Mauritania - Public Enterprise Technical Assistance and Rehabilitation Project

Document of The World Bank FOR OMCIAL USE ONLY CA /,5z ' ' Report No. 5193-MALU STAFF APPRAISAL REPORT ISLAMIC REPUBLIC OF MAURITANIA PUBLIC ENTERPRISE TECHNICAL ASSISTANCE AND REHABILITATION PROJECT March 7, 1985 Western Africa Projects Department Public Enterprise Unit 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 WVorld Bank authorization-  CURRENCY EQUIVALENTS Currency Unit = 0--guiya (UM) USS 1.00 = UM 80.0 UM 1.00 = US$ .0125 WEICUTS AND MEASURES 1 Meter (m) 3.28 feet (ft) 1 Square meter (n2) _ 10.76 square feet (so. ft) 1 Filometer (kip) - 0.62 mile (mi) 1 Metric ton (mt) - 2,205 pounds (lb) 1 Liter (1) - 0.26 US gallons 1 Cubic meter (m3) - 264 US gallons 1 kV - 1,000 volts 1 MW - 1 million watts 1 Gwh - 1 billion watt-hours ABBREVIATIONS AND ACRONYMS CCCE : Caisse Centrale de Ccoperation Economique CNSS : Caisse Nationale de Securite Sociale CRSP : Cellule de Redressement du Secteur Parapublic DTAF : Direction de la Tutelle Administrative et Financiere ECU : European Currency Unit EDF : Europeai' Development Fund EIB : European Investment Bank EMN : Etablissement Maritime de Nouakchott EPAP Entreprise Publique a caractere Administratif et Professionnel EPIC : Entreprise Fublique a caractere Industriel et Commercial FAC : Fonds d'AIde et de Cooperation ILO International Labor Organization IGF : Inspectorate Generale de Finance KfW : Kreditanstalt fur W4iederaufbau OCAM : Organisation Commune Africaine et Hauritienne OPT : Office des Postes et Th16communications PE : Public Enterprises ?PF : Project Preparation Facility SEM: Socifte d'Economie Mixte SNINI : Societe Nationale Industrielle et Miniere SONELEC : Societe Nationale d'Eau et d'Electricite FISCAL YEAR Januarv 1 to D*ecember 31  FOR OMCIAL USE ONLY MAURITANIA PUBLIC ENTERPRISE TECHNICAL ASSISTANCE TABLE OF CONTENTS Page DOCUMENTS CONTAINED IN PROJECT FILE .......... ....................... iv-v CREDIT AND PROJECT SUMMARY ......................................... vi-viii I. THE PUBLIC ENTERPRISE SECTOR ................................... 1 A. The Economic Context ....... ................ 1 B. Sector Expansion and Objectives . . .......................... 2 C.- Structure and Organization ...... ..................... 2 D. Economic Impact and Importance ..... ................... 2 E. Financial Status ........................................... 3 F. Institutional Framework .................................... 5 G. Sector Constraints ......................................... 6 B. Government's Rehabilitation Strategy . ............... 7 1. Interministerial Committee ............................. 7 2. Reform Measures ....... ................ 8 3. Present Status and Calendar ................... 8 I. IDA's Role ................................................ 10 1. Past Involvement ................... .................... 10 2. Approach ....................... ........................ 11 II. THE ENTERPRISES ................................................ 12 A. Introduction ............................................... 12 B. SONELEC .................................................... 12 C. EMN ............... ... ............. ........ 15 D. OPT ..... 17 This report was prepared by Ms. M. Alexander on the basis of an appraisal mission that visited Mauritania in October-November 1983. The mission, led by Mr. J.P. Le Bouder (WA2DB loan officer), consisted of Messrs. de Leede (WA2/senior economist), Calegari (WAPWS/sanitary engineer), Ouahes (WAPEG/ power engineer), Jones (LEG/lawyer), Poinsot (power consultant), Renault (institutional consultant) and Malkin (institutional consultant) and Ms. Alexander (VAPPE/financial analyst). An additional visit was made by Mr. Fateen (port consultant) in December 1983. Supporting appendices on each of the enterprises included in the project were prepared by Ms. Alexander and Messrs. Calegari and Fateen. Secretarial support was provided by Ms. Uslaner, Ms. Mudd, Ms. Whittaker and Ms. Pendleton. Thi document has a retited disttion and may be used by recpients only in the perfomnce or Ltirofficial duties. Its contents may not otherwis be disdosed without World Bank authorizati  - ii - Table of Contents (continued) Page III. THE PROJECT ........................................... 18 A. Objectives ................................... 18 B. Description ... ..................................... 19 1. Sector Reform .. . . . 9..... 1 2. Emergency Support for SONELEC .. . ....... 21 3. Emergency Support for EMN .............................. 22 4. Technical Assistance to .OPT .. . ....... 23 C. Project Costs ..... .......................... 24 D. Financing Plan .................................. 27 IV. PROJECT IPFLEMENTATION ......................................... 28 A. Organization and Management ................................ 28 1. Enterprise Project Management .......................... 28 2. Public Enterprise Rehabilitation Unit (CRSP) . . 29 3. The Program Contract Process ....... .................... 30 4. Inter-Ministerial Coordination ...... ................... 30 5. Training Programs ...................................... 31 B. Implementation Plan ............................... 32 C. Procurement . . . ............. 32 D. Disbursements ......................... .... 34 E. Revolving Funds ....................... 36 F. Accounts and Audits . . . ....... ...... 36 G. Reporting and Monitoring ....................... 36 V. BENEFITS AND RISKS ......................... 37 A. Benefits .............................. .37 B. Economic Justification ..................................... 37 C. The Need for Technical Assistance .......................... 38 D. Risks ................... .................. 38 VI. AGREEMENTS AND RECOMMENDATION .................................. 39 A. Agreements Reached ...................... .39 B. Recommendation ................. 42  iii- Table of Contents (continued) ANNEXES 1-1 Government Reform Measures 1-2 Sector Reform Program 1-3 First-Phase Sector Restructuring 2-1 SONELEC: Financial Performance and Prospects 2-2 SONELEC: Action Plan 2-3 EMN: Financial Performance and Prospects 2-4 EMN: Action Plan 2-5 OPT: Financial Performance 2-6 OPT: Action Plan 3-1 CRSP: Terms of Reference 3-2 Rehabilitation Process 3-3 Description of Studies and Advisory Services 3-4 SONELEC: Detailed Project Description 3-5 EMN: Detailed Project Description 3-6 OPT: Detailed Project Description 3-7 Sector Reform: Detailed Cost Estimates 3-8 SONELEC: Detailed Cost Estimates 3-9 EMN: Detailed Cost Estimates 3-10 OPT: Detailed Cost Estimates 4-1 CRSP Organization Structure 4-2 Project Implementation Plan 4-3 Estimated Disbursement Profile 4-4 Sector Reform: Monitoring Indicators 4-5 SONELEC: Monitoring Indicators 4-6 EMN: Monitoring Indicators 4-7 OPT: Monitoring Indicators 5-1 SONELEC: Economic Analysis 5-2 EMU: Economic Analysis MAP IBRD No. 16452  - IIv- MAURITANIA PUBLIC ENTERPRISE TECHNICAL ASSISTANCE AND REHABILITATION PROJECT DOCUMENTS IN THE PROJECT FILE NO. Ref. No. Document 1. Report Appendices: 1: Societe Nationale d'Eau et d'Electricite 2: Etablissement Maritime de Nouakchott 3: Office des Postes et Telecommunications 2. Benichou, Wim. Les Entreprises Publiques en Republique Islaiique de Mauritanie, March 1983 3 RIM, Report to Inter-Ministerial Commission on Public Enterprises (in French). undated 4. RIM, Les Entreprises Publiques Mauritaniennes. Elements d'Ensemble Pour le Redressement et le D4veloppement du Secteur, undated 5. Conseil de Ministres, RIM, Nesures Urgentes a prendre en vue du Redressement des Entreprises publiques, November 1983 6. Ministere du Plan, Restructuration du Secteur Parapublic, March 1984 7. CCCE, Note pour le Conseil de Surveillance de la Caisse Ceutrale de Cooperation Economique, Societe Nationale d'Eau et d'Electricite (Hauritanie) Fevrier 1984 8. Ordonnance No. 84038, Fixant le Regime des Etablissement Publics 25 Fevrier 1984 9. BIT, Memorandum au Gouvernement de Mauritanie sur la politique des salaires, 1984 10. FAC, Etude relative au trafic telephonique pour la creation d'une station terrienne a Nouakchott, F&vrier 1983  11. UIT, Actualisation de l'Etude Economique Prepare par SOFRECOM en 1977 pour la Republique Lslamique de Mauritanie, September 1982 12. OPT: Financial Performance OPT: Action Plans Thlesuiise, Identification des besoins de la Composante Re-habilitation des Telecommunications de la Republique Islamique, Novembre 1983 13. Telesuisse, Information du Traitement des Factures telephoniques et des salaires a 1'OPT de Mauritanie ler Rapport Octobre 1983 2eme Rapport Octobre 1983 3eme Rapport Novembre 1983 14. Bastard et ai, Rapport de Mission, Etabliseement Maritime de Nouakchott, July 1983 15. Valla, Etablissement Maritime de Nouakchott. Analyse des Circuits Administratifs et Organisation de la Fonction Comptable, undated 16. Poinsot, M. Analyse-Diagnostic de la Societe Nationale d'Eau et d'Electricit6 et Propositions en vue de son Redressement, Septembre 1983 17. Poinsot, M. Proposition dtOrganigrazme des Fonctions de SONELEC, Novembre 1983 18. Renaud, L. SONELEC: Preparation Report on Institutional Organization, March 1984 19. SONELEC: Mesures Envisagees en vue de Redressement, D6cembre 1983 20. Djebri, SONELEC, Rapport d'Audit, Aouit 1983 21. SONELEC: Financial Performance and Prospects Working Papers on SONELEC (various documents including accounts, statutes, etc.)  - vi - 22. EDN: Financial Performance and prospects EMN: Actions Plans Working Papers on EMN (various documents including accounts, statutes, etc.) 23. Working Papers for CRSP, Ministry of Plan (Terms of Reference, bidding documents, consultants' submissions, etc.) WAPPE November 1984  MAURITANIA PUBLIC ENTERPRISE TECHNICAL ASSISTANCE AND REHABILITATION PROJECT CREDIT A1D PROJECT SUMMARY Borrower: Government of Islamic Republic of Mauritania Implementing Agencies: Ministry of Planning Electricity and Water Company (SONELEC) Port Authority at Nouakchott (EMN) Post, Telecommuniations and Savings Bank Company (OPT) Credit Amount: SDR million (US$16.4 million) Terms: Standard !DA terms Relending Terms: Proceeds of the Credit other than the funds for the sector reform will be onlent at about 1OZ, the Bank's prevailing interest rate, as follows: (a) SONELEC: 15 years including 5 years grace (b) EMN: 10 years including 3 years grace (c) OPT: 10 years including 3 years grace Government will assume the foreign exchange risk. Project Description: The project comprises components aimed at (a) creating a central agency within the Ministry of Plan to formulate policy, carry out reforms and coordinate programs affecting the public enterprise sector; (b) undertaking a series of special studies in the parastatal sector to propose new policy directions for government; (c) initiating diagnostic studies of other public enterprises for the next phase of the rehabilitation strategy; (d) rehabilitating the operation of two key public enterprises (SONELEC and EMN) by upgrading equipment, restoring capacity and providing technical assistance and training; (e) assisting OPT with expertise and equipment in the area of financial management and further rehabilitation studies.  - viii - Estimated Costs: Local Foreign Total ~~~~~~~~- --US$ MIilion- - Sector Reform 0.6 2.6 3.2 SONELEC 2.1 12.8 14.9 EMN 0.2 3.3 3.5 OPT 0.2 0.8 1.0 Total Base Cost 3.1 19.5 22.6 Physical Contingencies 0.2 1.4 1.6 Price Contingencies 0.7 4.3 5.0 Total Project Cost 4.0 25.2 29.2 Financing Plan: Local Foreign Total --