Documentof The World Bank ReportNo.: 32659 PROJECTPERFORMANCEASSESSMENTREPORT TANZANIA PORTMODERNIZATIONI1PROJECT (CREDIT2095-TA) AND RAILWAYRESTRUCTURINGPROJECT (CREDIT2267-TA) June 22,2005 Sector, Thematic, and Global Evaluation Group Operations Evaluation Department CurrencyEquivalents(annual averages) Currency Unit = TanzanianShilling (Tsh) 1989 US$1.oo Tsh 190 1990 US$l.00 Tsh 192 1991 US$l.OO Tsh 194 1992 US$1.oo US$l.00 Tsh 305 1993 Tsh 416 1994 US$l.oo Tsh 528 1995 US$1.oo Tsh 601 1996 US$l.OO Tsh 595 1997 US$1.00 Tsh 624 1998 US$1.oo Tsh 700 1999 US$1.oo Tsh 802 2000 US$1.oo Tsh 806 2001 US$l.oo Tsh 952 2002 US$1.oo Tshl,168 AbbreviationsandAcronyms AHC Asset HoldingCompany 4 ASCUDA Automated System for Customs Data CAS CountryAssistance Strategy D S M Port ofDar-es-Salaam ED ExecutiveDirector ESW economic sector work GDP gross domestic product ICR ImplementationCompletionReport IDA InternationalDevelopmentAssociation IFC International FinanceCorporation MTR Mid-termReview OED Operations EvaluationDepartment PPAR ProjectPerformanceAssessment Report PSRC Public Sector ReformCommission PCU Project CoordinationUnit PSO Public ServiceObligation SOE state-owned enterprises SUMATRA Surface andMarineTransportRegulatoryAuthority SAR StaffAppraisal Report TA technicalassistance THA TanzaniaHarbors Authority TRC TanzaniaRailwaysCorporation TICTS TanzaniaInternationalContainer Services Ltd. TAZARA Trans-ZambianRailways TEU 20 foot ContainerEquivalent UNCTAD UnitedNationsConferenceonTradeandDevelopment WFP World FoodProgram FiscalYear Government: Januar~1 December 31 - ActingDirector-General, OperationsEvaluation : Mr. AjayWbber ActingDirector, OperationsEvaluationDepartment : Mr.RKylePeters Manager, Sector, Thematic, & GlobalEvaluationGroup : Mr.MainBarbu TaskManager : Mr.PeterFreeman I _ _ _I..--. -- F n : Enhancing developmenteffectlveness and Independence inevaluation. 1 About this Report The Operations Evaluation Departmentassessesthe programs and activitiesof the World Bank for two purposes:first, to ensure the integrityof the Bank'sself-evaluationprocess and to verify that the Bank's work is producingthe expected results, and second,to help develop improveddirections,policies, and proceduresthrough the disseminationof lessons drawn from experience.As part of this work, OED annually assesses about 25 percent of the Bank's lending operations. Inselectingoperationsfor assessment,preferenceis given to thosethat are innovative,large, or complex; those that are relevantto upcomingstudies or country evaluations;thosefor which ExecutiveDirectors or Bank management have requestedassessments;and thosethat are likelyto generate importantlessons. The projects, topics, and analyticalapproachesselectedfor assessment support larger evaluation studies. A Project Performance Assessment Report (PPAR) is based on a review of the ImplementationCompletion Report (a self-evaluation by the responsible Bank department) and fieldwork conducted by OED. To prepare PPARs, OED staff examine project files and other documents, interview operationalstaff, and in most cases visit the borrowing country for onsite discussions with project staff and beneficiaries. The PPAR thereby seeks to validate and augment the information providedin the ICR, as well as examine issues of special interest to broader OED studies. Each PPAR is subject to a peer review process and OED management approval. Once cleared internally, the PPAR is reviewed by the responsible Bank department and amended as necessary. The completed PPAR is then sent to the borrower for review; the borrowers'comments are attached to the document that is sent to the Bank`s Board of Executive Directors. After an assessment report has been sent to the Board, it is disclosedto the public. About the OED Rating System The time-tested evaluation methods used by OED are suited to the broad rangeof the World Bank's work. The methods offer both rigor and a necessary level of flexibility to adapt to lending instrument, project design, or sectoral approach. OED evaluators all apply the same basic method to arrive at their project ratings. Following is the definition and rating scale used for each evaluation criterion (more information is available on the OED website: http://worldbank.org/oed/eta-mainpage.html). Relevanceof Objectives:The extent to which the project's objectives are consistentwith the country's current development priorities and with current Bank country and sectoral assistance strategies and corporate goals (expressed in Poverty Reduction Strategy Papers, Country Assistance Strategies,Sector Strategy Papers, Operational Policies). Possible ratings: High, Substantial, Modest, Negligible. Efficacy:The extent to which the project's objectives were achieved, or expectedto be achieved, taking into account their relative importance. Possible ratings: High, Substantial, Modest, Negligible. Efficiency:The extent to which the project achieved, or is expected to achieve, a return higherthan the opportunity cost of capital and benefits at least cost compared to alternatives. Possible ratings: High, Substantial, Modest, Negligible. This rating is not generally applied to adjustment operations. SusfainafWty: The resilience to risk of net benefits flows over time. Possible ratings: HighlyLikely, Likely, Unlikely, Highly Unlikely, Not Evaluable. lnstitutionalDevelopmentImpact:The extent to which a project improves the ability of a country or region to make more efficient, equitable and sustainable use of its human, financial, and natural resourcesthrough: (a) better definition, stability, transparency, enforceability,and predictability of institutional arrangements andlor (b) better alignment of the mission and capacity of an organization with its mandate, which derives from these institutionalarrangements. Institutional Development Impact includes both intended and unintended effects of a project. Possible ratings: High,Substantial, Modest, NegIigible. Outcome:The extent to which the project`s major relevant objectives were achieved, or are expected to be achieved, efficiently. Possible ratings: Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, Highly Unsatisfactory. Bank Performance:The extent to which services provided by the Bank ensured quality at entry and supported implementation through appropriate supervision (including ensuring adequate transition arrangements for regular operation of the project). Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly Unsatisfactory. BorrowerPerformance:The extent to which the borrower assumed ownership and responsibility to ensure quality of preparationand implementation, and complied with covenants and agreements, toward the achievement of development objectives and sustainability. Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly Unsatisfactory. ... Ill Contents Principal Ratings ................................................................................................................ v Key Staff Responsible ........................................................................................................ v Preface .............................................................................................................................. vii Summary ........................................................................................................................... ix 1. Background .................................................................................................................. 1 2. Projects Objectives. Design. and Implementation .................................................... 3 3 Outcomes of the Port Modernization Project . .......................................................... 5 4. Outcomes of the Railway Project ............................................................................. 11 Outcome................................................................................................................. 11 Institutional Development Impact.......................................................................... 15 Sustainability.......................................................................................................... 16 Bank Performance ................................................................................................. 16 Borrower Performance .......................................................................................... 16 5 Concessioning of Port and the Railways . -Contrasting Experiences .................... 17 Concession ofDar es Salaam Port ........................................................................ 18 Concession of the Tanzania Railways Corporation (TRC) ................................... 21 Summary Comparison Between Port and Railway Concession ............................ 24 6 Overall Lessons . .......................................................................................................... 26 Limits to the Improvement of Parastatal Companies ............................................ 26 Complexity of Railway Concessions...................................................................... 26 Stretching Objectives and Targets......................................................................... 26 Annex A Basic Data Sheet . .............................................................................................. 29 Map .................................................................................................................................... 34 Ths reportwas preparedbyHemanLevy. Consultant who assessed the projectin February2005 The . reportwas editedbyWilliam Hurlbut. andRomaynePereiraprovidedadministrativesupport. V Principal Ratings PORT MODERN IZA'I'ION11PHOJE<:'I(CRE1)IT 2095-T A) ICR' ICR Review* PPAR Outcome Satisfactory satisfactory Satisfactory Sustainability Likely Likely Likely Institutional Development Substantial Substantial Substantial Impact Bank Performance Satisfactory Satisfactory Satisfactory Borrower Performance Satisfactory Satisfactory Satisfactory RAILWAY RESTRUCTURING PROJECT (CREDIT2267-TA) ICR' ICR Review* PPAR Outcome Unsatisfactory Unsatisfactory Unsatisfactory Sustainability Unlikely Unlikely Non Evaluable Institutional Development Substantial Substantial Substantial Impact Bank Performance Satisfactory Satisfactory Satisfactory Borrower Performance Satisfactory Unsatisfactory Satisfactory The Implementation Completion Report (ICR) is a self-evaluation by the responsibleoperational division of the Bank. The ICR Review is an intermediateOperations Evaluation Department (OED) product that seeks to independentlyverify the findings of the ICR. Key Staff Responsible PORTMODERNIZATION I1PROJECT (CREDIT2095-TA) Project TaskManager/Leader Sector Manager Country Director Appraisal M. Konishi Isaac K. Sam H. Messenger Completion Simon Thomas Maryvonne Plessis-Fraissard James W. Adams RAILWAY RESTRUCTURING PROJECT(CREDIT2267-TA) Project Task Manager/Leader Sector Manager Country Director Appraisal Yusupha Crookes Isaac Sam Robert Hindle Completion Simon Thomas Maryvonne Plessis-Fraissard Judy M. O'Connor vii Preface This Project Performance Assessment Rcport (PPAR), prcpared by the Opcrations Evaluation Dcpartment (OED), covers two completed transport sector projects in the Republic of Tanzania: Port Modcrnization I 1 (Credit 2095-TA) and Railway Restructuring (Credit 2267-TA). An International Development Association (IDA) credit inthe amount of SDR 28.9 million (US$37.0 million equivalent) was approved for the port project on February 27, 1990. The final project cost was US$126.4 million (US$122.3 million at appraisal) of which the IDA contribution was US$37.1 million. Co-financiers contributed US$67.2 million. The project closed in June 2000, three years later than originally scheduled. Most o f the extension was usedto prepare and carry out the privatization o f the container terminal at the port o f Dar es Salaam, which was not originally a project objective. An IDA credit o f SDR 56.1 million (US$76.0 million equivalent) was approved for the Railway Restructuringproject on June 13, 1991. The final project cost was US$222.1 million (US$275.2 million at appraisal), o fwhich IDA contributed US$64.6 million. Co-financiers contributed US$193.3 million. The project closed inDecember 2002, three years late. Most o f delay was used to prepare for privatizing the railway, which, as inthe case o f the port project, was not among the original objectives. The two projects were selected for assessment because o f the addition o f privatization as an objective. OED is preparing a review o f the Bank transport sector lendingworldwide, and the two projects offer auniqueperspective on the issues encountered inthe privatizationo fport and railways enterprises ina developingcountry. OED preparedthis report based on examination o f the relevant Staff Appraisal Reports, Implementation Completion Reports, legal agreements, project files and archives, as well as other relevant reports, memoranda, and working papers. Discussions were also held with a number o f Bank staff. An OED mission visited Tanzania in February2005, conducted site visits, and discussed the projects and effectiveness of Bank assistancewith government officials and stakeholders. Their kindassistance is gratefully acknowledged. Following standard OED procedures, copies o fthe draft PPAR were sent to government officials and agencies for their review and comments. No comments were received. I X Summary InTanzania, the poor cfficiency ofthe transport sector has historically been a blockage to the economy . This is largely due to poor roads and inefficient operations o f the two railway systems, the Tanzania Railways Corporation (TRC) and the Trans- Zambian (TAZARA) railway. High costs of land transport hamper communications, and this problem is exacerbated by the large size of the country and the scattered distribution o f population and production activities. The port o f Dar es Salaam(DSM) i s Tanzania's main ocean outlet and also serves several Tanzanian neighboring countries. Because o f this, the Tanzanian transport system, and especially the DSMport, is an important foreign exchange eamer. While major political changes inthe Eastem and SouthemAfrica region took place in the 1990s significantly reordering the transport pattems inthe region, Tanzania has remained an important transit country for most o f its neighbors. The two projects underreview, Port Modernization I1and Railway Restructuring, were approved inthe early 1990s, when both the railways and the ports were operated as public sector agencies. The two projects were originally intendedto improve performance o f two transport parastatal agencies, respectively the Tanzania Harbors Authority (THA), responsible for the ports, and the TRC. The D S M port was profitable under THA mainly because o f highrates and little competition, but its operational efficiency was low. However, the government inthe mid-1990s decided to privatize.its state-owned ' enterprises (SOEs), the combined losses o fwhich accounted for close to 10percent o f GDP. The privatizationprogram includedawarding concessions to private operators o f public utilities, among which were the DSMport andthe TRC. The two projects accordingly were restructured to incorporate the government privatization strategy into the projects' objectives. Intheport project, privatizationsucceededas the container terminal o fthe DSM port was transferred to a private concessionaire in 2000 resulting insignificant improvements inoperational and financial performance. The outcome o f the port project is rated satisfactory. Institutionaldevelopment is rated substantial, mainly as a result o fthe concession, but also on account of management improvements made prior to privatization. Sustainabilityi s rated likely, as facilities are ingood condition and private operators normally give priority to ensuring that proper maintenance i s carried out regularly. Bank andBorrower performance are , rated satisfactory. Inthe railwayproject, the first attempt to transfer TRC to aprivateoperator failed, because bidconditions were difficult to meet andno bidder submitteda compliant bid.A second roundo fbidding, taking into account the experience from the first round, was underway at the time o f this assessment(early 2005). Before the privatizationwas launched, the project had financed major track relaying (200 kilometers) and rehabilitation(1,000 kilometers), the reconstructiono f 52 bridges, and had also helped , rebuild rail track sections damaged by ElNino flooding. The efficiency o f railway operations improvedinmany areas, and freight traffic reached record levels. However, X - thc projcct had sct ambitious operational targets, and, despitc improvements, none o f thc targets was met. The outcome of the railway project is thus rated unsatisfactory. The investments improved the physical condition o f the railway network as expected, and there were improvemcnts in the railway's commercial emphasis and in productivity. However, neither the operational goals nor the objective to transfer the TRC to a private operator were achieved. Financial performance improved, but only modestly, inpart because the government failed to provide TRC with compensation for the provision o f non- commercial passenger services. Institutionaldevelopment is rated substantial because significant progress was made inthe groundwork for privatization, starting with TRC's cessationof non-railway business and more recently inthe preparationo f a second round o fbidding; a Commercial Department was created; and, a modem program to track and monitor all movements and technical status o f locomotives and rolling stock was installed and is operating correctly. Sustainability is rated Non Evaluable. Under current conditions TRC clearly does not have adequate funds to maintain assets, and operational performance can therefore only deteriorate. However, the second round o f concession bidding for TRC i s quite advanced, and there are good prospects that a concession will be awarded soon. Ifand when a privateoperator takes over, maintenance and operational efficiency is likely to be satisfactory basedon international experience with privately managed railways. On balance, it is not possible at this stage to assess sustainability. Bank and Borrower performance are rated satisfactory. The Borrower ratingtakes into account the good performance o f the implementation agency inthe execution o fthe project and that the government, while failing to provide TRC financial compensationfor non-commercial services, realized that the parastatal framework was unsuitable to achieve satisfactory performance and then took the bold decision to try and privatize TRC operations. Four factors predominate in explaining the differences inthe outcomes o f the concessionprocesses o f the DSMcontainer terminal ando f TRC. The first factor i s the profit potential and risks, port container terminals are money-makers, while railways with relatively low traffic densities, as i s the case o f TRC, generally lose moneywhen operated as parastatal companies. Railway finances are affected by the government's failure to provide compensation for the non-commercial services that railways are required to offer. The second is the level o f investments; while the container terminal is practically new andrequires no further infrastructureinvestments, the railway, despite project-financed improvements, still needs substantial investments to ensure the whole system i s insatisfactory operating condition. The third i s the labor issue. As is common inparastatalenterprises, boththe port andthe railway were overstaffed. However, the railway employs many times more staff than the port. Inaddition, THA generated enough net revenues to pay compensation to laid-off staff, while TRC needed to obtain a government budgetary allocation. The fourth issue concems the complexity o fmanaging an enterprise like TRC with assets (the railtrack, depots and other facilities) located over a lengtho f2,600 kilometers, while the port container terminal has neatly defined facilities consisting o ftwo container berthsand a container storage area. xi The expericncc from thcsc projects confirms a number of OED lessons: The frcedom to opcrate according to market principles potentially makes thc opcrational efficiency of privately run concessions superior to that o f parastal organizations for ports and railways; The concentration of investment with high volumes of traffic, lower operational costs and relative autonomy from government, generally makes port concessions a relatively low risk for investors; When railways are likely to incur losses andor are inadequately compensated for uneconomic services, investors will be hard to attract and therefore bidding conditions and the terms o f the concession agreement will need to take this into account; The designof projects preparing parastatal companies for privatization should take into account the capacity and commitment of government and management to carry through the reform process. Targets and timetables should be realistic. Special care should be placedinthe selection o f qualified consultants preparing biddingdocumentation. Ajay Chhibber Acting Director-General Operations Evaluation 1 1. Background 1.1 With a GNP per capita of less than US$300, Tanzania is one o f the poorest countries in the world. Its population of some 30 million and its economy are highly dependent on agriculture. While the condition of the population has not changed much since the early 1990s when the two projects under review where approved, the government since the mid and late 1990s has undertakenmajor policy reforms, and significant progress has beenmade in moving toward a market economy. As a result, economic growth has averaged over 6 percent per year since 2000. 1.2 One o f the radical reforms has been launching the privatization o f state- owned enterprises (SOEs), whose combined losses accounted for close to 10 percent o f GDP. The privatization program included the concessioning to private operators o f public utilities, including the Port of Dar es Salaam (DSM) and the Tanzania Railways Corporation (TRC). 1.3 Tanzania's transport sector has historically beena blockage to the economy because o fpoor roads and inefficient operations o f its two railway systems, the TRC and the Trans-Zambian (TAZARA) railway. Highcosts o f land transport seriously hamper communicationsbecause o f the large size o f the country and the scattered location o f population and production activities. At the same time, becausethe port o f Dar es Salaam serves several mostly landlocked neighboringcountries, the Tanzaniantransport system, andespeciallythe DSMport are key foreign exchange earners. Major geopolitical changes in the Eastern and Southern Africa region occurred inthe 1 9 9 0 ~ ~ significantly reordering the transport patterns inthe region, yet Tanzania has remained an important transit country for most o f its neighbors. 1.4 The two projects under review were part ofcontinued Bank assistance to Tanzania's transport sector. The Port Modernizationproject followed the Port Rehabilitation Project (Credit 1536-TA), which closed on December 31, 1992. OED ' assessed this project and found that port facilities were rehabilitated as planned and that the port was making a reasonablebut low returnon fixed assets. The Railway Restructuringproject, incontrast, was appraised when no Bank railway project was under execution, and originated ina 1987 Transport Sector Donors Conference. More broadly, the two projects were part of the Bank's longstanding support for the improvement o f Africa's international transport corridors. The donor community strongly supported the two projects, each o fwhich had six co-financiers. 1.5 The Bankcontinues to support Tanzania's transport sector through the Central Corridor Project (Credit 3888-TA), approved inApril 2004. 1.6 Inaddition, the Bankhasprovidedstrong support to Tanzania' privatization program throughthe Parastatal andPublic Sector ReformProject (Credit 2507, approved infiscal 1993) amainobjective o fwhichwas to strengthen thePublic Sector Reform Commission (PSRC) to handle divestitures. Duringimplementation o fthis project, 2 government dccidcd to includc infrastructurc in its program of parastatals sales (or concessions in the casc o f some public utilities). 1.7 A group of World Bank Executive Directors (EDs) visited Tanzania in July 2004. One theme o f the visit was private sector development. While the visit to the port is not specifically mcntioned in the EDs report,' THA authorities mentioned to the PPAR mission that the EDs group had held discussionswith THA executives. 1.8 The Operations Evaluations Department reviewedWorld Bank operations in Tanzania in 2000. The review focused on the 1995-1999 period. The report suggested that the Bank's lendingprogram and economic and sector work should be centered on key constraints to private sector and rural development. A companion report by the Operations Evaluation Group o f the International Finance Corporation (IFC) found that Tanzania had been difficult for private investors. The IFC report notedweak infrastructure as one o f the key obstacles to private sector development. 1.9 Inthis report the objectives and components ofthe two projects are discussed together because of their similarities. This is followed by discussions o f the ' results o f each project individually. Then, the experience with the concessions in the two projects is compared and finally a numberof lessons are drawn. 1.Executive Directors' Group Travel to Eastern and Southern Africa. Statement made by Mr.Austin. SecM2004-05 13 ofNovember 24,2004. 3 2. Projects Objectives,Design, and Implementation 2.1 The objcctives and componcnts of the two projects are shown in Box 1. Box 1. Project Objectives and Components Port Modernization Objectives 0 The project's original objective was to expand the physical, managerial, and operational capacities of the Tanzania Harbours Authority (THA) to meet anticipated traffic volume inthe 1990s. Six sub-objectives were listed: o Execute the secondphase container terminal expansion to handle 2.4 million tons o Enhance THA's operational, administrative, andmanagerial capacity to manage container operations o Improve THA's capacity to maintain and operate cargo handling equipment o Rationalize THA's financial management o Carry out a development study to determine the next phase ofport expansion o Establisha computer-based management information system (MIS) Components 0 The project's original components consisted of: o Port civil works, mainly expansionof container terminal (US$65.50 million, 53.5 percent of project cost) o Port equipment (US$27.5 1million, 22.5 percent ofproject cost) o Engineeringservices and studies (US$5.36 million, 4.4 percent o fprojectcost) o Institutional development to assistthe Project Coordination Unit(PCU), technical assistance to management, and technical assistance to the Customs , (US$23.97 million, 19.6 percent o fproject cost) Railway Restructuring Objectives 0 The objectives o f the project were: o Strengthenthe organizationo fthe Tanzania Railways Corporation (TRC), eliminate regulatory bottlenecks to its effective operations and set it on a path to a commercially viable entity o Rehabilitateinfrastructureassets, replaceobsolete anduneconomic operational assets, and provide limitednew investments consistent with the prospects for ' growth indomestic traffic Components 0 The project's original components consisted of: o Physical investments, includingtrack renewal, maintenance depot, signaling and telecoms, locomotive rehabilitation, rolling stock (US$161.6 million, 81percent o f project's base cost) o Institutional support, trainingand studies (US$37.9 million, 19percent of project's base cost) 2.2 Duringimplementationo fbothprojects andinline with a shift in government policy toward the privatization of infrastructure and public utilities, the CreditAgreements were amended to introduce a major new objective: concessioning of the two utilities toprivate operators. In parallel, changes inthe components were introduced inbothprojects to support the new objective, including hnding for the PSRC 4 to finance concession transaction adviscrs and a number of supporting studics. Inboth cases, the PSRC bccamc a new implementation agency. Thc large number of componcnts, numcrous co-financiers, and the addition o f the privatization objective made implementation of thc two projects complex. The changed objectives were also the main factor in an extension of each project's closing date by three years. 2.3 Ncither of thc projects was subject to Quality at Entry assessments. Inboth projects, thc ICRs assessed the quality at entry as satisfactory. Inthe context of improving thc performance of parastatal utilities, the PPAR agrees that the projects focused on the appropriate institutionaldevelopment objectives and components, and that the investments prioritieswere essentially the correct ones. Bothprojects included strong technical assistance components to help achieve the performance objectives. Therefore, the PPAR supports the assessment of quality at entry as satisfactory. 2.4 During implementation a number o f revisions to the list o f the port project activities were made, with deletion of a few o f the smaller components, and addition o f some new ones. These changes may suggest insufficient project preparation, since some investment priorities had to be changed inmid-course. Inreality, however, the changes were mainly due to fast evolving economic conditions in Tanzania and inthe landlocked countries served by the port. Changes includednotably more support to Customs through the addition o f financing for the rehabilitationo f customs buildings and provision o f equipment. 2.5 Neither the port nor the railway undertook major new construction or other physical aspects that could pose serious environmental concerns. Less significant environmental issues were addressedinthe projects by studies (port) or a combination o f immediate remedialactions and studies (railway). Inretrospect, a potential issue in the case o f TRC was people encroaching the railways' right o f way. Since those people were not affected by project activities, this issue was not dealt with under the project. Yet, , today, this has become an issue inthe concessioning o fthe TRC, since any private operator will demand to have the rail track's right-of-way clear o f encroachments. The ongoing Central Transport Corridor Project (Credit 3888) includes funding for the cost o f assisting people to move out o f TRC's right o fway to other suitable locations (assistance executed by local NGOs). 2.6 Regarding the concessioning process, (a) the decision to concessionthe port inphases, starting with thecontainer terminal, was correct, since container terminals are more attractive andthere i s ample worldwide experience showing successful concessioning o f container terminals, and (b) the decisionto concession the railway as one package appears to have been the right approach. Inhindsight, however, the deadlines for completing the railway concessioning appear to have been overly optimistic. 2.7 Inretrospect, the question arises as to whether some sort ofprivatization could have been introduced or were intendedinthe original project objectives. Inthe case o fthe railway, management contracts had already beenused inother countries - , including the Sub-SaharanAfrica region-since the 1980s. Yet, actual concessioning of the railway only started inthe early 1990s insome Latin American countries, while none 5 had been undertaken in Africa up to the timc the evaluatcd project was appraised. In contrast, concessioning o f port container terminals hadbcen started worldwide at least a decade earlier, cspecially in Asia, and had demonstratcd their effectiveness. 2.8 On the othcr hand, without a broad govemment policy aimed at privatizing SOEs it would have been difficult to makc an exception with the ports. At the same timc, much faith in the late 1980s and early 1990s was still placed in the effectiveness of performance agreements as a way for the governments to get higher efficiency from their parastatal companies, espccially the utilities, despite early evidence that such contracts rarely achieved the expected results. Inthe case o f TRC, such agreements were signed, at appraisal as a Memorandum of Understanding and later as a formal Performance Contract. 3. Outcomes of the Port ModernizationProject Outcome 3.1 The overall project outcome is rated satisfactory based on substantial relevance, efficacy, and efficiency (discussed below). The key objective o f privatization was fully achieved, and i s proving successful. Most of the other objectives were also substantially achieved. Since the terminal has beenconcessioned, major improvements 8 have been achieved in operational efficiency and reduction inthe time containers stay at the port. Port rates have been loweredevery year for five years. The result has been an overall increase inthe quality o f services to port users and significant growth inthe movement of containers inthe port, from about 100,000 in 1997 to 260,000 in2004. Growtho f container traffic continues to be strong in2005. Relevance 3.2 The relevance o fthe project i s rated substantial, since the port is important to the Tanzanianeconomy andproject objectives were well conceived. The economic growth o f Tanzania inrecent years would have beenseriously hinderedhad the port not beenimprovedunderthe project. The project was also aligned with the 1999 Country Assistance Strategy (CAS), which specified that one o fthe six major objectives in Tanzania was to "reduce sectoral andphysical constraints." 3.3 Becausethe DSMport serves several o f Tanzania's bordering countries as' the most direct andeconomic linkto the rest ofthe world andtherefore the primaryocean outlet, the project's relevance extended beyondTanzania to the East Africa region. 3.4 The project's added objective to support concessioning o fthe DSM container terminal was clearly inline with the government's strategy to divest SOEs to improve efficiency. The project also helped support a major policy reform inthe oil sector: the government decisionto close Tanzania's inefficient oil refinery could only be implementedwhenthe oiljetty at DSMwas upgradedunder the project to allow larger ' tankers to berth carrying refinedpetroleumproducts and increasedunloading efficiency. 6 3.5 Thc project also helped assist vulnerable populations. Tanzania has provided sanctuary to a large number o f refugees from Burundi and Rwanda, with a peak o f more than 600,000 in 1993, and hovering around 400,000 through the 1990sand 2000s who have receivcd assistaim from thc World Food Program (WFP). In 2005, the WFP is feeding some 400,000 people (250,000 from Rwandaand 150,000 from Democratic Republic o f Congo), and to this end it is importing 800,000 tons of foods per year through thc DSMport. The WFP program is also assisting the vulnerable Tanzanian population located northwest o f Dar es Salaam. 3.6 The project's support to Customs, originally in the form of technical assistance but later adding investments for physical facilities, enhancedthe value o f the project. The additional investment strengthened support to improve trade logistics through the port. Efficacy 3.7 Efficacy o f the civil works is rated substantial. The six major subcomponents of civil works, amounting to over 90 percent of civil works costs, were carried out as expected. The expanded stacking areas inthe container terminal substantially increased its capacity. The Staff Appraisal Report (SAR) expected that with the increased capacity some 125,000 containers would be moved in 1995 (up from about 60,000 in 1991when the project started). Infact, due to a shortage o f transit containers, only about 75,000 containers were movedthat year. However, thanks to the increased infrastructurecapacity, coupled with new equipment and a more efficient operation by the terminal's private operator, the terminal's throughput in2004 had grown to 260,000, containers. 3.8 Only two civil works subcomponents (Belgianwharf andpavingof lighterage area) representing less than 10percent o f total civil works, were not carried out. I t i s questionable why these subcomponents were included inthe original project. A visit to the port found these not to bepriority facilities, andthat the lighterage activity i s relatively low. 3.9 Additional works, namelydredging o fthe harbor channel and Customs building, which were not originallypart o fthe project, were carried out andput into service. Equipment for the port was carried out as anticipated and within the cost estimate. The Kurasini Oil Jetty was upgraded andhas allowed bigger tankers and faster unloadingoperations. 3.10 Only about 50 percent ofthe expected hndingfor technical assistancewas utilized. This is mainly explainedbythe decision to privatize the container terminal (and other parts of the port insubsequent phases), which made the intendedconsulting services to improve operations andmanagement unnecessary. 3.1 1 The customs processingsystem ASCUDA (Advance Cargo in Computerized andDocumentationSystem) was introduced on schedule, but efficient operation o f the system took time to develop. For a period soon after the systemhad become effective its operation had to be suspended due to inadequate staffing. However, 7 once this problcm was resolved, ASCUDA proved to be considerably more efficient than the manual processing that prevailedbefore the system had been installed. In May 2005, an improved vcrsion of ASCUDA, (known as ASCUDA++), is expected to be put in operation. This advance in technology will allow complete electronic processing o f foreign tradc documentation, eliminating the need for paperwork. Efficiency 3.12 Efficiency is rated substantial. The ICR estimated the economic rate of retum(ERR) at 13 percent, and the net present value at US$20.8 million, both satisfactory but lower than the S A R estimates (ERR o f 20 percent and NPV o f $42.7 million), becauseo f traffic lower than expected. The re-estimated ERR takes into account (i)thecostsavingsgeneratedbytheimportationofrefinedproducts insteadofcrudeoil for processing inthe inefficient, and later closed oil refinery (closure made possible by the upgrading o f the oiljetty) and (ii)actual surcharges imposed by the shipping lines on D S M port being substantially lower than predicted by the SAR's simulation model. The substantial increase intraffic inrecent years (see below) means that the ERR and the NPV are higher than estimated inthe ICR. 3.13 The ICR estimated the financial rate o fretum (FRR) at 8 percent, lower than the SAR's 14percent and consistent with the drop inthe ERR. Inview of the improved traffic performance inrecent years, the FRR can be expected to be higher than estimated inthe ICR. 3.14 Traffic, operation, and financial performance are discussed below. 3.15 Traffic.Total dry cargo by 1997 (the last year o fthe S A R forecast) was considerably lower than forecast, mainly as a result ofthe loss o f transit traffic following geopolitical developments inEastern and Southern Africa (Table 1). By 2003/04, the DSMport hadregainedthe lost traffic andhadpracticallyreached the SAR forecast for 1997. Container traffic was also considerably below expectations in 1997. However, by 2004, mainly as a result of the improvedperformance o fthe container terminal achieved bythe concessionaire, total container movementswere 70 percent higher than the S A R forecast for 1997, andtwo and one halftimes the actual 1997 movements. Growth of container movements is expectedto continue to increase at a fast pace in2005. Table 1: Traffic at the DSMport 1988 1997 1997 2001/02 2003 2004 Actual SAR Actual Actual Actual Actual target Total Dry Cargo Traffic (milliontons) 2.1 3.3 1.8 2.5 3.1 Na Total containers(thousand) 48 152 103 178 207 260 Source: SAR, TICTS,THA 8 3.16 Opcnrfions. The container tcrminal's operational efficicncy has substantially improved since the terminal was concessioned, as reflected by the drop in dwell time' and the increase in the number of container moves per hour per crane (Table 2). The latter indicator was in 2004 at a level comparable to many ports in industrialized countries. Table 2: Operational Indicators at the DSM port 1989 1992 1997 2001 2002 2004 Actual SAR Actual Actual Actual Actual target Overall Dwell Time (number of days in port) 23 16 34 17 16 16 Container Moves per hour (per crane) 10-16a/ 12.5-20 14 19 20 23 aIDepending on type of crane Source: THA, TICTS, SAR 3.17 Other signs o f improved efficiency include port cargo handling rates and staffing. Inaccordance with the concessioning contract, port rates for handling containers have decreased 3 percent per year. The contract stipulates that rate reductions will happen during the first five years o fthe lease; therefore, no further rate reductions are expected. I A further indicator o f efficiency improvements is the staffing at the container terminal. . While there were some 600 staff before the concession, the current staffing i s 420. 3.18 Despite the efficiency improvements, congestion at the terminal has developed in2005 due to lack o f railway capacity for moving containers out o f the port. This has caused concerned maritime conferences (shippinglines) to threaten the imposition o f shippingtariff surcharges for the DSMport. 3.19 The improved operations ofthe container terminal under the private operator, coupledwith increasing lack o f landtransport capacity to move the containers inandout oftheport, hasinducedshippersto finance purchase or repairso frailway wagons andpurchase of large trucks. 3.20 Port operational efficiency is also affected by efficiency of the Customs. The introductiono fthe UNCTAD-developedAdvance Cargo inComputerizedand DocumentationSystem (ASCUDA) represented an important step incomputerizing customs management, including the handlingo f customs declarations, accounting procedures, and transit documentation. However, customs efficiency has beenhindered bytwo factors: (a) changes incustoms procedures and (b) the number and skillof customs clearance agents. A new destination inspectionsystem put inplace inJuly 2004 (replacing a pre-terminal inspection) has generally resulted inlonger clearance times and, therefore, longer container dwell times. In 2005, a new scanner-based system o f container inspection has been at the center o f controversy, as some shippers regard the system as the source o f increased clearance time. The large numbers o fclearing agents are also a burdenon customs clearance, especially as many o fthe agents lack professional knowledge and experience. By some estimates, there are today over 300 clearing agents, while an efficient operation would probablyneedno more than 30 to 50 licensed agents. 2. The dwell time is the durationof the stay of the container inthe port. 3.21 Fiirtancinl. `I'he financial performance of thc container teniiinal differs, dependingon whethcr otic looks at THA's view or the government's perspective. According to THA's cstiniatcs, prior to privatization thc container terminal generatcd about Tsh 11,400 billion net revenues for THA. Thesc figures are impossible to validate since THA's financial statements do not include separatc figures for the individual ports, even less parts of a port, such as thc container terminal. With the concession, THA's revenue from the terminal consists of rent and royalties. This revenue has increased from Tsh 4,100 billion in 2000/01 to Tsh 6,400 billion in 2003/04. These figures would indicate that because o f the privatization THA has experienced a net loss on the order o f US$5 million per year. However, Tanzania lntemational Container Services Ltd. (TICTS) figures show that over the time o f the concession it has contributed more than US$22 million to THA in rental and royalties, and a further US$30million to the government in taxes and levies. Since taxes and levies, which THA did not pay when it operated the terminal, exceed the amount paid inrental and royalties, the financial benefits for the government, including THA, would be at least on the order o f the net revenues THA claimed it had from the container terminal operations. Further, the improved efficiency o f the terminal has brought significant economic benefits to Tanzania and its neighbors inthe form o f reduced tariffs, lower dwell time, and more efficient port operations overall, and has resulted in fast-growing container traffic which will further increase revenues for THA and the government. Institutional DevelopmentImpact 3.22 Institutionaldevelopment i s rated substantial.Concessioning of the container terminal has beena major achievement, and has resulted inmajor gains in efficiency. The introductionof the customs management systemASCUDA, has modernized the handlingo fmanifests and customs declarations, accountingprocedures, transit and suspenseprocedures, and it generates useful trade data. 3.23 A further institutionaldevelopment impact helped bythe project was the reform o f the oil sector, with the closing o f the inefficient oil refinery that was made possible by the upgradingof the oiljetty Sustainability 3.24 Sustainability is rated likely. Infrastructureand equipment financed under the project are ingood condition five years after project closing, andprivate operators normally give priority to ensuringthat proper maintenance i s camed out regularly. A potentialproblem i s that the pavement o fthe container terminal that appears to be damaged by a 6-high stacking o f containers (instead o fthe original assumption of 3-high stacking) necessitated by the steep increase incontainer traffic and the limited container storage areas. However, given the importance for the concessionaire o fhaving the facilities ingood shape, an agreement likely will be reached betweenthe concessionaire and the THA for a full repair and future upkeep o f the terminal. Bank Performance 10 3.25 Bank pcrfonnance is rated satisfactory. The project was generally well prepared and the Bank respondedquickly when it was necessaryto make changes in direction, most notably the addition of the concessioning objective. Several other changes were made to project components, but those changes were small relative to the whole project, and were mostly the result of evolving conditions in the port. 3.26 Thc project was mostly well supervised. Supervision missions were frequcnt and addressedthe key project issues promptly and decisively, although for a period of about three years (1993-1995) missions consisted o f only a port engineer. The project had two especially difficult dimensions for the Bank team: (a) dealing first with two (THA and Customs) and later with a third (PSRC) implementing agency, which had substantially different responsibilities and (b) coordinating six co-financiers. 3.27 The Bank team devoted considerable time and performedwell inthese two dimensions. Comments by the three implementing agencies at project completion showed a clearly positive assessmentof the Bank team's role duringimplementation. The only , area noted (by Customs) as weak was the need to improve the speed for prior review and the provisionofno objections to help facilitate the procurement process. 3.28 Supervision ratings duringimplementation appear to have beenoverly soft. At no point was the implementationprogress or development objective rated less than satisfactory. However, project documentation suggests that at times implementation performance was not satisfactory. For example, a supervisionreport in 1994,3three years into implementation, notes that the operational performance o f THA andDSMwas poor and deteriorating rapidly, that there is `management crisis' inTHA and that the Customs component o fthe project was dormant. This statement suggests that at least the development objective rating should have been rated as unsatisfactory. Borrower Performance 3.29 Borrower performance i s rated satisfactory. The three different implementing agencies performedgenerally well, although there were weaknesses at , times, especially inthe earlyyears, as notedinthe supervisionreport referredto above. 3.30 Theproject's coordinatingunit (PCU) was inadequate inthe beginning, but later performedsatisfactory with the assistance of technical assistance and training. Quarterly reports were well prepared and timely. Audit reports were mostly submitted on time andcovenants mostlymet. 3.3 1 Thanks to its net revenues, THA contributed counterpart hndingon time andinthe amounts required, thus preventing a blockage inthe procurement process. 3.32 The government's decisionto privatize the container terminal was crucial for the project to achieve a successful outcome. Up to that time, while procurement had been generally satisfactory, THA's operational efficiency hadbeen erratic, with periods o f deteriorating performance, especially as noted inthe section above. 3 .Back to Officereport datedAugust 18, 1994. 1 1 3.33 `['he dccision to start port privatization with thc conccssioning o f the container terminal was appropriatc, and upon completion o f the project the PSRC has continued to preparc thc privatizationo f the rcmainingparts o f the port. 4. Outcomes of the Railway Project Outcome 4.1 Outcome is rated unsatisfactory based on ratings o f substantial for relevance, and modest for efficacy and efficiency (discussedbelow). The key operational targets were not met and the railway's financial performance showed only modest improvements. More significantly, concessioning o f the railway to a private operator was not achieved within the timeframe o f the project, and had not been achieved by April 2005. There were, however, some positive results, such as improvements o f railway infrastructure and o f operations. Rehabilitationo f the track significantly improved the safety and reliability o f railway operations. Repairs to locomotives and wagons, coupled with improvements in operations management resulted inbetter operational efficiency for most o f the project period. The railway gained traffic and reached its highest level by the end of the project. Significant progress was made toward the platform on which to privatize the railway. However, the bidto secure a private operator failed and without this inplace the railwayremains unsustainable with the present level of funding. It appears, though, that the experience with the failed first biddinghas beentaken into account in the designo f second round o fbidding(supported underthe on-going ongoing Central Transport Corridor Project), which establishes a more conducive environment for private sector involvement. Relevance 4.2 Relevance i s rated substantial.TRC i s essential to the Tanzanian's economy as well as to Tanzania's neighboring countries, which use TRC's services to reach the DSMport. The road system, at the time o fproject preparation and even today, i s not a viable altemative as it consists o f a very limited network and inmost places i s not a cost-effective competitor to the railways. Inthe early 1990s, the weak performance and capacity o fthe railway was causing diversion o f traffic to the more expensive road services, and this diversion was estimated to cost some $40 millionannually to the Tanzanian economy. At the same time, Tanzania's transport system, and especially the DSMport, for which TRC is themainfeeder, remains amajor foreign exchange earner. It i s also important for the delivery o f assistance to vulnerable populations, as noted in Section 3. 4.3 Therefore, rehabilitating the railway facilities and improving its management were relevant activities. The project's main component, rehabilitation o f some 200 kilometers o ftrack, representing close to 40 percent o fproject cost, was a priority, as were practically all the other physical components and institutional components. 12 4.4 The projcct's basic premise that a parastatal entity such as the railway could have been rcstructured and achicve satisfactory efficiency levels within the span of a single project appears today as questionable. The appraisal postulated that introduction of` a performance agreement betwccn the government and the TRC would cnsure that the efficiency objectives were met. The underlying assumption was that operational and financial targets and a good monitoringsystem would force TRC management to iniprovc efficiency to meet targets, and force the government to provide TRC with sufficient operating and financial autonomy. The latter would be achieved through public service obligations (PSO) regarding the railway's non-commercial services, with the govemment committed to provide TRC subsidies designed to cover the gap between the tariff charged for those services and the actual cost of runningthe services. EfJicacy 4.5 Efficacy o f the project is rated modest because most, but not all, of the project components were carried out as expected. Inparticular, the objective o f concessioning TRC to a private operator was not achieved. 4.6 The civil works, representing more than 50 percent o f the appraisal cost, were completed as expected, resultinginthe relaying o f 200 kilometers o f track, rehabilitation o f 1,000 kilometers of track and welding o f 560 kilometers o f rails, and the reconstruction o f 52 bridges (22 originally included inthe project and 30 additional bridges rebuilt following the ElNiiio flooding). Inaddition, 16 spots (totaling some 5 kilometers) o f track damaged by ElNiiio flooding were repaired inrecord time, allowing fast restoration o f service. 4.7 The civil works were completed at costs substantiallybelow original estimates, and allowed for the expansion o f the investment into rolling stock and locomotives. Some 2,400 wagons were overhauled (1,750 expected at appraisal), and 67 new tank wagons procured (none at appraisal). While only 26 locomotives were overhauled, 15 mainline and 11 shunting (fewer than the 31locomotives foreseen at appraisal), the unit cost o frepairs was substantially higher, and resulted inthe investment inlocomotiverepairs almost 3 times as large as originally estimated. No IDAhndswere allocated to wagons and locomotives. 4.8 Various types of equipment (track maintenance, workshops) were procured essentially as expected, while some downgrading was made inthe expected communications systems, as it was found that there was insufficient traffic to justify renewal of communications systems intwo railway sections. 4.9 The intended technical assistance (TA) services were substantiallymodified uponthe government's decision to concession TRC. Instead o fproviding advisory services to TRC management, the TA was shifted toward direct operational managemeqt. This assistance continued well after project closing, under co-financing providedby Belgium.The redirectedTA provedextremely effective, andresultedinrecordtraffic levels in2002 and 2003, with a decline in2004 mainly as a result of lack o f hdingto continue the program o f locomotive andwagon repairs. 13 4.10 The intendcd conccssioning of thc railway did not take place within thc period of the project, and had not been achieved by April 2005. Factors explaining the lack of succcss in the concessioning process are examined in Section 5. Efficieri cy 4.11 Efficiency o f the project is rated modest.The economic rate o f retum, while not recalculatcd in this PPAR, is likely to be around 10 percent. The ICR's estimate of 14 percent, while lower than the SAR's estimate o f 18 percent, still appears to overestimatc the economic return. Actual traffic was some 40 percent below S A R estimates (1.34 million tons actual versus 2.16 million tons inthe S A R for 1995, the last year of the S A R forecast). The traffic shortfall alone should bringthe ERR substantially lower than the S A R estimate. Further, while most assumptions for the economic analysis inthe ICR appear to be correct, two assumptions appear unrealistic and likely to overestimate the ERR: (a) investments inpassenger equipment are not counted on the basis that such equipment is not an economic investment, and (b) investments in infrastructure are estimated to have 50-year life plus residual value, which i s overly optimistic. 4.12 Railway operating efficiency was, as shown in Table 3, consistently below expectations, even when compared with the generally lower targets established inthe 1995 Midterm Review (MTR). Some efficiency indicators peaked around 1999, when one indicator, locomotive availability, surpassedfor only once the MTR target. Inthe opinion o f several stakeholders interviewed for the PPAR, the better 1999 performance was due to the strong technical assistance inserted inTRC's operating department. I t is also noteworthy that freight traffic reached a record level in2003, although that level was still substantially below the end-year forecast o fthe S A R (1995) and MTR (2000). However, by 2004, most indicators had deteriorated again, largely because (a) practically no investment inspare parts andrepairs to locomotives and wagons hadbeencarried out since project completion, and (b) the margin for improving or even maintaining operating efficiency'onthe basis o f better management appeared to be exhausted. Declining staff morale due to the delays and uncertainties o f the concessioning approach were also factors explaining the drop inefficiency. 14 Table 3: TRC's traffic and operational performance Year 95 96 97 98 99 00 01 02 03 04 Traffic F 2.16 (million tons) M 1.36 1.45 1.54 1.60 1.66 1.83 A 1.34 1.24 1.07 0.96 1.18 1.17 1.35 1.45 1.44 1.33 Loco reliability F 50.0 (000 kilometers) M 13.0 17.0 20.0 25.0 30.0 35.0 A 10.1 10.5 12.6 10.6 9.9 7.6 6.4 7.8 4.1 2.7 Loco availability F 70 (%) M 50 57 56 56 61 61 A 46 52 50 50 68 58 42 52 61 55 Wagon reliability F (000 kilometers) M 1.7 1.8 1.7 1.7 1.7 1.6 A 1.9 1.7 1.8 1.3 1.3 1.o 1.0 1.1 1.I 1.I Wagon turn F around time 12.5 12.0 11.0 10.5 (days) M 13.0 11.5 A 16.0 17.0 17.0 12.0 14.0 12.1 11.9 12.3 13.9 13.9 F= Performance Targets (PF) in SAR end in 1995.Other SAR forecasts extend to 2001, but they are not fully compatible with the PFforecast. M=reduced targets at Mid-Term Review A=actual 4.13 The comparison o f actual versus target operational performancemay be unfair to TRC because many targets were set unrealisticallyhigh.The extreme case i s locomotive reliability, where the distance between breakdowns was expected to improve more than five times, from about 9,000 kilometers in 1990, to 50,000 kilometers in 1995. The very early supervision missions in 1992 and 1993 reportedthat targets had been adjusted downwards to more realistic levels. 4.14 The railway's poor efficiency in2004/05 i s exacting a highcost to the user o frailway services. For example, becausethe railway does not have the capacity and i s unable to carry general dry cargo betweenDar es Salaam andDodoma, trucking must be used for this section. The WFP estimates trucking over this section to cost food relief operations an extra US$1.6 millionper year. 4.15 The financial return for the project-financed. statements was not estimated in the SAR. The ICR, usingreasonable assumptions, estimates the FRR at 4 percent with informationthrough 2002. This estimate i s likely to remain valid today. 4.16 The financial perfonnanceo f TRC showed some improvement over the life o f the project, although the gains were less thanexpected. The working ratio (working costs over working revenues), improved from 0.90 in 1990to 0.70 inthe late 1990s and early 2000s. This improvement i s significant. However, with the investments made under the project and expected increased cost efficiency, especially since traffic increased, further improvements inthe working ratio would have been expected. 15 4.17 `IXC's provision of`non-comtiicrcial scrviccs is ccrtain to Iiavc affcctcd TRC's financial pcrfoniiancc. Thc financial implications for thc TRC of its non- comnicrcial services wcrc not quantified in tlic SAR, but they werc deemed sufficicntly important that thc 1091 Mcmoranduni o f Undcrstanding between thc goveniment and TRC, and a subsequent Pcrfomiancc Contract committed the government to provide TRC with appropriatc compcnsation for such scrviccs. Undcr such agreements, thc governmcnl undertook to make thc compensation paynicnts to TRC not later than 3 months after the submission of'the claims. By 1003, the TRC had submitted its first claims for compensation on two non-commercial lines (Mpanda and kid at^),^ and more claims werc submitted latcr. Yet, it appcars that no compensation was provided by govcmment to TRC through the life o f thc project. 4.18 The Railtracker program, described below under institutional development, has helped improve efficiency o f TRC and helped large users monitor their shipments, as the program makes available (almost) rcal time information on shipments and rolling stock. Institutional Development Impact 4.19 Institutional development impact i s rated substantial. While concessioningo f the railway was not achieved, muchprogresswas made inthis direction. Railway concessions are highly complex, and are especially difficult to accomplish inrailways with relatively low traffic densities, such as those on the TRC, and where assets still need significant rehabilitation. The concessioning issues are discussed inmore detail in Section 5. 4.20 The creation o f the Commercial Department as envisaged has changed attitudes and has been instrumental inthe railway's reaching high levels o f freight traffic. The installation o f Railtrack, an UNCTAD-developed program to track all movements and technical status o f locomotives and wagons, has been key inhelping improve operating efficiency, although not at the levels expected, and provide better service to TRC's customers. TRC management uses the Railtrack report (some 30 pages providing informationby station, type o f equipment, shipments, etc) daily. Large TRC clients such as the World Food Program use Railtrack regularly to monitor the status o f their shipments. Clients access Railtrack information through TRC's Railtrack website, TRC Control Room, or via telephone. 4.21 There were also other institutional impacts. Complying with conditions o f effectiveness, TRC stopped managing non-railway business: it leased TRC's road and hotel services and franchised TRC catering services. Inaddition, preparations are advanced for TRC to hive o f f its Marine Services, with lake ports to be transferred to the THA and ferries to be sold. While TRC is still highlyoverstaffed, from the time of project appraisal through project completion TRC nearly halved its staffing levels. 4 .Supervision Report ofNovember 1993. 16 Sustainability 4.22 Sustainability is ratcd non evaluable. Because o f lack o f budgetary allocations since donor financing ended when the project closed, TRC has been unable to carry out required maintenance o f locomotives and rolling stock in recent years, and, short o f spare parts, operational performance has deteriorated. Ifthese conditions do not change, further deterioration both o fphysical facilities and o f performance would be likely. 4.23 However, the second round o f bidding to transfer TRC to a private operator i s quite advanced, and there are good prospects that a concession will be awarded soon. If andwhen a private operator takes over, maintenance and operational efficiency i s likely to be satisfactory, based on international experience with privately-managedrailways. The new operator will needto give priority to rail and equipment rehabilitation. It will also needto modemizethe Railtrack computer system, which i s DOS-based and needs to be converted into a Windows-based system as it is increasingly difficult to find DOS- based equipment. The conversion is inexpensive. 4.24 Onbalance, it is not possible at this stage to take a firmer view o f the sustainability prospects. Bank Performance 4.25 Bankperformance is rated satisfactory. Project conception consisting o f reforming the railway as a parastatal company was still the state-of-the art when the project was appraised in 1991,The intended reform was broad inscope, and covered most management aspects. The designand components proved mostly correct, and few changes to the key components were requiredduringimplementation. The Bank was also flexible in usingproject funds to help the emergency repairs to the track damages caused by ElNiiio floods. The Bankteam was effective incoordinating from appraisal through project completion the cofinanciers involved with the project. 4.26 The Bank effectively reactedto the government changed policies on parastatals and privatization, andtook the necessary steps to change direction and support launchingthe process. The Bank organized a useful field trip for key government and railway officials, which included visits to railway concessions inAfrica and Latin America. 4.27 On the negative side, the Bank appears to have been overly optimistic when setting performance targets (traffic, availability, andperfomance o frolling stock) and in adopting as a project target the government's goal to award a concession for the railway beforeproject closing. Bank also bears responsibility inthe selection o f inadequate transaction advisers (Section 5), as it approved the short list o f consultants to be invited to submit proposals. Borrower Performance 4.28 Borrower performance i s rated satisfactory. The implementingagency, TRC, performed at a high level inimplementing the project. It managedto achieve 17 substantial cost savings in the track coniponcnt, which allowcd it to cover thc cost of thc works rcquired to put the railway back in operation in the sections damaged by El Niilo flooding. Thc TRC created a new Commercial Department and substantially improved its commercial oricntation. Although below targcts, TRC also substantially raised operational efficiency. Traffic reached record levels. 4.29 The borrower complied with its commitment to have TRC hive off its various non-core businesses, as well as to significantly shnk (40 percent) TRC's personnel. The borrower's main deficiency was not complying with its financial obligations under the Memorandum o f Understanding and Performance Contract, especially its contribution to compensate the TRC for the provision of non-commercial services. Such a commitment i s made inmany railways in developing countries, but government's rarely comply with it. Had the government complied with this obligation, TRC would have been able to better maintain its equipment, and its financial situation would have improved, but TRC would not have become a profitable enterprise. Therefore, the government's realizationthat a parastatal framework was basically inadequate to attain satisfactory performance andthe decision to privatize operations was critically important. Further, the government did move to transfer the TRC to a private operator. While the expected concession award was not achieved within the period o f the project as the government had wished, much progress was made. The government's decision and actions regardingprivatizationdeserve credit. 5. The Port and the Railways Concessions-Contrasting Experiences General 5.1 Following the discussion of the results o f each project, this section discusses and compares the concession experience inboth the port andthe railways before lessons are drawn. The container terminal o fthe D S Mport (the `Terminal') was leased to a private operator in2000, but the attempt in2001 to find a private operator for the railways failed, and a new round o fbiddingis underway. The Government'sMove TowardsPrivatization 5.2 The government decidedto privatize the SOEs, includinginfrastructure parastatals such as the ports and the railways, as part o f its parastatal sector reform program. The task was entrusted to the PSRC. The PSRC is similar to entities created in other countries to take a consistent approach to privatization andto consolidate inone agency the expertise requiredto design andcarry out the privatization process. 5.3 TheBank supported strengthening o fthe PSRC through Credit 2507, * approved inFY93 and closed inFY02.The Bank also provided PSRC funding from the Port Modernization andthe Railway Restructuringprojects to finance the privatization process for the two enterprises. 18 Regulation of Transport Services 5.4 As port and rail services are privatized, monitoringof the concession contracts and regulation of services will become essential. For the port, the Tanzania Harbours Authority (THA) will monitor compliance by the private operator with the lease contract. For the railway, a new entity will be created labeled the Asset Holding Corporation (AHC) which will be responsible for railway assets and will monitor compliance with the concession contract once a concessionaire is inplace. Inparticular, the AHC will be the interlocutor to the rail concessionaire regarding rates and services for passenger services where the railway is the sole provider of transport services. 5.5 Regulatory functions for both the port and the railways are the responsibility o f the Surface and MarineTransport Regulatory Authority (SUMATRA).SUMATRA'S areas o f responsibility are safety, technical standards and eventually economic if disputes are not resolved in other ways. TransactionAdvisers 5.6 Consultants to act as Transaction Advisers were recruitedby the PSRC to design approaches to the privatization o fthe port and the railway, prepare the bid documents and assist with bid evaluation and negotiations. Inall cases, the consultants were selected through a competitiveprocess and after the Bank approved the list o f consulting companies to be invited to submit proposals. 5.7 The PPAR missionfound a general consensus among government officials, management o fthe THA and TRC and major users o fports and rail services that the Transaction Advisers did not live up to the expected standardso f quality. Many questions were raised about the approachesproposed for the privatizationprocess, delays in submittingreports, andadvice duringnegotiations. Overall, it appears that the consultants advising on the privatization o fthe THA performed substantially better than the consultants advising on the privatizationo f TRC. 5.8 Regardingnegotiations between the selected private operator andthe government, some of those interviewedbelieved that negotiations generally are bound to be unbalanced, with the government transaction advisers rarely having the experience and knowledge o fthe business inthe depth ofthe private operator sitting across the negotiatingtable. Findingbetter qualified transaction advisers may be a critical issue in the preparation o f future concessions. Concession of Dar es SalaamPort 5.9 The Dar es Salaam (DSM) container terminal was built in 1984by conversion of general cargo berths. The conversion was done under a two-phased operation funded by Bank projects (Port Rehabilitation Project, Credit 1536, and the Port ModernizationProject reviewed inthis PPAR). The terminal's wharf can accommodate two ships o f about 40,000 GRT each. 19 5.10 Privatizationof the container terminal was part of the overall privatization processof thc `FHA. Thc govcrnnient's policy on privatization of the ports is for the government to maintain 100 perccnt ownership of THA's assets while the commercial activities are privatizcd in thc form o f concessions, leases or joint-ventures. 5.1 1 The privatizationprocess was launched by a THA CommercializationStudy and a subsequcnt PrivatizationReview Study, both funded under the Port Modernization project. The latter study recommended awarding the concession o f the Terminal to a single operator. The process of privatization took 22 months from start of preparation o f the bidding document by consultants until award o f tender in April 2000 to the selected winner. Investment Requirements 5.12 The two-phased container development cost US$126 million, and was completed inthe late 1990s.No major investments were required for the Terminal at the time of the bidding Labor Issues 5.13 The Terminal's staffof600 prior to the concession was reducedto 420 by the private operator. Practically all the private operator's personnel was picked from THA's staff, with the exception o f a few financial systems experts where THA lacked qualifiedpersonnel and the operator had to bringthem from outside THA. Compensation for retrenched staffwas paid for from THA resources. 5.14 Underthe private operator TICTS, staff inadditionto the salary get an annualbonus and distribution o f 5 percent of TICTS' annual dividend. TheBidding Process 5.15 The biddocuments statedthat the consortium offering the highest annual fee payment to THA would win the bid. Inaddition to the fee, the bid documents required the private operator to pay THA a royalty per container moved, and to establish a Performance bond infavor o f THA Bidders 5.16 The biddingprocess from letter ofintentionto award ofbidscan be summarized as follows: 7 firms submitted a letter o f intention 5 firms were short listed 4 firms submittedbids 2 o fthe 4 bids were valid bids 20 5.17 The winning bidder was ICTS-Manila, a Philippines firm. After about otic year o f opcrations, Hutcheson HK, a very large worldwide port operator, bought ICTS opcrations worldwide, including the DSMcontainer terminal. Hutcheson was one of thc 7 firms that had originally submitted a letter of intention, but did not submit a bid. 5.18 The operator is a consortium that includes a local partner (not experienced inports, but with financial experience). Term 5.19 The concession's term is 10 years. This term for container terminal concessions is common inAhca, but shorter than inother regions. Inthe case of DSM port, the relatively short term was decided on the basis that lack o f credible operating and especially financial data on the container would play against getting a good deal for THA and the government. After 10 years o f a private operation, another round of bidding should yield higher revenues for the government and could be for a longer term. A longer term entices the operator to make more investments leading to higher productivity and better service to clients. Key Leasing Contract Provisions 5.20 The key contract provisions are the following: Fixed rental: US$3.68 million per year; royalty: US$ 13/TEU (20 foot equivalent container); and, a performancebond o fUS$ 5.0 million infavor of the THA. Results 5.21 The main results o f the private operation of the Terminal are: - Throughput increased from 126,000 TEUs in2000 to 260,000 TEUs in2004, a - 106percent increase; Transshipment o f containers to other destinations increased from 5,000 TEUs in, - 2000 to 56,000 in2004, a 1020percent increase; Gross crane rate, the number o f containers movedper hour per crane, improved - from 8 in2000 to 23 in2004; Container dwell time (stay o f a container at the port) dropped from 45 days to 12 - days; There were also gains inimproved customer relations, improved availability o f equipment and expanded training for operational, engineering and finance staff, Future Concessionsof the DSMPort 5.22 The following future concession packages, to be awarded separately are beingprepared for bidding: I.Generalcargopackage,includingGeneracargoberths(8),grainterminaland workshops 21 11. Oiljctty 111. Singlc Buoy Mooring 5.23 Discussions with people knowledgeable of the port business in Tanzania suggest that international corporations are unlikely to be interested in the general cargo concession, but that it may attract local entrepreneurs.However, the prevailing opinion is that awarding a concession for the general cargo berth is likely to take a long time. 5.24 In2010, the current leasecontract for the operation ofthe Terminal expires, and a new lease or longer-termconcession would needto be signed. Concession of the Tanzania Railways Corporation (TRC) 5.25 Tanzania has two railway systems, the TRC, that serves the central and northern parts o f the country as well as transit traffic from Burundi, Rwanda, DRC and Uganda and TAZARA, that serves principally Zambian traffic and some local traffic in Southern Tanzania. 5.26 The TRC network is approximately 2,600 kilometers o fsingle-track meter gauge. The network's two main lines are: (i)the Central line (Dar es Salaam to Tabora, ' 850 km, one line from there to Kigoma, 453 km, and another line to Mwanza, 386 km), and (ii) Tanga line, that runs from Tanga to Moshi and Arusha, with alengthof 430 the km.Inaddition, there are 3 branch lines totaling some430 km.The Central andthe Tanga lines were built at the beginningo fthe century, while the branch lines were built inthe 1980s and 1990s. 5.27 The TRC started movingtoward privatizationo fits non-core assets inthe early 199Os, underthe RailwayRestructuring project, when it leased its hotels, contracted out catering services, hived offmarine services and corporatized the Marine Services Company. 5.28 Privatization o fthe TRC rail network was also launchedunder the Railway Restructuring project, inline with government's decision to privatize its state-owned enterprises. The project funded international advisers to analyze possible strategies for carrying out the privatization o f TRC. InMay 2001, the govemment decided to restructure TRC to allow for award o f a vertically integrated concession comprising TRC's whole rail network to a private rail operator. The government decided to create an Asset Holding Company (AHC) to retain ownership o fthe railway infrastructure assets, while the rolling stock would be sold or leasedto a private operator. 5.29 Since the track i s to remain the responsibilityo fthe government through the Asset HoldingCo, the concession would not requirethe operator to returnassets at the end o fthe concession inapre-determined physical condition, a condition that is common inthe concessions ofroadprojects. 5.30 Some stakeholders inTanzania opined that privatization o f TRC should proceed more slowly, startingwith a management contract that would have improved condition o f facilities, improve management andprepare,foran eventual concession. 22 Irtvestmertt Requiremerits 5.3 1 While the Railway Restructuring project financed substantial improvements to the rail track, substantial additional investments are required to complete rehabilitation o f the TRC track to a satisfactory condition. The main need is to fully replace the rail track between ltigi and Tabora, about 200 km. The cost is estimated at US$33 million. Funding for this work is available from the ongoing Bank project Central Transport Corridor Project (Credit 3888). The project considers several approaches to carry out the required improvements. Under some o f the approaches, the government would fund the improvements using funds from the credit; under other approaches, it is assumed that the concessionaire would be prepared to finance the cost o f the civil works. 5.32 Inaddition to the track investments,rolling stock and locomotives need rehabilitation and repair, inpart becausepractically no government budgetary allocations have beenprovided to TRC since the decision was made to privatize TRC in 1997. Labor Issues 5.33 TRC historically has been significantly overstaffed. While TRC personnel was significantly reduced between 1990 and 2004 (from about 14,000 to some 8,500), a private operator would be expected to further shrink staffing. 5.34 Most of the staff to be retrenched are track maintenance personnel. TRC uses 0.8 staff per kilometer o f line for track maintenance, which is considered not excessive for African railways. The concessionaire would have the option to outsource such work, or further mechanize track maintenance. Mechanization, however, is expensive (investments o f some US$7.5 million would be required) andthe experience with the existing track maintenance equipment is poor, as the five existing tamping machines are currently out o f service. 5.35 Addressing the staff retrenchment issue has been one o fthe mainproblems inthe launchingofthe biddingprocess for the TRC concession. Legislationpassed duringpreparation ofthe concession improvedthe compensation for retrenchedstaff and allowed to continue with the preparation o f the bidding.The law dictates a higher relative compensation for the staff at the lower salary levels. 5.36 Staffretrenchment has beena major issue inmost railway concessions elsewhere. Inseveral cases, governments have requested financial assistance to help . finance the retrenchment. Some Bankprojects have been solely devoted to providing such financing. The Tanzania government has beenreluctant to follow this approach, and no external fundinghas beenprovidedto help fund retrenchment programs for enterprises to be privatized. TheFirst Bidding Process 5.37 The first biddingwas launchedinDecember2001, with the Request for Pre- qualification proposals. The biddocument stipulated that the winning consortium would bethe one willing to pay the highest fixed annual fee to the government. Seven firms 23 subniittcd proposals, of which four wcrc prequalified. Inthe end, only one biddcr attcndcd the bidders confcrcnce (in October 2002) and intended to submit a non- compliant bid. Thc govcrnnient rejccted the bid. Why Did the Bidding Fail? 5.38 Several factors may explain the failure o f the first biddingattempt: Bidconditions: o Requirements for ahighvalue performance bond; an international rail operator to be part o f the concessionaire~sconsortium; and, the concessionaire to purchase the rolling stock o Availability at the same time o fother rail concessions inAfrica offering softer terms Government's unwillingness to negotiate with a single qualified bidder for fear it would hurt the credibility of the whole privatizationprocess 5.39 Government officials as well as private stakeholders interviewedby the PPAR mission believed that the first factor above was the keyreason why the bid failed. This was largely the responsibility of the transaction adviser, who appeared to lack the requiredexperience. As a result, the biddocument was not suitable for achieving a successful biddingprocess. TheSecondBidding Process 5.40 The secondbiddingprocess was launched inJuly 2003, with request for pre- qualificationproposals. A new Transaction Adviser was hiredto amend the bid documents used inthe first bidding. 5.41 As inthe first bidding, the decision criteriainthis second round will be the amount o f fixed annual fee the consortiumoffers to pay the government. Inaddition to . this fee, there will be avariable fee that will depend on the level o ftraffic. 5.42 The secondround o f biddinghas softened the requirements, by lowering the amount of the performance bond, not limitingpre-qualification to a freight rail operator providing at least 26 percent equity, intemational rail operators, andproviding the option for the private operator to purchase or lease TRC's rolling stock. Further, the new round offers the concessionaire the option o f getting World Bank Partial Risk Guarantee which it canuse with its financiers andwould protect the operator shouldthe Asset Holding . Companynot fully meet its obligations. Term, Bidders and ServiceIssues 5.43 The term ofthe TRC concession will be 25 years. This is a typical term for a railway concession. Forthe second round o fbidding, two bids from pre-qualified bidders were received on April 13,2005, and are currently being evaluated. Two branch lines which provide noncommercial services will needto be included inthe franchise under a 24 Public Scrvice Obligation (PSO) Agreemcnt. This is a potential problem givcn the govemment's lack o f compliance with PSO commitments with TRC under the project. Summary Comparison Between Port and Railway Concession 5.44 The ease with which the concession o f the DSMcontainer terminal was completed and the failure of the first bid for the TRC concession raise the question: why such a big difference inthe outcomes between the two privatization processes? 5.45 This section aims to answer this question, providing a brief comparison of' the two concessions and highlightingthe factors that favored one and hinderedthe other. Four factors appear to be the key to explaining the differences: (a) the profit potentialand risks; (b) the level of investments required, (c) the size o f the labor issue, (d) location o f assets Profit Potential and Risks 5.46 Port container terminals are normally money-makers, and the DSMterminal was no exception. Further, with worldwide expansion o f the containerizationrate, a well managed container terminal will have little risk that demandmay fall or be stagnant. 5.47 Incontrast, most Afhcan railways lose money and it is difficult to turn them into profitable enterprises. Further, because the road networks are still developing, the railway traditionally provides many services, especially for passengers, where no alternative transport service exists. Such services generally have been offered at unprofitable rates. Inconcessioning the railways, governments require that the private operator maintains such services and the existing rates, against a government commitment to provide the railway compensation inthe form o fpublic service obligations. However, experience shows, as happened duringimplementationo f the Railway Restructuringproject, that provision o f such compensation i s rarely complied with. Thus, a private operator would face significant financial risks when providing non- commercial services. Insuch cases, assistance from international lending agencies can help mitigatethis risk. I nvestments 5.48 The lower the investment the private operator will be requiredto make upfront, the more attractive the concession will be, and the more bidders will apply. This was the case o fthe port, where no major investment was needed since the container terminal was practically new at the time o f the concession. Further, the container terminal infrastructure was limited: just two berths and an area for stacking the containers. Cranes andrelated equipment were available, althoughthe private operator decided to purchase more modem and efficient cranes to increase capacity. Cranes are mobile equipment that the operator can at any time take out. 5-49 Bycontrast, railway assetsare large, bothinfrastructureandequipment. TRC's facilities are inneedo fmajor track repairs, costing tens o fmillion dollars. In 25 addition, the private operator, at lcast in thc first bidding was required to purchase any TRC rolling stock that it intended to use. Ifthe operator intendedto increase traffic, it would be rcquircd to purchase substantial additional equipment and sparc parts. Such investments requirements are clearly a deterrent. Governments should endeavor to secure financing to fund at least a part o f the required initial investments. Except for urgent repairs, concessionaires should make the investment decisions to ensure that they are cost effective. Labor 5.50 As parastatal companies, ports and the railways generally are overstaffed, and this was the case with the DSMport and TRC. However, there were significant differences in the magnitude o f overstaffing between the railway and the port container terminal. 5.5 1 While TRC has some 8,500 staff, which would be expectedto be reduced to about 4,000 when a private operator takes over, the DSMTerminal employed some 600 prior to the concession, and now has slightly over 400. Thus, the labor issue i s significantly smaller inthe case ofthe port, therefore involving significantly lower fimdingto provide adequate compensation to staffretrenched. The advantage o fthe Container Terminal i s even greater when considering that the Terminal i s a profit-making entity with enough revenues to fund compensation o f laid-off staff. Incontrast, TRC requires government subsidies andprovision of additional allocations to provide retrenchment compensation. 5.52 Inadditionto the financial aspectrelatingto compensation for staff retrenchment, the related social and political issues are significant and may translate into major problems for a private operator. Location of Assets and Ease of Management 5.53 The DSMcontainer terminal is located inTanzania's capital, and is concentrated inone specific location. This makes it easy for the management to supervise operations and attend promptly to any issues. 5.54 The opposite i s true for TRC. Railway facilities are scatteredover some 2,600 kilometers, and significant resourcesneedto be akcated for the maintenance o f the infrastructure andequipment. Monitoring the condition o fthe track and equipment, and the locationof equipment at any time normally requires significant humanand technical resources, including sophisticated systems such as Railtrack. 26 6. Overall Lessons Limits to the Improvement of Parastatal Companies 6.1 The port and the railway projects illustrate the difficulties o f improving parastatal performance and the limits o f what can be achieved. In the port, the differencc inoperational efficiency, staffproductivityand the quality of services betweenthe privatizedcontainer terminal and the performance as a public agency i s striking, and has led to a dramatic increase inthe level of container movements. Inthe railways, despite much financial and technical support from the project, and some improvement in performance, efficiency overall i s far from the targets anticipated at the start o f the project, and efficiency varied from one year to the next. Since rail traffic demand is essentially constrained by TRC's service, there i s little doubt that a private operator would improve capacity and ensure that the railway would carry as much traffic as it is available. Complexity of Railway Concessions 6.2 Concessioning railways inA h c a and other developingregions to private operators i s hard to achieve because such railways generally lose money, are hugely . overstaffed, require major investment infixed assets and equipment to attain a satisfactory operating condition, and are saddled with provision of non-commercial services that governments generally fail to compensate. Resolvingthese issues, which is a precondition to launching a privatizationprocess, often require long and protracted decisions involving both the executive and legislative branches o f government. Further, findingthe right balance inthe design o f aconcession bidbetween government interests and incentives to private operators to venture into a difficult businessi s problematic. Stretching Objectives and Targets 6.3 Setting unrealistically highproject objectives and target i s not useful. While some `stretch' intargets can encourage better performance, too big a stretch leads to failed outcomes. That is the lesson from the railway project, where targets were set too highfrom thebeginningoftheproject, andthe sameapproach continuedwhen anew objective was added. Original traffic, operational efficiency and financial targets were , clearly too high, to the extent that one o f the early supervision missions decided to lower some o f the targets. When the privatizationobjective was incorporated, the expectation that concessioning o f the railway would be achieved beforeproject closing was risky due to the complexity o f railway concessioning. Thus, launchingthe biddingrather than awarding a concession contract would have been a morerealistic target. Setting too high targets was bound to lead to failed outcome, as it happened. Incontrast, the objective to concession the container terminal o fthe Dar es Salaam port was feasible: it was a simpler concession, the labor issue could be easily resolved, and the port container business is . known to'attract private operators because it is generally profitable. A conclusion is that there was no reason to set the same concession expectation inthe port and inthe railways projects. 27 'I'hc primary lessons learnt from thesc projects are that: Thc frcedorn to opcrate according to market principles potentially makes the operational efficiency o f privately run concessions superior to that o f parastal organizations for ports and railways; The concentration of investment with high volumes of traffic, lower operational costs and relative autonomy from government, generally makesport concessions a lower risk for investors than railways. When railways are likely to incur losses andor are inadequately compensated for uneconomic services, investors will be hardto attract; The design o fprojects preparingparastatalcompanies for privatizationshould take into account the capacity and commitment o f government and management to carry through the reform process. Targets and timetables should be realistic. Special care shouldbe placed inthe selection o f qualified consultants preparing bidding documentation 29 Annex A. Basic Data Sheet RA1I,wAYS RESTKIJ(:TI7KING PROJEC:T ( REDIT 2267) c Key Project Data (uuiounts in US$million) Appraisal Actual or estimate current estimate Total project costs 275.2 222.1 Loan amount 76.0 64.6 Cofinancing 89.6 128.7 Cancellation NIA N/A Economic Rate of return % 18 10 Project Dates Original Actual Identification/Preparation 11/26/1986 Appraisal/Negotiation 06/3011990 BoardApproval 0611311991 0611311991 Effectiveness 04130/1992 04/30/1992 Closing 12/31/ I999 12/31/2002 Staff Inputs ActuaULatest Estimate No. of Staff Weeks US$ (`000) Identlfication/Preparation 81.I --205.4 -- AppraisaVNegotiation 57.8 163.5 Supervision 224.1 912.1 ICR Total 363.0 1.281.O 30 Mission Data Date No. of Specializations represented Performance ratlng (monthlyear) persons Rating trend IdentlficationlPreparation 08/12/1988 2 Financial Analyst (11; Railway Engineer(I) 01/30/1989 2 FinancialAnalyst (1); Railway Engineer (1) 0712411989 3 Financial Analyst (1); Railway Engineer (1); Operations Analyst (1) AppraisallNegotlation 06/29/1990 4 Financial Analyst (1); Railway Engineer (2); Operations Analyst (1) 01/29/1991 2 FinancialAnalyst (1); Railway Engineer (1) 04/03/1991 3 FinancialAnalyst (1); Railway Engineer (1); Operations Analyst (1) Supervision 11/04/1992 3 Transport Economist (1); 2 2 FinancialAnalyst (1); Railway Engineer (1) 05/12/1993 3 Transport Economist (1) 2 2 FinancialAnalyst (1); Railway Engineer (1) 02/02/1994 4 Sr. Inform. Specialist (1); 1 2 Transport Economist (1); Sr. Railway Engineer (1); FinancialAnalyst (1) 0712211994 2 Sr. Railway Engineer (1); 5 5 FinancialAnalyst (1) 02/06/1995 3 Sr. Transp. Economist (1); 5 5 Sr. Railway Engineer (1); FinancialAnalyst (1) 08/25/1995 2 Sr. Railway Engineer (1) 5 5 FinancialAnalyst (1) 03/08/1996 3 Sr. Transp. Economist (1); 5 5 Sr. Railway Engineer (1); FinancialAnalyst (I) 08/21/1996 3 Transport Economist (1); U 5 Railway Engineer (1); FinancialAnalyst (11) 03/21/1997 2 FinancialAnalyst (1); U 5 Transport Economist (1) 10101/ I997 3 Sr. Railway Engineer (1); U 5 Sr. FinancialAnalyst (1); Task Team Leader (1) 04/22/1998 1 Task Team Leader (1) U S . 10/06/1998 2 Task Team Leader (1); 5 5 Sr. Railway Expert (I) 02/16/1999 1 Task Team Leader (1) 5 5 10/06/2000 2 Task Team Leeader (1) 5 5 Railway Specialist (1) 10/06/2000 3 Task Team Leader (1); 5 5 Railway Specialist (1); Financial Specialist (1) 11/19/2001 1 Task Manager (1) 5 5 02/12/2002 1 Task Manager (1) 5 Sa 02/12/2002 1 Task Team Leader (1) 5 5 31 11/11/2002 2 Task Team Leader (1); S U Sr. Highway Engineer (1) ICR 32 Annex A. Basic Data Sheet PORTSMODERNIZATION PROJECT(CREDIT2095) Key Project Data (amounts in US$million) Appraisal Actual or estimate current estimate Total project costs 122.3 126.6 Loan amount 37.0 37.1 Cofinancing 56.5 67.2 Cancellation N/A N/A Economic Rate of Return % 20 13 Project Dates Original -- Actual -I____ IdentificationlPreparation 03/31/1989 AppraisaIlNegotiation 07/07/1989 07/07/1989 Approval 0212711990 02/27/1990 Effectiveness 05/07/1990 12/28/1990 Closing 06/30/1997 06/30/2000 Staff Inputs ActuaILatest Estimate No. of Staff Weeks US$ (`000) IdentificationIPreparation 10.3 26.2 AppraisallNegotiation 21.3 55.5 Supervision 155.5 562.8 ICR 3.0 38.0 ' Total 190,l 682.5 33 Mission Data Date No. of Specializations represented Performance rating (monMyear) persons Rating trend IdentificatlonlPreparatlon Feb-.5-Feb.24,1989' 3 Transport Economist, Financial Analyst, Port Engineer April 26-May 9, 1989' 2 Economist,Financial Analyst AppraisallNegotlatlon Jun.13-Jun.30, 1989' 3 Transport Economist, Financial Analyst, Port Engineer Supervision Jun. 4-Jun. 11, 1990" 1 Port Engineer, HS HS OCt. 15-Oct.20, 1990' 2 FinancialAnalyst Port Engineer HS HS NOV.10-NOv.17,1990' 1 FinancialAnalyst S S Jan. 28-Feb. 9, 1991" 1 FinancialAnalyst s , S Apr. 22-Apr. 25, 1991' 2 FinancialAnalyst, Port Engineer S S OCt. 5-0ct. 20, 1991' 3 FinancialAnalyst, Port Engineer, S S ProcurementSocialist Feb. 3-Feb. 16, 1992' 3 FinancialAnalyst, Port Engineer, S S OperationsAssistant Ju1.2-Ju1.18, 1992' 4 2 FinancialAnalyst, Port Engineer, S S ProcurementSpecialist Nov. 8-Nov.21, 1992' 3 2 FinancialAnalyst, Port Engineer S S Mar. 8-Mar. 31, 1993' 3 FinancialAnalyst, Operations S S Officer, Port Engineer JuI. 5-Jul. 9, 1993 2 FinancialAnalyst, Port Engineer S S Sept. 20-Sept. 24, 1993 1 Port Engineer S S Jan. 26-Feb 8, 1994 1 Port Engineer S S Jun 2-Jun 8, 1994 1 Port Engineer S S OCt. 17-0Ct.26 & OCt. 1 Port Engineer S S 30-Nov. 2, 1994 Jan 25-Feb. 4, 1995 Port Engineer S S May 31-June 6, 1995 Port Engineer S S Feb. 1-Feb. 8, 1996 Port Engineer s , S Apr. 7-Apr. 11 &Apr Transport Economist Port S S .21-Apr. 23, 1997 Engineer JuI. 5-Jul. 10, 1997 1 Port Engineer S S Feb. 3-Feb. 13, 1998 2 Transport Economist, Port s S Engineer May 27-Jun 8, 1998 2 Transport Economist, Port S S Engineer Sept. 17-Sept. 25, 1998 2 Transport Economist, Port S S Engineer (Consultant Sept. 17-Sept. 25, 1998 2 Transport (Economist, Port S ' S Engineer (Consultant) Feb. 16-Feb. 19,1999 1 Transport Economist S S Oct. 6-0ct. 12, 1999 1 Transport Economist S S IlCR May 8-May 18,2000 2 Transport Economist, Port S S Consultant Due to the overlap betweenthe "Port RehabilitationProject"(Cr. 1536-TA)and the "Port Modernization Project". (Cr.. 2095-TA), these missionshave addressedboth above projects. IBRD 3389 TANZA NIA DAR ES SALAAM PORT AND LAND TRANSPORTATION CONNECTIONS o SELECTED CITIESAND TOWNS MAIN ROADS PROVINCECAPITALS ii+-tx TANZANIARAILWAYCORPORATION H+I-I+ TAZARA RAILWAY Q NATIONALCAPITAL RAILROADS RIVERS PROVINCE BOUNDARIES & MARITIMEPORT -.- INTERNATIONALBOUNDARIES /f30"E 3PE ( 34". f , 36OE ( 1 ffirt boun&ner,p rCo dOu d &n"no!k-m h r rporiUni!other World Bonk i mop WOI ~ by he Mop rhorm on hi1 mop do~MI rmpb on hand of Ths World Bonk I p n any of ?lm inhrmotmn I J iI Cmup, any pdvment 00 he hplrlwhaol ony krrrtoy,or any rndoormenl 01 mspbncs of such barndonor 00 I!'I lo. '' r . -UGANDA' :) I Luke ' J I \ 2"s 4"s
Groupe de la Banque mondiale · Project Performance Assessment Report
Tanzania - Secod Port Modernization and Railway Restructuring Projects
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Groupe de la Banque mondiale
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Project Performance Assessment Report
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Tanzanie
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Banque mondiale