Somalia - Port Modernization Project

The World Bank FOR OFFICIAL USE ONLY CPS. "/~ ) SwW Report No. 6097-SO STAFF APPRAISAL REPORT SOMALI DEMOCRATIC REPUBLIC PORT MODERNIZATION PROJECT April 30, 1986 Eastern and Southern Africa Region Transportation tDivision This documen: 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 Rank authorizatin.  CURRENCY AND EQUIVALENTS Currency Unit Somali Shilling (So.Sh1) US$ 1.00 So.Sh. 62.50 (Official rate April 1, 1986) US$ 1.00 So.Sh. 83.60 (Market rate September 1985, used for appraisal) NOTE: There are also two other recognised rate. A rate which is used for levying import duties, for tourists and other smaller transactions. The other is the free market rate determined by the average of foreign exchange transactions between external account holders in the CSBS. On April 1, 1986, these rates were So. Sh 85 and 140 respectively. WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) I kilometer (km) 5 0.62 mile (mi) 1 sq. kilometer (km2) 0.386 square miles (sq mi) I hectare (ha) 2.47 acres (ac) I metric ton (m ton) = 2,204 pounds (lbs) ABBREVIATIONS CSBS Commercial and Savings Bank of Somalia DANIDA 3 Danish Internationel Development Agency EDF European Development Fund GRT Gross Registered Tonnage GTZ = Duetsche Gesellschaft fur Technische Zusammenarbeit IDA = International Development Association KfW Kreditanstalt fur Wied.aufbau MPW = Ministry of Public Works MPMT - Ministry of Ports and Marine Transport MLAT Ministry of Land and Air Transport NTA National Transport Agency MOA Magistrate of Accounts PIP Public Investment Program Ro-Ro Roll on, Roll off SIDA = Swedish International De elopment Agency SIDAM = Somali Institute of Development Administration and Management SPA * Somali Ports Authority SSAL = Somali Shipping Agency and Line TEU 5 Twenty feet equivalent unit (of container) UAS Uniform Accounting System UNDP United Nations Development Program UNCTAD United Nations Conference on Trade and Development USAID United States Agency for International Development FISCAL YEAR January 1 - December 31  FORt OFFICIAL USE ONLY STAFF APPRISAXL REPORT SOKAL.IA DEMOCRATIC REPUBLIC PORT N ODERNIZTION PROJTCT TABLE 0 COWTEmT CuAmIS PAGR I. "a TRANSPORT SCTOR A. Economic Background ....................... 1 B. The Transport Sy stem 4 C. Transport Policy, Planning and Coordination.......6........6 D. Past Bank Group Involvement in Sector.8 B. Rationale for Bank Group Involvement**.e*****...**....e......10 II. TEW SOKALI PORTS AUV ORITY B. Organization, Management and Staff ...........................12 C riig ...* 13 D. Operations ......d.... . 15 E. Maintenance ..... F. Past and Present Tafc1 G. Port Planning and Development Strategy..e.o........e.........17 H, Budgets, Accounts, Audit and Insurance.1g tII. TOR PROJECT A., Objectives .......21 B. Project ...................... , .. 21 C* Cost Estimates 25 E. Implementation and Procurement ................................28 F. Disburaements ...... Go Project Monitoring and Reporting Requirements.............. . 29 He EnvironAental Impact.... 30 IV. ECOMII IC EVALUATION A. Future Traffic ......................... . , -.' B. Project Beneft.s .33 C. Sensitivity Analysis .35 D . Project Risks tOt ThW dbsumnt ha a stikud disttibution and mxybe usedby "sipients only in the perfomauS of tftir ocial duties. Its contents maY not otherwisebe dickFd without Woddl Bank authodeufbn.  -ii-. T. FlnANCIAL EVALUATION A. Historic Financial Performance ..... .................. 37 B. Financial Objectives..........................38 C. Projections of Financial Performance.....................39 VI. AGRrBfIIITS BRACUED AND .BC...A. D.TIONS S5 AUMS 1. Past Bank Group Financed Transport Projects 2.1 Port Facilities 2.2 Staffing Establishment, 1985 2.3 Training of SPA Personnel 1980-84 2.4 Gang Composition (Conventional Cargo Handling) 3.1 Composition of Operational Experts 3.2 Operational Experts - Terms of Reference 3.3 Training Requirements 3.4 Basic Training Curriculum for SPA Staff 3.5 Project Cost Tables 3.6 Estimated Schedule of Disbursements 3.7 Progress Reporting System 3.8 Transport Study - Terms of Reference 4.1 Individual Traffic Forecast 4.2 Investment Cost 4.3 Current Productivity and Future Productivity 4.4 Berth Utilization and Ship Waiting Time 4.5 Representative Ship Cost Per Day 5.1 Historic Operating Statement 5.2 Historic Cash Flow 5.3 Projected Income Statement 5.4 Projected Balance Sheets 5.5 Projected Cash Flow 5.6 Comparative Ship Charges 5.7 Projected Foreign Currency Revenue and Expenditure 6.0 Selected Documents and Data Available in the Project File Chart I Organisation Chart Chart II - Implementation Schedule MAPS Map 1 - Somalia Map 2 - Port of Mogadishu Map 3 - Port of Berbera. Map 4 - Port of Kismayo -This report is based on the findings of a Bank mission which visited Somalia in September 1985, comprising Messrs. K.C. Chung, (Port Operations Specialist, Mission Leader), M. Konishi (Economist) and Y. Crookes (Financial Analyst). Mrs. Hulda Hunter assisted in processing the report.  -Iiii- SOMLIA PORT t(ODERNIZATION PROJECT CREDIT AND PROJECT SUUARY Borrower: Somali Democratic Republic Anount: SDR 19.9 million (US$22.6 million equivalent) Term: Standard IDA terms Re-jeading Term: The credit will be on-lent to the Somali Ports Authority (SPA) for a period of 15 years including five years grace, at an interest rate of 12%. SPA will bear the foreign exchange risk. Project Description: The Project's main objective is to assist SPA to meet the changes in cargo handling brought about by new shipping technology and to maximize the utilization of existing facilities. To this end the Project would (i) upgrade existing facilities to handle containers and ro-ro traffic; (ii) rectify the subsidence of the breakwater in Mogadishu; (iii) construct container freight stations; (iv) procure cargo handling, pallets and other equipment; (v) construct and equip workshops for the proper maintenance of equipment; (vi) construct a Port Training School; and (vii) provide technical assistance and training. roect Benefits and Risks: The main benefits would be a reduction in ship waiting time and improved port performance. The improvement in productivity will allow SPA to defer heavy investments in additional berths until the year 2010. The main risks are that the modest growth in traffic as forecast or the increase in productivity targetted for the Project will not materialize. These risks have been taken into account in the sensitivity analysis.  1stluated o.-t* Wcal Foeti Total Foregla US* illioo-ns 1. Rquipment 0.01 5.54 5.55 24.5 2. Civil Works 0.91 4.07 4.98 18.1 3. Rectification of Breakwater 0.27 2.67 2.94 11.8 4. Training and Technical Assistance 0.02 1.55 1.57 6.9 5. Consulting Services 1.44 1.44 6.4 Total Base Cost 1.21 15.27 16.48 67.7 6. Contingencies (a) Physical 0.14 1.80 1.94 8.0 (b) Price 0.50 5.48 5.98 24.3 Total Cost 1.85 22.55 24.40 100.0 Financing Plan: Local Foreign Total --U Sd1lions- Proposed IDA Credit - 22.6 22.6 Somalia Ports Aut.