Tanzania - Kilombero Sugar Project

-.O Document of The World Bank FOR OFFICIAL USE ONLY F I E 01 Report No- 5341 PROJECT CCMPLETION REPORT TANZANIA KILOMBERO SUGIAR PROJECT (LOAN 1041-TA/CREDIT 513-TA) November 28, 1984 Eastern African Projects Department Regional Miss'ion in Eastern Africa This document has a restricted distribution and may be used by recipients only in the perfomance of their official duties. Its contents may not otherwise be disclosed without World Bank ath lorimation.  List of Abbreviations CCM Chasa Cha Mapinduzi (The Party) CDC Commonwealth De7elopment Corporation E MAFRO0 : ast African Agriculture and Forestry Research Organisation ERYR Economic Rate of Return GDP Gross Domestic Product GOT Government of T-anzania .;a : hectare IBRD : International Bank for Reconstruction and DevelopmenE IDA: International DevelopDMent Association lFC International Finance Ccrporation KDC : Kilosa District Development Corporation kg kilogram KI : iloubero 1 C.N!solwa/Ruaha deve-lo:menz KII Kilombero II (Ruembe Valley cevelooment) K-oC : XKilombero Sugar Comp;an- Limited MOA Ministry of Agriculture NAFCO : National Agricultural and Food Cor Zoration NSI National Sugar institute pMEA: : Permanent Mission in -astern Africa (now PE'FA) RN E-A r:egional Mission in E-astern Africa (World Bank) SAR Staff Appraisal Rezort SDC Sugar Development Corporation (Sudeco) TANESCO Tanzania Electric Supply Company _7imited TAZARA Tanzania - Zambia Rail:av TCA tons of cane per acre TCD tons of cane per day TIB Tanzania Investment Bank IPC :ang-Anvika Planting Ccmpany TRDB Tanzania Rua-1 Development Bank  FOR OFFICIAL USE ONLY TANMMMA KILOMRERO SUGAR PROJECT (LOAN 1041-TA/CREDIT 513-TA) PROJECT COMPLETION REPORT TABLE OF CCNTENTS Page No. Preface ....................................................... i Basic Data Sheet . ............... ii Summary of Highlights ........ .............................. . iii I. Il4TRODUCTION 1... II. PROJECT IDEITIFICATION, PREPARATION AND APPRAISAL 3 III. PROJECT IMPLEMENTAIION AND OPERATING I-ERFORMANCE 9 IV. PROJECT IMPACT ...................................... 28 V. FINANCIAL PERFORMANCE .29 VI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT .31 VII. BANK PERFORMANCE.... 32 VIII. ECONONIC RE-EVALUATION ........ ....................... 33 IX. CONCLUSIONS .......................... 34 TABLES: 1. Appraisal Cost Estimates 2. KII New Land Development Schedule 3. KII Cane Production Schedule 4. Outgrowers Development Schedule 5. Summary of Yearly Laboratory Reports 6. Tractor Capacities - 7. Estate Cropping Operations - Tractor Hours 8. Estate Cropping Operations - Costs 9. Price Structure of Sugar from Factory to Consumer 10. Profit and Loss Account for 1973-80 11. Project Costs 12. Sugar Production and Financial Results 13. Economic Analysis Map 10889 I 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.  TANZAN IA KILOMBERO SUGAR rOJECT (LOAN 1041-TA/CREDIT 513-TA) PROJECT COMPLETION REPORT Preface This is the Project Completion Report (PCR) for the Kilombero Sugar Project, for which Loan 1041-TA and Credit 513-TA, each for US$ 9.0m, were approved on September 5, 1984. The loan/Credit were closed on December 31, 1980; the Credit Was fully disbursed by September 10, 1976 and the Loan by May 14, 1981. This report was prepared by the Regional Mission in Eastern Africa (RMEA) following a mission to Tanzania in July 1983, and reflects information made available by the project agencies, namely the Sugar Development Corporation (SDC), which monitored the project, and the Kilombero Sugar Company Limited (KSC), the agency responsible for implementation of the project. Drafts of the PCR prepared by KSC in 1981 and 1982 served as useful background documents. Other sources of information included the Staff Appraisal Report (No. 466a-TA) dated July 30, 1974, the Loan, Credit and Project Agreements dated September 27, 1974, and subsequent amendments to these Agreements. Supervision reports, correspondence with the Borrower, and internal Bank memoranda as contained in relevant RMEA files have also been consulted. The PCR was substantially completed and submitted to the Operations Evaluation Department (OED) in May 1984. A copy of the draft report was sent to the Borrower for comments on September 4, 1984. No comments have been received from the Borrower so far. The valuable assistance provided in prepazing this report by the Government of Tanzania (GOT) is gratefully acknowledged. Special mentioi. must be made of the General Man&ger and Directors of Planning and Operations of SDC, and the General Manager and Financial Controller and other staff of KSC. Tftis project has not been audited by the OED.  aLmino swDCt nzTcTL 1041-mucmtDrT 513-Tw) PROJECT CmPLETIO RPOtr BASIC DATA S=T KEY PROJECT DATA ITEM Appraisal Actual Actual as S of Estimate Appraisal Estimate Total Project Cost (US$ million) 55.8 63.2 113 Loan tmounc CUSS million) 9.0 9.0 100 Disbursed 9.0 S_0 100 Cancelled 0 0 Credit Amount (USS million) 9.0 9.0 100 Disbursed 9.0 9-0 100 Cancelled 0 0 Date Board Approval - 091/5/74 Date Effectiveness 12/31/74 02/14/75 Completion Date 12/31/78 09/30/80 Closing Date 12/31/179 12/31/80 a/ Economic Rate of Return(l) 12.9 4 31 Institutional Performance below expectations Number of Project Beneficiaries - U.S. CUNULATIVE DISBURSEMZNTS b/ No. of Years after Signing 1 2 3 4 5 6 7 Appraisal E-stimate (0SW) 4.25 12.2 15.6 17.1 18.0 18.0 18.0 Accual (USts) 1.2 9.4 15.0 16.0 16.6 17.5 la.0 Actual as 1 of Estimate 28 77 96 94 92 97 100 Daces of Final Disbursement Credit 09/10/76 Loan 05/14/81 KISSION DATA Performance Rating month/ No on Speciali- Staff Days Type of Year Mission sation ct in Field Status d/ Trend e/ Problem f/ identification 05/73 2 EC 14 Preparation g/ 06/73 3 AG/EC/ACR 36 Appraisal 11/73 6 EC/FA/AG/FENC 156 Supervision I h/ 12/74 2 FA/ENC 8 - - - I1 05/75 3 AC/FA 12 2 2 F III 10/75 2 FA/ENC 8 2 2 F IV 05/76 1 ENC 5 2 2 F V 11/76 2 EEG 10 2 1 F,M VI 03/77 1 ENC 6 2 I F.M VIl 11/77 3 ENC/FA 30 2 I F,M VIII 04/78 2 ENC/FA 10 2 2 F,M IX 11/78 2 ENG/ACR 14 1 1 F,M X 08/79 1 ENG 5 1 1 F,M XI i/ 02/80 3 ENC/ACR/EC 36 - - - XII 10/80 2 ENC/IZR 20 3 3 i/ F,M.T OTHER PROJECT DATA Borrover Government of Tanzania Executing Agency Kilomfbero Sugar Company Ltd and Sugar Dev't Corp. Fiscal Year of Borrower July I - June 30 Currency: Tanzania Shilling (TSh) Exchange Rates: 1974 (Appraisal) USS1 - 7.14 1978 Ust1 - 8.3 1975 uS$l - 7.14 1979 US$1 - 8.5 1976 USSI - 8.38 1980 US$1 - 8_18 1977 USS1 - 8.27 1981 (Completion) US$l - 8.25 Project Period Average - 7.99 a/ Although Closing Date was extended to 12/31/80, final disbursemert made 05/14/81. b/ Credit/Loan disbursements have been combined in table. e/ AC - Agriculture; EC - Economics; ENG - Engineering; FA - Financial Analysis; ACR - Agronomy. dl I - Problem free; 2 - Moderate problems; 3 - Major problems. 4/ I - Improving; 2 - Stationary; 3 - Deteriorating. f/ F - Financial; M - Management; T - Technical; P - Political; 0 - Other. j/ Managing Agents Kilowbero prepared feasibility study. h/ As Lonn/Credit were not effective, the first report was classed as a progress report and not a full supervision report. i/ There was a combined aupervision/preparation mission in February 1980. Their report is contained in a full NTRM dated 4/3180 under Preparation of Sugar Rehabilitation Project. i/ The mission from RMEA rated the Project 2/3 but HQ suggested that 3/3 might be a more accurate rating, with which RIEA agreed.  TANZANIA KILOMOERO SUGAR PROJECT (LOAN 1041-TA/CREDIT 513-TA) PROJECT COMPLETION REPORT Summary of Hlghlights 1. The Project wa