Senegal - Port of Dakar Project

RESTRICTED RETURN TO FIL Report No. TO-569a REPORTS DESK FILE C0py WITHIN O EWEEK 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 The report may not be published nor moy it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF PORT OF DAKAR PROJECT REPUBLIC OF SENEGAL April 5, 1967 Projects Department  CURRENCY EQUIVALENTS 1 CFA franc = USe 0.4 CFAF 247 = US $1 CFAF 1 million = US $4, 050 WEIGHTS AND MEASURES EQUIVALENTS 1 meter (m) = 3. 28 feet 1 kilometer (km) = 0. 62 mile 1 square meter (m ) = 10. 76 square feet 1 hectare (ha) = 2.47 acres 1 square 2 kilometer (km ) = 0. 386 square mile 1 cubic meter (m ) = 35. 31 cubic feet 1 metric ton (ton) = 2, 205 pounds FISCAL YEAR July 1 - June 30  REPUBLIC OF SEIEGAL APPRAISAL OF PORT OF DAKAR PROJECT TABLE OF CONTENTS Page SUMMARY I. INTRODUCTION 1 II. BACKGROUND 1 A. General 1 B. Transport System 2 C. Ports System 3 III. PORT OF DAKAR 3 A. General 3 B. Organization and Management h C. Present Facilities and Traffic Distribution 6 IV. OPERATIONS AND TRAFFIC 6 A. Shipping 6 B. Operational Factors 7 C. Traffic 8 V. ACCOUNTS AND FINANCE 9 A. Accounts 9 B. Valuation of Fixed Assets 10 C. Income Accounts 10 D. Financial Position il E. Control and Auditing il VI. THE PORT'S SECOND FOUR-YEAR DEVELOPMENT PLAN 1965-1969 AND THE PROJECT 12 A. The Plan 12 B. Description of the Project 13 C. Execution of the Project 15 D. Project Cost 15 VII. FUTURE EARNINGS AND PROJECT FINANCING 17 A. Port Charges 17 B. Forecast Operating Income and Expenses 18 C. Project Financing and Proposed Bank Loan 20 D. Forecast Cash Flow 21 E. Forecast Balance Sheets 22 This appraisal report is based on the findings of a Bank Mission to Senegal in April/May 1966 consisting of Messrs. Bickers, De Gryse, Heien, Higgin- bottom and Honavar.  Page 2 Table of Contents Page VIII. ECONOMIC JUSTIFICATION 22 A. Traffie Forecasts 22 B. Economic Justification of the Project 23 IX. CONCLUSIONS AIN RECOMMENDATIONS 27 TABLES 1. Existing Quays - Length, Depth of Water and Type of Traffic. 2. Details of Transit Sheds and Storage Areas. 3. Shipping Traffic, 1955-1965. 4. Berth Occupancy and Rate of Cargo Handling. 5. Imports 1962-1971. 6. Exports 1962-1971. 7. Summary Balance Sheets 1960-1965 as pei Port Authority's Books. 8. Summary Income Account 1960-1965 as per Port Authority's Books. 9. Amended Summary Income Account 1960-1965. 10. Amended Summary Balance Sheets 1960-1965. 11. Forecast Operating Income and Expenditure, 1965/66 - 1970/71. 12. Forecast Cash Flow, 1965/66 - 1970/71. 13. Summary pro-forma Balance Sheets as of June 30, 1966-1971. ANIIEXES A. Valuation of Net Fixed Assets at August 1, 1960. B. Adjustments made in Income Accounts and Balance Sheets, August 1, 1960 - June 30, 1965. C. Notes on Forecast Operating Income and Expenditure (Table 11). MAPS 1. Dakar - Location. 2. Senegal Ports 3. Dakar - Existing Quays and Depth of Water. 4. Dakar - Project.  REPUBLIC OF SENEGAL APPRAISAL OF PORT OF DAKAR PROJECT SUMMARY i. The Bank has been requested by the Government of Senegal and the Port Authority of Dakar to help finance improvements to the port of Dakar. ii. The port of Dakar handles about 2.4 million tons of dry cargo which is expected to rise to 3.7 million tons by 1970/71. In addition, by virtue of its geographical position, Dakar is an important bunkering port. iii. The port is controlled by an autonomous Governnent-owned Port Authority, the decisions of which are subject to Government approval. Operations and maintenance are well conducted; all cargo and stevedoring operations are carried out by private companies which rent the facilities from the Port Authority. iv. The project consists of the larger part of the Government's Second Four-Year Development Plan 1965-69 for the port; it comprises those items in the Plan that the Bank considers justified at the present time, that is: the extension of one mole, which is operated as a custom-free zone for Mali traffic; the reconstruction of two quay walls; dredging totalling about 500,000 m3; and consulting services. The first part of the project (30% of its total cost) has already been placed under contract in accordance with international bidding procedures considered satisfactory by the Bank; it is proposed to reimburse from the loan part of the project expenditures incurred since November 15, 1966. Future contracts will also be let on the basis of international competitive bidding. The Port Authority, assisted by consultants, would be responsible for executing the project. v. The total cost of the project is estimated at CFAF 1,705 million (US$ 6.9 million equivalent), and the proposed loan of CFAF 989 million (US$ 4.0 million equivalent) would cover the estimated foreign exchange cost of the project, and which represents 58% of the total cost. vi. In addition to the project investments, other measures will be taken to increase revenue and reduce costs which will enable the Port Authority to earn a satisfactory return on its investment. vii. The project is technically sound ard is justified on economic grounds. In addition it will help to ensure continued cooperation between Senegal and Mali. viii. The project provides a suitable basis for a Bank loan of US$ 4.0 million. The loan would be made to the Port Authority of Dakar with a term of 15 years, including 3