Paraguay - Appraisal of the Port of Asuncion

~~~- I C-35 _ - Fl[Ur I1 This report may not be published nor may it be quoted as repre. senting the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF THE PORT OF ASUNCION PARAGUAY by George J. Leovy Consultant June 1961  APPRAISAL OF THE PORT OF ASUNCION PARAGUAY Introduction Late in 1960, I was requested by the International Bank for Reconstruction and Development to visit the Port of Asuncion for the pur- pose of making a quick study of the organization, management and operations of the port, determine the traffic potential for the immediate future and to formulate a judgement concerning plans for expansion of the port facili- ties. The terms of reference for my study and report w-rere as follows: a) Study the organization, management, facilities and operating procedures and practices of the Port of Asuncion, as well as the procedures and practices of the Paraguayan customs authori- ties and of other governmental and private agencies wVhose duties may affect port operations, and determine what changes are desirable and feasible in order to improve the Portts operating efficiency and shorten the turn-around time of vessels using the Port. b) Detenrine, to the extent feasible in the time and with the data available, wthat volume of traffic can reasonably be expected to use the port facilities during the next five years. c) In the light of your findings under Paragraphs (a) and (b) above and assuming that recommended operational changes will have been made, examine the general plans prepared by Christiani & Nielsen and by the "'Direccion General del Puerto de la Capital" for the physical expansion of the Port and its facilities, with the view of determining wqhether the execution of all or part of these plans in the near future is necessary in order to provide for the prompt and economical handling of the expected cargo dur- ing the next five years; or if these general plans are not considered suitable for the needs, suggest changes therein or other more suitable means of accomplishing the same ends. PART I. History and Organization The existing port facilities at Asuncion were constructed by a private New York company in accordance lith the terms of a concession granted by the Paraguay Government in October 1927. In December 1940 the concession expired and the Port reverted to the Government. At that time it was agreed that the total indebtedness of the Government to the concessionaire was US$2,727,000, which was to bear interest at 5JJ and be amortized at the rate of 12 per year.  -2- Since the Port was taken over by the Government it has been ad- ministered and controlled by a semi-autonomous Administration whose corapo- sition and powers have been changed from time to time by the Executive Power. The present administration, created by decree No. 5,842 of July 23, 1959, under the name of Consejo de Administracion de Aduanas y Puertos de la Republica, was established "as a temporary measure"l to carry out the functions pertaining, under organic regulations previously in force, to the Ports of the Republic and the Customs Service, until those functions are combined by law under a unified administration. So far as I know, no steps have been taken toward promulgating such a unifying law0 The Consejo de Administracion is composed of three full-time members appointed by the President of the Republic. As provided by decree No. 5,842, the chairmanship of the Council is rotated among the three members, for four-month periods. The decree specifies that the Council shall be assisted by a technical assistant expert in customs and port mat- ters. The three present members of the Council are enthusiastic, upright, hard-working men who are dedicated to their job} but none of them is ex- perienced in modern port operation. They have a "superintendent of customs" under their orders, but the head of the port division has no such status. A customs expert lent by the United States is now attached to the Council, who is quite well versed in customs procedures, but he does not profess to be qualified in marine terminal operation. Management It is well known that as a general rule the work of customs and cargo handling do not mix well under the same head. (It works better at Asuncion than one would expect, owing largely to the personal characteris- tics of the Council members). In other ports of this hemisphere, without exception, terminal operation has improved greatly w7hen it has been com- pletely separated from custom-house administration. (I would vrenture that the customs administration has also improved). One field requires work of a quasi-legal nature, while the actual work in the other field is largely physical, Any tendency to downgrade terminal operations does not help the concept that good marine terminal administration depends upon continuity of good and experienced leadership. This concept definitely requires emphasis in Asuncion. The customs should be limited to its important function of asses- sing and collection duties and prevention of contraband. It should have no jurisdiction whatever in the act of tlIaterials Handling"1. The Terminal. should perform all physical ;dork in the handling of cargo. It should re- ceive, handle and deliver it to the consignee or to the vessel as the case may be, making delivery, however, only upon documentary authority of the customs house. Tnis would not involve a radical change in Asuncion, as practically all the physical work is now performed by the Terminal. The change Twrould be in making the terminal management independent of customs house influence in the physical operation of the terminal.  -3- The responsibility for protecting the cargo against pilferage and damage -would be for the account of the Terminal, as well as delivery after customs house approval. The Properties The general lay-out of the port is shown in the attached chart. a) The Pier The pier is 550 meters long with an apron 10 meters wide. Fac- ing the apron, there are three general cargo sheds (A, B and C) having a total area of 4,,875 meters, and a transit shed for receiving, treating, and delivering salt. There are also two ad- ministration buildings used for various purposes, including customs, parcel post, air express, and terminal operation. b) Cargo Sheds Tle only deposits suitable for general cargo are "All, ItBt" and "C", with a combined area of 4,875 square meters. I have not been able to reconcile the shed area of 11,400 square meters, given in the "Ante Proyecto" folder. The salt deposit is approxi- mately 1,000 square meters. Deposits "'D" and "E" may be completely dis- counted as cargo working sheds on account of the revamping of the admini- stration building. Height of Water According to the observations of the hydrographic office, (whose graphs are attached), the highest water during the period 1913-1932 was on June 14, 1919, when it reached a height of 7.80 meters. The lowest water was during a feuT days in January 1926 when it varied betwTeen plus 0.20 meters and plus 0.30 meters. During varying periods of several years the lo,west water was below 1. meter. During the period 1933/1952 the highest wrater was plus 6.20 meters in June 1945. The lowest was ninus 3.15 in October 191-I-. It also went below 0 in 1938. According to advice frori the terminal engineer the bottom of the harbor to a depth of rminus 4 or 5 meters is, with only minor exception, sand suitable for fill. This conclusion, howiever, requires some further checking. c) Operations Unfortunately, the peak arrivals of vessels are not subject to any better control at Asuncion than at other hemispheri c ports. There arc many factors of conflicting interest which work against evening out the flow of arrivals; so that from  -4- from a practical vimwpoint we have to expect considerable over-lapping of arrivals on certain days, and relative slack- ness at other times. Tlae ownership of a large fleet by Paraguay might present an opportunity to lessen peaks of arrivals. Vessels suffer long delays awraiting berths alongside the pier for loading and discharging cargo. When berths become available, vessels frequently are unable to work all hatches simultaneously. This occurs when the berthing space is shorter than the length of the vessel, causing one end of the vessel to overlap another vessel. Also, when the space is other- wise satisfactory, all hatches frequently are not within crane reach of the customs shed platform. When alongside, vessels are also delayed by slow handling of import cargo, and by tallying and weighing. Vessels are also delayed at the dock awaiting the arrival of export cargo. These delays are so great that they are bound to have an adverse effect on freight rates. During some years, there have been seasonal delays to vessels because of low water and bars in the river requiring unusual draft restric- tions and/or lighterage. At the dock there are also costly delays to the personnel and trucks of shippers caused by congestion on the dock apron. This is generally accentuated by too many tracks arriving at about the same time. Also, con- signeest tracks and personnel are delayed at the customs shed by obsolete meitds of handling cargo. (For instance, hand trucks are still used). The cargo-handling labor appears to be fairly good, willing and disciplined. At present the dock labor is paid by the hour. On board vessels the stevedores are employed by the steamship agents, and frequently are given "barter contracts" to speed up the work. Presently the "cargo hooks" of the vessels are also very badly delayed by the weighing of certain types of cargo. The agents of general-cargo vessels figure on discharging about 100 tons of 1,000 kilos. per day. Their estimate is about correct. There are several causes of this low tonnage rate. The difficulties can be con- siderably minimized w,ith reasonable steps. Certainly the output can be in- creased by 50% in most cases, and doubled in many cases. Besides questions of organization, labor methods, system of pay, and lack of modern equipment, there is a definite shortage of berthing space which at times prevents vessels from lring properly at the pier to work the maximum number of gangs. Vessels frequently overlap one another so that the cranes cannot reach both hatches. Also frequently both hatches are not within crane reach of the warehouse platform, which is elevated 1.30 meters above the apron. The apron frequently is so clut- tered that cargo handling is severely slowed.  -5'- The question arises whether the terminal is making proper use of the present shed space. Relative to most ports, including some North American, the use o' this space is not bad, although there is always room for improvement on this score. Generally speaking the receivers do not abuse their transit deposit privileges. There are some glaring cases of cargo being in the terminal for extreme periods, but cargo in this category does not occure more than 3% or 4% of the space. There are a couple of pockets of cargo -Trhich the Consejo does not know what to do with. There are some 100 cubic meters of outside storage occupied by oak for making barrels for packing meat. O,ing to some governmental dis- position in the U.S.A. the barrelled beef business fell through, and the consignee has no use for the staves, which constitute a serious fire haz- ard. There is also a tin-can plant rusting away outside on flat cars belonging to the terminal. The freight cars with cargo stored on them are an obstruction. HoTsever, the correction of these two and other less glar- ing cases would not affect the requirements for additional storage space as recommended in this report. iV estimate is that the removal of perhaps 15% of the cargo now outside the slheds has been unduly delayed by the failure of the consignees to take pronpt delivery. Finance For ready reference receipts and expenditures of thie Port for 1959 were as follo.s: Returns: 1. Collections Gs. 86,805,229.56 2. Auction of abandoned merchandise 101,015.44 3. Ectraordinary returns 726,688.19 4. Special reserve from 1953 9,986.33 Gs. 87,642,919.52 Expenditures: 1. Port Service Rcpenses Gs. 56,L18,370.70 2. Repairs and Improvements 18,1X4,280.75 3. Annual debt payment 21,609,250.00 4. Bank Commissions and expenses 217,892.00 Gs. 96,389,793.97 Gs. Loss 8,746,874.45 The debt as of the 1959 balance was US$L,110,843.43. The port tariffs were increased some 50% per decree-law of August 1960. I have been advised that the 1960 balance showed a profit of Gs. 25 million. The item of repairs was unusually high during 1959 and 1960. This picture should improve as most of the neglected maintenance has been cared for. Also a full year with the higher rates should bring about a consider- ably higher profit during 1961. I did not analyze the overall port expense.  -6- PART II CONSIDE,ATIONS AF-ECTING SIZE OF PORT I have studied and analyzed a great many figures and statements which might ordinarily give some definite idea as to the expected increment of the national economy. Many of them are not convincing one way or the other. A study based on the value and tonnage of exports during recent years would not indicate any increment. On the other hand, imports have been increasing substantially. The standard of living is improving. The high-ay development and prospec- tive feeder road development, and the governmentts policy on immigration which contemplates the admission of European settlers and up to 80,000 Japanese writhin a few years, plus improvements in agriculture, forestry, and the cattle industry, should have a beneficial effect on the economy. The immigration alone, it wJould seem, will make an important difierence in the economy and the balance of trade. I feel that there will be an increment in the general economy (barring w