecto estas vilvulas o rarin autoxi- ticaments. Tanto las v&lvulas do desearga como as unidades do la planta hidroeldctrica estarin alojadas en un sala do MAqui- nas a la salida del tdnol do toma. El Sisteom do Riego do los Llanos do El Cenizo, 2a. eta- pa, comprende l almacenaje de las aguas del rio MotatAn on el sitio denominado do "Agua Viva", pare ampliar a 50.000 Has. la zona de riego do la primera etapa de este Sistema, producir ener gia hidroeldctrica mediante 3 unidades de 12.000 Ky. cads una y controlar las crecientes del rio Motatin. Las obras de almacenaje consistir&n en una presa de tie- rra de 70 metros de altura aproximadamente que almacenarA un Vo 1dmen de unoe 2.000 millones de metros cdbicos. El aliviadero de demasias seri situado en corte hacia la margen izquierda de la prosa do almacena4 y' tendri una capacidad de descarga de 700 mts3/s. (ante la conveniencia quo esta obra sea disefada con ba- se a estudios sobre modelos, se acord6 con la Facultad de Inge- nieria de la Universidad de los Andes su construcci6n y la eje- cuc16n de los estudios consiguientes). Las obras de toma con- sistirin on un tdnel de 6.oo metros de diAmetro y 300 de longi- tud, provisto en su extremo superior de compuertas de emergencia y on su extremo inferior do las tres unidades de la planta hi- droelectrica y do tres vilvulas para regularizar las extraccio- nes necesafias par& el riego y controlar las crecientes del rio -9- Motatin. Las caracteristicas de la planta hidroeldctrica han si do determinadas de acuerdo con la Comisi6n de Electrificaci6n de la Corporaci6n Venezolana de Fomento. De las diversas soluciones alternativas en cuanto al uso de las aguas en riego y energia hidroeldctrica, fu6 considerada como la mAs conveniente aquella que riega las mejores tierras de la zona y permite la instalaci6n de plantas hidroelectricas cap. ces de producir un voldmen de energia semejante al considerado por la Corporaci6n Venezolana de Fomento en sus estudios sobre la electrificaci6n de la zona Occidental del pais. Los estudios de este proyecto fueron iniciados en anas an terioreB, y a fin de intensificarlos fud celebrado en fecha 30 de agosto de 1950 un contrato de direcci6n tdcnica y administra- tiva con la "Oficina Aguerrevere". Al presente ellos se encuen- tran en una etapa avanzada y quedardn concluidos dentro de los pr6ximos 6 meses. En materia de Construcci6n de Sistemas de Riego, durante los periodos a que se refiere la presente Memoria fueron conti- nuadas las labores correspondientes en los sistemas de Taguaiguay, la. etapa (Edo. Aragua); Guataparo (Edo. Carabobo); Los Llanos de El Cenizo, la. etapa (Edo. Trujillo) y Neveri, 2a. etapa (Edo. Anzodtegui); habidndose iniciado las obras de Reacondicionamien- to del Sistema de Guanare (Edo. Portuguesa). La primera etapa del Sistema de Tagyaigua beneficia una superficie de 3.500 Has. que comprende gr parte de la parcela- c16n de Tocor6n y demAs valles de la margen izquierda del Cafto Aparo y las tierras entre el Cato Apro y el rio Aragua hasta el Lago de Valencia. El agua para el riego proviene del embalse de Taguaiguay, alimentando en forma directa por el rio Las Minas, e indirecta por los rios Turmero y Aragua, mediante un canal de desviaci6n de parte de sus crecientes. Las obras de construcc16n fueron realizadas por Administra ci6n Directa del Despacho, con excepci6n de las de toma y desvia- c16n de los rios Turmero y Aragua, que habian sido contratadas con la Compaia "Tierra". Ellas se encuentran prdcticamente con- cluidas, y al presente parte de las tierras vienen siendo culti- vadas bajo riego. Durante el periodo de Julio a Diciembre de 1948, se conti- nu6 la construcci6n de las presas de almacenaje del embalse de Taguaiguay, del canal de desviaci6n de los rios Turmero y Aragua y se iniciA la red de canales de distribuci6n. Y durante los a- fios de 1949 a 1952, se concluyeron las obras anteriores y la ca- si totalidad de la red de 115,5 Kms. de canales de distribuci6n y sus estructuras. La segunda etapa de esta obra consistird en la desviaci6n de parte de las crecientes del rio Guirico al em- balse de Taguaiguay, para ampliar hasta 8.000 Has. la zona de rie go; al presente se elaboran los proyectos de las obras del tras- vase del rio GuArico. El sistema de riego de Guatanaro consiste en el almacenaje de las aguas del rio Guataparo, para el riego de 3.000 Has. de tierras situadas al sur de la ciudad de Valencia. La prea de al- macenaje del rio Gua~paro fuA construidai durante el periodo an- terior, asi como parte del aliviadero de demasias y del canal prin - 10 - cipal. Durante el lapso de Julio a diciembre de 191+8 se conti- nu6 la construcci6n del aliviadero de demasias y del canal prin cipal- y durante los afios de 191+9 a 1952, fud concluida la cons truccl6n del aliviadero y de los 51,1+ Kms. de canales que com- prende la red de distribuci6n. Esta obra, durante los periodos de la presente Memoria, fu6 construida por Administracifn Direc ta del Despacho, habidndose celebrado en fecha 16 de julio de 1948, un contrato con la firma Cementation Company Limited para la ejecuc16n de inyecciones de cemento en la presa de almacena- je y estructuras anexas. Al presente, parte de las tierras be- neficiadas se encuentra bajo riego. El Sistema de los Llanos de El Cenizo, la. etapa, permi- te el riego de una superficie de 10.000 Has. mediante el aprove chamiento de las aguas bajas del rio MotatAn. Durante el lapso de Julio a diciembre de 1948, fu6 construida parte de las obras de toma y de la red de 91,3 Kms. de canales de distribuci6n; y durante los aflos de 191+9 a 1952, fueron concluidas estas obras, y construidos 16 Kms. de caminos internos. Su ejecuci6n, fud realizada en parte por Administraci6n Directa del Despacho, ha- biendose celebrado ademis los siguientes contratos para la cons trucci6n de canales, caminos y drenajes: el 26 de Julio de 1918, con la firma T. Sanz & Co.; el 22 de agosto de 191+8, con la Com pafta Occidental de Construcciones; el 13 de octubre de 1948, - con la Corporaci6n Venezolana de Construcciones; el 25 de marzo de 191+9, con el Ing. Christian Santos; el 31 de marzo de 1949 con la Oficina Tdcnica de Ingenieria y Arquitectura Saico, y el 10 de agosto de 1950 con la Compantia Occidental de Construccio- nes. En el sistema de riego del Neveri, se ha continuado la construcci6n del canal de desviaci6n; esta obra ha venido sien- do ejecutada mediante contratos celebrados por el Despacho con la firma "Desforestadora F. Rivero & Co." en fechas 10 de octu- bre de 1948 y 8 de abril de 191+9 y posteriormente por Administra ci6n Directa del Despacho. Ante el interes del Instituto Agrario Nacional en aprove- char las tierras del Sistema de Riego de Guanare, se procedi6 al reacondicionamiento de la obra y la construcci6n de un canal adi cional para el riego de la zona por cultivarse; al efecto cele- br6 en fecha 10 do junio de 1952 un contrato de direcci6n tdcni- ca y administrativa con la firma Kapeca. Las obras correspondien tes, han sido pricticamente concluidas. En materia de Construcc16n de Obras da Defensa-Hidriulica, la labor del Despacho comprende: Obras de Control de Inundacio- nes en la zona baja de la regi6n de Barlovento (Edo. Miranda)- de Canalizaci6n del Rio Guaire en su paso por la Capital; de Lm pieza y Encauzamiento de los rios Yaracuy y Macagua, (Edo. Yara- cuy); de Encauzamiento del rio Zulia (Edo. Zulia); do Defensas del Aio Chama (Edo. Mdrida); y de las poblaciones de Encontrados (Edo. Zulia); Ejido, Tabay y Timotes (Edo. Mdrida)y Rubio (Edo. Tdchira); San Fernando de A ure (Edo. Apure) y Tucupita (Terri- torio Federal Delta Amacuro). s - 11 - Las obras anteriores fueron emprendidas durante el perio- do de 1949 a 1952, con excepci6n de las defensas de San Fernan- do de Apure y de Tucupita, cuya construcci6n fud continuada en este periodo. Las Obras de Control de Inundaciones de la Regi6n de Bar- lovento han sido expuestas en otra parte de esta Memoria. Se rea liza por Administraci6n Directa la construcci6n del dique margi- nal derecho del rio Tuy en la parte superior del trayecto por ca nalizarse y mediante contrato celebrado con la Empresa "Venezola na de Trabajos Pdblicos" la desviaci6n del rio San Josd sobre el Chico y de este sobre el cafto Copey. Los diques marginales del rio Tuy en la parte inferior del trayecto por canalizarse han si do proyectados, dada la naturaleza anegadiza del terreno, para ser construidos mediante el empleo de dragas hidriulicas. El di que marginal derecho en construcci6n, tiene una longitud de 7 - Kms.; las obras fueron iniciadas durante el mes de marzo de 1952 y hasta la fecha se han ejecutado en un 50%. Las obras de desviaci6n del rio San Jos4 sobre el rio Chi co, las de ampliaci6n del cauce de este rio y las de su desvia- ci n sobre el cafio Copey, vienen siendo ejecutadas mediante una draga hidrdulica de la Empresa Venezolana de Trabajos Pdblicos y serin concluidas a mediados de 1953. Los puentes sobre el canal de desviaci6n del rio Chico sobre el Cafto Copey para la carrete- ra rio Chico-Tacarigua de la Laguna y sobre el rio Chico para la carretera rio Chico-El Guapo, que fueron construidos por Adminis traci6n Directa del Despacho, tienen una longitud total de 126 metros; su tramo central es removible a fin de permitir el paso de dragas hidrdulicas de dimensiones moderadas. Con el objeto de reducir los perjuicios que causan las, crecientes del rio Guaire en su paso por la Capital, el Despacho encomend6 en fecha 30 de junio de 1950 a la firma "Rivero Rodri- guez, Ingenieros", la ejecuci6n de diversas obras, quo compren- dieron: limpieza y ampliacifn del cauce del rio en el trayecto comprendido entre los puentes Mohedano y La Paz y construccifn do defensas de mfrgenes en diversos sitios de ese trayecto; obras de canalizaci6n entre 91 Estadio Olimpico do la Ciudad Universi- taria y la desembocaduka del rio Valle y obras de defensas de mir genes entre el puente de la Urbanizaci6n Las Mercedes y la desem- bocadura de la quebrada Baruta. Con objeto de emprender las obras de Canalizaci6n de los rios Guaire y Valle a lo largo de la Capital y trayectos pr6xi- mos a ella se cre6 en marzo de 1951 una Oficina dependiente de la Direccian de Obras de Riego para la ejecuc16n de los estudios, proyectos, construcci6n y conservaci6n de las obras, asi como l limpieza peri6dica de los cauces de estos rios en trayectos no canalizados y la ejecuci6n de defensas temporales en los sitios que fuesen necesarios. La construcci6n de las Obras de Canalizaci6n del rio Guai re fu4 iniciada a principios de 1952 en un trayecto de 2.600 mts. de longitud comprendido entre el puente de la Urbanizaci6n Las Mercedes y el Estadio Olimpico de la Ciudad Universitaria; ellas se vienen realizando por Administracifn Directa del Despacho en un tramo de 1.200 mts. a partir del puente Las Mercedes; y segdn - 12 - contrato celebrado el 10 de abril de 1952 con el Ing. Gustavo Ayala Garcia, en el resto del trayecto. Este contrato fud ex- tendido recientemente para prolongar los trabajos entre el Es- tadio Olimpico y la desembocadura de la quebrada Canoas, en una longitud de 840 mts. Las obras de canalizaci6n entre la desem- bocadura de la quebrada Canoas y el puente Las Mercedes queda- rin concluidas dentro de los pr6ximos meses, habiendo sido ter- minadas en parte del trayecto. Recientemente fueron iniciadas entre el puente de Las Mercedes y el Aeropuerto de La Carlota. . Las labores de Inspecci6n de las obras contratadas, fue- ron encomendadas a los Ings. Sardi y Martinez de la Plaza, se- gdn contrato celebrado el 15 de abril de 1952; y parte de los proyectos fueron contratados el 31 de mayo de 1951 al Ing. Josd Antonio Ayala D. Las fuertes lluvias sucedidas en el pais a fines de 1950 y principios de 1951 provocaron altas crecientes del rio Zulia (Edo. Zulia) y otros rios de la zona sur del Lago de Maracaibo, que ocasionaron vastas inundaciones en la regi6n y graves per- juicios a las explotaciones agropecuarias existentes. A la altura del Km. 49 del Gran Ferrocarril del Tdchira, el rio Zulia (afluente del Catatumbo) destruy6 las defensas de su margen derecha y gran parte de las aguas desbordadas engrosa- ron el caudal del rio Escalante que a su vez ocasion6 nuevas inundaciones. Ante la amenaza de un cambio de curso del rio Zu- lia, el Despacho delebr6 en fecha 21-7-51 un contrato de Adminis traci6n Delegada con la firma Venezolana de Trabajos Pdblicos pa ra contener la tendencia citada y con tal objeto fueron construl dos nuevos diques por la margen derecha del rio en el Km.'49 del ferrocarril del Tichira y otros trayectos; estas obras fueron luego continuadas por Administraci6n Directa del Despacho, habi4g dose construido un total de 13 Kms. aproximadamente del nuevo dj que marginal. El rio Chama, por destrucci&n parcial de unas defensas en las inmediaciones de la poblaci6n de El Vigia (Edo. Mdrida), ame nazaba desviarse por un cauce antiguo que descarga hacia el rio Escalante; a fin de anular esta tendencia, se construy6 mediante contrato celebrado el 17 de abril de 1952 con la Compa~la "Ruta", un muro de concreto a. traves del cauce de posible desviaci6n y trayectos inmediatos. La poblaci6n de Encontrados (Edo. Zulia), se.encontraba amenazada por la fuerte erosi6n que causaba las aguas del rio Ca tatumbo sobre su margen derecha. A fin de realizar las obras de defensa necesarias, se celebr6 en fecha 21-7-51 un contrato con la firma Venezolana de Trabajos Pdblicos para los estudios y pro yectos consiguientes y en fecha 15-6-52 con la firma "Rivero Ro- driguez, Ingenieros S.A." para la construcci6n de la obra. Estas defensas se encuentran en construcci6n y quedarin concluidas du- rante el pr6ximo periodo de aguas bajas del rio. Con el objeto de proteger la margen derecha del rio Apure en diversos trayectos pr6ximos a San Fernando de Apure y el Aero puerto de la ciudad contra la erosi6n que ocasiona las aguas del rio, el Despacho construy6 por Administraci6n Directa varios es- polones de bloques de concreto, tanto en sitios no defendidos an teriormente como en aquellos en que las defensas construidas en" - 13 - anos anteriores habian experimentado daflos, habiendo realizado ademAs obras de reparaci6n en estos dltimos. Y a fin de contro- lar la fuerte erosi6n que experimenta en la curva de la Isla El- ba, aguas arriba de la ciudad, se realiz6 un estudio detallado del rio en uha longitud de 17 Kms. para el planeamiento de cana- les de rectificaci6n del cauce. Las numerosas obstrucciones en los cauces de los rios Ya- racuy y Macagua (Edo. Yaracuy) y la ausencia de aquellos en alga nos trayectos es causa de frecuentes desbordamientos y prolonga- das inundaciones que limita el aprovechamiento de gran parte de los fdrtiles valles de estos rios. Con el objeto de reducir la frecuencia de esos desbordamientos y facilitar el drenaje de la zona, el Despacho procedi6 a ejecutar por Administraci6n Direc- ta trabajos de limpieza de los cauces de estos rios y de apertu ra de canales de encauzamiento en aquellos tramos donde el cos- to de la limpieza seria elevado y donde no existian cauces defi- nidos sino lagunas casi permanentes. Estos canales de encauza- miento, construido inicialmente de pequenas dimensiones, han ve- nido ampliAndose en forma progresiva por la acci6n misma de las aguas. Para la apertura de algunos canales y ante las dificulta des que se experimentarian en ciertas zonas para su excavaci6n, dada la naturaleza anegadiza del terreno, fud celebrado en fecha 10 de agosto de 1952 un contrato con la firma Exploraciones, Vo- laduras y Drenajes, para su apertura mediante el ampleo de explo sivos. Estos trabajos fueron iniciados en agosto de 1952, y-hasta la fecha se han realizado obras de limpieza de cauces en una lon- gitud de 45 Kms. de estos rios, y se han construfdo 10 Kms. de ca nales de encauzamiento de los cuales 5,5 Kms. corresponden al ca- nal de desviaci6n del rio Macagua sobre el Cafio Marcano. En el rio Yaracuy, vienen siendo realizados aguas arriba del sitio deno minado La Hoya; en aiios anteriores, fueron ejecutadas obras de limpieza del cauce entre este sitio y su desembocadura en el mar. En la poblaci6n de Tucupita, Territorio Federal Delta Ama curo, han sido realizadas obras de protecci6n de margen contra la erosi6n de las aguas del Cafio Manao y de mejoras de defensas cons truidas en aflos anteriores. Y en las poblaciones de Ejido, Tabay y Timotes (Edo. Mdrida) y Rubio (Edo. Tdchira) fueron construidas obras de defensa de las poblaciones contra la acc16n de rios y quebradas pr6ximas. En lo relativo a Conservaci6n de Sistemas de Riego en ope raci6n, se atendi6 durante los periodos abarcados por la presente Memoria a la conservaci6n de los Sistemas de Cimang (Edo. Sucre), Tuy-Cda (Edo. Miranda) Suata y Taguaiguay (Edo. Aragua), Guata- paro (Edo. Carabobo), Aan Carlos (Edo. Cojedes) y Llanos de El Ce nizo, la. etapa (Edo. Trujillo); habidndose experimentado un au- mento en la superficie aprovechada en las diferentes zonas de rie go. 20-12-52. PPH/lmc. Es copia: avv. '4 001 Caracs, 1492 y 100, Cludada biretor d. GbJnwt*, lwsst. D swoard. Con las in.truesaones coatmidas an @1 Nemwrav*Wm S* 1653, 4. teo *airola, do toshm 16 4.1 presente es., eumple eon pr..evtar a eantiamaoida un re- Suwoa 4 U.s aetividedas 4. oata RIr"catdA dumate *1 paaidEI e.aela4. en is cited* uii.&oFSmeia #IVIBIQN UE E2lNROEMGIL La Divioi6a e fWizliogia am"da 4ct asmer e0n laS uod;eiee 4e le ris y Ias observaoatnes de las At- teranta estacloaee piuviametwisaa, .vapewiastr1.eu, etc. prcedM4 al Jan talaoimdsa d 2aO Stgalatea amevas t.a- P~aiegdttason Ume asiose do arnssta Tom*** XT144" y USSIUM& Vlaviegrdtie. em. le& Men Ua garlsa, Qa.- mare y Taempide. So pred i a a emaetrumom 4a wejas prateetws en las estaelema1 pluviotatI*.s 4. abrovoaa. Sante Demimq., . Altautra y 3d tlsen a bamr u hidaodgi del Rie Unaere; a hacer ma .stsdti m 4ed 4.1 del wAm$*at Rio LinM (stade Sall&). a ' d1& a asde 4- 1 gaet ad.. aim, medle y d. I& ew.*1st. wA6$.a dol Ro Cikeos a ob- tener exurvas do duwa*La d geotes, paw& ]Ae Ri.. Cojedes y Saar#, durate l purSed. 4 .bsvrvaeida a 4=.eto=Lr leav eviates mximas probablo cow fr*,omeaia de una vis 100 050a en varies sitti* 4*1 Ri. Bseslaat. a hacer gr I- *am de lea .r..ioatea s eoo Sdms deamt. .I pertod. do ob- Osvrvaelda d.l Rio Re&O"61 a Obtemer aurva. 4. la.vao Me*- mas para El Literal (period. 19S..496); a detomatmw las oroaJsates M sm& pebabls. en varlem ltJee 4.1 Rio maitv. So .mmtAaUa I& geepaaeoda do La pI bUms Od L Re- gistre Plaviemstarie L,9I4,19pE -2- )JIsIog DI QEOLOQIA Aeti44dadee Duweato .1 Afto 4. 1957. Sista RIO 29ris. Eu . alt1 do 1957 La Divisi4a tuvO a su cargo parte del estudlO y Oentrol del problema do la. subpreuida que ne prseate desp4u do la construeoida do Ia Pro.a del Rio Gurie. Part. primordia'l par el allvio do la nubprwSida fu4 el iset y Ia esentruqaida t. 101 pees d. allvie, do al.- redodor d. 15 metr do profunidad, ten Im total do 1349 etROS de perf raolA& ProwlgwL5 -I& euteelidu do gritIces, planes, powfilee, etc., dowW e aewmtra do inara detaada Ia hioteria y .l desarrelle del tunomeao an rftrvacia. l atS 4. 1957 . 0j**Ut* % Duranto 1& 0s1 t&aI-a do 1** trabaJo@ uosearies pera le prOzO *e dtfinitI Svw, Los evale so d..eriben a eatiauacida. d.ti. 4. Pree uwaa .3 aLe 3ooweIi. Para 4.te.uiaw 1.. oadieieaLs A. ftadainoda par. me1p.... 4 oacreto .s ela. awterea ua total do 1376 metres 40 pefoaaia sen xAquiua. Nsta zplor.MMda t"m &mU*ada I& Ia Ozeavacisa do 9 m.- las cou un total d 442 metro. Sitto de Atauisa .& A. -e..An . S* ejemtare trwo perforaciones ew a tota d 4 metros IMM mAqu&A= pass dat exwutar *I asposor A. la capa t. Irava arenosa y las eandicimos. do fumiacida 4. l~a ataguf a. 1Sitip dl C m1 eI &* Dearesida Z9osMS-TaUaido. para 1& .cavasida IM canal COWW tade ma dprwosif BOeOd- Tucupid. se ejecutarea 4 perforaelnes a lo large dl ejo prop"atestea UK total d 4.5 intros prterads. Juto #A Presa wmra .1 Rio T cwijdo. ]1 *Iti do proe Na4 .otuiiade aetlaxto portowaeidn ems mdeviaa, pawterimdea. UK total do 1858 vimtrom, y I&mimatada em. 1. ejemuci&a - do 134 metro. 4. t4aoloe pdlto.. SAtI* ao ls RiJAmm 4. CfetUe Ia M " aeis Muwsaido. Parm la sorn 4. diqaws do oltww a to large do la Depresida Tumpido so .j*OutexMa %a total to 248 metres As pertoraeia. Sitios auwa Wwdetapm.s 4.1 Ii. timi4. S. elecsioa rem warJas sos pate obtanr 1** material., 4. seas twaeids do Ia pros. Les watudie se odlorua 138 stres do per- xorac a oeon niquiua, 2$) mtaw* " tesa .msaiawas a mow 7 392 As SM *4in14d a um. - Ratudit.. Getistzes em UeS PW'EatamI!I 4.1 Ri. IBoO4IS6 Em Ia smema Slogid para obtener Ie agregadz pars emoroeto so bAue am estudie g.e ni.. medisate pewfiles quo aleamsa- VMS us totax do 1 lalmrwres. 4 de& VJo Estate Wtalia, Come Celabop rwelia eom ol natitate Zasia al d. Obxmo SemI tare, duram- to 44 a" 4o 1957 so deate6 al stIo 4 Barre Xg*W en *1 ai Pueblo Viejo 61 pmromal y eaquiarls MSeearios para I^ ejemoida de lea estudien pax* Ia tuiaoiuA as Ia re$& y demAs emtiAm*twws pr ser estuidas e didbe **At*, come toant. do mbasteeomtm"t d. agum para diveras poblaolemes dol Distrte elivar 4.1 Estae uuia. Durante esto Aoh so vomUsama Seat Ia totaltdad do ls trabajos 4e explora- Oin rvqe*ix4s, pam Ies emales t" meemmiS 4e4e0tar en 00 15aPs 63 powtwse&6mAs a 4d.smas 400 If total 4e 1397 metie' paiferates, 7* tese. 4. 000870 .e r total do 184 mwtwel y S8 pstros A* triaewemas econvada em trietor, ' , tits. del ao do 1957 so proweAd a elaborar @1 Iw- terso .euepemdteu*. a estee estudiss. -iam 8... to ?sawto 9WbHl2.. Em lea estudie. y I& .eastwwoiM do IS obres paea *1 Dieqe Se do Puoste eab.U , esta DiviAidA ea eolaborm"idA eon U ftreeida Am Puertos y Aoropmwtos A. este MhagstoxrS, mmbmo ma g*.- logo y *e pe wtev gow trabajeem w Ia ins"oCiAm do IAs laogto*ems Iuoeetea.. oeimabo, mtroel do eme- aret*, ioe y eanstASuIo A &0 pino de ag poam ebast.- ciu oato 4. ia. ebr.. oemtsa1 do Zes voaduras riutim- de lint se. y ageremitas roqueri*e. 318 etviAd5L. Cams es oo.taabre, osta Dividae pA...4 la 0 baoidu tdA&oe do quo d1spsem, a -aammo.r 4 eousvmaate a 4Ivewsms Dl oestonem do et. Despacbe 7 0tros orgniwi ss Oteialos Al eteote so holoee visitas do iaspoeeSia a US sigaiwnt.. cl0e., Tulel de La Cebroam (Autepiata valL.s de Armua) & Auteita Caramws.-a Guaira, dealigeanlntem *ocaWdto. d ia MIudad to 04a4pa4..o.m. 1 E. tae TAAiwa; Rio Armues (limit ftreteriso Celembe.pV.. lmem; Cenal do 3seags 4*1 BAD vauaamax=s, ComSdo *s0t4e Baer.; y as etimm6 .1 asemmInew 4. Ia .zplmwasida dJ1 subasele paw&s s .taretwes ete.pintieteS *l SI* tes de al..tu"tieftedm Eel 4SwemC. Actividades Durante .l Afc do 1958 Sistema Rio %ugrico. Esta Divisl4n coxtinu6 con los estudios y trabajos par& .1 control de I& subpresi&n en la Preos del Rio GuAriae. A tal efecto, durante el lapse deeds el 23 do emer. hasta is fecha, so hinearon uis do 40 piou6.ietros. El total do metres lineales de poso coastru{dos ascien- do a la cantidad de 240. Par& esta fecha as enouentra ter- winado tawbida el trabaje do empotramiento do eutos pomos &l ealector do descarga. SisteIMa Boconj-Trgcuide. Durants al ajo so contixu4 con la exploraci6n pr.gramada, advirtiendo que con el tra- bajo ejecutade so consideraron teru~mados lc estudies para ets sistema do riego. A centianaoidn so describe la ex- plorseidn desarrollada. SitIo do Proe narn .1 Rio Igugaido. Se coacluyeren lea estudios pan I& ejeeunain do 397 metros do perforaci6n ain 3Aquina. es le C192re en Ig boeida Stto 4. loa Dift TuDmeide. So enelauyerou lea estudies con Is *Jeomeida do 884 metree do pertbracida con uiquina, 1069 en taladro. a mano y 818 metras lineales do trimakeras oortadas con traetor. ?dnel de De.viasidzi del Jug TucUid. Se termiu& la exploraeda 4.1 eje del t*mel propueste par& I& deeviasida del rio, con 225 metres do perferaclAx con vdquina. Sti0s earn Zonas 42 PrStam 4.1 Rio TmU2a2d. Para I la obra se ojecut6 el signionte programsa do &xplorael6as 98 metros do poroacia con uMani&a 540 metros do taladres a mane 116 metres to tosas exoevadas a mae. $itio ear Cantersa. So exploraren le siti.s La Avis- pa y Puent* Tojera, sabos a 0 Una. 4. Guanare per la earre- tern que conduce a Bisecumy, dead. se ejeetarea 215 metres de perforaeida con mAquina. En otra sitIe deuemiaado La Mesa del Zorre, ubioade a 5 kna. d Diaacuy per Ia earrotera que eamoa. a Doeem, a ojeoutaron 221 metro* do perfeaswi4m en uAquiua. Imbalac 'Las ilni agaws. Qea *I objeto 4. doetallar mis in iarofmaeida original hecha darmnt, *1 aAe As 1951 y eJe.um- tar Us. eatudies corrspendioa4t. a nevas var'iaxt*s e l- 6mes do lea diqae. quo formam 1 sistam, esta Divielsa ha aoesentrade durant *ate aft arem pwte do wa .iVIVOS en eata ebra, tomiendo as tat adoda O para *1 anownnt. sa esementra ya INeoSmemna me swwselda. Los estudios roaliuades en est* vAo ae pueden pormeno- risar asia Explorocip de Las Preaq" 8 X 9. Para estimar las con- diciones de fundaci6n se ejccutaren 5 perforaciones con quina con un total perforado do 100 metros; ademas so ampliA I& exploracida con 24 taladres a mano con un total perfora- do do 144 metros. El informe final con los reaultados do la exploracidn fuS entregado con fecha 10 de novieobre do 1958. Ewpleraci6n d. I& Presa 7 y Aliviadexo. La explore- ai& do los sitiom para ambas estructuras so realis6 simul- tuOameAte, con el sigiout. program& do outudiosu Presa 7 - 12 perforaciones con 213 metros perforades, 5 taladros a wano con 29 metres, 3 :osas excavadas a muano con 10 metros. Aliviadero - 3 perforaciones con miquina con 57 metros perforados, 4 foa&s exavadas a man* con 7 metres. El inform, final con lea resultados fSU entregade on techa 24 do noviembre do 1958. Ehracifa do las Variates ara la Prsa 1, 3 y 3, Los sities propuestos fueron estudiados con 17 perforacie- nos con nAquina ,on 336 metros perforados y 51 taladros a mano con unztotal de 277 metres. El informefinal do esta exploraci6n fuS entregado con fackia 16 do diciembre do 1958% ELXlorFAidm do is Pres No, 4. E1 sitie proyeotado pa- ra I& coustruceida de esta estructwra fu6 explored* con 13 perforacionee con uAquina, perferindose an total do 233 metros. El informe final wespecto a las eondictouos de fun-- dao6x osti actualmente en preparaoida. Canal do Derivaeidu par. 91 Rio SaraeZ. Pue estudiado on una lergitud de 4 ka. con 56 taladroa a ama, perforda- dose un total d* 186 metres. El informs final eats tambiSa en preparael6a. Toma .1 Ri. Berate pe el Elieal.. Las aga!Mo ag. E4 sitio para fundar et& obra .st todavia em estudis, poro hasta ahora se han perforado un tota do 188 metros eon mdquina. 2onas 4o Pe tern. urn's 3am Qbras 4. 'Las NiaJeanus. Para selecciena" la smoxm aptas peas eMtRxr l" mat rialos acesarioe per W. hAA*rem las .oaas em 4. oosstwmostod feesw .xoavadas a ame um total do .2" metro*. Lee ostudiam para material pmabwl. toemw* a-IUdos aem 48 metve. to -6- pertoraedn -cn adquina. Sito 303 C.aatjEa. Los *studios fraroa concentrados an el .1ti deuaminado El Limna, dgade se han hoeao 152 metro* d. perforaei6a a0m mquina. Auz as coatirzia la e.ploracida. Sistema Quanayito - tado Guroige. En al me de sep- tiembre del presents aflo, se Inioid el estudio necesarit pa- ra los proyeatos do aliviadero, tiael y materiales do cons- trucoida para la toma correspondieates a este sistema. E;- ta exploraci6a so ejecut6 por meio do 14 fasas excavadas a mano y 3 taladres a miq'piaa con un total do 35,25 metros. La etaructura para allviadere s. estudi4 medimate 6 perferacones a miquina, la cuales dievon un total de 78 metres perforados. En el ttinel para I& toma de Ia obra, los estudios ae completaron cou -k perforaciones a mdquiaa, adIc~ioales a las efectuadas en los aos de 1947-1948 y actua)tente 8. eat& colaborando el informe flusl. SW4inag dg Aray - Estado 8Acre. En el mes do soview- bre de 1958 se traslado un equijo d. perforw.-da para las Salinas do Arays., ven el objeto d. estudiar las fundaciones par& ls tres aliviad.res qas as eanstrurfan do immediato on Ias *bras d. defensa do las salumsa. Los sities Moran y Jagney s. estudiaron cads uw sea =ta pewftou'e6i d 16 metres do profundiM4 Antusalmate so estudia en detalle el sit&o do Palo See. y ya s. baa * efeetuad. 3 pertoraoianes de 9 metre. do profandiad eada laa. CarAliagid dgl Ri. QuSAro. Debido a la isesidad 4 to cantinuar la omnalisacida del $R Guaira on al tram& omprendIdo entzs el Pueate La Califorsia y el Puente Canri- mare, eats Didvida pr.,d16 a efotumar un perfil del sub- soolo en eate tramo, ion la ayuia do 92 taladros a mane *A up total do 169 metres perftrades. AMuds ?4maies a 0 twa. Reme~a4.aaas 0ft @1.1. La Divisida d. Geologia en *1 lapso cofsiderae4o ha Irestado ayuda tionias a titastes 4Wpandeaelas ofiI ales, Wesaltando principalawate 34* sigaiet.s trabajoss IAtituto facisa*l g4. S&Itaria.. Correwpoandt a esta Divisia .fectuar i4 trmba4.s g.o146gios y do explow raoida del aubsu*l ea .l Riqa* der PuwbJL VAe*J; a el lap- scooiderado se ef.otud e- t'*bajo do gabInet. para I& *labeumaia del Infierms O's'.m4amaaente, .O ols fud ONvIaMA 1 K@S. -7- PRU2cift 49 Puertes Y AaCmusrtea. Be elabor4 el in- ferne eobre OPoses Finales pars .1 Abastecinjonto d Agua Potable on *I Dique Sea* d. Pukerto Cabslleu Aden.s do estee trabajoa so etectuarn diversas ins- p*oioues e a g19an obrao y sates do trabajo del Mizdst.- rio, tales el Tdnel do La Cabrera, el Hotel Humboldt, y al derrumbe en la Autopiata Caramaa-wLa Guaima. UrIj.SIOX DE L5TVDXQ$ Y PMOYECT0S Abril -. 1957 a Mnerl ". 1298. Estudie do Lee agr*gvdos para cAenreto para la Presa del Aio B3cen6 . Estudio do lo. suelos pars Ia Presa do Taumpid. . Froyeate para Is Pies& Tacupido y *bras anexas, Fstado Pertuguesa. Proyete d. la Proe Bocewi, Estade Barinas. ,.entry &1 2 gy st. Pre#e studls topogrAf ic para reotificacn del Rfe Tuy s Estudies preLuinares del Me( Palna , Estade *ulis. tudl deI& canaeitadina y del samapede del fond* del Rio Valle entre I& Esoela Militar y *I Ripedreme La Ria- ttutdio y preyecto emplementarie para La esamalisaaid de I** Ries Chiquito, Grande y Caracas en la Clonia Vaaciof mal Los Caraeas. Estudie y proyeote do reotifieaeida y mejoramieate del Rio Cejo on el Departament. Vargas ow nas, longitud a do 4. 1300 w. a partir d su dsebocadura on *I mar. RevIsIda d.l proyeato y proparaic4 d Is Empeaitiea- olones y Plaaos para la licitasidA del aalse Majaguas, Estado Portuguosa. Antoproyecto e la red do enal.. do riego del Sistema XaJagues y cosienso del proyeate dtirAitive. Estudies topogrdfiues, p tepray00to y replantee do lea canal** do a AnetAMSIdA weroedwwtoz to lea Rio* Sawaro y co- Jedes bacis 4* embiaso d MaWja , n el Etade Portagaes. $studio* agr.-.atdmissiees, hbdA&ulce. y eatrueturales rolativos &Iaaseproyeete do U* ptr0a, Obras do toe y all- viadro doloombals 4. Gudmapat. sobra *L R0 ftitao*, M el fatd. m'rie.. / *1 1ZyIto y cilcluU 4dl Moev f91rne As Tecerda dX Sle- t 4a . .* Rogo d. Taiuaggay, Etd A* A.. v'royecto para La Direcoien do Puertos y Aeropuertos, del .mbaulamiento de la quebrada Las Pailas para las obras do ampliacida del Aeropuert. de Maiquotfa, Dietrito Federal. . Aateproyeato del nuevo aliviadero para Ia Presa Las Pal- ma, en la segunda etapa del proyecto Cojedes, Estado Portu,- guesa. v Ratudios agrol6gicos de la sona oamprendida entre lee Rios Chirgua y 'fimnados, hey del Rio Portuguesa, Estaeos Gu1r oo y Cojedes. /Revisidn del proyeste del Sistema de. Riego El Cenizo. CA.lculo de la superficis regable con el Rio Carinionae, Setado Sucre, tomando on omwnta el abastecimiento do la Isla de Nawgarita; del Rio Santa Domingo, Estado Barinas; del Rio Neveri, Estado Anzoltogui. Cdlcula do I& superficie regable con el Rio Santo Do- mingo considerando tres CastOs diferentes. Livantamiento aero-fotogrMfico te la cona entre Agua Blanca y Rio Camoruco, Estado Portuguesa., Leantamiento topogrdfico de la Colonia Guayabita. Exploraciones varias: Colonia Yuma,;. Zena do Riega do El Paural e Ipare on .1 Estada Gufriso; estudie y proyeoto do Canalizacida del Rio Valle entre La ALL-wonada y Ia Presa La Mariposa, Distrito rederal. DIVISION DE CONSTRUCCION En el lapso aomprandido desdo el 23 de diciembre do 1!57 hasta l1 23 do euero do 1958 se tormineren los contra- tos de constraccin a cargo do las compadaas Carril, a un coste de Bs. 278.426,72, e Ingenir*e Industriales, S. A., a un coste do Be. 526.966,69, y des. el 23 do enero en adelante so iniciaron los trabajos oiguientes: a) Canalisacia y oenatruoci6a 4.1 sempeado do fando del Rio Vall. entre los terreaes de Ia Eseuela Militar y *I - Jip6drom. La Rizicanada on una *xtesnidn aprezinwmaa do 1800 metroe, trabajes. quo ftuer ifiohAd el 21 6o abrAl del .A. on curso y quo deberdn, estar coaclutd.e a mA tardar el 21 de abril do 1959, a un o** d B. 2.483.008,oo. b) Canau=saihA do lea Rioe Chiquito Gra&de y Care.. cam en Ia Colonia Tao ional Les Carae, trabaje. inliados el 15 de abril del oerrioute a*. y quo deber&n estar oon- cluidos- el 15 de tebrero do 19S9, a us casto do Da* 3,565.952... e) Roctfficaei6a y mejoramiento del Rio San JUdiAn en el Departamento Vargae en una langitud aproximada de 12W) metres a partir d. su desembocadura en el mar, a un costo d- Bu- 5.790,616,oo, trabajob que se inrciaran el 12 do diclem- bre del corriente mIlo y quo deber&n estar conaluidos el 30 do jundo do 1959. v d) Defensas de las Salinan de Araya en el Estado :u- cr* que comprenden la construeoelA do leo Diques "Los Pales sanos", "tl Jaguey74 y *Mordin; .1os Canales D, Fl, F2 y G; trabajou iniciadoo el 11 de octubre do 1957 y que deber"n entar Conoluldes *1 15 do marse do 1959, a un casto do Bs. 4.497.039,17. / e) Construcci6 del Emba1.e Majagua* en .1 Estado Per- tuguesa, habi6adose iniciado lea trabajos el 24 do septisa- bra del preenite &iA, a ux. oosto do Be. 12.680.146,65 y quo deberin estar concluldos *1 24 de enere do 1961. f) Mantolmi ento per adwniaitraoi4u dLreota de I*& Cauges do les Mos Yaracuy y Xaaagua, LEtado Tar#aouy. g) Manatuimient* do la Pros& del Gurico, Eutado Gudrico. h) lnrpeacqln do la coaustrucaloa do la rvd do canalo. d. riego y drenaje del Sistema Guirico. i) Mantenuaieato de las defeneas de Barlovento, Bajo Thy, Estado Miranda, J) Inspeooi4n do los trabajos de conetruoci&n del Embalso MaJokuas. Dies y Tedoraoi4n, Armande Miohelan~gli, Director. COSa. 21nagBga NUIBMIIM p2Agfi0R12ULICS Oxwd ZEMALI2ha M IUhA - ASB LA30fl5 RAL! U3AI RDU*N IL 10 DR 1.956 VIraMto el lapse a qus so rofiero la presents Iomoria la la- bor del 3espasho em Natoria is Obras L1drdulioas, d en Sintesis I sioato s han oestluade los *studios para el alamaonamiento do las aguas he les ries falbar, Apfa, Linda, loau y Cachiri, quo as do dioarda a obvas to irrigaelda y abastooiziento urbano do la. regi6n o.ets del ago is Marasibo. So inisiaroa los lovaatanientos topogrfios, estudios gool6- gioos y anseproyeote en los rio looond, Uaaparro y Tuoupido para el aprovoeosmiato de s uoeneas eon fines do regodio y producoidn do onrgia hidrooldetrioae. In satoria do N1drologla, so continud la nedioida sistentica do diversos rios, sat coso d la lluvias oaeurridas on diversas pa; to@ del pais, Instaldadoos nuovas estaoiones hidroldgicas y pluvio- adtricaa. Se oomolujd .la inprosida do la publioaoidn del glegistro Fluviondtri"s 1.940-1.9540 ordonada por el Despacho y se ha dado *. aienso a la preparaoida do la quo contentri loo datoo do loo afloe 1.954-1.956. 4Onform al Progrma o Contruo.6ia do gistemas do liego, so oaaoluyd la. Prosa del Rio huArico, ubloada on la inzediaciones do la ciudad d. Galabose, Istado Gudriao. Ia ejsueOlda do la obra so coensad do asuordo aon l Decreto NI 79 del 6 do fobroro d 1.954 ean la ereacidn do la Oficina del listema do liego del aie hklrloo y fud inalaurada por el oiudada- o Prlsidente do la Repdblisa, lenoral do Brigada Marcos ldres JI- adues, el ifa 19 to Dielebre do 1.956. 11 aosto bisico do la Pro- *a, izeluymado la fma y el Aliviadero, Nud is h 178.840.000.oo. Oa la seatrueolda is esta Prwsa, quo almacona 1.840 aillones do metros odbises do agua, so inoorporan 110.000 as. a la produs- aida agro-peouaria del pads. as sawsteriatleas rolativas a Ua obrS son las siguienteso rtLongi$tAs 14 Is. 3uste )1buay: 5,5 3. AUi M&xMS as. VelXM r6 ll'"Gi sa UOem,& 12.100.000 3 Ve1wea 4.1 earaasiutoa 500.000 35 10mitui del verwIer 132,50 s. Altrs d soupeortais 5,40 s. 3eazga binems 4.100 U3/m. Vo1ue to ozoavaiu 3.900.000 5 Voluma de eoasrato 100.000 3 Altuan A* s forms 29 a. Isagitl 4 loa eeAsuotos 138 a. 31bostz 4. Ues OOn41tme 63a. DtbMtr. 4. las tua.riaa to earo& 4,40 a. Ame* Malanal it Sallas 17 a. Altus 4.1 a"Al do SalUas 5,40 a. )..earga minima 145 u3/s. vol to ozoavaoid 151.000 23 Velumes a snoaretos 34.770 u3 e oe.aluyer0u la. obras o Caalisasida y Construooidn del 5apeo do fis. W1 Ife Val@ on @I sootor eonprondie entre ol Peate do U& EaaiealldaA y l .oaa d lee @uartoles d la Zuoue- la Elitar, an uaa lou4ta 4. 2.654 mstros. Los trabajos reali- sales ..irenta Uas siguioat. esatGiales d oara: eferstaida, 263.576 M2.1 Rxzavaida, 416.440 13.1 RxtonR14 to y ca0o.etaida du STierra, 189.925,5 K3. Gmerst. on los sam- peatos y bermas del rio, 4.300,09 V3.; Rabafrado para oonereto, 7.411,78 X2.; fleaewida y ovieaatbe do rebouo nettlioo par& el oozerete, 2.765 Kg.; @oleaoidu do gavieaes metlIoos, 4.253,65 3. y Revestianlato do taludes eon piedra junteta, 1392,5 12., eon im eat* total is 01100 MILONS TEMIMNM06 DZNOIBIRTh1IL SETr- @21Mt A~tt Y U 30YI=TAM 0011 NOTWU I U1 CTIXOS Aai aitmo, so did iniei. a los trobajos do construooidn 4.# move gao y W*1 saapoe," - toado del Rio Valle on 41 sector co& PrISMA& eatwe .01 PWte 4A la Na. UalIUAM y lo t1dibe do 1& @lwa4d Iaivrsitaria. hk .1 get"* Apsie so IE oems* aodaAte sontrato eona 1s V MesOaIaa do brabales Pblisesm 6.4. (Tetrap), a la construsidn por *I sisteaa to dftasW4* &a les eazalom pilotem pars la rectificacOidn del Ua Apu m la imeo4ao" e 4* Baa Peraaio, habidnAdose ros- liado uramte l perf.4* W 7% 4.1 total t. las obras. fuabiEn, nL ate eutrate oem %.ateavadeoa, .A., se Laeiaron los trabajos do 6AmaslaeILa 4A" Ife s darseais ea I feloaua Vaocional to Los car""as so .emlauam aleo& Ues trw.ajov do Oeiaorraoi6a y 14ejoram as las Obta as aa isasida realtsaas vu 1.n Rion Guaire y Valle Y 4* las 41 " iae Magimal 1ews*h dl Me fU7 en la legida do iarleovate t 4*1etao Strana. I/eie.- .urante *2 lase a. quo as reofire la prwvente Mowri Ia labor del Deapaoho en materia de Astadow de Obras Lidriulicam fud en eU3- teXi in *eiint*; o* al.reieron loo ectuams definltivoo parael almasnaziwoto do las aduas ds lo rfos kasma y Apdn (Siotema ilmx6-Ap.4r, Betado Zulia)s con dsstino al riego do jgran parte do las tieroa *omprendl- das vntre esbos rfoa, desde Is carretera Aaracatbo-Mllabques haota *1 Lago -.. Marecaibo; y se oontinuaron lea estudios proliminares par& *I aprovechazi onto ce lea rim Ouasare, SeUy y Ceohiri (Rio Li*6n). Ea- toe estudlos so han venido realiawde por Admixnstraai&n Aroota dcl Despacho. ,, coreluyeroA los estudios proliminares para *1 control de loS desborl nsaertos do loo riom Sulia-Catatunbo, Y-scalante y Chaa, para proteger do la inundoelones gran parte de la vasta extensids 4. tIe- rtas altuadas entre La&I o 4d Marwaibo y I& carretsr Paiamericana y comprendidi untre lee rifo Zulla-Cataumbo y Chma. ho conoluyd la elaboreida do Io planos de las *bran do aluao*- na"iento del rio 2aurie en Calaboso y on.5 contrate colebrado con la firma rIngonieria lidriulioas, s realm4 la aoastrueoidA y *studio do un modelo a eco5a reduoida do lao obras' de too& y del aliviadero do .a probe con *I objeto do verifioar *xperixentsalmnto mu ftunIonamzlt- tci bi driulIco. .6n materim do HI4rologIa so oontinuW la modioida setistdtica do los aautsles a* diversos rioo y do las lluvias ocurridas en divercas partes del pals, habidiose *onoluIdo la revia6id y ordnencidn do lom datoo sobre Jos caudales de vAs de 47 rios obtenidos durmnte el laps* 1.940-i.954p los cualee sorin maeris do uaa publicacida ordmnada por LOnitull 14 Km. Ssite llb|es 3,55 a. Altwa SmiIma 30 a. TelmLa rola san tiermas 12.100.000 Volea del eareealm toe 500.000 U hsugita tel verteteou 132,50 u. Alm to souprertaaa 5,40 . 3eaeaga' abizmas 4.100 U3/8 vol ise eszavaida 3.900.000 Tol As saeeretoa 100.000 U3 Altram ft las torze 1 29 s. - GOataA ls *wAuatus 13 a. 21*mtrv do lee eonmast"Sa 6 a. DINStr L las tabertaa "a "s1 4,40 a. AAMh "I1 $aal to 5al14*s 17 a. Altur dL] Camal as galiaj 5,40 a. 3oeearm, ajmat 1.45 N3/s. Velmm to OZeavaail 151.000 23 Vlua as eaftet.: 34.770 B. eamlvyerea lam Obras do Oalisaida y OonstruooiOn del 5ompeae d. teat "I If Vaxis en *I sestor soaprontide entre ol fatte La & aeisi lt y la sam to lee aarteles do I& lucu- I& XWMlar, e sa=a lagftd to 2.654 not"*. Los trabajos reali- SaOS e Wremdaa las sivuieas esatIda es do obrat DefsrstaIda, U3.576 R2.1 Szoavaaida, 416.440 3.g Xxtenti to y Coupasleoida iv tioris, 189.925,5 M3.1 Goarst. on los sax- psaom y boruae del rfe, 4.300,09 M3.1 fatefrado para oonareto, 7.411,78 e.; Beleessida y sm.aistre is refuerse aettlloo parm *I ooa#zete, 2M.765 &g.; 0le9 sa00 & is gavitoas ustilioos, 4.253,65 E. y Rov..tmaenlte to taludas son piodma juntosta, 13.592,5 K2., ea sa eseu toiai e oRO Exnam S !uSOimim sImmISImT3 KLn 83T3- GIMMS0 "=2ZEA I IRA I Ow NGITBB M U 5708 --- (Ib 9.315.731091). Ast aimm., so US6 Weise a les twab.jos At eamatruocidn 4.1 awo sawe y .l sea..4 4e tosA. 4.2 i. Talle *n &1 se tor Cox p4a4. eaSt. .1 POeWto a I& IM4aMIa y las zatadiom at Is @01ad Viversitarw. Ik ol .Stae Ape. "414 awrs. aIato ooatrats tou la Yj seolama do tua'boJe adab-.of, 6.L. (Vetrap), a la astruestida por *I vstemam 4. b , t lam oaaal piloto ymsa la reotifloaidn d*I Us. AV=* m 2** Immias = 4. Baa Poaanado, habl6Aoeo r*a- USaAO hurmt el p4rfe. s 70 w. twtsl 4. las etan. Taubiin, maas nts trsato am U wavadera, S.A., ** aioitaro loo trabajo is I.ma .a " ahf e Samm e La folamia 1aa&eGiaal to Los carassa. he emstimawme a4mmh leo tramabes 4. Oeowevaolda j Msjorns " las Ow is 4 A mw.ma aias m s Rios Ouaie y Tall* y As .a. Sbm 41 Diveo binal beroeaa &1 Ite tvr I la tegida 44 a. 3~r1~gat 4. ht4 Mrada