Senegal - Second Railway Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3589 PROJECT PERFORMANCE AUDIT REPORT SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE) August 24, 1981 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE TABLE OF CONTENTS Page No. Preface ....................................................... i Basic Data Sheet ............................................. ii Highlights .................................................... iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. INTRODUCTION ......................... ....1......1 II. THE PROJECT ........................... ...1......1 III. PROJECT IMPLEMENTATION .......................... 2 IV. POINTS OF SPECIAL INTEREST ... ................. 4 V. CONCLUSIONS .......................... ....8......8 ATTACHMENT: PROJECT COMPLETION REPORT I. Introduction ............................ ....... 11 II. Project Preparation and Appraisal ...... ......... 12 III. Implementation .................................. 12 IV. Traffic and Operations .......................... 17 V. Financial Performance ........................... 21 VI. Economic Evaluation ............................. 25 VII. Role of the Bank ................................ 27 VIII. Conclusion ....................................... 29 Annexes 1 - 2 Tables 3 - 6 Maps This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT PERFORMANCE AUDIT REPORT SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE) PREFACE This report presents a performance audit of the Second Railway Project in Senegal for which Loan 835-SE and Credit 314-SE for US$6.4 million and US$3.2 million equivalent respectively were made in June 1972 and final disbursements in March 1980. The report consists of a Project Performance Audit Memorandum prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by the West Africa Regional Office. No separate PCR mission was undertaken by the Region but the Region has had continued contact with the Senegal Railways through supervision of the follow- on project. Senegal Railways provided statistical information for the PCR. The memorandum is based on the PCR and discussions by OED staff with Bank staff familiar with the project; the transcript of the Executive Directors' meeting of June 15, 1972, which considered the project, has been read and project files and documents have been reviewed. OED staff did not visit the project nor did it solicit the comments of the co-financing agencies who together covered about 10% of project costs. The audit memorandum agrees with the PCR on most points and only amplifies on some aspects which have not been fully covered in the PCR or are of importance in a broader context, such as the economic importance of the railway, the redesign of the project and the problem of low locomotive availability. The draft report was sent to the Borrower for comments in the normal course; however, none were received.  - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE) KEY PROJECT DATA Item Appraisal Estimate Actual Total Project Cost (US$ million) 12.31/a 11.89.- Underrun (%) - 3 Appraisal cost of items implemented (US$ million)/a 10.80 11.89 Overrun (%) - 10 Loan/Credit Amount (US$ million) 6.4/3.2 6.4/3.2 Disbursed )- 9.6 Cancelled ) January 31, 1981 - None Repaid ) 0.6 Borrower's Obligation ) 9. zLc Date Original Components Completed 06/75 06/78 Proportion Completed by Original Completion Date (%)/d 100 37 Proportion of Time Overrun (%)/d 100 Economic Rate of Return (%) 18 13 Financial Rate of Return M% 2 Negative Cumulative Estimated and Actual Disbursements (US$ Millions) FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 (i) Estimated 1.77 7.88 9.60 9.60 9.60 9.60 9.60 9.60 9.60 (ii) Actual - 1.99 4.74 7.00 8.60 9.20 9.43 9.43 9.60 % of (ii) to (i) - 25 49 72 89 95 98 98 100 OTHER PROJECT DATA Item Original Plan Actual First Mention in Files or Timetable 1971 Government's Application 1971 Negotiations 05/--/72 Board Approval 06/--/72 06/--/72 Loan Agreement Date 06/--/72 06/23/72 Effectiveness Date 10/--/72 12/29/72 Closing Date 06/30/76 12/31/79 Borrower Credit: Government of Senegal Loan: Senegal Railways (CFS) Executing Agency Senegal Railways (CFS) Fiscal Year of Senegal July 1 - June 30 Follow-on Project Third Railway Project Loan No. 1581-SE for US$11.00 million Agreement dated March 17, 1978 /a Of which US$1.32 million was from co-financing. /b Of which US$1.49 million was from co-financing. c Includes US$0.85 for exchange adjustments. 7 c For original components completed. - iii - MISSION DATA/a Month/ No. of No. of Man- Date of Item Year Weeks Persons weeks Report Pre-appraisal 02/03/71 2 3 3L 04/13/71 Appraisal 09/71 3 3 9 05/31/72 Subtotal 5 12 Supervision I 04/73 2 3 6 03/30/73 04/23/73 08/13/73 Supervision II 10/73 1 3 3 06/22/73 Supervision III 01/74 0.5 1 0.5 03/05/74 09/11/74 Supervison IV 08/74 1 3 3 10/18/74 Supervision V 02/75 2 3 6 07/03/75 Supervision VI 10/75 3 3 9 12/05/75 Supervision VII 05/76 1.5 5 7.5 09/13/76 Supervision VIII 02/77/c 2 3 6 Supervision IX 10/77 1 3 3 10/28/77 Supervision X 07/78L.. 1 3 3 04/30/79 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) CFAF Appraisal Year Average 1971-72 275 Intervening Years Average 1972-73 255 1973-74 220 1974-75 235 1975-76 220 1976-77 240 1977-78 230 1978-79 220 Completion Year 1979-80 210 /a Mission data in files are incomplete. /b Some team members stayed less than two weeks. /c These two missions were also for appraisal of Third Railway Project. - iv - PROJECT PERFORMANCE AUDIT REPORT SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE) HIGHLIGHTS The purpose of the project was to avert deterioration of the railway and to improve the carrying capacity and level of service provided. About two thirds of the project funds were to be spent on track rehabilitation and the rest on workshop improvements, modernization of freight cars, technical assis- tance and six new locomotives. The latter were to be financed from bilateral sources. About two years after Loan/Credit signature the project was signif- icantly changed. Some 80% of the track renewal work was eliminated even though most of the materials had been procured. This reduction took place primarily to include in the project items judged to be very urgent and not previously covered, namely, locomotive spare parts and equipment and spares required for track works and operations. Other project items were largely implemented as planned. The project also helped stimulate closer cooperation between the Senegal and Mali railways and prepared the way for a structural study under the Senegal Third Railway Project to recommend alternatives for reorganization of the Senegal railways leading to better ways to handle international traffic. The project's aims were only partially achieved. Deterioration of the railway was not fully arrested, but without the investment and the mostly intensive supervision efforts by the Bank Group the railway's carry- ing capacity would have decreased sharply. The financial targets of the project were not met, while the reestimated economic return is 13% against 18% estimated in the appraisal. The following points are of special interest: - even though for many years the railway has been essential for Mali's international traffic, increased competition from other transit routes brings the economic viability of large long-term investments for the international line in question. It may therefore be fortunate that investments for track improvements under the project were sharply reduced (paras. 15-19 and 29); - inclusion in the appraisal report of data on track conditions, such as maximum speed and the number of speed restrictions, would have made it possible to monitor progress under the project (para. 7);  - v - - about half of the original project objectives were not imple- mented, while part of the funds were spent on items which were not included in the original project. These changes were of a major character and might have been avoided with better preparation (paras. 20-23); - uneconomic lines were not closed but the Government compensated the railway for the losses as agreed in a Credit covenant (para. 13, PCR para. 5.9); - poor operating performance of the railway was mostly caused by low locomotives availability due to inadequate maintenance, a shortage of spare parts and locomotives which were not fully suitable for local conditions (paras. 24-27); and - in order to obtain locomotives which are best adapted to local operating and maintenance conditions the Bank Group may have to be prepared to finance locomotives more frequently (para. 13).  PROJECT PERFORMANCE AUDIT MEMORANDUM SENEGAL SECOND RAILWAY PROJECT (LOAN 835-SE/CREDIT 314-SE) I. INTRODUCTION 1. Originally the Senegal railway was part of the railway system which connected Dakar with Bamako in Mali and included a number of branch lines. In 1960 the system was split into the Malian Railwaysl/ and the Senegal Railways.2/ The system of Senegal Railways covers 1,034 route km, only 70 km of which are double tracked. It has about 35 mainline loco- motives, 950 freight cars, 100 passenger cars and 11 rail cars with 28 trailers. In addition there are some 170 privately owned freight cars. 2. The role of the railway is primarily to transport freight, which can be divided into three distinct groups. Of the 320 million ton-km trans- ported in 1979, almost half consisted of bulk phosphate traffic from two mines located close to Dakar, whence it is exported. International traffic to and from Mali made up just over 40% of the railway's total freight movement in 1979. The remaining 10% of the freight traffic was local Senegalese cargo (other than phosphates), a quarter of this having been groundnut traf- fic. Passenger traffic consisted of 138 million passenger-km; about 80% was national traffic, mostly concentrated on a small portion of the system in the western part of the country, and some 20% was international traffic to and from Mali. 3. The Bank Group has been involved with Senegal Railways since 1964, when it prepared and appraised the first railway project which aimed at rehabilitation and renewal of the railway. The credit for the project, however, was not approved until 1966. During implementation the scope of the first project was slightly reduced due to a shortage of local funds, and the project required about three years more to complete than originally estimated.2/ II. THE PROJECT 4. As in the first project, the objects of the Second Railway Project in Senegal were twofold: (i) to avert deterioration of the railway and (ii) to improve the carrying capacity and the level of service provided. 1/ Chemin de Fer Malien. 2/ Regie des Chemins de Fer de Senegal. 3/ PPAR, Senegal First Railway Project (Credit 96-SE) Report No. SecM77-504. - 2 - The project as approved by the Board consisted of: Project Amount Loan/Credit Amount (US$ million) Track renewal (175 km) 7.97 6.84 Workshop rehabilitation and equipment 1.63 1.40 Motive power (6 diesel locomotives) 1.32 - Modernization of 350 freight cars 0.21 0.19 Technical Assistance and Training 0.53 0.53 Unallocated 0.65 0.64 Total: 12.31 9.60 The project was to be financed by a World Bank loan (52%), and IDA credit (26%); a French suppliers credit and the Fond d'Aide et de Cooperation (11%); and local resources (11%). The Bank loan and IDA credit were to finance all foreign exchange costs other than the locomotives, which were financed from the French sources, and 74% of the local cost. 5. The various agreements reached with the Government and Senegal Railways at the time of loan/credit negotiation included a commitment to engage consultants for studies on railway operations, workshop improvements and transport coordination. Other agreements included the allocation of groundnut traffic between road and rail; the reduction of personnel costs in proportion to total working expenses; modifications of tariffs; studies on low traffic density branch lines; and operational and financial targets (PCR Annex 1). III. PROJECT IMPLEMENTATION 6. The project has made a valuable contribution, by helping to prevent rapid deterioration of the railway. Without the project and the frequent Bank supervision missions, the available transport capacity of the railway would have declined, resulting in higher transport costs and possibly reduced phos- phate exports for Senegal, and for Mali a much higher transport cost for its international trade (see paras. 15-19). 7. Unfortunately the second major aim of the project, the improvement in the railway's performance, has not been achieved. In virtually all cases where targets were quantified, performance stagnated or deteriorated compared to the appraisal year. Only the average load per freight car (other than phosphate and service traffic) increased and, towards the end of the project period, locomotive km per day per locomotive in service also improved. No easily verifiable targets were set for the track improvement and, even though some track renewal and emergency repairs were carried out, it is not clear whether the overall operating conditions on the section which was to be renewed have improved or deteriorated. Where track works are often reduced in scope, as was the case here, or the quality is less than expected, a good monitoring system appears desirable. This could have been achieved if it would have been the practice at the time to include in the appraisal report some basic data on maximum speed and number of speed restrictions on the existing track and the anticipated values of these data after rehabilitation of the track. 8. The less than satisfactory results of the project mentioned above were in spite of the fact that funds spent on each category of the project increased, except for track renewal which in monetary terms decreased by 25%. The quantity of track materials procured was somewhat reduced (rails to 150 km and sleepers and fastenings to meet requirements for 125 km); but because of a shortage of funds only 41 km of track was relaid against the procurement and relaying target of 175 km in the loan agreement. The track component under the Loan/Credit, however, was revised to cover the purchase of equipment for the sleeper factory and some other equipment and spare parts for track works, for a total estimated value of some US$1.0 million equivalent (PCR Table 3.3a). Another significant change was in the planned workshop rehabilitation, but the description in the appraisal report was too general to identify the magnitude of the revision in the plans (PCR Table 3.3b). How- ever, the six new locomotives were procured as intended and the modernization of 350 freight cars was implemented as planned. 9. Several other project changes were made by adding spare parts for locomotives and operations equipment such as weigh bridges, forklift trucks and telecommunictions equipment. At the time these items were considered to be most urgent in order to maintain a reasonable level of operations. The project changes are further discussed in paras. 20-23. 10. Consultants' services were engaged as planned, but some of the work was not completed due to a shortage of data and funds and late assign- ments of counterparts. The PCR (para. 3.11) is not clear on how useful the operating study has been. The workshop studies apparently made a valuable contribution (PCR para. 3.12-3.13). The transport coordination study led to the strengthening of the Ministry of Transport's Studies Division, but the main recommendation, the creation of a National Commission for Transport to deal with transport policy including intermodal coordination, was not imple- mented (PCR para. 3.16). 11. The final cost of the project is about 3% below the appraisal estimate. However, the cost increase over the items actually implemented is at least 10%, as a result of inflation and currency reallignments and low appraisal estimates for track relaying work. The project was completed about 3.5 years behind schedule. The main causes for the delays were inadequate project preparation, project changes, procurement difficulties and some technical problems (PCR para. 3.09 and Annex 2). 12. Traffic developments were disappointing. During the first three years of the project freight traffic (ton-km) grew and was close to the forecast but then it declined and in the last three years it was close to the 1971 volume. The main reason for the decline, according to the PCR, was low locomotive availability (PCR paras. 4.1-4.5). Improvements in the allocation of groundnut traffic between road and rail were not achieved. Passenger traffic (pass.-km) declined by 47% from 1971 - 1979 while in the appraisal it was expected to increase by about 10% during that period. The reduction in traffic was mostly due to increased road competition and poor service provided by the railway (PCR para. 4.6). 13. The financial targets of the project have not been met. The ap- praisal for the second project forecast working and operating ratios for 1976 of 71 and 91 respectively but the 1979 figures were 104 and 115. These ratios were similar to those of 1966 when the Association financed the first project. The main reasons for the poor financial performance were lower than expected traffic, delays in increasing tariffs, and a general lack of efficiency including very high personnel costs. The Government paid a subsidy to com- pensate for losses on uneconomic lines as agreed under the Loan and Credit agreements. 14. The reestimated economic evaluation in the PCR for some of the project items is a rather broad approximation which was made necessary by the fact that the appraisal report did not provide details, while a complete economic reevaluation would have been too time consuming. The PCR found a reestimated economic return on the workshop modernization and locomotive spare parts of 18% and 16% respectively. The track renewal component was only marginally justified with a return of about 10%. The weighted economic return for the above components is 13%. IV. POINTS OF SPECIAL INTEREST The economic importance of the railway 15. Both the first and the second railway projects have been difficult and absorbed a large amount of Bank Group staff time. The question arises whether for a small railway which per year carries less than two million tons of freight and about one million passengers, the investments and technical assistance efforts were justified. A much more comprehensive review than can be done within the time constraints of this audit would be required to fully analyze this problem but some aspects are covered below. 16. In the mid-sixties when the Bank Group became involved with Senegal Railways the railway transported phosphates, other national freight traffic, international freight traffic to Mali, national passenger traffic and a small number of international passengers. Over the years passenger traffic and national freight, other than phosphates, have sharply decreased in importance. The railway however, remains the obvious mode of transport for phosphate bulk - 5 - traffic even under its present degree of efficiency. The part of the system used for phosphate traffic is only some 100 km . 17. The international role of the railway may be seen as a separate issue. Since the late sixties the volume of this traffic has stagnated at 200 - 250,000 tons per year. In 1974 the traffic reached 300,000 tons but this was the result of the exceptional need to transport drought relief supplies. Some 600 km of the system in Senegal serve international traffic almost exclu- sively and this is where investments in the form of track renewal are most urgent. 18. In 1966 the railway was essential to Mali since the alternative transport routes through other countries were either closed or excessively expensive, due to poor road conditions. This situation, however, is changing. Road and railway improvements along the route to Abidjan, which is being used for Mali's international traffic, are gradually reducing transport costs. Furthermore, if ongoing negotiations for bilateral financing are successfully completed, a paved road through Senegal parallel to the railway is expected to be completed up to the border of Mali by the second half of this decade. 19. Recent studies show that, for Mali's international traffic, the Dakar-Bamako railway is still the cheapest form of transport. However, not all traffic is making use of this facility, and transit traffic which uses the route to Abidjan has increased from 31% in 1965 to 53% in 1977. This situation is partially the result of the Malian Government's wish to diversify its access routes, but is mainly caused by the poor service of Senegal Rail- ways. Where additional improvements of transit routes which compete with Senegal Railways are underway and will lead to further cost reductions, competition with the railway route through Dakar will increase and shippers may further diversify their access routes to Mali, which could negatively affect the traffic on the railway. As a result, it is questionable whether any large long term investment such as complete track renewal for the interna- tional railway line would be economically viable if no major new transport flows are generated. In view of the above, it may prove to be fortunate that the track rehabilitation program under the project was curtailed and served more as an emergency repair activity. Project design 20. About two years after loan/credit signature, the project was rede- signed. It appears that the project revisions resulted from an accurate reassessment of the immediate requirements of the railway. It is not clear, however, why the appraisal and early supervision missions did not recognize the problems earlier, since there is no indication of a sudden change in the railway's development. Apparently, these problems were also not recognized by the railway and its technical assistance staff. - 6 - 21. As a result of the project redesign, the loan/credit allocations were modified. Funds for consultants and workshop rehabilitation were in- creased by 13% and 15%, respectively, and funds for track renewal reduced by 19%. Several new project items which were not included in the original project description were added. These were equipment for track laying and spares (about US$1.0 million); spare parts for locomotives (US$1.1 million); and equipment for operations and stores (US$0.1 million). 22. In terms of the original aims of the project, the change was also quite significant. In the project as presented to the Board, two thirds of the total funds were to be used to rehabilitate 175 km of track, covering almost 20% of Senegal's railway system. Under the revised project, this was reduced to 28 km, or only 16% of the original program (ultimately 41 km were completed PCR Table 3.3a). Shortages of railway funds contributed to the need for a reduction in the relaying target, but a more important reason was the lower amount of loan/credit funds available for this purpose. Most track materials had already been bought (the audit was unable to establish what use was made of these materials beyond renewing the above 41 km) and the remaining funds were to be used for the relaying work, but these were then reduced by US$1.3 million through reallocation to other categories and by a further US$1 million which was used for additional track equipment. Furthermore, costs of track relaying per km in 1974 were estimated to be 3.5 times the appraisal estimates. 23. With a quarter of the loan/credit funds diverted to items which were not covered under the project description in the loan/credit agreement and about half its original scope eliminated, the project had substantially changed. The Board was informed of these changes through the semi-monthly report dated November 14, 1974 which stated the following: "$6.4 Million Loan (Ln. 835) and $3.2 Million Development Credit (Cr. 314) (Second Railway), both of June 23, 1972: The Credit Agreement was amended as of November 8, 1974: (1) to increase by $1,140,000 the amount allocated to spare parts for motive power and rolling stock, by $210,000 the amount allocated to workshop reha- bilitation and equipment, and by $70,000 the amount allocated to consultant services and training; (ii) to establish a new Category, equipment for operations and stores ($100,000); and (iii) to reduce by $1,290,000 the amount allocated to track renewal and by $230,000 the amount in the unallocated category. These changes requested by Government will allow the Senegal railway to rehabilitate its motive power and rolling stock and increase capacity to meet existing demand." The audit does not question the wisdom of the changes, since a rehabilitated track without functioning locomotives to run on it is clearly a worse situa- tion than having functioning locomotives which have to move cautiously along a dilapidated track. However, the changes introduced were of a major character and the audit believes, a does to PCR, that better project preparation might have avoided the need for such changes. -7- Locomotive availability 24. According to the PCR the main reason for the poor traffic perfor- mance of the railway was low locomotive availability. The availability targets set in the appraisal report were unrealistically high; this was recognized in the appraisal of the third railway project which substantially reduced the expectations. Actual availability was low,ranging between 50% and 56% in the years 1972-1976, and thereafter declined to 45% - 49% (PCR paras. 4.7-4.10). 25. Accidents due to poor track conditions and low staff discipline contributed to the low availability. The age of the locomotive fleet was also a factor, even though this seems to be somewhat overstated in the PCR since, at the time of appraisal of the project, only 13 of the 31 locomotives were older than 16 years, with another four close to that age. All of the older locomotives were low powered and mostly suitable for passenger traffic. Six new locomotives were acquired in 1973 and another three in 1977. 26. The unsatisfactory performance of the workshop was another problem. Project revision in 1974 aimed at remedying this situation. It appears, however, that this might have been assessed sooner as the Bank had already assisted the railway for about eight years. The lack of spare parts was also a major reason for the low locomotive availability, a problem which plagues many railways in developing countries. Almost invariably, as was the case here, a principal cause for this insufficiency is that suppliers credits and bilateral aid are available to finance new locomotives but rarely for the spare parts for existing locomotives. This has sometimes led to substantial demands on Bank Group funds for spare parts. When Bank Group projects include new locomotives covered by the above forms of financing, it may be desirable that more strenuous efforts be made to include under the suppliers credits and bilateral financing, a larger supply of spare parts for the new locomotives as well as spare parts for older locomotives if they are of the same make. 27. Another major reason for poor locomotive performance stems from the unsuitability of the locomotives in use, which in turn is due to procurement primarily on the basis of the financing considerations. Because financing is frequently available for locomotives from bilateral sources, the Bank Group in its role of financier of last resort usually abstains from financing locomo- tives if other sources of financing are available. This has often led to procurement of locomotives which were not wholly suitable for local condi- tions. The locomotives which were procured (not financed by the Bank Group and against its opinion since they were new models which had not been proven after a sufficiently long period of service) under the first project in Senegal illustrate this problem. Performance of these locomotives has been poor. The difficulties appear to arise mostly from a design which is too delicate for the rugged operating conditions and irregular maintenance in Senegal. These locomotives will be scrapped in 1981 after only 14 years in service during which their availability has been low. Locomotives of the same model were acquired by Cameroon Railways (but not as part of a Bank project) and were to be scrapped in 1981 after only about 13 years service. - 8- The adequacy of technical assistance 28. Part of the poor performance of the railway can be ascribed to weaknesses of the technical assistance. Both procurement of locomotives and technical assistance required to assist in the daily operations of the railway were financed from bilateral sources. However, unlike the locomotives, the technical assistance did not form part of the project, despite its importance, and it seems to have been taken for granted at the time of appraisal. Only in 1974 did the Bank group recognize the weaknesses of the technical assistance and insisted on revisions in its organization and work program (PCR paras. 3.17 - 3.19). In view of the essential role of the assistance, the Bank group's actions seem fully justified but might have been taken sooner. V. CONCLUSIONS 29. In spite of the problems encountered during implementation, the project has made a useful contribution in enabling the railway to continue providing transport services which, at least for phosphate bulk transport and international traffic to and from Mali, were cheaper than the alternative forms of transport. However, in the medium term the future of international transport merits special study, since it appears that, unless substantial new transport flows would use the international line, large investments may not be justified. 30. The changes in the project, when it was redefined after two years, appear to have been useful. However, the information provided to the Board did not give the reasons for the changes. Considering the magnitude of the project revisions, they could have been avoided or mitigated by initially better project preparation. 31. Where the success of railway projects has often been restrained by poor locomotive performance, the Bank Group may in future, before financing such projects, want to obtain assurances that locomotives to be procured by the railways as part of the project will be the most suitable for local operating and maintenance conditions. If this cannot be guaranteed under bilateral financing, the Bank Group should be prepared to include the locomo- tives under its own financing for the project, to avoid jeopardizing the success of the entire investment program. It also appears desirable that the Bank Group consider better ways to avoid shortages of spares, which now often contribute to low locomotive availability. Several earlier audits have also commented on the above difficulties.!' 1/ PPAR - Mali Second Railways (Credit 384-MLI) - SecM78-921. PPAR - Burma Third Railway (Credit 414-BA) - SecM79-488. -9- 32. Better project preparation and more active supervision by the Bank Group in the early years of the project could, at least in part, have avoided the need for an extensive reformulation of both the planned investments and the technical assistance. After the initial period of the project, supervi- sion was frequent and proved very useful.  - 11 - ATTACHMENT PROJECT COMPLETION REPORT SENEGAL SECOND RAILWAY PROJECT (Loan 835-SE/Credit 314-SE) 1. Introduction 1.1 The Government of Senegal and the Regie des Chemins de Fer du Senegal (CFS) asked the Bank Group in 1971 to finance a project designed to continue the rehabilitation of CFS facilities and equipment initiated under the First Project and to improve its management, operations and finances. The project, which comprised track rehabilitation works, rolling stock,. motive power, workshop rehabilitation, technical services and training of the railway's staff was to serve as a transitional investment plan between the Third Plan (FYs 1970-73), which could not be fully implemented due to lack of funds, and the Fourth Plan (FYs 1974-77). On May 31, 1972, IDA approved a credit for US$3.2 million and the Bank a loan for US$6.4 million to cover the major part of the project's foreign exchange require- ments and 74% of its local cost requirements. 1.2 A first lending operation with the Republic of Senegal for rail- way improvements (Credit 96-SE, US$9.0 million) was approved on September 29, 1966; the project had not been completed when the Second Project was appraised. The results of the First Project were disappointing as CFS performance in physical terms improved more slowly than anticipated and project implementation was nearly three years behind schedule. Due to a sharp decrease in groundnut traffic and unexpected economic stagnation in Mali and Senegal, traffic was lower than anticipated and the financial targets were not met. The Audit Report noted that although the project was carried out as originally planned (except for a long six-year delay in the track program), CFS was plagued by financial problems. Notwithstand- ing, the Association's decision to help rehabilitate the Senegal railway was correct; without the project, the very existence of the railway would have been threatened, with resulting adverse effects on transport to neigh- boring Mali and eastern Senegal. The Credit was closed, fully disbursed, in February 1974. 1.3 As in the case of the First Project, a parallel lending operation was approved for Mali in May 1973 (Credit 384-MLI, US$6.7 million) covering track works and equipment, motive power and rolling stock, and technical assistance. Due to cost overruns, track works, the project's main compo- nent, had to be substantially reduced and are now being implemented under the Third Railway Project. The Mali Second Railway Project was closed, fully disbursed, in June 1978. 1.4 The Second Project was implemented during a period of high infla- tion that started at the end of 1973. This had no effect on the cost of most of the project's components, as their contracts were negotiated before that time; however, spare parts, a component that was introduced following a restructuring of the project in 1974, was affected by a steep increase in costs. The project was completed in 1978. The last disbursement was made in March 1980. 1.5 A list of covenants under the Second Project and statements on their compliance is attached as Annex 1. - 12 - 2.Project Preparation and Appraisal 2.1 Supervision missions undertaken during the First Railway Project led to the identification of CFS weakness and operating needs. Accordingly the Second Railway Project was developed with the Bank's assistance, based on the findings of these supervision missions and the objectives of the Third and Fourth Four-Year Plans. The project was designed as a three- year project and integrated into the Fourth Four-Year Plan. The proposed project was to cost $12.31 million (US$6.79 million in foreign costs and US$5.52 million in local costs) out of which the Bank Group was to cover US$8.14 million under the proposed loan/credit, later increased to US$9.6 million. (US$ million) Pre-appraisal Appraisal Actual Proposed loan/credit 8.14 9.60 9.60 FAC & suppliers credit 1.31 1.31 1.49 Railway resources 2.15 1.40 0.80 11.60 12.31 11.89 3.Implementation of the Project The Project at Appraisal 3.1 The project was designed to rehabilitate run-down railway equip- ment, primarily track, increase capacity and to improve finances. To achieve these goals, the project consisted of (i) 175 km of track renewal, (ii) workshop rehabilitation, (iii) improvements to freight cars, (iv) new loco- motives, and (v) technical services and training. The focus of the project and its main element was track renewal as the project designers wanted the track between Dakar and Tambacounda -- the most heavily used section of the main line -- to be operationally safe. The project proposed remedy- ing the motive power shortage (which was limiting capacity) by providing six new locomotives financed by France. 3.2 To monitor the impact of the rehabilitation, operating objectives were set. As the project progressed, some operating performance indicators (number of passengers, passenger-km, traffic units, locomotive failures) deteriorated, while others (locomotive and railcar availability, locomo- tive-km) stagnated. More than a year after implementation had begun, it became increasingly clear to Bank missions that the motive power short- age and operating performance had to be improved through an infusion of Additional inputs. Though the financing could not be increased to include the additional elements, at least a redistribution could be made. There- fore the project was redesigned in 1974. Changes in Project Content and Cost 3.3 The main changes (reductions and additions) between the compo- nents and costs of the original and revised projects are given below, followed by a description of the changes. (Details of the evolution of the project - 13 - from the original design through revision to actual execution are presented in Tables 3.3a - 3.3e.) The rationale and justification for the changes, and the reasons why the need for changes could not have been foreseen at appraisal are explained in para. 7.1, "Role of the Bank." 3.4 Reductions in the project components were the following: (i) Local cost of track renewal was reduced from US$4.52 million (out of which 74% was financed by the Bank) to US$1.38 million, curtailing track renewal from 175 km to 41 km; (see Table 3.2) and (ii) Amount of workshop equipment was reduced while remodelling of workshop sheds was increased, thus reducing the foreign cost but increasing local costs. The following items were added: (i) Foreign cost of track renewal was raised by including spare parts for track equipment and turnouts; (ii) Spare parts costing US$1.1 million were added to rehabilitate defective locomotives and to modernize freight cars; and (iii) A small quantity of equipment for operations was added as a new item. Appraisal Revised Estimate Project Actual US$ Million f. US$ Million % US$ Million % 1. Track Renewal 8.47 69 6.39 52 6.35 53 2. Workshop Rehabilitation 1.73 14 2.12 17 1.82 15 3. Modernization of freight cars and spare parts for locos 1/ 0.22 2 1.48 12 1.41 12 4. Equipment for operation 2/ - - 0.11 1 0.12 1 5. Consultancy&Training 0.57 5 0.72 6 0.70 6 6. Locomotives 3/ 1.32 10 1.53 12 1.49 13 TOTAL 12.31 100 12.35 100 11.89 100 1/ Spare parts for locomotives were added to this category when the project was revised 2/ New item taken up in the revision 3/ Financed by FAC (France) Actual implementation followed the revised esimate very closely. There was no cost overrun in the project as a whole. - 14 - A. Track Renewal 3.5 The appraisal estimate had included 175 km of track renewal; the timing provided a one-year lag for procurement and a two-year execution period at a rate of 85 km per year. This estimate proved to be optimistic because: (a) track laying and maintenance equipment had been neglected for several years and needed spare parts, for which CFS lacked funds; (b) neither CFS nor any local contractor was able to execute 85 km of track renewal per year; and (c) most importantly, local funds, which were needed in substantial amounts for locally produced sleepers and the large labor content, were not available. Hence the volume of track renewal was reduced from 175 km to 125 km and then to 85 km. At that point, the need to divert funds to other essential items became imperative, and the track renewal program was drastically curtailed, and limited to 41 km of the most critical sections. Part of the savings was allocated to the purchase of spare parts for track equipment, sleeper and welding factory equipment and turnouts. It was then, however, too late to cancel the order for rails and fastenings. (But as it turned out, most of the track materials had been contracted before the 1973 world inflation and thus left CFS with sufficient materials needed later for restoration of track after derailments and for spot renewals, which CFS otherwise could not have afforded.) 3.6 The track renewal carried out was later found to be of poor quality. The reason was that CFS had used a calcareous type of ballast which was brittle and did not stand up to the impact of the tampers; the track geometry, though apparently satisfactory at the outset, did not reveal defects until much later. A consultant engaged to investigate the problem concluded that if the ballast was renewed, the track could be restored to good condi- tion. Accordingly the restoration of this track was made a condition of disbursement in the Third Project. B. Workshop Modernization 3.7 The absence of improvement in the motive power and rolling stock situation (e.g. 26 locomotive failures, 22 hot boxes and 5 partings in one month alone) was attributed to lack of spare parts for locomotives. In addition, the workshop study showed that productivity, particularly lpcomotive repairs, could be stepped up if structural changes were made to the workshops. Accordingly US$1.2 million worth of locomotive spare parts was added (under the category modernization of freight cars), and the local costs of workshop remodelling were raised to cover the enlarged civil works. - 15 - C. Equipment for Operations 3.8 Though very little spare funds were available, US$0.11 million was allocated for telecommunications equipment, weigh bridges and forklift trucks. Unfortunately this was not enough to bring about the operating improvements needed, particularly in telecommunications. Project Execution Time 3.9 The appraisal estimate of the execution time and the actual schedule was as follows: Appraisal estimate: October 1972 to March 1975 Actual implementation: December 1972 to December 1978 Effective implementation time: 5 years 9 months Delays resulted from many sources. There were four principal reasons for the delays in procurement: (i) a three-month delay in Loan/Credit effec- tiveness due to the Government's slowness; (ii) procurement delays due to cumbersome procedural formalities; (iii) a single source for critical locomotive spare parts (original supplier); and (iv) inadequate bidding preparation. Delays in the track renewal program were attributable to inadequate project preparation, lack of local funds, insufficient motive power to haul service trains and unexpected subsoil weakness. Other project components suffered their share of delays: workshop modernization was held up by inadequate project preparation and insufficient capacity for executing major civil works, and the studies and training component was delayed by a lack of counterparts, lack of data, delay in negotiating a transport study contract and in enlarging the workshop study. Details of procurement and implementation delays are discussed in Annex 2 and the key dates shown in table 3.4. 3.10 Disbursements started in June 1974 and were completed in March 1980 (see table 3.5). Progress of studies and work of consultants Operating Study 3.11 This study was conducted by a single expert for a period of 13 months. His objective was to propose measures to improve overall opera- tions. He was unable to cover the entire scope of his terms of reference because basic data were not made available to him until too late and no counterparts were provided for several months to assist and coordinate his work, As a result, his study failed to cover (a) planning for an exten- sion/remodelling of Dakar marshalling yard, (b) a signal box for Dakar station, and (.c) updating and broadening the scope of working manuals and rule books. Workshop Study 3.12 The workshop study was carried out by consultants in two phases: between October 1972 and November 1974 and from April 1975 to March 1976. - 16 - The first phase was designed to (i) bring about better utilization of locomo- tives; (ii) improve the quality of maintenance; and (iii) remodel and reor- ganize the workshop. This was implemented satisfactorily. 3.13 During the second phase at the Bank's request, he worked out a workshop rehabilitation program and advised on construction and timing of works. As a consequence of internal friction within CFS and lack of cooperation, the detailed workshop remodelling program, bidding documents and tender specifications were delayed 12 months. His plans were later modified at the Bank's insistance, the main change being the replacement of a 100 ton traverser by a set of switching tracks. Transport Coordination Study 3.14 At appraisal of the project, the Government agreed with the Bank that coordination of land transport in Senegal was unsatisfactory and that the theoretical and data bases necessary for more effective coordination were inadequate. Accordingly, the project financed a study to aid the Government on the coordination and planning of road and rail transport. The study was originally scheduled to take about four man-years but dollar devaluation against the guilder (the consulting firm was Dutch) necessi- tated a 25% reduction in study time. The study began November 1973 and was completed in September 1975. 3.15 The consultants found the principal defects to be: (i) a lack of knowledge of capacity and costs of the railway system; (ii) inadequate knowledge of the existing road vehicle fleet, its capacity, year-to-year changes in composition, its operating costs; and the road fleet's inadequate contribution to government revenue. The consultants paid comparatively little attention to railway problems beyond listing the physical constraints on capacity, and paying no attention to management problems. 3.16 The report's main recommendation, the creation of a National Commission for Transport to be responsible for the execution of national transport policy, including inter-modal coordination, was strongly opposed by the Ministry of Transport and was not implemented. However, proposals for strengthening the Ministry's Division of Studies were accepted and implemented. Technical Assistance 3.17 Though the Second Project did not finance the in-house technical assistance program of CFS, the presence of large numbers of OFERMAT experts influenced considerably CFS performance, which has to be reckoned with when evaluating the project's impact. 3.18 In 1974, there were 35 expatriate technical assistants. The distribution, however, was uneven totally leaving out the operating, commer- cial and telecommunications departments, and training, finance and account- ing. In addition, the permanent way department had too few technical assist- ants. On the other hand, despite having 19 assistants in the mechanical department, motive power and rolling stock maintenance was far from satis- - 17 - factory. In 1974 the Bank and OFERMAT pursued the question of a more rational spread of technical assistants, their qualifications and their reassignment to supervisory and operational positions. The results followed in February 1975. The technical assistance team came down to 22 but covered all criti- cal areas including training, though still inadequately. One significant change was that expert assignments were to run for specified periods, so that it became vital to have Senegalese staff trained to take over these positions. Improvements continued through the Second Project and into preparation of the Third Project; further improvements remain to be achieved. 3.19 It was pointed out to CFS that the technical assistants should not concentrate on day-to-day operations at the expense of long-range plan- ning and execution of the project. A mission noted that the change in the role of the technical assistants from that of in-line manager and execu- tives to that of advisors (introduced in FY 1971) was affecting the effi- ciency of the whole technical assistance program. Since then as a result of the Bank's intervention in FY1975, the technical assistants have gone back to "in-line" roles in principle but they remain devoted to day-to- day work, carring out the routine duties which their Senegalese counter- parts should be doing, thus leaving themselves neither the time nor the opportunity for long-term planning or effective transfer of technological know-how. 4.Traffic and Operations Traffic 4.1 The appraisal forecast of freight traffic was based on an ana- lysis of the main commodities, namely phosphates from Thies and Taiba, groundnuts, other national traffic, and international Mali transit traf- fic. Freight traffic was forecast to increase from 1.78 million tons and 330 million ton-km in FY1971 to 2.33 million tons and 445 million ton-km in FY1977, with average annual increases of 4.6% and 5.1%, respectively. Passenger traffic was forecast to increase during the same period from 2.79 million passengers and 257 million pass-km to 3.09 million passengers and 282 million pass-km, representing average yearly growth rates of 1.7% and 1.6% respectively. A comparison of projected versus actual traffic is shown in Table 4.1. 4.2 The freight forecast proved fairly accurate for the first three years, particularly as regards ton-km; the difference between projected and actual figures was less than 1%. During these years, shortfalls, mainly in groundnuts, were compensated for by larger-than-expected increases in phosphate. During the last three years of the forecast period, traffic declined and by FY1977 CFS freight traffic was 33% lower than forecast in tons and 31% lower in ton-km. The main reason for this poor traffic performance was a decline in capacity due to a drop in locomotive avail- ability. 4.3 International traffic and phosphates are the two main traffic items (measured in ton-km), accounting for more than three quarters of - 18 - the total. Until FY1974, international traffic was very close and even exceeded the forecast mainly due to the substantial amount of drought relief imports for Mali. From FY1976 onwards, exports recovered partially but did not reach higher levels because overall Mali production of export- able goods did not rise as expected and there was increased processing of raw materials in Mali (groundnuts into oil and cakes, cotton into fiber), reducing the exportable volumes. During the same period, overall Mali imports dropped to a more normal level due to reduced drought supplies and the share shipped via the Ivory Coast routes increased from 33% in 1972 to 57% in 1977. This increase was due partly to Government policy of favoring this outlet for political reasons and partly to the deteriorat- ing quality of service offered by the Mali and Senegal Railways, even though the Dakar route has remained cheaper for traffic destined for Bamako (see Table 6.1 in the Economic Evaluation chapter). The allocation of Mali international traffic has been closely watched by Bank supervision missions to Mali, and in the last three years the Dakar route's share has increased to about 50%, which is satisfactory in light of the operating difficulties experienced by both railways. Phosphate traffic was hampered by the low availability of heavy locomotives and, although at much higher costs (and tariffs), there was diversion of phosphates to road every year since 1972, with a high of 311,000 tons in 1974, when much-CFS equipment was being used to carry drought-relief imports to Mali. Since mid-1979, with the arrival of two new high-powered locomotives, CFS has been carrying all phosphate traffic that is offered. 4.4 The appraisal anticipated that CFS would be able in FY1972 to nearly double its FY1971 groundnut traffic and to continue increasing it in the future based on expectations that: (a) overall groundnut produc- tion would increase; (b) CFS would establish more competitive pricing and marketing policies; and (c) groundnut traffic would be more economically distributed between road and rail. Groundnut production did increase but railway volumes decreased because ONCAD continued to favor truck over rail as shown below: Fiscal Years 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Marketable 581 570 385 765 386 445 750 1150 950 514 755 volumes ('000 tons) Railway volumes 203 141 117 107 71 52 76 105 72 64 29 ('000 tons) Z Rail 35 25 30 14 18 12 10 9 8 12 4 While the preference for trucks can be explained by the increase in truck imports and pressures from truckers, coupled with insufficient railway hauling capacity, better coordination between ONCAD and CFS could have allowed the railway to carry substantially greater volumes without increas- ing its transport capacity. A study of groundnut transport financed under the Third Railway Project concluded that an optimal economic allocation - 19 - would be for the railway to carry about 200,000 tons/year. Procedures to achieve this level are expected to be agreed between CFS, ONCAD and the Government during 1980 and to be gradually put in effect following expected improvements in CFS locomotive fleet. 4.5 The appraisal expected other national traffic and general cargo traffic to increase at 3% per year from an estimated 184,000 tons in FY1972. However, general cargo dropped dramatically, and by FY1979 it was 51,000 tons. The decline in a railway's general cargo traffic in the face of increasing road competition is a world-wide phenomenon reflecting the inade- quacy of railway service and higher costs. 4.6 National passenger traffic declined dramatically during the period, from 257 million pass-km in FY1971 to 137 million in FY1979, again due to road competition. Most of the decrease took place in the Dakar-Thies section, a very short haul of 90 km, which accounted for more than 1 million passengers at the start of the period, about 400,000 by FY1976 and an esti- mated 250,000 passengers by FY1979. While rail fares remained about equal or slightly lower than road, the latter had three significant advantages: more frequent, faster and more reliable service. International passenger traffic fluctuated, passing from 48,000 passengers in FY1971 to a peak of 67,000 in FY1974 but dropping to 46,000 in FY1978. Operations 4.7 The impact of operations on traffic trends can be traced to the fluctuations in motive power. The bulk of CFS short-haul passenger traffic was being handled by railcars, while the long-haul trains were drawn by the low-powered locomotives. The availability of railcars dropped from 65% in FY1971 to 41% in FY1976, while railcar km plunged from 1.51 million to 0.72 million during the same period. Simultaneously, CFS, which had 16 low-powered locomotives with an average availability of 43% in FY1971, had only 13 in FY1976 with average availability of 42%. Passenger traffic was severely affected by this deterioration in passenger hauling capacity. 4.8 The freight locomotives of CFS had only a slightly less chequered history. In FY1971, CFS had 14 medium-powered locomotives and 4 high-powered locomotives all of which had an average annual availability of 57% and an available HP of 13,200. The availability averaged around 55% up to FY1974 and the available HP also remained pretty much unchanged, both attri- butable to delivery of four new medium-powered locos in FY1972 and two more in FY1973. The higher availability of these new locomotives masked the rapid deterioration of the rest of the fleet for about two years. During this period the performance of the old fleet was steadily going down, as indicated by the increase in the number of locomotive failures per annum: 110 in FY1971 and 251 in FY1974. The poor performance of the CC2400s contributed to this worsening trend. From FY1975 onwards, the performance of the new locomotives started deteriorating as well, caused by inadequate maintenance although spare parts became available under the project, and because the new locomotives were overworked. The starting point of this vicious circle is inadequate motive power for the traffic needs, a situation stemming from: (i) inadequate maintenance and an insuf- - 20 - ficient budget for spare parts; (ii) the absence of an investment program to rehabilitate or replace worn-out and over-aged locomotives; and (iii) failure to conform to prescribed standards of either quality or frequency of repair work in workshop. Operating Objectives and Actual Performance 4.9 The objectives and actual performance statistics are shown in Tables 4.2 and 4.3. The trends and results are analyzed below. 4.10 Locomotive Performance: The locomotive-kilometers per day in service declined from FY1971 to FY1975 but surpassed the targets from FY1976 through FY1978. Locomotive availability fluctuated within narrow limits, 50% and 56% in the years FY1972 through FY1976, and thereafter declined to 45% and 49%. (The base figure of 70% for FY1971 taken7 s a basis for defining the targets refers to locomotives "in service".)- The 80% and 85% availability targets expected in FY1974 and FY1976 respectively are very high even today for most railways in this Region. The availability failed to pick up despite the addition of six new locomotives which is a clear indication of how poorly the older locomotives (21 over 16 years old in a fleet of 27) were performing. This is substantiated by the number of locomotive failures (which is not among the target indices) which rose from 110 in FY1971 to 251 in FY74. Viewed against this background, the decreasing locomotive kilometrage is a clear proof of a lack of reliable motive power. 4.11 Railcar Efficiency: The continuous decline of avail'ability indi- cates that maintenance was neglected. Availability targets were 85% for FY1974 and 95% for FY1976 while actual performance figures for these years were 51% and 71%. These targets were unrealistically high. 4.12 Freight Car Performance: Even though CFS had no figures for freight car availability in FY1971, targets were fixed. Average load of freight cars was to within 90% of targets, rising from 18 tons to 26 tons between FY1971 and FY1978. Wagon-km per day per wagon dropped steadily indicating poor turn-round and low motive power availability. 4.13 Staff Productivity dropped marginally from 171 to 165 between FY1971 and FY1978. The goals prescribed in the objectives remained in- accessible, though in FY1974 performance was 94% of the target, due to a reduction in staff. Basically, this index was stationary because traffic did not go up as expected. Staff training was and is still inadequate 1/The number of locomotives "in service" is usually taken as the total nui;ber of locomotives "in stock" or owned by the Railway less the number out of order for a continuous period of not less than 4 months-in a fiscal year. The targets for locomotive availability were based on the actual figure of 70% for FY1971 taken as the base year in the appraisal report. This availability is reckoned on the basis of the number of locomotives "in service" while CFS practice was to calculate availability on the basis of the number of locomotives "in stock". Accordingly, the availability for the base year FY1971 was 55.6% of locomotives "in stock". it is, how- ever, not possible to relate the "in stock" performance figures of subse- quent years to the "in service" figures given in the targets. - 21 - and considerable progress has yet to be made. Also, staff discipline, which was generally poor, played a significant part in keeping this index low. Though the Second Project sought to tackle this problem, progress was achieved only during the Third Project. The efforts in this direction have to be continued, as staff discipline still leaves much to be desired. 5. Financial Performance General 5.1 CFS was unable to meet its major financial targets under the Second Railway Project (rate of return, working ratio, staff cost ratio). During an initial phase through FY1975, financial performance deteriorated due to traffic decline and slower than anticipated tariff increases. Subse- quently, however, better management and control of working expenditures, and improved traffic performance resulted in a gradual improvement of CFS finances by the end of the project. At the institutional level, after considerable urging by the Bank, CFS obtained greater financial autonomy from the Government Centralized Accounting System and from a priori finan- cial controls effective FY1975. This enabled it to function more efficiently in procurement matters. Income Account (FYs 1972-79) 5.2 CFS forecast and actual income accounts for FY1972 through FY1979 are shown as Table 5.1. A summary of key indicators for FYs 1973, 1975, 1977 and 1978 is shown below. The forecasts for 1977 and 1978 were taken from the Third Railway Project Appraisal Report as the Second Project Appraisal did not project financial figures beyond FY1975. SUMMARY INCOME ACCOUNT (IN C F A F MILLION) 1973 1975 1977 1978 FCST ACT FCST ACT FCST ACT FCST ACT ----------------------------------------------- -------- -------- --- ---- -------- -------- -------- -------- PASSENGER TRAFFIC (MILLION PK) 273. 227. 279. 193. 282. 182. 380. 146. FREIGIT TRAFFIC (MILLION TK) 358. 353. 420. 359. 445. 308. 382. 346. 1OIAL OPERATING REVENUE 2858. 2311. 3241. 2973. 3010. 3331. 3762. 3744. WORKING EXPENSES 2405. 2541. 2437. 3572. 3625. 3322. 3987. 3478. OEPRECIATION 552. 271 642. 291. 345. 376. 455. 420. D-P--CIATIO------------ ---------- - --- ---------- .---------- --. ----- ------------- NET OPERAING RFVENUE(LOSS) *99. -501. 162. -80. -360. -3 . -680. 14. INTEREST C14ARGES 1 91 93 2- - - -A - - - - - - - - - - - - - - - - - - - - NET INCOMtQdVFICIT) -278. -630. -(40. -936. -441. -451. -94. -328. GOERM?4 ~USIY300. 300. 300. 300. 300. GOVERNMENT1 SUSS:DY .gg. *22. -43. -4135. -0S4. EXCEPTIONAL "EVILOSS) IN FY 1. -4. 53. 34. FORCE ACCOUNT WORK IN FY *07. 509. 213. EXCEPTIONAL REV(LOSS) IN PREV YRS -704 219. APPROPRIATIONS FOR WRITE OFFS . .** * .. NET ACCOUNTING PROFIT(LOSS) *278. -542. -140. -2817. -184. -560. -694. -651. STAFF EXPENSCS/IOTAL WORKING EXPENSES 74. 79. 72. 69. 74. 72. 71. 69. VORKING RAIto 84. 10. 75. (20. 100. 00. 10(. 93. OPERATING RATIO . . 11 11 804. - 22 - 5.3 As the forecasts through 1976 were optimistic with regard to actual performance, the Third Railway Project appraisal tempered the projec- tions for the years 1977 and 1978 and CFS achievement in those years was better than the forecast results. The result of delays in implementation of timely tariff increases is also evident in Table 5.1 and the above table. A more detailed revenue/cost analysis is presented as Table 5.4, and sum- marized below: UNIT REVENUES/CoSS(CFAF/000TK) 1973 1975 1977 1978 -.---. ---...-..-----.---- ..FCST ACT FCST ACT FCST ACT . FCST ACT FREIGHT REVENUE/TK(CFAF/OOOTK) 5500. 4705. 5500. 6538. 6315. 7825. 7777. 6295. TOTAL REVENUE/TK(CFAF/OOOTK) 4825. 3847. 4418. 5292. 4942. 6549. 6516. 7380. WORKING EXPENSES/TK(CFAF/OOOTK) 2921. 3447. 2504. 4433, 3706. 4900. 5021. 4B82. OPERATING EXPS/TK(CFAF/OOOTK) 3811. 4381. 3486. 6479: 4986. 6780. 7094. 7069. 5.4 From the table it can be.seen that until 1975, average revenue/ traffic unit lagged behind the increase in average costs and was further accentuated by the changing composition of freight traffic as CFS was unable to capture the high value groundnut traffic forecast at appraisal, and operational problems prevented CFS from realizing its international freight traffic potential. The railway thus failed to achieve the targeted average revenue of CFAF 5.5 per ton-km by mid-FY1973 and did not reach this level until FY1975 when the tariff increases on international traffic became effective. 5.5 Throughout the project execution period, a substantial decline in passenger traffic set in, caused by poor service, increased tariffs which did not fully cover costs, further declines in service, etc. Passenger traffic fell by an average of 8% a year between FY1972 and FY1979. How- ever, unit revenues increased only about 3% a year through 1975 but not over 13% a year from 1975 through 1979, providing an increase over the entire period 1972-1979 of about 8% a year, thus nearly fully compensating the fall in traffic volume. As a result, revenue from passenger services fell by over 20% between by FY1972 and FY1975 before regaining the 1972 level by FY1979. 5.6 CFS book losses were even higher than the operating losses as the FY1975 audit recommended major write off of unrecoverable accounts receivable and obsolete stocks. Through FYs 1973-78, CFS cumulative net operating deficits (after interest charges) amounted to CFAF 3071 million while the net book loss amounted to CFAF 4967 million, of which CFAF 1000 million consisted of special provisions for depreciation in FYsl977-78 that the CFS accountant proposed to charge to the operating income account in order to better state the railway's financial position pending incorpora- tion of a revalued asset base. The accounting depreciation charged on the existing asset base amounted to CFAF 376 and CFAF 420 million respec- - 23 - tively in FY1977 and FY1978, while the estimated provisions on a revalued asset base would have required at least CFAF 1000 million. In addition to these loss provisions, CFS FY1975 audit revealed serious loss potential in the receivable accounts and in inventories. Consequently the auditors recommended that CFAF 460 million of obsolescent spare part stocks for locomotives and wagons are no longer required by CFS and CFAF 528 million of nearly unrecoverable accounts receivable be written off. The audit commission also recommended that CFS make a provision for unfunded pension liabilities to the State Pension Scheme of CFAF 1.8 billion to be amortized over 16 years. After the first payment of CFAF 110 million to the State Pension Fund in FY1976, CFS obtained a further moratorium until FY81. This additional provision for a substantial liability was partially offset by transfers from existing reserves for renewal and replacement, and from the capital subsidy accounts. (Details of the account movements are shown in the Balance Sheet, Table 5.3). 5.7 These substantial book losses would have more than halved CFS equity account, but for the Government's conversion in FY1974 of CFAF 2300 million of long term debt into equity capital. Source and Applications of Funds 5.8 Table 5.2 shows the source and applications of funds during pro- ject execution, including cumulated amounts. It is summarized below, with selected years as well as the cumulated FYs 1973-78 totals. SUMMARY FINANCIAL INDICATORS (IN CFAF MI.LTONI 1973 1975 1977 1978 TOTAL AUD AUO UNAUD EST 73-78 SOURCE & APPLICATION OF FUFS SOURCE I. CASH GENERArED FROM OPERATIONS -143. -567. 62. 145. -178. 2. GOVERNMENT OPERATING SUBSIDIES 300. 300. 300. 1200. 3. CAPITAL SU6SIDIES 562. 188. 750. 4. LONG TERM DEBT INCREASE 3988. 1274. 1624. 260. 8583. (INCL CONVERSION OF GOVT ADVANCES) 9. EOUITY(CONVERSION OF rOVT DEBI) 2300. . OTHER EXCEPTIONAL SOURCES(USES) -420. 30. 2. -598. ............................................. .......... .......... .......... 7 0 TA L S 0 URC ES 3905. 587. 2578. 895. 12117. APPLICATION I. INVESTMENTS(INC IN FIXED ASSETS) 352. 772. 1471. 159. 4968. 2. DEBT SERVICE-INTEREST 129. 46. 84. 174. 646. 3. -PRINCIPAL 37. 218. 2579. 4. NET INC(DEC) IN W)RKING CAPITAL 3424. -231. 986. 344. 3796. (NOT INCL. VARIATIONS IN CURRENT MATURITIES) w.....w e ..m w........m............................. T 0 T A L A P P L I C A TI 0 N S 3905. 587. 2578. 895. 12117. 5.9 The table shows the inadequacy of CFS financial performance. Over the six-year project execution period, CFS was unable to generate even a positive cash flow from its operations. Its working capital increased only because the Government converted a substantial amount of treasury advances and overdraft facilities into long term debt (and subsequently partly to equity) in FY1973 and again in FY1977. As a result of these timely conversions, as well as injection of CFAF750 million in capital - 24 - subsidies (to finance locomotive purchases in FY1977 and FY1978) and CFAF 1,200 million compensation for losses on uneconomic lines, CFS cash and liquidity position increased by CFAF636 million over the entire project period. The cash transfers from the Government enabled CFS to finance its diminished share of the costs of the Second Project amounting to CFAF 700 million between 1974 and 1978, and meet its debt service payments amount- ing to CFAF 906 million in interest, and principal payments over the same period (not including the CFAF 2,300 million of debt converted to equity by the Government). Balance Sheet 5.10 Table 5.3 shows the detailed annual evolution of CFS Balance Sheet through FY1978. The main features are summarized below: SUMMARY FINANCIAL INDICATORS flN CFAF MILLION) 1973 1975 1977 1978 BALANCE SHEET AT JUNE 30 AUD AUD UNAUD EST ASSETS TOTAL CURRENT ASSETS 1863. 1336. 1795. 2658. INVESTMENTS(NET OF WRITEDOWNS 6. 6. 6. 6. TOTAL FIXED ASSETS 13179. 14862. 16396. 16135. OTHER ASSETS 13. 4. 2. T 0 T A L A S S E T S 15048. 16217. 18201. 18801. LIABILITIES & EQUITY CURRENT LIABILITIES 1070. 1742. 974. 1493. CURRENT MATURITIES 125. 205. 230. TOTAL CURRENT LIABILITIES 1070. 1867. 1179. 1723. LONG TERM LIABILITIES NET PENSION LIABILITY 1791. 1681. 1681. TOTAL LONG TERM DEBT 6605. 5908. 8579. 8621. TOTAL LONG TERM LIABILITIES 6605. 7699. 10260. 10302. LESS- CURRENT MATURITES ' 125. 205. 230. NET LONG TERM LIABILITIES 6605. 7574. 10055. 10072. OTHER LONG TERM PROVISIONS 10. 9. TOTAL LIABILITIES 7685. 9441, 11234. 11804. EQUITY EQUIVALENT CAPITAL 8999. 9012. 9574. 9762. SUBSIDIES(NET OF TRANSFERS ) 862. 625. 567. 537. RESERVES(NET OF TRANSFERS ) 847. 500. 1000. NET ACC. REVENUES(LOSSES) -3344. -2861. -3673. -4301. TOTAL EQUITY EQUIVALENT 7364. 6776. 6968. 6998. T 0 T A-L L I A B. & E 0 U I T Y 15049. 16217. 18202. 18802. RATIO ANALYSIS CURRENT RATIO(%) 174. 72. 152. 154. NET L T LIABILITIES/TOTAL EOUITY(.) 90. 112. 144. 144. - 25 - The bulk of the long-term debt increase came through the conversion of treasury advances and overdrafts. Most of the remainder was accounted for by the withdrawal of the proceeds of Credit 314 and Loan 835-SE through the project period, and by the CCCE, FAC and supplier credits for locomo- tive purchases in FY1974-78. Remedial Action 5.11 At the start of the Third Railway Project, the history of CFS financial performance prompted the Bank to seek further remedial action to improve CFS financial position. A first step was the proposed conver- sion of CFAF 3,492 million in long-term debt owed to the Government into a grant. The Government agreed to this move but has not finalized the change, although in practice CFS does not pay any interest or amortization on the debt and is treating the amount owed as equity. 5.12 However, CFS main problem continues to be its poor operating performance resulting from a combination of low handling capacity, declin- ing domestic traffic, poor coordination of international service resulting in further diversion of Mali traffic to the Ivory Coast, and a cumbersome organizational structure offering poor incentives to improved performance. The Third Railway Project, in recognizing these as the principal problems, has begun to review CFS structure in a more fundamental manner. A study of the possible restructuring of the railway into financially autonomous entities, orientated separately on the international and national operations and capable of being run along more commercial lines, has been started. 5.13 On another point, the technical assistance improvements begun in the Second Project have been further strengthened under the Third Project, and accounting and financial reporting systems capable of providing better information to CFS management are being set in place. As audits of CFS accounts were last carried out in FY1975, CFS has now appointed external auditors to review the FYs 1976-79 accounts and fully audit FY1980. Internal controls and procedures will also be examined. 6.Economic Evaluation Recall of appraisal analysis 6.1 At appraisal, the economic evaluation consisted of separate analy- ses of track renewal and workshop modernization. The analysis of the track component considered three possible alternatives to immediate renewal of the track: (a) complete deterioration of the line (estimated at 8 years); (b) continuation of traffic on the old line and renewal after its complete deterioration; and (c) improving the road to Kidira. The rates of return for the proposed track investment compared to these alternatives were 22%, 17% and 25%, respectively. The economic evaluation assumed that if the track renewal program were not carried out, the line could be kept in opera- tion only for another 8 years at the cost of increasing maintenance and accidents, reduced line capacity and a substantial loss of traffic and income to the Senegalese economy. The evaluation included the cost of - 26 - the six locomotives which were to replace overaged locomotives and the costs of completing track renewal of the line up to the Mali border, which was planned to be achieved within 5 to 6 years from appraisal, outside the project. 6.2 The evaluation of the workshop modernization investment rested on the fact that because of an inadequate layout of facilities and obsolete equipment and tools, servicing time of rolling stock was about double normal standard. The economic benefit of the modernization program was estimated at about CFAF75 million (CFAF of 1972) and, on this basis, the economic rate of return of the investment was estimated to be around 18%. Economic reevaluation 6.3 In re-assessing the project's economic justification there are two main differences to be accounted for with respect to appraisal, namely, the change in composition of the project with the inclusion of an important component in spare parts and a significant reduction in the scope of the track renewal program. The reasons for these changes are explained in detail in Chapter III. The workshop component was executed as originally envisaged. 6.4. Track. No basic data were presented in the economic evaluation of track investment in the Appraisal Report, nor was it possible to gather such data for the preparation of this report; it has therefore not been possible to carry out an analysis comparing the actual economic returns with those given in the appraisal. However, it is possible to.indicate a gross order of magnitude of the re-estimated economic return, as presented below. 6.5 The change in the scope of the track component was substantial. Instead of the 175 km originally envisaged to be renewed, rails were bought for the equivalent of 150 km of track, while only 41 km of track were renewed under the project. However, an additional 45 km of rails were laid in various sections as spot renewals in critical locations or to replace damaged rails following derailments or accidents. For the 86 km of renewed track, data is insufficient to allow a quantification of benefits except that if this had not been done, closure of the line would have taken place in less than 8 years. However, the track renewal under the Second Project involves the same type of track works, similar traffic levels and rolling stock equipment circulating on the line as the track to be rehabilitated under the Third Project, and therefore it can be assumed that the economic rate of return estimated on the latter, that is, 13%, is a good proxy for the return on the track investment in the Second Project. Works under- way to remedy defects in the initial track laying require a comparatively smll investment which would drop the return by 1-2%, to about.11%. The balance of rails bought and not yet utilized is 64 km. They will be used for renewals beyond PK271 in critical spots and for the expansion of Bel Air marshalling yard, which should be completed in 1981. Consequently these rails provided no benefits for about 8 years. Taking into account the estimated return for the rails that were installed (86 km) and making an allowance for the years during which 64 km of rails were idle, the eco- nomic return for the whole track investment can be estimated at about 9%. - 27 - 6.6 Workshop modernization. This project component was implemented as envisaged at appraisal and no significant change in benefits with respect to appraisal estimates is likely to have taken place, as utilization of motive power followed the forecast (table 4.2). The costs of the invest- ment were close to the original estimates. Therefore, the re-estimated economic return of this investment is, as estimated at appraisal, about 18%. 6.7 Spare parts. In evaluating this investment, it has been assumed that the $1.22 million spent on spares generated an increase in locomotive availability of about 5% during a period of five years, estimated to be the average life of the spares. This increase in availability can be trans- lated into a corresponding amount in additional CFS hauling capacity. When the parts were reFived during 1975-1977, the railway's average perform- ance was 20,313 ton-km- per year per available horsepower. During this period, the average total horsepower of CFS locomotive fleet was 23,480. On the basis of these figures, the spare parts would have allowed CFS an additional 23.8 million ton-km per year. Given domestic traffic priorities, this amount of international Mali traffic (essentially foodstuffs) would have been diverted to the Ivory Coast routes if the increased availability had not taken place. The 23.8 million ton-km, considering the 642 km haul for international traffic, would be equivalent to 37,000 tons. For the economic analysis, only 50% of this tonnage is attributed to the CFS invest- ment, the remainder being attributed to Mali Railway. This tonnage can be evaluated from both a purely Senegalese point of view (net revenues for CFS) or on a regional approach (difference in economic costs between the Dakar and the Abidjan routes). In both 4 ses, the benefit is fairly similar, about CFAF 6000/ton in 1978 prices . This gives benefits of about CFAF 111 million/year 1978 prices. Considering the investment costs (see table 6.2) and benefits over 5 years, the economic return would be about 16%. 6.8 Overall project return. On the basis of the above rates of return for individual components and taking into account their relative costs, the re-estimated rate of return for the whole project would be about 13%. 7.Role of the Bank 7.1 The First Railway Project was in the nature of an emergency opera- tion the objective of which was to improve the capacity of CFS through strengthening its infrastructure, mainly the track, and improving managerial efficiency. The Second Project bridged two four-year plans and was intended to focus on rehabilitation of worn-out equipment, particularly the track. The initial design of the project, however, had to undergo major changes, chiefly a curtailment of track renewals and an increase of locomotive spare 1/ Appraisal Report, Senegal Third Railway Project, January 1978. 2/ See Table 6.1 for comparison between Dakar and Abidjan costs. For national benefit calculation, data from the Second Railway Project Appraisal Report (Table 9) has been updated. - 28 - parts. These changes were initiated as soon as the underlying causes for the railway's poor performance became evident. One of the main reasons for the changes and for the failure of the original project design to give the same weight to the different project elements was that the project was taken up during a period of transition for the railway. Expatriate technical assistants were being switched from managerial positions to advi- sory roles.' This switch was largely responsible for a decline in planning the maintenance of rolling stock, leading to irregular and reduced procure- ment of spare parts, accumulation of maintenance backlogs and resultant deterioration of locomotive performance. It was not apparent at the pro- ject design stage what the effect of the switch in the duties of technical assistants would be, but it began to become clear several months later. 7.2 The Bank Group did not limit itself to physical improvements but actively engaged in analysis, technical assistance and general institu- tion building. The Second Project studied the main areas of managerial weakness, namely in operations and workshop organization. In addition, serious efforts were made to improve the quality and efficiency of the bilateral technical assistance. The Bank was also instrumental in establish- ing closer cooperation in technical aspects between CFS and OFERMAT. 7.3 An important contribution of the Bank Group was making the Senegalese and Malians aware of the need for closer cooperation between the two rail- ways and the two governments. Efforts have been made to encourage this cooperation through meetings with high railway and government officials and through extensive correspondence. The Bank is accelerating this process by means of a structural study under the Third Railway Project which should recommend alternatives for a CFS reorganization, leading to better ways to handle international traffic. 7.4 As soon as the Bank Group was able to diagnose the technical defects of CFS which needed correction, reallocations were made to finance additional inputs, but the project was not big enough to remedy all the major weaknesses. For example the project as it was first designed failed to accord a high priority to the removal of the serious motive power problem. After the underlying causes were recognized, the corrective measures taken were too small and perhaps not radical enough to produce appreciable results. The reallocation of US$1.1 million for spare parts was a necessary emergency measure but insufficient to overcome the problems of a fleet where more than 80% of the locomotives were overaged. The process of rehabilitating CFS plant and equipment continued into the Third Project and may have to extend to long-term assistance if the railway is to continue to improve its efficiency. In short, the Bank Group has recognized the following technical causes for the railway's poor performance: (a) the cumulative effects of long neglected track, motive power and rolling stock maintenance; (b) under-investment in spare parts, tools, telecommunications, etc.; and (c) lack of a regular program of renewals of major equipment like locomotives, rolling stock, rails, sleepers, etc. - 29 - The effect of the Bank Group actions was, first, to hold in check the rapid deterioration and then help eradicate as many of CFS defects and failings as possible, subject to constraints of time, funds, and supervision. 7.5 On the question of identifying the nature and extent of the man- agerial problems in operations and workshops, the Bank Group financed studies carried out by competent consultants. But CFS derived less benefit than expected (paras. 3.11-3.13). Despite the problems, the studies produced several useful suggestions and to that extent served their purpose. Some of the lessons learned from the Second Project are: (a) Studies should be long enough to include an implementation phase in which the consultant actively participates; (b) the local counterparts should be named when the bids are called from consulti g firms so that he starts familiarizing himself with the stu y rom its inception; and (c) a permanent information system capable of furnishing reliable data should be established. Lessons (a) & (b) are now routinely followed, and the information system was recently strengthened under the Third Railway Project by taking on an experienced French technical assistant who has already effected improve- ments. 7.6 At the institutional level, the Bank played a key role in enabling the railway to obtain greater financial autonomy from the Center and to be free of the a priori financial controls which had hampered day-to-day financial operations in the past. This helped the railway make more rapid progress in procurement matters. It also paved the way for the design of a financial accounting system more suited to the railway's needs. Under the Third Railway Project, independent financial audits are being carried out to assess the impact on internal procedures and controls of the changed .financial relationship between CFS and the Governvnent. 8.Conclusion 8.1 Two of the project's main objectives, the physical rehabilitation of the railway's track infrastructure and the improvement of its finances, were not achieved. The first objective was not attained due primarily to lack of financing for local costs and CFS lack of technical capability to execute the works at the anticipated rate. The Government was not in a position to provide the local cost contribution due mainly to the drought afLecting the Sahelian countries during 1972-1974 and which severely reduced fiscal revenues. In addition, the works turned out to be substandard due to poor quality ballast. The financial objectives were not achieved because of stagnant traffic and because for political reasons tariff increases were implemented late and reductions in staff were not carried out. 8.2 Although the railway's nominal capacity increased with the provi- sion of new locomotives and improvement to the workshops and freight cars, there was not a commensurate improvement in operating efficiency. During - 30 - the project period some CFS operating efficiency targets were occasionally met, although the majority were not. Some of the operating targets were unrealistically high and led to the hope that the railway could have carried substantially more traffic than it actually did. The delicate balance between the effort to increase efficiency and avoid over-investment on the one hand, and provide sufficient railway equipment to insure adequate hauling capacity, on the other, was tilted in favor of the former and was largely responsible for substantial volumes of phosphates and groundnuts being carried by road and of Mali traffic being routed via the Ivory Coast routes at substantially higher costs. Three factors were at work to under- mine increases in efficiency: the first was a mix of organization and managerial weaknesses, particularly a lack of financial autonomy (but which was partially remedied in 1975); the second was the critical problem of staff productivity; and a significant decrease in the number and authority of technical assistants, before local staff could be adequately trained to take over; the third was the deterioration of the railway's physical plant, to a large extent a due to poor maintenance stemming from the two above factors, but also from insufficient investments in some critical areas. 8.3 Despite the above, some successes were achieved. At the opera- tional level, the workshop investment and study did lead to a rationaliza- tion of equipment maintenance. Utilization of locomotives was kept at a satisfactory level thanks to the recommendations of the operating study. An effort was made to improve coordination of international traffic with Mali, and this was much better than had existed during the first project, although weaknesses still remain. At the financial level, the autonomy granted the railway in procurement matters and the internal tontrols was a step towards better management, although delays in the Government's con- tracts commission partially neutralized the benefits. The subsidy accorded the railway for services in its non-commercial branch lines was an important step toward financial rationalization and of Government's acceptance of its responsibility in providing such social services. 8.4 In the end, the project proved to be a necessary endeavor. With all its shortcomings in execution and in meeting operating and financial objectives, the limited investments made and related actions arrested further deterioration of the railway system, allowed the railway to continue provid- ing key transport services to Senegal and particularly to Mali where no cheaper transport alternatives exist and made a start in the rehabilitation of the track, a vital requirement if the railway is to continue operating in the future. If the project had not been carried out, CFS operations and equipment would have deteriorated so much in the intervening years that the railway would have had to face a major breakdown by now. REGIE DES CHEMINS DE FER DU SENEGAL - Second Railway Project Completion Report SCHEDULE OF PRINCIPAL COVENANTS AND COMM4ITMENTS ON LOAN 835SE AND CREDIT 314SE RELEVANT PROJECT AGREEMENT, GUARANTEE AGREEMENT AND SIDE LETTERS Agreements and Sections Commitments Action Taken Credit Agreement 1. Section 3.01 (a) The Borrower shall carry out Part Fof the Adequate local funds not provided Project and shall cause theRegie to carryout for track renewals. Parts A,B,C,D&E of the Projectwithduedili- gence...and shall provide or cause to be provided, promptly as needed, the funds, facilities...required for this purpose 2. Section 3.01 Cc.) The Government will relend the proceeds of Done: although the Regie and the the Credit to the Regie under a subsidiary Goverment have never observed the Loan Agreement on terms of 25 years including retrocession terms in practice. 5 years of grace and at a 7 1/4% annual rate of interest. 3. Section 3.02 (a) In carrying out Part F of the Project, the Contract finalized in early 1974 and Borrower shall by a date not later than transport coordination study (Part F of December 30, 1972 or such later date as project) was carried out by shall be agreed to by the Association, reputable consultants. employ transportation consultants accep- table to the Association upon terms and conditions (including terms of reference) satisfactory to the Association 4. Section 3.03 (a) The Borrower shall take all necessary steps Although groundnut traffic allocations to ensure that groundnut traffic within the were set up and agreed between the ONCAD territories of the Borrower will be al- and the Regie, there exists as yet no located between road transport and rail practical means of coordination with the transport on the basis of the forecast pro- result that the allocated traffic has duction of groundnuts and the respective never been carried by the Railways. economic costs and service characteristics Moreover, the allocations were based more of these transport modes. on ad hoc compromises than any study of economic costs and benefits. To remedy this, a groundnut traffic study was in- cluded and financed under the Third Rail- way Project. Agreements and Sections Commitments Action Taken Credit Agreement 5. Section 3.04 Without limitation or restriction upon the Remedial action to improve working capital provisions of Section 3.01 of this Agreement, was taken by Government in 1974, 1976 and the Borrower shall make arrangements, satis- 1977. The Government also extended over- factory to the Association, promptly to draft facilities to the Regie on a con- provide the Regie or cause the Regie to be tinuous basis. provided, at all times that the Regie's re- venues shall be insufficient for the purpose, with funds sufficient to enable the Regie to meet its working expenses, debt interest and amortization, and to maintain an adequate working capital. 6 .wSection 3.08 (a) (i) The Borrower shall: take all necessary Done: the Government converted by June 30, steps to ensure that by a date not later 1973 CFAF 2.2 billion into equity and CFAF than July 1, 1973 or such later date as 2.2 billion into long term debt repayable shall be agreed to by the Association: as requested by section 3.08 (i)B. (A) not less than fifty percent (50%) of the indebtedness of the Regie to the Bor- rowtr (as defined below) shall be converted into equity; and (B) the balance of the indebtedness of the Regie to the Borrower shall be converted into long term debt of the Regie repaying without interest or other charges of any kind over a term of not less than fifty years, including not less than ten years of grace. 7 Section 8.01 (e) The Assocation has received an audit certi- Done ficate by an independant auditor acceptable to the Association with regard to the Regie's accounts for its fiscal years 1968o69 and 1970/ 71. Agreements and Sections Project Agreement Commitments Action Taken 3.03 The Regie shall enter into arrangements Done satsifactory to the Association for in- surance against such risks and in such amounts as shall be consistent with sound practice. 4.01 (b) For its fiscal year 1973/74 and thereafter, Partially carried out, however fully the Regie's accounts shall be maintained computerized system and cost accoun- so as to include a detailed breakdown of ting expected to be set up in 1981. income and expenses by nature, to provide cost data by types of railway operations. 4.02 For its fiscal year 1971/72 and thereafter, Achieved only very partially as no the Regie shall: (i) have its accounts and audits have been carried out since the financial statements (balance sheets, state- audit of the Fy75 accounts. ments of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles constistently applied, by independent auditors ascertable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial state- ments for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) fur- nish to the Association such other information concerning the accounts and financial state- ments of the Regie and the audit thereof as the Association shall from time to time reasonably request. Agreements and Sections Commitments Action Taken Project Agreement 4.03 Except as the Association shall otherwise Done agree, the Regie shall not incur any debt unless the amount of its net cash revenue for its fiscal year next preceding the date of such incurrence or for a later twelve-month period ended prior to the date of such incurrence, whichever amount is the greater, shall be not less than 1.5 times the maximum debt service requirements for any succeeding fiscal year on all its debt including the debt to be in- curred. 4.04 (a) Except as the Association shall otherwise agree, Did not achieve this target due to several the Regie shall from time to time take all such factors: late implementation of needed measures including but not limited to adjust- tariff revisions, lower traiffic growth. ments of its tariffs, as are necessary to Actual rate of return was negative through- enable the Regie to generate revenues sufficient out the project executional period. to earn in its fiscal year 1976/77 and there- after an annual rate of return of not less than 2% on its net fixed assets in operation. 4.05 Until the Project shall have been completed, Done the Regie shall not, without the prior ap- proval of the Association, commit itself to any capital expenditures not required under the Project exceeding in the aggregate for any fiscal year of the Regie an amount equivalent to two hundred fifty thousand dollars ($250,000) or relating to any individual capital item es- timated to cost the equivalent of one hundred thousand dollars ($100,000) or more. Agreements and Sections Commitments Action Taken Schedule 2: Plan of action 2. (a) The Regie recognizes that the proportion of Although Regie made some progress, it could direct personnel expenses to total working not fully achieve this target in 1976/77 due expenses is out of line with that experienced to increases in personnel costs and an in similar railway systems. Therefore, the inability to reduce personnel levels. Regie will devise a five-year personnel pro- Personnel expenses were 70% of the total gram (1972/73-1976/77) which will lead to a working expenditures. gradual reduction of proportion of direct personnel expenses to total working expenses, to about 64% by the Regie's fiscal year 1976/ 77. 3. (b) The Regie will introduce modifications to its Tariff adjustment to this level was not existing tariff system in accordance with the implemented until early 1974 on national recommendations of the Regie's consultants in traffic; mainly due to delays in a report dated October 1971, and will introduce Government decision making. selective rate adjustments in its tariffs leading to an overall increase in average revenue per ton-kilometer from about CFAF 5.0 to not less than CFAF 5.5 by the second quarter of the Regie's fiscal year 1972/73. 4. (a) It is recognized that the Regie has branch lines Study carried out and Government began of low traffic density which appear to make an paying an operating subsidy (CFAF 300 inadequate contribution toward the overhead ex- million a year) based on the recon- penses relative to such lines. The Regie will mendations. undertake a detailed study with regard to the economic and financial viability of its branch lines referred to below, in order to determine whether satisfactory financial results can be obtained by rationalizing services, or if this is not possible, by partially or totally eli- minating some services, some stations or an entire line. Agreements and Sections Commitments Action Taken Schedule 2: Plan of action 5. (i) Except as the Association shall otherwise Revaluation of fixed assets was not carried agree, the Regie will: (i) complete the out as scheduled mainly because the impending revaluation of its fixed assets by June 30, changes in the railway's accounting system 1973, in accordance with the recommendations delayed the preparation of a corrected asset of the Regie's consultants in a report en- base for review by consultants. Some delay titled "Prix de Revient et Politique Tarifaire" was also caused by difficulties in dated October 1971; (ii) calculate depre- interpreting Bank requirements and ciation recommended by the Regie's consul- reconciling with the Senegalese fiscal regime. tants in Annex 3 of the report referred to However, in early 1980 an OFERMAT consultant in paragraph (i). prepared a revaluation report, that has yet to be examined by auditors before being finally incorporated in the Regie's accounts. 6. (a) The Regie will, on the basis of the recom- See Chapter 4 - Traffic and Operations - mendations of its consultants, take all neces- of this Completion Report. sary steps to improve its operating efficiency and to achieve the following targets by its fiscal years 1973/74 and 1975/76: a.'- Agreements and Sections Commitments Action Taken Schedule 2: Plan of action Specific Operating Objectives 6. (a) cont. For actual results, please see 1970/71 1973/74 1975/76 paras. 4.10-4.14 and Table 4.2. Locomotive km per 286 290 290 day per locomotive in stock Wagon km per day 70 80 90 wagon in stock Availability of diesel 70 80 85 locomotives (%) Availability of 80 85 85 freight cars (%) Availability of 70 85 95 railcars (%) Average load of 18 23 28 freight car (other than phosphate and service) Turnaround freight car time per year: National traffic 66 80 96 Mali traffic 30 40 50 Staff productivity 171 203 233 (Traffic units per '000 employees) Agreements and Sections Commitments Action Taken Schedule 2: Plan of action 7 (a) The Regie will, from time to time, take Was not achieved in any of the target years all necessary steps to achieve an operating ratio of not more than 100% in its fiscal year 1973/74, 95% in its fiscal year 1974/ 75, and 91% in its fiscal year 1975/76. 00 - 39 - ANNEX 2 Details of procurement and implementation delays Procurement delays Appraisal Estimate Actual (i) (a) Bidding for rails & fittings Sept 72 Feb 73 (b) Receipt of rails & fittings Dec 73 July 75 (ii) (a) Bidding for workshop equipment Dec 72 July 73 (b) Receipt of workshop equipment Dec 73 Sept 75 (iii) (a) Bidding for new locomotives June 72 June 72 (b) Receipt of new locomotives July 73 Nov 73 (iv) (a) Bidding for locomotive spare parts April 74 n.a. (b) Receipt of locomotive spare parts Oct 75 Dec 75 Reasons for procurement delays (a) Heavy and cumbersome procedural formalities connected with procurement e.g. the first call for bids for rails and track materials elicited only a single bid. Though the price was reasonable, the Government decided to re-bid. For the second call there was also a single tender which was finally accepted resulting in a delay of 18 months. In general, the Government commission for contracts delayed finalization of contracts, even in cases where CFS had obtained prior approval for the expenditure. (b) Delays in single source procurement. Supply of locomo- tive spare parts were delayed because the parts have to come from the original manufacturer. In this case, the delivery period was nearly 24 months as against an average time lag of 12 to 14 months for equipment procured through competition. (c) Inadequate preparation for the bidding phase. Work- shop equipment, which consisted of several disparate items had.to be procured piecemeal from various sources. Due to inadequate advance preparation of specifica- tions, shortlisting of firms, etc., bids were called nearly 7 months late. The same lack of advance pre- paration is seen affecting procurement of locomotive spares, spares for track machinery, etc. 3.Implementation delays by project component 1/ (i) Track renewal - 12 months- (ii) Workshop modernization - 3 years (iii) Rolling stock modernization - 4 years (iv) Studies - 8 months to 2 years 1/ This delay was encountered despite the fact that the track renewal length was reduced from 175 km to 41 km. - 40 - Reasons for implementation delays (a) Track Renewal (i) Inadequate project preparation. The original project consisted of 175 km of track renewal to be completed in 3 years requiring an average rate of progress of over 80 km per year, (after allowing 1 year for the procurement phase) which, though possible in well-organized railways, was much beyond the capabilities of CFS. The staff was not trained for such intensive long term work, the track machin- ery was in a bad state needing repairs for which the spare parts were not available. These problems could have been foreseen at least in part, the magnitude of work could have been restricted to more moderate proportions commensurate with CFS construction capacity and the spare parts for track machinery ordered at the outset. (ii) Lack of local funds. Throughout the project, the availability of local funds did not match the project needs. The sleeper factory had to stop working due to lack of local funds. Labor for track renewal could not be engaged in sufficient numbers for the same reason. In fact this was an important factor in the reduction of track renewal from 175 km to 125 km to 41 km. (iii) Operational problems. CFS operations were sliding down steeply due to lack of motive power. Despite the supply of 6 new locomotives, CFS could not provide adequate motive power for service trains without which track renewal could not proceed apace. (iv) Unexpected problems. Unexpected subsoil weaknesses came to light during the project, slowing down progress. These could not have been foreseen except through elaborate, expensive and time-consuming pre-project investigations. (b) Modernization of workshop (i) Inadequate project preparation. Though the remodelling program was the subject of a study by an expert, the estimation of the scope of the work available at the time of apprasial was inadequate for a precise appreciation of the execution time involved. Consequently the plans had to be scrutinized further, almost up to January 1974, by more indepth studies before the project content could be more closely defined, and bid documents finalized. - 41 - (ii) Insufficient capacity for execution of major civil works. Even when the plans had been finalized, neither CFS nor the local contractors had enough engineering potential to carry out the major con- struction work involved in the remodelling of the sheds and layouts. If this had been foreseen, probably some foreign contractors could have been brought in to complete the works in time. But it is very difficult to estimate at present the additional cost this step would certainly have involved. However in retrospect, the adverse effect on locomotive availability due to delay in workshop remodelling, was less than anticipated as the spare parts arrived only in.December 1977. (c) Modernization of rolling stock (i) No specific reason could be attributed to this delay except that CFS general pace of work was slow and probably the initial forecasts did not take this factor into account. The delay in work- shop remodelling also contributed in a general way to the delay of this item. (d) Studies and Training All studies and consultants' services were delayed for varying periods due to a set of common causes: (i) no permanent counterparts for the experts; (ii) CFS did not provide the operations advisor with basic data which he needed so that recommendations made by him as he went along were not implemented and hence final conclusions were delayed; (iii) there was a one year delay in negotiating the transport study contract; and (iv) the workshop study was indeed very global in nature and had to be extended to get a suffi- ciently detailed assessment of the scope of the work involved and only after this action, bid documents could be drawn up. SENEGAL SECOND RAILWAY PROJECT Completion Report Project Costs (UiS$ mtition) Category N'Imber Description Appraisal estimate Revised estimate Actual foreign Local Total Foreign Local Total Foreign Local Total I. Track renevel 3.95 6.52 8.47 5.01 1.38 6.39 4.67 1.68 6.35 IT. Workshop rehab. 1teation and equipment 0.80 0.93 1.73 0.44 t.68 2.12 0.63 1 19 1.82 III. Moderntzation of freight cars 0.15 0.07 0.22 1.39 0.09 1.48 1.61 - 1.1 III. A. Equtpment for operations and stores - - - 0.11 - 0.11 0.10 0.02 0.12 IV. Constitancy services anti training 0.32 0.32 0.40 - 0.40 0.40 - 0.60 V. Consultancy services for trnnspnrt coordination 0.25 0.25 0.27 0.05 0.32 0.25 0.05 0.30 5.47 5.52 10.99 7.62 3.20 10.82 7.46 2.94 10.60 A. Motive power (6 locomotives covered by French financing 1.32 1.32 1.53 1.53 1.49 1.49 Grand Total 12.31 12.35 11.89 ' SENEGAL SECOND RAILWAY PROJECT COMPLETION REPORT Actual and Appraisal Estimates of Project Cost (CFAF and US$ million) ----------------Actual cot ------------------ ------------Appraisal estimate--------------- Project Item Comments Local Foreign Total Local Foreigt Total Local Foreign Total Local Foreign Total EFAF CFAF CFAF US$ US$ _ S$ CFAF CFAF CFAF US$ US$ US$ 1. Track Track renewal-175km reduced 401 1114 1515 1:68 4.67 6.35 1163 1016 2179 4.52 3.96 8.48 2. Workshop Rehabilitation and modified 285 150 435 1.19 0:63 1.82 243 205 448 0.93 0.80 1.73 equipment 3. Motive Power and Rollin& Stock 3.1 Locomotives (6) - 355 355 - 1.49 1.49 - 337 337 - 1.31 1.31 3.2 Roller bearings (1400) - 62 62 - 0.26 0.26 21 39 60 0.07 0.15 0.22 .- 3.3 Spare parts added - 274 274 - 1.15 1.15 - - - - - - 4. Eauipnent for Operations and Stores 4.1 Weighing bridges (2) added 4 8 . 12 0.02 0.03 0.05 - 4.2 Forklift added - 5 5 - 0.02 0.02 - 4.3 Telecom. equipment added - 11 11 - 0.05 0.05 - 5. Consulting Services and Training 5.1 Tariffs and accounting - 22 22 - 0.09 0.09 - 14 14 - 0.05 0.05 5.2 Workshops prolonged - 44 44 - 0.19 0.19 - 33 33 - 0.13 0.13 5.3 Operations - 15 15 - 0.06 0.06 - 17 17 - 0.07 0.07 5.4 Training abroad - 15 15 - 0.06 0.06 - 17 17 - 0.07 0.07 5.5 Transport coordination prolonged 12 60 72 0.05 0.25 0.30 - 65 65 - 0.25 0.25 Subtota 12 156 168 0.05 0.65 0.70 146 146 0.57 0.57 Crand Tota-l 702 2135 2837 2.94 8.95 11.89 1427 1743 3170 5.52 6.79 12.31 *- SECOND RAILWAY PROJECT Completion Report Category 1: Track Renewal As Originally Planned As Revised As Actually Implemented Explanation for Changes 1. Scope Track renewal = 175 km on the main line Track Renewal = 28 km Track Renewal: 28 km (PK 243.159 Reallocation in Sept 74 The above program included the Procured: to PK 271.159) was approved in order to: procurement of the following: (i) Rails - 150 km 13 km (PK 230.559 ( raise locomotive (W) Rails and fastenings - 175 km (ii) Fastenings =- 125 km to PK 243.159 availability from (left over from 54% to 657. by Additional items procured First Project) ohtaining spare after revision: parts for repairs (i) Equipment for welding and Procured: (ii) effect operating sleeper factory (i) Rails -50 km improvements (ii) Equipment for track renewal a) better telh- and maintenance (iii) Turnouts Additional items: b)mbetter tac T Rn Teh8ca kmservices (vTehia sevcsAs per list in column 2 m.iintensnce c) repairs to out of order wagos The estimated cost of new items was: CFAF (milli*n) a) Spare parts 0k for iscos e g 1 and wagons 22 b) Telecom. c) Track equip. o d) Cotingenciesrai 7. Cost (',IS$ million) (US$ million) Aculepedtr For,igo Local Total Foreign Local Total ASu cCmtua exrenitiorelY8 Pails (175 ho) 2. ',7 - 2.17 Rails (150 kin) 1.86 - 1.86 (oreCmr rvsonlF7 Sleapers,Fastenings 1.tJ8 - 1.51 Sleepers,Fastenings, 1.08 - 1.08 (uls$ million) (175 kcm) (125a k) IBR) CbS Total Ballast,transport, - 4.52 4.52 Ballast,transport, 1.11 1.33 2.44 5.0 .59.3D lnbor labor(28 1cm) -- 59 .563 GRANID TOTAL 3. Ss 4.52 8.47 TOTAL 4.05 1.33 5.38 Financing olan: Additional items: Bank -100Z foreign+74% local =$6.84m Equip for welding CFS -$1.13m & sleeper fac tory Track equip 0.96 0.05 1.01 Trunouts Tech. services lt in c m CRANm t TOTAL Nil with respect to revised estimate SECOND RAIEWAY PROJECT CompleLion Report Category II: Workshop Rehabilitation and equipment (US$ Million) As Originally Planned As Revised As Actually Implemented Explanation for Changes 1. Scope (i) Reconstruction and extension Deletions and additions not From the supervision reports, The main reason for increasing of shops: clearly identifiable, as there it is seen that a transformer the allocation under this - 1angars was no detailed description station was added. From an category appears to have been - 1,ogie Parking lot of the project content inspection at site, it is seen to provide a transformer - Washing lines in the appraisal report. that (i), (ii) and (iv) have station and switching tracks been completed. It is impossible with the traverser. (ii) Ac.uisition and installation to ascertain what was planned of handling equipment under item (iii) and how much of it was retained in the "iii) Replacement of overaged revised scope and finally machine tools implemented. In the new shed erected under this project an (iv) Traverser overhead electric travelling crane had been planned. Though the crane was imported in time, it has not yet been fixed, as the local civil works hv contractor failed financially and the litigation lasted till taecember 79. CFS has now decided to carry out the civil works en force account and install the crane. 2. Cost ( ---------US$ million - -- US$ million- US$ million - Foreian Local Total Foreign Local Total Foreign Local Total 0.74 0.89 1.63 0.44 1.68 2.12 0.63 17 - .82 0 Financing: Financing: IBRD -$1.40 IBRD $1.50 CFS - $0.23 CFS - a$0.32 Coat overrun: Nil with respect to revised estiomated cost. SENEL~M SECOND RAILWAY PRO-iECT Coepte tion Reort- CateRory lit: l. comotives an1 rolIng stock (irS$ ttillion) As originally planned As revised 1. Scope Part 1. Frpnch financed rartlon Part 1. No chanRe 'art 1. No ehnnge. Six diesel locomotIven of medium power (1?00 ITr) to replace over- Part Il. art 11. No chnnge. nged locomAiven. (1) Same as originally planned Part II. Bank financed_portion (lI) Spare partn for locootivei Modernizatlon or 350 bogles of frelght cari by replncement of 1400 plain (MI!) EqInp.ent for operation and bearing nxie boxes iith roller stores: benring axle bo~e. ( W) eighj bridges (h) forklift trucks (c) telecnmmulitnitnttns 2. Cost Part 1. CFAF 314 m nr $1.31 m Part 1. CFAF 345 m or $1.53 m 'art 1. Part 11. rart II. CFAF (m) US$ million ~ US$ million rwo locomotives spare Foreign Local Total pnrts (CCCE) ý 135 Foreign Local Total 0.14 0.07 0.21 Roller bearIniis 0.17 0.09 0.26 our LoComotives (CCCE, cnFAsCE, FAC) 1 220 Bnnk financing wan limIted to $0.19 m Spare pnrts 1.22 - 1.22 Totl 355 weigh bridges 0.03 - 0.03 ert 11. Forklift trueckh 0.02 - 0.02 CFAF (m) $m For. Loc. For. Lot. Telecomm 0.05 - 0.05 1oller 62.0 - 0.26 - Total 1.49 0-.09 i Š8 hänring Spare 249.3 - 1.15 - pnrts Weigh 8.0 4 0.04 0.01 byrldges rorklift 3.0 - 0.02 - trucko Teleramm.11.0 - 0.05 - 335.8 4 1.53 0.01 Total $1.53 million Cost over-tun rart i - 2.87. rnr 1! - n{lJw.r.t. re vis ed etmate SENEGAL SECOND RAILWAY PROJECT Category IV: Consultant services and training (US$ Million) As originally planned As revised As actually Implemented 1. Scope (I) Improvement of train operations No change Same as ortinally planned except that the number of (ii) Technical assistance for physical man-months for the workshop rehabilitation, reorganization expert and the transport co- and management of workshops and ordination study went up by training of staff in rolling 50% and 140% respectively. stock maintenance (iii) Tariff revision, organization of the commercial department, revaluation of fixed assets and improvement of accounting procedi.res (iv) Staff training abroad 2. Cost US$ m US$ m Foreign Local Total Foreign Local Total Foreign Local Total Operating advisor 0.07 - 0.07 0.07 - 0.07 0.06 - 0.06 Workshops 0.13 - 0.19 0.19 - 0.19 0.19 - 0.19 Tariff accounting 0.05 - 0.05 0.07 - 0.07 0.09 - 0.09 Training broad 0.04 - 0.07 0.07 - 0.07 0.06 - 0.06 Total 0.32 0.32 Q.40 0.40 0.40 0.40 Financial plan Cost over-run - nil w.r.t. Bank agreed to finance only $.29 m revised estimate Cr M SENEGAL SECOND RAILWAY PROJECT Completion Report Category V: Consultancy services for Transport Coordination and planning (US$ Million) As orignally planned As revised As actually implemented 1. Scope Employment of consultants to study and No change. No change. implement Senegal's transport coordination and planning to train staff and to effect improvements in data collection, investment planning etc. 2. Cost US$ million US$ million US$ million Foreign Local Total Foreign Local Total Foreign Local Total Transport Coordination Study 0.25 - 0.25 0.27 0.05 0.32 0.25 0.05 0.30 Bank agreed to finance $0.24 million Cost over-run: nil w.r.t. revised estimate 0 M - 49 - Table 3.4 SENEGAL SECOND RAILWAY PROJECT COMPLETION REPORT Actual and Expected Physical Completion Z of works Date of completion completed by Major works or of major works or expected completion components components date Actual Expected l.Track 1.1 Supply of rails,fastenings,ballast,etc. 7/75 12/74 60% 1.2 Laying of 175 km of rails 6/77.L/ 6/76 5% 2.Workshop 2.1 Modernization 8/78 6/75 0 2.2 Equipment 9/75 6/74 50% 2.3 Transformator station 10/78 6/74 0 3.Motive Power and Rolling Stock 3.1 Locomotives 11/73 mid/73 100% 3.2 Roller bearings(1400), delivery 2/76 6/73 0 3.3 Roller bearings, installation 12/78 12/74 0 3.4 Spare parts 12/77 - - 4.Equipment for Operations and Stores 10/75-2/77 - - 5.Consulting Services and Training 5.1 Tariffs and accounting 2/74 6/73 20% 5.2 Workshops 6/76 6/74 30% 5.3 Operations 1/74 6/73 50% 5.4 Training abroad 7/73 6/73 90% 5.5 Transport coordination - 6/74 30% 1/ Laying of 13 and 28 km of new track completed Source: CFS and Bank Supervision Mission - 50 - Table 3.5 SENEGAL SECOND RAILWAY PROJECT COMPLETION REPORT Cumulative Estimated and Actual Disbursements (Us$ 000) IBRD/IDA Fiscal Year Estimated Actual and Quarter Ending as of May 31, 1972 1972/73 December 31, 1972 110 - March 31, 1973 160 - June 30, 1973 1,770 - 1973/74 September 30, 1973 4,040 - December 31, 1973 5,660 - March 31, 1974 6,500 - June 30, 1974 7,880 1,986 1974/75 September 30, 1974 8,430 2,639 December 31, 1974 8,970 2,896 March 31, 1975 9,600 3,532 June 30, 1975 - 4,742 1975/76 September 30, 1975 - 5,415 December 31, 1975 - 6,036 March 31, 1976 - 6,100 June 30, 1976 - 7,000 1976/77 September 30, 1976 - 7,500 December 31, 1976 - 7,800 March 31, 1977 - 8,100 June 30, 1977 - 8,600 1977/78 September 30, 1977 - 8,800 December 31, 1977 - 8,800 March 31, 1978 - 9,100 June 30, 1978 - 9,200 1978/79 September 30, 1978 9,430 December 31, 1978 9,430 9,430 9,430 1979/80 September 30, 1979 9,430 December 31, 1979 9,430 March 31, 1980 - 170 9,430 SENEGAL SECOND RAILWAY rROJECT Complertion Report Financing Plan (OTS$ Million) Category Number Description Appraisal stage Revised estimate Actual expenditure Total Bank CFS Total BAk CrS Bank CFS Total I. Track reneval 7.97 6.84 1.13 6.39 5.55 0.37 5.90 0.65 6 35 It. Workshop rehab. and equipent 1.63 1.10 0.23 2.12 1.61 0.36 1.50 0 32 1.82 ITT. Mdernlration of freight care (1400 roller hearings)! 0.21 0.19 0.02 1.48 1.33 0.02 1.41 - 1 41 TII. A. Equipment for operation and stores - - - 0.11 0.10 - 0.11 0.01 0.12 IV. Consultancy services and trainIng 0.29 0.29 - 0.40 0.36 - 0.40 - 0.40 V. Consultancy services for trannport coordination and planning 0.24 0.24 - 0.32 0.24 0.05 0.28 0.02 0.30 VT. unallocated 0.65 0.64 0.01 - 0.41 - - - - Total 10.99 9.60 1.39 10.81 9.60 0.80 9.60 0.80 10.40 A. Motive power (6 locomotives covered by French financing) 1.32 - - 1 53 - - - 1.69 Grand Total 12.31 12.34 11 S9 一52一 胤．_.____&&，兀醒 劉雲乏中合黑久名黑買1露6州誡”馴寫～：萬啊；震名斗萬不 州認劊二一『，I么寫1二～l一～―門”‘網 哺 劊萬實劊，名，咸乏他t需黛劍眾“劉以：”認以：讓e需之丰 馴造劉：一“1::-：一，&，一】”-- ―〕斗業““日‘三―呈呈’―邑‘呂―日’:&&―召―果界“& , 仁 ―〕“劉：&‘二、。：-*：、：。一二”·“ 暱呂劃邑藝”“三―還邑“―呈’日―&&&&―日―畏”&& 參 嗡 ( ｝〕“自，弄”二屆―：實州；·丑―“寫：一―日―日三·” ｝〕‘呂―邑”日’日―,&:!”一三―.&&“徑馴”―丰’&& 安 !―〕·日劉：日寫二劉：：魚―禁：戴”;；·j”登“：三 , 目 . 〕！!‘日‘,&’日“黑―旦疲“,&&&&&“冬“，三―&&“日 已華盒F_ 豐註言江―日．..-.，。．_._,___.__ 藝〕〕夢〕呈”丑，日處’&&:―日弄“―熙二近―三‘&&―三―波’：三 ,“編 呂r ．幼－ 自寫戶，口．& !:-i三引至”呈盔；日―釜莽規寫“馴呂”&―三―日“&& 騙勾斤 •戶嗎 卜L ki，目 實：: 萬―屆日韭日呂‘’日―至至”！賽“呂―日’&&―日―哉日“日 ！〕〕〕〕〕：&&&―呈“&&&“荊丑“:&”三作日”&J ―〕’”三”&&&-&&,’二”吃“&&，三！&&&”三1 要，&&’三”！日―呂舌”呂’&&&&&:，日―丰，日”“〕 召邑＿百百邊l, 、，,！〕！二！:_！〕！!l：【 ！州讓＿〔！斤中中〕〕〕； SENEGAL SECONDRAILWAY PROJECT COMPLETIO: REPORT Operating Objectives and Actual Performance --- 11/ --- Actual ------------- Objectives --Actual--- Objective IL-Actual--- FY7 FY72 FY73 FY74 FY74 FY75 FY76 FY76 FY77 FY78 4/ Loc6rotive-km per day per locomotive 176 137 136 125 146 115 137 in stock/ ervice) (286) (305) (263) (245) (290) (279) (293) (290) (299) (317) Wagon-km per day per wagon in stock 70 60 65 77 .80 66 51 90 46 n.a. 5/ Availability of diesel locomotives 70(56r(56) (59) (55) 60 (49) (50) 85 (45) (49) Availability of freight cars (%) 80 n.a. n.a. n.a. 85 n.a. n.a. 85 n.a. n.a. Ava,ilability of railcars 70 64 57 51 85 48 41 95 54 37 Average load of freight car (other 18 22 29 24 23 24 25 28 25 26 than phosphate and service) Turnaround freight car time per year: National traffic 66 2/ 2/. 2/ 80 2/ 2/ 96 2/ 2/ Mall traffic 30 2/ 2/ 2/ 40 2/ 2/ _00 2/ 2/ Staff productivity (Traffic units 171 170 171 190-4/ 203 161 156 233 165 160 per '000 employees) l/ Source: Appraisal Report; also FY 1971 fif,ures are the starting point for the objectives. 4/ While originally designated as loco-kn, per locomotive 2/ Fo reliable figures available in stock, both the base year figure (1971) and the Temporary improvement due to (a) high international targets refer to loco-km per locomotive in service. trafficand (b) decrease in staff (FY71=3544; Ff73 5/ The targets arn for availabilities with respect to 3163) the number of locomotives "in service." However, CFS 9.4. has been calculating availebilities with respect to Source: Senegal Railway the number of locomotives "in stock." The figures shown in brackets relate to locomotives "in stock." May 1978 - 54 - Uabl 184.3 PECONT RMU. AY PPOJECT Selected OperatLnS StatistLce 1971/72 - 1977/78 1971/172 1972/73 1973/74 1974/75 1975/76 196/177 1977178 1. fl1E hout-b 1,034 1,034 1,034 1,034 1,034 1,934 1.034 11. T~AFIC Pacenger numbers (000) 2.759 2,449 2,784 1,882 1,850 1,760 1.449 Pag~r-k. (million) 241 227 219 193 186 t32 153 Average journey (km) 87 92 96 103 101 103 105 Freight tons (000) 1,910 1,906 1.887 1,886 1,606 1,558 1,733 Freight ton-km (million) 341 353 383 359 330 306 342 Averaga haul (km) 179 185 203 190 205 196 197 Traffic units (ton-km plus pass- km) (million) 582 580 602 552 516 488 495 III. TRAFFC DESITY Paseger-k. per route-km (000) 233 220 212 187 180 176 148 Preight net ton per route-km (000) 1,847 1,843 1,825 1,824 1,553 1,506 1,676 I. OPEATImg Train-km - passenger traina (000) 1,942 1,822 1,780 1,362 1,382 1.372. 1,218 - phosphate trains (000) 259 270 271 293 233 258 403 - other freight trains (000) 630 976 713 678 721 467 504 - total (000) 2,831 3,068 2,764 2,333 2,336 2,097 2,126 Motive pnwer -km -locomotive (000) 1,926 1,799 1,733 1,510 1,761 1,391 1,553. -railears (000) 1,275 1,117 1,031 783 718 766 702' -total (000) 3,201 2,916 2.764 2,293 2,479 2,085 2,497. " r,berf locomotites 'and rollig stock - 16otives - 30 36 35 33 33 33 31 -hters 26 26 26 26 26 26 27 - railears 12 12 11 11 11 11 9 -trailer& 28 28 28 28 28 28 28 - ~cachec 96 96 96 96 96 96 96 - 716 716 716 716 716 716 716 - 2aline locootives 55.6 58.7 54.5 49.4 50.3 45 48 - ~gers 79.9 75.4 67.1 64.5 66.9 39 37 - raieare 63.9 56.8 51.1 48.0 41.0 54 49 - trailers n.a. n.a. n.a. n.a. n.a. ne,&. n... - ccet n.a. n.a. n.a. n.a. n.a. n.a. n.a. - gl n.8. n.a. n.a. n.&. n.a. n.a. a.. Average journey per day in service (km) - mainline locomotives 305 263 245 279 293 299 317 - railcars 465 463 . 443 416 421 455 371 -va 60 65 78 66 57 46 n.a. Average load of wagons (tons) - phosphate traffic 46 46 46 47 47 47 47 - other frelght traffic 22 29 24 24 25 25 26 NuTber of waj;ons loaded - phosphate traffic 30.423 31,312 31.100 31,391 25,412 26,530 28.861 - other freight traffic 21,315 20,350 18,573 17,587 15,852 13,589 13.306 - total traffic 51.738 51,662 49,673 48,978 41,264 40,119 42,167 Wag2nturnaroud time (days) - phosphate traffic: Taiba (112 km) 0.3 n.a. 0.8 n.a. 0.4 0.4 0.4 Lam-Lam (87 km) 0.6 n.a. 0.6 ..a. 1.8 .a.n - national traffic -- n.a. - D.A. n.a. - international traffic n.a. 2211 29 n.&. - petroleum traffic - - n.a. - 15/ 16 n.a. Accidents uber of breakdouna - locomotlves 293 305 361 293 243 217 189 - reilcars 69 49 47 44 61 64 35 V. OPERATINC EFFITC1ENCY n;jeäjr-kUI 'Pr train/railcar-km 124 125 123 142 135 13 126 Freight net ton-ki per train-km 384 283 389 369 346 442 377 Freight net ton-km per freight-car avallable (000) n.. n.a. n... n.a. n.*. ".a. n.*. L.ocomotive-km per mainline loromoti- nvilahl 113,800 79,600 81,000 88,410 7b,300 92,700 113,424 Railcar-k. per ralcar av.alable 188,700 188,900 186,800 152,000 163,000 29,000 210,811 Ion-ka per loc,motive horspower ..0aai le 20,055 20,290 21.347 2,316 12,b63 16.03 19.719 Tons per locomtv hor.epower vealinhl. 112 109 15 112 96 85 100 Gr-na tou-.un to net ton-km fr , , ;t ra It .. .oly) n.e. i.n . n.a. n.a. .n. t,•d, n.e. I.tut,, we ot,r, per l.inn km... 154 119 2A l'- 14. 155 122 ./ Ctl stin.aten. It o 06/20/PO 11:55 AM SENEGAL SECOND RAILWAY PROJECT--COMPLETION REPORT TABLE I FORECAST AND ACTUAL INCOME ACCOUNT 1972-1979 (IN CFAr MILLION) FISCAL YEARS ENnING JUNE 30 1972 1972 1973 1973 1974 1974 1975 19775 FcSr ACT FCST ACT FCST ACT FCST ACT OPERATING REVENUE A. PASSENGERS & BAGGAGE 1. INTERNATIONAL 87. 76. 92. 66. 95. 99. 95. 96. 2. NATIONAL 661. 588. 6GB. 504. 678. 517. 6q2. .379. 3. TOTAL PASS. & BAGG. 748. 664. 760. 570. 773. 61G. 7785 574. B. FREIGHT 4. INTERNATIONAL 825. 790. 875. 862. 1005. 1035. 1129. l058. NATIONAL 5. PHOSPHATE 443. 433. 423. 579. . 723. Ln 6. GROUNDNUT 350. 20G. 153. 109. 2!0. Un 7. OTHER 193. 162. 223. 244. 326. I 8. TOTAL NATIONAL 986. 801. 1094. 799. 1135. 932. 1181. 1289. 9. TOTAL FREIGHT 1811. 1591. 19G9. 1661. 2140. 1967. 2310. 23417. 10. MISCELLANEOUS 124. 89. 129. 80. 141. 131. 153. 52. 11. TOTAL OPERATING REVENUE 2683. 2344. 2858. 2311. 3054. 271/1. 3124 . 2973. OPERATING EXPENSES 12. STAFF 1803. 1912. 1780. 1999. 1769. 2046. 1750. 2447. 13. FUEL & MATERIALS 593. 309. 625. 335. 667. 332. 687. 868. 14. OTHER CHARGES 173. 151. 154. 171. 15. TAXES 61. 5C. 13. Pr. 16. TOTAL WORKING EXPENSES 2396. 2455. 2405. 2541. 2436. 2545. 2437. 3572. 17. DEPRECIATION 526. 254. 552. 271. 629. 279. r42. 291. 18. TOTAL OPERATING EXPENSES 2922. 2709. 2957. 2812. 3065. 2824. 3073. 38G3. M ---------------------------------------- ------------ ----------------------- ---------- ----------------- ------------. 0c 0- 19. NET OPERATING REVENUE(LOSS) -239. -3G5. -9q. -502. -11. -110. 162. -890. It 20. LESS- INTEREST CHARGES 142. 113. 179. 129. 235. 142. 302. 46. 21. NET INCOME(DEFICIT) -3p.. -479. -278. -630. -246. -252. -14). -0 22. EXCEPTIONAL REV.(LOSS) IN FY 26. -i9. 22. -22. 23. GOVT. OPERATING SUBSIDY 300. 24. FORCE ACCOUNT WORK 191. 107. 150. 54. 25. NET BOOK PROFIT (LOSS) -381. -261. -278. -542. -246. -80. -140. -GO-.1 26. EXCEPTIONAL REV(LOSS) IN PREV FYS -iso0. 27. APPROPRIATION FOR WRITE OFFS.E1C. -704. 28. NET ACCOUNTING PROFIT(LOSS) -381. -261. -278. -542. -246. -80. -14'0. -2817. RATIO ANALYSIS 1. STAFF EXPENSES/TOTAL WORKING EXPENSES 75. 78. 74. 79. 73. 80. 72. 69. 2. WORKING RATIO 89. 105. 84. 110. 80. 94. 75. 120. 3. OPERATING RATIO 109. 116. 103. 122. 100. 104. 95. 130. 4. AVG. NET FXD ASSETS IN USE 14350. 12437. 15535. 12436. 16115. 12474. 1701q. 13633. 5. PATE OF RETURN ON AVG NFA UNIT REVENUES/COSTS(CFAF/OOOTK) 1. FREIGHT REVENUE/TK(CFAF/OOOTK) 5311. 4666. 5500. 4705. 5501. 5136. 5500. 6538. 2. PASSENGER REVFNIJF/PK(CFAF/OOOPK) 2770. 2755. 2781. 2511. 2791. 2913. 2789. 2974. I 3. TOTAL REVEtlUE/TK(CFAF/OOOTK) 4188. 3875. 4325. 3847. 4374. 4291. 4418. 5292. L 4. WKG. EXPENSES/TK(CFAF/OOOTK) 2951. 3235. 2821. 3447. 2656. 3399. 204. 1433. m 5. OPTG. EXPENSES/TK(CFAF/OOOTK) 3921. 4218. 3811. 4381. 3658. .4229. 3486. 6471. RATE OF RETURN ONLY SHOWN IF POSITIVE FORECASTS IN YEARS 1977-1979 FROM THIRD RAILWAY PROJECT APPRAISAL REPORT 1980 ESTIMATES BASED ON PRELIMINARY OPERATING RESULTS THROUGH FEB. 1980 ACTUALS IN YEARS 1976-1979 BASED ON UNAUDITED/PRELIMINARY OPERATING RESULTS Od P- tQ- 1976 1976 * 1977 1977 1978 1978 1979 1979 FCST ACT FCST ACT FCST ACT FCST ACt OPERATING REVENUE A. PASSENGERS & BAGGAGE 1. INTERNATIONAL 99. 113. 130. 123. 138. 173. 1,16. 169. 2. NATIONAL 685. 610. 590. 676. 553. 588. 523. 499. 3. TOTAL PASS. & BAGG. 784. 723. 710. 799. 691. 761. 669. 66s. B. FREIGHT 4. INTERNATIONAL 1124. 1373. 1421.. 1374. 1577. 1683. 1G92. iri2. NAT IONAL 5. PHOSPHATE 781. 920. 715. 929. 830. 970. 797. 6. GROUNDNUT 242. 282. 190. 294. 211. 307. 59. 7. OTHER 156. 187. 131. 171. 14G. 15 . 161. 8. TOTAL NATIONAL 1258. 1179. 1389. 1036. 1334. 1187. 1433. 1C25. 9. TOTAL FREIGHT . 2382. 2552. 2810. 2410. 2971. 2870. 3125. 2687. 10. MISCELLANEOUS 157. 52. 90. 122. 100. 113. too. 297. 11. TOTAL OPERATING REVENUE 3323. 3327. 3610. 3331. 3762. 3744. 3894. 3652. OPERATING EXPENSES 12. STAFF 1677. 2478. 2694. 2401. 2822. 2402. 2964. 2416. 13. FUEL & MATERIALS 698. 685. 700. 646. 900. 741. 960. 1187. 14. OTHER CHARGES 224. 210. 259. 225. 266. 230. 227. 15. TAXES 12. 21. 16. 40. 69. 55. Gn. 16. TOTAL WORKING EXPENSES 2375. 3399. 3625. 3322. 3987. 3478. 4209. 3898. 17. DEPRECIATION 659. 331. 345. 376. 455. 420. 529. 430. 18. TOTAL OPERATING EXPENSES 3034. 3730. 3970. 3698. 4442. 3896. 4738. 4328. 19. NET OPERATING REVENUE(LOSS) 289. -403. -360. -367. -680. -154. -844. -676. 0O w 20. LESS- INTEREST CHARGES 309. 71. 8l. 84. 314. 174. 362. 174. 21. NET INCOME(DEFICIT) -20. -474. -441. -451. -994. -328. -1106. -950. 22. EXCEPTIONAL REV.(LOSS) IN FY -43. -485. -664. -562. 23. GOVT. OPERATING SUBSIDY 300. 300. 300. 300. 300. 638. 400. 24. FORCE ACCOUNT WORK 44. 53. 34. 167. 25. NET BOOK PROFIT (LOSS) -20. -130. -184. -583. -694. -658. -568. -845. 26. EXCEPTIONAL REV(LOSS) IN PREV FYS -86. 213. 27. APPROPRIATION FOR WRITE OFFS,ETC. -94. -190. 28. NET ACCOUNTING PROFIT(LOSS) -20. -310. -184. -560. -694. -658. -568. -845. RATIO ANALYSIS 1. STAFF EXPENSES/TOTAL WORKING EXPENSES 71. 73. 74. 72. 71. 69. 70. 62. 2. WORKING RATIO 71. 102. 100. 100. 106. 93. 108. 107. 3. OPERATING RATIO 91. 112. 110. Ill. 118. 104. 122. 119. 4. AVG. NET FXD ASSETS IN USE 17901. 14714. 14982. 15039. 15908. 15706. 17198. 15819. 5. RATE OF RETURN ON AVG NFA UNIT REVENUES/COSTS(CFAF/OOOTK) 1. FREIGHT REVENUE/TK(CFAF/OOOTK) 5501. 7733. 6315. 7825. 7777. 8295. 7774. 8752. 2. PASSENGER REVENUE/PK(CFAF/OOOPK) 2800. 3887. 2518. 4390. 3839. 5212. 38'15. 4948. 3. TOTAL REVENUE/TK(CFAF/OOOTK) 4440. 6347. 4842. 5519. 6516. 7320. G5R7. 7500. 4. WKG. EXPENSES/TK(CFAF/OOOTK) 2352. 4802. 3706. .4900. 5021. 4882. 5146. 5466. 5. OPrG. EXPENSES/TK(CFAF/OOOTK) 3331. G587. 4986. 6780. 7094. 7069. 1307. 8819. I RATE OF RETURN ONLY SHOWN IF POSITIVE .FORECASTS IN YEARS .1977-1979 FROM THIRD RAILWAY PROJECT APPRAISAL REPORT 1980 ESTIMATES BASED ON PRELIMINARY OPERATING RESULTS THROUGH FEB. 1980 ACTUALS IN YEARS 1976-1979 BASED ON UNAUDITED/PRELIMINARY OPERATING RESULTS (D L, 08/20/80 11:19 AM SENEGAL SECOND RAILWAY PROJECT--COMPLETION REPORT TA B LE 2 SOURCE AND APPLICATION OF FUNDS STATEMENT (IN CFAF MILLION) FISCAL YEARS ENDING JUNE 3Q 1972 1973 1974 1975 1976 1977 1978 TOTAL AUD AUD AUD AUD UNAUD UNAUD EST 73-78 SOURCES I. CASH GENERATION FROM OPERATIONS OPERATING REVENUE 2344. 2311. 2714. 2973. 3327. 3331. 3744. 18400. WORKING EXPENSES 2455. 2541. 2545. 3572. 3387. 3322. 3478. 18845. TOTAL CASH GENERATION -Ili. -230. 169. -599. -60. 9. 266. -145. EXCEPIIONAL REV(LOSS) 217. 87. 172. 32. 44. 53. -121. 267. NET CASH GENERATION FROM OPERATIONS 106. -143. 341. -567. -16. 62. 145. -178. II. SUBSIDIES GOVERNMENT Ln OPERATING SUBSIDIES 300. 300. 300. 300. 1200. CAPITAL SUBSIDIES 562. 188. 750. OTHIER CAPITAL SUBSIDIES 90. GO. 60. III. OTHER EXCEPTIONAL SOURCES(USES) DEC. IN FI/ED & OTHER ASSETS i. 1. 4. 5. 2. 12. GAIN(LOSS) ON DISPOSALS/ -7. -68. 3. 34. 2. -29. WRIIEOfFS OF FIXED ASSETS (INC) IN PROVISIONS FOR WRITEOFFS -1. -708. -94. -190. -992. ON CURRENT ASSE TS OTHER PROFITS(LOSSES) PREVIOUS YEARS 284. -86. 213. 411. TOTAL OTHER SOURCES -7. -68. -420. -142. 30. 2. -598. IV. LOANS CONV OF OVERDRAFIS TO LTD(GOVT) 3827. 500. 879. 5206. IDA CREDIT 96-SE 307. 146. 103. 13. 262. IDA CREDIT 314-SE 50. 709. 759. IERO LOAN 835-SE 319. 608. 307. 158. 1392. ILRD tOAJ 1518-SE CCCE 1972 LOAN 56. 15. 176. 53. 244. FAC CREDII 135. 135. a SUPPI IFR CREDI IS(COFACE) 45. 438. 102. 585. TOIAL LOANS 363. '3988. 329. 1274. 1108. 1624. 2GO. 8583. V. Eu J 7 2300. 2300 TOTAL SOURCES 552. 3905. 2902. 587. 1250. 2578. 895. 12117. APPL T CAT TONS I. INVESTMFNTS( TNCREASE IN rIXED ASSETS) FIrJANCEO rOM- IDA/l[RD FUNDS 162. 17. 919. 275. 534. 335. 125. 2205. FINANCET FROM OTHER EXTERNAL FUNOS 146. 75. 176. 233. 1000. 1484. FINANCFL) fROM INTERNAL FUNOS 328. 260. 315. 26-4. 270. 136. 34. 1279. TOTAL INVESTMENTS G36. 352. 1410. 772. 804. 1471. 159. 49c1. 1I. DEBI srPVICE INTEREST CHArGE7S i13. 129. 142. 4c. 71. 84. 174. <l6. PPINCIPAL REPAYMENTS 56. 2300. 24. 37. 218. 2579. PENSION rUND AMORTIZATIONS 110. 1 1. TOTAL DEST SEPVICE 169. 129. 2442. 46. 205. 121. 392. 3335. III. INCYEFASE IN OTHER ASSETS 18. IV. NET WORKIN6 CAPITAL VARIATIONS +(-) -253. 3424. -968. -231. 241. 986. 344. 379r9. TOTAL APPLICATIONS 552. 3905. 2902. 587. 1250. 2578. 895. 22117. ?NET VARIAT IONS IN WORKING CAPITAL I. INCRFASE(DECREASE) IN CURRENT ASSETS CASH AND BANvS -199. 58. 299. -374. 393. -40. 300. S36. ACCOUTS RECEIVARLE 220. -200. 3. 140. -140. 199. 80. 82. LESS-PROV DOUITFUL ACCOUNTS -1. -244. -94. -190. -528. NET INC(DEC) ACCOUNTS RECEIVABLE 219. -200. 3. -104. -234. 9. 80. -44g. INVENTOPIES 18. 45. . 5. 7G. 70. -49. 805. 952. LESS-PROV OPSOLETE STOCKS -460. - A460. NET TIC(DEC) INVENTORIES 18. 45. 5. -384. 70. -49. Ro. 492. SJSPENSE ACCOUNTS 10. -3. 31. 146. l64. -322. 26. TOTAL VARIATION 4(-) IN CURRENT ASSETS 38. -87. 304. -831. 375. 84. <G3. 70,. .II. INCFASE>(DECREASE) IN CURRENT LIABILITIES (NOT INCLluDING CURRENT MATURITIES OF LWIG TERM DFET) OVERDRAFTS P ADVANCES 471. -3558. 570. 211. 115. -944. -3(303. ACCOUNTS PAYArltE -180. -136. 885. -843. . 48. 12. -353. -357. SUSPFIJSE AcCOUNTS 183. -183. 29. -29. 872. 872. TOT VARIATION 4(-) CURR. LIABILITIES 291. -3511. 1272. -600. 134. -902. 519. -308 NEi T VARIATIONS +(- ) IN WORKING CAPITAL -253. 3424. -9(38. -231. 24 1. 98G. 344 . 3796. r WORKING CAPITAL POSITION AT JUNE 30 CURREINT ASSETS CASH AND RANKS 122. 180. 479. 105. 498. 458. 758. ACCOUNTS RECEIVABLE(NET OF PROVISIONS) 1261. 1061 1064. 960. 726. 735. 815. INVENTORIES 567. 612. 617. 233. 303. 254. 1059. SUSPENSE ACCOUNIS 10. 7. 38. 184. 348. 26 ------------------------------------- ---------- ---------- ---------- --------- ---------- ----------- ----------- IOTAL CURRENT ASSETS 1950. 18G3. 2167. 1336. 1711. 1795. 2658 CURRENT LIABILITIES OVERDRAFTS AND ADVANCES 3603. 45. 615. 829. 944. ACCOUNTS PAYABLE 978. 842. 1727. 884. 932. 974. 621. SUSPENSE ACCOUNTS 183. 29. 872. ------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- 4581. 1070. 2342. 1742. 1876. 974. 1493. CURREN[ MATURIfIES 125. 749. 205. 230. ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- --- ------ TOTAL CURRENT LIABILITIES 4581. 1070. 2342. 1867. 2625. 1179. 1723. NET WORKING CAPITAL -2631. 793. -175. -531. -914. 616. 935. 01 OQ(D (D OG/20/80 22:58 AM SENEGAL SECOND RAILWAY PROJECI--COMPLETION REPORT TA B LE 3 BALANCE SHEET AS AT JUNE 30 (IN CFAF MILLION) 1972 1973 1974 1975 1976 1977 1978 AUO AUD AUO AUD UNAUD JNAUD EST ASSETS CURRENT ASSETS CASH & BANKS 122. 180. 479. 105. 498. 458. 758. ACCOUNTS RECEIVABLE 1262. 1062. 1065. 1205. 1065. 1264. 1314. LESS-PROV. FOR DOUBTFUL ACCOUNTS -1. -1. -1. -245. -339. -529. -529. NET ACCOUNTS RECEIVABLE 1261. 1061. 1064. 960. 726. 735. 8i5. INVENTORIES 567. 612. 617. 693. 763. 714. 1519. LESS-PROV FOR OBSOLETE STOCKS -460. -460. -460. 4 0. - - - - - - - .- - - - - - -.- - - - -- - - - - - - - -.-.. . . . . . . . - - - - - - - - - --- -.-- - - I-- - - - NET INVENTORIES 567. 612. 617. 233. 303. 254. 1059. SUSPENSE ACCOUNTS to. 7. 38. 184. 348. 26. TOTAL CURRENT ASSETS 1950. 1863. 2167. 1336. 1711. 1795. 2658. II. INVESTMENIS(JET OF WRITE-DOWNS) 6. 6. t0. 6. 6. 6. G. III. FIXED ASSETS IN USE -GROSS VALUE 14789. 15009. 153-17. 17825. 18t26: 19182. 20293. LESS-ACCUMI-ULA1ED DEPRECIATION 2327. 2598. 2809 3097. 3462. 3838. 4258. TOTAL FIXED ASSETS IN USE 12462. 12411. 12538. 14728. 14664. 15344. 16035. WORK IN PROGRESS 636. 768. 1840. 134. 637. 1052. t00. TOTAL NET FIXED ASSETS 130918. 13179. 14378. 14862. 15301. 16396. 16135. IV. OTHER ASSETS 14. 13. 9. 4. 2. TOTAL ASSETS 150S4. 15048. 165G9. 162t7. 17027. 18201. 1Pitt)I. LIABILITIES AND EOUITY A. LIABILITIES 1. CURRENT LIABILITIES OVERORAFT & AOVANCES 3603. 45. 625. 829. 944. ACCOUNIS PAYABLE 978. 842. 1727. 884. 932. 974. 621. SUSPENSE ACCOUNTS 183. 29. 872. 4582. 1070. 2342. 1742. 1876. 974. 14,13. CURRENT MATURITIES OF LrDEBT 125. 749. 205. 2:30. TOTAL CURRENT LIABILITIES 4581. 1070. 2:12. 1867. 2625. 1 179. 1723. II. LONG TERM LIABILITIES NET PENSION LIABILITY 171 168 . 1681. 1681. LONG TERM DEBT GOVFRHMENT 586. 4413. 2113 2113. 2613. 3.192. 3-192. IDA CREDIT 96-SE 1975. 2 1.1. 2224. . 2237 2237. 2237. 2 198. IDA CREDIT 314-SE 50. 759. 759. 759. 759. IBRO LCAN 835-SE 319. 927. 1234. 1356. IBRO LOAN 1518-SE CCCE 1972 LOAN . 56. 71. 247. 300. 298. 276. 233. F A C CREDIT 1:35. 135. 135. 135. SUPPLIER CREDITS(COFACE) 45. 23. 446. 448. OIHER TOTAL LONG TERM DEBT 2617. 6605. .1634. 5908. 6992. 8578. 8621. TOTAL LONG TERM LIABILITIES 2617. G605. 4634. 7699. 8673. 10260. 10302: LESS CURRENT MATURITIES -125.. -749. -205. *230. NET LONG TERM LIABILITIES 2617. 6605. 4634. 7574. 7924. 10055. 100172. III. OTHER PROVISIONS FOR LOSSES 10. 10. 10, 9. TOTAL LIABILITIES 7208. 7685. 6986. 9441. 10549. 11234. 11804. B. EQUITY EQUIVALENT I. CAPIAL 8999. 8999. 8999 9012. 9012. 9574. 9762. II. SUBSIDIES-GOVERNMENT 137. 137. 13. -FED 523. 523 523. 523. 523. 523. 523 -FIDES-FAC 266. 326. 326. 326. 326. 326. 326. TOTAL SUBSIDIES 926. 986. 862 849. 849. 849. 649 LESS TRANSFER TO ACC REVENUES -124. 224. -253. -282. -312. NET SUBSIDIES 926. 862. 862. 625. 596. 567. 5:17. 111. RESERVES RESERVE FOR RENEWALS 527. .527. 527. 527. 500. 1000. RESERVE FOR REVAI.UAIIONS 320. 320. 320. 320. TOTAL RESERVES 847. 847. 847. 8.17. 500. 1oo00. LESS TRANSFER 10 ACC. REVENUES 847. NET RESERVES 847. 847. 500. 1000 IV. ACCUMULAFED REVENUES ACC. REVENUES(LOSSES)-BEG OF YEAR -2GG4. -2925. -3344. 3425. -5461. 0:1U. -6873 ADD-1RANSFER FROM SUBSIDIES 124. 224. 253. 282. 312. ADD-TRANSFER FROM RESERVES&PROVISIONS 857. LESS-TRANSFER TO RESERVES & PROVISIONS -500. -509. ADD(LESS) BOOK PROFIT DURING YEAR -261. 543. -RI. -3117. -598. -372. 449. ACC. REVENUES(LOSSES)-END -OF YEAR -2925. -3314. 3125 54i1. -6030. -6873. 1801. ADD-GOVERNMENI OPERATING SUBSIDIES 2300. 2G00. 2900. 3200. :1500. NET ACC. REVENUES(LOSSES) -2925 -3344. 1125. 2861. -3130. 3673 4301. TOTAL EOUITV EGUIVALENT 7847. 7364. 9583. 677G. 6478. 6968. 698. TO1AL LIABILITIES AND EQUITY 15055 15049. 16569. 16217. 17027. 18202. 18802. TOTAl S MAY NOT EOJAL DUE TO ROUNDING RATIO ANALYSIS CURRENT RAIIO(%) 43. 174. 93. 72. 65. 152. 154. NET I T L.IABILITIES/ITOTAL EOUITY(%) 33. 90. 48. 112. 122. 144. 144. (D (D 06/20/80 I I:55 AM SENEGAL SECOND RAILWAY PROJECT -COMPLE[lON REPORT TAB L. F 1 UNIT REVENUE/COST ANALYSIS FISCAL YEARS rNI)ING JUNE 30 1972 1972 1973 1973 197.1 197-1 1975 1975 FCST ACT FCSI ACT FCS1 ACT FCST ACI TRAFFIC (MILLION PK/TK) PASSENGERS 270. 241. 273. 227. 277. 219. 279. 193. FREIGHi--INTERNATIONAL 133. 129. 141. 139. 162. 190. 182. 156. --NATIONAL-PHO0SPHATE 133. t55. 14t. 160. 148. 156. 15G. tG2. -GROUNDNUT 41. 24. 41. 18. 43. 12. 45. 20. -OTHER 14. 33. 35. 36. 36. 25. 37. 21. -TOTAl. 208. 212. 217. 214. 227. 193. 238. 203. --TOTAL 341. 341. 358. 353. 389. 383. 420. 359. TOTAL TRAFFIC UNITS 611. 582. 6:31. 580. 666. 6o2. 699. 552. UNIT REVENUES(CFAF/OOOPK 1K) PASSENGERS 2770. 2755. 2784. 2511. 2791. 2813. 2789. 2974. FREIGHT--INTERNATIONAL 6203. 6124. 6206. 6201. 6204. 5447 6203. 6782. --NATIONAL-PHOSPHATE 3331. 2794. 2644. 3712. 4.1463. -GROUNDNUT 8537. 8583. 8500. 9083. 12000. -OTHER 5676. 4909. 6194. 9760. 1552.i. --ALL NATIONAL 4740. 3778. 5041. 3734. 5000. 4829. 4962. 6350. --ALL FREIGHT 531t. 4666. 5500. 4705. 5502. 5136. 5500. (538. ALL TRAFFIC 4t88. 3875. 4325. 3847. 4374. 4291. 4418. 6292. UNIT COSTS(CFAr/OOOTK) STAFF fXPENSES/IOOOTK 2951. 3285. 2821. 3447. 2656. 3399. 2504. 4433. WORKING EXPENSES/1000TK 3921. 4218. 3811. 4381. 3658. 4228. 3486. 647t. a go OPERATING EXPENSES/lOOOTK 4782. 4655. 168G. 4848. 4602. 4691. 4405. 6998. Ca Mi~ 1976 1976 1977 1977 1979 1978 1979 1979 FCST ACT FCSr ACT FCST ACT FCST ACf TRAFFIC (MILLION PK/TK) PASSENGERS 280. 186. 282. 182. 180. 146. 174. 135. FREIGIT--INTERNATIONAL 181. 167. 183. 147. 190. 171. 204. 144. --NATIONAL-PIOSPHATE 163. 131. 172. 134. 157. 152. 1G3. 145. -GROUNDNUT 50. 22. 50. 16. 24. f5. 25. 7. -OTHER 39. to. 40. $ 1I. 11. 8. 10. 11. -TOTAL 252. 163. 262. 161. 192. 175. 198. IG3. --TOTAL 433. 330. 445. 308. . 382. 346. 402. 307. TOTAL TRAFFIC UNITS 713. 516. 727. 490. 562. 492. 576. 442. UNIT REVENUES(CFAF/OOOPK TK) PASSENGERS 2800. 3887. 2518. 4390. 3839. 5212. 3845. 4948. FREIGHT--INTERNATIONAL 6210. 8222. 7765. 9347. 8300. 9842. 8294. 11542. --NAT IONAL -PHOSPHATE 5962. 5349. 5336. 5917. 5461. 5951. 5497. -GROUNDNUT 11000. 5640. 11875. 12250. 14067. 12280. 8429. -OTHER 15600. 4675. 11909. f5545. 18250. 15600. 15364. --ALL NATIONAL 4992. 7233. 5302. 6435. 7260. 6783. 7237. 6288. --AL FREIGfif 5501. 7733. 6315. 7825. 7777. 8295. 7774. 8752. ALL TRAFFIC 4440. 6347. 48.12. 6549. G56. 7380. 6587. 7590. UNIT COSTS(CFAF/OOOTK) STAFF EXPENSES/1000IK 2352. 4802. 3706. 4900. 5021. 4882. 5146. 5466. WORKINJG EXPENJSES/1000fK 3331. 6587. 4986. 6780. 7094. 7069. 7307. 8819. OPERATING EXPENSES/1OOOTK 4255. 7229. 5461. 7517. 7904. 7923. 8226. 9792. (D MALI Transport Costs for Mali Export-Import Traffic / Comparison between Dakar and Abidjan for Origin/Destination in Bamako- (in Mali Francs/ton - December 1978 prices) Dakar-Banako Route Road AbidJan-Samako Road/Rail Abid an-Ba-mnko Coqt Differential Terminal Rail Rail margin- Terminal Rail tariff Transship- Truck rate Abidjan Abidjan (rcad! Costs tariff in al costs Costs Truck Ivory Coast ment ra:e Bamako- (road) over rail) over Product Dakar Port e in Mali Abidian Ptt Rate, Total & Port Cos*-s at oaolo toan-oo iotal Dakar rcttte --P Exports Cotton seeds 6,273 11,372 5,722 23,372 2,880 41,418 44,298 11,502 1,103 19,238 31,848 20,926 8,476 Cotton fib-s & textiles 11,604 12,730 5,392 29, 726 6,40. 47,211 53,615A 15,372 2,433 21,930 39,740A 23,889 10,014/5 Groundnuts- /2 5,268 15,173 3,510 23,95 2,880 28,138 34,016- 10,672 1,103 13,070 27,8487 10,066 3,8987 Groundnut cakee- 5,678 8,100 3,359 17,137- 2,880 28,13 34,016- 11,502 1,108 13,070 23,678- 16,879 11,51 Karite 8,245 8,743 5,110 22,093 2,880 28,138 31,018 11,462 1,103 13,070 25,640 8,920 3,542 Irvarts Cc=ent 5,346 15,463 5,890 26,699 2,918 37,510 40,428 12,618 1,240 17,423 31,281 13,729 4,582 Fertilizers 5,328 12,506 5,890 23,724 5,306 37,510 42,816 16,390 1,325 17,423 35,139 19,092 11,415 Foodstuffs (cereals) 4,552 12,636 5,890 23,078 4,634 37.510 42,144 16,564 1,168 17,1.23 35,155 19,066 12,077 Su;ar 4,680 16,234 5,890 26,804 3,47u 37,510 40,986 15,693 1,326 17,423 34,447 14,182 7,643 Salt /6 5,322 12,895 5,890 24,107 3,618 37,510 41,128 11,352 1,326 17,423 30,101 17,021 5,994 Petroleum products- Fasoline/petrol 15,175 5,890 21,065 - 48,063 48,068 - -- - - 27,003_ - gas-oil/fuel-oil - 12,988 5,890 18,878 - 41,773 41,773 - - - - 22,895 - /1. Actual tariffs outside Mali and marginal costs in Mali. Comparison omits difference in -aritime transport rates between the two ports: Abidjan is on avera3e 107. more expensive than Dakar for Mali-bound traffic; no difference for traffic originating in Mali. /2 Transport costs for groundnut products based on actual geographical center of production 206 km west of Bamako. /3 Costs from groundnut produccion area to Banako. A Includes rail r-.arginal costs (MFl890/ton) from groundnut production area to Bamako, and transshipment to truck (MI1108/ton) at Bamako /5 Cost dlfferential is between Dakar/Abidjan and groundnut production area rather than Bamako. /6 Petroleum products originate at refineries in Dakar and Abidjan and therefore no port costs exist. The road/rail route, with trans- shipment at Bobo-Diulasso in Upper Volta, has not been used since 1976. Source: Mali Railways, National Transport Office and Bank estimates. February 1979 - 68 - Table 6.2 SENEGAL SECOND RATLWAY PROJECT Completion Report Spare Parts Costs for Economic Evaluation US CFAF million Constant CFAF million (current) (million) (1978) 1975 0.10 24.4 30.5 1976 0.35 85.8 101.5 1977 0.15 105.8 116.8 1978 0.32 66.8 66.8 1.22 283.8 315.6 ＿方  IBRD 14242 1a 1 00 a4°so APRIL 1979 A l U P, 7 A N l A A s E N E G A L, K.irl HcKonna Ke.Mp N l G E R BANJUL -, Tmbecund. (- N w I NIAMEY M A LI MAIN TRANSPORT CORRIDORS i i p p E R v O0 SU lN 5 A. Pisiad Roadb u - b u ~ii,Sa G-erl R..d40 Larbe e Houndé ynoit SBng Il..n .d (Y. of Comrition> bola - - - - G U ä-'fa. - ' IntornationelA Kind, Furanc KanlkanErl CONAKRY oangoodouou SIn..nonc Cp. d, ukrd,ail. Frke d g.. Tilmal. ..arak.u - lntern.ad Boundanrii FREETWN LEONE jkSr.mkudde, O v O R Y c 0 T4B *a o. o KnR m Kaola ffcuaké_ n . ,Techemnin Tt A N T iC 1 t )3ý Lak a ie zo1,k )Dai. ..volta 1 1, VN KILOMETERS OCEAN K-u MONROVIA bertificildCTNU ch.nen LM Th, m h b- brrh ~d BY,vaf .. ,,ml /mth c ~~S-mndr. T.k"är'.kd. d Big ht of B emnn o hee rsofte w c at n *de~~~~ ~ tedcne~ftce n Pedro bo sh -e an udgms ~ dcmrly 11 rh pef n te oraWorld Rank -nd,leape . 6h~ ccpt ,ce of ~ uc h . «- undan~~s 18l ,f ~05 4d..4