Senegal - Dakar International Airport Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1820 PROJECT PERFORMANCE AUDIT REPORT SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) December 13, 1977 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.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) Table of Contents Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEET HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Introduction 1 II. Points of Special Interest 1 III. Conclusions 4 ATTACHMENT: PROJECT COMPLETION REPORT 1. Summary and Conclusions A.1 2. Background A.3 3. Project Implementation A.4 4. Financial Performance A.11 5. Economic Evaluation A.14 6. Economic Return A.15 Annexes 1. Description of the Project 2. Bid Results - Civil Works Tables 1. Schedule of Principal Covenants and Commitments on Loan 867-SE and Relevant Agreement and Side Letters 2. Schedule of Disbursements 3. Summary of Actual Disbursements 4. Cost Evaluation 5. Profit and Loss Account 6. Proforma Cash Flow Statement 7. Calculation of Net Fixed Assets 8. Air Traffic Development 9. Employment at Dakar Airport Map 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.  PROJECT PERFORMANCE AUDIT REPORT SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) Preface This is a Project Performance Audit Report on the Dakar Inter- national Airport Project in Senegal, for which Loan 867-SE for US$3.0 million was closed, fully disbursed, in June 1976. The report consists of a Project Performance Audit Memorandum prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) pre- pared by the Transportation Department. The memorandum is based on the PCR, discussions with staff members and findings of an OED mission to Senegal. The transcript of the Executive Directors' meeting of November 28, 1972 has been read, and the project files have been reviewed. The audit agrees in most respects with the PCR, but questions certain aspects of the methodology for the economic justification used in the appraisal and adhered to in the PCR. This report represents the first audit by OED of a project in the aviation sector.  PROJECT PERFORMANCE AUDIT BASIC DATA SHEET SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 4.0 4.8 Overrun (%) - 20 Loan Amount (US$ million) 3.0 3.0 Disbursed ) 3.0 3.0 Cancelled ) 0 0 Repaid to ) 0 0 Outstanding to )- 2.9L- Economic Rate of Return (%) 15 17% Financial Performance Good Institutional Performance Good OTHER PROJECT DATA Original Actual or Item Plan Revisions Est. Actual Government's Application 9/70 Negotiations 10/72 Board Approval 11/28/72 Loan Agreement Date - 12/19/72 Effectiveness Date 3/30/73 5/22/73 Closing Date 6/30/76 6/30/76 Borrower Republc of Senegal Executing Agency ASECNA-- Fiscal Year of Borrower Calendar Year Follow-on Project n/a MISSION DATA Date Month/ No. of No. of of Full Item Year Weeks Persons Manweeke Report Identification 9/70 - - . Appraisal 3/72 2 3 6 11/72 Supervision I 2/73 1 2 2 3/5/73 Supervision II 1/74 1 1 1 1/24/74 Supervision III 7/74 1 1 1 7/31/74 Supervision IV 2/75 1 2 2 3/26/75 Supervision V 7/75 1 1 1 8/7/75 Supervision VI 11/75 1 2 2 12/22/75 Supervision VII 5/76 1 1 1 6/18/76 Supervision VIII 7/76 1 1 1 8/9/76 Total 10 17 COUNTRY EXCHANGE RATES Name of Currency CFA franc (CFAF) Year: 1972 Exchange Rate: US$1 = CFAF 256 Average for project US$1 = CFAF 214 1976 US$1 = CFAF 236 /l After exchange adjustment of -$0.1 -m. /2 Agence pour la S6curit6 de la Navigation A6rienne en Afrique et a Madagascar.  PROJECT PERFORMANCE AUDIT REPORT SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) Highlights Under this project, the Bank helped to finance the extension of the runway of Dakar's international airpoit and some related works, as well as the extension of parking aprons. The enlargement of the pas- senger terminal formed part of the project, but was entirely financed by the Government. The project aimed at making the airport suitable for large aircraft which were being put into use, thus enabling Senegal to maintain its position as staging point for transatlantic flights and stimulating economic development. The project was successfully implemented. The quality of the work was good. The civil works were carried out by a foreign/local joint venture, but completion was delayed due to less than satisfactory perform- ance of a local contractor. So far traffic developments have been close to the appraisal forecast, and the audit has estimated the ex post econ- omic return at 17%. Points of particular interest are: Satisfactory traffic development (paras 5-9; PCR, para. 5.1); high cost of supplementary financing by commer- cial banks (para. 17; PCR, paras 3.31-3.32).  PROJECT PERFORMANCE AUDIT MEMORANDUM SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) I. Introduction 1. When the project was identified, Dakar's airport was used by the largest types of aircraft then in commercial service. Facilities were adequate but the largest aircraft could not always take off with a maximum payload, even though this loss was apparently minor. Traf- fic consisted of flights linking Dakar with Europe and various points in Africa, but also longer distance and transit flights from North America via Dakar on to other points in Africa, and flights between Europe and South America, which stopped in Dakar. With the introduc- tion of larger aircraft (DC 10 and B 747), neither runway length nor terminal facilities would have been adequate to continue handling this traffic. 2. The Bank recognized the desirability to maintain Dakar's position as a staging point for international flights. Through a loan of US$3.0 million equivalent, it assisted in financing the extension of the runway and some related works, as well as the extension of the park- ing aprons, at a total cost of US$4.8 million. Extension of the pas- senger terminal formed part of the project, but was entirely financed by the Government. 3. The airport is operated by ASECNA 1/, a regional organization which operates most airports in French speaking parts of Africa. ASECNA also carried out the design and construction supervision. As fully de- scribed in the attached PCR, implementation of the project was success- ful and presented no major problems. The audit agrees with the PCR, ex- cept for reservations on the economic justification, which are discussed below. II. Points of Special Interest 4. In the case of the Dakar Airport Project, there were no ex- ceptional technical problems to be solved. Of special interest, however, are the difficulties encountered in arriving at satisfactory traffic fore- casts and the economic justification for the project. Comments on the Traffic Forecast 5. Without the project, airlines starting to use large aircraft for their transatlantic flights which stopped in Dakar would have needed to divert their flights to airports which had adequate facilities. This would have reduced Dakar's position as a potential regional center and might have adversely influenced tourism development. However, there was no guarantee that after providing the facilities required for large air- craft, these would start to use Dakar. On the basis of availability of 1/ Agence pour la Securite de la Navigation Aerienne an Afrique et a Madagascar. -2 - traffic to and from Dakar, or costs, large aircraft might have preferred to make another airport their stopping point for transatlantic flights. Furthermore, the introduction of the large aircraft depended on overall traffic demand on the entire route, but also on traffic rights to be nego- tiated between countries. 6. In 1975, landings by large aircraft numbered 789, and in 1976 this went up to 1037. These figures include stopovers by Concordes, which also require the longer runway. At about the same time, however, the airline operating Concorde flights cut down on the number of landings of B 747's in Dakar and started to use the airbus for traffic between Dakar and France. This change was reportedly based on traffic rights to and from South America and cost considerations. 7. Several airlines are in the process of negotiating additional traffic rights with South American countries. Amongst these is at least one airline which now does not serve Dakar. Continued growth of the num- ber of large aircraft to be used on the South America route can therefore be expected, but whether all these flights will stop in Dakar will depend on many factors. The prospects are enhanced, however, by the rapid growth of tourism in Senegal and also by the increasing volume of fruit and vege- table exports to European markets. Both these traffics are now handled by charter as well as scheduled flights. 8. No large aircraft have been introduced yet on the North Atlantic route. These would stop in Senegal and continue to other African countries with whom the landing rights have not yet been settled. Based on the traf- fic demand, however, it appears that the use of large aircraft on this route will develop more slowly than anticipated at the time of appraisal. 9. So far traffic growth has been close to the appraisal forecast, but too little time has elapsed after completion of the project to judge whether the appraisal forecast of 2100 landings by large aircraft in 1981 will be met. However, there is some evidence that of the large aircraft traffic, the proportion of the heaviest types (B 747) will be smaller than anticipated at the time of appraisal. Revisions of the Economic Evaluation 10. The PCR estimates the economic return at 20% against 15% ex- pected at the time of appraisal. As explained in the PCR, the economic return of the project was based on (a) the increased income from landing fees with the use of heavier aircraft, (b) the added value of increased sales of fuel supplied to larger aircraft, and (c) the increased expend- iture in Senegal of the larger flight crews on stopovers. In all cases, the difference between aircraft in use and large aircraft was used (see also PCR, Section 6). 11. On the first and the last points of the economic return cal- culation, the audit agrees with the values used in the PCR for 1975 and 1976. However, the assumption used in the PCR that traffic would show no further growth appears overly conservative and is more cautious than - 3- the appraisal report. In the recalculation of the economic return, the audit mission has used the same assumption as in the appraisal report (i.e., no further growth after 1979), while assuming a lower average weight per aircraft, based on current developments. 12. The audit mission found that the benefits derived from the sale of additional fuel require some modification. The appraisal and the PCR assumed that most of the aviation fuel would be refined by an existing refinery in Dakar. The added value was taken as the difference between the ex-refinery cost and the marginal production cost, on the assumption that the refinery had spare capacity for the production of aviation fuel. The added value between the refinery and the aircraft was not quantified. 13. In 1976, the refinery in Dakar was expanded and total demand for aviation fuel is expected to exceed the new refining capacity in a few years' time. Further expansion of the total refining capacity in Senegal - possibly through construction of an additional refinery - is now under consideration. The rapidly growing demand for aviation fuel has apparently been a factor in the decision to expand in 1976. The present production capacity for aviation fuel is not fully utilized, but the spare capacity about equals the quantity of aviation fuel now imported. Reportedly, a major reason for not increasing production is that it would lead to extra gasoline output also, for which there is no market. It ap- pears that the existing spare capacity for aviation fuel would be used up in the near future, even if transit flights would not increase after 1976, as assumed in the PCR, because, presumably, as the local demand for gas- oline would grow, more aviation fuel would be produced to reduce imports. Besides, demand for aviation fuel for flights which terminate in Senegal will continue to grow as tourism and local exports assume more importance. 14. From the above, it is evident that the marginal cost concept is difficult to maintain, which implies that the production of aviation fuel has to be charged with its full share of fixed cost and amortization of the refinery. This reduces the added value per ton considerably. The cal- culation of a new figure for added value will be quite complex and did not appear justified - if at all possible - for the purpose of the audit. In the revised economic return calculation, it has been assumed that the proc- ess of refining fuel and delivering it to aircraft generates an added value of US$5 per ton. This estimate is probably on the conservative side. 15. Using the same basic methodology as in the appraisal, but with value adjustments based on the findings of the audit mission, the project would have an ex post economic return of 17%. If landings by large air- craft would show no further growth, the rate of return would still be 13%. 16. The appraisal report mentioned that the provision of additional carrying capacity resulting from the use of larger aircraft would benefit the exports of fruits and vegetables and the development of tourism. No attempt was made to quantify these benefits. Both types of traffic have grown considerably. Specially in the case of vegetables, extensive use is made of charter aircraft. Fruit and vegetable cultivation was supported by the Bank Group through IFC participation. A credit to further develop tourism was recently granted, but the number of tourist nights in Senegal had already increased by 170% between 1972 and 1975. Where constraints in hotel capacity were reduced, fruit and vegetable exports stimulated, and larger aircraft introduced almost simultaneously, it is difficult to determine direct relationships. However, the use of large aircraft has definitely had a positive influence on the aforementioned economic ac- tivities. Financing of Cost Overruns 17. Cost overruns were predominantly caused by inflation and cur- rency realignments. To cover the increased requirement for local funds, the Government borrowed about US$1.3 million equivalent from the National Development Bank of Senegal for a period of 7 years at 11.47% per annum. This burden was passed on to ASECNA, but present revenues of the airport are sufficient to cover the extra financial requirements (PCR, para. 3.32). Both the Government and ASECNA would have preferred a supplementary loan and were rather unhappy that this was not arranged. Considering, however, that supplementary loans were made only in exceptional cases, this project did not appear to have high priority. III. Conclusions 18. The project has been successful. It has been completed with only minor delays, and the quality of the work is good. Due to inflation and currency realignments, cost increases occurred which the Government had to finance. The Government was rather unhappy with the Bank's rigid attitude in not providing supplementary financing. However, considering the Bank's policy to do this only in exceptional cases and the healthy financial situation of Dakar's airport, the decision seemed reasonable. 19. The economic reevaluation is tentative. On the basis of only two years' experience after completion of the project, it is too early to judge the validity of the traffic forecast, but there is no reason yet to assume major differences from the original forecast. The audit mission has recalculated the economic return which at 17% is slightly lower than the PCR ex post return of 20%. This is because the audit mission assumed lower benefits from fuel sales than did the appraisal and the PCR. 20. In spite of the reduced economic return, the project can still be considered a success, especially where in addition to the benefits used in the economic evaluation, substantial benefits are derived from vegetable exports and tourism, which could not be quantified, but are partially re- lated to the improved airport facilities. ATTACHMENT SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT 1. SUMMARY AND CONCLUSIONS 1.1 The objective of the project was to insure that Dakar-Yoff Airport could continue to exploit its favorable location as an important staging point for long range flights by providing improvements to its passenger handling facilities and airside improvements to enable newer and larger long range jet aircraft to operate economically to and from Dakar. 1,2 At the time of appraisal the project included (i) lengthening the existing runway from 2900 m to 3550 m; (ii) extension of the runway lighting; (iii) construction of two additional aircraft parking positions; (iv) relocation of the instrument landing system; (v) relocation of a road to allow for the runway lengthening;and (vi) the provision of consulting services. The Govern- ment of Senegal undertook to provide complete financing for the necessary facilities to accommodate passengers and to acquire the necessary land. 1.3 The project financing was changed during the loan period in that funds were not disbursed against the purchase and installation of the lighting equipment, but were used solely for the civil works and consultancy services. 1.4 Other changes in the airport investment plan, but not in the project, included deferral of a major overlay of the runway surface from 1975 to about 1979, the construction of a new cargo building to meet increasing demands and financed by the users, and the construction of a new flight kitchen to provide e oetter preparation service for inflight meals. 1.5 - The civil works of the Bank-financed portion of the project began about one year later than expected and was completed about six months later than the appraisal schedule. The effect of the delays on aircraft operations was not particularly serious but the execution of the civil works coincided with the devaluation of the US dollar and inflationary pressures in Senegal. As the proceeds of the loan were inadequate to finance the amounts originally contemplated, Senegal was forced to borrow additional funds 'at a higher rate of interest. In financial terms, this was not serious due to the airport's revenue potential but it did create the problem of satisfying the Government that the Bank could not, and should not, make up the deficit caused by the foreign exchange fluctuations. - A.2 - 1.6 The civil works were carried out by a consortium of a Romanian and a Senegalese firm. The performance of the Romanian firm was excellent. Un- fortunately, the Senegalese firm did not execute its part of the work satis- factorily. The same Senegalese firm executed the terminal building works on behalf of the Government and again their performance was poor as the work took longer than expected. 1.7 The consultants carried out the design and supervision of the project satisfactorily and there were no significant problems. The major share of the supervision of the project was carried out by Senegalese engineers and technicians and their performance was very good. The project provided them with valuable experience and training. 1.8 The costs of the project overran the appraisal estimates by approx- imately 6%, after adjustment for taxes (about US$308,000). Price escalation during the execution of the project, based on application of price adjustment formulae, amounted to about 24% of the total cost, or about US$1,051,000. The proceeds'of the loan financed about 62% of the total cost compared with 86% estimated at the time of appraisal. 1.9 As noted above, the objective was to retain and strengthen, at a critical transition period between aircraft types, the ability of the airport to cater to larger, long-range aircraft. This has been achieved and transit passenger movements through Dakar are in line with the appraisal forecasts. However, the appraisal and loan approval took place prior to the energy crisis when the airlines sought to compensate for higher fuel costs by greater efficiency in aircraft utilization and route planning. As a result, the number of larger wide-body aircraft is slightly lower than anticipated. On the other hand, total aircraft movements, as well as cargo and passenger movements to and from Dakar,have increased more rapidly than anticipated. 1.10 The Bank's participation in this project was well justified. Guidance was given with respect to the size and timing of the overall investment pro- gram under rapidly changing conditions and while outwardly not spectacular, the result is an operationally and financially sound airport which, with continued good management, should continue to prosper. Related effects include the opportunity to increase foreign exchange earnings and the increase of opportunity for employment at the airport, in a selectively labor intensive sector, from common laborer to highly skilled positions. It might be noted that out of a total of 695 ASECNA employees at the airport, the number of expatriates employed in skilled jobs has been reduced from 53 to 13 during project execution (1972-76). 1.11 The financial and economic performance has been very good with an overall return on net fixed assets, as well as an economic rate of return as high as 20%, even with no growth in benefits after 1976. - A.3 - 2. BACKGROUND 2.1 The Government of Senegal requested the assistance of the Bank in financing improvements to the Dakar-Yoff Airpcrt in September 1970 and the Bank approved a loan in December 1972 for that purpose. 2,2 The project was prepared by the Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar (ASECNA) and was based on a study carried out by ASECNA in May 1971. This material was reviewed by the Bank and the project was based on (i) additional information supplied by the Government and ASECNA; (ii) the findings of a preappraisal mission in November 1971; and (iii) an appraisal mission in March 1972. ASECNA is a multinational agency of 13 African States and France set up to control air navigation and to operate airports and other air services, as agreed between ASECNA and the countries concerned. The Dakar airport is operated by ASECNA under such an agreement with the Government of Senegal. 2.3 The project was designed to enable the airport at Dakar to handle the larger, long-range jet aircraft and thus exploit its favorable location, and expand its role, as a staging point for flights between Europe, Africa and South America. The then existing runway and aircraft parking apron were inadequate to meet the demands of long-range aircraft. The apron was not large enough for the number and size of aircraft and repairs were needed to improve its bearing capacity. The runway required lengthening to meet takeoff requirements for the new larger aircraft, particularly for flights to South America. 2.4 The project was divided into two parts. The part financed from the proceeds of the loan included aircraft parking apron improvements, lengthening of the runway from 2900 m to 3550 m and additional runway light- ing. The lengthening of the runway necessitated the diversion of part of the road between the airport and the city of Dakar, which was also financed from the loan. The second part of the project, carried out and financed by Senegal, involved the acquisition of the land necessary for the project and improvements to passenger handling facilities. 2.5 Total project expenditures at the time of appraisal were estimated to be CFAF 1025 million for the Bank-financed portion and CFAF 500 million for the terminal building expansion. ASECNA acted as design consultants and also supervised the construction of all works. Costs for these services were included in the cost estimates above. The airport is managed and operated by ASECNA on behalf of the Government of Senegal and, in view of the experience and high quality of this organization, no funds were provided for training and management studies or other assistance. 2,6 The main covenants and targets provided for under the loan and project agreements, together with comments on their achievement are listed in Table 1. - A.4- 3. PROJECT IMPLEMENTATION Project Composition 3.1 Implementation of the project followed, essentially, the assigned plan which is described in more detail in Annex 1. Modifications to the plan are also described. In addition to the two aircraft positions contem- plated under the Bank loan, repairs were made to apron concrete slabs and two positions were enlarged to allow larger aircraft to be bandled. New apron lighting was provided and repairs were made to the ta)way and runway. The runway repairs effectively deferred a major overlay of the runway from 1975 to 1979 or later. ASECNA elected to install a new localizer instead of relocating the old equipment as originally planned. 3.2 In 1971 and 1972 the Government carried out minor investments for air freight terminal improvements and engine blast protection along the edge of the runway. The freight terminal was hopelessly inadequate and a much larger unit, reviewed with the Bank, was completed in 1975. The terminal modifications led to the consideration of a new flight kitchen for the prepa- ration of airline in-flight meals. This added investment was also reviewed by the Bank and was completed in 1976. The design and construction of the flight kitchen and the air freight building were, in part, financed by the Government and are excellent revenue producing units. Timing 3.3 The execution of the project was delayed beyond the expected completion date of June 1975, estimated at the time of appraisal, to April 1976 when all work was fully complete and operational. However, parts of the project were taken into use as they became available. The runway ex- tension was in limited use by July 1975 and one of the parking positions was usable by November 1975. The installation of the lighting equipment and the localizer, carried out by ASECNA, was not entirely completed and checked out until April 1976. The main factor contributing to the delay was the priority given by the Government to the terminal work which had the effect of delaying tender calls for the project civil works. 3.4 The loan and project agreements were signed on December 19, 1972 with an effective date of May 1973 and an expected completion date of June 1975. Contrary to expectation the Government elected to give priority to the design and construction of the terminal building alterations and there was a delay in the preparation of contract documents for the work in the Bank- financed portion of the project. Consequently, an order to proceed was not - A.5 - issued for the civil works until May 1974 with the work to be completed by February 1975, according to the contract terms. Due to the inability of the Senegalese contractor, Sylla, to carry out his obligations, the Romanian partner in the consortium was not able to proceed as quickly as planned. The Romanian firm, Contrasimex, had to take over practically the entire project. The work could easily have been completed in February 1975 under normal cir- cumstances. The contributing factors were Sylla's failure to carry out its portion of the work and the Romanian desire to go to great lengths to maintain good relations resulting in a failure to take the work out of Sylla's hands until the situation became intolerable. The civil works under the project were consequently not completed until November 1975. 3.5 The installation of the lighting equipment and the localizer was delayed further due to reassignment of the ASECNA crews to other work pending completion of the civil works. The loan was fully disbursed in January 1976. With the exception of the localizer, the new facilities were fully operational in January 1976, at which time the Government held inaugural ceremonies. 3.6 Insofar as the airport operations were concerned, the project was timely and has met its objectives. Procurement 3.7 International competitive bidding was used for the civil works contract in accordance with Bank guidelines. The procurement of the lighting equipment was negotiated by ASECNA as part of its bulk procurement for all airports under its jurisdiction for purposes of standardization and price. The bidding procedures presented no problems and the results of the bidding are given in Annex 2. All contracts were with ASECNA, acting as agent for the Government. Design and Construction Supervision 3.8 The design of all works was carried out by ASECNA on behalf of the Government. The designs and tender documents were reviewed by the Bank. ASECNA also supervised all construction work. In this respect it should be noted that the field supervision was ably carried out by Senegalese engineers under the .general direction of ASECNA headquarters personnel in Dakar. Construction 3.9 In general, there were no outstanding construction problems except that local rock materials could not be used for aggregate as expected. As a result, suitable aggregate had to be obtained elsewhere at an increased cost. - A.6 - 3.10 The bids for the civil works were opened January 8, 1974 and it was expected that a contract would be awarded quickly with work starting in May 1974. However, the Government spent considerable time in further investigating the low bidder and the contract was not signed until April 30 with the contractor given 45 days for mobilization. It appears that other bidders attempted to have the low bid set aside in order to award the work to French firms established in Senegal. The Government decided that it would proceed with the low bid as agreed during the mission of January 1974, and an order to proceed was issued to a consortium of Contrasimex (Romania) and Sylla (Senegal) in May 1974. 3.11 Work actually started on June 22 with the Senegalese partner in the consortium beginning work on the road diversion and collecting rock for aggre- gate on the airport. There was a delay in clearing Contrasimex's equipment through customs. New equipment was purchased in several countries and some came from Romania. 3.12 As noted above, the civil works portion of the project was awarded to a consortium of Contrasimex of Romania and Sylla, a Senegalese firm. In effect, Sylla was to do the earth moving and Contrasimex was supposed to look after fine grading and paving operations. Due to Sylla's failure to carry out their share, Contrasimex was obliged to do more than 85% of the work. 3.13 Performance of Sylla, the Senegalese partner, was not satisfactory on this contract. Although Sylla had done some road work, the company was not properly mobilized for heavy earth moving and was also overextending its re- sources over too many contracts. Sylla was the contractor for the terminal building extension, which took almost twice as long to complete as expected. 3.14 Although not in the project, it might be noted that the Senegalese contractor for the flight kitchen also took more than twice the allotted time to complete their contract. 3.15 The airport remained fully operational throughout the project and the works were carried out with a minimum of interference to aircraft and passengers. Costs 3.16 The major problems encountered were the devaluation of the US dollar and inflationary pressures following the oil crisis. The rate of exchange at the time of appraisal was 255.79 = US$1. Actual rates of ex- change during disbursement varied between 236.45 and 199.73 and averaged about 213.86. As a result, Senegal was required to finance a larger portion of the project than anticipated and this was a matter of considerable concern to the Government. - A.7 - 3.17 The effect of inflation was not particularly serious in the early days of the civil works contract but during 1975 the price revisions, based on the formulae in the contract, were significant. Overall, cost escalation amounted to 25% of the total civil works cost. As noted above, the loan was approved in December of 1972 but the first disbursement was not made until September 1974, 21 months later. The delay resulted in the work being carried out at the time of the lowest exchange rates and when inflationary pressures began to be felt in Senegal. 3,l8 The total cost of the works, for the part of the project financed by IBRD, was estimated at 1024.8 million CFAF at the time of appraisal. Allowing for estimated taxes the net appraisal estimated cost was 960.9 million CFAF. The actual net of tax cost was approximately 1028.7 million CFAF, of which 641.6 million was financed by the IBRD and 387.1 million was financed by Senegal. Price escalation costs of 242.8 million CFAF, included in the above total, played a significant role in the cost overrun. The price contingency amount estimated at the time of appraisal was 41.8 million CFAF. Additional works carried out by ASECNA in the amount of CFAF 18.6 million brought the cost to about CFAF 1047 million. 3.19 The project was appraised on an "all taxes included" basis and these taxes were estimated at the time of appraisal at a value of US$250,000 (CFAF 64.0 million). The Government elected to proceed with the project civil works on a tax exempt basis and thus an allowance must be made when comparing the appraisal cost figures with the actual costs. 3.20 At the time of appraisal and based on tax inclusive contracts, it was anticipated that the proceeds of the loan would finance about 86% of the total cost. Due to inflation and the devaluation of the US dollar, financing from the Bank loan covered only 62% of the total cost. 3.21 The Government of Senegal, on the advice of ASECNA, took advantage of the presence of the paving contractor to carry out additional paving work on the airport, mainly repairs to the runway and parking apron with some improvements to the drainage system. This additional work cost approximately CFAF 18.6 million and was wholly financed by Senegal. This additional work was the reason that the contractor did not fully complete all his project work until December 1975. 3.22 A summary of cost data and comparison with the appraisal cost estimates is given in Table 4. - A.8 - Comparison of Disbursement Schedules 3.23 The appraisal mission took place in March 1972 and the project was presented to the Board on November 15, 1972. The loan became effective on May 22, 1973. 3.24 At the time of appraisal it was planned that final engineering and the preparation of contract documents would be completed in time for a tender call immediately after the loan approval. However, the Government elected to give priority to the terminal building which required considerably more engineering and architectural input as well as construction time. As a result, the contract drawings for the runway works were not completed until late in the summer of 1973 and the civil works contract was not awarded until May 1974. The disbursement schedule thus suffered a dislocation of some 15 months with the first disbursement in September 1974 instead of June 1973. The rate of disbursement by quarter from September 1974 to December 1975 correlates closely with the rate originally estimated. The change in the schedule is therefore due to the delay in project initiation and not in the actual construction phase. Although the contractor did not meet his schedule for completion, the majority of the work was completed by June 1975 and the loan was fully disbursed by January 1976, only seven months behind schedule. A comparison between the appraisal and the actual disbursement schedule is shown in Table 2. 3.25 As the rate of exchange between the US dollar and the CFA franc varied considerably during the project period, this had an effect on dis- bursements and the amount of the project cost actually financed by the loan. A summary of actual disbursements is given in Table 3. 3.26 The decision to give priority to the terminal was correct from an engineering point of view due to its complexity but the runway and apron were of greater initial benefit for operations. The problem could have been more carefully examined in establishing the disbursement schedule. Major Problems 3.27 Four problems arose during the course of the work. These were the delay in inviting tenders for the civil works, the delay in awarding the con- tract, the failure of the Senegalese partner in the consortium to carry out his part of the contract expeditiously and the effect of the devaluation of the US dollar on the added costs to Senegal. All of these contributed to the major significant financing shortfall which had to be made up by the Government. 3.28 The end result of the delay in inviting bids and awarding the con- tract was not serious when compared with the appraisal report as the extended runway was usable by June 1975 as expected and the parking portions were made available shortly after. The main delay was in the installation of the lighting equipment and the installation of the localizer. As temporary night lighting was provided and the existing localizer was still in use, aircraft operations were not hindered. - A.9 - 3.29 In retrospect, the Government's decision to give priority to the terminal building was correct since the construction was very slow. In spite of the priority extended the improved passenger handling space was not available until January 1976. 3.30 However, it will be seen from Table 3 that if the work had pro- ceeded as originally planned at appraisal the project would have become available for use at a much earlier date (assuming the contractor's per- formance would have been equal or better), the rate of exchange would have been more favorable to Senegal and inflationary pressure would not have been so serious. 3.31 The rate of exchange fluctuations created considerable problems for the Government and forced it to arrange a loan from the National Bank for an additional CFAF 282 million at 11.47% for seven years. 3.32 When it became clear that the loan amount would not be sufficient to finance the amount of the project costs originally planned, the Govern- ment requested, through ASECNA, that a supplementary loan be considered. This request was made when the value of the-dollar was decreasing. The Bank's position at the time was that the Government, under the conditions of the loan agreement, was responsible for any effects of inflation and there- fore it was highly unlikely that any supplementary financing could be con- sidered. As a result, the Government made arrangements for the additional funds to be borrowed through the National Development Bank of Senegal (BNDS). This additional debt burden was viewed by the Government and ASECNA as a major problem provoked by the Bank's lack of accommodation. In the light of the revenue generated by the airport, it might be felt that the problem was somewhat over-emphasized. Nevertheless the Government was disturbed over this issue, particularly since it had awarded a tax free status to the contract in the hope that theBank loan would cover a greater percentage of project costs. Performance of Consultant, Government and Contractors 3.33 There were no problems at any time with Government officials or the consultants and an excellent relationship was established and maintained. With respect to the consultants, ASECNA, their performance was extremely good throughout the project and special mention should be made of the enthusiasm, cooperation, technical interest and ability of their Senegalese personnel. The project was excellent training for these young engineers. 3.34 The Romanian contractor, Contrasimex, had an excellent working relationship with ASECNA and carried out thieir operations in a well planned and organized fashion. When they arrived on site, their program, equipment and schedules had been carefully thought out and they had the work under control at all times. Two major problems were overcome promptly. The first arose - A.10 - when their Senegalese partner, Sylla, partially failed to carry out their portion of the work in an adequate manner. Contrasimex tried very hard, in the interest of good relations, to accommodate Sylla but finally had to take on the work themselves. The second problem was that the rock at the airport turned out to be unsuitable for aggregate. Prompt action was taken to locate and use another source. This problem was due to inadequate testing by ASECNA and resulted in increased costs. - A.11 - 4. FINANCIAL PERFORMANCE Covenants 4.1 Table 1 gives a listing of financial covenants and targets agreed to by the Government, ASECNA and the Bank under the project as well as notes on their achievement. All the financial targets were met but some of the reporting requirements were overlooked on the grounds that existing financial statements gave sufficient information (Table 5). Income Account (CFAF million) 1971 1972 1973 1974 1975 Actual Apr. Act. Apr. Act. Apr. Act. Apr. Act. Operating Revenue Aircraft 353 394 363 427 448 504 513 593 722 Passenger 101 115 140 124 189 135 231 146 393 Rents & Concessions 34 56 56 57 76 67 91 69 126 Total Operating Revenue 488 565 559 608 713 706 835 808 1241 Operating Expenses Navigation 224 260 235 274 255 290 285 305 355 Ground Installations 45 53 48 55 45 58 55 63 81 Terminal and Other Bldg. 32 53 38 54 47 62 73 63 106 Total Operating Expenses 301 366 321 383 347 410 413 431 542 Depreciation 149 157 160 160 162 173 170 232 277 Net Operating Profit 38 42 78 65 204 123 252 145 422 Interest 3 5 4 19 12 69 18 96 107 Net Profit 35 37 74 46 192 54 234 49 315 - A.12 - Operating Revenue and Expenses 4.2 The table shows that during the period under review revenues generally exceeded appraisal forecasts. This is due partly to tariff increases (13% in 1975) and partly to traffic growth. As mentioned below, total aircraft movements and passenger and cargo traffic have increased more rapidly than expected but the number of large aircraft has been lower than anticipated as a result of the changeover to wide-body aircraft with larger capacity. This change has not yet been fully compensated for by larger revenue per aircraft movement. 4.3 Expenses have also been higher than the appraisal forecast but growth of these despite inflation has been relatively modest. Gross oper- ating profit has therefore been significantly higher than the appraisal estimate. As a result of higher construction costs, depreciation and interest will also be higher, which partly offsets the higher gross revenue. *. The good financial performance of the airport is reflected in the return on net fixed assets summarized below in CFAF million: 31 December 1971 1972 19V3 1974 1975 Net Fixed Assets in use 1356 1440 1342 1182 2862 Average for year ended 1399 1398 1391 1262 2022 Net Operating Profit -38 78 204 252 422 Return on Net Fixed Assets 2.7% 5.6% 14.7% 19.9% 20.9% The table shows that between the time of appraisal (March 1972) to December 1975, when most of the new investments were fully operational, the Dakar air- port increased its net fixed assets by CFA 1500 million (US$6.4 million) where- of US$3.0 million was financed by the Bank loan and the rest partly by SenegalE loans and partly by internal cash generation (Tables 6 and 7). Sources and Application of Funds 4.5 The sources and applications of funds for investment from 1971 to 1975 for Dakar are summarized in Table 6. Both the internal cash generation and external Senegalese financing have been larger than anticipated. This, - A.13 - in turn, reflects the rapid passenger traffic growth which creates the need for more terminal space and, at the same time, generates more revenue. The cash surplus from airport operations (Table 6) have been consistently higher than ASECNA budget and Senegalese Government contributions. The total net cash generation is about CFAF 827 million (US$3.5 million 1971-75), i.e., the total surplus of CFAF 1454 million less budget allocations of CFAF 627 million. This surplus from the airport operations has been used to offset other net costs for civil aviation infrastructure in Senegal which are provided by the Senegalese Government through ASECNA: (1) The navigational control center which is located in Dakar and forms part of the facilities financed by twelve of the ASECNA member states. Only part of the services provided by this control center relate to Dakar airport and only part of the cost is borne by the Government of Senegal. (2) The ground facilities of other airports in Senegal which are operated and maintained by ASECNA for account of the Government of Senegal. As a result of the cash flow required to maintain these services, Senegal was in need of both foreign exchange and internal funds to complete the Dakar airport in the time required. - A.14 - 5. ECONOMIC EVALUATION Traffic 5,1 Traffic projections at appraisal were made for each year until 1980. The expected annual increases for 1971-1975 in passenger and cargo traffic to and from Dakar were 7% and 8.5% (Table 8). The average yearly increases in both passengers and cargo have, in fact, been as high as 18.3% and 16.1% from 1971 to 1975. This reflects the large increases in tourism traffic and vegetable exports. The number of international scheduled aircraft movements has only increased to about 9400 as a result of much larger air- craft being gradually introduced in the 1972-1975 period. This transition is still continuing, but of vital importance is that Dakar has been able to retain a very important part of the rapidly growing South America - Europe traffic in this initial changeover. The timing of the Bank-financed runway project has been essential for this retention of transit traffic. - A.15 - 6. ECONOMIC RETURN 6.1 Three main sources of benefits to the Senegalese economy were identified during the appraisal. These were (i) the increased income from landing fees with the use of heavier aircraft; (ii) the increased sales of fuel to larger aircraft; and (iii) the increased expenditure in Senegal of the larger flight crews on stopovers. 6.2 For the calculation of the economic benefits of the project, it was assumed at the appraisal that without the project the present type and number of aircraft would continue to be used to serve Dakar. This implies that the gradual loss of transit flights would be compensated for by some additional services between Dakar and Europe. Even with the expected growth of passenger,traffic to and from Dakar, a reduction in flight frequency to Dakar might well occur, but in order to avoid over-estimating the benefits of the project, this more favorable hypothesis for the "without project" situation had been used for the rate of return calculation. 6.3 At the appraisal the increase in landing fees from smaller aircraft being substituted by larger aircraft, paying progressively higher landing fees, offset by increased operating costs was taken as the main benefit of the project. 6.4 As one of the effects of the energy crisis, the actual number of landings of wide body aircraft in 1975 was less than expected, or about 780. This led to a lower landing fee increase than expected despite an increase in the tariffs. This, however, was more than compensated for by higher benefits from the fuel supply and greater revenue from other services provided in 1975. For 1976, landing fees and fuel supply benefits to Senegal will increase by about US$377,000 on an annual basis as a result of the Concorde services between Paris and Rio de Janeiro. A conservative estimate of the additional fuel being used by the large aircraft compared to the 707/DC-8 aircraft previously used in the transit traffic to South America indicates more than 20,000 tons. The total fuel supply at the airport has increased by about 26,000 tons since 1971. Had the transit traffic declined this would have .decreased substantially. About 2/3 of the jet fuel has been refined in Senegal with a value added of about US$37 per ton which gives a net benefit of US$505,000 per year after 1976. 6.5 The appraisal estimate of other services provided was very conserva- tive. A more realistic estimate would take into account 14,600 extra crew nights each giving a net value for Senegal of about CFA 5000 (US$21), or a total of US$307,000 on an annual basis. No economic benefit has been assigned to the various independent service agencies at the airport such as catering. - A.16 - The runway overlay will be delayed until about 1979, but with a higher cost of US$4.3 million in 1976 prices. For 1975/76 this resulted in the following benefits: Landing Charges Appraisal Estimate 1976 Estimate (US$000) 1975 550 458 1976 600 540 Supply of Fuel 1975 330 278 1976 360 505 Other Services 1975 100 307 1976 100 307 Taking these factors into account, the economic return is about 20%, even with no growth in benefits after 1976. 6.6 A factor which was not specifically evaluated at the 1972 appraisal was the employment impact of this project. As a result of the induced transit traffic and local traffic growth, the employment at the airport and its assoc- iated service functions (Table 9) has increased from about 1600 (1972) to about 2100 at the end of June 1976. This does not include the about 300 employed on the airport construction program nor indirect employment such as at hotels, etc., giving service to the 90-100 first class hotel rooms permanently oc- cupied by airline crews. 6.7 Due to the transit flights, the additional seat space available allows the attractive offering of special rates to tour groups from Europe to Dakar. These rates are US$200-245 compared with US$550 for the lowest round trip fare, Paris-Dakar. That this is important is shown by the increase in tourists to Senegal from 100,000 in 1970 to 148,000 in 1975. The number of hotel beds in the Cap Vert area doubled to 3071 in the same period and in 1975, the average stay was a little under five days with an average 52.5% yearly occupancy. ANNEX 1 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 687-SE) COMPLETION REPORT Description of the Project I. PROJECT WORKS Extension of the Runway 1. The work involved lengthening the runway from 2900 m to 3550 m and consisted of removing a portion of existing highway power lines and drainage structures, then placing deep earth fill to achieve the required runway grade. The fill was of approved materials borrowed from areas close to the runway. On comple- tion of the fill, a granular base course was laid, and the runway and aircraft turn- ing area were paved with asphalt cement concrete. The fill was calculated to pro- vide a 200 m overrun area, which was also paved, and space for the localizer build- ing and antenna. Only minor modifications were made to the original design to im- prove the drainage. Aircraft Parking Area 2. Two new aircraft parking positions to accommodate modern, large, wide- body jet aircraft were constructed of plain portland cement concrete. In addition, a small number of extra slabs were placed to improve two other positions, and this was the only.departure from the original plan. Relocation of the Highway 3. This involved relocating a portion of the road from the airport to Dakar, and was undertaken in order to make room for the runway earth full. This work was completed in accordance with the original design and no changes were required. Runway Lighting Equipment 4. This involved the extension of the runway lighting for the new portion of the runway, and required new switchgear,,control lines to the control tower, additional standby power generation equipment, a new transformer house, and extensive cabling. Originally, it was planned to finance this work from the proceeds of the loan. However, ASECNA proposed that all the equipment be procured under then normal bulk buying procedures and installed by their technicians. As it appeared that the loan would be fully utilized on the civil works and consulting services, it was decided that no part of this installation would be financed by IBRD. 5. Subsequently, the scope of work was enlarged to include new lighting equipment for the aircraft parking apron. All the work was financed directly by Senegal, and as inflation did not materially affect the ASECNA prices, the work was carried out at reasonable costs. Relocation of the ILS Localizer 6. The original intention was to relocate the localizer to a temporary offset position which still allowed a reasonable approach path. Then, when the run- way was completed, relocate the equipment in its final position at the end of the ANNEX 1 Page 2 new extended runway. As the equipment was nearly obsolete, ASECNA purchased a new localizer and installed it in the final position. When it became fully operational in April 1976, the old equipment was scrapped. This installation was undertaken by ASECNA from its own funds as part of its ongoing program and no charge was made for the new equipment or its installation. This investment is accordingly not included in the capital debt of the airport. Land Acquisition 7. The loan agreement provided that Senegal acquire the land required for the runway extension and highway diversion. The land was expropriated by the Government, but as the ownership of the many small parcels.of land was difficult to establish and the proper value was in question, the matter was laid before the courts and may take several years to finalize. No proceeds of the loan were applied to the acquisition of land. II. ADDITIONAL WORKS 8. ASECNA, with the consent of the Government, undertook to carry out extensive repairs to the existing runway and parking apron, thereby deferring a major overlay investment from 1975 to 1979, or later. In addition, some drainage improvements were carried out which should assist in preserving the quality of the runway and apron., The car parking lot in front of the terminal was extended and paved to allow for the growing vehicular traffic at the airport. This additional work was financed entirely by Senegal. 9. A new cargo shed was constructed to improve cargo handling as the existing facilities were inadequate. The structure was essentially financed by the operators who will receive rebate on user charges. The size, location, and financial viability of this project was reviewed by the Bank prior to contract. The building was completed in 1975 and is fully utilized. 10. A new flight kitchen was built to accommodate the increase of in-flight meals being prepared. The building was required since the existing kitchen in the terminal was inadequate to handle both the terminal restaurant traffic and the air- line meals. This investment is expected to yield a reasonable return, particularly if traffic growth continues at its present rate. ANNEX 2 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Bid Results - Civil Works 1. Due to delays in completing design documents, the Borrower decided not to prequalify contractors, but proceed directly to tender call on the major civil works in September 1973. Notification was by advertisement in French, German, English, and American newspapers and periodicals. In addition, all diplomatic representatives in Dakar were notified. 2. The time for public opening of bids was set as December 1, 1973. How- ever, Romania requested an extension and the date for opening bids was delayed to January 5, 1974. All interested parties were notified of the extension. In fact, January 4 and 5 were national holidays (Fete Tabisha), and bids were not opened until January 8 at 4 pm by a Bid Commission established for the purpose and made up of representatives of the Government of Senegal and ASECNA. 3. Three bids were received late - one, Contrasimex-Sylla proved to the satisfaction of the Commission that attempts were made on the 5th, and again on the 6th of January to deliver the documents but no one was available to receive them. Their bid was therefore accepted. 4. The second by Bourdin et Chausse was postmarked January 4 and was accepted. 5. The third was delivered to Air France on January 6 for air freighting to Senegal and arrived on January 8. This'bid was rejected and not opened (French). 6. The Bid Commission requested a technical report and analysis of the bids and this was prepared by January 11 by ASECNA. 7. The Bid Commission reconvened on January 15 at 3 pm to consider the bids and make their recommendations to accept the low bid submitted by Contrasimex- Sylla. 8. It will be recalled that the preparation of bids took place at the height of uncertainty during the "oil crisis", and this no doubt affected the bidders' outlook and pricing. Nevertheless, the bid response was considered excellent. 9. The results of the bidding were as follows: CFAF Contrasimex-Sylla 576,117,540 COLAS/SOFRA/SFEDIP 859,290,259 LEFEVRE 949,234,320 SATOM 979,442,650 Bourdin et Chausse L,029,691,800 Edok/Eter 1,192,174,530 ANNEX 2 Page 2 10. Four of the bidders were French firms, three of whom were well established in Senegal, one was Greek, and the remaining bidder was the low bidder of Contrasimex-Sylla. 11. Sylla is a well-established local firm with experience in building construction and road work, but no specific airport experience. Contrasimex has carried out large airport works in Romania, but has no experience in Senegal. They took the opportunity to buy and bring to the project a large amount of new equipment. A imajor factor in their performance was the good quality of the equipment and the ex'arience and organization of the maintenance staff. Table 1 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Schedule of Principal Covenants and Commitments on Loan 867-SE and Relevant Agreement and Side Letters Agreements and Sections Commitments Action Taken 1. Loan Agreement Section The Government will make Done 3.01 and subsidiary available the proceeds of Loan Agreement between the Loan to ASECNA and the Government of provide funds, facilities Senegal and ASECNA and services to enable (contract special) ASECNA to perform its functions under the project Agreement. 2. Loan Agreement Section The Government shall All land expropriated, but 3.02 acquire land required settlement of ownership and for the project. claims may take several years. 3. Loan Agreement Section The Government shall not Approval obtained from the Bank 4.02 undertake airport invest- for new air terminal, flight ment of CFAF 50 million kitchen and cargo handling without prior approval. sheds. 4. Loan Agreement The Government shall main- Return substantially exceeds Section 4.03 tain airport tariffs so requirements at present. that annual return on net fixed assets of not less than 7% is obtained. 5. Project Agreement ASECNA shall maintain Done Section 4.01 adequate accounting records. 6. Project Agreement ASECNA shall prepare Special proforma statements for Section 4.02 proforma profit and loss Dakar Airport have been pre- statements and have such pared but not audited. Each statements audited. year audited statements for the whole of ASECNA's operation in Senegal have been prepared but normally not become available until 6-8 months after the end of the fiscal year. 7. Project Agreement ASECNA shall prepare cash Only done on specific request. Section 4.03 flow statements. Table 2 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Schedule of Disbursements I B R D Fiscal Year and Cumulative Disbursements at Quarter U. S. $('ooo) Quarter Ending Appraisal Report Adtual 1972/73 June 30, 1973 532 1973/74 September 30, 1973 715 December 31, 1973 1,357 March 31, 1974 2,182 June 30, 1974 2,225 1974/75 September 30, 1974 2,737 385 December 31, 1974 2,737 677 March 31, 1975 2,737 1,212 June 30, 1975 3,000 2,508 1975/76 September 30, 1975 3,000 2,974 December 31, 1975 3,000 2,992 March 31, 1976 3,000 3,000 Table 3 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Summary of Actual Disbursements (In CFAF million) Total Amount U.S. $ Rate of Year Quarter Amount Financed Equivalent Exchange 1974 3 105.8 91.0 384.6 236.45 4 41.1 35.4 151.0 234.30 1975 1 36.1 31.1 141.4 219.78 3.9 3.3 15.1 219.78 7.2 6.2 29.2 212.68 30.4 26.2 123.1 212.67 43.7 37.6 180.6 208.33 1.8 1.5 7.2 208.33 43.7 37.6 179.3 209.55 2 51.7 44.2 211.2 209.34 5.7 4.9 23.1 211.27 46.4 39.9 190.3 209.50 86.7 74.6 373.3 199.84 3.5 3.0 14.9 199.73 108.2 93.1 465.1 199.72 4.3 3.7 18.6 200.15 3 119.1 102.4 465.7 219.80 4 4.8 4.1 18.6 220.74 1976 1 8.5 1.7 7.6 223.86 Totals 752.5 641.6 3,000.0 Totals may not agree due to rounding Table 4 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Cost Evaluation MILLI 0 NS CFAF IBRD Appraisal Final F I N A N C I N G DISBURSEMENT Costs Costs Senegal I B R D U. S. $(000) Extension of Runway 624.0 414.8 Extension A/C Parking Apron 88.5 101.8 Relocation of Road 80.0 88.9 Price Escalation 232.8 Extra Work Orders 65.2 Price Escalation 13.8 792.5 917.3 320.8 596.5 2788.9 Extension Runway Lighting 25.0 33.3 Relocate ILS 5.0 5.0 30.0 38.3 38.3 Land Acquisition 12.0 12.0 12.0 Design and Engineering 31.0 25.3 Supervision 33.5 35.8 64.5 61.1 16.0 45.1 211.1 Contingencies - Physical 84.0 Price 41.8 Total 1024.8 Less Estimated Taxes 63.9 Totals Net of Tax 969.9 1028.7 387.1 641.6 3000.0 % of Costs Financed by Senegal 14 38 % of Costs Financed by I B R D 86 62 Average Rate of Exchange 255.79 213.86 Other Civil Works Financed by Senegal 18.6 TOTAL 1047.3 Table 5 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Profit and Loss Account (In CFAF million) 1971 1972 1973 1974 1975 REVENUE Landing Charges 341.9 350.8 409.9 472.5 661.6 Lighting Charges 6.3 7.1 29.3 32.8 51.5 Parking Charges 5.3 5.1 8.5 7.8 8.5 Passenger Charges 100.6 140.2 189.4 231.0 392.2 Rentals and Concessions 33.5 56.4 75.5 90.7 126.5 TOTAL REVENUE 487.6 559.6 712.6 834.8 1240.3 COSTS Navigation 224.1 235.1 254.8 284.8 354.7 Ground Ihstallations 45.3 48.4 44.7 55.1 80.7 Terminal & Other Buildings 31.8 38.1 46.8 72.8 106.1 TOTAL COSTS 301.2 321.6 346.3 412.7 541.5 Gross Operating Profit 186.4 238.0 366.3 422.1 698.8 Depreciation 148.7 159.7 161.8 170.4 277.0 Operating Profit 37.7 78.3 204.5 251.7 421.8 Interest 3.4 4.5 12.0 17.7 107.0 Net Profit 34.3 73.8 192.5 234.0 314.8 Average Net Fixed Assets 1399 1398 1391 1262 2022 Rate of Return Net Operating Profit/ Net Fixed Assets 2.7 5.6 14.7 19.9 20.9 July 1976 Table 6 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LoAN 867-SE) COMPLETION REPORT Proforma Cash Flow Statement (In CFAF million) Year Ended 31 December 1971 1972 1973 1974 1975 Source of Funds Profit for year 34.3 74.8 192.5 234.0 314.8 Depreciation 148.7 159.7 161.8 170.4 277.0 Loans BNDS 30.0 136.5 159.0 561.0 IBRD 126.0 513.0 Subsidy 32.0 101.0 uAdget (Art. 12) 22.2 106.5 91.0 274.0 235.2 477.5 354.3 812.4 2040.8 Disposition of Funds Freight Shed 52.0 86.0 6810 Runway Widening 210.0 Terminal 33.0 164.0 592.0 Runway Lengthening 158.0 606.0 Catering 183.0 52.0 243.0 408.0 1449.0 Loan Repayment 20.0 23.0 47.3 69.0 155.3 -urplus for year 163.2 211.5 307.0 335.4 436.5 Cumulative 163.2 374.7 681.7 1017.1 1453.6 July 1976 Table 7 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 68T-SE) COMPLETION REPORT Calculation of Net Fixed Assets (In CFAF million) Year Ended 31 December 1971 1972 1973 1974 1975 Civil Works Original Value 1782 1782 1992 1992 2150 Additions During Year 210 158 606 1782 1992 1992 2150 2756 of which Work in Progress 158 Fixed Assets in Use 1782 1992 1992 1992 2756 Depreciation 961 1051 1142 1233 1371 Net Fixed Assets in Use 821 941 850 759 1385 Terminal and Other Buildings Original Value 452 504 537 537 787 Additions During Year 52 33 250 843 504 537 537 787 1630 of which Work in Progress 250 Fixed Assets in Use 504 537 537 537 Depreciation 133 159 185 211 296 Net Fixed Assets in Use 371 378 352 326 1334 Radio Aids and Equipment Original Value 328 328 328 392 402 Additions during year 64 10 100 Fixed Assets in Use 328 328 392 402 502 Depreciation 164 207 252 305 359 Net Fixed Assets in Use 164 121 140 97 143 Total Net Fixed Assets in Use 1356 1440 1342 1182 2862 Average in Use 1399 1398 1391 126U 2022 July 1976 Table 8 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 687-SE) COMPLETION REPORT Air Traffic Development ANNUAL PASSENGERS 1971 1975 1975 (000's) ACTUAL FORECAST ACTUAL TOTAL 347 493 626 International 197 255 380 Domestic 11 20 28 Transit 139 218 218 ANNUAL AIR FREIGHT (tons) TOTAL 6469 9000 11772 Inbound 2360 3300 3304 Outbound 4109 5700 8468 ANNUAL AIRCRAFT MOVEMENTS TOTAL 35360 46400 38524 Passenger Aircraft 8967 10160 13030 International 7220 7060 10176 Domestic 1747 3100 2854 Cargo Aircraft 128 180 624 Other Aircraft 26265 36060 24870 Table 9 SENEGAL-DAKAR INTERNATIONAL AIRPORT PROJECT (LOAN 867-SE) COMPLETION REPORT Employment at Dakar Airport ASECNA 695 Air Afrique 382 Sonatra - Air Senegal 60 Other Airlines 202 OPT (immigration) 71 Customs 66 Health 14 Gendarmerie 28 SOTRAC (urban transport) 35 Freight Forwarders: SOAEM 17 Transcap 15 SATA 7 BUD 7 SOCOPAO 27 Others 5 78 Service Agencies: SPS (luggage handling) 102 SORES (Caterers) 141 Oil Companies 71 Africair Service 35 SOADIP 23 372 Police 49 DAC (Directorate of Civil Aviation 12 USB (Bank) 6 Shops (handicraft) 7 Others 22 2099  BRD 10055 -18. S E N E G AL.- A T L A N TI/ C lY.4 LOCATION OF AIRPORTS IN SENEGAL ýInter'national Airport Paved Roads + Local Airports Ralroads c - international Boundaries s.n.oI iA S o U T H -NPODOR A M ER l C A RICHARD TOLL 0 C E A N SAINT-LOUIS11 16* LOUGA 0 50 100 T ,g Dha IGUR KILOMETERS LATMNGUEREUII ~ ~Kayor +HS+~~ THIES MbcéBAKE L 0 DAKAR-YOFF DIOURBEL Kidra Mbour e KAOACK KfLnnMalime Hodar TAMBACOUNDA BA THU.RSL 77, 1. k SIMENTI O c KOLDA , QZIGUNCHOR +6KDOIUGOIU CAP SKIRRING +--- POR GUESE GUINEA G U l N E A J L 192 fl" ~12 JULY 1972