Guinea - Conakry Port Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4160-GUI STAFF APPRAISAL REPORT REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA CONAKRY PORT PROJECT May 17, 1983 Western Africa Projects Department Transportation Division 1 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.  CURRENCY EQUIVALENTS Currency Unit Syli (GS) US$1.0 = S 23.0 S 1.00 = US$ .0435 Fiscal Year July 1 - June 30 SYSTEM OF WEIGHTS AND MEASURES (METRIC) Metric British/US equivalent 1 meter 2 3.28 feet (ft.) 1 square meter (M2) = 10.76 square feet (sq. ft.) 1 cubic meter (m3) = 35.30 cubic feet (cu. ft.) i kilometer (km) = 0.62 mile (mi.) 1 square kilometer (km2) = 0.59 square mile (sq. mi.) 1 hectare (ha) = 2.47 acres 1 metric ton (t) = 2,205 pounds (lb) ABBREVIATIONS AND ACRONYMS AfDB =African Development Bank dwt =Dead Weight Ton ENTRAT =Stevedoring Company (Entreprise Nationale de Transit et de Transport) ERR =Economic Rate of Return GDP =Gross Domestic Product GNP =Gross National Product GTZ =German Technical Cooperation Agency (Deutsche Gesselschaft fur Technische Zusaramenarbeit) ILS =Instrument Landing System KfW = German Aid Agency (Kreditanstalt fur Wiederaufbau) PAC = Conarky Port Authority (Port Autonome de Conarky) PPF = Project Preparation Facility SNG =Guinean Maritime Agency (Societe Navale Guineene) SNAR = Guinean State Insurance Agency (Scci6te Nationale d'Assurences et I de Reassurances)  FOR OFFICIAL USE ONLY REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA STAFF APPRAISAL REPORT CONAKRY PORT PROJECT Table of Contents Page No. I. INTRODUCTION .............................................. 1 II. THE TRANSPORT SECTOR ...................................... 1 A. General ............................................... 1 B. Infrastructure ........................................ 2 C. Management, Planning and Coordination ................. 3 D. Bank Assistance in the Transport Sector ............... 3 III. THE PORT OF CONAKRY ....................................... 4 A. Port Facilities & Operations .......................... 4 B. Traffic - Past and Present ............................ 5 C. Port Organization ..................................... 6 D. Staffing and Training ................................ 6 E. Accounting, Budgeting, Auditing and Insurance ......... 7 F. Tariffs ............................................... 8 IV. THE PROJECT ............................................... 8 A. Objectives and Concept ................................ 8 B. Project Description ................................... 9 C. Cost Estimates ........................................ 10 D. Project Financing ..................................... 11 E. Project Implementation ................................ 13 F. Procurement and Disbursement .......................... 14 G. Operational Targets ................................... 16 H. Environmental Impact .................................. 17 V. ECONOMIC EVALUATION ....................................... 17 A. Methodology ........................................... 17 B. Traffic Analysis and Projections ...................... 17 C. Project Benefits ...................................... 19 D. Economic Return and Sensitivity Analysis .............. 20 VI. FINANCIAL EVALUATION ...................................... 22 A. Recent Financial Performance .......................... 22 B. Financial Objective ................................... 23 C. Forecast Financial Performance ........................ 24 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .................... 29 This report was prepared by Messrs. H. Hansen (Economist), R. Venkateswaran (Financial Analyst), and E. Vernigora (Engineer) on the basis of an appraisal mission in February 1982. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii. - Table of Contents (continued) TABLES 1. Project Cost Summary 2. Estimated Disbursment Schedule CHARTS 1. General Organizational Structure of the Conakry Port Authority 2. Project Execution Time Schedule ANNEX Selected Documents Available in the Project File MAPS IBRD No. 16680 Guinea, Transportation System IBRD NO. 16681 Guinea, Conakry Port, Location Plan IBRD NO. 16682R Guinea, Conakry Port, Proposed Works  GUINEA CONAKRY PORT PROJECT STAFF APPRAISAL REPORT I. INTRODUCTION 1.01 The proposed project would be the Bank Group's first port project in Guinea. The Bank Group has previously assisted the port sector indirectly through an Engineering Loan (SI-GUI) and two loans (577-GUI and 766-GUI) for the Boke Bauxite Project which included construction of a new port at Kamsar, and related rail transport and new town infrastructure. 1.02 The proposed project would meet the most urgent investment needs of the Port of Conakry. It would eliminate constraints that would cause the Port to be a bottleneck to economic development of the country through: (a) reha- bilitation and replacement of existing port infrastructure and equipment; and (b) establishment of an autonomous and well-functioning port authority for the Port of Conakry. The Association had viewed the latter measure as a sine qua non of possible IDA financing for the project. The Government responded favorably and took the necessary steps in a timely manner (para 3.08). The Project is expected to improve productivity as well as financial and manage- ment performance of the Port, and reduce substantially ocean freight costs on the country's agricultural exports and general cargo imports. More generally, it would facilitate increased production and economic development of the country by providing sufficient, low-cost port capacity for the country's foreign trade. It would be financed in parallel with funding to be provided by the AfDB and the Federal Republic of Germany (KfW and GTZ). II. THE TRANSPORT SECTOR A. General 2.01 Guinea encompasses an area of some 246,000 km2 and has a population of about 5.7 million growing at a high 2.9% a year. It is potentially one of the richest countries of West Africa with vast mining and hydro-electric power resources, and with soils and a climate favoring the development of a wide range of agricultural products. Mineral deposits include bauxite, of which Guinea has about 29% of the world's known reserves (6.5 billion tons), high grade iron ore (1.5 billion tons) as well as gold and diamonds. There are also good geological prospects for uranium and offshore oil. . 2.02 Despite its potential, Guinea's GNP per capita in 1980 was only US$290 equivalent; it grew at 0.6% a year between 1970 and 1980, while GDP grew at 3.6% a year over the same period. Faced with a sharp decline in agricultural production over the last two decades since gaining independence  - 2 - in 1958, the Government has now placed high priority on the regeneration of the rural sector. At the same time, the Government is emphasizing transport sector development which had been adversely affected by overall economic stagnation. B. Infrastructure 2.03 At Independence, Guinea was well-endowed with an extensive road and rail network and with a port facility at Conakry. In the years immediately following, major additions were made to rail and port infrastructure, mainly to carry the rapidly developing bauxite and alumina traffic. Three enclave rail lines and dedicated port facilities at Kamsar and ore handling berths at Conakry were built mainly in the 1960s. (Map IBRD 16680). 2.04 At present the Guinean transport infrastructure comprises: - 14,000 km of primary and secondary roads, of which 1,200 km are paved; - the public rail line from Conakry to Kankan (662 km); - the three enclave rail lines - Conakry-Fria (alumina), Conakry- Kindia (bauxite) and Sanagredi-Kamsar bauxite); - deep water port facilities at Kamsar and Conakry; and - the main international airport at Conakry, with secondary air- ports at Kankan and Faranah which have paved runways and at seven other regional centers which have laterite surfaced runways. Despite this wealth of transport infrastructure, poor management, inadequate maintenance and insufficient capital funding have caused extensive deterio- ration of all but a small proportion of the facilities and infrastructure. 2.05 The Guinean road system carries the bulk of the internal commodity traffic outside the enclave mining sector. Traffic volumes on the main roads leading out of Conakry average 2000 vpd, the bulk of which are goods transport vehicles. The sorry state of the pubLic rail line and the unreliability of its services have contributed to its decline as a major transport mode, and little, if any, competition exists be-twen road and rail. The air transport network developed by the national airline, Air Guinee, carries about 120,000 passengers a year and plays a relatively important role in passenger trans- port. The Port of Conakry serves as -the country's main maritime gateway, with Kamsar only handling bauxite exports from the Boke mines. A small secondary port at Benty has declined in importance as a banana port and now handles insignificant domestic coastal traffic.  - C. Management, Planning and Coordination 2.06 Sector management, planning and coordination have been weak and with a lack of resources for maintenance have contributed largely to the deteriora- tion of transport infrastructure. Extensive rehabilitation and maintenance of the primary and secondary road network was begun under the IDA-financed First Highway Project and has continued under the Second Project (see para 2.08). Despite the progress achieved, substantial improvements are still needed and form the backbone of the Government's investment strategy for the roads sub- sector. The road transport industry is hampered by lack of foreign exchange but nevertheless manages to carry the traffic. As infrastructure maintenance is improved further, Guinea's road system should have little difficulty coping with the transport demand in the main agricultural centers of the country. 2.07 Transport planning and coordination are at very rudimentary stages. Overall responsibility lies with the Ministry of Transport, but lack of com- petent personnel, non-existent data and inadequate funds in the past have resulted in little planning. Following the planning activities under the Second Highway Project, the Government has requested assistance in this area, and a transport planning component will be considered under the proposed Third Highway Project. Development of a national transport plan is particularly timely as extensive investments are now being proposed to rehabilitate the public rail line and upgrade services. Given the low traffic volumes, the economic wisdom of such major capital spending is questionable and coordi- nation with other modal choices therefore vital. Development of air transport as a viable alternative for long distance passenger transport also deserves study. D. Bank Assistance in the Transport Sector 2.08 The Bank Group has been the principal source of external financing for transport development. Since 1966, it has made three loans and three credits. The former financed the mining town site and related port and rail infrastructure for the export of bauxite from the mining development at Boke. The latter have funded the First and still ongoing Second Highway projects. The two highway projects financed extensive road rehabilitation and maintenance programs and supported the basic sector strategy in this regard. The First Highway Project was completed satisfactorily in 1980. The second had experienced some difficulties due to poor project management and excessive Government interference. However, these difficulties have been ironed out and the project is expected to be completed in mid-1983. A Third Highway Project involving further road maintenance and some reconstruction is now under discussion.  - 4 - III. THE PORT OF CONAKRY A. Port Facilities & Operations 3.01 The Port of Conakry is located on the northern coast of Tombo Island where the average tidal range is 3.3m. It is protected against swells by the Island of Kassa and two rubble mound island breakwaters (Map IBRD 16681). In spite of the self-flushing function of the breakwaters and north groyne, cur- rents in the northerly direction cause some silt to deposit in the Port. Entry to the Port is from the south, through a 8.5m deep dredged channel 5 km long. The channel is provided with marker buoys; however, due to poor maintenance of buoys and beacons, night-time navigation is restricted. Vessels of up to 40,000 dwt currently use the Port. 3.02 The Port of Conakry (Map IBRI) 16682R) has two bulk-handling facil- ities for exports, one for FRIGUIA (alumina) and the other for OBEKA (bauxite). Located between these facilities are four general cargo berths, and facilities for fruit handling, small coastal vessels, fishing vessels and work boats. Bulk petroleum products are handled next to the bauxite berth. The total surface area occupied by the Port is about 38 ha, of which about 3.6 ha is covered storage area comprising the main transit sheds behind the general cargo berths. A clinker unloading and storage facility is under construction. During appraisal of the project, the proposed layout of this facility was examined and some modifications agreed between the Government and the Association, so that its construction would not hinder rational function- ing of the Port. 3.03 A large part of the port infrastructure has deteriorated. Some facilities present potential hazards and need to be partially demolished. Others are in poor condition and inhibit efficient operations. General cargo aprons have settled in places due to gaps in the underwater quay wall blocks. 3.04 Cargo handling equipment is of relatively recent vintage, but inade- quate maintenance, compounded by rundown workshops and generally poor operating conditions have substantially shortened its useful life. Floating craft are in poor condition. Harbor tugs are operating well beyond their useful lives and risk of total breakdown is high. Beaconage and buoyage of the entrance channel are also inadequately maintained. 3.05 Hitherto, responsibilities for port operations were shared among four organizations. The Office Maritime wELs responsible for beaconage and buoyage, harbor master services, maintenance of infrastructure and dredging. The Entreprise Nationale de Transit et de Transport (ENTRAT) was responsible for stevedoring and general cargo transit operations. The Societe Navale Guineene (SNG) was responsible for tugboat operations, while a fourth entity, the Administration Gen6rale handled general administrative functions. This fragmentation of operational responsibility, coupled with deteriorating facilities and equipment, has resulted in high berth occupancy for general cargo (80%), long ship turnaround times (seven days on average), low productivity (less than 200/tons/day of general cargo unloaded), high  pilferage and poor security. Freight rates to Conakry are -_-se