Tunisia - Second Port Project

RESTRICTED FILE COPY Report No. P-649 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 The report may not be published nor may it be quoted as representing their views.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 REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED SECOND PORT LOAN TO THE OFFICE DES PORTS NATIONAUX TUNISIENS WITH THE GUARANTEE OF THE REPUBLIC OF TUNISIA November 13, 1968  INTF,I.ATIONAL BANK FOR RECONSTRUCTION AND DEVEIOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED SECOND FORT IOAN TO THE OFFICE DES PORTS NATIONAUX TUNISIENS (OPNT) WITH THE GUARANTEE OF THE REPUBLIC OF TUNISIA 1. I submit the following report and recommendation on a proposed loan in an amount in various currencies equivalent to US$8.5 million to the Office des Ports Nationaux Tunisiens (OPNT) with the Guarantee of the Republic of Tunisia to assist in financing improvements to the ports under the control of OPNT. 2. This report and recommendation replaces the one which was circulated to the Executive Directors under cover of the Secretaryws memorandum of June 13, 1968. At that time it was envisaged that the project would be financed by the international Development Association and a draft Development Credit Agreement was forwarded for your consideration along with the Project Agree- ment. In view of the delays in IDA rreplanishment, it is proposed, with the concurrence of the Governnant of Tunisia, to have the project financed by the Bank. New lhoan d'ocuments to replace the draft credit documents are being distributed to reflect this change. PART I - HISTORICAL 3. The proposed loan would be the second for port development in Tunisia. The first, Loan 380 TUN, in the amouint of $7 million, was signed on June 5, 1964, but did not become effective until June 1965 because of the difficulties encountered in meeting the condition that an autonomous port authority be established. Thereafter, the project was carried out satisfactorily and work was completed by November 1967. The loan was fully disbursed by its revised Closing Date of March 31, 1968. 4. In August 1966 OPNT approached the Bank group requesting financing for a number of supplementary items to improve the effi- ciency of OPNT1s Ports. The project consisting of such items was prepared and appraised in the course of discussions between the Tunisian authorities and Bank missions wjhich visited Tunisia in March and November 1967 and March 1968. As a result of these discussions some of the original items were dropped from the project and others were added, among the latter being a grain storage silo and associated handling equipment, and the restoration of the breakwater at Bizerte. The loan as finally negotiated has increased in scope and, at $8.5 million, is for a larger amount than originally contemplated.  - 2 - 5. Negotiations for the originally proposed IDA credit took place in Washington on June 5-11, 1968. The Government of Tunisia was represented by Messrs. Ammar, Minister at the Tunisian Embassy, and Ladjimi, of the Ministry of Public Works, and OPNT by Messrs. Goucha, Director General of OPNT, and Aouij, legal adviser. Bank, IDA and IFC Operations 6. The proposed loan, the fifth for Tunisia, would increase the Bankls total lending to Tunisia to $42.5 million, while the Associationts lending amounts to $23.9 million. Following is a summary statement of Bank loans and IDA credits to Tunisia as of October 31, 1968: Loan or Credit Amount (US$ million) Number Year Borrower LLPe_se Bank IDA Undisbursed 29 1962 Republic of Tunisia Education - 4.9 380 1964 Republic of Tunisia Port Develop- 7,0; - - ment 449 1966 St6 Nat. dlInvestis- Dev. Finance 5XO - 1.5 sement Co. 94 1966 Republic of Tunisia Education 13