Benin - Cotonou Port Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6139 PROJECT PERFORMANCE AUDIT REPORT BENIN COTONOU PORT PR(OTECT (CREDIT 826-BEN) April 8, 1986 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. CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.0 = OFAF 245 (average) CFAF 1 million = US$4,081.63 FISCAL YEAR July 1st - June 30th ABBREVIATIONS AND ACRONYMS PAC - Port Autonome de Cotonou OBEMAP - Office B'ninois de Manutention Portuaire OCBN - Organisation Commune B'nin-Niger FAC - Fonds d'Aide et de Cooperation MTT - Ministry of Transport and Telecommunications BADEA - Banque Arabe pour le D6veloppement Economique en Afrique CIDA - Canadian International Development Agency OCCE - Caisse Centrale de Cooperation Economique AfDB - African Development Bank THE WORtLD SANK FOR OFFICIAL USE ONLY Washington. DC 20433 US A. Cfe a DuectW-Cegwral April 8, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report on Benin Cotonou Port Project (Credit 826-BEN) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Benin Cotonou Port Project (Credit 826-BEN)" prepared by the Operations Evaluation Department. Attachment This document has a testricted distribution and may be used by recipients only in the performance of their of1cial duties, Its contents May not otherwise be disclosed without World Bank authoriation. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT BENIN COTONOU PORT PROJECT (CREDIT 825-BEN) TABLE OF CONTENTS Page No. Basic Data Sheet................................................... iii Evaluation Summary........................... v PROJECT PERFORMANCE AUDIT MEMORANDUM Is BACKGROUND ................................................ 1 A. Benin as a Transit Corridor............................ 1 B. Lessons from Experience................................ 2 C. Transit Corridor Projects.............................. 3 II. THE COTONOU PROJECT....... ................................ 4 A. Objectives... ............*.............................. 4 B. Project Components and Implementation.................. 6 C. Project Cost, Financing and Disbursements.............. 7 D. Economic and Financial Reevaluation.................... 7 E. Sustainability of Project Benefits..................... 9 III. CONCLUSIONS................................. 10 ANNEX I - THE PROJECT: FROM INCEPTION TO BOARD PRESENTATION A. Cotonou Port in the Early 1970s........................ 12 B. Project Identification ................................ 14 C. Project Brief: Successive Versions.................... 15 D. Preappraisal...... o....................... .... . ... 19 E. Project Preparation and Cofinancing.................... 20 F. Appraisal.......... ............ .... ............ 23 G. Issues Paper........................................... 23 H. Decision Memorandum.................................... 25 I. Board Approval.............. . ................. 26 ANNEX 2 - THE PROJECT: PLANNED AND ACTUAL RESULTS A. The Transit Function. . .... ......... 27 B. The Port of Cotonou.................................... 27 C. Project Objectives and Project Components.............. 28 D. Cost Estimates and Project Financing. o............... 32 E. Project Implementation and Procurement................. 34 F. Economic Evaluation.................................... 36 G. Financial Evaluation................................... 39 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. -2- PROJECT COMPLETION REPOR' I. Introduction ..................................... 43 II. Project Preparation and Appraisal.......................... 44 III. Project Description, Implementation and Cost............. 45 A. Project Description.................................... 45 B. Project Implementation................................. 46 C. Project Costs, Financing and Disbursement.............. 52 IV. Institutional Performance and Development.................. 56 A. Creating an Interministerial Committee for Transit Traffic........... .......................... 56 B. Modernizing PAC and OBEMAP Organization and Management Systems....................... 0.0............. 57 V. Traffic and Operations..................................... 58 A. Past Traffic and Productivitv........................ 58 B. Future Traffic and Port Activity....................... 62 VI. Economic Revaluation ........................ ............. 65 A. Berth Extension........................................ 65 B. Construction of Breakwater Spur........................ 67 C. Global Rate of Return.................................. 67 VII. Financial Analysis ........................................ 68 A. General................................................ 68 B. Financial Performance, FY1977-1982..................... 68 C. PAC's performance as Compared to the SAR............... 71 D. Financial Projections.................................. 72 E. Financial Situation of the Transport Chain............. 73 VIII. The Role of the Association............................... 74 !X. Conclusions...... ........ ............................... 76 Annexes 1-1, 3-1 to 3-5, 4-1 to 4-2, 5-1 to 5-8, 6-1 to 6-7, 7-1 to 7-5 and 9-1 to 9-4 ................. 79 Appendices 1. Letter from the Commission of the European Communities .... 123 2. Comments from the Ministry of Development Cooperation, Multilateral Department, Norway ........................... 124 3. Comments from the Borrower ................................ 129 Documents Available in the Project File - i - PROJECT PERFORMANCE AUDIT REPORT BENIN ITONOU PORT PROJECT 'REDIT 826-BEN) PREFACE This is the performance audit report on the Cotonou Port Project for which Credit 826-BEN in the amount of US911.0 million equivalent was approved on June 8, 1978 and was increased to US$19.3 million equivalent on July 10, 1979. An EC Special Action Credit (36-BEN) was approved on November 16, 1979 to compensate for the withdrawal of one of the co-donors. The original closing date (March 31, 1982) was extended to December 31, 1983. The credit has been fully disbursed.1/ Total project costs amounted to US$50.4 million equivalent, as against USS46.09 million equivalent estimated at appraisal. In addition to the Government and to IDA, the following agencies provided financing: the Government of Norway, the EEC Special Action Fund, the Banque Arabe pour le DIveloppement Economique en Afrique (BADEA), the Canad!an International Development Agency (CIDA), the Caisse Centrale de Cooperation Economique (CCCE), the Ponds d'Aide et de Cooperation (FAC), the African Development Bank (AfDB), and the Organization of Petroleum Exporting Countries (OPEC). This document consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED), and of a Project Completion Report (PCR) prepared by the Western Africa Regional Office. OED studied the documentation preserved in the Records Center and reviewed the project against the Staff Appraisal Report (SAR) and the President's Report (PR), as well as against the legal documents and the transcripts of the Executive Directors' meetings which considered the proj- ect. (In addition to serving domestic needs (56% of traffic]), the port of Cotonou is a component of the transit facilities provided by Benin to neigh- boring countries and, as such, a central element of the Benin transport infrastructure. OED has studied this project in the light of general P ono- mic conditions in Benin (with particular attention to the findings of the Benin Country Economic Memorandum of March 1984) and in the light of other IDA-assisted projects, such as Credit 215-DA of 1970 (Highway Maintenance and Engineering Project), Credit 415-DA of 1973 (Second Highway Project), and Credit 746-BEN of 1977 (Third Highway Project). 1/ The Borrower notes that the sum of US$74.322 was cancelled (Appendix 3, para. 1.2). - il - The Iotonou Port Project has therefore been studied on two levels: as a free-standing project and as an element contributing to the efficiency of the country's principal transport corridor. Discussions on project formu- lation, implementation and follow up were held with Bank staff, consultants, and officials of cofinancing agencies. An OED mission visited Benin in March 1985 to secure Government views on the project and the assistance and hospi- tality extended to the mission is gratefully acknowledged. Drafts of this report were sent to the Government and to co-financing agencies for their comments. Replies are shown in Appendices 1-3. The PCR provides an adecuate summary of project execution. The PPAM is focussed on the background against which the project was formulated, and on broader lessons which may be drawn from the results. PROJECT PERFORMANCE AUDIT REPORT BENIN: COTONOU PORT PROJECt (CR 826-BEN) BASIC DATA SHEET Key Project Data Original Item Plan Actual Total Project Cast (US$ million) 46.9 50.4/a Cost Overrun (2) - 9.3 Credit Amount (US$ million) 11.00 19.3/b Disbursed 11.00 19.23 Cancelled - 0.07 Repaid (US$ million) ) - 8.30 Outstanding (US$ million) ) as of 06/30/85 11.00 10.931 Date Physical Components Completed 3/81 08/81 Proportion Actually Completed by Above Date (%) 90 100 Proportion of Time Overrun - 20 Econom.ic Rate of Return (%) 25 25/d Cumulative Estimated and Actual Disbursements (US$ million) FY78 FY79 FY80 FY81 FY82 FY83 FY84 (i) Estimated 0.50 1.64 8.86 10.68 11.00 11.00 11.00 (ii) Actual 0.51 0.51 4.63 8.95 10.35 10.70 10.93 % of (ii) to (i) 100 31 52 84 94 97 97 Other Project Data Original Item Plan Actual First Mention in Files 07/11/72 Government's Applicatinn 01/23/73 01/23/73 Negotiations FY76 05/01/78 Board Approval (initial credit) FY76 06/08/78 Board Approval for including Norwegian participation 07/10/78 Credit Agreement (initial) FY76 10/96/78 Norwegian Aid Participation Agreement 10/06/78 Effectiveness 04/06/79 10/19/79 Board Approval of EEC Special Action Credit 11/10/79 Special Action Credit Agreement 11/16/79 Effectiveness Special Action Credit 07/31/83 Closing Date 03/31/82 12/31/83 Borrower Government of Benin Executing Agency Cotonou Port of Authority Fiscal Year of Borrower 01/01 to 12/31 Follow-on Project Benin: Transport Infrastructure Rehabilitation and Maintenance Project /a Including US$1.13 million equivalent for the construction of a roll-on/ roll-off platform and US$0.4 for Project Coordinator which was not included in the appraisal cost estimate. /b Credit amount increased on July 10, 1979 by USS8.3. /c Amount disbursed was also repaid through the grant arrangement. - iv - MISSION DATA Month/ No. of No. of Date of Item Year Weeks Persons Man-Weeks Report Identification 03/75 2 3 6 04/75 Preappraisal/a 10/75 1 3 3 02/76 09/76 1 1 1 11/76 11/76 1 1 1 12/76 02/77 1 1 1 04/77 Appraisal 10/77 3 3 9 05/78 Total 9 21 Supervision 1 07/78 1 1 1 08/78 Supervision 2 02/79 1.5 1 1.5 03/79 Supervision 3 07/79 1 3 3 09/79 Supervision 4 03/80 3 2 6 04/80 Supervision 5 11/80 1 2 2 12/80 Supervision 6 02/81 1 2 2 03/81 Supervision 7 07/81 1 2 2 07/81 Supervision 8 12/81 1 1 1 01/82 Completion 07/82 1 2 2 05/84 Total 10.5 20.5 Country Exchange Rate Year Exchange Rate 1978 US$1 - CFAF 225.64 1979 US$1 = CFAF 213.38 1980 US$1 = CFAF 247.83 1981 US$1 = CFAF 274.46 1982 US$1 - CFAF 328.51 1983 US$1 = CFAF 355.89 /a Several complementary missions took place between preappraisal and appraisal. May 1984 - v - PROJECT PERFORMANCE AUDIT REPORT BENIN COTONOU PORT PROJECT (CREV 6 826-BEN) EVALUATION SUMMARY This was the first Bank Group-assisted operation in the port sector in Benin. Its obectives (PPAM, para. 10) were (1) to increase port capacity for break-bulk and general cargo destined for Benin, Niger and Nigeria; (it) to increase port and railway productivity; and (iii) to encourage tariff rationalization so as to strengthen the role of Benin as a transit corridor for Niger. Project components encompassed expansion of capital assets (PPAM, para. 15; PCR, paras. 3.01-3.05) and measures to improve management, opera- tions and training for the port, for cargo handling and for the railroad (PPAM, para. 17; PCR, para. 3.01). Implementation experience shows mixed results. Port assets have been expanded and port productivity has increased sharply (PPAM, para. 20; PCR, para. 5.11). However, actual port traffic in 1982 was about 35% below appraisal estimates (PPAM, para. 11). Port and railway tariffs were ratio- nalized and an important first step was taken to improve the other elements of the Benin transit chain. However, more should have been done to improve the land transport elements (PPAM, paras. 12 and 17; PCR, para. 7.24). Project costs increased from the appraisal estimate of US$46.09 million to US$50.4 million equivalent partly because of additional works and partly because of delays in project completion (PCR, paras. 3.15 and 3.17). The 9.3% cost overrun was financed by two of the nine cofinancing agencies. Project execution was complicated by the division of works into six lots to accommodate the separate procurement and disbursement requirements of the co- financiers (PCR, para. 3.07). Government procedures were cumbersome and disbursements were always late because of delays in the submission of claims (PCR, para. 3.21). According to the PCR, economic reevaluation shows satisfactory results: the overall rate of return for the project is shown to be the same as at appraisal (25%) but is predicated upon debatable assumptions regarding the growth of future traffic (PPAM, paras. 19-21; PCR, paras. 6.01-6.12). The audit has not done any 6lternative calculations because these too would have to be based on eoually debatable traffic forecasts. Finanacial results are not satisfactory: the actual 1982 rate of return on net revalued assets was 2.4%, as against the appraisal forecast of 8%. Given the limited pros- pects for significant traffic increases, it is doubtful whether the higher rate can be achieved in the foreseeable future (PCR, para. 7.13). With respect to the port's internal operations, sustainability of project benefits seems to be assured (PPAM, para. 23). The audit found that - vi - managerial and operational improvements sponsored under the project resulted in considerable productivity increases, largely because of the attention paid to the development of human resources. Today, the port of Cotonou is better staffed and better run than it was ten years ago (PPAM, para. 24). This is an important contribut!on of the project. Review of the project's history (PPAM, Annexes I and 2) led the audit to consider in some detail the following broader topics: (a) The port of Cotonou as one of the elements of the %ransit corridor- for Niger traffic; i.e., as one of the elements of the "Benin Route" (PPAM, paras. 2-4); and (b) The need to improve the "Benin Route" as a whole (PPAM, para. 14). The record shows that while recognizing the need for institutional and operational improvements, the Association gave too much emphasis to ex- pansion of physical infrastructure (PPAM, Annex 1, Paras. A.15-A.17, A.27- A.29 and A.33-A.34). The record reveals that considerable differences of views existed regarding future traffic development both between Government and IDA, and within IDA itself, particularly regarding the prospects of Nigerian transic traffic, which was excluded in a sensitivity analysis con- tained in the Staff Appraisal Report. The audit believes that more conserva- tive traffic forecasts should have been used (PPAM, Annex 1, paras. A.16, A.28 and A.29). The record further reveals that IDA was aware that port improvements ought to have been accompanied by parallel improvements in cargo handli g and organization of land transport. IDA staff repeatedly stressed that tne transport corridor through Benin to Niger deserved to be improved as a whole but attempts to address this issue in the project were too timorous (PPAM, Annex 1, paras. A.14, A.25, A.32 and A.36). Three additional points revealed by the record must be noted: (a) Although its income statement for PY84 is balanced, the port's financial performance was below expectations. This is largely due to traffic lower than expected and to the increase of receivables from 10 months of revenue in FY77 to 13 months of revenue in FY82, although they were expected to have virtually disappeared by that time (PCR, para. 7.10). Most of the receivables are from Government and parastatals, which are in a difficult cash situation (PPAM, para. 22; PPAM, Annex 2, para. A.62). Thus, the port's pre- carious financial situation cannot be easily corrected since the main debtor is the Government itself. A Ministerial Commission has been appointed in 1984 to settle the issue of reciprocal debts in the public sector. (b) The object of the project components which comprised the cut-off breakwater and the sand trap was to delay dredging of the channel for at least 20 years" (SAR, para. 4.27). PPAM, Annex 1, paras. A.5, A.7, and A.15). - vii - Rowever, the period of delay before dredging of the channel became necessary proved to be shorter than calculated at appraisal and dredging would be financed under the Transport Infrastructure Rehabilitation and Maintenance Project (Final Project Brief dated April 19, 1985, para. 39). This underscores the need for environ- mental impact investigations, prior to engineering design, of a geographical scope wider than has heretofore been the practice. The audit notes that the Bank financed t 1984 economic/environmen- tal study, in preparation of the Benin Transport Infrastructure Rehabilitation Project. (c) In terms of design complexity, number of components, variety of co-financiers, and number of consultants and contractors, the proj- ect was an intricate undertaking. The appointment of a Project Coordinator with the right technical qualifications, and with a congenial personality, contributed much to the satisfactory comple- tion of works. - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM BENIN COTONOU PORT PROJECT (CREDIT 826-REN) I. BACKGROUND A. Benin as a Transit Corridor 1. In 1975 Benin had a per capita GNP of about US$130. The rural sec- tor, which supported more than two-thirds of the population, had a per capita GDP of US$70 (PR, para. 3). Most of the agricultural output consisted of subsistence root crops. Small ouantities of palm oil, cotton and groundnuts were the only exports. There was little industry and only a few mineral deposits (limestone and phosphate). Its long, narrow shape, and its flat and rolling terrain make Benin a natural transport corridor for landlocked Niger in the north and for western Nigeria in the east. In the 1970s, as well as today, transport and trade were, after agriculture, the most important sec- tors. 2. At present, Beninese domestic traffic accounts for about 56% of the port traffic. The remaining 44% is transit traffic mainly to Niger, through the "Benin Route". "Benin Route" is the name of the corridor used for Niger traffic. It consists of the port of Cotonou, of 440 km of railroad between Cotonou and Parakou, and of 320 km of two-lane paved road from Parakou to Malanville, on the Niger border. Niger is a country much larger than Benin (1.3 million km2 as against 112,600 km2), with a larger population (5.3 million as against 3.3 million in 1977), and with uranium deposits. In the early 1970s, nuclear plants were expected to dominate electric power genera- tion and this would provoke a strong market for uranium. Mining activities in Niger expanded and required substantial imports of machinery and sup- plies. The Niger population required food and consumption goods. All imports came by sea and it was to Benin's interest to have an efficient port operation in Cotonou, an efficient land transport system to move the goods between Cotonou and Niamey, the capital of Niger. If the "Benin Route" did not provide a satisfactory service for Niger, a number of alternative corri- dors, including the "Togo Route", which starts in Lom? and also ends in Niamey, would offer competition. 3. In the middle 1970s, and in addition to Niger, Nigeria generated considerable business for the port of Cotonou. The oil boom led to an enor- mous demand for imports, the Nigerian ports were congested, and ships were diverted to Cotonou, Goods were unloaded there and dispatched to Nigeria by truck. Nobody knew how long congestion in the Nigerian ports would last but Benin could build up a reputation for good transit service. Even after the ports of Nigeria had been expanded, Cotonou could still preserve some of the Nigerian business on the strength of quality of service and competitive rates. - 2 - 4. In 1977 general cargo traffic in the port of Cotonou was about 560,000 tons for Niger and Nigeria and about 225,000 tons for Benin itself (SAR, para. 4.14). Servicing of a growing transit traffic could play an important role in the resource-poor Beninese economy. However, port effi- ciency and productivity had to be improved. This was the guiding thought behind the Cotonou Port Project and it gave rise to two questions. First, were the existing facilities sufficient to handle the foreseen traffic growth? Second, was there scope for improving the efficiency of port operations? The answer to the first question was that an expansion of capi- tal facilities by one or two berths was justifiable. The answer to the second was more emphatic: major productivity gains would be forthcoming from organizational improvements and intermodal coordination. Unfortunately, during subsequent stages of project preparation, expansion of physical faci- lities was overemphasized although the second point was not lost sight of. 5. IDA's first involvement with the Benin transport sector dates back to 1969 when the Association acted as executing agency for a UNDP-financed Land Transport Survey which recommended strengthening of road maintenance, rehabilitation of several road sections, and the closure of two uneconomic rail spurs. Between 1970 and 1977, three credits totalling US$29.8 million were made available to Benin for development of the road sector.1/ At the same time, the Bank Group was assisting transport projects in other West African countries and OED has issued a number of audit reports discussing attempts to improve transport coordination both at the national and at the regional levels. As shown in the following paragraphs, taken from related PPARs prepared since the appraisal of the Cotonou Port Project, the most im- portant factors for the success of the transit function of the project were transport coordination, tariff setting, maintenance of existing facilities, and staff development. B. Lessors from Experience 6. In parallel with the Cotonou Port Project, several other projects in the transport sector addressed the issues of transport coordination and alternative transit routes in the West Africa region and were met with limited success. Among these, the Cotonou Port Project ranks rather favor- ably. The PPAR for the Benin Highway Maintenance and Engineering Project (Credit 215-DA), (OED Report No. 1768 of October 25, 1977) discussed a proj- ect to improve a road network which had deteriorated because of insufficient maintenance. The project was completed with a seven month time overrun and with an actual cost 5% higher than estimated at appraisal. However, the estimated economic rate of return exceeded the appraisal estimate and showed that relatively small maintenance expenditures can lead to large vehicle 1/ The Highway Maintenance and Engineering Project (Credit 215-DA of September 1970), the Second Highway Project (Credit 415-DA of July 1973)- and the Feeder Roads Project (Credit 717-BEN of June 1977). In addi- tion, two agricultural projects have included construction and rehabili- tation of feeder roads: the Hinvi Agricultural Project (Credit 144-DA of March 1969) and the Zou-Borgou Cotton Project (Credit 307-DA of May 1972). - 3 - operating cost savings. On the other hand, despite significant strengthen- ing of the Department of Public Works, shortfalls occurred in training for road maintenance, in technical assistance for transport coordination, and in road maintenance operations after 1973. The audit found that these short- falls were due to staffing constraints, to shortages of local funds and to somewhat inadequate project preparation. 7. The PPAR for the Benin Second Highway Project (Credit 415-DA), (OED Report No. 3986 of June 30, 1982) discussed rehabilitation of a 318 km road section that is part of the "Benin Route". The project's institution-build- ing objective to strengthen road maintenance (continued from the Highway Maintenance and Engineering Project), was largely unfulfilled. Improvement of transport coordination was deferred, at Government request, to the subse- quent Third Highway Project. The audit noted that this postponement had detrimental effects for the project under review. The Government continued to give preferential treatment to the railway by keeping unpaved the last section of the "Benin Route" between Dassa and Parakou.2/ Rowever, a pro- posal had been made for the paving of the road segment and this, the audit noted, would have important repercussions. First, for the railway (which would lose freight and revenues); second, for the port of Cotonou (which would have to change its handling procedures). Third, for the port of Lome in Togo (which would compete with Benin for the Niger traffic). The audit emphasized that where new projects result in lower transport costs for land- locked countries, traffic diversions may occur rapidly. The audit concluded that the interrelation of road, port and rail projects would shortly demand IDA policy decisions on transport investments in Benin and Togo and that this added to the urgency for transport coordination. 8. The PPAR on the Togo Second Highway Project (Credit 450-TO), (OED Report No. 3987 of June 30, 1982) discussed a project to reduce vehicle operating costs through road reconstruction and maintenance. Some of the road works were along the corridor that carried traffic northward to the landlocked countries of Burkina and Niger. Project objectives regarding civil works were generally achieved but institution-building, transport plan- ning, transport coordination, and in-house training did not measure up to expectations. The audit discussed the alternative routes between the sea and landlocked countries in West Africa: (a) The Togo Route, (b) The Benin Route, (c) The Ivory Cost Route, (d) The Nigerian Route, (e) The Senegal Route, (f) The Ghana Route, (g) The Niger River Route, and (h) The Transsahara Route. Like the PPAR on the Benin Second Highway Project, this audit stressed that landlocked countries select routes not only on the basis of travel time and cost but also to diversify outlets. The relative effi- ciency of the road trucking industry, together with the levels of road and rail tariffs, would affect the volume of transit traffic. The absence of national transport planning and coordination was identified by the audit as a major cause for the failure to resolve these issues. 2/ The Borrower feels that this is not an accurate statement (Appendix 3, para. 1.12). -4. C. Transit Corridor Prolects 9. Planning of transit corridor projects must distinguish between two different issues. First, traffic forecasting: given the availability of alternative routes, what is a realistic volume of transit traffic that may be expected for a particular corridor. Second, operation of the transit corri- dor as a whGle: how can the different transport modes involved in handling transit traffic be upgraded in a balanced way so that improvements in one mode are not neutralized by bottlenecks in another. Littoral countries can- not assume that traffic transitting through their territories is a captive commodity. Landlocked countries, such as Niger, will always find alterna- tives if the service provided by one route is too slow, too costly or too unreliable. In addition, they may also prefer to divide the traffic among two or three routes for greater security. A country proposing to serve tran- sit traffic cannot disregard the quality and cost of the transport service it offers. Careful planning of operations and investments, and constant vigi- lance regarding costs and tariffs is necessary in all cases but becomes indispensable when transit traffic has to use two or more transport modes. The Cotonou port is only one of the elements of the "Benin Route". Measures to improve Port performance would have to be seen within the broader context of measures taken or planned for the improvement of the "Benin Route" as a whole. In the preparation of the Cotonou Port Project more attention should have been paid to the interplay among the maritime, transit and land trans- p!rt elements to improve the productivity and competitive position of the Benin Route (PPAM, Annexes 1 and 2, paras. A.25, A.40 and A.41). In this connection, the staff believes that the project has successfully improved the operations of the Benin transit chain, and was ouite innovative in this res- pect. II. The Cotonou Port Project3/ A. Objectives 10. (a) Increase (by means of infrastructural expansion) port capacity to handle break-bulk and general cargo destined for Benin, Niger and Nigeria. (b) Increase (by means of technical assistance) port and railway pro- ductivity. 3/ The PCR prepared by the Western Africa Regional Office is a comprehensive document. This section of the PPAM summarizes: (a) Points discussed in greater detail in the PCR; (b) findings of the March 1985 OED mission to Benin; and (c) historical material contained in the Project file. The two annexes of the PPAM (Annex 1: The Project -- From Inception to Board Approval, and Annex 2: The Project -- Planned Improvements and Actual Results) provide additional perspective with appropriate cross-references to the project file and the PCR. - 5 - (c) Encourage tariff rationalization to keep the "Benin Route" competi- tive with the "Togo Route" (SAR, para. 3.02; PPAM, Annex 2, para. A.44; PCR, para, 3.02). 11. The need for increased capacity by 610 m of berth was predicated upon the continued large-scale use of the port by Niger and Nigerian traf- fic. The demand expected by the SAR did not materialize because of slow eco- nomic development (Beninese traffic), depressed markets for Niger uranium products (Niger traffic), and severe contraction of the Nigerian economy (Nigerian traffic). As a result, actual port traffic in 1982 was about 30% below appraisal estimates (SAR, paras. 1.11-1.17; PPAM, Annex 2, para. 41; PCR, paras. 5.06-5.08). Under the uncertainties that plagued traffic fore- casting at the time of appraisal, a more limited capacity expansion should have been envisaged. It must be pointed out that overcapacity would have been more problematic had it not been for the fortuitous development regard- ing oil exploration. Starting in 1982, one berth has been assigned to supply boats and tugboats for servicing oil exploration. This has reduced the length of berths available for commercial traffic and generated significant revenues. 12. Thanks to the technical assistance provided under the project, port productivity increased satisfactorily: for general cargo it went from 3.5 to about 12 tons per ship-hour in FY80 and FY81 (PCR, para. 5.12). Over a four-year period, productivity gains were about 300% for general cargo, mixed vessels, and cereal carriers. Container handling did not improve quite as dramatically because reorganization of the handling system did not take place until 1982. Nevertheless, here too the results are encouraging (PCR, paras. 5,11-5.13). Port tariffs were rationalized (PCR, para. 7.06) and although not much immediate progress was made in rationalizing service and tariffs over the entire length of the "Benin Route", the project was instrumental in provoking a number of positive steps such as the study financed under the project and which led to ratification by Benin of the convention for International Road Transport (door-to-door service) in 1982. 13. Project justification in the SAR consisted of the contributions to be made by an improved port to the more efficient flow of transit traffic. Ex-post evaluation must therefore answer the following questions: (a) Was it reasonable to assume at the time of appraisal that transit traffic would continue to increase? (b) Was port capacity constrained primarily by infrastructural insuffi- ciencv and/or by operational shortcomings? (c) Were the port and the Parakou transshipment center the principal bottlenecks on the "Benin Route" or were there other points where action was just as urgently needed? 14. At the time of appraisal, the Association knew that transit traffic projections were uncertain (Preappraisal Mission Report of June 30, 1975, para. 2.4; Back-to-Office Report of November 1, 1976, para.2.2). The traffic forecasts shown in the SAR were the product of protracted discussions between - 6 - the Association and the Government, as well as within the Association itself (PPAM, Annex 2, para. A.60). As early as November 1975, it was known that port capacity was not only constrained by lack of berthing space but also by poor port productivity (PPAM, Annex 1, para. A.17). A July 1977 railway mission looked into the overall transport capacity of the Cotonou-Parakou- Niamey corridor and concluded that capacity constraints were due to poor port operations; to insufficient motive power and rolling stock capacity of the railway, (OCBN); and to inefficient cargo-handling b- the Government-owned forwarding company at the Parakou rail-to-road transshipment point (PPAM, Annex 1, para. A.25).4/ In sum, it was evident that the more efficient flow of transit traffic required an integrated package of improvements for the entire "Benin Route". Although the proiect did eventually contain some technical assistance for OCBN, and for the Office Beninois de Manutention Portuaire (OBEMAP), the government agency responsible for all cargo handling and stevedoring operations, its main preoc pation remained the expansion of physical facilities in the port and the operational improvement of the Port Autonome de Cotonou (PAC), the autonomous public enterprise which manages and operates the port. At the end of the project, there are still unresolved problems regarding the corridor as a whole (i.e., removal of road use restrictions between Dassa and Parakou; finalization of the freight forward- ing companies' restructuring; and removal of the Freight Bureau monopoly).5/ These issues are being addressed in IDA projects currently under preparation. (b) Project Components and Implementation Civil Engineering and Associated Works 15. These included construction of 610 m of deep-water berthing space; dredging of a new entrance channel and of a basin serving the new berthing space; land reclamation and land protection works; construction of a new breakwater; provision of support facilities (roads, fences, water supply, etc.); construction of two transit sheds; and additions to the port's elec- trical installations (PPAM, Annex 2, paras. A.45-A.55; PCR, paras. 3.01- 3.05). 16. Financing was provided by several agencies, each with its own pro- curement and disbursement procedures and this led to the grouping of the works into six contract lots. Coordination was difficult. An ad-hoc Commission was appointed by the Government to perform overview tasks; one of the contractors was designated "pilot" and was expected to provide basic scheduling for every other contractor; a firm of consulting engineers was retained to supervise the works; and a Project Coordinator was appointed to provide liaison among the donors, the Government, the contractors, and the supervising engineers. Bidding arrangements led to delays (PCR, para. 3.03) and works coordination and supervision were cumbersome (PPAM, Annex 2, para. 4/ The Borrower feels that OCBN has taken corrective action through its 1975-80 Five Year Program (Appendix 3, para. 1.13). 5/ The Borrower feels that the Freight Bureau is a recent experiment in- tended to develop "rail" and "road" transport (Appendix 3, para. 1.8). - 7 - A.58). The audit agrees with the PCR (para. 3.02) that a financing formula whereby different lots are financed by different agencies should not be re- commended except in cases of absolute necessity. Construction work encoun- tered certain difficulties (PCR, paras. 3.06-3.08) but this is normal for a project of this type and magnitude. The performance of consultants and con- tractors was mixed: the decision to employ a consultant for construction supervision different from the consultant responsible for project preparation was not felicitous, hand-over arrangements from one consultant to the other were inadequate, and there was a break of communications during the period before the signing of contracts (PCR, paras. 3.22-3.23). Except for dredging (PCR, para. 3.07), performance of contractors was adequate although communi- cation among them could have been better (PCR, para. 3.26). The Project Coordinator contributed significantly to the timely resolution of problems and to the overall satisfactory completion of the works. Technical Assistance 17. The primary objective of this component was to improve management, operations and training in PAC, in OBEMAP, and in 0CBN (PPAM, Annex 2, paras. A.52-A.55; PCR, para. 3.01). Despite some delays and administrative compli- cations (PCR, paras. 3.09 and 3.11), the component was successfully imple- mented. In the port sector, it helped create a body of competent managers and technicians; it established a permanent training program for workers; and it raised operational productivity (PCR, paras. 3.13 and 4.03-4.06). In OCBN, the consultant analysed operations; recommended improvements in rolling stock control; devised a cost accounting system; and recommended a new tariff system (PCR, para. 3.14). However, the problems faced by the railway con- tinue to be intractable (PCR, para. 7.24), and the technical assistance had but limited impact. C. Project Cost, Financing and Disbursements 18. Actual project cost was US$50.4 million equivalent as against the appraisal estimate of USS46.09 million (PCR, para. 3.15). The 9.3% cost overrun was due (a) to additional work /about US$2.4 million, including US$1.13 million for the construction of a roll-on/roll-off platform (PPAM, Annex 2, para. 53) which was not included in the original cost estimate/ and (b) to delays in project completion (about US$2 million), leading to in- creased costs for project supervision and coordination (PCR, paras. 3.15 and 3.17). The financing gap of US$4.31 million was covered by BADEA and the OPEC Fund (PCR, para. 3.20). Fluctuations in the value of the US dollar did not significantly affect the total project cost, Disbursements were always behind schedule because of delays in the submission of claims.6/ Government procedures were slow, as shown by the delays encountered between the October 6, 1978 Credit Agreement signature and the October 19, 1979 effectiveness date (PCR, para. 1.21). 6/ The Borrower feels that since 1982 improvements have been made in the processing of claims (Appendix 3, para. 1.9). D. Economic and Financial Reevaluation 19. Section V (Traffic and Operations) and Section VI (Economic Reevaluation) of the PCR contain (W) a critical examination of the parameters used for project justification at the time of appraisal; (ii) best present estimates of future traffic, cost of port operations, and anticipated flow of benefits; and (iii) the recalculation of the project's rate of economic return. Section VII (Financial Analysis) of the PCR contains an equally thorough ex- position of the estimated, actual, and prospective financial i3dicators rele- vant to the project. The audit reviewed the rationale and data of the econo- mic and the financial analyses, discussed with Covernment officials their own views concerning future developments, and does not disagree with the PCR conclusions which are summarized below. 20. Actual traffic is below SAR projections because of SAR overestima- tion of Niger mining activities and of Nigeria imports of general cargo (PCR, para. 5.08). Since 1979, port productivity has increased significantly and port capacity for general cargo has doubled (PCR, para.5.11). Future port activity will depend on rather limited traffic increases, on the switch to containers, and on additional, albeit modest, productivity gains (PCR, para. 5.14). Tonnage projections are based on a 4.4% annual growth rate (PCR, para. 5.18) which the audit feels may be on the high side but has no evidence with which to challenge the PCR forecasts. Containerization rate for general cargo should reach 50% in 1991 and level off at 80% from 1997 onwards (PCR, para. 5.20). Total number of ships will increase by only 3.4% annually (PCR, para. 5.23 and PCR, Annex 5-7), while the number of container vessels will increase from 69 in 1982 to about 240 in 2000. On the whole, future berthing capacity requirements will increase very slowly, due to limited traffic increase in tons, to shifts towards containerization, and to continuing port productivity increases (PCR, para.5.25). 21. Cost estimates in the SAR have been updated to reflect actual ex- penditures, inflated to 1984 prices. Estimated/actual economic benefits have been examined under two headings: (a) Berth Extension (reduction of ship waiting time; avoidance of traf- fic diversion to more costly routes; reduction of ship service-time at berth; reduction in land cargo-handling costs), and (b) Construction of Breakwater Spur (creation of additional land; avoidance of dredging). The reestimated overall rate of return for the project would be 25% (PCR, varas. 6.01-6.12 and Annexes 6-7).7/ Once again, the audit feels that although the rate of return cannot be challenged on the basis of the assumptions put forward in the PCR, the assumptions themselves m3v perhaps be on the optimistic side since they depend 7/ For a more detailed comparison between estimated and actual results, please see PPAM, Annex 2, paras. A.59-A.61. on traffic projections which may not fully materialize if, among other things, OCBN problems are not resolved. Also, the additional berthing requirements for oil exploration (para. 11 above) have generated benefits which contri-bute to the preservation of a relatively high economic rate of return. 22. Although the rate of economic return is satisfactory, the financial rate of return is not. The SAR forecast an 8% rate of return on net revalued assets from FY81 onward. The actual rate was 2.4% in FY82, with no chances to meet the targeted 8% rate in the foreseeable future given the limited prospects for significant traffic increases (PCR, para. 7.13). The most wor- risome feature in PAC's financial operations is management of working capital (PCR, para. 7.05) and there is little PAC can do about it. Commercial re- ceivables increased from CPAF 672 million in FY77 to CFAF 2,915 million (13 months of revenue) in FY82, although the SAR had optimistically forecast that, by that time, receivables would he reduced to 20% of annual income. The heart of the problem is that most of the receivables come from the Government and the parastatals, which are all in a difficult cash situation and tend to delay payments to each other (PCR, para. 7.10). No fast solu- tions are likely and PAC will have to live with this problem for years to come.8/ A recently appointed Government commission is attempting to lioui- date reciprocal debts among parastatals but the recommended measures are not expected to bear fruit in the short run. E. Sustainability of Project Benefits 23. The project expanded the port's physical infra.structure. Berths were built, channels and basins were dredged, facilities were improved, land was reclaimed. In addition, the project contributed to managerial and opera- tional improvements. Due attention must be paid to the port's financial position before and after the project, and this has been done in the PCR. In the final analysis, project benefits depend on the extent to which port pro- ductivity has increased. The audit found that managerial and operational improvements resulted in considerable productivity increases and, provided that a reasonable level of traffic is maintained, the gains realized in the past will be sustainable in the future. The project contributed much to the development of human resources and to the improvement of conditions under which the staff work. 24. The project created a strong esprit-de-corvs in the port. Over the long run, a competent staff is more crucial to an organization than additions to ph-sical infrastructure. PAC has a Directorate of Studies staffed by pro- fessionals able to scrutinize investment projects on the basis of economic, financial and engineering merit. OREMAP has a vigorous training program. Far more than in tht past, the general feeling among the Beninese staff is that revenues must cover costs. OBEMAP management genuinely tries to use whatever operational freedom it has (for instance, in modifying the manner in which cargo-handling workers are hired) to institute more cost-effective pro- 8/ For a more detailed discussion of estimated and actual financial results, please see PPAM, Annex 2, para. A.62. - 10 - cedures. Throughout the port, it is not denied that infrastructural expan- sion was on the excessive side. Now that the works are in place, the audit found that the prevailing staff attitude is to concentrate on maintenance. Genuine emphasis seems to be placed on deferred maintenance, organizational improvements and staff training. III. CONCLUSIONS 25. The Cotonou Port Project encompassed capital works and operational improvements. Its objectives were (a) to expand capacity and (b) to increase efficiency and productivity in cargo handling. These objectives were achieved and, from that viewpoint, the project was successful. However, the marked improvement in productivity put in doubt whether the full range of works built was necessary. The question becomes even more relevant in view of the substantial shortfall of traffic relative to appraisal projections. 26. An important reason for the traffic shortfall was the limited in- crease in Niger transit traffic. There are several explanations for this, particularly the fall in demand of uranium products. A secondary factor was the continuing difficulty of land transport. The port is but one of the elements of a transport corridor serving international transit traffic. Viewed from this angle, port improvements must be linked with other improve- ments in the corridor if they are to contribute to the efficiency of the cor- ridor as a whole. Sufficient improvements elsewhere along the corridor have not been achieved. 27. When project preparation began in the early 1970s, the benefits for Benin from a service-oriented and competitive transit operation were evi- dent. But so were the stumbling blocks: low productivity in the port, poor organization of land transport and freight forwarding, and a weak national banking system. Removal of the constraints demanded investment and policv decisions based upon realistic assessments: (a) How much traffic would the "Benin Route" carry for Niger? (b) What needed to be done and in what order for the port, the railway and the truckers to ensure efficient operations, satisfactory ser- vice and low cost-based tariffs? (c) What were the prospects of the railway: did it have a future or would it be run out of business when the Cotonou-Parakou- Malanville-Niamev road was paved from end-to-end? (d) Tf the railway did not have a future was it reasonable to assume it would be closed down? (e) If it could not be closed down, what would he the minimum level of maintenance required to keep trains running without danger of de- railment? - 11 - (f) Shouldn't there be a coordination mechanism to look after the "Benin Route" as a whole, especially since Togo seemed ready to offer competition? (g) How would it be ensured that improvements in the porc, freight forwarding, banking, railway, and trucking elements would be imple- mented pari-passu so that bottlenecks, leading to transport delays and increased costs, would be avoided? The Government and IDA avoided many of these questions. 28. Domestic conditions in Benin during the late 1970s were so un- settled that economics and finance did not influence public policy ot invest- ment decisions. Government resolved that the highest priority investment was to double the number of berths in the port. The decisions could be defended neither on operational nor on financial grounds but it was taken all the same by the Government which, however, lacked the necessary funds and asked IDA for a concessic tary loan.9/ 29. IDA had indications that if prudent traffic forecasts were to be adopted, doubling che port's physical facilities was probably excessive. IDA also knew that expansion of physical facilities needed to be complemented by improvement of port operations and increased efficiency of the Benin Route (PPAM, Annex 1, paras. A.16 and A.25). It also knew there was a major risk that Nigerian traffic would not remain high (PPAM, Annex 1, paras. A.16 and A.20). It would however appear that IDA feared that its unwillingness to support the Government's desire for a 4-berth project would jeopardize Bank- Country relations (PPAM, Annex 1, paras. A.28 and A.33). 30. The net outcome was that IDA formally declared that a 610 m port expansion was genuinely needed. It went beyond that by securing co-financing for the project. IDA is therefore responsible for bringing in other donor agencies one of whom now claims that IDA's reputation fnr financing fully justifiable operations was what persuaded them to put resources into a proj- ect which, in retrospect, appears to be excessively large. 31. Apart from completely agreeing or flatly disagreeing with the Government on a project focussed on the port, there was another alternative open to IDA. It could have pointed out that, instead of a massive expansion of the port, a different project could have been prepared focussing more on how to improve the "Benin Route" as a whole. Such an approach would have been difficult, especially when account is taken of the Bank Group's tendency to allocate country, sectoral and modal responsibilities among different management units. It would, in addition, have required more preparatory work and it would have postponed presentation of the project to the Bank's Board of Directors. In the audit's opinion, the administrative complications, the extra work, and the delay of presentation to the Board would have been worth- while. 9/ The Borrower feels that since October 26, 1972 Benin has enjoyed a stable political environment. Also, that the decision to expand the port faci- lities was taken after studies of economic and financial feasibility approved by the Bank (Appendix 3, para. 1.11). --/7-2--- - ANNEX I Page 1 THE PROJECT: FROM INCEPTION TO BOARD APPROVAL A. Cotonou Pirt in the Early 1970s A.1. The port of Coconou was constructed between 1960 and 1965 and con- sisted of four general cargo berths, two specialized berths for petroleum and oil palm, a fishing port, and 43,300 m2 of covered storage space. It was managed by the Port Autonome of Cotonou (PAC) and cargo handling was done by the Office des Manutentions Portuaires (ODEMAP).1/ A.2. The port handled imports and exports for Nigeria, Niger and Beiin. General cargo traffic (about 390,000 tons in 1972) had been growing at an annual rate of more than 8% since 1965. In 1972, the Fonds d'Aide et de Cooperation (FAC) agreed to finance a feasibility study for a two-phase, $20 million expansion. Phase I was anticipated to add three general cargo berths at a cost of about US$10 million. IDA staff were kept informed of these plans and agreed that the port needed to be expanded. A.3. Although the feasibility study had not yet started, the Government, FAC, and IDA took for granted a number of debatable hypotheses: (a) that the general cargo traffic would continue to increase at 8% per year. (b) that cargo handling was done as well as could be expected and that berth space was the principal constraint. (c) that the cost for the required civil works would be about US$10 million. A.4. The FAC-financed feasibility study was not, as planned, ready by the summer of 1973. In June 1974, an IDA staff member visited the consul- tants' headquarters and reported that the study would be ready by end December 1974, that the consultants would probably recommend a limited exten- sion (3 general cargo berths) of existing facilities, that this would conflict with the Government's desire for a more substantial expansion, and that the major issues likely to confront the project were: (a) Engineering (siltation in port access due to littoral drift of sand); (b) Finance (port charges would have to be increased to cover project costs and reach a reasonable rate of return); and 1/ ODEMAP and OREMAP are different names for the same organization. - 14 - ANNEX 1 Page 2 (c) Economics (competition with Lomd). A.5. Another IDA staff member visited the consultants' headquarters in September 1974 and reported that although the study would include preliminary engineering and cost estimates, no firm conclusions were yet available as to the full extent of the project. However, it would now include a breakwater to trap littoral sand which had been accumulating and threatening to affect the safe depth at entry. In addition, the consultantr would recommend the construction of two new general cargo berths, instead of the at least four wanted by the Government. The two additional berths would cost about US$8 million. On the basis of the timetable suggested by the consultants for the completion of their preparatory work, IDA assumed it could preappraise the project in February 1975 and carry out the full appraisal in June 1975. These assumptions proved to be optimistic. B. Project Identification A.6. An IDA Project Identification Mission visited Benin in March 1975 and summarized its findings in a report dated April 28, 1975. A.7. Master Plan (a) The consultants' study had only recently been received by PAC and had not been studied in great detail by them. The consultants re- commended the construction of three more berths but with some additional dredging work. The Director of PAC felt that the berth face should be extended to the west corner and returned to the south for some distance. This would provide the port with an ideal point for roll-on/roll-off operations.2! (b) One of the most important items in the master plan was the recom- mendation for a cut-off breakwater to extend the land zrea being built to the west of the existing port. Without this build-up the master plan as proposed could not be realized. The principle was good but the cost was high (US$4.35 millior). (c) In the consultants' study, the need for the provision of more berths had been calculated solely on the principle of ship waiting time. The Identification Mission noted that the appraisal mission should investigate this in greater detail. 2/ The consultants went from 3 berths (June 1974) to 2 berths (September 1974) and back to 3 berths in the report reviewed by the IDA Identification Mission in March 1975. PAC had not had time to review the report in great detail but its Director felt that extensions to the berth face should be made to accommodate a ro-ro facility. - 15 - ANNEX I Page 3 A.8. Traffic (a) Total traffic in 1974 - 738,00 tons3/ (375,000 tons of general cargo at the four main berths; of this total, 276,000 tons were imports). (b) Estimated capacity of the four existing berths: 500,000 tons.4/ Berth Requirements A.9. Available information did not permit making a final choice between a two-berth and a three-berth project. Port Organization and Operations A.10. The port was registering a net loss increasing from 129 million CFA in 1971 to 151 million CFA in 1973. The working ratio and the operating ratio were unsatisfactory. The published accounts did not reflect the true financial position due to vital deficiencies in reporting. Port tariffs would have to be reviewed. Handling operations would have to be examined, the organization and performance of PAC would have to be studied by appraisal mission.5/ C. Project Brief: Successive Versions A.11. There are three versions of the Project Brief. The first (dated May 13, 1975) came after the March 1975 Identification Miss-i-on7IThe second (dated December 1975) was written after a June 1975 mission to Benin. The third (dated February 1977) was written after one and a half years devoted Eo 3/ Of which: . 153,000 tons of fuel imports at the eastern breakwater . 182,000 tons of bulk clinker and gypsum imports, ditto . 28,000 tons of exports in bulk of vegetable oils, ditto 4/ Traffic characteristics as follows: . Steady and regular increase of general cargo (8.7% p.a.) and of fuel (7.5% p.a.) over 1965-74. . Exports fell by 35% between 1971 and 1974. . Imports of foodstuffs for Benin and Niger rose from 78,000 to 141,000 tons between 1971 and 1974. . The 1974 traffic is highly unbalanced: exports are only 22% of general cargo traffic, as opposed to 41% in 1971. Even vegetable oil exports fell from 44,000 to 28,000 tons. 5/ The audit notes that although the Identification Mission Report is an otherwise comprehensive document, it does not make any reference to the fact that the port of Cotonou serves international transit traffic, that it is one of the elements of the Benin Route and that it ought to be examined in conjunction with the rail and road elements. - 16 - ANNEX 1 Page 4 project preparation and to discussions with co-financing agencies. Between May 1975 and February 1977 the proposed project underwent major changes in presentation and substance and these are summarized below. A.12. Project Timing and Scope (a) The project is planned for Board presentation in FY76. (b) The full scope of the project was yet to be established but it would tentatively consist of: - Two general cargo berths; - One transit shed; - Some open storage areas and services; - Dredging of the basin A.13. Project Cost and Financing (US$ million) May 1975 Dec.1975 Feb.1977 Port Expansion 30.69 30.69 40.00 (Two berths;6/ the breakwater; services, roads, etc.) Consultants 0.34 0.34 0.50 (Detailed engineering and supervision) Studies and Technical Assistance 0.50 0.50 0.70 (Tariff structure, financial measures, and review of stevedoring) GRAND TOTAL 31.53 31.53 41.20 Financing: IDA 8.00 8.00 12.00 PAC 1.00 1.00 1.00 Gap 22.53 22.53 28.20 6/ All three versions of the Pr"ject Brief assume the construction of two berths only. - 17 - ANNEX I Page 5 A.14. Objectives Sectoral The port of Cotonou is important for the economic growth of Benin as foreign trade is one of the most important factors and represents about 27% of GDP. Furthermore, if the port is available to handle cargo easily and efficiently, more foreign cargo, particularly for Nigeria, may be expected.7/ Project . Avoidance of anticipated future ship waiting time. . To create increased land areas to the west of the port which will enable the master plan for the development to be achieved and will delay the need for maintenance dredging. . Improvements in the port's organizational and financial situation. . Improvements in the operations of the stevedoring and shore handling company. 7/ December 1975 version: "The port of Cotonou, an integral part of the Benin Route, is important for the economic growth of Benin: exports represent about 25% of GDP and imports about 35%." In December 1975, the port is, for the first time in the record, acknowledged to be part of the Benin Route and this suggests that the service provided by the entire route ought to be reviewed. The Nigerian authorities indicated that they regarded using the port of Cotonou as a stop-gap measure and that they intended to divert all Nigerian traffic movements to Nigerian ports as soon as these ports were expanded (Back-to-Office Report, November 1, 1976, para. 2.2). - 18 - ANNEX I Page 6 A.15. Key Issues Berths The consultants recommend three berths. PAC would like four. Unlikely it would be possible to justify more than two.8/ Breakwater Its function was to prevent sand accretion and to delay the need for maintenance dredging. Since the costs were high, the benefits would have to be very carefully analysed. Economics In the absence of any significant port congestion (450 hours of ship waiting time in 1973), the economic analysis would rest on anticipated future ship waiting time. This would be determined by future general cargo traffic which was difficult to forecast. Future trends would de- pend on: . economic growth in Benin, which was at best uncertain; . transit traffic from Niger, which %as equally uncertain; . transit traffic to Nigeria, essentially a function of the speed of the Cotonou-Lagos road and the speed with which Nigeria would be able to build up its own port capacity. 8/ February 1977 version: "Discussions between Bank staff and the Benin authorities show that in spite of cordial relations and Nigerian missions to Cotonou concerning the use of the port, no formal agreement for the use of Cotonou as an inlet for Nigerian cargo has been made. It is considered that unless Nigerian financing is made available for the additional berths, in the light of uncertainty the project should consist of only two berths. However, the tender documents will be prepared in such a way that two, three or four berths can be built under the contract without incurring penalties." - 19 - ANNEX 1 Page 7 Port productivity Port productivity should increase from 105,000 tons per berth/year (1975) to 125,0009/ D. Preappraisal A.16. The project was preappraised in June 1975. The mission reported (on June 30, 1975 and on July 15, 1975) delays due to lack of data, absence of detailed engineering, the need to use retroactive financing up to about $750,000 for the preparation of engineering drawings, travel restrictions which precluded a visit to Niger, an unsettled political situation involving curfews, closure of frontiers and airport, and strikes in the port and other industries. Para. 2.4 of the June 30, 1975 reads as follows: "The need for port expansion at this time must be carefully con- sidered in the light of the most recent information. The latest traffic data made available to the mission indicated a reduction in the throughput of the general cargo. Since the economy of Dahomey appears to be slowing, the growth rate of the general cargo through the port for the next few years may be very small. Additionally, the massive investments underway and contemplated by the Nigerian Port Authority may obviate the necessity fnr imports to Nigeria to be diverted through Cotonou beyond 1978." 9/ December 1975 version: "Port productivity has dropped dramatically in the last few years. The effective rate of loading/unloading has dropped from 21 t/hour in 1973 to 12.5 t/hour in 1975. The general cargo throughput is now only 90,000 tons/year/berth and although traffic has stabilized since 1973, the port is now becoming congested with ship waiting time increasing from negligible in 1972, to 1750 hours in 1973, to 5780 hours in 1974, to an expected 18,000 hours in 1975. A 20% surcharge has been applied to freight tariffs from August 1975. The major cause of this deterioration is political, resulting from the massive departure of the expatriates in the recently nationalized orga- nizations involved with the port's operation and coupled with insuffi- cient management experience and equipment of ODAMAP, the Government stevedoring and cargo handling company, which during the past three years channelled substantial profits to the Government budget but failed to maii. iin and renew its equipment or to train staff." February 1977 version: Remarkable improvement in operations. Freight surcharge withdrawn since April 1976. It should be noted that the improvement was temporary because the sur- charge was reimposed in April 1977. - 20 - ANNEX 1 Page 8 A.17. An IDA project preparation mission visited Benin in November 1975 and its report (dated February 3, 1976) states unequivocally that the main cause of ship delays is port productivity.10/ The report states that justi- fication of the proposed project was based on benefits likely to accrue from avoidance of ship time delays and that the main cause of ship delays at that time was poor port productivity. At the same time, the report endorsed the project scope described in the May 1975 Project Brief which placed heavy emphasis on infrastructure improvements to accommodate expected traffic in- crease. The estimated cost of these improvements was more than $30 million, a substantial amount by any standards, but the report neither questioned whether all the works proposed were really needed nor explored the possibi- lity of similar benefits accruing from a scaled-down or phased project (para. A.16 above). E. Project Preparation and Cofinancing A.18. Between the first and second revisions of the Project Brief in December 1975 and February 1977 respectively, momentum was built up to imple- 10/ Para. 3.1: "The main cause of ship delays is poor port productivity." Para. 4.7: The port, attracted by the apparent opportunity to profitably handle large volumes of Nigeria destined cargo, has drawn up a $10 million investment program to improve productivity with the following: cargo handling equipment, another tug, water barges, two new open storage areas, two transit sheds and a warehouse. This program completely ignores the poor management and operation of ODAMAP, the prime agency responsible for the decline of port pro- ductivity and the mission considers the investment to be unrealistic because: . it would be unwise to acquire such equipment and facilities without a simultaneous program to improve management and control; . the program is based on handling a massive 400,000 tons/year contingent of Nigeria-destined cargo, which is far from assured; . the program should be based on the findings of a cargo handling and port operations study such as proposed by the mission. Para. 6.1: "FAC have agreed to finance a five-month study to assist PAC, ODAMAP and OCDN to improve productivity". Para. 6.5: "The management of the port expressed their inability to produce terms of reference for the engineering consultants and these will have to be prepared by IDA staff". - 21 - ANNEX 1 Page 9 ment a project emphasizing -rimarily expansion of physical capacity. Increasing involvement of potential cofinanciers in project preparation re- sulted in additional delays and in some unnecessary work.11/ A.19. On August 3, 1976, the Western Africa Regional Office submitted to the Senior Vice President a request for a project preparation advance (US$130,000) to finance studies required to continue preparation of the proj- ect. The request was approved and preparatory work went on. A.20. A Back-to-Office and Full Report (dated November 1, 1976) contained disturbing news: Para. 2.2: "The Nigerians regard the use of the Port of Cotonou as a very short-term measure and als as a last resort". Para. 2.4: "The Port Operations Study has been extensively delayed in FAC and will not commence until January 1977". Para. 2.6: "OCBN data were not forthcoming. The Minister of Transport will not release them. Impossible to arrange a meeting with the Minister." A.21. A Back-to-Office and Full Report (dated January 7, 1977) summarizes the cofinanciers' meeting held in Cotonou in December 1976: (a) The engineering solution proposed by BADEA was rejected. (b) Individual components of the project were to be split off in lots for parallel financing. 11/ On June 30, 1976 IDA became aware of two factors which might cause further delays in project preparation. First, that BADEA had a novel idea about the overall engineering design prepared by the consultants and that IDA would have to draft terms of reference for the consultants to look into the RADEA idea. The extra work would cost $100,000 and BADEA would pay for it. Second, that the Government had still not responded to the 1975 IDA request for a number of studies (on port operations, on the feasibility of the cut-off breakwaLer, and on detailed engineering) required before project appraisal. IDA staff proposed that the Project Preparation Facility (PPF) be used to the amount of S300,000 for the financing of these studies. The Back-to-Office and Full Report (dated July 15, 1976 and written after a meeting in Paris among representatives of the Government, of IDA, of cofinaciers and of the consultants), states that the BADEA proposal was judged uneconomic by IDA staff and by the consultants. However, it seemed attractive to the Government representatives and this was the reason it would be followed up. The report does not suggest that any discussion took place during the meeting about measures to improve productivity although the IDA representatives had stated in their February 3, 1976 report that one of the port's main problem was poor productivity. - 22 - ANNEX 1 Page 10 (c) The Government took note of the IDA suggestion to explore Nigerian financial participation in the project.12/ (d) Level of financing by individual agencies still undetermined. A new cofinanciers' meeting scheduled for May 1977. A.22. On January 19, 1977 the Western Africa Regional Office submitted to the Senior Vice President a request for a second project preparation facility advance (US$370,000) to complete the preparation of detailed engineering and tender documents. A.23. A Back-to-Office and Full Report (dated April 8, 1977) presents a gloomy picture: Para. 1.1: After a remarkable improvement during the second semester of 1976, the situation was now deteriorating again. A surcharge of 30% ex- pected to be effective March 17. The reasons for deterioration included seasonal peak traffic; border closure for 10 days after political dis- turbances in January 1977; OCBN difficulties to clear backlog after the reopening of the borders; one berth blocked by heavy uranium mining equipment; poor performance of the public freight forwarding companies SONATRAC and SOTRACOB; decline in the efficiency of berthing services and pilots due to the temporary absence of the harbor master; decline in labor productivity because of the excessive number of political meetings since mid-January. Para. 1.8: Scepticism about the future performance of the railway. Para. 1.18: Unknown if the Government was willing to accept technical assistance staff. A.24. A June 15, 1977 Back-to-Office Report summarizes the outcome of the cofinanciers' meeting which took place in Paris on June 9 and 10. The para- graphs dealing with the number of berths and with project costs read as follows: Para. 4: "No attempt was made to resolve the issue of the number of berths to be constructed under thr project. The Minister of Transport ac- cepted IDA's positionl3/ that this could not be determined until after the project had been appraised and proper account could be taken of all the fac- tors affecting the traffic projections for the port and the estimates in the improvement of port productivity." 12/ IDA was aware that the Nigerians did not intend to make any sizeable investments in the port of Gotonou which they regarded as a "last resort" (paras.A.20 and A.16 above). 13/ The impression created by this sentence is that neither the Government nor IDA were sure of their respective positions. This is not true. The Government wanted four berths and a roll-on/roll-off facility while IDA taff remained convinced that it would be hard to justify any extension eyond two additional berths. - 23 - ANNEX 1 Page 11 Para. 7: "The provisional cost estimates14/ dated June 6 provided by the consultants for the meeting were substantially increased over their pre- vioue estimates of only February 1977. Discussions with the consultants on the reasons for this escalation (50% in the case of dredging estimates) did not reveal any really satisfactory explanation for this and no new factors emerged." Total Project Cost: February 1977 (2 berths) $41.00 million June 1977 (2 berths) $50.00 million (3 berths) $57.00 million (4 berths) $64.50 million A.25. While the cofinanciers' meeting was taking place in Paris, an IDA railway mission was in Benin gathering information to back up the port proj- ect. The mission report (dated July 21, 1977) is focussed on the transport capacity of the Cotonou-Parakou-Niamey corridor and states that capacity con- straints were due to: (a) poor operations in Cotonou port by OBEMAP; (b) insufficient motive power and rolling stock capacity of OCBN; and (c) inefficient cargo-handling at the rail-to-road transshipment point in Parakou. F. Appraisal A.26. Project appraisal took place in Octc-,er-November 1977. G. Issues Paper A.27. The November 11, 1977 Issues Paper is an equivocal document which avoids any explicit reference to what the estimated total cost of the project is. The alert reader can see that on page 8, construction work is estimated to cost $50.61 million plus 3-4% for supervision. Making allowance for tech- nical assistance costs and for contingencies, one may guess that the total project cost will be about $60 million. A.28. The number of berths to be constructed is presented as the major issue in the Paper (page 4), and the relevant paragraph reads as follows: 14/ The estimates were provisional because the cons, *qnts were behind schedule with the detailed engineering and other stu, . - 24- ANNEX 1 Page 12 "With the latest information available to the Bankl5/ it is possible to justify an extension of the berth face in the pFot by 610 meters. This length is in part made up of three additional berths of 180 meters each plus an additional length for berthing the port's two large tugs and service vessels. However, with the Government's insistence on a four-berth extension of the port, this same length could also be consi- dered as being equal to the useful length of the existing four-berth port which is also 610 meters. Thus the port's berth face will have been doubled and they will have eight berths in terms of the length of the original berths. This would appear to be a satisfactory response to the Government's wish but it may not be an acceptable solution to them." A.29. Since the Issues Paper chooses to justify the proposed project largely on the servicing of Nigeria-bound traffic it may have been expected that Nigerian traffic forecasts would be presented not only as sizeable but, also, as more or less firm. However, the Issues Paper makes it clear that Nigerian traffic cannot be reasonably determined. The second paragraph of page 5 reads as follows: "In view of the enormous importance of this traffic on the need to ex- pand the port, it is essential to base the projections for transit traffic on the best available review of the future Nigerian situation and to carefully include the cargo that is ostensibly consigned to Cotonou but is intended for Nigeria. Since to provide undercapacity will be just as serious as providing overcapacity, the difficulty of estimating the future volume of this traffic cannot be overemphasized." A.30. Cargo handling productivity "desperately needs to be improved", (page 5, third paragraph). It was thought essential that both technical assistance and training schemes be implemented as soon as possible, "prefer- ably before the project Is started." An UNCTAD Port Congestion Task Force is in Benin and a report financed by FAC and prepared by the Port of Marseilles will also offer recommendations. "Agreement with the Government and PAC on the needs and detailed methods to be adopted before and during the project is essential. "Without increased productivity little benefit will be derived from the project". A.31. The quality of management of both PAC and OBEMAP is poor, lacking both port experience and qualifications (page 5, fourth paragraph). The Government should agree to both training programs and the provision of ex- patriate technical assistance to advise on operations. A.32 A comprehensive review of tariffs is necessary. This review would cover the port, OBEMAP, OCBN, and the rates offered to the road hauliers. "Such a review is important to maintain and increase the competitive nature 15/ The project file contains no evidence to support this assertion that new information made possible the justification of the equivalent of a four-berth project. - 25 - ANNEXI Page 13 of the "Benin Route" for transit traffic and to derive the maximum benefit from the best asset that Benin possesses. In addition, the tariffs are not cost-based. The Government and the port should be asked to agree to such a study and to implement the results as part of the project."16/ H. Decision Memorandum A.33. The Decision Memorandum (dated 9 December 1977), endorsed virtually all recommendations contained in the Issues Paper and, under "Project Scope" (paragraph 2), contains the following statements: "The revised traffic estimates warranted an increase in berth length of 610 meters. This virtual doubling of available berth space (compared with the existing port) while falling short of the additional four berths that the Government has been clamoring for, should provide an acceptable compromise to all concerned. The meeting discussed in some detail the elements of the revised traffic projections which had made possible the recommended scope, especially the recent sharp increases in the traffic consigned to Benin but ultimately destined for Nigeria. The meeting noted that, under optimistic assumptions with respect to im- provements in cargo handling rates, the enlarged port would be fully utilized by 1986." A.34. In view of the positive tone of the Issues Paper and of the Decision Memorandum, it is surprising that on December 15, 1977 IDA informed BADEA that "both the exact scope and the cost of the project continued to remain unknown." A.35. However, the Abu Dhabi Fund, one of the potential cofinanciers, informed IDA on December 22, 1977 that "in case of increasing the number of berths from two to four the Fund will then consider and reevaluate the proj- ect on the light of this new changes." Eventually, Abu Dhabi declined to participate in the financing of the project. Contacts between IDA and poten- tial cofinanciers continued throughout the December 1977-March 1978 period. A.36. The Yellow Cover SAR was circulated on March 17, 1978 and provoked the following reaction (dated March 20, 1978) from an IDA staff member: "The benefits of the project, which consists mainly of avoided diversion of traffic, imply large investments in addition to the 16/ This is another unequivocal statement that the port of Cotonou is part of the "Benin Route" and that improvements in the port should be accom- panied by improvements in land transport and freight forwarding. The tariff study was a crucial element in evaluating the competitiveness of the Benin vs. the "Togo Route". Such a study was done during project execution whereas it ought to have been commissioned as early as 1972 when the feasibility study for the port expansion was awarded. -26 - ANNEX I Page 14 proposed project (equipment for OC8N, improvements to the Parakou terminal, road construction). I think that the cost of these investments should be included in the cost streams for the calcula- tion of the economic rate of return. The SAR does not clearly state how the tariff study of the Benin Route including the port, OCBN and the road, will be conducted. What agency will be respon- sible? What is the timetable? A.37. The record does not show that the above observations were taken into account during the further processing of the project. A.38. On May 23, 1978 the Western Africa Regional Office submitted to the Senior Vice President the President's Report (PR), the Staff Appraisal Report (SAR) and the Development Credit Agreement (DCA) of the Cotonou Project. The covering note contains the following statement: "Project Description The project now includes a $2 million provision for an investment of high priority,17/ a roll-on/roll-off facility (including a feasibility study of this facility) the financing of which was originally assumed to be borne by the Government outside the project scope. Since surplus funds were avail- able, it was decided, at the request of both the Beninese delegates and the cofinanciers, to include this facility in the project." I. Board Approval A.39. The IDA Board of Directors approved the Cotonou Port Project on June 8, 1978. The date of effectiveness was set at September 30, 1978 and the project's estimated completion date was December 1980. Annex 2 belcw compares the project as approved by the Board with actual project implementa- tion. 17/ There is no indication in the record that the ro-ro facility had assumed any high priority from the transport point of view. - 27 - ANNEX 2 Page 1 III. THE PROJECT: PLANNLD IMPROVEMENTS AND ACTUAL RESULTS A. The Transit Function A.40. The port of Cotonou is the starting and finishing point for the Benin Route, the principal artery for carrying goods to and from Niger (SAR, para. 1.03). Rail and trucking services on the Benin Route are run by OCBN (SAR, para. 1.04). The Government curbed competition from road transport by keeping unpaved the Bohicon-Parakou road which runs parallel to the rail- road. In an attempt to capture more of the Niger traffic, plans were under- way in 1977 to pave the road. In mid-1985 the decision to pave the road has been taken but the future of the railway is not settled. A.41. At the time of appraisal, the prospects were favorable for substan- tial traffic growth in the port because: (a) the Benin Route was regarded as the cheapest access to the sea for Niger, and (b) since 1975, the Port of Cotonou had been used increasingly for Nigerian imports and this was regarded as likely to continue at least until the congestion in Lagos was eliminated (SAR, para. 1.13).1/ B. The Port of Cotonou A.42. The port is run by PAC, an autonomous public agency. All cargo handling and stevedoring operations are the responsibility of another govern- ment agency, OBEMAP (SAR, para, 2.06). The port faces serious managerial and organizational imperfections. . The recently appointed PAC general manager has had no previous experi- ence in port management (SAR, para. 2.07). o Port operations and maintenance are carried out by PAC and OBEMAP with no overlap (SAR, para. 2.08). . Port maintenance is poor because PAC lacks qualified technical staff (SAR, para. 2,09). 1/ The Beninese traffic increase was 2.7% per innum, because of slow national economic development (PCR, para. 5.07). During and after project implementation, Niger imports of food products and cereals through Cotonou increased while other imports stagnated. The projected peak level of Nigerian traffic in FY81 was overestimated at 320,000 tons of general cargo (the actual peak was 213,000 tons of general cargo in FY77). It was believed that after the FY77 peak, imports for Nigeria would stabilize at 270,000 tons from FY85 onwards, while in fact the Nigerian traffic disappeared completely in FY80 (PCR, para. 5.06). As of FY82 actual port traffic was on the average 30% below SAR projections (PCR, para. 5.08). -28- ANNEX 2 Page 2 . The number of pilots available is insufficient (SAR, para. 2410). . Recent studies have found that major causes of port congestion are: (a) delays in removing cargo from the port area, and (b) the lack of sufficient open storage areas and transit sheds (SAR, para. 2.14). . The entire management staff of OBEMAP is new and inexperienced (SAR, para. 2.17). At Cotonou, productivity depends largely on the efficien- cy of OBEMAP (SAR, para. 2.18). . The project should increase the present average rate of 7.1 tons/gang/ hour for general cargo to at least 10.0 tons/gang/hour (SAR, para. 2.19). A.43. The SAR also shows that the port's finances were not optimally managed: . PAC's tariffs are not cost based, have not kept up with inflation and require extensive revision (SAR, para. 2.23). . OBEMAP's tariffs are not cost-related and need revision and ratio- nalization (SAR, para. 2.24). . PAC's accounting has serious shortcomings (SAR, para. 2.25). . OBEMAP's accounting deficiencies are similsr to PAC's (SAR, para. 2.26). . Neither PAC's nor OBEMAPS's budget format permit functional budgeting and budgetary control (SAR, para. 2.27). C. Project Objectives and Pxoject Components A.44. The SAR (para. 3.02) states that the objectives of Cotonou Port Project were: (a) to increase the capacity of the port to handle break-bulk and gen- eral cargo from 720,000 tons per year to about 1.1 million tons per year by increasing berth length and storage areas. This in- creased capacity should suffice until 1985. (b) to improve the efficiency of PAC and OBEMAP operations through training programs, technical assistance and scholarships abroad.2 2/ Supervision Report (April 25, 1980): "No improvement in port operations have been observed since the last mission in July 1979, The poor performance of the port explains to a large extent the significant diversion to neighboring ports which is now taking place for Niger imports." - 29 - ANNEX 2 Page 3 (c) to improve the operations of OCBN through technical assistance programs. (d) to ensure that Benin derives maximum benefit from the use of the Port of Cotonou for the transit of goods destined to neighboring countries, while keeping the operational efficiency and tariff strutcture of the "Benin Route" sufficiently competitive to attract 7C% of Niger imports through Atlantic ports.3! (e) to augment knowledge of the erosion problems occurring downdrift from the port so the Government can control erosion and plan and construct necessary shore protection works. Civil Engineering Works A.45. The SAR describes these in paras. 3.09-3.15. The civil engineering works were split into six contract lots to simplify the parallel and joint financing of the project by the various cofinanciers. The six lots were: A.46. Lot 1- Berth Construction. The existing berths would be extended by 610 meters with a depth of 11 meters alongside. An additional length of 50 meters would be provided, with a depth alongside varying frLm 11 meters to zero, for use as a service berth for the port's tugs, pilot boats and launches. Also included in this lot was the provision for a roll-on/roll-off facility (SAR, para. 3.10). SAR para. 2.21 states the following: "Roll-on/roll-off cargo is increasing rapidly,4/ and the port is unable to handle such vessels efficiently. Such a facility is necessary and PAC has been considering how to provide it. Possibly the best solution would be to 3/ Supervision Report (September 12, 1979): "The Mission was surprised to find that the expected increase in Niger non-bulk traffic has not materialized. Niger truck owners favor the more profitable Lomg Route." Supervison Report (March 19, 1980): "Fall in the general cargo for Niger. The volume of general cargo passing through Lomf to Niger was three times the volume passing through Cotonou. There seems little doubt that the fall in productivity evident in Cotonou over the last 12 months, coupled with considerable improvements in the management of the Port of Lom&, have in fact caused the decreased use of the Port of Cotonou." 4/ The record contains no evidence in support of the alleged rapid growth of ro-ro traffic. On the contrary, it contains evidence that IDA staff repeatedly informed the Government that there was little chance of Ro-Ro traffic developing significantly in Cotonou (please see para. 53 below). - 30 - ANNEX 2 Page 4 acquire a concrete decked barge with a bridge leaf to the quay. The barge would be equipped with pumps to enable its deck level to be changed with tides and varying types of vessel sill/ramp levels. A study of the facility will be made and implemented during the project." A.47. Lot 2- Dredging and Filling. This lot is divided into two sec- tions: one for the port entrance and one for the new basin (SAR, para. 3.11). A.48. Lot 3- Breakwaters. In order to gain access to the new basin to the west of the port it will be necessary to remove 320 meters of the west breakwater. The materials for the construction of a new cut-off breakwater will come from the demolition of these 320 meters, from an existing stock of rocks and tetrapods, and by the quarrying of new rock and the casting of new tetrapods (SAR, para. 3.12). A.49. Lot 4- Paving, Roadworks, Railway Trackwork, Services, and Fencing. Infrastructure improvements within the port area (SAR, para. 3.13). A.50. Lot 5- Transit Sheds. Two sheds to be constructed, each of 120 m x 50 m, as clear span portal structures (SAR, para. 3.14). A.51. Lot 6- Electrical Works. Essential improvements and extensions in the port area (SAR, para. 3.15). Technical Assistance and Training A.52. The project would provide technical assistance, training programs and overseas training to PAC, OBEMAP and OCBN. Because of the importance of the Benin Route and the increasing competition, both domestic and interna- tional, the tariff studies for each of the three agencies should be coordi- nated, or preferably, carried out by the same consultant or expert (SAR, para. 3.16). A.53. Four experts (for a total period of 60 man-months) would work in PAC to: (a) advise management in port operations and control; (b) reorganize the accounting system, introduce cost control and cost- based tariffs, strengthen internal audit, revalue the assets and train staff; (c) implement a maintenance program in the engineering section; (d) set up programs for lower-level employees and for mechanics and technicians; (e) advise on the training of pilots, their conditions of employment and pilotage charges. - 31 - ANNEX 2 Page 5 In addition, a consulting engineering firm would be retained (for a total period of 40 man-months) to study the need for a roll-on/roll-off facility,5/ to develop and design it, and to assist PAC in commission- ing it (SXR, para. 3.17). A.54. Three experts (for a total period of 60-man months) would work in OBEMAP to: 5/ From the very beginning, IDA staff had reservations about the Ro-Ro facility: Letter to the ad hoc Commission (August 22, 1979): "Given the very feeble level of the Ro-Ro traffic both at present and in the foreseeable future, a minimum of expenditures must be budgeted for these installations." Supervision Report (September 12, 1979): "The Beninese with the strong support of the Canadian consultants were obviously very keen to go ahead with the construction of an additional berth for Ro-Ro traffic as it would enable them to present to the President the four-berth project he has always wanted. The mission informed the Beninese that there was little chance to Ro-Ro traffic developing significantly in Cotonou." Letter to the ad hoc Commission (October 25, 1979): "We draw your attention to the fact that in our opinion Ro-Ro traffic will not develop to any significant extent in Cotonou during the next few years without technological develtpments which are difficult to imagine as taking place in the immediate future." Letter from Project Coordinator IDA (March 4, 1981): "I do not think that any detailed economic study would ever show a reasonable return on investment for a Ro-Ro berth costing 350 million CFA. A very large Ro-Ro ship arrived lately in Cotonou and discharged quickly with no difficulty. In the opinion of a consultant who has worked for many years on West African ports and knows Benin well, if Benin want a Ro-Ro berth they will, by one way or another, succeed in the end in getting it built; it is essentially a political decision, and useless to argue against it." Supervison Report (July 28, 1981): Construction of the Ro-Ro ramp is on. It will be financed from other sources since IDA money has ran out. Supervision Report (Januray 27, 1982): The Ro-Ro ramp to be financed by BADEA (US$1.2 million). - 32 - ANNEX 2 Page 6 (a) develop training programs; (b) select and recruit candidates to fill vacant positions; (c) institute a program of regular equipment maintenance and renewal including training and recruiting of workshop personnel and super- visors; (d) reorganize the accounting system, introduce cost control, strength- en internal audit, revalue assets, train staff and rationalize and revise tariffs (SAR, para. 3.18). A.55. Two experts (for a total period of 22 man-months) would work in OCBN to: (a) design a new layout for the Parakou railway terminal; (b) recommend and implement operational improvements at the Parakou terminal, including staff training; (c) review the traffic forecasts and determinate the investments that may be needed for the next 10 years; (d) recommend improvements in operations and management; (e) recommend improvements in training and staff development policies; (f) study and design a new tariff structure for rail traffic between Cotonou and Parakou and for road traffic between Parakou and Niger (SAR, para. 3.20) D. Cost Estimates and Project Financing A.56. The SAR and the PCR give the following estimated and actual costs respectively for the Cotonou Port Project (SAR, paras. 3.21 and 3.16). - 33 - ANNEX 2 Page 7 US$ million equivalent SAR PCR Preliminary Studies financed by IDA under PPF and By BADEA 0.60 0.61 Civil Works 32.32 43.89 Lot 1 10.44 Lot 2 8.00 Lot 3 4.08 Lot 4 5.31 Lot 5 2.45 Lot 6 2.04 Construction Supervision 1.72 3.28 Technical Assistance, Training and Study of the Roll-on/Roll-off Facility 1.81 2.62 Coastal Protection Works Study 0.51 ---- Contingencies 9.13 TOTAL 46.09 50.40/a /a The increase in the actual project cost of about 9.3% was mainly due to additional work (about US$2.4 million) and to delay in project comple- tion (about US$2.0 million), (PCR, para 3.17). A.57. In addition to the Government, eight cofinancers (IDA, Norway, FAC, AfDB, CIDA, BADEA, Abu Dhabi Fund, and CCCE) would contribute to the project (SAR, paras. 3.23-3.24).6/ In June 1979 Abu Dhabi dropped out of the project financing scheme. IDA made arrangements to cover the financing shortfall through an EEC Special Action Credit which was approved on November 16, 1979. At the beg inning of 1980, it became obvious that the project would suffer a cost overrun. The March 19, 1980 Supervision mission report states that a cost overrun estimated at US$3.5 million should be anticipated. It would be due to delays in effectiveness and to the greatly increased cost for the construction of the cutoff breakwater caused by gross errors in the con- tract and tender documents. The need to cover the financing gap provoked 6/ PCR para 3.02: "Civil works were being financed by several agencies, each with its own general conditions and procurement and disbursement procedures, thereby forcing the division of work into six separate lots. This system should not he recommended except in case of absolute necessity." ANNEX 2 Page 8 meetinis in Paris among the Government, the Association and the cofinan- clers.'/ E. Project Implementation and Procurement A.58. The project would be implemented by the Ministry of Transport under the supervision of an ad hoc Commission, assisted by a Project Coordinator 7/ The summary of the Paris meeting (dated January 26, 1981), provoked a note (dated January 30, 1981) from the Bank's Ports Adviser to the Western Africa Regional Office: "It is suggested that IDA should consider supplementary financing under certain conditions. This would appear to make more money available to a group of consultants and contractors which have not been performing satisfactorily." Supervision Report (February 10, 1982): Cost overruns to be covered by BADEA, OPEC, and CIDA. - 35 - ANNEX 2 Page 9 and his Beninese counterpart (SAR, para. 3.27)8/ Procurement of civil works would be done by international competitive bidding, with the exception of Lot 2 (to be financed by CIDA in .parallel) and of Lot 5 (to be financed by CCCE in parallel), (SAR, para. 3.28). 8/ Supervision on the part of the Ministry appears to have been minimal. UNCTAD Mission Report (April 20, 1979): "Measures recommended by the UNCTAD task force have not been implemented and the principal explanation was they involved coordination between organizations under different ministries and administrative slowness can be blamed." Note to Files (August 27, 1979): "We sense an attitude of unawareness and apathy within the management which cannot he attributed to lack of training or inexperience." Supervision Mission kSeptember 12, 1979) "Port management was not able to provide the mission with recent pro- ductivity data. Port performance seems to have deteriorated since the departure of the UNCTAD experts. Arrears have increased considerably. When this was mentioned to the Chairman of the ad hoc Commission he said this was a national problem." Letter from Project Coordinator to Ad hoc Commission (2 November 1979) "The establishment of the general program for works construction is considerably delayed. It is evident that the pilot contractor is discharging his piloting duties in a manner which is not serious and which displays a degree of negligence." Letter from the Project Coordinator to IDA (November 6, 1979) "It is disgraceful that 6 months after the start of work no overall program exists." Supervision Mission (March 19, 1980): The Government needs to take action on several topics. An aide memoire was prepared by the Project Coordinator and the Mission to assist the ad hoc Commission in making these decisions. The Mission was strongly urged both by members of the ad hoc Commission and by officials of the Ministry of Transport not to undertake visits or interviews with government officials or with parapublic sector execu- tives which were needed to update the 1977 Transport sector memorandum. Reasons invoked for this opposition were that following the recent elections and appointment of a new Minister of Transport, the Ministry was in complete reorganization and the newly appointed executives of the Ministry of Transport were not yet in a position to communicate to foreign organizations (such as the Bank) clear and official views re- garding the future transport pclicy of the country." - 36 - ANNEX 2 Page 10 F. Economic Evaluation A.59. There were large general cargo traffic increases between 1975-1977 (SAR, para. 4.02). The major cause was Nigerian imports (SAR, para. 4.03). Dramatic imbalance between in-bound and out-bound traffic of general cargo at the port. In 1977, exports were only 9% of general cargo traffic as opposed to 36% in the early 1970's (SAR, para. 4.04). The economic evaluation of the project has been based on a Nigerian transit traffic of about 300,000 tons (SAR, para. 4.11). General cargo traffic is estimated to increase from 690,000 tons in 1977 to 978,000 tons in 1981 (SAR, para. 4.12 and Table 2, Annex 2). Total Benin general cargo traffic is projected to increase from 223,000 tons in 1977 to 287,000 tons in 1981 and 387,000 tons in 1986. Cor- responding figures for Niger traffic are 140,000, 271,000, and 371,000 (SAR, para. 3.14). Actual figures are considerably lower: GENERAL CARGO TRAFFIC/a 1972 1975 1977 1979 1982 Benin 262 196 242 326 405 Niger 106 134 114 62 177 (of which cereal imports) (30) (23) (120) Nigeria/I 21 94 326 6 17 Other -- -- -- 7 22 TOTAL 389 424 682 401 621 /a 1972 and 1975 figures from SAR (para 4.14). 1977-1982 figures from PCR (para. 5.08). /b PCR para 5.10: "Transit traffic for Nigeria was overestimated because the impact on the Nigerian economy of the reduction in oil revenue and resulting Nigerian austerity was not foreseeable. Still, the attractiveness of the Beninese Route for western Nigeria was overestimated, once the ahnormal port congestion in Lagos had been suppressed." A.60. The economic vate of return of the project has been calculated by comparing the cost of the proposed investments with the benefits which will - 37- ANNEX 2 Page 11 accrue to "captive traffic"", i.e., traffic which would use the port under any circumstances (SAR, para. 4.16).9/ Benefits are grouped as follows: (a) Benefits from the Extension of the Main Quay (Ship waiting time benefits; Ship service time benefits; handling and storage cost savings; benefits for Benin from avoidance of traffic diversion; and transport cost savings for Niger); (b) Dredging Savings, Additional Land Creation; and (c) Freight Savings (Clinker imports) (SAR, paras. 4.17-4.29).- Total project benefits are shown in SAR, Annex Table 3. A.61. The project would yield an ERR of 37% for the best estimate of traffic and costs (SAR, para. 4.33). For benin alone, the ERR would be about 25% (SAR, para. 4.34). In the event that the Nigerian traffic disap- appears altogether, the overall ERR would be 25% and the ERR for Benin alone 9/ The audit believes that most of the "captive traffic" was not captive at all: the ephemeral nature of the Nigerian usage of the port was known both to the Government and to IDA (See above Annex 1, paras 16 and 20). Supervision Report (September 12, 1979: "The establishment of traffic forecasts for Nigerian traffic was the subject of a prolonged dispute between IDA staff and the Government officials who, for political reasons, insisted on a four-berth project. The traffic forecasts finally adopted for the appraisal of the project represent a compromise between the very optimistic traffic forecasts the Government wanted to impose on the Appraisal Team and the more conserva- tive ones proposed by the Association." - 38 - ANNEX 2 Page 12 13%. But Nigerian traffic is unlikely to disappear (SAR, para. 4.38).10/ 10/ However, traffic declined steadily: Supervision Report (March 12, 1979: "The volume of general cargo traffic imported for Nigeria is falling, mainly due to import restrictions and reduced demand." UNCTAD Mission report (April 20, 1979): "There is now no congestion in the port. Traffic dropped off sharply towards the end of 1978 and this would have been sufficient to clear the congestion." Supervision Report (July 23, 1979): "Very obvious fall in traffic. Mission concerned about indications for the future." Supervision Report (September 12, 1979): "The volume of general cargo traffic has fallen and is causing concern for the justification of the project magnitude." In view of the above, the audit cannot accept the following counterfac- tual statement: President's Memo (dated October 24, 1979) on the EEC Special Action Credit: "With the growth of transit traffic for Niger and Nigeria, the port has been operating in recent years above its designed capacity, resulting in increased congestion and inefficient operations." All the same, traffic continued to decline: Supervision Report (March 19, 1980): "The mission was alarmed to see a considerable fall in the volume of break-bulk cargo." Supervision Report (Arpil 25, 1980): "The analysis of the 1979 traffic statistics confirms the steep decline in general cargo traffic, mainly transit traffic for both Nigeria and Niger. The Mission was very concerned about this decline since the pre- sent port expansion project has been designed to handle a very signifi- cant increase in transit traffic for these two coutries. From discus- sion, the Beninese officials are well aware of this unfavorable trend, and for the first time since the evaluation of the project they seem to have abandoned (at least temporarily) the idLA of going ahead with the construction of a fourth additional berth and a facility for Ro-Ro traf- fic. " Supervision Report (July 28, 1981): "PAC 1980 traffic was 37% below 1979 levels. The Ro-Ro ramp construc- tion is on and will he financed from other sources since IDA funds have run out." - 39 -ANNEX 2 Page 13 In actual fact, Nigerian traffic disappeared almost completely.11 G. Financial Evaluationl2/ 11/ PCR para 6.03: "Despite the disappearance of the Nigerian traffic and the less than ex- pected traffic to Niger, the project has a satisfactory 24.8% overall rate of return, comparable to the 25% rate estimated at appraisal, thanks to the temporary rental of 120 meters of berth for special pur- pose, which would substantially raise waiting costs for normal traffic in the "without" case. The economic justification of the rental deci- sion is not examined, as it resulted from Government decision of undertaking oil exploration and exploitation, and there is no alterna- tive site in Benin for survey boats berthing. The economic analysis of this decision should be made as part of the economic study of the oil exploration and exploitation project." 12/ The record illustrates the persistent problems faced by PAC: Project Coordinator to IDA (June 21, 1979): "The current financial situation is most disturbing." Supervision Report (July 23, 1979): "Mission very concerned with deterioration in PAC's finances.- Ta:iffs have not been revised. The balance of receivables has increased." Supervision Report (September 12, 1979): "PAC operating expenses have risen. Deterioration of the financial position. Arrears increased considerably." Supervision Report (March 19, 1980): "Tariffs not raised in 1979. Financial results lag behind appraisal. PAC decided in February 1980 to raise tariffs. A Commission has been established to clear up arrears." Supervision Report (March 10, 1981): "Preparation of accounts still slow. Financial results in FY80 negative. Receivables still high." Mission Report (October 14, 1981): From 1982 on, PAC will face a very critical financial situation. A financial salvage plan has to be prepared." ANNEX 2 Page 14 A.62. PAC accounts need improvement (SAR, para. 5.02) and asset revalua- tion is urgently needed (SAR, para. 5.12).13/ PAC receivables need to be reduced (SAR, para. 5.03).14/ PAC's audited income accounts for the last three fiscal years are misleading (SAR, para. 5.04).15/ PAC shows a limited 13/ Revaluation completed in FY80, with one year delay. Inclusion of project related assets carried out in FY81, with one year delay (PCR, para 7.11). 14/ The management of PAC's working capital ha. been the weakest point in its financial management. Trade debtors increased from CFAF 672 million in FY77 (10 months of revenue) up to CFAF 2,915 million in FY82 (13- months of revenue) though it was supposed to have been reduced to a nominal level by this date. The disappointing performance is due to (a) the absence of strong incentive to recover receivables, as PAC's cash situation is satisfactory despite increasing receivables and (b) the fact that most of the receivables come from the Government and parastatals, which are all in a difficult cash situation (PCR, para. 7.10). 15/ PCR para 7.12: "The port authority's accounts were to be audited annually by acceptable auditors. PAC's accounts were audited by a Government auditor for the years FY77 to 1980. The auditing standards adopted by the auditor did not comply with the Association's requirements, but until 1981, there was no local alternative, and the Government war reluctant to hire a foreign auditor at high cost, the audit not being financed under the project. For FY81 and FY82, PAC requested the Government auditor to audit its accounts, but he could not audit PAC's accounts on time, being too busy with other parastatal companies in critical situation. Therefore, PAC's accounts were approved by its Board unaudited." ANNEX 2 Page 15 generation of ersh from operations and this needs to be corrected through periodic tariff increases (SAR, para. 5.09). An annual rate of tariff increase of 10% appears adequate (SAR, para. 5.10).16/ The Government agreed that PAC would achieve a minimum rate of return-before income tax on net fixed assets in use, 4s revalued from time to time, of 5% in 1980 and 8% thereafter (SAR, para. 5.15).17/ The debt/equity ratio is acceptable but the Government agreed that PAC would not incur non-project capital expendi- tures exceeding CFAF 100 million per year until December 31, 1985, except in agreement with the Association (SAR, para. 5.20).18/ 16/ Tariff increases actually enforced were about 138% over the 1977-1982 period and thus exceeded by far the adjustments requested initially by the Association. Cash generation increased by 349% between 1977 and 1982 and working expenses increased by 136% over the same five years (PCR, paras. 7.06-7.07). 17/ This target has not been met. The actual rate is 2.4% in 1982 and there is little possibility for meeting the targeted 8% given the low traffic volumes (PCR, para. 7.13). 18/ PAC's total debt service has increased up to CFAF 1,108 million in FY1982, as compared to a forecast of CFAF 425 million. The difference is due to the purchase of a mobile crane, to the acquisition of a new tugboat and to the repair of an old one, and to the extension of the freight terminal in Parakou, financed (for unknown reasons) by PAC on behalf of OCBN. The Association feels that the crane purchase was unjustified and that PAC is wrong in not charging OCBN for the interest or reimbursement of the amount spent on the Parakou terminal (PCR, paras. 7.08-7.09). 〞’烽州才‘夕＇&5夕州 一‘江沙’- - 43 - BENIN COTONOU PORT PROJECT PROJECT COKPLETION REPORT I. INTRODUCTION 1.01 Cotonou is the only deep-water port in Benin. It has been tra- ditionally a gateway to the sea for landlocked countries (Niger, and to a lesser extent, Upper Volta and Mali), and a subsidiary port for handling peak traffic to and from neighboring Nigeria# This transit activity, although highly profitable for Benin and, representing about 35% of the 1.13 million tons of port traffic in FY1982, made Cotonou Port traffic dependent to a large degree on the economic situation and policy of neighboring countries. The major event in this respect since project appraisal was the unexpected disappearance of oil transhipment and tran- sit traffic from Nigeria, following Lagos Port extension in 1978-1980. Other transit traffic has been reasonably stable. 1.02 Due to its location, Cotonou Port is subject, for its transit traffic, to the competition of the neighboring ports of Lome, Togo (120 km to the west) and Lagos, Nigeria (100 km to the east). The key factors in this competition process are the efficiency of port operations and inland transport, and to a lesser extent, the comparative cost of serv- ices. Lome has an edge for the quality of aervices, but Cotonou can compete successfully for port and transport costs. 1-03 Cotonou Port is only one link in the tzansport chain including cargo handling, forwarding activicies, rail transport and trucking. The complete transportation process is fully controlled by the Government, through public firm monopolies (for the port, cargo handling and rail transport) or through sector regulation (for forwarding activities and trucking). At present, the Goverment is considering the means to im- prove coordination between the intervening parties in the transport chain, and to deregulate forwarding activities and land transport. 1.04 The Port was designed in 1957 by a French consulting firm. Construction started in 1959 and was completed in 1965. The same consul- tants prepared a master plan in 1975 for the expansion of the Port; the plan was used as the basis for this project. The port facilities include a 640 m deep-water berth for general cargo, four transit sheds, open storage area and a small fishing basin. The project, which is the first Bank Group operation in the ports subsector in Benin, was mainly for the purpose of constructing a new basin and a 660 m deep-water berth. - 44 - 1.05 Cotonou Port is managed and operated by the Port Autonome de Cotonou (PAC), an autonomous public enterprise under the Ministry of Equipment and Transport. All cargo handling and stevedoring operations are the respon- sibility of another government agency, the Office B&ninois de Manutention Portuaire (OBEMAP). Two important decisions contributed to the success of the project (Annex 9-1): (a) the creation of an ad hoc commission chaired by the Minister of Planning to take quick and effective decisions on major issues regarding project implementation; and (b) the employment of a Proiect Coordinator iointlv financed by UNDP and IDA (78% and 22%, respectively. Nevertheless two other decisions contributed to the difficulties encoantered duriag project implementation: (a) the division of civil works into six lots execuied by several contractors and financed by several financiers; and (b) supervision of work bix consultants other than those who prepared ard designed the prolect. 1.06 This report is based on: (a) data available in Bank files; (b) a final report prepared by the Project Coordinator in late 1981; and (c) findings of a supervision (completion) mission which visited Benin in July 1983. PAC considers the Project Coordinator's final report as its own Completion Report; the report was supplemented by additional up-to- date data provided by PAC to the completion mission. II. PROJECT PREPARATION AND APPRAISAL 2.01 In 1975, the Government of the People's Republic of Benin re- quested IDA's assistance in financing a high priority port project invol- ving mainly the expansion of Cotonou Port. The project was based on: (a) a master plan study carried out by a firm of consultants (France) in 1975; (b) an economic analysis and tender documents for the first phase of the master plan, prepared by the same consultants in 1977; and (c) the findings of an appraisal mission in October 1977. 2.02 The objectives of the project were: (a) to provide additional capacity at Cotonou Port to deal with what seemed to be, at the time of project appraisal, a rapidly increasing traffic; and (b) to improve the operational and financial performance of PAC, OBEMAP and OCBN. 2.03 Negotiations for the initial credit took place in May 1978, Board presentation in June 1978 and credit effectiveness in October 1979, one year after credit signature. IDA provided a credit of US$11 million equivalent to the Government to cover 24% of the total project cost esti- mated during appraisal at US$46.1 million equivalent. The balance of US$35.1 million was to be financed by the Gevernment and other cofinan- ciers. On July 10, 1978 the Board approved on a no objection basis that the credit be increased to US$19.3 million to include Norway's partici- pation in parts A and D of the project, instead of being a separate grant from Norway to Benin. The Norwegian Aid Participation Agreement was signed on October 6, 1978 and became effective with the initial credit. An EEC Special Action Credit for US$3 milliDn for part F of the project was approved by the Board on a no objection basis on November 10, 1979, - 45 - to compensate for Abu Dhabi Fund's withdrawal. It was signed on November 16, 1979 and declared effective on July 31, 1980. III. PROJECT DESCRIPTION, IMPLEMENTATION AND COST A. Project Description 3.01 The project consisted of the following: Civil Engineering Works: (a) Construction of a 660 m deep-water berth with ll.Om of water alongside (at LWOST 1/) for general cargo traffic, and a roll-on/roll-off ramp for roro traffic (Lot 1); (b) Dredging of the port's entrance channel, and a new basin serving the above mentioned berth, and reclamation of land behind said berth as well as land protecting the new basin against sea action (Lot 2); (c) Removal of 320 m of the western breakwater to provide entrance to the new basin, and construction of a new cut- off breakwater (EPI) to protect the entrance channel against siltation (Lot 3); (d) Support facilities including paving, roads, railway track, customs fence, drainage, water supply and a weighbridge (Lot 4); (e) Construction of two transit sheds 120 m x 50 m each (Lot 5); and (f) Electrical works including floodlights and spotlights (Lot 6). Technical Assistance (a) For PAC to: (i) assist management in port operations and control; (ii) reorganize the accounting, tariff and cost- ing system; (iii) implement a maintenance program for the port facilities; (iv) set up training programs for techni- cians, mechanios, pilots, tug masters, and equipment oper- ators; and (v) study and design a facility in order to prevent coastal erosion east of Cotonou Port. (b) For OBEMAP to: (i) develop training programs for steve- dores; (ii) select and recruit candidates to fill the 1/ Low Water Ordinary Spring Tide. Tidal range is 1.2 m. - 46 - vacant positions of assistant chief stevedores, berth superintendents, transit shed supervisors, and berth gang foremen; (iii) set up a program of equipment maintenance and renewal; and (iv) reorganize the accounting, tariff and uosting system. (c) For 0CBN to: (i) improve in management, operations, and training ; (ii) design a new layout for the railway termi- nal at Parakou and recommend and implement improvement in operations, including staff training, at this terminal; (iii) review traffic forecasts for the years 1978-1988 and determine the investments needed to cope with the expected demand; and (iv) study and design a new tariff stacture for rail traffic between Cotonou and Parakou and for road traffic between Parakou and Niger. B. Project Implementation Civil Engineering Works 3.02 Civil works were being financed by several agencies, each with its own general conditions and procurement and disbursement procedures, thereby forcing the division of work into six separate lots. This system should not be recommended except in case of absolute necessity. During implementation of the project, major difficulties were encountered in planning and executing works and, when one lot delayed the work of other lots, PAC was left to bear the financial consequences. The creation of an ad hoc commission and the employment qf supervision consultants, Proj- ect Coordinator, and a Pilot Contractor! alleviated, albeit not enti- rely, the difficulties and solved the resulting problems in due time. 3.03 The call for tenders was made in November 1977 and tenders were received in April 1978 for all lots. The offers received for Lot 2 were disregarded because it became known later that this lot would be financed and administered by the Canadian Government and would be open only to Canadian contractors. Final contract preparation proceeded through the remainder of 1978. Contracts for Lots 1, 3, 4, and 5 and for the supervision of construction were signed in January 1979; constructicn started in April 1979. New tenders were received for Lot 2 in September 1978 and the contract was signed in May 1979. The delay in awarding the contract for Lot 2, which should have started three months ahead of other lots, created certain problems with respect to the implementation sche- dule. Contract for Lot 6 was signed in early 1980. 3.04 Information on bids received and contracts awarded is given in Annex 3-1. It is interesting to note that the highest bids were almost 1/ Contractor for Lot 1 was appointed as "Pilot" to coordinate the work of all contractors and submit a monthly report to the supervision consultants. - 47 - double the lowest bids. Lots 1 and 5 were awarded to a French firm, Lot 2 to a Canadian firm using a Dutch subcontractor, Lots 3 and 4 to a joint venture of a Dutch and a French firm, and lot 6 to a Dutch firm. All contractors, except for Lot 2, used local subcontractors. 3.05 The following table compares the actual dates of start and com- pletion of each lot with the dates as set in the Appraisal Report: Dates of start and completion of works, by lot: appraisal and actual Appraisal Actual Start Completion Start Completion Lot 1 07/1979 07/1980 02/1979 10/1980 Lot 2 12/1978 08/1980 07/1979 11/1981 Lot 3 12/1978 01/1980 04/1979 02/1981 Lot 4 08/1979 07/1980 05/1979 12/1981 Lot 5 10/1979 07/1980 04/1980 10/1981 Lot 6 12/1979 07/1980 04/1980 04/1982 Sources: SAR and Consultant reports. 3.06 Pursuant to the Credit Agreement, PAC, the agency responsible for project execution, was to be assisted by consultants and a Project Coordinator acceptable to the Association. PAC employed a Canadian con- sulting firm and a British Project Coordinator. The employment of the Project Coordinator proved to be a wise decision that contributed enorm- ously to the success of project implementation and enabled the financing agencies to follow-up expediously and advise on main events. Construc- tion encountered certain difficulties as is normally the case during execution of port projects of this type and magnitude; however, all prob- lems were adequately resolved and the project was successfully imple- mented. At the start of the project, PAC had some difficulties as regards the recruitment and retention of qualified eng4neers, but sub- sequently it was able to resolve them and the group of young but compe- tent engineers trained under the project now constitutes the core of its management, planning and maintenance force. 3.07 All problems encountered during project implementation were resolved without adverse effect on the project's technical standards. The main problems were: (a) Disbursement: A long delay occurred at the start in achieving the effectiveness of the IDA Credit, due, inter- alia to the required cross-effectiveness with numerous co- donors. The financing package presented particular diffi- culty in that it was composed of various sums in various currencies, each independently subject to exchange fluctu- ation. Hence it was impossible to estimate accurately the - 48 - remaining balance without knowing the unexpended sums in each currency. (b) Lot 3: This lot comprised: (i) the removal of a part of the western breakwater; the opening thus created would form the entrance to the new basin; and (ii) the use of rocks removed to build a cut-off breakwater (epi) to arrest the transport of sand along the shore. Work started in April 1979, and soon after, during the removal of the breakwater, it was found that actual quantities of certain categories of rock differed considerably from those indicated in the contracted bill of quantities: Actual/contracted quantities of rocks Category of Rock Bill of Quantities Actual 10 to 500 kg 70% 50% 500 to 4,000 kg 11% 30% 4,000 to 6,000 kg 19% 20% Source: Consultant's report. In addition, the contractor encountered 553 pieces of rock each over 6,000 kg, with a maximum weight of 22,000 kg. This size of rock was not envisaged nor accounted for in the bill of quantities. The result was: (i) delays while the contractor acquired a larger crane; and (ii) changes in the composition of the out-off breakwater in order to build it using the materials recovered from the demolished breakwater. Fortunately, the cut-off breakwater as now built may well be more resistant to wave action than if rocks specified in the drawings and the bill of quantities had been used. (a) Late in 1980, an IDA supervision mission noticed that the construction of the cut-off breakwater was carried out without due consideration to adequate technical stand- ards. At the Association's recommendation, the super- vision consultants employed an engineer experienced in breakwater construction in December 1980 to personally direct the construction of the remaining sections, in particular the breakwater-head which is the most vulne- rable part. The result was a sound breakwater that has adequately resisted rough seas for the past three years. (d) Lot 2: This lot comprised: (i) maintenance dredging to the existing port and its entrance: (ii) dredging and forma- tion of a sand trap at the port entrance; and (iii) dred- ging of the new basin to -11m. Parts (i) and (ii) were carried out without major incident. Part (iii) was - 49 - originally scheduled to start once an entrance to the new basin had been cleared by Lot 3. The entrance was ready in February 1981, however, dredging did not start until May 31, 1981 mainly because the dredger intended for use in Cotonon sunk in Nigerian waters in November 1980. Between June and September 1981 about 1.7 million m of dredged sand was discharged in the sea at a point opposite the southwest corner of the new basin to form a 120 m berm providing protection to the basin against sea action. In addition, about 450,000 m3 of dredged sand was pumped through a 6 km pipeline to reclaim land in a swampy area on the outskirts of Cotonou. In order to pump a suffi- cient quantity of sand, it was decided to dredge the new basin and parts of the harbor to about -15m. This depth, although not needed for the size of ships using the Port, would result in reducing maintenance dredging in the years to come. The Dutch dredging contractor had encroached upon the south slope of the new basin in two locations c..eating artificially flat slopes and indentations in the shore line. In addition, in spite of explicit written instructions from the Ad Hoc Commission, the dredging con- tractor dredged well below the safe level at a point in front of the old quay wall and created a cavity in its steel sheet piling. This excessive dredging resulted in several hundred cubic meters of sand filling flowing into the harbor, leaving the quayside rail track and a 50t bollard suspended in the air, and causing fractures of the main surface water drain, the water supply line and the cable duct, and thus disrupting traffic along the quay apron for about five months. The damage was later re- paired by the dredging contractor at his own expense. 3.08 As expected in a port project of this type and magnitude, several minor changes were introduced during construction to ensure the best achievable technical standards. Two major changes were introduced as follows, both contributing to cost savings: (a) It had been originally foreseen that the sand filling required to create the open storage area behind the new quay wall (Lot 1) would be provided by dredging the sand trap and the access channel (Lot 2). However it was dis- covered in late 1978 that this work would have been im- practical because the extension of a floating pipeline across the harbor from these two sites to the area to be reclaimed would hinder traffic of ships entering and leav- ing the Port. In addition, it had always been known that firstly the material to be extracted from these sites was insufficient, and secondly unsuitable being largely clay and silt. Seventy-five percent of the required filling was thus obtained (as part of Lot 2) by dredging to -18m a silt-free area within the harbor near, but at a safe dis- tance from, the western breakwater. The remaining 25% was - 50 - provided by truck under an amendment to the contract for Lot 4. This process resulted in: (a) the latter quantity being financed by IDA and Norway instead of by CIDA as originally anticipated; YI and (b) a delay of about 15 months in completing the filling resulting in about a three-month delay to Lots 4, 5 and 6. (b) In October 1980 the Association proposed: (a) constructing a roll-on/roll-off platform at the western end of the new berth instead of the construction of a stone protection to retain the sand filling; and (b) changing the shape of the new basin from 300m wide at the entrance and 250m wide at the western end, to a constant width of 200m. At a series of meetings held in Paris in January 1981, the Ad Hoc Commission took the decision to adopt the above- mentioned proposal and instructed the contractor for Lot 3 to halt the demolition of the old breakwater. At that date the width of the created opening reached 235m. The basin was thereafter dredged to a constant width of 200m. Fortunately the above decision was taken at the right moment to ensure the maximum benefits of the Asso- ciation's proposal. These benefits include: (i) savings in cost of additional demolition of break- water and additional dredging; (ii) greater margin of security for the seaward pro- tection to the new basin especially at the most vulnerable southwest corner; (iii) increase in the effective life of the cut-off breakwater as a result of the reduction in the volume of sand required for the basin protection; (iv) additional area of land to be available in future to the south of the new basin; (v) availability of a roll-on/roll-off platform which has been effectively used since its completion; and (vi) additional possibilities for future port expansion by constructing a second basin to the south of the new one. Technical Assistance 3.09 Technical assistance was initially designed as a single contract for consulting services and training, for about 140 man-months, to PAC, OBERAP, and subsidiarily OCBN. At the request of the Ad Hoc Commission, the contract was split in two with the Association's concurrence: one contract for technical assistance for management and operation, and one 1/ The Borrower notes that IDA prefinanced and CIDA repaid the amount (Appendix 3, para. 2.2). - 51 - for training and personnel administration. This split, by subject of intervention, rather than by technical sectors in the firm, is not advis- able, as it requires a permanent coordination between intervening con- sulting firms. Contracts 3.10 The initial contracts and revised contents are described in Annex 3-2. The increase in US dollars exchange rate during project exe- cution permitted expansion of the consultants' mission without cost over- run, following additional needs identified during project execution. The execution schedule was extended by six months for training and by twenty months including complementary actions for the technical assistance con- tract. The revised schedules were the result of contractual amendments which appeared necessary after four months of execution of the initial contract, when it was realized that the duration of time spent in Benin by the experts for the success of on-the-job training and technological transfer was a key element, even if a narrower field was to be covered. Additional needs were identified during project execution, with regard to institutional reorganization of transit traffic, training for upper level managers, most of whom had good initial training, but needed specialized training in port management and operation, and with regard to management information system development. These needs were covered through exten- sions to the initial contracts of consultants. Execution 3.11 The execution of training consultant contract proceeded without problem, except that coordination with technical assistance consultant was difficult at the beginning and required several interventions from the Ad Hoc Commission. The Technical Assistance Consultant's mission had a difficult start, and the mission leader was replaced at the request of the Ad Hoc Commission. As a consequence, about three months of interven- tion were lost. The replacement mission leader put the intervention back on the right track. The objectives of technical assistance consultant's mission in OCBN were to: (a) establish a cost accounting system; (b) revise the tariff struc- ture for simplification and so that tariffs eover at least the marginal cost for each category of traffic; and (c) establish the statistical system for operations. These objectives were not adequate. In addition, OCBN requested an extension of the consultant's contract for improving the organization of railway operation. The railway component of the mission proceeded without problems from the beginning. Achievements 3.12 The technical assistance component was successful, thanks to: (a) the close scrutiny of the Ad Hoc Commission over the selection or replacement of experts; (b) the availability in Benin of young profes- sionals, with a good background education, receiving a competitive salary in para-statals; (c) the stability of most of the key people in their job - 52 - for the duration of the project; (d) the adoption of a target system for managing technical assistance (Annex 9-2); (e) the designation of a very efficient Project Coordinator on the Benin side; and (f) the periodic assessment of achievements between the consultants, the Ad Hoe Commission and the Association, leading to amendment of the original technical assistance program, with reserve funds available for financing unexpected emergency needs. 3.13 The main achievements of the technical assistance component in the port sector were: (a) to create in PAC and OBEMAP a body of competent managers and technicians, with a strong "esprit de corps;" (Annex 9-3) (b) to provide both institutions with a modest but effective management information system (still to be further improved), and corporate planning system; (c) to establish in PAC and OBEMAP a basic permanent training program for workers, despite the fact that project achievements regard- ing training were not as good as expected initially (Annex 9-4 and para. 4.06); and (d) to raise substantially operational productivity in PAC and OBENAP (para. 5.12). 3.14 In OCBN, the consultant produced a very detailed analysis of the operational situation of the railway. From this diagram, he designed and implemented: (a) a system for improving and controlling rotation of roll- ing stock, which is now effective; (b) recommendation for improving rail- way operations, which was effective for controlling and reducing general expenses, fuel consumption and staff costs by an estimated CPAF 600 mil- lion in FY1981 (Annex 7*5, footnote (a)); (c) a cost accounting system for tariff setting purpose, utilized for commercial purpose rather than for management; and (d) a new and simplified tariff system. The consult- ant's efforts produced some in-orovements in railway management and savings in railway operation. However, the difficult economic and political context for the railway cause railway's finances to still be critical (para. 7.24), and its future is still uncertain. C. Project Costs, Financing and Disbursement Project Costs 3.15 The project was estimated at appraisal to cost US$46.09 million equivalent (CFAF 11,293.2 million at a rate of exchange of US$1.0 CPAF 245). The actual project cost is US$50.4 million equivalent (CPAF 12,132.2 million at an average rate of exchange of US$1.0 - CFAF 241) including: (a) US$1.13 million for the construction of a roll- on/roll-off platform which was not included in the original cost estimate; (b) US$0.4 million for a Project Coordinator, also not included in the original cost estimate; (c) an increase in the cost of supervision (from 4.8% of estimated cost of civil works to 7.5% of actual cost) and (d) minor complementary technical assistance and equipment procurement to be carried out before the closing date of December 31, 1983, totaling about US$0.51 million equivalent. Hence, there was a cost overrun of US$4.32 million, financed as indicated in para 3.18. - 53 - 3.16 The following table compares the project appraisal estimate with actual project cost. Details are given in Annex 3-3. Actual/appraisal project costs, by project component US$ million equivalent Appraisal Actual Project Component Local Foreign Total Local Foreign Total A. Project Preparation 0.03 0.66 0.69 - 0.61 0.61 B. Civil Works 10.23 30.54 40.77 14.39 29.50 43.89 C. Supervision 0.79 1.18 1.97 0.96 2.32 3.28 D. Tech. Assist. and Studies 0.95 1.71 2.66 0.57 2.05 2.62 Total 12.00 34.09 46.09 15.92 34.48 50.40 Sources: SAR, and Final Report, Project Coordinator (Ref. 6). 3.17 The November 1977 appraisal estimate was based on a rate of exchange of US$1.00 = OFAF 245, however, during project implementation the rate of exchange declined to US$1.00 = CFAF 213.38 in 1979, after which it started to increase until it reached US$1.00 CFAF 355.89 in 1983. The actual project cost is based on actual rates of exchange on the dates of payment. The increase in actual project cost of about 9.3% was mainly due to: (a) additional work (about US$2.4 million); and (b) delay in project completion (about US$2.0 million). Fluctuation in the value of the US dollar did not significantly affect the total project cost since the average actual rate of exchange was about the same as the appraisal estimate. Project Financing 3.18 The financing plan envisaged during appraisal represented US$46.09 million equivalent. The financing plan as outlined in the Appraisal Report was as follows: - 54 - ?ianciM Pman as in Appial Report (Us MiLlion) leamical Tbtal lV Lot 2: Lot 3: lot 4: Lot 6: ap e ast. Caestal co-flutjere Lot 1: dredging, bwak- shore lot 5: electri- visian and protecon Goveramt Oaiton PPF bertm filling meters woAk dioe cal vorks work trainiM l and-PAC ID 0.50 5.50 1.00 1.70 1.79 0.51 11.00 Nomy 2.50 5.80 8.3D Abu Uhm FPmd 2.62 2.62 BAWA 0.10 4.50 4.60 CI 10.00 10.00 00ES 3.12 3.12 VIC 1.50 1.9D AfDB 2.94 2.94 Goverment 0.32 0.09 0.41 PAC 0.60 0.70 0.30 1.60 Total 13.04 10.00 5.20 3.12 2 2.00 2.11 W a Later Abu Mabi Fumd declined partcipatim and Lot 6 was finanoed jointly tyEM Special Actio Accmat. 3.19 The actual financing plan totaling US$50.4 million equivalent, as compared with the original plan is given in Annex 3-4. The following changes were made in the plan during project implement- ation: (a) Abu Dhabi Fund, originally envisaged to finance Lot 6, withdrew from participating in the project. Lot 6 was thus financed by EEC Special Action Account contributing US$3.00 million equivalent (US$0.38 million more than Abu Dhabi Fund's proposed contribution; (b) BADEA agreed in July 1981 to*increase its original contri- bution of US$4.6 million equivalent by US$2.7 million equivalent to cover the cost overrun for Lot 3;. (c) CIDA reduced its contribution from US$10 million equi- valent to US$6.73 million, which covered the actual total cost of Lot 2; and (d) OPEC Fund, although not a participant in the original financing plan, provided US$2.25 million equivalent in August 1981 and US$2.25 million equivalent in April 1983. These funds (US$4.5 million equivalent) were used to finance the construction of the roll-on/roll-off platform as well as the financing gap for Lots 1, 4 and 6. 3.20 The actual financing plan covered exactly the actual total proj- nct cost of US$50.4 million equivalent. Thanks to the Government's - 55 - extensive and successful efforts, supported by the Association, the financing gap of US$4.31 million was covered by BADEA and the OPEC Fund in due time. Disbursements 3.21 Disbursements on the credits, loans and grants were always behind schedule. Although the Credit Agreement was signed on October 6, 1978, the Credit became effective only on October 19, 1979 due mainly to Government delays in fulfilling the conditions of effectiveness. Cons- truction started in April 1979, six months before the Credit became ef- fective. As regards the Association's credit, disbursements lagged about 12 months behind the appraisal estimate. Fortunately none of the con- tractors on the project were compelled to stop work. The first disburse- ment was actually made one year late. It was also estimated that the entire Credit of 11.0 million equivalent would be disbursed by March 31, 1981. Actual disbursement on that date amounted to US$9.83 million. As of March 15, 1984 there are still US$0.29 million undisbursed from the IDA Credit and US$26,890 from the Norway Grant; the EEC Credit has been fully disbursed. The actual and estimated disbursements are given in Annex 3-5. Performance of Consultants and Contractors 3.22 The project was prepared by a French consultant. According to the tender documents, the detailed designs were in general left to the contractors. There is no doubt that the preferable practice is for the consultants responsible for project preparation to produce all drawings in sufficient detail to avoid problems during construction. The dis- advantages inherent in the system adopted under the project included: (a) The relevant quantities as set in the bill of quantities were estimated and not calculated with occasional under- estimation of work required. (b) The requirement for contractors to produce detailed de- signs necessitated that each contractor include in his staff on site the personnel required for the calculations and preparation of drawings. (c) In several cases, the design prepared by the contractors and the consultants' views did not agree, resulting in delays in construction and additional cost to the Govern- ment. 3.23 The decision to employ a consultant for construction supervision different from the consultant responsible for project preparation was taken by the Government during 1978. It is evident that the arrangements for the hand-over from one consultant to the other were inadequate and there was a lack of communication during the important period before the signing of the contracts. This lack of communication is demonstrated by the fact that, for more than one month after the contracts with the - 56 - contractors and the supervision consultant were signed, the latter was still unaware that the contractor for Lot I had been designated "Pilot of Works." Due to this lack of advance knowledge, sufficient attention was not paid to planning of works in the early months. 3.24 The design and quantity estimates produced by the consultant responsible for project preparation were, in certain cases, amended. These amendments included: (a) modification in the layout of the new basin (para. 3.08(b)); and (b) differences between the bill of quantities and the actual quantities, in particular for the breakwater under Lot 3 (para. 3.07(b)). 3.25 At the early stages of construction, the supervision consult- ants' project manager was replaced at the Government's request. Since then, the supervision consultants' staff have effectively carried out their assigned responsibilities. 3.26 Except for dredging (para. 3.07(d)), the performance of the contractors, led to satisfactory job completion. Delays in completion of each lot as compared to the appraisal estimate (para. 3.05) were mainly due to: (a) delays in start of work, except for Lots 1 and 4; (b) delays in one lot affecting work on other lots, especially in the case of Lots 5 and 6; (c) insufficient time originally allocated to some lots, espe- cially for Lot 1; and (d) delay in awarding the contract for Lot 2. IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT 4.01 Under the project, sizeable institutional improvements were achieved, both at Government level, and in PAC and OBEMAP. The initial project targets, which included improving aicounting systems, training for lower level staff, reorganizing port operations and cargo handling, anQ implementing a maintenance program in PAC and OBEMAP, were exceeded. A. Creating an Interministerial Committee for Transit Traffic 4.02 The project wab instrumental in the establishment of an ad hoc committee for managing the port extension project (para. 3.02). This committee was adequately designed and, being chaired by the Minister of Economy and Planning, was very effective (Anney 9-1). After 1981, when most of the physical components of the project were completed, the com- mittee focussed on the still ongoing technical assistance components of the project, dealing among other things, with the means to improve tran- sit traffic, through better coordination and a problem-solving approach involving several Government agencies (Ministry of Equipment and Transport (MET), Ministry of Finance, Ministry of Economy and - 57 - Planning). In the process, the need emerged for a permanent institution with similar responsibilities. For this reason, the Government issued a decree in February 1983, creating an interministerial committee for tran- sit traffic, with an executive technical commission. One of the first recommendations of the Committee, now effective, was to put all operators in transit traffic under the sole authority of NET. It has also commis- sioned a study, financed by the Association, on institutional changes to be brought to improve transit traffic; the study was completed by March 1984. B. Modernizing PAC and OBEMAP Organization and Management Systems 4.03 As a result of consultants' work financed under the project, PAC and OBEMAP had considerably strengthened their organizations by November 1982 and adopted a staff and line organizatioual zaructure (Annexes 4-1 and 4-2). In particular, a Directorate of Finance, directly under the Director General, was created in OBEMAP, and upgraded in PAC; Manpower Planning and Training Divisions were created in both firms, as well as Budgeting and Managemant Control Units; in PAC, the Directorate of Port .4aintenance was strengthened as well as the Directorate of Studies. In OBEMAP, cargo handling and storage were reorganized for better coordination between stevedores, longshoremen, and equipment operators at each berth (Annex 4-2). All newly designed positions were manned with qualified nationals, after adequate training, assisted by experts for about one year (Annex 9-3). 4.04 PAC and OBEMAP management information systems were improved through the establishment of cost accounting and budgetinb systems. Operational statistics for port operation and maintenance and for the Commercial Department were greatly improved in PAC, and to a lesser extent, in OBEMAP. Also, a personnel management and filing system has been established and is now functionning satisfactorily. These new sys- tems, which were still experimental in 1982, became fully operational in 1983. In order to speed up the processing of managerial information processing, PAC has requested that the Association finance a micro- computer with the necessary software and technical assistance, out of the remaining funds available for institution building. Inasmuch as PAC had demonstrated its commitment for improving management, the completion mission approved this request. 4.05 However, PAC and OBEMAP's managerial systems can be further improved, regarding operational statistics, accounting, and management by objective. These targets could not be fully achieved under the project, because the absorptive capacity of both firms is limited, and changes must be introduced gradually to permit PAC and OBEMAP to select and appoint staff with good potential, and to permit a progressive adaptation to the new managerial systems. 4.06 The project financed the preparation of training curricula for workers in PAC and OBEMAP, and the preparation of a complete training - 58 - program, which became effective in FY1983. In consideration of the com- plementarity between PAC's and OBEMAP's needs, these agencies uecided to conduct joint training sessions. Tn addition to on-the-job training delivered by experts in port operations and cargo handling, about 200 workers in PAC and OBEMAP received formal training in FY1983. The effects of training were felt on port operations (see para. 5.12), but training programs should now be extended to administrative tasks and equipment maintenance. Also, it must be noted that after a difficult start following departure of the technical assistance, PAC's training units for in-house training has reorganized itself and commenced oper- ating adequately in 1984. OBEMAP's performance in this respect has been disappointing (Annex 9-4). Training for upper-level staff was coordinated with the reorganization or creation of major departments and was applied successfully to the Directorate of Finance and the Department of Manpower Planning and Training in PAC and OBEMAP, in the Directorates of Mainte- nance and of Studies in PAC, in the Directorate of Cargo Handling and tLe Claim Department in OBEMAP. The establishment of a direct link between training abroad, which is perceived very positively by trainees, and thm simultaneous modification of job descriptions was a determining factor in the success of this training component of the project. V. TRAFFIC AND OPERATIONS A. Past Traffic and Productivity Traffic 5.01 Cotonou port traffic is comprised of imports and exports of Benin (68% of total in FY1982), Niger (28% of total in FY1982), Nigeria (1% of total in FY1982) and Togo, Mali and Upper Volta (3% of total in 1982). Port traffic was unstable in the past, because Malian and Voltaic traffic, but most of all Nigerian traffic, were highly erratic (Annexes 5-1 and 5-2), with Nigerian traffic ranging from 0 to 42% of trafftc in 1979, and Malian and Voltaic traffic from 0 to 3%. 5.02 The recent traffic trend was a progressive slow down of traffic increases following the 1973 oil crisis, with the superposition of a boom in Nigerian imports between 1975 and 1979, resulting from the temporary Lagos port congestion. The pre-1973 rapid traffic increase 5.03 Prior to the 1973 oil crisis, Benin and Niger international trades were strongly supported by international economic growth. Hence, Cotonou port traffic increased at an average 10% per annum. Benin and Niger trade had similar growth rates; Nigeria's traffic was non-existent. The 1973-1975 slowdown 5.04 Average traffic growth rate dropped to 3.5% per annum, due to a general slowdown of imports. This decline was, however, more severely felt in Benin, where domestic traffic decreased by ai average 2%, than in - 59 - Niger, where foreign trade still increased by an average 7.2% per annum, because of: (a) sizeable revenues from uranium exports which increased by an average 44% per annum; (b) corresponding rapid increase in imports of inputs for uranium mines (sulphur and oil); and (c) high food imports due to severe draught in the Sahelian region. Imports for Nigeria were still limited in FY1975. The temporary boom in Nigerian imports: 1975-1979 5.05 Whilq the Beninese traffic increase was larger than during the rrevious period (+ 4.4% per annum), and traffic to and from Niger was stagnant, imports for Nigeria increased ten times, from 68,000 tons in FY1975 to 633,530 tons in FY1979. This spectacular increase was due to the rise of Nigeria oil. revenue, from 2 billion Naira in FY1973 to 7 bil- lion Naira in 1977. This revenue increase induced a boom in Nigeria's imports, from 5.3 million tons in FY1973 to 15.6 million tons in FY1979. most of the traffic increase was absorbed by Nigerian ports, but as ship- waiting time increased up to 180 days in 1975, some of the Nigerian traf- fic overflow was diverted through the neighboring port of Cotonou. Sirultaneously, the Nigerian Government undertook a crash construction program for increasing Lagos port capacity, such as the "instant harbor" of Tin Can Island. These efforts were felt in 1978, when ship-waiting time in Lagos was reduced from about 200 days to 30. In addition, Nigeria's financial difficulties from FY1978 onward, when oil revenues dropped sharply, ensured that strict import restrictions were enforced, with the effect of eliminating Nigeria port congestion, and suppressing traffic overflow to Cotonou. 5.06 At the time of the project preparation (1976-77) it was under- stood that traffic congestion in Nigeria was a temporary phenomenon, but the country's present economic and financial crisis was not foreseen. Therefore, (a) the projected peak level in FY1981 was overestimated at 320 thousand tons of general cargo (the actual peak was 213 thousand tons of general cargo in FY1977); (b) the temporary utilization of Cotonou for oil transhipment in FY1978 and FY1979 for up to 628 thousand tons was not foreseen, and (c) it was believed that after the FY1977 peak, imports for Nigeria would gradually decrease and stabilize at 270 thousand tons from FY1985 onward, while actually the Nigerian traffic completely disappeared in FY1980. The 1980-1982 modest resumption of traffic growth 5.07 After the sharp traffic decline due to the economic crisis in Nigeria, port traffic resumed at a sizeable average increase of 9% per annum, due mainly to the increase in Niger imports of food products and cereals through Cotonou, while other imports were stagnating. The Beni- nese traffic increase, on the other hand, was only 2.7% per annum, because of slow national economic development. SAR traffic projections compared to actual traffic increases 5.08 Actual port traffic as of FY1982 is on the average 35% below SAR projections. This difference is attributable to an overestimation of: - 60 - (a) Niger mining activities; (b) the production capacity of the Cotonou cement plant; and mainly, (c) Nigeria imports of general cargo through Cotonou (see following table). Ootanou Port: Actual Traffic as ompared to 1977 projeetions, 1977-19B2 _I (in tbousand tons) Peroentage 1977 1979 1982 Actual/Projected Actual Projected Actual Projected Actual Projected in 1982 Oil imports 190 190 789 239 229 296 77 Bulk Clinker (Bnin) 170 170 256 400 248 400 62 Sul#wur (Niger) 26 26 57 40 43 65 66 Sub-total bulk 196 196 313 440 291 465 63 General Cargo Benin 242 242 326 311 405 373 10B Niger 114 114 62 171 177 195 91 (of widh cereals) (30) (30) (23) (10) (12)) 0 Nigeria 326 326 6 244 17 420 5 Other 0 0 7 0 22 4 N.S. Total General Cargo 682 682 401 725 621 988 63 Grand Total 1,068 1,068 1,503 1,405 1,141 1..749 65 Sources: SAR and PAC's annual statistics, corresponding years (Ref. 8). Niger's production of uranium was projected as 30% higher than the actual figure for 1982. This projection was reasonable at the time, in the perspective of increasing oil prices and healthy prospects for Niger's uranium exports. This overestimation explains the corresponding gap for imports of sulphur and petroleum products for Niger. 5.09 Projected imports of clinker were based on theoretical produc- tion capacity of 500 thousand tons for the Cotonou cement plant, under construction at the time of appraisal. Actual production is some 50% of technical capacity, due to technical difficulties, and to the less than anticipated development of domestic and regional demands. 5.10 Transit traffic for Nigeria was overestimated, because tha im- pact on the Nigerian economy of the reduction in oil revenue and result- ing Nigerian austerity plan was not foreseeable. Still, the attractive- ness of the Beninese route for Western Nigeria was overestimated, once the abnormal port congestion in Lagos had been suppressed. 1/ See also the comparable table (in Appendix 3) prepared by the Borrower. - 61 - Port Productivity and Occupancy 5.11 Since 1979, Cotonou port productivity has significantly in- creased; this improvement is, according to the Ad oc Commission, largely attributable to the effect of technicil assistance provided under the project in 1980 and 1981 (Annexes 9-1 and 9-3). In addition, the cons- truction of berths Q5 to Q8 under the project has doubled the port capa- city for general cargo. Port Productivity Index Tons per ship hour, Base 100-1978 Productivity Index 60 40 20 Mixed vessels 400 (en,ral Cargo 60 40 Clinkers 20 40 80 60 40 so (1) Statistically non significant lsed on Annex 5-8 5.12 Port productivity increased in FY1980 and FY1981 mainly for general cargo (from 3.5 to about 12 tons per ship-hour), clinker, mixed vessels and cereal carriers (Annex 5-3). The increase was less conspi- cuous for containers, where reorganization of the handling system was implemented in FY1982. On the average, the productivity gain was about 300% over four years, a very satisfactory performance. Although inter port comparisons are C-fficult, it would appear that the port product- ivity at Cotonou, except for containers, is now in line with that achieved in all but the most efficient West African ports (Annex 5-4). 5.13 The berth occupancy rate (Annex 5-3) reached 70% in FY1979, because of Nigerian traffic. With the disappearance of Nigerian traffic and the opening of the new port, the occupancy rate dropped to 39% in FYI982. This rate corresponds to a normal occupancy rate after comple- tion of the project: in FY1982, total value of ship-waiting time was about US$1.3 million. - 62 - B. Future Traffic and Port Activity 5.14 Cotonou port activity will depend on rather limited traffic increases for neighboring countries and Benin, on the change in condi- tioning of general cargo toward containerization, and on future port productivity, which will continue to improve, although less dramatically than during project implementation. Tonnage 5.15 Future tonnage handled at Cotonou has been estimated based on the following conservative assumptions: (a) International oil prices will not increase drastically in real terms and therefore, Niger uranium exports and reve- nue will not increase dramatically; also, Nigeria will not see its oil revenue increase to the same extent as in the '70s; (b) The import restriction policy in Nigeria will be conti- nued, and no port congestion will occur in this country; and (c) Transit traffic to Burkina and Mali, although small, will continue to increase, as well as the Togo/Benin ex- changes, as a result of regiona economic integration, and import/export route diversification policy adopted by most countries. 5.16 In the future, the Beninese route will continue to be cheaper than the Togolese route (about 30%), because of the competitive pricing policy adopted by Benin, but Lome will continue to be the fastest route. Hence, the 75%-25% repartition of traffic between the two routes will not be drastically changed. 5.17 Within Benin, economic growth will be moderate in the foresee- able future, sustained by an annual GNP growth rate of 2 to 34. It has been assumed that there will be no oil boom in Benin and thus, no major oil revenue inflow generating important imports. 5.18 The resulting tonnage projections (Annex 5-5) indicate an aver- age annual tonnage growth of 4.4%. Tonnage increases are summarized in the following table: - 63 - Cotonou Port Traffic Projections, 1982-2000 (in thousand tons) Average Annual Growth 1982 1988 1994 2000 Rate Liquid Bulk 229 266 337 438 3.4% Dry Bulk 476 606 875 1,114 4.8% General Cargo 430 474 669 951 4.5% Total 13L5 4.4% Source: Report of consultant (Ref. 4) revised by Association staff (Ref. 9). 5.19 Projections by country of origin/destination indicate that annual traffic growth rate will be similar for Benin and Niger. A slightly higher figure is obtained for Benin, due to the opening of a cement factory in 1988-1990, generating an additional import of about 250 thousand tons of clinker (for a 400 thousand ton theoretical capacity). This is, however, partly offset by a reduction in current imports. Forecast Tonnage by Country of Origin/Destination, 1982 - 2000 (in thousand tons) Average Annual 1982 1988 1994 2000 Growth Rate Niger (through Benin) Imports 318 398 560 653 4.1% Exports 6 10 13 13 3.5% Total 324 408 573 666 4.0% Benin Imports 711 852 1,191 1,695 4.4% Exports 47 66 93 116 5.3% Total 768 918 1j,8 1,811 4i.8T Other Countries Total 41a 20 24 26 -2.4% GRAND TOTAL 1,133 1,346 1,881 2,503 a/ Including exceptional traffic: 15,000 tons of cereals to Nigeria, and 5,000 tons of oil to Togo. Source: Report of consultant (Ref. 4) revised by Association staff (Ref. 9). - 64 - Containerization and Shipment Size 5.20 The past trend toward containerization of general cargo is ex- pected to continue. The average containerization rate for general cargo should double between 1982 and 1991, reaching about 50% (Annex 5-6). Thereafter, it will increase more slowly, and level off at about 80% of general cargo from 1997 onward. 5.21 The size of shipments is expected to increase on the average, but this trend should be more conspicuous for containers, with the devel- opment of container ship traffic, and for large general cargo vessels. For bulk carriers (tankers, cereal carriers, clinker ships), the average size of shipments is already large and is not expected to increase signi- ficantly, because of restrictions on access for larger ships (Annex 5-7). Port Productivity and Ship Number Port productivity 5.22 Port productivity has significantly increased during project implementation (para. 5.12). In the future, productivit.- gains are ex- pected to continue, but less rapidly. OBEMAP is considering some modern- ization if its cereal unloading equipment by 1987, which will permit some productivity increase in this respect. It has also undertaken serious efforts to improve container handling productivity, through training and acquisition of equipment. For clinker and petroleum products, more modest productivity increases are expected, as was the case in the past (Annex 5-8), because handling productivity is already high by regional standards. 5.23 As a result, the total ship number will increase by only 3.4% annually (Annex 5-7), due to the increase in average size of shipments. The number of container ships will, however, increase sharply from 69 units in FY1982 to 326 units in FY2000. On the other hand, the number of general cargo vessels and mixed carriers will decrease from 270 units in FY1982 to 239 units in FY2000. For bulk carriers, the increase in the number of ships will be parallel to the increase in tonnage, about 4% annually (from 132 units in FY1982 to 268 units in FY2000). 5.24 The resulting increase in the number of hours of berth occu- pancy, derived from the Bank port simulation model is 1.9% per annum, from about 48,900 hours in FY1982, to 68,500 hours in FY2000. 5.25 Future berthing capacity requirements will therefore increase very slowly, due to a limited traffic increase in tons, to a shift in conditioning towards containerization with higher cargo handling product- ivity, and to a slight but continuous increase in port productivity. - 65 - VI. ECONOMIC REVALUATION 6.01 The SAR examined three components in the project: (a) berth extension and technical assistance for reduction of ship-waiting time and operating time; (b) construction of a breakwater spur for land creation and savings on dredging; and (c) deepening of the channel to permit access of large clinker ships. Actually, (c) permitted the access of larger ships of all categories. As the ship size affects ship number, and consequently ship-waiting time, the re-evaluation will pool (a) and (c). 6.02 The economic evaluation of the construction of the spur needs little revision, except for construction cost, as the expected benefits did materialize. On the other hand, the evaluation of the port extension and deepening has to be revised, in consideration of modified traffic prospects and restriction in the utilization of one berth of the port. The economic re-evaluation was conducted from the standpoint of Benin alone, and from the point of view of the sub-region including Benin, Niger and Togo. 6.03 Despite the disappearance of the Nigerian traffic and the less than expected traffic to Niger, the project has a satisfactory 24.8% overall rate of return, comparable to the 25% rate estimated at the time of appraisal, thanks to the temporary rental of 120 meters of berth for special purpose, which would substantially raise waiting costs for normal traffic in the "without" case. The economic justification of the rental decision is not examined, as it resulted from Government decision of undertaking oil exploration and exploitation, and there is no alternative site in Benin for survey boats berthing. The economic analysis of this decision should be made as part of the economic study of the oil explo- ration and exploitation project. A. Berth Extension 6.04 The benefits from the 650 meter extension, technical assistance, and deepening of the port are: (a) a reduction of ship-waiting time; (b) the avoidance of traffic diversion to more costly routes; (c) the reduction in ship-service time at berth; and (d) a reduction in land cargo-handling costs. Waiting Costs 6.05 The calculation of annual waiting cost (Annex 6-1) was made, using the Bank port simulation model under the old port configuration, reduced by 120 meters for oil exploration until 1988 (without case), and - 66 - under the new configuration (with case). The traffic was subdivided into ten categories of carriers: container ship, large general cargo, small general cargo, mixed carriers, tramps, cereal carriers, sulphur carriers, oil tankers, clinker ships, and fishing ships. In the without case, it was assumed that traffic diversion would occur for Niger traffic when the waiting cost for the category of goods under consideration would equal about 50% of the cost of the ship during operation at berth. This level would have been reached in 1982. Traffic diversion would then increase until 1985, when all general cargo to Niger would have been diverted to Lome. Similarly, imports of cereals would be diverted to Lome (Annex 6-2). Only sulphur and oil imports would continue to transit through Cotonou. Therefore, the difference in waiting costs with and without the project in Annex 6-1 does not include the cost of traffic diversion. No traffic diversion for Beninese traffic was taken into consideration, because waiting costs in the without case, after diversion of Niger's traffic, did not justify it. Traffic Diversion 6.06 The effect of traffic diversion to Lome (Annex 6-2) depends on the national entity under consideration. For Benin, the cost of traffic diversion is the effect on the domestic economy of less traffic transit- ing through Benin. The only adjustment considered necessary to financial costs is for unskilled labor. A shadow price factor of 30% was used for labor, meaning that about 70% of the value of labor released by PAC, OBEMAP, OCBN and trucking because of traffic diversion would accrue as a loss to the Beninese economy (Annex 6-3). For Niger, the cost of traffic diversion to Lome is the differences in average ship waiting costs and in average land transport cost to Niger from Cotonou (CFAF 27,000 per ton) and from Lome (CFAF 36,000 per ton). For the sub-region as a whole, the waiting cost is the difference between awaiting cost in Cotonou with- out the project, plus waiting cost of diverted traffic to Lome without the project, plus transport cost difference from Lome and Cotonou to Niamey, and (b) waiting cost in Cotonou with the project. Based on past experience, it is considered that only 50% of waiting cott savings on liners will be captured by the countries, and that this proportion will be 80% for tramp ships. The split of cost of waiting time between Benin and Niger was made on the basis of the proportion of traffic for each type of vessel to each country. Reduction in Ship Service Time 6.07 Productivity increases in ship loading/unloading were reflected in the value of tiae spent at berth with and without the project (Annex 6-1). It was considered that without the project, port product- ivity would have remained at its FY1979 level, while with the project, it will continue to increase moderately above its FY1982 level (Annex 5-8). The resulting total savings in time spent at berth was then allocated to Niger, Benin and other countries on the basis of their res- pective tonnages. In the without case, the cost of time spent at berth by traffic diverted to Lome was added to the Niger waiting cost in Benin, based on time spent at berth in FY1982. It was assumed that for liners, - 67 - 50% of savings will accrue to countries, the rest being captured by shipping companies, while the countries would capture 100% of savings for tramp ships (Annex 6-1). Reduction in Land Cargo Handling Costs 6.08 Savings on handling cost on the land side were estimated based on the difference between average handling cost in FY1979 at FY1982 prices, and actual figures for OBEMAP in FY1982 (Annex 6-3). Savings per ton were therefore estimated as US$.87 per ton. It was conservatively assumed that no further improvements will take place after FY1982. For diverted traffic, handling cost on land in Lome was taken as equal to corresponding handling cost in Cotonou in FY1982 based on cost estimates produced by consultants. The split of benefits between countries was made on the basis of tonnage going to each country. All savings on hand- ling cost are captured by countries (Annex 6-1). 6.09 Under these conditions, and with traffic projections as outlined in Chapter V, the revalued rate of return for Benin on the berth ey.ten- sion and technical assistance is 21.5%, as compared to an estimated 15% at the time of project appraisal (Annex 6-4). The rate of return for the sub-region is 26% (Annex 6-5), compared to an estimated 27% at the time of project appraisal. B. Construction of Breakwater Spur 6.10 The effects of this component of the project have materialized as expected, until now, with the creation of additional land following the time schedule in the appraisal report, and the avoidance of dredg- ing. In absence of contradicting estimates, the annual volume of dredg- ing avoided was adopted from the SAR and revalued at 1982 prices. The corresponding flows of avoided costs are given in Annex 6-6. 6.11 The cost estimates have been revised upward from Lot 3, and lowered for Lot 2 (para. 3.16 and Annex 3-3), based on the actual cost of construction of the spur. The resulting revalued rate of return of this component for Benin or the sub-region is 9%, as compared to 16% in the SAR (Annex 6-6). C. Global Rate of Return 6.12 The overall rate of return of the project for Benin is 18%, as compared to an estimated 15% in SAR. For the sub-region, the correspond- ing rate is 24.8%, as compared to 25% in the SAR (Annex 6-7). - 68 - VII. FINANCIAL ANALYSIS A. General 7.01 The financial performance of PAC, leading to its present pass- able situation, has to be assessed in the context of a difficult and adverse environment. 7.02 Several events, beyond PAC and even Benin Government control explain major deviations from projections as in the SAR. These are: (a) the continued low tariff policy imposed by competing Lome Port, achieved through important capital subsidization policy adopted by the Togolese Government, while PAC receives government contributions (includ- ing IDA money) essentially as loans with a sizeable interest rate; (b) traffic forecasts were 30% above actual traffic for FY1982, (para. 5.08), with a subsequent considerable reduction in revenues; and (c) the in- crease in the US$ exchange rates/decline in the OFAF exchange rate, which jacked up the foreign debt service, expressed in local currency. 7.03 However, PAC's income statement displays for FY1982 only a nomi- nal loss, with depreciation calculated on revalued assets. Its cash situation is satisfactory and does not impede operations, and the port authority contributes to the government budget through interest on on- lend IDA funds, as forecast. 7.04 Nevertheless, the targeted 8% rate of return from FY1981 onward is far from being met, and there is very little hope for it to be met in the foreseeable future. B. Financial Performance, FY1977-1982 7.05 PAC's accounts are displayed in Annexes 7-1 to 7-3, and summa- rized below. For FY1982, accounts have been presented with and without revalued assets. Over the FY1977-1982 period, PAC's performance is cha- racterized by (a) a very sizeable increase in cash generation, although lower than expected, but sufficient to meet a 46 fold increase in debt service, resulting maintly from the projects and (b) a disappointing management of working capital, with increasing receivables from the public sector. The annual accounts are summarized below. - 69 - llijte ato r hlasmeet for hmreatativ Ye. 197-91 (Cr nmiun~) A~_ r~a u r ~ ~ 7« t fot R a~t,a om CDJO 695.6 15.00.0 4,993.2 27.677-0 16,81.4 27.099.0 16,186.8 27.7244 w r _ 5 640 2,0O. 10.059.5 - 9896.1 271.1 5»0.0 729.3 23.64.0 7,035.2 27,677.0 2640.9 27,099 ,.9 27.995.3 Oher im r A~ - 57.8 - (48.8) - 244.5 - 31548 722a on~t mtat (At) 6ffi.0 T5.5 1.4714 2,206.5 2.589.0 2.782.4 3.6.0 3,152.0 3.152.0 M~- irmt :SaKuttIs 157.0 217.4 186.0 994.2 200.0 1.225,8 205.0 1.757.8 2.397.2 as 0a t a 679.0 568.1 1,235.0 1,212.3 2,399.0 l,56.6 3.421.0 1,9M4.2 1,354.8 Toimi Yot Asset t^O 21.969.0 i= 49..0 m.662.0 MåR-wo 4 9 972..0 1,010.6 18,762.0 5,671.4 21.9%6.0 t9,4^.9 22337.0 17,352.3 19.565.3 eb7 237.0 24.6 3,2MO4 2,527.3 8,110.0 9,25.1 8,183.0 11.040.6 10,57.6 tel C&Puftl b~p e i x 9. 2 21969.0 8.193.7 1066.0 4 2662.0 _ 3 ,0 392.9 p _MU, rati of amrent åote to 0~arnt 14aelte~en 5.3 3.6 7.9 2.2 12.9 2.3 17.7 2.1 1.6 ~/ DM 20a0 21/79 150 31/ 21 5 a 27M / 3x66 35/5 Source: PAC's annual accounts, corresponding years. M ts of Rve~u m~couni for ~ersnttv Ye. 197-1982 19N 1979 1931 1932 Actal ~ite Atul Bwat ~ kreast el rmmt mA dd Operting Rov.ms 67..0 811.1 1.211.0 1,05B.9 3.317.0 1.618.6 3.794.0 2,659.1 2,659.1 cpLstng ipna 394.0 442.9 465.0 6CB.O 551.0 804.6 6.0 1.046.1 1,046.1 %oh ~enrtiln 482.0 359.0 W6.0 450.0 2,766.0 814.0 3,194.0 1.613.0 1,613.0 D~~r, 4n 1.0 189.0 589.0 2t.9 IX.0 661.7 145.0 63.2 95.0 933.0 631.9 1.054.0 894.9 1,496.0 1.466.3 1.545.0 ,676.3 1,976.1 Oper:ig -43r9-a 293.0 179.2 21?.0 164.0 1,1.O 152.3 2,249.0 92.8 3-0 pn~nce c~g.e (=st) 2.0 24? 17.0 315 -M 0 _5 3M. 1 2 15.2 Iet Iae (lass) 272.0 155.0 20.0 132.5 1.5350 (411.2) 1.74.0 199.6 ~(100. cwer.t s'r of gat 5pba - 40.9 163.0 77.2 1,434.0 - 1,752.0 - - ist UIWyu (Dernatt) et r Pa 253.0 40.9 10.0 71.2 92.0 (510.3) 112.0 56.2 (243.59) 1lsRäio 45 54 36 57 16 - 49 16 39 39 Operting attao 67 18 82 85 43.0 85 39 63 18 omlfif lr,tInw npl a nes P% ~ Aass tan Us 1.9 27.3 1.4 3.3 9.5 0.9 9.5 5.8 2.4 T~ laurat Cquerd tv 0s4tg rplu 13.9 7.4 12.8 5.2 6.4 0.3 64 1.3 0.9 Deft usr~o OGr,~e 5.2 n.a. 4.5 n.a. 5.0 0.9 5.3 1.3 1.3 Source: PAC's annual accounts, corresponding years (Ref. 8). - 70 - Cash generation, tariffs and worki-tg expenses 7.06 Cash generation increased by 349% between FY1977 and FY1982; 117% in FY1980 (from CFAF 450 million to CFAF 978 million) when the aver- age 40% tariff increase introduced in February 1980 was fully effective, and further 98% in FY1982, when tariffs structure was modified and port dues on merchandise as defined in 1980 were extended to cereals, cement and petroleum products, resulting in an average tariff increase by about 70%. Hence, tariff increases actually enforced were about 138% over the 1977-1982 period. In the SAR, tariff adjustments slightly in excess of 15% in real terms (equivalent to about 85% in nominal terms, including actual inflation) were envisaged. Actual tariff increases therefore exceeded by far the adjustments requested initially by the Association. This was necessary in order to offset the loss of revenue due to lower traffic growth. After these tariff adjustments, Cotonou Port has still a price advantage of about 30% over Lome (para. 7.15). 7.07 Working expenses increased by 136% over the same five years, but the increase was mainly with supplies and fuels (+370%), government taxes (+155%), outside services (+181%), while staff costs increased by only 99%, due to salary increases slightly higher than inflation, with cons- tant staff number. The increase in consumption and outside services resulted from the additional maintenance costs of the new port, and from the improved maintenance standards adopted by PAC. Debt service and investment policy 7.08 PAC's total debt service has increased up to CFAF 1,108 million in FY1982, as compared to a forecast CFAF 425 million. The difference corresponds mainly for CFAF 278 million to the debt service for addi- tional investment in equipment, for about CFAF 50 million to the finan- cial charge for the capacity extensions in Parakoui/ and for about CFAF 260 million to additional financial charges for the project, resulting of the dollar increase and fall of the CFAF. The extension was requested in the Credit Agreement, but it was financed on behalf of OCBN by PAC for un- known reasons (however, PAC seems not to charge OCBN for the interest or reimbursement of the corresponding amount, although it should do so). The remaining CFAF 205 million of the difference is attributable to the effect of exchange rate fluctuations on debt service expresbed in foreign currencies. 7.09 Over the 1977-1982 period, PAC's investment policy was to reduce capital investment additional to the CFAF 9,240 million for the project, to the minimum required by operations. Additional investment included: (a) the purchase in 1978 of a mobile crane for CFAF 314 million; (b) the acquisition of a new tugboat and the repair of the old tugboat for CFAF 407 million, well justified; and (c) the extension of the freight terminal in Parakou for CFAF 367 million on behalf of OCBN. During project execution, PAC duly informed the Association on its in- vestment projects, most of which (except (a) above) were justified. Since 1981, the Directorate of Studies has an economic department which 1/ The Borrower notes that capacity extensions in Parakou were carried out by PAC, with foreign financing, on behalf of OCBN (Appendix 3, para. 2.8). - 71 - has started to screen investment projects based on economic and financial critieria. Management of working capital 7.10 The management of PAC's working capital has been the weakest point in its financial management. Gross trade debtors, 1977-1982 Gross Amount Equivalent in Trade Debtors months of Year in million CFAF revenue 1977 672 10 1979 1,167 13 1981 2,274 17 1982 ?,915 13 Source: Annual Financial Statements (Ref. 8). Trade debtors have increased from CFAF 672 million in FY1977 (10 months of revenue) up to CFAF 2,915 million in FY1982 (13 months of revenue), though it was supposed to have been reduced to a nominal level by this date. This disappointing comparative performance can be attributed to: (a) the absence of strong incentive to recover receivables, as PAC's cash situation is satisfactory despite increasing receivables; (b) most of all, the fact that most of the receivables come from the Government and parastatals, which are all in a difficult cash situation, and tend to delay payments to each other in a cumulative process; PAC, with its com- paratively prosperous financial situation, tends to be the end of the chain victim of this situation. The President himself has instructed that government organizations should clear their reciprocal debts, but with only a temporary effect in FY1981; and (c) the optimistic forecast in the SAR, which encompassed that receivables should be reduced to 20% of annual income. C. PAC's Performance as Compared to the SAR 7.11 PAC was expected to improve its accounting procedures for fixed assets through (a) integrating omitted items by FY1979; (b) revaluing fixed assets by the same date; and (c) including project related assets upon works completion. The integration of omitted item- was carried out on time; the revaluation was conducted only in FY1980, with a one year delay, and the inclusion of project related assets was carried out in FY1981, with a one year delay, as compared to the actual completion of works; in the meantime, these assets were accounted for as works in pro- gress. - 72 - 7.12 The port authority's accounts were to be audited annually by acceptable auditors. PAC's accounts were audited by a Government auditor for the year FY1977 to 1980. The auditing standards adopted by the auditor did not comply with the Association requirements, but until 1981, there was no local alternative, and the Government was reluctant to hire a foreign auditor at a high cost, the audit not being financed under the project. For FY1981 and 1982, PAC requested the Government auditor to audit its accounts, but he could not audit PAC's accounts on time, being too busy with other parastatal companies in critical situation. There- fore, PAC's accounts were approved by its Board un-audited. 7.13 The SAR forecast a financial .ate of return on net revalued fixed assets of 8%, from FY1981 onward. This target has not been met, the actnal rate being 2.4%, in FY1982 with little possibilities for meet- ing the targeted 8% under the present limited perspectives for signifi- cant traffic increases. D. Financial Projections 7.14 Financial projections, based on conservative traffic increase forecast, as in the economic evaluation, and on a reduction in staying- time due to improved productivity (Annex 7-4) indicate that Cotonou Port will be capable of sustaining competition with neighboring ports, with no major tariff increases required, and will be capable of contributing sufficiently to its foreseen investment plan, without endangering its cash situation. Tariffs and Cash Generation 7.15 Under the assumption of salary increases less than 1% below domestic price increases, compensated by an annual 2% merit/seaiority increase, which is feasible in the local context where PAC's salaries comprare favorably with private firm's, necessary tariff adjustment will be only: (a) the annual compensation of local inflation, averaging 10% per annum over the 1982-1992 period; and (b) a one-shot 15% increase of ship dues in FY1984 for raising the financial rate of return to above 5%. With unchanged tariffs in constant terms, PAC should be able to defend its position against Lome competition, assuming that other firms of the transport chain will have a similar policy. The cor- responding cash generation will be CFAF 2.3 billion in FY1983 and up to CFAF 5.5 billion in FY1990. This will be sufficient to cover debt serv- ice and PAC's contribution to capital investment. Capital Investment 7.16 Capital investment required to maintain PAC's operations are comprized in its official investment plan, namely: (a) the purchase of a tug boat, necessary for safety reasons; (b) the reha- bilitation of the eastern breakwater which is in very bad condition; (c) some major r' pair to the old quarv: (d) major repairs in the - 73 - fishing port; and (e) miscellineous small items. Items (a), (b) and (c) are most likely justified and may be included in a future IDA project. Item (d) is questionable. With an average cost of borrowed funds of about 11%, duration of 15 years and 2 years grace, and assuming that PAC's contribution will amount to about 25% of the total, PAC's debt service ratio will exceed a satisfactory 1.8 from FY1986 onward. Cash available will increase from 1.4 billion in FY1983 to CFAF 2.7 billion in FY1986 and CFAF 8.3 billion in FY1990. Simultaneously, PAC's debt/equity ratio will slightly improve from its present low 39/61 to a more satis- factory 34/66 in FY1990. Hence, PAC's investment plan and its financing ability are well within its investment and borrowing capacity. Profitability 7.17 Under the assumed tariff increases and financing plan, PAC's financial rate of return on revalued fixed assets will increase from its present 2.4% level up to 6% from FY1984 onward. E. Financial Situation of the Transport Chain 7.18 The parties involved in the transport chain and which received techni al assistance under the proje-t were PAC, O3EMAP and OCBN. The forwarding companies are also part of the chain, but were not included in the project. The purpose of the analysis is to determine whether the whole chain is financially viable, and which link is the culprit of the sector weaknesses. Financial statements for each firm, and consolidated statements are given in Annex 7-5 for FY1980 and FY1981. General View of the Sector 7.19 The sector's productivity has increased from FY1980 to FY1981, with decreasing working expenses in current CFAF (from CFAF 5.8 billion to CFAF 5.4 billion) while revenues increased slightly. This improvement may be attributed to the effect of technical assistance supplied under the project in PAC, OBEMAP, and OCBN for improved management and oper- ations. 7.20 The sector's indebtness is rapidly increasing, but it still has a sizeable borrowing capacity, as demonstrated by a declining debt/equity ratio (41/59 in FY1980, and 37/63 in FY1981), and an interest coverage ratio declining but still as high as 1.6 in FY1981. Aggregated cash situation indicates that the sector has a liquidity shortage, with a net negative balance of about CFAF 600 millions in bank overdrafts. This situation is attributable to OCBN's critical cash situation. 7.21 However, the most critical poirt is the management of working capital: the sector has huge payables (CFAF 7.1 billion) and receivables (CFAF 8.4 billion), due to the widespread practice of delaying payment within the public sector. The issue of intra-public sector debts is not limited to the transport sector (which is faring on the whole better than other public sectors) and is being addressed at the national level under -74 - the Para-Public Project under preparation. The transport sector has a positive net situation, for about CFAF 1.3 billion, and will benefit from the operation. 7.22 The consolidated sector makes an annual loe amounting to 13% of its revenues. In order to make up for this lose, some further product- ivity improvements may be expected, but on the whole, tariffs should be raised by at least 10% in real terms. This limited increase can be im- plemented without risking to jeopardize Cotonou's competitive advantage, as the price advantage of the Benin route is about 20% on the average. 7.23 The three para-public firms have different financial situations: PAC and OBERAP have a relatively good situation, while OCBN is in diffi- culty. The main differences between PAC and OBEMAP is that PAC relied heavily on long-term borrowings to finance its extension, while OBEAP financed recent equipment acquisitions through grants, and therefore, has negligible long-term debts. Regarding working capital management,OBEMAP has receivables and payables for similar amounts, while PAC has a consi- derable positive balance for CFAF 1.0 billion, and is therefore playing the role of supplier of liquidities for the public and para-public sector. Both firms enjoy a problem-free cash situation, and OBEMAP even has sizeable excess cash amounting to several months of revenue. A con- solidation of PAC and OBEMAP would therefore not affect drastically their respective situation, and would provide little managerial or operational advantage. 7.24 OCBN, on the other hand, is the lame duck of the sector, despite spectacular improvement in FY1981, with a working ratio declining from .85 in FY1980 to .76 in FY1981. Its net operating revenue is constantly negative, calling for substantial tariff inqreases; its indebtness is increasing, with an excessively high debt/equity ratio, up to 1.4 in ?Y1981. However, it has a safe interest coverage ratio of 1.6 in ?Y1981. OCBN suffers also a serious cash shortage with a net bank overdraft of about CFAF 2.6 billion in FY1981 (9 months of revenue). Hence, OCBN's main problem, in addition to the tariff issue, is a tendency to excessive capital investment, with resulting excessive indebtness at a fairly high average cost of capital of 10%, and a high debt service (CFA? 535 million FY1981), which weighs heavily on the firm's cash situation.!' 7.25 Altogether, the transport sector does not cost money to the Government, as it operates without any subsidies; it even contributed positively for CFAF 397 million in FY1981 through on-lent funds. How- ever, its situation may become critical in the medium--term, should OCBN's situation worsen. VIII. THE ROLE OF THE ASSOCIATION 8.01 The Association has played an important role in the preparation and satisfactory completion of a technically sound, economically justi- fied and financial viable project, as well as in PAC achieving impressive results from the technical assistance and training programs--both leading 1/ The Borrower feels that OCBN capital investments appear to oe high because the economic crisis which affects the entire country has also led to reduced operations (Appendix 3, para. 2.16). - 75 - to better management and more efficient port operation. The Bank group has a continuing role to play in the area of finance (see Chapter VII). In the introduction to its completion report PAC adequately commented on the Association'a role, as well as on the difficulties encountered and how to deal with them in the future. Excerp4j from this report are quoted as follows: 8.02 "La Banque Mondiale a été désignée par tous les co-financiers du Projet d'Extension du Port de Cotonou pour être le chef de file du pro- jet. Son rôle a donc été essentiel dans la préparation du projet et dans la supervision de son exrc:ition. En outre elle avait la gestion du cré- dit AID et de la Subvention du Royaume de la Norvège dans le cadre du projet." 8.03 "Toutes ces tâches (de préparation) ont été accomplies par l'Administration en collaboration directe avec la Banque Mondiale qui, rappelons-le, a joué un rôle essentiel dans l'exécution du projet." "Plusieurs missions de supervision de la Banque Mondiale se sont succédées à Cotonou au cours de l'exécution du projet. Les difficultés rencontrées au cours de l'exécution ont été résolues grâce à l'appui technique des Ingénieurs et Financiers désignés par la Banque pour superviser les travaux. Leur conseils ont été importants dans les situations suivantes: - Nécessité de faire un Avenant en vue d'exécuter les rem- blais préalables au début des travaux, remblais devant initialement être exécutés dans le cadre du Lot N° 2 dont le marché n'était toujours pas signé en février 1979 - Difficultés rencontrées dans le rescindement de la jetée Ouest et la construction de l'épi d'arrêt de sable - Dans le choix d'une solution optimale pour la protection des berges au coin Nord-Ouest de la nouvelle darse: ce choix a abouti à la construction d'un poste Ro-Ro. - Dans le choix des Consultants pour les deux autres volets du projet: . Erosion ctière . Assistance Technique et Formation" "De la même manière nous avons parlé d'une structure type qu'a été pour ce projet le Bureau de Coordination dirigé par un homme ayant une grande compétence et une vaste expérience en réali- sation de projets de génie civil." - 76 - IX. CONCLUSION 9.01 PAC has now the capacity to manage, as a financially viable and efficient organisation, the only deep-water port available to Benin. In considering the difficulties it has had to face in recent years, PAC's achievements have been commendable. The Bank Group has played an impor- tant role so far and further Bank Group involvement would help PAC rea- lise its potential. 9.02 Experiences to be drawn from the execution of this project, and which may be replicable or to be avoided in similar projects concern: (a) a very elaborate system of supervision of project execu- tion which worked well in the present case, thanks to an initial clear understanding of the responsibility of each party, and to good communications (paras. 3.02 and 3.12, Annex 9-1). It proved to be efficient in decision making, effective for technological transfer to the benefit of young national engineers, and in handling occasional prob- lems with contractors and consultant's; (b) the high risks associated with entrusting project design and project supervision to different consultants, and to entrusting final design to contractors (para. 3.22); (c) the importance of permanence of intermediate and higher level staff with a gradual preparation to their future tasks, under a flexible career plan: retrospectively the project provided a good career path to the director of Studies and Port Maintenance in PAC, and to the Technical director in OBEMAP, but they had to win their position, although all assistance was given to them: on the job training, new definition of responsibilities, and addi- tional professional training. In other instances, a less interactive policy was adopted, with lesser success (Statistics, Training, Finance in OBEMAP and PAC) (paras. 4.03 and 4.06, Annex 9-3). (d) The design and implementation of the technical assistance component of the project happened to be conducted in an unusual way, which may have contributed to its relative success: very early in the execution of this component, after a poor start, the tasks and responsibilities of technical assistance team were modified: instead of being responsible for providing experts for a contractual dura- tion, it was agreed that the field of intervention be divided tn sub-sectore of action, each with a measurable or observable target to be achieved in a given time frame. The mission leader was responsible for scheduling arrival/departure of experts, within a fixed cost enve- lope. The achievements were reviewed every four months between the Borrower, the Association and the consult- - 77 - ants. During project execution, about one third of the experts were replaced for the better at the Borrower's zequest or at the mission leader's request. Also, reserve funds were available for financing unexpected needs arising during execution of the technical assistance com- ponent of the project subject to achievement of certain managerial goals by the entities (paras. 3.10, 3.12 and Annex 9-3). 一》叮－ &f＿、，b&；二州一：各，夜 /&，了；J ANNEX 1 -1 - 79 P-age ;f BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT STATUS OF CREDIT AGREEMENT COVENANTS Status Section and Covenant DCA Section 3-04 (a) (b) SACA Section 3-04 (b (c) Borrower shall relend, under subsi- Complied with. diary loan agreements, the proceeds of the credits to PAC, to be repaid over a period of twenty years, including five years of grace at an annual interest rate of 7 1/2% p.a. on the principal amount outstanding from time to time. DCA Section 3-11 SACA Section 3.06 (a) transfer of itle of project (a) Complied with. physical assets to PAC (b) PAC to record the values of all (b) Complied with. project assets completed and placed in service by December 31, 1981 in its accounts and financial statements. DCA Schedule 4.4 SACA Schedule 4.4 VIC to take out i surance against Complied with* risks consistent with appropriate practice. ANNEX 1-1 Page 2 of 3 DCA Schedule 4.8 SACA Schedule 4.8 PAC to have its accounts and finan- The accounts wexe reported on by cial statements audited by inde- Government auditors but their exami- pendent auditors acceptable to the nation and report did not comply Association and to furnish audited with the Association's audit requir- accounts and audit reports not later ements. than four months after the end of each fiscal year. DCA Schedule 4.9 SACA Schedule 4.9 PAC to incorporate in its accounts Complied with. for the year ended December 31, 1979 all fixed assets in use by PAC. DCA Schedule 4.10 SACA Schedule 4.10 PAC (i) to revalue its assets and (i) Complied with. accumulated depreciation at inter- vals of not more than five years, (ii) The required financial rates of the first to take place not later return have not been met. The than December 31, 1979, and (ii) to actual rate of return was only 2.4% an annual rate of return on net for PY1982 (instead of the required fixed assets in operation of not 8%). less than 5% for its fiscal year 1980 and not less than 8% annually thereafter. DCA Schedule 4.11 SACA Schedule 4.11 PAC not to incur capital expenditure Complied with. The CFAF 1,8 billion other than the project or replace- spent in addition to the project ment of its assets exceeding CFAF correspond to majors repairs and 100 million in each year up to 1985. purchases of equipment, carried out with the Associations's agreement. DCA Schedule 4.12 SACA Schedule 4.12 By December 31, 1979 or such other Compliance to this covenant has not date as may be agreeable to the been achieved. At December 31, 1979 Association, PAC shall reduce and the ratio of outstanding trade - 81 - ANNEX 1-1 Page 3 of 3 thereafter maintain the balance of debtors was 110%, up from 86% in its receivables at not more than the 1977 and increased to 117% in 1980 equivalent of 20% of PAC's annual and 141% in 1981. Certain steps gross operating revenue. were taken in 1982 to reduce the ratio to 119% in 1982. The Presi- dent is personally concerned about the situation which is a national problem due to the difficult finan- cial situation of public firms in the country. WAPT2 Mar. 1984 - 82 - ANNEX 3-1 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT BIDS RECEIVED AND ACCEPTED BIDS (CFAF million) Number of Bids Maximum Minimum Average Accepted Lots Received Bids Bids Bids Bids 1 25 3,303 1,580 2,243 1,988 2 9 2,568 1,378 1,892 -a 3 16 2,546 447 1,386 968 4 10 2,155 1,074 1,512 1,074 5 11 575 334 452 403 6 10 1,051 615 814 615 a/ All bide for Lot 2 were disregarded in mid-1978. After re-bidding in September 1978, a bid for FCFA 948 million (31% less than the previously received lowest bid) was accepted. Source: Final Report, project coordinator (Ref. 6). WAPT2 Apr. 1984 - 83 - ANNEX 3-2 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT TECHNICAL ASSISTANCE: SCHEDULED, AVTUAL, AND EVALUATION Technical Assistance Scheduled Actual Success Rating Cost in CFAF 298,789,000 351,000,000 Mission leader 13 K 15KM 8 Expert In finance 10 + 3 MM 20 1 3 K 6-k/ Economist 9 + 2 UM 10 + 5 + 1 M 3 Cargo handling 17 M 21 N 8 - echanic 13 MR 11 N0 71 Capitainerie 2M 2.5 MM 6 Buildings 3M 5 + 1iM 6 Coordination 5.5 MR Railway operation 6.5 1M 10 + 3 MN 8 Railway economist 7 MR 7 + 3 MR 8 Coordinator rail 1 M Unallocated 1KM Signalling railway 1 N 8 Marketing 2 K 2 Execution: Feb. 1981 to May 1982 - Complement: May 1982 - Dec. 1983. Training and Personnel Administration Cost in CFAF 146,951,000 161,301,000 Mission leader 15 MM 14 MM 4 Support from Headquarters 4 MM 5.5 KM 3 Training program 14 + 8 MN 22 MM 6 Personnel Admanistration 12 MK 15 M 8 Training for operation 6 NX 6 M 6 Tugboat specialist 2 M n.a. Execution: March 1981 to December 1982. Training abroad Maritime Civil Engineering (Le Havre) 45 days 8 Finance OBERAP (Le Havre) 45 days 8 Cargo Handling (Le Havre) 45 days 10 Personnel Administration (Canada) PAC, OBEAP 2 x 45 days 8 a/ Estimate of goal achievement, established by the Ad hoc Commission and the Association mission. Scale of 0 to 10. b/ Should be continued in the future. cl After replacement of the expert. Source: PAC's Project Coordinator. VAPT2 Feb. 1984 - 84 - ANNEX 3-3 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PROJECT COST, APPRAISAL AND ACTUAL US$ million equivalent Appraisal Actual Project Component Local Foreign Total Local Foreign Total A. Project Preparation 0.03 0.66 0.69 - 0.61 0.61 B. Civil Works 1. Lot 1 3.31 9.86 13.17 4.83 8.75 13.58 2. Lot 2 2.53 7.56 10.9 0.53 6.20 6.73 3. Lot 3 1.29 3.86 5.15 2.43 5.64 8.07 4. Lot 4 1.68 5.02 6.70 4.89 3.26 8.15 5. Lot 5 0.77 2.32 3.09 0.66 1.54 2.20 6. Lot 6 0.65 1.92 2.57 0.72 3.31 4.03 7. Ro-Ro Platform -a-/ -. 0.80 1.13 Total Civil Works 10.2 30.54 40.77 14.39 29.50 43.89 C. Construction Supervision 1. Consultants 0.79 1.18 1.97 0.75 2.03 2.78 2. Project Coordinator a - - - 0.21 0.29 0.50 D. Technical Assistance. Training and Studies 0.84 1.24 2.08 0.43 1.66 2.09 E. Coastal Erosion Study 0.11 0.47 0.58 0.14 0.39 0.53 Total Project Cost 12.00 34.09 46.09 15.92 32.48 50.40 a/ Not included in the appraisal cost estimate. Sources: SAR and Final Report, project coordinator. (Ref. 6). WAPT2 Apr. 1984 - 85 - ANNEX 3-4 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT FINANCING PLAN, ACTUAL AND ORIGINAL Actual Financing Original Financing Difference Organization Funds provided US$ million equiv. US$ million equiv. US$ million equiv. IDA US$11.0 million 11.00 11.00 Norway US$8.3 million 8.30 8.30 - EC Suecial Action Fund 11 US$3.0 million 3.00 2.62 + 0.38 BADEA US$4.6 million + US$2.7 million 7.30 4.60 + 2.70 VlDA Can. $ 8.97 million 6.73 10.00 - 3.27 CCE FF10.9 million 3.12 3.12 - FAC FF 8.0 million 1.50 1.50 AfBD UC 2.42 million 2.94 2.94 - OPEC b/ US$4.5 million 4.50 - + 4.50 Gov./PAC CFA 593 million.2/ 2.01 d/ 2.01 - Total 50.40 46.09 + 4.41 Financing Share by Donors Original /Orginally were to be financed by Abu Dhabi fund. b/ Not participating in the original financing plan. c/ All paid by PAC. d/ Average rate of exchange US$1)1 CFAF 245. Sources: SAR and Final Report, project coordinator (Ref. 6). WAPT2 Apr. 1984 86- ANNEX 3-5 BENIN COTONOU PORT PROJECT PROJECT CONPLITION REPORT DISBURSEMENTS (USS MILLION) IDA Fiscal Year Appraisal Actual a/ and Quarter Ending Quarterly Cumulative Quarterly Culative 1977/1978 0.50 0.50 0.51 0.51 1278/1 979 December 31, 1978 0.38 0.88 - 0.51 March 31, 1979 0.38 1.26 - 0.51 June 30, 1979 0.38 1.64 - 0.51 1979/1980 September 30. 1979 0.38 2.02 - 0.51 December 31, 1979 2.58 4.40 0.75 1.26 March 31. 1980 2.38 6.78 1.89 !015 June 30, 1980 2.08 8.86 1.48 4.63 1980/1981 September 30, 1980 1.50 10.36 0.97 5.60 December 31. 1980 0.32 10.68 1.59 7.19 larch 31, 1981 - 10.68 1.34 8.53 June 30, 1981 - 10.68 0.42 8.95 1981/1982 September 30, 19891 - 10.68 0.63 9.58 December 31, 1981 0.32 11.00 0.25 9.83 March 31, 1982 - 11.00 0.33 10.16 June 30, 1982 - 11.00 0.19 10.35 1982/1983 September 30, 1982 - - 0.17 10.52 December 31, 1982 - - 0.08 10.60 March 31, 1983 - - 0.01 10.61 June 30, 1983 - - 0.04 10.65 1983/'984 September 30, 1983 - - 0.00 10.65 December 31, 1983 - - 0.02 10.67 March 31, 1984 - - 0.04 10.71 1 June 30, 1984±/ - - 0.29 11.00 -- -nl -10 -9 a. 'a 1975 1979 190 1981 1982 1981 a/ As pro-rata of amount disbursed on IDA Credit and the Norwegian Grant totalling US$19.3 million equivalent. b/ The undisbursed amounts of US$0.29 million equivalent from the IDA credit and US$26.89 thousand equivalent from the Norwegian Grant are expected to be disbursed before June 30, 1984 (see para. 3.20). c/ Forecast. Source*: SAR and Supervision Reports. WAPT2 Apr. 1984 COTONOU PORT PROJECT PROJECT COMPLETION REPORT ORGANIZATION CKART Ob PAC-S Director Cenera 1974 i__ _ _ _ _ _ _ _ _III Deputy Director General Port Commander] Director of Technical Director in charge of Administration Fishing Port Accounting Commercial Ieronnel ,f4 Deeartment Departmejot 00 1983 Director General Dqputy DirectorGera Director Commercial Director Director of Administrative Port Director of of Studies Director of Finance Port Raint. Director Commander Fishi Pt Economic Statistics - Treasury Equipment - Training Technical Marketing - Commercial Infrastructure - human Resources Hydrography Legal Accounting Electricity - Public Relation & Topography - Financial and Signals General Operations Cost Accounting oBudgetiuntin Source: PAC. a/ Reorganised in March 1982. VAPT2 Mar. 1984 BRI" c00OU00 PORT PROJECT PROJECT COMPLETIO REPORT Organization Chart of OBNMAP i/ 1979 1979 Director General Deuty Director ;Gerl] Director of Director of [i nistrativ Technical Director of EquipSent Studies a Le al Chief of Stevedoree Chief of Longshoemnr Chief of Rquipment opratore hIIIIII ave r1 erith on2 th e thia Directrte a2 dof erohe an Teraiih 2 a are u ac 92 h 198A 4 II DirDirector Amnsrtv Of!a Director Genra T7chical-Dire ctor Director LeaFirco quipeent Personnel -Commercial Berh 1 Berh 2 Berh -Training Accounting Social Cost Accountint General -Budgeting Equipent -Caeh management ej' The reorganisation of the Technical Directorate and of Personnel and Training was carried out in March 1982. The eWstablishment of the Directorate of Pinance wase decided in September 1982. Source: OBEMAP. WAPT2 Apr. 1984 - 89 - ANil 5.1 COTONOU PORT PROJBCT PROJCT COPLETION REPORT PAST TRAPPIC 0R MIN AND TRANSIT TRAPPIC 1968-1982 (in thousand tone) .196k1 19§j ±0 1971 1972 2 174 i 1976 _= 1978 19229 .9. i1M 498 upo1t8 214 286 272 316 376 364 398 396 484 550 618 580 649 776 721 Uzporte, 100 12 129 1~j 12 B 114 68 46 47 Total 515 IR rl 452 4 Imports 68 87 113 96 132 180 2122/ 182 186 207 2302/ 221 205 329!! 318 EAporta 62 47 4 J1 1 _ L 2 _£ - 6 4 6 7 6 Total 130 134 15 132 163 4 2Ï4 201 200 21Y 234 22 3Z 2 Nigeria I7Porte 0 0 0 0 0 0 0 68 113 213 15; 633,Í 1 1 18 Exporte 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 3r - - - -o d -w3 -a -T -T TE i T 2 2 2 2 3 l 2 1 2 2 6 7 12 5 23 area Total 446 608 681 686 7.0 4 M 4&1 2 2 1.16 a/ Drought year. il Drop in groundnut exports. a/ Inoluding 627 thousand ton of oil tranehipzent. Detailed tableg by ooanod'.ties ar' iaport-exporte are available ia projeat file, and in Central ile, Statistiques Annuellem PAC, 1979-1982. Souroe: PAC Annual Traffic StatiatioG (Ref. 7). VAPT2 Apr. 1984 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PAST TRAFFIC FOR SENIN AND TRANSIT TRAFFIC, 1966 - 1982 CI -H-ULAvD TM X, 4M ALX, ZVOW COAST 1,2889 j L88L' 408- 68 80 78 71 72 73 74 75 70 77 76 79 69 61 62 0 I *MALU, IVORY COAST - LESS THAN IX 660CNEE - LESS THAN I X BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PAST TRAFFIC FOR BENIN AND TRANSIT TRAFFIC, 1968 - 1982 90- 80- 70- 60- z c>S w 40- 30- MI, IVORY COAST 20 - NIGERIA iNIGER 68 09 70 71 72 73 74 76 76 77 78 79 808 1 82 MALL IVMRY COAST - LMSS THAN IX ~UM0A - LiSS TAN ix -92 ANNEX 5-2 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PORT PRODUCTIVITY Average Shipment Average Staying Time Average ProductivitZ (tons) (hours) (tone per ship hour) 1978 1980 1981 1 1978 1980 1 1 972 1978 1980 1981 9 Containers 796 1,536 61 131 13 12 Mixed Vessels 523 1,912 1,836 150 131 124 3.4 14.6 14.8 Cereals 3,351 3,664 3,595 380 470 290 8.8 7.8 12.4 sulphur 2,285 3,858 2,958 99 115 140 23.1 33.5 21.1 Clinker 4,766 17,000 20,193 18,591 213 205 202 248 22.3 82.9 99.9 74.9 Tankers 6,323 4,320 130 50 48.6 86.4 General Cargo 523 1,009 739 1,200 150 87 61 84 3.5 11.6 12.1 14.3 Source: Random sampling by Bank mission. BERTH OCCUPANCY RATES, IN % Berth 1979 1980 1981 1982 Q 1/ 72 73 66 14 Q 2 79 73 57 58 Q 3 69 83 61 61 Q 4 65 74 43 39 Q 5 3 61 Q 6 46 1 Berth 32 Q 8 1 1 Berth P 1 44 P 2 74 79 73 47 C 67 61 38 32 Average 67 64 49 39 a/ Rented to oil exploration companies from 1981 onward. Used c ;asionally by PAC. b/ Oil tankers berthing at berths PI-P2. Sources: OBERAP statistics, compiled by Association staff, PAC's Annual Traffic Statistics (Ref. 7). WAPT2 May 1984 ANNEX 5-4 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PORT PRODUCTIVITY: COMPARISON WITH SELECTED WEST AFRICAN PORTS Selected Ports Tons per Ship/Hour at Berth 1. Cotonon (1982) General Cargo and Mixed 15 Clinker 75 Tankers 86 2. Abidjan (1981) Overall General Cargo 29 of Which: Conventional and Mixed Vessels (27) Container Vessels (54) Ro/Ro Vessels (40) Clinker and Other Bulk 63 3. Banjul (1983) Overall General Cargo 24 4. Conakry (1983) Overall General Cargo (est.) 15 5. Dakar (1983) General Cargo Except Full Container and Ro/Ro Vessels (est.) 15 Full Container Vessels (est.) 80 Ro/Ro Vessels (est.) 100 6. Douala Overall General Cargo 28 of Which: General Cargo and Mixed Vessels (24) Full Container Vessels (125) Ro/Ro Vessels (53) Mineral Carriers (Mainly Clinker and some Loge) 88 Tankers 273 7. agos General Cargo Except at Container Berth 15 Average Containerized at Container Berth 52 8. Pointe Noire General Cargo (All Vessels Except Petroleum and Manganese) 18 VAPT2 Apr. 1983 - 94 ANNEX 5-5 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT TRAFFIC PROJECTIONS BY CATEGORIES OF COMMODITIES (WITH THE PROJECT) (in tone) 1979 1982 1985 1988 1991 1994 1997 2000 Imports Bulk Petroleum products 789,835 229,353 242,310 266,357 295,302 336,681 383.859 4W7,890 Clinker 256,386 248,114 250,000 280,000 320,000 400,000 456,400 520,900 Cereals 78,097 183,768 184,200 229,081 282,400 353,100 408,600 471,945 Sulphur 57,995 43,245 77,110 97,150 122,370 122,370 122,370 122,370 Subtotal 1,182,313 704,480 753,620 872,588 1,020,072 1,212,151 1,371,229 1,553,105 General Cargo Cement 0 1,000 40,000 15,000 12,400 48,600 60,000 72,000 Conet. materials 49,269 40,179 42,000 47,764 55,674 74,757 85,648 98,086 Food Products 69,385 119,308 76,400 79,100 82,300 102,300 131,529 165,775 Fertilisers 12,527 14,321 16,500 19,000 22,300 28,400 37,286 50,699 Equipment 20,946 44,038 54,200 62,900 72,000 78,200 102,100 118,000 Vehicles 9,727 9,299 13,760 19,720 28,400 33.300 38,500 46,000 Miscellaneous 96,747 148,113 138,900 153,400 169,600 198,200 232,300 272,000 Subtotal 258,601 376,258 381,760 396,884 442,674 563,757 687,363 822,560 Total Imports 1,440,914 1,080,738 1,135,380 1,269,472 1,462,746 1,775,908 2,058,592 2L375,665 Exports Vegetable oil 12,717 10,901 25,000 28,000 32,000 41,000 47,000 55,000 Cotton seed, cakes 17,534 12,444 13,300 8,500 10,000 12,000 13,000 14,000 Cotton 4,174 2,834 3,446 3,733 4,047 4,390 4,765 5,174 Other agriculture 11,081 11,781 15,300 17,300 21,400 26,000 29,000 32,000 Miscellaneous 11,384 9,692 10,425 10,425 10,425 10,425 10,425 10,425 Total export 56,890 47,652 67,471 67,958 77,872 93,815 104,190 116,599 (except uranate) Uranate 4,283 6,122 7,711 9,715 _ 12,237 12,237 12,237 12,237 Grand Total 1,502,387 1,134,512 1,210,562 1,347,145 1,552,855 1,881,960 2,175,019 2,504,501 Detailed tables by country are available in project file (Ref. 9). Sources: Consultant's Report (Ref. 4) and Association Staff estimate (Ref. 9). WAPT2 Feb. 1984 - 95 - ANNEX 5-6 BENIN COTONO4 PORT PROJECT PROJECT COMPLETION REPORT CONTAINERIZATION RATES PROJECTIONS (W) 1982 1985 1988 1991 1994 1997 2000 Conet. materials 20 30 35 40 45 47 50 Food prclucts 40 60 70 80 90 95 95 Fertilizer 40 60 70 80 90 95 95 Equipment 20 30 35 40 45 47 50 Vehicle and parts 13 18 23 26 29 32 33 Miscellaneous 35 50 62 70 80 85 85 Uranate 0 0 0 0 0 0 0 Other exports 30 45 53 60 70 75 80 Source: PAC Annual Traffic Statistics, 1982 (Ref. 7), and Mission estimate (Ref. 9). The containerization rates for the year 2000 are from Consultant Report, Vol. II s.:V, p 82 (Ref. 4). WAPT2 Apr. 1984 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PROJECTED AVERAGE SIZE OF SHIPMENTS AND NUMBER OF SHIPS (WITH THE PROJECT) (in tons and in units) 1982 1985 1988 1991 1994 1997 2000 Bulk Carriers Oil tankers 4320/53 4400/55 4500/59 4600/64 4700/71 4800/79 4900/89 Clinker ships 18591/13 19000/13 19000/15 19000/17 19200/21 19400/24 19600/27 Sulphur ships 2958/15 3000/21 3100/31 3200/38 3300/37 3400/36 3500/35 Cereal carriers 3595/51 3600/51 3650/62 3700/76 3800/92 3900/104 4000/117 General Cargo Tramps 600/85 600/80 600/65 600/63 600/63 600/66 600/73 General I 1200/85 1250/76 1300/60 1350/57 1400/55 1450/56 1500/59 General II 1500/68 1550/61 1600/49 1700/45 1750/44 1800/45 1900/47 Mixed vessels 1836/32 1836/32 1800/33 1800/35 1800/43 1800/51 1800/60 Container ships 1536/69 1600/98 1650/132 1700/162 1800/220 1850/274 1900/326 Source: Association Staff estimates (Ref. 9) and Consultant's Report (Ref. 4). WAPT2 May 1984 - 97- ANNEX 5-8 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT PROJECTED SHIP SERVICE TIME AND PORT PRODUCTIVITY BY CATEGORY OF SHIPS (WITH THE PROJECT) 1982 1985 1988 1991 1994 1997 2000 Oil tankers Id/ 86.4 90 90 92 92 92 92 ST ' 50 49 50 50 51 52 53 Clinker ship P 74.9 75 78 80 80 82 82 ST 248 253 243 237 240 236 239 Sulphur ship P 21.1 22 23 25 27 28 28 ST 140 136 134 129 122 121 125 Cereal carriers P 12.4 15 18 20 20 20 20 ST 290 240 202 185 190 195 200 Tramp ship P 14.3 15 16 16 17 17 18 ST 42 40 37 37 35 35 33 General I P 14.3 15 16 17 18 19 20 ST 84 83 81 79 78 76 75 General II P 14.3 15 16 17 18 19 20 ST 105 103 100 100 97 95 95 Mixed carriers P 14.8 15 16 18 19 20 21 ST 122 122 112 100 95 90 86 Container ship P 25.1 28 30 30 32 32 35 ST 61 57 55 57 56 58 54 a/ Productivity in tons per hour ut berth. / Staying time at berth, in hours. Source: Consultant's report (Ref. 4) and Association Staff estimates (Ref. 10). WAPF.2 May 1984 - go - a BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT COST BENEFIT ANALYSTS EFFECT OF SERTH LENGTH INCREASE SUMNARY OF COST AND BENEFIT FLOOD (IN uSoooQ YEAR 1979-1900 1991 1987 1903 1994 1905 1906 1997 1909 WAITING PLUS SERVICE COS WAIT COST BENIN W.OUT 9618.52 9610.52 16242.?4 16242.24 16742.24 20299.72 20299.77 20298.72 1%r76.98 WAIT COST NIGER 6.OUT 5229.48 5229.48 7404.84 9062,17 10189.70 8016.53 9?39.45 1061Z.11 0C96.99 WAIT COST OTH. MIGUT WAIT COST BENIN WITH 10039.16 10039.7A 7003.05 7003.0! 7003.02 7301.?0 7301.70 730.0 8034.2! #AIT COST NISER WITH 5109.24 5109.24 3341.9*. 3341.95 3341.91 2818.30 2830.30 2919.30 3165.7 VAIT COST OTHER WITH FROJFCT COSTS CONSTR. COS' 20700.00 20700.02 COST TECH. ASS 600.00 400.00 600.00 300.00 BENEFITS PE#IN,MAIT./SERV TIRE -421.?4 -421.24 9239.IV 9239.19 9239.19 32997.0: 12997.02 12997.02 7542.63 HISFO,AIT.?SERV TInE 120.24 120.2^ 4062.89 5720.2? ?047.2" 5198.2! 6421.11 '793.91 7821.24 OTHER-tkIT/SERV TI*E AVOIDED TRAF. DIVERS. BE 230.27 820.34 1252.10 1511.16 2014.R 2518.60 3022.32 AVOIDED TRANSPORT COST N 32.0o 154.00 1914.00 2310.02 1000.00 3090.00 620.00 SAY. SN LAND OPERAT. SER 625.53 667.29 670.60 690.78 702.96 732.54 764.73 79'.79 SAY. ON .ANDb OPEROt. HIS 251i,1 789.84 :7579 ?A4.49 i53.17 741.86 232.29 277.72 lihu* ON LAND OPERA*. 011 54.80 35.61 30.45 24.36 17.0 17.40 10.27 10.27 ------------------------------------------------------------------------------------------------------------- YEAR 1989 1990 1991 1992 1993 1994 1995 1996 1997 ------------------------------------------------------------ ---------------------------------------------------- WAITING PLUS SERVICE COS WAIT COST DENIl W.OT 15576.80 15576.88 15970.0 15879.85 11SVS,05 54204.7 S4204.57 54204.52 13062S.$5 WAIT COST NIGER M.OUT 1050.02 10848.94 8.12.65 102,70 10123.13 12011.47 10011.72 07303.23 19983.86 WA1T COST OTH. t.OUT WRIT COST BtN1 WITH 8034.25 8034.2, 8604.0' 8604.85 8604.0; 11178.38 11120.10 11128.18 18760.02 WAIT COST NIGER WITH 3165.75 3165.75 3545.1! 3545.12 3545.1 5072.82 3072.92 5072.02 7290.18 WAIT COST OTHER WITH PROJECT COSTS CONSTR. COST COST TECH. ASS BSEEFITS BENIN,WAIT./SERV TINE 7542.63 7542.63 7274.00 7274.00 7274.00 44076.A9 43076.39 43076.39 111864.73 NIOER.tAIT./SERV TIME 8892.27 7683.19 4777.50 3477.55 6577.98 6940.65 9730.90 12230.41 11693.68 OTHER,VAIT/SERV TIME AVOIDED TRAF. DIVERS. BE 3454.08 3094.28 2302.72 1727.04 2993.4 3310.16 4317.60 5253.08 5540.92 AVOIDED TRANSPORT COST ft 5200.00 4/30.00 3320.00 2640.00 4Z76.00 506C.00 6600.00 0030.00 0470.00 SAY. ON LAND OPERAT. SEN 835.20 875.27 916.9$ 978.7, 1044.07 1116.21 1171.89 1230.18 1292.82 SAU. ON LAND OPERAT. RIO 223.59 ?24.46 725.33 230.55 235.77 241.86 247.08 253.17 259.26 SAV. ON LAND OPERAT. OTH 18.27 19.14 19.14 20.01 20.01 20.890 21.7 22.62 22.62 ---------------- -------------------------- YEAR 1998 1999 2C'0 WAITING PLUS SERVICE COS WAIT COST BENIN .DUT 130625.5 130625.5: 7508G.35 VATT COST NISER N.OUT 20032.53 21945.24 23017.24 WAIT COST 0TH. V.0tT AIT COST SEWIN Vilm 19760.92 18760.82 36714.75 tAIT COST IGER WITH 7290.18 2290.1g 1142025 WATT COST OTHER WITH PROJECT COSTS CONSTR, COST COST TECH. ASS BENEFITS BEMItVSAIT./SERV TIME 111864.73 111864.73 38865.60 NIGER,WAlT./SERV TIME 13542.35 14655.00 0596.99 OTHER,VAIT/SERY TIME AVOI D TRAF. DIVERS, BE 6116.60 6490.?9 6490.9 AV018ED TRANSPORT COST * 9350.00 9922,00 9922.00 8A. O LAND OPERAT. BE" 1351.98 1114.62 1980.74 SAY. ON LAND OPERAT. NIB 265.35 272.31 280,14 SAy. ON LAND OPERAT. OTH 22.62 2349 73.49 -99- ANUK 6-2 0OTOU PORT PROJCT PROJECT COMM490 REPOM? =BAeIC DivæRSIOg TO LO=NITROVT CASE) (in thousand tone and nm~ber of uhipø Cesent General Cargo No. of Total Containers Kled Vesels Tra Gen. Cao I Gen. Cargo II Tone 10' . in tone 105 Ro. of ships No. of sbip No. of 8hipes o. of shipa mo. of shipe 1983 >O 16 3 1 3 3 2 1984 0 57 12 4 11 11 9 1985 . 0 87 23 6 14 15 12 1986 0 105 25 1 17 18 15 1987 140 33 10 22 24 19 1988 %0 175 42 12 28 29 24 1989 2 206 66 12 27 27 29 1990 8.) 4. 232 74 14 30 30 32 1991 12 6 202.6 74 12 22 20 18 1992 3 14 135.6 49 8 15 13 12 1993 36'à 21 93.6 34 5 10 9 8 1994 48.6 28 159.4 66 1 13 13 11 1995 52.6- 30 177.4 74 10 *4 14 12 1996 56.6 32 243.4 102 14 19 19 17 1997 68.0 35 305 137 18 15 21 18 1998 64.0 37 321 144 19 16 22 19 1999 68.0 40 357 160 21 18 25 21 2000 72.0 42 379 174 22 19 23 19 Sorce: Nisaion estimate. Detalled calaulatin available in Project File, vorking papero (Ref. 10). APT2 Apr. 1984 10 - ANNEX 6-3 BENIN COTONOU PORT PROJECT PROJECT COMPLETION F ;ORT LABOR CONTENT OF CARGO HANDLING AND TRANSPORT OPERATIONS, FY1982 (in US$) PAC OBEMAP OCBN Trucking a! Total revenue (103) 4725 5714 9428 n.a. Staff costs (103) 1303 4285 3505 n.a. Tonnage or ton-km (103) 1.166 1.166 85 n.a. Staff cost/ton, ton-km or trip 1.11 3.67 12.27 12.5 Average cost per ton, ton-km or trip 4.05 4.90t/ 33.00 a/ From Parakou to Niamey. b/ The corresponding figure from FY1979 was US$5.77 at 1982 prices. Source: Accounts of National Companies (PAC, OBEMAP and OCBN) and annual activity reports, year 1982 (Ref. 7 and 8). WAPT2 Apr. 84 - 101 - BENIN COTDOU PORT PROJECT ANNE= 6-4 PROJECT COMPLFTION RFPORT COST BENEFII ANALYSI? IRR BERTH LENGTHs SPHIN -UhMARY OF COST AND BERFFIl FLOWS (iN US4000) YEAR 1979-1980 1981 1982 1981 1984 1985 1986 1987 1988 PRO.ECT COSTS CONSTR. COST 20700.00 20700.00 COST TECH. ASS 600.00 600.00 600.00 300.00 BENLFITS RENIRNAIT./SERY TIME -421.24 -421.24 9239.19 9239.19 9239.19 12997.02 12997.02 12997.02 7512.63 AVOIDED TRAF. DIVERS. BE 2.40.27 820.34 122.10 1511.16 2014.88 2518.60 -3022.32 SAY, ON LAND OPERAT. F.N 625.53 667.29 678.60 690.78 702.96 732.54 764.71 797.79 -------------------------------------------------------------------------------------------------------------------------------- YEAR 1989 1990 1991 1992 1993 1994 1995 1996 1997 -------------------------------------------------------------------------------------------------------------------------------- PROJECT COSTS CONSTR. COST COST TECH. ASS BENEFITS BENINPWAIT./SERV TIME 7542.63 7542.63 7274.00 7274.00 7274.00 43076.39 43076.39 43076.39 111864.73 AVOIDED TRAF. DIVERS. BE 3454.08 3094.28 2302.72 1727.04 2993.S4 3310.16 4317.60 5253.08 5540.92 SAY. ON LAND OPERAT. BEN 835.20 85.22 916.98 9'8.75 1041.87 1116.21 1171.89 1230.18 1?92.82 YEAR 1998 1999 2000 PROJECT COSTS CONSTR. COST COST TECH. ASS BENEFITS BENINPAIT./SERV TIME 1!1864.73 111864.73 38865.60 AVOIDED TRAF. DIVERS, BE 6114.60 6490.79 6490.79 SAV. ON LAND OPERAT. DEN 1351.98 1414,6? 1480.74 STREAM NAME INTERNAL RATES OF RETUXN FOR NFT STREAMS N.BEN 20.622 - 102 - BENIN COTONOU PORT PROJECT Afl! 6-5 PROJECT COMPLETION REPORT COST BENEFIT ANALYSIS IRR BERTH LENGTHt GLOBAL SUMMARY OF COST AND BENEFIT FLOUS (IN US4000) YEAR 1979-1980 1981 1982 1983 1984 1985 1996 1987 1988 PROJECT COSTS CONSTR. COST 20700.00 20700.00 COST TECH. ASS 600.00 600.00 600.00 300.00 BENEFITS BENINtWAIT./SERY TIME -421.24 -421.24 9239.19 9239.19 9239.19 12997.02 12997.02 12997.02 7542.63 SA. ON LAND OPERAT. BEN 625.53 667.29 678.60 690.78 702.96 732.54 764.73 797.79 NIGER#MAIT./SERV TINE 120,24 120.24 4062.89 5720.22 7047.25 5198.25 6421.15 7793.91 7821.24 OTHERPHAIT/SERV TIME AVOIDED TRANSPORT COST H 352.00 1254.00 1914.00 2310.00 3090.00 3850.00 4620.00 SAV. ON LAND OPERAT. NIG 254.91 288.84 275.79 264.48 253.17 241.86 232.29 222.72 ------------------------------------------------------------------------------------------------------------------- ------------- YEAR 1989 1990 1991 1992 1993 1994 1995 1996 1997 ------------ ------------------------------------------------------------------------------------------------------------------ PROJECT COSTS CONSTR. COST COST TECH. ASS BENEFITS BENINtWAIT./SERV TIME 7542.63 7542.63 7274.00 7274.00 7274.00 43076.3? 43076.39 43076.39 111864.73 SAY. ON LAND OPERAT. BEN 835.20 875.22 916.98 978.75 1044.87 1116.21 1171.89 1230.18 1292.82 NISER,WAITJSERV TIME 8892.27 7683.19 4777.50 3477.55 6577.98 6940.6b 9738.90 12230.41 11693.68 OTHERPWAIT/SERV TIME AVOIDED TRANSPORT COST N 5280.00 4730.00 3520.00 2640.00 4576.00 5060.00 6600.00 8030.00 8470.00 SAY. ON LAND OPERAT. NIB 223.59 224.46 225.33 2.0.55 235.77 241.86 247.08 253.17 259.26 YEAR 1998 1999 2000 PROJECT COSTS CONSTR. COST COST TECH. ASS BENEFITS BENINiEAIT./SERV TIME 111864.73 111864.73 38865.60 SAV. ON LAND OPERAT. BEN 1351.98 1414.62 1480.74 NIGERtWAIT./SERV TIME 13542t35 14655.06 8596.99 OTHER,WhIT/SERV TIPE AVOIDED TRANSPORT COST N 9350.00 9922.00 9922.00 SAY. ON LAND OPERAT. HIS 265.35 272.31 280.14 STREAM NAME INTERNAL RATES OF RETURN FOR NET STREAMS N.Toa 26.406 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT COST RENEFFI ANALYSIS EFFECT BREAKWATER/DREDGING SUMMARY OF COST AND 8ENEFIT FLOW (IN USt000) YEAR 1979 1980 1981 1982 1983 1984 1985 1986 1987 PROJECT COST COST BREAKWATER 2690.00 2690.00 2690.00 COST DREDGING 2243.00 2243,00 2243.00 DENEFIl FLOWS AVOIDE0 DREDG. COST 970.00 1095.00 1237.00 1360.00 1465.00 1525.00 1567,00 1608.00 VALUE OF LAND CREATION 157.00 150.00 675.00 67500 675.00 675.00 675.00 675.00 O YEAR 1988 1989 1990 1991 1992-2000 PROJECT COST COST BREAKWATER COST DREDGING BENEFIT FLOWS AVOIDED DREDG. COST 1642.00 1672,00 1755.00 VALUE OF LAND CREATION 675.00 675.00 675.00 675.00 STRFAM NAME INTERNAL RATES OF RETURN FOk NET STREAMS N.DRE 8,929 - 104 - BENIN COTONOU PORT PROJECT 6-7 PROJECT COMPLEIN REPORT COST BENEFIT ANALYSIS TOTAL PROJECT SUMMARY OF COST AND BENEFIT FLOUS (USS000) YFAR 1979 1980 1981 1982 1983 1984 198t 1996 1907 PROIECT COST CONSTR. COST 20700.00 20700.00 20700.00 COST TECH. ASS 600.00 600.00 600.00 600.00 300.00 COST BREAKWATER 2690.00 2690.00 2690.00 COST DREDGING 2243.00 2243.00 2243.0 BENEFIT FLOtS BENIN,WIT.ISERV TIME -421.?4 -421.24 -421.04 9239.19 9239.19 9239.19 12997.02 17997.02 12997.02 SAY. GN LAND OPERAT. BEN 625.53 667.29 678.60 690.79 702.96 732.54 764.73 NISER,UAIT./SERV TIME 120.?4 120.24 120.24 4062489 5720.27 7047. 7 5198.2: 6421.15 7793.91 OTHER,AITISERV TIME SAY. ON LAND OPFRAT, OTH 34,80 35.67 30.45 24.36 17.40 17,40 18.27 AVOIDED TRANSPORT COST N 3S2.00 125i.00 1914.00 2310.00 3080.00 3850.00 SAY. ON LAND OPERAT. NIG 254.91 280.84 275.79 264.4 253.17 241.86 232.29 AVOIDED OREDG. COST 970.00 1091.00 1237.00 1360.00 146!.00 1S25.00 1567.00 1608.00 VALUE OF LAND CREATION 157.00 450.00 675.00 675.00 675.00 675.00 675.00 675.00 --------------------------------------------------------------------------------------------------------------------------- YEAR 1988 1989 1990 1991 1992 1993 1994 1995 1996 --------------------------------------------------------------------------------------------------- ------------------------ PROJECT COST CONSTR. COST COST TECH. ASS COST BREAKUATER COST DREDOING BENEFIT FLOtS 8ENIN,MAIT./SERV TIME 7542.63 7542.63 7542.63 7274.00 7274.00 7274.00 43076.39 43076.39 43076.39 SAV. ON LAND OPERAT. BLN 797.79 835.20 875.2" 916.98 978.7t 1044.87 1116.21 1171.89 1230.18 NISER,uAIT./SERV TIME 7821.24 8892.27 1683.19 4777.50 3477.55 4177.98 A9i0.65 9730.90 12230.41 OTHER,WAIT!SERV TIME SAY. ON LAND OPERAT. OTH 18.27 18.27 19.14 19.14 20.01 20.01 20.9 21.715 22.62 AVOIDED TRANSPORT COST N 4620.00 570.00 4/30.00 3520.00 2640.00 i376.00 5060.00 6600.00 8030.00 SAu. ON LAND OPERAT. HID 222.72 223,59 224.46 225.33 23O.5, 235.77 241.96 247.08 253.17 AVbIDED DRE0G. COST 1642.00 1672.00 1755.00 VALUE OF LAND CREATION 675,00 675.00 675.00 675,00 ---------------------------------------------------------------- YEAR 1997 1998 1999 2000 ---------------------------------------------------------------- PROJECT COST CONSTR. COST COST TECH. ASS COST BREAKWATEq COST DREDGING BENEFIT FLOUS CNIN.UAIT./SERV TIME 111964.73 111864.73 111864.73 38865.60 SAY. ON LAND OPERAT. BEN 1292.82 1351.98 1414,62 1480.74 NIGER,WAIT./SERV TIRE 11693.68 13542.35 14655.06 8596.99 OTHERrVAIT/SERV TIME SAY. ON LAND OPERAT. 0TH 22.62 22.62 23.49 23.49 AODED TRANSPORT COST N 8470.00 9350.00 9922.00 9922,00 $4Y. ON LAND OPERAT. HIG 259.26 265.35 272.31 280.14 AVOIDED DREDG. COS- VALUE OF LAND CREATION STREAM NAME INTERNAL RATES OF RFTURN rQk NET STRFAMS N.TOT 24.923 001mo ToiRP PINW' REVEUE AC0MIS - VMS D BMDEMB 31 (CM million) I9Tr 178 1979 190 191 19 Provisional %biimte åktual Fbast ktua l Fbre~at ktuall Frecsst Actual orcast ktufl Fbrecast PAC An~nied Operating .ew L9.00 781.10 945.0C ffO.45 1,252.O 1,038.96 1,825.00 1,560.71 3,296.00 1,448.95 3,772.00 2,516.42 2,516.42 nwm-Ua~ rrt Dnj~s 17.0 30.05 18.0 15.76 19.0 19.9D 20.00 114.14 21.00 169.68 22.00 142.68 142.68 Ukt l 811.15 963.00 896.21 1,271 1,ÖD 8.8 1,845.00 1,674.85 3,317.0) 1,618.63 3,~94.0) 2,659.10 2,659.10 Oýper_tag rene kcrking ETM-e 394.00 442.94 427.00 530.76 465.00 607.95 506.GO 696.12 551.00 M4.59 600.O 1,046.10 1,046.10 LP,natiar 189.00 189.«) 189.00 95.68 509.O 286.93 589.00 683.33 945.00 661.75 945.OD 630.24 930.05 TotaI ä53.« 631.94 616.0) 626.44 1,354.0) 894.8 1,9.00 1,379.45 1,496.«0 1,466.34 1,545.0 1676.34 1,976.15 293.00 179.21 347.00 269.77 217.00 163.95 750.00 295.40 1,821.00 152.29 2.249.00 92.76 682.95 hrac Olargem Het ¯f Tnterest Icm 2100 24.18 19.00 22.91 17.00 31.48 94.00 31.26 26.00 563.49 375.00 783.15 :15 Ret Icm )fz eperations e rth Year 272.M 155.03 328.00 246.6 200.OD 132.50 656.00 264.14 1,535.00 (411.20) 1,874.00 199.61 (10.W) EtabU~ Costa Writtei Off - n.a. - 44.58 - 10.62 - 10.62 - 10.62 - 10.62 10.62 ror-fipertirm ewt., ret of T<f>PEratng F~epts, includire pricr *ear' Maustente 19.00 (0.73) 23.w (15.55) 27.00 (36.45) 100. (15.41) 9.00 134.24 10.00 (8.76) (88.76) PrMvi3io for ubtfu Dbts - - - 8.21 - 3.97 - - 204.48 34.48 Othr PMvisions - 74.06 - 2.06 - - - 14.87 20.40 - 37.35 37.35 Ca1 t al e re -- - - - - - - (6.14) - (20.30) (20.30) Oeent 24Me of Net arplus - 40. - 103.78 163.00 77.18 607.OD 127.03 1,434.0Q 1,752.00 - ToDal Erttsodinary ItEM 90 141 23, 132 1000 55.32 617.00 137.11 1,443.00 592 1,2.0 143.39 143.3_9 re> 3wP (Deficit) etaind Iry FAC 253.D 40.85 305.00 103.78 10.00 77.18 39.OD 17.03 9.00 (570.32) 112.00 56.22 (243.59) ulative 2w340 40.85 558.00 144.63 568.00 221.81 M.D0 348.84 699.c (221.48) 811.00 (165.26) (465.07) kbring Fatin % 45 55 44 59 37 57 77 45 17 55 16 42 41 Opemting htio % 67 78 65 70 82 85 60 82 43 8B 39 63 78 Ftrn of Operating arpnls a AErage Net Fired ~sete in me % 1.9 27.3 2.2 31.4 1.4 3.3 4.9 1.7 9.5 0.9 9.5 5.8 2.4 1:es interest (Het) Cover ty Operating aurplus 13.9 7.4 18.3 11.8 12.8 5.2 8.0 9.5 6.4 0.3 6.0 - 1.3 0.9 I6tt Service cverae 5.2 n.a. 5.4 n.a. 4.5 n.a. 2.8 1.4 5.0 0.9 5.3 1.3 1.3 Sar: a, aoa PAC, acenuecti by bank Gtalf. ¥APt Ft. 14 -~[ i si- L~u~i LL-& Ii i. .a 2 Ln ~ - . -i J.. .. èlí Ik ia lek . a - 107 - ANNEX 7-3 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT SUMMARY OF SOURCES AND APPLICATIONS OF FUNDS (1977-1982) Sources of Funds CFAF million Operating Surpluses 1,743.70 Depreciation 2,846.74 4,590.44 Net Increase in Debt 9.733.41 Grants (Project) 2,512.87 Non-Operating Income, Less Non-Operating Costs 22.66 16,859.38 Applications of Funds Capital Expenditure Project-Fixed Assets 11,970.22 Technical Assistance (PAC) 232.19 Other 1,798.08 14,000.49 Interest (Net) 1,456.47 Increase in Outside Investments 23.42 Loans (Including Tech. Asstce. OBEMAP, OCBN) 466.18 Increase in Net Current Assets: Current Assets 3,182.97 Less Current Liabilities 2,270.15 912.82 16,859.38 Source: PAC (Ref. 8), Association Staff WAPT2 Apr. 1984 REPUBLIC OF BENIN COTONOU PORT PROJECT PAC TRAFFIC STATISTICS FOR PAC 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 -- * --m m- --- ---- - ase m en -ase e ft* .om- NUMBER OF SHIPS 417. 420. 425. 430o 432, 435. 450o 462. 476. 494. 507. TOTAL 1ONNAGE 1132. 1154. 1178. 1208. 1243o 1285# 13456 1402. 147.ot 1551. 1586. AVERAGE STAYING TIME 4.91 4.81 4,64 4.59 4.50 4.45 4.33 4.23 4.24 4.15 3.99 PRICE INDEXES NATIONAL INrLATION 0.150 0.120 0#100 0.100 0.100 0.100 0,090 0.090 0.090 0.090 0.000 INTERNATIONAL INFLATION 0.080 0.080 0.070 0.070 0.060 0.060 0.060 0.060 0#060 0.060 0.060 SALARY INCREASES 0.150 0.120 0#100 0.100 0.000 0.080 0.080 0.080 0.070 0.070 0.070 STAFF MERIT INCREASE 0.020 0.020 0.020 0.020 0.020 0.020 0.020 0,020 0.020 0.020 0s020 INVESTMENr PRICE INDEX 0.000 0.000 0.000 0.070 0.070 0070 0.060 0.060 0.060 0.060 0.060 DEPRECIATION NATIONAL CURRENs 0.100 0.050 0.050 0.050 0,020 0o020 0#020 0.020 0.020 0.020 0.020 REAL TARIFF INCREASES (1) TARIFF INCREASE ON SHIPS 0.000 0.150 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 TARIFF INCR. ON STAYING TIME 0.000 0.150 0.000 01000 0.000 0.000 6.000 0.000 0.000 0.000 0.000 TARIFF INCR. ON MERCHANDISE 0.000 0.150 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 TARIFF INCREASE ON RENTALS 0.000 0.150 0,000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0,000 TARIFF INCR. FOR WORKSHOPS 0.000 0.000 0,000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 AVERAGE TARIFF INCREASE 0.000 0.150 0.000 0,000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 z OL (1) ON TOP OF LOCAL ZNFLATION ANNEX 7-4 - 109* Page z or 4 REPUBLIC of SEVIN COTONOU PORT PROJECT PAC PROJECTED INCOME STATEMENTS FY 1982-1992 (IN THOUSAND CFAF) 1982 1983 1984 1985 196 1987 1988 1989 1990 1991 1992 ge--- *** *.** REVENUE ON SHIPS 500. 648. 721. 804. 889. 984. 1110. 1241. 1394. 1576. 1749. OEVEOUE ON STAYING TINE 516. 656. 704. 775. 642, 920. 111. 1104. 1243. 1377. 1466. EVENUE ON NERCHANDISE 1909. 19'0. 2212. 2495. 2624. 3211. 3663. 4162. 4771. 5471. 6042. RENTALS 0. * 0. 0. 0. 0. 0. 0. 0. 0. 0. MISCELLANEOUS REVE%UES 206. 231. 254. 279. 307. 338. 369. 401. 437. 477. 515. REVENUE ON WORKENM 0. 0. 0. 0. .0. 0. 0. 0. 0. 0. 0. fORCE ACCOUNT 20. 22. 25. 27. 30. 33. 36. 39. 42. 46. 50. TOTAL REVENUE ON OPERATIONS 2742. 3526. 3915. 4380. 4891. 5486. 6188. 6948. 7889. 8947. 9822. EXPENDITURES agm*ssnoween STAFF COSTS 550. 629. 706. 794. 878. 973. 1083. 1203. 1330. 1470. 1607. 90TERIALS AND FUELS 127. 144. 163. 184. 199. 215. 236. 257. 281, 307. 335. GENERAL EXPENDITURES 366. 430. 497. 574. 663. 766. 877. 1003. 1148. 1314. 1499. TOTAL VORKING EXPENDITURES 1043. 1203. 1366. 1552. 1740. 1954. 2195. 2463. 2759. 3091. 3432. CASH GENERATION 1699. 2323. 2549. 2828. 3151. 3531. 3993. 4484. 5131. 5856. 6390. Seasmas csvaW wasuawa ssas assms onause WRases Aces=a Assuewassa mes waouse SEPRECIATION ON INFRA 601. 744. 738. 733. 830. 938, 1044. 1188. 1214. 1242. 1273. &EPRECIATION ON BUILDINBS 130. 120. 123. 123. 138. 13,. 138. 138. 189. 189. 189. DEPRECIATION ON EQUIPMENT 152. 196. 195. 292. 293. 295. 306. 314. 328. 356. 374. TOTAL DEPR. (NON REV. ASSETS) 883. 1060. 1057. 1148. 1262. 1371. 1488. 1640. 1731. 1787. 1836. 7OTAL OPERATING COSTS 1926. 2263, 2423. 2700. 3002. 3326. 3683. 4103. 4490. 4679. 5269. NET OPERATING REVENUE 816. 1263. 1492. 160. 1889, 2160. 2505. 2844. 3400. 4069. 4553. Ras==& aexcess smmos *a**asm =auseww ausas 28s3as asses seas asam3s sassam INTEREST CHARSE 883. 721. 701. 658, 673. 942. 1223. 1289. 1412. 1454. 1454. LOSS (GAIN) ON FOREIGN EXCH. 0. 0. 0. 1. 2. 14. 41. 57. 77. 95. 115. FESULT ON OPERATIONS -67. 542. 790. 1020. 1214. 1204. 1241. 1499. 1910. 2520. 2935. =WWWava Waaasu causes= Ca33 an *&3W mcs s3esa33 me3t3as assu3ag **Sus sou33s UAWMAM EXTRA OPERATIONAL REVENUE 92. 103. 113. 125. 137. 151. 164. 179. 195. 213. 230. EXTRA OPEAATIONAL LEPENSES 20. 24. 27* 31. 36. 42. 48. 55. 63. 72. 81. NET RESULT 5. 622. 876. 1113. 1315. 1313. 1358. 1623. 2042. 2661. 3133. 2a23833 a3a3ms sam3sa 28a233 sea33an as su sw33 es ase ass me2s saa 3acaws RATIO WdORKING RATIO 0.38 0.34 0.35 0.35 0.36 0.36 0.35 0.35 0.35 0.35 0.35 OPERATING RATIO 0.70 0.64 0.62 0.62 0,61 0.61 0.60 0.59 0.57 0.55 0.54 (UTEREST COVERAGE RATIO 0.92 1.75 2.13 2.55 2.80 2.26 1.98 2.12 2.29 2.65 2.94 OEST SERVICE RATIO 1.28 1.75 1.52 1.66 1.74 1.70 1.63 1.76 1.76 1.96 1.83 - 11 - REPUSLIC OF SIN' ANNEX -4 tOyDRO0 PORT PROJECT Page 3 of 4 Pac "Waingsn ALM gums " 1982ls lie "HMv CFAF) 1982 1933 1984 1995 1986 1987 1983 1989 1990 1991 1992 ASSata FIXED ASSETS LAnS 0. 9. *. 9. ** * ** * ** ** INFRASTRUCTURE 24762. 24564. 24369. 24176. 27406. 30932. 34453. 39204. 40053. 40988. 42017. BUILDINS 2392. 2392. 2465. 2465. 2762. 2762. 2762. 2762. 3788. 3738. 33. 120IPMENT 1775. 1764. 17?. 2631. 2640. 2657. 2753. 2325. 2950. 3203. 3362. TOTAL 6ROSS FIXED ASSETS 28929. 29721. 23591. 29272. 32803. 3637t. 39948. 44791i 46799. 47976. 49167. DEPRECIATION ON INFRASTRUCT 1407. 1931. 2459. 2962. 3573. 4291. 5115. 6083. 7077. 3099. 912. DEPRECIATION ON BUILDINS 642. 762. 63. 1003. 1146. 1204. 1422. 1561. 1750. 1939. 2129. DEPRECIATION ON EQUIPMENT 796. 912. 1027. 1240. 1453. 1468. 1394. 2128. 2376. 2652. 2945. TOTAL DEPRECIATION 2845. 3605. 4362. 5210. 6172. 7243. 3431. 9771. 11202. 12639. 14226. OTHER INESTNENT 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. TOTAL NET FIXED ASSETS 26064. 25116. 24229. 24062. 26636. 29123. 31136. 35020. 35538. 35289. 34941. OTHER FIXED ASSETS 315. 315. 313. 315. 315. 313. 315. 315. 315. 315. A1S. TOTAL FIXED ASSETS 26399. 25431. 24544. 24377. 26931. 29443. 31653. 35335. 35903. 35604. 35256. CURRENT ASSETS STORES 34. 43. 52. 62. 70. 73. 98. 99. 111. 124. 133. RECEIVABLES 3163. 3291. 3839. 4409. 4785. 4873. *980. 5094. 5235. $394. 5525. PREPAID EXPENSES 0. 24. 43. 76. 105. 137. 173. 213. 257. 307. 353. CASH AVAILABLE S54. 1391. 1639. 2222. 2356. 3063. 3432. 3570. 4453. 6502. 8604. TOTAL CURRENT ASSETS 3752. 4733. 5629. 6770. 7316. 8157. 3723. 3976. 10056. 12327. 14626. TOTAL ASSETS 30150. 30169. 30173. 31146. 34267. 37600. 40574. 44311. 45959. 47931. 49332. SaNSe sAse"SaWSWWW nauseam Seasns gusses useams seaons ama$* Dausage asWsW LIABILITIES .Deauaoae PERMANENT FINANCING CAPTiAL 16571. 16571. 16571. 16571. 16571. 16571. 16571. 16571. 16571. 14571. 16571. RETAINED EARNINGS 792. 1404. 2280. 3393. 4708. 6021. 7379. 9002. 11045. 13705. 16339. LONG TERN DEBT 11040. 10484. 9614. 9484. 11233. 13220. 14749. 16839. 16404, 15699. 14512. TOTAL PERMANENT FINANCING 28393. 23458. 28465. 29448. 32562. 35812. 38699. 42413. 44020. 45975. 47922. CURRENT LIABILITIES ACCOUNTS PAYABLE 1741. 1744. 1746. 1749. 1752. 1754. 1757. 1760. 1764. 1763. 1772. ACCRUALS 16. -33. -38. -Sti. -47. 34. 113. 138. 175. 187. 187. OVERDRAFTS 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 9. TOTAL CURRENT LIASILITIES 1757. 1711. 1708. 1693. 1705. 1783. 1875. 1898. 1939. 1955. 1959. TOTAL LIABILITIES 30150. 30169. 30173. 31146. 34267. 37600. 40574. 44311. 45959. 47931. 49892. seasoan. gwassa net enas ww*=e*asw** saw e sass a wmasse s aesS, amasses Sussman RATI CURRENT RATIO 0.47 0.36 0.30 0.25 0.23 0.22 0.21 0.21 0.19 0.16 0.13 LIDUIDITY RATIO 0.47 0.36 0.31 0.25 0.24 0.22 0.22 0.21 0.19 0.16 C.14 DEST-EGUITY RATIO 0.64 0.538 0.51 0.48 0.53 0.59 0.62 0.66 0.59 0.52 0.43 RATE CF RETURN 0.03 0.05 0.06 0.07 0.07 0.07 0.09 0.08 0.10 0.12 0.13 RATE CF RET. ON REV. ASS. 0.03 0.05 0.06 0.07 0.06 0.06 0.06 0.06 0.07 0.07 0.08 ANNEX 7-4 ra-ST16T 4 - 1.11 - REPUBLIC OF ENIN COTONOU PORT PROJECT PAC PROJECTED SOURCES AND1 APPLICATIONS OF FUNDS FT 1992-1992 (IN THOUSAND CFAFI 1962 198 1984 13 1966 1987 1938 1999 1990 1991 1992 **** ---- *--- *---- ** .. -*-**** ---- -- ** ** LONG TERN SOURCES CASH GENERATED 2323. 2549. 2929. 3151. 3531. 3993. 4494. 5331. 5856. 6399. ORROVINGS 49. 109. 913. 2932. 3054. 2720. 3294. 935. 737. 731. CAPITAL INCREASE 0. 0. 0. 0. 0. 0. t. 0. 0. e. GOVERNMENT CONTRISUTIONS t. 0. 0. 0. 0. 0. 0. 0. 0. 0. NON OPERATING REVENUES 103. 113. 125. 157. 151. 164. 279. 195. 213. 230. NON OPERATING EXPENSES -23. -27. -31. -34. -41. -47. -54. -62. -71. -81. TOTAL LONG TERN SOURCES 2451 2744. 3834. 6184. 6695. 6830. 7902. 6240. 6734. 7269. LONG TERN APPLICATIONS INVESTMENT IN INFRASTRUCTURE 0. 0. 0. 3420. 3733. 3685. 4933. 1026. 1109. 1199. INVESTMENT ON FORCE A;COURT 22. 25. 27. 30. 33. 36. 39. 42. 46. 50. INVESTMENT IN BUILDINGS 0. 73. 0. 297. 0. 0. 0. 1026. 0. 0 INVESTNENT IN EDUIPHENT 69. 73. 954. 89. 97. 175. 152. 205. 333. 240. TOTAL INVESTNENT 92. 170. 981. 3837. 3863. 3896. 5124. 2299. 2453. 1489. INTEREST 721. 701. 656. 673. 942. 1223. 1269. 1412. 1454. 1454. REPAYMENT 605. 979, 1043. 1133. 1117. 1191. 1203. 1420. 1443. 1918. LOSS (GAIN) ON FOREIGN EXCHANGE 0. 0. 1. 2. 14. 41. 57. 77. 95. Its. TOTAL DEBT SERVICE 1326. 1631. 1703. 1606. 2073. 2455. 2549. 2910. 2992. 3486. TOTAL OTHER INVESTMENT 0. 0. 0. 0. 0. 0. 0. O. 0. 0. TOTAL LONG TERN APPLICATIONS 1418. 1851. 2683. $645. $936. 6351. 7672* 5208. 4480. 4975. EXCESS LT. SOURCES / LT. APPLIC 1033. 693. 1151. 539. 759. 478. 230. 1039. 2235. 2294. awns&=*ase*a *wave aaaa *aasg meassW am=oas &easas muses aOss SHORT TERN SOURCES INCREASE ACCRUALS -49. -6. -13. 5. 6t. 94. 20. 37. 13. -0. INCREASE PAYABLES 3. 3. 3. 2. 2. 3. 3. 4. 4. 4. SHORT TERN APPLICATIONS STORE INCREASE 9# 9. 10. 8. 8. 1t. 11. 12. 13. 14. INCREASE RECEIVA8LES 118. 558. 570. 377. 89. 105. 114. 141. 159. 131. INCREASE PREPAID EXPENSES 24. 24. 28. 23. 32. 36. 40. 44. 50. 51. LIOUIDITY INCREASE 837. 298. 533. 134. 712. 414. 8e. 883. 2049. 2102. CASH AT THE END OF PERIOD 1391. 1689. 2222. 2356. 3068. 3482. 3570. 4453. 65024 8604. Source: Association staff estimates. WAPT2 Nov. 1963 - 112- COTONOU PORT PROJECT PROJECT C01MPLION R1PORT FINANCIAL STATENMTS PAC, 08WP. OCI Ineome Statements PAC OMIKAP OCW Consolidated . . 12.. . 1981 !! . . 1981 Operational Revenue 1,675 1,618 2,044 2,005 3,103 3,558 6,822 7,181 Vorkag Easnese 696 804 1,859 1,891 3,291 2,733 5,846 5,428 Csh Generation Mj 814 85 14 (188) 25i Depreciation 683 661 146 129 860 995 1,689 1,785 Net Operating Revenue 96 M. 39 (15) (1IM) (10 (713) _ Interest Charge 31 563 0 0 410 535 441 1,098 Net Result on Operation 26 (410) a (15) (1,458) ((1232) (14130) Non-Operational Revenue 138 160 0 164 205 166 343 470 Not Result 12 (570) (14931 (960) Balance Sheets Assets Gross lized Assets 24,932 29,267 1,071 1,303 13,974 15,181 39,761 Y7 45,409 Depreciation (1,501) (2,162) (745) (874) (4,921) (584) (7,167) (8,877) Net Assets 23,431 27,105 325 429 9,053 91339 32,594 36,532 Stocks 235 2)2 148 183 609 754 1,092 1,139 Short-Term Receivable 1,929 2,238 2,114 2,456 3,019 3,730 7,062 8,424 Csh 370 341 778 692 638 711 1,786 1,744 Liabilities Capital and Reserves 5,671 19.408 923 698 4,318 3,854 10,912 23,960 Long-Term Debts 2,527 9,253 171 91 4,499 5,362 6.981 11 14,384 .2/ Short-Term Liabilities 994 1,225 2,371 2,941 2,507 3,007 5,872 7,173 Bank Overdraft 0 0 0 0 1,995 2,311 1,995 2,311 &/ Reduction in fuel and lubricant consumption by CPAP 200 million, in staff cost by CAP 100 million, and in general expenses by CTAP 300 million, following improved management system implementation, through technical assistance financed under the project. b/ Excluding a CFAF 216 million loan from PAC to OCEN for improvement of Parakou terminal. / Excluding a CFAF 342 million loan from PAC to 00N for improvement of Parakou terminal. Source: Financial Statements PAC, 0MAP and OCMN (Ref. e). VAPT2 Apr. 84 ANNEX 9-1 Page 1 of 2 - 113 - BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT ORGANISATION OF SUPERVISION OF PROJECT EXECUTION A. Organisational Scheme Mebers: Chairman Minister of Plan Minister of Finance Ad Hoc Inister of Transport Conmsion Secretary General Dir. PAC - -r go OBEA PAC "OCEN',- General Director Consultant Project PAC Supervision of - Coordinator Project manager Onstruction Local Pilot Contractor Contractor Contractor B. Specific Aspects 1. The Ad Hoc Commission was under the effective control of the Minister of Plan, who has a key political role in the country. Hence, the Commission's decision reflected Government views. The selection of the General Director of PAC as secretary for executive purpose was also important, as it simplified communications between the Commission and PAC: all supervision work was conducted with PAC's General Director, as General Director and as Secretary of the Ad Hoc Commission. 2. The Project Coordinator greatly facilitated communication bet- ween the nine donors, PAC and supe-vision consultant. He acted as an advisor to the Ad Hoc Commission, through PAC's General Director, and to PAC. He provided them with the necessary technical knowledge and project - 114 - ~ANNEX 9-1 Page 2 of 2 experience. He provided valuable training and experience in project management to PAC'S young project manager and to the young local counter- part to the Project Coordinator. The technological transfer was effect- ive because PAC's Project Manager was responsible for communications between the Project Coordinator rnd PAC's General Director, and there- fore, had a well defined respons:,bility, instead of simply shAdowing the Project Coordinator. The local counterpar; to the Project Coordinator had also specific responsibilities for project accounting and payment request processing. 3. The position occupied by PAC's Project Manager and the local counterpart were very usefull for checking the capacity, motivation, and responsiveness of the young engineers assigned to these positions, with- out formal commitment regarding their future role in the management of the port. 4. The effectiveness of the work was less clear. WAPT2 May 1984 .- 115 - ANNEX 9-2 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT MANAGEMENT OF TECHNICAL ASSISTANCE 1. Initially, consultant's contracts for technical assistance and training were prepared with consultant's commitment to provide qualified experts for given time periods under standard terms of reference putting the emphasis on the consultant's obligation to supply qualified experts, working according to professional standards. Following starting problems for the technical assistance contract, it was envisaged to cancel this contract. The consultant came up with an alternative proposal to: (a) define the expected results of technical assistance in each sub-sector; (b) agree on a revised schedule for achieving results; (c) be given more flexibility for scheduling experts' arrival and departure (with Borrower's agreement); and (d) take financial responsibility for non achievement of ex- pected results in agreed time frame. 2. Also, it was agreed that the achievement of the team, and possi- ble changes were to be discussed and assessed every four months. 3. This arrangement worked satisfactorily and affected positively the attitude of the experts and of the mission leader, who associated more clearly PAC, OBERAP and OCBN's management to their action. It also motivated the experts to: (a) explain clearly to the Beninese authorities what decisions were needed by when; and (b) follow up on pending issues for achieving the agreed targets. The attitude of the Beninese authori- ties toward the experts was also changed. They were perceived as helpers to achieve agreed upon goals, rather than "budget guzzlers" interested mainly in extending their mission. WAPT2 May 1984 - 116 - ANNEX 9-3 Page 1 of 2 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT TECHNOLOGICAL TRANSFER AND MANAGEMENT OF HUMAN RESOURCES 1. PAC and OBEMAP organization charts were modified during project execution. New positions were created and many existing ones deeply modified. In order to adapt the persons to be in charge to their new position, the following approach was adopted: (a) Prepare job descriptions; (b) Get the candidate to work in the new job, without nomi- nating him to the new position, but in association with a foreign expert (in this phase, the candidate "shadowing" the expert); (c) If (b) positive, assign in addition to tasks included in (b), some of the responsibilities for the new job to can- didate, without direct technical assistance for these responsibilities; (d) If (c) positive, send for training; (e) Upon return, give full responsibility for the new job without title; and (f) If (e) positive, give grade and title. 2. The process from (a) to (f) took about two and a half years and there must be a guarantee of stability of the staff in final position. It is characterized by: (i) making clear to candidates that grades or titles must be earned; (ii) defining the final result at an early stage, but making clear that it is conditional upon performance at intermed-te stages; (iii) delivering training at a later stage, when trainee has experienced practically what is expected from him, the objective being that training be felt as an assistance for practical problem solving; and (iv) limiting the duration of stage (b) where candidate is shadowing foreign experts. - 117 - ANNEX 9-3 Page 2 of 2 3. This approach was use with positive results for the following positions: - Director of Studies (PAC) - Director of Port Maintenance PAC) - Director of Finance (OBENAP)1l - Technical Director (OBEMAP). 4. Training and technical assistance after nomination in the job gave less convincing results for the following positions: Title Institution Result Commercial Director8/ PAC poor Director of Finance- PAC poo;21 Chief of Human Resources Dept. PAC averagJ Chief of Human Resources Dept. OBEMAP poor= Chief Statistics aver 5/ Chief Statistics OBERAP p00:- Director of Studies and Legal OBERAP uknown i/ Cycle reduced to 18 months. Stages (b) and (c) reduced to three months for practical reasons. 2/ Director of Finance nominated by the National Executive Council on the recommendation of the Ministry of finance. Replaced during project execution. Considered as a temporary position by titular, hence, low motivation. OBEMAP's Director of Finance is recruited by the company; better results were achieved. 3/and 4/ candidates identified later in the process, nominated before training and on-the-job testing. 5/ Replaced during project execution. / Identified after departure of technical assistance. 7/ Has not yet returned from training. 8/ The Borrower feels that "average" would be a better assessment. WAPT2 Apr. 1984 - 118 ANNEX 9-4 Page 1 of 4 BENIN COTONOU PORT PROJECT PROJECT COMPLETION REPORT EXPERIENCE TO BE DRAWN FROM EXECUTION OF TRAINING COMPONENT OF THE PROJECT Description of Training Program 1. The training program included three components: (a) an outside training program, for upper level staff, mainly abroad, managed jointly by the Commission Ad Hoc and the Association. This component was successful; (b) a local training component in management and cargo handling, to be delivered by experts from the consulting firm; and (c) a local training component to be delivered by in-house trainers, after their training by the consultant. 2. Program (a) and (b) were one-shot operations, while (c) was the beginning of PAC and OBEMAP permanent training activities. Methodology 3. The methodology adopted by the consultant was as follows: (a) Define jobs in PAC and OBEMAP; (b) Assess existing staff capacity; (c) Identify for each staff member the gap between skill re- quired for his/her position and his/her present skill; (d) Prepare a modular training program, to be carried out part by consultant experts, part by local trainers to be trained; (e) train local trainers selected among people on the job; (f) Prepare individual training program and training plano; - 119 - ANNEX 9-4 Page 2 of 4 (g) deliver training sessions by consultant's expert; and (h) deliver training session by local trainers. 4. In parallel, the consultant was to organize training departments in PAC and in OBEMAP. Practical Problems Encountered 5. Phases (a), (b) and (c) of consultant's approach took about 2/3 of their time, with very lengthy disecusion with PAC and OBEMAP's manage- ment regarding (a). The consultant was faced with the following dilemma: on the one hand, he was not in charge of reorganizing PAC and OBERAP, and therefore, was not supposed to modify the organization charts or to pre- pare complete job descriptions; on the other hand, it was not envisage- able to take the existing unsatisfactory organizational system as final (there was a parallel mission by another consultant for managerial, oper- ational and financial reorganization). The individual assessment of existing staff capacity, from the general manager to the stevedores, involved about 3,000 persons. The consultant's ambition was to have questionnaires filled by each individual (although more than 30% of the staff is illiterate), complemented by individual interviews. For phase (c), the gap between present skill and theoretical job requirement was so wide that the preparation of systematic individual plans could not be conducted to the end. 6. In phase (e), problems were encountered for selection of trainers: initially, it was envisaged that trainers would be part time trainers, selected among workers of their specialty. This idea was not feasible, because people to be trained would not accept to be trained by ce-workers of same grade as themselves and therefore not recognized as more qualified and skilled. On the other hand, trainers could not be given higher profeonional level, because then, they would not be prac- ticing the fob they were to teach, or they would be teaching their sub- ordinates, which was rontrary to the training philosophy of consultant., A compromise was worked out by giving a bonue to trainers. but then, there wore tremendous presourn to retain trainpro followinC their poli- tical acquaintances rather than their capacity. In addition, the se- lection process based on profesoyinl eapacity did not work Jin the medium term bocuse, by definition, the neleted petple were from the beinning the beat in their specialty, and thoroforo, the first to be promoted to a hi,her position, 3ut of production. Finally, tht- operation of the train- ing depnrtmcntn both in rAV tod OPFRAP i- oAi nut tltisfac-tory. PAC has reorgnnised itoelf in 19H4, adopting the approach dowribed in paras. 11 and 12, and its truining depnrtment J. now effectivo 40 persona wer. trained durini the fire3. 111111011Itr of V04. It. Tho time allncntit11 for trani tn tr.irwrn wao alout. throo MO1tho. It oti 1er1 110t thl u 0VolrY iminiffiri4,1n fu trtaIformn1 a t od worker i nto an nrl i vu).ate tr inor in t 101 i'enjt . - 120- ANNEX 9-4 Page 3 of 4 8. The delivery of training sessions by local trainers was effect- ive only as long as the consultant was present. As soon as he left, the number of training sessions diminished, as the number of candidates for training dried up. This was due to a gradual weakening of the supply of training services, because of excessive complexity of the candidate identification process (job profile/individual profile comparison), dif- ficulty in maintaining a variable schedule for numerous training modules to be managed simultaneously, difficulty for the local staff in charge to manage the highly sophisticated system as envisaged, after only a few months of exposure to training techniques, and lack of basic knowledge by the staff in charge of the training program of the technique taught and of port operation requirements. On the demand side, the hierarchy had mixed feelings toward training for their staff, which is felt as a threat to their position or a potential challenge to their technical author- ity. Also, the staff lost interest in the operation when it was unde- rstood that attending training sessions did not imply any promotion or material advantage. 9. The organization of the training department was difficult, because competent people with a specialty in human relations are extre- mely rare locally, and, having no future in a technical entity such as a port, are very difficult to attract and retain. In addition, actions undertaken by the Personnel or Training Departments are very often coun- teracted by the operational directorates, which see them as interference of minor divisions of low hierachical level in their own turf. Conclusions 10. Most of the ports in the Region have similar operating condi- tiona, differing mainly by their size. Thcrefore, we believe it is not necessary to prepare new job descriptions for each port, at least for the non-managerial level. Cotonou port is only one example among others where this zero base approach has been adopted. We believe the Bank should have standard job descriptions for standard jobs in port and cargo handling, based on past experience, which could be used at great savings for the countries. 11. For technical level staff, an individual approach for assessing individual capacity and training needs may not be realistic. Training noodo for most of the staff are enormous, otherwise technical assistance would not be needed. Instead of adopting a refined, complex and diffi- cult to manage approach for custom-made inhividual training, a ready-made approach could he enviage4. In this approah, rob job would be ansn- clated to a few otandard training nosnions, and each porcon in the job would have to attend all of these sessions over a certain time span, to be roponted every so often. This approach would imply some redundancy for nome individuals, but it would be incomparably eaisier to manage and moniltor, Ntl Ionionn holig tchediued over a fixed eyc-le. it would also help dioconnot training from autoia,,i promotion, and fricil-itate over- riding the r(iuottvies of upper lovol staff to nond their vnbvordinates on trainint, f it wo lId booma lin ut11mto nmtiinl mniatory procopft. This ANNEX 9-4 Page 4 of 4 crude approach would also permit to cut down on technical assistance costs, perhaps with higher final efficiency. 12. Regarding the selection of trainers, a possibility would be to use for more tAeoretical subject services of teachers from the technical education system, hired on a part-time basis by the port authority, and for practical subject foremen or upper level staff, for whom subordinate training would become part of their job description. This latter ap- proach may not be in accordance with modern practice in developed countries and accepted pedagogic principles, but it has been used with very interesting results in Cape Verde, and successfully in PAC since January 1984, and may be better adapted to the regional context. 13. For the organization of the training unit, its key role should be reflected in its place in the organizational chart. Rather than having it as a division in the Human Relation Department in the Directorate of General Affairs, it should be separated and connected directly to the General Manager, or to the main user, the Deputy General Manager for Operations. Possibly, it may have to be separated f:,om Personnel Administration -- ha%ing Training and Personnel Administration under the same authority, as experienced in Cotonou, implies that the person in charge of training is at least second in line to a Director, and consequently, it has little authority in the company, and qualified people are difficult to hire at such comparatively low level. WAPT2 May 1984 - 122 - APPD COMMISSION , nic OF THE '.Brussels.......... ... .. U ...... EUROPEAN COMMUNITIES AKR/ns DmIECTO"TIENAAL FOR DEVELOPMENT VIII/B/2 THE WORLD BANK N. Yukinori Watanabe Director Operations EvaLuation Department 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Dear Mr. Watanabe, Object : Project Performance Audit report on Benin R#f. : Your Letter oF 23 Decem4er 1985 I thank your for your Letter of 23 D4cember, concerning the audit report on Benin Port. We wiLL Let you have such comments as we may wish to make, by the end of next month. ALL concLusions drawn wiLL of course remain those of-the O.E.D. Yours faithfuLLy, A.K. RUSSELL Head of Division JAN 27 INS Provtiaonul addrlSe Telephon& rlex: Telegrphic des0w Rue do to Lot 200 Direct line 235.. COMEU a 21877 COMEUR Brussels 8-1049 Brussets Telephone exchange. 235 1111 PROM 02 314006 '00.02.09 19t23 ACE 123 APPENDIX 2 HSE1 PS I MESSAGE6ra 1oSA forward coPy to the appropria TEAXOrmation Center as necessary From: Ministry of Development Cooperation, Multilateral Department Oslo, Norvay To : Operations Evaluation Department World Bank, Washii*ton, D.C., U.S.A. telefax no. (202)-477.6391 (Wash.) tt: Yukinori Watanabe Date: 21 February 1986 Further to your letter dated 23 December 1985 concerning the PPAR for the Cotonou Port Project we have, with the assistance of a consultant, prepared the following coaments: > -3 FEB 2~ 5IMS 124- APPENDIX 2 Page 2 of 5 a Ecalfiat perf an Audit 82aa an uanig We have found the above document of considerable interest. As a major donor to this project we particullary value the thoroughness with wich the analysis and asseasment have been car;ted out. The frank and open discussion of project problems and project .proce3sing in the PPAR is eleo very useful and indeed reassuring. We would like to oommmt on the following aspects of the above report: () the different views on the projects as stated in the PPAR and the PCR, (L) the question of excessive investment, Ul) the financial aspect of the project, and (iv) the maoro-economic setting for the project. EM xas M As mentionad above we found the PPAR (i.e. Part 1, II, and III, including annex I ahd 2) veny interesting reeding and agreed with most if the findings in that report. We were happy to read that port productivity has increased, that management is Improved, and that the project is estimated to have a high economic rote of return. We are naturally equally conserned about the large excess capacity of the port and the poor finanoial situation of the PAC. In comparing the PPAR and the PCR there are certain differences of opinion on these mattereas. The PGR claims that "The Association has played an important role in the prepara ion and satiofectory completion of a technically sound, economically justified and financial viable project,..(p.32, para. 8.01)", whereeo the PPAR claims that "IDA io therefore responsible for bringing in other donors agencies 'including ourselves) who now claims that IDA'* reputation for financing fully justifiable operations was what pursuaded thbm to put resources in a project which, in retrospect, appears to be excessively large." We find it difficult to assess the correctness of FROM *O 31400s '.02.09 19125 - 125 - APPENDIX 2 Page 3 of 5 thee views on the beets af date as old as talewhieh Is the latest ectual secounts presented in the PPAR/PGR). de knew that the general economie situation in Benin and its notghbouring coUntrios he mot impreoved recently, and it would probably be meet appropeate to inolde some ceement* on the very latest developments in Sento and how they may effect the traffic over Cotonou. 16M ausatin Al 888 SArASi Actual traffic s ;reported to have been 30 percent below foreast in 1982 (it wo'uld be interesting to know the situation now). The future traffic projections in the PC# seem to be on the high side, and we share the consern of the PPAR that these are indeed ddebatoble*. It to further intereatng to note (PPAR, Annex 1) how this project was very much conceived and processed in physical terms without due regard to the ecoiaomic ono financial aspects of the project. This Is always easy to say in retrospect, but this lesson hae probably been learnt by most aid agencies during the 70s and 80s. We also egree with the view that a more complete look should have been taken on investment requirements in the whole Benin Route (see f.ex. para A.36, p 40) and that a. tariff study would have been most appropriate in the early 70s. It is also argued that the main reason for the worsening port situation in the mid-70s was-not necessarily the physical constraint, but political and organizational problems (p.29). It is also apparent that there were early evidence that the Cotonou port would not bnefit from the projected 400,000 ton of transit freight from Nigeria. These signals should somehow have had an impact on the on-going project. Instead. the project proceeded on the path drawn up in early-mid 70s. We are encouraged to reed about the Increased aspirit-de-corpe in the port, and the attention to cost conoiousness and maintenance among staff. We are, however, concerned about Cotonou's ability to maintain the transit traffic to Niger, "n at the same timse improve its financial situation. This may require several tariff increases over the coming years, and the current comparative advantage over the Lomb route (of 20 - 30 %t the figure differes in the PCR, see pare. 5.18, 7.06, 7.22) may disoapear, ts financil itUation at MD The projected rate of return on financial asset was xn*1992 2,4 %, far below tho projected 8 %. fixed asset have been revalued. There are not much scope of schiving the target rate with the current low traffic situation.-PAC has, however, maintained a comforteble cash position, in part due to considerable tariff increases. It appears from a FROM 02 314006 '0 2.9 193 26 126 APPENDIX 2 Page 4 of 5 'q9k review of the finencal ste*e~te to the Pa that this so, in part. due to Ansaquale proviatost for depreotation. There it a eger that this toy ditnith PAC's ability to pentain sits bsets, amd there oay seen be. a request for a.*rehabiltation" proect. It to stated 4pars. 7. S/PCM) that PAC iould aiMtribute around 25 present to the total investnent plan for PAC. Presumably the Government is expected to Cover the rest. With the current precaitous financial situation of the Sovernment it is doubtful whether this is a good working basis. PAC may consequently have to rely to a larger degree on internal generation of funds for carrying through with required Improvement ?nd maitene.tvestment. This will either require more traffic, higher tariffs, or better use of existing resources (including a reduction in receivables). This will be quite a Challenge for PAC. We are not convinced that the fiercial projections of the POR fully reflect the enviroment PAC may be facing in the coming years. b amAra-aonnain anvirMcni aL Aa acaual It is always easy in retrospect to pes judgement on previous project design decisions. It is, however,. important to learn from post mistakes. One 'spect that we feel have been given to little attention an the PPAR is the macro-economic setting of the Cotonou port project. A reasonably good analysis (albeit outdated) can be found in the 1984 CM on genin. With the launching of the First State Plan (1977 - 1986) Berin's total resource use increased from around 118 1 of GOP to around 140 % of GDP. The real growth in private consumption was relativo moderate in this period (around 3.5 % p.a.), but real investment soared with 20 % p.o. It was particullery the four big projects of - the oil exploration at Sem6 - the sugar project at Sav4 - the cement factory at Onigbolo, and - the Cotonou port preject that contributed to the rapid growth i investment. This in turn led to a domestic construction boom and record levels of imports. This had short-term benefits to the Government in the form of higher import terIffs, but the production from these projects failed to materielne on time, and the debt service problem gradually grew out of hand. The considerable activity in construction and related activities also had a dtrimentafe ffect on agricultural production and rural-urban migration. The Government has since had to reverse its expansionary policies completly, and is now struggeling to keep foreign creditors at arms FROM OZ 714006- .0:.09 1 S - 7 127 -APPENDIX 2 Page 5 of 5 length. Against this nackground one may as whether it was wise to proceed with a project as large as Cotonou at that time. All factors taken into account there may to quite a few economic costs that shold be adde in ao proper economic evaluation of this project. One thing is certoln, however. that the publie inqestment proWramNing was nQt working particullyr well in the mio-70s in Denin. With improved project screening capabilities altuation5 like thie will hopefully not be repeated in Benin today. In conaludrg let me ensure You that it has been very educational to review the above document, and we hope that our comments can os of some oelp. We look forward to neceivin the finl zcopy, and hope otherwise that we will be blO to expand our relationq in theyerlod ahead. 4 Regards, Halvorsen/Semb, Mu1tilateral Department - 128 - APPENDIX 3/1 ZCZC DIST1382 JWS0889 OEDOD REF : TCP FCA JWS0889 JHJO72 IN 05/04:01 OUT 05/04:04 DIRPORT CTNOU TLX NO S4/PAC/OBE/SEE DU 5/3/86 ATT. M. YUKINORI WATANABE We have received your telex of 26 February 1986.and;inform you that we have submitted our comments to the Ministry of Equipment and Transportation and to the Ministry of Planning and Statistics who will send them officially to you. Regards Odon Brice Houncanrin - 129 - APPENDIX 3/2 E-755/86 March 28, 1986 French (Benin) OEDD3 JVS:bas Office of the President of the Republic Cotonou March 17, 1986 0703 Ministry of Planning and Statistics To: Director, Operations Evaluation Department World Bank, Washington, D.C. Subject: Observations on the draft Project Performance Audit Report on the Cotonou Port Project (Credit 826-BEN) Dear Sir, I am pleased to send you herewith the comments of the People's Republic of Benin on the draft report on the Cotonou Port Project financed by your institution ai-d other partners. I hope that they will be useful to you in the preparation of the final report to be distributed to the Directors of the Bank. Yours, etc. 1sf Zul - Kifl SALAMI Minister of Planning and Statistics in the Office of the President of the Republic MAN 3 1 198 - 130 -- APPENDIX 3/3 Comments by the People's Republic of Benin on the Project Performance Audit Report and the Project Completion Report on the Cotonou Port Project (Credit 826-BEN) I. Project Performance Audit Report I.1 On the page containing abbreviations and acronyms OBEMAP should replace OMEMAP. Throughout the document MTT (Ministry of Transport and Telecommunications) should be replaced by MET (Ministry of Equipment and Transport). 1.2 On page iv, it is not correct to say that the credit has been totally disbursed. A remainder of US$74,322 was cancelled (cf. Telex No. WA2DA 9795222 of October 31, 1984). Furthermore the estimated total cost of the project at appraisal was US$46.09 million, not US$46.9 million. 1.3 On page vii, the services of the project coordinator cost US$0.4 million, not US$0.5 million. 1.4 On page viii, cumulative disbursements at the end of 1984 were US$10.93 million. In 1982 the actual level of port traffic was almost 35% less than the estimate in the appraisal report, not 30% (line 6).* 1.5 On page 11, the Ad Hoc Commission was not transformed into a permanent committee for improving transit traffic procedures. This commission disappeared when the project was completed. In fact three committees were established to bring together all the port operators in the transport chain, namely: (a) The committee monitoring the transport chain and port operations (Decree No. 85-67 of March 4, 1985); (b) The committee of participants in the transport chain and port operators (Decree No. 0015/85/MET/MDRAC/MCAT of May 25, 1985); (c) The technical operations committee for the transport chain and for monitoring port operations (Decree No. 0012/85/MET/DGM of May 10, 1985). Each of these committees has specific and precise functions. They are forums for discussing all port problems with a view to identifying appropriate and applicable solutions. 1.6 In line 10 on page 11 it is not accurate to state that the Government decided to privatize the two parastatal transit companies. Rather, the Government decided to open the transit and freight-forwarding sector to private operators (Law No. 85-003 ANR-CP). OBEMAP continues to have a monopoly of handling. *T.N.: This may in fact be a reference to page xi, para. 2. APPENDIX 3/4 - 131- 1.7 Line 8 on page 12 should read "port capacity wAs not only constrained by lack of berthing space but also by poor productivity."* Regarding line 14, cargo handling at the Parakou rail-to-road transhipment point is the responsibility of the OCBN Railroad Company, not the transit company. 1.8 On page 13, line 8, it should be made clear that the Freight Bureau is only a very recent attempt to satisfy the concerns of the public authorities in Benin to develop both rail and road transport, and as such can hardly be called into question. 1.9 On page 16, line 6, the basic cause of the fact that disbursements were always behind schedule was not delays in the submission of claims, but above all lags in the execution of the works. To alleviate administrative delays in handling dossiers, the public authorities redefined procedures so that financing agreements could be ratified in the shortest possible time. Letter No. 594/PR/SGG of May 26, 1982 establishes the maximum period for ratification of agreements and conventions at six weeks. The average period required to make agreements effective since this text came into force is between two and three months. 1.10 On page 20, line 13, "port management" should be replaced by "the management of OBEMAP," which alone is responsible for cargo handling and therefore for the manner in which dockers are hired. I.11 On page 23, paragraph 28 must be reworked, in part because since October 26, 1972 the political situation in Benin has been stable, and also because the decision to carry out the (port) extension project was only taken after the economic and financial studies and the economic appraisal had been supervised and approved by the World Bank. All this contradicts the statement in the report that "domestic conditions in Benin during the late 1970s were so unsettled that economics and finance did not influence public policy or investment decisions." 1.12 On page 6, it is not correct to state that "the Government continued to give preferential treatment to the railway by keeping unpaved the...Dassa- Parakou section." 1.13 On page 12, if the shortcomings identified by the 1977 mission to study the railways were real, it would be appropriate to add that OCBN remedied these shortcomings by adopting and executing its five-year equipment program, 1975-80. II. Project Completion Report 2.1 On page 2, line 3, "Mii.istry of Transport and Communications" should be replaced by "Ministry of Equipment and Transport." In line 10 it should be made clear that the services of the coordinator were financed 78% by UNDP and *T.N.: It is not clear what correction is intended here unless it is that the wocd "only" does not appear in the French text of the PPAR. APPENDIX 3/5 -132- 22% by IDA. The previous observations with regard to page 16 of the PPAR regarding disbursements apply also to paragraph (a) on page 6 of the PCR. 2.2 On page 8, first paragraph, it should be noted that amendment 1 to lot A was prefinanced by IDA and reimbursed by CIDA. 2.3 Regarding the project costs appearing on page 10, the appraisal figure was US$46.09 million (or CFAF 11292.05 million). 2.4 On page 11, the services of the project coordinator cost US$0.4 million, not US$0.5 million. 2.5 On page 14, "Ministry of Transport and Telecommunications (MTT)" should be replaced by "Ministry of Equipment and Transport (MET)." This observation is also valid for line 4 on page 15. Regarding paragraph 4.03, we would point out the Directorates of Maintenance and Studies existed within the PAC before the Cotonou Port Project, which merely strengthened them. 2.6 On page 18, paragraph 5.08, port traffic since 1982 is on average 35% less than the appraisal estimates. The table on this page regarding port traffic should be reworked (see annex). 2.7 On page 20, "Upper Volta" should be corrected to "Burkina Faso." 2.8 On page 29, paragraph 7.08, the Parakou extension was executed by the PAC on behalf of OCBN using a WADB credit. The interest and reimbursement of the capital are regularly invoiced to OCBN, which then makes the appropriate payments. The cost of the project (paragraph 7.09) was CFAF 12,348 million (or US$50.4 million). The mobile crane cost CFAF 314,238,000 and not CFAF 407 million. 2.9 Regarding paragraph 7.12 on page 31, it should be noted that the management appointed two accounting commissioners for PAC to check and certify the accounts before they are submitted to the Board of Directors. 2.10 On page 32, it must be stated that in 1984 a 15% increase in ship tariffs was approved and introduced. The Lug boat (paragraph 7.16) cost CFAF 934.5 million (DM 6.23 million at the exchange rate DM 1 7 CFAF 150). The total cost of the project for the rehabilitation and maintenance of port infrastructure (old quay, breakwater and stores) is estimated at CFAF 3,009.5 million. 2.11 The organization chart on page 42 dates trom 1974 and not 1979. 2.12 On page 44, total traffic in 1968 was 446,000 tons and not 476,000 tons, while Benin's import traffic was 721,000 Lots, not 711,000 tons. 2.13 The occupancy rate for berth P1 on page 47 was 44% in 1979 and 4% in 1980. 2.14 On page 72, to say that the results of the commercial and financial directors were poor seems exaggerated; it might be said that they were S133 - APPENDIX 3/6 average. The financial director is not appointed by the Minister of Finance but by the National Executive Council on a proposal from the latter. 2.15 The results attributed by the PCR to the activities of the consultant to OCBN seem exaggerated, an4 moreover contradict the final statement on page 10 of the audit report, which says that the impact of the technical assistane on OCBN was limited. 2.16 On page 34, paragraph 7.24 should be reworked in the past tense a, follows: "OCBN was the company in greatest ditficulty, but the position h,s clearly improved: net rf*enue, which was nc-gative from 1979 to 1983, has been positive from 1983 (CFAF 365 million) through 198' (CFAF 500 million)." Furthermore, the tariff incrcases .pptoved haidly covurtd the rate of inflation; one cannot therefore say that they were substantial. The bank overdraft of CFAF 2.6 million was included and absorbed since December 1984 in the OCBN rehabilitatior, plan. This deserves to be mentioned. OCBN's investments wtre made with a corresponding levrl of activity in mind. They only seem high because the crisis which has hit every country led to a decline in operations, resulting in a dwindling of the gross margin available for self-financing. 2.17 On page 12, in the table, the Ireasury 6hould be replaced by CAA. COTONOU PORT: ACTUAL TRAFFIC, 1917-1982, COMPARED TO 1977 ESTIMATE (in thousand tons) Percentage Actual/Projected Actual Frojected Actual Projected Actual Projected in 1982 ydr-car t-as 190 190 790 239 229 296 77 Bulk Clinker + gypsum 157 170 256 400 248 400 62 (Benin) Sulphur (Niger) 26 26 58 40 43 65 66 Sub total 183 196 314 440 291 465 63 General 344 242 329 311 407 373 109 Benin 117 114 64 171 177 195 91 'iger a9 9 cf which cereals ND (30 ) ND (10) ND (0) Iligeria 213 326 6 244 18 420 5 ctber 0 0 7 0 23 0 Ns Sub total 674 682 405 726 625 888 70 Grand total =&a2 .&5-a 142e0 LEM Jai 34 NO Sources: PAC statistics and Annex to Appraisal Report, page 66. MU ¶>. [t 9APPENDIX 4 FCA - 135 - 1317~4 FliND A REF.No. 0397/21 JAN.21.86 rROMPFFrFIND VIFNNA 100,ik YtIK!NORT WATANAF, DrPX(;If)kv OPERATIONS EVAL.UATION DEPElm WOkl i fANK KANY 1HANKS URTFI. E rbC. ,3 ?1- 198t AND INFO YOU KINJ.I. Y INGI UDFD TH I-IN ON THK' COTONOtl PORT PROJECT IN WNXN T1HF PRoJeCr OENEFtTTED f ROM OlIR 6SSTSTAN(F IHROUH1 THF All. CIAT1ON (F I HE FOUJIV, VF USUIL. RS 4 .3 1411-i )ON Y.N K.ChI. CURRENCY (1.OCAL. COONTERPART FIONPS) 10 PART[ALLY COUf:k (,OYT'S SHAR IN THF FINANCIN0 OF THE PROJCT. NI WII.L. NOT rAll 10 fkWRo 1NY COIMMFNTS W MAY HAVEi ON CONTENfS OF 11CiMENTS PROY's JIFP. F:FM Nd SANDS j. AISSI ' TsRFCTnR-SENE RPL :F": MAN6(F fi NI ;1PF- g VIND 1 2 1 -'4 4 HJP.Mi A