Rural electrification cooperatives

Audit report covers the period 8/31/68-10/31/70 and is based on document review, and discussions with project officials. As of 9/30/70, $1,034,911 of the $1.1 million loan has been committed or disbursed. Financial support for the project from A.I.D. and the Republic of the Philippines (RP) is considered inadequate due to inflation and devaluation of the RP peso, and to added costs derived from closer defining of project requirements. Although the project was revised to incorporate these additional costs, there remains a shortfall of $227,634 and 905,481 RP pesos, which is expected to be covered by A.I.D., the Development Bank of the Philippines, and the National Electrification Administration. Possible project delays caused by residents" refusal to permit coconut trees to be cut down is being handled by personal persuasion, exercising the right of eminent domain to condemn land, and diverting lines where necessary.