China - Dalian Port Project

Document of The World Bank FOR OmCLAL USE ONLY Report No. 13775 PROJECT COMPLETION REPORT CHINA DALIAN PORT PROJECT (LOAN 2907-CHA/CREDIT 1875-CHA) DECEKBER 9, 1994 Transport Operations Division Country Department II East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as of April 1994) Currency Name = Renminbi Currency Unit = Yuan (Y) $1.00 = Y 8.7 $0.115 = Y 1.00 $114,943 = Y 1,000,000 FISCAL YEAR January 1 - December 31 MEASUREMENT EQUIVALENTS Metric System British/US system 1 meter (m) = 3.281 feet I square meter (m2) = 10.764 square feet 1 cubic meter (m3) = 35.315 cubic feet 1 kilometer (km) = 0.621 mile 1 ton-km = 0.621 ton-mile i ton = 2,208 pounds PRINCIPAL ABBREVIATIONS AND ACRONYMS USED DPA - Dalian Port Authority ERR - Economic Rate of Return GOC - Government of China ICB - International Competitive Bidding MOC - Ministry of Communications MOF - Ministry of Finance MOR - Ministry of Railways REIRR - Reevaluated Economic Rate of Return SAR - Staff Appraisal Report SEZ - Special Economic Zone SPC - State Planning Commission  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation December 9, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on China Dalian Port Project (Loan 2907-CHAlCredit 1875-CHA) Attached is the Project Completion Report on China - Dalian Port Project (Loan 2907- CHA/Credit 1875-CHA) prepared by East Asia and Pacific Regional Office with Part H contributed by the Borrower. The US$71 million Loan and US$25 million Credit were approved in February 1984, and closed on December 31, 1993, on schedule. US$750,000 were canceled. Dalian Port, the second largest port in China serves the northeast provinces of the country and part of Inner Mongolia. The port was congested and operations hampered by the lack of modern equipment. The project had as main objectives to increase port capacity by construction of container berths; to facilitate technology transfer in master planning, financial planning and control, and in research and design; and address the training needs of port operators, maintenance staff and managers. The PCR, which is satisfactory, contains an adequate description of project processing, execution and results. Changes were introduced in project items during execution. Both the Borrower and the Bank showed the necessary flexibility. Physical works were satisfactorily completed, except for a rail link between the new container terminals and the main rail network. Its completion is delayed by the lack of coordination between different government agencies having different priorities and investment programs. This issue was underestimated at appraisal. The total cost of the project was lower than projected and the reestimated rate of return higher. Except for the non- completion of the railway link, all covenants were complied with. The relatively modest institutional objectives of the project were reached. Extensive training was carried out, reaching twice as many staff as planned. Finances of Dalian Port are sound, but the trend is not favorable, operating costs being high and the presentation of the revenue account unclear. The outcome of the project is rated as satisfactory, its institutional development as modest and its sustainability of its benefits as likely. The project may be audited together with the Tian Jin Port Project (Ln 2689-CHA) and the Huang Pu Port Project (Loan 2877-CHA) after they are completed. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONLY PROJECT COMDPLETION REPORT CHINA DALIAN PORT PROJECT (LOAN 2907-CHA/CREDIT 1875-CHA) CONTENTS Preface ..............................................i Evaluation Summary ..........................................ii PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE ...............1 Project Identity ............................................ 1 Background .......... 1 Project Objectives and Description ...................... 2 Project Design and Organization ...................... 3 Project Implementation ....................................... 4 Project Results ......................... ......... ...... 5 Financial Performance ................................... 6 Economic Reevaluation ... ............................. 11 Project Sustainability ................... 12 Bank Performance ................... 12 Borrower Performance ................... 12 Project Relationship ........... ........................ 13 Consultant Services ......................................... 13 Training ................ 13 Project Documentation and Data ................................. 13 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE .... ...... 14 Section A ................................................ 14 Section B ........................................ 15 Section C ....................................... 15 Section D ....................................... 16 Repayment Ability ........................................... 17 This documcnt has a rcstricted distribution and may be used by rocpients only in the performance of their I official duties. Its contents may not otherwise be disclosed without World Bank authorization.l  PART III: STATISTICAL INFORMATION ........................... 18 Project Timetable .......................................... 18 Disbursement Record ........................................ 19 Project Implementation .................. 20 Project Cost and Financing .................. 21 Project Cost ......................................... 21 Project Financing ............ 23 Allocation of Loan Proceeds.. ....................... 23 Studies ......................... 24 Training.. ...................... 25 Status of Legal Covenants ........................ 26 Use of Bank Resources. . ...................... 27 Staff Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Mission Data. . ........................ 27 Procurement.. ........................ 28 ANNEX 1: Economic Analysis.. ......................... 29 Table 1.la: Port Traffic (1985-1993) and Forecast (to 2010) ..... . . . . . 35 Table 1.lb: Port Traffic (1985-1993) and Forecast (to 2010) .... . . . . . . 36 Table 1.2: Dalian Port Authority: Ship Time Analysis .... . . . . . . . . 37 Table 1.3: Operational Parameters Assumed for Economic Evaluation .... . . 38 Table 1.4a: Dalian Port Project: Estimated Economic Cost .... . . . . . . 39 Table 1.4b: Dalian Port Project: Estimated Economic Cost ......... . 40 Table 1.5: Dalian Port Project: Shadow Price Conversion Factor ... . . . . 41 Table 1.6a: Cargo Handling Without and With Proposed Berths . ... . . . .. 42 Table 1.6b: Cargo Handling Without and With Proposed Berths . . . . . . . . . 43 Table 1.7: Cargo Loading/Unloading Cost Savings .44 Table 1.8: Dalian Port Project: Economic Benefits Summary .45 Table 1.9: Economic Rate of Return and Sensitivity Analysis . . . . . . . . . 46 Table 1: Dalian Port Authority: Income Statement ..... . . . . . . . . . . . 47 Table 2: Dalian Port Authority: Balance Sheet ..... . . . . . . . . . . . .. 48 Table 3: Dalian Port Authority: Sources and Applications of Funds . . . . . . . . . .49  PROJECT COMPLETION REPORT CHINA DALIAN PORT PROJECT (LOAN 2907-CHA/CREDIT 1875-CHA) PREFACE This is the project completion report (PCR) for the Dalian Port Project in China for which loan 2907-CHA and credit 1875-CHA in the amounts of $71 million and SDR 18.2 million, respectively, were approved on February 9, 1988. The loan and credit were closed on December 31, 1993, as originally planned. Final disbursements were made on April 28, 1994. The credit was fully disbursed; however, $750,507.53 of the loan will have to be cancelled. The PCR was jointly prepared by the Transport Operations Division, China and Mongolia Department of the East Asia and Pacific Region of the Bank (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). Preparation of this PCR was started just before the project closing date and it is based, inter alia, on the staff appraisal report, loan agreement, development credit agreement, project agreement, supervision reports, correspondence between the Bank and the Borrower, and internal Bank memoranda.   - - PROJECT COMPLETION REPORT CHINA DALIAN PORT PROJECT (LOAN 2907-CHA/CREDIT 1875-CHA) EVALUATION SUMIVARY Objectives 1. The project's principal objective was to assist the Government of the People's Republic of China (GOC) to relieve congestion in the port of Dalian and increase its handling capacity by providing additional facilities and improving the planning, managerial and operational capabilities of its staff. Implementation Experience 2. The project became effective on October 3, 1988, four months after the loan and credit agreements were signed. The project launch was quick and smooth with major contracts in civil works awarded shortly after loan/credit effectiveness. The components financed by the loan/credit were completed satisfactorily on schedule by December 31, 1993, despite additional works such as (a) a modification of the breakwater to accommodate a bulk grain vessel, (b) repair of typhoon damage to the breakwater, (c) the construction of a multipurpose warehouse at a later stage, and (d) procurement of additional container handling equipment. 3. Overall project implementation was satisfactory, mainly due to its lack of complexity. The Bank-financed components were implemented by a single executing entity, the Dalian Port Authority (DPA); coordination was simplified, and decision-making was fast. However, the civil works contracts took longer than expected because the breakwater was damaged by a typhoon and its structural design was modified so it could be converted to a grain terminal at a later stage. Procurement of some major equipment was unnecessarily protracted due to a lack of familiarity with the Bank's procurement guidelines. Nevertheless, these delays were rectified during implementation, and the project was completed in the time frame originally planned. 4. Lack of coordination among the Government organizations, however, was a significant obstacle for the locally-financed railway link to the port, as it delayed construction  by about two years. At issue was the fact that the Ministry of Railways (MOR) was responsible for railways outside the port area, and coordination among it, DPA and the Ministry of Communications (MOC) was difficult. It was only the Bank's persistence that caused the State Planning Commission (SPC) to intercede. 5. The Bank's procurement procedure, in particular ICB, was new for DPA; the Bank insisted the Borrower strictly follow the evaluation and postqualification criteria provided in bid documents. Thus, final evaluations of the bids for the procurement of rubber-tired gantry cranes were delayed. However, this practice has since been successfully applied and delays minimized. Results 6. The major objective of the project was achieved. It provided multipurpose and container berths that considerably expanded the port's capacity. Its institutional goals were also achieved substantially, through technical assistance: DPA's capacity to carry out developmental planning (master planning and financial planning), to manage its facilities, and to undertake research and design activities was enhanced. The project's benefits were also achieved, including savings in (a) cargo-handling costs, (b) ship waiting and berthing time, and (c) cargo time. The ERR on the project as completed is estimated at 26.7% against the 19.9 % in the SAR (paras. 6.15-16). 7. DPA's financial performance was satisfactory: The average annual growth rate of net revenue and net profit after taxes are higher than in the SAR (para. 6.7). Under present financial arrangements, the port enjoys a healthy range of liquidity, leverage, and profitability (para. 6.13). Sustainability 8. The project is sustainable. It provided new port facilities outside the town center (which has serious traffic congestion) and port traffic will grow even more, in conjunction with the economic development of the Dalian area as well as the country. Further, DPA is a financially stable entity with adequate financial resources to maintain and operate the port efficiently. Moreover, with the modern equipment and extensive training provided under the project, DPA has the potential to increase the port's productivity even further and provide services at competitive costs. Findings and Lessons Learned 9. The findings and lessons from the implementation of the project are:  - iv - (a) While DPA was quite capable of implementing project components within its immediate control, those outside its jurisdiction, where coordination and cooperation with other agencies were involved, proved to be beyond its capacity. (b) Lack of coordination between government agencies was the result of the agencies having different priorities vis-a-vis the investment programs (paras. 5.3(a) and 6.3). (c) The investment priorities of a port, where the economic impact of its operatioil will primarily be regional, may differ from those of a national carrier, such as the railway. Often, the investment is an insignificant item for the latter, although it may be highly important to the former. (d) Based on these lessons, future port projects should be designed so the implementation of works could be executed by one entity or, if this is not possible, by those under the same ministry. However, it may be difficult to design multi-modal projects that would conform to this goal. (e) During implementation, priorities may change, requiring the investment package financed by the loan to be modified. This is particularly true in an economic environment like China where rapid growth is taking place. Thus, both the Bank and Borrower's approach to implementation were flexible enough to respond to changes positively and rapidly (para. 5.3(b)). (f) Greater attention should be paid to familiarize the Borrower's project implementation staff with the Bank's procurement and disbursement guidelines before project execution begins (para. 5.6). Thus, a project launch seminar is quite valuable, as was confirmed by the delay in implementing this project.   - 1 - PROJECT COMPLETION REPORT CHINA DALIAN PORT PROJECT (LOAN 2907-CHA/CREDIT 1875-CHA) PART I. PROJECT REVIEW: THE BANK'S PERSPECTIVE 1. Project Identity Name Dalian Port Project Loan/Credit Number Loan 2907/Credit 1875 RVP Unit East Asia and Pacific Region Country China Sector Transport Project City Dalian Loan/Credit Amount $71.0/SDR 18.2 million Disbursed $70,249,492.47/SDR 18.2 million Cancelled $750,507.53 (under processing) 2. Background 2.1 Along with energy, transportation is recognized as one of the critical areas of investment to support continued economic growth in China. Based on its experience in the port sector, the Bank identified several important deficiencies, including (a) insufficient berths, (b) an inadequate number of experienced port operators and managers, (c) deficient long-term planning and coordination (including intermodal aspects) among the various authorities, and (d) the lack of modem technology to address technical problems. 2.2 In 1986, the GOC reorganized the port subsector so as to obtain greater productivity and faster development through increasing port autonomy and accountability. In so doing, it separated policy-making from operational functions. As a result, the latter were devolved to self-accounting port authorities with adequate financial and operational autonomy to manage their day-to-day affairs. 2.3 Dalian port, built in 1899, is the second largest among the 15 major coastal ports in China. Its economic hinterland includes the three northeast provinces (Liaoning, Jilin, and Heilongjiang), and four large districts in the eastern part of Inner Mongolia; no other deep water sea ports serve these areas. Other ports in the area are at Yinkou (at the mouth of the  - 2 - Liaohe river) and Dandong (at the mouth of the Yalu River); but, both are estuarine ports with only limited depth. 2.4 In 1985, Dalian's traffic reached 44 million tons, of which 77% was foreign trade. The major commodities handled were crude oil and petroleum products (45% and 15% of the traffic, respectively) at specialized terminals. The remaining commodities were grain (12%), chemical fertilizers (2%), which were largely bulk items and 11.4 million tons of break bulk cargo, including iron and steel. During the year, total traffic exceeded the port's design capacity of some 36 million tons, which resulted in an average of 40 ships each day waiting for berths. As the average ship cost Y 16,000/day in the port, the annual waiting cost was over Y 230 million. Moreover, traffic has been projected to double over the next decade, because a special economic zone (SEZ) was being built north of Dalian city, the government was emphasizing foreign trade and it was highly likely that coastal shipping would increase. Thus, Dalian port needed to be expanded. 2.5 To meet the expansion, a new site had to be found. The main operating districts of Dalian port were constrained by the encroachment of urban development and could not be further enlarged. Various sites around Dalian Bay were investigated before Dayao Bay was selected, because its water depth was suitable and it was located near the recently built crude oil terminal and adjacent to the SEZ. 3. Project Objectives and Description Project Objectives 3.1 The objectives of the proposed project were to increase Dalian port's capacity to handle cargo flow and improve its operational procedures. The project would (a) expand China's port capacity, which was in danger of constraining economic growth; (b) facilitate technology transfer in areas such as long-term planning (master planning), financial planning and control, and berth management; (c) support MOC's research and design capabilities; (d) support the study of the present and potential use of containers in areas around Dalian to ensure adequate coordination of transportation and storage facilities; and (e) address the training needs of port operators, maintenance personnel and managers. Project Description 3.2 The project included the following components: (a) Two container berths for 30,000 dwt ships and two general purpose berths for 25,000 dwt ships that could be converted to container berths when needed. These berths would require the construction of (i) a 1,840m- long breakwater and shore protection works; (ii) two container freight stations; (iii) a railway, roads, warehouses, and  -3- storage yards, where needed; (iv) a railway line from the in-port rail line of Dayaowan to the Jin-xian marshalling yard, and an access road from Dayaowan to the Shen-da freeway; and (v) the required maintenance and auxiliary buildings. It would also require (vi) the dredging of about 2.5 million m3 of soil and backfill and stabilizing the fill material, (vii) installing water supply, sewerage and power supply systems, and (viii) providing equipment needed for loading/unloading and harbor operations as well as navigational aids and boats. (b) Training of port operators and other specialists through technical assistance in (i) port operations, design, planning and construction supervision; and (ii) financial control, particularly of capital expenditures and operating costs. (c) A study of intermodal transport of containers in the Dalian hinterland to reduce the port's congestion. (d) A review and update of the port master plan which was being prepared by DPA staff. 4. Project Design and Organization 4.1 In the 1980s, ports in China suffered serious congestion due to a deficiency in port capacity. Thus, the project would provide new facilities and improve efficiency. In this context, the design parameters and criteria for project design were straightforward and well understood by the parties concerned, which included MOC and DPA. Consequently, the project was adequately and efficiently prepared by DPA and foreign consultants. 4.2 Project preparation by the Bank took about one year. The first Bank mission was sent in October 1985; the project was appraised on November 12, 1986. 4.3 The project was to be the first phase of the new port development at Dayao Bay. Given the range of facilities required, the complexity of coordinating the survey, design and site preparation and the constraints of the site, the implementation plan was well designed and construction was well executed. Also, the scope and size of the project was not overly ambitious. 4.4 A great degree of flexibility in the execution of the works financed by the Bank/IDA was required to ensure that the project content kept apace with to changing priorities imposed by the ongoing economic reforms. This flexibility was only possible because the works were executed by one executing agency (DPA). Simple project organization contributed to the project's success.  - 4- 5. Project Inplementation 5.1 The project was implemented satisfactorily within the scheduled completion date: It became effective on October 3, 1988, about four months after the legal documents were signed on July 15, 1988. Prequalification of bidders, preparation of bid documents, as well as bid evaluation for civil works contracts, were undertaken prior to loan/credit effectiveness. 5.2 Construction of civil works was managed by DPA's Construction Command, a self-accounting unit that reported directly to the agency director, with assistance from foreign consultants. 5.3 The completed project deviated from the SAR in these respects: (a) Construction of the railway link to the port was delayed. This was part of the project, but locally financed. The delay was due to poor coordination between MOR and MOC/DPA. Bank supervision missions repeatedly urged GOC through SPC to resolve difficulties between the concerned entities. It appeared that the MOR, which was responsible for part of new railway line, had other priorities and did not consider the new line of sufficient importance to its operations to include it early on in its investment program. In fact, agreement to execute the works was only reached in late 1990. Thus, the link is now being constructed by both MOC and DPA and should be completed by October 1995, nearly two years after the project's closing date. The delay causes economic losses during the period when no railway link is available to provide containers with direct rail transportation. Thus, until it is completed, unloaded containers will have to be transshipped by barges to the old terminal where a railway link exists. (b) The breakwater design was modified to incorporate the development of a grain terminal in the new port. This was a good example of the close coordination between the Borrower and the Bank. Before the project, this terminal was to be located at the existing port area near Dalian city. DPA decided to include it in the Dayao Bay project at the time the master plan was prepared and requested Bank approval to modify the breakwater and multipurpose berths (in the Bank-financed project) to accommodate bulk grain vessels. The Bank agreed and it meant the breakwater could accommodate an 80,000 dwt grain vessel; however, it required that the breakwater be widened and deepened, at a cost of Y 28.2 million. About the same time, a "Grain Distribution and Marketing Project" under the Ministry of Commerce was being prepared. Several joint meetings were attended by the Borrower and Bank's transport and agriculture divisions and it was agreed that part of the new port facilities should be converted into a grain terminal. This facility is an integral part of the Grain Distribution and Marketing Project (Loan 3624/Credit 2518-CHA) which the Bank approved on June 17, 1993.  (c) The Bank financed the procurement of additional cargo-handling equipment (three units of front-lift container-handling cranes) to meet increased container traffic. (d) The Bank financed the construction of a multipurpose warehouse which was originally planned to be locally financed. Lesson: Flexibility in implementation, which allowed appropriate changes to be made to project design, was possible because of close coordination between the Bank and the Borrower. 5.4 When the breakwater was being constructed, a few caissons which were not yet secured by stonefill were displaced by a typhoon (in September 1992). This cause a slight delay in the completion and a marginal increase in the contract price (Y 1.4 million). 5.5 The Bank has maintained a close relationship with Japan's Overseas Economic Cooperation Fund (OECF). MOC/DPA had expressed a desire to use OECF funds for a phase II project after the Bank-financed phase I is completed. At present, the OECF and GOC are negotiating the second phase and asking for the Bank's opinion. 5.6 Procurement. There were no major procurement problems. However, there was some delay in the procurement of rubber-tired gantry cranes due to the Borrower's lack of familiarity with Bank procurement procedures, and a lack of clarity about the commercial relation between China and the Republic of China. This was because the Borrower applied evaluation factors that were not specifically provided for in bid documents. This lead to several months' correspondence before the lowest responsive bidder was awarded the contract. 6. Project Results 6.1 All project objectives were achieved during the implementation of the project; however, there were several minor modifications to the use of loan/credit: (a) The breakwater was modified to accommodate bulk grain vessels and grain unloaders; (b) Additional equipment for container handling was procured; (c) Cost savings were used to finance the construction of a multipurpose warehouse which originally was planned to be financed locally. 6.2 Final project cost is estimated at $242 million against $231 million estimated at the time of appraisal. The final cost will only be known when the construction of the railway link will be completed in October 1995. The cost of civil works increased slightly due to the breakwater modification and additional container equipment. 6.3 All project components were completed by December 31, 1993, except for the construction of the railway link to the port (a locally-financed component). This contrasts with  - 6 - the agreements required at the time of loan negotiations, which stipulated that GOC would ensure that all road and railway connections would be completed before the port component was completed. The agreement between MOR and MOC/DPA to begin construction works was only concluded in late 1990, about two and half years late. It is fortunate that the economic loss due to this delay was not critical to the success of the project (see economic evaluation); however, if it had been completed on time, it would have contributed to the benefit stream by an estimated $4.6 million per annum. Lesson: Coordination between ministries and government agencies takes time and can be problematic. 6.4 During project implementation, no environmental or resettlement problems arose. Financial Performance 6.5 Decentralization. While the project was prepared in 1986, the port's management and financial administration was decentralized from the State (MOC) to local municipal government. In turn, the municipality delegated its responsibilities to the port authority, which handles day-to-day management, operation, construction and development of the port. However, major projects and plans affecting the long-term development of the port still need the approval of the State Council through MOC, although the port bears the financial obligations for its own development. To avoid burdening the municipal government, the finances of the port were restructured by the annual lump sum payment. This enhanced the port's internal cash generation by reducing, in 1986, a five-year fixed tax obligation to the Government. To date, this advantageous arrangement is still in effect. 6.6 The port's decentralization had a significant impact on its financial and management structure. The following table summarizes the key financial terms of the port's managerial and financial restructuring, as well as the size of the projects that require State approval.  - 7 - Date of Size of project Major financial decentralization needing state approval terms to the port January 1, 1986 Rehabilitation and new The annual income and projects over Y 0.5 million adjustment tax payments to the State are replaced by an annual lump sum payment of Y 5.27 million until the end of 1990. This payment was reduced to 3.56 million for the period 1991-95. 6.7 Past Performance. The financial performance of the port for the last eight years, through the construction period which ended in 1993, was satisfactory. When the actual measured costs included in the PCR for 1985-92 are compared with the projection in the SAR, the PCR figures show a higher-than-expected average annual growth of net revenue (16.8% per annum in the PCR versus 8.9% per annum in the SAR). However, the increase in gross revenue was offset by (a) the high growth rate of operating costs (30.4% per annum in PCR versus 11.4% per annum in the SAR), and (b) the large increase in nonoperating expenses and wage bonuses. Net profit after taxes shown in the PCR is Y 226.8 million, which is slightly less than the estimated net profit of Y 244.2 million provided in the SAR. 6.8 The total volume of traffic handled by the port during this period was not very different from the level forecast at appraisal (52 million tons in the SAR versus 52.1 million tons in the PCR); the small difference can be attributed to changes in the port's operating costs and charges. The SAR forecasts were developed at a time when the country had a policy of controlling prices for almost every major commodity at the State level, and, as a result, cost increases and inflation were rare. In addition, the State handled the allocation of major resources during the previous three decades and only charged users the "planned" prices. Therefore, the financial forecasts presented in the appraisal assumed that (a) port charges would remain virtually constant; and (b) the rate of inflation would be minor (in the range of 4.5%- 6.5% from 1985-92). These assumptions, although reasonable at the time, proved unrealistic due to a much higher-than-expected cost-pushed inflation. 6.9 Between 1985-92, although port tariffs were still controlled by the State, they increased by 16.8% per annum. However, this increase does not match the rapid increase in  unit operating costs, of 30.4% a year. Highlights of the port's actual income and cost summaries are shown below compared with the forecasts in the SAR. No SAR forecast was provided for 1993, but the actual financial results given by the port for 1993 are reported in Table 1. 1985 1990 1992 1993 Actual Actual SAR Actual SAR Actual ------------------------ (Y million) ------------------------- Net revenue (after business taxes) 263.7 494.2 413.6 783.3 475.2 1,020.5 Less: Operating cost (including depreciation) 77.9 234.5 135.2 500.0 165.5 809.7 Net nonoperating (income)/expenses 7.3 52.6 4.8 53.0 5.6 10.7 Profit before taxes 178.5 207.1 273.6 230.3 304.1 200.1 Less: Taxes 140.6 5.3 60.0 3.6 60.0 3.6 Net profit after taxes 37.9 201.8 213.6 226.7 244.1 196.5 Average net fixed assets 555 1,090 1,281 1,942 2,098 2,393 Return on average net fixed assets (%) /a 32 19 22 14 16 8 Operating ratio /b 30 47 33 64 35 79 /a Retum on average net fixed assets = Profit Before Taxes Average Net Fixed Assets. /b Operating ratio = Operating Costs Net Revenue.  - 9 - 6.10 DPA's financial performance has not been as good as was expected during the appraisal: Operating ratios continued to deteriorate and were substantially higher than the appraisal targets. This trend was caused by rapid increases in costs and no matching hikes in tariffs, despite supervision mission reminders. 6.11 The rate of return on net fixed assets, while generally satisfactory, also declined from 32% in 1985 to 14% in 1992 and 8% in 1993. This was due to cost increases and the fact that fixed assets were not revalued. However, it should be noted that, due to the mission's concern, DPA revalued them in 1993. This will help DPA accumulate depreciation reserves at a faster rate to replace the retired assets. It is encouraging to note that, following MOF's instructions, DPA adopted a new accounting system based on international accounting standards, effective July 1, 1993, that will adopt commercial practices and improve the financial management information system. 6.12 Present Performance. Despite the rapid increase in operating costs, the port's current financial position was still sound at the end of 1993: Current assets substantially exceeded current liabilities. Also, the port's actual current ratio in 1992 was 2.7 (1.1 for 1993), which is not substantially different from the SAR original forecast of 2.9. In addition, the percentage of net current assets in the form of cash did not change much--from 35.8% in 1985 to 34.7% in 1993. The salient points of the port's balance sheet during these years are listed in Table 2.  - 10 - 1985 1990 1992 .1993 Actual Actual SAR Actual SAR Actual -----------------------------(Y million) ------------------------------ Net fixed assets 630.8 1,147.4 1,143.6 2,144.0 2,051.3 2,931.4La Current assets 129.3 269.0 527.6 379.1 411.2 827.0 Special fund assets 67.0 179.8 67.1 241.3 67.1 1,083.5/b Total 827.1 1 596.2 2.008.3 2.764.4 2,529.6 4.841.9 Equity 614.0 614.0 614.0 614.0 614.0 614.0 Port development fund 0 700.2 872.4 1,796.7 1,300.4 2,733.2 Long-term debt 29.8 94.1 296.8 111.5 370.2 622.2 Current liabilities 81.1 85.7 122.9 140.0 142.8 770.3 Special funds 102.2 102.2 102.2 102.2 102.2 102.2 Total 827.1 1.596.2 2Q008.3 2.764.4 2,529.6 4841.9 Debt:capital ratio /c 4.6 6.7 16.6 4.4 16.2 15.7 Current ratio /d 1.6 3.1 4.3 2.7 2.9 1.1 /a Including other fixed assets. /b Long-term investment and other assets. /c Debt = capital ratio = Total Long-term Loans Total DPA's Capital. /d Current ratio = Current Assets Current Liabilities. 6.13 Future Performance. Under present financial arrangements, despite the high increase in operating costs, the port still enjoys a healthy range of liquidity, leverage, and profitability due to its flat lump sum payments to the State (these were reduced once in the last eight years, in 1991). The port's new responsibility for financing its own capital programs has not yet had an impact on its cash flow (Table 3), but it is expected to weigh more heavily in the future. In addition, the preferential tax terms granted by the State, which are set to expire in 1995, could change at any time after that. Therefore, to maintain the current favorable terms,  - 11 - the port's financial personnel should test many scenarios and alternatives before negotiating with State officials. Economic Reevaluation 6.14 The economic analysis in this report is based on a reevaluation of the data on traffic, operational performance, economic costs and benefits of project components as compared to the estimates provided by the SAR. The methodology used was similar to that in the SAR and can be briefly summarized as follows: (a) capital investment and maintenance costs were revised to reflect 1994 prices and included in the cost stream; (b) the benefits stream, also reflected in 1994 prices, was also included, and consists of savings in port handling, ship port time (berth and waiting), and cargo port time (berth and waiting); and (c) a project life of 20 years was assumed and the capital investment period for all project items is from 1987 to the end of 1995 (including the railway link to the port). Benefits started to accrue both for general cargo berths and container berths in 1994. The estimated economic loss caused by the delay in the railway link was $0.5 million/year, which is less than 1 % the project's total annual benefit and considered insignificant. 6.15 When reviewing the port components altogether, it was found that three major factors improve the reevaluated economic rate of return (REIRR): (a) an increase in the average daily ship cost in port, (b) a reduction in capital construction costs in terms of constant prices, and (c) higher-than-expected general cargo and container traffic. Conversely, these factors are offset by decreasing cargo value and benefit in container handling. 6.16 Assessing these revised data, the overall EIRR for this project is 26.7%, which is higher than the SAR estimate of 19.9% (see Annex 1 for a detailed analysis). 6.17 The REIRR and SAR estimates of the project in terms of economic rate of return, sensitivity analysis and net present value (NPV) are given below: SAR PCR Best estimate of rate of return (%) 19.9 26.7 NPV (12% discount rate, Y million) 493.6 1,397.1  - 12 - 7. Project Sustainability 7.1 The project is sustainable: DPA is financially sound and with a sharply growing economy in China and the Dalian city area (including SEZ, which is next to the port) being located in the center of a major industrial area, the port traffic is expected to continue growing. DPA is vigorously responding to market forces including seeking joint ventures with foreign investors to develop and improve services in the port. There is no known factor that will negate the sustainability of the project. 8. Bank Performance 8. 1 The Bank's performance in identifying issues and preparing the project has been good and quick. It was identified in October 1985 and appraised in November 1986. Bank staff resources leading to appraisal were 82.8 staff-weeks and supervision was also efficient. The annual average input of staff resources was 11.5 staff-weeks for the life of the project. Also, sectoral coordination within the Bank was good. 8.2 The Bank took a consistent position when it came to procurement and providing appropriate instructions and guidance, when necessary. A good example was with regard to the procurement of rubber-tired gantry cranes. After this procurement was finalized, no major confusion or delays were experienced. 9. Borrower Performance 9.1 In general, the Borrower's performance was good and preparation, implementation, and supervision were adequate, as was staff deployment. DPA has an experienced autonomous department to implement the project's physical aspects and an appropriate number of sufficiently experienced staff were made available. 9.2 The Borrower's capability in long-term financial planning, budgeting accounting and costing, for which technical assistance was provided, was strengthened and will be tested after the project is completed. 9.3 As shown in Table 7, Part III, covenants were mostly met. Some delays were experienced with submitting the reports in the master plan and intermodal study; this was due to the delay in internal authorization. Tlhe internal procedures should be improved. 9.4 The Borrower will need to closely monitor the operation of the new container terminal, with its advanced systems of managing information and equipment; however, DPA's performance in this area has not been proven.  - 13 - 10. Project Relationship 10.1 The working relationship between Borrower and Bank was satisfactory during the preparation and implementation period. The Bank's contribution in terms of advice and guidance was accepted in a positive manner and this resulted to the timely completion of a well- rounded project. 11. Consultant Services 11.1 Foreign consultants were engaged to help DPA supervise construction. In general, the GOC was reluctant to hire them for Bank projects, because of their cost and their limited capacity to access local information. Thus, they were not employed for the studies designed under project; consequently, DPA financed the studies with domestic funds. However, this arrangement could have limited the scope of work and extensiveness of the study (although this is not yet conclusive). 12. Training 12.1 Extensive training was carried out. Under the project, 3,167 staff were trained, against the 1,620 targeted in the SAR. In particular, training for management was satisfactorily completed (631 staff compared with the 269 expected in the SAR). Overseas training, however, fell short, at 340 staff-months for 192 staff against 500 staff-months for 112. The shortfall has been supplemented by additional domestic training that was acceptable, since the quality of local training is satisfactory. 13. Project Docunmentation and Data 13.1 The legal documents for loan 2907-CHA/credit 1875-CHA were adequate and appropriate for achieving project objectives in the key organizational and financial areas. The project appraisal report provided a useful framework for both the Borrower and the Bank during project implementation. DPA promptly provided sufficient data and clarifications for the PCR, which helped facilitate its early completion.  - 14 - PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE Section A 1. Dayao Bay Project of Dalian Port is a major project in the seventh five-year plan in China which was reviewed and formally accepted by the State Acceptance Committee at the beginning of 1993. The new port was officially operational and opened to traffic on July 1, 1993. The acceptance committee commented on the project's general layout, handling technology and structure type design as being reasonable with sound quality; environmental protection, fire-fighting facilities complied with design requirements and relevant state regulations; the project completion files and documents were basically completed, precise and systematic and complied with acceptance requirements; the handling equipment was provided, operational organization established, operations staff met the capabilities required. 2. The completion of this project enables the Port of Dalian to have a set of modernized and formalized containers, multipurpose berths with top level of facilities, equipment and management systems in China. It can accommodate container ship of the third generation and is open to liners from Asia, Europe and America, etc. It provides a solid foundation for the development of the Dayao Bay Port area as a transfer hub port with deepwater. When the port operates at its design capacity, it will be of major significance for greatly raising container transport capacity within Dalian Port and Northeast region to promote hinterland economic expansion and especially the development of Dalian Economic and Technical Zone. It also played an important role in relieving the restrictions within the existing port. 3. For construction of the project, it imported large amounts of advanced port equipment with modern container operation management systems; trained a lot of technical, operational, maintenance and management staff and especially overseas training that enabled trainees to widen their view, learn and obtain some international, advanced technology and management experiences which would be a great benefit to the Dalian Port to become an international modern port. 4. In the project execution period, the Dalian Port Master Plan was drafted and some necessary revisions were made according to study prepared for container inland distribution. These were all done by Chinese technical staff themselves. We believe that the study results are of great significance and comply with Chinese conditions. 5. By the execution of Dalian Dayao Bay Project, the construction and management level of Dalian Port had greatly raised, especially as a big step in international construction of supervision in the procurement aspect. An amount of technical and administrative staff now possess rich professional knowledge, management experiences, familiar with international construction supervision, ICB procurement and the World Bank procurement guidelines.  - 15 - 6. Particular attention was given to environmental protection. There were no significant effects to the local environment after the project completion in the case of large excavations, backfilling, dredging and other construction. 7. Success of the Project Management. The Dalian Port Authority established a project management system gradually after the project appraisal and set up a dedicated organization in charge of overall management. The smooth completion of the project fully showed that the organization and management of Dalian Port Project were completed successfully, effectively and satisfactorily. 8. The project design was basically undertaken by the Chinese design institute, i.e., the Water Transportation Design and Planning Institute of MOC. In general, the design was a success. The design institute made a great effort to ensure the satisfactory execution of the project including preparation of bidding documents and site construction design revision, etc. 9. In accordance with the change of the port master plan and development needs in the project period, the breakwater was modified to accommodate 80,000 dwt bulk grain vessels (to import wheat), by utilizing the Bank's saving of the loan. The advantage of deepwater at Dayao Bay was fully taken. In addition, the Bank loan and savings were used to construct a multipurpose warehouse, purchasing an additional three units of container front loaders. All those items purchased outside the Bank's loan were finished before the disbursement deadline. Section B 10. The first part of the PCR drafted by the World Bank is comprehensive. It describes completely all the major items of the project executed and the analysis provided is mainly correct and complies with the actual conditions. 11. With respect to the data of each item in the list of the PCR, Part III, we acknowledge that they are correct and fully show the overall situation. 12. With regard to the delay in procurement, the main reason was that so many bidders had bid for the works, the bidding document requested two different delivery methods, i.e., CIF and turnkey items technology are complicated and confirmation of the bidder's experience and subcontracting background, caused the additional time for bid evaluation. Section C 13. During the whole implementation period, the World Bank was very positive, serious, effective, and due to these fruitful efforts enabled the project to be completed according to schedule. The Dalian Port Authority appreciates all officers and experts from the World Bank who participated in this project for their efforts day and night, and their contribution made to  - 16 - the port development. It gave us deep impressions of their strong sense of responsibility and spirit of job respect. 14. From the project appraisal to reimbursement deadline, we have been keeping a close cooperative and mutual respect with the technical Division, Communication Division, Disbursement Division, etc., of the Bank. This is the first time that Dalian Port has used a Bank loan. Due to mutual efforts, especially in guidance on all aspects granted by the Bank's experts, the Dalian Port became familiar with relevant rules rapidly and overcame all difficulties on technical, commercial, financial application and other project executions, and completed the project satisfactorily. 15. Each site supervision mission from the World Bank made a significant effect on the project execution. They inspected the site situation on time, and collected first-hand information, resolved problems in the construction to accelerate the construction procedure by strengthening a mutual understanding and trust so that an easy understanding can be reached. Especially, the Bank's mission gave us great support and assistance on breakwater modification, loan and savings application and civil works price adjustment, etc., and also direct shopping limitation adjustments, and LCB for purchasing some listed shopping equipment, etc. The Bank officers' instruction, understanding and quick responses to our request facilitated implementation. 16. Two or three years after the appraisal of the project, the cost of equipment increased considerably. This additional cost was absorbed by the cost savings in civil works contracts resulted from the devaluation of renminbi. Section D 17. Generally, the project implementation can be kept to strictly follow the mutual agreement and use the loan according to the Bank's guideline and requirement. 18. In order to have a sound implementation of the Dayao Bay Project, the Port of Dalian carried out comprehensive training to relevant staff including the senior project management staff training at the Bank, local procurement and disbursement training, invited foreign consulting company for construction supervision and financial training. Training has been carried out, for example, by visiting overseas and investigating domestic major projects of the Bank such as the Lubuge Power Station and the East Pier Project of Taijing Port to ensure that managers possess the basic relevant experience and knowledge. 19. In all stages of the project execution, a positive close relationship was maintained with the World Bank, full attention to the Bank's instructions and followed the rules seriously. Therefore, no major problems occurred in the execution period. 20. For the key railway link construction, the Chinese government confirmed that the construction should be undertaken by MOR in 1986 and in the same year, a major reform  - 17 - began to the Chinese railway construction systems. The problem of investment had occurred as this was a special line servicing the port and it contradicted with the new systems. By several coordinations made by SPL and the Bank's attention, the railway was confirmed to be built by MOC and MOR in 1992 and estimated to be finished in 1995. Due to the delay in completion time, Dayao Bay Port cannot be fully efficient in the first two years. 21. Some delays caused in the project execution are mainly due to too many approvals, too long a preparation time for ICB, lack of experience for bid evaluation and some other reasons such as limited power authorization, etc. 22. Use of foreign consultants to supervise civil works contracts created a favorable environment among the supervision teams; they trained and worked with the Chinese supervision team for preparing detailed monthly reports. There are still some weak points that exist, such as some inadequate supervision and lack of equipment.t; thus, some inspections had to rely on the social services, etc. Repayment Ability 23. Since November 1, 1993, the Dayao Project entered the repayment period; the Port of Dalian needs to annually pay US$8.5 million as retuming the capital and interest accordingly. As in recent years, local exchange rates had big changed, i.e., from 2.80:1 up to 8.72:1. It is really giving heavier repayment load to the project executor and the adjustment of port tariff rate is limited by the state policy regulations. The loss caused by the exchange rate change cannot be recovered. The Port of the Dalian Authority recommended that relevant state authorities pay attention to this matter.  - 18 - PART III: STATISTICAL INFORMATION 1. Project Timetable Date Date Item planned actual Identification 10/85 Preappraisal - 09/86 Appraisal mission 11/86 11/12/86 Loan negotiations 04/87 12/87 Board approval 06/87 02/09/88 Loan signature - 07/15/88 Loan effectiveness 04/88 10/03/88 Loan closing 12/31/93 12/31/93 Loan completion 06/94 04/30/94  - 19 - 2. Disbursement Record Period Credit (SDR '000) Loan ($'000) Disbursements Cum. disbursements Disbursements Cum. disbursements 10/01/88-12/31/88 5,019,293.46 5,019,293.46 0.00 0.00 01/01/89-03/31/89 0.00 5,019.293.46 0.00 0.00 04/01/89-06/30/89 0.00 5,019.293.46 0.00 0.00 07/01/89-09/30/89 3,118,827.44 8,138,120.90 0.00 0.00 10/01/89-12/31/89 0.00 8,138,120.90 0.00 0.00 01/01/90-03/31/90 3,509,942.50 11,648,063.40 0.00 0.00 04/01/90-06/30/90 0.00 11,648,063.40 0.00 0.00 07/01/90-09/30/90 2,453,853.63 14,101,917.03 0.00 0.00 10/01/90-12/31/90 1,788,361.85 15,890,278.88 1,460,402.07 1,460,402.07 01/01/91-03/31/91 781,997.80 16,672,276.68 5,677,150.27 7,137,552.34 04/01/91-06/30/91 427,949.62 17,100,226.30 7,698,789.88 14,836,342.22 07/01/91-09/30/91 25,922.67 17,126,148.97 7,620,595.98 22,456.938.20 10/01/91-12/31/91 99,175.68 17,225,324.65 9,634,820.30 32,091,758.50 01/01/92-03/31/92 675,093.58 17,900,418.23 6,424,566.59 38,516,325.09 04/01/92-06/30/92 35,413.63 17,935,831.86 7,530,583.13 46,046,908.22 07/01/92-09/30/92 0.00 17,935,831.86 9,001,251.76 55,048,159.98 10/01/92-12/31/92 95,079.62 18,030,911.48 2,444,947.87 57,493,107.85 01/01/93-03/31/93 51,048.30 18,081,959.78 2,664,029.64 60,157,137.49 04/01/93-06/30/93 0.00 18,081,959.78 1,231,316.34 61,388,453.83 07/01/93-09/30/93 118,040.22 18,200,000.00 4,547,165.84 65,935,619.67 10/01/93-12/31/93 0.00 18,200,000.00 1,385,452.38 67,321,072.05 01/01/94-03/31/94 0.00 18,200,000.00 2,164,581.31 69,485,653.36 04/01/94-04/30/94 0.00 18,200,000.00 763,839.11 70,249,492.47 undisbursements: 750,507.53  - 20 - 3. Project Implementation Project Planned Actual Months of components completion completion delays Civil Works Breakwater Part I 6/89 12/90 18 Reclamation 12/90 11/91 11 Dredging 10/89 07/89 -3 GC and Iron Ore Berth 12/90 09/91 9 GC and Fertilizer Berth 6/90 9/91 15 Breakwater Part II 6/90 5/91 11 End part of Berth 6/90 10/91 16 Foundation Treatment 12/90 12/91 12 Road and Yard, MP Berth 6/92 6/92 0 Container Quaywall 12/90 10/91 10 Breakwater Part III 11/92 12/93 13 CT Road and Yard 11/92 10/91 -13 CFS 6/92 9/91 -9 Building 6/92 8/91 -10 Rail in Port 9/92 12/94La 27 Water Supply and Sewage 9/92 12/91 -9 Heating and Ventilation 11/92 12/91 -11 Power Supply 11/92 12/91 -11 Rail Outside Port 6/92 6/95 36 Infrastructure Outside 12/91 12/91 0 Equipment Cargo Handling Equipment 12/92 12/93Lb 12 Communication and Navigation 6/92 10/92 4 Computers 12/92 6/92 -6 Technical Assistance Training 12/93 12/93 0 Port Master Plan 6/89 8/92 38 Intermodal Study 12/89 5/92 29 L/ Expected /b Additional cargo handling equipment included.  4. Project Cost and Financing A. PROJECT COST Appraisal estimate Actual 5'000 Y'0O0 5'000 Y'OOO Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total A. Civil Works General Purpose Berths 1. Gen. cargo & iron ores 735 4,754 5,489 10,275 14,642 24,917 786 4,780 5,566 3,701 20,246 23,947 2. Gen. cargo & fertilizer 461 3,374 3,835 7,009 9,798 16,807 549 3,331 3,880 2,579 14,106 16,685 3. Breakwater part 2 1,058 6,792 7,850 7,452 13,209 20,661 568 3,380 3,957 2,378 13,474 15,852 4. Berth head protection 429 2,216 2,645 2,490 3,633 6,123 158 1,042 1,200 805 4,563 5,368 5. Breakwater part 1 3,638 0 3,638 10,094 3,656 13,750 3,710 0 3,710 14,037 0 14,037 6. Reclamation 5,889 16,899 22,788 1,735 74,840 76,575 1,424 13,619 15,043 6,928 20,032 26,960 7. Foundation treatment 1,572 0 1,572 9,649 7,807 17,456 2,897 549 3,446 14,091 40,746 54,837 8. Dredging 343 4,050 4,393 4,255 13,335 17,590 254 2,842 3,096 1,107 10,604 11,711 9. Roads and yards 2,340 0 2,340 7,955 0 7,955 669 0 669 3,598 0 3,598 Subtotal 16.465 38.085 54.550 60.914 140.920 201,834 11,015 29.552 40,567 49.224 123.771 172.995 Container Berths 10. Quay structure 748 6,578 7,326 9,838 15,737 25,575 1,312 8,107 9,419 6,252 34,346 40,598 11. Breakwaterpart 3 1,002 8,037 9,039 9,838 21,756 30,854 1,644 11,802 13,446 8,744 53,564 62,308 12. Roads and yards 3,217 0 3,217 14,767 8,255 23,022 5,763 0 5,763 30,637 0 30,637 13. CFS 151 1,700 1,851 677 5,443 6,120 995 2,088 3,083 5,306 10,198 15,504 14. Aux. buildings 5,383 0 5,383 15,066 9,916 24,982 908 2,115 3,023 4,849 12,121 16,970 15. Rail in port 243 0 243 1,051 0 1,051 212 0 212 1,154 0 1,154 16. Water supply & sewerage 942 0 942 4,962 0 4,962 1,237 0 1,237 6,538 0 6,538 17. Heating & ventilation 598 0 598 3,038 0 3,038 2,253 0 2,253 11,701 0 11,701 18. Power supply 1,777 0 1,777 8,067 0 8,067 3,540 0 3,540 18,308 0 18,308 19. Infrastructure outside port 13,027 200 13,227 59,566 0 59,566 20,389 0 20,389 88,130 0 88,130 20. Rail outside port /a 49,200 0 49,200 182,040 0 182,040 44,059 0 44,059 301,068 0 301,068 21. Temporarywork 3,835 0 3,835 10,101 0 10,101 2,765 0 2,765 11,271 0 11,271 22. Land acquisition 15,767 0 15,767 36,372 0 36,372 15,185 0 15,185 58,001 0 58,001 23. Others 1,587 0 1,587 6,030 0 6,030 13,007 0 13,007 65,576 0 65,576 Subtotal 97.477 16.515 113.992 360.673 61,107 421,780 113,057 24.112 137.169 617.535 110.229 727.764 Total - Civil Works 113.942 54.600 168,542 421.587 202.027 623,614 124,072 53.664 177.736 666 759 234.000 900.759  A. PROJECT COST (cont'd) Appraisal estimate Actual S'OOO Y'OOO S'000 Y'OOO Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total B. Equipment 24. Management & computer 0 1,310 1,310 0 4,844 4,844 0 1,288 1,288 0 7,089 7,,089 25. Cargo handling 692 21,368 22,060 2,560 79,062 81,622 42 35,827 35,869 231 193,447 193,678 26. Commun. & navigation 575 2,221 2,796 2,127 8,218 10,345 100 3,027 3,127 1,00 16,778 17,778 27. Equipment tests 76 190 266 281 703 984 137 300 437 199 1,637 1,836 28 Power equipment 0 480 480 0 1,776 1,776 557 512 1,069 3,099 2,759 5,858 29. Water supply equipment 0 90 90 0 333 333 0 87 87 0 476 476 30. Service boats & vehicles 0 387 387 0 1,432 1,432 42 1,150 1,192 202 6,343 6,545 Total - Equipment 1.343 26.046 27,389 4,968 96,368 101,336 878 42,191 43,069 4,731 228,529 273.260 C. Training and Techn. Assistance 31. Training and others 631 1,500 2,131 3,193 4,133 7,326 4,529 12,772 17,301 20,816 151,942 172,758 32. Construction supervision 0 1,000 1,000 1,949 4,385 6,334 186 560 746 900 2,393 3,293 33. Studies management 0 1,000 1,000 1,062 2,682 3,744 804 0 804 3,000 0 3,000 34. Survey & design 2,345 300 2,645 4,474 2,268 6,742 2,203 0 2,203 8,381 0 8,381 35. Financial seminar 0 100 100 333 962 1,295 0 50 50 0 262 262 Total-Trainin &T.A. 2,976 3,900 6,876 11,011 14,430 25,441 7,722 13,382 21.104 33,097 154.597 187.694 Total Baseline Cost 118.261 84,546 202,707 437,566 312,825 750.391 - - - - - - Physical contingency (10%) 11,827 8,455 20,282 43,756 31,283 75,039 Total 130,088 93.001 222,989 481,322 344108 825,430 - - - - - - Price contingencies Annual - - - - - - - - - - - - Compounded - - - - - - Amount 4,618 2,999 7,617 86,010 57,495 143,505 - - - - - - GRAND TOTAL 134.706 96.000 230.606 567,332 401,603 968,935 132,672 109.237 241,909 704,587 617,126 1,321.713 /a Estimate.  - 23 - B. PROJEcT FINANCING Sources Planned Final ($'000) ($'000) Bank loan 71,000 70,249 IDA 25,000 25,000 Domestic financing (DPA and MOR) 134,600 146,660 Total 230,600 241,M9 C. ALLOCATION OF LOAN PROCEEDS Category Original allocation Final allocation Actual disbursements Cr. Ln. Cr. Ln. Cr. Ln. (SDR'000) ($'000) (SDR'000) ($'000) (SDR'000) ($'000) 1. Civil Works (a) Parts A.1, A.2 and A.4 of the the project 12,400 33,300 13,360 28,700 13,478 30,037 (b) Part A.3 of the project 2,900 - 2,340 - 2,332 (c) Warehouse under Part A.6 of the project - - - 1,200 - 2. Goods for Part A of the project - 24,700 2,000 41,100 2,018 40,235 3. Consultants service & training 2,900 - 500 - 372 4. Unallocated - 13,000 - - - Special Account -22 Cancellation 751 Total 18,20 71.00 18.20 71.000 18.2 71.00  D. STUDIES System Purposes as defined at appraisal Status Impact of study 1. The Draft Master Establishing a planning scheme for Completed in August The Long-Term Development Planning Plan of Dalian the port construction to comply 1992 (38 months' Scheme has been used in the construction Port with the future requirements of the delay La) of Dayao Bay and in the enlargement of anticipated throughput. existing port throughput. 2. Intermodal Distri- To establish an effective distribu- Completed in May The data and findings in the report have bution System of tion system of containers to/from 1992 (29 months' assisted the port in building up the mod- International the hinterland. To develop an ade- delay Ma) ernized container berths and in the design Containers of quate transportation system and a of the system for the transportation of Dalian Port process for efficient documentation. containers by rail. /a Delay was partly due to the revision of the reports.  - 25 - E. TRAING 1. Number of staff Planned Actual Management 269 631 Equipment operators 381 412 Stevedores 424 1,590 Auxiliary services 546 534 Total 1 620 3.167 2. Overseas Training Planned Actual Number of Staff- Number of Staff- staff months staff months Equipment operators 25 75 75 60 Maintenance 50 300 81 70 Computing 21 93 18 36 Management 16 32 118 174 Total 112 500 192 34Q 3. Financial Training Domestic training Overseas training Number of Staff- Number of Staff- staff months staff months 132 1,406 12 17  5. Status of Legal Covenants Original Revised Agreement Section Status date date Description of covenant Comments Development 3.01(a) (i) OK 07/15/88 - Borrowers to carry out the con- The construction of railway link is Credit struction of railway lines from expected to be completed in October Dayaowan to the Jin-xian marshal- 1995. The access road has been ling yard and an access road from completed. Dayaowan to the Shen-da Free- way. 3.05 OK - Dec. 1989 Undertaking a study of intermodal Study report has been submitted to transport of containers. the Bank. 4.01(a) OK - - Borrower to maintain proper re- cords and accounts. 4.01(b) OK - - Accounts to be audited and fur- Audited financial report for each C nished to the Bank not later than year had been submitted to the Bank six months after end of fiscal year. by the end of June. Project 2.01(b) OK 07/15/88 - DPA to carry out Part C of the Project. 4.01(a) OK - - DPA to maintain proper records and accounts. 4.01(b) OK - - DPA to have accounts audited and Audited financial report for each submitted to the Bank not later fiscal year had been satisfactorily than six months after end of fiscal submitted to the Bank by end the of year. June. 4.03 OK - - DPA to prepare and furnish a financial plan for the current year and each of the next four years by April 30 of each year.  - 27 - 6. Use of Bank Resources A. STAFF INPUTS 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 Total Preappraisal 0.1 26.1 5.20 - - - - - - - - 31.4 Appraisal - - 51.4 - - - - - - - - 51.4 Negotiations - - - 7.4 - - - - - - - 7.4 Supervision - - - 0.5 9.2 11.7 19.0 12.9 10.7 4.4 - 68.4 B. MISSION DATA Month/ No. of Days in Specializations Performance Rating Type of year persons field represented status /a trend /b problems /c Identi/Prep 03/86 3 20 EC, EGR, FA Appraisal 11/86 5 30 EC,EGR,FA,O P,FA Supervision 1 10/88 4 16 EGR,EC,FA,E 1 1 C Supervision 11 09/89 2 8 OP,FA 1 1 Supervision III 06/90 2 8 EGR,FA 2 3 M Supervision IV 12/90 2 6 EGR,FA 2 2 Supervision V 08/91 3 15 OP, EGR,FA 2 2 Supervision VI 09/92 1 3 EGR 2 2 Supervision VIl 09/93 1 4 EGR 2 2 Supervision VIII 12/93 2 8 EGR,FA 2 2 /a 1 = problem free or minor problems; 2 moderate problems; 3 major problems. /b 1 = improving; 2 = stationary; 3 = deteriorating. /c M = Management; P = Procurement.  7. Procurement (ICB) Bid Bid documents documents Evaluation Award Period sent to to Bid sent to of Contract undertaken in Contract the Bank bidders opening the Bank contract price evaluation (M/DIY) (M/D/Y) (M/D/Y) (MID[Y) (M/D/Y) ($ mln) (months) 1. Reclamation works Dec. 87 01/30/88 04/22/88 08/29/88 10/05/88 - 4 2. Maritime works Dec. 87 01/30/88 04/22/88 06/24/88 10/05/89 - 2 3. CFS April 89 11/18/89 01/19/90 05/17/90 06/29/90 - 5 4. Container gantry crane April 89 07/27/89 09/28/89 05/00/90 12/08/90 12.5 14 5. Transtrainer April 89 07/27/89 09/28/89 05/00/90 12/15/90 8.4 14 6. Portal crane April 89 07/27/89 09/28/89 04/09/90 06/05/90 3.0 9 7. Port mobile tower crane April 89 07/27/89 09/28/89 04/09/90 06/29/90 3.5 9 8. Chassis April 89 07/27/89 09/28/89 05/00/90 10/23/90 0.4 12