Singapore - Port of Singapore Expansion and Improvement Project

RETURN TO RESTRICTED REPORTS DESK Re'port No. TO- 544a WITHIN f Y ONE WEEK FILE GP This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE PORT OF SINGAPORE EXPANSION AND IMPROVEMENT PROJECT SINGAPORE (Supplementary Report) August 2, 1966 Projects Department  CURRENCY EQUIVALENTS, 1 M$ = 0.33 US cents 1 US$ = 3.0 M$ UNITS Tons Revenue Tons, i.e., weight tons of 2,240 lbs. or measurement tons of 40 cubic feet. FISCAL YEARS Singapore Harbour Board - July-June Port of Singapore Authority - January-December  SINGAPORE APPRAISAL OF THE PORT OF SINrGAPORE EXPANSION AND IMPROVEMENT PROJECT (Supplementary Report) TABLE OF CONTENTS . . ~ ~ EM A. General 1 B. Operations 1-2 C. The Project 2-3 D. Finance 3-4 APPENDICES 1. Cargo Statistics 2. Projections of Cargo Traffic 3. Ship Movements at P.SeAo Wharves 4. Daily DNumber of Ocean-going Ships Waiting for Berths at P.S.A.Wharves 5. Project Items and Estimated Cost 8. PoSoA. Statement of Present Debt 9. P.S.A. Actual and Forecast Revenue and &penOiture Accounts 10. P.S.A. Forecast of Cash Flow 11. P.S.A. Actual and Estimated Summary Balance Sheets 12. POS.AO Forecast of Debt Service. This Supplementary Report is based on the findings of a Bank mission to Singapore in March, 1966 consisting of Messrs. A. J. Carmichael and S. Y. Park.  SINrAPORE APPRAISAL OF THE PORT OF SINGAPORE EXPANSION AND IMPROVEMENT PFRJECT (Supplementary Report) 1. The Bank on August 9, 1965 was on the verge of completing a loan, guaranteed by Malaysia, for the expansion of the port of Singapore - the project having been submitted to and approved by the Board - when the poli- tical separation of Singapore from Malaysia required its postponement until Singapore became a member of the Bank in its own right. A subsequent Bank mission consisting of Messrs. A. J. Carmichael and S. Y. Park visited Singa- pore in March 1966 to determine the effect that the separation of Singapore from Malaysia may have had on the trade and prospects of the port, and to update the information contained in Appraisal Report (TO-483a) on the port of Singapore project. 2. The latest information indicates that the justification of the project has not been affected by recent events and remains sound. A. General 3. The new port at Jurong, to serve the needs of the new industrial estate and satellite town being developed west of Singapore, is scheduled for completion in 1966. The first berth was commissioned in January 1966 and the other four deep-water berths and 1,260 feet of coastal berths are nearing completion. The completed berth has stiarted to handle general cargo and, up to March 12, 1966, six vessels had used the facility. As an interim measure, the Port of Singapore Authority's (PSA staff and equipment are being used to operate Jurong poit and the situation is being reviewed in tile light of experience during the first six months of operations. The Govern- ment of Singapore has informed the Bank that its policy is to co-ordinate development to avoid unnecessary duplication of port facilities and to ensure that the rates charged are such as to prevent wasteful competition and subsi- dization of one port at the expense of the other. 4. The Telok Ayer Basin area deals mainly with the traffic lightered to and from deep-sea vessels at the "Roads", and that from coastal vessels using the shallow-water, artificial basin itself. Discussions between PSA and the Government are still under way regarding the taking over of the area, and the terms and conditions of the take-over have yet to be determined. B. Operations 5. From discussions with Government officials and representatives of private firms specializing in the entrepot trades, it appears that there hias been no discernible adverse effect on Singapore's port traffic as a result of the political separation from Malaysia in August 1965.  6. The long-range intentions of the Malaysian Government with respect to the port of Singapore are not known. The Government of MIalaysia is in a position to introduce measures to divert the Singapore port's Malaysian traffic to Port Swettenham or other Mlalaysian ports. However, such measures would be disadvantageous on economic grounds as new port facilities would have to be provided in Malaysia. In any event, the provision of adequate alternative port facilities in Malaysia would take several years and there is therefore no immediate threat to this portion of Singapore's trade. 7. In the meantime, Singapore's officials hope that a workable arrange- ment for economic cooperation with Malaysia will be established and that a common tariff zone for Malaysia and Singapore will result. Recently, the Singapore Government proposed that negotiations for the establishment of a common tariff zone for Malaysia and Singapore should be re-opened in the near future and the Plalaysian Government agreed that this should be done. Rapid progress in such negotiations is, however, not expected. 8. The continuation of Indonesian "confrontation" led to a sharp decrease in the volume of Singapore's traffic in 1964 but this was followed by a modest recovery during 1965. The total PSA wharf traffic (excluding bulk mineral oil) increased by nearly 8 per cent to about 4.6 million tons in 1965 as compared with a 13 per cent decrease in 1964. The volume of traffic in 1965 was almost exactly as anticipated by the Bank's 1964 appraisal mission, in spite of the decrease during 1964 having been somewhat more than estimated. (See updated traffic and operational statistics in Appendices 1 - 4.) Recent reports indicate that the effect of "confrontation" is diminishing and that Indonesia is gradually resuming use of Singapore's facilities for trade. 9. The traffic forecast for PSA wharves in the Appraisal Report envisaged an average annual rate of growth of slightly less than 5 per cent from 4.4 million tons in 1964 to 5.5 million tons in 1969. From the latest information, it appears that the growth rate of PSA's wharf traffic assumed in the original Appraisal Report is still reasonable. In fact, on the basi-s of the actual results for 1964-1965 and the improved prospects for trade with Indonesia, it appears possible that the projected rate of growth will be surpassed. 10. The updated traffic and operational statistics are given in Appen- dices 1 to 4 which correspond to the Appendices with the same numbers in the Appraisal Report. C. The Project 11. PSA has requested that a few changes be made in the project. These are of a minor nature and do not affect the total amount of foreign exchange involved. 12. Details of the original and the present project are given in Appen- dix 5. The total cost is now N$ 72.7 million (US$ 24.2 million equivalent); the foreign exchange cost remaining the same at N$ 45.0 million (U'S$ 15.0 million equivalent) and the local currency cost being M$ 27.7 million (US$ 9.2 million equivalent). The main item of the project - the East Lagoon Scheme  - 3 - for the construction of h new deep-water berths - is unchanged and its cost now represents 70 per cent of the total cost of the project. The port engineer's plantyard item, preliminary work on which has already started, also remains the same. 13. Of the floating craft, PSA has decided to procure only the large fire float and no longer intends to purchase the small fire-fighting vessel as seven of PSA's tugs have been fitted with fire-fighting equipment and ara now on 24.hour service. This is an acceptable arrangement. Accepting the advice of its consultants, PSA has decided to buy its own self-propelled, diesel-electric, bucket ladder dredger and to transport dredged material by means of locally-hired barges. Consequently, the two 300-ton steel hopper barges and the attendant tug have been deleted from the project and the "dredging unit" item replaced by the bucket ladder dredger, the estimated cost of which is M$ 2.5 million. A review of PSA's obligations for the supply of water to vessels and to the outer islands and an assessment of its exist- ing five waterboats have caused PSA to revise its waterboat replacement pro- gram and to order three vessels at this time instead of the one originally intended. As before, three harbour tugs are to be procured. 14. The item for the procurement of data processing equipment remains the same. PSA expected to complete an investigation of the best type of equipment for its needs by July 1966. 15. Regarding cargo-handling equipment, orders have been placed, after international competitive bidding, for 38 of the 1h9 forklift trucks. The price offered was lower than anticipated and the total for this item has been reduced from M$ 3.9 to M$ 3.7 million. An order for nine mobile cranes has also been placed. The total cost for mechanical equipment has been reduced from M$ 6.2 to M$ 6.0 million. 16. It is now possible that a technical college building on part of PSA's estate will be made available at some time in the future for conversion into a head office. In view of this possibility, PSA has docided to delete this item from the project. 17. The amounts included in the original appraisal report estimate for engineering services, including supervision, remain the same and the 7 per cent contingency item added to the 10 per cent already. included in the East Lagoon Scheme figure is considered adequate for the project. D. Finance 18. Past Income and Expenditure Accounts and Balance Sheets were given in Appendices 6 and 7 of the original Appraisal Report. The latest financial information is given in Appendices 8 to 12 which provide:- Appendix 8 - Statement of Present Debt Appendix 9 - Forecast Revenue and Expenditure Accounts - Actual 1964 and 1965, Forecast for 1966-1971 Appendix 10 - Forecast of Cash Flow 1966-1971  - 4 - Appendix 11 - Summary Balance Sheets - Actual 1964 and 1965, Estimated 1966 - 1971 Appendix 12 - Forecast of Debt Service 1966 - 1971. For all practical purposes, the financial projections remain as forecast in the original Appraisal Report and PSA is confident that at least a 6 per cent rate of return on net fixed assets can be attained in the current, year and maintained in the future. August 2, 1966  SIIGAPOIhF. PORT PROJECT Cargo Statistics (Fvoluuding Bulk Mineral Oil) Calendar Year Ended December 31 Thousand Freight Long Tons All Port I'aoilities of Singapore ? . A. Wharves "Roads" Loaded Unloaded Total Loaded Unloaded % Total % Loaded % Unloaded To-tal 1959 2,527 3,942 6,469 1,908 76 1,986 50 3,894 60 619 24 1,956 50 2,575 40 1960 2,483 4,084 6,567 1,906 77 2,197 54 4,103 62 577 23 1,887 46 2;464 38 1961 2,730 4,602 7,332 2,069 76 2,499 54 4,568 62 661 24 2,103 46 2,764 38 1962 2,701 4,768 7,469 2,042 76 2,680 56 4,722 63 659 24 2,088 44 2,747 37 1963 2,836 4,784 7,620 2,076 73 2,814 59 4,890 64 760 27 1,970 4"1 2,730 36 % Increase 1959-1963 12% 21% 18% 9% 42% 26% 23% 1% 6% 1964 2,080 3,917 5,997 1,743 84 2,517 64 4,260 71 337 16 1,400 36 1,737 29 % Decrease 1963-1964 26.7% 18.1% 21.3% 16.0% 10.6 12.9% 55.7% 28.9% 36.4% 1965 2,185 4,227 6,412 1,826 84 2,770 66 4,596 72 359 16 1,457 34 1,816 28 % Increase 1964-1965 5.0% 7.9% 6.9% 4.8% 10.0% 7.-, 6.5% 4.1% 4.5% Notes "Roads" include all port. of Singapore and adjacent islands except P.S.A. Whgrves. Bouroee Statistics Dept. Government of 5ingaporos 1959-1965.  STNGAPOrF PORT PROJECT Projections of Cargo Traffic (Excluding Bulk Mineral Oil) (Thousands of Freight Tons) All Fort Facilities of Singapore The Authority's Wharves 1963 1264 1965 1969 lq7 1963 1964 lq65 1269 1974 (Actual) (Actual) (Actuall (ProJected) (Actual) (Actual) (Actual) (Projected) General Cargo Incoming Rubber 337 54 75 a50 480 33 39 47 35 40 Rice 486 298 301 600 700 31 12 8 100 150 Wheat Flour 108 66 40 0 0 97 65 39 0 0 Fruit and Vegetables 163 154 162 180 180 76 99 105 100 130 Iron and Steel 254 254 309 200 180 229 159 215 200 180 Machinery and Equipment 393 315 385 430 450 262 242 321 360 430 Textile Manufacture 205 151 134 180 120 101 94 99 110 110 All Others 2j655 2,4L4 2,611 2,770 2,900 1,802 1,623 1755 2.010 2,180 TOTAL - INCOMING 4,601 3,734 4,017 4,810 5,010 2,631 2,333 2,590 2,915 3,220 Outgoing Rubber 666 424 446 700 770 644 419 430 680 750 Fruit and Vegetables 111 86 110 115 140 97 82 104 105 125 Timber and Logs 253 344 410 295 320 201 261 304 265 300 Rice 154 44 41 70 50 28 24 21 35 40 Textile Manufacture 75 54 45 50 60 16 21 28 30 40 All Others 1,511 1,064 1051 _1, 1700 1,024 888 1180 1,230 TOTAL - OUTGOING 2,770 2,016 2,103 2,830 3,040 2,010 1,680 1,775 2,295 2,485 TOTAL - GENERAL CARGO 7,371 5,750 6,120 7,640 8,050 4,641 4,013 4,365 5,210 5,705 Bulk Cargo Gypsum, clinker, latex, vegetable oil 249 247 292 330 330 249 _247 231 330 330 TOTAL - ALL CARGO 7,620 5,997 6.412 7,970 8,380 4,890 4,260 4,596 5,540 6,035 _ _ , ._-_-_ _ _ . Source: Singapore Government.  SINGAPORE PORT PROJECT Ship Movement at P.S.A. Wharves Year ended June 30 ---------- Ships Called ---------- Average Turn- Net Registered around Time Average ,niting Time Number Tonnage (1,000 T) Per Ship For Berths For All Ships Days Hours Hours Minutes 1954 3,637 11,217.5 2 17 n.a.-/ 1955 3,694 10,833.9 2 9-1/2 n.a. 1956 3,592 10,777.0 2 18 n.a. 1957 3,418 10,247.0 2 18-1/2 n.a. 1958 3,575 11,776.4 2 18 n.a. 1959 3,722 12,795.7 2 15-1/2 n.a. 1960 3,997 13,201.7 2 11 n.a. 1961 4,082 13,410.0 2 12-1/2 3 26 1962 4,018 14,167.0 2 16-3/4 3 49 1963 3,933 14,354.9 2 9-3/4 2 29 1964a/ 3,554 13,100.9 2 10 n.a. 1965_/ 3,532 13,291.4 2 4 n.a. a/ Calendar year January 1 - December 31 b/ n.a. means data not available Source: Port of Singapore Authority.  SINGAPORE PORT PROJM"T Daily Number of Ocean-Going Ships Waiting for Berths P. S. A. Wharves 1965 Date Jan. Feb. Mar. Apr. May Jun. July La. Sept. Oct. Nov. Dec. 1st 4 0 0 0 0 3 2 0 1 0 0 2nd 0 0 1 0 0 0 0 0 1 0 0 0 3rd 0 7 0 0 0 0 0 1 1 0 0 0 4th 2 4 1 0 0 0 0 0 0 0 0 0 5t;h 0 3 0 2 0 0 0 0 0 0 0 0 6th 0 1 0 0 0 0 0 0 0 0 0 0 7th 0 2 0 0 0 0 0 0 0 0 0 0 8th 2 0 0 0 3 0 0 0 0 0 0 0 9th 0 0 0 0 0 0 1 0 0 0 0 1 10th 0 0 0 0 6 1 0 0 0 0 2 0 11th 0 0 0 0 6 0 2 0 0 1 0 0 12th 2 0 1 0 3 0 1 0 0 3 0 0 13th 2 0 0 0 1 0 0 0 0 2 0 0 14th 0 0 0 0 0 0 1 1 0 1 0 0 15th 1 0 0 0 0 0 0 2 0 0 1 0 16th 0 4 0 0 0 0 0 0 0 1 0 0 17th 0 5 0 0 0 0 0 0 0 0 0 0 18th 0 1 0 0 0 0 0 4 0 0 0 0 19th 0 5 0 0 0 0 0 6 2 1 0 0 20th 2 1 0 0 0 0 1 2 2 0 1 0 21st 0 0 0 0 0 1 0 0 0 0 0 0 22nd 0 0 2 0 0 0 0 0 0 0 0 0 23rd 0 3 2 0 0 0 0 1 1 0 0 0 24th 0 0 0 0 0 1 0 1 0 0 0 0 25th 0 1 0 0 0 0 0 0 0 1 0 0 26th 0 0 0 1 0 2 0 2 1 1 0 0 27th 0 3 0 0 0 0 4 2 0 0 1 28th 0 10 0 6 0 0 0 3 5 0 0 0 29th 0 0 0 6 0 0 0 1 2 0 0 0 30th 0 0 1 4 0 0 0 1 1 0 2 1 31st 0 0 4 0 0 0 0 1 0 0 0 0 TOTAL: 15 50 17 23 19 5 9 32 18 12 6 3 Source: Port of Singapore Authority  PORT OF SINGAPORE AUTHORITY PROJECT ITEF. AND ESTIMATED COST (M$ Million) As Described in TO-483a - July 1965 As Modified - April 1966 Local Foreign Local Foreign Total Currency Exchange Total Currency Exchange 1. East Lagoon Scheme - 4 new berths 47.6 24.5 23.1 1. East Lagoon Scheme - 4 new berths 47.6 2h.5 23.1 2. Port Engineer's Plantyard 1.7 0.7 1.0 2. Port Engineer's Plantyard 1.7 0.7 1.0 3. Floating Craft 3. Floatine Craft (a) 1 - Large Fire Float 1.1 - 1.1 (a) 1 - Large Fire Float 1.1 - 1.1 1 - Small "1 n 0.3 - 0.3 (b) 1 - Self-propelled Buck