Morocco - Port of Casablanca and Mohammedia Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15712 PERFORMANCE AUDIT REPORT MOROCCO PORT OF CASABLANCA AND MOHAMMEDIA PROJECT (LOAN 2657-MOR) June 10, 1996 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Currency Equivalents Current Unit = Moroccan Dirham Exchange Rates Appraisal Year Average US$1 = Dh 10.4 Appraisal Year Average US$1 = Dh 8.6 Completion Year Average US$1 = Dh 9.5 Abbreviations DP Ports Directorate, MPW DPCM Casablanca-Mohammedia Ports Directorate, MPW ERR Economic Rate of Return ICB International Competitive Bidding LCB Local Competitive Bidding MOT Ministry of Transport MPW Ministry of Public Works ODEP Office d'Exploitation des Ports OED Operations Evaluation Department RAPC Regie d'Acconage du Port de Casablanca PCR Project Completion Report PAR Performance Audit Report SAR Staff Appraisal Report SIPOR Systeme d'Information Portuaire TRAINMAR UNCTAD Training Program for the Maritime Sector UNCTAD United Nations Conference for Trade and Development VTS Vessel Traffic System Fiscal Year: January I - December 31 FOR OFFICIAL USE ONLY The World Bank Washington, D.C. 20433 U.SA. Office of the Director-General Operations Evaluation June 10, 1996 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Performance Audit Report on Morocco Port of Casablanca and Mohammedia Project (Loan 2657-MOR) Attached is the Performance Audit Report (PAR) on the Morocco Port of Casablanca and Mohammedia project (Loan 2657-MOR, approved in FY 86), prepared by the Operations Evaluation Department (OED). The loan for US$22 million equivalent was approved on February 15, 1986, and closed on June 30, 1993, two years behind schedule. The project was the first to assist the port sector in Morocco. Its main objectives were to assist the Government in improving efficiency of port operations in Casablanca, the busiest port in the North Africa region, and in strengthening the Office d'Exploitations des Ports (ODEP), a newly-created public enterprise responsible for port operations in Morocco. The project comprised the rehabilitation of infrastructure, dredging, and provision of equipment for the port of Casablanca; provision of equipment and rehabilitation of the breakwater in the contiguous port of Mohammedia; technical assistance and training of ODEP personnel, as well as for the Directorate of the Port of Casablanca and Mohammedia (DPCM), the Government agency responsible for infrastructure in the two ports. While physical implementation suffered delays, and there were some changes in the components, the project was successfully implemented and the objectives were attained, mainly through the effective use of technical assistance and of studies. Major changes were introduced to ODEP's organization, a modern management information system was put in place, and a tariff study led to adjustments in the rates for port services. Technical assistance also helped improve the management of ship calls, cargo handling, and the control tower at Casablanca port. Training of ODEP and DPCM personnel was successfully carried out under a United Nations Conference for Trade and Development (UNCTAD) program. As a result of these efforts, the efficiency of operations improved markedly. ODEP's financial performance is satisfactory. The economic rate of return is reestimated at 29 percent, close to the 30 percent estimated at appraisal. In view of the broad institutional achievements and the solid financial and technical performance of ODEP, OED rates the outcome of the project as highly satisfactory, sustainability as likely, and institutional development impact as high, in line with PCR-based ratings. The Bank's performance is rated as satisfactory; weak appraisal of physical components precludes a higher rating. Attachment 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.  FOR OFFICIAL USE ONLY Contents Preface.... ............3 Data Basic Sheet................... ..................... ................ 5 Evaluation Summary ...................................... .........7 1. Background .................................................... 11 2. Project Objectives .......................................... ..... 13 3. Project Concept, Design, and Preparation .............................. 15 Delays in the Identification, Appraisal, and Approval Process................. 15 Policy Reforms During Project Preparation ......................... ..... 16 4. Project Implementation........................ ...................19 Physical Components..............................................19 Reallocation of Project Funds..................... ................19 Loss of Dual-Use Crane..........................................19 Tractors and Trailers............................ ..................20 Cancellation of Shipyard Component.................................20 Institutional Components....................... ...................20 Organizational Study ........................ ...................20 Tariff Study..................................................21 Management Information System, SIPOR ..................... ...........22 Other Technical Assistance and Training.............................22 Implementation Delays.......................... .................24 Project Costs and Financing...................................... 24 5. Outcome and Sustainability........................................ 27 Operations Performance and Economic Rate of Return......................27 Rate of Return................................................ 27 Financial Performance............................................ 28 Institutional Development.......................................... 28 Overall Achievement of Objectives...................................28 Sustainability................................................... 28 6. Performance of the Bank and of the Borrower ..........................29 Bank Performance................................................ 29 Identification-Appraisal.......................................... 29 Implementation............................................... 29 Borrower and Implementing Agencies Performance .......................... 30 Compliance with Covenants ............................. ...........30 This report was prepared by Mr. Hernan Levy (Task Manager), who audited the project in January 1996. Ms. Maryvonne Mauprivez provided administrative support. The report was issued by the Infrastructure and Energy Division (Yves Albouy, Chief) of the Operations Evaluation Department (Francisco Aguirre-Sacasa, Director). 6Its contents may not otherwise be disclosed without World Bank authorization. ThsBorroetha a Imesticenitbtion gndes uedb Pefoma cipetnyi hpromneohi 2 (Continued) 7. Ratings and Lessons................................................... 31 Ratings ........................................................ 31 Lessons Learned .......................................... ....... 31 3 Preface This is a Performance Audit Report (PAR) on the Morocco: Port of Casablanca and Mohammedia Project, (Loan 2657-MOR) for US$22 million. The Loan was approved on February 25, 1986 and became effective on December 30, 1986, five months later than originally scheduled, due to delays in the preparation of legal documentation by the Government. The Loan was closed on June 30, 1993, after two extensions. The PAR was prepared by the Operations Evaluation Department (OED). It is based on the President's report, sector and economic reports, special studies, the loan documentation, study of Bank files, the Project Completion Report (PCR) (Report No. 13594, dated October 11, 1994) and discussions with Bank staff. An OED mission visited Morocco in January 1996 and discussed the effectiveness of the Bank's assistance with central and local government officials, with officials of the Office d'Exploitation des Ports (ODEP) and with port users. Their kind cooperation and invaluable assistance in the preparation of this report is gratefully acknowledged. The Project Completion Report is good; it provides a clear account of project design and implementation. The PAR's main focus is on the institutional objectives and components, and an attempt is made to identify the main factors behind the successful results achieved. The PAR also covers the quality of the appraisal process and the reasons of the implementation delays in more detail than the PCR. Copies of the PAR were sent to the relevant Government officials and agencies for their review and comments. No comments were received.  Basic Data Sheet PORT OF CASABLANCA AND MOHAMMEDIA (LOAN 2657-MOR) Key Project Data (amounts in USS million) Appraisal Actual or Actual as % of estimate current estimate appraisal estimate Total project costs 22 48.62 18.47 Loan amount 22 21.66,818 Cancellation 44,292 Date physical components completed 12/31/91 10/31/93 Economic rate of return 29% Cumulative Estimated and Actual Disbursements FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 Appraisal estimate (US$M) 1.42 6.24 11.57 17.00 20.50 22.00 Actual (US$M) .65 1.92 6.93 8.79 12.23 17.01 20.42 21.96 Actual as % of appraisal 29 29 58 57 65 82 93 99. Date of final disbursement: 11/24/93 Project Dates Original Actual Initiating memorandum 05/82 Negotiations 09/09/85 10/15/85 Board approval 12/85 02/25/86 Signing 05/09/86 05/09/86 Effectiveness 08/09/86 12/30/86 Closing date 06/30/91 06/30/93 6 Staff Inputs (staff-weeks) FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 Total Preappraisal 5.60 36.80 15.60 3.50 61.50 Appraisal 44.80 3.30 48.10 Negotiations 23.90 23.90 Supervision 5.60 21.40 10.60 18.10 4.40 4.80 8.50 9.0 82.40 Other 2.7 2.80 5.50 Total 5.60 36.80 15.60 48.30 32.80 21.40 10.60 18.10 4.40 4.80 8.50 11.70 2.80 221.4 Mission Data Date No. of Staff days Specializations Performance Rating trend (month/year) persons infield represented rating Identification/Pre 05/82 paration 12/82 1 4 EC Appraisal 12/84 5 18 EC,FA,EN,PO, IT Supervision I 09/86 4 12 EC, FA, EN, I 1 Supervision II 06/87 2 8 IT Supervision III 01/88 2 10 EC, EN I I Supervision IV 10/88 2 13 FA, EN 1 1 Supervision V 05/89 5 14 EC, EN 1 I EC, FA, EN, Supervision VI 10/89 IT Supervision VII 01/90 Completion 06/93 EC = Economist; EN = Port Engineer; FA = Financial Analyst; PO = Port Operations Expert; IT = Expert in International Trade; CE = Computerization Expert Other Project Data Borrower: Government of Morocco Executing Agency: Office d'Exploitation des Ports (ODEP) FOLLOW-ON OPERATIONS Operation Loans No. Amount Board Date (US$ million) Port Sector Project 3283/3284 33 and 99 05/09/91 7 Executive Summary Introduction 1. This report audits the first Bank port project in Morocco, the Port of Casablanca and Mohammedia Project, approved in February 1986. 2. In the early 1980s, as an economic crisis lingered on, and balance of payments and budget deficits became acute, the Government developed a new strategy which aimed to improve the performance of public enterprises and to provide infrastructure to encourage private, export oriented investments. As part of this strategy, in 1984 the Government abolished a public enterprise (the Regie d'Acconage du Port de Casablanca) which had the monopoly of cargo handling operations in all public ports, and created in its place an autonomous public corporation (the Office d'Exploitation des Ports, ODEP). Objectives, Design, and Preparation 3. The basic objective of the loan was to improve the operational efficiency of the Port of Casablanca. Related objectives included improving the management and financial viability of the port sector's major public enterprise and improving investment planning for Casablanca as well as for the neighboring port of Mohammedia. To this end, the project comprised physical investments in infrastructure and equipment at both ports, and technical assistance and training. The project assisted both ODEP, and the MPW's Directorate of the Ports of Casablanca and Mohammedia (DPCM), which is responsible for the two ports' infrastructure. 4. Even prior to the formulation of the project, the Government had taken measures to improve the performance of the ports, which included stepped-up maintenance of the port of Casablanca, simplification of customs procedures and transfer of financial responsibility for operations and maintenance from the Port Directorate of the Ministry of Public Works headquarters in Rabat to ODEP in Casablanca. 5. Identification-Board process. Overall, this process was protracted. The project identification-to-appraisal process was long, two and one half years. The main cause was the realization, during this process, that the Government would be short of counterpart funds. This triggered an analysis of alternative project designs, with a wide cost spectrum. Project processing time from appraisal to Board also lasted an unusually long period, 14 months. This delay was mainly due to the need to decide on the appropriate contractual mechanism for directing the funds to the two entities that would be beneficiaries of the project: ODEP and the Ministry of Public Works' Directorate for the ports of Casablanca and Mohammed (the DPCM). Poor communications internally among Bank departments, and externally with central government authorities, contributed to delays throughout the period between identification and Board presentation. 6. Policy Reforms during Preparation. The Bank's transport strategy for Morocco called for policy reforms to be in place in the very process of project preparation. The main reform was the creation of ODEP, which was completed prior to project appraisal. The project's institutional components mainly aimed at strengthening ODEP. 8 Implementation 7. The Audit concurs with the PCR that, overall, project implementation was good, although it took two years more than originally envisaged. Delays were caused by (i) a long, ten- month period to declare effectiveness because of slow government action in completing standard legal requirements and (ii) changes in project components. 8. The main change in project components stemmed from ODEP undertaking, with its own funds, urgent repairs to the port, one of the project's key physical components. The rationale for this action appeared to be the delays in effectiveness and the urgency of the works. Later in project implementation, it was agreed to cancel another project component (shipyard rehabilitation). The view of this Audit is that cancellation of two project components, one of them early in project implementation, suggests inadequate appraisal of these components. 9. Institutional Components. Implementation of the institutional components was successful and many of the recommendations were carried out, even though there was no legal obligation in loan documentation to go beyond conducting the studies. Notably: (i) a study on the organization of ODEP resulted in putting in place after a test period, in three of the 11 ports managed by ODEP, a new organizational structure for the whole agency; (ii) a tariff study produced a detailed analysis of port operating costs and a methodology to assess tariff adjustments, which was applied, and changes to the ports' tariff structure were made; (iii) a management information system (SIPOR) covering a variety of functional areas such as traffic and operating efficiency, cost accounting, billing, management of physical assets and of personnel, maintenance of infrastructure and equipment, was actually put in place; and (iv) short- term individual consultants helped improve productivity in other areas such as ship calls management, cargo handling operations and operation of the control tower at Casablanca. Outcome and Sustainability 10. The project helped to substantially improve productivity in the port of Casablanca; for example, there was a 25 percent increase in cargo handling productivity and a 40 percent decrease in the dwell time of containers in the port area. These improvements were achieved thanks to the efficient use of the project's technical assistance and despite the fact that the project did not include operational performance targets or indicators. 11. As noted in the PCR, both the economic rate of return and the financial performance were satisfactory. 12. The achievements in institutional development were the high point of the project. They covered a wide range of activities and surpassed expectations. 13. Sustainability. The high return of the investments, ODEP's good financial performance, and its adequate funding to maintain infrastructure and equipment, should guarantee the sustainability of project investments. Part of the equipment purchased under the project has been leased to private operators, and it is in their best interest to keep the equipment in good condition. The largest risk is the condition of the main breakwater at Casablanca, which is in poor condition, and the DPCM, responsible for its maintenance, has not received funding from the Government for this work. 9 Bank Performance 14. The Bank performance was good, although changes in project components during implementation may be a sign of weaknesses at appraisal. On the institutional side, the Bank was correct to support ODEP and to endorse its institutional initiatives, rather than impose new ones. With the benefit of hindsight, the only fundamental question is whether there would have been any option for the Bank, at the time of ODEP's creation and of project formulation, to include in the project a study that would have led ODEP to prepare for, and eventually hive-off to the private sector, its cargo handling operations (para. 6.3). Borrower Performance 15. Borrower performance was very good, notably on the institutional side. ODEP's outstanding achievement is to have launched important studies (and designing some ahead of project identification) with broad corporate coverage, and to have put many of the recommendations in place during the project's time frame, even though no formal requirement existed on this in the loan documentation. On the physical side, problems that arose during implementation were correctly addressed and corrected. Lessons 16. The main lesson of this project is that ownership at the highest political and managerial level is an essential ingredient for success in institutional development, and that operational measures need to follow all along the corporate hierarchy throughout project implementation (para. 7.2). The key measures adopted by ODEP were: (a) continued involvement of top management from design of studies until implementation of recommendations; (b) pilot testing of consultant's recommendations; and (c) a participative approach to change, involving management, senior professionals and staff. Ratings 17. The Audit rates the outcome as highly satisfactory, institutional development as high, sustainability of benefits as likely, and Bank performance as satisfactory. These ratings are broadly in line with those of the PCR.  11 1. Background 1.1 Morocco has a transport system that serves adequately its surface of some 459,000 square kilometers and its population of about 27 million. The system comprises 58,000 kms of classified roads, a railway network of about 1,800 kms, 15 airports, and 11 commercial ports. Casablanca is the country's main hub, both in its domestic traffic as part of the Marrakech - Casablanca - Rabat - Kenitra corridor that carries over 50 percent of the country's traffic, and internationally through its port and airport. 1.2 Casablanca is the busiest port in North Africa and serves a variety of traffic. Of the other commercial ports in Morocco, Agadir and Nador are also well diversified in their facilities and nature of cargo handled. Other ports are more specialized: petroleum products are mainly handled at Mohammedia, phosphate products at Jorf Lasfar and Safi, and passenger traffic at Tangiers. 1.3 The Casablanca, Jorf Lasfar, Safi and Mohammedia ports handle about 90 percent of total port traffic. The ports of Casablanca and Mohammedia together handled 22.9 million tons in 1994, of which about 60 percent were exports and 40 percent imports, and represented some 50 percent of all of Morocco's port traffic. The main change in traffic composition during the project period has been the rapid development of containerized cargo, which more than tripled, reaching 1.6 million tons in 1994. 1.4 The port of Casablanca was constructed some 80 years ago. Its main breakwater, 3.18 kms in length, and the secondary breakwater, 1.15 km long, give the port protection from the prevailing Southwest (winter) and Northwest (summer) winds. Deep water berths protected by these breakwaters total 5.4 kms long, including three breakwater berths, two berths for containers and three berths for roll-on roll-off (RO-RO) ships. These five berths, however, have been adapted from old facilities, and do not meet the requirements of modern container and RO- RO terminals. 1.5 In December 1984, the Government carried out a major reorganization of the port sector. It abolished the Regie d'Acconage du Port de Casablanca (RAPC), a public enterprise under the Ministry of Public Works (MPW) which exercised a monopoly over all cargo handling operations in all major ports, in addition to other functions, and created in its place the Office d'Exploitation des Ports (ODEP). ODEP was created as an autonomous enterprise, which acquired and broadened Regie d'Acconage du Port de Casablanca is (RAPC) responsibilities. Its main functions are: (a) to operate the country's 11 commercial ports; (b) to handle cargo without exercising a monopoly; (c) to maintain port infrastructure except for breakwaters and dredging done by the Ports Directorate and other infrastructure operated by specialized users; (d) to collect revenues from cargo handling tariffs as well as the port dues; and (e) to undertake, at Government's request and for its account, construction of new infrastructure, maintenance and repairs in three minor ports and maintenance and repair of lighthouses and beacons in the ports operated by ODEP. The role of ODEP, and the role of the project in supporting it, is discussed in Chapters 6 and 7 of the Audit . 12 1.6 As a separate entity, the Direction des Ports de Casablanca et Mohammedia (DPCM) of the MPW is responsible for maintenance of breakwaters, dredging and harbor functions; however, some of these responsibilities have been recently transferred to the ODEP. 13 2. Project Objectives 2.1 The project objectives, as described in the Staff Appraisal Report, were: (a) to improve the operational efficiency of the Port of Casablanca and minimize port users costs, including damage to cargo and equipment; (b) to integrate port activities into the country's effort to promote exports and improve management and financial viability of the sector's major public enterprises; and (c) to prepare for a rational expansion of port infrastructure. 2.2 Objectives (b) and (c) were defined in a crispier way in the President's Report, which utilizes the following language for these two objectives: "The project will... (b) improve the management and financial viability of the subsector's major public enterprise and, (c) improve investment planning in the subsector."  15 3. Project Concept, Design, and Preparation 3.1 This project was the first Bank operation in Morocco's port sector. At the root of the project idea was Government's strategy to cope with an economic crisis that spanned several years starting in 1976, when balance of payment and budget deficits became acute. In the early 1980s, the newly developed strategy consisted of: (i) cutting public investment and improving the financial performance of public enterprises; (ii) providing the basic infrastructure and the economic institutions to stimulate private, export-oriented investments to improve the balance of payments, and (iii) encouraging investments with fast and substantial returns to improve the social equilibrium through better performance of the economy. 3.2 In the context of the strategy, the Government had initiated measures to improve the performance of the ports subsector. The Government's stated goal was to ensure the sector's responsiveness to the export promotion effort and to transfer more financial responsibility to the public enterprises operating the country's ports. The measures included: (i) stepped-up maintenance of the Port of Casablanca; (ii) simplification of customs procedures; and (iii) transfer of financial responsibility for port operations and maintenance from the Port Directorate in the MPW to the ODEP. 3.3 The project was prepared by the MPW in consultation with the Bank, following an identification mission in April 1982. A first Project Brief was issued in June 1982. The project was appraised in December 1984. 3.4 The project, as appraised, included: (a) rehabilitation of existing port infrastructure in Casablanca; (b) provision of workshop equipment (Casablanca); (c) technical assistance to ODEP to assist in a number of technical, managerial and financial matters; (d) training of ODEP personnel; (e) dredging of Casablanca port; (f) rehabilitation of Casablanca breakwater and control tower; (g) provision of crane and other equipment for maintenance of Mohammedia port breakwater; (h) training of ODEP personnel; (i) technical assistance to DPCM; and (j) training of DPCM staff. 3.5 The project description appeared to support well objectives (a) and (b) mentioned above. However, other than for the expected contribution of the technical assistance to improve the ports' management information system, no component appeared to have been especially targeted to support objective (c) related to the improvement of investment planning. Delays in the Identification, Appraisal, and Approval Process 3.6 The identification-to-appraisal process, lasting two and a half years, was long. This was mainly due to the realization, during this process, that public finances were in a weak condition and were not likely to guarantee the provision of the necessary counterpart funds. About a year after the identification mission, a preparation mission called attention to this issue. As a result, the public finance situation took center stage, and the operations staff proceeded to consider alternative project designs, including one that would limit the project purely to technical assistance. However, staff reports were not fully consistent on this in the subsequent preparation 1. Back-to-Office Report, dated April 13, 1983. 16 of the project. For example, Project Brief No. 2,2 issued just after the preparation mission that had raised the finance issue, proposed a project which included the construction of a new container terminal, a major investment that would have cost more than the project that was eventually approved. (The project cost proposed in this Brief was US$150 million, with a Bank loan of about US$80 million). It is worth noting that this Brief anticipated an appraisal date of September 1983 and indicated that no scheduling problems in project processing were foreseen. 3.7 The Audit finds puzzling that, while the project originated in the need to reduce the deficit of public enterprises, it took one year for the Bank to realize that the project could be in serious trouble for lack of counterpart funds. Neither the initial Project Brief nor any report during the next 12 months hinted that the public finance crisis might become a possible cause for delays in project preparation and appraisal. Project files suggest this situation was caused chiefly by poor communication conveyed by the then Bank Programs Department, which was responsible for following the country's macroeconomic situation, to their colleagues in the Projects Department. 3.8 The internal communications problem was compounded by contradictory signals received in the Bank from Government authorities. While the MPW reaffirmed its commitment to a large project including construction of a container terminal, information reaching the Bank from the Ministry of Finance noting minimal funding in the budget for port investments had prompted the Programs Department to drop the project from the lending program. 3.9 Project processing from appraisal to Board presentation, lasting about 14 months, was also abnormally long, especially for a project that did not have other cofinanciers beyond the Bank, the Government and Borrower, or did not suffer from other complications which typically account for major delays between appraisal and loan approval. The schedule proposed by the appraisal mission called for Board presentation in June 1985,4 whereas it actually happened in February of the following year. The project files reveal a protracted process after project appraisal. The main single factor of the slow processing appeared to be the need to agree on the appropriate contractual mechanisms for directing funds to the two entities that would be beneficiaries of the project: ODEP and the DPCM. The options considered evolved from splitting the operation into two separate loans (original Government request) to the solution finally adopted for the loan to be given to ODEP, who would administer the funds for DPCM- related investments on their behalf. Policy Reforms During Project Preparation 3.10 The Bank's transport sector strategy under which the port project was being prepared noted as a key principle of implementation of the lending strategy that "policy reforms need to take place in the very process of project preparation." On this, and in relation with the proposed (at the time) port project there appeared to be a perfect convergence of views between the strategy and the Government objectives in the port sector. 2. Dated May 25, 1983. 3. Memorandum from Mr. Sebastien to Mr. Grosdidier de Matons, dated August 15, 1983. 4. Appraisal Mission Issues Paper, dated January 9, 1985. 5. Transport Sector Strategy Paper, Yellow Cover, dated April 13, 1984. 17 3.11 The main reform, clearly, was the creation of ODEP which was completed prior to project appraisal. The project's institutional components mainly intended to strengthen ODEP; some of these components had been launched by ODEP during project preparation. This fact probably explains why conditionality under the project was minimum, mostly limited to standard, boiler-plate requirements (see Chapter 6). It is worth noting, however, that at the time there were dissensions among Bank staff as to the credibility of ODEP intentions and capacity to move forward in their announced strengthening programs, with project staff taking a more favorable view of ODEP than that of outside advisers.6 6. For example, a memo by Mr. Shilling of April 18, 1985, during the project's Yellow Cover Review, noted that ODEP's management reform did not have a time frame associated with it, and suggested that the Bank should carry out a separate appraisal of ODEP. Projects' staff response, in a memo dated April 30, 1985, discarded the need for such an appraisal.  19 4. Project Implementation Physical Components 4.1 The audit concurs with the PCR that, overall, the physical components were well implemented, especially the civil works. The Audit comments on specific issues which are either not mentioned or are very briefly touched upon in the PCR. Reallocation ofProject Funds 4.2 Early during project implementation, even before the project had become effective, a supervision mission transmitted a Government request to reallocate some US$8 million of project funds. The reason given for this request was that urgent repairs to the port of Casablanca, whose financing had been included in the project, had already been carried out by ODEP. The underlying rationale appeared to be that given the urgency of the repairs, and the delays in declaring project effectiveness, ODEP had decided not to wait any longer and had proceeded to carry out such works. 4.3 A request for the reallocation of project funds less than a year into the project after Board approval, and before the declaration of effectiveness, normally calls into question the quality of the project appraisal. The Audit does not find a clear case on this issue. On the one hand, it could be assumed that the appraisal mission should have been in a position to assess the urgency of the repairs to be included in the project. On the other hand, the abnormally long, 14- month period between appraisal and loan approval, coupled with further delays until effectiveness, lends credibility to ODEP's statement that, faced with delays in project processing, it decided and actually carried out the urgent port repairs that were supposed to be financed under the project. Loss ofDual-Use Crane 4.4 An important piece of equipment financed under the project was a special port crane that was intended to have a dual, -use to handle containers at Casablanca port and to lift and place concrete blocks for the periodic maintenance of the breakwater in the Mohammedia port. This equipment cost just under US$7 million, and was the single-most expensive project component financed with loan funds. 4.5 The crane required a customized design, which was met by the supplier. The operational concept required to transport the crane once a year from Casablanca to Mohammedia, and return to Casablanca. This transport was contracted by ODEP with a local company. During its first year of operation, while being loaded onto the ship at Casablanca port, the ship overturned and the crane fell into the water. It was declared a total loss. 4.6 The Audit discussed this case with the ODEP's legal department. It reported that the crane was insured with a local insurance company, a group of co-insurers, and that it was 7. Supervision Report dated December 8, 1986. 20 properly re-insured abroad, to its full value of 60 million Dirhams. ODEP reported that it was reimbursed by the insurance company promptly (5 months) after the accident and to the full amount of the insurance. Subsequently, ODEP abandoned the dual utilization concept, and purchased a simpler crane for the needs of the port of Mohammedia, while two specialized container cranes were purchased under the ongoing Bank project for use in the newly-built container terminal at Casablanca. Tractors and Trailers 4.7 The only component where misprocurement occurred was the purchase of two tractors and trailers. As reported in the PCR, the tractors, as supplied, failed to meet specifications to pull 70 net tons as called in the tender documents. After application of contractual penalties, the supplier replaced the tractors with new, fully performing equipment, which was delivered in December 1995. Cancellation of Shipyard Component 4.8 The original project description included financing for the rehabilitation of Casablanca port ship repair facilities. During project implementation, and upon review of the technical and economic studies and changed market conditions for this investment, by common agreement between the Government and the Bank this component was canceled. 4.9 The Audit questions whether this component, which, at a cost of US$2.4 million was one of the medium-size components of the project, was well assessed at the time of appraisal. The appraisal report noted that "..The engineering consultants will prepare a comprehensive master plan for the area, to be discussed with the Bank and ODEP before the preparation of tender documents". In the report's Annex describing the facilities of the port of Casablanca, there is no mention of the ship repair area. Thus, it appears that the appraisal team paid little attention to this component, and that it was probably at too early a stage of preparation for inclusion in the 9 project Institutional Components 4.10 The PCR reports that the institutional components were overall successfully implemented, and led to concrete recommendations, many of which were implemented. The Audit concurs with this assessment and presents a more detailed analysis of the factors underlying the good performance. The Audit further discusses an issue with the information system component Port Information System (SIPOR). Organizational Study 4.11 ODEP's initial organization followed that of the RAPC, the agency it replaced. One of ODEP's main priorities upon creation was to develop its own organizational structure, reflecting 8. The accident occurred on June 17, 1992 and insurance reimbursement checks to ODEP started on November 16, 1992. 9 The managing division (MN IPI) noted that the Royal Navy, one of the main customers of the shipyard, changed policies after project appraisal, and decided to set up its own ship repair facility. 21 its own strategic objectives, which were broader and with a more autonomous mandate than RAPC's. The study team consisted of a foreign company and a Moroccan consultant. 4.12 The study was developed in a participative manner. A steering committee (Comit6 de Pilotage), comprising representatives from all departments concerned was set up to guide the study and to make decisions and alternative organizational scenarios developed by the consultants. The outcome of this study was a new organization structure for ODEP, including the preparation of operational manuals, delegation hierarchies for key posts and job profiles. The new organizational "package" (structure, manuals, etc.) was first tested in three ports: Casablanca, Tangiers and Saft. After about a two-year test period, the same consultants were brought in to advise on adjustments to the organization. 4.13 ODEP's staff signaled that the efforts under the study were successful and that a satisfactory organization was established, which is essentially the same as today's. Staff emphasized that the main factors behind the successful outcome were: strong support and interest from upper management, the participative approach adopted, and the companion SIPOR study that provided the required information system support. Tariff Study 4.14 The study concept was launched by the Government in parallel with the process to create ODEP. As early as mid-1983, during the early phases of project preparation, the Government requested the Bank to include this study under the project. The main purpose of the study was to set up a new tariff system for the whole of ODEP's services (including charges to ships, merchandise and other services) that would be cost-based and would do away with the cross- subsidies that characterized RAPC's tariff structure. The study was formally completed in December 1988. However, based on draft reports, an initial tariff adjustment took place in 1987. 4.15 Subsequently, major changes to the structure of port tariffs were introduced in 1990 (which essentially changed the structure of ship's dues), in 1991 (to reduce cargo handling rates and the ad-valorem tax applied to on-land cargo movements) and in 1992 (adoption of tariffs in ECUs, and other adjustments). 4.16 From data presented in the PCR and additional information gathered by the Audit, it appears that the study's main achievement was to provide a detailed analysis of port operating costs, as well as a methodology to elaborate further updates. The study was also successful in leading to initial corrections in the tariff structure, relative to that existing under RAPC. However, over the 10-year period since 1984, tariff adjustments, on average, have led to a 25 percent increase in real terns, which is probably excessive, especially in view of the large 10 productivity gains achieved during the period. Further, as noted in the appraisal report of th.e subsequent port project, by 1990 substantial cross-subsidies were still prevalent among various port services and freight handling charges. The view of the Audit is that cross-subsidies remain to a large extent because they fit with ODEP's strategy role to balance the finances of all 10 This issue is well analyzed in the Bank report: Royaume du Maroc, Participation du Secteur Prive dans les Infrastructures, Bureau Regional Moyen-Orient et Afrique du Nord, Decembre 1995. 11. Kingdom of Morocco, Port Sector Project, , dated November 29, 1990, para. 2.42. 22 its ports taken together. A strict cost-based tariff system for all ODEP ports would certainly show deficits in various of its smaller ports and would require explicit transfers of funds. Management Information System, SIPOR 4.17 ODEP launched the SIPOR study in December 1987. It was intended as a fairly comprehensive management information system covering a variety of ODEP's administrative and functional areas: traffic and operating efficiency; cost accounting; billing; management of physical assets and personnel; maintenance of infrastructure and equipment. 4.18 The Audit mission had an opportunity to see SIPOR in operation. The system, comprising a package of interrelated modules, is fairly impressive. Some divisions in headquarters have full access to all the modules. However, ODEP's offices at the port itself have a more limited access to the data. At the same time, the system is not yet integrated with clients' computer systems, which is a major drawback of SIPOR as currently operated.12 Correction of this and other problems and extension of the system to allow integration with electronic data interchange systems for port and maritime services are expected to be done under the ongoing port project. 4.19 ODEP's management claims that SIPOR is a successful system, and that it has become known outside Morocco; this has led to agreements between Morocco and several countries in the African continent for the installation by ODEP personnel of a SIPOR-like system in those countries. Installation in one country is reported as having been completed and being operational. The Audit finds this to be an excellent example of South-South transfer of technology through a targeted, twinning-typel3 intervention for a well-defined objective. Other Technical Assistance and Training 4.20 Other technical assistance also contributed to the improved efficiency in the project ports. Generally, this assistance consisted of individual consultants, working on specific tasks such as ship calls management, handling operations and administrative streamlining, and operation of control tower at the port of Casablanca. Training for both ODEP and DPCM personnel was carried out through the local implementation of an United Nations Conference for Trade and Development (UNCTAD) and Training Program for the Maritime Sector (TRAINMAR). 4.21 Summary of Success Factors. The Audit finds that, despite some drawbacks, the technical assistance components of the project were very successful: they addressed, mainly through studies, several key areas for the management of ODEP, and many of the studies' recommendations, such as the setting up of new managerial systems and procedures, were put in 12. A major port client interviewed by the audit mission complained that while he had direct access to customs information system, notably as regards the status of his bills, he had no access to ODEP's. This forced port clients like his company to spend time in manually tracking the status of their bills, which was wasteful. 13. Twinning is a well known practice for the transfer of technology, where generally an agency of a developed country links up for a substantial period of time with a similar agency in a developing country for the provision of technical assistance and/or training. 23 practice in record time. The key factor of success appears to be the high degree of ownership by the Government and the Borrower, as reflected by:14 (a) Initiative: the creation of ODEP and the studies required to help set it up originated with the Ministries of Finance and of Public Works, and within ODEP itself; (b) Intellectual conviction among policy makers: the initiative was launched by two key ministries, and there was sustained support for ODEP's mandate and autonomy throughout the project period and up to today; (c) Expression of political will: this follows from (b) above; and, (d) Consensus-building among constituencies: the ODEP initiative and the related technical assistance and studies did not have an antagonistic group (other than the civil servants at the DPCM and DP, that saw their functions diminished), with whom consensus-building would have been required (for example, there were no major lay-offs as ODEP absorbed most staff of the agency it replaced, and personnel changes were mainly at the top management and the highest professional levels). 4.22 The following related factors also contributed to the success of the technical assistance efforts: (a) Preparation for some studies, including early drafts of Terms of Reference, started even ahead of project identification; (b) The studies were essential to the organization and setting of strategic directions of a newly created agency; (c) ODEP's management gave the right signals to its staff on the need to obtain early and practical recommendations from the studies, through the setting up, for each study, of two committees: (a) a Steering Committee, involving the agency's top management; and (b) a Technical Committee, involving the managers and staff directly concerned with the study; (d) A participative approach, where agency staff worked closely with the consultants at all times; and (e) The newness of the agency and the eagerness of the new management and ke professional personnel brought from outside the agency that ODEP replaced. 14. The four dimensions of ownership used here are those presented in the OED report: Borrower Ownership of Adjustment Programs and the Political Economy of Reform, 1992. 15. A strongly motivated, new management team was found to be a key factor of institutional success in OED review (1995) of Lending for Electric Power in Sub-Saharan Africa. 24 Implementation Delays 4.23 Project implementation took two years more than originally envisaged. An initial delay factor was meeting requirements for declaring the project effective, which took ten months instead of the scheduled three. Effectiveness provisions were those standard in Bank projects, consisting in this case of the receipt by the Bank of the legal opinion on the Loan Agreement, the Project Agreement, and the Project Implementation Agreement. It appears that ODEP rapidly furnished the Bank with its part of the requirements (loan and project); however, obtaining Government's legal opinion (guarantee and project implementation) was slow. It is surprising that the delays were caused by the Government rather than by ODEP, considering that the Government had experience with Bank projects, while ODEP was a newly created agency and there had been no earlier port projects. Project files do not reveal any particular reason that would explain the inadequate performance of Government lawyers. 4.24 Changes in project components caused additional implementation delays: first, due to the reallocation of funds following the withdrawal of the component focusing on urgent repairs to the port of Casablanca; then, due to the request by ODEP, and the ensuing review process, for the cancellation of the shipyard components towards the end of the project, coupled with the reallocation of these funds to other components, and their implementation. Project Costs and Financing 4.25 As a result of the deletion and addition of components, there were substantial changes in the breakdown between local and foreign funds and in the application of loan money to such costs, relative to the original estimates: Appraisal and Actual Project Costs (US$ million equivalent) Appraisal Report Actual Part Local Foreign Total Local Foreign Total ODEP 12.56 13.28 25.84 34.32 2.28 36.60 DPCM 6.47 8.73 15.20 4.13 7.89 12.02 Total 19.03 22.01 41.04 38.45 10.17 48.62 (Added) --- --- --- (6.75) (0.00) (6.75) 4.26 The Audit remarks the notable change in the distribution of foreign and local costs. While in the original project local costs amounted to less than half (46 percent) of total costs, in the project as implemented the local costs represented 79 percent of total costs. An effect of the severe reduction in foreign costs was that the only 46 percent of the Bank loan was used to finance foreign costs, compared to 100 percent estimated at appraisal. These numbers suggest that utilization of loan funds substantially exceeded the limits established by the Bank's Loan 25 Committee 16 just prior to negotiations, that the loan could finance direct and indirect foreign exchange costs, but no local costs. 16. Loan Committee memorandum dated August 13, 1985. Some of the local costs may be considered indirect foreign exchange costs, but it is unlikely that the large amount of local costs, that were actually financed out of the loan, could be considered as indirect foreign exchange costs.  27 5. Outcome and Sustainability Operational Performance and Economic Rate of Return 5.1 The PCR reports improvements in operational performance over the project period, and it highlights a 25percent increase in cargo handling productivity (tons per gang per shift) and a reduction in the order of 40 percent in the dwelling time of containers in the port area. 5.2 The PCR does not report the evolution of traffic. As shown below, while import traffic (including containers) increased steadily, traffic overall in the port of Casablanca, as a result of a drop in (bulk) exports, fell steadily over the last ten years, as shown below: Port of Casablanca: Import and Export Traffic(million tons). 1985 1986 1987 1988 1989 1990 1991 1992 Import 5.0 4.9 5.4 5.9 5.9 6.2 6.6 7.7 Export 13.7 12.8 11.9 10.8 9.0 9.7 8.2 8.1 Total 18.7 17.7 17.3 26.7 14.9 15.9 14.8 15.8 The downward trend of export traffic, mainly the result of diverting phosphate exports to other ports, had correctly been forecast in the appraisal report, which explained it, "...as a result of a policy of decentralization away from Casablanca". 5.3 While ODEP's productivity improved as a result of technical assistance under the project, the project did not include operational performance targets or indicators. However, the development of SIPOR allowed to monitor operational performance, and the subsequent Bank port sector project did include a comprehensive set of operational targets. ODEP's operational indicators were singled out as a good practice example in recent Bank documentation on performance indicators.18 Rate of Return 5.4 The PCR makes an assessment of project benefits following a methodology similar to that used in the appraisal report, and consisting basically of quantifying the avoidance of general cargo damages and losses stemming from the improved breakwater and other works, as well as the avoidance of water losses that would result from the investments to improve the port's water supply installations. The PCR, however, assumes substantially higher benefits from savings to general cargo than those in the appraisal, particularly from the fifth year after completion of the works. At the same time, the PCR takes into account more comprehensively than the appraisal the necessary investments costs, which it estimates at some US$48 million, distributed between 1987 and 1993, compared with only some US$12 million at appraisal. The Audit's view is that project benefits are probably correct for the initial years after project completion, but overestimated for the following years. Thus, the project's economic rate of return is more likely 17. Staff Appraisal Report, para. 3.31. 18. Bank report, Discussion Paper Report TWU 21, The Use of Sectoral and Project Performance Indicators in Bank-Financed Transport Operations. A First Edition Note, April 1995. 28 to be in the 20-25 percent range, rather than at the 29-30 percent range estimated in the PCR and the appraisal. Financial Performance 5.5 ODEP's financial performance has been good. During the period 1985-1991, reviewed in the PCR, ODEP's cash flow (net of operating and maintenance expenditures, Government fee, administration and taxes) covered, on average, 3.6 times its debt service, which was above loan agreement requirements of 1.5 times. In addition, cash-flow net of debt covered over 40 percent of ODEP's investment program, which is a good contribution to investment from internally generated funds. By 1994, the debt service coverage had dropped but remained satisfactory (1.5 ratio); total revenues amply covered direct operating costs (working ratio of 0.62), and exceeded total costs including financial charges (operating ratio slightly of 0.86). Institutional Development 5.6 As noted elsewhere in this report, the institutional achievements were many, and are certainly the highlight of this project. Introducing changes in organizational structure, setting up and making operational a rather complex information system, determining operating costs and starting tariff reforms, and reflecting these and other changes in significant improvements in operational performance during the project duration is a major achievement. Overall Achievement of Objectives 5.7 With a solid outcome in institutional development, and a generally good physical implementation, the project achieved its major objectives. Sustainability 5.8 The high rate of return of the investments, ODEP's good financial performance and its adequate funding to maintain infrastructure and equipment, should guarantee the sustainability of the project investments, at least those directly under ODEP's control. Some of the equipment purchased under the project has been given under lease agreements to private operators, and it is in their best interest to keep the equipment in good condition. 5.9 The largest risk is the condition of the main breakwater at Casablanca, which is in poor shape.19 Should DPCM continue to lack adequate funding from the Government, this may become a major issue. A related, potential, longer term risk, if shortage of funds were to persist, is the upkeep of the dredging; this is not, however, an immediate issue, since neither in Casablanca nor in Mohammedia port is dredging required frequently, and currently no dredging is necessary. 19. DPCM staff told the Audit mission that large holes, the largest with a 3-meter diameter, have been detected underwater in the breakwater, with risks that the structure may be seriously damaged if no repairs are done soon. 29 6. Performance of the Bank and the Borrower Bank Performance Identification-Appraisal 6.1 The changes in project composition during implementation reflect problems in the quality of the identification-appraisal process. In particular, it is clear that some of the components, notably the urgent repairs and the ship repair facilities, were just at the stage of idea when the project was submitted to the Board. It appears as if during the preparatory stages project's team were swung between extremely different project concepts: from a large one including a container terminal to a small one including just technical assistance. Even once the appraisal was completed, the Bank's tentative allocation for the project was only US$7 million, or about a third of what was actually agreed. It may well be that such uncertainties hampered the team's ability to concentrate and analyze in detail the project components that would be included in the final project. 6.2 On the institutional side, the Bank's main decisions were to support the newly created agency ODEP, and to endorse their institutional initiatives, rather than to impose new ones. These were good decisions, and were the main determinant of project success, insofar as Bank role is concerned. 6.3 With hindsight, however, one could ask whether some qualifications could have been made of the Bank's support to ODEP. Clearly, ODEP was intended to run a sound operation, both technically and financially. On this, ODEP fully succeeded. Yet, ODEP's operations belong in the category of service ports, a monopoly where a vertically integrated port authority performs most commercial operations. Efficiency in cargo handling is generally less efficient in these operations than in landlord ports, where publicly-owned facilities are leased to private operators.20 Project files show that, after the appraisal mission, this issue was discussed in internal Bank discussions, and the mission conveyed the impression that a study would be included in the project to assess the possible transfer of ODEP's cargo handling operations to the private sector. Such a study did not, however, become part of the project. Implementation 6.4 Bank supervision missions followed the project closely and were very responsive to the Borrower's requests; the Bank was also expeditious in agreeing to changes, deletion and addition of components. Bank comments, during the elaboration of the SIPOR study, insisting on the need to integrate SIPOR's various modules and to link it with other related information systems, were on the mark. The main Bank failures during implementation refer to lack of foresight to: (a) prevent the long delays in effectiveness, by, for example, having more frequent communications with government legal personnel (than what project files reveal) and, eventually, offer to send a lawyer to help, and (b) anticipate the problems with the shipyard 20. Draft OED Pr6cis on ports, 1995. 21. Decision Memorandum, dated February 1, 1985. 30 component, which would have permitted to cancel this component, and reallocate funds, earlier.22 Borrower and Implementing Agencies Performance 6.5 ODEP, the Borrower and the DPCM, that were responsible for part of the project, performed well overall at all stages of the project cycle. ODEP's outstanding accomplishment is to have initiated important studies with broad corporate coverage, and to have put many of their recommendations into practice during the project's time frame. When there were problems during implementation, such as with the crane that fell into the ocean, ODEP defended its interests well, as it obtained total and fast compensation from the insurance companies. 6.6 Imperfections in performance did occur, however. It appears that the request for deletion of an important component (urgent repairs), early during implementation, may have been the result of ODEP failing to fully disclose to the Bank the status of these works prior to Board approval of the project. Had this information been communicated to the Bank prior to negotiations, the project could have been revised then. The long delays to secure the effectiveness conditions were probably due to inept work by government's lawyers, since Morocco at the time was already well experienced in Bank operations. Compliance with Covenants 6.7 Practically all covenants were met. By putting in practice many of the studies' recommendations, ODEP achieved substantially more than the covenants stipulated. The Bank was lucky to have a dynamic and responsible client. The covenants on the studies were limited to committing the Borrower to carry them out and to recruit consultants in accordance with Bank Guidelines; there was no requirement for the Borrower to act on the studies' recommendations.23 22. A Bank staff reviewed bid documents for the shipyard component in April 1990, or more than four years into the project. The first mention of the withdrawal by ODEP of this component is in a Supervision Report issued in November 1991, when the project overall was largely completed. 23. In more recent years, many Bank projects have, in relation to project studies, adopted covenants which require that the studies' recommendations be discussed between the Borrower/Implementing and the Bank, and that the Borrower take steps to implement the studies' recommendations. 31 7. Ratings and Lessons Ratings 7.1 Overall, the project was a successful. The delays, both prior and after Board approval, did not materially affect the project outcome; in fact, the delays during preparation may have been a blessing, in that they allowed the Borrower to make further progress notably on the creation of ODEP and in the preparation of the institutional components. Because of the significant institutional achievements and good economic return, the project's outcome is rated as highly satisfactory. Sustainability is rated as likely and the institutional development as high. Despite the substantial achievements on the institutional side, Borrower and Bank performances are rated only as satisfactory (instead of the maximum rating of highly satisfactory) due to the significant changes in project components that were necessary during implementation, which reflects a less than optimal performance on both sides during preparation and appraisal of the project. Lessons Learned 7.2 Ownership ofInstitutional Development. This is the project's most positive and crucial aspect. The following appear as the key success factors: (a) The creation of ODEP was initiated and supported at the highest levels of government, starting from the Ministry of Finance, who viewed this action as the best response to government's inability to fund port investments and operations in the face of a severe budgetary crisis; (b) The entity was endowed with a substantial amount of autonomy, was given some freedom to set its tariffs, and was staffed, from its top management down, with highly qualified technical personnel; (c) Several of the studies were initiated by ODEP, and were an integral part of the process of providing it with an appropriate organizational structure, information systems, and other tools to achieve a satisfactory operational performance. (d) Some studies were actually started, and consultants were in place, prior to Board approval of the project, reflecting ODEP's ownership and commitment to the studies; (e) ODEP put in place systems, both at the upper managerial and the technical levels, to direct the studies, and to ensure a strong participation of the agency's personnel in all phases of their execution; (f) Some of the studies, for example the one on organizational structure, were designed to include a number of decision points during the conduct of the study, where inputs from the top management were required; and 32 (g) Bank staff recognized that the studies were relevant and of high priority, and helped with their design as well as with the review of their findings. 7.3 Covenants on Studies. The institutional development was achieved without having stringent covenants in the loan documentation. Whether this was an omission by the Bank's technical and legal staff, or reflected genuine trust in ODEP cannot be ascertained at this time. A lesson here is that covenants related to implementing studies' recommendations may not be necessary when there are strong indications of agency commitment to the institutional objectives, as was the case of ODEP. 7.4 Longer-Term View of ODEP's Mandate. There is no doubt that ODEP did meet the objectives for which it was established, and that, at the time, it may have been desirable to create ODEP the way it was. However, it was already known that cargo handling services would be operated more efficiently by private operators. The question, in retrospect, is: did the Government and the Bank miss an opportunity, at the project design stage, to take up the issue of the monopoly of cargo handling services, at least by way of a study under the project? Such a study, which ODEP might not have supported, but the Ministry of Finance might, would have been timely to assist in current Government efforts to stimulate involvement of the private sector in the provision of public services. At the same time, ODEP's success makes it easier today than in the past to attract private operators to take over some of its services. 7.5 Status of Preparation by Appraisal. The status of preparation of the components at the time of appraisal was directly correlated with their good implementation. The success with the studies is a clear, positive example. Physical components that were deleted or performed unsatisfactorily, were mostly at the stage of idea at the time of the appraisal. 7.6 Port Information Systems. Involvement of Clients. Potential benefits of the newly developed port statistical system are not realized as the system, is not yet opened to clients. Earlier involvement of clients in the development of ODEP's information system could have helped make it a more valuable instrument, not only for the port managers, but also for port users. 7.7 Complex Design and Operation of Equipment. The case of the collapsed crane reiterates the advantages of simplicity. The crane required customized design and risky logistics to operate in two ports and for different tasks. Off-the-shelf equipment, dedicated to one single task, as was later purchased to replace the lost one, is generally a better course to follow.    IMAGING Report No: 15712 Type: PPAR