Cameroon - Railway Projects

Document of The World Bank FOR OFFICIAL USE ONLYFILE CoPy Report No. 3056 PROJECT PERFORMANCE AUDIT REPORT CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) June 30, 1980 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their offical duties. Its contents may not otherwise be disclosed without World Bank anthorimation.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) Table of Contents Page No. PREFACE iii PROJECT PERFORMANCE AUDIT BASIC DATA SHEET iv-v HIGHLIGHTS vi PROJECT PERFORMANCE AUDIT MEMORANDUM I. Introduction 1 II. The Project 1 III. Project Implementation 3 IV. Points of Special Interest 7 V. Conclusions 12 ATTACHMENT A: COMMENTS FROM THE BORROWER 15 ATTACHMENT B: PROJECT COMPLETION REPORT Background 21 1. Second Railway Project 22 2. Third Railway Project 24 3. Execution of the Second Railway Project 25 4. Execution of the Third Railway Project 30 5. Performance of the Projects 35 6. Operations and Maintenance 36 7. Economic Evaluation 39 8. Financial Performance 42 9. The Bank and the Borrower 43 Annexes 1. Actual and Appraisal Estimates of Project Costs (Second Railway Project - Loan 1038-CM) 47 2. Actual and Appraisal Estimates of Project Costs (Third Railway Project - Loan S4-CM) 48 3. Freight Traffic 49 4. Income Accounts 50 5. Balance Sheets 51 6. Sources and Applications of Funds 52 7. Rail Breakages and Derailments Avoided by Track Renewal 53 8. Freight Car Utilization 55 9. Breakdown Crane 60 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. Page No. Annexes (continued) 10. Utilization of Locomotives 63 11. Selected Operating Statistics, FYs 1974-78 64 12. Achievement of the Targets of the Action Plan 65 13. Compliance with Covenants 67 Chart Cameroon Railways - Track Characteristics, Main Line 69 Map - ii - PROJECT PERFORMANCE AUDIT REPORT CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) Preface This report presents a performance audit of the Cameroon Second and Third Railway Projects for which Loans 1038-CM and S4-CM (an engineer- ing loan) for US$16.0 million and US$2.3 million equivalent were made in June 1974 and May 1976, respectively. Loan 1038-CM was closed fully disbursed in December 1977. Loan S4-CM was closed at June 30, 1979; in January 1980, the outstanding obligation by the Borrower was refinanced under the Cameroon Fourth Railway Projectl/ approved by the Board on June 19, 1979. This report consists of a memorandum prepared by the Opera- tions Evaluation Department (OED) and a Project Completion Report (PCR) prepared by the Bank's Western Africa Regional Office; the substance of the latter was discussed with Regie des Chemins de Fer du Cameroun (Regifercam) who fully cooperated in its production. OED has reviewed the PCR against the Appraisal and President's Reports (there was no separate appraisal report for the engineering loan), the legal documents and the transcripts of the Executive Directors' meet- ings which considered the projects. Project files and documents have also been reviewed and discussions held with Bank operational staff. No mission was undertaken for these projects by OED staff. The draft audit was sent to the Government in the normal course, and the comments received from the Office du Chemin de Fer Transcamerounais and the Regie Nationale des Chemins de Fer have been noted in the report and are appended in full as Attachment A. OED has found that the PCR provides a generally adequate coverage of the implementation experience of these projects and the reevaluation of their justification. However, certain aspects of the projects were not covered specifically in the PCR or, if mentioned, merit amplification. They are: (a) problems in physical completion of the project; (b) the disproportionate effort to maintain passenger services; (c) the weak work- ing capital position; (d) the critical Douala-Yaounde transport corridor: considerations regarding investment choices and reduction in the railway's role; (e) the need for sufficient management capacity to make full use of consulting services; and (f) the possible need of the Bank to strengthen its supervision of projects having a large technical assistance component. 1/ Loan 1734-CM, which became effective in January 1980.  - iv - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) KEY PROJECT DATA Loan 1038-CM Loan S4-CM Original Actual or Original Actual or Plan Reestimate Plan Reestimate Total Project Cost (US$ Million) 22.0 1/ 26.6 2.9 3.1 Overrun (%) - 21 - 7 Loan Amount (US$ Million) 16.0 16.0 2.3 2.3 Disbursed ) 16.0 16.0 2.3 2.10 Cancelled ) As of 4/30/80 - - - 0.2 Repaid ) 0.83 - 0.58 Borrower's Obligation ) - 17.46 2/ - - Date Physical Components Completed Mid-1977 12/78 Mid-1978 12/78 Proportion Actually Completed by above Date (%) 93 96 55 85 Proportion of Time Overrun (%) - 50 - 25 Economic Rate of Return (%) 13 10 - - Financial Performance - Below forecast - Below forecast Institutional Performance - Below forecast - Below forecast Cumulative Estimated and Actual Disbursements (Loan 1038-CM) (US$ Million) FY75 FY76 FY77 FY78 (i) Estimated 9.35 14.91 16.00 16.00 (ii) Actual 6.65 11.86 15.96 16.00 % of (ii) to (i) 71 80 99.8 100 Cumulative Estimated and Actual Disbursements (Loan S4-CM) (US$ Thousand) FY77 FY78 FY79 FY80 (i) Estimated 1,360 2,300 2,300 2,300 (ii) Actual 432 868 1,610 2,100 % of (ii) to i) 32 38 70 91 OTHER PROJECT DATA Loan 1038-CM Loan S4-CM Original Original Plan Revisions Actual Plan Revisions Actual First Mention in Files - - 4/25/69 - - 10/31/75 Negotiations 11/15/73 11/30/73 5/04/74 4/--/76 3/01/76 3/04/76 Board Approval 1/15/74 2/26/74 6/27/74 6/--/76 4/15/76 5/04/76 Loan Agreement Date - - 9/18/74 - - 6/25/76 Effectiveness Date - - 12/18/74 - - 10/05/76 Closing Date 12/31/77 - 12/31/77 10/31/78 3/31/79 6/30/79 Borrower Regie Nationale des Chemins du Fer du Cameroun Executing Agency Regie Nationale des Chemins du Per du Cameroun Fiscal Year of Borrower July 1 - June 30 Follow-on Project Name Third Railway Project Fourth Railway Project Loan/Credit Number Loan S4-CM Loan 1734/Credit 936-CM Loan/Credit Amount (US$ Million) 2.3 27.0/20.0 Loan/Credit Agreement Date 6/25/76 8/23/79 1/ Reduced from original appraisal cost of US$23.0 million by transfer of consulting services to Third Railway Project. 2/ Includes US$2.28 million for exchange adjustment. 3/ The outstanding obligation by the Borrower of US$1.82 million, which included US$0.3 million for exchange adjustments, was refinanced under Loan 1734-CM. v MISSION DATA Loan 1038-CM Loan S4-CM Month/ No. of No. of Date of Month/ No. of No. of Date of Year Weeks Persons Man-weeks Report Year Weeks Persons Man-weeks Report Identification 6/72 1 1/2 2 3 6/29/72 Preparation 11/72 2 3 6 12/01/72 Appraisal 3 1 1 10 6/13/74 11/75 3 2 6 4/16/76 Sub-Total 7 1/2 19 3 6 Supervision I 1/75 1 1 1 1/31/75 12/76 2 1/2 2 5 1/11/77 Supervision II 5/75 2 1/2 3 7 1/2 8/18/75 6/77 2 1/2 2 5 7/31/77 Supervision III 11/75 1/2 2 1 2/23/76 11/77 3 3 9 1/19/78 Supervision IV 12/76 2 1/2 1/ 2 5 1/ 2/28/77 Supervision V 6/77 2 1/2 1/ 2 5 1/ 7/31/77 Supervision VI 11/77 3 1/ 3 9 1/ 1/19/78 Completion 6/78 2 1/2 1/ 2 5 1/ 2/28/79 2/ 6/78 2 1/2 2 5 2/28/79 Sub-Total 14 1/2 33 1/2 10 1/2 24 3/ Total 2252 1/2 13 1/2 30 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Franc CFA (CFAF) Rate Used in Appraisal Report (Loan 1038-CM) Exchange Rate: US$1 = CFAF 250 Rate Used in Appraisal Report (Loan S4-CM) US$1 - CFAF 225 Intervening Years Average 1974 US$1 - CFAF 240.50 1975 US$1 - CFAF 214.32 1976 US$1 = CFAF 238.98 1977 US$1 - CFAF 245.67 1978 US$1 = CFAF 225.64 1/ Covering also supervision of Loan S4-CM. 2/ Partial revision 10/23/79 3/ Covering also supervision of Loan 1038-CM - vi - PROJECT PERFORMANCE AUDIT REPORT CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) Highlights The purpose of the projects was to continue the rehabilitation of Cameroon Railways, thus reducing transport costs and avoiding major interruptions of rail service. This was to be achieved through replacement of a major bridge; track renewal; procurement of locomotives and rolling stock: and technical assistance. The projects were satisfactorily imple- mented but because of cost overruns, the technical assistance was trans- ferred from the Second to the Third Project. The projects' purpose was largely achieved, but they are now expected to have an economic return of only 10% against 13% estimated at appraisal. Main reasons for this are the shorter useful life of track renewal works and lower than expected productivity of rolling stock (PCR, paras 7.05-7.10). Most of the loan covenants were complied with (PCR, Annex 13) but the financial targets were not fully met because of rapidly rising costs and lower than expected traffic (paras 10, 12). Points of particular interest are: - delays and cost increases caused by bridge foundation problems (para. 20); - communications between the Government and the Bank on railway realignment decisions were unsatisfactory (paras 19, 21); - Regifercam's weak working capital position (para. 25); and - institutional weaknesses of the Borrower and weaknesses in the Bank's appraisal and super- vision led to late identification of certain technical problems and less than optimal use of consulting services (paras 22, 28-30).  PROJECT PERFORMANCE AUDIT MEMORANDUM CAMEROON SECOND AND THIRD RAILWAY PROJECTS (LOAN 1038-CM AND LOAN S4-CM) I. Introduction 1. Cameroon, with a population of 7.8 million (1977), is situated slightly north of the equator on the west coast of Africa and covers an area of 475,000 km2, almost as great as that of France. Neighboring countries are Nigeria to the west and landlocked Chad and the Central African Republic to the north and east; Congo, Gabon and Equatorial Guinea lie to the south. Cameroon's natural resources are considerable, but not always easily accessible: there are large forest areas, good conditions for a wide range of agricultural crops, potential for livestock development and offshore oil and gas which have so far given modest yields. Transporta- tion is of crucial importance to all ongoing and potential developments and, recognizing this, the Bank Group, together with other development institu- tions, has substantially aided the development of adequate transport facil- ities in Cameroon, with the added benefit of providing transit services to landlocked neighboring countries. Up till now, the Bank Group's commit- ments in Cameroon for all purposes amount to US$496 million, covering 32 projects. Ten of these projects, for an amount of US$240 million, have been in the transportation sector (four highways, four railways and two ports). II. The Project 2. The Regie Nationale des Chemins de Fer du Cameroun (Regifercam) is a system of about 1,150 km of meter gauge track. It provides two main transport services: one, it carries most of the freight and a substantial proportion of passenger traffic in the country's central transport corridor (some 290 km in length) between the two largest cities, the port of Douala, handling 90% of the country's import and export traffic, and Yaounde, the administrative capital; and, two, it extends some 620 km northeast beyond Yaounde, a new construction completed in 1974 through an area sparsely served by roads, to Ngaoundere where it joins with the national road sys- tem to provide connections to the sea, not only for the whole of the north- east of the country but also for landlocked Chad and CAR. 3. The First Railway Project/ (Loan 687-CM of 1970) was designed to help with the long-run rehabilitation of the system and meet growing traffic requirements through (a) the replacement of old locomotives and rolling stock and (b) renewals and replacements of fixed installations on the older part of the system between Douala-Yaounde. It also contained provision for an economic study of the possible major realigment of this older section to higher design standards (comparable to the new construc- tion beyond Yaounde to Ngaoundere). 4. The Second Railway Project, for which the Board approved a Bank loan of US$16 million equivalent on June 27, 1974, was essentially a con- tinuation of the first. It included: the replacement of a major bridge in the Douala-Yaounde corridor deferred from the first project as a result 1/ PPAR No. 1633 of June 15, 1977. -2- of further engineering studies; provision for more track renewal; further purchases of locomotives and rolling stock to meet traffic requirements through 1976/77; and provided for consulting services, including a further study of the transport corridor problem under revised terms of reference. 5. The Third Railway Project in turn grew out of the Second Project. Cost overruns, the subject of later comment, and adverse currency exchange movements which could only be partially offset by further contributions from the Borrower and by a suppliers credit, led the Bank and the Govern- ment to the view that consulting services under the Second Project should be transferred to a third Bank railway project. At the same time, it was agreed that a feasibility and engineering study for enlarged railway terminal facilities in Douala should be carried out. This work had been an item in the First Railway Project but was held over pending the Govern- ment making suitable financing provision. This had not proved possible. All consulting studies were now included in a Third Railway Project for which the Board approved a loan of US$2.3 million equivalent on May 4, 1976. 6. Appraisal estimates of the project costs and actual costs (PCR, Annexes 1 and 2) and figures of loans allocated and disbursed were: (All Figures US$ Million) Project Loans Appraisal Est. Actual of Cost Cost Allocated Disbursed Loan 1038-CM Japoma bridge 4.85 7.69 3.23 3.55 Track renewal 3.55 3.96 3.24 3.24 Motive power 5.29 5.991/ 0 0 Rolling stock and spares 7.50 8.26 7.22 7.17 Miscellaneous 0.82 0.75 0.68 0.60 Consulting services 0.99 0 2/ 0 0 23.00 26.65 Interest and charges 1.44 1.44 Unallocated 0.19 0 16.00 16.00 Loan S4-CM Consulting services 2.892 3.085 2.3 2.10 1/ Financed by Caisse Centrale de Cooperation Economique (CCCE). 2/ Transferred to Loan S4-CM. - 3 - III. Project Implementation 7. The project had as its main objective to maintain and improve the operational efficiency and financial viability of Regifercam (a) by physical investment to meet priority needs and (b) by consulting services to help Regifercam improve maintenance, operational and management services. Important consulting studies were to determine the optimum mix of possible future transport investments in the vital Douala-Yaounde transport corridor; and to determine the most economic size and optimal design and location of marshalling and other railway facilities within the Douala area. 8. The physical components of the project (Loan 1038-CM) were com- pleted in December 1978, which was 18 months or 50% behind appraisal sched- ule, with a cost overrun of about 21%. The consulting services (Loan S4-CM) were substantially completed by December 1978, but loan closure did not take place until June 1979, when financing of the remaining consulting services was transferred to the Fourth Railway Project (Loan 1734/Credit 936-CM). The projects were implemented and supervised concurrently and are reviewed together as one project in this audit. Physical Completion 9. Physical completion of the project encountered difficulties: (i) the construction of the new (Japoma) bridge begun in October 1974 was delayed; (ii) the track renewal program came into conflict with a Govern- ment decision to provide, earlier than anticipated, a completely new align- ment for the section of Yaounde-Otele (60 km) scheduled to be renewed under the project. This is further discussed in para. 17 below; and (iii) the maintenance and rehabilitation of assets was found to be unsatisfactory in several areas, and where this was so, the terms of reference of consulting services under the loans were framed to give technical assistance. In the area of track maintenance, consultants' recommendations for dealing with the alarming number of rail breakages (334 in FY78; PCR, para. 6.04) were called for but not submitted with their final report. Items (i), (ii) and (iii) are all the subject of further comments under "Points of Special Interest". Traffic Forecasts and Operations 10. Comparing 1972/73 (the base year at the time of appraisal) with 1977/78 (the latest available estimated figures), both passenger and freight traffic increased. In terms of passenger-km and ton-km, the rates of increase were about 3% and 10% per annum, respectively. However, traffic forecasts failed to be realized: by 1978, passengers were 17% less in numbers and 7% less in passenger-km, and freight was 28% less in tons and 22% less in ton-km than forecast. The completion of the new rail extension beyond Douala to Ngaoundere in 1974 resulted, as foreseen, in longer aver- age journeys and hauls, but passenger results are said to have been de- pressed by the heavy incidence of ticket-less travel and freight forecasts were adversely affected by a failure of timber traffic to increase due to a slump in world market conditions. Another reason put forward in the PCR (para. 7.02) for the lower than forecast figures is a "shortage of railway carrying capacity". Annex 3 of the PCR shows that the forecast traffic needs of Regifercam up to 1976/77, which the project was designed to meet, will not eventuate until about 1980; theoretically, there should have been no shortage of railway capacity until about now. Annexes 11 and 12 of the PCR show comparatively poor availability and utilization of locomotives, poor freight car turnaround time and daily mileage, and low staff produc- tivity. Poor performance is therefore the main reason for the shortage of carrying capacity.!! 11. Two features of operations as referred to above are disturbing. One is the relative inability of Regifercam in the project period 1974-78 to improve its operational performance above low base levels. The second feature is that passenger traffic, requiring almost the same number of train movements as freight traffic, earns only 14% of all Regifercam's revenues as against 80% earned by freight. These two features are the subject of further comment under "Points of Special Interest". Financial Performance 12. While the Government and Regifercam largely complied with the financial covenants of the Guarantee and Loan Agreements of the Second and Third Railway Projects, albeit sometimes belatedly, Regifercam's finan- cial performance, as measured in cash generated from its operations, has been consistently lower than forecast throughout the project period. For FY78, the figures were - working ratio 84, financial rate of return -0.3%, debt service coverage 0.9x against forecast figures of 73, 3.5% and 1.6x, respectively. The main reason for this disappointing performance was that traffic was lower than anticipated and, while revenues were sustained at forecast levels (see para. 13(ii) below), expenses were substantially higher, primarily because of lack of efficient cost control and also staff costs being higher than necessary. Comment is made under "Points of Spe- cial Interest". 13. Satisfactory features of financial performance were: (i) a debt- equity ratio of 44/56; (ii) Regifercam's conscientious application of tariff increases as agreed with the Bank (so maintaining revenues in line with forecasts although traffic was some 20% less than estimated); and (iii) Regifercam's willingness under the Third Project to accept consulting services to devise cost control systems and a manpower plan in order to obtain more efficient control of working expenses. (It is also satisfactory that the approval of a Fourth Railway Project, which contains provisions which should help Regifercam to strengthen its management, financial, operational and maintenance services and so make possible limitation of bank overdrafts and Government subsidies, should have been effected so soon after the completion of the Second and Third Projects.) 1/ Regifercam in their comments, which are appended as Attachment A, relates the steps taken to achieve improvements and expands on some of the operational difficulties. -5- Transport Planning and Coordination, with Particular Reference to the Douala-Yaounde Transport Corridor 14. The first section of Regifercam's system runs from Douala, the main port, to Yaounde, the capital, a distance of 291 km, and was built between 1909 through 1927. The second section from Yaounde to Ngaoundere, built to high technical standards in 1964 through 1974, is 622 km in length and presents no operating problems. On the other hand, the track on the Douala-Yaounde section, which carries the main traffic of the country through an area with no competing all-weather roads, was built to low standards and is too light for safe and efficient operation. The Government and Regifercam have had to consider whether track relaying would be suffi- cient or that major realignment would be needed. 15. An economic study was initiated under the First Railway Project with a view to determining the extent and nature of the investment to be made in the railway to keep it operating safely and efficiently in the absence of suitable alternative transport, and also to determine the optimal economic investment choices in the Douala-Yaounde transport corridor, particularly as between road and rail. Unfortunately, this was insuffi- ciently comprehensive (PPAR of June 15, 1977) and the study had to be expanded under the Second/Third Railway Projects. The work done since then has included (1) the full realignment of 100 km of railway from Yaounde west towards Douala to Maloume which took about three years and was com- pleted in April 1978. The economic justification of the realignment from Yaounde to Otele (60 km) was made in a consultants' report commissioned by the Government on which further comment is made in para. 18 below. Economic justification for the remaining 40 km from Otele to Maloume was made in the transport corridor study commissioned under the Second Railway Project. (2) In late 1978, major realignment began of some 80 km of the railway from Douala east (towards Yaounde) to Edea. The economic justifi- cation for this work which is still in progress was also made in the cor- ridor study commissioned under the Second Railway Project. The financing of this work is being met by foreign donors (KfW, FED, CCCE, FAC, CIDA and USAID).1/ The final or middle section, Edea to Maloume, of about 120 km which is through the mountains could be the most expensive section if fully realigned to the same high standards as the other two. The corridor transport study found that, at present, a realignment of this section is not justified. It also found that an acceptable element of any solution to the problem is the construction of a heavy duty road between Douala and Yaounde. 1/ KfW - Kreditanstalt fuer Wiederaufbau FED - Fonds Europeen de Developpement CCCE - Caisse Centrale de Cooperation Economique FAC - Fonds d'Aide et de Cooperation CIDA - Canadian International Development Agency USAID - United States Agency for International Development -6- 16. The position now is that the Government and the Bank have agreed, under the Fourth Railway Project, to further closer study of all possible alternatives to full realigment of the third railway section and that no capital investment on this will be undertaken "unless it has been estab- lished that such improvement is economically justified" (Loan 1734-CM Guarantee Agreement, Section 3.03). In the meantime (a) Regifercam is using its own forces and salvaged material to keep the existing rail section in as good condition as possible, and (b) the Bank has made funds available under the Cameroon Fourth Highway Project for a study to upgrade the Douala-Yaounde road to paved, heavy duty standards and this work, if approved and begun within a reasonable time, could be completed by 1983. These developments are the subject of further discussion under "Points of Special Interest". 17. The Douala-Yaounde transport corridor study in addition to helping decision-making and investment choice has been of value in focussing atten- tion in Cameroon on the need for intermodal planning. The other major consulting study under the Third Railway Project has also been concerned with transport sector planning. The feasibility and engineering study to determine the economic size and optimal design and location of marshalling and other railway facilities within the Douala area took into account not only the long-term traffic requirements of the railway but also the expand- ing needs of the Port of Douala and the overall needs of industrial and urban development. It has contributed greatly to the Fourth Railway Project and it is gratifying that the Government has now requested advice and help from the Bank to carry out an overall transport sector study. Institutional Needs and Related Consulting Services/Technical Assistance 18. In addition to the Douala-Yaounde corridor study, the Third Rail- way Project took over from the Second Project the financing of a management services study related specifically to improving (a) all aspects of traffic operation, (b) motive power and rolling stock maintenance, and (c) Regi- fercam's planning and information system. In general, there was a slow start of the technical assistance effort as related to institutional needs. The contract documents for the management services study were prepared under the Second Railway Project (as were the terms of reference for the Douala-Yaounde transport corridor study), but consultants' analyses of needs were not begun until the Third Railway Project (PCR, para. 4.03). Some useful work was done but the results fell short of what was hoped for; in general, while the analysis and definition of what was required was done well, the implementation of the plans of action to achieve improvements was uneven. The PCR (Section 4) advances a number of reasons for this, including inter alia a difference of view between the Bank and one consult- ing group as to the way to proceed to achieve improvements, a shortage of qualified counterparts, and inadequate maintenance facilities to permit carrying out substantial remedial work. Additionally, it became clear during implementation that there was a limit to Regifercam's absorptive capacity for consultant studies. Apart from the shortage of counterparts, there is a shortage at the senior level of men who can afford the time to answer all the questions and discuss matters in detail as they arise in connection with these studies. To compound the problem, the volume of - 7 - work needed to be done was greater than expected (see reference, e.g., to poor track maintenance and less than satisfactory operational performance in preceding paras 9 and 11). To deal with this situation, the Bank and Regifercam have agreed to carry over substantial technical assistance work into the Fourth Railway Project, including an extensive manpower planning and training component focussed on the implementation of planned work improvements as initiated under the Third Railway Project. Further comment on this matter is made in "Points of Special Interest". Economics 19. A by-product of the decision to proceed with the full realignment of the Yaounde-Otele section earlier than anticipated (see para. 15) was to reduce the economic return on the Second Railway Project. The history of the matter is dealt with at length in the PCR (paras 9.05-9.09). Essen- tially, the basis of the decision was the dangerous state of the track and the availability of financing on concessionary terms which could not be used for other purposes. However, the Bank considered the ERR of about 8% contained in various feasibility studies to be unsatisfactory. In due course the Government decided, without prior information to the Bank (as required under Section 5.07(a) of the Loan Agreement for the Second Railway Project), to go ahead with the full realignment. The Bank acquiesced in the Government's decision and also that the track renewal on the existing formation, as strongly pressed by Regifercam because of the dangerous state of the track, should be done. This audit agrees with that decision. The benefits of track renewal on the section replaced by the full realignment were enjoyed only for some 18 months instead of the five or more years anticipated at the time of appraisal. The recovered material has a value of some CFA 430 million at 1978 prices (or two-thirds of the original cost) and is being used for spot replacements of weak sections of the Douala-Yaounde corridor. However, the effect has been to reduce the ERR on track work from 12 to 0 and the total project return from an estimated 13 to 10. The recalculations suggest the costs involved may have been higher than should have been paid, but the issues were complex, involving technical, manage- ment (the running of passenger trains on track known to be dangerous), financial and political considerations (Government and co-donor relation- ships) as well as economic considerations. IV. Points of Special Interest Physical Completion 20. (i) The Japoma Bridge is a long (some 300 m) single-track rail- way bridge over a river located 18 km from Douala on the main central Trans- cameroon system and therefore of vital importance to the movement of the bulk of the country's traffic. Its reconstruction or replacement was included in the First Railway Project (1970) because it was becoming unsafe Investigations into reconstruction proved this difficult and uneconomic so a new site had to be found, involving new earthwork approaches. Extensive investigations and the calling for and examination of competitive bids led to the item being carried over into the Second Railway Project when its estimated cost, including physical and price contingencies, was US$4.85 - 8 - million. The building of the new bridge was begun in October 1974. As the construction contract for the bridge was awarded on the basis of an alter- native design submitted by the contractor, responsibility for the design and building of the bridge rested with the contractor. The design was approved and checked by consultants who, while appointed by the Borrower, were financed for this purpose by the contractor. The contractor contract specified that the consultants had to be hired for this purpose. The Bank was at the time under the impression that the consultants were paid by the Borrower, and only became aware of the contractor/consultant association when the foundation problems described below became apparent. These consul- tants were then also employed by the Borrower under a separate contract together with a member of the Borrower's staff whose experience was somewhat limited to supervise the work. By early 1977, construction had run into serious foundation problems related to poor contractor performance and inadequate supervision. Regifercam refused to pay additional costs for necessary remedial works, and this decision has not been contested (PCR, para. 3.02).!/ The work was completed by mid-1978 and, following testing under load (delayed by subsidence of approach embankments), put into service in January 1979, at a cost of US$7.7 million, which was almost 60% higher than anticipated. A situation in which the consultant has had responsibil- ity, while in the employ of a contractor, for approving his design and is then appointed to supervise the work is not quite in line with the indepen- dent contractor/supervising consultant relationship usually thought to be desirable. In this particular case, one result was the necessity for considerable Bank staff input to ensure that satisfactory resolution of the problem was achieved. 21. (ii) Yaounde-Otele realignment: The Government decision to take advantage of funds made available by other development agencies at concessionary rates to provide, earlier than anticipated, a completely new alignment for this 60 km section of the mainline scheduled for track relay- ing under the Second Railway Project, points at unsatisfactory communica- tions between the Government and the Bank on an important new work (PCR, paras 9.05-9.09). The Borrower did not consult the Bank on the subject (para. 19) notwithstanding the requirements in the Loan Agreement for the Bank's concurrence, while the Bank in spite of its frequent presence in Cameroon was apparently somewhat taken by surprise by the decision. 22. (iii) Track renewal: one reason there is such urgent need of track renewal between Douala and Yaounde (as discussed in Section III of this audit) is the very heavy incidence of rail breakages, 307 cases in FY77 and 334 in FY78 (PCR, para. 6.04). It is understood most breakages occur at the thermit welded joints of old rails, which suggests poor work and management supervision in the field. However, the PCR also states (para. 6.04) that "... about 50% of the rail breakages in 1976-78 occurred on a 50 km section between Edea and Eseka where the track is fairly new 1/ Regifercam's comments (Attachment A) amplify on the construction problems and division of responsibility between the parties involved. -9- 36 kg rails laid in 1965". This suggests there might be technical prob- lems involved of relieving stress in long welded rails.l/ The question of the missing recommendations by consultants (see para. 9(iii)) should receive priority of attention under the Fourth Railway Project. The audit is surprised that the matter of these breakages did not come 1p for serious consideration through Bank supervision until half way into the project period (PCR, Annex 7). Operational Performance and Passenger Services 23. There may be a tendency in operations, as referred to in Section III, to blame "shortages" in capacity for the railway's failure to perform. The correct relationship between actual and potential performance and investment needs is of critical importance to Regifercam, as is the need to improve operational performance above present low base levels. Some of the important operational targets set under the Second Railway Project are questionable (PCR, Annex 12). The targets for availability of locomotives and rolling stock can be accepted, although one or two of the locomotive figures seem marginally high, but the targets for the utilization of freight cars and for staff productivity suggest deficiencies in appraisal.Z/ Thus, the average daily km of freight cars achieved during the project period was nearly always higher than the targets, but the targets were lower than might reasonably have been set in view of the low performance at the time of appraisal and especially because the completion of the new line in 1974 (para. 3) was to increase the average haul. With regard to staff productivity, the PCR makes the comment with which the audit agrees that the targets set were too low for productivity (FY78 figures: 166,000 units achieved per employee; target 154,000 units) and too high for the number of staff employed (4,651 actual total; 5,897 target total - both figures for FY78). Utilization of operational stock is, of course, initially dependent on availability. Both the availability and utilization of Regifercam's locomotives are poor and generally the PCR assigns shared responsibility for poor operations to the technical departments responsible. The audit notes that all matters related to operations are scheduled for close attention, linked with technical assistance and training, in the Fourth Railway Project. 24. Both the project Appraisal Report and the PCR are silent on the position mentioned in para. 11 that passenger traffic, requiring almost the same number of train movements as freight traffic, earns only 14% of all Regifercam's revenues as against 80% earned by freight. The latest data provided by Regifercam (see Attachment A) indicate that 23% of operating costs result from passenger traffic. The audit estimates, however, that 1/ Regifercam's comments (Attachment A) provide additional information. 2/ CPS, however, consider that the term 'deficiency' is extreme and does not recognize the point that such operational targets have to be practicable and take the realities of the situation into account. They point out that at appraisal, the improvement in the daily freight car-km during a four-year period was set at about 40% higher than the actual in fiscal 1973, and took into consideration prevailing circum- stances (including the Trans-cameroon extension). - 10 - the percentage of total cost to be attributed to passenger traffic will be higher. These figures suggest the need to take a close look at what Regifer- cam can afford to invest in passenger traffic as against what they might like to do for reasons of social service, public relations and prestige. To have 45% of all train movements and at least a quarter of total cost concen- trated on earning 14% of revenues suggests that prima facie there is a case not only for close examination of uneconomic services and offsetting Govern- ment subsidies as required under the Fourth Railway Project but a case also to defer, reduce or stop any capital expenditures on passenger rolling stock and on a larger than necessary passenger station at Douala (on favorable financial terms or not) as is now being considered by Regifercam, pending review of needs under conditions of increased competition with road trans- port as envisaged post-1983.1/ The need for caution in this respect is indicated en passant at various places in the Bank's Appraisal Reports and the PCR. Financial Performance 25. As indicated above (para. 12) and in the PCR (Section 8 and Annexes), Regifercam's cash generation has been below expectations. As a result, it has left no room for self-financing of capital nor additions to working capital. So long as the Government is able and willing to make good operating deficiencies through subsidies (as required under the Guarantee Agreements of the Second and Third Railway Projects), Regifercam is protected. However, Regifercam's position is vulnerable: a weak working capital position in railways often results in understocking of spares and equipment and this in turn can result in a reduction of maintenance leading to a counter-productive loss of operational capacity and the beginning of a vicious downward cycle. The stores inventory position in 1978 as reflected in current assets seems good, and there is no reference in the PCR to the poor operational figures of Regifercam being linked with shortages of spares and equipment, but the vulnerability of Regifercam to such a position developing is evident in the very weak FY78 figure of net working capital which is CFAF 43 million (PCR, Annex 5; the forecast figure had been CFAF 2,291 million). As a result, the Railway has to rely on extensive bank overdrafts to supplement their working capital which is, however, not an exceptional situation in Cameroon. The Douala-Yaounde Transport Corridor 26. Determination of the optimal economic investment choices in the Douala-Yaounde transport corridor (see preceding paras 14-16) is the most critical transport problem which has faced the Government and Regifer- cam over the last decade and still faces them as it reaches towards a more conclusive stage. In dealing with this problem, the Government, the Bank and Regifercam have agreed in two sets of loan documents covering the Second and the Fourth Railway Projects (respectively Loan Agreement, Section 5.07(a) and Guarantee Agreement, Section 3.03) that no capital investment 1/ Regifercam in their comments (Attachment A) reach a different conclusion. - 11 - will be made in the Douala-Yaounde section of the railway unless it is established that such investment is "economically justified". It is sug- gested, however, that in future in difficult cases like this involving revenue-earning entities, the question also be raised at an early stage with the Borrow'- as to how a reasonable financial benefit is to be obtained from the project. This would alert the management of revenue-earning entities to the financial impact and possibly resulting needs for tariff revisions at an early stage; this awareness tends to be lacking when the project is justified on economic grounds by government acting largely in isolation from management. 27. A decline in railway freight traffic is expected to take place post-1983 after completion of a paved highway (see preceding para. 16(b)), but to grow slowly thereafter, recovering to the FY83 level by FY87 (PCR: Discussion in Background on the railway's role and in para. 7.03). A question arises whether in these circumstances it may not be beneficial for Regifercam to prepare and have ready, against the decline in traffic, a new flexible tariff which would allow traffic to move at rates between present tariffs and short-term marginal costs if need be, assuming otherwise underutilized capacity (light running of locomotives and empty running of freight cars). This might find at least a partial commercial solution to the new competitive situation and reduce the claims on the Government's central budget for subsidies.!/ Before introducing marginal pricing, however, a study of price elasticity of demand should be made. Institutional Performance 28. As stated in preceding para. 18, there is a shortage of senior level manpower in Regifercam. The heavy input of consulting services under this project has accordingly put a strain on management which in turn has led to delays in awarding contracts and in taking decisions re- lated to consultants' proposals (PCR, para. 4.14). The solution in this case has been (a) to carry some of the consulting services over into the Fourth Railway Project, so spreading the load over a longer period and (b) to change the nature of some of the assistance - personnel doing the job., not only advising. The training element has also been increased to give a longer-run benefit to Regifercam in the way of suitable counter- part (and other) staff. It would seem, however, that the Government should consider whether top management (executive and advisory levels) could be strengthened to provide continuity of review of consultants' work and reduce delays in the decision-making process. For the Bank, the main issue seems to be that it should have given more careful consideration at the time of project appraisal to the question of the absorptive capacity of the Borrower to make productive use of consulting services/technical assistance. 1/ Regifercam in their comments (Attachment A) suggest that these steps can easily be taken. - 12 - Supervision 29. The Bank's supervision of the project was not entirely satis- factory, with the strength, duration and frequency of missions sometimes below what would have been desirable. Some important events during the project were apparently overlooked or noticed rather late, such as the unsatisfactory arrangement for hiring supervisory consultants (para. 20) and the rather late recognition of the need for a study on rail breakages (para. 22). With regard to the timing, given the accepted need for ade- quate, systematic supervision, there should be no gap of 13 months in the middle of a project when there is no mission (mission data in Basic Data Sheet). The audit finds that responsibility for the gap between November 1975 and December 1976 is linked with the institutional weakness referred to in para. 28 above. The Third Railway Project (Board approval May 1976) saw the beginning of the consultants' diagnostic work which had reached a stage by mid-summer when supervision would have been useful. However, at this time, July/August, most of Regifercam's resident technical assistance staff (from France, 37 in number) go on vacation and when they return, the Assistant Director General of Regifercam, who has principal responsibility for reviewing consultants' proposals, takes vacation in September/ October (PCR, para. 4.14). There could be no useful mission until he returned. While it is thought Regifercam should consider strength- ening its top management to provide cover for the situation described, the Bank equally may have a parallel responsibility to strengthen its super- vision in projects which have a large technical assistance component demand- ing close liaison between all parties involved. V. Conclusions 30. The Second and Third Railway Projects made useful contributions to: maintaining Regifercam's operations at a time of sustained traffic increase; arresting a deterioration in Regifercam's finances; focussing attention through the Douala-Yaounde transport corridor study on the need for intermodal transport planning and decision; and, through the provision of consulting services with terms of reference related to management and operational needs and weaknesses over a wide field of activity, initiating some improvements in management and operations and contributing signifi- cantly to preparation of the Fourth Railway Project. 31. Where the Second and Third Railway Projects may be considered weak was: overoptimistic traffic forecasts; failure to achieve any marked improve- ment in the availability and utilization of locomotives and rolling stock, the standards of which are low; failure to get earlier management action to initiate cost, budget and staff control systems to keep working expenses in check: and inability to achieve the forecast economic rate of return on the project, reestimated at 10% as against 13%. 32. The above negative issues face Regifercam at a time when its favored position in the Douala-Yaounde transport corridor is threatened by the probability of a competitive paved road post-1983. Considerable manage- ment effort and correct economic, financial and operating decisions will - 13 - be of the essence in dealing with the many problems. Regifercam is at least fortunate in having the time to prepare for the increased competitive situation; and it is hoped that the Fourth Railway Project, which has been designed inter alia to reduce weaknesses evinced during the Second and Third Projects, will also be of major use. s ATTACHMENT A -15 - Page 1 FORM NO. 788 (1a74) IBRD LANGUAGE SRVICES DMION CONTROL No, JPATE: June 12. 1980 ORIGINAL LANGUAGEt French (Cameroon) DEPT, OED RNIS LAOR: EMcM:hPb Office du Chaiin de Fer Transcamerounaise B.P. 625 Yaound6 Yaounde, May 21, 1980 Our ref.: JH/jh No. 288.SP.79/80 The Director General, Operations Evaluation Department Subject: Project Performance Audit World Bank Report on Cameroon Second 1818 H Street, N.W. and Third Railway Projects Washington, D.C. 20433 (Loans 1038 CM and S4 M*) U.S.A. Dear Sir: I have the honor to acknowledge receipt of your letter of April 18, 1980, requesting my views on the Project Performance Audit Reports on the Cameroon Second and Third Railway Projects. Contrary to what the reports state, the Office du Chemin de Fer Transcamerounaise is not a decision-making body; its role is, rather, to implement government decisions Dertaining to railway infrastructure. For this reason, therefore, any comments that may be made will be sent to you through the intermediary of the Ministry of Transportation. Yours, etc. The Director General /s/ J. HOUDET ATTACHMENT A -16 - Page 2 FORM NO. 788 01B LANGUAGE MVICES DISION 1-74) CONTROL No. E-1425780 bATE: June 11. 1980 ORIGINAL LANGUAGEt French (Cameroon) DEPT. OED R To:ENMcM:hpb Rfpublique Unie du Cameroun United Republic of Cameroon Regie Nationale des Chemins de Fer Cameroon National Railway Authority Douala, May 21, 1980 P.O. Box 304 The President and Director General Douala of the Cameroon National Railway Authority No. 2783/PDG/DGAE to SUBJECT Mr. Shiv S. Kapur Project Performance Audit Report on Director General, Operations Second and Third Railway Projects Evaluation Department (Loans 1038-CM and S4-CM) International Bank for Reconstruc- tion and Development REFERENCE 1818 H Street, N.W. Your letter of April 18, 1980 Washington, D.C. 20433 U.S.A. Dear Sir: I have the honor to acknowledge receipt of your letter of April 18, 1980, transmitting the Project Performance Audit Report on the Cameroon Second and Third Railway Projects (Loans 1038-CM and S4-CM). Examination of this report, particularly those sections dealing with the railway projects, gives rise to the following comments: Paragraph 10 (last two sentences): It is indeed true that up to mid-1978 the figures for locomotive availability were poor. This state of affairs led us to review the following matters: - organization of maintenance operations; - distribution and level of technical assistance; - vocational training with the aid of your organization and CCCE. Results obtained since mid-1978, except for limited periods marked by a high incidence of mechanical or electrical failures, show that our response was the proper one. - 17 - ATTACHMENT A Page 3 As regards the figures for freight car utilization, a number of factors were involved here, namely: - The number of locomotives in service has been inadequate net only because of poor availability but also as a result of the loss in accidents of two 3,600-hp locomotives and one 2,400-hp locomotive. - The inadequacy of the terminal facilities in Douala and Yaounde prior to 1978 meant that we did not have enough car handling and sorting tracks either in Donala (port and other installations) or in Yaounde. The complex nature of certain services and the almost universal shortage of storage facilities (both public and private), whether open or covered, resulted in major delays. - The inadequate capacity and unreliability of telephone links between Donala and Yaounde permitted operational communications only one day out of two on average. - The number of accidents and incidents affecting traffic between Douala and Yaounde, particularly: * Breaks in rail welds due to known causes: (i) extreme wear on certain rails between Douala and Edea and, prior to renewal, between Otele and Yaounde, resulting in excessive stresses, since the modulus of torsion of the rails when new was inadequate in light of the maximum weight per axle, namely 26 and 30 kg per running meter for 16 tons/axle; (ii) in- adequate track maintenance to preserve the initial characteristics of long bars welded in plan and in section, leading to elongation and fracture or deformation and buckling; (iii) repair welds which are some- times technically faulty and often made outside the required temperature range. - 18 - ATTACHMENT A Page 4 * Track deformations resulting from inadequate ballasting or, in certain arest, the impossibility of obtaining a proper ballast profile without maintenance of track benches or restoration of the eroded formation subgrade (the need to carry out such restoration work by hand makes the operation costly and time-consuming). * Numerous derailments due to faulty loading of logs. A standing order was issued in 1972, and it is enforced. But it must be recognized that the transportation of logs over a winding, narror-gauge track does not allow for the usual margin of safety. Regardless of how the logs are loaded, we have never had an accident on our realigned sections of track. This list of operating difficulties is not exhaustive; if one is to express an opinion on our operating results, one must be aware of the difficulties we face. We do not simply accept these problems as unavoidable, and we have tried to overcome them to the best of our ability, given local conditions. Paragraph 11 and paragrath 24: In 1978-79, operating costs were assigned as follows: passenger traffic 22.7%, and freight traffic 77.3%. The text of the report thus contains an untruth. I would add that this distribution has been changing only slightly and that passenger revenues roughly cover the marginal cost. Paragraph 20: (1) The Japoma Bridge The report does not mention that the site selected for construction of the bridge and the left-bank earthwork approaches involved major geological problems, even though this site was definitely the best available in the area in question. While it is true that the contractor made two mistakes during emplacement of the foundations for pier No. 1, it should be noted that this foundation was the - 19 - ATTACHMENT A Page 5 most difficult to execute because of the need to traverse a bed of sandstone. With the benefit of experience, the project might possibly have been imple- mented without difficulty if a simpler foundation (the other pier) had been tackled first. The text implies, on the basis of a construction problem that is not that unusual for projects involving major difficulties in implementation, that the consultant retained by the Railway Authority to supervise the works was not independent because the engineers in question had earlier been paid by the contractor to check the technical documents (calculations, designs, construc- tion procedures, ete.). We never had occasion to observe anything suggesting that the consultant was dependent on the contractor. In particular, the plan for strengthening the faulty foundation was prepared extremely well on the initiative of the consultant in full agreement with the project manager. The report implies that the initial foundation plans for pier No. 1 were not properly drawn up, probably reflecting the views of an expert sent by the World Bank. We would merely point out that, in the opinion of that same expert, the measures taken to strengthen the foundation were likewise inadequate. We contested this view, and the subsequent stability of pier No. 1 bas happily confirmed our opinion. In point of fact, the main reason for the delay in commissioning the bridge and for the cost overrun lies in the unusual problems encountered in construct- ing the left-bank earthwork approaches on top of a 40-a thick bed of unstable material. Borings made across the embankment show that the fill materials have penetrated as deep as 25 meters (maximum above-ground height of the ambadment approx. 10 meters). The virtual stabilization of the earthworks was secured - 20 - ATTACHMENT A Page 6 roughly 18 months after they had been rebuilt, which was roughly one year after initial emplacement of the embankment. In any event, we wish to stress that the contractor carried out this work extremely well and to our satisfaction, and also that the assistance we received from the consultant was exactly what we had anticipated. Paragraph 22: (iii) Track Reneal We feel that we have covered this point in our discussion of paragraph 10. Paragraph 24: We have reestablished the true situation in our comments on para- graph 11. We feel, therefore, that the opinion expressed on the future of pas- senger service and on capital expenditures under this )eading is excessive. What we seek is to cover our marginal costs properly. With regard to the desirability of maintaining passenger services and the suggestion that the new passenger station for Douala is overly large, the Rail- way Authority believes that these are matters falling within the competence of the Government. Paragraph 27: On July 1, 1979, we introduced a new scale of charges based on prime costs, which will enable us if need be to readily adapt our charges to meet competitive pressures. These new tariffs were prepared in conjunction with the consultants responsible for the management and operating studies. Yours, etc. /s/ Christian TOBIE KUOK President and Director General Cameroon National Railway Authority - 21 - ATTACHMENT B PROJECT COMPLETION REPORT CAMEROON: SECOND RAILWAY PROJECT (LOAN 1038-CM) CAMEROON: THIRD RAILWAY PROJECT (LOAN S4-CM) During the appraisal mission of the proposed Fourth Railway Project from May 30 to June 14, 1978, Messrs. Apitz and Defalque carried out the final supervision of the Second and Third Railway Projects. Complementary data were collected during subsequent missions in October and December 1978. Data on economic aspects of these projects were collected by Mr. Dick during his mission in Cameroon from September 22 to 27, 1978. Background Cameroon covers a roughly triangular area of 475000 km square with a coastline of about 280 km. It borders on six countries - Nigeria, Chad, Central African Empire (CAE), Congo, Gabon and Equitorial Guinea - and occupies a strategic position for transit traffic of landlocked Chad and CAE. The population is about 7.7 million and not only is the density low but the distribution is uneven. There are four main areas of economic activity: the coastal/south-western region; along the Douala-Bafoussam corridor; in the central region around Yaound6 and in the northern region around Maroua. Thus the transport system is of paramount importance fulfilling an important role in unifying the country both economically and politically and in providing communication with neighboring countries. The transport system has been developed extensively in recent years, and expenditure on it accounted for more than half public sector investment under the third plan (FYs 1972 to 76) and is expected to account for 35% of the CFAF 176 bii1ion fourth plan expenditure. The system basically radiates from Douala, the commercial capital and major port with one branch serving western Cameroon and the other (the Transcameroonais system) through Yaound6 the administrative capital via Ngaoundere to the north and Chad. While the western line now plays a minor economic role following extensive development of the highway system, the Transcameroonais is a critical link with north Cameroon. It provides the only existing all-weather surface link from Douala to Yaoundg and the only direct surface link from Yaound6 to Ngaoundere where it links up with the paved road system. In FY 1979, freight traffic totalled about 600 m tkm of which timber 131 m, other agricultural products 138 m, petroleum 77 m and general freight 239 m. Passengers totalled 246 m pkm. The average freight haul was 425 km and average passengers distance 145 km. - 22 - Investment in the railway has been of two forms: (i) infrastructure investment comprising the extension of the line from Yaound6 to Ngaoundere completed in 1974 and realignment investment on the old Douala-Yaound6 line, in mither of which the Bank participated; (ii) investment in rolling stock, track, machinery and equipment which the Bank has substantially helped to finance. The First railway project comprised some track renewal, rolling stock and initial expenditure on construction of the Japoma Bridge. The Second and Third projects continued to contribute to improve operational efficiency of the railway through further track renewal and consulting services and to increasing capacity by the provision of rolling stock (in parallel with FAC financing of locomotives). Additionally further financing for the Japoma Bridge was included and funds for the feasibility and engineering studies for a new marshalling yard at Douala were provided. Thus with the assistance of the Bank and other aid organisations, the railway has over the project period continued to increase its operational capacity and to handle a growing volume of traffic, particularly freight (freight tkm increased by 70% between FYs 1972 and 1978). In the future the railway is likely to become increasingly concentrating on long haul traffic partly as a result of improved communications enabling Chad/CAE traffic to feed into the Transcameroonais system but more importantly because construction of a paved highway between Douala and Yaound6 is likely to reduce the railway's role over this section of the system. 1. Second Railway Project Description 1.01 The project, designed to meet the railway's most urgent require- ments through 1976, comprised: (a) the construction of a new Japoma bridge; (b) the completion of the track renewal program on 42 km; (c) the purchase and installation of 50 new single turnouts; (d) the purchase and installation of a radio link between Douala and Ngaoundere and of telecommunication equipment in the Douala area (shunting locomotives); (e) the purchase of 100 flat cars, 25 boxcars, 100 freight-car bogies, a breakdown crane and spare parts for locomotives and rolling stock; (f) the purchase of 4 mainline locomotives and 3 shunting locomotives; and (g) the provision of consulting services. Concurrently the expansion of the Training Center under FAC financing and the construction of a new Douala passenger station under Afdb financing were planned. - 23 - 1.02 The total project cost was estimated at US$23.0 million equivalent with a foreign exchange cost of US$20.7 million equivalent. The Bank loan of US$16.0 million was intended to finance the foreign exchange cost of the construction of the Japoma bridge, the track renewal on 42 km, the procurement and installation of 50 turnouts, the purchase and installation of radio equipment, the purchase of the freight cars, bogies, breakdown crane and spare parts for locomotives and rolling stock, and the consulting services. The construction of the Japoma bridge was to be financed in part by the US$0.87 million remaining funds under the First Railway Project (Loan 687-CM, US$5.2 million, 1970). An amount of US$1.44 million was also included in the loan to cover interest during construction. 1.03 The mainline locomotives and shunters included in the project were financed by CCCE (US$5.29 million including contingencies). Regifercam's contribution amounted to US$2.28 million equivalent for local expenditures. 1.04 The financing plan was as follows: US$ million equivalent Remaining funds of Loan 687-CM 0.87 Loan 1038-CM 14.56 CCCE 5.29 Regifercam 2.28 Subtotal 23.00 Interest during construction (Loan 1038-CM) 1.44 Grand Total 24.44 1.05 The principal objectives of the project were to: (a) improve the operating efficiency of Regifercam; (b) increase the capacity of the railway to meet the most urgent traffic requirements; (c) help the railway to rehabilitate existing installations; and (d) assist the railway management in achieving its main operational and financial targets. 1.06 All Bank-financed items have been procured, installed and put into service. However, the consulting services, consisting of (i) a Management Study designed to assist the railway in improving its operations and management methods and (ii) the Douala-Yaoundg Transport Corridor Study, were transferred to the Third Railway Project (Loan S4-CM). This was necessary because of cost overruns due to currency realignments (13%) and because the construction of the new Japoma bridge, expected to cost about CFAF 1,212 million at appraisal (Second Railway Project), including contingencies, eventually amounted to about CFAF 1,700 million. - 24 - 2. Third Railway Project Description 2.01 Designed to assist Regifercam in preparing feasibility and engineering studies for new traffic-handling facilities to be constructed in the Douala area and in improving its operations and management, the Third Railway Project comprised: (a) a feasibility study for the new Douala station; (b) final engineering of the new Douala station and marshalling yard; and (c) consulting services transferred from the Second Railway Project, namely a Douala-Yaound6 Transport Corridor Study and an operations and management improvement study. 2.02 The total project cost was estimated at US$2.9 million equivalent with a foreign exchange component of US$2.3 million equivalent entirely financed by the Bank. 2.03 The feasibility study for the new Douala station was completed and the draft final report of the consultants was received in June 1977. The final report was received in August 1977. The final engineering for the new Douala station (excluding the passenger station building and its related facilities) was completed in December 1978 fur the main civil works. For the signaling and communication systems, adjustments are still required and are being discussed by the railway and its consultants The Douala-Yaound6 Transport Corridor Study was completed in June 1977. The major part of the management study of the three technical departments (Operations, Mechanical and Permanent Way) was also completed in August 1978. The draft final report of the consultants for this study, dated October 1978, was received recently by the Bank and is being reviewed. 2.04 In April 1978 at Regifercam's request, the description of the project was changed and the Loan Agreement amended to permit the allocation of remaining funds to the following: (a) extension of the management study for the strengthening of the office of the Deputy General Manager for Studies, who is responsible for planning and budgeting, technical, economic and financial studies, statistics and computerization; (b) engineering of the workshop expansion to be included in the proposed Fourth Railway Project now in preparation; and (c) preparation of a training component for the proposed Fourth Railway Project, based on a manpower plan prepared by consultants designed to reduce overstaffing and to ensure a better matching of job requirements and staff qualifications. - 25 - 3. Execution of the Second Railway Project Allocation of Funds from Loan 1038-CM 3.01 (a) Original project (Bank-financed items) The allocation of funds as provided under the project was as follows: Categories US$ million I Track renewal (42 km) 2.80 II 50 turnouts 0.36 III, IV, VI Railway equipment (freight cars, bogies, breakdown crane) and spare parts 7.45 V Japoma Bridge 1.71 VII Radio equipment 0.30 VIII Consulting services 0.69 IX Interest and charges 1.44 X Contingencies 1.25 Total 16.00 (b) Reallocation of funds In March 1976, during the negotiation of Loan S4-CM (Third Railway Project), it was agreed to transfer the consulting services to the Third Railway Project. Regifercam arranged to obtain a supplier's credit to finance the cost overruns due to currency realignments and possible cost increases on the construction of the new Japoma Bridge, which at that time was still expected to cost CFAF 1.2 billion (US$5.5 million equivalent). The final allocation of the funds and actual disbursements are shown below. - 26 - Allocated Categories funds Disbursed I Track renewal 3.24 3.24 II 50 turnouts 0.40 0.39 III, IV, VI Railway equipment 7.22 7.17 V Japoma Bridge 3.23 3.55 VII Radio link 0.28 0.21 VIII Consulting services 0 0 IX Interest and charges 1.44 1.44 X Unallocated 0.19 0 Total 16.00 16.00 Physical Execution of the Project 3.02 The project was executed by Regifercam. The construction of the new Japoma Bridge started in mid-October 1974 after a considerable delay due to major technical difficulties in selecting a suitable site and design for the bridge. During construction, excessive settlement of pier no. 1 under the dead weight of the superstructure was recorded in July-August 1976, due most probably to poor piling procedure and insuffi- cient length of the piles. It was then decided to drive eight additional piles, linked to the pier by a prestressed concrete ring beam; this work was executed between December 1976 and April 1977. Since then, no significant subsidence of pier no. 1 has been recorded. The bridge was eventually tested under load and put into service on January 22, 1979, following the completion of the access embankment on the left bank of the river. This embankment, located in a marshy area, settled during construc- tion by more than 60 cm and the fill collapsed in several spots. This explains the delay between bridge completion in mid-1978 and under-load testing. Regifercam attributed the serious foundation problems encountered on pier no. 1 to poor execution of the piling and lax supervision by the consulting engineer. Consequently, Regifercam refused to pay the additional cost incurred for the reinforcement of this pier, with no objection on the part of the contractor. The cost of the works was re-estimated in August 1979 by Regifercam and, due mainly to the considerable increase on earthwork volume for the left embankment (183%), a cost overrun of CFAF 461 million was forecast at this time. The final cost overrun on this item is estimated at CFAF 486 million. - 27 - 3.03 Delivery of some locomotive spare parts was very late. In the case of the traction motors for shunters, delivery was more than six months late. 3.04 Delivery of the four 4B-3600 mainline locomotives under CCCE financing was slightly behind schedule (September-December 1975). The three new heavy shunters BB900, also financed by CCCE, were delivered between mid-December 1976 and the end of January 1977, with a delay of more than one year. Quality of the track renewal execution 3.05 The works were carried out without properly repairing the subgrade, and there are still numerous spots where the stability of the track is jeopardized by ballast falling into the drainage ditches. This was noted by the mission during the final supervision of the First Project in November 1976 but, at that time, track renewal under the Second Railway Project had been virtually completed. Project Cost 3.06 The total project cost estimated on the basis of available data is shown below with the appraisal forecasts and indication of the source of the fundS. The cost overruns on the construction of the Japoma Bridge (CFAF 486 mi.llion) and the lack of funds due to fluctuations in exchange rates (CFAF 450 million) were compensated by the supplier's credit (CFAF 200 million), the use of the funds allocated to the consulting services transferred to the Third Railway Project (CFAF 247 million), an increase of the contribution of Regifercam (CFAF 384 million) and some reductions on other project items (CFAF 105 million). A detailed comparison of cost estimates in local cost (CFAF) and foreign cost (US$ equivalent) is given in Annex 1. - 28 - Appraisal FRtimated actuial cost Local Foreign Total Bank CCCE Suppliers Regi- Total credit fercam (CFAF million) (a) Japoma bridge (i) Loan 687-CM 202 -- -- 202 (ii) Loan 1038-CM 814 -- -- 1496 Subtotal 1016 682 1698 1/ (b) Track renewal 188 700 888 669 -- -- 206- 875 (c) 50 turnouts 15 90 105 86 -- 161/ 102 (d) Radio link and tele- communications 15 85 100 50 -- -- 131 63 (e) Motive power (CCCE) -- 1323 1323 -- 1323 -- -- 1323 (E) Spares for locomotives -- 95 95 90 -- -- 4 94 (g) Freight cars and bogies -- 1650 1650 1362 -- 200 33 1595 (h) Breakdown crane -- 130 130 134 -- -- -- 134 (i) Consultin services - 48 199 247 -- -- -- -- Total 570 5180 5750 3407 1323 200 9543/ 5884 US$ million equivalent at exchange rate at appraisal (CFAF 250 = $1.00) 2.3 20.7 23.0 US$ million equivalent at average exchange rate during execution of the project (CFAF 220.8 = US$1.00) 2.6 23.4 26.0 15.4 6.0 0.9 4.3 26.6 1/ Estimated. No accurate records of the cost of the works performed by Regifercam on force account. 2/ Transferred to the Third Railway Project (Loan S4-CM). 3/ Including CFAF 258 million of equivalent foreign cost for the construction of the new Japoma bridge. - 29 - 3.07 The actual disbursements were made according to the table below which compares them with the forecasts. IBRD fiscal year and Cumulative disbursements Actual disbursements quarter ending at end of quarter (US$ million) as a percentage of Appraisal Actual appraisal estimate 1974-75 September 30, 1974 1.02 December 31, 1974 4.49 March 31, 1975 5.52 5.61 102 June 30, 1975 9.35 6.65 71 1975-76 September 30, 1975 12.88 8.49 66 December 31, 1975 13.66 10.03 73 March 31, 1976 14.06 10.90 78 June 30, 1976 14.91 11.86 80 1976-77 September 30, 1976 15.29 13.71 90 December 31, 1976 16.00 14.82 93 March 31, 1977 16.00 15.56 97 June 30, 1977 16.00 15.96 99.8 1977-78 September 30, 1977 16.00 16.00 100 Project Progress Reports 3.08 Bank supervision missions visited Cameroon in January 1975, May 1975, November 1975, December 1976, June 1977, November 1977 and June 1978. The missions were provided with all the information necessary for effective project supervision. However, little useful data on project progress and railway operations were communicated to the Bank by Regifercam in the intervals between the missions. Regifercam's management considers that its services are not equipped to provide the information requested by the Bank. Continuous efforts were made to obtain periodic progress reports but with little success, although the Management Study performed under the Third Railway Project was designed to strengthen the offices of the Deputy General Manager for Studies who is responsible for these matters. It was therefore requested that by March 1, 1979, (before the negotiations of the proposed Fourth Railway Project), Regifercam submit proposals for periodic reports on project progress and railway operations on the basis of drafts prepared by the Bank. This request has been complied with and the proposals are being discussed with Regifercam. - 30 - 4. Execution of the Third Railway Project Allocation of Funds from Loan S4-CM (US$ 000) Allocated Appraisal Estimates Paid or Third Railway Reallocation committed Project April 78 1/ by Regifercam Local Foreign Total (cf. table 2) (a) New Douala 35 203 238 135 station feasibility study (b) Consulting Services: 982 1600 - Corridor 226 Study 382 1136 1518 - Management 1444 Study - Training 167 Study (c) Engineering Studies: - New Douala 893 175 961 1136 325 297 Station - Workshop 199 Expansion (d) Unallocated 425 375 TOTAL 2300 592 2300 2892 2300 2468 1/ To permit preparation of the Fourth Railway Project. The total exceeds the funds of Loan S4-CM by US$168,000. This is due to the execution of a training study to prepare the proposed Fourth Railway Project and to the extension of the management study as explained below (para. 4.03). Project Execution Corridor Study 4.01 The contract was awarded to consultants on April 21, 1976 and was executed between April and August 1976. The draft report was - 31 - submitted to Regifercam and the Bank in July 1976. It appeared at this stage that supplementary investigations were necessary: (i) to take into account reductions in traffic forecasts caused by decreased demand for timber due to the slump in world economy; and (ii) to assess the economic justification for substituting a four-lane autoroute for a two-lane paved road, a possibility the Cameroon Government was actively considering at that time. During a co-donors meeting held in Paris in March 1977, dealing with investment programs in the transport corridor Douala-Yaoundg for the road and railway realignment, it was decided to extend this study to cope with ihe new situation. The consultants' final report and the supplementary study were made available in May and June 1977 respectively. These reports, fully supporting the Bank's position vis-a-vis the investments contemplated in the Douala-Yaound6 transport corridor, concluded that: (a) realignment of the Douala-Edea section combined with minor improvements elsewhere was economically acceptable; (b) the Minka-Maloume realignment was marginally acceptable in extension of the ongoing realignment works being executed between Yaoundg and Minka but would not be acceptable in isolation; (c) a heavy-duty road, with a 10 t/axle capacity was an acceptable element of any solution; (d) a four-lane autoroute was economically unjustified in any circumstances at that time; and (e) the implications of realignment for Regifercam's finances will require careful study. The performance of the consultants was good. About 36 man-months were necessary for these studies, including the supplementary works. New Douala Station Feasibility Study 4.02 The contract was awarded on March 16, 1977 to consultants and work started immediately. The draft final report was ready in June 1977 and discussed in the field with the consultants during the supervision mission of June 1977. The final report was received in August 1977 and the design of the marshalling yard was considered generally appropriate but somewhat over-extensive in the light of the new traffic forecasts adopted by the Bank (para. 4.01). Nevertheless, the resulting design contributed effectively to the preparation of the proposed Fourth Railway Project and supported the Bank's restrictive position regarding the design and the size of the passenger building which Regifercam intended to build on the new site. The performance of the consultants was good. The study required about 16 man-months. Management Study 4.03 Aimed at the improvement of railway management and operations, - 32 - this study comprised two separate phases: (i) the preparation of plans of action for the different railway fields of activity including preliminary recommendations; and (ii) the implementation of the agreed plans of action. The contract (85 man-months) was signed on April 28,1976 and the interim reports on the first phase were distributed in July-August 1976. 4.04 After review of these documents by the railway and the Bank, a meeting was held at Douala in December 1976, to decide on the scope of the implementation phase. It was agreed that emphasis would be put on the critical areas where weakness in railway operations and management was evident: (i) the MT Department (Motive Power and Rolling Stock Maintenance); (ii) the Ex Department (Operations); and (iii) the railway's planning and information systems including accounting, costing, tariffs, statistics, investment planning, budgeting and control. The railway was to provide counterparts for the experts to implement the consultants' recommendations after their initial work was completed. The program included short follow-up missions by the experts to supervise this continuation. For the implementation phase, 96 man-months of consulting services were proposed and accepted (Amendment no. 1, April 1977). 4.05 During execution of the contract, it became apparent that the scope of the consulting services should be extended (i) in the MT Department where the preparation and definition of maintenance documents and procedures required completion and the local staff charged with putting them into operation had to be trained; and (ii) in the improvement of planning and information systems where the procedures needed to be fundamentally revised. 4.06 Consequently, Regifercam did the following: (i) awarded a supplementary contract to train the staff in the MT Department under CCCE financing (192 man-months); and (ii) requested the Bank to extend the management study to be financed out of the remaining funds of Loan S4-CM (Amendment no. 2, September 1978, supplement of 77 man-months). 4.07 The Bank had no objection to these two proposals. Continuation of the preparation of maintenance documents and improvement of procedures and training of workshop staff under CCCE financing started on May 6, 1978. The extension of the Management Study is under way and will be continued under the proposed Fourth Railway Project. 4.08 The first phase, dealing with the definition of the plans of action after an analysis of the railway's operations and management, was carried out competently by the consultants. The consultants' performance during the implementation phase was satisfactory in the MT Department, the VB Department (track maintenance) and good in improving planning and information systems, particularly improved accounting and costing systems. The results of the implementation phase were not as successful as expected. In the Operations Department, the actions were limited to the imDrovement of existing methods and Procedures, - 33 - in spite of Bank's recommendations to broaden the scope of the analy- tical work in this field. There were not enough qualified counterparts from the railway, the railway faiied to implement promptly feasible improvements to the facilities recommended by the consultants, and the motive power and rolling stock maintenance facilities were inadequate to permit immediate substantial improvements. It also became clear during implementation that, in most fields, the volume of work to be done by the consultants and their counterparts was much greater than initially expected. Thus, the proposed Fourth Railway Project provides for continuation of the work in all essential areas. Engineering Studies for the New Douala Station and Marshalling Yard 4.09 The engineering studies for the new Douala station and marshalling yard were entrusted to three consulting firms: (a) one for the detailed engineering of the earthworks, drainage, roadworks, fixed installations, service buildings and utility networks; (b) one for the detailed engineering of the road bridge: and (c) one for the engineering of the signalling and public address systems. Because of the specialised nature of the activities, three separate proposals were chosen. These engineering studies have been completed, but some adjustments in the signaling system are still being discussed by the railway and the consultants. 4.10 The tender documents for the main civil works, incorporating amendments recommended by the Bank, have been prepared and bids have been appropriately invited. Public opening is scheduled for May 3, 1979. The performance of the engineering consultants is satisfactory. Training Study 4.11 After review of the railway's training system by the Bank during the supervision mission of November 1977, Regifercam appointed consultants with Bank approval, to design a training component to be included in the proposed Fourth Railway Project. These services were financed under Loan S4-CM. The consultants began work in April 1978 and finished in November 1978. An interim report was completed by the end of May 1978 and was reviewed and discussed during the June 1978 supervision mission. This report was sufficiently detailed to assess the scope of the training element of the proposed Fourth Railway Project. The draft final report was received by the Bank in December 1978, and comments have been forwarded to Regifercam. The consultants started to prepare a manpower plan jointly with a Canadian team financed by CIDA. The manpower plan study will be continued under the proposed Fourth Railway Project. Additionally, consultants will assist Regifercam in implementing agreed recommendations on staff management techniques. The training study required about 22 man-months. The preparation of a final manpower plan to be submitted to the Bank for review by the - 34 - end of 1979 will require about 9 man-months. The implementation of improved personnel management techniques proposed by the consultants and agreed by Regifercam is expected to require 15 man-months of technical assistance. Both of these elements are proposed for retroactive financing under the Fourth Railway Project. The performance of the consultants is very satisfactory and their report has contributed greatly to the preparation of the training component of the proposed project. Workshop Expansion 4.12 The proposed Fourth Railway Project includes the expansion of the main railway workshops in Douala (Bassa), and the construction of motive power and rolling stock maintenance facilities at Yaound6. The preparation of these components required engineering studies based on a master plan prepared by the railway and approved by the Bank after review by an independent consultant hired by the Bank (supervision mission of June 1978). The engineering studies for the workshop expansion were awarded in September 1978 in accordance with Bank guidelines. These studies are under way and are expected to be completed shortly, partly financed under the Third Railway Project with the balance retroactively financed under the Fourth Railway Project. Project Cost 4.13 The table at the beginning of this chapter shows the funds committed by Regifercam for the different contracts awarded under the Third Railway Project (foreign component). No detailed figures of the local costs have been recorded by the railway. The cost per man-month for consulting services is estimated as folbws (foreign expenditures): US$ Feasibility studies 8437 Corridor study (1977 - fixed price) 6277 Management study 8347 Training study 7590 Disbursements 4.14 The loan is not yet fully disbursed, although major contracts were awarded immediately after the signing of the loan. Delays in awarding contracts and in reviewing consultants' proposals are due to the lack of delegation in the decision-making process at Regifercam's top management level. The attention of the borrower has been drawn to this point on several occasions. The appraisal's forecast schedule of disbursements is shown compared with actual disbursements: - 35 - Cumulative disbursements Actual IBRD fiscal year and at end of quarter (US$ 000) vs. Fore- quarter ending Forecast cast (%) at Appraisal Actual 1976-77 September 30, 1976 400 - - December 31, 1976 540 232 43 March 31, 1977 820 330 40 June 30, 1977 1360 432 32 1977-78 September 30, 1977 1920 687 36 December 31, 1977 2090 689 33 March 31, 1978 2220 848 41 June 30, 1978 2300 868 38 1978-79 September 30, 1978 2300 1181 51 December 31, 1978 2300 1263 55 5. Performance of the Projects Second Railway Project 5.01 The performance under the project has been assessed as follows: (a) Track Renewal On the basis of available statistics, the track renewal element of the project resulted in a considerable reduction in the number of breakages. In 1972-73, there were 49 breakages on the sections to be renewed under this project. In the 1977-78 period, after renewal, only 3 breakages were recorded. In addition, the number of derailments attributed to track conditions declined sharply, and only three derailments per year occurred in the two years after renewal of track. The section Yaoundg- Maloume was realigned under financing provided by various co- donors (excluding the Bank) earlier than anticipated in April 1978. This led to the old route, including two sections recently renewed under the project, being abandoned (para. 7.06). Track from the renewed sections is being salvaged and used on other projects. (Details on this subject are attached as Annex 7). (b) Rolling Stock The number of boxcars and flat cars included in the project was adequate to meet the railway's requirements through 1976 in - 36 - accordance with the project's objectives. Details on rolling stock utilization are given in Annex 8. (c) Breakdown Crane Due to the reduction in derailments, use of the breakdown crane purchased under the project was low. However, it is used by the railway for many other purposes (Annex 9). (d) Motive Power An assessment of the productivity of the mainline motive power financed by CCCE is given in Annex 10. The locomotives provided sufficient capacity for the Bank financed freight cars, and in addition some hauling capacity for Regifercam's existing rolling stock. (e) Other Project Components It is not feasible to identify separately the performance of the other components of the project, except for the 100 bogies which made it possible to avoid the loss of 50 freight cars. Third Railway Project 5.02 Comments on the performance of the consultants entrusted with the various studies comprising this project are given above (Section 4). In general, the studies executed have contributed significantly to the preparation of the proposed Fourth Railway Project and some improvements in operations and management have been made. 6. Operations and Maintenance 6.01 The table attached as Annex 11 summarized the railway's traffic and operating statistics from FY1974 through FY1978. The following conclusions can be drawn from these data and from information obtained during supervision missions. Locomotives 6.02 The availability of motive power has improved slightly over the past three years. However, the indices of utilization remain below the plan of action targets, particularly those concerning the average daily mileage to be achieved, as shown below: - 37 - Average daily mileage (km) Class Plan of Action (FY1977) Actual FY1977 FY1978 4B-3600 280 189 184 1/ CC-2400 150 133 179!- BB-1200 300 239 265 RAILCARS 300 171 202 The average mileage of motive power combines both technical availability and the efficiency of the Operations Department in making use of available equipment and this index is therefore more significant than the availability factor above which is subject to various interpretations. The last three months' statistics - the latest available - show a general tendency towards improvement. Freight Cars 6.03 The average load per loaded freight car deteriorated from FY1974 through FY1976 but has recovered since then. However, the turnaround time, which was a rather high 9.3 days in FY1976, has continued to deteriorate, reaching nearly 11 days in FY1978. The average daily mileage per freight car has remained steady at about 54 km per day, which is very low for a railway of more than 1,000 km with long-haul traffic (394 km average). Regifercam has been repeatedly urged to improve its statistics in order to enable the management to determine more accurately where operational weaknesses are but the response has so far been limited. Technical assistance to achieve this objective is included in the proposed Fourth Railway Project. Operations 6.04 Operations are hampered by too many incidents such as derailments on the mainline and in the stations and sidings, rail breakages, locomotive and rolling stock failures and breakdowns which cause erratic trains runs. Although the number of derailments on the mainline has been substantially reduced over the past fiver years, many still occur in the stations and sidings (359 in FY1977, 280 in FY1978 and 100 in the first 140 days of FY1979 or 257 on an annual basis). These figures show an improving trend but are far from satisfactory. The total number of rail breakages recorded in FY1978 was 334 against 307 in FY1977, which indicates that the exponential growth recorded during the period 1970-73 has been stopped. However the available statistics for FY1979 (4.5 months) show a sharp increase on the first 150 km of the Douala-Yaoundg section (118 instances in 4.5 months). 1/ This figure is not significant. There are only 3 locomotives in this class with an average availability of 74% in 1977-78 (55% for the last 3 months). - 38 - The situation described above is not expected to improve substantially before 1980-81 when the 20 new Canadian locomotives will be operational and the track will have been renewed between Douala and Edea (84 km) under the ongoing realignment project, and station attendants and dispatchers will be better trained. In the meantime, the Bank requested that the consultants include in the final report of the Management Study recommendations for controlling rail breakage problems. (About 50% of the rail breakages in 1976-78 occurred on a 50 km section between Edea and Eseka where the track is fairly new - 36 kg rails laid in 1965). Staff Productivity 6.05 On the whole, staff productivity has increased very little over the past five years (cf. Annex 11). It is expected, however, that until implementation of the manpower plan now in preparation, total labor force will remain constant and, if traffic forecasts materialize, staff productivity may reach about 240,000 traffic units per employee (operations and trainees) in 1982 against 163,000 at present. Workshops 6.06 More than 50% of the time spent by locomotives in the maintenance facilities is due to unscheduled repairs which indicates poor preventive maintenance. On the other hand, numerous failures of rolling stock such as axle breakage, loose brake blocks or other parts, lack of clearance at the side friction blocks occur on the line, causing derailments. The ongoing training program undertaken by Regifercam with the assistance of consultants financed by CCCE will take at least two more years before completion. There- fore, this training program combined with the workshop expansion and the training component under the proposed Fourth Railway Project are not expected to produce substantial improvement of this situation before 1980-81. Track Maintenance 6.07 Much remains to be done to improve the quality of track maintenance. Track renewals undertaken under the previous projects have considerably improved the overall condition of the track, as indicated by the reduction in derailments and in the rate of increase in rail breakages, but this improvement will not last if the railway does not pay sufficient attention to track subgrade repairs (erosion, poor drainage, weed control, etc.). Here also staff training, good work programming and permanent supervision are essential. Conclusion 6.08 Observation of Regifercam's performance in operations and maintenance of its track and equipment has led the Bank missions to conclude that strength- ening the management of the three main technical departments is absolutely necessary. Consequently a large technical assistance component has been included in the proposed Fourth Railway Project to assist Regifercam to train its man- agerial staff and to achieve the operational targets of ts future action plan which will be part of the loan agreement of this project. - 39 - 6.09 Comments on the achievement of the operational targets spelled out in the action plan of the Second Railway Project are made in Annex 12. 7. Economic Evaluation A. Second Railway Project Background 7.01 The appraisal report produced a forecast ERR for four project elements-track renewal, flat cars, boxcars and a breakdown crane. The cost saving resulting from purchase of bogies compared with the equivalent number of new wagons was also assessed. The benefit from the Japoma bridge construction was not assessed on the grounds that the railway would virtually cease to exist if it were not built. The benefits from miscellaneous items such as consulting services, turnouts and radio equipment were also not assessed, but their cost was included in the analysis of total project benefits. Traffic 7.02 Annex 3 shows Appraisal Report traffic forecasts, actual volumes recorded up to FY 1978, and revised forecasts from FY 1979 onwards. Timber traffic has not increased as forecast, mainly as a result of a failure of the world market to recover from a sharp slump in FY1975, institutional problems within the Cameroon forestry sector, and in the last year or two a shortage of railway carrying capacity due to the railway's failure to procure additional equipment for the period after 1976/77, not covered by the project. Other traffic has grown more slowly than forecast in tonnage, but close to forecast in ton-kilometers. 7.03 Revised forecasts call for a recovery in timber traffic and continued growth in other traffic until FY1983. A paved road between Douala and Yaound6 is expected to be in operation in FY1984 and consequently railway freight traffic is forecast to decline, recovering to FY1983 levels by FY1987, and continuing to grow slowly thereafter. Analytical Approach 7.04 Actual project costs for the elements subject to ERR analysis were close to appraisal estimates. The approach adopted has therefore been to assess both costs and benefits in 1973 prices, as was done in the appraisal, rather than update both costs and benefits to 1978 or 1979 prices. Appraisal estimates which determined that the main cost elements were damage to locomotives and freight cars when derailed have been reviewed, found reasonable, and retained. For other elements, in particular flat cars and boxcars, where the relative costs of road and rail transport are major - 40 - determinants of benefits, the results of the SOFRERAIL/OCCR Douala-Yaound6 corridor study (1977) were adopted, deflating both sets of costs to take into consideration inflation between 1973 and 1975, the latter being the SOFRERAIL/OCCR base date. The appraisal report employed the results of an earlier (1973) SOFRERAIL/OCCR study to assess benefits. The benefits, in constant 1973 prices, obtained on the basis of the 1977 study are not significantly different from those based on the 1973 study. To assess relative transport costs, road costs were adjusted to exclude debt servicing and overheads, equivalent of which are not included in the rail cost calculations. The assumption has also been that a paved road will be open between Douala and Yaoundg from FY1984 onwards. The benefit from bogie purchase, avoidance of wagon purchase, has been included as a negative cost. Results 7.05 The ERR on project elements and the total project are compared below with appraisal estimates. The reasons for variations are then described. Second Railway Project ERR (%) Project item Track Flat Box- Breakdown Total 1 cars cars crane project - Appraisal Estimate 12 13 19 24 13 Revised Estimate 0 13 13 -4 10 Track 7.06 Track was laid in 1976 and will be salvaged in 1979-80 because the section on which it was laid was realigned and taken out of use in April 1978 (para. 5.01). This track will be used elsewhere in the system. A residual value has therefore been attributed to it in 1978, but although this was higher than expected at appraisal (CFAF 430 million against CFAF 320 juillion forecast for 1981), the operational period was too short to generate benefits sufficient to do more than equal the loss of value of the material (in particular of ballast which cannot readily be re-used economically). In addition benefits from increased capacity included in the original appraisal analysis have not been retained in the re-evaluation since the SOFRERAIL/OCCR report concluded that significant line capacity shortages were unlikely. 1/ Including consulting services, etc. - 41 - Flat Cars 7.07 The ERR is virtually identical with appraisal forecasts of 13%, even though full capacity utilization was not as rapid as expected and productivity is lower than the appraisal assessment. However, the appraisal report assessed benefits on the basis of a comparizan of rail and paved road costs. In fact a paved road will not be in service until FY1984 at the earliest, by which time the proportion of timber produced in the Belabo area and carried by rail, not subject to serious road competition, will have increased by about two-thirds. Thus the benefits resulting from the difference between road and rail transport costs are and will remain higher than forecast. Boxcars 7.08 The revised ERR is 13% compared with 19%. The productivity assumptions at appraisal have not been realized and are unlikely to be. The cost advantage differentials between unpaved and paved road conditions for boxcar traffic assessed by the 1977 SOFRERAIL/OCCR report are greater than those estimated at appraisal, thereby reducing the comparative advantage of rail transport. These two factors account for the decline in the forecast ERR, which at 13% is still satisfactory. Breakdown Crane 7.09 Derailments requiring the use of the breakdown crane have been many fewer than expected, about 20 against 55. The main effect is that benefits from avoidance of line capacity reduction cannot now be realistically attributed to the crane, and since the total quantified benefits are less than total cost, the ERR is nov expected to be negative. However, because ReRifercam now has only two breakdown cranes including that purchased, it follows that if the 80t crane had not been purchased, Regifercam would have been in a vulnerable position in the event of malfunctioning of its 60t crane. Furthermore, other benefits have been identified (Annex 9) but quantification is not possible on the basis of existing information. Total Project 7.10 Despite the lower than expected ERR on track replacement and the (insignificant) breakdown crane element, the project should still yield a satisfactory ERR of over 10%. B. Third Railway Project Background 7.11 The main component of the Third Railway Project was financing of studies for final engineering of the proposed Douala marshalling yard. The appraisal report economic analysis was accordingly limited to a preliminary assessment of the ERR on the marshalling yard project. - 42 - Result 7.12 The appraisal report estimated that the marshalling yard project would yield benefits from wagon productivity improvements, reduced motive power operational costs (resulting from concentration of facilities) and avoidance of the cost of traffic diversion to road which would occur in the absence of an increase in marshalling yard capacity. On the basis of preliminary cost estimates of CFAF 2.7 billion (1975 prices) and traffic in the dominant direction (southbound) forecast to reach 1.2 million tons by 1985/86, the ERR was expected to be 29% (20% on sensitivity analysis). 7.13 The Fourth Railway Project was appraised in July 1978. The revised cost estimate in 1978 prices of the marshalling yard element was CFAF 4.3 billion. The difference in costs of CFAF 1.6 billion was due to two things, (a) inflation, accounting for about 0.9 billion, and (b) the very preliminary data employed at appraisal which lead to underestimating costs. The scope of the works has not changed significantly. The types of benefits are also assessed as at appraisal. However, the traffic now forecast to pass through the marshalling yard is lower than at appraisal due mainly to the installation of marshalling facilities at Douala port, (under the Second Douala Port Project). The scope of these was uncertain at the time of the Third Railway Project appraisal. However, it is now estimated that these facilities will enable about one third of log traffic to pass directly to the port and avoid the main marshalling yard. On the other hand, preliminary assumptions of the improvement in wagon productivity resulting from the facilities have been raised, the reduction in turnaround time now being estimated as three days rather than two days. 7.14 The ERR on the marshalling yard element of the proposed Fourth Railway Project is 25% and on the sensitivity analysis 18%. Neither ERR is significantly below the appraisal ERR of 29 and 20% respectively. 8. Financial Performance 8.01 Regifercam's financial statements for fiscal years 1975 to 1978, comparing appraisal forecasts of the Second and Third Railway Projects with actual figures, are shown in Annexes 4 to 6. Operating revenue developed closely in line with forecasts, with the less-than-expected increase of freight traffic being largely offset by additional tariff increases. FY1978 staff costs, while high, were also very close to forecasts, but other working expenses were substantially above forecasts. This latter excess cost and higher-than-necessary staff costs were essentially due to the lack of efficient cost control and little cost-consciousness of most of Regifercam's managers and its board of directors which seems to accept with little criticism management's explanations for cost overruns in executing the operating budget. 8.02 Bank supervision missions have consistently brought to Regifercam's attention the need for more cost-effective management, but this has had little effect in an environment where cost overruns do not constitute a major threat to management. Only in the wake of rapidly increasing operating costs during FY1978 has management shown greater concern about costs. Regifercam agreed, - 43 - therefore, in the context of the proposed Fourth Railway Project to: (a) implement a manpower plan, prepared in draft form by consultants ORT (Switzerland), aimed at keeping total staff numbers virtually constant through FY1983; and (b) introduce promptly, assisted by Bank-financed consultants (SOFRERAIL, France), a budget control system for all operating expenses giving a monthly comparison of actual versus budgeted expenses per type of expense and department and establishing rules for dealing with budget overruns. 8.03 Assisted by tariff increases implemented under the auspices of the Third Railway Project, Regifercam's financial situation improved significantly from FY1976 to FY1977, but did not improve further there- after, due to excessive increases in operating costs. The FY1978 working ratio was thus substantially above the target ratio of the Third Railway Project, 84% versus 72%. Future improvement of Regifercam's financial ratios must, more than in the past, rely on improved cost effectiveness, since the potential for tariff increases is limited by present and expected road competition and since the pressure on management to improve cost control should not be alleviated through the ease of obtaining massive tariff increases. 8.04 Cash generation obviously remained below forecast levels, and as the debt service grew as expected, the debt service coverage ratio never exceeded 1.0, leaving no room for self-financing of capital investment and additions to working capital. The current and liquid ratios remained unsatisfactory and bank overdrafts and Government subsi- dization of operations became a current feature. With the exception of these bank overdrafts, Regifercam's balance sheets developed essentially as forecast. Details on Regifercam's compliance with individual covenants are contained in Annex 13. 8.05 In summary, the two projects were instrumental in stopping the deterioration of Regifercam's finances and bringing about some improvement, albeit mostly through tariff increases, but not to the degree expected at appraisal. Funds, available under the Third Project, were used adequately to deal with the emerging problem of weak cost control by financing consultants to devise cost control systems and a manpower plan. Because of the difficulties expected in implementing these new tools, measurable progress may not be apparent for some time to come. 9. The Bank and the Borrower Performance of the Bank 9.01 The Bank has in general identified in time the critical areas where the railway might encounter capacity constraints or where it showed particular weaknesses, and the two projects have been well designed to cope with the identified needs. The Second Railway Project gave relatively - 44 - little attention to training as there was already in existence a training scheme under bilateral aid (FAC-OFERMAT). The need for a major input in training was not obvious at that time and was only later identified. 9.02 The Bank consistently insisted on the importance of tariff increases and operational improvements, and its interventions were quite successful with regard to tariff increases. The difficulties in achieving operational improvements may have been underestimated by both the Bank and the railway, but even a more realistic appreciation of these diffi- culties would probably not have changed the scope of the projects and their impact on the railway, since the technical assistance provided by the projects already stretched to the limits Regifercam's capacity to absorb this assistance, as evidenced by the railway's inability to provide qualified counterparts. 9.03 The two project elements for which the economic benefits were significantly less than expected were track renewal and the breakdown crane. The lower ERR on track renewal resulted from appraisal estimates of the time during which the relaid track would remain in use not being fulfilled. This in turn was partly due to weaknesses in the Bank's relationship with the borrower and the complexities of determining upon realignment timing (see paras. 9.05-9.09). As for the breakdown crane, benefits did not meet expectations because (a) line capacity exceeded expectations and (b) traffic grew less rapidly than anticipated. The co-incidence of these two factors, neither of which was readily predictable at appraisal, caused the significant deviation between appraisal and revised forecasts of the ERR. 9.04 The Bank's supervision of the projects was in general adequate and missions of sufficient frequency and duration were undertaken to deal satisfactorily with matters relating to physical project implemen- tation, financial and economic issues. The allocated time was, however, not always sufficient to deal in depth with operational problems and measures to alleviate them. This is true in particular where consultants' performance was less than good despite the high reputation of the firm, which resulted in more analytical work being done by Bank staff. To overcome this problem of consultants failing to meet expectations which may not be unique to Cameroon railways, the time allocated to engineers for project supervision would need to be substantially increased. Relations with the Borrower 9.05 In assessing the strength and weaknesses in the relationship between the Bank and the Borrower, two crucial factors have to be taken into account: (a) The Borrower (Regifercam) is not responsible in the final analysis for decisions. The responsibility regarding line construction lies with the Government, while the Office du Chemin de Fer Transcamerounais (OCFT), which was set up by the presidency to undertake responsibility for the construction of the Transcamerounais system be- tween Yaounde and Ngaoundere, implements the decisions;1/ 1/ See also comments by the Office du Chemin de Fer Transcamerounais (Attachment A). - 45 - (b) The optimum timing of the continuation of the Transcamerounais westwards by realignment of the Yaound6-Douala line was very sensitive to assumptions regarding the growth of traffic and the factors determining line capacity. 9.06 The divided authority between Regifercam and OCFT meant in effect that while the Bank was lending to one agency, Regifercam, critical decisions on investment were also being made by OCFT and the Government. This was reflected in the Loan Agreement Covenant which states (Section 5.07 (a) "the Borrower shall not carry out,or cause to be carried out,or incur any debt in respect of,the realignment of the Douala to Yaoundg main-line unless the Guarantor after consultation with the Bank shall have confirmed to the Bank that the Guarantor is satisfied that such works are economically and technically sound". This covenant clearly lacked strength and did not permit the Bank to exert effective control over the timing of realignment. 9.07 The second aspect has a bearing in particular upon the decision to finance track relaying between Yaoundg and Otele. The consultant's study on realignment concluded that line capacity on critical sections would not be reached until the early 1980's and the Bank concluded that the relaid track would be in operation for about four or five years. However, Regifercam traffic grew quite rapidly to 1973/4 as a result of a boom in timber exports. This together with the prospective availability of machinery for track laying upon completion of the Yaoundg-Ngaoundere section coupled with disagreement between Regifercam and their consultants with respect to line saturation criteria persuaded several co-donors to agree to finance Transcamerounais' construction from Yaound6 to Otele. The Bank pointed out that the ERR at about 8% was unsatisfactory, but the counterargument was produced that financing was on concessionary terms and the financial costs were thus low. 9.08 At that stage, the decision to finance track relaying could have been reconsidered. However, ordering of track material was already in hand and as a matter of practicality the main question was whether the track should be immediately laid on the old alignment, or reserved for realignment use. Regifercam pressed strongly for its immediate use, arguing that alleviation of rail breakages and the resultant service interruptions was an urgent problem which could not await realignment for its solution. Track laying commenced in the second quarter of 1975. 9.09 We conclude therefore that with the benefit of hindsight, it might have been anticipated that there would be strong pressure to continue realignment as soon as the Yaoundg-Ngaoundere line was complete, that the Bank would be unable to exert much control over events and therefore the duration and thus the extent of benefits from track relaying were very uncertain. However, once the track was ordered the choice was between usefully employing the rails on the existing alignment .or utilizing them under Regifercams normal replacement program over a period of two to three years. The alternative of employing them on the realigned section was not available as Canadian financing of those rails had already been secured. Employing the Bank financed rails on the existing Yaound6-0tele section seemed, a priori, the best solution, although a - 46 - detailed economic analysis was not carried out. It is clear that track relaying did reduce the number of rail breakages and the psychological effects on Regifercam's customers from reduced service interruptions though unquantifiable were certainly beneficial. Critical Steps in Realignment/Track relaying Date ----Realignment------------ ---------Relaying-------------- Jan 74 OCCR/SOFRERAIL Study - Final Report received Jan 74 Rail, etc. bid documents to Bank May 74 Rail II negotiations June 74 Rail II Board Presentation June 74 Rail II Rail bids received July 3, 74 Bank accepted bids July 74 Co-donor meeting - expression cf interest by several parti- cipants in financing Yaoundg- Otele realignment. Bank takes pcsition realignment not Sept 74 justified Regifercam strongly expressed wish to use rails on existing Yaoundf-Otele track - Bank agreed Jan 75 Invitation to review bid documents - Yaound6-Otele (first formal notification of decision to realign) May 75 Rail relaying commenced Nov 76 Rail relaying finished April 78 Realigned Yaoundg-Otele opened Preparation of Completion Report 9.10 The substance of this report has been discussed with Regifercam who have fully cooperated in its production. PROJECT COMPLETION REPORT CAMEROON: SECOND RAILWAY PROJECT (LOAN 1038-CM) Actual and Appraisal Estimates of Project Costs Actual cost I/ Appraisal estimate of cost l/ Actual cost Major works or components Local 2/ Foreign Total Local Foreign Total a proportion % imple- CFAF US$ US$ million CFAF US$ US$ million mented estimate of million million equivalent million million equivalent e o cost (% 1. Japoma bridge 424 5.77 7.69 304 3.63 4.85 159 100 2. Track renewal 206 3.03 3.96 188 2.80 3.55 112 100 - 3. 50 turnouts 16 0.39 0.46 15 0.36 0.42 110 100 4. Radio equipment 13 0.23 0.29 15 0.34 0.40 73 100 5. Motive power (CCCE) - 5.99 5.99 - 5.29 5.29 113 100 6. Spare parts for locomotives 4 0.41 0.43 - 0.38 0.38 113 100 7. Freight car bogies 33 7.07 7.22 - 6.60 6.60 109 100 S. Breakdown crane - 0.61 0.61 - 0.52 0.52 117 100 9. Consulting services - - - 48 0.80 0.99 0 0 Total 696 23.50 26.65 570 20.72 23.00 116 1/ Using an exchange rate of US$1 = CFAF 220.8 for actual costs and US$1 CFAF 250 for appraisal estimate of costs. 2/ Excluding CFAF 258 million, the estimated foreign component of the additional contribution made by the borrower to finance the cost overrun on the construction of the Japoma bridge. Actual local costs are estimated. No accurate records for these costs are available. 3/ Transferred to S4-CM (Third Railway Project). PROJECT COMPLETION REPORT CAMEROON: THIRD RAILWAY PROJECT (LOAN S4-CM) Actual and Appraisal Estimates of Project Costs Actual cost 1/ Appraisal estimate of cost 1/ Actual cost as a Major works or component Local i/ Foreign Total Local Foreign Total proportion of appraisal CFAF US$(000) US$(000) CFAF US$(000) US$(000) estimate of cost (%) 31 million equivalent million equivalent 1. Feasibility study 8 135 169 8 203 238 71 2. Geotechnical and engineering study 28 496 620 39 961 1,136 55 4- 00 3. Consulting services 103 1,837 2,296 86 1,136 1,518 151 Total 139 2,468 3,085 133 2,300 2,892 107 1/ Using an exchange rate of US$1=CFAF 220 for actual costs and US$1=CFAF 225 for appraisal estimate of costs. 2/ Estimated. No accurate records are available. 3/ Major changes on the scope of the studies were made during project execution. REGIFERCAM FREIGHT TRAFFIC Total Freight Timber Other Traffic Appraisal Actual and Appraisal Actual and Appraisal Actual and Revised 19791/ Revised 1979.' Revised 19791/ Revised 1979- Tons Tkm Tons Tkm Tons Tkm Tons Tkm Tons Tkm Tons Tkm (000) (m) (000) (M) (000) (M) (000) (M) (000) (M) (000) (M) 1972/73 1101-2/ 339 1101 326 282 98 298 98 819 241 803 228 1973/74 1198 383 1261 405 345 121 393 143 853 262 868 262 1974/75 1418 492 1168 400 480 179 210 68 938 313 958 332 1975/76 1577 574 1286 438 580 232 318 119 997 342 968 319 1976/77 1733 644 1300 479 691 277 388 133 1042 367 962 346 1977/78 1807 683 1359 555 734 299 326 125 1073 384 1033 430 1 1978/79 2013 775 1395 594 847 354 330 131 1166 421 1065 463 1979/80 2324 931 1520 634 1002 426 366 150 1322 505 1154 484 1980/81 1699 708 406 174 1293 534 1981/82 1836 796 460 200 1376 596 1982/83 1978 935 520 259 1458 676 1983/84 1875 887 546 272 1329 615 1984/85 1933 904 558 275 1375 629 1985/86 1975 934 570 286 1405 648 1986/87 2113 1016 610 318 1503 698 1987/88 2200 1073 539 346 1561 727 1988/87 2302 1150 686 375 1616 775 1/ Figures through 1977/78 are actual. 2/ Actual. -50 - ANNEX 4 REGIPERCAM Income Accounts Actuals (A), and Appraisal Forecasts Second (F2) and Third (F3) Railway Projects (CFAF million) Fiscal years ending June 30 1975 1976 1977 1978 A F2 A F2 F3 A F2 F3 A F2 F3 Operating Revenue Passengers 1047 903 1229 1028 1099 1374 1101 1152 1386 1194 1225 Freight 3904 4676 4774 6168 4368 6067 7737 4897 7960 8939 5925 Miscellaneous 388 470 438 485 400 434 500 410 700 515 420 Rate increases (F3 only) - - - - 452 - - 1363 - - 2733 Total Operating Revenue 5339 6049 6441 7681 6319 7875 9338 7822 10046 10648 10303 Operating Expenses Staff costs 2497 2500 2777 3020 2900 3121 3770 3300 3912 4060 3900 Other costs 2221 2307 2924 2810 2600 3462 3293 3010 4521 3777 3600 Total Working Expenses 4718 4807 5701 5830 5500 6583 7063 6310 8433 7837 7500 Cash generated from 621 1242 740 1851 819 1292 2275 1512 1613 2811 2803 operations Depreciation 1151 1206 1358 1311 1308 1458 1409 1518 1733 1450 1798 Total Operating Expenses 5869 6013 7059 7141 6808 8041 8472 7828 10166 9287 9298 Net operating revenue (530) 36 (618) 540 (489) (166) 866 (6) (120) 1361 1005 Interest charges 394 440 383 653 579 739 828 758 988 888 1022 Subsidies from Government 1182 - 732 - 643 1245 - 224 1553 - - Adjustments 201 - - - - - - - - Net Surplus (loss) 57 (404) (269) (113) (425) 340 38 (540) 445 473 (17) Working ratio (%) 88 79 89 76 87 84 76 81 84 74 73 Operating ratio (%) 110 99 110 93 108 102 91 100 101 87 90 Times interest earned - 0.lx - 0.8x - - 1.Ox - - 1.7x L.Ox Debt service 836 768 866 1036 962 1260 1306 1236 1857 1664 1798 Debt service coverage 0.7x 1.6x 0.9x 1.8x O.9x 1.Ox 1.7x 1.2x 0.9x 1.7x 1.6x Net fixed assets in use 34023 35719 35226 37892 38222 36820 39091 44166 38709 40102 50913 Rate of return (%) (1.6) 0.1 (1.8) 1.4 (1.3) (0.5) 2.2 0 (0.3) 3.9 2.0 Targets Working ratio 81 72 Rate of return 1 2.5 3.5 February 1979 - 51 - ANNEX 5 REGIFERCAM Balance Sheets Actuals (A) and Appraisal Forecasts Second Railway Project (F2) (CFAF million) Fiscal Year ending June 30 1975 1976 1977 1978 A F2 A F2 A F2 A F2 ASSETS Current Assets Cash 371 250 274 302 258 377 370 611 Receivables 974 910 1,177 1,150 1,239 1,410 1,173 1,600 Stores 1,159 1 1 1,750 220 2,3 2,5 Sub-total Current Assets 2,504 2,600 2,879 3,202 3,517 3,827 4,275 4,561 minus Current Liabilities Payables 777 1,390 890 1,690 1,278 1,980 1,455 2,270 Loan terms 397 - 509 - 831 - 1,416 - Bank overdraft 972 425 l5 380 1,597 193 1,361 - Sub-total Current Liabilities 2,146 1,815 2,984 2,070 3,706 2,173 4,232 2,270 NET WORKING CAPITAL 358 785 (105) 1,132 (189) 1,654 43 2,291 INVESTMENTS 66 66 67 66 20 66 22 66 Fixed Assets In use 44,304 47,644 48,375 51,153 50,108 52,761 54,272 53,371 minus Depreciation 10,489 10,851 11,739 12,162 13,105 13,571 13,858 15,021 Net fixed assets in use 33,815 36,793 36,636 38,991 37,003 39,190 40,414 38,350 Work in progress 3,383 1100 1,99 1,300 2, 2,000 2_687 2,800 Total net fixed assets 37,198 37,893 38,628 40,291 39,030 41,190 43,101 41,150 TOTAL ASSETS 37,622 38,744 3 4 3 42,9 4 ___ LIABILITIES Long-term debt 13,999 14,358 15,137 17,216 15,066 18,599 19,147 18,723 Equity 23,623 24,386 23,453 24,273 23,795 24,311 24,019 24 784 TOTAL LIABILITIES 37,622 38,744 38,590 412489 38,861 42,910 43,166 43,507 RATIOS Current assets/Current liabilities 1.2 1.4 1.0 1.5 0.9 1.8 1.0 2.0 Liquid assets/Current liabilities 0.6 0.6 0.5 0.7 0.4 0.8 0.4 1.0 Debt to equity 37/63 37/63 39/61 41/59 39/61 43/57 44/56 43/57 REGIFERCAM Sources and _Applications of Funds Actuals (A), and Appraisal Forecasts Second (F2) and Third (F3) Railway Projects (CFAF million) Fiscal years ending June 30 1975 1976 1977 1978 A F2 A F2 F3 A F2 F3 A F2 F3 I. Sources Internal Cash Generation 621 1242 740 1851 819 1292 2275 1512 1613 2811 2803 Long-term Borrowing 2777 2806 1621 3241 2150 450 1861 2970 4950 900 4035 Equity Investment 619 118 102 - 2900 40 - 6000 - - 4000 Government Subsidies 1182 - 732 - 643 1245 - 224 1553 - - Decrease in Working Capital - - 463 - - 84 - - - Total Sources 5199 4166 3658 5092 6512 3111 4136 10706 8116 3711 10838 1 II. Applications Capital Investment 4164 3354 2792 3709 5050 1851 2308 8970 6027 1410 8540 Debt Service 836 768 866 1036 962 1260 1306 1236 1857 1664 1798 Increase in Working Capital 199 44 - 347 500 - 522 500 232 637 500 Total Applications 5199 4166 3658 5092 6512 3111 4136 10706 8116 3711 10838 P.M.: Cash at End of Year (601) (175) (1311) (78) (1339) 184 (991) 611 (including bank overdraft) February 1979 - 53 - ANNEX 7 Page 1 RAIL BREAKAGES AND DERAILMENTS AVOIDED BY TRACK RENEWAL Rail Breakages 1. No reliable detailed statistics on rail breakages on the Douala- Yaoundg section are available for the years preceding 1976. From FY1977, Regifercam's statistics indicate that more than 90% of the total number of rail breakages occurred where the track has not been renewed within the past eight years. In 1970-71, about 143 km of track between Douala and Yaound6 was still equipped with material more than 43 years old. Due to creepage, these rails can be expected to have become highly stressed particularly in curves, and consequently very vulnerable to breakage. It can be assumed that, between FY1971 and FY1973, more than 90% of the instances occured on the old track. The table below shows the estimated progression of the annual number of rail breakages (N), with the frequency per km. Average length FY of old track N (total) N (90%) Frequency in service per km 1971 143 44 40 0.28 1972 126 89 80 0.63 1973 92 120 108 1.17 The average annual progression is therefore about 2.04 or an increase of 104% per year. 2. The annual numbers of rail breakages which presumably occurred on the sections renewed under the Second Railway Project (42 km) were: FY N 1971 12 1972 27 1973 49 For the following years, assuming a more conservative figure for the progression of rail breakages, as determined from Regifercam's statistics for the period 1971-76 for the sections of the Douala-Yaoundg stretch where the track had not been renewed within the eight preceding years (40% annual increase), the numbers of rail breakages on the sections covered by the Second Railway Project would have been: -54 - ANNEX 7 Page 2 Number Number actually Avoidance without recorded after of rail FY renewal project completion breakages 1974 68 1975 96 - 1976 134 - 67 (50%) 1977 188 1 187 1978 (10 months) 220 2 218 Total 472 3. Conclusion. By renewal of 42 km of track under the Second Railway Project, more than 470 rail breakages were most probably avoided between com- pletion of the project and the end of April 1978, when the realigned section Maloume-Yaounde opened. Derailments 4. There has been a considerable decrease in the number of derailments on the Douala-Yaounde section since the period 1971-72 when 105 derailments per year were recorded. This is due mostly to the renewal of the track on 156 km (more than 50% of the stretch Douala-Yaounde), under the First and Second Railway Project (55 and 42 km respectively) and by Regifercam on its own budgets (59 km). In the period 1976-78, 34 derailments per year were recorded on this section and most of these derailments can be attributed to equipment failures or poor loading of the cars (85%). Between July 1976 and the end of June 1978, only three derailments attributed to track condition were recorded on the sections renewed under the First Railway Project and the Second Railway Project. During the same period, on the Second Railway Project section, six derailments occurred and only one is attributed to track condi- tion. Assuming that half of the derailments attributed to other causes were also partly due to track condition, we can estimate that three derail- ments per year occurred on the Second Railway Project section having as one of their causes the condition of the track, against about 27 per year as forecast at appraisal. Therefore, a reduction of 89% of the derailments due to track condition is the result of the renewal of the track under the Second Railway Project. Realignment of the Maloume-Yaounde Section 5. At the end of April 1978 the realigned section Maloume-Yaounde was put into service. The track laid down under the Second Railway Project on the old route will be salvaged. The residual value of the track material is estimated at about CFAF 480 million in 1978 prices. -55 - ANNEX 8 Page 1 FREIGHT CAR UTILIZATION A. Flat Cars (Timber Traffic) Total Capacity of the Fleet 1. The total capacity in tons of the flat cars used for timber traffic is shown below with an indication of the total ton-kilometers achieved or, for FY1979, forecast. FY Capacity (tons) Traffic (tkm millions) 1975 18,140 78 1976 25,150 119 1977 25,130 133 1978 22,830 126 1979 22,830 183 1/ 1/ Budget. Theoretical Productivity (tkm millions) 2. The theoretical productivity of the fleet, on the basis of the average daily mileage recorded and the actual average load per flat car (21 tons per 2-bogie flat car and 55 tons per 4-bogie flat car), is shown below "with" and "without" project. The excess or lack of transport capacity is also indicated in terms of tkm. FY Theoretical productivity Traffic Excess (Lack) "With" "Without" "With" "Without" (tkm million) 1975 - 78 68 - 10 1976 144 91 119 25 (28) 1977 152 96 133 19 (37) 1978 137 82 126 11 (44) 1979 137 82 183 (46) (101) These results are shown in the attached graph. - 56 - ANNEX 8 Page 2 Assuming that no flat cars are written off in the meantime and that the 150 new Canadian flat cars are put into service early in 1980, the comparison of the theoretical transport capacity (tkm) of the fleet with Bank's traffic forecasts is shown below: FY Traffic Transport capacity Excess forecasts Existing New Canadian Total (Lack) fleet flat cars (tkm millions) 1980 183 137 40 177 (6) 1981 213 137 81 218 5 1982 298 137 81 218 (80) 1983 326 137 81 218 (108) This indicates that: (a) the 102 flat cars purchased under the Second Railway Project will be fully utilized from FY1979 on, at their yearly normal transport capacity (55 million tkm for about 144,000 tons); and (b) Regifercam will need to improve drastically its operations and most probably purchase about 150 additional flat cars to be put into service in 1981-82. B. Boxcars Total Capacity of the Fleet 3. The total capacity of the existing boxcars at the end of each fiscal year, in tons, is indicated below, with the estimated tonnages 1/ actually transported by boxcars and the average theoretical transport capacity provided by the boxcars in the fleet. 1/ Tonnages are taken as reference here, instead of tkm, because the average distance indicated in Regifercam's statistics includes all traffics. CDC j ~ J C ~i11 ii 1 l D, v. jti I -i ý f f F I * - 4- '74/'S 2 -6 / '4 7/7 7 -58 - ANNEX 8 Page 4 FY Total Estimated tonnage Average Excess capacity actually theoretical (lack) (tons) transported transport of capacity by boxcars capacity 1/ (000 tons) (000 tons) (000 tons) 1975 15,820 456 452 (4) 1976 16,560 480 467 (13) 1977 16,560 492 507 15 1978 16,115 501 470 (31) 1979 (forecast) 22,515 596 550 2 (46) 1/ With turnaround times and average payload per freight car as recorded or,for FY1979, forecast. 2/ Includes 160 boxcars financed by CCCE and gradually put into service from September 1978 on. (See attached graph.) These figures show that: (a) the theoretical capacity is close to the estimated tonnage actually transported by boxcars. The discrepancies are of the order of magnitude of the errors of the assessment based on elementary statistics; (b) there is however a tendency to a lack of capacity; (c) diverted or frustrated traffic probably occurred from FY1978 on; (d) the boxcars purchased under the Second Railway Project are fully utilized and their number was probably below that needed to meet traffic demands as already indicated in the Completion Report of the First Railway Project (Loan 687-CH). The 25 boxcars of the Second Railway Project have a productivity of about 10,300,000 tkm per year for 19,000 tons. CAHEA0oN山5どのNムRらルりAy P40）どcで ―排：: - 60 - ANNEX 9 Page 1 BREAKDOWN CRANE Derailments 1. Based on Regifercam's statistics, the number of derailments recorded since July 1976 are shown in the table below: FY1977 FY1978 FY1979 Mainline Douala-Yaounde 37 33 42 (108) Yaounde-Ngaoundere 10 6 8 (21) Western line 5 4 3 (8) Total, mainline 52 43 _ 3 _137) Stations and sidings 361 248 106 (272) Among these, the derailments with more than one vehicle (freight car or locomotive) involved were: FY1977 FY1978 FY1979 l/ Mainline Douala-Yaounde 10 5 16 (41) Yaounde-Ngaoundere 4 3 1 (3) Western line 2 1 1 (3) Total 16 9 T 8 (W-T) The derailments involving one locomotive only were: FY1977 FY1978 FY1979 Mainline Douala-Yaounde 9 10 6 (15) Yaounde-Ngaoundere 0 1 3 (8) Western line 1 3 1 (3) Total 10 14 YOU (26) l/ Figures recorded for 142 days. The figures between brackets are extrapolations for 365 days. - 61 - ANNEX 9 Page 2 Utilization of the Breakdown Crane for Derailments 2. The derailments in the stations and sidings (65% in the Douala area) affected only one freight car or one shunter each. In the great majority of the cases, derailments involving only one freight car do not necessitate the intervention of a breakdown crane. Re-railing of a mainline locomotive requires a breakdown crane in about 50% of the cases. The number of cases for which the 80-ton breakdown crane was required can be assessed as follows: FY1977 FY1978 FY1979 (forecast) Mainline Douala-Yaounde 15 10 49 Yaounde-Ngaoundere 4 4 6 Western line 2 2 4 Total 21 16 59 The forecast figures quoted for FY1979 indicate a sharp increase in the number of occurrences of derailment due mainly to equipment failures or bad loading of freight cars (85% of the cases) and should not be taken into consideration, since remedial actions can certainly be taken to lower this rate of incidence. Therefore, 20 cases per year which necessitate the inter- vention of the breakdown crane should be considered normal, with an average distance of 210 km between Yaounde, where the 80-ton breakdown crane is based, and the site of the derailment. Breakdown Cranes Owned by the Railway 3. Two other 30-ton railway cranes purchased in 1954 are obsolete, have been written off and are no longer in operation because spare parts are no longer available. Presently, Regifercam owns two breakdown cranes of a capacity of 60 and 80 tons respectively, the latter having been purchased under the Second Railway Project. Other Utilizations 4. The breakdown cranes are not used solely for derailments. Numerous other interventions are performed by this lifting equipment such as: correction of freight car loadings displaced during the haul along the line, mainly logs, with a frequency estimated at 80 cases per year; loading and unloading of heavy or out-of-gauge loads (10 cases per year); replacement of damaged bogies on the line (50 cases per year); and exceptional maintenance operations on weighing bridges and railway bridges. -62 - ANNEX 9 Page 3 Conclusion 5. The actual utilization figures of the breakdown cranes for re-railings of derailed motive power and rolling stock are certainly under the figures estimated at appraisal. On the other hand, the interventions of the breakdown cranes for other purposes are much more frequent and their annual number undoubtedly justifies the breakdown crane purchased under the Second Railway Project. It is not possible, however, to assess the benefits of such utilization. - 63 - ANNEX 10 UTILIZATION OF LOCOMOTIVES 1. The four 4B-3600 locomotives purchased under the project with CCCE financing have an annual mileage of about 67,000 km per locomotive in the fleet. This represents, with a utilization factor of 75% of the available hauling capacity, an annual productivity per locomotive of 67,000 x 1,100 x 0.75 = 55,275,000 gross ton-kilometers The hauled rolling stock purchased under the project necessitates a hauling capacity per year calculated as follows: G.T. = N x D x 365 x L with G.T. = gross ton-kilometers N = number of vehicles in the fleet D = average daily mileage per vehicle 365 = number of days L = average gross load per freight car For the flat cars, assuming a return trip empty: 55 + 30 + 0 + 30 G.T. = 102 x 54.3 x 365 x 2 116.24 million gross ton-kilometers or about 55.6 million net ton-kilometers or 141,600 tons of logs. For the boxcars, assuming an average load of 20 tons per boxcar: G.T. = 25 x 56.5 x 365 x (20 + 15) = 18.04 million gross ton-kilometers or about 10.3 million net ton-kilometers or about 19,000 tons of up/down general cargo traffic. The number of locomotives needed to haul the freight cars of the Second Railway Project can therefore be estimated at: 116.24 + 18.04 55.3 2.43 locomotives The remainder, equivalent to 1.57 locomotives, was devoted to other traffic, presumably timber, with a productivity of 55.3 x 1.57 = 86.83 million gross ton-kilometers This represents 55 x 86.83 = 41.5 million net ton-kilometers of timber or about 115 105,700 tons of logs. 2. This calculation takes into account the actual operational parameters as obtained from Regifercam's most recent statistics. - 64 - ANNEX 11 CAMEROON SECOND AND THIRD RAILWAY PROJECTS PROJECT COMPLETION REPORT SELECTED OPERATING STATISTICS, FYs 1974-78 FY1974 FY1975 FY1976 FY1977 FY1978 System Total route (km) (as of June 30) 1,170 1,170 1,170 1,170 1,153 Total staff 4,316 4,473 5,009 5,219 5,306 Operations staff 3,953 4,151 4,286 4,483 4,651 Others 363 322 723 736 655 Traffic Actual Forecast Actual Forecast Actual Forecast Actual Forecast Actual Forecast Passenger, total (million) 1.69 1.78 1.97 1.81 1.86 1.78 1.73 1.77 1.50 1.80 Passenger-km, total (million) 199.7 211 281.6 223 260.8 229 257.4 235 224.2 241 Average journey (km) 118 118 143 123 140 129 149 134 150 135 Net paying tons (million) 1.3 1.2 1.2 1.4 1.3 1.6 1.4 1.7 1.3 1.8 Net paying ton-km (million) 406.5 383 400.2 492 437.3 574 486.2 694 533.8 683 Average haul (km) 321 322 342 350 341 362 348 373 393.9 386 Total gross ton-km (million) 1,069 N.A. 1,035 N.A. 1,155 N.A. 1,170 N.A. 1,267 N.A. Loaded freight car-km (million) 23.3 N.A. 26.7 N.A. 32.0 N.A. 33.6 N.A. 33.3 N.A. Empty freight car-km (million) Traffic Density Actual Actual Actual Actual Actual Passenger-km/route-km (000) 171.2 241.3 223.5 220.6 192.1 Freight-net ton-km/route-km (000) 348.3 344.0 375.5 417.3 453.0 Operations Train-km, passengers (million) 1.8 2.1 2.1 1.9 1.9 Train-km, freight (million) 1.3 1.2 1.2 1.3 1.4 Train-km, total (million) 3.1 3.3 3.3 3.2 3.3 Locomotive-km, diesel (million) 2.8 2.8 2.9 2.9 2.9 Operating Efficiency Gross ton-km/train-km, freight 578 500 602 565 569 Net ton-km/train-km, freight 328 255 309 286 306 Car turnaround time (days) 11.7 11.1 9.3 9.5 10.8 Average speed (km/hour) N.A. N.A. N.A. N.A. N.A. Traffic units per employee (000) 140.5 152.4 139.4 142.5 142.9 Availability 4B-3600 65 51 69 71 72 Diesel locomotives (%) CC-2400 48 58 54 57 74 BB-1200 80 69 74 71 74 Freight cars (%) 95 94 94 92 91 Passenger cars (%) 93 84 85 86 88 Source: Railway statistics, amended,when appropriate, by the mission. - 65 - ANNEX 12 Page 1 COMPLETION REPORT CAMEROON SECOND AND THIRD RAILWAY PROJECTS ACHIEVEMENT OF THE TARGETS OF THE ACTION PLAN 1. The following table indicates the comparison between the targets agreed upon at appraisal and the actual recorded figures for the respective indices. Item Actual figures Targets FY74 FY75 FY76 FY77 FY78 FY74 FY75 FY76 FY77 Availability of motive power (%) 4B-3600 65 51 69 71 72 83 83 85 88 CC-2400 48 58 54 57 74 53 55 58 60 B-12S' 30 <, 74 71 74 75 80 P5 88 Pailcars V, 31 41 40 4r 70 75 80 85 Utilization of freight cars (%) Flat cars 95 93 93 88 88 88 88 88 88 Boxcars 95 92 93 94 93 90 90 90 91 Gondolas 93 93 95 93 83 90 91 91 91 Average daily mileage of motive power (kin) 48-3600 182 177 143 189 184 280 280 280 280 CC-2400 117 107 152 133 179 130 135 140 150 BB-1200 222 281 264 239 265 250 270 290 300 Railcars 203 185 191 171 202 240 260 280 300 Average load of freight cars (tons) 1/ 22 21(60)2/ Flat cars 21 21 21(60) 2 Boxcars 29.2 26.0 21.5 23.7 25.5 23.8 23.8 23.8 24.1 Gondolas 23 24 24 25 Average daily mileage of freight cars (kin) Flat cars 54.3 42.1 51.8 54.9 54.3 40 45 52 55 Boxcars 41.6 52.2 61.4 54.9 56.5 40 42 45 48 Gondolas 25.1 38.0 31.7 31.1 34.6 22 25 27 29 Productivity of freight cars (000 km per year) 3/ Flat cars 220 245 290 320 Boxcars N.A. N.A. N.A. N.A. N.A. 200 230 290 270 Gondolas 96 107 118 130 Productivity of staff qtaff in operations (a) Total 3953 4151 4286 4483 4651 4229 4929 5450 5896 (b) Total excl. trainees 3845 4039 4163 4376 4557 4107 4797 5308 5717 (c) Traffic units(million)4/ 606.2 681.8 698.1 743.6 758.0 594 715 803 879 (d) Traffic units per employee (000) 5/ 158 169 168 170 166 145 149 151 154 (e) Traffic units per employee (total staff- operations) 6/ 153 164 163 166 163 1/ Detailed actual figures not available. 2/ New 4-bogie timber cars (actual 55 tons). 3/ Separate productivity statistics are not recorded by the railway for each category of freight cars. 4/ Traffic units = ton-km + passenger-km. 5/ (d) - (c)/(b) 6/ (e) = (c)/(a) - 66 - ANNEX12 Page 2 2. Comments Availability and Average Daily Mileage of Motive Power 2.1 The actual figures are recorded regardless of the number of locomotives which are unserviceable for long periods of time as a result of an accident (e.g. collision, fire, etc.). The figures are based on the total number of the locomotives of each class which the railway owns. Therefore, the actual figures do not reflect the efficiency of locomotive maintenance and utilization. Based on the numbers of locomotives which could be utilized for operations, eliminating the units awaiting repairs due to accidents, the Bank supervision mission of November 1977 found the following results for the availability factors in 1976-77, as compared with statistical results: Class Number of Average number Availability(%) Action Plan(%) locomotives of serviceable Actual Recorded in the fleet locomotives 4B-3600 9 7.6 81.5 71 88 CC-2400 5 4.0 74.0 57 60 BB-1200 12 10.0 81.6 71 88 Railcars 11 6.0 74.1 40 85 These figures indicate that the recorded figures should be accompanied by the total fleet numbers and average numbers of locomotives actually in service in each class during the period under review. This would permit a more precise assessment of the efficiency of maintenance and utilization of serviceable locomotives. Average Daily Mileage of Freight Cars 2.2 The targets of the plan of action were set too low. An average figure on the order of 80 to 90 km per day would be normal. The figures recorded indicate that much remains to be done to improve freight car management. This can be achieved by closely monitoring the turnaround time and the detention time in the main facilities for each category of freight cars. Staff 2.3 Total staff numbers did not grow as forecast, and productivity was better than expected although it is still on the low side. Here too targets were set too low for productivity and too high for staff numbers. - 67 - ANNEX 13 Page 1 COMPLIANCE WITH COVENANTS A. Loan 1038-CM: Loan Agreement Section 5.01 (Adequate financial records): Complied. Section 5.02 (Audit): Borrower did not comply due to the Government's and borrower's insistence on using Government-appointed "Commissaires aux Comptes." Borrower agreed to submit to the Bank, before negotiations of the proposed Fourth Railway Project, a contract with auditors acceptable to the Bank for the FY1978 audit. Section 5.03 (Negative pledge): Complied. Section 5.04 (Revaluation of rolling equipment): Partly complied, i.e. carried out for most passenger equipment and underway for remaining rolling equipment. Results will not be reflected in balance sheets, due to objection by Ministry of Finance. Section 5.05 (Costing): Complied in substance: Costing system instituted in FY1976; consultants financed under third project are working on improvement of system to achieve fully satisfactory costing by line and commodity. Improved system, now being implemented, is well designed. Annual tariff adjustments are being made with a view to the cost of services. Sections 5.06 and 5.07 (Investment limitation): Complied. Government consulted Bank on realignment of sections Yaounde-Maloume and Douala-Edea and advised the Bank verbally that it was satisfied that the proposed works were economically and technically sound. Bank concurred with Government regarding realignment Douala-Edea and expressed some reservations regarding economic justification of realignment Yaounde-Maloume, since rate of return was below 10% but above financial cost of project. Section 5.08 (Debt limitation): Complied. Section 5.09 (Working cash): Complied. Section 5.10 (Financial targets): Not complied; for reasons see chapter 8, main report; appraisal rate of return target for FY1977 and later was superseded by working ratio targets in supplemental letter No. 1 to loan agreement S4-CM. Section 5.11 (Reduction of receivables): Complied, but with delay: 16% in FY1977, 12% in FY1978. B. Loan 1038-CM: Guarantee Agreement Section 3.02 (Assistance to borrower to comply with financial targets): Complied. Section 3.03 (Maintenance of technical assistance): Complied. Section 3.04 (Road-rail competition): Complied. Section 3.05 (Consultation on Douala-Yaounde realignment): Complied. - 68 - ANNEX 13 Page 2 Section 3.06 (Radio frequencies): Complied. C. Loan S4-CM: Loan Agreement Section 4.02 (Annual review of financial position): Complied. Supplemental letter No. 1 (working ratio targets): Not complied; for reasons see chapter 8, main report. D. Loan S4-CM: Guarantee Agreement Section 3.02 (Annual review of borrower's financial performance): Complied. Section 3.03 (Port railway facilities): Complied. CAMEROON RAILWAYS TRACK CHARACTERISTICS, MAIN LINE kine 1Number of Ballast km1 Rail kg Sleepers Sleepers Welding (liters) per km Douala-Ngaoundere 0-95 30 Steel 1750 Co)ntinuous 500 Km 913 95-103.7 30 1750 700 103.7--149.3 36 Concrete RS 1357 700 149.3-174 36 Concrete SL 1357 700 174-206 36 Steel 1500 700 206-293 36 Wood 1714 1200-900 Ngaoundal 293-477 30 Steel 1500 900 Km 781 477-710 30 Wood 1500 42m long rail 900 710-913 30 Steel 1500 Continuous 700 710 Douala-Nkongsamba - Mbitom 0- -11 30 Steel 1500 Velded 500 Km 689 0-115 30 1500 500 115-153 20 1500 N ot Welded 500 153-160 26 1500 500 Belabo Mbanga-Kumbo Km 584 0-29 27.8 Steel 1500 40m rail 700 47 I I I1 .1477 1/ Kilometers adjusted following opening to traffic of the realigned section Maloume-Yaounde (km 206-km 291). Nanga-Eboko Km 460 Nkongsamba Km 160 Mbandjock Km 389 NNiohe Km 115 Obala LEGEND Rails Sleepers Kumba 293 Km 327.5 1 30 kg standard Steel Km 29 Mbanga Km 0 2 20 kg German Steel 65 Ngoumou Yaounde Km 255 Km 291 3 27.8 kg German Steel Edea Malourne 4 26 kg French Steel Km 84 KM206 5 36 kq standard Concrete Km Km 31 6 36 kg standard Steel 11 DualaOtele 11 Douala Km 104 Eseka Km 249 7 36 kg standard Wood Km 0 Km 174 8 30 kg standard Wood World Bank - 19765  _____ -- ~i .. ..._____________ ___IBRD 14058(PPA) - r - - 1i W - 1''f- 1 -I L_ [ - FOUPiTH P R AW ' PRuJEC --l , Is -- - - --- l %-- -., -. -I--;- --. •• . ,,"'''r.- - • l u-- .- - i N N Na0 ilP t 1N r.2<a i