Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2301 PROJECT PERFORMANCE AUDIT REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) December 21, 1978 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. - i- FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) Table of Contents Page No. PREFACE iii PROJECT PERFORMANCE AUDIT BASIC DATA SHEET iv DISBURSEMENT GRAPH V HIGHLIGHTS vi PROJECT PERFORMANCE AUDIT MEMORANDUM I. Introduction 1 II. Issues 3 III. Conclusions 7 ATTACHMENT: PROJECT COMPLETION REPORT I. Background 9 II. Project Composition and Cost 9 III. Physical Execution 13 IV. Institutional Development 15 V. Operations 15 VI. Traffic 17 VII. Financial Performance 19 VIII. Economic Evaluation 25 IX. The Role of IDA 28 Tables 1. Total Project Cost 2. Financing Plan 3. Cumulative Estimated, Revised and Actual Disbursements 4. Annual Credit Disbursements by Categories 5. Summary of Operating Statistics 6. Operating Targets and Actual Performance 7. Source and Application of Funds 1967/68 through 1971 8. Income Account 1972-1977 9. Income Account 1967-1971 10. Source and Application of Funds 1972-1977 11. Balance Sheet 1967-1971 12. Balance Sheet 1972-1977 13. Assessment of Potential Increase in Cash Generation through Achievement of Appraisal Traffic Forecasts 1972-1977 14. Railway Traffic 1972-1976: Appraisal Forecast and Actual 15. Actual Freight Traffic 1971-1977 16. Actual Passenger Traffic 1971-1977 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. - ii - Annexes 1. Principal Covenants and Commitments 2. Economic Evaluation (Tables 1 to 3) - ift PROJECT PERFORMANCE AUDIT REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) Preface This report presents a performance audit of the Second Railway Project in Mali for which Credit 384-MLI in the amount of US$6.7 million was closed fully disbursed in June 1978. The report consists of a Project Performance Audit Memorandum prepared by the Operations Evaluation Depart- ment (OED) and a Project Completion Report (PCR) prepared by the Western Africa Region. The memorandum is based on the PCR and discussions with Bank Group staff members; the transcript of the Executive Directors' meeting of April 17, 1973 has been read, and the project files have been consulted. No OED mission to Mali has been undertaken. The draft audit report was sent to the Government but no comments were received. The audit memorandum partially agrees with the conclusions of the PCR, but presents a more critical review of a number of aspects of the project. - iv - PROJECT PERFORHANCE AUDIT BASIC DATA SHEET MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) KEY PROJECT DATA Original Actual or Item Plan Current Estimate Total Project Cost (US$ Million) 9.33 13.87 Overrun (%) 71 1/ Credit Amount (US$ Million) 6.7 Disbursed ) 6.7 Cancelled As of 10/31/78 0.0 Repaid to )0.0 Outstanding ) 6.7 Date Physical Components Completed 6/77 6/77 2/ Proportion Completed by Above Date (%) 100 100 2/ Proportion of Time Underrun or Overrun (%) None Economic Rate of Return (%) 18 15 Financial Rate of Return () 3.5 1 OTHER PROJECT DATA Original Actual or Item Plan Current Estimate Government's Application 3/09/72 Negotiations 2/ -/73 Board Approval 4/17/73 Credit Agreement 5/23/73 Effectiveness 10/04/73 9/12/73 Closing Date 6/30/78 6/30/78 Borrower Republic of Mali Executing Agency Mali Railway Fiscal Year of Borrower Calendar Year Follow-on Project Name Third Railway Project Credit Number Credit 713-MLI Credit Amount US$10.5 million Credit AgreemCnt 6/10/77 MISSION DATA Month/ No. of Ho. of Date of Item Year Weeks Persons Man-weeks Report Identification 9/71 1.5 4 6.0 12/10/71 Preparation 3/72 1.5 1 1.5 4/27/72 Appraisal 6/72 2.5 5 12.5 4/03/73 Subtotal 5.5 20.0 Supervision I 10/73 1.0 3 3.0 11/28/73 Supervision 11 2/74 1.0 2 2.0 3/12/74 Supervision 116 9/74 1.5 2 3.0 11/08/74 Supervision IV 2/75 1.0 3 3.0 7/22/75 Supervision V 11/75 1.0 3 3.0 12/02/75 Supervision VI 3/ 7/76 - - - Supervision VII 3/ 2-3/77 --- Supervision VIII73/ 7/77 - - - Completion 10/77 1.0 3 3.0 5/31/78 Total 12.0 37.0 COUNTRY EXCHANGE RATES Nane of Currency (Abbreviation) Mali Franc CMF) US$1 - MF Appraisal Year Average 1972 504 Intervening Years Average 458 1973 445 1974 481 1975 429 1976 478 Completion Year 1977 494 1/ Of the original project, US$2.45 million was deleted; the amount of US$13.87 million includes US$2.08 million of items not included in the appraisal. The 71 overrun represents the cost increase over the items of the original project which were implemented. I/ Project was scaled down. 3/ These missions were basically carried out forthe purposes of prepara- tion, appraisal and supervision of the Third Railway Project (Credit 713-MSI) but also included some supervision of the present project. PROJECT PERFORMANCE AUDIT REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) Cumulative Estimated and Actual Disbursements MiF 7.C 6.C- 5.C 2.Q 1. FY 1974 1975 1976 1977 - vi - PROJECT PERFORMANCE AUDIT REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) Highlights The main purpose of this project was the partial renovation of Mali Railways and expansion of the passenger and freight carrying capacity. The estimated cost of the project was US$9.3 million. Due to price escala- tion and low cost estimates made at the time of appraisal, the project had a cost overrun of about 70%, which was partially financed from bilateral assistance. This cost overrun materialized in spite of the fact that some of the track works and.the entire bridge renewal component were postponed. The project was implemented on time, although disbursements started one year late. Passenger traffic grew faster than forecast, but freight traf- fic stagnated instead of growing about 40% over the project period as pro- jected at the time of appraisal. Rates and fares were increased so that, in spite of the disappointing traffic, substantial progress was made towards achieving the agreed on return on net fixed assets. Points of particular interest are: - investment in two locomotives was premature at the time of appraisal while an additional two turned out to be premature when traffic failed to grow as expected (paras 7, 21); - procurement of railcars was not justified since excess locomotive capacity was available, while it also contributed to an undesirable diversifi- cation of the equipment park (paras 8, 9, 22 and PCR, para. 2.3); - funds spent on railcars could have been used to cover the project items that were deleted due to a shortage of funds (para. 22); - the need for IDA to insist on sufficiently broad specifications to allow ICB or alternatively to identify the items for proprietary procurement (paras 10-12, 23 and PCR, para. 2.3); - the need to balance the advantages of standardiza- tion against the quality of the product (para. 19). - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) I. Introduction 1. Mali is a landlocked country, and is predominantly agricultural. Its northern portion forms part of the Sahara desert, where farming is only possible in irrigated areas along the Niger River. The central and southern parts of the country consist of fertile farmland. Mali's main crops are fruit, rice, millet, cola nuts, groundnuts and cotton. The lat- ter three commodities are the principal export products. 2. Mali's road system consists of some 8,000 km of primary and secondary roads. River transport is significant between Koulikoro (57 km northeast of the capital, Bamako) and the vast northeastern region of the country. Mali's railway system consists of one line, linking Koulikoro and Bamako with the Senegalese border and the Port of Dakar. About 20% of the Railway's traffic volume is internal, and almost 80% is export/ import traffic to or from Dakar. The latter traffic is dependent on the efficiency of the Senegalese Railways. Since there is only a very short section of all-weather road parallel to the railway line, the Railway is not affected by direct road competition. However, there is a competing international trade route via Abidjan by road and rail. The percentage of foreign trade which uses this more costly route has grown, and in 1975 the split between Dakar and Abidjan was about even. 3. Bank Group lending for transport in Mali has been US$61.8 million, all in the form of IDA credits. Three of these have been for roads to- talling US$35.5 million, and three for Mali Railways totalling US$26.3 million. One road project has been completed,l/ and this is the second railway project for which a performance audit has been carried out. The audit for the First Railway Project2/ concluded that the project was not fully successful, but still had a reestimated economic return of 11%. The first project was completed 5 years behind schedule, and the financial and operational performance of the Railway did not improve as expected, while actual traffic was lower than forecast. However, the audit concluded that despite these shortcomings, the project did prevent the breakdown of the Railway which would have interrupted an important link between Mali and the rest of the World. 4. Mali Railway covers 644 route km. At the time of appraisal, it had nine large and two small mainline locomotives, seven shunting locomotives, three railcars with eight trailers, 20 passenger coaches and 317 freight cars. The purpose of the Second Railway Project was to 1/ PPAR - Mali First Highway Project (Credit 197-MLI) - SecM78-133. 2/ PPAR - Mali First Railway Project (Credit 95-MLI) - SecM77-416. -2- increase the freight and passenger capacity, renew some old freight wagons and renew and improve part of the track and bridges. The project had a total estimated cost at the time of appraisal of US$9.3 million. An IDA credit of US$6.7 million was approved by the Board in April 1973. The French Government was to finance the equivalent of US$1.7 million to be used for the purchase of four mainline and two shunting locomotives. The local contribution to the project was to be US$0.9 million equivalent. The principal items to be financed from the IDA credit and the local con- tribution were: Track works (renewal, ballasting, welding and track maintenance equipment) US$1.95 million Bridge repair US$0.32 million Shunting locomotives (3) US$0.43 million Railcars and trailers (2 and 8) US$0.80 million Passenger coaches (4) US$0.40 million Freight cars (70 renewal, 55 additional) US$1.78 million 5. The project was implemented on time, but during the first year no disbursements were made instead of the US$1.5 million foreseen at the time of appraisal (PCR, Table 3). As pointed out in the attached PCR (para. 2.2), the project had to be modified extensively due to price escalation and be- cause the original cost estimates were too low which made it impossible to finance all project items from available funds. Of the original project of US$9.3 million, only 75% was implemented at a final cost of US$11.8 million, representing a cost overrun of 71%. The overrun was financed mostly from bilateral German and French financial assistance. The highest cost in- creases were for railcars and trailers (281%) and for freight cars (160%). 6. Traffic developments were not very satisfactory. During the fore- cast period of the first project (1965-1971), freight traffic had grown 40% in terms of tons carried but was 15% behind the forecast. -During the fore- cast period for the second project (1971-76), passenger traffic increased somewhat fast'er than expected but freight traffic stagnated, and in 1976 this traffic was about 30% below the appraisal forecast. In spite of this, the financial condition of the Railway improved, since rates and fares were increased considerably during the project period while efforts to limit cost increases also contributed. Since the Railway does not have to cope with road competition on parallel facilities, the only risk of traffic diversion is for international traffic to the Abidjan route, which is considerably more expensive. The reestimated economic return on the project was 15%, against 18% estimated at the time of appraisal. The main reason for this relatively high economic return is the very substantial cost difference be- tween using the Dakar and Abidjan routes. The target for 1977 of a 3.5% - 3 - return on net fixed assets was not quite achieved. As the PCR (para. 7.6) points out, a 4% return was accomplished, but this was based on the 1969 values of assets. According to the Credit Agreement, however, the finan- cial return had to be calculated on the basis of the current net value of the Railway's fixed assets; for 1977, this would give a return of only about 2%, which in view of some overinvestment and despite stagnating traf- fic is fairly satisfactory. II. Issues Adequacy of Motive Power and Rolling Stock Investments 7. The traffic growth for 1971-1976, anticipated by the appraisal mission, was about 40% for ton-km of freight and the same percentage for passenger-km. The capacity increase for freight cars and for passenger carrying capacity included in the project was in line with these forecasts, but part of the investment in locomotives was premature. According to the targets agreed on between the Association and Malian Railways, availability of locomotives was to increase from 54%-76%. This would have provided about 40% more available motive power, which matched the anticipated traffic in- crease. Therefore, it is difficult to see the need for a total of six ad- ditional locomotives, four of which were included in the project, financed under a French grant, and two transferred to the Railway in 1973 from the cement factory (PCR, para. 8.5), which was known at the time of appraisal. Some spare capacity would have been desirable to provide operational flex- ibility which at the time of appraisal did not exist, while some mainline locomotive power was needed for the track improvement work. Furthermore, the 40% increase in availability was a target, but an allowance to cover the risk that the target would not be met seemed reasonable. Therefore, assuming that only half of the target improvement would be achieved, an extra two locomotives would have been required. Based on the above calculations, 3-4 additional locomotives would have been justified, with the highest figure providing for all reasonably foreseeable contingencies. This still leaves an excess of at least two locomotives at the time of appraisal while, con- sidering the stagnation of freight traffic, seen in retrospect a total of about four locomotives was acquired prematurely. 8. The contract for railcars was awarded in mid-1974. Passenger traffic was growing as forecast, and therefore the planned capacity in- crease was justified. The only bid for the two railcars and eight trailers was high (details are discussed below), and the PCR (para. 2.3) suggests that because of this, it would have been cheaper to have purchased two loco- motives and 10 passenger cars instead. In this connection, two points should be raised. Firstly, since it appears that some overinvestment had been made in locomotives even if the anticipated traffic growth had materialized, but specially where it was clear in 1974 that freight traffic was not growing as much as expected, the spare locomotives could have been used for pas- senger trains, thus only necessitating the procurement of passengers cars. 9. A second and more fundamental point is whether for Mali Railways railcars were the most desirable solution. When for operational purposes railcars with four trailers are needed, this already is a small passenger train, using a low-powered, passenger carrying "locomotive". This system, however, does not have the flexibility that more trailing stock can be added, and therefore further traffic growth would lead to the need for an extra service. If instead a standard locomotive with five passenger cars were to be introduced, traffic growth could be met by adding more passenger coaches. This solution would have had the further advantage of creating a more homogeneous equipment fleet and providing much greater operational flexibility since the same locomotive could be used for either freight or passenger services. Lack of Competition in the Procurement of Railcars 10. As the PCR (para. 2.3) points out, there was only one bid for procurement of the two railcars and eight trailers, and the appraisal cost estimate was exceeded by 281%. The appraisal estimate of US$800,000 was low, and at 1972 prices the cost would probably have been about US$1.3 mil- lion. In 1974, the only bidder quoted a price of US$2.87 million,l/ which was more than double the more realistic estimate mentioned above. Much of this price increase can be explained by the very high increase in steel and copper prices, which peaked in 1974, just when bids were submitted. Unfor- tunately, the contract did not include a clause covering price fluctuations, because in 1975 and 1976 when the equipment was delivered, steel and copper prices had fallen considerably, and this could have reduced the final cost by about 15%, although it would still have been three times the appraisal estimate. 11. Before bidding was started, several firms had expressed interest in supplying the equipment. The specifications for the railcars, however, severely limited competition by requiring an engine of the same make as most of the Railway's locomotives. This was presumably done to achieve standardization of spare parts requirements; this limited competition to the point where only one firm submitted a bid. In the circumstances, it is not certain that even the standardization objectives were met consider- ing that the manufacturer concerned tends to make frequent changes in de- sign which affect the spare parts requirements. 12. The above raises the question whether the IDA should not have in- sisted on sufficiently broad specifications to encourage free competition. During the evaluation of the bids, the advantages of standardization could then have been weighed against possibly lower prices of competing makes. On the other hand, if for the sake of standardization competition had to be virtually excluded, the question arises why the appraisal did not identify the need for proprietary procurement. Lower than Anticipated Freight Traffic 13. As mentioned, passenger traffic grew slightly faster than fore- cast at the time of appraisal, with the 1976 passenger-km being 7% ahead 1/ The final cost, as mentioned in Table 1 of the PCR, was US$3.05 million. - 5 - of expectations. Freight traffic, however, stayed well behind the fore- cast, with the 1976 ton-km moved by the railway 32% below the appraisal estimates. The main reasons for this difference are the drought in the entire region in 1973 and 1974, deficiencies on the part of the Senegal Railway, a certain preference of some shippers to use the Port of Abidjan, while according to the PCR (para. 6.2), freight forecasts for some agri- cultural products were somewhat overoptimistic. 14. The effect of the drought was to reduce internal transport and transport of export products. At the same time, specially in 1974, it in- creased railway traffic through transport of relief supplies, thus in- creasing total ton-km to 11% above the 1971 figure,l/ while the new freight wagons had not yet arrived. This was possible because better cooperation was received from Senegal Railways, customs formalities were all but waived and the army took charge of part of the operations in Mali. Normally, how- ever, wagons appear to be retained in Senegal for long periods, thus seri- ously decreasing productivity. The international operations have since 1963 been guided by an agreement between the two countries, which regulates the international traffic but has little influence over speed and efficiency. In spite of the Association's efforts since the first project (1966), little progress has been made in improving the efficiency of international traffic operations. The covenant included in the present project which deals with this subject (see PCR, Annex 1) was too vaguely worded to be effective. Finally, under the third project,2/ detailed steps to solve the problem have been included as a loan covenant. 15. Forecasting the international traffic which makes up about 80% of the goods moved by the railway is complicated since it not only depends on traffic growth, but also on the amount of traffic which travels via Abidjan by preference and the aforementioned inefficiency of Senegal Railways. All available information indicates that transport via the Dakar route is cheaper than via Abidjan, mostly because Abidjan has to be reached by road or by road and rail, the latter solution involving transshipment costs. If the decision on which route to use were based purely on identified costs, virtually all international traffic would move through Dakar. In spite of this, the Gov- ernment of Mali as a matter of policy wants to keep using both routes, even though efforts are made to allocate more traffic through the Port of Dakar. These are handicapped, however, by the lesser transport efficiency on that route and also by the fact that some shippers for a variety of reasons pre- fer to use the more expensive route via Abidjan. Because of these intract- able problems, it is difficult to judge whether in fact the appraisal fore- casts for freight traffic were realistic. It should be noted, however, that as a result of the fact that freight traffic did not grow at all, the in- crease in freight wagon capacity was premature. 1/ According to the appraisal forecast, however, 1974 traffic was expected to be 25% higher than 1971 traffic. 2/ Mali Third Railway Project, signed on June 10, 1977. -6- Limited Success of the Credit Covenants 16. Annex 1 of the attached PCR reviews the various covenants in- cluded in the Credit Agreement. As indicated, Mali Railway did not fully meet the financial covenants. In spite of very substantial increases in rates and tariffs, the Railway had difficulty keeping up with the sharp inflationary increases in costs and was therefore unable to comply with all the agreements reached with the Association. It was unable to fully finance its share of the local cost of the project. It also had insuf- ficient funds to pay the Government the agreed interest or meet the pay- ments on the previous credits. Furthermore, it did not meet the required return on net fixed assets (see para. 6). These covenants by themselves, however, were not unreasonable, and if traffic would have been closer to the appraisal forecast, the financial covenants would probably have been met. 17. The targets set forth under the plan of action (see Table 6) were not fully complied with and achievements varied substantially over the years while no trend of improvements seems to be noticeable. The targets, however, were probably set somewhat too high as noted in the PCR (para. 5.1). Neverthe- less, several of the 1976 targets were met or almost met at some time during the project period, notably locomotive and railcar availability in 1975; railcar-km p.a. in 1976; availability of freight cars over most of the project period; average load per freight car in 1976; and average journey per freight car in 1974. The target for locomotive travel p.a. seemed reasonable since it required only a 15% increase, while availability was to increase by 30% but it was not met due to the surplus of locomotives. Low productivity of freight cars and high turnaround time of tank cars were specially the result of inefficiencies in the Senegalese system. Staff productivity went up consider- ably - from 110,000 traffic units in 1971 to 137,000 in 1976 - and the target of 155,000 might have been achieved if freight traffic had grown as expected. 18. A worrying aspect is that availability of locomotives and railcars has decreased in the last two years. For railcars, the decrease is only from 80% to 75%, but for locomotives, it dropped from 73% in 1975 to 52% in 1977. The latter is explained by the fact that the crankshafts of six locomotives have broken; these breaks were caused by a weakness in the design 1/ (which was not adapted to local conditions) and a lack of preventive maintenance. 19. In general, part of the problem of low locomotive availability seems to be due to the design where the locomotives are too complicated and 1/ The Central Projects Staff is of the view that this statement lacks proper evidence. OED's conclusion is based on the fact that repairs to locomotives were combined with a design modification in the form of an additional automatic greasing mechanism. - 5 - of expectations. Freight traffic, however, stayed well behind the fore- cast, with the 1976 ton-km moved by the railway 32% below the appraisal estimates. The main reasons for this difference are the drought in the entire region in 1973 and 1974, deficiencies on the part of the Senegal Railway, a certain preference of some shippers to use the Port of Abidjan, while according to the PCR (para. 6.2), freight forecasts for some agri- cultural products were somewhat overoptimistic. 14. The effect of the drought was to reduce internal transport and transport of export products. At the same time, specially in 1974, it in- creased railway traffic through transport of relief supplies, thus in- creasing total ton-km to 11% above the 1971 figure,l/ while the new freight wagons had not yet arrived. This was possible because better cooperation was received from Senegal Railways, customs formalities were all but waived and the army took charge of part of the operations in Mali. Normally, how- ever, wagons appear to be retained in Senegal for long periods, thus seri- ously decreasing productivity. The international operations have since 1963 been guided by an agreement between the two countries, which regulates the international traffic but has little influence over speed and efficiency. In spite of the Association's efforts since the first project (1966), little progress has been made in improving the efficiency of international traffic operations. The covenant included in the present project which deals with this subject (see PCR, Annex 1) was too vaguely worded to be effective. Finally, under the third project,2/ detailed steps to solve the problem have been included as a loan covenant. 15. Forecasting the international traffic which makes up about 80% of the goods moved by the railway is complicated since it not only depends on traffic growth, but also on the amount of traffic which travels via Abidjan by preference and the aforementioned inefficiency of Senegal Railways. All available information indicates that transport via the Dakar route is cheaper than via Abidjan, mostly because Abidjan has to be reached by road or by road and rail, the latter solution involving transshipment costs. If the decision on which route to use were based purely on identified costs, virtually all international traffic would move through Dakar. In spite of this, the Gov- ernment of Mali as a matter of policy wants to keep using both routes, even though efforts are made to allocate more traffic through the Port of Dakar. These are handicapped, however, by the lesser transport efficiency on that route and also by the fact that some shippers for a variety of reasons pre- fer to use the more expensive route via Abidjan. Because of these intract- able problems, it is difficult to judge whether in fact the appraisal fore- casts for freight traffic were realistic. It should be noted, however, that as a result of the fact that freight traffic did not grow at all, the in- crease in freight wagon capacity was premature. 1/ According to the appraisal forecast, however, 1974 traffic was expected to be 25% higher than 1971 traffic. 2/ Mali Third Railway Project, signed on June 10, 1977. -6- Limited Success of the Credit Covenants 16. Annex 1 of the attached PCR reviews the various covenants in- cluded in the Credit Agreement. As indicated, Mali Railway did not fully meet the financial covenants. In spite of very substantial increases in rates and tariffs, the Railway had difficulty keeping up with the sharp inflationary increases in costs and was therefore unable to comply with all the agreements reached with the Association. It was unable to fully finance its share of the local cost of the project. It also had insuf- ficient funds to pay the Government the agreed interest or meet the pay- ments on the previous credits. Furthermore, it did not meet the required return on net fixed assets (see para. 6). These covenants by themselves, however, were not unreasonable, and if traffic would have been closer to the appraisal forecast, the financial covenants would probably have been met. 17. The targets set forth under the plan of action (see Table 6) were not fully complied with and achievements varied substantially over the years while no trend of improvements seems to be noticeable. The targets, however, were probably set somewhat too high as noted in the PCR (para. 5.1). Neverthe- less, several of the 1976 targets were met or almost met at some time during the project period, notably locomotive and railcar availability in 1975; railcar-km p.a. in 1976; availability of freight cars over most of the project period; average load per freight car in 1976; and average journey per freight car in 1974. The target for locomotive travel p.a. seemed reasonable since it required only a 15% increase, while availability was to increase by 30% but it was not met due to the surplus of locomotives. Low productivity of freight cars and high turnaround time of tank cars were specially the result of inefficiencies in the Senegalese system. Staff productivity went up consider- ably - from 110,000 traffic units in 1971 to 137,000 in 1976 - and the target of 155,000 might have been achieved if freight traffic had grown as expected. 18. A worrying aspect is that availability of locomotives and railcars has decreased in the last two years. For railcars, the decrease is only from 80% to 75%, but for locomotives, it dropped from 73% in 1975 to 52% in 1977. The latter is explained by the fact that the crankshafts of six locomotives have broken; these breaks were caused by a weakness in the design 1/ (which was not adapted to local conditions) and a lack of preventive maintenance. 19. In general, part of the problem of low locomotive availability seems to be due to the design where the locomotives are too complicated and 1/ The Central Projects Staff is of the view that this statement lacks proper evidence. OED's conclusion is based on the fact that repairs to locomotives were combined with a design modification in the form of an additional automatic greasing mechanism. - 7 - ill adapted to local conditions.l/ All locomotives with the exception of the two bought by the cement factory are of the same make. This is the result of efforts to standardize even though in this case apparently the advantages are limited since substantial design changes took place during the periods which elapsed between locomotive purchases, resulting in different parts and service requirements. During the past four years, the availability of locomotives from the cement factory was on average about 15% higher than availabiilty of locomotives acquired almost simultaneously under the project. Considering the short period and the small number of locomotives involved, data are too limited to reach definite conclusions on the merits of a particular type of locomotive. However, the case does provide an indication that standardization can be undesirable when it is on a product which is not fully satisfactory. This aspect of the matter calls for careful consideration in future projects. III. Conclusions 20. The project has partially achieved its original purpose. It has provided the necessary extra passenger carrying capacity, while easing the locomotive situation. Civil works had to be postponed but are now be- ing implemented under the next project, using some materials and equipment purchased as part of the project under review. Freight wagon replacement was useful, but the additional wagons were acquired prematurely, since freight traffic did not grow; they are now in use, however, due to the de- creasing efficiency of the Senegalese system which leads to longer transit times. The project had a cost overrun of 71% which resulted from low ap- praisal estimates and inflation. Part of the project was therefore can- celled but the part which was implemented has been completed on time. 21. At the time of appraisal, motive power requirements were over- estimated by about two locomotives. Since freight traffic has not grown and track works were postponed, it appears that two more locomotives are not required for present traffic volumes. Investment in four out of the six new locomotives has therefore turned out to be premature. Since early 1978, the surplus of tractive power has been drastically reduced since six locomotives are awaiting repairs necessitated in part by design defects. However, this does not justify the overinvestment; rather, it points at the need for a small railway to acquire equipment with proven performance and avoiding all unnecessary sophistication. 1/ Central Projects staff is of the view that the locomotives referred to are not too complicated in design. OED's opinion is based on extensive discussions with railway engineers in the Regions which led to the conclusion that the locomotives in question have been designed for European operating conditions, i.e., well maintained tracks and a temperate climate, and include features which under rough track conditions, extreme temperatures and excessive sand and dust penetration frequently cause problems. - 8 - 22. Procurement of the railcars should not have taken place because (a) it resulted in further diversification of motive power, instead of sim- plifying operations and maintenance by using the same locomotives for both freight and passenger transport, and (b) at the time of procurement of the railcars, it was clear that excess locomotives were available, and there- fore by procuring 10 passenger coaches instead, savings of about US$1.5 million could have been realized. With this amount, a substantial part of the foreign exchange cost of the project items now deleted could have been covered. 23. The only bid for the railcars was high, even after taking into account the fact that the original estimates were too low, and that there was substantial inflation during the procurement period. The fact that only one bid was received was probably related to the specifications for the equip- ment. Specially in the case of relatively small orders, it is important that specifications are formulated in ranges to enable manufacturers to enter bids using their standard equipment. Alternatively, proprietary procurement might be justified. 24. The financial covenants in the Credit Agreement have been partially met. The Railway did not generate sufficient revenue to meet its commitments to the Government; the relationship between revenues and costs has, however, shown improvement compared to the previous project, although at 2% the finan- cial return was slightly below the target of 3.5% for 1977. 25. The Association's role has been somewhat weak. At the time of ap- praisal, it apparently did not exert its influence to reduce the program for locomotive procurement, while it grossly underestimated the cost of railcars and wagons. When the project was reorganized, the Association might have played a stronger role in avoiding railcar procurement and having the proj- ect completed as originally planned. - 9 - ATTACHMENT PROJECT COMPLETION REPORT MALI SECOND RAILWAY PROJECT (CREDIT 384-MLI) BACKGROUND 1.1 The Government of Mali asked the Association in 1972 to help finance a 1973-1976 investment plan designed to continue the physical rehabilitation of CFM's equipment initiated under the first project, and to improve its management, operations and finances. In May 1973, IDA approved a Credit of US$ 6.7 million for that purpose. 1.2 At the time the Board approved the project, the first project (Credit 95 MLI approved September 22, 1966, US$ 9.1 million) had been almost fully disbursed (98%). The physical program was being completed almost 3 years behind schedule mainly due to CFM's inexperience in procure- ment procedures and to delays by equipment suppliers. The Completion Report (May 1976) noted that, although the CFM's finances did not improve as expected, the size and scope of the first project were reasonable and the rehabilitation and modernization of the railway were reasonably well carried out. 1.3 Total expenditures for the second project were originally estimated at MF 4,300 million or about US$ 9.3 million equivalent (exchange rate US$=MF 460), including MF 400 million in local costs. The French Fonds d'Aide et de Cooperation (FAC) was expected to finance about MF 810 million. Major project items were track works, motive power and rolling stock, training of staff and consulting services for a management reorganization. As in the case of the first project, a parallel project was processed for Senegal Railway (Second Railway Project, Credit 314-SE, US$ 3.2 million/ Loan 835-SE, US$ 6.4 million,1972). 1.4 Covenants and commitments included in the Credit Agreement, the project agreement and relevant side letters and comments on their achievement are listed in Annex 1. Main particular covenants provided for: a) a financial rate of return target; b) investment and debt limitations during the project's implementation; and c) operational targets under the agreed plan of action. 1.5 As soon as the project was started, the Government and CFM were faced with the effects of the strong worldwide 1973 inflationary pressure. This phenomenon which lasted all through the execution of the project adversely affected its financing as well as CFM's financial performance. PROJECT COMPOSITION AND COST Project Composition 2.1 As originally conceived, the project comprised (Table 1) a) track renewal equipment and track renewal b) quarry equipment and track ballasting c) rail welding equipment and rail welding d) track maintenance equipment e) bridge repairs f) minor improvements to the Bamako marshalling yard - 10 - g) motive power and rolling stock h) accounting equipment i) a study of the railway's accounting, storekeeping, commercial and managerial information procedures j) overseas staff training k) training equipment 2.2 As soon as the first bids were received it appeared that because of low appraisal cost estimates aggravated by worldwide inflation, the cost of imported track equipment and rolling stock would far exceed appraisal estimates. Supplementary funds provided by France (CCCE) 1/. for freight cars and loco- motives, Germany (KFW) 2/ for freight cars and the takeover by Canada (CIDA) 3/ of the management study only partly offset these cost overruns. As neither the Government nor CFM were in a position to make up for the remaining financing gap, the following project items were deleted or postponed to be included later on in a Third Railway Project: a. laying of 21.5 km of new track material b. equipment for a railway-owned quarry except one truck and one drilling machine c. welding of rails except some test weldings d. bridge repairs e. improvements for the marshalling yard at Bamako f. all miscellaneous civil works g. two out of five shunters h. all four passenger cars i. 13% of the spare parts for rolling stock j. equipment for the accounting division k. overseas training of railway staff 1. 85% of the training equipment The decision to delete the procurement of quarry equipment without simultaneously deleting the supply of track rehabilitation and welding equipment was taken under the assumption that CFM would be able to double its share in the cost 1/ Caisse Centrale de Cooperation Economique 2/ Kreditanstalt fuer Wiederaufbau 3/ Canadian International Development Agency - 11 - of the project to MF 800 million to finance the procurement from local contractors of ballast required for implementing the track renewal and track welding components of the project. This assumption was questionable. Table 2 shows that CFM not only could not increase its financial participation but was, in fact, only able to provide MF 124 million on its share in the financing of the project instead of the revised MF 800 million. Consequently the track laying and track welding works were not executed. They are now included in the ongoing Third Railway Project. 2.3 With hindsight, a far better alternative to eliminating the quarry equipment from the project would have been reducing costs for the extremely expensive passenger equipment by shifting from railcar/trailer to locomotive/ cars. International competitive bidding for 2 railcars and 8 trailers attracted only one supplier, whose price was 281% higher than estimated. A rough calculation on the basis of international competitive bidding prices in 1975 indicates that 2 locomotives and 10 passenger cars could have been purchased for about US$ 2.3 million, US$ 0.75 million less than the cost of the railcar/trailer equipment. These savings would have allowed CFM to establish the quarry and to start the track rehabilitation program. Cost 2.4 Despite the partial or total deletion of project items (Table 1) the revised project cost exceeded original estimates by about 49%. One-third of this overrun is attributable to the expansion of the management study under CIDA financing. The heaviest cost overrun occurred for railcars and trailers (281%), freight cars (160%) and track equipment and material (51%). The cost overrun for shunters was 41%. Table 1 shows actual foreign, local and total project costs compared to appraisal estimates. The table is summarized below: Project Cost ---------- Appraisal--------- --------Actual------------ (US$ million) (US$ million) 1/ Local Foreign Total Local Foreign Total Track and building 0.67 1.83 2.50 0.28 1.49 1.77 Rolling Stock - 5.33 5.33 - 9.81 9.81 Management - 0.63 0.63 - 2.29 2.29 Contingencies 0.20 0.67 0.87 - - - Total 0.87 8.46 9.33 0.28 13.59 13.87 1/ The decrease is explained by deletions. Equipment actually purchased suffered a 51% cost overrun. Financing 2.5 The following table compares actual project financing with appraisal forecasts. Details are in Table 2. PROJECT FINANCING ( US$ million) Appraisal estimate Actual Total CFM FAC IDA Total CF1 CIDA CCCE FAC KFW IDA Track renewal 0.82 0.15 0.67 1.05 0.11 0.94 Quarry equipment and ballasting 0.59 0.20 0.39 0.16 0.12 0.04 Railwelding equipment and welding 0.43 0.06 0.37 0.45 0.05 0.40 Other track maintenance equipment and works 0.66 0.26 0.40 0.11 0.11 Rolling stock 5.33 1.70 3.63 9.81 1.59 1.36 1.67 5.19 Management study 0.45 0.45 2.27 2.27 Training 0.18 0.18 0.02 0.02 Contingencies 0.87 0.21 0.05 0.61 TOTAL 9.33 0.88 1.75 6.70 13.87 0.28 2.27 1.59 1.36 1.67 6.70 - 13 - Implementation 2.6 The project became effective in September 1973; the first dis- bursement from the Credit was scheduled for late 1973. Substantial cost overruns and project restructuring resulted in delays in commencing Credit disbursements, and later the disbursement schedule was adjusted twice to correspond to actual project progress. In spite of all delays, the Credit was fully disbursed on August 10, 1977, only one month behind appraisal schedule since all of the time-consuming civil works components had been deleted from the project. A comparison between actual and estimated quarterly disbursement is shown in Table 3. Annual disbursements by category are shown in Table 4. Procurement 2.7 For IDA-financed project items, CFM followed international compe- titive bidding (ICB) procurement procedures to purchase track material and equipment, 1 shunting locomotive, railcars and freight cars. Spare parts and standardized equipment were purchased from the original supplier (POS). Training material and equipment were purchased by local or international shopping (LSH/ISH). The following table provides details: Actual Procurement Procedures followed for IDA-Credit (US$ million) Project Categories ICB POS ISH/LSH TOTAL I Track 1.37 0.12 - 1.49 II Rolling Stock 5.13 0.06 - 5.19 III Training & Consulting Service - 0.01 0.01 0.02 Total 6.50 0.19 0.01 6.70 % 97 2.9 0.01 100 Canadian and French contributions to the project were tied aid and used to finance Canadian consulting services and French equipment, respectively. Aid from the Federal Republic of Germany was used to cover cost overruns on the contract for the provision of freight cars which had been signed between CFM and the French supplier Cadoux. PHYSICAL EXECUTION Track and Building 3.1 The Credit provided funds to buy material for the renewal of 21.5 km of track between Kayes and the Senegalese border. The rails were welded at the Thies welding plant and transported to Kayes in September 1976. Sleepers and fastenings were shipped directly to the site. Laying the rails, however, had to be deleted from the project because of lack of ballast (see para. 2.2). The material will be used as planned as soon as ballast from the new quarry, financed under the Third Railway Project, is available. - 14 - 3.2 As ballast was lacking on about 210 km of track, the project provided financing for quarry equipment. Except for one truck and a drilling machine this item was deleted from the project to make up for cost overruns on rolling stock (para 2.2). The truck is used for general railway purposes and the drilling machine is stored in Bamako. It will be used when CFM's quarry comes into operation under the third project. 3.3 Prior to the project, rail joint welding had been carried out over 110 km of track. To facilitate continuation of the welding program, the project included the supply of an electric in-track welding machine under IDA financing. CFM was expected to finance local labor and operating costs of the program. The welding machine was delivered in December 1975, but because of technical problems with it and the lack of ballast the program was not started. Only test weldings were done. The welding machine is in working condition and the welding program will be implemented under the third Project. 3.4 Track maintenance equipment and spare parts for ballast tampers were delivered in March 1976. 3.5 Maintenace of bridges and the first phase of the construction of a new marshalling yard at Bamako were completely deleted from the project. Rehabilitation of bridges is the main component of the third Project. Rolling Stock 3.6 Four mainline locomotives financed ,by FAC and CCCE were delivered in late 1973. Of the five shunters originally included in the project, two financed by FAC were put into service in December 1973, one financed by IDA arrived in Mali in April 1976, and two were deleted from the project. Two railcars and eight trailers, financed by IDA, were delivered in May 1976. The four passenger cars were deleted. The original project included 125 freight cars to be financed by IDA. However, the funds allocated for this item could finance only 54 freight cars (49 cars and 5 ballast cars). These were ordered in 1974 and put in service during 1975. As 72 additional freight cars (17 box cars, 3 ballast cars, 20 tank cars, 19 high-sided open cars, 9 flat cars, 2 well cars and 2 car-carriers) were financed by CCCE/FAC (31) and KFW (41) and delivered in mid-1976 and in mid-1977, CFM received one car more than anticipated under the original project. Spare parts for rolling stock and motive power ordered under the first project but actually financed under this project were delivered in 1974 and 1976. 3.7 Accounting and statistical equipment and overseas training of rail- way staff were deleted from the project. The original allowance made for training equipment was reduced by 85%. Because of the lack of local funds the rehabilitation of training facilities wherb this equipment was supposed to be used had to be delayed. Consequently, had the equipment been delivered, it would not have been used properly. Some small equipment was purchased and is used in existing facilities. The training abroad component of the project was taken over by CIDA under the expanded management study (para 3.8). - 15 - Consulting Services 3.8 The original project provided for consulting services to carry out a study to improve: a) CFM's management information and planning procedures; b) storekeeping; c) accounting system; d) personnel management; and e) commercial practices. When CANAC took over the study in 1974, it expanded it to a full reorganization of CFM under CIDA financing and provided technical assistance to help implement its recommendations. (para. 4.2) INSTITUTIONAL DEVELOPMENT Board 4.1 Under Law 67.40 of July 18, 1967, CFM is under the authority of the Minister of Transport and Public Works, who also serves as Chairman of CFM's 16-member board. The board is composed of six ministers, the Director of Post and Telecommunications and nine other members representing the users, the National Assembly and staff. Management 4.2 Following CANAC's recommendations CFM has been completely reor- ganized. The new organization has five departments: planning and finances; operations; marketing; personnel; and supply and stores. Each is under a director reporting to the General Manager who is assisted by an assistant general manager, a legal advisor and an administrative assistant. The assistant general manager acts ex officio as director of the planning, accounting and control department whose project division supervises major investment programs. The director of operations coordinates the activities of the track and building and mechanical divisions. Marketing and tariff-setting are the responsibility of the marketing director. In addition to being responsible for staff management, the director of personnel has authority over the training division. Supplies and stores are under the control of the director of supply and stores. A management committee, consisting of the General Manager and the five directors, meets weekly to coordinate the work of the different departments. The new organization was put into effect between 1975 and 1977 and has been an important factor behind the improvement in CFM's managerial, operating, and financial performance. Audit 4.3 Each year since 1972, CFM has appointed suitable auditors and provided the Association with satisfactory reports within the six months provided for under Section 4.02 of the Project Agreement. OPERATIONS 5.1 Table 5 gives a summary of CFM's operating statistics from 1972 through 1976 and Table 6 compares operating targets set at appraisal with actual results for the same period. In general, appraisal targets were unrealistically high and, while on the whole CFM's operating performance improved, it could not meet its objectives. -n 16 - 5.2 Improvement in motive power availability was uneven. The average availability of heavy locomotives increased thanks to the supply under the project of six new locomotives and of spare parts to rehabilitate the nine existing ones. On the other hand, availability of the small locomotives, all more than 20 years old, decreased mainly because suppliers discontinued manufacturing spare parts. 5.3 Statistics show a decrease in freight car availability of 6%. This figure is misleading because it takes into account overaged cars which could not be efficiently used. If these cars had been written off as they should have been, it is likely that availability figures would have shown an increase. The availability of passenger cars decreased by 8% because superannuated stock deteriorated and CFM lacked funds to buy spare parts. 5.4 The decision made at appraisal to provide the railway with six new locomotives was based on the need to increase its capacity to handle forecast traffic. However, actual traffic was 22% below forecast. The additional capacity was consequently not fully utilized except in 1973 and 1974 when CFM had to carry drought relief traffic. This explains the deterioration of equipment utilization factors. Average annual locomotive and railcar kilometers per unit available decreased from 144,000 km in 1972 to 101,000 in 1976. The ratio of ton kilometers per available horsepower deteriorated in parallel from 22,171 ton/kilometers in 1972 to 17,834 ton/km in 1976. In 1977 CFM's traffic increased and the utilization of available equipment went up accordingly. Freight car turnaround time was high (averaging 16 days in 1976) due mainly to slow terminal operations in Dakar port and in Bamako. 5.5 Because total traffic increased steadily and the number of staff remained practically constant during the project's period, staff productivity increased by 37%, between 1972 and 1976, reaching an acceptable 137,000 traffic units per staff member during the latter year. 5.6 CFM's operating performance during project execution (1972-1977) was severely hampered by inadequate cooperation between itself and the Senegalese Railway (CFS). This has been a problem since 1960 when the Dakar-Bamako railway was divided between Senegal and Mali. Contacts between the two head offices were sporadic and unproductive. Operational regulations, technical standards and maintenance standards are dissimilar. There is no efficient wagon distribution and train control system between the Dakar port and Bamako. Cumbersome customs procedures result in long immobilizations of freight cars in Dakar port, further complicating operations. Track is in poor condition over much of the Senegalese section of the international line. In addition, CFS's severe difficulties in training and motivating operating staff adversely affected the quality of operation along the international line. Because of the above problem, much international traffic was diverted to the more expensive Abidjan route (para. 6.2) to the detriment of both railways' operating and financial performance. The Association's supervision missions helped CFM to overcome its operating difficulties and improve its cooperation with CFS (para 9.2). The Bank is helping CFS to improve its operational performance under parallel projects in Senegal (Second and Third Senegal Railway Projects). - 17 - TRAFFIC 6.1 The appraisal forecast of freight traffic was based on a specific product analysis and was consistent with the results of a macro-economic model using GDP and average revenue per ton/km (in constant prices) as explanatory variables of traffic growth. The forecast estimated that freight traffic would grow from 324,000 tons in 1971 to 447,000 tons in 1976 (last year of the investment plan) and 497,000 tons in 1978. The average growth rate expected during 1971-1976 was 6.6% in tons and 7.1% in ton/km. By contrast, actual 1976 freight traffic was 326,000 tons, or almost the level of 1971. Freight traffic fluctuated markedly during the period due to the drought that devastated Mali's crops in 1972-74. The drought severely reduced food production, requiring massive quantities of imports and leaving no surpluses for export. In 1974, the peak year for drought traffic, traffic reached 97% of the appraisal forecast. The percentage dropped to 73% in 1976 and should go up to 83% in 1978 as a result of increases in operational efficiency expected under the Third Railway Project. 6.2 A comparison between appraisal and actual figures for main commodities for selected years is shown on the following table. Mali Railway Traffic ('000 tons) 1971 1974 1976 1978 Actual Actual Forecast Actual Forecast Revised Forecast 3/ National Traffic Cement 38 43 51 38 60 52 Other 38 49 47 49 49 53 Total 76 92 98 87 109 105 Exports Cotton 1/ 16 4 23 10 26 19 Groundnuts 2/ 42 21 49 37 65 44 Cola nuts 8 10 19 12 21 16 Karite 11 - 7 4 7 2 Other 11 17 12 31 13 21 Total 88 52 110 94 132 102 - 18 - 1971 1974 1976 1978 Actual Actual Forecast Actual Forecast Revised Forecast 3/ Imports Cement 7 5 - 18 - 15 Machinery, veh., materials 12 10 18 8 23 15 Fertilizers 8 3 11 17 13 16 Foodstuffs 63 162 63 18 63 50 Petroleum Prod. 36 32 56 42 61 64 Salt 17 19 23 24 25 23 Other 17 11 20 18 20 21 Total 160 242 191 145 205 204 TOTAL TRAFFIC 324 386 399 326 446 411 More details are given in Tables 14 and 15. Discrepancies between forecast and actual traffic for main traffic categories are due to: (a) National traffic: At appraisal the cement plant in Diamou was expected to reach its theoretical operating capacity of 70,000 tons/year by 1978. However, production reached only 38,000 tons in 1976 (against a forecast of 60,000 tons) and is expected to reach at best 52,000 tons in 1978. (b) Exports: While the drought was the main reason for the shortfall in practically all items, another was that forecasts of production of groundnuts and cotton were optimistic even under normal climatic conditions. Exports picked up in 1976 when good crops allowed the export of surplus cereal production. (c) Imports: The effect of the drought was largely reflected in the large amounts of foodstuffs imported in 1973 and 1974. Cement imports, not foreseen at appraisal, resulted from the short-fall in domestic production. Petroleum imports via Dakar were expected to grow steadily from 36,000 tons in 1971 to 61,000 tons in 1976 by recapturing traffic moving via Abidjan on the basis of: a) expected improved operational efficiency and increase in capacity to be provided by the 20 tank cars included in the Project, and b) the substantial differential in transport costs (about 1/ Including seeds, fiber, textiles 2/ Including shells, oil and cake 3/ Mali, Third Railway Project - 19 - MF 20,000/ton in 1976) between the Abidjan routes and the Mali-Senegal Railway in favor of the latter. However, this traffic actually remained stagnant until 1975 despite lower costs over the Dakar route. In 1976 the Government put pressure on the oil companies operating in Mali to increase use of the Dakar route and in 1977 petroleum traffic over the Senegal-Mali Railway reached a near high of 50,000 tons. Because of:a) the inefficiency of CFS's operations at Dakar Port and along the Senegalese part of the international line; b) CFM's inadequate service; and c) the consequent unwillingness of Mali's transport regulatory agency to encourage more traffic via Dakar, a substantial share of Mali's non-petroleum imports and exports was diverted to the more expensive Abidjan route. This tratfic diversion adversely affected the Malian economy and CFM's financial performance. The Association is helping CFM to take action aimed at recovering part of the diverted traffic. FINANCIAL PERFORMANCE Background 7.1 Under the combined effect of insufficient traffic and low tariffs, the railway's performance during implementation of the first project was poor. This resulted in a difficult financial situation at the start of the second project. CFM's balance sheet as of December 31, 1971 showed a current assets-to-current liabilities ratio of 0.8 and a liquid assets-to-current liabilities ratio of 0.5, both unacceptable. The objective of this analysis is to examine the extent to which CFM its performance under the Second Railway Project. Income Account 7.2 CFM's income account from 1967/68 to 1977 is detailed in Tables 7 and 8. Table 7 shows actual results and Table 8, which covers the period of project implementation, gives appraisal estimates and actuals. These tables are summarized on the following page for selected years. - 20 - (Mali francs million) 1967/68 1/ 1970 1972 1975 1977 Operating Revenue Appr. Act. Appr. Act. Appr. Act. Appr. Act. Appr. Act. Passengers 240 398 263 493 520 588 696 938 830 1171 Freight 1070 940 1255 1402 1313 1270 2076 2113 2380 2822 Sundries 85 136 88 192 130 205 108 184 121 182 TOTAL 1395 1474 1606 2087 1963 2063 2880 3235 3331 4175 Operating Expenses Staff costs 653 828 617 766 .762 805 946 1011 1043 1233 Other costs 405 552 383 854 882 1020 1096 1760 1218 1551 Working costs 1058 1380 1000 1620 1644 1825 2042 2771 2261 2784 Depreciation 213 204 234 438 420 408 490 518 520 750 Total OperatingExp. 1251 1524 1234 2058 2064 2233 2532 3289 2781 3534 Net Operating Rev. 124 (110) 372 29 (101) (170) 348 (54) 550 643 Interest Charges 90 46 134 194 240 272 387 415 489 540 Net Operating Surplus 34 (156) 238 (165) (341) (442) (39) (469) 61 103 Exceptional Rev. (loss) - (4) - (75) - (56) - (18) - 12 Net Surplus 34 (160) 238 (240) (341) (498) (39) (487) 61 91 Ratios Staff cost/total working costs % 62 60 62 47 46 44 46 36 46 44 Working % 76 94 63 78 84 88 71 86 68 67 Operating % 90 107 77 99 105 108 90 102 85 85 Average net fixed assets in use 6780 5528 7574 9193 10418 10431 12306 12130 13596 15724 Return on net fixed assets in use % 1.8 (1.9) 4.9 0.3 (0.9) (1.6) 2.8 (0.4) 4.0 4.1 1/ First Railway Project Appraisal Report - 21 - 7.3 The fiscal years shown were selected for the following reasons: 1967/68 allowed assessment of the impact on CFM's financial performance of the May 1967 50% devaluation of the Mali Franc; 1970 reflected the impact of the January 1, 1970 tariff increase (15% on passengers, 10% on freight); 1972 was the year in which the project was appraised; 1975 was the year in which the project was revised; and 1977 was the year in which the project was completed. 7.4 The table shows that revenues from passenger traffic exceeded appraisal forecasts for each year between 1967/68 and 1977 due to higher than forecast traffic and tariff increases totalling 75%, of which 40% was implemented between 1972 and 1977. Revenues from freight traffic were below forecasts through 1974 because traffic between 1967/68 and 1977 was about 25% below forecasts and tariffs increased only 10% between 1967/68 and 1974. During 1975-77, revenues from freight traffic were slightly above forecasts because tariffs increased 66% during that period. The high tariff increases implemented since 1972 reflect inflationary pressure during project implementation and explain why total operating revenues increasingly surpassed appraisal forecasts. However, the higher revenues were not enough to offset increases in operating cost. Operating Expenses 7.5 Increases in operating expenses and CFM's inadequate traffic per- formance explain why working and operating ratios were higher than expected at appraisal. However, the decline in these ratios over 1972-1977 reflects the railway management's success in reducing operating costs, particularly staff costs which decreased from 60% of total working costs in 1967/68 to 44% in 1977 despite several salary increases. During the First Railway Project, CFM reduced operating staff from 1,870 in 1964/65 to 1,590 in 1969 and since then has kept it practically steady. CFM could probably not have reduced its working expenses further during implementation of the project. Nor could it have reduced operating expenses further, as annual depreciation provisions represented a minimal 3% of gross fixed assets in use (see para. 7.6). Net Operating Revenue and Rate of Return on Average Net Fixed Assets in Use 7.6 During implementation of the first project (1964/65-1974), CFM had a net operating loss of MF 1.55 billion, 8.4% of its cumulated operating gross revenue of MF 18.5 billion. CFM performed much better under the second project (1972-1977): its cumulated operating revenue enabled it to cover fully its operating expenses (working expenses plus depreciation). The better performance is confirmed by the improvement in CFM's annual rates of return on net fixed assets in use which rose from (2.2%) in 1974 to 4.1% in 1977. The latter rate is more than was anticipated at appraisal. However, CFM has not revalued its fixed assets since 1969 despite inflation. The value of net fixed assets as of December 31, 1977 should be revalued by about 36% and the 1977 depreciation provision by about 38%. Based on these assumptions, the actual 1977 rate of return would be 1.7%. 7.7 Since tariff increases were implemented too late during the project period and operating costs could not be further reduced, CFM's net operating revenue could only have increased through higher traffic. This increase would have been possible had CFM been able to handle part of the substantial - 22 - amount of Mali imports and exports diverted to the more expensive Abidjan routes. Table 13 shows that CFM would have increased its cumulated 1972-1977 net operating revenue by MF 2.2 billion if it had kchieved appraisal traffic forecasts. The additional revenue would have allowed it to achieve rates of return on net fixed assets in use close to the ones set forth under the Project Agreement starting in 1975. It would also have allowed CFM to comply with the debt service limitation oovenant provided under Section 4.03 of the Project Agreement starting with 1976 despite the increase in borrowing caused by the cost overrun under the project. 7.8 Although encouraging, CFM's financial performance during implementation of the project was not satisfactory: CFM's income account showed a cumulated net deficit of about MF 2.4 billion during 1972-1977. As the net operating accounts were balanced at the net operating revenue level, the deficit represents interest on long term debt (MF 2.4 billion). At the request of the Association and in compliance with CFM's statutes, the Government agreed to provide CFM with a subsidy to cover this deficit prior to the start of the third project which was approved by the Board in May 1977. The most important part of the subsidy consisted of the Government's waiver of overdue taxes and IDA interest and principal owed to it by CFM under onlending Agreeme2nts of Credits 95-MLI and 384-MLI. Source and Application of Funds 7.9 CFM's annual sources and applicatinn of funds from 1967/68 to 1971, (5 years prior to start of the project) and from 1972 to 1977 (second project) are shown in Tables 9 and 10. Cumulated amounts for each of these periods are summarized below. MF MILLION Sources 1967/68-71 1972-1977 Actual Actual Railway's cash generation 1,309 3,240 Gov't grants against operating losses 60 3,884 Decrease in working capital 773 Total Source 2,142 7,124 Applications Investments 4,921 11,130 minus Loans 3,411 6,377 Grants for investments 29 2,100 subtotal CFM's participation in investments 1,481 2,653 Debt service 661 3,017 Increase in working capital - 1,454 Total Application 2,142 7,124 - 23 - The table shows that CFM's cash generation during 1967/68-71 was MF 773 million short of financing its share of investments. Therefore, it had to decrease working capital to finance both this gap and its debt service. The cash generation from 1972 to 1977 improved and CFM was able to finance its share of capital investments and 19% of its debt service. The subsidy against operating losses was used to finance the rest of the debt service and to restore working capital. However, as explained in para. 7.7, this subsidy was only necessary because of CFM's insufficient traffic performance. Balance Sheet 7.10 CFM's detailed balance sheet resulting from the above analysis is given in Tables 11 and 12 and summarized on the following page. - 24 - Mali Francs Million As of: June 30, 1968 December 31,1971 December 31, 1977 Actual Actual Actual Net Current Assets (593) (340) 740 Net fixed assets in use 5,488 10,286 16,255 Works in Progress 1,309 538 1,000 TOTAL ASSETS 6,204 10,484 17,995 FINANCED FROM Loan Capital 790 3,782 9,475 Equity Equivalent Capital 5,890 5,890 5,890 Subsidies 254 283 2,288 Revaluation reserve - 2,099 2,095 & reserve acct. (1,855) (2,725) (6,792) Gov't Subsidies against operating losses 1,125 1,155 5,039 Subtotal Equity equiv. 5,414 6,702 8,520 TOTAL LIABILITIES 6,204 10,484 17,995 RATIOS Current 0.7 0.6 1.38 Debt to Equity 13/87 36/64 53/47 - 25 - Because it suffered heavy losses between June 30, 1968 and December 31, 1977, CFM's increase in working capital and fixed assets was entirely financed from external funds. During implementation of the project (1972-1977) the MF 7.7 billion increase in assets (working capital MF 1.4 billion, capital investments MF 6.3 billion) was financed from an increase in loan capital of MF 5.5 billion and in grants for capital investments amounting to MF 2.2 billion. Even if CFM had achieved appraisal traffic forecasts and generated the additional revenue mentioned in para. 7.7, it would have been entirely dependent upon external funds to implement the project. The additional operating revenue would only have allowed the Government to decrease subsidies against operating losses. 7.11 Thanks to the external financial assistance to CFM, the financial situation as of December 30, 1977 is acceptable, despite its unsatisfactory operating and financial performance during implementation of the project. The 1.8 current ratio reflects an acceptable working capital and the 51/49 debt-to-equity ratio would improve if the equity was increased by a revaluation of fixed assets. Conclusion 7.12 Annex I lists covenants and targets agreed upon between the Government, CFM and the Association under the project, and notes on their achievement. The finance-related covenants set targets for annual rates of return on net fixed assets in use and provide for limitation on CFM's annual debt service. In order to finance the project's cost overrun through additional borrowing, the Association waived the latter covenant early in 1974. While CFM was only able to meet the agreed rate of return on investment in 1977 its net operating revenue performance has shown an improving trend through implementation of the project. However, because of its inadequate traffic performance, the railway was unable to generate enough revenue to pay its debt service. The Government therefore had to make up for the shortfall by waiving payment of MF 3.9 billion of debts to it. Thanks to this waiver, CFM's working capital reached an acceptable level at the end of 1977. However, CFM's long-term debt burden is heavy because of the additional borrowing undertaken to finance the substantial cost overrun of the project. 7.13 The long-term debt was a major concern to the Association when the Government and the railway asked it in late 1975 to finance a third project aimed at continuing the rehabilitation of CFM's infrastructure (mainly bridges) and equipment. Taking into consideration the importance of the railway to the Malian economy, the Association agreed to help finance the third project but with provisions that would virtually guarantee improvement. ECONOMIC EVALUATION General 8.1 At appraisal of the project, the economic evaluation consisted of an analysis of the project as a whole and some components to establish their individual justification. The evaluation of the whole project, which yielded an 18% rate of return, was based on the assumption that the railway was operating at its freight transport capacity and any increases in future traffic would have to be diverted to the more costly Abidjan routes. Under this approach, all project costs were considered, but only the benefits from investments increasin capacity were quantified; benefits stemming from the proposed track rehabilitation program and from passenger equipment were omitted. Therefore, the appraisal - 26 - methodoloev substantially underestimated the potential return of the project. 8.2 In the present economic reassessment, all components have been evaluated separately and the project's overall return determined by considering all costs and benefits (see Annex II). Track 8.3 Most of the original elements of the track program were deleted from the project. The only elements actually carried out were purchases of material for renewal of 21.5 km of track (but not the renewal itself) and of welding equipment, both of which are essential to the execution of the track program under the third project, and the benefits quantified in the latter. These benefits include savings in derailment costs, track maintenance costs, rolling stock maintenance, rail cuts, and postponement of track renewal. The return is 15%, slightly higher than the 14% estimated at appraisal of the second project. This is explained by the fact that while the costs of the track program are now substantially higher, unit benefits have (probably) increased proportionately and the four-year delay in implementing the program has resulted in a further deterioration of the track, thereby making the need for rehabilitation more pressing. Railcars and Trailers 8.4 In the appraisal, the return on this item was 12%, based on taking revenues as the minimum economic benefit for the investment in the absence of any transport alternative. In recalculating the return on this invest- ment, the same approach as at appraisal has been followed, which gives a rate of return of 12%. It is striking that although actual investment costs were 281% higher than estimated at appraisal, the rate of return is the same in both cases. The explanation lies in the computation of net revenues generated by the two new railcar sets. The appraisal report does not indicate the amount of revenues that the new railcars were supposed to generate. The present analysis has been based on an annual mileage per railcar set ranging from 100,000 km/year at the beginning to 60,000 km/year at the end of their economic life; occupancy factor of 80%; gross revenues of MF 7.30/pass-km in second class and MF 11.20/pass-km in first class (1976 prices); and annual maintenance and operating costs of MF 83.2 million/railcar set. These figures are based on the evaluation of the purchase of one railcar set in the third project. Two likely sources of differences in benefit quantification between the appraisal and the present evaluation are: a) four passenger coaches originally included in the second project were later deleted; not purchasing such equipment resulted in higher utilization of the passenger cars and; b) as a result of the plan of action under the third project, the annual mileage of railcars is now expected to be higher than foreseen at appraisal of the second project. Locomotives and Freight Cars 8.5 This component was not evaluated separately at appraisal, but only as a part of the whole project. Locomotives and freight car purchases under the project prevented a drop in the railway's freight transport capacity, which would have resulted from deterioration of existing equipment, and provided the additional capacity needed during 1973-1974 to carry the high - 27 - volumes of drought relief supplies. In calculating the ex-post rate of return, the following assumptions have been made: a) the railway was operating at full capacity in 1971 and its capacity would have decreased through a steady drop in locomotive availability (1% per year) and a phasing out of the old freight cars (20% per year during 1975-1979). b) traffic not carried for lack of capacity in the "without" situation would have traveled via Abidjan at higher transport costs; c) freight transport capacity was calculated separately for locomotive and rolling stock purchases, and the highest of both was considered as the level of potentially diverted traffic; and d) two locomotives, owned by the Diamou cement plant and purchased by the railway in 1973, were also considered as an investment made during the project and their estimated costs included in this economic evaluation. This component had a satisfactory rate of return of 16%, despite only a modest traffic increase since appraisal. This return results from the high economic benefits to Mali of avoiding traffic diversion to the Abidjan routes and from traffic increases expected under the third project (which will occur during the economic life of the locomotives and rolling stock purchased under the second project). Tank Cars 8.6 At appraisal, this component had a return of 15%; for the "without" situation, the evaluation assumed that the railways would rent equipment from a private transport company (Compagnie Africaine des Transport, CAT), then supplying some tank wagons to CFM. In retrospect, this looks highly improbable, as large volumes of petroleum products were transported via Abidjan becuase CFM/CFS and CAT did not reach an agreement on the rental of additional tankers. Therefore, the re-evaluation assumes that the real alternative to this investment would have been diversion of traffic. At a cost differential of MF 20,344/ton 1/ (1976 prices) between the Dakar and the Abidjan routes, the rate of return for this investment would be 49%. Conclusion 8.7 Considering costs and benefits of all components (and including the costs of management consulting services), the re-evaluation yields an overall economic rate of return of 15%. This return is, however, largely prospective as most project components (freight cars, railcars, tank cars) have been in use for only one or two years, and the track program is still to be executed. 8.8 There is a marked contrast between the project's satisfactory rate of return and the late improvement in the railway's finances. As in the case of the first Project, where a similar phenomenon was noted in the Completion Report, the project helped reduce traffic diversion to the more expensive Ivory Coast routes. While this yielded substantial economic 1/ Mali-Third Railway Project Appraisal Report - 28 - benefits, CFM was unable to carry all the traffic increases forecast at appraisal and therefore was unable to generate higher revenues. In addition, the railway's financial situation was hampered by the Government's reluctance to raise tariffs for political reasons. During the period of high inflation (1973-75), CFM freight tariffs were increased by a low 10% anL only towards the end of the project were tariffs brought more in line with inflation. THE ROLE OF IDA Project Composition and Financing 9.1 In mid-1974, when it became clear that severe cost overruns made the project impossible to execute as originally planned, IDA supervision missions worked closely with CFM management to reorganize it to fit available funds. The Association also was successful in helping to find additional financing for priority items from Germany and France. Cooperation between Mali and Senegal Railways 9.2 An important cause behind the disappointing operations of CFM has been the lack of coordination with the Senegalese railway. This was a crucial problem during the first project, and the Completion Report acknowledged that the Association had very little success in bringing about greater cooperation between the two railways. The appraisal report of the second project did not identify this issue, and no special measures were planned to improve cooperation between the railways. Despite this, supervision missions were able to bring about improvements toward the end of the project. Major achievements were made in the following areas: a) Interpenetration of locomotives. In 1976, a system was started under which Malian locomotives were allowed to haul trains to Tambacounda in Senegal, and Senegalese locomotives to reach Kayes in Mali. This procedure has become standard practice and has resulted in a better utilization of motive power and reduced immobilization time for rolling stock. b) Improvement in petroleum traffic. To speed the shipment of petroleum products from Dakar to Mali, the Senegalese Government and the petroleum companies agreed in 1976 to load these products at one site in Dakar instead of three. This has greatly simplified loading and eased marshalling yard operations at Dakar. Transport of petroleum has been further enhanced by the preparation of detailed transport plans and the signing, under the third project, of long-term transport contracts between the two railways and the petroleum companies in Mali and in Senegal. c) Elimination of cumbersome customs procedures. Transit traffic through Senegal is regulated by an agreement between the governments of Senegal and Mali providing for tax-free move- ment of goods between the two countries. In early 1976, to cut down on smuggling, the two governments set up complicated custom procedures that resulted in long delays. The governments have temporarily suspended the procedures and agreed, under covenants in the Mali and Senegal Third Railway Projects, to draft a new agreement in consultation with the Association. - 29 - d) Improvement in Dakar operations. The supervision missions reviewed terminal operations for international traffic in Dakar and worked out a plan for better terminal operations among CFM and CFS representatives, Mali and Senegal customs and Mali Free Zone at Dakar Port. Finances 9.3 The Association played an important role in persuading the Government that tariffs should be increased at least to cover increases in input costs. Although with some delays, freight tariffs were increased on the average by 83% during 1972 and 1977 practically catching up with inflation. The Association also helped CFM to restore its financial situation by reaching agreement with the Government that the latter would waive collecting payment of CFM's debts to it. Supervision 9.4 The most useful role of IDA consisted in providing the Government and CFM's management with comments and advice on the railway's technical and financial performance during supervision missions. The missions' advice covered fields as varied as: curbing traffic allocations by the Government's "Office National des Transports," improving maintenance procedures and boosting marketing action. In addition to sometimes smoothing relations between the railway and Government Departments and Agencies, the missions' action helped to keep up the morale of the railway's managerial staff in accomplishing its difficult task. - 30 - MALI Table 1 SECOND RAILWAY PROJECT COMPLETION REPORT Total Project Cost (Millions of MF and US$) Project Items Included in Project Items Deleted from APPRAISAL ESTIMATF --------------- ACTUAlr--- Original Plan Original Plan Exchange Ra-e: US1460MF LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL MF US$ 1y US$ MF US$ MF US$ MF US$ MF US$ Track and Building Material for track renewal 70 0.15 310 0.67 380 0.82 48 0.11 339 0.94 447 1.05 and renewal -21.5km Renewal -21.5km Quarry equipment and Deleted 93% 90 0.20 180 0.39 270 0.59 53 0.12 17 0.04 70 0.16 ballasting Rail welding equipment Rail welding 30 0.06 170 0.37 200 0.43 23 0.05 179 0.40 202 0.45 and rail welding Track maintenance - - 50 0.11 50 0.11 - - 50 0.11 50 0.11 equipment Bridge repairs Deleted 100% 30 0.06 120 0.26 150 0.32 Marshalling yard Bamako Deleted 100% 30 0.07 15 0.03 45 0.10 Miscellaneous works Deleted 100% 60 0 13 - - 60 0.13 Subtotal 310 0.67 845 1.83 1,155 2.50 124 0.28 645 1.49 769 1.77 Rolling Stock Main Line Locomotives -4 - - - 580 1.26 580 1.26 - - 522 1.20 522 1.20 Shunting Locomotives -5 Deleted 2 - - 330 0.72 330 0.72 - - 284 0.61 284 0.61 Railcars and trailers 2&8 - - - 370 0.80 370 0.80 - - 1,344 3.05 1,344 3.05 Passenger coaches -4 Deleted 100% - - 185 0.40 185 0.40 - - - - - - Freight wagons -125-t25 (Delivered 126) - - 820 1.78 820 1.78 - - 2,149 4.63 2,149 4.63 Spare parts - - 170 0 37 170 0.37 - - 145 0.32 145 0.32 Subtotaln- - 2,455 5.33 2,455 5.33 - - 4,474 9.81 4,474 9.81 Management Equipment for accounts Deleted 100% - - 100 0.22 100 0.22 - - - - - - Consultants' services - - - 106 0.23 106 0.23 - - 1,043 2.27 1,043 2.27 Training overseas Deleted 100% - - 24 0.05 24 0.05 - - - - - - Training equipment Deleted 85% - - 60 0.13 60 0.13 - - 10 0.02 10 0.02 Subtotal - - 290 0.63 290 0.63 - - 1,043 2.29 1,053 2.29 TOTAL J10 0 67 1,9n 7-79 3-900 8,46 124 0.28 6,162 13.59 6,296 13.87 Contingencies Physical 30 0.07 30 0.07 Price 60 0-13 i10 0,67 370 0,80 Subtotal 90 0.20 310 0.67 400 0.87 GRAND TOTAL k0 .8L 3 900 8.46 4.300 9.33 -31 - ,el Table 2 SECOND RAILWAY PROJECT COMPLETION REPORT Financing Plan (Millions of MF and US$) Project Items Included in roject Ies Deleted fro APRAISAL ESTIMATE---------------------- ------------------------------------------------ACTUA-------------------------------------------- Original Plan Original Plan . Exchang Rate: US$1460MF TOTAL 1PFM FACG IDA TOTAL CFM CIDA CCCE FAC II IDA- MF US$ MF US$ MF US$ MF US$ MF US$ MF US$ MF USS MF US$ MF US$ MF US$ MF US: Track and Building Material for track renewal and renewal* -21.5km . Renewal -21.5km 380 0.82 70 0.15 - - 310 0.67 447 1.05 48 0.11 -- ----399 0,4 Quarry equipment and Deleted 93% 270 0.59 90 0.20 - - 180 0.39 70 0.16 53 0.12 -------17 0.( ballasting Rail welding equipment Rail welding 200 0.43 30 0.06 - - 170 0.37 203 0.45 23 0.05 -- -- -180 0.Z and rail welding Track maintenance 50 0.11 - - - - 50 0.11 49 0.11 ------- --49 0.1 equipment Bridge repairs Deleted 100% 150 0.32 30 0.06 - - 120 0.26 - - - - Marshalling yard Bamako Deleted 100% 45 0.10 30 0.07 - - 15 0.03 - - Miscellaneous works Deleted 100% An ol 60 I - - - - - - - - Subtotal 1,155 2.50 310 0.67 - - 845 1.83 769 1.77 124 0.28 - -------645 1.4 Rolling Stock Main Line Locomotives -4 - 580 1.26 - - 580 1.26 - - 552 1.20 - -- 270 0.59 282 0.61 - - - Shunting Locomotives -5 Deleted 2 330 0.72 - - 130 0.29 200 0.43 284 0.61 - - - - 139 0.30 145 0.3 Railcare and trailers 2&8 - 370 0.80 - - - - 370 0.80 1,344 3.05 - ---- --1,344 3.0! Peasenger coaches -4 Deleted 100% 185 0.40 - - - - 185 0.40 - - - - Freight wagons -125 (Delivered 126) 820 1.78 - - - - 820 1.78 2,149 4.63 - - - - 464 1.00 138 0.34 775 1.67 752 1.62 Spare parts - 17pn .Sq - - 70 11 100 0.22 1.Ai..12 - - - - - - 58 0.11 - - 87 0.21 Subtotal 2,455 5.33 - - 780 1.70 1,675 3.63 4,474 9.81 - - - - 734 1.59 637 1.36 775 1.67 2,328 5.19 Mlanagement Equipment for accounts Deleted 100% 100 0.22 - - - - 100 0.22 - - - - Consultants' services . - 106 0.23 - - - - 106 0.23 1,0L3 2.27 -1,043 2.27 Training overseas Deleted 100% 24 0.05 - - - - 24 0.05 - - - - Training equipment Deleted 85% . n 11 60 It 1. - - - - 60 0 I .0L0.02 - - 10 0.02 Subtotal 290 0.63 290 0.63 1,053 2.29 - - 1,043 2.27 - - - - - - 10 0.02 TOTAL 39a 846 110 0 67 780 1702810 609 .296§1a7 124 0.28 1,043 2.27 734 1.59 637 1.36 775 1.67 2,983 6.70 Contingencies Physical 30 0.07 30 0.07 - - - - Price 370 0.80 60 0.14 25 0.05 285 0.61 Subtotal 400 0.87 90 0.21 25 0.05 285 0.61 GRAND TOTAL &An.n 9.11 . An0 0 RA R 5 1 75 3 095 6 70 - 32 - Table 3 MALI SECOND RAILWAY PROJECT COMPLETION REPORT Cummulative Estimated, Revised and Actual Disbursements ( US$ millions) IDA Fiscal Year st nd and Quarter Ending Estimated 1 Revision 2 Revision Actual as of 4/3/73 as of 10/1/74 as of 3/3/75 - 1973/74 December 31, 1973 0.3 - March 31, 1974 0.6 - June 30, 1974 1.0 - 1974/75 September 30, 1974 1.5 - - - December 31, 1974 2.0 2.6 - 0.4 March 31, 1975 2.5 3.4 - 1.4 June 30, 1975 3.3 4.3 1.5 2.6 1975/76 September 30, 1975 4.0 4.9 2.8 3.0 December 31, 1975 4.5 5.5 4.0 3.8 March 31, 1976 5.0 6.1 4.5 4.6 June 30, 1976 5.5 6.7 5.0 5.4 1976/77 September 30, 1976 6.0 - 5.9 6.4 December 31, 1976 6.3 - 6.7 6.6 March 31, 1977 6.5 - - 6.7 June 30, 1977 6.7 - 6.7 1977/78 September 30, 1977 - 6.7 November 1977, Source: Bank's Controller's Department - 33 - Table 4 MALI SECOND RAILWAY PROJECT COMPLETION REPORT Annual Credit Disbursements by Categories/ (US$ 'millions) Cat. I Cat. II Cat. III Cat. IV Total Track Mainte- Rolling Stock, Consultants Unallocated nance Equipment Motive Power, Services, and Material Spare Parts Training, Office Equipment Amount 2/ 1.80 3.70 0.60 0.60 6.70 Allocated- 1973 - 0.023/ 1974 1.45 1.96 - 1975 0.04 3.20 0.02 1976 - 0.01 - 1977 - - - Total 1.49 5.19 0.02 - 6.70 1/ Per year of order/contract and actual amounts disbursed by IDA 2/ According to Credit Agreement 3/ Order placed in 1971 and 1972 under the First Railway Project November 1977, Source: Mali Railway 34 Table 5 MALI SECOND RAILWAY PROJECT COMPLETION REPORT SUMMARY OF OPERATING STATISTICS I SYTEM 1971 1972 1973 1974 1975 1976 1977 Route-km 642 642 642 642 642 642 642 II TRAFFIC Passenger numbers (000) 491 511 522 501 492 565 610 Passenger-km (million) 80 92 95 98 103 120 129 Average journey (kin) 168 186 182 196 209 214 212 Freight tons (000) 325 280 354 386 356 324 332 Freight ton-km (million) 151 126 156 166 156 148 149 Average haul (kin) 469 448 440 432 437 455 448 Traffic units (ton-km plus passenger-km)(million) 230 218 251 264 259 268 278 III TRAFFIC DENSITY Passenger-km per route-km (000) 124 143 147 153 160 187 201 Freight net ton-km per route-km (000) 234 196 243 259 243 231 232 IV OPERATIONS Train-km - passenger trains (000) 121 129 129 147 191 122 120 - railcars (000) 234 232 236 216 167 240 323 - mixed trains (000) 135 122 125 173 188 199 164 - freight trains (000) 427 424 533 579 474 462 426 - total (000) 917 907 1023 1121 1020 1023 1033 Motive power-km - locomotive (000) 742 751 944 1069 1035 980 873 - railcars (000) 234 234 237 215 171 244 326 - total (000) 976 985 1181 1284 1206 1244 1199 Number of locomotives in fleet: Mainline - small 2 3 3 2 2 2 3 -large (1100/1200 HP) 9 9 14 15 15 15 15 Shunting 7 7 9 8 8 8 7 Number of railcars 3 3 3 3 2 4 4 Number of trailers 8 8 8 8 8 16 16 Number of passenger cars 20 20 20 20 20 20 20 Number of freight cars (average in year) 317 317 317 317 334 410 443 Percentage availability: Mainline locomotives - small 31 47 39 70 78 16 44 - large 54 55 64 70 73 62 52 Railcars 67 63 76 70 79 76 69 Trailers - 71 75 79 75 82 75 Passenger cars - 73 61 74 75 67 70 Freight cars 88 89 87 88 88 84 91 Freight car-km total in Mali and Senegal (000) 6144 5547 7281 9368 7336 7917 6663 Freight car-km in Mali - empty (000) 1122 1064 1590 1929 1473 1334 994 - loaded (000) 2797 2550 3033 3914 3581 3949 3363 - total .(000) 3919 3614 4613 5843 5054 5283 4357 - percentage empty to total 29 29 34 33 29 25 23 Average journey per freight car available 61 54 72 90 79 47 41 Average load per car (tons) 21 20 22 22 21 23 23 Average net load per train (including mixed)(tons) 277 259 26Z 249 268 263 293 Gross ton-km - passenger (million) 60 57 59 58 74 83 81 - freight (million) 300 249 276 270 260 246 224 - total (million) 360 306 335 338 334 329 305 V OPERATTNG EFFICIENCY Passenger-km per train/railcar-km (incl.kmixed trains) 189 218 222 218 228 259 245 Freight net ton-km per train-km (incl.k mixed trains) 303 260 262 249 275 263 293 Freight net ton-km per freight car-km in Mali (000) 38 35 34 28 31 37 34 Freight net ton-km per freight car available per year (000) 328 447 565 595 565 303 306 Locomotive km per mainline locomotive available: - small (000) 48 - large (000) 133 118 93 89 82 102 96 Railcar km per railcar available 113 123 104 102 108 107 118 Gross ton-km to net ton-km - freight 2.0 1.98 1.77 2.04 2.14 2.22 2.04 November 1977 MALI SECOND RATIMY PROJECT COMPLETION REPORT Operating Targets and Actual Performances --------- Actual -------------- Target --- Actual----- Target Target Target 1971 1972 1973 1974 1 1975 1976 1 1978/79 1980/81 Availability of BB 1100/1200 diesel locomotives (%) 54 55 63 70 72 73 61 76 65/80 65/80 Locomotive-km per annum per BB 1100/1200 locomotive in stock ('000) 78 75 75 68 85 64 61 90 Availability of railcars (%) 66 63 75 70 70 80 76 80 50 50 Railcar-km per annum per railcar in stock ('000) 78 78 78 71 80 85 88 90 Availability of freight cars (%) 87 90 87 88 90 83 84 90 Average load of freight care (excluding service) (tons) 19 20 22 22 20 21 23 22 27 28 Average journey per day per freight car in stock (km) 61 63 63 81 67 63 53 73 Productivity per general freight car per annum (excluding oil traffic) (ton-km '000) 423 360 61 490 490 459 349 586 Turn-around for oil tank cars Dakar-Bamako and Koulikoro 13 - 15 14 11 13 13 10 10 9 Staff productivity (traffic units('000) per employee) 110 100 - 117 134 126 137 155 181 198W Source: Mali Railway November 1977 - 36 - MALE Table REGIE DU CHEMIN DE PER DU MALI (CFM) SECOND RAILWAY PROJECT - COMPLETION REPORT SOURCE AND APPLICATION OF FUNDS 1967/68 through 1971 (MALI FRS. MILLION) Total 1967-68 1968 1969 1970 1971 1967/68 - 1971 See:d Semester SOL".C= F FUNDS Internal Cash Generation Gross operating revenve 1474 823 1757 2087 2240 8381 Minus: Working expenses 1380 763 1506 1620 1715 6984 Cash generated from operations 94 60 251 467 525 1397 Exceptional revenue (loss) (4) (2) (75) (7) (88) Subtotal: Net cash generated 90 60 249 392 518 1309 from operations Loans IDA 95-MLI 213 843 1080 492 783 3411 IDA 384-MLI FAC Federal Republic of Germany Other Subtotal: Loans 213 843 1080 492 783 3411 Grants FAC - 29 - 29 Gov't for Investments " Gov't Against Operating Losses 30 30 60 0Othat Subtotal: Grants 30 - 29 30 89 TOTAL SOURCE 333 903 1329 913 1331 4809 APPLICATION OF FUNDS 1311 819 1404 1086 301 4921 Investments Debt Service65 Interest 46 34 153 194 232 659 Amortization 2 - Subtotal: Debt Service 48 34 153 194 232 661 TOTAL APPLICATIONS 1359 853 1557 1281 533 5582 VARIATION IN WORKING CAPITAL (1026) 50 (228) (367) 798 (773) WORKING CAPITAL BROUGHT FORWARD 433 (593) (543) (7711 (1138) 433 WORKING CAPITAL AT END OF YEAR (593) (543) (771) (1138) (340) (340) - 37 - глы _ . " i'кё oi.1 о. . oi�� �. ге а�9:т - -. =.�<т ...г - - - .,гх 4 - -- .. � га.г,ггог о� я>, ,ы<<о� � �,�ьэхг� ооя � лг��,е_ n � _ 44о �ч �<<�,о� '�ч�ь: га.,����� ° �а � ` ,э.гго� г� в.�ь).,о� °` оло �, ° е,г)го� 'оэюг� �.гхкяА x..,oNZ и•� я ськ хsь �:. ь.кп ып 4» �чя гч.) ь.,: .,ь сьч iчп ь9 в ,,а чг9 4,к iв4 эв.и ь.вг ьяг чпч г9п 9ь.я е.ьч в:г ччк хя) гт.х в.ья Ма я�л .,.гг w я я su гло ях.х ь.v sев sп гвх яч.е ь.и ьz: ,п iea v.e ' ss ,аэ <я� ков тг.я я.iя яэв sьs zш хп.о в яв �лво ыа хл ияле в.н йп и.и�г л г. эьо хь.я и.л зьs яс wг .ь � сьь я) пз )г.я �ь вь х,г. тi iiт че о iь�е>ь ьэг 09 �- чьv-- чх л п: »г � ьflг' . а -�» - )59 )l.6 х9 lегегывюыt в ка уа ю.а 9.1o яff хчВ о)В хгэ.ь В» tоээ гяэ ьчя г 1чя txz ю `яь г�л.гегвl еееiьлг у'.ч д сч �tlz 4ья .� ix.30 гегь 3М свя xts < tь.хх lezt гт 4 ltя.l гв.ке }р в хгв 45t хкf.ь l0.lx tхгп ]и ы tx.o 9.в9 1и) ]вь е)г гьв.с я.ьв хыэ )К .сь tчя.а �ч.хв ]ггз )хь ьчх t хь.ля 3с>0 гюЕ 4аа хи.) .. йу. е хь яг гэ. у5 �гв -� е гхя вг �пi вя - 1] l wut гоа Ф в коеэ х)ьо zsss )яэ5 J148 Lxt 1вЧ ар��кгис е та 4и ьи ' 4f5 яак � i.wгвn л аьо )эс <хс сях ЮО fQ в�л.геиt агве[ в 4э э5 ап' ' Sя еа ю в Во3 90] �ati гг94 xbf х.иг..х. xwx � огмг в 1)3 гчч гьг iэв кбе у е кг ci, с�о ыс пг ак сл..в.. •nf я�л-гиих wцхс z1�rs в 92 tеь 1сэ хог г0ч Sв1 е ьеlа гtoi кэiоя хх,к ггьl р г•гь� в лт ик soi аэв ык iю mw, лпигхс Gmees хоье � ввг апwатс вхvым в хгwи к �хвч zыо zея )ггь аяав . п>о) ияя) гхsо <ч., 4 �ю - к еи х�иг..г rn.гв.. е v: я4я �о ыч ьм иг � � опиггvс ьип.vя г�.о е гтд <sm, iь�д гiья г4) п - оаа� ьг.ягтп,э и.. iв....�.э � - хт ^ . иы г тп - �� п п+чЪ� гiя иег яипиs гг�яг� . �д�:� ,,�, !,�„ � -„ л аэ�, чз .�,� . 4г хч ья ,гг - х� .е .ял. е„хгг ,ь�г ькг,э ,>4ч, ь,аt в гwяч �,х) , �ьея� г ччя, м �я гх, в вв яв �� вв ,� .г , �.. ,...ы�,.., ....с. е S°�.%3 ,. °', ,�..э �4 я� сэв� - 38- 1 REGIE DU CHEMI'N DE PER DU MALI (CFM) SECOND RAILWAY PR(JECT - COMPLETION REPORT Tabl. 9 INCOME ACCOUNT 1 967 - 1971 (MALI FRS. MILLION) 1967 - 68 1968 (6 mo.) 1969 1970 1971 Aner P-s/Km Tariff Rev/Exp Aver. Pass/Km Tariff Rev/Enp Aver Past/Km Triff Rev/Exp Aver P../K. ariff Rav/Exp Aner Pma@/Km Rm/2 Number/ Diet. Tone/Km P'nit Millione Number/ Diet. Tone/Km P/Unit Millions Numberi/ Dint. TonE/Km p UtDi Millions umbr/ Dit. Tone/Km P/ ui Million. Numb.rø/ Dimt. Tona/Km T K Ym. Million MF MF Ts9ý Kn. Million MF MF T Km. Million MF MF Km. Million MF MF Km. Million GROSS OPERATING REVENUE Pa..en8ers & Luggage 661 96 63.3 307 580 109 63.0 5.44 343 460 127 58.4 6.59 383 448 140 62.8 400 Notional International 42 340 14.3 21 . 44 357 15,7 5.41 85 44 373 16.4 6.59 108 41 410 16.8 .107 SubtaotlaPoeogere & Luogage 703 110 77.6 5.13 398 328 110 36.1 5.13 185 624 126 78.7 5.44 428 504 148 74.8 6.59 493 489 163 79,6 508 -reight: Nation1 51 218 10.9 33 53 321 17.0 7.59 129 90 290 26.1 12.64 330 77 333 . 25.8 435 Idternatioae i 188 511 95.1 115 237 516 122.3 8.41 1.029 207 499 103.2 10.39 1072 247 506 124.9 1077 Subtotal Preight 236 449 106.0 8.87 940 148 4.49 66.3 8.87 583 290 480 139.3 8.31 1,158 297 435 129.3 10.84 1402 324 463 150.7 1512 Senegal Rolling Stock Exchanse Acouont 51 23 93 109 92 Mi.nellneou 85 32 76 83 128 TOTAL GROS OPERATN REVENUE 1474 823 1737 2087 2240 Operating Kxpen.eP Staff: Permannt 780 509 617 208 622 428 624 450 570 436 Temporary 1000 269 1046 138 968 281 983 278 1032 Pensione 50 24 36 38 43 Subtotal Staff 1780 828 1663 370 1590 745 1607 766 1602 779 Material. : P6ei 98 56 119 989 108 1019 143 Othr 143 98 242 300 336 2011 Chargea 160 101 217 171 Senegal Rolling Stock 141 Enohong. Acotunti 151 138 177 168 103 Taxes 6 107 1715 Subtotal Working Expensa 1380 763 1506 1620 422 Depreciation 204 105 367 438. 2137 TOTAL OPERATING EXPENSES' 1584 868 1873 2058 103 Net Operating Revenue (110) (45) (116) 29 Interest Charges 46 34 153 194 232 Operating Surpl.s (Lo.) (156) (79) (269) '165) (129) Exchange Profita (i0..) (4) (282) 255 Exceptional Revenue (Loes) 2 (75) (7) Net Surplus (Logg) (160) (79) (549) (240) 119 ApproprinteonnEo reneWa- Fund (6) (5) 48 (52) Net Bok Irofit (Los> (166) (79) (344) (192) 67 30 Governent Suboidlzation Agalnat Opertling Los.eo 30 irtlos: Working 7 94 93 87 78 Operating % 107 103 108 99 99 Average not fixed &asse. in use 5538 5537 7.33 9193 9896 Return on average net fixed anset. in use % (1.9) (0.8) (1.6) 0.3 1.0 39 - =Un Du c~ De no 11 ML1 <Cm) Line Aoprm=tFreatBII AnD AEM2UMIm @,rom~CM 7"Ma7 Tabl. 10 LLn.e I A4tual Fgr.s9thoug 1976, -Lt-0ator 1977 <' . .ZIuCR 0.0.01 V r.n.n" D-br., 3 1973 1973 1947 80=e peratn mm eua331 lM &to100i lt 31367 16" te" 94# 042 16 ilt O~*OI7008LOI14188 '30 111 384 slik 14724 in 14n8 10" 2p4 7n14 1i I-apuionl aev- (t..e) * I~b n eah s ated rA 7-1 8 slø 00 214 31 44 314 za 36. .g,.n. 13 74 e1" las - 143 . 413 1297 1 1143 YNC 197 a 154 lit -- O 0 1m8 *1 8 .. 12t g l12g 18 $0047 41 1,54 1038 52778 I -- - 114.. 878 op I& Ios 47. 46/7 1 - 26 1CC0 Lea 84. 58/78 4A-. -- . 17 7 7 PAC1 19%01977 M 8881M4-04 inoamtive 4 -- 039 ---..32 ..0. 309 1 lin 8mb80.al1Cr10t.1and0A43n 4 79 811 71 12- 806 B 4m21 3 814 800 574 15190 1235 157n 0s,.ta f81 081.estemte - -- -- - k 9- 177 4 0 11ll 300 = T8045. 831C 38 7ug 4 1906 0448 2309 2051 1775 170 90 * 8721 1321 9L7 017 5 l1" 1M81 LM 140 egeIII M m 70 20 1- 9~9:: mé. lu7 7 eebtemalt Inetmse Ameraisatio ug n 206 ~ AD ,T1. 0 1 81 1 ID 8 18 7 '.I8 - 12 log 9 19t 192 8 M. 1188øj 41 4 6t39 l84 194 nT C~=C IN WMUNG CAPITAL37 126w 40884841~4 1143.1.-8410812 0 is" 138 514 utsuno~46 HATA 13U0T4mD IM A 34 C8 g (30) 1588481 81 49111 令 O 個 〕一’!!!！。！!!!&!!!!!!!！〕’!&！一！!!!!!!&!’一！一！〕〕！,!! HALI Lines A0. Apprilsal Forecosti Lines B: Actual Fires 9REGIE UY EIN" DE FER DU MALI (CPN) Cd~~~~~~O SCNBIIAPlJECT - COMPLT1(0 REPORT BALANCE SNERT 1972 - 1977 (11 FES. KILLOK) As ni December 31, 1972 1973 1974 1975 1976 1977 ASSETS: r.URRENOT ASSETS sh A 369 806 0 79,. 992 1068 - 260 229 176 217 334 112 Receiv-bleu SOCOPAO A 305 200 200 200; 220 220 B 313 233 113 4 163 (1) 257 (1) SOM5EX A 153 200, 200 200 220 220 0 192 188 146 93 82 69 Other trffic A 361 169 170 - 180 200 210 B 284 263. 460 417 381 313 Caim on etite A -- -- ---- -- -- o 35 64 149 198 76 131 on Trafflc A 1,6 90 810 70 70 70 B 137 200 293. 404 160 175 subRo-al Receivables A 925 650 650. 650 110 720 961 971 1163 1112 862 1357 A 692 890 860 850 000 800 B 539 643 881 921 1163 1173 SuceeA-c.it A -- - -- A 15 21 4 16 469 26 Snbtoal C1EEENT ASSETS A 1974 234 2318 2209 2502 2588 B 1775 1864 2224 2266 2324 2506 min- C9RZNT [IABILITIES Senegal Ralay A 450 250 60 -- -- -- B 531 351 170 171 93 5 Gmv'tiunpaid intereet and A 2o 276 -- -- -- coisIeo on IBn 304 265 560 89 360 Suppliere(lcluding capital A 570 670 000 500 440 430 invsents) 0 75 365 6 362 406 -- O,her sppl.rs ead creditor 230 260 150 160 170 0 1a. 440 673 721 903 353 L.n ienes A -- -- -- -- -- -- -- 49 378 148 442 106 S.hlrotai Shor-ter Labilites A 1490 1456 1010 650 600 600 B 1192 1705 2163 2960 2234 1336 sspelse Accout A -- -- -- 28 -- -- -- 54 56 S1~TAL CU0RENT L IABILITIES 1490 1456 1910 650 600 600 B 1229 1705 2163 2960 2258 1392 KET CU~.EN ASBET5 A 484 802 1308 1559 1902 198 o 556 159 61 (694) 570 1114 FIXED ASSETS- Stock. A -- -- - -- 3 10 1o 10 10 In use, groes value 14208 15144 16454 17734 18954 19854 o 13886 15389 15660 17535 21375 22324 mInus cIumloEed deprecLation A 3658 4088 4548 5038 5548 6068 3281 3724 4224 4740 5256 6006 Net fLxed-aesets [nse A 10550 11056 11916 12696 13406 13786 - - 10585 11668 11454 12805 15129 16318 Wrk. ln Progre.s A 670 800 900 900 500 150 B 306 93 309 703 252 879 10TAL NET FIXED ASSE15 A 11220 11856 12816 13596 13906 13936 B 10911 11761 11763 1330 15381 17197 TOTAL AMSET5 11704 1274 14124 15155 15806 15924 10467 11929 11824 12514 15951 18311 [As C-åTAL A 4554 5281 5866 6936 7593 7648 9 233" 4861 3340 680 8494 9314 EQUIT EQULV.ALEN - Capital A 5890 5890 5890 5890 5090 5890 B 05890 5890 5890 5890 5890 5890 Gov't Sub,tdise for nesetents A 232 232 232 232 232 232 * 232 232 232 232 232 432 Other S.bsidles or ivestente A 31 201 571 571 571 571 0 146 523 563 572 856 2151 R.eluation reserve A 2837 2837 M37 2837 2837 2837 o 2095 2095 2093 2095 2095 2095 Net reneeal fuod A 94 129 174 224 279 339 B (150) (125) (36) 66 254 C-I.tulad proefit (lise) A (3898) (4240) (4328) (4417) (4476 (4475) o (3069) (3803) (4487) (5096) (6655) (6664) Gen'I Subsidle- øgain-t operating A 1964 2418 2882 2882 2882 2882 L0ee 1943 2247 2247 2247 5039 5039 TOTAL EQUITY EQUIVALELMr A 7150 747 8258 8219 8215 8276 & 7087 7059 6486 6006 7457 8997 T^ 101ILITI00- A 11706 12748 14124 15155 15809 15924 O 1167 1190 11024 12814 15951 18311 RATI1S A 1.32 1.61 2.29 3.40 4.17 4.34 Current B 1.50 1.19 1.00 0.76 1.32 1.0 Debt to equIty A 39/61 41/59 41/39 46/54 48/52 10/32 34159 45/55 53/47 53/47 Si/49 (1) S0CDi6 etartin 1976 - 42 - E6IE DU CHMiN 11 1E6 DU MAL1 (CF27 L.nes~~~~~~~~~~~~~ A,t Apr,sa nftre ABMNI FITNTA IIMEI C -MGTI 320A c1u1 - pig u re s 1 / .lo il AU kE...) .F 1 2 .M A PM JA2 A T C 20E E.T 19. . .0 919 7 11 .0 . 6 CO 0 1.. 1(A 1 1. 1 ) B 6 øs . "Si 1 0 7.9 NS., li.ttonal 26.9 39.6 3.7 1.12 50.2 32.6 34.1 1.5 14.29 21.0 31.9 36.0 2.1 14.66 60.0 38.0 3.2 0.2 16.76 13.3 32..4 00.6 6.2 10.25 62.1 34.6 43.2 3.6 17.25 049.3 03ntonl9.1 130.9 32.0 6.70 310.3 063.6 006.0 22.6 . 0.73 117.1 16-1 11-7 .2 023 .35 01.3 130.0 1601 40.3 12.27 007.6 115.6 111.6 66.7 66.36 960.6 0.0 13.3 63.3 66.0 1057.11 Tot.03,rei1ht an1 rve2 125.' 161 3610M .5.0 LIO.1 230.1 210.7 166.426.187.7. 26 .3 1.06.1 159.0 100.1 61.0 500.0 147.6 211.7 85.6 619.3 684.6 226.3 71.9 4665.4 T10.0 1 Ca1t2 (C Millin) 102021.2 6621 '0 0309 2171 3034 Im o..l.2i02Co6 506 217 M10lin) 912 110 1150 12 6176 71.1411151.2 Intl.u1 eroftr0 fe0nie .6 23 0. 6.11001. 3, 260.7 261.0 260.1 3 6 14.e~~~~~~~, inn$oeatn eos 1 i 1 2.. 1 t otI ..31 0 121 L2 01 3etent002 ep.ratng1revenue 43 111200230 161 1692 2..0 .11.32 at112 0.7rr.-.40(03)3.2 MALI Completion Report (credit 384-MLI) Railway Traffic 1972-1976 : Appraisal Forecast and Actual Freight 1972 1973 1974 1975 1976 Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual International 000 tons 259.7 204.3 288.2 259.3 300.7 293.1 319.8 252.6 337.7 239.0 mil. t-k 130.9 99.1 146.0 182.6 151.7 134.8 161.8 119.0 171.1 112.5 Exports 000 tons 89.1 63.8 108.7 53.4 109.6 51.6 121.8 77.7 132.6 94.0 mil. t-k 47.3 31.3 58.6 26.6 58.6 25.2 65.2 37.8 71.2 44.7 Imports 000 tons 170.6 140.5 179.5 205.9 191.1 241.5 198.0 174.9 205.1 145.0 mil. t-k 83.6 67.8 87.4 97.2 93.1 109.6 96.6 81.2 99.9 67.8 National 000 tons 85.2 73.0 93.4 94.6 98.1 92.2 103.1 96.3 109.2 87.0 mil. t-k 30.6 26.2 34.1 32.1 36.0 31.4 38.1 34.1 40.6 31.2 Total Freight 000 tons 344.9 277.3 381.6 353.9 398.8 385.3 422.9 349.5 446.9 326.0 C mil. t-k 161.5 125.3 180.1 155.9 187.7 166.4 199.9 153.1 211.7 143.7 Passengers International 000 tons 43.0 49.4 44.5 48.5 46.0 55..8 49.0 59.4 5210 60.0 mil. t-k 17.5 20.1 18.1 19.8 18.7 23.9 19.9 24.5 21.2 25.0 National 000 pass 457.0 461.8 479.5 483.4 512.0 444.9 554.2 432.2 597.0 505.0 mil. p-k 64.5 72.2 68.8 75.4 74.9 74.3 82.7 78.2 91.4 95.8 Total Passengers 000 pass 500.0 511.2 524.0 531.9 558.0 500.7 603.5 491.6 649.0 565.0 mil. p-k 82.0 92.3 86.9 95.2 93.6 98.2 102.6 102.7 112.6 120.8 January 1978 M MALI Completion Report (credit 384-MLI) Actual Freight Traffic 1971 - 1977 1971 1972 1973 1974 1975 1976 1977 PRODUCT ton ton-km ton ton-km ton ton-km ton ton-km ton ton-km haul ton ton-km ton ton-km (000) (mil) (000) (mil) (000) (mil) (000) (mil) (000) (mil) (km) (000) (mil) (000) (mil) NATIONAL TRAFFIC 75.6 24.9 73.0 26.2 94.6 32.1 92.2 31.4 96.3 34.1 354 87 31.2 95 32.5 Cement 38.3 15.7 39.5 16.7 48.3 20.3 43.0 17.7 46.4 19.4 420 38 16.3 39 16.5 Other carload 27.4 6.2 24.3 6.1 35.3 8.9 37.9 9.4 38.5 11.1 280 40 11.5 45 11.5 Miscellaneous 9.9 3.0 9.2 3.4 11.0 2.9 11.3 4.3 11.4 3.6 359 9 3.4 11 4.5 EXPORTS 88.2 46.8 63.8 31.3 53.4 26.6 51.6 25.2 77.7 37.8 485 94 44.7 105 50.7 Cola nuts 8.2 4.8 7.7 4.5 7.8 4.6 9.8 5.7 17.3 10.1 584 12 6.7 11 6.4 Cotton seeds 10.6 6.2 3.3 2.1 3.8 2.4 - - 6.1 3.8 623 4 2.2 8 4.8 Cotton fibers & text. materials 5.5 3.3 7.1 4.2 5.1 3.0 3.9 2.3 4.6 2.7 587 6 3.5 12 6.9 1 Groundnut 25.3 10.2 20.5 8.1 13.5 4.0 12.3 3.7 20.4 6.3 309 26 8.3 22 7.1 4 Groundnut oil 3.8 2.5 1.5 1.0 2.9 1.9 0.8 0.5 0.9 0.6 667 6 3.5 12 6.9 Groundnut cakes 13.3 8.5 10.9 6.8 9.5 6.0 8.3 5.3 6.1 3.9 639 5 2.8 14 5.9 Karite products 10.8 6.3 0.1 0.1 - - - - 4.4 2.6 591 4 2.4 10 5.6 Cereals - - _ _ - - - - - - 13 7.3 2 1.2 Other carload 10.7 5.0 12.7 4.5 10.8 4.7 16.5 7.7 17.9 7.8 436 18 8.0 14 5.9 IMPORTS 160.1 78.4 140.5 67.8 205.9 97.2 241.5 109.6 174.9 81.2 464 145 67.8 145 68.8 Cement 6.6 3.9 5.1 2.9 2.8 1.7 5.0 2.9 14.0 8.0 571 18 9.3 12 6.3 Machinery, vehicle materials 12.3 7.0 8.6 4.9 8.6 4.2 9.5 4.9 11.8 6.0 508 8 4.3 14 7.3 Fertilizers 7.9 4.5 17.1 9.7 5.6 3.2 3.3 1.5 6.4 3.4 531 17 9.0 20 10.7 Foodstuff 62.6 30.4 46.0 20.4 127.2 60.4 162.1 72.1 65.4 27.8 425 18 7.4 6 3.2 Petroleum products 35.8 14.6 34.9 15.5 32.9 12.8 32.2 12.6 31.6 12.5 396 42 15.4 50 18.4 Salt 17.4 9.1 17.1 8.7 17.8 9.6 19.1 9.8 24.7 12.6 510 24 13.1 20 11.0 Other carload 16.9 8.7 10.7 5.1 10.2 5.0 9.8 5.5 20.2 10.5 520 17 8.7 22 11.4 Miscellaneous 0.6 0.2 1.0 0.6 0.8 0.3 0.5 0.3 0.8 0.4 500 1 0.6 1 0.5 TOTAL FREIGHT TRAFFIC 323.9 150.1 277.3 125.3 353.9 155.9 385.3 166.4 349.5 153.1 439 326 143.7 345 152.0 L.n MALI Completion Report (credit 384-MLI) Actual Passenger Traffic 1971-1977 1971 1972 1973 1974 1975 Aver. 1976 19771/ Pass Pass-km Pass Pass-km Pass Pass-km Pass Pass-km Pass Pass-km dist. Pass Pass-!r Pass Pass-km (000) (mil.) (000) (mil.) (000) (mil.) (000) (mil.) (000) (mil.) km (000) (mil.) (000) (mil.) NATIONAL 448.4 62.8 461.8 72.2 483.4 75.4 444.9 74.3 432.2 78.2 181 505 95.8 562 106.9 1st Class 24.4 4.7 27.6 5.1 34.6 5.1 18.2 5.1 13.2 5.8 439 14 6.0 17 7.2 2nd Class 424.0 58.1 434.2 67.1 448.8. 70.3 426.7 69.2 419.0 72.4 173 491 89.8 545 99.7 INTERNATIONAL 41.4 16.8 49.4 20.1 48.5 19.8 55.8 23.9 59.4 24.5 412 60 25.0 54 24.4 1st Class 8.5 3.6 9.4 3.8 6.6 3.1 7.7 3.7 7.7 3.5 455 9 4.0 8 3.6 .- 2nd Class 32.9 13.2 40.0 16.3 41.9 16.7 48.1 0.2 51.7 21.0 406 51 21.0 46 20.8 TOTAL PASSENGER TRAFFIC 489.8 79.6 511.2 92.3 531.9 95.2 500.7 98.2 491.6 102.7 209 565 120.8 616 131.3 "Based on three months Annex I - 46 - Page 1 of 2 REGIE DES CHEMINS DE BER DU MALI Principal Covenants and Commitments on Credit 384MLI Agreement Commitments and Section Progress or action to be taken The Government will at all times provide Credit Agreement Although the Government subsidized the R6gie the Regie funds, services, and other Section 3.01a against pest losses by offsetting CFM's debt to resources necessary to carry out the it with subsidies to compensate for losses totaling Project. 3.7 billion Mali Pra, between 1972 and 1977, the Railway was unable to completely finance its share of the local coats of the Project after it was revised under the pressure of substantial cost overrun The Borrower will relend the proceeds Credit Agreement The onlending Agreement was drawn up, but the Rggie of the Credit to the R6gie under a Section 3.02b has been in default on payment of interests since 1971 Subsidiary Loan Agreement to be entered It has also been in default on payments under the into between the Borrower and the R6gie onlending Agreement of Credit 95 MLI (1966). In under a term of 25 years with four years agreement with the Bank, the Government has waived of grace and a rate of interest of 7-1/4 Z overdue payments on both Agreements as part of the per annum. above mentioned subsidies. The Borrower will use its best efforts Credit Agreement The number of technical assistants has been decreased to ensure that the number of experts Section 3.02 in agreement with the Bank from 19 in 1972 to 14 in being provided to the Rfgie through 1977. This number is satisfactory given the re- technical assistance be maintained cruitment and adequate training of several qualified at the level required to ensure com- Malian engineers. pliance by the Rigie with Section 3.01 of the Project Agreement. Because of the strong inflationary trends which took The Borrower will take all steps to Credit Agreement place during implementation of the Project, the Rigie enable the R6gie to set and maintain Section 3.03 and has increased its passenger tariffs by an average of its tariffs at the levels required under Project Agreement 40% between 1972 and 1977 and its freight tariffs by Section 4.04 of the Project Agreement. Section 4.04 c an average of 66% between 1974 and 1977. This is the best which could be achieved under economic and competitive conditions. The Borrower will take or cause the Credit Agreement The follow-up Third Railway Project and the associated R6gie to take action to facilitate Section 3.04 and Third Senegal Railway Project provide for studies railway operations between its Project Agreement aimed at increasing the cooperation betwen both territories and the territories of Senegal Section 3.04 Railways and consider a possible merger between thee. in accordance with the International Traffic Agreement, the Custome Agreement and the Railway Convention. The Borrower will furnish or cauge Credit Agreement Reporting procedures have progressively improved since to be furnished to the Association Section 4.02 a the start of the Project. The Railway provides the all information requested concerning Bank with monthly statistical reports and quarterly the administration, operations and financial reports. However, the timeliness of these financial condition of the R6gie and reports needs to he improved. progress under the Project. In order to assist the Rgie in planning Project Agreement Except for some training equipment, Part C of the statistics and data, accounting services, Section 2.02 Project was taken over by CIDA, Canada which expanded storekeeping and personnel management, the limited management information study to a full under Part C of the Project, the R6gie reorganization of the RAgie, which is now being will employ management consultants completed. acceptable to the Association upon terms and conditions satisfactory to the Association. In carrying out any works included in Part Project Agreement All civil works foreseen under the original project A of the Project not to be done by Section 2.03 were deleted during the 1974 reallocation. the RAgie itself, the Rsgie will employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. The Rogne will furaish to the Association Project Agreement Done the plans specifications, contract documents Section 2.06 and work and procurement schedules bnor the Project, and any material modifications or additions. Unless the Association will otherwise Project Agreement The RBgie has complied with the covenant. agree and except for miscellaneous items Section 3.05 of small equipment not exceeding in value a total of $150,001 equivalent in any one year, the o ege will limit its invest- nentn to thoa included in the Project, until its completion. The R6gie will have i1s financial statement Project Agreement The Rgie has fully complied with the covenant. certified annually by an independent Section 4.02 auditor acceptable to the Association and provide the Bank with audit reports not later than 6 months after the close of each fiscal year. Except as the Association shall otherwise Project Agreement Because of the very substantial cost of overrun, agree, the RAgie will not incur any debt Section 4.03 the Bank agreed to waive the condition and allowed unless the amount of its net cash revenue additional borrowing from Germany sod Prance. for its fiscal year next preceding the date of such incurrence or for a later twelve-onth period ended prior to the date of ouch incurrence, whichever amount is the greater, will be nor less than 1.25 times the maximum debt service requirements for any succeeding fiscal year on all its debt including the debt to he incurred. Annex I -47 - ge2of 2 Commitments Agreement Progress or action to be taken and Section The R6gie will take all steps required Project Agreement The R6gie did not achieve the agreed rates to earn an annual return on the average Section 4.04 a of return except in 1977. However, its current net value of its fixed assets in financial performance steadily improved operation of at least 2% over its fiscal since 1974. year 1974 and 1975, 3% over 1976, to reach 3.5% over fiscal year 1977. The Government and the Rkgie agree on the Side Letter Although the Rfgie did not achieve the targets set forth under the plan of action. unreasonably high targets set forth under the plan of action, its operational performance steadily improved during implementation of the Project. Annex II - 48 - Table 1 Evaluation of Track Program Costs and Benefitsl Million Mali Francs (1976 prices) YEAR COSTS BENEFITS Cl C2 C3 C4 C5 C6 C7 Bl 1975 70 203 157 95 1976 447 49 1977 1040 1 1978 877 72 1979 299 160 1980 132 262 1981 108 309 1982 36 244 1983 36 349 1984 36 369 1985 8 390 1986 413 1987 8741 1988 449 1989 468 1990 486 1991 505 1992 523 1993 542 1994 560 1995 8310 578 1996 597 1997 615 1998 633 1999 652 2000 670 2001 -7064 -4719 1/ Based on costs (Cl, which includes ballasting, welding, shunter quarry equipment, gang cars, ballast cars, switches, track renewal with project) and benefits (Bl, which includes savings in derailment costs, track maintenance costs, rail cuts and rolling stock maintenance, and the track renewal costs without project) from Third Railway Project, and costs incurred during 2nd Project (C2 = material for track renewal; C3 = quarry equipment; C4 = welding machine; C S track maintenance equipment; C6 = ballast cars; C7 = shunter) January 1978 Annex II - 49 - Table 2 Evaluation of Locomotives and Freight Cars 1/ Costs and Benefits Million Mali Francs (1976 prices) YEAR COSTS BENEFITS CI C2 BI Locomotives Wagons 1972 637 1973 694 1974 - 395 1975 154 638 213 1976 1075 230 1977 422 1978 579 1979 597 1980 597 1081 597 1982 597 1983 597 1984 597 1985 597 1986 597 1987 597 1988 597 1989 597 1990 597 1991 597 1992 597 Annex II -50 - Table 3 Evaluation of Rail Cars Costs and Benefits Million Mali Francs (1976 prices) YEAR COSTS BENEFITS CI C2 BI 1975 998 1976 427 1977 166 430 1978 166 420 1979 166 411 1980 166 402 1981 166 393 1982 166 384 1983 166 375 1984 166 366 1985 166 357 1986 166 348 1987 166 339 1988 166 330 1989 166 321 1990 166 312 1991 166 303 1992 166 294 1993 166 285 1994 166 276 1995 166 267 1996 166 258 February 1978 IBRD 12493 1° °' 6' OCTOBER 1976 24' (For r ' SP.SAHARA ALGERIA LIBYA m A U R l T A N l Al MAURITANIA -- -NiORO ARA ENEG A NIGER HAD m N .1 -- VOLA --0---- G U IN E A k ) -ore ro ~v v * - NIGERIA K-n~r D'ém SIERRA EON Efr- IVORY Kid,, Ségl. -- -- SdhT COAST GHNI CNT KAYE apar. LIBE AL- ER ' N ono S0 12' Set 4°oao ~Beorn eSeboe M A L I. .8,d0, A "IAdj n , - v 4 M A L l IM.äA,NADnnn Moussaa - BAFOULABE --k. M Coolio '" 'olokori ----------0 okl THIRD RAILW Y PROJE Giyoy b SO TRANSPORT NETWORK SEGO O d f O1 e a ,1 5r r S A N mBorn'akana riboJgou N N/GER SA B0n1on Oubok d , d,n N koa rkorola e proso S ns Existing railways SEN EGA L yoBono TrUL---rFo Bo Dr b J Korobo otera Drl KOULIKOR Gundo Sndo B. a Der .e*.@*.e. Laying of available track material Ken.b.neko Kassaro Fgo Kmporon B AMAK a F' Foogoni n Nonnloe ou ou Noreno -- Baliasting program Sonrgeilo \ Mpesso irokele NTo onosso i Sooougo', Ko-oroukot n. lp,ýb.N Goed DI.lkoroboLg.u. Konseguelo v v v Welding program - -J r DIl fl.BLo l Major bridges to be reinforced N e Komri , -12° ...IANGABAjKoum nkoun 1° Paved roads more than 5m wide Kab.le Paved roads less than 5m wide S,do hlnd,o Engineered earth roads NIGER BOUGOUNI - Earth roads Nkourale U P P E R Improved tracks Go o LONDIEBA -------- Unimproved tracks G U I N E A V OYLTA FreMonankoro \Zga. Navigoble river (July-December) Flood area 10° 10°- International airport National airfields . -- - International boundaries 0 50 100 K 10 200 250 KILOMETERS V 0 R The bo dare s is0 50 100 150 ärnply endorement ro accepane by t MILES World Bank and itsffiliae. 12° 12' 8
Группа Всемирного банка · Project Performance Assessment Report
Mali - Second Railway Project
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Project Performance Assessment Report
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Мали
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