Document of The Worild Bank FOR OFFICIAL USE ONLY Report No. 15789 IMPLEMENTATION COMPLETION REPORT CHINA NINGBO AND SHANGHAI PORTS PROJECT: SHANGHAI PORT (LOAN 3006-1-CHA) JUNE 25, 1996 Infrastructure Operations Division China and Mongolia Department East Asia and Pacific Regional Office 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 Name = Renminbi Currency Unit = Yuan (Y) Yuan rate per $1.0 1987 3.72 1992 5.53 1988 3.72 1993 5.76 1989 3.76 1994 8.60 1990 4.78 1995 8.50 1991 5.32 FISCAL YEAR January 1 - December 3 1 MEASUREMENT EQUIVALENTS Metric System BritishWUS s vvtem I meter (m) = 3.281 feet I square meter (m3) = 10.764 square feet I cubic meter (m ) = 35.315 cubic feet I kilometer (km) = 0.621 mile 1 ton-km = 0.621 ton-mile I ton = 2,208 pounds PRINCIPAL ABBREVIATIONS AND ACRONYMS USED DS - Debt Service dwt - deadweight ton (for vessel) EA2DR - Office of Director, Country Department 2, East Asia and Pacific Region EA21N - Infrastructure Division, Country Department 2, East Asia and Pacific Region EIRR - Economic Internal Rate of Return GOC - Government of China ICB - International Competitive Bidding ICR - Implementation Completion Report LCB - Local Competitive Bidding LIB - Limited International Competitive Bidding MOC - Ministry of Communications MOF - Ministry of Finance NPV - Net Present Value OC - Operating Cycle PCMIS - Port Costing and Management Information System REIRR - Reevaluated Economic Internal Rate of Return RFA - Reevaluation on Average Net Fixed Assets RRFA - Rate of Return on Average Net Fixed Assets RVP - Office of Regional Vice President SAR - Staff Appraisal Report SCT - Shanghai Container Terminal Ltd. SPA - Shanghai Port Authority TA - Technical Assistance TCC - Technical Cooperation Credit teu - twenty-foot equivalent unit (for container) FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT CHINA NINGBO AND SHANGHAI PORTS PROJECT: SHANGHAI PORT (LOAN 30061-CHA) CONTENTS PREFACE .................................................. iii EVALUATION SUMMARY ............................................................................ iv PART I. IMPLEMENTATION ASSESSMENT .... ...............................................1 A. Project Objectives ....................................................1 B. Achievements of Objectives .................................................... 2 C. Major Factors Affecting the Project ................................................... 10 D. Project Sustainability ............ ....................................... 1 E. Bank Performance ................................ ....1.............. I F. Borrower Performance . .................................................. 11 G. Assessment of Outcome . .................................................. 1 H. Future Operations ................................................... 12 I. Findings and Lessons Learned ...................................... 12 PART II: STATISTICAL ANNEXES .................................................................... 14 Table 1: Summary Of Assessments .................................................. 14 Table 2: Related Bank Loans/Credits .................................................. 15 Table 3: Project Timetable .................................................. 15 Table 4: Loan Disbursement .................................................. 16 Table 5: Key Indicators for Project Implementation .................................................. 17 Table 5A: Implementation Schedule ................................................... 18 Table 5B: Training Program .................................................. 19 Table 5C: Procurement Procedures ................................................... 20 Table 6: Key Indicators for Project Operation (Action Plan) ........................................... 21 Table 7: Studies Included in the Project .................................................. 22 Table 8: Project Costs, Financing and Allocation of Loan Proceeds ................................ 23 Table 8A: Project Cost .................................................. 23 Table 8B: Project Financing .................................................. 24 Table 8C: Allocation of Loan Proceeds .............................................. 24 Table 9: Economic Costs, Benefits and Major Financial Indicators ................................. 25 | document has a restricted distribution and may be used by recipients only in the performance of their oicial duties. Its contents may not otherwise be disclosed wihout World Bank authorization. - ii - Table 10: Status of Covenants ................................................... 26 Table 11: Bank Resources: Staff Input ................................................... 27 Table 12: Bank Resources: Missions ................................................... 27 APPENDIX A: ICR PREPARATION MISSION'S AIDE-MEMOIRE ............................... 28 APPENDIX B: BORROWER'S CONTRIBUTION TO THE ICR ....................................... 29 APPENDIX C: MAP ................................................... 32 ANNEX 1: FINANCIAL ANALYSIS ................................................... 33 ANNEX 2: ECONOMIC ANALYSIS ................................................... 36 - iii - IMPLEMENTATION COMPLETION REPORT CHINA NINGBO AND SHANGHAI PORTS PROJECT: SHANGHAI PORT (LOAN 30061-CHA) PREFACE The Shanghai component of the Ningbo and Shanghai Ports Project, Loan 30061-CHA for $46.4 million, was approved on December 13, 1988 and made effective on May 9, 1989. The loan, extended once for two years, was closed on December 31, 1995, and final disbursement was made on January 2, 1996. The loan amount of $45,995,049 was disbursed and the remaining amount of $404,951 was canceled. This ICR was prepared by Messrs. Toshiro Tsutsumi (Task Manager) and Han-Kang Yen (Economic and Financial Analyst) of the Infrastructure Division, China and Mongolia Department of the East Asia and Pacific Region and reviewed by Messrs. Richard Scurfield (Chief, EA2IN) and Juergen Voegele (Acting Project Adviser, EA2DR). The Borrower provided comments that are included as appendices. A separate ICR has been prepared for the Ningbo Port. Preparation of this ICR began just before the project closing date and was based on material in the project file. The Borrower contributed to the ICR by evaluating the project's execution and initial preparation. - Iv - IMPLEMENTATION COMPLETION REPORT CHINA NINGBO AND SHANGHAI PORT PROJECT: SHANGHAI PORT (LOAN 30061-CHA) EVALUATION SUMMARY Objectives 1. The project's main short-term objectives were to help the port of Shanghai increase its cargo handling capacity and efficiency. This was to be achieved by: (a) providing wharves and equipment for two general purpose terminals (Baoshan and Guangang) and a coal terminal (Zhujiamen) which was under construction, and (b) rehabilitating, equipping and expanding the Minsheng grain terminal. Most importantly, it would establish a long-term strategy for developing the port, so that it could meet the region's large and growing transport needs. To this end, a panel of experts from the Shanghai Port Authority (SPA) reviewed the port's Master Plan. Also, a study was conducted to develop a costing and management information system (PCMIS) that would reflect actual costs and identify areas that could achieve greater efficiencies. 2. When the project was identif.ed in the mid-1980s, most Chinese ports were badly congested and container berths, bulk cargo berths, port equipment, storage yards and transport infrastructure (for distribution), were in short supply. Indeed, it appeared that congestion would threaten the expansion of China's foreign trade. Shanghai Port, the country's largest and gateway to eastern and central China, was particularly important because it anticipated even faster growth than the others. The port is connected by rail, roads and the Changjiang River and other waterways to the inland region; the largest proportion of cargo (70 percent) is carried inland by the waterways. 3. The Ministry of Communications (MOC) began to decentralize the ports in January 1986. As a result, they began to finance their own development and investments and compete with other ports for cargo. Implementation Experience and Results 4. The project was completed satisfactorily by December 31, 1995. The closing date was extended for two years since procurement of the Bank-financed equipment for Minsheng grain terminal was delayed: Preparing the engineering design for the grain-handling system was complex and longer than anticipated. 5. Despite the delay, project implementation was satisfactory because all objectives were achieved. Managers and workers of the SPA received extensive training, and operational and maintenance capacity was improved [para. 10(d)]. The experts' review of the Master Plan - v - provided a sound basis for future development, and their recommendations were incorporated in a subsequent Bank project (the Shanghai Port Restructuring and Development Project-Loan 3552-CHA) [para. 10(b)]. An action plan was introduced that improved the port's operations [para. 10(c)], and physical capacity was substantially increased with the construction of container/multipurpose berths and a coal berth. These accomplishments were partly due to the fact that project design was relatively straightforward and the lack of complexity of most project components and to the coordination between SPA and the Ministry of Communications (MOC), which has overall responsibility for the port sector. 6. Bid evaluations, a two-step process involving SPA and a central evaluation committee, took a considerable period of time: five months for the relatively simple equipment, and 1 1 months for the more complex equipment for the Minsheng grain terminal. This delay occurred because the evaluation report provided by the Borrower was incomplete and took an additional 10 months to clarify (para. 9). 7. Project benefits were obtained from savings in: (a) cargo-handling costs, (b) ship waiting and berthing time, and (c) cargo time. The economic internal rate of return (EIRR) was estimated at 22.6 percent against 18.2 percent in the SAR, which is considered satisfactory (para. 32). 8. Cost estimates at appraisal were slightly lower than actual costs (about 7 percent). The final cost was estimated at about $281.6 million (or Y 1,058.9 million plus $47.6 million) against $264.3 million (or Y 825.6 million plus $47.6 million) at appraisal (para. 15). The local currency increase was due to higher than expected inflation during implementation and higher cost for procurement of equipment. 9. SPA's financial performance is acceptable. The operational ratio (operating costs/ revtl Aes) was higher than estimated in the SAR (59.5 percent against 46.8 percent in 1993) due to sharp domestic price increases (inflation) and reduced grain-related revenues while the Minsheng grain terminal was being improved under the project. SPA compensated for this by increasing efficiency and the volume of container traffic handled. Since inflation seems to have stabilized, container traffic will most likely expand further, grain-handling revenues will rebound strongly, and an upcoming revaluation of the port's fixed assets should positively affect financial results, and SPA's financial condition should remain acceptable. This notwithstanding, Shanghai, like all of China's ports, would benefit from a revision of the current policy of setting port tariffs by the central government, with inadequate provision for matching tariffs to operating costs. 10. No environmental or resettlement problems arose during implementation. - vi - Sustainability 11. At completion, the project appeared sustainable. Because container and grain traffic will undoubtedly grow along with rapid economic development in the Shanghai area, the port's revenue will increase. In addition, SPA has enough resources to maintain and operate the port efficiently. To further improve the container terminals' productivity, SPA established a joint venture company (the Shanghai Container Terminal Limited-SCT) in August 1993 with an experienced container operating company in Hong Kong (Hong Kong International Terminal- HIT). As yet, it is too soon to evaluate its effectiveness. In order to strengthen its financial viability, SPA will need to review its finances. For the future, the market-oriented reforms being introduced gradually at the port should be expanded to include cost-based tariffs, identification of more sources of long-term financing, introduction of measures to increase liquidity, and continued commercialization of port operations. These actions will be needed to allow the port to continue to improve its operating and financial performance, in keeping with its vital role in the area's (and China's) economy. The PCMIS, developed under the project, could be used to identify areas to be improved. Findings and Lessons Learned 12. Findings and lessons include the following: (a) Under the project, SPA capably constructed facilities, procured equipment, carried out studies and developed its organization; (b) Project design was relatively straightforward, which helped eliminate the problem of coordinating various agencies; (c) The bid evaluation report, which took considerable time to complete, could have been finalized more quickly if it had provided more detailed information about the bidders' technical deviations to expedite the Bank's review (para. 9); (d) Forming a joint venture with an experienced terminal operator (SCT) improved productivity and brought modem management techniques to container operations (para. 13); and (e) Because SPA's operating ratio is increasing, it should focus on: (i) reforming tariffs, (ii) reducing operating costs and increasing the degree of liquidity, (iii) shifting from short- to long-term loans to finance long-term investments, (iv) gaining Government agreement to reform the port's tax obligations, and (v) transferring its nonport-related services to other agencies (para. 27). - 1 - IMPLEMENTATION COMPLETION REPORT CHINA NINGBO AND SHANGHAI PORTS PROJECT: SHANGHAI PORT (LOAN 30061-CHA) PART I. IMPLEMENTATION ASSESSMENT A. PROJECT OBJECTIVES 1. When the project was identified in the mid-1980s, most Chinese ports were badly congested and container berths, bulk cargo berths, port equipment, storage yards and transport infrastructure (for distribution) were in short supply. Indeed, it appeared that congestion would threaten the expansion of China's foreign trade. As Shanghai is the largest port in the country and gateway to eastern and central China, the problem was considered severe-not only for Shanghai, but the inland areas, as well. 2. To remedy the sectoral constraints, the Government had begun to reforn the ports in 1986, including a shift to self-financing of port operations and investments from internal cash generation, and to increasing competition among ports for cargo. 3. The project's main objectives were to help Shanghai Port increase its cargo handling capacity and efficiency in the short term and devise a sound long-term strategy for it to serve the large and growing transport needs of the hinterland. Project components included the following: (a) Constructing a multipurpose terninal at Baoshan, consisting of eight berths, three of which were designed to handle containers; (b) Constructing an eight-berth general-cargo terminal at Guangang; (c) Constructing two coal handling berths at Zhujiamen; (d) Reconstructing and rehabilitating four berths at the Minsheng grain terminal; (e) Constructing an 80,000-ton capacity grain silo; (f) Acquiring cargo handling equipment for (a), (b), (c) and (d) above, including container cranes for the Baoshan terminal and bulk coal and grain handling equipment for the Zhujiamen and Minsheng terminals, respectively; (g) Conducting a study to develop a port costing and management information system (PCMIS) to enable China's ports to monitor costs and introduce a more rational, cost-based tariff structure; (h) Establishing a panel of experts to review a Port Master Plan prepared by the Shanghai Port Authority (SPA), formerly known as the Shanghai Harbor Bureau; and (i) Adopting various measures to improve the port's efficiency and safety, based on an action plan. B. ACHIEVEMENTS OF OBJECTIVES Project Implementation 4. This was the fifth Bank-assisted port project in China, following the Three Ports Project, Tianjin Port Project, Huangpu Port Project, and Dalian Port Project (Table 2). It was the second Bank project for Shanghai port, after the Three Ports Project, and was followed by the Shanghai Port Restructuring and Development Project (Ln. 3552-CHA). 5. Civil works. Local contractors constructed the four terminals-Baoshan, Guangang, Zhujiamen, and Minsheng-with local funds. Procurement for the Minsheng terminal, which was originally slated for international competitive bidding (ICB) with Bank financing, was accomplished with local financing and procedures; SPA preferred to use local funds to expedite the construction. 6. The Capital Construction Division of SPA supervised the construction (use of an internal department for this function was a common practice at that time). Construction of the four berths was satisfactory, and the Ministry of Communications (MOC) evaluated the quality as excellent. 7. Procurement of equipment. Procurement was carried out through ICB, limited international competitive bidding (LIB), local competitive bidding (LCB) and shopping procedures. Major equipment was procured through ICB (99 percent of the total amount allocated for Category 2-goods). The first ICB package included equipment for Baoshan, Zhujiamen and Guangang, and the second was for Minsheng. 8. The evaluation was performed in two stages (common in Bank-financed port projects): One, at the regional level, was by SPA; the other, at the central level, was by the State Evaluation Committee. It took from five to 11 months to finalize the bid evaluation report (Table 5C). This rather prolonged evaluation period was due to the complexity and many types of equipment included in the package. 9. The contract award was further delayed because the evaluation report for the Minsheng grain terminal was incomplete. It provided only limited information on the commercial/technical - 3 - deviations of bidders, which were evaluated as nonresponsive. The Bank's review could have been completed earlier if the evaluation report had provided detailed and solid basis of deviations. 10. Technical Assistance (TA) and Training. These involved: (a) a study to develop a port costing and management information system, (b) review of the Master Plan by a panel of experts, (c) implementation of the action plan for operational improvements, and (d) training. TA and training were satisfactorily implemented and completed. (a) The PCMIS study was carried out by foreign and domestic consultants, along with representatives from the ports, under the leadership of MOC and the Ministry of Finance (MOF). The first phase (identifying the tariff and management structure at Shanghai, Ningbo, Dalian and Xiamen ports) was carried out by foreign consultants during 1990-91. The second phase (determining the ports' needs, financed with local funds), was carried out by a domestic team organized by the related agencies in 1991-92. The third and fourth phases (developing and applying software, and installing the system) were carried out by foreign consultants, domestic consultants (from MOF) and the domestic team during 1993-95. Representatives from the four ports, MOC and MOF were trained in Belgium. Software was installed at eight ports (the four mentioned above, plus Nanjing, Dandong, Yantai, and Yinkou), after October 1994. The final domestic team meeting was held at Dalian on December 4-5, 1995 to evaluate the PCMIS study; participants concluded the study was successful. The software system was adopted by all stevedoring companies at Dalian, Nanjing and Yinkou ports, and by selected companies at Shanghai and Ningbo ports. Other ports, such as Tianjin and Zhanjiang, expect to install the system soon, and MOC plans to expand it to other ports in the future. (b) The Master Plan, which was originally produced by SPA, was finalized by a panel of experts (which included five foreigners). It provided a sound basis for developing a long-term strategy and concluded that much of the port activity should shift from the city center to an area on the periphery. This course of action was adopted in the Shanghai Port Restructuring and Development Project, which is now being implemented (following the recommendation in the Master Plan). (c) The action plan for operations and maintenance-which included five elements to improve operations and two to improve maintenance-was successfully carried out (see Table 6). (i) Operations. The goal of reducing ship delays was achieved-dropping from 0.94 days per vessel in 1989 to 0.07 days per vessel in 1994; new container handling equipment was obtained and some items were modernized; - 4 - (ii) Maintenance. MOC guidelines were strictly followed and periodic inspections were carried out for civil works; obsolete equipment is being replaced with funds from Ln. 3552-CHA. (d) SPA conducted extensive overseas and domestic training for staff at four terminals in modem port operations and environmental protection beyond what was planned in the SAR: for overseas training, 298 person-months against 120 person-months; for domestic training, 4,301 staff against 3,200 staff (see Table 5B). To conduct the training, SPA used foreign experts in Shanghai. It supported the effort with its own funds and those from other ports, and bilateral grants. In addition, it is training staff under the Bank loan 3552-CHA. 11. Private sector involvement. During implementation, a joint venture company, the Shanghai Container Terminal Ltd. (SCT), was created by SPA's Shanghai Container Development Company and a private investor, the Hong Kong International Terminal (HIT), to operate container terminals at Shanghai. This was the first joint venture involving a private investor for operating containers in the major ports in China. SPA applied some of its assets to acquire a 50 percent share in the company. 12. SCT improved operational efficiency: The average ship berthing time dropped from 1.35 days in 1990 to 0.62 days in 1995, and nonproductive time also decreased from 0.24 days to 0.06 days; container traffic increased from 4.5 million tons and 1,027 ships to 11.7 million tons and 3,284 ships, respectively, in the same period. Project Results 13. All project objectives were achieved during implementation: (a) SPA's operational and maintenance capabilities were improved, as the targets in the action plan were achieved; (b) A sound basis for the port's long-term development was provided by the Port Master Plan and the PCMIS study; and (c) Efficiency was improved, particularly in container operations, with the formation of SCT, a joint venture company. 14. Benefits were achieved through savings in: (a) cargo-handling costs, (b) ship waiting and berthing time, and (c) cargo time. The economic internal rate of return (EIRR) is estimated at 22.6 percent against the 18.2 percent in the SAR, which is considered satisfactory. 15. Cost estimates at appraisal were slightly lower than actual (about 7 percent). Final project costs were estimated at about $281.6 million (or Y 1,058.9 million plus $47.6 million) against $264.3 million (or Y 825.9 million plus $47.6 million) at appraisal. The local currency -5 - increase was due to local price hikes during implementation and higher cost for procurement of equipment, in particular, for the Minsheng grain terminal. 16. No environmental or resettlement problems arose during implementation. Financial Performance 17. Major financial reforms. Some major changes occurred after project preparation and during implementation that affected SPA's financial condition and reporting procedures. These included the following: (a) Decentralization. From 1986 onwards, some of the major ports' management and financial functions were decentralized from the State (MOC) to the municipalities. Port authorities assumed responsibility for the day-to-day management, operational, budgetary, construction and development functions, although MOC still approves major projects and plans affecting the ports' long-term development. However, the ports now bear the financial obligations for any loans they obtain. For this reason, the Government has reduced the tax they previously paid and instead requires them to pay a lower annual flat fee (which enhanced their internal cash generation). This arrangement still continues. The key financial terms of the port's financial and management included the following: Rehabilitation projects of over Y 30 million needed State approval; annual income tax payments to the State were replaced by an annual lump-sum payment of Y 51.55 million; and the port also paid a flat annual fee of Y 20 million to an energy and transport fund and Y 1.0 million for construction and other taxes. During 1993-95, the total annual tax payments were recalculated to one single payment of Y 35.0 million. (b) New Financial Reporting Procedures. Beginning in July 1993, under MOF's instructions, SPA adopted new financial reporting procedures in order to align Chinese accounting procedure more closely to the Western accounting system. The purpose of the new system is to accelerate the port's commercialization and privatization by providing Western accounting instruments. (c) Revaluation of Fixed Assets (RFA). The port had two RFAs. The initial one, in 1992, was the first of its kind in more than 40 years and was carried out cautiously-confined to the five major types of handling equipment. Its impact was limited and only increased the value of fixed assets by about 13 percent, or Y 423.8 million. In the second RFA, in 1994, the value of fixed assets increased by about 10 percent, or Y 345.6 million. - 6 - (d) Joint venture operations. In August 1993, SPA formed a container handling company (SCT), using part of its existing assets to acquire 50 percent of the company. SCT now plays a dominant role in the port's container operations, and in 1994, handled more than 90 percent of this traffic. 18. Past financial performance. Despite an operating ratio from 1986 to 1994 that was higher and net profit after taxes that was lower than SAR estimates, SPA's financial performance is still acceptable. The volume of traffic handled in 1993 (the last available forecast year in the SAR) was 112.6 million tons, which was about 3 percent higher than the appraisal estimate (109.6 million tons). Its net profit after taxes in 1993, however, was only Y 222.0 million (against a forecast of Y 456.8 million). Traffic volume remained the same, but revenue increased by an average of 24.0 percent a year. The main reason for the lower net profit was the rapid increase in average operating costs of about 30.5 percent a year (against 10.2 percent projected in the SAR). 19. The SAR's conservative financial forecasts were developed when the State strictly set tariff and price controls for almost every major commodity. As a result, cost increases and inflation were rare. In addition, the Government subsidized the cost of many commodities during the previous three decades (including cargo) and charged users only the planned prices. Thus, at the time the SAR was written, it was assumed that: (a) real port charges would remain virtually constant and (b) the rate of inflation would be low (from 4.6 to 6.5 percent during 1986-93). Although reasonable at the time, these assumptions now appear very low due to much higher than expected inflation. 20. Although unit tariffs rose during 1986-93 by an average of 20.3 percent per year, they were not high enough to cover increased unit operating costs, which rose by 26.7 percent a year (against 7.3 percent projected in the SAR). Also, the higher depreciation (from the RFA) caused operating costs to rise. In addition, because the container operation at Shanghai-the most profitable cargo- handling item at the port-was transformed into a joint venture, the port only obtained half the profits (although the teu handled rose by about 28 percent in 1994). 21. Highlights of SPA's income statements for selected years, as compared with the SAR forecast, along with the latest financial data, are summarized below (see Table Sl.1, Annex 1 for details. -7 - 1986 1990 1993 1995 Actual SAR Actual SAR Actual Est. -------------------------------------------- (Y million) --------------------------------------------- Revenue: 623.13 905.39 1,003.51 1,099.91 2,810.00 2,618.00 Less: Operating taxes 21.78 33.16 33.36 40.28 78.00 76.00 Operating costs 251.48 401.69 594.41 496.31 1,675.00 1,654.00 Operating profit 349.87 470.54 375.74 563.32 1,107.00 888.00 Less: Nonoperat. expense (net) 21.78 31.03 60.89 33.98 774.00 684.00 Profit before Tax (A) 328.09 439.51 314.85 529.34 333.00 204.00 Taxes 72.55 72.55 72.55 72.55 111.00 165.00 Net profit after taxes 255.54 366.96 242.30 465.79 222.00 39.00 Average net fixed assets (B): 826.16 1,744.91 1,533.02 2,641.60 2,440.70 2,857.19 Retum on Average Net Fixed Assets (A/B) (%) la 40% 25% 21% 20% 14% 7% Operating Ratio L2 41.8 46.1 61.3 46.8 59.5 65.1 /a Retum on average net fixed assets = profit before tax / average net fixed assets. /b Operating ratio = operating costs / (revenue-operating taxes). 22. Actual operating ratios were higher than the SAR targets (59.5 percent against 46.8 percent, for 1993), and are expected to reach 65 percent for 1995. This was due to a rapid rise in costs and other expenditures, as well as a downturn in grain-handling revenues while the grain terminal was being improved under the project. 23. In 1993, the rate of return on average net fixed assets (RRFA) was 14 percent (21.3 percent projected in the SAR). In 1994, it dropped to 13 percent, due to the rapid increase in operating costs and the higher fixed assets because of the asset revaluation. For 1995, the RRFA was expected to drop further to about 7 percent, due to reduced traffic volume and added hikes in operating costs. 24. Present Financial Performance. Despite rising operating costs for the last few years, the port's financial condition is acceptable, but warrants action if it is to remain so. Debt service (DS) was 2.9 (33.3 forecast in the SAR) in 1993, which was still good, and further improved to 4.4 in 1995. The debt and capital ratios of the port in 1993 reached 19.2 percent (9.0 percent forecast in the SAR), rising from 7.4 percent in 1986. The increased borrowing reflected the port's financial condition of being asset rich and cash poor, with current liabilities much larger than long-term liabilities. To improve this situation, the port should borrow long-term loans to finance long-term investments. During 1986-94, the share of accounts receivable increased from 13.4 percent to 37.9 percent. The current ratio in 1994 was at the marginal level of 1.0 (if the current ratio is less than - 8 - 1.0, the port has short-term solvency problems and needs to strengthen its finances). This situation would be substantially improved if SPA follows the recommendations listed in para. 27. 25. The most noteworthy points of the balance sheet can be found in Table S1.2, Annex 1, and are summarized as follows: 1986 1990 1994 1995 (Y million) Actual SAR Actual SAR Actual (Est.) Net fixed assets 839.48 1,897.98 1,787.04 2,786.47 2,274.01 3,107.00 Current assets 321.45 405.05 542.76 627.19 1,637.74 2,349.00 Special fund assets /a 198.10 434.26 285.81 675.89 2,302.00 3,000.00 Total 1,359.03 2,737.29 2,615.61 4,089.55 6,213.75 8,456.00 Equity 777.72 849.68 1,446.40 849.68 3,935.26 4,483.00 Port development funds - 728.45 103.01 1,746.55 - - Long-term debt 61.76 248.55 438.19 257.07 936.17 1,837.00 Current liabilities 187.50 247.02 230.09 355.73 1,342.32 2,136.00 Special funds 332.05 623.89 397.92 880.52 - - Total 1,359.03 2,737.29 2,615.61 4,089.55 6,213.75 8,456.00 Debt/(debt+equity) in % 7.4 13.6 22.0 9.0 19.2 29.1 Current ratio 1.7 1.4 2.4 1.8 1.2 1.1 la Including the deferred assets. 26. Future Financial Performance. In recent years, the increase in operating costs and current liabilities and declining traffic (due to competition among the ports) caused liquidity problems; however, with moderating inflation, rebounding grain revenues with completion of the grain terminal, and other positive developments, the port's financial condition is expected to improve. 27. There are still a few areas in which SPA can improve its financial condition. After the decentralization, the port's new responsibility for self-financing all its capital investments has created pressure on its cash flow (Table S1.3, Annex 1). MOF provided, in return, the preferential financial agreement (the flat annual payment) with SPA which expired in 1995. SPA should negotiate with MOF for streamlining tax payments, in view of its obligation to self-finance investments. Furthermore, SPA should address the following: (a) Tariffs. The standard tariff schedule is set by the Central Government and applies to all ports nationwide. It is recommended that the port authority be allowed a certain range of flexibility to determine its own tariffs. The basic principles would be to: (i) cover operating costs; (ii) strengthen the port's finances; and (iii) encourage the port authority to compete with nearby ports by providing better service. -9- (b) Degree of liquidity. Shorter operating cycles (OC) reduce the amount of cash that ports need to operate (the OC is the time needed to collect accounts receivable plus the turnover time of inventory). At Shanghai, the OC has steadily increased: For example, it was 107.1 days in 1986, 192.3 days in 1994 and expected to be 240.2 days in 1995. This reflects prolonged accounts receivable (essentially an interest free loan for the buyers) and increased inventory (which results in higher operating costs), which will drain the port of its cash. Thus, the OC period should be shortened, as this would generate vitally needed cash and improve the port's liquidity. Any nonperforming account receivable should be written off. (days) 1986 1994 1995 (Actual) (Estimates) Average number of days required to: (a) collect accounts receivable (AR) 21.4 100.0 116.1 (b) sell inventory 85.7 92.3 124.1 Operating Cycle (OC) 107.1 192.3 240.2 (c) Structure of borrowing. In recent years (1992-94), current liabilities were increased by more than three and a half times due to the rapid increase in borrowing, to pay for the port's construction. This is an unsatisfactory policy, and the port authority should borrow long-termn loans to finance long-term investments. (d) Services reforms. Some welfare or social activities not directly related to the port's daily operations, such as schools and hospitals, should be transferred to local municipal agencies, along with their operating costs. Economic Reevaluation 28. The economic analysis in this report is based on the reevaluation of SAR estimates on traffic, operational performance, economic costs and the benefits of project components. The methodology used in the ICR is similar to that in the SAR and is summarized as follows: (a) Capital investment and maintenance costs were revised to reflect December 1995 prices and included in the cost stream; (b) The benefit stream, also reflected in December 1995 prices, was included and consists of savings in port handling, ship port time (berth and waiting), and cargo port time (berth and waiting); - 10- (c) A project life of 20 years was assumed, with capital investments for all berths being made from 1986 to 1995; and (d) Benefits started to accrue for the two coal berths, three container berths and 11 general cargo in 1993. For the two grain berths, benefits started in 1996. 29. Use of the berths changed during project implementation because the composition of the traffic changed. While container traffic was much higher than the SAR estimate, growth of timber traffic was much slower. Thus, SPA converted a timber berth and a multipurpose berth into two container berths. This conversion was considered in the ICR economic analysis. 30. Total traffic handled by the port in 1994 was lower than expected (largely because coal traffic was reduced), although traffic handled by the project berths was similar to the SAR projection: The decreased coal and grain traffic was completely offset by the better-than-expected container and general cargo traffic, which constitute 47.7 percent of total traffic and 81 percent of benefits. 31. After assessing the revised data, the revaluation of the economic internal rate of return (REIRR) is 22.6 percent, which is slightly higher than the SAR estimate of 18.2 percent. A detailed analysis is presented in Annex 2. 32. The REIRR and the SAR estimates in terms of the economic rate of return and the net present value (NPV) are given below. SAR ICR Best estimate of rate of return (%) 18.2 22.6 NPV (12%, million Yuan) 724.7 La 1,302.4 la Y 678.4 million in July 1988 prices were inflated by the factor of 1.9151 to reflect December 1995 prices. C. MAJOR FACTORS AFFECTING THE PROJECT 33. Positive influences included: (a) A rapidly developing local and national economy that increased port traffic (particularly container traffic); (b) The Borrower's experience in implementing projects, including the Bank- financed project; and (c) A close working relationship between the Borrower and Bank. 34. Negative factors included: (a) Price hikes during implementation that increased project costs slightly and port operating costs significantly; and (b) A complex coordination of the civil works construction and procurement of equipment (Minsheng grain terminal) which was not properly considered in the implementation program. D. PROJECT SUSTAINABILITY 35. At completion, the project appeared sustainable. Because container traffic will undoubtedly grow along with rapid economic development in the Shanghai area, the port's revenue will increase. In November 1992, SPA established a joint venture company, the Shanghai Container Terminal Limited (SCT), with an experienced foreign container operator that will further improve the productivity of the container terminals. In addition, SPA has enough resources to maintain and operate the port efficiently. Risks still exist, such as SCT's monopoly and excess labor at the container terminals. SPA management should also closely review the port's financial situation and identify areas that can be improved by using PCMIS. E. BANK PERFORMANCE 36. The Bank identified the issues and prepared the project well and in a timely fashion: It was identified in April 1987 and appraised in March 1988. Bank staff resources leading to appraisal totaled 120.5 staff-weeks for the Ningbo and Shanghai Ports Project. Bank supervision was also efficient: The annual average input of staff resources was 17.5 staff-weeks combined with the Ningbo Port Project, which included various specialties (see Table 12). This was possible because the supervision of six Bank-financed port projects was well coordinated. 37. With regard to procurement, the Bank took a consistent position and provided guidance, when necessary. F. BORROWER PERFORMANCE 38. In general, the Borrower's performance was good and preparation and implementation were adequate. Action plan targets were substantially met during implementation, and as shown in Table 10, Part II, covenants were met, as well. The Borrower's performance, therefore, was evaluated as satisfactory. G. ASSESSMENT OF OUTCOME 39. This project is assessed as satisfactory because it achieved all major objectives without any major shortcomings. It was not assessed highly satisfactory, because completion was delayed for two years. - 12 - 40. Net present value was positive, Y 1,676 million against Y 725 million in the SAR, when flows were discounted at 12 percent for a major portion of the investment. H. FUTURE OPERATIONS 41. Based on the port's Master Plan, SPA plans to develop a port facility along the Yangtze River and Hangzhou Bay (Jinshanzui). For the areas of interest to foreign private investors, such as container terminal development, it is likely that SPA will seek partnerships. With regard to the deepening of the Channel, which is one of the most critical issues for Shanghai Port development, but may not attract private investors, Shanghai city, together with MOC, has proposed that the Government approve a publicly funded project to deepen the mouth of the Yangtze up to 12.5 m in three phases: (a) 7 m to 8.5 m, (b) then to 10 m, and (c) finally, to 12.5 m. Although the project's finances would not be linked to SPA, the project will directly affect the port's development. Thus, SPA should closely watch its evolution and revise its Master Plan, accordingly. I. FINDINGS AND LESSONS LEARNED 42. The findings and key lessons from project implementation include: (a) SPA capably constructed facilities, procured equipment, carried out studies and developed its organization; (b) Project design was relatively straightforward, which helped eliminate the problem of coordinating various agencies; (c) The bid evaluation report, which took considerable time to complete, could have been finalized more quickly if it had provided more detailed information about the bidders' technical deviations; (d) Forming a joint venture with an experienced terminal operator (SCT) improved productivity and brought modem management techniques to container operations; and (e) Even though SPA's financial performance is in an acceptable range, SPA should focus on and discuss with the relevant Government agencies the following, since its cash flow is gradually deteriorating: (i) reforming tariffs, (ii) reducing operating costs, (iii) shifting to long-term loans to finance long-term investments, (iv) transferring its nonport-related services to other agencies. 43. Since this is the sixth completion report (after two Project Completion Reports for Three Ports Project and Dalian Port, and three ICRs for Tianjin, Huangpu and Xiamen Ports) for Chinese port projects approved in 1980s, it is worth summarizing findings and lessons learned from these projects as shown below: - 13 - (a) Decentralization of the ports has been satisfactory; this was proven by the operational and financial performance of the port authorities; (b) Involvement of the private sector has been initiated, but is still limited, in container terminal operation (it is already established in Shanghai and Dalian, and being prepared/planned in Xiamen and Ningbo); (c) Simple project designs and clear implementation targets with a single executing agency were the key for successful implementation of the projects; (d) The major reason for implementation delays was procurement, due to long evaluation periods; in order to avoid confusion in the evaluation period: (i) postqualification criteria should clearly be provided in bidding documents; (ii) an evaluation report should provide clear and sufficient reasons for nonresponsiveness, if the lowest bidder is not proposed to be awarded; and sufficient time should be reserved for the procurement process; and (e) The provision of an action plan for operational improvement in SARs was effective for supervision and implementation of the project; productivity was improved through implementation of action plans (Huangpu, Xiamen, Shanghai and Ningbo). 44. For future port development, the following changes are suggested: (a) The port tariff is largely regulated by the State and not based on the actual operating cost; this should be corrected; (b) Competition is the key factor for operational improvement; since many ports enjoy a monopoly condition, it is important to introduce the concept of competition among the terminal operators; and (c) Some nonport activities such as schools and hospitals should be transferred from port authorities to local agencies. - 14 - PART II: STATISTICAL ANNEXES TABLE 1: SUMMARY OF ASSESSMENTS A. Achievement of objectives Substantial Partial Negligible Not applicable Macro policies x Sector policies x Financial objectives x Institutional development x Physical objectives x Poverty reduction x Gender issues x Other social objectives x Environmental objectives x Public sector management x Private sector development x Other (specify) x B. Project sustainability Lilkely Unlikely Uncertain x Highly C. Bank 12erformnance satisfactor,v Satisfactory Dleficient Identification x Preparation assistance x Appraisal x Supervision x D. Borrower perforrance Preparation x Implementation x Covenant compliance x Operation (if applicable) x E. Assessment of outcome x - 15 - TABLE 2: RELATED BANK LOANS/CREDITS Loan/credit title Purpose Year of approval Status Preceding operation 1. Three Ports Project expansion 1982 completed on 6/30/88 2. Tianjin Port Project expansion 1986 completed on 10/31/94 3. Huangpu Port Project expansion 1987 completed on 12/31/94 4. Dalian Port Project expansion 1988 completed on 12/31/93 Following operations 1. Xiamen Port Project expansion 1988 completed on 3/31/95 2. Shanghai Port Restructuring and Development Project expansion 1992 to be completed on 6/30/99 TABLE 3: PROJECT TIMETABLE Item Date planned Date actual Identification 04/87 Pre-appraisal 09/87 Appraisal 01/88 03/88 Negotiations 04/88 09/88 Board approval 06/88 12/13/88 Signature 02/13/89 Effectiveness 05/09/89 Project completion 12/31/93 12/31/95 Loan closing 12/31/93 12/31/95 - 16- TABLE 4: LOAN DISBURSEMENT (in $) Period Planned Actual Disbursements Cumulative Disbursements Cumulative disbursements disbursements 07/31/88 - 9/30/88 0 10/01/88 - 12/31/88 0 0 01/01/89 - 3/31/89 3,250,000 3,250,000 04/01/89 - 6/30/89 5,100,000 8,350,000 0 0 07/01/89 - 9/30/89 3,250,000 11,600,000 3,000,000 3,000,000 10/01/89 - 12/31/89 3,250,000 14,850,000 0 3,000,000 01/01/90 - 3/31/90 3,710,000 18,560,000 0 3,000,000 04/01/90 - 6/30/90 3,710,000 22,270,000 331,330 3,331,330 07/01/90 - 9/30/90 3,250,000 25,520,000 2,561,964 5,893,294 10/01/90 - 12/31/90 3,710,000 29,230,000 7,229,496 13,122,790 01/01/91 - 3/31/91 3,250,000 32,480,000 1,508,151 14,630,941 04/01/91 - 6/30/91 2,780,000 35,260,000 924,248 15,555,189 07/01/91 - 9/30/91 2,320,000 37,580,000 3,908,145 19,463,334 10/01/91 - 12/31/91 930,000 38,510,000 572,807 20,036,141 01/01/92 - 3/31/92 2,320,000 40,830,000 0 20,036,141 04/01/92 - 6/30/92 2,320,000 43,150,000 2,129,040 22,165,181 07/01/92 - 9/30/92 1,850,000 45,000,000 1,730,993 23,896,174 10/01/92 - 12/31/92 1,400,000 46,400,000 380,433 24,276,607 01/01/93 - 3/31/93 0 24,276,607 04/01/93 - 6/30/93 0 24,276,607 07/01/93 - 9/30/93 315,524 24,592,131 10/01/93 - 12/31/93 1,273,404 25,865,535 01/01/94 - 3/31/94 0 25,865,535 04/01/94 - 6/30/94 0 25,865,535 07/01/94 - 9/30/94 8,190,689 34,056,224 10/01/94 - 12/31/94 3,572,326 37,628,550 01/01/95 - 3/31/95 1,662,565 39,291,115 4/01/95 - 6/30/95 4,273,245 43,564,359 07/01/95 - 9/30/95 706,674 44,271,032 10/01/95 - 12/31/95 856,047 45,127,078 01/01/96 - 3/31/96 867,971 45,995,049 4/01/96 - 6/30/96 Undisbursed: 404,951 - 17- TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION TABLE 5A: IMPLEMENTATION SCHEDULE Planned Actual 1987 1988 1989 1990 1991 1992 1993 1994 1995 Item\Year Start Complete Start Complete Civil Works 1. Baoshan Terminal Jul-86 Dec-90 Jul-86 Dec-901 : L__________ 2. Zhujiamen Terminal Oct-86 Dec-88 Oct-86 Dec-89 3. Guangang Terminal Jul-87 Dec-90 Jul-87 Dec-90 I: 4. Minshen Terminal Apr-89 Dec-91 Dec-91 Jun-94 Equipment Apr-88 Dec-91 Apr-88 Dec-95 00 ______ -__________ Planned Actual - 19- Table 5: (CONT'D) TABLE SB: TRAINING PROGRAM Overseas Training Planned Actual Number of Person- Number of Person- Persons Months Persons Months Management 40 40 224 239 Technicians 60 60 87 59 Workers 20 20 0 0 Total 120 120 311 298 Domestic Training Planned Actual General Bulk General Bulk Container purpose handling Total Container purpose handling Total --------------- (number of personnel) -------------- ------------- (number of personnel) ------------- Management 150 100 150 400 250 170 250 670 Technicians 150 150 100 400 1,980 1,980 1,330 5,290 Workers 500 1,000 500 2,000 5,195 10,390 5,195 20,780 Services 100 180 120 400 3,120 5,610 3,740 12,470 Total 900 1,430 870 3,200 10,545 18,150 10,515 39,210 Number of Staff at Each of New Terminal Baoshan Guangang Zhujiamen Minsheng Total From the existing terminals 228 260 106 111 705 New staff 757 1,012 2,309 288 4,366 Total 985 1,272 2,415 399 5,071 - 20 - TABLE 5C: PROCUREMENT PROCEDURES Item Contract Bid docu- Bid Evaluation Signing Evaluation amount ments to opening report to contract period ($'000) the Bank the Bank (months) Equipment 1. Quayside container crane 4,936 Jan-89 Jun-89 Nov-89 May-90 5 2. Quayside container crane 4,515 Jan-89 Jun-89 Nov-89 Aug-90 5 3. Rubber tyred gantry cranes 3,890 Jan-89 Jun-89 Nov-89 Dec-90 5 4. Bucket wheel unloaders 2,457 Jan-89 Jun-89 Nov-89 May-90 5 5. Forklift trucks (25 ton) 1,555 Jan-89 Jun-89 Nov-89 Aug-90 5 6. Container trucks 1,367 Jan-89 Jun-89 Nov-89 Sep-90 S 7. Mobile cranes 1,201 Jan-89 Jun-89 Nov-89 Jan-90 5 8. Tractors 953 Jan-89 Jun-89 Nov-89 Jan-90 S 9. Forklift trucks (36 ton) 687 Jan-89 Jun-89 Nov-89 Apr-90 S 10. Conveying system 13,192 Jan-92 Apr-92 Mar-93 Jan-94 11 11. Continuous ship unloaders 9,397 Jan-92 Apr-92 Mar-93 Jul-93 11 - 21 - TABLE 6: KEY INDICATORS FOR PROJECT OPERATION (ACTION PLAN) Key Performance Indicators Appraisal Target at Completion Actual Item Unit in 1994 in 1994 Total port traffic Whole port '000 ton 157,307 165,809 Port authority '000 ton 132,300 98,924 of which: Dry bulk Coal '000 ton 57,900 38,921 Grain '000 ton 5,800 4,016 Container '000 ton 4,300 10,581.0 '000 TEU 520.2 1,199.0 Break bulk '000 ton 50,217 31,044 Timber '000 ton 4,850 2,160 Total operating revenue million Yuan 1,099.81 2,567.00 Total operating cost million Yuan 496.31 1,610.00 Gross operating profit million Yuan 563.32 880.00 Pre-tax operating profit million Yuan 529.34 307.00 Operating ratio % 47 65 Training 3,200 4,301 - 22 - TABLE 7: STUDIES INCLUDED IN THE PROJECT 1. Port Costing and Management Information System (PCMIS) Study (a) Purpose as defined at appraisal The study was to provide China's ports with a computer-based commercial accounting system which captures fully the capital and operating costs of the port, disaggregated to a sufficiently detailed set of cost centers to allow effective management control over costs. (b) Status Satisfactorily completed in December 1995. (c) Impact of study Computer software was installed at (i) all stevedoring companies in Dalian, Nanjing and Yinkou ports, (ii) three stevedoring companies and the port authority in Ningbo port; and (i) one terminal (No. 9 company) in Shanghai port. Tianjin and Zhanjiang ports are planning to install software. 2. Review of the Master Plan of the Port by a Panel of Experts (a) Purpose as defined at appraisal The panel of experts established and chaired jointly by the SPA and Bank reviewed SPA's master plan for the port. Given the magnitude of the investment to be made and far- reaching consequences for Shanghai and its interior, the review was agreed upon by SPA and the Bank, during appraisal. (b) Status The panel met five times from September 1988 to March 1990 and finalized the plan. (c) Impact of the study The first step of the master plan has been implemented under the Bank-financed Shanghai Port Restructuring and Development Project (Ln. 3552-CHA), since 1992. - 23 - TABLE 8: PROJECT COSTS, FINANCING AND ALLOCATION OF LOAN PROCEEDS TABLE 8A: PROJECT COST Planned Actual Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total -------(Yuan '000)---------- -----------($ *000)--------------- -------------(Yuan'000----------- ------------ 000---------- I. Civil Works Baoshan 130,000 194,997 324,997 35,135 52,702 87,837 291,050 0 291,050 64,306 0 64,306 Guangang 119,958 179,931 299,889 32,421 48,630 81,051 338,070 0 338,070 74,695 0 74,695 Zhujiamen 30,488 45,732 76,220 8,240 12,360 20,600 51,080 0 51,080 11,286 0 11,286 Minsheng 21,400 44,300 65,700 5,784 11,973 17,757 240,500 0 240,500 53,137 0 53,137 Subtotal 301,846 464,961 766,807 81,580 125,665 207,245 920,700 0 920,700 203,425 0 203,425 2. Equipment Baoshan 2,590 55.241 57,831 700 14,930 15,630 56,810 93,189 149,999 12,552 13,940 26,492 Guangang 771 30,673 31,444 208 8,290 8,498 41,680 56,823 98,503 9,209 8,500 17,709 Zhujiamen 22,829 16,017 38,846 6,170 4,329 10,499 25,090 23,398 48,488 5,544 3,500 9,044 Minsheng 40,996 40,996 11,080 11,080 14,200 136,775 150,975 3,137 20,460 23,597 Subtotal 26,190 142,927 169,117 7,078 38,629 45,707 137,780 310,184 447,964 30,442 46,400 76,842 3. TA &training 2,183 10,064 12,247 590 2,720 3,310 450 8,008 8,458 99 1,198 1,297 Subtotal 2,183 10,064 12,247 590 2,720 3,310 450 8,008 8,458 99 1,198 1,297 Total Base Cost 330,219 617,952 948,171 89,248 167,014 256,262 1,058,930 318,192 1,377,122 233,966 47,598 281,564 Physical cont. 2,130 4,430 6,560 578 1,197 1,775 Price contingencies 8,321 39,009 47,330 1,108 5,199 6,307 Grand Total 340,670 661,391 1,002,061 90,934 173,410 264,344 1,058,930 318,192 1,377,122 233,966 47,598 281,564 For the comparison of Planned and Actual Costs, the foreign component was calculated at $47.598 million. Grand Total 825,948 176,113 1,002,061 216,746 47,598 264,344 Exchange rate: Y 1.0-$ 1/4.526 (from Y to S) at the ICR SI .0=Y 6.685 (from S to Y) - 24 - TABLE 8B: PROJECT FINANCING ($ million) Planned Actual Source of Financing Local Foreign Total Local Foreign Total IBRD 46.40 46.40 46.00 46.00 Second TCC (Cr. 1664) 0.72 0.72 0.20 0.20 Government (Loan from MOC) 216.37 0.00 216.37 234.50 0.00 234.50 Other (Japanese Grant) 0.86 0.86 0.86 0.86 Total 216.37 47.98 264.35 234.50 47.06 281.56 TABLE 8C: ALLOCATION OF LOAN PROCEEDS Planned Actual Category Amount of the Amount of the Loan Allocated Loan Allocated (in $) (in $) (1) Civil Works 2,000,000 0 (2) Goods 41,300,000 45,995,049 (3) Consultants' Services 700,000 0 and Technical Assistance (4) Unallocated 2,400,000 0 Cancellation 404,951 Total 46,400,000 46,400,000 - 25 - TABLE 9: ECONOMIC COSTS, BENEFITS AND MAJOR FINANCIAL INDICATORS SAR ICR Total Traffic (1994)(in million tons): 132.3 98.9 Of General Cargo 21.2 28.6 Container 4.3 10.6 Coal 57.9 38.9 Grain 5.8 4.0 Financial (1994, in %): Return on average net fixed assets 21.3/a 13.0 Operating ratio 46.8Za 64.7 Debt service coverage n.a. 0.6 Debt capital ratio n.a. 24.9 Economic (December 1995 prices): Total project cost (million Yuan) 1,432.8 1,675.6 NPV (million Yuan, 12%) n.a. 1,302.4 Economic rate of return (in %) 18.2 22.6 /a Number in 1993 TABLE 10: STATUS OF COVENANTS Original Revised Agreement Section Status Date Date Description of Covenant Comments Loan 2.02 OK 02/13/89 Borrower to open and maintain a special account in the name of SPA 3.04 OK Borrower shall carry out a port costing and MIS study Project 2.06 OK SPA to review and update the Master Study was reviewed by the Panel of Plan Experts and updated 2.07 OK SPA to implement the Action Plan Action Plan was properly implemented 4.01(a) OK SPA to maintain proper records and accounts. 4.01(b) OK SPA to have accounts audited Audited reports were received in time and submitted to the Bank for and reviewed by Bank. review not later than six months after the end of the fiscal year. - 27 - TABLE 1 1: BANK RESOURCES: STAFF INPUT Ld FY 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Total Preappraisal 5.6 5.6 Appraisal 58.3 41.1 15.5 114.9 Negotiations 4.5 4.5 Supervision 15.1 34.0 19.9 12.5 16.5 10.0 14.6 122.6 Completion 18.0 18.0 Total 261.1 La Staff week is combined with Ningbo Port Project which is under the same loan number, Loan 3006. TABLE 12: BANK RESOURCES: MISSIONS Performance Rating Number Imple- Stage of project Month/ of Days in Specialized staff skills mentation Development Types of cycle year persons the field represented La status L& objectives L2 problems Identification 04/87 4 5 EGR, EC, FA, ENV Preappraisal 10/87 11 14 EGR, EC, FA, OP, ENV Appraisal 03/88 8 20 EGR, EC, FA, OP, ENV Supervision 1 09/89 2 5 OP, FA/EC I I Supervision 2 05/90 2 4 OP, FA/EC 2 1 (i) Supervision 3 11/90 1 3 FA I I Supervision 4 12/90 3 4 OP, EGR, FA/EC I I Supervision 5 02/92 2 3 OP, EGR I I Supervision 6 09/92 2 4 EGR, FA/EC I I Supervision 7 03/93 3 1 EC, OP, EGR I I Supervision 8 08/93 1 1 OP, EGR 2 1 (ii) Supervision 9 10/93 1 I FA 2 1 Supervision 10 12/93 2 1 EGR, FA/EC I I Supervision 11 11/94 2 2 FA, EGR S S Supervision 12 09/95 1 1 EGR S S ICR 12/95 2 14 EGR, FA/EC S S la EGR: Engineer; FA: Financial Analyst; EC: Economist; OP: Operations Specialist; ENV: Environmentalist. lb 1: Highly satisfactory; 2: Satisfactory; S: Satisfactory. (i): Delay in implementing Action Plan. (ii): Procurement delay. - 28 - Appendix A APPENDIX A: ICR PREPARATION MISSION'S AIDE-MEMOIRE December 10-22, 1995 Shanghai Port Project (Ln. 30061-CHA), ICR Preparation 1. A World Bank mission comprising Messrs. T. Tsutsumi and H.K. Yen visited Shanghai Port from December 10-22, 1995 to prepare the Implementation Completion Report (ICR). The mission wishes to thank the officials of the Government of China (GOC), Ministry of Communications (MOC), as well as the management and staff of Shanghai Port Authority (SPA) for the courtesies and cooperation extended to it during this visit. 2. This Aide-Memoire summarizes the agreements reached with SPA officials on the preparation of the ICR. The agreements of the mission, as incorporated in this Aide-Memoire, are subject to review and confirmation by Bank management. The View of the Bank and SPA 3. The Bank mission and SPA have the sane view on the project implementation: the project is expected to be satisfactorily completed by December 31, 1995. ICR Preparation 4. The Bank started preparation of the ICR in September 1995, requesting SPA to provide necessary information and data. The Bank received draft information and data in October 1995. 5. The mission visited the project site and discussed with SPA on the preparation of the ICR. The mission obtained the necessary information and reached agreements on the actions to be taken as follows: (a) SPA will review the draft ICR which the Bank ICR mission left; SPA will send their comments to the Bank by January 31, 1996, if any; (b) the Bank will send a confirmation of the Bank management on the agreement between SPA and the Bank ICR mission; will send a draft ICR to the Borrower, MOC and SPA (to be confirmed by MOC), by May 31, 1996; (c) SPA's comments as well as their own evaluation will be sent to the Bank by February 29, 1996; and (d) the Bank will finalize the ICR and send to the Board of the Bank by June 30, 1996. December 22, 1995 Shanghai, China - 29 - Appendix B APPENDIX B: BORROWER'S CONTRIBUTION TO THE ICR Section A 1. The project of construction of Guangang, Baoshan and Zhujiamen harbor districts and reconstruction of Minsheng bulk grain terminal in Shanghai, China which was implemented by Shanghai Port Authority (Ln. 30061-CHA) has a total loan amount of $4.64 million. The loan was all used for procurement of equipment which has been completed through ICB, following the Bank's guidelines. 2. The construction of Baoshan new harbor district was started in July 1986, completed in December 1990, and put into use in 1991. The construction of Guangang new harbor district was started in July 1987, completed in December 1990, and put into use in 1991. The civil construction of Zhujiamen was started in October 1986, completed in July 1989 and put into operation in 1990. The three terminals have all been accepted by the State and the quality was evaluated as excellent. The rehabilitation of Minsheng terminal was started in December 1991 and completed in 1995. The terminal is expected to be formally accepted and operational in the first half of 1996. The above four terminals consisted of 20 berths of 10,000 DWT class, with a total capacity increase of 11.6 million tons. The 140 pieces of equipment financed by the Bank loan for Baoshan, Guangang and Zhujiamen terminals were procured through ICB started in 1989 and completed in December 1993. The procurement through ICB of two shipunloaders and one transportation system financed by the loan for Minsheng terminal was started in 1992 and finished in December 1995. 3. The project is reasonable in general layout, handling technology and quay structure type. The equipment parameters are reliable and with a higher automation of technological process. In general, project objectives are achieved, and the project is a success. It has greatly expanded cargo traffic capacity of the port. Statistics show that since the operation of Guangang, Baoshan and Zhujiamen, the volume of cargo handled by these three terminals added up to 53.59 million tons by the end of 1995. 4. Procurement of equipment was carried out through international competitive bidding, which had a benefit cost reduction of some equipment and improvement in handling technology of Minsheng terminal. Some technical personnel were also trained. The construction of new terminals and increase of necessary equipment have enlarged the handling capacity and meet the requirement of transportation growth. 5. The development under this project consisted of two coal berths, three container berths, two bulk grain berths, 13 general cargo berths and necessary handling equipment, totaling 20 - 30 - Appendix B berths of 10,000 DWT class. The increase of berths has enhanced the comprehensive capacity and function and benefited the increase of port traffic. The port of Shanghai handled total 165 million tons of cargo in 1995. 6. The project also included a technical assistance project which was financed by Technical Cooperation Credit (TCC) for inviting an expert panel (approved by the Bank) to review the master plan for the port of Shianglhai. The work was finished in 1990, and the review report not only helped lay the basis for development under No. 3 project of SPA (Ln. 3552-CHA) also had a referential value for planning restructuring of the port. 7. Particular attention was given to environmental protection and safety construction of the four terminals. During the project implementation, environmental protection facilities such as sewage treatment and dust prevention were equipped in accordance with the related regulation of the State. The inspections made by the local environmental protection agency showed the results were satisfactory. 8. Procurement of the equipment through ICB was executed by a working team which comprised experienced technical personnel from relevant departments of SPA. They are familiar with the World Bank's Guidelines and have a good knowledge of English and rich project management experience. Therefore, the project was executed satisfactorily. They also applied their experience obtained from the ICB items to LCB items. 9. The project design of Baoshan, Guangang and Zhujiamen were basically undertaken by the Chinese design institute, i.e., the Third Harbor Engineering Investigation and Design Institute of MOC, and the project design of Minsheng was undertaken by the Second Harbor Engineering Investigation and Design Institute of MOC. In general, the design is a success. The design institutes made a great effoil to ensure the satisfactory execution of the project. 10. Technical documents for procurement of equipment were jointly prepared by Shanghai Port Authority and end-users. Some reliable and advanced techniques which fully complied with actual location situations were incorporated in the detailed technical specification. Practice has proven that the tendering work was successful. The procurement of equipment has strictly followed the contents stated in SAR and all the equipment was manufactured and delivered according to requirements of the contracts. 11. The closing date of the project was originally December 31, 1993 and was extended to December 31, 1995 as approved by Bank's fax dated October 8, 1993. The main reason for the two-year extension was that the review of draft technical specifications for procurement of equipment took some time, and the bid evaluation report was reviewed several times by the local and the Bank until it was finally approved. It took about 22 months from bid opening till the signing of contract which resulted in a comparatively long for procurement of equipment. - 31 - Appendix B Section B 12. The ICR drafted by the World Bank is comprehensive. It describes completely all the major items of the project executed and analysis provided is correct and complies with the actual conditions. 13. With respect to the data of each item in the ICR, we acknowledge that they are correct and conform to the actual situation. 14. With regard to the reason for the two-year extension of closing date, we agree with what is stated in the ICR, i.e., the closing date was extended due to delay in procurement equipment for Minsheng terminal. Section C 15. From the project appraisal to the reimbursement deadline, the World Bank was very positive and effective. Shanghai Port Authority appreciates all officials and experts from the Bank who participated in this project for their efforts and contributions made to the port development. It gave us deep impression of their strong sense of serious responsibility, scientific way in management and spirit of job respect. 16. During the whole implementation period, we have kept close cooperation and mutual respect with the relative departments of the Bank, especially the guidance on all aspects granted by the Bank's experts. Shanghai Port Authority overcame various difficulties in project implementation and completed the project satisfactorily. 17. Each site supervision mission from the World Bank made a significant effect on the project execution. They inspected the site situation and collected first-hand information, resolved problems that occurred during construction and accelerated the construction procedure by strengthening a mutual understanding and trust. The Bank's mission gave us great support on reallocation of loan and extension of closing date. The Bank officers' instructions, understanding and quick responses to our requests facilitated the project implementation. APPENDIX C: MAP WMD W4L CHINA 3ee & < lX1~_x_c SHANGHAI PORT PROJECT Q 1, , -y'- i ' f_t fl(<4 s ~ ~ ~ ~ ~ ~ ~ ~ ~ I a;, 33< t7pAoll( ' |' '''<\ ^'x ; GU AOSHANG TERMINAL UOTt LAYOUT H III suIwvr -f -, A X >, t C% c4, (; A). 44 z ! MINSHENG TERMINAL V ~~~~~~~~~~ZHUJIAMEN TERAMINAL LAYOUT LYU BAOSHAN TERMINAL LAYOUT N 10 M - 30 : u P t) }^ / s- * ,<VQ) ttt^j1.,,,*s 4, 4 a, ., ' I,,I --'a"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 33 - ANNEX 1 ANNEX 1: FINANCIAL ANALYSIS Table S 1.1: Income Statement (December 31, Y mllion) 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 (Esimates) Trmafic (000 ton) Wholeport 00,659 112,905 126.042 12,32 133,292 146,044 139,539 146,780 162,968 175,956 165,809 160,000 Portauthonty 73,627 81.329 91.136 99.400 102.380 104,106 96.414 97,328 104,765 112,641 98.924 95.000 Of wwhic: ContainermVOOOton) 903 1,44 1,557 1.957 2,748 2.774 4,455 6,105 7,156 8,474 10,38 11,678 ContnnertinDOO0teu) 115 205 204 224 313 354 456 377 730 934 1.199 .401 Revenu Loading/unloading 225.04 316.44 335.71 339.62 350.92 361.28 420.92 498.01 675.01 1,152.00 950.00 930.00 Storage 4868 6583 76.67 64.44 99.25 137.48 149.26 164.01 140.23 173.00 151.00 124.00 Other 90.78 130 18 130.34 190.70 25594 26.91 358.61 473.70 454.0 973.00 1,068.00 1,19000 Markebng 50 47 J 451 60.41 55.15 50.41 102.21 7472 74 39 219 35 512.00 39s.00 374.00 Subtotal 4197 100U 3.i Z2 so3 l.445t L209.11 14.67 2L810.00 2567.00 2.618.00 Otmtnatl Ta&es Loading/unloading 675 101I 10.14 11.23 11.26 11s0 13.51 15.99 2167 3S.00 31.00 30.00 Stomgc 1.46 3 53 4 12 3 45 5.31 7 35 7.99 8.78 7.50 9.00 a.00 8000 Other 309 SlI 5.49 5.6 8.09 9.65 10.61 12.76 15.10 25.00 36.00 36.00 Marketing 0os 108 1.33 1.43 144 2.27 1.26 145 235 6.00 200 200 Toto Operatingtx tLa i 19s 211 21 .99 26O 131.07 33.36 3.97 4662 78.DO 700 600 Nct Sttat Loaduig/unloadng 218.29 306.2- 324.87 328.37 339.66 3s.34 407,41 482.03 653.34 1,114.00 910.00 900.00 Storage 47.22 62.32 7n.53 60.99 93.94 13013 141.27 155.24 132.73 164.00 143.00 116.00 Other 8769 12507 144.85 184.84 247.85 287.26 34.01 459.94 43s.98 948.00 1,032.00 1,15400 Marketing 49.62 53 43 59.08 53.72 48.97 99.94 73.46 72.94 217.00 506.00 396.00 372.0o Total Net Sales 402.2 5J-09 NQLU G2M2 7P42 8n.s 970.15 1170.1 1442.0Q 2.732.00 249o 2.542.0 tapsatin Cosls Loacing/unloading 83.71 998- 121.29 135.37 173.17 223.44 260,74 34768 483.92 38100 523.00 52200 Storage tll 1 1202 16.14 1.51 20.99 25.32 30.50 43.38 56.03 53.00 4900 50.00 Other 31.31 48- 62.15 81.92 12561 168.63 229.63 317.86 20364 'l5.00 682.00 -46.00 Marketing .1267 15 oO S190 4827 4340 90.30 7354 72.49 214.32 474.00 356.00 336.00 rotal Operatxng Costa !s so L 251A8 284.07 hL7 517.69 594.4 -81.40 1.037.01 1.625 1610.00 1 6540 Opcralane Profit Lodingiwuldoading 13458 20640 20358 193.00 166.49 13004 14667 13435 1o942 '33.00 39600 37800 Stonge 36 11 <0 30 56.41 42.48 7.s9 104.81 110 78 III 83 6 70 199.00 94.00 66.00 Other 5630 8020 8270 102.92 122.24 118.63 1I8.37 14209 15534 233.00 350.00 408.00 Marketing 6 s - S3 IS 5i 5 557 164 (0.08) 0 45 2 68 32.00 o W00 oo00 rot Opernting Profit 2Ian,2 314- 349.87 243ss 36725 2U= 375 74 3ss.74 J04.14 L07,I ssooo 8m.o Surcharges 000 0 0.00 0.00 0.24 0 43 0.54 0 73 39.75 762.00 03800 080.00 NonopeatingIncome 056 0.51 0.60 0.53 1.17 000 000 000 00 13.00 1500 Nonoper nngExpenes 14.99 - 94 2355 32.03 38.33 5461 65.24 '80O 93.65 90.00 4900 29.00 OtherlncomeIexpendzture) 000 OJ1 126 13.24) (9.27) (5.71) 4.89 5.2 767 73.00 121.00 210.00 Profit BeforeTUx i 2m2 3'9 2- LM 32ao9 Zjjfl 293.54 Lm 3L449 M41 lug 307.00 20Q4, IncomeT ax 120.77 18o038 513 31.55 5.35 53155 S1.55 5155 5155 33.00 35.00 35.00 AdjusbnentTaxes 34.90 81 9g 0.00 0.00 0.00 0.00 0.00 000 000 0.00 000 0.00 OtherPaytnentsloState 21.00 21100 21.00 21.00 21.00 21.00 21.00 2I.00 2100 0.00 0.00 0.00 TaLxcredittoState 0.00 000 0.00 0.00 0.00 0.00 000 0.00 000 76.00 130.00 130.00 Nct Profit aftcr Taxcx 22.21 JJ 60 2"A 2LAW 247.37 222SI 24230 2AL29 Z20s 22200 J200 3W90 Rad ProfitBeforeTaxes (A) 219.59 32-9' 328.09 307.18 319.92 295.54 31485 314.49 27841 333.00 307.00 20400 Average Net Fixed Assts (B) 703.62 '-062 826.16 902.34 993.91 1,150.81 1,533.02 2,097.31 2,415.36 2,348.58 2,440.70 2,85719 Retumn n ANFA (A/B)(%) 31.0 43 0 40.0 340 32.0 26.0 21.0 15.0 12.0 14.0 13.0 7.0 Operting Ratio 41 9 3- 0 41.8 45.2 49.7 59.3 61.3 66.8 72.0 39.5 64.7 65.1 ProfitMargmnonSaks 52.9 s-s 52.7 47.3 42.3 32.7 31.4 26.0 18.7 11.9 12.0 78 -34 - ANNEX I Table S1.2: Balance Sheet (December 31, Y milion) 1934 1965 19t6 1917 1988 1969 1990 1991 1992 1993 1994 1995 -_) Aua Fd - At cst 9e667 1.064.93 1,132.06 1,27.110 1,379.99 1,14 2.24 2)43.67 3,18L77 3,0U20 3.4 4,13P1 1 _:_d s 25627 M12 22.5 31461 35.37 3W.14 439.0 531O 73.62 71. m.3 I1,10 Not And wm0 9 t ti VIA 2_l! Li 241 M Law11 Lwudby 29.47 43.0 WAS 57.4 70.65 9556 107.93 117.05 16403 31&92 6 6640 R_amva 34.27 30.79 43.1 100.41 134. 31.27 n239 261.79 309.03 66.7 IO. eo Cumb 127*2 130.11 131.43 43.4 150.44 206.07 13244 261.31 381.22 02.4 773 7100 Subt-W 1ELM U= S A91 21172 32L45 30Z 332l 40 9.2 2.13L77 24A Spof31.d_aU/J 57.20 77.72 3".30 36A11 402.90 273.7 2651 319.34 7M06 2,30O00 2 . 3UN Totl Ama 9"77.16 13104.27 3.33.03 3632.3 1761.19 2x.097 2)3.63 3.370.26 4241.47 6.21&.7 7,423.74 ,4O Uiabd. A Eqity Sl 6i_-BqLy 721.23 77.136 7.72 s.A 914.70 1.33.31 1,446.40 2,011.24 3,93 39326 404129 4,413A _formi Am, fo pt daydPuw 0.00 0.00 0.00 30.74 79.95 35.76 103.01 1243 I2 0.00 0.30 0. Lrloom. 7.17 34.67 63.76 84.77 30.03 24Uq 43.39 576.19 99.04 926.17 3,343.17 3I037. of w Fuip IBRD 7.17 34.67 63.76 64.77 106.03 4UG 35.73 2539 129.15 4163 437. 62a odm O0 0.00 0.00 0.0 0.e0 379 20.0 0 too .33 0.00 0J0 A hS O.W W000 000 0.00 000 000 3966 311.36 S33.3 i34 S.4 90L17 1321710 cwri has. 303.22 134.63 117.50 219.4 261.1 357.10 230.09 379.4 57.35 3,34232 2041 2,1360 s qA lnin 147.54 176.3 332.05 447.73 397.40 439. 397.92 4713 40240 0.00 0.30 0n Tota LiL & EqUity 9776 104.27 3,359.03 3,632.3 1.761.19 2039.97 2,613.61 33.26 4241.47 623175 7.42174 I456. Doht.Cal (%) 1.0 4.3 7.4 6.3 9.1 17.5 22.0 21.2 32.7 19.2 24.9 29.1 ClmTbeRhao 1.9 1.9 1.7 1.4 1.3 3.1 2.4 3.6 1.6 1.2 3.0 1.1 Cab to CW Imt Liabiy RaWo 1.26 1.21 1.02 0.65 0.58 1.31 0.66 1.47 0.66 0.52 0.38 0.37 Com so CIma Ameb Rai 66.7 65.1 59.5 47.6 44.8 42.7 28.1 41.1 36.2 42.3 36.4 33.2 (Dip) - 79.7 107.1 125.3 110.4 113.5 141.3 133.1 139.1 124.2 192.3 240.2 1I: Abo mibmbid brq41M il agmu owaudm in paia, uSwwbh n d . a - 35 - ANNEX I Table Sl.3: Sources and Applications of Funds (December 31, Y million) 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 (E_uae) Sow- Na profit 22.92 44.60 255.34 234.63 247.37 222.99 2430 241.94 203.S6 222.00 142.00 39.00 Dqpreciabn 12.60 13.85 20.46 22.03 42.76 31.77 50.66 98.30 221.52 152.00 165.00 172.42 State contnbuton 72.33 56.93 (0.44) 0.00 0.00 0.00 0.00 0.00 0.00 76.00 130. 130.00 Borwr Forn -IBRD 23.49 7.60 949 13.36 5.38 30.00 8.69 208.17 15.00 0.00 353.00 202.00 -Odbens 000 000 OIl 64.79 9.23 0.00 0.00 000 000 70.00 78,00 41.00 Local 0.00 St3 30.00 85.00 9S.10 000 000 000 000 331.00 272.00 35.00 oethml_ 000 0.00 000 0.00 0.00 42.20 0.00 000 000 000 0.00 0.00 Total S3L36 243 31516 419.8 40111 3266 3SI.6 5.1 443 Ui 1.145.00 619.2 AppMAon Capitale dpb 86.33 9828 4711 147.74 128.75 29.90 352.14 355.00 383.76 900.49 868.93 448.91 Net Payments to Stae (113.08) 61 48 3.67 109.85 0.00 0.00 0 00 0.00 0.00 0.00 000 0.00 SpecWl fim,d ecprAuixre 130.W 35.85 220.68 183.98 212.09 36.80 41.80 41.73 31.55 0.00 0.00 0.00 Loan repayment Forn - IBRD 0.00 0.00 0.00 0.00 7.00 6.52 0.U4 0.4 15.67 27.00 39.00 19.00 -OIler 0 00 000 0.00 24.27 55.26 0.00 0.00 0.00 0 00 7.00 29.00 23.00 Local 0.00 0.00 84 6.02 70g 2.50 0.00 0.00 0.00 96.00 413.00 6.00 Chanpw/caprial (1971) (2.54) (17.45) (4.11) (14.30) 195.61 40.30 38.97 (103.51) (490.31) (289.22) 118.U4 TotalAppbcationr 8354 193.07 262.S5 467.75 395.8S 271.33 433.28 436.54 323.47 540.18 1,060.71 61575 Nct FwL FlA 47J2 UL2 SUI (479 6 _ (on3 lILt! fl6li 312S2 an2 32j Opntirg Balance 80.00 127.82 139 11 191,42 143.48 150.44 206.07 152.44 264.31 381.22 692.04 776.33 Cloamg Baance 12782 139.11 191.42 143.48 150.44 206.07 152.44 264.31 381.22 692.04 776.33 780.00 D/S Cowr - - 31 2 8.5 4.2 28.2 348 3 405.0 27.3 2.9 06 4 4 / 1. Habor due an other morna - 36 - ANNEX2 ANNEX 2: ECONOMIC ANALYSIS A. The Port and Traffic 1. Shanghai port is the most important port in China and one of the largest in the world. It is located on the Huangpu River, about 90 km upstream of its confluence with the Yangtze River and close to the East China Sea. In 1994, the port authority handled 98.9 million tons of cargo or about 25 percent less than the SAR forecast of 132.3 million ton. The cargo handled by the project berths, in 1994, however, was quite similar to the SAR's projection, 82.10 million tons and 89.25 million tons, respectively (only about 8.0 percent difference). In addition, the cargo handled by the project berths, in 1986, constituted 65.7 percent of total port traffic. This ratio increased to 83.0 percent in 1994. 2. The average annual traffic growth rate at the project berths during 1986-94 was much faster than overall growth at the port (3.1 percent vs 0.2 percent). Total SPA traffic and that for the project berths, shown in Table S2.1, are summarized as follows. Traffic Handled by the Port (million ton) 1986 1990 1994 1995 2000 1986-94 --------------(Actual)---------- (Est.) (Fore,) Ave. p.a. ICR; Total Port Traffic: (1) 97.7 96.4 98.9 95.0 140.5 0.2% Of which: General cargoL/ 18.2 25.1 28.6 26.2 40.1 5.8% Container 2.0 4.5 10.6 11.7 22.3 23.0% Coal 37.8 47.1 38.9 33.5 53.8 0.4% Grain 6.2 5.3 4.0 6.2 5.8 -5.3% Subtotal (2) 6412 82 0 81 7 122.0 3A% % Share of total port (2)/((1) 65.7% 85.0% 83.0% 81.7% 86.8% -- SAL Total PortTraffic: (1) 97.7 113.2 132.3 137.6 164.8 3.9% Of which: General cargo La 18.2 19.0 21.2 21.7 25.3 1.9% Container 2.0 3.3 4.3 4.7 6.6 10.0% Coal 37.8 49.1 57.9 60.4 75.4 5.5% Grain 6.2 5.6 5.8 5.9 6.4 -0.8% Subtotal (2) b42 L B9. 2X2 1i32 7 42% % Share of Total port (2)/((1) 65.7% 68.0% 67.4% 67.3% 69.0% -- La Including timber traffic. &k All figures are rounded. - 37 - ANNEX2 3. The economic recession in early 1990s struck this area severely, and port traffic has stagnated ever since. However, based on the area's economic activities (the special economic zone is adjacent to the port) and the long-term development plans (the State has decided to implement the Pudong Comprehensive Economic Development Plan and the proposed deepening of the approach channel at the mouth of Yangtze River for larger ships is in progress), the growth of port traffic for the next two and a half decades (1995-2020) is estimated to be approximately 2.9 percent per year. B. Ship Time Analysis 4. General Cargo Carriers (for break bulk cargoes): Comparing 1990 (without the project) to 1994 (with the project), each general cargo carrier spent an average of 3.7 days and 2.8 days, respectively, in the port, of which the ship waiting time in the port (nonproductive time) decreased from 1.87 days to 1.37 days. During the same period, the average working time per ship (unit productive time at berth) also decreased from 1.5 days to 1.1 days, while the average shipment per vessel increased from 12,000 tons/ship to 15,000 tons/ship due to improved handling procedures. 5. Container Carriers: Despite the increase in container traffic by an average of 24.1 percent per year (in tonnage) from 1990 to 1994, the average total ship days spent in port per ship decreased from 1.35 days to 0.62 days. The average productive time needed to unload per ship decreased from 0.35 days to 0.28 days. The new equipment not only improved the efficiency but also maximized the availability of the equipment. The nonproductive time (due to the port), for example, decreased from 0.24 days per ship to 0.06 days per ship, while total number of container vessels calling at the port increased 2.7 times. Thus, without the project, the added traffic demand would have lengthened the ship waiting time (Table S2.2). 6. Coal Ships: Coal traffic is the biggest single item handled at SPA. In 1994, it constituted about 40 percent of the port's total freight traffic. Any slight improvement in coal handling will mean a large saving for the cargo and ship owners. In the last four years (1990- 94), all the indicators showed that the handling of coal traffic improved, such as productive time at berth (from 0.46 days to 0.38 days), nonproductive time due to the port (from 0.07 days to 0.02 days) as well as the total ship port days (from 0.73 days to 0.60 days). 7. Grain Ships: Ship time in port for grain ships deteriorated since 1990 due to the lack of adequate facilities to handle the traffic. The situation will not improve until 1996, the first year the new grain terminal will operate. Currently, the average grain ship stay in port is 3.87 days. It is expected that it will be reduced to under two days after the opening of the new grain facilities. - 38 - ANNEX2 C. Berth Operations 8. Operating data for general cargo, container coal and grain berths at the port also differ somewhat from the SAR estimates. Detailed operating data used for the economic revaluation of each project berth are shown in Table S2.3, and are highlighted as follows: - 39 - ANNEX2 Major Operating Data Comparison SAR ICR Percentage 1288 1995 1995 changed prices prices prices 1. Berth numbers-without project: General cargo 29 29 0% Container 4 3 0% Coal 10 10 0% Grain 2 2 0% Timber 4 0 -- 2. Berth numbers-new project: General cargo 12 11 -8.3% Container 1 3 +300% Coal 2 2 0% Grain 2 2 0% Timber I 0 -- 3. Maximum annual throughput per new berth (million ton): General cargo 0.59 0.59 0% Container ( '000 teu) 65.2 76.8 +18% Coal 4.34 4.34 0% Grain 7.44 7.44 0% 4. Average ship size- new berths ('000 dwt): General cargo 15 15 0% Container 13 13 0% Coal 21 21 0% Grain 20 20 0% 5. Average shipment size-new berths ('000 dwt): General cargo 7.5 15.0 +100% Container (teu) 700 700 0% Coal 21.0 21.0 0% Grain 20.0 20.0 0% 6. Cargo value ('000 Y/ton): General cargo 1.80 3.45 1.80 -48% Container ('000 Y/teu) 20.0 38.3 20.0 -48% Coal 0.11 0.21 0.11 -48% Grain 0.40 0.77 0.40 -48% 7. Average daily ship cost in port for the proposed berths ('000 US$/day) General cargo 13.32 25.51 47.94 +88% Container 37.74 72.28 82.65 +14% Coal 30.71 58.81 54.29 -0.8% Grain 16.28 31.18 52.90 +70% 8. Cargo handling (Yuan/ton): General cargo 3.20 6.13 26.0 +324% Container ('Y/teu) 140 268.1 400 +49% Coal 1.30 2.49 3.0 +33% Grain 2.50 4.79 18.0 +176% -40 - ANNEX2 D. Economic Costs and Benefits Economic Costs 9. All costs associated with the facilities planned under the project were considered in the economic reevaluation. All inputs and outputs were evaluated in constant December 1995 economic prices (Table S2.4). Financial costs were converted to economic costs by shadow pricing each berth's input categories. Conversion factors for each input category were based on estimates determined in completed Bank studies. 10. The overall conversion factor is 0.93, of which both general cargo and container berths are 0.91; coal 0.99 and grain 0.96. The factors derived for the various cost items were applied to annual project expenditures to obtain the stream of project economic costs (Table S2.5). 11. In the ICR, the effect of shadow pricing project costs was that economic costs were 27.2 percent higher than the financial costs, and total economic costs were 16.9 percent higher than the SAR estimate at constant December 1995 prices. The comparisons are summarized as follows: Project Economic Cost Comparison (million Yuan) General Coal Grain Container cargo la Total SAR: (economic, constant): 1988 123.0 117.4 81.2 671.0 992.6 1995 (A) 193.5 142.6 115.7 981.1 1,432.8 ICR: Financial (current) 95.3 372.2 254.4 595.9 1,317.8 Economic (1995 constant) (B) 149.4 373.8 348.9 803.4 1,675.6 ICR/SAR (economic, 1995 constant) (B)/(A) in % -22.8 162.2 201.5 -18.1 16.9 La Including timber berth. Note: All figures are rounded. -41- ANNEX2 Economic Benefits 12. The economic analysis focused on the benefits derived from relieving port congestion. Details of the traffic forecast are shown in Table S2. 1. The project will yield quantifiable benefits in the form of savings in cargo handling costs, ship time (both waiting time and operating time), and cargo time (Table S2.6). 13. Savings in Cargo Handling Costs. Savings are relatively small and are expected to accrue from the direct costs of cargo handling in the new facilities as compared with the present ones. Without the project, the only way to handle traffic in excess of berth capacity would be through "lightening," but it is estimated that these costs would be three to four times greater than normal handling costs. Detailed estimates of handling cost savings are shown in Table S2.7. Lightening was assumed for cargo tonnage in excess of berth capacity at 95 percent occupancy, at a cost three times that of normal handling. Substantial savings in handling costs are expected after existing berths are renovated and new berths are built. Savings in handling costs were converted to economic benefits by shadow pricing the main cost components of normal handling and lightening. Conversion factors of 1.05 for berth handling and 1.1 for lightening are used; these factors were estimated in a previous Bank study. 14. Savings in Ship Time. These include reductions in ship time waiting for berths and working at berths due to improved cargo handling. Estimates of savings in ship waiting time due to the project are shown in Table S2.8. Ship costs used for the economic evaluation were at the low end of the model developed by the Bank. The annualized ship resale value, plus operating costs, were used to calculate project benefits. The annual resale value of ships was assumed to reflect the present state of the shipping industry and gives a slightly lower return than the annualized replacement value. 15. Savings in Cargo Time. Savings in ship cargo time also apply to the interest saved on the value of the cargo. For domestic cargo, the marginal source of working capital would be loans from the National Development Bank of China at an average of 12 percent interest. For foreign cargo, the higher foreign exchange working capital needed would require more foreign borrowing, and it is assumed this would be at China's marginal cost of capital (approximately 12 percent). Thus, interest savings were calculated assuming an average annual rate of 12.0 percent. 16. Total project benefits for the items discussed above are presented by year in Table S2.8. The major project benefit would be savings in ship time. These would accrue first to ship owners and could be passed on to cargo owners. Only coal ships are completely owned by the Chinese. As for other cargoes, except for container handling (which are 50 percent foreign-owned), the vast majority of ships calling at the port are either Chinese-owned (COSCO) or Chinese-operated; it is expected that 90 percent of the project benefits would also accrue to China directly. -42 - ANNEX2 E. Overall Economic Reevaluation and Sensitivity Analysis 17. Table S2.9 sets out the Reevaluated Economic Internal Rate of Return (REIRR), Net Present Value (NPV) and sensitivity calculations for the entire project. The overall REIRR is 22.6 percent. Compared with the SAR, the sensitivity of the project to variations in costs and benefits is summarized as follows: General Coal Grain Container cargo Total Best estimate of rate of return (%): ICR 11.0 17.2 25.2 24.3 22.6 SAR 21.3 30.0 14.6 15.4 18.2 15% increase in costs and best estimate of benefits (%): ICR 9.6 14.7 22.8 21.6 20.1 SAR 17.0 26.7 12.0 13.5 15.5 15% decrease in benefits and best estimate of costs (%): ICR 9.4 14.3 22.5 21.2 19.7 SAR 16.3 26.2 11.6 13.2 15.0 15% increase in costs and 15% decrease in benefits (%): ICR 8.0 12.0 20.2 18.6 17.3 SAR 12.0 23.1 9.1 11.3 12.4 Si Table S 2.1 a- Port Trafric (1990-1994) and Forecast (to 2020) ('000 ton) Ad..dM- I. 060 TWAj 06 Ch T.Oj I. out ToOd 06 06 Tod In oat ToOd 06 00 T . (3A T.W. I. (3 T-l 13 00 T.0d C-dF--w ~~142 10 152 32 5 21 0 6 61 0 5 5 4 2 6 0 100 100 0 175 175 ISO3 ISo 01II 105 15~~~~~~~ ~~SA.41 C16.3 4.4.W0 1100 15.10 421.416 3214 1.1 46.311 9.3911"in, 4A.51 26416 11.05 5491 A10 Ik4.10 SS.468 5A1W 5131 115 S1.61 33: i1.279 50.A1 V448 l1.11 Sul$ Told flin0 I1.1? 01.M =U 11= SLAM 31.276 Lug10 40.317 20.6 1mM hum1 2L.M 12.32 am22 2210 Ikin 30 ALM0 12.0 am a.m LMi 1610 ALM inm am 5 3 0 14 5 3 27 23 7 32 59 9 6 41 4 47 s0 0 30 0 0 0 000000 3 2 3 7 9 1 6 I10 25 35 1 1 21 32 5 20 25 0 Told IL2 2.2 21 22 2 21 12 62A3 10 100 0 20 2 10 3 2 3 0 I I I II Irm000 F.-O ~ 3.729 44 3.773 4.7 19 58 0.777 3.71 54 3.001 4.172 93 4.665 4.431 120 4.551 4.000 550 4,15SO 4.000 141 4.141 4.000 141 4.141 4.022 I%6 4.970 9V4 3.761 4,715 1.493 4.23 6.16 5.56 4.053 5.619 1,666 4,66. 6.331 2.125 4.012 7.337 2.000 4.350 7,650 2.000 4.559 5.359 2.30 4.559 7.359 3.70 5.044 0.422 TOld kill~~~~~" Lin 010 kil UK00 lug02 111 3. LM k11 4.1 10.91 Am kIl Iul UN km iLm km 4.23 12m km L.20 u.100 Li"0 2.00 F..* 1~~~. 796 a90 2.606 1.023 964 1.907 2.226 435 2.66 11.07 190 12.010 4.542 395 4.937 1.600 1.00 3.500 3.067 I.339 4.606 3.03 1.769 3.657 4.000 1.05 6405 5.675 609 2.364 1.0~69 79 2.62 2.351 1.3 .0 .2 .7 .0 .714 1.354 35.60 2.100 LUG0 3.100 4.033 all 4.064 5.112 931 6.043 6.390 045 7.355 TOD.- 6742 1.91 2,310 am4.4 4. .3271 .430 kil4 23.226 4.475 64.701 .10 2.4 .0 .0 m 060 210 120 0.1 m 210 1120 1120 2m 1. Fl.9p 5 45 42 5 7 90 57 7 44 55 6 42 40 6 35 41 a 90 50 0 109 109 a 104 104 0 317 317 Do-"ob 7.373 452 1.235 0.271 279 3.150 10.119 362 10.312 55,024 102 11.126 10.506 33 10.539 9.300 250 3.550 12.250 541 12.791 55,406 956 16.316 16.100 5.03 17.605 Fo-p 9 233 235 12 63M 650 9 204 204 22 3 27 a 2 2 0 54 50 9 300 300 I 450 450 0 000 600 I7o 123 54 142 244 120 366 25 5a 26 344 03 97 Its 43 22 65 50 0 30 250 5 250 300 0 5300 400 5 400 TOld 11 02 22 1 20 1.01 a1u 22 200 1.1 La 12 42 a6 0! 10 .1 10 20 in 21 n i10 Zs i I" km F-W 1,~~~5597 5 1.602 1.531 IS 1-1 1.54 504 5 2 1026 5.055 543 1.956 5.506 14 1.200 900 0 906 2.275 5 2.271 3.1102 0 3,5U 4.509 0 4.599 D3600 570 1.104 1.354 177 1.125 1.360 203 1.094 1.11 265 1,194 5,455 505 779 960 550 350 Soo 379 1.350 1.729 532 5.8000 2,332 705 2.150 X2.05 F..w ~~~46 476 522 525 364 639 179 764 304 150 050 943 500 055 995 591 00 no 500 555 067 902 120 966 5,020 130 954 5,066 D..."0 045 374 1,215 1.027 595 1.622 1.5016 520 1.714 909 450 1.417 360 397 1.257 900 400 5,300 1.035 433 5.460 I.'0 450 5330O 5.570 466 5.656 ChO.k.1IMMIMUoo F-0 1~~~~.694 147 5.705 1.990 9 5 .00 I.660 4 592 924 o4il9 I.4 20 5.576 5.000 0 5.00 5.05 9 1,033 2.160 0 2.560 2.442 0 2.442 17,s0 67 5.54 5321 563 1.373 5.330 1 53 1.351 5.544 144 35IS4 990 225 1.4124 5.635 300 5.300 2.200 5553 5.54 1.055 360 5.506 5.940 400 1.650 2.036 F-W ~ ~ ~~0 5 5 0 0 0 0 0 0 5 0 3 3 5 00as 0 009 D)s"gS 5.496 707 2,203 15157 732 2.249 1.347 635 1.973 1.2651 500 1.149 1.000 393 1.430 5.506 400 1.4000 5,600 650' 2.250 I.~ 7060 2.600 2.30070 3006 Tod Lin 200 1.20 141Z 122 2.24 1 2 fil1 1.11 L.26 10 1.110 110 001 1.0 110 00 110 Li"0 k10 21 1 200 10 km 200 km 14.r. 31 Taible S 2.1 b: Port Traffic (1990-1994) and Forecast (to 2020) ('00 ton) 1WO 1991 109 amU 9094 lOO 200 2630 266 46 Et Tdd 46 0. T.dw 46 04 Italia in A Tdd 46 0.* T.44 Is 13 T.W 46 3 Taw4 la. 00 TOji 46 out4 T0 F..v X~~~2113 125 2.2,00 2.24 325 2.533 1.743 354 2.317 132 092 1.24 1.J4 373 1.733 to"0 34 2.050 2.064 46 2.134 2.257 14 2.13 2.332 30 Vol9 08.c 963~~~~~~~ 2.19I 3.103 3.141 2.42t 1.3911 1.445 2.445 3.443 2.634 3.05 2.0Z93 3.637 3. 246 2.2* Zi30 2.60o 4.106 1.334 2.312 5.666 1.443 2. 744 4.307 2.63 2.001 4.30 Tod & L2 2.24 Am0 2.21 4. 2.14 1.41 3.21 Lm 1.13 muZ 2.11 1.01 4 LM 2.0 4.13 La4 UK 2. 2.1 LW 4.30 4.2 2.2 2.1 9.4.4 3.54 3.931 7.494 4.527 4.3401 017 4.937 4.921 9.63 4.71tS 5.748 M 33 53.7906 7.241 13.631 4.74 6.96 15.470 30.396 MM03 27.531 17,M4 24.140 43.445 21.0166 31.447 33.427 MONK 1~~~.252 2.673 4.132 3.426 36041 4.467 l.33 2.940 4.461 3.4 2X146 3.403 097 3.942 2.042 I.3M 1.905 3,754 2.902 3.667 0.369 4.393 3.440 10.435 4.010 4.03 I2.67 T.W' 4.1 LW LU 11.43 2.6 L U 2324 MR4 LO MM~ 4 LWt AM. Lit 1.20 1132 LIZ 1*3j IL.3 11.3 SW .401 am.1 13. ILM SR1 22.23 26.2 AM T-F. 14.4910 5.7111 26.470 14.1306 .943 23191.3 6,34.31 7.4131 23.332 24.944 7.770 32.714 30.6330 9.116 26.320 17.3"0 12.06 29.NO 24.922 20.112 44.134 33.110 29.1626 42,9381 440496 13.54 74.440 D~~~~ ~45.931 346.925 7$.934 44.534 MASS3 75.M6 51.422 34.611 61.413 49.442 30.264 70927 44.6 23.1117 76.13 42.6013 24.606 64,004 63.196 33.160 96,346 71.922 37.160 109062 76.M0 40.497 11940 T6hd 4~~40.091 3SAD3 64143 04.74 J37.131 UW544 47.715 27.412 1647WA 74.407 31.634 112.441 61,711 23!L27 614,924 09.10,6 34.013 93,130 67.226 312.266 140.300 136064 46,06 372626 330,0 764166 3030 K.L !6:y: it1 41344 21.36434.54 441,330 22.402 42.762 42.493 21.773 644644 46.041 23.253 43.21 37.726 19.361 57.227 3MM0 I4.63 52.750 49.621 24.450 743773 52.517 2529 7T7727 57.274 2C4.40 W674 W 4.U 13ih a 3 13 21 22 43 33 32 47 54 34 313 40 24 72 30 0 30 0 0 6 0 6 6 6 6 0 1633 3.06 11.939 17.4611 3.742 12.66 6.06 3.03 14,934 36.43064.624 25.254 311534 6.209 10.1132 9.076 ISO94 39.970 1 1.934 386.29 34.34 24.301 26,149 52.730 31.039 33.628 64.137 ~i 2.6417 6.4 20JI94 33.317 9.440 22.713 34639 9.237 253274 364.63 9.927 25.944 14.499 7.313 21.022 34.030 6.23 22.250 21.463 30.201 31.644 27.342 1363.13 413.73 31.637 31.972 47.0609p Tod6 ig83 13 024 32.82 26.412 11.12 is.2 2262 12.3 44.1n39 4A4 14.251 11.22 26.82 12.01 41.423 9 4 2126 21.4 2.6 37.23 20L62 66.229 321 41.220 9110.30 4.42 4194 112.2276 9.3.4 3345 4.319 7.664 4.527 1.31 0,1313 4.937 5.4013 l0.426 4.7ft 4.432 33.237 3.796 7,647 1363.7 on57 9.000 13.570 335911 17.281 27.679 17.503 26.444 44.151 23.066 2304 94.214 D~. 2.352 0.33 3,1091 3.130 7.242 36.4 32.20 4.66 9.797 2.3314 4.I94 6.464 X2.26 4.647 6.945 3.454 64740 19.206 4.301 7.439 122.0 4.09 9.504 16.202 8.446 33.394 29.644 T.W4 3.21 LUZ4 14.123 2.UZ a11 3.14 13 MM1 3.611 2.W3 16.N 11.221 L.2 11.47 AM3 101 11A43 21.616 12.2 24.230 40.12 24.423 3.63 41.12 &AM2 42.710 14.1 C~.t P...k49. ('43 9-.4. 33% 49% 31% 41% 33% 57% 42% 62% 42% 73% 76Y% 71% 72%A 77% 75% 73% 7594 75% 699 W9% W0% 30% 3% 69% 69% WY. WV. 16% r 4% 3% 9% 4% 394 6% 4% 3% 164A 7% 04 3004 414 4% 39% 3% 39% 30% 13% 35% 20% 20% 5.27 7.062 12.356 6,950 24.575 23.334 15.039 722624 37.853 39273 22,124 47.391 L~F...w 2.3"0 2.123 4.60 2.75 2.321 5.37 3.66 3.33 6.423 3.442 4.30 7.945 4.147 6.046 10.367 4.923 0.750 23.676 3.478 23,623 22.303 14.004 22.17 33.521 17.564 25,645 43.429 0..4. 299o 254 453 234 276 526 239 266 525 233 274 329 222 272 394 .. . - . .- .. - - - kb* ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~.2 6.372 k00 14.020 20.751 27.490 28.241 12.947 27.377 43,424 23.1226 33.749 36.77 l- 21 Lin2 4.43 2.11 1.01 4.146 1. LW 2.1 1.42 4.12 2.41 424 Lau1 16.31 121 LIN 14.014 16.171 14.2 14.20 14.31 MA 1133 2231 1-111 212414 221 b. *1.131A 46.4k 66O 16.090 11.440 21.2901 17.401 32.23 29.514 23,676 11,29 33.424 54.772 11.974 42746 21.634 0.,390 31.6444 I4IC 12,406 36342 26,921 132.15 42,924 24.139 26,443 38,M6 45,192 22753 44.647 L.. JUN1 11.448 301 174041 12101 29.MM 21-671 113154 A 302 26722 11974 42.741 11.43 1.23 14 17279 12A07 29 144 21-440 41.253 42=2 37.454 16.36 IMSO 41.403 21.41 4421 AN 43..44 Um 30433396A D-95~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~9 S3 Table S 2.1 c: Traffic Handled by The Port ('000 tons) 1985 1990 1992 1993 1994 1995 1996 2000 2005 2010 2015 Est. Dry Bulks: Coal 34,327 47,056 46,817 44,333 38,921 33,500 36,829 53,800 54,987 56,200 57,583 Grain (Foreign in) 1,177 2,115 2,208 832 1,160 2,000 2,017 2,086 2,170 2,257 2,391 Others 11,663 14,377 15,443 16,156 17,146 17,250 17,640 18,385 18,817 19,260 20,667 Subtotal 47.167 63.4 64.468 612 57227 52f7S0 56.486 74.271 75.974 77,717 80.641 Est. Liquid9ulk 13 13 67 100 72 30 _ 0 0 0 _ EsL coetaimerized cwo (Loaded) LM A" 716 8 10.l5 11.678 13.291 22303 28.067 35321 39.166 Eat. General cago: Grain 4,374 5,34 5,785 3,617 4,016 6,150 6,078 5,800 6,140 6,500 6,793 Ofwbhic: Foreign in 1,177 2,115 2,208 832 1,160 2,000 2,017 2,086 2,170 2,257 2,391 OtIebm 3,197 3,228 3,577 2,785 2,856 4,150 4,061 3,714 3,970 4,243 4,402 Break baul 35,523 25,170 29,497 39,961 28,188 26,392 28,783 40,212 46,930 54,739 59,322 Ofrwici: Larg berth operatio 12,801 24,987 29,313 39,497 28,003 26,192 28,583 40,012 46,730 54,539 59,122 Small erth pait I 5,872 * 0 * 0 0 0 0 0 0 0 M-xdtrr operation L2 16,850 183 134 464 185 200 200 200 200 200 200 Subotal 38.720 28.39 ;304 &2L 31L44 30,542 32,44 43.926 ,,900l OMf37 Total Traffic H_dled by SPA 87,744 96,414 104,765 112,641 98,924 9S,000 102,621 140,500 154,941 172,020 183,531 Total cotaier traffc (0 teN) 0 4*0 fu 934.0 1.9.0 101.4 1.594. 2.676.4 . 4238.S 4.699.9 Nuw 1. Traffic h(-did at a.w burb (wae SW d vek)L 2. Estited band . avalbe btbk capacity. S.uwee SAagh Prt Authority d Bk dstaff Dec-95 - 46 - S4 ANNEX 2 Table S2.2: Ship Time Analysis (Actual Ships Days Per Ship) Coal Ships General Cargo Ships Container Ships 1990 1994 1995 1990 1993 1994 1995 1990 1994 1995 (est.) (est.) (etL) 1. Productive time at berth 0.46 038 0.38 1.50 1.49 1.14 1.14 0.35 0.28 0.28 2. Nonproductive time a. Due to port 0.07 0.02 0.02 0.21 0.36 0.16 0.16 0.24 0.06 0.06 b. Due to ship 0.12 0.10 0.10 0.25 0.26 0.26 0.26 0.10 0.10 0.10 c. Due to cargo owner 0.01 0.00 0.00 1.02 1.40 0.66 0.66 0.49 0.08 0.08 d Others 0.01 0.01 0.01 0.39 0.27 0.29 0.29 0.15 0.08 0.08 Total 0.21 0.13 0.13 1.87 2.29 1.37 1.37 0.98 0.32 0.32 3. Weather Stoppage 0.06 0.09 0.09 0.31 0.36 0.27 0.27 0.02 0.02 0.02 Total Average Port Days Per Ship 0.73 0.60 0.60 3.68 4.14 2.78 2.78 1.35 0.62 0.62 Total Number of Ships 2,535 1,906 1,537 7,570 9,520 8,348 6,954 1,027 2,732 3,284 Grain S_ps Total Port (SPA) 1990 1993 1994 1995 1990 1994 1995 (est.) (esLt) 1. Productive time at berth 1.76 3.63 2.41 2.41 0.63 0.50 0.50 2. Nonproductive time a. Due to port 0.61 3.14 0.38 0.38 0.11 0.07 0.07 b. Due to ship 0.22 0.10 0.06 0.06 0.19 0.15 0.15 c. Due to cargo owner 0.09 0.19 0.00 0.00 0.19 0.11 0.11 d Others 0.08 0.30 0.24 0.24 0.10 0.09 0.09 Total 1.00 3.73 0.68 0.68 0.59 0.42 0.42 3. Weather Stoppage 0.79 1.38 0.78 0.78 0.09 0.08 0.08 Total Average Port Days Per Ship 3.55 8.74 3.87 3.87 1.31 LO 1I00 Total Number of Ships 214 211 172 258 11,346 13,158 12,033 Sources: SPA ,3 -47 - Table S 2.3: Operational Data Used for Economic Evaluation arin bEeae&er Coal Brtm NOW Exing New hot Wh Codl Badhs Bertd Projel Pmet Bert Beath (numba) 2 2 10 9 2 i_1 Crane per bcrh (numba) 3 3 2.5 2-5 1.5 Av e cne poduct, iy pe hobc (tom) 200 480 365 390 560 Avewgeoe- v houraperday (3o ) 17 17 17 17 17 hrouput capadlyp bertht (to/day) 10,200 24,410 15,513 16,575 14.=80 Bath opertn day per ye (day.) 320 320 320 320 320 Macdmen anual capecity per baeth OO tonrs) 3,101 7,442 4,716 5.039 4,341 Ship ulva (scarduladAmscheduled) Unscheduled Unscheded Unscheduled Uw hdud Avaep ship sz (OWl) 20,000 20,000 10,000 10,000 21.000 Aver ship s (tn) 20,000 20,000 10,000 10,000 21.000 CPo vale (Yuan/t) 400 400 110 110 110 Avagedsily ship cost in pot (Yuan/day) 50,464 50,464 39,176 39.176 31,792 Udosdgnloadnco t(Yuen/ton)/4 1.0 18.0 3.3 3.3 3.3 E yt Ebistng New Mixed Brak Mixed Use Bulk Use Bath Barths 0e8 Seet (number) 1 14 11 Crn per bath (number) 5 3 2 Aveae woader pods y per hou (tons) 35 22 57 Avep ewoe-ig hoe per day (hours) 17 17 17 lhruhput c-p-iypperbash( (Wus/day) 2,75 1,122 1,938 Berth opraW days per yea (days) 320 320 320 Maxnum anuai capaity per beth (000 tons) 904 341 5S9 Ship rsvas (sheoduladturschaduled) Unscheduled Urscheduled Unscduled Avege ship (DW) 12,000 12,000 15,000 Ava shipent (ton) 7.500 7.500 7.300 Cszgovahie (Yuantton) LOW00 1,100 1.,00 Avee daily p cost in poet (Yuan/day) 41,749 41,749 45.733 Unloding4oing oat (Yuan/t) /_4 26.0 26.0 26.0 Exitin New Containr Container Berths Bat Bat (number) 4 3 Ciwss par bath (number) 1.5 1.0 Avap a poductivity per hba (IEUs) /2 20 30 Avwgp wosyt h1 por day Q(otu) I6 16 Thrugu ca ty pe beet (TUs/dsy) 489 480 Beth operatnig days pe yea (days) 320 320 Mwnum annual capacty per bath t000 TEUs) 78.2 76.3 Sd erels (cdh lad/macdeh 8hld Sheuld Avege ship sue (DWI) 1,000 /3 1,000 t_3 Avep shnnt sze (OIUJ) 700 700 Csro vahle (Yuan/TEU 20,000 20,000 Avea dily ship cot in port (Yusn'day) 78,050 78,850 Unloading/loading cost (Yuw -U) / 400 400 Noten torei daiy berth apenty- nu_ per beatx av ag scw prdsetype u bor x aveg wddg hbo pat das. i) )tteortl annual berth peapty - the-dt daily bath eteetyx beet operag day pe year OM) mnum awisialpe ascity per bertlh - theoretical anual beth eadly x mLtm berth t#hlm. I_i. Excleu one additiona al bete, which is for bugo loading bauically. / 2. OneTEU - 10.00 tons /i3. Eqeenalent to 13.400 dwt per hip /4. Figurea in the tabs are the coat for nofnnal berth haig. If cargo traic execeds 95% beel occupancy rn4 sdditionl rap wI be handled by lightermg at roughly dtree tiem the costs for nofnnl berth htig. Soume: Shahi Poet Autority and Bank sIt Dec-95 52 Table S2.4: ECONOMIC PROJECT COST (Y milion) 1966/_1 1967 1988 1989 1990 1991 1992 1993 1994 1995 /I2 Total A. Fnancil (Current): 1. Coal Berto 5.30 15.52 45.04 10.36 1.89 3.38 13.80 0.00 0.00 0.00 95.29 1 2. Contaier BertIm 13.53 29.78 41.47 60.05 70.29 21.10 18.19 0.00 0.00 0.00 254.41 3. Geral Cargo Berths 10.31 49.95 92.70 13&05 164.39 74.60 6590 0.00 0.00 0.00 595.90 a 4. Grain Berdh 0.04 0.00 0.31 082 1.14 18.71 43.3C 62.02 113.87 131.94 372.15 1 Total 29.18 95.25 179.52 209.28 237.71 117.79 141.19 62.02 113.87 131.94 1,317.75 B. E _onomc (Contant, Deember 1995 prices): 1. Coal Berths 10.43 28.95 74.68 15.77 2.04 3.57 13.99 0.00 0.00 0.00 149.43 2. Container Berth 24.42 50.93 63.05 83.83 83.94 25.79 16.91 0.00 0.00 0.00 348.87 3. General Cargo Berths 18.63 85.53 141.09 192.94 207.59 91.30 66.33 0.00 0.00 0.00 803.41 4. Grain Berths 0.08 0.00 0.50 1.21 1.59 24.77 53.96 68.04 109.77 113.92 373.84 Total 53.56 165.41 279.32 293.75 295.16 145.43 151.19 68.04 109.77 113.92 1,675.55 /L. iude ii expenditur prior to IU6. /_2. Beat estmt Table S 2.5: SHADOW PRICE CONVERSION FACTOR (Yuan million) Cel Camilme CGmul Cao Gro. C.wr -_1.1 F6id.l inc Pmedal EremeA Fladal Etm FWImdl E u luta Loc1l Foeip Ttl TOal Loal Fo TOWl TOal Loal Ferip Totl TW Loa Frei TOtal TOl I_.~~~~~~66 tand OLM6.6 a"4 0*4 6a Om1.65 0.51.6 0* ism6 3.5 33.2 S." 33.22 26.5 6* 6*0 too 6* tuhue Om .764 Om 6.76 6.41 2.9 6* 2.69 L. 4.15 6*. 4.15 2.24 L3 kw 3." I.6i S_a am 6.76 Om 6.76 6.61 2. 6* 2. 1.67 4.15 6* 4.15 3.32 3.66 IL 3.66 2.45 Su rvIso 2* 6.6 6 GM O." 1.64 4 6* .64 Le 1.5 0* 1.56 3.12 L7 .* L78 3.56 Sho La 4.12 6* 4.12 4.12 16.45 .6 164S 16.46 2.ss S." 23ss 28ss 67.s4 a* 67.54 67541 Th_bw LO am3 O. 636 636 1.92 6.66 1.92 L92 2.34 *.6e 2.34 2.34 4.51 6.66 4.51 4.51 X C_mmi LW 3.66 6. 3.66 3.66 11.28 6.66 11.28 11.2 16.17 0.66 16.17 18.17 22.6 6.6 22.5 22.56 son _* 3.8 6.66 3. 3.65 O."44 6.66 IS.4 83 295 e .66 26.95 26.76 12.74 6.66 1L74 16.19 It, am 3.81 a6 3.81 3.65 O."44 6.66 16.4 35 2595 6.66 266 20.76 1274 6.66 12.74 16.19 UNMOO LW 3.8 an 3.3 3.n1 10.44 6.6 Io."4 1.44 259 6.66 26.96 2536 32.74 6.66 12.74 12.74 Odom Om 3.81 to 3.61 3.6S 164 6.6 14 3.s 295. a6 265 26.76 IL74 to6 12.74 16.19 Fn* DOW I3J 6.12 6.66 6.62 a.62 1.25 6.66 12 1.2S 2.0 e 0.6 2.86 2.86 1.27 6.66 1.27 1.27 C _~Nw Lee *A 6.6 6.62 6.62 1.25 .6 1.25 .2S 2.80 6.66 2. 2* 1.27 6.66 1.27 1.27 Hmwy Om Lee 6.25 6.6 6.250s 2.69 6 2L6g 2.69 3.63 6.66 3.3 3A3; 2.56 6.66 2. 2.5 oam LW 0.34 S." 34 34 6.66 6 6.66 to 6. 6.6 6.16 L.a 1.27 6.6 1.27 1.27 Wafer am L3 6.66 3.63 6.62 1.U4 to6 1.34 L47 7.27 a.66 7.27 S62 .25 6.6 1.26 1.66 E3wk* 2* 64 6.S 6.34 1S.6 6.64 t.o 6.4 1.66 1S57 6.6 1s5.7 31.14 9.66 6.66 9.69 18.66 C _ew"iml am 7A3 6.6 7.62 6.16 20P 6.6 26.86 16.76 51.91 IL" SI-11 413 26.49 6. 2649 26.39 Medaln _qmnt LW 2566 19.67 4.15 44.15 34.66 46.1 7940 79.4 s64 764 333.2 133.A2 34.2 11730 131. 13LS1 o04. am IL2 6.66 31. 9.03 69.21 6.66 66.21 47.37 lot." S." Ill." 34S.34 4514 6.66 45.4 34.11 TOWl 7622 39.7 9.2 K93 26 45. 24.41 236.12 639.66 76.4 5696 SM91 2JS 11730 37L2S 3536 O..bmn h r S." 69 691 am Gr TOl a33 - NX - 50 - B) Tabk S 2.6 a: Caro Handlhng WIt6t And With Proposed Berhs (Coad B4lbs) 150 i,s i~m z,s w4 it"s 15 iee ls 2se 88us A.TRA,JICDSUIND(13N utj 34,327 471,5 46,11 44,33 3AI 38 363 UPS 4,7 AM 8700 I.Uarg(-t&u) 16 16 16 16 IS 0 16 1 16 16 16 1 2. TrjA (00N unow) 34,327 47.81 46,37 44,333 3.D2M 33M3 36,3 53,009 06.97 06,300 37,33
Groupe de la Banque mondiale · Implementation Completion and Results Report
China - Ningbo and Shanghai Ports Project : Shanghai Port
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Implementation Completion and Results Report
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Banque mondiale