Mexico - Baja California Tourism Project

Document of The World Bank FOR OMCAL USE ONLY Repor No. 5848 MEXICO BAJA CALIFORNIA TOURISM PROJECT LOAN 1420-ME Project Completion Report September12, 1985 Projects Department Latin America and the Caribbean Regional Office Tbldocmet a restictd disution md may be md by rcpiets only in the perfwosme of oficial dues lb contents emy not oderwise be slosed without Worl BDank xhhrhtion.  Currency Equivalents Currency Unit Mexican Peso (MEX$) US$1 = Mex$19.9 (At Appraisal) US$1 = Mex$140.0 (At PCR 01/15/83) Mex$1 = US$0.050 Mlex$1 million = US$50,251 Weights and Measures 1 meter (m) = 3.28 feet I square meter (m2) = 10.76 square feet I kilogram (kg) = 2.205 pounds I hectare (ha) = 2.47 acres 1 kilometer (km) = 0.62 miles Government of Mexico Fiscal Year January 1 to December 31 (i,  FOR OFFICIAL USE ONLY MEXICO BAJA CALIFORNIA TOURISN PROJECT LOAN 1420-ME Project Completion Report Table of Contents Page No. Preface. . i Basic Data Sheet ..ii Highlight ..v I. BACKGROUND... .. 1 iA. Introduction. 1 B. Tourism Sector .. 2 II. PROJECT PREPARATION AND APPRAISAL. 3 A. Project Preparation .3 - Environmental Protection and Resource Conservation 3 B. Project Appraisal. 4 III. PROJECT IMPLEMENTATION. 5 A. Effectiveness. 5 B. Project Execution and Natural Disasters. 5 C. Changes in Land-Use Plans. 6 D. Social Tourism and Construction Workers Accommodation 6 E. Improvements in the Urban Environment .7 F. International Airports. 7 G. Suspension of Works .8 H. Costs, Disbursement.. 8 - Procurement. 9 I. Quality of Work Completed and Performance of Consultants 9 IV. INSTITUTIONS AND MANAGEMENT. 9 A. Performance of FONATUR .. .10 B. Bank Group Performance .................... ....... ... 10 V. FINANCIAL AND ECONOMIC RE-EVALUATION .10 A. Financial Aspects - Hotels, Airports and Water Supply . 10 B. Economic Re-evaluation ...12 C. Other Benefits ..13 VI. CONCLUSIONS AND RECOMMENDATIONS . . . 13 ITh document hs a rstied distributioand may beusdby iiet onlinthepefonce of their oica dutieua content may not othrwime be diuctoed without Word Bank authointion.  Table of Contents (cont'd.) Page No. Annexes 1. Cost Tables ........................................... 15 2. Cost-Benefit Tables ................................... 19 3. Environment Performance ............................... 34 4. Economic and Marketing Studies ........................ 41 5. Photographs ........................................... 42 6. Financial Reevaluation by FONATUR ..................... 53 maps IBRD 12647 IBRD 18498(PCR) IBRD 18497(PCR)  - i - MEXICO BAJA CALIFORNIA TOURISM PROJECT LOAN 1420-ME Project Completion Report PREFACE This report represents the completion report for the Baja California Tourism Project financed in May 1977 under Loan 1420-ME for US$42 million equivalent. Although disbursements for the project were completed in May 1982, the physical components were not completed until April 1983. The Project Completion Report (PCR) was prepared in February 1985 and is based upon June 1982 data. However, more recent data on the project were received from the Mexican authorities in 1985 and are incorporated in this final version of the PCR. The PCR covers the imple- mentation experience and is partially based on a PCR prepared by the Borrower. In accordance with the revised project performance auditing procedures this PCR was read in the Operations Evaluation Department but the project was not audited by OED staff. The draft PCR was sent to the Borrower for comments; however, none were received.  - ii - MEXICO: RAJA CALIFORNIA TOURISM PROJECT LOAN 1420-ME Key Project Data Appraisal Item Expectation Actual Total Project Cost (US$ million) 84.0 122.2 Overrun (Z) 45.5Z Loan Amount (US$ million) 42.0 42.0 Disbursed 42.0 Date Physical Components Complete 01/81 04/83 Proportion Completed by Above Date (Z) 70.0 100.0 Proportion of Time Overrun (X) 60.0 Economic Rate of Return (%) 14.0 Financial Performance 2.0 Institutional Performance 1.0 CUMULATIVE ESTIMAIED AND ACTUAL DISBURSEMENT c 77 CY 78 CY 79 CY 80 CY 81 CY 82 I) Estimated (US$ million) 1.3 10.2 25.8 41.7 42.0 (ii) Actual (USS million) - 0.3 4.7 17.6 39.1 42.0 Z of (ii) to (i) -- 2.9 18.2 42.2 93.1 100.0 OTHER PROJECT DATA Item Original Plan Revisions Actual First Mentioned in Files 06/75 Government's Application Negotiation 04/08/77 Board Approval 05/10/77 Loan Agreement 07/05/77 Effectiveness 10/01j77 06/28/78 Closing Date 06/30/81 06/30/82 06/30/82 Borrower Nacional Financiera Executing Agency FONATUR  - iii - MISSION DAIA No. of Item Month/Year Persons Man/Week Date of Report Identification Mission 09/75 2 2.0 10/20/75 Preparation Mission 07/76 3 3.0 08/10/76 Appraisal Mission 10/76 10 28.0 04/18/77 Post-Appraisal Mission 02/77 2 2.0 04/18/77 Supervision Mission I 07/77 2 1.1 08/22/77 Supervision Mission II 03/78 3 1.7 03/28/78 Supervision Mission III 12/78 4 1.7 01/16/79 Supervision Mission IV 05/79 2 1.0 06/21/79 Supervision Mission V 11/79 2 1.4 12/19/79 Supervision Mission VI 04/80 1 0.9 06/25/80 Supervision Mission VII 07/80 4 5.0 10/03/80 Supervision Mission VIII 11/80 1 0.4 01/15/81 Supervision Mission IX 07/81 1 1.4 07/31/81 Supervision Mission X 01/82 1 0.9 03/25/82 Supervision Mission XI 06/82 1 0.4 07/09/82 Completion Report (draft) 01/83 3 2.6 07/15/84 Completion Report 10/83 1 0.4 02/15/85  - iv - MEXICO BAJA CALIFORNIA TOURISM PROJECT LOAN 1420-ME Project Completion Report HIGHLIGHTS 1. The purpose of the above project was to (i) create a new inte- grated tourism destination in Baja California for the potential tourism market for Mexico, (ii) stimulate Mexico's regional economic development, (iii) create additional employment and generate foreign exchange earnings, (iv) integrate the environmental considerations, mainly conservation, into the physical development to obtain a more sustainable investment for economic development. The overall development objectives will be attained over the next 6-8 years along with satisfactory foreign exchange earnings (para. 6.01). 2. The Baja California Project resulted in two contemporary well desigued tourist resorts, each with a support town and a pilot hotel. The infrastructure for the two resorts was designed to support a first stage construction over nine years by private investment of 2,100 hotel-rooms, 4,050 apartels (apartment-hotel) rooms and 960 condominium units in tourist villas. For each resort a 250 room medium category pilot hotel was built along with an international airport, roads, streets, walkways, water and sewer systems, electric power, telephone and ancillary services. Upgrading and basic infrastructure was provided for the adjacent support town and its expansion areas (paras. 3.02-3.09). 3. The Bank project was completed in September 1982; however, the first stage construction, including additional investment in tourism and urban facilities, cannot be said to be complete since only one quarter of the pro- jected hotel rooms were constructed by the end of 1982. A more meaningful and comprehensive evaluation can only be carried out at a later date. Nevertheless, it is possible at this stage to state that the project will over time attain all its major original objectives. The attractiveness of the project was enhanced by substantial urban investment in existing towns of San Jose del Cabo and Loreto which have greatly benefitted the local population (paras. 5.07 and 6.01).  MEXICO - LOAN 1420-ME BAJA CALIFORNIA TOURISM PROJECT Project Completion Report I. BACKGROUND A. Introduction 1.01 In 1975 the Government of Mexico indicated its interest in the development of new tourism destinations in Baja California, after completion of the new resort of Cancun on the Caribbean coast (financed in part by the Inter-American Development Bank at a total cost of about US$41.5 million) and Ixtapa-Zihuatanejo on the Pacific Coast (financed in part by Bank Loan 793-ME US$22 million -- total cost US$134 million). It was felt that the existing tourism areas would satisfy only part of the potential tourism market for Mexico. Early in 1976 the Government requested that the Bank consider four sites for development along the East Coast of Baja California. Subsequently, during a project preparation mission in 1976, agreement was reached on two main sites --Loreto and San Jose del Cabo-- 360 km and 200 km north and south of La Paz respectively. 1.02 The tourism project consisted of basic infrastructure required for development of two new tourist resorts - each with a support town and a pilot hotel. The infrastructure for the two resorts was designed to support a first stage construction over nine years, by private investors, of 2,100 hotel rooms, 4,050 apartel (apartment hotel) rooms and 960 condominium units and tourist villas. For each resort, a 250-room pilot hotel of medium category was built along with an international airport; roads, streets, walkways, water and sewage systems, electric power, telephone and ancillary services. Upgrading and basic infrastructLlre was provided for the adjacent support town and expansion areas. With the Government's commitment to conservation of the natural environment, detailed coastal surveys were undertaken as part of the base line studies, so that p oject preparation took one year. While the loan effectiveness was delay"d seven mDnths until June 1978, well drilling and rough grading had started July 1977 in Loreto. The first pilot hotel in Loreto was opened for business in November 1980, and the airport runway was cowpleted in December. The San Jose del Cabo pilot hotel was completed August 1981, one year behind the SAR schedule. These pilot hotels have set an attractive and appropriate architectural style for each of the resorts (see Annex 5, Photographs 1 through 3 and 19 through 24). The Bank project was completed by September 1982. However, the first stage construction, including additional investment in tourist and urban facilities, cannot be said to be complete since only one quarter of the projected hotel rooms were constructed by the end of 1982. A mDre meaningful comprehensive evaluation can only be carried out at a later date. Nevertheless, it is possible at this stage to state that the project will, over time, attain almost all of its major original objectives. The attractiveness of the project was enhanced by substantial urban investments in the existing towns of San Jose del Cabo and Loreto which have greatly benefitted the local population. This Project Completion Report is based on information  -2- contained in the SAR 1483-ME, dated April 18, 1977, and the review of Bank files which included supervision and progress reports of the project. A supervision mission visited Mexico in January 1983, to obtain additional information for the report. The report was prepared by Edward Echeverria, with assistance from Thakour Persaud and Ragnar Overby. B. Tourism Sector 1.03 Mexico is one of the World's major and most richly endowed tourism destinations. Its varied attractions include architectural remains of a series of major civilizations, entertainment ranging from modern to traditional music and dance, a wealth of contemporary creative arts, an agreeable climate and natural environment and excellent beaches. There are an estimated 8,000 hotels ranging in size from hundreds of rooms to small family-operated guest houses. The total rooms available nationwide was about 250,000 in 1982. In addition Mexico is one of the most accessible foreign destination for US and Canadian tourists who, together, accounted for 90% of foreign visitors over the last decade. The number of foreign visitors to Mexico increased steadily from 1.4 million in 1965 to over 4.0 million by 1980. Because of the acknowledged importance, the Mexican Government has received financial and technical assistance from the Bank, IDB and other private lenders. In 1972, Mexico received a Bank Loan (793-ME) for US$22 million to help finance tourism infrastructure development of the Ixtapa/Zihuatanejo areas,l/ and in addition to Loan 1420-ME, Baja California Tourism Development Project a third loan was made by the Bank in 1978 (1524-ME) for US$50 million to help finance lending for tourism development throughout Mexico.2/ In 1976, there was an IDB loan for US$47 million to develop Cancun as a tourist destination. Another IDB loan for US$30 million was made in 1978, to finance lower category hotel development in Mexico. 1.04 The Mexican peso was devalued in 1976 which led to a significant expansion in tourism facilities shortly thereafter as hoteliers sought to take advantage of the resulting increase in the number of tourists visiting , Mexico. During 1978, the average room occupancy reached an unprecedented overall annual level of 78% in Mexico City's first class hotels. By 1979 pressures were once again building for another peso devaluation. As the peso became over valued, other tourist destinations began to increase their share of the tourist market at Mexico's expense. Finally, beginning in 1982, the peso was devalued in several stages from a rate of 26 to the US dollar to approximately 200 at this time. One immediate result of the devaluation was that foreign exchange earnings from tourism declined significantly while visitor arLivals held steady at about four million for 1982. However, with world economic conditions improving and visitors now reacting to the dramatic price reductions in Mexico, officials are once again planning for substantial increases in tourism facilities. Between 1983 and 1988 officials estimate that about 120,000 new hotels rooms wL-ld 1/ This project is complete and a Project Completion Report dated July 7, 1980, has been prepared. 2/ This project is complete and a Project Completion Report dated June 17, 1982, has been prepared.  -3- be required to meet the needs of tourists to Mexico.3/ While Mexico City and Acapulco are still the major destinations, Cancun and Ixtapa/Zihuata- nejo have become successful "terminal resorts" for foreign and domestic tourism. Domestic tourism in Mexico is also important. With the increased affluente of Mexico middle class and the 5-day workweek, this market is growing rapidly. With the growth in demand, hotel capacity has expanded rapidly and hotel construction peaked in 1979 with over 8,000 rooms under construction all over Mexico. 1.05 The major contribution of tourism is to the balance of payments, the generation of employment and more recently to the dispersal of economic activities. Between 1970 and 1980 tourism receipts grew from US$415 to US$1,671 million and the tourism industry provided an estimated 400,000- 600,000 jobs for mostly unskilled and semi-skilled workers in 1980. II. PROJECT PREPARATION AND APPRAISAL A. Project Preparation 2.01 The invaluable experience gained during project preparation of Ixtapa-Zihuatanejo and Cancun served to guide FONATUR in several way, including the initial concepts, preliminary designs and calculation of realistic cost estimates. FONATUR assigned senior managers and technical staff from Cancun and Ixtapa to direct and coordinate the project preparation activities. The Bank preparation mission assisted FONATITR and its consultants at each location in preparing area analyses and preliminary land-use plans based on detailed soil/terrain analysis, soils samples, storm drainage, geology, vegetation and climate. The above data was factored onto an evaluation matrix to achieve functional Land-Use-Plans that integrated the tourism and urban activities. In addition, FONATUR wanted to repeat the success of Ixtapa-Zihuatanejo by upgrading the utility networks, community facilities and environment of the two service towns -- Loreto and San Jose del Cabo. Hence, early in the process, steps were taken to distribute project benefits as well as social integration. Draft legislation to create Federal Land Trusts (FIDEICOMISOS) to undertake the urban improvements and to operate the utility network for an initial period was approved. 2.02 Environmental Protection and Resource Conservation. As part of the environmental base-line studies, the Mexican Institute of Ocean- ographics of University of Baja California, undertook a coastal study of 30-35 km at the two locations. Beach stability and wave energy studies established safe building lines, and turbidity and salinity were part of the qualitative analysis completed before final land uses were designated. The Bank provided incentives, guidelines and terms of reference for re- source conservation studies and coastal managemert with special attention to (i) the San Jose del Cabo lagoon; (ii) Loreto Oasis Mountain Park; (iii) Coronado Island and marine park; and (iv) Puerto Escondido. These studies have now formed the basis for establishing ecological parks around Loreto and the Lagoon of San Jose del Cabo. Bank project staff encouraged 3/ See Asta Travel News, March 15, 1983, pp. 103-106 for a discussion of this and a summary of recent hotel construc-ion activities in Mexico.  -4- the novel policy of realizing environmental protection through self- interest and private initiatives by: (a) design with the environment; (b) managing the environment better for business purposes; and (c) reuse, rather than flow-through, of human waste. The measures were adopted by FONATUR to provide added tourist attractions and longer life to the project, thus contributing more to the economy (see Annex 3, Environaental Performance, paras. 4.01 & 4.02 and 5.07 to 5.09). 2.03 Apprepriate technologies were applied to energy conservation using flat plate solar collectors to produce hot water. In the site plans, buildings were oriented for minimum heat intake with landscaping in the open interior courts designed to create cool environments aimed at reducing the desert heat. For the service worker housing, a core unit of one room plus kitchen and bath was designed to be expanded to the needs of each family through affordable aided self-help programs. B. Project Appraisal 2.04 The project was appraised in October 1976 by a mission consisting of Bank staff -- seven from the Tourism Department, one from Water Supply, one from Environment and one from Aviation, covering technical, financial, economic and ecological aspects on the basis of preliminary design and engineering studies. Environmental (social and health) aspects were highlighted by the appraisal mission. Factors prone to upset the described environment were identified including the existing transpenninsula highway (not financed by the Bank), water resources scarcity, excessive summer heat and local cyclones. The project at appraisal consisted of the 'ollowing components: (i) infrastructure and oEher facilities for the Loreto Tourism Area (Part A) and San Jose del Cabo Tourism Area (Part C); (ii) a medium category 250-room hotel for each tourism zone; (iii) infrastructure and other facilities for the two existing towns: Loreto Urban (Part B) and San Jose del Cabo (Part C); (iv) two interna-ional airport facilities (Parts A and C); and (v) investment promotion, community development activities, conservation studies and programs, and a tourism market and economic study. The studies were Part D. The total project cost was estimated at US$84 million and the foreign exchange component, estimated at US$42 million, was to be financed by the Bank. FONATUR was entrusted with executing the project.  -5- III. PROJECT IMPLEMENTATION A. Effectiveness 3.01 The loan beceme effective eleven months after loan signing. The main delay was caused by slow land acquisition from private owners by the FIDEICOMISOS in Loreto and San Jose del Cabo. The July 1976 preparation mission had reviewed w-ith FONATUR and CORETT (Comision para la Regulari- zaclon de ia Tenencia de la Tierra) the necessary steps in which 10,i75 ha. in and around Loreto and Puerto Escondido were to be purchased including 20 km of coast line, and 1,879 ha. for San Jose del Cabo. While all the legal documents were prepared by October 1977, the Government hesitated eight months before legalizing the two FIDEICOMISOS; however, they were finally created in June 1978. B. Project Execution and Natural Disasters 3.02 To achieve the integrated development on schedule, FONATUR ha co assume the implementing role as well as coordination and supervision as in the Ixtapa/Zihuatanejo Tourism Project. In July 1977, FONATUR drilled production wells for the State Water and Sanitation Agency and set the alignment of the 155 KV power line and sub-station for the Federal Electricity Commission (CFE) for minimum environmental impact. The same was done for telephones for TELMEX. The hotel and vocational training schools for IMSS in the two urban areas were given an early start, grouped with other community facilities to form functional social centers (see Annex 5, Photos 14 and 18). The Federal and State operating agencies provided careful supervision to ensure conformity to their standards. The construction of the FONATUR staff housing and field offices in Loreto started in September 1977 (see Annex 5, Photos 10 and 25) and for San Jose del Cabo in February 1978. Computerized construction schedules were prepared for all 93 major components with over 1,000 sub-components; weekly PERT charts were maintained to help resolve coordination problems. FONATUR appointed Mexican consulting engineers as construction managers to assist the FONATUR resident coordinating engineers. While this created certain tensions, they served as an added check on quality and quantity control. 3.03 Natural Disasters. By June 1979, with half of the physical components under construction, the Trans-Peninsula Highway, washed out by heavy rains was closed to heavy trucks for four months and caused a serious materials shortage. Fortunately, FONATUR was able to import 10,000 tons of cement which was off-loaded at San Carlos Port on the Pacific Coast opposite Loreto. Another hurricane hit Loreto in September 1979, with 3,300 mm of rain in 24 hours (a 50-year flood) and tore up the highway once again. Main drainage channels designed for 2,000 lps were charged with 10 times that volume. Fortunately, the recently built dykes held; otherwise, the town and airport would have been flooded by 1.5 to 2.0 m of water with possible heavy loss of lives and property. A similar hurricane hit San Jose del Cabo a year later (see Annex 3, para. 4.02) 3.04 Cost Increases. By mid-1980 semi-skilled labor had increased from M$2,500/week to M$4,400 (US$150). As a result some contract items increased 236% over SAR estimates. Mechanical and plumbing contracts for the hotel suffered a 39.5% increase from May 1980 to January 1981, while  -6- construction equipment increases were between 30 and 78Z. Furthermore, in 1980, the Secretary of Program and Budgets only allocated US$16 million of the approved US$30 million needed for project wo-zks that year. C. Changes in Land-Use Plans 3.05 The March 1980 supervision mission opposed a change in the site plan for San Jose del Cabo, where the main Boulevard was looped out onto the beach to create a "window to sea.' The boulevard would have invaded the 'primary dune" system and created a conflict between pedestrians and vehicles. After a thorough review, the Boulevard was brought back to its original alignment and the primary dune protection was written in strong set-back lines across all site plans and described in law (see Map 3). A similar change was proposed for the Loreto Tourism Area to make a large traffic island to hold the animation center with exhibition hall, theatre, restaurants, and clubs for day and night activities - requiring direct and safe pedestrian links to the beach. The original plan was finally adopted and implemented (see Map 2). A beneficial change was made in the San Jose del Cabo plan by substituting a 9-hole golf course for d4sert parks and walkways. The cost of the golf course (not financed by the Bank loan) is being recovered by increasing the sale price of residential lots on the fairways from M$250 to M$450 (M$200 above the SAR estimate). The cost of drainage was reduced and the recycled effluent from the treatment plant will be used to irrigate fairtvavs and greens (see Map 3 and Annex 3, para. 3). D. Social Tourism and Construction Workers Accommodations 3.06 To remedy the severe housing shortage of the construction workers and engineers, two 120-room pre-fabricated hostels (not part of the project) were trailed down in sections from San Diego completely furnished and equipped for Loreto and San Jose del Cabo. Initially, they were furnished for rent to the construction coLpanies at four persons per ioom using two double decker bunks. By June 1980 the first hostel, Nuevo Sol, was built on 2.4 hectares in San Jose del Cabo on the western edge of the beach adjacent to an existing trailer park. With the reduction in labor force, the hostel now provides accommodation for social tourism at a third of the price of regular hotels. A simple cafeteria provides tasty food and the gardens were attractively landscaped with a small swimming pool, outdoor bar, grill and changing rooms that are open to the public. The Loreto hostel, Vina del Mar, was completed in December 1980, on the ejido- beach adjacent to the town of Loreto and next to the long established motels for sports fishermen (see Annex 5, Photos 4 and 5). The hostels were financed by FONATUR and are managed by private entrepreneurs. The total cost of the San Jose del Cabo hostel was US$969,000 or US$8,075 per room (US$1,840 per construction worker accommodation). The experience in Ixtapa-Zihuatanejo provided a good lesson where the construction camps were torn down and rebuilt four times at a total cost of about US$1,200 per worker then finally demolished. The cost of refinishing the hostels after the construction workers left was 'ess than US$200 per room.  -7- E. Improvements in the Urban Environment 3.07 FONATUR made an early effort with community organizers to improve the urban environment of San Jose del Cabo. By June 1980 the center of the 31d town was renovated with a new landscaped central plaza including the forecourt of the old church at the north end of the improved Boulevard (see Annex 5, Photo 27). The facades of the s!lrrounding buildings were renovated in traditional colonial style designed by FONATUR architects and implemented by loans to the owners. All the improvements were completed in time for the 250-year celebration of the founding of the town. Furthermore, FONATUR assisted the FIDEICOMISO and the Municipality with improvements to the slaughterhouse and other municipal service buildings. The southern end of the Boulevard was realigned to connect with the main access Boulevard to the tourism zones from the town (see Map no. 3). With these urban ameneties and improvements, FONATUR gained the support of the Municipality and residents who feared that their needs would be secondary to the tourism development. An urban improvement plan was prepared for the center of Loreto. The main entrance was integrated into a new sub-division of 5,500 fully serviced lots for the expansion of the town with an attractively landscaped entrance (see Annex 5, Photo 9). Unfortunately, progress on the renovation of the old town is slow due to lack of funds; the main road will be realigned to create a plaza in front of the mission church - the oldest continual mission in Baja California (see Map no. 2). By December 1982 civil works (not part of the Project) were virtually complete on the water supply and 80% complete on the sanitary sewers, rebuilding the sea wall, storm drainage and Boulevard along the beach. 3.08 Each of the towns was designed for 25,000 population from an initial size of 3,000 to 4,000. To provide for low-income service workers in the initial stage, 500 minimum sized serviced lots were distributed in each town. Construction materials depots were established and affordable prototype -core units were designed. FONATUR is also providing technical assistance in the aided self-help program. F. International Airports 3.09 The two airports were designed with a capacity of 250 peak- hour passengers by Mexican consulting architects/ergineers and supervised by SAHOP; the Bank staff of LCPPR supervised the construction as part of the Bank's lending to the national program of airport improvements. For the San Jose del Cabo Airport, a new 2,200 m runway, taxiways and apron were already under construction during appraisal. The project helped finance the passenger terminal, fire and rescue building, navigation aides, fuel farm, security and parking. The VOR flight approach alignment was adjusted during appraisal to avoid the town and the tourism zone. By October 4, 1982, the airport was fully operational with a well organized tent-structure passenger terminal. Work on the permanent terminal has been delayed because of the Presidential order (para. 3.10) b.: is scheduled for completion by january of 1985. The airport was already included in the bi-lateral air agreement with the US to permit service from Los Angeles, Tucson and Phoenix. Loreto's airport was only adequate for light aircrafts and DC3s. As part of the project the existing runway was expanded to 2,200 m and was provided with taxiway and apron with full services for commercial jets. The runway, taxiway, apron and fuel services were  -8- operational by November 1982, and the small attractive existing terminal will serve passengers t-hrough 1986/87. Construction of the new terminal with the same capacity as the one for San Jose del Cabo has been delayed for the same reason, but is scheduled for completion by mid-1985. Loreto now has scheduled air service on international routes to and from Los Angeles and Phoenix, and the number of routes will be increased as the hotel capacity is expanded. The land-use plan of the town was carefully designed with sports field, playgrounds and other non-residential uses under the 90 decibel or greater noise cone of the flight pattern (see Map 2 and Annex 3, para. 5.04). G. Suspension of Works 3.10 On the eve of the completion of the project on April 21, 1982, FONATUR received a national Presidential Decree published in the -Diario Oficial to: (a) 'Suspend indefinitely all works that were not directly related to income generation; and (b) Postpone the start of new investment and reduce the rate of construction wherever possible-. Excluded from the Decree were the construction and expansion of hotels, restaurants, centers of camping and recreation; however; all urban infrastructure and community facilities under construction and the tourism social centers were suspended by FONATUR, except where the contractor owed FONATUR from advanced monies. Fortunately, the urbanization works were finished in both Loreto and San Jose del Cabo by 1982; however, the order suspended some of the essential community facilities that were at least 75% completed (including furnishing and equipment) and would have been completed by the end of June 1982. The mission prepared in collaboration with FONATUR Technical Department a revised completion schedule and cost estimates to place each of the facilities in operation by staggered dates starting September 30, 1982. H. Costs and Disbursement 3.11 The final cost of the project was US$134.1 million as compared with the SAR estimate of US$83.4 million, representing a cost overrun of 60.7%. The SAR estimate was based on an exchange rate of Mex$19.9 while the average ex;change for the sub-projects varied from Mex$47.75 to Mex$54.07. Cost overruns for the sub-projects varied greatly with the pilot hotels having increases of 210% (Annex 1, Table I to 4). I)uring the construction of the hotels, FONATUR and SECTUR decided to build additional ameneties for social activities such as discotheques, specialty restlurants and aquatic facilities which added over 50% to the SAR estimate, higher quality finishes and furnishings added 20%, and inflation, another 30%. While adding to the visitor's enjoyments, they raised the category to five star while still catering to a four star market. Bank supervision missions were unable to convince them of the financial implications. The costs of the infrastructure arnd tourism community facilities were carefully monitored and timely progress reports evaluated. As a result, the Loreto Tourism area cost overrun was 29.4Z and Loreto Urban (the town), overrun  was only 6.5%. For the combined tourism and urban works for San Jose del Cabo the cost overrun was 27.6%. All the cost overruns for the infra- structure, etc. - excluding the hotels - were due to price increases (inflation) of materials and labor (see para. 3.04). Due to delays in land acquisition, disbursements were low through CY 1979 and less than 40% through CY 80 compared to the SAR of 99%. However, by the end of CY 81 they were 93% and fully disbursed by May 1982, after a 15-month extension of the closing date. 3.12 Procurement. Procurement was in accordance with the provisions of the Loan Agreement and Bank Guidelines. The components were sensibly packaged in bidding documents to allow for economies of scale while at the same time allowing flexibility so that smaller local firms of Baja California could participate. The special commission in FONATUR for the evaluation of all bids promptly submitted all evaluations for Bank review. By March 1982, FONATUR had executed 185 contracts of construction, equipment and materials: 56 for the Loreto Tourism Zone, 15 for Loreto urban and 51 for San Jose del Cabo. Civil works contracts with values less than US$500,000 were retained in FONATUR offices and reviewed during subsequent missions. I. Quality of Work Completed and Performance of Consultants 3.13 The quality of work completed throughout the project was excellent. The attractive prototype hotels using local materials have set the appropriate architectural style for each resort (see Annex 5, Photos 1 through 9 and 19 through 24). Note the flat plate solar collectors in Photo 22. There were two exceptions to the high quality in San Jose del Cabo: a section of paving which had to be redone where the sub-soil conditions proved inadequate and the inadequate foundations for the sewage treatment plant (see Annex 3, para. 4.02). The success of the operation was due in large part to the experienced staff appointed by FONATUR to supervise project execL on. Except for limited participation of a US coastal scientist consultant, all consultants were Mexicans. The land planning consultants showed sensitivity in delineating functional land-use plans based on soil/terrain analysis and backed by sound land-use regulations and controls. The final site development plans were of high quality and expressed the objectives of the project (except for the upgrading of the pilot hotels, mentioned in para. 3.11). In collaboration with operating and regulatory agencies, FONATUR achieved a high degree of excellence in the architectural and engineering details of the buildings. All consultants worked effectively in attempting to achieve an optimum construction program within the financial framework of the project. Only a few of the features were rejected due to excess cost. IV. INSTITUTIONS AND MANAGEMENT 4.01 The main Government institutions involved in tourism activities are the Ministry of Tourism (SECTUR), a special trust, Foado Nacional de Fomento al Turismo (FONATUR), and an advisory council, Consejo Nacional de Turismo. There is also Nacional Hotelera, a hotel management group which functions independently but is under the organizational structure of FONATUR. FONATUR was established as a trust fund of the Federal Government under the administrative supervision of Nacional Financiera, SA,  -10- (NAFINSA), a major public sector development financing institution. FONATUR's operating regulations permit its involvement in a wide range of activities throughout Mexico. However, among its primary responsibilities are: (a) rediscounting of up to 902 of loans made for tourism related activities by intermediate institutions, (b) direct equity investment or lending in tourism, especially with respect to infrastructure work and initial investments aimed at opening up new tourist destinations, (c) technical assistance to intermediate institutions and borrowers, and (d) economic studies involving market analysis. This last item was financed in Part *D" of the Bank loan (see Annex 4, Economic and Marke'.^ng Studies). A. Performance of FONATUR 4.02 During the project implementation, FONATUR's administration changed with changes in Government; in fact, the Director General of FONATUR was changed three times along with the sub-gerentes. Nevertheless, continuity was maintained with smooth transition, mainly because key project personnel were retained. Over the years, FONATUR has maintained its effectiveness to plan, coordinate and implement major tourism projects throughout the country. In turn, this made the coordination much more effective with other agencies under the project such as CFE (power), TELMEX (telecommunication), the SAHOP and SCT (airports), and SARH (water resources). When the Bank expressed concern with the lack of progress on the sites and services component, FONATUR on the following mission convened a seminar/workshop in Lazaro Cardenas to evaluate the Bank urban upgrading project. The results were applied to similar programs for Loreto and San Jose del Cabo. During the PCR mission, FONATUR and all the operating agencies cooperated in providing information to prepare the necessary documentation. B. Bank Group Performance 4.03 The Bank group responded to the request for assistance in 1975, and within three months an identification mission was sent, followed by appraisal in October 1976. A Bank water supply engineer appraised the water and sanitary sewer components and a PAS environmentalist appraised the conservation and environmental management programs. The first four missions consisted of 50-60% technical assistance on the revisions to the land-use, site development and architectural plans. Technical suggestions on design and engineering by the mission were quickly adopted in the field in a spirit of cooperation and with open communications (see change in Land-Use Plans, para. 3.05). The intensive supervision during the first year of implementation provided a sound basis for making mid-course adjustments in phasing to accommodate for the delays in the opening of the hotels. V. FINANCIAL AND ECONOMIC RE-EVALUATION A. Financial Aspects - Hotels, Airports and Water Supply 5.01 During the PCR mission in January, 1983, work was still being done on the airport terminals (para. 3.09) and the commercial/community centers. The incompleteness of such physical components, the devaluation  -11- of the Mexican peso and its impact upon tourism flows make it difficult to evaluate financial performance with those projected during appraisal. 5.02 For the financial and economic analyses, the cost figures are actual costs combined with estimates made to complete the few remaining c. nponents. Since most of the operations have recently begun, the income and revenue projections are based on current conditions as well as future expectations. The base year for the economic analyses is 1983 and all figures are adjusted to December, 1983, prices. Apart from the two distinct geographical locations of sub-projects in Loreto and San Jose del Cabo, each site has several components spread out in the tourism zones and adjacent urban areas. Consequently, the task of an economic and financial evaluation of the components becomes more complex. The tables in Annex 2 present details of costs of the various components along with the benefit streams. These figures are in both current and constant prices for the infrastructure works, hotels, airports, and the water and related facilities. 5.03 Hotels. Annex 2, Tables 6 and 7 summarize projected operations of FONATUR's hotels in Loreto and San Jose del Cabo. These tables are based upon actual figures and projections derived from studies made by FONATUR for the areas. As they indicate, the hotels are expected to operate at a loss up to 1992 if capital expenses are considered. During appraisal, it was expected that losses would extend only up to 1982; however, as explained in para. 3.11 FONATUR added amenities for increase visitor enjoyment. They now must increase tariffs commensurately. It was also projected that occupancy rates would be higher, starting out at 50% and rising to 70%. In current projections, occupancy rates begin at 18.4Z for Loreto and reach a maximum of 58.4% by 1990 and 26.8% and 68.8% respectively for San Jose del Cabo. The low rates for Loreto are due to a lag in the tourist market for the new destination; however, promotion efforts during 1983 and 1984 have increased occupancy rates (see Annex 4, para. 3). The current readjustment period for tourism in Mexico makes it rather difficult to estimate profitability prospects of these and other new hotels in the area. However, indications are that at least over the next decade, Mexico will continue to maintain its price advantage over other competing destinations. With many North Americans tour operators now offering packages to Baja California in direct flights, it is expected that the actual situation would be much better than current projections. 5.04 Airports. Annex 2, Tables 3 and 4 summarize the cost and benefit position of the airports in Loreto and San Jose del Cabo respectively. The operation and income figures are projections made by the airport service department 4/ based upon: (a) their experience in operating similar facilities throughout Mexico, and (b) projected traffic estimates. Both of the airports have suffered serious delays and cost overrun which have caused wide differences between SAR estimates and current projections. Additionally, lower frequency of airline flights have also contributed to the poor financial position of the subproject. The SAR estimated total annual revenue at full development of about US$3.7 million and US$2.2 million for Loreto and San Jose del Cabo respectively. Current projections are for receipts of only US$1.7 million and US$2.2 million for Loreto and 4/ Detail of these projections and assumptions are in the project file.  -12- San Jose del Cabo respectively. While in the SAR, there is a projected positive earning situation after five years of operation, under current projections there is expected to be steadily increasing losses. Projected operating income (including the departure tax) is not expected to be sufficient to meet the burden of administrative, operating and maintenance costs. This indicates the need for either a review of the various operating aDd maintenance cost categories or the tariff structure, or both. 5.05 Water Supply. Annex 2, Table 5, contains details of the cost and benefit streams associated with the water operation of Loreto. FONATUR had planned at appraisal to have a new system established in San Jose del Cabo also. However, after initial analyses, the water sources and existing distribution network was considered adequate with a few minor investments. New trunk mains and distribution network was added to serve the tourism zone. During appraisal, it was assumed that both the Loreto and San Jose del Cabo water and sewage works would be operated as independent units managed by local municipal commissions (FIDEICONISOS). This has not yet occurred, and it appears as the present system will continue to be administered by the Direccion de Aguas y Saneamiento of the State of Baja California. The existing water systems are weak financially and are seriously under staffed and ill-prepared to handle present operations. All of their revenues are funnelled to the state capital. Periodically the State Government transfers a portion back to the operating agencies. A recent law affecting water and other municipal entities is expected to gradually strengthen their financial resources. 5.06 Reliable figures on the operations of the water agencies are difficult to obcain. Estimates of current water losses and unaccounted volume range from 40 to 65% of production volume. However, this does not appear in Annex 2, Table 5. Because of the present situation described above, FONATUR regards the figures in Table 5 as more of a projection on future operations rather than a presentation of current figures. These projections can be achieved if the state and local authorities take appropriate actions to comply with the original agreement to create independent water authorities. If this is done, the new z&tered house connections and services would be combined with efficiency neasures aimed at reducing unaccounted water, thereby recovering cost for operation, maintenance and expansion of the system. B. Economic Re-Evaluation 5.07 Tables 1 and 6 of Annex 2 present details of the project costs by year. The reestimated internal economic rate of return (IERR) for the entire project is 14%. The IERR for Loreto is estimated to be 17% while for San Jose del Cabo (SJC), it is 8%. In the SAR, it was estimated that these figures would be 17 and 19%, respectively for Loreto and SJC. Given the extent and intensity of the impact of such adverse factors as devaluation, decline in international tourism flows and delays in project implementation, the original estimate is not comparable with present estimates. The following summarizes the present and original estimates of the IERR.  -13- Table 1: Comparison of Appraised and Actual Economic Rates of Return Loreto San Jose del Cabo Total Project Appraisal Report: z (a) Best Estimate 17 19 N.A. (no shadow pricing) (b) Invest. Cost up 20% 16 18 N.A. (c) Operating costs up 20X 13 15 N.A. (d) Revenue down 10% 14 16 N.A. Reestimation of PCR 17 8 14 5.08 The infrastructure cost overrun for this project is estimated to be about 24%. However, in terms of its distribution between Loreto and SJC, the latter has experienced about twice the cost overrun of the former (see para. 3.11). Consequently, in the appraisal sensitivity analysis, there is some comparability with the case of investment costs rising by 20% for Loreto. For SJC, the higher cost overrun does not allow for similar comparisons. Additionally, the factors of project implementation delays and world economic conditions have also had a negative impact upon the project.5/ C. Other Benefits 5.09 In terms of employment benefits of the project, it is estimated that the construction work has created about 1,600 new jobs. Employment in the hotels and ancillary activities is currently estimated to be about 1,600 with approximately 7,200 at full development. These two new sites have also created a new pole for regional economic development in the peninsula, and they contribute to the diversity of Mexico's touristic assets. Since this exercise is occurring so early after project completion, there are several readjustment factors currently affecting Mexico's tourisw industry. VI. CONCLUSIONS AND RECOMMENDATIONS 6.01 The integrated development of the two resort towns is being achieved along with the social, economic and institutional development objectives for the sourthern part of Baja California Peninsula. Reports from tourists visits to both resorts are most favourable. The overall development objectives will be attained over the next 6 to 8 years. :he reestimated internal economic rates of return for the entire project is 14%. With the diverse locations of sub-projects 560 km apart, there was a 5/ In may 1985 FONATUR prepared a revised cash-flow and internal rate of return based on additional revenues from the sale of the undeveloped adjacent lands in the three sites of the project (see Annex 7).  -14- risk of uneven hotel development because of the larger established tourist market in San Jose del Cabo. As a consequence, San Jose del Cabo today offers four hotels, the best being the FONATUR pilot hotel in terms of quality of environment and recreation facilities, while the single hotel in Loreto of equal quality offers a greater variety of nature preserves and conservancy. All indicators of land sales and incentives to build hotels show that the development objectives are being achieved. The increase in tourism traffic has been due to the construction of an international airport at each location and improving overnight ferry service from four ports of the mainland to San Jose del Cabo, La Paz, and Santa Rosalina (North of Loreto). From the experience of this project and the earlier Ixtapa--Zihuatanejo Project, it is worth emphasizing: (a) land acquisition and land related issues should be substantially completed by the time the project is presented to the Board; (b) financing of the first hotel resulted in an attractive resort using local materials, set the architectural style for the resort, but the design of additional hotels must be scrutinized to maintain a harmony of architectural form and style; (c) environmental controls are essential to create and maintain a new tourism destination starting with the environmental base line, diagnostic surveys, land-use regulations, natural resources, waste management, urban form and architectural style, landscaping; (d) community development effort should be initiated very early in the project cycle so that the project implementation receives full support from the inhabitants thereby minimizing the social costs and stresses; and (e) implementing agencies should be vested with strong coordinating powers and fully staffed in order that they can effectively coordinate the activities of the various institutions involved and thus prevent delays.  -15- ANNEX 1 Table 1 MEXICO: BAJA CALIFORNIA TOURISM PROJECT LOAN 1420-ME Summary Cost of Project Completion up to June 1982 (US$'000) 1. Infrastructure and Tourism and Community Facilities Appraisal Estimate Latest Estimate December 1976 April 1982 A. Loreto Tourism Area (Part A)d/ 22,279 28,835 B. Town of Loreto (Part B) 12,028 12,814 C. San Jose del Cabo (Part C) 18,850 24,058 (Sub-Total) (53,157) (67,707) a/ 2. Pilot Hotels Two Hotels - Category AA- (Parts A & C)d/ Loreto 23,761 250 rooms 15,892 SJC 25,508 b/ 3. Airports (Parts A & C)d/ Loreto 7,142 14,393 SJC 11,960 c/ Total Cost 83,442 134,078 Cost Overrun 50,636 (60.7%) a/ Cost overrun for infrastructure - 23.6% b/ Cost overrun for hotels - 210.0% c/ Cost overrun for airports - 32.7% d/ Parts of Loan Agreement April 1984  -16- aNE I Table 2 MICO: WA CALI IA TOMS PROJEUCT LOAN 1420-NE Loreto Touris Area Come of Infrastructure & Tourism Pacillties Appraisal Estimte S Completion Latest Estimate December - 1976 as of April - 1982 Fa cllties (HeS'OOO) CUSS'000) ci June 15, 1982 (eS'OOO) CUSS'OOO) If 1. FONATXI's Admin.lldg.& 6sg. 7.860 395 100 29,630 823 2. Eartbvorks 6 Storm Drainage 18,507 930 100 96,884 2,061 3. Water Supply System 9.258 465 100 80,737 1,718 4. Satary Sewerage System 13,697 688 100 61.360 1,306 5. Street Paving 9,682 487 100 83,967 1,787 6. Electricity & Stret Llghtlng 55,143 2,763 100 121,116 2.577 7. Telecomnications a/ 34,109 1,714 100 32,569 693 8. Colf Course 6 Club House 18,702 940 d/ 50 147,610 1,313 9. Comrcial 6 Cultural Center 7,875 396 95 119,500 2,543 10. Beach Recreation Facilities 3,100 156 50 10,589 125 11. Trailer Park - Pto. Escondido 5,250 264 100 58.000 1,933 12. Marina - Pta. Escondido - - 90 146,860 2,937 13. Fire & Pollce Stations 5,740 288 95 35,616 758 14. Emergency Clinic 1,060 53 95 4,050 86 15. Conservation * Landscaping 830 42 90 7,146 152 16. Plazs & Parks b/ - - 90 125 3 17. Environmntal Saetation 1,234 62 95 4.524 88 (Sub-Total) (196,712) (9,885) (1,004,267) (20,903) Acrtivities 1. Promotion 9,950 500 80 48,686 1,036 2. Pre-opening 7,224 363 100 11,040 235 3. Project Administration 27,940 1,404 85 197,661 4,201 4. Consulting Services (16.238) (616) i) Final Design 9,831 494 100 38,763 825 (ii) Supervision 5,910 297 80 24,794 528 111) Specal Studies 497 25 85 10.8S8 231 (Sub-Total) (61.352) (3,083) (331,602) (7,056) BUaeline Cost 12,968 Contingencies (3.793) Physical Increase 1,397 Price Increase 4,396 (Sub-Total) (1,335,869) (27,959) Land Aculsition 70.000 3.S18 41.163 876 TOTAL COST 443,352 22,279 1,337,032 28,835 (29.4Z cose overrun) - Estimated cost increase over Appraisal Estimate - USS35,163,000 (158T) - Project Completion: June 30, 1982 a/ Not financed by loan. b/ Additional items not part oi Bank project. c/ Rate of exchange USSI.0O - MexSL9.9. _/ Excludes earthmovement. e/ Rate of exchange USS1.0O - MexS47.76 avg. April 1984  -17- ANNEX 1 Table 3 MaUC0: RAJA CALIFORNIA TOURISM PROJECT LOAN 1420-HE Town of Loreto Cost of Tnfrascructure & Tourism Facilities Appraisal Estimate 2 Completion Flnal Estimate December - 1976 as of June 30. 1982 c/ Faciliries (MHxS'OO0) tUSS'000) b/ Juno 15, 1982 (MexS'000) (USS'0C0) 1. Earthworks & Storm Drainage 18.654 937 100 54.606 1,162 2. Water Supply System 15.366 772 100 66.741 1,420 3. Sanitaer Saurage Systeu 21,477 1.079 100 54,718 1.164 4. Street Paving 12.244 615 100 26,181 557 S. rlectricity 6 Screet Lighting 18.806 945 100 42.739 909 6. Telecom nicatlons a/ 7.463 375 100 35,000 745 7. Beach Recreation Facilities 2,100 106 100 23,444 499 8. Play Filedb 2,250 113 40 10,000 213 9. Plazas a Parks 1,200 60 30 4.019 86 10. Environenetal Ssnitation 1,234 62 60 4,226 90 11. Conservation & LandacspLag 1.000 50 so - - 12. Slte. & Services 2.500 126 100 9,600 240 13. Emerge ncy Clinlc dl 4,240 213 10 934 20 d/ 14. Day Care Center 2.000 101 10 50.000 320 15. Rotel Training School 3.200 161 90 35,180 748 16. Wbolesale MArket 2,000 t01 25 20,860 130 17. Slaugtber Hou a 1.800 90 15 12.520 156 18. Urban Renovation 1.736 87 30 35.000 260 19. Boat Dock & Ramp 1.782 90 10 20,000 100 20. Ce ntry Renovation - - 80 8.000 106 21. SociallTowrism Hotel d - - 100 110.960 2.214 dJ (Sub-Total) (121,052) (6,083) (623,794 (11,199) Activitie 1. Commonity Development 4,199 211 4.500 96 2. Promotion - - 11.529 245 3. Pro-opening 4,199 211 8.200 174 4. Project Administration 14,587 733 65,760 1,399 5. Consulting Services (9,691) (487) (1) Final Design 6,050 304 21.500 457 (11) Supervision 3.642 183 29.947 637 (iii) Special Studies - _ 17,695 376 (Sub-Total) (32,676) (1,642) (159,131) (3,384) Baseline Cose 153.728 7,725 Contlgen=lem (68.635) (3,449) Physical Increase 17,054 857 Price Increase 51,581 2,592 (Sub-Total) (782,925) (14,583) Land Acquisition 16,995 854 21.832 465 TOTAL COST 239,358 12.028 804.757 15,048 TOTAL COST EXCLUD0C ADDITIONAL COMPONENTS 692.863 12,814 6.5: cost overrun - Estimated cost lucrease over Appraisa1 Esc1mate - USS30.428.000 (2532) - Project Completion: June 30. 1982 a/ Not flnanced by Loan. b/ Rate of exchange USS1.00 - MexS59.9. cR Rate of exchange USSl.00 - MexS54.07 average. t/ Addltional cosponents not part of the Bank Project. April 1984  -18- ANN I MEXICO: WA CALIJODA TOURM PXOJ1CZ LOMN 1420-ME San Jose del Cabo Coat of Infraatruecture A Tourism PaclLtiet Appraiml Estimate Z Completion Final Intimte December - 1976 an of JuD 30. 1982 Facilities (N xS'000) CUSS' aO) c/ JUDe 30. 1982 (aN S'000) (USS'000) di 1. FONAUI's AdaMn. Bldg. & Hag. 5.274 265 100 26,256 559 2. Eartheorks 6 Store Drainage 12,238 615 100 114,422 2.435 3. Water Supply Sytem 16.099 809 100 107,039 2,277 4. Sanitary Sewvrage Syates 23.382 1,174 100 81,202 1,728 5. Street Paing 22,093 1.110 100 66,438 1,414 6. Electricity & Stret Lighting 24.716 1.242 100 81,926 1,743 7. Telecommnicatiosa &1 22,925 1.152 100 52,180 1.464 8. Golf Course a Club House bi - - 50 132,202 2,813 b/ 9. Comrcial t Cultural Center 6,500 327 95 44,630 950 10. Beach Recreation FacliUties 4,140 208 100 21,990 432 11. Boat Dock & Ramp 3,000 151 15 12,100 257 12. Fire 6 Polce Stations 3,000 151 100 7,990 250 13. Emergency CiLttc 1,000 50 100 1,480 46 14. ConaervatIon 4 Landacaping 4,500 226 85 10.000 213 15. Plaza & Parka bi - - 90 10,888 232 b/ 16. Environmental Sanitation 3.200 160 90 - - 17. Sites a Services 2.500 126 90 20,539 437 18. Wholesale Markets 2,000 101 100 7,910 195 19. Day Care Center 2,000 101 60 50.940 316 20. Rotel Training School 3,200 161 98 38,120 811 21. Urban Renovation 9,706 486 100 1,947 41 22. Cemetery 1,000 50 100 38,876 627 23. Socitl/Tourlsa Hotel b/ - - 100 45.550 969 bi (Sub-Total) (172,473) (8,667) (974,625) (20,411) Activities 1. Comme ity Development 4,199 211 10,942 233 2. Proaotlon 9,950 500 22,262 474 3. Pre-openng 6.288 316 11.040 235 4. Project Administration 25,373 1.275 99,926 2.126 5. Consulting Services (15,582) (783) C1) Final Design 8,617 433 37,553 799 (*I) Supervision 5.174 260 95,952 2,042 (S) Speclal Studies 1.791 90 9.434 201 (Sub-Total) (61,392) (3,085) (287,109) (6,110) Baselune Cost 233,865 11.752 Contingencies (101.251) (5,088) Pbysical Increase 24,039 1.208 Price Increase 77.2i2 3.880 (Sub-Total) (1.261,734) (26,521) Land Acquisition 39,999 2,010 72,904 1.551 TOTAL CDST 375,115 18,850 1,334,638 28,072 TOTAL COST EXCLUDING ADDITIONAL OYPONENTS 948.067 24,058 27.6Z cost overrun - Estimated cost increase over Appraisal Estimste - US$68,764 (365:) - Project Completion: June 30, 1982 a/ Not financed by Loan. _J Additional components cot part of Bank project. c/ Rate of exchange USSL.00 - M xSl9.9. dJ Rate of exchange USS100 - MacS47.75 average. Aprla 1984  HEXICO: BAJA CALIFORNLA TOURISH PROJECT LOAN 1420-HE Details of Inveutmnt Costs in Loreto (In miLlions of 9 Hex) LAND COST INFRAES COST PILOT HOTEL SOLF COURSE RECREA AREA CUtl I CDRERCIAL TELECOUICION ELECTRIC SUISIA TAAILER PARK FIAEF16HIIM S1A POTICE STAT. .................. .... ...... ...... . .............. ............ ... -------- . .............. ............. .. . . .......... .... ......... ........ .... ... ..... . ..... CURRENI 1993 CURRENI 1993 CURRENT 1993 CURRENI 1913 CURRENT 1993 CURREINT 1993 CURRENT 1983 CURRENI 1983 CRENT 1993 CURREN I1 CURN tUREN 1913 1971 25.04 213.92 4.03 41.26 71.79 664.51 7.25 61.94 0 0.00 0 0.00 0.00 0.00 0 0.00 0 0.00 0 0.00 0 0.00 1979 1.19 9.09 14.34 97.66 7.57 51.48 6.41 43.59 0 0.00 0 0.00 12.26 33.39 0 0.00 0 0.00 0 0.00 0 0.00 1979 2.63 14.90 53.34 302.13 70.44 399.99 17.41 ".61 0 0.00 0 0.00 19.5 110.90 1.11 10.25 0 0.00 0.2 1.13 0.27 1.53 1910 3.22 14.91 69.14 414.46 263.7 1226.09 5.17 24.04 0 0.00 0 0.00 0. 3.07 2.91 13.53 0 0.00 0 0.00 0 0.00 1911 5.15 11.15 127.51 466.17 30.93 296.26 23.34 15.44 0.05 0.19 12.29 44.19 0.06 0.29 7.44 27.24 0.51 2.12 4.47 15.36 3.12 15.1 1962 1.13 4.78 04.05 219.75 46.07 120.45 6.78 17.73 0.38 0.19 21.14 73.57 0.34 0.59 O..6 1.73 0.00 6.09 15.92 0.12 0.31 1933 0.00 49.97 15.33 0.00 0 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0 0.00 0 0.00 1914 0.00 66.50 66.50 0.00 31.25 31.25 0 0.00 57.5 37.50 0.00 0.00 0.00 0 0.00 0 0.00 1IS5 0.00 76.35 76.35 0.00 50 50.00 10 10.00 0.00 0.00 0.00 0.00 11.15 11.75 6.25 6.25 1916 0.00 156.00 156.00 0.00 0 0.00 0 0.00 0.00 0.00 0.0 0.00 0.00 0.00 *19" 0.00 61.10 61.90 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 0.0 1919 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 "79 0.00 0.00 0.00 0.00 0 0.00 0 0.00 0.00 0.00 0.00 0.0e 0.00 0.00 1990 0.00 152.77 152.71 0.00 250 250.00 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 191 0.00 115.27 115.21 0.00 0.00 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1192 0.00 115.21 115.27 0.00 0.00 250 250.00 0.00 0.00 0.00 0.00 0.00 0.00 1193 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 0.00 37.50 37.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1195 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2996 0.00 37.50 37.50 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.0e 199 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1991 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1919 0.00 37.50 37.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 2000 0.00 0.00 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0.00 0.00 2002 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2003 II gv  HEXICO, BAJA CALIFORNIA TOURISM PROJECT LOAN 1420-HE Detailm of Investment Co.ts La Loreto (In millions of H Mex) * 111\TImlS1 II E1ERN CLINIC FAIWUR COIIEI MRINA OASIS kW MHINI VILLE SlINS RE0RSIAIION NOPOLD KCR ks. 110.& AMIN CS1 101 1W. CST. IN LU. L .............................. ........ ............ ------------.. . ..... .............. .............. .............. .................. .......................... ................ -----------....... ................ .......... CIMIINI 1163 t