Niger - Niamey International Airport Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE P Y Report No.2 689 PROJECT PERFORMANCE AUDIT REPORT NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) October 9, 1979 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) Table of Contents Page No. PREFACE ii PROJECT PERFORMANCE AUDIT BASIC DATA SHEET iii HIGHLIGHTS iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background 1 II. Project Implementation and Results 1 III. Points of Special Interest 2 IV. Conclusions 3 ATTACHMENT A: BORROWER'S COMMENTS 5-6 ATTACHMENT B: PROJECT COMPLETION REPORT I. Introduction 7 II. Background 9 III. Project Identification, Preparation 10 IV. Project Implementation and Costs 12 V. Financial Performance 17 VI. Economic Reevaluation 20 VII. Institutional Development 22 VIII. The Role of the IDA 23 Tables 1. Cost Evaluation 24 2. Air Traffic Development 25 3. Schedule of Principal Covenants and Commitments on Credit 473-NIR and Relevant Agreement and Side Letters 26 4. Profit and Loss Account 27 5. Proforma Cash Flow Statement 28 Maps This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - PROJECT PERFORMANCE AUDIT REPORT NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) Preface This report presents a performance audit of the Niamey Inter- national Airport Project in Niger for which Credit 473-NIR in the amount of US$5.0 million was approved by the Board on May 14, 1974. The credit was closed on June 30, 1978 and the last funds were disbursed in August 1978. The report consists of a Project Performance Audit Memorandum pre- pared by the Operations Evaluation Department (OED) and a Project Comple- tion Report (PCR) prepared by the Projects staff who supervised the project. The memorandum is based on the PCR and discussions with IDA staff; the transcript of the Executive Directors' meeting of May 14, 1974, which considered the project, has been read and project files and documents have been reviewed. No country visit was made in connection with this audit. The draft audit was sent to the Government in the normal course, and the comments received from the Ministry of Public Works have been noted in the report and are attached in full as Attachment A. On the basis of the above abbreviated procedure, the audit memo- randum agrees with the conclusions of the PCR in general; the memorandum, however, provides some additional comments on: (i) the credit disburse- ment percentage; and (ii) the need for more refined economic evaluation.  - iii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) KEY PROJECT DATA Original Actual or Item Plan Reestimate Project Cost (net of tax) (US$ Million) 5.01/ 4.6 Underrun (%) 8 Project Cost (including extra works)(US$ Million) 5.6 Credit Amount (US$ Million) 5.0 5.0 Disbursed ) 5.0 5.0 Cancelled ) as of 7/31/79 Repaid - Outstanding ) 5.0 5.0, Date Physical Components Completed 6/75 8/77 Proportion Actually Completed by above Date (%) 15 11l-/ Proportion of Time Overrun (%) 50 Economic Rate of Return (%) 20 23 Financial Performance Reasonable Disappointing Institutional Performance Excellent Excellent Cumulative Estimated and Actual Disbursements (US$ Million) FY74 FY75 FY76 FY77 FY78 (i) Estimated 0.6 3.4 5.0 5.0 5.0 (ii) Actual - 0.6 3.7 4.6 5.0 % of (ii) to (i) 0 18 74 92 100 OTHER PROJECT DATA Original Item Plan Actual First Mention in Files 4/69 Government's Application 9/69 Negotiations 11/73 3/74 Board Approval 5/14/74 Credit Agreement 5/24/74 Lffectiveness 8/27/74 9/19/74 Closing Date 12/31/76 6/30/78 Borrower Government of Niger Executing Agency ASECNA Fiscal Year of Borrower Calendar Year MISSION DATA Month/ No. of No. of Man- Date of Item Year Weeks Persons Weeks Report Identification 2/71 1 1 1 3/71 Preappraisal 3/72 1 2 2 5/72 Appraisal 2/73 1 3 3 3/73 Total 3 6 6 Supervision I 3/75 1 1 1 3/75 Supervision II 11/75 1 1 1 12/75 Supervision III 6/76 1 1 1 6/76 Supervision IV 3/77 1 1 1 3/77 Completion V 12/77 COUNTRY EXCHANGE RATES Name of Currency CFAF Appraisal Year Average US$1.00 = 250 Intervening Year Average 1975 US$1 = 209.23 1976 US$1 = 235.37 1977 US$1 = 244.28 Completion Year 1978 US$1 = 230 1/ The original project cost including taxes was US$5.9 Million. 2/ Because of extended scope of the project.  - iv - PROJECT PERFORMANCE AUDIT REPORT NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) Highlights The purpose of the project was to make the minimum improvements to the airport which were required to accommodate the new generation of larger and heavier aircraft. These improvements consisted of lengthening and strengthening the runway and installation of some lighting and naviga- tional equipment. The Association agreed to finance 100% of the project costs, excluding taxes, since there was already a very heavy demand on local funds because of emergency expenditures necessitated by a severe drought. Ultimately, however, IDA financed only 85% of projects costs, excluding taxes (PCR, para. 3.5). The project was implemented as planned but became more elaborate than originally agreed on since surplus funds available in the credit be- cause of the lower disbursement percentage were applied to further length- ening of the runway and additional navigational equipment. The project in- vestment is fulfilling its intended purpose by keeping Niger served by in- ternational long distance flights and the anticipated benefits have largely materialized, resulting in a reestimated economic return of 23% against 20% at the time of appraisal. The final cost of the project as originally de- fined by the appraisal was 8% below the estimate. Implementation time was 5% longer than anticipated. The airport's financial performance was below expectations. Points of special interest are: - the Government has been displeased about the Associating disbursing the credit at a lower rate than agreed at the time of negotiations (PPAM, para. 8; PCR, para. 3.6); - the project has resulted in a reduction in the cost of air freight (PCR, para. 6.5); - to obtain a better idea of the impacts of air- port improvements on the development of air freight, some airports should be reevaluated about five years after project completion (PPAM, para. 13).  PROJECT PERFORMANCE AUDIT MEMORANDUM NIGER - NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) I. Background 1. One of the handicaps in Niger's effort for development is the country's landlocked location. With a population of only about five mil- lion and a rather low level of economic activity, the volume of the coun- try's external trade is relatively small. The latter, combined with the long transport distances through neighboring countries to reach the near- est seaport and low efficiency of some of the transit facilities, subject international trade to high costs and delays when using surface routes. The role of air transport for imports and exports is therefore of more than average importance. 2. Niger has virtually no influence on the type of international air service that it will receive, since this is largely determined by the airlines serving West Africa as a whole. As a result, when various air- lines started to introduce larger and heavier aircraft, Niger had to de- cide whether to improve its international airport to accommodate the lar- ger aircraft or to be gradually eliminated from the major international routes. In the latter case, it would have been necessary to depend on feeder services operated by smaller aircraft at a higher cost per ton and passenger mile. However, even if it had been decided to rely on a feeder service using modern short distance aircraft, investment in the runway would still have been required in the form of major maintenance work. 3. The Government decided that it preferred the solution of adapt- ing the airport to the requirements of the latest generation of aircraft. Various sources of assistance were approached with the result that improve- ments to the terminal building were financed through French bilateral aid and a new freight terminal through advances from the various users. IDA agreed to finance civil works for strengthening and extending the runway and for the extension of parking areas, as well as lighting equipment and navigational aids. The project was expected to have an economic return of 20%, with quantified benefits from extra landing charges derived from larger aircraft, avoidance of losses resulting from traffic reductions when facilities deteriorate, and avoidance of the cost of a feeder service. II. Project Implementation and Results 4. As described in detail in the PCR, the project was successfully implemented and has achieved its purpose. The project was to cover a min- imum of improvements required to adapt the airport to the needs of larger and heavier aircraft but ultimately more was done because, as a result of some administrative misunderstandings, funds were available from the cre- dit account (see paras 6-8). 5. Implementation of the project items as defined in the appraisal resulted in a cost underrun of 8%. The time overrun on the project, in- cluding extra works, was about 50% (PCR, paras 4.6, 4.16). The economic - 2 - return has been reestimated in the PCR as 23% against 20% at the time of appraisal. The financial results have been below expectation and the cre- dit covenant on the operating ratio was not complied with (PCR, paras 5.1-5.4). III. Points of Special Interest Attempts to Avoid the Need for Government Funds Failed 6. In 1974, Niger's financial position was precarious because of a severe drought which had reduced agricultural production and neces- sitated emergency expenditures. The Association therefore, as an excep- tion, agreed to finance 100% of the project cost, excluding taxes. How- ever, even this agreement did not fully guarantee that the use of budget funds could be avoided because of the uncertainty of exchange rate develop- ments. In the event, extra costs because of the depreciation of the US dollar remained within the available amount of contingency funds. 7. The Credit Agreement was written under the assumption that 15% of the cost of civil works contracts in Niger (which made up 75% of the project) consisted of taxes and therefore the schedule on withdrawal of proceeds of the credit states that 85% of total civil works expenditures will be financed. However, the Government, hoping to facilitate matters, introduced tax exemption for the contractors who were to carry out the work under the project. As the Association, following the terms of the Credit Agreement, disbursed 85% of the contract cost, this resulted in the need for the Government to provide funds to cover 15% of the net of tax contract cost. The Government was quite unhappy about this unexpected financial burden for which no provision had been made in the budget and requested the Association to disburse 100% in accordance with the under- standing reached at the time of negotiations on the basis of which the Credit Agreement was signed (PCR, paras 3.5-3.6).1/ To do so, the Associa- tion would have had to change the wording of Schedule 1 of the Credit Agree- ment to allow for a higher disbursement percentage. 8. Since the cost of various contracts was higher than expected at the time of appraisal, which was in part because of the lower exchange rate of the US dollar, there was genuine concern that credit funds might not be sufficient if disbursed as originally intended. Whether extra funds would be needed, however, was not yet clear and depended on further exchange rate developments and possible cost overruns. In view of the above, a super- vision report in late 1975 suggests as a possible solution that the dis- bursement percentage be increased to 95%.2/ The Government would then have time to find additional funds to cover any cost overruns and the disburse- ment percentage might still have been decreased if credit funds proved to be insufficient while at the same time this could prove unnecessary if the exchange rate would recover. The Association, however, did not agree to any changes. Seen in retrospect, if the disbursement percentage had been increased as proposed, the project could have been completed as planned without a further need for local funds. 1/ The Government in their comments (see Attachment A) confirms these views. 2/ The full 100% not being possible because there was still a minor tax amount included in the contracts. - 3 - 9. Because a lower disbursement percentage was used as explained above, it turned out that excess funds were available in the credit which were used for a further extension of the runway and procurement of addi- tional navigational equipment (PCR, para. 4.2). These works, even though not judged to be of the highest priority, were useful because they further reduced the payload penalty for large aircraft and improved safety, thus increasing the chances that large aircraft would prefer to use Niger's air- port over other airports in the region. They did, however, represent a definite deviation from the scope of the project as presented to the Board. The Need for Refinement in the Economic Evaluation 10. The audit agrees with the PCR that the project has produced ex- tra revenues from landings by larger aircraft and has helped to avoid a decrease in revenues which would have resulted when, without the improve- ments made under the project, some aircraft would have been diverted to more modern airports in neighboring countries. However, it appears that considering the full cost of using the feeder service in the appraisal - which would have resulted if the project had not been carried out - as a benefit to the project is open to question since at least part of this extra air transport cost would not have been a charge to Niger's economy. For, from the Government's point of view, only the benefits accruing to Niger's nationals would be the benefits of its investment in the airport. Most foreigners travelling to and from Niger would have continued to do so while not charging any extra costs to Niger. Similarly, the extra cost of imports for consumption by the foreign community would have been paid for partially from funds outside the Nigerien economy.l/ The econ- omic reevaluation has partially considered this problem (see para. 6.4). However, even if it would be assumed that only half of the cost of avoid- ing the feeder service could be considered as a benefit to the project, the appraisal economic return would still be about 15% and the reestimated economic return about 17%. 11. The Appraisal Report mentions benefits from lower aircraft oper- ating costs and increased freight carrying capacity, but these have been only partially quantified and their beneficial effects to the Nigerien economy were not taken into account in the economic return calculation. The PCR (para. 6.5) quantifies the savings from lower freight transport costs and mentions that the anticipated benefits from increased agricul- tural exports were not realized because of poor crops due to adverse weather conditions. IV. Conclusions 12. The project was successfully implemented and achieved its pur- pose. However, concerning disbursement, the audit believes that, where the basis for deciding the disbursement percentage as 85% during negotia- tions was that the remaining 15% represented taxes, the Association should have modified the credit documents to enable the credit disbursement to cover the total net of tax expenditure, when the Government decided to 1/ The West Africa Region disagrees with this view since it is convinced that the extra cost of the feeder service incurred by foreigners will eventually also in some form be passed on to the Nigerien economy. exempt taxes to the contractors (para. 7). Such an action would have been consistent with the financing arrangements as presented to the Board and would have avoided a deviation from the original project concept. 13. Even though the audit has reservations on the validity of some of the benefits used in the justification of the project (para. 9), it ap- pears that benefits to freight traffic would offset the above reduction and the reestimated economic return of about 23% would therefore still be acceptable. The effects of cheaper freight rates may deserve special at- tention in projecting traffic because of their potential impact on a coun- try's economy through increasing the competitiveness of exports and making it more attractive for importers to ship by air, thus reducing transport time and losses which can be particularly important for essential commodi- ties such as certain equipment and spare parts. 14. It may be useful to review the development of freight traffic for a few similar airports about five years after the introduction of larger aircraft in order to gain more experience for forecasts in other projects. - 5 - ATTACHMENT A FORM N~O. 788 (1-74) IBRD LANGUAGE SERVICES DIVISION CONTROL No. -1/ ATE: September 20, 1979 ORIGINAL LANGUAGES French (Niger) DEPT Operaions val IRANILAOt: GAG:klh Republic of Niger Niamey, September h, 1979 Ministry of Public Works, Transportation and Urban Planning The Minister Mr. Shiv S. Kapur Director Operations Evaluation Department IBRD, Washington, D.C. Subject: Project Performance Audit Report on Niamey International Airport Project Re: Your letter of July 27, 1979 Dear Sir: I have received the project performance audit report on the above-mentioned project, for which Ithank you. This document reflects very well the various observations that can be made concerning the progress of operations. Accordingly, I have no special comments to make on the report. However, I should like to call attention to certain points raised in the report: 1. Financial participation of the Government (paragraph 6 of the Audit Memorandum) The Report stresses that: - either no tax-exempt contracts should have been awarded, - or it should have been arranged for IDA to bear the full cost, thereby avoiding any financial participation by the Government in the works. This is an important matter, which will have to be borne in mind in the future. - 6 - ATTACHMENT A Page 2 2. Repayment of the credit by ASECNA to the Government (paragraph 5.4 of the progress report) As regards repayment of the credit, it was arranged that the Government would repay IDA at 1% interest, while ASECNA would repay the credit to the Government, out of Niamey Airport revenue, at 7.25% interest (19 annual install- ments, beginning in 1980). Having regard to the revenue forecasts, IDA stresses that the amortization schedule needs to be reviewed. We agree with this view and a meeting should perhaps be arranged with the parties concerned to discuss this matter. Please accept the assurance of my high consideration, (stamp) Ministry of Public Works, Transportation and Urban Planning Is/ Moussa Bako Minister - 7 - ATTACHMENT B NIGER FIRST AVIATION PROJECT (CREDIT 473-NIR) COMPLETION REPORT Introduction 1.1 Niger is one of the largest landlocked countries in Africa about 1,000 km from the sea. Because of its situation the economy is burdened by long surfai transport times and relatively high costs. Although the surface routes are gradually being improved, Niger is still particularly vulnerable because of its dependence on other countries for access to ocean ports. A major asset is the international airport at Niamey, a key transit link for international air transpo offering direct access to other parts of Africa and to Europe. 1.2 With the advent of larger and more efficient aircraft, Niamey was faced with losing its direct air links, since the airport was inadequate to handle thesE aircraft. Traffic originating from or destined to Niger has been relatively smal: therefore Niger has been dependant on aircraft stopping at Niamey en route to other destinations. Niger's alternative was either to improve the airport to attract the larger, more cost-effective aircraft or to do nothing and be forced to depend on smaller, operationally more expensive aircraft which would steadily be phased out of service. The latter choice would have left Niger even more isolated. 1.3 The Government chose the former course and accordingly requested Bank Group assistance to improve the Niamey Airport. Discussions were held in early 1969 and in September 1969 a study by the Agence pour la Securite de la Navigatiol Aerienne en Afrique et a Madagascar (ASECNA) was forwarded to the Bank, outlining the airport requirements. In early 1970 the proposed project was included in the Association's lending program. At that time the Government arranged for financing improvements to the airport's terminal building through the Caisse Centrale de Cooperation Economique (CCE), Development Bank for Niger, Fonds d'Aide et de Cooperation (FAC) and the Government of Niger amounting to about US$1 million equivalent. 1.4 An identification mission was dispatched to Niamey in February 1971 and an appraisal mission in February 1973. Negotiations were held in March 1974, and the project was presented to the Board in May 1974 and became effective in August of the same year. 1.5 The objectives of the project were to make enough improvements to the Niamey Airport to assure its cohtinued use as a transit stop and to take full advantage of the economies offered by larger aircraft. The goals were, at a minimum, to retain the existing level of traffic and promote increased use of the airport by larger aircraft which were then about to be introduced in Africa. An increase in export capability through more frequent and inexpensive air transport was considered important for the support and expansion of economic activity in thE country. - 8 - 1.6 To meet these objectives and goals a project was developed to lengthen and strengthen the runway and improve the aircraft parking positions together with improved runway lighting and approach aids. Supplementary works included further improvements to the runway and apron as well as a new navigation aid. The costs of the original project were slightly below the appraisal estimate while the total final costs were slightly above (data sheet). Project implementation was slow at the outset due to the Government's concern over project financing due to the devaluation of the dollar. After contracts were awarded the work proceeded smoothly but the lost time could not be made up. The original part of the project was completed in August 1977 instead of June 1976 as planned at appraisal. The procurement and installation of equipment for the supplementary works delayed final completion until March 1978. In general the objectives of the project were met and although exports have not yet developed to the degree anticipated due to slow recovery from the drought and marketing problems, international freight traffic and movements of international aircraft have exceeded expectations and the actual rate of return, 23%, is higher than the projected 20%. 1.7 The Borrower was the Government of Niger (owner of the airport) which onlent the proceeds of the credit to ASECNA (operator of the airport) at 7.25% interest repayable in 25 years. The intention was, and is, that the airport would be operated on a commercial basis. The Government and ASECNA have given serious attention to the financial management of the airport and have taken suitable steps to maintain its profitability. However, since further tariff increases would be counter-productive, a further increase in the rate of growth of traffic would be needed to satisfy the original target of a 60% working ratio in 1978 and ASECNA's original repayment schedule to the Government. More realistic goals have now to be set. - 9- 2. BACKGROUND General 2.1 The airport was built in 1947 with a 1,840 m runway, which was lengthened to 2,100 m in 1956 and to 2,570 m in 1960. This sequence illustrates the problem faced by many airports with low traffic volume and dependent on airline transit stops for essential air services. As aircraft become larger, more efficient and more cost-effective, these airports are obliged either to improve their facilities or to forego the benefits of lower cost air transport. The larger the aircraft, the more costly it becomes to provide the additional airport facilities needed. When, in the late 1960's, airlines began planning to introduce larger jet aircraft into service in Africa, Niger was once again faced with the problem of inadequate facilities to handle them. The runway was too short and too weak, the parking apron was too small, the passenger terminal was inadequate and the navigation aids were obsolete. While the stage construction technique that had been followed demonstrated a prudent use of resources, the large investment required for the next stage presented financing problems. 2.2 Preparatory work was carried out on behalf of the Government by ASECNA which supplied study documents in May 1970; a more comprehensive analysis was completed in May 1973. The 1970 study presented a three-phase program for airport improvements covering communications, air navigation equipment, buildings, and aircraft maneuvering areas (Table 1). The total cost of the program was estimated at CFAF 3.7 billion (about US$14.5 million). The preparation mission (March 1972) agreed with ASECNA that the proposed project would consist of the following high priority items taken from the study list: (i) Extension of the main runway from 2,570 m to 2,770 m; (ii) Strengthening the main runway; (iii) Installation of low and high intensity runway lights, including additional standby power generators and high-intensity approach lights; and (iv) Extension of the aircraft parking apron to provide one more parking position, The proposed project, using 1970 cost estimates, was estimated to cost CFAF 735 million (US$2.9 million). - 10 - 3. PROJECT IDENTIFICATION, PREPARATION Preappraisal 3.1 At the request of the preparation mission, the Government prepared detailed technical and financial analyses of the proposed project. The Government haddifficulty in obtaining funds for these studies, and they were not completed until January 1973. The technical part included preliminary designs for the civil works which were more extensive than originally planned. Since both the technical and financial analyses were inadequate, the February 1973 appraisal mission was not able to complete its work. It therefore requested ASECNA to furnish the following : (i) updated engineering studies and cost estimates for the proposed runway lengthening; (ii) detailed strength evaluations of the existing runway; (iii) alternative solutions and cost estimates for aircraft parking to enable at least three large aircraft to park at the same time; and (iv) a new financial analysis taking into account more accurate investment costs and potential revenues. Appraisal 3.2 When the new material was received by the Association in June 1973, it was possible to complete appraisal of the project without another mission to Niger. 3.3 As originally planned in 1970, a three-phase construction program was to have been spread over 15 years (1971-85). In its final form the project was considerably scaled down to only the bare minimum of elements required to enable the airport to handle wide-bodied aircraft. It was to cover the period 1971-75 only. Items passed over, although desirable, were not considered to have sufficient immediate impact on the operational efficiency of the airport. Negotiations 3.4 Negotiations were held in March 1974; no serious problems were en- countered. However, a sequence of events took place that later was to cause pro- blems and generate considerable resentment in Niger. Appraisal cost estimates in- cluded all taxes, and the draft appraisal report proposed that the credit finance 100% of foreign costs and about 52% of local costs, or 80% of total costs. The remaining 20% (taxes and some local expenditures) was to be financed by the Government. These estimates were based on an exchange rate of US$1.00 = CFAF 200. At negotiations, however, the rate was changed to US$1.00 = CFAF 250, the rate then prevailing. Based on the new exchange rate and updated cost estimates produced at negotiations by ASECNA, the Association agreed to finance 100% of actual costs, net of taxes. Thus the US$5 million credit was to cover 85% of total costs, and the credit agreement was so written. It was clearly the intent that Niger would not have to finance any project costs except taxes (i.e. 15% of total costs). - 11 - 3.5 When the Government called for tenders, it did so on a tax-exempt basis. Since it was understood that the Association would pay 100% of actual costs, the Government assumed the Association would pay the full contract (net-of-tax) cost. The Association, however, adhered to the percentage stated in Schedule 1 ef the Credit Agreement, i.e. 85% of total costs. This decision by the Association had the effect of financing 85% of 85% of certain project elements, or effectivelly 72% of the total cost of civil works. 3.6 Closely related to this was the fact that during implementation the value of the US dollar decreased substantially, from CFAF 250 to close to CFAF 200, or about 20%. It appeared to the Government that the credit would not be enough to finance 85% of total costs even on a net-of-tax basis. The Government asked the Association for a supplementary credit to cover the anticipated shortfall. The Association declined to grant a supplementary credit, on the grounds that it was tooearly to assess the final impact of the rate of exchange. The Government very much resented the association's decision as it feared it would have to finance a large part of the work. Due to these fears there were delays in decision making that affected the project timing. In the final analysis, with the recovery of the dollar the results were not serious but the Government officials listed this problem as their only complaint with the project implementation. Covenants 3.7 The thrust of the covenants included in the credit agreement was two-fold: first, to ensure careful evaluation of any new undertaking that would seriously increase the airport's debt structure, and secondly, to promote the financial viability of the airport's operations. The Government and ASECNA had doubts about their ability to meet the goals set forth in the covenants, but they agreed in principle with the aims and were therefore prepared to accept them. General Results of the Appraisal Process 3.8 The priorities established and the works selected under the project were satisfactory. One of the governing criteria was to concentrate on as complete a paving program as possible on the grounds that it would be more difficult and costly to mobilize smaller paving projects phased over a number of years. Consequently, the construction of buildings, which lend themselves fairly readily to a unit construction program, were given lower priority. - 12 - 4. PROJECT IMPLEMENTATION AND COSTS Project Description 4.1 At appraisal the project consisted of the following elements: Civil Works: (i) Strengthening and levelling the existing runway; (ii) Lengthening the runway from 2,570 m to 2,770 m, including an aircraft turning area, a 200 m safety area or stopway, and blast erosion protection; and (iii) Strengthening one parking position and building one new parking position, both designed to handle the heaviest modern aircraft. Equipment: (i) A new localiser to replace obsolete equipment; (ii) New high-intensity approach and runway lights, including switchgear controls and emergency power plant; and (iii) Meteorological equipment. 4.2 Additional work was later carried out and equipment purchased for two reasons: First, due to inadequate survey data at the time of the original planning, it was found during implementation that strengthening and levelling the taxiway and apron created drainage and change-of-grade problems; therefore it was necessary to pave additional apron areas. Second, because the disbursement percentage was effectively reduced, the proceeds of the credit were not totally expended on the work and equipment mentioned above. Niger requested that the runway be further lengthened from 2,770 m to 3,000 m with associated works and that any remaining funds be applied to the purchase and installation of distance measuring equipment (DME) related to a new very-high-frequency omnirange (VOR) navigation aid that was to be installed by ASECNA. The Association accepted both proposals for financing. Procurement 4.3 With the exception of the work undertaken by ASECNA, contracts were awarded on the basis of international competitive bidding with no prequalification. One contract was awarded for civil works and one for the electrical equipment procurement and installation. The credit agreement provided for domestic preference, but since no firms in Niger could undertake the work, this was not a factor in the bidding or award of contracts. 4.4 The invitations to bid were in the form of notification to diplomatic missions in Niger, to contractors who had expressed an interest and to ASECNA missions in Africa. Notices were also published in a Niger and a Senegalese newspaper. Seven firms bid on the civil works and six bid on equipment installation. All were French with some experience in West Africa. - 13 - 4.5 The invitation to bid on the civil works was issued on December 4, 1974, and the bid closing date was March 1, 1975. The results were as follows: Firm Bid Price Time to Complete (CFAF million) (months) SFEDTP 769 16 Touzet 780 15 Touzet (variant) 827 10 Bourdin 881 14 Colas 897 22 GTE (consortium) 1,142 18 SOFRATP 1,466 24 The low bid submitted by SFEDTP was accepted by the bid commission and a contract signed on May 5, 1975. The contract contained price escalation clauses, but due to the rapid execution they were not invoked for the main work. 4.6 Due to the devaluation of the US dollar during the project, Niger was hesitant about proceeding with the tender call for the equipment installation contract. Consequently tenders for this work were not invited until early in 1975 with a tender closing date of June 28, 1975. The firms and their bids were the following : Firm Bid Price (CFAF million) SEEE 262.0 CSEE 281.7 SPIE-Batignolles 327.3 SGEEM 336.0 HERLICQ 382.7 SELF 426.7 The bid commission evaluated the bids in July 1975; the submission by SPIE- Batignolles was rejected as not meeting the bid requirements. Because the Government was uncertain that adequate financing was available, the contract was not awarded until January 10, 1976 to the low bidder SEEE. Despite the delay, the contractor allowed his bid to stand unchanged. 4.7 Specialized equipment was procured and installed by ASECNA. This procedure was followed to allow standardization with other ASECNA equipment and to benefit from their bulk purchase program. The procurement procedures were otherwise in accordance with the Association's guidelines and no problems arose. - 14 - Implementation 4.8 ASECNA was the executing agency for the project and carried out the design of all works. ASECNA supervised all construction work using one team for civil works and another for equipment installation. The design management and field supervision were efficiently carried out and there were no problems. Civil Works 4.9 The contract was awarded in May 1975 just before the onset of the rainy season, and the contractor elected not to do any grading work until the end of the rains in October. In the meantime he stockpiled aggregate, imported his asphalt and organized his plant. As a result, he was in a position to proceed very quickly in October. Due to poor survey data on the apron, additional paving work was necessary to improve grade and drainage on the older parts of the apron. The net result was that the older part of the apron was also sub- stantially improved to provide two more parking positions for heavy aircraft. 4.10 In the course of construction, it was discovered that the asphalt mix design results were better for the base course than they were for the surface course. ASECNA therefore decided to use the base course design for the surface courses as well. The saving effected partially offset the cost of the additional apron paving. 4.11 The supplementary work involved in lengthening the runway to 3,000 m presented no technical problems as the original design work had provided for eventual lengthening of the runway to 3,650 m if and when required. 4.12 Materials available for grading and paving aggregate were satisfactory, and it was possible to obtain excellent results at a very reasonable cost. The contractor furnished all new equipment and the management of the contract exceeded expectations. Equipment 4.12 This work was in two parts. ASECNA procured and installed specialized equipment. This work was efficiently carried out by ASECNA technicians. The installation of the power supply, power and control cables for the ASECNA equipment was carried out by the electrical contractor SEEE who also carried out the installation of the runway lighting system. 4.13 Two major delays occurred in this work. The first was the long delay before a contract was awarded. Tenders were opened at the end of June 1975, but the contract was not awarded until January 1976. The contractor then had to order his material which did not begin to arrive until August 1976, complicated by the slow and uncertain arrival of material shipped by sea and then overland to Niger. A good deal of the material was lost, stolen or damaged in transit and had to be replaced. The contractor eventually changed to air transport and found that it took three to seven days from the time of ordering to the arrival of the material intact compared to up to four months by land and sea. - 15 - 4.14 The supplementary lengthening of the runway entailed additional runway lighting. This presented no problem as the material was air-lifted to the site and installed. In addition a DC8-63 crashed and burned during the work, damaging a considerable amount of cable and lighting equipment which had to be replaced. 4.15 The contractor's work was of excellent quality. He was well-equipped with a well-organized and experienced crew, but the haphazard delivery of materials made it impossible for the contractor to work as efficiently as he might have. The work started in August 1976 and was completed in August 1977. If the contractor had used air transport from the outset, he would have saved at least six months' time. Project Costs 4.16 At appraisal it was not clear what the consequences of the oil crisis and the subsequent inflation would be. There was considerable concern about price escalation and its effect on the project, situated as it was in a rather remote, landlocked country. It was anticipated that contracts would be awarded soon after loan approval in May 1974. However, the contract for civil works was not awarded until May 1975. The contract for the electrical work was not awarded until January 1976, and inflation was a factor in the bid prices. Analysis of costs is complicated by the fact that at appraisal all costs were computed on a tax-included basis, but Niger's later decision to call tenders on a tax-free basis has led, in this report, to cost comparisons on a tax-free basis. 4.17 Costs for civil works (Table 1) while slightly higher than the original estimate, were essentially stable during the work, and no price revision was necessary. A change in the asphalt mix design led to a satisfactory design at a substantially lower cost. The original project works were otherwise carried out without change. Supplementary works added to improve the overall effectiveness of the airport increased the total cost of the civil works. 4.18 The equipment procured and installed by ASECNA cost more than estimated due to sharp increases in electronic and electrical equipment. These increases were also reflected in the bid price for the electrical installation contract. The additional time for completion of the electrical works (one year later than expected) also caused the price revision formulas to be applied on equipment under the electrical installation contract. 4.19 Supplementary work included rehabilitation of the apron, further lengthening of the runway, modifications to the electrical power supply to the airport, and the purchase of DME. Disbursements are now complete and the costs of the supplementary work have been finalized therefore all costs shown are final costs. 4.20 The rehabilitation of the apron (CFAF 33.0 million) was brought about by errors in the original survey data necessitating additional paving to correct grade and drainage and, as a result, two aircraft positions were completely rehabilitated. This work is therefore identified separately. - 16 - 4.21 The additional runway lengthening was quickly carried out at reasonable cost. No problems were encountered and the additional length has proven beneficial. Additional runway lighting was required due to the extension and this work was coupled with major changes in the electrical distribution system as a result of a primary distribution change by the power authority. The modifications carried out by the power authority and, at main substation were also capitalized (CFAF 1.9 million). 4.22 As the proceeds of the credit were not exhausted by the original civil works and equipment, other important needs of the airport were examined to determine if suitable and justifiable items could be purchased with the balance of the credit. The most suitable, bearing in mind the amount of money available and the direct benefits, was a DME. ASECNA, as part of its normal equipment replacement program, had replaced the glide path of the instrument landing system (ILS) and was planning a new VOR. The new glide path plus the localizer and approach lights installed under the project furnished the airport with a modern ILS system. The VOR and an associated DME would provide a navigation aid consistent with the ILS capability for both airport and en route guidance in this important air navigation area. Therefore, it was decided to invest the remaining Credit funds in the DME. 4.23 Only one slight problem grew out of the supplementary work. Additional asphalt was required for this work, and the contractor wished to enforce the escalation formula which would have resulted in a payment of CFAF 4.5 million with a windfall profit to the contractor of CFAF 4 million. The problem lay in the fact that the revision formula depended on the Government's issuing the base indices from time to time, and in Niger no index was produced for bitumen products. Using the actual cost of the bitumen in the formula gave the contractor a large windfall profit. A negotiated settlement was reached; since the amount was not large, the Association did not intervene. 4.24 In total, the final cost of CFAF 1,327 million (US$5.6 million) exceeds the estimated net-of-tax cost by about 8%. The Government originally assumed it would not have to provide funds for the project, but due to the method of disburse- ment, it had to meet costs of about CFAF 129.4 million for civil works and 18.4 million for equipment and installations for a total of CFAF 147.8 million, or about 11% of the total cost. ASECNA may absorb part of the equipment installation costs. Traffic and Operations 4.25 Traffic development and operations are clearly reflected in passenger, cargo and aircraft movements at Niamey airport (Table 2). The number of international arriving and departing passengers in 1976 was 4% higher than expected and 1977 results may be slightly higher (by 6%) than the appraisal forecast. This is the most important traffic flow for airport revenues as well as operations. Domestic passenger traffic and transit traffic have been lower than forecast. Total cargo traffic has been higher than expected, particularly inbound cargo which is 68 higher than the appraisal forecast, whereas outbound cargo is lower. The former is due partly to port congestion in the main ports handling Niger transit traffic and partly to the introduction of quantity discounts in air freight tariffs. Outbound cargo has grown very slowly as a result of the drought and more foreign competition for imported meat in countries like the Ivory Coast. While there are more international commercial flights than expected and the transition to wide-bodied aircraft has taken place as forecast, aircraft movements are lower than expected due to reduced movements of small aircraft of little importance to the airport. - 17 - 5. FINANCIAL PERFORMANCE 5.1 Table 3 lists financial covenants and targets agreed to by the Government, ASECNA and the Association under the project and comments on their achievement. Generally revenue increases have been almost as planned; operating costs, on the other hand, have increased more rapidly than anticipated. Some of the reporting requirements were not maintained since ASECNA's financial statements gave adequate information (Table 4). The system of proforma accounts for the airport has not worked out as well as expected. In the next project with ASECNA a different system more related to ASECNA's normal accounting will be used. Income Account (CFAF million) 1973 1974 1975 1976 1977 A B A B A B A B A B Operating Revenue 199 215 252 267 295 306 328 312 376 365 Operating Expenses Navigation 141 148 148 174 155 205 163 237 171 238 Ground Installations 30 33 32 38 35 45 37 52 39 55 Terminal and other Buildings 12 11 12 14 13 16 14 19 14 20 Total Expenses 183 192 192 226 203 266 214 308 224 313 Depreciation 94 94 108 100 147 96 175 130 174 161 Operating Loss 78 71 48 59 55 56 61 126 22 109 A. Appraisal estimate B. Actual Operating Revenue and Expenses 5.2 The above table shows that despite increases both in tariffs (about 30% between 1974 and 1977) and in traffic, income is sufficient to meet only part of the depreciation or debt service, if, as the credit agreement requires, the Government is to receive a 7.25% return. It is also clear that the covenant requiring a 60% working ratio in 1978 is unlikely to be met. However, included in the operating expenses is the cost of French technical assistance which since 1976 has been paid by the French Government. If this subsidy in kind is treated as revenue, the financial results improve by about CFAF 33 million in 1976 and by CFAF 36 million in 1977. In the short term little can be done to change the financial picture. Tariffs are already very high, and it would be counter- productive to raise them; costs are largely fixed by minimum staff requirements. However, new cash investment requirements for Niamey airport are likely to be low for the next several years as a result of the good condition of the facilities. - 18 - Sources and Application of Funds 5.3 The sources and applications of funds for investment from 1973 to 1977 for Niamey airport are summarized below. Both the IDA credit and the Government's contributions were lower than anticipated as a result of the decision to exempt civil works contracts from taxes. This in effect increased the Government's total contribution by the same amount since the Government still had to pay 15% of these contracts. This is partly offset by the use of IDA funds for additional works; CFAF 88 million (US$372,000) is scheduled to be disbursed in 1978 for this purpose. About CFAF 68 million (US$359,000) was lost of the CFAF 1,250 million (US$5.1 million) credit as a result of fluctuations in the rate of exchange. The most important divergence from cash flows estimated at appraisal is the lower internal cash generation. The primary cause is the effect of inflation on airport costs; this inflation in turn is attributable to the energy crisis and the Sahelian drought. There are two less important causes : One airline, SABENA, stopped serving the airport during construction, and new service by another, Air Algerie, has meant less revenue because it uses smaller aircraft. Nevertheless, cash generation for 1977-79 will be sufficient to cover airport investment needs and debt service other than that related to the on-lending of the IDA credit (25 years, 7.25% interest). Cash flow for 1973-77 is summarized below (Table 5) (including IDA funds as a loan): Source and Application of Funds Source Appraisal Actual ------------- CFAF million-------- Cash generation 445 160 Government 220 288 IDA 1250 1094 Other 72 131 Total 1987 1673 Application of funds Project 1470 1223 Buildings 96 112 Equipment 69 64 Debt service 280 257 Surplus cash 72 17 Total 1987 1673 - 19 - 5.4 The airport as a revenue-earning institution ought to be able to service debt on Bank lending terms. In order to achieve this a "Contrat Special" was agreed upon between ASECNA and the Government. This provided for repayment of funds to the Government as an annuity over 19 years at an interest rate of 7 1/4% after a grace period until December 31, 1979. As already pointed out, it would be difficult to raise tariffs high enough to meet this debt service requirement. A revision of the repayment schedule in this "Contrat Special" will in all probability be required as of December 31, 1979 when the first annuity payment is made.l/ As pointed out in para. 5.2 the covenant of a 60% working ratio in 1978 would not be met. A realistic financial goal would be an operating ratio of less than 100 by 1982/83. This would meet all cash requirements including the service charge for the IDA credit. 1/ The Government in their comments (see Attachment A) concurs with this view. - 20 - 6. ECONOMIC REEVALUATION 6.1 The quantified benefits to the Niger economy as determined at appraisal were the avoidance of (i) the loss of revenues for the airport without the project and (ii) more costly air services which would have resulted from the use of the unimproved runway. Benefits are higher than estimated at the time of appraisal while the investment has remained nearly the same. The economic return on the project is 23%. 6.2 At appraisal the expected changover from medium-sized DC-8 aircraft to wide-bodied DC-10's was the principal motivation behind the runway investment. This changover has taken place with eight scheduled landings of these aircraft per week, which meant additional foreign exchange earnings of CFAF 146 million in 1977. Even if the financial results are not as good as expected due to inflation, the situation would be significantly worse without the project, since most expenses are unrelated to aircraft size. 6.3 Additional airport revenue, not anticipated at appraisal, has resulted from a reduction in flight cancellation which previously resulted from poor approach aids at the airport. The number of cancelled flights has dropped significantly, which is directly attributable to better lighting and electronic aids as well as an improved runway. The airport, because of its good instrumentation, has also attracted flights diverted from other airports in West Africa. A conservative estimate of this extra revenue is CFAF 8 million in 1977, based on 20 cancelled flights by jet transports in 1976 and 25 flights diverted to Niamey in 1977. Such flights as well as Muslim pilgrim movements will grow in importance. The financial return for the airport from this extra revenue and that mentioned above would be about 10%. 6.4 Another benefit is the avoided cost of airline feeder service which would have been required eventually if the airport had been allowed to deteriorate. In the re-evaluation this benefit has been modified to reflect the fact that inbound air cargo has grown much more rapidly than expected. Since part of this growth has been generated by the project, it would be realistic to assume that only about half of this quantity would in fact have moved by air transport without the project. The cost of an airline feeder service has therefore been applied only to half the present air cargo quantities. In spite of this, the benefit of avoiding the feeder service is still higher than the appraisal estimate as a result of much higher unit operating costs for feeder aircraft. 6.5 A benefit mentioned but not quantified in the appraisal report was the impact of cargo tariff changes in real terms. The typical tariff Paris-Niamey in 1972 was about F.Fr. 10.91 per kilo which increased to F.Fr. 12.65 in 1977, despite an average airline unit cost increase between 1972 and 1976 of 55%. The relatively small increase in tariffs resulted from the introduction of quantity rates on larger aircraft. Conservatively estimated, a 50% increase in the 1972 average freight rate would have increased charges to F.Fr. 16.34 per kilo by 1977. For the 6,000 tons of inbound traffic in 1977, this represented a saving of about CFAF 1,134 million, just slightly less than the cost of the project. If these benefits to Niger could be accurately determined the economic return would increase to about 30%. - 21 - 6.6 A benefit which did not materialize, due mostly to external factors, was a substantial increase in agricultural exports. The effects of the drought persisted longer than expected, and farmers have not responded to the challenges of a market economy. Thus the amount of produce offered is relatively small and of poor quality. A system of incentives is being tried to improve the yields. In addition, a different approach to marketing, which in the future may make better use of air transport, is being introduced. - 22 - 7. INSTITUTIONAL DEVELOPMENT 7.1 No specific institutional targets were set for this project due to the presence of a well-managed operating agency, ASECNA. This agency has about 580 employees in Niger, of whom 370 are permanent staff at Niamey and the other airports, at the air traffic control and communications center at Niamey, and at the ASECNA training school. ASECNA has followed a program of Africanization of staff which has left the organization with very few expatriates, mainly in technical posts where long experience and highly specialized skills are essential. The expatriates (about 35 in Niamey), almost all of whom are involved in en-route traffic control, weather forecasting and electronic maintenance may have to remain several years more until suitable replacements can be found and trained. - 23 - 8. THE ROLE OF THE IDA 8.1 The major involvement of the Association was in the identification and preparation of the project. ASECNA, which acted on behalf of the Government is adequate in normal technical, operational and budget matters but relatively weak in economic and financial evaluation of projects. This is primarily due to the fact that ASECNA responds to technical or member country demands with relatively little critical analysis of benefits and priorities. Cost is usually the criterion used in decision making. During preparation, therefore, IDA insisted on detailed evaluations of traffic forecasts and the justification for the various elements. This was the second project in which the Bank/IDA has been associated with ASECNA and it has been noted that in later studies carried out by ASECNA more attention has been paid to these priorities. During preparation great care was taken to review with ASECNA the various factors involved and to provide guidance in the selection of the final project components. 8.2 Implementation required relatively little IDA technical assistance but considerable attention was paid to reviews, discussions and decision-making with respect to the merits of the supplementary works and costs. Credit 473 - Niamey Airport Cost Evaluation Appraisal Actual Association Gov't/ASECNA Disburse- US$ (ooo) CFAF Millions CFAF Millions CFAF Millions Participation Participation ments 1/ Tax Included Tax Included Net of Tax Net of Tax CFAF Millions CFAF Millions US$ (ooo) Civil Works A. Extend Runway Apron 916 229 181 202 B. Strengthen Runway Apron 2548 637 503 522 Sub Total Civil Works 3464 866 684 724 615 109 2631 C+D - Field Lighting and Nay Aids ASECNA 160 40 40 60 60 - 249 Contract 732 183 145 267 254 13 1046 Price Revision on "C" 37 37 152 Sub Total C & D 892 223 185 364 351 13 1447 Sub Total Project Works 4356 1089 869 1088 966 122 4078 E. Engineering & Supervision 216 54 54 50 50 - 221 F. Contingencies 1308 327 327 - - Project Cost 5880 1470 1250 1138 1016 122 4299 Supplementary Works Rehabilitate Apron 33 28 5 120 Lengthen Runway 102 87 15 372 Price Revision Apron Works 4 3 1 13 Power Supply Mods. 2 1 1 5 DME 38 34 4 150 Additional Runway Lighting 10 10 - 41 Sub Total Supplementary Works 189 163 26 701 TOTAL COST 9880 1470 1250 1327 1179 148 5000 1/ Last disbursement made July 19, 1978 - 25 - Table 2 NIGER-NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 374-NIR) COMPLETION REPORT Air Traffic Development ANNUAL PASSENGERS 1972 1976 1976 1977 1977 1982 (000's) ACTUAL FORECAST ACTUAL FORECAST ACTUAL FORECAST International 41,599 60,900 63,141 67,000 71,012 108,000 Domestic 9,122 12,850 10,352 14,000 14,754 20,000 Transit 39,096 61,600 54,116 69,000 60,802 121,000 Total 89,817 135,350 127,609 150,000 146,568 249,000 ANNUAL AIR FREIGHT (tons) Inbound 2,880 3,640 4,890 4,000 6,743 7,500 Outbound 1,903 3,585 2,198 4,200 2,452 9,200 Total 4,783 7,225 7,088 8,200 9,195 16,700 Passenger Aircraft 2,677 3,290 3,030 3,466 3,687 4,502 International 1,414 1,575 2,365 1,616 3,071 1,782 Domestic 1,263 1,715 665 1,850 616 2,720 Cargo Aircraft 455 775 513 884 500 1,510 Other Aircraft 9,657 11,015 5,880 11,390 6,840 13,480 ANNUAL AIRCRAFT MOVEMENTS Total 12,789 15,100 9,584 15,740 11,027 19,492 - 26 - Table 3 NIGER-NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 473-NIR) COMPLETION REPORT Schedule of Principal Covenants and Commitments on Credit 473 NIR and Relevant Agreement and Side Letters Agreements and Sections Commitments Action Taken 1. Credit Agreement Section The Government will make Done 3.01 and subsidiary available the proceeds of Loan Agreement between the Loan to ASECNA and the Government of Senegal provide funds, facilities Senegal and ASECNA and services to enable (contract special) ASECNA to perform its functions under the project Agreement. 2. Credit Agreement Section The Government shall No land procurement 3.02 acquire land required was required for the project. 3. Credit Agreement Section The Government shall not No investments have been 4.02 undertake airport invest- made to date. ment of US$250,000 without prior approval during the program. 4. Credit Agreement The Government shall main- Requirements are unlikely Section 4.03 tain airport tariffs so to be met in view of that an annual operating high costs and limited ratio does not exceed 60% traffic, despite substan- in 1978 and 55% in 1981. tial tariff increases. 5. Project Agreement ASECNA shall maintain Done Section 4.01 adequate accounting records. 6. Project Agreement AWECNA shall prepare Special proforma Section 4.02 proforma profit and loss statements for Niamey statements and have such Airport have been pre- statements audited. pared but not audited. Each year audited statements for the whole of ASECNA's operation have been prepared but normally do not become available until 6-8 months after the end of the fiscal year. - 27 - Table 4 NIGER-NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 374-NIR) COMPLETION REPORT Profit and Loss Account (In CFAF million) Actual Estimate 1973 1974 1975 1976 1977 1978 1979 REVENUE Landing Charges 164.0 188.2 211.5 205.3 250 282 318 Lighting Charges 4.0 5.1 6.4 5.0 6 7 8 Parking Charges 0.9 3.6 3.6 3.2 4 4 4 Passenger Charges 27.1 47.5 54.5 61.0 67 74 82 Rentals and Concessions 19.1 22.8 30.6 37.3 38 39 40 TOTAL REVENUE 215.1 267.2 306.6 311.8 365 406 452 COSTS Navigation 147.7 173.9 205.0 237.2 238 262 285 Ground Installations 32.6 38.5 45.3 52.4 55 57 66 Terminal & Other Buildings 11.5 13.6 15.9 18.5 20 21 23 TOTAL COSTS 191.8 225.9 266.2 308.1 313 340 374 Income before depreciation 23.3 41.3 40.4 3.7 52 66 78 Depreciation 94 100 96 130 161 169 167 Operating Profit (loss) (71) (59) (56) (126) (109) (103) (89) Interest 13 13 13 11 84 88 90 Net Profit (loss) (84) (72) (69) (137) (193) (191) (179) Working ratio 89 85 87 99 86 84 83 Operating ratio after depreciation % 133 122 118 139 130 125 120 - 28 - Table 5 NIGER-NIAMEY INTERNATIONAL AIRPORT PROJECT (CREDIT 374-NIR) COMPLETION REPORT Proforma Cash Flow Statement (In CFAF million) Year Ended 31 December 1973 1974 1975 1976 1977 Source of Funds Income before depreciation 23 41 40 4 52 Government 6 59 5 143 - IDA credit - - 118 764 212 Local loans 41 - - - - ASECNA Budget (Art. 12) 8 20 15 8 Concessionaires 23 - - - Insurance payment - - 16 - - Total 101 120 194 919 264 Disposition of Funds Freight Shed 33 25 16 - - Runway - - 135 774 5 Terminal - 38 - - - Lighting - - - 102 207 Other equipment 32 20 6 4 2 Loan Repayment 23 24 24 28 241/ Interest (except IDA credit) 13 13 13 11 9- Surplus for year - - - - 17 Total 101 120 194 919 264 1/ The interest on the IDA credit including capitalized interest would be 75 m CFAF 江：  !,’「一一一一一丁一一一一一一弓不一不 匕一上―臼必一一一」L一．--－一一一一一」呈