China - Shanghai Port Restructuring and Development Project

 ICRR 10561 Report Number : ICRR10561 ICR Review Operations Evaluation Department 1. Project Data : Date Posted : 06/06/2000 PROJ ID : P003512 OEDID: OEDID : L3552 Appraisal Actual Project Name : Shanghai Port US$M ) Project Costs (US$M) 424.25 314.71 Restructuring and Development Project Country : China Loan /Credit (US$M) Loan/ US$M ) 150.0 120.07 Sector, Major Sect .: Ports & Waterways , US$M ) Cofinancing (US$M) Transportation L/C Number : L3552 FY ) Board Approval (FY) 93 Partners involved : Closing Date 06/30/1999 06/30/1999 Prepared by : Reviewed by : Group Manager : Group : Binyam Reja Ronald S. Parker Ridley Nelson OEDST 2. Project Objectives and Components a. Objectives The main project objectives were to help the Port of Shanghai in : The long-term development of the port and the use of its facilities by gradually shifting port operations away from the congested city center and by promoting terminal specialization; Providing needed additional capacity in a rational, optimal, and environmentally sound way; and Increasing efficiency by introducing modern methods of operational and financial management . b. Components To achieve the above objectives, the project comprised the following components : 1. Procurement of handling equipment to improve cargo handling efficiency and promote terminal specialization; 2. Improvement of the Shanghai Port Authority's financial condition through tariff restructuring and computerization of accounting, auditing and budgetary control; 3. The construction of a container terminal at Waigaiqiao and a coal terminal at Luojing; and 4. Technical assistance and training . c. Comments on Project Cost, Financing and Dates The project was approved on December 22, 1992 and was closed on June 30, 1999 as scheduled. The original loan amount of US$150 million was revised down to US$124.26 on November 30, 1997 to take account of savings from project costs. Total disbursement on the loan was US$ 120.07 and the remaining balance of US$4.19 was canceled. The total project cost at closing was US$ 314.71 compared to the original estimate of US$424.25. 3. Achievement of Relevant Objectives : The project substantially achieved all of its objectives . It resulted in savings in cargo -handling costs, ship waiting and berthing time and cargo time. The physical and institutional components were satisfactorily implemented . The Waigaiqiao and Luojing terminals were constructed, implementation of corporate planning and several studies for specialization of terminal operations were carried out, and replacement equipment for existing terminals was procured. Technical assistance and training were provided to managers and workers of the Shanghai Port Authority (SPA), resulting in enhanced operational and maintenance capacity of the SPA . A Port Tariff System was established to rationalize the financial management of the SPA . The economic rate of return (ERR) was estimated at 29.2 percent versus 36.7 percent in the SAR. 4. Significant Outcomes /Impacts : The competitive pressure from the joint -venture container terminal operator, SCT, ensured that terminal operations remain competitive. The Waigaiqiao terminal's productivity equals that of the SCT and is comparable with international standards. However, because SPA is half-owner of the SCT, the benefits of competition may not have been fully realized. 5. Significant Shortcomings (including non -compliance with safeguard policies ): None. 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Highly Satisfactory Satisfactory The objective to transfer facilities away from the city center was not fully achieved. Institutional Dev .: Substantial Substantial Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : The ICR identifies the following lessons : (i) Public sector performance can be compatible with joint -venture operators if the environment is sufficiently competitive . However, SPA as half-owner of the SCT was essentially competing with itself. (ii) SPA's past experience in completing Bank -financed projects was a factor in successful implementation; and (iii) the continuity of SPA and Bank staff contributed to the success of the project . 8. Audit Recommended? Yes No 9. Comments on Quality of ICR : The ICR is satisfactory. It provides a good account of the project's implementation experience and results . The section on "Lessons Learned" could have been developed more .