Guinea - Conakry Port Project

Document of The World Bank FOR OFFICIL USE ONLY Report No. 8369 PROJECT COMPLETION REPORT REPUBLIC OF GUINEA CONAKRY PORT PROJECT (CREDIT 1382-GUI) FEBRUARY 14, 1990 Infrastructure Operations Division Occidental and Central Africa Department Africa Regional Office Thbis document has a restricted distribution and may be used by recipients only in the performance of their offlcd duties Its contents may not otherwise be disclosed without World Bank authorization.  EXCHANGE RATES The official monetary unit was the Syli v till 1986 when it became the Guinea Franc (GF) Syli 1 - GF 1 At appraisal : Syli 23 - US$1 At completion : GF 592 - US$1 ASBREVIATIONS AND ACRONYMS AfDB -- African Development Bank dwt -- Dead Weight Ton ENTRAT -- Stevedoring Company (Entrepris. National. de Transit *t de Transport) ERR Economic Rate of Return GTZ -- German Agency for Technical Cooperation (Deutsche Gosselschaft fttr Technisch- Zusammenarbeit) KfW -- German Aid Agency (Kroditanstalt fur Wiedoraufbau) PAC -- Conakry Port Authority (Port Autonom de Conakry) PPF -- Project Preparation Facility SNO Guinean Maritime Agency (Socl6t6 Naval- Guineen-) FISCAL YEAR OF BORROWER January 1 - December 31  FOR OMCL^LW Ly THE WORtD BANK Washngton. D.C. 20433 U.SA. Offke of DitCt4WGQWi Ope,atmuv E&WahtNin February 14, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Republic of Guinea Conakry Port Project (Credit 1382-GUI) Attached, for information, is a copy of a report entitled 'Project Completion Report on Republic of Guinea - Conakry Port Project (Credit 1382-GUI)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document ha a msricted distribution and may be used bY reciplus onlY in the psffman of their official duties.Ita cootents may not thwise be duclued without Wold Dak Autolutio  FOR OMCIL USE ON?1Y REPUBLIC OF GUINEA CONAKRY PORT PROJECT CREDIT 1382-GUI PROJECT COMPLETION REPORT Table of Contents Page No. Preface ......................... . i Basic Data Sheets ..ii. Evaluation Sumary .............. . - iv I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 1 II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL . . . . 2 III. PROJECT IMPLEMENTATION AND COST . . . . . . . . . . . . . 6 IV. OPERATING PERPORMANCE . .9 V. FINCIAL PERFORMANCE . 10 VI. ECONOMIC REEVALUATION . 11 VII. CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . 12 TABLE' 1 Quantities Imported and Exported, 1975-1987 . . . . . 13 2 Income Statement of Conakry Port, 1983-1987 . . . . . . . 14 3 Balance Sheets of Conakry Port, 1983-1987 . . . . . . . . 15 ATTACHMENTS 1. Comments from the Minister o0 Transport . . . . . . . . . 16 2. Coments from the Ministry of Planning and . . . . . . . 17 International cooperation MAP IBRTn 16682R1 Conakry Port Project This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents mar not otherwise be disclosed without World Bank authorization.  REPUBLIC OF GUINEA CONARRY PORT PROJECT (CREDIT 1382-GUI) PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the Conakry Port Project in Guinea, for which Credit 1382-GUI in the amount of US$13 million was approved on June 14, 1983. The credit was closed on December 31, 1988, six months behind schedule. As of May 30, 1989 an amount of US$80,000 remained undisbursed. The PCR was prepared by the Infrastructure Operations Division, Occidental and Central Africa Department, Africa Regional Office, and is based, inter alia, on the Staff Appraisal Report, the Credit Agreement, supervision reports, correspondence between the Bank and the Borrower, and internal Bank memoranda. The PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower for comments and they are attached (Attachments 1 and 2).  - iil - REPULIC OF GU CONAKRY POWT PROJECT. CREDIT 1802-I!t PROJECT COULETION REPORT BASIC DATA SHEETS KEY PROJECT DATA Appralil Actual or Item Expectetion Current Eotlmte Total Project Cost (USS illIon) wa L 40.02 Cost Overrun (5) - .9 IDA Credit Amount (USS milion) 18.02 11 29 Disbursed 18.0 12.92 ib Cncel led - Repaid to Vay 1989 - 6 Outstnding to may 1989 13.02 12.92 Project Completion Date 121/31/7 06/39/37 Proportion Completed by Above Data 1W 1a Proportion of Tio Underrun (N) -- 12.5 Economic Rate of Reurn (l) s0 88 Financial Performance Good Xnetltutlonal Perforaonc- Good CUULATNE EMSIATED AND ACTUAL DISBURSEEMTS (USS millon) FY84 FY66 FY66 FY67 FY68 FY89 Apprai"l Estimte 1.60 6.60 0.80 12.79 18.01 - Actual 8.42 7.2e 1.02 12.01 12.56 12.92 Actual as N of Appraisal Estimat 228 1i9 114 96 97 99 /a Including long-toer and short-term technical *saislnce o estimated during appralial. Ib As of Vy 8, 1969. Dt NUT yenffs] FY n 7 76 7 0 e1 62 98 64 6 o 67 8 To Pr"pprail .8 - - 90 7.9 2.8 -. - - - - 621. Appraisal - - - ~~~- - 29.1 51.0 - 1.1 Nepotisatio - - - -4.7 - - - - - 4.? supervision - _ _ _ .4 10.2 6.4 16.9 6.1 16.1 49. Other - - - - - .4 1. - - 2.4 TOTAL 8 - - 9.0 7.9 24.$ 39.0 10.2 6.4 5.9 6.1 10.1 126.4  - iii - OTHER PROJECT DATA Item Original Plan Revisions Actual or Estimated Actual First Mention In Flles -- 12/29/72 Government's Applicstion - 04/06/82 L/ Negotiations 12/-/82 02/20/83 04/18/88 Board Approval 62/-/88 64/-/8B 08/07/68 Credit Agrement Date 64/-/88 06/-/88 07/14/88 Effectiveness Date 07/-/sa 10/--/8B 12/14/83 Closing Date 08/8/68 12/81/89 12/81/88 Borrower Government of Guinea Executing Agency Port Autonome do Conakry Fiscal Year of Borrowor January O1 -- December 81 Follow_-on Project Transport Sector Project, Credit 1815-GUI for US855.60 million MISSION DATA Lb No. of Mission Date of item Month/Year Persons Composition Lo Staff Weeks Id Man Woeke Report Identification 12/79 2 E, P 1.6 3.6 12/79 Le Preparation 04/61 2 E, P 2.0 4.0 05/04/81 /f Appraisal 02/82 a E, F, P 8.0 9.6 03/11/62 Supervision 1 08/68 1 P 1.6 1.6 e 9/0s/88 Supervision 2 6/e88 1 F 1.6 lb 11/67/83 Supervision 8 01/64 1 P 1.6 1.6 02/24/84 Supervlslon 4 10/64 2 E, P 2.4 4.8 08/22/86 Supervision 5 06/86 a E, F, P 2.4 7.2 08/21/86 Supervision 6 10/85 8 E, F, P 2.0 6.0 12/28/85 Supervislon 7 62/88 a E, F, P 2.4 7.2 63/18/86 Supervision 6 0e/86 1 E 2.4 2.4 08/28/86 Supervision 9 08/87 2 E, F 1.0 2.0 02/11/87 Supervision 1O 01/88 2 F, P 1.8 8.2 02/29/88 Completion Mission O7/88 2 F, P 2.0 4.0 08/29/88 La /i Application for a PPF. /b Excludes brief visits for which supervision reports were not prepared. La E = Transport Economist; F = Financial Analyst; and P = Port Engineer. Ld Adjusted to reflect time pnt on this project; most missions involved work on other projects. Le First Project Srief. No report on file. Lf Date of Issues Paper. La Completion Report by Borrower AFlIN, June 6, 1089; A:data.pcr (NH7)  - iv - REPUBLIC OF GUINEA CONARRY PORT PROJECT (CREDIT 1382-GUI) PRO;ECT COMPLETION REPORT EVALUATION SUMMARY Obiectives 1. The main objectives of the project aret (a) to increase the autonomy, officiency and productivity of PAC by improving its financial and managerial functions and by training its personnel; and . (b) to reduce cargo losses caused by pilferage and poor handling and thereby reduce ocean freight costs for Guinea's imports and exports. 2. To achieve these objectives, the project concept aimed at: (a) establishment of an independent port authority with financial and managerial autonomy; (b) rehabilitation of existing facilities and constructions of new infrastructure; (c) renewal of cargo handling equipment and floating craft; and (d) training of staff, provision of technical assistance to management and for project execution, and achievement of productivity targets. Implementation Experience and Result 3. The project was a notable success. The Port Authority of Conakry (PAC) has evolved into a creditable port manager (para 4.01). 4. Performance of consultants, the contractor and suppliers was very good. The project was completed well within the time schedule and close to the cost estimate (paras 3.08-3.12). 5. As regards operations, traffic has grown much much more rapidly than originally anticipated at appraisal. The port handled 590,000 tons of general merchandise cargo in 1987, well over the volume originally anticipated for 1995 (para 4.02). 6. Operating indicators show that efficiency of the port substantially improved over the four-year period of project execution (para 4.03).  7. The reevaluated rate of return is 38X. This is considerably higher than the 301 forecast at appraisal and is attributed to higher traffic (para 6.01). 8. Port tariffs have generally been adequate. Progress toward financial autonomy for PAC has been less than satisfactory with regard to control by the Government of PAC's operational expenditures and bank accounts. However, corrective measures were agreed upon during negotiations of the follow-on Transport Sector Project (paras 5.03-5.04). Sustainabilitv 9. Given the success of this project in combination with the measures to be implemented under the follow-on project (see previous para) the project is likely to be sustainable. Findings and Lessons Learned 10. The lessons to be learned from the project may be simple, but they are worth repesting. They are that excellent results can be obtained in resurrecting a badly rundown, mismanaged Government-owned entity in a poor country, provided that: (a) sound feasibility studies and good quality detailed engineering and supervision are carried out: (b) a competent contractor is engaged to carry out the work; (c) the Government and its executing agency are cooperative; and (d) all co-lenders closely coordinate their efforts and thoroughly monitor progress. A further lesson is that a well conceived project has a better chance of success than a poorly-defined one.  REPUBLIC OF GUINEA CONAKRY PORT PROJECT. MREDIT 1382-GUI PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The above project was the Bank Group's first port project in Guinea. The Bank Group has previously assisted the port sector indirectly through an Engineering Loan (Sl-GUI), and two Loans (577-GUI and 766-GUI) for the Boke Bauxite Project which included consttuction of a new port at Kamear and related rail and new town infrastructure. 1.02 Guinea has two deep-water portss Kamsar and Conakry. Kamsar has been operating satisfactorily since its construction in 1975 under the Boke Bauxite Project. It has a total capacity of 9.2 million tpy; currently, it handles about 8 million tons of bauxite exports annually as well as a small amount of imports for the account of the mine. Conakry is the main commercial port. It handled all general cargo imports (215,000 tons in 1983), fuel and clinker imports, as well us bau-ite and alumina exports (3,000,000 and 500,000 tpy, respectively). 1.03 The Port of Conakry had two bulk-handling facilities for exports, one for FRIGUIA (alumina) and the other for OBK (bauxite). Located between these facilities were four general cargo berths and facilities for fruit handling, small coastal vessels, fishing vessels and work boats. Bulk petroleum products were handled next to the bauxite berth. The total surface area occupied by the Port is about 38 ha, of which about 3.6 ha was covered storage area comprising the main transit sheds behind the general cargo berths. A clinker unloading and storage facility was under construction. 1.04 A large part of the port infrastructure had deterior..ed. Some facilities presented potential hazard and needed to be partially demolished. Others were in poor condition and inhibited efficient operations. Genera. cargo aprons had settled in places due to gaps in the underwater quay wall blocks. 1.05 Cargo handling equipment was of relatively recent vintage, but inadequate maintenance, compounded by rundown workshops and generally poor operating conditions had substantially shortened its useful life. Floating craft were in poor condition. Harbor tugs were operating well beyond their useful lives and risk of total breakdown was high. Beaconage and buoyage of the entrance channel were also inadequately maintained. 1.06 The information for this report was obtained from the Staff Appraisal and President's Reports for the Conakry Port. Project (Reports Number 4160-GUI of May 17, 1983 and 3578-GUI of May 18, 1983, respectively), the Appraisal and President's Reports for the Transport Sector Project, Bank supervision reports, Bank files, interviews with Bank staff formerly associated with the project, and the draft Project Completion Report prepared by PAC in May 1988.  - 2 - II. PROJECT IDENTIFI1,ATION. PREPARATION AND APPRAISAL Identif'.cation and Preparation 2.01 At the request of the Guinean Government that the Bank assist in port improvement, an identification mission visited Conakry in early December 1979. The findings and recommuedations of the mission are outlined in the first Project Brief dated December 1979. Key issites highlighted in the Brief included: (a) lack of statistics, inefficient organization and poor management of port operations; (b) severe shortage of equipment, spare parts and skilled tech- nicians; (c) poor maintenance and urgent need for complete rehabilitation of port facilities; and (d) need for institution building by creating a financially independent port authority to replace four existing organizations with partly overlapping responsibilities. 2.02 The Government had also solicited similar assistance from the Federal Republic of Germany and, as a first step, it was agreed that kfW would finance economic, financial and technical studies to be carried out by consultants acceptable to the Bank under terms of reference satisfactory to the Bank. The consultants' studies were to cover traffic, port capacity, operational costs, port asset evaluation, investment and costs, proposed infrastructure and superstructure rehabilitation, project benefit evaluation, tariffs and the port's financial position as well as the preparation of a master plan to be implemented in stages as needed. A contract for the study was signed between KfW and a German consulting firm acceptable to the Bank. 2.03 After reviewing the feasibility study which was received in early 1981, a pre-appraisal mission visited Conakry in April 1981. The mission agreed with the consultants' proposal of a short-term port rehabilitation that includedt (a) a rehabilitation of existing port infrastructure for general cargo; (b) reha'.lxtation and partial replacement of port equipment; and (c) training and technical assistance. The mission estimated that such a prcject would cost about US$18 H equivalent, of which RfW and GTZ were willing to provide about US$10 H and IDA US$7.0 M. The Bank informed the Government that IDA and other co-financiers considered the creation of an auton iious port authority managed by a board composed of representatives of the Government and the port users to be essential. The mission's findings and recommendations were discussed with KfW and GTZ on June 18, 1981. Agreements were eventually reached that: (a) KtW would allocate DM 13 M towards financing the project; (b) GTZ would contribute about US$2.8 M equivalent for consultants' services and technical assistance; (c) IDA would allocate US$10.0 M equivalent; and (d) the Government would contribute up to US$2.0 M equivalent. The estimated project cost was US$22 H equivalent. Appraisal 2.04 Appraisal was originally scheduled for November 1981, but because of staff constraints, the Bank informed the Government that departure of the appraisal mission had to be postponed to a later date. Finally, appraisal took place in February 1982 by a joint missien composed of representatives of IDA; KfW and GTZ. During appraisal, the -. oject cost estimate, including contingen- cies, rose to about US$38 M equivalent which was about US$16 M equivalent more than the pre-appraisal estimate. The Bank mission proposed that the Government ask the Bank to provide funds from the Project Preparation Facility (PPF) to  finance: (a) physical inventory and financial evaluation of assets to be transferred to the new authority; (b) repairs of temporary houbing for technical assistance experts; (c) underwater investigation of the general cargo berths; (d) study of existing warehousing capacity and conditi-mn thereof in the city- and (e) preparation of tender documents for floating crafts. A PPF of US$600,000 equivalent was approved on April 15, 1982. 2.05 The Issues Paper dated March 11 1982 explained the reasons for the above mentioned increase in the cost estimate. These included: (a) inclusion of houses for the technical assistance experts since the housing situation in Conakry was extremely difficult; (b) the need to repair and strengthen the pavement in the container stacking area; (c) the need to purchase two new tug boats to ensure proper port operations since the existing tugs were in a very poor condition; (d) the need to acquire a simple data processing system to assist the new port authority in establishing its information base independently from the Ministry of Planning; and (e) additional soil investigation on land and in the port water area. The Issues Paper called for the co-financiers to increase their contribution as follows: ITA to US$12.5 H equivalent, KfW to DM 16.1 mill- ion equivalent, GTZ to US$3.8 M equivalent and the GovernmentlPAC to US$3.0 M equivalent, thus leaving a financing gap of about US$11.7 M. 2.06 The maiia issues raised in the Issues Paper were those related to the agreements to be reached prior to credit negotiations. These included the need for the Government to promulgate a decree creating an autonomous Port Authority of Conakry (PAC) and defining its statutes, setting out its financial structure and fiscal regime, transferring of assets to PAC, and appointing a Director General and Department Directors; (b) to make sufficient land available for the construction of the housing for the technical assistance experts; Cc) receive bids for all civil works and equipment in order to alleviate the uncertainty about the cost estimate; and (d) examine, under the PPF financing, the warehousing and transit operations a.d preparing an action plan thereon satisfactory to IDA; and (e) to have PAC and its stevedoring company (ENTRhT) sign a lease agreement the terms and conditions if which would be satisfactory to IDA. In addition, the Issues Paper outlined other issues to be agreed upoa during negotiations including those related to security in the port, on-lending terms, performance targets to be achieved, introducing a two-shift system and review of port tariffs. 2.07 The Decision Meeting was held on March 18, 1982 and issued a Decision Memorandum on April 30, 1982. The meeting agreed to the appraisal mission's recommendations and conditions for negotiations as given in the Issues Paper. As regards the financing gap referred to in para 2.05, the meeting estimated the gap at US$15 M equivalent and reported that: (a) co-financing of such gap was being sought; (b) AfDB had expressed interest; (c) Germany had been asked to consider increasing its commitment; and (d) IDA would consider increasing its allocation to fill part of the financing gap. Later, AfDB confirmed on May 22, 1982 to a Bank mission to Abidjan that it would participate in the project and expressed its willingness in principle to cover the financing gap up to US$15 M equivalent. 2.08 During the period between project identification and appraisal, the Bank informed the Government on several occasions that the most pressing issue was the creation of an autonomous port authority. After some delay, the decree was signed on June 22, 1982 and PAC's Director General and its Department Directors were appointed by decree dated August 21, 1982. The other pressing  - 4 - issue was the financing of technical assistance to the new management. This issue was partly resolved when GTZ received an official request from the Government to this effect and consequently allocated DM 6.0 million for this purpose. It remained for GTZ tc expedite selecting the experts so that they could start their work in Conakry on January 1, 1983. 2.09 A post-appraisal mission visited Conakry in December 1982 mainly to review the finances of the project and discuss actions to be taken to advance processing of the project especially those required to meet conditions for negotiations (para 2.06). The mission also visited Abidjan to discuss with AfDB the main recommendations of the Appraisal Report. Subsequently, an AfDB mission visited Conakry starting January 20, 1983 to appraise the project. 2.10 Pre-negotiations took place in Conakry in early March 1983 and negotiations in Washington from April 18 to 20, 1983. The only substantive change made to the legal documents was that the required January 1, 1984 tariff revision, to lead to a 30Z revenue increase, should be published before December 15, 1983 rather than prior to credit effectiveness. Meanwhile the AfDB informed Guinea on April 26, 1983 that it was unable to invite the Government for negotiating the AfDB loan in Abidjan because Guinea was in default on its debt to that bank. The problem of the arrears was settled in due time and negotiations between the AfDB and Guinea took place on June 6, 1983. However, because of this delay, the validity of bids for civil works had to be extended from July 10, 1983 to September 15, 1983. 2.11 The credit was approved on June 7, 1983 for SDR 12.1 million equivalent (US$13 M equivalent). It was signed on July 14, 1983 but did not become effective until December 14, 1983 because of: (a) delays on the part of the Government in submitting the legal opinion; (b) delays in the AfDB Loan Agreement and KfW and GTZ Grant Agreements becoming effective; (c) delays in executing the Financial Agreemen.. Srelending) between the Government and PAC; and (d) delays in Government fulfilling effectiveness conditions under the AfDB loan. Proiect Obiectives and Description 2.12 The project forms part of a long-term master plan for the development of the port of Conakry. The master plan which is being implemented in stages as needed, was prepared by the consultants who prepared the feasibility study and detailed engineering under the project. The main objectives of the project were: (a) to increase the autonomy, efficiency and productivity of PAC by improving its financial and managerial functions and by training its personnel; and (b) to reduce cargo losses caused by pilferage and poor handling and thereby reduce ocean freight costs for Guinea's imports and exports. 2.13 To achiev. these objectives, the project concept aimed at: (a) establishment of an independent port authority with financial and managerial autonomy; (b) rehabilitation of existing facilities and constructions of new infrastructure;  - 5 - (c) renewal of cargo handling equipment and floating craft; and (d) training of staff, provision of technical assistance to management and for project execution, and achievement of productivity targets. 2.14 The principal components of the project weres (a) Civil Works Mi) rehabilitation of general cargo transit sheds; repair of general cargo quays, existing workshops, drainage system, rail sidings, roads, buoys and beacons; construction of a container stacking area; demolition of some structurally unsafe buildings and erection of customs fence; (ii) construction of a new administration building; and (iii) construction of housing for expatriate technical assistance experts. (b) Eauivment Mi) procurement of cargo handling equipment including forklifts and cranes; (ii) purchase of machines, tools, cars, trucks and tractor trailers; (iii) repair of existing cargo handling and workshop equipment; (iv) procurement of two harbor tugs, a pilot boat and a mooring boat; and (v) procurement of micro-computers and associated software. (c) Technical Assistance and Consulting Services (i) provision of long-term experts (3-4 years) to assist the General Manager, the Technical and Financial Directors, the Port Captain and the heads of cargo handling and maintenance, and to train PAC's staff (a total of 225 man-months); (ii) provision of short-term experts (6-9 months) to assist in developing accounting, financial and data processing systems, tariff and rate setting, and inventory control (a total of 39 man-months); and (iii) provision of consultant services for project supervision, evaluation of warehousing needs outside the port, study of closure structure and other miscellaneous tasks (a total of 165 man-months). 2.15 Project cost was estimated during appraisal at US$38 M equivalent of which US$35.3 M equivalent was in foreign currency. The foreign currency cost  - 6 - was financed by IDA, AfDB, R