Niger - Niamey International Airport Project

FILE Copy DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Re.ort No. 289a-NIR APPRAISAL OF NIAMEY INTERNATIONAL AIRPORT PROJECT NIGER April 9, 1974 Western Africa Projects Department Ports, Railways and Aviation Division This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  Currency Equivalents Currency Unit = CFA franc (GFAF) US$1.00 = CFAF 250 CFAF 1 million= US$4,o00 Fiscal Year: January 1 - December 31 System of Weights and Measures: Metric Metric British/US equivalent 1 meter (m) . 3.28 feet (ft) 1 kilometer (km) 2 = 0.62 mile Cmi) 1 square kilometer (km ) = 0.386 square mile (sq mi) 1 kilogram (kg) = 2.2 pounds (lb) 1 metric ton (m ton) - 2,204 pounds (lb) Abbreviations and Acronyms ASECNA - Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar FIC - Flight Information Center ILS - Instrument Landing System  NIGER APPRAISAL OF NIAMEY INTERNATIONAL AIRPORT PROJECT Table of Contents Page No. STMJLARY ............................................... i - iii 1. INTRODUCTION ............................... 1 2. BACKGROUND ................................ 3 A. Economic Setting .................................. 3 B. The Transport Sector .............................. 3 C. Aviation in Niger ................................. 4 D. Air Traffic Forecasts ............................. 4 E. ASECNA ............................................ 5 3. THE PROJECT ........................................... 7 A. Investment Program for Niarmey Airport ............. 7 B. Description of the Project ........................ 7 C. Cost Estimates .................................... 9 D. Execution ................... ...................... 10 E. Financing and Disbursements ........ .. ............. 10 F. Environmental Effects ............................. 11 4. ECONOMIC EVALUATION ................................... 12 A. General ........................................... 12 B. Effects of the Project ............................ 12 C. Quantified Benefits to Niger ....................... 13 D. Project Return .................................... 14 E. Other Benefits .................................... 14 5. FINANCIAL EVALUATION .................................. 16 A. Accounting ........................................ 16 B. Audit ............................................. 16 C. Tariffs ........................................... 17 D. Income Accounts ................................... 17 E. Cash Position ..................................... 20 6. AGREEMENTS REACHED AND RECOMMENDATIONS ................ 21 This report has been prepared by Mlessrs. B. Bostrom (Economist), K. Ewing (Aviation Engineer), and N. Petry (Financial Analyst).  TABLE OF CONTENTS (Cont'd) TABLES 1. Air Traffic Developments 2. Investment Program and Financing Schedule 3. Estimated Schedule of Disbursements 4. Income Statement 5. Debt Schedule 6. Fixed Asset Schedule 7. Sources and Applications of Funds ANNEXES 1. ASECNA 2. Existing Facilities at Niamey Airport 3. Details of Economic Evaluation 4. Assumptions used in Financial Analysis MAPS 1. Niger - Location of Airports - IBRD 10640 2. Niamey Airport - Layout of Facilities - IBRD 10641  NIGER APPRAISAL OF NIAMEY INTERNATIONAL AIRPORT PROJECT SUMMARY i. As one of the largest landlocked countries in Africa, the Republic of Niger is faced with formidable problems for both domestic and external transport, and its economy is burdened with the high costs of such transport and the long transit times involved. Several efforts are now underway to improve facilities in neighboring countries -- for example, rehabilitation of the Parakou-Malanville road in Dahomey, and development of land routes through Nigeria -- and these are expected to help reduce the high transport costs for exports and imports which Niger now has to bear. ii. Internal transport is mostly on the country's 8,000 km road system, about half of which however consists merely of earth roads and tracks; only about 500 km of the network are now paved. There is no railway. The remain- ing needs of domestic traffic are met by services provided by Air Niger and by air taxi operations to five airports in the country. iii. Aviation in Niger is centered on Niamey Airport which is the closest to Europe of the major airports in West African countries south of the Sahara, and which is on the main air routes and attractive as a transit stop. Over the past five years, the number of transit passengers at Niamey has increased at about 20% per annum, and the number of scheduled flights at about 10%, partly because of increased cargo services. It is important to the country to retain Niamey's share of the transit traffic, because although passengers have little direct impact on revenues, landing charges particularly for large aircraft, are very significant. The Government therefore proposes to modernize and expand the facilities at Niamey Airport to assure its continued use by international transit traffic, as well as to provide for future traffic growth and to facilitate development generally. iv. A Master Plan for the development of Niamey Airport has been pre- pared by the Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar (ASECNA). This organization is a multi-national agency of 14 African states and France which was set up to control air navigat ln in the area, and according to specific agreements between ASECNA and the coun- tries concerned, to operate airports and other air services. ASECNA's budget does not however cover construction of airport facilities, and such financ- ing is therefore the sole responsibility of the individual Governments concerned. v. The project now proposed for financing by the Association is an integral part of ASECNA's Master Plan, and consists essentially of: (i) strengthening the existing runway and taxiway; (ii) lengthening the existing  - ii - runway by 200 m; (iii) construction of an additional parking position for wide-bodied aircraft; (iv) improvements to the airfield lighting system; and (v) replacement and relocation of the localizer of the Instrument Landing System. vi. The project is estimated to cost a total of about IJS$5.9 million equivalent, including taxes, with foreign exchange costs of US$3.5 million (about 59%). The proposed Credit of US$5.0 million equivalent will cover 100% of local and foreign exchange costs before taxes. Local taxes are estimated at US$900,000 (about 15% of total cost). The above estimates are based on detailed engineering studies carried out by ASECNA, and are considered reasonable. Final engineering will be completed by ASECNA after project financing has been arranged. vii. The Credit Agreement will be with the Government of Nigev, and the Project Agreement with ASECITA who will be responsible for execution. The Government will make the credit available to ASECNA as if it were a loan for a period of 25 years, including 5 years of grace, with interest at 7-1/4% per annum, capitalized during the construction period. The Government has agreed that it will enter into a special contract with ASECNA, acceptable to the Association, by which ASECNA will carry out on the Government's behalf the engineering, supervision, and management of the project, and the continued operation of the airport. The draft contract is being prepared. Procurement of civil works and equipment will be by international competitive bidding in accordance with Bank Group guidelines. Construction work is expected to start in late 1974 and to be completed in about two years. viii. Niamev Airport does not function as a separate financial entity, but ASECNA's accounting system is such that the financial status of the Airport can be readilv determined at any time. The Government has agreed that the tariff nolicv at Niamey Airport will be aimed at the following medium-term objectives: (a) Government should require that revenue cover at least operat- ing expenses, interest pavments, and the amort