Liberia - Port of Monrovia Dredging Project

CIRCUAING COPY TO W RETURN TO REPORTS DEM'N OmIEIA Report No. Uu0 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DDA TV 0r PDRADMAOTPr ATTTTT DDADT T T'rnnTA "nnm flT, no flnTDATTTA nDT%1TWT1TT' DlfATV1rr LiIDL11.111 EULLI L/If 1IUJL4IL V fll 111LLIL71L L1XILV JO.5L /rt lAar A17 Tnn1 January 2I, .97 Operations Evaluation Department  TABTE AF PANTENTS Page No. Audit Memorandum Introduction 1 The Project 1 Project Implementation 2 The Bank's Role 3 Conclusions 4 Attachment Project Completion Report Currency Equivalents 1969-1974: US$ 1.0 = Lib$ 1.0 Fiscal Year: January 1 - December 31  PROJECT PERFORMANCE AUDIT MEMORANDUM LIBERIA PORT OF MONROVIA DREDGING PROJECT Tntrodtiction This rpnort rPnriAPntn an audit of anhiP-vemPnt uindr thp T.hprin Port of Monrovia Dredging Project, for which Loan 617-LBR of June 20, 1969, was mostly dishrsad h ntnhar 197 1/ Tt JQ "hnQPA mainly ona reviprq of the attached Project Completion Report (PCR), as prepared by the Bank's Western Africa Reginal O4ffic, against- othepr -relevant rports nd imprn qt- material from the Bank files and on discussions with some of the Bank staff who had been involved in the project. The Project The Government of Liberia first approached the Bank in late 1966 auUUL d 'La LU help in11nCC imioVIents 1H L[n rULL Ut LUnroVia, Le country's major port. The main item of the proposal was dredging to accom- -UueLt L1arge Vssels eApLeU LU cdily liU UL AULLS. 11i DetLK considered the proposal favorably, but was particularly interested in three issues. ULIe W41 Lie neeu tU strengIen Lu aIt lUlldl rUEL AUL[IULILy kNrk) so that it could be able to administer the ports under its jurisdiction adequately, and to be able to take over the operations of the Port of Monrovia from the Monrovia Port Management Company (MEMC, a company head- quartered in New York which had a contract for the management of the port). A second issue was the relations of the Government with the mining companies; the Bank was concerned lest the companies receive most or the Denefits of the proposed investments. An additional point, closely related to these first two issues, was the need to decide on the timing of implementation of a revised system of port charges. A final issue was the Government's plans to greatly expand facilities at Port Harper, a project the Bank considered economically unjustified. Contacts between the Government and the Bank continued during 1967 and a satisfactory solution was found for the first two issues. Discus- sions about the Port Harper expansion program continued for another two years. A formal request for a loan was submitted in February 1968. The Government wanted the loan processed as soon as possible because it had committed itself to Japanese iron ore buyers to complete dredging in the port to 42 ft by April 1, 1969, (the depth then was 38 ft). However, this schedule proved difficult to meet mainly due to Bank staff constraints and to unexpected problems in project design. An appraisal mission was sent in September 1968, and the Loan Agreement was signed in June 1969. This nine-month lag can be 1/ The project is completed, but US$ 333,000 from the loan remain undisbursed. These funds are earmarked for the preparation of a development plan for Liberian ports, an item originally not included in the project. Preparation of the plan is now underway and will be completed in 1975. -2- 1/ nartlv attributed to further disctssions delinc with the Port Warner i.qip- Taking into account the above mentioned deadline for dredging, the Bank had agreed during negotiations to retroactively finance dredging costs (amounting to US$ 465,000) from February 1, 1969, so that dredging could begin before the loan became effective. The Government felt that the Japanese buyers would be satisfied if dredging started before April 1, 1969, even it it was not completed by that date. The nrniprt ralled for exnPndituire Pqfimat-ed at TTA L-? million equivalent and comprised the following: a) dredging the approaches and an witt' ~hiin thi port te iccnrow'mmonte bul-11r, ore tc r-ri ers and tanke~rs rertvi4 fncy 45 ft of water; b) provision of two 1,250 hp tugs and a pilot launch; ,N ~ " ^ 4 n -n f nAA 4 -4^r,a1 1 I-,,ni,4n n A 1 4 ni, -4n ^ n- nhd l rh d) management assistance to NPA; e) engineering consultants' services for the dredging program; and f%/cnul1t an-ts'sevicestoprepa -1efe1sibi It studies for the development of road approaches to the port. The US$ 3.6 Milli4on Bank loan was to cover the total foreign exchange cost of the project-. The Loan Agreement contained special covenants aimed at improving NPA's or g aniz a tional efficiecy Project Implementation The project was implemented with little deviation from the original pl n. ..tuaJ. costs were UtJy ?.)Q Milh.-LJf - -LtVO- ln t- or . 1.47 abosve LC U9 tSC estimated at appraisal time (PCR, p.7). There was a three-month delay in dredging mainly due to modifications in LH a LiLLU U LE LULo te in Uga LU VU.LU UL U in, LH LliU &UCA. Lil removal of which would have resulted in substantially higher costs and longer aelays. The two tugs and pilot launch and the additional buoying and lighting were purchased on schedule, although the two tugs were equipped with 1,700 hp instead or 1,25u np engines as envisaged at appraisal time. Ine consultants employed in the dredging program and in the preparation of feasibility studies performed satisfactorily. The main difficulties were found in the implementation of management assistance to NPA. Although NPA took over the operations of the Port of Monrovia in July 1972, the difficulties in providing this assistance--the port operations advisor was terminated after one year and there were delays in the appointment of a port accounting advisor--delayed the implementation of necessary improvements and studies (PCR, pp. 5-6). These included the prepara- tion of the tariffs study, which finally had to be undertaken by a consultant, and the preparation of a development program for Liberian ports. Recent difficulties in handling timber exports in Monrovia have also been attributed 1/ In the end, the Government went ahead with a reduced version of the Port Harper program which included the renewal of the existing facilities. - 3 - to delays in implementing operational improvements as nart of overall nort planning. Most of the covenants were adhered to (PCR, pp.1-3). However, the Government has vft to imnIment the rpvaliation of all NPA nort assets, while NPA has not been able to complete the comprehensive port development program The Pconomir bnefits exnected to rpnii1t from the use of shina %f larger size in the iron ore trade have materialized. With the harbor deepened to 49 ff- fully laden RO000 dwftwkeqls ran he hprfed nq rmnnred rn the pre-project maximum of 50,000 dwt. As a result, the average volume of cargo fnr -mPQe h nra A A Arat intrancod frm R, AAA tnna 4n 1971 tn A0,00 tons in 1972 and 67,000 tons in 1973. Vessels above 50,000 dwt carried 52% of tal traff4i volume in 109729 and -9 in 1073 Actual traffic volume has been close to the appraisal estimate, although iron ore exports have been fluctuati4-- due to world market condition tDrD~ p ON 9)Ihepojc- economic rate of return is expected to be about 40% as compared with than anticipated share of total traffic carried by vessels above 50,000 ~ L .1 ~ III LEI ~~~LLIJ LLUL LL~L L LLLL_CL51 fL ship size from 50,000 to 67,000 dwt results in a 15% reduction in trans- 11.3 million tons will be maintained through 1986. What has not been possible to establish in this audit is the proportion of the project benefits that has been retained by Liberia and the proportion kept by the foreign shipping and mining companies. it is likely, however, that the modification of the system of port charges, which is now based on the size of vessels, and the country's 50% share of the mining companies' profits, have helped to retain a significant part of the benefits in the country. This issue is important, and should be the subject of an in-depth study by the Operations Evaluation Department, probably including other projects where this issue has also arisen. The financial situation of NPA appears better than forecasted at appraisal time due to the slightly nigher than expected trattic volume and a tariff increase in 1971 (PCR, pp.12-15). Actual net income has exceeded the appraisal estimate every year since 19/U, while the return on average net fixed assets has been greater than the appraisal in every year except 1972. Most financial indicators, however, are not very significant because assets have not been properly revalued. The Bank's Role Aside from its financial support, a major contribution of the Bank has been its efforts to strengthen NPA both before and after the signing of the loan. The Bank played an important role in advising NPA in their negoti- ations for a management contract with NPMC, which operated the port until 1/ Deadweight ton. 'Jul L1 IL LaLo rLigLL.y UUCLcU LU L epLUUsU pidl LUL Lhe eAd1- sion of Port Harper. However, the Bank could perhaps have been more force- kul in stressing the impULLance oU manageIent ascsance, the need or solving the difficulties faced in the hiring of some of the advisors, and the advantages of clarifying NPA's financial position through an earlier revaluation or assets. AnUter, perhaps more imputant Bnku contribution, was to raise the issue of the distribution of benefits, to insure that most of the project benefits accrue to the country. It has not been possible LU etalisn tne outcome of these efforts, but the revision of the system of port charges was clearly a step in the right airection. Conclusions The project has been largely successful. The investments were made without serious problems and the rate of return is expected to be higher than originally estimated. However, the final impact of the project on the Liberian economy remains unclear. The NPA has shown improvement in its operations, but at a slower pace than what was envisaged. ATTACHMENT Project Completion Report Port of Monrovia Dredging Proiect 1. Project Data 1.01 Amount of Loan US$ 3,600,000 Amount disbursed (Oct. 31, 1973) US$ 3,267,025.14 Amount in awarded contracts US$ 3,267,025.14 Date of Loan Agreement June 20. 1969 Closing Date (Original) November 30, 1971 rlninec Tie (T.ast Reviqion) May I1 1979 Current Exchange Rate US$ 1.0 = Lib $ 1.0 1.02 The project (Maps 1 and 2) provided for: a) dredging the entrance and approaches, and an area -------- -_-------- --- ------ requiring about 45 ft of calm water; b) provision of two 1250 hp tugs and a pilot launch; c) provision of additional buoying and lighting e) enginee~LLRg U15U1LZ1nL5 bUL-VLCb allU f) consuLants stuaies o roaud approaches to tne pOrt. 1.03 Under the Loan Agreement with the Republic of Liberia and the Project Agreement with the National Port Authority (NPA), the follo*ing were the main special covenants. A. Government undertook to:- (a) re-lend to NPA an amount of US$ 3,385,000 out of the proceeds of the Loan on terms and conditions satisfactory to the Bank; (b) ensure that NPA carried out its Project Agreement obligations; (c) revise NPA legislation before June 20, 1970; (d) ensure that no exemptions from the tariffs, dues and other charges of NPA for past services are claimed or enjoyed by any Government department; (e) exempt NPA from payments to the Government by way of (i) return on the Government equity, or (ii) interest charges on the outstanding US Loan, or (iii) taxes, or (iv) distribu- tion of surplus revenues until NPA prepares a comprehensive port development program; (f) ensure that port users are adequately represented on the Board of NPA; and (g) assign, on termination of the Monrovia Port Management Contract, to an appropriate Government agency, the responsi- bility for the maintenance and operation of the Mesurado Bridge, United Nations Drive and St. Paul River Bridge. B. NPA undertook to:- (h) arrange prior to December 31, 1969, with the Monrovia Port Management Company (MPMC) or other acceptable firm, for the management of all or any NPA ports; (i) as soon as possible, (i) establish an adequate organiza- tional structure, (ii) engage suitable personnel including a Port Adviser and Port Accounting Adviser, (iii) cause MPMC to appoint a Port Engineer, and (iv) prepare a compre- hensive program for development of the NPA ports; (j) transmit to the Bank its annual accounts as audited by an approved auditor, along with his report, not later than four months after the end of its fiscal year; and (k) to make property insurance arrangements acceptable to the Bank. C. Government and NPA jointly undertook to:- (1) revise tariffs and charges relating to the Port of Monrovia by May 31, 1970, and review them from time to time so as to ensure generation of revenue sufficient to (i) cover operating expenses in respect of the Port of Monrovia. including adequate maintenance and depreciation, (ii) yield an annual return of at least 5% for 1971 and 7% for 1972 and thereafter on the value of NPA's net fixed assets in operation at the Port, and (iii) cover interest and amortization of debt and maintain adequate working capital and revenues; and (m) re-value all fixed assets in operation in the NPA ports by t-hp Pnd nf 1970. 2. qmmary 2.01 The project Ti4thI mi nor relli sion s has b-oDeen phI,ys i canlly execut ed as envisaged at appraisal. 2.02 The benefits anticipated at appraisal have accrued and tankers and or e c arriers of up to 9_0, 000 0-t on Sd_W t now regularly call at Monrovia. 1.. n)d ",asl f* u±l'"ll-.L i ts .l~oan covenntsl L 'o a reao able0' extent, IJULt - 3 - (a) it has been slow to arrange the Liberian port develop- ment study. Interim study recommendations are expected in 1974; (b) it has not succeeded in recruiting a Port Engineer. It promises to make fresh efforts to do so; (c) the engagement of a port operations adviser was for a shorter term than envisaged at appraisal. NPA has instead agreed to engage consultants as and when necessary; (d) it has experienced difficulty in recovering charges from Government departments for the use of port services in compliance with the covenant precluding exemptions from such charges. However, NPA is trying to reach a settlement with Government on outstanding debts, and is aware of its obligations for the future. 2.04 The Government has also fulfilled its loan obligations, but:- (a) it had at one time failed to ensure adequate commercial representation on the Board of NPA. This has been remedied at the Bank's request; (b) it has not, with NPA, completed the revaluation of all NPA port assets but this will be done along with the forthcoming T,iberian nort development study: and (c) it had not, with NPA aPnsirpd th anhipumPnt at thp Port of Monrovia of the stipulated rate of financial return of 7/ in 1979 2_05 Thp nroiAct haA achipved an economic rate of return of ahoit 4n*/- compared to the 28% assumed at appraisal (paras. 6.01 - 6.08). 2.06 The finances of NPA are in a fairly healthy conditon in that debt charges are being met and WPA can purse 14m4taAojciesfrpr development; however, the overall financial position will need a careful review n..n revn.orluml- ,nF of aStS 2.0f7 NTVA 1-.. --,..4-.A A4.-t control nf Liberia~n ports ton resnal extent considering the level of its expertise and resources. 3. Action Taken and Recommendations 3.01 Government has been informed of the Bank's acceptance of the Terms o Refre ~CLc anU LLLe prUosuu DUL Lor LL UstUocLn L UlL for Lle LUCAL11 i a Port Development Study. A Pliuc4nal 1V-%aoit-inn nf tHip Prnipcrf 4.01 Dredging 1-hei hanrbor and chnneal tono-rmif safe pAQsAge of irnn ore carriers of 45 ft draft (about 80,000 tons dwt) was satisfactorily completed.* An area of approximately 6-) nA e%f rAnlni~mpti 1 nri -raui tedl from dredging operations. 4.02 The dredged area differs in detail from that envisaged at apprisa becus ol mI ior moulificat L ions Lto th locaionJL oi. n -LL-1 basin to avoid dredging in hard rock. At appraisal, it was envisaged tnat tuis rocwK woulu e removed by V4XUr aL LLD oWIn =AJJ=LO UUL ULLe mvuA.-.L cations to the turning area agreed during construction resulted in an overall saving in expenditure to NPA. 4.03 Dredging coumenced in November 196008 and was completed in March 1970. The appraisal envisaged that the bulk of the work would be completed during 1969 and the delay is largely LccourteU for by te aUUtiUona uredging resulting from the modifications to the turning basin. 4.04 The Contractor for dredging was the Bauer Construction and Dredging Company (US) and the consultant was Lyon Associates Inc. (US). The work of the contractor was satisfactory. 4.05 The project has not had any noticeable effect on the natural regime within the harbor, and maintenance dredging since project completion has followed expectations. Craft and Navigational Aids 4.06 The first of the two tugs provided under the project was supplied by the former Monrovia Port Management Co. (MPMC) to NPA at a negotiated price because the Bank agreed that the need for a tug was sufficiently urgent to dispense with the normal tendering procedure. The second tug was supplied by the Equitable Equipment Co. (US) after competitive tendering. Both tugs are in general compliance with appraisal requirements, although the engines are of 1700 hp compared with the 1250 hp envisaged. 4.07 A pilot launch was supplied by the lowest competitive tenderer, James & Stone (Brighthingsea) Ltd. (UK), but payment was made directly by NPA without use of Loan funds. 4.08 All craft have proved satisfactory in service. The consultant in each case was Richard Taubler Inc. (USA). 4.09 Lights and buoys were supplied under the direction of the same consultant. by the Pennwalt Corporation (USA). NPA have complained that spares have been difficult to procure and expensive. - 5 - Technical Services - Consulting Services 4.10 Consultants for the dredging contract, Lyon Associates, Inc. (USA), have completed their duties satisfactorily. However, some NPA staff questioned whether the consultants had adequately foreseen the extent of hard rock within the area to be dredged, and also whether the bed slope at the periphery of the dredged area had been dredged to a sufficiently flat slope to prevent the slippage of additional material into the dredged area. Both consultants and contractor have long since left the site and could not therefore be consulted on these matters. From an examination of the records within the Bank, the mission concludes that the consultant exercised reasonable judgment. Material, which may have slipped into the dredged area, has subsequently been removed by maintenance dredging. 4.11 Consultant naval architects, Richard Taubler Inc. (USA), have also completed their work, which must similarly be regarded as satisfactory. Nevertheless, doubts remain as to the adequacy of their evaluation of the cost and availability of equipment spares in the bid analysis of navigation lights. 4.12 Consulting engineers, Stanley Consultants Inc. (USA), have completed their work under the project for the following feasibility studies of road improvements leading to the Port of Monrovia. (a) Mesurado River Bridge (b) United Nations Drive from Mesurado to St. Paul Bridge (c) Monrovia Freeway from UN Drive junction to Monrovia- Kakata Highway at Paynesville. The road works recommended by the consultants are included in the Second Highway Project. The detailed designs under the highway project have how- ever failed to anticipate recent increases in log traffic to the port. The matter has been brought to the attention of the Highways Division. 4.13 A financial adviser was engaged by NPA on January 1, 1971 for a two year contract in compliance with the Loan Agreement. His contract was renewed on January 1, 1973, but has ceased to be a charge against the T.nan. He advinp Mr- Tubman, NPA managing director, on various financial and administrative matters. 4.14 The financial adviser's appointment has been of value to NPA, andl in pwrt-riilAr to the present tnnnincy dirprfnr in t-hp aminiqtrqtinn - 6 - of the loan. However, some of the duties envisaged for him at appraisal, notably cost studies for tariff review anu asset revaluation, nave been undertaken largely by the Comptroller. The financial adviser established accounting systems at Greenville and arper, but in the planning ana training of accounting personnel he was less successful. The role of advisers and of the staffing of the managing director's office is also discussed in paragraphs 8.07 and 8.08. Technical Services - Advisers 4.15 A port operations adviser was appointed in July 1971, but his services were terminated by NPA on July 3, 1972 on grounds strongly contested by the adviser. The Bank agreed on September 28, 1972 to a proposal by NPA that another adviser need not be appointed before the Closing Date and that instead consultants would be appointed to furnish operational advice if required. The appointment of consultants for this purpose is not at present contemplated or needed but consultants may be required later if NPA were to assume control of part of Port Buchanan, or a greater measure of control at Monrovia Freeport. 4.16 Delay in the appointment of a port accounting adviser resulted in a study of port tariffs being entrusted to consultants, Muller, Fox, and Pennington (USA), under the project. Moreover, the preoccupation of this adviser and the operations adviser with organizational, financial and operational policy matters and the premature termination of the latter's appointment contributed to a delay in forumulating a development plan for all Liberian ports. The absence of a port operations adviser may also have contributed to NPA's recent difficulties in handling logs at Monrovia. However, the Monrovia port operations as a whole, appear to be satisfactory. Progress Reports 4.17 NPA has been informed that further progress reports are not required other than an annual review of all their activities. During the construction period of the project, NPA's quarterly reports did not always fully meet the Bank's requirements. Project Cost 4.18 The following table discloses broad agreement between the final costs of the principal project items and costs assumed at appraisal. -7- US$ or Lib$ '000 Loan Annraigal Finnl % variation on Category Item Local Foreign Total Local Foreign Total cost on appraisal I Dredging 400 1600 2000 531 1917 2448 + 22.40 II Tugs, Pilot Boat and Navigational Equipment 50 1150 1200 35 1303 1338 + 11.50 III Consultancy other than road studies 50 200 250 49 209 258 + 3.20 IV Consultants for road feasibility studies 40 215 255 40 194 234 - 8.23 Sub-total 655 3623 4278 + 1.37 VI Undisbursed Unallocated - 333 333 Total 620 3600 4220 655 3956 4611 + 9.27 As already noted, the increase in dredging cost is primarily due to a quantity increa bpcansn of the modification to the turning basin. The variation in cost of all other items is within the amount provided by the contingency of 15% allowed at appraisal. Details of the costs of individual items is given in Annex 1. -8- Loan Disbursements 4.19 NPA made direct payments from their own resources for all or nart of some oroiect items. an examnle. alrRadv nntAd. bein, thp nilnt. boat supplies under Loan Category II. The table below shows the amount disbursed against each Loan nteLorv and thp iinfi1dhinr-d aminf. nf TTR dollars which the Bank has agreed may be used towards the cost of a develonment nla:n of Liberian norts- Category Description Allocation Allocation Disbursed Undisbursed I Dredging 1,600,000 1,900,000 1,839,902.00 60,098 .o II Tugs and M+1 I6 f A 1rnn 1 ffn IAn7A 00'7 7f 71 A7O Of -.JL V1 Q %". WU 4L SJQ for I & II 200,000 200,000 156,447.99 43,552.01 IV Consultants Tr4- 1.~ .3 V rvn -r' n~r%^ Y UnaE'LocauAu 4j,o -,WVU - 135,000.00 ,U,u%w,UVVVV )yutVL) wL4 u . )c,714.Uu 4.20 At appraisal, the estimated disbursement schedule was prepared on an annu basus onLy; t1e llowing taLe compare5 Wi wITh acTual Lis- bursements. Cumulative Disbursements Calendar Year Appraisal Actual % Variation 1969 3.0 1.30 -54.6 1970 3.5 3.03 -12.2 1971 3.6 3.21 -10.8 1972 3.25 1973 3.32 - 9 - 4.21 A schedule of quarterly disbursements for the project and of csUJ1LUVU UZoUQMn1L4C U0. u Itm1M.LuLr ,UnUD .L a U ZZ.Ukv1nU pi are shown in Annex 2. Closing Date 4.22 The original closing date for the Loan was November 30, 1971, l ater eXtendedZ to J14VVZJUVV )V, L7(' CUI and g&LJ W.~ rity ).L L7Y) It I Ur£ ther extension to December 31, 1975 to allow the completion of the port UtuodyenT 9UaY may be necessary. Tis should be reviewed when the consultants' proposals have been received. 5. Traffic 5.01 A summary of traffic for the years since appraisal are shown below, and a comparison between the latest forecasts and the appraisal is shown in Annex 3. The 1973 traffic estimate is based upon 9 months' data. 5.02 Petroleum traffic was substantially greater than the appraisal forecast in 1971,slightly more in 1972, but in 1973 there was an off- setting decline Which brought the total volume 1970/73 back to slightly above the forecast trend. 5.03 By contrast, general cargo traffic declined in 1972 after being slightly above the appraisal forecast previously. Recovery in 1973 is likely to bring the four year total to 4% above forecast. 5.Oh Iron ore traffic has also fluctuated. In 1970, it was about 22% above the appraisal forecast as a result of one company (BMC) achieving more rapid growth than expected. In 1971, however, world demand conditions restricted output to near forecast levels, a relationship which also held in 1972. In 1973, forecast demand is likely to be exceeded, again due to strong world demand. 5.05 The appraisal assumed that an average of 11.3 million tons per annum would be exnorted by 1986; there is no reason to alter this forecast, the above-average 1973 volume being probably a cyclical effect. Any adverse effect of increased petroleum prices on total demand in industrial countries of Europe and North America will tend to be offset by Liberia 's relatively close adjacency, and therefore low transoortation costs to these markets. 6. Economic Evaluation 6.01 The economic benefit expected to result from the project arises from vessel economies of scale. With the original 38 ft alongside. vessels larger than 50,000 dwt would generally not have been able to berth fully laden; with the harbor deepened to 45 ft. fully laden 80.000 dwt vessels cmuld he handled. The savings per ton of cargo was estimated at 15% with the larger vessels. - 10 - 6.02 Analysis of data for 1972 and 1973 (to September) indicates the following pattern for iron ore vessels of 50,000 dwt and over, Petroleum vessels are unlikely to reach 50,000 dwt on Monrovian traffic volumes and are therefore excluded from this analysis of benefits. Traffic Volume by Vessel Size 1972 1973 (est) Vessel Size (000 dwt) 50+ 50+ % of Traffic Volume 52 69 6.03 The average volume of cargo for vessels above 50.000 dwt increased from 60,000 tons to an estimated 67,000 tons between 1972 and 1973. The average large vessel size was probably about 58.000 tons in 1971. 6.oh The maximum volumewhich could have been carried by any vessel in the absence of the project,was 50,000 tons. Therefore,the benefit is the qavin,a in tran.nnrt -n.:t nf inn.aino the avrna loiad of these vesAls to 58, 60 and 67 thousand tons in 1971, 1972 and 1973 respectively. The change, if anv in the average load of vessels smaller than 000 dwt is not attri- butable to the project. 6.05 The long-term transport cost saving with increased vessel size is most appropniately based upon shadow prices of vessel oeat:ions,rather t-han actual rates which fluctuate in accordance with the state of the market. A rennt stndv 1/ shows the shadow nrin nevt rmdntion nor n of anron a slightly unde 15% for an increase from 50,000 to 58,000 and 60,000 dwt, and over 1 for A0, 0 to 67 A dt A. The benefit resulting from the cost reduction was accordingly about 32, 34 %Ju JAno 6.i O.Ja .VA.JJ ou V - .) mII on LAU1VO UV-L L _ M .L UWLG Lajpyvu annually is still employed for benefit calculation, the 1973 tonnage being o,uos .Ju= U v Lm U UU111L .LLLaLA.U.A±U11 41UM n 0u uexu. 1umIg - -UU--r - in vessel size and the percentage of traffic carried in large vessels, the bene- fits for the Utree years 171-7) anU Lt perioU up To L9U are snown belows Totl LraLic traficL aving Total Saving million tons Affected % ( per ton) ($ million) (L_1)0U50 321.7 1972 11.2 52 34 2.0 1973 12.6 69 360 3.1 Total Traffic % in Vessels Av. Large Vessels Av.Saving Annual Saving million tons above q000O dwt size((n dwt Per ton(4) (t mllion) 1973 12.6 69 67 36 3.1 1986 11 -1 8 An 3M 1/ R.0.Goss "The Cost of Ships Time", Dept. of Trade & Industry. London. Jan. 197h - 11 - D.UO U l 56 J IS 0W uuu UDOVU U11ll1U lucreaUs dxnu ab6WILaiLg a UV11n5uul rate of change during the intervening period,the economic rate of return is now estimated as a little over 41u as compared witn te appraisal esiimate of 28%. If the vessel size stabilized about the current level, the return would still be over 3>5. 7. Tariffs and Finances A. Tariffs Port of Monrovia 7.01 At appraisal, it was realized that there was need for rationalizing and revising the tariff structure. It was contemplated that the port accounting adviser, whose services were to be financed under the Loan, would advise NPA on tariff reforms. It was agreed that tariffs would be reasonably related to costs and that the first revision would be effected by May 31, 1970. However, there was delay in recruiting a port accounting adviser. Consequently, the work of studying the tariff structure was entrusted to consultants, Muller, Fox and Pennington (USA). They submitted their recommendations in July 1970. After lengthy discussions between the authorities and port users,a new tariff schedule was developed, relating new tariffs to the costs of services and facilities. A major structural change incorporated therein was that the charges to vessels for entering the port and for lying alongside the quay were based on the size of the vessel, whereas previously the charges were based on tonnage of cargo landed/loaded. On being made effective, the re- vised tariffs evoked opposition from some interests, but this was subdued, and the revised basis of vessel charges has been found to be a beneficial reform. Further rationalization and revisions of the tariffs have been effected with the assistance of the Comptroller. The amendments have re- lated mainly to rates for pilotage, fork lifts, overtime, iron ore, palm oil, idle labor and storage, and latex terminal and car park rents. A re- vision of crane and log-handling rates with a view to making an adequate recovery of the proposed outlay on eauipment is now under consideration. The rates are kept under review in the light of costs. Other Ports 7.02 At appraisal, it was noted that the port charges at Greenville were slightly hieher than those at Monrovia. Since then. minor tariff amendments have been made for Greenville. Pending the introduction of comnletely new tariffs. conformine to Monrovia's.ad hoc adiustments are envisaged. Minor amendments have also been effected to the tariffs of Cane Palma. but men- substantial ad hoc changes would nrobablv be necessary towards the costs of the remedial works and improvements. A complete re- structurinenfthe tariffs would have to await lonL-term nlans for the nort. - 12 - B. Finances Accounting 7.03 As part of the re-organization of NPA, coincidentally with the taking over of the assets and management of the Freeport of Monrovia from July 1, 1972, all principal accounting is being performed at NPA headquarters. The assets of Monrovia, including the original assets of 1948 and those of Greenville and Cape Palmas, form a part of the accounts of NPA as from July 1, 1972. These accounts also incorporate the outstanding balance (US$17.4 million as at July 1, 1972) of the debt to the Liberian Government in respect of the USA loan for Monrovia port construction, being repaid at present at the annual rate of US$375,000. An integrated system of financial and cost accounts has been gradually introduced and appears to be satisfactory, but refinements will be necessary having regard to the financial covenants and the possibility of further port development being undertaken. A drawback of the system is that it is mainly manual; however, computerization of payrolls, etc., is proposed to be introduced on an experimental basis and enlarged if found advantageous. In 1972, as in the previous two years, Coopers & Lybrand (UK) were retained as external auditors by NPA. The audited accounts for the half-year ending December 31, 1972 were not ready for the mission. The delay was ascribed to initial difficulties of integration of accounts, following the take-over of Monrovia, and resolution of the question of adoption of calendar year as NPA's financial year. The audited balance sheet of NPA, as at Decem- ber 31, 1972, together with the related operating statement and the auditor's report were received in the Bank on November 26, 1973. Simultaneously with the refinement of accounting, NPA is attempting to improve budgeting, particularly of engineering expenditure, to ensure that estimates are more realistic and a better control over expenditure is exercised. Financial Position 7.04 Income accounts for the Freeport of Monrovia, giving comparison be- tween actuals and aDpraisal forecasts (made in 1968/69) for 1970/73,are at Annex 4. These accounts are summarized in a table on the next page. 7.05 Earnings are generally better than forecast due to (a) actual traffic being higher than envisaged, and (b) certain tariff increases. Working expenses conformed to the appraisal estimates during 1970 and 1971, showed some increase in 1972 and have levelled off in 1973. The income accounts of actuals pertaining to the periods prior to July 1, 1972, have been modified to include depreciation on the oriinal assets at the rate adonted for NPA's accounts for the half-vear ending December 31, 1972. This has been done for comparison purposes, since the relative annraisal forecasts al Iowed for denreciation of the olId assets. At. appraisal, the original assets were valued at $18.15 million (gross) whereas t.hese have bAn taken on the books o NPA on Juil 1v 1972 nt tl.0 m nllion (gross). Consequently, the aggregate depreciation is relatively less. This has contri- than forecast. As a result, the operating and turnover ratios, the financial return anid i-nt--erest and debth scecoerageareribe(tier than Pn-iaged. The (Continued on page 14) ('000) Monrovia Port Management Company National Port Authority Jan. 1 to June 30 July 1 =tec.i 1970 1971 1972 1972 1973 1973 Propor- Propor- Propor- tionate tionate tionate Appraisal Appraisal Appraisal Appraisal Appraisal Budget Actuals Forecasts Actuals Forecasts Actuals Forecasts Actuals Forecasts Actualsi Forecast3 Estimates Operating Revenue 5059 hi 93 5L66 .682 3006 21444 2591 2hh 2794 2h72 5362 Working Expenses 2724 2647 2901 2908 1879 11463 1635 1463 1547 1513 3365 Depreciation and 683 98_ 788 937 .82 1.8 516 419 521 .26 1_1 Amortization Total Operating 3407 3631 3692 3845 2361 1881 2151 1882 2068 1939 Exmenses Net Operating Revenue 1652 562 17714 8,37 6h5 563 _o 562 726 533 982 Interest - Revenue hi 91 91 190 Charges 152 207 200 220 89 106 87 105 91 103 190 Other non-operating _ __ __ _. _ _-- 8 6 revenue. Net Income 1500 355 1 57h 617 597 h57 513 h57 73h h30 988 Opelrating Ratio (%) 67 87 67 82 78 77 83 77 7h 78 82 Average Net Value of Fixed Assets in use lh808 1 7052 16120 16631 16371 15852 17077 15852 16943 15193 16943 Turnover (%) 34 2h 34 28 18 15 15 15 16 16 32 Return on Average Net Fixed Assets (%) 11,1 3•3 11.0 5.0 3.9 3.5 2.6 3.5 4.3 3.5 5.8 covered 10.9 2.7 8.9 3.8 7.2 5.3 5.1 5.3 8.0 5.2 5.2 Times Debt Service covered h.- 2.7 3.9 2.6 6.6 5.1 1 .8 1.7 6.6 h.8 2.6 - 14 - rate of return for 1971 was 11% as against 5%' stated in the financial covenant. 9nWPxr. the position deteriofaed in 1072 +hn --- -+_ _-P +P the two half-years ending December 31, 1972 being 6.5% as against the stipulated rA.e o f 71. Thi was du2eli to- a- inres inoeaigepne.O h ai ~~~- - -- -l" -L -u @ 4A - - -4UAL4 rA%-GO 4U 1, UdBA of the actuals for the first half of 1973, the return for the year may be about AW5% ow"ver,-m it ha to bn era- on -aTj CIA --LU fU- fill the covenant regarding revaluation of its assets. This will now be done on revaluation were found to be appreciably higher in value, the rates of return 'CZ-D 1LUI.V , m preciaton woLa nae 0 Ne pro- vided and the asset base would be larger. Nevertheless, coverage of charges and deb+ sern.rice ght wR b sati ;*+ cl - r. arnA -3 A. 1-- s. u VU Na cui e Governriben snoua e askea to keep the position under continuous review and to take remedial measures if -A. 'VII.P_J WI.r W-LJ LAIU r4C_LaUUU _oaL01 ;oVe:janTs. *W- LKCU4kuV 01ru euniu vo k Dun aove-mentioned income accounts of Monrovia will be found at Annex 5 and are sunmarized below: ('$000) 1970 1971 Jan. 1972 Appraisal Appraisal to June Appraisal Actuals Forecasts Actuals Forecasts 1972 Forecasts I'vt LACu Asses 17,2U 17,052 17,224 16,210 17,841 15,494 Net Current Assets 3,491 2.256 2,414 3,305 2 065 4,386 Total 20 693 19 308 19,638 19,515 19,506 19.880 CAPITAL AND LIABILITIES Long-term Debt 20,844 20,683 18,295 20,273 20.311 19.723 Equity (Deficit) (151) (1,375) 1,343 (758) (ho5) i57 Total 20,693 19,308 19,638 19,515 19,906 19,880 Ratio of Current Assets to Current Liabilities 15.0 7.1 6.4 9.7 3.0 i22 Ratio of Liquid Assets to Current Liabilities 13.6 6.3 5.7 8.9 2.7 11.5 Debt/Equity Ratio 100/0 100/0 93/7 100/0 100/0 99/1 7.07 The balance sheets relating to actuals have been modified to incor- man+n +ha w- n- --P 4-6- -4-4-1 - -n +q ttllf Al -4114--% -- n mm m P--&. 4* ~ 'J~* ~ W W&A A rA 44M *J.L UJ y.,J* JU.L.4 L.LWALAj C& C&%A FLV .LVIJ I.LI6 these on the books of NPA (after allowing for accumulated depreciation of WJd suALL A S JM UUMALJ Aj. .L.7 DL LI4 u.L uo7WW51LU LACO UWWHLA AUGU; I'V I.LVW UVUU parison with the appraisal forecasts. The auditors have remarked in their repor t o tne 71JA! accout Lor UvI La%.L.-Y=aI ULALLOU UJILJUr )L, .L7( t, .14 U they have not seen adequate evidence to support the original fixed assets 4I.UMU JI ULL CnLL oUULjoO aLU 1", uuum VaLUU VIp.L. M.LiJL1n On Tfne DEa)dl of an appraisal of the assets by the Authority's staff. Revaluation of NPA's astUs by consultants for the port deveLopment study will now nave to be awaited and the financial position re-assessed in the light thereof. The ratios of current and liquid assets to current liabiities, and the cash and bank balances, despite decline during the period, remained at acceptable Levels. HOwever, an unsaMsfactory feature was Tne non-abatement in the balance of receivables, which aggregated about $1.2 million as on June 30, In72. Ti is commented on again below in connection with NPAs balance sheets for the subsequent period. The debt/equity ratio is unfavorable because of the inclusion of the port debt tO the United States. 7.0e income accounts for all ports for 1970-73, containing comparative figures of actuals and appraisal forecasts, are at Annex 6. A summary of the accounts is on the next page. ($ '000) Jan. 1 to June 30 1970 1971 1972 1973 1973 Appraisal Appraisal Apprisal Appraisal Budget Actuals Forecasts Actuals Forecasts Actuals Forecasts Actuals Forecasts Estimates Operating Revenue 660 1 )2 L 3, 3 02 Working Expenses 3,318 2,692 3,447 3,003 3,917 3,026 1,802 1,565 3,794 Depreciation and Amortization 683 12713 788 1,2L3 1, 06 1, 13 587 579 1 15 Total Operating Expenses L001 3, 29 4 4 2963 4169 2 389 2 4939 Net Operating Revenue 1 539 422 1842 556 l 24 844 790 393 1083 Interest-Revenue 132 91 190 Charges 152 320 200 388 176 340 91 19 190 Other Non-Operating Revenue 69 8 6 Net Income 1,487 102 1 168 1,269 504 798 234 1±089 Operating Ratio (%) 71 90 70 88 80 83 75 84 82 a Turnover (W) - - - - 33 23 17 24 33 Return on Average Net Fixed Assets in Use (%) - - - - 6.5 3.9 4.3 3.8 5.9 Times Interest Charges Covered 10.8 1.3 9.2 1.4 7.1 2.5 8.7 2.5 5.7 Times Debt Service Covered 4.4 1.3 4.0 1.1 3.2 1.7 7.3 1.6 2.9 - 17 - As Monrovia's share of the total revenue and exenditure is dominant. the explanatory remarks regarding variations in revenue and expenditure from foreants. made in pararanh 7.Oq above. analv here also. However. significant features of the accounts of Greenville and Cape Palmas need to be mentioned. Un t .Tnlv 1- 1979 the nriginal assats of fr^AnvillA were not innluded in the accounts and, as a corollary, no provision was made for depreciation or rmlaiment. The annnal rAvanne snrn1nn of the nort was thus inflated by about $50,000. Moreover, there is no burden of debt service, as this is nA h"-i Iw the nwnwvnman rarnn%PlmaknQ nw%Awat*A At a ln q invinv 1970 =nd -- _--------------------------- ------- -- -- -- --- - C3 ,-- 1971 despite the non-accounting of depreciation. In the case of this port al a %haw ^ a knv-Aan ^f Aah+ movwiam T+a fjinn,,m1 nnQj+nn .z v-atrwl weak, because of the small magnitude of traffic handled. The capital outlay _.a o mn4s.. n4- - 411 +n *1 '3 -4114^n +,u.3 An +hna ^afswn e A ' v.h4 an increase in tariffs to the full extent may be difficult. Variations between +Ua -4-Pnf a4-1 -a A *+ha n--4-1 40'-na+e nnA +ha nnina nnA4 a ratios in the consolidated income accounts is partly due to allowance having in the forecasts. The results indicate that Mbnrovia is subsidizing the other ports IM4m a-..4- km cont4nA.Sinued 4.. 4an 1_*A BTMA -411 hok- 4- +nks O. * uO U0Ju km u n AU uJ."U U LAA Vu%7 J.546-W47.1U CLum%A LIX MA0.L.L n1 V4 V % QA%U1W all possible measures to make the other ports financially self-dependent. OutAule finacUial targets would have to be precribed, wuen tU revaLuaULn of assets by consultants is completed. 7.09 Balance sheets of NPA for all ports for 1972 and 1973 with comparative Ligures for actuals and appraisal forecasts can be found at Annex . A sumary is given below: /A t000) July 1 to Dec J jan 1 to Dec31 jan 1 to June 30 jan 1 to Dec 31 1972 1972 1973 1973 Appraisal Appraisal Actuals Forecasts Actuals Forecasts ASSETS Net Fixed Assets 19,380 21,296 18,939 20,388 Net Current Assets Total 2 2 24j,O62 24574 23662 CAPITAL AND LIABILITIES Long-tern Debt 20,069 21,827 20,237 20,958 Enuitv 1901 2. 219 h-17 9.70h Ratio of Current Assets to Current Liabilities 7.9 8.1 9.9 9.2 Ratio of Liquid Assets to Current Liabilities 7.4 7.3 9.2 8.4 Debt/Equity Ratio OW1lo 9>1 o/18 o9/11 - 18 - 7.10 The fixed assets of the ports of Greenville and Cape Palmas were valued ad hoc for the purpose of incorporation in the NPA's accounts for the half-year ended December 31, 1972. The mission was told that some old assets were unidentifiable. In order that the financial viability of each port can be properly gauged in terms of the investment in fixed assets at present values, revaluation by consultants will have to be awaited. While the ratios of current and liquid assets to current liabilities are fairly high and cash and bank balances have increased by about 8% during the six months ending June 30, 1973, an unhealthy feature of oerations has been the rise in receivables in the same period. The increase was from $1.0 million to $1.4 million desite any appreciable increase in gross revenue .Of te latter amount, about 35% represented outstandings of over three months. Substantial dues are owed by three individual concerns, while the Government has also appreciable old outstandings. NPA will have to be urged to take further suitable action towards expediting recoveries. The debt/equity ratio is unfavorable, but will improve gradually as debt is redeemed. 8. Organization Management and Performance of the Borrower 8.01 In accordance with the Loan Agreement, NPA was established by legislation on Anril 20. 1967. as the authority rAnonsiblA for thp maintenannA and operation of all public ports in Liberia. Accordingly, it was invested with adenate nowarq for +.hs nntn1n rf planning Amcian and nnqn-+An of ports and with appropriate financial and administrative autonomy. The June 20, 1970. 8.02 When NPA was created, the principal Liberian ports of Monrovia, Buchanan, rwn411a (enmm 'n1sA Sinol)ond Ca Pnina (ometime called Port Harper) were operated under concessionary agreements. NPA has omm A +he t ma4a4+4 .and + onro +of ns t vhess p4or 8A 5w. A'I*. -f a --J 44 - IMA. -on4--1 -- T-1-. 1/ 10171)J W. . __' 4.W W - tAL.%&; 44.L& 11LI %. '. V. L WJ.L ILL VL&.LY L., 4.7 1C WA1V1A IAVJ Monrovia Port Management Company (MPMC) ceased to exist in Liberia. However, tions under the concessionary control of mining and other commercial companies ondl A. L" J L O A4.LJ UCLI~ UC L i4 O 8v.v04 Grevi-, a unor coastal caU Ligaerage port UI under NPA control with some responsibility for lighterage exercised by Scanship. 8.05 Cape Palmas (Port Harper) which is also a minor lighterage and coastal porit,camie under direct NPA 'control October 1, 19712. 8.u0 Buchanan is a major port owned and operated by the Liberian American Swedish Mineral Co. (LAMCO). Negotiations have been conducted for some time between IAMCO and the Government on the role which N1A snould play in the management and ownerhsip of the port. Government at present has an equity holding in Lauu. he end of these negotiations is not yet in sight, possibly because of Government's equity interest and possibly because NPA does not - 19 - have sufficient staff to take on such a large new responsibility. Staffing 8.07 Annex 8 shows the latest available staffing arrangements of NPA. The posts of Director of Central Services and Chief Engineer are at present vacant. The work of the Central Services department is being temporarily undertaken by the General Manager and an expatriate is acting Chief Engineer. The Bank has already written to NPA recommending the appointment of a Chief Engineer particularly during the period when NPA becomes involved in the work of the Liberian Port development study. NPA has given an undertaking to renew its atitempt to recruit a suitable candidate on completion of the tour of the acting Chief Engineer. 8.08 NPA has for some time been reviewing its staffing arrangements. It proposes to relinquish one of its two Monrovia offices, leaving one office in Monrovia town center for administrative convenience and one within the customs zone at the port. Two Liberian management trainees have been brought into the Managina Director's department in an attempt to facilitate centralized control. At present, however, Buchanan is largely independent of NPA; traffic at the ports of Greenville and Cape Palmas is nominal, and for most practical purposea,,NPA's time is directed to the management of Monrovia. It would appear to be in NPA's interests to avoid any further expansion of its headquarters staff and of their powers until such time as ports other than Monrovia assume greater importance in NPA's affairs. The objectives of training and advisory services provided under the project have reasonably been attained. However, middle management on the accounting and financial side appears to need further improvement.,particularly if present expatriate staff were to leave the Authority. In addition, some snanialized training would be necessary if automated accounting procedures were to be adopted as NPA at present t-nn+.imnlatas. Q- FutreA Prnqne--q fnm- Miberian Pn-rt-q 9.01 The delay in nrenaration of a comnrehensive develonment nlan for Liberian ports has made it difficult for NPA to anticipate its future invest- ment napn and tin nrovidA thA hAst qervinA to Tiberian indnstry. Monrovia- for example, has been ill prepared to meet the present glut of timber exports; anA ayruanqiva remadial work has bann nneareAn at Canp Palmn in the ahAnn of agreement as to the actual port needs of the area. 9.02 However, Terms of Reference for the Development Plan have recently been agreed with +4% Rml and pre-liJmJnMTry n-en.O a f"niltnt are11 -r% 2 expected during 1974, and final recommendations in 1975. 9.03 The results of a study of the Port of Greenville by a German 0JW-V n sn tm mission mae expectdA ta ok0ema %nAW ava4sa aml -41 4-TDIA w44-16 copyto the B .~ esselsare often unable - toJ. L . t LJ lle ba J. sIe copy to the Bank. Vessels are often unable to berth at Greenville because ~~.Ll.~~~ -4d. %-AUJ .L U -UIA-4G -JJ . LL L U .± VJ. V.u 4 ine Cape ralas breaKwaer ana jeLy are undergoing major repairs, ana improvements are being made ashore in order to keep the port in operation for coastal traffic. Larger vessels lie offshore. The contract for breakwater and jetty repairs was awarded to Raymond International (Liberia) in the amount of US$ 561,000 in January 1973, at a time when the total cost of repairs and improvements was estimated at US$ 800,000. The estimate of final cost is now US$ 1,200,000, largely because the work started on the basis of preliminary engineering. NPA's justification for this large expenditure is that it is obliged to maintain the existence of the port as a social service and because of its economic prospects. Consequently, although the proposal to repair the breakwater was referred to the Bank for comment, the decision to award the contract was taken without waiting for the recommendations of the Liberian port development study as the Bank would have preferred. 9.05 Development plans for Buchanan have been prepared by LAMCO but until agreement is reached between LAMCO and the Government, further private investment in Buchanan is unlikely. 9.06 Monrovia Freeport is functioning reasonably satisfactorily but access to the port is unsatisfactory and because timber is now regarded as a permanent export commodity, the provision of storage, handling and loading facilities for timber is planned. 9.07 With the prospect of iron ore exports from foreign sources through Liberian ports and of timber and timber products, some changes to the present pattern of Liberian port traffic may emerge from the port development study. The preliminary results of the study are expected to be available during 1974. Wocftv Af-rirn Ppainnnl Off-- Apil, l974 ANNEX 1 Project Expenditure Loan US$ or Lib. $ Category Total Foreign Local I Dredging 2,hho,1,5;l(,I(.UU 31,Uou.ju II Tug "Providence Island" 468,022.27 45o,022,27 10,000.00 Tug "Stocktom Creek" 675,144.54 665,144.54 10,000.01' --I Pilot Launch 73,232.70 60,232.70 5,000.UU= Navigational equipment 121,300.00 111,300.00 10,000.00/ Sub-total 1,337,699.51 1,302,699.51 35,000.00 Consultancy: 2/ Lyon's Associates Inc. 173,145.58 130,000.00 43,145.58 For dredging III Richard Taubler Inc. For tugs 9,421.96 9,421.96 - For launch 2,435.32 2,435.32 For navigational aids 1,500.00 1,500.00 - Muller Fox & Pennington For tariff study 27,683.00 26,997.57 685.43 Port Advisor and Financial Advisor 73,814.14 38,814.14 5,000.00 Sub-total 258,000.00 209,168.99 48,831.01 IV Consultancy for road 3/ -feasibility studies 233,747.40 193,747.40 40,000.00 Total 4,277,684.21 3,622,792.90 654,891.31 1/ Assessed local cost. 2/ Assessed foreign element of total costs all of which were paid in US$. / Assessed local contribution by the Ministry of Public Works to the study. This cost not identifiable in accounts. ANNEX 2 LIBERIA Port of Monrovia Dredging Project Schedule of Cumulative Disbursements in US$ Millions IBRD Fiscal Year Actual Appraisal New Disbursement Estimate and Quarter Disbursements Estimate at January 31, 197 1 1969/70 1 0.55 3 1.63 *.77 C L.UU 2 3.03 3.50 4 3.12 1971/72 1 3.17 2 3.21 3.60/ 3 3.22 4 ~3.21' 1972/73 1 3.25 2 3.27 3 3.27 4 3.27 1973/74 1 2 3.27 3 3.30 4 3.35 3.ho 1974/75 1 3.65 2 3.55 3 3.60 1/ Estimated disbursements assuming Bank contribution to port development .yLU) -L U-L L)J~~ UVJ -Lo- VL UU U.L u%A ANNEX 3 MONROVIA PORT TRAFFIC (000 Tons) 1969 1970 1971 1972 1973 (1) W_ () (2) (1) (2) (1) J2) (1)* (2) General Cargo 0 50 580 530 542 505 164 515 585 525 Fuel & Crude Oil 318 405 474 450 661 475 540 500 315 515 Iron Ore 9914 9950 12131. 9950 10658 9950 11250 11350 12600 11350 (1) Actual (2) Appraisal forecast (3) Excluding clinker * Based on 9 months data lZ.B1RIA Port ofrov a rred,,nFl Pret Fra,rort ar Monrvia Inore Acount n, at Deember 31 4Cch Ymr ($ '0 Monrovla Port Managerent Company National Port Authority -r J ^to June 30 ' ly i to ue-Jan 1 to June 30 1970 1971 1912 r92 173 1973 Proportionate Proportionate Proportionate Aoprasal ADraisal AporaitAl Appraisal Appralsal Budget Actuals Forec..sts I kAtou1 ForegstY Actua13 Forec_ts! Actuals Forecast ACtuals Forecaste stintes Ooeratin, Revenue Cargo-handling 1,31.6 857 1,291, 867 666 L39 58h b38 601 447 1,291 V.,arfage 577 53 883 156 Lhc 229 256 230 349 235 1,1:98 Harbo,r d-e 753 713 736 718 b 7:1 373 479 372 515 37 86 Iron or fee 668 - 697 78 85 37É b83 h69 484 ho5 lQ8,k Xa1aed Stora[e 288 225 311, 220 19., 110 136 110 167 112 22 Pilota,, mooring, berthing ord to~age 906 1.96 997 496 .7!. 21,8 512 248 561 248 1,020 ouer (r-sh water ales, equipment and land rentals, et,:.) 501 298 h94? 298 38' 1h9 155 169 193 1 9 L28 Aidtionil revenue from 27% increase In port. chrges - ,!5 - 782 - b13 - 113 - 123 - Total 5~u59 W 63 "32,91 2,6 2, 79 . 2, 72 5,362 0',rating En,enocs SAarve, wa,e and other staf expense 1,827 1,61h7 1,884 1,703 1,0! 886 918 885 656 926 1,297 Pers I r.trtenance (ecluding min- tenace d-edoing) ) hh4 ( 490 ( 170 ( 501 302 253 230 25 191 257 639 Pro4iston for ainte.nace dredging ) - ( - ( - ( 200 25 100 125 100 55 100 110 General c1.rges - Inrance 128 100 113 100 77 50 20 50 - 50 - Other 325 110 07 01 424 17. 58 174 11 180 • 117 Aloca,tion af ex:yediture on General 2 - - - 1 172 Ad',rnatt.an (Pe.dquarte - . - - - 553 E / - to-l - C-h o.t,oings ,7. F¯7 2,901 7-9w -713 --3 r1577F,513 3 Deore.ation on: A=ets tlr thtan original assetD (shown I thn co ny's accountD3 391 ) 696 445 693 3c0 318 319 319 36 ) 326 700 c-ir,al nas-etn (not sow. n the CO~ar.' accounts) 141) 11 - 71.. 70 ) - 71 i ho Allo,at.an of depreciation on Headqutrters ao"ot3 8 27 55 Ar r tation of dredging costs 151 288 202 2h4 111 loo 119 100 59 100 12 Total 3 o ~1 3,6c2 2¯ 1 2,151 12939 1.3o0 1,et ooeatngRevenue i.N Ï 1,771 -1 __ __o 562 726 533 9d2 Intere~t - Re- ,nu. 91 -91 -190 Ch-ge. 152 207 200 220 89 1 87 105 91 103 190 Other non-operating revenue - -- - 69 8 - 6 Let Income 1,500 ~3 1,57 -~67 ~~7~ 513 '157 731; 1.30 -BB 0Derating RAtlo (5) 67 87 67 82 78 77 83 77 74 78 82 Average Net Value of Fixed Assets In U-e 1,808 17,052 16,120 16,631 16,371 15,852 17,077 15,852 16,943 15,193 i6,943 Turnover (Oro-3s ODerating Rernue s5 % Of 34 21 31 28 18 15 15 15 16 16 32 Averady Iet Fixed AsOtt,i Ur 2e Return an Avera.e let Food Asset in Use (%) 11.1 3.3 11.0 5.0 3.9 3.5 2.6 3.5 1.3 Time Interent Charges covered by Net Ooerating Re-ue 10.9 2.7 8.9 3.8 7.2 5.3 5.1 5.3 8.0 5.2 5.2 Tixes Debut Service covered by cash generated rrom operations 4.4 2.7 3.9 2.6 6.6 5.1 1.8 1.7 6.6 4.8 2.6 Sourcex MPMC and NA forecasts and accounts an -difled by Bark misdone 1/ Shon in Appralsal Report as under NPA February 1124 LIBE3ILA lort of ionrovia Dredging Projec: Fre-ort >f monrovia Monrova Port Management Corvpny Balante Sheet ai at December 31 each cear ($ 000) 1970 1171 192' 1972 1972 Actua.i. Apprainal/ Actuels Appralsal/ Acul Appraisal Forecast.- Forecasta- Forecats • ASSETS Fied Asset, Gro.ø value incIuded In Co.'. a<count. 4683 89171 5140 9,0111 6120 91322! Gross value of original aosets not included tn Co.' acconts 15025 18151_ 15025 18151 15025 18151 Sub-total 197C8 27068 20165 27162 21145 27283 Less. Acculated depreielation on Assets other than original aiseto (shon~ in Co.'o account.) 2879 41411 3106 4.839 3301 5438 Original asset (not sho~n in Co.'s accounts) _103 5875 3244 6L13 3314 6351 Sub-total 131726 17052 13815 16210 14530 15494 Unaortized dredging costa j06251 2249 _-_ 2148 • Not Fixed Assett in vse 16177 17052 16064 16210 16678 15494 Work-in-Progresa J025 - 1160 1163 - Net FL-xd As4et. 17202 17052 17224 16210 17841 15494 Current Assets Inventorles 345 300 337 .300 323 300 Receivab-les and paymente in advance 1243 635 1054 635 1274 635 Ca.sh an.d Bank balances 2153 16911 1466 2750 1499 3841 Total 31741 2626 2857 3,685 3096 477.6 Leti: Current L,Iabilttieo Payale.s 200 37() 383 380 692 390 Pr .avsons 50 _60 m Total 250 37(k A43 101M Vet Current Assato .491 2256 2414 3305 2065 4386 Total Net Asacts ,2693 19308. 1968 19515 1990680 CAPITAL AND LABILITIES Lonrg-term Debt Duo to Covernneent of Liberi* Port Debt of United Stat. 17810 17341 17435 16973 17435 16598 Advarces In respect of IBRD Loan ._I034 3335 860 .3100 2876 3125 Total 20344 2068: 8293 20273 20311 1 Equity Equivalent (Deficit) .L15) (1375) 1343 _583 (405) 157 Total Capital and Liabilitie, 2C693 930E 19431 19<15 19904 19080 Ratio of Current A.set. to Carrnt Liabilitie. 15.0 7-1 6.4 9.7 3,0 12.2 Ratio of Liquid Assets to Current LiabilLties !3.6 3 3.7 8.9 2,7 11.5 D'ebtIEquity Ratio 10/0 lo/0 93/7 1.00/0 10010 99/1 Source: MPKC and IPA forecaet. and ac.ount as modified by Bank miggion, 11 Shon in Appra.al Report under NPA 2/ Includes gros. aount of dredging cos February 1974 LIBERIA Port of Monrovia Dredging Prolect Companies/National Port Authori-t Consolidated Income Account for all ports as at December 31 each year (S '000) Jan. 1 to June 30 19710 1971 1972 19173 1973 Actuals Appraisal Actuals Appraisal Actuals Appraisal Actuals Proportionate Budget Forecasts Forecasts Forecasts Appraisal Estimates Forecasts Operating Revenue Port of Monrovia 5059 4193 5466 4682 5597 4888 2794 2472 5362 Port of Greenville 275 58 330 120 375 ) 125 264 ) 65 367 Port of Caoe Palmas (Harper) 306 ) 281 ) - 235 ) 121 ) 293 Total 5640 4251 6077 4802 6207 5013 3179 2537 6022 'peratiie Eipenditure Port of Monrovia 2724 2647 2904 2908 3514 2926 1547 1513 3365 Port of Greenville 187 ) '5 209 ) 95 199 100 142 ) 52 314 Port of Cape Palmas (Harper) 407 ) 334 ) 204 113 ) 115 Sub-total-Cash outgoings 3318 2692 3447 3003 3917 3026 1802 1565 3794 Depreciation & Amortization Port of Monrovia 683 984 788 937 998 837 521 426 1015 Ports of Greenville and Cape Palmas - 153 - 306 48 306 66 153 130 Total 4001 3829 42:35 4246 4963 4169 2389 2144 4939 Net Operatitq Revenue 1639 422 1842 556 1244 844 790 393 1083 Interest Revenue - - - - 132 - 91 - 190 Charges 152 320 200 388 176 340 91 159 190 Other non-operating revenue - - - - 69 - 8 - 6 Net Income 1487 102 1642 168 1269 504 798 234 [089 Operating Ratio (7.) 71 90 70 88 80 83 75 84 82 Turnover (%) - - - - 33 23 17 24 33 Return on Av. Net Fixed Assetsin use (1) - - - - 6.5 3.9 4.3 3.8 5.9 Ti,es Interest Charges covered by Net 10.8 1.3 9.2 1.4 7.1 2.5 8.7 2.5 5.7 Operating ,evenue Times Debt Service covered by cash generated from operations 4.4 1.3 4.0 1.1 3.2 1.7 7.3 1.6 2.9 Note: The managemantiof Ports were taken over by NPA as under: Monrovia: July 1, 1972 Greenville: January 1, 1970 Cape Palmas: October 1, 1972 Source: Company and NPA forecasts and accounts as modified by Bank missions LIBERIA Port of "onrovia Dredging Prn'p+. AMNEX 7 National Port Authority Balance Sheet as at Dece-ber 31 each year -(us~ 5 'oooj Jul.1 to Jan.1 to Jan.1 to Jan.1 to Dec.31 Dec. 31 June 30 Dec. 31 1972 1972 1973 1973 Au tua's Ap san f Acl. A n -4? -I Forecasts Forecasts ASSETS Fixed Assets Port. of Monrnvin Gross value 12085 27283 19187 27533 Accumulated depreciation 6254 11789 6818 12641 Sub-total i283a 1>4, Yz3o. 1le Unamortized dredging costs 46- 6012 - Net FixedAssets in use 17176 1 3TT? .16 11 17U92 Port of Greenville Gross value 967 ) 967 ) Sub-total 919W Unamortized dredging costs 112 ) 112 ) Net Fixed Assets in use 1031 ) 99 ) Port of Cape Palmas ) ) Gross value 211 1 QAT% 911 1 O300 Accumulated depreciation 16 ) )80 Net FSxed Assets in use 1 ) 2 181 Headquarters ) ) Gross value 531 ) - 531 ) - Accunulated depreciation 251 1 - 282 ) - Net Fixed Assets in use M ) 29 Work-in-Progress 3921) 6115 ) Current Assets Inventories 311 300 425 300 Receivables and payments in advance 1092 635 1690 635 Cash and Bank balances 3A6 2291 1.155 2730 Total 2796270 3674) Less Current Liabilities Payables 449 ) 3Q0 479 ) 400 Provisions 218 ) 156 ) Total 7 __o_ Wo-t Current Assets h2 27 5 327 Total Net Assets 23972 2FO2 2 7 23662 CAPITAL AND LIABILITIES Long-term debt due to Government of Liberia Port Debt of United States 17060 16598 17060 16223 Advance in respect of IBRD Loan 3009 3125 3177 2935 Greenville and Harper Port debt - 2104 - 1800 Total 20069 21827 20237 20958 Equity Equivalent 32235 h37 2704 Total Capital and m-itimms 2h 57 23am- Ratio of Current Assets to Carent Liabilities 7.9 8.1 9.9 9.2 Ratio of Liquid Assets to Curen+ T44i444es 7 I. 7 0. I. Debt/Equity Ratio 84/16 91/') 82/18 89/11 Source: NPA forecasts and accounts as modified by Bank missions February 197 LIBERIA NATIONAL PORT AUTHORITY BOARD OF DIRECTORS GENERAL MANAGER COMPTROLLER DIRECTOR OF CENTRAL SERVICES PORT DIRECTOR Chief Accountant Personnel Chief Administrative Security Port Managers Officer Engineer Officer Chief (Monrovia, Greenille, Cape Palmas) FinancialF Adviser 1 Management Port Harbour Operations Administrative Equipmert Control Unit Security Master Manager Superintendent Maintenance Officer Officer l IRERIA TRANSPORT FACILITIES MAP 1 iI S i E R R A Kolh un L E O N EKa hnG N F A LEON I A R C CA EL | ~ I N EÅLocatRon of L,berta zo IVI r MONROVIA 0 R Yor-.-- nu The /r,.., n) i PoNhod ~ ,,., O ~, PolBuchon GO s . 'al LA VO rATI0 KoblD,b Hard.suface (bitumInous) Loose surface (laterite) c - -P---- - o rgram-ed and or un de r survey BN - - -n -mz - -- -:iT.fi G n Raiway Koto. H.rper(Cop o NOVEMBER 1968 IBRD 1803R  V I A0O1NOW dO.'ý1< ~ b,3 ~i~j 13* ,11.1,/ WSId ~ II00 Z d